Exhibit 10.4
EXECUTIVE COMPENSATION
AGREEMENT
This Executive Compensation
Agreement (the “ Agreement ”) is made and
entered into effective as of March 13, 2009, by and between
Discover Financial Services, a Delaware corporation (the “
Company ”), and the executive name below (the “
Executive ”).
WHEREAS , the Company, through the Compensation
Committee of its Board of Directors (the “ Committee
”), has adopted the Discover Financial Services Change in
Control Severance Policy (“ Policy ”) effective
September 21, 2007, as amended; and
WHEREAS , the Company, through the Committee, also has
made certain equity-based compensation awards to the Executive (the
“ Discover Awards ”), and provides compensation
and benefits through other plans, programs and arrangements (such
plans, programs and arrangements are herein referred to
collectively as the “ Discover Plans ”);
and
WHEREAS , Morgan Stanley also has made certain
equity-based compensation awards to the Executive, which were
converted to Company equity-based awards in connection with the
Company’s spin-off from Morgan Stanley (the “ Morgan
Stanley Awards ” and together with the Discover Awards
are referred to herein as the “ Awards ”), and
provides compensation and benefits through other plans, programs
and arrangements (such plans, programs and arrangements are herein
referred to collectively as the “ Morgan Stanley Plans
” and together with the Discover Plans are referred to herein
as the “ Plans ”); and
WHEREAS , the United States Department of the Treasury
(the “ UST ”) has implemented and will implement
various capital access programs for financial institutions under
the Troubled Asset Relief Program (“TARP”) established
by the Emergency Economic Stabilization Act of 2008, as amended by
the American Recovery and Reinvestment Act of 2009
(“EESA”); and
WHEREAS , EESA imposes certain requirements and
conditions for institutions that wish to participate in the TARP,
including the imposition of certain restrictions on executive
compensation; and
WHEREAS , the UST has promulgated regulations on the
application of these restrictions, and the UST retains the right to
and may promulgate additional requirements and guidelines for
institutions that wish to participate in the TARP; and
WHEREAS , the Company and the Executive believe that it
is in the best interests of the Company to participate in the TARP
in order to utilize a potential new source of capital that will
provide the Company with economic benefits; and
WHEREAS , the Company and the Executive now consider it
desirable to amend the Policy, Plans and Awards by this Agreement
to qualify for participation in the TARP;
NOW THEREFORE
, in consideration of the mutual
promises herein made and for the benefits the Executive will
receive as a result of the Company’s participation in the
TARP, the
sufficiency of which are expressly acknowledged,
the Company and the Executive agree as follows:
1. During any period in which any
obligation arising from financial assistance provided under the
TARP remains outstanding, not including any period during which the
Federal Government only holds warrants to purchase common stock of
the Company (the “TARP Obligation Period”),
notwithstanding any other provision of the Policy, Plans or Awards,
to the contrary, the limitations and restrictions of
Section 111 of EESA will
