UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of the

Securities Exchange Act of 1934

 

 

 

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☒	Definitive Proxy Statement

 

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☐	Soliciting Material Pursuant to §240.14a-12

NCR CORPORATION

(Name of Registrant as Specified In Its Charter)

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

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March 12, 2020

NCR Stockholders,

NCR had a great year in 2019! We established a clear priority for the year:  return to profitable growth, with a very simple goal to keep our customers happy and satisfied so that they come back and buy more.  Our 2019 results show you that we executed well to meet this priority with improvements in revenue and a deep strengthening of our customer-first culture.

We also launched 2019 with a plan for creating long-term stockholder value driven by three components.  First, invest in top-line revenue growth.  Second, shift our business mix to recurring revenue streams and software and services-led offerings.  Third, optimize NCR’s spend to improve operating margins.  As 2019 progressed, we also focused our energy on transforming NCR to an as-a-Service company.

We made tremendous progress in 2019 toward executing our strategy for a successful future.  I am proud of our team and their commitment to our customers, as well as the energy and excitement they continue to show in reshaping NCR.  This focused strategy resulted in a year in which we strengthened our recurring revenue capabilities through the prioritization of strategic growth platforms, began integrating our payments processing solution, returned Digital Banking to growth, generated year-over-year sales growth in each of our segments and created a culture of accountability through our organizational structure.

We also made several complementary acquisitions to enrich or extend our presence in the industries we serve.  These include expanding our market reach and presence in Latin America by repurchasing the minority interest in our Manaus, Brazil joint venture and entering into an agreement to acquire select software and services assets from OKI Brazil, enhancing our market reach in Digital Banking with D3, strengthening our local office presence in Hospitality through acquiring three of our local resellers and acquiring a foundational building block of our next-generation retail architecture with virtualization technology provider Zynstra.

As a result, we enter 2020 with strong momentum to further accelerate our transition to a software and services-led enterprise and an as-a-Service company.  These steps will further position NCR for sustainable long-term growth as we deliver increased value to customers and help provide them the solutions they need to run their stores, restaurants and self-service banking channels.

Thank you for your confidence in NCR, your continued feedback and for sharing our vision of NCR’s future.

Sincerely,

 

 

 

 

Michael D. Hayford

President and Chief Executive Officer

 

NOTICE OF 2020 ANNUAL MEETING

AND PROXY STATEMENT

March 12, 2020

Dear Fellow NCR Stockholder:

I am pleased to invite you to attend the 2020 Annual Meeting of Stockholders (the “Annual Meeting”) for NCR Corporation, a Maryland corporation (“NCR” or the “Company”), that will be held on April 21, 2020, at 12:30 p.m. Eastern Time.  This year’s Annual Meeting will again be a virtual meeting of stockholders.  You will be able to attend the Annual Meeting and vote and submit questions during the Annual Meeting via a live webcast by visiting www.virtualshareholdermeeting.com/NCR2020.  As in the past, prior to the Annual Meeting you will be able to authorize a proxy to vote your shares at www.proxyvote.com on the matters submitted for stockholder approval at the Annual Meeting, and we encourage you to do so.

The accompanying notice of the Annual Meeting and proxy statement tell you more about the agenda and procedures for the Annual Meeting.  The proxy statement also describes how the Board of Directors of the Company operates and provides information about our director candidates, director and executive officer compensation and certain corporate governance matters.  I look forward to sharing more information with you about NCR at the Annual Meeting.

As in prior years, we are offering our stockholders the option to receive NCR’s proxy materials via the Internet.  We believe this option allows us to provide our stockholders with the information they need in an environmentally conscious form and at a reduced cost.

Your vote is important.  Whether or not you plan to virtually attend the Annual Meeting, I urge you to authorize a proxy to vote your shares as soon as possible.  You may authorize a proxy to vote your shares on the Internet or by telephone, or, if you received the proxy materials by mail, you may also authorize a proxy to vote your shares by mail.  Your vote will ensure your representation at the Annual Meeting regardless of whether you attend via webcast on April 21, 2020.

Sincerely,

 

 

Frank R. Martire

Executive Chairman

 

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS OF NCR CORPORATION

 

 

Time:

12:30 p.m. Eastern Time

Date:

Wednesday, April 21, 2020

Place:

 

Virtual Meeting via webcast at www.virtualshareholdermeeting.com/NCR2020

Purpose:

The holders of shares of common stock, par value $0.01 per share (the “common stock”), and shares of Series A Convertible Preferred Stock, par value $0.01 per share, with a liquidation preference $1,000 per share (the “Series A Convertible Preferred Stock”), of NCR Corporation, a Maryland corporation (“NCR” or the “Company”) will, voting together as a single class, be asked to:

 

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Consider and vote upon the election of ten directors identified in this proxy statement to serve until the next annual meeting of stockholders following their election and until their respective successors are duly elected and qualify;

 

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Consider and vote to approve, on an advisory basis, the compensation of the named executive officers (Say On Pay), as described in these proxy materials;

 

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Consider and vote upon the ratification of the appointment of PricewaterhouseCoopers LLP as the Company’s independent registered public accounting firm for the fiscal year ending December 31, 2020;

 

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Consider and vote upon a proposal to amend the NCR Corporation 2017 Stock Incentive Plan;

 

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Consider and vote upon a directors’ proposal to amend and restate the charter of the Company to eliminate the supermajority provisions contemplated by the Company’s charter and make certain conforming changes thereto; and

 

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Transact such other business as may properly come before the 2020 Annual Meeting of Stockholders (the “Annual Meeting”) and any postponement or adjournment of the Annual Meeting.

Other Important Information:

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Record holders of NCR’s common stock and Series A Convertible Preferred Stock at the close of business on February 28, 2020 may vote at the meeting.

 

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Your shares cannot be voted unless they are represented by proxy or in person by the record holder attending the meeting via webcast.  Even if you plan to attend the Annual Meeting via webcast, please authorize a proxy to vote your shares.

 

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If you wish to attend the webcast at a location provided by the Company, the Company’s Maryland counsel, Venable LLP, will air the webcast at its offices located at 750 E.  Pratt Street, Suite 900, Baltimore, MD 21202.  Please note that no members of management or the Board of Directors will be in attendance at this location.  If you wish to attend the meeting webcast at Venable LLP’s office, please follow the directions for doing so set forth on the “2020 Annual Meeting of Stockholders Reservation Request Form” found at the end of this proxy statement.

By order of the Board of Directors,

 

 

James M. Bedore

Executive Vice President, General Counsel and Secretary

March 12, 2020

Important Notice Regarding the Availability of Proxy Materials for the

Stockholder Meeting to Be Held on April 21, 2020

This proxy statement and NCR’s 2019 Annual Report on Form 10-K are available at www.proxyvote.com.

NCR Corporation

864 Spring Street NW

Atlanta, Georgia 30308-1007

 

NCR  CORPORATION

2020 ANNUAL MEETING PROXY STATEMENT

 

Proxy Statement – General Information

 

 

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NCR Stock Ownership

 

Officers and Directors

The following table reflects the NCR common stock beneficially owned, as determined under applicable SEC rules, as of the close of business on February 15, 2020 (the “Table Date”) by:  (i) each individual named in our Summary Compensation Table (the “named executives”), (ii) each non-employee director and nominee, and (iii) all current directors and executive officers as a group.  Except to the extent indicated in the footnotes below, to NCR’s knowledge each person named in the table below has sole voting and investment power over the shares reported.  As of the Table Date, 128,651,400 shares of the Company’s common stock were issued and outstanding, and none of the persons named in the table below owned, beneficially or of record, any shares of NCR’s Series A Convertible Preferred Stock.  Unless otherwise noted below, the address of each beneficial owner listed in the table is: c/o NCR Corporation, 864 Spring Street NW, Atlanta, Georgia, 30308.

 

NCR Stock Ownership By Officers and Directors
Beneficial Owners		Total Shares Beneficially Owned(1)(2)					Percent					Number of Shares Subject to Options Exercisable Within 60 Days of February 15, 2020					Number of RSUs That Vest Within 60 Days of February 15, 2020(3)
Non-Employee Directors
Gregory R. Blank, Director(4)				—					*					—					—
Catherine (Katie) L. Burke				2,452					*					—					—
Chinh E. Chu, independent Lead Director				34,961					*					—					—
Richard L. Clemmer, Director				181,767					*					34,881					—
Robert P. DeRodes, Director				155,363					*					34,881					—
Deborah A. Farrington, Director				15,877					*					—					—
Kurt P. Kuehn, Director				60,821					*					10,039					—
Kirk T. Larsen, Director				2,452					*					—					—
Linda Fayne Levinson, Director				214,276					*					21,051					—
Matthew A. Thompson, Director				16,513					*					—					—
Named Executive Officers
Michael D. Hayford, Director and Officer				448,694					*					308,535					—
Frank R. Martire, Director and Officer				234,491					*					152,224					—
Owen J. Sullivan, Officer				250,193					*					176,876					—
Andre J. Fernandez, Officer				131,473					*					71,962					—
Paul Langenbahn, Officer(5)				264,981					*					82,104					95,952
Current Directors and Executive Officers as a Group (22 persons)				2,497,128					1.9%					1,138,933					205,681

* Less than 1%.

(1) Includes shares that each person had the right to acquire on or within 60 days after the Table Date, including, but not limited to, upon the exercise of options and vesting and payment of restricted stock units.  Excludes these restricted stock units granted as of the Table Date that vest more than 60 days after the Table Date: Mr. Hayford 528,131; Mr. Martire 208,255; Mr. Sullivan 307,839; Mr. Fernandez 234,638; and Mr. Langenbahn 118,687.

(2) All fractional shares have been rounded to the nearest whole number.  The total includes these shares deferred under our Director Compensation Program: 115,600 shares granted to Mr. Clemmer; 50,029 shares granted to Mr. DeRodes; 48,902 shares granted to Mr.  Kuehn; and 8,077 shares granted to Ms. Levinson.

 

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(3) Reflects shares that the officers and directors have the right to acquire through vesting of restricted stock units within 60 days after the Table Date (without taking into account share withholding to cover taxes).  These shares are also included in the Total Shares Beneficially Owned column.

(4) Mr. Blank received no compensation under our Director Compensation Program for the portion of 2019 and earlier years that he was the Board designee of The Blackstone Group L.P. (“Blackstone”), due to Blackstone’s ownership of certain NCR Series A Convertible Preferred Stock (“Preferred Stock”). Mr. Blank began receiving standard director compensation under the Program (on a prorated basis) on substantially the same terms as other NCR directors for his continued director service following the retirement of such Preferred Stock effective September 20, 2019, Mr. Blank’s prorated annual equity grant under the Program was not made until 2020, and does not vest until April 24, 2020, and as such is not shown on the Table.

(5) For SEC reporting purposes, Mr. Langenbahn uses the following address: 14770 Trinity, Fort Worth, TX 76155.

 

Other Beneficial Owners of NCR Common Stock

To the Company’s knowledge, and as reported as of the close of business on February 18, 2020 (except as otherwise specified), the following stockholders beneficially own more than 5% of the Company’s outstanding stock.

 

		Common Stock
Name and Address of Beneficial Owner		Total Number of Shares				Percent of Class
The Vanguard Group(1)			12,896,662				10.10	%
100 Vanguard Boulevard
Malvern, PA 19355
BlackRock, Inc.(2)			11,764,117				9.20	%
55 East 52nd Street
New York, NY 10055
Wells Fargo & Company(3)			8,827,820				6.92	%
420 Montgomery Street
San Francisco, CA 94163
Janus Henderson Group plc(4)			6,420,957				5.00	%
201 Bishopsgate EC2M 3AE
United Kingdom

(1) Information, including ownership percentage, is based on a Schedule 13G/A filed with the SEC on February 12, 2020 by The Vanguard Group (“Vanguard”), reporting beneficial ownership of 12,896,662 shares of the Company’s stock as of December 31, 2019.  In this filing, Vanguard reported sole dispositive power with respect to 12,808,670 of such shares, sole voting power with respect to 72,065 of such shares, shared dispositive power with respect to 87,992 of such shares and shared voting power with respect to 31,990 of such shares.  Vanguard also reported that Vanguard Fiduciary Trust Company, a wholly-owned subsidiary of The Vanguard Group, Inc., is the beneficial owner of 56,002 of such shares as investment manager of collective trust accounts, and that Vanguard Investments Australia, Ltd., a wholly-owned subsidiary of The Vanguard Group, Inc., is the beneficial owner of 48,053 of such shares as a result of serving as investment manager of Australian investment offerings.

(2) Information, including ownership percentage, is based on a Schedule 13G/A filed with the SEC on February 5, 2020 by BlackRock, Inc. (“BlackRock”), reporting beneficial ownership of 11,764,117 shares of the Company’s stock as of December 31, 2019, as a parent holding company or control person for its subsidiaries, BlackRock Life Limited, BlackRock Advisors, LLC, BlackRock (Netherlands) B.V., BlackRock Fund Advisors, BlackRock Institutional Trust Company, National Association, BlackRock Asset Management Ireland, Limited, BlackRock Financial Management, Inc., BlackRock Japan Co., Ltd., BlackRock Asset Management Schweiz AG, BlackRock Investment Management, LLC, BlackRock Investment Management (UK) Limited, BlackRock Asset Management Canada Limited, BlackRock (Luxembourg) S.A., BlackRock Investment Management (Australia) Limited and BlackRock Advisors (UK) Limited.  In this filing, BlackRock reported sole voting power with respect to 11,276,897 of such shares, and sole dispositive power with respect to all 11,764,117 of such shares.

(3) Information, including ownership percentage, is based on a Schedule 13G/A filed with the SEC on February 4, 2020 by Wells Fargo & Company (“Wells Fargo”), reporting beneficial ownership of 8,827,820 shares of the Company’s stock as of December 31, 2019, on behalf of itself and its subsidiaries, Wells Fargo Funds Management, LLC, Wells Fargo Bank, National Association, Wells Capital Management Incorporated, Wells Fargo Clearing Services, LLC, and Wells Fargo Advisors Financial Network, LLC.  In this filing, Wells Fargo reported sole dispositive power with respect to 184,262 of such shares, sole voting power with respect to 184,262 of such shares, shared dispositive power with respect to 8,643,558 of such shares and shared voting power with respect to 1,299,011 of such shares; Wells Capital Management Incorporated reported shared dispositive

 

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power with respect to 8,491,651 of such shares, and shared voting power with respect to 8,180,788 of such shares; and Wells Fargo Funds Management, LLC reported shared dispositive power with respect to 6,890,681 of such shares, and shared voting power with respect to 6,882,309 of such shares.

(4) Information, including ownership percentage, is based on a Schedule 13G/A filed with the SEC on February 14, 2020 by Janus Henderson Group plc (“Janus Henderson”), reporting beneficial ownership of 6,420,957 shares of the Company’s stock as of December 31, 2019.  In this filing, Janus Henderson reported shared dispositive power with respect to 6,420,957 of such shares and shared voting power with respect to 6,420,957 of such shares.  Janus Henderson also reported that Janus Henderson has an indirect 97% ownership stake in Intech Investment Management LLC and a 100% ownership stake in Janus Capital Management LLC (“JCM”), Perkins Investment Management LLC, Geneva Capital Management LLC, Henderson Global Investors Limited and Janus Henderson Global Investors Australia Institutional Funds Management Limited (each an “Asset Manager” and collectively as the “Asset Managers”).  Due to the above ownership structure, holdings for the Asset Managers are aggregated for purposes of this filing.  Each Asset Manager is an investment adviser registered or authorized in its relevant jurisdiction and each furnishing investment advice to various fund, individual and/or institutional clients (collectively referred to herein as “Managed Portfolios”).  As a result of its role as investment adviser or sub-adviser to the Managed Portfolios, JCM may be deemed to be the beneficial owner of 6,420,957 shares or 5.0% of the shares outstanding of NCR Common Stock held by such Managed Portfolios.  However, JCM does not have the right to receive any dividends from, or the proceeds from the sale of, the securities held in the Managed Portfolios and disclaims any ownership associated with such rights.

 

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Proposal 1 – Election of Directors

FOR		The Board of Directors recommends that you vote FOR Mark W. Begor, Gregory R. Blank, Catherine L. Burke, Chinh E. Chu, Deborah A. Farrington, Michael D. Hayford, Georgette D. Kiser, Kirk T. Larsen, Frank R. Martire and Matthew A. Thompson.

 

Proposal Details

The holders of shares of common stock and Series A Convertible Preferred Stock, voting together as a single class, are being asked to vote on the ten director nominees up for election, each to serve until the 2021 Annual Meeting and until their successors are duly elected and qualify.  Proxies solicited by the Board and properly authorized will be exercised for the election of each of the ten nominees: Mark W. Begor, Gregory R. Blank, Catherine L. Burke, Chinh E. Chu, Deborah A. Farrington, Michael D. Hayford, Georgette D. Kiser, Kirk T. Larsen, Frank R. Martire and Matthew A. Thompson, unless you elect to withhold your vote on your proxy.  The Board has no reason to believe that any of these nominees will be unable to serve. However, if one of them should become unable to serve prior to the Annual Meeting, the Board may reduce the size of the Board or designate a substitute nominee.  If the Board designates a substitute nominee, shares represented by proxies will be voted FOR the substitute nominee.

Richard L. Clemmer, Robert P. DeRodes, Kurt P. Kuehn and Linda Fayne Levinson, who are currently serving on the Board of Directors and whose terms are expiring on the date of the Annual Meeting, are not standing for re-election at the Annual Meeting.  It is expected that effective upon the expiration of the current terms of Mr. Clemmer, Mr. DeRodes, Mr. Kuehn and Ms. Levinson, the size of the board will be reduced.

The name, age, principal occupation, other business affiliations and certain other information regarding each nominee for election as a director are set forth below, along with a description of the qualifications that led the Committee on Directors and Governance to conclude that he or she meets the needs of the Board and supports the advancement of the Company’s long-term strategy.  The age reported for each director is as of the filing date of this proxy statement.

Mark W.  Begor, 61, is Chief Executive Officer and a member of the Board of Directors of Equifax, Inc., a consumer credit reporting agency, a position he has held since April 2018.  Prior to that he served as a Managing Director in the Industrial and Business services group at Warburg Pincus LLC (Warburg Pincus), a private equity firm, from 2016 to 2018.  Prior to joining Warburg Pincus, Mr. Begor spent 35 years at General Electric Co.  (GE), most recently as President and Chief Executive Officer of GE’s energy management business from 2014 to 2016.  Mr. Begor also served as Senior Vice President and a member of GE’s 30 person Corporate Executive Council and the GE Capital Board, and as a GE Officer for 19 years.  He also served as a member of the Board of Directors of Fair Isaac Corporation (FICO) from 2016 to 2018.

Qualifications.  Mr. Begor’s qualifications include his extensive leadership roles; his industry expertise; and his current and prior experience as a director and committee member of other public companies.

Gregory R. Blank, 39, is a Senior Managing Director of The Blackstone Group, Inc. (Blackstone), an American multi-national private equity, alternative asset management and financial services firm based in New York where he focuses on investments in the technology, media and telecommunications sectors. Since joining Blackstone in 2009, Mr. Blank has been involved in the execution of many of Blackstone’s investments, includinsg most recently in Kronos, JDA, Paysafe, Ipreo and Optiv. Prior to joining

 

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Blackstone, Mr. Blank was an associate at Texas Pacific Group (TPG) where he was involved in the evaluation and execution of private equity transactions. Before joining TPG, Mr. Blank worked in investment banking at Goldman, Sachs & Co. (Goldman Sachs) focused on technology, media and telecommunications clients. He currently serves as a director of Kronos, and previously served as a director of Travelport Worldwide Limited, Ipreo, Optiv and The Weather Company. Mr. Blank became a director of NCR on December 4, 2015.

Qualifications. Mr. Blank’s qualifications include his significant private equity and mergers and acquisitions experience with Blackstone and Goldman Sachs; his experience evaluating and managing acquisitions and investments in the technology and telecommunications industries; his experience as a director of other public and private companies; his financial expertise and literacy; his prior service on Tavelport’s Audit Committee; and his independence.

Catherine (Katie) L. Burke, 44, is Chief Strategy Officer at Daniel J. Edelman Holdings Inc. (Edelman), a global communications firm, a position she has held since January 6, 2019.  In addition, she is the head of Practices, Sectors and Intellectual Property at Edelman and is a member of Edelman’s Executive and Operations Committees. From 2008 to 2015, Mrs. Burke served in a variety of executive roles at Edelman including Global Chair of Public Affairs. In 2015, she founded and managed a communications firm, Katie Burke Communications, until she returned to Edelman in 2017.  Previously, Mrs. Burke served as Executive Vice President of Marketing and Communications at Nielsen Holdings plc.   Mrs. Burke became a director of NCR on September 23, 2019.

Qualifications. Mrs. Burke’s qualifications include her extensive experience and senior leadership roles in marketing, communications strategy and execution, and operations; her domestic and international experience in these areas; her financial literacy; and her independence.

Chinh E. Chu, 53, is the Founder and Managing Director at CC Capital Partners, LLC (CC Capital), a private equity firm he founded in 2015.  Mr. Chu is the co-founder of two special purpose acquisition companies, CF Corp. that was acquired by Fidelity & Guaranty Life, a life insurance company where Mr. Chu currently serves as Co-Executive Chairman, and Collier Creek Holdings, a special purpose acquisition company. Before forming CC Capital, Mr. Chu was Senior Managing Director at The Blackstone Group, Inc. (Blackstone), where he worked from 1990 to 2015 and served as Co-Chair of Blackstone’s Private Equity Executive Committee, as a member of the Investment Committee and on the firm’s Executive Committee. Mr. Chu previously served as a director of Catalent, Inc., Kronos Incorporated, SunGuard Data Systems, Inc., Freescale Semiconductor, Ltd., Biomet, Inc., Alliant, Celanese Corporation, Nalco Company, Nycomed, Alliant Services, Inc., the London International Financial Futures and Options Exchange, or LIFE, Graham Packaging, and AlliedBarton Security Services.  Mr. Chu is a member of the Board of Directors of Stearns Holdings, LLC, a holding company.  Mr. Chu became a director of NCR on December 4, 2015 and was appointed independent Lead Director effective February 22, 2016.

Qualifications.  Mr. Chu’s qualifications include his experience as a director of other public and private companies; his private equity experience; his extensive experience evaluating and managing acquisitions and investments in multiple industries with Blackstone and Salomon Brothers; and his independence.

Deborah A. Farrington, 69, is a founder and President of StarVest Management, Inc. (StarVest Management) and since 1999 has been a general partner of StarVest Partners, L.P.  (StarVest Partners), a venture capital fund that invests primarily in technology enabled business services and emerging software companies.  From 1993 to 1997, Ms. Farrington was President and Chief Executive Officer of Victory Ventures, LLC (Victory Ventures), a New York-based private equity investment firm.  Also during that period, she was a founding investor and Chairman of the Board of Staffing Resources, Inc., a diversified

 

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staffing company.  Prior to 1993, Ms. Farrington held management positions with Asian Oceanic Group in Hong Kong and New York, Merrill Lynch & Co. Inc. in Hong Kong and New York, and the Chase Manhattan Bank.  Ms. Farrington was Lead Director and Chairman of the Compensation Committee of NetSuite, Inc. (NetSuite), a NYSE-listed company, until its sale to Oracle Corporation in November 2016 for $9.4 billion.  Ms. Farrington is a member of the board of directors of Ceridian HCM Holdings. Inc., where she is Chairperson of the Nominating and Governance Committee and a member of the Audit Committee;  and Collectors Universe, Inc., where she is Chairperson of the Compensation Committee and a member of the Audit Committee and Nominating and Governance Committee.  Ms. Farrington became a director of NCR on November 27, 2017.

Qualifications.  Ms. Farrington’s qualifications include her significant software industry and entrepreneurial experience as a long-time investor in emerging software and business services companies as a founder and general partner of StarVest Partners;  her management experience as President of StarVest Management, as President and Chief Executive Officer of Victory Ventures, and her prior management roles;  her leadership experience, including as Lead Director of NetSuite;  her current and prior public company board and board committee experience;  her financial literacy and expertise; and her independence.

Michael D. Hayford, 60, is President and Chief Executive Officer of NCR, a position he has held since April 2018.  Mr. Hayford was most recently Founding Partner of Motive Partners, an investment firm focused on technology-enabled companies that power the financial services industry.  From 2009 until his retirement in 2013, Mr. Hayford served as the Executive Vice President and Chief Financial Officer at Fidelity National Information Services Inc. (FIS), a financial services technology company.  Prior to joining FIS, Mr. Hayford was with Metavante Technologies, Inc. (Metavante), a bank technology processing company, from 1992 to 2009. He served as the Chief Operating Officer at Metavante from 2006 to 2009 and as the President from 2008 to 2009.  From 2007 to 2009, Mr. Hayford also served on the Board of Directors of Metavante.   Mr. Hayford was a member of the Board of Directors and the Audit Committee of Endurance International Group Holdings, Inc. from 2013 to 2019, and was a member of the Board of Directors and Chairman of the Audit Committee of West Bend Mutual Insurance Company from 2007 to 2018.  Mr. Hayford became a director of NCR on April 30, 2018.

Qualifications.  Mr. Hayford’s qualifications include his significant leadership and management experience in his previous roles at FIS and Metavante, as well as his current role at NCR;  his industry expertise including in the financial services industry and bank technology processing; and his current and prior experience as a director and committee member of other public companies.

Georgette D. Kiser, 52, is an Operating Executive at The Carlyle Group (Carlyle), an American multinational private equity, alternative asset management and financial services corporation, a position she has held since May 2019.  From January 2015 to May 2019, Ms. Kiser served as a Managing Director and the Chief Information Officer for Carlyle.  From 1996 to 2015, Ms. Kiser served as Vice President of T. Rowe Price Associates, Inc. (T. Rowe Price), an American publicly owned global asset management firm that offers funds, advisory services, account management, and retirement plans and services for individuals, institutions, and financial intermediaries.  Prior to T. Rowe Price, Ms. Kiser worked for General Electric Company (GE) within their Aerospace Unit.  Ms. Kiser is a member of the Board of Directors of Aflac Incorporated, Adtalem Global Education Inc. and Jacobs Engineering Group Inc. Ms. Kiser became a director of NCR on February 7, 2020.

 

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Qualifications.  Ms. Kiser’s qualifications include her extensive experience and senior leadership and management experience in her position at Carlyle, and her former positions with T. Rowe Price and GE; her current and prior public company board and board committee experience; her technology, data security and digital platform expertise; her financial literacy and expertise; and her independence.

Kirk T.  Larsen, 48, is the Executive Vice President and Chief Financial Officer of Black Knight, Inc. (BKI), a provider of software, data and analytics to the mortgage and consumer loan, real estate and capital markets verticals, a position he has held since January 2014.  From January 2014 to April 2015, Mr. Larsen also served as the Executive Vice President and Chief Financial Officer of ServiceLink, a national provider of loan transaction services to the mortgage industry.  From July 2013 to December 2013, Mr. Larsen served as Corporate Executive Vice President, Finance and Treasurer, and from October 2009 to July 2013, served as Senior Vice President and Treasurer of Fidelity National Information Services Inc. (FIS), a financial services technology company.  He has also held senior leadership positions in finance, investor relations and financial planning and analysis in the fintech, payments and information technology industries at FIS as well as with companies like Rockwell Automation, Inc. and Ernst & Young Global Limited.  Mr. Larsen became a director of NCR on September 23, 2019.

Qualifications.  Mr. Larsen’s qualifications include his significant experience in leadership roles in publicly held technology companies including BKI and FIS;  his expertise in mergers and acquisitions, technology and software;  his financial literacy and expertise;  and his independence.

Frank R. Martire, 72, is Executive Chairman of NCR, a position he has held since May 2018.  Prior to that, Mr. Martire served as non-executive Chairman of Fidelity National Information Services Inc. (FIS).  From 2015 to 2017, he served as Executive Chairman of FIS, and from 2009 to 2015 was President and Chief Executive Officer of FIS after its acquisition of Metavante Technologies, Inc. (Metavante), a bank technology processing company.  Mr. Martire previously served as Chief Executive Officer of Metavante from 2003 to 2009 and President from 2003 to 2008.  Prior to that, he was President and Chief Operating Officer of Call Solutions Inc. from 2001 to 2003, and President and Chief Operating Officer, Financial Institution Systems and Services Group, of Fiserv, Inc. (Fiserv), from 1991 to 2001.  Mr. Martire serves as Chairman of the Board of Directors of J. Alexander’s Holdings, Inc. and is a member of the Board of Directors of Cannae Holdings, Inc.  Mr. Martire became a director of NCR on May 31, 2018.

Qualifications.  Mr. Martire’s qualifications include his current and prior experience as a director, including Executive Chairman and non-executive Chairman roles, of other public companies; his significant leadership and management experience in his previous roles at FIS, Metavante and Fiserv;  and his broad industry expertise including in the financial services industry and bank technology processing.

Matthew A. Thompson, 61, currently serves as Executive Vice President, Worldwide Field Operations, for Adobe Inc. (Adobe), a multinational computer software company.  Mr. Thompson joined Adobe in January 2007 as Senior Vice President, Worldwide Field Operations.  In January 2013, he was promoted to Executive Vice President, Worldwide Field Operations.  Prior to joining Adobe, Mr. Thompson served as Senior Vice President of Worldwide Sales at Borland Software Corporation (Borland), a software delivery optimization solutions provider, from October 2003 to December 2006.  Prior to joining Borland, Mr. Thompson was Vice President of Worldwide Sales and Field Operations for Marimba, Inc., a provider of products and services for software change and configuration management, from February 2001 to

 

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January 2003.  From July 2000 to January 2001, Mr. Thompson was Vice President of Worldwide Sales for Calico Commerce, Inc., a provider of eBusiness applications.  Prior to joining Calico, Mr. Thompson spent six years at Cadence Design Systems, Inc., a provider of electronic design technologies.  While at Cadence, from January 1998 to June 2000, Mr. Thompson served as Senior Vice President, Worldwide Sales and Field Operations and from April 1994 to January 1998 as Vice President, Worldwide Professional Services.  Mr. Thompson became a director of NCR on October 24, 2017.

Qualifications.  Mr. Thompson’s qualifications include his experience in and knowledge of the software industry, particularly with respect to SaaS-based software solutions and digital transformation;  his skills and experience in domestic and international software sales and sales strategy, including leading Adobe’s global sales organization;  his experience with software customers and customer-facing roles;  his financial literacy and expertise;  his leadership experience;  and his independence.

 

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How Does the Board Recommend that I Vote on this Proposal?

 

Board Recommendation

The Board of Directors recommends that you vote FOR Mark W. Begor, Gregory R. Blank, Catherine L. Burke, Chinh E. Chu, Deborah A. Farrington, Michael D. Hayford, Georgette D. Kiser, Kirk T. Larsen, Frank R. Martire and Matthew A. Thompson as directors to serve until the next annual meeting of stockholders following their election and until their respective successors are duly elected and qualify.  Proxies received by the Board will be voted FOR all nominees for which the stockholder may vote unless they specify otherwise.

 

Vote Required for Approval

A majority of all the votes cast by holders of our common stock and Series A Convertible Preferred Stock, voting together as a single class (in person via attendance at the virtual Annual Meeting or by proxy), with the holders of Series A Convertible Preferred Stock voting on an as-converted basis, is required to elect Mark W. Begor, Gregory R. Blank, Catherine L. Burke, Chinh E. Chu, Deborah A. Farrington, Michael D. Hayford, Georgette D. Kiser, Kirk T. Larsen, Frank R. Martire and Matthew A. Thompson (all of the director nominees).  Abstentions and broker “non-votes” will not be counted as votes cast and will have no effect on the vote required to elect each of these director nominees.

 

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More Information About Our Board of Directors

The Board oversees the overall performance of the Company on behalf of the stockholders of the Company.  Members of the Board stay informed of the Company’s business by participating in Board and committee meetings (including regular executive sessions of the Board), by reviewing materials provided to them prior to meetings and otherwise, and through discussions with the Chief Executive Officer and other members of management and staff.

 

Corporate Governance

 

General

The Board is elected by the stockholders of the Company to oversee and direct the management of the Company.  The Board selects the senior management team, also currently known as the Executive Leadership Team, which is charged with managing the Company’s business and affairs.  Having selected the senior management team, the Board acts as an advisor to senior management and monitors its performance.  The Board reviews the Company’s strategies, financial objectives and operating plans.  It also plans for management succession of the Chief Executive Officer, as well as other senior management positions, and oversees the Company’s compliance efforts.

To help discharge its responsibilities, the Board has adopted the NCR Corporation Board of Directors Corporate Governance Guidelines (the “Corporate Governance Guidelines”) that address significant corporate governance issues, including, among other things: the size and composition of the Board;  director independence; Board leadership; roles and responsibilities of the Board;  risk oversight; director compensation and stock ownership; committee membership and structure, meetings and executive sessions; and director selection, training and retirement.  The Corporate Governance Guidelines, as well as the Board’s committee charters, are found under “Corporate Governance” on the “Company” page of NCR’s website at https://www.ncr.com/about/corporate-governance.  You also may obtain a written copy of the Corporate Governance Guidelines, or any of the Board’s committee charters, by writing to NCR’s Corporate Secretary at the address listed on page 27 of this proxy statement.

 

Independence

In keeping with the policy contemplated in our Corporate Governance Guidelines, a substantial majority of our Board is independent, which exceeds the NYSE listing standards.  Under the standards of independence set forth in Exhibit B to the Corporate Governance Guidelines, which reflect the independence standards provided in the NYSE listing standards, a Board member may not be independent unless the Board affirmatively determines that the Board member has no material relationship with the Company (whether directly or indirectly), taking into account, in addition to those other factors it may deem relevant, whether the director:

 

·

has not been an employee of the Company or any of its affiliates, or otherwise affiliated with the Company or any of its affiliates, within the past five years;

 

·

has not been affiliated with or an employee of the Company’s present or former independent auditors or its affiliates for at least five years after the end of such affiliation or auditing relationship;

 

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·

has not for the past five years been a paid advisor, service provider or consultant to the Company or any of its affiliates or to an executive officer of the Company, or an employee or owner of a firm that is such a paid advisor, service provider or consultant;

 

·

does not, directly or indirectly, have a material relationship (such as being an executive officer, director, partner, employee or significant stockholder) with a company that has made payments to or received payments from the Company that exceed, in any of the previous three fiscal years, the greater of $1 million or 2% of the other company’s consolidated gross revenues;

 

·

is not an executive officer or director of a foundation, university or other non-profit entity receiving significant contributions from the Company, including contributions in the previous three years that, in any single fiscal year, exceeded the greater of $1 million or 2% of such charitable organization’s consolidated gross revenues;

 

·

has not been employed by another corporation that has (or had) an executive officer of the Company on its board of directors during the past five years;

 

·

has not received compensation, consulting, advisory or other fees from the Company, other than director compensation and expense reimbursement or compensation for prior service that is not contingent on continued service for the past five years; and

 

·

is not and has not been for the past five years a member of the immediate family of:  (i) an officer of the Company;  (ii) an individual who receives or has received during any twelve-month period more than $120,000 per year in direct compensation from the Company, other than director and committee fees and pension or other forms of deferred compensation for prior service that is not contingent on continued service;  (iii) an individual who, with respect to the Company’s independent auditors or their affiliates, is a current partner or a current employee personally working on the Company’s audit or was a partner or employee and personally worked on the Company’s audit;  (iv) an individual who is an executive officer of another corporation that has (or had) an executive officer of the Company on its board of directors;  (v) an executive officer of a company that has made payments to, or received payments from, the Company in a fiscal year that exceeded the greater of $1 million or 2% of the other company’s consolidated gross revenues;  or (vi) any director who is not considered an independent director.

Consistent with the Corporate Governance Guidelines and the NYSE listing standards, on an annual basis the Board, with input from the Committee on Directors and Governance, determines whether each non-employee Board member is considered independent.  In doing so, the Board takes into account the factors listed above and such other factors as it may deem relevant.

The Board has determined that all of the Company’s non-employee directors and nominees, namely Mark W. Begor, Gregory R. Blank, Catherine L. Burke, Chinh E. Chu, Deborah A. Farrington, Georgette D. Kiser, Kirk T. Larsen and Matthew A. Thompson, are independent in accordance with the NYSE listing standards and the Company’s Corporate Governance Guidelines.

 

Key Governance Developments

NCR continues to demonstrate a strong commitment to corporate governance practices and policies that reinforce the Board’s alignment with, and accountability to, our stockholders.  In 2016 we eliminated

 

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classification of the Board, twice adjourning our annual meeting of stockholders to solicit votes to obtain the requisite stockholder approval.  Also in 2016, the Board adopted and implemented a comprehensive, robust and fair proxy access bylaw.  We continue to actively engage with our stockholders on a regular basis, our stockholders have the ability to directly nominate director candidates, and we have established processes and procedures for stockholders to communicate with the Board, the independent Lead Director, the Chairman of the Board, any other individual director or NCR’s independent directors as a group.

We have also reduced the ownership threshold necessary for stockholders to directly call a special meeting, and in furtherance of our continuing commitment to strong corporate governance policies, on February 20, 2018, the Board authorized and approved amendments to the Company’s bylaws to reduce the percent ownership requirement necessary to allow stockholders to call a special meeting of stockholders from a majority of the votes entitled to be cast at the meeting to 25% of the votes entitled to be cast at the meeting; provided, that unless requested by the stockholders entitled to cast a majority of all the votes entitled to be cast at the meeting, a special meeting need not be called to consider any matter that is substantially the same as a matter voted on at any special meeting of stockholders held in the preceding twelve months.

Since being spun off by AT&T Corp.  in 1996, NCR’s stockholders have had the right to call a special meeting.  Reducing the ownership threshold for calling a special meeting from a majority of the votes entitled to be cast at the meeting to 25% puts the terms of this stockholder right well within market practice for those companies that permit stockholders to call a special meeting.  We believe that our revised special meeting right strikes a reasonable and appropriate balance – meaningfully enhancing the right of stockholders to call a special meeting on the one hand, while on the other hand safeguarding against the risk that substantial administrative and financial burdens could be imposed on our Company, contrary to the interests of our Board and stockholders, by a special meeting being called that does not have meaningful stockholder interest behind it.

In addition, the Board has included in this proxy statement a proposal to amend and restate the Company charter to eliminate the supermajority voting provisions contemplated thereby and require the affirmative vote of a majority of all the votes entitled to be cast to approve each such matter. NCR also received a stockholder proposal on this matter. While a supermajority vote requirement protects against amendments to key provisions of a charter or bylaws, the removal and subsequent replacement of a director, or the entering into of extraordinary transactions without broad stockholder support, the Board has determined, following its deliberation and consideration regarding the rationale for such provisions in light of current corporate governance standards and practices and as permitted by Maryland law, that requiring only a majority of all the votes entitled to be cast on the matter to amend all provisions of the Company’s charter and to approve the extraordinary transactions described in more detail in the applicable proposal in this proxy statement is advisable and in the best interests of NCR.  Similarly, after deliberation and consideration, the Board has determined, also as permitted by Maryland law, that requiring only a majority of all the votes entitled to be cast on the matter to amend all provisions of the Bylaws, to remove a director, and to replace a director after removal, is advisable and in the best interests of NCR, and has included such amendment in the applicable proposal in this proxy statement.  The Board believes the proposal including the amendments to the Company charter described in this paragraph strike the proper balance of protecting against the actions of a few large stockholders while recognizing that broad supermajority provisions are no longer viewed by many parties as consistent with current best practices for corporate governance at U.S. public companies.

The Board included a substantially similar proposal in the Company’s proxy statement in 2019, also following the receipt of a stockholder proposal on the matter, except that it also included a proposed amendment to Section 6.2 of the Company charter to provide that, notwithstanding any provision of law requiring any action to be taken or approved by the affirmative vote of stockholders entitled to cast a greater number of votes, and

 

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except as may otherwise be specifically provided, any such action shall be effective and valid if declared advisable by the Board and taken or approved by the affirmative vote of stockholders entitled to cast a majority of all the votes entitled to be cast on the matter.  Approval of the amendment to Section 6.2 of the Company charter required the affirmative vote of a majority of the voting power of shares of outstanding stock of NCR entitled to vote thereon, and this amendment was approved by our stockholders.  Despite twice adjourning our annual meeting of stockholders to solicit votes, the Company did not obtain the requisite stockholder approval necessary to approve the balance of the proposal.

 

New Director Orientation

Using the director selection process described in the Selection of Nominees for Directors section of this proxy statement, in late 2019 and early 2020, the Board elected four directors, Mark W. Begor, Catherine L. Burke, Georgette D. Kiser and Kirk T. Larsen, to the Board.  Each of these directors is included in this proxy statement as a director nominee.

As provided in the Corporate Governance Guidelines, the Company has an orientation process for new directors that includes background material, visits to Company facilities, and meetings with senior management to familiarize the Directors with the Company’s strategic and operating plans, key issues, corporate governance, Code of Conduct, and the senior management team.  NCR created an extensive director orientation program for its recently elected directors designed to meet the objectives above and comprehensively brief new board members.  This program includes the provision of written materials to the new directors and onsite meetings and training with members of the Company’s Executive Leadership Team including, among others, the President and Chief Executive Officer, Chief Operating Officer, Chief Financial Officer, General Counsel and Secretary, Chief Information Officer, Chief Audit Executive and various business leaders, as well as other key senior management employees.  The program enables the new directors to thoroughly understand the Company’s business, strategic initiatives and strategy activation plans, as well as overall governance and processes, including, among other things, the Company’s organization, the Company charter, bylaws, Board committee charters, the Company Code of Conduct, and Corporate Governance Guidelines.  The design of the program also ensures directors have a direct line of communication to the Company’s key management leaders.  The two directors who joined our Board in 2019 have completed this orientation process and the two directors who joined our Board shortly before the date of this proxy statement are in the process of completing it.

 

Board Leadership Structure and Risk Oversight

 

Leadership Structure

As set out in the Corporate Governance Guidelines, the Board does not have a guideline on whether the role of Chairman should be held by a non-employee director. Instead, our Board has the flexibility to select a Chairman as it deems best for the Company from time to time. Under the Corporate Governance Guidelines the independent directors of the Board will select a Lead Director from the independent directors. Additionally, if the positions of Chairman of the Board and Chief Executive Officer are held by the same person or if the Chairman is a management employee or a non-independent director, the Board has set out the roles of both Chairman and the independent Lead Director, which are included in Exhibit C to the Corporate Governance Guidelines.

 

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Currently the roles of Chairman and CEO are separated, with Frank R. Martire serving as Executive Chairman, Michael D. Hayford serving as Chief Executive Officer and Chinh E. Chu serving as the Board’s independent Lead Director.

During the transition of the Company’s Chief Executive Officer role to Mr. Hayford, the Board determined it would be appropriate to separate the roles of Chief Executive Officer and Chairman. As a result, simultaneous to the hiring of Mr. Hayford, the Board recruited Mr. Martire to the role of Executive Chairman. Mr. Martire’s leadership during this transition period has been a success, and by all accounts Mr. Hayford has proven to be a talented leader as demonstrated in the current operational and financial strength of the Company.

In light of Mr. Hayford’s demonstrated success and the Board’s confidence in his leadership, Mr. Martire will reduce the amount of time he spends as Executive Chairman and his compensation will be adjusted accordingly. Mr. Martire has agreed to remain Executive Chairman for one year at which point the Board will make a determination on the most effective leadership structure moving forward.

Consistent with the Corporate Governance Guidelines, our independent Lead Director has broad authority, as follows. The independent Lead Director, among other things, presides at all Board meetings at which the Chairman is not present. The independent Lead Director leads executive sessions of the independent directors, normally at every meeting. He or she may ask the Chairman and CEO to join portions of the executive sessions. The independent Lead Director serves as liaison between the Chairman and the independent directors; frequently communicates with the Chairman and Chief Executive Officer; is authorized to call meetings of the independent directors; obtains Board member and management input and, with the Chief Executive Officer, sets the agenda for the Board; approves meeting schedules to assure that there is sufficient time for discussion of all agenda items; works with the Chief Executive Officer to ensure that Board members receive the right information on a timely basis; stays current on major risks and focuses the Board members on such risks; molds a cohesive Board to support the success of the Chief Executive Officer; works closely with the Committee on Directors and Governance to evaluate Board and committee performance; facilitates communications among directors; assists in the recruiting and retention of new Board members (with the Committee on Directors and Governance, the Chairman and the Chief Executive Officer); in conjunction with the Chairman, the Chief Executive Officer and the Committee on Directors and Governance, ensures that committee structure and committee assignments are appropriate and effective; works with the Committee on Directors and Governance to ensure outstanding governance processes; leads discussions, along with the chair of the Compensation and Human Resource Committee, regarding Chief Executive Officer performance, personal development and compensation; and, if requested by major stockholders of the Company, is available for consultation and direct communication with such stockholders. Additionally, the leadership and oversight of the Board’s other independent directors continues to be strong, and further structural balance is provided by the Company’s well-established corporate governance policies and practices, including its Corporate Governance Guidelines. Independent directors currently account for eight out of ten of the Board’s members, and make up all of the members of the Board’s Compensation and Human Resource Committee (the “CHRC”), Audit Committee and Committee on Directors and Governance.

 

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Risk Oversight

As a part of its oversight responsibilities, the Board regularly monitors management’s processes for identifying and addressing areas of material risk to the Company, including operational, financial, cybersecurity, legal, regulatory, strategic and reputational risks.  In doing so, the Board receives regular assistance and input from its committees, as well as regular reports from members of the Executive Leadership Team and other senior management.  While the Board and its committees provide oversight, management is responsible for implementing risk management programs, supervising day-to-day risk management and reporting to the Board and its committees on these matters.

The Audit Committee of the Board has primary responsibility for overseeing the assessment of financial, strategic, cybersecurity and other risks and the Company’s general risk management programs.  In carrying out this responsibility, the Audit Committee regularly evaluates the Company’s risk identification, risk management and risk mitigation strategies and practices.  The Company has established an Enterprise Risk Management team that is sponsored by the Company’s Chief Operating Officer and is co-led by the Company’s Chief Audit Executive and Chief Ethics & Compliance Officer.  The Audit Committee and the full Board receive and review periodic reports prepared by this team.  In general, the reports identify, analyze and provide the status of major risks to the Company.  In addition, the Audit Committee regularly receives management reports on information security and enhancements to cybersecurity protections, including benchmarking assessments, which it then shares with the Board.  The full Board receives at least annual reports on this topic directly from management.  Included among the members of both the Board and the Audit Committee are directors with substantial expertise in cybersecurity matters, and Board members actively engage in dialogue on the Company’s information security plans, and in discussions of improvements to the Company’s cybersecurity defenses.  When, in management’s judgment, a threatened cybersecurity incident has the potential for material impacts, the Audit Committee is advised and management makes regular reports to the committee.

The CHRC regularly considers potential risks related to the Company’s compensation programs, as discussed below, and the Committee on Directors and Governance also considers risks within the context of its responsibilities (as such responsibilities are defined in the committee charter), including legal and regulatory compliance risks.  The Committee on Directors and Governance also receives periodic updates on compliance and regulatory risk items from the Company’s Chief Compliance Officer.

After each committee meeting, the Audit Committee, CHRC and Committee on Directors and Governance each report at the next meeting of the Board all significant items discussed at each committee meeting, which includes a discussion of items relating to risk oversight where applicable.

We believe the leadership structure of the Board also contributes to the effective facilitation of risk oversight as a result of: (i) the role of the Board committees in risk identification and mitigation; (ii) the direct link between management and the Board achieved by having our two management directors serve as Executive Chairman and Chief Executive Officer; and (iii) the role of our active independent Lead Director whose duties include ensuring the Board reviews and evaluates major risks to the Company, as well as measures proposed by management to mitigate such risks.

All of the above elements work together to ensure an appropriate focus on risk oversight.

 

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Compensation Risk Assessment

The Company takes a prudent and appropriately risk-balanced approach to its incentive compensation programs to ensure that these programs promote the long-term interests of our stockholders and do not contribute to unnecessary risk-taking.  The CHRC regularly evaluates the Company’s executive and broad-based compensation programs, including the mix of cash and equity, balance of short-term and longer-term performance focus, balance of revenue and profit-based measures, stock ownership guidelines, clawback policies and other risk mitigators.  The CHRC directly engages its independent compensation consultant, Frederic W. Cook & Co., Inc. (“FWC”), to assist in this process.  Based on this evaluation, the CHRC concluded that none of the Company’s compensation policies and plans are reasonably likely to have a material adverse effect on the Company.

 

Committees of the Board

The Board has three standing committees:  the Audit Committee, the Compensation and Human Resource Committee and the Committee on Directors and Governance.

The Board has adopted a written charter for each such committee that sets forth the committee’s mission, composition and responsibilities.  Each charter can be found under “Corporate Governance” on the “Company” page of NCR’s website at https://www.ncr.com/about/corporate-governance.

The Board met eight times in 2019 and each incumbent member of the Board attended 75% or more of the aggregate of:  (i) the total number of meetings of the Board (held during the period for which such person was a director), and (ii) the total number of meetings held by all committees of the Board on which such person served (during the periods that such person served).  The Company has no formal policy regarding director attendance at its annual meeting of stockholders.  All of the Company’s directors then in office were in attendance at the Company’s 2019 Annual Meeting of Stockholders, which was a virtual, and not an in-person, meeting.

The members of each committee as of the end of fiscal 2019 and the number of meetings held in fiscal 2019 are shown below:

 

Name		Audit Committee		Compensation and Human Resource Committee		Committee on Directors and Governance
Catherine L. Burke(1)		X				X
Gregory R. Blank		X
Chinh E. Chu				X		X
Richard L. Clemmer				X		Chair
Robert P. DeRodes		X
Deborah A. Farrington		X
Kurt P. Kuehn		Chair
Kirk T. Larsen(2)		X		X
Linda Fayne Levinson				Chair		X
Matthew A. Thompson		X
Number of meetings in 2019		9		6		8

(1) Effective November 5, 2019, Mrs. Burke was elected to serve on the Audit Committee and the Committee on Directors and Governance.

(2) Effective November 5, 2019, Mr. Larsen was elected to serve on the Audit Committee and the Compensation and Human Resource Committee.

 

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Audit Committee

The Audit Committee is the principal agent of the Board in overseeing:  (i) the quality and integrity of the Company’s financial statements;  (ii) the assessment of financial, strategic, cybersecurity and other risk and risk management programs;  (iii) the independence, qualifications, engagement and performance of the Company’s independent registered public accounting firm;  (iv) the performance of the Company’s internal auditors;  (v) the integrity and adequacy of internal controls;  and (vi) the quality and adequacy of disclosures to stockholders.  Among other things, the Audit Committee also:

 

·

selects, evaluates, sets compensation for and, where appropriate, replaces the Company’s independent registered public accounting firm;

 

·

pre-approves all audit and non-audit services to be performed by the Company’s independent registered public accounting firm;

 

·

reviews and discusses with the Company’s independent registered public accounting firm its services and quality control procedures and the Company’s critical accounting policies and practices;

 

·

regularly reviews the scope and results of audits performed by the Company’s independent registered public accounting firm and internal auditors;

 

·

prepares the report required by the SEC to be included in the Company’s annual proxy statement;

 

·

meets with management to review the adequacy of the Company’s internal control framework and its financial, accounting, reporting and disclosure control processes;

 

·

reviews the Company’s periodic SEC filings and quarterly earnings releases;

 

·

discusses with the Company’s Chief Executive Officer and Chief Financial Officer the procedures they follow to complete their certifications in connection with NCR’s periodic filings with the SEC;

 

·

discusses management’s plans with respect to the Company’s major financial, strategic, cybersecurity and other risk exposures and the steps management has taken to monitor and control such exposures;

 

·

reviews the Company’s compliance with legal and regulatory requirements; and

 

·

reviews the effectiveness of the Internal Audit function, including compliance with the Institute of Internal Auditors’ International Professional Practices Framework for Internal Auditing consisting of the Definition of Internal Auditing, Code of Ethics and the Standards.

All members of the Audit Committee during 2019 were, and the current members are, independent and financially literate as determined by the Board under applicable SEC rules and NYSE listing standards.  In addition, the Board has determined that Mr. Blank, Mr. DeRodes, Ms. Farrington, Mr. Kuehn, Mr. Larsen and Mr. Thompson are each an “audit committee financial expert,” as defined under SEC regulations.  The Board has also determined that each member of the Audit Committee is independent based on independence standards set forth in the Board’s Corporate Governance Guidelines, which reflect the listing standards of the NYSE and the applicable rules of the SEC.  No member of the Audit Committee may receive any compensation, consulting, advisory or other fees from the Company, other than the Board compensation described below

 

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under the Director Compensation section in this proxy statement, starting on page 28 as determined in accordance with applicable SEC rules and NYSE listing standards.  Members serving on the Audit Committee are limited to serving on no more than two other audit committees of public company boards of directors, unless the Board evaluates and determines that these other commitments would not impair the member’s effective service to the Company.

 

Compensation and Human Resource Committee

The Compensation and Human Resource Committee (“CHRC”) provides general oversight of the Company’s management compensation philosophy and practices, benefit programs and strategic workforce initiatives, and leadership development plans.  In doing so, the CHRC reviews and approves executive officer total compensation objectives and programs, and the competitiveness of total compensation practices.  Among other things, the CHRC also:

 

·

evaluates executive officer performance levels and determines their base salaries, incentive awards and other compensation;

 

·

discusses its evaluation and compensation determinations for the Chief Executive Officer at Board executive sessions;

 

·

reviews executive compensation plans and recommends them for Board approval;

 

·

oversees our compliance with SEC and NYSE compensation-related rules;

 

·

reviews and approves executive officer employment, severance, change in control and similar agreements/plans;

 

·

reviews management proposals for significant organizational changes;

 

·

annually assesses compensation program risks; and

 

·

oversees management succession and development.

The CHRC may delegate its authority to the Company’s Chief Executive Officer and/or other appropriate delegates to make equity awards to individuals (other than executive officers) in limited instances.

The CHRC retains and is advised by an independent compensation consultant, Frederic W. Cook & Co., Inc.  The CHRC has directly engaged FWC to review the Company’s long-term incentive program, Stock Incentive Plan (the “Stock Plan”), Annual Incentive Plan (which includes the Management Incentive Plan and the Customer Success Bonus), and other key programs related to the compensation of executive officers.  As directed by the CHRC, FWC provides a competitive assessment of our executive compensation programs relative to our compensation philosophy;  reviews our compensation peer group companies;  provides expert advice and competitive market rate information relating to executive officer compensation;  assists in designing variable incentive, perquisite and other compensation programs, including advice regarding performance goals;  assists with compliance with applicable tax laws, disclosure matters and other technical matters;  conducts an annual risk assessment of our compensation programs;  and regularly consults with the CHRC regarding such matters.  FWC did not perform any additional work for the Company or its management

 

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in 2019.  The CHRC retained FWC after reviewing all factors relevant to its independence from management under applicable SEC rules and NYSE listing standards, and concluding that FWC was independent and its work for the CHRC did not raise any conflict of interest.

The Board has determined that each member of the CHRC is independent based on independence standards set forth in the Board’s Corporate Governance Guidelines which reflect NYSE listing standards and satisfy the additional provisions specific to compensation committee membership set forth in the NYSE listing standards.

 

Committee on Directors and Governance

The Committee on Directors and Governance (the “CODG”) is responsible for reviewing the Board’s corporate governance practices and procedures, including the review and approval of each related party transaction under the Company’s Related Person Transaction Policy (unless the CODG determines that the approval or ratification of such transaction should be considered by all of the disinterested members of the Board), and the Company’s ethics and compliance program.  Among other things, the CODG also:

 

·

recommends to the Board the principles of director compensation, including compensation to be paid to directors, and reviews and makes recommendations to the Board concerning director compensation;

 

·

reviews the composition of the Board and the qualifications of persons identified as prospective directors, recommends the candidates to be nominated for election as directors, and, in the event of a vacancy on the Board, recommends any successors;

 

·

recommends to the Board the assignment of directors to various committees;

 

·

establishes procedures for evaluating the performance of the Board and oversees such evaluation;

 

·

reviews the Company’s charter, bylaws and Corporate Governance Guidelines and makes any recommendations for changes, as appropriate; and

 

·

monitors compliance with independence standards established by the Board.

The CODG is authorized to engage consultants to review the Company’s director compensation program.

The Board has determined that each member of the CODG is independent based on independence standards set forth in the Board’s Corporate Governance Guidelines, which reflect the listing standards of the NYSE.

 

Selection of Nominees for Directors

The CODG and our other directors are responsible for recommending nominees for membership to the Board.  The director selection process is described in detail in the Corporate Governance Guidelines. In determining candidates for nomination, the CODG will seek the input of the Chairman of the Board and the Chief Executive Officer, and, in the event the positions of Chairman of the Board and Chief Executive Officer are held by the same person, the independent Lead Director, and will consider individuals recommended for Board membership by the Company’s stockholders in accordance with the Company’s bylaws and applicable

 

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law.  In addition, periodically the Board engages an outside search firm, including most recently Ridgeway Partners, to assist to identify candidates who have desired experience and expertise, and meet the qualification guidelines described below.

Exhibit A to the Corporate Governance Guidelines include qualification guidelines for directors standing for re-election and new candidates for membership on the Board.  All candidates are evaluated by the CODG using these qualification guidelines.  In accordance with the guidelines, as part of the selection process, in addition to such other factors as it may deem relevant, the CODG will consider a candidate’s:

 

·

management experience (including with major public companies with multinational operations);

 

·

other areas of expertise or experience that are desirable given the Company’s business and the current make-up of the Board (such as expertise or experience in information technology businesses, manufacturing, international, financial or investment banking or scientific research and development);

 

·

desirability of range in age to allow staggered replacement of directors of desired skills and experience to permit appropriate Board continuity;

 

·

independence, as defined by the Board;

 

·

diversity of thought and perspectives, such as on the basis of age, race, gender, and ethnicity, or on the basis of geographic knowledge, industry experience, board tenure, or culture;

 

·

knowledge and skills in accounting and finance, business judgment, general management practices, crisis response and management, industry knowledge, international markets, leadership, and strategic planning;

 

·

personal characteristics such as integrity, accountability, financial literacy and high performance standards;

 

·

willingness to devote the appropriate amount of time and energy to serving the best interests of the Company; and

 

·

commitments to other entities, including the number of other public-company boards on which the candidate serves.

The Board and the CODG are committed to finding proven leaders who are qualified to serve as NCR directors and may from time to time engage outside search firms to assist in identifying and contacting qualified candidates.

All of the candidates for election are currently serving as directors of the Company and, other than Frank R. Martire, NCR’s Executive Chairman, and Michael D. Hayford, NCR’s Chief Executive Officer, have been determined by the Board to be independent.

Stockholders wishing to recommend individuals for consideration as directors should contact the CODG by writing to the Company’s Corporate Secretary at NCR Corporation 864 Spring Street NW, Atlanta, Georgia 30308-1007.  Recommendations by stockholders that are made in this manner will be evaluated in the same manner as other candidates.

 

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Stockholders who wish to nominate directors for inclusion in NCR’s proxy statement pursuant to the proxy access provisions in the Company’s bylaws, or to otherwise nominate directors for election at NCR’s next annual meeting of stockholders, must follow the procedures described in the Company’s bylaws, the current form of which is available under “Corporate Governance” on the “Company” page of NCR’s website at https://www.ncr.com/about/corporate-governance.  See Procedures for Nominations Using Proxy Access, Procedures for Stockholder Proposals and Nominations for 2021 Annual Meeting Outside of SEC Rule 14a-8 and Procedures for Stockholder Proposals and Nominations for 2021 Annual Meeting Pursuant to SEC Rule 14a-8 beginning on page 102 of this proxy statement for further details regarding how to nominate directors.

 

Communications with Directors

Stockholders or interested parties wishing to communicate directly with the Board, the independent Lead Director or any other individual director, the Chairman of the Board, or NCR’s independent directors as a group are welcome to do so by writing to the Company’s Corporate Secretary at NCR Corporation, 864 Spring Street NW, Atlanta, Georgia 30308-1007.  The Corporate Secretary will forward appropriate communications.  Any matters reported by stockholders relating to NCR’s accounting, internal accounting controls or auditing matters will be referred to members of the Audit Committee as appropriate.  Anonymous and/or confidential communications with the Board may also be made by writing to this address.  For more information on how to contact the Board, please see the Company’s Corporate Governance website at https://www.ncr.com/about/corporate-governance.

 

Code of Conduct

The Company has a Code of Conduct that sets the standard for ethics and compliance for all of its directors and employees.  The Code of Conduct is available on the Company’s Corporate Governance website at http://www.ncr.com/company/corporate-governance/code-of-conduct.  To receive a copy of the Code of Conduct, please send a written request to the Corporate Secretary at the address provided above.

 

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Director Compensation

 

Director Compensation Program

The Committee on Directors and Governance adopted the 2017 NCR Director Compensation Program (the “Program”) pursuant to authority granted by our Board.  In adopting the Program, the Committee considered peer group director pay practices and other relevant data and considerations, including material provided by Frederic W. Cook & Co., Inc., the independent compensation consultant for the Compensation and Human Resource Committee.  The Program provides for the payment of annual retainers and annual equity grants to non-employee Board members in accordance with our Stock Plan.  Our Stock Plan generally caps non-employee director pay at $1 million per calendar year (including cash and grant date fair value of equity).

Mr. Martire does not receive compensation under the Program for his service as Executive Chairman of the Board.  Mr. Blank received no compensation under the Program for the portion of 2019 that he was the Board designee of The Blackstone Group L.P. (“Blackstone”), due to Blackstone’s ownership of certain NCR Series A Convertible Preferred Stock (“Preferred Stock”).  Mr. Blank began receiving standard compensation under the Program (on a prorated basis) on substantially the same terms as other NCR directors for his continued director service following the retirement of such Preferred Stock effective September 20, 2019.

 

 

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Director Compensation Tables

 

Director Compensation for 2019 ($)
Director Name		Fees (Annual Retainers) Earned in Cash				Stock Awards(1)				Total
Gregory R. Blank			26,904				—				26,904
Catherine (Katie) L. Burke			31,230				130,523				161,753
Chinh E. Chu			69,500				294,577				364,077
Richard L. Clemmer			—				334,104				334,104
Robert P. DeRodes			—				320,078				320,078
Deborah A. Farrington			95,000				225,015				320,015
Kurt P. Kuehn			114,000				225,015				339,015
Kirk T. Larsen			31,860				130,523				162,383
Linda Fayne Levinson			57,500				322,556				380,056
Matthew A. Thompson			95,000				225,015				320,015

(1) Aggregate grant date fair value, as determined in accordance with FASB ASC Topic 718, of annual equity grants (including deferred grants), and annual cash retainers received as current or deferred shares (also referred to as “phantom stock units”).  See Note 9 of the Notes to Consolidated Financial Statements contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019, where we explain assumptions made in valuing equity awards.  Excludes Mr. Blank’s prorated annual equity grant, which was not made until 2020.

 

Grant Date Fair Value(1) of Director 2019 Retainer and Equity Grant Shares ($)
Director Name		Annual Equity RSU Grant				Current Stock in lieu of cash				Deferred Stock in lieu of cash
Gregory R. Blank			—				—				—
Catherine (Katie) L. Burke			130,523				—				—
Chinh E. Chu			225,015				69,562				—
Richard L. Clemmer			225,015				—				109,089
Robert P. DeRodes			225,015				—				95,063
Deborah A. Farrington			225,015				—				—
Kurt P. Kuehn			225,015				—				—
Kirk T. Larsen			130,523				—				—
Linda Fayne Levinson			265,003				57,553				—
Matthew A. Thompson			225,015				—				—

(1) Grant date fair value, as determined in accordance with FASB ASC Topic 718, of annual equity grants (including deferred grants), and annual cash retainers received in the form of current shares or deferred shares (also referred to as “phantom stock units”).  See Note 9 of the Notes to Consolidated Financial Statements contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019 for an explanation of the assumptions we make in the valuation of our equity awards.  Excludes Mr. Blank’s prorated annual equity grant which was not made until 2020.

 

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Shares of NCR Common Stock Underlying Director Equity Awards as of December 31, 2019 (#)
Director Name		Options Outstanding as of 12/31/19				RSUs Outstanding as of 12/31/19				Deferred Shares Outstanding as of 12/31/19
Gregory R. Blank(1)			—				—				—
Catherine (Katie) L. Burke			—				3,700				—
Chinh E. Chu			—				3,832				—
Richard L. Clemmer			34,881				—				117,516
Robert P. DeRodes			34,881				—				51,945
Deborah A. Farrington			—				3,832				—
Kurt P. Kuehn			10,039				—				50,818
Kirk T. Larsen			—				3,700				—
Linda Fayne Levinson			34,881				4,513				8,077
Matthew A. Thompson			—				3,832				—

(1) Excludes Mr. Blank’s prorated annual equity grant which was not made until 2020.

 

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Proposal 2 – Say On Pay:  Advisory Vote on the  Compensation of the Named Executive Officers

FOR		The Board of Directors recommends that		✓		Robust oversight by the Compensation Committee
		you vote FOR the proposal to approve		✓		Excellent pay for performance alignment
		the compensation of the named executive officers.		✓		Strong link between management and stockholder interests

 

Proposal Details

We currently conduct a Say On Pay vote every year at our annual meeting of stockholders as required by Section 14A of the Exchange Act.  Unless our Board changes its policy, our next Say On Pay vote following the 2020 Annual Meeting of Stockholders will be held at our 2021 Annual Meeting of Stockholders.  While this vote is non-binding, the Board and the Compensation and Human Resource Committee (the “Committee” as referenced throughout the various sections of this Proposal 2, including the Executive Compensation – Compensation Discussion & Analysis section) value the opinions of our stockholders.  The Committee will consider the outcome of the Say On Pay vote as part of its annual evaluation of our executive compensation program.

Please read the following Executive Compensation – Compensation Discussion & Analysis section and our Executive Compensation Tables for information necessary to inform your vote on this proposal.

 

How Does the Board Recommend that I Vote on this Proposal?

 

Board Recommendation

The Board of Directors recommends that you vote to approve, on a non-binding and advisory basis, the compensation of the named executive officers as disclosed in these proxy materials.  Proxies received by the Board will be voted FOR this proposal unless they specify otherwise.

 

Vote Required for Approval

Under applicable Maryland law and the Company’s Charter and Bylaws, majority of all the votes cast by holders of our common stock and Series A Convertible Preferred Stock voting together as a single class (in person via attendance at the virtual meeting or by proxy), with the Series A Convertible Preferred Stock voting on an as-converted basis, is required to approve the non-binding advisory vote on the compensation of the named executive officers.  Under Maryland law, abstentions and broker “non-votes” will not be counted as votes cast and will have no effect on the approval of this proposal. Proxies recieved by the Board will be voted FOR this proposal unless they specify otherwise.

 

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Executive Compensation – Compensation  Discussion & Analysis

 

Our Named Executive Officers

Our Compensation Discussion & Analysis describes NCR’s 2019 executive compensation program for our named executives, who are listed below.  The Committee has sole authority over the program and makes all compensation decisions for our Named Executive  Officers (the “named executives”). For more about the compensation of our named executives, see the Executive Compensation Tables below.

 

Michael Hayford – President and Chief Executive Officer (CEO)   Frank Martire – Executive Chairman of the Board   Owen Sullivan – Chief Operating Officer (COO)   Andre Fernandez – Executive Vice President and Chief Financial Officer (CFO)   Paul Langenbahn – Executive Vice President and President, NCR Commerce

In light of Mr. Hayford’s demonstrated success and our Board’s confidence in his leadership, following our 2020 Annual meeting Mr. Martire will reduce the amount of time he spends as Executive Chairman as noted in the Leadership Structure section above. His compensation will be reduced accordingly, as described further herein.

 

Executive Summary

 

Business Overview

NCR is a leading software- and services-led enterprise provider in the financial, retail, hospitality and telecommunications and technology industries.  NCR is a global company that is headquartered in Atlanta, Georgia.  NCR offers a range of solutions that help businesses of all sizes run the store, run the restaurant and run self-service banking channels.  Our portfolio includes digital first offerings for banking, restaurants and retailers, as well as payments processing, multi-vendor connected device services, automated teller machines (ATMs), point of sale (POS) terminals and self-service technologies.  We also resell third-party networking products and provide related service offerings in the telecommunications and technology sectors.  Our solutions are also designed to support our transition to an as-a-Service company and enable us to be the technology-based service provider of choice to our customers.

 

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NCR Strategic Priorities

 

Drive top line revenue growth by investing in our strategic platforms		Continue to shift business mix to recurring revenue streams and away from hardware towards software and services-led offerings		Focus on optimizing our spend to improve our operating margins

 

2019 Focus Areas

 

Customer Care		Improve the customer experience and execution of new product introductions
Stockholder Value		Accelerate profitable top-line revenue growth by investing in and shifting our revenue mix to recurring software and services revenue streams we identify as strategic growth platforms, while improving the Company’s cost structure
Strategic Growth Platforms and Targeted Acquisitions		Increase capital expenditures in strategic growth platforms and target acquisitions to gain solutions that drive the highest growth and return on investment
Reward and Develop Talent		Develop, reward and retain talent with competitive recruiting, training and effective incentive-based compensation programs
Sales Enablement		Provide our sales force with top-performing and secure products packaged to target our desired revenue mix and drive customer delight and stockholder value, as well as invest in appropriate training programs to enable success

 

2019 Business Transformation

Our industry is experiencing a dramatic shift in which our customers increasingly demand more digital, mobile, software-focused solutions.  In 2018, when the Board initiated a search process for our next CEO, they prioritized selecting a leader who could significantly accelerate the business transformation already underway and drive the company toward profitable growth and stronger returns.  To that end, the Board engaged a search firm to identify top talent within our industry, and identified Michael Hayford as having not only deep experience across software and technology solutions businesses, but also a proven track record of effective leadership in strategic business transformation.  Upon joining the company in April 2018, Mr.  Hayford initiated a significant refreshment of our senior leadership team and in November 2018 initiated a strategic plan to accelerate growth.  In 2019, NCR undertook a strategic transformation to accelerate growth by shifting our business mix from hardware to more software and services, and driving increased recurring revenue through investments in our strategic growth platforms and by shifting to a subscription-based model.  As a result, 2019 was a transformational year as the company embarked on executing against the new strategic priorities set by Michael Hayford.

In planning for 2019, the Compensation and Human Resources Committee (the “Committee”) determined that it was appropriate to structure the 2019 executive compensation program in a way that better aligned with the business and leadership transitions.  In particular, the Committee believed it was appropriate to provide Mr. Hayford the opportunity to first develop a long-term operating plan and strategic priorities, which would then guide the selection of the operating metrics to which management would be held accountable over a

 

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