INDEPENDENT DIRECTORS’ COMPENSATION
Our compensation program for independent
directors is designed to achieve the following goals: (a) fairly pay directors for work required at a company of our size and scope of operations; (b) align directors’ interests with the long-term interests of our stockholders; and
(c) have a compensation structure that is simple, transparent and easy for stockholders to understand. Our Nominating and Corporate Governance Committee reviews director compensation annually.
Each independent director currently receives annual compensation of $210,000, of which $75,000 is paid in cash and $135,000 is paid in RSUs. The
RSUs are subject to a three-year vesting period and will be credited with amounts equivalent to any regular quarterly dividends paid on our common stock, which amounts will be reinvested in additional RSUs. In light of the workload and broad
responsibilities of their positions, certain independent directors currently receive additional compensation as follows: the Chair of our Board receives an additional $235,000, of which $110,000 is paid in cash and $125,000 is paid in RSUs, the
Chairs of the Audit Committee and Risk Committee each receive an additional $35,000 in annual cash compensation, and the Chairs of the Nominating and Corporate Governance Committee and the Company’s MDCC each receive an additional $20,000 in
annual compensation. Separately, for each Board committee meeting attended, an independent director receives $2,000 in cash. If an independent director is also a director of the Bank and attends a meeting of a Bank committee that takes place on a
day when the analogous Board committee is not meeting, the independent director receives $2,000 in cash for such meeting. Independent directors can defer up to 80% of their annual cash compensation and RSUs into deferred stock units, which will be
paid out after they leave our Board.
The compensation amounts reported in the table below for our independent directors reflect a
combination of our current compensation program described above, which was effective on October 1, 2016, and our previous compensation program for the remainder of 2016. Previously, each independent director received annual compensation of
$160,000, of which $50,000 was paid in cash and $110,000 was paid in RSUs. Also, under the previous program, the Chair of our Board received an additional $90,000 in annual cash compensation. The remaining elements of our previous program are the
same as described above for our current program.
We require each independent director to own at least $375,000 in our common stock,
RSUs or deferred stock units while a member of our Board. Each independent director has four years to satisfy this requirement. Individual and joint holdings of our common stock with immediate family members, including unvested time-based restricted
stock, RSUs and deferred stock units count toward this requirement.
2016 Independent Directors’ Compensation Table
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Name of Director
|
|
Fees Earned or Paid
in Cash
(1)
|
|
|
|
Stock Awards
(2)
|
|
|
|
|
Total
|
|
|
Paget L. Alves
|
|
$ 92,250
|
|
|
|
|
$116,310
|
|
|
|
|
$
|
208,560
|
|
|
Arthur W. Coviello, Jr.
|
|
$ 74,250
|
|
|
|
|
$116,310
|
|
|
|
|
$
|
190,560
|
|
|
William W. Graylin
|
|
$ 76,250
|
|
|
|
|
$116,310
|
|
|
|
|
$
|
192,560
|
|
|
Roy A. Guthrie
|
|
$111,250
|
|
|
|
|
$116,310
|
|
|
|
|
$
|
227,560
|
|
|
Richard C. Hartnack
|
|
$181,250
|
|
|
|
|
$147,574
|
|
|
|
|
$
|
328,824
|
|
|
Jeffrey G. Naylor
|
|
$127,250
|
|
|
|
|
$116,310
|
|
|
|
|
$
|
243,560
|
|
|
Laurel J. Richie
|
|
$ 80,250
|
|
|
|
|
$116,310
|
|
|
|
|
$
|
196,560
|
|
|
Olympia J. Snowe
|
|
$108,250
|
|
|
|
|
$116,310
|
|
|
|
|
$
|
224,560
|
|
|
(1)
|
Amount of cash compensation received in 2016 for Board and committee service and meeting attendance.
|
|
(2)
|
Aggregate grant date fair value of RSUs granted in 2016. Grant date fair value is calculated by multiplying the number of RSUs granted by the closing price of Synchrony common stock on the grant
date, which was $28.66 for March 31, 2016 grants, $25.28 for June 30, 2016 grants, $28.00 for September 30, 2016 grants and $36.27 for December 31, 2016 grants.
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48
ITEM 3—ADOPTION OF THE AMENDMENT TO THE SYNCHRONY FINANCIAL 2014 LONG-TERM INCENTIVE PLAN AND
RE-APPROVAL
OF PERFORMANCE MEASURES
On February 22, 2017, the Board approved amending the Synchrony Financial 2014 Long-Term Incentive Plan subject to the approval of our
stockholders. We refer to the Synchrony Financial 2014 Long-Term Incentive Plan prior to such amendment as the “Old LTIP” and to the plan subsequent to such amendment as the “Amended LTIP,” and we refer to the Old LTIP and
Amended LTIP collectively as the “LTIP.” The purpose of the amendment is to increase the number of shares available for issuance under the LTIP by 46,000,000 shares, from 16,605,417 shares to 62,605,417 shares. The LTIP, as proposed to be
amended and as shown in an amended and restated form, is attached to this Proxy Statement as Appendix A.
Under the LTIP, various equity
or cash-based awards may be granted to eligible participants, as described in further detail below. As of April 1, 2017, approximately 793,061 shares remained available for issuance under the Old LTIP. The Amended LTIP increases the aggregate
number of shares reserved under the LTIP from 16,605,417 shares to 62,605,417 shares. Accordingly, if the Amended LTIP is approved, approximately 46,793,061 shares will remain available for issuance under the LTIP. Under the terms of the LTIP, this
number may be increased to the extent that awards previously made under the LTIP are forfeited or otherwise terminated without delivery of shares or other consideration. We expect that there are sufficient shares currently remaining available under
the Old LTIP to enable us to make equity awards under our compensation programs through the Annual Meeting. We are requesting approval of the Amended LTIP to enable us to make regular annual and other equity awards under our compensation programs
after that date.
We believe it is important that the Amended LTIP be approved because we view long-term incentives as a vital component
of our executive compensation program. We believe that long-term incentives help us encourage our officers, employees,
non-employee
directors and consultants to have a proprietary interest in the growth and
performance of the Company. We believe that long-term incentives provide an increased incentive to contribute to the Company’s future success and prosperity, which enhances the value of the Company for the benefit of its stockholders and
enhances the Company’s ability to attract and retain qualified individuals.
Approval of the Amended LTIP will also constitute
re-approval,
for purposes of Section 162(m), of the material terms of the performance measures contained in the LTIP that are to be used in connection with awards under the LTIP that are intended to qualify as
“performance-based” compensation for purposes of Section 162(m). One of the conditions for compensation to be considered “performance-based” under Section 162(m) is that the material terms under which such compensation will be
paid (the class of eligible employees, performance criteria and the
per-person
maximums) be disclosed to and approved by stockholders every five years. By approving the Amended LTIP, stockholders will also be
approving the material terms of the performance goals under the LTIP.
The LTIP includes a number of corporate governance provisions,
including the following: (1) the LTIP is administered by the MDCC, which is composed entirely of independent
non-employee
directors, (2) stock options and stock appreciation rights (SARs) cannot be
re-priced
without stockholder approval, (3) the LTIP limits the size of awards that may be granted during any one year to any one participant, (4) the LTIP does not permit reload options or have
“evergreen” provisions that automatically add shares to the reserve, and (5) the LTIP does not include any tax
gross-up
provisions.
The following is a description of the material terms of the LTIP. This description is qualified in its entirety by reference to the LTIP, a copy of
which, as proposed to be amended and as shown in an amended and restated form, has been included as Appendix A to this proxy statement.
49
Material Terms of the Synchrony Financial 2014 Long-Term Incentive Plan
Effective date and term.
The
LTIP was initially effective as of May 21, 2015, the date of its approval by the Company’s stockholders. No award may be granted under the LTIP on or after the date that is 10 years from July 10, 2014, the date the Old LTIP was
approved by the Board.
Administration.
The LTIP is administered by the Company’s MDCC, which has the authority to make any
determination or take any action that it deems necessary or desirable for the administration of the LTIP, including, for example, to: (i) establish rules and guidelines for the administration of the LTIP, (ii) select the participants to
whom awards are granted, (iii) determine the types of awards to be granted and the number of shares covered by such awards, (iv) set the terms and conditions of such awards and (v) cancel, suspend and amend awards. The MDCC has
discretion to make determinations with respect to and interpret the LTIP and award agreements. The MDCC may delegate its authority under the LTIP, including to the chairman of the MDCC, a subcommittee of the MDCC, or to one or more officers or
managers of the Company; provided, however, that the MDCC may not delegate to officers or managers of the Company its authority to grant awards and to cancel or suspend awards for executive officers and directors of the Company who file reports
under Section 16 of the Exchange Act.
Eligibility.
Officers, employees, consultants and
non-employee
directors of the Company and its affiliates are eligible to participate in the LTIP. The Company does not currently have any consultants designated as eligible to participate in the LTIP.
Number of shares available for issuance.
Subject to adjustment as described below and the adoption of the Amended LTIP, a total of
62,605,417 shares of our common stock (including authorized and unissued shares and treasury shares) will be available for granting awards under the LTIP. If any shares covered by an award under the LTIP are forfeited or otherwise terminated without
delivery of shares or other consideration, then the shares covered by such an award shall again be available for granting awards under the LTIP. In an acquisition, any awards made and any of the shares delivered upon the assumption of or in
substitution for outstanding grants made by the acquired company will not be counted against the shares available for granting awards under the LTIP. Dividend equivalents denominated in shares and awards not denominated, but potentially payable, in
shares shall be counted against the aggregate number of shares available for granting awards under the LTIP in such amount and at such time as the dividend equivalents and such awards are settled in shares. Shares surrendered for the payment of the
exercise price or withholding taxes under stock options or SARs, and stock repurchased in the open market with the proceeds of an option exercise, may not again be made available for issuance under the LTIP. In addition, shares that were subject to
an option or stock-settled SAR and were not issued upon the net settlement or net exercise of such option or SAR will also not be made available for issuance.
Adjustments.
In the event of certain corporate transactions or events affecting the number or type of outstanding common shares of the
Company, including, for example, a dividend or other distribution (whether in cash or stock), recapitalization, stock split, reverse stock split, reorganization, merger, consolidation,
split-up,
spin-off,
combination, repurchase, or exchange of shares or issuance of warrants, the MDCC will make adjustments as it deems appropriate in order to prevent dilution or enlargement of LTIP benefits. These
adjustments include: (i) changing the number and type of shares to be issued under the LTIP and outstanding awards, (ii) changing the per participant limitations on awards and the grant, purchase or exercise price of outstanding awards and
(iii) changing the restriction on the total amount of shares subject to options or SARs, or the total amount of restricted stock, restricted stock units (RSUs), performance awards or other stock-based awards that may be granted. The MDCC may
also make adjustments in the terms of awards in connection with acquisitions of another business or business entity in which the Company assumes outstanding employee awards or the right or obligation to make future awards, and make adjustments in
performance award criteria or in the terms and conditions of other awards in recognition of unusual or nonrecurring events affecting the Company or its financial statements or of changes in applicable laws, regulations, or accounting principles.
Awards.
Awards generally will be granted for no cash consideration. We intend that, under the LTIP, awards may provide
that upon exercise the participant will receive cash, stock, other securities, other awards, other property, or any combination thereof, as the MDCC will determine. The exercise price per share of common stock purchasable under any stock option, the
grant price of any SAR, and the purchase price of any security which may be purchased under any other stock-based award will be not less than 100% of the fair market value of the stock or other security on the date of the grant of such option, SAR,
or right. It is intended that, under the LTIP, any exercise or purchase price may be paid in cash or, if permitted by the MDCC, by surrender of shares.
50
Award limits.
The awards which may be granted under the LTIP are generally subject to the following limits. The maximum number of our shares of common stock with respect to which stock options or SARs may be granted or
measured to any participant during any fiscal year is 3,000,000 shares. The maximum number of our shares of common stock with respect to which restricted stock, RSUs, performance awards and other stock-based awards may be granted to any participant
during any fiscal year is 1,000,000 shares. With respect to awards denominated in cash, the maximum amount that may be earned during any fiscal year by an individual participant of the LTIP is $20,000,000. These provisions are designed so that
compensation resulting from awards can qualify as
tax-deductible
performance-based compensation under Section 162(m) of the Code, assuming other applicable regulatory requirements are satisfied. The aggregate
grant date fair value of awards that may be granted to any
non-employee
director in any fiscal year is $500,000.
Stock options and SARs.
The MDCC may award stock options in the form of nonqualified stock options or incentive stock options, or SARs, each with a maximum term of 10 years. The MDCC will establish the vesting schedule
for stock options and SARs and, with respect to stock options, the method of payment for the exercise price, which may include cash, shares or other awards.
Restricted stock and RSUs.
The MDCC may award restricted stock and RSUs and establish the applicable restrictions, including any
limitation on voting rights of restricted stock or the receipt of dividends. The MDCC will establish the manner and timing under which restrictions may lapse. If employment is terminated during the applicable restriction period, shares of restricted
stock and RSUs still subject to restriction will be forfeited, except as determined otherwise by the MDCC.
Performance awards and
other stock-based awards.
The MDCC may grant performance awards, which may be denominated in cash, shares, other securities or other awards and payable to, or exercisable by, the participant upon the achievement of performance goals during
performance periods, as established by the MDCC. Performance criteria mean any measures, as determined by the MDCC, which may be used to measure the level of performance of the Company or participant during a performance period. The MDCC may grant
other stock-based awards that are denominated or payable in shares, under the terms and conditions as the MDCC will determine.
Dividends and dividend equivalents.
The MDCC may decide to include dividends or dividend equivalents as part of an award (other than
stock options and SARs), and the payment of any such dividends may be deferred, with or without interest, until the award is paid.
Deferrals.
The MDCC also will be able to require or permit award payments to be deferred and may authorize crediting of dividends or
interest or their equivalents in connection with any such deferral.
Transferability.
Awards are not transferable otherwise than
by will or the laws of descent and distribution unless determined otherwise by the MDCC. Awards may not be pledged or otherwise encumbered and are exercisable during the participant’s lifetime only by the participant.
Conditions and restrictions on stock issuable under an award.
The MDCC may provide that shares of our common stock issuable under an
award will be subject to such further restrictions or conditions as the MDCC may determine, including, but not limited to, conditions on vesting or transferability, forfeiture or repurchase provisions, tax withholding conditions and restrictions
regarding the timing and manner of
re-sales
or other subsequent transfers by the participant of shares issuable under an award.
Amendments and termination.
Our Board may amend, suspend or terminate the LTIP, provided, however, that our Board will seek
stockholder approval of material amendments to the LTIP as required by law, regulation or stock exchange and any amendment that would increase the total number of shares available for awards under the LTIP (except pursuant to the corporate
transaction adjustment provisions discussed above) or permit stock options, SARs or other rights to purchase our common stock to be
re-priced,
replaced or
re-granted
through cancellation or by lowering the exercise or purchase price. The MDCC generally may waive conditions or amend the term of awards, or otherwise amend, suspend or terminate awards already granted, provided that such action does not, without the
participant’s consent, impair the rights of the award holder.
51
Federal Income Tax Consequences
The following is a brief summary of certain United States federal income tax
consequences generally arising with respect to awards under the LTIP. This discussion does not address all aspects of the United States federal income tax consequences of participating in the LTIP that may be relevant to participants in light of
their personal investment or tax circumstances and does not discuss any state, local or
non-United
States tax consequences of participating in the LTIP. Each participant is advised to consult his or her
personal tax advisor concerning the application of the United States federal income tax laws to such participant’s particular situation, as well as the applicability and effect of any state, local or
non-United
States tax laws before taking any actions with respect to any awards.
Section
162(m)
—As noted above, Section 162(m) generally limits to $1 million the amount that a publicly held corporation is allowed each year to deduct for the compensation paid to the corporation’s covered employees under Section 162(m).
However, “qualified performance-based compensation” is not subject to the $1 million deduction limit. To qualify as performance based-compensation, the following requirements must be satisfied: (1) the performance goals are
determined by a committee consisting solely of two or more “outside directors”; (2) the material terms under which the compensation is to be paid, including the performance goals, are approved by the corporation’s stockholders; and
(3) the committee certifies that the applicable performance goals were satisfied before payment of any performance-based compensation is made. Compensation payable with respect to stock options and SARs will be considered payable solely on
account of the attainment of
pre-established
objective performance measures (i) if such award has a purchase or base price at least equal to the fair market value of the underlying stock on the date of
grant, (ii) if such award is granted by a committee, or a subcommittee thereof, consisting solely of two or more “outside directors,” and (iii) if the plan under which the stock option or SAR is granted states the maximum number
of shares with respect to which stock options or SARs may be granted during a specified period to any employee.
Stock
Options
—A participant will not recognize taxable income at the time an option is granted and the Company will not be entitled to a tax deduction at that time. A participant will recognize compensation taxable as ordinary income (and subject
to income tax withholding in respect of an employee) upon exercise of a
non-qualified
stock option equal to the excess of the fair market value of the shares purchased over their exercise price, and the
Company will be entitled to a corresponding deduction. A participant will not recognize income (except for purposes of the alternative minimum tax) upon exercise of an incentive stock option. If the shares acquired by exercise of an incentive stock
option are held for the longer of two years from the date the option was granted and one year from the date it was exercised, any gain or loss arising from a subsequent disposition of those shares will be taxed as long-term capital gain or loss, and
the Company will not be entitled to any deduction. If, however, those shares are disposed of within the above-described period, then in the year of that disposition the participant will recognize compensation taxable as ordinary income equal to the
excess of the lesser of (1) the amount realized upon that disposition, and (2) the excess of the fair market value of those shares on the date of exercise over the exercise price, and the Company will be entitled to a corresponding
deduction.
SARs
—A participant will not recognize taxable income at the time SARs are granted and the Company will not be
entitled to a tax deduction at that time. Upon exercise, the participant will recognize compensation taxable as ordinary income (and subject to income tax withholding in respect of an employee) in an amount equal to the fair market value of any
shares delivered and the amount of any cash paid by the Company, and the Company will be entitled to a corresponding deduction.
Stock Awards
—A participant will not recognize taxable income at the time restricted stock is granted and the Company will not be
entitled to a tax deduction at that time, unless the participant makes an election to be taxed at that time. If such election is made, the participant will recognize compensation taxable as ordinary income (and subject to income tax withholding in
respect of an employee) at the time of the grant in an amount equal to the excess of the fair market value for the shares at such time over the amount, if any, paid for those shares. If such election is not made, the participant will recognize
compensation taxable as ordinary income (and subject to income tax withholding in respect of an employee) at the time the restrictions constituting a substantial risk of forfeiture lapse in an amount equal to the excess of the fair market value of
the shares at such time over the amount, if any, paid for those shares. The amount of ordinary income recognized by making the above-described election or upon the lapse of restrictions constituting a substantial risk of forfeiture is deductible by
the Company as compensation expense, except to the extent the deduction limits of Section 162(m) apply. In addition, a participant receiving dividends with respect to restricted stock for which the above-described election has not been made and
prior to the time the restrictions constituting a substantial risk of forfeiture lapse will recognize compensation taxable as ordinary income (and subject to income tax withholding in respect of an employee), rather than dividend income, in an
amount equal to the dividends paid and the Company will be entitled to a corresponding deduction, except to the extent the deduction limits of Section 162(m) apply.
52
A participant who receives shares of common stock that are not subject to any restrictions under the LTIP will recognize compensation taxable as ordinary income on the date of grant in an amount equal to the fair market value of
such shares on that date over the amount, if any, paid for those shares, and the Company will be entitled to a corresponding deduction, except to the extent the deduction limits of Section 162(m) apply.
Restricted Stock Units
—A participant will not recognize taxable income at the time a restricted stock unit is granted and the Company
will not be entitled to a tax deduction at that time. Upon settlement of restricted stock units, the participant will recognize compensation taxable as ordinary income (and subject to income tax withholding in respect of an employee) in an amount
equal to the fair market value of any shares delivered and the amount of any cash paid by the Company, and the Company will be entitled to a corresponding deduction, except to the extent the deduction limits of Section 162(m) apply.
Performance Awards
—A participant will not recognize taxable income at the time performance awards are granted and the Company will not
be entitled to a tax deduction at that time. Upon settlement of performance awards, the participant will recognize compensation taxable as ordinary income (and subject to income tax withholding in respect of an employee) in an amount equal to the
fair market value of any shares delivered and the amount of any cash paid by the Company, and the Company will be entitled to a corresponding deduction, except to the extent the deduction limits of Section 162(m) apply.
Awards Granted to Date Under the Old LTIP
The following table sets forth the number of stock options, RSUs and PSUs granted over the lifetime of the Old LTIP to the individuals and groups indicated as of April 1, 2017.
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|
|
|
|
|
Name
|
|
Number of Shares
Subject
to
Stock Option Awards
|
|
|
RSUs
(#)
|
|
|
PSUs
(#)
|
|
|
|
|
Margaret Keane
|
|
|
750,775
|
|
|
|
490,965
|
|
|
|
211,531
|
|
|
|
|
Brian Doubles
|
|
|
290,916
|
|
|
|
216,058
|
|
|
|
41,403
|
|
|
|
|
Glenn Marino
|
|
|
228,333
|
|
|
|
146,092
|
|
|
|
37,290
|
|
|
|
|
Jonathan Mothner
|
|
|
189,461
|
|
|
|
120,777
|
|
|
|
34,522
|
|
|
|
|
Tom Quindlen
|
|
|
289,667
|
|
|
|
185,613
|
|
|
|
41,358
|
|
|
|
|
Paget L. Alves
|
|
|
—
|
|
|
|
5,428
|
|
|
|
—
|
|
|
|
|
Arthur W. Coviello, Jr.
|
|
|
—
|
|
|
|
5,428
|
|
|
|
—
|
|
|
|
|
William W. Graylin
|
|
|
—
|
|
|
|
5,428
|
|
|
|
—
|
|
|
|
|
Roy A. Guthrie
|
|
|
—
|
|
|
|
10,617
|
|
|
|
—
|
|
|
|
|
Richard C. Hartnack
|
|
|
—
|
|
|
|
12,394
|
|
|
|
—
|
|
|
|
|
Jeffrey G. Naylor
|
|
|
—
|
|
|
|
10,617
|
|
|
|
—
|
|
|
|
|
Laurel J. Richie
|
|
|
—
|
|
|
|
5,428
|
|
|
|
—
|
|
|
|
|
Olympia J. Snowe
|
|
|
—
|
|
|
|
5,428
|
|
|
|
—
|
|
|
|
|
Executive Group (8
persons)
|
|
|
2,199,923
|
|
|
|
1,447,500
|
|
|
|
444,205
|
|
|
|
|
Non-Executive
Director Group (8 persons)
|
|
|
—
|
|
|
|
60,768
|
|
|
|
—
|
|
|
|
|
Non-Executive
Officer Employee Group (995
persons)
|
|
|
7,027,055
|
|
|
|
5,184,561
|
|
|
|
566,925
|
|
|
|
53
Equity Compensation Plan Information
The following table provides information as of December 31, 2016
regarding the number of shares of our common stock that may be issued under our equity compensation plans.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
A
|
|
|
|
B
|
|
|
|
C
|
|
Plan Category
|
|
Number of
securities to be
issued upon exercise
of outstanding options,
warrants and rights
(1)
|
|
|
|
Weighted-average
exercise price
of outstanding
options, warrants
and rights
|
|
|
|
Number of securities
remaining available
for future issuance
under equity
compensation plans
(excluding
securities
reflected in column A)
|
|
Equity compensation plans approved by security holders
|
|
13,006,204
|
|
|
|
$25.13
|
|
|
|
3,340,083
|
|
Equity compensation plans not approved by
security holders
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
Total
|
|
13,006,204
|
|
|
|
$25.13
|
|
|
|
3,340,083
|
|
(1)
|
This column includes 7,499,585 shares underlying stock options, 4,982,973 shares underlying RSUs and 523,646 shares underlying PSUs, in each case, awarded under the Old LTIP.
|
As of December 31, 2016, the weighted-average term of outstanding stock options was 7.9 years.
The table below provides details regarding the number of shares available for future awards under our equity compensation plans as of the end of
each fiscal year since our IPO through December 31, 2016.
|
|
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|
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|
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|
|
|
|
|
|
|
|
|
|
|
|
|
For the Years Ended
December 31,
|
|
|
|
2016
|
|
2015
|
|
2014
|
|
Beginning of the period available shares
|
|
|
|
5,699,056
|
|
|
|
|
7,414,644
|
|
|
|
|
16,605,417
|
|
|
Granted: Stock Based (RSUs/PSUs)
and
Non-Qualified
Stock Options (“NQSOs”)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
– RSUs
|
|
|
|
1,000,900
|
|
|
|
|
793,585
|
|
|
|
|
3,704,535
|
|
|
– PSUs
|
|
|
|
523,646
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
– NQSOs
|
|
|
|
1,272,897
|
|
|
|
|
984,086
|
|
|
|
|
5,553,815
|
|
|
Total
|
|
|
|
2,797,443
|
|
|
|
|
1,777,671
|
|
|
|
|
9,258,350
|
|
|
|
|
|
|
|
Cancelled: Stock Based (RSUs/PSUs) and NQSOs
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
– RSUs
|
|
|
|
226,407
|
|
|
|
|
45,484
|
|
|
|
|
26,806
|
|
|
– PSUs
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
– NQSOs
|
|
|
|
212,063
|
|
|
|
|
16,599
|
|
|
|
|
40,771
|
|
|
Total
|
|
|
|
438,470
|
|
|
|
|
62,083
|
|
|
|
|
67,577
|
|
|
|
|
|
|
|
End of the period available
shares
|
|
|
|
3,340,083
|
|
|
|
|
5,699,056
|
|
|
|
|
7,414,644
|
|
|
|
|
The Board recommends a vote
FOR
the adoption of the amendment to the
Synchrony Financial 2014 Long-Term Incentive Plan and
re-approval
of performance measures, as disclosed in this proxy statement.
|
54
INDEPENDENT AUDITOR
The Audit Committee retained KPMG LLP (“KPMG”) to audit our consolidated and combined financial statements for 2016. In addition, the
Audit Committee retained KPMG to provide other auditing and advisory services in 2016. We understand the need for KPMG to maintain objectivity and independence in its audit of our financial statements. To minimize relationships that could appear to
impair the objectivity of KPMG, our Audit Committee has restricted the
non-audit
services that KPMG may provide to us primarily to tax services and merger and acquisition due diligence and integration
services. The Audit Committee also requires key KPMG partners assigned to our audit to be rotated at least every five years.
Pre-Approval
Processes
It is the Audit Committee’s policy to review and
pre-approve
all audit and
non-audit
services provided to the Company by KPMG on an
engagement-by-engagement
basis. To minimize relationships that could appear to impair KPMG’s objectivity, it is the Audit Committee’s practice to restrict the
non-audit
services that may be provided to the Company by KPMG primarily to tax services and merger and acquisition due diligence and integration services. The Chair of the Audit Committee is authorized to
pre-approve
any audit or
non-audit
service on behalf of the Audit Committee, provided such decisions are presented to the full committee at its next regularly scheduled
meeting.
Accounting Fees and Services
The following table presents fees paid for the audit of our annual consolidated and combined financial statements and all other professional
services rendered by KPMG for the years ended December 31, 2016 and 2015.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Years Ended
December 31,
|
|
|
|
2016
|
|
2015
|
|
Audit fees
|
|
|
|
$5,080,164
|
|
|
|
|
$4,290,536
|
|
|
Audit-related fees
|
|
|
|
495,471
|
|
|
|
|
435,928
|
|
|
Tax fees
|
|
|
|
—
|
|
|
|
|
—
|
|
|
All other fees
|
|
|
|
—
|
|
|
|
|
2,830
|
|
|
Total fees
|
|
|
|
$5,575,635
|
|
|
|
|
$4,729,294
|
|
In the above table, in accordance with SEC rules, “Audit” fees are fees that we paid to KPMG for
(i) the audit of the Company’s annual financial statements included in the Annual Report on Form
10-K
for fiscal year ended December 31, 2016, and review of financial statements included in the
Quarterly Reports on Form
10-Q
for the first, second and third quarters of 2016, and (ii) services that are normally provided by KPMG in connection with statutory and regulatory filings or engagements,
including comfort letter procedures and consent-related procedures. “Audit-related” fees are fees for assurance and related services that are reasonably related to the performance of the audit or review of the Company’s financial
statements, including agreed-upon procedures. “Tax” fees are fees for tax compliance, tax advice and tax planning, and “All other” fees are fees for any services not included in the first three categories.
Hiring Restrictions
The
Audit Committee has adopted restrictions on our hiring of any KPMG partner, director, manager, staff, advising member of the department of professional practice, reviewing actuary, reviewing tax professional and any other persons having
responsibility for providing audit assurance on any aspect of KPMG’s certification of the Company’s financial statements. These restrictions are contained in our Audit Committee Key Practices, which are published on the Company’s
website at http://investors.synchronyfinancial.com under “Corporate Governance.”
55
ITEM 4—RATIFICATION OF SELECTION OF KPMG LLP AS INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM OF THE COMPANY FOR 2017
We are asking our stockholders to ratify the selection of KPMG as our independent registered public accounting firm for 2017. The Audit Committee
has approved the selection of KPMG as our independent registered public accounting firm for 2017. KPMG is currently our independent registered public accounting firm.
Although the Company is not required to seek stockholder approval of this appointment, the Board believes that doing so is consistent with good
corporate governance practices. If the selection is not ratified, the Audit Committee will explore the reasons for stockholder rejection and whether it is appropriate to select another independent auditor.
We have been advised that representatives of KPMG will attend the Annual Meeting. They will have an opportunity to make a statement if they wish
to do so and will be available to respond to appropriate questions.
|
|
|
The Audit Committee and the Board recommend a vote
FOR
ratification of the selection of KPMG
as our independent registered public accounting firm for 2017.
|
Audit Committee Report
The Audit Committee reviews and oversees the Company’s financial reporting process on behalf of the Board, including the selection,
evaluation, compensation and oversight of our independent auditor. Management has the primary responsibility for the Company’s financial statements and overall financial reporting process, including the Company’s internal control over
financial reporting. KPMG, our independent auditor for 2016, has the responsibility to conduct an independent audit in accordance with generally accepted auditing standards and to issue an opinion on the conformity of the Company’s audited
financial statements with generally accepted accounting principles.
In this context, the Audit Committee:
|
|
•
|
|
has reviewed and discussed with management the Company’s audited consolidated and combined financial statements for the year ended December 31, 2016;
|
|
|
•
|
|
has discussed with KPMG the matters required to be discussed by
Auditing Standard No.
1301: Communications with Audit Committees;
|
|
|
•
|
|
has discussed with KPMG its assessment of the effectiveness of the Company’s internal control over financial reporting;
|
|
|
•
|
|
has received from KPMG the written disclosures and the letter required by applicable requirements of the Public Company Accounting Oversight Board regarding KPMG’s communications with the
Audit Committee concerning independence; and
|
|
|
•
|
|
has discussed with KPMG its independence, taking into consideration the amount and nature of the fees paid to the firm for audit and
non-audit
services.
|
Based on the review and discussions described above, the Audit Committee has recommended to the Board that the audited
consolidated and combined financial statements for the year ended December 31, 2016 be included in the Company’s Annual Report on Form
10-K
for the year ended December 31, 2016 for filing with
the SEC.
Respectfully submitted by the Audit Committee of the Board.
|
|
|
Jeffrey G. Naylor, Chair
|
|
Paget L. Alves
|
|
Olympia J. Snowe
|
56
At March 23, 2017, we had 810,804,845 shares of common stock issued and outstanding.
The following table shows information regarding the beneficial ownership of our common stock by:
|
|
•
|
|
all persons known by us to own beneficially more than 5% of our common stock;
|
|
|
•
|
|
our CEO and each of our named executive officers;
|
|
|
•
|
|
each of our directors; and
|
|
|
•
|
|
all directors and executive officers as a group.
|
|
|
|
|
|
Beneficial ownership is determined in accordance with the rules of the SEC. In computing the number
of shares beneficially owned by a person and the percentage ownership of that person, shares of Synchrony common stock subject to options or RSUs held by that person that are currently exercisable or exercisable (or in the case of RSUs, vested or
vest) within 60 days of the date of this proxy statement are deemed to be issued and outstanding. These shares, however, are not deemed outstanding for purposes of computing percentage ownership of each other stockholder. Except as noted by
footnote, and subject to community property laws where applicable, we believe based on the information provided to us that the persons and entities named in the table below have sole voting and investment power with respect to all shares of our
common stock shown as beneficially owned by them.
|
57
Except as noted by footnote, all stockholdings are as of March 23, 2017, and the percentage of beneficial ownership is based on 810,804,845 shares of common stock outstanding as of March 23, 2017.
|
|
|
|
|
|
|
|
|
|
Name of Beneficial Owner
|
|
Number of Shares
|
|
Percent of Total
|
|
BlackRock, Inc.
|
|
|
|
|
|
|
|
|
55 East 52nd Street
|
|
|
|
|
|
|
|
|
New York, NY
10055
(1)
|
|
|
|
52,387,744
|
|
|
6.3%
|
|
|
|
|
|
GIC Private Limited
|
|
|
|
|
|
|
|
|
168, Robinson Road
|
|
|
|
|
|
|
|
|
#37-01,
Capital Tower
|
|
|
|
|
|
|
|
|
Singapore
068912
(2)
|
|
|
|
45,980,617
|
|
|
5.6%
|
|
|
|
|
|
The Vanguard Group
|
|
|
|
|
|
|
|
|
100 Vanguard Blvd.
|
|
|
|
|
|
|
|
|
Malvern, PA
19355
(3)
|
|
|
|
49,977,595
|
|
|
6.1%
|
|
|
|
|
|
Margaret M.
Keane
(4)
|
|
|
|
71,238
|
|
|
*
|
|
|
|
|
|
Brian D.
Doubles
(5)
|
|
|
|
17,257
|
|
|
*
|
|
|
|
|
|
Glenn P.
Marino
(6)
|
|
|
|
19,394
|
|
|
*
|
|
|
|
|
|
Jonathan S.
Mothner
(7)
|
|
|
|
14,278
|
|
|
*
|
|
|
|
|
|
Thomas M.
Quindlen
(8)
|
|
|
|
25,437
|
|
|
*
|
|
|
|
|
|
Paget L. Alves
|
|
|
|
0
|
|
|
0%
|
|
|
|
|
|
Arthur W. Coviello, Jr.
|
|
|
|
6,186
|
|
|
*
|
|
|
|
|
|
William W. Graylin
|
|
|
|
32,000
|
|
|
*
|
|
|
|
|
|
Roy A. Guthrie
(9)
|
|
|
|
10,000
|
|
|
*
|
|
|
|
|
|
Richard C. Hartnack
|
|
|
|
2,000
|
|
|
*
|
|
|
|
|
|
Jeffrey G. Naylor
|
|
|
|
20,000
|
|
|
*
|
|
|
|
|
|
Laurel J. Richie
|
|
|
|
0
|
|
|
0%
|
|
|
|
|
|
Olympia J. Snowe
|
|
|
|
0
|
|
|
0%
|
|
|
|
|
|
All directors and executive officers as a
group (16 persons)
|
|
|
|
257,308
|
|
|
*
|
* Denotes less than 1.0%
|
(1)
|
Based on a Schedule 13G/A filed on January 27, 2017 by BlackRock, Inc. regarding its holdings, together with its subsidiaries, of our common stock as of December 31, 2016. The Schedule
13G/A discloses that the reporting entity had sole voting power as to 44,883,079 of the shares, shared voting power as to 18,469 of the shares, sole dispositive power as to 52,369,275 of the shares and shared dispositive power as to 18,469 of the
shares.
|
|
(2)
|
Based on a Schedule 13G filed on January 25, 2017 by GIC Private Limited regarding its holdings of our common stock as of December 31, 2016. The Schedule 13G discloses that the reporting
entity had sole voting power as to 28,725,657 of the shares, shared voting power as to 17,254,960 of the shares, sole dispositive power as to 28,725,657 of the shares and shared dispositive power as to 17,254,960 of the shares.
|
|
(3)
|
Based on a Schedule 13G/A filed on February 10, 2017 by The Vanguard Group regarding its holdings, together with its subsidiaries, of our common stock as of December 31, 2016. The
Schedule 13G/A discloses that the reporting entity had sole voting power as to 1,268,399 of the shares, shared voting power as to 149,348 of the shares, sole dispositive power as to 48,599,490 of the shares and shared dispositive power as to
1,378,105 of the shares.
|
|
(4)
|
Includes 22,334 restricted stock units and 36,323 options (before netting out shares of our common stock withheld to pay the tax liability of the reporting person) that vested on April 1,
2017. Each restricted stock unit represents a contingent right to receive one share of our common stock.
|
|
(5)
|
Includes 6,118 restricted stock units and 9,749 options (before netting out shares of our common stock withheld to pay the tax liability of the reporting person) that vested on April 1, 2017.
Each restricted stock unit represents a contingent right to receive one share of our common stock.
|
|
(6)
|
Includes 5,335 restricted stock units and 8,509 options (before netting out shares of our common stock withheld to pay the tax liability of the reporting person) that vested on April 1, 2017.
Each restricted stock unit represents a contingent right to receive one share of our common stock.
|
|
(7)
|
Includes 4,910 restricted stock units and 7,831 options (before netting out shares of our common stock withheld to pay the tax liability of the reporting person) that vested on April 1, 2017.
Each restricted stock unit represents a contingent right to receive one share of our common stock.
|
|
(8)
|
Includes 6,730 restricted stock units and 10,724 options (before netting out shares of our common stock withheld to pay the tax liability of the reporting person) that vested on April 1, 2017.
Each restricted stock unit represents a contingent right to receive one share of our common stock.
|
|
(9)
|
Mr. Guthrie is the Investment Manager of Guthrie 2012 Investments LP, which owns the reported securities. Mr. Guthrie disclaims beneficial ownership of the shares of common stock held by
Guthrie 2012 Investments LP, except to the extent of his direct pecuniary interest therein.
|
58
|
|
|
|
|
RELATED PERSON TRANSACTIONS
|
There were no transactions or proposed transactions between the Company and any officer, director or
nominee for director, any stockholder beneficially owning more than 5% of any class of our voting stock or any immediate family member of any of them, since January 1, 2016, of the type or amount required to be disclosed under the applicable
SEC rules.
Related Person Transactions Policy
Our Board has adopted a written policy for the review, approval or ratification of transactions (known as “related person transactions”)
between us or any of our subsidiaries and any related person, in which the amount involved since the beginning of our last completed fiscal year will or may be expected to exceed $120,000 and in which one of our executive officers, directors or
nominees for director, or stockholders beneficially owning more than 5% of any class of our voting stock (or an immediate family member of any of the foregoing has a direct or indirect material interest). Since January 1, 2016, no transaction
has been identified as a related person transaction.
The policy calls for related person transactions to be reported to, reviewed and,
if deemed appropriate, approved or ratified by, the Nominating and Corporate Governance Committee. In determining whether or not to approve or ratify a related person transaction, the Nominating and Corporate Governance Committee will take into
account, among other factors it deems important, whether the related person transaction is in our best interests and whether the transaction is on terms no less favorable than terms generally available to us from an unaffiliated third party under
the same or similar circumstances. In the event a member of the Nominating and Corporate Governance Committee is not disinterested with respect to the related person transaction under review, that member may not participate in the review, approval
or ratification of that related person transaction.
Certain decisions and transactions are not subject to the related person
transaction approval policy, including: (i) decisions on compensation or benefits relating to our directors or executive officers or the hiring or retention of our executive officers, (ii) decisions relating to pro rata distributions to
all our stockholders, (iii) indebtedness transactions with the Bank made in the ordinary course of business, on substantially the same terms, including interest rate and collateral, as those prevailing at the time for comparable loans with
persons not related to the lender and not presenting more than the normal risk of collectability or other unfavorable features and (iv) deposit transactions with the Bank made in the ordinary course of business and not paying a greater rate of
interest on the deposits of a related person than the rate paid to other depositors on similar deposits with the Bank.
Certain of our
directors and executive officers and certain members of their immediate families have received extensions of credit from us in connection with credit card transactions. The extensions of credit were made in the ordinary course of business on
substantially the same terms, including interest rates, as those prevailing at the time for comparable transactions with other persons not related to us and did not involve more than the normal risk of collectability or present other unfavorable
terms. Future extensions of credit of this nature are not subject to the related person transaction approval policy.
59
|
|
|
|
|
|
|
|
|
|
|
|
FREQUENTLY ASKED QUESTIONS
ABOUT THE ANNUAL MEETING (“FAQs”)
|
VOTING INFORMATION
Who is entitled to vote at the Annual Meeting?
Holders of our common stock as of the close of business on the
record date, which is March 23, 2017, are entitled to notice of, and to vote at, the Annual Meeting. As of the record date, there were 810,804,845 shares of our common stock outstanding and entitled to vote at the Annual Meeting, with each
share entitled to one vote.
How do I vote at the Annual Meeting?
Stockholders of record can vote in one of four ways:
|
|
|
|
|
|
|
BY MAIL
|
|
|
You may date, sign and promptly return your proxy card by
mail in a postage prepaid envelope (such proxy card must be received by May 17, 2017).
|
|
|
|
BY TELEPHONE
You may use the toll-free telephone number shown on your Notice or proxy card
up until 11:59 p.m., Eastern Time, on May 17, 2017.
|
|
|
|
|
|
BY THE INTERNET
|
|
|
In Advance
|
|
|
You may visit the internet website indicated on your Notice or proxy card or scan the QR code indicated on your Notice or proxy card with your mobile device, and follow the
on-screen
instructions until 11:59 p.m., Eastern Time, on May 17, 2017.
|
|
|
|
|
|
|
At the Annual Meeting
|
|
|
|
You may visit the internet website at the following address: www.virtualshareholdermeeting.com/SYF2017.
|
Voting instructions (including instructions for both telephonic and internet voting) are provided on the Notice
and the proxy card. The telephone and internet voting procedures are designed to authenticate stockholder identities, to allow stockholders to give voting instructions and to confirm that stockholders’ instructions have been recorded properly.
A control number, located on the Notice and the proxy card, will identify stockholders and allow them to submit their proxies and confirm that their voting instructions have been properly recorded.
If your shares are held through a bank, broker, fiduciary or custodian (which we refer to in this proxy statement as a “broker”), please
follow the voting instructions on the form you receive from such institution.
What if my shares of the Company’s common stock
are held for me by a broker?
If you are the beneficial owner of shares held for you by a broker, your broker must vote those shares
in accordance with your instructions. If you do not provide your broker with instructions as to how to vote such shares, your broker will only be able to vote your shares at its discretion on certain “routine” matters as permitted by NYSE
rules. The proposal to ratify the appointment of KPMG is the only proposal considered a routine matter to be presented at the Annual Meeting. Brokers will not be permitted to vote your shares on any of the other matters presented at the Annual
Meeting. If you do not provide voting instructions on these matters, including the election of the director nominees named herein, the shares will be considered “broker
non-votes”
with respect to
such matters.
What if I do not vote or do not indicate how my
shares should be voted on my proxy card?
If a stockholder does not return a signed proxy card or submit a proxy by telephone or the
internet, and does not attend the meeting and vote, his or her shares will not be voted or counted as present for purposes of establishing a quorum at the Annual Meeting. Shares of our common stock represented by properly executed proxies received
by us and not subsequently revoked will be voted at the Annual Meeting in accordance with the instructions contained therein.
60
If you submit a properly completed proxy but do not indicate how your shares should be voted on a proposal, the shares represented by your proxy will be voted as the Board recommends on such proposal.
In addition, if any
other matter is properly presented at the Annual Meeting, the persons named in the accompanying proxy card will have discretion to vote in their best judgment on such matter.
How can I change my votes or revoke my proxy after I have voted?
Any proxy signed and returned by a stockholder or submitted by telephone or via the internet may be revoked or changed at any time before it is
exercised by mailing a written notice of revocation or change to our Corporate Secretary at Synchrony Financial, 777 Long Ridge Road, Stamford, Connecticut 06902 or by executing and delivering a later-dated proxy (either in writing, by telephone or
via the internet).
Will my votes be publicly disclosed?
No. Stockholder proxies, ballots and tabulations that identify individual stockholders are not publicly disclosed and are available only to the
inspector of election and certain employees, who are obligated to keep such information confidential.
What if other matters come up
during the Annual Meeting?
If any other matters properly come before the meeting, including a question of adjourning or postponing
the meeting, the persons named in the proxies or their substitutes acting thereunder will have discretion to vote on such matters in accordance with their best judgment.
What constitutes a quorum at the Annual Meeting?
The presence at the Annual Meeting, in person or represented by proxy, of the holders of a majority in voting power of the outstanding capital
stock issued and entitled to vote at the Annual Meeting is required to constitute a quorum to transact business at the Annual Meeting. Abstentions are counted for purposes of determining whether a quorum is present. As explained above under
“What if my shares of the Company’s common stock are held for me by a broker?,” if brokers exercise their discretionary voting authority on the ratification of the appointment of KPMG, such shares will be considered present at the
Annual Meeting for quorum purposes and broker
non-votes
will occur as to each of the other proposals presented at the Annual Meeting.
How many votes are required to approve each matter to be considered at the Annual Meeting?
|
|
|
|
|
|
|
|
|
Voting Item
|
|
Voting Standard
|
|
Treatment of Abstentions
and Broker
Non-Votes
|
|
Board
Recommendation
|
|
Election of directors named in this proxy
statement
|
|
Majority of votes cast
|
|
Not counted as votes cast and therefore will have no
effect
|
|
FOR
|
|
|
|
|
|
|
Advisory approval of our named executives’ compensation
|
|
Majority of votes cast
|
|
Not counted as votes cast and therefore will have no effect
|
|
FOR
|
|
|
|
|
|
|
Approve the adoption of the amendment to the Synchrony Financial 2014 Long-Term Incentive Plan and
re-approval
of performance measures
|
|
Majority of votes cast
|
|
Abstentions are counted as votes cast pursuant to NYSE stockholder approval rules applicable to this proposal and will have the same effect as a vote cast against the proposal; broker
non-votes
are not counted as votes cast and therefore will have no effect
|
|
FOR
|
|
|
|
|
|
|
Auditor ratification
|
|
Majority of votes cast
|
|
Not counted as votes cast and therefore will have no effect
|
|
FOR
|
61
Who will count the vote?
Votes will be tabulated by Broadridge. The Board has appointed a representative of
Broadridge to serve as the Inspector of Elections.
Will a list of stockholders be made available?
We will make a list of stockholders available for 10 days prior to the Annual Meeting at our offices located at 777 Long Ridge Road, Stamford,
Connecticut 06902. Please contact Synchrony’s Corporate Secretary by telephone at (203)
585-2400
if you wish to inspect the list of stockholders prior to the Annual Meeting. This list will also be
available during the Annual Meeting at www.virtualshareholdermeeting.com/SYF2017.
PROXY
SOLICITATION AND DOCUMENT REQUEST INFORMATION
Why did I receive a Notice of Internet Availability of Proxy Materials instead of
printed proxy materials?
The SEC permits companies to furnish proxy materials to stockholders by providing access to these
documents over the internet instead of mailing printed copies, which can reduce costs of printing and impact on the environment. Accordingly, we have mailed a Notice to some of our stockholders. All stockholders can access our proxy materials on the
internet website referred to in the Notice. If you received a Notice and would like to receive a printed copy of our proxy materials, you should follow the instructions for obtaining such materials included in the Notice.
Multiple individuals residing at my address are beneficial owners of the Company’s common stock, so why did we receive only one mailing?
The SEC permits companies to deliver a single Notice or set of Annual Meeting materials to an address shared by two or more
stockholders. This delivery method is referred to as “householding.” We have delivered only one such Notice or set of Annual Meeting materials to some stockholders who share an address, unless we received contrary instructions from the
affected stockholders prior to the mailing date. We agree to deliver promptly, upon written or oral request, a separate copy of such Notice or Annual Meeting materials to any stockholder at the shared address to which a single copy of those
documents was delivered. If you prefer to receive separate copies of such Notice or Annual Meeting materials, please contact our Corporate Secretary by telephone at (203)
585-2400
or in writing at Synchrony
Financial, 777 Long Ridge Road, Stamford, Connecticut 06902.
If you are currently a stockholder sharing an address with another
stockholder receiving multiple copies of Notices or Annual Meeting materials and wish to receive only one copy for your household, please contact the Company at the above phone number or address.
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Who is soliciting my proxy and who pays to prepare, mail and solicit the proxies?
The Board is soliciting
proxies from the Company’s stockholders for the Annual Meeting. We will bear the costs of solicitation of proxies for the Annual Meeting, including preparation, assembly, printing and mailing of the Notice, this proxy statement, the annual
report, the proxy card and any additional information furnished to stockholders. We may reimburse persons representing beneficial owners of common stock for their costs of forwarding any solicitation materials to such beneficial owners. However, we
do not reimburse or pay additional compensation to our own directors, officers or other employees for soliciting proxies. In addition, we have retained Georgeson, LLC to assist us in the solicitation of proxies for an aggregate fee of $15,000, plus
reasonable
out-of-pocket
expenses.
INFORMATION ABOUT ATTENDING THE 2017 ANNUAL MEETING
How can I attend the Annual Meeting?
Stockholders as of the record date and/or their authorized representatives are permitted to attend our Annual Meeting. The Annual Meeting will be
conducted entirely over an internet website, at the following address: www.virtualshareholdermeeting.com/SYF2017. Hosting a virtual meeting enables increased stockholder attendance and participation because stockholders can participate from any
location. You may attend the Annual Meeting, vote and submit a question during the Annual Meeting by visiting www.virtualshareholdermeeting.com/SYF2017 and using your
16-digit
control number, located on the
Notice and the proxy card, to enter the meeting.
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OTHER BUSINESS
The Board has no knowledge of any other matter to be submitted at the Annual Meeting. If any other matter shall properly come before the Annual
Meeting, including a question of adjourning or postponing the meeting, the persons named in this proxy statement will have discretionary authority to vote the shares thereby represented in accordance with their best judgment.
ANNUAL REPORT AND COMPANY INFORMATION
A copy of our 2016 Annual Report is being furnished to stockholders concurrently herewith. Our Annual Report and other reports we file with the SEC
are available free of charge on our website as soon as reasonably practicable after they are electronically filed or furnished to the SEC at http://investors.synchronyfinancial.com under “SEC Filings.”
STOCKHOLDER PROPOSALS FOR THE 2018 ANNUAL MEETING
Proposals that stockholders wish to submit for inclusion in our proxy statement for our 2018 annual meeting of stockholders pursuant to Rule
14a-8
under the Exchange Act must be received by our Corporate Secretary at Synchrony Financial, 777 Long Ridge Road, Stamford, Connecticut 06902 no later than December 5, 2017. Any stockholder proposal
submitted for inclusion must be eligible for inclusion in our proxy statement in accordance with the rules and regulations promulgated by the SEC.
With respect to proposals submitted by a stockholder for consideration at our 2018 annual meeting but not for inclusion in our proxy statement for such annual meeting, timely notice of any stockholder proposal must be received by us
in accordance with our Bylaws no earlier than January 18, 2018, nor later than February 17, 2018. Such notice must contain the information required by our Bylaws.
Stockholders who intend to submit director nominees for inclusion in our proxy statement for the 2018 annual meeting must comply with the
requirements of proxy access as set forth in our Bylaws. The stockholder or group of stockholders who wish to submit director nominees pursuant to proxy access must deliver the required materials to the Company not earlier than November 5,
2017, nor later than December 5, 2017. Stockholders who wish to propose director nominees at the 2018 annual meeting but not include such nominees in our proxy statement must deliver notice to the Company at its principal executive offices no
earlier than January 18, 2018, nor later than February 17, 2018, and such notice must otherwise comply with our Bylaws.
IMPORTANT
NOTICE REGARDING INTERNET AVAILABILITY OF PROXY MATERIALS FOR THE 2017 ANNUAL MEETING TO BE HELD ON MAY 18, 2017
Our proxy
materials relating to our Annual Meeting (notice, proxy statement and annual report) are available at www.proxyvote.com.
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APPENDIX A: SYNCHRONY FINANCIAL 2014 LONG-TERM INCENTIVE PLAN, AS AMENDED
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SYNCHRONY FINANCIAL AMENDED AND RESTATED
2014 LONG-TERM INCENTIVE PLAN
SECTION 1. PURPOSE
The purposes of this Amended and Restated Synchrony Financial 2014 Long-Term Incentive Plan
(the “Plan”) are to encourage selected officers, employees,
non-employee
directors and consultants of Synchrony Financial (together with any successor thereto, the “Company”) and its
Affiliates (as defined below) to acquire a proprietary interest in the growth and performance of the Company, to generate an increased incentive to contribute to the Company’s future success and prosperity, thus enhancing the value of the
Company for the benefit of its shareowners, and to enhance the ability of the Company and its Affiliates to attract and retain exceptionally qualified individuals upon whom, in large measure, the sustained progress, growth and profitability of the
Company depend.
SECTION 2. DEFINITIONS
As used in the Plan, the following terms shall have the meanings set forth below:
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(a)
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“Affiliate” shall mean (i) any entity that, directly or through one or more intermediaries, is controlled by the Company and (ii) any entity in which the Company has a
significant equity interest, as determined by the Committee.
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(b)
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“Award” shall mean any Option, Stock Appreciation Right, Restricted Stock, Restricted Stock Unit, Performance Award, Dividend Equivalent, or Other Stock-Based Award granted under the
Plan.
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(c)
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“Award Agreement” shall mean any written agreement, contract, or other instrument or document, including an electronic communication, as may from time to time be designated by the Company
as evidencing any Award granted under the Plan.
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(d)
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“Code” shall mean the Internal Revenue Code of 1986, as amended from time to time.
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(e)
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“Committee” shall mean a committee of the Board of Directors of the Company, acting in accordance with the provisions of Section 3, designated by the Board to administer the Plan and
composed of not less than two
non-employee
directors.
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(f)
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“Dividend Equivalent” shall mean any right granted under Section 6(e) of the Plan.
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(g)
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“Exchange Act” shall mean the Securities Exchange Act of 1934, as amended.
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(h)
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“Fair Market Value” shall mean, with respect to any Shares or other securities, the closing price of a Share on the date as of which the determination is being made as reported on the
principal national stock exchange on which the Shares are then traded or, if there shall be no reported transactions for such date, on the next preceding date for which transactions were reported; provided, however, that if the Shares are not listed
on a national stock exchange or if the closing price of a Share for any date cannot be so determined, Fair Market Value shall be determined by the Committee by whatever means or method as the Committee, in the good faith exercise of its discretion,
shall at such time deem appropriate and, to the extent applicable, in compliance with Section 409A of the Code; provided, further, in the case of grants made in connection with the Initial Public Offering, Fair Market Value shall mean the price per
Share at which the Shares are initially offered for sale to the public by the Company’s underwriters in the Initial Public Offering.
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(i)
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“Incentive Stock Option” shall mean an option granted under Section 6(a) of the Plan that is intended to meet the requirements of Sections 422 of the Code, or any successor provision
thereto.
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(j)
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“Initial Public Offering” shall mean the initial public offering of the Company registered on Form
S-1
(or any successor form under the Securities
Act of 1933, as amended).
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(k)
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“Non-Employee
Director” shall mean any director of the Company who is not an officer or employee of the Company or any Affiliate.
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(l)
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“Non-Qualified
Stock Option” shall mean an option granted under Section 6(a) of the Plan that is not intended to be an Incentive Stock Option.
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SYNCHRONY FINANCIAL 2014 LONG-TERM INCENTIVE
PLAN, AS AMENDED
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(m)
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“Option” shall mean an Incentive Stock Option or a
Non-Qualified
Stock Option.
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(n)
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“Other Stock-Based Award” shall mean any right granted under Section 6(f) of the Plan.
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(o)
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“Participant” shall mean an officer, employee or consultant of the Company or any of its Affiliates or a
Non-Employee
Director, in each case, as
designated to be granted an Award under the Plan.
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(p)
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“Performance Award” shall mean any right granted under Section 6(d) of the Plan.
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(q)
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“Performance Criteria” shall mean any quantitative and/or qualitative measures, as determined by the Committee, which may be used to measure the level of performance of the Company or any
individual Participant during a Performance Period, including any Qualifying Performance Criteria.
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(r)
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“Performance Period” shall mean any period as determined by the Committee in its sole discretion.
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(s)
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“Person” shall mean any individual, corporation, partnership, association, joint-stock company, trust, unincorporated organization, or government or political subdivision thereof.
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(t)
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“Qualifying Performance Criteria” shall mean, to the extent necessary to qualify an Award as “performance-based compensation” under Section 162(m) of the Code, one or more of
the following performance criteria, either individually, alternatively or in any combination, applied to either the company as a whole or to a business unit or related company, and measured on an absolute basis or relative to a
pre-established
target, to a previous year’s results or to a designated comparison group, in each case as specified by the Committee in the Award: purchase volume; loan receivables; Tier 1 common ratio;
liquidity as a percentage of total assets; liquidity coverage ratio; tangible common equity to tangible assets ratio; platform revenue; net earnings; earnings per share; diluted earnings per share; return on average assets; return on capital or
invested capital; return on equity; cash flow; gross or operating profit and margin rate; net interest margin; other expense efficiency; active accounts; new accounts; the attainment by a Share of a specified Fair Market Value for a specified period
of time; increase in stockholder value; return on investments; total stockholder return; earnings or income of the Company before or after taxes and/or interest; earnings before interest, taxes, depreciation and amortization (“EBITDA”);
EBITDA margin; operating income; operating expenses, attainment of expense levels or cost reduction goals; net charge-offs and net
charge-off
percent; delinquency rates; won, lost and extended deals; market
share; interest expense; economic value created; net cash provided by operations;
price-to-earnings
growth; and strategic business criteria, consisting of one or more
objectives based on meeting specified goals relating to compliance, market penetration, customer acquisition, business expansion, cost targets, customer satisfaction, reductions in errors and omissions, reductions in lost business, management of
employment practices and employee benefits, supervision of litigation and information technology, quality and quality audit scores, efficiency, and acquisitions or divestitures, or any combination of the foregoing. The applicable performance
measures may be applied on a
pre-
or
post-tax
basis and may be adjusted in accordance with Section 162(m) of the Code to include or exclude objectively determinable
components of any performance measure, including, without limitation, charges for restructurings, discontinued operations, extraordinary items and all items of gain, loss or expense determined to be extraordinary or unusual in nature or infrequent
in occurrence, related to the disposal of a segment or a business, or related to a change in accounting principle or otherwise. With respect to Participants who are not “covered employees” within the meaning of Section 162(m) of the Code
and who, in the Committee’s judgment, are not likely to be covered employees at any time during the applicable Performance Period or during any period in which an award may be paid following a Performance Period, the Performance Criteria may
consist of any objective or subjective corporate-wide or subsidiary, division, operating unit or individual measures, whether or not listed herein. If the Committee determines that it is advisable to grant Awards that are not intended to qualify as
performance-based compensation under Section 162(m) of the Code, the Committee may grant such award without satisfying the requirements of Section 162(m) of the Code and that use Performance Criteria other than those specified herein.
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(u)
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“Restricted Securities” shall mean Awards of Restricted Stock or other Awards under which issued and outstanding Shares are held subject to certain restrictions.
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(v)
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“Restricted Stock” shall mean any award of Shares granted under Section 6(c) of the Plan.
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(w)
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“Restricted Stock Unit” shall mean any right granted under Section 6(c) of the Plan that is denominated in Shares.
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(x)
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“Shares” shall mean the common shares of the Company, $0.01 par value, and such other securities as may become the subject of Awards, or become subject to Awards, pursuant to an
adjustment made under Section 4(b) of the Plan.
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(y)
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“Stock Appreciation Right” shall mean any right granted under Section 6(b) of the Plan.
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SYNCHRONY FINANCIAL 2014 LONG-TERM INCENTIVE
PLAN, AS AMENDED
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SECTION 3. ADMINISTRATION
Except as otherwise provided herein, the Plan shall be administered by the Committee,
which shall have the power to interpret the Plan and to adopt such rules and guidelines for implementing the terms of the Plan as it may deem appropriate. The Committee shall have the ability to modify the Plan provisions, to the extent necessary,
or delegate such authority, to accommodate any changes in law and regulations in jurisdictions in which Participants will receive Awards.
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(a)
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Subject to the terms of the Plan and applicable law, the Committee shall have full power and authority to:
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(i)
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designate Participants;
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(ii)
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determine the type or types of Awards to be granted to each Participant under the Plan;
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(iii)
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determine the number of Shares to be covered by (or with respect to which payments, rights, or other matters are to be calculated in connection with) Awards;
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(iv)
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determine the terms and conditions of any Award, including any restrictive covenants, clawback or recoupment provisions or requirements that a Participant execute a waiver and release;
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(v)
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determine whether, to what extent, and under what circumstances Awards may be settled or exercised in cash, Shares, other securities, or other Awards, or canceled, forfeited, or suspended, and the
method or methods by which Awards may be settled, exercised, canceled, forfeited, or suspended;
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(vi)
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determine whether, to what extent, and under what circumstances cash, Shares, other securities, other Awards, and other amounts payable with respect to an Award under the Plan shall be deferred
either automatically or at the election of the holder thereof or of the Committee;
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(vii)
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interpret and administer the Plan and any instrument or agreement relating to, or Award made under, the Plan;
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(viii)
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establish, amend, suspend, or waive such rules and guidelines;
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(ix)
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appoint such agents as it shall deem appropriate for the proper administration of the Plan;
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(x)
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make any other determination and take any other action that the Committee deems necessary or desirable for the administration of the Plan; and
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(xi)
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correct any defect, supply any omission, or reconcile any inconsistency in the Plan or any Award in the manner and to the extent it shall deem desirable to carry the Plan into effect.
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(b)
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Unless otherwise expressly provided in the Plan, all designations, determinations, interpretations, and other decisions under or with respect to the Plan or any Award shall be within the sole
discretion of the Committee, may be made at any time, and shall be final, conclusive, and binding upon all Persons, including the Company, any Affiliate, any Participant, any holder or beneficiary of any Award, any shareowner, and any employee of
the Company or of any Affiliate. To the extent permitted by Section 162(m) of the Code and Section 16 of the Exchange Act, actions of the Committee may be taken by:
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(i)
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the Chairman of the Committee;
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(ii)
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a subcommittee, designated by the Committee;
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(iii)
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the Committee but with one or more members abstaining or recusing himself or herself from acting on the matter, so long as two or more members remain to act on the matter. Such action, authorized
by such a subcommittee or by the Committee upon the abstention or recusal of such members, shall be the action of the Committee for purposes of the Plan; or
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(iv)
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one or more officers or managers of the Company or any Affiliate, or a committee of such officers or managers whose authority is subject to such terms and limitations set forth by the Committee,
and only with respect to employees who are not officers or
Non-Employee
Directors of the Company for purposes of Section 16 of the Exchange Act. This delegation shall include modifications necessary to
accommodate changes in the laws or regulations of jurisdictions outside the U.S.
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SYNCHRONY FINANCIAL 2014 LONG-TERM INCENTIVE
PLAN, AS AMENDED
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SECTION 4. SHARES AVAILABLE FOR AWARDS
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(a)
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SHARES AVAILABLE. Subject to adjustment as provided in Section 4(b):
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(i)
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The total number of Shares reserved and available for delivery pursuant to Awards granted under the Plan shall be 62,605,417. If any Shares covered by an Award granted under the Plan, or to which
such an Award relates, are forfeited, or if an Award otherwise terminates without the delivery of Shares or of other consideration, or if an Award is settled in cash, then the Shares covered by such Award, or to which such Award relates, or the
number of Shares otherwise counted against the aggregate number of Shares available under the Plan with respect to such Award, to the extent of any such forfeiture, termination or cash settlement, shall again be available for granting Awards under
the Plan. The full number of Shares available for delivery under the Plan may be delivered pursuant to Incentive Stock Options, except that in calculating the number of Shares that remain available for Awards of Incentive Stock Options, the rules
set forth in this Section shall not apply to the extent not permitted by Section 422 of the Code.
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(ii)
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ACCOUNTING FOR AWARDS. For purposes of this Section 4,
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(A)
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If an Award (other than a Dividend Equivalent) is denominated in Shares, the number of Shares covered by such Award, or to which such Award relates, shall be counted on the date of grant of such
Award against the aggregate number of Shares available for granting Awards under the Plan; provided, however that if an Award is settled or paid by the Company in whole or in part through the delivery of consideration other than Shares, or by
delivery of fewer than the full number of Shares that was counted against the Shares available for delivery as provided above, there shall be added back to the number of Shares available for delivery pursuant to Awards the excess of the number of
Shares that had been so counted over the number of Shares (if any) actually delivered upon payment or settlement of the Award (including with respect to Awards that are outstanding as of the effective date of the amendment and restatement of the
Plan).
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(B)
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If an Award is not denominated in Shares, the number of Shares available for delivery shall be reduced by the number of Shares actually delivered upon payment or settlement of the Award.
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(C)
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Dividend Equivalents denominated in Shares and Awards not denominated, but potentially payable, in Shares shall be counted against the aggregate number of Shares available for granting Awards under
the Plan in such amount and at such time as the Dividend Equivalents and such Awards are settled in Shares; provided, however, that Awards that operate in tandem with (whether granted simultaneously with or at a different time from), or that are
substituted for, other Awards may only be counted once against the aggregate number of Shares available, and the Committee shall adopt procedures, as it deems appropriate, in order to avoid double counting. Any Shares that are delivered by the
Company, and any Awards that are granted by, or become obligations of, the Company through the assumption by the Company or an Affiliate of, or in substitution for, outstanding awards previously granted by an acquired company, shall not be counted
against the Shares available for granting Awards under this Plan.
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(D)
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Notwithstanding anything herein to the contrary, any Shares related to Awards which terminate by expiration, forfeiture, cancellation, or otherwise without the issuance of such Shares, are settled
in cash in lieu of Shares, or are exchanged with the Committee’s permission, prior to the issuance of Shares, for Awards not involving Shares, shall be available again for grant under this Plan. Shares subject to an Award under the Plan may not
again be made available for issuance under the Plan if such Shares are: (x) Shares that were subject to an Option or a stock-settled Stock Appreciation Right and were not issued upon the net settlement or net exercise of such Option or Stock
Appreciation Right, (y) Shares delivered to or withheld by the Company to pay the exercise price or the withholding taxes under Options or Stock Appreciation Rights, or (z) Shares repurchased on the open market with the proceeds of an
Option exercise. Shares delivered to or withheld by the Company to pay the withholding taxes for Awards other than Options and Stock Appreciation Rights shall again be available for issuance under this Plan.
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(iii)
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SOURCES OF SHARES DELIVERABLE UNDER AWARDS. Any Shares delivered pursuant to an Award may consist, in whole or in part, of authorized and unissued Shares or of treasury Shares.
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SYNCHRONY FINANCIAL 2014 LONG-TERM INCENTIVE
PLAN, AS AMENDED
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(i)
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In the event that the Committee shall determine that any dividend or other distribution (whether in the form of cash, Shares, or other securities), recapitalization, stock split, reverse stock
split, reorganization, merger, consolidation,
split-up,
spin-off,
combination, repurchase, or exchange of Shares or other securities of the Company, issuance of warrants
or other rights to purchase Shares or other securities of the Company, or other similar corporate transaction or event constitutes an equity restructuring transaction, as that term is defined in the Accounting Standards Codification 718 (or any
successor accounting standard) or otherwise affects the Shares, then the Committee shall adjust the following in a manner that is determined by the Committee to be appropriate in order to prevent dilution or enlargement of the benefits or potential
benefits intended to be made available under the Plan:
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(A)
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the number and type of Shares or other securities which thereafter may be made the subject of Awards;
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(B)
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the number and type of Shares or other securities subject to outstanding Awards;
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(C)
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the number and type of Shares or other securities specified as the annual
per-participant
limitation under Section 6(g)(v) and (vi);
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(D)
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the grant, purchase, or exercise price with respect to any Award, or, if deemed appropriate, make provision for a cash payment to the holder of an outstanding Award; and
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(E)
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other value determinations applicable to outstanding awards.
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Provided, however, in each case, that with respect to Awards of Incentive Stock Options no such adjustment shall be authorized to the extent that
such authority would cause the Plan to violate Sections 422(b)(1) of the Code or any successor provision thereto and, with respect to Awards of Stock Appreciation Rights and Options, such adjustment shall be in accordance with Section 409A of the
Code; and provided further, however, that the number of Shares subject to any Award denominated in Shares shall always be a whole number.
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(ii)
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ADJUSTMENTS OF AWARDS UPON CERTAIN ACQUISITIONS. In the event the Company or any Affiliate shall assume outstanding employee awards or the right or obligation to make future such awards in
connection with the acquisition of another business or another corporation or business entity, the Committee may make such adjustments, not inconsistent with the terms of the Plan, in the terms of Awards as it shall deem appropriate in order to
achieve reasonable comparability or other equitable relationship between the assumed awards and the Awards granted under the Plan as so adjusted.
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(iii)
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ADJUSTMENTS OF AWARDS UPON THE OCCURRENCE OF CERTAIN UNUSUAL OR NONRECURRING EVENTS. The Committee shall be authorized to make adjustments in the terms and conditions of, and the criteria included
in, Awards in recognition of unusual or nonrecurring events affecting the Company, any Affiliate, or the financial statements of the Company or any Affiliate, or of changes in applicable laws, regulations, or accounting principles, whenever the
Committee determines that such adjustments are appropriate in order to prevent dilution or enlargement of the benefits or potential benefits to be made available under the Plan.
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SECTION 5. ELIGIBILITY
Any officer, employee or consultant of the Company or of any Affiliate and any
Non-Employee
Director shall
be eligible to be designated a Participant.
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SYNCHRONY FINANCIAL 2014 LONG-TERM INCENTIVE
PLAN, AS AMENDED
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SECTION 6. AWARDS
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(a)
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OPTIONS. The Committee is hereby authorized to grant Options to Participants with the following terms and conditions and with such additional terms and conditions, in either case not inconsistent
with the provisions of the Plan, as the Committee shall determine:
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(i)
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EXERCISE PRICE. The purchase price per Share purchasable under an Option shall be determined by the Committee; provided, however, and except as provided in Section 4(b), that such purchase price
shall not be less than 100% of the Fair Market Value of a Share on the date of grant of such Option.
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(ii)
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OPTION TERM. The term of each Option shall not exceed ten (10) years from the date of grant.
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(iii)
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TIME AND METHOD OF EXERCISE. The Committee shall establish in the applicable Award Agreement the time or times at which an Option may be exercised in whole or in part, and the method or methods by
which, and the form or forms, including, without limitation, cash, Shares, or other Awards, or any combination thereof, having a Fair Market Value on the exercise date equal to the relevant exercise price, in which, payment of the exercise price
with respect thereto may be made or deemed to have been made.
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(iv)
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INCENTIVE STOCK OPTIONS. The terms of any Incentive Stock Option granted under the Plan shall be designed to comply in all respects with the provisions of Sections 422 of the Code, or any successor
provision thereto, and any regulations promulgated thereunder. Notwithstanding anything in this Section 6(a) to the contrary, Options designated as Incentive Stock Options shall not be eligible for treatment under the Code as Incentive Stock Options
(and will be deemed to be
Non-Qualified
Stock Options) to the extent that either (1) the aggregate Fair Market Value of Shares (determined as of the time of grant) with respect to which such Options are
exercisable for the first time by the Participant during any calendar year (under all plans of the Company and any subsidiary) exceeds $100,000, taking Options into account in the order in which they were granted, or (2) such Options otherwise
remain exercisable but are not exercised within three (3) months of termination of employment (or such other period of time provided in Section 422 of the Code).
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(b)
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STOCK APPRECIATION RIGHTS. The Committee is hereby authorized to grant Stock Appreciation Rights to Participants. Subject to the terms of the Plan and any applicable Award Agreement, a Stock
Appreciation Right granted under the Plan shall confer on the holder thereof a right to receive, upon exercise thereof, the excess of (i) the Fair Market Value of one Share on the date of exercise over (ii) the grant price of the right as
specified by the Committee.
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(i)
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GRANT PRICE. Shall be determined by the Committee, provided, however, and except as provided in Section 4(b), that such price shall not be less than 100% of the Fair Market Value of one Share on
the date of grant of the Stock Appreciation Right, except that if a Stock Appreciation Right is at any time granted in tandem to an Option, the grant price of the Stock Appreciation Right shall not be less than the exercise price of such Option.
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(ii)
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TERM. The term of each Stock Appreciation Right shall not exceed ten (10) years from the date of grant.
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(iii)
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TIME AND METHOD OF EXERCISE. The Committee shall establish in the applicable Award Agreement the time or times at which a Stock Appreciation Right may be exercised in whole or in part.
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(c)
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RESTRICTED STOCK AND RESTRICTED STOCK UNITS.
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(i)
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ISSUANCE. The Committee is hereby authorized to grant Awards of Restricted Stock and Restricted Stock Units to Participants. Subject to the terms of the Plan or the applicable Award Agreement, a
Restricted Stock Unit may be payable in Shares or cash.
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(ii)
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RESTRICTIONS. Shares of Restricted Stock and Restricted Stock Units shall be subject to such restrictions as the Committee may establish in the applicable Award Agreement (including, without
limitation, any limitation on the right to vote a Share of Restricted Stock or the right to receive any dividend or other right), which restrictions may lapse separately or in combination at such time or times, in such installments or otherwise, as
the Committee may deem appropriate. Unrestricted Shares, evidenced in such manner as the Committee shall deem appropriate, shall be delivered to the holder of Restricted Stock promptly after such restrictions have lapsed.
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SYNCHRONY FINANCIAL 2014 LONG-TERM INCENTIVE
PLAN, AS AMENDED
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(iii)
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REGISTRATION. Any Restricted Stock or Restricted Stock Units granted under the Plan may be evidenced in such manner as the Committee may deem appropriate, including, without limitation, book-entry
registration or issuance of a stock certificate or certificates. In the event any stock certificate is issued in respect of Shares of Restricted Stock granted under the Plan, such certificate shall be registered in the name of the Participant and
shall bear an appropriate legend referring to the terms, conditions, and restrictions applicable to such Restricted Stock.
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(iv)
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FORFEITURE. Upon termination of employment during the applicable restriction period, except as determined otherwise by the Committee, all Shares of Restricted Stock and all Restricted Stock Units
still, in either case, subject to restriction shall be forfeited and reacquired by the Company.
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(d)
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PERFORMANCE AWARDS. The Committee is hereby authorized to grant Performance Awards to Participants. Performance Awards include arrangements under which the grant, issuance, retention, vesting
and/or transferability of any Award is subject to such Performance Criteria and such additional conditions or terms as the Committee may designate. Subject to the terms of the Plan and any applicable Award Agreement, a Performance Award granted
under the Plan:
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(i)
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may be denominated or payable in cash, Shares (including, without limitation, Restricted Stock), other securities, or other Awards; and
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(ii)
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shall confer on the holder thereof rights valued as determined by the Committee and payable to, or exercisable by, the holder of the Performance Award, in whole or in part, upon the achievement of
such Performance Criteria during such Performance Periods as the Committee shall establish.
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(e)
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DIVIDEND EQUIVALENTS. The Committee is hereby authorized to grant to Participants Awards under which the holders thereof shall be entitled to receive payments equivalent to dividends or interest
with respect to a number of Shares determined by the Committee, and the Committee may provide that such amounts (if any) shall be deemed to have been reinvested in additional Shares or otherwise reinvested. Subject to the terms of the Plan and any
applicable Award Agreement, such Awards may have such terms and conditions as the Committee shall determine; provided, however, any Dividend Equivalents with respect to Awards subject to performance-based vesting conditions shall be subject to the
same restrictions as the underlying Awards.
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(f)
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OTHER STOCK-BASED AWARDS. The Committee is hereby authorized to grant to Participants such other Awards that are denominated or payable in, valued in whole or in part by reference to, or otherwise
based on or related to, Shares (including, without limitation, securities convertible into Shares), as are deemed by the Committee to be consistent with the purposes of the Plan, provided, however, that such grants must comply with applicable law.
Subject to the terms of the Plan and any applicable Award Agreement, the Committee shall determine the terms and conditions of such Awards. Shares or other securities delivered pursuant to a purchase right granted under this Section 6(f) shall be
purchased for such consideration, which may be paid by such method or methods and in such form or forms, including, without limitation, cash, Shares, other securities, or other Awards, or any combination thereof, as the Committee shall determine,
the value of which consideration, as established by the Committee, and except as provided in Section 4(b), shall not be less than the Fair Market Value of such Shares or other securities as of the date such purchase right is granted.
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(i)
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NO CASH CONSIDERATION FOR AWARDS. Awards shall be granted for no cash consideration or for such minimal cash consideration as may be required by applicable law.
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(ii)
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AWARDS MAY BE GRANTED SEPARATELY OR TOGETHER. Awards may, in the discretion of the Committee, be granted either alone or in addition to, in tandem with, or in substitution for any other Award or
any award granted under any other plan of the Company or any Affiliate. Awards granted in addition to or in tandem with other Awards, or in addition to or in tandem with awards granted under any other plan of the Company or any Affiliate, may be
granted either at the same time as or at a different time from the grant of such other Awards or awards.
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SYNCHRONY FINANCIAL 2014 LONG-TERM INCENTIVE
PLAN, AS AMENDED
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(iii)
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FORMS OF PAYMENT UNDER AWARDS. Subject to the terms of the Plan and of any applicable Award Agreement, payments or transfers to be made by the Company or an Affiliate upon the grant, exercise, or
payment of an Award may be made in such form or forms as the Committee shall determine, including, without limitation, cash, Shares, rights in or to Shares issuable under the Award or other Awards, other securities, or other Awards, or any
combination thereof, and may be made in a single payment or transfer, in installments, or on a deferred basis, in each case in accordance with rules and procedures established by the Committee. Such rules and procedures may include, without
limitation, provisions for the payment or crediting of reasonable interest on installment or deferred payments or the grant or crediting of Dividend Equivalents in respect of installment or deferred payments.
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(iv)
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LIMITS ON TRANSFER OF AWARDS. Except as provided by the Committee, no Award and no right under any such Award, shall be assignable, alienable, saleable, or transferable by a Participant otherwise
than by will or by the laws of descent and distribution; provided, however, that, if so determined by the Committee, a Participant may, in the manner established by the Committee, designate a beneficiary or beneficiaries to exercise the rights of
the Participant with respect to any Award upon the death of the Participant. Each Award, and each right under any Award, shall be exercisable, during the Participant’s lifetime, only by the Participant or, if permissible under applicable law,
by the Participant’s guardian or legal representative. No Award and no right under any such Award, may be pledged, alienated, attached, or otherwise encumbered, and any purported pledge, alienation, attachment, or encumbrance thereof shall be
void and unenforceable against the Company or any Affiliate.
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(v)
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PER-PERSON
LIMITATION ON OPTIONS AND SARs. The number of Shares with respect to which Options and Stock Appreciation Rights may be granted under the Plan
during any fiscal year to an individual Participant shall not exceed 3,000,000 Shares, subject to adjustment as provided in Section 4(b).
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(vi)
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PER-PERSON
LIMITATION ON CERTAIN AWARDS. Other than Options and Stock Appreciation Rights, (A) the aggregate number of Shares with respect to which
Restricted Stock, Restricted Stock Units, Performance Awards and Other Stock-Based Awards may be granted under the Plan during any fiscal year to an individual Participant shall not exceed 1,000,000 Shares, subject to adjustment as provided in
Section 4(b) and (B) with respect to Awards denominated in cash, the maximum amount that may be earned during any fiscal year by an individual Participant shall not exceed $20,000,000. The aggregate grant date fair value of the Awards that may
be granted to any
Non-Employee
Director in any fiscal year shall not exceed $500,000.
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(vii)
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CONDITIONS AND RESTRICTIONS UPON SECURITIES SUBJECT TO AWARDS. The Committee may provide that the Shares issued upon exercise of an Option or Stock Appreciation Right or otherwise subject to or
issued under an Award shall be subject to such further agreements, restrictions, conditions or limitations as the Committee in its discretion may specify prior to the exercise of such Option or Stock Appreciation Right or the grant, vesting or
settlement of such Award, including without limitation, conditions on vesting or transferability and forfeiture or repurchase provisions or provisions on payment of taxes arising in connection with an Award. Without limiting the foregoing, such
restrictions may address the timing and manner of any
re-sales
by the Participant or other subsequent transfers by the Participant of any Shares issued under an Award, including without limitation:
(A) restrictions under an insider trading policy or pursuant to applicable law, (B) restrictions designed to delay and/or coordinate the timing and manner of sales by Participant and holders of other Company equity compensation
arrangements, (C) restrictions as to the use of a specified brokerage firm for such
re-sales
or other transfers and (D) provisions requiring Shares to be sold on the open market or to the Company in
order to satisfy tax withholding or other obligations.
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(viii)
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SHARE CERTIFICATES. All Shares or other securities delivered under the Plan pursuant to any Award or the exercise thereof shall be subject to such stop transfer orders and other restrictions as the
Committee may deem advisable under the Plan or the rules, regulations, and other requirements of the Securities and Exchange Commission, any stock exchange upon which such Shares or other securities are then listed, and any applicable Federal,
state, or local securities laws, and the Committee may cause a legend or legends to be put on any such certificates to make appropriate reference to such restrictions.
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SYNCHRONY FINANCIAL 2014 LONG-TERM INCENTIVE
PLAN, AS AMENDED
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SECTION 7. AMENDMENT AND TERMINATION
Except to the extent prohibited by applicable law and unless otherwise
expressly provided in an Award Agreement or in the Plan:
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(a)
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AMENDMENTS TO THE PLAN. The Board of Directors of the Company may amend, alter, suspend, discontinue, or terminate the Plan, in whole or in part; provided, however, that without the prior approval
of the Company’s shareowners, no material amendment shall be made if shareowner approval is required by law, regulation, or stock exchange, and; provided, further, that, notwithstanding any other provision of the Plan or any Award Agreement, no
such amendment, alteration, suspension, discontinuation, or termination shall be made without the approval of the shareowners of the Company that would:
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(i)
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increase the total number of Shares available for Awards under the Plan, except as provided in Section 4 hereof; or
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(ii)
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except as provided in Section 4(b), permit Options, Stock Appreciation Rights, or other Stock-Based Awards encompassing rights to purchase Shares to be
re-priced,
replaced, or
re-granted
through cancellation, or by lowering the Option Price of a previously granted Option or the grant price of a previously granted Stock
Appreciation Right, or the purchase price of a previously granted Other Stock-Based Award.
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(b)
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AMENDMENTS TO AWARDS. The Committee may waive any conditions or rights under, amend any terms of, or amend, alter, suspend, discontinue, or terminate, any Awards theretofore granted, prospectively
or retroactively. No such amendment or alteration shall be made which would impair the rights of any Participant, without such Participant’s consent, under any Award theretofore granted, provided that no such consent shall be required with
respect to any amendment or alteration if the Committee determines in its sole discretion that such amendment or alteration either (i) is required or advisable in order for the Company, the Plan or the Award to satisfy or conform to any law or
regulation or to meet the requirements of any accounting standard, or (ii) is not reasonably likely to significantly diminish the benefits provided under such Award.
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SECTION 8. GENERAL PROVISIONS
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(a)
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NO RIGHTS TO AWARDS. No Participant or other Person shall have any claim to be granted any Award under the Plan, or, having been selected to receive an Award under this Plan, to be selected to
receive a future Award, and further there is no obligation for uniformity of treatment of employees or consultants of the Company or any Affiliates,
Non-Employee
Directors, Participants, or holders or
beneficiaries of Awards under the Plan. The terms and conditions of Awards need not be the same with respect to each recipient.
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(b)
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WITHHOLDING. The Company or any Affiliate shall be authorized to withhold from any Award granted or any payment due or transfer made under any Award or under the Plan the amount (in cash, Shares,
other securities, or other Awards) of withholding taxes due in respect of an Award, its exercise, or any payment or transfer under such Award or under the Plan and to take such other action as may be necessary in the opinion of the Company or
Affiliate to satisfy statutory withholding obligations for the payment of such taxes.
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(c)
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NO LIMIT ON OTHER COMPENSATION ARRANGEMENTS. Nothing contained in the Plan shall prevent the Company or any Affiliate from adopting or continuing in effect other or additional compensation
arrangements, and such arrangements may be either generally applicable or applicable only in specific cases.
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(d)
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NO RIGHT TO EMPLOYMENT. The grant of an Award shall not constitute an employment contract nor be construed as giving a Participant the right to be retained in the employ of the Company or any
Affiliate. Further, the Company or an Affiliate may at any time dismiss a Participant from employment, free from any liability, or any claim under the Plan, unless otherwise expressly provided in the Plan or in any Award Agreement.
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(e)
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GOVERNING LAW. The validity, construction, and effect of the Plan and any rules and regulations relating to the Plan shall be determined in accordance with the laws of the State of Delaware and
applicable Federal law without regard to conflict of law.
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73
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SYNCHRONY FINANCIAL 2014 LONG-TERM INCENTIVE
PLAN, AS AMENDED
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(f)
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SEVERABILITY. If any provision of the Plan or any Award is or becomes or is deemed to be invalid, illegal, or unenforceable in any jurisdiction, or as to any Person or Award, or would disqualify
the Plan or any Award under any law deemed applicable by the Committee, such provision shall be construed or deemed amended to conform to applicable laws, or if it cannot be so construed or deemed amended without, in the determination of the
Committee, materially altering the intent of the Plan or the Award, such provision shall be stricken as to such jurisdiction, Person, or Award, and the remainder of the Plan and any such Award shall remain in full force and effect.
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(g)
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NO TRUST OR FUND CREATED. Neither the Plan nor any Award shall create or be construed to create a trust or separate fund of any kind or a fiduciary relationship between the Company or any Affiliate
and a Participant or any other Person. To the extent that any Person acquires a right to receive payments from the Company or any Affiliate pursuant to an Award, such right shall be no greater than the right of any unsecured general creditor of the
Company or any Affiliate.
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(h)
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NO FRACTIONAL SHARES. No fractional Shares shall be issued or delivered pursuant to the Plan or any Award, and the Committee shall determine whether cash, or other securities shall be paid or
transferred in lieu of any fractional Shares, or whether such fractional Shares or any rights thereto shall be canceled, terminated, or otherwise eliminated.
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(i)
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HEADINGS. Headings are given to the Sections and subsections of the Plan solely as a convenience to facilitate reference. Such headings shall not be deemed in any way material or relevant to the
construction or interpretation of the Plan or any provision thereof.
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(j)
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INDEMNIFICATION. Subject to requirements of Delaware State law, each individual who is or shall have been a member of the Board, or a Committee appointed by the Board, or an officer of the Company
to whom authority was delegated in accordance with Section 3, shall be indemnified and held harmless by the Company against and from any loss, cost, liability, or expense that may be imposed upon or reasonably incurred by him or her in
connection with or resulting from any claim, action, suit, or proceeding to which he or she may be a party or in which he or she may be involved by reason of any action taken or failure to act under this Plan and against and from any and all amounts
paid by him or her in settlement thereof, with the Company’s approval, or paid by him or her in satisfaction of any judgment in any such action, suit, or proceeding against him or her, provided he or she shall give the Company an opportunity,
at its own expense, to handle and defend the same before he or she undertakes to handle and defend it on his/her own behalf, unless such loss, cost, liability, or expense is a result of his/her own willful misconduct or except as expressly provided
by statute. The foregoing right of indemnification shall not be exclusive of any other rights of indemnification to which such individuals may be entitled under the Company’s Certificate of Incorporation or Bylaws, as a matter of law, or
otherwise, or any power that the Company may have to indemnify them or hold them harmless.
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(k)
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COMPLIANCE WITH SECTION 409A OF THE CODE. Except to the extent specifically provided otherwise by the Committee, Awards under the Plan are intended to satisfy the requirements of Section 409A
of the Code (and the Treasury Department guidance and regulations issued thereunder) so as to avoid the imposition of any additional taxes or penalties under Section 409A of the Code. If the Committee determines that an Award, Award Agreement,
payment, distribution, deferral election, transaction or any other action or arrangement contemplated by the provisions of the Plan would, if undertaken, cause a Participant to become subject to any additional taxes or other penalties under Section
409A of the Code, then unless the Committee specifically provides otherwise, such Award, Award Agreement, payment, distribution, deferral election, transaction or other action or arrangement shall not be given effect to the extent it causes such
result and the related provisions of the Plan and/or Award Agreement will be deemed modified, or, if necessary, suspended in order to comply with the requirements of Section 409A of the Code to the extent determined appropriate by the Committee, in
each case without the consent of or notice to the Participant.
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(l)
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NO REPRESENTATIONS OR COVENANTS WITH RESPECT TO TAX QUALIFICATION. Although the Company may endeavor to (i) qualify an Award for favorable U.S. or foreign tax treatment (e.g., incentive stock
options under Section 422 of the Code) or (ii) avoid adverse tax treatment (e.g., under Section 409A of the Code), the Company makes no representation to that effect and expressly disavows any covenant to maintain favorable or avoid
unfavorable tax treatment. The Company shall be unconstrained in its corporate activities without regard to the potential negative tax impact on holders of Awards under the Plan.
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SYNCHRONY FINANCIAL 2014 LONG-TERM INCENTIVE
PLAN, AS AMENDED
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(m)
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AWARDS TO
NON-U.S.
EMPLOYEES. The Committee shall have the power and authority to determine which Affiliates shall be covered by this Plan and which
employees outside the U.S. shall be eligible to participate in the Plan. The Committee may adopt, amend or rescind rules, procedures or
sub-plans
relating to the operation and administration of the Plan to
accommodate the specific requirements of local laws, procedures, and practices. Without limiting the generality of the foregoing, the Committee is specifically authorized to adopt rules, procedures and
sub-plans
with provisions that limit or modify rights on death, disability or retirement or on termination of employment; available methods of exercise or settlement of an award; payment of income, social
insurance contributions and payroll taxes; the withholding procedures and handling of any stock certificates or other indicia of ownership which vary with local requirements. The Committee may also adopt rules, procedures or
sub-plans
applicable to particular Affiliates or locations.
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(n)
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COMPLIANCE WITH LAWS. The granting of Awards and the issuance of Shares under the Plan shall be subject to all applicable laws, rules, and regulations, and to such approvals by any governmental
agencies or stock exchanges on which the Company is listed as may be required. The Company shall have no obligation to issue or deliver evidence of title for Shares issued under the Plan prior to:
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(i)
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obtaining any approvals from governmental agencies that the Company determines are necessary or advisable; and
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(ii)
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completion of any registration or other qualification of the Shares under any applicable national or foreign law or ruling of any governmental body that the Company determines to be necessary or
advisable or at a time when any such registration or qualification is not current, has been suspended or otherwise has ceased to be effective.
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The inability or impracticability of the Company to obtain or maintain authority from any regulatory body having jurisdiction, which authority is deemed by the Company’s counsel to be necessary to the lawful issuance and sale
of any Shares hereunder shall relieve the Company of any liability in respect of the failure to issue or sell such Shares as to which such requisite authority shall not have been obtained.
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(o)
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AWARDS SUBJECT TO CLAWBACK. The Awards granted under this Plan and any cash payment or Shares delivered pursuant to an Award are subject to forfeiture, recovery by the Company or other action
pursuant to the applicable Award Agreement or any clawback or recoupment policy which the Company may adopt from time to time, including without limitation any such policy which the Company may be required to adopt under the Dodd-Frank Wall Street
Reform and Consumer Protection Act and implementing rules and regulations thereunder, or as otherwise required by law.
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SECTION 9. EFFECTIVE DATE; STOCKHOLDER APPROVAL
The Plan, as amended and restated, shall be submitted to the stockholders of the Company for approval at the Company’s 2017 annual meeting of
stockholders and, if so approved, the Plan, as amended and restated, shall become effective as of the date of such approval. In the event that this Plan is not approved by the stockholders of the Company, this Plan, as amended and restated, shall be
void and of no force or effect.
SECTION 10. TERM OF THE PLAN
No Award shall be granted under the Plan on or after the date that is ten years from the date of the adoption of the Plan. However, unless
otherwise expressly provided in the Plan or in an applicable Award Agreement, any Award theretofore granted may extend beyond such date, and the authority of the Committee to amend, alter, adjust, suspend, discontinue, or terminate any such Award,
or to waive any conditions or rights under any such Award, and the authority of the Board of Directors of the Company to amend the Plan, shall extend beyond such date.
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SYNCHRONY FINANCIAL
777 LONG RIDGE ROAD
STAMFORD, CT 06902
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VOTE BY INTERNET
Before
The Meeting
- Go to
www.proxyvote.com
or scan the QR Barcode above
Use the Internet to transmit your voting instructions and for electronic delivery of information up until 11:59 P.M. Eastern Time the day before meeting
date. Have your proxy card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form.
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During The Meeting
- Go to
www.virtualshareholdermeeting.com/SYF2017
You may attend the Meeting via the internet and vote during the Meeting. Have the
information that is printed in the box marked by the arrow available and follow the instructions.
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VOTE BY PHONE - 1-800-690-6903
Use any touch-tone telephone to transmit your voting instructions up until 11:59 P.M. Eastern Time the day before the meeting date. Have your proxy
card in hand when you call and then follow the instructions.
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VOTE BY MAIL
Mark, sign
and date your proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717.
If you vote your proxy by internet or telephone, you do NOT need to
mail back your proxy card. To vote by mail, mark, sign and date your proxy card and return it in the enclosed postage-paid envelope.
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TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS:
E23463-P90076
KEEP THIS PORTION FOR YOUR RECORDS
— — — — — — — — — — — —
— — — — — — — — — — — — — — — — — — — —
— — — — — — — — — — —
DETACH AND RETURN THIS PORTION ONLY
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.
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SYNCHRONY FINANCIAL
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The Board of Directors recommends a vote FOR all nominees and FOR Items 2, 3 and 4.
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1.
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Election of Directors
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Nominees:
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For
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Against
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Abstain
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1a. Margaret M. Keane
1b. Paget L. Alves
1c. Arthur W. Coviello, Jr.
1d. William W. Graylin
1e. Roy A. Guthrie
1f. Richard C. Hartnack
1g. Jeffrey G. Naylor
1h. Laurel J. Richie
1i. Olympia J. Snowe
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☐
☐
☐
☐
☐
☐
☐
☐
☐
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☐
☐
☐
☐
☐
☐
☐
☐
☐
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☐
☐
☐
☐
☐
☐
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☐
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2. Advisory Vote to Approve Named Executive Officer Compensation
3. Approve the Adoption of the Amendment to the Synchrony Financial 2014
Long-Term Incentive Plan and Re-Approval of Performance Measures
4. Ratification of Selection of KPMG LLP as Independent Registered Public
Accounting Firm of the Company for 2017
NOTE:
Any other
matters that may properly come before the meeting or any adjournments or postponements of the meeting.
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For
☐
☐
☐
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Against
☐
☐
☐
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Abstain
☐
☐
☐
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For address changes and/or comments, please check
this box and write them on the back where indicated.
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☐
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Please sign exactly as your name(s) appear(s)
hereon. When signing as attorney, executor, administrator, or other fiduciary, please give full title as such. Joint owners should each sign personally. All holders must sign. If a corporation or partnership, please sign in full corporate or
partnership name by authorized officer.
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All shares will be voted as instructed above. In the
absence of instructions, all shares will be voted with respect to registered stockholders that return a signed proxy card, FOR all nominees listed in Item 1, FOR Item 2, FOR Item 3, and FOR Item 4.
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Signature [PLEASE SIGN WITHIN BOX]
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Date
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Signature (Joint Owners)
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Date
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V.1.1
SYNCHRONY FINANCIAL
2017 ANNUAL MEETING OF STOCKHOLDERS
MAY 18,
2017
11:00 A.M., EASTERN TIME
www.virtualshareholdermeeting.com/SYF2017
WE ENCOURAGE YOU TO TAKE ADVANTAGE OF INTERNET OR TELEPHONE VOTING.
BOTH ARE AVAILABLE 24 HOURS A DAY, 7 DAYS A WEEK.
Internet and telephone voting is available through 11:59 P.M. Eastern Time on May 17, 2017.
Your internet or telephone vote authorizes the named proxies to vote the shares in the same
manner as if you marked, signed and returned your proxy card.
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting:
The Notice and Proxy Statement and Annual Report are available at www.proxyvote.com.
— — — — — — — — — — — —
— — — — — — — — — — — — — — — — — — — —
— — — — — — — — — — —
E23464-P90076
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PROXY
FOR ANNUAL MEETING OF
STOCKHOLDERS
SYNCHRONY FINANCIAL
SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned appoints Margaret M. Keane, Brian D. Doubles and Jonathan S. Mothner, and each of them, as proxies, each with full
power of substitution, and authorizes them to represent and to vote, as designated on the reverse side of this form, all shares of common stock of Synchrony Financial held of record by the undersigned as of March 23, 2017, at the 2017 Annual
Meeting of Stockholders to be held on May 18, 2017, beginning at 11:00 a.m., Eastern Time, at www.virtualshareholdermeeting.com/SYF2017, and in their discretion, upon any matter that may properly come before the meeting or any adjournment of
the meeting, in accordance with their best judgment.
If no other indication is made on the reverse side of this form, the proxies shall vote FOR all nominees listed in Item 1,
FOR Item 2, FOR Item 3, and FOR Item 4.
This proxy may be revoked at any time prior to the time voting is declared closed by giving the Corporate Secretary of Synchrony
Financial written notice of revocation or a subsequently dated proxy, or by casting a ballot at the meeting.
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Address Changes/Comments:
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(If you noted any Address Changes/Comments above, please mark corresponding box on the reverse side.)
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Continued and to be signed on reverse side
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V.1.1
Synchrony Financiall (NYSE:SYF)
Historical Stock Chart
From Mar 2024 to Apr 2024
Synchrony Financiall (NYSE:SYF)
Historical Stock Chart
From Apr 2023 to Apr 2024
