8-KMaterial Agreements

Fidelity National Information Services, Inc. 8-K Report, Material Agreement (May 18, 2007)

Filed May 18, 2007For Securities:FIS

Summary

Fidelity National Information Services, Inc. (FIS) announced on May 18, 2007, through an 8-K filing, the grant of stock options by its minority-owned subsidiary, FNRES Holdings, Inc. (FNRES), to several of its executive officers. These options are for the purchase of FNRES common stock and were granted under the FNRES Holdings, Inc. 2007 Stock Incentive Plan. The primary purpose of these grants is to incentivize and reward executives for services provided to FNRES. The filing details the number of shares subject to option for key executives, including William P. Foley, II, Brent B. Bickett, Alan L. Stinson, and Lee A. Kennedy. The terms of these stock options are significant for investors as they outline specific vesting conditions tied to future liquidity events for FNRES. Vesting is contingent upon the earliest of a Change in Control of FNRES or an Initial Public Offering (IPO), provided that the "Equity Value" per share reaches at least $20.00. The "Equity Value" is defined differently for each scenario, focusing on net proceeds in a Change in Control and average trading price post-IPO. This structure suggests a strategic alignment of executive compensation with the successful future valuation and potential exit events of the FNRES subsidiary.

Key Highlights

  • 1FNRES Holdings, Inc. (FNRES), a subsidiary of FIS, granted stock options to its executive officers on May 14, 2007.
  • 2Key executives receiving options include William P. Foley, II (400,000 shares), Brent B. Bickett (80,000 shares), Alan L. Stinson (80,000 shares), and Lee A. Kennedy (40,000 shares).
  • 3The options have an exercise price of $10.00 per share and a term of eight years.
  • 4Vesting of the options is contingent upon the earliest of a Change in Control or an Initial Public Offering (IPO) of FNRES.
  • 5A critical vesting condition is that the "Equity Value" of a share of FNRES Common Stock must reach at least $20.00 (subject to adjustments) at the time of these events.
  • 6The "Equity Value" is calculated based on net proceeds per share in a Change in Control transaction or the average trading price over a 45-day period following an IPO.
  • 7The filing also outlines provisions for the assumption or termination of unvested options if the acquirer in a Change in Control does not agree to continue them.

Frequently Asked Questions

FNRES Holdings, Inc. (FNRES) is a minority-owned subsidiary of Fidelity National Information Services, Inc. (FIS). The stock options discussed in this filing were granted by FNRES to its executives for services rendered to FNRES.

The stock options will vest upon the earliest of a Change in Control of FNRES or an Initial Public Offering (IPO) of FNRES, provided that the Equity Value per share of FNRES common stock reaches at least $20.00 at that time. The executive must also still be providing service to FNRES on the vesting date.

In the event of a Change in Control, "Equity Value" is the per-share net proceeds (cash or readily marketable securities, plus discounted expected value of deferred consideration) received by FNRES stockholders. For an IPO, "Equity Value" is measured by the average stock price over a consecutive 45-day trading period after the IPO.

If FNRES undergoes a Change in Control and the acquirer (or the surviving/continuing company) does not agree to assume or continue the unvested options on substantially the same terms, then such options will terminate.