8-KLeadership ChangesExhibits & Filings

Fidelity National Information Services, Inc. 8-K Report, Executive Changes (Dec 3, 2009)

Filed December 3, 2009For Securities:FIS

Summary

Fidelity National Information Services, Inc. (FIS) filed an 8-K on December 3, 2009, to disclose amendments to the employment agreements of two key executives, Frank R. Martire and Michael D. Hayford. The primary change is the elimination of the company's obligation to provide gross-up payments for federal excise taxes related to any potential change in control after December 1, 2009. This amendment shifts the responsibility for these excise taxes to the executives, who can elect to reduce their change-in-control payments to avoid the tax or bear the tax themselves. This modification to executive compensation arrangements is important for investors as it alters the financial implications of a change-in-control event for both the company and its top management. It suggests a move towards greater cost control for FIS in potential future transactions, while also requiring executives to manage their tax liabilities in such scenarios.

Key Highlights

  • 1Amendments to employment agreements for executives Frank R. Martire and Michael D. Hayford.
  • 2Elimination of company-provided gross-up payments for Section 280G federal excise taxes on change-in-control payments, effective December 1, 2009.
  • 3Executives will now be responsible for any federal excise taxes incurred on change-in-control payments.
  • 4Executives have the option to reduce their change-in-control payments to avoid the excise tax.
  • 5If executives do not elect to reduce payments, they will be personally liable for the excise tax.
  • 6The amendments aim to reduce potential financial liabilities for the company in the event of a change in control.
  • 7This filing is accompanied by Exhibits 10.1 and 10.2 detailing the specific amendments.

Frequently Asked Questions

The primary change is the removal of the company's obligation to pay any federal excise taxes (known as 'gross-up' payments) that executives might incur under Section 280G of the Internal Revenue Code if a change in control of FIS occurs after December 1, 2009.

The responsibility for these excise taxes has shifted from the company to the executives, Frank R. Martire and Michael D. Hayford. They will be personally responsible for paying these taxes if a change in control occurs and triggers them.

Yes, the executives have the option to elect to reduce their change-in-control payments to a level that avoids triggering the federal excise tax. If they choose not to make this election, they will be responsible for paying the tax on the full amount.

These amendments likely aim to mitigate potential financial risks and costs for Fidelity National Information Services, Inc. in the event of a future change in control, by eliminating the company's obligation to cover these specific executive tax liabilities.