UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A

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FIDELITY NATIONAL INFORMATION SERVICES, INC.

(Name of Registrant as Specified In Its Charter)

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

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Fidelity National Information Services, Inc.

601 Riverside Avenue

Jacksonville, Florida 32204

 

April 15, 2009

 

Dear Shareholder:

 

On behalf of the Board of Directors, I cordially invite you to attend the annual meeting of shareholders of Fidelity National Information Services, Inc. The meeting will be held on May 28, 2009 at 11:30 A.M., Eastern Daylight Time, in the Peninsular Auditorium at 601 Riverside Avenue, Jacksonville, Florida 32204. The formal Notice of Annual Meeting and Proxy Statement for this meeting are attached to this letter.

 

The Notice of Annual Meeting and Proxy Statement contain more information about the annual meeting, including:

 

 

Whether or not you plan to attend the annual meeting, please vote by one of these outlined methods to ensure that your shares are represented and voted in accordance with your wishes. This will help us avoid the expense of sending follow-up letters to ensure that a quorum is represented at the annual meeting, and will assure that your vote is counted if you are unable to attend.

 

On behalf of the Board of Directors, I thank you for your cooperation.

 

Sincerely,

 

Lee A. Kennedy

President and Chief Executive Officer

Fidelity National Information Services, Inc.

601 Riverside Avenue

Jacksonville, Florida 32204

 

 

 

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS

 

 

 

 

To the Shareholders of Fidelity National Information Services, Inc.:

 

Notice is hereby given that the 2009 Annual Meeting of Shareholders of Fidelity National Information Services, Inc. will be held on May 28, 2009 at 11:30 A.M., Eastern Daylight Time, in the Peninsular Auditorium at 601 Riverside Avenue, Jacksonville, Florida 32204 for the following purposes:

 

1. to elect (i) three Class I directors to serve until the 2012 annual meeting of shareholders or until their successors are duly elected and qualified or until their earlier death, resignation or removal and (ii) one Class III director to serve until the 2011 annual meeting of shareholders or until his successor is duly elected and qualified or until his earlier death, resignation or removal;

 

2. to ratify the appointment of KPMG LLP as our independent registered public accounting firm for the 2009 fiscal year; and

 

3. to transact such other business as may properly come before the meeting or any adjournment thereof.

 

The Board of Directors set March 30, 2009 as the record date for the meeting. This means that owners of Fidelity National Information Services, Inc. common stock at the close of business on that date are entitled to:

 

 

All shareholders are cordially invited to attend the meeting in person. However, even if you plan to attend the annual meeting in person, please read these proxy materials and cast your vote on the matters that will be presented at the meeting. You may vote your shares through the Internet, by telephone, or by mailing the enclosed proxy card. Instructions for our registered shareholders are described under the question “How do I vote?” on page 2 of the proxy statement.

 

Sincerely,

 

Ronald D. Cook

Corporate Secretary

 

Jacksonville, Florida

April 15, 2009

 

 

 

 

TABLE OF CONTENTS

 

Fidelity National Information Services, Inc.

601 Riverside Avenue

Jacksonville, Florida 32204

 

 

 

 

PROXY STATEMENT

 

 

 

 

The enclosed proxy is solicited by the Board of Directors (the “Board”) of Fidelity National Information Services, Inc. (the “Company” or “FIS”) for use at the Annual Meeting of Shareholders to be held on May 28, 2009 at 11:30 A.M., Eastern Daylight Time, or at any adjournment thereof, for the purposes set forth herein and in the accompanying Notice of Annual Meeting of Shareholders. The meeting will be held in the Peninsular Auditorium at 601 Riverside Avenue, Jacksonville, Florida.

 

It is anticipated that such proxy, together with this proxy statement, will be first mailed on or about April 15, 2009 to all shareholders entitled to vote at the meeting.

 

The Company’s principal executive offices are located at 601 Riverside Avenue, Jacksonville, Florida 32204, and its telephone number at that address is (904) 854-5000.

 

Unless stated otherwise or the context otherwise requires, all references to “FIS,” “we,” the “Company” or the “registrant” are to Fidelity National Information Services, Inc., a Georgia corporation formerly known as Certegy Inc. (“Certegy”), which was the surviving legal entity in the merger between Certegy and Former FIS (the “Certegy Merger”); all references to “Former FIS” are to Fidelity National Information Services, Inc., a Delaware corporation, and its subsidiaries, prior to the Certegy Merger; all references to “Old FNF” are to Fidelity National Financial, Inc., a Delaware corporation that owned a majority of the Company’s shares through November 9, 2006 and in November 2006, merged with and into FIS (the “FNF Merger”); all references to “FNF” are to Fidelity National Financial, Inc. (formerly known as Fidelity National Title Group, Inc.), formerly a subsidiary of Old FNF but now an independent company that remains a related entity from an accounting perspective; and all references to “LPS” are to Lender Processing Services, Inc., a former wholly owned subsidiary of FIS, which was spun-off as a separate publicly traded company on July 2, 2008.

 

Your shares can be voted at the annual meeting only if you vote by proxy or if you are present and vote in person. Even if you expect to attend the annual meeting, please vote by proxy to assure that your shares will be represented.

 

Who is entitled to vote?

 

All record holders of FIS common stock as of the close of business on March 30, 2009 are entitled to vote. On that day, 191,158,430 shares were issued and outstanding and eligible to vote. Each share is entitled to one vote on each matter presented at the annual meeting.

 

What shares are covered by the proxy card?

 

The proxy card covers all shares held by you of record (i.e., shares registered in your name), and any shares held for your benefit in FIS’s 401(k) plan and Employee Stock Purchase Plan.

 

What if I am a beneficial holder rather than an owner of record?

 

If you hold your shares through a broker, bank, or other nominee, you will receive separate instructions from the nominee describing how to vote your shares.

How do I vote?

 

There are three ways to vote by proxy, other than by attending the annual meeting and voting in person:

 

 

What does it mean to vote by proxy?

 

It means that you give someone else the right to vote your shares in accordance with your instructions. In this case, we are asking you to give your proxy to our Executive Chairman and our President and Chief Executive Officer, who are sometimes referred to as the “proxy holders.” By giving your proxy to the proxy holders, you assure that your vote will be counted even if you are unable to attend the annual meeting. If you give your proxy but do not include specific instructions on how to vote on a particular proposal described in this proxy statement, the proxy holders will vote your shares in accordance with the recommendation of the Board for such proposal.

 

On what am I voting?

 

You will be asked to consider two proposals at the annual meeting.

 

 

What happens if other matters are raised at the meeting?

 

Although we are not aware of any matters to be presented at the annual meeting other than those contained in the Notice of Annual Meeting, if other matters are properly raised at the meeting in accordance with the procedures specified in FIS’s articles of incorporation and bylaws, all proxies given to the proxy holders will be voted in accordance with their best judgment.

 

What if I submit a proxy and later change my mind?

 

If you have submitted your proxy and later wish to revoke it, you may do so by doing one of the following: (i) giving written notice to the Corporate Secretary; (ii) timely submitting another proxy bearing a later date (in any of the permitted forms); or (iii) casting a ballot in person at the annual meeting.

 

Who will count the votes?

 

Broadridge Investor Communications Services will serve as proxy tabulator and count the votes, and the results will be certified by the inspector of election.

 

How many votes must each proposal receive to be adopted?

 

The following votes must be received:

 

 

What constitutes a quorum?

 

A quorum is present if a majority of the outstanding shares of common stock entitled to vote is represented either in person or by proxy. Broker non-votes and abstentions are counted for purposes of determining whether a quorum is present.

 

What are broker non-votes?

 

Broker non-votes occur when nominees, such as banks and brokers holding shares on behalf of beneficial owners, do not receive voting instructions from the beneficial holders at least ten days before the meeting. If that happens, the nominees may vote those shares only on matters deemed “routine” by the NYSE, such as election of directors or ratification of auditors. Nominees cannot vote on non-routine matters, unless they receive voting instructions from beneficial holders, resulting in so-called “broker non-votes.”

 

What effect does an abstention have?

 

With respect to Proposal No. 1, abstentions or directions to withhold authority will not be included in vote totals and will not affect the outcome of the vote. With respect to Proposal No. 2, for purposes of the Georgia law requirement that the number of shares present or represented by proxy and entitled to vote approving Proposal No. 2 exceed the number of shares present or represented by proxy and entitled to vote opposing it, abstentions will have no effect.

 

Who pays the cost of soliciting proxies?

 

We pay the cost of the solicitation of proxies, including preparing and mailing the Notice of Annual Meeting of Shareholders, this proxy statement and the proxy card. Following the mailing of this proxy statement, directors, officers and employees of the Company may solicit proxies by telephone, facsimile transmission or other personal contact. Such persons will receive no additional compensation for such services. Brokerage houses and other nominees, fiduciaries and custodians who are holders of record of shares of common stock will be requested to forward proxy soliciting material to the beneficial owners of such shares and will be reimbursed by the Company for their charges and expenses in connection therewith at customary and reasonable rates. In addition, the Company has retained Georgeson Inc. to assist in the solicitation of proxies for an estimated fee of $10,000, plus reimbursement of expenses.

 

What if I share a household with another shareholder?

 

We have adopted a procedure approved by the Securities and Exchange Commission (the “SEC”) called “householding.” Under this procedure, shareholders of record who have the same address and last name and do not participate in electronic delivery of proxy materials will receive only one copy of our Annual Report and Proxy Statement unless one or more of these shareholders notifies us that they wish to continue receiving individual copies. This procedure will reduce our printing costs and postage fees. Shareholders who participate in householding will continue to receive separate proxy cards. Also, householding will not in any way affect dividend check mailings. If you are eligible for householding, but you and other shareholders of record with whom you share an address currently receive multiple copies of our Annual Reports and/or Proxy Statements, or if you hold stock in more than one account, and in either case you wish to receive only a single copy of the Annual Report or Proxy Statement for your household, please contact our transfer agent, Computershare Investor Services, LLC (in writing: P.O. Box 43078, Providence, Rhode Island 02940-3078; by telephone: (800) 568-3476). If you participate in householding and wish to receive a separate copy of the 2008 Annual Report or this Proxy Statement, or if you do not wish to participate in householding and prefer to receive separate copies of future Annual Reports and/or Proxy Statements, please contact Computershare Investor Services, LLC as indicated above. Beneficial shareholders can request information about householding from their banks, brokers or other holders of record. The Company hereby undertakes to deliver promptly upon written or oral request, a separate copy of the annual report to shareholders, or proxy statement, as applicable, to a Company shareholder at a shared address to which a single copy of the document was delivered.

 

Information About the Nominees for Election

 

The names of the nominees for election as directors of the Company and certain biographical information concerning each of them is set forth below:

 

 

 

 

William P. Foley, II.  William P. Foley, II has served as a director of FIS since February 2006 and is the Executive Chairman of the Board. Mr. Foley has also served as the executive Chairman of the Board of FNF since October 2005. Mr. Foley served as the executive Chairman of the Board of Lender Processing Services, Inc. from May 2008 until March 2009. Mr. Foley served as Chief Executive Officer of FNF from October 2006 until May 2007. Mr. Foley served as Chairman of the Board and Chief Executive Officer of Old FNF from that company’s formation in 1984 until the FNF Merger.

 

Thomas M. Hagerty.  Thomas M. Hagerty has served as a director of FIS since February 2006. Mr. Hagerty has served as a director of FNF since October 2006. Mr. Hagerty is a Managing Director of Thomas H. Lee Partners, L.P. Mr. Hagerty has been employed by Thomas H. Lee Partners, L.P. and its predecessor, Thomas H. Lee Company, since 1988. Mr. Hagerty also serves as a director of MGIC Investment Corporation and several private companies.

 

Keith W. Hughes.  Keith W. Hughes has served as a director of FIS since August 2002. Since April 2001, Mr. Hughes has been a self-employed consultant to domestic and international financial services institutions. From November 2000 to April 2001, he served as Vice Chairman of Citigroup Inc. Mr. Hughes was named to that position in 2000 when Citigroup acquired Associates First Capital Corporation, a leading finance company, where he had served as Chairman and Chief Executive Officer since February 1995. Mr. Hughes also serves as a director of Texas Industries Inc. and Pilgrim’s Pride.

 

Richard N. Massey.  Richard N. Massey has served as a director of FIS since November 2006. Mr. Massey has served as a director of FNF since October 2006. Mr. Massey is currently a founding partner of West Rock Capital, LLC, a private investment firm, and has been since January 2009. Mr. Massey previously served as the Executive Vice President and General Counsel of Alltel Corporation from January 2006 until January 2009. From 2000 until 2006, Mr. Massey served as Managing Director of Stephens Inc., a private investment bank, during which time his financial advisory practice focused on software and information technology companies.

Information About Our Directors Continuing in Office

 

Term Expiring in 2010

 

 

 

 

Lee A. Kennedy.  Lee A. Kennedy has served as a director and as President and Chief Executive Officer of FIS since March 5, 2001. Mr. Kennedy has also served as a director of Lender Processing Services, Inc. since May 2008 and as Chairman since March 2009. Prior to the Certegy Merger, he also served as the Chairman of Certegy from February 2002 until February 2006, and as the President of Certegy from March 2001 until May 2004. Prior to that, he served as President, Chief Operating Officer and director of Equifax Inc. from June 1999 until June 29, 2001.

 

Term Expiring in 2011

 

 

 

 

David K. Hunt.  David K. Hunt has served as a director of FIS since June 2001. Since December 2005, Mr. Hunt has been a private investor. He previously served as the non-executive Chairman of the Board of OnVantage, Inc. from October 2004 until December 2005. Prior to that, he served as the Chairman and Chief Executive Officer of PlanSoft Corporation, an internet-based business-to-business solutions provider in the meeting and convention industry, a position he held from May 1999 to October 2004.

 

The bylaws of the Company provide that our Board shall consist of at least five and no more than fifteen directors. Our directors are divided into three classes, each class as nearly equal in number as possible. The Board determines the number of directors within these limits. The term of office of only one class of directors expires in each year. All three classes serve for three year terms. The directors elected at this annual meeting will hold office for the three year term or until their successors are elected and qualified, other than Mr. Massey, who will hold office for a two year term or until his successor is elected and qualified. The current number of directors is seven, but will be reduced to six following this annual meeting due to Robert M. Clements’s decision not to stand for re-election to the Board due to time constraints. Mr. Clements will continue to serve as a director until the annual meeting.

 

In addition, on April 1, 2009, the Company announced that it had entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Metavante Technologies, Inc. (“Metavante”), pursuant to which the Company would acquire Metavante. Following the closing of this transaction, the Board will expand the number of directors to nine, and will appoint three directors designated by Metavante pursuant to the Merger Agreement. New directorships will be allocated at that time among the classes in a manner designed to make the classes as equal as possible. In accordance with Georgia law, any newly appointed director that does not fill an existing vacancy on the Board will stand for election to the Board at the 2010 annual meeting of shareholders. In anticipation of these events, the Board decided to redesignate (i) Richard N. Massey from his existing class of directors with a term expiring at the annual meeting of shareholders in 2010 to the class of directors with a term expiring at the annual meeting of shareholders in 2011, and (ii) Keith W. Hughes from his existing class of directors with a term expiring at

the annual meeting of shareholders in 2010 to the class of directors with a term expiring at the annual meeting of shareholders in 2012. In the event the transaction fails to close or is terminated, the Board will reallocate the directors in each class as nearly equal as possible in connection with the 2010 annual meeting.

 

In connection with the Merger Agreement, on March 31, 2009, we entered into an Investment Agreement (the “Investment Agreement”) with FNF and affiliates of Thomas H. Lee Partners, L.P. (“THL” and together with FNF, the “Investors”) pursuant to which the Investors have agreed to invest a total of $249,999,993.50 in us in connection with the proposed merger between us and Metavante. Under the Investment Agreement, THL will be entitled to nominate one member of our expanded nine member board as long as it continues to own shares equal to at least 35% of the number it purchases under the Investment Agreement. It is currently intended that Thomas M. Hagerty will serve as THL’s nominee.

 

At this annual meeting, the following persons, each of whom is a current director of the Company, have been nominated to stand for election to the Board for a three-year term expiring in 2012:

 

William P. Foley, II
Thomas M. Hagerty
Keith W. Hughes

 

At this annual meeting, the following person, who is a current director of the Company, has been nominated to stand for election to the Board for a two-year term expiring in 2011:

 

Richard N. Massey

 

The Board believes that each of the nominees will stand for election and will serve if elected as a director.

 

THE BOARD RECOMMENDS THAT THE SHAREHOLDERS VOTE “FOR” EACH OF THE LISTED NOMINEES.

 

General Information About KPMG LLP

 

Although shareholder ratification of the appointment of our independent registered public accounting firm is not required by our bylaws or otherwise, we are submitting the selection of KPMG LLP (“KPMG”) to our shareholders for ratification as a matter of good corporate governance practice. Even if the selection is ratified, the audit committee in its discretion may select a different independent registered public accounting firm at any time if it determines that such a change would be in the best interests of us and our shareholders. If our shareholders do not ratify the audit committee’s selection, the audit committee will take that fact into consideration, together with such other factors it deems relevant, in determining its next selection of independent registered public accounting firm.

 

In choosing our independent registered public accounting firm, our audit committee conducts a comprehensive review of the qualifications of those individuals who will lead and serve on the engagement team, the quality control procedures the firm has established, and any issue raised by the most recent quality control review of the firm. The review also includes matters required to be considered under the SEC rules on “Auditor Independence,” including the nature and extent of non-audit services to ensure that they will not impair the independence of the accountants.

 

Representatives of KPMG are expected to be present at the annual meeting. These representatives will have an opportunity to make a statement if they so desire and will be available to respond to appropriate questions.

Principal Accounting Fees and Services

 

The Audit Committee has engaged KPMG to audit the consolidated financial statements of the Company for the 2009 fiscal year. For services rendered to us during or in connection with our fiscal years ended December 31, 2008 and 2007, we were billed the following fees by KPMG:

 

 

Audit Fees.  Audit fees consisted principally of fees for the audits, registration statements and other filings related to the Company’s 2008 and 2007 financial statements, and audits of the Company’s subsidiaries required for regulatory reporting purposes, including billings for out-of-pocket expenses incurred. The 2008 audit fees include approximately $2.6 million of fees related to the LPS spin-off.

 

Audit-Related Fees.  Audit-related fees in 2008 and 2007 consisted principally of fees for Statement on Accounting Standards No. 70 audits and audits of employee benefit plans including billings for out-of-pocket expenses incurred.

 

Tax Fees.  Tax fees for 2008 and 2007 consisted principally of fees for tax compliance, tax planning and tax advice.

 

All Other Fees.  All other fees for 2007 consisted principally of fees for identity theft/privacy enablement services and information technology risk assessment services.

 

Approval of Accountants’ Services

 

In accordance with the requirements of the Sarbanes-Oxley Act of 2002, all audit and audit-related work and all non-audit work performed by KPMG is approved in advance by the audit committee, including the proposed fees for such work. Our pre-approval policy provides that, unless a type of service to be provided by KPMG has been generally pre-approved by the audit committee, it will require specific pre-approval by the audit committee. In addition, any proposed services exceeding pre-approved maximum fee amounts also require pre-approval by the audit committee. Our pre-approval policy provides that specific pre-approval authority is delegated to our audit committee chairman, provided that the estimated fee for the proposed service does not exceed a pre-approved maximum amount set by the committee. Our audit committee chairman must report any pre-approval decisions to the audit committee at its next scheduled meeting.

 

THE BOARD RECOMMENDS THAT THE SHAREHOLDERS VOTE “FOR” THE RATIFICATION OF KPMG LLP AS THE COMPANY’S INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR THE 2009 FISCAL YEAR.

 

The number of our common shares beneficially owned by each individual or group is based upon information in documents filed by such person with the SEC, other publicly available information or information available to us. Percentage ownership in the following table is based on 191,158,430 shares of FIS common stock outstanding as of March 30, 2009. Unless otherwise indicated, each of the shareholders has sole voting and investment power with respect to the shares of common stock beneficially owned by that shareholder. The number of shares beneficially owned by each shareholder is determined under rules issued by the SEC.

 

Security Ownership of Certain Beneficial Owners

 

The following table sets forth information regarding beneficial ownership of our common stock by each shareholder who is known by the Company to beneficially own 5% or more of our common stock:

 

 

 

 

Security Ownership of Management and Directors

 

The following table sets forth information regarding beneficial ownership of our common stock by:

 

 

The information is not necessarily indicative of beneficial ownership for any other purpose. The mailing address of each director and executive officer shown in the table below is c/o Fidelity National Information Services, Inc., 601 Riverside Avenue, Jacksonville, Florida 32204.

 

 

 

 

Securities Authorized for Issuance Under Equity Compensation Plans

 

The following table provides information as of December 31, 2008, about our common stock that may be issued under our equity compensation plans:

 

 

 

 

The executive officers of the Company as of the date of this Proxy Statement are set forth in the table below. Certain biographical information with respect to those executive officers who do not also serve as directors follows the table. There are no family relationships among the executive officers, directors or nominees for director.

 

 

George P. Scanlon has served as Executive Vice President and Chief Financial Officer of FIS since July 2008. Mr. Scanlon joined FIS in February 2008 as Executive Vice President, Finance. Mr. Scanlon previously served as Executive Vice President and Chief Financial Officer of Woodbridge Holdings Corporation (formerly known as Levitt Corporation) since August 2004 and Executive Vice President and Chief Financial Officer of BFC Financial Corporation since April 2007. Prior to joining Levitt, Mr. Scanlon was the Chief Financial Officer of Datacore Software Corporation, an independent software vendor, from December 2001 to August 2004. Prior to joining Datacore, Mr. Scanlon was the Chief Financial Officer at Seisint, Inc., a technology company specializing in providing data search and processing products, from November 2000 to September 2001.

 

Gary A. Norcross has served as President and Chief Operating Officer, Transaction Processing Services of FIS since November 2007. Prior to that, he served as Executive Vice President, Integrated Financial Solutions of FIS since February 2006. Prior to that, he held the position of President of Integrated Financial Solutions of Former FIS since June 1996. He served Former FIS in various capacities since May 1988.

 

Francis R. Sanchez has served as President, Strategic Solutions of FIS since November 2007. Prior to that, he served as Executive Vice President, Enterprise Banking Solutions of FIS since February 2006. Prior to that, since April 2004, he served as an Executive Vice President of Former FIS and President of the Leveraged Product Development division. Prior to joining Former FIS, Mr. Sanchez served in many positions at Sanchez Computer Associates, Inc. since 1980, including as Chief Executive Officer. Sanchez Computer Associates, Inc., a Nasdaq listed international bank technology company that specialized in real-time banking systems for the global market, enterprise customer integration systems and complete internet banking outsourcing, was acquired by Former FIS in April 2004.

 

Brent B. Bickett has served as Executive Vice President, Strategic Planning of FIS since February 2006. Mr. Bickett joined Old FNF in January 1999, where he held the position of Executive Vice President, Corporate Finance and was responsible for mergers and acquisitions and business development efforts. Prior to joining Old FNF, Mr. Bickett was a member of the Investment Banking Division of Bear, Stearns and Co. Inc. from August 1990 until January 1999. Mr. Bickett also serves as Executive Vice President, Corporate Finance of FNF.

 

Ronald D. Cook has served as Executive Vice President, General Counsel and Corporate Secretary of FIS since July 2008 and served as Senior Vice President and General Counsel since May 2006. Prior to joining FIS, Mr. Cook worked as a private lawyer in Tampa, Florida from February 2006 until May 2006. Prior to that, Mr. Cook served as Certegy’s Senior Vice President and Associate General Counsel from September 2002 through February 2006. Prior to that, Mr. Cook founded and managed a private law firm in Tampa, Florida from August 1998 through September

2003. He was Assistant Vice President and Associate Group Counsel for Equifax Inc. from May 1993 until August 1998. Prior to that, Mr. Cook worked at multiple law firms following his graduation from law school in May 1987.

 

Michael P. Oates has served as Executive Vice President, Human Resources of FIS since February 2008, and oversees all personnel and employee benefit programs as well as employment-related legal matters. Prior to that, he held the position of Senior Vice President, Human Resources of FIS since September 2007. Prior to joining FIS, Mr. Oates had served as Vice President of Human Resources for Florida Rock Industries, Inc. since September 2004. Mr. Oates served as Director of Labor Relations for CSX Corp. from August 2003 to September 2004. Prior to joining CSX, Mr. Oates was a partner with Hunton & Williams L.L.P., where he had been for more than 13 years.

 

James W. Woodall has served as Senior Vice President, Chief Accounting Officer and Controller of FIS since July 2008. Mr. Woodall previously served as Vice President, Finance of Eclipsys since 2007. Prior to Eclipsys, Mr. Woodall was the Executive Director — Assistant Controller of Bellsouth Corporation from 2005 to 2007, Director of Customer Markets Finance of Bellsouth from 2004 to 2005, and Director of Technical Accounting of Bellsouth from 2001 to 2004. Prior to joining Bellsouth, Mr. Woodall was a senior manager with PricewaterhouseCoopers LLP since 1992.

 

Michael L. Gravelle has served as Executive Vice President, Legal of FIS since June 2006 and served as Senior Vice President and General Counsel of FIS from February 2006 until May 2006. Prior to that, since 2003, he served as Senior Vice President of Old FNF and as Senior Vice President, General Counsel and Secretary of Former FIS. Mr. Gravelle joined Former FIS from Alltel Information Services, Inc., which he joined in 1993 and where he had served as Senior Vice President, General Counsel and Secretary since 2000. Mr. Gravelle also serves as Executive Vice President, Legal of FNF.

 

Compensation Discussion and Analysis

 

The following compensation discussion and analysis may contain statements regarding corporate performance targets and goals. These targets and goals are disclosed in the limited context of our compensation programs and should not be understood to be statements of management’s expectations or estimates of results or other guidance. We specifically caution investors not to apply these statements to other contexts.

 

Introduction

 

In this compensation discussion and analysis, we provide an overview of our compensation programs, including the objectives of such programs and the rationale for each element of compensation, for William P. Foley, II, our Executive Chairman; Lee A. Kennedy, our President and Chief Executive Officer; George P. Scanlon, our Executive Vice President and Chief Financial Officer; and Gary A. Norcross and Francis R. Sanchez, who serve as President and Chief Operating Officer, Transaction Processing Services and President, Strategic Solutions, respectively, and were our two other most highly compensated executive officers during 2008. We also discuss the compensation of Jeffrey S. Carbiener, our former Executive Vice President and Chief Financial Officer, who stepped down as an executive officer of the Company in July 2008, following the spin-off of LPS, to become the Chief Executive Officer of LPS (together with Messrs. Foley, Kennedy, Scanlon, Norcross and Sanchez, the named executive officers).

 

Objectives of our Compensation Program

 

Our compensation programs are designed to attract and motivate high performing executives with the objective of delivering long-term shareholder value and financial results.

 

We link a significant portion of each named executive officer’s total annual compensation to performance goals that are intended to deliver measurable results. Executives are generally rewarded only when and if the pre-established performance goals are met or exceeded. We also believe that material stock ownership by executives assists in aligning executives’ interests with those of shareholders and strongly motivates executives to build long-term shareholder value. We structure our stock-based compensation programs to assist in creating this link. Finally, we provide our executives with total compensation that we believe is competitive relative to the compensation paid

to similarly situated executives from similarly sized companies, and which is sufficient to motivate, reward and retain those individuals with the leadership abilities and skills necessary for achieving our ultimate objective: the creation of long-term shareholder value.

 

Role of Compensation Committee and Executive Officers in Determining Executive Compensation

 

Our compensation committee is responsible for reviewing, approving and monitoring the compensation programs for our named executive officers, as well as other key executives. Our compensation committee is also responsible for administering our annual incentive plan and stock incentive plan and approving individual grants and awards under those plans. Our President and Chief Executive Officer also plays an important role in determining executive compensation levels, by making recommendations to our compensation committee regarding salary adjustments and incentive awards for his direct reports. Our Executive Chairman may also make recommendations with respect to equity-based incentive compensation awards. Our compensation committee may exercise its discretion in modifying any recommended salary adjustments or incentive awards for our executives. Our Executive Chairman and our President and Chief Executive Officer do not make recommendations to the compensation committee with respect to their own compensation.

 

Establishing Executive Compensation Levels

 

We operate in a highly competitive industry, and compete with our peers and competitors to attract and retain highly skilled executives within that industry. In order to attract talented executives with the leadership abilities and skills necessary for building long-term shareholder value, motivate our executives to perform at a high level, reward outstanding achievement and retain our key executives over the long-term, the compensation committee sets total compensation at levels it determines to be competitive in our market.

 

When determining the overall compensation of our executive officers, including base salaries and annual and long-term incentive amounts, the compensation committee considers a number of factors it deems important. These factors include financial performance, individual performance, and an executive’s experience, knowledge, skills, level of responsibility and expected impact on our future success. The compensation committee also considers corporate governance and regulatory factors related to executive compensation and marketplace compensation practices.

 

When considering marketplace compensation practices, our compensation committee considers data on base salary, annual incentive targets and long-term incentive targets, focusing on levels of compensation from the 50th to the 90th percentiles of market data. These levels of total compensation provide a point of reference for the committee, but the compensation committee ultimately makes compensation decisions based on all of the factors described above.

 

Role of Compensation Consultants

 

To further the objectives of our compensation program, the compensation committee engaged Strategic Compensation Group, an independent compensation consultant, to conduct an annual review of our compensation programs for the named executive officers, as well as for other key executives. Strategic Compensation Group was selected by the compensation committee, reports directly to the committee, receives compensation only for services provided to the committee, and does not provide any other services to us. Strategic Compensation Group provided the compensation committee with relevant market data and alternatives to consider when making compensation decisions for our key executives, including the named executive officers.

 

To assist the compensation committee in determining 2008 compensation levels, Strategic Compensation Group gathered marketplace compensation data on total compensation, which consisted of annual salary, annual incentives, long-term incentives and pay mix. Strategic Compensation Group used two different marketplace data sources: (i) general compensation surveys prepared by Hewitt Associates and Towers Perrin, which together contain data on approximately 700 companies; and (ii) a group of 17 publicly-traded companies. The 17 companies were:

 

 

 

These companies either have comparable annual revenues or compete directly with us in the same general industry and for the same key employees. Information provided by Strategic Compensation Group is one of the tools for evaluating total compensation paid to our executive officers, but many other factors are also considered by our compensation committee.

 

Allocation of Total Compensation for 2008

 

We compensate our executives through a mix of base salary, annual cash incentives and long-term equity. We also maintain standard employee benefit plans for our employees and executive officers. Some executive officers also enjoy very limited perquisites. These benefits are described later. The compensation committee generally allocates executive officers’ compensation after first determining an appropriate ratio of performance-based compensation to other forms of regularly-paid compensation. In making this determination, the compensation committee considers how other companies allocate compensation, based on the marketplace data provided by Strategic Compensation Group, and each executive’s level of responsibility, the individual skills, experience and contribution of each executive, and the ability of each executive to impact company-wide performance and create long-term shareholder value.

 

In 2008, our named executive officers’ compensation was allocated among annual salary, annual cash incentives and long-term equity-based incentives, with a heavy emphasis on “at-risk” performance-based components of annual cash incentives and long-term equity awards.

 

The compensation committee believes performance-based incentive compensation comprising 70% to 90% of total target compensation is appropriate. The compensation committee also believes a significant portion of the executive officers’ compensation should be allocated to equity-based compensation in order to effectively align their interests with the long-term interests of our shareholders. Consequently, for 2008, a majority of our named executive officers’ total compensation was provided in the form of nonqualified stock options and restricted stock.

 

When allocating Mr. Foley’s compensation among base salary and annual incentives and equity awards, the compensation committee considers that Mr. Foley is not employed exclusively by us. Because Mr. Foley does not dedicate 100% of his time on a day-to-day basis to FIS matters, the compensation committee has allocated a smaller portion of his annual compensation to base salary. Rather, because of Mr. Foley’s unique experience and his

contributions to and impact on the Company’s long-term strategy and success, the compensation committee has heavily weighted Mr. Foley’s compensation toward “at-risk” performance-based incentive and equity awards.

 

2008 Executive Compensation Components

 

For 2008, the principal components of compensation for our named executive officers consisted of:

 

 

We also provided our executives with certain retirement and employee benefit plans as well as limited perquisites, although these items are not significant components of our compensation programs.

 

Below is a summary of each element of our 2008 compensation programs.

 

Base Salary

 

We seek to provide each of our named executive officers with a level of assured cash compensation for services rendered during the year sufficient, together with a performance-based cash incentive, to motivate the executive to consistently perform at a high level. However, our emphasis is on performance-based, at-risk pay. The compensation committee typically reviews salary levels at least annually as part of our performance review process, as well as in the event of promotions or other changes in executive officers’ positions with the Company. In 2008, the compensation committee approved an increase of $15,000 to all of the named executive officers’ base salary levels, other than Mr. Foley who remained at his 2007 base salary level.

 

Annual Performance-Based Cash Incentive

 

We award annual cash incentives based upon the achievement of performance goals that are specified in the first quarter of the year. We provide the annual incentives to our executive officers under an annual incentive plan that is designed to allow the annual incentives to qualify as deductible performance-based compensation, as that term is used in Section 162(m) of the Code. The annual incentive plan includes a set of performance goals that can be used in setting incentive awards under the plan. We use the annual incentive plan to provide a material portion of the executives’ total compensation in the form of at-risk, performance-based pay.

 

In the first quarter of 2008, annual incentive award targets were established by the compensation committee as described above for our named executive officers as a percentage of the individual’s base salary. For 2008, Mr. Foley’s annual incentive target was 250% of base salary, Mr. Kennedy’s target was 200% of base salary, Mr. Carbiener’s, Mr. Norcross’s and Mr. Sanchez’s target was 150% of base salary, and Mr. Scanlon’s target was 100% of base salary.

 

Actual payout ranges from one-half to two times (three times for Mr. Foley) the target incentive opportunity, depending upon the achievement of pre-established goals. However, no annual incentive payments are payable to an executive officer if the pre-established, minimum performance levels are not met. These performance goals were specific, objective measures, and the compensation committee did not retain discretion to increase the amount of the incentive awards, but did retain discretion to reduce such amounts. Minimum performance levels were established to challenge executive officers and, at the same time, provide reasonable opportunities for achievement. Maximum performance levels were established to limit annual incentive awards so as to avoid excessive compensation without discouraging performance beyond the minimum levels. The ranges of possible payments under FIS’s annual incentive plan are set forth in the Grants of Plan-Based Awards table under the column Estimated Possible Payouts Under Non-Equity Incentive Plan Awards.

 

Annual incentive awards for 2008 for the named executive officers were based on achieving weighted objectives for revenue growth (2008 target of 19.00% growth), earnings before interest and taxes, or EBIT (2008 target of 25.34% growth) and keeping capital expenditures at or below targeted levels (2008 target of less than $296 million), which are three key measures in evaluating the performance of our business. Revenue was selected as

a performance goal with the intent of focusing our named executive officers on achieving our revenue growth objectives. The compensation committee believes that revenue is an effective measure of financial success and is a measure that is clearly understood by both our executive officers and shareholders. EBIT is calculated by taking GAAP net income and adding back interest expense, interest income, other non-operating expense, equity in earnings of unconsolidated subsidiaries, minority interest expense and income tax expense. EBIT was selected as the appropriate measure since the level of EBIT reflects the operating strength and efficiency of the Company. The goal of keeping capital expenditures (that is, outlays of money to acquire or improve long term assets not bought or sold in the normal course of business) at or below targeted levels was selected to focus our named executive officers on reducing costs to our business. For purposes of determining whether the targets under the annual incentive plan have been met, FIS adjusts its revenue, EBIT and capital expenditure results for the financial impact of certain events and activities, including the LPS spin-off, merger, acquisition and divestiture activities, certain integration activities, and other restructuring charges, and for the impact of changes in foreign currency from budgeted rates.

 

The annual incentive awards were weighted forty percent each for the revenue and EBIT targets and twenty percent for the capital expenditures target. For 2008, our financial results exceeded the minimum levels but fell just short of the target levels with respect to revenue growth (2008 revenue growth was 18%) and EBIT growth (2008 EBIT growth was 31%) and exceeded the maximum level with respect to the capital expenditures target (2008 capital expenditures of $253.7 million).

 

Accordingly, the incentive awards earned by the named executive officers, when combined, exceeded their target levels, but were less than the maximum levels. The annual incentive amounts earned under the annual incentive plan were approved by the compensation committee and are reported in the Summary Compensation Table under the column Non-Equity Incentive Plan Compensation.

 

Long-Term Equity Incentive Awards

 

In 2008, we used our shareholder approved amended and restated Certegy Inc. Stock Incentive Plan (the “Certegy Plan”) and our shareholder approved Fidelity National Information Services, Inc. 2008 Omnibus Incentive Plan (the “Omnibus Incentive Plan”) for long-term incentive awards (collectively, the Certegy Plan and Omnibus Incentive Plan shall be referred to as the “Stock Plans”).

 

We have historically used nonqualified stock options and restricted stock as our primary form of equity compensation, although the Stock Plans are omnibus plans that authorize us to grant stock appreciation rights and restricted stock units. We believe stock options and restricted stock assist in our goal of creating long-term shareholder value by linking the interests of our named executive officers, who are in positions to directly influence shareholder value, with the interests of our shareholders. A description of the Stock Plans can be found under the heading “Stock Incentive Plans” following the Grants of Plan-Based Awards table.

 

Our general practice is to make awards during the fourth quarter of each year at a meeting of the compensation committee held following the release of third quarter earnings. We also may grant awards in connection with significant “in year” events or incident to new hires and promotions.

 

In October 2008, the compensation committee approved grants of nonqualified stock options and restricted stock to Messrs. Foley, Kennedy, Scanlon, Norcross and Sanchez. The number of shares of restricted stock and the exercise prices and number of option shares subject to these grants are disclosed in the Grants of Plan-Based Awards table.

 

The factors considered by the compensation committee in determining stock option and restricted stock awards included: (i) an analysis of competitive marketplace compensation data provided by Strategic Compensation Group; (ii) the executive’s level of responsibility and ability to influence performance; (iii) the executive’s level of experience and skills; (iv) the need to retain and motivate highly talented executives; and (v) the Company’s business environment, objectives and strategy.

 

In each case, the stock options were awarded with an exercise price equal to the fair market value of a share on the date of grant, vest proportionately each year over three years based on continued employment with us and have a seven year term. In each case, the restricted stock vests proportionately each year over three years based on continued employment with us. In addition to aligning the executive’s interest with the interests of our shareholders,

our compensation committee believes the stock option and restricted stock awards aid in retention, because the executive must remain with FIS for three years before the awards become fully exercisable and free of restrictions.

 

In March 2008, the compensation committee also approved grants of restricted stock to Messrs. Foley, Kennedy, Carbiener, Norcross and Sanchez. The number of shares of restricted stock is disclosed in the Grants of Plan-Based Awards table. The restricted stock awards were granted to help retain them, recognize their performance and further tie them to the interests of our shareholders. In addition, the restricted stock awards were based, in part, on how well we performed in 2007, especially considering the challenging industry conditions and general economic downturn. These awards vest proportionately each quarter over eight consecutive quarters beginning June 30, 2008.

 

In February 2008, the compensation committee also approved a new hire grant of nonqualified stock options to Mr. Scanlon. The exercise price and number of option shares subject to this grant are disclosed in the Grants of Plan-Based Awards table.

 

In connection with the LPS spin-off, Mr. Carbiener’s stock options and shares of restricted stock, including those granted in March 2008, were converted into stock options to purchase shares of LPS common stock and restricted shares of LPS common stock. The exercise prices of the option awards and the number of shares subject to each option and restricted stock award were adjusted to reflect the differences in price between LPS’s and our common stock. Mr. Foley’s stock options and restricted stock awards were split, and one-third of his awards were replaced with LPS stock options and restricted stock.

 

Further details concerning the restricted stock awards and stock option grants made in 2008 to our named executive officers are provided in the Grants of Plan-Based Awards table and the Outstanding Equity Awards at Year-End table and the related footnotes.

 

Retirement and Employee Benefit Plans

 

We provide retirement and other benefits to our U.S. employees under a number of compensation and benefit plans. Our named executive officers generally participate in the same compensation and benefit plans as our other executives and employees. All employees in the United States, including our named executive officers, are eligible to participate in our 401(k) plan and our Employee Stock Purchase Plan, or ESPP. In addition, our named executive officers generally participate in the same health and welfare plans as our other employees. In addition, Messrs. Kennedy and Carbiener participate in the Special Supplemental Executive Retirement Plan, or special plan.

 

Supplemental Executive Retirement Plan

 

The Supplemental Executive Retirement Plan, or SERP, was adopted by Certegy for certain of its executive officers, including Mr. Kennedy, and became effective on November 5, 2003. We assumed sponsorship of the SERP in the Certegy Merger. The SERP is a nonqualified defined benefit pension plan that is intended to provide retirement benefits that supplement the retirement benefits provided under the pension plan. The SERP was amended on December 31, 2007 to disallow new participants from joining the SERP, freeze the accrued benefit in participants’ accounts and to prevent the accrual of additional benefits, and to allow participants to change the time and form of their SERP payments. Mr. Kennedy, the only named executive officer who participated in the SERP, took a full distribution of his accrued benefit under the SERP in the amount of $10,432,656 on January 31, 2008. Material terms of the SERP are described in the narrative following the Pension Benefits table.

 

Executive Life and Supplemental Retirement Benefit Plan and Special Supplemental Executive Retirement Plan

 

We also maintain an Executive Life and Supplemental Retirement Benefit Plan, which we refer to as the split dollar plan, and a Special Supplemental Executive Retirement Plan, which we refer to as the special plan. The split dollar plan was established by Certegy in connection with the spin-off of Certegy from Equifax Inc. The purpose of the plan was to reward executives for their service to Certegy and to provide an incentive for future service and loyalty. The plan provides benefits through life insurance policies on the lives of participants. To address changes in applicable law resulting from the Sarbanes-Oxley Act of 2002, the split dollar plan was amended in 2003 to

eliminate certain executive officers’ deferred cash accumulation benefits under the split dollar plan. As a result of the amendment, Messrs. Kennedy and Carbiener retained death benefits under the split dollar plan, but no longer have deferred cash accumulation benefits under the split dollar plan. To replace the lost cash accumulation benefits, Certegy adopted the special plan. The special plan provides participants with a benefit opportunity comparable to the deferred cash accumulation benefit opportunity that would have been available had they been able to continue participation in the split dollar plan. Information regarding Messrs. Kennedy’s and Carbiener’s benefits under the special plan, as well as material terms of the special plan, can be found in the Nonqualified Deferred Compensation table and accompanying narrative.

 

401(k) Plan

 

We sponsor a defined contribution savings plan that is intended to be qualified under Section 401(a) of the Internal Revenue Code. The plan contains a cash or deferred arrangement under Section 401(k) of the Internal Revenue Code, as well as an employee stock ownership plan feature. Participating employees may contribute up to 40% of their eligible compensation, but not more than statutory limits (generally $15,500 in 2008). We contribute an amount equal to 50% of each participant’s voluntary contributions under the plan, up to a maximum of 6% of eligible compensation for each participant. Participants may direct the trustee to invest funds in any investment option available under the plan.

 

A participant may receive the value of his or her vested account balance upon termination of employment. A participant is always 100% vested in his or her voluntary contributions. Vesting in matching contributions occurs on a pro rata basis over an employee’s first three years of employment with the Company.

 

Deferred Compensation Plans

 

We also provide our named executive officers, as well as other key employees, with the opportunity to defer receipt of their compensation under a non-qualified deferred compensation plan, which we amended and restated effective January 1, 2009. Participants may elect to defer up to 75% of their base salary and up to 100% of their bonuses and/or commissions on a pre-tax basis. With the exception of Mr. Norcross, none of the named executive officers elected to defer 2008 compensation into the plan. A description of the plan and information regarding the named executive officers’ interests under the plan can be found in the Nonqualified Deferred Compensation table and accompanying narrative.

 

Employee Stock Purchase Plan

 

We also sponsor an Employee Stock Purchase Plan, or ESPP, which provides a program through which our executives and employees can purchase shares of our common stock through payroll deductions and through matching employer contributions. Participants may elect to contribute between 3% and 15% of their salary into the ESPP through payroll deduction. At the end of each calendar quarter, we make a matching contribution to the account of each participant who has been continuously employed by us or a participating subsidiary for the last four calendar quarters. For most employees, matching contributions are equal to 1/3 of the amount contributed during the quarter that is one year earlier than the quarter in which the matching contribution is made. For certain officers, including our named executive officers, and for employees who have completed at least ten consecutive years of employment with us, the matching contribution is 1/2 of such amount. The matching contributions, together with the employee deferrals, are used to purchase shares of our common stock on the open market. Our shareholders approved the ESPP at our 2006 annual meeting.

 

Health and Welfare Benefits

 

We sponsor various broad-based health and welfare benefit plans for our employees. Certain executives, including the named executive officers, are provided with additional life insurance. The taxable portion of the premiums on this additional life insurance is reflected in the Summary Compensation Table under the column All Other Compensation and the related footnote.

Perquisites and Other Benefits

 

We provide few perquisites to our named executive officers. In general, the perquisites provided are intended to help them be more productive and efficient and to protect us and the executive from certain business risks and potential threats. In 2008, Messrs. Foley, Kennedy and Norcross received club membership fees. Messrs. Foley, Kennedy and Sanchez also received personal use of the corporate airplanes and Mr. Foley received assistance with financial planning. Messrs. Scanlon and Norcross also received relocation benefits. The compensation committee regularly reviews the perquisites provided to our executive officers. Further detail regarding executive perquisites in 2008 can be found in the Summary Compensation Table under the column All Other Compensation and the related footnote.

 

Post-Termination Compensation and Benefits

 

We have entered into employment agreements with each of our named executive officers. We believe these agreements are necessary to protect our legitimate business interests, as well as to protect the executives in the event of certain termination events. A description of the material terms of the agreements can be found in the narrative following the Grants of Plan-Based Awards table and in the Potential Payments Upon Termination or Change in Control section.

 

Stock Ownership Guidelines

 

We established formal stock ownership guidelines on March 14, 2006 for all corporate officers, including the named executive officers, and members of our board, to encourage such individuals to hold a multiple of their base salary (or annual retainer) in our common stock. The guidelines call for the executive to reach the ownership multiple within five (5) years. Shares of restricted stock and gain on stock options count toward meeting the guidelines. The guidelines, including those applicable to non-employee directors, are as follows:

 

 

Each of our named executive officers and each of our non-employee directors, except Robert M. Clements and Thomas M. Hagerty, met the stock ownership guidelines as of December 31, 2008. The compensation committee may consider the guidelines and the executive’s satisfaction of such guidelines in determining executive compensation.

 

Tax and Accounting Considerations

 

The compensation committee considers the impact of tax and accounting treatment when determining executive compensation.

 

Section 162(m) of the Internal Revenue Code places a limit of $1,000,000 on the amount that can be deducted in any one year for compensation paid to certain executive officers. There is, however, an exception for certain performance-based compensation. The compensation committee takes the deduction limitation under Section 162(m) into account when structuring and approving awards under our annual incentive plan and the Stock Plans. Compensation paid under our annual incentive plan and awards granted under the Stock Plans are generally intended to qualify as performance-based compensation. However, the compensation committee may approve compensation, such as time-vesting restricted stock, that will not meet these requirements.

 

The compensation committee also considers accounting impact when structuring and approving awards. We account for stock-based payments, including stock option grants, in accordance with Statement of Financial Accounting Standards No. 123 (revised), Share Based Payment, which we refer to as FAS 123(R).

Compensation Committee Report

 

The compensation committee has reviewed and discussed the Compensation Discussion and Analysis required by Item 402(b) of Regulation S-K with management, and the compensation committee recommended to the board that the Compensation Discussion and Analysis be included in this Proxy Statement.

 

THE COMPENSATION COMMITTEE

 

Thomas M. Hagerty, Chairman

David K. Hunt

 

Executive Compensation

 

The following table sets forth information regarding the cash and non-cash compensation earned by and awarded to our Executive Chairman, our Chief Executive Officer, our Chief Financial Officer and our two other most highly compensated executive officers during 2008, and one additional person who was our former Chief Financial Officer, who stepped down as an executive officer in July 2008, following the LPS spin-off, to become the Chief Executive Officer of LPS (together, the named executive officers). Mr. Scanlon’s, Mr. Norcross’s and Mr. Sanchez’s 2007 and 2006 compensation is not shown because they were not named executive officers in 2007 or 2006 and their compensation information has not previously been disclosed. The amounts of compensation shown below do not necessarily reflect the compensation such person will receive in the future, which could be higher or lower.

Summary Compensation Table

 

 

 

 

 

 

The following table sets forth information concerning awards granted to the named executive officers during the fiscal year ended December 31, 2008.

 

Grants of Plan-Based Awards

 

 

 

 

 

Employment Agreements

 

We have entered into employment agreements with a limited number of our senior executives, including our named executive officers. Additional information regarding post-termination benefits provided under these employment agreements can be found in the “Potential Payments Upon Termination or Change in Control” section. The following descriptions are based on the terms of the agreements as of December 31, 2008.

 

William P. Foley, II

 

We entered into a three-year employment agreement with Mr. Foley, effective July 2, 2008, to serve as our Executive Chairman, with a provision for automatic annual extensions unless either party provides timely notice that the term should not be extended. Under the terms of the agreement, Mr. Foley’s minimum annual base salary is $550,000, with an annual cash bonus target equal to 250% of his annual base salary, with higher or lower amounts payable depending on performance relative to targeted results. Mr. Foley is entitled to supplemental disability insurance sufficient to provide at least 2/3 of his pre-disability base salary, and Mr. Foley and his eligible dependents are entitled to medical and other insurance coverage we provide to our other top executives as a group. Mr. Foley is also eligible to receive equity grants under our equity incentive plans, as determined by our compensation committee.

 

Mr. Foley’s employment agreement contains provisions related to the payment of benefits upon certain termination events. The details of these provisions are set forth in the “Potential Payments Upon Termination or Change in Control” section.

 

Lee A. Kennedy

 

We entered into a three-year employment agreement with Mr. Kennedy, effective as of the consummation of the Certegy Merger on February 1, 2006, which was superseded by a new agreement, to serve as our Chief Executive Officer, with a provision for automatic annual extensions unless either party provides timely notice that the term should not be extended. Under the terms of the agreement, Mr. Kennedy’s minimum annual base salary is $1,015,000, with an annual cash bonus target equal to 200% of his annual base salary, with higher or lower amounts payable depending on performance relative to targeted results. Mr. Kennedy is entitled to supplemental disability

insurance sufficient to provide at least 2/3 of his pre-disability base salary, and Mr. Kennedy and his eligible dependents are entitled to medical and other insurance coverage we provide to our other top executives as a group. Mr. Kennedy is also entitled to the payment of initiation and membership dues in any social or recreational clubs that we deem appropriate to maintain our business relationships.

 

Mr. Kennedy’s employment agreement contains provisions related to the payment of benefits upon certain termination events. The details of these provisions are set forth in the “Potential Payments Upon Termination or Change in Control” section.

 

Jeffrey S. Carbiener

 

Prior to stepping down from the Company in July 2008, we entered into a three-year employment agreement with Mr. Carbiener, effective May 1, 2008, to serve as our Chief Financial Officer, with a provision for automatic annual extensions unless either party provided timely notice that the term should not be extended. Under the terms of the agreement, Mr. Carbiener’s minimum annual base salary was $515,000, with an annual cash bonus target equal to 150% of his annual base salary, with higher or lower amounts payable depending on performance relative to targeted results. Mr. Carbiener was entitled to supplemental disability insurance sufficient to provide at least 2/3 of his pre-disability base salary, and Mr. Carbiener and his eligible dependents were entitled to medical and other insurance coverage we provided to our other top executives as a group.

 

Mr. Carbiener’s employment agreement contained provisions related to the payment of benefits upon certain termination events. On the effective date of the LPS spin-off, July 2, 2008, Mr. Carbiener’s employment agreement was assumed by LPS.

 

In connection with the LPS spin-off and LPS’s assumption of Mr. Carbiener’s employment agreement, (i) we paid no severance or other termination benefits to Mr. Carbiener and (ii) all of Mr. Carbiener’s FIS equity awards were cancelled and exchanged for equivalent LPS equity awards, with no immediate acceleration or vesting of such awards.

 

George P. Scanlon

 

We entered into a three-year employment agreement with Mr. Scanlon, effective May 1, 2008, to serve as our Executive Vice President, Finance and Chief Financial Officer, with a provision for automatic annual extensions unless either party provides timely notice that the term should not be extended. Under the terms of the agreement, Mr. Scanlon’s minimum annual base salary is $415,000, with an annual cash bonus target equal to 100% of his annual base salary, with higher or lower amounts payable depending on performance relative to targeted results. Mr. Scanlon is entitled to supplemental disability insurance sufficient to provide at least 2/3 of his pre-disability base salary, and Mr. Scanlon and his eligible dependents are entitled to medical and other insurance coverage we provide to our other top executives as a group.

 

Mr. Scanlon’s employment agreement contains provisions related to the payment of benefits upon certain termination events. The details of these provisions are set forth in the “Potential Payments Upon Termination or Change in Control” section.

 

Gary A. Norcross

 

We entered into a three-year employment agreement with Mr. Norcross, effective November 16, 2007, to serve as our President and Chief Operating Officer, Transaction Processing Services, with a provision for automatic annual extensions unless either party provides timely notice that the term should not be extended. Under the terms of the agreement, Mr. Norcross’s minimum annual base salary is $575,000, with an annual cash bonus target equal to 150% of his annual base salary, with higher or lower amounts payable depending on performance relative to targeted results. Mr. Norcross is entitled to supplemental disability insurance sufficient to provide at least 2/3 of his pre-disability base salary, and Mr. Norcross and his eligible dependents are entitled to medical and other insurance coverage we provide to our other top executives as a group.

Mr. Norcross’s employment agreement contains provisions related to the payment of benefits upon certain termination events. The details of these provisions are set forth in the “Potential Payments Upon Termination or Change in Control” section.

 

Francis R. Sanchez

 

We entered into a three-year employment agreement with Mr. Sanchez, effective May 1, 2008, to serve as our President, Strategic Solutions, with a provision for automatic annual extensions unless either party provides timely notice that the term should not be extended. Under the terms of the agreement, Mr. Sanchez’s minimum annual base salary is $590,000, with an annual cash bonus target equal to 150% of his annual base salary, with higher or lower amounts payable depending on performance relative to targeted results. Mr. Sanchez is entitled to supplemental disability insurance sufficient to provide at least 2/3 of his pre-disability base salary, and Mr. Sanchez and his eligible dependents are entitled to medical and other insurance coverage we provide to our other top executives as a group.

 

Mr. Sanchez’s employment agreement contains provisions related to the payment of benefits upon certain termination events. The details of these provisions are set forth in the “Potential Payments Upon Termination or Change in Control” section.

 

Stock Incentive Plans

 

The Stock Plans are administered by our compensation committee and permit the granting of stock options, including incentive and nonqualified stock options, restricted stock, and restricted stock units. In addition to these types of awards, the Omnibus Plan also permits the granting of stock appreciation rights, performance shares, performance units and other awards. The awards may be subject to time-based and/or performance-based vesting, and, depending on the plan under which the award was granted and the applicable award agreement, may become fully vested if we experience a change in control. Further details are set forth in the “Potential Payments Upon Termination or Change in Control” section.

 

Our compensation committee is authorized to make awards under the Stock Plans to our and our subsidiaries’ officers, key employees and other service providers, as well as our non-employee directors. The Certegy Plan was most recently submitted for shareholder approval at our 2006 annual meeting, at which time shareholders approved an increase in the number of shares of common stock reserved for issuance under the plan by 4,000,000 shares. The Omnibus Incentive Plan was submitted for shareholder approval at our 2008 annual meeting, at which time shareholders approved the plan which reserved 11,200,000 shares of common stock for issuance. In connection with the LPS spin-off and pursuant to the terms of the Omnibus Incentive Plan, the shares of common stock available for issuance under the Omnibus Incentive Plan were adjusted using a conversion factor of 1.7952 to adjust the number of shares available for issuance under the Omnibus Incentive Plan following the LPS spin-off.

 

We also maintain a long-term incentive plan that we assumed in connection with the Certegy Merger, the Former FIS 2005 Stock Incentive Plan (the “Former FIS plan”). The Former FIS Plan permits the granting of stock options, including incentive and nonqualified stock options, and stock awards. Certain of our named executive officers continue to hold outstanding stock options under the Former FIS plan, which options we assumed in connection with the Certegy Merger and converted into options to purchase our stock. Although the outstanding awards remain subject to the terms of the Former FIS plan, no further awards may be granted under this plan.

 

In addition, we maintain several long-term incentive plans that we assumed in connection with the FNF Merger, including the FNF 2004 Omnibus Incentive Plan and the amended and restated FNF 2001 Stock Incentive Plan (collectively the “Assumed FNF Stock Plans”). The FNF 2004 Omnibus Incentive Plan permits the granting of stock options, including incentive and nonqualified stock options, stock appreciation rights, restricted stock, restricted stock units, performance shares, performance units and other stock-based awards. The FNF 2001 Stock Incentive plan permits the granting of stock options, including incentive and nonqualified stock options, deferred shares and rights to purchase restricted stock. Prior to the FNF Merger, the compensation committee of Old FNF granted awards of stock options and restricted stock to certain officers and non-employee directors of Old FNF pursuant to the terms of these plans, or assumed obligations under the plans of certain companies Old FNF acquired. Mr. Foley continues to hold outstanding awards under the Assumed FNF Stock Plans, which awards we assumed in

connection with the FNF Merger and converted into options to purchase our stock and shares of our restricted stock, as the case may be. Although the outstanding awards remain subject to the terms of the Assumed FNF Stock Plans, the plans have been frozen with respect to new awards and no future awards may be granted under these plans.

 

The following table sets forth information concerning unexercised stock options, stock that has not vested and equity incentive plan awards for each named executive officer outstanding as of December 31, 2008:

 

Outstanding Equity Awards at Fiscal Year-End

 

 

 

The following table sets forth information concerning each exercise of stock options, SARs and similar instruments, and each vesting of stock, including restricted stock, restricted stock units and similar instruments, during the fiscal year ended December 31, 2008 for each of the named executive officers on an aggregated basis:

 

Option Exercises and Stock Vested

 

 

The following table sets forth information with respect to each plan that provides for payments or other benefits at, following, or in connection with retirement:

 

Pension Benefits

 

 

 

 

The SERP

 

The SERP provides benefits that supplement benefits under our pension plan. Mr. Kennedy is the only named executive officer who participated in the SERP. Normal retirement benefits under the SERP, which are payable at age 60, are equal to 50% of the participant’s average annual compensation, multiplied by a fraction, not greater than one, equal to the participant’s years of credited service divided by 30 years. Mr. Kennedy’s prior service with predecessor entities is recognized under the SERP.

 

On December 31, 2007, our compensation committee approved an amendment to the SERP. The amendment provided that (i) no new participants may join the SERP after December 31, 2007, (ii) each current participant’s accrued SERP benefit will be frozen as of December 31, 2007 and (iii) no participant will accrue additional benefits under the SERP after December 31, 2007. The amendment also allows SERP participants to change the time and form of payment of their SERP benefits by making an irrevocable election by December 31, 2007, as is permitted under transition rules relating to Section 409A of the Internal Revenue Code (“Section 409A”).

 

Pursuant to this election, SERP participants may elect to receive their SERP benefits in a lump sum at a specified date prior to termination of employment, as well as in a new form of payment (a single life annuity, a joint and survivor annuity, a ten-year certain and life annuity or a lump sum) that will apply if they do not elect a pre-termination payment date or if their employment terminates prior to the pre-termination payment date they elected. In either case, the new payment elections will apply regardless of when and in what form their SERP benefits would have been paid had they not made the election. Mr. Kennedy entered into a new payment election agreement with the Company pursuant to which he received his accrued SERP benefit in a lump sum in the amount of $10,432,656 on January 31, 2008.

 

Finally, the amendment also provides for a six-month delay of payments, subject to Section 409A, to certain employees if their SERP benefits are paid upon termination of employment.

 

The following table sets forth information with respect to the named executive officers’ accounts under our nonqualified deferred compensation plans:

 

Nonqualified Deferred Compensation

 

 

 

 

The Special Plan

 

The special plan provides participants with a benefit opportunity comparable to the deferred cash accumulation benefit that would have been available had they been able to continue participation in the split dollar plan. Participants’ interests under the special plan are based on the excess of the cash surrender value of a life insurance policy on the executive over the total premium payments paid by us. A participant’s interest fluctuates based on the performance of investments in which the participants’ interest is deemed invested. The special plan provides that following a change in control, which occurred when we merged with Certegy, the participants may select investments; however, their right to select investments is forfeited if they violate the plan’s non-competition provisions within one year after termination of employment. To date, investment decisions regarding Messrs. Kennedy’s and Carbiener’s participant interests have been made by a third party investment advisor. The table below shows the investments available for selection, as well as the rates of return for those investments for 2008.

 

Messrs. Kennedy and Carbiener are fully vested in their special plan benefits, except that their benefits are forfeited if they die or if their employment is terminated by us for cause. For this purpose, the term “cause” means the participant’s willful and continued failure to do his duties even after we make a written demand for performance, or willful actions by the participant that injure us. Benefits are distributed after the plan administrator declares a rollout event, which can be done no sooner than the latest of (1) fifteen years after the participant’s commencement date under the split dollar plan, (2) the participant’s sixtieth birthday or (3) after the participant retires or becomes permanently disabled. For this purpose, the term “retire” means the participant’s termination of employment after (1) turning age sixty-five, (2) turning age fifty-five and having five years of vesting service or (3) turning age fifty and having the participant’s age plus years of benefit service equal at least seventy-five. The administrator may also declare a rollout event if payments under the plan have not yet begun and a participant violates the plan’s non-competition provisions within a one-year period after termination of employment. If a participant terminates for good reason, or if the participant’s job is eliminated, payments must begin fifteen years after the participant’s commencement date under the split dollar plan or after the participant turns sixty years old, whichever is later. For this purpose, the term “good reason” generally means termination of employment by the participant within the period beginning six months before and ending three years after a change in control due to (1) an adverse change in the participant’s title or assignment of duties inconsistent with participant’s position, (2) a reduction of salary, (3) our failure to continue existing incentive, compensation and employee benefit plans or (4) our requiring the participant to move more than 35 miles from the location of the participant’s office prior to a change in control. The Certegy Merger constituted a change in control for these purposes. Participants can also elect to get payments earlier if both (1) seven years have passed since the participant’s commencement date under the split dollar plan and (2) the participant retires or turns sixty years old.

 

A participant can elect to get the payments in either a single lump sum or in installments over a period of between two and ten years. If the participant elects installment payments, we will credit the undistributed principal amount with 5% simple annual interest. If a participant elects to receive a lump sum distribution, we can make the distribution either in cash or by transferring an interest in the policy. If the benefit is less than $10,000, or the participant violates the plan’s non-competition provisions within a one-year period after termination of employment, then the administrator can force a lump sum distribution. Unless a participant violates the plan’s non-competition provisions within one-year after termination of employment, we will pay an additional gross up based on the administrator’s estimate of the tax savings realized by us by being able to deduct the payments from our federal, state and local taxes. Participants’ benefits derive solely from the terms of the special plan and are unsecured. Participants do not have rights under the insurance policies.

 

In connection with the Certegy Merger, we funded a rabbi trust with sufficient monies to pay all future required insurance premiums under the split-dollar plan and to pay all of the participant interests as defined in the special plan, including with respect to Mr. Carbiener. The amounts necessary to pay the premiums and interests of Mr. Kennedy were previously funded.

 

The Deferred Compensation Plan

 

Under our FIS Nonqualified Deferred Compensation Plan, which was amended and restated effective January 1, 2009, participants, including our named executive officers, can defer up to 75% of their base salary and 100% of their bonuses and commissions. Deferrals and related earnings are not subject to vesting conditions.

 

Participants’ accounts are bookkeeping entries only and participants’ benefits are unsecured. Participants’ accounts are credited or debited daily based on the performance of hypothetical investments selected by the

participant, and may be changed on any business day. The funds from which participants may select hypothetical investments, and the 2008 rates of return on these investments, are listed in the following table:

 

 

Upon retirement, which generally means separation of employment after attaining age sixty, an individual may elect either a lump-sum withdrawal or installment payments over 5, 10 or 15 years. Similar payment elections are available for pre-retirement survivor benefits. In the event of a termination prior to retirement, distributions are paid over a 5-year period. An individual will receive a lump sum payment upon a separation from service during the twenty four month period following a change in control. An individual may also elect to receive a lump sum payment upon a change in control. Account balances less than the limit under Section 402(g) of the Internal Revenue Code, which was $15,500 in 2008, will be distributed in a lump-sum. Participants can elect to receive in-service distributions if they establish a special account under the plan and specify a future date on which that benefit is to be paid. These payments would equal the value of the account as of the January 31 following the plan year designated by the participant, and would be paid within two and one-half months following the end of that plan year. The participant may also petition us to suspend elected deferrals, and to receive partial or full payout under the plan, in the event of an unforeseeable financial emergency, provided that the participant does not have other resources to meet the hardship.

 

Plan participation continues until all benefits under the plan have been paid. Participants will receive their account balance in a lump-sum distribution if employment is terminated within two years after a change in control.

 

Deferral amounts that were vested on or before December 31, 2004 are generally not subject to Section 409A and are governed by more liberal distribution provisions that were in effect prior to the passage of Section 409A. For example, a participant may withdraw these grandfathered amounts at any time, subject to a withdrawal penalty of ten percent, or may annually change the payment elections for these grandfathered amounts.

 

Potential Payments Upon Termination or Change in Control

 

In this section, we discuss the nature and estimated value of payments and benefits we would provide to our named executive officers in the event of termination of employment or a change in control. Except for Mr. Carbiener, the amounts described in this section are what would be due under our plans and the named executive officers’ employment agreements if their employment had terminated on December 31, 2008. For Mr. Carbiener, in connection with the LPS spin-off and LPS’s assumption of Mr. Carbiener’s employment agreement, (i) we paid no severance or other termination benefits to Mr. Carbiener and (ii) all of Mr. Carbiener’s FIS equity awards were cancelled and exchanged for equivalent LPS equity awards, with no immediate acceleration or vesting of such awards. The types of termination situations include a voluntary termination by the executive, with and without good reason, a termination by us either for cause or not for cause, termination after a change in control, and termination in the event of disability or death. Except for Mr. Carbiener, we also describe the estimated payments and benefits that would be provided upon a change in control without a termination of employment. The actual payments and benefits that would be provided upon a termination of employment would be based on the named executive officers’ compensation and benefit levels at the time of the termination of employment and the value of accelerated vesting of stock-based awards is dependent on the value of the underlying stock.

For each type of employment termination, the named executive officers would be entitled to benefits that are available generally to our domestic salaried employees, such as distributions under our 401(k) savings plan, certain disability benefits and accrued vacation. We have not described or provided an estimate of the value of any payments or benefits under plans or arrangements that do not discriminate in scope, terms or operation in favor of a named executive officer and that are generally available to all salaried employees. In addition to these generally available plans and arrangements, Mr. Kennedy and Carbiener also had benefits under the split dollar plan and the special plan, and at December 31, 2008, Mr. Kennedy also had benefits under the SERP. These plans, and Messrs. Kennedy’s and Carbiener’s benefits under them, are discussed in the Compensation Discussion & Analysis section, the Pension Benefits table and the Nonqualified Deferred Compensation table and accompanying narratives.

 

Potential Payments under Employment Agreements

 

As discussed previously, we have entered into employment agreements with each of our named executive officers. These agreements contain provisions for the payment of severance benefits following certain termination events. Following is a summary of the payments and benefits our named executive officers would receive in connection with various employment termination scenarios.

 

If Messrs. Foley, Kennedy, Scanlon, Norcross or Sanchez are terminated for any reason other than due to death and that termination is by FIS for any reason other than for cause or due to disability, or by the executive for good reason or, with respect to Mr. Foley, by him for any reason during the six month period following a change in control, then the executive is entitled to receive:

 

 

If employment terminates due to death or disability, we will pay them, or their estate:

 

 

In addition, the employment agreements provide for supplemental disability insurance sufficient to provide at least 2/3 of the executive’s pre-disability base salary. For purposes of the agreements, an executive will be deemed to have a “disability” if he is entitled to receive long-term disability benefits under our long-term disability plan.

 

Under each of the employment agreements, “cause” means the executive’s:

 

 

The employment agreements (other than with respect to Mr. Norcross) define “good reason” as: