UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

SCHEDULE 14A

(Rule 14a-101)

 

Proxy Statement Pursuant to Section 14(a) of the Securities

Exchange Act of 1934 (Amendment No.     )

 

Filed by the Registrant þ

 

Filed by a Party other than the Registrant o

 

Check the appropriate box:

 

o  Preliminary Proxy Statement

o  Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))

þ  Definitive Proxy Statement

o  Definitive Additional Materials

o  Soliciting Material Pursuant to §240.14a-12

 

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)

 

Payment of Filing Fee (Check the appropriate box):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fidelity National Information Services, Inc.
601 Riverside Avenue
Jacksonville, Florida 32204

 

April 5, 2011

 

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 18, 2011 at 10:00 A.M., Eastern 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,

 

Frank R. Martire

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 2011 Annual Meeting of Shareholders of Fidelity National Information Services, Inc. will be held on May 18, 2011 at 10:00 A.M., Eastern Time, in the Peninsular Auditorium at 601 Riverside Avenue, Jacksonville, Florida 32204 for the following purposes:

 

1. to elect two Class III directors to serve until the 2014 annual meeting of shareholders or until their successors are duly elected and qualified or until their earlier death, resignation or removal;

 

2. to ratify the appointment of KPMG LLP as our independent registered public accounting firm for the 2011 fiscal year;

 

3. to approve, in an advisory and non-binding vote, the compensation of our named executive officers;

 

4. to recommend, in an advisory and non-binding vote, whether a non-binding stockholder vote to approve the compensation of the Company’s named executive officers should occur every one, two or three years;

 

5. to approve the material terms of the FIS Annual Incentive Plan; and

 

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

 

The Board of Directors set March 23, 2011 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,

 

Michael L. Gravelle

Corporate Secretary

 

Jacksonville, Florida

April 5, 2011

 

 

 

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 18, 2011 at 10:00 A.M., Eastern 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 5, 2011 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,” “our,” 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 “Metavante” are to Metavante Technologies, Inc., and its subsidiaries, as acquired by FIS on October 1, 2009; all references to “eFunds” are to eFunds Corporation, and its subsidiaries, as acquired by FIS on September 12, 2007; all references to “Capco” are to The Capital Markets Company NV, as acquired by FIS on December 2, 2010; 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. For purposes of the biographical descriptions of our directors and executive officers, service with FIS includes service with Former FIS prior to the Certegy Merger, and service with FNF includes service with Old FNF prior to the FNF Merger.

 

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 23, 2011 are entitled to vote. On that day, 304,836,896 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.

 

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 President and Chief Executive Officer and our Corporate Secretary, 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 five 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 and what effect will they have?

 

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 New York Stock Exchange, such as the ratification of the appointment of the independent registered public accounting firm. On non-routine matters, such as the election of directors and Proposal No. 3 through Proposal No. 5, nominees cannot vote unless they receive voting instructions from beneficial owners, resulting in so called “broker non-votes.” Accordingly, with respect to Proposal No. 1, Proposal No. 3, Proposal No. 4 and Proposal No. 5, broker non-votes will not affect the outcome of the vote. Please note that brokers may no longer vote your shares on the election of directors in the absence of your specific instructions. Please be sure to give specific voting instructions to your broker, so that your vote can be counted.

What effect does an abstention have?

 

With respect to Proposal No. 1, Proposal No. 2, Proposal No. 3 and Proposal No. 5, abstentions or directions to withhold authority will not be included in vote totals and will not affect the outcome of the vote. For purposes of the Georgia law requirement that the number of shares present or represented by proxy and entitled to vote approving such Proposal exceed the number of shares present or represented by proxy and entitled to vote opposing it, abstentions will have no effect. With respect to Proposal No. 4, 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 $18,500, 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 2010 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:

 

 

 

 

David K. Hunt.  David K. Hunt has served as a director of FIS since June 2001. Mr. Hunt has served as a director of LPS since February 2010. 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.

 

Mr. Hunt’s qualifications to serve on the FIS Board include his over 40 years of experience in the banking and payments industries, including serving in executive positions with Signet Banking Corporation, Global Payment Systems, and AT&T Universal Card Services, and his financial literacy.

 

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 February 2006. Mr. Massey is currently a founding partner of Westrock Capital, LLC, a private investment firm, and has been since January 2009. Mr. Massey previously served as the Chief Strategy Officer 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.

 

Mr. Massey’s qualifications to serve on the FIS Board include his experience in corporate finance and investment banking and as a financial and legal advisor to public and private businesses, as well as his experience and expertise in identifying, negotiating and consummating mergers and acquisitions in technology and other industries.

Information About Our Directors Continuing in Office

 

Term Expiring in 2012

 

 

 

 

William P. Foley, II.  William P. Foley, II has served as a director of FIS since February 2006 and is the Chairman of the Board. He served as Executive Chairman of the Board until February 8, 2011. Mr. Foley has also served as the Executive Chairman of the Board of FNF since October 2006 and Chairman of the Board of FNF from the company’s formation in 1984 to October 2006. Mr. Foley served as Chief Executive Officer of FNF from the company’s formation in 1984 to May 2007. Mr. Foley also served as the Chairman of LPS from the spin-off until March 15, 2009, and, within the past five years, has served as a director of Florida Rock Industries, Inc. and CKE Restaurants, Inc.

 

Mr. Foley’s qualifications to serve on the FIS Board include his years of business experience as a Chairman, board member and executive officer of public and private companies in a wide variety of industries, including his experience serving as Executive Chairman of FIS until February 2011, and his strong track record of building and maintaining shareholder value and successfully negotiating and implementing mergers and acquisitions.

 

Thomas M. Hagerty.  Thomas M. Hagerty has served as a director of FIS since February 2006 and currently serves as a nominee of Thomas H. Lee Partners, L.P. to the FIS Board, as described below in “Proposal No. 1: Election of Directors.” 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. From July 2000 through April 2001, Mr. Hagerty also served as the Interim Chief Financial Officer of Conseco, Inc. On December 17, 2002, Conseco, Inc. voluntarily commenced a case under Chapter 11 of the United States Code in the United States Bankruptcy Court, Northern District of Illinois, Eastern Division. Mr. Hagerty also serves as a director of MGIC Investment Corporation, MoneyGram International, Inc., Ceridian Corporation and several private companies. Within the past five years, Mr. Hagerty has served as a director of Metris Companies, Inc and Hilltop Holdings Inc. (formerly known as Affordable Residential Communities Inc.).

 

Mr. Hagerty’s qualifications to serve on the FIS Board include his managerial and strategic expertise working with large growth-oriented companies as a Managing Director of Thomas H. Lee Partners, L.P., a leading private equity firm, and his experience in enhancing value of such companies, along with his expertise in corporate finance.

 

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, where he had served as Chairman and Chief Executive Officer since February 1995. Mr. Hughes is currently a director of THL Credit Inc. Within the past five years, Mr. Hughes has served as a director of Texas Industries, Inc. and Pilgrim’s Pride Corp.

 

Mr. Hughes’ qualifications to serve on the FIS Board include his years of experience as an executive and consultant to financial services institutions, particularly his experience as Vice Chairman of Citigroup Inc. and

Chairman and Chief Executive of Associates First Capital Corporation, as well as his financial literacy and experience in matters of corporate governance.

 

Term Expiring in 2013

 

 

 

 

Stephan A. James.  Stephan A. James is the former Chief Operating Officer of Accenture Ltd., and served as Vice Chairman of Accenture Ltd. from 2001 to 2004. He also served in the advisory position of International Chairman of Accenture, from August 2004 until August 2006. He is a director of BMC Software, Inc. and Navigant Consulting, Inc., and currently serves as a member of the University of Texas McCombs School of Business Advisory Board. Mr. James served as a director of Metavante Technologies, Inc. from November 2007 until the Metavante merger.

 

Mr. James’ qualifications to serve on the FIS Board include his experience and expertise providing financial, management consulting and technology services to financial service companies in connection with his management positions at Accenture Ltd. In particular, Mr. James was responsible for the worldwide financial service consulting and outsourcing business of Accenture Ltd. for five years.

 

James Neary.  James Neary has served as a nominee of WPM, L.P. to the FIS Board since October 2009, as described below in “Proposal No. 1: Election of Directors,” and was elected to the Board in 2010. Mr. Neary is a Managing Director of Warburg Pincus LLC and leads the firm’s buyout efforts in technology, media, telecom and business services. From 2000 through 2004, Mr. Neary led Warburg Pincus LLC’s Capital Markets group. Mr. Neary is currently a director of Interactive Data Corporation, Alert Global Media Holdings, LLC, Telmar Network Technology and Coyote Logistics. He previously was a Managing Director at Chase Securities and was in the Leveraged Finance Group at Credit Suisse First Boston. Mr. Neary served as a director of Metavante Technologies, Inc. from November 2007 until the Metavante merger and currently serves on the board of The Brearley School.

 

Mr. Neary’s qualifications to serve on the FIS Board include his experience formulating strategy and designing and implementing financing arrangements as a Managing Director of Warburg Pincus LLC, a leading private equity firm, as well as his previous positions with Chase Securities and Credit Suisse First Boston, and his experience in the technology industry.

 

Frank R. Martire.  Frank R. Martire is the Chief Executive Officer and President of FIS. Mr. Martire joined FIS after its acquisition of Metavante Technologies, Inc., where he served as Chairman of the Board of Directors and Chief Executive Officer. Mr. Martire also served as Director and Chief Executive Officer of Metavante Corporation since March 2003 and served as its President from March 2003 to November 2008. Mr. Martire was President and Chief Operating Officer of Call Solutions Inc. from 2001 to 2003 and President and Chief Operating Officer, Financial Institution Systems and Services Group, of Fiserv, Inc. from 1991 to 2001. Mr. Martire is a director of Aurora Healthcare and the Children’s Hospital and Health System Foundation. Mr. Martire is also a member of the board of trustees for Sacred Heart University.

Mr. Martire’s qualifications to serve on the FIS Board include his years of experience providing technology solutions to the banking industry, particularly his experience with Metavante Technologies, Inc., and his knowledge of and contacts in the financial services industry.

 

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. The Board currently consists of eight directors. 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.

 

On October 1, 2009, the Company completed its acquisition of Metavante pursuant to the terms and conditions of an Agreement and Plan of Merger (the “Merger Agreement”) dated March 31, 2009. In connection with the Merger, FNF and affiliates of Thomas H. Lee Partners, L.P. (“THL”) invested a total of $249,999,993.50 in us pursuant to the terms and conditions of an Investment Agreement dated March 31, 2009 (the “Investment Agreement”). Under the Investment Agreement, THL is entitled to nominate one member of our board of directors as long as it continues to own shares equal to at least 35% of the number it purchased under the Investment Agreement. Thomas M. Hagerty currently serves as THL’s nominee.

 

In connection with the Merger and based upon certain existing rights of WPM, L.P., a Delaware limited partnership (“WPM”), in respect of its investment in Metavante prior to the Merger, we entered into a shareholders agreement (the “Shareholders Agreement”), dated as of March 31, 2009, with WPM. The Shareholders Agreement provides that WPM is entitled to nominate and have appointed one member of our board of directors until the earlier of (1) such time as WPM no longer holds at least 20% of the number of shares of FIS common stock received in the Merger and purchased by WPM in connection with a separate stock purchase right agreement and (2) the tenth anniversary of the completion of the Merger. James Neary currently serves as WPM’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 2014:

 

David K. Hunt
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. 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 2011 fiscal year. For services rendered to us during or in connection with our fiscal years ended December 31, 2010 and 2009, 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 2010 and 2009 financial statements, and audits of the Company’s subsidiaries required for regulatory reporting purposes, including billings for out-of-pocket expenses incurred.

 

Audit-Related Fees.  Audit-related fees in 2010 and 2009 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 2010 and 2009 consisted principally of fees for tax compliance, tax planning and tax advice.

 

All Other Fees.  The Company incurred no other fees in 2010 or 2009.

 

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. The audit committee has adopted policies and procedures for pre-approving all work performed by KPMG. Specifically, the audit committee has pre-approved the use of KPMG for specific types of services subject to maximum amounts set by the committee. Additionally, 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. Any other services are required to be pre-approved by the audit committee.

 

THE BOARD RECOMMENDS THAT THE SHAREHOLDERS VOTE “FOR” THE RATIFICATION OF KPMG LLP AS THE COMPANY’S INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR THE 2011 FISCAL YEAR.

 

In accordance with recently-adopted Section 14A of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and Rule 14a-21(a) promulgated thereunder, we are asking our shareholders to approve, in a non-binding advisory vote, the compensation of our named executive officers as disclosed in this Proxy Statement pursuant to Item 402 of Regulation S-K.

 

As discussed in the “Compensation Discussion and Analysis and Executive and Director Compensation” section of this Proxy Statement, the Board and the compensation committee of the Board (“Compensation

Committee”) believe that our executive compensation program provides our named executive officers with a balanced compensation package that includes an appropriate base salary along with competitive annual and long-term incentive compensation targets. These incentive programs are designed to reward our named executive officers on both an annual and long-term basis if they attain certain specified goals.

 

Our current executive compensation program directly links compensation of our named executive officers to our financial performance and aligns the interests of our named executive officers with those of our shareholders. The Board and the Compensation Committee believe that the success of our compensation program is evident by our strong financial performance in 2010 and the resulting value creation for our shareholders. In 2010 alone, our enterprise value (defined as market capitalization plus total debt minus total cash) increased by approximately $1.5 billion. During the two-year period ending December 31, 2010, we achieved a cumulative total return of 71.3%, compared with 45.5% for the S&P 500 Index and 37.2% for the S&P 500 Supercap Data Processing & Outsourced Services Index.

 

Accordingly, we ask our shareholders to vote on the following resolution at the Annual Meeting:

 

“RESOLVED, that the Company’s shareholders approve, on an advisory basis, the compensation of the named executive officers, as disclosed in the Company’s Proxy Statement for the 2011 Annual Meeting of Shareholders pursuant to the compensation disclosure rules of the Securities and Exchange Commission, including the Compensation Discussion and Analysis and Executive and Director Compensation section of the 2011 proxy statement, the 2010 Summary Compensation Table and the other related tables and disclosure.”

 

The vote on this resolution is not intended to address any specific element of compensation; rather, the vote relates to the compensation of our named executive officers, as described in this Proxy Statement in accordance with the compensation disclosure rules of the SEC. Approval of the compensation paid to our named executive officers requires that the number of shares present or represented by proxy and entitled to vote approving the proposal exceed the number of shares present or represented by proxy and entitled to vote opposing it. Abstentions will have no effect. However, as this is an advisory vote, the results will not be binding on the Company, the Board, or the Compensation Committee and will not require us to take any action. The final decision on the compensation of our named executive officers remains with our Compensation Committee and the Board, although the Compensation Committee and the Board will consider the outcome of this vote when making compensation decisions.

 

THE BOARD RECOMMENDS THAT THE SHAREHOLDERS VOTE “FOR” THE APPROVAL, ON AN ADVISORY BASIS, OF THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS, AS DISCLOSED IN THIS PROXY STATEMENT.

 

 

In accordance with recently-adopted Section 14A of the Exchange Act and Rule 14a-21(b) promulgated thereunder, we are asking our shareholders to indicate whether future advisory votes to approve the compensation paid to our named executive officers should be held annually, biennially or triennially. This advisory vote on executive compensation is commonly referred to as a “say-on-pay vote.”

 

The Board currently believes that our shareholders should have the opportunity to vote on the compensation of our named executive officers annually. Our executive compensation program is designed to support long-term value creation. While we believe that many of our shareholders think that the effectiveness of such program cannot be adequately evaluated on an annual basis, the Board believes that at present it should receive advisory input from our shareholders each year. The Board believes that giving our shareholders the right to cast an advisory vote every year on their approval of the compensation arrangements of our named executive officers is a good corporate governance practice and is in the best interests of our shareholders, by allowing our shareholders to provide us with their input on our executive compensation philosophy, policies and practices as disclosed in our proxy statement every year.

 

Accordingly, we ask our shareholders to vote on the following resolution at the Annual Meeting:

 

“RESOLVED, that the shareholders determine, on an advisory basis, whether the preferred frequency of an advisory vote on the executive compensation of the Company’s named executive officers as set forth in the Company’s proxy statement should be every year, every two years, or every three years.”

THE BOARD RECOMMENDS THAT THE SHAREHOLDERS VOTE “FOR” A FREQUENCY PERIOD OF EVERY ONE YEAR (AN ANNUAL VOTE) FOR FUTURE ADVISORY VOTES ON THE COMPENSATION PAID TO OUR NAMED EXECUTIVE OFFICERS.

 

The voting frequency option that receives the highest number of votes cast by shareholders will be the frequency for the advisory vote on executive compensation that has been selected by shareholders. However, because this vote is advisory and not binding on the Board or the Company in any way, the Board may decide that it is in the best interests of our shareholders and the Company to hold an advisory vote on executive compensation more or less frequently than the option approved by our shareholders. Further, our Board expects to reevaluate from time to time the optimal frequency for such votes and may in the future change the frequency with which such votes are held.

 

Description of the Proposal

 

The shareholders are being asked to consider and approve the material terms of the FIS annual incentive plan so that compensation payable under the annual incentive plan to certain executive officers is tax deductible under section 162(m) of the Internal Revenue Code.

 

Section 162(m) of the Internal Revenue Code places a limit of $1,000,000 on the amount we may deduct in any one year for compensation paid to our chief executive officer and each of our other three most highly-paid executive officers other than our chief financial officer. Compensation that qualifies as performance-based compensation for purposes of section 162(m) is not subject to this deductibility limit. For annual incentives to qualify for this exception, shareholders must approve the material terms of the plan under which the incentives are paid. The board is now submitting the material terms of the annual incentive plan for approval at the 2011 Annual Meeting of Shareholders so that awards under the annual incentive plan can qualify as performance-based compensation for purposes of section 162(m).

 

The material terms of the annual incentive plan being submitted for approval include (i) the employees eligible to receive awards under the annual incentive plan, (ii) a description of the business criteria on which the performance goals are based, and (iii) the maximum amount of compensation that could be paid to any employee if the performance goals are attained. This information is provided in the description of the annual incentive plan below.

 

Description of the Annual Incentive Plan

 

The complete text of the annual incentive plan is set forth as Annex A hereto. The following is a summary of the material features of the annual incentive plan and is qualified in its entirety by reference to Annex A.

 

Administration of the Annual Incentive Plan

 

The annual incentive plan will be administered by the FIS compensation committee. Except as otherwise provided by FIS’s board of directors, the FIS compensation committee will have full and final authority in its discretion to establish rules and take all actions, including, without limitation, interpreting the terms of the annual incentive plan and deciding all questions of fact arising in connection with the annual incentive plan. All decisions, determinations and interpretations of the FIS compensation committee will be final, binding and conclusive on all persons, including FIS, its subsidiaries, its shareholders, the participants and their estates and beneficiaries.

 

Amendment and Termination

 

FIS’s Board of Directors may at any time and from time to time alter, amend, suspend, or terminate the annual incentive plan, in whole or in part. However, no amendment that requires shareholder approval in order to maintain the qualification of awards as performance-based compensation under section 162(m) of the Internal Revenue Code will be made without shareholder approval.

Eligibility and Participation

 

Eligibility under the annual incentive plan is limited to FIS’s chief executive officer and each other executive officer that the FIS compensation committee determines, in its discretion, is or may be a “covered employee” of FIS within the meaning of section 162(m) of the Internal Revenue Code and who is selected by the FIS compensation committee to participate in the annual incentive plan.

 

Form of Payment

 

Payment of incentive awards under the annual incentive plan will be made in cash.

 

Performance Period

 

The performance period under the annual incentive plan is FIS’s fiscal year or such shorter or longer period as determined by the FIS compensation committee.

 

Designation of Participants, Performance Period and Performance Measures

 

Within 90 days after the commencement of each performance period (or, if less than 90 days, the number of days which is equal to 25% of the relevant performance period applicable to an award), the FIS compensation committee will (i) select the participants to whom incentive awards will be granted, (ii) designate the applicable performance period, (iii) establish the target award for each participant, and (iv) establish the performance objective or objectives that must be satisfied in order for a participant to receive an incentive award for such performance period.

 

Performance Objectives

 

The performance objectives that will be used to determine the degree of payout of incentive awards under the annual incentive plan will be based upon one or more of the following performance measures, as determined by the FIS compensation committee: earnings per share, economic value created, market share (actual or targeted growth), net income (before or after taxes), operating income and/or earnings before interest, taxes, depreciation and amortization (EBITDA), adjusted net income after capital charge, return on assets (actual or targeted growth), return on capital (actual or targeted growth), return on equity (actual or targeted growth), return on investment (actual or targeted growth), revenue (actual or targeted growth), cash flow, operating margin, share price, share price growth, total shareholder return, and strategic business criteria consisting of one or more objectives based on meeting specified market penetration goals, productivity measures, geographic business expansion goals, cost targets, customer satisfaction or employee satisfaction goals, goals relating to merger synergies, management of employment practices and employee benefits, or supervision of litigation and information technology, and goals relating to acquisitions or divestitures of subsidiaries and/or other affiliates or joint ventures.

 

The targeted level or levels of performance with respect to such performance measures may be established at such levels and on such terms as the FIS compensation committee may determine, in its discretion, including in absolute terms, as a goal relative to performance in prior periods, or as a goal compared to the performance of one or more comparable companies or an index covering multiple companies.

 

Target Incentive Awards

 

Each participant will have a target award that will be based on achieving the target performance objectives established by the FIS compensation committee. The target award will be a percentage of the participant’s annual salary at the end of the performance period or such other amount as the FIS compensation committee may determine. If the performance objectives established by the FIS compensation committee are met at the target level, the participant will receive an incentive award equal to 100% of the target award. If the performance objectives are met at a level below or above the target level, the participant will receive an incentive award equal to a designated percentage of the target award, as determined by the FIS compensation committee.

Maximum Award

 

The maximum incentive award that may be paid to a participant under the annual incentive plan in any fiscal year is $25,000,000.

 

Committee Discretion

 

The FIS compensation committee retains the discretion to reduce the amount of any incentive award otherwise payable to a participant under the terms of the annual incentive plan, including a reduction in such amount to zero.

 

Committee Certification and Payment of Awards

 

As soon as practicable after the end of the each performance period, the FIS compensation committee will (i) determine whether the performance objectives for the performance period have been satisfied, (ii) determine the amount of the incentive award to be paid to each participant for the performance period and (iii) certify such determination in writing. Awards will be paid no later than the 15th day of the third month following the close of the performance period with respect to which the awards are made.

 

Termination of Employment

 

Unless the FIS compensation committee determines otherwise, a participant must be actively employed by FIS or a subsidiary on the last day of the performance period to receive an incentive award under the annual incentive plan for such performance period. The FIS compensation committee, in its discretion, may impose such additional service restrictions as it deems appropriate.

 

Award Information

 

As incentive awards under the annual incentive plan are based on future performance, it is not possible at this time to determine the awards that will be made in the future. No awards will be made under the annual incentive plan absent shareholder approval.

 

Federal Income Tax Consequences

 

The following is a brief description of the principal federal income tax consequences relating to incentive awards made under the annual incentive plan. This summary is based on FIS’s understanding of present federal income tax law and regulations. The summary does not purport to be complete or applicable to every specific situation.

 

Participants will recognize ordinary income equal to the amount of the award received in the year of receipt. That income will be subject to applicable income and employment tax withholding by FIS. If and to the extent that payments made under the annual incentive plan satisfy the requirements of section 162(m) of the Internal Revenue Code and otherwise satisfy the requirements of deductibility under federal income tax law, FIS will receive a corresponding deduction for the amount constituting ordinary income to the participant.

 

THE BOARD RECOMMENDS THAT THE SHAREHOLDERS VOTE “FOR” APPROVAL OF THE MATERIAL TERMS OF THE FIS ANNUAL INCENTIVE PLAN.

 

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 tables is based on 304,836,896 shares of FIS common stock outstanding as of March 23, 2011. 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, 2010, about our common stock that may be issued under our equity compensation plans:

 

 

 

 

The Amended and Restated Metavante 2007 Equity Incentive Plan, which we refer to as the Metavante plan, was approved by Metavante shareholders at the 2008 Annual Meeting of Shareholders on May 20, 2008. On October 1, 2009, in conjunction with the Metavante merger, we assumed the Metavante plan and certain vested and unvested options and restricted stock awards that the employees of Metavante held as of the merger date in the Metavante plan. In total, we assumed 12.2 million options and 0.6 million restricted stock awards. The compensation committee administers the Metavante plan and determines the type or types of awards to be made to each participant. Awards under the Metavante plan may include incentive stock options and non-statutory stock options, shares of restricted stock or restricted stock units, stock appreciation rights, performance stock and performance units. Under the Metavante plan, except as otherwise provided in an award agreement, if the participant’s employment is terminated by us other than for cause within two years after our change in control, all outstanding awards become immediately vested, except that performance based awards will vest at target levels.

 

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.

 

 

Michael D. Hayford is the Corporate Executive Vice President, Chief Financial Officer of FIS. Mr. Hayford joined FIS with the acquisition of Metavante Technologies, Inc. He served as Chief Operating Officer of Metavante Technologies, Inc. from 2006 to October 2009, as its President from November 2008 to October 2009, as its Chief Financial Officer and Treasurer from May 2001 to July 2007, as its Senior Executive Vice President from September 2004 to November 2008. Mr. Hayford is a director of the University of Wisconsin — La Crosse Foundation and West Bend Mutual Insurance.

 

Gary A. Norcross has served as Corporate Executive Vice President, Chief Operating Officer of FIS since October 2009 and served as President and Chief Operating Officer, Transaction Processing Services of FIS from November 2007 to September 2009. Prior to that, he served as Executive Vice President, Integrated Financial Solutions of FIS beginning in February 2006. Prior to that, he held the position of Senior Vice President of Integrated Financial Solutions of FIS since June 1996. He served FIS in various capacities since May 1988.

 

Brent B. Bickett has served as Corporate Executive Vice President, Corporate Finance of FIS since March 2010. He previously served as Corporate Executive Vice President, Strategic Planning of FIS from October 2009 to March 2010 and Executive Vice President, Strategic Planning of FIS from February 2006 to September 2009. Mr. Bickett joined FNF in January 1999, where he currently serves as Executive Vice President, Corporate Finance. Prior to joining FNF, Mr. Bickett was a member of the Investment Banking Division of Bear, Stearns and Co. Inc. from August 1990 until January 1999.

 

Michael L. Gravelle has served as Corporate Executive Vice President, Chief Legal Officer, and Corporate Secretary of FIS since January 2010 and served as Corporate Executive Vice President, Legal of FIS since October 2009. Prior to that Mr. Gravelle served as Executive Vice President, Legal of FIS beginning in June 2006 and served as Senior Vice President and General Counsel of FIS from February 2006 until May 2006. Prior to that, beginning in 2003, he served as Senior Vice President, General Counsel and Secretary of FIS. Mr. Gravelle joined 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, General Counsel and Corporate Secretary of FNF.

 

Michael P. Oates has served as Corporate Executive Vice President, Chief Human Resources Officer of FIS since October 2009 and Executive Vice President, Human Resources of FIS from February 2008 to September 2009. 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 beginning in 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 with PricewaterhouseCoopers LLP beginning in 1992.

 

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.

 

In this compensation discussion and analysis, we provide an overview of our named executive officers 2010 compensation, including the objectives of our compensation programs and the principles upon which our compensation program and decisions were based. In 2010, our named executive officers were:

 

 

Effective February 8, 2011, Mr. Foley changed his position from Executive Chairman to Chairman of the Board, which is a non-executive position. Termination of Mr. Foley’s employment agreement and other changes to his compensation relating to this change in position are discussed below.

 

Executive Summary

 

Company Overview

 

We are the world’s largest provider dedicated to banking and payments technologies. With a long history deeply rooted in the financial services sector, we serve more than 14,000 institutions in over 100 countries. Headquartered in Jacksonville, Florida, we employ more than 32,000 people worldwide and hold leadership positions in payment processing and banking solutions, providing software, services and outsourcing of the technology that drives financial institutions. We are a member of Standard & Poor’s 500^® Index and consistently hold a leading ranking in the annual FinTech 100 list.

 

We are proud to have achieved the financial targets we outlined for 2010. Revenue, earnings per share and free cash flow in 2010 all exceeded our expectations. Our strong financial performance in 2010 follows our significant growth over the past four years. As reported in our Annual Report on Form 10-K for the year ended December 31, 2010, our revenue and operating income for 2010 and the prior four years are as follows (in millions):

 

 

Our strong financial performance has resulted in significant value creation for our shareholders. In 2010 alone, our enterprise value (defined as market capitalization plus total debt minus total cash) increased by approximately $1.5 billion. During the two-year period ending December 31, 2010, we achieved a cumulative total return of 71.3%, compared with 45.5% for the S&P 500 Index and 37.2% for the S&P 500 Supercap Data Processing & Outsourced Services Index (“the peer group”). Our five-year cumulative total return for the period ended December 31, 2010 is 36.0% compared with a 12.0% return for the S&P 500 Index and a 10.5% return for the

peer group. These percentages assume that all dividends, as well as the value of LPS common stock received by our shareholders in July 2008, were reinvested in our common stock.

 

In addition to achieving strong shareholder returns on the value of our common stock, in 2010 we returned $2.5 billion in cash to our shareholders through a tender offer. Pursuant to the tender offer we purchased 86.2 million shares of our common stock, including 6.4 million shares underlying previously unexercised stock options, for an aggregate purchase price of $2.5 billion.

 

2010 Compensation Review

 

We structured our compensation programs in 2009 and 2010 with a particular focus on (i) achieving our business and financial objectives related to our merger with Metavante in October 2009, and (ii) responding to the difficult economic environment in which we and our customers operated in 2009 and 2010. These factors combined to make generation of new contract sales, growth in revenue and cost reduction, and the resulting growth in our operating income, particularly important and challenging.

 

The Metavante merger was a large, complex transaction that required integration of each company’s management teams and shared control following the merger. The Metavante merger also occurred against the backdrop of the global financial crisis in 2009, which had a particular effect on financial institutions. Accordingly, in August 2009, we established a broad-based extraordinary synergy cost savings incentive program. The program was intended to motivate and reward participants for their efforts toward achieving a targeted goal of $260 million in annualized synergy cost savings relating to the merger. For purposes of the incentives and as used in this proxy statement, the term “synergy cost savings” means the annualized expense savings from specific actions taken by management to produce real cost savings relating to the Metavante merger. Examples of cost saving actions include reductions in personnel, reductions in compensation and benefits, avoidance of future costs, elimination of redundant capital expenditures, reductions in marketing and travel costs, the combination of departments or cost centers, the implementation of more efficient processes and other cost savings relating to the combination of the two companies.

 

The Metavante synergy cost savings program was the cornerstone in our plan to capitalize on synergy opportunities presented by the Metavante merger. In formulating the terms of the program in 2009, we believed that it was in the company’s best interest to adopt a synergy incentive program that provided substantial cash rewards to our executive officers if they acted rapidly to take actions necessary to achieve exceptional synergy costs savings following the Metavante merger. Two principal factors guided our decision.

 

First, when we adopted the synergy incentive program in 2009, we wanted the program to be robust enough to ensure that synergy opportunities arising from the merger would be realized following the combination of two distinct businesses and management teams, which can make cost reductions especially challenging. In the Metavante merger, which was the largest merger in our history, the cultures, business processes, systems, offices, teams, and customer products and services of our company and Metavante were combined. The complexities of combining two companies in a difficult economic environment while minimizing any adverse client impact and distraction in the market made the merger synergy incentives critically important, not only to the success of the Metavante merger, but to our continued ability to improve earnings.

 

Second, the synergy incentive program was adopted against the backdrop of the global financial crisis in 2009, when our financial sector clients were facing distress and reducing their spending on information technology and other products and services. In adopting the program, we believed that achieving revenue growth in this economic environment would be challenging and that cost cutting would be particularly important to achieve gains in operating income and margin. We considered that the returns to our shareholders may be jeopardized if the synergy opportunities presented by the Metavante merger were not timely realized. Accordingly, we believed that a strong synergy incentive program was necessary to successfully realize the benefits of the Metavante merger in a difficult economic environment.

 

The completion of actions necessary to achieve synergy cost savings in excess of our targeted goal of $260 million has provided us with measurable and continuing financial benefits. Actions taken by management to drive synergy cost savings contributed to our realization of $801.1 million in operating income for the full year

2010, compared to $285.6 million for 2009. Our strong operating income following the Metavante merger had near term pay off by enabling us to borrow funds necessary for us to repurchase $2.5 billion of our common stock in August 2010. Over the long term, we believe that improvements to operating income, reduced capital expenditures and resulting lower depreciation and amortization arising from the synergy incentive program will contribute to long-term value by driving additional earnings and cash flow for FIS.

 

The synergy cost savings incentive program was structured to run through 2011, which we anticipated to be the period that would be needed to complete the actions necessary to achieve our cost savings goals. Because our executive management team took action so quickly, compensation that we anticipated might be earned over 2010 and 2011 was earned in 2010. Because we achieved our goals well before the planned December 2011 end to the incentive program, we capped and terminated the program effective December 31, 2010. The termination of the program capped the amount of incentive payments available under the program to our named executive officers, although we continue to take actions to identify additional synergy costs savings related to the Metavante merger.

 

In early 2010, in what we believed would be a challenging economic environment, we structured our 2010 annual cash incentive plan to focus our executive management team on revenue growth and increasing market share. Accordingly, one of the target performance measurements we used, which we refer to as “new sales contract value,” is based on the amount of new sales from contracts entered into with customers. We included this performance measurement to encourage and reward the sale of new products and services to our existing customers and the gaining of new customers, which are essential to sustained revenue and earnings growth over the long term.

 

Later, in July 2010, we structured our equity incentive grants in response to our tender offer to repurchase $2.5 billion of our common stock in August 2010. The tender offer involved a recapitalization of our debt, including incremental borrowings. Because we believed that our success in supporting the increased debt level would be dependent on our ability to generate sufficient levels of operating income, in July 2010 we granted to our named executive officers restricted stock tied to achievement of 2010 adjusted operating income. At the same time, we adopted a new program where our named executive officers may earn performance shares annually over a three-year period if we achieve target levels of adjusted operating income in 2010, 2011 and 2012. We view these measures as important factors supporting our debt recapitalization in 2010.

 

Our named executive officers’ pay in 2010, with payments under our annual incentive and synergy cost savings plans earned above target levels and over a shorter period than expected, reflects the success of our named executive officers in achieving our cost savings and sales generating objectives. The realization of these objectives in 2010 enabled us to deliver on our financial commitments and contributed to value creation for our shareholders.

 

Stemming from the success of the integration of Metavante, and the related synergy costs savings, we announced that Mr. Foley changed his position with us from Executive Chairman to Chairman of the Board, which is a non-executive position, effective February 8, 2011. In connection with the change in position, our employment agreement with Mr. Foley, which provided for a September 30, 2012 expiration date, was terminated. Mr. Foley will not receive a base salary, nor will he participate in any annual bonus plan, after the effective date of this change. He will receive an annual Chairman fee of $500,000 payable in quarterly installments. Mr. Foley may also participate in future cash or equity incentive plans at the discretion of the Compensation Committee.

 

Our Compensation Programs Support Our Company and Our Business Objectives

 

We believe that our executive compensation programs are structured in a manner that will drive continued growth and successful execution of our business objectives. Our executive compensation approach is designed to:

 

 

 

For 2010, our corporate performance measures were designed to incent our named executive officers to take actions necessary to achieve synergy cost savings related to our merger with Metavante and generate growth in revenue, new sales contract value, EBITDA, and free cash flow. These performance measures are key components of our overall business plan and are highly transparent, objectively determinable and discussed extensively with our board of directors.

 

We firmly believe our achievements in 2010 reflect the soundness of our compensation program and validate our approach to providing a simple, understandable, and direct link between our performance as a company and the compensation our named executive officers earn. We recognize, however, the need to remain flexible in our approach to compensation and to ensure that our compensation programs are aligned with the interests of our shareholders. Key aspects of those initiatives are provided below:

 

 

Significant Long-Term Stock Ownership Creates a Strong Tie to Our Shareholders

 

Our named executive officers maintain significant long-term investments in our company. Collectively, as reported in the table Security Ownership of Management beginning on page 14, they own 1,951,258 shares of our common stock and options to acquire an additional 10,262,215 shares of common stock. The fact that our executives hold such a large investment in our shares is part of our company culture and our compensation philosophy. Management’s sizable investment in our shares aligns their economic interests directly with the interests of our other shareholders.

 

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 these individuals to hold a multiple of their base salary (or annual retainer) in our common stock. In 2009, we revised the guidelines to increase the stock ownership requirements from five times base salary to ten times base salary for our Executive Chairman, from five times base salary to seven times base salary for our Chief Executive Officer and President and from two times base salary to five times base salary for our Chief Financial Officer and Chief Operating Officer. The guidelines call for the executive to reach the ownership multiple within five 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 met the stock ownership guidelines as of December 31, 2010. The compensation committee may consider the guidelines and the executive’s satisfaction of such guidelines in determining executive compensation.

 

Compensation Governance

 

The Compensation Committee of the Board of Directors takes a proactive role in governance. One member of the Compensation Committee, Mr. Neary, is a representative from our largest shareholder, and he provides a perspective which represents the interests of a large investor. We continually review our compensation program and make adjustments that we think are in the best interests of the company and our shareholders. As part of this process, we review compensation trends and consider what is thought to be current best practice, with the goal of improving our approach to executive compensation. Some of the improvements made and recent actions taken include the following:

 

 

 

Other compensation-related practices observed by the Company include the following:

 

 

Components of Total Compensation and Pay Mix

 

We compensate our executives primarily through a mix of base salary, annual cash incentives, and long-term equity-based incentives. We also maintain standard employee benefit plans for our employees and executive officers. Some executive officers, including our named executive officers, also enjoy limited additional benefits. The compensation earned by our named executive officers in 2010 consisted of the following:

 

 

As illustrated in the table below, a significant portion of each named executive officer’s total compensation is based on performance-based cash and stock incentives that are tied to our financial performance. The following table shows the allocation of 2010 Total Compensation reported in the Summary Compensation Table among the various components:

 

 

The allocation (pay mix) of our named executive officers’ compensation among the various compensation elements has generally been consistent from year to year. We have, however, changed the pay mix when appropriate for business reasons. Examples of changes to the pay mix include the synergy incentive plan we established in connection with the merger with Metavante in 2009 and the performance share awards we granted in 2010 to further focus our named executive officers on improving operating income over a forward looking three year period in response to our debt recapitalization in 2010. This allocation is not formulaic. Instead, it reflects our compensation committee’s business judgment regarding the best allocation of compensation based on a number of objective and subjective factors, including how other companies allocate compensation based on the marketplace data provided by our compensation committee’s consultant, Strategic Compensation Group, an assessment of 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.

 

Base Salary, Annual Cash Incentive, and Equity-Based Incentives

 

We believe that emphasizing at-risk, performance compensation, when coupled with the stock retention requirements we impose on shares of restricted stock and performance shares after vesting, and our significant stock ownership by executives, aligns our executives’ interests with the interests of our shareholders.

Base Salary

 

Although the emphasis of our compensation program is on performance-based, at-risk pay, we provide our named executive officers with base salaries that are intended to provide them with a level of assured, regularly-paid, cash compensation that is competitive and reasonable. Our compensation committee typically reviews salary levels annually as part of our performance review process, as well as in the event of promotions or other changes in the named executive officers’ positions or responsibilities. When establishing base salary levels, our compensation committee considers the peer compensation data provided by Strategic Compensation Group, as well as a number of qualitative factors, including the named executive officer’s experience, knowledge, skills, level of responsibility and performance.

 

Mr. Foley had the same base salary of $550,000 in 2009 and 2010. Effective with Mr. Foley’s change in position to Chairman of the Board effective February 8, 2011, he will no longer receive his annual base salary and instead will receive an annual Chairman fee of $500,000. Messrs. Martire’s and Hayford’s 2010 annual salaries were $1,000,000 and $625,000, respectively, which were unchanged from their post-merger levels in 2009. Mr. Norcross’ annual salary in 2010 was increased from $628,000 to $700,000 to bring his base salary within the 50th percentile of peer compensation data provided by Strategic Compensation Group. Mr. Bickett had a base salary of $337,500 in 2009, and his salary was raised to $368,500 in 2010 to bring his base salary within the 50th percentile of peer compensation data provided by Strategic Compensation Group.

 

Annual Performance-Based Cash Incentive

 

We generally award annual cash incentives based upon the achievement of pre-defined business and financial objectives that are specified in the first quarter of the year. The annual incentive program plays an important role in our approach to total compensation. It motivates employee/participants to work hard and proficiently toward improving the company’s performance for a fiscal year, and it requires that we achieve defined annual financial performance goals before participants become eligible for an incentive payout. We believe that achieving our annual business and financial objectives are important to executing our business strategy, strengthening our products and services, improving customer satisfaction and gaining new customers and delivering long term value to shareholders. In addition, the incentive program helps to attract and retain a highly qualified workforce and to maintain a market competitive compensation program.

 

In the first quarter of each fiscal year, the Committee approves the fiscal year performance objectives and a target incentive opportunity for each participant, as well as the potential incentive opportunity range for maximum and threshold performance. No annual incentive payments are payable to a named executive officer if the pre-established, minimum performance levels are not met, and payments are capped at the maximum performance payout level. In addition, the financial performance measures under the plan, other than new sales contract value, are derived from our annual financial statements (Form 10-K), which are subject to an audit by our independent registered public accounting firm, KPMG LLP.

 

2010 Performance Goals and Results:  For the named executive officers, the four performance measures for 2010 were revenue, new sales contract value, EBITDA, and free cash flow. These performance measures were based on overall corporate performance. The four performance measures are the most important measures in evaluating the 2010 financial performance of our business, and can have a significant impact on long-term stock price and the investing community’s expectations. The four measures, when combined with the strong focus on long-term shareholder return created by our equity-based incentives and significant stock ownership by the named executive officers, also provide a degree of checks and balances that requires our named executive officers to consider both short-term and long-term performance. All four measures are based on figures communicated to the investment community and serve as the basis for investor expectations and movements in our stock price. Consequently, the annual incentive performance targets are synchronized with shareholder expectations, desired increase in our stock price, our long-term financial plan, and our board of directors’ expectations. We intend for the incentive plan to be simple, reasonable and transparent, and to align with the interests of our shareholders.

As applicable, we adjust the revenue, new sales contract value, EBITDA, and free cash flow targets to eliminate certain financial impacts of new accounting pronouncements, restructuring expense, mergers, including non-recurring deal-related costs, acquisitions, and divestitures (including restructuring and integration charges, the impact of purchase accounting on deferred revenue, impairment charges, and transaction costs). We also adjust the performance targets to eliminate non-budgeted discontinued operations and the impact of changes in foreign currency from budgeted rates and current period acquisitions. We make these adjustments because we do not think our named executive officers’ compensation should be impacted by events that do not reflect the underlying operating performance of the business. In 2010, we made the following adjustments to the revenue, new sales contract value, EBITDA, and free cash flow targets:

 

 

We provide the annual incentives to our named executive officers under an 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 Internal Revenue Code.

 

No annual incentive payments are payable to a named executive officer if the pre-established, threshold performance levels are not met. If the target level performance goals are attained, the named executive officers would earn an annual incentive equal to their annual incentive target opportunity set forth in the next section and in the Grants of Plan-Based Awards table under the column Estimated Future Payouts Under Non-Equity Incentive Plan Awards. If the threshold performance goal is attained, 50% of the target opportunity would be earned, and if maximum performance goal is attained, 200% of the target opportunity would be earned for Messrs. Martire, Hayford, Norcross and Bickett and 300% of the target opportunity would be earned for Mr. Foley. For performance between the threshold and maximum level goals, the percentage of the target award earned would be interpolated. Payments are capped at the maximum performance payout level. The table below lists the performance goals and results for 2010.

 

 

Threshold performance levels were established to challenge our named executive officers and, at the same time, provide reasonable opportunities for achievement. Maximum performance levels were established to limit annual incentive awards — to avoid paying excessive cash incentive amounts — while encouraging performance beyond the target levels.

 

We believe that the performance measures used for our annual incentives, together with the equity-based incentives and high stock ownership by the named executive officers, provide a high level of objectivity and transparency and a good balance that focuses our named executive officers on achieving short-term goals while not encouraging behavior that could be detrimental to sustainable, long-term value. When establishing the performance measures and goals for the annual incentive awards, management and our compensation committee considered the following key factors:

 

 

 

Calculation of Incentive for 2010.  The table below lists our named executive officers and shows the ranges of possible payments under our annual incentive plan and the calculation of their 2010 incentive awards based on the 2010 performance results and combined payout factor shown in the table above. These threshold and maximum payout levels, as a percentage of the target award, were the same as was used in 2009.

 

 

 

 

The incentives earned by our named executive officers were approved by our compensation committee and are reflected in the summary compensation table under the heading Non-Equity Incentive Plan Compensation Earnings.

 

Clawback Policy.  In December 2010, our compensation committee adopted a policy to recover any incentive-based compensation from our executive officers if we are required to prepare an accounting restatement due to material noncompliance with financial reporting requirements, and the incentive-based compensation paid during the preceding three-year period would have been lower had the compensation been based on the restated financial results. In addition to this policy, our annual incentive plan gives our compensation committee complete discretion to reduce or eliminate annual incentives that have not yet been paid.

 

Long-Term Equity Incentives

 

For 2010, our approach to long-term equity incentives had three elements: (1) the grant of performance-based restricted stock that vests and is earned based on the achievement of adjusted operating income performance and required years of service, (2) the grant of performance shares that vest and are earned based on the achievement of adjusted operating income performance and required years of service, and (3) stock options, which vest based on required years of service. The stock options do not have performance-based vesting schedules, but we consider them to be inherently performance-based since they do not have realizable value unless our stock price rises after grant. Our stock price would need to rise by about 30% above a stock option’s exercise price for the target level of compensation to be earned under a stock option. As discussed earlier, we use stock ownership guidelines to complement our long-term equity incentives, so executives maintain a strong link to the interests of shareholders and to the movements in our stock price. In 2010, we used our shareholder approved Fidelity National Information Services, Inc. 2008 Omnibus Incentive Plan and the amended and restated Metavante 2007 Equity Incentive Plan, which we assumed in the Metavante merger, for long-term incentive awards. We refer to these plans as our stock plans.

 

We selected adjusted operating income as the performance measure for the performance shares and performance restricted stock because the level of operating income we achieve is a significant factor in our ability to support debt incurred as part of our tender offer in August 2010. We also believe adjusted operating income reflects our operating strength and efficiency and has a significant impact on long-term stock price and the investing community’s expectations. For purposes of the long term equity incentives, adjusted operating income means our operating income determined in accordance with GAAP as reported in our financial statements, plus depreciation and amortization, merger and acquisition-related costs, asset impairment charges, costs associated with the

leveraged recapitalization and tender offer announced by the Company on July 6, 2010, and excluding other non-GAAP adjustments.

 

In 2010 we allocated equity awards granted to our named executive officers among performance restricted stock, performance shares, and stock options. The factors considered by our compensation committee in determining equity awards included:

 

 

Our compensation committee did not assign precise weights to the different factors described above in awarding specific levels of equity awards, and instead made a subjective decision based on the totality of the factors.

 

Performance Restricted Stock.  We intend for our performance restricted stock awards to:

 

 

The 2010 restricted stock awards were granted in July of 2010 and vest based on meeting two conditions: (1) achievement of adjusted operating income (as defined above) of $1.550 billion for 2010 (with a starting point of July 1, 2010 using a base adjusted operating income for the period from January 1, 2010 to June 30, 2010 of $748.5 million), and (2) proportionate vesting each year over three years based on continued employment with us. Dividends are not paid on the restricted stock until the restricted stock vests. Also, we impose a post-vesting holding period requirement on the restricted shares held by our named executive officers, which requires that the named executive officer must hold 50% of the restricted shares that vest for a period of six months after the vesting date.

 

Performance Shares.  This is a new program where the named executive officers may earn shares of FIS stock annually over a three-year performance period if we achieve defined levels of adjusted operating income (as defined above) over the three-year period (2010 through 2012). This program was adopted in July of 2010 to focus our executive management team on generating operating income necessary to support debt incurred in connection with our tender in 2010. Shares will be earned only to the extent the adjusted operating income performance criteria are satisfied, and the named executive officer must remain employed by us through the date the performance shares are earned. We impose a post-vesting holding period requirement on the performance shares, which requires that the named executive officer must hold 50% of the performance shares that vest for a period of six months after the shares are earned and granted. Dividends are not paid on the performance shares. The program therefore serves to ensure that an executive’s pay under this program depends upon the extent to which we achieve our long-term financial objectives. The adjusted operating income goals for 2010 are shown in the table below. The vesting factor shown in the last column is the percentage of the 2010 portion of the performance shares that were earned.

 

Adjusted Operating Income (millions)

 

The three year adjusted operating income goals serve as the basis for investor expectations and movements in our stock price. The adjusted operating income goals are also synchronized with our long-term financial plan and are a significant factor in our ability to support debt incurred as part of our tender offer in 2010. To the extent earned, shares are issued after each year. No performance shares are earned for a particular year if target adjusted operating income is not attained for that year. If target adjusted operating income is attained in any year, the named executive officers would earn an award of performance shares equal to 50% of the performance shares available for vesting in that year. If the maximum adjusted operating income is attained in any year, the named executive officers would earn 100% of the performance shares available for vesting in that year. For performance between the target and maximum level goals, the percentage of performance shares vested would be interpolated. The number of performance shares earned is capped at the maximum performance level.

 

Of the total potential performance shares that may be earned for each named executive officer, one-third are available for vesting each calendar year 2010, 2011 and 2012 based on the level of operating income achieved in the calendar year within a range of a target and a maximum amount.

 

2010 Performance Shares

 

 

Stock Options.  We intend for our stock option awards to:

 

 

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. Many companies use a ten year term for their stock option grants, but our compensation committee determined that a shorter term was more fair and appropriate for our shareholders. We do not engage in or permit “backdating” or re-pricing of stock options, and our equity compensation plans prohibit these practices.

 

When we determine grant sizes, we attribute a target value to the options, based on the fair value of the options in accordance with GAAP. Our stock price must appreciate by about 30% over the option’s exercise price for the executive to earn the target compensation attributed to the options.

 

Further details concerning the equity-based awards made in 2010 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.

 

2009 — 2010 One-Time Compensation Elements In Support of the Metavante Merger

 

Metavante Merger Synergy Cost Savings Long-Term Incentive

 

In 2009, our compensation committee approved a long-term cash incentive program intended to encourage our executive management team to take actions between 2009 and 2011 necessary to achieve synergy cost savings in connection with the Metavante merger. The program was intended to motivate and reward participants for their efforts toward achieving a targeted goal of $260 million in annualized synergy cost savings relating to the merger. We believed that synergy cost savings would be critical to the success of the merger and to meeting shareholders’

and the investment community’s expectations related to the merger and to continued earnings growth following the merger. The Metavante merger was the largest merger in our history, and the complexities of combining two companies in a difficult economic environment while minimizing any adverse client impact and distraction in the market made the merger synergy incentives critically important, not only to the success of the Metavante merger, but to our continued ability to improve earnings.

 

When the program was adopted, the synergy cost savings were to be measured over a multi-year period, beginning July 1, 2009 and ending December 15, 2011. If earned, the incentives would be paid after each measurement period. The types of synergy costs savings for which incentives were paid under the program are described on page 19. The various cost savings initiatives were recorded and tracked in project plans developed by various corporate and operating units, which specify in detail the actions to be taken and the timing of those actions. We engaged a third party consulting firm to review the project plans, provide objective evaluation of the synergy costs savings to be realized upon execution, and validate the achievement of those actions when taken by examining supporting evidence and calculations. The third party consulting firm met regularly with the compensation committee in 2009 and 2010 to discuss its review and the validity of the synergy cost savings.

 

The compensation committee determined, and the third party consulting firm confirmed, that actions taken by management resulted in the $200 million initial threshold being met by December 31, 2009. For the initial period, synergy cost savings resulting from merger-related actions taken between January 1 and July 1, 2009 were considered, but they were capped at $80 million. After this initial measurement date, synergy cost savings were to be measured on a quarterly basis, on March 30, 2010, June 30, 2010, September 30, 2010, December 15, 2010, March 30, 2011, June 30, 2011, September 30, 2011 and December 15, 2011. The results for the relevant period were to be annualized and compared to the total cost savings goals to determine the amount earned for the period. The threshold cost savings goal, below which no incentive is earned, was $200 million. The target cost savings goal was $260 million. Between the threshold and target, incentive payments would be prorated. If synergy cost savings resulting from merger-related actions exceeded the $260 million target, 50% of the excess cost savings would be set aside in a pool to be allocated based on the ratio of the named executive officer’s target award to the total of all of the target awards.

 

If the synergy cost savings goals were achieved at the target level, the following synergy cost savings incentives would be earned by the named executive officers: Mr. Foley $7 million; Mr. Martire $2.5 million; Mr. Hayford $1.5 million; and Mr. Norcross $2 million. The target award amounts were selected by our compensation committee based on its judgment as to each named executive officer’s ability to affect the synergy cost savings. Mr. Bickett did not participate in the program because he was not expected to create significant synergies. If the synergy cost savings goals were achieved at the threshold level, half of the target amounts would be earned. The amount earned in each of the performance measurement periods was prorated. There is also a retention component to the awards, as participants were required to remain employed through the date of payment to receive a payment. Our compensation committee retained the right to reduce the incentive to be paid under the synergy program to an amount below the incentive otherwise earned pursuant to the terms of the program.

 

The amount of synergy cost savings achieved during each of the periods was reviewed and approved by our compensation committee and validated by a third party consulting firm. Our compensation committee could reduce the calculated amount of synergy cost savings if it were determined that such cost savings were not related to the merger.

 

Merger-related actions taken under the synergy plan through December 31, 2010 not only resulted in aggregate synergy cost savings exceeding our targeted synergy cost savings goal of $260 million, but also resulted in achievement of synergy cost savings much more quickly than we anticipated. The merger synergy cost savings incentive program was structured to run through 2011, which we anticipated to be the period that would be needed to take actions necessary to achieve our targeted cost savings goals. By achieving the synergy cost savings goals so quickly, compensation that we anticipated might be earned over two years, 2010 and 2011, was earned in 2010. In light of this accelerated achievement of the synergy cost savings, in December 2010, our compensation committee instituted a cap on the synergy cost savings and terminated the program one year ahead of schedule. Our compensation committee believes that the synergy cost savings were a key element to the success of the Metavante merger and improved earnings performance in a challenging economic environment where revenue growth was

particularly challenging. Synergy cost savings incentives earned by our named executive officers for 2010 can be found in the Summary Compensation Table in the column Non-Equity Incentive Plan Compensation.

 

Merger Performance & Retention Awards

 

On March 31, 2009, on the same date that we entered into a merger agreement with Metavante, Messrs. Martire and Hayford entered into merger retention letter agreements. The agreements provided that Messrs. Martire and Hayford would be eligible for a cash bonus incentive, if all of the following requirements were met:

 

 

These agreements provided that Messrs. Martire and Hayford would be eligible to receive a cash incentive bonus in the amount of $3.5 million and $3.0 million, respectively.

 

Both our board of directors and the Metavante board of directors agreed that retaining Mr. Martire as our CEO and President and Mr. Hayford as our Chief Financial Officer was very important to the success of the merger. The purpose of the cash bonus incentive was to (a) encourage Messrs. Martire and Hayford to remain employed with the post-merger company and ensure that they lead the post-merger company through the critical period of successfully combining the two multi-billion dollar, global entities, and (b) secure the long-term commitment of these two executives to live near our headquarters. These letter agreements were designed to have a strong retention element, impose a substantial commitment from these executives during the critical merger period, and require a home purchase or lease near Jacksonville, Florida.

 

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 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. In addition, our named executive officers generally participate in the same health and welfare plans as our other employees.

 

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 $16,500 in 2010). 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 Plan

 

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, bonuses and/or commissions on a pre-tax basis. None of the named executive officers elected to defer 2010 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 on an after-tax basis 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 one-third of the amount contributed during the quarter that is one year earlier than the quarter in which the matching contribution is made. For 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 one-half 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.

 

Other Benefits

 

We provide few special benefits to our named executive officers. In general, the benefits 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 2010, our named executive officers also received personal use of the corporate airplanes and Messrs. Foley and Bickett received assistance with financial planning. Messrs. Martire and Hayford also received relocation benefits. Our compensation committee regularly reviews the perquisites provided to our named executive officers. Further detail regarding executive perquisites in 2010 can be found in the Summary Compensation Table under the column All Other Compensation and the related footnote.

 

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. To attract and retain talented executives with the leadership abilities and skills necessary for building long-term shareholder value, motivate our executives to perform at a high level and reward outstanding achievement, our compensation committee sets total compensation at levels it determines to be competitive in our market.

 

When determining the overall compensation of our named executive officers, including base salaries and annual and long-term incentive amounts, our compensation committee considers a number of qualitative and quantitative factors it deems important, including:

 

 

 

In evaluating the compensation of our Chief Executive Officer’s direct reports, our compensation committee also considers the Chief Executive Officer’s recommendations to the committee. This includes the compensation of the other named executive officers, based on his review of their performance, job responsibilities, importance to our overall business strategy, and our compensation philosophy. Our Chief Executive Officer does not make a recommendation to the compensation committee regarding his own compensation. The compensation decisions are not formulaic, and the members of our compensation committee did not assign precise weights to the factors listed above. The compensation committee utilized their individual and collective business judgment to review, assess, and approve compensation for our named executive officers.

 

To support its review of our executive compensation and benefit programs for 2010, the compensation committee engaged Strategic Compensation Group, an independent compensation consultant, to conduct a marketplace review of the compensation we pay to our executive officers. The compensation committee has the sole authority to approve the independent compensation consultant’s fees and terms of engagement. Strategic Compensation Group gathered marketplace compensation data on total compensation, which consisted of annual salary, annual incentives, long-term incentives, executive benefits, executive ownership levels, overhang and dilution from the equity incentive plan, compensation levels as a percent of revenue, pay mix and other key statistics. The marketplace compensation data provided a point of reference for our compensation committee, but our compensation committee ultimately made compensation decisions based on all of the factors described above.

 

Strategic Compensation Group worked with our compensation committee in determining the marketplace compensation surveys that would be included in the marketplace compensation data. Strategic Compensation Group used three marketplace data sources: (1) a general executive compensation survey prepared by Towers Perrin, which contained data on over 400 companies; (2) a general executive compensation survey of over 3,000 companies with a specific focus on about 70 companies with revenues of between $4 billion and $8 billion, and (3) compensation information for the following group of 17 companies, which were selected because of their revenues, nature and complexity of operations, including international focus, and because they compete with us for business and executive talent. Also, these companies were selected because they fell within a revenue range that our compensation committee thought was comparable, and they were generally in the software and services industry. The group consisted of:

 

 

The revenue of these companies ranged from $1.9 billion to $10 billion, with a median revenue of $5.5 billion.

 

The peer group information in this discussion is not deemed filed or a part of this compensation discussion and analysis for certification purposes.

Post-Termination Compensation and Benefits

 

We have entered into employment agreements with each of our named executive officers; however, effective February 8, 2011, Mr. Foley’s employment agreement was terminated in connection with his change of position from Executive Chairman to the non-executive position of Chairman of the Board. 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.

 

Role of Compensation Committee, Compensation Consultant and Executive Officers

 

Our compensation committee is responsible for reviewing, approving and monitoring the compensation programs for our named executive officers, as well as our other officers. 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 for our executive officers.

 

To further the objectives of our compensation program, our compensation committee engaged Strategic Compensation Group, an independent compensation consultant, to conduct an annual review of our compensation programs for our named executive officers and other key executives and our board of directors. In addition, the consultant is engaged to propose compensation amounts with alternatives for the committee to consider. Strategic Compensation Group provided our compensation committee with relevant market data on compensation, including annual salary, annual incentives, long-term incentives, other benefits, total compensation and pay mix, and alternatives to consider when making compensation decisions. Our compensation committee did not limit the consultant’s discretion in selecting the surveys and peer group companies that are contained in this marketplace data. The consultant also assisted our compensation committee in its review of the risks to us of our compensation policies and practices for all employees. The committee may also give specific assignments to its consultant from time to time and may ask for the consultant’s assistance when it is considering a special or one-time compensation arrangement. In addition, members of our compensation committee have discussions with the consultant between meetings as specific questions arise. Strategic Compensation Group was selected by our compensation committee, reports directly to the committee, receives compensation only for services related to executive compensation issues, and neither it nor any affiliated company provides any other services to us.

 

Mr. Martire, in his role as President and Chief Executive Officer, provided input and made recommendations to the compensation committee regarding executive compensation levels. Mr. Martire also reviewed his compensation recommendations with our Executive Chairman, Mr. Foley. Messrs. Martire and Hayford provided input regarding the structure and targets of the performance goals used in our performance-based incentive programs, which we describe below. In addition, Michael Gravelle, our Corporate Secretary, coordinated with the committee’s chairman and the consultant in preparing the committee’s meeting agendas. Although our compensation committee considers the recommendations of our executive officers, our compensation committee exercises its discretion when making compensation decisions and may modify the executives’ recommendations. Our executive officers do not make recommendations to our compensation committee with respect to their own compensation.

 

Tax and Accounting Considerations

 

Our 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. Our compensation committee takes the deduction limitation under Section 162(m) into account when structuring and approving awards under our annual incentive plan and stock plans.

 

Compensation paid under our annual incentive plan and awards granted under our stock plans are generally intended to qualify as performance-based compensation. However, our compensation committee may approve compensation, such as time-vesting restricted stock awards, that will not meet these requirements.

Our compensation committee also considers accounting impact when structuring and approving awards. We account for stock-based payments, including stock option grants, in accordance with FASB ASC Topic 718, which governs the appropriate accounting treatment of stock-based payments under United States generally accepted accounting principles.

 

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

 

Richard N. Massey, Chairman
David K. Hunt
James Neary

 

Executive Compensation

 

The following table sets forth information regarding the cash and non-cash compensation earned by and awarded to our named executive officers.

 

Summary Compensation Table

 

 

 

 

 

Grants of Plan-Based Awards

 

 

 

Narrative Discussion for Summary Compensation Table and
Grants of Plan-Based Awards Table

 

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, 2010.

 

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. This employment agreement was terminated on February 8, 2011 in connection with his change of position from Executive Chairmen to the non-executive position of Chairman of the Board. Under the terms of the agreement, Mr. Foley was employed in an executive capacity as our Executive Chairman for an initial term of two years from the completion of the Metavante merger, with automatic one year extensions unless either party gave timely notice that the term should not be extended. The agreement provided for Mr. Foley to receive an annual base salary of $550,000 per year and to be eligible for an annual incentive with a target incentive opportunity equal to 250% of his annual base salary, with higher or lower amounts payable depending on performance relative to targeted results.

 

During the term of his employment, Mr. Foley generally was entitled to standard employee benefits provided to our other top executives, as well as eligibility to elect and purchase supplemental disability insurance, participation in our equity incentive plans and other benefits and incentive opportunities customarily made available to our other top executives. The agreement provided that Mr. Foley would participate in all FIS-sponsored incentive compensation plans, including the synergy cost savings plan associated with the integration of Metavante pursuant to which he would be eligible to receive a bonus in the amount of $7.0 million upon achieving at least $260,000,000 in synergy cost savings. The agreement further provided that Mr. Foley would be granted a retention equity award of $9.1 million in restricted stock units on the date of the completion of the Metavante merger that would vest six months following the completion of the merger and a cash retention award of $1.4 million, payable in a single lump sum coincident with our payment under our annual bonus plan no later than March 15, 2010. In addition, the agreement provided that Mr. Foley’s restricted shares of FIS common stock granted prior to the completion of the Metavante merger would vest upon the completion of the merger.

 

Mr. Foley’s employment agreement also contained 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.

 

Frank R. Martire

 

We entered into a three-year employment agreement with Mr. Martire, effective March 31, 2009 and commencing immediately following the Metavante merger, to serve as our President and 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. Martire’s minimum annual base salary is $1,000,000, with an annual bonus target equal to 200% of his annual base salary, with higher or lower amounts payable depending on performance relative to targeted results. Mr. Martire is entitled to supplemental disability insurance sufficient to provide at least 2/3 of his pre-disability base salary, and Mr. Martire and his eligible dependents are entitled to medical and other insurance coverage we provide to our other top executives as a group. Mr. Martire is also eligible to receive equity grants under our equity incentive plans, as determined by our compensation committee.

 

Mr. Martire’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.

Michael D. Hayford

 

We entered into a three-year employment agreement with Mr. Hayford, effective March 31, 2009 and commencing immediately following the Metavante merger, to serve as our Corporate Executive Vice President 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. Hayford’s minimum annual base salary is $625,000, with an annual bonus target equal to 150% of his annual base salary, with higher or lower amounts payable depending on performance relative to targeted results. Mr. Hayford is entitled to supplemental disability insurance sufficient to provide at least 2/3 of his pre-disability base salary, and Mr. Hayford and his eligible dependents are entitled to medical and other insurance coverage we provide to our other top executives as a group. Mr. Hayford is also eligible to receive equity grants under our equity incentive plans, as determined by our compensation committee.

 

Mr. Hayford’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 of Transaction Processing Services. Under the terms of that agreement, Mr. Norcross’s minimum annual base salary was $415,000, 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. We amended and restated, in its entirety, our employment agreement with Mr. Norcross, effective December 29, 2009. Under this new agreement, Mr. Norcross will serve as our Corporate Executive Vice President Chief Operating Officer for a term of three years 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 $650,000, with an annual 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 agreement further provides that he will not be required to report to any individual other than the chief executive officer who occupies that position on December 29, 2009, and a breach of that provision will be considered a material breach of the agreement. Mr. Norcross is also eligible to receive equity grants under our equity incentive plans, as determined by our compensation committee.

 

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.

 

Brent B. Bickett

 

We entered into a three-year employment agreement with Mr. Bickett, effective July 2, 2008, to serve as our Corporate Executive Vice President, Strategic Planning, 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. Bickett’s minimum annual base salary is $337,500, with an annual bonus target equal to 150% of his annual base salary, with higher or lower amounts payable depending on performance relative to targeted results. Mr. Bickett is entitled to supplemental disability insurance sufficient to provide at least 2/3 of his pre-disability base salary, and Mr. Bickett and his eligible dependents are entitled to medical and other insurance coverage we provide to our other top executives as a group. Mr. Bickett is also eligible to receive equity grants under our equity incentive plans, as determined by our compensation committee.

 

Mr. Bickett’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.

Annual Incentive Awards

 

In 2010, our compensation committee approved performance-based cash incentive award opportunities for our named executive officers. The performance-based cash incentive award opportunities are calculated by multiplying base salary by the product of the approved incentive percentage and the qualifying multiplier for each goal. More information about the annual incentive awards, including the targets and criteria for determining the amounts payable to our named executive officers, can be found in the “Compensation Discussion and Analysis” section.

 

Synergy Cost Savings Incentive Awards

 

In 2009, our compensation committee approved a cash incentive program intended to encourage synergy cost savings in connection with the Metavante merger. Pursuant to the terms of the awards, since synergy cost savings exceeded the established target, 50% of the excess cost savings were set aside in a pool that was allocated based on the ratio of the named executive officer’s target award to the total of all of the target awards. More information about the synergy cost savings incentive awards, including the targets and criteria for determining the amounts payable to our named executive officers, can be found in the “Compensation Discussion and Analysis” section.

 

Long-Term Equity Incentive Awards

 

In July 2010 and October 2010, our compensation committee approved grants of stock options, performance-based restricted stock and performance shares to our named executive officers. More information about these long term equity incentive awards can be found in the “Compensation Discussion and Analysis” section.

 

Salary and Bonus in Proportion to Total Compensation

 

The “Compensation Discussion and Analysis” section contains a table showing the proportion of our named executive officers’ salary to total compensation for 2010.

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, 2010:

 

Outstanding Equity Awards at Fiscal Year-End