UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K/A
(Amendment No. 1)
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For The Fiscal Year Ended June 30, 2007
Commission File Number: 0-26802
CheckFree Corporation
(Exact name of Registrant as specified in its charter)
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Delaware
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58-2360335
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(State or other jurisdiction of
incorporation or organization)
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(I.R.S. Employer
Identification No.)
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4411 East Jones Bridge Road
Norcross, Georgia 30092
(Address of principal executive offices, including zip code)
(678) 375-3000
(Registrants telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
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Title of Each Class
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Name of Exchange on Which Registered
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Common Stock, $.01 par value
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Nasdaq Global Select Market
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Preferred Stock Purchase Rights
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Nasdaq Global Select Market
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Securities registered pursuant to Section 12(g) of the Act: None.
Indicate by check mark if the Registrant is a well-known seasoned issuer, as defined in Rule
405 of the Securities Act. Yes
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No
o
Indicate by check mark if the registrant is not required to file reports pursuant to Section
13 or Section 15(d) of the Act. Yes
o
No
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Indicate by check mark whether the Registrant (1) has filed all reports required to be filed
by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or
for such shorter period that the Registrant was required to file such reports), and (2) has been
subject to the filing requirements for at least the past 90 days. Yes
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No
o
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation
S-K is not contained herein, and will not be contained, to the best of registrants knowledge, in
definitive proxy or information statements incorporated by reference in Part III of this Form 10-K
or any amendment to this Form 10-K.
þ
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated
filer, or a non-accelerated filer. See definition of accelerated filer and large accelerated
filer in Rule 12b-2 of the Exchange Act. (Check one):
Large accelerated filer
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Accelerated filer
o
Non-accelerated filer
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Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of
the Exchange Act). Yes
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No
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The aggregate market value of our common stock held by our non-affiliates was approximately
$3,273,837,417 on December 31, 2006.
There were 88,270,515 shares of our common stock outstanding on August 20, 2007.
Explanatory Note
This Amendment No. 1 on Form 10-K/A to our Annual Report on Form 10-K for the fiscal year
ended June 30, 2007, filed with the Securities and Exchange Commission (SEC) on August 24, 2007,
is being filed to provide the information required in Part III and to remove an agreement that is
no longer in effect as an exhibit in Item 15 of Part IV. This Form 10-K/A (Amendment No. 1) amends
and restates Items 10, 11, 12, 13 and 14 of Part III and Item 15 of Part IV of the Annual Report on
Form 10-K for the fiscal year ended June 30, 2007, in each case only as set forth herein, and no
other information in our Annual Report on Form 10-K for the fiscal year ended June 30, 2007 is
amended hereby. This Form 10-K/A (Amendment No. 1) does not reflect events occurring after August
24, 2007, nor does it modify or update disclosures included, except in Part III, Items 10, 11, 12,
13, and 14 and Part IV, Item 15.
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Part III
Item 10. Directors, Executive Officers and Corporate Governance.
Directors
The following table sets forth for each director, the persons name, age, and his or her
position with us. Each director was elected at an annual meeting of stockholders for a term that
will continue until our annual meeting of stockholders to be held in the year indicated below or
until the directors successor has been elected and qualified or until the directors death,
resignation or removal. There are no arrangements or understandings pursuant to which any person
has been appointed as a director of CheckFree.
Class I Directors (Terms Expire in 2008)
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Name
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Age
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Position
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William P. Boardman
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66
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Director
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James D. Dixon
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Director
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Class II Directors (Terms Expire in 2009)
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Name
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Age
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Position
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Mark A. Johnson
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54
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Vice Chairman and Director
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Eugene F. Quinn
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Director
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Class III Directors (Terms Expire in 2007)
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Name
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Age
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Position
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Peter J. Kight
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51
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Chairman and Chief Executive Officer
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Jeffrey M. Wilkins
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63
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Director
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C. Beth Cotner
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54
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Director
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Peter J. Kight
, our founder, has served as our Chairman and Chief Executive Officer since
December 1997. He also serves as Chairman and Chief Executive Officer of CheckFree Services
Corporation (a position he has held since 1981). Mr. Kight is also a director of CheckFree Services
Corporation. From 1997 to 1999, Mr. Kight served as President of CheckFree Corporation and, from
1981 to 1999, he served as President of CheckFree Services Corporation. Mr. Kight is a director of
Akamai Technologies, Inc., a publicly held company that distributes computing solutions and
services.
Mark A. Johnson
has served as a director since 1983. He also serves as a director and as Vice
Chairman of CheckFree Services Corporation, and as a director of OneVu Limited, our joint venture
company with Voca Limited in the United Kingdom. Mr. Johnson returned to serve as our Vice Chairman
in January 2003. Prior to that, he had served as our Vice Chairman from December 1997 to June 2000,
as Executive Vice President, Business Development of CheckFree Services Corporation from 1993 to
1997, as Treasurer of CheckFree Services Corporation from 1993 to 1996, as Senior Vice President of
CheckFree Services Corporation from 1991 to 1993, and as a Vice President of CheckFree Services
Corporation from 1982 to 1991. From June 2000 to January 2003, Mr. Johnson served as Chief
Executive Officer of e-RM Partners.
William P. Boardman
has served as a director since July 1996. Mr. Boardman was an officer of
Bank One Corporation from 1984 until March 2001, when he retired from his positions as Vice
Chairman and director of Bank One Corporation and Chairman and Chief Executive Officer of First USA
Bank. From September 2001 to November 2003, Mr. Boardman served as a Senior Advisor to Goldman
Sachs & Company. Mr. Boardman served
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as Chairman of Visa International, Inc. from 1996 until his retirement in June 2005, and
formerly served as a member of the board of directors of Visa International, Inc. and Visa U.S.A.
C. Beth Cotner
has served as a director since May 2007. From 2005 to 2006, Ms. Cotner served
as Interim CEO of Business Intelligence Advisors (BIA), where she continues to serve as a board
member. Prior to joining BIA, which provides innovative and independent research, analysis and
training solutions, Ms. Cotner was Managing Director and Chief Investment Officer of the Large Cap
Growth area of Putnam Investment Management, Boston, from 1995 to 2003. While at Putnam, she grew
Putnam Investors Fund from $1 billion to $14 billion, establishing the fund among the firms
flagships, and grew the firms large cap institutional business to $30 billion. Before joining
Putnam, she was Executive Vice President of Kemper Financial Services, Chicago, from 1985 to 1995.
In addition to her BIA board appointment, Ms. Cotner is a member of the Investment Analysts Society
in Boston and a member of the Endowment Board for the Oregon Shakespeare Festival.
James D. Dixon
has served as a director since August 2000. Mr. Dixon served as Executive of
Bankofamerica.com, a subsidiary of Bank of America, from February 2000 until his retirement in
January 2002. Mr. Dixon was Group Executive of Bank of America Technology and Operations, a
subsidiary of Bank of America, from September 1998 to February 2000. Mr. Dixon was President of
NationsBank Services, Inc., a subsidiary of NationsBank Corporation, from 1992 until the 1998
merger of NationsBank Corporation and Bank of America Corporation. Mr. Dixon serves on the board of
directors of the publicly held companies BroadVision, Inc., a developer of e-business
infrastructure Web applications, 724 Solutions Inc., a provider of mobile network technology, and
Rare Hospitality International, Inc., a restaurant operator and franchisor.
Eugene F. Quinn
has served as a director since 1994. Since May 1999, Mr. Quinn has served as
President of Confluence Partners, LLC, a private investment company. From March 1997 to April 1999,
Mr. Quinn served as Senior Vice President for Online and Interactive Services at MTV Networks, a
division of Viacom, Inc. From 1984 to 1997, Mr. Quinn served as a senior executive at Tribune
Company and its Chicago Tribune subsidiary.
Jeffrey M. Wilkins
has served as a director since 1990. Since September 1, 2006, Mr. Wilkins
has served as Chairman of Wilkins Associates, a business consulting firm. From May 2005 until
August 31, 2006, Mr. Wilkins served as the President and Chief Executive Officer of UMC Partners,
an independent, non-profit holding company for the commercialization of ideas and research
emanating from The Ohio State University Medical Center. From March 2004 to May 2005, Mr. Wilkins
served as the Executive Director of Technology Commercialization and Partnerships and as Interim
Chief Information Officer of The Ohio State University Medical Center. From January 2002 to March
2004, Mr. Wilkins was the Chairman of Wilkins Associates. From August 1989 to August 2003, Mr.
Wilkins served as Chairman of Metatec Corporation, and its successor Metatec International, Inc., a
publicly-held company that distributes information utilizing CD-ROM technology. From August 1989 to
January 2002, Mr. Wilkins also served Metatec Corporation and its successor as President and Chief
Executive Officer. Metatec filed a voluntary petition for reorganization under Chapter 11 of the
United States Bankruptcy Code in October 2003.
Executive Officers
In addition to Peter J. Kight and Mark A. Johnson, the following persons are our executive
officers:
Leigh Asher
, age 45, has served as our Senior Vice President, Corporate Marketing since
January 2003. Ms. Asher also serves as Senior Vice President, Corporate Marketing of CheckFree
Services Corporation. From August 2000 until December 2002, Ms. Asher served as our Vice President,
Biller Solutions Marketing. Prior to that, Ms. Asher served as our Vice President, Strategic
Communications from January 2000 until July 2000. From 1997 to 2000, Ms. Asher was Director,
Strategic Communications, of Per Se Technologies, Inc.
Laura E. Binion
, age 50, has served as our Executive Vice President and General Counsel since
July 2003 and Assistant Secretary since October 2003. Prior to that, she served as Senior Vice
President and General Counsel from November 2001 to July 2003. Ms. Binion also serves as Executive
Vice President, General Counsel and Secretary of CheckFree Services Corporation. From June 2000
until she joined our company, Ms. Binion served as Associate General Counsel for the southern
operations of Verizon Wireless. Ms. Binion served as Vice President and General Counsel of GTE
Wireless from November 1997 to June 2000 and as Associate General Counsel from March 1995 to
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November 1997. Prior to that, Ms. Binion was in private practice at Parker, Hudson, Rainer,
Dobbs & Kelly and at Kutak, Rock & Huie.
Jardon T. Bouska
, age 47, has served as our Executive Vice President since June 2007. Since
June 2007, Mr. Bouska has also served as Executive Vice President and General Manager, CheckFree
Electronic Biller Services unit, of CheckFree Services Corporation. From July 2001 until June
2007, Mr. Bouska served as our Senior Vice President and General Manager Operations and Biller
Business Unit of CheckFree Services Corporation.
Michael P. Gianoni
, age 46, has served as our Executive Vice President since June 2006. Mr.
Gianoni also serves as Executive Vice President and General Manager, CheckFree Investment Services
Division, of CheckFree Services Corporation. Prior to joining our company, Mr. Gianoni served as
the Senior Vice President of the E-Solutions division of DST Systems, Inc from 2004 to June 2006.
From 2001 to 2004, Mr. Gianoni served as the Senior Vice President of Client Services & Systems at
DST Systems, Inc.
Alex P. Hart
, age 45, has served as our Executive Vice President since June 2007. Since June
2007, Mr. Hart has also served as Executive Vice President and General Manager, CheckFree
Electronic Banking Services unit, of CheckFree Services Corporation. Prior to joining our company,
Mr. Hart served as President and a director of Corillian Corporation from January 2001 until our
acquisition of Corillian in May 2007, and Mr. Hart also served as Chief Executive Officer of
Corillian from October 2002 until May 2007. Mr. Hart served as Executive Vice President of
Corporate Development from April 2000 to January 2001 at Corillian, and from January 1999 to April
2000, he was Vice President of Business Development for TransPoint, a joint venture among
Microsoft, First Data Corporation and Citigroup
David E. Mangum
, age 41, has served as our Executive Vice President and Chief Financial
Officer since July 2000. Mr. Mangum also serves as a director and as Executive Vice President and
Chief Financial Officer of CheckFree Services Corporation. From September 1999 to June 2000, Mr.
Mangum served as our Senior Vice President, Finance and Accounting. From July 1998 to September
1999, he worked as Vice President, Finance and Administration, Managed Systems Division for
Sterling Commerce, Inc. Prior to that, Mr. Mangum worked as the Director of Finance for XcelleNet,
Inc. from February 1997 to July 1998. From 1993 to 1997, Mr. Mangum worked for Dun & Bradstreet
Software, most recently as Director of Finance.
Stephen E. Olsen
, age 47, has served as our Chief Operating Officer since November 2006. Since
July 2005, Mr. Olsen has also served as Chief Information Officer of CheckFree Services Corporation
and since November 2006, Mr. Olsen has also served as Chief Operating Officer of CheckFree Services
Corporation. From May 2001 to June 2005, Mr. Olsen served as Executive Vice President and General
Manager, CheckFree Electronic Commerce Division, of CheckFree Services Corporation. Mr. Olsen
served as our Senior Vice President from December 1997 to August 1999, as Executive Vice President,
Chief Information Officer of CheckFree Services Corporation from November 1999 to May 2001, as
Executive Vice President, EC Information Technology Operations of CheckFree Services Corporation
from August 1999 to November 1999, and as Senior Vice President and Chief Information Officer of
CheckFree Services Corporation from March 1997 to August 1999. From 1996 to 1997, Mr. Olsen served
as Vice President, Chief Information Officer of Geac Computer Corporation. From 1990 to 1996, Mr.
Olsen served as Vice President, Chief Information Officer of Dun & Bradstreet Software.
Officers are elected annually by the board of directors and serve at its discretion. There are
no family relationships among our directors and executive officers.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934, as amended (the Exchange Act),
requires our officers and directors, and greater than 10% stockholders, to file reports of
ownership and changes in ownership of our securities with the Securities and Exchange Commission.
Copies of the reports are required by SEC regulation to be furnished to us. Based on our review of
these reports and written representations from reporting persons, we believe that all reporting
persons complied with all filing requirements during the year ended June 30, 2007.
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Code of Business Conduct, Corporate Governance Guidelines and Committee Charters
We have adopted a code of business conduct that is applicable to all of our associates,
directors and officers, including our chief executive officer, chief financial officer and chief
accounting officer. Our code of business conduct, as well as our corporate governance guidelines,
and the charters of our Governance Committee, Compensation Committee and Audit Committee of the
board of directors, are available at the Corporate Governance section of the Investor Center page
on our corporate website at
www.checkfreecorp.com
. Stockholders may also request a free copy of the
code of business conduct, corporate governance guidelines or the committee charters from: CheckFree
Corporation, 4411 East Jones Bridge Road, Norcross, Georgia 30092, Attention: Tina Moore, Investor
Relations Manager, or by telephoning us at (678) 375-3000.
Audit Committee
We have an Audit Committee of the Board of Directors established in accordance with Section
3(a)(58)(A) of the Exchange Act. Messrs. Dixon (Chairman), Quinn, and Wilkins and Ms. Cotner serve
as members of our Audit Committee. The Audit Committee operates under a written charter. All
members of our Audit Committee meet (i) the independence requirements for audit committee
membership set forth in the Nasdaq Marketplace Rules (Nasdaq Rules) and the rules of the
Securities and Exchange Commission (the SEC Rules), and (ii) the composition requirements for
audit committee membership set forth in the Nasdaq Rules. The board of directors has determined
that Mr. Dixon is an audit committee financial expert as that term is defined in the SEC Rules.
Item 11. Executive Compensation.
Compensation Discussion and Analysis
Overview
The Compensation Committee of our Board of Directors (the Committee) has the authority and
responsibility to establish, determine and administer:
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CheckFrees officer and employee compensation policies;
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the salaries of CheckFrees executive officers;
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the formula for determining cash incentive plan awards, including performance
objectives, to CheckFrees executive officers under the CheckFree Corporation 2008
Incentive Compensation Plan, and any predecessor or successor plan thereto, and to
CheckFrees broader employee base under our other cash incentive programs; and
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the grants of equity awards to CheckFrees executive officers and other key employees,
including performance objectives associated with those awards, under the CheckFree
Corporation Amended and Restated 2002 Stock Incentive Plan and any successor plan thereto.
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The Committee consists solely of non-employee directors, each of whom is also independent as
defined by the Nasdaq Rules. The following discussion describes:
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the objectives of our executive compensation program;
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the elements of compensation provided to our executive officers; and
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the factors considered in determining the levels, elements and mix of compensation
provided to our executive officers.
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Objectives of Our Compensation Programs
The Committee has approved an executive compensation program designed to:
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attract, motivate and retain executives who are able to grow the company while achieving
targeted profitability levels;
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provide the opportunity for compensation commensurate with the level of performance
achieved relative to the industry and our own internal goals; and
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align the interests of the executives with those of our stockholders by providing a
long-term, equity-based component.
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These objectives are in line with the Committees broader expectations for, and philosophy
regarding, our compensation for much of our employee base. Many of our employees participate in one
of our annual cash incentive programs based on overall company and/or business unit performance
against our internal targeted goals. The better our results are against the targeted performance
objectives for the year, the greater the amount the employee will receive compared to his or her
targeted cash incentive award. The Committee believes that employees are motivated to help us
achieve our goals when a portion of their compensation is tied to our performance. In addition,
our key employees, as determined by the Committee, receive equity-based awards to align their
interests with those of our stockholders as they lead the operations of our company. These
long-term equity awards also help us retain talented individuals in our leadership positions.
Process for Determining Executive Compensation and Pay Philosophy
The Committee has the authority and responsibility to establish, determine and administer our
compensation policies and plans for our executive officers, including our named executive officers
identified in this Form 10-K/A. The Committees charter allows it to delegate any of its
responsibilities to one or more subcommittees established by the Committee; however, to date, the
Committee has not made any such delegation.
In fulfilling its responsibilities regarding executive compensation, the Committee requested
the advice of or assistance from certain members of management and our Governance Committee, but
retained ultimate decision-making authority for all elements of executive officer compensation. In
fiscal 2004, we first engaged the services of Pearl Meyer & Partners, a compensation consulting
practice, to assist us in reviewing our compensation program for executive officers and making
recommendations to the Committee for approval. We initially implemented the combination of current
compensation elements, discussed further below, in fiscal year 2005, and we engaged Pearl Meyer in
later years to update the comparative compensation information for our executive officers. In
April 2006, Pearl Meyer again evaluated the compensation of our executive officers versus the
competitive market in light of any new market trends or changes, and updated its review from fiscal
2004 based on our executive pay philosophy developed at the time. The comparison data received from
Pearl Meyer toward the end of fiscal 2006 came from published and private pay survey sources for
positions in the technology and service industries most comparable to the positions of our
executive officers. Pearl Meyer analyzed pay survey compensation data to determine competitive
levels for the following pay components: base salary, target annual cash incentive as a percentage
of salary, total cash compensation (salary plus target annual cash incentive), annualized expected
value of long-term incentives and total direct compensation. Pearl Meyer compared then-current
fiscal 2006 target compensation for our executive officers with projected fiscal year 2007 market
data, and the information was developed using single regression analysis and tabular data, based on
the projected fiscal year 2007 revenue responsibilities of each position.
Our executive pay philosophy, beginning with fiscal 2005, has been to move toward the
75
th
percentile over time for total direct compensation. Our philosophy targets the
median for base salaries and the 75
th
percentile for total cash compensation compared to
the competitive market. However, the Committee does not view percentile targets for compensation
as specific objectives we must reach but rather as management and Committee tools that provide
perspective on compensation decisions. Market compensation data is considered along with other
data points such as what tasks are required of the executive and what the marketplace is for
equivalent positions. Although we have increased compensation each year to approach our goal, the
Committee has exercised its judgment in determining whether we are paying our executive officers
competitively and at appropriate levels for our company and our performance. Based on competitive
pay analysis data available with respect to our executive officers, at the beginning of fiscal
2007, we were at 94% of the 50
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percentile for base salaries, 88% of the
75
th
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percentile for total cash compensation (base salary plus annual target cash incentive) and 85%
of the 75
th
percentile for total direct compensation, all of which were within a
competitive range as analyzed by Pearl Meyer. The Committee has generally chosen to raise the
level of total compensation paid to our executive officers over time by increasing the number of
long-term equity-based awards rather than approving significant increases in base salaries. This
better aligns our executive officers interests with those of our stockholders and the long-term
growth of our company.
Each year, our Chairman and Chief Executive Officer typically prepares an annual performance
review for each of our other named executive officers and consults the most recent market
compensation information prepared by the compensation consultant. He discusses this information
with the Committee and provides his recommendation for the appropriate base salary and targeted
cash and equity incentive compensation amount for the upcoming fiscal year. Our Chairman and
Chief Executive Officer does not participate in any deliberations or voting by the Committee on the
amount or form of his own compensation and is not present at the vote on compensation for our other
executive officers. The Committee obtains the results of a formal, 360-degree performance
evaluation conducted by our Governance Committee and market compensation data from the compensation
consultant as input for determining our Chairman and Chief Executive Officers compensation. In
addition, the Committee meets in joint session with the Governance Committee at the beginning of
the fiscal year to review the performance of our Chairman and Chief Executive Officer which also
contributes to the determination of his compensation package. In determining the performance-based
awards under our cash incentive and equity incentive compensation plans, our Chief Financial
Officer evaluates the relative risks inherent in the annual budget for the company as a whole and
each of our operating divisions for the fiscal year and recommends to the Committee performance
objectives for our executive officers and all other employee participants in our other cash and
equity incentive programs.
From a procedural standpoint, the Committee determined base salary, target annual cash
incentive compensation amounts and related performance objectives, and annual grants of equity
awards for fiscal 2007 at its July 2006 meeting. At its July 2007 meeting, the Committee certified
performance results for the recently completed 2007 fiscal year and certified payments of cash
incentive compensation and vesting of performance accelerated restricted stock.
Elements of Executive Compensation
For the fiscal year ended June 30, 2007, our executive compensation program included the
following types of compensation for our named executive officers included in the compensation
tables below:
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base salary;
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annual cash incentives based on the achievement of fiscal year performance objectives;
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stock options; and
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shares of performance accelerated restricted stock, or PARS.
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Our compensation program is designed to meet our objectives by granting (1) cash
incentive awards based on achieving our short-term, fiscal year performance objectives and (2)
equity plan awards that vest ratably over three years in the case of stock options or vest in three
years or five years in the case of PARS depending on whether certain long-term, three-year
cumulative performance targets are achieved.
For fiscal 2007, the Committee decided that most of the compensation awarded to each named
executive officer should be performance- or service-based. When our performance results do not
meet our internal performance targets, the value of incentive-based awards to our executive
officers will be affected. To address our short-term goals, our named executive officers have the
potential to be rewarded for their fiscal year performance under our cash incentive program, and to
address our long-term goals, we believe our equity awards align their interests with those of our
stockholders and the future growth of our company. When looking at the four elements of
compensation outlined above, and assuming the achievement of target performance objectives,
approximately 30-38% of the compensation awarded to our named executive officers for fiscal 2007,
other than Mr. Kight, was base salary with the remainder of their awarded compensation tied to
performance and/or long-term service with us.
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Although the total awarded compensation for Mr. Kight is greater than for the other named
executive officers, less than 20% of his awarded compensation, when looking at the four elements
above and assuming the achievement of target performance objectives, constituted base salary. Mr.
Kights base salary amount has remained constant since fiscal 2004 because the Committee believes
that any increases in his compensation, as the management leader of our company, should primarily
be in the form of long-term, equity-based awards. As a result, for fiscal 2007, a greater
proportion of his awarded compensation was allocated to long-term equity awards when compared to
our other named executive officers.
Base Salary
The Committee determined fiscal 2007 named executive officer base salaries, including for our
Chairman and Chief Executive Officer, based on then-current compensation relative to the
competitive market, the Committees subjective perception of individual performance, and the
executive officers contribution to our overall performance, rather than on specific criteria. The
Committee also took into account the views and recommendations of our Chairman and Chief Executive
Officer in determining base salary amounts for executive officers other than himself and of our
Governance Committee in determining base salary amounts for our Chairman and Chief Executive
Officer. Each named executive officers base salary is designed to recognize an individuals effort
and contribution in light of the responsibilities of his position and his experience. Mr. Kights
base salary has remained unchanged since fiscal 2004, and increases in his compensation have
primarily been in the form of long-term equity awards. For fiscal 2007, the Committee approved 4%
base salary increases for our other named executive officers.
Annual Cash Incentives
During the fiscal year ended June 30, 2007, our named executive officers participated in our
2003 Incentive Compensation Plan, or 2003 plan, which was our annual management cash incentive
program for executive officers. The 2003 plan provided an opportunity for named executive
officers, including the Chairman and Chief Executive Officer, to earn an annual cash incentive
award based on achievement of full fiscal year performance objectives approved by the Committee at
the beginning of each fiscal year. These objectives were based on the fiscal 2007 budget goals for
our company presented by our Chief Financial Officer and approved by our board of directors. The
purpose of the 2003 plan was to provide an incentive for achievement of our short-term financial
objectives. For fiscal 2007, the named executive officer must have been employed by us on the last
day of the plan period, or June 30, 2007, to remain eligible for payment from the 2003 plan.
The Committee established fiscal 2007 performance objectives for the cash incentive awards
under the 2003 plan based on two specific types of company and/or business unit performance
components: revenue (excluding the impact of previously issued warrants) and operating income. We
used these same performance components in our different cash incentive programs available to other
employees, and the targeted performance objectives for these components at the total company and/or
business unit level were the same for our named executive officers as they were for other
participating employees. The Committee, with input from the Chairman and Chief Executive Officer,
had the ability to make judgments as to the inclusion or exclusion of any of the following when
determining performance outcomes under the cash incentive plan following the end of the fiscal
year:
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extraordinary gains or losses;
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mergers and acquisitions;
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the effects of changes in accounting principles;
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changes in tax regulations; and
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any other unusual charges or gains that impact financial performance, such as charges
related to warrants issued to third parties.
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The Committee made the same adjustments in determining performance outcomes for our named executive
officers as it did for any other employee-participant in our cash incentive programs. The
Committee believes that adjustments may be warranted to maintain effective and dedicated leadership
in the organization when certain events
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during the fiscal year that do not relate to the named executive officers performance or that are
not pertinent to the day-to-day operational performance of the company and/or business unit, would
significantly affect the fiscal year performance outcomes.
Under the 2003 plan, targeted annual cash incentive awards were calculated as a percentage of
base salary. The cash incentive amount paid was based on percentage achievement of the targeted
performance objective for a component, as may be adjusted by the Committee. If the minimum
performance objective for a specific plan component was not met, the named executive officer would
not have received a payment for the portion of the incentive award attributable to that component.
If results for a component were greater than the minimum objective but less than the target,
results would have been extrapolated to determine the prorated cash incentive payment for that
component. If results for a component exceeded the target performance objective, results would have
been similarly extrapolated to determine the cash incentive payment for that component. Each named
executive officer was eligible to receive 200% or more of the target award amount attributable to a
component; however, in no event could an annual award paid exceed $2 million in the aggregate.
Shortly after the 2007 fiscal year-end, the Committee met in July 2007 to certify the achievement
of performance objectives for each component, determine what adjustment, if any, may be warranted
and determine the actual amounts of cash incentive awards to be paid.
The Committee established target cash incentive award amounts for the fiscal year ended June
30, 2007 as a percentage of base salary, and the distribution between company and business unit
specific performance objectives, for each of our named executive officers as follows:
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|
|
|
|
|
Fiscal 2007 Target
|
|
|
|
|
|
|
Cash Incentive
|
|
|
|
|
|
|
Award
|
|
% Based on Total
|
|
% Based on Business
|
Name and Position
|
|
(as a % of salary)
|
|
Company Objectives
|
|
Unit Objectives
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Peter J. Kight
Chairman and Chief Executive Officer
|
|
|
115
|
%
|
|
|
100
|
%
|
|
|
0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
David E. Mangum
Executive Vice President and
Chief Financial Officer
|
|
|
70
|
%
|
|
|
100
|
%
|
|
|
0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stephen E. Olsen
Chief Operating Officer
|
|
|
70
|
%
|
|
|
100
|
%
|
|
|
0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mark A. Johnson
Vice Chairman
|
|
|
50
|
%
|
|
|
100
|
%
|
|
|
0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Randal A. McCoy
Former Executive Vice President,
General Manager Software
|
|
|
70
|
%
|
|
|
40
|
%
|
|
|
60
|
%
|
Each type of performance component carries equal weight when looking at company and/or business
unit performance. For example, if a named executive officers target amount was based 40% on total
company objectives and 60% on business unit objectives, the applicable performance components were
20% total company revenue, 20% total company operating income, 30% business unit revenue and 30%
business unit operating income. Assume the named executive officers target cash incentive amount
was 70% of base salary. If the target performance objective was reached for each of the four
components during the fiscal year, as determined by the Committee, he received a cash incentive
amount equal to 70% of base salary. If the actual results for a component were less than or
greater than the target performance objective for that component, he received a prorated cash
incentive amount allocable to the component so long as results were greater than the minimum
performance objective.
The target performance objectives established by the Committee under the 2003 plan for fiscal
2007 were designed to reflect the boards and managements expectations for the year set out in our
annual budget, and a range of objectives allowed for payment awards below, at or above the targeted
cash award depending on performance. If
11
the boards and managements operating expectations change during a fiscal year, the Committee
may revise the target performance objectives established at the beginning of the fiscal year to
correspond with the revised expectations. On November 2, 2006, the Committee approved
corresponding amendments to our fiscal 2007 target performance objectives under the 2003 plan for
one of our business units and overall company based on our boards approval on that date of a
revised operating budget for the 2007 fiscal year. The amendments reduced the target performance
objectives for revenue (excluding the impact of previously issued warrants) and operating income at
that business unit and, as a result, at the overall company level by less than 3% each. These
adjustments to the target performance objectives applied not only to our named executive officers
but all employees participating in our cash incentive programs, and aligned our short-term
incentive program with the increased visibility gained by our board and management during the
fiscal year.
As noted above, after the end of the fiscal year, the Committee certified the achievement of
performance objectives for each component and determined what adjustment, if any, was warranted
prior to deciding the actual amounts of cash incentive awards to be paid. For fiscal 2007, the
Committee decided that our acquisitions of Carreker Corporation, Corillian Corporation and Upstream
Technologies LLC should not be taken into account when determining results given that all three
closed during our fourth fiscal quarter. In addition, when determining performance outcomes for
our named executive officers, the Committee considered the fact that our international operations
have the most significant impact on our Software Division. International revenue and operating
income goals were established in U.S. dollars based on foreign exchange rates in place during our
budgeting process at the beginning of the 2007 fiscal year. Fluctuating foreign exchange rates
throughout the 2007 fiscal year favorably impacted the Software Divisions results. The Committee
adjusted the actual revenue and operating income results of the Software Division to eliminate the
gains achieved solely through fluctuations in foreign exchange rates. The Committee did not
approve any further adjustments for the named executive officers when determining the amount of
cash incentive awards to be paid for fiscal 2007. The total cash incentive award for fiscal 2007
performance under the 2003 plan for each named executive officer as a percentage of his annual
target award amount was approximately 62% for Mr. Kight, 62% for Mr. Mangum, 62% for Mr. Olsen, 62%
for Mr. Johnson and 66% for Mr. McCoy. By way of example, Mr. Kight received 62% of his targeted
cash incentive award of 115% of base salary, or $370,760. The cash incentive awards were paid to
Messrs. Kight, Mangum, Olsen and Johnson at this level because we achieved 94% of the total
companys revenue target and 93% of the total companys operating income target for the fiscal
year. The cash incentive award was paid to Mr. McCoy at this level because, in addition to the
total company achievement levels, the Software Division achieved 95% of its revenue target and 87%
of its operating income target for the fiscal year. By comparison, in fiscal 2006, the total cash
incentive award under the 2003 plan for each named executive officer as a percentage of his annual
target award amount was approximately 103% for Mr. Kight, 103% for Mr. Mangum, 103% for Mr. Olsen,
103% for Mr. Johnson and 108% for Mr. McCoy, which reflected revenue and operating income results
above target for that year.
Following the end of our 2007 fiscal year, the Committee and our board of directors adopted
our 2008 Incentive Compensation Plan, or 2008 plan. The Committee established fiscal 2008
performance objectives for the cash incentive awards under the 2008 plan in a similar manner
described above for fiscal 2007, including revenue and operating income as the two types of
performance components. The 2008 plan is substantially similar to the 2003 plan except that the
2008 plan requires that the named executive officer be employed by us on the day we make payment
under the plan, rather than the last day of the fiscal year, to be eligible to receive a cash
incentive amount.
Long-Term Equity-Based Incentive Plans
For fiscal 2007, our named executive officers received equity-based compensation in the form
of stock options and performance accelerated restricted stock (PARS) under our Amended and
Restated 2002 Stock Incentive Plan, or the 2002 plan. Long-term equity awards are designed as an
incentive for our named executive officers to manage the business from the perspective of our
stockholders, thereby providing a link between compensation and stockholder return through stock
price appreciation. Upon their appointment, new executive officers typically receive an award of
time vesting restricted stock and stock options. The number of shares of restricted stock and the
number of stock options is determined on an individual basis by the Committee at the time of an
executive officers appointment. None of our named executive officers was appointed to his
position during fiscal year 2007, and therefore, they only received the annual equity grants
described below.
12
The fiscal 2007 equity grants were designed to reward the achievement of above targeted
long-term financial performance and were comprised of 60% stock options and 40% PARS. The
combination of stock options and PARS was designed as an incentive to the named executive officers
commensurate with greater stockholder return. If our stock price declines over the long-term to a
point lower than the exercise price of an awarded stock option, the greater allocation to stock
options moderates the total value of equity-based compensation to our named executive officers as a
result of this decline in stockholder return. At the same time, the PARS awards to our named
executive officers would continue to have value in the event of a decline in our stock price over
the long-term and continue to carry out the objectives of PARS awards described below. The
Committee determined the dollar value of stock options and PARS awards granted for fiscal 2007
based on these criteria.
Performance Accelerated Restricted Stock
The objectives for the PARS component of long-term incentive compensation are to:
|
|
|
focus executives on building long-term strategic and financial results in support of our
long-term growth and performance goals and link long-term compensation to appropriate
stockholder return;
|
|
|
|
|
provide a vehicle to address executive retention; and
|
|
|
|
|
allow our executive officers to comply with our share ownership guidelines.
|
PARS shares will vest upon the earliest to occur of:
|
|
|
the attainment of the cumulative financial performance objectives at the end of a
three-year performance period;
|
|
|
|
|
the completion of five years of employment after the date of grant; or
|
|
|
|
|
a defined change in control of the company.
|
During its July 2006 meeting at the beginning of the 2007 fiscal year, the Committee
determined the dollar value of PARS awards for each named executive officer as of the effective
grant date. The annual PARS awards for fiscal 2007 were granted effective as of the third trading
day after we publicly announced our financial results for the fourth quarter of and fiscal 2006.
The Committee believed that material information regarding our last completed fourth quarter and
fiscal year should be available before the number of awarded PARS shares was determined. At the
time of the annual PARS awards for fiscal 2007, our 2002 plan defined the fair market value of a
share as the closing price of our common stock on the last trading day before the effective grant
date. As a result, the number of PARS shares granted to a named executive officer for fiscal 2007
was determined by dividing (1) the dollar value of the award set by the Committee in July by (2)
the closing price of our common stock on the last trading day immediately prior to the effective
grant date.
With respect to the three-year performance period for PARS, the following chart identifies our
performance measures and the relative weight applied to each:
|
|
|
|
|
|
|
Percentage of PARS Award
|
Measure
|
|
Attributable to Measure
|
Cumulative three-year free cash flow
|
|
|
50
|
%
|
Cumulative three-year revenue (excluding the
impact of previously issued warrants)
|
|
|
25
|
%
|
Cumulative
three-year underlying earnings per share
|
|
|
25
|
%
|
We define free cash flow as net cash provided by operating activities, exclusive of the net change
in settlement accounts and less capital expenditures, less the impact of an operating account
conversion plus reimbursements from our credit facility for the construction of up to two data
centers. We define underlying earnings per share as earnings per share calculated in accordance
with generally accepted accounting principles, including a deferred
13
revenue adjustment related to acquisitions and excluding the amortization of acquisition-related
intangible assets, the impact of previously issued warrants, the SFAS 123(R) impact of options
issued prior to July 1, 2004, acquisition and integration costs and the related combined tax
effects. All performance measures relate to overall company performance in each of the three
fiscal years making up the performance period, and all employees who receive awards of PARS shares
from the Committee are subject to the same performance measures and objectives during a performance
period.
The performance objectives for each fiscal year within the performance period are determined
shortly after the beginning of that fiscal year, upon completion of our budget for the year in
question. Each measure is evaluated independently. Therefore, at the end of the three-year
performance period, the Committee performs an independent evaluation on whether the PARS shares
attributable to each measure are eligible for accelerated vesting. During the three-year
performance period, a single year shortfall against our budget in any measure may be overcome by
greater than targeted performance in the other two years. Additionally, there is a layering
effect on targeted performance over time as each years performance will become a component of the
cumulative three-year measure for three separate performance periods. Therefore, a significant
shortfall in any measure in any given year will negatively affect three separate annual awards of
PARS.
If the performance objectives for the three-year performance period are not achieved, the
Committee has determined that it is appropriate for the shares of PARS to vest upon the fifth year
anniversary of the grant date. The ultimate five-year vesting of PARS shares serves as a retention
tool to recognize our named executive officers performance over a longer term compared to the
three-year performance period for acceleration.
The Committee certifies the vesting of the PARS shares at its annual July meeting, based on
the attainment of the three-year performance objectives or the passage of five years. At the end
of a three-year performance period, the Committee has the ability to make judgments as to the
inclusion or exclusion of any of the following when determining performance outcomes under the 2002
plan:
|
|
|
extraordinary gains or losses;
|
|
|
|
|
mergers and acquisitions;
|
|
|
|
|
the effects of any changes in accounting principles;
|
|
|
|
|
changes in tax regulations; and
|
|
|
|
|
any other unusual charges or gains that impact financial performance, such as charges
associated with previously issued warrants.
|
The Committee makes the same adjustments in determining performance outcomes for our executive
officers as it does for any other employee who was granted PARS shares by the Committee under our
2002 plan. The Committee believes that adjustments may be warranted to maintain effective and
dedicated leadership in the organization when certain events during the three-year performance
period that do not relate to the named executive officers performance or that are not pertinent to
the day-to-day operational performance of the company and/or business unit, would significantly
affect the three-year performance outcomes. For the three-year performance period ended June 30,
2007, 100% of PARS shares granted at the beginning of fiscal 2005 to each named executive officer
vested on an accelerated basis based on the achievement of performance objectives. The Committee
determined that we exceeded our cumulative three-year free cash flow and underlying earnings per
share performance objectives and achieved approximately 98% of our cumulative three-year revenue
performance objective. In consideration of the cumulative weighted average attainment of all three
performance objectives, which furthered our objective of long-term growth and performance, the
Committee accelerated vesting of 100% of the PARS shares granted versus 75% as calculated on a
non-adjusted basis. This applied to all eligible associates who received grants of PARS shares
under the 2002 plan at the beginning of fiscal year 2005, including the named executive officers.
14
Stock Options
The objective of stock options is to motivate the achievement of stockholder return to match
the interests of stockholders. The options have a ten year life and vest ratably over a three-year
period. To the extent possible under applicable tax laws, grants are made as incentive stock
options, which may have certain tax benefits for the holder, followed by nonqualified options for
any remainder.
The Committee approved the annual award of stock options to our named executive officers at
the beginning of fiscal 2007 during its July 2006 meeting. The Committee determined the
Black-Scholes dollar value of stock option awards for each named executive officer as of the
effective grant date. For fiscal 2007, annual stock option awards were granted effective as of the
third trading day after we publicly announced our financial results for the fourth quarter of and
fiscal 2006. The Committee believed that material information regarding our last completed fourth
quarter and fiscal year should be available before a stock option grant was effective. Per the
terms of our 2002 plan at the time of these stock option grants, the exercise price of each awarded
stock option was equal to the closing price of our common stock on the last trading day immediately
prior to the effective grant date. In addition, the exact number of stock options that a named
executive officer received for fiscal 2007 was determined by dividing (1) the dollar value of the
stock option award determined by the Committee in July 2006 by (2) the Black-Scholes dollar value
of an option to purchase a share of our common stock as of the close of business on the last
trading day before the effective grant date.
Share Ownership Guidelines
In July 2004, our board of directors, upon recommendation from the Committee, approved share
ownership guidelines for our executive officers, including our named executive officers. The
objectives of these guidelines are to:
|
|
|
build long-term commitment and perspective;
|
|
|
|
|
tie executive wealth creation to stockholder value creation without requiring cash
outlays by the executive officer; and
|
|
|
|
|
send positive signals to the investment community.
|
The share ownership guidelines provide that with respect to restricted stock grants or stock option
grants for the 2005 fiscal year forward, an after-tax value of each restricted stock award that
vests or option that is exercised will be calculated for each named executive officer. The
after-tax value will be expressed as a number of shares based on the share price of our common
stock on the date the restricted stock award vests or the option is exercised. Named executive
officers are expected to retain 50% of the after-tax gain over a rolling five (5) year period for
so long as they remain executive officers. Since the adoption of these guidelines, PARS shares
were not eligible to vest until after the completion of the 2007 fiscal year. In addition, these
guidelines provide for a rolling five (5) year period over which to measure the after-tax gain
retained by our executive officers. As a result, executive officers are not expected to comply
with these guidelines until after the completion of our fiscal year ending June 30, 2009.
Employment Agreement with Peter J. Kight
On May 1, 1997, Mr. Kight, our Chairman and Chief Executive Officer, entered into an
employment agreement with us. Mr. Kights employment agreement provided for a minimum base salary
and a covenant not to compete. Mr. Kights minimum base salary was set at $300,000. Mr. Kights
base salary was $520,000 for fiscal 2004, 2005, 2006 and 2007. Additionally, at the time of the
employment agreement, Mr. Kight received a stock option to purchase 200,000 shares of our common
stock at $14.75 per share, the price per share on the date of the employment agreement. The
initial term of Mr. Kights employment agreement expired on June 30, 2002, but renews automatically
for a twelve-month period on each July 1 unless terminated by us or Mr. Kight as provided in the
employment agreement. We maintain our employment agreement with Mr. Kight because we feel it is
important to retain him as our Chairman and Chief Executive Officer as a result of his long-term
and significant involvement with our company. In addition, Mr. Kights employment agreement
contains a covenant not to compete during the time of his employment plus a one year period
following termination of employment. If Mr. Kights employment is terminated by us without cause
not in connection with a change in control, he is entitled to receive certain payments and benefits
from us pursuant to the terms of his employment agreement. For additional information regarding
post-
15
termination payment to Mr. Kight under his employment agreement, please see Potential
Payments on Termination or Change in Control beginning on page 22 in this Form 10-K/A.
Retention Agreements and Other Separation Agreements
On July 27, 2007, we entered into a retention agreement with each of our executive officers,
including our named executive officers, which provide for certain rights, payments and benefits
upon a change in control of our company and other payments and benefits following a qualifying
termination event due to a change in control. The Committee and our board of directors approved
the retention agreements to ensure that, as we considered a change in control transaction, each
named executive officer remained focused and protected stockholders best interests rather than his
own. We sought to ensure management stability during and after a possible change in control
situation, and we believed a functioning management team could increase the value of a change in
control transaction for our stockholders. We believe that the retention agreements help our named
executive officers achieve a balance between their responsibilities to stockholders and the adverse
impact a change in control could have on their personal economic interests and roles within our
company. Our retention agreements only provide benefits to our named executive officers once a
change in control has occurred, as defined in the agreements. In connection with our proposed
merger with Fiserv, Inc. (Fiserv), on August 2, 2007, we amended the retention agreements for
certain of our executive officers, including Messrs. Kight, Mangum and Olsen, to clarify the
circumstances under which they may terminate employment for good reason following a merger with
Fiserv and to change the treatment of their unvested equity awards as a result of a merger with
Fiserv.
Generally, upon a change in control, all outstanding equity awards issued to a named executive
officer, whether in the form of stock options, PARS or restricted stock, become immediately and
fully vested and exercisable notwithstanding any contrary waiting or vesting periods specified in
our equity incentive plans or applicable award agreements. However, pursuant to the amendments
described above, the unvested restricted stock and unvested stock options held by certain named
executive officers will be converted into Fiserv restricted stock and stock options at the
effective time of the proposed merger with Fiserv. Our retention agreements also provide for an
18-month employment period that begins only upon a change in control and during which a named
executive officers position, pay and benefits are to remain the same. The Committee decided that
for the named executive officer to receive any additional payments or benefits under the retention
agreement, he must have a qualifying termination of employment following the change in control. We
discuss our retention agreements with our named executive officers more fully in this Form 10-K/A
under Potential Payments on Termination or Change in Control beginning on page 22.
During their term, the retention agreements superseded all prior severance plans or programs
established by us except for rights to severance compensation and other benefits under individual
agreements that are not covered by the retention agreement. In addition, where a named executive
officer is entitled to severance pay and other benefits under the retention agreement and a
different agreement, the executive officer will receive the greatest aggregate amounts and benefits
due pursuant to one of those agreements but will not be entitled to a duplication of such amounts
and benefits.
Tax Implications
Section 162(m) of the Internal Revenue Code of 1986, as amended (the Code), places a limit
of $1,000,000 on the amount of compensation that we may deduct in any one year with respect to our
Chief Executive Officer and our three other most highly paid executive officers (other than our
Chief Financial Officer). Certain performance-based compensation approved by our stockholders is
not subject to the deduction limit. Our 2002 Stock Incentive Plan is, and our 2003 Incentive
Compensation Plan was, designed to meet the criteria of this exception so that certain awards under
these plans are not subject to the deduction limit of Section 162(m) of the Code and therefore
could be fully deductible. While the Committee has designed this plan to allow full deductibility,
it has not adopted a policy that all compensation must be deductible because it believes that it is
in the best interests of our stockholders for the Committee to maintain flexibility in the design
of our compensation plans, including our 2008 Incentive Compensation Plan.
16
Compensation Committee Report
The Compensation Committee has reviewed and discussed the Compensation Discussion and Analysis
section included in this Amendment No. 1 to Annual Report on Form 10-K/A for the fiscal year ended
June 30, 2007 with management, and based on such review and discussions, the Compensation Committee
recommended to our board of directors that the Compensation Discussion and Analysis be included in
this Form 10-K/A.
The foregoing report has been submitted by the following members of the Compensation
Committee.
Jeffrey M. Wilkins (Chairman)
William P. Boardman
James D. Dixon
C. Beth Cotner
The foregoing Report of the Compensation Committee does not constitute soliciting material and
should not be deemed to be filed with the Securities and Exchange Commission or incorporated by
reference into any of our other filings under the Securities Act of 1933, as amended, or the
Securities Exchange Act of 1934, as amended, except to the extent that we specifically incorporate
this Report by reference in any of those filings.
Compensation Committee Interlocks and Insider Participation
The members of the Compensation Committee of our Board of Directors in fiscal 2007 were
Messrs. Quinn (Chairman) through September 2006, Wilkins (Chairman) from September 2006, Boardman
and Dixon and Ms. Cotner from May 2007. There are no interlocks, as defined by the SEC Rules,
with respect to any member of the Compensation Committee.
Summary Compensation for Fiscal Year 2007
The following table sets forth information regarding compensation for each of our named
executive officers for the fiscal year ended June 30, 2007. All numbers are rounded to the nearest
dollar.
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|
|
|
|
|
|
|
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|
|
Non-Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock
|
|
Option
|
|
Incentive Plan
|
|
All Other
|
|
|
|
|
Salary
|
|
Bonus
|
|
Awards
|
|
Awards
|
|
Compensation
|
|
Compensation
|
|
Total
|
Name and Principal Position
|
|
($)
|
|
($)
|
|
($)(1)
|
|
($)(2)
|
|
($)
|
|
($)(3)
|
|
($)
|
|
Peter J. Kight
|
|
$
|
520,000
|
|
|
|
|
|
|
$
|
859,968
|
|
|
$
|
1,552,406
|
|
|
$
|
370,760
|
|
|
$
|
134,033
|
|
|
$
|
3,437,167
|
|
Chairman and Chief
Executive Officer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
David E. Mangum
|
|
$
|
279,413
|
|
|
|
|
|
|
$
|
184,426
|
|
|
$
|
236,157
|
|
|
$
|
122,048
|
|
|
$
|
6,111
|
|
|
$
|
828,155
|
|
Executive Vice President
and
Chief Financial Officer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stephen E. Olsen
|
|
$
|
332,062
|
|
|
|
|
|
|
$
|
225,568
|
|
|
$
|
240,257
|
|
|
$
|
145,045
|
|
|
$
|
6,192
|
|
|
$
|
949,124
|
|
Chief Operating Officer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mark A. Johnson
|
|
$
|
287,795
|
|
|
|
|
|
|
$
|
129,703
|
|
|
$
|
396,970
|
|
|
$
|
89,792
|
|
|
$
|
7,644
|
|
|
$
|
911,904
|
|
Vice Chairman
|
|
|
|
|
|
|
|
|
|
|
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
Randal A. McCoy (4)
|
|
$
|
278,968
|
|
|
|
|
|
|
$
|
113,314
|
|
|
$
|
137,288
|
|
|
$
|
129,714
|
|
|
$
|
7,512
|
|
|
$
|
666,796
|
|
Former Executive Vice
President and General
Manager Software
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
Represents dollar amount recognized for financial reporting purposes for the fiscal year ended
June 30, 2007, in accordance with FAS 123(R) and thus may include amounts from awards granted in
and prior to fiscal year 2007. This amount disregards any estimates of forfeiture during the
fiscal year but accounting for any actual forfeiture by a named executive officer during the fiscal
year. Assumptions used in the calculation of these amounts are included in note 13 to our audited
consolidated financial statements for the fiscal year ended June 30, 2007, included in our
|
17
|
|
|
|
|
Annual Report on Form 10-K filed with the Securities and Exchange Commission on August 24, 2007.
There can be no assurance that the FAS 123(R) amounts will ever be realized.
|
|
(2)
|
|
Represents dollar amount recognized for financial reporting purposes for the fiscal year ended
June 30, 2007, in accordance with FAS 123(R) and thus may include amounts from awards granted in
and prior to fiscal year 2007. This amount disregards any estimates of forfeiture during the fiscal
year but accounting for any actual forfeiture by a named executive officer during the fiscal year.
Assumptions used in the calculation of these amounts are included in note 13 to our audited
consolidated financial statements for the fiscal year ended June 30, 2007, included in our Annual
Report on Form 10-K filed with the Securities and Exchange Commission on August 24, 2007. There
can be no assurance that the FAS 123(R) amounts will ever be realized.
|
|
(3)
|
|
All Other Compensation represents 401(k) match of $6,148 for Mr. Kight, $6,111 for Mr. Mangum,
$6,192 for Mr. Olsen, $7,644 for Mr. Johnson and $7,512 for Mr. McCoy. In addition, All Other
Compensation represents $127,885 (net of reimbursement) for Mr. Kight related to personal use of
our corporate aircraft. Personal use of our corporate aircraft consists of the incremental cost to
us of personal use by Mr. Kight of our corporate aircraft and is calculated based on a methodology
that includes the weighted average cost of fuel, maintenance and repair expenses, pilot services,
travel expenses and other variable costs associated with such use. Because the corporate aircraft
is used primarily for business travel, the methodology excludes fixed costs that do not change
based on usage, including pilot salaries, the lease costs of the aircraft and the cost of
maintenance not related to personal travel. Mr. Kight, his family and guests occasionally fly on
the corporate aircraft as additional passengers on personal flights that are attributed to Mr.
Kight, in which case the entire incremental cost is allocated to Mr. Kight for the personal flight.
|
|
(4)
|
|
Mr. McCoys employment with us ended August 24, 2007.
|
Grants of Plan Based Awards for Fiscal Year 2007
The following table sets forth information regarding grants of non-equity and equity based
incentive awards for each of our named executive officers for the fiscal year ended June 30, 2007.
All dollar amounts are rounded to the nearest dollar.
|
|
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|
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|
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|
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|
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|
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|
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|
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|
|
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
All Other
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Awards:
|
|
Exercise
|
|
Grant
|
|
|
|
|
|
|
|
|
|
|
Estimated Future Payouts
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of
|
|
or Base
|
|
Date Fair
|
|
|
|
|
|
|
|
|
|
|
Under Non-Equity Incentive
|
|
Estimated Future Payouts Under
|
|
Securities
|
|
Price of
|
|
Value of
|
|
|
|
|
|
|
|
|
|
|
Plan Awards(2)
|
|
Equity Incentive Plan Awards (5)
|
|
Underlying
|
|
Option
|
|
Stock and
|
|
|
Grant
|
|
Approval
|
|
Threshold
|
|
Target
|
|
Maximum
|
|
Threshold
|
|
|
|
|
|
|
|
|
|
Options
|
|
Awards
|
|
Option
|
Name
|
|
Date
|
|
Date(1)
|
|
($) (3)
|
|
($)
|
|
($)(4)
|
|
(#)
|
|
Target (#)
|
|
Maximum (#)
|
|
(#)(6)
|
|
($/Sh)(7)
|
|
Awards ($)
|
Peter J. Kight
|
|
|
N/A
|
|
|
|
N/A
|
|
|
$
|
0
|
|
|
$
|
598,000
|
|
|
$
|
2,000,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8/4/06
|
|
|
|
7/27/06
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
26,590
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
991,009
|
|
|
|
|
8/4/06
|
|
|
|
7/27/06
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
60,263
|
|
|
$
|
37.27
|
|
|
$
|
1,239,007
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
David E. Mangum
|
|
|
N/A
|
|
|
|
N/A
|
|
|
$
|
0
|
|
|
$
|
196,852
|
|
|
$
|
2,000,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8/4/06
|
|
|
|
7/27/06
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5,474
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
204,016
|
|
|
|
|
8/4/06
|
|
|
|
7/27/06
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12,403
|
|
|
$
|
37.27
|
|
|
$
|
255,006
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stephen E. Olsen
|
|
|
N/A
|
|
|
|
N/A
|
|
|
$
|
0
|
|
|
$
|
233,942
|
|
|
$
|
2,000,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8/4/06
|
|
|
|
7/27/06
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5,608
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
209,010
|
|
|
|
|
8/4/06
|
|
|
|
7/27/06
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12,598
|
|
|
$
|
37.27
|
|
|
$
|
259,019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mark A. Johnson
|
|
|
N/A
|
|
|
|
N/A
|
|
|
$
|
0
|
|
|
$
|
144,826
|
|
|
$
|
2,000,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8/4/06
|
|
|
|
7/27/06
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,052
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
151,018
|
|
|
|
|
8/4/06
|
|
|
|
7/27/06
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
9,193
|
|
|
$
|
37.27
|
|
|
$
|
189,008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Randal A. McCoy
|
|
|
N/A
|
|
|
|
N/A
|
|
|
$
|
0
|
|
|
$
|
196,538
|
|
|
$
|
2,000,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8/4/06
|
|
|
|
7/27/06
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,193
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
119,003
|
|
|
|
|
8/4/06
|
|
|
|
7/27/06
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7,199
|
|
|
$
|
37.27
|
|
|
$
|
148,011
|
|
18
|
|
|
(1)
|
|
For equity awards, the Approval Date is the date on which our Compensation Committee took
action; however, pursuant to our granting policies, annual stock option and performance accelerated
restricted stock (PARS) awards are not effective until the third trading day after we publicly
announce earnings information for the last completed fourth quarter and fiscal year.
|
|
(2)
|
|
All non-equity incentive plan awards were granted under the 2003 Incentive Compensation Plan,
or the 2003 plan.
|
|
(3)
|
|
Award payments are prorated based on the achievement of performance objectives above the
minimum threshold for each relevant performance component as more fully described under
Compensation Discussion and Analysis Annual Cash Incentives.
|
|
(4)
|
|
Award payments are prorated based on the achievement of performance objectives above the
target level for each relevant performance component as more fully described under Compensation
Discussion and Analysis Annual Cash Incentives, but the aggregate cash payment under the 2003
plan for a named executive officer may not exceed $2.0 million in any given year.
|
|
(5)
|
|
All equity incentive plan awards were granted under the 2002 Stock Incentive Plan, or the 2002
plan. All PARS shares awarded by the Committee will vest no later than five years after the grant
date, but may vest earlier, in whole or in part, based on the achievement of each targeted
performance measure during the three-year performance period. Our Compensation Committee determines
the dollar value of PARS awards for each named executive officer as of the effective grant date.
The terms of our 2002 plan at the time of these grants defined fair market value of a share of our
common stock as the closing price of our stock on the last trading day before the effective grant
date. As a result, the number of PARS shares granted to a named executive officer for fiscal year
2007 was determined by dividing (1) the dollar value of the award set by the Committee when it took
action by (2) the closing price of our common stock on the last trading day before the effective
grant date.
|
|
|
|
|
|
Pursuant to the terms of the applicable PARS award agreement, until the PARS shares have
vested and been issued, the named executive officer does not have any rights of a stockholder with
respect to the shares including any right to vote such shares or receive dividends or distributions
on such shares.
|
|
|
|
|
|
For additional information regarding PARS awards, please see Compensation Discussion and
Analysis Long-Term Equity-Based Incentive Plans in this Form 10-K/A.
|
|
|
|
|
|
|
(6)
|
|
All stock option awards were granted under our 2002 plan and have a ten-year life. Each
stock option award reported in this table vests ratably over a three-year period. Our Compensation
Committee determines the Black-Scholes dollar value of stock option awards for each named executive
officer as of the effective grant date. The terms of our 2002 plan at the time of these grants
defined fair market value of a share of our common stock as the closing price of our common stock
on the last trading day before the effective grant date. The number of stock options that a named
executive officer received for fiscal year 2007 was determined by dividing (1) the value of the
stock option award set by the Committee when it took action by (2) the Black-Scholes value of an
option to purchase a share of our common stock as of the close of business on the last trading day
before the effective grant date. The Black-Scholes value of our common stock on August 3, 2006 was
$20.56 per share.
|
|
|
|
|
|
For additional information regarding stock option awards, please see Compensation Discussion
and Analysis Long-Term Equity-Based Incentive Plans in this Form 10-K/A
|
|
|
|
|
|
|
(7)
|
|
Pursuant to the terms of our 2002 plan at the time of these grants, the exercise price of a
stock option award was equal to the closing price of our common stock on the last trading day
before the effective grant date. The effective grant date of all stock option awards reported in
this table was August 4, 2006. As a result, the exercise price of these stock options is equal to
the closing price of our common stock on August 3, 2006. The closing price of our common stock on
August 4, 2006 was $36.92.
|
19
Outstanding Equity Awards at 2007 Fiscal Year End
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option Awards
|
|
Stock Awards
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
Incentive
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Incentive
|
|
Plan
|
|
|
|
|
|
|
|
|
|
|
Incentive
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Plan
|
|
Awards:
|
|
|
|
|
|
|
|
|
|
|
Plan
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Awards:
|
|
Market or
|
|
|
|
|
|
|
Number of
|
|
Awards:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of
|
|
Payout Value
|
|
|
Number of
|
|
Securities
|
|
Number of
|
|
|
|
|
|
|
|
|
|
Number of
|
|
|
|
|
|
Unearned
|
|
or Unearned
|
|
|
Securities
|
|
Underlying
|
|
Securities
|
|
|
|
|
|
|
|
|
|
Shares or
|
|
Market Value
|
|
Shares, Units
|
|
Shares, Units
|
|
|
Underlying
|
|
Unexercised
|
|
Underlying
|
|
|
|
|
|
|
|
|
|
Units of
|
|
of Shares or
|
|
or Other
|
|
or Other
|
|
|
Unexercised
|
|
Options (#)
|
|
Unexercised
|
|
Option
|
|
Option
|
|
Stock That
|
|
Units of Stock
|
|
Rights That
|
|
Rights That
|
|
|
Options (#)
|
|
Unexercisable
|
|
Unearned
|
|
Exercise
|
|
Expiration
|
|
Have Not
|
|
That Have
|
|
Have Not
|
|
Have Not
|
Name
|
|
Exercisable
|
|
(1)
|
|
Options (#)
|
|
Price ($)
|
|
Date
|
|
Vested (#)(2)
|
|
Not Vested ($)
|
|
Vested (#)(3)
|
|
Vested ($)
|
|
Peter J. Kight
|
|
|
100,000
|
|
|
|
|
|
|
|
|
|
|
$
|
25.75
|
|
|
|
5/1/2008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
100,000
|
|
|
|
|
|
|
|
|
|
|
$
|
44.44
|
|
|
|
5/7/2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
50,000
|
|
|
|
|
|
|
|
|
|
|
$
|
104.50
|
|
|
|
1/1/2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
100,000
|
|
|
|
|
|
|
|
|
|
|
$
|
51.56
|
|
|
|
7/1/2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
100,000
|
|
|
|
|
|
|
|
|
|
|
$
|
42.50
|
|
|
|
1/1/2011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
100,000
|
|
|
|
|
|
|
|
|
|
|
$
|
35.07
|
|
|
|
7/1/2011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
200,000
|
|
|
|
|
|
|
|
|
|
|
$
|
16.04
|
|
|
|
12/4/2011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
100,000
|
|
|
|
|
|
|
|
|
|
|
$
|
15.00
|
|
|
|
12/16/2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
200,000
|
|
|
|
|
|
|
|
|
|
|
$
|
27.84
|
|
|
|
10/30/2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
47,785
|
|
|
|
23,893
|
|
|
|
|
|
|
$
|
25.51
|
|
|
|
8/6/2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
19,168
|
|
|
|
38,335
|
|
|
|
|
|
|
$
|
40.25
|
|
|
|
8/5/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
60,263
|
|
|
|
|
|
|
$
|
37.27
|
|
|
|
8/4/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
32,928
|
|
|
$
|
1,323,706
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
20,870
|
|
|
$
|
838,974
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
26,590
|
|
|
$
|
1,068,918
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
David E. Mangum
|
|
|
60,000
|
|
|
|
|
|
|
|
|
|
|
$
|
31.94
|
|
|
|
9/7/2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12,500
|
|
|
|
|
|
|
|
|
|
|
$
|
42.50
|
|
|
|
1/1/2011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12,500
|
|
|
|
|
|
|
|
|
|
|
$
|
35.07
|
|
|
|
7/1/2011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
17,333
|
|
|
|
|
|
|
|
|
|
|
$
|
16.04
|
|
|
|
12/4/2011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
11,667
|
|
|
|
|
|
|
|
|
|
|
$
|
15.00
|
|
|
|
12/16/2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
9,918
|
|
|
|
4,959
|
|
|
|
|
|
|
$
|
25.51
|
|
|
|
8/6/2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,979
|
|
|
|
7,956
|
|
|
|
|
|
|
$
|
40.25
|
|
|
|
8/5/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12,403
|
|
|
|
|
|
|
$
|
37.27
|
|
|
|
8/4/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6,703
|
|
|
$
|
269,461
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,248
|
|
|
$
|
170,770
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5,474
|
|
|
$
|
220,055
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stephen E. Olson
|
|
|
1,642
|
|
|
|
|
|
|
|
|
|
|
$
|
15.00
|
|
|
|
10/29/2008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12,500
|
|
|
|
|
|
|
|
|
|
|
$
|
42.50
|
|
|
|
1/1/2011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
35,000
|
|
|
|
|
|
|
|
|
|
|
$
|
35.07
|
|
|
|
7/1/2011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1
|
|
|
|
|
|
|
|
|
|
|
$
|
16.04
|
|
|
|
12/4/2011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
26
|
|
|
|
|
|
|
|
|
|
|
$
|
15.00
|
|
|
|
12/16/2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10,098
|
|
|
|
5,049
|
|
|
|
|
|
|
$
|
25.51
|
|
|
|
8/6/2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,051
|
|
|
|
8,101
|
|
|
|
|
|
|
$
|
40.25
|
|
|
|
8/5/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12,598
|
|
|
|
|
|
|
$
|
37.27
|
|
|
|
8/4/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,192
|
|
|
$
|
88,118
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6,821
|
|
|
$
|
274,204
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,323
|
|
|
$
|
173,785
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5,608
|
|
|
$
|
225,442
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mark A. Johnson
|
|
|
25,000
|
|
|
|
|
|
|
|
|
|
|
$
|
25.75
|
|
|
|
5/1/2008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
25,000
|
|
|
|
|
|
|
|
|
|
|
$
|
44.44
|
|
|
|
5/7/2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12,500
|
|
|
|
|
|
|
|
|
|
|
$
|
104.50
|
|
|
|
1/1/2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,000
|
|
|
|
|
|
|
|
|
|
|
$
|
51.56
|
|
|
|
7/1/2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,000
|
|
|
|
|
|
|
|
|
|
|
$
|
42.50
|
|
|
|
1/1/2011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,000
|
|
|
|
|
|
|
|
|
|
|
$
|
35.07
|
|
|
|
7/1/2011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8,000
|
|
|
|
|
|
|
|
|
|
|
$
|
16.04
|
|
|
|
12/4/2011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,000
|
|
|
|
|
|
|
|
|
|
|
$
|
15.00
|
|
|
|
12/16/2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
60,000
|
|
|
|
15,000
|
|
|
|
|
|
|
$
|
19.55
|
|
|
|
2/18/2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7,303
|
|
|
|
3,652
|
|
|
|
|
|
|
$
|
25.51
|
|
|
|
8/6/2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
20
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option Awards
|
|
Stock Awards
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
Incentive
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Incentive
|
|
Plan
|
|
|
|
|
|
|
|
|
|
|
Incentive
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Plan
|
|
Awards:
|
|
|
|
|
|
|
|
|
|
|
Plan
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Awards:
|
|
Market or
|
|
|
|
|
|
|
Number of
|
|
Awards:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of
|
|
Payout Value
|
|
|
Number of
|
|
Securities
|
|
Number of
|
|
|
|
|
|
|
|
|
|
Number of
|
|
|
|
|
|
Unearned
|
|
or Unearned
|
|
|
Securities
|
|
Underlying
|
|
Securities
|
|
|
|
|
|
|
|
|
|
Shares or
|
|
Market Value
|
|
Shares, Units
|
|
Shares, Units
|
|
|
Underlying
|
|
Unexercised
|
|
Underlying
|
|
|
|
|
|
|
|
|
|
Units of
|
|
of Shares or
|
|
or Other
|
|
or Other
|
|
|
Unexercised
|
|
Options (#)
|
|
Unexercised
|
|
Option
|
|
Option
|
|
Stock That
|
|
Units of Stock
|
|
Rights That
|
|
Rights That
|
|
|
Options (#)
|
|
Unexercisable
|
|
Unearned
|
|
Exercise
|
|
Expiration
|
|
Have Not
|
|
That Have
|
|
Have Not
|
|
Have Not
|
Name
|
|
Exercisable
|
|
(1)
|
|
Options (#)
|
|
Price ($)
|
|
Date
|
|
Vested (#)(2)
|
|
Not Vested ($)
|
|
Vested (#)(3)
|
|
Vested ($)
|
|
|
|
|
2,930
|
|
|
|
5,858
|
|
|
|
|
|
|
$
|
40.25
|
|
|
|
8/5/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
9,193
|
|
|
|
|
|
|
$
|
37.27
|
|
|
|
8/4/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,939
|
|
|
$
|
198,548
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,130
|
|
|
$
|
125,826
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,052
|
|
|
$
|
162,890
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Randal A. McCoy
|
|
|
12,500
|
|
|
|
|
|
|
|
|
|
|
$
|
42.50
|
|
|
|
1/1/2011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
20,612
|
|
|
|
|
|
|
|
|
|
|
$
|
35.07
|
|
|
|
7/1/2011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1
|
|
|
|
|
|
|
|
|
|
|
$
|
16.04
|
|
|
|
12/4/2011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
59
|
|
|
|
|
|
|
|
|
|
|
$
|
15.00
|
|
|
|
12/16/2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,885
|
|
|
|
2,885
|
|
|
|
|
|
|
$
|
25.51
|
|
|
|
8/6/2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,315
|
|
|
|
4,629
|
|
|
|
|
|
|
$
|
40.25
|
|
|
|
8/5/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7,199
|
|
|
|
|
|
|
$
|
37.27
|
|
|
|
8/4/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,881
|
|
|
$
|
156,016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,460
|
|
|
$
|
98,892
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,193
|
|
|
$
|
128,359
|
|
|
|
|
(1)
|
|
Represents options unexercisable as of June 30, 2007.
|
|
|
For Mr. Kight: of the 23,893 unexercisable options that expire on 8/6/14, all vested on
8/6/07; of the 38,335 unexercisable options that expire on 8/5/15, 19,167 vested on 8/5/07
and 19,168 will vest on 8/5/08; and of the 60,263 unexercisable options that expire on
8/4/16, 20,088 vested on 8/4/07, 20,087 will vest on 8/4/08 and 20,088 will vest on 8/4/09.
|
|
|
For Mr. Mangum: of the 4,959 unexercisable options that expire on 8/6/14, all vested on
8/6/07; of the 7,956 unexercisable options that expire on 8/5/15, 3,978 vested on 8/5/07
and 3,978 will vest on 8/5/08; and of the 12,403 unexercisable options that expire on
8/4/16, 4,135 vested on 8/4/07, 4,134 will vest on 8/4/08 and 4,134 will vest on 8/4/09.
|
|
|
For Mr. Olsen: of the 5,049 unexercisable options that expire on 8/6/14, all vested on
8/6/07; of the 8,101 unexercisable options that expire on 8/5/15, 4,050 vested on 8/5/07
and 4,051 will vest on 8/5/08; and of the 12,598 unexercisable options that expire on
8/4/16, 4,200 vested on 8/4/07, 4,199 will vest on 8/4/08 and 4,199 will vest on 8/4/09.
|
|
|
For Mr. Johnson: of the 15,000 unexercisable options that expire on 2/18/13, all will
vest on 2/18/08; of the 3,652 unexercisable options that expire on 8/6/14, all vested on
8/6/07; of the 5,858 unexercisable options that expire on 8/5/15, 2,929 vested on 8/5/07
and 2,929 will vest on 8/5/08; and of the 9,193 unexercisable options that expire on
8/4/16, 3,065 vested on 8/4/07, 3,064 will vest on 8/4/08 and 3,064 will vest on 8/4/09.
|
|
|
For Mr. McCoy: of the 2,885 unexercisable options that expire on 8/6/14, all vested on
8/6/07; of the 4,629 unexercisable options that expire on 8/5/15, 2,314 vested on 8/5/07;
and of the 7,199 unexercisable options that expire on 8/4/16, 2,400 vested on 8/4/07. Mr.
McCoys employment with us ended August 24, 2007, and as a result, none of his remaining
option awards outstanding as of June 30, 2007 will vest.
|
|
|
|
(3)
|
|
Represents shares that have not vested as of June 30, 2007.
|
|
|
For Mr. Olsen: of the 2,192 shares of stock that have not vested, 548 shares will vest
on 5/4/08, 548 shares will vest on 5/4/09, 548 shares will vest on 5/4/10 and 548 shares
will vest on 5/4/11.
|
|
|
|
(4)
|
|
Represents equity incentive plan shares that were unvested as of June 30, 2007.
|
|
|
For Mr. Kight: the 32,928 shares vested on 8/6/07; the 20,870 shares will vest on 8/5/08
if the three year cumulative financial objectives are achieved, otherwise they will vest on
8/5/10; and the 26,590 shares will vest on 8/4/09 if the three year cumulative financial
objectives are achieved, otherwise they will vest on 8/4/11.
|
|
|
For Mr. Mangum: the 6,703 shares vested on 8/6/07; the 4,248 shares will vest on 8/5/08
if the three year cumulative financial objectives are achieved, otherwise they will vest on
8/5/10; and the 5,474 shares will vest on 8/4/09 if the three year cumulative financial
objectives are achieved, otherwise they will vest on 8/4/11.
|
|
|
For Mr. Olsen: the 6,821 shares vested on 8/6/07; the 4,323 shares will vest on 8/5/08
if the three year cumulative financial objectives are achieved, otherwise they will vest on
8/5/10; and the 5,608 shares will vest on 8/4/09 if the three year cumulative financial
objectives are achieved, otherwise they will vest on 8/4/11.
|
|
|
For Mr. Johnson: the 4,939 shares vested on 8/6/07; the 3,130 shares will vest on
8/5/08 if the three year cumulative financial objectives are achieved, otherwise they will
vest on 8/5/10; and the 4,052 shares will
|
21
|
|
vest on 8/4/09 if the three year cumulative financial objectives are achieved, otherwise they
will vest on 8/4/11.
|
|
|
For Mr. McCoy: the 3,881 shares vested on 8/6/07. Mr. McCoys employment with us ended
August 24, 2007, and as a result, none of his remaining PARS awards outstanding as of June
30, 2007 will vest.
|
Option Exercises and Stock Vested During Fiscal Year 2007
The following table sets forth details regarding the exercise of stock options and the vesting
of stock awards for our named executive officers for the fiscal year ended June 30, 2007.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option Awards
|
|
Stock Awards
|
|
|
Number of Shares
|
|
|
|
|
|
Number of Shares
|
|
|
|
|
Acquired on
|
|
Value Realized on
|
|
Acquired on Vesting
|
|
Value Realized on
|
Name
|
|
Exercise (#)
|
|
Exercise ($)(1)
|
|
(#)
|
|
Vesting ($)(2)
|
|
Peter J. Kight
|
|
|
300,000
|
|
|
$
|
5,814,000
|
|
|
|
|
|
|
|
|
|
|
David E. Mangum
|
|
|
|
|
|
|
|
|
|
|
3,931
|
|
|
$
|
173,711
|
|
|
Stephen E. Olsen
|
|
|
|
|
|
|
|
|
|
|
7,624
|
|
|
$
|
331,901
|
|
|
Mark A. Johnson
|
|
|
30,847
|
|
|
$
|
607,686
|
|
|
|
|
|
|
|
|
|
|
Randal A. McCoy
|
|
|
|
|
|
|
|
|
|
|
5,110
|
|
|
$
|
225,811
|
|
|
|
|
(1)
|
|
Value realized was calculated based on the number of shares acquired on exercise multiplied by
the excess of (x) the fair market value of a share of our common stock on the date of exercise over
(y) the exercise price of the stock option.
|
|
(2)
|
|
Value realized was calculated based on the number of shares vested multiplied by the fair
market value of a share of our common stock on the date of vesting.
|
Potential Payments on Termination or Change in Control
We have entered into certain agreements and maintain certain plans that will or may require us
to provide compensation to the named executive officers in the event of a termination of employment
or a change in control of our company.
Employment Agreement with Peter J. Kight
On May 1, 1997, we entered into an employment agreement with Peter J. Kight, our Chairman and
Chief Executive Officer. If Mr. Kights employment is terminated by us without cause, he is
entitled to receive his base salary and any incentive compensation under and consistent with plans
adopted by the company prior to the termination date over a period of two years following the
termination date. In addition, if Mr. Kights employment is terminated by us without cause, he is
entitled to receive executive level outplacement services by a firm selected and contracted by us
for up to six months following the termination date. If Mr. Kight accepts other employment during
the two-year severance period, we will pay Mr. Kights base salary and any incentive compensation
until the start of other employment by Mr. Kight. Mr. Kights employment agreement also provided
for certain payments and benefits upon a qualifying termination following a change in control of
our company; however, those provisions in his employment agreement were superseded by his July 2007
retention agreement with us, which is described below. Pursuant to the terms of his employment
agreement, Mr. Kight is subject to a covenant not to compete during his employment with us and for
one year following termination whether voluntary or involuntary or with or without cause.
22
Retention Agreements
Our Compensation Committee and board of directors approved, and on July 27, 2007, we entered
into, identical retention agreements with our executive officers, including our named executive
officers. The retention agreement has an initial term of two years, which term automatically
extends for an additional one-year period on each annual anniversary of the retention agreement
date, unless at least 60 days prior to the annual anniversary of the retention agreement, we
provide the executive with notice that the term will not be extended. A change in control must
occur during the term of the retention agreement for the executive officer to be entitled to any
benefits or payments. In connection with our proposed merger with Fiserv, Inc. (Fiserv), on
August 2, 2007, we entered into an amendment to the retention agreements with certain of our
executive officers, including all of our named executive officers other than Mr. Johnson. As
described further below, the amendments modify particular terms of the retention agreements only
upon the consummation of our proposed merger with Fiserv.
Definition of Change in Control.
For purposes of the retention agreement, a change in control
means the occurrence of any of the following events:
|
|
|
individuals who at the beginning of any twelve-month period constituted our board of
directors (the Incumbent Directors) cease for any reason to constitute at least a
majority of our board during such period, except that any person who becomes a director
during such period with the approval of a majority of the Incumbent Directors will
generally be considered an Incumbent Director with certain exceptions; or
|
|
|
|
|
any person is or becomes a beneficial owner (as defined in Rule 13d-3 of the Exchange
Act), directly or indirectly of 30% or more of either our then-outstanding shares of common
stock or the combined voting power of our then-outstanding securities eligible to vote for
directors; or
|
|
|
|
|
the consummation of a reorganization, merger or similar form of corporate transaction
involving our company or a subsidiary, or the sale or other disposition of all or
substantially all of our assets, or the acquisition of assets or stock of another
corporation, unless immediately following any of those transactions all or substantially
all of the individuals and entities who beneficially owned the majority of our outstanding
combined voting power prior to the transaction continue to do so in substantially the same
proportions and a majority of the board of directors of any surviving entity were Incumbent
Directors at the time our board approved the transaction.
|
Acceleration of Equity Awards Upon a Change in Control.
Generally, in the event of a change
in control during the term of the retention agreement, all then-outstanding equity awards issued to
a named executive officer pursuant to our incentive plans will become immediately and fully vested
and exercisable, and/or all restrictions on such awards shall lapse. This provision would apply to
all awards of stock options, restricted stock and PARS under our Amended and Restated 2002 Stock
Incentive Plan, or 2002 plan, notwithstanding any contrary waiting or vesting periods specified in
the plan or the applicable award agreement. All equity awards made to our executive officers under
our Third Amended and Restated 1995 Stock Option Plan, or 1995 plan, have already fully vested and
are exercisable.
Pursuant to the amendments with our named executive officers (other than Mr. Johnson), upon
the consummation of our proposed merger with Fiserv, all of their then-outstanding and unvested
equity awards will be converted into shares of restricted stock or stock options of Fiserv, as
applicable, based on a formula set forth in the merger agreement with Fiserv. In addition, the
Fiserv restricted shares and stock options issued to those named executive officers will vest in
full on the earlier of the date provided by the original award terms or one year after the
consummation of the proposed merger, all subject to earlier vesting upon a qualifying termination
of employment under the retention agreement or a change in control of Fiserv.
Employment Period Upon a Change in Control.
We agree to continue employing the named
executive officer, and the executive agrees to remain our employee subject to the provisions of the
retention agreement, for a period of eighteen (18) months following the date on which the change in
control occurs (the Employment Period). In addition, if a named executive officers employment
is terminated (whether by us without cause or by the executive for good reason, all as defined in
the retention agreement) within six (6) months prior to a change in control, and the executive can
reasonably demonstrate that his termination arose in connection with or anticipation
23
of a change in control, then for all purposes under the retention agreement the change in
control will be deemed to have occurred on the date immediately prior to such termination.
During the Employment Period, a named executive officers position, authority and
responsibilities with our company will be at least commensurate in all material respects with those
held and exercised by the executive during the 120 days before the change in control. We also
agree that during this period, the named executive officer will perform his services at a location
that is no more than 50 miles from where he was employed immediately before the change in control.
In addition, the named executive officer will continue to receive an annual base salary and annual
target cash incentive opportunity at least equal to his salary and target cash incentive award
prior to the change in control. The named executive officer will be entitled to participate in all
incentive, savings and retirement plans, welfare benefit plans, fringe benefit plans and paid time
off programs provided to our other peer executives but in no event can any such plans or programs
be less favorable than what we provided to the named executive officer before the change in
control.
Our Obligations Upon Termination.
If during the Employment Period we terminate a named
executive officer for cause, or if the executive voluntarily terminates employment other than for
good reason, the retention agreement terminates without any further obligation to the named
executive officer other than to pay accrued salary and benefits. The named executive officer is
also entitled to receive any other amounts or benefits required to be paid or provided under any of
our other plans or programs. A description of what he may be eligible to receive under our other
plans or programs is set forth below under Additional Arrangements. The retention agreement
defines cause to mean, among other things, the executives willful failure to perform his duties,
conviction of certain criminal acts, a material breach by the executive of our code of conduct or
ethics, or grossly inappropriate conduct by the executive that is likely to lead to material injury
to our company as determined by the board.
If the named executive officers employment is terminated by reason of his death or disability
(as defined in the agreement) during the Employment Period, the retention agreement terminates
without further obligation to the executive other than to pay accrued salary and benefits. In
addition, the executive or his estate or beneficiaries will be entitled to receive any other
amounts or benefits required to be paid or provided in the event of death or disability under any
of our other plans or programs. See Additional Arrangements below.
If, during the Employment Period, we terminate the named executive officer other than for
cause, death or disability, or the named executive officer terminates his employment for good
reason, then we are obligated to provide the executive with the following:
|
|
|
a single lump sum cash payment within 30 days after the termination date equal to:
|
|
|
|
accrued and unpaid annual base salary and vacation; and
|
|
|
|
|
a severance payment equal to two (2) times the sum of the named
executive officers annual base salary and target annual cash incentive award for
the year in which the termination occurs; and
|
|
|
|
if the named executive officer elects to continue participation in any group medical,
dental, vision and/or prescription drug plan benefits to which he and his eligible
dependents would be entitled under Section 4980B of the Internal Revenue Code of 1986, as
amended (the Code) (COBRA), then during the period that he is entitled to such coverage
under COBRA, we will pay him the excess of (i) the COBRA cost of such coverage, over (ii)
the amount he would have had to pay for coverage if he had remained employed during the
COBRA period; provided, however, that, if he becomes eligible to receive group health
benefits with a subsequent employer or otherwise, our obligation to pay that difference
will cease except as otherwise required by law; and
|
|
|
|
|
to the extent not paid or provided, any amounts or benefits required to be paid or
provided to the named executive officer under any of our other plans or programs.
|
The retention agreement provides that good reason for the executive to terminate his employment
exists upon a diminution in his base salary, incentive awards, duties or responsibilities, a
material diminution in the budget over which he has authority, requiring the executive to be based
at any location more than 50 miles from his location prior to the change in control or any material
breach of the retention agreement by us. The named executive officer
24
must choose to resign within 90 days after the event giving rise to good reason and provide us
with no less than 30 days and no more than 60 days to correct or reverse the event before he is
eligible to terminate his employment for good reason under the agreement. In addition, the
executives separation for good reason must occur within two years following the initial occurrence
of an event giving rise to good reason for him to be entitled to receive the payments and benefits
set forth above.
Upon the consummation of the proposed merger with Fiserv, however, our named executive
officers (other than Mr. Johnson) have agreed pursuant to the amendments that, during the year
following the merger, an immaterial diminution in authorities, duties or responsibilities will not
constitute good reason and that no longer having authorities, duties or responsibilities related to
CheckFree being publicly-traded will not by itself be material. However, the named executive
officers subject to the amendments retain the right to terminate for good reason during the 90-day
period following the first anniversary of the proposed merger with Fiserv due to any such
diminution which occurs during the one-year period following the merger. In that event, the named
executive officers separation must occur before the 30-month anniversary of the merger for him to
be entitled to receive the payments and benefits described above.
In addition, in the event any payment or distribution by us to the named executive officer
would be subject to an excise tax under Section 4999 of the Code, or he incurs any interest or
penalties with respect to such excise tax, then the executive is entitled to receive an additional
payment equal to the excise tax imposed on all payments and distributions under the agreement.
During their term, the retention agreements supersede all prior severance plans or programs
established by us except for rights to severance compensation and other benefits under individual
agreements that are not covered by the retention agreement. In addition, where an executive
officer is entitled to severance pay and other benefits under the retention agreement and a
different agreement, the executive officer will receive the greatest aggregate amounts and benefits
due pursuant to one of those agreements but will not be entitled to a duplication of such amounts
and benefits. Mr. Kights employment agreement governs his receipt of severance pay and other
benefits in the event of his termination by us without cause not in connection with a change in
control, but his retention agreement governs the amount and nature of severance pay and benefits in
the event we terminate him without cause, or he resigns for good reason, as a result of a change in
control.
Additional Arrangements
In addition to our retention agreements with our named executive officers, we have other plans
and arrangements that may provide payments or benefits in certain termination scenarios, such as
involuntary termination without cause (not in connection with a change in control), retirement,
death and disability. Our cash incentive compensation plans also provide for certain payments upon
a change in control.
Severance Guidelines.
We maintain severance guidelines. Under the guidelines and in
addition to accrued but unpaid salary, all current named executive officers may be eligible for
severance payments upon termination from the company, unless the separation is due to misconduct,
poor performance or voluntary resignation, or in connection with a change in control.
Determination of eligibility for severance is at the sole discretion of our company but our
practice is to have our Compensation Committee make the eligibility determination for our named
executive officers. If granted, severance will generally be paid over a period of 52 weeks in
accordance with regular payroll practices and will generally equal the current annual salary on the
date of termination. Should the executive find gainful employment during the severance period,
severance payments will cease the pay period following the start date of the executives new
employment. We may condition the receipt of severance payments on the execution of a definitive
separation agreement with certain terms, such as a general release of claims. All of our named
executive officers have executed a confidentiality and noncompetition agreement pursuant to which
each is subject to a covenant not to compete during his employment and for one year following
termination whether voluntary or involuntary or with or without cause.
Equity Compensation Plans.
Equity compensation plan awards are governed by our 1995 plan and
2002 plan. The 2002 plan replaced the 1995 plan. All outstanding stock option awards to named
executive officers under the 1995 Plan are fully vested. Upon termination for any reason other
than death, disability, retirement, for cause or in connection with a change in control, vested
stock options that have not expired may be exercised by the employee
25
under the 2002 plan and 1995 plan within 30 days of termination or they will be cancelled by
the company, unless, in the case of our 2002 plan, our Compensation Committee in its sole
discretion elects to extend the exercisability of an option to not more than three (3) months from
termination. Upon termination of service due to death or disability, vested stock options under
the 2002 plan and 1995 plan may be exercised within one (1) year of termination or they will be
cancelled. In the event of such termination, unless a stock option has expired, the time elapsed
from the date of death or disability to the date of exercise shall accrue toward any vesting
requirement as if the employee had remained employed by us. Similarly, upon termination of service
due to retirement, unless a stock option has expired, the time elapsed from the date of retirement
to the date of exercise shall accrue toward any vesting requirement as if the employee had remained
employed by us, provided that the employee has been in material compliance with any retirement
agreement with the company. An employees stock options awarded under the 2002 plan and 1995 plan
may be exercised for three (3) years after the date of termination by reason of retirement.
Upon termination for any reason, other than death, disability, retirement or in connection
with a change in control, PARS shares granted under the 2002 plan to named executive officers for
which the performance objectives have not been met or the restrictions have not lapsed by the date
of termination will forfeit and revert to the company. Upon termination for death, disability or
retirement, PARS shares granted under the 2002 plan to a named executive officer will vest in full.
Upon termination for any reason, including death, disability or retirement, but not including in
connection with a change in control, shares of restricted stock, other than PARS, granted under the
2002 plan to named executive officers for which the restrictions have not lapsed by the date of
termination will forfeit and revert to the company.
Annual Cash Incentives.
Cash incentive awards granted for fiscal year 2007 were governed by
our 2003 Incentive Compensation Plan, or the 2003 plan. Under the 2003 plan, no award was
generally payable to a named executive officer who was not employed by us on the last day of the
fiscal year to which the award related. In July 2007, our Compensation Committee and board of
directors approved the 2008 Incentive Compensation Plan, or 2008 plan, which replaced the 2003 plan
beginning with awards made for fiscal year 2008. The 2008 plan requires that the named executive
officer be employed by us on the date the award is actually paid to receive payment under the plan.
Such date is approximately two months after our fiscal year ends once our Compensation Committee
has certified results for the fiscal year.
Both the 2003 plan and 2008 plan provide that upon termination for death or disability, the
named executive officer or his estate will be paid, at the same time that other awards are paid, an
amount based on the achievement of the relevant performance objectives for that fiscal year,
pro-rated for the number of days that elapsed within the fiscal year prior to such termination.
Our 2008 plan and 2003 plan provide that in the event of a change in control, each named
executive officer is entitled to receive an amount based upon an assumed achievement of the
relevant performance objectives at the 100% target level of the fiscal year, pro rated for the
number of days that elapsed within the fiscal year prior to the change in control. This pro rata
payment will be paid no later than 30 days following the effective date of the change in control to
each named executive officer who is employed by us on the day immediately preceding the effective
date of the change in control.
A change in control is deemed to have occurred when:
|
|
|
with certain limited exceptions, any person acquires beneficial ownership, directly or
indirectly, of our securities representing a majority of the combined voting power of our
then outstanding securities; or
|
|
|
|
|
in the case of our 2008 plan, we consummate, and in the case of our 2003 plan, our
stockholders approve: (i) a plan of complete liquidation of our company; (ii) an agreement
for the sale or disposition of all or substantially all of our assets; or (iii) a merger,
consolidation, or reorganization of our company with or involving any other corporation in
which our voting securities outstanding immediately prior to such transaction do not
continue to represent a majority of the combined voting power outstanding immediately after
such transaction.
|
26
Under our 2003 plan, a change in control would not have occurred under the plan if the named
executive officer was an equity participant or had been identified as a potential equity
participant in the purchasing company or group which consummates the change in control transaction.
Our 2008 plan does not contain a similar purchasing group exception to the definition of change
in control.
Other Benefits.
Upon termination, for any reason other than death, disability, retirement,
for cause or in connection with a change in control, a named executive officer may be entitled to
receive benefits under our medical plan and dental plan until the earlier of the end of a severance
period or the effective date of other, new healthcare coverage. Upon termination for disability or
retirement, no further benefits accrue to the named executive officer except disability payment
under our short-term disability plan which is available to all employees on the same terms. Upon
termination for any reason, all accrued and unused vacation will be payable to the named executive
officer or his / her estate.
Potential Payments to Each Named Executive Officer
The amount of compensation payable to each current named executive officer in varying
termination situations is listed in the tables below. The amounts shown assume that such
termination event was effective as of June 30, 2007, or the last day of our most recently completed
fiscal year. In addition, we have used the closing price of our common stock on the last trading
day of the year ended June 30, 2007 where applicable to determine these amounts. Although we
entered into the retention agreements with our named executive officers in July 2007, the tables
below reflect payments and benefits that would have been due to them under the retention agreements
at June 30, 2007 had they been in effect prior to such date. We have included disclosure in the
footnotes to the table to indicate what our named executive officers would have received absent the
retention agreements.
The amounts shown in the tables below do not reflect the amendments entered into between us
and each of Messrs. Kight, Mangum and Olsen in connection with our proposed merger with Fiserv.
The amendments are specific to the proposed merger with Fiserv, and we have provided information
regarding the interests of our executive officers and directors in the proposed merger with Fiserv
in our proxy statement for a special meeting of stockholders filed with the SEC on September 19,
2007. In addition, the provisions of the amendments are described above under Retention
Agreements.
The amounts shown below are estimates of the amounts which would be paid out to the named
executive officers upon their termination. The actual amounts to be paid out can only be
determined at the time of such persons separation from the company.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Termination
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Termination
|
|
|
|
|
|
|
|
|
|
|
by Company
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
by
|
|
|
|
|
|
|
|
|
|
|
Without
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Company
|
|
|
|
|
|
|
|
|
|
|
Cause, or by
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
for Cause
|
|
|
|
|
|
|
|
|
|
|
Executive for
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
or by
|
|
|
Termination
|
|
|
|
|
|
|
Good Reason,
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Executive
|
|
|
by
|
|
|
Change in
|
|
|
Due to Change
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Without
|
|
|
Company
|
|
|
Control Only
|
|
|
in Control
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Good
|
|
|
Without
|
|
|
Retention
|
|
|
Retention
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Description
|
|
Reason
|
|
|
Cause (1)
|
|
|
Agreement
|
|
|
Agreement (2)
|
|
|
Retirement
|
|
|
Death
|
|
|
Disability
|
|
|
Peter J. Kight
|
|
Severance Payment (Current
base salary = $520,000)
|
|
$
|
|
|
|
$
|
1,040,000
|
|
|
$
|
|
|
|
$
|
1,040,000
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
|
|
|
Short-term Cash Incentive
|
|
|
|
|
|
|
1,196,000
|
|
|
|
598,000
|
|
|
|
1,794,000
|
|
|
|
|
|
|
|
370,760
|
|
|
|
370,760
|
|
|
|
|
|
Long-term Incentive
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Performance Restricted
Stock(3)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2005-2007 Period
|
|
|
|
|
|
|
|
|
|
|
1,323,706
|
|
|
|
1,323,706
|
|
|
|
1,323,706
|
|
|
|
1,323,706
|
|
|
|
1,323,706
|
|
|
|
|
|
2006-2008 Period
|
|
|
|
|
|
|
|
|
|
|
838,974
|
|
|
|
838,974
|
|
|
|
838,974
|
|
|
|
838,974
|
|
|
|
838,974
|
|
|
|
|
|
2007-2009 Period
|
|
|
|
|
|
|
|
|
|
|
1,068,918
|
|
|
|
1,068,918
|
|
|
|
1,068,918
|
|
|
|
1,068,918
|
|
|
|
1,068,918
|
|
|
|
|
|
Stock options Unvested
and Accelerated (4)
|
|
|
|
|
|
|
|
|
|
|
527,559
|
|
|
|
527,559
|
|
|
|
527,559
|
|
|
|
350,988
|
|
|
|
350,988
|
|
|
|
|
|
COBRA Health Coverage (5)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
15,354
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tax Gross-Ups
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,485,299
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Life Insurance Proceeds
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
300,000
|
|
|
|
|
|
|
|
|
|
Accrued Vacation Pay (6)
|
|
|
20,000
|
|
|
|
20,000
|
|
|
|
|
|
|
|
20,000
|
|
|
|
20,000
|
|
|
|
20,000
|
|
|
|
20,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
20,000
|
|
|
$
|
2,256,000
|
|
|
$
|
4,357,157
|
|
|
$
|
8,113,810
|
|
|
$
|
3,779,157
|
|
|
$
|
4,273,346
|
|
|
$
|
3,973,346
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
27
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Termination
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Termination
|
|
|
|
|
|
|
|
|
|
|
by Company
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
by
|
|
|
|
|
|
|
|
|
|
|
Without
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Company
|
|
|
|
|
|
|
|
|
|
|
Cause, or by
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
for Cause
|
|
|
|
|
|
|
|
|
|
|
Executive for
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
or by
|
|
|
Termination
|
|
|
|
|
|
|
Good Reason,
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Executive
|
|
|
by
|
|
|
Change in
|
|
|
Due to Change
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Without
|
|
|
Company
|
|
|
Control Only
|
|
|
in Control
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Good
|
|
|
Without
|
|
|
Retention
|
|
|
Retention
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Description
|
|
Reason
|
|
|
Cause (1)
|
|
|
Agreement
|
|
|
Agreement (2)
|
|
|
Retirement
|
|
|
Death
|
|
|
Disability
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
David E. Mangum
|
|
Severance Payment (Current
base salary = $281,216)
|
|
$
|
|
|
|
$
|
281,216
|
|
|
$
|
|
|
|
$
|
562,432
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
|
|
|
Short-term Cash Incentive
|
|
|
|
|
|
|
|
|
|
|
196,852
|
|
|
|
590,556
|
|
|
|
|
|
|
|
122,048
|
|
|
|
122,048
|
|
|
|
|
|
Long-term Incentive
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Performance Restricted
Stock(3)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2005-2007 Period
|
|
|
|
|
|
|
|
|
|
|
269,461
|
|
|
|
269,461
|
|
|
|
269,461
|
|
|
|
269,461
|
|
|
|
269,461
|
|
|
|
|
|
2006-2008 Period
|
|
|
|
|
|
|
|
|
|
|
170,770
|
|
|
|
170,770
|
|
|
|
170,770
|
|
|
|
170,770
|
|
|
|
170,770
|
|
|
|
|
|
2007-2009 Period
|
|
|
|
|
|
|
|
|
|
|
220,055
|
|
|
|
220,055
|
|
|
|
220,055
|
|
|
|
220,055
|
|
|
|
220,055
|
|
|
|
|
|
Stock options Unvested
and Accelerated (4)
|
|
|
|
|
|
|
|
|
|
|
109,189
|
|
|
|
109,189
|
|
|
|
109,189
|
|
|
|
72,848
|
|
|
|
72,848
|
|
|
|
|
|
COBRA Health Coverage (5)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
15,163
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tax Gross-Ups
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Life Insurance Proceeds
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
300,000
|
|
|
|
|
|
|
|
|
|
Accrued Vacation Pay (6)
|
|
|
10,816
|
|
|
|
10,816
|
|
|
|
|
|
|
|
10,816
|
|
|
|
10,816
|
|
|
|
10,816
|
|
|
|
10,816
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
10,816
|
|
|
$
|
292,032
|
|
|
$
|
966,327
|
|
|
$
|
1,948,442
|
|
|
$
|
780,291
|
|
|
$
|
1,165,998
|
|
|
$
|
865,998
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stephen E. Olsen
|
|
Severance Payment (Current
base salary = $334,204)
|
|
$
|
|
|
|
$
|
334,204
|
|
|
$
|
|
|
|
$
|
668,408
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
|
|
|
Short-term Cash Incentive
|
|
|
|
|
|
|
|
|
|
|
233,942
|
|
|
|
701,826
|
|
|
|
|
|
|
|
145,045
|
|
|
|
145,045
|
|
|
|
|
|
Long-term Incentive
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Performance Restricted
Stock(3)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2005-2007 Period
|
|
|
|
|
|
|
|
|
|
|
274,204
|
|
|
|
274,204
|
|
|
|
274,204
|
|
|
|
274,204
|
|
|
|
274,204
|
|
|
|
|
|
2006-2008 Period
|
|
|
|
|
|
|
|
|
|
|
173,785
|
|
|
|
173,785
|
|
|
|
173,785
|
|
|
|
173,785
|
|
|
|
173,785
|
|
|
|
|
|
2007-2009 Period
|
|
|
|
|
|
|
|
|
|
|
225,442
|
|
|
|
225,442
|
|
|
|
225,442
|
|
|
|
225,442
|
|
|
|
225,442
|
|
|
|
|
|
Other restricted shares (3)
|
|
|
|
|
|
|
|
|
|
|
88,118
|
|
|
|
88,118
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock options Unvested
and Accelerated (4)
|
|
|
|
|
|
|
|
|
|
|
111,082
|
|
|
|
111,082
|
|
|
|
111,082
|
|
|
|
74,170
|
|
|
|
74,170
|
|
|
|
|
|
COBRA Health Coverage (5)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
15,163
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tax Gross-Ups
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Life Insurance Proceeds
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
300,000
|
|
|
|
|
|
|
|
|
|
Accrued Vacation Pay (6)
|
|
|
12,854
|
|
|
|
12,854
|
|
|
|
|
|
|
|
12,854
|
|
|
|
12,854
|
|
|
|
12,854
|
|
|
|
12,854
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
12,854
|
|
|
$
|
347,058
|
|
|
$
|
1,106,573
|
|
|
$
|
2,270,882
|
|
|
$
|
797,367
|
|
|
$
|
1,205,500
|
|
|
$
|
905,500
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mark A. Johnson
|
|
Severance Payment (Current
base salary = $289,652)
|
|
$
|
|
|
|
$
|
289,652
|
|
|
$
|
|
|
|
$
|
579,304
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
|
|
|
Short-term Cash Incentive
|
|
|
|
|
|
|
|
|
|
|
144,826
|
|
|
|
434,478
|
|
|
|
|
|
|
|
89,792
|
|
|
|
89,792
|
|
|
|
|
|
Long-term Incentive
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Performance Restricted
Stock(3)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2005-2007 Period
|
|
|
|
|
|
|
|
|
|
|
198,548
|
|
|
|
198,548
|
|
|
|
198,548
|
|
|
|
198,548
|
|
|
|
198,548
|
|
|
|
|
|
2006-2008 Period
|
|
|
|
|
|
|
|
|
|
|
125,826
|
|
|
|
125,826
|
|
|
|
125,826
|
|
|
|
125,826
|
|
|
|
125,826
|
|
|
|
|
|
2007-2009 Period
|
|
|
|
|
|
|
|
|
|
|
162,890
|
|
|
|
162,890
|
|
|
|
162,890
|
|
|
|
162,890
|
|
|
|
162,890
|
|
|
|
|
|
Stock options Unvested
and Accelerated (4)
|
|
|
|
|
|
|
|
|
|
|
390,333
|
|
|
|
390,333
|
|
|
|
390,333
|
|
|
|
363,398
|
|
|
|
363,398
|
|
|
|
|
|
COBRA Health Coverage (5)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
15,163
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tax Gross-Ups
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
472,218
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Life Insurance Proceeds
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
300,000
|
|
|
|
|
|
|
|
|
|
Accrued Vacation Pay (6)
|
|
|
11,140
|
|
|
|
11,140
|
|
|
|
|
|
|
|
11,140
|
|
|
|
11,140
|
|
|
|
11,140
|
|
|
|
11,140
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
11,140
|
|
|
$
|
300,792
|
|
|
$
|
1,022,423
|
|
|
$
|
2,389,900
|
|
|
$
|
888,737
|
|
|
$
|
1,251,594
|
|
|
$
|
951,594
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
The amounts shown for Mr. Kight represent what he is entitled to receive pursuant to his
employment agreement with us dated May 1, 1997. In addition, Mr. Kight is entitled to receive
executive level placement services for up to six months following the termination date by an
appropriate firm selected and contracted by us. For the other named executive officers, the
amounts shown assume receipt of current base salary over a 52-week period in accordance
|
28
|
|
|
|
|
with our standard severance guidelines; however, any severance payments to those individuals lie in
the discretion of the Compensation Committee. In addition, the Compensation Committee may choose to
pay medical and dental benefits for a period of time following termination.
|
|
(2)
|
|
Includes all amounts due to a named executive solely by virtue of a change in control (as
reported in a separate column)
plus
additional amounts due as a result of a qualifying
termination following such change in control. The severance, short-term cash incentive and accrued
vacation payments are payable in a lump sum within 30 days of termination. Our July 2007 retention
agreement with Mr. Kight superseded the provisions in his 1997 employment agreement related to a
change in control and his termination following a change in control. Pursuant to the superseded
provisions of Mr. Kights employment agreement, upon a qualifying termination after a change in
control, he could have received total payments and benefits of up to $6,007,157. Prior to the
execution of retention agreements, upon a qualifying termination after a change in control, our
other named executive officers could have been eligible to receive payments and benefits under our
standard severance guidelines and incentive plans. These individuals could have received total
payments and benefits of up to: $1,258,359 for Mr. Mangum; $1,453,631 for Mr. Olsen; and $1,323,215
for Mr. Johnson.
|
|
(3)
|
|
Represents the fair market value of performance accelerated restricted stock, as well as
restricted stock for Mr. Olsen, whose vesting would be accelerated in full based on the closing
price of our common stock on June 29, 2007 ($40.20).
|
|
(4)
|
|
In the event of a change in control, the amount represents the value of stock options whose
vesting would be accelerated in full based on the difference between the closing price of our
common stock on June 29, 2007 ($40.20) and the exercise price of the stock option. Per the terms
of our 2002 plan, in the event of retirement on the one hand or death or disability on the other
hand, the amounts set forth above include stock options that would vest within three years or one
year, respectively, following termination on June 30, 2007.
|
|
(5)
|
|
Estimate of our contribution amount needed to maintain COBRA health benefits for an 18-month
period following the termination date.
|
|
(6)
|
|
Assumes two weeks of accrued vacation at the time of separation.
|
Separation Agreement with Randal A. McCoy
Effective as of August 24, 2007, Mr. McCoy resigned as our Executive Vice President and as
General Manager of our Software Division. In connection with Mr. McCoys resignation, Mr. McCoy
entered into a separation agreement and general release, dated August 14, 2007, with our company,
which we refer to as the separation agreement. Pursuant to the terms of the separation agreement,
Mr. McCoy is entitled to receive severance equal to one year of his then-current salary of
$291,997, or the severance payment. The severance payment will be paid in equal installments on the
regular payroll days of our company over a twelve-month period, which we refer to as the severance
period. In the event that Mr. McCoy finds subsequent employment during the severance period, the
severance payment will terminate the pay period following the start date of his new employment. In
addition to the severance payment, Mr. McCoy is entitled to continue receiving benefits under our
medical plan and dental plan until the earlier of the end of the severance period or the effective
date of other, new healthcare coverage. The approximate cost of Mr. McCoys continuing medical and
dental coverage for the severance period is approximately $10,000. In addition, in accordance with
the terms of our 1995 plan and 2002 plan, any vested stock options, if not exercised, expire 30
days and 90 days, respectively, after his termination date. Pursuant to the separation agreement,
Mr. McCoy agreed to release our company from all claims, causes of action, damages and expenses of
any and every nature whatsoever. Mr. McCoy also affirmed his obligations under the confidentiality
and
noncompetition agreement he executed when we originally employed him pursuant to which he is
subject to a covenant not to compete during his employment with us and for one year following
termination whether voluntary or involuntary or with or without cause. Finally, Mr. McCoy agreed
that the severance payment and other benefits to be received during the severance period will be
made in lieu of any payments specified in the retention agreement he executed with us in July 2007,
as amended in August 2007 in connection with our proposed merger with Fiserv, and that the
separation agreement terminates all rights and obligations described in the retention agreement, as
amended.
29
Director Compensation
We use a combination of cash and equity-based compensation to attract and retain qualified
candidates to serve on the board. Our Governance Committee reviews non-employee director
compensation on an annual basis and recommends compensation for non-employee directors to our
board. In reviewing and making its recommendation, our Governance Committee considers the cash and
equity-based compensation, including combination thereof, paid to directors serving at market
companies in the technology and service industries. In fiscal 2004, we first engaged the services
of Pearl Meyer & Partners, a compensation consulting practice, to assist us in reviewing our
compensation program for outside directors and making recommendations to the Governance Committee
and board for approval. We began our current director compensation program in fiscal 2005 and
engaged the services of Pearl Meyer in later years to update the comparative director compensation
information for our market. Pearl Meyer has evaluated the compensation of our directors versus the
competitive market and updated its review from fiscal 2004 based on our director pay philosophy
developed at that time. Our director pay philosophy, beginning with fiscal 2005, has been to move
toward the 75
th
percentile over time for total compensation; however, the Governance
Committee and our board do not view percentile targets as specific objectives we must reach. Our
Governance Committee, in formulating its recommendation, considers a variety of factors so that our
director compensation is appropriate for our company and the responsibilities of our directors.
Our Governance Committee received assistance from our Chairman and Chief Executive Officer and
Chief Financial Officer in structuring compensation for our non-employee directors for fiscal 2007.
Management reviewed director compensation data for our market, including updated information
provided by Pearl Meyer, and recommended the cash and equity components to be received by directors
for their service. The Governance Committee then formulated its recommendation, which was approved
by our board. Based on the Governance Committees recommendation, on July 27, 2006, the board
revised the compensation of non-employee directors for fiscal 2007 as shown in the director
compensation table below.
Annual Fees
Per the recommendation of our Governance Committee, in fiscal 2007, Messrs. Boardman, Dixon,
Quinn and Wilkins as non-employee directors received the following compensation:
|
|
|
an annual fee of $50,000 for service on the board;
|
|
|
|
|
an additional annual fee of $10,000 for the Chairman of the Audit Committee (Mr. Dixon);
|
|
|
|
|
an additional annual fee of $5,000 for the Chairman of the Governance Committee (Mr.
Boardman through September 2006, Mr. Quinn thereafter); and the Chairman of the
Compensation Committee (Mr. Quinn through September 2006, Mr. Wilkins thereafter);
|
|
|
|
|
an additional annual fee of $5,000 for non-Chairman members of the Audit Committee; and
|
|
|
|
|
an additional annual fee of $2,500 for non-Chairman members of the Compensation
Committee and Governance Committee.
|
Ms. Cotner joined our board as a non-employee director on May 2, 2007 and received the
following compensation for her service during the remainder of fiscal 2007:
|
|
|
a fee of $12,500 for her service on the board;
|
|
|
|
|
an additional fee of $1,250 for her service on the Audit Committee; and
|
|
|
|
|
an additional fee of $625 for her service on the Compensation Committee.
|
In addition, C. Kim Goodwin served on the board until October 18, 2006 and received the
following compensation for her service for that portion of fiscal 2007:
30
|
|
|
a fee of $12,500 for service on the board; and
|
|
|
|
|
a fee of $1,250 for service on the Audit Committee.
|
These fees were paid quarterly at the end of each quarter. Each director can elect to receive
these fees in either cash or stock, or a combination of both, and can elect to defer the stock
portion of such payment until his or her service on the board terminates for any reason. If a
director elects to receive the payment of his or her fees in stock, the number of shares that the
director is entitled to receive each quarter is calculated by dividing the amount of the directors
fee due for that quarter by the closing sale price of our common stock on the last trading day of
the quarter. To date, only Mr. Boardman, Ms. Cotner and Ms. Goodwin have elected to receive their
director fees in stock and have elected to defer such payments. From July 1, 2006 through June 30,
2007, Mr. Boardman deferred payment of $55,625 in director fees (equivalent to 1,395 shares of our
common stock) until termination of his board service; from May 2, 2007 through June 30, 2007, Ms.
Cotner deferred payment of $14,375 in director fees (equivalent to 352 shares of our common stock)
until termination of her board service; and from July 1, 2006 through October 18, 2006, Ms. Goodwin
deferred payment of $13,750 in director fees (equivalent to 333 shares of our common stock) until
termination of her board service. In addition, Ms. Goodwin had previously deferred payment of
$25,000 in director fees (equivalent to 499 shares of our common stock) for her service on the
board from February 2, 2006 through June 30, 2006. As a result of her resignation from the board
on October 18, 2006, Ms. Goodwin has received all of her deferred payments in director fees in
shares of our common stock.
For the fiscal year ending June 30, 2008, our non-employee directors will receive the same
annual fee compensation noted above for fiscal 2007.
Restricted Stock and Stock Options
All of our non-employee directors are eligible to receive awards of stock options and shares
of restricted stock pursuant to our Amended and Restated 2002 Stock Incentive Plan, or 2002 plan.
Such awards are recommended by the Governance Committee and awarded by the full board of directors.
Upon their election to the board, our outside directors receive an initial grant of stock options
to purchase 10,000 shares of our common stock. In addition, our outside directors receive an
annual grant of restricted stock. For fiscal 2007, the board of directors determined that each
outside director would receive a grant of restricted stock worth $80,000, which shares were awarded
effective August 4, 2006 and valued at the closing stock price on August 3, 2006, or $37.27, in
accordance with the terms of the 2002 plan at the time. These shares of restricted stock vested on
August 4, 2007. Due to her resignation from the board on October 18, 2006, the shares of
restricted stock granted to Ms. Goodwin did not vest.
The annual restricted stock awards for fiscal 2007 to our outside directors were granted
effective as of the third trading day after we publicly announced our financial results for the
last completed fourth quarter of and fiscal 2006. The board of directors believes that material
information regarding our last completed fourth quarter and fiscal year should be available to the
public before the number of awarded restricted stock shares is determined. At the time of these
awards for fiscal 2007, our 2002 plan defined the fair market value of a share as the closing price
of our common stock on the last trading day before the effective grant date. As a result, the
number of restricted stock shares granted to an outside director for fiscal 2007 was determined by
dividing (1) the dollar value of the award set by the board of directors in July ($80,000) by (2)
the closing price of our common stock on August 3, 2006, the last trading day immediately prior to
the effective grant date.
On May 2, 2007, upon her election to the board, Ms. Cotner received $20,000 worth of
restricted stock, or 593 shares, valued at the closing price of our common stock on May 1, 2007.
These shares of restricted stock vested on August 4, 2007. In addition, on May 2, 2007, Ms. Cotner
received stock options to purchase 10,000 shares of our common stock at an exercise price of $33.69
per share, valued at the closing price of our common stock on May 1, 2007 in accordance with the
terms of the 2002 plan. These stock options vest 20% per year of service from the date of grant
and expire on May 2, 2017.
On November 2, 2006, the Governance Committee of the board of directors recommended, and the
board approved, a one-time grant to Mr. William Boardman, one of our outside directors, of
restricted shares of common stock worth $75,000. The shares of restricted stock were granted
effective November 3, 2006, and were valued at $38.55 per share, which was the closing price of our
common stock on November 2, 2006. Thus, Mr. Boardman
31
received a grant of 1,945 restricted shares. The grant was made pursuant to our 2002 plan, and
the restricted shares will vest in 25% increments on the first through fourth anniversaries of the
date of grant. This one-time award was meant to compensate Mr. Boardman for the expiration on July
19, 2006 of an option to purchase 6,000 shares of our common stock at an exercise price of $14.25
per share, which Mr. Boardman was initially awarded by the board on July 19, 1996 for his services
on the board.
Stock Ownership Guidelines
In July 2004, our board of directors, upon recommendation from the Governance Committee,
approved share ownership guidelines for our outside directors. The objective of these guidelines
is to build long-term commitment and perspective. The share ownership guidelines provide that with
respect to restricted stock grants or stock option grants for the 2005 fiscal year forward, an
after-tax value of each restricted stock award that vests or option that is exercised will be
calculated for each outside director. The after-tax value will be expressed as a number of shares
based on the share price of our common stock on the date the restricted stock award vests or the
option is exercised. Outside directors are expected to retain 50% of the after-tax gain over a
rolling five (5) year period for so long as they remain directors. Since these guidelines provide
for a rolling five (5) year period over which to measure the after-tax gain retained by our outside
directors, they are not expected to comply with these guidelines until after the completion of our
fiscal year ending June 30, 2009.
Other
We reimburse all directors for travel and other necessary business expenses incurred by them
in connection with their board or committee service and extend coverage to them under our travel
accident and directors and officers indemnity insurance policies.
Director Compensation for Fiscal Year 2007
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fees Earned or
|
|
Stock
|
|
Option
|
|
|
|
|
Paid in Cash
|
|
Awards
|
|
Awards
|
|
|
Name
(1)
|
|
($)
(4)
|
|
($)
(5)
|
|
($)
(6)
|
|
Total ($)
|
William P. Boardman
|
|
$
|
55,625
|
|
|
$
|
93,103
|
|
|
$
|
0
|
|
|
$
|
148,728
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
James D. Dixon
|
|
$
|
65,000
|
|
|
$
|
79,044
|
|
|
$
|
0
|
|
|
$
|
144,044
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Eugene F. Quinn
|
|
$
|
60,000
|
|
|
$
|
79,044
|
|
|
$
|
0
|
|
|
$
|
139,044
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Jeffrey M. Wilkins
|
|
$
|
59,375
|
|
|
$
|
79,044
|
|
|
$
|
0
|
|
|
$
|
138,419
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
C. Beth Cotner
(2)
|
|
$
|
14,375
|
|
|
$
|
13,319
|
|
|
$
|
11,230
|
|
|
$
|
38,924
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
C. Kim Goodwin
(3)
|
|
$
|
13,750
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
13,750
|
|
|
|
|
(1)
|
|
Mr. Kight and Mr. Johnson do not receive compensation in any form for their service on
the board of directors. Each of Mr. Kight and Mr. Johnson is a named executive officer
for purposes of this Form 10-K/A, and his compensation as such is set forth above under
Summary Compensation for Fiscal Year 2007.
|
|
(2)
|
|
Ms. Cotner joined the board on May 2, 2007, and amounts reported reflect her period of
service on the board during fiscal 2007.
|
|
(3)
|
|
Ms. Goodwin resigned from the board effective October 18, 2006, and amounts reported
reflect her period of service on the board during fiscal 2007.
|
|
(4)
|
|
Mr. Boardman received $50,000 in annual retainer fees, $1,250 in fees as chairman of
the Governance Committee for one quarter, $1,875 as a member of the Governance Committee
for three quarters, and
|
32
|
|
|
|
|
$2,500 as a member of the Compensation Committee for the full year. From July 1, 2006
through June 30, 2007, Mr. Boardman elected to receive payment of $55,625 in director fees
in shares of our common stock rather than cash (equivalent to 1,395 shares of our common
stock) and also elected to defer receipt of the shares until termination of his board
service.
|
|
|
|
Mr. Dixon received $50,000 in annual retainer fees, $10,000 as chairman of the Audit
Committee for the full year, and $2,500 for each of his memberships on the Governance and
Compensation Committees for the full year.
|
|
|
|
Mr. Quinn received $50,000 in annual retainer fees, $1,250 as chairman of the Compensation
Committee for one quarter, $3,750 as chairman of the Governance Committee for three quarters
and $5,000 as a member of the Audit Committee for the full year.
|
|
|
|
Mr. Wilkins received $50,000 in annual retainer fees, $5,000 as a member of the Audit
Committee for the full year, $3,750 as a chairman of the Compensation Committee for three
quarters and $625 as a member of the Governance Committee for one quarter.
|
|
|
|
Ms. Cotner received $12,500 in retainer fees for one quarter, $1,250 as a member of the
Audit Committee for one quarter and $625 as a member of the Governance Committee for one
quarter. From May 2, 2007 through June 30, 2007, Ms. Cotner elected to receive payment of
$14,375 in director fees in shares of our common stock rather than cash (equivalent to 352
shares of our common stock) and also elected to defer receipt of the shares until
termination of her board service.
|
|
|
|
Ms. Goodwin received $12,500 in retainer fees for one quarter and $1,250 as a member of the
Audit Committee for one quarter. From July 1, 2006 through October 18, 2006, Ms. Goodwin
elected to receive payment of $13,750 in director fees in shares of our common stock rather
than cash (equivalent to 333 shares of our common stock) and also elected to defer receipt
of the shares until termination of her board service.
|
|
(5)
|
|
Represents dollar amount recognized for financial reporting purposes for the fiscal
year ended June 30, 2007, in accordance with FAS 123(R) and thus may include amounts from
awards granted in and prior to fiscal year 2007. This amount disregards any estimates of
forfeiture during the fiscal year but accounting for any actual forfeiture by a director
during the fiscal year. Assumptions used in the calculation of these amounts are included
in note 13 to our audited consolidated financial statements for the fiscal year ended June
30, 2007, included in our Annual Report on Form 10-K filed with the Securities and Exchange
Commission on August 24, 2007.
|
|
|
|
There can be no assurance that the FAS 123(R) amounts will ever be realized. The full
grant date fair value of the annual restricted stock award granted to each of our outside
directors (other than Ms. Cotner) for fiscal 2007, computed in accordance with FAS 123(R),
was $80,019. The full grant date fair value of the restricted stock award granted to Ms.
Cotner upon her election to the board in May 2007, computed in accordance with FAS 123(R),
was $19,978. The full grant date fair value of the restricted stock award granted to Mr.
Boardman in November 2006, computed in accordance with FAS 123(R), was $74,980.
|
|
|
|
As of June 30, 2007, our directors had the following number of shares of restricted stock
outstanding: Mr. Boardman (4,092), Mr. Dixon (2,147), Mr. Quinn (2,147), Mr. Wilkins
(2,147) and Ms. Cotner (593). All such shares of restricted stock for Messrs. Dixon, Quinn
and Wilkins and Ms. Cotner vested on August 4, 2007 and 2,147 shares of restricted stock for
Mr. Boardman vested on August 4, 2007.
|
|
(6)
|
|
Represents dollar amount recognized for financial reporting purposes for the fiscal
year ended June 30, 2007, in accordance with FAS 123(R). This amount disregards any
estimates of forfeiture during the fiscal year but accounting for any actual forfeiture by
a director during the fiscal year. Assumptions used in the calculation of these amounts are
included in note 13 to our audited consolidated financial statements for the fiscal year
ended June 30, 2007, included in our Annual Report on Form 10-K filed with the Securities
and Exchange Commission on August 24, 2007. There can be no assurance that the FAS 123(R)
amounts will ever be realized. The full grant date fair value of the stock option award
granted to Ms. Cotner upon her election to the board in May 2007, computed in accordance
with FAS 123(R), was $336,900. As of June 30, 2007, our directors had the following number
of stock options outstanding: Mr. Boardman (44,000), Mr. Dixon (20,000), Mr. Quinn
(15,000), Mr. Wilkins (36,000) and Ms. Cotner (10,000).
|
33
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder
Matters.
Equity Compensation Plan Information
The following table sets forth additional information as of June 30, 2007, concerning shares
of our common stock that may be issued upon the exercise of options and other rights under our
existing equity compensation plans and arrangements, divided between plans approved by our
stockholders and plans or arrangements not submitted to our stockholders for approval. The
information includes the number of shares covered by, and the weighted average exercise price of,
outstanding options and other rights and the number of shares remaining available for future grants
(excluding the shares to be issued upon the exercise of outstanding options, warrants, and other
rights).
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of securities
|
|
|
Number of securities to be
|
|
Weighted-average
|
|
remaining available for
|
|
|
issued upon exercise of
|
|
exercise price of
|
|
issuance under equity
|
|
|
outstanding options,
|
|
outstanding options,
|
|
compensation plans
|
|
|
restricted shares,
|
|
restricted shares,
|
|
(excluding securities
|
|
|
warrants and rights
|
|
warrants and rights
|
|
reflected in column (a))
|
|
|
(a)
|
|
(b)
|
|
(c)
|
Equity compensation
plans approved by
security holders
(1)
|
|
|
3,734,500
|
|
|
$
|
32.43
|
|
|
|
4,338,523
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity compensation
plans not approved
by security holders
|
|
|
0
|
|
|
$
|
0
|
|
|
|
0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
3,734,500
|
|
|
$
|
32.43
|
|
|
|
4,338,523
|
|
|
|
|
|
|
|
(1)
|
|
Equity compensation plans approved by stockholders include the Third Amended and
Restated 1995 Stock Option Plan, the 2006 Associate Stock Purchase Plan, and the Amended and
Restated 2002 Stock Incentive Plan.
|
Ownership of Our Common Stock by Directors and Executive Officers
The following table sets forth information regarding beneficial ownership of our common stock
by each of our directors, each of our executive officers named in the Executive Compensation Table
and our directors and executive officers as a group as of October 15, 2007. Percentage
computations are based on 88,414,651 shares of our common stock outstanding as of October 15, 2007.
|
|
|
|
|
|
|
|
|
|
|
Shares Beneficially Owned
(1)(2)
|
Stockholder
|
|
Number
|
|
Percent
|
Peter J. Kight
(3)
|
|
|
5,754,085
|
|
|
|
6.4
|
%
|
|
|
|
|
|
|
|
|
|
Mark A. Johnson
(4)
|
|
|
1,095,886
|
|
|
|
1.2
|
%
|
|
|
|
|
|
|
|
|
|
William P. Boardman
(5)
|
|
|
54,527
|
|
|
|
*
|
|
|
|
|
|
|
|
|
|
|
James D. Dixon
|
|
|
26,238
|
|
|
|
*
|
|
|
|
|
|
|
|
|
|
|
C. Beth Cotner
(5)
|
|
|
1,459
|
|
|
|
*
|
|
|
|
|
|
|
|
|
|
|
Eugene F. Quinn
|
|
|
17,500
|
|
|
|
*
|
|
|
|
|
|
|
|
|
|
|
Jeffrey M. Wilkins
|
|
|
28,000
|
|
|
|
*
|
|
34
|
|
|
|
|
|
|
|
|
|
|
Shares Beneficially Owned
(1)(2)
|
Stockholder
|
|
Number
|
|
Percent
|
|
|
|
|
|
|
|
|
|
David E. Mangum
|
|
|
105,032
|
|
|
|
*
|
|
|
|
|
|
|
|
|
|
|
Stephen E. Olsen
|
|
|
86,295
|
|
|
|
*
|
|
|
|
|
|
|
|
|
|
|
Randal A. McCoy
(6)
|
|
|
53,309
|
|
|
|
*
|
|
|
|
|
|
|
|
|
|
|
All current directors and
executive officers as a group (14
people)
(3)(4)(5)
|
|
|
7,219,763
|
|
|
|
8.0
|
%
|
|
|
|
*
|
|
Represents beneficial ownership of less than 1% of our outstanding common stock.
|
|
(1)
|
|
Beneficial ownership is determined in accordance with the rules of the Securities and Exchange Commission, which generally
attribute beneficial ownership of securities to persons who possess sole or shared voting power and/or investment power
with respect to those shares.
|
|
(2)
|
|
Includes shares purchasable within 60 days after October 15, 2007, pursuant to the exercise of options covering:
|
|
|
|
1,180,101 shares for Mr. Kight;
|
|
|
|
166,379 shares for Mr. Johnson;
|
|
|
|
44,487 shares for Mr. Boardman;
|
|
|
|
20,000 shares for Mr. Dixon;
|
|
|
|
15,000 shares for Mr. Quinn;
|
|
|
|
28,000 shares for Mr. Wilkins;
|
|
|
|
76,617 shares for Mr. Olsen;
|
|
|
|
96,624 shares for Mr. Mangum;
|
|
|
|
45,971 shares for Mr. McCoy; and
|
|
|
|
1,665,764 shares for all current directors and executive officers as a group.
|
|
(3)
|
|
Includes 260,222 shares held by the Kight Family Trust II, 2,286 shares held in the Tiso Trust, 2,365 in the Ayers Trust
and 20,250 shares held in each of The 2004 Allison Marie Kight Trust and The Preston Gregory Kight Trust. Mr. Kight
disclaims ownership of those shares in which he has no pecuniary interest. Does not include 8,600 shares held in the Peter
J. Kight and Teresa J. Kight 1995 Childrens Trust and 439,800 shares held by charitable foundations of which Mr. Kight is
the trustee and disclaims any beneficial ownership.
|
|
(4)
|
|
Does not include 59,203 shares held by the Mark A. Johnson 1997 Irrevocable Childrens Trust in which he has no pecuniary
interest and disclaims any beneficial ownership.
|
|
(5)
|
|
Includes 3,503 and 666 deferred stock units for Mr. Boardman and Ms. Cotner, respectively, that convert to an equal number
of shares of common stock upon retirement from the board of directors.
|
|
(6)
|
|
Mr. McCoy resigned from our company effective August 24, 2007. The numbers presented in this table for Mr. McCoy are as of
that date.
|
35
Ownership of Our Common Stock by Principal Stockholders
The following table sets forth information as of October 15, 2007 (except as noted below),
relating to the beneficial ownership of our common stock by each person known by us to own
beneficially more than 5% of the outstanding shares of our common stock.
|
|
|
|
|
|
|
|
|
|
|
Shares Beneficially Owned
(1)
|
Stockholder
|
|
Number
|
|
Percent
(2)
|
Microsoft Corporation
(3)
|
|
|
|
|
|
|
|
|
One Microsoft Way
Redmond, Washington 98052
|
|
|
8,567,250
|
|
|
|
9.7
|
%
|
|
Waddell & Reed Financial, Inc.
(4)
|
|
|
|
|
|
|
|
|
6300 Lamar Avenue
Overland Park, Kansas 66202
|
|
|
8,516,520
|
|
|
|
9.6
|
%
|
|
Peter J. Kight
(5)(6)
|
|
|
|
|
|
|
|
|
4411 East Jones Bridge Road
Norcross, Georgia 30092
|
|
|
5,754,085
|
|
|
|
6.4
|
%
|
|
T. Rowe Price Associates, Inc.
(7)
|
|
|
|
|
|
|
|
|
100 E. Pratt Street
Baltimore, MD 21202
|
|
|
4,925,966
|
|
|
|
5.6
|
%
|
|
|
|
(1)
|
|
Beneficial ownership is determined in accordance with the
rules of the Securities and Exchange Commission which
generally attribute beneficial ownership of securities to
persons who possess sole or shared voting power and/or
investment power with respect to those shares. Unless
otherwise indicated, the persons in the table above have
sole voting power and sole investment power with respect to
all reported shares.
|
|
(2)
|
|
Percentage computations are based on 88,414,651 shares of
our common stock outstanding as of October 15, 2007.
|
|
(3)
|
|
Based on information contained in a Schedule 13G filed with
the Securities and Exchange Commission by Microsoft
Corporation on September 11, 2000.
|
|
(4)
|
|
According to information contained in a Schedule 13G filed
with the Securities and Exchange Commission by Waddell &
Reed Financial, Inc., Waddell & Reed Financial Services,
Inc., Waddell & Reed, Inc., Waddell & Reed Investment
Management Company and Ivy Investment Management Company
(collectively the Filing Persons) on February 14, 2003,
and as amended on January 30, 2004, February 8, 2005,
February 1, 2006 and February 9, 2007, the securities
reported above are beneficially owned by one or more
open-end investment companies or other managed accounts,
which are advised or sub-advised by one of the Filing
Persons. Waddell & Reed, Inc. is a broker-dealer and
underwriting subsidiary of Waddell & Reed Financial
Services, Inc., a parent holding company. In turn, Waddell
& Reed Financial Services, Inc. is a subsidiary of Waddell
& Reed Financial, Inc., a publicly traded company. The
investment advisory contracts grant Ivy Investment
Management Company and Waddell & Reed Investment Management
Company all investment and/or voting power over securities
owned by such advisory clients. The investment sub-advisory
contracts grant Ivy Investment Management Company and
Waddell & Reed Investment Management Company investment
power over securities owned by such sub-advisory clients
and, in most cases, voting power. Any investment
restriction of a sub-advisory contract does not restrict
investment discretion or power in a material manner.
Therefore, Ivy Investment Management Company and/or Waddell
& Reed Investment Management Company may be deemed the
beneficial owner of the securities reported in this table
under Rule 13d-3 of the Securities Exchange Act of 1934, as
amended (the Exchange Act). The Filing Persons do not
believe they are acting as a group for purposes of
Section 13(d) of the Exchange Act. Indirect beneficial
ownership is attributed to the respective parent companies
|
36
|
|
|
|
|
solely because of the parent companies control
relationship to Waddell & Reed Investment Management
Company. According to the Schedule 13G, the following
entities are deemed to beneficially own the following
shares of our common stock: Ivy Investment Management
Company (1,297,771 shares), Waddell & Reed Investment
Management Company (7,218,749 shares), Waddell & Reed, Inc.
(7,218,749 shares), Waddell & Reed Financial Services, Inc.
(7,218,749 shares) and Waddell & Reed Financial, Inc.
(8,516,520 shares).
|
|
(5)
|
|
Includes 1,180,101 shares purchasable by Mr. Kight pursuant
to the exercise of options within 60 days after October 15,
2007.
|
|
(6)
|
|
Includes 260,222 shares held by the Kight Family Trust II,
2,286 shares held in the Tiso Trust, 2,365 in the Ayers
Trust and 20,250 shares held in each of The 2004 Allison
Marie Kight Trust and The Preston Gregory Kight Trust. Mr.
Kight disclaims ownership of those shares in which he has
no pecuniary interest. Does not include 8,600 shares held
in the Peter J. Kight and Teresa J. Kight 1995 Childrens
Trust and 439,800 shares held by charitable foundations of
which Mr. Kight is the trustee and disclaims any beneficial
ownership.
|
|
(7)
|
|
These shares are owned by various individual and
institutional investors to which T. Rowe Price Associates,
Inc. serves as investment adviser with power to direct
investments and/or sole power to vote the shares.
According to information contained in a Schedule 13G filed
with the Securities and Exchange Commission by T. Rowe
Price Associates, Inc. on February 13, 2007, T. Rowe Price
Associates, Inc. exercises sole voting power with respect
to 1,088,488 shares and sole dispositive power with respect
to 4,925,966 shares. For purposes of the reporting
requirements of the Exchange Act, T. Rowe Price Associates,
Inc. is deemed to be the beneficial owners of such shares;
however, T. Rowe Price Associates, Inc. expressly disclaims
that it is, in fact, the beneficial owner of such shares.
|
Item 13. Certain Relationships and Related Transactions, and Director Independence.
Director Independence
The Board of Directors has determined that a majority of the directors are independent as
required by the Nasdaq Rules. The Board has affirmatively determined by resolution that directors
Boardman, Dixon, Quinn, Wilkins and Cotner are independent within the meaning of the Nasdaq Rules.
In addition, prior to her resignation, the board affirmatively determined by resolution that Ms.
Goodwin was an independent director within the meaning of the Nasdaq Rules. There were no specific
transactions, relationships or arrangements requiring consideration by the Board of Directors in
making these independence determinations.
Messrs. Quinn (Chairman), Dixon and Boardman serve as members of our Governance Committee.
The members of our Compensation Committee are Messrs. Wilkins (Chairman), Boardman and Dixon and
Ms. Cotner. Messrs. Dixon (Chairman), Quinn, and Wilkins and Ms. Cotner serve as members of our
Audit Committee. All members of each of our Governance Committee, Compensation Committee and Audit
Committee are independent, as defined by the Nasdaq Rules.
Certain Relationships and Related Transactions
Transactions Between Microsoft Corporation and CheckFree Corporation
On September 1, 2000, we acquired TransPoint from Microsoft, First Data Corporation and
Citibank, N.A. in exchange for 17 million shares of our common stock. As part of the TransPoint
acquisition, Microsoft received 8,567,250 shares of our common stock. Pursuant to the terms of the
TransPoint acquisition, we entered into a stockholder agreement, dated as of September 1, 2000,
with Microsoft that gave Microsoft the right to designate for election a director to our board for
such time as it owned at least 6,425,438 shares of our common stock. On August 29, 2006, we agreed
with Microsoft to terminate the stockholder agreement. As of June 30, 2007, Microsoft continued to
own 8,567,250 shares of our common stock and was a greater than 5% stockholder of our company.
37
In October 2006, we entered into a consulting services work order agreement for Microsoft for
total associated fees of $114,000 to be paid by us to Microsoft. In February 2007, we entered into
a work order agreement with Microsoft with total estimated associated fees of approximately
$580,000. In May 2007, we signed a support services agreement with Microsoft, and we pre-purchased
a number of hours thereunder equating to $996,000 for use over a three-year term. In June 2007, we
amended a written agreement with Microsoft from January 2005 pursuant to which we license Microsoft
desktop software, Office professional and Windows desktop operating system software. The original
agreement from 2005 requires a payment by us of $1,900,000 over a three-year term. The 2007
amendment moved over existing products licensed under an expired agreement from April 2004 and
granted us a license for new products for a one-time fee of $111,000. During the year ended June
30, 2007, we also entered into other agreements with Microsoft where the associated fees are
approximately $48,000 per year plus per minute usage fees in one instance, $34,500 paid over a
three-year commitment in a second instance and $1,500 annually in a third instance.
During the year ended June 30, 2007, we incurred approximately $2,100,600 of expense for
Microsoft products, software user licenses, support and other services under all of our agreements.
Review and Approval of Transactions with Related Parties
The Governance Committee of our board of directors is responsible for the review and approval
or ratification of interested transactions with related parties under our written Related Party
Transaction Policies and Procedures, which we refer to as our related party policy. An interested
transaction is any transaction, arrangement, relationship or series of similar transactions,
arrangements or relationships in which:
|
|
|
the amount involved will or may be expected to exceed $90,000 in any fiscal year;
|
|
|
|
|
our company is a participant; and
|
|
|
|
|
any related party has or will have a direct or indirect interest other than solely as a
result of being a director or less than 10 percent beneficial owner of another entity.
|
A related party is any person who is or was since the beginning of the last fiscal year an
executive officer, director or nominee for election as a director of our company, a greater than 5
percent beneficial owner of our common stock or an immediate family member of any of the foregoing.
The Governance Committee will review the material facts of all interested transactions that
require approval and either approve or disapprove of the entry into the interested transaction,
subject to the exceptions described below. If advance approval by our Governance Committee is not
feasible, the interested transaction will be considered and, if the Governance Committee determines
it to be appropriate, ratified at its next regularly scheduled meeting. In determining whether to
approve or ratify an interested transaction, our Governance Committee will take into account, among
other factors it deems appropriate, whether the interested transaction is on terms no less
favorable than terms generally available to an unaffiliated third-party under the same or similar
circumstances as well as the extent of the related partys interest in the transaction. In
addition, no director will participate in any discussion or approval of an interested transaction
for which he or she is a related party, except to provide all material information concerning the
interested transaction to the Governance Committee.
Our Governance Committee has reviewed the following types of interested transactions and
determined that each will be deemed pre-approved by the Committee, even if the aggregate amount
involved will exceed $90,000:
|
1.
|
|
any employment by us of an executive officer if the related compensation is required to
be reported by us pursuant to Item 402 of the SECs Regulation S-K, or if the executive
officer is not an immediate family member of another one of our executive officers or
directors, the related compensation would be reported under Item 402 of Regulation S-K if
he or she was a named executive officer and our Compensation Committee approved such
compensation;
|
|
|
2.
|
|
any compensation paid to a director if we are required to report such compensation
under Item 402 of Regulation S-K;
|
38
|
3.
|
|
any transaction with another company at which a related partys only relationship is as
a non-executive officer employee, director or beneficial owner of less than 10 percent of
that companys shares, but only if the aggregate amount involved does not exceed the lesser
of $100,000 or 2 percent of that companys total annual revenues;
|
|
|
4.
|
|
any charitable contribution, grant or endowment by us to a charitable organization,
foundation or university at which a related partys only relationship is as a non-executive
officer employee or director, but only if the aggregate amount involved does not exceed the
lesser of $100,000 or 2 percent of the charitable organizations total annual receipts;
|
|
|
5.
|
|
any transaction where the related partys interest arises solely from ownership of our
common stock and all holders of our common stock receive the same benefit on a pro rata
basis;
|
|
|
6.
|
|
any transaction involving a related party where the rates or charges involved are
determined by a competitive bid process; and
|
|
|
7.
|
|
any transaction with a related party involving the rendering of services as a common or
contract carrier or public utility, at rates or charges fixed in conformity with law or
government authority.
|
In addition, our Governance Committee may delegate to its Chair the authority to pre-approve or
ratify (as applicable) any interested transaction that does not involve a director or nominee for
election as a director and in which the amount involved is expected to be less than an amount
specified by the Governance Committee. In connection with each regularly scheduled meeting of our
Governance Committee, a summary of each new interested transaction deemed pre-approved pursuant to
numbers 3 and 4 above and each new interested transaction pre-approved by the Chair of the
Governance Committee will be provided to the full Committee for its review.
If an interested transaction will be ongoing, the Governance Committee may establish
guidelines for our management to follow in its ongoing dealings with the related party.
Thereafter, the Governance Committee, on at least an annual basis, will review and assess ongoing
relationships with the related party to ensure that they are in compliance with the Committees
guidelines and that the interested transaction remains appropriate.
Miscellaneous
Curtis A. Loveland, our Secretary, is a partner in the law firm of Porter, Wright, Morris &
Arthur LLP, which firm provides us with legal services. Mr. Loveland owns less than 1% of our
outstanding common stock.
Item 14. Principal Accountant Fees and Services.
Aggregate fees billed to us for the fiscal years ended June 30, 2007 and 2006 by our principal
accounting firm, Deloitte & Touche LLP were:
|
|
|
|
|
|
|
|
|
|
|
Fiscal Year Ended June 30,
|
|
|
|
2007
|
|
|
2006
|
|
Audit Fees (a)
|
|
$
|
1,792,274
|
|
|
$
|
1,405,562
|
|
Audit Related Fees (b)
|
|
|
133,594
|
|
|
|
112,287
|
|
Tax Fees (c)
|
|
|
73,554
|
|
|
|
110,209
|
|
All Other Fees (d)
|
|
|
37,001
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Fees
|
|
$
|
2,036,423
|
|
|
$
|
1,628,058
|
|
|
|
|
|
|
|
|
39
|
|
|
(a)
|
|
Represents the aggregate fees billed by Deloitte & Touche LLP for professional services rendered for the audit of
our annual financial statements for our two most recent years ended June 30, 2007 and 2006, including Sarbanes-Oxley
Section 404 attestation procedures, for the reviews of the financial statements included in our Quarterly Reports on
Form 10-Q for the same fiscal years, and services associated with securities filings for the same fiscal years.
|
|
(b)
|
|
Represents the aggregate fees billed by Deloitte & Touche LLP for services rendered to us for audits in connection
with acquisitions, assurance and related services that are reasonably related to the performance of our audit or
review of our financial statements not included in the Audit Fees category, employee benefit plan audits and
accounting consultations.
|
|
(c)
|
|
Represents the aggregate fees billed by Deloitte & Touche LLP for professional services rendered to us for tax
compliance services and tax planning and advice.
|
|
(d)
|
|
Represents the aggregate fees billed by Deloitte & Touche LLP for other non-audit related consultations.
|
The Audit Committee has considered whether the provision of audit-related and other non-audit
services by Deloitte & Touche is compatible with maintaining Deloitte & Touches independence.
Our Audit Committee has established a policy requiring the pre-approval of all audit and
non-audit services provided to us by Deloitte & Touche. The policy provides for pre-approval of
audit, audit-related and tax services specifically described by the Audit Committee. The Audit
Committee has delegated to its chair authority to pre-approve permitted services between the Audit
Committees regularly scheduled meetings, and the chair must report any pre-approval decisions to
the Audit Committee at its next scheduled meeting for review by the committee. The policy prohibits
the Audit Committee from delegating to management the committees responsibility to pre-approve
permitted services of our independent auditor. All of the services reflected in the table above
were pre-approved in accordance with the policy.
Part IV
Item 15. Exhibits and Financial Statement Schedules.
|
(a)
|
|
The following documents are filed as part of this report:
|
|
(1)
|
|
The following financial statements are included in Item 8 of this Annual Report:
|
|
|
|
|
Report of Independent Registered Public Accounting Firm on Internal Control Over Financial Reporting.
|
|
|
|
|
Report of Independent Registered Public Accounting Firm.
|
|
|
|
|
Consolidated Balance Sheets as of June 30, 2007 and 2006.
|
|
|
|
|
Consolidated Statements of Operations for each of the three years in the period ended June 30, 2007.
|
|
|
|
|
Consolidated Statements of Stockholders Equity for each of the three years in the period ended June
30, 2007.
|
|
|
|
|
Consolidated Statements of Cash Flows for each of the three years in the period ended June 30, 2007.
|
|
|
|
|
Notes to the Consolidated Financial Statements.
|
|
|
(2)
|
|
The following financial statement schedule is included in this Annual Report on
Form 10-K and should be read in conjunction with the Consolidated Financial Statements
contained in Item 8:
|
|
|
|
|
Schedule II Valuation and Qualifying Accounts.
|
40
|
|
|
Schedules not listed above are omitted because of the absence of the conditions under
which they are required or because the required information is included in the
financial statements or the notes thereto.
|
|
|
(3)
|
|
Exhibits:
|
|
|
|
Exhibit
|
|
|
Number
|
|
Exhibit Description
|
2(a)
|
|
Agreement and Plan of Merger, dated August 2, 2007,
among CheckFree Corporation, Fiserv, Inc. and Braves
Acquisition Corp. (Reference is made to Exhibit 2.3
to the Quarterly Report on Form 10-Q of Fiserv, Inc.
(File No. 0-14948) for the period ended June 30,
2007, filed with the Securities and Exchange
Commission on August 3, 2007, and incorporated
herein by reference.)
|
|
|
|
2(b)
|
|
Amended and Restated Strategic Alliance Master
Agreement, dated as of April 26, 2000, among
CheckFree Holdings Corporation, CheckFree Services
Corporation and Bank of America, N.A. (Reference is
made to Appendix A to the Companys Proxy Statement
for the Special Meeting of Stockholders held on
September 28, 2000, filed with the Securities and
Exchange Commission on August 25, 2000, and
incorporated herein by reference.)
|
|
|
|
2(c)
|
|
Agreement and Plan of Merger, dated December 29,
2006, among CheckFree Corporation, CFA Software
Corporation, and Carreker Corporation. (Reference is
made to Exhibit 2 to the Companys Current Report on
Form 8-K dated December 29, 2006, filed with the
Securities and Exchange Commission on January 3,
2007, and incorporated herein by reference.)
|
|
|
|
2(d)
|
|
Agreement and Plan of Merger, dated February 13,
2007, among CheckFree Corporation, CF Oregon, Inc.,
and Corillian Corporation. (Reference is made to
Exhibit 2 to the Companys Current Report on Form
8-K dated February 13, 2007, filed with the
Securities and Exchange Commission on February 14,
2007, and incorporated herein by reference.)
|
|
|
|
3(a)
|
|
Amended and Restated Certificate of Incorporation of
the Company. (Reference is made to Exhibit 4(e) to
the Companys Registration Statement on Form S-8
(Registration No. 333-50322), filed with the
Securities and Exchange Commission on November 20,
2000, and incorporated herein by reference.)
|
|
|
|
3(b)
|
|
Certificate of Ownership and Merger Merging
CheckFree Corporation into CheckFree Holdings
Corporation. (Reference is made to Exhibit 3(b) to
the Companys Annual Report on Form 10-K for the
year ended June 30, 2000, filed with the Securities
and Exchange Commission on September 26, 2000, and
incorporated herein by reference.)
|
|
|
|
3(c)
|
|
Amended and Restated By-Laws of the Company, as of
February 8, 2007. (Reference is made to Exhibit 3 to
the Companys Quarterly Report on Form 10-Q for the
quarterly period ended December 31, 2006, filed with
the Securities and Exchange Commission on February
8, 2007, and incorporated herein by reference.)
|
|
|
|
3(d)
|
|
Form of Specimen Stock Certificate. (Reference is
made to Exhibit 3(d) to the Companys Annual Report
on Form 10-K for the year ended June 30, 2000, filed
with the Securities and Exchange Commission on
September 26, 2000, and incorporated herein by
reference.)
|
|
|
|
4(a)
|
|
Articles FOURTH, FIFTH, SEVENTH, EIGHTH, TENTH AND
ELEVENTH of the Companys Amended and Restated
Certificate of Incorporation (contained in the
Companys Amended and Restated Certificate of
Incorporation filed as Exhibit 3(a) hereto) and
Articles II, III, IV, VI and VIII of the Companys
By-Laws (contained in the Companys By-Laws filed as
Exhibit 3(c) hereto.)
|
|
|
|
4(b)
|
|
Rights Agreement, dated as of December 16, 1997, by
and between the Company and The Fifth Third Bank, as
Rights Agent. (Reference is made to Exhibit 4.1 to
CheckFree Holdings Corporations Registration
Statement on Form 8-A (File No. 001-12721), filed
with the Securities and Exchange Commission on
December 19, 1997, and incorporated herein by
reference.)
|
41
|
|
|
Exhibit
|
|
|
Number
|
|
Exhibit Description
|
4(c)
|
|
Amendment No. 1 to the Rights Agreement, dated as of
February 5, 1999, between CheckFree Holdings
Corporation and The Fifth Third Bank, as Rights
Agent. (Reference is made to Exhibit 4.2 to
Amendment No. 1 to the Companys Registration
Statement on Form 8-A (File No. 0-26802), filed with
the Securities and Exchange Commission on May 12,
1999, and incorporated herein by reference.)
|
|
|
|
4(d)
|
|
Amendment No. 2 to the Rights Agreement, dated as of
September 30, 2000, between CheckFree Corporation
and The Fifth Third Bank, as Rights Agent.
(Reference is made to Exhibit 4.3 to Amendment No. 1
to the Companys Registration Statement on Form 8-A
(File No. 0-26802), filed with the Securities and
Exchange Commission on October 3, 2000, and
incorporated herein by reference.)
|
|
|
|
4(e)
|
|
Substitution of Successor Rights Agent and Amendment
No. 3 to the Rights Agreement, dated as of January
25, 2002, between CheckFree Corporation and Wells
Fargo Bank Minnesota, National Association, as
Rights Agent. (Reference is made to Exhibit 4.4 to
Amendment No. 3 to the Companys Registration
Statement on Form 8-A (File No. 0-26802), filed with
the Securities and Exchange Commission on January
29, 2002, and incorporated herein by reference.)
|
|
|
|
4(f)
|
|
Amendment No. 4 to the Rights Agreement, dated as of
August 2, 2007, between CheckFree Corporation and
Wells Fargo Bank, National Association, as Rights
Agent. (Reference is made to Exhibit 4.1 to the
Companys Current Report on Form 8-K dated August 2,
2007, filed with the Securities and Exchange
Commission on August 7, 2007, and incorporated
herein by reference.)
|
|
|
|
10(a)
|
|
CheckFree Services Corporation 401(k) Plan Adoption
Agreement (restatement as of June 15, 2007).
(Reference is made to Exhibit 10(a) to the Companys
Annual Report on Form 10-K for the fiscal year ended
June 30, 2007, filed with the Securities and
Exchange Commission on August 24, 2007, and
incorporated herein by reference.)
|
|
|
|
10(b)
|
|
CheckFree Services Corporation Defined Contribution
Plan and Trust, sponsored by SunTrust BankBasic
Plan Document #02, June 2002 (Prototype plan for
CheckFree Services Corporation 401(k) Plan)
(Reference is made to Exhibit 10(b) to the Companys
Quarterly Report on Form 10-Q for the quarterly
period ended December 31, 2004, filed with the
Securities and Exchange Commission on February 8,
2005, and incorporated herein by reference.)
|
|
|
|
10(c)
|
|
CheckFree Corporation 2006 Associate Stock Purchase
Plan (Reference is made to Exhibit 4(a) to the
Companys Registration Statement on Form S-8
(Registration No. 333-138845), filed with the
Securities and Exchange Commission on November 20,
2006, and incorporated herein by reference).
|
|
|
|
10(d)
|
|
CheckFree Corporation Amended and Restated 2002
Stock Incentive Plan. (Reference is made to Exhibit
4(a) to the Companys Registration Statement on Form
S-8, as amended (Registration No. 333-101280), filed
with the Securities and Exchange Commission on
August 24, 2007 and incorporated herein by
reference.) +
|
|
|
|
10(e)
|
|
Form of Restricted Stock Award Agreement for
Non-Employee Directors under the Amended and
Restated 2002 Stock Incentive Plan. (Reference is
made to Exhibit 10(d) to the Companys Quarterly
Report on Form 10-Q for the quarterly period ended
December 31, 2004, filed with the Securities and
Exchange Commission on February 8, 2005, and
incorporated herein by reference.)+
|
|
|
|
10(f)
|
|
Form of Performance Accelerated Restricted Stock
Award Agreement under the Amended and Restated 2002
Stock Incentive Plan. (Reference is made to Exhibit
10.3 to the Companys Current Report on Form 8-K
dated July 25, 2007, filed with the Securities and
Exchange Commission on July 31, 2007, and
incorporated herein by reference.)+
|
42
|
|
|
Exhibit
|
|
|
Number
|
|
Exhibit Description
|
10(g)
|
|
Form of Restricted Stock Award Agreement under the
Amended and Restated 2002 Stock Incentive Plan.
(Reference is made to Exhibit 10(f) to the Companys
Quarterly Report on Form 10-Q for the quarterly
period ended December 31, 2004, filed with the
Securities and Exchange Commission on February 8,
2005, and incorporated herein by reference.)+
|
|
|
|
10(h)
|
|
Form of Nonstatutory Stock Option Agreement under
the Amended and Restated 2002 Stock Incentive Plan.
(Reference is made to Exhibit 10(g) to the Companys
Quarterly Report on Form 10-Q for the quarterly
period ended December 31, 2004, filed with the
Securities and Exchange Commission on February 8,
2005, and incorporated herein by reference.)+
|
|
|
|
10(i)
|
|
Form of Incentive Stock Option Agreement under the
Amended and Restated 2002 Stock Incentive Plan.
(Reference is made to Exhibit 10(h) to the Companys
Quarterly Report on Form 10-Q for the quarterly
period ended December 31, 2004, filed with the
Securities and Exchange Commission on February 8,
2005, and incorporated herein by reference.) +
|
|
|
|
10(j)
|
|
CheckFree Corporation Third Amended and Restated
1995 Stock Option Plan. (Reference is made to
Exhibit 4(d) to the Companys Registration Statement
on Form S-8, as amended (Registration No.
333-50322), filed with the Securities and Exchange
Commission on November 20, 2000, and incorporated
herein by reference.) +
|
|
|
|
10(k)
|
|
CheckFree Corporation Amended and Restated
Nonqualified Deferred Compensation Plan, dated July
26, 2007. (Reference is made to Exhibit 10(k) to the
Companys Annual Report on Form 10-K for the fiscal
year ended June 30, 2007, filed with the Securities
and Exchange Commission on August 24, 2007, and
incorporated herein by reference.)+
|
|
|
|
10(l)
|
|
Form of Indemnification Agreement. (Reference is
made to Exhibit 10(a) to the Companys Registration
Statement on Form S-1, as amended (Registration No.
33-95738), filed with the Securities and Exchange
Commission on August 14, 1995, and incorporated
herein by reference.) +
|
|
|
|
10(m)
|
|
Schedule identifying material details of
Indemnification Agreements substantially identical
to Exhibit 10(q). (Reference is made to Exhibit
10(i) to the Companys Annual Report on Form 10-K
for the year ended June 30, 2003, filed with the
Securities and Exchange Commission on September 15,
2003, and incorporated herein by reference.) +
|
|
|
|
10(n)
|
|
Confidentiality and Noncompetition Agreement, dated
May 7, 1999, between Peter J. Kight and the Company.
(Reference is made to Exhibit 10(j) to the Companys
Annual Report on Form 10-K for the year ended June
30, 2003, filed with the Securities and Exchange
Commission on September 15, 2003, and incorporated
herein by reference.)
|
|
|
|
10(o)
|
|
Noncompetition Agreement, dated February 11, 2003,
between Mark A. Johnson and the Company. (Reference
is made to Exhibit 10(k) to the Companys Annual
Report on Form 10-K for the year ended June 30,
2003, filed with the Securities and Exchange
Commission on September 15, 2003, and incorporated
herein by reference.)
|
|
|
|
10(p)
|
|
Confidentiality and Nonsolicitation Agreement, dated
February 11, 2003, between Mark A. Johnson and the
Company. (Reference is made to Exhibit 10(l) to the
Companys Annual Report on Form 10-K for the year
ended June 30, 2003, filed with the Securities and
Exchange Commission on September 15, 2003, and
incorporated herein by reference.)
|
|
|
|
10(q)
|
|
Executive Employment Agreement between the Company
and Peter J. Kight. (Reference is made to Exhibit
10(z) to the Companys Annual Report on Form 10-K
for the year ended June 30, 1997, filed with the
Securities and Exchange Commission on September 26,
1997, and incorporated herein by reference.) +
|
|
|
|
10(r)
|
|
CheckFree Corporation 2008 Incentive Compensation
Plan. (Reference is made to Exhibit 10.1 to the
Companys Current Report on Form 8-K dated July 25,
2007, filed with the Securities Exchange Commission
on July 31, 2007, and incorporated herein by
reference.) +
|
43
|
|
|
Exhibit
|
|
|
Number
|
|
Exhibit Description
|
10(s)
|
|
Description of Compensation Arrangements Approved by
the Compensation Committee of the Board of Directors
for the Companys Named Executive Officers in Fiscal
Year 2008 and for the Companys Non-Management
Directors in Fiscal Year 2008 (Reference is made to
Item 5.02 of the Companys Current Report on Form
8-K dated July 25, 2007, filed with the Securities
and Exchange Commission on July 31, 2007, and
incorporated herein by reference.)+
|
|
|
|
10(t)
|
|
Form of Retention Agreement dated as of July 27,
2007 between CheckFree Corporation and each of its
executive officers. (Reference is made to Exhibit
10.2 to the Companys Current Report on Form 8-K
dated July 25, 2007, filed with the Securities and
Exchange Commission on July 31, 2007, and
incorporated herein by reference.)+
|
|
|
|
10(u)
|
|
Form of Amendment to Retention Agreement dated as of
August 2, 2007 between CheckFree Corporation and
each of Peter J. Kight, David E. Mangum, Stephen E.
Olsen, Alex Hart, Jardon Bouska, Michael P. Gianoni
and Randal A. McCoy. (Reference is made to Exhibit
10.1 to the Companys Current Report on Form 8-K
dated August 2, 2007, filed with the Securities and
Exchange Commission on August 7, 2007, and
incorporated herein by reference.)+
|
|
|
|
10(v)
|
|
Letter Agreement, dated February 16, 2007, between
Matthew S. Lewis and CheckFree Services Corporation
(Reference is made to Exhibit 10(a) to the Companys
Current Report on Form 8-K dated February 15, 2007,
filed with the Securities and Exchange Commission on
February 22, 2007, and incorporated herein by
reference).+
|
|
|
|
10(w)
|
|
Individual Separation Agreement and General Release,
dated as of August 14, 2007, by and among CheckFree
Corporation, CheckFree Services Corporation and
Randal A. McCoy. (Reference is made to Exhibit
10(a) to the Companys Current Report on Form 8-K
dated August 14, 2007, filed with the Securities and
Exchange Commission on August 20, 2007, and
incorporated herein by reference.)+
|
|
|
|
10(x)
|
|
Master Agreement, dated August 5, 2003, among
Bastogne, Inc., CheckFree Services Corporation and
SunTrust Bank. (Reference is made to Exhibit 10(v)
to the Companys Annual Report on Form 10-K for the
year ended June 30, 2003, filed with the Securities
and Exchange Commission on September 15, 2003, and
incorporated herein by reference.)**
|
|
|
|
10(y)
|
|
Revolving Credit Agreement, dated April 13, 2006,
among CheckFree Corporation, CheckFree Services
Corporation and CheckFree Investment Corporation, as
Borrowers, the lenders from time to time party
thereto, SunTrust Bank, as Administrative Agent,
Bank of America, N.A., as Syndication Agent, and
KeyBank National Association, US Bank, National
Association, and Mizuho Corporate Bank, Ltd., as
Documentation Agents, SunTrust Capital Markets, Inc.
as Joint Lead Arranger and Sole Book Runner and Banc
of America Securities, LLC as Joint Lead Arranger.
(Reference is made to Exhibit 10.1 to the Companys
Current Report on Form 8-K filed with the Securities
and Exchange Commission on April 19, 2006, and
incorporated herein by reference.)
|
|
|
|
10(z)
|
|
Master Agreement, dated April 13, 2006, among
CheckFree Corporation, as Guarantor, and CheckFree
Services Corporation, as Lessee and Construction
Agent, SunTrust Bank, as Lessor, certain financial
institutions parties thereto, as Lenders, SunTrust
Equity Funding, LLC, as Agent and Sole Arranger, US
Bank, National Association, Mizuho Corporate Bank
(USA) and KeyBank National Association, each as
Co-Documentation Agents, and Bank of America, N.A.,
as Syndication Agent. (Reference is made to Exhibit
10.2 to the Companys Current Report on Form 8-K
filed with the Securities and Exchange Commission on
April 19, 2006, and incorporated herein by
reference.)
|
|
|
|
10(aa)
|
|
Master Lease Agreement, dated April 13, 2006,
between CheckFree Services Corporation, as Lessee,
and SunTrust Bank, as Lessor. (Reference is made to
Exhibit 10.3 to the Companys Current Report on Form
8-K filed with the Securities and Exchange
Commission on April 19, 2006, and incorporated
herein by reference.)
|
44
|
|
|
Exhibit
|
|
|
Number
|
|
Exhibit Description
|
10(bb)
|
|
Construction Agency Agreement, dated April 13, 2006,
between SunTrust Bank and CheckFree Services
Corporation, as Construction Agent. (Reference is
made to Exhibit 10.4 to the Companys Current Report
on Form 8-K filed with the Securities and Exchange
Commission on April 19, 2006, and incorporated
herein by reference.)
|
|
|
|
10(cc)
|
|
First Amendment to Master Agreement, dated April 13,
2006, among Bastogne, Inc., CheckFree Services
Corporation, CheckFree Corporation, and SunTrust
Bank. (Reference is made to Exhibit 10.5 to the
Companys Current Report on Form 8-K filed with the
Securities and Exchange Commission on April 19,
2006, and incorporated herein by reference.)
|
|
|
|
21
|
|
Subsidiaries of the Company. (Reference is made to
Exhibit 21 to the Companys Annual Report on Form
10-K for the fiscal year ended June 30, 2007, filed
with the Securities and Exchange Commission on
August 24, 2007, and incorporated herein by
reference.)
|
|
|
|
23
|
|
Consent of Deloitte & Touche LLP. (Reference is made
to Exhibit 23 to the Companys Annual Report on Form
10-K for the fiscal year ended June 30, 2007, filed
with the Securities and Exchange Commission on
August 24, 2007, and incorporated herein by
reference.)
|
|
|
|
24
|
|
Power of Attorney. (Reference is made to Exhibit 24
to the Companys Annual Report on Form 10-K for the
fiscal year ended June 30, 2007, filed with the
Securities and Exchange Commission on August 24,
2007, and incorporated herein by reference.)
|
|
|
|
31(a)
|
|
Certification pursuant to Exchange Act Rules
13a-14(a) and 15d-14(a) of the Chief Executive
Officer.*
|
|
|
|
31(b)
|
|
Certification pursuant to Exchange Act Rules
13a-14(a) and 15d-14(a) of the Chief Financial
Officer.*
|
|
|
|
32(a)
|
|
Certification pursuant to 18 U.S.C. Section 1350, as
adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002, of the Chief Executive
Officer. (Reference is made to Exhibit 32(a) to the
Companys Annual Report on Form 10-K for the fiscal
year ended June 30, 2007, filed with the Securities
and Exchange Commission on August 24, 2007, and
incorporated herein by reference.)***
|
|
|
|
32(b)
|
|
Certification pursuant to 18 U.S.C. Section 1350, as
adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002, of the Chief Financial
Officer. (Reference is made to Exhibit 32(b) to the
Companys Annual Report on Form 10-K for the fiscal
year ended June 30, 2007, filed with the Securities
and Exchange Commission on August 24, 2007, and
incorporated herein by reference.)***
|
|
|
|
*
|
|
Filed with this report.
|
|
**
|
|
Portions of this Exhibit have been given confidential treatment by the Securities and Exchange Commission.
|
|
***
|
|
Furnished with this report.
|
|
+
|
|
Management contract or compensatory plan or arrangement required to be identified pursuant to Item 15(a)(3) of
this Annual Report on Form 10-K.
|
|
(b)
|
|
Exhibits.
|
|
|
|
|
The exhibits to this report follow the Signature Page.
|
|
|
(c)
|
|
Financial Statement Schedules.
|
|
|
|
|
The financial statement schedule is included in Item 8 of this Annual Report on Form 10-K.
|
45
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934,
the registrant has duly caused this amended report to be signed on its behalf by the undersigned,
thereunto duly authorized.
|
|
|
|
|
|
CHECKFREE CORPORATION
|
|
Date: October 29, 2007
|
By:
|
/s/ David E. Mangum
|
|
|
|
David E. Mangum,
|
|
|
|
Executive Vice President and
Chief Financial Officer
|
|
|
Pursuant to the requirements of the Securities Exchange Act of 1934, this amended report has
been signed below by the following persons on behalf of the registrant and in the capacities
indicated on the 29th day of October, 2007.
|
|
|
*Peter J. Kight
|
|
Chairman of the Board and Chief Executive Officer
|
|
|
(Principal
Executive Officer)
|
|
|
|
*David E. Mangum
|
|
Executive Vice President and Chief Financial Officer
|
|
|
(Principal
Financial Officer)
|
|
|
|
*Samuel R. Schwartz
|
|
Senior Vice President and Chief Accounting Officer
|
|
|
(Principal
Accounting Officer)
|
|
|
|
*William P. Boardman
William P. Boardman
|
|
Director
|
|
|
|
*C. Beth Cotner
|
|
Director
|
|
|
|
|
|
|
*James D. Dixon
|
|
Director
|
|
|
|
|
|
|
*Mark A. Johnson
|
|
Director
|
|
|
|
|
|
|
*Eugene F. Quinn
|
|
Director
|
|
|
|
|
|
|
*Jeffrey M. Wilkins
|
|
Director
|
|
|
|
|
|
|
|
|
|
|
|
*By:
|
/s/ Curtis A. Loveland
|
|
|
|
Curtis A. Loveland,
|
|
|
|
Attorney-in-Fact
|
|
|
EXHIBIT INDEX
|
|
|
Exhibit
|
|
|
Number
|
|
Exhibit Description
|
2(a)
|
|
Agreement and Plan of Merger, dated August 2,
2007, among CheckFree Corporation, Fiserv,
Inc. and Braves Acquisition Corp. (Reference
is made to Exhibit 2.3 to the Quarterly Report
on Form 10-Q of Fiserv, Inc. (File No.
0-14948) for the period ended June 30, 2007,
filed with the Securities and Exchange
Commission on August 3, 2007, and incorporated
herein by reference.)
|
|
|
|
2(b)
|
|
Amended and Restated Strategic Alliance Master
Agreement, dated as of April 26, 2000, among
CheckFree Holdings Corporation, CheckFree
Services Corporation and Bank of America, N.A.
(Reference is made to Appendix A to the
Companys Proxy Statement for the Special
Meeting of Stockholders held on September 28,
2000, filed with the Securities and Exchange
Commission on August 25, 2000, and
incorporated herein by reference.)
|
|
|
|
2(c)
|
|
Agreement and Plan of Merger, dated December
29, 2006, among CheckFree Corporation, CFA
Software Corporation, and Carreker
Corporation. (Reference is made to Exhibit 2
to the Companys Current Report on Form 8-K
dated December 29, 2006, filed with the
Securities and Exchange Commission on January
3, 2007, and incorporated herein by
reference.)
|
|
|
|
2(d)
|
|
Agreement and Plan of Merger, dated February
13, 2007, among CheckFree Corporation, CF
Oregon, Inc., and Corillian Corporation.
(Reference is made to Exhibit 2 to the
Companys Current Report on Form 8-K dated
February 13, 2007, filed with the Securities
and Exchange Commission on February 14, 2007,
and incorporated herein by reference.)
|
|
|
|
3(a)
|
|
Amended and Restated Certificate of
Incorporation of the Company. (Reference is
made to Exhibit 4(e) to the Companys
Registration Statement on Form S-8
(Registration No. 333-50322), filed with the
Securities and Exchange Commission on November
20, 2000, and incorporated herein by
reference.)
|
|
|
|
3(b)
|
|
Certificate of Ownership and Merger Merging
CheckFree Corporation into CheckFree Holdings
Corporation. (Reference is made to Exhibit
3(b) to the Companys Annual Report on Form
10-K for the year ended June 30, 2000, filed
with the Securities and Exchange Commission on
September 26, 2000, and incorporated herein by
reference.)
|
|
|
|
3(c)
|
|
Amended and Restated By-Laws of the Company,
as of February 8, 2007. (Reference is made to
Exhibit 3 to the Companys Quarterly Report on
Form 10-Q for the quarterly period ended
December 31, 2006, filed with the Securities
and Exchange Commission on February 8, 2007,
and incorporated herein by reference.)
|
|
|
|
3(d)
|
|
Form of Specimen Stock Certificate. (Reference
is made to Exhibit 3(d) to the Companys
Annual Report on Form 10-K for the year ended
June 30, 2000, filed with the Securities and
Exchange Commission on September 26, 2000, and
incorporated herein by reference.)
|
|
|
|
4(a)
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Articles FOURTH, FIFTH, SEVENTH, EIGHTH, TENTH
AND ELEVENTH of the Companys Amended and
Restated Certificate of Incorporation
(contained in the Companys Amended and
Restated Certificate of Incorporation filed as
Exhibit 3(a) hereto) and Articles II, III, IV,
VI and VIII of the Companys By-Laws
(contained in the Companys By-Laws filed as
Exhibit 3(c) hereto.)
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4(b)
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Rights Agreement, dated as of December 16,
1997, by and between the Company and The Fifth
Third Bank, as Rights Agent. (Reference is
made to Exhibit 4.1 to CheckFree Holdings
Corporations Registration Statement on Form
8-A (File No. 001-12721), filed with the
Securities and Exchange Commission on December
19, 1997, and incorporated herein by
reference.)
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4(c)
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Amendment No. 1 to the Rights Agreement, dated
as of February 5, 1999, between CheckFree
Holdings Corporation and The Fifth Third Bank,
as Rights Agent. (Reference is made to Exhibit
4.2 to Amendment No. 1 to the Companys
Registration Statement on Form 8-A (File No.
0-26802), filed with the Securities and
Exchange Commission on May 12, 1999, and
incorporated herein by reference.)
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Exhibit
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Number
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Exhibit Description
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4(d)
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Amendment No. 2 to the Rights Agreement, dated
as of September 30, 2000, between CheckFree
Corporation and The Fifth Third Bank, as
Rights Agent. (Reference is made to Exhibit
4.3 to Amendment No. 1 to the Companys
Registration Statement on Form 8-A (File No.
0-26802), filed with the Securities and
Exchange Commission on October 3, 2000, and
incorporated herein by reference.)
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4(e)
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Substitution of Successor Rights Agent and
Amendment No. 3 to the Rights Agreement, dated
as of January 25, 2002, between CheckFree
Corporation and Wells Fargo Bank Minnesota,
National Association, as Rights Agent.
(Reference is made to Exhibit 4.4 to Amendment
No. 3 to the Companys Registration Statement
on Form 8-A (File No. 0-26802), filed with the
Securities and Exchange Commission on January
29, 2002, and incorporated herein by
reference.)
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4(f)
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Amendment No. 4 to the Rights Agreement, dated
as of August 2, 2007, between CheckFree
Corporation and Wells Fargo Bank, National
Association, as Rights Agent. (Reference is
made to Exhibit 4.1 to the Companys Current
Report on Form 8-K dated August 2, 2007, filed
with the Securities and Exchange Commission on
August 7, 2007, and incorporated herein by
reference.)
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10(a)
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CheckFree Services Corporation 401(k) Plan
Adoption Agreement (restatement as of June 15,
2007). (Reference is made to Exhibit 10(a) to
the Companys Annual Report on Form 10-K for
the fiscal year ended June 30, 2007, filed
with the Securities and Exchange Commission on
August 24, 2007, and incorporated herein by
reference.)
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10(b)
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CheckFree Services Corporation Defined
Contribution Plan and Trust, sponsored by
SunTrust BankBasic Plan Document #02, June
2002 (Prototype plan for CheckFree Services
Corporation 401(k) Plan) (Reference is made to
Exhibit 10(b) to the Companys Quarterly
Report on Form 10-Q for the quarterly period
ended December 31, 2004, filed with the
Securities and Exchange Commission on February
8, 2005, and incorporated herein by
reference.)
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10(c)
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CheckFree Corporation 2006 Associate Stock
Purchase Plan (Reference is made to Exhibit
4(a) to the Companys Registration Statement
on Form S-8 (Registration No. 333-138845),
filed with the Securities and Exchange
Commission on November 20, 2006, and
incorporated herein by reference).
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10(d)
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CheckFree Corporation Amended and Restated
2002 Stock Incentive Plan. (Reference is made
to Exhibit 4(a) to the Companys Registration
Statement on Form S-8, as amended
(Registration No. 333-101280), filed with the
Securities and Exchange Commission on August
24, 2007 and incorporated herein by
reference.) +
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10(e)
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Form of Restricted Stock Award Agreement for
Non-Employee Directors under the Amended and
Restated 2002 Stock Incentive Plan. (Reference
is made to Exhibit 10(d) to the Companys
Quarterly Report on Form 10-Q for the
quarterly period ended December 31, 2004,
filed with the Securities and Exchange
Commission on February 8, 2005, and
incorporated herein by reference.)+
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10(f)
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Form of Performance Accelerated Restricted
Stock Award Agreement under the Amended and
Restated 2002 Stock Incentive Plan. (Reference
is made to Exhibit 10.3 to the Companys
Current Report on Form 8-K dated July 25,
2007, filed with the Securities and Exchange
Commission on July 31, 2007, and incorporated
herein by reference.)+
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10(g)
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Form of Restricted Stock Award Agreement under
the Amended and Restated 2002 Stock Incentive
Plan. (Reference is made to Exhibit 10(f) to
the Companys Quarterly Report on Form 10-Q
for the quarterly period ended December 31,
2004, filed with the Securities and Exchange
Commission on February 8, 2005, and
incorporated herein by reference.)+
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Exhibit
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Number
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Exhibit Description
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10(h)
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Form of Nonstatutory Stock Option Agreement
under the Amended and Restated 2002 Stock
Incentive Plan. (Reference is made to Exhibit
10(g) to the Companys Quarterly Report on
Form 10-Q for the quarterly period ended
December 31, 2004, filed with the Securities
and Exchange Commission on February 8, 2005,
and incorporated herein by reference.)+
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10(i)
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Form of Incentive Stock Option Agreement under
the Amended and Restated 2002 Stock Incentive
Plan. (Reference is made to Exhibit 10(h) to
the Companys Quarterly Report on Form 10-Q
for the quarterly period ended December 31,
2004, filed with the Securities and Exchange
Commission on February 8, 2005, and
incorporated herein by reference.) +
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10(j)
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CheckFree Corporation Third Amended and
Restated 1995 Stock Option Plan. (Reference is
made to Exhibit 4(d) to the Companys
Registration Statement on Form S-8, as amended
(Registration No. 333-50322), filed with the
Securities and Exchange Commission on November
20, 2000, and incorporated herein by
reference.) +
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10(k)
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CheckFree Corporation Amended and Restated
Nonqualified Deferred Compensation Plan, dated
July 26, 2007. (Reference is made to Exhibit
10(k) to the Companys Annual Report on Form
10-K for the fiscal year ended June 30, 2007,
filed with the Securities and Exchange
Commission on August 24, 2007, and
incorporated herein by reference.)+
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10(l)
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Form of Indemnification Agreement. (Reference
is made to Exhibit 10(a) to the Companys
Registration Statement on Form S-1, as amended
(Registration No. 33-95738), filed with the
Securities and Exchange Commission on August
14, 1995, and incorporated herein by
reference.) +
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10(m)
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Schedule identifying material details of
Indemnification Agreements substantially
identical to Exhibit 10(q). (Reference is made
to Exhibit 10(i) to the Companys Annual
Report on Form 10-K for the year ended June
30, 2003, filed with the Securities and
Exchange Commission on September 15, 2003, and
incorporated herein by reference.) +
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10(n)
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Confidentiality and Noncompetition Agreement,
dated May 7, 1999, between Peter J. Kight and
the Company. (Reference is made to Exhibit
10(j) to the Companys Annual Report on Form
10-K for the year ended June 30, 2003, filed
with the Securities and Exchange Commission on
September 15, 2003, and incorporated herein by
reference.)
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10(o)
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Noncompetition Agreement, dated February 11,
2003, between Mark A. Johnson and the Company.
(Reference is made to Exhibit 10(k) to the
Companys Annual Report on Form 10-K for the
year ended June 30, 2003, filed with the
Securities and Exchange Commission on
September 15, 2003, and incorporated herein by
reference.)
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10(p)
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Confidentiality and Nonsolicitation Agreement,
dated February 11, 2003, between Mark A.
Johnson and the Company. (Reference is made to
Exhibit 10(l) to the Companys Annual Report
on Form 10-K for the year ended June 30, 2003,
filed with the Securities and Exchange
Commission on September 15, 2003, and
incorporated herein by reference.)
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10(q)
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Executive Employment Agreement between the
Company and Peter J. Kight. (Reference is made
to Exhibit 10(z) to the Companys Annual
Report on Form 10-K for the year ended June
30, 1997, filed with the Securities and
Exchange Commission on September 26, 1997, and
incorporated herein by reference.) +
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10(r)
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CheckFree Corporation 2008 Incentive
Compensation Plan. (Reference is made to
Exhibit 10.1 to the Companys Current Report
on Form 8-K dated July 25, 2007, filed with
the Securities Exchange Commission on July 31,
2007, and incorporated herein by reference.) +
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Exhibit
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Number
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Exhibit Description
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10(s)
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Description of Compensation Arrangements
Approved by the Compensation Committee of the
Board of Directors for the Companys Named
Executive Officers in Fiscal Year 2008 and for
the Companys Non-Management Directors in
Fiscal Year 2008 (Reference is made to Item
5.02 of the Companys Current Report on Form
8-K dated July 25, 2007, filed with the
Securities and Exchange Commission on July 31,
2007, and incorporated herein by reference.)+
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10(t)
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Form of Retention Agreement dated as of July
27, 2007 between CheckFree Corporation and
each of its executive officers. (Reference is
made to Exhibit 10.2 to the Companys Current
Report on Form 8-K dated July 25, 2007, filed
with the Securities and Exchange Commission on
July 31, 2007, and incorporated herein by
reference.)+
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10(u)
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Form of Amendment to Retention Agreement dated
as of August 2, 2007 between CheckFree
Corporation and each of Peter J. Kight, David
E. Mangum, Stephen E. Olsen, Alex Hart, Jardon
Bouska, Michael P. Gianoni and Randal A.
McCoy. (Reference is made to Exhibit 10.1 to
the Companys Current Report on Form 8-K dated
August 2, 2007, filed with the Securities and
Exchange Commission on August 7, 2007, and
incorporated herein by reference.)+
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10(v)
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Letter Agreement, dated February 16, 2007,
between Matthew S. Lewis and CheckFree
Services Corporation (Reference is made to
Exhibit 10(a) to the Companys Current Report
on Form 8-K dated February 15, 2007, filed
with the Securities and Exchange Commission on
February 22, 2007, and incorporated herein by
reference).+
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10(w)
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Individual Separation Agreement and General
Release, dated as of August 14, 2007, by and
among CheckFree Corporation, CheckFree
Services Corporation and Randal A. McCoy.
(Reference is made to Exhibit 10(a) to the
Companys Current Report on Form 8-K dated
August 14, 2007, filed with the Securities and
Exchange Commission on August 20, 2007, and
incorporated herein by reference.)+
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10(x)
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Master Agreement, dated August 5, 2003, among
Bastogne, Inc., CheckFree Services Corporation
and SunTrust Bank. (Reference is made to
Exhibit 10(v) to the Companys Annual Report
on Form 10-K for the year ended June 30, 2003,
filed with the Securities and Exchange
Commission on September 15, 2003, and
incorporated herein by reference.)**
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10(y)
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Revolving Credit Agreement, dated April 13,
2006, among CheckFree Corporation, CheckFree
Services Corporation and CheckFree Investment
Corporation, as Borrowers, the lenders from
time to time party thereto, SunTrust Bank, as
Administrative Agent, Bank of America, N.A.,
as Syndication Agent, and KeyBank National
Association, US Bank, National Association,
and Mizuho Corporate Bank, Ltd., as
Documentation Agents, SunTrust Capital
Markets, Inc. as Joint Lead Arranger and Sole
Book Runner and Banc of America Securities,
LLC as Joint Lead Arranger. (Reference is made
to Exhibit 10.1 to the Companys Current
Report on Form 8-K filed with the Securities
and Exchange Commission on April 19, 2006, and
incorporated herein by reference.)
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10(z)
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Master Agreement, dated April 13, 2006, among
CheckFree Corporation, as Guarantor, and
CheckFree Services Corporation, as Lessee and
Construction Agent, SunTrust Bank, as Lessor,
certain financial institutions parties
thereto, as Lenders, SunTrust Equity Funding,
LLC, as Agent and Sole Arranger, US Bank,
National Association, Mizuho Corporate Bank
(USA) and KeyBank National Association, each
as Co-Documentation Agents, and Bank of
America, N.A., as Syndication Agent.
(Reference is made to Exhibit 10.2 to the
Companys Current Report on Form 8-K filed
with the Securities and Exchange Commission on
April 19, 2006, and incorporated herein by
reference.)
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10(aa)
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Master Lease Agreement, dated April 13, 2006,
between CheckFree Services Corporation, as
Lessee, and SunTrust Bank, as Lessor.
(Reference is made to Exhibit 10.3 to the
Companys Current Report on Form 8-K filed
with the Securities and Exchange Commission on
April 19, 2006, and incorporated herein by
reference.)
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Exhibit
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Number
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Exhibit Description
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10(bb)
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Construction Agency Agreement, dated April 13,
2006, between SunTrust Bank and CheckFree
Services Corporation, as Construction Agent.
(Reference is made to Exhibit 10.4 to the
Companys Current Report on Form 8-K filed
with the Securities and Exchange Commission on
April 19, 2006, and incorporated herein by
reference.)
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10(cc)
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First Amendment to Master Agreement, dated
April 13, 2006, among Bastogne, Inc.,
CheckFree Services Corporation, CheckFree
Corporation, and SunTrust Bank. (Reference is
made to Exhibit 10.5 to the Companys Current
Report on Form 8-K filed with the Securities
and Exchange Commission on April 19, 2006, and
incorporated herein by reference.)
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21
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Subsidiaries of the Company. (Reference is
made to Exhibit 21 to the Companys Annual
Report on Form 10-K for the fiscal year ended
June 30, 2007, filed with the Securities and
Exchange Commission on August 24, 2007, and
incorporated herein by reference.)
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23
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Consent of Deloitte & Touche LLP. (Reference
is made to Exhibit 23 to the Companys Annual
Report on Form 10-K for the fiscal year ended
June 30, 2007, filed with the Securities and
Exchange Commission on August 24, 2007, and
incorporated herein by reference.)
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24
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Power of Attorney. (Reference is made to
Exhibit 24 to the Companys Annual Report on
Form 10-K for the fiscal year ended June 30,
2007, filed with the Securities and Exchange
Commission on August 24, 2007, and
incorporated herein by reference.)
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31(a)
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Certification pursuant to Exchange Act Rules
13a-14(a) and 15d-14(a) of the Chief Executive
Officer.*
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31(b)
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Certification pursuant to Exchange Act Rules
13a-14(a) and 15d-14(a) of the Chief Financial
Officer.*
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32(a)
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Certification pursuant to 18 U.S.C. Section
1350, as adopted pursuant to Section 906 of
the Sarbanes-Oxley Act of 2002, of the Chief
Executive Officer. (Reference is made to
Exhibit 32(a) to the Companys Annual Report
on Form 10-K for the fiscal year ended June
30, 2007, filed with the Securities and
Exchange Commission on August 24, 2007, and
incorporated herein by reference.)***
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32(b)
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Certification pursuant to 18 U.S.C. Section
1350, as adopted pursuant to Section 906 of
the Sarbanes-Oxley Act of 2002, of the Chief
Financial Officer. (Reference is made to
Exhibit 32(b) to the Companys Annual Report
on Form 10-K for the fiscal year ended June
30, 2007, filed with the Securities and
Exchange Commission on August 24, 2007, and
incorporated herein by reference.)***
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*
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Filed with this report.
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**
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Portions of this Exhibit have been given confidential treatment by
the Securities and Exchange Commission.
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***
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Furnished with this report.
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+
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Management contract or compensatory plan or arrangement required
to be identified pursuant to Item 15(a)(3) of this Annual Report
on Form 10-K.
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