First Data 2012 Annual Report Download - page 97

FIRST DATA CORPORATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Redeemable Noncontrolling Interest
The following table presents a summary of the redeemable noncontrolling interest activity in 2012 and 2011:
Note 13: Stock Compensation Plans
The Company’ s parent, Holdings, has a stock incentive plan for certain management employees of FDC and its affiliates (“stock
plan”). The stock plan provides the opportunity for certain management employees to purchase shares in Holdings and then receive a
number of options or restricted stock based on a multiple of their investment in such shares. The plan also allows for the Company to
award shares and options to management employees. The participants of the stock plan enter into a management stockholders’
agreement. Principal terms of the management stockholders’ agreement include restrictions on transfers, lock ups, right of first refusal,
registration rights, and a confidentiality, non-solicitation and non-compete covenant. The expense associated with this plan is recorded
by FDC. The number of shares authorized under the stock plan is 119.5 million, 83 million of which are authorized for options.
The participants of the stock plan have the right to require Holdings to repurchase the shares and options upon the employee’ s
termination due to death or disability. The put rights expire one year after the termination event or upon a change in control. The
repurchase price for the shares is their fair market value at the time of repurchase. The repurchase price for the options is their intrinsic
value at the time of repurchase.
Total stock-based compensation expense recognized in the “Selling, general and administrative” line item of the Consolidated
Statements of Operations resulting from stock options, non-vested restricted stock awards and non-vested restricted stock units was as
follows:
The Company has a deferred compensation plan for non-employee directors that allows each of these directors to defer their
annual compensation. The plan is unfunded. For purposes of determining the investment return on the deferred compensation, each
director’ s account is treated as if credited with a number of shares of Holdings stock determined by dividing the deferred
compensation amount by the first Board approved fair value of the stock during the year. The account balance will be paid in cash
upon termination of Board service, certain liquidity events or other certain events at the fair value of the stock at the time of
settlement. Due to the cash settlement provisions, the account balances are recorded as a liability and are adjusted to fair value
quarterly. As of December 31, 2012, the balance of this liability was $0.8 million.
Stock Options
During the years ended December 31, 2012, 2011 and 2010, time-based options were granted under the stock plan and during
the years ended December 31, 2011 and 2010, performance-based options were granted under the stock plan. The time-based options
and performance-based options have a contractual term of 10 years. Time-based options vest equally over a three to five year period
from the date of issuance and performance-based options vest based upon the Company achieving certain EBITDA targets. The
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(in millions)
Redeemable
Noncontrolling
Interest
Balance as of January 1, 2011 $28.1
Distributions (31.2)
Share of income 32.0
Adjustment to redemption value of redeemable noncontrolling interest 38.6
Other (0.1)
Balance as of December 31, 2011 67.4
Distributions (36.0)
Share of income 36.0
Balance as of December 31, 2012
$67.4
Year ended December 31,
(in millions) Amount
2012 $12.4
2011 17.6
2010 17.1