First Data 2013 Annual Report Download - page 97

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The following table presents a summary of the redeemable noncontrolling interest activity in 2013 and 2012:
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Balance as of January 1, 2012 $ 67.4
Distributions (36.0)
Share of income 36.0
Balance as of December 31, 2012 67.4
Distributions (34.4)
Share of income 34.1
Adjustment to redemption value of redeemable noncontrolling interest 2.0
Balance as of December 31, 2013 $69.1
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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 179.5 million.
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.
The Company defers recognition of substantially all of the stock-based compensation expense related to stock options and non-vested restricted stock
awards and units. Due to the nature of call rights associated with stock options, the Company will recognize expense related to most options only upon certain
liquidity or employment termination events. The nature of the call rights associated with stock options creates a performance condition that is not considered
probable until the occurrence of one of the events described above. The call rights create a performance condition as they allow Holdings to repurchase options
at the lesser of the fair value or the exercise price upon an option holder’s voluntary termination.
Stock-based compensation expense will be recognized related to certain restricted stock awards and units only upon a liquidity or employment
termination event which triggers vesting. For the remaining awards that vest based solely on service conditions, expense is recognized over the requisite service
period.
Under certain circumstances, the Company may redeem common stock held by its employees on behalf of its parent company, Holdings.
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:
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2013 $ 39.1
2012 $12.4
2011 $17.6
In April 2013, approximately $20 million of stock-based compensation expense was recognized as a result of granting an executive officer shares of
common stock of Holdings and fully vested restricted stock units.
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