Table of Contents
FILED PURSUANT TO RULE 424(B)(3)
File Number 333-158657
SUNGARD DATA SYSTEMS INC.
SUPPLEMENT NO. 1 TO
MARKET-MAKING PROSPECTUS DATED OCTOBER 20, 2009
THE DATE OF THIS SUPPLEMENT IS NOVEMBER 6, 2009
ON NOVEMBER 6, 2009, SUNGARD DATA SYSTEMS INC. FILED THE ATTACHED
FORM 10-Q FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2009
Table of Contents
Securities and Exchange Commission
þ | Quarterly report pursuant to section 13 or 15(d) of the Securities Exchange Act of 1934 |
o | Transition report pursuant to section 13 or 15(d) of the Securities Exchange Act of 1934 |
SunGard Capital Corp. | 000-53653 | |
SunGard Capital Corp. II | 000-53654 | |
SunGard Data Systems Inc. | 1-12989 |
SunGard® Capital Corp. II
SunGard® Data Systems Inc.
Delaware | 20-3059890 | |
Delaware | 20-3060101 | |
Delaware | 51-0267091 | |
(State or other jurisdiction of incorporation or organization) | (IRS Employer Identification No.) |
(Address of principal executive offices, including zip code)
(Registrants’ telephone number, including area code)
SunGard Capital Corp. | Yesþ Noo | |
SunGard Capital Corp. II | Yesþ Noo | |
SunGard Data Systems Inc. | Yeso Noþ |
SunGard Capital Corp. | Yeso Noo | |
SunGard Capital Corp. II | Yeso Noo | |
SunGard Data Systems Inc. | Yeso Noo |
Large accelerated filer o. | Accelerated filer o. | Non-accelerated filer þ. (Do not check if a smaller reporting company) | Smaller reporting company o. |
Large accelerated filer o. | Accelerated filer o. | Non-accelerated filer þ. (Do not check if a smaller reporting company) | Smaller reporting company o. |
Large accelerated filer o. | Accelerated filer o. | Non-accelerated filer þ. (Do not check if a smaller reporting company) | Smaller reporting company o. |
SunGard Capital Corp. | Yeso Noþ | |
SunGard Capital Corp. II | Yeso Noþ | |
SunGard Data Systems Inc. | Yeso Noþ |
SunGard Capital Corp. | 254,801,732 shares of Class A common stock and 28,311,258 shares of Class L common stock | |
SunGard Capital Corp. II | 100 shares of common stock (100% owned by SunGard Capital Corp.) | |
SunGard Data Systems Inc. | 100 shares of common stock |
SunGard Capital Corp. II
SunGard Data Systems Inc.
And Subsidiaries
Page | ||||
SunGard Capital Corp. | ||||
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SunGard Capital Corp. II | ||||
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SunGard Data Systems Inc. | ||||
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23 | ||||
32 | ||||
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33 | ||||
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33 | ||||
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Table of Contents
1
Table of Contents
Consolidated Balance Sheets
(In millions except share and per-share amounts)
(Unaudited)
December 31, | September 30, | |||||||
2008 | 2009 | |||||||
Assets | ||||||||
Current: | ||||||||
Cash and cash equivalents | $ | 975 | $ | 479 | ||||
Trade receivables, less allowance for doubtful accounts of $15 and $69 | 701 | 855 | ||||||
Earned but unbilled receivables | 81 | 188 | ||||||
Prepaid expenses and other current assets | 122 | 148 | ||||||
Clearing broker assets | 309 | 376 | ||||||
Retained interest in accounts receivable sold | 285 | — | ||||||
Deferred income taxes | 22 | 8 | ||||||
Total current assets | 2,495 | 2,054 | ||||||
Property and equipment, less accumulated depreciation of $689 and $887 | 898 | 932 | ||||||
Software products, less accumulated amortization of $793 and $1,021 | 1,159 | 1,080 | ||||||
Customer base, less accumulated amortization of $668 and $885 | 2,616 | 2,361 | ||||||
Other tangible and intangible assets, less accumulated amortization of $29 and $24 | 207 | 205 | ||||||
Trade name | 1,075 | 1,026 | ||||||
Goodwill | 7,328 | 7,434 | ||||||
Total Assets | $ | 15,778 | $ | 15,092 | ||||
Liabilities and Equity | ||||||||
Current: | ||||||||
Short-term and current portion of long-term debt | $ | 322 | $ | 57 | ||||
Accounts payable | 87 | 96 | ||||||
Accrued compensation and benefits | 314 | 262 | ||||||
Accrued interest expense | 159 | 94 | ||||||
Other accrued expenses | 409 | 389 | ||||||
Clearing broker liabilities | 310 | 358 | ||||||
Deferred revenue | 977 | 972 | ||||||
Total current liabilities | 2,578 | 2,228 | ||||||
Long-term debt | 8,553 | 8,287 | ||||||
Deferred income taxes | 1,595 | 1,487 | ||||||
Total liabilities | 12,726 | 12,002 | ||||||
Commitments and contingencies | ||||||||
Noncontrolling interest in preferred stock of SCCII (held by management subject to a put option for death or disability) | 60 | 47 | ||||||
Class L common stock held by management subject to a put option for death or disability | 111 | 85 | ||||||
Class A common stock held by management subject to a put option for death or disability | 12 | 10 | ||||||
Stockholders’ equity: | ||||||||
Class L common stock, convertible, par value $.001 per share; cumulative 13.5% per annum, compounded quarterly; aggregate liquidation preference of $3,612 million and $4,005 million; 50,000,000 shares authorized, 28,472,965 and 28,552,325 shares issued | — | — | ||||||
Class A common stock, par value $.001 per share; 550,000,000 shares authorized, 256,260,680 and 256,975,139 shares issued | — | — | ||||||
Capital in excess of par value | 2,613 | 2,670 | ||||||
Treasury stock, 208,071 and 241,067 shares of Class L common stock; and 1,873,932 and 2,173,407 shares of Class A common stock | (24 | ) | (27 | ) | ||||
Accumulated deficit | (912 | ) | (1,125 | ) | ||||
Accumulated other comprehensive loss | (219 | ) | (118 | ) | ||||
Total SunGard Capital Corp. stockholders’ equity | 1,458 | 1,400 | ||||||
Noncontrolling interest in preferred stock of SCCII | 1,411 | 1,548 | ||||||
Total equity | 2,869 | 2,948 | ||||||
Total Liabilities and Equity | $ | 15,778 | $ | 15,092 | ||||
2
Table of Contents
Consolidated Statements of Operations
(In millions)
(Unaudited)
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2008 | 2009 | 2008 | 2009 | |||||||||||||
Revenue: | ||||||||||||||||
Services | $ | 1,267 | $ | 1,198 | $ | 3,679 | $ | 3,687 | ||||||||
License and resale fees | 78 | 93 | 235 | 236 | ||||||||||||
Total products and services | 1,345 | 1,291 | 3,914 | 3,923 | ||||||||||||
Reimbursed expenses | 49 | 46 | 139 | 118 | ||||||||||||
1,394 | 1,337 | 4,053 | 4,041 | |||||||||||||
Costs and expenses: | ||||||||||||||||
Cost of sales and direct operating | 728 | 642 | 2,024 | 2,038 | ||||||||||||
Sales, marketing and administration | 245 | 262 | 815 | 792 | ||||||||||||
Product development | 84 | 77 | 241 | 225 | ||||||||||||
Depreciation and amortization | 70 | 74 | 207 | 215 | ||||||||||||
Amortization of acquisition-related intangible assets | 131 | 150 | 361 | 404 | ||||||||||||
Merger costs | — | — | — | 1 | ||||||||||||
1,258 | 1,205 | 3,648 | 3,675 | |||||||||||||
Income from operations | 136 | 132 | 405 | 366 | ||||||||||||
Interest income | 4 | 5 | 13 | 6 | ||||||||||||
Interest expense and amortization of deferred financing fees | (142 | ) | (165 | ) | (433 | ) | (471 | ) | ||||||||
Other income (expense) | (24 | ) | (15 | ) | (49 | ) | 6 | |||||||||
Loss before income taxes | (26 | ) | (43 | ) | (64 | ) | (93 | ) | ||||||||
Benefit from (provision for) income taxes | (7 | ) | 3 | 11 | 12 | |||||||||||
Net loss | (33 | ) | (40 | ) | (53 | ) | (81 | ) | ||||||||
Income attributable to the noncontrolling interest | (39 | ) | (46 | ) | (117 | ) | (132 | ) | ||||||||
Net loss attributable to SunGard Capital Corp | $ | (72 | ) | $ | (86 | ) | $ | (170 | ) | $ | (213 | ) | ||||
3
Table of Contents
Consolidated Statements of Cash Flows
(In millions)
(Unaudited)
Nine Months Ended September 30, | ||||||||
2008 | 2009 | |||||||
Cash flow from operations: | ||||||||
Net loss | $ | (53 | ) | $ | (81 | ) | ||
Reconciliation of net loss to cash flow provided by operations: | ||||||||
Depreciation and amortization | 568 | 619 | ||||||
Deferred income tax benefit | (91 | ) | (82 | ) | ||||
Stock compensation expense | 21 | 22 | ||||||
Amortization of deferred financing costs and debt discount | 27 | 31 | ||||||
Other noncash items | 18 | (7 | ) | |||||
Accounts receivable and other current assets | 46 | 20 | ||||||
Accounts payable and accrued expenses | (179 | ) | (138 | ) | ||||
Clearing broker assets and liabilities, net | 31 | (19 | ) | |||||
Deferred revenue | — | (1 | ) | |||||
Cash flow provided by operations | 388 | 364 | ||||||
Investment activities: | ||||||||
Cash paid for acquired businesses, net of cash acquired | (174 | ) | (12 | ) | ||||
Cash paid for property and equipment and software | (280 | ) | (255 | ) | ||||
Other investing activities | 2 | 3 | ||||||
Cash used in investment activities | (452 | ) | (264 | ) | ||||
Financing activities: | ||||||||
Cash received from issuance of common stock | 3 | 1 | ||||||
Cash received from issuance of preferred stock | 1 | 1 | ||||||
Cash received from borrowings, net of fees | 1,326 | 211 | ||||||
Cash used to repay debt | (75 | ) | (814 | ) | ||||
Cash used to purchase treasury stock | (13 | ) | (4 | ) | ||||
Other financing activities | (5 | ) | (3 | ) | ||||
Cash provided by (used in) financing activities | 1,237 | (608 | ) | |||||
Effect of exchange rate changes on cash | (12 | ) | 12 | |||||
Increase (decrease) in cash and cash equivalents | 1,161 | (496 | ) | |||||
Beginning cash and cash equivalents | 427 | 975 | ||||||
Ending cash and cash equivalents | $ | 1,588 | $ | 479 | ||||
Supplemental information: | ||||||||
Acquired businesses: | ||||||||
Property and equipment | $ | 6 | $ | — | ||||
Software products | 61 | 8 | ||||||
Customer base | 85 | 4 | ||||||
Goodwill | 106 | 4 | ||||||
Other tangible and intangible assets | 1 | — | ||||||
Deferred income taxes | (33 | ) | (1 | ) | ||||
Purchase price obligations and debt assumed | (19 | ) | (1 | ) | ||||
Net current liabilities assumed | (33 | ) | (2 | ) | ||||
Cash paid for acquired businesses, net of cash acquired of $24 and $1, respectively | $ | 174 | $ | 12 | ||||
4
Table of Contents
Consolidated Balance Sheets
(In millions except share and per-share amounts)
(Unaudited)
December 31, | September 30, | |||||||
2008 | 2009 | |||||||
Assets | ||||||||
Current: | ||||||||
Cash and cash equivalents | $ | 975 | $ | 479 | ||||
Trade receivables, less allowance for doubtful accounts of $15 and $69 | 701 | 855 | ||||||
Earned but unbilled receivables | 81 | �� | 188 | |||||
Prepaid expenses and other current assets | 122 | 148 | ||||||
Clearing broker assets | 309 | 376 | ||||||
Retained interest in accounts receivable sold | 285 | — | ||||||
Deferred income taxes | 22 | 8 | ||||||
Total current assets | 2,495 | 2,054 | ||||||
Property and equipment, less accumulated depreciation of $689 and $887 | 898 | 932 | ||||||
Software products, less accumulated amortization of $793 and $1,021 | 1,159 | 1,080 | ||||||
Customer base, less accumulated amortization of $668 and $885 | 2,616 | 2,361 | ||||||
Other tangible and intangible assets, less accumulated amortization of $29 and $24 | 207 | 205 | ||||||
Trade name | 1,075 | 1,026 | ||||||
Goodwill | 7,328 | 7,434 | ||||||
Total Assets | $ | 15,778 | $ | 15,092 | ||||
Liabilities and Stockholders’ Equity | ||||||||
Current: | ||||||||
Short-term and current portion of long-term debt | $ | 322 | $ | 57 | ||||
Accounts payable | 87 | 96 | ||||||
Accrued compensation and benefits | 314 | 262 | ||||||
Accrued interest expense | 159 | 94 | ||||||
Other accrued expenses | 399 | 390 | ||||||
Clearing broker liabilities | 310 | 358 | ||||||
Deferred revenue | 977 | 972 | ||||||
Total current liabilities | 2,568 | 2,229 | ||||||
Long-term debt | 8,553 | 8,287 | ||||||
Deferred income taxes | 1,595 | 1,486 | ||||||
Total liabilities | 12,716 | 12,002 | ||||||
Commitments and contingencies | ||||||||
Preferred stock held by management subject to a put option for death or disability | 51 | 36 | ||||||
Stockholders’ equity: | ||||||||
Preferred stock, par value $.001 per share; cumulative 11.5% per annum, compounded quarterly; aggregate liquidation preference of $1,444 million and $1,578 million; 14,999,000 shares authorized, 9,856,052 and 9,883,531 issued | — | — | ||||||
Common stock, par value $.001 per share; 1,000 shares authorized, 100 shares issued and oustanding | — | — | ||||||
Capital in excess of par value | 3,687 | 3,712 | ||||||
Treasury stock, 72,039 and 83,464 shares | (8 | ) | (10 | ) | ||||
Accumulated deficit | (449 | ) | (530 | ) | ||||
Accumulated other comprehensive loss | (219 | ) | (118 | ) | ||||
Total stockholders’ equity | 3,011 | 3,054 | ||||||
Total Liabilities and Stockholders’ Equity | $ | 15,778 | $ | 15,092 | ||||
5
Table of Contents
Consolidated Statements of Operations
(In millions)
(Unaudited)
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2008 | 2009 | 2008 | 2009 | |||||||||||||
Revenue: | ||||||||||||||||
Services | $ | 1,267 | $ | 1,198 | $ | 3,679 | $ | 3,687 | ||||||||
License and resale fees | 78 | 93 | 235 | 236 | ||||||||||||
Total products and services | 1,345 | 1,291 | 3,914 | 3,923 | ||||||||||||
Reimbursed expenses | 49 | 46 | 139 | 118 | ||||||||||||
1,394 | 1,337 | 4,053 | 4,041 | |||||||||||||
Costs and expenses: | ||||||||||||||||
Cost of sales and direct operating | 728 | 642 | 2,024 | 2,038 | ||||||||||||
Sales, marketing and administration | 245 | 262 | 815 | 792 | ||||||||||||
Product development | 84 | 77 | 241 | 225 | ||||||||||||
Depreciation and amortization | 70 | 74 | 207 | 215 | ||||||||||||
Amortization of acquisition-related intangible assets | 131 | 150 | 361 | 404 | ||||||||||||
Merger costs | — | — | — | 1 | ||||||||||||
1,258 | 1,205 | 3,648 | 3,675 | |||||||||||||
Income from operations | 136 | 132 | 405 | 366 | ||||||||||||
Interest income | 4 | 5 | 13 | 6 | ||||||||||||
Interest expense and amortization of deferred financing fees | (142 | ) | (165 | ) | (433 | ) | (471 | ) | ||||||||
Other income (expense) | (24 | ) | (15 | ) | (49 | ) | 6 | |||||||||
Loss before income taxes | (26 | ) | (43 | ) | (64 | ) | (93 | ) | ||||||||
Benefit from (provision for) income taxes | (9 | ) | 3 | 9 | 12 | |||||||||||
Net loss | $ | (35 | ) | $ | (40 | ) | $ | (55 | ) | $ | (81 | ) | ||||
6
Table of Contents
Consolidated Statements of Cash Flows
(In millions)
(Unaudited)
Nine Months Ended September 30, | ||||||||
2008 | 2009 | |||||||
Cash flow from operations: | ||||||||
Net loss | $ | (55 | ) | $ | (81 | ) | ||
Reconciliation of net loss to cash flow provided by operations: | ||||||||
Depreciation and amortization | 568 | 619 | ||||||
Deferred income tax benefit | (91 | ) | (82 | ) | ||||
Stock compensation expense | 21 | 22 | ||||||
Amortization of deferred financing costs and debt discount | 27 | 31 | ||||||
Other noncash items | 18 | (7 | ) | |||||
Accounts receivable and other current assets | 44 | 20 | ||||||
Accounts payable and accrued expenses | (174 | ) | (138 | ) | ||||
Clearing broker assets and liabilities, net | 31 | (19 | ) | |||||
Deferred revenue | — | (1 | ) | |||||
Cash flow provided by operations | 389 | 364 | ||||||
Investment activities: | ||||||||
Cash paid for acquired businesses, net of cash acquired | (174 | ) | (12 | ) | ||||
Cash paid for property and equipment and software | (280 | ) | (255 | ) | ||||
Other investing activities | 2 | 3 | ||||||
Cash used in investment activities | (452 | ) | (264 | ) | ||||
Financing activities: | ||||||||
Cash received from issuance of preferred stock | 1 | 1 | ||||||
Cash received from borrowings, net of fees | 1,326 | 211 | ||||||
Cash used to repay debt | (75 | ) | (814 | ) | ||||
Cash used to purchase treasury stock | (3 | ) | (1 | ) | ||||
Other financing activities | (13 | ) | (5 | ) | ||||
Cash provided by (used in) financing activities | 1,236 | (608 | ) | |||||
Effect of exchange rate changes on cash | (12 | ) | 12 | |||||
Increase (decrease) in cash and cash equivalents | 1,161 | (496 | ) | |||||
Beginning cash and cash equivalents | 427 | 975 | ||||||
Ending cash and cash equivalents | $ | 1,588 | $ | 479 | ||||
Supplemental information: | ||||||||
Acquired businesses: | ||||||||
Property and equipment | $ | 6 | $ | — | ||||
Software products | 61 | 8 | ||||||
Customer base | 85 | 4 | ||||||
Goodwill | 106 | 4 | ||||||
Other tangible and intangible assets | 1 | — | ||||||
Deferred income taxes | (33 | ) | (1 | ) | ||||
Purchase price obligations and debt assumed | (19 | ) | (1 | ) | ||||
Net current liabilities assumed | (33 | ) | (2 | ) | ||||
Cash paid for acquired businesses, net of cash acquired of $24 and $1, respectively | $ | 174 | $ | 12 | ||||
7
Table of Contents
Consolidated Balance Sheets
(In millions except share and per-share amounts)
(Unaudited)
December 31, | September 30, | |||||||
2008 | 2009 | |||||||
Assets | ||||||||
Current: | ||||||||
Cash and cash equivalents | $ | 975 | $ | 479 | ||||
Trade receivables, less allowance for doubtful accounts of $15 and $69 | 701 | 855 | ||||||
Earned but unbilled receivables | 81 | 188 | ||||||
Prepaid expenses and other current assets | 122 | 148 | ||||||
Clearing broker assets | 309 | 376 | ||||||
Retained interest in accounts receivable sold | 285 | — | ||||||
Deferred income taxes | 22 | 8 | ||||||
Total current assets | 2,495 | 2,054 | ||||||
Property and equipment, less accumulated depreciation of $689 and $887 | 898 | 932 | ||||||
Software products, less accumulated amortization of $793 and $1,021 | 1,159 | 1,080 | ||||||
Customer base, less accumulated amortization of $668 and $885 | 2,616 | 2,361 | ||||||
Other tangible and intangible assets, less accumulated amortization of $29 and $24 | 207 | 205 | ||||||
Trade name | 1,075 | 1,026 | ||||||
Goodwill | 7,328 | 7,434 | ||||||
Total Assets | $ | 15,778 | $ | 15,092 | ||||
Liabilities and Stockholder’s Equity | ||||||||
Current: | ||||||||
Short-term and current portion of long-term debt | $ | 322 | $ | 57 | ||||
Accounts payable | 87 | 96 | ||||||
Accrued compensation and benefits | 314 | 262 | ||||||
Accrued interest expense | 159 | 94 | ||||||
Other accrued expenses | 401 | 391 | ||||||
Clearing broker liabilities | 310 | 358 | ||||||
Deferred revenue | 977 | 972 | ||||||
Total current liabilities | 2,570 | 2,230 | ||||||
Long-term debt | 8,553 | 8,287 | ||||||
Deferred income taxes | 1,592 | 1,482 | ||||||
Total liabilities | 12,715 | 11,999 | ||||||
Commitments and contingencies | ||||||||
Stockholder’s equity: | ||||||||
Common stock, par value $.01 per share; 100 shares authorized, issued and oustanding | — | — | ||||||
Capital in excess of par value | 3,731 | 3,741 | ||||||
Accumulated deficit | (449 | ) | (530 | ) | ||||
Accumulated other comprehensive loss | (219 | ) | (118 | ) | ||||
Total stockholder’s equity | 3,063 | 3,093 | ||||||
Total Liabilities and Stockholder’s Equity | $ | 15,778 | $ | 15,092 | ||||
8
Table of Contents
Consolidated Statements of Operations
(In millions)
(Unaudited)
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2008 | 2009 | 2008 | 2009 | |||||||||||||
Revenue: | ||||||||||||||||
Services | $ | 1,267 | $ | 1,198 | $ | 3,679 | $ | 3,687 | ||||||||
License and resale fees | 78 | 93 | 235 | 236 | ||||||||||||
Total products and services | 1,345 | 1,291 | 3,914 | 3,923 | ||||||||||||
Reimbursed expenses | 49 | 46 | 139 | 118 | ||||||||||||
1,394 | 1,337 | 4,053 | 4,041 | |||||||||||||
Costs and expenses: | ||||||||||||||||
Cost of sales and direct operating | 728 | 642 | 2,024 | 2,038 | ||||||||||||
Sales, marketing and administration | 245 | 262 | 815 | 792 | ||||||||||||
Product development | 84 | 77 | 241 | 225 | ||||||||||||
Depreciation and amortization | 70 | 74 | 207 | 215 | ||||||||||||
Amortization of acquisition-related intangible assets | 131 | 150 | 361 | 404 | ||||||||||||
Merger costs | — | — | — | 1 | ||||||||||||
1,258 | 1,205 | 3,648 | 3,675 | |||||||||||||
Income from operations | 136 | 132 | 405 | 366 | ||||||||||||
Interest income | 4 | 5 | 13 | 6 | ||||||||||||
Interest expense and amortization of deferred financing fees | (142 | ) | (165 | ) | (433 | ) | (471 | ) | ||||||||
Other income (expense) | (24 | ) | (15 | ) | (49 | ) | 6 | |||||||||
Income (loss) before income taxes | (26 | ) | (43 | ) | (64 | ) | (93 | ) | ||||||||
Benefit from (provision for) income taxes | (9 | ) | 3 | 9 | 12 | |||||||||||
Net income (loss) | $ | (35 | ) | $ | (40 | ) | $ | (55 | ) | $ | (81 | ) | ||||
9
Table of Contents
Consolidated Statements of Cash Flows
(In millions)
(Unaudited)
Nine Months Ended | ||||||||
September 30, | ||||||||
2008 | 2009 | |||||||
Cash flow from operations: | ||||||||
Net loss | $ | (55 | ) | $ | (81 | ) | ||
Reconciliation of net loss to cash flow provided by operations: | ||||||||
Depreciation and amortization | 568 | 619 | ||||||
Deferred income tax benefit | (91 | ) | (83 | ) | ||||
Stock compensation expense | 21 | 22 | ||||||
Amortization of deferred financing costs and debt discount | 27 | 31 | ||||||
Other noncash items | 18 | (7 | ) | |||||
Accounts receivable and other current assets | 44 | 20 | ||||||
Accounts payable and accrued expenses | (174 | ) | (137 | ) | ||||
Clearing broker assets and liabilities, net | 31 | (19 | ) | |||||
Deferred revenue | — | (1 | ) | |||||
Cash flow provided by operations | 389 | 364 | ||||||
Investment activities: | ||||||||
Cash paid for acquired businesses, net of cash acquired | (174 | ) | (12 | ) | ||||
Cash paid for property and equipment and software | (280 | ) | (255 | ) | ||||
Other investing activities | 2 | 3 | ||||||
Cash used in investment activities | (452 | ) | (264 | ) | ||||
Financing activities: | ||||||||
Cash received from borrowings, net of fees | 1,326 | 211 | ||||||
Cash used to repay debt | (75 | ) | (814 | ) | ||||
Other financing activities | (15 | ) | (5 | ) | ||||
Cash provided by (used in) financing activities | 1,236 | (608 | ) | |||||
Effect of exchange rate changes on cash | (12 | ) | 12 | |||||
Increase (decrease) in cash and cash equivalents | 1,161 | (496 | ) | |||||
Beginning cash and cash equivalents | 427 | 975 | ||||||
Ending cash and cash equivalents | $ | 1,588 | $ | 479 | ||||
Supplemental information: | ||||||||
Acquired businesses: | ||||||||
Property and equipment | $ | 6 | $ | — | ||||
Software products | 61 | 8 | ||||||
Customer base | 85 | 4 | ||||||
Goodwill | 106 | 4 | ||||||
Other tangible and intangible assets | 1 | — | ||||||
Deferred income taxes | (33 | ) | (1 | ) | ||||
Purchase price obligations and debt assumed | (19 | ) | (1 | ) | ||||
Net current liabilities assumed | (33 | ) | (2 | ) | ||||
Cash paid for acquired businesses, net of cash acquired of $24 and $1, respectively | $ | 174 | $ | 12 | ||||
10
Table of Contents
SUNGARD CAPITAL CORP. II
SUNGARD DATA SYSTEMS INC.
11
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Gross Goodwill | Goodwill Impairment | |||||||||||||||||||||||||||
FS | HE | PS | AS | Total | PS | Total | ||||||||||||||||||||||
Balance at December 31, 2008 | $ | 3,431 | $ | 965 | $ | 813 | $ | 2,247 | $ | 7,456 | $ | (128 | ) | $ | (128 | ) | ||||||||||||
2009 acquisitions | 2 | — | — | — | 2 | — | — | |||||||||||||||||||||
Adjustments related to prior year acquisitions and the Transaction | 45 | (1 | ) | (1 | ) | (11 | ) | 32 | — | — | ||||||||||||||||||
Effect of foreign currency translation | 38 | — | 7 | 27 | 72 | — | — | |||||||||||||||||||||
Balance at September 30, 2009 | $ | 3,516 | $ | 964 | $ | 819 | $ | 2,263 | $ | 7,562 | $ | (128 | ) | $ | (128 | ) | ||||||||||||
December 31, | September 30, | |||||||
2008 | 2009 | |||||||
Segregated customer cash and treasury bills | $ | 148 | $ | 157 | ||||
Securities owned | 44 | 51 | ||||||
Securities borrowed | 87 | 146 | ||||||
Receivables from customers and other | 30 | 22 | ||||||
Clearing broker assets | $ | 309 | $ | 376 | ||||
Payables to customers | $ | 191 | $ | 184 | ||||
Securities loaned | 47 | 107 | ||||||
Customer securities sold short, not yet purchased | 3 | 22 | ||||||
Payable to brokers and dealers | 69 | 45 | ||||||
Clearing broker liabilities | $ | 310 | $ | 358 | ||||
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Notional | ||||||||||
Amount (in | Interest rate | Interest rate | ||||||||
Inception | Maturity | millions) | paid | received | ||||||
February 2006 | February 2011 | $ | 800 | 5.00% | LIBOR | |||||
January 2008 | February 2011 | $ | 750 | 3.17% | LIBOR | |||||
February 2008 | February 2010 | $ | 750 | 2.71% | LIBOR | |||||
January/February 2009 | February 2012 | $ | 1,200 | 1.78% | LIBOR | |||||
Total / Weighted Average interest rate | $ | 3,500 | 3.01% | |||||||
Three months ended | Nine months ended | |||||||||||||||||
September 30, | September 30, | |||||||||||||||||
2008 | 2009 | 2008 | 2009 | Classification | ||||||||||||||
Gain (loss) recognized in Accumulated Other Comprehensive Loss (OCI) | $ | (3 | ) | $ | (4 | ) | $ | 6 | $ | 8 | OCI | |||||||
Loss reclassified from accumulated OCI into income | (9 | ) | (22 | ) | (21 | ) | (56 | ) | Interest expense and amortization of deferred financing costs |
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Table of Contents
Fair Value Measures Using | ||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Assets | ||||||||||||||||
Clearing broker assets — securities owned | $ | 51 | $ | — | $ | — | $ | 51 | ||||||||
Liabilities | ||||||||||||||||
Clearing broker liabilities — customer securities sold short, not yet purchased | $ | 22 | $ | — | $ | — | $ | 22 | ||||||||
Interest rate swap agreements | — | 85 | — | 85 | ||||||||||||
$ | 22 | $ | 85 | $ | — | $ | 107 | |||||||||
Carrying | Fair | |||||||
Value | Value | |||||||
Floating rate debt | $ | 4,991 | $ | 4,839 | ||||
Fixed rate debt | 3,352 | 3,402 |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2008 | 2009 | 2008 | 2009 | |||||||||||||
Net loss | $ | (35 | ) | $ | (40 | ) | $ | (55 | ) | $ | (81 | ) | ||||
Foreign currency translation gains (losses) | (121 | ) | 33 | (101 | ) | 93 | ||||||||||
Unrealized gains (losses) on derivative instruments | (3 | ) | (4 | ) | 6 | 8 | ||||||||||
Comprehensive income (loss) | $ | (159 | ) | $ | (11 | ) | $ | (150 | ) | $ | 20 | |||||
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SunGard Capital | Noncontrolling | |||||||||||
Corp. Shareholders | interest | Total | ||||||||||
Balance at December 31, 2008 | $ | 1,458 | $ | 1,411 | $ | 2,869 | ||||||
Net income | (213 | ) | 131 | (82 | ) | |||||||
Stock compensation expense | 22 | — | 22 | |||||||||
Expiration of put options due to employee terminations and other | 32 | 6 | 38 | |||||||||
Foreign currency translation | 93 | — | 93 | |||||||||
Net unrealized gain (loss) on derivative instruments | 8 | — | 8 | |||||||||
Balance at September 30, 2009 | $ | 1,400 | $ | 1,548 | $ | 2,948 | ||||||
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Table of Contents
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2008 | 2009 | 2008 | 2009 | |||||||||||||
Revenue: | ||||||||||||||||
Financial systems | $ | 774 | $ | 724 | $ | 2,171 | $ | 2,232 | ||||||||
Higher education | 128 | 125 | 400 | 389 | ||||||||||||
Public Sector | 94 | 103 | 307 | 289 | ||||||||||||
Software & processing solutions | 996 | 952 | 2,878 | 2,910 | ||||||||||||
Availability services | 398 | 385 | 1,175 | 1,131 | ||||||||||||
$ | 1,394 | $ | 1,337 | $ | 4,053 | $ | 4,041 | |||||||||
Depreciation and amortization: | ||||||||||||||||
Financial systems | $ | 16 | $ | 20 | $ | 50 | $ | 58 | ||||||||
Higher education | 3 | 3 | 8 | 10 | ||||||||||||
Public sector | 3 | 2 | 7 | 6 | ||||||||||||
Software & processing solutions | 22 | 25 | 65 | 74 | ||||||||||||
Availability services | 48 | 49 | 142 | 141 | ||||||||||||
Corporate administration | — | — | — | — | ||||||||||||
$ | 70 | $ | 74 | $ | 207 | $ | 215 | |||||||||
Income (loss) from operations: | ||||||||||||||||
Financial systems | $ | 138 | $ | 157 | $ | 388 | $ | 414 | ||||||||
Higher education | 31 | 33 | 91 | 95 | ||||||||||||
Public sector | 16 | 19 | 55 | 55 | ||||||||||||
Software & processing solutions | 185 | 209 | 534 | 564 | ||||||||||||
Availability services | 114 | 103 | 326 | 291 | ||||||||||||
Corporate and other items(1) | (163 | ) | (180 | ) | (455 | ) | (488 | ) | ||||||||
Merger costs | — | — | — | (1 | ) | |||||||||||
$ | 136 | $ | 132 | $ | 405 | $ | 366 | |||||||||
Cash paid for property and equipment and software: | ||||||||||||||||
Financial systems | $ | 24 | $ | 16 | $ | 63 | $ | 60 | ||||||||
Higher education | 5 | 2 | 21 | 6 | ||||||||||||
Public sector | 2 | 4 | 6 | 10 | ||||||||||||
Software & processing solutions | 31 | 22 | 90 | 76 | ||||||||||||
Availability services | 60 | 66 | 190 | 179 | ||||||||||||
Corporate administration | — | — | — | — | ||||||||||||
$ | 91 | $ | 88 | $ | 280 | $ | 255 | |||||||||
(1) | Includes corporate administrative expenses, stock compensation expense, management fees paid to the Sponsors, other items and amortization of acquisition-related intangible assets of $131 million and $150 million for the three month periods ended September 30, 2008 and 2009, respectively, and $361 million and $404 million for the nine month periods ended September 30, 2008 and 2009, respectively. |
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Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2008 | 2009 | 2008 | 2009 | |||||||||||||
Amortization of acquisition-related intangible assets: | ||||||||||||||||
Financial systems | $ | 73 | (1) | $ | 91 | (1) | $ | 200 | (1) | $ | 227 | (1) | ||||
Higher education | 8 | 8 | 26 | 25 | ||||||||||||
Public sector | 15 | (1) | 8 | (1) | 36 | (1) | 23 | (1) | ||||||||
Software & processing solutions | 96 | 107 | 262 | 275 | ||||||||||||
Availability services | 34 | 42 | 96 | 127 | ||||||||||||
Corporate administration | 1 | 1 | 3 | 2 | ||||||||||||
$ | 131 | $ | 150 | $ | 361 | $ | 404 | |||||||||
(1) | 2008 includes approximately $11 million and $4 million of impairment charges related to customer base and software for subsidiaries in the FS and PS segments, respectively. 2009 includes approximately $16 million and $10 million of impairment charges related to customer base and software, respectively, for subsidiaries in the FS segment. |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2008 | 2009 | 2008 | 2009 | |||||||||||||
Trading Systems | $ | 239 | $ | 161 | $ | 557 | $ | 610 | ||||||||
Wealth Management | 127 | 112 | 399 | 321 | ||||||||||||
Brokerage & Clearance | 61 | 68 | 196 | 207 | ||||||||||||
Global Trading | — | 72 | — | 195 | ||||||||||||
Capital Markets | 72 | 68 | 242 | 192 | ||||||||||||
Institutional Asset Management | 60 | 53 | 172 | 151 | ||||||||||||
Corporations | 51 | 45 | 140 | 134 | ||||||||||||
Banks | 43 | 38 | 121 | 107 | ||||||||||||
All other | 121 | 107 | 344 | 315 | ||||||||||||
Total Financial Systems | $ | 774 | $ | 724 | $ | 2,171 | $ | 2,232 | ||||||||
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Supplemental Condensed Consolidating Balance Sheet | ||||||||||||||||||||
December 31, 2008 | ||||||||||||||||||||
Parent | Guarantor | Non-Guarantor | ||||||||||||||||||
(in millions) | Company | Subsidiaries | Subsidiaries | Eliminations | Consolidated | |||||||||||||||
Assets | ||||||||||||||||||||
Current: | ||||||||||||||||||||
Cash and cash equivalents | $ | 511 | $ | 16 | $ | 448 | $ | — | $ | 975 | ||||||||||
Intercompany balances | (5,192 | ) | 5,268 | (76 | ) | — | — | |||||||||||||
Trade receivables, net | (1 | ) | 406 | 377 | — | 782 | ||||||||||||||
Prepaid expenses, taxes and other current assets | 1,680 | 75 | 660 | (1,677 | ) | 738 | ||||||||||||||
Total current assets | (3,002 | ) | 5,765 | 1,409 | (1,677 | ) | 2,495 | |||||||||||||
Property and equipment, net | 1 | 619 | 278 | — | 898 | |||||||||||||||
Intangible assets, net | 178 | 4,106 | 773 | — | 5,057 | |||||||||||||||
Intercompany balances | 967 | (720 | ) | (247 | ) | — | — | |||||||||||||
Goodwill | — | 6,146 | 1,182 | — | 7,328 | |||||||||||||||
Investment in subsidiaries | 13,686 | 2,298 | — | (15,984 | ) | — | ||||||||||||||
Total Assets | $ | 11,830 | $ | 18,214 | $ | 3,395 | $ | (17,661 | ) | $ | 15,778 | |||||||||
Liabilities and Stockholder’s Equity | ||||||||||||||||||||
Current: | ||||||||||||||||||||
Short-term and current portion of long-term debt | $ | 295 | $ | 9 | $ | 18 | $ | — | $ | 322 | ||||||||||
Accounts payable and other current liabilities | 319 | 2,611 | 995 | (1,677 | ) | 2,248 | ||||||||||||||
Total current liabilities | 614 | 2,620 | 1,013 | (1,677 | ) | 2,570 | ||||||||||||||
Long-term debt | 8,227 | 9 | 317 | — | 8,553 | |||||||||||||||
Intercompany debt | (8 | ) | 416 | (162 | ) | (246 | ) | — | ||||||||||||
Deferred income taxes | (66 | ) | 1,483 | 175 | — | 1,592 | ||||||||||||||
Total liabilities | 8,767 | 4,528 | 1,343 | (1,923 | ) | 12,715 | ||||||||||||||
Total stockholder’s equity | 3,063 | 13,686 | 2,052 | (15,738 | ) | 3,063 | ||||||||||||||
Total Liabilities and Stockholder’s Equity | $ | 11,830 | $ | 18,214 | $ | 3,395 | $ | (17,661 | ) | $ | 15,778 | |||||||||
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Supplemental Condensed Consolidating Balance Sheet | ||||||||||||||||||||
September 30, 2009 | ||||||||||||||||||||
Parent | Guarantor | Non-Guarantor | ||||||||||||||||||
(in millions) | Company | Subsidiaries | Subsidiaries | Eliminations | Consolidated | |||||||||||||||
Assets | ||||||||||||||||||||
Current: | ||||||||||||||||||||
Cash and cash equivalents | $ | 7 | $ | (9 | ) | $ | 481 | $ | — | $ | 479 | |||||||||
Intercompany balances | (6,352 | ) | 5,549 | 803 | — | — | ||||||||||||||
Trade receivables, net | — | 738 | 305 | — | 1,043 | |||||||||||||||
Prepaid expenses, taxes and other current assets | 1,783 | 76 | 516 | (1,843 | ) | 532 | ||||||||||||||
Total current assets | (4,562 | ) | 6,354 | 2,105 | (1,843 | ) | 2,054 | |||||||||||||
Property and equipment, net | 1 | 614 | 317 | — | 932 | |||||||||||||||
Intangible assets, net | 173 | 3,849 | 650 | — | 4,672 | |||||||||||||||
Intercompany balances | 980 | (721 | ) | (259 | ) | — | — | |||||||||||||
Goodwill | — | 6,130 | 1,304 | — | 7,434 | |||||||||||||||
Investment in subsidiaries | 14,500 | 2,663 | — | (17,163 | ) | — | ||||||||||||||
Total Assets | $ | 11,092 | $ | 18,889 | $ | 4,117 | $ | (19,006 | ) | $ | 15,092 | |||||||||
Liabilities and Stockholder’s Equity | ||||||||||||||||||||
Current: | ||||||||||||||||||||
Short-term and current portion of long-term debt | $ | 45 | $ | 6 | $ | 6 | $ | — | $ | 57 | ||||||||||
Accounts payable and other current liabilities | 230 | 2,731 | 1,055 | (1,843 | ) | 2,173 | ||||||||||||||
Total current liabilities | 275 | 2,737 | 1,061 | (1,843 | ) | 2,230 | ||||||||||||||
Long-term debt | 7,697 | 5 | 585 | — | 8,287 | |||||||||||||||
Intercompany debt | 84 | 252 | (161 | ) | (175 | ) | — | |||||||||||||
Deferred income taxes | (57 | ) | 1,395 | 144 | — | 1,482 | ||||||||||||||
Total liabilities | 7,999 | 4,389 | 1,629 | (2,018 | ) | 11,999 | ||||||||||||||
Total stockholder’s equity | 3,093 | 14,500 | 2,488 | �� | (16,988 | ) | 3,093 | |||||||||||||
Total Liabilities and Stockholder’s Equity | $ | 11,092 | $ | 18,889 | $ | 4,117 | $ | (19,006 | ) | $ | 15,092 | |||||||||
Supplemental Condensed Consolidating Schedule of Operations | ||||||||||||||||||||
Three Months Ended September 30, 2008 | ||||||||||||||||||||
Parent | Guarantor | Non-Guarantor | ||||||||||||||||||
(in millions) | Company | Subsidiaries | Subsidiaries | Eliminations | Consolidated | |||||||||||||||
Total revenue | $ | — | $ | 830 | $ | 550 | $ | 14 | $ | 1,394 | ||||||||||
Costs and expenses: | ||||||||||||||||||||
Cost of sales and direct operating | — | 343 | 371 | 14 | 728 | |||||||||||||||
Sales, marketing and administration | 20 | 144 | 81 | — | 245 | |||||||||||||||
Product development | — | 45 | 39 | — | 84 | |||||||||||||||
Depreciation and amortization | — | 51 | 19 | — | 70 | |||||||||||||||
Amortization of acquisition-related intangible assets | 1 | 92 | 38 | — | 131 | |||||||||||||||
Merger costs | — | — | — | — | — | |||||||||||||||
21 | 675 | 548 | 14 | 1,258 | ||||||||||||||||
Income (loss) from operations | (21 | ) | 155 | 2 | — | 136 | ||||||||||||||
Net interest income (expense) | (137 | ) | (14 | ) | 13 | — | (138 | ) | ||||||||||||
Other income (expense) | 60 | 11 | (6 | ) | (89 | ) | (24 | ) | ||||||||||||
Income (loss) before income taxes | (98 | ) | 152 | 9 | (89 | ) | (26 | ) | ||||||||||||
Provision (benefit) for income taxes | (63 | ) | 73 | (1 | ) | — | 9 | |||||||||||||
Net income (loss) | $ | (35 | ) | $ | 79 | $ | 10 | $ | (89 | ) | $ | (35 | ) | |||||||
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Supplemental Condensed Consolidating Schedule of Operations | ||||||||||||||||||||
Three Months Ended September 30, 2009 | ||||||||||||||||||||
Parent | Guarantor | Non-Guarantor | ||||||||||||||||||
(in millions) | Company | Subsidiaries | Subsidiaries | Eliminations | Consolidated | |||||||||||||||
Total revenue | $ | — | $ | 842 | $ | 520 | $ | (25 | ) | $ | 1,337 | |||||||||
Costs and expenses: | ||||||||||||||||||||
Cost of sales and direct operating | — | 354 | 313 | (25 | ) | 642 | ||||||||||||||
Sales, marketing and administration | 23 | 137 | 102 | — | 262 | |||||||||||||||
Product development | — | 44 | 33 | — | 77 | |||||||||||||||
Depreciation and amortization | — | 54 | 20 | — | 74 | |||||||||||||||
Amortization of acquisition-related intangible assets | 1 | 99 | 50 | — | 150 | |||||||||||||||
Merger costs | — | — | — | — | — | |||||||||||||||
24 | 688 | 518 | (25 | ) | 1,205 | |||||||||||||||
Income (loss) from operations | (24 | ) | 154 | 2 | — | 132 | ||||||||||||||
Net interest income (expense) | (141 | ) | 13 | (32 | ) | — | (160 | ) | ||||||||||||
Other income (expense) | 238 | (55 | ) | (15 | ) | (183 | ) | (15 | ) | |||||||||||
Income (loss) before income taxes | 73 | 112 | (45 | ) | (183 | ) | (43 | ) | ||||||||||||
Benefit from (provision for) income taxes | (113 | ) | 126 | (10 | ) | — | 3 | |||||||||||||
Net income (loss) | $ | (40 | ) | $ | 238 | $ | (55 | ) | $ | (183 | ) | $ | (40 | ) | ||||||
Supplemental Condensed Consolidating Schedule of Operations | ||||||||||||||||||||
Nine Months Ended September 30, 2008 | ||||||||||||||||||||
Parent | Guarantor | Non-Guarantor | ||||||||||||||||||
(in millions) | Company | Subsidiaries | Subsidiaries | Eliminations | Consolidated | |||||||||||||||
Total revenue | $ | — | $ | 2,654 | $ | 1,505 | $ | (106 | ) | $ | 4,053 | |||||||||
Costs and expenses: | ||||||||||||||||||||
Cost of sales and direct operating | — | 1,205 | 925 | (106 | ) | 2,024 | ||||||||||||||
Sales, marketing and administration | 69 | 448 | 298 | — | 815 | |||||||||||||||
Product development | — | 140 | 101 | — | 241 | |||||||||||||||
Depreciation and amortization | — | 152 | 55 | — | 207 | |||||||||||||||
Amortization of acquisition-related intangible assets | 3 | 278 | 80 | — | 361 | |||||||||||||||
Merger costs | — | — | — | — | — | |||||||||||||||
72 | 2,223 | 1,459 | (106 | ) | 3,648 | |||||||||||||||
Income (loss) from operations | (72 | ) | 431 | 46 | — | 405 | ||||||||||||||
Net interest income (expense) | (392 | ) | (5 | ) | (23 | ) | — | (420 | ) | |||||||||||
Other income (expense) | 238 | (1 | ) | (29 | ) | (257 | ) | (49 | ) | |||||||||||
Income (loss) before income taxes | (226 | ) | 425 | (6 | ) | (257 | ) | (64 | ) | |||||||||||
Provision (benefit) for income taxes | (171 | ) | 168 | (6 | ) | — | (9 | ) | ||||||||||||
Net income (loss) | $ | (55 | ) | $ | 257 | $ | — | $ | (257 | ) | $ | (55 | ) | |||||||
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Table of Contents
Supplemental Condensed Consolidating Schedule of Operations | ||||||||||||||||||||
Nine Months Ended September 30, 2009 | ||||||||||||||||||||
Parent | Guarantor | Non-Guarantor | ||||||||||||||||||
(in millions) | Company | Subsidiaries | Subsidiaries | Eliminations | Consolidated | |||||||||||||||
Total revenue | $ | — | $ | 2,532 | $ | 1,579 | $ | (70 | ) | $ | 4,041 | |||||||||
Costs and expenses: | ||||||||||||||||||||
Cost of sales and direct operating | — | 1,091 | 1,017 | (70 | ) | 2,038 | ||||||||||||||
Sales, marketing and administration | 68 | 434 | 290 | — | 792 | |||||||||||||||
Product development | — | 126 | 99 | — | 225 | |||||||||||||||
Depreciation and amortization | — | 160 | 55 | — | 215 | |||||||||||||||
Amortization of acquisition-related intangible assets | 2 | 302 | 100 | — | 404 | |||||||||||||||
Merger costs | 1 | — | — | — | 1 | |||||||||||||||
71 | 2,113 | 1,561 | (70 | ) | 3,675 | |||||||||||||||
Income (loss) from operations | (71 | ) | 419 | 18 | — | 366 | ||||||||||||||
Net interest income (expense) | (411 | ) | 36 | (90 | ) | — | (465 | ) | ||||||||||||
Other income (expense) | 402 | (66 | ) | 6 | (336 | ) | 6 | |||||||||||||
Income (loss) before income taxes | (80 | ) | 389 | (66 | ) | (336 | ) | (93 | ) | |||||||||||
Benefit from (provision for) income taxes | (1 | ) | 13 | — | — | 12 | ||||||||||||||
Net income (loss) | $ | (81 | ) | $ | 402 | $ | (66 | ) | $ | (336 | ) | $ | (81 | ) | ||||||
Supplemental Condensed Consolidating Schedule of Cash Flows | ||||||||||||||||||||
Nine Months Ended September 30, 2008 | ||||||||||||||||||||
Parent | Guarantor | Non-Guarantor | ||||||||||||||||||
(in millions) | Company | Subsidiaries | Subsidiaries | Eliminations | Consolidated | |||||||||||||||
Cash Flow From Operations | ||||||||||||||||||||
Net income (loss) | $ | (55 | ) | $ | 257 | $ | — | $ | (257 | ) | $ | (55 | ) | |||||||
Non cash adjustments | (203 | ) | 348 | 141 | 257 | 543 | ||||||||||||||
Changes in operating assets and liabilities | (728 | ) | 810 | (181 | ) | — | (99 | ) | ||||||||||||
Cash flow provided by (used in) operations | (986 | ) | 1,415 | (40 | ) | — | 389 | |||||||||||||
Investment Activities | ||||||||||||||||||||
Intercompany transactions | 261 | (1,115 | ) | 854 | — | — | ||||||||||||||
Cash paid for businesses acquired by the Company, net of cash acquired | — | (110 | ) | (64 | ) | — | (174 | ) | ||||||||||||
Cash paid for property and equipment and software | — | (193 | ) | (87 | ) | — | (280 | ) | ||||||||||||
Other investing activities | — | (5 | ) | 7 | — | 2 | ||||||||||||||
Cash provided by (used in) investment activities | 261 | (1,423 | ) | 710 | — | (452 | ) | |||||||||||||
Financing Activities | ||||||||||||||||||||
Net borrowings (repayments) of long-term debt | 1,284 | 7 | (40 | ) | — | 1,251 | ||||||||||||||
Other financing activities | (15 | ) | — | — | — | (15 | ) | |||||||||||||
Cash provided by (used in) financing activities | 1,269 | 7 | (40 | ) | — | 1,236 | ||||||||||||||
Effect of exchange rate changes on cash | — | — | (12 | ) | — | (12 | ) | |||||||||||||
Increase (decrease) in cash and cash equivalents | 544 | (1 | ) | 618 | — | 1,161 | ||||||||||||||
Beginning cash and cash equivalents | 39 | 2 | 386 | — | 427 | |||||||||||||||
Ending cash and cash equivalents | $ | 583 | $ | 1 | $ | 1,004 | $ | — | $ | 1,588 | ||||||||||
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Table of Contents
Supplemental Condensed Consolidating Schedule of Cash Flows | ||||||||||||||||||||
Nine Months Ended September 30, 2009 | ||||||||||||||||||||
Parent | Guarantor | Non-Guarantor | ||||||||||||||||||
(in millions) | Company | Subsidiaries | Subsidiaries | Eliminations | Consolidated | |||||||||||||||
Cash Flow From Operations | ||||||||||||||||||||
Net income (loss) | $ | (81 | ) | $ | 402 | $ | (66 | ) | $ | (336 | ) | $ | (81 | ) | ||||||
Non cash adjustments | (343 | ) | 451 | 138 | 336 | 582 | ||||||||||||||
Changes in operating assets and liabilities | (165 | ) | (294 | ) | 322 | — | (137 | ) | ||||||||||||
Cash flow provided by (used in) operations | (589 | ) | 559 | 394 | — | 364 | ||||||||||||||
Investment Activities | ||||||||||||||||||||
Intercompany transactions | 923 | (384 | ) | (539 | ) | — | — | |||||||||||||
Cash paid for businesses acquired by the Company, net of cash acquired | — | (12 | ) | — | — | (12 | ) | |||||||||||||
Cash paid for property and equipment and software | — | (182 | ) | (73 | ) | — | (255 | ) | ||||||||||||
Other investing activities | — | 1 | 2 | — | 3 | |||||||||||||||
Cash provided by (used in) investment activities | 923 | (577 | ) | (610 | ) | — | (264 | ) | ||||||||||||
Financing Activities | ||||||||||||||||||||
Net borrowings (repayments) of long-term debt | (833 | ) | (7 | ) | 237 | — | (603 | ) | ||||||||||||
Other financing activities | (5 | ) | — | — | — | (5 | ) | |||||||||||||
Cash provided by (used in) financing activities | (838 | ) | (7 | ) | 237 | — | (608 | ) | ||||||||||||
Effect of exchange rate changes on cash | — | — | 12 | — | 12 | |||||||||||||||
Increase (decrease) in cash and cash equivalents | (504 | ) | (25 | ) | 33 | — | (496 | ) | ||||||||||||
Beginning cash and cash equivalents | 511 | 16 | 448 | — | 975 | |||||||||||||||
Ending cash and cash equivalents | $ | 7 | $ | (9 | ) | $ | 481 | $ | — | $ | 479 | |||||||||
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Table of Contents
Three Months | Three Months | Percent | Nine Months | Nine Months | Percent | |||||||||||||||||||||||||||||||||||
Ended | Ended | Increase | Ended | Ended | Increase | |||||||||||||||||||||||||||||||||||
September 30, | September 30, | (Decrease) | September 30, | September 30, | (Decrease) | |||||||||||||||||||||||||||||||||||
2008 | 2009 | 2009 vs. 2008 | 2008 | 2009 | 2009 vs. 2008 | |||||||||||||||||||||||||||||||||||
percent | percent | percent | percent | |||||||||||||||||||||||||||||||||||||
of | of | of | of | |||||||||||||||||||||||||||||||||||||
(in millions) | revenue | revenue | revenue | revenue | ||||||||||||||||||||||||||||||||||||
Revenue | ||||||||||||||||||||||||||||||||||||||||
Financial systems (FS) | $ | 774 | 56 | % | $ | 724 | 54 | % | (6 | )% | $ | 2,171 | 54 | % | $ | 2,232 | 55 | % | 3 | % | ||||||||||||||||||||
Higher education (HE) | 128 | 9 | % | 125 | 9 | % | (2 | )% | 400 | 10 | % | 389 | 10 | % | (3 | )% | ||||||||||||||||||||||||
Public sector (PS) | 94 | 7 | % | 103 | 8 | % | 10 | % | 307 | 8 | % | 289 | 7 | % | (6 | )% | ||||||||||||||||||||||||
Software & processing solutions | 996 | 71 | % | 952 | 71 | % | (4 | )% | 2,878 | 71 | % | 2,910 | 72 | % | 1 | % | ||||||||||||||||||||||||
Availability services (AS) | 398 | 29 | % | 385 | 29 | % | (3 | )% | 1,175 | 29 | % | 1,131 | 28 | % | (4 | )% | ||||||||||||||||||||||||
$ | 1,394 | 100 | % | $ | 1,337 | 100 | % | (4 | )% | $ | 4,053 | 100 | % | $ | 4,041 | 100 | % | — | % | |||||||||||||||||||||
Costs and Expenses | ||||||||||||||||||||||||||||||||||||||||
Cost of sales and direct operating | $ | 728 | 52 | % | $ | 642 | 48 | % | (12 | )% | $ | 2,024 | 50 | % | $ | 2,038 | 50 | % | 1 | % | ||||||||||||||||||||
Sales, marketing and administration | 245 | 18 | % | 262 | 20 | % | 7 | % | 815 | 20 | % | 792 | 20 | % | (3 | )% | ||||||||||||||||||||||||
Product development | 84 | 6 | % | 77 | 6 | % | (8 | )% | 241 | 6 | % | 225 | 6 | % | (7 | )% | ||||||||||||||||||||||||
Depreciation and amortization | 70 | 5 | % | 74 | 6 | % | 6 | % | 207 | 5 | % | 215 | 5 | % | 4 | % | ||||||||||||||||||||||||
Amortization of acquisition-related intangible assets | 131 | 9 | % | 150 | 11 | % | 15 | % | 361 | 9 | % | 404 | 10 | % | 12 | % | ||||||||||||||||||||||||
Merger and other costs | — | — | % | — | — | % | — | % | — | — | % | 1 | — | % | — | % | ||||||||||||||||||||||||
$ | 1,258 | 90 | % | $ | 1,205 | 90 | % | (4 | )% | $ | 3,648 | 90 | % | $ | 3,675 | 91 | % | — | % | |||||||||||||||||||||
Income from Operations | ||||||||||||||||||||||||||||||||||||||||
Financial systems (1) | $ | 138 | 18 | % | $ | 157 | 22 | % | 14 | % | $ | 388 | 18 | % | $ | 414 | 19 | % | 7 | % | ||||||||||||||||||||
Higher education (1) | 31 | 24 | % | 33 | 26 | % | 6 | % | 91 | 23 | % | 95 | 24 | % | 4 | % | ||||||||||||||||||||||||
Public sector (1) | 16 | 17 | % | 19 | 18 | % | 19 | % | 55 | 18 | % | 55 | 19 | % | — | % | ||||||||||||||||||||||||
Software & processing solutions (1) | 185 | 19 | % | 209 | 22 | % | 13 | % | 534 | 19 | % | 564 | 19 | % | 6 | % | ||||||||||||||||||||||||
Availability services (1) | 114 | 29 | % | 103 | 27 | % | (10 | )% | 326 | 28 | % | 291 | 26 | % | (11 | )% | ||||||||||||||||||||||||
Corporate administration | (11 | ) | (1 | )% | (13 | ) | (1 | )% | 18 | % | (35 | ) | (1 | )% | (40 | ) | (1 | )% | 14 | % | ||||||||||||||||||||
Amortization of acquisition-related intangible assets | (131 | ) | (9 | )% | (150 | ) | (11 | )% | 15 | % | (361 | ) | (9 | )% | (404 | ) | (10 | )% | 12 | % | ||||||||||||||||||||
Stock Compensation expense | (7 | ) | (1 | )% | (8 | ) | (1 | )% | 14 | % | (21 | ) | (1 | )% | (22 | ) | (1 | )% | 5 | % | ||||||||||||||||||||
Other items(2) | (14 | ) | (1 | )% | (9 | ) | (1 | )% | (36 | )% | (38 | ) | (1 | )% | (23 | ) | (1 | )% | (39 | )% | ||||||||||||||||||||
$ | 136 | 10 | % | $ | 132 | 10 | % | (3 | )% | $ | 405 | 10 | % | $ | 366 | 9 | % | (10 | )% | |||||||||||||||||||||
(1) | Percent of revenue is calculated as a percent of revenue from FS, HE, PS, Software and Processing Solutions, and AS, respectively. | |
(2) | Other items include certain purchase accounting adjustments and management fees paid to the Sponsors, partially offset by capitalized software development costs. |
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Three Months | Three Months | Percent | Nine Months | Nine Months | Percent | |||||||||||||||||||||||||||||||||||
Ended | Ended | Increase | Ended | Ended | Increase | |||||||||||||||||||||||||||||||||||
September 30, | September 30, | (Decrease) | September 30, | September 30, | (Decrease) | |||||||||||||||||||||||||||||||||||
2008 | 2009 | 2009 vs. 2008 | 2008 | 2009 | 2009 vs. 2008 | |||||||||||||||||||||||||||||||||||
percent | percent | percent | percent | |||||||||||||||||||||||||||||||||||||
of | of | of | of | |||||||||||||||||||||||||||||||||||||
(in millions) | revenue | revenue | revenue | revenue | ||||||||||||||||||||||||||||||||||||
Financial Systems | ||||||||||||||||||||||||||||||||||||||||
Services | $ | 688 | 49 | % | $ | 642 | 48 | % | (7 | )% | $ | 1,921 | 47 | % | $ | 2,027 | 50 | % | 6 | % | ||||||||||||||||||||
License and resale fees | 46 | 3 | % | 43 | 3 | % | (7 | )% | 135 | 3 | % | 106 | 3 | % | (21 | )% | ||||||||||||||||||||||||
Total products and services | 734 | 53 | % | 685 | 51 | % | (7 | )% | 2,056 | 51 | % | 2,133 | 53 | % | 4 | % | ||||||||||||||||||||||||
Reimbursed expenses | 40 | 3 | % | 39 | 3 | % | (3 | )% | 115 | 3 | % | 99 | 2 | % | (14 | )% | ||||||||||||||||||||||||
$ | 774 | 56 | % | $ | 724 | 54 | % | (6 | )% | $ | 2,171 | 54 | % | $ | 2,232 | 55 | % | 3 | % | |||||||||||||||||||||
Higher Education | ||||||||||||||||||||||||||||||||||||||||
Services | $ | 109 | 8 | % | $ | 102 | 8 | % | (6 | )% | $ | 340 | 8 | % | $ | 331 | 8 | % | (3 | )% | ||||||||||||||||||||
License and resale fees | 16 | 1 | % | 20 | 1 | % | 25 | % | 52 | 1 | % | 52 | 1 | % | — | % | ||||||||||||||||||||||||
Total products and services | 125 | 9 | % | 122 | 9 | % | (2 | )% | 392 | 10 | % | 383 | 9 | % | (2 | )% | ||||||||||||||||||||||||
Reimbursed expenses | 3 | — | % | 3 | — | % | — | % | 8 | — | % | 6 | — | % | (25 | )% | ||||||||||||||||||||||||
$ | 128 | 9 | % | $ | 125 | 9 | % | (2 | )% | $ | 400 | 10 | % | $ | 389 | 10 | % | (3 | )% | |||||||||||||||||||||
Public Sector | ||||||||||||||||||||||||||||||||||||||||
Services | $ | 80 | 6 | % | $ | 73 | 5 | % | (9 | )% | $ | 262 | 6 | % | $ | 211 | 5 | % | (19 | )% | ||||||||||||||||||||
License and resale fees | 12 | 1 | % | 29 | 2 | % | 142 | % | 41 | 1 | % | 75 | 2 | % | 83 | % | ||||||||||||||||||||||||
Total products and services | 92 | 7 | % | 102 | 8 | % | 11 | % | 303 | 7 | % | 286 | 7 | % | (6 | )% | ||||||||||||||||||||||||
Reimbursed expenses | 2 | — | % | 1 | — | % | (50 | )% | 4 | — | % | 3 | — | % | (25 | )% | ||||||||||||||||||||||||
$ | 94 | 7 | % | $ | 103 | 8 | % | 10 | % | $ | 307 | 8 | % | $ | 289 | 7 | % | (6 | )% | |||||||||||||||||||||
Software & Processing Solutions | ||||||||||||||||||||||||||||||||||||||||
Services | $ | 877 | 63 | % | $ | 817 | 61 | % | (7 | )% | $ | 2,523 | 62 | % | $ | 2,569 | 64 | % | 2 | % | ||||||||||||||||||||
License and resale fees | 74 | 5 | % | 92 | 7 | % | 24 | % | 228 | 6 | % | 233 | 6 | % | 2 | % | ||||||||||||||||||||||||
Total products and services | 951 | 68 | % | 909 | 68 | % | (4 | )% | 2,751 | 68 | % | 2,802 | 69 | % | 2 | % | ||||||||||||||||||||||||
Reimbursed expenses | 45 | 3 | % | 43 | 3 | % | (4 | )% | 127 | 3 | % | 108 | 3 | % | (15 | )% | ||||||||||||||||||||||||
$ | 996 | 71 | % | $ | 952 | 71 | % | (4 | )% | $ | 2,878 | 71 | % | $ | 2,910 | 72 | % | 1 | % | |||||||||||||||||||||
Availability Services | ||||||||||||||||||||||||||||||||||||||||
Services | $ | 390 | 28 | % | $ | 381 | 28 | % | (2 | )% | $ | 1,156 | 29 | % | $ | 1,118 | 28 | % | (3 | )% | ||||||||||||||||||||
License and resale fees | 4 | — | % | 1 | — | % | (75 | )% | 7 | — | % | 3 | — | % | (57 | )% | ||||||||||||||||||||||||
Total products and services | 394 | 28 | % | 382 | 29 | % | (3 | )% | 1,163 | 29 | % | 1,121 | 28 | % | (4 | )% | ||||||||||||||||||||||||
Reimbursed expenses | 4 | — | % | 3 | — | % | (25 | )% | 12 | — | % | 10 | — | % | (17 | )% | ||||||||||||||||||||||||
$ | 398 | 29 | % | $ | 385 | 29 | % | (3 | )% | $ | 1,175 | 29 | % | $ | 1,131 | 28 | % | (4 | )% | |||||||||||||||||||||
Total Revenue | ||||||||||||||||||||||||||||||||||||||||
Services | $ | 1,267 | 91 | % | $ | 1,198 | 90 | % | (5 | )% | $ | 3,679 | 91 | % | $ | 3,687 | 91 | % | — | % | ||||||||||||||||||||
License and resale fees | 78 | 6 | % | 93 | 7 | % | 19 | % | 235 | 6 | % | 236 | 6 | % | — | % | ||||||||||||||||||||||||
Total products and services | 1,345 | 96 | % | 1,291 | 97 | % | (4 | )% | 3,914 | 97 | % | 3,923 | 97 | % | — | % | ||||||||||||||||||||||||
Reimbursed expenses | 49 | 4 | % | 46 | 3 | % | (6 | )% | 139 | 3 | % | 118 | 3 | % | (15 | )% | ||||||||||||||||||||||||
$ | 1,394 | 100 | % | $ | 1,337 | 100 | % | (4 | )% | $ | 4,053 | 100 | % | $ | 4,041 | 100 | % | — | % | |||||||||||||||||||||
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Last Twelve | ||||||||||||||||||||
Three Months Ended | Nine Months Ended | Months | ||||||||||||||||||
September 30, | September 30, | September 30, | ||||||||||||||||||
2008 | 2009 | 2008 | 2009 | 2009 | ||||||||||||||||
Net income (loss) | $ | (35 | ) | $ | (40 | ) | $ | (55 | ) | $ | (81 | ) | $ | (268 | ) | |||||
Interest expense, net | 138 | 160 | 420 | 465 | 626 | |||||||||||||||
Taxes | 9 | (3 | ) | (9 | ) | (12 | ) | 35 | ||||||||||||
Depreciation and amortization | 201 | 224 | 568 | 619 | 844 | |||||||||||||||
Goodwill impairment charge | — | — | — | — | 128 | |||||||||||||||
EBITDA | 313 | 341 | 924 | 991 | 1,365 | |||||||||||||||
Purchase accounting adjustments (a) | 25 | 5 | 45 | 13 | 23 | |||||||||||||||
Non-cash charges (b) | 8 | 8 | 22 | 25 | 39 | |||||||||||||||
Unusual or non-recurring charges (c) | 9 | 3 | 17 | 13 | 47 | |||||||||||||||
Acquired EBITDA, net of disposed EBITDA (d) | 5 | — | 13 | — | 1 | |||||||||||||||
Pro forma expense savings related to acquisitions (e) | — | — | — | 1 | 5 | |||||||||||||||
Other (f) | 7 | 16 | 31 | 6 | 48 | |||||||||||||||
Adjusted EBITDA — senior secured credit facilities | 367 | 373 | 1,052 | 1,049 | 1,528 | |||||||||||||||
Loss on sale of receivables (g) | 4 | — | 13 | — | 12 | |||||||||||||||
Adjusted EBITDA — senior notes due 2013 and 2015 and senior subordinated notes due 2015 | $ | 371 | $ | 373 | $ | 1,065 | $ | 1,049 | $ | 1,540 | ||||||||||
(a) | Purchase accounting adjustments include the adjustment of deferred revenue and lease reserves to fair value at the date of the Transaction and subsequent acquisitions made by the Company and certain acquisition-related compensation expense. | |
(b) | Non-cash charges include stock-based compensation and loss on the sale of assets. | |
(c) | Unusual or non-recurring charges include debt refinancing costs, severance and related payroll taxes, and certain other expenses associated with acquisitions made by the Company. | |
(d) | Acquired EBITDA net of disposed EBITDA reflects the EBITDA impact of businesses that were acquired or disposed of during the period as if the acquisition or disposition occurred at the beginning of the period. | |
(e) | Pro forma adjustments represent the full-year impact of savings resulting from post-acquisition integration activities. | |
(f) | Other includes gains or losses related to fluctuation of foreign currency exchange rates, management fees paid to the Sponsors and franchise and similar taxes reported in operating expenses, partially offset by interest charges relating to the off-balance sheet accounts receivable securitization facility. | |
(g) | The loss on sale of receivables under the off-balance sheet accounts receivable securitization facility was added back in calculating Adjusted EBITDA for purposes of the indentures governing the senior notes due 2013 and 2015 and the senior subordinated notes due 2015 but was not added back in calculating Adjusted EBITDA for purposes of the senior secured credit facilities. |
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Covenant | Actual | |||||||
Requirements | Ratios | |||||||
Senior secured credit facilities(1) | ||||||||
Minimum Adjusted EBITDA to consolidated interest expense ratio | 1.65x | 2.64x | ||||||
Maximum total debt to Adjusted EBITDA | 6.75x | 5.02x | ||||||
Senior notes due 2013 and senior subordinated notes due 2015(2) | ||||||||
Minimum Adjusted EBITDA to fixed charges ratio required to incur additional debt pursuant to ratio provisions | 2.00x | 2.62x |
(1) | The senior secured credit facilities require us to maintain an Adjusted EBITDA to consolidated interest expense ratio starting at a minimum of 1.65x for the four-quarter period ended December 31, 2008 and increasing over time to 1.70x by the end of 2009, to 1.80x by the end of 2010 and 2.20x by the end of 2013. Consolidated interest expense is defined in the senior secured credit facilities as consolidated cash interest expense less cash interest income further adjusted for certain non-cash or non-recurring interest expense and the elimination of interest expense and fees associated with SunGard’s receivables facility. Beginning with the four-quarter period ending December 31, 2008, we are required to maintain a consolidated total debt to Adjusted EBITDA ratio of 6.75x and decreasing over time to 6.25x by the end of 2009 and to 4.75x by the end of 2013. Consolidated total debt is defined in the senior secured credit facilities as total debt less certain indebtedness and further adjusted for cash and cash equivalents on SunGard’s balance sheet in excess of $50 million. Failure to satisfy these ratio requirements would constitute a default under the senior secured credit facilities. If the lenders failed to waive any such default, the repayment obligations under the senior secured credit facilities could be accelerated, which would also constitute a default under the indentures. | |
(2) | Our ability to incur additional debt and make certain restricted payments under the indentures, subject to specified exceptions, is tied to an Adjusted EBITDA to fixed charges ratio of at least 2.0x, except that we may incur certain debt and make certain restricted payments and certain permitted investments without regard to the ratio, such as the ability to incur up to an aggregate principal amount of $5.75 billion under credit facilities (inclusive of amounts outstanding under the senior credit facilities from time to time; as of September 30, 2009, we had $4.73 billion outstanding under the term loan facilities and available commitments of $808 million under the revolving credit facility), to acquire persons engaged in a similar business that become restricted subsidiaries and to make other investments equal to 6% of SunGard’s consolidated assets. Fixed charges is defined in the indentures governing the Senior Notes due 2013 and 2015 and the Senior Subordinated Notes due 2015 as consolidated interest expense less interest income, adjusted for acquisitions, and further adjusted for non-cash interest and the elimination of interest expense and fees associated with the receivables facility. |
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Number | Document | |
10.1 | Form of Amendment to the Performance Based Stock Option Award Agreements (incorporated by reference to the Exhibits filed with Schedule TO of SunGard Capital Corp. and SunGard Capital Corp. II, each filed August 13, 2009 (Commission File Nos. 5-84880 and 5-84881, respectively)). | |
10.2 | Form of Amendment to the Performance-Based Restricted Stock Unit Award Agreements (incorporated by reference to the Exhibits filed with Schedule TO of SunGard Capital Corp. and SunGard Capital Corp. II, each filed August 13, 2009 (Commission File Nos. 5-84880 and 5-84881, respectively)). | |
10.3 | Form of Amendment to the Performance-Based Class A Stock Option Award Agreements (incorporated by reference to the Exhibits filed with Schedule TO of SunGard Capital Corp. and SunGard Capital Corp. II, each filed August 13, 2009 (Commission File Nos. 5-84880 and 5-84881, respectively)). | |
10.4* | Forms of 2009 Senior Management Performance-Based Restricted Stock Unit Award Agreements. | |
10.5* | Forms of 2009 Senior Management Performance-Based Class A Stock Option Award Agreements. | |
10.6* | Form of 2009 Senior Management Time-Based Restricted Stock Unit Award Agreement. | |
10.7* | Form of 2009 Senior Management Time-Based Class A Stock Option Award Agreement. | |
12.1* | Computation of Ratio of Earnings to Fixed Charges. | |
31.1* | Certification of Cristóbal Conde, Chief Executive Officer of SunGard Capital Corp., SunGard Capital Corp. II and SunGard Data Systems Inc. required by Rule 13a-14(a) or Rule 15d-14(a) and Section 302 of the Sarbanes-Oxley Act of 2002. | |
31.2* | Certification of Michael J. Ruane, Chief Financial Officer of SunGard Capital Corp., SunGard Capital Corp. II and SunGard Data Systems Inc. required by Rule 13a-14(a) or Rule 15d-14(a) and Section 302 of the Sarbanes-Oxley Act of 2002. | |
32.1* | Certification of Cristóbal Conde, Chief Executive Officer of SunGard Capital Corp., SunGard Capital Corp. II and SunGard Data Systems Inc. required by Rule 13a-14(b) or Rule 15d-14(b) and Section 906 of the Sarbanes-Oxley Act of 2002. | |
32.2* | Certification of Michael J. Ruane, Chief Financial Officer of SunGard Capital Corp., SunGard Capital Corp. II and SunGard Data Systems Inc. required by Rule 13a-14(b) or Rule 15d-14(b) and Section 906 of the Sarbanes-Oxley Act of 2002. |
* Filed herewith.
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SUNGARD CAPITAL CORP. SUNGARD CAPITAL CORP. II | ||||
Dated: November 5, 2009 | By: | /s/ Michael J. Ruane | ||
Michael J. Ruane | ||||
Executive Vice President and Chief Financial Officer (Principal Financial Officer) | ||||
SUNGARD DATA SYSTEMS INC. | ||||
Dated: November 5, 2009 | By: | /s/ Michael J. Ruane | ||
Michael J. Ruane | ||||
Senior Vice President-Finance and Chief Financial Officer (Principal Financial Officer) |
34
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Number | Document | |
10.1 | Form of Amendment to the Performance Based Stock Option Award Agreements (incorporated by reference to the Exhibits filed with Schedule TO of SunGard Capital Corp. and SunGard Capital Corp. II, each filed August 13, 2009 (Commission File Nos. 5-84880 and 5-84881, respectively)). | |
10.2 | Form of Amendment to the Performance-Based Restricted Stock Unit Award Agreements (incorporated by reference to the Exhibits filed with Schedule TO of SunGard Capital Corp. and SunGard Capital Corp. II, each filed August 13, 2009 (Commission File Nos. 5-84880 and 5-84881, respectively)). | |
10.3 | Form of Amendment to the Performance-Based Class A Stock Option Award Agreements (incorporated by reference to the Exhibits filed with Schedule TO of SunGard Capital Corp. and SunGard Capital Corp. II, each filed August 13, 2009 (Commission File Nos. 5-84880 and 5-84881, respectively)). | |
10.4* | Forms of 2009 Senior Management Performance-Based Restricted Stock Unit Award Agreements. | |
10.5* | Forms of 2009 Senior Management Performance-Based Class A Stock Option Award Agreements. | |
10.6* | Form of 2009 Senior Management Time-Based Restricted Stock Unit Award Agreement. | |
10.7* | Form of 2009 Senior Management Time-Based Class A Stock Option Award Agreement. | |
12.1* | Computation of Ratio of Earnings to Fixed Charges. | |
31.1* | Certification of Cristóbal Conde, Chief Executive Officer of SunGard Capital Corp., SunGard Capital Corp. II and SunGard Data Systems Inc. required by Rule 13a-14(a) or Rule 15d-14(a) and Section 302 of the Sarbanes-Oxley Act of 2002. | |
31.2* | Certification of Michael J. Ruane, Chief Financial Officer of SunGard Capital Corp., SunGard Capital Corp. II and SunGard Data Systems Inc. required by Rule 13a-14(a) or Rule 15d-14(a) and Section 302 of the Sarbanes-Oxley Act of 2002. | |
32.1* | Certification of Cristóbal Conde, Chief Executive Officer of SunGard Capital Corp., SunGard Capital Corp. II and SunGard Data Systems Inc. required by Rule 13a-14(b) or Rule 15d-14(b) and Section 906 of the Sarbanes-Oxley Act of 2002. | |
32.2* | Certification of Michael J. Ruane, Chief Financial Officer of SunGard Capital Corp., SunGard Capital Corp. II and SunGard Data Systems Inc. required by Rule 13a-14(b) or Rule 15d-14(b) and Section 906 of the Sarbanes-Oxley Act of 2002. |
* Filed herewith.
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Tier I Executive Officer Form | ||
Name: | ||
Number of Stock Units: | ||
Date of Grant: |
RESTRICTED STOCK UNIT AWARD ARE SUBJECT TO RESTRICTIONS ON VOTING
AND TRANSFER AND REQUIREMENTS OF SALE AND OTHER PROVISIONS AS SET
FORTH IN THE STOCKHOLDERS AGREEMENT AMONG SUNGARD CAPITAL CORP.,
SUNGARD CAPITAL CORP. II, SUNGARD HOLDING CORP., SOLAR CAPITAL CORP.
AND CERTAIN STOCKHOLDERS OF SUNGARD CAPITAL CORP. AND SUNGARD
CAPITAL CORP. II, DATED AS OF AUGUST 10, 2005 (AS IN EFFECT FROM TIME TO
TIME, THE “STOCKHOLDERS AGREEMENT”).
ENCOURAGE YOU TO SEEK THE ADVICE OF YOUR OWN LEGAL AND FINANCIAL
ADVISORS WITH RESPECT TO YOUR AWARD AND ITS TAX CONSEQUENCES.
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(a) | “Adjustment Event” means (i) a cash distribution with respect to Shares paid to all or substantially all holders of Shares, other than cash dividends in respect of Shares declared by the Board as part of a regular dividend payment practice or stated cash dividend policy of the Company following an IPO, or (ii) a substantially pro rata redemption or substantially pro rata repurchase (in each case, as applicable, by the Company, Lowerco or any of their subsidiaries) of all or part of any class of Shares; |
(b) | “Beneficiary” means, in the event of Grantee’s death, Grantee’s legal representative, executor, administrator or designated beneficiary, as applicable; |
(c) | “Call Option” means an option in favor of Company or Lowerco to purchase for cash at a specified price the Shares received by Grantee (or Grantee’s Beneficiary) upon any payment of Stock Units pursuant to this Agreement; |
(d) | “CEO” means the Chief Executive Officer of the Company. |
(e) | “Closing” means August 11, 2005; |
(f) | “Fair Market Value” means, as of any date, as to any Share, the Board’s good faith determination of the fair market value of such Share as of the applicable reference date, taking into account the most recent annual valuation of the Company. The Company agrees to engage at least annually an independent third party appraiser to perform such valuation, and to update each such valuation on a quarterly basis. Upon the exercise of a Call Option pursuant to Section 6(a) or a Put Option, the Board will provide prompt written notice of its determination of the Fair Market Value of the applicable Shares (the “Board Notice”) to Grantee. Grantee shall have the right to contest the Fair Market Value thereof by notice to the Company within fifteen (15) business days of receipt of the Board Notice. If Grantee does so notify the Company of Grantee’s disagreement with the Fair Market Value set forth in the |
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(g) | “Family Member” means, with respect to Grantee, any child, stepchild, grandchild, parent, stepparent, grandparent, spouse, former spouse, sibling, niece, nephew, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law, or sister-in-law, including adoptive relationships, any person sharing the Grantee’s household (other than a tenant or employee), a trust in which one or more of these persons have more than fifty percent of the beneficial interest, a foundation in which one or more of these persons (or Grantee) control the management of assets, or any other entity in which one or more of these persons (or Grantee) own more than fifty percent of the voting interests; |
(h) | “IPO” means the initial closing of a bona fide firm commitment underwritten public offering of equity shares of the Company, registered under the Securities Act of 1933, as amended, that results in such shares being traded on a liquid trading market; |
(i) | “Management Agreement” means the management agreement entered into as of the Closing between the Company and certain affiliates of the Investors, as it may be amended from time to time; |
(j) | “Put Option” means the obligation of the Company or Lowerco, upon thirty (30) days notice from Grantee, to use commercially reasonable efforts to repurchase for cash the Shares acquired by Grantee (or Grantee’s Beneficiary) upon payment of Stock Units pursuant to this Agreement at the then Fair Market Value of such Shares; provided, however, that any Shares subject to the Put Option shall have been held by Grantee (or Grantee’s Beneficiary) for at least six months. If Company or Lowerco (as the case may be) is not able to repurchase the Shares subject to the Put Option in cash as a result of any contractual or legal restriction, Company or Lowerco (as the case may be) shall provide Grantee (or Grantee’s Beneficiary) with a promissory note that bears interest at the prime rate as published in The Wall Street Journal on the repurchase date plus 1% and will become payable over the three year period from the date of the note; |
(k) | “Registration Rights Agreement” means the Participation, Registration Rights and Coordination Agreement, dated as of August 10, 2005, by and among the Company, Lowerco, SunGard Holding Corp., Solar Capital Corp. and certain stockholders of the Company and Lowerco; |
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(l) | “Restrictive Covenant” means any of the restrictive covenants set forth in Section 5 of Grantee’s Employment Agreement; |
(m) | “Retirement” means retirement within the meaning of Section 2.2(b) of Grantee’s Employment Agreement; |
(n) | “Unit” means an undivided interest in 1.3 Class A shares, 0.1444 Class L shares and 0.05 Lowerco Preferred shares, determined at the Date of Grant, as it may be adjusted as provided herein; |
(o) | “Vest on a Pro Rata Basis” means that the vesting of the Grantee’s Stock Units shall continue through the end of the Year of Termination (but not thereafter), provided that only a portion of the Stock Units subject to this Restricted Stock Unit Agreement that otherwise would have vested at the end of such year shall vest, such portion being determined by multiplying (i) the number of Stock Units that otherwise would have vested at the end of such year based upon attainment of pre-determined performance goals, by (ii) (A) the number of days in which the Grantee was employed by Employer during the Year of Termination divided by (B) 365 (rounded to the nearest whole number of Stock Units); |
(p) | “Vest on a Return-on-Equity Basis” means that Grantee’s Stock Units shall be subject to accelerated vesting at the time of a Change of Control as follows: |
(i) | If the Change of Control occurs on or before December 31, 2013 and results in the Investors receiving an amount constituting at least 300% of the Investors’ initial equity investment in the Company and any subsequent equity investments, Stock Units shall vest as follows: (A) if the Investor internal rate of return (“IRR”) as of the Change of Control date is 16% or higher, all remaining Stock Units shall become fully vested and exercisable on the one-year anniversary of the Change of Control; (B) if the Investor IRR as of the Change of Control date is between 14% and 16%, the number of Stock Units determined by interpolation (e.g., 50% acceleration at 15% |
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(ii) | If a Change of Control occurs and the requirements of subsection (i) are not met, there will be no acceleration of vesting. |
(iii) | In determining the amount that has been received by the Investors, the gross value of all cash (including prior distributions the Investors or their Affiliates have received with respect to the Shares) and/or securities (with the fair value of such securities to be determined by the Board, which shall be entitled to take into account any restrictions on transferability, liquidity or saleability of such securities) received by the Investors shall be taken into account, minus the amount of commissions, fees and expenses payable by the Investors to the investment bankers and professional advisors in connection with the Change of Control. Management and transaction fees specified in the Management Agreement shall be excluded, provided that any increases in such fees from the fees in effect as of the date of the Grantee’s Employment Agreement must be customary (on a percentage of equity basis or in the case of transaction fees as a percentage of transaction size) compared to fees charged by private equity sponsors to their portfolio companies. In evaluating the amount of the transaction consideration, the Board may take into consideration amounts paid into escrow and contingent payments in connection with any transaction. |
(a) | if the Grantee’s Employment terminates as a result of (i) termination of the Grantee by Employer without Cause, (ii) resignation by the Grantee for Good Reason, or (iii) the Grantee’s Disability or death, then (A) the Stock Units for the year of termination shall Vest on a Pro Rata Basis, (B) any unvested portion of the Stock Units that was earned for the 2009 or 2010 calendar year shall become fully vested as of the Date of Termination, and (C) if a Change of Control has occurred, any amount that is scheduled to vest on the one-year anniversary of the Change of Control pursuant to Section 3(p)(i) above shall become fully vested as of the Date of Termination; |
(b) | with respect to the portion of the Stock Units that is earned for the 2009 or 2010 calendar year, if the Grantee’s Employment terminates as a result of the Grantee’s retirement or as a result of the Grantee’s resignation other than for Good Reason, then the Stock Units shall be |
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(c) | with respect to the portion of the Stock Units that is earned for calendar years after 2010, if the Grantee’s Employment terminates as a result of the Grantee’s Retirement or as a result of the Grantee’s resignation other than for Good Reason, then the Stock Units shall be deemed to have stopped vesting as of the beginning of the year containing the Date of Termination of such Grantee; |
(d) | if the Grantee’s Employment terminates as a result of termination by Employer for Cause, then the Stock Units will be immediately forfeited by the Grantee and terminate as of the Date of Termination; |
(e) | upon a Change of Control through December 31, 2013, the Stock Units shall Vest on a Return-on-Equity Basis; provided that, upon such a Change of Control following which Stock continues to be held by any of the Principal Investors, if the Change of Control would not result in full acceleration of vesting pursuant to this Section 4(e) without giving effect to this proviso, the Administrator shall, as it considers appropriate in its sole discretion, either (i) cause the Stock Units to Vest on a Return-on-Equity Basis treating the Fair Market Value of any retained Stock as an amount received by the Investors in connection with the Change of Control, or (ii) permit the Stock Units to Vest on a Return-on-Equity Basis in connection with any disposition by the Principal Investors of a material portion of their remaining Stock through December 31, 2013; and |
(f) | notwithstanding the foregoing, in the event of a Change of Control after the 2009 or 2010 calendar year, any portion of the Stock Units that were earned with respect to the 2009 or 2010 calendar year based on Schedule A and that have not yet vested shall vest in full upon the Change of Control. |
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(a) | Call on Resignation Without Good Reason. If the Grantee’s Employment terminates as a result of resignation by the Grantee other than for either Good Reason or Retirement, for the period ending one hundred eighty-one (181) days following the later of Grantee’s Date of Termination or the date on which Shares are paid to Grantee pursuant to this Agreement, each of the Company and Lowerco shall have a Call Option at the then Fair Market Value of such Shares, provided, however, that the Companies’ Call Options pursuant to this Section 6(a) shall cease to apply on the earlier of an IPO or the fifth anniversary of the Closing. For purposes of the preceding sentence, the term resignation does not include the departure of Grantee by reason of the Sale of a Business where Grantee is employed by the Sold Business and is not offered employment with a Retained Business on substantially similar terms and conditions. |
(b) | Call on Termination For Cause. If the Grantee’s Employment is terminated by the Employer for Cause, for the period ending one hundred eighty-one (181) days following the later of Grantee’s Date of Termination or the date on which Shares are paid to Grantee pursuant to this Agreement, each of the Company and Lowerco shall have a Call Option at the then Fair Market Value of such Shares, provided, however, that the Companies’ Call Options pursuant to this Section 6(b) shall cease to apply on an IPO. |
(c) | Put on Disability or Death. If the Grantee’s Employment terminates as a result of the Grantee’s Disability or death (and if and to the extent permitted by the Code (including Section 409A thereof)) the Grantee (or, the Grantee’s Beneficiary) shall have a Put Option at any time after Grantee’s Date of Termination, but prior to an IPO. |
(d) | The Company or Lowerco may assign its rights under this Section 6 to any of their subsidiaries or to the Investors. |
(e) | The provisions of this Section 6 supersede Section 6 of the Stockholders Agreement with respect to the Stock Units granted hereunder and the related Shares. |
(a) | Upon the occurrence of an Adjustment Event, there shall be credited to the Account an amount equal to the product of (i) the per-Share amount paid with respect to Shares underlying the Stock Unit in connection with the Adjustment Event, multiplied by (ii) the number of Shares of the class of stock affected by the Adjustment Event that are included in each Unit immediately prior to the Adjustment Event, multiplied by (iii) the number of Units underlying the Grantee’s Stock Units pursuant to this Award. |
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(b) | If any other cash dividend or distribution is paid with respect to Shares underlying the Stock Units, there shall be credited to the Account an amount equal to the product of (i) the per-Share amount paid with respect to Shares underlying the Stock Units, multiplied by (ii) the number of Shares of the applicable class of stock that are included in each Unit, multiplied by (iii) the number of Units underlying the Grantee’s Stock Units pursuant to this Award. |
(c) | The amount credited to the Account pursuant to this Section 8 with respect to vested Stock Units is referred to as the “Bonus Value.” The amount credited to the Account pursuant to this Section 8 with respect to unvested Stock Units is referred to as the “Deferred Bonus Value.” |
(d) | On the fifth business day after the end of each calendar quarter, the Company shall pay to the Grantee in cash an amount equal to the Bonus Value accrued by the Grantee for such quarter, subject to applicable tax withholding. The Company shall pay to the Grantee the Deferred Bonus Value accrued in connection with any unvested Stock Units on the fifth business day after the date on which such unvested Stock Units vest, subject to applicable tax withholding. |
(e) | In the case of a redemption or repurchase of Shares, the number of Shares of the class of stock redeemed or repurchased that are subject to outstanding Stock Units will be automatically reduced by an amount proportionate to the percentage reduction in outstanding Shares of the affected class resulting from the redemption or repurchase. The Grantee shall be entitled to receive any information reasonably requested regarding the composition of a Unit, as adjusted in accordance with this Section 8. |
(a) | During the six months after any delivery of Shares pursuant to the Stock Units, such delivery may be rescinded at the Company’s option if the Grantee fails to comply in any material respect with the terms of the Restrictive Covenants or of any other agreement with the Company or any of its affiliates or if the Grantee breaches any duty to the Company or any of its Affiliates. The Company shall notify the Grantee in writing of any such rescission within one year after such delivery. Within ten days after receiving such a notice from the Company, the Grantee shall remit or deliver to the Company (i) the amount of any gain realized upon the sale of any Shares, (ii) any consideration received upon the exchange of any Shares (or to the extent that such consideration was not received in the form of cash, the cash |
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(b) | The Company shall have the right to offset, against any Shares and any cash amounts due to the Grantee under or by reason of the Grantee’s holding the Stock Units, any amounts to which the Company is entitled as a result of the Grantee’s violation of the terms of the Restrictive Covenants or of any other agreement with the Company or any of its affiliates or the Grantee’s breach of any duty to the Company or any of its Affiliates; provided, however, that no offset shall accelerate or defer the distribution date of amounts payable under this Agreement in violation of Section 409A of the Code, and any offset in violation of Section 409A shall be null and void. Accordingly, the Grantee acknowledges that (i) the Company may withhold delivery of Shares, (ii) the Company may place the proceeds of any sale or other disposition of Shares in an escrow account of the Company’s choosing pending resolution of any dispute with the Company, and (iii) the Company has no liability for any attendant market risk caused by any such withholding, or escrow, subject, however, to compliance with the requirements of Section 409A of the Code. |
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SunGard Capital Corp. and | SUNGARD CAPITAL CORP. | |
SunGard Capital Corp. II | SUNGARD CAPITAL CORP. II | |
By: |
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Vesting Schedule
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Base Case | 2009 | 2010 | 2011 | 2012 | 2013 | |||||
Actual Internal EBITA | The Company’s final | The Company’s final | ||||||||
(in millions) | 2009 consolidated | 2010 consolidated | ||||||||
budgeted EBITA, as | budgeted EBITA, as | |||||||||
approved by the | approved by the | |||||||||
Board or | Board or | |||||||||
Compensation | Compensation | |||||||||
Committee and as | Committee and as | |||||||||
appears in the | appears in the | |||||||||
Company’s operating | Company’s operating | |||||||||
budget for 2009 | budget for 2010 |
Original Base Case | 2009 | 2010 | ||||||
Actual Internal EBITA (in millions) |
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Tier II Executive Officer Form | ||
Name: | ||
Number of Stock Units: | ||
Date of Grant: |
RESTRICTED STOCK UNIT AWARD ARE SUBJECT TO RESTRICTIONS ON VOTING
AND TRANSFER AND REQUIREMENTS OF SALE AND OTHER PROVISIONS AS SET
FORTH IN THE STOCKHOLDERS AGREEMENT AMONG SUNGARD CAPITAL CORP.,
SUNGARD CAPITAL CORP. II, SUNGARD HOLDING CORP., SOLAR CAPITAL CORP.
AND CERTAIN STOCKHOLDERS OF SUNGARD CAPITAL CORP. AND SUNGARD
CAPITAL CORP. II, DATED AS OF AUGUST 10, 2005 (AS IN EFFECT FROM TIME TO
TIME, THE “STOCKHOLDERS AGREEMENT”).
ENCOURAGE YOU TO SEEK THE ADVICE OF YOUR OWN LEGAL AND FINANCIAL
ADVISORS WITH RESPECT TO YOUR AWARD AND ITS TAX CONSEQUENCES.
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(a) | “Adjustment Event” means (i) a cash distribution with respect to Shares paid to all or substantially all holders of Shares, other than cash dividends in respect of Shares declared by the Board as part of a regular dividend payment practice or stated cash dividend policy of the Company following an IPO, or (ii) a substantially pro rata redemption or substantially pro rata repurchase (in each case, as applicable, by the Company, Lowerco or any of their subsidiaries) of all or part of any class of Shares; |
(b) | “CEO” means the Chief Executive Officer of the Company. |
(c) | “Date of Termination” means the date that the termination of the Grantee’s Employment with Employer is effective on account of the Grantee’s death, the Grantee’s Disability, termination by Employer for Cause or without Cause, or by the Grantee, as the case may be; |
(d) | “Employer” means the Company or, as the case may be, its Affiliate with whom the Grantee has entered into an Employment relationship; |
(e) | “Investors” means investment funds advised by Silver Lake Partners, Bain Capital, The Blackstone Group, Goldman, Sachs & Co., Kohlberg Kravis Roberts, Providence Equity Partners and Texas Pacific Group that own capital stock of the Company; |
(f) | “Restrictive Covenant” means any of the restrictive covenants set forth in Exhibit A, which is incorporated herein by reference; |
(g) | “Retirement” means termination of employment by Grantee after age 62; |
(h) | “Unit” means an undivided interest in 1.3 Class A shares, 0.1444 Class L shares and 0.05 Lowerco Preferred shares, determined at the Date of Grant, as it may be adjusted as provided herein; |
(i) | “Vest on a Pro Rata Basis” means that the vesting of the Grantee’s Stock Units shall continue through the end of the Year of Termination (but not thereafter), provided that only a portion of the Stock Units subject to this Restricted Stock Unit Agreement that otherwise would have vested at the end of such year shall vest, such portion being determined by multiplying (i) the number of Stock Units that otherwise would have vested at the end of such year based upon attainment of pre-determined performance goals, by (ii) (A) the number of days in which the Grantee was employed by Employer during the Year of Termination divided by (B) 365 (rounded to the nearest whole number of Stock Units); |
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(j) | Vest on a Return-on-Equity Basis” means that Grantee’s Stock Units shall be subject to accelerated vesting at the time of a Change of Control as follows: |
(i) | If the Change of Control occurs on or before December 31, 2013 and results in the Investors receiving an amount constituting at least 300% of the Investors’ initial equity investment in the Company and any subsequent equity investments, Stock Units shall vest as follows: (A) if the Investor internal rate of return (“IRR”) as of the Change of Control date is 16% or higher, all remaining Stock Units shall become fully vested and exercisable on the one-year anniversary of the Change of Control; (B) if the Investor IRR as of the Change of Control date is between 14% and 16%, the number of Stock Units determined by interpolation (e.g., 50% acceleration at 15% IRR) shall become fully vested and exercisable on the one-year anniversary of the Change of Control; and (C) if the Investor IRR as of the Change of Control date is less than 14%, there will be no acceleration of vesting. Vesting on the one-year anniversary of the Change of Control is contingent on continued employment through the one-year anniversary date, except as otherwise provided in Section 4(a). |
(ii) | If a Change of Control occurs and the requirements of subsection (i) are not met, there will be no acceleration of vesting. |
(iii) | In determining the amount that has been received by the Investors, the gross value of all cash (including prior distributions the Investors or their Affiliates have received with respect to the Shares) and/or securities (with the fair value of such securities to be determined by the Board, which shall be entitled to take into account any restrictions on transferability, liquidity or saleability of such securities) received by the Investors shall be taken into account, minus the amount of commissions, fees and expenses payable by the Investors to the investment bankers and professional advisors in connection with the Change of Control. Management and transaction fees specified in the Management Agreement entered into as of August 11, 2005 |
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(k) | “Year of Termination” means the fiscal year for the applicable Performance Period during which the Grantee’s Date of Termination occurs. |
(a) | if the Grantee’s Employment terminates as a result of (i) termination of the Grantee by Employer without Cause, (ii) the Grantee’s Disability or death, or (iii) with respect to Stock Units earned for a calendar year after 2010, the Grantee’s Retirement,then (A) the Stock Units for the year of termination shall Vest on a Pro Rata Basis, (B) any unvested portion of the Stock Units that was earned for the 2009 or 2010 calendar year shall become fully vested as of the Date of Termination, and (C) if a Change of Control has occurred, any amount that is scheduled to vest on the one-year anniversary of the Change of Control pursuant to Section 3(j)(i) above shall become fully vested as of the Date of Termination; |
(b) | with respect to the portion of the Stock Units that is earned for the 2009 or 2010 calendar year, if the Grantee’s Employment terminates as a result of the Grantee’s resignation or Retirement, then the Stock Units shall be deemed to have stopped vesting as of the Date of Termination of such Grantee, and no portion of the Stock Units shall be earned for the calendar year in which the Date of Termination occurs; |
(c) | with respect to the portion of the Stock Units that is earned for calendar years after 2010, if the Grantee’s Employment terminates as a result of the Grantee’s resignation, then the Stock Units shall be deemed to have stopped vesting as of the beginning of the year containing the Date of Termination of such Grantee; |
(d) | if the Grantee’s Employment terminates as a result of termination by Employer for Cause, then the Stock Units will be immediately forfeited by the Grantee and terminate as of the Date of Termination; |
(e) | upon a Change of Control through December 31, 2013, the Stock Units shall Vest on a Return-on-Equity Basis; provided that, upon such a Change of Control following which Stock continues to be held by any of the Investors, if the Change of Control would not result in full acceleration of vesting pursuant to this Section 4(d) without giving effect to this proviso, the Administrator shall, as it considers |
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(f) | notwithstanding the foregoing, in the event of a Change of Control after the 2009 or 2010 calendar year, any portion of the Stock Units that was earned with respect to the 2009 or 2010 calendar year based on Schedule A and that has not yet vested shall vest in full upon the Change of Control. |
(a) | Upon the occurrence of an Adjustment Event, there shall be credited to the Account an amount equal to the product of (i) the per-Share amount paid with respect to Shares underlying the Stock Unit in connection with the Adjustment Event, multiplied by (ii) the number of Shares of the class of stock affected by the Adjustment Event that are included in each Unit immediately prior to the Adjustment Event, multiplied by (iii) the number of Units underlying the Grantee’s Stock Units pursuant to this Award. |
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(b) | If any other cash dividend or distribution is paid with respect to Shares underlying the Stock Units, there shall be credited to the Account an amount equal to the product of (i) the per-Share amount paid with respect to Shares underlying the Stock Units, multiplied by (ii) the number of Shares of the applicable class of stock that are included in each Unit, multiplied by (iii) the number of Units underlying the Grantee’s Stock Units pursuant to this Award. |
(c) | The amount credited to the Account pursuant to this Section 8 with respect to vested Stock Units is referred to as the “Bonus Value.” The amount credited to the Account pursuant to this Section 8 with respect to unvested Stock Units is referred to as the “Deferred Bonus Value.” |
(d) | On the fifth business day after the end of each calendar quarter, the Company shall pay to the Grantee in cash an amount equal to the Bonus Value accrued by the Grantee for such quarter, subject to applicable tax withholding. The Company shall pay to the Grantee the Deferred Bonus Value accrued in connection with any unvested Stock Units on the fifth business day after the date on which such unvested Stock Units vest, subject to applicable tax withholding. |
(e) | In the case of a redemption or repurchase of Shares, the number of Shares of the class of stock redeemed or repurchased that are subject to outstanding Stock Units will be automatically reduced by an amount proportionate to the percentage reduction in outstanding Shares of the affected class resulting from the redemption or repurchase. The Grantee shall be entitled to receive any information reasonably requested regarding the composition of a Unit, as adjusted in accordance with this Section 8. |
(a) | During the six months after any delivery of Shares pursuant to the Stock Units, such delivery may be rescinded at the Company’s option if the Grantee fails to comply in any material respect with the terms of the Restrictive Covenants or of any other agreement with the Company or any of its affiliates or if the Grantee breaches any duty to the Company or any of its Affiliates. The Company shall notify the Grantee in writing of any such rescission within one year after such delivery. Within ten days after receiving such a notice from the Company, the Grantee shall remit or deliver to the Company (i) the amount of any gain realized upon the sale of any Shares, (ii) any consideration received upon the exchange of any Shares (or to the extent that such consideration was not received in the form of cash, the cash |
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(b) | The Company shall have the right to offset, against any Shares and any cash amounts due to the Grantee under or by reason of the Grantee’s holding the Stock Units, any amounts to which the Company is entitled as a result of the Grantee’s violation of the terms of the Restrictive Covenants or of any other agreement with the Company or any of its affiliates or the Grantee’s breach of any duty to the Company or any of its Affiliates; provided, however, that no offset shall accelerate or defer the distribution date of amounts payable under this Agreement in violation of Section 409A of the Code, and any offset in violation of Section 409A shall be null and void. Accordingly, the Grantee acknowledges that (i) the Company may withhold delivery of Shares, (ii) the Company may place the proceeds of any sale or other disposition of Shares in an escrow account of the Company’s choosing pending resolution of any dispute with the Company, and (iii) the Company has no liability for any attendant market risk caused by any such withholding, or escrow, subject, however, to compliance with the requirements of Section 409A of the Code. |
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SunGard Capital Corp. and | SUNGARD CAPITAL CORP. | |
SunGard Capital Corp. II | SUNGARD CAPITAL CORP. II | |
By: |
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Vesting Schedule
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Base Case | 2009 | 2010 | 2011 | 2012 | 2013 | |||||
Actual Internal EBITA | The Company’s final | The Company’s final | ||||||||
(in millions) | 2009 consolidated | 2010 consolidated | ||||||||
budgeted EBITA, as | budgeted EBITA, as | |||||||||
approved by the | approved by the | |||||||||
Board or | Board or | |||||||||
Compensation | Compensation | |||||||||
Committee and as | Committee and as | |||||||||
appears in the | appears in the | |||||||||
Company’s operating | Company’s operating | |||||||||
budget for 2009 | budget for 2010 |
Original Base Case | 2009 | 2010 | ||||||
Actual Internal EBITA (in millions) |
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Restrictive Covenants
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Tier I Executive Officer Form | ||
Name: | ||
Number of Shares: | ||
Price per Share: | ||
Date of Grant: |
Class A Option Agreement
ARE SUBJECT TO RESTRICTIONS ON VOTING AND TRANSFER AND
REQUIREMENTS OF SALE AND OTHER PROVISIONS AS SET FORTH IN THE
STOCKHOLDERS AGREEMENT AMONG SUNGARD CAPITAL CORP., SUNGARD
CAPITAL CORP. II, SUNGARD HOLDING CORP., SOLAR CAPITAL CORP. AND
CERTAIN STOCKHOLDERS OF SUNGARD CAPITAL CORP. AND SUNGARD
CAPITAL CORP. II, DATED AS OF AUGUST 10, 2005 (AS IN EFFECT FROM TIME
TO TIME, THE “STOCKHOLDERS AGREEMENT”).
ADVICE OF YOUR OWN LEGAL AND FINANCIAL ADVISORS WITH RESPECT TO
YOUR AWARD AND ITS TAX CONSEQUENCES.
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(a) | “Adjustment Event” means (i) a cash distribution with respect to Shares paid to all or substantially all holders of Shares, other than cash dividends in respect of Shares declared by the Board as part of a regular dividend payment practice or stated cash dividend policy of the Company following an IPO, or (ii) a substantially pro rata redemption or substantially pro rata repurchase (in each case by the Company or any of its subsidiaries) of all or part of any class of Shares; |
(b) | “Beneficiary” means, in the event of Optionee’s death, Optionee’s legal representative, executor, administrator or designated beneficiary, as applicable; |
(c) | “Call Option” means an option in favor of Company to purchase for cash at a specified price the Shares received by Optionee (or Optionee’s Beneficiary) upon any exercise of the Option with respect to one or more Shares; |
(d) | “Closing” means August 11, 2005; |
(e) | “Extended Exercise Period” means the period ending on the later of (i) the 90th day following (as applicable) the Optionee’s Date of Termination or the Sale of a Business where the Optionee is employed by the Sold Business and is not offered employment with a Retained Business on substantially similar terms and conditions (or the one year anniversary of the Optionee’s Date of Termination in the case of a termination resulting from Disability or death) and (ii) the earlier of (A) a Change of Control or (B) the 30th day after an IPO (or, if Optionee is subject to an IPO lock-up, the 30th day after the expiration of the lock-up); provided that in all cases the Extended Exercise Period shall end no later than the Final Exercise Date; |
(f) | “Fair Market Value” means, as of any date, as to any Share, the Board’s good faith determination of the fair market value of such Share as of the applicable reference date, taking into account the most recent annual valuation of the Company. The Company agrees to engage, no later than December 31, 2006, and at least annually thereafter, an independent third party appraiser to perform such valuation, and to update each such valuation on a quarterly basis. Upon the exercise of a Call Option pursuant to Section 5(a) or a Put Option, the Board will provide prompt written notice of its determination of the Fair Market Value of the applicable Shares (the “Board Notice”) to Optionee. Optionee shall have the right to contest the Fair Market Value thereof by notice to the Company within fifteen (15) business days of receipt of the Board Notice. If Optionee does so notify the |
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(g) | “Family Member” means, with respect to Optionee, any child, stepchild, grandchild, parent, stepparent, grandparent, spouse, former spouse, sibling, niece, nephew, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law, or sister-in-law, including adoptive relationships, any person sharing the Optionee’s household (other than a tenant or employee), a trust in which one or more of these persons have more than fifty percent of the beneficial interest, a foundation in which one or more of these persons (or Optionee) control the management of assets, or any other entity in which one or more of these persons (or Optionee) own more than fifty percent of the voting interests; |
(h) | “IPO” means the initial closing of a bona fide firm commitment underwritten public offering of equity shares of the Company, registered under the Securities Act of 1933, as amended, that results in such shares being traded on a liquid trading market; |
(i) | “Management Agreement” means the management agreement entered into as of the Closing between the Company and certain affiliates of the Investors, as it may be amended from time to time; |
(j) | “Put Option” means the obligation of the Company, upon thirty (30) days notice from Optionee, to use commercially reasonable efforts to repurchase for cash the Shares acquired by Optionee (or Optionee’s Beneficiary) upon exercise of the Option with respect to one or more Shares at the then Fair Market Value of such Shares; provided, however, that any Shares subject to the Put Option shall have been held by Optionee (or Optionee’s Beneficiary) for at least six months. If Company (as the case may be) is not able to repurchase the Shares subject to the Put Option in cash as a result of any contractual or legal restriction, Company shall provide Optionee (or Optionee’s Beneficiary) with a promissory note that bears interest at the prime rate as published in The Wall Street Journal on the repurchase date plus 1% and will become payable over the three year period from the date of the note; |
(k) | “Registration Rights Agreement” means the Participation, Registration Rights and Coordination Agreement, dated as of August 10, 2005, by and among the |
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(l) | “Restrictive Covenant” means any of the restrictive covenants set forth in Section 5 of Optionee’s Employment Agreement; |
(m) | “Retirement” means retirement within the meaning of Section 2.2(b) of Optionee’s Employment Agreement; |
(n) | “Vest on a Pro Rata Basis” means that the vesting of Optionee’s Option shall continue through the end of the Year of Termination (but not thereafter), provided that only a portion of the Option that otherwise would have vested at the end of such year shall vest, such portion being determined by multiplying (i) the number of Shares subject to the Option that otherwise would have vested at the end of such year based upon attainment of pre-determined performance goals, by (ii)(A) the number of days in which Optionee was employed by Employer during the Year of Termination divided by (B) 365 (rounded to the nearest whole number of Shares); |
(o) | “Vest on a Return-on-Equity Basis” means that Optionee’s Option shall be subject to accelerated vesting at the time of a Change of Control as follows: |
(i) | If the Change of Control occurs on or before December 31, 2013 and results in the Investors receiving an amount constituting at least 300% of the Investors’ initial equity investment in Company and any subsequent equity investments, Shares shall vest as follows: (A) if the Investor internal rate of return (“IRR”) as of the Change of Control date is 16% or higher, all remaining Shares shall become fully vested and exercisable on the one-year anniversary of the Change of Control; (B) if the Investor IRR as of the Change of Control date is between 14% and 16%, the number of Shares determined by interpolation (e.g., 50% acceleration at 15% IRR) shall become fully vested and exercisable on the one-year anniversary of the Change of Control; and (C) if the Investor IRR as of the Change of |
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(ii) | If a Change of Control occurs and the requirements of subsection (i) are not met, there will be no acceleration of vesting. |
(iii) | In determining the amount that has been received by the Investors, the gross value of all cash (including prior distributions the Investors or their Affiliates have received with respect to the Shares) and/or securities (with the fair value of such securities to be determined by the Board, which shall be entitled to take into account any restrictions on transferability, liquidity or saleability of such securities) received by the Investors shall be taken into account, minus the amount of commissions, fees and expenses payable by the Investors to the investment bankers and professional advisors in connection with the Change of Control. Management and transaction fees specified in the Management Agreement shall be excluded, provided that any increases in such fees from the fees in effect as of the date of the Optionee’s Employment Agreement must be customary (on a percentage of equity basis or in the case of transaction fees as a percentage of transaction size) compared to fees charged by private equity sponsors to their portfolio companies. In evaluating the amount of the transaction consideration, the Board may take into consideration amounts paid into escrow and contingent payments in connection with any transaction. |
(a) | if the Optionee’s Employment terminates as a result of (i) termination of the Optionee by the Employer without Cause, (ii) resignation by the Optionee for Good Reason or (iii) the Optionee’s Disability or death, then (A) the Option shall Vest on a Pro Rata Basis, (B) any unvested portion of the Option that was earned for the 2009 or 2010 calendar year based on Schedule A shall become fully vested as of the Date of Termination, and (C) if a Change of Control has occurred, any amount that is scheduled to vest on the one-year anniversary of the Change of Control pursuant to Section 2(o)(i) above shall become fully vested as of the Date of Termination; |
(b) | with respect to the portion of the Option that is earned for the 2009 or 2010 calendar year, if the Grantee’s Employment terminates as a result of the Grantee’s Retirement or as a result of the Grantee’s resignation other than for Good Reason, then the Option shall be deemed to have stopped vesting as of the Date of Termination of such Grantee, and no portion of the Option shall be earned for the calendar year in which the Date of Termination occurs; |
(c) | with respect to the portion of the Option that is earned for calendar years after 2010, if the Grantee’s Employment terminates as a result of the Grantee’s Retirement or as a result of the Grantee’s resignation other than for Good Reason, then the Option shall be deemed to have stopped vesting as of the beginning of the year containing the Date of Termination of such Grantee; |
(d) | if the Optionee’s Employment terminates as a result of termination by the Employer for Cause, then the Option will be immediately forfeited by the Optionee and terminate as of the Date of Termination; |
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(e) | upon a Change of Control through December 31, 2013, the Option shall Vest on a Return-on-Equity Basis; provided that, upon such a Change of Control following which Stock continues to be held by any of the Principal Investors, if the Change of Control would not result in full acceleration of vesting pursuant to this Section 3(e) without giving effect to this proviso, the Administrator shall, as it considers appropriate in its sole discretion, either (i) cause the Option to Vest on a Return-on-Equity Basis treating the Fair Market Value of any retained Stock as an amount received by the Investors in connection with the Change of Control, or (ii) permit the Option to Vest on a Return-on-Equity Basis in connection with any disposition by the Principal Investors of a material portion of their remaining Stock through December 31, 2013; and |
(f) | notwithstanding the foregoing, in the event of a Change of Control after the 2009 or 2010 calendar year, any portion of the Option that was earned with respect to the 2009 or 2010 calendar year based on Schedule A and that has not yet vested shall vest in full upon the Change of Control. |
(a) | In General. The latest date on which this Option may be exercised is ten years from the Date of Grant (the “Final Exercise Date”). Each election to exercise this Option shall be subject to the terms and conditions of the Plan and shall be in writing, signed by the Optionee or by his or her executor, administrator, or permitted transferee (subject to any restrictions provided under the Plan and the Stockholders Agreement), made pursuant to and in accordance with the terms and conditions set forth in the Plan and received by the Company at its principal offices, accompanied by payment in full as provided in the Plan. The purchase price may be paid by delivery of cash or check acceptable to the Administrator or, in case of an exercise on the Final Exercise Date or upon a Change of Control that terminates an Extended Exercise Period, after termination of Employment as a result of resignation by the Optionee other than for either Good Reason or Retirement and prior to the fifth anniversary of the Closing or as a result of the Optionee’s Disability or death, if and to the extent permitted by the Code (including Section 409A thereof) and if such exercise would not adversely affect |
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(b) | Time To Exercise. The Option must be exercised no later than the Final Exercise Date, and if not exercised by such date, will thereupon terminate. The Option must also be exercised by the termination of the Optionee’s Employment, and if not exercised by such date, will thereupon terminate, except as provided below: |
(i) | upon termination of the Optionee’s Employment (i) by the Employer without Cause, (ii) by resignation by the Optionee for Good Reason, or (iii) as a result of a Disability or death, or upon the Sale of a Business where the Optionee is employed by the Sold Business and is not offered employment with a Retained Business on substantially similar terms and conditions, the Option will remain exercisable through the Extended Exercise Period, and will thereupon terminate; |
(ii) | if the Optionee’s Employment terminates as a result of resignation by the Optionee other than for Good Reason and such Employment terminates (i) prior to the fifth anniversary of the Closing, then the Option will remain exercisable until the earlier of (a) the 90th day after the Date of Termination or (b) the Final Exercise Date, and will thereupon terminate, or (ii) on or after the fifth anniversary of the Closing, then the Option will remain exercisable through the Extended Exercise Period, and will thereupon terminate; |
(iii) | if, the Optionee’s Employment terminates as a result of the Optionee’s Retirement, then the Option will remain exercisable through the Extended Exercise Period, and will thereupon terminate; |
(a) | Call on Resignation Without Good Reason. If the Optionee’s Employment terminates as a result of resignation by the Optionee other than for either Good |
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(b) | Call on Termination For Cause. If the Optionee’s Employment is terminated by the Employer for Cause, for the period ending one hundred eighty-one (181) days following the later of Optionee’s Date of Termination or the date on which this Option is exercised, the Company shall have a Call Option at the lower of (i) the exercise price paid by Optionee for such Shares (less any distributions received with respect to such Shares under the SunGard Capital Corp. and SunGard Capital Corp. II Dividend Rights Plan or with respect to such Shares after the exercise of this Option), or (ii) the then Fair Market Value of such Shares, provided, however, that the Companies’ Call Options pursuant to this Section 5(b) shall cease to apply on an IPO. |
(c) | Put on Disability or Death. If the Optionee’s Employment terminates as a result of the Optionee’s Disability or death (and if and to the extent permitted by the Code (including Section 409A thereof)) the Optionee (or, the Optionee’s Beneficiary) shall have a Put Option at any time after Optionee’s Date of Termination, but prior to an IPO. |
(d) | The Company may assign its rights under this Section 5 to any of their subsidiaries or to the Investors. |
(e) | The provisions of this Section 5 supersede Section 6 of the Stockholders Agreement with respect to the Options granted hereunder and the related Shares. |
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(a) | During the six months after any exercise, payment or delivery of Shares pursuant to this Option, such exercise, payment or delivery may be rescinded at the Company’s option if Optionee fails to comply in any material respect with the terms of the Restrictive Covenants or of any other agreement with the Company or any of its Affiliates or if Optionee breaches any duty to the Company or any of its Affiliates. The Company shall notify Optionee in writing of any such rescission within one year after such exercise, payment or delivery. Within ten days after receiving such a notice from the Company, Optionee shall remit or deliver to the Company (i) the amount of any gain realized upon the sale of any Shares acquired upon the exercise of this Option, (ii) any consideration received upon the exchange of any Shares acquired upon the exercise of this Option (or the extent that such consideration was not received in the form of cash, the cash equivalent thereof valued of the time of the exchange) and (iii) the number of Shares received in connection with the rescinded exercise. |
(b) | The Company shall have the right to offset, against any Shares and any cash amounts due to Optionee under or by reason of Optionee’s holding this Option, any amounts to which the Company is entitled as a result of Optionee’s violation of the Restrictive Covenants or of any other agreement with the Company or any of its Affiliates or Optionee’s breach of any duty to the Company or any of its Affiliates. Accordingly, Optionee acknowledges that (i) the Company may delay exercise of this Option or withhold delivery of Shares, (ii) the Company may place the proceeds of any sale or other disposition of Shares in an escrow account of the Company’s choosing pending resolution of any dispute with the Company or any of its Affiliates, and (iii) the Company has no liability for any attendant market risk caused by any such delay, withholding, or escrow. |
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SunGard Capital Corp. | SUNGARD CAPITAL CORP. | |
By: |
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Vesting Schedule
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Base Case | 2009 | 2010 | 2011 | 2012 | 2013 | |||||
Actual Internal EBITA | The Company’s final | The Company’s final | ||||||||
(in millions) | 2009 consolidated | 2010 consolidated | ||||||||
budgeted EBITA, as | budgeted EBITA, as | |||||||||
approved by the | approved by the | |||||||||
Board or | Board or | |||||||||
Compensation | Compensation | |||||||||
Committee and as | Committee and as | |||||||||
appears in the | appears in the | |||||||||
Company’s operating | Company’s operating | |||||||||
budget for 2009 | budget for 2010 |
Original Base Case | 2009 | 2010 | ||||||
Actual Internal EBITA (in millions) |
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Tier II Executive Officer Form | ||
Name: | ||
Number of Shares: | ||
Price per Share: | ||
Date of Grant: |
ARE SUBJECT TO RESTRICTIONS ON VOTING AND TRANSFER AND
REQUIREMENTS OF SALE AND OTHER PROVISIONS AS SET FORTH IN THE
STOCKHOLDERS AGREEMENT AMONG SUNGARD CAPITAL CORP., SUNGARD
CAPITAL CORP. II, SUNGARD HOLDING CORP., SOLAR CAPITAL CORP. AND
CERTAIN STOCKHOLDERS OF SUNGARD CAPITAL CORP. AND SUNGARD
CAPITAL CORP. II, DATED AS OF AUGUST 10, 2005 (AS IN EFFECT FROM TIME
TO TIME, THE “STOCKHOLDERS AGREEMENT”)
ADVICE OF YOUR OWN LEGAL AND FINANCIAL ADVISORS WITH RESPECT TO
YOUR AWARD AND ITS TAX CONSEQUENCES.
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(a) | “Adjustment Event” means (i) a cash distribution with respect to Shares paid to all or substantially all holders of Shares, other than cash dividends in respect of Shares declared by the Board as part of a regular dividend payment practice or stated cash dividend policy of the Company following an IPO, or (ii) a substantially pro rata redemption or substantially pro rata repurchase (in each case by the Company or any of its subsidiaries) of the Shares; |
(b) | “Business” means any one of the following business segments: Financial Systems, Availability Services, Higher Education Systems and Public Sector Systems; |
(c) | “CEO” means the Chief Executive Officer of the Company; |
(d) | “Date of Termination” means the date that the termination of Optionee’s Employment with Employer is effective on account of Optionee’s death, Optionee’s Disability, termination by Employer for Cause or without Cause, or by Optionee, as the case may be; |
(e) | “Employer” means the Company or, as the case may be, its Affiliate with whom the Optionee has entered into an Employment relationship; |
(f) | “Family Member” means, with respect to Optionee, any child, stepchild, grandchild, parent, stepparent, grandparent, spouse, former spouse, sibling, niece, nephew, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law, or sister-in-law, including adoptive relationships, any person sharing the Optionee’s household (other than a tenant or employee), a trust in which one or more of these persons have more than fifty percent of the beneficial interest, a foundation in which one or more of these persons (or Optionee) control the management of assets, or any other entity in which one or more of these persons (or Optionee) own more than fifty percent of the voting interests; |
(g) | “Investors” means investment funds advised by Silver Lake Partners, Bain Capital, The Blackstone Group, Goldman, Sachs & Co., Kohlberg Kravis Roberts, Providence Equity Partners and Texas Pacific Group that own capital stock of the Company; |
(h) | “Restrictive Covenant” means any of the restrictive covenants set forth in Exhibit A, which is incorporated herein by reference; |
(i) | “Retirement” means termination of employment by Optionee after age 62; |
(j) | “Sale of a Business” means the sale, exchange or other disposition or transfer of all or substantially all of the business or assets of one of the Businesses to a purchaser that is unrelated to the Company or any of the Investors, provided that a Sale of a Business shall not also constitute a Change of Control; |
(k) | “Sold Business” means a Business that is being sold in a Sale of a Business; and |
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(l) | “Vest on a Pro Rata Basis” means that the vesting of Optionee’s Option shall continue through the end of the Year of Termination (but not thereafter), provided that only a portion of the Option that otherwise would have vested at the end of such year shall vest, such portion being determined by multiplying (i) the number of Shares subject to the Option that otherwise would have vested at the end of such year based upon attainment of pre-determined performance goals, by (ii) (A) the number of days in which Optionee was employed by Employer during the Year of Termination divided by (B) 365 (rounded to the nearest whole number of Shares); |
(m) | “Vest on a Return-on-Equity Basis” means that Optionee’s Option shall be subject to accelerated vesting at the time of a Change of Control as follows: |
(i) | If the Change of Control occurs on or before December 31, 2013 and results in the Investors receiving an amount constituting at least 300% of the Investors’ initial equity investment in Company and any subsequent equity investments, Shares shall vest as follows: (A) if the Investor internal rate of return (“IRR”) as of the Change of Control date is 16% or higher, all remaining Shares shall become fully vested and exercisable on the one-year anniversary of the Change of Control; (B) if the Investor IRR as of the Change of Control date is between 14% and 16%, the number of Shares determined by interpolation (e.g., 50% acceleration at 15% IRR) shall become fully vested and exercisable on the one-year anniversary of the Change of Control; and (C) if the Investor IRR as of the Change of Control date is less than 14%, there will be no acceleration of vesting. Vesting on the one-year anniversary of the Change of Control is contingent on continued employment through the one-year anniversary date, except as otherwise provided in Section 3(a). |
(ii) | If a Change of Control occurs and the requirements of subsection (i) are not met, there will be no acceleration of vesting. |
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(iii) | In determining the amount that has been received by the Investors, the gross value of all cash (including prior distributions the Investors or their Affiliates have received with respect to the Shares) and/or securities (with the fair value of such securities to be determined by the Board, which shall be entitled to take into account any restrictions on transferability, liquidity or saleability of such securities) received by the Investors shall be taken into account, minus the amount of commissions, fees and expenses payable by the Investors to the investment bankers and professional advisors in connection with the Change of Control. Management and transaction fees specified in the Management Agreement shall be excluded, provided that any increases in such fees from the fees in effect as of the date of the Optionee’s Employment Agreement must be customary (on a percentage of equity basis or in the case of transaction fees as a percentage of transaction size) compared to fees charged by private equity sponsors to their portfolio companies. In evaluating the amount of the transaction consideration, the Board may take into consideration amounts paid into escrow and contingent payments in connection with any transaction. |
(n) | “Year of Termination” means the fiscal year for the applicable Performance Period during which Optionee’s Date of Termination occurs. |
(a) | if the Optionee’s Employment terminates as a result of (i) termination of the Optionee by Employer without Cause, (ii) the Optionee’s Disability or death, or (iii) with respect to Shares earned for a calendar year after 2010, the Optionee’s Retirement, then (A) the Option for the year of termination shall Vest on a Pro Rata Basis, (B) any unvested portion of the Option that was earned for the 2009 or 2010 calendar year shall become fully vested as of the Date of Termination, and (C) if a Change in Control has occurred, any amount that is scheduled to vest on the one-year anniversary of the Change in Control pursuant to Section 2(m)(i) above shall become fully vested as of the Date of Termination; |
(b) | with respect to the portion of the Option that is earned for the 2009 or 2010 calendar year, if the Optionee’s Employment terminates as a result of the Optionee’s resignation or Retirement, then the Option shall be deemed to have stopped vesting as of the Date of Termination of such Optionee, and no portion of the Option shall be earned for the calendar year in which the Date of Termination occurs; |
(c) | with respect to the portion of the Option that is earned for calendar years after 2010, if the Optionee’s Employment terminates as a result of the Optionee’s resignation, then the Option shall be deemed to have stopped vesting as of the beginning of the year containing the Date of Termination of such Optionee; |
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(d) | if the Optionee’s Employment terminates as a result of termination by Employer for Cause, then the Option will be immediately forfeited by the Optionee and terminate as of the Date of Termination; and |
(e) | upon a Change of Control through December 31, 2013, the Option shall Vest on a Return-on-Equity Basis; provided that, upon such a Change of Control following which Stock continues to be held by any of the Principal Investors, if the Change of Control would not result in full acceleration of vesting pursuant to this Section 3(e) without giving effect to this proviso, the Administrator shall, as it considers appropriate in its sole discretion, either (i) cause the Option to Vest on a Return-on-Equity Basis treating the Fair Market Value of any retained Stock as an amount received by the Investors in connection with the Change of Control, or (ii) permit the Option to Vest on a Return-on-Equity Basis in connection with any disposition by the Principal Investors of a material portion of their remaining Stock through December 31, 2013; |
(f) | notwithstanding the foregoing, in the event of a Change of Control after the 2009 or 2010 calendar year, any portion of the Option that was earned with respect to the 2009 or 2010 calendar year based on Schedule A and that has not yet vested shall vest in full upon the Change of Control. |
(a) | In General. The latest date on which this Option may be exercised is ten years from the Date of Grant (the “Final Exercise Date”). Each election to exercise this Option shall be subject to the terms and conditions of the Plan and shall be in writing, signed by the Optionee or by his or her executor, administrator, or permitted transferee (subject to any restrictions provided under the Plan and the Stockholders Agreement), made pursuant to and in accordance with the terms and conditions set forth in the Plan and received by the Company at its principal offices, accompanied by payment in full as provided in the Plan. The purchase price may be paid by delivery of cash or check acceptable to the Administrator or, in case of an exercise on the Final Exercise Date, or after a Sale of a Business where the Optionee is employed by a Sold Business and is not offered employment with a Retained Business on substantially similar terms and conditions or a termination of Employment without Cause or as a result of the Optionee’s Disability or death, if and to the extent permitted by the Code (including Section 409A thereof) and if such exercise would not adversely affect the Company’s results of operations under Generally Accepted Accounting Principles, by means of withholding of Shares subject to the Option with an aggregate Fair Market Value equal to (i) the aggregate exercise price and (ii) if commercially reasonable for the Company to so permit (taking into account its cash position in light of any contractual or legal restrictions) minimum statutory withholding taxes with respect to such exercise, or by such other method provided under the Plan and explicitly approved by the Administrator. In the event that this |
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(b) | Time To Exercise. The Option must be exercised no later than the Final Exercise Date, and if not exercised by such date, will thereupon terminate. The Option must also be exercised by the termination of the Optionee’s Employment and, if not exercised by such date, will thereupon terminate, provided that, upon termination of the Optionee’s Employment (i) by Employer without Cause, (ii) by resignation by the Optionee, or (iii) as a result of a Disability or death, the Option will remain exercisable until the earlier of the 90th day after the Date of Termination (or the one-year anniversary thereof, in the case of a termination resulting from Disability or death) or the Final Exercise Date, and will thereupon terminate, provided further that the Administrator shall extend the period to exercise the portion of the Option that vests after termination of Employment (but not beyond the Final Exercise Date) to the extent necessary to determine the Actual Internal EBITA (as defined in Schedule A) for the year containing the Date of Termination (or for the preceding year, as applicable). |
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(a) | During the six months after any exercise, payment or delivery of Shares pursuant to this Option, such exercise, payment or delivery may be rescinded at the Company’s option if Optionee fails to comply in any material respect with the terms of the Restrictive Covenants or of any other agreement with the Company or any of its Affiliates or if Optionee breaches any duty to the Company or any of its Affiliates. The Company shall notify Optionee in writing of any such rescission within one year after such exercise, payment or delivery. Within ten days after receiving such a notice from the Company, Optionee shall remit or deliver to the Company (i) the amount of any gain realized upon the sale of any Shares acquired upon the exercise of this Option, (ii) any consideration received upon the exchange of any Shares acquired upon the exercise of this Option (or the extent that such consideration was not received in the form of cash, the cash equivalent thereof valued of the time of the exchange) and (iii) the number of Shares received in connection with the rescinded exercise. |
(b) | The Company shall have the right to offset, against any Shares and any cash amounts due to Optionee under or by reason of Optionee’s holding this Option, any amounts to which the Company is entitled as a result of Optionee’s violation of the Restrictive Covenants or of any other agreement with the Company or any of its Affiliates or Optionee’s breach of any duty to the Company or any of its Affiliates. Accordingly, Optionee acknowledges that (i) the Company may delay exercise of this Option or withhold delivery of Shares, (ii) the Company may place the proceeds of any sale or other disposition of Shares in an escrow account of the Company’s choosing pending resolution of any dispute with the Company or any of its Affiliates, and (iii) the Company has no liability for any attendant market risk caused by any such delay, withholding, or escrow. |
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SunGard Capital Corp. | SUNGARD CAPITAL CORP. | |
By: |
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Vesting Schedule
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Base Case | 2009 | 2010 | 2011 | 2012 | 2013 | |||||
Actual Internal EBITA | The Company’s final | The Company’s final | ||||||||
(in millions) | 2009 consolidated | 2010 consolidated | ||||||||
budgeted EBITA, as | budgeted EBITA, as | |||||||||
approved by the | approved by the | |||||||||
Board or | Board or | |||||||||
Compensation | Compensation | |||||||||
Committee and as | Committee and as | |||||||||
appears in the | appears in the | |||||||||
Company’s operating | Company’s operating | |||||||||
budget for 2009 | budget for 2010 |
Original Base Case | 2009 | 2010 | ||||||
Actual Internal EBITA (in millions) |
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Restrictive Covenants
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Name: | ||
Number of Stock Units: | ||
Date of Grant: |
RESTRICTED STOCK UNIT AWARD ARE SUBJECT TO RESTRICTIONS ON VOTING
AND TRANSFER AND REQUIREMENTS OF SALE AND OTHER PROVISIONS AS SET
FORTH IN THE STOCKHOLDERS AGREEMENT AMONG SUNGARD CAPITAL CORP.,
SUNGARD CAPITAL CORP. II, SUNGARD HOLDING CORP., SOLAR CAPITAL CORP.
AND CERTAIN STOCKHOLDERS OF SUNGARD CAPITAL CORP. AND SUNGARD
CAPITAL CORP. II, DATED AS OF AUGUST 10, 2005 (AS IN EFFECT FROM TIME TO
TIME, THE “STOCKHOLDERS AGREEMENT”).
ENCOURAGE YOU TO SEEK THE ADVICE OF YOUR OWN LEGAL AND FINANCIAL
ADVISORS WITH RESPECT TO YOUR AWARD AND ITS TAX CONSEQUENCES.
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(a) | “Adjustment Event” means (i) a cash distribution with respect to Shares paid to all or substantially all holders of Shares, other than cash dividends in respect of Shares declared by the Board as part of a regular dividend payment practice or stated cash dividend policy of the Company following an IPO, or (ii) a substantially pro rata redemption or substantially pro rata repurchase (in each case, as applicable, by the Company, Lowerco or any of their subsidiaries) of all or part of any class of Shares; |
(b) | “Beneficiary” means, in the event of Grantee’s death, Grantee’s legal representative, executor, administrator or designated beneficiary, as applicable; |
(c) | “Call Option” means an option in favor of Company or Lowerco to purchase for cash at a specified price the Shares received by Grantee (or Grantee’s Beneficiary) upon any payment of Stock Units pursuant to this Agreement; |
(e) | “Fair Market Value” means, as of any date, as to any Share, the Board’s good faith determination of the fair market value of such Share as of the applicable reference date, taking into account the most recent annual valuation of the Company. The Company agrees to engage at least annually an independent third party appraiser to perform such valuation, and to update each such valuation on a quarterly basis. Upon the exercise of a Call Option pursuant to Section 6(a) or a Put Option, the Board will provide prompt written notice of its determination of the Fair Market Value of the applicable Shares (the “Board Notice”) to Grantee. Grantee shall have the right to contest the Fair Market Value thereof by notice to the Company within fifteen (15) business days of receipt of the Board Notice. If Grantee does so notify the Company of Grantee’s disagreement with the Fair Market Value set forth in the Board Notice within such time period, then the Company shall retain an independent third party appraiser reasonably acceptable to Grantee and to the Company to determine the fair market value of such Shares, and the determination of such independent appraiser shall govern. For this purpose, the appraiser last used by the Company in the ordinary course of business will be considered an independent appraiser. In the event that the Fair Market Value of the Shares as |
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(f) | “Family Member” means, with respect to Grantee, any child, stepchild, grandchild, parent, stepparent, grandparent, spouse, former spouse, sibling, niece, nephew, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law, or sister-in-law, including adoptive relationships, any person sharing the Grantee’s household (other than a tenant or employee), a trust in which one or more of these persons have more than fifty percent of the beneficial interest, a foundation in which one or more of these persons (or Grantee) control the management of assets, or any other entity in which one or more of these persons (or Grantee) own more than fifty percent of the voting interests; |
(g) | “IPO” means the initial closing of a bona fide firm commitment underwritten public offering of equity shares of the Company, registered under the Securities Act of 1933, as amended, that results in such shares being traded on a liquid trading market; |
(h) | “Put Option” means the obligation of the Company or Lowerco, upon thirty (30) days notice from Grantee, to use commercially reasonable efforts to repurchase for cash the Shares acquired by Grantee (or Grantee’s Beneficiary) upon payment of Stock Units pursuant to this Agreement at the then Fair Market Value of such Shares; provided, however, that any Shares subject to the Put Option shall have been held by Grantee (or Grantee’s Beneficiary) for at least six months. If Company or Lowerco (as the case may be) is not able to repurchase the Shares subject to the Put Option in cash as a result of any contractual or legal restriction, Company or Lowerco (as the case may be) shall provide Grantee (or Grantee’s Beneficiary) with a promissory note that bears interest at the prime rate as published in The Wall Street Journal on the repurchase date plus 1% and will become payable over the three year period from the date of the note; |
(i) | “Registration Rights Agreement” means the Participation, Registration Rights and Coordination Agreement, dated as of August 10, 2005, by and among the Company, Lowerco, SunGard Holding Corp., Solar Capital Corp. and certain stockholders of the Company and Lowerco; |
(j) | “Restrictive Covenant” means any of the restrictive covenants set forth in Section 5 of Grantee’s Employment Agreement; |
(k) | “Retirement” means retirement within the meaning of Section 2.2(b) of Grantee’s Employment Agreement; |
(l) | “Unit” means an undivided interest in 1.3 Class A shares, 0.1444 Class L shares and 0.05 Lowerco Preferred shares, determined at the Date of Grant, as it may be adjusted as provided herein; |
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(a) | if the Grantee’s Employment terminates as a result of (i) termination of the Grantee by the Employer without Cause, (ii) resignation by the Grantee, or (iii) the Grantee’s Disability or death, then the Stock Units shall immediately stop vesting; |
(b) | if the Grantee’s Employment terminates as a result of termination by the Employer for Cause, then the Stock Units will be immediately forfeited by the Grantee and terminate as of the Date of Termination; |
(c) | if the Grantee’s Employment terminates as a result of the Grantee’s Retirement, then the Stock Units shall continue to vest for the duration of the Grantee’s Consulting Period; |
(d) | upon a Sale of a Business where the Grantee is employed by the Sold Business and is not offered employment with a Retained Business on substantially similar terms and conditions, the Stock Units shall become fully vested; and |
(e) | in the event of a Change of Control, the Stock Units shall become fully vested immediately before the Change of Control. |
(a) | Call on Resignation Without Good Reason. If the Grantee’s Employment terminates as a result of resignation by the Grantee other than for either Good Reason or Retirement, for the period ending one hundred eighty-one (181) days following the later of Grantee’s Date of Termination or the date on which Shares are paid to Grantee pursuant to this Agreement, each of the Company and Lowerco shall have a Call Option at the then Fair Market Value of such Shares, provided, |
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(b) | Call on Termination For Cause. If the Grantee’s Employment is terminated by the Employer for Cause, for the period ending one hundred eighty-one (181) days following the later of Grantee’s Date of Termination or the date on which Shares are paid to Grantee pursuant to this Agreement, each of the Company and Lowerco shall have a Call Option at the then Fair Market Value of such Shares, provided, however, that the Companies’ Call Options pursuant to this Section 6(b) shall cease to apply on an IPO. |
(c) | Put on Disability or Death. If the Grantee’s Employment terminates as a result of the Grantee’s Disability or death (and if and to the extent permitted by the Code (including Section 409A thereof)) the Grantee (or, the Grantee’s Beneficiary) shall have a Put Option at any time after Grantee’s Date of Termination, but prior to an IPO. |
(d) | The Company or Lowerco may assign its rights under this Section 6 to any of their subsidiaries or to the Investors. |
(e) | The provisions of this Section 6 supersede Section 6 of the Stockholders Agreement with respect to the Stock Units granted hereunder and the related Shares. |
(a) | Upon the occurrence of an Adjustment Event, there shall be credited to the Account an amount equal to the product of (i) the per-Share amount paid with respect to Shares underlying the Stock Unit in connection with the Adjustment Event, multiplied by (ii) the number of Shares of the class of stock affected by the Adjustment Event that are included in each Unit immediately prior to the Adjustment Event, multiplied by (iii) the number of Units underlying the Grantee’s Stock Units pursuant to this Award. |
(b) | If any other cash dividend or distribution is paid with respect to Shares underlying the Stock Units, there shall be credited to the Account an amount equal to the product of (i) the per-Share amount paid with respect to Shares underlying the Stock Units, multiplied by (ii) the number of Shares of the applicable class of stock that are included in each Unit, multiplied by (iii) the number of Units underlying the Grantee’s Stock Units pursuant to this Award. |
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(c) | The amount credited to the Account pursuant to this Section 8 with respect to vested Stock Units is referred to as the “Bonus Value.” The amount credited to the Account pursuant to this Section 8 with respect to unvested Stock Units is referred to as the “Deferred Bonus Value.” |
(d) | On the fifth business day after the end of each calendar quarter, the Company shall pay to the Grantee in cash an amount equal to the Bonus Value accrued by the Grantee for such quarter, subject to applicable tax withholding. The Company shall pay to the Grantee the Deferred Bonus Value accrued in connection with any unvested Stock Units on the fifth business day after the date on which such unvested Stock Units vest, subject to applicable tax withholding. |
(e) | In the case of a redemption or repurchase of Shares, the number of Shares of the class of stock redeemed or repurchased that are subject to outstanding Stock Units will be automatically reduced by an amount proportionate to the percentage reduction in outstanding Shares of the affected class resulting from the redemption or repurchase. The Grantee shall be entitled to receive any information reasonably requested regarding the composition of a Unit, as adjusted in accordance with this Section 8. |
(a) | During the six months after any delivery of Shares pursuant to the Stock Units, such delivery may be rescinded at the Company’s option if the Grantee fails to comply in any material respect with the terms of the Restrictive Covenants or of any other agreement with the Company or any of its affiliates or if the Grantee breaches any duty to the Company or any of its Affiliates. The Company shall notify the Grantee in writing of any such rescission within one year after such delivery. Within ten days after receiving such a notice from the Company, the Grantee shall remit or deliver to the Company (i) the amount of any gain realized upon the sale of any Shares, (ii) any consideration received upon the exchange of any Shares (or to the extent that such consideration was not received in the form of cash, the cash equivalent thereof valued at the time of the exchange), and (iii) the number of Shares received in connection with the rescinded delivery. |
(b) | The Company shall have the right to offset, against any Shares and any cash amounts due to the Grantee under or by reason of the Grantee’s holding the Stock Units, any amounts to which the Company is entitled as a result of the Grantee’s violation of the terms of the Restrictive Covenants or of any other agreement with |
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SunGard Capital Corp. and | SUNGARD CAPITAL CORP. | |
SunGard Capital Corp. II | SUNGARD CAPITAL CORP. II | |
By: |
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Vesting Schedule
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EXHIBIT 10.7
Form of 2009 Tier I Senior Management Time-Based Class A Stock Option Agreement
Name:
Number of Shares:
Price per Share:
Date of Grant:
SunGard Capital Corp.
Senior Management Non-Qualified Time-Based
Class A Option Agreement
THIS AWARD AND ANY SECURITIES ISSUED UPON EXERCISE OF THIS OPTION
ARE SUBJECT TO RESTRICTIONS ON VOTING AND TRANSFER AND
REQUIREMENTS OF SALE AND OTHER PROVISIONS AS SET FORTH IN THE
STOCKHOLDERS AGREEMENT AMONG SUNGARD CAPITAL CORP., SUNGARD
CAPITAL CORP. II, SUNGARD HOLDING CORP., SOLAR CAPITAL CORP. AND
CERTAIN STOCKHOLDERS OF SUNGARD CAPITAL CORP. AND SUNGARD
CAPITAL CORP. II, DATED AS OF AUGUST 10, 2005 (AS IN EFFECT FROM TIME
TO TIME, THE “STOCKHOLDERS AGREEMENT”).
SUNGARD CAPITAL CORP. STRONGLY ENCOURAGES YOU TO SEEK THE
ADVICE OF YOUR OWN LEGAL AND FINANCIAL ADVISORS WITH RESPECT TO
YOUR AWARD AND ITS TAX CONSEQUENCES.
This agreement (the “Agreement”) evidences a stock option granted by SunGard Capital Corp., a Delaware corporation (the “Company”), to the undersigned (the “Optionee”), pursuant to, and subject to the terms of, the SunGard 2005 Management Incentive Plan (as amended from time to time, the “Plan”) which is incorporated herein by reference and of which the Optionee hereby acknowledges receipt and the Executive Employment Agreement, dated August 11, 2005, between the Optionee and SunGard Data Systems Inc. (the “Employment Agreement”). Any exercise of discretionary authority granted under the Plan shall be subject to the express terms of this Agreement, and the last sentence of Section 3 of the Plan shall not apply to determinations of the Administrator with respect to this Agreement or the provisions of the Plan as applied to this Agreement.
1. Grant of Option. The Company grants to the Optionee, as of the above Date of Grant, an option (the “Option”) to purchase, in whole or in part, on the terms provided herein and in the Plan, that total number of Class A Common shares as set forth in Schedule A (the “Shares”) at the above Price per Share. The Option will vest and become exercisable in accordance with Section 3 below.
The Option evidenced by this Agreement is intended to be a non-qualified option and is granted to the Optionee in an Employment capacity as an employee.
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2. Meaning of Certain Terms. Except as otherwise defined herein, all capitalized terms used in this Agreement shall have the same meaning as in the Plan. The following terms shall have the same meaning as set forth in the Optionee’s Employment Agreement: “Board,” “Cause,” “Change of Control,” “Consulting Period,” “Date of Termination,” “Disability,” “Employer,” “Good Reason,” “Investors,” “Retained Business,” “Sale of a Business,” and “Sold Business.” The following terms shall have the following meanings:
(a) | “Adjustment Event” means (i) a cash distribution with respect to Shares paid to all or substantially all holders of Shares, other than cash dividends in respect of Shares declared by the Board as part of a regular dividend payment practice or stated cash dividend policy of the Company following an IPO, or (ii) a substantially pro rata redemption or substantially pro rata repurchase (in each case by the Company or any of its subsidiaries) of the Shares; |
(b) | “Beneficiary” means, in the event of Optionee’s death, Optionee’s legal representative, executor, administrator or designated beneficiary, as applicable; |
(c) | “Call Option” means an option in favor of Company to purchase for cash at a specified price the Shares received by Optionee (or Optionee’s Beneficiary) upon any exercise of the Option with respect to one or more Shares; |
(d) | “Closing” means August 11, 2005; |
(e) | “Extended Exercise Period” means the period ending on the later of (i) the 90th day following (as applicable) the Optionee’s Date of Termination or the Sale of a Business where the Optionee is employed by the Sold Business and is not offered employment with a Retained Business on substantially similar terms and conditions (or the one year anniversary of the Optionee’s Date of Termination in the case of a termination resulting from Disability or death) and (ii) the earlier of (A) a Change of Control or (B) the 30th day after an IPO (or, if Optionee is subject to an IPO lock-up, the 30th day after the expiration of the lock-up); provided that in all cases the Extended Exercise Period shall end no later than the Final Exercise Date; |
(f) | “Fair Market Value” means, as of any date, as to any Share, the Board’s good faith determination of the fair market value of such Share as of the applicable reference date, taking into account the most recent annual valuation of the Company. The Company agrees to engage, no later than December 31, 2006, and at least annually thereafter, an independent third party appraiser to perform such valuation, and to update each such valuation on a quarterly basis. Upon the exercise of a Call Option pursuant to Section 5(a) or a Put Option, the Board will provide prompt written notice of its determination of the Fair Market Value of the applicable Shares (the “Board Notice”) to Optionee. Optionee shall have the right to contest the Fair Market Value thereof by notice to the Company within fifteen (15) business days of receipt of the Board Notice. If Optionee does so notify the Company of Optionee’s disagreement with the Fair Market Value set forth in the Board Notice within such time period, then the Company shall retain an |
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independent third party appraiser reasonably acceptable to Optionee and to the Company to determine the fair market value of such Shares, and the determination of such independent appraiser shall govern. For this purpose, the appraiser last used by the Company in the ordinary course of business will be considered an independent appraiser. In the event that the Fair Market Value of the Shares as determined by such independent appraiser exceeds by the lesser of $200,000 or 10% the fair market value determined by the Board, then the Company shall bear the full cost of the appraisal. Otherwise, the Optionee (or the Optionee’s Beneficiary, as applicable) shall bear the full cost of the appraisal;
(g) | “Family Member” means, with respect to Optionee, any child, stepchild, grandchild, parent, stepparent, grandparent, spouse, former spouse, sibling, niece, nephew, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law, or sister-in-law, including adoptive relationships, any person sharing the Optionee’s household (other than a tenant or employee), a trust in which one or more of these persons have more than fifty percent of the beneficial interest, a foundation in which one or more of these persons (or Optionee) control the management of assets, or any other entity in which one or more of these persons (or Optionee) own more than fifty percent of the voting interests; |
(h) | “IPO” means the initial closing of a bona fide firm commitment underwritten public offering of equity shares of the Company, registered under the Securities Act of 1933, as amended, that results in such shares being traded on a liquid trading market; |
(i) | “Put Option” means the obligation of the Company, upon thirty (30) days notice from Optionee, to use commercially reasonable efforts to repurchase for cash the Shares acquired by Optionee (or Optionee’s Beneficiary) upon exercise of the Option with respect to one or more Shares at the then Fair Market Value of such Shares; provided, however, that any Shares subject to the Put Option shall have been held by Optionee (or Optionee’s Beneficiary) for at least six months. If Company (as the case may be) is not able to repurchase the Shares subject to the Put Option in cash as a result of any contractual or legal restriction, Company shall provide Optionee (or Optionee’s Beneficiary) with a promissory note that bears interest at the prime rate as published in The Wall Street Journal on the repurchase date plus 1% and will become payable over the three year period from the date of the note; |
(j) | “Registration Rights Agreement” means the Participation, Registration Rights and Coordination Agreement, dated as of August 10, 2005, by and among the Company, SunGard Capital Corp. II, SunGard Holding Corp., Solar Capital Corp. and certain stockholders of the Company; |
(k) | “Restrictive Covenant” means any of the restrictive covenants set forth in Section 5 of Optionee’s Employment Agreement; and |
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(l) | “Retirement” means retirement within the meaning of Section 2.2(b) of Optionee’s Employment Agreement. |
As used herein with respect to the Option, the term “vest” means to become exercisable in whole or in specified part.
3. Vesting of Option. The Option shall vest in accordance with Schedule A; provided, however, that:
(a) | if the Optionee’s Employment terminates as a result of (i) termination of the Optionee by the Employer without Cause, (ii) resignation by the Optionee, or (iii) the Optionee’s Disability or death, then the Option shall immediately stop vesting; |
(b) | if the Optionee’s Employment terminates as a result of termination by the Employer for Cause, then the Option will be immediately forfeited by the Optionee and terminate as of the Date of Termination; |
(c) | if the Optionee’s Employment terminates as a result of the Optionee’s Retirement, then the Option shall continue to vest for the duration of the Optionee’s Consulting Period; |
(d) | upon a Sale of a Business where the Optionee is employed by the Sold Business and is not offered employment with a Retained Business on substantially similar terms and conditions, the Option shall become fully vested; and |
(e) | in the event of a Change of Control, the Option shall become fully vested and exercisable immediately before the Change of Control. |
4. Exercise of Option.
(a) | In General. The latest date on which this Option may be exercised is ten years from the Date of Grant (the “Final Exercise Date”). Each election to exercise this Option shall be subject to the terms and conditions of the Plan and shall be in writing, signed by the Optionee or by his or her executor, administrator, or permitted transferee (subject to any restrictions provided under the Plan and the Stockholders Agreement), made pursuant to and in accordance with the terms and conditions set forth in the Plan and received by the Company at its principal offices, accompanied by payment in full as provided in the Plan. The purchase price may be paid by delivery of cash or check acceptable to the Administrator or, in case of an exercise on the Final Exercise Date or upon a Change of Control that terminates an Extended Exercise Period, after termination of Employment as a result of resignation by the Optionee other than for either Good Reason or Retirement and prior to the fifth anniversary of the Closing or as a result of the Optionee’s Disability or death, if and to the extent permitted by the Code (including Section 409A thereof) and if such exercise would not adversely affect any of the Companies’ results of operations under Generally Accepted Accounting Principles, by means of withholding of Shares subject to the Option with an aggregate Fair Market Value equal to (i) the aggregate exercise price and |
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(ii) if commercially reasonable for the Company to so permit (taking into account its cash position in light of any contractual or legal restrictions) minimum statutory withholding taxes with respect to such exercise, or by such other method provided under the Plan and explicitly approved by the Administrator. In the event that this Option is exercised by a person other than the Optionee, the Companies will be under no obligation to deliver Shares hereunder unless and until it is satisfied as to the authority of the Option Holder to exercise this Option.
(b) | Time To Exercise. The Option must be exercised no later than the Final Exercise Date, and if not exercised by such date, will thereupon terminate. The Option must also be exercised by the termination of the Optionee’s Employment, and if not exercised by such date, will thereupon terminate, except as provided below: |
(i) | upon termination of the Optionee’s Employment (i) by the Employer without Cause, (ii) by resignation by the Optionee for Good Reason, or (iii) as a result of a Disability or death, or upon the Sale of a Business where the Optionee is employed by the Sold Business and is not offered employment with a Retained Business on substantially similar terms and conditions, the Option will remain exercisable through the Extended Exercise Period, and will thereupon terminate; |
(ii) | if the Optionee’s Employment terminates as a result of resignation by the Optionee other than for Good Reason and such Employment terminates (i) prior to the fifth anniversary of the Closing, then the Option will remain exercisable until the earlier of (a) the 90th day after the Date of Termination or (b) the Final Exercise Date, and will thereupon terminate, or (ii) on or after the fifth anniversary of the Closing, then the Option will remain exercisable through the Extended Exercise Period, and will thereupon terminate; |
(iii) | if, the Optionee’s Employment terminates as a result of the Optionee’s Retirement, then the Option will remain exercisable through the Extended Exercise Period, and will thereupon terminate; |
provided further that the Administrator shall extend the period to exercise the portion of the Option that vests after termination of Employment (but not beyond the Final Exercise Date) to the extent necessary to determine the Actual Internal EBITA (as defined in Schedule A) for the year containing the Date of Termination (or for the preceding year, as applicable).
5. Certain Calls and Puts.
(a) | Call on Resignation Without Good Reason. If the Optionee’s Employment terminates as a result of resignation by the Optionee other than for either Good Reason or Retirement, for the period ending one hundred eighty-one (181) days following the later of Optionee’s Date of Termination or the date on which this Option is exercised, the Company shall have a Call Option at the then Fair Market |
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Value of such Shares, provided, however, that the Companies’ Call Options pursuant to this Section 5(a) shall cease to apply on the earlier of an IPO or the fifth anniversary of the Closing. For purposes of the preceding sentence, the term resignation does not include the departure of Optionee by reason of the Sale of a Business where Optionee is employed by the Sold Business and is not offered employment with a Retained Business on substantially similar terms and conditions.
(b) | Call on Termination For Cause. If the Optionee’s Employment is terminated by the Employer for Cause, for the period ending one hundred eighty-one (181) days following the later of Optionee’s Date of Termination or the date on which this Option is exercised, the Company shall have a Call Option at the lower of (i) the exercise price paid by Optionee for such Shares (less any distributions received with respect to such Shares under the SunGard Capital Corp. and SunGard Capital Corp. II Dividend Rights Plan or with respect to such Shares after the exercise of this Option), or (ii) the then Fair Market Value of such Shares, provided, however, that the Companies’ Call Options pursuant to this Section 5(b) shall cease to apply on an IPO. |
(c) | Put on Disability or Death. If the Optionee’s Employment terminates as a result of the Optionee’s Disability or death (and if and to the extent permitted by the Code (including Section 409A thereof)) the Optionee (or, the Optionee’s Beneficiary) shall have a Put Option at any time after Optionee’s Date of Termination, but prior to an IPO. |
(d) | The Company may assign its rights under this Section 5 to any of their subsidiaries or to the Investors. |
(e) | The provisions of this Section 5 supersede Section 6 of the Stockholders Agreement with respect to the Options granted hereunder and the related Shares. |
6. Share Restrictions, etc. Except as expressly provided herein, the Optionee’s rights hereunder and with respect to Shares received upon exercise are subject to the restrictions and other provisions contained in the Stockholders Agreement.
7. Distributions, Redemptions, etc. On the occurrence of an Adjustment Event, the per-Share exercise price of this Option, whether vested or unvested, shall be reduced by an amount equal to the per-Share amount paid in connection with the Adjustment Event; provided, however, that any such reduction shall be limited to that portion of such amount which would not cause the per-Share exercise price of the Option to be reduced below 25% of the fair market value, as of the date the Option was granted, of the Shares. In the case of a redemption or repurchase of the Shares, the number of Shares that are subject to the Option will be automatically reduced by an amount proportionate to the percentage reduction in outstanding shares of the affected class resulting from the redemption or repurchase. Notwithstanding the foregoing, adjustments under this Section shall be made in accordance with the requirements of Section 409A of the Code, where applicable, so as not to cause the Option to be considered “deferred compensation” under Section 409A.
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8. Forfeiture. Upon exercise, payment or delivery pursuant to this Option, Optionee shall certify on a form acceptable to the Committee that Optionee is in compliance with the Restrictive Covenants and all other agreements between Optionee and the Company or any of its Affiliates. If the Company determines that Optionee is not in compliance with one or more of the Restrictive Covenants or with the provisions of any agreement between Optionee and the Company or any of its Affiliates, and such non-compliance has not been authorized in advance in a specific written waiver from the Company, the Committee may cancel any unexercised portion. The Company shall also have the following (and only the following) additional remedies:
(a) | During the six months after any exercise, payment or delivery of Shares pursuant to this Option, such exercise, payment or delivery may be rescinded at the Company’s option if Optionee fails to comply in any material respect with the terms of the Restrictive Covenants or of any other agreement with the Company or any of its Affiliates or if Optionee breaches any duty to the Company or any of its Affiliates. The Company shall notify Optionee in writing of any such rescission within one year after such exercise, payment or delivery. Within ten days after receiving such a notice from the Company, Optionee shall remit or deliver to the Company (i) the amount of any gain realized upon the sale of any Shares acquired upon the exercise of this Option, (ii) any consideration received upon the exchange of any Shares acquired upon the exercise of this Option (or the extent that such consideration was not received in the form of cash, the cash equivalent thereof valued of the time of the exchange) and (iii) the number of Shares received in connection with the rescinded exercise. |
(b) | The Company shall have the right to offset, against any Shares and any cash amounts due to Optionee under or by reason of Optionee’s holding this Option, any amounts to which the Company is entitled as a result of Optionee’s violation of the Restrictive Covenants or of any other agreement with the Company or any of its Affiliates or Optionee’s breach of any duty to the Company or any of its Affiliates. Accordingly, Optionee acknowledges that (i) the Company may delay exercise of this Option or withhold delivery of Shares, (ii) the Company may place the proceeds of any sale or other disposition of Shares in an escrow account of the Company’s choosing pending resolution of any dispute with the Company or any of its Affiliates, and (iii) the Company has no liability for any attendant market risk caused by any such delay, withholding, or escrow. |
Optionee acknowledges and agrees that the calculation of damages from a breach of any of the Restrictive Covenants or of any other agreement with the Company or any of its Affiliates or of any duty to the Company or any of its Affiliates would be difficult to calculate accurately and that the right to offset or other remedy provided for herein is reasonable and not a penalty. Optionee further agrees not to challenge the reasonableness of such provisions even where the Company rescinds, delays, withholds or escrows Shares or proceeds or uses those Shares or proceeds as a setoff.
9. Legends, etc. Shares issued upon exercise shall bear such legends as may be required or provided for under the terms of the Stockholders Agreement.
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10. Transfer of Option. This Option may only be transferred by the laws of descent and distribution, to a legal representative in the event of the Optionee’s incapacity, or to a Family Member with the consent of the Compensation Committee of the Board, such consent not to be unreasonably withheld.
11. Withholding. The exercise of the Option will give rise to “wages” subject to withholding. The Optionee expressly acknowledges and agrees that the Optionee’s rights hereunder, including the right to be issued Shares upon exercise, are subject to the Optionee promptly paying to the Company in cash (or by such other means as may be acceptable to the Administrator in its discretion) all taxes required to be withheld. The Optionee also authorizes the Company and its subsidiaries to withhold such amount from any amounts otherwise owed to the Optionee and the Company may so withhold as provided in Section 4(a) above.
12. Effect on Employment. Neither the grant of this Option, nor the issuance of Shares upon exercise of this Option, shall give the Optionee any right to be retained in the employ of the Company or any of its Affiliates, affect the right of the Company or any of its Affiliates to discharge or discipline such Optionee at any time, or affect any right of such Optionee to terminate his or her Employment at any time.
13. Governing Law. This Agreement and all claims arising out of or based upon this Agreement or relating to the subject matter hereof shall be governed by and construed in accordance with the domestic substantive laws of the State of Delaware without giving effect to any choice or conflict of laws provision or rule that would cause the application of the domestic substantive laws of any other jurisdiction.
[SIGNATURE PAGE FOLLOWS]
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By acceptance of this Option, the undersigned agrees hereby to become a party to, and be bound by the terms of, the Stockholders Agreement and the Registration Rights Agreement, , in each case treating the undersigned as a “Manager” as defined therein.
Executed as of the Date of Grant.
SunGard Capital Corp.
SUNGARD CAPITAL CORP.
By:
Optionee
I acknowledge that I have received a copy of this Agreement and certain related information, and that I have read and understood these documents. I accept and agree to all of the provisions of this Agreement.
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Schedule A
Vesting Schedule
Option for 25% of the total number of Shares is exercisable on the first anniversary of the Date of Grant (“Initial Vesting Date”); and
Option for the remaining 75% of the total number of Shares is exercisable in equal monthly installments over the 48 months following the Initial Vesting Date starting with the first monthly anniversary of the Initial Vesting Date.
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SunGard Capital Corp. II
SunGard Data Systems Inc.
Computation of Ratio of Earnings to Fixed Charges (Unaudited)
($ in millions)
Three Months Ended | Nine Months Ended | |||||||||||||||
September 30, | September 30, | |||||||||||||||
2008 | 2009 | 2008 | 2009 | |||||||||||||
Fixed charges | ||||||||||||||||
Interest expense | $ | 134 | $ | 151 | $ | 406 | $ | 433 | ||||||||
Amortization of debt issuance costs and debt discount | 9 | 11 | 27 | 31 | ||||||||||||
Portion of rental expense representative of interest | 19 | 20 | 56 | 60 | ||||||||||||
Total fixed charges | $ | 162 | $ | 182 | $ | 489 | $ | 524 | ||||||||
Earnings | ||||||||||||||||
Income (loss) before income taxes | $ | (26 | ) | $ | (43 | ) | $ | (64 | ) | $ | (93 | ) | ||||
Fixed charges per above | 162 | 182 | 489 | 524 | ||||||||||||
Total earnings | $ | 136 | $ | 139 | $ | 425 | $ | 431 | ||||||||
Ratio of earnings to fixed charges | * | * | * | * |
* | Earnings for the three months ended September 30, 2008 and 2009 and for the nine months ended September 30, 2008 and 2009 were inadequate to cover fixed charges by $26 million, $43 million, $64 million and $93 million, respectively. |
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Required by Rule 13a-14(a) or Rule 15d-14(a) and
Section 302 of the Sarbanes-Oxley Act of 2002
Date: November 5, 2009 | ||
/s/ Cristóbal Conde | ||
President and Chief Executive Officer | ||
SunGard Capital Corp., SunGard Capital Corp. II | ||
& SunGard Data Systems Inc. |
Table of Contents
Required by Rule 13a-14(a) or Rule 15d-14(a) and
Section 302 of the Sarbanes-Oxley Act of 2002
Date: November 5, 2009 | ||
/s/ Michael J. Ruane | ||
Chief Financial Officer | ||
SunGard Capital Corp., SunGard CapitalCorp. II | ||
& SunGard Data Systems Inc. |
Table of Contents
Required by Rule 13a-14(b) or Rule 15d-14(b) and
Section 906 of the Sarbanes-Oxley Act of 2002
Date: November 5, 2009 | ||
/s/ Cristóbal Conde | ||
Chief Executive Officer |
Table of Contents
Required by Rule 13a-14(b) or Rule 15d-14(b) and
Section 906 of the Sarbanes-Oxley Act of 2002
Date: November 5, 2009 | ||
/s/ Michael J. Ruane | ||
Chief Financial Officer |