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Technology Stocks : CheckFree (CKFR)

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To: Charlie Smith who wrote (706)	10/29/1997 3:07:00 PM
From: TLindt	Read Replies (1) of 8545

>> To: Brooks Jackson (702 ) From: Charlie Smith Wednesday, Oct 29 1997 8:35AM EST Reply #706 of 728 Brooks: Your question on dilution is the right one. As for "giving away too much" I'll know more after the conference call. The warrants which vest in 60 days have a current value of $15 million, so this is the immediate cost to CKFR of doing this deal. Obviously Kite sees the market opportunity as worth far more than that. I hope the performance targets linked to vesting of the other 7 million shares are very aggressive. << Charlie so I'm on target here.... Checkfree has 54.7MM shares outstanding..per Yahoo. Now Checkfree has offered 3 Million shares up front to Integrion at $20.94ea. And up to 7 Million more....based on performance tragets. So within 60 day Integrion is gonna cut a check to Checkfree for $62,820,000....thereby picking up a little over 5% of the Corporation Checkfree.....which in effect dilutes us all as current owners by a factor of 0.948. At todays price of $29....Integrion is getting a $24 Million discount...in exchange Checkfree get Integrions' back-end business. What are the other vesting targets....for Integrion to get the additional 7 Million shares? Is it 15% of US households?

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