def14a
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
(Amendment No. )
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Filed by the Registrant þ |
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Filed by a Party other than the Registrant o |
Check the appropriate box:
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Preliminary Proxy Statement |
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Confidential, for use of the Commission Only (as permitted by Rule 14a-6(e)(2)) |
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Definitive Proxy Statement |
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Definitive Additional Materials |
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Soliciting Material Pursuant to Section 240.14a-12 |
Total System Services, Inc.
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
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No fee required. |
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Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11. |
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Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the
offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the
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Date Filed: |
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Philip W.
Tomlinson
Chairman of the Board and
Chief Executive Officer
March 19, 2010
Dear Shareholder:
You are cordially invited to attend our Annual Meeting of
Shareholders at 10:00 a.m. on Wednesday, April 21,
2010, at the TSYS Riverfront Campus Auditorium, One TSYS Way,
Columbus, Georgia. Enclosed with this Proxy Statement are your
proxy card and the 2009 Annual Report.
We hope that you will be able to be with us and let us give you
a review of 2009. If you are unable to attend the meeting, you
can listen to it live and view the slide presentation over the
Internet. You can access the meeting by going to our website at
www.tsys.com. Additionally, we will maintain copies of the
slides and audio of the presentation to the 2010 Annual Meeting
on our website for reference after the meeting.
Your vote is important. Please vote as soon as possible even if
you plan to attend the meeting.
Thank you for your interest in TSYS.
Sincerely yours,
Philip W. Tomlinson
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Total System
Services, Inc.
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Post Office
Box 2506
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Columbus,
Georgia
31902-2506
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TOTAL
SYSTEM SERVICES,
INC.®
NOTICE OF THE 2010 ANNUAL
MEETING OF SHAREHOLDERS
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TIME |
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10:00 a.m.
Wednesday, April 21, 2010 |
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PLACE |
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TSYS Riverfront Campus Auditorium
One TSYS Way
Columbus, Georgia 31901 |
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ITEMS OF BUSINESS |
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(1) To elect seven directors to serve until the next Annual
Meeting of Shareholders.
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(2) To ratify the appointment of KPMG LLP as TSYS
independent auditor for the year 2010.
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(3) To transact such other business as may properly come
before the meeting and any adjournment thereof.
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WHO MAY VOTE |
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You can vote if you were a shareholder of record on February 11,
2010. |
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ANNUAL REPORT |
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A copy of the Annual Report is enclosed. |
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PROXY VOTING |
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Your vote is important. Please vote in one of these ways: |
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(1) Use the toll-free telephone number shown on your proxy
card;
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(2) Visit the website listed on your proxy card;
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(3) Mark, sign, date and promptly return the enclosed proxy
card in the postage-paid envelope provided; or
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(4) Submit a ballot at the Annual Meeting.
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By order of the Board of Directors,
G. Sanders Griffith, III
Secretary
Columbus, Georgia
March 19, 2010
YOUR VOTE IS IMPORTANT. WHETHER OR NOT YOU PLAN TO ATTEND THE
ANNUAL MEETING, PLEASE VOTE YOUR SHARES PROMPTLY.
TABLE OF
CONTENTS
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A-1
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PROXY
STATEMENT
VOTING INFORMATION
Purpose
This Proxy Statement and the accompanying proxy card are being
mailed to TSYS shareholders beginning on or about March 19,
2010. The TSYS Board of Directors is soliciting proxies to be
used at the 2010 Annual Meeting of TSYS Shareholders which will
be held on April 21, 2010, at 10:00 a.m., at the TSYS
Riverfront Campus Auditorium, One TSYS Way, Columbus, Georgia.
Proxies are solicited to give all shareholders of record an
opportunity to vote on matters to be presented at the Annual
Meeting. In the following pages of this Proxy Statement, you
will find information on matters to be voted upon at the Annual
Meeting of Shareholders or any adjournment of that meeting.
Who
Can Vote
You are entitled to vote if you were a shareholder of record of
TSYS stock as of the close of business on February 11,
2010, the record date. Your shares can be voted at the meeting
only if you are present or represented by a valid proxy.
Quorum
and Shares Outstanding
A majority of the outstanding shares of TSYS stock must be
present, either in person or represented by proxy, in order to
conduct the Annual Meeting of TSYS Shareholders. On
February 11, 2010, 197,230,902 shares of TSYS stock
were outstanding.
Proxies
The Board has designated two individuals to serve as proxies to
vote the shares represented by proxies at the Annual Meeting of
Shareholders. If you properly submit a proxy card or submit a
proxy by telephone or via the Internet but do not specify how
you want your shares to be voted, your shares will be voted by
the designated proxies: (1) FOR the election of all of the
director nominees; and (2) FOR the ratification of the
appointment of KPMG LLP as TSYS independent auditor for
the year 2010. The designated proxies will vote in their
discretion on any other matter that may properly come before the
Annual Meeting. At this time, we are unaware of any matters,
other than as set forth above, that may properly come before the
Annual Meeting.
Voting
of Shares
Each share of TSYS stock represented at the Annual Meeting is
entitled to one vote on each matter properly brought before the
meeting. All shares entitled to vote and represented in person
or by valid proxies received by phone, Internet or mail will be
voted at the Annual Meeting in accordance with the instructions
indicated on those proxies.
TSYS Dividend Reinvestment and Direct Stock Purchase
Plan: If you participate in this Plan, your proxy
card represents shares held in the Plan, as well as shares you
hold in certificate form registered in the same name.
Required
Votes
To be elected, directors must receive a majority of the votes
cast (the number of shares voted for a director
nominee must exceed the number of votes cast against
that nominee).
The affirmative vote of a majority of the votes cast is also
needed to ratify the appointment of KPMG LLP as TSYS
independent auditor for 2010.
Abstentions
and Broker Non-Votes
Under certain circumstances, brokers are prohibited from
exercising discretionary authority for beneficial owners who
have not provided voting instructions to the broker (a
broker non-vote). In these cases, and in cases where
the shareholder abstains from voting on a matter, those shares
will be counted for the purpose of determining if a quorum is
present, but will not be included as votes cast with respect
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to those matters. Abstentions and broker non-votes will have no
effect on the outcome of the vote to elect directors or ratify
the appointment of KPMG LLP as TSYS independent auditor.
If your shares are held by a broker on your behalf (that is, in
street name), and you do not instruct the broker as
to how to vote these shares on the ratification of the
appointment of KPMG LLP as TSYS independent auditor, the
broker may exercise its discretion to vote for or against that
proposal. If, however, you do not instruct the broker as to how
to vote your shares on the election of directors, the broker may
not exercise discretion to vote for or against this proposal.
This would be a broker non-vote and these shares
will not be counted as having been voted on the election of
directors. Please note that this year the rules that guide
how brokers vote your shares have changed. Brokers may no longer
vote your shares on the election of directors in the absence of
your specific instructions as to how to vote. Please vote your
proxy so your vote can be counted.
How
You Can Vote
If you hold shares in your own name, you may vote by
proxy or in person at the meeting. To vote by proxy, you may
select one of the following options:
Vote By
Telephone:
You can vote your shares by telephone until 11:59 p.m.
Eastern Time on April 20, 2010 by calling the toll-free
telephone number (at no cost to you) shown on your proxy card.
Telephone voting is available 24 hours a day, seven days a
week.
Easy-to-follow
voice prompts allow you to vote your shares and confirm that
your instructions have been properly recorded. Our telephone
voting procedures are designed to authenticate the shareholder
by using individual control numbers. If you vote by telephone,
you do NOT need to return your proxy card.
Vote By
Internet:
You can also choose to vote on the Internet until
11:59 p.m. Eastern Time on April 20, 2010. The website
for Internet voting is shown on your proxy card. Internet voting
is available 24 hours a day, seven days a week. You will be
given the opportunity to confirm that your instructions have
been properly recorded, and you can consent to view future proxy
statements and annual reports on the Internet instead of
receiving them in the mail. If you vote on the Internet, you do
NOT need to return your proxy card.
Vote By
Mail:
If you choose to vote by mail, simply mark your proxy card, date
and sign it, and return it in the postage-paid envelope provided.
If your shares are held in the name of a bank, broker or
other nominee, you will receive instructions from the holder
of record that you must follow for your shares to be voted.
Please follow their instructions carefully. Also, please note
that if the holder of record of your shares is a broker, bank or
other nominee and you wish to vote in person at the Annual
Meeting, you must request a legal proxy from your bank, broker
or other nominee that holds your shares and present that proxy
and proof of identification at the Annual Meeting.
Revocation
of Proxy
If you vote by proxy, you may revoke that proxy at any time
before it is voted at the Annual Meeting. You may do this by:
(1) signing another proxy card with a later date and
returning it to us prior to the Annual Meeting; (2) voting
again by telephone or on the Internet before 11:59 p.m.
Eastern Time on April 20, 2010; or (3) attending the
Annual Meeting in person and casting a ballot.
If your TSYS shares are held by a bank, broker or other nominee,
you must follow the instructions provided by the bank, broker or
other nominee if you wish to change your vote.
Attending
the Annual Meeting
The Annual Meeting will be held on Wednesday, April 21,
2010 at the TSYS Riverfront Campus Auditorium, One TSYS Way,
Columbus, Georgia. Directions to the auditorium can be obtained
from the Investor Relations page of TSYS website at
www.tsys.com.
2
Important
Information Regarding Delivery of Proxy Materials
Notice
and Access
The Securities and Exchange Commission (SEC) has
adopted amendments to the proxy rules that change how companies
must provide proxy materials. These rules are often referred to
as notice and access. Under the notice and access
model, a company may select either of the following two options
for making proxy materials available to shareholders:
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the full set delivery option; or
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the notice only option.
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A company may use a single method for all its shareholders, or
use full set delivery for some while adopting the notice only
option for others which is sometimes referred to as the hybrid
model.
Full
Set Delivery Option
Under the full set delivery option, a company delivers all proxy
materials to its shareholders as it would have done prior to the
change in the rules. This can be by mail or, if a shareholder
has previously agreed, by
e-mail. In
addition to delivering proxy materials to shareholders,
companies must post all proxy materials on a publicly-accessible
website and provide information to shareholders about how to
access that website.
In connection with its 2008, 2009 and 2010 Annual Meetings of
Shareholders, TSYS elected to use the full set delivery option.
Accordingly, you should have received TSYS 2010 proxy
materials by mail or, if you previously agreed, by
e-mail.
These proxy materials include the Proxy Statement, proxy card
and 2009 Annual Report. Additionally, TSYS has posted these
materials at
http://annualreport.tsys.com.
Notice
Only Option
Under the notice only option, a company must post all its proxy
materials on a publicly accessible website. However, instead of
delivering its proxy materials to shareholders, the company
instead delivers a Notice of Internet Availability of
Proxy Materials. The notice includes, among other matters:
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information regarding the date and time of the meeting of
shareholders as well as the items to be considered at the
meeting;
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information regarding the website where the proxy materials are
posted; and
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various means by which a shareholder can request paper or
e-mail
copies of the proxy materials.
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If a shareholder requests paper copies of the proxy materials,
these materials must be sent to the shareholder within three
business days. Additionally, paper copies must be sent via first
class mail.
TSYS
Use of the Notice Only Option in the Future
Although TSYS has previously elected to use the full set
delivery option, we may choose to use the notice only option in
the future. By reducing the amount of materials that a company
needs to print and mail, the notice only option provides an
opportunity for cost savings as well as conservation of natural
resources. However, many companies that have used the notice
only option have also experienced a lower participation
rate meaning that fewer shareholders voted at these
companies annual meetings. TSYS plans to continue to
evaluate the future possible cost savings as well as the
possible impact on shareholder participation as it considers
future use of the notice only option.
Important
Notice Regarding the Availability of Proxy Materials for the
Shareholder
Meeting to be held on April 21, 2010
The Proxy Statement and Annual Report to security holders are
available on our website at
http://annualreport.tsys.com.
3
CORPORATE
GOVERNANCE AND BOARD MATTERS
Corporate
Governance Philosophy
The business affairs of TSYS are managed under the direction of
the Board of Directors in accordance with the Georgia Business
Corporation Code, as implemented by TSYS Articles of
Incorporation and bylaws. The role of the Board of Directors is
to effectively govern the affairs of TSYS for the benefit of its
shareholders and other constituencies. The Board strives to
ensure the success and continuity of business through the
election and oversight of qualified management. It is also
responsible for providing oversight to ensure that TSYS
activities are conducted in a responsible and ethical manner.
The Board is committed to having sound corporate governance
principles.
Independence
The listing standards of the New York Stock Exchange
(NYSE) provide that a director does not qualify as
independent unless the Board of Directors affirmatively
determines that the director has no direct or indirect material
relationship with TSYS. The Board has established guidelines for
independence to assist it in determining director independence
which conform to the independence requirements in the NYSE
listing standards. These guidelines are set forth in our
Corporate Governance Guidelines, are attached as Appendix A
to this Proxy Statement and are also available in the Corporate
Governance Section of our website at www.tsys.com, under
Investor Relations then Corporate
Governance. In addition to applying these guidelines, the
Board considers all relevant facts and circumstances in making
an independence determination.
The Board has determined that a majority of its members are
independent as defined by the listing standards of the NYSE and
meet the guidelines for independence set by the Board.
TSYS Board has determined that the following directors are
independent: Richard Y. Bradley, Kriss Cloninger III, Walter W.
Driver, Jr., Sidney E. Harris, Mason H. Lampton, W. Walter
Miller, Jr., H. Lynn Page, John T. Turner, Richard W.
Ussery, James D. Yancey and Rebecca K. Yarbrough. Please see
Certain Relationships and Related Transactions on
page 41 which includes information with respect to
immaterial relationships between TSYS and its independent
directors. This information was considered by the Board in
determining a directors independence from TSYS under
TSYS guidelines for independence and NYSE listing
standards.
Attendance
at Meetings
The Board of Directors held six meetings in 2009. All directors
attended at least 75% of Board and committee meetings held
during their tenure during 2009. The average attendance by
directors at the aggregate number of Board and committee
meetings they were scheduled to attend was 97%. Although TSYS
has no formal policy with respect to Board members
attendance at its annual meetings, it is customary for all Board
members to attend as there is a Board meeting immediately
preceding the annual meeting. All of our current directors
attended the 2009 Annual Meeting of Shareholders.
4
Committees
of the Board
TSYS Board of Directors has four principal standing
committees an Audit Committee, a Corporate
Governance and Nominating Committee, a Compensation Committee
and an Executive Committee. Each committee has a written charter
adopted by the Board of Directors that complies with the listing
standards of the NYSE pertaining to corporate governance. Copies
of the committee charters are available in the Corporate
Governance section of our website at www.tsys.com, under
Investor Relations then Corporate
Governance. The Board has determined that each member of
the Audit, Corporate Governance and Nominating and Compensation
Committees is an independent director as defined by the listing
standards of the NYSE and our Corporate Governance Guidelines.
The following table shows the membership of the various
committees.
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Corporate Governance
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Name
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Audit
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Compensation
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and Nominating
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Executive
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James H. Blanchard
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Chair
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Richard Y. Bradley
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Chair
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Kriss Cloninger III
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Walter W. Driver, Jr.
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Gardiner W. Garrard, Jr.
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Sidney E. Harris
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Mason H. Lampton
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Chair
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W. Walter Miller, Jr.
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H. Lynn Page
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Chair
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Philip W. Tomlinson
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John T. Turner
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M. Troy Woods
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James D. Yancey
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Rebecca K. Yarbrough
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Number of Committee Meetings Held in 2009
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8
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8
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6
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Executive Committee. During the intervals
between meetings of TSYS Board of Directors, the Executive
Committee possesses and may exercise any and all of the powers
of the Board of Directors in the management and direction of the
business and affairs of TSYS with respect to which specific
direction has not been previously given by the Board of
Directors unless Board action is required by TSYS
governing documents, law or rule.
Audit Committee. The Report of the Audit
Committee is on page 20. The Board has determined that all
members of the Committee are independent under the rules of the
NYSE and the SEC, financially literate under the rules of the
NYSE and that at least one member, H. Lynn Page, is an
audit committee financial expert as defined by the
rules of the SEC. The primary functions of the Audit Committee
include:
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Monitoring the integrity of TSYS financial statements,
TSYS systems of internal controls and TSYS
compliance with regulatory and legal requirements;
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Monitoring the independence, qualifications and performance of
TSYS independent auditor and internal auditing activities;
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Providing an avenue of communication among the independent
auditor, management, internal audit and the Board of
Directors; and
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Monitoring the effectiveness of managements enterprise
risk management process that monitors and manages key business
risks facing TSYS.
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5
Corporate Governance and Nominating
Committee. The primary functions of the Corporate
Governance and Nominating Committee include:
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Identifying qualified individuals to become Board members;
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Recommending to the Board the director nominees for each annual
meeting of shareholders and director nominees to be elected by
the Board to fill interim director vacancies;
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Overseeing the annual review and evaluation of the performance
of the Board and its committees; and
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Developing and recommending to the Board corporate governance
guidelines.
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Compensation Committee. The Report of the
Compensation Committee is on page 32. The primary functions
of the Compensation Committee include:
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Establishing the overall corporate philosophy for TSYS
executive compensation and benefit plans and programs, including
salary structure, short-term incentives and long-term
incentives, and making recommendations regarding changes in
compensation and benefit plans and programs consistent with
TSYS business needs, its pay philosophy, market trends and
legal and regulatory considerations;
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Designing and overseeing all compensation and benefit plans and
programs in which employees of TSYS are eligible to
participate; and
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Determining the compensation of the Chief Executive Officer and
completing an annual performance evaluation of the Chief
Executive Officer, including the review and approval of
performance measures and objectives relevant to the Chief
Executive Officers compensation.
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The Compensation Committees charter reflects these
responsibilities and, except to the extent prohibited by NYSE
rules or other applicable law or regulation, allows the
Committee to delegate any matters within its power and
responsibility to individuals or subcommittees when it deems
appropriate. In addition, the Committee has the authority under
its charter to retain outside advisors to assist the Committee
in its deliberations regarding executive compensation. The
Committee engaged Hewitt Associates in January 2009 to provide
recommendations regarding executive compensation consistent with
TSYS business needs, pay philosophy, market trends and
legal and regulatory considerations, to provide market data in
connection with decisions regarding Chief Executive Officer and
other executive officer base salary, short-term and long-term
incentive compensation and to advise the Committee as to best
practices.
In September 2009, the Committee engaged Watson Wyatt, now known
as Towers Watson, to replace Hewitt Associates as its executive
compensation consultant. Towers Watson was engaged by the
Committee to review and make recommendations on the executive
compensation benchmarking peer group, to provide an executive
compensation benchmarking review and to provide design
considerations for changes in the executive incentive
compensation program.
In 2009, TSYS paid Hewitt Associates $142,136 for executive
compensation consulting services. In addition, TSYS management
engaged a separate unit of Hewitt Associates to provide services
related to TSYS group health plans and the TSYS Medical
Benefits Trust (collectively the VEBA Services).
Hewitt Associates received $152,144 for providing VEBA Services,
$51,037 of which was paid by TSYS and $101,107 of which was paid
by the Trust. The engagement of Hewitt Associates to provide
VEBA Services was not approved by the Committee. The Committee
recognizes that it is essential to receive objective advice from
its executive compensation consultant. In an effort to eliminate
any perception that the advice received from its executive
compensation consultant is not independent, in January 2010 the
Committee implemented a pre-approval policy that requires the
approval of the Committee before TSYS management can engage the
executive compensation consultant for the Committee to provide
additional services, other than the purchase of national and
international compensation surveys for fees which do not exceed
$25,000 in any fiscal year.
Hewitt Associates and Towers Watson were engaged directly by the
Committee, although the Committee directed that both Hewitt
Associates and Towers Watson continue to work with TSYS
management on executive compensation issues. TSYS
Executive Vice President of Administrative Services and his
staff develop executive compensation recommendations for the
Committees consideration in
6
conjunction with TSYS Chief Executive Officer and with the
advice of the executive compensation consultant. The Committee
reviews and discusses these recommendations with our Chief
Executive Officer and, exercising its discretion, makes the
final decision with respect to the compensation of our executive
officers. The Chief Executive Officer has no role in setting his
own compensation. During 2009, TSYS Chief Executive
Officer attended most of the Committee meetings but does not
have authority to vote on Committee matters. At the request of
the Committee, the executive compensation consultant attended
most of the Committee meetings held in 2009.
Additional information regarding TSYS processes and
procedures for the consideration and determination of executive
compensation can be found under Compensation Discussion
and Analysis on page 22.
Director
Qualifications and Nominating Process
The Corporate Governance and Nominating Committee makes
recommendations to the Board of Directors regarding the size and
composition of the Board. The Committee reviews annually with
the Board the composition of the Board as a whole and
recommends, if necessary, measures to be taken so that the Board
reflects the appropriate balance of diversity of background,
perspective and experience required for the Board as a whole and
contains at least the minimum number of independent directors
required by NYSE listing standards. The Committee is responsible
for ensuring that the composition of the Board accurately
reflects the needs of TSYS business and, in furtherance of
this goal, proposing the addition of members or not renominating
members for purposes of obtaining the appropriate members and
skills.
Our Corporate Governance Guidelines contain Board membership
criteria considered by the Committee in recommending nominees
for a position on TSYS Board. The Committee believes that,
at a minimum, a director candidate must possess the personal
qualities of personal and professional integrity, sound judgment
and forthrightness. A director candidate must also have
sufficient time and energy to devote to the affairs of TSYS, be
free from conflicts of interest with TSYS, possess a willingness
to challenge and stimulate management and the ability to work as
part of a team in an environment of trust, and be willing to
make, and financially capable of making, the required investment
in TSYS stock pursuant to our Director Stock Ownership
Guidelines. In addition to possessing the foregoing personal
qualities, the Committee believes that a director candidate
should possess a sufficient mix of independence and experience
qualities and thus considers the following criteria when
reviewing a director candidate:
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The extent of the directors/potential directors
business, educational, governmental, non-profit or professional
acumen and experience;
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Whether the director/potential director assists in achieving a
mix of Board members that represents a diversity of background,
perspective and experience, including with respect to age,
gender, race, place of residence and specialized experience;
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Whether the director/potential director meets the independence
requirements of the listing standards of the NYSE (where
independence is desired);
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Whether the director/potential director has the financial acumen
or other professional or business experience relevant to an
understanding of TSYS business; and
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Whether the director/potential director, by virtue of particular
technical expertise, experience or specialized skill relevant to
TSYS current or future business, will add specific value
as a Board member.
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In addition, in accordance with our Corporate Governance
Guidelines, no person 75 years or older is eligible for
election as a member of the Board.
The Committee has two primary methods for identifying director
candidates (other than those proposed by TSYS
shareholders, as discussed below). First, on a periodic basis,
the Committee solicits ideas for possible candidates from a
number of sources including members of the Board, TSYS
executives and individuals personally known to the members of
the Board. Second, the Committee may, from time to time, use its
authority under its charter to retain at TSYS expense one
or more search firms to identify candidates (and to approve such
firms fees and other retention terms).
7
In considering candidates for director nominee, the Committee
generally assembles all information regarding a candidates
background and qualifications, evaluates a candidates mix
of skills and qualifications and determines the contribution the
candidate could be expected to make to the overall functioning
of the Board, giving due consideration to the overall Board
balance of diversity of perspectives, background and
experiences. Although the Committee does not have a separate
policy with respect to the consideration of diversity in
selecting director nominees, one of the criteria considered by
the Committee in evaluating a director or a director candidate
is whether the person assists in achieving a mix of Board
members that represents a diversity of background, perspective
and experience, including with respect to age, gender, race,
place of residence and specialized experience as set forth
above. When the Committee meets to discuss director nominees,
diversity forms part of its considerations. With respect to
current directors, the Committee also considers past attendance
at meetings and assesses participation in and contributions to
the activities of the Board.
Director candidates are evaluated at regular or special meetings
of the Committee and may be considered at any point during the
year. If based on the Committees initial evaluation a
director candidate continues to be of interest to the Committee,
the Chair of the Committee will interview the candidate and
communicate his evaluation to the other Committee members and
executive management. Additional interviews are conducted, if
necessary, and ultimately the Committee will meet to finalize
its list of recommended candidates for the Boards
consideration.
The Committee will consider candidates for nomination as a
director submitted by shareholders. Although the Committee does
not have a separate policy that addresses the consideration of
director candidates recommended by shareholders, the Board does
not believe that such a separate policy is necessary as our
bylaws permit shareholders to nominate candidates and as one of
the duties set forth in the Corporate Governance and Nominating
Committee charter is to review and consider director candidates
submitted by shareholders. The Committees evaluation
process does not vary based upon whether a candidate is
recommended by a shareholder; provided, however, the procedural
requirements set forth in our bylaws and the procedures
described under Shareholder Proposals and
Nominations on page 44 must be met.
Meetings
of Non-Management and Independent Directors
The non-management directors meet separately at least four times
a year after each regularly scheduled meeting of the Board of
Directors. The independent directors meet at least once a year.
Richard Y. Bradley, the Lead Director, presides at the
meetings of non-management and independent directors.
Communicating
with the Board
The Board provides a process for shareholders and other
interested parties to communicate with one or more members of
the Board, including the Lead Director, or the non-management or
independent directors as a group. Shareholders and other
interested parties may communicate with the Board by writing the
Board of Directors, Total System Services, Inc.,
c/o General
Counsels Office, One TSYS Way, Columbus, Georgia 31901 or
by calling
(888) 467-2881.
These procedures are also available in the Corporate Governance
section of our website at www.tsys.com, under Investor
Relations then Corporate Governance. The
process for handling shareholder and other communications to the
Board has been approved by TSYS independent directors.
Additional
Information about Corporate Governance
TSYS has adopted Corporate Governance Guidelines which are
regularly reviewed by the Corporate Governance and Nominating
Committee. We have also adopted a Code of Business Conduct and
Ethics which is applicable to all directors, officers and
employees. In addition, we maintain procedures for the
confidential, anonymous submission of any complaints or concerns
about TSYS, including complaints regarding accounting, internal
accounting controls or auditing matters. Shareholders may access
the Corporate Governance Guidelines, Code of Business Conduct
and Ethics, each committees current charter, procedures
for shareholders and other interested parties to communicate
with the Lead Director or with the non-management or independent
directors individually or as a group and procedures for
reporting complaints and concerns about TSYS, including
complaints concerning accounting, internal accounting controls
and auditing matters in the Corporate Governance section of our
website at www.tsys.com, under Investor Relations
then Corporate Governance.
8
Board
Leadership Structure and Risk Oversight
Philip W. Tomlinson has served as Chairman of the Board and
Chief Executive Officer of TSYS since 2006 and has served in
various capacities with TSYS since its inception in 1982,
including Chief Executive Officer and President. We believe that
having one person serve as both Chairman of the Board and Chief
Executive Officer is appropriate at the present time as it
demonstrates to our employees, customers, investors and the
industry that TSYS operates under strong, seasoned and singular
leadership. We further believe that having Mr. Tomlinson
serve in a combined Chairman and Chief Executive Officer role
helps provide strong unified leadership for our management team
and the Board of Directors. Accordingly, we believe that having
one person serve as Chairman of the Board and Chief Executive
Officer, coupled with an independent Lead Director, is best for
TSYS and our shareholders at this time.
Our bylaws and Corporate Governance Guidelines provide the Board
with the flexibility to change the structure of the Chairman and
Chief Executive Officer positions as and when appropriate. In
addition, since 2003, our Corporate Governance Guidelines have
required the election by the independent directors of an
independent Lead Director to serve during any period when there
is no independent Chairman of the Board in order to ensure that
there is effective oversight by an independent board.
Richard Y. Bradley currently serves as our Lead Director.
Under our Corporate Governance Guidelines, the Lead Director is
responsible for: (a) providing leadership to ensure the
Board works in an independent, cohesive fashion;
(b) working with the Chairman of the Board, Board and
Corporate Secretary to set the agenda for Board meetings;
(c) ensuring Board leadership in times of crisis;
(d) chairing Board meetings when the Chairman of the Board
is not in attendance; (e) working with the Chairman of the
Board to ensure the conduct of the Board meeting provides
adequate time for serious discussion of appropriate issues and
that appropriate information is made available to Board members
on a timely basis; and (f) developing the agenda for and
chairing executive sessions of the independent directors and
executive sessions of the non-management directors and acting as
liaison between the independent directors and the Chairman of
the Board on matters raised in these sessions. Our Corporate
Governance Guidelines provide that non-management directors will
meet in executive session at least four times a year and that
our independent directors will meet in executive session at
least once a year. As noted above, our Lead Director chairs
these executive sessions which allow the Board to review key
decisions and to discuss matters in a manner that is independent
of the Chief Executive Officer, and where necessary, critical of
the Chief Executive Officer and senior management.
Additionally, as discussed under Committees of the
Board above, our Board has four standing
committees an Audit Committee, Corporate Governance
and Nominating Committee, Compensation Committee and Executive
Committee. In accordance with NYSE listing standards, the Audit
Committee, Corporate Governance and Nominating Committee and
Compensation Committee are each comprised solely of independent
directors and each has a separate chair. Our Executive Committee
is comprised of a majority of independent directors.
Our Audit Committee is primarily responsible for overseeing
TSYS risk management processes on behalf of the full
Board. The Audit Committee receives reports at least quarterly
from TSYS Enterprise Risk Officer regarding risks facing
TSYS. While the Audit Committee has primary responsibility for
overseeing risk management, under our Corporate Governance
Guidelines the full Board has retained authority for providing
oversight of our risk management processes and is actively
involved in overseeing risk management for TSYS. For example,
TSYS Enterprise Risk Officer presents a report to the full
Board on an annual basis and the Board discusses the most
significant risks that TSYS is facing. The Board also receives
reports regularly from the Audit Committee regarding its
oversight of risk. In addition, our Compensation Committee
considers the risks that may be implicated by our executive
compensation programs and our Corporate Governance and
Nominating Committee considers the risks within its area of
responsibility, which considerations are reported to the Board
through reports by the committee chairs. While the Board
oversees TSYS risk management, management is responsible
for
day-to-day
risk management processes. We believe this division of
responsibilities is the most effective approach for addressing
the risks facing TSYS and that the leadership structure of our
Board supports the Boards effective oversight of
TSYS risk management, particularly through the efforts of
our Audit Committee.
We have determined that the current leadership structure of our
Board under which our Chief Executive Officer serves as
Chairman, our Lead Director assumes specified responsibilities
on behalf of our independent and non-management directors and
three of our four standing committee chairs are independent is
the appropriate Board leadership structure for TSYS at this time.
9
DIRECTOR
COMPENSATION
Director
Compensation Program
The Corporate Governance and Nominating Committee is responsible
for the oversight and administration of the director
compensation program. TSYS does not pay management directors for
Board service in addition to their regular employee
compensation. As part of its review of director compensation,
the Committee periodically engages an outside consultant to
report on director compensation practices and levels, the most
recent of which was the engagement by the Committee of Mercer
Human Resources Consulting in 2006. The Committee generally
reviews benchmarking assessments every two years and recommends
any changes in director compensation to the Board for its
approval, although the Committee determined not to take any
action in 2009 or 2010 in light of current economic conditions
that impact TSYS business. The current compensation
program for non-employee directors has generally been in effect
since 2007 and is designed to achieve the following goals:
compensation should fairly pay directors for work required for a
company of TSYS size; compensation should align
directors interests with the long-term interests of
shareholders; and the structure of the compensation should be
simple, transparent and easy for shareholders to understand.
Cash Compensation of Directors. As reflected
in the Fees Earned or Paid in Cash column of the
Director Compensation Table below, for the fiscal year ended
December 31, 2009, non-employee directors received an
annual cash retainer of $40,000, with Compensation Committee and
Executive Committee members receiving an additional cash
retainer of $10,000, Corporate Governance and Nominating
Committee members receiving an additional cash retainer of
$7,500 and Audit Committee members receiving an additional cash
retainer of $15,000. In addition, the Chairperson of the
Corporate Governance and Nominating Committee received a $7,500
cash retainer, the Chairperson of the Compensation Committee
received a $10,000 cash retainer, the Chairperson of the Audit
Committee received a $15,000 cash retainer, the Chairperson of
the Executive Committee received a $7,500 cash retainer (which
amount represents the pro rata portion of a $15,000 retainer
which will be paid in subsequent years) and the Lead Director
received a $5,000 cash retainer.
By paying non-employee directors annual retainers for Board and
Committee service, each director is compensated for his or her
role and judgment as an advisor to TSYS, rather than for his or
her attendance or effort at individual meetings. In so doing,
directors with added responsibility are recognized with higher
cash compensation. For example, members of the Audit Committee
receive a higher cash retainer based upon the enhanced duties,
time commitment and responsibilities of service on that
committee. The Corporate Governance and Nominating Committee
believes that this additional cash compensation is appropriate.
In addition, directors may from time to time receive
compensation for serving on special committees of the TSYS Board.
Deferral Program. Non-employee directors may
elect to defer all or a portion of their cash compensation under
the Directors Deferred Compensation Plan. The
Directors Deferred Compensation Plan does not provide
directors with an above market rate of return.
Instead, the deferred amounts are deposited into one or more
investment funds at the election of the director. In so doing,
the plan is designed to allow directors to defer the income
taxation of a portion of their compensation and to receive an
investment return on those deferred amounts. All deferred fees
are payable only in cash. Mr. Harris deferred a portion of
his cash compensation under this plan during 2009.
Equity Compensation of Directors. During 2009,
non-employee directors also received an annual award of
500 shares of restricted TSYS stock, 100% of which vests
after three years. The Board granted these restricted stock
awards to directors on February 11, 2009. These restricted
stock awards are designed to create equity ownership and to
focus directors on the long-term performance of TSYS.
The Director Stock Purchase Plan is a non-qualified,
contributory stock purchase plan pursuant to which directors can
purchase, with the assistance of contributions from TSYS,
presently issued and outstanding shares of TSYS stock. Under the
terms of the Director Stock Purchase Plan, directors can elect
to contribute up to $5,000 per calendar quarter to make
purchases of TSYS stock, and TSYS contributes an additional
amount equal to 15% (50% prior to July 2009) of the
directors cash contributions. Participants in
10
the Director Stock Purchase Plan are fully vested in, and may
request the issuance to them of, all shares of TSYS stock
purchased for their benefit under the Plan. TSYS
contributions under this Plan are included in the All
Other Compensation column of the Director Compensation
Table below. TSYS contributions under the Director Stock
Purchase Plan further provide directors the opportunity to buy
and maintain an equity interest in TSYS and to share in the
capital appreciation of TSYS.
Stock Ownership Guidelines. The restricted
stock awards to non-employee directors and TSYS
contributions under the Director Stock Purchase Plan also assist
and facilitate directors fulfillment of their stock
ownership requirements. TSYS Corporate Governance
Guidelines require all directors to accumulate over time shares
of TSYS stock equal in value to at least three times the value
of their annual retainer for Board service. Directors have five
years to attain this level of total stock ownership but must
attain a share ownership threshold of one times the amount of
the directors annual retainer within three years. These
stock ownership guidelines are designed to align the interests
of TSYS directors to that of TSYS shareholders and
the long-term performance of TSYS. As of December 31, 2009,
each director had satisfied these ownership guidelines.
Meeting Expenses. TSYS reimburses Board
members for expenses incurred in attending Board and committee
meetings and for attending director continuing educational
programs in their capacities as directors. Such expenses include
food, lodging and transportation.
The following table summarizes the compensation paid to
non-employee directors for the year ended December 31, 2009.
DIRECTOR
COMPENSATION TABLE
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Fees Earned or
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All Other
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Paid in Cash
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Stock Awards
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Compensation
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Total
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Name
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($)
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($)(1)
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($)(2)
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($)
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Richard E. Anthony
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$
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40,000
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$
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6,550
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$
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6,500
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$
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53,050
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James H. Blanchard
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57,500
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6,550
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64,050
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Richard Y. Bradley
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70,000
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6,550
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76,550
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Kriss Cloninger III
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60,000
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6,550
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6,500
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73,050
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Walter W. Driver, Jr.
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50,000
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6,550
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5,000
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61,550
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Gardiner W. Garrard, Jr.
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50,000
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6,550
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56,550
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Sidney E. Harris
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55,000
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6,550
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2,875
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64,425
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Alfred W. Jones III(3)
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40,000
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6,550
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5,000
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51,550
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Mason H. Lampton
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70,000
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6,550
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76,550
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W. Walter Miller, Jr.
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47,500
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6,550
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54,050
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H. Lynn Page
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80,000
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6,550
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86,550
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John T. Turner
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55,000
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6,550
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61,550
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Richard W. Ussery
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40,000
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6,550
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5,750
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52,300
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James D. Yancey
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57,500
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6,550
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5,750
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69,800
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Rebecca K. Yarbrough
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47,500
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6,550
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54,050
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(1)
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This column represents the
aggregate grant date fair value of the 500 shares of
restricted stock awarded to directors in 2009 calculated in
accordance with FASB ASC Topic 718. The fair values of the
awards granted on February 11, 2009 were calculated using
the closing stock price on February 11, 2009 of $13.10. For
a discussion of the assumptions used in calculating the values
of the restricted stock awards reported in this column, see
Note 16 of Notes to Consolidated Financial Statements in
TSYS Annual Report for the year ended December 31,
2009. At December 31, 2009, Mr. Anthony held
1,000 shares of restricted TSYS stock and the other
directors each held 1,500 shares of restricted TSYS stock.
Dividends are paid on the shares of restricted stock.
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(2)
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Includes $6,500 in contributions
made by TSYS under TSYS Director Stock Purchase Plan for
Messrs. Anthony and Cloninger, $5,750 for
Messrs. Ussery and Yancey, $5,000 for Messrs. Driver
and Jones and $2,875 for Mr. Harris. As described more
fully above, directors can elect to contribute up to $5,000 per
calendar quarter to make purchases of TSYS stock, and TSYS
contributes an additional amount equal to 15% of the
directors cash contributions under the plan.
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(3)
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Mr. Jones resigned as a
director during 2009.
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11
PROPOSALS TO
BE VOTED ON
PROPOSAL 1:
ELECTION OF DIRECTORS
General
Information
At the date of this Proxy Statement, the Board of Directors
consists of 16 members. Our directors determine the size of the
Board and for purposes of the Annual Meeting, the number is
fixed at 16. At the 2009 Annual Meeting the shareholders
approved an amendment to TSYS Articles of Incorporation to
phase out the three-year staggered terms of our directors and to
provide instead for the annual election of all directors. Prior
to the amendment, directors were elected to staggered three-year
terms with approximately one-third of the directors standing for
election each year. The amended Articles of Incorporation now
provide that directors will be elected to one-year terms of
office as the three-year terms expire at the 2010, 2011 and 2012
Annual Meetings. Accordingly, nominees elected for the
directorships at the 2010 Annual Meeting will have terms
expiring at the 2011 Annual Meeting. Other directors are not up
for election this year and will continue in office for the
remainder of their terms, at which time they (or their
respective successors) will stand for election for a one-year
term.
In October 2008, the Board of Directors amended our bylaws to
adopt a majority vote standard for uncontested director
elections. Under this standard, a nominee for director will be
elected to the Board if the votes cast for the nominee exceed
the votes cast against the nominee. However, directors will be
elected by a plurality of the votes cast in a contested election.
All director nominees identified below are currently serving on
the Board. If shareholders do not elect a nominee who is serving
as a director, Georgia law provides that the director would
continue to serve on the Board as a hold over
director. Under our Corporate Governance Guidelines, an
incumbent director that is not elected is expected to tender,
promptly following certification of the voting results, his or
her resignation from the Board, which resignation may be
conditioned on Board acceptance of the resignation. In addition,
our Corporate Governance Guidelines provide that the Board will
nominate for election and appoint to Board vacancies only those
candidates who have agreed to tender, promptly following the
failure to receive the required vote for election to the Board,
an irrevocable resignation that will be effective upon Board
acceptance of the resignation.
The Corporate Governance and Nominating Committee will consider
the tendered resignation and recommend to the Board whether to
accept or reject the resignation. The Board will act on the
tendered resignation within 90 days from the certification
of the voting results and promptly publicly disclose its
decision. A director who tenders his or her resignation will not
participate in the Committees recommendation or the Board
action regarding whether to accept or reject the tendered
resignation.
Nominees
The following nominees have been selected by the Corporate
Governance and Nominating Committee and approved by the Board
for submission to the shareholders: Richard E. Anthony, Sidney
E. Harris, Mason H. Lampton, John T. Turner, M. Troy Woods,
James D. Yancey and Rebecca K. Yarbrough, each to serve a
one-year term expiring at the 2011 Annual Meeting.
The Board believes that each director nominee will be able to
stand for election. If any nominee becomes unable to stand for
election, proxies in favor of that nominee will be voted in
favor of any substitute nominee named by the Board upon the
recommendation of the Corporate Governance and Nominating
Committee. If you do not wish your shares voted for one or more
of the nominees, you may so indicate on the proxy.
THE BOARD
OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR ALL
NOMINEES.
Members
of the Board of Directors
The seven nominees for director were selected by the Corporate
Governance and Nominating Committee based upon a review of the
nominees and consideration of the director qualifications
described under Corporate Governance and Board
Matters Director Qualifications and Nominating
Process on page 7. The continuing directors were
reviewed by the Committee in the same manner. The Committee
evaluates each individual in the context of the Board as a whole
with the objective of recommending a group of directors that can
best perpetuate the success of TSYS business and represent
the interests of shareholders.
12
The Committee determined that each director nominee and
continuing director possesses the personal qualities of personal
and professional integrity, sound judgment and forthrightness;
has sufficient time to dedicate to the affairs of TSYS; is free
from conflicts of interest with TSYS; is able to work in a
collegial manner; and has satisfied the requirements of the
Director Stock Ownership Guidelines. In addition, 11 of the
Boards 16 members are independent as defined by NYSE
listing standards and meet the guidelines for independence set
by the Board.
The Committee also assessed the experience qualifications of
each director nominee and continuing director. To follow is
certain information with respect to each director nominee and
other directors serving unexpired terms, including information
with respect to the specific experience, qualifications or
skills that led the Board to conclude, upon the Committees
recommendation, that the person should serve as a director.
Directors who are nominees for election at the 2010 Annual
Meeting are listed first.
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Richard
E. Anthony
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Nominee
Chairman of the Board and Chief Executive Officer, Synovus
Financial Corp. Director since 2006
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Mr. Anthony, 63 years of age, has served as Chairman
of the Board and Chief Executive Officer of Synovus Financial
Corp., a financial services company (Synovus), since
October 2006. From 1995 until 2006, Mr. Anthony served in
various capacities with Synovus, including Chief Executive
Officer and President and Chief Operating Officer.
Mr. Anthony also serves as a director of Synovus. His
business experience includes service on the boards of the
Georgia Chamber of Commerce, the Business Council of Alabama,
The Economic Development Partnership of Alabama, the American
Bankers Association and membership with the Financial Services
Roundtable, the State of Georgia Economic Development Commission
and the Commission for a New Georgia. Mr. Anthony is a
graduate of the University of Alabama, with a Bachelors degree
in finance, and he earned a Masters degree in business
administration from the University of Virginia. Mr. Anthony
brings to the TSYS Board his experience in the financial
services industry, and his insights and perspectives as the
principal executive officer of a public company in the financial
services industry. As financial services companies comprise a
large portion of our customer base, Mr. Anthony provides
valuable insight to the Board on matters that impact our
customers and our company. Mr. Anthonys term of
office expires at the 2010 Annual Meeting.
Sidney E.
Harris Nominee Professor, Georgia State
University Director since 1999
Mr. Harris, 60 years of age, has served as a professor
at Georgia State University since July 1997. From 1997 until
2004, Mr. Harris served as Dean of the J. Mack Robinson
College of Business at Georgia State University. In 1987,
Mr. Harris joined the faculty of the Peter F. Drucker
Graduate School of Management at the Claremont Graduate School
and served as Dean of Drucker from 1991 until 1996. His research
has focused on strategy implementation, general management and
the strategic use of information in the strategy, structure and
culture of high performance organizations. He has lectured
internationally at several universities, and served as a member
of the board of the Society of International Business Fellows.
Mr. Harris serves as a director of the RidgeWorth Funds and
the GenSpring Growth Capital Portfolios, and has served as a
director of The ServiceMaster Company and Transamerica
Investors, Inc. Mr. Harris is a graduate of Morehouse
College and he earned a PhD in operations research at Cornell
University. Mr. Harris knowledge of best practices in
executive management, familiarity with international business
practices and expertise in corporate strategy implementation and
risk management help the TSYS Board address challenges that TSYS
encounters as it expands internationally and manages enterprise
risk. Mr. Harris term of office expires at the 2010
Annual Meeting.
|
|
Mason H.
Lampton
|
Nominee
Chairman of the Board, Standard Concrete Products
Director since 1986
|
Mr. Lampton, 62 years of age, was named Chairman of
the Board of Standard Concrete Products, a construction
materials company, in June 2004. He has owned and led Standard
Concrete Products since 1996. Prior to 1996, Mr. Lampton
was president and owner of The Hardaway Company, a construction
company. Mr. Lampton also serves as a director of Synovus.
His prior business experience also includes serving as a
director and as a member of the Audit Committee of another
public company, Citizens Fidelity Corporation. He has served as
a member of the TSYS and Synovus Audit Committees, Executive
Committees and Compensation Committees. Mr. Lampton is a
graduate of Vanderbilt University. Mr. Lamptons
skills in risk management, directing corporate strategy and
public company board expertise
13
provide the TSYS Board with valuable insights as the Board
oversees TSYS strategic development.
Mr. Lamptons term of office expires at the 2010
Annual Meeting.
John T.
Turner Nominee Private
Investor Director since 2003
Mr. Turner, 53 years of age, is a private investor and
a director of the W.C. Bradley Co., a privately held consumer
products goods company. Mr. Turner served for 20 years
in various capacities with the W.C. Bradley Co.
and/or its
subsidiaries, including President of Bradley Specialty
Retailing, Inc. Mr. Turner has for many years been actively
involved in initiatives encompassing a variety of
entrepreneurial, social and environmental interests.
Mr. Turner is a graduate of Vanderbilt University.
Mr. Turners experience in business management,
corporate strategy development, including international
business, and risk assessment provide the TSYS Board with a
valuable perspective on matters relating to TSYS strategic
growth and enterprise risk management. Mr. Turners
term of office expires at the 2010 Annual Meeting.
|
|
M. Troy
Woods
|
Nominee
President and Chief Operating Officer, Total System Services,
Inc. Director since 2003
|
Mr. Woods, 58 years of age, was elected President and
Chief Operating Officer of TSYS in December 2003. From 1987
until 2003, Mr. Woods served in various capacities with
TSYS, including Executive Vice President. Mr. Woods is a
graduate of Columbus State University, the University of
Virginias Graduate School of Retail Bank Management and
Louisiana State Universitys School of Banking of the
South. Mr. Woods business experience includes service
in the financial services industry in a variety of capacities,
including as a senior vice president of consumer lending.
Mr. Woods extensive knowledge of TSYS business,
operations and employees, risk management and negotiating
skills, as well as his extensive experience in the payment
services and financial services industries provide invaluable
resources to TSYS Board. Mr. Woods term of
office expires at the 2010 Annual Meeting.
|
|
James D.
Yancey
|
Nominee
Chairman of the Board, Columbus Bank and Trust Company;
Chairman of the Board, Retired, Synovus Financial
Corp. Director since 1982
|
Mr. Yancey, 68 years of age, retired as an executive
employee of Synovus in December 2004 and served as a
non-executive Chairman of the Board until July 2005.
Mr. Yancey was elected as an executive officer Chairman of
the Board of Synovus in October 2003. Prior to 2003,
Mr. Yancey served for over 45 years in various
capacities with Synovus
and/or its
subsidiary, Columbus Bank and Trust Company, including Vice
Chairman of the Board and President of both Synovus and Columbus
Bank and Trust Company. Mr. Yancey also serves as a
director of Synovus. His business experience includes service as
a member of the Financial Services Roundtable, the Board of
Regents of the University System of Georgia and as a director of
the Georgia Chamber of Commerce. Mr. Yancey is a graduate
of Columbus State University. Mr. Yancey provides a
valuable perspective to the TSYS Board based on his experience
in overseeing the management of a bank engaged in the credit
card business, as a large portion of TSYS customer base is
comprised of credit card issuing banks. Mr. Yanceys
term of office expires at the 2010 Annual Meeting.
Rebecca
K. Yarbrough Nominee Private
Investor Director since 1999
Mrs. Yarbrough, 72 years of age, is a private investor
who has had an interest in TSYS that developed over a period of
many years. From 1995 until 1999, Mrs. Yarbrough served on
the board of directors of Universal Bank, N.A., the former
credit card bank that was formed in 1990 in connection with the
former AT&T Universal Card credit card, for which TSYS
served as the exclusive provider of processing services for a
number of years. Mrs. Yarbrough has held leadership
positions with several community organizations over a number of
years. Mrs. Yarbrough is a graduate of Huntingdon College,
with a degree in business administration.
Mrs. Yarbroughs leadership experience in non-profit
organizations, experience as a director of Universal Bank, and
her understanding of TSYS business as a long-time investor
of TSYS since the time of its initial public offering in 1983
provides the TSYS Board with a valuable unique viewpoint that
contributes to the Boards effectiveness.
Mrs. Yarbroughs term of office expires at the 2010
Annual Meeting.
14
|
|
James H.
Blanchard
|
Continuing
Director Chairman of the Board and Chief Executive
Officer, Retired, Synovus Financial Corp. Director
since 1982
|
Mr. Blanchard, 68 years of age, was elected Chairman
of the Board of Synovus in July 2005 and retired from that
position in October 2006. Prior to 2005, Mr. Blanchard
served as Chief Executive Officer of Synovus. Mr. Blanchard
continues to serve as a director of Synovus. Mr. Blanchard
was elected Chairman of the Executive Committee of TSYS in
February 1992. Although he continues to serve in this capacity,
he retired as an executive officer of TSYS in conjunction with
his retirement as an executive officer of Synovus in October
2006. Mr. Blanchard also serves as a director of AT&T
Corporation and has served as a director of BellSouth
Corporation. Mr. Blanchards business experience
includes service on the boards of the Financial Services
Roundtable, BITS (formerly, Bankers Information Technology
Secretariat), the American Bankers Association, the Georgia
Chamber of Commerce and the Georgia Research Alliance, and
membership with The University of Georgia Deans Advisory
Board for the Terry College of Business. Mr. Blanchard is a
graduate of the University of Georgia, and he earned a law
degree from the University of Georgia School of Law.
Mr. Blanchards leadership and consensus-building
skills, experience as the principal executive officer of a
public company in the financial services industry, experience in
the payment services industry and understanding of TSYS
business and historical development give TSYS Board
valuable insights related to matters of strategic importance.
Mr. Blanchards term of office expires at the 2012
Annual Meeting.
Richard
Y. Bradley Continuing Director Partner,
Bradley & Hatcher Director since
1991
Mr. Bradley, 71 years of age, is a lawyer with the law
firm of Bradley & Hatcher. His professional career
includes the practice of law for 44 years, most recently as
a partner with the Bradley & Hatcher firm from July
1995 to the present. Mr. Bradley also serves as a director
of Synovus. He has significant experience in corporate
governance matters, having chaired the Corporate Governance and
Nominating Committees of the TSYS and Synovus boards since 2000
and has Board leadership experience having served as TSYS
Lead Director since 2008. Mr. Bradleys business
and professional experience includes serving as President of
Bickerstaff Clay Products Company, Inc., a structural clay
products manufacturing company, President of the Georgia State
Bar from 1983 1984 and Chairman of Georgias
Institute of Continuing Legal Education from 1984
1985. Mr. Bradley is a fellow of the American College of
Trial Lawyers. Mr. Bradley is a graduate of the University
of Georgia School of Business, and he earned a law degree from
the University of Georgia School of Law. Mr. Bradleys
legal training and experience, his experience in corporate
governance-related matters and his leadership and
consensus-building skills are of great value in his leadership
role on TSYS Board. Mr. Bradleys term of office
expires at the 2012 Annual Meeting.
|
|
Kriss
Cloninger III
|
Continuing
Director President and Chief Financial Officer,
Aflac Incorporated Director since 2004
|
Mr. Cloninger, 62 years of age, has served in various
capacities with Aflac Incorporated, an insurance holding
company, since joining Aflac in 1992, including President and
Chief Financial Officer, a title he has held since 2001.
Mr. Cloninger also serves as a director of Aflac.
Mr. Cloninger also serves as a director of Tupperware
Brands Corporation and chairs its Audit Committee.
Mr. Cloningers business experience includes serving
as a principal with KPMG LLP. Mr. Cloninger is a fellow of
the Society of Actuaries and a member of the American Academy of
Actuaries. Mr. Cloninger is a graduate of the University of
Texas at Austin and he earned a Masters degree in business
administration from the University of Texas at Austin.
Mr. Cloningers experience as a principal financial
officer of a public company with a strong international business
provides an important perspective to the TSYS Board as TSYS
expands internationally. Mr. Cloningers term of
office expires at the 2011 Annual Meeting.
|
|
Walter W.
Driver, Jr.
|
Continuing
Director Chairman Southeast, Goldman,
Sachs & Co. Director since 2002
|
Mr. Driver, 64 years of age, has served as
Chairman-Southeast of Goldman, Sachs & Co., an
investment banking and securities firm, since January 2006.
Mr. Driver practiced law with the law firm of
King & Spalding from 1970 until 2006, and served as
Managing Partner or Chairman of the firm from 1999 until 2006.
Mr. Drivers law practice focused on many aspects of
representation of financial institutions, including financing
transactions. Mr. Driver also serves as a director of
Equifax Inc. Mr. Driver is a graduate of Stanford
University and he earned a law degree from the University of
Texas School of Law. Mr. Drivers legal training
15
and experience, his negotiating skills, risk assessment skills
and understanding of complex financial transactions benefit the
TSYS Board in its discussion of matters of strategic importance.
Mr. Drivers term of office expires at the 2012 Annual
Meeting.
|
|
Gardiner
W. Garrard, Jr.
|
Continuing
Director Chairman of the Board, The Jordan
Company Director since 1982
|
Mr. Garrard, 69 years of age, was named Chairman of
the Board of The Jordan Company, a real estate development and
private equity investments company, in 2009. He served as
President of The Jordan Company from 1975 until his election as
Chairman of the Board. Mr. Garrard also serves as a
director of Synovus. Mr. Garrard has served as a member of,
and as Chairman of, the TSYS and Synovus Audit Committees and
Compensation Committees. Mr. Garrard is a graduate of the
University of North Carolina and he earned a law degree from the
University of Georgia School of Law. Mr. Garrards
executive management experience, leadership skills, public
company board expertise and legal training provide the TSYS
Board with leadership and consensus building skills on matters
of strategic importance. Mr. Garrards term of office
expires at the 2012 Annual Meeting.
|
|
W. Walter
Miller, Jr.
|
Continuing
Director Group Executive, Retired, Total System
Services, Inc. Director since 1993
|
Mr. Miller, 61 years of age, retired from TSYS as a
Group Executive in 2001 after over 27 years of employment
with TSYS and Synovus. Mr. Miller was responsible for
TSYS card production area and statement production areas
at the time of his retirement from TSYS. Prior to that,
Mr. Miller was responsible for supervision of TSYS
subsidiary companies, and prior to that, he was responsible for
TSYS human resources division. Mr. Millers
employment with Synovus included serving as head of the bankcard
division of Columbus Bank and Trust Company.
Mr. Millers extensive knowledge of TSYS
business and operations and experience in the payment services
and financial services industries gives TSYS Board the
perspective of someone who has managed a number of key areas of
TSYS business operations. Mr. Miller and H. Lynn Page
are first cousins and Mr. Millers spouse and John T.
Turner are first cousins. Mr. Millers term of office
expires at the 2012 Annual Meeting.
|
|
H. Lynn
Page
|
Continuing
Director Vice Chairman of the Board, Retired,
Synovus Financial Corp. Director since
1982
|
Mr. Page, 69 years of age, was elected Vice Chairman
of Synovus in 1990 and retired from that position in 1991. Prior
to 1991, Mr. Page served for over 26 years in various
capacities with Synovus or its subsidiary, Columbus Bank and
Trust Company, or with TSYS, including President of Synovus
and Vice Chairman of TSYS. During Mr. Pages service
as an executive officer of Synovus, he served as the chief
financial officer of Synovus, or the chief financial officer of
Synovus reported directly to him. Mr. Page also serves as a
director of Synovus. He is a graduate of the Georgia Institute
of Technology. Mr. Page brings to the TSYS Board financial
expertise, executive management experience in overseeing the
financial reporting of a public company, risk management skills
and years of business experience with TSYS and in the financial
services industry, enabling him to provide valuable leadership
to the TSYS Boards oversight of financial reporting and
enterprise risk management. Mr. Page and W. Walter
Miller, Jr. are first cousins. Mr. Pages term of
office expires at the 2011 Annual Meeting.
|
|
Philip W.
Tomlinson
|
Continuing
Director Chairman of the Board and Chief Executive
Officer, Total System Services, Inc. Director since
1982
|
Mr. Tomlinson, 63 years of age, was elected Chairman
of the Board and Chief Executive Officer of TSYS in January
2006. From 1982 until 2006, Mr. Tomlinson served in various
capacities with TSYS, including Chief Executive Officer and
President. Since TSYS incorporation in December 1982,
Mr. Tomlinson has played a key role in almost every major
relationship that has shaped TSYS development.
Mr. Tomlinson is a director of Synovus, a member of the
Financial Services Roundtable and a graduate of Louisiana State
Universitys School of Banking of the South.
Mr. Tomlinson is also a member of the Georgia Institute of
Technology Advisory Board and the Columbus State University
Board of Trustees. Mr. Tomlinsons leadership skills,
his relationship-building and risk management skills, his
extensive knowledge of and years of experience with TSYS and his
knowledge and understanding of the
16
payment services and financial services industries provide
invaluable resources to TSYS Board.
Mr. Tomlinsons term of office expires at the 2011
Annual Meeting.
|
|
Richard
W. Ussery
|
Continuing
Director Chairman of the Board and Chief Executive
Officer, Retired, Total System Services, Inc.
Director since 1982
|
Mr. Ussery, 62 years of age, retired as an executive
employee of TSYS in June 2005 and served as a non-executive
Chairman of the Board until January 2006. Prior to 2005,
Mr. Ussery served for over 40 years in various
capacities with TSYS or Synovus subsidiary, Columbus Bank
and Trust Company, including Chairman of the Board and
Chief Executive Officer of TSYS. His business experience
includes serving as a director of the Georgia Power Company, an
electric utility subsidiary company of Southern Company.
Mr. Ussery is a graduate of Auburn University, with a
degree in business. Mr. Usserys leadership skills,
extensive knowledge of and experience in the payment services
and financial services industries and understanding of
TSYS business and historical development give him unique
insights into our companys challenges, opportunities and
business. Mr. Usserys term of office expires at the
2011 Annual Meeting.
17
PROPOSAL 2:
RATIFICATION OF
APPOINTMENT OF THE INDEPENDENT AUDITOR
The Audit Committee has appointed the firm of KPMG LLP as the
independent auditor to audit the consolidated financial
statements of TSYS and its subsidiaries for the fiscal year
ending December 31, 2010 and TSYS internal control
over financial reporting as of December 31, 2010.
Representatives of KPMG will be present at the Annual Meeting
with the opportunity to make a statement if they desire to do so
and will be available to respond to appropriate questions from
shareholders present at the meeting. Although shareholder
ratification of the appointment of TSYS independent
auditor is not required by our bylaws or otherwise, we are
submitting the selection of KPMG to our shareholders for
ratification to permit shareholders to participate in this
important corporate decision. If not ratified, the Audit
Committee will reconsider the selection, although the Audit
Committee will not be required to select a different independent
auditor for TSYS.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE
FOR THE RATIFICATION OF THE APPOINTMENT OF KPMG LLP
AS THE INDEPENDENT AUDITOR.
EXECUTIVE
OFFICERS
The following table sets forth the name, age and position with
TSYS of each executive officer of TSYS.
|
|
|
|
|
|
|
|
Name
|
|
Age
|
|
Position with TSYS
|
|
Philip W. Tomlinson(1)
|
|
|
63
|
|
|
Chairman of the Board and Chief Executive Officer
|
M. Troy Woods(1)
|
|
|
58
|
|
|
President and Chief Operating Officer
|
James B. Lipham(2)
|
|
|
61
|
|
|
Senior Executive Vice President and Chief Financial Officer
|
William A. Pruett(3)
|
|
|
56
|
|
|
Senior Executive Vice President and Chief Client Officer
|
Kenneth L. Tye(4)
|
|
|
57
|
|
|
Senior Executive Vice President and Chief Information Officer
|
G. Sanders Griffith, III(5)
|
|
|
56
|
|
|
Senior Executive Vice President, General Counsel and Secretary
|
|
|
|
(1)
|
|
As Messrs. Tomlinson and Woods
are directors of TSYS, relevant information pertaining to their
positions with TSYS is set forth under the caption Members
of the Board of Directors on page 12.
|
|
(2)
|
|
James B. Lipham was elected as
Senior Executive Vice President and Chief Financial Officer of
TSYS in April 2004. From 1995 until 2004, Mr. Lipham served
as Executive Vice President and Chief Financial Officer of TSYS.
From 1987 until 1995, Mr. Lipham served in various
financial capacities with TSYS, including Senior Vice President
and Treasurer.
|
|
(3)
|
|
William A. Pruett was elected as
Senior Executive Vice President and Chief Client Officer of TSYS
in April 2004. From 1993 until 2004, Mr. Pruett served as
Executive Vice President of TSYS. From 1982 until 1993,
Mr. Pruett served in various capacities with TSYS,
including Senior Vice President.
|
|
(4)
|
|
Kenneth L. Tye was elected as
Senior Executive Vice President and Chief Information Officer of
TSYS in April 2004. From 1999 until 2004, Mr. Tye served as
Executive Vice President and Chief Information Officer of TSYS.
From 1982 until 1999, Mr. Tye served in various capacities
with TSYS, including Senior Vice President.
|
|
(5)
|
|
G. Sanders Griffith, III was
elected as Senior Executive Vice President of TSYS in January
2008, Secretary of TSYS in 1995 and General Counsel of TSYS in
1988. From 1988 until 2008, Mr. Griffith served in various
capacities with Synovus, including Senior Executive Vice
President, General Counsel and Secretary.
|
18
STOCK
OWNERSHIP OF DIRECTORS
AND EXECUTIVE
OFFICERS
The following table sets forth ownership of shares of TSYS stock
by each director, each executive officer named in the Summary
Compensation Table and all directors and executive officers as a
group as of December 31, 2009.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares of TSYS
|
|
Shares of TSYS
|
|
Shares of TSYS
|
|
|
|
|
|
|
Stock
|
|
Stock
|
|
Stock
|
|
|
|
Percentage of
|
|
|
Beneficially
|
|
Beneficially
|
|
Beneficially
|
|
Total
|
|
Outstanding
|
|
|
Owned with
|
|
Owned with
|
|
Owned with
|
|
Shares of
|
|
Shares of
|
|
|
Sole Voting
|
|
Shared Voting
|
|
Sole Voting and
|
|
TSYS Stock
|
|
TSYS Stock
|
|
|
and Investment
|
|
and Investment
|
|
No Investment
|
|
Beneficially
|
|
Beneficially
|
|
|
Power as of
|
|
Power as of
|
|
Power as of
|
|
Owned as of
|
|
Owned as of
|
Name
|
|
12/31/09
|
|
12/31/09
|
|
12/31/09
|
|
12/31/09(1)
|
|
12/31/09
|
|
Richard E. Anthony
|
|
|
248,841
|
|
|
|
34,082
|
|
|
|
1,000
|
|
|
|
283,923
|
|
|
|
*
|
|
James H. Blanchard
|
|
|
291,842
|
|
|
|
1,109,269
|
|
|
|
1,741
|
|
|
|
1,402,852
|
|
|
|
*
|
|
Richard Y. Bradley
|
|
|
41,562
|
|
|
|
76,259
|
|
|
|
1,741
|
|
|
|
119,562
|
|
|
|
*
|
|
Kriss Cloninger III
|
|
|
8,083
|
|
|
|
|
|
|
|
1,500
|
|
|
|
9,583
|
|
|
|
*
|
|
Walter W. Driver, Jr.
|
|
|
8,561
|
|
|
|
|
|
|
|
1,500
|
|
|
|
10,061
|
|
|
|
*
|
|
Gardiner W. Garrard, Jr.
|
|
|
101,588
|
|
|
|
301,794
|
|
|
|
1,741
|
|
|
|
405,123
|
|
|
|
*
|
|
Sidney E. Harris
|
|
|
9,079
|
|
|
|
|
|
|
|
1,500
|
|
|
|
10,579
|
|
|
|
*
|
|
Mason H. Lampton
|
|
|
119,980
|
|
|
|
84,376
|
(2)
|
|
|
1,741
|
|
|
|
206,097
|
|
|
|
*
|
|
James B. Lipham
|
|
|
127,161
|
|
|
|
600
|
|
|
|
32,747
|
|
|
|
709,693
|
|
|
|
*
|
|
W. Walter Miller, Jr.
|
|
|
88,898
|
|
|
|
272,647
|
|
|
|
1,500
|
|
|
|
372,170
|
|
|
|
*
|
|
H. Lynn Page
|
|
|
487,086
|
|
|
|
121,079
|
|
|
|
1,741
|
|
|
|
609,906
|
|
|
|
*
|
|
William A. Pruett
|
|
|
190,816
|
|
|
|
|
|
|
|
33,788
|
|
|
|
801,763
|
|
|
|
*
|
|
Philip W. Tomlinson
|
|
|
551,114
|
|
|
|
185,173
|
|
|
|
102,288
|
|
|
|
1,820,890
|
|
|
|
*
|
|
John T. Turner
|
|
|
15,774
|
|
|
|
1,790,984
|
|
|
|
1,500
|
|
|
|
1,808,258
|
|
|
|
*
|
|
Kenneth L. Tye
|
|
|
108,462
|
|
|
|
850
|
|
|
|
33,520
|
|
|
|
703,291
|
|
|
|
*
|
|
Richard W. Ussery
|
|
|
438,835
|
|
|
|
184,064
|
|
|
|
1,500
|
|
|
|
1,353,631
|
|
|
|
*
|
|
M. Troy Woods
|
|
|
156,078
|
|
|
|
2,279
|
|
|
|
93,663
|
|
|
|
931,698
|
|
|
|
*
|
|
James D. Yancey
|
|
|
477,813
|
|
|
|
282,993
|
|
|
|
1,741
|
|
|
|
762,547
|
|
|
|
*
|
|
Rebecca K. Yarbrough
|
|
|
186,063
|
|
|
|
309,602
|
(3)
|
|
|
1,500
|
|
|
|
497,165
|
|
|
|
*
|
|
Directors and Executive Officers as a Group (20 persons)
|
|
|
3,796,364
|
|
|
|
4,757,734
|
|
|
|
395,632
|
|
|
|
13,093,615
|
|
|
|
6.5
|
|
|
|
|
*
|
|
Less than one percent of the
outstanding shares of TSYS stock.
|
|
(1)
|
|
The totals shown in the table above
for each of the directors and executive officers of TSYS listed
above include, as of December 31, 2009, for each of the
directors and executive officers of TSYS listed below the
following shares: (a) under the heading Stock
Options the number of shares of TSYS stock that each
individual had the right to acquire within 60 days through
the exercise of stock options, and (b) under the heading
Pledged Shares the number of shares of TSYS stock
that were pledged, including shares held in a margin account.
|
|
|
|
|
|
|
|
|
|
Name
|
|
Stock Options
|
|
Pledged Shares
|
|
Richard E. Anthony
|
|
|
|
|
|
|
30,652
|
|
James H. Blanchard
|
|
|
|
|
|
|
882,047
|
|
Gardiner W. Garrard, Jr.
|
|
|
|
|
|
|
122,180
|
|
James B. Lipham
|
|
|
549,185
|
|
|
|
|
|
W. Walter Miller, Jr.
|
|
|
9,125
|
|
|
|
|
|
William A. Pruett
|
|
|
577,159
|
|
|
|
16,992
|
|
Philip W. Tomlinson
|
|
|
982,315
|
|
|
|
|
|
Kenneth L. Tye
|
|
|
560,459
|
|
|
|
|
|
Richard W. Ussery
|
|
|
729,232
|
|
|
|
|
|
M. Troy Woods
|
|
|
679,678
|
|
|
|
20,022
|
|
James D. Yancey
|
|
|
|
|
|
|
10,251
|
|
Directors and Executive Officers as a Group (20 persons)
|
|
|
4,143,885
|
|
|
|
1,082,144
|
|
|
|
|
(2)
|
|
Includes 52,410 shares of TSYS
stock held in a trust for which Mr. Lampton is not the
trustee. Mr. Lampton disclaims beneficial ownership of
these shares.
|
|
(3)
|
|
Includes 72,000 shares of TSYS
stock held in a trust for which Mrs. Yarbrough is not the
trustee. Mrs. Yarbrough disclaims beneficial ownership of
these shares.
|
19
AUDIT
COMMITTEE REPORT
The Audit Committee of the Board of Directors is comprised of
three directors, each of whom the Board has determined to be an
independent director as defined by the listing standards of the
NYSE and the rules of the SEC. The duties of the Audit Committee
are summarized in this Proxy Statement under Committees of
the Board on page 5 and are more fully described in
the Audit Committee charter adopted by the Board of Directors.
One of the Audit Committees primary responsibilities is to
assist the Board in its oversight responsibility regarding the
integrity of TSYS financial statements and systems of
internal controls. Management is responsible for TSYS
accounting and financial reporting processes, the establishment
and effectiveness of internal controls and the preparation and
integrity of TSYS consolidated financial statements. KPMG
LLP, TSYS independent auditor, is responsible for
performing an independent audit of TSYS consolidated
financial statements and of the effectiveness of TSYS
internal control over financial reporting in accordance with the
standards of the Public Company Accounting Oversight Board
(United States) and issuing opinions on whether those financial
statements are presented fairly in conformity with accounting
principles generally accepted in the United States and on the
effectiveness of TSYS internal control over financial
reporting. The Audit Committee is directly responsible for the
appointment, compensation and oversight of KPMG LLP. The
function of the Audit Committee is not to duplicate the
activities of management or the independent auditor, but to
monitor and oversee TSYS financial reporting process.
In discharging its responsibilities regarding the financial
reporting process, the Audit Committee:
|
|
|
|
|
Reviewed and discussed with management and KPMG LLP TSYS
audited financial statements as of and for the year ended
December 31, 2009;
|
|
|
|
Discussed with KPMG LLP the matters required to be discussed by
Statement on Auditing Standards No. 61 (Communication with
Audit Committees); and
|
|
|
|
Received from KPMG LLP the written disclosures and the letter
required by applicable requirements of the Public Company
Accounting Oversight Board regarding KPMG LLPs
communications with the Audit Committee concerning independence
and has discussed with KPMG LLP their independence.
|
Based upon the review and discussions referred to in the
preceding paragraph, the Audit Committee recommended to the
Board of Directors that the audited financial statements
referred to above be included in TSYS Annual Report on
Form 10-K
for the year ended December 31, 2009 filed with the
Securities and Exchange Commission.
The Audit Committee
H. Lynn Page, Chairman
Sidney E. Harris
John T. Turner
20
KPMG
LLP Fees and Services
The following table presents fees for professional audit
services rendered by KPMG LLP for the audit of TSYS annual
financial statements for the years ended December 31, 2009
and December 31, 2008 and fees billed for other services
rendered by KPMG during those periods.
|
|
|
|
|
|
|
|
|
|
|
|
|
2009
|
|
|
2008
|
|
|
Audit Fees(1)
|
|
$
|
1,822,000
|
|
|
$
|
1,931,000
|
|
Audit Related Fees(2)
|
|
|
1,849,000
|
|
|
|
1,652,000
|
|
Tax Fees(3)
|
|
|
345,000
|
|
|
|
278,000
|
|
All Other Fees
|
|
|
-0-
|
|
|
|
-0-
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
4,016,000
|
|
|
$
|
3,861,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
Audit fees represent fees for
professional services provided in connection with the audit of
TSYS financial statements and internal control over
financial reporting, reviews of quarterly financial information
and audit services provided in connection with other statutory
or regulatory filings.
|
|
(2)
|
|
Audit related fees consisted
principally of certain agreed upon procedures engagements,
employee benefit plan audits and assurance related services
associated with data center reviews.
|
|
(3)
|
|
Tax fees consisted of fees for tax
compliance/preparation and tax consultation services.
|
Policy
on Audit Committee Pre-Approval
The Audit Committee has the responsibility for appointing,
setting the compensation for and overseeing the work of
TSYS independent auditor. In recognition of this
responsibility, the Audit Committee has established a policy to
pre-approve all audit and permissible non-audit services
provided by the independent auditor in order to assure that the
provision of these services does not impair the independent
auditors independence. TSYS Audit Committee
Pre-Approval Policy addresses services included within the four
categories of audit and permissible non-audit services, which
include Audit Services, Audit Related Services, Tax Services and
All Other Services.
The annual audit services engagement terms and fees are subject
to the specific pre-approval of the Audit Committee. In
addition, the Audit Committee must specifically approve
permissible non-audit services classified as All Other Services.
Prior to engagement, management submits to the Committee for
approval a detailed list of the Audit Services, Audit Related
Services and Tax Services that it recommends the Committee
engage the independent auditor to provide for the fiscal year.
Each specified service is allocated to the appropriate category
and accompanied by a budget estimating the cost of that service.
The Committee will, if appropriate, approve both the list of
Audit Services, Audit Related Services and Tax Services and the
budget for such services.
The Committee is informed at each Committee meeting as to the
services actually provided by the independent auditor pursuant
to the Pre-Approval Policy. Any proposed service that is not
separately listed in the Pre-Approval Policy or any service
exceeding the pre-approved fee levels must be specifically
pre-approved by the Committee. The Audit Committee has delegated
pre-approval authority to the Chairman of the Audit Committee.
The Chairman must report any pre-approval decisions made by him
to the Committee at its next scheduled meeting.
21
EXECUTIVE
COMPENSATION
COMPENSATION
DISCUSSION AND ANALYSIS
Introduction
This Compensation Discussion and Analysis
(CD&A) provides an overview and analysis of
TSYS executive compensation program, the material
compensation decisions made under the program and the material
factors considered in making those decisions. Specifically, this
CD&A includes the following sections:
|
|
|
|
|
Compensation Philosophy this section
summarizes the objectives of TSYS executive compensation
program and describes what the program is designed to reward,
how our program works in practice and how the program aligns our
executives interests with the interests of our
shareholders;
|
|
|
|
Primary Elements of Compensation this section
identifies the primary elements of an executives
compensation package, describes why each element was chosen,
discusses how each element of compensation, and the decisions
regarding that element, fit into our overall compensation
objectives and affect decisions regarding other elements, and
indicates how the amount (and where applicable, the formula) for
each element is determined;
|
|
|
|
Analysis this section discusses the analytic
tools used in assessing and setting executive compensation,
including the use of tally sheets, benchmarking and information
about our peer companies;
|
|
|
|
Other Issues and Policies this section
provides information on employment agreements, post- termination
compensation philosophy, tax considerations and other issues
that relate to our executive compensation program;
|
|
|
|
Compensation Realized By Named Executive Officers for
2009 this section discusses compensation
realized by named executive officers for 2009;
|
|
|
|
Significant Events After December 31,
2009 this section highlights
post-year-end
events that may affect compensation paid to or earned by named
executive officers for 2009; and
|
|
|
|
Conclusion this section concludes the
CD&A.
|
The series of tables following this CD&A provide detailed
information about the compensation earned by or paid to the
following named executive officers:
|
|
|
|
|
Philip W. Tomlinson, Chairman of the Board and Chief Executive
Officer;
|
|
|
|
James B. Lipham, Senior Executive Vice President and Chief
Financial Officer;
|
|
|
|
M. Troy Woods, President and Chief Operating Officer;
|
|
|
|
William A. Pruett, Senior Executive Vice President and Chief
Client Officer; and
|
|
|
|
Kenneth L. Tye, Senior Executive Vice President and Chief
Information Officer.
|
For information about the Compensation Committee and its
charter, its processes and procedures for administering
TSYS executive compensation program, the role of
compensation consultants and other governance information,
please see Committees of the Board on page 5.
Compensation
Philosophy
TSYS has established a competitive, performance-oriented
executive compensation program designed to support our strategic
goals. Specifically, TSYS executive compensation program
is designed to compete in the markets in which we seek executive
talent. We believe that we must maintain an executive
compensation program that allows us to recruit and retain top
level executive talent. Our executive compensation program is
performance-oriented. A guiding principle of our compensation
program is average pay for average performance
above-average pay for above-average
performance below-average pay for below-average
performance. As a result, a significant portion of the
total compensation of each executive is at risk based on
short-term and long-term performance.
22
This pay for performance philosophy is reflected in different
aspects of our executive compensation program, including the
compensation of our Chief Executive Officer. For 2009, the total
annual cash compensation, i.e., the combination of base salary
and annual incentive bonus, earned and paid to our Chief
Executive Officer was less than the amount of total annual cash
compensation earned and paid for the prior year because no
incentive cash bonus was paid for 2009, as TSYS did not achieve
the predetermined growth in earnings per share goal set by the
Committee.
In addition, the total annual cash compensation earned and paid
for 2008 to our Chief Executive Officer was less than the amount
of total annual cash compensation earned and paid for 2007.
Although TSYS achieved a predetermined level of growth in
earnings per share sufficient to pay a bonus at approximately
42.5% of the target level, the Chief Executive Officer
recommended that the amount of the bonus be reduced to 25% of
the target amount. This recommendation was accepted by the
Committee.
Furthermore, in 2009, half of the equity awards received by each
of the named executive officers, including the Chief Executive
Officer, were performance-based, i.e., performance share awards
with vesting based upon performance. As TSYS did not attain the
predetermined growth in earnings per share goal for 2009, all of
the performance shares awarded in 2009 were forfeited.
In 2008, more than one-half of the Chief Executive
Officers equity award, and more than one-half of all of
the Chief Executive Officers total compensation, was
performance-based. The performance-based compensation included
an annual incentive cash bonus opportunity, a grant of
performance-based restricted stock, and a grant of performance
shares. The performance-based restricted stock is conditioned
upon the Chief Executive Officers continued employment for
five to seven years and upon the satisfaction of performance
goals established each year by the Committee for the same period
of time. The performance goals were an earnings per share goal
for 2008 and 2009.
For 2009, the contributions to TSYS retirement plans for
the Chief Executive Officer decreased because TSYS did not make
a Profit Sharing Plan contribution and because the Chief
Executive Officers total annual cash compensation, which
is the basis for TSYS Money Purchase Pension Plan
contribution, decreased.
TSYS executive compensation program is designed to support
corporate strategic goals, including growth in earnings per
share (EPS) and total shareholder return
(TSR). As described in more detail below, EPS growth
is the driver of our Annual Incentive Program (AIP).
The AIP is our short-term incentive program that provides
performance-based cash bonuses. EPS growth coupled with TSR is
the driver of our Long-Term Incentive Program
(LTIP). EPS is the performance measure used to
determine vesting of certain performance-based restricted stock
awards. TSYS believes that the high degree of performance
orientation and the use of EPS, EPS growth and TSR targets serve
to align the interests of our executives with the interests of
our shareholders. TSYS has also adopted stock ownership
guidelines that further align our executives interests
with the interests of our shareholders. Finally, the Committee
has the right to exercise downward discretion in connection with
performance-based compensation and can reduce or eliminate the
amount that would otherwise be awarded under the approved
schedule. For example, amounts can be reduced to reflect
individual or business unit performance, to exclude
unanticipated, non-recurring gains or for affordability.
Information on the compensation realized by the named executive
officers for 2009 is set forth in the table on page 31.
23
Primary
Elements of Compensation
We believe that the primary elements of our executive
compensation program promote the objectives of aligning
compensation with performance measures that are directly related
to TSYS financial goals and creation of shareholder value
without encouraging executives to take unnecessary and excessive
risks. The primary elements of compensation in TSYS
executive compensation program are summarized in the table below.
|
|
|
|
|
|
|
Compensation Element
|
|
|
Objective
|
|
|
Key Features
|
Base Pay
|
|
|
To provide a fixed level of cash compensation for executive
officers commensurate with their respective skills,
responsibilities, experience and performance.
|
|
|
Targeted at median of market.
Adjustments are based on an executives current and anticipated future performance with benchmarking to our peer companies.
|
Annual Incentive Program
performance-based
cash bonuses
|
|
|
To motivate executive officers to produce outstanding financial
results and to reward executive officers for attaining financial
goals.
|
|
|
Cash bonuses are a function of base pay and EPS growth.
|
Long-Term Incentive Program equity awards
|
|
|
To align interests of executive officers with shareholders and
to retain executive officers.
|
|
|
Award is a multiple of base pay determined by both EPS growth and TSR.
One-half of award is paid in stock options and one-half is paid in performance share awards (with the number of actual shares determined over a three-year period).
|
Qualified Plans: Money Purchase Pension Plan, Profit Sharing
Plan and 401(k) Savings Plan
|
|
|
To provide retirement income for executive officers (and other
employees).
|
|
|
Broad-based retirement plans. TSYS contributes 7% of eligible compensation to the Money Purchase Pension Plan, and TSYS makes discretionary contributions to the Profit Sharing Plan and the 401(k) Savings Plan based on profitability.
Contributions are fully vested after 5 years.
|
Deferred Compensation Plan
|
|
|
To provide additional retirement savings and income deferral
opportunities.
|
|
|
Executive officers can elect to defer a portion of their base salary and cash bonuses under the AIP.
TSYS contributes an amount equal to the amount that would have been contributed to the Qualified Plans but for IRS limits.
|
|
|
|
|
|
|
|
Base Pay. Base pay provides our executives
with a level of compensation commensurate with their respective
skills, responsibilities, experience and performance. It is the
amount paid to an executive for performing his or her job on a
daily basis. TSYS targets base pay at the median of the market
for comparable positions. To ensure that base pay is
competitive, TSYS benchmarks an executives base pay
against base pay paid by our peer companies. See the
Analysis section below for a list of our peer
companies and information on the process used to select our peer
companies.
24
When establishing base pay, the Committee compares each
executives current base pay to the market median for that
position using proxy statement information from the peer
companies as well as external market surveys. For certain
positions for which there is no clear market match in the
benchmarking data, the Committee uses a blend of two or more
positions from the benchmarking data. The Committee also reviews
changes in the benchmarking data from the previous year. After
reviewing the benchmarking data, the Committee establishes a
competitive base salary for each executive. For example, an
executive whose base salary is below the benchmarking target for
his or her position may receive a larger percentage increase
than an executive whose base salary exceeds the benchmarking
target for his or her position.
In addition to market comparisons of similar positions at the
peer companies, individual performance may affect base pay. For
example, an executive whose performance is not meeting
expectations may receive no increase in base pay or a smaller
base pay increase in a given year. On the other hand, an
executive with outstanding performance may receive a larger base
pay increase or more frequent base pay increases.
Base pay is not directly related to TSYS performance,
except over the long term since revenues are used in
benchmarking base pay against the peer companies. Comparison of
an executives base pay to the base pay of other TSYS
executives may also be a factor in establishing base pay,
especially with respect to positions for which there is no clear
market match in the base pay benchmarking data. Because of the
process used to establish base pay, large increases in base pay
generally occur only when an executive is promoted into a new
position. For 2009, no named executive officer received an
increase in base pay.
Annual Incentive Program. Annual cash bonuses
under the AIP provide an incentive for our executives to meet
our short-term performance goals. In addition, given the
prevalence of short-term incentive compensation in the
marketplace, AIP awards are part of a competitive compensation
program. The AIP is discussed in detail below. However, for
2009, no named executive officer received any payment under the
AIP.
AIP awards are tied directly to our fundamental operating
performance measured over a one-year period. Each year the
Committee establishes a performance target which is generally
based upon the percentage growth in EPS from the prior year. The
Committee also establishes payout targets. A payout target goal
of 100% equates to a market award, which is a
typical short-term incentive award for similar positions at the
peer companies, expressed as a percentage of base pay earned
during the year. See the Analysis section below for
a list of our peer companies and information on the process used
to select our peer companies.
Actual AIP payout targets for 2009 were set taking into account
median market data at the peer companies, as well as existing
incentive targets, internal pay equity, individual performance
and retention needs. The 2009 AIP payout target for
Messrs. Tomlinson and Woods is 100% of base pay, and the
2009 AIP payout target for TSYS other named executive
officers is 85% of base pay.
The amount of an AIP award ranges from zero to 200% of the
payout target in accordance with a schedule approved by the
Committee each year. For 2009, the Committee approved the
following schedule:
|
|
|
|
EPS Percentage Growth
|
|
Percent of Target Bonus Paid
|
|
Below 1%
|
|
0%
|
1.0%
|
|
25%
|
2.0%
|
|
50%
|
3.0%
|
|
75%
|
4.0%
|
|
100%
|
5.0%
|
|
125%
|
6.0%
|
|
150%
|
7.0%
|
|
175%
|
8.0% and above
|
|
200%
|
TSYS had EPS growth of less than 1% for 2009. Accordingly, no
bonuses were paid under the AIP for 2009.
25
Long-Term Incentive Program. Equity awards
under the LTIP provide an incentive for our executives to
provide exceptional return to shareholders by tying a
significant portion of their compensation to growth in
shareholder value. Equity awards also align the interests of our
executives and our shareholders by awarding executives equity in
TSYS. Finally, given the prevalence of long-term incentive
compensation in the marketplace, LTIP awards are part of a
competitive compensation program.
Each year the Committee establishes performance measures for
LTIP awards. LTIP awards are expressed as a multiple of an
executives base pay. LTIP payout targets are set taking
into account median market data at the peer companies, as well
as existing incentive targets, internal pay equity, individual
performance and retention needs. See the Analysis
section below for the identity of our peer companies and for
information on the process used to select our peer companies.
LTIP awards are generally paid one-half in stock options and
one-half in performance share awards. Stock options will be
awarded in the performance year. Performance share awards will
be denominated in U.S. dollars when awarded and will
ultimately be paid in the form of TSYS stock after the end of
the three-year performance period.
Because the Committee may take action to approve LTIP awards on
or near the date that TSYS earnings are released, the
Committee has established the last business day of the month in
which earnings are released as the grant date for equity awards
to executive officers to ensure that the earnings releases have
had time to be absorbed by the market before equity awards are
granted and stock option exercise prices are established.
However, if the date of the TSYS earnings release or the date
the Committee takes action is within five business days of the
last business day of the month, the grant date is postponed for
five business days after the later of the TSYS earnings release
or the date the Committee takes action. With respect to
performance-based equity awards, awards vest on the date that
the Committee certifies that the required performance measures
have been attained. In addition, the stock price on the date
that the Committee certifies that required performance measures
have been attained is used to determine the number of
performance shares received by an executive in connection with a
performance share award.
50% of LTIP Award Paid in Stock
Options. The value of a stock option is
estimated to be equal to approximately one-third the value of a
restricted stock award. The value of a stock option is
determined as of the date of grant. Stock options will vest in
three equal installments on the first, second and third
anniversaries of the date of grant.
50% of LTIP Award Paid in Performance Share
Awards. Performance share awards are
expressed as a multiple of an executives base pay.
Performance share awards are denominated in U.S. dollars
when awarded. The ultimate value of a performance share award is
tied to our EPS growth and our TSR performance relative to our
peer companies. Each year the Committee establishes an initial
performance target stated as a percentage change in EPS from the
prior year and a
three-year
performance target based on our TSR performance relative to our
peer companies.
The EPS growth schedule is the same schedule used to determine
payouts under the AIP. The Committee approved the following TSR
schedule for the performance share awards:
|
|
|
|
|
|
|
|
|
|
TSYS Rank in
3 Year
|
|
|
|
|
|
TSR vs. Peer Companies
|
|
Percentile
|
|
|
Payout Multiplier
|
Top 20%
|
|
|
81st to
100
|
|
|
|
|
120
|
%
|
|
|
|
|
|
|
|
|
|
|
Next 20%
|
|
|
61 to 80
|
|
|
|
|
110
|
%
|
|
|
|
|
|
|
|
|
|
|
Middle 20%
|
|
|
41 to 60
|
|
|
|
|
100
|
%
|
|
|
|
|
|
|
|
|
|
|
Next 20%
|
|
|
21 to 40
|
|
|
|
|
90
|
%
|
|
|
|
|
|
|
|
|
|
|
Bottom 20%
|
|
|
1 to 20
|
th
|
|
|
|
80
|
%
|
|
|
|
|
|
|
|
|
|
|
The actual value of a performance share award for any year is
determined as follows:
|
|
|
|
|
Year 1. An executive receives a performance
share award (denominated in U.S. dollars). For example,
assume an executive with base pay of $425,000 receives an LTIP
award equal to 250% of
|
26
|
|
|
|
|
base pay. Because one-half of the LTIP award is payable in
performance shares, the executive will have a performance share
award target equal to $531,250 ($425,000 x 250% x 50%).
|
|
|
|
|
|
Year 2. An initial determination of the number
of performance shares awarded to the executive is made after the
end of Year 1 based on attainment of EPS growth targets for Year
1. For example, assume that based on EPS growth the Committee
determines that the executive is entitled to 75% of the
performance share award. The executives performance share
award is valued at $398,438 (75% of $531,250). The initial
number of shares will be determined by the closing price of TSYS
stock on the date the Committee certifies that the performance
measure was attained. If the value of TSYS stock on that date is
$17.00, the executives initial award is set at 23,438
performance shares ($398,438/17).
|
|
|
|
Year 3. The number of performance shares may
be increased or decreased +/- 20% after the end of Year 3 based
on attainment of TSR growth targets for the
three-year
period ending in Year 3. Once the final number of performance
shares is determined, performance shares are paid to the
executive in shares of TSYS stock. For example, assume that
TSYS TSR for the
three-year
period relative to our peer companies fell in the 81st to
100th percentile and that based on TSR the Committee
determines that the number of performance shares will be
increased by 20%. The executives 23,438 performance shares
will be increased to 28,125 (120% of 23,438), and the executive
will receive 28,125 shares of TSYS stock.
|
February 3, 2009 LTIP
Awards. Messrs. Tomlinson and Woods received
LTIP awards equal to 250% of base pay, and TSYS other
named executive officers received LTIP awards equal to 150% of
base pay. Each named executive officer received 50% of his 2009
LTIP award in the form of stock options with a grant date of
February 3, 2009. The closing price of TSYS stock on
February 3, 2009 was used as the exercise price for the
stock options. Stock options received by the named executive
officers are included in the All Other Option Awards:
Number of Securities Underlying Options column in the
Grants of Plan-Based Awards table on page 34.
Each named executive officer also received 50% of his LTIP award
in the form of a performance share award target. Because TSYS
failed to attain the EPS growth measures established for the
performance shares awarded to the named executive officers on
February 3, 2009, the performance shares were forfeited.
Performance share award targets are included in the Grants of
Plan-Based Awards table on page 34.
2008 Special Equity Awards. In addition to
annual awards under the LTIP, the Committee has granted other
long-term incentive awards. Effective February 6, 2008, the
named executive officers received restricted stock awards under
a special equity grant. The special equity grant was designed to
align the interests of TSYS executives with shareholders
following TSYS spin-off from Synovus on December 31,
2007 and to provide a key retention tool for executives.
Restricted stock awarded to named executive officers other than
Messrs. Tomlinson and Woods vests in five equal
installments on the first, second, third, fourth and fifth
anniversaries of the date of grant. Restricted stock awarded to
Messrs. Tomlinson and Woods was tied to a threshold level
of performance over the period 2008 2014. Any
restricted stock that has not vested at the end of 2014 will be
forfeited. Under the performance measure established for 2009,
20% of the restricted stock awarded to Messrs. Tomlinson
and Woods in 2008 vests if EPS is at least 75% of a target EPS
of $1.32. The performance measure was satisfied for 2009, and,
accordingly, 20% of the 2008 special equity awards held by
Messrs. Tomlinson and Woods vested when the Committee
certified performance on January 19, 2010.
2005 Special Equity Awards. The Committee made
TSYS restricted stock grants to Messrs. Tomlinson and Woods
in 2005 to reflect their promotion to Chairman and Chief
Executive Officer and President and Chief Operating Officer,
respectively, and to serve as a vehicle for retaining their
services in their new roles. Although the grants to
Messrs. Tomlinson and Woods were awarded primarily for
retention, the Committee tied the grants to a threshold level of
performance over a
seven-year
period. Any restricted stock that has not vested at the end of
the
seven-year
period will be forfeited. Under the performance measure
established for 2009, 20% of the restricted stock awarded in
2005 vests if EPS is at least 75% of a target EPS of $1.32. The
performance measure was satisfied for 2009, and, accordingly,
20% of the 2005 special equity awards held by
Messrs. Tomlinson and Woods vested when the Committee
certified performance on January 19, 2010.
27
Qualified Plans and Non-Qualified Deferred Compensation
Plan. During 2009, TSYS sponsored three qualified
retirement plans that provide retirement income for a
broad-based group of employees, including our executives.
Specifically, during 2009 TSYS sponsored the TSYS Money Purchase
Pension Plan, the TSYS Profit Sharing Plan and the TSYS 401(k)
Savings Plan.
The Money Purchase Pension Plan has a fixed 7% of eligible
compensation employer contribution every year. The Profit
Sharing Plan and any employer contribution to the 401(k) Savings
Plan are tied directly to TSYS performance. There are
opportunities under both the Profit Sharing Plan and the 401(k)
Savings Plan for employer contributions of up to 7% of eligible
compensation. For 2009, TSYS named executive officers
received a contribution of 7% of eligible compensation under the
Money Purchase Pension Plan, no contribution under the Profit
Sharing Plan and no contribution under the 401(k) Savings Plan.
The retirement plan contributions for 2009 are included in the
All Other Compensation column in the Summary
Compensation Table on page 33.
In addition to these plans, TSYS sponsors the TSYS Deferred
Compensation Plan (Deferred Plan). TSYS makes
contributions to the Deferred Plan in an amount equal to the
benefits that cannot be contributed to the qualified plans due
to limits imposed by the IRS. In addition, participants in the
Deferred Plan may elect to contribute all or a portion of their
base pay and cash bonuses under the AIP to the Deferred Plan.
Assets of the Deferred Plan are held in a rabbi trust, which is
subject to claims by TSYS creditors. The Deferred Plan
does not provide above market interest. Instead,
participants in the Deferred Plan invest amounts held for their
benefit among specified mutual funds. The available mutual funds
are similar, but not identical, to the mutual funds offered
under the 401(k) Savings Plan. Employer contributions to the
Deferred Plan for 2009 are included in the All Other
Compensation column in the Summary Compensation Table on
page 33. Although the Deferred Plan does not provide
above market interest, TSYS has elected to include
earnings on deferred accounts in the All Other
Compensation column in the Summary Compensation Table
because the investment options under the Deferred Plan are not
identical to the investment options under the 401(k) Savings
Plan.
Analysis
Benchmarking. The Committee uses information
from companies that we consider our peers to review compensation
of the named executive officers relative to the compensation
paid to similarly- situated executives and to evaluate
performance-based compensation plans. This process is often
referred to as benchmarking. We believe that
benchmarking is a point of reference for measurement, not the
determinative driver of the named executive officers
compensation or the performance-based plans.
TSYS believes that the peer group that should be used for
compensation comparison purposes is not the same as the peer
group that should be used for performance comparisons because
the groups have different purposes. Compensation benchmarking
peer groups are focused on competitors for talent, and
performance peer groups are focused on competitors for capital
or companies competing on the same economic playing field.
Accordingly, TSYS has identified two peer groups: the Executive
Compensation Benchmarking Group and the LTIP Benchmarking Group.
The term peer companies is used in this Proxy
Statement to refer to companies in the Executive Compensation
Benchmarking Group or the LTIP Benchmarking Group, as applicable.
Information from companies in the Executive Compensation
Benchmarking Group is used on an annual basis to benchmark
compensation of the named executive officers. Companies in the
Executive Compensation Benchmarking Group were selected by
considering companies that compete in TSYS market for
business and talent, companies with similar business operations
and focus, and companies with similar organization size
(revenues approximately one-half to two times those of TSYS).
Companies in the Executive Compensation Benchmarking Group are:
|
|
|
|
|
Affiliated Computer Services, Inc.
Alliance Data Systems Corp.
Broadridge Financial Solutions
Convergys Corp.
Equifax Inc.
Euronet Worldwide, Inc.
|
|
Fair Isaac Corp.
Fidelity National Information
Services, Inc.
Fiserv, Inc.
Global Payments, Inc.
Global Cash Access Holdings, Inc.
Heartland Payment Systems, Inc.
|
|
Jack Henry & Associates
Mastercard Incorporated
Metavante Technologies, Inc.
Paychex, Inc.
The Western Union Company
VISA, Inc.
|
28
Information from companies in the LTIP Benchmarking Group is
used to adjust LTIP performance awards based on TSYS TSR
relative to the TSR of the LTIP Benchmarking Group. The LTIP
Benchmarking Group consists of the companies in the S&P
Technology Index.
As described above, TSYS benchmarks base salaries and
market short-term and long-term incentive targets
with the applicable peer companies. TSYS also benchmarks total
compensation (base salary, short-term incentives and long-term
incentives) of its executives using size-adjusted benchmark data
at median. TSYS uses the peer companies for benchmarking total
compensation, as well as external market surveys. TSYS uses a
three-year look back of the total compensation benchmark data to
reduce the impact of short-term fluctuations in the data that
may occur from year to year.
Tally Sheets. The Committee reviews a tally
sheet for the CEO annually and reviews tally sheets for other
named executive officers on a recurring basis. Tally sheets are
prepared by the Committees compensation consultant. Tally
sheets present the dollar amount of each element of the named
executive officers compensation package, including base
salary, cash bonus under the AIP, current LTIP target award,
perquisites, health and welfare benefits, contributions to the
qualified plans and the Deferred Plan and outstanding equity
awards. The tally sheets also provide estimates of the amounts
payable to each executive upon the occurrence of potential
future events, such as a change of control, retirement,
involuntary termination for cause, voluntary or involuntary
termination without cause.
Tally sheets provide the Committee a summary of all elements of
an executives compensation package, as well as information
on wealth accumulation, so that the Committee can analyze both
the individual elements of compensation (including the
compensation mix) as well as the aggregate total amount of
actual and projected compensation and determine whether the
executives compensation is reasonable. Although the tally
sheets are not used to benchmark total compensation with our
peer companies, the Committee considers total compensation paid
to executives at our peer companies in considering the
reasonableness of our executives compensation.
Analysis Summary. Based on benchmarking
analysis, review of the tally sheets, and review of other
information presented by the Committees compensation
consultant, the Committee determined that the named executive
officers compensation is performance-oriented,
competitive, designed to align with our strategic goals and
reasonable.
Other
Issues and Policies
Employment Agreements. Absent special
circumstances (e.g., executives employed as a result of
an acquisition), TSYS executives generally do not have
employment agreements. None of the named executive officers has
an employment agreement.
Perquisites. Perquisites are a very small part
of our executive compensation program. Perquisites are offered
to align our compensation program with competitive practices
because similar positions at the peer companies offer similar
perquisites. Perquisites are not tied to performance measures.
Additional information on perquisites is set forth in footnote
(5) of the Summary Compensation Table on page 33.
Considered both individually and in the aggregate, we believe
that the perquisites we offer to our named executive officers
are reasonable and appropriate.
Post-Termination Compensation
Philosophy. TSYS executive compensation
program is designed to reflect TSYS philosophy that
compensation should generally be earned by executives while they
are actively employed (i.e., while contributing to
TSYS performance). Although retirement benefits are paid
following an executives retirement, the benefits are
earned while employed and are substantially related to
performance, as described above. TSYS has entered into limited
post-termination arrangements when appropriate, such as the
change of control agreements which are described under
Potential Payouts Upon Termination or
Change-in-Control
on page 38. TSYS chose to enter into change of control
arrangements with its executives to: (1) ensure the
retention of executives and an orderly transition during a
change of control; (2) ensure that executives would be
financially protected in the event of a change of control so
they continue to act in the best interests of TSYS while
continuing to manage TSYS during a change of control; and
(3) ensure a competitive compensation package because such
arrangements are common in the market and it was determined that
the agreements were important in recruiting and retaining
executive talent.
29
Stock Ownership Guidelines. To align the
interests of our executives with our shareholders, TSYS has
implemented stock ownership guidelines for our executives. Under
the guidelines, executives are required to own a multiple of
their base pay in TSYS stock. TSYS Chief Executive Officer
is required to own TSYS stock valued at five times his base
salary, the President is required to own TSYS stock valued at
four times his base salary and the other named executive
officers are required to own TSYS stock valued at three times
their base salaries. Executives generally have a five-year grace
period to comply with the guidelines, with an interim three-year
goal. Until the guidelines are met, executives are required to
retain all net shares received upon the exercise of stock
options, excluding shares used to pay the options exercise
price and any taxes due upon exercise. In the event of a severe
financial hardship, the guidelines permit the development of an
alternative ownership plan by the Chairman of the Board of
Directors and Chairman of the Committee. All named executive
officers are currently in compliance with the guidelines.
Recoveries. Under TSYS
clawback policy, the Committee may direct that TSYS
recover all or a portion of any incentive award granted or paid
if the incentive award is computed using materially misstated
financial information or other performance metric criteria. The
amount to be recovered is equal to the excess of the incentive
award paid or granted over the incentive award that would have
been paid or granted had the financial information or
performance metric been fairly stated at the time the incentive
award was paid or granted, or any greater or lesser amount (up
to the entire incentive award) that the Committee determines.
The Committee may use one or more of the following methods to
effect a recovery: seek repayment, reduce (subject to applicable
law) the amount that would otherwise have been paid, or withhold
payment of future increases in compensation or grants of
compensatory awards.
Tax Considerations. In making compensation
decisions the Committee considers that Internal Revenue Code
Section 162(m) limits deductions for compensation paid in
excess of $1 million to certain executive officers, with an
exception for performance-based compensation. Base pay of each
of our named executive officers is tax-deductible because it is
less than $1 million. We have designed much of the other
compensation paid to our named executive officers to qualify for
the performance-based exception. When necessary to meet the
requirements for deductibility under the Internal Revenue Code,
members of the Committee may abstain from voting on
performance-based compensation.
TSYS may elect to provide compensation that is not
tax-deductible if we believe the benefits of doing so outweigh
the loss of a tax deduction. At this time, TSYS is not entitled
to a deduction for certain costs related to an executives
personal use of corporate aircraft. We believe that a limited
amount of personal use each year is an appropriate perquisite
for our executives, despite the loss of a tax deduction.
With the exception of excise taxes that may be due with respect
to the change of control agreements, TSYS does not
gross-up its named executive officers for taxes that
are due with respect to their compensation. An estimate of the
potential excise taxes payable in connection with a change in
control is included under Potential Payouts Upon
Termination or
Change-in-Control
on page 38.
Consideration of Risk. TSYS executive
compensation program provides payment opportunities related to
different time periods (i.e., short and long-term
components); however, TSYS does not offer incentives that
promote short-term objectives at the expense of long-term
shareholder value. Elements of compensation include current cash
payments, deferred cash and equity awards. Payouts are based on
a combination of financial metrics and stock performance.
Amounts paid to executives under our program are reasonable
compared to market, and the Committee retains significant
discretion to limit performance-based compensation. The
Committee considers the risks inherent in our executive
compensation program, and the Committee has determined that our
program is balanced and does not encourage executives to take
unnecessary and excessive risks.
Accounting Considerations. We account for all
compensation paid in accordance with accounting principles
generally accepted in the United States. The accounting
treatment has generally not affected the form of compensation
paid to the named executive officers.
30
Compensation
Realized By Named Executive Officers for 2009
The Summary Compensation Table on page 33 provides
compensation information for each named executive officer as
required by SEC rules. However, the Summary Compensation Table
includes amounts that were not realized by the executives in
connection with the 2009 year. For example, the Summary
Compensation Table reflects grant date fair values of equity
awards (i.e., options, restricted stock and performance
shares) for 2009 rather than the financial benefit realized by
the executives in 2009 as a result of the exercise of stock
options or the vesting of restricted shares. This information
is, however, set forth in the Option Exercises and Stock Vested
table on page 39.
The following table only reflects compensation realized by each
executive for 2009 and is not a substitute for the Summary
Compensation Table. In addition, it is not part of the
compensation tables that we are required by SEC rules to present
in this Proxy Statement. Furthermore, it does not include a
number of compensation opportunities that were made available in
2009. For example, the LTIP awards for 2009 are not included in
the table because the awards did not vest during 2009. Detailed
information on all compensation opportunities that were made
available in 2009 and all compensation paid to or earned by the
named executive officers during 2009 is included in this
CD&A and the series of tables following this CD&A.
Although various compensation opportunities for the named
executive officers are not included in the following table, the
Compensation Committee considered all amounts paid to or earned
by the named executive officers and all compensation
opportunities in its determination that the compensation paid to
or earned by each named executive officer in 2009 is
performance-oriented, competitive, designed to align with our
strategic goals and reasonable.
The following table reflects the components of the compensation
realized by the named executive officers for 2009:
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|
|
|
|
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|
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|
|
|
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|
|
|
|
|
|
|
|
|
|
|
Value Realized on
|
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|
|
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|
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|
|
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|
Vesting of
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|
|
|
|
|
|
Annual Cash Bonus
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Value Realized on
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Restricted Stock
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|
|
|
|
|
|
|
|
Paid at 0% of
|
|
Exercise of Options
|
|
Awards During
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All Other
|
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|
Name and Principal Position
|
|
Base Pay
|
|
Target(1)
|
|
During 2009(2)
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2009(3)
|
|
Compensation(4)
|
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Total
|
|
Philip W. Tomlinson
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|
$
|
840,000
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
729,306
|
|
|
$
|
321,470
|
|
|
$
|
1,890,776
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|
Chairman of the Board and
Chief Executive Officer
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
James B. Lipham
|
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|
382,250
|
|
|
|
0
|
|
|
|
0
|
|
|
|
206,847
|
|
|
|
155,202
|
|
|
|
744,299
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|
Senior Executive Vice
President and Chief
Financial Officer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
M. Troy Woods
|
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|
610,000
|
|
|
|
0
|
|
|
|
0
|
|
|
|
580,223
|
|
|
|
325,490
|
|
|
|
1,515,713
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|
President and Chief
Operating Officer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
William A. Pruett
|
|
|
440,000
|
|
|
|
0
|
|
|
|
0
|
|
|
|
227,292
|
|
|
|
124,955
|
|
|
|
792,247
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|
Senior Executive Vice
President and Chief Client
Officer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Kenneth L. Tye
|
|
|
440,000
|
|
|
|
0
|
|
|
|
0
|
|
|
|
219,314
|
|
|
|
117,971
|
|
|
|
777,285
|
|
Senior Executive Vice
President and Chief
Information Officer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
|
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|
|
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|
(1)
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No annual cash bonuses were paid
under the AIP for 2009 performance.
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(2)
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No named executive officer
exercised any options during 2009. All outstanding vested
options held by the named executive officers as of
December 31, 2009 were underwater. For a
complete list of each named executive officers outstanding
options, see columns 1-5 of the Outstanding Equity Awards at
Fiscal Year-End table on page 35.
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(3)
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The value realized on vesting means
the amount equal to the number of shares acquired upon vesting
multiplied by the closing price of TSYS stock on the NYSE on the
date of vesting. For a complete list of each named executive
officers unvested restricted stock awards and performance
shares, see columns 6-9 of the Outstanding Equity Awards at
Fiscal Year-End table on page 35.
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(4)
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The components of All Other
Compensation for each named executive officer are set forth in
footnotes (4) and (5) to the Summary Compensation
Table on page 33.
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31
Significant
Events After December 31, 2009
Because of the uncertainties in the current economic environment
that impact the credit card market, base pay for the named
executive officers was not increased effective January 1,
2010. The Committee will revisit this issue after the financial
results for the first quarter of 2010 become available.
The Committee is in the process of reviewing the AIP and the
LTIP to determine if better alignment of incentive compensation
with corporate strategy is appropriate for 2010.
Conclusion
For the reasons described above, we believe that each element of
compensation in our executive compensation program and the total
compensation paid to or earned by each named executive officer
in 2009 is performance-oriented, competitive, designed to align
with our strategic goals and reasonable.
COMPENSATION
COMMITTEE REPORT
The Compensation Committee has reviewed and discussed the
Compensation Discussion and Analysis required by
Item 402(b) of
Regulation S-K
with management and, based on such review and discussions, has
recommended to the Board that the Compensation Discussion and
Analysis be included in this Proxy Statement and incorporated by
reference in TSYS Annual Report on
Form 10-K
for the year ended December 31, 2009 filed with the
Securities and Exchange Commission.
The Compensation Committee
Mason H. Lampton, Chairman
Kriss Cloninger III
Walter W. Driver, Jr.
32
COMPENSATION
TABLES AND NARRATIVES
SUMMARY
COMPENSATION TABLE
The table below summarizes the compensation for each of the
named executive officers for each of the last three fiscal years.
The named executive officers were not entitled to receive
payments which would be characterized as Bonus
payments for any of these fiscal years. The short-term incentive
amounts paid to the named executives for these fiscal years are
set forth in the Non-Equity Incentive Plan
Compensation column. TSYS methodology and rationale
for short-term incentive compensation are described in the
Compensation Discussion and Analysis above.
The named executive officers did not receive any compensation
that is reportable under the Change in Pension Value and
Nonqualified Deferred Compensation Earnings column because
TSYS has no defined benefit pension plans and does not pay
above-market interest on deferred compensation. The retirement
plan contributions and earnings, if applicable, for the named
executive officers for these three fiscal years are set forth in
the All Other Compensation column.
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|
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|
|
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|
|
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|
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|
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Change in
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|
Pension
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|
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Value and
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|
|
|
|
|
|
|
|
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|
Non-Equity
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|
Nonquali-
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
Incentive
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|
fied
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
Plan
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|
Deferred
|
|
All Other
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|
|
|
|
|
|
|
|
|
|
Stock
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|
Option
|
|
Com-
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|
Compensation
|
|
Com-
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|
|
|
|
|
|
Salary
|
|
Bonus
|
|
Awards
|
|
Awards
|
|
pensation
|
|
Earnings
|
|
pensation
|
|
|
Name and Principal Position
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|
Year
|
|
($)
|
|
($)
|
|
($)(1)
|
|
($)(1)
|
|
($)(3)
|
|
($)
|
|
($)
|
|
Total ($)
|
|
Philip W. Tomlinson
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|
|
2009
|
|
|
$
|
840,000
|
|
|
|
|
|
|
$
|
1,459,382
|
(2)
|
|
$
|
1,417,621
|
|
|
$
|
0
|
|
|
|
|
|
|
$
|
321,470
|
(4)(5)
|
|
$
|
4,038,473
|
|
Chairman of the Board
|
|
|
2008
|
|
|
|
827,774
|
|
|
|
|
|
|
|
2,246,533
|
|
|
|
1,831,810
|
|
|
|
206,943
|
|
|
|
|
|
|
|
178,567
|
|
|
|
5,291,627
|
|
and Chief Executive Officer
|
|
|
2007
|
|
|
|
711,833
|
|
|
|
|
|
|
|
802,882
|
|
|
|
3,585,293
|
|
|
|
960,930
|
|
|
|
|
|
|
|
656,940
|
|
|
|
6,717,878
|
|
James B. Lipham
|
|
|
2009
|
|
|
|
382,250
|
|
|
|
|
|
|
|
274,881
|
(2)
|
|
|
387,062
|
|
|
|
0
|
|
|
|
|
|
|
|
155,202
|
(4)(5)
|
|
|
1,199,395
|
|
Senior Executive Vice
|
|
|
2008
|
|
|
|
382,261
|
|
|
|
|
|
|
|
1,204,934
|
|
|
|
566,159
|
|
|
|
81,230
|
|
|
|
|
|
|
|
85,610
|
|
|
|
2,320,194
|
|
President and Chief Financial Officer
|
|
|
2007
|
|
|
|
347,500
|
|
|
|
|
|
|
|
124,682
|
|
|
|
1,748,514
|
|
|
|
398,790
|
|
|
|
|
|
|
|
203,556
|
|
|
|
2,823,042
|
|
M. Troy Woods
|
|
|
2009
|
|
|
|
610,000
|
|
|
|
|
|
|
|
1,124,211
|
(2)
|
|
|
1,029,460
|
|
|
|
0
|
|
|
|
|
|
|
|
325,490
|
(4)(5)
|
|
|
3,089,161
|
|
President and Chief
|
|
|
2008
|
|
|
|
610,018
|
|
|
|
|
|
|
|
1,783,029
|
|
|
|
1,381,035
|
|
|
|
152,504
|
|
|
|
|
|
|
|
145,539
|
|
|
|
4,072,125
|
|
Operating Officer
|
|
|
2007
|
|
|
|
500,000
|
|
|
|
|
|
|
|
565,627
|
|
|
|
2,194,167
|
|
|
|
675,000
|
|
|
|
|
|
|
|
472,264
|
|
|
|
4,407,058
|
|
William A. Pruett
|
|
|
2009
|
|
|
|
440,000
|
|
|
|
|
|
|
|
316,412
|
(2)
|
|
|
445,536
|
|
|
|
0
|
|
|
|
|
|
|
|
124,955
|
(4)(5)
|
|
|
1,326,903
|
|
Senior Executive Vice
|
|
|
2008
|
|
|
|
440,013
|
|
|
|
|
|
|
|
1,279,674
|
|
|
|
659,440
|
|
|
|
93,503
|
|
|
|
|
|
|
|
98,513
|
|
|
|
2,571,143
|
|
President and Chief Client Officer
|
|
|
2007
|
|
|
|
416,000
|
|
|
|
|
|
|
|
148,505
|
|
|
|
1,960,847
|
|
|
|
477,360
|
|
|
|
|
|
|
|
218,692
|
|
|
|
3,221,404
|
|
Kenneth L. Tye
|
|
|
2009
|
|
|
|
440,000
|
|
|
|
|
|
|
|
316,412
|
(2)
|
|
|
445,536
|
|
|
|
0
|
|
|
|
|
|
|
|
117,971
|
(4)(5)
|
|
|
1,319,919
|
|
Senior Executive Vice
|
|
|
2008
|
|
|
|
440,013
|
|
|
|
|
|
|
|
1,273,679
|
|
|
|
651,687
|
|
|
|
93,503
|
|
|
|
|
|
|
|
90,019
|
|
|
|
2,548,901
|
|
President and Chief
|
|
|
2007
|
|
|
|
400,000
|
|
|
|
|
|
|
|
140,626
|
|
|
|
1,813,011
|
|
|
|
459,000
|
|
|
|
|
|
|
|
199,144
|
|
|
|
3,011,781
|
|
Information Officer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
The amounts in these columns
represent the aggregate grant date fair value of the awards
reported in these columns computed in accordance with FASB ASC
Topic 718. For stock awards subject to performance conditions,
the value at the grant date is based upon the probable outcome
of such conditions in accordance with FASB ASC Topic 718,
excluding the effect of estimated forfeitures. The values of the
performance share awards to the named executive officers
assuming that the highest level of performance conditions will
be attained are $2,490,944, $680,117, $1,808,898, $782,875 and
$782,875 for Messrs. Tomlinson, Lipham, Woods, Pruett and
Tye, respectively, in 2009 and $2,686,930, $779,074, $2,072,066,
$896,801 and $896,801 for Messrs. Tomlinson, Lipham, Woods,
Pruett and Tye, respectively, in 2008. For a discussion of the
assumptions used in calculating the values of the awards
reported in these columns, see Note 16 of Notes to
Consolidated Financial Statements in TSYS Annual Report
for the year ended December 31, 2009. Additional
information regarding the 2009 awards is set forth in the Grants
of Plan-Based Awards table below.
|
|
(2)
|
|
This amount includes the aggregate
grant date fair value of the performance shares awarded in 2009,
all of which have been forfeited because the 2009 growth in EPS
performance measure was not met.
|
|
(3)
|
|
The amounts in this column
represent the Annual Incentive Program cash awards paid.
|
|
(4)
|
|
Amount includes allocations to
qualified defined contribution plans of $17,150 for each
executive and allocations to nonqualified deferred compensation
plans (including earnings) of $282,225, $118,553, $298,085,
$96,938 and $88,586 for Messrs. Tomlinson, Lipham, Woods,
Pruett and Tye, respectively.
|
|
(5)
|
|
Amount for each executive includes
the cost incurred by TSYS in connection with providing the
perquisite of an automobile allowance, the incremental cost to
TSYS for reimbursement of club dues, if any, and the actuarial
value of providing term life insurance like coverage. The amount
also includes the cost incurred by TSYS for security alarm
monitoring and for tax return preparation services for each
executive except Mr. Pruett, the incremental cost to TSYS
for personal use of the corporate aircraft for each executive
except Mr. Tye and the cost incurred by TSYS for providing
financial planning services for Messrs. Tomlinson and Tye.
None of these perquisites individually exceeded $25,000. The
aggregate incremental cost incurred by TSYS in connection with
providing perquisites was $22,095, $19,499, $10,255, $10,867 and
$12,235 for Messrs. Tomlinson, Lipham, Woods, Pruett and
Tye, respectively.
|
33
GRANTS OF
PLAN-BASED AWARDS
in 2009
The table below sets forth the short-term incentive compensation
(payable in cash) and long-term incentive compensation (paid in
the form of performance-based awards and stock options) awarded
to the named executive officers in 2009.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
All Other
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option
|
|
|
|
Grant
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Awards:
|
|
Exercise
|
|
Date Fair
|
|
|
|
|
|
|
Estimated Future Payouts
|
|
Estimated Future Payouts
|
|
Number of
|
|
or Base
|
|
Value of
|
|
|
|
|
|
|
Under Non-Equity Incentive
|
|
Under Equity Incentive
|
|
Securities
|
|
Price of
|
|
Stock
|
|
|
|
|
Action
|
|
Plan Awards(2)
|
|
Plan Awards
|
|
Underlying
|
|
Option
|
|
and
|
|
|
Grant
|
|
Date
|
|
Threshold
|
|
Target
|
|
Maximum
|
|
Threshold
|
|
Target
|
|
Maximum
|
|
Options
|
|
Awards
|
|
Option
|
Name
|
|
Date
|
|
(1)
|
|
($)
|
|
($)
|
|
($)
|
|
(#/$)
|
|
(#/$)
|
|
(#/$)
|
|
(#)(3)
|
|
($/Sh)
|
|
Awards
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Philip W. Tomlinson
|
|
|
|
|
|
|
|
|
|
$
|
0
|
|
|
$
|
840,000
|
|
|
$
|
1,680,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2/3/2009
|
|
|
|
1/26/2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
266,972
|
|
|
$
|
13.11
|
|
|
$
|
1,417,621
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2/3/2009
|
|
|
|
1/26/2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
0
|
(4)
|
|
$
|
1,050,000
|
(4)
|
|
$
|
2,520,000
|
(4)
|
|
|
|
|
|
|
|
|
|
|
1,006,756
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3/30/2009
|
|
|
|
3/30/2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
0
|
(5)
|
|
|
14,781
|
(5)
|
|
|
14,781
|
(5)
|
|
|
|
|
|
|
|
|
|
|
202,352
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3/30/2009
|
|
|
|
3/30/2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
0
|
(6)
|
|
|
18,282
|
(6)
|
|
|
18,282
|
(6)
|
|
|
|
|
|
|
|
|
|
|
250,274
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
James B. Lipham
|
|
|
|
|
|
|
|
|
|
|
0
|
|
|
|
382,250
|
|
|
|
649,825
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2/3/2009
|
|
|
|
1/26/2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
72,893
|
|
|
|
13.11
|
|
|
|
387,062
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2/3/2009
|
|
|
|
1/26/2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
0
|
(4)
|
|
$
|
286,688
|
(4)
|
|
$
|
688,050
|
(4)
|
|
|
|
|
|
|
|
|
|
|
274,881
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
M. Troy Woods
|
|
|
|
|
|
|
|
|
|
|
0
|
|
|
|
610,000
|
|
|
|
1,220,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2/3/2009
|
|
|
|
1/26/2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
193,872
|
|
|
|
13.11
|
|
|
|
1,029,460
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2/3/2009
|
|
|
|
1/26/2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
0
|
(4)
|
|
$
|
762,500
|
(4)
|
|
$
|
1,830,000
|
(4)
|
|
|
|
|
|
|
|
|
|
|
731,096
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3/30/2009
|
|
|
|
3/30/2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
0
|
(5)
|
|
|
10,434
|
(5)
|
|
|
10,434
|
(5)
|
|
|
|
|
|
|
|
|
|
|
142,841
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3/30/2009
|
|
|
|
3/30/2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
0
|
(6)
|
|
|
18,282
|
(6)
|
|
|
18,282
|
(6)
|
|
|
|
|
|
|
|
|
|
|
250,274
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
William A. Pruett
|
|
|
|
|
|
|
|
|
|
|
0
|
|
|
|
440,000
|
|
|
|
748,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2/3/2009
|
|
|
|
1/26/2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
83,905
|
|
|
|
13.11
|
|
|
|
445,536
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2/3/2009
|
|
|
|
1/26/2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
0
|
(4)
|
|
$
|
330,000
|
(4)
|
|
$
|
792,000
|
(4)
|
|
|
|
|
|
|
|
|
|
|
316,412
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Kenneth L. Tye
|
|
|
|
|
|
|
|
|
|
|
0
|
|
|
|
440,000
|
|
|
|
748,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2/3/2009
|
|
|
|
1/26/2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
83,905
|
|
|
|
13.11
|
|
|
|
445,536
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2/3/2009
|
|
|
|
1/26/2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
0
|
(4)
|
|
$
|
330,000
|
(4)
|
|
$
|
792,000
|
(4)
|
|
|
|
|
|
|
|
|
|
|
316,412
|
|
|
|
|
(1)
|
|
The Compensation Committee met on
January 26, 2009 and approved the grant of equity awards to
the named executive officers effective February 3, 2009.
The Committee also met on March 30, 2009 and determined the
payout schedule for 2009 performance for previously approved
performance-based awards for the named executive officers.
|
|
(2)
|
|
The amounts shown in these columns
represent the threshold, target and maximum amounts payable
under the Annual Incentive Program for 2009. Awards are paid in
cash and are based upon attainment of earnings per share
percentage growth goals. No annual cash bonuses were paid to the
named executive officers for 2009.
|
|
(3)
|
|
These stock options vest in three
annual installments of one-third (1/3) each, beginning on the
first anniversary of the grant date.
|
|
(4)
|
|
The amounts shown represent the
potential value, in dollars, of the equity payout for these
performance share awards if the threshold, target or maximum
goals are achieved. As of December 31, 2009, the number of
performance shares to be awarded was not determinable. The
Compensation Committee met on January 19, 2010 and
determined that none of these performance shares will vest, and
the performance shares were forfeited. The actual number of
shares that could have been issued depended on the outcome of
two performance measures: a 2009 growth in earnings per share
measure and a three-year total shareholder return measure from
January 1, 2009 through December 31, 2011. Vesting
would have occurred upon the Compensation Committees
certification subsequent to December 31, 2011 of the
attainment of the performance measure. After the first
performance measurement period ended, dividend equivalents equal
to cash dividends on TSYS stock would have been paid on 80% of
the number of shares earned from the earnings per share
measurement. The dividend equivalents would have been paid out
in the form of TSYS stock to the extent that the performance
shares were earned.
|
|
(5)
|
|
The amounts shown represent the
threshold, target and maximum payout amounts that were
determined by the payout schedule approved by the Compensation
Committee on March 30, 2009 for these shares, which are the
remaining unvested portion of performance-based restricted stock
awarded to Messrs. Tomlinson and Woods effective
January 20, 2005. The 2005 award provided for a five to
seven-year vesting period, with 20% of the shares vesting in any
year in which performance measures established annually by the
Compensation Committee are attained. The Committee met on
January 19, 2010 and determined that the performance
measure for 2009 was attained, and therefore, these shares
vested.
|
|
(6)
|
|
The amounts shown represent the
threshold, target and maximum payout amounts that were
determined by the payout schedule approved by the Compensation
Committee on March 30, 2009 for these shares, which
represent 20% of performance-based restricted stock awarded to
Messrs. Tomlinson and Woods effective February 6, 2008. The
2008 award provided for a five to seven-year vesting period,
with 20% of the shares vesting in any year in which performance
measures established annually by the Compensation Committee are
attained. The Committee met on January 19, 2010 and
determined that the performance measure for 2009 was attained,
and therefore these shares vested.
|
34
OUTSTANDING
EQUITY AWARDS AT FISCAL YEAR-END
December 31, 2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option Awards
|
|
Stock Awards
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Incentive
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Plan
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Awards
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number
|
|
Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
Number
|
|
|
|
of
|
|
Incentive Plan
|
|
|
|
|
|
|
|
|
|
|
|
|
of
|
|
|
|
Unearned
|
|
Awards:
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares
|
|
Market
|
|
Shares,
|
|
Market or
|
|
|
|
|
Number of
|
|
Number of
|
|
|
|
|
|
or Units
|
|
Value of
|
|
Units or
|
|
Payout Value of
|
|
|
|
|
Securities
|
|
Securities
|
|
|
|
|
|
of Stock
|
|
Shares or
|
|
Other
|
|
Unearned
|
|
|
|
|
Underlying
|
|
Underlying
|
|
|
|
|
|
That
|
|
Units of
|
|
Rights
|
|
Shares, Units or
|
|
|
|
|
Unexercised
|
|
Unexercised
|
|
Option
|
|
|
|
Have
|
|
Stock That
|
|
That
|
|
Other Rights
|
|
|
Option
|
|
Options
|
|
Options
|
|
Exercise
|
|
Option
|
|
Not
|
|
Have Not
|
|
Have Not
|
|
That Have Not
|
|
|
Grant
|
|
(#)
|
|
(#)
|
|
Price
|
|
Expiration
|
|
Vested
|
|
Vested
|
|
Vested
|
|
Vested
|
Name
|
|
Date(1)
|
|
Exercisable
|
|
Unexercisable(2)
|
|
($)
|
|
Date
|
|
(#)
|
|
($)
|
|
(#)
|
|
($)
|
|
Philip W. Tomlinson
|
|
|
1/20/2000
|
|
|
|
34,025
|
|
|
|
|
|
|
$
|
18.87
|
|
|
|
1/19/2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1/17/2001
|
|
|
|
28,596
|
|
|
|
|
|
|
|
27.62
|
|
|
|
1/16/2011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5/10/2001
|
|
|
|
478,652
|
|
|
|
|
|
|
|
30.29
|
|
|
|
5/9/2011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4/29/2002
|
|
|
|
36,576
|
|
|
|
|
|
|
|
27.69
|
|
|
|
4/28/2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1/21/2004
|
|
|
|
55,704
|
|
|
|
|
|
|
|
26.85
|
|
|
|
1/20/2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1/21/2005
|
|
|
|
62,963
|
|
|
|
|
|
|
|
28.02
|
|
|
|
1/20/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1/31/2006
|
|
|
|
89,712
|
|
|
|
|
|
|
|
28.91
|
|
|
|
1/30/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1/31/2007
|
|
|
|
19,548
|
|
|
|
9,774
|
|
|
|
33.36
|
|
|
|
1/30/2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2/6/2008
|
|
|
|
16,104
|
|
|
|
32,697
|
|
|
|
21.88
|
|
|
|
2/5/2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3/31/2008
|
|
|
|
45,969
|
|
|
|
93,331
|
|
|
|
23.66
|
|
|
|
3/30/2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2/3/2009
|
|
|
|
|
|
|
|
266,972
|
|
|
|
13.11
|
|
|
|
2/2/2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,482
|
(3)
|
|
$
|
60,134
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10,899
|
(4)
|
|
|
188,226
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
16,280
|
(5)
|
|
$
|
281,156
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(6)
|
|
|
0
|
(7)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
14,781
|
(8)
|
|
|
255,268
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
73,126
|
(9)
|
|
|
1,262,886
|
|
James B. Lipham
|
|
|
1/20/2000
|
|
|
|
10,717
|
|
|
|
|
|
|
|
18.87
|
|
|
|
1/19/2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1/17/2001
|
|
|
|
14,933
|
|
|
|
|
|
|
|
27.62
|
|
|
|
1/16/2011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5/10/2001
|
|
|
|
382,921
|
|
|
|
|
|
|
|
30.29
|
|
|
|
5/9/2011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4/29/2002
|
|
|
|
12,734
|
|
|
|
|
|
|
|
27.69
|
|
|
|
4/28/2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1/21/2004
|
|
|
|
22,062
|
|
|
|
|
|
|
|
26.85
|
|
|
|
1/20/2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1/21/2005
|
|
|
|
11,644
|
|
|
|
|
|
|
|
28.02
|
|
|
|
1/20/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1/31/2006
|
|
|
|
33,607
|
|
|
|
|
|
|
|
28.91
|
|
|
|
1/30/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1/31/2007
|
|
|
|
7,476
|
|
|
|
3,738
|
|
|
|
33.36
|
|
|
|
1/30/2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2/6/2008
|
|
|
|
5,896
|
|
|
|
11,972
|
|
|
|
21.88
|
|
|
|
2/5/2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3/31/2008
|
|
|
|
13,328
|
|
|
|
27,062
|
|
|
|
23.66
|
|
|
|
3/30/2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2/3/2009
|
|
|
|
|
|
|
|
72,893
|
|
|
|
13.11
|
|
|
|
2/2/2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,333
|
(3)
|
|
|
23,021
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,991
|
(4)
|
|
|
68,925
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
27,423
|
(10)
|
|
|
473,595
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,445
|
(5)
|
|
|
76,765
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(6)
|
|
|
0
|
(7)
|
M. Troy Woods
|
|
|
1/20/2000
|
|
|
|
12,555
|
|
|
|
|
|
|
|
18.87
|
|
|
|
1/19/2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1/17/2001
|
|
|
|
17,157
|
|
|
|
|
|
|
|
27.62
|
|
|
|
1/16/2011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5/10/2001
|
|
|
|
382,921
|
|
|
|
|
|
|
|
30.29
|
|
|
|
5/9/2011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4/29/2002
|
|
|
|
14,630
|
|
|
|
|
|
|
|
27.69
|
|
|
|
4/28/2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1/21/2004
|
|
|
|
26,400
|
|
|
|
|
|
|
|
26.85
|
|
|
|
1/20/2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1/21/2005
|
|
|
|
21,415
|
|
|
|
|
|
|
|
28.02
|
|
|
|
1/20/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1/31/2006
|
|
|
|
61,611
|
|
|
|
|
|
|
|
28.91
|
|
|
|
1/30/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1/31/2007
|
|
|
|
13,732
|
|
|
|
6,865
|
|
|
|
33.36
|
|
|
|
1/30/2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2/6/2008
|
|
|
|
11,311
|
|
|
|
22,967
|
|
|
|
21.88
|
|
|
|
2/5/2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3/31/2008
|
|
|
|
35,450
|
|
|
|
71,975
|
|
|
|
23.66
|
|
|
|
3/30/2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2/3/2009
|
|
|
|
|
|
|
|
193,872
|
|
|
|
13.11
|
|
|
|
2/2/2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,447
|
(3)
|
|
|
42,260
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7,656
|
(4)
|
|
|
132,219
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
11,823
|
(5)
|
|
|
204,183
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(6)
|
|
|
0
|
(7)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10,434
|
(8)
|
|
|
180,195
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
73,126
|
(9)
|
|
|
1,262,886
|
|
35
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option Awards
|
|
Stock Awards
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Incentive
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Plan
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Awards
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number
|
|
Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
Number
|
|
|
|
of
|
|
Incentive Plan
|
|
|
|
|
|
|
|
|
|
|
|
|
of
|
|
|
|
Unearned
|
|
Awards:
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares
|
|
Market
|
|
Shares,
|
|
Market or
|
|
|
|
|
Number of
|
|
Number of
|
|
|
|
|
|
or Units
|
|
Value of
|
|
Units or
|
|
Payout Value of
|
|
|
|
|
Securities
|
|
Securities
|
|
|
|
|
|
of Stock
|
|
Shares or
|
|
Other
|
|
Unearned
|
|
|
|
|
Underlying
|
|
Underlying
|
|
|
|
|
|
That
|
|
Units of
|
|
Rights
|
|
Shares, Units or
|
|
|
|
|
Unexercised
|
|
Unexercised
|
|
Option
|
|
|
|
Have
|
|
Stock That
|
|
That
|
|
Other Rights
|
|
|
Option
|
|
Options
|
|
Options
|
|
Exercise
|
|
Option
|
|
Not
|
|
Have Not
|
|
Have Not
|
|
That Have Not
|
|
|
Grant
|
|
(#)
|
|
(#)
|
|
Price
|
|
Expiration
|
|
Vested
|
|
Vested
|
|
Vested
|
|
Vested
|
Name
|
|
Date(1)
|
|
Exercisable
|
|
Unexercisable(2)
|
|
($)
|
|
Date
|
|
(#)
|
|
($)
|
|
(#)
|
|
($)
|
|
William A. Pruett
|
|
|
1/20/2000
|
|
|
|
12,555
|
|
|
|
|
|
|
|
18.87
|
|
|
|
1/19/2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1/17/2001
|
|
|
|
17,157
|
|
|
|
|
|
|
|
27.62
|
|
|
|
1/16/2011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5/10/2001
|
|
|
|
382,921
|
|
|
|
|
|
|
|
30.29
|
|
|
|
5/9/2011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4/29/2002
|
|
|
|
14,630
|
|
|
|
|
|
|
|
27.69
|
|
|
|
4/28/2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1/21/2004
|
|
|
|
26,400
|
|
|
|
|
|
|
|
26.85
|
|
|
|
1/20/2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1/21/2005
|
|
|
|
13,411
|
|
|
|
|
|
|
|
28.02
|
|
|
|
1/20/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1/31/2006
|
|
|
|
39,369
|
|
|
|
|
|
|
|
28.91
|
|
|
|
1/30/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1/31/2007
|
|
|
|
8,904
|
|
|
|
4,452
|
|
|
|
33.36
|
|
|
|
1/30/2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2/6/2008
|
|
|
|
7,058
|
|
|
|
14,332
|
|
|
|
21.88
|
|
|
|
2/5/2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3/31/2008
|
|
|
|
15,342
|
|
|
|
31,150
|
|
|
|
23.66
|
|
|
|
3/30/2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2/3/2009
|
|
|
|
|
|
|
|
83,905
|
|
|
|
13.11
|
|
|
|
2/2/2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,587
|
(3)
|
|
|
27,407
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,778
|
(4)
|
|
|
82,516
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
27,423
|
(10)
|
|
|
473,595
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5,117
|
(5)
|
|
|
88,371
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(6)
|
|
|
0
|
(7)
|
Kenneth L. Tye
|
|
|
1/20/2000
|
|
|
|
10,054
|
|
|
|
|
|
|
|
18.87
|
|
|
|
1/19/2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1/17/2001
|
|
|
|
14,616
|
|
|
|
|
|
|
|
27.62
|
|
|
|
1/16/2011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5/10/2001
|
|
|
|
382,921
|
|
|
|
|
|
|
|
30.29
|
|
|
|
5/9/2011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4/29/2002
|
|
|
|
12,463
|
|
|
|
|
|
|
|
27.69
|
|
|
|
4/28/2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1/21/2004
|
|
|
|
22,487
|
|
|
|
|
|
|
|
26.85
|
|
|
|
1/20/2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1/21/2005
|
|
|
|
11,845
|
|
|
|
|
|
|
|
28.02
|
|
|
|
1/20/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1/31/2006
|
|
|
|
36,617
|
|
|
|
|
|
|
|
28.91
|
|
|
|
1/30/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1/31/2007
|
|
|
|
8,432
|
|
|
|
4,215
|
|
|
|
33.36
|
|
|
|
1/30/2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2/6/2008
|
|
|
|
6,787
|
|
|
|
13,780
|
|
|
|
21.88
|
|
|
|
2/5/2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3/31/2008
|
|
|
|
15,342
|
|
|
|
31,150
|
|
|
|
23.66
|
|
|
|
3/30/2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2/3/2009
|
|
|
|
|
|
|
|
83,905
|
|
|
|
13.11
|
|
|
|
2/2/2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,503
|
(3)
|
|
|
25,957
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,594
|
(4)
|
|
|
79,338
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
27,423
|
(10)
|
|
|
473,595
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5,117
|
(5)
|
|
|
88,371
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(6)
|
|
|
0
|
(7)
|
|
|
|
(1)
|
|
For better understanding of this
table, we have included an additional column showing the grant
date of the stock options.
|
|
(2)
|
|
All of the stock options set forth
in this column are the remaining unvested portions of stock
option grants that, under the terms of the grant, were to vest
in three equal annual installments of one-third each beginning
on the first anniversary of the grant date. These unvested stock
options vest as follows: the stock options granted in 2007
vested on the third anniversary of the grant date, the stock
options granted in 2008 vest in two equal annual installments on
the second and third anniversaries of the grant date, and the
stock options granted in 2009 vest in three equal annual
installments beginning on the first anniversary of the grant
date.
|
|
(3)
|
|
These shares, which vested
January 31, 2010, are the remaining unvested portion of
restricted stock awards granted effective January 31, 2007.
|
|
(4)
|
|
These shares, which vest in two
equal annual installments on February 6, 2010 and
February 6, 2011, are the remaining unvested portion of
restricted stock awards granted effective February 6, 2008.
|
|
(5)
|
|
These amounts represent the number
of performance shares, awarded effective March 31, 2008,
that would vest if the threshold level of performance is
attained for the second of two performance measures. The actual
number of shares that will be issued to these executives depends
upon the outcome of two performance measures: a one-year growth
in earnings per share measure (for calendar year 2008) and
a three-year total shareholder return measure from
January 1, 2008 through December 31, 2010. Vesting
will occur upon the Compensation Committees certification
subsequent to December 31, 2010 of the attainment of the
performance measure. The Compensation Committee met on
January 26, 2009 and determined that the initial numbers of
performance shares at the end of the first performance measure
were
|
36
|
|
|
|
|
20,349, 5,556, 14,778, 6,396 and
6,396 shares for Messrs. Tomlinson, Lipham, Woods,
Pruett and Tye, respectively. These amounts are subject to up or
down adjustment of up to 20% based on TSYS performance for
the remainder of the performance period. The number of
performance shares shown in the table above assumes that the
threshold level of performance is attained for the second
performance measure and thus reflects a 20% downward adjustment
to the initial number of performance shares.
|
|
(6)
|
|
The Compensation Committee met on
January 19, 2010 and determined that performance shares
denominated in dollars that were awarded effective
February 3, 2009 will not vest, and the performance shares
were forfeited. The number of performance shares that were
awarded, and thus the number of performance shares that had not
vested, was not determined as of December 31, 2009. The
actual number of shares that could have been awarded depended on
the outcome of two performance measures: a 2009 growth in
earnings per share measure and a three-year total shareholder
return measure from January 1, 2009 through
December 31, 2011. Vesting would have occurred upon the
Compensation Committees certification subsequent to
December 31, 2011 of the attainment of the performance
measure.
|
|
(7)
|
|
The payout value reflects the
threshold performance level of attainment for this award, which
results in no payout to the named executive officers for this
award.
|
|
(8)
|
|
These shares are the remaining
unvested portion of performance-based restricted stock awarded
effective January 20, 2005. The 2005 award provided for a
five to seven-year vesting period, with 20% of the shares
vesting in any year in which performance measures established
annually by the Compensation Committee are attained. The
Compensation Committee met on January 19, 2010 and
determined that the performance measure for 2009 was attained,
and therefore these shares vested.
|
|
(9)
|
|
These shares represent the unvested
portion of the performance-based restricted stock awarded
effective February 6, 2008. The 2008 award provided for a
five to seven-year vesting period, with 20% of the shares
vesting in any year in which performance measures established
annually by the Compensation Committee are attained. The
Compensation Committee met on January 19, 2010 and
determined that the performance measure for 2009 was attained,
and therefore these shares vested.
|
|
(10)
|
|
These shares are the remaining
unvested portion of restricted stock awards granted effective
February 6, 2008 which vest in four equal annual
installments of one-fourth each on February 6, 2010,
February 6, 2011, February 6, 2012 and
February 6, 2013.
|
37
POTENTIAL
PAYOUTS UPON TERMINATION OR
CHANGE-IN-CONTROL
We have entered into change of control agreements with our named
executive officers. Under these agreements, benefits are payable
upon the occurrence of two events (also known as a double
trigger). The first event is a change of control and the
second event is the actual or constructive termination of the
executive within two years following the date of the change of
control. Change of control is defined, in general,
as the acquisition of 20% of TSYS stock by any
person as defined under the Securities Exchange Act
of 1934, turnover of more than one-third of the Board of
Directors of TSYS, a merger of TSYS with another company, or a
reorganization, sale or similar transaction, unless the former
shareholders of TSYS own more than 60% of the surviving entity.
For purposes of these agreements, a constructive termination is
a material adverse reduction in an executives position,
duties or responsibilities, relocation of the executive more
than 35 miles from where the executive is employed, or a
material reduction in the executives base salary, bonus or
other employee benefits.
In the event payments are triggered under the agreements, each
executive will receive three times his or her base salary as in
effect prior to the termination, three times a percentage of his
or her base salary equal to the average short-term incentive
award percentage earned over the previous three calendar years
prior to the termination, as well as a pro rata short-term
incentive award calculated at target for the year of
termination. These amounts will be paid to the executive in a
single lump-sum cash payment. Each executive will also receive
health and welfare benefits for a three-year period following
the second triggering event. In addition, each executive will
receive an amount that is designed to
gross-up
the executive for any excise taxes that are payable by the
executive as a result of the payments under the agreement, but
only if the total change of control payments to the executive
exceed 110% of the applicable IRS cap. The following table
quantifies the estimated amounts that would be payable under the
change of control agreements, assuming the triggering events
occurred on December 31, 2009.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pro Rata
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3-Years
|
|
Target
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Short-Term
|
|
Short-Term
|
|
Health &
|
|
Stock
|
|
Stock
|
|
|
|
|
|
|
3x
|
|
Incentive
|
|
Incentive
|
|
Welfare
|
|
Award
|
|
Option
|
|
Excise Tax
|
|
|
|
|
Base Salary
|
|
Award
|
|
Award
|
|
Benefits
|
|
Vesting(1)
|
|
Vesting(2)
|
|
Gross-up(3)
|
|
Total
|
|
Philip W. Tomlinson
|
|
$
|
2,520,000
|
|
|
$
|
2,444,400
|
|
|
$
|
840,000
|
|
|
$
|
56,016
|
|
|
$
|
2,117,941
|
|
|
$
|
|
|
|
|
|
|
|
$
|
7,978,357
|
|
James B. Lipham
|
|
|
1,146,750
|
|
|
|
940,335
|
|
|
|
324,913
|
|
|
|
56,016
|
|
|
|
661,493
|
|
|
|
|
|
|
|
|
|
|
|
3,129,507
|
|
M. Troy Woods
|
|
|
1,830,000
|
|
|
|
1,775,100
|
|
|
|
610,000
|
|
|
|
56,016
|
|
|
|
1,872,776
|
|
|
|
|
|
|
|
|
|
|
|
6,143,892
|
|
William A. Pruett
|
|
|
1,320,000
|
|
|
|
1,082,400
|
|
|
|
374,000
|
|
|
|
56,016
|
|
|
|
693,978
|
|
|
|
|
|
|
|
|
|
|
|
3,526,394
|
|
Kenneth L. Tye
|
|
|
1,320,000
|
|
|
|
1,082,400
|
|
|
|
374,000
|
|
|
|
56,016
|
|
|
|
693,978
|
|
|
|
|
|
|
$
|
356,467
|
|
|
|
3,882,861
|
|
|
|
|
(1)
|
|
Estimated by multiplying the stock
and performance share awards that vest upon a change of control
by the fair market value of TSYS stock on December 31, 2009.
|
|
(2)
|
|
Estimated by multiplying the number
of options that vest upon a change of control by the difference
in the fair market value on December 31, 2009 and the
exercise price. Because the fair market value of TSYS stock on
December 31, 2009 was less than the exercise price of all
unvested options held by each named executive officer, the
amount is estimated at zero for each executive.
|
|
(3)
|
|
Estimated by dividing the estimated
excise tax under Section 4999 of the Internal Revenue Code
by 43.55%, which percentage is designed to calculate the amount
of gross-up
payment necessary so the executive is placed in the same
position as though the excise tax did not apply. No
gross-up
payment is made if the change of control payment does not exceed
the applicable IRS cap by 110%.
|
Executives who receive these benefits are subject to a
confidentiality obligation with respect to secret and
confidential information about TSYS. There are no provisions
regarding a waiver of this confidentiality obligation. No
perquisites or other personal benefits are payable under the
change of control agreements.
The Non-Qualified Deferred Compensation Table sets forth the
amount and form of deferred compensation benefits that the named
executive officers would be entitled to receive upon their
termination of employment.
38
In addition to vesting upon a change of control, outstanding
stock options, restricted stock and performance share awards may
vest when named executive officers terminate employment under
other circumstances as follows:
|
|
|
|
|
Stock options held by the named executive officers will vest
upon death, disability, termination of employment after
age 62 or involuntary termination without cause;
|
|
|
|
Restricted stock awards held by the named executive officers
will vest upon death (other than by suicide) or disability, and
the Compensation Committee has the authority to determine
whether restricted stock will vest at retirement. Although
restricted stock awards are generally forfeited if a named
executive officer terminates for reasons other than death,
disability or retirement, the Committee has discretionary
authority to vest some of the outstanding awards; and
|
|
|
|
Performance share awards will vest upon death, disability or
termination of employment after age 62; provided, however,
that the amount paid at disability or post-age-62 termination
will be a pro rata portion based on the date of disability or
termination. The Committee has discretionary authority to vest
performance share awards if a named executive officer terminates
for reasons other than death, disability or termination of
employment after age 62.
|
OPTION
EXERCISES AND STOCK VESTED
in 2009
The following table sets forth the number and corresponding
value realized during 2009 with respect to restricted shares
that vested for each named executive officer. No stock options
were exercised by the named executives in 2009.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option Awards
|
|
Stock Awards
|
|
|
Number of Shares
|
|
|
|
Number of
|
|
|
|
|
Acquired on
|
|
Value Realized
|
|
Shares Acquired
|
|
Value Realized
|
|
|
Exercise
|
|
on Exercise
|
|
on Vesting
|
|
on Vesting
|
Name
|
|
(#)
|
|
($)
|
|
(#)
|
|
($)(1)
|
|
Philip W. Tomlinson
|
|
|
|
|
|
|
|
|
|
|
14,783
|
|
|
$
|
190,701
|
|
|
|
|
|
|
|
|
|
|
|
|
18,282
|
|
|
|
235,838
|
|
|
|
|
|
|
|
|
|
|
|
|
14,532
|
|
|
|
183,975
|
|
|
|
|
|
|
|
|
|
|
|
|
3,587
|
|
|
|
45,411
|
|
|
|
|
|
|
|
|
|
|
|
|
5,368
|
|
|
|
73,381
|
|
James B. Lipham
|
|
|
|
|
|
|
|
|
|
|
5,444
|
|
|
|
68,921
|
|
|
|
|
|
|
|
|
|
|
|
|
1,371
|
|
|
|
17,357
|
|
|
|
|
|
|
|
|
|
|
|
|
1,965
|
|
|
|
26,862
|
|
|
|
|
|
|
|
|
|
|
|
|
6,855
|
|
|
|
93,708
|
|
M. Troy Woods
|
|
|
|
|
|
|
|
|
|
|
10,435
|
|
|
|
134,612
|
|
|
|
|
|
|
|
|
|
|
|
|
18,282
|
|
|
|
235,838
|
|
|
|
|
|
|
|
|
|
|
|
|
9,980
|
|
|
|
126,347
|
|
|
|
|
|
|
|
|
|
|
|
|
2,519
|
|
|
|
31,891
|
|
|
|
|
|
|
|
|
|
|
|
|
3,770
|
|
|
|
51,536
|
|
William A. Pruett
|
|
|
|
|
|
|
|
|
|
|
6,378
|
|
|
|
80,745
|
|
|
|
|
|
|
|
|
|
|
|
|
1,634
|
|
|
|
20,686
|
|
|
|
|
|
|
|
|
|
|
|
|
2,352
|
|
|
|
32,152
|
|
|
|
|
|
|
|
|
|
|
|
|
6,855
|
|
|
|
93,708
|
|
Kenneth L. Tye
|
|
|
|
|
|
|
|
|
|
|
5,932
|
|
|
|
75,099
|
|
|
|
|
|
|
|
|
|
|
|
|
1,547
|
|
|
|
19,585
|
|
|
|
|
|
|
|
|
|
|
|
|
2,262
|
|
|
|
30,922
|
|
|
|
|
|
|
|
|
|
|
|
|
6,855
|
|
|
|
93,708
|
|
|
|
|
(1)
|
|
The value realized on vesting of
the indicated restricted shares means the amount equal to the
number of shares acquired upon vesting multiplied by the closing
price of TSYS stock on the NYSE on the date of vesting.
|
39
2009
NONQUALIFIED DEFERRED COMPENSATION
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Executive
|
|
Registrant
|
|
Aggregate
|
|
Aggregate
|
|
Aggregate
|
|
|
Contributions
|
|
Contributions
|
|
Earnings in
|
|
Withdrawals/
|
|
Balance at
|
|
|
in Last FY
|
|
in Last FY
|
|
Last FY
|
|
Distributions
|
|
Last FYE
|
Name
|
|
($)(1)
|
|
($)(2)
|
|
($)(2)
|
|
($)
|
|
($)(3)
|
|
Philip W. Tomlinson
|
|
|
|
|
|
$
|
56,136
|
|
|
$
|
226,089
|
|
|
|
|
|
|
$
|
1,407,222
|
|
James B. Lipham
|
|
|
|
|
|
|
15,294
|
|
|
|
103,260
|
|
|
|
|
|
|
|
445,951
|
|
M. Troy Woods
|
|
$
|
120,000
|
|
|
|
36,225
|
|
|
|
261,860
|
|
|
$
|
39,551
|
|
|
|
1,014,659
|
|
William A. Pruett
|
|
|
|
|
|
|
20,195
|
|
|
|
76,742
|
|
|
|
|
|
|
|
551,702
|
|
Kenneth L. Tye
|
|
|
|
|
|
|
20,195
|
|
|
|
68,391
|
|
|
|
|
|
|
|
458,787
|
|
|
|
|
(1)
|
|
The amount reported in this column
is reported in the Summary Compensation Table for 2009 as
Salary.
|
|
(2)
|
|
The amounts reported in these
columns are reported in the Summary Compensation Table for 2009
as All Other Compensation.
|
|
(3)
|
|
Of the balances reported in this
column, the amounts of $720,486, $249,538, $562,499, $287,050
and $283,516 with respect to Messrs. Tomlinson, Lipham,
Woods, Pruett and Tye, respectively, were reported in the
Summary Compensation Table as All Other Compensation
in previous years. In addition, Mr. Woods balance
includes deferred director fees and earnings on those fees of
$43,009. Employees who serve as directors are no longer
compensated for their services as directors.
|
The Deferred Plan replaces benefits lost by executives under the
qualified retirement plans due to IRS limits. Executives are
also permitted to defer all or a portion of their base salary or
short-term incentive award. Amounts deferred under the Deferred
Plan are deposited into a rabbi trust, and executives are
permitted to invest their accounts in mutual funds that are
generally the same as the mutual funds available in the
qualified 401(k) plan. A rabbi trust is a type of trust used to
defer taxation of certain compensation. Deferred Plan
participants may elect to withdraw their accounts as of a
specified date or upon their termination of employment.
Distributions can be made in a single lump sum or in annual
installments over a 2-10 year period, as elected by the
executive. The Directors Deferred Compensation Plan permits
directors to elect to defer director fees pursuant to similar
distribution and investment alternatives as the Deferred Plan.
40
CERTAIN
RELATIONSHIPS AND RELATED TRANSACTIONS
Related
Party Transaction Policy
The Board of Directors has adopted a written policy for the
review, approval or ratification of certain transactions with
related parties of TSYS, which policy is administered by the
Corporate Governance and Nominating Committee. Transactions that
are covered under the policy include any transaction,
arrangement or relationship, or series of similar transactions,
arrangements or relationships, in which: (1) the aggregate
amount involved will or may be expected to exceed $120,000 in
any calendar year; (2) TSYS is a participant; and
(3) any related party of TSYS (such as an executive
officer, director, nominee for election as a director or greater
than 5% beneficial owner of TSYS stock, or their immediate
family members) has or will have a direct or indirect interest.
Among other factors considered by the Committee when reviewing
the material facts of related party transactions, the Committee
must take into account whether the transaction is on terms no
less favorable than terms generally available to an unaffiliated
third party under the same or similar circumstances and the
extent of the related partys interest in the transaction.
Certain categories of transactions have standing pre-approval
under the policy, including the following:
|
|
|
|
|
the employment of non-executive officers who are immediate
family members of a related party of TSYS so long as the annual
compensation received by this person does not exceed $250,000,
which employment is reviewed by the Committee at its next
regularly scheduled meeting; and
|
|
|
|
certain limited charitable contributions by TSYS, which
transactions are reviewed by the Committee at its next regularly
scheduled meeting.
|
In addition, the policy does not apply to transactions which
occurred, or in the case of ongoing transactions, transactions
which began, prior to the date of the adoption of the policy by
the Board.
Related
Party Transactions
The terms of the transactions set forth below are comparable to
those provided for between similarly situated unrelated third
parties in similar transactions.
During 2009, TSYS provided electronic payment processing and
other card related services to Columbus Bank and
Trust Company, a banking subsidiary of Synovus
(CB&T), and certain of Synovus other
banking subsidiaries for payments of $14,133,675. Also during
2009, Synovus and its subsidiaries paid TSYS an aggregate of
$1,998,972 for miscellaneous reimbursable items such as data
links, network services and postage, primarily related to
processing services provided by TSYS.
TSYS and Synovus and TSYS and CB&T are parties to Lease
Agreements pursuant to which Synovus and CB&T leased space
from TSYS for lease payments aggregating $872,445 during 2009.
During 2009, TSYS Total Debt Management, Inc., a subsidiary of
TSYS during 2009, derived $65,634 in revenues from CB&T for
debt collection services. Also, during 2009, Synovus, CB&T
and other Synovus subsidiaries paid to Columbus Productions,
Inc., a subsidiary of TSYS, $374,586 for printing services.
Richard E. Anthony, a director of TSYS, is Chairman of the Board
and Chief Executive Officer of Synovus. James H. Blanchard, a
director of TSYS, is a director of Synovus and has a son who
serves as an executive officer of CB&T. The payments to
Synovus by TSYS and the payments to TSYS by Synovus represent
less than 2% of Synovus 2009 gross revenues.
TSYS is a party to a Joint Ownership Agreement with Synovus and
a third party pursuant to which they jointly own or lease
aircraft. The parties have each agreed to pay fixed fees for
each hour they fly the aircraft owned
and/or
leased pursuant to the Joint Ownership Agreement. TSYS paid
$1,504,984 for its use of the aircraft during 2009.
Mack Paul Daffin, Jr., a
son-in-law
of Philip W. Tomlinson, Chairman of the Board and Chief
Executive Officer of TSYS, was employed by a subsidiary of TSYS
as an Executive Vice President and Chief Information Officer
during 2009. Mr. Daffin received $227,298 in compensation
during 2009. Roderick Cowan Hunter, the
son-in-law
of director James D. Yancey, was employed by TSYS as a director
of sales and marketing during 2009. Mr. Hunter received
$125,103 in compensation during 2009. The
41
compensation received by the employees listed above is
determined under the standard compensation practices of TSYS.
None of the transactions described above required review,
approval or ratification under TSYS Related Party
Transaction Policy as they occurred or the ongoing transaction
began prior to the adoption of the policy by the TSYS Board.
Other
Information About Board Independence
In addition to the information set forth under the caption
Related Party Transactions above, the Board also
considered the following relationships in evaluating the
independence of our independent directors and determined that
none of the relationships constitute a direct or indirect
material relationship with TSYS:
|
|
|
|
|
an entity of which Mr. Cloninger serves as an executive
officer made payments to and received payments from TSYS for
services in the ordinary course of business during 2009, which
payments did not approach the 2% of that companys annual
consolidated gross revenues threshold set forth in the
Boards guidelines for independence and which payments
represent less than 2% of TSYS consolidated gross revenues;
|
|
|
|
an entity in which each of Mr. Turner and Mr. Miller and
their immediate family members own a less than ten percent
equity interest made payments to and received payments from TSYS
for property or services in the ordinary course of business
during 2009, which transactions were in accordance with the
Boards guidelines for independence, and which payments
represent less than 2% of that companys annual
consolidated gross revenues and less than 2% of TSYS
consolidated gross revenues; and
|
|
|
|
an immediate family member of Mrs. Yarbrough and an
immediate family member of Mr. Ussery each was compensated
as a non-executive employee of TSYS during 2009, which
employment was in accordance with the Boards guidelines
for independence.
|
42
The following table sets forth the number of shares of TSYS
stock held by the only known holders of more than 5% of the
outstanding shares of TSYS stock as of December 31, 2009.
|
|
|
|
|
|
|
|
|
|
|
Shares of TSYS Stock
|
|
Percentage of Outstanding Shares of
|
|
|
Beneficially Owned
|
|
TSYS Stock Beneficially Owned
|
Name and Address of Beneficial Owner
|
|
as of 12/31/09
|
|
as of 12/31/09
|
|
Synovus Trust Company, N.A.(1)
|
|
|
23,833,052
|
(2)
|
|
|
12.1
|
%
|
1148 Broadway
Columbus, Georgia 31901
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FMR LLC
|
|
|
14,344,657
|
(3)
|
|
|
7.3
|
%
|
82 Devonshire Street
Boston, Massachusetts 02109
|
|
|
|
|
|
|
|
|
|
|
|
(1)
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The shares of TSYS stock held by
Synovus Trust Company are voted by the President of Synovus
Trust Company.
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(2)
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As of December 31, 2009, the
banking, investment advisory and trust company subsidiaries of
Synovus, including CB&T through its wholly owned
subsidiary, Synovus Trust Company, held in various
fiduciary or advisory capacities a total of
23,841,875 shares of TSYS stock as to which they possessed
sole or shared voting or investment power. Of this total,
Synovus Trust Company held 22,045,195 shares as to
which it possessed sole voting power, 22,170,854 shares as
to which it possessed sole investment power, 230,315 shares
as to which it possessed shared voting power and
1,429,074 shares as to which it possessed shared investment
power. The other banking, investment advisory and trust
subsidiaries of Synovus held 8,823 shares as to which they
possessed shared investment power. Synovus and its subsidiaries
disclaim beneficial ownership of all shares of TSYS stock which
are held by them in various fiduciary and advisory capacities.
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(3)
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As of December 31, 2009, the
investment advisory, investment company and bank subsidiaries of
FMR LLC, possessed sole voting power with respect to 453,392
TSYS shares and sole investment power with respect to 14,344,657
TSYS shares.
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43
Section 16(a) of the Securities Exchange Act of 1934
requires TSYS officers and directors, and persons who own
more than ten percent of TSYS stock, to file reports of
ownership and changes in ownership on Forms 3, 4 and 5 with
the SEC.
To TSYS knowledge, based solely on its review of such
reports submitted to TSYS, and written representations from
certain reporting persons that no Forms 5 were required for
those persons, TSYS believes that during the fiscal year ended
December 31, 2009 all Section 16(a) filing
requirements applicable to its officers, directors and greater
than ten percent beneficial owners were complied with.
In order for a shareholder proposal to be considered for
inclusion in TSYS Proxy Statement for the 2011 Annual
Meeting of Shareholders, the written proposal must be received
by the Corporate Secretary of TSYS at the address below. The
Corporate Secretary must receive the proposal no later than
November 19, 2010. The proposal will also need to comply
with the SECs regulations under
Rule 14a-8
regarding the inclusion of shareholder proposals in company
sponsored proxy materials. Proposals should be addressed to:
Corporate Secretary
Total System Services, Inc.
One TSYS Way
Columbus, Georgia 31901
For a shareholder proposal that is not intended to be included
in TSYS Proxy Statement for the 2011 Annual Meeting of
Shareholders, or if you want to nominate a person for election
as a director, you must provide written notice to the Corporate
Secretary at the address above. The Secretary must receive this
notice not earlier than December 22, 2010 and not later
than January 21, 2011. The notice of a proposed item of
business must provide information as required in the bylaws of
TSYS which, in general, require that the notice include for each
matter a brief description of the matter to be brought before
the meeting; the reason for bringing the matter before the
meeting; your name, address, and number of shares you own
beneficially or of record; any material interest you have in the
proposal; and a representation that you are a shareholder of
record entitled to vote at the meeting and that you intend to
appear in person or by proxy at the meeting to bring the matter
before the meeting.
The notice of a proposed director nomination must provide
information as required in the bylaws of TSYS which, in general,
require that the notice of a director nomination include your
name, address and the number of shares you own beneficially or
of record; a representation that you are a shareholder of record
entitled to vote at the meeting and that you intend to appear in
person or by proxy at the meeting to nominate the person or
persons named in the notice; any arrangements between you and
each proposed nominee and any other person pursuant to which the
nomination is being made; the name, age, business address,
residence address and principal occupation of the nominee; and
the number of shares owned beneficially or of record by the
nominee. It must also include the information that would be
required to be disclosed in the solicitation of proxies for the
election of a director under federal securities laws. You must
submit the nominees consent to be elected and to serve. A
copy of the bylaw requirements will be provided upon request to
the Corporate Secretary at the address above.
44
Financial
Information
Detailed financial information for TSYS and its subsidiaries for
its 2009 fiscal year is included in TSYS 2009 Annual
Report that is being provided to TSYS shareholders
together with this Proxy Statement. The Annual Report and this
Proxy Statement are also posted to our website at
http://annualreport.tsys.com.
Solicitation
of Proxies
TSYS will pay the cost of soliciting proxies. Proxies may be
solicited on behalf of TSYS by directors, officers or employees
by mail, in person or by telephone, facsimile or other
electronic means. TSYS will reimburse brokerage firms, nominees,
custodians and fiduciaries for their out-of-pocket expenses for
forwarding proxy materials to beneficial owners. In addition,
TSYS has retained Laurel Hill Advisory Group, LLC to assist in
the solicitation of proxies for a fee of $12,500, plus
reimbursement of reasonable out-of-pocket expenses.
Householding
The SECs proxy rules permit companies and intermediaries,
such as brokers and banks, to satisfy delivery requirements for
proxy statements with respect to two or more shareholders
sharing the same address by delivering a single proxy statement
to those shareholders. This method of delivery, often referred
to as householding, should reduce the amount of duplicate
information that shareholders receive and lower printing and
mailing costs for companies. TSYS is not householding proxy
materials for its shareholders of record in connection with its
2010 Annual Meeting. However, we have been notified that certain
intermediaries will household proxy materials. If you hold your
shares of TSYS stock through a broker or bank that has
determined to household proxy materials:
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Only one Annual Report and Proxy Statement will be delivered to
multiple shareholders sharing an address unless you notify your
broker or bank to the contrary;
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You can contact TSYS by calling
(706) 644-6081
or by writing Director of Investor Relations, Total System
Services, Inc., P.O. Box 2567, Columbus, Georgia 31902
to request a separate copy of the Annual Report and Proxy
Statement for the 2010 Annual Meeting and for future meetings or
you can contact your bank or broker to make a similar request;
and
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You can request delivery of a single copy of Annual Reports or
Proxy Statements from your bank or broker if you share the same
address as another TSYS shareholder and your bank or broker has
determined to household proxy materials.
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The above Notice of Annual Meeting and Proxy Statement are sent
by order of the TSYS Board of Directors.
Philip W. Tomlinson
Chairman of the Board and
Chief Executive Officer
March 19, 2010
45
TOTAL
SYSTEM SERVICES, INC.
CATEGORICAL
DIRECTOR INDEPENDENCE GUIDELINES
The following independence guidelines have been approved by
the Board of Directors and are included within TSYS
Corporate Governance Guidelines.
A majority of the Board of Directors will be independent
directors who meet the criteria for independence required by the
NYSE. The Corporate Governance and Nominating Committee will
make recommendations to the Board annually as to the
independence of directors as defined by the NYSE. To be
considered independent under the NYSE Listing Standards, the
Board must determine that a director does not have any direct or
indirect material relationship with the Company. The Board has
established the following guidelines to assist it in determining
director independence. A director is not independent if:
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The director is, or has been within the last three years, an
employee of the Company or an immediate family member is, or has
been within the last three years, an executive officer of the
Company.
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The director has received, or has an immediate family member who
has received, during any twelve-month period within the last
three years, more than $120,000 in direct compensation from the
Company, other than director and committee fees and pension or
other forms of deferred compensation for prior service (provided
such compensation is not contingent in any way on continued
service). (Compensation received by an immediate family member
for service as an employee of the Company (other than an
executive officer) is not taken into consideration under this
independence standard).
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(A) The director is a current partner or employee of a firm
that is the Companys internal or external auditor;
(B) the director has an immediate family member who is a
current partner of such a firm; (C) the director has an
immediate family member who is a current employee of such a firm
and personally works on the Companys audit; or
(D) the director or an immediate family member was within
the last three years a partner or employee of such a firm and
personally worked on the Companys audit within that time.
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The director or an immediate family member is, or has been
within the last three years, employed as an executive officer of
another company where any of the Companys present
executive officers at the same time serves or served on that
companys compensation committee.
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The director is a current employee, or an immediate family
member is a current executive officer, of a company that has
made payments to, or received payments from, the Company for
property or services in an amount which, in any of the last
three fiscal years, exceeds the greater of $1 million, or
2% of such other companys consolidated gross revenues.
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The following relationships will not be considered to be
material relationships that would impair a directors
independence:
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The director is a current employee, or an immediate family
member of the director is a current executive officer, of a
company that has made payments to, or received payments from,
the Company for property or services (including financial
services) in an amount which, in the prior fiscal year, is less
than the greater of $1 million, or 2% of such other
companys consolidated gross revenues. (In the event this
threshold is exceeded, and where applicable in the standards set
forth below, the three year look back period
referenced above will apply to future independence
determinations).
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The director or an immediate family member of the director is a
partner of a law firm that provides legal services to the
Company and the fees paid to such law firm by the Company in the
prior fiscal year were less than the greater of $1 million,
or 2% of the law firms total revenues.
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The director or an immediate family member of the director is an
executive officer of a tax exempt organization and the
Companys contributions to the organization in the prior
fiscal year were less than the greater of $1 million, or 2%
of the organizations consolidated gross revenues.
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A-1
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The director received less than $120,000 in direct compensation
from the Company during the prior twelve month period, other
than director and committee fees and pension or other forms of
deferred compensation for prior service (provided such
compensation is not contingent in any way on continued service).
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The directors immediate family member received in his or
her capacity as an employee of the Company (other than as an
executive officer of the Company), less than $250,000 in direct
compensation from the Company in the prior fiscal year, other
than director and committee fees and pension or other forms of
deferred compensation for prior service (provided such
compensation is not contingent in any way on continued service).
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A relationship arising solely from a directors ownership
of an equity or limited partnership interest in a party that
engages in a transaction with the Company so long as the
directors ownership interest does not exceed 10% of the
total equity or partnership interests of the other party. For
purposes of this independence guideline, a person owns an equity
interest in a corporation or limited liability company if he or
she has or shares voting or investment control over the equity
interest. Equity or limited partnership interests owned by an
immediate family member of a director are considered to be held
by the director.
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For relationships which existed prior to the spin-off of the
Company by Synovus Financial Corp., the director has, directly,
in his or her individual capacities, or, indirectly, in his or
her capacity as the owner of an equity interest in a company of
which he or she is not an employee, lending relationships,
deposit relationships or other banking relationships (such as
depository, trusts and estates, private banking, investment
banking, investment management, custodial, securities brokerage,
insurance, cash management and similar services) with the
Company provided that:
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1) such relationships are in the ordinary course of
business of the Company and are on substantially the same terms
as those prevailing at the time for comparable transactions with
non-affiliated persons; and
2) no event of default has occurred under any extension of
credit from an affiliate of the Company.
For relationships not described above or otherwise not covered
in the above examples, a majority of the Companys
independent directors, after considering all of the relevant
circumstances, may make a determination whether or not such
relationship is material and whether the director may therefore
be considered independent under the NYSE Listing Standards. The
Company will explain the basis of any such determinations of
independence in the next proxy statement.
For purposes of these independence guidelines an immediate
family member includes a persons spouse, parents,
children, siblings, mothers and
fathers-in-law,
sons and
daughters-in-law,
brothers and
sisters-in-law,
and anyone (other than domestic employees) who shares such
persons home.
For purposes of these independence guidelines
Company includes any parent or subsidiary in a
consolidated group with the Company.
A-2
YOUR VOTE IS IMPORTANT. PLEASE VOTE TODAY.
We encourage you to take advantage of Internet or telephone voting.
Both are available 24 hours a day, 7 days a week.
Internet and telephone voting are available through 11:59 PM Eastern Time the day prior to the annual meeting date.
TOTAL SYSTEM SERVICES, INC.
INTERNET
http://www.proxyvoting.com/tss
Use the Internet to vote your proxy. Have your proxy card in hand when you access the web site.
OR
TELEPHONE
1-866-540-5760
Use any touch-tone telephone to vote your proxy. Have your proxy card in hand when you call.
If
you vote your proxy by Internet or by telephone, you do NOT need to mail
back your proxy card.
To vote by mail, mark, sign and date your proxy card and return it in the enclosed postage-paid envelope.
Your Internet or telephone vote authorizes the named proxies to vote your shares in the same manner as if you marked, signed and returned your proxy card.
68732
▼ FOLD AND DETACH HERE ▼
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ALL NOMINEES IN PROPOSAL 1 AND FOR PROPOSAL 2.
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Please mark
your votes as
indicated in
this example
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1. To elect the following seven nominees as directors:
NOTE: Please sign as name appears hereon. Joint owners should each sign. When signing as attorney, executor, administrator, trustee or guardian, please give full title as such.
You can now access your Total System Services, Inc. account online.
Access your Total System Services, Inc. account online via Investor ServiceDirect® (ISD).
BNY Mellon Shareowner Services, the transfer agent for Total System Services, Inc., now makes it easy and convenient to get current information on your shareholder account.
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View account status
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View payment history for dividends |
View certificate history
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Make address changes |
View book-entry information
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Obtain a duplicate 1099 tax form |
Visit us on the web at http://www.bnymellon.com/shareowner/isd
For Technical Assistance Call 1-877-978-7778 between 9am-7pm
Monday-Friday Eastern Time
Investor ServiceDirect®
Available 24 hours per day, 7 days per week
TOLL FREE NUMBER: 1-800-370-1163
Choose
MLinkSM for fast, easy and secure 24/7 online access to your future
proxy materials, investment plan statements, tax documents and more. Simply
log on to Investor ServiceDirect® at www.bnymellon.com/shareowner/isd
where step-by-step instructions will prompt you through enrollment.
Important notice regarding the Internet availability of proxy materials for the Annual Meeting of Shareholders. The Proxy Statement and the 2009 Annual Report to Shareholders are available at: http://annualreport.tsys.com
▼ FOLD AND DETACH HERE ▼
TOTAL SYSTEM SERVICES, INC.
POST OFFICE BOX 2506, COLUMBUS, GEORGIA 31902-2506
ANNUAL MEETING OF SHAREHOLDERS OF TSYS TO BE HELD APRIL 21, 2010
SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF TSYS
The
undersigned shareholder of Total System Services, Inc. hereby appoints James
B. Lipham and Dorenda K. Weaver as Proxies, each of them singly and each with
power of substitution, to vote all shares of Common Stock of TSYS of the undersigned
or with respect to which the undersigned is entitled to vote on February 11,
2010 at the ANNUAL MEETING OF THE SHAREHOLDERS OF TSYS to be held on the 21st
day of April, 2010, and at any adjournments or postponements thereof, with
all the powers the undersigned would possess if personally present.
The Board of Directors is not aware of any matters likely to be presented for action at the Annual Meeting of Shareholders of TSYS, other than the matters listed herein. However, if any other matters are properly brought before the Annual Meeting, the persons named in this Proxy or their substitutes will vote upon such other matters in accordance with their best judgment. This Proxy is revocable at any time prior to its use.
THIS
PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED AS DIRECTED BY THE UNDERSIGNED.
IF THIS PROXY IS SIGNED AND RETURNED AND DOES NOT SPECIFY A VOTE ON ANY PROPOSAL,
THE PROXY WILL BE VOTED IN ACCORDANCE WITH THE RECOMMENDATIONS OF THE BOARD
OF DIRECTORS.
IF
YOU DO NOT VOTE BY PHONE OR OVER THE INTERNET, PLEASE VOTE, DATE AND SIGN
ON THE REVERSE SIDE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE.
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BNY MELLON SHAREOWNER SERVICES P.O. BOX 3550 SOUTH HACKENSACK, NJ 07606-9250
(Continued and to be marked, dated and signed, on the other side) |
68732