DEF 14A
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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Fee paid previously with preliminary materials. |
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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
date of its filing. |
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Form, Schedule or Registration Statement No.: |
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Philip W.
Tomlinson
Chairman of the Board and
Chief Executive Officer
March 20, 2009
Dear Shareholder:
You are cordially invited to attend our Annual Meeting of
Shareholders at 10:00 a.m. on Wednesday, April 29,
2009, at the TSYS Riverfront Campus Auditorium, One TSYS Way,
Columbus, Georgia. Enclosed with this Proxy Statement are your
proxy card and the 2008 Annual Report.
We hope that you will be able to be with us and let us give you
a review of 2008. 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 2009 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 2009 ANNUAL
MEETING OF SHAREHOLDERS
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TIME |
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10:00 a.m.
Wednesday, April 29, 2009 |
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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 five directors to serve until the 2012 Annual
Meeting of Shareholders.
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(2) To amend the Articles of Incorporation to declassify
the Board of Directors.
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(3) To ratify the appointment of KPMG LLP as TSYS
independent auditor for the year 2009.
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(4) 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 19, 2009. |
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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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G. Sanders Griffith, III
Secretary
Columbus, Georgia
March 20, 2009
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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B-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 20,
2009. The TSYS Board of Directors is soliciting proxies to be
used at the 2009 Annual Meeting of TSYS Shareholders which will
be held on April 29, 2009, 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 19,
2009, 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 19, 2009, 197,273,497 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; (2) FOR the amendment to TSYS
Articles of Incorporation to declassify the Board of Directors;
and (3) FOR the ratification of the appointment of KPMG LLP
as TSYS independent auditor for the year 2009. 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 shareholders holding a majority of the
total issued and outstanding shares of TSYS stock as of the
close of business on February 19, 2009 is required to
approve the amendment to TSYS Articles of Incorporation to
declassify the Board of Directors.
The affirmative vote of a majority of the votes cast is needed
to ratify the appointment of KPMG LLP as TSYS independent
auditor for 2009.
1
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 to
those matters. Abstentions and broker non-votes will have the
same effect as a vote against the proposal to amend the Articles
of Incorporation and will have no effect on the outcome of the
vote to elect directors or ratify the appointment of KPMG LLP as
TSYS independent auditor.
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 28, 2009 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 28, 2009. 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 28, 2009; 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 29,
2009 at the TSYS Riverfront Campus Auditorium, One TSYS Way,
Columbus, Georgia. Directions to the auditorium can be obtained
from the Investors 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 and 2009 Annual Meetings of
Shareholders, TSYS elected to use the full set delivery option.
Accordingly, you should have received TSYS 2009 proxy
materials by mail or, if you previously agreed, by
e-mail.
These proxy materials include the Proxy Statement, proxy card
and 2008 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 29, 2009
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 ensuring that TSYS activities are
conducted in a responsible and ethical manner. TSYS 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 material relationship with
TSYS. The Board has established categorical standards of
independence to assist it in determining director independence
which conform to the independence requirements in the NYSE
listing standards. The categorical standards of independence are
incorporated within our Corporate Governance Guidelines, are
attached to this Proxy Statement as Appendix A and are also
available in the Corporate Governance section of our website at
www.tsys.com/ir/governance.
The Board has determined that a majority of its members are
independent as defined by the listing standards of the NYSE and
meet the categorical standards of independence set by the Board.
TSYS Board has determined that the following directors are
independent: Richard Y. Bradley, Kriss Cloninger III, G. Wayne
Clough (who no longer serves as a director), Walter W.
Driver, Jr., Sidney E. Harris, Mason H. Lampton, W. Walter
Miller, Jr., H. Lynn Page, John T. Turner, James D. Yancey
and Rebecca K. Yarbrough. Please see Certain Relationships
and Related Transactions on page 39 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 categorical standards of
independence and NYSE listing standards.
Attendance
at Meetings
The Board of Directors held five meetings in 2008. All directors
attended at least 75% of Board and committee meetings held
during their tenure during 2008. 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 but one of TSYS
directors who were serving at the time attended the 2008 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/ir/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 2008
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11
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5
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Executive Committee. During the intervals
between meetings of TSYS Board of Directors, TSYS
Executive Committee possesses and may exercise any and all of
the powers of TSYS 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
TSYS 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 18. 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 TSYS 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; and
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Providing an avenue of communication among the independent
auditor, management, internal audit and the Board of Directors.
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5
Corporate Governance and Nominating
Committee. The primary functions of TSYS
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 30. The primary functions
of TSYS 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 the performance of its duties. In January 2008, the Committee
retained the services of Hewitt Associates for 2008 to:
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Provide ongoing recommendations regarding executive compensation
consistent with TSYS business needs, pay philosophy,
market trends and latest legal and regulatory considerations;
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Provide market data in connection with decisions regarding Chief
Executive Officer and senior management base salary, short-term
incentive and long-term incentive compensation;
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Advise the Committee as to best practices; and
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Provide other services as the Committee may request.
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Hewitt was engaged directly by the Committee, although the
Committee also directed that Hewitt continue to work with TSYS
management. TSYS Executive Vice President of
Administrative Services and his staff develop executive
compensation recommendations for the Committees
consideration in conjunction with TSYS Chief Executive
Officer and with the advice of Hewitt Associates.
TSYS Executive Vice President of Administrative Services
works with the Chairman of the Committee to establish the agenda
for Committee meetings. TSYS management also prepares background
information for each Committee meeting. During 2008, TSYS
Chief Executive Officer and TSYS Executive Vice President
of Administrative Services attended all Committee meetings.
TSYS Chief Executive Officer and Executive Vice President
of Administrative Services do not have authority to vote on
Committee matters. At the request of the Committee, an executive
compensation consultant with Hewitt Associates attended all
Committee meetings held in 2008.
Consideration
of Director Candidates
Shareholder Candidates. The Corporate
Governance and Nominating 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 TSYS bylaws permit shareholders to
nominate candidates and as one of the duties set forth in the
Corporate Governance and Nominating
6
Committee charter is to review and consider director candidates
submitted by shareholders. The Committee will evaluate
individuals recommended by shareholders for nomination as
directors according to the criteria discussed below and in
accordance with TSYS bylaws and the procedures described
under Shareholder Proposals and Nominations on
page 42.
Director Qualifications. TSYS Corporate
Governance Guidelines contain Board membership criteria
considered by the Corporate Governance and Nominating Committee
in recommending nominees for a position on TSYS Board. The
Committee believes that, at a minimum, a director candidate must
possess 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, not have reached the retirement
age for TSYS directors and be willing to make, and financially
capable of making, the required investment in TSYS stock
pursuant to TSYS Director Stock Ownership Guidelines. The
Committee also considers the following criteria when reviewing a
director candidate:
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The extent of the directors/potential directors
business 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
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;
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Whether the director/potential director would be considered a
financial expert or financially literate
as defined in the listing standards of the NYSE;
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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; and
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Whether the director/potential director possesses a willingness
to challenge and stimulate management and the ability to work as
part of a team in an environment of trust.
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Identifying
and Evaluating Nominees
The Corporate Governance and Nominating Committee has two
primary methods for identifying director candidates (other than
those proposed by TSYS shareholders, as discussed above).
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 is authorized
to 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).
The Committee will consider all director candidates identified
through the processes described above, and will evaluate each of
them, including incumbents, based on the same criteria. The
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.
Meetings
of Non-Management and Independent Directors
The non-management directors of TSYS meet separately at least
four times a year after each regularly scheduled meeting of the
Board of Directors. TSYS independent directors meet at
least once a year. Richard Y. Bradley, TSYS Lead Director,
presides at the meetings of non-management and independent
directors.
Communicating
with the Board
TSYS 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
7
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/ir/governance. TSYS
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
TSYS 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/ir/governance. Copies of these documents
are also available in print upon written request to the
Corporate Secretary, Total System Services, Inc., One TSYS Way,
Columbus, Georgia 31901.
8
DIRECTOR
COMPENSATION
DIRECTOR
COMPENSATION TABLE
The following table summarizes the compensation paid by TSYS to
non-employee directors for the year ended December 31, 2008.
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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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3,329
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$
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10,000
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$
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53,329
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James H. Blanchard
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50,000
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8,541
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58,541
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Richard Y. Bradley
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70,000
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13,304
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83,304
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Kriss Cloninger III
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65,000
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12,195
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10,000
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87,195
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G. Wayne Clough(3)
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65,000
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12,195
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10,000
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87,195
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Walter W. Driver, Jr.
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50,000
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12,195
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9,000
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71,195
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Gardiner W. Garrard, Jr.
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50,000
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12,195
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2,500
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64,695
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Sidney E. Harris
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55,000
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12,195
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3,750
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70,945
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Alfred W. Jones III
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40,000
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12,195
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10,000
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62,195
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Mason H. Lampton
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70,000
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12,195
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82,195
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W. Walter Miller, Jr.
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47,500
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12,195
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59,695
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H. Lynn Page
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80,000
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12,195
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92,195
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John T. Turner
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55,000
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12,195
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2,500
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69,695
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Richard W. Ussery
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40,000
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11,862
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10,000
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61,862
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James D. Yancey
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50,000
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12,195
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10,000
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72,195
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Rebecca K. Yarbrough
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47,500
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13,860
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61,360
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(1)
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The grant date fair value of the
500 shares of restricted TSYS stock awarded to each
director in 2008 was $10,895. The amount in this column reflects
the dollar amount recognized for financial statement reporting
purposes for the year ended December 31, 2008 in accordance
with SFAS 123(R) and includes amounts for awards granted in
2008 and prior to 2008. For a discussion of the restricted stock
awards reported in this column, see Note 14 of Notes to
Consolidated Financial Statements in TSYS Annual Report
for the year ended December 31, 2008. At December 31,
2008, Mr. Anthony held 500 shares of restricted TSYS
stock, Mr. Blanchard 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 $10,000 in contributions
made by TSYS under TSYS Director Stock Purchase Plan for
Messrs. Anthony, Cloninger, Clough, Jones, Ussery and
Yancey, $9,000 for Mr. Driver, $2,500 for Messrs. Garrard
and Turner and $3,750 for Mr. Harris. As described more
fully below, 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 50% of the
directors cash contributions under the plan.
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(3)
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Mr. Clough resigned as a
director during 2008 as a result of his assuming the position of
Secretary of the Smithsonian Institution.
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Director
Compensation Program
The Corporate Governance and Nominating Committee of TSYS is
responsible for the oversight and administration of the TSYS
director compensation program. TSYS does not pay management
directors for Board service in addition to their regular
employee compensation. The Committee generally reviews and
recommends any changes in director compensation to the Board for
its approval every two years although the Committee determined
not to take any action in 2009 in light of current economic
conditions.
Under its charter, the Committee has authority to retain outside
advisors to assist the Committee in performance of its duties.
The Corporate Governance and Nominating Committee retained
Mercer Human Resource Consulting to review the competitiveness
of the TSYS director compensation program for compensation to be
paid during 2007. Mercer was directed to evaluate existing peer
groups of companies against which to benchmark director
compensation at TSYS, to revise if necessary and review and
9
compare director pay practices at TSYS to industry peer
companies and to those of general industry companies, analyzing
cash compensation, long-term incentive compensation and total
compensation. The Committee, with the assistance of Mercer,
studied compensation at a peer group of 18 companies
generally categorized as business service providers and at 350
large industrial, financial and service organizations. The
Committee also asked Mercer to overview recent director pay
trends, including shifts in pay mix, equity compensation trends
and changes related to increased responsibilities and liability.
In January 2007, Mercer recommended certain changes to the
director compensation program at TSYS; the Committee discussed
and considered these recommendations and recommended to the
Board that it approve the director compensation structure for
2007, which structure remained in place for 2008, except that
for 2008 the Committee determined to discontinue the practice of
paying cash compensation to directors who are employees of TSYS.
The decisions made by the Committee are the responsibility of
the Committee and may reflect factors and considerations other
than the information and recommendations provided by Mercer.
Cash Compensation of Directors. As reflected
in the Fees Earned or Paid in Cash column of the
Director Compensation Table above, for the fiscal year ended
December 31, 2008, non-employee directors of TSYS 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 and the Lead Director
received a $5,000 cash retainer.
By paying non-employee directors annual retainers for Board and
Committee Service, TSYS compensates each director 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 TSYS 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. Messrs. Harris and Turner
deferred all or a portion of their cash compensation under this
plan during 2008.
Equity Compensation of Directors. During 2008,
non-employee directors also received an annual award of
500 shares of restricted TSYS stock in the form of a grant
from the TSYS 2008 Omnibus Plan, 100% of which vests after three
years. The Board granted these restricted stock awards to
directors on February 11, 2008. These restricted stock
awards are designed to create equity ownership and to focus
directors on the long-term performance of TSYS.
TSYS Director Stock Purchase Plan is a non-qualified,
contributory stock purchase plan pursuant to which TSYS
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 50% of the directors cash
contributions. Participants in 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 above. TSYS contributions
10
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, 2008,
each director had satisfied these ownership guidelines.
11
PROPOSALS TO
BE VOTED ON
PROPOSAL 1:
ELECTION OF DIRECTORS
General
Information
At the date of this Proxy Statement, the Board of Directors of
TSYS consists of 17 members. Our directors determine the size of
the Board and for purposes of the Annual Meeting, the number is
fixed at 17. The Board is divided into three classes whose terms
are staggered so that the term of one class expires at each
Annual Meeting of Shareholders. The terms of office of the
Class I directors expire at the 2011 Annual Meeting, the
terms of office of the Class II directors expire at the
2009 Annual Meeting and the terms of office of the
Class III directors expire at the 2010 Annual Meeting.
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.
In 2009, 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: James H. Blanchard, Richard
Y. Bradley, Walter W. Driver, Jr., Gardiner W.
Garrard, Jr. and W. Walter Miller, Jr., each to serve
a three year term expiring at the 2012 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.
12
THE BOARD
OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR ALL
NOMINEES.
Members
of the Board of Directors
Following is the principal occupation, age and certain other
information for each director nominee and other directors
serving unexpired terms. Unless otherwise noted, each director
has occupied his or her principal occupation for at least five
years.
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Year
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TSYS
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First
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Director
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Elected
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Name
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Age
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Classification
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Director
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Principal Occupation and Other Information
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Richard E. Anthony(1)
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62
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III
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2006
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Chairman of the Board and Chief Executive Officer, Synovus
Financial Corp. (Financial Services Company)
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James H. Blanchard(2)
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67
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II
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1982
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Chairman of the Board and Chief Executive Officer, Retired,
Synovus Financial Corp.; Director, Synovus Financial Corp. and
AT&T Corp.
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Richard Y. Bradley
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70
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II
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1991
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Partner, Bradley & Hatcher (Law Firm); Director, Synovus
Financial Corp.
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Kriss Cloninger III
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61
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I
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2004
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President and Chief Financial Officer, Aflac Incorporated
(Insurance Holding Company); Director, Aflac Incorporated and
Tupperware Brands Corporation
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Walter W. Driver, Jr.(3)
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63
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II
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2002
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Chairman-Southeast, Goldman, Sachs & Co. (Investment
Banking and Securities); Director, Equifax Inc.
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Gardiner W. Garrard, Jr.
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68
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II
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1982
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President, The Jordan Company (Real Estate Development and
Private Equity Investments); Director, Synovus Financial Corp.
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Sidney E. Harris(4)
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59
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III
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1999
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Professor, Georgia State University; Director, RidgeWorth Funds
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Alfred W. Jones III
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51
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III
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2001
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Chairman of the Board and Chief Executive Officer, Sea Island
Company (Real Estate Development and Management); Director,
Synovus Financial Corp.
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Mason H. Lampton(5)
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61
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III
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1986
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Chairman of the Board, Standard Concrete Products (Construction
Materials Company); Director, Synovus Financial Corp.
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W. Walter Miller, Jr.(6)
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60
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II
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1993
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Group Executive, Retired, Total System Services, Inc.
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H. Lynn Page(6)
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68
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I
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1982
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Vice Chairman of the Board, Retired, Synovus Financial Corp.;
Director, Synovus Financial Corp.
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Philip W. Tomlinson(7)
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62
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I
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1982
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Chairman of the Board and Chief Executive Officer, Total System
Services, Inc.; Director, Synovus Financial Corp.
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13
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Year
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TSYS
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First
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Director
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Elected
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Name
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Age
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Classification
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Director
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Principal Occupation and Other Information
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John T. Turner(6)
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52
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III
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2003
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Private Investor
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Richard W. Ussery(8)
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61
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I
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1982
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Chairman of the Board and Chief Executive Officer, Retired,
Total System Services, Inc.
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M. Troy Woods(9)
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57
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III
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2003
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President and Chief Operating Officer, Total System Services,
Inc.
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James D. Yancey(10)
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67
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III
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1982
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Chairman of the Board, Columbus Bank and Trust Company; Chairman
of the Board, Retired, and Director, Synovus Financial Corp.
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Rebecca K. Yarbrough
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71
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III
|
|
|
1999
|
|
|
Private Investor
|
|
|
|
(1)
|
|
Richard E. Anthony was elected
Chairman of the Board and Chief Executive Officer of Synovus
Financial Corp. (Synovus) in October 2006. From 1995
until 2006, Mr. Anthony served in various capacities with
Synovus, including Chief Executive Officer and President and
Chief Operating Officer.
|
|
(2)
|
|
James H. Blanchard 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
was elected Chairman of the Executive Committee of TSYS in
February 1992. Although Mr. Blanchard 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.
|
|
(3)
|
|
Walter W. Driver, Jr. has served as
Chairman-Southeast of Goldman, Sachs & Co. since
January 2006. Prior to 2006, Mr. Driver served as Chairman
of the law firm King & Spalding LLP.
|
|
(4)
|
|
Sidney E. Harris 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.
|
|
(5)
|
|
Mason H. Lampton was elected
Chairman of the Board of Standard Concrete Products in June
2004. Prior to 2004, Mr. Lampton served as President and
Chief Executive Officer of Standard Concrete Products.
|
|
(6)
|
|
W. Walter Miller, Jr. and H. Lynn
Page are first cousins and Mr. Millers spouse and
John T. Turner are first cousins.
|
|
(7)
|
|
Philip W. Tomlinson 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.
|
|
(8)
|
|
Richard W. Ussery retired as an
executive employee of TSYS in June 2005 and served as a
non-executive Chairman of the Board until January 2006.
Mr. Ussery was elected Chairman of the Board in February
1992. Prior to 2005, Mr. Ussery was Chief Executive Officer
of TSYS.
|
|
(9)
|
|
M. Troy Woods 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.
|
|
(10)
|
|
James D. Yancey 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 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.
|
14
PROPOSAL 2:
APPROVAL OF AMENDMENT TO TSYS ARTICLES OF
INCORPORATION TO DECLASSIFY THE BOARD OF DIRECTORS
Introduction
After careful consideration and upon the recommendation of its
Corporate Governance and Nominating Committee, the Board of
Directors has unanimously determined that it would be in the
best interests of TSYS and its shareholders to amend TSYS
Articles of Incorporation to declassify the Board and provide
for the annual election of all directors, as described below.
The Board is now asking TSYS shareholders to approve this
amendment to the Articles of Incorporation.
TSYS
Current Classified Board Structure
Article VIII of TSYS Articles of Incorporation
divides TSYS directors into three classes as nearly equal
in size as possible, with members of each class serving
three-year terms of office. Consequently, at any given annual
meeting of shareholders, TSYS shareholders have the
ability to elect only one class of directors, constituting
roughly one-third of the entire Board.
Proposed
Declassification of the Board
In October 2008, the Board of Directors voted to approve, and to
recommend that TSYS shareholders approve at the 2009
Annual Meeting, an amendment to TSYS Articles of
Incorporation that would eliminate the Boards classified
structure. If TSYS shareholders approve the proposed
amendment, directors who have been elected to three-year terms
prior to the effectiveness of the amendment (including directors
elected at the 2009 Annual Meeting) will complete those terms.
Beginning with the 2010 Annual Meeting, directors whose previous
terms are expiring will be subject to election for a one-year
term expiring at the next annual meeting. Thus, beginning with
the 2012 Annual Meeting, the entire Board will be elected
annually.
Rationale
for Declassification
The Board of Directors is committed to good corporate governance
at TSYS. Accordingly, in determining whether to propose
declassification as described above, the Board carefully
reviewed the various arguments for and against a classified
Board structure.
The Board recognizes that a classified structure may offer
several advantages, such as promoting board continuity and
stability, encouraging directors to take a long-term perspective
and reducing a companys vulnerability to coercive takeover
tactics. The Board also recognizes, however, that a classified
structure may appear to reduce directors accountability to
shareholders since such a structure does not enable shareholders
to express a view on each directors performance by means
of an annual vote. The Board also considered the fact that many
companies are transitioning away from a classified board
structure.
In view of the considerations described above, the Board of
Directors, upon the recommendation of its Corporate Governance
and Nominating Committee, has unanimously determined that it is
in the best interests of TSYS and its shareholders to eliminate
the classified Board structure as proposed.
Text
and Effectiveness of Proposed Amendment
The text of the proposed amendment is set forth in
Appendix B to this Proxy Statement, with deletions
indicated by strike throughs and additions indicated by
underlining. The Board has adopted conforming amendments to
TSYS bylaws that will become effective if the proposed
amendment is approved by shareholders.
If TSYS shareholders approve the proposed amendment, it
will become effective upon the filing of Articles of Amendment
to the Articles of Incorporation with the Secretary of State of
the State of Georgia, which TSYS would do promptly after the
Annual Meeting. If TSYS shareholders do not approve the
proposed amendment, the Board of Directors will remain
classified.
Vote
Required
The affirmative vote of shareholders holding a majority of our
issued and outstanding shares of stock is required to approve
the proposed amendment.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE
FOR THE APPROVAL OF THE AMENDMENT TO TSYS
ARTICLES OF INCORPORATION TO DECLASSIFY THE BOARD OF
DIRECTORS.
15
PROPOSAL 3:
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, 2009 and TSYS internal control
over financial reporting as of December 31, 2009.
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)
|
|
|
62
|
|
|
Chairman of the Board and Chief Executive Officer
|
M. Troy Woods(1)
|
|
|
57
|
|
|
President and Chief Operating Officer
|
James B. Lipham(2)
|
|
|
60
|
|
|
Senior Executive Vice President and Chief Financial Officer
|
William A. Pruett(3)
|
|
|
55
|
|
|
Senior Executive Vice President and Chief Client Officer
|
Kenneth L. Tye(4)
|
|
|
56
|
|
|
Senior Executive Vice President and Chief Information Officer
|
G. Sanders Griffith, III(5)
|
|
|
55
|
|
|
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 13.
|
|
(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.
|
16
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, 2008.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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
|
|
12/31/08
|
|
|
12/31/08
|
|
|
12/31/08
|
|
|
12/31/08(1)
|
|
|
12/31/08
|
|
|
Richard E. Anthony
|
|
|
321,789
|
|
|
|
34,082
|
|
|
|
28,288
|
|
|
|
384,159
|
|
|
|
*
|
|
James H. Blanchard
|
|
|
173,944
|
|
|
|
1,272,020
|
|
|
|
3,492
|
|
|
|
1,449,456
|
|
|
|
*
|
|
Richard Y. Bradley
|
|
|
40,821
|
|
|
|
76,259
|
|
|
|
1,982
|
|
|
|
119,062
|
|
|
|
*
|
|
Kriss Cloninger III
|
|
|
5,608
|
|
|
|
|
|
|
|
1,500
|
|
|
|
7,108
|
|
|
|
*
|
|
Walter W. Driver, Jr.
|
|
|
6,810
|
|
|
|
|
|
|
|
1,500
|
|
|
|
8,310
|
|
|
|
*
|
|
Gardiner W. Garrard, Jr.
|
|
|
100,847
|
|
|
|
301,795
|
|
|
|
1,982
|
|
|
|
404,624
|
|
|
|
*
|
|
Sidney E. Harris
|
|
|
7,714
|
|
|
|
|
|
|
|
1,500
|
|
|
|
9,214
|
|
|
|
*
|
|
Alfred W. Jones III
|
|
|
17,455
|
|
|
|
|
|
|
|
1,982
|
|
|
|
19,437
|
|
|
|
*
|
|
Mason H. Lampton
|
|
|
119,645
|
|
|
|
117,226
|
(2)
|
|
|
1,982
|
|
|
|
238,853
|
|
|
|
*
|
|
James B. Lipham
|
|
|
107,765
|
|
|
|
600
|
|
|
|
48,382
|
|
|
|
658,737
|
|
|
|
*
|
|
W. Walter Miller, Jr.
|
|
|
97,652
|
|
|
|
332,594
|
|
|
|
1,500
|
|
|
|
440,871
|
|
|
|
*
|
|
H. Lynn Page
|
|
|
597,496
|
|
|
|
123,014
|
|
|
|
1,982
|
|
|
|
722,492
|
|
|
|
*
|
|
William A. Pruett
|
|
|
170,144
|
|
|
|
|
|
|
|
51,007
|
|
|
|
766,568
|
|
|
|
*
|
|
Philip W. Tomlinson
|
|
|
431,773
|
|
|
|
244,054
|
|
|
|
158,840
|
|
|
|
1,718,567
|
|
|
|
*
|
|
John T. Turner
|
|
|
71,060
|
|
|
|
1,774,234
|
|
|
|
1,500
|
|
|
|
1,846,794
|
|
|
|
*
|
|
Kenneth L. Tye
|
|
|
85,261
|
|
|
|
850
|
|
|
|
50,116
|
|
|
|
652,213
|
|
|
|
*
|
|
Richard W. Ussery
|
|
|
362,313
|
|
|
|
266,000
|
|
|
|
1,500
|
|
|
|
1,445,221
|
|
|
|
*
|
|
M. Troy Woods
|
|
|
106,432
|
|
|
|
2,279
|
|
|
|
138,649
|
|
|
|
832,104
|
|
|
|
*
|
|
James D. Yancey
|
|
|
912,378
|
|
|
|
185,993
|
|
|
|
1,982
|
|
|
|
1,100,353
|
|
|
|
*
|
|
Rebecca K. Yarbrough
|
|
|
233,499
|
|
|
|
319,892
|
(3)
|
|
|
1,500
|
|
|
|
554,891
|
|
|
|
*
|
|
Directors and Executive Officers as a Group (21 persons)
|
|
|
4,087,509
|
|
|
|
5,052,573
|
|
|
|
596,209
|
|
|
|
13,600,142
|
|
|
|
6.8
|
|
|
|
|
*
|
|
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, 2008, 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
|
|
|
|
|
|
|
653,008
|
|
Gardiner W. Garrard, Jr.
|
|
|
|
|
|
|
122,180
|
|
James B. Lipham
|
|
|
501,990
|
|
|
|
|
|
W. Walter Miller, Jr.
|
|
|
9,125
|
|
|
|
64,111
|
|
William A. Pruett
|
|
|
545,417
|
|
|
|
16,992
|
|
Philip W. Tomlinson
|
|
|
883,900
|
|
|
|
|
|
Kenneth L. Tye
|
|
|
515,986
|
|
|
|
|
|
Richard W. Ussery
|
|
|
815,408
|
|
|
|
|
|
M. Troy Woods
|
|
|
584,744
|
|
|
|
22,469
|
|
James D. Yancey
|
|
|
|
|
|
|
10,251
|
|
|
|
|
(2)
|
|
Includes 85,260 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 Ms. Yarbrough is not the
trustee. Ms. Yarbrough disclaims beneficial ownership of
these shares.
|
17
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, 2008;
|
|
|
|
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, 2008 filed with the
Securities and Exchange Commission.
The Audit Committee
H. Lynn Page, Chair
Sidney E. Harris
John T. Turner
18
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, 2008
and December 31, 2007 and fees billed for other services
rendered by KPMG during those periods.
|
|
|
|
|
|
|
|
|
|
|
|
|
2008
|
|
|
2007
|
|
|
Audit Fees(1)
|
|
$
|
1,931,000
|
|
|
$
|
1,689,000
|
|
Audit Related Fees(2)
|
|
|
1,652,000
|
|
|
|
1,511,000
|
|
Tax Fees(3)
|
|
|
278,000
|
|
|
|
490,000
|
|
All Other Fees
|
|
|
-0-
|
|
|
|
-0-
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
3,861,000
|
|
|
$
|
3,690,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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.
19
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:
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Compensation Philosophy and Overview this
section summarizes the objectives of TSYS executive
compensation program and describes what the program is designed
to reward;
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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;
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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;
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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;
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Compensation Realized By Named Executive Officers for
2008 this section discusses compensation
realized by named executive officers for 2008;
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Significant Events After December 31, 2008
this section highlights post year end events
that may be helpful to understand compensation paid to or earned
by named executive officers for 2008; and
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Conclusion this section concludes the
CD&A.
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The series of tables following this CD&A provide detailed
information about the compensation earned by or paid to the
following named executive officers:
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Philip W. Tomlinson, Chairman of the Board and Chief Executive
Officer;
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James B. Lipham, Senior Executive Vice President and Chief
Financial Officer;
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M. Troy Woods, President and Chief Operating Officer;
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William A. Pruett, Senior Executive Vice President and Chief
Client Officer; and
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Kenneth L. Tye, Senior Executive Vice President and Chief
Information Officer.
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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 and Overview
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.
TSYS 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
20
program that provides performance-based cash bonuses. EPS growth
coupled with TSR is the driver of our Long-Term Incentive
Program (LTIP). TSYS believes that the high degree
of performance orientation and the use of 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.
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.
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Compensation Element
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Objective
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Key Features
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Base Pay
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To provide a fixed level of cash compensation for executive
officers commensurate with their respective skills,
responsibilities, experience and performance.
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Targeted at median of market.
Adjustments are based on an executives current and anticipated future performance with benchmarking to our peer companies.
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Annual Incentive Program performance-based cash
bonuses
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To motivate executive officers to produce outstanding financial
results and to reward executive officers for attaining financial
goals.
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Cash bonuses are a multiple of base pay determined by EPS growth.
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Long-Term Incentive Program equity awards
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To align interests of executive officers with shareholders and
to retain executive officers.
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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 restricted stock or performance share awards (with the number of actual shares determined over a three year period).
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Qualified Plans: Money Purchase Pension Plan, Profit Sharing
Plan and 401(k) Savings Plan
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To provide retirement income for executive officers (and other
employees).
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Broad based retirement plans. TSYS contributes 7% of 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.
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Deferred Compensation Plan
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To provide additional retirement savings and income deferral
opportunities.
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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.
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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
21
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.
When establishing base pay, the Committee compares each
executives current base pay to the market median for that
position using proxy 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 2008, all of the base pay increases for the named
executive officers were calculated taking into account the
market data described above as well as existing base salaries,
the 2008 merit budget, internal pay equity, individual
performance, experience, time in position and retention needs.
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 ensure a competitive compensation
program.
AIP awards are tied directly to our fundamental operating
performance measured over a one-year period. Each year the
Committee establishes a performance target as a percentage of
change in EPS from the prior year. The performance target is
generally set based upon TSYS publicly disclosed EPS
guidance. 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. Actual AIP payout targets for
2008 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 2008 AIP
payout target for Messrs. Tomlinson and Woods is 100% of
base pay, and the 2008 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 2008, the Committee approved the
following schedule:
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EPS Percentage Change
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Percent of Target Bonus Paid
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4.0% and below
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0
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%
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5.0%
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25
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%
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6.0%
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50
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%
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7.0%
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75
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%
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8.0%
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100
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%
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9.0%
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115
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%
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10.0%
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130
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%
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11.0%
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150
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%
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12.0%
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175
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%
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13.0% and above
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200
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%
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The Committee has the right to exercise downward discretion and
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.
TSYS had EPS growth of 5.7% for 2008. Under the payout schedule
set forth above, bonuses could have been paid at approximately
42.5% of target. However, TSYS executive management recommended
payment of bonuses at 25% of target, and the Committee accepted
the recommendation. Bonuses for 2008 are set forth in the
Non-Equity Incentive Plan Compensation column in the
Summary Compensation Table on page 31.
As is common practice in the market for short-term incentive
compensation, awards under the AIP are paid in a lump-sum cash
payment as soon as practicable in the year following the
performance year, usually no later than February 28.
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 with our shareholders by awarding executives equity
in TSYS. Finally, given the prevalence of long-term incentive
compensation in the marketplace, LTIP awards ensure 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
restricted stock or performance share awards.
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 ensure that the annual earnings releases have had time to be
absorbed by the market before restricted stock grants are made
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 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.
February 6, 2008 Equity Awards Based on 2005
2007 Financial Performance. Prior to
December 31, 2007, Synovus owned approximately 80% of the
outstanding shares of TSYS stock. On December 31, 2007,
Synovus completed the spin-off to its shareholders of the shares
of TSYS stock formerly owned by Synovus (Spin-Off).
After the Spin-Off, TSYS became a fully independent, publicly
owned company.
Under the terms of the LTIP in effect before the Spin-Off, LTIP
awards were made in January following the performance period and
were based on Synovus TSR over a three year-period. TSR
was measured in two ways: (1) absolute TSR of Synovus, and
(2) TSR compared to the peer companies.
At its meeting on January 30, 2008, the Committee approved
equity awards under the LTIP equal to 50% of the payout target
based on Synovus TSR for the three year period ending
December 31, 2007. The equity awards were effective
February 6, 2008 and were paid 50% in stock options and 50%
in restricted stock. The stock options and the restricted stock
are subject to a three year vesting schedule with one-third
vesting on February 6, 2009, February 6, 2010 and
February 6, 2011. The closing price of TSYS stock on
February 6, 2008, was used as the exercise price for the
stock options and to determine the SFAS 123(R) accounting
expense and was also used for disclosure in the compensation
tables in this Proxy Statement. 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 32.
Restricted stock awards received by the named executive officers
are included in the
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All Other Stock Awards: Number of Shares of Stock or
Units column in the Grants of Plan-Based Awards Table.
New LTIP. After the Spin-Off, at its meeting
on March 25, 2008, the Committee approved changes in the
LTIP to reflect that prospective LTIP awards will no longer be
based solely on historical TSR over a three-year period. Because
of these changes, named executive officers received performance
awards for both 2007 and 2008 in calendar year 2008. The equity
grants effective February 6, 2008 (see immediately
preceding discussion) are the performance awards for 2007. The
performance awards for 2008 and the revised LTIP are discussed
in detail below.
TSYS believes that there are advantages and disadvantages to
every form of equity award. LTIP awards made subsequent to
March 25, 2008 will be paid 50% in stock options and 50% 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
period beginning with the performance year.
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:
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TSYS Rank in
3 Year
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TSR vs. Peer Companies
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Percentile
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Payout Multiplier
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Top 20%
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81st to
100
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120
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%
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Next 20%
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61 to 80
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110
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%
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Middle 20%
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41 to 60
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100
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%
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Next 20%
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21 to 40
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90
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%
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Bottom 20%
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1 to 20
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th
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80
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%
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The actual value of a performance share award for any year is
determined as follows:
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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 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%).
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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
$13.00, the executives initial award is set at 30,649
performance shares ($398,438/13).
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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
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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 30,649 performance shares
will be increased to 36,779 (120% of 30,649), and the executive
will receive 36,779 shares of TSYS stock.
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March 31, 2008 Equity Awards. In
conjunction with the approval of changes in the LTIP, the
Committee approved LTIP awards for the named executive officers
effective March 31, 2008. Messrs. Tomlinson and Woods
received LTIP awards equal to 250% of base pay, and the other
named executive officers received LTIP awards equal to 150% of
base pay.
Each executive received one-half of his LTIP award in the form
of 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 32. The closing
price of TSYS stock on March 31, 2008 was used as the
exercise price for the stock options and to determine the
SFAS 123(R) accounting expense and was also used for
disclosure in the tables in this Proxy Statement.
Each executive received one-half of his LTIP award in the form
of a performance share award. The performance share award was
denominated in U.S. dollars, with the initial number of
performance shares to be determined after the end of 2008 based
on EPS growth for 2008. The Committee approved use of the same
EPS growth targets used to determine payouts under the AIP (see
table on page 22).
TSYS had EPS growth of 5.7% for 2008. Under the payout schedule
approved by the Committee, performance share awards could have
been paid at approximately 42.5% of target. However, TSYS
executive management recommended payment of performance shares
at 25% of target, and the Committee accepted the recommendation
at its meeting on January 26, 2009. The closing price of
TSYS stock on January 26, 2009, the date the Committee
certified that the performance measure was attained, was $12.90
per share. Accordingly, each executives initial award of
performance shares was determined as follows: (Performance Share
Award Target x 25%)/12.90. The performance share awards for the
named executive officers are included in the Estimated
Future Payouts Under Equity Incentive Plan Awards
column in the Grants of Plan-Based Awards Table on
page 32. The initial award of performance shares may be
increased or decreased +/- 20% after the end of a three year
period based on attainment of TSR growth targets as described
under New LTIP on page 24.
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 the Spin-Off 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. Specifically,
20% of the restricted stock awarded to Messrs. Tomlinson
and Woods vests in any year that EPS growth is at least 75% of
the target EPS under the AIP for the year, and any restricted
stock that has not vested at the end of 2014 will be forfeited.
The performance measure was exceeded for 2008, and, accordingly,
20% of the restricted stock awarded to Messrs. Tomlinson
and Woods vested on January 26, 2009, the date the
Committee certified that the performance measure had been
attained.
The 2008 special equity awards for Messrs. Tomlinson and
Woods are included in the Estimated Future Payouts Under
Equity Incentive Plan Awards column in the Grants of
Plan-Based Awards Table on page 32. For the other named
executive officers, these awards are included in the All
Other Stock Awards: Number of Shares of Stock or Units
column in the Grants of Plan-Based Awards Table.
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. Specifically, 20% of the
restricted stock granted in 2005 vests in any year that EPS
growth is at least 75% of the target EPS under the AIP for the
year. Any restricted stock that has not vested at the end of the
seven year period will be forfeited. The performance measure was
exceeded for 2008, and, accordingly,
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20% of the restricted stock granted in 2005 vested on
January 26, 2009, the date the Committee certified that the
performance measure had been attained.
Qualified Plans and Non-Qualified Deferred Compensation
Plan. TSYS sponsors three qualified retirement
plans that provide retirement income for a broad-based group of
employees, including our executives. Specifically, TSYS sponsors
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 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 compensation. For
fiscal 2008, TSYS named executive officers received a
contribution of 7% of compensation under the Money Purchase
Pension Plan, 1.75% of compensation under the Profit Sharing
Plan and no contribution under the 401(k) Savings Plan. The
retirement plan contributions for 2008 are included in the
All Other Compensation column in the Summary
Compensation Table on page 31.
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 paid under 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 2008 are included in the All Other
Compensation column in the Summary Compensation Table on
page 31. In the past, 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. With the downturn in the market during 2008, none of the
named executive officers had any earnings on assets held for his
benefit under the Deferred 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. Prior to the
Spin-Off, the Executive Compensation Benchmarking Group
consisted of 17 technology-oriented transaction processors
26
with revenues of approximately one-half to two times those of
TSYS. The companies in the Executive Compensation Benchmarking
Group were:
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Axcion Corp.
Affiliated Computer Services, Inc.
Alliance Data Systems, Corp.
BISYS Group, Inc.
Ceridian Corp.
Checkfree Corp.
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ChoicePoint, Inc.
Convergys Corp.
eFunds Corp.
Equifax Inc.
Fair Isaac Corp.
Fidelity National Information Services, Inc.
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Fiserv, Inc.
Global Payments, Inc.
Paychex, Inc.
Sabre Holdings Corp.
Teletech Holdings
|
In 2008, the Committee completed a comprehensive review of the
Executive Compensation Benchmarking Group in light of TSYS
market position post Spin-Off. Companies in the updated
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 updated 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.
|
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. Prior to the
Spin-Off, the LTIP Benchmarking Group consisted of banks in the
Keefe, Bruyette and Woods 50 Index. In 2008, the Committee
completed a comprehensive review of the LTIP Benchmarking Group
in light of TSYS market position post Spin-Off. The
Committee elected to update the LTIP Benchmarking Group to
consist 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 reviewed a tally
sheet for the CEO in January, 2008, and it reviewed tally sheets
for all named executive officers, including the CEO, in October,
2008. The tally sheets were prepared by the Committees
compensation consultant. Each tally sheet presented the dollar
amount of each element of the executives 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
provided estimates of the amounts payable to each executive upon
the occurrence of potential future events, such as a change of
control, retirement, voluntary or involuntary termination, death
and disability.
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 or excessive.
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. After its review of the tally sheets, the
Committee determined that the named executive officers
compensation is performance oriented, competitive, designed to
align with our strategic goals and reasonable.
27
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
employment agreements.
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 31. 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 36. 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 such agreements were important in recruiting and
retaining executive talent.
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. TSYS implemented a
clawback policy effective January 1, 2009.
Under the policy, the Committee may direct that TSYS recover all
or a portion of any incentive award granted or paid if such
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 such 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.
28
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 36.
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.
Compensation
Realized By Named Executive Officers for 2008
The Summary Compensation Table on page 31 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
2008. For example, the Summary Compensation Table reflects the
expense recognized for financial statement reporting purposes in
connection with equity awards (i.e., options, restricted stock
and performance shares) for 2008 and prior years in accordance
with SFAS 123(R) rather than the financial benefit realized
by the executives in 2008 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 37.
The following table only reflects compensation realized by each
executive for 2008 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
2008. For example, the LTIP awards for 2008 are not included in
the table because the awards did not vest during 2008. Detailed
information on all compensation opportunities that were made
available in 2008 and all compensation paid to or earned by the
named executive officers during 2008 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 2008 is performance
oriented, competitive, designed to align with our strategic
goals and reasonable.
29
The following table reflects the components of the compensation
realized by the named executive officers for 2008:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Value Realized on
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Vesting of
|
|
|
|
|
|
|
|
|
|
|
|
|
Annual Cash Bonus
|
|
|
Value Realized on
|
|
|
Restricted Stock
|
|
|
|
|
|
|
|
|
|
|
|
|
Paid at 25% of
|
|
|
Exercise of Options
|
|
|
Awards During
|
|
|
All Other
|
|
|
|
|
Name and Principal Position
|
|
Base Pay
|
|
|
Target(1)
|
|
|
During 2008(2)
|
|
|
2008(3)
|
|
|
Compensation(4)
|
|
|
Total
|
|
|
Philip W. Tomlinson
|
|
$
|
827,774
|
|
|
$
|
206,943
|
|
|
$
|
0
|
|
|
$
|
761,519
|
|
|
$
|
178,567
|
|
|
$
|
1,974,803
|
|
Chairman of the Board and Chief Executive Officer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
James B. Lipham
|
|
|
382,261
|
|
|
|
81,230
|
|
|
|
0
|
|
|
|
255,938
|
|
|
|
85,610
|
|
|
|
805,039
|
|
Senior Executive Vice President and Chief Financial Officer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
M. Troy Woods
|
|
|
610,018
|
|
|
|
152,504
|
|
|
|
0
|
|
|
|
706,557
|
|
|
|
145,539
|
|
|
|
1,614,618
|
|
President and Chief Operating Officer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
William A. Pruett
|
|
|
440,013
|
|
|
|
93,503
|
|
|
|
0
|
|
|
|
298,531
|
|
|
|
98,513
|
|
|
|
930,560
|
|
Senior Executive Vice President and Chief Client Officer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Kenneth L. Tye
|
|
|
440,013
|
|
|
|
93,503
|
|
|
|
0
|
|
|
|
273,120
|
|
|
|
90,019
|
|
|
|
896,655
|
|
Senior Executive Vice President and Chief Information Officer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
2008 annual cash bonuses were paid
under the AIP at 25% of target. The bonuses were earned based on
2008 performance and paid in February, 2009.
|
|
(2)
|
|
No named executive officer
exercised any options during 2008. All outstanding options held
by the named executive officers are 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 34.
|
|
(3)
|
|
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 34.
|
|
(4)
|
|
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 31.
|
Significant
Events After December 31, 2008
Because of the uncertainties in the current financial market and
general economy, base pay for the named executive officers was
not increased effective January 1, 2009. The Committee will
revisit this issue after the financial results for the first
quarter of 2009 become available.
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 2008 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, 2008 filed with the
Securities and Exchange Commission.
The Committee
Mason H. Lampton, Chairman
Walter W. Driver, Jr.
Kriss Cloninger III
30
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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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pension
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Value and
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nonquali-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-Equity
|
|
|
fied
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Incentive
|
|
|
Deferred
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Plan
|
|
|
Com-
|
|
|
All Other
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock
|
|
|
Option
|
|
|
Com-
|
|
|
pensation
|
|
|
Com-
|
|
|
|
|
|
|
|
|
|
Salary
|
|
|
Bonus
|
|
|
Awards
|
|
|
Awards
|
|
|
pensation
|
|
|
Earnings
|
|
|
pensation
|
|
|
|
|
Name and Principal Position
|
|
Year
|
|
|
($)
|
|
|
($)
|
|
|
($)(1)
|
|
|
($)(2)
|
|
|
($)(3)
|
|
|
($)
|
|
|
($)
|
|
|
Total ($)
|
|
|
Philip W. Tomlinson
|
|
|
2008
|
|
|
$
|
827,774
|
|
|
|
|
|
|
$
|
1,579,742
|
|
|
$
|
3,230,160
|
|
|
$
|
206,943
|
|
|
|
|
|
|
$
|
178,567
|
(4)(5)
|
|
$
|
6,023,186
|
|
Chairman of the Board
|
|
|
2007
|
|
|
|
711,833
|
|
|
|
|
|
|
|
864,620
|
|
|
|
1,755,430
|
|
|
|
960,930
|
|
|
|
|
|
|
|
656,940
|
|
|
|
4,949,753
|
|
and Chief Executive Officer
|
|
|
2006
|
|
|
|
652,000
|
|
|
|
|
|
|
|
583,775
|
|
|
|
1,157,063
|
|
|
|
847,600
|
|
|
|
|
|
|
|
451,567
|
|
|
|
3,692,005
|
|
James B. Lipham
|
|
|
2008
|
|
|
|
382,261
|
|
|
|
|
|
|
|
391,274
|
|
|
|
964,521
|
|
|
|
81,230
|
|
|
|
|
|
|
|
85,610
|
(4)(5)
|
|
|
1,904,896
|
|
Senior Executive Vice
|
|
|
2007
|
|
|
|
347,500
|
|
|
|
|
|
|
|
181,737
|
|
|
|
913,995
|
|
|
|
398,790
|
|
|
|
|
|
|
|
203,556
|
|
|
|
2,045,578
|
|
President and Chief Financial Officer
|
|
|
2006
|
|
|
|
332,500
|
|
|
|
|
|
|
|
144,180
|
|
|
|
738,935
|
|
|
|
367,413
|
|
|
|
|
|
|
|
152,604
|
|
|
|
1,735,632
|
|
M. Troy Woods
|
|
|
2008
|
|
|
|
610,018
|
|
|
|
|
|
|
|
1,191,701
|
|
|
|
1,331,844
|
|
|
|
152,504
|
|
|
|
|
|
|
|
145,539
|
(4)(5)
|
|
|
3,431,606
|
|
President and Chief
|
|
|
2007
|
|
|
|
500,000
|
|
|
|
|
|
|
|
671,132
|
|
|
|
1,078,313
|
|
|
|
675,000
|
|
|
|
|
|
|
|
472,264
|
|
|
|
3,396,709
|
|
Operating Officer
|
|
|
2006
|
|
|
|
458,000
|
|
|
|
|
|
|
|
473,229
|
|
|
|
824,221
|
|
|
|
595,400
|
|
|
|
|
|
|
|
299,761
|
|
|
|
2,650,611
|
|
William A. Pruett
|
|
|
2008
|
|
|
|
440,013
|
|
|
|
|
|
|
|
435,310
|
|
|
|
1,021,056
|
|
|
|
93,503
|
|
|
|
|
|
|
|
98,513
|
(4)(5)
|
|
|
2,088,395
|
|
Senior Executive Vice
|
|
|
2007
|
|
|
|
416,000
|
|
|
|
|
|
|
|
213,567
|
|
|
|
988,491
|
|
|
|
477,360
|
|
|
|
|
|
|
|
218,692
|
|
|
|
2,314,110
|
|
President and Chief Client Officer
|
|
|
2006
|
|
|
|
396,000
|
|
|
|
|
|
|
|
168,190
|
|
|
|
756,590
|
|
|
|
437,580
|
|
|
|
|
|
|
|
171,179
|
|
|
|
1,929,539
|
|
Kenneth L. Tye
|
|
|
2008
|
|
|
|
440,013
|
|
|
|
|
|
|
|
422,011
|
|
|
|
1,001,580
|
|
|
|
93,503
|
|
|
|
|
|
|
|
90,019
|
(4)(5)
|
|
|
2,047,126
|
|
Senior Executive Vice
|
|
|
2007
|
|
|
|
400,000
|
|
|
|
|
|
|
|
197,443
|
|
|
|
934,329
|
|
|
|
459,000
|
|
|
|
|
|
|
|
199,144
|
|
|
|
2,189,916
|
|
President and Chief
|
|
|
2006
|
|
|
|
375,000
|
|
|
|
|
|
|
|
154,474
|
|
|
|
745,859
|
|
|
|
414,375
|
|
|
|
|
|
|
|
159,633
|
|
|
|
1,849,341
|
|
Information Officer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
The amounts in this column
represent the dollar amount of compensation expense recognized
for financial statement reporting purposes for the last three
fiscal years in accordance with SFAS 123(R) and include amounts
from awards granted during these three fiscal years and prior to
2006. For a discussion of the assumptions used in calculating
the values of the restricted stock and performance share awards
reported in this column, see Note 14 of Notes to
Consolidated Financial Statements in TSYS Annual Reports
for the years ended December 31, 2008, 2007 and 2006.
|
|
(2)
|
|
The amounts in this column
represent the dollar amount of compensation expense recognized
for financial statement reporting purposes for the last three
fiscal years in accordance with SFAS 123(R) and include amounts
from awards granted during these three fiscal years and prior to
2006. For a discussion of the assumptions used in calculating
the values of the stock option awards reported in this column,
see Note 14 of Notes to Consolidated Financial Statements
in TSYS Annual Reports for the years ended
December 31, 2008, 2007 and 2006. The increase in the
SFAS 123(R) expense recorded for Mr. Tomlinsons
outstanding options in 2008 when compared to 2007 reflects the
fact that Mr. Tomlinson became retirement eligible during
2008 at age 62 with respect to his option awards granted during
2008. Under SFAS 123(R), TSYS is required to fully expense
these awards through the date of retirement eligibility.
|
|
(3)
|
|
The amounts in this column
represent short-term incentive compensation cash awards paid
pursuant to the Annual Incentive Program.
|
|
(4)
|
|
Amount includes allocations to
qualified defined contribution plans of $20,125 for each
executive and allocations to nonqualified deferred compensation
plans of $136,387, $48,217, $92,314, $60,145 and $58,539 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 incremental
cost to TSYS for personal use of the corporate aircraft. The
amount also includes the cost incurred by TSYS for security
alarm monitoring for Messrs. Tomlinson and Woods and the
cost incurred by TSYS for reimbursement for financial planning
services for each executive except Mr. Pruett. None of
these perquisites individually exceeded $25,000. The aggregate
incremental cost incurred by TSYS in connection with providing
perquisites was $22,055, $17,268, $33,100, $18,243 and $11,355
for Messrs. Tomlinson, Lipham, Woods, Pruett and Tye,
respectively.
|
31
GRANTS OF
PLAN-BASED AWARDS
for the Year Ended December 31, 2008
The table below sets forth the short-term incentive compensation
(payable in cash) and long-term incentive compensation (paid in
the form of TSYS restricted stock awards, performance share
awards and stock options) awarded to the named executive
officers in 2008.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
All Other
|
|
|
All Other
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock
|
|
|
Option
|
|
|
|
|
|
Grant
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Awards:
|
|
|
Awards:
|
|
|
Exercise
|
|
|
Date Fair
|
|
|
|
|
|
|
|
|
|
Estimated Future Payouts
|
|
|
Estimated Future Payouts
|
|
|
Number of
|
|
|
Number of
|
|
|
or Base
|
|
|
Value of
|
|
|
|
|
|
|
|
|
|
Under Non-Equity Incentive
|
|
|
Under Equity Incentive
|
|
|
Shares of
|
|
|
Securities
|
|
|
Price of
|
|
|
Stock
|
|
|
|
|
|
|
Action
|
|
|
Plan Awards(2)
|
|
|
Plan Awards
|
|
|
Stock or
|
|
|
Underlying
|
|
|
Option
|
|
|
and
|
|
|
|
Grant
|
|
|
Date
|
|
|
Threshold
|
|
|
Target
|
|
|
Maximum
|
|
|
Threshold
|
|
|
Target
|
|
|
Maximum
|
|
|
Units
|
|
|
Options
|
|
|
Awards
|
|
|
Option
|
|
Name
|
|
Date
|
|
|
(1)
|
|
|
($)
|
|
|
($)
|
|
|
($)
|
|
|
(#/$)
|
|
|
(#/$)
|
|
|
(#/$)
|
|
|
(#)
|
|
|
(#)(3)
|
|
|
($/Sh)
|
|
|
Awards
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Philip W. Tomlinson
|
|
|
|
|
|
|
|
|
|
$
|
0
|
|
|
$
|
791,000
|
|
|
$
|
1,582,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2/6/2008
|
|
|
|
1/30/2008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
48,801
|
|
|
$
|
21.88
|
|
|
$
|
459,705
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3/31/2008
|
|
|
|
3/25/2008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
139,300
|
|
|
|
23.66
|
|
|
|
1,372,105
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2/6/2008
|
|
|
|
1/30/2008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
16,267
|
(4)
|
|
|
|
|
|
|
|
|
|
|
355,922
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2/6/2008
|
|
|
|
1/30/2008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
0
|
(5)
|
|
|
91,408
|
(5)
|
|
|
91,408
|
(5)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(6)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3/31/2008
|
|
|
|
3/25/2008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
0
|
(7)
|
|
$
|
1,050,000
|
(7)
|
|
$
|
2,520,000
|
(7)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(8)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
James B. Lipham
|
|
|
|
|
|
|
|
|
|
|
0
|
|
|
|
324,913
|
|
|
|
649,825
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2/6/2008
|
|
|
|
1/30/2008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
17,868
|
|
|
|
21.88
|
|
|
|
168,317
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3/31/2008
|
|
|
|
3/25/2008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
40,390
|
|
|
|
23.66
|
|
|
|
397,842
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2/6/2008
|
|
|
|
1/30/2008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5,956
|
(4)
|
|
|
|
|
|
|
|
|
|
|
130,317
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2/6/2008
|
|
|
|
1/30/2008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
34,278
|
(9)
|
|
|
|
|
|
|
|
|
|
|
750,003
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3/31/2008
|
|
|
|
3/25/2008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
0
|
(7)
|
|
$
|
286,688
|
(7)
|
|
$
|
688,050
|
(7)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(8)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
M. Troy Woods
|
|
|
|
|
|
|
|
|
|
|
0
|
|
|
|
610,000
|
|
|
|
1,220,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2/6/2008
|
|
|
|
1/30/2008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
34,278
|
|
|
|
21.88
|
|
|
|
322,899
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3/31/2008
|
|
|
|
3/25/2008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
107,425
|
|
|
|
23.66
|
|
|
|
1,058,136
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2/6/2008
|
|
|
|
1/30/2008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
11,426
|
(4)
|
|
|
|
|
|
|
|
|
|
|
250,001
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2/6/2008
|
|
|
|
1/30/2008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
0
|
(5)
|
|
|
91,408
|
(5)
|
|
|
91,408
|
(5)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(6)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3/31/2008
|
|
|
|
3/25/2008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
0
|
(7)
|
|
$
|
762,500
|
(7)
|
|
$
|
1,830,000
|
(7)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(8)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
William A. Pruett
|
|
|
|
|
|
|
|
|
|
|
0
|
|
|
|
374,000
|
|
|
|
748,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2/6/2008
|
|
|
|
1/30/2008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
21,390
|
|
|
|
21.88
|
|
|
|
201,494
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3/31/2008
|
|
|
|
3/25/2008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
46,492
|
|
|
|
23.66
|
|
|
|
457,946
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2/6/2008
|
|
|
|
1/30/2008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7,130
|
(4)
|
|
|
|
|
|
|
|
|
|
|
156,004
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2/6/2008
|
|
|
|
1/30/2008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
34,278
|
(9)
|
|
|
|
|
|
|
|
|
|
|
750,003
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3/31/2008
|
|
|
|
3/25/2008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
0
|
(7)
|
|
$
|
330,000
|
(7)
|
|
$
|
792,000
|
(7)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(8)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Kenneth L. Tye
|
|
|
|
|
|
|
|
|
|
|
0
|
|
|
|
374,000
|
|
|
|
748,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2/6/2008
|
|
|
|
1/30/2008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
20,567
|
|
|
|
21.88
|
|
|
|
193,741
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3/31/2008
|
|
|
|
3/25/2008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
46,492
|
|
|
|
23.66
|
|
|
|
457,946
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2/6/2008
|
|
|
|
1/30/2008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6,856
|
(4)
|
|
|
|
|
|
|
|
|
|
|
150,009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2/6/2008
|
|
|
|
1/30/2008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
34,278
|
(9)
|
|
|
|
|
|
|
|
|
|
|
750,003
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3/31/2008
|
|
|
|
3/25/2008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
0
|
(7)
|
|
$
|
330,000
|
(7)
|
|
$
|
792,000
|
(7)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(8)
|
|
|
|
(1)
|
|
The Compensation Committee met on
January 30, 2008 and approved the grant of equity awards to
the named executive officers effective February 6, 2008.
The Committee also met on March 25, 2008 and approved the
grant of equity awards to the named executive officers effective
March 31, 2008.
|
|
(2)
|
|
The amounts shown in these columns
represent the threshold, target and maximum amounts payable
under the Annual Incentive Program for 2008. Awards are paid in
cash and are based upon attainment of earnings per share
percentage change goals.
|
|
(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)
|
|
These restricted stock awards vest
in three annual installments of one-third (1/3) each, beginning
on the first anniversary of the grant date. Dividends are paid
on the restricted stock award shares.
|
|
(5)
|
|
The amounts shown represent the
threshold, target and maximum payout amounts for these
performance-based restricted stock awards. The awards vest over
a five to seven-year period, with 20% of the shares vesting in
any year in which performance measures established annually by
the Compensation Committee are attained. Dividends are paid on
the performance-based restricted stock awards. The Committee met
on January 26, 2009 and determined that the performance
measure for 2008 was attained, and therefore 20%, or
18,282 shares for each executive, vested on that date.
|
32
|
|
|
(6)
|
|
Under SFAS 123(R), TSYS did
not calculate a grant date fair value that will be expensed over
the life of the award at the time the award was made. The
SFAS 123(R) valuation is done on an annual basis. For 2008,
$426,327 was expensed for each executive pursuant to
SFAS 123(R).
|
|
(7)
|
|
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, 2008, the number of
performance shares to be awarded was not determinable. The
actual number of shares that will be issued depends on the
outcome of two performance measures: a 2008 earnings per share
measure 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. After the first performance measurement
period has ended, dividend equivalents equal to cash dividends
on TSYS stock will be paid on 80% of the number of shares earned
from the earnings per share measurement. The dividend
equivalents will be paid out in the form of TSYS stock to the
extent that the performance shares are earned. The Committee met
on January 26, 2009, and determined that the initial number
of performance shares at the end of the first performance
measure was 25% of target, or 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
upward or downward adjustment of up to 20% based on TSYS
performance for the remainder of the performance period.
|
|
(8)
|
|
See footnote (7) above. For
SFAS 123(R) purposes, these performance share awards were
not deemed granted until January 26, 2009. However, the
awards were expensed by TSYS from March 31, 2008 through
January 26, 2009. The total amount of estimated expense
associated with these awards is $1,119,554, $324,614, $863,361,
$373,667 and $373,667 for Messrs. Tomlinson, Lipham, Woods,
Pruett and Tye, respectively. This expense amount is not fixed
and has been reevaluated through the grant date of
January 26, 2009. For 2008, $303,143, $64,462, $171,448,
$74,203 and $74,203 was expensed for Messrs. Tomlinson,
Lipham, Woods, Pruett and Tye, respectively, pursuant to
SFAS 123(R).
|
|
(9)
|
|
These restricted stock awards vest
in five equal annual installments of 20% each beginning on the
first anniversary of the grant date. Dividends are paid on the
restricted stock award shares.
|
33
OUTSTANDING
EQUITY AWARDS AT FISCAL YEAR-END
December 31, 2008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option Awards
|
|
|
Stock Awards
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Incentive
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Plan
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Awards:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number
|
|
|
Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number
|
|
|
|
|
|
of
|
|
|
Incentive Plan
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
of
|
|
|
|
|
|
Unearned
|
|
|
Awards:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares
|
|
|
Market
|
|
|
Shares,
|
|
|
Market or
|
|
|
|
|
|
|
Number of
|
|
|
Number of
|
|
|
|
|
|
|
|
|
or Units
|
|
|
Value of
|
|
|
Units or
|
|
|
Payout Value of
|
|
|
|
|
|
|
Securities
|
|
|
Securities
|
|
|
|
|
|
|
|
|
of Stock
|
|
|
Shares or
|
|
|
Other
|
|
|
Unearned
|
|
|
|
|
|
|
Underlying
|
|
|
Underlying
|
|
|
|
|
|
|
|
|
That
|
|
|
Units of
|
|
|
Rights
|
|
|
Shares, Units or
|
|
|
|
|
|
|
Unexercised
|
|
|
Unexercised
|
|
|
Option
|
|
|
|
|
|
Have
|
|
|
Stock That
|
|
|
That
|
|
|
Other Rights
|
|
|
|
Option
|
|
|
Options
|
|
|
Options
|
|
|
Exercise
|
|
|
Option
|
|
|
Not
|
|
|
Have Not
|
|
|
Have Not
|
|
|
That Have Not
|
|
|
|
Grant
|
|
|
(#)
|
|
|
(#)
|
|
|
Price
|
|
|
Expiration
|
|
|
Vested
|
|
|
Vested
|
|
|
Vested
|
|
|
Vested
|
|
Name
|
|
Date(1)
|
|
|
Exercisable
|
|
|
Unexercisable(2)
|
|
|
($)
|
|
|
Date
|
|
|
(#)
|
|
|
($)
|
|
|
(#)
|
|
|
($)
|
|
|
Philip W.Tomlinson
|
|
|
2/9/1999
|
|
|
|
62,020
|
|
|
|
|
|
|
$
|
23.90
|
|
|
|
2/8/2009
|
|
|
|
|
|
|
|
|
|
|
|
29,564
|
(3)
|
|
$
|
413,896
|
|
|
|
|
1/20/2000
|
|
|
|
34,025
|
|
|
|
|
|
|
|
18.87
|
|
|
|
1/19/2010
|
|
|
|
|
|
|
|
|
|
|
|
91,408
|
(4)
|
|
|
1,279,712
|
|
|
|
|
1/17/2001
|
|
|
|
28,596
|
|
|
|
|
|
|
|
27.62
|
|
|
|
1/16/2011
|
|
|
|
|
|
|
|
|
|
|
|
|
(5)
|
|
|
1,050,000
|
(6)
|
|
|
|
5/10/2001
|
|
|
|
478,652
|
|
|
|
|
|
|
|
30.29
|
|
|
|
5/9/2011
|
|
|
|
14,532
|
(7)
|
|
$
|
203,448
|
|
|
|
|
|
|
|
|
|
|
|
|
4/29/2002
|
|
|
|
36,576
|
|
|
|
|
|
|
|
27.69
|
|
|
|
4/28/2012
|
|
|
|
7,069
|
(8)
|
|
|
98,966
|
|
|
|
|
|
|
|
|
|
|
|
|
1/21/2004
|
|
|
|
55,704
|
|
|
|
|
|
|
|
26.85
|
|
|
|
1/20/2014
|
|
|
|
16,267
|
(9)
|
|
|
227,738
|
|
|
|
|
|
|
|
|
|
|
|
|
1/21/2005
|
|
|
|
62,963
|
|
|
|
|
|
|
|
28.02
|
|
|
|
1/20/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1/31/2006
|
|
|
|
59,808
|
|
|
|
29,904
|
|
|
|
28.91
|
|
|
|
1/30/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1/31/2007
|
|
|
|
9,775
|
|
|
|
19,547
|
|
|
|
33.36
|
|
|
|
1/31/2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2/6/2008
|
|
|
|
|
|
|
|
48,801
|
|
|
|
21.88
|
|
|
|
2/6/2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3/31/2008
|
|
|
|
|
|
|
|
139,300
|
|
|
|
23.66
|
|
|
|
3/31/2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
James B. Lipham
|
|
|
1/20/2000
|
|
|
|
10,717
|
|
|
|
|
|
|
|
18.87
|
|
|
|
1/19/2010
|
|
|
|
|
|
|
|
|
|
|
|
|
(5)
|
|
|
286,688
|
(6)
|
|
|
|
1/17/2001
|
|
|
|
14,933
|
|
|
|
|
|
|
|
27.62
|
|
|
|
1/16/2011
|
|
|
|
5,444
|
(7)
|
|
|
76,216
|
|
|
|
|
|
|
|
|
|
|
|
|
5/10/2001
|
|
|
|
382,921
|
|
|
|
|
|
|
|
30.29
|
|
|
|
5/9/2011
|
|
|
|
2,704
|
(8)
|
|
|
37,856
|
|
|
|
|
|
|
|
|
|
|
|
|
4/29/2002
|
|
|
|
12,734
|
|
|
|
|
|
|
|
27.69
|
|
|
|
4/28/2012
|
|
|
|
5,956
|
(9)
|
|
|
83,384
|
|
|
|
|
|
|
|
|
|
|
|
|
1/21/2004
|
|
|
|
22,062
|
|
|
|
|
|
|
|
26.85
|
|
|
|
1/20/2014
|
|
|
|
34,278
|
(10)
|
|
|
479,892
|
|
|
|
|
|
|
|
|
|
|
|
|
1/21/2005
|
|
|
|
11,644
|
|
|
|
|
|
|
|
28.02
|
|
|
|
1/20/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1/31/2006
|
|
|
|
22,405
|
|
|
|
11,202
|
|
|
|
28.91
|
|
|
|
1/30/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1/31/2007
|
|
|
|
3,739
|
|
|
|
7,475
|
|
|
|
33.36
|
|
|
|
1/31/2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2/6/2008
|
|
|
|
|
|
|
|
17,868
|
|
|
|
21.88
|
|
|
|
2/6/2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3/31/2008
|
|
|
|
|
|
|
|
40,390
|
|
|
|
23.66
|
|
|
|
3/31/2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
M. Troy Woods
|
|
|
2/9/1999
|
|
|
|
23,012
|
|
|
|
|
|
|
|
23.90
|
|
|
|
2/8/2009
|
|
|
|
|
|
|
|
|
|
|
|
20,869
|
(3)
|
|
|
292,166
|
|
|
|
|
1/20/2000
|
|
|
|
12,555
|
|
|
|
|
|
|
|
18.87
|
|
|
|
1/19/2010
|
|
|
|
|
|
|
|
|
|
|
|
91,408
|
(4)
|
|
|
1,279,712
|
|
|
|
|
1/17/2001
|
|
|
|
17,157
|
|
|
|
|
|
|
|
27.62
|
|
|
|
1/16/2011
|
|
|
|
|
|
|
|
|
|
|
|
|
(5)
|
|
|
762,500
|
(6)
|
|
|
|
5/10/2001
|
|
|
|
382,921
|
|
|
|
|
|
|
|
30.29
|
|
|
|
5/9/2011
|
|
|
|
9,980
|
(7)
|
|
|
139,720
|
|
|
|
|
|
|
|
|
|
|
|
|
4/29/2002
|
|
|
|
14,630
|
|
|
|
|
|
|
|
27.69
|
|
|
|
4/28/2012
|
|
|
|
4,966
|
(8)
|
|
|
69,524
|
|
|
|
|
|
|
|
|
|
|
|
|
1/21/2004
|
|
|
|
26,400
|
|
|
|
|
|
|
|
26.85
|
|
|
|
1/20/2014
|
|
|
|
11,426
|
(9)
|
|
|
159,964
|
|
|
|
|
|
|
|
|
|
|
|
|
1/21/2005
|
|
|
|
21,415
|
|
|
|
|
|
|
|
28.02
|
|
|
|
1/20/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1/31/2006
|
|
|
|
41,074
|
|
|
|
20,537
|
|
|
|
28.91
|
|
|
|
1/30/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1/31/2007
|
|
|
|
6,868
|
|
|
|
13,729
|
|
|
|
33.36
|
|
|
|
1/31/2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2/6/2008
|
|
|
|
|
|
|
|
34,278
|
|
|
|
21.88
|
|
|
|
2/6/2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3/31/2008
|
|
|
|
|
|
|
|
107,425
|
|
|
|
23.66
|
|
|
|
3/31/2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
William A. Pruett
|
|
|
2/9/1999
|
|
|
|
23,012
|
|
|
|
|
|
|
|
23.90
|
|
|
|
2/8/2009
|
|
|
|
|
|
|
|
|
|
|
|
|
(5)
|
|
|
330,000
|
(6)
|
|
|
|
1/20/2000
|
|
|
|
12,555
|
|
|
|
|
|
|
|
18.87
|
|
|
|
1/19/2010
|
|
|
|
6,378
|
(7)
|
|
|
89,292
|
|
|
|
|
|
|
|
|
|
|
|
|
1/17/2001
|
|
|
|
17,157
|
|
|
|
|
|
|
|
27.62
|
|
|
|
1/16/2011
|
|
|
|
3,221
|
(8)
|
|
|
45,094
|
|
|
|
|
|
|
|
|
|
|
|
|
5/10/2001
|
|
|
|
382,921
|
|
|
|
|
|
|
|
30.29
|
|
|
|
5/9/2011
|
|
|
|
7,130
|
(9)
|
|
|
99,820
|
|
|
|
|
|
|
|
|
|
|
|
|
4/29/2002
|
|
|
|
14,630
|
|
|
|
|
|
|
|
27.69
|
|
|
|
4/28/2012
|
|
|
|
34,278
|
(10)
|
|
|
479,892
|
|
|
|
|
|
|
|
|
|
|
|
|
1/21/2004
|
|
|
|
26,400
|
|
|
|
|
|
|
|
26.85
|
|
|
|
1/20/2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1/21/2005
|
|
|
|
13,411
|
|
|
|
|
|
|
|
28.02
|
|
|
|
1/20/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1/31/2006
|
|
|
|
26,247
|
|
|
|
13,122
|
|
|
|
28.91
|
|
|
|
1/30/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1/31/2007
|
|
|
|
4,453
|
|
|
|
8,903
|
|
|
|
33.36
|
|
|
|
1/31/2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2/6/2008
|
|
|
|
|
|
|
|
21,390
|
|
|
|
21.88
|
|
|
|
2/6/2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3/31/2008
|
|
|
|
|
|
|
|
46,492
|
|
|
|
23.66
|
|
|
|
3/31/2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Kenneth L. Tye
|
|
|
2/9/1999
|
|
|
|
9,764
|
|
|
|
|
|
|
|
23.90
|
|
|
|
2/8/2009
|
|
|
|
|
|
|
|
|
|
|
|
|
(5)
|
|
|
330,000
|
(6)
|
|
|
|
1/20/2000
|
|
|
|
10,054
|
|
|
|
|
|
|
|
18.87
|
|
|
|
1/19/2010
|
|
|
|
5,932
|
(7)
|
|
|
83,048
|
|
|
|
|
|
|
|
|
|
|
|
|
1/17/2001
|
|
|
|
14,616
|
|
|
|
|
|
|
|
27.62
|
|
|
|
1/16/2011
|
|
|
|
3,050
|
(8)
|
|
|
42,700
|
|
|
|
|
|
|
|
|
|
|
|
|
5/10/2001
|
|
|
|
382,921
|
|
|
|
|
|
|
|
30.29
|
|
|
|
5/9/2011
|
|
|
|
6,856
|
(9)
|
|
|
95,984
|
|
|
|
|
|
|
|
|
|
|
|
|
4/29/2002
|
|
|
|
12,463
|
|
|
|
|
|
|
|
27.69
|
|
|
|
4/28/2012
|
|
|
|
34,278
|
(10)
|
|
|
479,892
|
|
|
|
|
|
|
|
|
|
|
|
|
1/21/2004
|
|
|
|
22,487
|
|
|
|
|
|
|
|
26.85
|
|
|
|
1/20/2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1/21/2005
|
|
|
|
11,845
|
|
|
|
|
|
|
|
28.02
|
|
|
|
1/20/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1/31/2006
|
|
|
|
24,412
|
|
|
|
12,205
|
|
|
|
28.91
|
|
|
|
1/30/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1/31/2007
|
|
|
|
4,217
|
|
|
|
8,430
|
|
|
|
33.36
|
|
|
|
1/31/2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2/6/2008
|
|
|
|
|
|
|
|
20,567
|
|
|
|
21.88
|
|
|
|
2/6/2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3/31/2008
|
|
|
|
|
|
|
|
46,492
|
|
|
|
23.66
|
|
|
|
3/31/2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
For better understanding of this
table, we have included an additional column showing the grant
date of the stock options.
|
34
|
|
|
(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 2006 vest
on the third anniversary of the grant date, the stock options
granted in 2007 vest in two equal annual installments on the
second and third anniversaries of the grant date and the stock
options granted in 2008 vest in three equal annual installments
beginning on the first anniversary of the grant date.
|
|
(3)
|
|
These shares are the remaining
unvested portions of performance-based restricted stock awards
granted effective January 20, 2005. The shares vest over a
five to seven-year 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 26, 2009 and determined that the performance
measure for 2008 was attained, and therefore 14,781 shares
remain unvested for Mr. Tomlinson and 10,434 shares
remain unvested for Mr. Woods.
|
|
(4)
|
|
These performance-based restricted
stock awards were granted effective February 6, 2008. The
shares vest over a five to seven-year 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 26, 2009 and determined that
the performance measure for 2008 was attained, and therefore
73,126 shares remain unvested for each of
Mr. Tomlinson and Mr. Woods.
|
|
(5)
|
|
Performance shares denominated in
dollars were awarded effective March 31, 2008. The number
of performance shares to be awarded, and thus the number of
performance shares that have not vested, was not determinable as
of December 31, 2008. The actual number of shares that will
be issued to these executives depends upon the outcome of two
performance measures: a one-year earnings per share measure and
a three-year total shareholder return measure that ends on
December 31, 2010. Vesting will occur upon the Compensation
Committees certification subsequent to December 31,
2010 of the attainment of the performance measure. The Committee
met on January 26, 2009 and determined that the initial
number of performance shares at the end of the first performance
measure was 25% of target, or 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
upward or downward adjustment of up to 20% based on TSYS
performance for the remainder of the performance period.
|
|
|
|
(6)
|
|
This amount represents the target
payout value, in dollars, for the equity to be awarded. Target
payout values for these awards are also included in the Grants
of Plan-Based Awards Table for the year ended December 31,
2008. The actual payout value earned by the named executive
officers depends upon the outcome of the two performance
measures described in footnote (5) above.
|
|
|
|
(7)
|
|
These shares, which vested on
January 31, 2009, are the remaining unvested portion of
restricted stock awards granted on January 31, 2006.
|
|
(8)
|
|
These shares, which vest in two
equal annual installments on January 31, 2009 and
January 31, 2010, are the remaining unvested portion of
restricted stock awards granted on January 31, 2007.
|
|
(9)
|
|
These restricted stock award shares
vest in three equal annual installments of one-third each
beginning on the first anniversary of the grant date, which was
February 6, 2008.
|
|
|
|
(10)
|
|
These restricted stock award shares
vest in five equal annual installments of 20% each beginning on
the first anniversary of the grant date, which was
February 6, 2008.
|
35
POTENTIAL
PAYOUTS UPON TERMINATION OR
CHANGE-IN-CONTROL
TSYS has entered into change of control agreements with its
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, or 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 benefit
plans.
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, 2008.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pro-Rata
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3-Yrs
|
|
|
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
|
|
|
$
|
3,704,400
|
|
|
$
|
827,774
|
|
|
$
|
56,016
|
|
|
$
|
2,520,385
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
9,628,575
|
|
James B. Lipham
|
|
|
1,146,750
|
|
|
|
1,353,165
|
|
|
|
324,922
|
|
|
|
56,016
|
|
|
|
763,354
|
|
|
|
|
|
|
|
|
|
|
|
3,644,207
|
|
M. Troy Woods
|
|
|
1,500,000
|
|
|
|
2,690,100
|
|
|
|
610,017
|
|
|
|
56,016
|
|
|
|
2,169,836
|
|
|
|
|
|
|
|
857,367
|
|
|
|
7,883,336
|
|
William A. Pruett
|
|
|
1,320,000
|
|
|
|
1,557,600
|
|
|
|
374,011
|
|
|
|
56,016
|
|
|
|
813,098
|
|
|
|
|
|
|
|
|
|
|
|
4,120,725
|
|
Kenneth L. Tye
|
|
|
1,320,000
|
|
|
|
1,557,600
|
|
|
|
374,011
|
|
|
|
56,016
|
|
|
|
800,624
|
|
|
|
|
|
|
|
719,573
|
|
|
|
4,827,824
|
|
|
|
|
(1)
|
|
Estimated by multiplying the stock
awards that vest upon change in control by fair market value of
TSYS stock on December 31, 2008.
|
|
(2)
|
|
Estimated by multiplying number of
options that vest upon change of control by the difference in
fair market value on December 31, 2008 and the exercise
price. Because the fair market value of TSYS stock on
December 31, 2008 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 change of control payments do 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.
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;
|
36
|
|
|
|
|
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
for the Year Ended December 31, 2008
The following table sets forth the number and corresponding
value realized during 2008 with respect to TSYS stock options
that were exercised and TSYS restricted shares that vested for
each named executive officer.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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
|
|
|
$
|
335,278
|
|
|
|
|
|
|
|
|
|
|
|
|
14,971
|
|
|
|
345,830
|
|
|
|
|
|
|
|
|
|
|
|
|
3,481
|
|
|
|
80,411
|
|
James B. Lipham
|
|
|
|
|
|
|
|
|
|
|
4,728
|
|
|
|
95,647
|
|
|
|
|
|
|
|
|
|
|
|
|
5,608
|
|
|
|
129,545
|
|
|
|
|
|
|
|
|
|
|
|
|
1,331
|
|
|
|
30,746
|
|
M. Troy Woods
|
|
|
|
|
|
|
|
|
|
|
8,696
|
|
|
|
175,920
|
|
|
|
|
|
|
|
|
|
|
|
|
10,435
|
|
|
|
236,666
|
|
|
|
|
|
|
|
|
|
|
|
|
10,281
|
|
|
|
237,491
|
|
|
|
|
|
|
|
|
|
|
|
|
2,445
|
|
|
|
56,480
|
|
William A. Pruett
|
|
|
|
|
|
|
|
|
|
|
5,446
|
|
|
|
110,173
|
|
|
|
|
|
|
|
|
|
|
|
|
6,569
|
|
|
|
151,744
|
|
|
|
|
|
|
|
|
|
|
|
|
1,585
|
|
|
|
36,614
|
|
Kenneth L. Tye
|
|
|
|
|
|
|
|
|
|
|
4,810
|
|
|
|
97,306
|
|
|
|
|
|
|
|
|
|
|
|
|
6,110
|
|
|
|
141,141
|
|
|
|
|
|
|
|
|
|
|
|
|
1,501
|
|
|
|
34,673
|
|
|
|
|
(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.
|
37
NONQUALIFIED
DEFERRED COMPENSATION
For the Year Ended December 31, 2008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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)
|
|
|
Philip W. Tomlinson
|
|
|
|
|
|
$
|
136,387
|
|
|
$
|
(244,474
|
)
|
|
|
|
|
|
$
|
1,124,997
|
|
James B. Lipham
|
|
|
|
|
|
|
48,217
|
|
|
|
(110,457
|
)
|
|
|
|
|
|
|
327,398
|
|
M. Troy Woods
|
|
$
|
57,543
|
|
|
|
92,314
|
|
|
|
(278,373
|
)
|
|
|
|
|
|
|
635,984
|
|
William A. Pruett
|
|
|
|
|
|
|
60,145
|
|
|
|
(59,259
|
)
|
|
|
|
|
|
|
454,764
|
|
Kenneth L. Tye
|
|
|
|
|
|
|
58,539
|
|
|
|
(110,390
|
)
|
|
|
|
|
|
|
370,201
|
|
|
|
|
(1)
|
|
The amount reported in this column
is reported in the Summary Compensation Table for 2008 as
All Other Compensation.
|
|
|
|
(2)
|
|
Of the balances reported in this
column, the amounts of $584,099, $201,321, $372,642, $226, 905
and $224,977 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
$82,419. Employees who serve as directors are no longer
compensated for their service 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.
38
CERTAIN
RELATIONSHIPS AND RELATED TRANSACTIONS
Related
Party Transaction Policy
TSYS 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 TSYS 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 2008, TSYS and Synovus were parties to a Transition
Services Agreement which was entered into in connection with the
Spin-Off pursuant to which each party provided certain services
to the other for a specified period during 2008. The services
provided by Synovus to TSYS included human resource services,
payroll services, corporate education services, investor
relations services, legal services and tax services for which
TSYS paid Synovus a fee of $3,211,987. The services provided by
TSYS to Synovus included telecommunications services and legal
services for which Synovus paid TSYS a fee of $1,005,218.
During 2008, TSYS provided electronic payment processing
services to Columbus Bank and Trust Company, a banking
subsidiary of Synovus (CB&T), and certain of
Synovus other banking subsidiaries. During 2008, TSYS
derived $4,083,204 in revenues from CB&T and certain of
Synovus other banking subsidiaries for the performance of
electronic payment processing services and $9,068,303 in
revenues from Synovus and its subsidiaries for the performance
of other data processing, software and business process
management services. Also during 2008, Synovus and its
subsidiaries paid TSYS an aggregate of $2,173,071 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 $1,255,552
during 2008.
During 2008, TSYS Total Debt Management, Inc., a subsidiary of
TSYS, derived $407,250 in revenues from CB&T for debt
collection services.
During 2008, Synovus, CB&T and other Synovus subsidiaries
paid to Columbus Productions, Inc., a subsidiary of TSYS,
$554,361 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
39
executive officer of CB&T. The payments to Synovus by TSYS
and the payments to TSYS by Synovus represent less than 2% of
Synovus 2008 gross revenues.
TSYS is a party to a Joint Ownership Agreement with Synovus and
W.C.B. Air L.L.C. pursuant to which they jointly own or lease
aircraft. W.C. Bradley Co. owns all of the limited liability
interests of W.C. B. Air. 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
$1,651,767 for its use of the aircraft during 2008.
During 2008, TSYS leased office space in Columbus, Georgia from
W.C. Bradley Co. for lease payments of $787,796. Also during
2008, W.C. Bradley Co. paid a subsidiary of TSYS $393,866 for
various printing services. John T. Turner, a director of TSYS,
is a director of W.C. Bradley Co. and has a brother who served
as an executive officer and director of W.C. Bradley Co. during
2008. The payments to W.C. Bradley Co. by TSYS and the payments
to TSYS by W.C. Bradley Co. represent less than 2% of W.C.
Bradley Co.s 2008 gross revenues.
During 2008, TSYS paid $781,112 to Communicorp, Inc. for
printing, marketing and promotional services, which payments are
comparable to payments between similarly situated unrelated
third parties for similar services. Communicorp is a wholly
owned subsidiary of Aflac Incorporated. Kriss Cloninger III, a
director of TSYS, is President and Chief Financial Officer of
Aflac. The payments by TSYS to Aflac represent less than .005%
of Aflacs 2008 gross revenues.
John Dale Hester, a
son-in-law
of Richard W. Ussery, a director of TSYS, was employed by TSYS
as a senior director of sales and marketing during 2008.
Mr. Hester received $149,437 in compensation during 2008.
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 2008. Mr. Daffin received $237,520 in compensation
during 2008. Roderick Cowan Hunter, the
son-in-law
of director James D. Yancey, was employed by TSYS as a director
of sales and marketing during 2008. Mr. Hunter received
$125,243 in compensation during 2008. The compensation received
by the employees listed above is determined under the standard
compensation practices of TSYS.
The Transition Services Agreement between TSYS and Synovus was
approved pursuant to TSYS Related Party Transaction
Policy. None of the other 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 TSYS independent directors and determined
that neither of the relationships constitute a material
relationship with TSYS: (1) an entity associated with
Mr. Driver received payments from TSYS for property or
services during 2008, which payments did not approach the 2% of
consolidated gross revenues threshold set forth in the
Boards categorical standards for independence; and
(2) an immediate family member of Ms. Yarbrough was
compensated as a non-executive employee of TSYS during 2008,
which employment was in accordance with the Boards
categorical standards for independence.
40
PRINCIPAL
SHAREHOLDERS
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, 2008.
|
|
|
|
|
|
|
|
|
|
|
Shares of TSYS Stock
|
|
|
Percentage of Outstanding Shares of
|
|
|
|
Beneficially Owned
|
|
|
TSYS Stock Beneficially Owned
|
|
Name and Address of Beneficial Owner
|
|
as of 12/31/08
|
|
|
as of 12/31/08
|
|
|
Synovus Trust Company, N.A.(1)
|
|
|
25,575,067
|
(2)
|
|
|
13
|
%
|
1148 Broadway
Columbus, Georgia 31901
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
The shares of TSYS stock held by
Synovus Trust Company are voted by the President of Synovus
Trust Company.
|
|
(2)
|
|
As of December 31, 2008, the
banking, brokerage, 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
25,583,064 shares of TSYS stock as to which they possessed
sole or shared voting or investment power. Of this total,
Synovus Trust Company held 23,745,174 shares as to
which it possessed sole voting power, 23,876,248 shares as
to which it possessed sole investment power, 249,953 shares
as to which it possessed shared voting power and
1,415,691 shares as to which it possessed shared investment
power. The other banking, brokerage, investment advisory and
trust subsidiaries of Synovus held 7,997 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, advisory,
non-advisory or agency capacities.
|
41
SECTION 16(a)
BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
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 and the NYSE. Officers, directors and greater than ten
percent shareholders are required by SEC regulations to furnish
TSYS with copies of all Section 16(a) forms they file.
To TSYS knowledge, based solely on its review of the
copies of such forms received by it, 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, 2008 all Section 16(a) filing
requirements applicable to its officers, directors and greater
than ten percent beneficial owners were complied with, except
that Mr. Bradley and Mr. Lampton each reported certain
shares deemed to be beneficially owned late on one report.
SHAREHOLDER
PROPOSALS AND NOMINATIONS
In order for a shareholder proposal to be considered for
inclusion in TSYS Proxy Statement for the 2010 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 20, 2009. 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 2010 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 30, 2009 and not later
than January 29, 2010. 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.
42
GENERAL
INFORMATION
Financial
Information
Detailed financial information for TSYS and its subsidiaries for
its 2008 fiscal year is included in TSYS 2008 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.
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
2009 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 2009 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 20, 2009
43
APPENDIX A
TOTAL
SYSTEM SERVICES, INC.
DIRECTOR
INDEPENDENCE STANDARDS
The following independence standards 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 standards 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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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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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 standards 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 standards Company
includes any parent or subsidiary in a consolidated group with
the Company.
A-2
APPENDIX B
PROPOSED
AMENDMENT TO TSYS
ARTICLES OF INCORPORATION
ARTICLE VIII
Section 1. The
number of members of the Board of Directors of the corporation
shall be fixed from time to time solely by the action of the
Board of Directors. The Board of Directors of the
corporation shall be divided into three classes, with each class
to be as nearly equal in number as possible. At the first annual
meeting of the shareholders of the corporation, all members of
the Board of Directors shall be elected with the terms of office
of directors comprising the first class to expire at the first
annual meeting of the shareholders of the corporation after
their election, the terms of office of directors comprising the
second class to expire at the second annual meeting of the
shareholders of the corporation after their election and the
terms of office of directors comprising the third class to
expire at the third annual meeting of the shareholders of the
corporation after their election, and as their terms of office
expire, the directors of each class will be elected to hold
office until the third succeeding annual meeting of the
shareholders of the corporation after their election.
The directors elected prior to the 2010 annual meeting of
shareholders shall be and are divided into three classes and
each such director shall hold office for a term expiring at the
annual meeting of shareholders held in the third year following
the year of his or her election and until his or her successor
is duly elected and qualified. The directors elected at each
annual meeting of shareholders, commencing with the annual
meeting in 2010, shall hold office for a term expiring at the
next annual meeting of shareholders and until their successors
are elected and qualified.
B-1
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ALL NOMINEES IN PROPOSAL 1 AND FOR PROPOSALS 2 AND 3.
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Please
mark your votes as indicated in this example
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To elect the following individuals
as directors to serve
until the
Annual Meeting of Shareholders in
2012: |
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1.1 James H. Blanchard |
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1.2 Richard Y. Bradley |
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1.3 Walter W. Driver, Jr. |
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1.4 Gardiner W. Garrard, Jr. |
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1.5 W. Walter Miller, Jr. |
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FOR |
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2. To amend the Articles of Incorporation to Declassify the Board of Directors. |
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3. To ratify the appointment of KPMG LLP as TSYS independent auditor for the year 2009. |
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The undersigned hereby acknowledges receipt of NOTICE of the ANNUAL MEETING
and the PROXY STATEMENT and hereby revokes all Proxies previously given by the
undersigned for the ANNUAL MEETING. |
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Please be sure to sign and date this Proxy. |
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Mark Here for Address Change or Comments SEE REVERSE
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Shareowner
sign here
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Co-owner
sign here
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NOTE: Please sign as name appears hereon. Joint owners should each sign. When signing as attorney,
executor, administrator, corporate officer, trustee or guardian, please give full title as such.
5 FOLD AND DETACH HERE 5
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 is available through 11:59 PM Eastern Time
the day prior to the annual meeting date.
TOTAL SYSTEM SERVICES, INC.
Important notice regarding the
Internet availability of proxy
materials for the Annual
Meeting of Shareholders
The Proxy Statement and the
2008 Annual Report to
Shareholders are available at:
http://annualreport.tsys.com
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.
42585
TOTAL
SYSTEM SERVICES, INC.
POST OFFICE BOX 2506, COLUMBUS, GEORGIA 31902-2506
ANNUAL MEETING OF SHAREHOLDERS OF TSYS TO BE HELD APRIL 29, 2009
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 19, 2009 at the ANNUAL MEETING OF THE SHAREHOLDERS OF TSYS to be held
on the 29th day of April, 2009, 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 judgement. 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.
(Continued and to be marked, dated and signed, on the other side)
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BNY MELLON SHAREOWNER SERVICES |
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Address
Change/Comments
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P.O. BOX 3550 |
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(Mark the corresponding box on the reverse side)
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SOUTH HACKENSACK, NJ 07606-9250 |
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5 FOLD AND DETACH HERE 5
You can now access your Total System Services, Inc. account online.
Access
your Total System Services, Inc. shareholder account online via Investor ServiceDirect® (ISD).
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 certificate history |
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View book-entry information |
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View payment history for dividends |
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Make address changes |
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Obtain a duplicate 1099 tax form |
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Establish/change your PIN |
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
www.bnymellon.com/shareowner/isd
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.
42583