NetSpend 2012 Annual Report Download - page 52

retire. Following adoption of ASC 718, share-based
compensation expense is recognized in income over
the remaining nominal vesting period with
consideration for retirement eligibility.
The performance-based stock options awarded to
TSYS executives effective April 30, 2010 become
exercisable on April 30, 2013, as the performance
conditions have been satisfied. The share-based
compensation expense has been recognized in
income based upon the achievement of the specified
EPS goal. The Company historically issues new shares
or uses treasury shares to satisfy share option
exercises.
Long-Term Incentive Plans
TSYS maintains the Total System Services, Inc. 2012
Omnibus Plan, Total System Services, Inc. 2007
Omnibus Plan, Total System Services, Inc. 2002 Long-
Term Incentive Plan and Total System Services, Inc.
2000 Long-Term Incentive Plan to advance the
interests of TSYS and its shareholders through awards
that give employees and directors a personal stake in
TSYS’ growth, development and financial success.
Awards under these plans are designed to motivate
employees and directors to devote their best efforts
to the business of TSYS. Awards will also help TSYS
attract and retain the services of employees and
directors who are in a position to make significant
contributions to TSYS’ success.
The plans are administered by the Compensation
Committee of the Company’s Board of Directors and
enable the Company to grant nonqualified and
incentive stock options, stock appreciation rights,
restricted stock and restricted stock units,
performance units or performance shares, cash-based
awards, and other stock-based awards.
All stock options must have a maximum life of no
more than ten years from the date of grant. The
exercise price will not be less than 100% of the fair
market value of TSYS’ common stock at the time of
grant. Any shares related to awards which terminate
by expiration, forfeiture, cancellation, or otherwise
without the issuance of such shares, are settled in
cash in lieu of shares, or are exchanged with the
Committee’s permission, prior to the issuance of
shares, for awards not involving shares, shall be
available again for grant under the various plans. The
aggregate number of shares of TSYS stock which may
be granted to participants pursuant to awards
granted under the various plans may not exceed the
following: Total System Services, Inc. 2012 Omnibus
Plan ⳮ17 million shares; Total System Services, Inc.
2007 Omnibus Plan ⳮ5 million shares; Total System
Services, Inc. 2002 Long-Term Incentive Plan
ⳮ9.4 million shares; and Total System Services, Inc.
2000 Long-Term Incentive Plan ⳮ2.4 million shares.
Effective February 1, 2010, no additional awards may
be made from the Total System Services, Inc. 2000
Long-Term Incentive Plan.
Share-Based Compensation
TSYS’ share-based compensation costs are included
as expenses and classified as cost of services and
selling, general and administrative. TSYS does not
include amounts associated with share-based
compensation as costs capitalized as software
development and contract acquisition costs as these
awards are typically granted to individuals not
involved in capitalizable activities. For the year ended
December 31, 2012, share-based compensation was
$18.6 million compared to $16.5 million and $15.8
million for the same periods in 2011 and 2010,
respectively.
Nonvested Awards: The Company granted shares
of TSYS common stock to certain key employees and
non-management members of its Board of Directors.
The grants to certain key employees were issued
under nonvested stock bonus awards for services to
be provided in the future by such officers and
employees. Beginning in 2011, the grants to the
Board of Directors were fully vested on the date of
grant. The following table summarizes the number of
shares granted each year:
2012 2011 2010
Number of shares ............................................ 310,690 206,040 197,186
Market value ................................................ $6.7 million $3.6 million $3.1 million
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