NetSpend 2013 Annual Report Download - page 32

While TSYS and the other defendants believed that
each of the Actions was without merit, in an effort to
minimize the cost and expense of any litigation
relating to such Actions, on May 29, 2013, the
defendants reached an agreement in principle with
the plaintiffs regarding settlement of the Actions. In
connection with the settlement contemplated by that
agreement in principle, and, later, a Settlement
Agreement, dated as of September 20, 2013 (the
“Settlement Agreement”), the Actions and all claims
asserted therein would be dismissed. In addition,
pursuant to the terms of the Settlement Agreement,
TSYS and/or NetSpend, where applicable, agreed
(a) to make certain amendments to the Merger
Agreement; (b) that, consistent with the terms of the
Merger Agreement, prior to the receipt of approval
of the NetSpend stockholders, NetSpend could
furnish information to, and engage in discussions and
negotiations with, third parties who make unsolicited
bona fide acquisition proposals if certain conditions
were met; (c) that the special meeting of NetSpend
stockholders that was scheduled to be held on
May 31, 2013 would be adjourned to June 18, 2013;
(d) that NetSpend would not take certain positions
with respect to any appraisal proceeding perfected
under Delaware law; (e) that certain information
would be provided to counsel for the plaintiffs in the
Actions in connection with any perfected appraisal
proceeding; and (f) without admitting that any of the
claims in the Actions have merit or that any
supplemental disclosure was required under any
applicable statute, rule, regulation or law, that they
would acknowledge that the filing and prosecution of
the Actions were the cause, in whole or in part, of
certain supplemental disclosures made in connection
with the proposed merger. The Settlement
Agreement was submitted to the Court of Chancery
on October 4, 2013, and on December 18, 2013,
after considering the terms of the settlement, the
Delaware Chancery Court entered an order
approving the proposed settlement and dismissing
the Actions with prejudice. Under the terms of the
Settlement Agreement, the settlement became final
upon the expiration of the time for any appeal of the
court’s December 18, 2013 order, or thirty days
following December 18, 2013.
Forward-Looking Statements
Certain statements contained in this filing which are not
statements of historical fact constitute forward-looking
statements within the meaning of the Private Securities
Litigation Reform Act (the Act). These forward-looking
statements include, among others: (i) TSYS’ expectation
that the loss of Bank of America as a merchant services
client will not have a material adverse effect on TSYS’
business; (ii) TSYS’ expectation that the Durbin
Amendment will not have a significant negative impact
on TSYS’ business; (iii) TSYS’ expectation with respect
to foreign currency exchange rates; (iv) TSYS’
expectation with respect to the timing of the
conversion of Bank of America’s consumer card
portfolios; (v) TSYS’ expectation that it will be able to
fund a significant portion of its capital expenditure
needs through internally generated cash in the future;
(vi) TSYS’ earnings guidance for 2014 total revenues,
revenues before reimbursable items, adjusted EBITDA
and adjusted cash EPS; (vii) TSYS’ belief with respect to
lawsuits, claims and other complaints; (viii) TSYS’
expectation with respect to certain tax matters; (ix) the
Board’s intention to continue to pay cash dividends,
and the assumptions underlying such statements. In
addition, certain statements in future filings by TSYS
with the Securities and Exchange Commission, in press
releases, and in oral and written statements made by or
with the approval of TSYS which are not statements of
historical fact constitute forward-looking statements
within the meaning of the Act. Examples of forward-
looking statements include, but are not limited to:
(i) projections of revenue, income or loss, earnings or
loss per share, the payment or nonpayment of
dividends, capital structure and other financial items;
(ii) statements of plans and objectives of TSYS or its
management or Board of Directors, including those
relating to products or services; (iii) statements of future
economic performance; and (iv) statements of
assumptions underlying such statements. Words such
as “believes,” “anticipates,” “expects,” “intends,”
“targeted,” “estimates,” “projects,” “plans,” “may,”
“could,” “should,” “would,” and similar expressions
are intended to identify forward-looking statements but
are not the exclusive means of identifying these
statements.
These statements are based upon the current beliefs
and expectations of TSYS’ management and are
subject to significant risks and uncertainties. Actual
results may differ materially from those contemplated
by the forward-looking statements. A number of
important factors could cause actual results to differ
materially from those contemplated by our forward-
looking statements. Many of these factors are beyond
TSYS’ ability to control or predict. These factors
include, but are not limited to:
• the material breach of security of any of TSYS’
systems;
• TSYS incurs expenses associated with the signing
of a significant client;
• internal growth rates for TSYS’ existing clients
are lower than anticipated whether as a result of
unemployment rates, card delinquencies and
charge off rates or otherwise;
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