NetSpend 2013 Annual Report Download - page 63

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 –17 million shares; Total System Services, Inc.
2007 Omnibus Plan –5 million shares; Total System
Services, Inc. 2002 Long-Term Incentive Plan
–9.4 million shares; and Total System Services, Inc.
2000 Long-Term Incentive Plan –2.4 million shares.
Effective February 1, 2010 and March 5, 2012, no
additional awards may be made from the Total
System Services, Inc. 2000 and 2002 Long-Term
Incentive Plans, respectively.
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, 2013, share-based compensation was
$28.9 million compared to $18.6 million and $16.5
million for the same periods in 2012 and 2011,
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. 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:
2013 2012 2011
Number of shares . . . 1,667,246 310,690 206,040
Market value (in
millions) ......... $ 41.3 6.7 3.6
On July 1, 2013, the Company issued 870,361 shares
of TSYS common stock as nonvested stock
replacement awards with a market value of $21.5
million as part of the NetSpend acquisition. The
nonvested stock bonus awards to employees of
NetSpend are for services to be provided in the
future and vest over varying periods. The NetSpend
awards were converted into equivalent shares of
Company’s common stock on the acquisition date.
The value of the stock at the date of issuance is
charged as compensation expense over the vesting
periods of the awards.
On July 18, 2013, the Company issued 212,694
retention shares of TSYS common stock with a market
value of $5.5 million to certain key employees of
NetSpend. The nonvested stock bonus awards to
certain key employees are for services to be provided
in the future and vest over periods ranging from two
to four years. The market value of the TSYS common
stock at the date of issuance is charged as
compensation expense over the vesting periods of
the awards.
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