NetSpend 2014 Annual Report Download - page 76

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A summary of the status of TSYS’ performance-based nonvested shares as of December 31, 2014, 2013 and 2012
and changes during those periods are presented below:
2014 2013 2012
Performance-based
Nonvested shares
(in thousands, except per share data) Shares
Weighted
Average
Grant Date
Fair Value Shares
Weighted
Average
Grant Date
Fair Value Shares
Weighted
Average
Grant Date
Fair Value
Outstanding at beginning of year ............. 1,049 $22.75 809 $18.76 580 $16.68
Granted ................................... 211 30.89 564124.88 278 22.91
Vested .................................... (258) 17.57 (324) 15.93 (37) 18.08
Forfeited/canceled .......................... (236) 25.62 — — (12) 16.57
Outstanding at end of year ................... 766 $25.86 1,049 $22.75 809 $18.76
1 Includes the issuance of approximately 87,356 stock replacement awards in connection with the acquisition of NetSpend in
2013. These awards had a market value of $2.2 million. A portion of the expense associated with these awards has been
included as a component of the total purchase price of the NetSpend acquisition. Refer to Note 24.
Stock Option Awards
During 2014, 2013 and 2012, the Company granted stock options to key TSYS executive officers and non-
management members of its Board of Directors. The grants to key TSYS executive officers were issued for
services to be provided in the future and vest over a period of three years. The grants to the Board of Directors
were fully vested on the date of grant. The average fair value of the options granted was estimated on the date
of grant using the Black-Scholes-Merton option-pricing model.
On July 1, 2013, the Company issued 1,060,148 stock option replacement awards with a market value of
$13.7 million as part of the NetSpend acquisition. The weighted average fair value of the options was $12.93 and
was calculated on the date of grant using a conversion factor into equivalent shares of the Company’s common
stock on the acquisition date. The grants vest over a period ranging from seven months to 45 months. The
weighted average fair value of the option grants was estimated on the date of grant using the Black-Scholes-
Merton option-pricing model with the following weighted average assumptions: exercise price of $11.68; risk-free
interest rate of 1.31%; expected volatility of 29.22%; expected term of 4.7 years; and dividend yield of 1.63%.
The following table summarizes the weighted average assumptions, and the weighted average fair value of the
options:
2014 2013 2012
Number of options granted ...................................... 1,046,372 1,939,796 818,090
Weighted average exercise price .................................. $ 30.96 $ 17.42 $ 22.95
Risk-free interest rate ............................................ 2.01% 1.31% 1.69%
Expected volatility .............................................. 25.06% 26.81% 24.11%
Expected term (years) ........................................... 6.5 6.0 7.9
Dividend yield ................................................. 1.29% 1.64% 1.75%
Weighted average fair value ...................................... $ 7.66 $ 9.48 $ 5.27
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