NetSpend 2015 Annual Report Download - page 78

Note 19 Share-Based Compensation
General Description of Share-Based Compensation Plans
TSYS has various long-term incentive plans under which the Compensation Committee of the Board of Directors
has the authority to grant share-based compensation to TSYS employees.
Stock options generally become exercisable in three equal annual installments on the anniversaries of the date of
grant and expire ten years from the date of grant. The required service period for retirement eligible employees
is typically 12 or 18 months. For retirement eligible employees who retire prior to completing this required
service period, the options vest on a pro-rata basis based upon the number of months employed during the full
service period. For retirement eligible employees who retire after the required 18-month service period, the
options become fully vested upon retirement. For retirement eligible employees who retire after the required 12-
month service period, the option holder is deemed to have continued employment through the end of the
vesting period and the options continue to vest in accordance with their terms.
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, Total System Services, Inc. 2000 Long-Term
Incentive Plan and the Amended and Restated NetSpend Holdings Inc. 2004 Equity Incentive Plan for Options
and Restricted Shares Assumed by Total System Services, Inc. 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 -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
Share-based compensation costs are classified as selling, general and administrative expenses on the Company’s
statements of income and corporate administration and other expenses for segment reporting purposes. 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, 2015, share-based compensation was $41.5 million
compared to $30.8 million and $28.9 million for the same periods in 2014 and 2013, 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
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