NetSpend 2015 Annual Report Download - page 79

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and are typically 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.
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.
The following table summarizes the number of shares granted each year:
2015 2014 2013
Number of shares ...................................................... 388,211 672,724 1,667,246
Market value (in millions) ................................................ $ 14.9 20.6 41.3
A summary of the status of TSYS’ nonvested shares as of December 31, 2015, 2014 and 2013 and the changes
during the periods are presented below:
2015 2014 2013
(in thousands, except per share data)
Nonvested shares 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 ............. 1,769 $26.75 1,783 $24.19 554 $19.96
Granted1................................. 388 38.38 673 30.67 1,667 24.75
Vested .................................... (930) 26.05 (602) 23.74 (328) 19.95
Forfeited/canceled ......................... (81) 28.78 (85) 25.47 (110) 23.82
Outstanding at end of year ................... 1,146 $31.11 1,769 $26.75 1,783 $24.19
1 Includes the issuance of approximately 870,361 stock replacement awards in connection with the acquisition of NetSpend
in 2013. These awards had a market value of $21.5 million. A portion of the expense associated with these options has
been included as a component of the total purchase price of the NetSpend acquisition. Refer to Note 24.
As of December 31, 2015, there was approximately $22.8 million of total unrecognized compensation cost
related to nonvested share-based compensation arrangements. That cost is expected to be recognized over a
remaining weighted average period of 1.9 years.
Performance- and Market-Based Awards
The Company granted performance- and market-based shares to certain key executives. The Company has also
granted performance-based shares to certain key employees. The performance- and market-based goals are
established by the Compensation Committee of the Board of Directors and will vest, up to a maximum of 200%.
During 2015 and 2014, the Compensation Committee established performance goals based on adjusted EPS,
revenue growth and revenues before reimbursable items and market goals based on Total Shareholder Return
(TSR) as compared to the TSR of the companies in the S&P 500 over the performance period.
Compensation expense for performance shares is measured on the grant date based on the quoted market price
of TSYS common stock. The Company estimates the probability of achieving the goals through the performance
period and expenses the awards on a straight-line basis. The fair value of market-based awards is estimated on
the grant date using a Monte Carlo simulation model. The Company expenses market-based awards on a
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