TOTAL SYSTEM SERVICES, INC.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
(Amendment No. )
Filed by the Registrant þ
Filed by a Party other than the Registrant o
Check the appropriate box:
o Preliminary Proxy Statement
o Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
þ Definitive Proxy Statement
o Definitive Additional Materials
o Soliciting Material Pursuant to § 240.14a-12
Total System Services, Inc.
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
þ No fee required.
o Fee computed on
table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
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Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the
offsetting fee was paid previously. Identify the previous filing
by registration statement number, or the Form or Schedule and the
date of its filing. |
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Philip W.
Tomlinson
Chairman of the Board and
Chief Executive Officer
November 5, 2007
Dear TSYS Shareholder:
This is an exciting time for TSYS. As you may be aware, TSYS and
Synovus Financial Corp., TSYS indirect 80.7% shareholder,
recently entered into an agreement and plan of distribution.
Subject to the terms and conditions of the agreement and plan of
distribution, Synovus has agreed to spin-off TSYS by
distributing all of Synovus shares of TSYS common stock to
Synovus shareholders. Prior to the spin-off and in accordance
with the agreement and plan of distribution, TSYS expects to pay
a one-time special cash dividend, in the amount of $600 million,
to all TSYS shareholders, including Synovus.
Following the distribution, TSYS will, for the first time in its
history, operate as an independent, stand-alone publicly-traded
corporation.
Although shareholder approval is not required for the
distribution of TSYS shares by Synovus or for the special
dividend, we are holding a special meeting of shareholders to
consider and vote on proposals to amend our Articles of
Incorporation and Bylaws. These documents were adopted when
Synovus was a substantial majority shareholder, and the TSYS
Board of Directors believes that changes to these documents are
appropriate as part of the spin-off. Shareholder approval of the
amendments to the Articles of Incorporation and Bylaws is a
condition to the distribution of TSYS shares by Synovus.
In addition, we are also asking our shareholders to approve the
adoption of our 2008 Omnibus Plan so that we will have the
capability and flexibility to compensate our employees and align
their interests with those of our shareholders as we move
forward as a stand-alone company.
Synovus has agreed to vote in favor of the proposals to amend
our Articles of Incorporation and Bylaws and to adopt the 2008
Omnibus Plan. Accordingly, approval of these proposals is
assured. If the distribution of TSYS shares by Synovus is not
completed for any reason, the amendments to our Articles of
Incorporation and Bylaws and the 2008 Omnibus Plan, even if
approved by shareholders, will be abandoned and will not become
effective.
You are cordially invited to attend the special meeting of
shareholders at 9:00 a.m. on Thursday, November 29,
2007, at the TSYS Riverfront Campus Auditorium, 1600 First
Avenue, Columbus, Georgia.
Whether you own a few or many TSYS shares, and whether or not
you plan to attend in person, please submit your proxy promptly
by telephone or via the Internet in accordance with the
instructions on the enclosed proxy card or by completing, dating
and returning your proxy card in the enclosed envelope.
Returning the proxy card or otherwise submitting your proxy does
not deprive you of your right to attend the special meeting and
vote in person.
We are very excited about our future as a stand-alone public
company and believe it will better position TSYS for the future.
Thank you for helping us make TSYS what it is today. We look
forward to your continued support.
Sincerely yours,
Philip W. Tomlinson
TOTAL
SYSTEM SERVICES,
INC.®
NOTICE OF THE SPECIAL MEETING
OF SHAREHOLDERS
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TIME AND DATE
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9:00 a.m.
Thursday, November 29, 2007
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PLACE
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TSYS Riverfront Campus
Auditorium
1600 First Avenue
Columbus, Georgia 31901
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ITEMS OF BUSINESS
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(1) A proposal to approve a
number of amendments contained in the Amended and Restated
Articles of Incorporation of TSYS, which amendments are set
forth in ten proposals, each to be voted on as a separate item
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(2) A proposal to approve a
number of amendments contained in the Amended and Restated
Bylaws of TSYS, which amendments are set forth in five
proposals, each to be voted on as a separate item
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(3) A proposal to approve the
adoption of the Total System Services, Inc. 2008 Omnibus Plan
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WHO MAY VOTE
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You can vote if you were a
shareholder of record on November 2, 2007.
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PROXY VOTING
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Your vote is important. Please
vote in one of these ways:
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(1) Use the toll-free
telephone number shown on the proxy card;
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(2) Visit the website listed
on your proxy card;
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(3) Mark, sign, date and
promptly return the enclosed proxy card in the postage-paid
envelope provided; or
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(4) Submit a ballot at the
Special Meeting.
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G. Sanders Griffith, III
Secretary
Columbus, Georgia
November 5, 2007
TABLE OF
CONTENTS
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A-2-1
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B-1-1
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D-1
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PROXY
STATEMENT
VOTING INFORMATION
Purpose
This Proxy Statement and the accompanying proxy card are being
mailed to TSYS shareholders beginning on or about
November 5, 2007. The TSYS Board of Directors is soliciting
proxies to be used at the Special Meeting of TSYS Shareholders
which will be held on Thursday, November 29, 2007, at
9:00 a.m., at the TSYS Riverfront Campus Auditorium, 1600
First Avenue, Columbus, Georgia. The Special Meeting is being
held for shareholders to consider and vote on
(1) amendments to our Articles of Incorporation contained
in the Amended and Restated Articles of Incorporation;
(2) amendments to our Bylaws contained in the Amended and
Restated Bylaws; and (3) adopting our 2008 Omnibus Plan.
These items of business are being proposed for consideration by
shareholders in connection with the potential distribution by
Synovus Financial Corp. (Synovus) of its TSYS
shares, held indirectly through its wholly owned subsidiary
Columbus Bank and Trust Company (CB&T),
which we refer to in this proxy statement as the
spin-off. Shareholder approval of the amendments to
our Articles of Incorporation and Bylaws is a condition to
completing the spin-off. If the spin-off is not completed for
any reason, the amendments to our Articles of Incorporation and
Bylaws, and the 2008 Omnibus Plan, even if approved by
shareholders, will be abandoned and will not become effective.
Proxies are solicited to give all shareholders of record an
opportunity to vote on matters to be presented at the Special
Meeting. In the following pages of this Proxy Statement, you
will find more information on the matters to be voted on at the
Special Meeting or any adjournment of that meeting.
Who
Can Vote
You are entitled to vote if you were a shareholder of record of
TSYS stock as of the close of business on November 2, 2007.
Your shares can be voted at the meeting only if you are present
or represented by a valid proxy.
Quorum,
Required Votes and Shares Outstanding
A majority of the outstanding shares of TSYS stock must be
present, either in person or represented by proxy, in order to
conduct the Special Meeting of TSYS Shareholders.
The affirmative vote of shareholders holding at least 80% of the
total issued and outstanding shares of TSYS stock as of the
close of business on November 2, 2007, is needed to approve
the amendments to TSYS Articles of Incorporation and, due
to the nature of the amendments proposed, to approve the
amendments to TSYS Bylaws. The affirmative vote of a
majority of the votes cast is needed to approve the adoption of
the 2008 Omnibus Plan.
On November 2, 2007, 197,911,497 shares of TSYS common
stock were outstanding.
Columbus
Bank and Trust Company
CB&T owned individually 159,630,980 shares, or 80.7%,
of the outstanding shares of TSYS common stock on
November 2, 2007. CB&T is a wholly owned banking
subsidiary of Synovus. CB&T has agreed to vote FOR all
proposals. Accordingly, we expect that all proposals will
receive the requisite shareholder approval.
Proxies
The Board of Directors of TSYS has designated two individuals to
serve as proxies to vote the shares represented by proxies at
the Special Meeting of TSYS Shareholders. If you properly submit
a proxy card or submit a proxy by telephone or via the Internet
but do not specify how you want your shares to be voted, your
shares will be voted by the designated proxies: (1) FOR the
approval of all of the amendments to TSYS Articles of
Incorporation; (2) FOR the approval of all of the
amendments to TSYS Bylaws; and (3) FOR the adoption
of the 2008 Omnibus Plan.
1
At this time, we are unaware of any matters, other than as set
forth above, that may properly come before the Special Meeting.
If any other matters properly come before the Special Meeting,
the persons named in the enclosed proxy, or their duly
constituted substitutes acting at the Special Meeting or any
adjournment or postponement of the Special Meeting, will be
deemed authorized to vote or otherwise act on such mattes in
accordance with their judgment.
Voting
of Shares
Each share of TSYS common stock represented at the Special
Meeting is entitled to one vote on each matter properly brought
before the meeting. All shares entitled to vote and represented
in person or by valid proxies received by phone, Internet or
mail will be voted at the Special Meeting in accordance with the
instructions indicated on those proxies. If a proxy does not
specify how the shares represented by that proxy should be
voted, the designated proxies will vote in the manner described
in the section entitled Proxies above.
TSYS Dividend Reinvestment and Direct Stock Purchase
Plan: If you participate in this Plan, your proxy
card represents shares held in the Plan, as well as shares you
hold in certificate form registered in the same name.
Abstentions
and Broker Non-Votes
Under certain circumstances, brokers are prohibited from
exercising discretionary authority for beneficial owners who
have not provided voting instructions to the broker (a
broker non-vote). In these cases, and in cases where
the shareholder abstains from voting on a matter, those shares
will be counted for the purpose of determining if a quorum is
present. Abstentions and broker non-votes will have the same
effect as a vote against the amendments to TSYS Articles
of Incorporation and TSYS Bylaws and will have no effect
on the outcome of the vote to adopt the 2008 Omnibus Plan.
How
You Can Vote
If you hold your shares in your own name, you may submit
a proxy by telephone, via the Internet or by mail or vote by
attending the Special Meeting and voting in person.
Vote By Telephone:
You can vote your shares by telephone until
11:59 p.m. Eastern Standard Time on November 28,
2007 by calling the toll-free telephone number (at no cost to
you) shown on your proxy card. Telephone voting is available
24 hours a day, seven days a week. Easy-to-follow voice
prompts allow you to vote your shares and confirm that your
instructions have been properly recorded. Our telephone voting
procedures are designed to authenticate the shareholder by using
individual control numbers. If you vote by telephone, you do NOT
need to return your proxy card.
Vote By Internet:
You can also choose to vote on the Internet until
11:59 p.m. Eastern Standard Time on November 28,
2007 by accessing the website listed on your proxy card.
Internet voting is available 24 hours a day, seven days a
week. You will be given the opportunity to confirm that your
instructions have been properly recorded. If you vote on the
Internet, you do NOT need to return your proxy card.
Vote By Mail:
If you choose to vote by mail, simply mark your proxy card, date
and sign it, and return it in the postage-paid envelope provided.
If your shares are held in the name of a bank, broker or
other nominee, you will receive instructions from the holder
of record that you must follow for your shares to be voted.
Please follow their instructions carefully. Also, please note
that if the holder of record of your shares is a broker, bank or
other nominee and you wish to vote in person at the special
meeting, you must request a legal proxy from your bank, broker
or other nominee that holds your shares and present that proxy
and proof of identification at the Special Meeting.
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Revocation
of Proxy
If you vote by proxy, you may revoke that proxy at any time
before it is voted at the Special Meeting. You may do this by
(1) signing another proxy card with a later date and
returning it to us prior to the Special Meeting, (2) voting
again by telephone or on the Internet (only your last telephone
or Internet proxy will be counted) before
11:59 p.m. Eastern Standard Time on November 28,
2007, or (3) attending the Special Meeting in person and
casting a ballot (your attendance at the Special Meeting, in and
of itself, will not revoke the proxy).
If your TSYS shares are held by a bank, broker or other nominee,
you must follow the instructions provided by the bank, broker or
other nominee if you wish to change your vote.
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SPECIAL
DIVIDEND, SPIN-OFF AND PLAN OF DISTRIBUTION
On October 25, 2007, TSYS entered into an Agreement and Plan of
Distribution with Synovus and CB&T, a wholly owned banking
subsidiary of Synovus and approximately 80.7% parent of TSYS,
which we refer to in this proxy statement as the Plan of
Distribution. Subject to the terms and conditions of the
Plan of Distribution, CB&T will distribute all of its
shares of TSYS common stock to Synovus and then Synovus will
distribute all of those shares to Synovus shareholders, after
which distributions TSYS will become a fully independent,
publicly owned company. In this proxy statement, we refer to the
distributions of TSYS shares by CB&T and Synovus as the
spin-off. Prior to the spin-off and in accordance
with the Plan of Distribution, TSYS expects to pay a one-time
aggregate cash dividend of $600 million to all TSYS
shareholders, including CB&T, which we refer to in this
proxy statement as the special dividend. The special
dividend is expected to be funded by a combination of TSYS
cash on hand and a revolving credit facility expected to be
entered into by TSYS prior to the spin-off. Synovus shareholders
who receive shares of TSYS stock in the spin-off will not be
entitled to the special dividend.
Shareholder approval of the special dividend, the spin-off,
and the Plan of Distribution is not required and is not being
sought in connection with this proxy statement. However,
shareholder approval of the amendments to the TSYS Articles of
Incorporation contained in the Amended and Restated Articles of
Incorporation and approval of the amendments to the TSYS Bylaws
contained in the Amended and Restated Bylaws is a condition to
the spin-off and is being sought in connection with this proxy
statement.
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INTRODUCTION
TO PROPOSALS 1 AND 2:
AMENDMENTS TO THE COMPANYS
ARTICLES OF
INCORPORATION AND BYLAWS
In connection with the proposed spin-off, the Board of
Directors, together with the Corporate Governance and Nominating
Committee and the Special Committee formed to consider the
spin-off, undertook a review of our Articles of Incorporation
and Bylaws. The Articles of Incorporation and Bylaws contain a
number of provisions requiring the affirmative vote of
shareholders holding at least 80% of the issued and outstanding
shares of TSYS. These provisions were included in the Articles
of Incorporation and Bylaws at a time when Synovus was a
substantial majority shareholder. Other provisions in these
documents have not been updated to reflect changes to the
statutory language contained in the Georgia Business
Corporations Code (the GBCC) since these documents
were adopted.
As a result of this review, the Board of Directors adopted
(1) the Amended and Restated Articles of Incorporation
attached hereto as
Appendix A-1,
subject to shareholder approval and completion of the spin-off;
(2) an amendment to Article III, Section 11 of
the Bylaws relating to dividends, (3) the Amended and
Restated Bylaws attached hereto as
Appendix B-1,
subject to completion of the spin-off; and (4) the Amended
and Restated Bylaws attached hereto as
Appendix C-1,
subject to shareholder approval and completion of the spin-off.
A summary of the amendments to these documents, as adopted by
the Board of Directors, follows.
Summary
of Amendments
The Amended and Restated Articles of Incorporation amend our
Articles of Incorporation, subject to shareholder approval and
completion of the spin-off, by:
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Enlarging our business purpose;
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Authorizing the further issuance of 100,000,000 shares of
preferred stock on such terms and at such times as our Board of
Directors may determine;
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Providing that the number of directors will be fixed from time
to time by the Board of Directors;
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Permitting removal of directors by shareholders only for cause
and decreasing the required shareholder vote to remove directors
from 80% to
662/3%;
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Eliminating supermajority voting requirements for shareholder
approval of mergers and similar transactions;
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Eliminating supermajority voting requirements for shareholder
approval for most amendments to the Articles of Incorporation;
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Eliminating supermajority requirements for shareholders to call
a special meeting;
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Eliminating the requirement that shareholder action by written
consent must be unanimous (although this remains the GBCC
default rule and will continue to apply to our shareholders);
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Updating the provision allowing the Board of Directors to
consider non-economic impacts of tender offers to conform to
current Georgia law so that the Board of Directors may consider
the interests of constituencies in addition to shareholders when
considering the best interests of the corporation; and
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Updating the provision limiting the personal liability of
directors to conform to current Georgia law.
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The amendment to Article III, Section 11 of the Bylaws
eliminated the provision regarding net earnings and earned
surplus restrictions on distributions to shareholders and
replaced it with a provision conforming to the GBCC. As amended,
the Bylaws provide that a distribution may not be made if, after
giving it effect, the corporation is not able to pay its debts
as they become due or the corporations total assets are
less than the sum of its total liabilities plus the amount that
would be needed, if the corporation were to be dissolved at the
time of the distribution, to satisfy any preferential rights of
shareholders whose preferential rights are superior to those
receiving the distribution.
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The Amended and Restated Bylaws adopted by the Board of
Directors that do not require shareholder approval, and
which are effective only upon completion of the spin-off,
address the following principal topics:
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Advance notice requirements for shareholders to bring business
before a meeting of shareholders or to nominate a candidate for
director;
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Shareholder meeting mechanics, including inspectors of election;
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Shareholder action by unanimous written consent;
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Board vacancies;
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Emeritus and Advisory Directors;
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Shareholder inspection of records;
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Indemnification of directors and officers;
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Alternative stakeholders; and
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Opting into the Georgia Business Combination Statute.
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The Amended and Restated Bylaws adopted by the Board of
Directors that do require shareholder approval, and which
(following shareholder approval) are effective only upon
completion of the spin-off, eliminate supermajority provisions
for calling special meetings of shareholders, declassifying the
Board of Directors and approving mergers and similar
transactions. In addition, these Amended and Restated Bylaws
eliminate the shareholders ability to fix the number of
directors, permit removal of directors only for cause and
decrease the required shareholder vote to remove directors from
80% to
662/3%.
Attached hereto as
(1) Appendix A-2
is a marked version of our Amended and Restated Articles of
Incorporation including the full text of every change proposed
to be made to our existing Articles of Incorporation,
(2) Appendix B-2
is a marked version of our Amended and Restated Bylaws,
including the full text of every change to be made to our
existing Bylaws, adopted by the Board (and not requiring
shareholder approval), and
(3) Appendix C-2
is a marked version of our Amended and Restated Bylaws
reflecting the full text of every change proposed to be made to
the Amended and Restated Bylaws requiring shareholder approval.
Words and phrases that are marked through with a single line
represent deletions to our Articles of Incorporation and Bylaws,
and words and phrases that appear in bold text and underlined
represent additions to our Articles of Incorporation and Bylaws.
Overview
of Material Amendments
Although the following discussion highlights only the material
changes to the Articles of Incorporation and Bylaws it does not
highlight every change. Therefore, shareholders are urged to
read carefully the following discussion as well as the marked
version of the Amended and Restated Articles of Incorporation
attached hereto as
Appendix A-2
and the marked versions of the Amended and Restated Bylaws
attached hereto as
Appendix B-2
and
Appendix C-2
before voting on the proposals to amend the Articles of
Incorporation and to amend the Bylaws.
As more fully discussed below, our Board of Directors believes
that each of the amendments contained in the Amended and
Restated Articles of Incorporation and the Amended and Restated
Bylaws is advisable and in the best interests of TSYS and our
shareholders.
The general overview in this Introduction to Proposals 1
and 2 is followed by a more detailed discussion of each
amendment separately in the sections of this Proxy Statement
which discuss Proposal 1 and Proposal 2.
Reasons for Adopting the Amended and Restated Articles of
Incorporation and Amended and Restated
Bylaws. Our existing Articles of Incorporation
and Bylaws contain a number of provisions requiring approval by
shareholders holding at least 80% of the issued and outstanding
shares of common stock to take certain actions. Our Board of
Directors believes that these supermajority provisions will no
longer be appropriate once the TSYS shares are distributed by
Synovus and TSYS is a stand-alone public company. In addition,
some provisions of our Articles of Incorporation and Bylaws have
not been updated to reflect changes in the GBCC made since the
time the Articles of Incorporation and Bylaws were adopted.
6
The amendments also would reduce our vulnerability to an
unsolicited takeover proposal. The amendments include provisions
that will discourage or make it more difficult to initiate a
merger, tender offer or proxy contest, to bring about the
assumption of control by a holder of a large block of our
securities, and to remove incumbent directors without the
approval of our Board of Directors. The Board of Directors
believes that any strategic transaction involving TSYS should be
undertaken pursuant to a reasoned and informed process designed
to maximize shareholder value. The amendments are not being
proposed in response to any effort of which our Board of
Directors is aware to accumulate capital stock or to obtain
control of TSYS at this time. However, our Board of Directors
has observed the use of coercive takeover tactics, and believes
that it is in the best interests of TSYS and our shareholders to
adopt the amendments, which contain defenses against coercive
efforts to gain control of TSYS without the approval of our
Board of Directors.
Potential Anti-Takeover Effect of the
Amendments. Our Board of Directors believes that
the provisions contained in the Amended and Restated Articles of
Incorporation and Amended and Restated Bylaws will encourage
persons seeking to acquire control of TSYS to initiate such
acquisitions through arms length negotiations with our Board of
Directors rather than through a hostile takeover attempt.
A hostile takeover bid may be unfair or disadvantageous to TSYS
and our shareholders because, among other reasons (1) it
may be timed to take advantage of temporarily depressed stock
prices, (2) it may be designed to foreclose or minimize the
possibility of more favorable competing bids or alternative
transactions, and (3) it may involve the acquisition of
only a controlling interest in our stock, without affording all
shareholders the opportunity to receive the same economic
benefits.
By contrast, in a transaction where a potential hostile bidder
must negotiate with our Board of Directors, our Board of
Directors has the opportunity to take into account the
underlying and long-term value of our business, the
possibilities for alternative transactions on more favorable
terms, anticipated favorable developments in our business not
yet reflected in the stock price and equality of treatment of
all shareholders. Our Board of Directors further believes that
it is preferable to implement defensive measures now, when they
can be considered carefully by our shareholders and our officers
and directors, rather than attempt to implement such defensive
measures in response to an unsolicited attempt to gain control
of TSYS.
Although our Board of Directors believes the adoption of the
amendments is in the best interests of TSYS and our
shareholders, shareholders should be aware of potential
undesirable overall effects of certain of the proposed
amendments contained in the Amended and Restated Articles of
Incorporation and Amended and Restated Bylaws. The amendments,
if adopted, may have the effect of discouraging a merger, tender
offer, proxy contest or the assumption of control by a holder of
a large block of our securities that may be in the best
interests of our shareholders or other transactions in which our
shareholders might receive a substantial premium for their
shares over then-current market prices. In addition, certain
provisions contained in the amendments make the removal of
directors, including incumbent directors, more difficult even if
such removal would be beneficial to our shareholders.
Our Board of Directors does not presently intend to propose
other anti-takeover measures in other proxy solicitations,
although our Board of Directors may determine to propose one or
more such measures at a later date if it determines that it is
in the best interests of TSYS and our shareholders to implement
additional anti-takeover measures. In addition, we may in the
future enter into agreements with our officers and directors
from time to time that contain change in control provisions that
could have anti-takeover effects.
Existing
Anti-Takeover Measures and Statutory Provisions
Certain provisions of our Articles of Incorporation and Bylaws
as well as certain provisions of Georgia law may also have the
effect of making more difficult and discouraging, to varying
degrees and in various circumstances, an attempt to acquire
control of TSYS without approval of our Board of Directors, even
if such acquisition of control may be favorable to the interests
of some or all of our shareholders.
Classified Board. Our existing Articles of
Incorporation provide that our directors are divided into three
classes, and that each director be elected for a full term of
three years. This classified board structure helps
enhance the continuity and stability of our Board of Directors
by providing for a three-year term for each director, thereby
reducing the possibility that a third party could effect a
sudden or
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surprise change of control of our Board of Directors because
they could potentially only replace those directors due for
reelection in any given year.
Unanimous Written Consent. Our existing
Articles of Incorporation permit shareholders to act without a
meeting only if the unanimous written consent of all
shareholders entitled to vote on the matter is obtained. Since
TSYS is a publicly traded company, obtaining unanimous written
consent is not a practical means to carry out shareholder
actions, such as removing directors or amending the Articles of
Incorporation, without holding a meeting. Accordingly, a
potential hostile bidder could not effectively act to effect a
change in control of the Board of Directors or take any other
hostile action without a meeting of shareholders. Although we
are proposing to delete this provision from the Amended and
Restated Articles of Incorporation and Amended and Restated
Bylaws, this unanimous written consent requirement is the
default rule contained in the GBCC and will continue to apply to
TSYS.
Business Combination Statute. If the spin-off
is completed, our Bylaws will include an election to opt into
Sections 14-2-1131
through 1133 of the GBCC. In general, these provisions prohibit
a purchaser who acquires 10% or more of outstanding TSYS voting
stock, an interested shareholder, without the
approval of our Board of Directors, from completing a business
combination with TSYS for five years unless (1) prior to
the time the person becomes an interested shareholder, the Board
of Directors approved either the business combination or the
transaction that resulted in the person becoming an interested
shareholder or (2) the interested shareholder acquires 90%
or more of the outstanding common stock of the company
(excluding shares owned by directors and officers of the
company, subsidiaries of the company and shares owned in certain
employee stock plans) either in the business combination, or
prior to the business combination.
Sections 14-2-1131
through 1133 encourage persons interested in acquiring TSYS to
negotiate in advance with our Board of Directors because of the
first exception to the prohibition described above. It also
tends to discourage the accumulation of large blocks of our
securities by third parties which may be disruptive to the
stability of our relationships with stakeholders such as our
employees, customers, and major lenders.
Vote
required and effectiveness of amendments to the Articles of
Incorporation and the Bylaws
Vote required. The affirmative vote of
shareholders holding at least 80% of our issued and outstanding
shares of common stock is required for the adoption of the
amendments contained in our Amended and Restated Articles of
Incorporation and for the adoption of those amendments to our
Amended and Restated Bylaws that require shareholder approval.
Effectiveness. If the spin-off is completed,
and shareholder approval of all of the parts of Proposal 1
is obtained, the Amended and Restated Articles of Incorporation
attached hereto as
Appendix A-1
will become effective upon the later to occur of (1) the
time the spin-off is completed and (2) the date on which
the amendments are filed with the Secretary of State of the
State of Georgia. The Amended and Restated Bylaws adopted by the
Board of Directors which do not require shareholder approval and
attached hereto as
Appendix B-1
will become effective at the time the spin-off is completed. In
addition, if shareholder approval of all of the parts of
Proposal 2 is obtained, the additional amendments to the
Amended and Restated Bylaws requiring shareholder approval and
attached hereto as
Appendix C-1
will become effective at the time the spin-off is completed.
If the spin-off is not completed for any reason, the amendments
contained in our Amended and Restated Articles of Incorporation
and Amended and Restated Bylaws, even if approved by
shareholders, will be abandoned and the Articles of
Incorporation and the Bylaws will remain unchanged.
The Board of Directors recommends that you vote
FOR the approval of the amendments contained in our
Amended and Restated Articles of Incorporation and
FOR the approval of the amendments contained in our
Amended and Restated Bylaws.
8
PROPOSAL 1:
APPROVAL OF AMENDMENTS CONTAINED IN THE
AMENDED AND RESTATED ARTICLES OF INCORPORATION
Summary
In connection with the proposed spin-off, the Board of
Directors, together with the Corporate Governance and Nominating
Committee and the Special Committee formed to consider the
spin-off, undertook a review of our Articles of Incorporation
and Bylaws.
This section summarizes each proposed amendment contained in our
Amended and Restated Articles of Incorporation which, together,
comprise Proposal 1. The overview of material amendments to
our Articles of Incorporation and Bylaws on pages 5 through
to 8 of this Proxy Statement applies to each proposed amendment.
The full text of each proposed amendment discussed below (as
well as minor revisions that do not require shareholder approval
under Georgia law) is highlighted in the marked version of the
Amended and Restated Articles of Incorporation attached hereto
as
Appendix A-2.
You should carefully review the discussion of the proposed
amendments which follows, the full text of the proposed
amendments in
Appendix A-2
and the information on pages 5 through to 8 of this Proxy
Statement before making a decision whether to vote in favor of
each proposal comprising Proposal 1 of this Proxy Statement.
The amendments contained in our Amended and Restated Articles of
Incorporation are divided into ten proposals, Proposal 1a
through Proposal 1j. Shareholders will vote on each of
these proposals as a separate item.
Proposal 1a:
Enlarge our business purpose
Effect. Our Articles of Incorporation
generally limit the purpose of our company to (1) engaging
in providing data processing and data transmission services,
databases and facilities for the internal operations of certain
Synovus affiliates, (2) engaging in providing data
processing and transmission services, facilities and databases
to third-parties where the data to be processed and transmitted
is of a financial, banking or economic nature, (3) engaging
in providing purchasing services to certain Synovus affiliates,
(4) the purchase, ownership and maintenance of real and
personal property in connection with the foregoing and
(5) any other lawful business or activity relating to the
foregoing. These limited purposes were originally adopted
pursuant to a regulatory requirement of the Georgia Department
of Banking and Finance upon the formation of TSYS as a
subsidiary of CB&T, a Georgia state chartered bank. The
proposed changes to the purpose clause would permit TSYS to
engage in any lawful business.
Advantages. The Board of Directors believes
the existing business purpose provision will not be appropriate
once TSYS is separated from Synovus and that it is appropriate
to provide for a broad purpose that will give TSYS the
flexibility it needs as a stand-alone public company. At
present, our Board of Directors has no specific plans, proposals
or arrangements to change the business carried on by TSYS.
Disadvantages. A broad business purpose
provides the Board of Directors with an opportunity to change
the nature of the business carried on by TSYS without having to
obtain the prior approval of our shareholders.
The Board
of Directors recommends that you vote FOR the
approval of Proposal 1a.
Proposal 1b:
Authorize shares of preferred stock
Effect. Our Articles of Incorporation
authorize 600,000,000 shares of common stock, par value
$0.10 per share, as the sole class of capital stock of TSYS. The
Amended and Restated Articles of Incorporation would also
authorize 100,000,000 shares of preferred stock. The
preferred stock may be issued by the Board of Directors in one
or more series, from time to time, with each such series to
consist of such number of shares and to have such voting powers,
full or limited, or no voting powers, and such designations,
preferences and relative, participating, optional or other
special rights, and the qualifications, limitations or
restrictions thereof, as shall be stated in the resolution or
resolutions providing for the issuance of such series adopted by
our Board of Directors.
Advantages. The Board of Directors believes
this change will provide TSYS with greater flexibility in
structuring acquisitions, joint ventures
and/or
capital raising transactions. Being able to issue preferred
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stock without shareholder approval also enables the Board of
Directors to engage in financing transactions and acquisitions
which take full advantage of changing market conditions with
little or no delay. At present, our Board of Directors has no
specific plans, proposals or arrangements to issue preferred
stock.
Disadvantages. Until the Board of Directors
authorizes the issuance and determines the rights of any series
of preferred stock, it is not possible to state the precise
disadvantages that the issuance of such series might have on the
holders of our common stock. However, potential disadvantages
could include (1) a reduction in the amount available for
the payment of dividends on our shares of common stock if
dividends on the preferred stock are cumulative and in arrears
and (2) limitations on the rights of holders of our common
stock to share in any distribution of TSYS assets upon a
liquidation of TSYS until satisfaction of any liquidation
preference granted to holders of preferred stock and other
secured creditors.
Potential Anti-Takeover Effect. If the
preferred stock amendment is approved, our Board of Directors
would be authorized to issue shares of preferred stock that
could, depending on the terms of such series, make more
difficult or discourage an attempt to obtain control of TSYS.
When, in the judgment of our Board of Directors, the action
would be in the best interests of TSYS and our shareholders,
such shares could be used to create impediments to a takeover
attempt or to discourage persons seeking to gain control of
TSYS. The authorization of shares of preferred stock, without
the actual issuance thereof, could have the effect of
discouraging hostile takeover attempts. The issuance of shares
of preferred stock could also be used to dilute the stock
ownership of a person seeking to obtain control of TSYS, should
the Board of Directors consider the action of such person not to
be in the best interests of TSYS or our shareholders.
Although there is no current intention to do so, the preferred
stock amendment could also enable TSYS to adopt a traditional
form of shareholder rights plan. Such a plan could provide
additional protection to our shareholders against a hostile
takeover attempt by encouraging potential acquirers to bring
their proposals to the Board of Directors for evaluation by,
and, if appropriate, negotiation with, the Board of Directors.
The adoption of a shareholder rights plan may make more
difficult or discourage an attempt to obtain control of TSYS.
The Board
of Directors recommends that you vote FOR the
approval of Proposal 1b.
Proposal 1c:
Provide that the Board of Directors will fix the number of
directors
Effect. Our Articles of Incorporation require
the affirmative vote of shareholders holding at least 80% of our
issued and outstanding shares of common stock to establish the
size of our Board of Directors. Our Amended and Restated
Articles of Incorporation would provide that the size of our
Board of Directors would be determined from time to time solely
by our Board of Directors.
Advantages. The Board of Directors believes
this change will enhance the protections contained in the
Articles of Incorporation, including the advantages of a
classified Board of Directors. The amended provision avoids the
possibility of a potential hostile bidder seeking to make a
hostile takeover bid for TSYS by soliciting action by our
shareholders to increase the size of the Board of Directors and
filling the vacancies with its nominees, or by acquiring or
controlling a majority of the voting stock in TSYS and then
voting against the nomination of our incumbent directors,
thereby diluting the effectiveness of the classified board
structure.
Disadvantages. A disadvantage of this change
is that shareholders may not get an opportunity to realize value
on their shares by selling them at a premium to the then-current
market price, which a potential bidder might otherwise be
prepared to offer, because of the deterrent effects of the
change on potential changes in control.
Another disadvantage is the delay that this change, when taken
together with the other anti-takeover protections in our
Articles of Incorporation, may cause to any bid for control of
TSYS, or any shareholder proposals that may have the effect of
facilitating changes in control of the Board of Directors, even
if a majority of shareholders entitled to vote believe the
changes to be in the best interests of TSYS and our
shareholders. For example, granting directors the sole
discretion to fix the size of the Board of Directors would
indirectly require a potential bidder to negotiate directly with
the Board of Directors to change its size or composition, even
if that potential bidder owns or controls a majority of the
voting shares in TSYS.
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Potential Anti-Takeover Effect. This change
has the potential anti-takeover effects as described in the
discussion of its advantages and disadvantages above.
The Board
of Directors recommends that you vote FOR the
approval of Proposal 1c.
Proposal 1d:
Provide that directors may be removed only for cause and
decrease the required shareholder vote for removal of
directors
Effect. Our Articles of Incorporation provide
that members of our Board of Directors may be removed upon the
approval of shareholders holding at least 80% of our issued and
outstanding shares of common stock. In addition, our Bylaws
provide that directors may be removed with or without cause. The
Amended and Restated Articles of Incorporation decreases the
required shareholder vote from 80% to
662/3%
and limits the basis upon which a director may be removed to
removal for cause only. The Amended and Restated Articles of
Incorporation would allow a director who is appointed by a
different voting group of shareholders (e.g., a director
appointed by holders of a series of preferred stock) to be
removed by that voting group, based on the voting rights
applicable to that voting group.
Advantages. The Board of Directors believes
this change will enhance the protections contained in the
Articles of Incorporation. It would operate to prevent a
potential bidder from circumventing the protective effect of our
classified board structure by acquiring control of a majority of
the Board of Directors through the removal power. The change
reinforces the stabilizing effect of our classified board
structure and would require a potential bidder to negotiate with
our Board of Directors to accomplish a business combination,
rather than by acquiring a significant percentage of our voting
stock and then running a proxy contest seeking to remove the
incumbent Board of Directors without cause. With this change, a
directors continued service will not be affected by his or
her position with respect to a dominant shareholder.
Disadvantages. Eliminating our
shareholders right to remove directors without cause will
make the removal of any director more difficult, even if such
removal is believed by the requisite majority of shareholders
entitled to vote to be in the best interests of TSYS and our
shareholders. Without the ability to remove a director without
cause, our shareholders must either (1) act to remove the
director for cause or (2) wait until the director has
served his or her term and becomes a candidate for reelection,
which occurs every three years.
Potential Anti-Takeover Effect. This change
has the effect of precluding the removal of a director by a
hostile bidder of TSYS, unless removal for cause is warranted. A
typical method of acquiring control of a company is for a
hostile bidder to acquire a majority of the companys
voting shares (whether through a tender offer or on the open
market) and use its voting power to remove the incumbent
directors and replace them with nominees of the bidder.
Eliminating the power of shareholders to remove a director
without cause defeats this strategy and encourages potential
hostile bidders to seek the cooperation of our Board of
Directors for any proposed business combination.
The Board
of Directors recommends that you vote FOR the
approval of Proposal 1d.
Proposal 1e:
Eliminate supermajority voting requirements for shareholder
approval of mergers and similar transactions
Effect. Our Articles of Incorporation require
the approval of shareholders holding at least 80% of the issued
and outstanding shares of our common stock for (1) the
approval of any merger or consolidation of our company with or
into any other corporation and (2) the sale, lease,
exchange or other disposition of all or substantially all of our
assets. Under our Amended and Restated Articles of
Incorporation, this supermajority voting requirement would be
eliminated and the required shareholder vote would be determined
under applicable Georgia law.
Advantages. This change removes the
veto power that would otherwise apply to a
significant shareholder or a group of significant shareholders
with respect to the approval of mergers and similar transactions
affecting all or substantially all of TSYS assets. A lower
shareholder approval threshold can also increase a
shareholders ability to effectively participate in
corporate governance.
At present, our Board of Directors has no specific plans,
proposals or arrangements for any merger or similar transaction.
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Disadvantages. The Board of Directors does not
believe this change has any disadvantages.
The Board
of Directors recommends that you vote FOR the
approval of Proposal 1e.
Proposal 1f:
Eliminate supermajority voting requirements for shareholder
approval for most amendments to the Articles of
Incorporation
Effect. Our Articles of Incorporation require
the approval of shareholders holding at least 80% of the issued
and outstanding shares of our common stock for any amendment to
our Articles of Incorporation. Under our Amended and Restated
Articles of Incorporation, this supermajority voting requirement
would be eliminated and the required shareholder vote would be
determined under applicable Georgia law. Generally, Georgia law
requires amendments to the Articles of Incorporation to be
approved by shareholders holding a majority of the issued and
outstanding shares of common stock. An exception exists under
Georgia law for provisions requiring a greater shareholder vote,
such as the proposed amendment requiring a vote of at least
662/3%
of shares for removal of a director, which require such greater
shareholder vote to be amended.
Advantages. As with the change in
Proposal 1e, this change removes the veto power
that would otherwise apply to a significant shareholder or a
group of significant shareholders with respect to the approval
of most amendments to the Articles of Incorporation. As
mentioned in Proposal 1e, a lower shareholder approval
threshold can also increase a shareholders ability to
effectively participate in corporate governance.
Disadvantages. The Board of Directors does not
believe this change has any disadvantages.
The Board
of Directors recommends that you vote FOR the
approval of Proposal 1f.
Proposal 1g:
Eliminate supermajority requirements for shareholders to call a
special meeting of shareholders
Effect. Our Articles of Incorporation require
80% of the issued and outstanding shares of our common stock to
take action to call a special meeting of shareholders. Under our
Amended and Restated Articles of Incorporation, this
supermajority requirement would be eliminated and shareholders
holding a majority of the total number of votes entitled to be
cast on any issue proposed to be considered at the special
meeting would be required to call a special meeting, or a
special meeting could be called by the Board of Directors.
Advantages. As with the change in
Proposal 1e, this change removes the veto power
that would otherwise apply to a significant shareholder or a
group of significant shareholders with respect to calling
special meetings of shareholders. As mentioned in
Proposal 1e, a lower shareholder approval threshold can
also increase a shareholders ability to effectively
participate in corporate governance.
Disadvantages. The Board of Directors does not
believe this change has any disadvantages.
The Board
of Directors recommends that you vote FOR the
approval of Proposal 1g.
Proposal 1h:
Eliminate the provision requiring unanimous shareholder action
by written consent
Effect. Our Articles of Incorporation permit
shareholders to take action without a meeting only if the
written consent of each shareholder entitled to vote on the
action is obtained. Under our Amended and Restated Articles of
Incorporation, this provision would be eliminated. However, the
default rule contained in the GBCC, which has the same
requirement for shareholder actions taken without a meeting,
will continue to apply.
Advantages. This change has no net effect
because an equivalent provision in the GBCC will apply to our
shareholders in the absence of the provision in our Articles of
Incorporation. Since TSYS is a publicly traded company,
complying with the GBCC requirement would be an impractical
means to carry out any shareholder action without a meeting.
This provision encourages a potential hostile bidder to seek the
cooperation of the Board of Directors for any business
combination.
Disadvantages. The operation of the equivalent
GBCC provision as a takeover defense has the general
disadvantage that shareholders may not get an opportunity to
realize value on their shares by selling them at a premium to
the then-current market price, which a potential bidder might
otherwise be
12
prepared to offer, because of the deterrent effects of the
operation of the GBCC provision (when taken together with the
other anti-takeover protections in the Articles of
Incorporation) on potential changes in control.
Potential Anti-Takeover Effect. This change
has no net effect. The operation of the statutory provision has
the potential anti-takeover effects as described in the
discussion of its advantages and disadvantages above.
The Board of Directors recommends that you vote
FOR the approval of Proposal 1h.
Proposal 1i:
Update the provision allowing the Board of Directors to consider
non-economic impacts of tender offers to conform to current
Georgia law so that the Board of Directors may consider the
interests of constituencies in addition to shareholders when
considering the best interests of the corporation
Effect. The GBCC permits a Georgia corporation
to include in its Articles of Incorporation a provision
permitting its directors, in discharging their respective duties
and determining what is in the best interests of the
corporation, to consider the interests of employees, customers,
suppliers and creditors of the corporation and its subsidiaries,
the communities in which offices or other establishments of the
corporation or its subsidiaries are located, and all other
factors such directors consider pertinent. Our Articles of
Incorporation generally permit our Board of Directors to take
these considerations into account in connection with a tender
offer or other offer for our securities. However, the Amended
and Restated Articles of Incorporation would be updated to
conform to the GBCC, including by being applicable to all Board
decision making and not only in the context of tender offers.
Advantages. This change allows our Board of
Directors to consider, if and to the extent it determines
appropriate, the interests of stakeholders other than our
shareholders in determining what is in the best interests of the
corporation.
Disadvantages. The Board of Directors does not
believe this change has any disadvantages.
The Board of Directors recommends that you vote
FOR the approval of Proposal 1i.
Proposal
1j: Update the provision limiting the personal liability of
directors to conform to current Georgia law
Effect. The GBCC permits a Georgia corporation
to include in its Articles of Incorporation a provision
eliminating the liability of a director to the corporation or
its shareholders for monetary damages for any action taken, or
any failure to take any action, as a director, except liability
(1) for any appropriation, in violation of the directors
duties, of any business opportunity of the corporation; (2) for
actions or omissions which involve intentional misconduct or a
knowing violation of law; (3) for unlawful distributions; and
(4) for any transaction from which the director received an
improper personal benefit. The Amended and Restated Articles of
Incorporation conform our existing exculpation provision to
align with the GBCC.
Advantages. The Board of Directors believes
that this change is consistent with current practice of public
companies, will encourage talented individuals to join and
remain on the Board for the duration of their tenure, and
reflects good corporate governance.
Disadvantages. The Board of Directors does not
believe this change has any disadvantages.
The Board of Directors recommends that you vote
FOR the approval of Proposal 1j.
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PROPOSAL 2:
APPROVAL OF AMENDMENTS CONTAINED
IN THE AMENDED AND RESTATED BYLAWS
Summary
As described above, in connection with the proposed spin-off,
the Board of Directors, together with the Corporate Governance
and Nominating Committee and the Special Committee formed to
consider the spin-off, undertook a review of our Bylaws.
Amendments
to our Bylaws not requiring shareholder approval
The Board of Directors has adopted certain amendments to our
Bylaws, subject to completion of the spin-off. These changes do
not require shareholder approval and address, among others, the
following topics:
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Advance notice requirements for shareholders to bring
business before a meeting of shareholders or to nominate a
candidate for director. The amendments require
that to be timely, a shareholder notice of business for a
shareholder meeting or nomination must be delivered to TSYS not
less than 90 days nor more than 120 days prior to the
anniversary date of the last annual meeting (or, in the case of
a special meeting called for the purpose of electing directors,
not later than the 10th day following the earlier of the
date notice of the meeting was mailed or the date public
disclosure of the date of the special meeting was made). In
addition, the notice must contain certain information regarding
the shareholder and, if applicable, the nominee for director;
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Shareholder meeting mechanics, including inspectors of
election. The amendments require that notice of
meetings must be not less than 10 days nor more than
60 days prior to the meeting (conforming to the GBCC);
provide that the chairman announces the opening and closing of
the polls; and provides for an inspector of elections at
shareholder meetings;
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Shareholder action by unanimous written
consent. The provision allowing shareholder
action without a meeting only if the unanimous written consent
of shareholders entitled to vote on the matter is obtained is
eliminated, since the provision duplicates the default rule
under the GBCC, which will continue to apply to our shareholders;
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Board vacancies. The amendments establish that
the Board of Directors (or the remaining directors if less than
a quorum) has the power, as do the shareholders, to fill
vacancies on the Board;
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Emeritus and Advisory Directors. The
amendments impose explicit confidentiality obligations on the
members of these boards; eliminate the right of a director to
request an immediate appointment to the Emeritus Board of
Directors upon reaching the age of 62 and having served 5
consecutive years as a member of the Board of Directors; and
provide that the Chairman will determine the compensation
payable to Advisory Directors (which is currently the case for
Emeritus Directors);
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Shareholder inspection of records. As
permitted by the GBCC, the Amended and Restated Bylaws limit to
shareholders holding 2% or more of the corporations
outstanding shares the right to inspect records of the actions
of the Board of Directors, committees thereof and shareholders;
accounting records; and the record of the shareholders;
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Indemnification of directors and officers. The
Amended and Restated Bylaws clarify the existing bylaw
provisions on indemnification so that indemnification will be
provided to directors and officers to the fullest extent
permitted under the GBCC, and if the GBCC is amended to permit a
Georgia corporation to provide greater rights of indemnification
to such persons, then the Bylaws will be deemed to be amended to
require TSYS to provide such greater rights of indemnification;
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Alternative stakeholders. The existing
provision allowing the Board of Directors to consider
non-economic impacts of tender offers is amended to conform to
current Georgia law so that the Board of Directors may consider
the interests of constituencies in addition to shareholders when
considering the best interests of the corporation; and
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Opting into the Georgia Business Combination
Statute. TSYS elects to be governed by the
business combination provisions of the GBCC, thereby preventing
interested shareholders (persons acquiring more than 10% of the
voting shares in TSYS without approval from our Board of
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Directors) from engaging in any business combination with TSYS
for a period of five years, subject to certain exceptions. This
change has the potential anti-takeover effects described in the
Introduction to Proposals 1 and 2 of this Proxy Statement.
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The full text of these amendments are highlighted in the marked
version of the Bylaws attached hereto as
Appendix B-2.
Amendments
to our Bylaws requiring shareholder approval
This section summarizes each proposed amendment contained in our
Amended and Restated Bylaws that requires shareholder approval
and which, together, comprise Proposal 2. The overview of
material amendments to our Articles of Incorporation and Bylaws
on pages 5 through to 8 of this Proxy Statement applies to each
proposed amendment.
The full text of each proposed amendment discussed below is
highlighted in the marked version of the Bylaws attached hereto
as
Appendix C-2.
You should carefully review the discussion of the proposed
amendments which follows, the full text of the proposed
amendments in
Appendix C-2
and the information on pages 5 through to 8 of this Proxy
Statement before making a decision whether to vote in favor of
each proposal comprising Proposal 2 of this Proxy Statement.
The amendments contained in our Amended and Restated Bylaws
which require shareholder approval are divided into five
proposals, Proposal 2a through Proposal 2e.
Shareholders will vote on each of these proposals as a separate
item.
Proposal 2a:
Eliminate supermajority requirements for shareholders to call a
special meeting of shareholders
Effect. As proposed for our Articles of
Incorporation, we propose eliminating the requirement that 80%
of the issued and outstanding shares of common stock must take
action to call a special meeting of shareholders. Under our
Amended and Restated Bylaws, shareholders holding a majority of
the total number of votes entitled to be cast on any issue
proposed to be considered at the special meeting would be
required to call a special meeting, or a special meeting could
be called by the Board of Directors. In addition, the related
provision requiring that any amendment to the 80% requirement be
approved by at least 80% of the issued and outstanding shares of
common stock would also be eliminated.
Advantages and Disadvantages. The discussion
of the advantages and disadvantages of Proposal 1g in this
Proxy Statement applies to this proposed amendment of our
Bylaws. You should carefully review the discussion of
Proposal 1g, as well as the overview of material amendments
contained in the Introduction to Proposal 1 and 2 of this
Proxy Statement, before making a decision whether to vote in
favor of Proposal 2a.
The Board
of Directors recommends that you vote FOR the
approval of Proposal 2a.
Proposal 2b:
Eliminate the shareholders ability to fix the number of
directors
Effect. The Amended and Restated Bylaws
eliminate the existing requirement that the size of our Board of
Directors be fixed by shareholders holding at least 80% of the
issued and outstanding shares of common stock in order to
conform to the proposed amendment to the Amended and Restated
Articles of Incorporation providing that the size of our Board
of Directors would be determined from time to time solely by our
Board of Directors. In addition, the related provision requiring
that any amendment to this 80% requirement be approved by at
least 80% of the issued and outstanding shares of common stock
would also be eliminated.
Advantages, Disadvantages and Potential Anti-Takeover
Effect. The discussion of the advantages,
disadvantages and potential anti-takeover effects of
Proposal 1c in this Proxy Statement applies to this
proposed amendment of our Bylaws. You should carefully review
the discussion of Proposal 1c, as well as the overview of
material amendments contained in the Introduction to
Proposal 1 and 2 of this Proxy Statement, before making a
decision whether to vote in favor of Proposal 2b.
The Board of Directors recommends that you vote
FOR the approval of Proposal 2b.
15
Proposal 2c:
Eliminate the supermajority voting requirement to declassify the
Board of Directors
Effect. The Amended and Restated Bylaws
eliminate the existing requirement that shareholders holding at
least 80% of the issued and outstanding shares of common stock
must vote to declassify the Board of Directors. As a result, any
future amendment to the Amended and Restated Articles of
Incorporation to declassify the Board of Directors will require
only a majority shareholder vote, although such an amendment
would first require approval by the Board of Directors.
Advantages. This change removes the
veto power that would otherwise apply to a
significant shareholder or a group of significant shareholders
with respect to a shareholder vote on an amendment to the
Articles of Incorporation to declassify the Board of Directors.
This lower shareholder approval threshold can increase a
shareholders ability to effectively participate in
corporate governance.
Disadvantages. The Board of Directors does not
believe this change has any disadvantages.
The Board
of Directors recommends that you vote FOR the
approval of Proposal 2c.
Proposal 2d:
Provide that directors may be removed only for cause and
decrease the required shareholder vote for removal of
directors
Effect. The Amended and Restated Bylaws
provide for removal of directors by shareholders only for cause
and require the affirmative vote of shareholders holding
662/3%
of the outstanding shares of common stock of the corporation
(and provide that a director who is appointed by a different
voting group of shareholders may be removed only by that voting
group) rather than the current Bylaws which allow removal with
or without cause and require an 80% shareholder vote for
removal. In addition, the related provision requiring that any
amendment to this 80% requirement be approved by at least 80% of
the issued and outstanding shares of common stock would also be
eliminated.
Advantages, Disadvantages and Potential Anti-Takeover
Effect. The discussion of the advantages,
disadvantages and potential anti-takeover effects of
Proposal 1d in this Proxy Statement applies to this
proposed amendment of our Bylaws. You should carefully review
the discussion of Proposal 1d, as well as the overview of
material amendments contained in the Introduction to
Proposal 1 and 2 of this Proxy Statement, before making a
decision whether to vote in favor of Proposal 2d.
The Board
of Directors recommends that you vote FOR the
approval of Proposal 2d.
Proposal 2e:
Eliminate supermajority voting requirements for shareholder
approval of mergers and similar transactions
Effect. Our existing Bylaws require the
approval of shareholders holding at least 80% of the issued and
outstanding shares of our common stock for (1) the approval
of any merger or consolidation of our company with or into any
other corporation and (2) the sale, lease, exchange or
other disposition of all or substantially all of our assets.
Under our Amended and Restated Bylaws, this supermajority voting
requirement would be eliminated and the required shareholder
vote would be determined under applicable Georgia law. In
addition, the related provision requiring that any amendment to
this 80% requirement be approved by at least 80% of the issued
and outstanding shares of common stock would also be eliminated.
Advantages and Disadvantages. The discussion
of the advantages and disadvantages of Proposal 1e in this
Proxy Statement applies to this proposed amendment of our
Bylaws. You should carefully review the discussion of
Proposal 1e, as well as the overview of material amendments
contained in the Introduction to Proposal 1 and 2 of this
Proxy Statement, before making a decision whether to vote in
favor of Proposal 2e.
The Board
of Directors recommends that you vote FOR the
approval of Proposal 2e.
16
PROPOSAL 3:
APPROVAL OF THE TOTAL SYSTEM SERVICES, INC.
2008 OMNIBUS PLAN
Upon the recommendation of the Compensation Committee of TSYS,
on October 24, 2007, the Board of Directors adopted the Total
System Services, Inc. 2008 Omnibus Plan (the TSYS 2008
Plan), subject to shareholder approval and further subject
to completion of the spin-off. The purpose of the TSYS 2008 Plan
is 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 the TSYS 2008 Plan are designed to motivate employees and
directors to devote their best interests 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 after the
spin-off. Compensation paid pursuant to the TSYS 2008 Plan is
intended, to the extent reasonable, to qualify for tax
deductibility under Section 162(m)
(Section 162(m)) and Section 409A of the
Internal Revenue Code of 1986, as amended, and the regulations
promulgated thereunder, as they may be amended from time to time.
The following is a brief description of the principal features
of the TSYS 2008 Plan. It does not purport to be complete and is
qualified in its entirety by the full text of the TSYS 2008
Plan, which is attached hereto as Appendix D.
Eligibility
and Participation
Any employee of TSYS and its subsidiaries and any non-employee
director of TSYS is eligible to participate in the TSYS 2008
Plan. Incentive stock options, however, may be granted only to
employees. The Compensation Committee of the Board of Directors
of TSYS (the Committee) has discretion to select
participants from year to year.
Shares
Subject to the Plan
The aggregate number of shares of TSYS common stock which may be
granted to participants pursuant to awards granted under the
TSYS 2008 Plan may not exceed seventeen million
(17,000,000) shares. All of the shares are available for grant
in the form of incentive stock options. No more than
850,000 shares may be made subject to awards (other than
stock options or stock appreciation rights or awards that are
not settled in shares) where service-based vesting is any more
rapid than annual pro rata vesting over a three-year period or
where performance-based vesting is for a performance period of
less than twelve months.
Shares covered by an award shall only be counted as used to the
extent they are actually issued. 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
Committees permission, prior to the issuance of shares,
for awards not involving shares, shall be available again for
grant under the TSYS 2008 Plan. However, the full number of
stock appreciation rights granted that are to be settled by the
issuance of shares shall be counted against the number of shares
available for award under the TSYS 2008 Plan, regardless of the
number of shares actually issued upon settlement of such stock
appreciation rights. Further, any shares withheld to satisfy tax
withholding obligations on awards issued under the TSYS 2008
Plan, shares tendered to pay the exercise price of awards under
the TSYS 2008 Plan, and shares repurchased on the open market
with the proceeds of a stock option exercise will no longer be
eligible to be returned as available shares under the TSYS 2008
Plan. 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 Committees permission, prior to
the issuance of shares, for awards not involving shares, shall
be available again for grant under the TSYS 2008 Plan. The
shares available for issuance under the TSYS 2008 Plan may be
authorized and unissued Shares or treasury Shares.
Awards
Under the TSYS 2008 Plan
Pursuant to the TSYS 2008 Plan, TSYS may grant the following
types of awards subject to the following conditions:
Nonqualified and Incentive Stock Options. All
stock options must have a maximum life of no more than ten years
from the date of grant. At the time of grant, the Committee will
determine the
17
exercise price for any stock options. In no event, however, may
the exercise price be less than 100% of the fair market value of
TSYS common stock at the time of grant. At the time of
exercise, payment in full of the exercise price will be paid in
cash, shares of common stock valued at their fair market value
on the date of exercise, a combination thereof, or by such other
method as the Committee may determine.
Stock Appreciation Rights. Stock appreciation
rights offer participants the right to receive payment for the
difference (spread) between the exercise price of the stock
appreciation right and the market value of TSYS common
stock at the time of redemption. The Committee may authorize
payment of the spread for a stock appreciation right in the form
of cash, common stock to be valued at its fair market value on
the date of exercise, a combination thereof, or by such other
method as the Committee may determine.
Restricted Stock and Restricted Stock
Units. The Committee may award common stock to a
participant as a portion of the participants remuneration.
In doing so, the Committee, in its discretion, may impose
conditions or restrictions on the award of common stock. The
Committee may also award restricted stock units which are
similar to restricted stock except that no shares are actually
awarded on the date of grant.
Performance Units or Performance
Shares. Section 162(m) generally limits to
$1,000,000 the amount that a publicly held corporation may
deduct for the compensation paid to its Chief Executive Officer
and its four most highly compensated officers other than the
Chief Executive Officer. Qualified performance-based
compensation, however, is not subject to the $1,000,000
deduction limit. Accordingly, the TSYS 2008 Plan permits the
Committee to establish performance goals consistent with
Section 162(m) and authorizes the granting of cash, stock
options, stock appreciation rights, common stock, other
property, or any combination thereof to employees upon
achievement of such established performance goals. In setting
the performance goals, the Committee may use such measures as
net earnings or net income (before or after taxes); earnings per
share; net sales or revenue growth; net operating profit; return
measures (including, but not limited to, return on assets,
capital, invested capital, equity, sales, or revenue); cash flow
(including, but not limited to, operating cash flow, free cash
flow, cash generation, cash flow return on equity, and cash flow
return on investment); earnings before or after taxes, interest,
depreciation,
and/or
amortization; gross or operating margins; productivity ratios;
share price (including, but not limited to, growth measures and
total shareholder return); expense targets; margins; operating
efficiency; market share; customer satisfaction; unit volume;
working capital targets and change in working capital; economic
value added (net operating profit after tax minus the sum of
capital multiplied by the cost of capital); asset growth; number
of cardholder, merchant or other customer accounts processed or
converted; and successful negotiation or renewal of contracts
with new or existing customers. The performance goals may relate
to the individual participant, to TSYS as a whole, or to a
subsidiary, division, department, region, function or business
unit of TSYS in which the participant is employed. Performance
may also be measured relative to the performance of a group of
comparator companies or any published or special index that the
Committee, in its sole discretion, deems appropriate (including
measurement versus various stock market indices). Performance
awards may be granted either alone or in addition to other
grants made under the TSYS 2008 Plan.
Cash-Based Awards. The Committee may grant
cash-based awards to participants as determined by the
Committee. Payment of the cash-based awards may be made in
either cash or common stock.
Other Stock-Based Awards. The Committee may
grant other types of equity-based or equity-related awards.
These awards may be paid in either common stock or cash.
Award grants under the TSYS 2008 Plan will be made in the
discretion of the Committee and, accordingly, are not yet
determinable. In addition, benefits under the TSYS 2008 Plan
will depend on a number of factors, including the fair market
value of our shares on future dates and the exercise decisions
made by the participants. Consequently, it is not possible to
determine the benefits that might be received by participants
under the TSYS 2008 Plan. As of October 19, 2007, the
closing price of our common stock on the New York Stock Exchange
was $27.77 per share.
18
Maximum
Amount Payable to Any Participant
The annual award limits of the TSYS 2008 Plan include the
following:
Options. The maximum aggregate number of
shares subject to options granted in any one plan year to any
one participant is 4,000,000 shares.
Stock Appreciation Rights. The maximum number
of shares subject to stock appreciation rights granted in any
one plan year to any one participant is 4,000,000 shares.
Restricted Stock or Restricted Stock
Units. The maximum aggregate grant with respect
to awards of restricted stock or restricted stock units in any
one plan year to any one participant is 2,000,000 shares.
Performance Units or Performance Shares. The
maximum aggregate award of performance units or performance
shares that a participant may receive in any one plan year is
2,000,000 shares if the award is payable in shares, or
equal to the value of 100,000 shares if the award is
payable in cash or property other than shares, determined as of
the earlier of the vesting or the payout date, as applicable.
Cash-Based Awards. The maximum aggregate
amount awarded or credited with respect to cash-based awards to
any one participant in any one plan year may not exceed
$2,000,000.
Other Stock-Based Awards. The maximum
aggregate grant with respect to other stock-based awards in any
one plan year to any one participant is 2,000,000 shares.
In addition, the maximum number of shares that may be issued to
nonemployee directors is 2,000,000 shares, and no
nonemployee director may be granted an award covering more than
10,000 shares in any year, except that this annual limit on
nonemployee director awards is increased to 50,000 shares
for any nonemployee director serving as Chairman of the Board of
the Board of Directors; provided, however, that in the year in
which an individual is first appointed or elected to the Board
as a nonemployee director, such individual may be granted an
award covering up to an additional 50,000 shares.
Adjustments
in Connection with Certain Events
The Committee, in order to prevent dilution or enlargement of a
participants rights under the TSYS 2008 Plan, shall
substitute or adjust the number and kind of shares that may be
issued under the TSYS 2008 Plan or under particular forms of
awards, the number and kind of shares subject to outstanding
awards, the option price or grant price applicable to
outstanding awards, the annual award limits, and other value
determinations applicable to outstanding awards in the event of
any corporate event or transaction such as a merger,
consolidation, reorganization, recapitalization, separation,
partial or complete liquidation, stock dividend, stock split,
reverse stock split, split up, spin-off, or other distribution
of stock or property of TSYS, combination of shares, exchange of
shares, dividend in-kind, or other like change in capital
structure, number of outstanding shares or distribution (other
than normal cash dividends) to shareholders of TSYS, or any
similar corporate event or transaction.
Duration
of the TSYS 2008 Plan
The TSYS 2008 Plan will become effective, subject to approval by
TSYS shareholders, upon the effectiveness of the spin-off.
The TSYS 2008 Plan will terminate after 10 years or, if
sooner, when all shares reserved under the TSYS 2008 Plan have
been issued. At any time, the Board of Directors may terminate
the TSYS 2008 Plan. The termination of the TSYS 2008 Plan will
not affect outstanding awards in any way.
Administration
The TSYS 2008 Plan will be administered by the Compensation
Committee of the Board of Directors. Members of the Committee
are appointed by the Board of Directors from among its members
and may be removed by the Board of Directors in its discretion.
The Committee has broad discretion to construe, interpret and
administer the TSYS 2008 Plan, to select the individuals to be
granted Plan awards, to determine the number of shares to be
subject to each Plan award, and to determine the terms,
conditions and duration of each award. The Committees
decisions will be conclusive, final and binding upon all
parties. No member of the Committee will be liable for any
action or determination made with respect to the TSYS 2008 Plan
or any award granted under the TSYS 2008 Plan. To the fullest
extent permitted by law, TSYS will indemnify the members of the
19
Committee against reasonable expenses incurred in connection
with any action taken against them with respect to the TSYS 2008
Plan or any award granted under the Plan.
Amendment
of the TSYS 2008 Plan
The Committee may amend, modify, suspend or terminate the TSYS
2008 Plan at any time except that no amendment, modification,
suspension or termination may adversely affect an existing award
under the TSYS 2008 Plan without the affected participants
consent. In addition, no amendment, modification, suspension or
termination shall be made which would reprice, replace or
regrant through cancellation, or which would lower the option
price of a previously granted option or the grant price of a
previously granted stock appreciation right without the approval
of shareholders. Moreover, under New York Stock Exchange listing
standards the TSYS 2008 Plan cannot be materially amended
without the approval of shareholders.
Change
in Control
Unless otherwise determined by the Committee at grant, in the
event of a change in control of TSYS, as defined in the TSYS
2008 Plan, the vesting of any outstanding awards granted under
the TSYS 2008 Plan will be accelerated and all such awards will
be fully exercisable.
Federal
Tax Consequences of the TSYS 2008 Plan
The following discussion of the federal income tax consequences
of awards granted under the TSYS 2008 Plan is intended only as a
summary of the present federal income tax treatment of awards.
These laws are highly technical and are subject to change at any
time. This summary does not discuss the tax consequences of a
participants death, or the provisions of the income tax
laws of any municipality, state or foreign country in which a
participant may reside.
Nonqualified Stock Options. Nonqualified stock
options granted under the TSYS 2008 Plan will not be taxable to
a participant at grant but generally will result in taxation at
exercise, at which time the participant will recognize ordinary
income in an amount equal to the difference between the
options exercise price and the fair market value of the
shares on the exercise date. TSYS will be entitled to deduct a
corresponding amount as a business expense in the year the
participant recognizes this income.
Incentive Stock Options. An employee will
generally not recognize ordinary income on receipt or exercise
of an incentive stock option so long as he or she has been an
employee of TSYS or its subsidiaries from the date the incentive
stock option was granted until three months before the date of
exercise; however, the amount by which the fair market value of
the shares on the exercise date exceeds the exercise price is an
adjustment in computing the employees alternative minimum
tax in the year of exercise. If the employee holds the shares of
common stock received on exercise of the incentive stock option
for one year after the date of exercise (and for two years from
the date of grant of the incentive stock option), any difference
between the amount realized upon the disposition of the shares
and the amount paid for the shares will be treated as long-term
capital gain (or loss, if applicable) to the employee. If the
employee exercises an incentive stock option and satisfies these
holding period requirements, TSYS may not deduct any amount in
connection with the incentive stock option. If an employee
exercises an incentive stock option but engages in a
disqualifying disposition by selling the shares
acquired on exercise before the expiration of the one and
two-year holding periods described above, the employee generally
will recognize ordinary income (for regular income tax purposes
only) in the year of the disqualifying disposition equal to the
excess, if any, of the fair market value of the shares on the
date of exercise over the exercise price; and any excess of the
amount realized on the disposition over the fair market value on
the date of exercise will be taxed as long- or short-term
capital gain (as applicable). If, however, the fair market value
of the shares on the date of disqualifying disposition is less
than on the date of exercise, the employee will recognize
ordinary income equal only to the difference between the amount
realized on the disqualifying disposition and the exercise
price. In either event, TSYS will be entitled to deduct an
amount equal to the amount constituting ordinary income to the
employee in the year of the disqualifying disposition.
Stock Appreciation Rights. To the extent that
the requirements of the Internal Revenue Code of 1986 are met,
there are no immediate tax consequences to a participant when a
stock appreciation right is granted. When a participant
exercises the right to the appreciation in fair market value of
shares represented by a stock appreciation right, payments made
in common stock are normally includable in the
20
participants gross income for regular income tax purposes.
TSYS will be entitled to deduct the same amount as a business
expense in the same year. The includable amount and
corresponding deduction each equal the fair market value of the
common stock payable on the date of exercise.
Restricted Stock. The recognition of income
from an award of restricted stock for federal income tax
purposes depends on the restrictions imposed on the shares.
Generally, taxation will be deferred until the first taxable
year the shares are no longer subject to substantial risk of
forfeiture. At the time the restrictions lapse, the participant
will recognize ordinary income equal to the then fair market
value of the stock. The participant may, however, make an
election to include the value of the shares in gross income in
the year of award despite such restrictions. Generally, TSYS
will be entitled to deduct the fair market value of the shares
transferred to the participant as a business expense in the year
the participant includes the compensation in income.
Restricted Stock Units. Generally, a
participant will not recognize ordinary income until common
stock, cash, or other property become payable under the
restricted stock unit, even if the award vests in an earlier
year. TSYS will generally be entitled to deduct the amount the
participant includes in income as a business expense in the year
of payment.
Performance Units/ Performance Shares. As
stated above, the performance units and performance shares
awarded under the TSYS 2008 Plan are intended to be
qualified performance-based compensation under
Section 162(m) and, therefore, deductible by TSYS when the
employee recognizes ordinary income. Employees under the TSYS
2008 Plan incur no income tax liability upon the initial grant
of performance units or performance shares. At the end of the
performance or measurement period, however, employees realize
ordinary income on any amounts received in cash or common stock.
Any subsequent appreciation on the common stock is treated as a
capital gain.
Cash-Based Awards/Other Stock-Based
Awards. Any cash payments or the fair market
value of any common stock or other property a participant
receives in connection with cash-based awards or other
stock-based awards are includable in income in the year received
or made available to the participant without substantial
limitations or restrictions. Generally, TSYS will be entitled to
deduct the amount the participant includes in income as a
business expense in the year of payment.
Deferred Compensation. All awards under the
TSYS 2008 Plan must satisfy the requirements of
Section 409A of the Internal Revenue Code of 1986 to avoid
adverse tax consequences to participants.
Additional
Information
In the event the TSYS 2008 Plan is terminated, participants
under the TSYS 2008 Plan will retain all rights to their awards
in accordance with the terms of the awards.
In the event of a termination of service by a participant, the
Committee will determine the length of time that the participant
has to exercise a stock option or stock appreciation right and
the extent to which the participant can retain the rights to
restricted stock, restricted stock units, performance units,
performance shares, cash-based awards, and other stock-based
awards.
The Committee may provide for the payment of dividends on shares
of common stock granted in connection with awards or dividend
equivalents with respect to any shares of common stock subject
to an award that have not actually been issued under the award.
The Board of Directors recommends that you vote
FOR the approval of the
Total System Services, Inc. 2008 Omnibus Plan.
21
EQUITY
COMPENSATION PLAN INFORMATION
The table below provides information as of December 31,
2006 concerning the shares of TSYS stock that may be issued
under existing equity compensation plans of TSYS.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a)
|
|
|
(b)
|
|
|
(c)
|
|
|
|
Number of
|
|
|
Weighted-
|
|
|
Number of Securities
|
|
|
|
Securities to be
|
|
|
Average Exercise
|
|
|
Remaining Available for
|
|
|
|
Issued Upon
|
|
|
Price of
|
|
|
Future Issuance Under
|
|
|
|
Exercise of
|
|
|
Outstanding
|
|
|
Equity Compensation
|
|
|
|
Outstanding
|
|
|
Options,
|
|
|
Plans (Excluding
|
|
|
|
Options, Warrants
|
|
|
Warrants and
|
|
|
Securities Reflected in
|
|
Plan Category
|
|
and Rights
|
|
|
Rights
|
|
|
Column (a))
|
|
|
Equity compensation plans approved by security holders
|
|
|
1,027,821
|
(1)
|
|
$
|
15.42
|
|
|
|
8,269,262
|
(2)
|
Equity compensation plans not approved by security
holders(3)
|
|
|
37,500
|
|
|
|
18.50
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
1,065,321
|
|
|
$
|
15.53
|
|
|
|
8,269,262
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
Does not include an aggregate of
589,219 shares of restricted stock which will vest over the
remaining years through 2011.
|
|
(2)
|
|
Includes 8,269,262 shares
available for future grants under TSYS 2002 Long-Term
Incentive Plan.
|
|
(3)
|
|
This plan was adopted by TSYS
Board of Directors on January 10, 1997 to attract a
desirable individual as director of TSYS (which individual no
long serves as a director) and is limited to one individual
option granted to purchase 37,500 shares of TSYS stock at
fair market value on the date of grant with one-third of such
options becoming exercisable one, two and three years,
respectively, following the date of grant.
|
22
STOCK
OWNERSHIP OF DIRECTORS
AND EXECUTIVE OFFICERS
TSYS
Stock Ownership
The following table sets forth ownership of shares of TSYS stock
by each director, each executive officer named in the Summary
Compensation Table and all directors and executive officers as a
group as of September 30, 2007.
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares of TSYS
|
|
|
Shares of TSYS
|
|
|
Shares of TSYS
|
|
|
|
|
|
|
|
|
|
Stock
|
|
|
Stock
|
|
|
Stock
|
|
|
|
|
|
Percentage of
|
|
|
|
Beneficially
|
|
|
Beneficially
|
|
|
Beneficially
|
|
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Total
|
|
|
Outstanding
|
|
|
|
Owned with
|
|
|
Owned with
|
|
|
Owned with
|
|
|
Shares of
|
|
|
Shares of
|
|
|
|
Sole Voting
|
|
|
Shared Voting
|
|
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Sole Voting and
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|
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TSYS Stock
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|
|
TSYS Stock
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|
|
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and Investment
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|
|
and Investment
|
|
|
No investment
|
|
|
Beneficially
|
|
|
Beneficially
|
|
|
|
Power as of
|
|
|
Power as of
|
|
|
Power as of
|
|
|
Owned as of
|
|
|
Owned as of
|
|
Name
|
|
9/30/07
|
|
|
9/30/07
|
|
|
9/30/07
|
|
|
9/30/07(1)
|
|
|
9/30/07
|
|
|
Richard E. Anthony
|
|
|
2,002
|
|
|
|
|
|
|
|
|
|
|
|
2,002
|
|
|
|
*
|
|
James H. Blanchard
|
|
|
666,539
|
|
|
|
360,480
|
|
|
|
500
|
|
|
|
1,027,519
|
|
|
|
1
|
|
Richard Y. Bradley
|
|
|
24,917
|
|
|
|
5,000
|
|
|
|
1,500
|
|
|
|
31,417
|
|
|
|
*
|
|
Kriss Cloninger III
|
|
|
2,861
|
|
|
|
|
|
|
|
1,500
|
|
|
|
4,361
|
|
|
|
*
|
|
G. Wayne Clough
|
|
|
4,743
|
|
|
|
|
|
|
|
1,500
|
|
|
|
6,243
|
|
|
|
*
|
|
Walter W. Driver, Jr.
|
|
|
4,270
|
|
|
|
|
|
|
|
1,500
|
|
|
|
5,770
|
|
|
|
*
|
|
Gardiner W. Garrard, Jr.
|
|
|
24,909
|
|
|
|
|
|
|
|
1,500
|
|
|
|
26,409
|
|
|
|
*
|
|
Sidney E. Harris
|
|
|
6,745
|
|
|
|
|
|
|
|
1,500
|
|
|
|
8,245
|
|
|
|
*
|
|
Alfred W. Jones III
|
|
|
8,753
|
|
|
|
|
|
|
|
1,500
|
|
|
|
10,253
|
|
|
|
*
|
|
Mason H. Lampton
|
|
|
70,723
|
|
|
|
30,614
|
|
|
|
1,500
|
|
|
|
102,837
|
|
|
|
*
|
|
James B. Lipham
|
|
|
74,689
|
|
|
|
600
|
|
|
|
19,815
|
|
|
|
95,104
|
|
|
|
*
|
|
W. Walter Miller, Jr.
|
|
|
79,924
|
|
|
|
47,362
|
|
|
|
1,500
|
|
|
|
128,786
|
|
|
|
*
|
|
H. Lynn Page
|
|
|
268,408
|
|
|
|
119,036
|
|
|
|
1,500
|
|
|
|
388,944
|
|
|
|
*
|
|
William A. Pruett
|
|
|
148,725
|
|
|
|
|
|
|
|
23,199
|
|
|
|
171,924
|
|
|
|
*
|
|
Philip W. Tomlinson
|
|
|
563,849
|
|
|
|
39,864
|
|
|
|
84,400
|
|
|
|
785,613
|
|
|
|
*
|
|
John T. Turner
|
|
|
21,600
|
|
|
|
576,000
|
|
|
|
1,500
|
|
|
|
599,100
|
|
|
|
*
|
|
Kenneth L. Tye
|
|
|
72,011
|
|
|
|
850
|
|
|
|
21,403
|
|
|
|
94,264
|
|
|
|
*
|
|
Richard W. Ussery
|
|
|
536,772
|
|
|
|
66,000
|
|
|
|
1,000
|
|
|
|
923,772
|
|
|
|
*
|
|
M. Troy Woods
|
|
|
65,769
|
|
|
|
2,936
|
|
|
|
67,672
|
|
|
|
136,377
|
|
|
|
*
|
|
James D. Yancey
|
|
|
535,718
|
|
|
|
42,730
|
|
|
|
1,500
|
|
|
|
579,948
|
|
|
|
*
|
|
Rebecca K. Yarbrough
|
|
|
210,878
|
|
|
|
330,878
|
(2)
|
|
|
1,500
|
|
|
|
543,256
|
|
|
|
*
|
|
Directors and Executive Officers as a Group (22 persons)
|
|
|
3,398,154
|
|
|
|
1,622,350
|
|
|
|
254,223
|
|
|
|
5,692,227
|
|
|
|
2.9
|
|
* Less than one percent of the outstanding shares of
TSYS stock.
|
|
|
(1)
|
|
The totals shown in the table above
for each of the directors and executive officers of TSYS listed
below include the following shares as of September 30,
2007: (a) under the heading Stock Options the
number of shares of TSYS stock that each individual had the
right to acquire within 60 days through the exercise of
stock options, and (b) under the heading Pledged
Shares the number of shares of TSYS stock that were
pledged, including shares held in a margin account.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name
|
|
Stock Options
|
|
Pledged Shares
|
|
|
|
Philip W. Tomlinson
|
|
|
97,500
|
|
|
|
|
|
|
|
|
|
Richard W. Ussery
|
|
|
320,000
|
|
|
|
|
|
|
|
|
|
James D. Yancey
|
|
|
|
|
|
|
10,251
|
|
|
|
|
|
|
|
|
(2)
|
|
Includes 72,000 shares of TSYS
stock held in a trust for which Ms. Yarbrough is not the
trustee. Ms. Yarbrough disclaims beneficial ownership of
these shares.
|
23
Beneficial
Ownership of TSYS Stock by CB&T
The following table sets forth the number of shares of TSYS
stock beneficially owned by CB&T, the only known beneficial
owner of more than 5% of the issued and outstanding shares of
TSYS stock, as of September 30, 2007.
|
|
|
|
|
|
|
|
|
|
|
Shares of TSYS Stock
|
|
|
Percentage of Outstanding Shares of
|
|
|
|
Beneficially Owned
|
|
|
TSYS Stock Beneficially Owned
|
|
Name and Address of Beneficial Owner
|
|
as of 9/30/07
|
|
|
as of 9/30/07
|
|
|
Columbus Bank and Trust Company
|
|
|
159,630,980
|
(1)(2)
|
|
|
80.8
|
%
|
1148 Broadway
Columbus, Georgia 31901
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
CB&T individually owns these
shares.
|
|
(2)
|
|
As of September 30, 2007,
Synovus Trust Company, N.A., a wholly owned trust company
subsidiary of CB&T, and the other banking, brokerage,
investment advisory and trust company subsidiaries of Synovus
held in various fiduciary or advisory capacities a total of
2,544,806 shares (1.3%) of TSYS stock. Of this total,
Synovus Trust Company held 2,264,429 shares as to
which it possessed sole voting power, 2,257,080 shares as
to which it possessed sole investment power, 190,132 shares
as to which it possessed shared voting power and
230,835 shares as to which it possessed shared investment
power. The other banking, brokerage, investment advisory and
trust company subsidiaries of Synovus held 3,188 shares as
to which they possessed shared investment power. Synovus and its
subsidiaries disclaim beneficial ownership of all shares of TSYS
stock which are held by them in various fiduciary, advisory,
non-advisory and agency capacities.
|
Synovus
Stock Ownership
The following table sets forth ownership of shares of Synovus
stock by TSYS directors, each executive officer named in
the Summary Compensation Table and all directors and executive
officers as a group as of September 30, 2007.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares of
|
|
|
Shares of
|
|
|
Shares of
|
|
|
|
|
|
|
|
|
|
Synovus
|
|
|
Synovus
|
|
|
Synovus
|
|
|
|
|
|
|
|
|
|
Stock
|
|
|
Stock
|
|
|
Stock
|
|
|
|
|
|
Percentage of
|
|
|
|
Beneficially
|
|
|
Beneficially
|
|
|
Beneficially
|
|
|
Total
|
|
|
Outstanding
|
|
|
|
Owned with
|
|
|
Owned with
|
|
|
Owned with
|
|
|
Shares of
|
|
|
Shares of
|
|
|
|
Sole Voting
|
|
|
Shared
|
|
|
Sole Voting
|
|
|
Synovus
|
|
|
Synovus
|
|
|
|
and
|
|
|
Voting and
|
|
|
and No
|
|
|
Stock
|
|
|
Stock
|
|
|
|
Investment
|
|
|
Investment
|
|
|
Investment
|
|
|
Beneficially
|
|
|
Beneficially
|
|
|
|
Power as of
|
|
|
Power as of
|
|
|
Power as of
|
|
|
Owned as of
|
|
|
Owned as of
|
|
Name
|
|
9/30/07
|
|
|
9/30/07
|
|
|
9/30/07
|
|
|
9/30/07(1)
|
|
|
9/30/07
|
|
|
Richard E. Anthony
|
|
|
638,818
|
|
|
|
70,429
|
|
|
|
72,547
|
|
|
|
1,440,946
|
|
|
|
*
|
|
James H. Blanchard
|
|
|
1,366,949
|
|
|
|
194,788
|
|
|
|
24,305
|
|
|
|
4,476,382
|
|
|
|
1
|
|
Richard Y. Bradley
|
|
|
31,336
|
|
|
|
179,022
|
|
|
|
1,500
|
|
|
|
211,858
|
|
|
|
*
|
|
Kriss Cloninger III
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
G. Wayne Clough
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Walter W. Driver, Jr.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gardiner W. Garrard, Jr.
|
|
|
154,147
|
|
|
|
736,933
|
|
|
|
1,500
|
|
|
|
892,580
|
|
|
|
*
|
|
Sidney E. Harris
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Alfred W. Jones III
|
|
|
12,331
|
|
|
|
|
|
|
|
1,500
|
|
|
|
13,831
|
|
|
|
*
|
|
Mason H. Lampton
|
|
|
99,281
|
|
|
|
178,981
|
(2)
|
|
|
1,500
|
|
|
|
279,762
|
|
|
|
*
|
|
James B. Lipham
|
|
|
13,577
|
|
|
|
|
|
|
|
|
|
|
|
108,373
|
|
|
|
*
|
|
W. Walter Miller, Jr.
|
|
|
36,135
|
|
|
|
2,694,667
|
(3)
|
|
|
|
|
|
|
2,740,335
|
|
|
|
1
|
|
H. Lynn Page
|
|
|
710,902
|
|
|
|
11,515
|
|
|
|
1,500
|
|
|
|
723,917
|
|
|
|
*
|
|
William A. Pruett
|
|
|
15,967
|
|
|
|
|
|
|
|
|
|
|
|
155,414
|
|
|
|
*
|
|
Philip W. Tomlinson
|
|
|
62,185
|
|
|
|
|
|
|
|
|
|
|
|
395,623
|
|
|
|
*
|
|
John T. Turner
|
|
|
447,476
|
|
|
|
2,110,332
|
(3)
|
|
|
|
|
|
|
2,557,808
|
|
|
|
1
|
|
Kenneth L. Tye
|
|
|
6,330
|
|
|
|
|
|
|
|
|
|
|
|
91,561
|
|
|
|
*
|
|
Richard W. Ussery
|
|
|
47,895
|
|
|
|
|
|
|
|
|
|
|
|
505,946
|
|
|
|
*
|
|
M. Troy Woods
|
|
|
3,274
|
|
|
|
138
|
|
|
|
|
|
|
|
122,804
|
|
|
|
*
|
|
James D. Yancey
|
|
|
924,822
|
|
|
|
87,532
|
|
|
|
1,500
|
|
|
|
2,345,083
|
|
|
|
1
|
|
Rebecca K. Yarbrough
|
|
|
50,061
|
|
|
|
12,720
|
|
|
|
|
|
|
|
62,781
|
|
|
|
*
|
|
Directors and Executive Officers as a Group (22 persons)
|
|
|
4,833,242
|
|
|
|
4,188,398
|
|
|
|
192,636
|
|
|
|
15,958,858
|
|
|
|
4.8
|
|
* Less than one percent of the outstanding shares of
Synovus stock.
24
|
|
|
(1)
|
|
The totals shown in the table above
for the directors and executive officers of TSYS listed below
include the following shares as of September 30, 2007:
(a) under the heading Stock Options the number
of shares of Synovus stock that each individual had the right to
acquire within 60 days through the exercise of stock
options, and (b) under the heading Pledged
Shares the number of shares of Synovus stock that were
pledged, including shares held in a margin account.
|
|
|
|
|
|
|
|
|
|
Name
|
|
Stock Options
|
|
Pledged Shares
|
|
Richard E. Anthony
|
|
|
659,152
|
|
|
|
9,675
|
|
James H. Blanchard
|
|
|
2,890,340
|
|
|
|
935,724
|
|
Gardiner W. Garrard, Jr.
|
|
|
|
|
|
|
285,227
|
|
Mason H. Lampton
|
|
|
|
|
|
|
58,275
|
|
James B. Lipham
|
|
|
94,796
|
|
|
|
|
|
W. Walter Miller, Jr.
|
|
|
9,533
|
|
|
|
53,975
|
|
H. Lynn Page
|
|
|
|
|
|
|
66,468
|
|
William A. Pruett
|
|
|
139,447
|
|
|
|
|
|
Philip W. Tomlinson
|
|
|
333,438
|
|
|
|
|
|
Kenneth L. Tye
|
|
|
85,231
|
|
|
|
|
|
Richard W. Ussery
|
|
|
458,051
|
|
|
|
|
|
M. Troy Woods
|
|
|
119,392
|
|
|
|
|
|
James D. Yancey
|
|
|
1,331,229
|
|
|
|
241,228
|
|
|
|
|
|
|
In addition, the other executive
officers of TSYS had rights to acquire an aggregate of
623,973 shares of Synovus stock within 60 days through
the exercise of stock options.
|
|
(2)
|
|
Includes 176,187 shares of
Synovus stock held in a trust for which Mr. Lampton is not
the trustee. Mr. Lampton disclaims beneficial ownership of
these shares.
|
|
(3)
|
|
Includes 2,092,204 shares of
Synovus stock held by a charitable foundation of which
Mr. Millers spouse and Mr. Turner are among the
trustees.
|
Interlocking
Directorates of TSYS, Synovus and CB&T
Four of the eighteen members of TSYS Board of Directors
also serve as members of the Boards of Directors of Synovus and
CB&T. They are Richard E. Anthony, Richard Y. Bradley, H.
Lynn Page and James D. Yancey. James H. Blanchard, Gardiner W.
Garrard, Jr., Alfred W. Jones III and Mason H. Lampton
serve as directors of Synovus. John T. Turner serves as a
director of CB&T.
25
DIRECTOR
COMPENSATION TABLE
The following table summarizes the compensation paid by TSYS to
directors for the year ended December 31, 2006.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fees Earned or
|
|
|
|
|
|
All Other
|
|
|
|
|
|
|
Paid in Cash
|
|
|
Stock Awards
|
|
|
Compensation
|
|
|
Total
|
|
|
|
($)
|
|
|
($)
|
|
|
($)
|
|
|
($)
|
|
|
Richard E. Anthony
|
|
|
35,000
|
|
|
|
|
|
|
|
7,500
|
(1)
|
|
|
42,500
|
|
James H. Blanchard
|
|
|
45,000
|
|
|
|
|
|
|
|
|
|
|
|
45,000
|
|
Richard Y. Bradley
|
|
|
55,000
|
|
|
|
7,032
|
(2)
|
|
|
|
|
|
|
58,451
|
|
Kriss Cloninger III
|
|
|
45,000
|
|
|
|
7,032
|
(2)
|
|
|
10,000
|
(1)
|
|
|
58,451
|
|
G. Wayne Clough
|
|
|
55,000
|
|
|
|
7,032
|
(2)
|
|
|
10,000
|
(1)
|
|
|
68,451
|
|
Walter W. Driver, Jr.
|
|
|
40,000
|
|
|
|
7,032
|
(2)
|
|
|
6,000
|
(1)
|
|
|
49,451
|
|
Gardiner W. Garrard, Jr.
|
|
|
45,000
|
(3)
|
|
|
7,032
|
(2)
|
|
|
10,000
|
(1)
|
|
|
58,451
|
|
Sidney E. Harris
|
|
|
45,000
|
|
|
|
7,032
|
(2)
|
|
|
5,000
|
(1)
|
|
|
53,451
|
|
John P.
Illges, III(4)
|
|
|
45,000
|
|
|
|
13,952
|
(2)
|
|
|
|
|
|
|
48,451
|
|
Alfred W. Jones III
|
|
|
35,000
|
|
|
|
7,032
|
(2)
|
|
|
10,000
|
(1)
|
|
|
48,451
|
|
Mason H. Lampton
|
|
|
55,000
|
|
|
|
7,032
|
(2)
|
|
|
|
|
|
|
58,451
|
|
W. Walter Miller, Jr.
|
|
|
40,000
|
|
|
|
7,032
|
(2)
|
|
|
|
|
|
|
43,451
|
|
H. Lynn Page
|
|
|
65,000
|
|
|
|
7,032
|
(2)
|
|
|
|
|
|
|
68,451
|
|
John T. Turner
|
|
|
35,000
|
|
|
|
7,032
|
(2)
|
|
|
|
|
|
|
38,451
|
|
Richard W. Ussery
|
|
|
35,000
|
|
|
|
7,032
|
(2)
|
|
|
252,187
|
(1)(5)
|
|
|
290,638
|
|
James D. Yancey
|
|
|
45,000
|
(3)
|
|
|
7,032
|
(2)
|
|
|
10,000
|
(1)
|
|
|
58,451
|
|
Rebecca K. Yarbrough
|
|
|
40,000
|
|
|
|
7,032
|
(2)
|
|
|
|
|
|
|
43,451
|
|
|
|
|
**
|
|
Compensation for
Messrs. Tomlinson and Woods for service on the TSYS Board
is described under the Summary Compensation Table found on
page 38.
|
|
(1)
|
|
Includes $10,000 in contributions
made by TSYS under TSYS Director Stock Purchase Plan for
Messrs. Cloninger, Clough, Garrard, Jones, Ussery and
Yancey; $7,500 for Mr. Anthony; $6,000 for Mr. Driver;
and $5,000 for Mr. Harris. As described more fully below,
qualifying directors can elect to contribute up to $5,000 per
calendar quarter to make purchases of TSYS stock, and TSYS
contributes an additional amount equal to 50% of the
directors cash contributions under the plan.
|
|
(2)
|
|
The grant date fair value of the
500 shares of restricted TSYS stock awarded to this
director in 2006 was $9,965. The amount in this column reflects
the dollar amount recognized for financial statement reporting
purposes for the year ended December 31, 2006 in accordance
with FAS 123(R) and includes amounts for awards granted in 2006
and prior to 2006. For a discussion of the restricted stock
awards reported in this column, see Note 14 of Notes to
Consolidated Financial Statements in TSYS Annual Report
for the year ended December 31, 2006 filed with the
Securities and Exchange Commission (the SEC) as
Exhibit 13.1 to TSYS Annual Report on
Form 10-K
for the fiscal year ended December 31, 2006. At
December 31, 2006, this director held an aggregate of
1,000 shares of restricted TSYS stock, none of which are
vested, with the exception of Mr. Illges whose shares
vested upon retirement as a director.
|
|
(3)
|
|
Messrs. Garrard and Yancey
each received $10,000 as non-voting advisory members of the
Executive Committee.
|
|
(4)
|
|
Upon reaching the age of 72 in
December 2006, Mr. Illges retired as a director and became
an emeritus director of TSYS pursuant to TSYS bylaws.
|
|
(5)
|
|
Includes $159,156 in consulting
fees as described under Consulting Agreement on
page 28. Also includes perquisite of $69,482 for providing
Mr. Ussery with administrative assistance and incremental
costs incurred by TSYS in connection with providing
Mr. Ussery with office space and personal use of the
corporate aircraft. In computing the incremental cost to TSYS of
Mr. Usserys administrative assistance, TSYS
aggregated the cost to TSYS of providing salary and benefits to
Mr. Usserys assistant. Amounts for office space and
personal use of corporate aircraft are not quantified because
they do not exceed the greater of $25,000 or 10% of the total
amount of perquisites.
|
26
Director
Compensation Program
The Corporate Governance and Nominating Committee of TSYS is
responsible for the oversight and administration of the TSYS
director compensation program. The Committees charter
reflects these responsibilities and does not allow the Committee
to delegate its authority to any person other than the members
of the Corporate Governance and Nominating Committee. Under its
charter, the Committee has authority to retain outside advisors
to assist the Committee in performance of its duties. In
November 2004, the Corporate Governance and Nominating Committee
retained Mercer Human Resource Consulting (Mercer)
to review the competitiveness of the TSYS director compensation
program. Mercer was directed to develop peer groups of 15 to
20 companies against which to benchmark director
compensation at TSYS and to review and compare director pay
practices at TSYS to industry peer companies and to those of
general industry companies, analyzing cash compensation,
long-term incentive compensation and total compensation. The
Corporate Governance and Nominating Committee also asked Mercer
to overview recent director pay trends, including shifts in pay
mix, equity compensation trends and changes related to increased
responsibilities and liability. Mercers recommendations
for director compensation were then presented to the Committee.
In January 2005, Mercer recommended certain changes to the
director compensation program at TSYS; the Corporate Governance
and Nominating Committee discussed and considered these
recommendations and recommended to the Board that it approve the
current compensation structure. The decisions made by the
Committee are the responsibility of the Committee and may
reflect factors and considerations other than the information
and recommendations provided by Mercer. The Committee has
decided to review and evaluate director compensation every two
years.
Cash Compensation of Directors. As reflected
in the Fees Earned or Paid in Cash column of the
Director Compensation Table above, for the fiscal year ended
December 31, 2006, directors of TSYS received an annual
cash retainer of $35,000, with Compensation Committee and
Corporate Governance and Nominating Committee members receiving
an additional cash retainer of $5,000 and Audit Committee and
Executive Committee members receiving an additional cash
retainer of $10,000. In addition, the Chairpersons of the
Compensation Committee and Corporate Governance and Nominating
Committee received a $5,000 cash retainer, the Chairperson of
the Audit Committee received a $10,000 cash retainer and the
Lead Director received a $5,000 cash retainer.
By paying each director an annual retainer, TSYS compensates
each director for his or her role and judgment as an advisor to
TSYS, rather than for his or her attendance or effort at
individual meetings. In so doing, directors with added
responsibility are recognized with higher cash compensation. For
example, members of the Audit Committee receive a higher cash
retainer based upon the enhanced duties, time commitment and
responsibilities of service on that committee. The Corporate
Governance and Nominating Committee believes that this
additional cash compensation is appropriate.
In determining the specific amounts of cash compensation,
including fees for service on committees and as chairpersons of
those committees, the Corporate Governance and Nominating
Committee, with the assistance of Mercer, studied cash
compensation at a peer group of 17 companies generally
categorized as business service providers and at 350 large
industrial, financial and service organizations and set the cash
compensation levels at or around the 50th percentile for
such peer companies.
Directors may elect to defer all or a portion of their cash
compensation under the TSYS Directors Deferred
Compensation Plan. The Directors Deferred Compensation
Plan does not provide directors with an above market
rate of return. Instead, the deferred amounts are deposited into
one or more investment funds at the election of the director. In
so doing, the plan is designed to allow directors to defer the
income taxation of a portion of their compensation and to
receive an investment return on those deferred amounts. All
deferred fees are payable only in cash. Each of
Messrs. Harris, Jones and Turner deferred all or a portion
of their cash compensation under this plan during 2006.
Equity Compensation of Directors. During 2006,
non-management directors also received an annual award of
500 shares of restricted TSYS stock in the form of a grant
from the TSYS 2002 Long-Term Incentive Plan, 100% of which vests
after three years. The Board granted these restricted stock
awards to directors on February 1, 2006, the first day of
the month following the Corporate Governance and Nominating
Committee meeting to approve director compensation for the
fiscal year. These restricted stock awards are designed to
create equity ownership and to focus directors on the long-term
performance of TSYS.
27
Before restricted stock awards were first granted to directors
in 2005, TSYS directors were not compensated with equity
ownership in the company, other than contributions under the
Director Stock Purchase Plan. With the assistance of
Mercers market analysis, the Corporate Governance and
Nominating Committee determined in 2005 that a competitive
director compensation program needed to include a more
appropriate level of equity compensation in order to align TSYS
with best practices and to remain competitive with the
compensation programs at peer companies. First, the Committee
determined that restricted stock awards were more appropriate
than the use of stock options based upon the market shift in
equity pay mix at other similarly situated companies. Second,
the Committee determined that a grant of 500 shares of
restricted TSYS stock was appropriate by analyzing the market on
equity compensation and then determining the right mix based
upon a market value approach to the number of shares awarded. In
so doing, the grants of restricted stock provide TSYS directors
with a more balanced pay mix between cash and equity, consistent
with the market trend toward equal weighting of cash and equity.
TSYS Director Stock Purchase Plan is a non-qualified,
contributory stock purchase plan pursuant to which qualifying
TSYS directors can purchase, with the assistance of
contributions from TSYS, presently issued and outstanding shares
of TSYS stock. Under the terms of the Director Stock Purchase
Plan, qualifying directors can elect to contribute up to $5,000
per calendar quarter to make purchases of TSYS stock, and TSYS
contributes an additional amount equal to 50% of the
directors cash contributions. Participants in the Director
Stock Purchase Plan are fully vested in, and may request the
issuance to them of, all shares of TSYS stock purchased for
their benefit under the Plan. TSYS contributions under
this Plan are included in the All Other Compensation
column of the Director Compensation Table above.
TSYS contributions under the Director Stock Purchase Plan
further provide directors the opportunity to buy and maintain an
equity interest in TSYS and to share in the capital appreciation
of TSYS. Together, the restricted stock awards and TSYS
contributions under the Director Stock Purchase Plan provide an
appropriate, competitive amount of compensation to directors in
the form of equity, putting the equity component of
compensation, as well as total compensation, at or near the
median for peer group companies at the time the compensation
structure was approved in 2005.
The restricted stock awards to directors and TSYS
contributions under the Director Stock Purchase Plan also assist
and facilitate directors fulfillment of their stock
ownership requirements. TSYS Corporate Governance
Guidelines require all directors to accumulate over time shares
of TSYS stock equal in value to at least three times the value
of their annual retainer. Directors have five years to attain
this level of total stock ownership but must attain a share
ownership threshold of one times the amount of the
directors annual retainer within three years. These stock
ownership guidelines are designed to align the interests of
TSYS directors to that of TSYS shareholders and the
long-term performance of TSYS.
Consulting
Agreement
Effective June 30, 2005, TSYS and Richard W. Ussery, the
former Chairman of the Board of TSYS, entered into a one-year
Consulting Agreement in conjunction with Mr. Usserys
retirement as an employee of TSYS. Under the Agreement,
Mr. Ussery received monthly payments of $26,526 and was
also provided with 20 hours of personal use of corporate
aircraft. TSYS also provided Mr. Ussery with office space
and administrative assistance during 2006 valued at
approximately $10,202 and $69,482, respectively, subsequent to
his retirement. The Agreement expired on June 30, 2006.
TSYS continued to provide Mr. Ussery with office space and
administrative assistance throughout the remainder of 2006,
however.
28
COMPENSATION
DISCUSSION AND ANALYSIS
Introduction
The following Compensation Discussion and Analysis
(CD&A) describes our compensation program for
the executive officers named in the Summary Compensation Table
on page 38 (named executive officers).
Specifically, the CD&A addresses:
|
|
|
|
|
the objectives of our compensation program (found in the section
entitled Compensation Philosophy and Overview);
|
|
|
|
what our compensation program is designed to reward (also
described in the section entitled Compensation Philosophy
and Overview);
|
|
|
|
each element of compensation (set forth in the section entitled
Primary Elements of Compensation);
|
|
|
|
why each element was chosen (described with each element of
compensation including base pay, short-term incentives and
long-term incentives);
|
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|
|
how amounts and formulas for pay are determined (also described
with each element of compensation including base pay, short-term
incentives and long-term incentives); and
|
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|
|
how each compensation element and our decisions regarding that
element fit into TSYS overall compensation objectives and
affect decisions regarding other elements (also described with
each element of compensation, as well as in the section entitled
Benchmarking).
|
Compensation
Philosophy and Overview
TSYS has established a compensation program for our executives
that is competitive, performance-oriented and designed to
support our strategic goals. The goals and objectives of our
compensation program are described below.
TSYS executive compensation program is designed to compete
in the markets in which we seek executive talent. We believe
that we must maintain a compensation program that allows us to
recruit top level executive talent and that will prevent our
executives from being recruited from us. Our compensation
program is also designed to be performance-oriented. A guiding
principle in developing our compensation program has been
average pay for average performance
above-average pay for above-average performance. As a
result, a significant portion of the total compensation of each
executive is at risk based on short and long-term performance.
Because of our emphasis on performance, we also believe that
compensation generally should be earned by executives while they
are actively employed and can contribute to TSYS
performance.
TSYS compensation program is also designed to support
corporate strategic goals, including growth in earnings and
growth in shareholder value. As described in more detail below,
earnings growth is the primary driver of our short-term
incentive program and growth in shareholder value is the primary
driver of our long-term incentive program. TSYS believes that
the high degree of performance orientation and the use of goals
based upon growth in earnings and growth in shareholder value in
our incentive plans aligns the interests of our executives with
the interests of our shareholders. In addition, TSYS has adopted
stock ownership guidelines in connection with our equity
compensation programs, which further align our executives
interests with the interests of our shareholders.
Primary
Elements of Compensation
There are three primary elements of compensation in TSYS
executive compensation program: base pay, short-term incentive
compensation and long-term incentive compensation. Short-term
and long-term incentive compensation are tied directly to
performance. Short-term incentive compensation is based upon
fundamental operating performance of TSYS measured over a
one-year period. For the reasons described below, long-term
incentive compensation is based upon Synovus total
shareholder return measured over a three-year period. TSYS has
not established a specific targeted mix of
compensation between base pay
29
and short-term and long-term incentives. However, both
short-term and long-term incentives are based upon percentages
or multiples of base pay. If both short-term and long-term
incentives are paid at target, long-term incentives is the
largest portion of an executives total compensation
package. For example, if short-term and long-term incentives are
paid at target, long-term incentives would constitute almost
fifty percent of an executives total compensation package,
thereby illustrating our emphasis on performance and growth in
shareholder value.
Base Pay. Base pay is seen as the amount paid
to an executive for performing his or her job on a daily basis.
To ensure that base salaries are competitive, TSYS targets base
pay at the median (e.g., the 50th percentile) of the market
for similarly situated positions, based upon each
executives position and job responsibilities. In order to
benchmark base pay, TSYS selects a peer group of companies (the
Peer Companies). The Peer Companies are selected by
considering companies that compete in TSYS market for
business and for talent, companies with similar business
operations and focus and companies with similar organization
size (revenues approximately one-half to two times those of
TSYS). In selecting the Peer Companies, potential companies were
reviewed with the same Global Industry Classification Standards
codes as TSYS and previously identified peer companies, service
companies in the Dow Jones Industrial Goods and Services Index
and companies in the Standard and Poors Software and Services
Index. For 2006, the Peer Companies were: Acxiom Corp.,
Affiliated Computer Services, Inc., Alliance Data Systems Corp.,
BISYS Group, Inc., Ceridian Corp., Checkfree Corp., ChoicePoint
Inc., Convergys Corp., eFunds Corp., Equifax Inc., Fair Isaac
Corp., Fidelity National Information Services, Inc., Fiserv,
Inc., Global Payments Inc., NCO Group, Inc., Paychex, Inc.,
Sabre Holdings Corp. and Teletech Holdings, Inc.
When establishing base salaries, the Committee compares each
executives current base pay to the market median for that
position using proxy information from the Peer Companies as well
as external market surveys. For certain positions for which
there is no clear market match in the benchmarking data, TSYS
uses a blend of two or more positions from the benchmarking
data. The Committee also reviews changes in the benchmarking
data from the previous year. The Committee then uses this data
to establish a competitive base salary for each executive. For
example, an executive whose base salary is below the
benchmarking target for his or her position may receive a larger
percentage increase than an executive whose base salary exceeds
the benchmarking target for his or her position.
In addition to market comparisons of similar positions at the
Peer Companies, individual performance may affect base pay. For
example, an executive whose performance is not meeting
expectations may receive no increase in base pay or a smaller
base pay increase in a given year. On the other hand, an
executive with outstanding performance may receive a larger base
pay increase or more frequent base pay increases.
Base pay is not directly related to TSYS performance,
except over the long term since revenues are used in
benchmarking base pay against the Peer Companies. Comparison of
an executives base salary to the base salaries of other
TSYS executives may also be a factor in establishing base
salaries, especially with respect to positions for which there
is no clear market match in the base pay benchmarking data. For
2006, all of the base pay increases for the named executive
officers were calculated taking into account the market data
described above as well as existing base salaries, the 2006
merit budget, internal pay equity, individual performance,
experience, time in position and retention needs.
Because of the process we use to establish base pay, large
increases in base pay generally occur only when an executive is
promoted into a new position.
Short-Term Incentives. In addition to base
salary, our executive compensation program includes short-term
incentive compensation. We have elected to pay short-term
incentive compensation in order to (1) provide an incentive
for executives to meet our short-term earnings growth goals, and
(2) ensure a competitive compensation program given the
marketplace prevalence of short-term incentive compensation.
Our short-term incentive program is tied directly to our
fundamental operating performance measured over a one-year
period. Each year, the Committee establishes a target for
earnings per share (EPS) growth. The target is
generally set based upon EPS growth guidance that has been
publicly disclosed by TSYS. A target goal of 100% equates to a
market award, which is a typical short-term
incentive award for similar positions at the Peer Companies,
expressed as a percentage of base salary.
30
Actual short-term incentive targets for 2006 were set taking
into account median market data at the Peer Companies, as well
as existing incentive targets, internal pay equity, individual
performance and retention needs. The target short-term incentive
percentage for Messrs. Tomlinson and Woods is 100% of base
salary and the target short-term incentive percentage for
TSYS other named executive officers is 85% of base salary.
The amount of a short-term incentive award can range from zero
to 200% of a target grant in accordance with a schedule approved
by the Committee each year. For 2006, the Committee approved the
following schedule:
|
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|
EPS Percentage Growth
|
|
Percent of Target Bonus Paid
|
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|
34% and above
|
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|
200%
|
|
33%
|
|
|
192.5%
|
|
32%
|
|
|
180%
|
|
31%
|
|
|
167.5%
|
|
30%
|
|
|
155%
|
|
29%
|
|
|
142.5%
|
|
28%
|
|
|
130.0%
|
|
27%
|
|
|
117.5%
|
|
26%
|
|
|
105%
|
|
25.3%
|
|
|
100%
|
|
25%
|
|
|
95%
|
|
24%
|
|
|
90%
|
|
23%
|
|
|
80%
|
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22%
|
|
|
60%
|
|
21%
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|
50%
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|
Below 21%
|
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|
0%
|
|
Although the target EPS growth goal set by the Committee is
generally based upon the initial EPS guidance which has been
publicly disclosed by TSYS calculated in accordance with
accounting principles generally accepted in the United States
(GAAP), from time to time the target percentages are
based on non-GAAP EPS growth percentages for purposes of
determining short-term incentive compensation because of unusual
events that could occur during the year. These events include
changes in accounting and regulatory standards, changes in tax
rates and laws, charges for corporate or workforce
restructurings, acquisitions and divestitures and expenses or
income associated with the conversion or deconversion of a major
TSYS customer. In 2006, the target EPS growth goal under the
short-term incentive payout schedule was made more difficult by
the amount of the net financial impact of the deconversion of
Bank of Americas consumer credit card portfolio from TSYS.
As is common practice in the market, short-term incentives are
paid in a lump-sum cash payment as soon as practicable in the
year following the performance year, usually no later than
February 15. Under the short-term incentive plan, the
Committee has the right to exercise downward discretion and
reduce the amount that would otherwise be awarded under the
above schedule. For example, the short-term incentive awards can
be reduced to reflect individual or business unit performance,
to exclude unanticipated, non-recurring gains, or for
affordability (reduced in order to fund another expense, such as
other incentive compensation or retirement plans).
The short-term incentive awards for 2006 are set forth in the
Non-Equity Incentive Plan Compensation column of the
Summary Compensation Table. The 2006 short-term incentive awards
were paid at 130% of target based upon the bonus payout schedule
approved by the Committee (TSYS had a 28% increase in EPS for
2006).
Long-Term Incentives. Our executive
compensation program also includes long-term incentive
compensation, which is paid in equity of TSYS and Synovus. It is
important to understand the relationship of TSYS and Synovus in
order to appreciate our rationale and process for determining
long-term incentive awards, which relationship is described in
the following paragraph.
31
Synovus owns 80.7% of the outstanding shares of TSYS stock.
Although TSYS stock is publicly traded on the NYSE, only the 19%
of TSYS stock that is not owned by Synovus is available for
trading. Consequently, there is limited float in TSYS stock,
which negatively impacts its liquidity. For this reason, we have
concluded that TSYS shareholder return is not the most
appropriate measure of growth under TSYS long-term
incentive compensation program. The shareholder return of
Synovus is directly affected by TSYS shareholder return
because of Synovus 80.7% ownership of TSYS. By
recommending that TSYS executives be granted Synovus stock, and
by linking the grant of equity awards to how well Synovus has
performed, we have ensured that the interests of TSYS executives
are directly linked to the interests of Synovus shareholders. We
believe this connection to Synovus shareholders is important
because of the substantial impact that TSYS performance
has on the market capitalization of Synovus. As a result,
Synovus total shareholder return is used as the basis for
TSYS long-term incentive compensation program and this has
proven to be an effective approach.
We have elected to pay long-term incentive compensation in order
to: (1) provide an incentive for our executives to provide
exceptional shareholder return to shareholders by tying a
significant portion of their compensation opportunity to growth
in shareholder value, (2) align the interests of executives
with shareholders by awarding executives equity in TSYS and
Synovus, and (3) ensure a competitive compensation program
given the market prevalence of long-term incentive compensation.
TSYS long-term incentive plan awards equity to executives
based upon performance, as measured by total shareholder return
(TSR) of Synovus, over a three-year period. We use a
three-year period to measure performance for purposes of our
long-term incentive awards in order to reduce the impact of
unusual events that may occur in a given year.
Under TSYS long-term incentive program, TSR is measured in
two ways: (1) absolute TSR of Synovus, and (2) TSR
compared to the competitors of Synovus. TSR for each measurement
period is calculated by dividing Synovus stock price
appreciation and dividends paid by the beginning stock price. We
use both measures of shareholder return because we believe
shareholders are interested both in how Synovus
shareholder return compares to the competitors of Synovus, as
well as their actual return on their investment. The competitors
of Synovus, for purposes of long-term incentives, are the banks
in the Keefe, Bruyette and Woods 50 Index (KBW 50).
The KBW 50, which is a published banking index, was selected for
awarding long-term incentives to ensure that the companies are
chosen by an independent third party and to provide consistency
from year to year in the assessment of long-term performance for
incentive purposes.
The amount of long-term incentives awarded to executives each
year is based upon a performance grid approved by the Committee.
The performance grid has been in place substantially in its
current form for over a decade. This grid is reproduced below
showing the absolute TSR of Synovus over the three preceding
calendar years as the horizontal measurement and the percentile
performance of Synovus against the KBW 50 over the three
preceding calendar years as the vertical measurement.
PAYOUT AS
A PERCENT OF TARGET
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Percentile of
3-year
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|
SNV TSR vs. KBW 50
|
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|
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|
90th
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|
75%
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|
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|
100%
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|
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|
150%
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|
|
200%
|
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|
|
250%
|
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|
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|
|
|
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|
|
|
|
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|
70th
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|
50%
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|
|
|
|
100%
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|
|
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|
125%
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|
|
|
|
150%
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|
|
|
200%
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|
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50th
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|
50%
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75%
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|
|
|
100%
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|
125%
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|
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150%
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30th
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|
50%
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|
|
|
|
50%
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|
|
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|
75%
|
|
|
|
|
100%
|
|
|
|
|
100%
|
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|
|
|
|
|
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|
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<30th
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|
*
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|
50%
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|
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|
|
50%
|
|
|
|
|
75%
|
|
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|
|
75%
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|
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|
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|
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|
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|
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|
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|
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|
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|
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<4%
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|
4%
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|
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8%
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|
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|
|
10%
|
|
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|
16%
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3-Year
Specialized Synovus TSR
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*
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Long-term incentives are awarded at
50% of target and solely in Synovus stock options as described
below.
|
The award percentages in the performance grid are multiplied by
the amount of a target long-term incentive award, which is
expressed as a percentage of base salary at the time the award
is made. Actual
32
long-term incentive targets are established taking into account
market median data at the Peer Companies, as well as existing
incentive targets, internal pay equity, individual performance
and retention needs. The target long-term incentive percentage
for Messrs. Tomlinson and Woods is 200% of base salary and
the target long-term incentive percentage for TSYS other
named executive officers is 150% of base salary.
TSYS believes that there are advantages and disadvantages to
every form of equity award. As a result, awards payable under
the performance grid are generally paid 50% in TSYS restricted
stock and 50% in Synovus stock options, but the Committee has
the discretion to vary the form of the award as needed for
accounting, tax or other reasons. The 50%/50% split
in equity awarded is based upon the estimated overall value of
the award as of the date of grant (a stock option is estimated
to be equal to one-third the value of a restricted stock award).
Although TSYS prefers for all awards to be made in equity of
TSYS, there are not enough shares of TSYS available for such
awards because of TSYS 81% ownership by Synovus. As a
result, restricted stock awards are made in TSYS stock, while
stock option awards are made in Synovus stock. The Compensation
Committee of Synovus grants Synovus stock options to TSYS
executives based upon the recommendation of the TSYS Committee.
In the event that Synovus TSR falls within the bottom
left-hand corner of the payout grid (i.e., Synovus
Specialized TSR is less than 4% and is also less than the
30th percentile compared to the KBW 50) for a
particular year, executives will be awarded 50% of a target
long-term incentive award, awarded solely in Synovus stock
options, issued at fair market value (i.e., closing price) on
the date of the award. The Committee believes that executives
should receive a stock option grant even if Synovus TSR
falls within this category because the Peer Companies would make
such a grant and the stock price must appreciate from that point
in order for the executive to benefit from the grant.
Because the Synovus and TSYS Compensation Committees may take
action to approve equity awards on or near the date that
Synovus and TSYS earnings are released,
respectively, the Committees have established the last business
day of the month in which earnings are released as the grant
date for equity awards to ensure that the annual earnings
releases have had time to be absorbed by the market before
equity awards are granted and stock option exercise prices are
established. TSYS released its annual earnings on
January 17, 2006, and the TSYS Compensation Committee
granted TSYS restricted stock awards to the named executive
officers on January 31, 2006. Synovus released its annual
earnings on January 18, 2006. The Synovus Compensation
Committee met on January 18, 2006 to approve Synovus stock
option grants to the named executive officers effective
January 31, 2006. As a result, the grant date for long-term
incentive awards (Synovus stock options and TSYS restricted
stock awards) was January 31, 2006. The closing price of
Synovus stock on January 31, 2006 was used as the exercise
price for stock options and to determine the FAS 123(R)
accounting expense and was also used for disclosure in the
compensation tables in this Proxy Statement.
In 2006, long-term incentive equity awards were granted to
TSYS named executive officers pursuant to the above grid
based upon the
2003-2005
performance period. For this performance period, Synovus
Specialized TSR was 14.73% and Synovus TSR was in the
49th percentile of the KBW 50. Under the grid, this
resulted in a long-term incentive award equal to 140% of target.
The equity awards made to TSYS named executive officers in
2006 are set forth in the All Other Stock Awards and
All Other Option Awards columns in the Grant of
Plan-Based Awards Table. The split in long-term
incentive awards for all of the named executive officers was 50%
Synovus stock options and 50% TSYS restricted stock awards.
In addition to the annual long-term incentive awards awarded
pursuant to the performance grid described above, the Committee
has granted other long-term incentive awards in certain
circumstances. For example, the Committee made TSYS restricted
stock award grants to Messrs. Tomlinson and Woods in 2005
to reflect their promotion to Chairman and Chief Executive
Officer and President and Chief Operating Officer, respectively,
and to serve as a vehicle for retaining their services in their
new roles. Although the grants to Messrs. Tomlinson and
Woods were awarded primarily for retention, the Committee
approved performance-based grants to link their awards to a
threshold level of performance. The awards to
Messrs. Tomlinson and Woods vest over a seven year period.
With respect to these awards, the Committee establishes
performance measures each year during the seven year period and,
if the performance measure is attained for a particular year,
20% of the award vests. The performance measure established for
2006 was 75% of the EPS target established under TSYS
short-term incentive plan.
33
Because this measure was exceeded for 2006, 20% of the awards to
Messrs. Tomlinson and Woods vested in 2006.
The Committee also recommended that challenge grant
stock options in Synovus stock be granted to each of the named
executive officers. The Synovus Compensation Committee granted
such options on May 10, 2001. The challenge grants were
significant in size, with Mr. Tomlinson receiving 500,000
stock options and each of the other named executive officers
receiving a grant of 400,000 stock options. The challenge grants
were designed to provide these executives with an incentive for
exceptional growth in shareholder return, as well as to retain
the services of the executives who received the grants for a
significant period of time. The challenge grants vest in equal
installments if the fair market value of Synovus stock exceeds
$40, $45 and $50 per share. The challenge grants also vest on
May 10, 2008 if the stock price targets are not attained
prior to such date, provided the executives remain in the
continuous employment of TSYS through such date.
Benchmarking
As described above, TSYS benchmarks base salaries and
market short-term and long-term incentive target
awards with the Peer Companies. TSYS also benchmarks total
compensation (base salary, short-term incentives and long-term
incentives) of its executives. TSYS uses the Peer Companies for
benchmarking total compensation, as well as external market
surveys. TSYS uses a three-year look back of the total
compensation benchmark data to reduce the impact of short-term
fluctuations in the data which may occur from year to year. When
reviewing the total compensation benchmarking data, TSYS focuses
on total compensation opportunities, not necessarily the amount
of compensation actually paid, which varies depending upon
TSYS performance results due to the programs
performance orientation. For example, over the past five years,
TSYS long-term incentive awards have been below target for
three of the five years, at target for one year and above-target
for one year. Although these awards result in total compensation
amounts for TSYS executives that could be considered below
market, the Committee believes the amount of compensation paid
to its executives is appropriate given Synovus shareholder
return during this five-year period.
Perquisites
Perquisites are a very small part of our executive compensation
program. Perquisites are not tied to performance of TSYS.
Perquisites are offered to align our compensation program with
competitive practices because similar positions at the Peer
Companies offer similar perquisites. The perquisites offered by
TSYS are set forth in footnotes (5) and (6) of the
Summary Compensation Table. Considered both individually and in
the aggregate, we believe that the perquisites we offer to our
named executive officers are reasonable and appropriate.
Employment
Agreements
TSYS does not generally use employment agreements with respect
to its executives, except in unusual circumstances such as
acquisitions. None of the named executive officers have
employment agreements.
Retirement
Plans
Our compensation program also includes retirement plans designed
to provide income following an executives retirement. We
have chosen to use defined contribution retirement plans because
we believe that defined benefit plans are difficult to
understand, difficult to communicate, and contributions to
defined benefit plans often depend upon factors that are beyond
TSYS control, such as the earnings performance of the
assets in such plans compared to actuarial assumptions inherent
in such plans. TSYS offers three qualified defined contribution
retirement plans to its employees: a money purchase pension
plan, a profit sharing plan and a 401(k) savings plan.
The money purchase pension plan has a fixed 7% of compensation
employer contribution every year. The profit sharing plan and
any employer contribution to the 401(k) savings plan are tied
directly to TSYS performance. There are opportunities
under both the profit sharing plan and the 401(k) savings plan
for employer contributions of up to 7% of compensation based
upon the achievement of EPS growth goals. For 2006, TSYS
named executive officers received a contribution of 7% of
compensation under the
34
profit sharing plan and 3% of compensation under the 401(k)
savings plan based upon TSYS performance. The retirement
plan contributions for 2006 are included in the All Other
Compensation column in the Summary Compensation Table.
In addition to these plans, the Synovus/TSYS Deferred
Compensation Plan (Deferred Plan) replaces benefits
lost under the qualified plans due to legal limits imposed by
the IRS. The Deferred Plan does not provide above
market interest. Instead, participants in the Deferred
Plan can choose to invest their accounts among mutual funds that
are generally the same as the mutual funds that are offered in
the 401(k) savings plan. The executives Deferred Plan
accounts are held in a rabbi trust, which is subject to claims
by TSYS creditors. The employer contribution to the
Deferred Plan for 2006 for named executive officers is set forth
in the All Other Compensation column in the Summary
Compensation Table and the earnings on the Deferred Plan
accounts during 2006 for named executive officers is set forth
in the Aggregate Earnings in Last FY column in the
Nonqualified Deferred Compensation Table and in the All
Other Compensation column in the Summary Compensation
Table.
Post-Termination
Compensation Philosophy
TSYS compensation program is designed to reflect
TSYS philosophy that compensation generally should be
earned while actively employed. Although retirement benefits are
paid following an executives retirement, the benefits are
earned while employed and are substantially related to
performance as described above. TSYS has entered into limited
post-termination arrangements when appropriate, such as the
change of control agreements which are described in the
Potential Payouts Upon Termination or Change of
Control section.
TSYS chose to enter into change of control arrangements with its
executives: (1) to ensure the retention of executives and
an orderly transition during a change of control, (2) to
ensure that executives would be financially protected in the
event of a change of control so they continue to act in the best
interests of TSYS while continuing to manage TSYS during a
change of control, and (3) to ensure a competitive
compensation package because such arrangements are common in the
market and it was determined that such agreements were important
in recruiting executive talent. During 2004 and the beginning of
2005, the Committee reviewed the change of control arrangements
and determined that certain provisions were not in line with the
Committees philosophy or market practice. As a result, the
change of control agreements for the named executive officers
were amended at the beginning of 2005 to: (1) toughen the
definition of a change of control from a merger in
which the former shareholders of Synovus or TSYS own less than
two-thirds
(2/3)
of the surviving company to a merger in which less than sixty
percent (60%) of the surviving company is owned by the former
shareholders, (2) implement a double trigger
(as described below) in order for benefits to be paid under the
agreements, thereby eliminating the ability of an executive to
trigger benefits by voluntarily resigning during the
13th month following a change of control, (3) extend
the time during which an executive can receive benefits under
the agreement upon an involuntary termination without cause or a
voluntary termination for good reason from one year to two
years, and (4) provide that a
gross-up for
excise taxes only occurs if the total change of control payments
exceed 110% of the applicable IRS cap. A double
trigger means that two events must occur in order for
benefits to be paid: (1) a change of control, and
(2) a termination of employment (actual or constructive)
within two years following the change of control. The Committee
specifically chose a double trigger form of
agreement because the Committee believed that double
trigger agreements provided executives with sufficient
financial protection in the event of a change of control and
because double trigger agreements were the prevalent
market practice.
Stock
Ownership Guidelines
To align the interests of its executives with shareholders, TSYS
has implemented stock ownership guidelines for its executives.
Under the guidelines, executives are required to maintain either
five, four or three times the amount of their base salary in
TSYS stock. TSYS Chief Executive Officer is required to
maintain five times his base salary, the President four times
his base salary and the other executive officers three times
their base salaries. The guidelines are recalculated at the
beginning of each calendar year. The guideline was initially
adopted January 1, 2004 and executives had a five-year
grace period to fully achieve the guideline with an interim
three-year goal. Until the guideline is achieved, executives are
required to retain all net shares received upon the exercise of
stock options, excluding shares used to pay
35
the options exercise price and any taxes due upon
exercise. In the event of a severe financial hardship, the
guidelines permit the development of an alternative ownership
plan by the Chairman of the Board of Directors and Chairman of
the Compensation Committee. All executives are currently in
compliance with the guideline.
Tally
Sheets
The Committee has reviewed tally sheets for each of TSYS
named executive officers. The tally sheets add up all forms of
compensation for each officer and also provide estimates of the
amounts payable to each executive upon the occurrence of
potential future events, such as a change of control,
retirement, voluntary or involuntary termination, death and
disability. The tally sheets are used to provide the Committee
with total compensation amounts for each executive so that the
Committee can determine whether the amounts are reasonable or
excessive. Although the tally sheets are not used to benchmark
total compensation with specific companies, the Committee
considers total compensation paid to executives at other
companies in considering the reasonableness of our
executives total compensation. After reviewing the tally
sheets, the Committee determined that the total compensation
amounts are fair, reasonable and competitive.
Other
Policies
Restatements. TSYS does not have a formal
policy regarding the recovery of awards or payouts in the event
the financial statements upon which TSYS performance
measurements are based are restated or otherwise adjusted in a
manner that could reduce the size of an award. TSYS believes
that the decision of whether a recovery is appropriate would
depend upon the facts and circumstances surrounding the
restatement or adjustment.
Tax Considerations. We have structured most
forms of compensation paid to our executives to be tax
deductible. For example, Internal Revenue Code
Section 162(m) limits the deductibility of compensation
paid by a publicly-traded corporation to its Chief Executive
Officer and four other highest paid executives for amounts in
excess of $1 million, unless certain conditions are met.
The base salaries of all of our named executive officers are
tax-deductible because they are less than $1 million. In
addition, the short-term and long-term incentive plans have been
approved by shareholders and awards under these plans are
designed to qualify as performance-based
compensation to ensure deductibility under Code
Section 162(m). We reserve the right to provide
compensation which is not tax-deductible, however, if we believe
the benefits of doing so outweigh the loss of a tax deduction.
The only form of executive compensation not currently
tax-deductible by TSYS is the personal use of corporate
aircraft. We believe that a small amount of personal use each
year is an appropriate perquisite for our executives, despite
the loss of a tax deduction.
In general, TSYS does not
gross-up
its officers for taxes that are due with respect to their
compensation. An example of an exception to this rule is for
excise taxes that may be due with respect to the change of
control agreements, as described above.
Accounting Considerations. We account for all
compensation paid in accordance with GAAP. The accounting
treatment has generally not affected the form of compensation
paid to named executive officers.
Board Fees. Our executives who serve on the
Board of Directors of TSYS are paid the same cash director fees
as those paid to non-executive directors and are also entitled
to participate in TSYS Director Stock Purchase Plan, which
is described under Equity Compensation of Directors.
However, directors who are also executives do not receive the
equity compensation that is granted to non-executive directors
of TSYS. Although paying cash director fees to
inside executives who serve on Boards of Directors
is not the prevalent market practice, it has been the historical
practice at TSYS for many years and constitutes a small portion
of affected executives total compensation amount. These
amounts are included in the All Other Compensation
column of the Summary Compensation Table.
Conclusion
For the reasons described above, we believe that each element of
compensation offered in our executive compensation program, and
the total compensation delivered to each named executive
officer, is fair, reasonable and competitive.
36
Significant
Events After December 31, 2006
Synovus stock options and TSYS restricted stock awards were
granted to TSYS named executive officers effective
January 31, 2007 in accordance with the performance grid
discussed under Long-Term Incentives above. The
awards, which were made based upon Synovus TSR for the
2004-2006
performance period, were made at 50% of target.
Messrs. Tomlinson, Lipham, Woods, Pruett and Tye were each
granted Synovus stock option awards of 30,630, 11,715, 21,516,
13,952 and 13,212 shares, respectively, at an exercise
price of $31.93, the closing price of Synovus stock on
January 31, 2007. In addition, Messrs. Tomlinson,
Lipham, Woods, Pruett and Tye were each granted TSYS restricted
stock awards of 10,550, 4,035, 7,411, 4,806 and
4,551 shares, respectively, effective January 31,
2007. The stock options and restricted stock awards vest over a
three year period, in equal annual installments of one-third
each, on January 31, 2008, January 31, 2009 and
January 31, 2010. The awards will be described in detail in
TSYS Proxy Statement for the 2008 Annual Meeting of
Shareholders.
Compensation
Committee Interlocks and Insider Participation
Messrs. Lampton, Clough and Driver served on the
Compensation Committee during 2006. None of these individuals is
or has been an officer or employee of TSYS.
37
SUMMARY
COMPENSATION TABLE
The table below summarizes the compensation for each of the
named executive officers for the fiscal year ended
December 31, 2006.
The named executive officers were not entitled to receive
payments which would be characterized as Bonus
payments for the fiscal year ended December 31, 2006. The
short-term incentive amounts paid to the named executives are
set forth in the Non-Equity Incentive Plan
Compensation column. TSYS methodology and rationale
for short-term incentive compensation are described in the
Compensation Discussion and Analysis above.
The named executive officers did not receive any compensation
that is reportable under the Change in Pension Value and
Nonqualified Deferred Compensation Earnings column
because, as described in the Compensation Discussion and
Analysis, TSYS has no defined benefit pension plans and does not
pay above-market interest on deferred compensation. The 2006
retirement plan contributions and earnings for the named
executive officers are set forth in the All Other
Compensation column.
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Change in
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Pension
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Value and
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Nonquali-
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Non-Equity
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fied
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Incentive
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Deferred
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Plan
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Com-
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All Other
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Stock
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Option
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Com-
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pensation
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Com-
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Salary
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Bonus
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Awards
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Awards
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pensation
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Earnings
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pensation
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Name and Principal Position
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Year
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($)
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($)
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($)(1)
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($)(2)
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($)
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($)
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($)
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Total ($)
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Philip W. Tomlinson
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2006
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652,000
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583,775
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1,157,063
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847,600
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451,567
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(3)(4)(5)(6)
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3,692,005
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Chairman of the Board
and Chief Executive Officer
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James B. Lipham
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2006
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332,500
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144,180
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738,935
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367,413
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152,604
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(4)(5)(6)
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1,735,632
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Senior Executive Vice
President and Chief
Financial Officer
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M. Troy Woods
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2006
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458,000
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473,229
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824,221
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595,400
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299,761
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(3)(4)(5)
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2,650,611
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President and Chief
Operating Officer
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William A. Pruett
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2006
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396,000
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168,190
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756,590
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437,580
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171,179
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(4)(5)(6)
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1,929,539
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Senior Executive Vice
President and
Chief Client Officer
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Kenneth L. Tye
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2006
|
|
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375,000
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|
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154,474
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745,859
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414,375
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159,633
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(4)(7)
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1,849,341
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Senior Executive Vice
President and
Chief Information Officer
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(1)
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The amounts in this column reflect
the dollar amount recognized for financial statement reporting
purposes for 2006 in accordance with FAS 123(R) and include
amounts from awards granted in 2006 and prior to 2006. For a
discussion of the restricted stock awards reported in this
column, see Note 14 of Notes to Consolidated Financial
Statements in TSYS Annual Report for the year ended
December 31, 2006 filed with the SEC as Exhibit 13.1
to TSYS Annual Report on
Form 10-K
for the fiscal year ended December 31, 2006.
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(2)
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The amounts in this column reflect
the dollar amount recognized for financial statement reporting
purposes for 2006 in accordance with FAS 123(R) and include
amounts from awards granted in 2006 and prior to 2006. For a
discussion of the assumptions made in the valuation of the stock
option awards reported in this column, see Note 14 of Notes
to Consolidated Financial Statements in TSYS Annual Report
for the year ended December 31, 2006 filed with the SEC as
Exhibit 13.1 to TSYS Annual Report on Form
10-K for the
fiscal year ended December 31, 2006.
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(3)
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Amount includes director fees paid
in cash of $80,000 for Mr. Tomlinson in connection with his
service as a director of TSYS and an advisory director of
Synovus and $45,000 for Mr. Woods in connection with his
service as a director of TSYS.
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(4)
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Amount includes allocations to
qualified defined contribution plans of $37,400 for each
executive and allocations (including earnings) to nonqualified
deferred compensation plans of $319,683, $105,136,
$199,491, $120,735 and $122,233 for Messrs. Tomlinson,
Lipham, Woods, Pruett and Tye, respectively.
|
|
(5)
|
|
Amount includes the costs incurred
by TSYS in connection with providing the perquisite of an
automobile allowance. Amount also includes the incremental cost
to TSYS for reimbursement of country club dues, if any, and the
incremental cost to TSYS for personal use of the corporate
aircraft. Amounts for these items are not quantified because
they do not exceed the greater of $25,000 or 10% of the total
amount of perquisites.
|
|
(6)
|
|
In addition to the items noted in
footnote (5), the amount also includes for
Messrs. Tomlinson, Lipham and Pruett the costs incurred by
TSYS for spousal entertainment (recreational activities at the
TSYS Board retreat) and for Messrs. Tomlinson and Lipham
the incremental cost incurred by TSYS for security alarm
monitoring, if any, and the costs incurred by TSYS for
reimbursement for financial planning services. Amounts for these
items are not quantified because they do not exceed the greater
of $25,000 or 10% of the total amount of perquisites.
|
|
(7)
|
|
Amount excludes perquisites because
the total value of perquisites does not exceed $10,000.
|
38
GRANTS OF
PLAN-BASED AWARDS
for the Year Ended December 31, 2006
The table below sets forth the short-term incentive compensation
(payable in cash) and long-term incentive compensation (payable
in the form of TSYS restricted stock awards and Synovus stock
options) awarded to the named executive officers for 2006.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
All Other
|
|
|
All Other
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock
|
|
|
Option
|
|
|
|
|
|
Grant
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Awards:
|
|
|
Awards:
|
|
|
Exercise
|
|
|
Date Fair
|
|
|
|
|
|
|
|
|
|
Estimated Future Payouts
|
|
|
Estimated Future Payouts
|
|
|
Number of
|
|
|
Number of
|
|
|
or Base
|
|
|
Value of
|
|
|
|
|
|
|
|
|
|
Under Non-Equity Incentive
|
|
|
Under Equity Incentive
|
|
|
Shares of
|
|
|
Securities
|
|
|
Price of
|
|
|
Stock
|
|
|
|
|
|
|
|
|
|
Plan
Awards(2)
|
|
|
Plan Awards
|
|
|
Stock or
|
|
|
Underlying
|
|
|
Option
|
|
|
and
|
|
|
|
Grant
|
|
|
Action
|
|
|
Threshold
|
|
|
Target
|
|
|
Maximum
|
|
|
Threshold
|
|
|
Target
|
|
|
Maximum
|
|
|
Units
|
|
|
Options
|
|
|
Awards
|
|
|
Option
|
|
Name
|
|
Date
|
|
|
Date(1)
|
|
|
($)
|
|
|
($)
|
|
|
($)
|
|
|
(#)
|
|
|
(#)
|
|
|
(#)
|
|
|
(#)(3)
|
|
|
(#)(4)
|
|
|
($/Sh)
|
|
|
Awards
|
|
|
Philip W. Tomlinson
|
|
|
1-31-06
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
44,033
|
|
|
|
|
|
|
|
|
|
|
|
864,368
|
|
|
|
|
1-31-06
|
|
|
|
1-18-06
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
93,714
|
|
|
|
27.67
|
|
|
|
615,701
|
|
|
|
|
|
|
|
|
|
|
|
|
0
|
|
|
|
652,000
|
|
|
|
1,304,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
James B. Lipham
|
|
|
1-31-06
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
16,495
|
|
|
|
|
|
|
|
|
|
|
|
323,797
|
|
|
|
|
1-31-06
|
|
|
|
1-18-06
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
35,106
|
|
|
|
27.67
|
|
|
|
230,646
|
|
|
|
|
|
|
|
|
|
|
|
|
0
|
|
|
|
282,625
|
|
|
|
565,250
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
M. Troy Woods
|
|
|
1-31-06
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
30,239
|
|
|
|
|
|
|
|
|
|
|
|
593,592
|
|
|
|
|
1-31-06
|
|
|
|
1-18-06
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
64,359
|
|
|
|
27.67
|
|
|
|
422,839
|
|
|
|
|
|
|
|
|
|
|
|
|
0
|
|
|
|
458,000
|
|
|
|
916,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
William A. Pruett
|
|
|
1-31-06
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
19,323
|
|
|
|
|
|
|
|
|
|
|
|
379,310
|
|
|
|
|
1-31-06
|
|
|
|
1-18-06
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
41,125
|
|
|
|
27.67
|
|
|
|
270,191
|
|
|
|
|
|
|
|
|
|
|
|
|
0
|
|
|
|
336,600
|
|
|
|
673,200
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Kenneth L. Tye
|
|
|
1-31-06
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
17,972
|
|
|
|
|
|
|
|
|
|
|
|
352,790
|
|
|
|
|
1-31-06
|
|
|
|
1-18-06
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
38,251
|
|
|
|
27.67
|
|
|
|
251,309
|
|
|
|
|
|
|
|
|
|
|
|
|
0
|
|
|
|
318,750
|
|
|
|
637,500
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
The TSYS Compensation Committee
approved the grant of TSYS restricted stock awards to the named
executive officers on January 31, 2006. The Synovus
Compensation Committee met on January 18, 2006 and approved
the grant of Synovus stock option awards to the named executive
officers effective January 31, 2006.
|
|
(2)
|
|
The amounts shown in this column
represent the minimum, target and maximum amounts payable under
TSYS Executive Cash Bonus Plan for 2006. Awards are paid
in cash and are based upon attainment of adjusted earnings per
share growth goals.
|
|
(3)
|
|
The number set forth in this column
reflects the number of shares of TSYS restricted stock awarded
to each executive during 2006. The restricted stock awards vest
over a three-year period, with one-third of the shares vesting
on each of the first, second and third anniversaries of the date
of grant. Vesting is based upon continued employment through the
vesting date. Dividends are paid on the restricted stock award
shares.
|
|
(4)
|
|
The number set forth in this column
reflects the number of Synovus stock options granted to each
executive during 2006. The stock options vest over a three-year
period, with one-third of the shares vesting on each of the
first, second and third anniversaries of the date of grant.
Vesting is based upon continued employment through the vesting
date.
|
39
OUTSTANDING
EQUITY AWARDS AT FISCAL YEAR-END
December 31, 2006
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option Awards
|
|
|
Stock Awards
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Incentive
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Plan
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Awards:
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number
|
|
|
Equity
|
|
|
|
|
|
|
|
|
|
Incentive
|
|
|
|
|
|
|
|
|
Number
|
|
|
|
|
|
of
|
|
|
Incentive Plan
|
|
|
|
|
|
|
|
|
|
Plan
|
|
|
|
|
|
|
|
|
of
|
|
|
|
|
|
Unearned
|
|
|
Awards:
|
|
|
|
|
|
|
|
|
|
Awards:
|
|
|
|
|
|
|
|
|
Shares
|
|
|
Market
|
|
|
Shares,
|
|
|
Market or
|
|
|
|
Number of
|
|
|
Number of
|
|
|
Number of
|
|
|
|
|
|
|
|
|
or Units
|
|
|
Value of
|
|
|
Units or
|
|
|
Payout Value of
|
|
|
|
Securities
|
|
|
Securities
|
|
|
Securities
|
|
|
|
|
|
|
|
|
of Stock
|
|
|
Shares or
|
|
|
Other
|
|
|
Unearned
|
|
|
|
Underlying
|
|
|
Underlying
|
|
|
Underlying
|
|
|
|
|
|
|
|
|
That
|
|
|
Units of
|
|
|
Rights
|
|
|
Shares, Units or
|
|
|
|
Unexercised
|
|
|
Unexercised
|
|
|
Unexercised
|
|
|
Option
|
|
|
|
|
|
Have
|
|
|
Stock That
|
|
|
That
|
|
|
Other Rights
|
|
|
|
Options
|
|
|
Options
|
|
|
Unearned
|
|
|
Exercise
|
|
|
Option
|
|
|
Not
|
|
|
Have Not
|
|
|
Have Not
|
|
|
That Have Not
|
|
|
|
(#)
|
|
|
(#)
|
|
|
Options
|
|
|
Price
|
|
|
Expiration
|
|
|
Vested
|
|
|
Vested
|
|
|
Vested
|
|
|
Vested
|
|
Name
|
|
Exercisable
|
|
|
Unexercisable
|
|
|
(#)
|
|
|
($)
|
|
|
Date
|
|
|
(#)
|
|
|
($)
|
|
|
(#)
|
|
|
($)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Philip W.
Tomlinson(1)
|
|
|
60,715
|
|
|
|
|
|
|
|
|
|
|
|
18.38
|
|
|
|
06/30/07
|
|
|
|
|
|
|
|
|
|
|
|
59,130
|
|
|
|
1,560,441
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
75,600
|
|
|
|
|
|
|
|
|
|
|
|
20.83
|
|
|
|
01/12/08
|
|
|
|
44,033
|
|
|
|
1,162,039
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
64,787
|
|
|
|
|
|
|
|
|
|
|
|
22.88
|
|
|
|
02/08/09
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
150
|
|
|
|
|
|
|
|
|
|
|
|
19.19
|
|
|
|
07/19/07
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
35,543
|
|
|
|
|
|
|
|
|
|
|
|
18.06
|
|
|
|
01/19/10
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
29,872
|
|
|
|
|
|
|
|
|
|
|
|
26.44
|
|
|
|
01/16/11
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
500,000
|
|
|
|
|
|
|
|
28.99
|
|
|
|
05/09/11
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
38,208
|
|
|
|
|
|
|
|
|
|
|
|
26.50
|
|
|
|
04/28/12
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
58,189
|
|
|
|
|
|
|
|
|
|
|
|
25.70
|
|
|
|
01/20/14
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
65,772
|
|
|
|
|
|
|
|
26.82
|
|
|
|
01/20/15
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
93,714
|
|
|
|
|
|
|
|
27.67
|
|
|
|
01/30/16
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
295,000
|
(2)
|
|
|
|
|
|
|
|
|
|
|
13.17
|
|
|
|
11/02/07
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
James B.
Lipham(3)
|
|
|
19,948
|
|
|
|
|
|
|
|
|
|
|
|
22.88
|
|
|
|
02/08/09
|
|
|
|
4,728
|
|
|
|
124,772
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
11,196
|
|
|
|
|
|
|
|
|
|
|
|
18.06
|
|
|
|
01/19/10
|
|
|
|
16,495
|
|
|
|
435,303
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
15,600
|
|
|
|
|
|
|
|
|
|
|
|
26.44
|
|
|
|
01/16/11
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
400,000
|
|
|
|
|
|
|
|
28.99
|
|
|
|
05/09/11
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
13,302
|
|
|
|
|
|
|
|
|
|
|
|
26.50
|
|
|
|
04/28/12
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
23,047
|
|
|
|
|
|
|
|
|
|
|
|
25.70
|
|
|
|
01/20/14
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12,164
|
|
|
|
|
|
|
|
26.82
|
|
|
|
01/20/15
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
35,106
|
|
|
|
|
|
|
|
27.67
|
|
|
|
01/30/16
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
60,000
|
(2)
|
|
|
|
|
|
|
|
|
|
|
13.17
|
|
|
|
11/02/07
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
M. Troy
Woods(4)
|
|
|
26,568
|
|
|
|
|
|
|
|
|
|
|
|
20.83
|
|
|
|
01/12/08
|
|
|
|
8,696
|
|
|
|
229,487
|
|
|
|
41,739
|
|
|
|
1,101,492
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
24,039
|
|
|
|
|
|
|
|
|
|
|
|
22.88
|
|
|
|
02/08/09
|
|
|
|
30,239
|
|
|
|
798,007
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
13,115
|
|
|
|
|
|
|
|
|
|
|
|
18.06
|
|
|
|
01/19/10
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
17,923
|
|
|
|
|
|
|
|
|
|
|
|
26.44
|
|
|
|
01/16/11
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
400,000
|
|
|
|
|
|
|
|
28.99
|
|
|
|
05/09/11
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
15,283
|
|
|
|
|
|
|
|
|
|
|
|
26.50
|
|
|
|
04/28/12
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
27,578
|
|
|
|
|
|
|
|
|
|
|
|
25.70
|
|
|
|
01/20/14
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
22,371
|
|
|
|
|
|
|
|
26.82
|
|
|
|
01/20/15
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
64,359
|
|
|
|
|
|
|
|
27.67
|
|
|
|
01/30/16
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5,000
|
(2)
|
|
|
|
|
|
|
|
|
|
|
13.17
|
|
|
|
11/02/07
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
William A.
Pruett(5)
|
|
|
31,518
|
|
|
|
|
|
|
|
|
|
|
|
18.38
|
|
|
|
06/30/07
|
|
|
|
5,446
|
|
|
|
143,720
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
27,800
|
|
|
|
|
|
|
|
|
|
|
|
20.83
|
|
|
|
01/12/08
|
|
|
|
19,323
|
|
|
|
509,934
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
24,039
|
|
|
|
|
|
|
|
|
|
|
|
22.88
|
|
|
|
02/08/09
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
150
|
|
|
|
|
|
|
|
|
|
|
|
19.19
|
|
|
|
07/19/07
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
13,115
|
|
|
|
|
|
|
|
|
|
|
|
18.06
|
|
|
|
01/19/10
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
17,923
|
|
|
|
|
|
|
|
|
|
|
|
26.44
|
|
|
|
01/16/11
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
400,000
|
|
|
|
|
|
|
|
28.99
|
|
|
|
05/09/11
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
15,283
|
|
|
|
|
|
|
|
|
|
|
|
26.50
|
|
|
|
04/28/12
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
27,578
|
|
|
|
|
|
|
|
|
|
|
|
25.70
|
|
|
|
01/20/14
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
14,010
|
|
|
|
|
|
|
|
26.82
|
|
|
|
01/20/15
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
41,125
|
|
|
|
|
|
|
|
27.67
|
|
|
|
01/30/16
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
34,700
|
(2)
|
|
|
|
|
|
|
|
|
|
|
13.17
|
|
|
|
11/02/07
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Kenneth L.
Tye(6)
|
|
|
10,200
|
|
|
|
|
|
|
|
|
|
|
|
22.88
|
|
|
|
02/08/09
|
|
|
|
4,810
|
|
|
|
126,936
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10,503
|
|
|
|
|
|
|
|
|
|
|
|
18.06
|
|
|
|
01/19/10
|
|
|
|
17,972
|
|
|
|
474,281
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
15,268
|
|
|
|
|
|
|
|
|
|
|
|
26.44
|
|
|
|
01/16/11
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
400,000
|
|
|
|
|
|
|
|
28.99
|
|
|
|
05/09/11
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
13,019
|
|
|
|
|
|
|
|
|
|
|
|
26.50
|
|
|
|
04/28/12
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
23,490
|
|
|
|
|
|
|
|
|
|
|
|
25.70
|
|
|
|
01/20/14
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12,374
|
|
|
|
|
|
|
|
26.82
|
|
|
|
01/20/15
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
38,251
|
|
|
|
|
|
|
|
27.67
|
|
|
|
01/30/16
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
40
|
|
|
(1)
|
|
With respect to
Mr. Tomlinsons unexercisable stock options, the
500,000 share grant vests on May 10, 2008, the
65,772 share grant vests on January 21, 2008, and the
93,714 share grant vests in equal installments of one-third
each on January 31, 2007, January 31, 2008 and
January 31, 2009. The 65,772 and 93,714 share grants
also vest upon retirement, death or disability, a change of
control, or upon an involuntary termination not for cause. With
respect to Mr. Tomlinsons 44,033 share
restricted stock award that has not vested, the award vests in
equal installments of one-third each on January 31, 2007,
January 31, 2008 and January 31, 2009. In addition,
the performance-based restricted stock award of
73,913 shares granted to Mr. Tomlinson in 2005 vests
as follows: the restricted shares have seven one-year
performance periods
(2005-2011).
During each performance period, the Compensation Committee
establishes an earnings per share goal and, if such goal is
attained during any performance period, 20% of the restricted
shares will vest. As of December 31, 2006, 59,130 of the
73,913 shares have not vested.
|
|
(2)
|
|
Options pertain to shares of TSYS
stock.
|
|
(3)
|
|
With respect to
Mr. Liphams unexercisable stock options, the
400,000 share grant vests on May 10, 2008, the
12,164 share grant vests on January 21, 2008, and the
35,106 share grant vests in equal installments of one-third
each on January 31, 2007, January 31, 2008 and
January 31, 2009. The 12,164 and 35,106 share grants
also vest upon retirement, death or disability, a change of
control, or upon an involuntary termination not for cause. With
respect to Mr. Liphams restricted stock awards that
have not vested, the 4,728 restricted share grant vests on
January 21, 2008, and the 16,495 restricted share grant
vests in three equal installments on January 31, 2007,
January 31, 2008 and January 31, 2009.
|
|
(4)
|
|
With respect to
Mr. Woods unexercisable stock options, the
400,000 share grant vests on May 10, 2008, the
22,371 share grant vests on January 21, 2008, and the
64,359 share grant vests in equal installments of one-third
each on January 31, 2007, January 31, 2008 and
January 31, 2009. The 22,371 and 64,359 share grants
also vest upon retirement, death or disability, a change of
control, or upon an involuntary termination not for cause. With
respect to Mr. Woods restricted stock awards that
have not vested, the 8,696 restricted share grant vests on
January 21, 2008, and the 30,239 restricted share grant
vests in three equal installments on January 31, 2007,
January 31, 2008 and January 31, 2009. In addition,
the performance-based restricted stock award of
52,174 shares granted to Mr. Woods in 2005 vests as
follows: the restricted shares have seven one-year performance
periods
(2005-2011).
During each performance period, the Compensation Committee
establishes an earnings per share goal and, if such goal is
attained during any performance period, 20% of the restricted
shares will vest. As of December 31, 2006, 41,739 of the
52,174 shares have not vested.
|
|
(5)
|
|
With respect to
Mr. Pruetts unexercisable stock options, the
400,000 share grant vests on May 10, 2008, the
14,010 share grant vests on January 21, 2008, and the
41,125 share grant vests in equal installments of one-third
each on January 31, 2007, January 31, 2008 and
January 31, 2009. The 14,010 and 41,125 share grants
also vest upon retirement, death or disability, a change of
control, or upon an involuntary termination not for cause. With
respect to Mr. Pruetts restricted stock awards that
have not vested, the 5,446 restricted share grant vests on
January 21, 2008, and the 19,323 restricted share grant
vests in three equal installments on January 31, 2007,
January 31, 2008 and January 31, 2009.
|
|
(6)
|
|
With respect to Mr. Tyes
unexercisable stock options, the 400,000 share grant vests
on May 10, 2008, the 12,374 share grant vests on
January 21, 2008, and the 38,251 share grant vests in
equal installments of one-third each on January 31, 2007,
January 31, 2008 and January 31, 2009. The 12,374 and
38,251 share grants also vest upon retirement, death or
disability, a change of control, or upon an involuntary
termination not for cause. With respect to Mr. Tyes
restricted stock awards that have not vested, the 4,810
restricted share grant vests on January 21, 2008 and the
17,972 restricted share grant vests in three equal installments
on January 31, 2007, January 31, 2008 and
January 31, 2009.
|
41
POTENTIAL
PAYOUTS UPON TERMINATION OR
CHANGE-IN-CONTROL
TSYS has entered into change of control agreements with its
named executive officers. Under these agreements, benefits are
payable upon the occurrence of two events (also known as a
double trigger). The first event is a change of
control and the second event is the actual or constructive
termination of the executive within two years following the date
of the change of control. Change of control is
defined, in general, as the acquisition of 20% of Synovus
or TSYS stock by any person as defined under
the Securities Exchange Act, turnover of more than one-third of
the Board of Directors of Synovus or TSYS, or a merger of
Synovus or TSYS with another company if the former shareholders
of Synovus or TSYS own less than 60% of the surviving company. A
spin-off of TSYS stock by Synovus or a transaction in which
Synovus continues to own more than 50% of TSYS stock are
excluded from the definition of change of control. For purposes
of these agreements, a constructive termination is a material
adverse reduction in an executives position, duties or
responsibilities, relocation of the executive more than
35 miles from where the executive is employed, or a
material reduction in the executives base salary, bonus or
other employee benefit plans.
In the event payments are triggered under the agreements, each
executive will receive three times his or her base salary as in
effect prior to the termination, a percentage of his or her base
salary equal to the average short-term incentive award
percentage earned over the previous three calendar years prior
to the termination, as well as a pro rata short-term incentive
award calculated at target for the year of termination. These
amounts are paid to the executive in a single lump-sum cash
payment. Each executive will also receive health and welfare
benefits for a three year period following the second triggering
event. In addition, each executive will receive an amount that
is designed to
gross-up
the executive for any excise taxes that are payable by the
executive as a result of the payments under the agreement, but
only if the total change of control payments to the executive
exceed 110% of the applicable IRS cap. The following table
quantifies the estimated amounts that would be payable under the
change of control agreements, assuming the triggering events
occurred on December 31, 2006.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average
|
|
|
Pro-Rata
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3-Yrs
|
|
|
Target
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Short-Term
|
|
|
Short-Term
|
|
|
Health &
|
|
|
Stock
|
|
|
Stock
|
|
|
|
|
|
|
|
|
|
3x
|
|
|
Incentive
|
|
|
Incentive
|
|
|
Welfare
|
|
|
Award
|
|
|
Option
|
|
|
Excise Tax
|
|
|
|
|
|
|
Base Salary
|
|
|
Award
|
|
|
Award
|
|
|
Benefits
|
|
|
Vesting
|
|
|
Vesting(1)
|
|
|
Gross-up(2)
|
|
|
Total
|
|
|
|
($)
|
|
|
($)
|
|
|
($)
|
|
|
($)
|
|
|
($)
|
|
|
($)
|
|
|
($)
|
|
|
($)
|
|
|
Philip W. Tomlinson
|
|
|
1,956,000
|
|
|
|
706,312
|
|
|
|
652,000
|
|
|
|
35,280
|
|
|
|
2,722,480
|
|
|
|
148,236
|
|
|
|
489,965
|
|
|
|
6,710,273
|
|
James B. Lipham
|
|
|
997,500
|
|
|
|
259,915
|
|
|
|
282,625
|
|
|
|
35,280
|
|
|
|
560,075
|
|
|
|
50,167
|
|
|
|
|
|
|
|
2,185,562
|
|
M. Troy Woods
|
|
|
1,374,000
|
|
|
|
473,251
|
|
|
|
458,000
|
|
|
|
35,280
|
|
|
|
2,128,986
|
|
|
|
101,653
|
|
|
|
264,478
|
|
|
|
4,835,648
|
|
William A. Pruett
|
|
|
1,188,000
|
|
|
|
309,553
|
|
|
|
336,600
|
|
|
|
35,280
|
|
|
|
653,654
|
|
|
|
58,664
|
|
|
|
|
|
|
|
2,581,751
|
|
Kenneth L. Tye
|
|
|
1,125,000
|
|
|
|
293,138
|
|
|
|
318,750
|
|
|
|
35,280
|
|
|
|
601,217
|
|
|
|
54,282
|
|
|
|
185,272
|
|
|
|
2,612,939
|
|
|
|
|
(1)
|
|
Estimated by multiplying number of
options that vest upon change of control by difference in fair
market value on December 31, 2006 and exercise price. Stock
options also vest upon retirement, death, disability or
involuntary termination of employment not for cause.
|
|
(2)
|
|
Estimated using entire amount in
Stock Award Vesting and Stock Option
Vesting columns and dividing the estimated excise tax
amount by 43.55%, which percentage is designed to calculate the
amount of
gross-up
payment necessary so the executive is placed in the same
position as though the excise tax did not apply. No
gross-up
payment is made if change of control payments do not exceed
applicable IRS cap by 110%.
|
Executives who receive these benefits are subject to a
confidentiality obligation with respect to secret and
confidential information about TSYS. There are no provisions
regarding a waiver of this confidentiality obligation. No
perquisites or other personal benefits are payable under the
change of control agreements.
The Non-Qualified Deferred Compensation Table sets forth the
amount and form of deferred compensation benefits that the named
executive officers would be entitled to receive upon their
termination of employment.
42
OPTION
EXERCISES AND STOCK VESTED
for the Year Ended December 31, 2006
The following table sets forth the number and corresponding
value realized during 2006 with respect to TSYS and Synovus
stock options that were exercised and TSYS restricted shares
that vested for each named executive officer.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option Awards
|
|
|
Stock Awards
|
|
|
|
Number of Shares
|
|
|
|
|
|
Number of
|
|
|
|
|
|
|
Acquired on
|
|
|
Value Realized
|
|
|
Shares Acquired
|
|
|
Value Realized
|
|
|
|
Exercise
|
|
|
on Exercise
|
|
|
on Vesting
|
|
|
on Vesting
|
|
Name
|
|
(#)
|
|
|
($)
|
|
|
(#)
|
|
|
($)
|
|
|
Philip W. Tomlinson
|
|
|
25,000
|
|
|
|
724,250
|
|
|
|
14,783
|
|
|
|
294,921
|
|
|
|
|
150
|
|
|
|
4,160
|
|
|
|
|
|
|
|
|
|
|
|
|
125,000
|
|
|
|
2,803,750
|
|
|
|
|
|
|
|
|
|
James B. Lipham
|
|
|
24,980
|
|
|
|
724,170
|
|
|
|
|
|
|
|
|
|
|
|
|
22,032
|
|
|
|
651,927
|
|
|
|
|
|
|
|
|
|
|
|
|
150
|
|
|
|
4,170
|
|
|
|
|
|
|
|
|
|
|
|
|
150
|
|
|
|
4,170
|
|
|
|
|
|
|
|
|
|
|
|
|
50,000
|
|
|
|
1,123,500
|
|
|
|
|
|
|
|
|
|
|
|
|
50,000
|
|
|
|
1,162,500
|
|
|
|
|
|
|
|
|
|
M. Troy Woods
|
|
|
150
|
|
|
|
4,271
|
|
|
|
10,435
|
|
|
|
208,178
|
|
|
|
|
150
|
|
|
|
4,269
|
|
|
|
|
|
|
|
|
|
|
|
|
50,000
|
|
|
|
1,121,500
|
|
|
|
|
|
|
|
|
|
William A. Pruett
|
|
|
150
|
|
|
|
4,175
|
|
|
|
|
|
|
|
|
|
Kenneth L. Tye
|
|
|
10,800
|
|
|
|
296,784
|
|
|
|
|
|
|
|
|
|
|
|
|
150
|
|
|
|
4,199
|
|
|
|
|
|
|
|
|
|
|
|
|
150
|
|
|
|
4,199
|
|
|
|
|
|
|
|
|
|
NONQUALIFIED
DEFERRED COMPENSATION
for the Year Ended December 31, 2006
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Executive
|
|
|
Registrant
|
|
|
Aggregate
|
|
|
Aggregate
|
|
|
Aggregate
|
|
|
|
Contributions
|
|
|
Contributions
|
|
|
Earnings in
|
|
|
Withdrawals/
|
|
|
Balance at
|
|
|
|
in Last FY
|
|
|
in Last FY
|
|
|
Last FY
|
|
|
Distributions
|
|
|
Last FYE
|
|
Name
|
|
($)
|
|
|
($)
|
|
|
($)(1)
|
|
|
($)
|
|
|
($)
|
|
|
Philip W. Tomlinson
|
|
|
|
|
|
|
199,080
|
|
|
|
62,565
|
|
|
|
|
|
|
|
713,550
|
|
James B. Lipham
|
|
|
|
|
|
|
60,275
|
|
|
|
18,221
|
|
|
|
|
|
|
|
206,539
|
|
M. Troy Woods
|
|
|
|
|
|
|
122,800
|
|
|
|
32,890
|
|
|
|
|
|
|
|
348,206
|
|
William A. Pruett
|
|
|
|
|
|
|
77,010
|
|
|
|
11,344
|
|
|
|
|
|
|
|
238,238
|
|
Kenneth L. Tye
|
|
|
|
|
|
|
66,500
|
|
|
|
21,894
|
|
|
|
|
|
|
|
218,938
|
|
|
|
|
|
|
|
(1)
|
|
The amount reported in this column
is reported in the Summary Compensation Table for 2006 as
All Other Compensation.
|
The Deferred Plan replaces benefits lost by executives under the
qualified retirement plans due to IRS limits. Executives are
also permitted to defer all or a portion of their base salary or
short-term incentive award, although no named executive officers
did so for the last fiscal year. Amounts deferred under the
Deferred Plan are deposited into a rabbi trust, and executives
are permitted to invest their accounts in mutual funds that are
generally the same as the mutual funds available in the
qualified 401(k) plan. Deferred Plan participants may elect to
withdraw their accounts as of a specified date or upon their
termination of employment. Distributions can be made in a single
lump sum or in annual installments over a 2-10 year period,
as elected by the executive.
43
SHAREHOLDER
PROPOSALS AND NOMINATIONS
In order for a shareholder proposal to be considered for
inclusion in TSYS Proxy Statement for the 2008 Annual
Meeting of Shareholders, the written proposal must be received
by the Corporate Secretary of TSYS at the address below. The
Corporate Secretary must receive the proposal no later than
November 24, 2007. The proposal will also need to comply
with the SECs regulations under
Rule 14a-8
regarding the inclusion of shareholder proposals in company
sponsored proxy materials. Proposals should be addressed to:
Corporate Secretary
Total System Services, Inc.
1111 Bay Avenue, Suite 500
Columbus, Georgia 31901
For a shareholder proposal that is not intended to be included
in TSYS Proxy Statement for the 2008 Annual Meeting of
Shareholders, or if you want to nominate a person for election
as a director, you must provide written notice to the Corporate
Secretary at the address above. The Secretary must receive this
notice not earlier than December 24, 2007 and not later
than the close of business on the 10th day following the
day on which public disclosure is made announcing that the
distribution of TSYS shares owned by Synovus to the shareholders
of Synovus has been completed.
The notice of a proposed item of business must provide
information as required in the Bylaws of TSYS which, in general,
require that the notice include for each matter a brief
description of the matter to be brought before the meeting; the
reason for bringing the matter before the meeting; your name,
address, and number of shares you own; and any material interest
you have in the proposal.
The notice of a proposed director nomination must provide
information as required in the Bylaws of TSYS which, in general,
require that the notice of a director nomination include your
name, address and the number of shares you own; the name, age,
business address, residence address and principal occupation of
the nominee; and the number of shares beneficially owned by the
nominee. It must also include the information that would be
required to be disclosed in the solicitation of proxies for the
election of a director under federal securities laws. You must
submit the nominees consent to be elected and to serve. A
copy of the bylaw requirements will be provided upon request to
the Corporate Secretary at the address above.
44
Solicitation
of Proxies
TSYS will pay the cost of soliciting proxies. Proxies may be
solicited on behalf of TSYS by directors, officers or employees
by mail, in person or by telephone, facsimile or other
electronic means. TSYS will reimburse brokerage firms, nominees,
custodians and fiduciaries for their out-of-pocket expenses for
forwarding proxy materials to beneficial owners.
Householding
The Securities and Exchange Commissions proxy rules permit
companies and intermediaries, such as brokers and banks, to
satisfy delivery requirements for proxy statements with respect
to two or more shareholders sharing the same address by
delivering a single proxy statement to those shareholders. This
method of delivery, often referred to as householding, should
reduce the amount of duplicate information that shareholders
receive and lower printing and mailing costs for companies. TSYS
is not householding proxy materials for its shareholders of
record in connection with the Special Meeting. However, we have
been notified that certain intermediaries will household proxy
materials. If you hold your shares of TSYS stock through a
broker or bank that has determined to household proxy materials:
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|
|
|
|
Only one Proxy Statement will be delivered to multiple
shareholders sharing an address unless you notify your broker or
bank to the contrary;
|
|
|
|
You can contact TSYS by calling
(706) 649-5220
or by writing Investor Relations Manager, Total System Services,
Inc., P.O. Box 2567, Columbus, Georgia 31902-2567 to
request a separate copy of the Proxy Statement for the Special
Meeting and for future meetings or you can contact your bank or
broker to make a similar request; and
|
|
|
|
You can request delivery of a single copy of Proxy Statements
from your bank or broker if you share the same address as
another TSYS shareholder and your bank or broker has determined
to household proxy materials.
|
The above Notice of Special Meeting and Proxy Statement are sent
by order of the TSYS Board of Directors.
Philip W. Tomlinson
Chairman of the Board and
Chief Executive Officer
November 5, 2007
45
AMENDED
AND RESTATED
ARTICLES OF INCORPORATION
OF
TOTAL SYSTEM SERVICES, INC.
ARTICLE I
The name of the corporation is Total System Services, Inc.
ARTICLE II
The corporation shall have perpetual duration.
ARTICLE III
The corporation is organized pursuant to the provisions of the
Georgia Business Corporation Code.
ARTICLE IV
The corporation is a corporation for profit and shall have the
purpose of engaging in any lawful business.
ARTICLE V
The maximum number of shares of capital stock that the
corporation shall be authorized to have outstanding at any time
shall be 700,000,000 shares, of which
600,000,000 shares shall be common stock of the par value
of $.l0 per share and 100,000,000 shares shall be preferred
stock, par value $.10 per share. The amount of capital with
which the corporation shall begin business shall not be less
than $500. The corporation may acquire its own shares and shares
so acquired shall become treasury shares.
Subject to all of the rights of any outstanding shares of
preferred stock as expressly provided herein, by law or by the
Board of Directors pursuant to this Article V, the common
stock of the corporation shall possess all such rights and
privileges as are afforded to capital stock by applicable law in
the absence of any express grant of rights or privileges
provided for herein, including, but not limited to, the
following rights and privileges:
(a) Dividends may be declared and paid or set apart for
payment upon the common stock out of any assets or funds of the
corporation legally available for the payment of dividends;
(b) The holders of common stock shall have the right to
vote for the election of directors and on all other matters
requiring shareholder action, each share being entitled to one
vote; and
(c) Upon the voluntary or involuntary liquidation,
dissolution or
winding-up
of the corporation, the net assets of the corporation available
for distribution shall be distributed pro rata to the holders of
the common stock in accordance with their respective rights and
interests.
In accordance with the provisions of the Georgia Business
Corporation Code, the Board of Directors of the corporation may
determine the preferences, limitations, and relative rights of
(1) any class of preferred stock before the issuance of any
shares of that class or (2) one or more series within a
class of preferred stock, and designate the number of shares
within that series, before the issuance of any shares of that
series.
ARTICLE VI
No shareholder of the corporation shall have any preemptive
right to purchase, subscribe for or otherwise acquire any shares
of stock of any class of the corporation, or any series of any
class, or any options, rights or warrants to purchase any shares
of any class, or any series of any class, or any other of the
securities of the corporation convertible into or carrying an
option to purchase shares of any class, or any series of any
class, whether now or hereafter authorized, and the Board of
Directors of the corporation may authorize the issuance of
shares of stock of any class, and series of the same class, or
options, rights or warrants to purchase shares of any class, or
any series of any class, or any securities
A-1-1
convertible into or carrying an option to purchase shares of any
class, or any series of any class, without offering such issue
of shares, options, rights, warrants or other securities, either
in whole or in part, to the shareholders of the corporation.
ARTICLE VII
The Board of Directors of the corporation may authorize the
issuance of bonds, debentures and other evidences of
indebtedness of the corporation and may fix all of the terms
thereof, including, without limitation, the convertibility
thereof into shares of stock of the corporation of any class, or
any series of the same class.
ARTICLE VIII
Section 1. The number of members of the
Board of Directors of the corporation shall be fixed from time
to time solely by the action of the Board of Directors. The
Board of Directors of the corporation shall be divided into
three classes, with each class to be as nearly equal in number
as possible. At the first annual meeting of the shareholders of
the corporation, all members of the Board of Directors shall be
elected with the terms of office of directors comprising the
first class to expire at the first annual meeting of the
shareholders of the corporation after their election, the terms
of office of directors comprising the second class to expire at
the second annual meeting of the shareholders of the corporation
after their election and the terms of office of directors
comprising the third class to expire at the third annual meeting
of the shareholders of the corporation after their election, and
as their terms of office expire, the directors of each class
will be elected to hold office until the third succeeding annual
meeting of the shareholders of the corporation after their
election.
Section 2. Directors of the corporation
may be removed from office only for cause by the affirmative
vote of at least
662/3%
of the total issued and outstanding shares of the
corporations common stock, except that if a Director is
elected by a different voting group of shareholders
(i) only the shareholders of such voting group may
participate in the vote to remove such Director and
(ii) the requisite vote shall be as set forth in the
articles of amendment setting forth the preferences, limitations
and relative rights of the relevant class or series of preferred
stock.
ARTICLE IX
A special meeting of the shareholders of the corporation may be
called only (i) by the Board of Directors or (ii) upon
the action of a majority of the total number of all votes
entitled to be cast on any issue proposed to be considered at
the proposed special meeting.
ARTICLE X
Section 1. Alternative
Stakeholders. In discharging the duties of their
respective positions and in determining what is believed to be
in the best interests of the corporation, the Board of
Directors, committees thereof and individual directors, in
addition to considering the effects of any action on the
corporation and its shareholders, may consider the interests of
employees, customers, suppliers, and creditors of the
corporation and its subsidiaries, the communities in which
offices or other establishments of the corporation and its
subsidiaries are located, and all other factors such directors
consider pertinent; provided, however, that this provision shall
be deemed solely to grant discretionary authority to the
directors and shall not be deemed to provide to any constituency
any right to be considered.
Section 2. Appropriate
Actions. If the Board of Directors determines
that any proposed business combination should be rejected, it
may take any lawful action to accomplish its purpose including,
but not limited to, any or all of the following:
(i) advising shareholders not to accept the offer;
(ii) litigation against the offeror; (iii) filing
complaints with governmental and regulatory authorities;
(iv) acquiring the corporations securities;
(v) selling or otherwise issuing authorized but unissued
securities of the corporation or treasury stock or granting
options or rights with respect thereto; (vi) acquiring a
company
A-1-2
to create an antitrust or other regulatory problem for the
offeror; and (vii) soliciting a more favorable offer from
another individual or entity.
ARTICLE XI
No director shall have personal liability to the corporation or
its shareholders for monetary damages for any action taken, or
any failure to take any action, as a director, except liability,
to the extent provided by applicable law: (i) for any
appropriation, in violation of his or her duties, of any
business opportunity of the corporation; (ii) for acts or
omissions which involve intentional misconduct or a knowing
violation of law; (iii) for the types of liability for
which the director is found liable pursuant to
Section 14-2-832
of the Georgia Business Corporation Code, or any amendment
thereto or successor provision thereto; or (iv) for any
transaction from which the director received an improper
personal benefit. This provision shall not eliminate or limit
the liability of a director for any act or omission occurring
prior to July 1, 1987. No amendment to or repeal of this
provision shall apply to or have any effect on the liability or
alleged liability of any director of the corporation for or with
respect to any acts or omissions of such director occurring
prior to such amendment.
A-1-3
AMENDED
AND RESTATED
ARTICLES OF
INCORPORATION
OF
TOTAL SYSTEM SERVICES, INC., AS AMENDED
ARTICLE I
The name of the corporation is Total System Services, Inc.
ARTICLE II
The corporation shall have perpetual duration.
ARTICLE III
The corporation is organized pursuant to the provisions of the
Georgia Business Corporation Code.
ARTICLE IV
The corporation is a corporation for profit and is
organized for the following general purposes:
(a) To engage in providing data processing and data
transmission services, data bases and facilities (including data
processing and data transmission hardware, software,
documentation and operating personnel) for the internal
operations of CB&T Bancshares, Inc., and its subsidiaries,
as a subsidiary corporation of Columbus Bank and Trust Company
as defined under the provisions of the Financial Institutions
Code of Georgia;
(b) To engage in providing data processing and
transmission services, facilities and data bases, or access to
such services, facilities and data bases, to others by
technologically feasible means, where the data to be processed
and transmitted is of a financial, banking or economic nature
(specifically including bank card transactions), as a subsidiary
corporation of Columbus Bank and Trust Company as defined
under the provisions of the Financial Institutions Code of
Georgia;
(c) To engage in providing purchasing services for
CB&T Bancshares, Inc. and its subsidiaries, including
Columbus Bank and Trust Company, as a subsidiary
corporation of Columbus Bank and Trust Company as defined
under the provisions of the Financial Institutions Code of
Georgia;
(d) To purchase, own, maintain and repair personal
and real property as may be necessary
and/or
desirable to carry on its activities relating to the foregoing
in connection with its existence as a subsidiary corporation of
Columbus Bank and Trust Company as defined under the
provisions of the Financial Institutions Code of Georgia; and(e)
To engage in any lawful business or activity relating to the
foregoing in connection with its existence as a subsidiary
corporation of Columbus Bank and Trust Company as defined
under the provisions of the Financial Institutions Code of
Georgia.shall have the purpose of engaging in any
lawful business.
ARTICLE V
The maximum number of shares of capital stock that the
corporation shall be authorized to have outstanding at any time
shall be 700,000,000 shares, of which
600,000,000 shares. The sole class of
capital stock of the corporation shall be common stock
of the par value of $.l0 per share and
100,000,000 shares shall be preferred stock, par value
$.10 per share; and
the. The amount of capital with which the
corporation shall begin business shall not be less than $500.
The corporation may acquire its own shares and shares so
acquired shall become treasury shares.
Subject to all of the rights of any outstanding
shares of preferred stock as expressly provided herein, by law
or by the Board of Directors pursuant to this Article V,
the common stock of the corporation shall possess all such
rights and privileges as are afforded to capital stock by
applicable law in the absence of any express grant of rights or
privileges provided for herein, including, but not limited to,
the following rights and privileges:
A-2-1
(a) Dividends may be declared and paid or set apart for
payment upon the common stock out of any assets or funds of the
corporation legally available for the payment of
dividends;
(b) The holders of common stock shall have the right to
vote for the election of directors and on all other matters
requiring shareholder action, each share being entitled to one
vote; and
(c) Upon the voluntary or involuntary liquidation,
dissolution or
winding-up
of the corporation, the net assets of the corporation available
for distribution shall be distributed pro rata to the holders of
the common stock in accordance with their respective rights and
interests.
In accordance with the provisions of the Georgia Business
Corporation Code, the Board of Directors of the corporation may
determine the preferences, limitations, and relative rights of
(1) any class of preferred stock before the issuance of any
shares of that class or (2) one or more series within a
class of preferred stock, and designate the number of shares
within that series, before the issuance of any shares of that
series.
ARTICLE VI
No shareholder of the corporation shall have any preemptive
right to purchase, subscribe for or otherwise acquire any shares
of stock of any class of the corporation, or any series of any
class, or any options, rights or warrants to purchase any shares
of any class, or any series of any class, or any other of the
securities of the corporation convertible into or carrying an
option to purchase shares of any class, or any series of any
class, whether now or hereafter authorized, and the Board of
Directors of the corporation may authorize the issuance of
shares of stock of any class, and series of the same class, or
options, rights or warrants to purchase shares of any class, or
any series of any class, or any securities convertible into or
carrying an option to purchase shares of any class, or any
series of any class, without offering such issue of shares,
options, rights, warrants or other securities, either in whole
or in part, to the shareholders of the corporation.
ARTICLE VII
The Board of Directors of the corporation may authorize the
issuance of bonds, debentures and other evidences of
indebtedness of the corporation and may fix all of the terms
thereof, including, without limitation, the convertibility
thereof into shares of stock of the corporation of any class, or
any series of the same class.
ARTICLE VIII
Section 1. The number of members of
the Board of Directors of the corporation shall be fixed from
time to time solely by the action of the Board of
Directors. The Board of Directors of the
corporation shall be divided into three classes, with each class
to be as nearly equal in number as possible. At the first annual
meeting of the shareholders of the corporation, all members of
the Board of Directors shall be elected with the terms of office
of directors comprising the first class to expire at the first
annual meeting of the shareholders of the corporation after
their election, the terms of office of directors comprising the
second class to expire at the second annual meeting of the
shareholders of the corporation after their election and the
terms of office of directors comprising the third class to
expire at the third annual meeting of the shareholders of the
corporation after their election, and as their terms of office
expire, the directors of each class will be elected to hold
office until the third succeeding annual meeting of the
shareholders of the corporation after their election.
ARTICLE IX
The shareholder vote or action required to:
(i) approve any merger or consolidation of the corporation
with or into any other corporation, and the sale, lease,
exchange or other disposition of all, or substantially all, of
the assets of the corporation to or with any other corporation,
person or entity, with respect to which the approval of the
corporations shareholders is required by the provisions of
the Georgia Business Corporation Code; (ii) fix, from time
to time, the number of members of the Board of Directors of the
corporation; (iii) remove a member of the Board of
Directors of the corporation; (iv) call
A-2-2
a special meeting of the shareholders of the
corporation; and (v) alter, delete or rescind any
provisions of the corporations Articles of Incorporation,
shall be 80% of the total issued and outstanding shares of the
corporations common stock of the par value of $.10 per
share.
Section 2. Directors
of the corporation may be removed from office only for cause by
the affirmative vote of at least
662/3%
of the total issued and outstanding shares of the
corporations common stock, except that if a Director is
elected by a different voting group of shareholders
(i) only the shareholders of such voting group may
participate in the vote to remove such Director and
(ii) the requisite vote shall be as set forth in the
articles of amendment setting forth the preferences, limitations
and relative rights of the relevant class or series of preferred
stock.
ARTICLE X
The initial registered office of the corporation shall
be 1000 Fifth Avenue, Columbus, Georgia 31901, and the
initial registered agent of the corporation at said address
shall be Kenneth E. Evans.
ARTICLE IX
ARTICLE XI
The initial Board of Directors of the corporation shall
consist of fifteen members, whose names and addresses are as
follows:
|
|
|
Name
|
|
Address
|
|
Richard H. Bickerstaff
|
|
6345 Mountainview Drive
Columbus, Georgia 31904
|
James H. Blanchard
|
|
6200 Mountainview Drive
Columbus, Georgia 31904
|
Lovick P. Corn
|
|
2500 Fairway Avenue
Columbus, Georgia 31906
|
C.W. Curry
|
|
2814 Techwood Drive
Columbus, Georgia 31906
|
Gardiner W. Garrard, Jr.
|
|
6551 Green Island Drive
Columbus, Georgia 31904
|
John P. Illges, III
|
|
6301 Waterford Road
Columbus, Georgia 31904
|
G. Gunby Jordan
|
|
666 Barschall Drive
Columbus, Georgia 31904
|
William M. McVay
|
|
3359 Windemere Street
Columbus, Georgia 31904
|
H. Lynn Page
|
|
421 Westmoreland Road
Columbus, Georgia 31904
|
Edwin W. Rothschild
|
|
2422 Craigston Drive
Columbus, Georgia 31906
|
Philip W. Tomlinson
|
|
6044 Seaton Drive
Columbus, Georgia 31904
|
William B. Turner
|
|
3132 Hilton Avenue
Columbus, Georgia 31906
|
Richard W. Ussery
|
|
6160 Seaton Drive
Columbus, Georgia 31905
|
George C. Woodruff, Jr.
|
|
6201 Waterford Road
Columbus, Georgia 31904
|
James D. Yancey
|
|
612 Ascot Way
Columbus, Georgia 31904
|
A-2-3
A special meeting of the shareholders of the
corporation may be called only (i) by the Board of
Directors or (ii) upon the action of a majority of the
total number of all votes entitled to be cast on any issue
proposed to be considered at the proposed special
meeting.
ARTICLE XII
The name and address of the incorporator of the
corporation is J. Quentin Davidson, Jr., 828 Broadway,
Columbus, Georgia 31901.
Any action required by law or permitted to be taken at
any shareholders meeting may be taken without a meeting
if, and only if, written consent, setting forth the action so
taken, shall be signed by all of the shareholders of record of
common stock of the corporation entitled to vote with respect to
the subject matter thereof. Such consent shall have the same
force and effect as a unanimous vote of the shareholders and
shall be filed with the Secretary and recorded in the Minute
Book of the corporation.
(a) The Board of Directors of the corporation may,
if it deems it advisable, oppose a tender or other offer for the
corporations securities, whether the offer is in cash or
in the securities of a corporation or otherwise. When
considering whether to oppose an offer, the Board of Directors
may, but is not legally obligated to, consider any pertinent
issues; by way of illustration, but not of limitation, the Board
of Directors may, but shall not be legally obligated to,
consider all or any of the following:
(i) whether the offer price is acceptable based on
the historical and present operating results or financial
condition of the corporation;
(ii) whether a more favorable price could be
obtained for the corporations securities in the
future;
(iii) the impact which an acquisition of the
corporation would have on the employees and customers of the
corporation and its subsidiaries and the communities which they
serve;
(iv) the reputation and business practices of the
offeror and its management and affiliates as they would affect
the employees and customers of the corporation and its
subsidiaries and the future value of the corporations
stock;
(v) the value of the securities, if any, that the
offeror is offering in exchange for the corporations
securities, based on an analysis of the worth of the corporation
as compared to the offeror or any other entity whose securities
are being offered; and
(vi) any antitrust or other legal or regulatory
issues that are raised by the offer.
ARTICLE X
Section 1. Alternative
Stakeholders. In discharging the duties of their respective
positions and in determining what is believed to be in the best
interests of the corporation, the Board of Directors, committees
thereof and individual directors, in addition to considering the
effects of any action on the corporation and its shareholders,
may consider the interests of employees, customers, suppliers,
and creditors of the corporation and its subsidiaries, the
communities in which offices or other establishments of the
corporation and its subsidiaries are located, and all other
factors such directors consider pertinent; provided, however,
that this provision shall be deemed solely to grant
discretionary authority to the directors and shall not be deemed
to provide to any constituency any right to be
considered.
Section 2. (b)
Appropriate Actions. If the Board of
Directors determines that an offer any
proposed business combination should be rejected, it may
take any lawful action to accomplish its purpose including, but
not limited to, any or all of the following: (i) advising
shareholders not to accept the offer; (ii) litigation
against the offeror; (iii) filing complaints with
governmental and regulatory authorities; (iv) acquiring the
corporations securities; (v) selling or otherwise
issuing authorized but unissued securities of the corporation or
treasury stock or granting options or rights with respect
thereto; (vi) acquiring a company to create an antitrust or
other regulatory problem for the offeror; and
(vii) soliciting a more favorable offer from another
individual or entity.
A-2-4
ARTICLE XI
ARTICLE XIII
No director shall
behave
personal
ly
liab
i
le
ity
to the corporation or its shareholders for monetary damages
for any
breach of duty of care or other duty.
Notwithstanding the foregoing, a director shall be
liableaction taken, or any failure to take any
action, as a director, except liability, to the extent
provided by applicable law: (i) for
theany appropriation
, in
violation of his
or her duties
, of any
business opportunity of the corporation; (ii) for acts or
omissions
not in good faith or which involve
intentional misconduct or a knowing violation of law;
(iii) for
any action the types of
liability for which the director
could
be is found liable pursuant to
Section 14-2-154832
of the
Official Code of Georgia
Annotated Business Corporation Code,
or any amendment thereto or successor provision thereto; or
(iv) for any transaction from which the director
derivedreceived an improper
personal benefit. This provision shall not eliminate or limit
the liability of a director for any act or omission occurring
prior to July 1, 1987. No amendment to or repeal of this
provision shall apply to or have any effect on the liability or
alleged liability of any director of the corporation for or with
respect to any acts or omissions of such director occurring
prior to such amendment.
A-2-5
As Amended
and Restated
Effective
[ ],
2007
AMENDED
AND RESTATED BYLAWS
OF
TOTAL SYSTEM SERVICES, INC.
ARTICLE I.
OFFICES
Section 1. Principal
Office. The principal office for the transaction
of the business of the corporation shall be located in Muscogee
County, Georgia, at such place within said County as may be
fixed from time to time by the Board of Directors.
Section 2. Other
Offices. Branch offices and places of business
may be established at any time by the Board of Directors at any
place or places, whether within or without the State of Georgia.
ARTICLE II.
SHAREHOLDERS MEETINGS
Section 1. Meetings, Where
Held. Any meeting of the shareholders of the
corporation, whether an annual meeting or a special meeting, may
be held either at the principal office of the corporation or at
any place in the United States within or without the State of
Georgia.
Section 2. Annual
Meeting. The annual meeting of the shareholders
of the corporation for the election of Directors and for the
transaction of such other business as may properly come before
the meeting shall be held on such date and at such time and
place as is determined by the Board of Directors of the
corporation each year. Unless otherwise determined by the Board
of Directors, the Chairman of the Board or the Chief Executive
Officer shall act as chairman at all annual meetings. The
chairman of each annual meeting shall announce the date and time
for the opening and closing of the polls for each matter to be
voted on by the corporations shareholders.
Section 3. Special
Meetings. A special meeting of the shareholders
of the corporation, for any purpose or purposes whatsoever, may
be called at any time by (i) the Board of Directors or
(ii) one or more shareholders of the corporation holding at
least 80% of the issued and outstanding shares of common stock
of the corporation. Such a call for a special meeting must state
the purpose of the meeting. Unless otherwise determined by the
Board of Directors, the Chairman of the Board or the Chief
Executive Officer shall act as chairman of all special meetings.
The chairman of each special meeting shall announce the date and
time for the opening and closing of the polls for each matter to
be voted on by the corporations shareholders. This
section, as it relates to the call of a special meeting of the
shareholders of the corporation by one or more shareholders
holding at least 80% of the issued and outstanding shares of
common stock of the corporation shall not be altered, deleted or
rescinded except upon the affirmative vote of the shareholders
of the corporation holding at least 80% of the issued and
outstanding shares of common stock of the corporation.
Section 4. Nature of Business at
Meetings of Shareholders. No business may be
transacted at an annual meeting of shareholders, other than
business that is either (a) specified in the notice of
meeting (or any supplement thereto) given by or at the direction
of the Board of Directors (or any duly authorized committee
thereof), (b) otherwise properly brought before the annual
meeting by or at the direction of the Board of Directors (or any
duly authorized committee thereof) or (c) otherwise
properly brought before the annual meeting by any shareholder of
the corporation (i) who is a shareholder of record on the
date of the giving of the notice by such shareholder as required
by this Section 4 and on the record date for the
determination of shareholders entitled to notice of and to vote
at such annual meeting and (ii) who complies with the
notice procedures set forth in this Section 4.
In addition to any other applicable requirements, for business
to be properly brought before an annual meeting by a
shareholder, such shareholder must have given timely notice
thereof in proper written form to the Secretary of the
corporation.
To be timely, a shareholders notice to the Secretary must
be delivered to or mailed and received at the principal
executive offices of the corporation not less than 90 days
nor more than 120 days prior to the anniversary date of the
immediately preceding annual meeting of shareholders; provided,
however,
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that in the event that the annual meeting is called for a date
that is not within 25 days before or after such anniversary
date, notice by the shareholder in order to be timely must be so
received not later than the close of business on the
10th day following the day on which notice of the date of
the annual meeting was mailed by the corporation or public
disclosure of the date of the annual meeting was made by the
corporation, whichever first occurs; and, provided further, that
with respect to the corporations 2008 annual meeting of
shareholders, unless the immediately preceding proviso shall
apply, notice by the shareholder in order to be timely must be
so received no earlier than December 24, 2007 and not later
than the close of business on the 10th day following the
day on which public disclosure was made announcing that the
distribution of the corporations shares owned by Synovus
Financial Corp. (Synovus) to the shareholders of
Synovus has been completed.
To be in proper written form, a shareholders notice to the
Secretary must set forth as to each matter such shareholder
proposes to bring before the annual meeting (i) a brief
description of the business desired to be brought before the
annual meeting and the reasons for conducting such business at
the annual meeting, (ii) the name and record address of
such shareholder, (iii) the class and series and number of
shares of each class and series of capital stock of the
corporation which are owned beneficially or of record by such
shareholder, (iv) a description of all arrangements or
understandings between such shareholder and any other person or
persons (including their names) in connection with the proposal
of such business by such shareholder and any material interest
of such shareholder in such business and (v) a
representation that such shareholder is a holder of record of
stock of the corporation entitled to vote at such meeting and
that such shareholder intends to appear in person or by proxy at
the annual meeting to bring such business before the meeting.
In addition, notwithstanding anything in this Section 4 to
the contrary, a shareholder intending to nominate one or more
persons for election as a director at an annual or special
meeting of shareholders must comply with Section 5 of this
Article II for such nominations to be properly brought
before such meeting.
No business shall be conducted at the annual meeting of
shareholders except business brought before the annual meeting
in accordance with the procedures set forth in this
Section 4; provided, however, that, once business has been
properly brought before the annual meeting in accordance with
such procedures, nothing in this Section 4 shall be deemed
to preclude discussion by any shareholder of any such business.
If the chairman of an annual meeting determines that business
was not properly brought before the annual meeting in accordance
with the foregoing procedures, the chairman shall declare to the
meeting that the business was not properly brought before the
meeting and such business shall not be transacted.
No business shall be conducted at a special meeting of
shareholders except for such business as shall have been brought
before the meeting pursuant to the corporations notice of
meeting.
Section 5. Nomination of
Directors. Only persons who are nominated in
accordance with the following procedures shall be eligible for
election as directors of the corporation, subject to the rights
of holders of any class or series of preferred stock to nominate
and elect directors under certain circumstances. Nominations of
persons for election to the Board of Directors may be made at
any annual meeting of shareholders, or at any special meeting of
shareholders called for the purpose of electing directors,
(a) by or at the direction of the Board of Directors (or
any duly authorized committee thereof) or (b) by any
shareholder of the corporation (i) who is a shareholder of
record on the date of the giving of the notice by such
shareholder as required by this Section 5 and on the record
date for the determination of shareholders entitled to notice of
and to vote at such meeting and (ii) who complies with the
notice procedures set forth in this Section 5.
In addition to any other applicable requirements, for a
nomination to be made by a shareholder, such shareholder must
have given timely notice thereof in proper written form to the
Secretary of the corporation.
To be timely, a shareholders notice to the Secretary must
be delivered to or mailed and received at the principal
executive offices of the corporation (a) in the case of an
annual meeting, not less than 90 days nor more than
120 days prior to the anniversary date of the immediately
preceding annual meeting of shareholders; provided, however,
that in the event that the annual meeting is called for a date
that is not within 25 days before or after such anniversary
date, notice by the shareholder in order to be timely must be so
received not later than the close of business on the
10th day following the day on which
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notice of the date of the annual meeting was mailed by the
corporation or public disclosure of the date of the annual
meeting was made by the corporation, whichever first occurs;
and, provided further, that with respect to the
corporations 2008 annual meeting of shareholders, unless
the immediately preceding proviso shall apply, notice by the
shareholder in order to be timely must be so received no earlier
than December 24, 2007 and not later than the close of
business on the 10th day following the day on which public
disclosure was made announcing that the distribution of the
corporations shares owned by Synovus to the shareholders
of Synovus has been completed; and (b) in the case of a
special meeting of shareholders called for the purpose of
electing directors, not later than the close of business on the
10th day following the day on which notice of the date of
the special meeting was mailed or public disclosure of the date
of the special meeting was made, whichever first occurs.
To be in proper written form, a shareholders notice to the
Secretary must set forth (a) as to each person whom the
shareholder proposes to nominate for election as a director
(i) the name, age, business address and residence address
of the person, (ii) the principal occupation and employment
of the person, (iii) the class and series and number of
shares of each class and series of capital stock of the
corporation which are owned beneficially or of record by the
person, if any, and (iv) any other information relating to
the person that would be required to be disclosed in a proxy
statement or other filings required to be made in connection
with solicitations of proxies for election of directors pursuant
to Section 14 of the Securities Exchange Act of 1934, as
amended (the Exchange Act) (or in any law or statute
replacing such section), and the rules and regulations
promulgated thereunder; and (b) as to the shareholder
giving the notice (i) the name and record address of such
shareholder, (ii) the class and series and number of shares
of each class and series of capital stock of the corporation
which are owned beneficially or of record by such shareholder,
(iii) a description of all arrangements or understandings
between such shareholder and each proposed nominee and any other
person or persons (including their names) pursuant to which the
nomination(s) are to be made by such shareholder, (iv) a
representation that such shareholder is a holder of record of
stock of the corporation entitled to vote at such meeting and
that such shareholder intends to appear in person or by proxy at
the meeting to nominate the person or persons named in its
notice and (v) any other information relating to such
shareholder that would be required to be disclosed in a proxy
statement or other filings required to be made in connection
with solicitations of proxies for election of directors pursuant
to Section 14 of the Exchange Act (or in any law or statute
replacing such section) and the rules and regulations
promulgated thereunder. Such notice must be accompanied by a
written consent of each proposed nominee to being named as a
nominee and to serve as a director if elected.
No person shall be eligible for election as a director of the
corporation unless nominated in accordance with the procedures
set forth in this Section 5. If the chairman of the meeting
determines that a nomination was not made in accordance with the
foregoing procedures, the chairman shall declare to the meeting
that the nomination was defective and such defective nomination
shall be disregarded.
Section 6. Notice of
Meetings. Unless waived in accordance with
Section 7, notice of each annual meeting and of each
special meeting of the shareholders of the corporation shall be
given to each shareholder of record entitled to vote at the
meeting not less than ten (10) days nor more than sixty
(60) days prior to said meeting. Such notice shall specify
the place, date and hour of the meeting and, in the case of a
special meeting, it shall also specify the purpose or purposes
for which the meeting is called.
Section 7. Waiver of
Notice. Notice of any annual or special meeting
of the shareholders of the corporation may be waived by any
shareholder, either before or after the meeting; and the
attendance of a shareholder at a meeting, either in person or by
proxy, shall of itself constitute waiver of notice and waiver of
any and all objections to the place or time of the meeting, or
to the manner in which it has been called or convened, unless
the shareholder, at the beginning of the meeting, objects to the
holding of the meeting or the transaction of business at such
meeting.
Section 8. Quorum, Voting and
Proxy. Shareholders representing a majority of
the issued and outstanding shares of common stock of the
corporation shall constitute a quorum at a shareholders
meeting. Each shareholder shall be entitled to one vote for each
share of common stock owned. Any shareholder may be represented
and vote at any shareholders meeting by proxy, which such
shareholder has duly executed in writing or by any other method
permitted by the Georgia Business Corporation
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Code; provided, however, that no proxy shall be valid for more
than 11 months after the date thereof unless otherwise
specified in such proxy.
Section 9. Inspector of
Elections. The corporation may appoint one or
more inspectors to act at any meeting of the corporations
shareholders and to make a written report of the
inspectors determinations with respect thereto. Any such
inspectors shall (i) ascertain the number of shares
outstanding and the voting power thereof, (ii) determine
the shares represented at a meeting, (iii) determine the
validity of the proxies and ballots, (iv) count all votes
with respect to matters presented to the corporations
shareholders, and (v) determine the result of any matter
presented to the corporations shareholders. Any such
inspector shall take and sign an oath to faithfully execute the
duties of inspector with strict impartiality and according to
the best of the inspectors ability. An inspector may be an
officer or employee of the corporation.
ARTICLE III.
DIRECTORS
Section 1. Number. The
Board of Directors of the corporation shall consist of not less
than 8 nor more than 60 Directors. The number of Directors
may vary between said minimum and maximum, and within said
limits, the shareholders holding at least 80% of the issued and
outstanding shares of common stock of the corporation may, from
time to time, by resolution fix the number of Directors to
comprise said Board. This section, as it relates to from time to
time, fixing the number of Directors of the corporation by the
shareholders of the corporation holding at least 80% of the
issued and outstanding shares of common stock of the
corporation, shall not be altered, deleted or rescinded except
upon the affirmative vote of the shareholders of the corporation
holding at least 80% of the issued and outstanding shares of
common stock of the corporation.
Section 2. Election and
Tenure. The Board of Directors of the corporation
shall be divided into three classes serving staggered three-year
terms, with each class to be as nearly equal as possible. At the
first annual meeting of the shareholders of the corporation, all
members of the Board of Directors shall be elected with the
terms of office of Directors comprising the first class to
expire at the first annual meeting of the shareholders of the
corporation after their election, the terms of office of
Directors comprising the second class to expire at the second
annual meeting of the shareholders of the corporation after
their election and the terms of office of Directors comprising
the third class to expire at the third annual meeting of the
shareholders of the corporation after their election, and as
their terms of office expires, the Directors of each class will
be elected to hold office until the third succeeding annual
meeting of the shareholders of the corporation after their
election. In such elections, the nominees receiving a plurality
of votes shall be elected. This section, as it relates to the
division of the Board of Directors into three classes serving
staggered three-year terms, shall not be altered, deleted or
rescinded except upon the affirmative vote of the shareholders
of the corporation holding at least 80% of the issued and
outstanding shares of common stock of the corporation.
Section 3. Powers. The
Board of Directors shall have authority to manage the affairs
and exercise the powers, privileges and franchises of the
corporation as they may deem expedient for the interests of the
corporation, subject to the terms of the Articles of
Incorporation and these bylaws.
Section 4. Meetings. The
annual meeting of the Board of Directors shall be held without
notice immediately following the annual meeting of the
shareholders of the corporation, on the same date and at the
same place as said annual meeting of the shareholders. The Board
by resolution may provide for regular meetings, which may be
held without notice as and when scheduled in such resolution.
Special meetings of the Board may be called at any time by the
Chairman of the Board, the Chief Executive Officer, the Lead
Director, or by any two or more Directors.
Section 5. Notice and Waiver;
Quorum. Notice of any special meeting of the
Board of Directors shall be given to each Director personally or
by mail, telegram, facsimile, overnight courier, telephone or
e-mail, or
by any other means customary for expedited business
communications, at least 24 hours prior to the meeting,
Such notice may be waived, either before or after the meeting;
and the attendance of a Director at any special meeting shall of
itself constitute a waiver of notice of such meeting and of any
and all objections to the place or time of the meeting, or to
the manner in which it has been called or convened, except where
a Director states, at the beginning of the meeting, any such
objection or
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objections to the holding of the meeting or the transaction of
business at such meeting. A majority of the Board of Directors
then in office shall constitute a quorum at any Directors
meeting.
Section 6. No Meeting Necessary,
When. Any action required by law or permitted to
be taken at any meeting of the Board of Directors or any
committee thereof may be taken without a meeting if written
consent, setting forth the action so taken, shall be signed by
all the Directors or committee members. Such consent shall have
the same force and affect as a unanimous vote of the Board of
Directors and shall be filed with the Secretary and recorded in
the Minute Book of the corporation.
Section 7. Telephone Conference
Meetings. Members of the Board of Directors, or
any committee designated by the Board of Directors, may
participate in a meeting of the Board or committee by means of
telephone conference or similar communications equipment by
means of which all persons participating in the meeting can hear
each other, and participation in a meeting pursuant to this
section shall constitute presence in person at such meeting.
Section 8. Voting. At
all meetings of the Board of Directors each Director shall have
one vote and, except as otherwise provided herein or provided by
law, all questions shall be determined by a majority vote of the
Directors present at any meeting at which a quorum is present.
Section 9. Removal. Any
one or more Directors or the entire Board of Directors may be
removed from office, with or without cause, by the affirmative
vote of the shareholders of the corporation holding at least 80%
of the issued and outstanding shares of common stock of the
corporation at any shareholders meeting with respect to
which notice of such purpose has been given. This section, as it
relates to the removal of Directors of the corporation by the
shareholders of the corporation holding at least 80% of the
issued and outstanding shares of common stock of the
corporation, shall not be altered, deleted or rescinded except
upon the affirmative vote of the shareholders of the corporation
holding at least 80% of the issued and outstanding shares of
common stock of the corporation.
Section 10. Vacancies. Any
vacancy occurring in the Board of Directors may be filled by the
shareholders, by the Board of Directors, or, if the Directors
remaining in office constitute less than a quorum, a majority of
the remaining Directors or the sole remaining Director, as the
case may be. Any Director elected or appointed to fill a vacancy
shall serve the unexpired term of his or her predecessor;
provided that any director filling a vacancy by reason of an
increase in the number of directors, where such vacancy is
filled by the Directors, shall serve until the next annual
meeting of shareholders and until the election and qualification
of his or her successor.
Section 11. Dividends. The
Board of Directors may not make a distribution to the
shareholders if, after giving it effect, the corporation would
not be able to pay its debts as they become due in the usual
course of business or the corporations total assets would
be less than the sum of its total liabilities plus the amount
that would be needed, if the corporation were to be dissolved at
the time of the distribution, to satisfy the preferential rights
upon dissolution of the shareholders whose preferential rights
are superior to those receiving the distribution. The effect of
the distribution shall be determined as set forth in
Section 14-2-640
of the Georgia Business Corporation Code.
Section 12. Committees. In
the discretion of the Board of Directors, the Board from time to
time may elect or appoint, from its own members, one or more
committees as the Board may see fit to establish. Each such
committee shall consist of two or more Directors, and each shall
possess such powers and be charged with such responsibilities,
subject to the limitations imposed by applicable law, as the
Board by resolution may from time to time prescribe.
Section 13. Officers and
Salaries. The Board of Directors shall elect all
officers of the corporation and the Board of Directors, or a
duly authorized committee of the Board of Directors, shall fix
their compensation, except that the Board shall not have the
responsibility to approve salaries for officers who are not
executive officers.
Section 14. Compensation of
Directors. Directors as such shall be entitled to
receive compensation for their service as Directors and such
fees and expenses, if any, for attendance at each regular or
special meeting of the Board and any adjournments thereof, as
may be fixed from time to time by resolution of the Board, and
such fees and expenses shall be payable even though an
adjournment be had because of the absence of a quorum; provided,
however, that nothing herein contained shall be construed to
preclude any director from serving the corporation in any other
capacity and receiving compensation therefor.
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Members of either standing or special committees may be allowed
such compensation as may be provided from time to time by
resolution of the Board for serving upon and attending meetings
of such committees.
Section 15. Emeritus
Directors. When a member of the Board of
Directors of the corporation attains seventy two (72) years
of age, such director shall automatically, at his option, either
(i) retire from the Board of Directors of the corporation;
or (ii) be appointed as a member of the Emeritus Board of
Directors of the corporation. Members of the Emeritus Board of
Directors of the corporation shall be appointed annually by the
Chairman of the Board of Directors of the corporation at the
annual meeting of the Board of Directors of the corporation, or
from time to time thereafter. Each member of the Emeritus Board
of Directors of the corporation, except in the case of his
earlier death, resignation, retirement, disqualification or
removal, shall serve until the next succeeding annual meeting of
the Board of Directors of the corporation. Any individual
appointed as a member of the Emeritus Board of Directors of the
corporation may, but shall not be required to, attend meetings
of the Board of Directors of the corporation and may participate
in any discussions thereat, but such individual may not vote at
any meeting of the Board of Directors of the corporation or be
counted in determining a quorum at any meeting of the Board of
Directors of the corporation, as provided in Section 5 of
Article III of the bylaws of the corporation. It shall be
the duty of the members of the Emeritus Board of Directors of
the corporation to serve as goodwill ambassadors of the
corporation, but such individuals shall not have any
responsibility or be subject to any liability imposed upon a
member of the Board of Directors of the corporation or in any
manner otherwise be deemed to be a member of the Board of
Directors of the corporation. Each member of the Emeritus Board
of Directors shall treat information regarding the corporation
shared with the Emeritus Board of Directors as strictly
confidential and will not disclose such information to any
third-party without the corporations consent. Each member
of the Emeritus Board of Directors of the corporation shall be
paid such compensation as may be set from time to time by the
Chairman of the Board of Directors of the corporation and shall
remain eligible to participate in any Director Stock Purchase
Plan maintained by, or participated in, from time to time by the
corporation according to the terms and conditions thereof.
Section 16. Advisory
Directors. The Board of Directors of the
corporation may at its annual meeting, or from time to time
thereafter, appoint any individual to serve as a member of an
Advisory Board of Directors of the corporation. Any individual
appointed to serve as a member of an Advisory Board of Directors
of the corporation shall be entitled to attend all meetings of
the Board of Directors and may participate in any discussion
thereat, but such individual may not vote at any meeting of the
Board of Directors or be counted in determining a quorum for
such meeting. It shall be the duty of members of the Advisory
Board of Directors of the corporation to advise and provide
general policy advice to the Board of Directors of the
corporation at such times and places and in such groups and
committees as may be determined from time to time by the Board
of Directors, but such individuals shall not have any
responsibility or be subject to any liability imposed upon a
director or in any manner otherwise be deemed a director. Each
member of the Advisory Board of Directors shall treat
information regarding the corporation shared with the Advisory
Board of Directors as strictly confidential and will not
disclose such information to any third-party without the
corporations consent. Each member of the Advisory Board of
Directors of the corporation shall be paid such compensation as
may be set from time to time by the Chairman of the Board of
Directors of the corporation. Each member of the Advisory Board
of Directors except in the case of his earlier death,
resignation, retirement, disqualification or removal, shall
serve until the next succeeding annual meeting of the Board of
Directors and thereafter until his successor shall have been
appointed.
ARTICLE IV.
OFFICERS
Section 1. Selection. The
Board of Directors at each annual meeting shall elect or appoint
a Chief Executive Officer, a President, a Secretary and a
Treasurer, each to serve for the ensuing year and until his
successor is elected and qualified, or until his earlier
resignation, removal from office, or death. The Board of
Directors, at such meeting, may or may not, in the discretion of
the Board, elect a Chairman of the Board, a Chief Operating
Officer, one or more Vice Chairmen of the Board, one or more
Vice Presidents, one or more Assistant Vice Presidents, one or
more Assistant Secretaries, one or more Assistant Treasurers,
and such other officers as the Board of Directors, in its
discretion, shall determine are desirable for the management of
the business and affairs of the corporation. When more than one
Vice
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President is elected, they may, in the discretion of the Board,
be designated Senior Executive Vice President, Executive Vice
President, or otherwise, and any person may hold two or more
offices, except that neither the Chief Executive Officer nor the
President shall also serve as the Secretary.
Section 2. Removal,
Vacancies. Any officers of the corporation may be
removed from office at any time by the Board of Directors, with
or without cause. Any vacancy occurring in any office of the
corporation may be filled by the Board of Directors.
Section 3. Chief Executive
Officer. The Chief Executive Officer shall, under
the direction of the Board of Directors, have responsibility for
the general direction of the corporations business,
policies and affairs. The Chief Executive Officer shall have
such other authority and perform such other duties as usually
appertain to the chief executive office in business corporations
or as are provided by the Board of Directors.
Section 4. President. The
President shall, under the direction of the Chief Executive
Officer, have direct superintendence of the corporations
business, policies, properties and affairs. The President shall
have such further powers and duties as from time to time may be
conferred upon or assigned to such officer by the Board of
Directors, the Chairman of the Board or the Chief Executive
Officer.
Section 5. Vice
President. The Senior Executive Vice Presidents,
if any, the Executive Vice Presidents, if any, and Vice
Presidents, if any, shall have such powers and duties as from
time to time may be conferred upon or assigned to them by the
Board of Directors, the Chairman of the Board, the Chief
Executive Officer, or the President. A Senior Executive Vice
President or an Executive Vice President or other officer may be
responsible for the assignment of duties to subordinate Vice
Presidents.
Section 6. Secretary. It
shall be the duty of the Secretary to keep a record of the
proceedings of all meetings of the shareholders and Board of
Directors; to keep the stock records of the corporation; to
notify the shareholders and Directors of meetings as provided by
these bylaws: and to perform such other duties as may be
prescribed by the Board of Directors, the Chairman of the Board,
the Chief Executive Officer, or the President. Any Assistant
Secretary, if elected, shall perform the duties of the Secretary
during the absence or disability of the Secretary and shall
perform such other duties as may be prescribed by the Board of
Directors, the Chairman of the Board, the Chief Executive
Officer, the President or the Secretary.
Section 7. Treasurer. The
Treasurer shall keep, or cause to be kept, the financial books
and records of the corporation, and shall faithfully account for
its funds. He shall make such reports as may be necessary to
keep the Board of Directors, the Chairman of the Board, the
Chief Executive Officer, and the President fully informed at all
times as to the financial condition of the corporation, and
shall perform such other duties as may be prescribed by the
Board of Directors, the Chairman of the Board, the Chief
Executive Officer or the President. Any Assistant Treasurer, if
elected, shall perform the duties of the Treasurer during the
absence or disability of the Treasurer, and shall perform such
other duties as may be prescribed by the Board of Directors, the
Chief Executive Officer, Chairman of the Board, the President or
the Treasurer.
ARTICLE V.
CONTRACTS,
ETC.
Section 1. Contracts, Deeds and
Loans. All contracts, deeds, mortgages, pledges,
promissory notes, transfers and other written instruments
binding upon the corporation shall be executed on behalf of the
corporation by the Chief Executive Officer, Chairman of the
Board, the President, any Executive Vice President, any Group
Executives who report directly to such Executive Vice
Presidents, or by such other officers or agents as the Board of
Directors may designate from time to time. Any such instrument
required to be given under the seal of the corporation may be
attested by the Secretary or Assistant Secretary of the
corporation.
Section 2. Proxies. The
Chief Executive Officer, Chairman of the Board, the President,
any Vice President, the Secretary or the Treasurer of the
corporation shall have full power and authority, on behalf of
the corporation, to attend and to act and to vote at any
meetings of the shareholders, bond holders or other security
holders of any corporation, trust or association in which the
corporation may hold securities, and at and in connection with
any such meeting shall possess and may exercise any and all of
the rights and powers incident to the ownership of such
securities and which as owner thereof the
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corporation might have possessed and exercised if present,
including the power to execute proxies and written waivers and
consents in relation thereto. In the case of conflicting
representation at any such meeting, the corporation shall be
represented by its highest ranking officer, in the order first
above stated. Notwithstanding the foregoing, the Board of
Directors may, by resolution, from time to time, confer like
powers upon any other person or persons.
Section 3. Inspection of
Records. The record of shareholders, accounting
records and written proceedings of the shareholders, the Board
of Directors and committees of the Board of Directors shall be
open for inspection and copying during regular business hours at
a reasonable location specified by the corporation solely by
shareholders owning not less than two percent (2%) of the
outstanding shares of the corporation upon at least five
(5) days written notice of demand to inspect and copy such
records. The right of inspection by a shareholder may be granted
only if the demand is made in good faith and for a proper
purpose that is reasonably relevant to a legitimate interest as
a shareholder, describes with reasonable particularity the
purpose for such demand and the records desired for inspection,
the records are directly connected with such purpose and are to
be used only for the stated purpose.
ARTICLE VI.
CHECKS AND DRAFTS
Checks and drafts of the corporation shall be signed by such
officer or officers or such other employees or persons as the
Board of Directors may from time to time designate.
ARTICLE VII.
STOCK
Section 1. Certificates of
Stock. Shares of capital stock of the corporation
shall be issued in certificate or book-entry form. Certificates
shall be numbered consecutively and entered into the stock book
of the corporation as they are issued. Each certificate shall
state on its face the fact that the corporation is a Georgia
corporation, the name of the person to whom the shares are
issued, the number and class of shares (and series, if any)
represented by the certificate and their par value, or a
statement that they are without par value. In addition, when and
if more than one class of shares shall be outstanding, all share
certificates of whatever class shall state that the corporation
will furnish to any shareholder upon request and without charge
a full statement of the designations, relative rights,
preferences and limitations of the shares of each class
authorized to be issued by the corporation.
Section 2. Signature; Transfer Agent;
Registrar. Share certificates shall be signed by
the President or any Vice President and by the Secretary or an
Assistant Secretary of the corporation, and shall bear the seal
of the corporation or a facsimile thereof. The Board of
Directors may from time to time appoint transfer agents and
registrars for the shares of capital stock of the corporation or
any class thereof, and when any share certificate is
countersigned by a transfer agent or registered by a registrar,
the signature of any officer of the corporation appearing
thereon may be a facsimile signature. In case any officer who
signed, or whose facsimile signature was placed upon, any such
certificate shall have died or ceased to be such officer before
such certificate is issued, it may nevertheless be issued with
the same effect as if he continued to be such officer on the
date of issue.
Section 3. Stock
Book. The corporation shall keep at its principal
office, or at the office of its transfer agent, wherever
located, with a copy at the principal office of the corporation,
a book, to be known as the stock book of the corporation,
containing in alphabetical order name of each shareholder of
record, together with his address, the number of shares of each
kind, class or series of stock held by him and his social
security number. The stock book shall be maintained in current
condition. The stock book, including the share register, or the
duplicate copy thereof maintained at the principal office of the
corporation, shall be available for inspection and copying by
any shareholder at any meeting of the shareholders upon request,
or, for a bona fide purpose which is in the best interest of the
business of the corporation, at other times upon the written
request of any shareholder or holder of a voting trust
certificate. The stock book may be inspected and copied either
by a shareholder or a holder of a voting trust certificate in
person, or by their duly authorized attorney or agent. The
information contained in the stock book and share register may
be stored on punch cards, magnetic tape, or any other approved
information storage devices related to electronic data
processing equipment, provided that any such method, device, or
system employed shall first be approved by the Board of
Directors, and provided
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further that the same is capable of reproducing all information
contained therein, in legible and understandable form, for
inspection by shareholders or for any other proper corporate
purpose.
Section 4. Transfer of Stock;
Registration of Transfer. The stock of the
corporation shall be transferred only by surrender of the
certificate or compliance with the applicable procedures for
stock held in book-entry form and, in each case, transfer upon
the stock book of the corporation. Upon surrender to the
corporation, or to any transfer agent or registrar for the class
of shares represented by the certificate surrendered, of a
certificate properly endorsed for transfer, accompanied by such
assurances as the corporation, or such transfer agent or
registrar, may require as to the genuineness and effectiveness
of each necessary endorsement and satisfactory evidence of
compliance with all applicable laws relating to securities
transfers and the collection of taxes, it shall be the duty of
the corporation, or such transfer agent or registrar, to issue a
new certificate, cancel the old certificate and record the
transactions upon the stock book of the corporation.
Section 5. Registered
Shareholders. Except as otherwise required by
law, the corporation shall be entitled to treat the person
registered on its stock book as the owner of the shares of the
capital stock of the corporation as the person exclusively
entitled to receive notification, dividends or other
distributions, to vote and to otherwise exercise all the rights
and powers of ownership and shall not be bound to recognize any
adverse claim.
Section 6. Record
Date. For the purpose of determining shareholders
entitled to notice of or to vote at any meeting of shareholders
or any adjournment thereof or to express consent to or dissent
from any proposal without a meeting, or for the purpose of
determining shareholders entitled to receive payment of any
dividend or the allotment of any rights, or for the purpose of
any other action affecting the interests of shareholders, the
Board of Directors may fix in advance, a record date. Such date
shall not be more than seventy (70) nor less than ten
(10) days before the date of any such meeting nor more than
seventy (70) days prior to any other action. In each case,
except as otherwise provided by law, only such persons as shall
be shareholders of record on the date so fixed shall be entitled
to notice of and to vote at such meeting and any adjournment
thereof, to express such consent or dissent, or to receive
payment of such dividend or such allotment of rights, or
otherwise be recognized as shareholders for any other related
propose, notwithstanding any registration of a transfer of
shares on the stock book of the corporation after any such
record date so fixed.
Section 7. Lost
Certificates. When a person to whom a certificate
of stock has been issued alleges it to have been lost, destroyed
or wrongfully taken, and if the corporation, transfer agent or
registrar is not on notice that such certificate has been
acquired by a bona fide purchaser, a new certificate may be
issued upon such owners compliance with all of the
following conditions, to wit: (a) He shall file
with the Secretary of the corporation, and the transfer agent or
the registrar, his request for the issuance of a new
certificate, with an affidavit setting for the time, place and
circumstances of the loss: (b) He shall also file with the
Secretary, and the transfer agent or the registrar, a bond with
good and sufficient security acceptable to the corporation and
the transfer agent or the registrar, or other agreement of
indemnity, acceptable to the corporation and the transfer agent
or the registrar, conditioned to indemnify and save harmless the
corporation and the transfer agent or the registrar from any and
all damage, liability and expense of every nature whatsoever
resulting from the corporations or the transfer
agents or the registrars issuing a new certificate
in place of the one alleged to have been lost; and (c) He
shall comply with such other reasonable requirements as the
Board of Directors, the Chief Executive Officer or the President
of the corporation, and the transfer agent or the registrar
shall deem appropriate under the circumstances.
Section 8. Replacement of Mutilated
Certificates. A new certificate may be issued in
lieu of any certificate previously issued that may be defaced or
mutilated upon surrender for cancellation of a part of the old
certificate sufficient in the opinion of the Secretary and the
transfer agent or the registrar to duly identify the defaced or
mutilated certificate and to protect the corporation and the
transfer agent or the registrar against loss or liability. Where
sufficient identification is lacking, a new certificate may be
issued upon compliance with the conditions set forth in
Section 7 of this Article VII.
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ARTICLE VIII.
INDEMNIFICATION AND REIMBURSEMENT
Section 1. Indemnification. Subject
to any express limitations imposed by applicable law, every
person now or hereafter serving as a director, officer, employee
or agent of the corporation and all former directors and
officers, employees or agents shall be indemnified and held
harmless by the corporation to the fullest extent permitted
under the Georgia Business Corporation Code, including from and
against the obligation to pay a judgment, settlement, penalty,
fine (including an excise tax assessed with respect to an
employee benefit plan), and reasonable expenses (including
attorneys fees and disbursements) that may be imposed upon
or incurred by him or her in connection with or resulting from
any threatened, pending, or completed, action, suit, or
proceeding, whether civil, criminal, administrative,
investigative, formal or informal, in which he or she is, or is
threatened to be made, a named defendant or respondent:
(a) because he or she is or was a director, officer,
employee, or agent of the corporation; (b) because he or
she is or was serving at the request of the corporation as a
director, officer, partner, trustee, employee, or agent of
another corporation, partnership, joint venture, trust, employee
benefit plan or other enterprise; or (c) because he or she
is or was serving as an employee of the corporation who was
employed to render professional services as a lawyer or an
accountant to the corporation; regardless of whether such person
is acting in such a capacity at the time such obligation shall
have been imposed or incurred, if (i) such person acted in
a manner he or she believed in good faith to be in or not
opposed to the best interests of the corporation, and, with
respect to any criminal proceeding, if such person had no
reasonable cause to believe his or her conduct was unlawful or
(ii), with respect to an employee benefit plan, such person
believed in good faith that his or her conduct was in the
interests of the participants in and beneficiaries of the plan.
Section 2. Advancement. Reasonable
expenses incurred in any proceeding shall be paid by the
corporation in advance of the final disposition of such
proceeding if authorized by the Board of Directors in the
specific case, or if authorized in accordance with procedures
adopted by the Board of Directors, upon receipt of a written
undertaking executed personally by or on behalf of the director,
officer, employee, or agent to repay such amount if it shall
ultimately be determined that he or she is not entitled to be
indemnified by the corporation, and a written affirmation of his
or her good faith belief that he or she has met the standard of
conduct required for indemnification.
Section 3. Miscellaneous. The
foregoing rights of indemnification and advancement of expenses
shall not be deemed exclusive of any other right to which those
indemnified may be entitled, and the corporation may provide
additional indemnity and rights to its directors, officers,
employees or agents to the extent they are consistent with law.
The provisions of this Article VIII shall cover proceedings
whether now pending or hereafter commenced and shall be
retroactive to cover acts or omissions or alleged acts or
omissions which heretofore have taken place. In the event of
death of any person having a right of indemnification or
advancement of expenses under the provisions of this
Article VIII, such right shall inure to the benefit of his
or her heirs, executors, administrators and personal
representatives. If any part of this Article VIII should be
found to be invalid or ineffective in any proceeding, the
validity and effect of the remaining provisions shall not be
affected.
Section 4. Intent. It
is the intent of the corporation to indemnify persons covered by
Section I of this Article VIII to the full extent permitted
by the Georgia Business Corporation Code, as amended from time
to time. To the extent that the Georgia Business Corporation
Code is hereafter amended to permit a Georgia business
corporation to provide to such persons greater rights to
indemnification than those specifically set forth hereinabove,
this Article shall be deemed amended to require such greater
indemnification, in each case consistent with the Georgia
Business Corporation Code as so amended from time to time. No
amendment, modification or rescission of this Article, or any
provision hereof, the effect of which would diminish the rights
to indemnification or advancement of expenses as set forth
herein shall be effective as to any person with respect to any
action taken or omitted by such person prior to such amendment,
modification or rescission.
ARTICLE IX.
MERGERS CONSOLIDATIONS AND OTHER DISPOSITIONS OF
ASSETS
The affirmative vote of the shareholders of the corporation
holding at least 80% of the issued and outstanding shares of
common stock of the corporation shall be required to approve any
merger or consolidation of the corporation with or into any
corporation, and the sale, lease, exchange or other
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disposition of all, or substantially all, of the assets of the
corporation to or with any other corporation, person or entity,
with respect to which the approval of the corporations
shareholders is required by the provisions of the corporate laws
of the State of Georgia. This Article shall not be altered,
deleted or rescinded except upon the affirmative vote of the
shareholders holding at least 80% of the issued and outstanding
shares of common stock of the corporation.
ARTICLE X
CRITERIA FOR CONSIDERATION OF ACTIONS BY THE BOARD
Section 1. Alternative
Stakeholders. In discharging the duties of their
respective positions and in determining what is believed to be
in the best interests of the corporation, the Board of
Directors, committees thereof and individual directors, in
addition to considering the effects of any action on the
corporation and its shareholders, may consider the interests of
employees, customers, suppliers, and creditors of the
corporation and its subsidiaries, the communities in which
offices or other establishments of the corporation and its
subsidiaries are located, and all other factors such directors
consider pertinent; provided, however, that this provision shall
be deemed solely to grant discretionary authority to the
directors and shall not be deemed to provide to any constituency
any right to be considered.
Section 2. Appropriate
Actions. If the Board of Directors determines
that any proposed business combination should be rejected, it
may take any lawful action to accomplish its purpose including,
but not limited to, any or all of the following:
(i) advising shareholders not to accept the offer;
(ii) litigation against the offeror; (iii) filing
complaints with governmental and regulatory authorities;
(iv) acquiring the corporations securities;
(v) selling or otherwise issuing authorized but unissued
securities of the corporation or treasury stock or granting
options or rights with respect thereto; (vi) acquiring a
company to create an antitrust or other regulatory problem for
the offeror; and (vii) soliciting a more favorable offer
from another individual or entity.
ARTICLE XI.
AMENDMENT
Except as otherwise specifically provided herein, the bylaws of
the corporation may be altered, amended or added to by a
majority of the total number of votes of each voting group
entitled to vote thereon at a meeting of shareholders where such
business is properly brought before the meeting in accordance
with the bylaws or, subject to such limitations as the
shareholders may from time to time prescribe, by a majority vote
of all the Directors then holding office at any meeting of the
Board of Directors.
ARTICLE XII.
BUSINESS COMBINATIONS
All of the requirements of Article 11, Part 3, of the
Georgia Business Corporation Code, included in
Sections 14-2-1131
through 1133 (and any successor provisions thereto), shall be
applicable to the corporation in connection with any business
combination, as defined therein, with any interested
shareholder, as defined therein.
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As
Amended and
Restated
Effective
[ ],
2007
AMENDED
AND RESTATED
BYLAWS
OF
TOTAL SYSTEM SERVICES, INC.
ARTICLE I.
Article I.
OFFICES
Section 1. Principal
Office. The principal office for the transaction
of the business of the corporation shall be located in Muscogee
County, Georgia, at such place within said County as may be
fixed from time to time by the Board of Directors.
Section 2. Other
Offices. Branch offices and places of business
may be established at any time by the Board of Directors at any
place or places where the corporation is qualified to do
business, whether within or without the State of
Georgia.
ARTICLE II.
Article II.
SHAREHOLDERS
MEETINGS
Section 1. Meetings, Where
Held. Any meeting of the shareholders of the
corporation, whether an annual meeting or a special meeting, may
be held either at the principal office of the corporation or at
any place in the United States within or without the State of
Georgia.
Section 2. Annual
Meeting. The annual meeting of the shareholders
of the corporation for the election of Directors and for the
transaction of such other business as may properly come before
the meeting shall be held on such date and at such time and
place as is determined by the Board of Directors of the
corporation each year. Provided, however, that if the
Board of Directors shall fail to set a date for the annual
meeting of shareholders in any year, that the annual meeting of
the shareholders of the corporation shall be held on the second
Monday in April of each year; provided, that if said day shall
fall upon a legal holiday, then such annual meeting shall be
held on the next day thereafter ensuing which is not a legal
holiday. Unless otherwise determined by the Board of
Directors, the Chairman of the Board or the Chief Executive
Officer shall act as chairman at all annual meetings. In
addition to any other applicable requirements, for business to
properly come before the meeting, notice of any nominations of
persons for election to the Board of Directors or of any other
business to be brought before an annual meeting of shareholders
by a shareholder must be provided in writing to the Secretary of
the corporation not later than the close of business on the 45th
day nor earlier than the close of business on the 90th day prior
to the date of the proxy statement released to shareholders in
connection with the previous years annual meeting and such
business must constitute a proper subject to be brought before
such meeting. Such shareholders notice shall set forth
(a) as to each person whom the shareholder proposes to
nominate for election as a director all information relating to
such person that is required to be disclosed in solicitations of
proxies for election of directors, or is otherwise required, in
each case pursuant to Regulation 14A under the Securities
Exchange Act of 1934, as amended (including such persons
written consent to being named in the Proxy Statement in
connection with such annual meeting as a nominee and to serving
as a director if elected), and evidence reasonably satisfactory
to the corporation that such nominee has no interests that would
limit such nominees ability to fulfill his or her duties
of office; (b) as to any other business that the
shareholder proposes to bring before the meeting, a brief
description of the business desired to be brought before the
meeting, the reasons for conducting such business at the meeting
and any material interest in such business of such shareholder
and the beneficial owner, if any, on whose behalf the proposal
is made; and (c) as to the shareholder giving the notice
and the beneficial owner, if any, on whose behalf the nomination
or proposal is made (i) the name and address of such
shareholder, as they appear on the corporations books, and
of such beneficial owner and (ii) the class and number of
shares of the corporation that are owned beneficially and held
of record by such shareholder and such beneficial owner. In
addition, if the shareholder intends to solicit proxies from the
shareholders of the corporation, such shareholders notice
shall notify the corporation of this intent. If a shareholder
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fails to notify the corporation of his or her intent to
solicit proxies and does in fact solicit proxies, the chairman
shall have the authority, in his or her discretion, to strike
the proposal or nomination by the shareholder. The
chairman of each annual meeting shall announce the date and time
for the opening and closing of the polls for each matter to be
voted on by the corporations shareholders.
Notwithstanding anything in these bylaws to the
contrary, no business shall be conducted at the annual meeting
except in accordance with the procedures set forth in this
Section 2. The chairman shall, if the facts warrant,
determine and declare to the meeting that business has not been
properly brought before the meeting in accordance with the
provisions of this Section 2, and if the chairman should so
determine, the chairman shall so declare to the meeting and any
such business not properly brought before the meeting shall not
be transacted.
Section 3. Special
Meetings. A special meeting of the shareholders
of the corporation, for any purpose or purposes whatsoever, may
be called at any time by the Chairman of the Board, the
Chief Executive Officer, a majority of(i)
the Board of Directors, or (ii)
one or more shareholders of the corporation holding at least
80% of the issued and outstanding shares of common stock of the
corporation. Such a call for a special meeting must state the
purpose of the meeting. Unless otherwise determined by the Board
of Directors, the Chairman of the Board or the Chief Executive
Officer shall act as chairman of all special meetings. The
chairman of each special meeting shall announce the date and
time for the opening and closing of the polls for each matter to
be voted on by the corporations shareholders. This
section, as it relates to the call of a special meeting of the
shareholders of the corporation by one or more shareholders
holding at least 80% of the issued and outstanding shares of
common stock of the corporation shall not be altered, deleted or
rescinded except upon the affirmative vote of the shareholders
of the corporation holding at least 80% of the issued and
outstanding shares of common stock of the corporation.
Section 4. Nature of Business at Meetings
of Shareholders. No business may be
transacted at an annual meeting of shareholders, other than
business that is either (a) specified in the notice of
meeting (or any supplement thereto) given by or at the direction
of the Board of Directors (or any duly authorized committee
thereof), (b) otherwise properly brought before the annual
meeting by or at the direction of the Board of Directors (or any
duly authorized committee thereof) or (c) otherwise
properly brought before the annual meeting by any shareholder of
the corporation (i) who is a shareholder of record on the
date of the giving of the notice by such shareholder as required
by this Section 4 and on the record date for the
determination of shareholders entitled to notice of and to vote
at such annual meeting and (ii) who complies with the
notice procedures set forth in this
Section 4.
In addition to any other applicable requirements, for
business to be properly brought before an annual meeting by a
shareholder, such shareholder must have given timely notice
thereof in proper written form to the Secretary of the
corporation.
To be timely, a shareholders notice to the Secretary
must be delivered to or mailed and received at the principal
executive offices of the corporation not less than 90 days
nor more than 120 days prior to the anniversary date of the
immediately preceding annual meeting of shareholders; provided,
however, that in the event that the annual meeting is called for
a date that is not within 25 days before or after such
anniversary date, notice by the shareholder in order to be
timely must be so received not later than the close of business
on the 10th day following the day on which notice of the
date of the annual meeting was mailed by the corporation or
public disclosure of the date of the annual meeting was made by
the corporation, whichever first occurs; and, provided further,
that with respect to the corporations 2008 annual meeting
of shareholders, unless the immediately preceding proviso shall
apply, notice by the shareholder in order to be timely must be
so received no earlier than December 24, 2007 and not later
than the close of business on the 10th day following the
day on which public disclosure was made announcing that the
distribution of the corporations shares owned by Synovus
Financial Corp. (Synovus) to the shareholders of
Synovus has been completed.
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To be in proper written form, a shareholders notice
to the Secretary must set forth as to each matter such
shareholder proposes to bring before the annual meeting
(i) a brief description of the business desired to be
brought before the annual meeting and the reasons for conducting
such business at the annual meeting, (ii) the name and
record address of such shareholder, (iii) the class and
series and number of shares of each class and series of capital
stock of the corporation which are owned beneficially or of
record by such shareholder, (iv) a description of all
arrangements or understandings between such shareholder and any
other person or persons (including their names) in connection
with the proposal of such business by such shareholder and any
material interest of such shareholder in such business and
(v) a representation that such shareholder is a holder of
record of stock of the corporation entitled to vote at such
meeting and that such shareholder intends to appear in person or
by proxy at the annual meeting to bring such business before the
meeting.
In addition, notwithstanding anything in this
Section 4 to the contrary, a shareholder intending to
nominate one or more persons for election as a director at an
annual or special meeting of shareholders must comply with
Section 5 of this Article II for such nominations to
be properly brought before such meeting.
No business shall be conducted at the annual meeting of
shareholders except business brought before the annual meeting
in accordance with the procedures set forth in this
Section 4; provided, however, that, once business has been
properly brought before the annual meeting in accordance with
such procedures, nothing in this Section 4 shall be deemed
to preclude discussion by any shareholder of any such business.
If the chairman of an annual meeting determines that business
was not properly brought before the annual meeting in accordance
with the foregoing procedures, the chairman shall declare to the
meeting that the business was not properly brought before the
meeting and such business shall not be transacted.
No business shall be conducted at a special meeting of
shareholders except for such business as shall have been brought
before the meeting pursuant to the corporations notice of
meeting.
Section 5. Nomination of
Directors. Only persons who are
nominated in accordance with the following procedures shall be
eligible for election as directors of the corporation, subject
to the rights of holders of any class or series of preferred
stock to nominate and elect directors under certain
circumstances. Nominations of persons for election to the Board
of Directors may be made at any annual meeting of shareholders,
or at any special meeting of shareholders called for the purpose
of electing directors, (a) by or at the direction of the
Board of Directors (or any duly authorized committee thereof) or
(b) by any shareholder of the corporation (i) who is a
shareholder of record on the date of the giving of the notice by
such shareholder as required by this Section 5 and on the
record date for the determination of shareholders entitled to
notice of and to vote at such meeting and (ii) who complies
with the notice procedures set forth in this
Section 5.
In addition to any other applicable requirements, for a
nomination to be made by a shareholder, such shareholder must
have given timely notice thereof in proper written form to the
Secretary of the corporation.
To be timely, a shareholders notice to the Secretary
must be delivered to or mailed and received at the principal
executive offices of the corporation (a) in the case of an
annual meeting, not less than 90 days nor more than
120 days prior to the anniversary date of the immediately
preceding annual meeting of shareholders; provided, however,
that in the event that the annual meeting is called for a date
that is not within 25 days before or after such anniversary
date, notice by the shareholder in order to be timely must be so
received not later than the close of business on the
10th day following the day on which notice of the date of
the annual meeting was mailed by the corporation or public
disclosure of the date of the annual meeting was made by the
corporation, whichever first occurs; and, provided further, that
with respect to the corporations 2008 annual meeting of
shareholders, unless the immediately preceding proviso shall
apply, notice by the shareholder in order to be timely must be
so
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received no earlier than December 24, 2007 and not
later than the close of business on the 10th day following
the day on which public disclosure was made announcing that the
distribution of the corporations shares owned by Synovus
to the shareholders of Synovus has been completed; and
(b) in the case of a special meeting of shareholders called
for the purpose of electing directors, not later than the close
of business on the 10th day following the day on which
notice of the date of the special meeting was mailed or public
disclosure of the date of the special meeting was made,
whichever first occurs.
To be in proper written form, a shareholders notice
to the Secretary must set forth (a) as to each person whom
the shareholder proposes to nominate for election as a director
(i) the name, age, business address and residence address
of the person, (ii) the principal occupation and employment
of the person, (iii) the class and series and number of
shares of each class and series of capital stock of the
corporation which are owned beneficially or of record by the
person, if any, and (iv) any other information relating to
the person that would be required to be disclosed in a proxy
statement or other filings required to be made in connection
with solicitations of proxies for election of directors pursuant
to Section 14 of the Securities Exchange Act of 1934, as
amended (the Exchange Act) (or in any law or statute
replacing such section), and the rules and regulations
promulgated thereunder; and (b) as to the shareholder
giving the notice (i) the name and record address of such
shareholder, (ii) the class and series and number of shares
of each class and series of capital stock of the corporation
which are owned beneficially or of record by such shareholder,
(iii) a description of all arrangements or understandings
between such shareholder and each proposed nominee and any other
person or persons (including their names) pursuant to which the
nomination(s) are to be made by such shareholder, (iv) a
representation that such shareholder is a holder of record of
stock of the corporation entitled to vote at such meeting and
that such shareholder intends to appear in person or by proxy at
the meeting to nominate the person or persons named in its
notice and (v) any other information relating to such
shareholder that would be required to be disclosed in a proxy
statement or other filings required to be made in connection
with solicitations of proxies for election of directors pursuant
to Section 14 of the Exchange Act (or in any law or statute
replacing such section) and the rules and regulations
promulgated thereunder. Such notice must be accompanied by a
written consent of each proposed nominee to being named as a
nominee and to serve as a director if elected.
No person shall be eligible for election as a director of
the corporation unless nominated in accordance with the
procedures set forth in this Section 5. If the chairman of
the meeting determines that a nomination was not made in
accordance with the foregoing procedures, the chairman shall
declare to the meeting that the nomination was defective and
such defective nomination shall be
disregarded.
Section 6. Section 4. Notice
of Meetings. Unless waived,
in accordance with Section 7, notice of
each annual meeting and of each special meeting of the
shareholders of the corporation shall be given to each
shareholder of record entitled to vote, at the
meeting not less than ten (10) days nor more
than seventy sixty
(7060) days prior to said
meeting. Such notice shall specify the place,
dayte and hour of the meeting;
and, in the case of a special meeting, it shall
also specify the purpose or purposes for which the meeting is
called.
Section 7. Section 5. Waiver
of Notice. Notice of any annual or special
meeting of the shareholders of the corporation may be waived by
any shareholder, either before or after the meeting; and the
attendance of a shareholder at a meeting, either in person or by
proxy, shall of itself constitute waiver of notice and waiver of
any and all objections to the place or time of the meeting, or
to the manner in which it has been called or convened,
except when aunless the
shareholder attends solely for the purpose of
stating, at the beginning of the meeting, an
objection or objections toobjects to the holding
of the meeting or the transaction of business at such
meeting.
Section 8.Section 6.
Quorum, Voting and
Proxy. Shareholders representing a majority of
the issued and outstanding shares of common stock of the
corporation shall constitute a quorum at a shareholders
meeting. Each shareholder shall be entitled to one vote for each
share of common stock owned. Any shareholder may be represented
and vote at any shareholders meeting by proxy, which such
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shareholder has duly executed in writing or by any other method
permitted by the Official Code of Georgia Annotated,
filed with the Secretary of the corporation on or before the
date of such meetingGeorgia Business Corporation
Code; provided, however, that no proxy shall be valid
for more than 11 months after the date thereof unless
otherwise specified in such proxy.
Section 7. No Meeting Necessary
When. Any action required by law or permitted to
be taken at any shareholders meeting may be taken without
a meeting if, and only if, written consent, setting forth the
action so taken, shall be signed by all of the shareholders
entitled to vote with respect to the subject matter thereof.
Such consent shall have the same force and effect as a unanimous
vote of the shareholders and shall be filed with the Secretary
and recorded in the Minute Book of the corporation.
Section 9. Inspector of
Elections. The corporation may appoint one or
more inspectors to act at any meeting of the corporations
shareholders and to make a written report of the
inspectors determinations with respect thereto. Any such
inspectors shall (i) ascertain the number of shares
outstanding and the voting power thereof, (ii) determine
the shares represented at a meeting, (iii) determine the
validity of the proxies and ballots, (iv) count all votes
with respect to matters presented to the corporations
shareholders, and (v) determine the result of any matter
presented to the corporations shareholders. Any such
inspector shall take and sign an oath to faithfully execute the
duties of inspector with strict impartiality and according to
the best of the inspectors ability. An inspector may be an
officer or employee of the corporation.
ARTICLE III.
Article III.
DIRECTORS
Section 1. Number. The
Board of Directors of the corporation shall consist of not less
than 8 nor more than 60 Directors. The number of Directors
may vary between said minimum and maximum, and within said
limits, the shareholders holding at least 80% of the issued and
outstanding shares of common stock of the corporation may, from
time to time, by resolution fix the number of Directors to
comprise said Board. This section, as it relates to from time to
time, fixing the number of Directors of the corporation by the
shareholders of the corporation holding at least 80% of the
issued and outstanding shares of common stock of the
corporation, shall not be altered, deleted or rescinded except
upon the affirmative vote of the shareholders of the corporation
holding at least 80% of the issued and outstanding shares of
common stock of the corporation.
Section 2. Election and
Tenure. The Board of Directors of the corporation
shall be divided into three classes serving
staggered3three-year terms, with
each class to be as nearly equal in number as
possible. At the first annual meeting of the shareholders of the
corporation, all members of the Board of Directors shall be
elected with the terms of office of Directors comprising the
first class to expire at the first annual meeting of the
shareholders of the corporation after their election, the terms
of office of Directors comprising the second class to expire at
the second annual meeting of the shareholders of the corporation
after their election and the terms of office of Directors
comprising the third class to expire at the third annual meeting
of the shareholders of the corporation after their election, and
as their terms of office expires, the Directors of each class
will be elected to hold office until the third succeeding annual
meeting of the shareholders of the corporation after their
election. In such elections, the nominees receiving a plurality
of votes shall be elected. This section, as it relates to the
division of the Board of Directors into three classes serving
staggered 3-three-year terms,
shall not be altered, deleted or rescinded except upon the
affirmative vote of the shareholders of the corporation holding
at least 80% of the issued and outstanding shares of common
stock of the corporation.
Section 3. Powers. The
Board of Directors shall have authority to manage the affairs
and exercise the powers, privileges and franchises of the
corporation as they may deem expedient for the interests of the
corporation, subject to the terms of the Articles of
Incorporation, bylaws, and such policies and directions
as may be prescribed from time to time by the shareholders of
the corporation and these bylaws.
Section 4. Meetings. The
annual meeting of the Board of Directors shall be held without
notice immediately following the annual meeting of the
shareholders of the corporation, on the same date and at
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the same place as said annual meeting of the shareholders. The
Board by resolution may provide for regular meetings, which may
be held without notice as and when scheduled in such resolution.
Special meetings of the Board may be called at any time by the
Chairman of the Board, the Chief Executive Officer, the Lead
Director, or by any two or more Directors.
Section 5. Notice and Waiver;
Quorum. Notice of any special meeting of the
Board of Directors shall be given to each Director personally or
by mail, telegram, cablegram orfacsimile,
overnight courier, telephone or
e-mail,
or by any other means customary for expedited business
communications, at leastone
day24 hours prior to the meeting.
Such notice may be waived, either before or after the meeting;
and the attendance of a Director at any special meeting shall of
itself constitute a waiver of notice of such meeting and of any
and all objections to the place or time of the meeting, or to
the manner in which it has been called or convened, except where
a Director states, at the beginning of the meeting, any such
objection or objections to the holding of the meeting or
the transaction of business.at
such meeting. A majority of the Board of Directors
then in office shall constitute a quorum at any
Directors meeting.
Section 6. No Meeting Necessary,
When. Any action required by law or permitted to
be taken at any meeting of the Board of Directors or any
committee thereof may be taken without a meeting if written
consent, setting forth the action so taken, shall be signed by
all the Directors or committee members. Such consent shall have
the same force and affect as a unanimous vote of the Board of
Directors and shall be filed with the Secretary and recorded in
the Minute Book of the corporation.
Section 7. Telephone Conference
Meetings. Members of the Board of Directors, or
any committee designated by the Board of Directors, may
participate in a meeting of the Board or committee by means of
telephone conference or similar communications equipment by
means of which all persons participating in the meeting can hear
each other, and participation in a meeting pursuant to this
section shall constitute presence in persons at such meeting.
Section 8. Voting. At
all meetings of the Board of Directors each Director shall have
one vote and, except as otherwise provided herein or provided by
law, all questions shall be determined by a majority vote of the
Directors present at any meeting at which a quorum is
present.
Section 9. Removal. Any
one or more Directors or the entire Board of Directors may be
removed from office, with or without cause, by the affirmative
vote of the shareholders of the corporation holding at least 80%
of the issued and outstanding shares of common stock of the
corporation at any shareholders meeting with respect to
which notice of such purpose has been given. This section, as it
relates to the removal of Directors of the corporation by the
shareholders of the corporation holding at least 80% of the
issued and outstanding shares of common stock of the
corporation, shall not be altered, deleted or rescinded except
upon the affirmative vote of the shareholders of the corporation
holding at least 80% of the issued and outstanding shares of
common stock of the corporation.
Section 10.Vacancies Vacancies. Any
vacancy occurring in the Board of Directors may be filled by the
shareholders, by the Board of Directors, or, if the Directors
remaining in office constitute less than a quorum, a majority of
the remaining Directors or the sole remaining Director, as the
case may be. Any Director elected or appointed to fill a vacancy
shall serve the unexpired term of his or her predecessor;
provided that any director filling a vacancy by reason of an
increase in the number of directors, where such vacancy is
filled by the Directors, shall serve until the next annual
meeting of shareholders and until the election and qualification
of his or her successor. Any vacancy occurring
in the Board of Directors caused by an increase in the number of
Directors may be filled by the shareholders of the corporation
for a full classified
3-year term,
or such vacancy may be filled by the Board of Directors until
the next annual meeting of the shareholders. Any vacancy
occurring in the Board of Directors caused by the removal of a
Director shall be filled by the shareholders, or if authorized
by the shareholders, by the Board of Directors, for the
unexpired term of the Director so removed. Any vacancy occurring
in the Board of Directors caused by a reason other than an
increase in the number of Directors or removal of a Director may
be filled by the Board of Directors, or the shareholders, for
the unexpired term of the Director whose position is vacated.
Vacancies in the Board of Directors filled by the Board of
Directors may be filled by the affirmative vote of a majority of
the remaining Directors, though less than a quorum, or the sole
remaining Director, as the case may be.
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Section 11. Dividends. The
Board of Directors may not make a distribution to the
shareholders if, after giving it effect, the corporation would
not be able to pay its debts as they become due in the usual
course of business or the corporations total assets would
be less than the sum of its total liabilities plus the amount
that would be needed, if the corporation were to be dissolved at
the time of the distribution, to satisfy the preferential rights
upon dissolution of the shareholders whose preferential rights
are superior to those receiving the distribution. The effect of
the distribution shall be determined as set forth in
Section 14-2-640
of the Georgia Business Corporation Code.
Section 12. Committees. In
the discretion of the Board of Directors,
saidthe Board from time to time
may elect or appoint, from its own members, one or more
committees assaidthe Board may
see fit to establish. Each such committee shall consist of two
or more Directors, and each shall possess such powers and be
charged with such responsibilities, subject to the limitations
imposed by applicable law, as the Board by resolution may from
time to time prescribe.
Section 13. Officers and
Salaries. The Board of Directors shall elect all
officers of the corporation and the Board of Directors, or
a duly authorized committee of the Board of Directors, shall
fix their compensation, except that the Board shall not
have the responsibility to approve salaries for officers who are
not executive officers.
Section 14. Compensation of
Directors. Directors as such shall be entitled to
receive compensation for their service as Directors and such
fees and expenses, if any, for attendance at each regular or
special meeting of the Board and any adjournments thereof, as
may be fixed from time to time by resolution of the Board, and
such fees and expenses shall be payable even though an
adjournment be had because of the absence of a quorum; provided,
however, that nothing herein contained shall be construed to
preclude any director from serving the corporation in any other
capacity and receiving compensation therefor. Members of either
standing or special committees may be allowed such compensation
as may be provided from time to time by resolution of the Board
for serving upon and attending meetings of such committees.
Section 15. Emeritus
Directors. When a member of the Board of
Directors of the corporation attains seventy two (72) years
of age, such director shall automatically, at his option, either
(i) retire from the Board of Directors of the corporation;
or (ii) be appointed as a member of the Emeritus Board of
Directors of the corporation.
Notwithstanding the
previous sentence, once a member of the Board of Directors of
the corporation has (a) attained sixty-two (62) years
of age and (b) served five (5) consecutive years as a
member of the Board of Directors of the corporation, he may
request an immediate appointment to the Emeritus Board of
Directors of the corporation, and the Board of Directors of the
corporation, in its discretion, may grant such request.
Members of the Emeritus Board of Directors of the
corporation shall be appointed annually by the Chairman of the
Board of Directors of the corporation at the
Aa
nnual
Mm
eeting
of the Board of Directors of the corporation, or from time to
time thereafter. Each member of the Emeritus Board of Directors
of the corporation, except in the case of his earlier death,
resignation, retirement, disqualification or removal, shall
serve until the next succeeding
Aa
nnual
Mm
eeting
of the Board of Directors of the corporation. Any individual
appointed as a member of the Emeritus Board of Directors of the
corporation may, but shall not be required to, attend meetings
of the Board of Directors of the corporation and may participate
in any discussions thereat, but such individual may not vote at
any meeting of the Board of Directors of the corporation or be
counted in determining a quorum at any meeting of the Board of
Directors of the corporation, as provided in Section 5 of
Article III of the bylaws of the corporation. It shall be
the duty of the members of the Emeritus Board of Directors of
the corporation to serve as goodwill ambassadors of the
corporation, but such individuals shall not have any
responsibility or be subject to any liability imposed upon a
member of the Board of Directors of the corporation or in any
manner otherwise be deemed to be a member of the Board of
Directors of the corporation.
Each member of the Emeritus
Board of Directors shall treat information regarding the
corporation shared with the Emeritus Board of Directors as
strictly confidential and will not disclose such information to
any third-party without the corporations consent.
Each member of the Emeritus Board of Directors of the
corporation shall be paid such compensation as may be set from
time to time by the Chairman of the Board of Directors of the
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corporation and shall remain eligible to participate in any
Director Stock Purchase Plan maintained by, or participated in,
from time to time by the corporation according to the terms and
conditions thereof.
Section 16. Advisory
Directors. The Board of Directors of the
corporation may at its annual meeting, or from time to time
thereafter, appoint any individual to serve as a member of an
Advisory Board of Directors of the corporation. Any individual
appointed to serve as a member of an Advisory Board of Directors
of the corporation shall be entitled to attend all meetings of
the Board of Directors and may participate in any discussion
thereat, but such individual may not vote at any meeting of the
Board of Directors or be counted in determining a quorum for
such meeting. It shall be the duty of members of the Advisory
Board of Directors of the corporation to advise and provide
general policy advice to the Board of Directors of the
corporation at such times and places and in such groups and
committees as may be determined from time to time by the Board
of Directors, but such individuals shall not have any
responsibility or be subject to any liability imposed upon a
director or in any manner otherwise deemed a director.
The same compensation paid to directors for their services as
directors shall be paid to members of an
Advisorybe deemed a director. Each member of the
Advisory Board of Directors shall treat information regarding
the corporation shared with the Advisory Board of Directors as
strictly confidential and will not disclose such information to
any third-party without the corporations consent. Each
member of the Advisory Board of Directors of the corporation
shall be paid such compensation as may be set from time to time
by the Chairman of the Board of Directors of the
corporation for their services as advisory
directors. Each member of the Advisory Board of
Directors except in the case of his earlier death, resignation,
retirement, disqualification or removal, shall serve until the
next succeeding annual meeting of the Board of Directors and
thereafter until his successor shall have been appointed.
ARTICLE IV.
Article IV.
OFFICERS
Section 1. Selection. The
Board of Directors at each annual meeting shall elect or appoint
a Chief Executive Officer, a President, a Secretary and a
Treasurer, each to serve for the ensuing year and until his
successor is elected and qualified, or until his earlier
resignation, removal from office, or death. The Board of
Directors, at such meeting, may or may not, in the discretion of
the Board, elect a Chairman of the Board, a Chief Operating
Officer, one or more Vice Chairmen of the Board, one or
moreChairmen of the Board-Emeritus, one or more
Vice Presidents, one or more Assistant Vice Presidents,
one or more Assistant Secretaries, one or more Assistant
Treasurers, and such other officers as the Board of Directors,
in its discretion, shall determine are desirable for the
management of the business and affairs of the corporation. When
more than one Vice President is elected, they may, in the
discretion of the Board, be designated Senior
Executive Vice
President,FirstExecutive Vice
President, Second Vice President, etc., according to
seniority or rankorotherwise, and any
person may hold two or more offices, except that neither the
Chief Executive Officer nor the President shall also serve as
the Secretary.
Section 2. Removal,
Vacancies. Any officers of the corporation may be
removed from office at any time by the Board of Directors, with
or without cause. Any vacancy occurring in any office of the
corporation may be filled by the Board of Directors.
Section 3. Chief Executive
Officer. The Chief Executive Officer shall, under
the direction of the Board of Directors, have responsibility for
the general direction of the corporations business,
policies and affairs. The Chief Executive Officer shall have
such other authority and perform such other duties as usually
appertain to the chief executive office in business corporations
or as are provided by the Board of Directors.
Section 4. President. The
President shall, under the direction of the Chief Executive
Officer, have direct superintendence of the corporations
business, policies, properties and affairs. The President shall
have such further powers and duties as from time to time may be
conferred upon or assigned to such officer by the Board of
Directors, the Chairman of the Board or the Chief Executive
Officer.
Section 5. Vice
President. The Senior Executive Vice
Presidents, if any, the Executive Vice Presidents, if
any, and Vice Presidents, if any, shall have such
powers and duties as from time to time may be conferred upon or
assigned to them by the Board of Directors, the Chairman of the
Board, the
B-2-8
Chief Executive Officer, or the President.
An A Senior Executive Vice President or
an Executive Vice President or other officer may
be responsible for the assignment of duties to subordinate Vice
Presidents.
Section 6. Secretary. It
shall be the duty of the Secretary to keep a record of the
proceedings of all meetings of the shareholders and Board of
Directors; to keep the stock records of the corporation; to
notify the shareholders and Directors of meetings as provided by
these bylaws;: and to perform such other duties as may be
prescribed by the Board of Directors, the Chairman of the Board,
the Chief Executive Officer, or the President. Any Assistant
Secretary, if elected, shall perform the duties of the Secretary
during the absence or disability of the Secretary and shall
perform such other duties as may be prescribed by the Board of
Directors, the Chairman of the Board, the Chief Executive
Officer, the President or the Secretary.
Section 7. Treasurer. The
Treasurer shall keep, or cause to be kept, the financial books
and records of the corporation, and shall faithfully account for
its funds. He shall make such reports as may be necessary to
keep the Board of Directors, the Chairman of the Board, the
Chief Executive Officer, and the President fully informed at all
times as to the financial condition of the corporation, and
shall perform such other duties as may be prescribed by the
Board of Directors, the Chairman of the Board, the Chief
Executive Officer or the President. Any Assistant Treasurer, if
elected, shall perform the duties of the Treasurer during the
absence or disability of the Treasurer, and shall perform such
other duties as may be prescribed by the Board of Directors, the
Chief Executive Officer, Chairman of the Board, the President or
the Treasurer.
ARTICLE V.
Article V.
CONTRACTS,
ETC.
Section 1. Contracts, Deeds and
Loans. All contracts, deeds, mortgages, pledges,
promissory notes, transfers and other written instruments
binding upon the corporation shall be executed on behalf of the
corporation by the Chief Executive Officer, Chairman of the
Board, the President, any Executive Vice President, any Group
Executives who report directly to such Executive Vice
Presidents, or by such other officers or agents as the Board of
Directors may designate from time to time. Any such instrument
required to be given under the seal of the corporation may be
attested by the Secretary or Assistant Secretary of the
corporation.
Section 2. Proxies. The
Chief Executive Officer, Chairman of the Board, the President,
any Vice President, the Secretary or the Treasurer of the
corporation shall have full power and authority, on behalf of
the corporation, to attend and to act and to vote at any
meetings of the shareholders, bond holders or other security
holders of any corporation, trust or association in which the
corporation may hold securities, and at and in connection with
any such meeting shall possess and may exercise any and all of
the rights and powers incident to the ownership of such
securities and which as owner thereof the corporation might have
possessed and exercised if present, including the power to
execute proxies and written waivers and consents in relation
thereto. In the case of conflicting representation at any such
meeting, the corporation shall be represented by its highest
ranking officer, in the order first above stated.
Notwithstanding the foregoing, the Board of Directors may, by
resolution, from time to time, confer like powers upon any other
person or persons.
Section 3. Inspection of
Records. The record of shareholders,
accounting records and written proceedings of the shareholders,
the Board of Directors and committees of the Board of Directors
shall be open for inspection and copying during regular business
hours at a reasonable location specified by the corporation
solely by shareholders owning not less than two percent (2%) of
the outstanding shares of the corporation upon at least five
(5) days written notice of demand to inspect and copy such
records. The right of inspection by a shareholder may be granted
only if the demand is made in good faith and for a proper
purpose that is reasonably relevant to a legitimate interest as
a shareholder, describes with reasonable particularity the
purpose for such demand and the records desired for inspection,
the records are directly connected with such purpose and are to
be used only for the stated purpose.
B-2-9
ARTICLE VI.
Article VI.
CHECKS
AND DRAFTS
Checks and drafts of the corporation shall be signed by such
officer or officers or such other employees or persons as the
Board of Directors may from time to time designate.
ARTICLE VII.
Article VII.
STOCK
Section 1. Certificates of
Stock. Shares of capital stock of the corporation
shall be issued in certificate or book-entry form. Certificates
shall be numbered consecutively and entered into the stock book
of the corporation as they are issued. Each certificate shall
state on its face the fact that the corporation is a Georgia
corporation, the name of the person to whom the shares are
issued, the number and class of shares (and series, if any)
represented by the certificate and their par value, or a
statement that they are without par value. In addition, when and
if more than one class of shares shall be outstanding, all share
certificates of whatever class shall state that the corporation
will furnish to any shareholder upon request and without charge
a full statement of the designations, relative rights,
preferences and limitations of the shares of each class
authorized to be issued by the corporation.
Section 2. Signature; Transfer Agent;
Registrar. Share certificates shall be signed by
the President or any Vice President and by the Secretary or an
Assistant Secretary of the corporation, and shall bear the seal
of the corporation or a facsimile thereof. The Board of
Directors may from time to time appoint transfer agents and
registrars for the shares of capital stock of the corporation or
any class thereof, and when any share certificate is
countersigned by a transfer agent or registered by a registrar,
the signature of any officer of the corporation appearing
thereon may be a facsimile signature. In case any officer who
signed, or whose facsimile signature was placed upon, any such
certificate shall have died or ceased to be such officer before
such certificate is issued, it may nevertheless be issued with
the same effect as if he continued to be such officer on the
date of issue.
Section 3. Stock
Book. The corporation shall keep at its principal
office, or at the office of its transfer agent, wherever
located, with a copy at the principal office of the corporation,
a book, to be known as the stock book of the corporation,
containing in alphabetical order name of each shareholder of
record, together with his address, the number of shares of each
kind, class or series of stock held by him and his social
security number. The stock book shall be maintained in current
condition. The stock book, including the share register, or the
duplicate copy thereof maintained at the principal office of the
corporation, shall be available for inspection and copying by
any shareholder at any meeting of the shareholders upon request,
or, for a bona fide purpose which is in the best interest of the
business of the corporation, at other times upon the written
request of any shareholder or holder of a voting trust
certificate. The stock book may be inspected and copied either
by a shareholder or a holder of a voting trust certificate in
person, or by their duly authorized attorney or agent. The
information contained in the stock book and share register may
be stored on punch cards, magnetic tape, or any other approved
information storage devices related to electronic data
processing equipment, provided that any such method, device, or
system employed shall first be approved by the Board of
Directors, and provided further that the same is capable of
reproducing all information contained therein, in legible and
understandable form, for inspection by shareholders or for any
other proper corporate purpose.
Section 4. Transfer of Stock;
Registration of Transfer. The stock of the
corporation shall be transferred only by surrender of the
certificateandor compliance with the
applicable procedures for stock held in book-entry form and, in
each case, transfer upon the stock book of the
corporation. Upon surrender to the corporation, or to any
transfer agent or registrar for the class of shares represented
by the certificate surrendered, of a certificate properly
endorsed for transfer, accompanied by such assurances as the
corporation, or such transfer agent or registrar, may require as
to the genuineness and effectiveness of each necessary
endorsement and satisfactory evidence of compliance with all
applicable laws relating to securities transfers and the
collection of taxes, it shall be the duty of the corporation, or
such transfer agent or registrar, to issue a new certificate,
cancel the old certificate and record the transactions upon the
stock book of the corporation.
B-2-10
Section 5. Registered
Shareholders. Except as otherwise required by
law, the corporation shall be entitled to treat the person
registered on its stock book as the owner of the shares of the
capital stock of the corporation as the person exclusively
entitled to receive notification, dividends or other
distributions, to vote and to otherwise exercise all the rights
and powers of ownership and shall not be bound to recognize any
adverse claim.
Section 6. Record
Date. For the purpose of determining shareholders
entitled to notice of or to vote at any meeting of shareholders
or any adjournment thereof, or to express consent to or dissent
from any proposal without a meeting, or for the purpose of
determining shareholders entitled to receive payment of any
dividend or the allotment of any rights, or for the purpose of
any other action affecting the interests of shareholders, the
Board of Directors may fix, in advance, a record date. Such date
shall not be more than seventy (70) nor less than ten
(10) days before the date of any such meeting nor more than
seventy (70) days prior to any other action. In each case,
except as otherwise provided by law, only such persons as shall
be shareholders of record on the date so fixed shall be entitled
to notice of and to vote at such meeting and any adjournment
thereof, to express such consent or dissent, or to receive
payment of such dividend or such allotment of rights, or
otherwise be recognized as shareholders for any other related
propose, notwithstanding any registration of a transfer of
shares on the stock book of the corporation after any such
record date so fixed.
Section 7.
Lost
Certificates. When a person to whom a certificate
of stock has been issued alleges it to have been lost, destroyed
or wrongfully taken, and if the corporation, transfer agent or
registrar is not on notice that such certificate has been
acquired by a bona fide purchaser, a new certificate may be
issued upon such owners compliance with all of the
following conditions, to
wit: (a) He shall file with the Secretary of the
corporation, and the transfer agent or the registrar, his
request for the issuance of a new certificate, with an affidavit
setting for the time, place and circumstances of the
loss;
: (b) He shall also file with the Secretary,
and the transfer agent or the registrar, a bond with good and
sufficient security acceptable to the corporation and the
transfer agent or the registrar, or other agreement of
indemnity
, acceptable to the corporation and the transfer
agent or the registrar, conditioned to indemnify and save
harmless the corporation and the transfer agent or the registrar
from any and all damage, liability and expense of every nature
whatsoever resulting from the corporations or the transfer
agents or the registrars issuing a new certificate
in place of the one alleged to have been lost; and (c) He
shall comply with such other reasonable requirements as the
Board of Directors, the Chief Executive Officer or the President
of the corporation, and the transfer agent or the registrar
shall deem appropriate under the circumstances.
Section 8. Replacement of Mutilated
Certificates. A new certificate may be issued in
lieu of any certificate previously issued that may be defaced or
mutilated upon surrender for cancellation of a part of the old
certificate sufficient in the opinion of the Secretary and the
transfer agent or the registrar to duly identify the defaced or
mutilated certificate and to protect the corporation and the
transfer agent or the registrar against loss or liability. Where
sufficient identification is lacking, a new certificate may be
issued upon compliance with the conditions set forth in
Section 7 of this Article VII.
ARTICLE VIII.
Article VIII.
INDEMNIFICATION
AND REIMBURSEMENT
Section 1. Indemnification. Subject
to any express limitations imposed by applicable law, every
person now or hereafter serving as a director, officer, employee
or agent of the corporation and all former directors and
officers, employees or agents shall be indemnified and held
harmless by the corporation to the fullest extent
permitted under the Georgia Business Corporation Code, including
from and against the obligation to pay a judgment,
settlement, penalty, fine (including an excise tax assessed with
respect to an employee benefit plan), and reasonable expenses
(including attorneys fees and disbursements) that may be
imposed upon or incurred by him or her in connection with or
resulting from any threatened, pending, or completed, action,
suit, or proceeding, whether civil, criminal, administrative,
investigative, formal or informal, in which he or she is, or is
threatened to be made, a named defendant or respondent:
(a) because he or she is or was a director, officer,
employee, or agent of the corporation; (b) because he or
she is or was serving at the request of the corporation as a
director, officer, partner, trustee, employee, or agent of
another corporation, partnership, joint venture, trust, employee
benefit plan
B-2-11
or other enterprise; or (c) because he or she is or was
serving as an employee of the corporation who was employed to
render professional services as a lawyer or an accountant to the
corporation; regardless of whether such person is acting in such
a capacity at the time such obligation shall have been imposed
or incurred, if (i) such person acted in a manner he or she
believed in good faith to be in or not opposed to the best
interests of the corporation, and, with respect to any criminal
proceeding, if such person had no reasonable cause to believe
his or her conduct was unlawful or (ii), with respect to an
employee benefit plan, such person believed in good faith that
his or her conduct was in the interests of the participants in
and beneficiaries of the plan.
Section 2. Advancement. Reasonable
expenses incurred in any proceeding shall be paid by the
corporation in advance of the final disposition of such
proceeding if authorized by the Board of Directors in the
specific case, or if authorized in accordance with procedures
adopted by the Board of Directors, upon receipt of a written
undertaking executed personally by or on behalf of the director,
officer, employee, or agent to repay such amount if it shall
ultimately be determined that he or she is not entitled to be
indemnified by the corporation, and a written affirmation of his
or her good faith belief that he or she has met the standard of
conduct required for indemnification.
Section 3. Miscellaneous. The
foregoing rights of indemnification and advancement of expenses
shall not be deemed exclusive of any other right to which those
indemnified may be entitled, and the corporation may provide
additional indemnity and rights to its directors, officers,
employees or agents to the extent they are consistent with law.
The provisions of this Article VIII shall cover proceedings
whether now pending or hereafter commenced and shall be
retroactive to cover acts or omissions or alleged acts or
omissions which heretofore have taken place. In the event of
death of any person having a right of indemnification or
advancement of expenses under the provisions of this
Article VIII, such right shall inure to the benefit of his
or her heirs, executors, administrators and personal
representatives. If any part of this Article VIII should be
found to be invalid or ineffective in any proceeding, the
validity and effect of the remaining provisions shall not be
affected.
Section 4. Intent. It is
the intent of the corporation to indemnify persons covered by
Section I of this Article VIII to the full extent
permitted by the Georgia Business Corporation Code, as amended
from time to time. To the extent that the Georgia Business
Corporation Code is hereafter amended to permit a Georgia
business corporation to provide to such persons greater rights
to indemnification than those specifically set forth
hereinabove, this Article shall be deemed amended to require
such greater indemnification, in each case consistent with the
Georgia Business Corporation Code as so amended from time to
time. No amendment, modification or rescission of this Article,
or any provision hereof, the effect of which would diminish the
rights to indemnification or advancement of expenses as set
forth herein shall be effective as to any person with respect to
any action taken or omitted by such person prior to such
amendment, modification or rescission.
ARTICLE IX.
Article IX.
MERGERS,
CONSOLIDATIONS AND OTHER DISPOSITIONS OF ASSETS
The affirmative vote of the shareholders of the corporation
holding at least 80% of the issued and outstanding shares of
common stock of the corporation shall be required to approve any
merger or consolidation of the corporation with or into any
corporation, and the sale, lease, exchange or other disposition
of all, or substantially all, of the assets of the corporation
to or with any other corporation, person or entity, with respect
to which the approval of the corporations shareholders is
required by the provisions of the corporate laws of the State of
Georgia. This Article shall not be altered, deleted or rescinded
except upon the affirmative vote of the shareholders holding at
least 80% of the issued and outstanding shares of common stock
of the corporation.
ARTICLE X.
Article X.
CRITERIA
FOR CONSIDERATION OF
TENDER
OR OTHER
OFFERSACTIONS
BY THE BOARD
Section 1.Factors to
Consider Alternative
Stakeholders. In discharging the duties
of their respective positions and in determining what is
believed to be in the best interests of the
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corporation, the Board of Directors, committees thereof
and individual directors, in addition to considering the effects
of any action on the corporation and its shareholders, may
consider the interests of employees, customers, suppliers, and
creditors of the corporation and its subsidiaries, the
communities in which offices or other establishments of the
corporation and its subsidiaries are located, and all other
factors such directors consider pertinent; provided, however,
that this provision shall be deemed solely to grant
discretionary authority to the directors and shall not be deemed
to provide to any constituency any right to be considered.
. The Board of Directors of the corporation may,
if it deems it advisable, oppose a tender or other offer for the
corporations securities, whether the offer is in cash or
in the securities of a corporation or otherwise. When
considering whether to oppose an offer, the Board of Directors
may, but is not legally obligated to, consider any pertinent
issues; by way of illustration, but not of limitation, the Board
of Directors may, but shall not be legally obligated to,
consider all or any of the following:
(i) whether the offer price is acceptable based on
the historical and present operating results or financial
condition of the corporation;
(ii) whether a more favorable price could be
obtained for the corporations securities in the
future;
(iii) the impact which an acquisition of the
corporation would have on the employees and customers of the
corporation and its subsidiaries and the communities which they
serve;
(iv) the reputation and business practices of the
offeror and its management and affiliates as they would affect
the employees and customers of the corporation and its
subsidiaries and the future value of the corporations
stock;
(v) the value of the securities, if any, that the
offeror is offering in exchange for the corporations
securities, based on an analysis of the worth of the corporation
as compared to the offeror or any other entity whose securities
are being offered; and
(vi) any antitrust or other legal or regulatory
issues that are raised by the offer.
Section 2. Appropriate
Actions. If the Board of Directors determines
that an offerany proposed business
combination should be rejected, it may take any lawful
action to accomplish its purpose including, but not limited to,
any or all of the following: (i) advising shareholders not
to accept the offer; (ii) litigation against the offeror;
(iii) filing complaints with governmental and regulatory
authorities; (iv) acquiring the corporations
securities; (v) selling or otherwise issuing authorized but
unissued securities of the corporation or treasury stock or
granting options or rights with respect thereto;
(vi) acquiring a company to create an antitrust or other
regulatory problem for the offeror; and (vii) soliciting a
more favorable offer from another individual or entity.
ARTICLE XI.
Article XI.
AMENDMENT
Except as otherwise specifically provided herein, the bylaws of
the corporation may be altered, amended or added to by a
majority of the issued and outstanding shares of common
stock of the corporation present and voting therefor at a
shareholders meetingtotal number of votes
of each voting group entitled to vote thereon at a meeting of
shareholders where such business is properly brought before the
meeting in accordance with the bylaws or, subject to
such limitations as the shareholders may from time to time
prescribe, by a majority vote of all the Directors then holding
office at any meeting of the Board of Directors.
ARTICLE XII.
BUSINESS
COMBINATIONS
All of the requirements of Article 11, Part 3,
of the Georgia Business Corporation Code, included in
Sections 14-2-1131
through 1133 (and any successor provisions thereto), shall be
applicable to the corporation in connection with any business
combination, as defined therein, with any interested
shareholder, as defined therein.
B-2-13
As Amended
and Restated
Effective
[ ],
2007
AMENDED
AND RESTATED BYLAWS
OF
TOTAL SYSTEM SERVICES, INC.
ARTICLE I.
OFFICES
Section 1. Principal
Office. The principal office for the transaction
of the business of the corporation shall be located in Muscogee
County, Georgia, at such place within said County as may be
fixed from time to time by the Board of Directors.
Section 2. Other Offices. Branch
offices and places of business may be established at any time by
the Board of Directors at any place or places, whether within or
without the State of Georgia.
ARTICLE II.
SHAREHOLDERS MEETINGS
Section 1. Meetings, Where
Held. Any meeting of the shareholders of the
corporation, whether an annual meeting or a special meeting, may
be held either at the principal office of the corporation or at
any place in the United States within or without the State of
Georgia.
Section 2. Annual
Meeting. The annual meeting of the shareholders
of the corporation for the election of Directors and for the
transaction of such other business as may properly come before
the meeting shall be held on such date and at such time and
place as is determined by the Board of Directors of the
corporation each year. Unless otherwise determined by the Board
of Directors, the Chairman of the Board or the Chief Executive
Officer shall act as chairman at all annual meetings. The
chairman of each annual meeting shall announce the date and time
for the opening and closing of the polls for each matter to be
voted on by the corporations shareholders.
Section 3. Special
Meetings. A special meeting of the shareholders
of the corporation, for any purpose or purposes whatsoever, may
be called at any time by (i) the Board of Directors or
(ii) upon the action of a majority of the total number of
all votes entitled to be cast on any issue proposed to be
considered at the proposed special meeting. Such a call for a
special meeting must state the purpose of the meeting. Unless
otherwise determined by the Board of Directors, the Chairman of
the Board or the Chief Executive Officer shall act as chairman
of all special meetings. The chairman of each special meeting
shall announce the date and time for the opening and closing of
the polls for each matter to be voted on by the
corporations shareholders.
Section 4. Nature of Business at
Meetings of Shareholders. No business may be
transacted at an annual meeting of shareholders, other than
business that is either (a) specified in the notice of
meeting (or any supplement thereto) given by or at the direction
of the Board of Directors (or any duly authorized committee
thereof), (b) otherwise properly brought before the annual
meeting by or at the direction of the Board of Directors (or any
duly authorized committee thereof) or (c) otherwise
properly brought before the annual meeting by any shareholder of
the corporation (i) who is a shareholder of record on the
date of the giving of the notice by such shareholder as required
by this Section 4 and on the record date for the
determination of shareholders entitled to notice of and to vote
at such annual meeting and (ii) who complies with the
notice procedures set forth in this Section 4.
In addition to any other applicable requirements, for business
to be properly brought before an annual meeting by a
shareholder, such shareholder must have given timely notice
thereof in proper written form to the Secretary of the
corporation.
To be timely, a shareholders notice to the Secretary must
be delivered to or mailed and received at the principal
executive offices of the corporation not less than 90 days
nor more than 120 days prior to the anniversary date of the
immediately preceding annual meeting of shareholders; provided,
however, that in the event that the annual meeting is called for
a date that is not within 25 days before or after such
anniversary date, notice by the shareholder in order to be
timely must be so received not later than the close of business
on the 10th day following the day on which notice of the
date of the annual meeting was mailed by the corporation or
public disclosure of the date of the annual meeting was made by
the
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corporation, whichever first occurs; and, provided further, that
with respect to the corporations 2008 annual meeting of
shareholders, unless the immediately preceding proviso shall
apply, notice by the shareholder in order to be timely must be
so received no earlier than December 24, 2007 and not later
than the close of business on the 10th day following the
day on which public disclosure was made announcing that the
distribution of the corporations shares owned by Synovus
Financial Corp. (Synovus) to the shareholders of
Synovus has been completed.
To be in proper written form, a shareholders notice to the
Secretary must set forth as to each matter such shareholder
proposes to bring before the annual meeting (i) a brief
description of the business desired to be brought before the
annual meeting and the reasons for conducting such business at
the annual meeting, (ii) the name and record address of
such shareholder, (iii) the class and series and number of
shares of each class and series of capital stock of the
corporation which are owned beneficially or of record by such
shareholder, (iv) a description of all arrangements or
understandings between such shareholder and any other person or
persons (including their names) in connection with the proposal
of such business by such shareholder and any material interest
of such shareholder in such business and (v) a
representation that such shareholder is a holder of record of
stock of the corporation entitled to vote at such meeting and
that such shareholder intends to appear in person or by proxy at
the annual meeting to bring such business before the meeting.
In addition, notwithstanding anything in this Section 4 to
the contrary, a shareholder intending to nominate one or more
persons for election as a director at an annual or special
meeting of shareholders must comply with Section 5 of this
Article II for such nominations to be properly brought
before such meeting.
No business shall be conducted at the annual meeting of
shareholders except business brought before the annual meeting
in accordance with the procedures set forth in this
Section 4; provided, however, that, once business has been
properly brought before the annual meeting in accordance with
such procedures, nothing in this Section 4 shall be deemed
to preclude discussion by any shareholder of any such business.
If the chairman of an annual meeting determines that business
was not properly brought before the annual meeting in accordance
with the foregoing procedures, the chairman shall declare to the
meeting that the business was not properly brought before the
meeting and such business shall not be transacted.
No business shall be conducted at a special meeting of
shareholders except for such business as shall have been brought
before the meeting pursuant to the corporations notice of
meeting.
Section 5. Nomination of
Directors. Only persons who are nominated in
accordance with the following procedures shall be eligible for
election as directors of the corporation, subject to the rights
of holders of any class or series of preferred stock to nominate
and elect directors under certain circumstances. Nominations of
persons for election to the Board of Directors may be made at
any annual meeting of shareholders, or at any special meeting of
shareholders called for the purpose of electing directors,
(a) by or at the direction of the Board of Directors (or
any duly authorized committee thereof) or (b) by any
shareholder of the corporation (i) who is a shareholder of
record on the date of the giving of the notice by such
shareholder as required by this Section 5 and on the record
date for the determination of shareholders entitled to notice of
and to vote at such meeting and (ii) who complies with the
notice procedures set forth in this Section 5.
In addition to any other applicable requirements, for a
nomination to be made by a shareholder, such shareholder must
have given timely notice thereof in proper written form to the
Secretary of the corporation.
To be timely, a shareholders notice to the Secretary must
be delivered to or mailed and received at the principal
executive offices of the corporation (a) in the case of an
annual meeting, not less than 90 days nor more than
120 days prior to the anniversary date of the immediately
preceding annual meeting of shareholders; provided, however,
that in the event that the annual meeting is called for a date
that is not within 25 days before or after such anniversary
date, notice by the shareholder in order to be timely must be so
received not later than the close of business on the
10th day following the day on which notice of the date of
the annual meeting was mailed by the corporation or public
disclosure of the date of the annual meeting was made by the
corporation, whichever first occurs; and, provided further, that
with respect to the corporations 2008 annual meeting of
shareholders, unless the immediately preceding proviso shall
apply, notice by the shareholder in order to be timely must be
so received no earlier than
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December 24, 2007 and not later than the close of business
on the 10th day following the day on which public
disclosure was made announcing that the distribution of the
corporations shares owned by Synovus to the shareholders
of Synovus has been completed; and (b) in the case of a
special meeting of shareholders called for the purpose of
electing directors, not later than the close of business on the
10th day following the day on which notice of the date of
the special meeting was mailed or public disclosure of the date
of the special meeting was made, whichever first occurs.
To be in proper written form, a shareholders notice to the
Secretary must set forth (a) as to each person whom the
shareholder proposes to nominate for election as a director
(i) the name, age, business address and residence address
of the person, (ii) the principal occupation and employment
of the person, (iii) the class and series and number of
shares of each class and series of capital stock of the
corporation which are owned beneficially or of record by the
person, if any, and (iv) any other information relating to
the person that would be required to be disclosed in a proxy
statement or other filings required to be made in connection
with solicitations of proxies for election of directors pursuant
to Section 14 of the Securities Exchange Act of 1934, as
amended (the Exchange Act) (or in any law or statute
replacing such section), and the rules and regulations
promulgated thereunder; and (b) as to the shareholder
giving the notice (i) the name and record address of such
shareholder, (ii) the class and series and number of shares
of each class and series of capital stock of the corporation
which are owned beneficially or of record by such shareholder,
(iii) a description of all arrangements or understandings
between such shareholder and each proposed nominee and any other
person or persons (including their names) pursuant to which the
nomination(s) are to be made by such shareholder, (iv) a
representation that such shareholder is a holder of record of
stock of the corporation entitled to vote at such meeting and
that such shareholder intends to appear in person or by proxy at
the meeting to nominate the person or persons named in its
notice and (v) any other information relating to such
shareholder that would be required to be disclosed in a proxy
statement or other filings required to be made in connection
with solicitations of proxies for election of directors pursuant
to Section 14 of the Exchange Act (or in any law or statute
replacing such section) and the rules and regulations
promulgated thereunder. Such notice must be accompanied by a
written consent of each proposed nominee to being named as a
nominee and to serve as a director if elected.
No person shall be eligible for election as a director of the
corporation unless nominated in accordance with the procedures
set forth in this Section 5. If the chairman of the meeting
determines that a nomination was not made in accordance with the
foregoing procedures, the chairman shall declare to the meeting
that the nomination was defective and such defective nomination
shall be disregarded.
Section 6. Notice of
Meetings. Unless waived in accordance with
Section 7, notice of each annual meeting and of each
special meeting of the shareholders of the corporation shall be
given to each shareholder of record entitled to vote at the
meeting not less than ten (10) days nor more than
sixty (60) days prior to said meeting. Such notice
shall specify the place, date and hour of the meeting and, in
the case of a special meeting, it shall also specify the purpose
or purposes for which the meeting is called.
Section 7. Waiver of
Notice. Notice of any annual or special meeting
of the shareholders of the corporation may be waived by any
shareholder, either before or after the meeting; and the
attendance of a shareholder at a meeting, either in person or by
proxy, shall of itself constitute waiver of notice and waiver of
any and all objections to the place or time of the meeting, or
to the manner in which it has been called or convened, unless
the shareholder, at the beginning of the meeting, objects to the
holding of the meeting or the transaction of business at such
meeting.
Section 8. Quorum, Voting and
Proxy. Shareholders representing a majority of
the issued and outstanding shares of common stock of the
corporation shall constitute a quorum at a shareholders
meeting. Each shareholder shall be entitled to one vote for each
share of common stock owned. Any shareholder may be represented
and vote at any shareholders meeting by proxy, which such
shareholder has duly executed in writing or by any other method
permitted by the Georgia Business Corporation Code; provided,
however, that no proxy shall be valid for more than
11 months after the date thereof unless otherwise specified
in such proxy.
Section 9. Inspector of
Elections. The corporation may appoint one or
more inspectors to act at any meeting of the corporations
shareholders and to make a written report of the
inspectors determinations with respect thereto. Any such
inspectors shall (i) ascertain the number of shares
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outstanding and the voting power thereof, (ii) determine
the shares represented at a meeting, (iii) determine the
validity of the proxies and ballots, (iv) count all votes
with respect to matters presented to the corporations
shareholders, and (v) determine the result of any matter
presented to the corporations shareholders. Any such
inspector shall take and sign an oath to faithfully execute the
duties of inspector with strict impartiality and according to
the best of the inspectors ability. An inspector may be an
officer or employee of the corporation.
ARTICLE III.
DIRECTORS
Section 1. Number. In
accordance with the corporations Articles of
Incorporation, the number of members of the Board of Directors
of the corporation shall be fixed from time to time solely by
the action of the Board of Directors.
Section 2. Election and
Tenure. In accordance with the corporations
Articles of Incorporation, the Board of Directors of the
corporation shall be divided into three classes of Directors
serving staggered three-year terms, with each class to be as
nearly equal as possible.
Section 3. Powers. The
Board of Directors shall have authority to manage the affairs
and exercise the powers, privileges and franchises of the
corporation as they may deem expedient for the interests of the
corporation, subject to the terms of the Articles of
Incorporation and these bylaws.
Section 4. Meeting. The
annual meeting of the Board of Directors shall be held without
notice immediately following the annual meeting of the
shareholders of the corporation, on the same date and at the
same place as said annual meeting of the shareholders. The Board
by resolution may provide for regular meetings, which may be
held without notice as and when scheduled in such resolution.
Special meetings of the Board may be called at any time by the
Chairman of the Board, the Chief Executive Officer, the Lead
Director, or by any two or more Directors.
Section 5. Notice and Waiver;
Quorum. Notice of any special meeting of the
Board of Directors shall be given to each Director personally or
by mail, telegram, facsimile, overnight courier, telephone or
e-mail, or
by any other means customary for expedited business
communications, at least 24 hours prior to the meeting,
Such notice may be waived, either before or after the meeting;
and the attendance of a Director at any special meeting shall of
itself constitute a waiver of notice of such meeting and of any
and all objections to the place or time of the meeting, or to
the manner in which it has been called or convened, except where
a Director states, at the beginning of the meeting, any such
objection or objections to the holding of the meeting or the
transaction of business at such meeting. A majority of the Board
of Directors then in office shall constitute a quorum at any
Directors meeting.
Section 6. No Meeting Necessary,
When. Any action required by law or permitted to
be taken at any meeting of the Board of Directors or any
committee thereof may be taken without a meeting if written
consent, setting forth the action so taken, shall be signed by
all the Directors or committee members. Such consent shall have
the same force and affect as a unanimous vote of the Board of
Directors and shall be filed with the Secretary and recorded in
the Minute Book of the corporation.
Section 7. Telephone Conference
Meetings. Members of the Board of Directors, or
any committee designated by the Board of Directors, may
participate in a meeting of the Board or committee by means of
telephone conference or similar communications equipment by
means of which all persons participating in the meeting can hear
each other, and participation in a meeting pursuant to this
section shall constitute presence in person at such meeting.
Section 8. Voting. At
all meetings of the Board of Directors each Director shall have
one vote and, except as otherwise provided herein or provided by
law, all questions shall be determined by a majority vote of the
Directors present at any meeting at which a quorum is present.
Section 9. Removal. Directors
or the entire Board of Directors may be removed from office only
for cause by the affirmative vote of at least
662/3%
of the total issued and outstanding shares of the
corporations common stock, except that if a Director is
elected by a different voting group of shareholders
(i) only the shareholders of such voting group may
participate in the vote to remove such Director and
(ii) the requisite vote shall be as set forth in the
articles of amendment setting forth the preferences, limitations
and relative rights of the relevant class or series of preferred
stock.
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Section 10. Vacancies. Any
vacancy occurring in the Board of Directors may be filled by the
shareholders, by the Board of Directors, or, if the Directors
remaining in office constitute less than a quorum, a majority of
the remaining Directors or the sole remaining Director, as the
case may be. Any Director elected or appointed to fill a vacancy
shall serve the unexpired term of his or her predecessor;
provided that any director filling a vacancy by reason of an
increase in the number of directors, where such vacancy is
filled by the Directors, shall serve until the next annual
meeting of shareholders and until the election and qualification
of his or her successor.
Section 11. Dividends. The
Board of Directors may not make a distribution to the
shareholders if, after giving it effect, the corporation would
not be able to pay its debts as they become due in the usual
course of business or the corporations total assets would
be less than the sum of its total liabilities plus the amount
that would be needed, if the corporation were to be dissolved at
the time of the distribution, to satisfy the preferential rights
upon dissolution of the shareholders whose preferential rights
are superior to those receiving the distribution. The effect of
the distribution shall be determined as set forth in
Section 14-2-640
of the Georgia Business Corporation Code.
Section 12. Committees. In
the discretion of the Board of Directors, the Board from time to
time may elect or appoint, from its own members, one or more
committees as the Board may see fit to establish. Each such
committee shall consist of two or more Directors, and each shall
possess such powers and be charged with such responsibilities,
subject to the limitations imposed by applicable law, as the
Board by resolution may from time to time prescribe.
Section 13. Officers and
Salaries. The Board of Directors shall elect all
officers of the corporation and the Board of Directors, or a
duly authorized committee of the Board of Directors, shall fix
their compensation, except that the Board shall not have the
responsibility to approve salaries for officers who are not
executive officers.
Section 14. Compensation of
Directors. Directors as such shall be entitled to
receive compensation for their service as Directors and such
fees and expenses, if any, for attendance at each regular or
special meeting of the Board and any adjournments thereof, as
may be fixed from time to time by resolution of the Board, and
such fees and expenses shall be payable even though an
adjournment be had because of the absence of a quorum; provided,
however, that nothing herein contained shall be construed to
preclude any director from serving the corporation in any other
capacity and receiving compensation therefor. Members of either
standing or special committees may be allowed such compensation
as may be provided from time to time by resolution of the Board
for serving upon and attending meetings of such committees.
Section 15. Emeritus
Directors. When a member of the Board of
Directors of the corporation attains seventy two (72) years
of age, such director shall automatically, at his option, either
(i) retire from the Board of Directors of the corporation;
or (ii) be appointed as a member of the Emeritus Board of
Directors of the corporation. Members of the Emeritus Board of
Directors of the corporation shall be appointed annually by the
Chairman of the Board of Directors of the corporation at the
annual meeting of the Board of Directors of the corporation, or
from time to time thereafter. Each member of the Emeritus Board
of Directors of the corporation, except in the case of his
earlier death, resignation, retirement, disqualification or
removal, shall serve until the next succeeding annual meeting of
the Board of Directors of the corporation. Any individual
appointed as a member of the Emeritus Board of Directors of the
corporation may, but shall not be required to, attend meetings
of the Board of Directors of the corporation and may participate
in any discussions thereat, but such individual may not vote at
any meeting of the Board of Directors of the corporation or be
counted in determining a quorum at any meeting of the Board of
Directors of the corporation, as provided in Section 5 of
Article III of the bylaws of the corporation. It shall be
the duty of the members of the Emeritus Board of Directors of
the corporation to serve as goodwill ambassadors of the
corporation, but such individuals shall not have any
responsibility or be subject to any liability imposed upon a
member of the Board of Directors of the corporation or in any
manner otherwise be deemed to be a member of the Board of
Directors of the corporation. Each member of the Emeritus Board
of Directors shall treat information regarding the corporation
shared with the Emeritus Board of Directors as strictly
confidential and will not disclose such information to any
third-party without the corporations consent. Each member
of the Emeritus Board of Directors of the corporation shall be
paid such compensation as may be set from time to time by the
Chairman of the Board of Directors of the corporation and shall
remain eligible to participate in any Director Stock
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Purchase Plan maintained by, or participated in, from time to
time by the corporation according to the terms and conditions
thereof.
Section 16. Advisory
Directors. The Board of Directors of the
corporation may at its annual meeting, or from time to time
thereafter, appoint any individual to serve as a member of an
Advisory Board of Directors of the corporation. Any individual
appointed to serve as a member of an Advisory Board of Directors
of the corporation shall be entitled to attend all meetings of
the Board of Directors and may participate in any discussion
thereat, but such individual may not vote at any meeting of the
Board of Directors or be counted in determining a quorum for
such meeting. It shall be the duty of members of the Advisory
Board of Directors of the corporation to advise and provide
general policy advice to the Board of Directors of the
corporation at such times and places and in such groups and
committees as may be determined from time to time by the Board
of Directors, but such individuals shall not have any
responsibility or be subject to any liability imposed upon a
director or in any manner otherwise be deemed a director. Each
member of the Advisory Board of Directors shall treat
information regarding the corporation shared with the Advisory
Board of Directors as strictly confidential and will not
disclose such information to any third-party without the
corporations consent. Each member of the Advisory Board of
Directors of the corporation shall be paid such compensation as
may be set from time to time by the Chairman of the Board of
Directors of the corporation. Each member of the Advisory Board
of Directors except in the case of his earlier death,
resignation, retirement, disqualification or removal, shall
serve until the next succeeding annual meeting of the Board of
Directors and thereafter until his successor shall have been
appointed.
ARTICLE IV.
OFFICERS
Section 1. Selection. The
Board of Directors at each annual meeting shall elect or appoint
a Chief Executive Officer, a President, a Secretary and a
Treasurer, each to serve for the ensuing year and until his
successor is elected and qualified, or until his earlier
resignation, removal from office, or death. The Board of
Directors, at such meeting, may or may not, in the discretion of
the Board, elect a Chairman of the Board, a Chief Operating
Officer, one or more Vice Chairmen of the Board, one or more
Vice Presidents, one or more Assistant Vice Presidents, one or
more Assistant Secretaries, one or more Assistant Treasurers,
and such other officers as the Board of Directors, in its
discretion, shall determine are desirable for the management of
the business and affairs of the corporation. When more than one
Vice President is elected, they may, in the discretion of the
Board, be designated Senior Executive Vice President, Executive
Vice President, or otherwise, and any person may hold two or
more offices, except that neither the Chief Executive Officer
nor the President shall also serve as the Secretary.
Section 2. Removal,
Vacancies. Any officers of the corporation may be
removed from office at any time by the Board of Directors, with
or without cause. Any vacancy occurring in any office of the
corporation may be filled by the Board of Directors.
Section 3. Chief Executive
Officer. The Chief Executive Officer shall, under
the direction of the Board of Directors, have responsibility for
the general direction of the corporations business,
policies and affairs. The Chief Executive Officer shall have
such other authority and perform such other duties as usually
appertain to the chief executive office in business corporations
or as are provided by the Board of Directors.
Section 4. President. The
President shall, under the direction of the Chief Executive
Officer, have direct superintendence of the corporations
business, policies, properties and affairs. The President shall
have such further powers and duties as from time to time may be
conferred upon or assigned to such officer by the Board of
Directors, the Chairman of the Board or the Chief Executive
Officer.
Section 5. Vice
President. The Senior Executive Vice Presidents,
if any, the Executive Vice Presidents, if any, and Vice
Presidents, if any, shall have such powers and duties as from
time to time may be conferred upon or assigned to them by the
Board of Directors, the Chairman of the Board, the Chief
Executive Officer, or the President. A Senior Executive Vice
President or an Executive Vice President or other officer may be
responsible for the assignment of duties to subordinate Vice
Presidents.
Section 6. Secretary. It
shall be the duty of the Secretary to keep a record of the
proceedings of all meetings of the shareholders and Board of
Directors; to keep the stock records of the corporation; to
notify the shareholders and Directors of meetings as provided by
these bylaws: and to perform such other
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duties as may be prescribed by the Board of Directors, the
Chairman of the Board, the Chief Executive Officer, or the
President. Any Assistant Secretary, if elected, shall perform
the duties of the Secretary during the absence or disability of
the Secretary and shall perform such other duties as may be
prescribed by the Board of Directors, the Chairman of the Board,
the Chief Executive Officer, the President or the Secretary.
Section 7. Treasurer. The
Treasurer shall keep, or cause to be kept, the financial books
and records of the corporation, and shall faithfully account for
its funds. He shall make such reports as may be necessary to
keep the Board of Directors, the Chairman of the Board, the
Chief Executive Officer, and the President fully informed at all
times as to the financial condition of the corporation, and
shall perform such other duties as may be prescribed by the
Board of Directors, the Chairman of the Board, the Chief
Executive Officer or the President. Any Assistant Treasurer, if
elected, shall perform the duties of the Treasurer during the
absence or disability of the Treasurer, and shall perform such
other duties as may be prescribed by the Board of Directors, the
Chief Executive Officer, Chairman of the Board, the President or
the Treasurer.
ARTICLE V.
CONTRACTS, ETC.
Section 1. Contracts, Deeds and
Loans. All contracts, deeds, mortgages, pledges,
promissory notes, transfers and other written instruments
binding upon the corporation shall be executed on behalf of the
corporation by the Chief Executive Officer, Chairman of the
Board, the President, any Executive Vice President, any Group
Executives who report directly to such Executive Vice
Presidents, or by such other officers or agents as the Board of
Directors may designate from time to time. Any such instrument
required to be given under the seal of the corporation may be
attested by the Secretary or Assistant Secretary of the
corporation.
Section 2. Proxies. The
Chief Executive Officer, Chairman of the Board, the President,
any Vice President, the Secretary or the Treasurer of the
corporation shall have full power and authority, on behalf of
the corporation, to attend and to act and to vote at any
meetings of the shareholders, bond holders or other security
holders of any corporation, trust or association in which the
corporation may hold securities, and at and in connection with
any such meeting shall possess and may exercise any and all of
the rights and powers incident to the ownership of such
securities and which as owner thereof the corporation might have
possessed and exercised if present, including the power to
execute proxies and written waivers and consents in relation
thereto. In the case of conflicting representation at any such
meeting, the corporation shall be represented by its highest
ranking officer, in the order first above stated.
Notwithstanding the foregoing, the Board of Directors may, by
resolution, from time to time, confer like powers upon any other
person or persons.
Section 3. Inspection of
Records. The record of shareholders, accounting
records and written proceedings of the shareholders, the Board
of Directors and committees of the Board of Directors shall be
open for inspection and copying during regular business hours at
a reasonable location specified by the corporation solely by
shareholders owning not less than two percent (2%) of the
outstanding shares of the corporation upon at least five
(5) days written notice of demand to inspect and copy such
records. The right of inspection by a shareholder may be granted
only if the demand is made in good faith and for a proper
purpose that is reasonably relevant to a legitimate interest as
a shareholder, describes with reasonable particularity the
purpose for such demand and the records desired for inspection,
the records are directly connected with such purpose and are to
be used only for the stated purpose.
ARTICLE VI.
CHECKS AND DRAFTS
Checks and drafts of the corporation shall be signed by such
officer or officers or such other employees or persons as the
Board of Directors may from time to time designate.
ARTICLE VII.
STOCK
Section 1. Certificates of
Stock. Shares of capital stock of the corporation
shall be issued in certificate or book-entry form. Certificates
shall be numbered consecutively and entered into the stock book
of the corporation as they are issued. Each certificate shall
state on its face the fact that the corporation is a Georgia
corporation, the name of the person to whom the shares are
issued, the number
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and class of shares (and series, if any) represented by the
certificate and their par value, or a statement that they are
without par value. In addition, when and if more than one class
of shares shall be outstanding, all share certificates of
whatever class shall state that the corporation will furnish to
any shareholder upon request and without charge a full statement
of the designations, relative rights, preferences and
limitations of the shares of each class authorized to be issued
by the corporation.
Section 2. Signature; Transfer Agent;
Registrar. Share certificates shall be signed by
the President or any Vice President and by the Secretary or an
Assistant Secretary of the corporation, and shall bear the seal
of the corporation or a facsimile thereof. The Board of
Directors may from time to time appoint transfer agents and
registrars for the shares of capital stock of the corporation or
any class thereof, and when any share certificate is
countersigned by a transfer agent or registered by a registrar,
the signature of any officer of the corporation appearing
thereon may be a facsimile signature. In case any officer who
signed, or whose facsimile signature was placed upon, any such
certificate shall have died or ceased to be such officer before
such certificate is issued, it may nevertheless be issued with
the same effect as if he continued to be such officer on the
date of issue.
Section 3. Stock
Book. The corporation shall keep at its principal
office, or at the office of its transfer agent, wherever
located, with a copy at the principal office of the corporation,
a book, to be known as the stock book of the corporation,
containing in alphabetical order name of each shareholder of
record, together with his address, the number of shares of each
kind, class or series of stock held by him and his social
security number. The stock book shall be maintained in current
condition. The stock book, including the share register, or the
duplicate copy thereof maintained at the principal office of the
corporation, shall be available for inspection and copying by
any shareholder at any meeting of the shareholders upon request,
or, for a bona fide purpose which is in the best interest of the
business of the corporation, at other times upon the written
request of any shareholder or holder of a voting trust
certificate. The stock book may be inspected and copied either
by a shareholder or a holder of a voting trust certificate in
person, or by their duly authorized attorney or agent. The
information contained in the stock book and share register may
be stored on punch cards, magnetic tape, or any other approved
information storage devices related to electronic data
processing equipment, provided that any such method, device, or
system employed shall first be approved by the Board of
Directors, and provided further that the same is capable of
reproducing all information contained therein, in legible and
understandable form, for inspection by shareholders or for any
other proper corporate purpose.
Section 4. Transfer of Stock;
Registration of Transfer. The stock of the
corporation shall be transferred only by surrender of the
certificate or compliance with the applicable procedures for
stock held in book-entry form and, in each case, transfer upon
the stock book of the corporation. Upon surrender to the
corporation, or to any transfer agent or registrar for the class
of shares represented by the certificate surrendered, of a
certificate properly endorsed for transfer, accompanied by such
assurances as the corporation, or such transfer agent or
registrar, may require as to the genuineness and effectiveness
of each necessary endorsement and satisfactory evidence of
compliance with all applicable laws relating to securities
transfers and the collection of taxes, it shall be the duty of
the corporation, or such transfer agent or registrar, to issue a
new certificate, cancel the old certificate and record the
transactions upon the stock book of the corporation.
Section 5. Registered
Shareholders. Except as otherwise required by
law, the corporation shall be entitled to treat the person
registered on its stock book as the owner of the shares of the
capital stock of the corporation as the person exclusively
entitled to receive notification, dividends or other
distributions, to vote and to otherwise exercise all the rights
and powers of ownership and shall not be bound to recognize any
adverse claim.
Section 6. Record
Date. For the purpose of determining shareholders
entitled to notice of or to vote at any meeting of shareholders
or any adjournment thereof or to express consent to or dissent
from any proposal without a meeting, or for the purpose of
determining shareholders entitled to receive payment of any
dividend or the allotment of any rights, or for the purpose of
any other action affecting the interests of shareholders, the
Board of Directors may fix in advance, a record date. Such date
shall not be more than seventy (70) nor less than ten
(10) days before the date of any such meeting nor more than
seventy (70) days prior to any other action. In each case,
except as otherwise provided by law, only such persons as shall
be shareholders of record on the date so fixed shall be entitled
to notice of and to vote at
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such meeting and any adjournment thereof, to express such
consent or dissent, or to receive payment of such dividend or
such allotment of rights, or otherwise be recognized as
shareholders for any other related propose, notwithstanding any
registration of a transfer of shares on the stock book of the
corporation after any such record date so fixed.
Section 7. Lost
Certificates. When a person to whom a certificate
of stock has been issued alleges it to have been lost, destroyed
or wrongfully taken, and if the corporation, transfer agent or
registrar is not on notice that such certificate has been
acquired by a bona fide purchaser, a new certificate may be
issued upon such owners compliance with all of the
following conditions, to wit: (a) He shall file
with the Secretary of the corporation, and the transfer agent or
the registrar, his request for the issuance of a new
certificate, with an affidavit setting for the time, place and
circumstances of the loss: (b) He shall also file with the
Secretary, and the transfer agent or the registrar, a bond with
good and sufficient security acceptable to the corporation and
the transfer agent or the registrar, or other agreement of
indemnity, acceptable to the corporation and the transfer agent
or the registrar, conditioned to indemnify and save harmless the
corporation and the transfer agent or the registrar from any and
all damage, liability and expense of every nature whatsoever
resulting from the corporations or the transfer
agents or the registrars issuing a new certificate
in place of the one alleged to have been lost; and (c) He
shall comply with such other reasonable requirements as the
Board of Directors, the Chief Executive Officer or the President
of the corporation, and the transfer agent or the registrar
shall deem appropriate under the circumstances.
Section 8. Replacement of Mutilated
Certificates. A new certificate may be issued in
lieu of any certificate previously issued that may be defaced or
mutilated upon surrender for cancellation of a part of the old
certificate sufficient in the opinion of the Secretary and the
transfer agent or the registrar to duly identify the defaced or
mutilated certificate and to protect the corporation and the
transfer agent or the registrar against loss or liability. Where
sufficient identification is lacking, a new certificate may be
issued upon compliance with the conditions set forth in
Section 7 of this Article VII.
ARTICLE VIII.
INDEMNIFICATION AND REIMBURSEMENT
Section 1. Indemnification. Subject
to any express limitations imposed by applicable law, every
person now or hereafter serving as a director, officer, employee
or agent of the corporation and all former directors and
officers, employees or agents shall be indemnified and held
harmless by the corporation to the fullest extent permitted
under the Georgia Business Corporation Code, including from and
against the obligation to pay a judgment, settlement, penalty,
fine (including an excise tax assessed with respect to an
employee benefit plan), and reasonable expenses (including
attorneys fees and disbursements) that may be imposed upon
or incurred by him or her in connection with or resulting from
any threatened, pending, or completed, action, suit, or
proceeding, whether civil, criminal, administrative,
investigative, formal or informal, in which he or she is, or is
threatened to be made, a named defendant or respondent:
(a) because he or she is or was a director, officer,
employee, or agent of the corporation; (b) because he or
she is or was serving at the request of the corporation as a
director, officer, partner, trustee, employee, or agent of
another corporation, partnership, joint venture, trust, employee
benefit plan or other enterprise; or (c) because he or she
is or was serving as an employee of the corporation who was
employed to render professional services as a lawyer or an
accountant to the corporation; regardless of whether such person
is acting in such a capacity at the time such obligation shall
have been imposed or incurred, if (i) such person acted in
a manner he or she believed in good faith to be in or not
opposed to the best interests of the corporation, and, with
respect to any criminal proceeding, if such person had no
reasonable cause to believe his or her conduct was unlawful or
(ii), with respect to an employee benefit plan, such person
believed in good faith that his or her conduct was in the
interests of the participants in and beneficiaries of the plan.
Section 2. Advancement. Reasonable
expenses incurred in any proceeding shall be paid by the
corporation in advance of the final disposition of such
proceeding if authorized by the Board of Directors in the
specific case, or if authorized in accordance with procedures
adopted by the Board of Directors, upon receipt of a written
undertaking executed personally by or on behalf of the director,
officer, employee, or agent to repay such amount if it shall
ultimately be determined that he or she is not entitled to be
indemnified by the corporation, and a written affirmation of his
or her good faith belief that he or she has met the standard of
conduct required for indemnification.
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Section 3. Miscellaneous. The
foregoing rights of indemnification and advancement of expenses
shall not be deemed exclusive of any other right to which those
indemnified may be entitled, and the corporation may provide
additional indemnity and rights to its directors, officers,
employees or agents to the extent they are consistent with law.
The provisions of this Article VIII shall cover proceedings
whether now pending or hereafter commenced and shall be
retroactive to cover acts or omissions or alleged acts or
omissions which heretofore have taken place. In the event of
death of any person having a right of indemnification or
advancement of expenses under the provisions of this
Article VIII, such right shall inure to the benefit of his
or her heirs, executors, administrators and personal
representatives. If any part of this Article VIII should be
found to be invalid or ineffective in any proceeding, the
validity and effect of the remaining provisions shall not be
affected.
Section 4. Intent. It
is the intent of the corporation to indemnify persons covered by
Section I of this Article VIII to the full extent
permitted by the Georgia Business Corporation Code, as amended
from time to time. To the extent that the Georgia Business
Corporation Code is hereafter amended to permit a Georgia
business corporation to provide to such persons greater rights
to indemnification than those specifically set forth
hereinabove, this Article shall be deemed amended to require
such greater indemnification, in each case consistent with the
Georgia Business Corporation Code as so amended from time to
time. No amendment, modification or rescission of this Article,
or any provision hereof, the effect of which would diminish the
rights to indemnification or advancement of expenses as set
forth herein shall be effective as to any person with respect to
any action taken or omitted by such person prior to such
amendment, modification or rescission.
ARTICLE IX.
CRITERIA FOR CONSIDERATION OF ACTIONS BY THE BOARD
Section 1. Alternative
Stakeholders. In discharging the duties of their
respective positions and in determining what is believed to be
in the best interests of the corporation, the Board of
Directors, committees thereof and individual directors, in
addition to considering the effects of any action on the
corporation and its shareholders, may consider the interests of
employees, customers, suppliers, and creditors of the
corporation and its subsidiaries, the communities in which
offices or other establishments of the corporation and its
subsidiaries are located, and all other factors such directors
consider pertinent; provided, however, that this provision shall
be deemed solely to grant discretionary authority to the
directors and shall not be deemed to provide to any constituency
any right to be considered.
Section 2. Appropriate
Actions. If the Board of Directors determines
that any proposed business combination should be rejected, it
may take any lawful action to accomplish its purpose including,
but not limited to, any or all of the following:
(i) advising shareholders not to accept the offer;
(ii) litigation against the offeror; (iii) filing
complaints with governmental and regulatory authorities;
(iv) acquiring the corporations securities;
(v) selling or otherwise issuing authorized but unissued
securities of the corporation or treasury stock or granting
options or rights with respect thereto; (vi) acquiring a
company to create an antitrust or other regulatory problem for
the offeror; and (vii) soliciting a more favorable offer
from another individual or entity.
ARTICLE X.
AMENDMENT
Except as otherwise specifically provided herein, the bylaws of
the corporation may be altered, amended or added to by a
majority of the total number of votes of each voting group
entitled to vote thereon at a meeting of shareholders where such
business is properly brought before the meeting in accordance
with the bylaws or, subject to such limitations as the
shareholders may from time to time prescribe, by a majority vote
of all the Directors then holding office at any meeting of the
Board of Directors.
ARTICLE XI.
BUSINESS COMBINATIONS
All of the requirements of Article 11, Part 3, of the
Georgia Business Corporation Code, included in
Sections 14-2-1131
through 1133 (and any successor provisions thereto), shall be
applicable to the corporation in connection with any business
combination, as defined therein, with any interested
shareholder, as defined therein.
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As Amended
and Restated
Effective
[ ],
2007
AMENDED
AND RESTATED BYLAWS
OF
TOTAL SYSTEM SERVICES, INC.
ARTICLE I.
OFFICES
Section 1. Principal
Office. The principal office for the transaction
of the business of the corporation shall be located in Muscogee
County, Georgia, at such place within said County as may be
fixed from time to time by the Board of Directors.
Section 2. Other
Offices. Branch offices and places of business
may be established at any time by the Board of Directors at any
place or places, whether within or without the State of Georgia.
ARTICLE II.
SHAREHOLDERS MEETINGS
Section 1. Meetings, Where
Held. Any meeting of the shareholders of the
corporation, whether an annual meeting or a special meeting, may
be held either at the principal office of the corporation or at
any place in the United States within or without the State of
Georgia.
Section 2. Annual
Meeting. The annual meeting of the shareholders
of the corporation for the election of Directors and for the
transaction of such other business as may properly come before
the meeting shall be held on such date and at such time and
place as is determined by the Board of Directors of the
corporation each year. Unless otherwise determined by the Board
of Directors, the Chairman of the Board or the Chief Executive
Officer shall act as chairman at all annual meetings. The
chairman of each annual meeting shall announce the date and time
for the opening and closing of the polls for each matter to be
voted on by the corporations shareholders.
Section 3. Special
Meetings. A special meeting of the shareholders
of the corporation, for any purpose or purposes whatsoever, may
be called at any time by (i) the Board of Directors or
(ii) one or more shareholders of the corporation
holding at least 80% of the issued and outstanding shares of
common stock of the corporationupon the action of
a majority of the total number of all votes entitled to be cast
on any issue proposed to be considered at the proposed special
meeting. Such a call for a special meeting must state
the purpose of the meeting. Unless otherwise determined by the
Board of Directors, the Chairman of the Board or the Chief
Executive Officer shall act as chairman of all special meetings.
The chairman of each special meeting shall announce the date and
time for the opening and closing of the polls for each matter to
be voted on by the corporations shareholders. This
section, as it relates to the call of a special meeting of the
shareholders of the corporation by one or more shareholders
holding at least 80% of the issued and outstanding shares of
common stock of the corporation shall not be altered, deleted or
rescinded except upon the affirmative vote of the shareholders
of the corporation holding at least 80% of the issued and
outstanding shares of common stock of the corporation.
Section 4. Nature
of Business at Meetings of Shareholders. No
business may be transacted at an annual meeting of shareholders,
other than business that is either (a) specified in the
notice of meeting (or any supplement thereto) given by or at the
direction of the Board of Directors (or any duly authorized
committee thereof), (b) otherwise properly brought before
the annual meeting by or at the direction of the Board of
Directors (or any duly authorized committee thereof) or
(c) otherwise properly brought before the annual meeting by
any shareholder of the corporation (i) who is a shareholder
of record on the date of the giving of the notice by such
shareholder as required by this Section 4 and on the record
date for the determination of shareholders entitled to notice of
and to vote at such annual meeting and (ii) who complies
with the notice procedures set forth in this Section 4.
In addition to any other applicable requirements, for business
to be properly brought before an annual meeting by a
shareholder, such shareholder must have given timely notice
thereof in proper written form to the Secretary of the
corporation.
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To be timely, a shareholders notice to the Secretary must
be delivered to or mailed and received at the principal
executive offices of the corporation not less than 90 days
nor more than 120 days prior to the anniversary date of the
immediately preceding annual meeting of shareholders; provided,
however, that in the event that the annual meeting is called for
a date that is not within 25 days before or after such
anniversary date, notice by the shareholder in order to be
timely must be so received not later than the close of business
on the 10th day following the day on which notice of the
date of the annual meeting was mailed by the corporation or
public disclosure of the date of the annual meeting was made by
the corporation, whichever first occurs; and, provided further,
that with respect to the corporations 2008 annual meeting
of shareholders, unless the immediately preceding proviso shall
apply, notice by the shareholder in order to be timely must be
so received no earlier than December 24, 2007 and not later
than the close of business on the 10th day following the
day on which public disclosure was made announcing that the
distribution of the corporations shares owned by Synovus
Financial Corp. (Synovus) to the shareholders of
Synovus has been completed.
To be in proper written form, a shareholders notice to the
Secretary must set forth as to each matter such shareholder
proposes to bring before the annual meeting (i) a brief
description of the business desired to be brought before the
annual meeting and the reasons for conducting such business at
the annual meeting, (ii) the name and record address of
such shareholder, (iii) the class and series and number of
shares of each class and series of capital stock of the
corporation which are owned beneficially or of record by such
shareholder, (iv) a description of all arrangements or
understandings between such shareholder and any other person or
persons (including their names) in connection with the proposal
of such business by such shareholder and any material interest
of such shareholder in such business and (v) a
representation that such shareholder is a holder of record of
stock of the corporation entitled to vote at such meeting and
that such shareholder intends to appear in person or by proxy at
the annual meeting to bring such business before the meeting.
In addition, notwithstanding anything in this Section 4 to
the contrary, a shareholder intending to nominate one or more
persons for election as a director at an annual or special
meeting of shareholders must comply with Section 5 of this
Article II for such nominations to be properly brought
before such meeting.
No business shall be conducted at the annual meeting of
shareholders except business brought before the annual meeting
in accordance with the procedures set forth in this
Section 4; provided, however, that, once business has been
properly brought before the annual meeting in accordance with
such procedures, nothing in this Section 4 shall be deemed
to preclude discussion by any shareholder of any such business.
If the chairman of an annual meeting determines that business
was not properly brought before the annual meeting in accordance
with the foregoing procedures, the chairman shall declare to the
meeting that the business was not properly brought before the
meeting and such business shall not be transacted.
No business shall be conducted at a special meeting of
shareholders except for such business as shall have been brought
before the meeting pursuant to the corporations notice of
meeting.
Section 5. Nomination of
Directors. Only persons who are nominated in
accordance with the following procedures shall be eligible for
election as directors of the corporation, subject to the rights
of holders of any class or series of preferred stock to nominate
and elect directors under certain circumstances. Nominations of
persons for election to the Board of Directors may be made at
any annual meeting of shareholders, or at any special meeting of
shareholders called for the purpose of electing directors,
(a) by or at the direction of the Board of Directors (or
any duly authorized committee thereof) or (b) by any
shareholder of the corporation (i) who is a shareholder of
record on the date of the giving of the notice by such
shareholder as required by this Section 5 and on the record
date for the determination of shareholders entitled to notice of
and to vote at such meeting and (ii) who complies with the
notice procedures set forth in this Section 5.
In addition to any other applicable requirements, for a
nomination to be made by a shareholder, such shareholder must
have given timely notice thereof in proper written form to the
Secretary of the corporation.
To be timely, a shareholders notice to the Secretary must
be delivered to or mailed and received at the principal
executive offices of the corporation (a) in the case of an
annual meeting, not less than 90 days nor more than
120 days prior to the anniversary date of the immediately
preceding annual
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meeting of shareholders; provided, however, that in the event
that the annual meeting is called for a date that is not within
25 days before or after such anniversary date, notice by
the shareholder in order to be timely must be so received not
later than the close of business on the 10th day following
the day on which notice of the date of the annual meeting was
mailed by the corporation or public disclosure of the date of
the annual meeting was made by the corporation, whichever first
occurs; and, provided further, that with respect to the
corporations 2008 annual meeting of shareholders, unless
the immediately preceding proviso shall apply, notice by the
shareholder in order to be timely must be so received no earlier
than December 24, 2007 and not later than the close of
business on the 10th day following the day on which public
disclosure was made announcing that the distribution of the
corporations shares owned by Synovus to the shareholders
of Synovus has been completed; and (b) in the case of a
special meeting of shareholders called for the purpose of
electing directors, not later than the close of business on the
10th day following the day on which notice of the date of
the special meeting was mailed or public disclosure of the date
of the special meeting was made, whichever first occurs.
To be in proper written form, a shareholders notice to the
Secretary must set forth (a) as to each person whom the
shareholder proposes to nominate for election as a director
(i) the name, age, business address and residence address
of the person, (ii) the principal occupation and employment
of the person, (iii) the class and series and number of
shares of each class and series of capital stock of the
corporation which are owned beneficially or of record by the
person, if any, and (iv) any other information relating to
the person that would be required to be disclosed in a proxy
statement or other filings required to be made in connection
with solicitations of proxies for election of directors pursuant
to Section 14 of the Securities Exchange Act of 1934, as
amended (the Exchange Act) (or in any law or statute
replacing such section), and the rules and regulations
promulgated thereunder; and (b) as to the shareholder
giving the notice (i) the name and record address of such
shareholder, (ii) the class and series and number of shares
of each class and series of capital stock of the corporation
which are owned beneficially or of record by such shareholder,
(iii) a description of all arrangements or understandings
between such shareholder and each proposed nominee and any other
person or persons (including their names) pursuant to which the
nomination(s) are to be made by such shareholder, (iv) a
representation that such shareholder is a holder of record of
stock of the corporation entitled to vote at such meeting and
that such shareholder intends to appear in person or by proxy at
the meeting to nominate the person or persons named in its
notice and (v) any other information relating to such
shareholder that would be required to be disclosed in a proxy
statement or other filings required to be made in connection
with solicitations of proxies for election of directors pursuant
to Section 14 of the Exchange Act (or in any law or statute
replacing such section) and the rules and regulations
promulgated thereunder. Such notice must be accompanied by a
written consent of each proposed nominee to being named as a
nominee and to serve as a director if elected.
No person shall be eligible for election as a director of the
corporation unless nominated in accordance with the procedures
set forth in this Section 5. If the chairman of the meeting
determines that a nomination was not made in accordance with the
foregoing procedures, the chairman shall declare to the meeting
that the nomination was defective and such defective nomination
shall be disregarded.
Section 6. Notice of
Meetings. Unless waived in accordance with
Section 7, notice of each annual meeting and of each
special meeting of the shareholders of the corporation shall be
given to each shareholder of record entitled to vote at the
meeting not less than ten (10) days nor more than sixty
(60) days prior to said meeting. Such notice shall specify
the place, date and hour of the meeting and, in the case of a
special meeting, it shall also specify the purpose or purposes
for which the meeting is called.
Section 7. Waiver of
Notice. Notice of any annual or special meeting
of the shareholders of the corporation may be waived by any
shareholder, either before or after the meeting; and the
attendance of a shareholder at a meeting, either in person or by
proxy, shall of itself constitute waiver of notice and waiver of
any and all objections to the place or time of the meeting, or
to the manner in which it has been called or convened, unless
the shareholder, at the beginning of the meeting, objects to the
holding of the meeting or the transaction of business at such
meeting.
Section 8. Quorum, Voting and
Proxy. Shareholders representing a majority of
the issued and outstanding shares of common stock of the
corporation shall constitute a quorum at a shareholders
meeting. Each shareholder shall be entitled to one vote for each
share of common stock owned. Any
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shareholder may be represented and vote at any
shareholders meeting by proxy, which such shareholder has
duly executed in writing or by any other method permitted by the
Georgia Business Corporation Code; provided, however, that no
proxy shall be valid for more than 11 months after the date
thereof unless otherwise specified in such proxy.
Section 9. Inspector of
Elections. The corporation may appoint one or
more inspectors to act at any meeting of the corporations
shareholders and to make a written report of the
inspectors determinations with respect thereto. Any such
inspectors shall (i) ascertain the number of shares
outstanding and the voting power thereof, (ii) determine
the shares represented at a meeting, (iii) determine the
validity of the proxies and ballots, (iv) count all votes
with respect to matters presented to the corporations
shareholders, and (v) determine the result of any matter
presented to the corporations shareholders. Any such
inspector shall take and sign an oath to faithfully execute the
duties of inspector with strict impartiality and according to
the best of the inspectors ability. An inspector may be an
officer or employee of the corporation.
ARTICLE III.
DIRECTORS
Section 1. Number. The
Board of Directors of the corporation shall consist of not less
than 8 nor more than 60 Directors. The number of Directors
may vary between said minimum and maximum, and within said
limits, the shareholders holding at least 80% of the issued and
outstanding shares of common stock of the corporation may, from
time to time, by resolution fix the number of Directors to
comprise said Board. This section, as it relates to from time to
time, fixing the number of Directors of the corporation by the
shareholders of the corporation holding at least 80% of the
issued and outstanding shares of common stock of the
corporation, shall not be altered, deleted or rescinded except
upon the affirmative vote of the shareholders of the corporation
holding at least 80% of the issued and outstanding shares of
common stock of the corporation.In accordance
with the corporations Articles of Incorporation, the
number of members of the Board of Directors of the corporation
shall be fixed from time to time solely by the action of the
Board of Directors.
Section 2. Election and
Tenure. TheIn accordance
with the corporations Articles of Incorporation, the
Board of Directors of the corporation shall be divided into
three classes of Directors serving staggered
three-year terms, with each class to be as nearly equal as
possible. At the first annual meeting of the
shareholders of the corporation, all members of the Board of
Directors shall be elected with the terms of office of Directors
comprising the first class to expire at the first annual meeting
of the shareholders of the corporation after their election, the
terms of office of Directors comprising the second class to
expire at the second annual meeting of the shareholders of the
corporation after their election and the terms of office of
Directors comprising the third class to expire at the third
annual meeting of the shareholders of the corporation after
their election, and as their terms of office expires, the
Directors of each class will be elected to hold office until the
third succeeding annual meeting of the shareholders of the
corporation after their election. In such elections, the
nominees receiving a plurality of votes shall be elected. This
section, as it relates to the division of the Board of Directors
into three classes serving staggered three-year terms, shall not
be altered, deleted or rescinded except upon the affirmative
vote of the shareholders of the corporation holding at least 80%
of the issued and outstanding shares of common stock of the
corporation.
Section 3. Powers. The
Board of Directors shall have authority to manage the affairs
and exercise the powers, privileges and franchises of the
corporation as they may deem expedient for the interests of the
corporation, subject to the terms of the Articles of
Incorporation and these bylaws.
Section 4. Meetings. The
annual meeting of the Board of Directors shall be held without
notice immediately following the annual meeting of the
shareholders of the corporation, on the same date and at the
same place as said annual meeting of the shareholders. The Board
by resolution may provide for regular meetings, which may be
held without notice as and when scheduled in such resolution.
Special meetings of the Board may be called at any time by the
Chairman of the Board, the Chief Executive Officer, the Lead
Director, or by any two or more Directors.
Section 5. Notice and Waiver;
Quorum. Notice of any special meeting of the
Board of Directors shall be given to each Director personally or
by mail, telegram, facsimile, overnight courier, telephone or
e-mail, or
by any other means customary for expedited business
communications, at least 24 hours prior
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to the meeting, Such notice may be waived, either before or
after the meeting; and the attendance of a Director at any
special meeting shall of itself constitute a waiver of notice of
such meeting and of any and all objections to the place or time
of the meeting, or to the manner in which it has been called or
convened, except where a Director states, at the beginning of
the meeting, any such objection or objections to the holding of
the meeting or the transaction of business at such meeting. A
majority of the Board of Directors then in office shall
constitute a quorum at any Directors meeting.
Section 6. No Meeting Necessary,
When. Any action required by law or permitted to
be taken at any meeting of the Board of Directors or any
committee thereof may be taken without a meeting if written
consent, setting forth the action so taken, shall be signed by
all the Directors or committee members. Such consent shall have
the same force and affect as a unanimous vote of the Board of
Directors and shall be filed with the Secretary and recorded in
the Minute Book of the corporation.
Section 7. Telephone Conference
Meetings. Members of the Board of Directors, or
any committee designated by the Board of Directors, may
participate in a meeting of the Board or committee by means of
telephone conference or similar communications equipment by
means of which all persons participating in the meeting can hear
each other, and participation in a meeting pursuant to this
section shall constitute presence in person at such meeting.
Section 8. Voting. At
all meetings of the Board of Directors each Director shall have
one vote and, except as otherwise provided herein or provided by
law, all questions shall be determined by a majority vote of the
Directors present at any meeting at which a quorum is present.
Section 9. Removal. Any
one or more Directors or the entire Board of Directors
may be removed from office, with or without
only for cause, by the
affirmative vote of the shareholders of the corporation
holding at least
80662/3%
of the total issued and outstanding shares
of common stock of the corporation at any
shareholders meeting with respect to which notice of such
purpose has been given. This section, as it relates to the
removal of Directors of the corporation by the shareholders of
the corporation holding at least 80% of the issued and
outstanding shares of common stock of the corporation, shall not
be altered, deleted or rescinded except upon the affirmative
vote of the shareholders of the corporation holding at least 80%
of the issued and outstanding shares of common stock of the
corporation of the corporations common
stock, except that if a Director is elected by a different
voting group of shareholders (i) only the shareholders of
such voting group may participate in the vote to remove such
Director and (ii) the requisite vote shall be as set forth
in the articles of amendment setting forth the preferences,
limitations and relative rights of the relevant class or series
of preferred stock.
Section 10. Vacancies. Any
vacancy occurring in the Board of Directors may be filled by the
shareholders, by the Board of Directors, or, if the Directors
remaining in office constitute less than a quorum, a majority of
the remaining Directors or the sole remaining Director, as the
case may be. Any Director elected or appointed to fill a vacancy
shall serve the unexpired term of his or her predecessor;
provided that any director filling a vacancy by reason of an
increase in the number of directors, where such vacancy is
filled by the Directors, shall serve until the next annual
meeting of shareholders and until the election and qualification
of his or her successor.
Section 11. Dividends. The
Board of Directors may not make a distribution to the
shareholders if, after giving it effect, the corporation would
not be able to pay its debts as they become due in the usual
course of business or the corporations total assets would
be less than the sum of its total liabilities plus the amount
that would be needed, if the corporation were to be dissolved at
the time of the distribution, to satisfy the preferential rights
upon dissolution of the shareholders whose preferential rights
are superior to those receiving the distribution. The effect of
the distribution shall be determined as set forth in
Section 14-2-640
of the Georgia Business Corporation Code.
Section 12. Committees. In
the discretion of the Board of Directors, the Board from time to
time may elect or appoint, from its own members, one or more
committees as the Board may see fit to establish. Each such
committee shall consist of two or more Directors, and each shall
possess such powers and be charged with such responsibilities,
subject to the limitations imposed by applicable law, as the
Board by resolution may from time to time prescribe.
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Section 13. Officers and
Salaries. The Board of Directors shall elect all
officers of the corporation and the Board of Directors, or a
duly authorized committee of the Board of Directors, shall fix
their compensation, except that the Board shall not have the
responsibility to approve salaries for officers who are not
executive officers.
Section 14. Compensation of
Directors. Directors as such shall be entitled to
receive compensation for their service as Directors and such
fees and expenses, if any, for attendance at each regular or
special meeting of the Board and any adjournments thereof, as
may be fixed from time to time by resolution of the Board, and
such fees and expenses shall be payable even though an
adjournment be had because of the absence of a quorum; provided,
however, that nothing herein contained shall be construed to
preclude any director from serving the corporation in any other
capacity and receiving compensation therefor. Members of either
standing or special committees may be allowed such compensation
as may be provided from time to time by resolution of the Board
for serving upon and attending meetings of such committees.
Section 15. Emeritus
Directors. When a member of the Board of
Directors of the corporation attains seventy two (72) years
of age, such director shall automatically, at his option, either
(i) retire from the Board of Directors of the corporation;
or (ii) be appointed as a member of the Emeritus Board of
Directors of the corporation. Members of the Emeritus Board of
Directors of the corporation shall be appointed annually by the
Chairman of the Board of Directors of the corporation at the
annual meeting of the Board of Directors of the corporation, or
from time to time thereafter. Each member of the Emeritus Board
of Directors of the corporation, except in the case of his
earlier death, resignation, retirement, disqualification or
removal, shall serve until the next succeeding annual meeting of
the Board of Directors of the corporation. Any individual
appointed as a member of the Emeritus Board of Directors of the
corporation may, but shall not be required to, attend meetings
of the Board of Directors of the corporation and may participate
in any discussions thereat, but such individual may not vote at
any meeting of the Board of Directors of the corporation or be
counted in determining a quorum at any meeting of the Board of
Directors of the corporation, as provided in Section 5 of
Article III of the bylaws of the corporation. It shall be
the duty of the members of the Emeritus Board of Directors of
the corporation to serve as goodwill ambassadors of the
corporation, but such individuals shall not have any
responsibility or be subject to any liability imposed upon a
member of the Board of Directors of the corporation or in any
manner otherwise be deemed to be a member of the Board of
Directors of the corporation. Each member of the Emeritus Board
of Directors shall treat information regarding the corporation
shared with the Emeritus Board of Directors as strictly
confidential and will not disclose such information to any
third-party without the corporations consent. Each member
of the Emeritus Board of Directors of the corporation shall be
paid such compensation as may be set from time to time by the
Chairman of the Board of Directors of the corporation and shall
remain eligible to participate in any Director Stock Purchase
Plan maintained by, or participated in, from time to time by the
corporation according to the terms and conditions thereof.
Section 16. Advisory
Directors. The Board of Directors of the
corporation may at its annual meeting, or from time to time
thereafter, appoint any individual to serve as a member of an
Advisory Board of Directors of the corporation. Any individual
appointed to serve as a member of an Advisory Board of Directors
of the corporation shall be entitled to attend all meetings of
the Board of Directors and may participate in any discussion
thereat, but such individual may not vote at any meeting of the
Board of Directors or be counted in determining a quorum for
such meeting. It shall be the duty of members of the Advisory
Board of Directors of the corporation to advise and provide
general policy advice to the Board of Directors of the
corporation at such times and places and in such groups and
committees as may be determined from time to time by the Board
of Directors, but such individuals shall not have any
responsibility or be subject to any liability imposed upon a
director or in any manner otherwise be deemed a director. Each
member of the Advisory Board of Directors shall treat
information regarding the corporation shared with the Advisory
Board of Directors as strictly confidential and will not
disclose such information to any third-party without the
corporations consent. Each member of the Advisory Board of
Directors of the corporation shall be paid such compensation as
may be set from time to time by the Chairman of the Board of
Directors of the corporation. Each member of the Advisory Board
of Directors except in the case of his earlier death,
resignation, retirement, disqualification or removal, shall
serve until the next succeeding annual meeting of the Board of
Directors and thereafter until his successor shall have been
appointed.
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ARTICLE IV.
OFFICERS
Section 1. Selection. The
Board of Directors at each annual meeting shall elect or appoint
a Chief Executive Officer, a President, a Secretary and a
Treasurer, each to serve for the ensuing year and until his
successor is elected and qualified, or until his earlier
resignation, removal from office, or death. The Board of
Directors, at such meeting, may or may not, in the discretion of
the Board, elect a Chairman of the Board, a Chief Operating
Officer, one or more Vice Chairmen of the Board, one or more
Vice Presidents, one or more Assistant Vice Presidents, one
or more Assistant Secretaries, one or more Assistant Treasurers,
and such other officers as the Board of Directors, in its
discretion, shall determine are desirable for the management of
the business and affairs of the corporation. When more than one
Vice President is elected, they may, in the discretion of
the Board, be designated Senior Executive Vice President,
Executive Vice President, or otherwise, and any person may hold
two or more offices, except that neither the Chief Executive
Officer nor the President shall also serve as the Secretary.
Section 2. Removal,
Vacancies. Any officers of the corporation may be
removed from office at any time by the Board of Directors, with
or without cause. Any vacancy occurring in any office of the
corporation may be filled by the Board of Directors.
Section 3. Chief Executive
Officer. The Chief Executive Officer shall, under
the direction of the Board of Directors, have responsibility for
the general direction of the corporations business,
policies and affairs. The Chief Executive Officer shall have
such other authority and perform such other duties as usually
appertain to the chief executive office in business corporations
or as are provided by the Board of Directors.
Section 4. President. The
President shall, under the direction of the Chief Executive
Officer, have direct superintendence of the corporations
business, policies, properties and affairs. The President shall
have such further powers and duties as from time to time may be
conferred upon or assigned to such officer by the Board of
Directors, the Chairman of the Board or the Chief Executive
Officer.
Section 5. Vice
President. The Senior Executive Vice Presidents,
if any, the Executive Vice Presidents, if any, and Vice
Presidents, if any, shall have such powers and duties as from
time to time may be conferred upon or assigned to them by the
Board of Directors, the Chairman of the Board, the Chief
Executive Officer, or the President. A Senior Executive Vice
President or an Executive Vice President or other officer may be
responsible for the assignment of duties to subordinate Vice
Presidents.
Section 6. Secretary. It
shall be the duty of the Secretary to keep a record of the
proceedings of all meetings of the shareholders and Board of
Directors; to keep the stock records of the corporation; to
notify the shareholders and Directors of meetings as provided by
these bylaws: and to perform such other duties as may be
prescribed by the Board of Directors, the Chairman of the Board,
the Chief Executive Officer, or the President. Any Assistant
Secretary, if elected, shall perform the duties of the Secretary
during the absence or disability of the Secretary and shall
perform such other duties as may be prescribed by the Board of
Directors, the Chairman of the Board, the Chief Executive
Officer, the President or the Secretary.
Section 7. Treasurer. The
Treasurer shall keep, or cause to be kept, the financial books
and records of the corporation, and shall faithfully account for
its funds. He shall make such reports as may be necessary to
keep the Board of Directors, the Chairman of the Board, the
Chief Executive Officer, and the President fully informed at all
times as to the financial condition of the corporation, and
shall perform such other duties as may be prescribed by the
Board of Directors, the Chairman of the Board, the Chief
Executive Officer or the President. Any Assistant Treasurer, if
elected, shall perform the duties of the Treasurer during the
absence or disability of the Treasurer, and shall perform such
other duties as may be prescribed by the Board of Directors, the
Chief Executive Officer, Chairman of the Board, the President or
the Treasurer.
ARTICLE V.
CONTRACTS,
ETC.
Section 1. Contracts, Deeds and
Loans. All contracts, deeds, mortgages, pledges,
promissory notes, transfers and other written instruments
binding upon the corporation shall be executed on behalf of the
corporation by the Chief Executive Officer, Chairman of the
Board, the President, any Executive Vice President, any Group
Executives who report directly to such Executive Vice
Presidents, or by such other
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officers or agents as the Board of Directors may designate from
time to time. Any such instrument required to be given under the
seal of the corporation may be attested by the Secretary or
Assistant Secretary of the corporation.
Section 2. Proxies. The
Chief Executive Officer, Chairman of the Board, the President,
any Vice President, the Secretary or the Treasurer of the
corporation shall have full power and authority, on behalf of
the corporation, to attend and to act and to vote at any
meetings of the shareholders, bond holders or other security
holders of any corporation, trust or association in which the
corporation may hold securities, and at and in connection with
any such meeting shall possess and may exercise any and all of
the rights and powers incident to the ownership of such
securities and which as owner thereof the corporation might have
possessed and exercised if present, including the power to
execute proxies and written waivers and consents in relation
thereto. In the case of conflicting representation at any such
meeting, the corporation shall be represented by its highest
ranking officer, in the order first above stated.
Notwithstanding the foregoing, the Board of Directors may, by
resolution, from time to time, confer like powers upon any other
person or persons.
Section 3. Inspection of
Records. The record of shareholders, accounting
records and written proceedings of the shareholders, the Board
of Directors and committees of the Board of Directors shall be
open for inspection and copying during regular business hours at
a reasonable location specified by the corporation solely by
shareholders owning not less than two percent (2%) of the
outstanding shares of the corporation upon at least five
(5) days written notice of demand to inspect and copy such
records. The right of inspection by a shareholder may be granted
only if the demand is made in good faith and for a proper
purpose that is reasonably relevant to a legitimate interest as
a shareholder, describes with reasonable particularity the
purpose for such demand and the records desired for inspection,
the records are directly connected with such purpose and are to
be used only for the stated purpose.
ARTICLE VI.
CHECKS AND DRAFTS
Checks and drafts of the corporation shall be signed by such
officer or officers or such other employees or persons as the
Board of Directors may from time to time designate.
ARTICLE VII.
STOCK
Section 1. Certificates of
Stock. Shares of capital stock of the corporation
shall be issued in certificate or book-entry form. Certificates
shall be numbered consecutively and entered into the stock book
of the corporation as they are issued. Each certificate shall
state on its face the fact that the corporation is a Georgia
corporation, the name of the person to whom the shares are
issued, the number and class of shares (and series, if any)
represented by the certificate and their par value, or a
statement that they are without par value. In addition, when and
if more than one class of shares shall be outstanding, all share
certificates of whatever class shall state that the corporation
will furnish to any shareholder upon request and without charge
a full statement of the designations, relative rights,
preferences and limitations of the shares of each class
authorized to be issued by the corporation.
Section 2. Signature; Transfer Agent;
Registrar. Share certificates shall be signed by
the President or any Vice President and by the Secretary or an
Assistant Secretary of the corporation, and shall bear the seal
of the corporation or a facsimile thereof. The Board of
Directors may from time to time appoint transfer agents and
registrars for the shares of capital stock of the corporation or
any class thereof, and when any share certificate is
countersigned by a transfer agent or registered by a registrar,
the signature of any officer of the corporation appearing
thereon may be a facsimile signature. In case any officer who
signed, or whose facsimile signature was placed upon, any such
certificate shall have died or ceased to be such officer before
such certificate is issued, it may nevertheless be issued with
the same effect as if he continued to be such officer on the
date of issue.
Section 3. Stock
Book. The corporation shall keep at its principal
office, or at the office of its transfer agent, wherever
located, with a copy at the principal office of the corporation,
a book, to be known as the stock book of the corporation,
containing in alphabetical order name of each shareholder of
record, together with his address, the number of shares of each
kind, class or series of stock held by him and his social
security number. The stock book shall be maintained in current
condition. The stock book, including the share register, or the
duplicate copy thereof maintained at the principal office of the
C-2-8
corporation, shall be available for inspection and copying by
any shareholder at any meeting of the shareholders upon request,
or, for a bona fide purpose which is in the best interest of the
business of the corporation, at other times upon the written
request of any shareholder or holder of a voting trust
certificate. The stock book may be inspected and copied either
by a shareholder or a holder of a voting trust certificate in
person, or by their duly authorized attorney or agent. The
information contained in the stock book and share register may
be stored on punch cards, magnetic tape, or any other approved
information storage devices related to electronic data
processing equipment, provided that any such method, device, or
system employed shall first be approved by the Board of
Directors, and provided further that the same is capable of
reproducing all information contained therein, in legible and
understandable form, for inspection by shareholders or for any
other proper corporate purpose.
Section 4. Transfer of Stock;
Registration of Transfer. The stock of the
corporation shall be transferred only by surrender of the
certificate or compliance with the applicable procedures for
stock held in book-entry form and, in each case, transfer upon
the stock book of the corporation. Upon surrender to the
corporation, or to any transfer agent or registrar for the class
of shares represented by the certificate surrendered, of a
certificate properly endorsed for transfer, accompanied by such
assurances as the corporation, or such transfer agent or
registrar, may require as to the genuineness and effectiveness
of each necessary endorsement and satisfactory evidence of
compliance with all applicable laws relating to securities
transfers and the collection of taxes, it shall be the duty of
the corporation, or such transfer agent or registrar, to issue a
new certificate, cancel the old certificate and record the
transactions upon the stock book of the corporation.
Section 5. Registered
Shareholders. Except as otherwise required by
law, the corporation shall be entitled to treat the person
registered on its stock book as the owner of the shares of the
capital stock of the corporation as the person exclusively
entitled to receive notification, dividends or other
distributions, to vote and to otherwise exercise all the rights
and powers of ownership and shall not be bound to recognize any
adverse claim.
Section 6. Record
Date. For the purpose of determining shareholders
entitled to notice of or to vote at any meeting of shareholders
or any adjournment thereof or to express consent to or dissent
from any proposal without a meeting, or for the purpose of
determining shareholders entitled to receive payment of any
dividend or the allotment of any rights, or for the purpose of
any other action affecting the interests of shareholders, the
Board of Directors may fix in advance, a record date. Such date
shall not be more than seventy (70) nor less than ten
(10) days before the date of any such meeting nor more than
seventy (70) days prior to any other action. In each case,
except as otherwise provided by law, only such persons as shall
be shareholders of record on the date so fixed shall be entitled
to notice of and to vote at such meeting and any adjournment
thereof, to express such consent or dissent, or to receive
payment of such dividend or such allotment of rights, or
otherwise be recognized as shareholders for any other related
propose, notwithstanding any registration of a transfer of
shares on the stock book of the corporation after any such
record date so fixed.
Section 7. Lost
Certificates. When a person to whom a certificate
of stock has been issued alleges it to have been lost, destroyed
or wrongfully taken, and if the corporation, transfer agent or
registrar is not on notice that such certificate has been
acquired by a bona fide purchaser, a new certificate may be
issued upon such owners compliance with all of the
following conditions, to wit: (a) He shall file
with the Secretary of the corporation, and the transfer agent or
the registrar, his request for the issuance of a new
certificate, with an affidavit setting for the time, place and
circumstances of the loss: (b) He shall also file with the
Secretary, and the transfer agent or the registrar, a bond with
good and sufficient security acceptable to the corporation and
the transfer agent or the registrar, or other agreement of
indemnity, acceptable to the corporation and the transfer agent
or the registrar, conditioned to indemnify and save harmless the
corporation and the transfer agent or the registrar from any and
all damage, liability and expense of every nature whatsoever
resulting from the corporations or the transfer
agents or the registrars issuing a new certificate
in place of the one alleged to have been lost; and (c) He
shall comply with such other reasonable requirements as the
Board of Directors, the Chief Executive Officer or the President
of the corporation, and the transfer agent or the registrar
shall deem appropriate under the circumstances.
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Section 8. Replacement of Mutilated
Certificates. A new certificate may be issued in
lieu of any certificate previously issued that may be defaced or
mutilated upon surrender for cancellation of a part of the old
certificate sufficient in the opinion of the Secretary and the
transfer agent or the registrar to duly identify the defaced or
mutilated certificate and to protect the corporation and the
transfer agent or the registrar against loss or liability. Where
sufficient identification is lacking, a new certificate may be
issued upon compliance with the conditions set forth in
Section 7 of this Article VII.
ARTICLE VIII.
INDEMNIFICATION AND REIMBURSEMENT
Section 1. Indemnification. Subject
to any express limitations imposed by applicable law, every
person now or hereafter serving as a director, officer, employee
or agent of the corporation and all former directors and
officers, employees or agents shall be indemnified and held
harmless by the corporation to the fullest extent permitted
under the Georgia Business Corporation Code, including from and
against the obligation to pay a judgment, settlement, penalty,
fine (including an excise tax assessed with respect to an
employee benefit plan), and reasonable expenses (including
attorneys fees and disbursements) that may be imposed upon
or incurred by him or her in connection with or resulting from
any threatened, pending, or completed, action, suit, or
proceeding, whether civil, criminal, administrative,
investigative, formal or informal, in which he or she is, or is
threatened to be made, a named defendant or respondent:
(a) because he or she is or was a director, officer,
employee, or agent of the corporation; (b) because he or
she is or was serving at the request of the corporation as a
director, officer, partner, trustee, employee, or agent of
another corporation, partnership, joint venture, trust, employee
benefit plan or other enterprise; or (c) because he or she
is or was serving as an employee of the corporation who was
employed to render professional services as a lawyer or an
accountant to the corporation; regardless of whether such person
is acting in such a capacity at the time such obligation shall
have been imposed or incurred, if (i) such person acted in
a manner he or she believed in good faith to be in or not
opposed to the best interests of the corporation, and, with
respect to any criminal proceeding, if such person had no
reasonable cause to believe his or her conduct was unlawful or
(ii), with respect to an employee benefit plan, such person
believed in good faith that his or her conduct was in the
interests of the participants in and beneficiaries of the plan.
Section 2. Advancement. Reasonable
expenses incurred in any proceeding shall be paid by the
corporation in advance of the final disposition of such
proceeding if authorized by the Board of Directors in the
specific case, or if authorized in accordance with procedures
adopted by the Board of Directors, upon receipt of a written
undertaking executed personally by or on behalf of the director,
officer, employee, or agent to repay such amount if it shall
ultimately be determined that he or she is not entitled to be
indemnified by the corporation, and a written affirmation of his
or her good faith belief that he or she has met the standard of
conduct required for indemnification.
Section 3. Miscellaneous. The
foregoing rights of indemnification and advancement of expenses
shall not be deemed exclusive of any other right to which those
indemnified may be entitled, and the corporation may provide
additional indemnity and rights to its directors, officers,
employees or agents to the extent they are consistent with law.
The provisions of this Article VIII shall cover proceedings
whether now pending or hereafter commenced and shall be
retroactive to cover acts or omissions or alleged acts or
omissions which heretofore have taken place. In the event of
death of any person having a right of indemnification or
advancement of expenses under the provisions of this
Article VIII, such right shall inure to the benefit of his
or her heirs, executors, administrators and personal
representatives. If any part of this Article VIII should be
found to be invalid or ineffective in any proceeding, the
validity and effect of the remaining provisions shall not be
affected.
Section 4. Intent. It
is the intent of the corporation to indemnify persons covered by
Section I of this Article VIII to the full extent permitted
by the Georgia Business Corporation Code, as amended from time
to time. To the extent that the Georgia Business Corporation
Code is hereafter amended to permit a Georgia business
corporation to provide to such persons greater rights to
indemnification than those specifically set forth hereinabove,
this Article shall be deemed amended to require such greater
indemnification, in each case consistent with the Georgia
Business Corporation Code as so amended from time to time. No
amendment, modification or rescission of this Article, or any
provision hereof, the effect of which would diminish the rights
to indemnification or advancement of expenses as set forth
herein shall
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be effective as to any person with respect to any action taken
or omitted by such person prior to such amendment, modification
or rescission.
ARTICLE IX.
MERGERS CONSOLIDATIONS AND OTHER DISPOSITIONS OF
ASSETS
The affirmative vote of the shareholders of the
corporation holding at least 80% of the issued and outstanding
shares of common stock of the corporation shall be required to
approve any merger or consolidation of the corporation with or
into any corporation, and the sale, lease, exchange or other
disposition of all, or substantially all, of the assets of the
corporation to or with any other corporation, person or entity,
with respect to which the approval of the corporations
shareholders is required by the provisions of the corporate laws
of the State of Georgia. This Article shall not be altered,
deleted or rescinded except upon the affirmative vote of the
shareholders holding at least 80% of the issued and outstanding
shares of common stock of the corporation.
ARTICLE IX.
ARTICLE X.
CRITERIA FOR CONSIDERATION OF ACTIONS BY THE BOARD
Section 1. Alternative
Stakeholders. In discharging the duties of their
respective positions and in determining what is believed to be
in the best interests of the corporation, the Board of
Directors, committees thereof and individual directors, in
addition to considering the effects of any action on the
corporation and its shareholders, may consider the interests of
employees, customers, suppliers, and creditors of the
corporation and its subsidiaries, the communities in which
offices or other establishments of the corporation and its
subsidiaries are located, and all other factors such directors
consider pertinent; provided, however, that this provision shall
be deemed solely to grant discretionary authority to the
directors and shall not be deemed to provide to any constituency
any right to be considered.
Section 2. Appropriate
Actions. If the Board of Directors determines
that any proposed business combination should be rejected, it
may take any lawful action to accomplish its purpose including,
but not limited to, any or all of the following:
(i) advising shareholders not to accept the offer;
(ii) litigation against the offeror; (iii) filing
complaints with governmental and regulatory authorities;
(iv) acquiring the corporations securities;
(v) selling or otherwise issuing authorized but unissued
securities of the corporation or treasury stock or granting
options or rights with respect thereto; (vi) acquiring a
company to create an antitrust or other regulatory problem for
the offeror; and (vii) soliciting a more favorable offer
from another individual or entity.
ARTICLE X.
ARTICLE XI.
AMENDMENT
Except as otherwise specifically provided herein, the bylaws of
the corporation may be altered, amended or added to by a
majority of the total number of votes of each voting group
entitled to vote thereon at a meeting of shareholders where such
business is properly brought before the meeting in accordance
with the bylaws or, subject to such limitations as the
shareholders may from time to time prescribe, by a majority vote
of all the Directors then holding office at any meeting of the
Board of Directors.
ARTICLE XIIXI.
BUSINESS COMBINATIONS
All of the requirements of Article 11, Part 3, of the
Georgia Business Corporation Code, included in
Sections 14-2-1131
through 1133 (and any successor provisions thereto), shall be
applicable to the corporation in connection with any business
combination, as defined therein, with any interested
shareholder, as defined therein.
C-2-11
Total
System Services, Inc.
2008
Omnibus Plan
D-1
Contents
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Article 1.
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Establishment, Purpose, and Duration
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D-3
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Article 2.
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Definitions
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D-3
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Article 3.
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Administration
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D-6
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Article 4.
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Shares Subject to This Plan and Maximum Awards
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D-7
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Article 5.
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Eligibility and Participation
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D-8
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Article 6.
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Stock Options
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D-9
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Article 7.
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Stock Appreciation Rights
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D-10
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Article 8.
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Restricted Stock and Restricted Stock Units
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D-11
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Article 9.
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Performance Units/Performance Shares
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D-12
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Article 10.
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Cash-Based Awards and Other Stock-Based Awards
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D-13
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Article 11.
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Transferability of Awards
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D-13
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Article 12.
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Performance Measures
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D-13
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Article 13.
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Nonemployee Director Awards
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D-15
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Article 14.
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Dividends and Dividend Equivalents
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D-15
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Article 15.
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Change of Control
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D-15
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Article 16.
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Rights of Participants
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D-15
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Article 17.
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Amendment, Modification, Suspension, and Termination
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D-15
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Article 18.
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Withholding
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D-16
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Article 19.
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Successors
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D-16
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Article 20.
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General Provisions
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D-16
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D-2
Total
System Services, Inc.
2008
Omnibus Plan
Article 1.
Establishment, Purpose, and Duration
1.1 Establishment. Total System
Services, Inc. (hereinafter referred to as the
Company) hereby establishes an incentive
compensation plan to be known as Total System Services, Inc.
2008 Omnibus Plan (hereinafter referred to as the
Plan), as set forth in this document.
The Plan permits the grant of Nonqualified Stock Options,
Incentive Stock Options, Stock Appreciation Rights, Restricted
Stock, Restricted Stock Units, Performance Shares, Performance
Units, Covered Employee annual incentive awards, Cash-Based
Awards, and Other Stock-Based Awards.
Subject to approval by the Companys shareholders, the Plan
shall become effective upon (and shall not become effective
unless and until there occurs) the spin-off of Company stock to
Synovus Financial Corp. shareholders. Following its
effectiveness, the Plan shall remain in effect as provided in
Section 1.3 hereof.
1.2 Purpose of the Plan. The
purpose of the Plan is to advance the interests of the Company
and its shareholders through Awards that give Employees and
Directors a personal stake in the Companys growth,
development and financial success. Awards under the Plan will
motivate Employees and Directors to devote their best efforts to
the business of the Company. They will also help the Company
attract and retain the services of Employees and Directors who
are in a position to make significant contributions to the
Companys future success.
1.3 Duration of the Plan. Unless
sooner terminated as provided herein, the Plan shall terminate
ten (10) years from the date of the approval of the Plan by
the Companys shareholders. After the Plans
termination, no new Awards may be granted, but Awards previously
granted shall remain outstanding in accordance with their
applicable terms and conditions, including the terms and
conditions of the Plan. Notwithstanding the foregoing, no
Incentive Stock Options may be granted more than ten
(10) years after the earlier of: (a) the date the Plan
is adopted by the Board, or (b) the date the Plan is
approved by the Companys shareholders.
Article 2.
Definitions
Whenever used in this Plan, the following terms shall have the
meanings set forth below, and when the meaning is intended, the
initial letter of the word shall be capitalized:
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2.1
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Affiliate shall mean any corporation or other
entity (including, but not limited to, a partnership or a
limited liability company) that is affiliated with the Company
through stock or equity ownership or otherwise, and is
designated as an Affiliate for purposes of this Plan by the
Committee.
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2.2
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Annual Award Limit or Annual Award
Limits have the meaning set forth in Section 4.3.
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2.3
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Award means, individually or collectively, a
grant under this Plan of Nonqualified Stock Options, Incentive
Stock Options, Stock Appreciation Rights, Restricted Stock,
Restricted Stock Units, Performance Shares, Performance Units,
Covered Employee annual incentive awards, Cash-Based Awards, or
Other Stock-Based Awards, in each case subject to the terms of
this Plan.
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2.4
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Award Agreement means either: (a) a
written agreement entered into by the Company and a Participant
setting forth the terms and provisions applicable to an Award
granted under this Plan, or (b) a written or electronic
statement issued by the Company to a Participant describing the
terms and provisions of such Award, including any amendment or
modification thereof. The Committee may provide for the use of
electronic, Internet, or other nonpaper Award Agreements, and
the use of electronic, Internet, or other nonpaper means for the
acceptance thereof and actions thereunder by a Participant.
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2.5
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Beneficial Owner or Beneficial
Ownership shall have the meaning ascribed to such
terms in
Rule 13d-3
promulgated under the Exchange Act.
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D-3
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2.6
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Board or Board of Directors
means the Board of Directors of the Company.
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2.7
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Cash-Based Award means an Award, denominated
in cash, granted to a Participant as described in
Article 10.
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2.8
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Change of Control means any of the following
events: (a) the acquisition by any
person, as such term is used in Section 13(d)
and 14(d) of the Exchange Act (other than the Company or a
subsidiary or any Company employee benefit plan (including its
trustee)), of beneficial ownership (as defined in
Rule 13d-3
under the Exchange Act), directly or indirectly, of securities
of the Company representing 20% or more of the total number of
shares of the Companys then outstanding securities;
(b) individuals who, as of the date of the spin-off of
Company stock to Synovus Financial Corp. shareholders,
constitute the Board (the Incumbent Board) cease for
any reason to constitute at least two-thirds (2/3) of the Board;
provided, however, that any individual becoming a director
subsequent to the date hereof whose election, or nomination for
election by the Companys shareholders, was approved by a
vote of at least two-thirds (2/3) of the directors then
comprising the Incumbent Board shall be considered as though
such individual were a member of the Incumbent Board, but
excluding, for this purpose, any such individual whose initial
assumption of office occurs as a result of an actual or
threatened election contest with respect to the election or
removal of directors or other actual or threatened solicitation
of proxies or consents by or on behalf of a Person other than
the Board; (c) consummation of a reorganization, merger or
consolidation or sale or other disposition of all or
substantially all of the assets or stock of the Company (a
Business Combination), in each case, unless,
following such Business Combination, (i) all or
substantially all of the individuals and entities who were the
beneficial owners, respectively, of the total number of shares
of the Companys outstanding securities immediately prior
to such Business Combination beneficially own, directly or
indirectly, more than sixty percent (60%) of, respectively, the
total number of shares of the then outstanding securities of the
corporation resulting from such Business Combination (including,
without limitation, a corporation which as a result of such
transaction owns the Company or all or substantially all of the
Companys assets either directly or through one or more
subsidiaries) in substantially the same proportions as their
ownership, immediately prior to such Business Combination, of
the total number of shares of the Companys outstanding
securities, (ii) no Person (excluding any corporation
resulting from such Business Combination, or any employee
benefit plan (including its trustee) of the Company or such
corporation resulting from such Business Combination
beneficially owns, directly or indirectly, 20% or more of,
respectively, the total number of shares of the then outstanding
securities of the corporation resulting from such Business
Combination except to the extent that such ownership existed
prior to the Business Combination and (iii) at least
two-thirds (2/3) of the members of the board of directors of the
corporation resulting from such Business Combination.
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A Change of Control shall not result from any
transaction precipitated by the Companys insolvency,
appointment of a conservator, or determination by a regulatory
agency that the Company is insolvent, nor from any transaction
initiated by the Company in regard to converting from a publicly
traded company to a privately held company.
Notwithstanding anything in the Plan to the contrary, a
Change of Control of the Company shall not result
from the spin-off of Company stock to Synovus Financial Corp.
shareholders.
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2.9
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Code means the U.S. Internal Revenue
Code of 1986, as amended from time to time. For purposes of this
Plan, references to sections of the Code shall be deemed to
include references to any applicable regulations thereunder and
any successor or similar provision.
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2.10
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Committee means the Compensation Committee of
the Board or a subcommittee thereof, or any other committee
designated by the Board to administer this Plan. The members of
the Committee shall be appointed from time to time and shall
serve at
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D-4
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the discretion of the Board. If the Committee does not exist or
cannot function for any reason, the Board may take any action
under the Plan that would otherwise be the responsibility of the
Committee.
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2.11
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Company means Total System Services, Inc., a
Georgia corporation, and any successor thereto as provided in
Article 19 herein.
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2.12
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Covered Employee means any key Employee who
is or may become a Covered Employee, as defined in
Code Section 162(m), and who is designated, either as an
individual Employee or class of Employees, by the Committee
within the shorter of: (a) ninety (90) days after the
beginning of the Performance Period, or (b) twenty-five
percent (25%) of the Performance Period has elapsed, as a
Covered Employee under this Plan for such applicable
Performance Period.
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2.13
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Director means any individual who is a member
of the Board of Directors of the Company.
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2.14
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Employee means any individual designated as
an employee of the Company, its Affiliates,
and/or its
Subsidiaries on the payroll records thereof. An Employee shall
not include any individual during any period he or she is
classified or treated by the Company, Affiliate,
and/or
Subsidiary as an independent contractor, a consultant, or any
employee of an employment, consulting, or temporary agency or
any other entity other than the Company, Affiliate,
and/or
Subsidiary, without regard to whether such individual is
subsequently determined to have been, or is subsequently
retroactively reclassified as, a common-law employee of the
Company, Affiliate,
and/or
Subsidiary during such period.
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2.15
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Exchange Act means the Securities Exchange
Act of 1934, as amended from time to time, or any successor act
thereto.
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2.16
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Fair Market Value or FMV
means a price that is based on the closing price of a Share
reported on the New York Stock Exchange (NYSE) or
other established stock exchange (or exchanges) on the
applicable date, or an average of trading days, as determined by
the Committee in its discretion. Unless the Committee determines
otherwise, Fair Market Value shall be deemed to be equal to the
reported closing price of a Share on the most recent date on
which Shares were publicly traded. In the event Shares are not
publicly traded at the time a determination of their value is
required to be made hereunder, the determination of their Fair
Market Value shall be made by the Committee in such manner as it
deems appropriate.
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2.17
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Freestanding SAR means a SAR that is granted
independently of any Options, as described in Article 7.
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2.18
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Full-Value Award means an Award other than in
the form of an ISO, NQSO, or SAR, and which is settled by the
issuance of Shares.
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2.19
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Grant Price means the price established at
the time of grant of a SAR pursuant to Article 7, used to
determine whether there is any payment due upon exercise of the
SAR.
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2.20
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Incentive Stock Option or ISO
means an Option to purchase Shares granted under
Article 6 to an Employee and that is designated as an
Incentive Stock Option that is intended to meet the requirements
of Code Section 422 or any successor provision.
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2.21
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Insider shall mean an individual who is, on
the relevant date, an officer or Director of the Company, or a
more than ten percent (10%) Beneficial Owner of any class of the
Companys equity securities that is registered pursuant to
Section 12 of the Exchange Act, as determined by the Board
in accordance with Section 16 of the Exchange Act.
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2.22
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Nonemployee Director means a Director who is
not an Employee.
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D-5
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2.23
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Nonemployee Director Award means any NQSO,
SAR, or Full-Value Award granted, whether singly, in
combination, or in tandem, to a Participant who is a Nonemployee
Director pursuant to such applicable terms, conditions, and
limitations as the Board or Committee may establish in
accordance with this Plan.
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2.24
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Nonqualified Stock Option or
NQSO means an Option that is not intended to
meet the requirements of Code Section 422, or that
otherwise does not meet such requirements.
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2.25
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Option means an Incentive Stock Option or a
Nonqualified Stock Option, as described in Article 6.
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2.26
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Option Price means the price at which a Share
may be purchased by a Participant pursuant to an Option.
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2.27
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Other Stock-Based Award means an equity-based
or equity-related Award not otherwise described by the terms of
this Plan, granted pursuant to Article 10.
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2.28
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Participant means any eligible individual as
set forth in Article 5 to whom an Award is granted.
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2.29
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Performance-Based Compensation with respect
to Covered Employees, means compensation under an Award that is
intended to satisfy the requirements of Code Section 162(m)
for certain performance-based compensation. Notwithstanding the
foregoing, nothing in this Plan shall be construed to mean that
an Award which does not satisfy the requirements for
performance-based compensation under Code Section 162(m) does
not constitute performance-based compensation for other
purposes, including Code Section 409A.
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2.30
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Performance Measures means measures as
described in Article 12 on which the performance goals are
based and which are approved by the Companys shareholders
pursuant to this Plan in order to qualify Awards as
Performance-Based Compensation.
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2.31
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Performance Period means the period of time
during which the performance goals must be met in order to
determine the degree of payout
and/or
vesting with respect to an Award.
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2.32
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Performance Share means an Award under
Article 9 herein and subject to the terms of this Plan,
denominated in Shares, the value of which at the time it is
payable is determined as a function of the extent to which
corresponding performance criteria have been achieved.
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2.33
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Performance Unit means an Award under
Article 9 herein and subject to the terms of this Plan,
denominated in units, the value of which at the time it is
payable is determined as a function of the extent to which
corresponding performance criteria have been achieved.
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2.34
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Period of Restriction means the period when
Restricted Stock or Restricted Stock Units are subject to a
substantial risk of forfeiture (based on the passage of time,
the achievement of performance goals, or upon the occurrence of
other events as determined by the Committee, in its discretion),
as provided in Article 8.
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2.35
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Person shall have the meaning ascribed to
such term in Section 3(a)(9) of the Exchange Act and used in
Sections 13(d) and 14(d) thereof, including a
group as defined in Section 13(d) thereof.
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2.36
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Plan means the Total System Services, Inc.
2008 Omnibus Plan.
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2.37
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Plan Year means the calendar year.
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2.38
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Restricted Stock means an Award of Shares
granted to a Participant pursuant to Article 8.
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2.39
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Restricted Stock Unit means an Award granted
to a Participant pursuant to Article 8, except no Shares
are actually awarded to the Participant on the date of grant.
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D-6
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2.40
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Share means a share of common stock of the
Company, par value $.10 per share.
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2.41
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Stock Appreciation Right or
SAR means an Award, designated as a SAR,
pursuant to the terms of Article 7 herein.
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2.42
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Subsidiary means any corporation or other
entity, whether domestic or foreign, in which the Company has or
obtains, directly or indirectly, a proprietary interest of more
than fifty percent (50%) by reason of stock ownership or
otherwise.
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ARTICLE 3.
Administration
3.1 General. The Plan shall be
administered by the Committee, subject to this Article 3
and the other provisions of this Plan. The Committee may employ
attorneys, consultants, accountants, agents, and other
individuals or entities, any of which may be an Employee, and
the Committee, the Company, and its officers and Directors shall
be entitled to rely upon the advice, opinions, or valuations of
any such persons. All actions taken and all interpretations and
determinations made by the Committee shall be final and binding
on the Participants, the Company, and all other interested
individuals.
3.2 Authority of the Committee. The
Committee is authorized and empowered to administer the Plan
and, subject to the provisions of the Plan, shall have full
power to (i) designate Employees and Directors to be
recipients of Awards; (ii) determine the type and size of
Awards; (iii) determine the terms and conditions of Awards;
(iv) certify satisfaction of performance goals for purposes
of satisfying the requirements of Code Section 162(m);
(v) construe and interpret the terms of the Plan and any
Award Agreement or other instrument entered into under the Plan;
(vi) establish, amend, or waive rules and regulations for
the Plans administration; (vii) subject to the
provisions of Section 4.4, authorize conversion or
substitution under the Plan of any or all outstanding option or
other awards held by service providers of an entity acquired by
the Company on terms determined by the Committee (without regard
to limitations set forth in Section 6.3 and 7.5);
(viii) subject to the provisions of Articles 15 and
17, amend the terms and conditions of any outstanding Award;
(ix) grant Awards as an alternative to, or as the form of
payment for, grants or rights earned or due under compensation
plans or similar arrangements of the Company; and (x) make
any other determination and take any other action that it deems
necessary or desirable for the administration of the Plan.
3.3 Delegation. To the extent
permitted by law and applicable rules of a stock exchange, the
Committee may, by resolution, authorize one or more officers of
the Company to do one or both of the following on the same basis
as can the Committee: (a) designate Employees to be
recipients of Awards; and (b) determine the type and size
of any such Awards; provided, however: (i) the authority to
make Awards to any Nonemployee Director or to any Employee who
is considered an Insider may not be delegated; (ii) the
resolution providing such authorization shall set forth the
total number of Shares and Awards such officer(s) may grant; and
(iii) the officer(s) shall report periodically to the
Committee regarding the nature and scope of the Awards granted
pursuant to the authority delegated.
ARTICLE 4.
Shares Subject to This Plan and Maximum Awards
4.1 Number of Shares Available for Awards.
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(a)
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Subject to adjustment as provided in Section 4.4 herein,
the maximum number of Shares available for issuance to
Participants under this Plan (the Share
Authorization) shall be 17,000,000 Shares.
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(b)
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The maximum number of Shares of the Share Authorization that may
be issued pursuant to ISOs under this Plan shall be 17,000,000.
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(c)
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Subject to adjustment in Section 4.4, the maximum number of
Shares of the Share Authorization that may be issued to
Nonemployee Directors shall be 2,000,000 Shares, and no
Nonemployee Director may be granted an Award covering more than
10,000 Shares in any Plan Year, except that this annual
limit on Nonemployee Director Awards shall be increased to
50,000 Shares for any Nonemployee Director serving as
Chairman of the Board; provided, however, that in the Plan Year
in which an individual is first appointed or elected to the
Board as a Nonemployee Director, such individual may be granted
an Award covering up to an additional 50,000 Shares (a
New Nonemployee Director Award).
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D-7
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(d)
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Except with respect to a maximum of five percent (5%) of the
Share Authorization, any Full Value Awards which vest on the
basis of the Employees continued employment with or
provision of service to the Company shall not provide for
vesting which is any more rapid than annual pro rata vesting
over a three- (3-) year period and any Full Value Awards which
vest upon the attainment of performance goals shall provide for
a Performance Period of at least twelve (12) months.
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4.2 Share Usage. Shares covered by
an Award shall only be counted as used to the extent they are
actually issued. 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 Committees permission, prior to
the issuance of Shares, for Awards not involving Shares, shall
be available again for grant under this Plan. However, the full
number of Stock Appreciation Rights granted that are to be
settled by the issuance of Shares shall be counted against the
number of Shares available for award under the Plan, regardless
of the number of Shares actually issued upon settlement of such
Stock Appreciation Rights. Further, any Shares withheld to
satisfy tax withholding obligations on Awards issued under the
Plan, Shares tendered to pay the exercise price of Awards under
the Plan, and Shares repurchased on the open market with the
proceeds of an Option exercise will no longer be eligible to be
returned as available Shares under the Plan. 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
Committees permission, prior to the issuance of Shares,
for Awards not involving Shares, shall be available again for
grant under this Plan. The Shares available for issuance under
this Plan may be authorized and unissued Shares or treasury
Shares.
4.3 Annual Award Limits. Unless and
until the Committee determines that an Award to a Covered
Employee shall not be designed to qualify as Performance-Based
Compensation, the following limits (each an Annual Award
Limit and, collectively, Annual Award Limits)
shall apply to grants of such Awards under this Plan:
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(a)
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Options: The maximum aggregate number of
Shares subject to Options granted in any one Plan Year to any
one Participant shall be 4,000,000.
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(b)
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SARs: The maximum number of Shares subject to
Stock Appreciation Rights granted in any one Plan Year to any
one Participant shall be 4,000,000.
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(c)
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Restricted Stock or Restricted Stock Units: The maximum
aggregate grant with respect to Awards of Restricted Stock or
Restricted Stock Units in any one Plan Year to any one
Participant shall be 2,000,000.
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(d)
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Performance Units or Performance Shares: The maximum
aggregate Award of Performance Units or Performance Shares that
a Participant may receive in any one Plan Year shall be
2,000,000 Shares if such Award is payable in Shares, or
equal to the value of 100,000 Shares if such Award is
payable in cash or property other than Shares, determined as of
the earlier of the vesting or the payout date, as applicable.
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(e)
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Cash-Based Awards: The maximum aggregate amount awarded
or credited with respect to Cash-Based Awards to any one
Participant in any one Plan Year may not exceed $2,000,000.00.
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(f)
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Other Stock-Based Awards. The maximum
aggregate grant with respect to Other Stock-Based Awards
pursuant to Section 10.2 in any one Plan Year to any one
Participant shall be 2,000,000.
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4.4 Adjustments in Authorized
Shares. In the event of any corporate event or
transaction (including, but not limited to, a change in the
Shares of the Company or the capitalization of the Company) such
as a merger, consolidation, reorganization, recapitalization,
separation, partial or complete liquidation, stock dividend,
stock split, reverse stock split, split up, spin-off, or other
distribution of stock or property of the Company, combination of
Shares, exchange of Shares, dividend in-kind, or other like
change in capital structure, number of outstanding Shares or
distribution (other than normal cash dividends) to shareholders
of the Company, or any similar corporate event or transaction,
the Committee, in order to prevent dilution or enlargement of
Participants rights under this Plan, shall substitute or
adjust the number and kind of Shares that may be issued under
this Plan or under particular forms of
D-8
Awards, the number and kind of Shares subject to outstanding
Awards, the Option Price or Grant Price applicable to
outstanding Awards, the Annual Award Limits, or other value
determinations applicable to outstanding Awards, with the
specific adjustments to be determined by the Committee in its
sole discretion.
The Committee shall make appropriate adjustments to any other
terms of any outstanding Awards under this Plan to reflect such
changes or distributions, including modifications of performance
goals and changes in the length of Performance Periods. The
determination of the Committee as to the foregoing adjustments,
if any, shall be conclusive and binding on Participants under
this Plan.
Subject to the provisions of Article 17 and notwithstanding
anything else herein to the contrary, without affecting the
number of Shares reserved or available hereunder, the Committee
may authorize the issuance or assumption of benefits under this
Plan in connection with any merger, consolidation, acquisition
of property or stock, or reorganization upon such terms and
conditions as it may deem appropriate (including, but not
limited to, a conversion of equity awards into Awards under this
Plan in a manner consistent with paragraph 53 of FASB
Interpretation No. 44), subject to compliance with the
rules under Code Sections 422 and 424, as and where
applicable.
ARTICLE 5.
Eligibility and Participation
5.1 Eligibility. Individuals
eligible to participate in this Plan include all Employees and
Directors.
5.2 Actual Participation. Subject
to the provisions of this Plan, the Committee may, from time to
time in its sole discretion, select from the individuals
eligible to participate, those to whom Awards shall be granted.
ARTICLE 6.
Stock Options
6.1 Grant of Options. Subject to
the terms and provisions of this Plan, Options may be granted to
Participants in such number, and upon such terms, and at any
time and from time to time as shall be determined by the
Committee, in its sole discretion, provided that ISOs may be
granted only to eligible Employees of the Company or of any
parent or subsidiary corporation (as permitted under Code
Sections 422 and 424). However, an Employee who is employed
by an Affiliate
and/or
Subsidiary and is subject to Code Section 409A may only be
granted Options to the extent the Affiliate
and/or
Subsidiary is part of the Companys consolidated group for
United States federal tax purposes.
6.2 Award Agreement. Each Option
grant shall be evidenced by an Award Agreement that shall
specify the Option Price, the maximum duration of the Option,
the number of Shares to which the Option pertains, the
conditions upon which an Option shall become vested and
exercisable, and such other provisions as the Committee shall
determine which are not inconsistent with the terms of this
Plan. The Award Agreement also shall specify whether the Option
is intended to be an ISO or an NQSO.
6.3 Option Price. The Option Price
for each grant of an Option under this Plan shall be determined
by the Committee in its sole discretion and shall be specified
in the Award Agreement; provided, however, the Option Price on
the date of grant must be at least equal to one hundred percent
(100%) of the FMV of the Shares as determined on the date of
grant.
6.4 Term of Options. Each Option
granted to a Participant shall expire at such time as the
Committee shall determine at the time of grant; provided,
however, no Option shall be exercisable later than the tenth
(10th) anniversary date of its grant.
6.5 Exercise of Options. Options
granted under this Article 6 shall be exercisable at such
times and be subject to such restrictions and conditions as the
Committee shall in each instance approve, which terms and
restrictions need not be the same for each grant or for each
Participant.
Options granted under this Article 6 shall be exercised by
the delivery of a notice of exercise to the Company or an agent
designated by the Company in a form specified or accepted by the
Committee setting forth the number of Shares with respect to
which the Option is to be exercised, accompanied by full payment
for the Shares, or by complying with any alternative exercise
procedures the Committee may authorize.
6.6 Payment. A condition of the
issuance of the Shares as to which an Option shall be exercised
shall be the payment of the Option Price. The Option Price of
any Option shall be payable to the
D-9
Company in full either: (a) in cash or its equivalent;
(b) by tendering (either by actual delivery or attestation)
previously acquired Shares having an aggregate Fair Market Value
at the time of exercise equal to the Option Price (provided that
except as otherwise determined by the Committee, the Shares that
are tendered must have been held by the Participant for at least
six (6) months (or such other period, if any, as the
Committee may permit) prior to their tender to satisfy the
Option Price if acquired under this Plan or any other
compensation plan maintained by the Company or have been
purchased on the open market); (c) by a cashless
(broker-assisted) exercise; (d) by a combination of (a),
(b), and/or
(c); or (e) any other method approved or accepted by the
Committee in its sole discretion.
Subject to any governing rules or regulations, as soon as
practicable after receipt of written notification of exercise
and full payment (including satisfaction of any applicable tax
withholding), the Company shall deliver to the Participant
evidence of book entry Shares, or upon the Participants
request, Share certificates in an appropriate amount based upon
the number of Shares purchased under the Option(s).
Unless otherwise determined by the Committee, all payments under
all of the methods indicated above shall be paid in United
States dollars.
6.7 Restrictions on Share
Transferability. The Committee may impose such
restrictions on any Shares acquired pursuant to the exercise of
an Option granted under this Article 6 as it may deem
advisable, including, without limitation, minimum holding period
requirements, restrictions under applicable federal securities
laws, under the requirements of any stock exchange or market
upon which such Shares are then listed
and/or
traded, or under any blue sky or state securities laws
applicable to such Shares.
6.8 Termination of
Employment/Service. Each Participants Award
Agreement shall set forth the extent to which the Participant
shall have the right to exercise the Option following
termination of the Participants employment or provision of
services to the Company, its Affiliates,
and/or its
Subsidiaries, as the case may be. Such provisions shall be
determined in the sole discretion of the Committee, shall be
included in the Award Agreement entered into with each
Participant, need not be uniform among all Options issued
pursuant to this Article 6, and may reflect distinctions
based on the reasons for termination.
ARTICLE 7.
Stock Appreciation Rights
7.1 Grant of SARs. Subject to the
terms and conditions of this Plan, Freestanding SARs may be
granted to Participants at any time and from time to time as
shall be determined by the Committee. However, an Employee who
is employed by an Affiliate
and/or
Subsidiary and is subject to Code Section 409A may only be
granted SARs to the extent the Affiliate
and/or
Subsidiary is part of the Companys consolidated group for
United States federal tax purposes.
Subject to the terms and conditions of this Plan, the Committee
shall have complete discretion in determining the number of SARs
granted to each Participant and, consistent with the provisions
of this Plan, in determining the terms and conditions pertaining
to such SARs.
The Grant Price for each grant of a Freestanding SAR shall be
determined by the Committee and shall be specified in the Award
Agreement; provided, however, the Grant Price on the date of
grant must be at least equal to one hundred percent (100%) of
the FMV of the Shares as determined on the date of grant.
7.2 SAR Agreement. Each SAR Award
shall be evidenced by an Award Agreement that shall specify the
Grant Price, the term of the SAR, and such other provisions as
the Committee shall determine.
7.3 Term of SAR. The term of a SAR
granted under this Plan shall be determined by the Committee, in
its sole discretion, and except as determined otherwise by the
Committee and specified in the SAR Award Agreement, no SAR shall
be exercisable later than the tenth
(10th)
anniversary date of its grant.
7.4 Exercise of Freestanding
SARs. Freestanding SARs may be exercised upon
whatever terms and conditions the Committee, in its sole
discretion, imposes.
D-10
7.5 Settlement of SAR Amount. Upon
the exercise of a SAR, a Participant shall be entitled to
receive payment from the Company in an amount determined by
multiplying:
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(a)
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The excess of the Fair Market Value of a Share on the date of
exercise over the Grant Price; by
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(b) The number of Shares with respect to which the SAR is
exercised.
At the discretion of the Committee, the payment upon SAR
exercise may be in cash, Shares, or any combination thereof, or
in any other manner approved by the Committee in its sole
discretion. The Committees determination regarding the
form of SAR payout shall be set forth in the Award Agreement
pertaining to the grant of the SAR.
7.6 Termination of
Employment/Service. Each Award Agreement shall
set forth the extent to which the Participant shall have the
right to exercise the SAR following termination of the
Participants employment with or provision of services to
the Company, its Affiliates,
and/or its
Subsidiaries, as the case may be. Such provisions shall be
determined in the sole discretion of the Committee, shall be
included in the Award Agreement entered into with Participants,
need not be uniform among all SARs issued pursuant to this Plan,
and may reflect distinctions based on the reasons for
termination.
7.7 Other Restrictions. The
Committee shall impose such other conditions
and/or
restrictions on any Shares received upon exercise of a SAR
granted pursuant to this Plan as it may deem advisable or
desirable. These restrictions may include, but shall not be
limited to, a requirement that the Participant hold the Shares
received upon exercise of a SAR for a specified period of time.
ARTICLE 8.
Restricted Stock and Restricted Stock Units
8.1 Grant of Restricted Stock or Restricted Stock
Units. Subject to the terms and provisions of
this Plan, the Committee, at any time and from time to time, may
grant Shares of Restricted Stock
and/or
Restricted Stock Units to Participants in such amounts as the
Committee shall determine. Restricted Stock Units shall be
similar to Restricted Stock except that no Shares are actually
awarded to the Participant on the date of grant.
8.2 Restricted Stock or Restricted Stock Unit
Agreement. Each Restricted Stock
and/or
Restricted Stock Unit grant shall be evidenced by an Award
Agreement that shall specify the Period(s) of Restriction, the
number of Shares of Restricted Stock or the number of Restricted
Stock Units granted, and such other provisions as the Committee
shall determine.
8.3 Other Restrictions. The
Committee shall impose such other conditions
and/or
restrictions on any Shares of Restricted Stock or Restricted
Stock Units granted pursuant to this Plan as it may deem
advisable including, without limitation, a requirement that
Participants pay a stipulated purchase price for each Share of
Restricted Stock or each Restricted Stock Unit, restrictions
based upon the achievement of specific performance goals,
time-based restrictions on vesting following the attainment of
the performance goals, time-based restrictions,
and/or
restrictions under applicable laws or under the requirements of
any stock exchange or market upon which such Shares are listed
or traded, or holding requirements or sale restrictions placed
on the Shares by the Company upon vesting of such Restricted
Stock or Restricted Stock Units.
To the extent deemed appropriate by the Committee, the Company
may retain the certificates representing Shares of Restricted
Stock in the Companys possession until such time as all
conditions
and/or
restrictions applicable to such Shares have been satisfied or
lapse.
Except as otherwise provided in this Article 8, Shares of
Restricted Stock covered by each Restricted Stock Award shall
become freely transferable by the Participant after all
conditions and restrictions applicable to such Shares have been
satisfied or lapse (including satisfaction of any applicable tax
withholding obligations), and Restricted Stock Units shall be
paid in cash, Shares, or a combination of cash and Shares as the
Committee, in its sole discretion, shall determine.
D-11
8.4 Certificate Legend. In addition
to any legends placed on certificates pursuant to
Section 8.3, each certificate representing Shares of
Restricted Stock granted pursuant to this Plan may bear a legend
such as the following or as otherwise determined by the
Committee in its sole discretion:
The transferability of this certificate and the shares of
stock represented hereby are subject to the terms and conditions
(including forfeiture) of the Total System Services, Inc. 2008
Omnibus Plan and a Restricted Stock Award Agreement entered into
between the registered owner and Total System Services, Inc.
Copies of such Plan and Agreement are on file in the offices of
Total System Services, Inc., 1600 First Avenue, Columbus,
Georgia 31902.
8.5 Voting Rights. Unless otherwise
determined by the Committee and set forth in a
Participants Award Agreement, to the extent permitted or
required by law, as determined by the Committee, Participants
holding Shares of Restricted Stock granted hereunder may be
granted the right to exercise full voting rights with respect to
those Shares during the Period of Restriction. A Participant
shall have no voting rights with respect to any Restricted Stock
Units granted hereunder.
8.6 Termination of
Employment/Service. Each Award Agreement shall
set forth the extent to which the Participant shall have the
right to retain Restricted Stock
and/or
Restricted Stock Units following termination of the
Participants employment with or provision of services to
the Company, its Affiliates,
and/or its
Subsidiaries, as the case may be. Such provisions shall be
determined in the sole discretion of the Committee, shall be
included in the Award Agreement entered into with each
Participant, need not be uniform among all Shares of Restricted
Stock or Restricted Stock Units issued pursuant to this Plan,
and may reflect distinctions based on the reasons for
termination.
8.7 Section 83(b)
Election. The Committee may provide in an Award
Agreement that the Award of Restricted Stock is conditioned upon
the Participant making or refraining from making an election
with respect to the Award under Code Section 83(b). If a
Participant makes an election pursuant to Code
Section 83(b) concerning a Restricted Stock Award, the
Participant shall be required to file promptly a copy of such
election with the Company.
ARTICLE 9.
Performance Units/Performance Shares
9.1 Grant of Performance Units/Performance
Shares. Subject to the terms and provisions of
this Plan, the Committee, at any time and from time to time, may
grant Performance Units
and/or
Performance Shares to Participants in such amounts and upon such
terms as the Committee shall determine.
9.2 Value of Performance Units/Performance
Shares. Each Performance Unit shall have an
initial value that is established by the Committee at the time
of grant. Each Performance Share shall have an initial value
equal to the Fair Market Value of a Share on the date of grant.
The Committee shall set performance goals in its discretion
which, depending on the extent to which they are met, will
determine the value
and/or
number of Performance Units/Performance Shares that will be paid
out to the Participant.
9.3 Earning of Performance Units/Performance
Shares. Subject to the terms of this Plan, after
the applicable Performance Period has ended, the holder of
Performance Units/Performance Shares shall be entitled to
receive payout on the value and number of Performance
Units/Performance Shares earned by the Participant over the
Performance Period, to be determined as a function of the extent
to which the corresponding performance goals have been achieved.
9.4 Form and Timing of Payment of Performance
Units/Performance Shares. Payment of earned
Performance Units/Performance Shares shall be as determined by
the Committee and as evidenced in the Award Agreement. Subject
to the terms of this Plan, the Committee, in its sole
discretion, may pay earned Performance Units/Performance Shares
in the form of cash or in Shares (or in a combination thereof)
equal to the value of the earned Performance Units/Performance
Shares at the close of the applicable Performance Period, or as
soon as practicable after the end of the Performance Period. Any
Shares may be granted subject to any restrictions deemed
appropriate by the Committee. The determination of the Committee
with respect to the form of payout of such Awards shall be set
forth in the Award Agreement pertaining to the grant of the
Award.
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9.5 Termination of
Employment/Service. Each Award Agreement shall
set forth the extent to which the Participant shall have the
right to retain Performance Units
and/or
Performance Shares following termination of the
Participants employment with or provision of services to
the Company, its Affiliates,
and/or its
Subsidiaries, as the case may be. Such provisions shall be
determined in the sole discretion of the Committee, shall be
included in the Award Agreement entered into with each
Participant, need not be uniform among all Awards of Performance
Units or Performance Shares issued pursuant to this Plan, and
may reflect distinctions based on the reasons for termination.
ARTICLE 10.
Cash-Based Awards and Other Stock-Based Awards
10.1 Grant of Cash-Based
Awards. Subject to the terms and provisions of
the Plan, the Committee, at any time and from time to time, may
grant Cash-Based Awards to Participants in such amounts and upon
such terms as the Committee may determine.
10.2 Other Stock-Based Awards. The
Committee may grant other types of equity-based or
equity-related Awards not otherwise described by the terms of
this Plan (including the grant or offer for sale of unrestricted
Shares) in such amounts and subject to such terms and conditions
as the Committee shall determine. Such Awards may involve the
transfer of actual Shares to Participants, or payment in cash or
otherwise of amounts based on the value of Shares, and may
include, without limitation, Awards designed to comply with or
take advantage of the applicable local laws of jurisdictions
other than the United States.
10.3 Value of Cash-Based and Other Stock-Based
Awards. Each Cash-Based Award shall specify a
payment amount or payment range as determined by the Committee.
Each Other Stock-Based Award shall be expressed in terms of
Shares or units based on Shares, as determined by the Committee.
The Committee may establish performance goals in its discretion.
If the Committee exercises its discretion to establish
performance goals, the number
and/or value
of Cash-Based Awards or Other Stock-Based Awards that will be
paid out to the Participant will depend on the extent to which
the performance goals are met.
10.4 Payment of Cash-Based Awards and Other
Stock-Based Awards. Payment, if any, with respect
to a Cash-Based Award or any Other Stock-Based Award shall be
made in accordance with the terms of the Award, in cash or
Shares as the Committee determines.
10.5 Termination of
Employment/Service. The Committee shall determine
the extent to which the Participant shall have the right to
receive Cash-Based Awards or Other Stock-Based Awards following
termination of the Participants employment with or
provision of services to the Company, its Affiliates,
and/or its
Subsidiaries, as the case may be. Such provisions shall be
determined in the sole discretion of the Committee, such
provisions may be included in an agreement entered into with
each Participant, but need not be uniform among all Awards of
Cash-Based Awards or Other Stock-Based Awards issued pursuant to
the Plan, and may reflect distinctions based on the reasons for
termination.
ARTICLE 11.
Transferability of Awards
11.1 Transferability. Except as
provided in Section 11.2 below, during a Participants
lifetime, his or her Awards shall be exercisable only by the
Participant. Awards shall not be transferable other than by will
or the laws of descent and distribution; no Awards shall be
subject, in whole or in part, to attachment, execution, or levy
of any kind; and any purported transfer in violation hereof
shall be null and void. The Committee may establish such
procedures as it deems appropriate for a Participant to
designate a beneficiary to whom any amounts payable or Shares
deliverable in the event of, or following, the
Participants death may be provided.
11.2 Committee Action. The
Committee may, in its discretion, determine that notwithstanding
Section 11.1, any or all Awards (other than ISOs) shall be
transferable to and exercisable by such transferees, and subject
to such terms and conditions, as the Committee may deem
appropriate; provided, however, no Award may be transferred for
value (as defined in the General Instructions to
Form S-8).
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ARTICLE 12.
Performance Measures
12.1 Performance Measures. The
performance goals upon which the payment or vesting of an Award
to a Covered Employee that is intended to qualify as
Performance-Based Compensation shall be limited to the following
Performance Measures:
(a) Net earnings or net income (before or after taxes);
(b) Earnings per share;
(c) Net sales or revenue growth;
(d) Net operating profit;
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(e)
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Return measures (including, but not limited to, return on
assets, capital, invested capital, equity, sales, or revenue);
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(f)
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Cash flow (including, but not limited to, operating cash flow,
free cash flow, cash generation, cash flow return on equity, and
cash flow return on investment);
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(g) Earnings before or after taxes, interest, depreciation,
and/or
amortization;
(h) Gross or operating margins;
(i) Productivity ratios;
(j) Share price (including, but not limited to, growth
measures and total shareholder return);
(k) Expense targets;
(l) Margins;
(m) Operating efficiency;
(n) Market share;
(o) Customer satisfaction;
(p) Unit volume;
(q) Working capital targets and change in working capital;
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(r)
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Economic value added or
EVA®
(net operating profit after tax minus the sum of capital
multiplied by the cost of capital);
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(s) Asset growth;
(t) Number of cardholder, merchant
and/or other
customer accounts processed or converted; and
(u) Successful negotiation or renewal of contracts with new
or existing customers.
Any Performance Measure(s) may be used to measure the
performance of the Company, Subsidiary,
and/or
Affiliate as a whole or any business unit of the Company,
Subsidiary,
and/or
Affiliate or any combination thereof, as the Committee may deem
appropriate, or any of the above Performance Measures as
compared to the performance of a group of comparator companies,
or published or special index that the Committee, in its sole
discretion, deems appropriate, or the Company may select
Performance Measure (j) above as compared to various stock
market indices. The Committee also has the authority to provide
for accelerated vesting of any Award based on the achievement of
performance goals pursuant to the Performance Measures specified
in this Article 12.
12.2 Evaluation of Performance. The
Committee may provide in any such Award that any evaluation of
achievement of Performance Measures may include or exclude any
of the following events that occur during a Performance Period:
(a) asset write-downs, (b) litigation or claim
judgments or settlements, (c) the effect of changes in tax
laws, accounting principles, or other laws or provisions
affecting reported results, (d) any reorganization and
restructuring programs, (e) extraordinary nonrecurring
items as described in Accounting Principles Board Opinion
No. 30
and/or in
managements discussion and analysis of financial condition
and results of operations appearing in the Companys annual
report to shareholders for the applicable year,
(f) acquisitions or divestitures, and (g) foreign
exchange gains and losses. To the extent such inclusions or
exclusions affect Awards to Covered Employees, they shall be
prescribed in a form that meets the requirements of Code
Section 162(m) for deductibility.
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12.3 Adjustment of Performance-Based
Compensation. Awards that are intended to qualify
as Performance-Based Compensation may not be adjusted upward.
The Committee shall retain the discretion to adjust such Awards
downward, either on a formula or discretionary basis, or any
combination, as the Committee determines.
12.4 Committee Discretion. In the
event that applicable tax
and/or
securities laws change to permit Committee discretion to alter
the governing Performance Measures without obtaining shareholder
approval of such changes, the Committee shall have sole
discretion to make such changes without obtaining shareholder
approval. In addition, in the event that the Committee
determines that it is advisable to grant Awards that shall not
qualify as Performance-Based Compensation, the Committee may
make such grants without satisfying the requirements of Code
Section 162(m) and base vesting on Performance Measures
other than those set forth in Section 12.1.
ARTICLE 13.
Nonemployee Director Awards
From time to time, the Board shall set the amount(s) and type(s)
of equity awards that shall be granted to all Nonemployee
Directors on a periodic, nondiscriminatory basis pursuant to the
Plan, as well as any additional amount(s), if any, to be
awarded, also on a periodic, nondiscriminatory basis, based on
each of the following: (i) the number of Board committees
on which a Nonemployee Director serves; (ii) service of a
Nonemployee Director as the chair of a Board committee;
(iii) service of a Nonemployee Director as Chairman of the
Board; or (iv) the initial selection or appointment of an
individual to the Board as a Nonemployee Director. Subject to
the foregoing, the Board shall grant such Awards to Nonemployee
Directors, as it shall from time to time determine.
ARTICLE 14.
Dividends and Dividend Equivalents
Any Participant selected by the Committee may be granted
dividends or dividend equivalents based on the dividends
declared on Shares that are subject to any Award, to be credited
as of dividend payment dates, during the period between the date
the Award is granted and the date the Award is exercised, vests,
or expires, as determined by the Committee. The dividends or
dividend equivalents may be subject to any limitations
and/or
restrictions determined by the Committee. Such dividend
equivalents shall be converted to cash or additional Shares by
such formula and at such time and subject to such limitations as
may be determined by the Committee.
ARTICLE 15.
Change of Control
Notwithstanding any other provision of the Plan to the contrary,
unless the Committee specifies otherwise in an Award Agreement,
in the event of a Change of Control: (i) any Options and
Stock Appreciation Rights which are outstanding immediately
prior to the date such Change of Control is determined to have
occurred, and which are not then exercisable and vested, shall
become fully exercisable and vested to the full extent of the
original grant; (ii) the restrictions and deferral
limitations applicable to any Restricted Stock shall lapse, and
such Restricted Stock shall become free of all restrictions and
limitations and become fully vested and transferable to the full
extent of the original grant; and (iii) the restrictions
and deferral limitations and other conditions applicable to any
other Awards under the Plan shall lapse, and such other Awards
shall become free of all restrictions, limitations or conditions
and become fully vested and transferable to the full extent of
the original grant.
ARTICLE 16.
Rights of Participants
16.1 Employment/Service. Nothing in
this Plan or an Award Agreement shall interfere with or limit in
any way the right of the Company, its Affiliates,
and/or its
Subsidiaries to terminate any Participants employment or
service on the Board or to the Company at any time or for any
reason not prohibited by law, nor confer upon any Participant
any right to continue his employment or service as a Director
for any specified period of time.
Neither an Award nor any benefits arising under this Plan shall
constitute an employment contract with the Company, its
Affiliates,
and/or its
Subsidiaries and, accordingly, subject to Articles 3 and
17, this Plan and the benefits hereunder may be terminated at
any time in the sole and exclusive discretion of the Committee
without giving rise to any liability on the part of the Company,
its Affiliates,
and/or its
Subsidiaries.
D-15
16.2 Participation. No individual
shall have the right to be selected to receive an Award under
this Plan or, having been so selected, to be selected to receive
a future Award.
16.3 Rights as a Shareholder. Except as
otherwise provided herein or in any Award Agreement, a
Participant shall have none of the rights of a shareholder with
respect to Shares covered by any Award until the Participant
becomes the record holder of such Shares.
ARTICLE 17.
Amendment, Modification, Suspension, and Termination
17.1 Amendment, Modification, Suspension, and
Termination. Subject to Section 17.3, the
Committee may, at any time and from time to time, alter, amend,
modify, suspend, or terminate this Plan and any Award Agreement
in whole or in part; provided, however, that without the prior
approval of the Companys shareholders and except as
provided in Section 4.4, Options or SARs issued under this
Plan will not be repriced, replaced, repurchased for cash when
the Fair Market Value of a Share is lower than the Option Price
of a previously granted Option or the Grant Price of a
previously granted SAR, or regranted through cancellation, or by
lowering the Option Price of a previously granted Option or the
Grant Price of a previously granted SAR, and no material
amendment of this Plan shall be made without shareholder
approval if shareholder approval is required by law, regulation,
or stock exchange rule.
17.2 Adjustment of Awards Upon the Occurrence of
Certain Unusual or Nonrecurring Events. The Committee shall
make adjustments in the terms and conditions of, and the
criteria included in, Awards in recognition of unusual or
nonrecurring events, other than those described in
Section 4.4 hereof, affecting the Company or the financial
statements of the Company or of changes in applicable laws,
regulations, or accounting principles, whenever the Committee
determines that such adjustments are appropriate in order to
prevent unintended dilution or enlargement of the benefits or
potential benefits intended to be made available under this
Plan. The determination of the Committee as to the foregoing
adjustments, if any, shall be conclusive and binding on
Participants under this Plan.
17.3 Awards Previously
Granted. Notwithstanding any other provision of
this Plan to the contrary (other than Section 17.4), no
termination, amendment, suspension, or modification of this Plan
or an Award Agreement shall adversely affect in any material way
any Award previously granted under this Plan, without the
written consent of the Participant holding such Award.
17.4 Amendment to Conform to
Law. Notwithstanding any other provision of this
Plan to the contrary, the Board of Directors may amend the Plan
or an Award Agreement, to take effect retroactively or
otherwise, as deemed necessary or advisable for the purpose of
conforming the Plan or an Award Agreement to any present or
future law relating to plans of this or similar nature
(including, but not limited to, Code Section 409A), and to
the administrative regulations and rulings promulgated
thereunder.
ARTICLE 18.
Withholding
18.1 Tax Withholding. The Company
shall have the power and the right to deduct or withhold, or
require a Participant to remit to the Company, the minimum
statutory amount to satisfy federal, state, and local taxes,
domestic or foreign, required by law or regulation to be
withheld with respect to any taxable event arising as a result
of this Plan.
18.2 Share Withholding. With
respect to withholding required upon the exercise of Options or
SARs, upon the lapse of restrictions on Restricted Stock and
Restricted Stock Units, or upon the achievement of performance
goals related to Performance Shares, or any other taxable event
arising as a result of an Award granted hereunder, Participants
may elect, subject to the approval of the Committee, to satisfy
the withholding requirement, in whole or in part, by having the
Company withhold Shares having a Fair Market Value on the date
the tax is to be determined equal to the minimum statutory total
tax that could be imposed on the transaction. All such elections
shall be irrevocable, made in writing, and signed by the
Participant, and shall be subject to any restrictions or
limitations that the Committee, in its sole discretion, deems
appropriate.
D-16
ARTICLE 19.
Successors
All obligations of the Company under this Plan with respect to
Awards granted hereunder shall be binding on any successor to
the Company, whether the existence of such successor is the
result of a direct or indirect purchase, merger, consolidation,
or otherwise, of all or substantially all of the business
and/or
assets of the Company.
ARTICLE 20.
General Provisions
20.1 Forfeiture Events.
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(a)
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The Committee may specify in an Award Agreement that the
Participants rights, payments, and benefits with respect
to an Award shall be subject to reduction, cancellation,
forfeiture, or recoupment upon the occurrence of certain
specified events, in addition to any otherwise applicable
vesting or performance conditions of an Award. Such events may
include, but shall not be limited to, termination of employment
for cause, termination of the Participants provision of
services to the Company, Affiliate,
and/or
Subsidiary, violation of material Company, Affiliate,
and/or
Subsidiary policies, breach of noncompetition, confidentiality,
or other restrictive covenants that may apply to the
Participant, or other conduct by the Participant that is
detrimental to the business or reputation of the Company, its
Affiliates,
and/or its
Subsidiaries.
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(b)
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If the Company is required to prepare an accounting restatement
due to the material noncompliance of the Company, as a result of
misconduct, with any financial reporting requirement under the
securities laws, any Participant who is subject to automatic
forfeiture under Section 304 of the Sarbanes-Oxley Act of
2002 shall reimburse the Company the amount of any payment in
settlement of an Award earned or accrued during the twelve
(12) month period following the first public issuance or
filing with the United States Securities and Exchange Commission
(whichever just occurred) of the financial document embodying
such financial reporting requirement.
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In addition, in the event of an accounting restatement, the
Committee in its sole and exclusive discretion may require that
any Participant reimburse the Company all or part of the amount
of any payment in settlement of any Award granted hereunder.
20.2 Legend. The certificates for
Shares may include any legend that the Committee deems
appropriate to reflect any restrictions on transfer of such
Shares.
20.3 Gender and Number. Except
where otherwise indicated by the context, any masculine term
used herein also shall include the feminine, the plural shall
include the singular, and the singular shall include the plural.
20.4 Severability. In the event any
provision of this Plan shall be held illegal or invalid for any
reason, the illegality or invalidity shall not affect the
remaining parts of this Plan, and this Plan shall be construed
and enforced as if the illegal or invalid provision had not been
included.
20.5 Requirements of Law. The
granting of Awards and the issuance of Shares under this Plan
shall be subject to all applicable laws, rules, and regulations,
and to such approvals by any governmental agencies, the NYSE or
other national securities exchanges as may be required.
20.6 Delivery of Title. The Company
shall have no obligation to issue or deliver evidence of title
for Shares issued under this Plan prior to:
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(a)
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Obtaining any approvals from governmental agencies that the
Company determines are necessary or advisable; and
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(b)
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Completion of any registration or other qualification of the
Shares under any applicable national or foreign law or ruling of
any governmental body that the Company determines to be
necessary or advisable.
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20.7 Inability to Obtain
Authority. The inability of the Company to obtain
authority from any regulatory body having jurisdiction, which
authority is deemed by the Companys counsel to be
necessary to the lawful issuance and sale of any Shares
hereunder, shall relieve the Company of any liability in respect
of the failure to issue or sell such Shares as to which such
requisite authority shall not have been obtained.
D-17
20.8 Investment
Representations. The Committee may require any
individual receiving Shares pursuant to an Award under this Plan
to represent and warrant in writing that the individual is
acquiring the Shares for investment and without any present
intention to sell or distribute such Shares.
20.9 Employees Based Outside of the United
States. Notwithstanding any provision of this
Plan to the contrary, in order to comply with the laws in other
countries in which the Company, its Affiliates,
and/or its
Subsidiaries operate or have Employees or Directors, the
Committee, in its sole discretion, shall have the power and
authority to:
(a) Determine which Affiliates and Subsidiaries shall be
covered by this Plan.
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(b)
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Determine which Employees or Directors outside the United States
are eligible to participate in this Plan.
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(c)
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Modify the terms and conditions of any Award granted to
Employees or Directors outside the United States to comply with
applicable foreign laws.
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(d)
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Establish subplans and modify exercise procedures and other
terms and procedures, to the extent such actions may be
necessary or advisable. Any subplans and modifications to Plan
terms and procedures established under this Section 20.9 by
the Committee shall be attached to this Plan document as
appendices.
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(e)
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Take any action, before or after an Award is made, that it deems
advisable to obtain approval or comply with any necessary local
government regulatory exemptions or approvals.
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Notwithstanding the above, the Committee may not take any
actions hereunder, and no Awards shall be granted that would
violate applicable law.
20.10 Uncertificated Shares. To the
extent that this Plan provides for issuance of certificates to
reflect the transfer of Shares, the transfer of such Shares may
be effected on a noncertificated basis, to the extent not
prohibited by applicable law or the rules of any stock exchange.
20.11 Unfunded Plan. Participants
shall have no right, title, or interest whatsoever in or to any
investments that the Company
and/or its
Subsidiaries
and/or its
Affiliates may make to aid it in meeting its obligations under
this Plan. Nothing contained in this Plan, and no action taken
pursuant to its provisions, shall create or be construed to
create a trust of any kind, or a fiduciary relationship between
the Company and any Participant, beneficiary, legal
representative, or any other individual. To the extent that any
individual acquires a right to receive payments from the
Company, its Subsidiaries,
and/or its
Affiliates under this Plan, such right shall be no greater than
the right of an unsecured general creditor of the Company, a
Subsidiary, or an Affiliate, as the case may be. All payments to
be made hereunder shall be paid from the general funds of the
Company, a Subsidiary, or an Affiliate, as the case may be, and
no special or separate fund shall be established and no
segregation of assets shall be made to assure payment of such
amounts except as expressly set forth in this Plan.
20.12 No Fractional Shares. No
fractional Shares shall be issued or delivered pursuant to this
Plan or any Award. The Committee shall determine whether cash,
Awards, or other property shall be issued or paid in lieu of
fractional Shares or whether such fractional Shares or any
rights thereto shall be forfeited or otherwise eliminated.
20.13 Retirement and Welfare
Plans. Neither Awards made under this Plan nor
Shares or cash paid pursuant to such Awards, except pursuant to
Covered Employee annual incentive awards, may be included as
compensation for purposes of computing the benefits
payable to any Participant under the Companys or any
Subsidiarys or Affiliates retirement plans (both
qualified and nonqualified) or welfare benefit plans unless such
other plan expressly provides that such compensation shall be
taken into account in computing a Participants benefit.
20.14 Deferred
Compensation. Notwithstanding any other provision
of the Plan, the Committee may cause any Award to comply with or
to be exempt from Section 409A of the Code and may
interpret this Plan in any manner necessary to ensure that
Awards under the Plan comply with or are exempt from
Section 409A of the Code. In the event that the Committee
determines that an Award should comply with or be exempt from
Section 409A and that a Plan provision or Award Agreement
provision is necessary to ensure that such Award complies with
or is exempt from Section 409A of the Code, such provision
shall be deemed included in the Plan or such Award Agreement.
D-18
20.15 Nonexclusivity of This
Plan. The adoption of this Plan shall not be
construed as creating any limitations on the power of the Board
or Committee to adopt such other compensation arrangements as it
may deem desirable for any Participant.
20.16 No Constraint on Corporate
Action. Nothing in this Plan shall be construed
to: (a) limit, impair, or otherwise affect the
Companys or a Subsidiarys or an Affiliates
right or power to make adjustments, reclassifications,
reorganizations, or changes of its capital or business
structure, or to merge or consolidate, or dissolve, liquidate,
sell, or transfer all or any part of its business or assets; or,
(b) limit the right or power of the Company or a Subsidiary
or an Affiliate to take any action which such entity deems to be
necessary or appropriate.
20.17 Governing Law. The Plan and
each Award Agreement shall be governed by the laws of the State
of Georgia, excluding any conflicts or choice of law rule or
principle that might otherwise refer construction or
interpretation of this Plan to the substantive law of another
jurisdiction. Unless otherwise provided in the Award Agreement,
recipients of an Award under this Plan are deemed to submit to
the exclusive jurisdiction and venue of the federal or state
courts of Georgia to resolve any and all issues that may arise
out of or relate to this Plan or any related Award Agreement.
20.18 Indemnification. Subject to
requirements of Georgia law, each individual who is or shall
have been a member of the Board, or a committee appointed by the
Board, or an officer of the Company to whom authority was
delegated in accordance with Article 3, shall be
indemnified and held harmless by the Company against and from
any loss, cost, liability, or expense that may be imposed upon
or reasonably incurred by the Participant in connection with or
resulting from any claim, action, suit, or proceeding to which
the Participant may be a party or in which the Participant may
be involved by reason of any action taken or failure to act
under this Plan and against and from any and all amounts paid by
the Participant in settlement thereof, with the Companys
approval, or paid by the Participant in satisfaction of any
judgment in any such action, suit, or proceeding against the
Participant, provided the Participant shall give the Company an
opportunity, at its own expense, to handle and defend the same
before the Participant undertakes to handle and defend it on the
Participants own behalf, unless such loss, cost,
liability, or expense is a result of the Participants own
willful misconduct or except as expressly provided by statute.
The foregoing right of indemnification shall not be exclusive of
any other rights of indemnification to which such individuals
may be entitled under the Companys Certificate of
Incorporation or Bylaws, as a matter of law, or otherwise, or
any power that the Company may have to indemnify them or hold
them harmless.
D-19
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE PROPOSALS LISTED BELOW. Ple ase Mark Here for
Address Change or Comments SEE REVERSE SIDE 1. To approve each proposal to amend the Articles of In
corporation as follows: PLEASE BE SURE TO SIG N AND DATE THIS PROXY. FOR AGAIN ST ABSTAIN FOR
AGAINST ABSTAIN 1i. FOR AGAINST ABSTAIN 1a. Enlarge our business purpose 1e. Elim in ate
supermajority voti ng Update h t e provision al owing h t e Board of requir ements for shareholder
Dir ectors to consider non-economic m i pacts approval of mergers and similar of tender of ers to
conform t o current Georgia transactio ns law so h t at h t e Board of Directo rs may FOR AGAINST
ABSTAIN 1f. FOR AGAIN ST ABSTAIN consider the in e t rests of constituencies in 1b. Elimin ate
supermajo rity voting Authorize 100 mil ion shares of requirements for most addit o i n to
shareholders when considering h t e prefe rred sto ck amendments to the Articles of best n i
terests of the corporation FOR AGAINST ABSTAIN I n corporatio n 1j. Update the provision limit in g
personal il ability FOR AGAIN ST ABSTAIN FOR AGAINST ABSTAIN 1c. Provide that h t e number of 1g.
Elimin ate supermajo rity of dir ectors to conform to current Georgia la w directo rs wil l be if
xed by h t e requirements for shareholders o t Board of Directo rs call a special meetin g 2. To
approve each proposal to amend the Bylaws as follows: FOR AGAIN ST ABSTAIN 1h. Eil min ate the
provision requirin g FOR AGAIN ST ABSTAIN 2a. FOR AGAINST ABSTAIN 1d. Provide h t at directors may
be Eil minate supermajo rity requir ements for unanim ous shareholder action by removed only for
cause and sharehold ers to call a special meeting written consent decrease the shareholder vote f o
r FOR AGAINST ABSTAIN removal from 80% o t 66 2/3% 2b. Eil minate sharehold ers ability to f i x
the number of dir ectors FOR AGAINST ABSTAIN 2c. Eil min ate supermajorit y votin g requirements to
declassify the Board of Directors 2d. FOR AGAINST ABSTAIN Provide t h at dir ectors may be removed
only for cause and decrease the shareholder vote for removal from 80% t o 66 2/3% FOR AGAINST
ABSTAIN 2e. Elimin ate supermajorit y votin g requirements for shareholder approval of mergers and
simil ar transactio ns FOR AGAINST ABSTAIN 3 . To approve the Total Syste m Services, I n c. 2 008
Omnib us Pla n Shareholder sign here Co-owner sign here Date: The undersigned hereby acknowledges
receipt of NOTIC E of the SPECIAL MEETING OF SHAREHOLDERS and h t e PROXY STATEMENT and hereby
revokes all Proxies previously given by the undersigned for t h e SPECIAL MEETING OF SHAREHOLDERS.
FOLD AND DETACH HERE WE ENCOURAGE YOU TO TAKE ADVANTAGE OF INTERNET OR TELEPHONE VOTING, BOTH ARE
AVAILABLE 24 HOURS A DAY, 7 DAYS A WEEK. Internet and telephone voting are available through 11:59
PM Eastern Time the day prior to special meeting day. Your Internet or telephone vote authorizes
the named proxies to vote your shares in the same manner as if you marked, signed and returned your
proxy card. INTERNET TELEPHONE http://www.proxyvoting.com/tss 1-866-540-5760 Use the Internet to
vote your proxy. OR Use any touch-tone telephone to Have your proxy card in hand vote your proxy.
Have your proxy when you access the web site. card in hand when you call. If you vote your proxy by
Internet or by telephone, you do NOT need to mail back your proxy card. To vote by mail, mark, sign
and date your proxy card and return it in the enclosed postage-paid envelope. Choose MLinkSM for
fast, easy and secure 24/7 onlin e access to your future proxy materia ls, n i vestment pla n
statements, tax documents and more. Sim ply log on to Investor ServiceDirect® at
www.bnymellon.com/shareowner/isd where step-by-step n i structio ns will prompt you through enrollm
ent. You can view the Proxy Statement on the Internet at http://www.tsys.com/ir |
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PROXY TOTAL SYSTEM SERVICES, INC. POST OFFICE BOX 2506, COLUMBUS, GEORGIA 31902-2506 SPECIAL
MEETING OF SHAREHOLDERS OF TSYS TO BE HELD NOVEMBER 29, 2007 SOLICITED ON BEHALF OF THE BOARD OF
DIRECTORS OF TSYS The undersigned shareholder of Total System Services, Inc. hereby appoints James
B. Lipham and Dorenda K. Weaver as Proxies, each of them sin gly and each with power of
substitution, to vote all shares of Common Stock of TSYS of the undersigned or wit h respect to
which the undersig ned is entit led to vote on November 2, 2007 at the SPECIAL MEETING OF THE
SHAREHOLDERS OF TSYS to be held on the 29th day of November, 2007, and at any adjournments or
postponements thereof, with all the powers the undersig ned would possess if personally present.
The Board of Dir ectors is not aware of any matters li kely to be presented for action at the
Special Meeting of Sharehold ers of TSYS, other than the matters il sted herein. However, if any
other matters are properly brought before the Special Meeting, the persons named in this Proxy or
their substitutes will vote upon such other matters in accordance with their best u j dgement. This
Proxy is revocable at any time prior to it s use. THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED
AS DIRECTED BY THE UNDERSIGNED. IF THIS PROXY IS SIGNED AND RETURNED AND DOES NOT SPECIFY A VOTE ON
ANY PROPOSAL, THE PROXY WILL BE VOTED IN ACCORDANCE WITH THE RECOMMENDATIONS OF THE BOARD OF
DIRECTORS. IF YOU DO NOT VOTE BY PHONE OR OVER THE INTERNET, PLEASE VOTE, DATE AND SIGN ON THE
REVERSE SIDE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE. Please mark, date and sign exactly as
your name appears on the proxy card. When shares are held jo intly, both holders should sign. When
signing as attorney, executor, administrator, trustee, custodian, or guardian, please give your
full title. If the holder s i a corporatio n or partnership, the full corporate or partnership name
should be signed by a duly authorized officer. Address Change/Comments (Mark the corresponding box
on the reverse side) FOLD AND DETACH HERE |