<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
(Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for use of the Commission Only
(as permitted by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or
Section 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):
[X] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(l), 14a-6(i)(2)or
Item 22(a)(2) of Schedule 14A.
[ ] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4)and 0-11.
1) Title of each class of securities to which transaction applies:
___________________________________________________________________
2) Aggregate number of securities to which transaction applies:
___________________________________________________________________
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on
which the filing fee is calculated and state how it was
determined):
___________________________________________________________________
4) Proposed maximum aggregate value of transaction:
__________________________________________________________________
5) Total fee paid:
__________________________________________________________________
[ ] Fee paid previously with preliminary materials.
[ ] 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.
1) Amount Previously Paid:
__________________________________________________________________
2) Form, Schedule or Registration Statement No.:
__________________________________________________________________
3) Filing Party:
__________________________________________________________________
4) Date Filed:
__________________________________________________________________
[LOGO]
Richard W. Ussery March 15, 1996
Chairman of the Board
Dear Shareholder:
The Annual Meeting of the Shareholders of Total System Services, Inc. will
be held on April 15, 1996, at The Columbus Museum, Columbus, Georgia, beginning
at 10:00 o'clock A.M., E.T., for the purposes set forth in the accompanying
Notice of Annual Meeting of Shareholders and Proxy Statement.
We hope that you will be able to be with us and let us give you a review of
1995. Whether you own a few or many shares of stock and whether or not you plan
to attend in person, it is important that your shares be voted on matters that
come before the meeting. To make sure your shares are represented, we urge you
to complete and mail the enclosed Proxy Card promptly.
Thank you for helping us make 1995 a good year. We look forward to your
continued support in 1996 and another good year.
Sincerely yours,
/s/ Richard W. Ussery
RICHARD W. USSERY
Total System Services, Inc. Post Office Box 2506 Columbus, Georgia 31902-2506
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To Be Held April 15, 1996
NOTICE IS HEREBY GIVEN that the Annual Meeting of the Shareholders of Total
System Services, Inc.(SM) ("TSYS(R)") will be held at The Columbus Museum, 1251
Wynnton Road, Columbus, Georgia, on April 15, 1996, at 10:00 o'clock A.M., E.T.,
for:
(1) The election of five nominees as Class I directors of TSYS to serve
until the 1999 Annual Meeting of Shareholders;
(2) To approve the Synovus Financial Corp. Executive Bonus Plan (TSYS
is an 80.8% owned subsidiary of Synovus Financial Corp.); and
(3) The transaction of such other business as may properly come before the
Annual Meeting.
Information relating to the above matters is set forth in the accompanying
Proxy Statement.
Only shareholders of record at the close of business on February 22, 1996
will be entitled to notice of and to vote at the Annual Meeting.
/s/ G. Sanders Griffith, III
G. SANDERS GRIFFITH, III
Secretary
Columbus, Georgia
March 15, 1996
WHETHER OR NOT YOU PLAN TO BE PRESENT AT THE ANNUAL MEETING IN PERSON, PLEASE
VOTE, DATE AND SIGN THE ENCLOSED PROXY CARD AND RETURN IT PROMPTLY IN THE
ENCLOSED RETURN ENVELOPE WHICH DOES NOT REQUIRE ANY POSTAGE IF MAILED IN THE
UNITED STATES.
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
To Be Held April 15, 1996
I. INTRODUCTION
A. Purposes of Solicitation - Terms of Proxies.
The Annual Meeting of the Shareholders ("Annual Meeting") of Total System
Services, Inc. ("TSYS") will be held on April 15, 1996 for the purposes set
forth in the accompanying Notice of Annual Meeting of Shareholders and in this
Proxy Statement. The enclosed Proxy Card ("Proxy") is solicited BY AND ON BEHALF
OF TSYS' BOARD OF DIRECTORS in connection with such Annual Meeting or any
adjournment thereof. The costs of the solicitation of Proxies by TSYS' Board of
Directors will be paid by TSYS. Forms of Proxies and Proxy Statements will also
be distributed through brokers, banks, nominees, custodians and other like
parties to the beneficial owners of shares of the $.10 par value common stock of
TSYS ("TSYS Common Stock"), and TSYS will reimburse such parties for their
reasonable out-of-pocket expenses therefor. TSYS' mailing address is Post Office
Box 2506, Columbus, Georgia 31902-2506.
The shares represented by the Proxy in the accompanying form, which when
properly executed, returned to TSYS' Board of Directors and not revoked, will be
voted in accordance with the instructions specified in such Proxy. If a choice
is not specified in the Proxy, the shares represented by such Proxy will be
voted "FOR" the election of the five nominees for Class I directors named herein
and in accordance with the recommendations of the Board of Directors on the
other matters brought before the Meeting.
Each Proxy granted may be revoked in writing at any time before the
authority granted thereby is exercised. Attendance at the Annual Meeting will
constitute a revocation of the Proxy for such Meeting if the maker thereof
elects to vote in person.
This Proxy Statement and the enclosed Proxy are being first mailed to
shareholders on or about March 15, 1996.
B. TSYS Securities Entitled to Vote and Record Date.
TSYS' outstanding voting securities are TSYS Common Stock, each share of
which entitles the holder thereof to one vote on any matter coming before a
meeting of TSYS' shareholders. Only shareholders of record at the close of
business on February 22, 1996 are entitled to vote at the Annual Meeting or any
adjournment thereof. As of that date, there were 64,644,361 shares of TSYS
Common Stock outstanding and entitled to vote. TSYS owned 97,400 shares of TSYS
Common Stock on February 22, 1996 as treasury shares, which are not considered
to be outstanding and are not entitled to be voted at the Annual Meeting.
C. Shareholder Proposals.
From time to time, TSYS' shareholders may present proposals which may be
proper subjects for inclusion in TSYS' Proxy Statement for consideration at
TSYS' Annual Meeting. To be considered for inclusion, shareholder proposals must
be submitted on a timely basis. Proposals for TSYS' 1997 Annual Meeting, which
has been tentatively scheduled for April 14, 1997, must be received by TSYS no
later than November 15, 1996, and any such proposals, as well as any questions
related thereto, should be directed to the Secretary of TSYS.
1
D. Columbus Bank and Trust Company.
Columbus Bank and Trust Company(R) (CB&T") owned individually 52,200,646
shares, or 80.8%, of the outstanding shares of TSYS Common Stock on February 22,
1996. CB&T(R) is a wholly-owned banking subsidiary of Synovus Financial Corp.(R)
("Synovus"), a multi-financial services company having 77,264,014 shares of
$1.00 par value voting common stock ("Synovus Common Stock") outstanding on
February 22, 1996.
II. ELECTION OF DIRECTORS
A. Information Concerning Number and Classification of Directors and
Nominees.
(1) Number and Classification of Directors.
In accordance with the vote of shareholders taken at TSYS' 1988 Annual
Meeting, the number of members of TSYS' Board of Directors was fixed at 18.
TSYS' Board of Directors is currently comprised of 15 members, and TSYS has
three directorships which remain vacant, one of which positions was made vacant
by the ascension of a Class II director to emeritus status. These vacant
directorships could be filled in the future at the discretion of TSYS' Board of
Directors. This discretionary power gives TSYS' Board of Directors the
flexibility of appointing new directors in the periods between TSYS' Annual
Meetings should suitable candidates come to its attention. Any person appointed
by TSYS' Board of Directors to fill the vacant Class II directorship would serve
the remainder of the Class II term, which expires at the 1997 Annual Meeting.
Any person so appointed by TSYS' Board of Directors to the remaining vacant
directorships would not be appointed to serve a classified, three-year term but
would only serve as a director until the next succeeding Annual Meeting. At such
Annual Meeting, such appointee would stand before TSYS' shareholders for
election to a classified term of office as a director. Proxies cannot be voted
at the 1996 Annual Meeting for a greater number of persons than the number of
nominees named.
Pursuant to TSYS' Articles of Incorporation and bylaws, the members who
comprise TSYS' Board of Directors are divided into three classes of directors:
Class I, Class II and Class III directors, with each of such Classes of
directors to be as nearly equal in number as possible. Each Class of directors
serves a staggered 3-year term. At TSYS' 1995 Annual Meeting, Class III
directors were elected to serve 3-year terms to expire at TSYS' 1998 Annual
Meeting, and at TSYS' 1994 Annual Meeting, Class II directors were elected to
serve 3-year terms to expire at TSYS' 1997 Annual Meeting. The terms of office
of the Class I directors expire at TSYS' 1996 Annual Meeting.
(2) Nominees for Class I Directors and Vote Required.
TSYS' Board of Directors has selected five nominees which it proposes for
election to TSYS' Board as Class I directors. The five nominees for Class I
directors of TSYS will be elected to serve 3-year terms that will expire at
TSYS' 1999 Annual Meeting. The five nominees for Class I directors of TSYS are:
Griffin B. Bell, Kenneth E. Evans, H. Lynn Page, Philip W. Tomlinson and Richard
W. Ussery.
Under TSYS' bylaws and Georgia law, a majority of the issued and
outstanding shares of TSYS Common Stock entitled to vote must be represented at
the 1996 Annual Meeting in order to constitute a quorum and all shares
represented at the Meeting, including shares abstaining and withholding
authority, are counted for purposes of determining whether a quorum exists. The
nominees for election as directors at the Annual Meeting who receive the
greatest number of votes (a plurality), a quorum being present, shall become
directors at the conclusion of the tabulation of votes. Thus, once a quorum has
been established, abstentions and broker non-votes have no effect upon the
election of directors. The shares represented by Proxies executed for TSYS' 1996
Annual Meeting in such manner as not to withhold authority to vote for the
election of any nominee for election as a Class I director on TSYS' Board of
Directors shall be voted "FOR" the election of the five nominees for Class I
directors on TSYS' Board named herein.
2
If any nominee for Class I director of TSYS becomes unavailable for any
reason before TSYS' 1996 Annual Meeting, the shares represented by executed
Proxies may be voted for such substitute nominee as may be determined by the
holders of such Proxies. It is not anticipated that any nominee will be
unavailable for election.
TSYS' BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR" EACH OF THE FIVE
NOMINEES FOR ELECTION AS CLASS I DIRECTORS ON TSYS' BOARD SET FORTH HEREIN.
B. Information Concerning Directors and Nominees for Class I Directors.
(1) General Information.
The following sets forth the name, age, principal occupation and employment
(which, except as noted, has been for the past five years) of each of the
nominees for election as Class I directors of TSYS and the remaining directors
presently serving on TSYS' Board of Directors, his director classification, his
length of service as a director of TSYS, any family relationships with other
directors or executive officers of TSYS, and any Board of Directors of which he
is a member with respect to any company with a class of securities registered
with the Securities and Exchange Commission ("SEC") pursuant to Section 12 of
the Securities Exchange Act of 1934, as amended ("Exchange Act"), including
Synovus, or any company which is subject to the requirements of Section 15(d) of
that Act, or any company registered with the SEC as an investment company under
the Investment Company Act of 1940 ("Public Company").
<TABLE>
<CAPTION>
TSYS Year
Director First Principal Occupation
Classifi- Elected and Other Directorships
Name Age cation Director of Public Companies
<S> <C> <C> <C> <C>
- ------------------------ ------- ---------- ----------- -------------------------------------------------------
Griffin B. Bell 77 I 1987 Senior Partner, King & Spalding (Law Firm).
James H. Blanchard 54 II 1982 Chairman of the Board and Chief Executive Officer,
Synovus Financial Corp.; Chairman of the
Executive Committee, Total System Services, Inc.;
Director, BellSouth Corporation.
Richard Y. Bradley <F1> 57 II 1991 Partner, Bradley & Hatcher (Law Firm). Director,
Synovus Financial Corp.
Salvador
Diaz-Verson, Jr.<F2> 44 III 1983 Chairman of the Board, Diaz-Verson Capital
Investments, Inc. (Investments and Money
Management); Chairman of the Board, Diaz-Verson
Funds Inc.; Director, Clemente Capital, Inc., Miramar
Securities, Inc. and Synovus Financial Corp.
Kenneth E. Evans <F3> 47 I 1990 President, Synovus Administrative Services Corp.
Gardiner W. Garrard, Jr. 55 II 1982 President, The Jordan Company (Real Estate
Development); Director, Synovus Financial Corp.
John P. Illges, III 61 II 1982 Senior Vice President and Financial Consultant, The
Robinson-Humphrey Company, Inc. (Stockbroker);
Advisory Director, Synovus Financial Corp.
Mason H. Lampton 48 III 1986 President, The Hardaway Company (Construction
Company); Director, Synovus Financial Corp.
W. Walter Miller, Jr.<F4> 47 II 1993 Senior Vice President, Total System Services, Inc.
H. Lynn Page 55 I 1982 Vice Chairman of the Board (Retired) and Director,
Synovus Financial Corp., Columbus Bank and Trust
Company and Total System Services, Inc.
3
Philip W. Tomlinson <F5> 49 I 1982 President, Total System Services, Inc.
William B. Turner <F4> 73 III 1982 Chairman of the Executive Committee, W.C. Bradley
Co. (Metal Manufacturer and Real Estate);
Chairman of the Board, Columbus Bank and Trust
Company; Director, The Coca-Cola Company;
Chairman of the Executive Committee, Synovus
Financial Corp.
Richard W. Ussery <F6> 48 I 1982 Chairman of the Board and Chief Executive Officer,
Total System Services, Inc.
George C. Woodruff, Jr. 67 III 1982 Real Estate and Personal Investments; Director,
Synovus Financial Corp. and United Cities Gas
Company.
James D. Yancey <F7> 54 III 1982 Vice Chairman of the Board, Synovus Financial Corp.
and Columbus Bank and Trust Company.
- -------------------
<FN>
<F1>Richard Y. Bradley formed Bradley & Hatcher in September, 1995. From 1991 until 1995, Mr. Bradley served
as President of Bickerstaff Clay Products Company, Inc.
<F2>Salvador Diaz-Verson, Jr. founded Diaz-Verson Capital Investments, Inc. in September, 1991. From 1985 until
1991, Mr. Diaz-Verson, Jr. was President of AFLAC Incorporated.
<F3>Kenneth E. Evans was elected President of Synovus Administrative Services Corp. in July, 1995. From 1990
until 1995, Mr. Evans served in various capacities with TSYS, including Vice Chairman of the Board.
<F4> Mr. Miller's spouse is the niece of William B. Turner.
<F5>Philip W. Tomlinson was elected President of TSYS in February, 1992. From 1982 until 1992, Mr. Tomlinson
served as Executive Vice President of TSYS.
<F6>Richard W. Ussery was elected Chairman of the Board of TSYS in February, 1992. From 1982 until 1992, Mr.
Ussery served as President of TSYS.
<F7>James D. Yancey was elected Vice Chairman of the Board of Synovus in March, 1992. Prior to 1992, Mr.
Yancey served in various capacities with Synovus and CB&T, including Vice Chairman of the Board and
President of both Synovus and CB&T.
</TABLE>
4
(2) TSYS Common Stock Ownership of Directors and Management.
The following table sets forth, as of December 31, 1995, the number of
shares of TSYS Common Stock beneficially owned by each of TSYS' directors and
TSYS' six most highly compensated executive officers. Information relating to
beneficial ownership of TSYS Common Stock is based upon information furnished by
each person or entity using "beneficial ownership" concepts set forth in the
rules of the SEC under Section 13(d) of the Exchange Act.
<TABLE>
<CAPTION> Shares of TSYS Shares of TSYS Shares of TSYS Percentage of
Common Stock Common Stock Common Stock Outstanding
Beneficially Beneficially Beneficially Shares Shares of
Owned with Owned with Owned with of TSYS TSYS Common
Sole Voting Shared Voting Sole Voting but Common Stock Stock
and Investment and Investment no Investment Beneficially Beneficially
Power as of Power as of Power as of Owned as of Owned as of
Name 12/31/95 12/31/95 12/31/95 12/31/95 12/31/95
-------------------------- ------------------- -------------------- ------------------- ---------------- -------------
<S> <C> <C> <C> <C> <C>
Griffin B. Bell 26,364 3,500 --- 29,864 .05%
James H. Blanchard 260,400 120,741 --- 381,141 .59
Richard Y. Bradley 6,733 --- --- 6,733 .01
Salvador Diaz-Verson, Jr. 18,502 1,800 --- 20,302 .03
Kenneth E. Evans 63,000 --- 46,200 109,200 .17
Gardiner W. Garrard, Jr. 2,865 --- --- 2,865 .004
John P. Illges, III 60,990 --- --- 60,990 .09
Mason H. Lampton 8,752 34,210<F1> --- 42,962 .07
James B. Lipham 16,652 --- 14,080 30,732 .05
W. Walter Miller, Jr. 16,750 4,068 14,080 34,898 .05
H. Lynn Page 229,307 31,882 --- 261,189 .40
William A. Pruett 53,649 --- 17,600 71,249 .11
Philip W. Tomlinson 229,600 --- 46,200 275,800 .43
William B. Turner 50,057 192,000 --- 242,057 .37
Richard W. Ussery 203,894 24,175 51,700 279,769 .43
George C. Woodruff, Jr. 35,575 2,000 --- 37,575 .06
M. Troy Woods 8,085 --- 14,740 22,825 .04
James D. Yancey 288,380 8,000 --- 296,380 .46
- --------
<FN>
<F1> Includes 9,600 shares of TSYS Common Stock held in a trust for which Mr.
Lampton is not the trustee. Mr. Lampton disclaims beneficial ownership of such
shares.
</TABLE>
The following table sets forth information, as of December 31, 1995, with
respect to the beneficial ownership of TSYS Common Stock by all directors and
executive officers of TSYS as a group.
<TABLE>
Percentage of
<CAPTION> Shares of Outstanding Shares of
TSYS Common Stock TSYS Common Stock
Name of Beneficially Owned Beneficially Owned
Beneficial Owner as of 12/31/95 as of 12/31/95
- ----------------------- ----------------------- -----------------------------
<S> <C> <C>
All directors
and executive
officers of TSYS 2,213,005 3.42%
as a group
(includes
19 persons)
</TABLE>
For a detailed discussion of the beneficial ownership of Synovus Common
Stock by TSYS' named executive officers and directors and by all directors and
executive officers of TSYS as a group, see Section V(C) hereof captioned
"Synovus Common Stock Ownership of Directors and Management."
5
C. Board Committees and Attendance.
The business and affairs of TSYS are under the direction of TSYS' Board of
Directors. During 1995, TSYS' Board of Directors held six regular meetings.
During 1995, each of TSYS' incumbent directors attended at least 75% of the
meetings of TSYS' Board of Directors and the committees thereof on which he sat,
except Salvador Diaz-Verson, Jr., who attended 67%.
TSYS' Board of Directors has three principal standing committees -- an
Executive Committee, an Audit Committee and a Compensation Committee. There is
no Nominating Committee of TSYS' Board of Directors.
Executive Committee. The members of TSYS' Executive Committee are: James H.
Blanchard, Chairman, Richard W. Ussery, Philip W. Tomlinson, William B. Turner,
James D. Yancey, Gardiner W. Garrard, Jr., Richard Y. Bradley and Kenneth E.
Evans. During the intervals between meetings of TSYS' Board of Directors, TSYS'
Executive Committee possesses and may exercise any and all of the powers of
TSYS' Board of Directors in the management and direction of the business and
affairs of TSYS with respect to which specific direction has not been previously
given by TSYS' Board of Directors. During 1995, TSYS' Executive Committee did
not meet.
Audit Committee. The members of TSYS' Audit Committee are: Gardiner W.
Garrard, Jr., Chairman, Mason H. Lampton and Salvador Diaz-Verson, Jr. The
primary functions to be engaged in by TSYS' Audit Committee include: (i)
annually recommending to TSYS' Board the independent certified public
accountants ("Independent Auditors") to be engaged by TSYS for the next fiscal
year; (ii) reviewing the plan and results of the annual audit by TSYS'
Independent Auditors; (iii) reviewing and approving the range of management
advisory services provided by TSYS' Independent Auditors; (iv) reviewing TSYS'
internal audit function and the adequacy of the internal accounting control
systems of TSYS; (v) reviewing the results of regulatory examinations of TSYS;
(vi) periodically reviewing the financial statements of TSYS; and (vii)
considering such other matters with regard to the internal and independent audit
of TSYS as, in its discretion, it deems to be necessary or desirable,
periodically reporting to TSYS' Board as to the exercise of its duties and
responsibilities and, where appropriate, recommending matters in connection with
the audit function with respect to which TSYS' Board should consider taking
action. During 1995, TSYS' Audit Committee held six meetings.
Compensation Committee. The members of the Compensation Committee of TSYS'
Board of Directors are: William B. Turner, Chairman, George C. Woodruff, Jr. and
Gardiner W. Garrard, Jr. The primary functions to be engaged in by TSYS'
Compensation Committee include: (i) evaluating the remuneration of senior
management and board members of TSYS and its subsidiaries and the compensation
and fringe benefit plans in which officers, employees and directors of TSYS are
eligible to participate; and (ii) recommending to TSYS' Board whether or not it
should modify, alter, amend, terminate or approve such remuneration,
compensation or fringe benefit plans. During 1995, TSYS' Compensation Committee
held one meeting.
D. Executive Officers.
The following table sets forth the name, age and position with TSYS of each
executive officer of TSYS.
<TABLE>
<CAPTION>
Name Age Position with TSYS
- ---------------------------- --- --------------------------------------
<S> <C> <C>
James H. Blanchard 54 Chairman of the Executive Committee
Richard W. Ussery 48 Chairman of the Board
and Chief Executive Officer
Philip W. Tomlinson 49 President
William A. Pruett 42 Executive Vice President
James B. Lipham 47 Executive Vice President
and Chief Financial Officer
M. Troy Woods 44 Executive Vice President
G. Sanders Griffith, III 42 General Counsel and Secretary
6
</TABLE>
All of the executive officers of TSYS are members of TSYS' Board of
Directors, except William A. Pruett, James B. Lipham, M. Troy Woods and G.
Sanders Griffith, III. William A. Pruett was elected as Executive Vice President
of TSYS in February, 1993. From 1976 until 1993, Mr. Pruett served in various
capacities with CB&T and/or TSYS, including Senior Vice President. James B.
Lipham was elected as Executive Vice President and Chief Financial Officer of
TSYS in July, 1995. From 1984 until 1995, Mr. Lipham served in various financial
capacities with Synovus and/or TSYS, including Senior Vice President and
Treasurer. M. Troy Woods was elected as Executive Vice President of TSYS in
July, 1995. From 1987 until 1995, Mr. Woods served in various capacities with
TSYS, including Senior Vice President. G. Sanders Griffith, III has served as
General Counsel of TSYS since 1988 and was elected as Secretary of TSYS in June,
1995. Mr. Griffith currently serves as Senior Executive Vice President, General
Counsel and Secretary of Synovus and has held various positions with Synovus
since 1988.
All of the executive officers of TSYS serve at the pleasure of TSYS' Board
of Directors. There are no family relationships between any of TSYS' executive
officers, and there are no arrangements or understandings between any such
executive officer or any other person pursuant to which any such officer was
elected.
III. DIRECTORS' PROPOSAL TO APPROVE THE
SYNOVUS FINANCIAL CORP. EXECUTIVE BONUS PLAN
TSYS' executive compensation program will include short-term incentive
bonus awards under the Synovus Financial Corp. Executive Bonus Plan (the "Plan")
beginning in 1996. The purposes of the Plan are to reward selected executive
officers for superior corporate performance and to attract and retain top
quality executive officers. Subject to approval by TSYS' shareholders,
compensation paid pursuant to the Plan to TSYS' officers is intended, to the
extent reasonable, to qualify for tax deductibility under Section 162(m) of the
Internal Revenue Code of 1986, as amended, and the regulations promulgated
thereunder, as may be amended from time to time ("Section 162(m)").
Eligibility and Participation. The Chief Executive Officer and the four
highest compensated officers of Synovus and any publicly-traded subsidiary of
Synovus (including TSYS) are eligible to participate in the Plan. Approximately
10 employees are eligible to participate in the Plan. The Committee, as
described below, has discretion to select participants from among eligible
employees from year to year.
Description of Awards Under the Plan. Pursuant to the Plan, Synovus may
award incentive bonus opportunities to participants. Each fiscal year, the
Committee shall establish, in writing, the performance goals applicable to such
and/or any succeeding fiscal year. The performance measures which shall be used
to determine the amount of the incentive bonus award for each such performance
period shall be chosen from among the following for Synovus, any of its business
segments and/or any of its business units, unless and until the Committee
proposes a change in such measures for shareholder vote or applicable tax and/or
securities laws change to permit the Committee discretion to alter such
performance measures without obtaining shareholder approval: (i) number of
cardholder, merchant and/or other customer accounts processed and/or converted
by TSYS; (ii) successful negotiation or renewal of contracts with new and/or
existing customers by TSYS; (iii) productivity and expense control; (iv) stock
price; (v) return on capital compared to cost of capital; (vi) net income; (vii)
operating income; (viii) earnings per share and/or earnings per share growth;
(ix) return on equity; (x) return on assets; (xi) nonperforming assets and/or
loans as a percentage of total assets and/or loans; (xii) noninterest expense as
a percentage of total expense; (xiii) loan charge-offs as a percentage of total
loans; and (xiv) asset growth. Awards shall be determined based on the
achievement of such preestablished performance goals, and shall be awarded based
on a percentage of a participant's base salary.
The Committee shall have no discretion to increase the amount of any award
under the Plan, but will retain the ability to eliminate or decrease an award
otherwise payable to a participant. The Committee shall certify, in writing,
that the performance goals have been met before any payments to participants may
be made. Payment of the incentive bonus award earned, if any, shall be made in
cash, as soon as practicable thereafter.
Termination of Employment. Any participant not employed by Synovus or a
publicly-traded subsidiary of Synovus on December 31 of any fiscal year will not
be entitled to an award unless otherwise determined by the Committee.
7
Maximum Amount Payable to Any Participant. The maximum amount payable for
each performance period under the Plan to any participant is one hundred fifty
percent (150%) of such participant's base salary; provided, however, that no
participant may receive an award for any performance period in excess of $1.5
million.
Deferral of Bonus Awards. Participants may elect to defer all or a portion
of an incentive bonus award payable under the Plan by providing an election, in
writing, to Synovus prior to the beginning of the year in which the incentive
bonus is to be earned. Deferred amounts shall earn interest at a rate equal to
the average annual short-term prime rate established by CB&T for each fiscal
year.
Distributions of deferred amounts and interest earned thereon to
participants, or their beneficiaries, as applicable, shall be made in cash in
one lump sum or in up to 120 approximately equal monthly installments, as
determined by the Committee. Commencement of payment, in the form determined by
the Committee, shall begin within 30 days after the last day of the month of the
participant's termination of employment by reason of death (except by suicide)
or total disability, or at such time as determined by the Committee in the event
of termination of employment for any other reason; provided that no distribution
shall begin later than the date the participant attains age 70 1/2.
Amendment of the Plan. The Board of Directors of Synovus may amend the Plan
at any time, including amendments that increase the costs of the Plan and
allocate benefits differently between persons and groups in the table below;
provided, however, that no amendment shall be made without shareholder approval
that increases the maximum amount payable to any participant in excess of the
limits set forth above.
Duration of the Plan. The Plan shall remain in effect from the date it is
approved by TSYS' shareholders until the date it is terminated by the Board of
Directors of Synovus. The Board of Directors of Synovus may terminate the Plan
at any time.
Administration. The Plan will be administered by the Compensation Committee
of the Synovus Board of Directors (the "Committee") with the approval, as to
matters involving TSYS employees, of the Compensation Committee of the Board of
Directors of TSYS. The Synovus and TSYS Compensation Committees will be
comprised of two or more Synovus and TSYS "outside" directors within the meaning
of Section 162(m).
Estimate of Benefits. The amounts that will be paid pursuant to the Plan
are not currently determinable. The amounts that would have been awarded for
fiscal year 1995 if the Plan had been in effect and if the Chief Executive
Officer and the five highest compensated officers of TSYS participated in the
Plan are as follows:
<TABLE>
New Plan Benefits
Synovus Financial Corp. Executive Bonus Plan
<CAPTION>
Name Position Dollar Value ($)
- -------------------------- ------------------------------------- ---------------
<S> <C> <C>
Richard W. Ussery Chairman of the Board and $204,750
Chief Executive Officer
Philip W. Tomlinson President 160,500
William A. Pruett Executive Vice President 103,800
M. Troy Woods Executive Vice President 59,375
James B. Lipham Executive Vice President and 48,125
Chief Financial Officer
Kenneth E. Evans Vice Chairman of the Board 130,500
Executive Group 707,050
Non-Executive Director Group -0-
Non-Executive Officer Employee -0-
Group
</TABLE>
Adoption of the proposal requires an affirmative vote by the holders of a
majority of the votes cast thereon. Any shares not voted (whether by absention,
broker non-vote, or otherwise) have no impact on the vote.
TSYS' BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR" THE APPROVAL OF THE
SYNOVUS FINANCIAL CORP. EXECUTIVE BONUS PLAN.
8
IV. EXECUTIVE COMPENSATION
(1) Summary Compensation Table.
The following table summarizes the cash and noncash compensation for each
of the last three fiscal years for the chief executive officer of TSYS and for
the other five most highly compensated executive officers of TSYS.
<TABLE>
SUMMARY COMPENSATION TABLE
<CAPTION> Long-Term
Annual Compensation Compensation Awards
-------------------------------------------------------- ------------------------------
Other Restricted Securities All
Annual Stock Underlying Other
Name and Compen- Award(s) Options/ Compen-
Principal Position<F1> Year Salary<F2> Bonus sation <F3> <F4> SARs sation <F5>
- ----------------------- ------ -------------- ----------- ------------ -------------- ------------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
Richard W. Ussery 1995 $331,400 $204,750 -0- $222,015 25,991 $102,439
Chairman of the 1994 255,000 162,105 -0- 79,505 13,827 47,400
Board and Chief 1993 222,200 110,000 -0- -0- -0- 77,197
Executive Officer
Philip W. Tomlinson 1995 283,900 160,500 -0- 157,133 18,396 87,508
President 1994 221,350 129,830 -0- 56,252 9,783 42,602
1993 195,950 96,875 -0- -0- -0- 72,023
William A. Pruett 1995 173,000 103,800 -0- 59,604 6,978 50,628
Executive Vice 1994 138,500 88,100 -0- 22,494 3,912 29,428
President 1993 110,500 72,750 -0- -0- -0- 20,679
M. Troy Woods 1995 150,000 59,375 -0- -0- 3,600 35,356
Executive Vice 1994<F6> -- -- -- -- -- --
President 1993<F6> -- -- -- -- -- --
James B. Lipham 1995 122,500 48,125 -0- -0- 3,600 30,302
Executive Vice President 1994 95,000 23,750 -0- -0- 2,400 22,774
and Chief Financial 1993 84,000 21,000 -0- -0- -0- 13,952
Officer
Kenneth E. Evans 1995 233,900 130,500 -0- 114,057 13,352 51,487
Vice Chairman <F7> 1994 213,900 125,300 -0- 52,492 9,129 37,114
of the Board 1993 195,950 96,875 $51,932 -0- -0- 106,524
- --------------------
<FN>
<F1> Mr. Blanchard received no cash compensation from TSYS during 1995, other
than director fees.
<F2> Amount consists of base salary and director fees for Messrs. Ussery,
Tomlinson and Evans.
<F3> Perquisites and other personal benefits are excluded because the aggregate
amount does not exceed the lesser of $50,000 or 10% of annual salary and
bonus for the named executives.
<F4> Amount consists of value of award, net of consideration paid by the
executive. As of December 31, 1995, Messrs. Ussery, Tomlinson, Pruett,
Woods, Lipham and Evans held 64,052, 50,441, 20,970 14,740, 14,080 and
53,086 restricted shares, respectively, with a value of $1,930, 426,
$1,522,062, $633,267, $449,570, $429,440 and $1,606,212, respectively. On
September 5, 1995, restricted stock was awarded in the amount of 8,664,
6,132, 2,326 and 4,451 shares of Synovus Common Stock to Messrs. Ussery,
Tomlinson, Pruett and Evans, respectively, with the following vesting
schedule: 20% on September 5, 1996; 20% on September 5, 1997; 20% on
September 5, 1998; 20% on September 5, 1999; and 20% on September 5, 2000.
On June 28, 1994, restricted stock was awarded in the amount of 4,609,
3,261, 1,304 and 3,043 shares of Synovus Common Stock to Messrs. Ussery,
Tomlinson, Pruett and Evans, respectively, with the following vesting
schedule: 20% on June 28, 1995; 20% on June 28, 1996; 20% on June 28, 1997;
20% on June 28, 1998; and 20% on June 28, 1999. Dividends are paid on all
restricted shares.
9
<F5> The 1995 amount consists of contributions or other allocations to defined
contribution plans of $30,000 for each executive; allocations pursuant to
defined contribution excess benefit agreements of $61,306, $46,123,
$20,194, $4,996 and $14,332 for each of Messrs. Ussery, Tomlinson, Pruett,
Woods and Evans, respectively; premiums paid for group term life insurance
coverage of $720, $648, $434, $360, $302 and $605 for each of Messrs.
Ussery, Tomlinson, Pruett, Woods, Lipham and Evans, respectively; the
economic benefit of life insurance coverage related to split-dollar life
insurance policies of $80, $86 and $177 for each of Messrs. Ussery,
Tomlinson and Evans, respectively; and the dollar value of the benefit of
premiums paid for split-dollar life insurance policies (unrelated to term
life insurance coverage) projected on an actuarial basis of $10,333,
$10,651 and $6,373 for each of Messrs. Ussery, Tomlinson and Evans,
respectively.
<F6> Disclosure is not required for 1994 and 1993.
<F7> Mr. Evans was elected President of Synovus Administrative Services Corp. in
July, 1995.
</TABLE>
(2) Stock Option Exercises and Grants.
The following tables provide certain information regarding stock options granted
and exercised in the last fiscal year and the number and value of unexercised
options at the end of the fiscal year.
<TABLE>
OPTIONS/SAR GRANTS IN LAST FISCAL YEAR
<CAPTION> Individual Grants
- ------------------------------------------------------------------------------
% of Total Potential
Options/ Realized Value at
SARs Exercise Assumed Annual Rates of
Options/ Granted to or Stock Price Appreciation
SARs Employees Base For Option Term <F2>
Granted in Fiscal Price Expiration --------------------------
Name (#)<F1> Year ($/Share) Date 5%($) 10%($)
- ------------------- ----------- ------------- -------- -------------- --------- ----------------
<S> <C> <C> <C> <C> <C> <C>
Richard W. Ussery 25,991 3.57% $22.75 09/04/03 $282,262 $676,286
Philip W. Tomlinson 18,396 2.53% 22.75 09/04/03 199,781 478,664
William A. Pruett 6,978 0.96% 22.75 09/04/03 75,781 181,568
M. Troy Woods 3,600 0.49% 22.75 09/04/03 39,096 93,672
James B. Lipham 3,600 0.49% 22.75 09/04/03 39,096 93,672
Kenneth E. Evans 13,352 1.84% 22.75 09/04/03 145,003 347,419
- ---------------
<FN>
<F1> Options granted on September 4, 1995 at fair market value to executives in
tandem with restricted stock awards as part of the Synovus 1994 Long-Term
Incentive Plan. Options become exercisable on September 4, 1997.
<F2> The dollar gains under these columns result from calculations using the
identified growth rates and are not intended to forecast future price
appreciation of Synovus Common Stock.
</TABLE>
<TABLE>
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FY-END OPTION/SAR VALUES
<CAPTION> Number of Securities Value of
Underlying Unexercised Unexercised In-the-Money
Shares Value Options/SARs at FY-End (#) Options/SARs at FY-End ($)<F1>
Acquired on Realized -------------------------- -----------------------------
Name Exercise (#) ($)<F1> Exercisable/Unexercisable Exercisable/Unexercisable
- ------------------- ------------ ----------- -------------------------- -----------------------------
<C> <C> <C> <C> <C>
Richard W. Ussery -0- -0- 0 / 39,818 0 / $309,979
Philip W. Tomlinson -0- -0- 0 / 28,179 0 / $219,359
William A. Pruett -0- -0- 0 / 10,890 0 / $85,495
M. Troy Woods -0- -0- 0 / 3,600 0 / $21,150
-0- -0- 0 / 3,000<F2> 0 / $73,500
James B. Lipham -0- -0- 0 / 3,600 0 / $21,150
-0- -0- 0 / 2,400<F2> 0 / $58,800
Kenneth E. Evans -0- -0- 0 / 22,481 0 / $182,285
- -----------
10
<FN>
<F1> Market value of underlying securities at exercise or year-end, minus the
exercise or base price.
<F2> Options pertain to shares of TSYS Common Stock.
</TABLE>
(3) Compensation of Directors.
Compensation. During 1995, TSYS' directors received a $12,000 retainer, a
fee of $800 for regular and special meetings of TSYS' Board of Directors they
personally attended and a fee of $500 for meetings of the committees of TSYS'
Board of Directors they personally attended. In addition, directors of TSYS are
entitled to receive an $800 fee for one regular meeting and a fee of $800 for
one special meeting of TSYS' Board of Directors, despite the fact they are
unable to personally attend such meetings.
Director Stock Purchase Plan. TSYS' Director Stock Purchase Plan ("DSPP")
is a non-tax-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 Common Stock. Under
the terms of the DSPP, qualifying directors can elect to contribute up to $1,000
per calendar quarter to make purchases of TSYS Common Stock, and TSYS
contributes an additional amount equal to 50% of the directors' cash
contributions. Participants in the DSPP are fully vested in, and may request the
issuance to them of, all shares of TSYS Common Stock purchased for their benefit
thereunder.
(4) Change in Control Arrangements.
Messrs. Ussery, Tomlinson, Pruett, Lipham, Woods and Evans each hold shares
of restricted stock of, and options to purchase stock of, Synovus and/or TSYS
which were issued pursuant to the 1992 Total System Services, Inc. Long-Term
Incentive Plan and the Synovus Financial Corp. 1994 Long-Term Incentive Plan.
Under the terms of the 1992 Total System Services, Inc. Long-Term Incentive Plan
and the Synovus Financial Corp. 1994 Long-Term Incentive Plan, in the event of a
change in control of TSYS or Synovus, the vesting of any stock options, stock
appreciation and other similar rights, restricted stock and performance awards
will be accelerated so that all awards not previously exercisable and vested
will become fully exercisable and vested.
Effective January 1, 1996, TSYS entered into Change of Control Agreements
("Agreements") with Messrs. Ussery, Tomlinson, Pruett, Woods and Lipham and
certain other executive officers. The Change of Control Agreements provide
severance pay and continuation of certain benefits in the event of a Change of
Control of Synovus or TSYS. In order to receive benefits under the Agreements,
the executive's employment must be terminated involuntarily, without cause,
whether actual or "constructive" within one year following a Change of Control
or the executive may voluntarily or involuntarily terminate employment during
the thirteenth month following a Change of Control. With respect to Synovus, a
"Change of Control" generally is deemed to occur in any of the following
circumstances: (1) the acquisition by any person of 20% or more of the
"beneficial ownership" of Synovus' outstanding voting stock, with certain
exceptions for Turner family members; (2) the persons serving as directors of
Synovus as of January 1, 1996 and those replacements or additions subsequently
approved by a two-thirds (2/3) vote of the Board ceasing to comprise at least
two-thirds (2/3) of the Board; (3) a merger, consolidation, reorganization or
sale of Synovus' assets unless (a) the previous beneficial owners of Synovus own
more than two-thirds (2/3) of the new company, (b) no person owns more than 20%
of the new company, and (c) two-thirds (2/3) of the new company's Board were
members of the incumbent Board which approved the business combination; or (4) a
"triggering event" as defined in the Synovus Rights Agreement. With respect to
TSYS, a Change of Control is generally defined in the same manner as a Change of
Control of Synovus, except that (1) a spin-off of TSYS stock to Synovus
shareholders and (2) any transaction in which Synovus continues to own more than
50% of the outstanding voting stock of TSYS are specifically excluded from the
definition of Change of Control.
Under the Agreements, severance pay would equal three times current base
salary and bonus, with bonus being defined as the average of the previous three
years measured as a percentage of base salary multiplied by current base salary.
Medical, life, disability and other welfare benefits will be provided at the
expense of TSYS for three years with the level of coverage being determined by
11
the amount elected by the executive during the open enrollment period
immediately preceding the Change of Control. Executives would also receive a
short-year bonus for the year of separation based on the greater of a half
year's maximum bonus or pro rata maximum bonus to the date of termination and a
cash amount in lieu of a long-term incentive award for the year of separation.
If the executive has already received a long-term incentive award in the
separation year, the amount would equal 1.5 times the market grant and if the
executive has not, the amount would equal 2.5 times market grant.
Executives who are impacted by the Internal Revenue Service excise tax that
applies to certain change of control agreements would receive additional gross
up payments so that they are in the same position as if there were no excise
tax. The Agreements do not provide for retirement benefits or perquisites.
Notwithstanding anything to the contrary set forth in any of TSYS' previous
filings under the Securities Act of 1933, as amended, or the Exchange Act that
might incorporate future filings, including this Proxy Statement, in whole or in
part, the following Performance Graph and Compensation Committee Report on
Executive Compensation shall not be incorporated by reference into any such
filings.
(5) Stock Performance Graph.
The following graph compares the yearly percentage change in cumulative
shareholder return on TSYS Common Stock with the cumulative total return of the
Standard & Poor's 500 Index and the Standard & Poor's Computer Software &
Services Index for the last five fiscal years (assuming a $100 investment on
December 31, 1990 and reinvestment of all dividends).
[Omitted Stock Performance Graph is represented by the following table.]
<TABLE>
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN AMONG
TSYS, S&P 500 AND S&P COMPUTER SOFTWARE & SERVICES INDEX
<CAPTION>
1990 1991 1992 1993 1994 1995
<S> <C> <C> <C> <C> <C> <C>
TSYS $100 $ 79 $ 90 $166 $218 $390
S&P 500 $100 $130 $140 $154 $156 $215
S&P CS&S $100 $207 $245 $270 $360 $501
</TABLE>
12
(6) Compensation Committee Report on Executive Compensation.
The Compensation Committee (the "Committee") of the Board of Directors of
TSYS is responsible for evaluating the remuneration of senior management and
board members of TSYS and its subsidiaries and the compensation and fringe
benefit plans in which officers, employees and directors of TSYS and its
subsidiaries are eligible to participate. Because TSYS' mission is to exceed the
expectations of its customers through the delivery of superior service and
continuous quality improvement that rewards its employees and enhances the value
of its shareholders' investment, the Committee's executive compensation policies
and practices are designed to attract, retain and reward its executives for
their performance in accomplishing TSYS' mission.
Elements of Executive Compensation. The four elements of executive
compensation at TSYS are:
o Base Salary
o Annual Bonus
o Long-Term Incentives
o Other Benefits
The Committee believes that a substantial portion, though not a majority,
of an executive's compensation should be "at-risk" based upon TSYS' short-term
performance (through the annual bonus and the Synovus/TSYS Profit Sharing Plan
and the Synovus/TSYS 401(k) Savings Plan) and long-term performance (through
long-term incentives including stock options and restricted stock awards). The
remainder of each executive's compensation is primarily based upon the
competitive practices of companies similar in size to TSYS ("similar companies")
with certain adjustments as described below. The companies used for comparison
are not the same companies included in the peer group index appearing in the
Stock Performance Graph above. A description of each element of executive
compensation and the factors and criteria used by the Committee in determining
these elements is discussed below:
Base Salary. Base salary is an executive's annual rate of pay without
regard to any other elements of compensation. Prior to 1995, the primary
consideration in determining an executive's base salary had been a market
comparison of the base salaries at similar companies for similar positions based
upon the executive's level of responsibility and experience. Beginning in 1995,
however, the Committee desired to change this approach because it believed a
"size-based" approach did not reflect the fact that TSYS has had outstanding
stock performance over the previous 10 years, resulting in significant market
value added for its shareholders. The Committee had considerable difficulty,
however, in obtaining data that reflected the appropriate market for the
compensation of TSYS executives. Positions for which market matches could be
found were targeted at the median level. The Committee added a premium, however,
to the size-based market data designed to reflect pay at companies with similar
strong stock performance and market value added. Positions for which such market
data could not be obtained were slotted using internal equity considerations.
Based solely upon these comparisons, the Committee increased Mr. Ussery's base
salary in 1995. The Committee also increased the base salaries of TSYS' other
executive officers in 1995 based upon these comparisons and internal equity
considerations, as described above.
Annual Bonus. Annual bonuses are awarded to the executive officers of TSYS
pursuant to the terms of the Synovus Incentive Bonus Plan. Under the Incentive
Bonus Plan, bonus amounts are paid as a percentage of base pay based on
financial performance goals such as revenues and earnings. The maximum
percentage payouts under the Incentive Bonus Plan are 65% for Mr. Ussery, 60%
for Messrs. Tomlinson, Pruett and Evans and 25% (50% effective July 1, 1995) for
Messrs. Woods and Lipham. For Mr. Ussery and TSYS' other executive officers,
the 1995 goal under the Incentive Bonus Plan was a single net income goal for
TSYS. TSYS' financial performance and individual performance, separate from the
financial performance goals established at the beginning of the year, can reduce
bonus awards determined by the attainment of the established goals,
13
although this was not the case for any of TSYS' executive officers. Because the
net income goal for 1995 under the Incentive Bonus Plan was exceeded and the
overall financial results of TSYS were favorable, Mr. Ussery and TSYS' other
executive officers were awarded the maximum bonus amount for which each
executive was eligible. Beginning in 1996, annual bonuses for Mr. Ussery and
TSYS' other four most highly compensated executive officers will be awarded
under the Synovus Financial Corp. Executive Bonus Plan. See Section III hereof
captioned "Directors' Proposal to Approve the Synovus Financial Corp. Executive
Bonus Plan."
Long-Term Incentives. The two types of long-term incentives awarded to
executives to date are stock options and restricted stock awards. Because of the
relatively low number of previously traded shares of TSYS, the Committee has
decided to award stock options and restricted stock awards of Synovus stock to
TSYS executives, thereby linking their interests to the interests of TSYS and
Synovus shareholders. Restricted stock awards are designed to focus executives
on the long-term performance of TSYS and Synovus. Stock options provide
executives with the opportunity to buy and maintain an equity interest in TSYS
and Synovus and to share in the appreciation of the value of TSYS and Synovus
Common Stock. The Committee restructured its approach for granting long-term
incentive awards in 1994. During this restructuring, the Committee established a
payout matrix for future long-term incentive grants that uses total shareholder
return as measured by Synovus' performance (stock price increases plus
dividends) and how Synovus' total shareholder return compares to the return of a
peer group of companies. For the long-term incentive awards made in 1995, total
shareholder return and peer comparisons were measured during the 1992-1994
performance period. Applying the results of the 1992-1994 performance period to
the payout matrix, the Committee granted Mr. Ussery and TSYS' other executive
officers restricted stock awards and stock options in 1995.
Benefits. Benefits offered to executives serve a different purpose than the
other elements of total compensation. In general, these benefits provide either
retirement income or protection against catastrophic events such as illness,
disability and death. Executives generally receive the same benefits offered to
the general employee population, with the only exceptions designed to promote
tax efficiency or to replace other benefits lost due to regulatory limits. The
Synovus/TSYS Profit Sharing Plan and the Synovus/TSYS 401(k) Savings Plan,
including excess benefit arrangements designed to replace benefits lost due to
regulatory limits (collectively the "Plan"), is the largest component of TSYS'
benefits package for executives. The Plan is directly related to corporate
performance because the amount of employer contributions to the Plan (to a
maximum of 14% of an executive's compensation) is a function of TSYS'
profitability. For 1995, Mr. Ussery and TSYS' other executive officers received
a Plan contribution of 11.66% of their compensation based upon the
profitability formula under the Plan. The remaining benefits provided to
executives are primarily based upon the competitive practices of similar
companies.
In 1993, the Internal Revenue Code of 1986, as amended (the "Code"), was
amended to limit the deductibility for federal income tax purposes of annual
compensation paid by a publicly held corporation to its chief executive officer
and four other highest paid executives for amounts greater than $1 million
unless certain conditions are met. Although none of TSYS' executive officers are
currently affected by this provision, the Committee believes that this provision
could affect TSYS' executive officers in the future. Because the Committee seeks
to maximize shareholder value, the Committee has taken steps to ensure the
deductibility of compensation in excess of $1 million in the future, although
the Committee reserves the ability to make awards which do not qualify for full
deductibility under Section 162(m) of the Code if the Committee determines that
the benefits of so doing outweigh full deductibility.
The Committee believes that the executive compensation policies serve the
best interests of the shareholders and of TSYS. A substantial portion of the
compensation of TSYS' executives is directly related to and commensurate with
TSYS' performance. The Committee believes that the performance of TSYS to date
validates the Committee's compensation philosophy.
William B. Turner
Gardiner W. Garrard, Jr.
George C. Woodruff, Jr.
14
(7) Compensation Committee Interlocks and Insider Participation.
The members of TSYS' Compensation Committee during 1995 were William B.
Turner, Gardiner W. Garrard, Jr. and George C. Woodruff, Jr. No member of the
Committee is a current or former officer or employee of TSYS or its
subsidiaries.
Mr. Turner is Chairman of the Executive Committee of W.C. Bradley Co. James
H. Blanchard, Chairman of the Executive Committee of TSYS, serves on the Board
of Directors of W.C. Bradley Co. TSYS leases various properties in Columbus,
Georgia from W.C. Bradley Co. for office space and storage. The rent paid for
the space in 1995, which is approximately 107,295 square feet, is approximately
$746,508. The lease agreements were made substantially on the same terms as
those prevailing at the time for comparable leases for similar facilities with
an unrelated third party in Columbus, Georgia.
TSYS has entered into an agreement with CB&T with respect to the use of
aircraft owned or leased by B&C Company, a Georgia general partnership in which
CB&T and W.C. Bradley Co. are equal partners. CB&T and W.C. Bradley Co. have
each agreed to remit to B&C Company fixed fees for each hour they fly the
aircraft owned and/or leased by B&C Company. TSYS paid CB&T $239,131 for its use
of the B&C Company aircraft during 1995, which $239,131 was remitted to B&C
Company by CB&T. The charges payable by TSYS to CB&T in connection with its use
of this aircraft approximate charges made available to unrelated third parties
in the State of Georgia for use of comparable aircraft for commercial purposes.
William B. Turner, a director of TSYS, Chairman of the Board of CB&T and
Chairman of the Executive Committee of Synovus, is an officer, director and
shareholder of W.C. Bradley Co. James H. Blanchard, Chairman of the Executive
Committee of TSYS, Chairman of the Board of Synovus and a director of CB&T, is a
director of W.C. Bradley Co. W. Walter Miller, Jr., a director of W.C. Bradley
Co., is Senior Vice President and a director of TSYS. Elizabeth C. Ogie, the
niece of William B. Turner and the sister-in-law of W. Walter Miller, Jr., is a
director of W.C Bradley Co. and a director of CB&T and Synovus. Stephen T.
Butler, the nephew of William B. Turner and an officer and director of W.C.
Bradley Co., is a director of CB&T. Samuel M. Wellborn, III, President and a
director of CB&T, is a director of W.C. Bradley Co. W.B. Turner, Jr. and John T.
Turner, the sons of William B. Turner, are officers and directors of W.C.
Bradley Co. and are also directors of CB&T.
Gardiner W. Garrard, Jr. is President of The Jordan Company. On October 1,
1993, TSYS entered into a lease with The Jordan Company pursuant to which TSYS
leases from The Jordan Company approximately 10,000 square feet of office space
in Columbus, Georgia for $5,000 per month, payable in advance, which lease
expires on September 30, 1996. The lease was made on substantially the same
terms as those prevailing at the time for leases of comparable property between
unrelated third parties. Gardiner W. Garrard, Jr., a director of TSYS, CB&T and
Synovus, is an officer, director and shareholder of The Jordan Company. Richard
M. Olnick, the brother-in-law of Gardiner W. Garrard, Jr. and a director of
CB&T, is an officer, director and shareholder of The Jordan Company.
George C. Woodruff, Jr. is a shareholder of George C. Woodruff Co. During
1995, George C. Woodruff Co. received payments of $70,690 in connection with
landscaping services provided for TSYS. These payments were made in the ordinary
course of business on substantially the same terms as those prevailing at the
time for comparable transactions with unrelated third parties. George C.
Woodruff, Jr. is a director of TSYS, CB&T and Synovus.
(8) Transactions with Management.
During 1995, TSYS paid to Communicorp, Inc. an aggregate of $569,309. These
payments were made in the ordinary course of business on substantially the same
terms as those prevailing at the time for comparable transactions with unrelated
third parties, and were primarily for various printing and business
communication services provided by Communicorp, Inc. to TSYS. Communicorp, Inc.
is a wholly-owned subsidiary of AFLAC Incorporated. Daniel P. Amos, a director
of CB&T and Synovus, is Chief Executive Officer and a director of AFLAC
Incorporated.
15
King & Spalding, a law firm located in Atlanta, Georgia, performed legal
services on behalf of TSYS during 1995. Griffin B. Bell, a director of TSYS, is
a Senior Partner of King & Spalding.
For information about transactions with companies that are affiliates of
William B. Turner, Gardiner W. Garrard, Jr. and George C. Woodruff, Jr.,
directors of TSYS, see Section IV (7) hereof captioned "Compensation Committee
Interlocks and Insider Participation."
For a description of certain transactions between TSYS and its affiliated
companies, upon whose Boards of Directors certain of TSYS' directors also serve,
see Section V(D) hereof captioned "Bankcard Data Processing Services Provided
to CB&T and Certain of Synovus' Subsidiaries; Other Agreements Between TSYS,
Synovus, CB&T and Certain of Synovus' Subsidiaries."
V. RELATIONSHIPS BETWEEN TSYS, SYNOVUS, CB&T AND CERTAIN OF SYNOVUS'
SUBSIDIARIES
A. Beneficial Ownership of TSYS Common Stock by CB&T.
The following table sets forth, as of December 31, 1995, the number of
shares of TSYS Common Stock beneficially owned by CB&T, the only known
beneficial owner of more than 5% of the issued and outstanding shares of TSYS
Common Stock.
<TABLE>
Percentage of
<CAPTION> Shares of Outstanding Shares of
TSYS Common Stock TSYS Common Stock
Name and Address Beneficially Owned Beneficially Owned
Beneficial Owner as of 12/31/95 as of 12/31/95
- ------------------------ ------------------------ -----------------------------
<S> <C> <C>
Columbus Bank
and Trust Company 52,200,646 <F1> <F2> 80.8%
1148 Broadway,
Columbus, Georgia 31901
- ------------
<FN>
<F1> CB&T individually owns these shares.
<F2> As of December 31, 1995, Synovus Trust Company, a wholly-owned trust
company subsidiary of CB&T ("Synovus Trust"), held in various fiduciary
capacities a total of 316,617 shares (.49%) of TSYS Common Stock. Of this total,
Synovus Trust held 287,139 shares as to which it possessed sole voting or
investment power and 29,478 shares as to which it possessed shared voting and
investment power. In addition, as of December 31, 1995, Synovus Trust held in
various agency capacities an additional 492,982 shares of TSYS Common Stock as
to which it possessed no voting or investment power. Synovus and its
subsidiaries disclaim beneficial ownership of all shares of TSYS Common Stock
which are held by Synovus Trust in various fiduciary and agency capacities.
</TABLE>
CB&T, by virtue of its individual ownership of 52,200,646 shares, or 80.8%,
of the outstanding shares of TSYS Common Stock on December 31, 1995 is able to,
and intends to, elect a majority of TSYS' Board of Directors. CB&T presently
controls TSYS.
B. Interlocking Directorates of TSYS, Synovus and CB&T.
Eight of the fifteen members of and nominees to serve on TSYS' Board of
Directors also serve as members of the Boards of Directors of Synovus and CB&T.
They are James H. Blanchard, Richard Y. Bradley, Salvador Diaz-Verson, Jr.,
Gardiner W. Garrard, Jr., H. Lynn Page, William B. Turner, George C. Woodruff,
Jr., and James D. Yancey. John P. Illges, III serves as an Advisory Director of
Synovus and as a director of CB&T and Mason H. Lampton serves as an Advisory
Director of CB&T and as a director of Synovus.
C. Synovus Common Stock Ownership of Directors and Management.
The following table sets forth, as of December 31, 1995, the number of
shares of Synovus Common Stock beneficially owned by TSYS' directors and TSYS'
six most highly compensated executive officers.
16
<TABLE>
<CAPTION>
Shares of Shares of Shares of
Synovus Synovus Synovus Percentage
Common Stock Common Stock Common Stock 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 but no Common Stock Common Stock
Investment Investment Investment Beneficially Beneficially
Power as of Power as of Power as of Owned as of Owned as of
Name 12/31/95 12/31/95 12/31/95 12/31/95 12/31/95
- ------------------------ ------------- ------------ --------------- ------------ --------------
<S> <C> <C> <C> <C> <C>
Griffin B. Bell 10,425 6,000 --- 16,425 .02%
James H. Blanchard 448,729 7,381 24,526 480,636 .62
Richard Y. Bradley 4,521 37,481 --- 42,002 .05
Salvador Diaz-Verson, Jr. 17,806 175 --- 17,981 .02
Kenneth E. Evans 11,794 278 6,886 18,958 .02
Gardiner W. Garrard, Jr. 57,605 423,959 --- 481,564 .62
John P. Illges, III 166,468 77,630<F1> --- 244,098 .32
Mason H. Lampton 118,892 81,488<F2> --- 200,380 .26
James B. Lipham 705 --- --- 705 .001
W. Walter Miller, Jr. 11,668<F3> 18,889 --- 30,557 .04
H. Lynn Page 265,118 3,412 --- 268,530 .35
William A. Pruett 260 --- 3,370 3,630 .005
Philip W. Tomlinson 746 --- 8,741 9,487 .01
William B. Turner 27,661 9,002,249<F4> --- 9,029,910 11.69
Richard W. Ussery 7,671 1,163 12,352 21,186 .03
George C. Woodruff, Jr. 36,794 --- --- 36,794 .05
M. Troy Woods 705 --- --- 705 .001
James D. Yancey 306,393 13,275 14,658 334,326 .43
- -------------------
<FN>
<F1> Includes 18,568 shares of Synovus Common Stock held by a charitable
foundation of which Mr. Illges is a trustee.
<F2> Includes 74,118 shares of Synovus Common Stock held in a trust for which
Mr. Lampton is not the trustee. Mr. Lampton disclaims beneficial ownership of
such shares.
<F3> Includes 3,000 shares of Synovus Common Stock with respect to which Mr.
Miller has options to acquire.
<F4> Includes 760,950 shares held by a charitable foundation of which Mr. Turner
is a trustee.
</TABLE>
The following table sets forth information, as of December 31, 1995, with
respect to the beneficial ownership of Synovus Common Stock by all directors and
executive officers of TSYS as a group.
<TABLE>
Percentage of
<CAPTION> Shares of Outstanding Shares of
Synovus Common Stock Synovus Common Stock
Name of Beneficially Owned Beneficially Owned
Beneficial Owner as of 12/31/95 as of 12/31/95
- ------------------------ ----------------------- -----------------------------
<S> <C> <C>
All directors
and executive
officers of TSYS as a 11,299,926 14.63%
group
(includes 19 persons)
</TABLE>
17
D. Bankcard Data Processing Services Provided to CB&T and Certain of Synovus'
Subsidiaries; Other Agreements Between TSYS, Synovus, CB&T and Certain of
Synovus' Subsidiaries.
During 1995, TSYS provided bankcard data processing services to CB&T and 30
of Synovus' other banking subsidiaries. The bankcard data processing agreement
between TSYS and CB&T can be terminated by CB&T upon 60 days prior written
notice to TSYS or terminated by TSYS upon 180 days prior written notice to CB&T.
During 1995, TSYS charged CB&T and 30 of Synovus' other banking subsidiaries
$2,641,337, in the aggregate, including the reimbursement of $836,057 of out of
pocket expenses, for the performance of bankcard data processing services. TSYS'
charges to CB&T and Synovus' other banking subsidiaries for bankcard data
processing services are comparable to, and are determined on the same basis as,
charges by TSYS to similarly situated unrelated third parties.
Synovus Administrative Services Corp. ("SASC"), a wholly-owned subsidiary
of Synovus, was formed in 1995 to provide administrative services to Synovus'
subsidiary companies, including TSYS. In connection with the formation of SASC,
TSYS sold SASC property and equipment at book value of approximately $438,000.
Additionally, TSYS and SASC are parties to a Lease Agreement pursuant to which
SASC leased from TSYS office space for lease payments aggregating $198,578
during 1995. The terms of these transactions are comparable to those which could
have been obtained in transactions with unaffiliated third parties.
TSYS and Synovus and TSYS and SASC are parties to Management Agreements
(having one year, automatically renewable, unless terminated, terms), pursuant
to which Synovus and SASC provide certain management services to TSYS. During
1995, these services included human resource services, maintenance services,
security services, communications services, corporate education services, travel
services, investor relations services, corporate governance services, legal
services, regulatory and statutory compliance services, executive management
services performed on behalf of TSYS by certain of Synovus' officers and
financial services. As compensation for management services provided during
1995, TSYS paid Synovus and SASC management fees of $1,039,693 and $3,158,695,
respectively. As compensation for payroll processing support services provided
by TSYS to Synovus during 1995, Synovus paid TSYS a management fee of $361,093.
Management fees are subject to future adjustments based upon the management
services then being provided based upon charges at the time by unrelated third
parties for comparable services.
During 1995, CB&T served as Trustee of various employee benefit plans of
TSYS. During 1995, TSYS paid CB&T trustee's fees under these plans of $187,374.
During 1995, Columbus Depot Equipment Company ("CDEC"), a wholly-owned
subsidiary of TSYS, and CB&T and 24 of Synovus' other subsidiaries were parties
to Lease Agreements pursuant to which CB&T and 24 of Synovus' other subsidiaries
leased from CDEC computer related equipment for bankcard and bank data
processing services for lease payments aggregating $155,813. During 1995, CDEC
sold CB&T and certain of Synovus' other subsidiaries computer related equipment
for bankcard and bank data processing services for payments aggregating
$107,534. In addition, CDEC was paid $25,925 by CB&T and certain of Synovus'
other subsidiaries for monitoring such equipment and $160 for servicing
various computer related equipment. The terms, conditions, rental rates and/or
sales prices provided for in these Agreements are comparable to corresponding
terms, conditions and rates provided for in leases and sales of similar
equipment offered by unrelated third parties.
During 1995, Synovus Data Corp., a wholly-owned subsidiary of Synovus, paid
TSYS $701,159 for data links, network services and other miscellaneous items
related to the data processing services which Synovus Data Corp. provides to its
customers, which amount was reimbursed to Synovus Data Corp. by its customers,
and $103,944 for management services. During 1995, TSYS paid Synovus Data Corp.
$96,000, primarily for computer processing services. The charges for processing
and other services are comparable to those between unrelated third parties.
During 1995, TSYS and Synovus Data Corp. were parties to a Lease
Agreement pursuant to which TSYS leased from Synovus Data Corp.
portions of its office building for lease payments
18
aggregating $214,650. During 1995, TSYS and CB&T were parties to Lease
Agreements pursuant to which CB&T leased from TSYS portions of its maintenance
and warehouse facilities for lease payments aggregating $20,203. In August,
1993, TSYS entered into a three-year Lease Agreement with CB&T pursuant to which
it leases office space from CB&T for lease payments of $4,483 per month. The
terms, conditions and rental rates provided for in these Lease Agreements are
comparable to corresponding terms, conditions and rates provided for in leases
of similar facilities offered by unrelated third parties in the Columbus,
Georgia area.
During 1995, Synovus, CB&T and other Synovus subsidiaries paid to Columbus
Productions, Inc., a wholly-owned subsidiary of TSYS, an aggregate of $523,660
for printing services. The charges for printing services are comparable to those
between unrelated third parties.
During 1995, TSYS purchased 17,122 shares of Synovus Common Stock from
Synovus for $389,526 and simultaneously granted the shares to certain executive
officers of TSYS as restricted stock awards. The per share purchase price of
such shares was equal to the fair market value of a share of Synovus Common
Stock on the date of purchase.
Most customers of the services marketed as THE TOTAL SYSTEM (SM) maintain
special clearing demand deposit accounts with CB&T to facilitate the settlement
of bankcard transactions between Visa(R), MasterCard(R), TSYS and the customers.
In certain cases, with the approval of CB&T, these special clearing accounts may
also be utilized by customers for other correspondent banking transactions with
CB&T.
During 1995, TSYS and its subsidiaries were paid $837,354 of interest by
CB&T in connection with deposit accounts with, and commercial paper purchased
from, CB&T. During 1995, a subsidiary of TSYS paid CB&T $77,709 of interest in
connection with a loan from CB&T. These interest rates are comparable to those
provided for between unrelated third parties.
Effective December 28, 1990, TSYS, the Development Authority of Columbus,
Georgia, and CB&T, as Trustee, consummated the issuance of, and various banking
subsidiaries of Synovus purchased, $15,000,000 of industrial development revenue
bonds, the proceeds of which were used by TSYS to acquire and construct its
210,000 square foot North Center production facility. As a result of the
consummation of such financing, TSYS will lease its North Center facility from
the Development Authority for a period of 30 years, with the lease payments to
be paid thereon being used by the Authority to satisfy its obligations to the
purchasers of the bonds. The terms of such bonds, including the 9.75% rate of
interest to be paid thereon and the schedule upon which principal will be repaid
included therein, and the various other documents pursuant to which such bonds
were issued, were arrived at as a result of arm's-length negotiations between
TSYS, the Authority, the Trustee and the various subsidiary banks of Synovus
which purchased the bonds, and are no less favorable than could be obtained from
unrelated third parties. During 1995, TSYS made principal payments of $25,000
and interest payments of $609 in connection with such bonds.
The Board of Directors of TSYS has resolved that transactions with
officers, directors, key employees and their affiliates shall be approved by a
majority of its independent and disinterested directors, if otherwise permitted
by applicable law, and will be on terms no less favorable than could be obtained
from unrelated third parties.
VI. COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT
Section 16(a) of the Exchange Act requires TSYS' officers and directors,
and persons who own more than ten percent of TSYS Common Stock, to file reports
of ownership and changes in ownership on Forms 3,4 and 5 with the SEC and the
New York Stock Exchange. Officers, directors and greater than ten percent
shareholders are required by SEC regulations to furnish TSYS with copies of all
Section 16(a) forms they file.
To TSYS' knowledge, based solely on its review of the copies of such forms
received by it, and written representations from certain reporting persons that
no Forms 5 were required for those persons, TSYS believes that during the fiscal
year ended December 31, 1995, all Section 16(a) filing requirements applicable
to its officers, directors, and greater than ten percent beneficial
19
owners were complied with, except that William M. McVay, a director of TSYS
during a portion of 1995, filed two amended Forms 4 reporting late three
transactions; Mr. Bell filed three amended Forms 4 and a corrective Form 5
reporting late ten transactions; and Raymond M. Wright, an emeritus director of
TSYS during a portion of 1995 who filed Section 16(a) reports during a portion
of 1995, filed one amended Form 4 reporting late one transaction. In addition,
Mr. Page filed an amended Form 4 to correct a previously filed timely report
that misstated the number of shares of TSYS Common Stock gifted to family
members.
VII. INDEPENDENT AUDITORS
On February 12, 1996, TSYS' Board of Directors appointed KPMG Peat Marwick
LLP as the independent auditors to audit the financial statements of TSYS and
its subsidiaries for the fiscal year ending December 31, 1996. The Board of
Directors knows of no direct or material indirect financial interest by KPMG
Peat Marwick LLP in TSYS or of any connection between KPMG Peat Marwick LLP and
TSYS in the capacity of promoter, underwriter, voting trustee, director,
officer, shareholder or employee.
Representatives of KPMG Peat Marwick LLP will be present at TSYS' 1996
Annual Meeting with the opportunity to make a statement if they desire to do so
and will be available to respond to appropriate questions.
VIII. FINANCIAL INFORMATION WITH REFERENCE TO TSYS CONTAINED IN TSYS' 1995
ANNUAL REPORT
Detailed financial information for TSYS and its subsidiaries for its 1995
fiscal year is included in TSYS' 1995 Annual Report that is being mailed to
TSYS' shareholders together with this Proxy Statement.
IX. OTHER MATTERS
At the time of preparation of this Proxy Statement, TSYS' Board of
Directors has not been informed of any matters to be presented by or on behalf
of TSYS' Board of Directors or its management for action at TSYS' 1996 Annual
Meeting which are not referred to herein. If any other matters come before the
Annual Meeting or any adjournment thereof, it is the intention of the persons
named in the accompanying Proxy to vote thereon in accordance with their best
judgment.
TSYS' shareholders are urged to vote, date and sign the enclosed Proxy Card
solicited on behalf of TSYS' Board of Directors and return it at once in the
envelope which is enclosed for that purpose. This should be done whether or not
the TSYS shareholder plans to attend TSYS' 1996 Annual Meeting.
By Order of the Board of Directors
/s/ Richard W. Ussery
Richard W. Ussery
Chairman of the Board, Total System Services, Inc.
Columbus, Georgia
March 15, 1996
20
APPENDIX A
PROXY PROXY
TOTAL SYSTEM SERVICES, INC.
POST OFFICE BOX 2506, COLUMBUS, GEORGIA 31902-2506
ANNUAL MEETING OF SHAREHOLDERS OF TSYS TO BE HELD APRIL 15, 1996
SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF TSYS
The undersigned shareholder of Total System Services, Inc. ("TSYS"), Columbus,
Georgia, hereby makes, constitutes and appoints James B. Lipham and Dorenda K.
Weaver, or any of them acting singly in the absence of the other, the true and
lawful attorney(s) and proxy(ies) of the undersigned, each of them with full
power of substitution, for and in the name, place and stead of the undersigned
to represent and to vote all shares of the $.10 par value common stock of TSYS
("TSYS Common Stock") standing in the name of the undersigned or with respect to
which the undersigned is entitled to vote at the ANNUAL MEETING OF THE
SHAREHOLDERS OF TSYS to be held on the 15th day of April, 1996, and at any
adjournments or postponements thereof, with all the powers the undersigned would
possess if personally present.
The Board of Directors is not aware of any matters likely to be presented for
action at the Annual Meeting of Shareholders of TSYS, other than the matters
listed herein. However, if any other matters are properly brought before the
Annual Meeting, the persons named in this Proxy or their substitutes will vote
upon such other matters in accordance with their best judgement. This Proxy is
revocable at any time prior to its use.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN ACCORDANCE WITH
ANY INSTRUCTIONS INDICATED HEREIN. IF NO INDICATION IS MADE, IT WILL BE VOTED
IN FAVOR OF EACH OF THE PROPOSALS LISTED HEREIN.
PLEASE VOTE AND SIGN ON OTHER SIDE AND RETURN PROMPTLY IN ENCLOSED ENVELOPE.
Please sign exactly as your name appears on this Proxy. When shares are held by
joint tenants, both must sign. When signing in a fiduciary or representative
capacity, give your full title as such. If a corporation, please sign in full
corporate name by an authorized officer. If a partnership, please sign in full
partnership name by an authorized person.
HAS YOUR ADDRESS CHANGED? DO YOU HAVE ANY COMMENTS?
______________________________________ __________________________________
______________________________________ __________________________________
[X] PLEASE MARK VOTES AS IN THIS EXAMPLE
With- For all
For hold Except For Against Abstain
1.) To elect [ ] [ ] [ ] 2.) To [ ] [ ] [ ]
Class I approve the
Directors of TSYS. Synovus Financial Corp.
Nominees: Executive Bonus Plan.
Griffin B. Bell, Kenneth E. Evans, H. Lynn Page, The undersigned hereby
Philip W. Tomlinson and Richard W. Ussery acknowledges receipt of
NOTICE of said ANNUAL
MEETING and said PROXY
Instruction: To withhold authority to vote STATEMENT and hereby revokes
for any individual nominee for Class I all Proxies heretofore
director of TSYS, mark the "For All Except" given by the undersigned
box and strike a line through the nominee's for said ANNUAL MEETING.
name in the list above.
RECORD DATE SHARES: THE BOARD OF DIRECTORS
RECOMMENDS THAT SHAREHOLDERS
VOTE FOR EACH OF THE
PROPOSALS LISTED HEREIN.
Please be sure to
sign and date this Proxy.[Date: ] Mark box at right [ ]
Shareholder sign here[ ] if comments or address
Co-owner sign here[ ] change have been noted on
the reverse side of this
card.
DETACH CARD DETACH CARD
TOTAL SYSTEM SERVICES, INC.
Dear Shareholder:
Please take note of the important information enclosed with this Proxy Ballot.
There are issues related to the management and operation of your Company that
require your immediate attention and approval. These are discussed in detail in
the enclosed proxy materials.
Your vote counts, and you are strongly encouraged to exercise your right to vote
your shares.
Please mark the boxes on the proxy card to indicate how your shares shall be
voted. Then sign the card, detach it and return your proxy vote in the enclosed
postage paid envelope.
Your vote must be received prior to the Annual Meeting of Shareholders, April
15, 1996.
Thank you in advance for your prompt consideration of these matters.
Sincerely,
Total System Services, Inc.
APPENDIX B
SYNOVUS FINANCIAL CORP.
EXECUTIVE BONUS PLAN
ARTICLE I
OBJECTIVE OF THE PLAN
The purposes of this Synovus Financial Corp. Executive Bonus Plan
("Plan") to reward selected officers of Synovus Financial Corp. (the "Company")
and certain of its subsidiaries ("Subsidiaries") for superior corporate
performance measured by achievement of financial performance and strategic
corporate objectives and to attract and retain top quality officers.
ARTICLE II
PLAN ADMINISTRATION
This Plan is administered by the Compensation Committee (the
"Committee") of the Company's Board of Directors (the "Board"), with the
approval, as to matters involving employees of any publicly-traded Subsidiary of
the Company, of the compensation committee of such publicly-traded Subsidiary.
The Committee (and the compensation committee of any publicly-traded Subsidiary
of the Company) shall be composed of two or more outside directors as defined in
Section 162(m) of the Internal Revenue Code of 1986, as amended ("Code").
ARTICLE III
PARTICIPANTS
Participation is limited to the Chief Executive Officer and the four
highest compensated officers of the Company and any publicly-traded Subsidiary
of the Company as selected from year-to-year by the members of the Committee
("Participants").
ARTICLE IV
PERFORMANCE OBJECTIVES
Each fiscal year, the Committee shall establish
(i) performance objectives for such and/or the succeeding
fiscal year for the Company, any Subsidiary, or any
business segment or business unit of the Company or
any Subsidiary, based upon such criteria as may be
from time to time considered by the Committee, which
criteria may include, not to the exclusion of other
criteria, criteria that has been approved by the
shareholders of the Company or the shareholders of
any publicly-traded Subsidiary of the Company; and
(ii) a system which equates the attainment of various
performance objectives by the Company and
Subsidiaries for such and/or the succeeding fiscal
year into various percentages of the base salaries of
eligible officers of the Company and Subsidiaries for
such and/or the succeeding fiscal year which may be
awarded to such Employees who are selected to be
Participants in the Plan as bonuses.
The maximum award under this Plan to any participant shall be 150% of
base salary, provided, however, that no participant may receive an award for any
performance period in excess of $1,500,000.
ARTICLE V
AWARD OF BONUSES
As soon as practicable after each fiscal year for which performance
objectives have, pursuant to Article IV, been established, the Committee shall
determine whether the Company and each Subsidiary attained the
previously-established performance objectives. Assuming such performance
objectives shall be attained, the Committee shall determine, in its sole and
exclusive discretion, whether any bonuses shall be awarded for such fiscal year.
Such bonuses shall be awarded as soon as practicable thereafter and the officers
who are determined to be entitled to receive such bonuses shall be promptly
notified of the award thereof.
ARTICLE VI
PAYMENT OF BONUSES
Any bonus or any portion of any bonus awarded to a Participant shall,
at the election of such Participant, be deferred and made subsequently payable
to such Participant and/or his beneficiary, as provided in Article VIII hereof.
In order to properly provide for timely elections as to the deferral of
receipt of bonuses, each eligible officer of the Company or Subsidiary eligible
to become a Participant in the Plan may elect by an instrument in writing, the
form for said written election being attached hereto and marked Exhibit "A" and
entitled "Election Regarding Deferral of Executive Bonus Awarded Pursuant to
Synovus Financial Corp. Executive Bonus Plan" on or before the 31st day of
December of the year preceding the fiscal year for which such bonus is to be
awarded, to have any percentage of any bonus which may be awarded to him for
such fiscal year paid to him in cash on the distribution date for such fiscal
year, with the balance being deferred and payable to him as provided in Article
VIII hereof. Said written forms of election shall be filed with the Committee.
ARTICLE VII
DEFERRED EXECUTIVE BONUS ACCOUNTS
There shall be established for each Participant who elects to defer
receipt of any portion of any bonus awarded to him an account to be designated
as such Participant's Deferred Executive Bonus Account to which amounts so
elected to be deferred shall be allocated. Interest, at a rate equal to the
average annual short-term prime rate as established by Columbus Bank and Trust
Company for each fiscal year and applied to the average balance in said Account
for said fiscal year, shall be credited to such Participants' Deferred Executive
Bonus Accounts on December 31st of each fiscal year until all amounts allocated
thereto have been distributed to such Participants or their beneficiaries as
provided in Article VIII hereof.
ARTICLE VIII
DISTRIBUTION AFTER PARTICIPANT'S DEFERRAL TERMINATION DATE
When a Participant's employment termination date shall occur, the
balance in such Participant's Deferred Executive Bonus Account shall be
distributed to such Participant or his beneficiary as provided hereinbelow:
(A) Distribution shall be made in one lump sum or in up
to 120 approximately equal and consecutive monthly
installments. The method of payment, lump sum or
installment, and, in the event the distribution is
determined to be made by installments, the number of
installments in which such distribution is to be
made, for each Participant shall be determined solely
and exclusively by the Committee.
(B) If a Participant's termination of employment occurs
by reason of his death (except by suicide) or total
disability, the lump sum payment or the first monthly
installment, provided for in paragraph (A)
hereinabove, shall be paid within 30 days after the
last day of the month in which the Participant's
termination of employment occurs.
(C) If a Participant's termination of employment with the
Company and/or Subsidiary is for a reason other than
death (except by suicide) or disability, the
distributions made pursuant to paragraph (A)
hereinabove shall commence at such time as shall be
determined by the Committee; PROVIDED, HOWEVER, that
in no event shall such distributions begin later than
the date upon which such Participant attains age
70 1/2, and PROVIDED FURTHER, HOWEVER, that if such
Participant dies or becomes totally disabled prior to
his attaining age 70 1/2, the distributions
to which such Participant would have been entitled to
receive under this paragraph shall commence to be
made within thirty (30) days after the last day of
the month in which such Participant's death or total
disability occurred.
(D) If a Participant shall cease to be an Employee of the
Company by reason of his death or if he shall die
after his employment termination date but prior to
his receipt of all distributions provided for herein,
all cash distributable hereunder, or the
undistributed balance thereof, shall be distributed
to such beneficiary or beneficiaries as he shall have
designated by an instrument in writing, the form for
said written designation being attached hereto and
marked Exhibit "B" and entitled "Beneficiary
Designation," filed with the Committee in the same
manner and at the same intervals as they would have
been made to the Participant had he continued to
live, or, in the absence of an effective Beneficiary
Designation, in a lump sum to the Participant's
estate.
ARTICLE IX
DISTRIBUTION IN THE EVENT OF SEVERE FINANCIAL HARDSHIP
In the event a Participant or any beneficiary of a Participant incurs
"severe financial hardship," the Committee may authorize the acceleration of the
payment of benefits hereunder to, and only to, the extent reasonably necessary
to eliminate such "severe financial hardship." The Committee possesses the sole
discretion as to the determination of the existence, in a particular factual
setting, of "severe financial hardship;" PROVIDED, HOWEVER, in the exercise of
such discretion, the Committee is charged with the responsibility of exercising
its discretion in a fair, reasonable and nondiscriminatory manner and
determinations of "severe financial hardship" shall be limited solely to factual
situations caused by accident, illness or other event beyond the control of the
Participant or his beneficiary, which shall not have been an event that such
Participant or his beneficiary would voluntarily incur.
ARTICLE X
NO ENTITLEMENT TO BONUS
Participants are entitled to a distribution under this Plan only upon
the approval of the award by the Committee and no Participant shall be entitled
to a bonus under the Plan due to the attainment of performance objectives. In
addition, any Participant not employed by the Company or a Subsidiary on
December 31 of any fiscal year will not be entitled to a bonus unless otherwise
---
determined by the Committee.
ARTICLE XI
TERMINATION OF PLAN
The Company Board of Directors may amend or terminate the Plan at any
time. Upon termination of the Plan, distributions in respect of credits to
Participants' Deferred Executive Bonus Accounts as of the date of termination
shall be made in the manner and at the time prescribed in Article VIII hereof.
ARTICLE XII
PARTICIPANT'S RIGHT OF ASSIGNABILITY
Except as provided in subsection (D) of Article VIII hereof, regarding
beneficiary designation, amounts credited to Deferred Executive Bonus Accounts
of Participants shall not be subject to assignment, pledge or other disposition,
nor shall such amounts be subject to garnishment, attachment, transfer by
operation of law, or any legal process.
ARTICLE XIII
GOVERNING LAW
The validity, construction, performance and effect of the Plan shall be
governed by Georgia law.
EXHIBIT "A"
ELECTION REGARDING DEFERRAL OF
BONUS AWARDED PURSUANT TO THE
SYNOVUS FINANCIAL CORP. EXECUTIVE BONUS PLAN
__________________("Employee"), in the event Employee is awarded a bonus
under the Synovus Financial Corp. Executive Bonus Plan (the "Plan") for the
period commencing January 1, 199_____, and ending December 31, 199_____, hereby
makes the following elections.
I. Employee elects to have____________percent of the bonus awarded to
him for the above elected period of participation in the Plan paid
in cash to him on the distribution date provided for under the
Plan.
II. Employee further elects to defer receipt of the balance of the
bonus awarded to him for the above elected period of
participation in the Plan, said balance to be payable to
Employee or his Beneficiary pursuant to the terms of Article
VIII of this Plan.
IN WITNESS WHEREOF, Employee has affixed his hand and seal, all as of
the_______day of ______________ , 199____ .
_________________________________(L.S.)
"EMPLOYEE"
Received and accepted as of the ________day of________ , 199_____ .
COMPENSATION COMMITTEE
By:________________________________
Secretary
EXHIBIT "B"
BENEFICIARY DESIGNATION
________________________("Participant") hereby designates the following
persons as beneficiaries entitled, upon the death of Participant, to any
payments in accordance with the terms and provisions of the Synovus Financial
Corp. Executive Bonus Plan ("Plan"), this beneficiary designation being made by
Participant pursuant to Article VIII of the Plan:
Primary Beneficiary:
Name:__________________________________________________________________
Address:_______________________________________________________________
It is understood and agreed that in the event of the death of the
above-named Primary Beneficiary, the Contingent Beneficiary (or Beneficiaries)
shall be entitled to receive the payments under the Plan the Primary Beneficiary
was receiving or would have received. In the event more than one Contingent
Beneficiary is designated, said Contingent Beneficiaries shall be entitled to
receive payments made pursuant to the Plan per capita:
Names: ____________________________________________________________
____________________________________________________________
Addresses: ____________________________________________________________
____________________________________________________________
This beneficiary designation supersedes all beneficiary designations,
if any, previously made by Participant and may be amended at any time by filing
another such beneficiary designation with the Compensation Committee.
IN WITNESS WHEREOF, Participant has affixed his hand and seal,
this _______ day of_________, 199______ .
____________________________(L.S.)
"PARTICIPANT"
Received this day of ___________day of__________ , 199________.
COMPENSATION COMMITTEE
By:_______________________________
Secretary
