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] No fee required.
[ ] 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:
__________________________________________________________________
TSYS(R)
Richard W. Ussery March 13, 1997
Chairman of the Board
Dear Shareholder:
The Annual Meeting of the Shareholders of Total System Services, Inc. will
be held on April 14, 1997, in the Dining Gallery of the Columbus, Georgia
Convention & Trade Center, 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
1996. 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 1996 a good year. We look forward to your
continued support in 1997 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
TSYS(R)
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To Be Held April 14, 1997
NOTICE IS HEREBY GIVEN that the Annual Meeting of the Shareholders of Total
System Services, Inc.(SM) ("TSYS(R)") will be held in the Dining Gallery of the
Columbus, Georgia Convention & Trade Center, on April 14, 1997, at 10:00 o'clock
A.M., E.T., for:
(1) The election of five nominees as Class II directors of TSYS to serve
until the 2000 Annual Meeting of Shareholders; and
(2) 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 12, 1997
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 13, 1997
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.
TSYS(R)
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
To Be Held April 14, 1997
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 14, 1997 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 II directors named
herein.
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 10, 1997.
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 12, 1997 are entitled to vote at the Annual Meeting or any
adjournment thereof. As of that date, there were 129,289,680 shares of TSYS
Common Stock outstanding and entitled to vote. TSYS owned 193,842 shares of TSYS
Common Stock on February 12, 1997 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' 1998 Annual Meeting, which
has been tentatively scheduled for April 13, 1998, must be received by TSYS no
later than November 13, 1997, and any such proposals, as well as any questions
related thereto, should be directed to Secretary, Total System Services, Inc.,
901 Front Avenue, Suite 301, Columbus, Georgia 31901.
1
D. Director Nominees or Other Business for Presentation at the Annual Meeting.
Shareholders who wish to present director nominations or other business at
the Annual Meeting are required to notify the Secretary of their intent at least
60 days but not more than 120 days before the meeting and the notice must
provide information as required in the bylaws. A copy of these bylaw
requirements will be provided upon request in writing to Secretary, Total System
Services, Inc., 901 Front Avenue, Suite 301, Columbus, Georgia 31901. This
requirement does not affect the deadline for submitting shareholder proposals
for inclusion in the Proxy Statement nor does it preclude discussion by any
shareholder of any business properly brought before the Annual Meeting.
E. Columbus Bank and Trust Company.
Columbus Bank and Trust Company(R) (CB&T") owned individually 104,401,292
shares, or 80.7%, of the outstanding shares of TSYS Common Stock on February 12,
1997. CB&T(R) is a wholly owned banking subsidiary of Synovus Financial Corp.(R)
("Synovus"), a multi-financial services company having 116,369,039 shares of
$1.00 par value voting common stock ("Synovus Common Stock") outstanding on
February 12, 1997.
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 14 members. TSYS has four
directorships which remain vacant, one of which positions was vacated by a Class
III director. 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 III
directorship would serve the remainder of the Class III term, which expires at
the 1998 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 1997 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' 1996 Annual Meeting, Class I directors were elected to
serve 3-year terms to expire at TSYS' 1999 Annual Meeting. The terms of office
of the Class II directors expire at TSYS' 1997 Annual Meeting.
(2) Nominees for Class II Directors and Vote Required.
TSYS' Board of Directors has selected five nominees which it proposes for
election to TSYS' Board as Class II directors. The five nominees for Class II
directors of TSYS will be elected to serve 3-year terms that will expire at
TSYS' 2000 Annual Meeting. The five nominees for Class II directors of TSYS are:
James H. Blanchard, Richard Y. Bradley, Gardiner W. Garrard, Jr., John P.
Illges, III and W. Walter Miller, Jr.
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 1997 Annual Meeting in order to
2
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' 1997 Annual Meeting in such manner as not to withhold
authority to vote for the election of any nominee for election as a Class II
director on TSYS' Board of Directors shall be voted "FOR" the election of the
five nominees for Class II directors on TSYS' Board named herein.
If any nominee for Class II director of TSYS becomes unavailable for any
reason before TSYS' 1997 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 II DIRECTORS ON TSYS' BOARD SET FORTH HEREIN.
B. Information Concerning Directors and Nominees for Class II 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 II 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 78 I 1987 Senior Partner, King & Spalding (Law Firm)
James H. Blanchard<F1> 55 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<F2> 58 II 1991 Partner, Bradley & Hatcher (Law Firm);
Director, Synovus Financial Corp.
Gardiner W. Garrard, Jr. 56 II 1982 President, The Jordan Company (Real
Estate Development); Director, Synovus
Financial Corp.
John P. Illges, III 62 II 1982 Senior Vice President and Financial
Consultant, The Robinson-Humphrey
Company, Inc. (Stockbroker); Director,
Synovus Financial Corp.
Mason H. Lampton 49 III 1986 President, The Hardaway Company
(Construction Company); Director,
Synovus Financial Corp.
W. Walter Miller, Jr.<F3> 48 II 1993 Senior Vice President, Total System
Services, Inc.
3
TSYS Year
Director First Principal Occupation
Classifi- Elected and Other Directorships
Name Age cation Director of Public Companies
- ------------------------ ------- ---------- ----------- -------------------------------------------------------
Samuel A. Nunn<F4> 58 I 1997 Senior Partner, King & Spalding (Law
Firm); Director, The Coca-Cola Company,
General Electric Company, National Service
Industries and Scientific-Atlanta, Inc.
H. Lynn Page 56 I 1982 Vice Chairman of the Board (Retired) and
Director, Synovus Financial Corp.,
Columbus Bank and Trust Company and
Total System Services, Inc.
Philip W. Tomlinson<F5> 50 I 1982 President, Total System Services, Inc.
William B. Turner<F3> 74 III 1982 Chairman of the Executive Committee,
Columbus Bank and Trust Company and
Synovus Financial Corp.; Advisory
Director, W.C. Bradley Co. (Metal
Manufacturer and Real Estate)
Richard W. Ussery<F6> 49 I 1982 Chairman of the Board and Chief
Executive Officer, Total System Services,
Inc.
George C. Woodruff, Jr. 68 III 1982 Real Estate and Personal Investments;
Director, Synovus Financial Corp. and
United Cities Gas Company
James D. Yancey 55 III 1982 Vice Chairman of the Board, Synovus
Financial Corp. and Columbus Bank and
Trust Company
<FN>
- -------------------
<F1> James H. Blanchard was elected Chairman of the Executive Committee of TSYS
in February, 1992. From 1982 until 1992, Mr. Blanchard served as Chairman
of the Board of TSYS.
<F2> Richard Y. Bradley formed Bradley & Hatcher in September, 1995. From 1991
until 1995, Mr. Bradley served as President of Bickerstaff Clay Products
Company, Inc.
<F3> Mr. Miller's spouse is the niece of William B. Turner.
<F4> Samuel A. Nunn was elected as a director of TSYS in January, 1997 by TSYS'
Board of Directors to fill the unexpired term of a vacant Class I board
seat. Mr. Nunn joined the law firm of King & Spalding in January, 1997.
From 1972 until 1997, Mr. Nunn represented the State of Georgia in the
United States Senate.
<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.
</FN>
</TABLE>
4
(2) TSYS Common Stock Ownership of Directors and Management.
The following table sets forth, as of December 31, 1996, the number of
shares of TSYS Common Stock beneficially owned by each of TSYS' directors and
TSYS' five 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 Total 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 12/31/96 12/31/96 12/31/96 12/31/96 12/31/96
-------------------------- ------------------- -------------------- ------------------- ---------------- -------------
<S> <C> <C> <C> <C> <C>
Griffin B. Bell 55,112 8,000 --- 63,112 .05%
James H. Blanchard 520,800 240,902 --- 761,702 .59
Richard Y. Bradley 13,770 --- --- 13,770 .01
Gardiner W. Garrard, Jr. 6,022 --- --- 6,022 .005
John P. Illges, III 122,294 --- --- 122,294 .09
Mason H. Lampton 17,521 68,440<F1> --- 85,961 .07
James B. Lipham 40,202 800 20,480 61,482 .05
W. Walter Miller, Jr. 35,742 8,251 20,480 64,473 .05
Samuel A. Nunn --- --- --- --- ---
H. Lynn Page 421,589 63,764 --- 485,353 .38
William A. Pruett 117,932 --- 25,600 143,532 .11
Philip W. Tomlinson 415,448 39,864 84,000 539,312 .42
William B. Turner 101,886 384,000 --- 485,886 .38
Richard W. Ussery 411,486 49,100 94,000 554,586 .43
George C. Woodruff, Jr. 76,092 --- --- 76,092 .06
M. Troy Woods 24,209 --- 21,440 45,649 .04
James D. Yancey 533,510 16,000 --- 549,510 .43
<FN>
- --------
<F1> Includes 19,200 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.
</FN>
</TABLE>
The following table sets forth information, as of December 31, 1996, with
respect to the beneficial ownership of TSYS Common Stock by all directors and
executive officers of TSYS as a group.
<TABLE>
<CAPTION>
Percentage of
Shares of Outstanding Shares of
TSYS Common Stock TSYS Common Stock
Name of Beneficially Owned Beneficially Owned
Beneficial Owner as of 12/31/96 as of 12/31/96
- ----------------------- ----------------------- -----------------------------
<S> <C> <C>
All directors
and executive
officers of TSYS 4,071,684 3.15%
as a group
(includes
18 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 IV(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 1996, TSYS' Board of Directors held five regular meetings and
two special meetings. During 1996, 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 Messrs. Bell and Tomlinson, who attended 71% and 57%,
respectively.
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. and Richard Y. Bradley. 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 1996, TSYS' Executive Committee did not meet.
Audit Committee. The members of TSYS' Audit Committee are: Gardiner W.
Garrard, Jr., Chairman, Mason H. Lampton and John P. Illges, III. 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 1996, TSYS'
Audit Committee held five meetings.
Compensation Committee. The members of the Compensation Committee of TSYS'
Board of Directors are: Gardiner W. Garrard, Jr., Chairman, and Mason H.
Lampton. 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 1996, TSYS' Compensation Committee held five meetings.
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 55 Chairman of the Executive Committee
Richard W. Ussery 49 Chairman of the Board
and Chief Executive Officer
Philip W. Tomlinson 50 President
William A. Pruett 43 Executive Vice President
James B. Lipham 48 Executive Vice President
and Chief Financial Officer
M. Troy Woods 45 Executive Vice President
G. Sanders Griffith, III 43 General Counsel and Secretary
</TABLE>
6
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. 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 four most highly compensated executive officers of TSYS.
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
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<F3> sation<F4> <F5> SARs sation<F6>
- ----------------------- ------ -------------- ----------- ------------ -------------- ------------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
Richard W. Ussery 1996 $391,725 $491,363 -0- $316,187 43,853 $137,152
Chairman of the Board 1995 331,400 204,750 -0- 222,015 38,987 102,439
and Chief Executive 1994 255,000 162,105 -0- 79,505 20,741 47,400
Officer
Philip W. Tomlinson 1996 335,350 386,000 -0- 223,784 31,038 115,728
President 1995 283,900 160,500 -0- 157,133 27,594 87,508
1994 221,350 129,830 -0- 56,252 14,675 42,602
William A. Pruett 1996 200,900 246,080 -0- 84,880 11,774 67,486
Executive Vice 1995 173,000 103,800 -0- 59,604 10,467 50,628
President 1994 138,500 88,100 -0- 22,494 5,868 29,428
M. Troy Woods 1996 179,375 184,375 -0- 75,792 10,513 53,175
Executive Vice 1995 150,000 59,375 -0- -0- 5,400 35,356
President 1994<F7> -- -- -- -- -- --
James B. Lipham 1996 147,500 152,500 -0- 63,938 8,868 43,755
Executive Vice President 1995 122,500 48,125 -0- -0- 5,400 30,302
and Chief Financial 1994 95,000 23,750 -0- -0- 4,800 22,774
Officer
<FN>
- --------------------
<F1> Mr. Blanchard received no cash compensation from TSYS during 1996, other
than director fees.
<F2> Amount consists of base salary and director fees for Messrs. Ussery and
Tomlinson.
<F3> Bonus amount for 1996 includes a special recognition award of $5,000 for
Messrs. Ussery, Tomlinson, Pruett, Woods and Lipham.
7
<F4> 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.
<F5> Amount consists of value of award, net of consideration paid by the
executive. As of December 31, 1996, Messrs. Ussery, Tomlinson, Pruett,
Woods and Lipham held 123,164, 104,640, 33,491, 24,944 and 23,436
restricted shares, respectively, with a value of $3,463,144, $2,920,560,
$941,499, $688,766 and $645,362, respectively. On July 1, 1996, restricted
stock was awarded in the amount of 14,618, 10,346, 3,925, 3,504 and 2,956
shares of Synovus Common Stock to Messrs. Ussery, Tomlinson, Pruett, Woods
and Lipham, respectively, with the following vesting schedule: 20% on July
1, 1997; 20% on July 1, 1998; 20% on July 1, 1999; 20% on July 1, 2000; and
20% on July 1, 2001. On September 5, 1995, restricted stock was awarded in
the amount of 12,996, 9,198 and 3,489 shares of Synovus Common Stock to
Messrs. Ussery, Tomlinson and Pruett, 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
6,914, 4,892 and 1,956 shares of Synovus Common Stock to Messrs. Ussery,
Tomlinson and Pruett, 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.
<F6> The 1996 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 $96,168, $74,424,
$36,922, $22,671 and $13,352 for each of Messrs. Ussery, Tomlinson, Pruett,
Woods and Lipham, respectively; premiums paid for group term life insurance
coverage of $720, $720, $564, $504 and $403 for each of Messrs. Ussery,
Tomlinson, Pruett, Woods and Lipham, respectively; the economic benefit of
life insurance coverage related to split-dollar life insurance policies of
$92 and $99 for Messrs. Ussery and Tomlinson, 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 $10,172 and $10,485 for Messrs. Ussery and Tomlinson,
respectively.
<F7> Disclosure is not required for 1994.
</FN>
</TABLE>
(2) Stock Option Exercises and Grants.
The following tables provide certain information regarding options to
purchase Synovus Common Stock granted and exercised in the last fiscal year and
the number and value of unexercised options at the end of the fiscal year.
<TABLE>
<CAPTION>
OPTIONS/SAR GRANTS IN LAST FISCAL YEAR
Individual Grants
- ------------------------------------------------------------------------------
% of Total Potential
Options/ Realized Value at
SARs Exercise Assumed Annual Rates of
Options/ Granted to or Stock Price Appreciation
SARs Employees Base For Option Term<F2>
Granted in Fiscal Price Expiration --------------------------
Name (#)<F1> Year ($/Share) Date 5%($) 10%($)
- ------------------- ----------- ------------- -------- -------------- --------- ----------------
<S> <C> <C> <C> <C> <C> <C>
Richard W. Ussery 43,853 3.44% $21.63 06/30/04 $453,001 $1,084,923
Philip W. Tomlinson 31,038 2.43% 21.63 06/30/04 320,623 767,880
William A. Pruett 11,774 0.92% 21.63 06/30/04 121,625 291,289
M. Troy Woods 10,513 0.82% 21.63 06/30/04 108,599 260,092
James B. Lipham 8,868 0.69% 21.63 06/30/04 91,606 219,394
<FN>
- ---------------
<F1> Options granted on July 1, 1996 at fair market value to executives in
tandem with restricted stock awards as part of the Synovus 1994 Long-Term
Incentive Plan. Options become exercisable on July 1, 1998.
<F2> The dollar gains under these columns result from calculations using the
identified growth rates and are not intended to forecast future price
appreciation of Synovus Common Stock.
</FN>
</TABLE>
8
<TABLE>
<CAPTION>
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FY-END OPTION/SAR VALUES
Number of Securities Value of
Underlying Unexercised Unexercised In-the-Money
Shares Value Options/SARs at FY-End (#) Options/SARs at FY-End ($)<F1>
Acquired on Realized -------------------------- -----------------------------
Name Exercise (#) ($)<F1> Exercisable/Unexercisable Exercisable/Unexercisable
- ------------------- ------------ ----------- -------------------------- -----------------------------
<S> <C> <C> <C> <C> <C> <C>
Richard W. Ussery -0- -0- 20,741 / 82,840 $427,783 / $1,121,262
Philip W. Tomlinson -0- -0- 14,675 / 58,632 302,672 / 793,600
William A. Pruett -0- -0- 5,868 / 22,241 121,028 / 301,036
M. Troy Woods -0- -0- 0 / 15,913 0 / 201,891
-0- -0- 0 / 6,000<F2> 0 / 143,250
James B. Lipham -0- -0- 0 / 14,268 0 / 184,627
-0- -0- 0 / 4,800<F2> 0 / 114,600
<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.
</FN>
</TABLE>
(3) Compensation of Directors.
Compensation. During 1996, 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 and Woods 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
9
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 with Messrs. Ussery and Tomlinson, 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. Under the Agreements with Messrs. Pruett,
Lipham and Woods, severance pay would equal two times current base salary and
bonus, as previously defined. Medical, life, disability and other welfare
benefits will be provided at the expense of TSYS for three years for Messrs.
Ussery and Tomlinson (two years for Messrs. Pruett, Lipham and Woods) with the
level of coverage being determined by 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.
10
(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, 1991 and reinvestment of all dividends).
[Omitted Stock Performance Graph is represented by the following table.]
<TABLE>
<CAPTION>
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN AMONG
TSYS, S&P 500 AND S&P COMPUTER SOFTWARE & SERVICES INDEX
1991 1992 1993 1994 1995 1996
<S> <C> <C> <C> <C> <C> <C>
TSYS $100 $114 $210 $276 $494 $872
S&P 500 $100 $108 $118 $120 $165 $203
S&P CS&S $100 $119 $131 $174 $242 $360
</TABLE>
(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
11
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. The Committee believes that the
base salary of TSYS executives should 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 has 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 1996. The Committee also
increased the base salaries of TSYS' other executive officers in 1996 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 Executive Bonus Plan and the Synovus
Incentive Bonus Plan (collectively, the "plans"). The Committee has the
discretion from year-to-year to select participants in the Synovus Executive
Bonus Plan, which was approved by the shareholders of TSYS in 1996. For 1996,
the Committee selected Mr. Ussery to participate in the Synovus Executive Bonus
Plan, while the Committee selected Messrs. Tomlinson, Pruett, Woods and Lipham
to participate in the Synovus Incentive Bonus Plan. Under the terms of the
plans, bonus amounts are paid as a percentage of base pay based on the
achievement of previously established performance goals. The performance
measures for such goals may be chosen by the Committee from among the following
for Synovus, any of its business segments and/or any of its business units: (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. For Mr. Ussery and TSYS'
other executive officers, the Committee established a payout matrix based upon
the attainment of net income targets during 1996. 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, although this was not the case for any
of TSYS' executive officers. The maximum percentage payouts under the plans for
1996 were 65% for Mr. Ussery, 60% for Messrs. Tomlinson and Pruett and 50% for
Messrs. Woods and Lipham. The Committee also established a special provision
that would double the bonus otherwise payable to TSYS' executive officers. This
provision was based upon the attainment of a "stretch" net income goal and the
attainment of a selected number of cardholder accounts. Because the two goals
under this special provision were 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.
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
12
of the value of TSYS and Synovus Common Stock. In 1994, 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 1996, total shareholder return and peer comparisons were measured during the
1993-1995 performance period. Applying the results of the 1993-1995 performance
period to the payout matrix, the Committee granted Mr. Ussery and TSYS' other
executive officers restricted stock awards and stock options in 1996.
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 1996, Mr. Ussery and TSYS' other executive officers received
a Plan contribution of 14% 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. Because the Committee seeks to maximize
shareholder value, the Committee has taken steps to ensure the deductibility of
compensation in excess of $1 million. For 1996, Mr. Ussery would have been
affected by this provision but for the steps taken by the Committee. However,
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.
Gardiner W. Garrard, Jr.
Mason H. Lampton
(7) Compensation Committee Interlocks and Insider Participation.
William B. Turner, Gardiner W. Garrard, Jr., George C. Woodruff, Jr. and
Mason H. Lampton served as members of TSYS' Compensation Committee during 1996.
No member of the Committee is a current or former officer or employee of TSYS or
its subsidiaries.
During 1996, Mr. Turner was 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 1996, which is approximately 71,915
square feet, is approximately $688,403. The lease agreements were made on
substantially 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
13
for each hour they fly the aircraft owned and/or leased by B&C Company. TSYS
paid CB&T $600,953 for its use of the B&C Company aircraft during 1996, which
$600,953 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 and Chairman of the Executive Committee of CB&T and Synovus, was an
officer, director and shareholder of W.C. Bradley Co. during 1996. 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, Chairman of the Board 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. TSYS leases
from The Jordan Company approximately 10,000 square feet of office space in
Columbus, Georgia for $5,900 per month, which lease expires on September 30,
1999. The lease was made on substantially the same terms as those prevailing at
the time for leases of comparable property between unrelated third parties.
During 1996, The Jordan Company received payments from a third party lessor of
$116,440 in connection with its representation of TSYS as leasing agent in
securing office space in Atlanta, Georgia. The 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. 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.
(8) Transactions with Management.
During 1996, TSYS paid to Communicorp, Inc. an aggregate of $504,389. 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.
King & Spalding, a law firm located in Atlanta, Georgia, performed legal
services on behalf of TSYS during 1996. Griffin B. Bell and Samuel A. Nunn,
directors of TSYS, are Senior Partners of King & Spalding.
Bradley & Hatcher, a law firm located in Columbus, Georgia, was retained by
TSYS in 1996 to perform legal services on its behalf. Richard Y. Bradley, a
director of Synovus, CB&T and TSYS, is a partner of Bradley and Hatcher.
For information about transactions with companies that are affiliates of
William B. Turner and Gardiner W. Garrard, Jr., directors of TSYS, see Section
III (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 IV(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."
14
IV. 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, 1996, 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>
<CAPTION>
Percentage of
Shares of Outstanding Shares of
TSYS Common Stock TSYS Common Stock
Name and Address Beneficially Owned Beneficially Owned
Beneficial Owner as of 12/31/96 as of 12/31/96
- ------------------------ ------------------------ -----------------------------
<S> <C> <C>
Columbus Bank
and Trust Company 104,401,292<F1><F2> 80.7%
1148 Broadway,
Columbus, Georgia 31901
<FN>
- ------------
<F1> CB&T individually owns these shares.
<F2> As of December 31, 1996, Synovus Trust Company, a wholly owned trust
company subsidiary of CB&T ("Synovus Trust"), held in various fiduciary
capacities a total of 743,852 shares (.57%) of TSYS Common Stock. Of this
total, Synovus Trust held 569,414 shares as to which it possessed sole
voting power, 580,570 shares as to which it possessed sole investment power
and 163,282 shares as to which it possessed shared voting and investment
power. In addition, as of December 31, 1996, Synovus Trust held in various
agency capacities an additional 1,291,408 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.
</FN>
</TABLE>
CB&T, by virtue of its individual ownership of 104,401,292 shares, or
80.7%, of the outstanding shares of TSYS Common Stock on December 31, 1996 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 fourteen 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, Gardiner W. Garrard, Jr., John
P. Illges, III, H. Lynn Page, William B. Turner, George C. Woodruff, Jr., and
James D. Yancey. 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, 1996, the number of
shares of Synovus Common Stock beneficially owned by TSYS' directors and TSYS'
five most highly compensated executive officers.
15
<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 12/31/96 12/31/96 12/31/96 12/31/96 12/31/96
- ----------------------- ------------- ------------ -------------- ------------ ------------
<S> <C> <C> <C> <C> <C>
Griffin B. Bell 18,857 10,000 --- 28,857 .02%
James H. Blanchard 720,749<F1> 4,460 164,598 889,807 .76
Richard Y. Bradley 8,133 56,221 --- 64,354 .06
Gardiner W. Garrard, Jr. 88,481 635,938 --- 724,419 .62
John P. Illges, III 247,356 116,445<F2> --- 363,801 .31
Mason H. Lampton 77,462 128,693<F3> --- 206,155 .18
James B. Lipham 1,080 --- 2,956 4,036 .003
W. Walter Miller, Jr. 17,668<F4> 28,334 --- 46,002 .04
Samuel A. Nunn --- --- --- --- ---
H. Lynn Page 373,688 5,118 --- 378,806 .33
William A. Pruett 7,347<F5> --- 7,891 15,238 .01
Philip W. Tomlinson 18,611<F6> --- 20,640 39,251 .03
William B. Turner 41,649 13,503,372<F7> --- 13,545,021 11.64
Richard W. Ussery 36,229<F8> 1,744 29,164 67,137 .06
George C. Woodruff, Jr. 56,605 30,000<F9> --- 86,605 .07
M. Troy Woods --- --- 3,504 3,504 .003
James D. Yancey 453,585<F10> 27,412 34,615 515,612 .44
<FN>
- -------------------
<F1> Includes 38,151 shares of Synovus Common Stock with respect to which Mr.
Blanchard has options to acquire.
<F2> Includes 27,852 shares of Synovus Common Stock held by a charitable
foundation of which Mr. Illges is a trustee.
<F3> Includes 117,639 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.
<F4> Includes 4,500 shares of Synovus Common Stock with respect to which Mr.
Miller has options to acquire.
<F5> Includes 5,868 shares of Synovus Common Stock with respect to which Mr.
Pruett has options to acquire.
<F6> Includes 14,675 shares of Synovus Common Stock with respect to which Mr.
Tomlinson has options to acquire.
<F7> Includes 1,141,425 shares held by a charitable foundation of which Mr.
Turner is a trustee.
<F8> Includes 20,741 shares of Synovus Common Stock with respect to which Mr.
Ussery has options to acquire.
<F9> Includes 30,000 shares held by a charitable foundation of which Mr.
Woodruff is a trustee.
<F10>Includes 24,588 shares of Synovus Common Stock with respect to which Mr.
Yancey has options to acquire.
</FN>
</TABLE>
16
The following table sets forth information, as of December 31, 1996, with
respect to the beneficial ownership of Synovus Common Stock by all directors and
executive officers of TSYS as a group.
<TABLE>
<CAPTION>
Percentage of
Shares of Outstanding Shares of
Synovus Common Stock Synovus Common Stock
Name of Beneficially Owned Beneficially Owned
Beneficial Owner as of 12/31/96 as of 12/31/96
- ------------------------ ----------------------- -----------------------------
<S> <C> <C>
All directors
and executive
officers of TSYS as a 17,095,947 14.69%
group (includes 18
persons)
</TABLE>
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 1996, TSYS provided bankcard data processing services to CB&T and 29
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 1996, TSYS derived $1,809,847 in revenues from CB&T and 29 of Synovus'
other banking subsidiaries from the performance of bankcard data processing
services and $128,411 in revenues from Synovus and its subsidiaries from the
performance of other data processing services. TSYS' charges to CB&T and
Synovus' other subsidiaries for bankcard and other data processing services are
comparable to, and are determined on the same basis as, charges by TSYS to
similarly situated unrelated third parties.
Synovus Service Corp. ("SSC"), a wholly owned subsidiary of Synovus,
provides various services to Synovus' subsidiary companies, including TSYS. TSYS
and SSC are parties to Lease Agreements pursuant to which SSC leased from TSYS
office space for lease payments aggregating $107,449 during 1996, and TSYS
leased from SSC office space for lease payments aggregating $34,472 during 1996.
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 SSC are parties to Management Agreements
(having one year, automatically renewable, unless terminated, terms), pursuant
to which Synovus and SSC provide certain management services to TSYS. During
1996, 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
1996, TSYS paid Synovus and SSC management fees of $1,079,706 and $8,583,648,
respectively. Management fees are subject to future adjustments based upon
charges at the time by unrelated third parties for comparable services.
During 1996, Synovus Trust Company served as Trustee of various employee
benefit plans of TSYS. During 1996, TSYS paid Synovus Trust Company trustee's
fees under these plans of $151,525.
During 1996, Columbus Depot Equipment Company ("CDEC"), a wholly owned
subsidiary of TSYS, and CB&T and 25 of Synovus' other subsidiaries were parties
to Lease Agreements pursuant to which CB&T and 25 of Synovus' other subsidiaries
leased from CDEC computer related equipment for bankcard and bank data
processing services for lease payments aggregating $152,262. During 1996, CDEC
sold CB&T and certain of Synovus' other subsidiaries computer related equipment
for bankcard and bank data processing services for payments aggregating $23,073.
In addition, CDEC was paid $15,375 by CB&T and certain of Synovus' other
subsidiaries for monitoring such 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 1996, Synovus Data Corp., a wholly owned subsidiary of Synovus, paid
TSYS $303,554 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
17
Synovus Data Corp. by its customers. During 1996, Synovus Data Corp. paid TSYS
$31,825, primarily for computer processing services. During 1996, 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 aggregating $240,000. The charges for processing and other services,
and the terms of the Lease Agreement, are comparable to those between unrelated
third parties.
During 1996, 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 $11,628. During 1996, TSYS and CB&T were also
parties to a Lease Agreement pursuant to which TSYS leased 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 1996, Synovus, CB&T and other Synovus subsidiaries paid to Columbus
Productions, Inc. and Lincoln Marketing, Inc., wholly owned subsidiaries of
TSYS, an aggregate of $753,065 for printing and correspondence services. The
charges for these services are comparable to those between unrelated third
parties.
During 1996, TSYS purchased 35,349 shares of Synovus Common Stock from
Synovus for $764,422 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.
During 1996, TSYS and its subsidiaries were paid $1,392,543 of interest by
CB&T in connection with deposit accounts with, and commercial paper purchased
from, CB&T. These interest rates are comparable to those provided for between
unrelated third parties.
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.
V. SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
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, 1996, all Section 16(a) filing requirements applicable
to its officers, directors, and greater than ten percent beneficial owners were
complied with, except that Mr. Woodruff reported six transactions late on a Form
5, Mr. Turner reported seven transactions late on a Form 5, and Mr. Page
reported one transaction late on a Form 5.
VI. INDEPENDENT AUDITORS
On February 28, 1997, 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, 1997. 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' 1997
Annual Meeting with the opportunity to make a statement if they desire to do so
and will be available to respond to appropriate questions.
18
VII. FINANCIAL INFORMATION WITH REFERENCE TO TSYS CONTAINED IN TSYS' 1996
ANNUAL REPORT
Detailed financial information for TSYS and its subsidiaries for its 1996
fiscal year is included in TSYS' 1996 Annual Report that is being mailed to
TSYS' shareholders together with this Proxy Statement.
VIII. 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' 1997 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' 1997 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 13, 1997
19
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 14, 1997
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 M. Modak 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 14th day of April, 1997, 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 matter
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 THE PROPOSAL LISTED HEREIN.
PLEASE VOTE, DATE AND SIGN ON THE REVERSE SIDE AND RETURN PROMPTLY USING THE
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
TOTAL SYSTEM SERVICES, INC. 1.) To elect [ ] [ ] [ ]
- ---------------------------------------- Class II
Directors of TSYS.
Nominees:
RECORD DATE SHARES: James H. Blanchard, Richard Y.
Bradley, Gardiner W. Garrard, Jr.,
John P. Illges, III, and W. Walter
Miller, Jr.
Instruction: To withhold authority
to vote for any individual nominee
for Class II director of TSYS, mark
the "For All Except" box and strike
a line through the nominee's name
in the list above.
The undersigned hereby acknowledges
receipt of NOTICE of said ANNUAL
MEETING and said PROXY STATEMENT
and hereby revokes all Proxies
heretofore given by the undersigned
for said ANNUAL MEETING.
THE BOARD OF DIRECTORS RECOMMENDS
THAT SHAREHOLDERS VOTE FOR THE
PROPOSAL LISTED HEREIN.
Please be sure to
sign and date this Proxy.[Date: ] Mark box at right [ ]
Shareholder sign here[ ] if an address change or
Co-owner sign here[ ] comment has 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 this proxy card to indicate how your shares will 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
14, 1997.
Thank you in advance for your prompt consideration of these matters.
Sincerely,
Total System Services, Inc.
