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:
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[ ] 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)
TOTAL SYSTEM SERVICES, INC.(R)
Richard W. Ussery March 12, 1999
Chairman of the Board
Dear Shareholder:
You are cordially invited to attend our Annual Meeting of Shareholders at
10:00 a.m. on Thursday, April 15, 1999, at The Columbus Museum, 1251 Wynnton
Road, Columbus, Georgia. Enclosed with this Proxy Statement are your proxy card
and the 1998 Annual Report.
We hope that you will be able to be with us and let us give you a review of
1998. 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 1998 a good year. We look forward to your
continued support in 1999 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)
TOTAL SYSTEM SERVICES, INC.(R)
NOTICE OF THE 1999 ANNUAL MEETING OF SHAREHOLDERS
The Annual Meeting of the Shareholders of Total System Services, Inc.(R)
will be held at 10:00 a.m. on Thursday, April 15, 1999, at The Columbus Museum,
1251 Wynnton Road, Columbus, Georgia for the following purposes:
(1) The election of four directors for a term of three years; and
(2) The transaction of any 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 11, 1999
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 12, 1999
WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING, PLEASE VOTE, DATE AND
SIGN THE ENCLOSED PROXY CARD AND RETURN IT PROMPTLY IN THE ENCLOSED POSTAGE-PAID
ENVELOPE.
TABLE OF CONTENTS
Voting Information.............................................................1
Election of Directors..........................................................2
Meetings and Committees of the Board...........................................4
Directors' Compensation........................................................5
Executive Officers.............................................................5
Stock Ownership of Directors and Executive Officers............................6
Executive Compensation.........................................................7
Stock Performance Graph.......................................................10
Compensation Committee Report on Executive Compensation.......................10
Compensation Committee Interlocks and
Insider Participation....................................................13
Transactions With Management..................................................13
Relationships Between Synovus, CB&T and
Certain of Synovus' Subsidiaries.........................................14
Section 16(a) Beneficial Ownership Reporting Compliance.......................17
Independent Auditors..........................................................17
General Information:
Financial Information....................................................18
Shareholder Proposals for the 2000 Proxy Statement.......................18
Director Nominees or Other Business for Presentation
at the Annual Meeting...............................................18
Solicitation of Proxies..................................................18
VOTING INFORMATION
PURPOSE
This Proxy Statement and the accompanying proxy card are being mailed to
TSYS shareholders beginning March 12, 1999. The TSYS Board of Directors is
soliciting proxies to be used at the 1999 Annual Meeting of TSYS Shareholders
which will be held on April 15, 1999, at 10:00 a.m., at The Columbus Museum,
1251 Wynnton Road, Columbus, Georgia. Proxies are solicited to give all
shareholders of record an opportunity to vote on matters to be presented at the
Annual Meeting. In the following pages of this Proxy Statement, you will find
information on matters to be voted upon at the Annual Meeting of Shareholders or
any adjournment of that meeting.
WHO CAN VOTE
All shareholders of record of TSYS Common Stock as of the close of business
on February 11, 1999 are entitled to vote. Shares can be voted at the meeting
only if the shareholder is present or represented by a valid proxy.
SHARES OUTSTANDING
A majority of the outstanding shares of TSYS Common Stock must be present,
either in person or represented by proxy, in order to conduct the Annual Meeting
of TSYS Shareholders. On February 11, 1999, 194,909,527 shares of TSYS Common
Stock were outstanding.
COLUMBUS BANK AND TRUST COMPANY
Columbus Bank and Trust Company(R)("CB&T") owned individually 157,455,980
shares, or 80.8%, of the outstanding shares of TSYS Common Stock on February 11,
1999. CB&T(R) is a wholly owned banking subsidiary of Synovus Financial
Corp.(R), a multi-financial services company having 270,805,035 shares of voting
common stock outstanding on February 11, 1999.
PROXY CARD
If you sign the proxy card but do not specify how you want your shares to
be voted, your shares will be voted by the individuals named on the card (your
"proxies") in favor of the election of all listed nominees. Your proxies will
vote at their discretion on any other matter that may properly come before the
meeting and is not listed on the proxy card.
VOTING OF SHARES
Each share of TSYS Common Stock represented at the Annual Meeting is
entitled to one vote on each matter properly brought before the meeting. All
shares entitled to vote and represented by properly executed proxies received
before the polls are closed at the Annual Meeting, and not revoked or
superseded, will be voted at the Annual Meeting in accordance with the
instructions indicated on those proxies.
TSYS DIVIDEND REINVESTMENT AND DIRECT STOCK PURCHASE PLAN
If you participate in this Plan, your proxy card represents shares held in
the Plan, as well as shares you hold directly in certificate form registered
in the same name.
REQUIRED VOTES--ELECTION OF DIRECTOR NOMINEES
Directors are elected by a plurality of the votes, which means the nominees
for the four director positions who receive the largest number of properly
executed votes will be elected as directors. Each share of Common Stock is
entitled to one vote for each of the four director nominees. Cumulative voting
is not permitted. Shares that are represented by proxies which are marked
"withhold authority" for the election of one or more director nominees will not
be counted in determining the number of votes cast for those persons.
TABULATION OF VOTES
Under certain circumstances, brokers are prohibited from exercising
discretionary authority for beneficial owners who have not returned proxies to
the brokers (so-called "broker non-votes"). In such cases, and in cases where
the shareholder abstains from voting on a matter, those shares will be counted
for the purpose of determining if a quorum is present but will not be included
in the vote totals with respect to those matters and, therefore, will have no
effect on the vote.
HOW YOU CAN VOTE
Vote your choices by marking the appropriate boxes on the enclosed proxy
card. Sign and return the proxy card promptly in the enclosed self-addressed
envelope. YOUR VOTE IS IMPORTANT. PLEASE RETURN YOUR MARKED PROXY CARD PROMPTLY
SO YOUR SHARES CAN BE REPRESENTED, EVEN IF YOU PLAN TO ATTEND THE MEETING IN
PERSON.
REVOCATION OF PROXY
If you vote by proxy, you may revoke that proxy at any time before it is
voted at the meeting. You can revoke your proxy by delivering to TSYS a proxy
card bearing a later date or by attending the meeting in person and casting a
ballot.
ELECTION OF DIRECTORS
NUMBER
The Board of Directors of TSYS consists of 12 members. As 18 board seats
have been authorized by TSYS' shareholders, TSYS has six directorships which
remain vacant. 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.
The Board is divided into three classes whose terms are staggered so that the
term of one class expires at each Annual Meeting of Shareholders. The terms of
office of the Class I directors expire at the 1999 Annual Meeting, the terms of
office of the Class II directors expire at the 2000 Annual Meeting and the terms
of office of the Class III directors expire at the 2001 Annual Meeting. Four
director nominees have been nominated for election as Class I directors at this
meeting. Proxies cannot be voted at the 1999 Annual Meeting for a greater number
of persons than the number of nominees named.
NOMINEES
The following nominees have been selected by the Board for submission to
the shareholders: Samuel A. Nunn, H. Lynn Page, Philip W. Tomlinson and
Richard W. Ussery, each to serve a three year term expiring at the Annual
Meeting in the year 2002.
The Board believes that each director nominee will be able to stand for
election. If any nominee becomes unable to stand for election, proxies in favor
of that nominee will be voted in favor of the remaining nominees and in favor of
any substitute nominee named by the Board. If you do not wish your shares voted
for one or more of the nominees, you may so indicate on the proxy card.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE "FOR"
EACH OF THE NOMINEES.
BOARD OF DIRECTORS
Following is the principal occupation, age and certain other information
for each director nominee and other directors serving unexpired terms.
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<TABLE>
<CAPTION>
TSYS Year
Director First
Classifi- Elected Principal Occupation
Name Age cation Director and Other Information
- ------------------------ ----- --------- --------- -------------------------------------------
<S> <C> <C> <C> <C>
James H. Blanchard<F1> 57 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> 60 II 1991 Partner, Bradley & Hatcher (Law Firm);
Director, Synovus Financial Corp.
Gardiner W. Garrard, Jr. 58 II 1982 President, The Jordan Company (Real
Estate Development); Director, Synovus
Financial Corp.
John P. Illges, III 64 II 1982 Senior Vice President and Financial
Consultant, The Robinson-Humphrey
Company, Inc. (Stockbroker); Director,
Synovus Financial Corp.
Mason H. Lampton 51 III 1986 Chairman of the Board and President,
The Hardaway Company (Construction Company);
Director, Synovus Financial Corp.
W. Walter Miller, Jr.<F3> 50 II 1993 Senior Vice President, Total System
Services, Inc.
Samuel A. Nunn<F4> 60 I 1997 Senior Partner, King & Spalding (Law
Firm); Director, The Coca-Cola Company,
General Electric Company, National Service
Industries, Inc., Scientific-Atlanta, Inc.
and Texaco Inc.
H. Lynn Page 58 I 1982 Director, Synovus Financial Corp.,
Columbus Bank and Trust Company and
Total System Services, Inc.
Philip W. Tomlinson<F5> 52 I 1982 President, Total System Services, Inc.
William B. Turner<F3> 76 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> 51 I 1982 Chairman of the Board and Chief
Executive Officer, Total System Services,
Inc.
James D. Yancey 57 III 1982 President and Chief Operating Officer,
Synovus Financial Corp.; Chairman of the Board,
Columbus Bank and Trust Company;
Director, Shoney's, Inc.
- -------
<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> 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>
MEETINGS AND COMMITTEES OF THE BOARD
BOARD OF DIRECTORS
The business affairs of TSYS are managed under the direction of the Board
of Directors in accordance with the Georgia Business Corporation Code, as
implemented by TSYS' Articles of Incorporation and bylaws. Members of
the Board are kept informed through reports routinely presented at Board and
committee meetings by the Chief Executive Officer and other officers, and
through other means.
BOARD AND COMMITTEE MEETINGS
The Board of Directors held six meetings in 1998. All directors attended at
least 80% of Board and committee meetings during 1998 except Messrs. Tomlinson
and Page, who each attended 67% of the meetings.
COMMITTEES OF THE BOARD
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. The following table shows
the membership of the various committees.
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<TABLE>
<CAPTION>
Executive Audit Compensation
- ---------- ----- -------------
<S> <C> <C>
James H. Blanchard, Chair Gardiner W. Garrard, Jr., Chair Mason H. Lampton, Chair
James D. Yancey Mason H. Lampton John P. Illges, III
Richard Y. Bradley John P. Illges, III
Gardiner W. Garrard, Jr.
Philip W. Tomlinson
William B. Turner
Richard W. Ussery
</TABLE>
Executive Committee. 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 1998, TSYS' Executive
Committee held three meetings.
Audit Committee. The primary functions to be engaged in by TSYS' Audit
Committee include: (i) annually recommending to TSYS' Board the independent
certified public accountants 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 1998, TSYS'
Audit Committee held four meetings.
Compensation Committee. 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 1998, TSYS' Compensation Committee
held four meetings.
DIRECTORS' COMPENSATION
COMPENSATION
During 1998, 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 received an
$800 fee for each board meeting from which their absence was excused and an $800
fee for one meeting without regard to the reason for their absence.
DIRECTOR STOCK PURCHASE PLAN
TSYS' Director Stock Purchase Plan 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 Director Stock Purchase
Plan, 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 Director Stock Purchase Plan are fully vested in, and may
request the issuance to them of, all shares of TSYS Common Stock purchased for
their benefit under the Plan.
EXECUTIVE OFFICERS
The following table sets forth the name, age and position with TSYS of each
executive officer of TSYS.
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<TABLE>
<CAPTION>
Name Age Position with TSYS
- ------------------------- --- ------------------------------------
<S> <C> <C>
James H. Blanchard 57 Chairman of the Executive Committee
Richard W. Ussery 51 Chairman of the Board
and Chief Executive Officer
Philip W. Tomlinson 52 President
William A. Pruett 45 Executive Vice President
James B. Lipham 50 Executive Vice President
and Chief Financial Officer
M. Troy Woods 47 Executive Vice President
G. Sanders Griffith, III 45 General Counsel and Secretary
</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.
STOCK OWNERSHIP OF DIRECTORS AND EXECUTIVE OFFICERS
The following table sets forth ownership of shares of TSYS Common Stock
by each director, by each executive officer named in the Summary Compensation
Table on page 7 and by all directors and executive officers as a group as of
December 31, 1998.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares of TSYS Shares of TSYS Percentage of
Common Stock Common Stock Total Outstanding
Beneficially Beneficially Shares Shares of
Owned with Owned with of TSYS TSYS Common
Sole Voting Shared Voting Common Stock Stock
and Investment and Investment Beneficially Beneficially
Power as of Power as of Owned as of Owned as of
Name 12/31/98 12/31/98 12/31/98<F1> 12/31/98
-------------------------- ------------------- -------------------- ---------------- -------------
<S> <C> <C> <C> <C>
James H. Blanchard 781,200 360,480 1,141,680 *
Richard Y. Bradley 21,329 5,000 26,329 *
Gardiner W. Garrard, Jr. 9,717 --- 9,717 *
John P. Illges, III 102,435 81,750 184,185 *
Mason H. Lampton 26,547 118,684<F2> 145,231 *
James B. Lipham 80,832 1,200 110,232 *
W. Walter Miller, Jr. 85,725 12,704 105,629 *
Samuel A. Nunn 1,933 750 27,683 *
H. Lynn Page 523,541 151,221<F3> 674,762 *
William A. Pruett 217,684 --- 238,684 *
Philip W. Tomlinson 596,808 59,796 698,604 *
William B. Turner 157,528 576,000 733,528 *
Richard W. Ussery 553,426 74,775 670,201 *
M. Troy Woods 68,691 --- 98,691 *
James D. Yancey 790,064 24,000 814,064 *
Directors and Executive
Officers as a group
(16 persons) 4,020,148 1,483,094 5,698,642 2.93
* Less than one percent of the outstanding shares of TSYS Common Stock.
- --------
<FN>
<F1> The totals shown for the following directors and executive officers of TSYS
include the number of shares of TSYS Common Stock that each individual has
the right to acquire within 60 days through the exercise of stock options:
Person Number of Shares
James B. Lipham 28,200
W. Walter Miller, Jr. 7,200
Samuel A. Nunn 25,000
William A. Pruett 21,000
Philip W. Tomlinson 42,000
Richard W. Ussery 42,000
M. Troy Woods 30,000
<F2> Includes 28,800 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.
<F3> Includes 55,575 shares of TSYS Common Stock held by a charitable foundation
of which Mr. Page is a trustee.
</FN>
</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 "Synovus Common Stock
Ownership of Directors and Management" on pages 14 and 15.
EXECUTIVE COMPENSATION
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 1998 $444,200 $276,250 -0- $ -0- 106,422 $116,712
Chairman of the Board 1997 414,225 257,806 -0- -0- 540,491 141,895
and Chief Executive 1996 391,725 491,363 -0- 316,187 65,780 137,152
Officer
Philip W. Tomlinson 1998 383,400 219,000 -0- -0- 75,750 97,145
President 1997 354,550 202,650 -0- -0- 505,715 115,674
1996 335,350 386,000 -0- 223,784 46,557 115,728
William A. Pruett 1998 224,750 134,850 -0- -0- 27,950 60,931
Executive Vice 1997 210,150 131,090 -0- -0- 241,518 73,417
President 1996 200,900 246,080 -0- 84,880 17,661 67,486
M. Troy Woods 1998 220,000 110,000 -0- -0- 26,718 55,190
Executive Vice 1997 194,375 102,187 -0- -0- 240,123 60,975
President 1996 179,375 184,375 -0- 75,792 15,770 53,175
James B. Lipham 1998 182,500 91,250 -0- -0- 22,182 46,034
Executive Vice President 1997 162,500 86,250 -0- -0- 234,980 51,716
and Chief Financial 1996 147,500 152,500 -0- 63,938 13,302 43,755
- --------------------
<FN>
<F1> Mr. Blanchard received no cash compensation from TSYS during 1998, other
than director fees.
<F2> Amount consists of base salary and director fees for Messrs. Ussery
and Tomlinson.
<F3> Bonus amount for 1998 includes a special recognition award of $5,000 for
Messrs. Pruett, Woods and Lipham.
<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 market value of award on date of grant. As of December
31, 1998, Messrs. Ussery, Tomlinson, Pruett, Woods and Lipham held 34,544,
24,449, 9,322, 4,731 and 3,991 restricted shares, respectively, with a
value of $842,010, $595,945, $227,224, $115,318 and $ 97,281,
respectively. On July 1, 1996, restricted stock was awarded in the amount
of 32,891, 23,279, 8,832, 7,884 and 6,651 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.
<F6> The 1998 amount consists of contributions or other allocations to defined
contribution plans of $27,200 for each executive; allocations pursuant to
defined contribution excess benefit agreements of $88,877, $69,300,
$33,293, $27,572 and $18,487 for each of Messrs. Ussery, Tomlinson, Pruett,
Woods and Lipham, respectively; premiums paid for group term life insurance
coverage of $510, $510, $438, $418 and $347 for each of Messrs. Ussery,
Tomlinson, Pruett, Woods and Lipham, respectively; and the economic benefit
of life insurance coverage related to split-dollar life insurance policies
of $107 and $116 for Messrs. Ussery and Tomlinson, respectively.
</FN>
</TABLE>
STOCK OPTION EXERCISES AND GRANTS
The following tables provide certain information regarding stock options
granted and exercised in the last fiscal year and the number and value of
unexercised options at the end of the fiscal year.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
OPTIONS/SAR GRANTS IN LAST FISCAL YEAR
Individual Grants
---------------------------------------------------------
% of Total Potential
Options/ Realized Value at
SARs Exercise Assumed Annual Rates of
Options/ Granted to or Stock Price Appreciation
SARs Employees Base For Option Term <F1>
Granted in Fiscal Price Expiration --------------------------
Name (#) Year ($/Share) Date 5%($) 10%($)
- ------------------- ----------- ------------- -------- -------------- --------- -------------
<S> <C> <C> <C> <C> <C> <C>
Richard W. Ussery 106,272<F2> 12.51% $20.83 01/12/08 $1,057,406 $2,531,399
150<F3> .018 22.00 06/01/06 1,575 3,774
Philip W. Tomlinson 75,600<F2> 8.90 20.83 01/12/08 752,220 1,800,792
150<F3> .018 22.00 06/01/06 1,575 3,774
William A. Pruett 27,800<F2> 3.27 20.83 01/12/08 276,610 662,196
150<F3> .018 22.00 06/01/06 1,575 3,774
M. Troy Woods 26,568<F2> 3.13 20.83 01/12/08 264,352 632,850
150<F3> .018 22.00 06/01/06 1,575 3,774
James B. Lipham 22,032<F2> 2.59 20.83 01/12/08 219,218 524,802
150<F3> .018 22.00 06/01/06 1,575 3,774
- ---------------
<FN>
<F1> 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.
<F2> Options to purchase Synovus Common Stock granted on January 13, 1998 at
fair market value to executives as part of the Synovus 1996 Long-Term
Incentive Plan. Options become exercisable on January 13, 2000 and are
transferable to family members.
<F3> Options to purchase Synovus Common Stock granted on June 2, 1998 at fair
market value to executives as part of the Synovus 1996 Long-Term Incentive
Plan. Options become exercisable upon the earlier of: (a) June 2, 2001; or
(b) the date the per share fair market value of Synovus Common Stock meets
or exceeds $44.
</FN>
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FY-END OPTION/SAR VALUES
Number of Securities Value of
Underlying Unexercised Unexercised In-the-Money
Shares Value Options/SARs at FY-End (#) Options/SARs at FY-End ($)<F1>
Acquired on Realized -------------------------- -----------------------------
Name Exercise (#) ($)<F1> Exercisable/Unexercisable Exercisable/Unexercisable
- ------------------- ------------ ----------- -------------------------- -----------------------------
<S> <C> <C> <C> <C>
Richard W. Ussery -0- -0- 233,060 / 226,913<F2> $3,903,365/ $1,099,686
-0- -0- 42,000 / 378,000<F3> 433,860/ 3,904,740
Philip W. Tomlinson 33,020 $611,342 131,923 / 161,465<F2> 2,125,678/ 782,399
-0- -0- 42,000 / 378,000<F3> 433,860/ 3,904,740
William A. Pruett -0- -0- 63,247 / 59,468<F2> 1,060,706/ 287,923
-0- -0- 21,000 / 189,000<F3> 216,930/ 1,952,370
M. Troy Woods -0- -0- 35,805 / 56,841<F2> 563,429/ 275,190
-0- -0- 30,000 / 189,000<F3> 410,430/ 1,952,370
James B. Lipham -0- -0- 32,103 / 47,162<F2> 508,781/ 228,267
-0- -0- 28,200 / 189,000<F3> 371,730/ 1,952,370
- ----------
<FN>
<F1> Market value of underlying securities at exercise or year-end, minus the
exercise or base price.
<F2> Options pertain to shares of Synovus Common Stock.
<F3> Options pertain to shares of TSYS Common Stock.
</FN>
</TABLE>
CHANGE IN CONTROL ARRANGEMENTS
Long-Term Incentive Plans. Under the terms of the TSYS Long-Term Incentive
Plan, which was adopted in 1992, and Synovus' Long-Term Incentive Plans, which
were adopted in 1992, 1994 and 1996, all awards become automatically vested in
the event of a change of control. Awards under the Plans may include stock
options, restricted stock, stock appreciation and performance awards. Messrs.
Ussery, Tomlinson, Pruett, Lipham and Woods each have restricted stock and stock
options under the Synovus/TSYS Long-Term Incentive Plans.
Change of Control Agreements. TSYS has entered into Change of Control
Agreements with Messrs. Ussery, Tomlinson, Pruett, Lipham and Woods, and certain
other officers. In the event of a Change of Control, as defined below, an
executive would receive the following:
* For Messrs. Ussery and Tomlinson, three times their current base
salary and bonus (bonus is defined as the average bonus over the past
three years measured as a percentage multiplied by the executive's
current base salary). Messrs. Pruett, Lipham and Woods would receive
two times their base salary and bonus, as defined above.
* Three years of medical, life, disability and other welfare benefits
(two years for Messrs. Pruett, Lipham and Woods).
* A pro rata bonus through the date of termination for the separation
year.
* A cash amount in lieu of a long-term incentive award for the year of
separation equal to 1.5 times the normal market grant, if the
executive received a long-term incentive award in the year of
separation, or 2.5 times the market grant if not.
In order to receive these benefits, an executive must be actually or
constructively terminated 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 under these agreements is
defined as (1) the acquisition 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 their replacements or additions, ceasing to comprise at least two-thirds
of the Board members, (3) a merger, consolidation, reorganization or sale of
Synovus' assets unless the new owners of Synovus own more than two-thirds of the
new company, no person owns more than 20% of the new company, and two-thirds of
the company's new Board members are prior Board members of Synovus, or (4) a
triggering event occurs as defined in the Synovus Rights Agreement. With respect
to TSYS, a Change of Control is generally defined the same 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 stock of TSYS are specifically excluded from the
Change of Control definition. In the event an executive is impacted by the
Internal Revenue Service excise tax that applies to certain Change of Control
arrangements, the executive would receive additional payments so that he or
she would be in the same position as if the excise tax did not apply. The
Change of Control Agreements do not provide for any retirement benefits or
perquisites.
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, 1993 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
1993 1994 1995 1996 1997 1998
<S> <C> <C> <C> <C> <C> <C>
TSYS $100 $131 $235 $415 $382 $546
S&P 500 $100 $101 $139 $171 $229 $294
S&P CS&S $100 $118 $166 $258 $360 $652
</TABLE>
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee ("Committee") of TSYS is responsible for
evaluating the compensation of senior management of TSYS and its subsidiaries
and TSYS Board members, as well as the compensation and other benefit plans in
which officers, employees and directors of TSYS and its subsidiaries
participate. The Committee has designed its compensation program to attract and
retain highly motivated and well-trained executives in order to create superior
shareholder value for TSYS shareholders.
Elements of Executive Compensation. The four elements of executive
compensation at TSYS are:
* Base Salary
* Annual Bonus
* Long-Term Incentives
* Other Benefits
The Committee believes that a substantial portion (though not a majority)
of an executive's compensation should be at risk based upon performance, both in
the short-term (through the annual bonus and the Synovus/TSYS Profit Sharing
Plan and the Synovus/TSYS 401(k) Savings Plan) and long-term (through long-term
incentives such as 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 under this
approach are not the same companies included in the peer group index appearing
in the Stock Performance Graph above. Each element of executive compensation is
discussed in detail below.
Base Salary. Base salary is an executive's annual rate of pay without
regard to any other elements of compensation. The Committee believes the base
salary of TSYS executives should reflect the outstanding stock performance of
TSYS over the past 10 years, which resulted in significant value for TSYS
shareholders. The Committee had difficulty, however, in obtaining appropriate
market data for determining the compensation of TSYS executives. Positions for
which market data could be obtained were targeted at the median level after the
Committee added a premium to size-based market data to reflect pay at companies
with similar strong stock performance. Positions for which market data could not
be obtained were determined based upon internal equity considerations. Based
solely upon these comparisons, the Committee increased Mr. Ussery's base salary
in 1998. The Committee also increased the base salaries of TSYS' other executive
officers in 1998 based solely upon these comparisons and internal equity
considerations, as described above.
Annual Bonus. The Committee awards annual bonuses to TSYS executives under
two different plans, the Synovus Executive Bonus Plan (which was approved by
TSYS shareholders) and the Synovus Incentive Bonus Plan. The Committee selects
the participants in each Plan from year to year. For 1998, the Committee
selected Mr. Ussery to participate in the Executive Bonus Plan while Messrs.
Tomlinson, Pruett, Woods and Lipham were selected to participate in the
Incentive Bonus Plan. Under the terms of the Plans, bonus amounts are paid as a
percentage of base pay based on the achievement of performance goals that are
established each year by the Committee. The performance goals may be chosen by
the Committee from among the following measurements:
* Number of cardholder, merchant and/or other customer accounts
processed and/or converted by TSYS;
* Successful negotiation or renewal of contracts with new and/or
existing customers by TSYS;
* Productivity and expense control;
* Stock price;
* Return on capital compared to cost of capital;
* Net income;
* Operating income;
* Earnings per share and/or earnings per share growth;
* Return on equity;
* Return on assets;
* Non-performing assets and/or loans as a percentage of total assets
and/or loans;
* Non-interest expense as a percentage of total expense;
* Loan charge-offs as a percentage of loans; and
* Asset growth.
The Committee established a payout matrix based on attainment of net income
goals during 1998 for Mr. Ussery and TSYS' other executive officers. The maximum
percentage payouts under the Plans for 1998 were 65% for Mr. Ussery, 60% for
Messrs. Tomlinson and Pruett and 50% for Messrs. Woods and Lipham. TSYS'
financial performance and each executive's individual performance can reduce the
bonus awards determined by the attainment of the goals, although this was not
the case for any of TSYS' executive officers. Because the maximum net income
target for 1998 under the Plans 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 under the
Plans' payout matrix.
Long-Term Incentives. The Committee has awarded both stock options and
restricted stock awards to executives. Because of the relatively low number of
publicly traded shares of TSYS, the Committee has awarded Synovus stock options
and restricted stock awards to TSYS executives, linking their interests to those
of Synovus and TSYS shareholders. Restricted stock awards are designed to focus
executives on the long-term performance of Synovus and TSYS. Stock options
provide executives with the opportunity to buy and maintain an equity interest
in Synovus and TSYS and to share in their capital appreciation. The Committee
has established a payout matrix for long-term grants that uses total shareholder
return 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 1998, total
shareholder return and peer comparisons were measured during the 1995 to 1997
performance period. Under the payout matrix, the Committee awarded Messrs.
Ussery, Tomlinson, Pruett, Woods and Lipham stock options of 106,422, 75,750,
27,950, 26,718 and 22,182, respectively.
Benefits. Executives receive other benefits that serve a different purpose
than the elements of compensation discussed above. In general, these benefits
either provide retirement income or protection against catastrophic events such
as illness, disability and death. Executives generally receive the same benefits
offered to the 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 an excess benefit plan which replaces 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 the performance of TSYS
because the contributions to the Plan, up to a maximum of 14% of an executive's
compensation, depends upon TSYS' profitability. For 1998, Mr. Ussery and TSYS'
other executive officers received a Plan contribution of 10.97% of their
compensation, based upon the Plan's profitability formula. The remaining
benefits provided to executives are primarily based upon the competitive
practices of similar companies.
The Internal Revenue Code limits 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 in excess
of $1 million, unless certain conditions are met. Because the Committee seeks to
maximize shareholder value, the Committee has taken steps to ensure that any
compensation paid to its executives in excess of $1 million is deductible. For
1998, Mr. Ussery would have been affected by this provision, but for the steps
taken by the Committee. The Committee reserves the ability to make awards which
do not qualify for full deductibility under the Internal Revenue Code, however,
if the Committee determines that the benefits of doing so outweigh full
deductibility.
The Committee believes that its executive compensation program serves the
best interests of the shareholders of TSYS. As described above, a substantial
portion of the compensation of TSYS' executives is directly related to TSYS'
performance. The Committee believes that the performance of TSYS to date
validates its compensation philosophy.
Mason H. Lampton
John P. Illges, III
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Mason H. Lampton and John P. Illges, III served as members of TSYS'
Compensation Committee during 1998. No member of the Committee is a current or
former officer or employee of TSYS or its subsidiaries.
TRANSACTIONS WITH MANAGEMENT
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.
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.
TSYS leases various properties in Columbus, Georgia from W.C. Bradley Co.
for office space and storage. The rent paid for the space in 1998, which is
approximately 71,915 square feet, is approximately $714,225. 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 CB&T and W.C.B. Air L.L.C. CB&T and W.C.B. Air are
parties to a Joint Ownership Agreement pursuant to which they jointly own or
lease aircraft. W.C. Bradley Co. owns all of the limited liability company
interests of W.C.B. Air. CB&T and W.C.B. Air have each agreed to pay fixed fees
for each hour they fly the aircraft owned and/or leased pursuant to the Joint
Ownership Agreeement. TSYS paid CB&T $1,328,693 for its use of the aircraft
during 1998, which was used by CB&T to satisfy its commitments under the Joint
Ownership Agreement. The charges payable by TSYS to CB&T in connection with its
use of this aircraft approximate charges 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, is an advisory 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. 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.
King & Spalding, a law firm located in Atlanta, Georgia, performed legal
services on behalf of TSYS during 1998. Samuel A. Nunn, a director of TSYS,
is a Senior Partner of King & Spalding.
For a description of certain transactions between TSYS and its affiliated
companies, upon whose Boards of Directors certain of TSYS' directors also serve,
see "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" on pages 16 and 17.
RELATIONSHIPS BETWEEN TSYS, SYNOVUS, CB&T AND CERTAIN OF SYNOVUS'
SUBSIDIARIES
BENEFICIAL OWNERSHIP OF TSYS COMMON STOCK BY CB&T
The following table sets forth 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, as of December 31, 1998.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Percentage of
Shares of Outstanding Shares of
TSYS Common Stock TSYS Common Stock
Name and Address of Beneficially Owned Beneficially Owned
Beneficial Owner as of 12/31/98 as of 12/31/98
- ------------------------ ------------------------ -----------------------------
<S> <C> <C>
Columbus Bank
and Trust Company 156,601,938<F1><F2> 80.7%
1148 Broadway,
Columbus, Georgia 31901
- ------------
<FN>
<F1> CB&T individually owns these shares.
<F2> As of December 31, 1998, Synovus Trust Company, a wholly owned trust
company subsidiary of CB&T, held in various fiduciary capacities a total of
1,374,779 shares (.71%) of TSYS Common Stock. Of this total, Synovus Trust
Company held 1,052,480 shares as to which it possessed sole voting power,
997,259 shares as to which it possessed sole investment power, 315,149
shares as to which it possessed shared voting power and 322,299 shares as
to which it possessed shared investment power. The other banking and trust
subsidiaries of Synovus held 750 shares as to which they possessed sole
voting and investment power and no shares as to which they possessed shared
voting or investment power. In addition, as of December 31, 1998, Synovus
Trust Company held in various agency capacities an additional 2,204,208
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 Company in various fiduciary and agency capacities.
</FN>
</TABLE>
CB&T, by virtue of its individual ownership of 156,601,938 shares, or
80.7%, of the outstanding shares of TSYS Common Stock on December 31, 1998 is
able to, and intends to, elect a majority of TSYS' Board of Directors. CB&T
presently controls TSYS.
INTERLOCKING DIRECTORATES OF TSYS, SYNOVUS AND CB&T
Seven of the twelve 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 and James D. Yancey. Mason H.
Lampton serves as an Advisory Director of CB&T and as a director of Synovus.
SYNOVUS COMMON STOCK OWNERSHIP OF DIRECTORS AND MANAGEMENT
The following table sets forth the number of shares of Synovus Common
Stock beneficially owned by TSYS' directors, by each executive officer named in
the Summary Compensation Table on page 7 and by all directors and executive
officers as a group as of December 31, 1998.
- --------------------------------------------------------------------------------
<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 12/31/98 12/31/98 12/31/98 12/31/98<F1> 12/31/98
- -------------------- -------------- ------------ --------------- ------------ ------------
<S> <C> <C> <C> <C> <C>
James H. Blanchard 1,565,234 --- 292,607 2,455,553 *
Richard Y. Bradley 20,357 131,495 --- 151,852 *
Gardiner W. Garrard, Jr. 203,665 1,363,262 --- 1,566,927 *
John P. Illges, III 296,403 512,455<F2> --- 808,858 *
Mason H. Lampton 79,268 290,951<F3> --- 370,219 *
James B. Lipham 3,375 --- 3,990 39,468 *
W. Walter Miller, Jr. 30,043 63,379 --- 103,750 *
Samuel A. Nunn --- --- --- --- ---
H. Lynn Page 840,821 11,515 --- 852,336 *
William A. Pruett 11,765 --- 9,317 84,329 *
Philip W. Tomlinson 30,849 --- 24,447 187,219 *
William B. Turner 72,294 30,382,576 --- 30,454,870 11.27
Richard W. Ussery 64,928 3,923 34,539 336,450 *
M. Troy Woods 2,102 --- 4,731 42,638 *
James D. Yancey 999,693 61,677 40,999 1,416,479 *
Directors and Executive
Officers as a group
(16 persons) 4,304,939 32,821,233 491,043 39,203,045 14.42
* Less than one percent of the outstanding shares of Synovus Common Stock.
- -------------------
<FN>
<F1> The totals shown for the following directors and executive officers of TSYS
include the number of shares of Synovus Common Stock that each individual
has the right to acquire within 60 days through the exercise of stock
options:
Person Number of Shares
James H. Blanchard 597,712
James B. Lipham 32,103
W. Walter Miller, Jr. 10,328
William A. Pruett 63,247
Philip W. Tomlinson 131,923
Richard W. Ussery 233,060
M. Troy Woods 35,805
James D. Yancey 314,110
<F2> Includes 62,667 shares of Synovus Common Stock held by a charitable
foundation of which Mr. Illges is a trustee.
<F3> Includes 264,687 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.
</FN>
</TABLE>
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 1998, TSYS provided bankcard data processing services to CB&T and
certain 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 1998, TSYS derived $4,225,439 in revenues from CB&T and certain
of Synovus' other banking subsidiaries from the performance of bankcard data
processing services and $175,801 in revenues from Synovus and its subsidiaries
for 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., a wholly owned subsidiary of Synovus, provides
various services to Synovus' subsidiary companies, including TSYS. TSYS and
Synovus Service Corp. are parties to Lease Agreements pursuant to which Synovus
Service Corp. leased from TSYS office space for lease payments aggregating
$26,169 during 1998 and TSYS leased from Synovus Service Corp. office space for
lease payments aggregating $27,690 during 1998. Synovus Service Corp. also paid
TSYS $199,492 during 1998 for data processing services. 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 Synovus Service Corp. are parties to
Management Agreements (having one year, automatically renewable, unless
terminated, terms), pursuant to which Synovus and Synovus Service Corp. provide
certain management services to TSYS. During 1998, 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 1998, TSYS paid Synovus and Synovus
Service Corp. management fees of $1,283,494 and $9,892,790, respectively.
Management fees are subject to future adjustments based upon charges at the time
by unrelated third parties for comparable services.
During 1998, Synovus Trust Company served as Trustee of various employee
benefit plans of TSYS. During 1998, TSYS paid Synovus Trust Company trustee's
fees under these plans of $258,184.
During 1998, Columbus Depot Equipment Company, a wholly owned subsidiary of
TSYS, and CB&T and 6 of Synovus' other subsidiaries were parties to Lease
Agreements pursuant to which CB&T and 6 of Synovus' other subsidiaries leased
from Columbus Depot Equipment Company computer related equipment for bankcard
and bank data processing services for lease payments aggregating $90,569. During
1998, Columbus Depot Equipment Company sold CB&T and certain of Synovus' other
subsidiaries computer related equipment for bankcard and bank data processing
services, and monitored such equipment, for payments aggregating $1,355. 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 1998, Synovus Technologies, Inc., a wholly owned subsidiary of
Synovus, paid TSYS $248,187 for data links, network services and other
miscellaneous items related to the data processing services which Synovus
Technologies, Inc. provides to its customers, which amount was reimbursed to
Synovus Technologies, Inc. by its customers. During 1998, Synovus Technologies,
Inc. paid TSYS $24,900, primarily for computer processing services. During 1998,
TSYS and Synovus Technologies, Inc. were parties to a Lease Agreement pursuant
to which TSYS leased from Synovus Technologies, Inc. portions of its office
building for lease payments aggregating $220,000. The charges for processing and
other services, and the terms of the Lease Agreement, are comparable to those
between unrelated third parties.
In January, 1999, TSYS acquired the assets used by CB&T in the provision of
collection, credit evaluation and customer service services to credit card
issuers in exchange for newly issued shares of TSYS Common Stock valued at
$20,070,000. The terms of the Asset Purchase and Exchange Agreement executed in
connection with the transaction are comparable to those between unrelated third
parties.
During 1998, 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 $18,411. During 1998, 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 1998, Synovus, CB&T and other Synovus subsidiaries paid to Columbus
Productions, Inc. and TSYS Total Solutions, Inc., wholly owned subsidiaries of
TSYS, an aggregate of $1,447,565 for printing and correspondence services. The
charges for these services are comparable to those between unrelated third
parties.
During 1998, TSYS and its subsidiaries were paid $2,342,416 of interest by
CB&T in connection with deposit accounts with, and commercial paper purchased
from, CB&T. The interest rates paid 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.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 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 Securities and Exchange Commission and the New York Stock Exchange.
Officers, directors and greater than ten percent shareholders are required by
Securities and Exchange Commission 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, 1998, all Section 16(a) filing requirements applicable
to its officers, directors, and greater than ten percent beneficial owners were
complied with, except that Mr. Page reported one transaction late on a Form 5
and Mr. Tomlinson reported one transaction late on a Form 4 and one transaction
late on a Form 5.
INDEPENDENT AUDITORS
On March 5, 1999, TSYS' Board of Directors appointed KPMG LLP as the
independent auditors to audit the financial statements of TSYS and its
subsidiaries for the fiscal year ending December 31, 1999. The Board of
Directors knows of no direct or material indirect financial interest by KPMG in
TSYS or of any connection between KPMG and TSYS in the capacity of promoter,
underwriter, voting trustee, director, officer, shareholder or employee.
Representatives of KPMG will be present at TSYS' 1999 Annual Meeting with
the opportunity to make a statement if they desire to do so and will be
available to respond to appropriate questions.
GENERAL INFORMATION
FINANCIAL INFORMATION
Detailed financial information for TSYS and its subsidiaries for its 1998
fiscal year is included in TSYS' 1998 Annual Report that is being mailed to
TSYS' shareholders together with this Proxy Statement.
SHAREHOLDER PROPOSALS FOR THE 2000 PROXY STATEMENT
Any shareholder satisfying the Securities and Exchange Commission
requirements and wishing to submit a proposal to be included in the Proxy
Statement for the 2000 Annual Meeting of Shareholders should submit the proposal
in writing to the Secretary, Total System Services, Inc., 901 Front Avenue,
Suite 301, Columbus, Georgia 31901. TSYS must receive a proposal by November 15,
1999 in order to consider it for inclusion in the Proxy Statement for the 2000
Annual Meeting of Shareholders.
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
45 days but not more than 90 days before March 12, 2000 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 the Secretary, Total
System Services, Inc., 901 Front Avenue, Suite 301, Columbus, Georgia 31901.
This requirement does not apply to the deadline for submitting shareholder
proposals for inclusion in the Proxy Statement (see "Shareholder Proposals for
the 2000 Proxy Statement" above), nor does it apply to questions a shareholder
may wish to ask at the meeting.
SOLICITATION OF PROXIES
The cost of soliciting proxies will be paid by TSYS. This solicitation is
being made by mail, but may also be made by telephone or in person by TSYS
officers and employees. TSYS will reimburse brokerage firms, nominees,
custodians, and fiduciaries for their out-of-pocket expenses for forwarding
proxy materials to beneficial owners.
The above Notice of Annual Meeting and Proxy Statement are sent by order of
the TSYS Board of Directors.
/s/Richard W. Ussery
Richard W. Ussery
Chairman of the Board
Total System Services, Inc.
March 12, 1999
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, 1999
SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF TSYS
The undersigned shareholder of Total System Services, Inc. hereby appoints
James B. Lipham and Dorenda K. Weaver, or an of them acting singly in the
absence of the other, proxies with full power of substitution, to vote all
shares of Common Stock of TSYS 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, 1999, 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 REVERSE AND RETURN PROMPTLY IN 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
For All With- For all
- ---------------------------------------- Nominees hold Except
TOTAL SYSTEM SERVICES, INC. 1.) To elect [ ] [ ] [ ]
- ---------------------------------------- Class I
Directors of TSYS.
Nominees:
RECORD DATE SHARES: Samuel A. Nunn, H. Lynn Page,
Philip W. Tomlinson and
Richard W. Ussery
Note: If you do not wish your
shares voted "For" a particular
nominee, mark the "For All Except"
box and strike a line through the
nominee's name in the list above.
Your shares will be voted for the
remaining nominee(s).
The undersigned hereby acknowledges
receipt of NOTICE of the ANNUAL
MEETING and the PROXY STATEMENT
and hereby revokes all Proxies
previously given by the undersigned
for the ANNUAL MEETING.
THE BOARD OF DIRECTORS RECOMMENDS
THAT SHAREHOLDERS VOTE FOR THE
PROPOSAL LISTED ABOVE.
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 on April
15, 1999.
Thank you in advance for your prompt consideration of these matters.
Sincerely,
Total System Services, Inc.
