DIRECTORS’ PROPOSAL TO APPROVE THE TOTAL SYSTEM SERVICES, INC. 2000 LONG-TERM INCENTIVE PLAN

THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE “FOR” THIS
PROPOSAL.
TSYS’ compensation program includes long-term performance awards under the Total System Services, Inc. 2000 Long-Term Incentive Plan (the “TSYS 2000 Plan”). The purpose of the TSYS Plan is to attract, retain, motivate and reward employees who make a significant contribution to TSYS’ long-term success and to enable such employees to acquire and maintain an equity interest in TSYS. Subject to approval by TSYS’ shareholders, compensation paid to TSYS’ employees pursuant to the TSYS 2000 Plan is intended, to the extent reasonable, to qualify for tax deductibility under Section 162(m) of the Internal Revenue Code of 1986.
Eligibility and Participation. Any employee of TSYS or its subsidiaries, excluding members of the Compensation Committee and any director who is not also an employee of TSYS or its subsidiaries, is eligible to be selected to participate in the TSYS 2000 Plan. Approximately 110 employees currently participate in the TSYS 2000 Plan. The Committee, as described below, has discretion to select participants from among eligible employees from year to year.
Shares Subject to the Plan. The aggregate number of shares of TSYS common stock which may be granted to participants pursuant to awards granted under the TSYS Plan may not exceed two million four hundred thousand (2,400,000).
Awards Under the TSYS 2000 Plan. Pursuant to the TSYS 2000 Plan, TSYS may grant long-term performance awards to participants in the form of stock options, stock appreciation rights (“SARs”), restricted stock or performance awards.
Stock Options. The Committee may grant options under the TSYS 2000 Plan in the form of qualified incentive stock options, nonqualified stock options or a combination thereof. Options may be granted either alone or in tandem with other awards granted under the TSYS 2000 Plan. Subject to the limits described herein, the Committee shall have discretion in determining the number of shares subject to options granted to each participant. The option price of nonqualified stock options may be equal to, or more or less than, one hundred percent (100%) of the fair market value of a share of TSYS common stock on the date the option is granted.
The option price of qualified incentive stock options shall be at least equal to one hundred percent (100%) of the fair market value of a share of TSYS common stock on the date the option is granted. Options shall expire at such times as the Committee determines at the time of grant; provided, however, that no option shall be exercisable later than the tenth anniversary of its grant.
Options granted under the TSYS 2000 Plan shall be exercisable at such times and subject to such restrictions and conditions as the Committee shall approve; provided that no option may be exercisable prior to six months following its grant. The option exercise price shall be payable in cash, by check, or by such other instrument as deemed acceptable by the Committee. Payment of the exercise price and any withholding tax due at exercise may also be made through any program approved by the Committee (including a broker-dealer cashless exercise program).
Options may only be transferred under the laws of descent and distribution and shall be exercisable only by the participant during his lifetime unless otherwise specified by the Committee at or after grant. The participant’s rights in the event of termination of employment shall be specified by the Committee at or after grant.
Subject to the terms of the TSYS 2000 Plan, the Committee may grant option price adjustment rights in conjunction with all or part of any option granted under the TSYS 2000 Plan, either at or after the time of grant of the option. Such adjustment rights are exercisable only at the same time and to the same extent as the corresponding option, and shall terminate upon the termination or exercise of such option. Upon exercise, the participant shall be entitled to have applied as a credit against the exercise price of the related option an amount equal to the total number of shares subject to the adjustment right (or a portion thereof as designated by the participant), multiplied by a fixed percentage of the fair market value of a share of TSYS common stock on a date designated by the Committee.
Stock Appreciation Rights. SARs granted under the TSYS 2000 Plan may be granted alone or in conjunction with all or part of any option granted under the TSYS 2000 Plan. Subject to the terms of the TSYS 2000 Plan, the Committee shall have discretion to determine the terms and conditions of any SAR granted under the TSYS 2000 Plan. With respect to an SAR granted in conjunction with an option, the grant price shall be equal to the option price of the related option, and such SAR shall terminate upon the termination or exercise of the related option. No SAR granted under the TSYS 2000 Plan may be exercisable prior to six months following its grant, except in the case of death (other than by suicide) or disability of the participant. The term of any SAR shall be determined by the Committee, provided that such term may not exceed ten years.
SARs granted alone may be exercised upon the terms and conditions as are imposed by the Committee. An SAR granted in conjunction with an option may be exercised only with respect to the shares of common stock of TSYS for which the related option is exercisable. SARs granted in connection with an incentive stock option shall expire no later than the expiration of such incentive stock option, the value of the payout for such SARs may be no more than one hundred percent (100%) of the difference between the incentive stock option option price and the fair market value of the shares subject to such incentive stock option at exercise and may be exercised only when the fair market value of the shares subject to the incentive stock option exceeds the incentive stock option option price.
Upon exercise, a participant will receive the difference between the fair market value of a share of common stock on the date of exercise and the grant price multiplied by the number of shares with respect to which the SAR is exercised. Payment due upon exercise may be in cash, in shares having a fair market value of the SAR being exercised or in a combination of cash and shares, as determined by the Committee. The Committee may impose such restrictions on the exercise of SARs as may be required to satisfy the requirements of Section 16 of the Securities Exchange Act. SARs may only be transferred under the laws of descent and distribution and shall be exercisable only by the participant during his lifetime.
Restricted Stock. Restricted stock may be granted in such amounts and subject to such terms and conditions as determined by the Committee. The Committee shall impose such conditions and/or restrictions on any shares of restricted stock as it deems advisable, including, but not limited to, a graduated vesting schedule and/or conditioning the grant of restricted stock on the attainment of performance goals. Each participant who is awarded restricted stock shall be issued a stock certificate in respect of such restricted stock, which shall be held in escrow by an escrow agent designated by the Committee, as provided under the TSYS 2000 Plan.
During the six month period following the date of grant of restricted stock, or such longer period as may be determined by the Committee, restricted stock may not be sold, transferred, pledged or assigned. Except as limited by the TSYS 2000 Plan, the Committee may provide for the lapse of such restrictions or may accelerate or waive such restrictions based on performance or such other factors as determined by the Committee.
Participants holding restricted stock shall have all of the rights of stockholders of TSYS, including the right to dividends, unless the Committee determines otherwise at the time of grant. Dividends or distributions credited during the restriction period and paid in shares shall be subject to the same restrictions as the shares of restricted stock with respect to which they were paid. All rights with respect to restricted stock shall be available only during a participant’s lifetime, and each restricted stock award agreement shall specify whether the participant has a right to receive unvested restricted shares in the event of termination of employment.
Performance Awards. Shares of stock and/or a payment in cash may be awarded under the TSYS 2000 Plan in the amounts and subject to the terms and conditions as determined by the Committee. The Committee may set performance objectives which, depending on the extent to which they are met, will determine the value of performance awards that will be paid out to participants. Participants shall receive payment of performance awards earned, in cash and/or shares of common stock, if the specified performance objectives have been obtained. The Committee may also establish a minimum level of performance below which no performance award may be payable.
In the event a participant’s employment is terminated by reason of death (other than by suicide), disability or retirement during a performance period, the participant shall receive a prorated payout of the performance award at the time and in the amount determined by the Committee. In the event employment is terminated for any other reason, the participant’s rights to any performance award shall be forfeited. Performance awards may not be sold, transferred, pledged, assigned or otherwise alienated or hypothecated, other than by will or by the laws of descent and distribution. A participant’s rights under the TSYS 2000 Plan shall be exercisable only by the participant during his lifetime.
Objective Performance Measures. Performance objectives applicable to awards granted under the TSYS 2000 Plan, as determined by the Committee, shall be chosen from among the following alternatives, unless and until the Committee proposes a change in such measures for shareholder vote or applicable tax and/or securities laws change to permit Committee discretion to alter such performance measures without obtaining shareholder approval: (i) total shareholder return; (ii) return on equity; (iii) earnings per share growth; and (iv) return on assets.
Maximum Amount Payable to Any Participant. The maximum number of shares which may be awarded in any calendar year to any one participant is five hundred thousand (500,000). The maximum cash amount which may be awarded in any calendar year to any participant is $1 million.
Adjustments in Connection With Certain Events. The TSYS 2000 Plan provides that the Committee shall make a substitution or adjustment in the number of shares reserved for issuance under the TSYS 2000 Plan in the number and option price of shares subject to outstanding options and in the number of shares subject to SARs, restricted stock, or performance awards, as it deems appropriate and equitable in connection with a change in corporate structure affecting TSYS’ stock.
Duration of the TSYS 2000 Plan. The TSYS 2000 Plan shall remain in effect from the date it is adopted by TSYS’ Board until the date terminated by the Committee or TSYS’ Board of Directors; provided, however, that no award shall be granted on or after the tenth anniversary of the TSYS 2000 Plan’s effective date; provided further, however, that no future awards will be granted to TSYS’ “covered employees,” as defined below, unless shareholder approval of the TSYS 2000 Plan is obtained.
Administration. The TSYS 2000 Plan will be administered by a committee of the Board of Directors of TSYS (the “Committee”) which will be comprised of no fewer than two members who must be “outside directors” within the meaning of Section 162(m). Initially, the administering committee shall be the Compensation Committee of TSYS’ Board.
The Committee shall have authority to: (i) determine individuals to whom awards will be granted; (ii) determine the terms and conditions upon which awards shall be granted, including any restriction based on performance or other factors; (iii) determine whether and to what extent awards shall be deferred; and (iv) make all other determinations, perform all other acts, exercise all other powers, and establish any other procedures it deems necessary, appropriate or advisable in administering the TSYS 2000 Plan and maintaining compliance with applicable law.
Amendment of the TSYS 2000 Plan. TSYS’ Board of Directors may amend, alter or discontinue the TSYS 2000 Plan at any time except that no such amendment, suspension or discontinuation of the TSYS 2000 Plan may affect an existing award under the TSYS 2000 Plan without the affected participant’s consent. In addition, no amendment, alteration or discontinuation shall be made, without the approval of shareholders, which would: (i) increase the total number of shares reserved under the TSYS 2000 Plan; (ii) decrease the option price of any option to less than one hundred percent (100%) of the fair market value of a share on the date of grant; (iii) change the participants or class of participants eligible to participate in the TSYS 2000 Plan; or (iv) materially increase the benefits accruing to participants.
Change in Control. In the event of a change in control of TSYS, as defined in the TSYS 2000 Plan, the vesting of any outstanding awards granted under the TSYS 2000 Plan shall be accelerated and all such awards shall be fully exercisable.
Federal Income Tax Consequences of the TSYS 2000 Plan. The income tax consequences under current federal tax law to participants and to TSYS and its subsidiaries of incentive compensation awarded under the TSYS 2000 Plan is generally as described below. Local and state tax authorities, however, may also tax incentive compensation awarded under the TSYS 2000 Plan.
Consequences to Participants. Generally, for federal income tax purposes, a participant will realize ordinary income and will incur tax liability upon receipt of the payment of an award under the TSYS 2000 Plan in an amount equal to such payment, if in cash, or the fair market value of any unrestricted shares of stock received. The tax consequences to participants of the individual types of awards which may be granted under the TSYS 2000 Plan are described below.

Qualified Incentive Stock Options. With respect to options which qualify as incentive stock options, a participant will not recognize ordinary income for federal income tax purposes at the time options are granted or exercised. If the participant disposes of shares acquired by exercise of an incentive stock option before the expiration of two years from the date the options are granted, or within one year after the issuance of shares upon exercise of the incentive stock option, the participant will recognize in the year of disposition: (a) ordinary income, to the extent that the lesser of either (1) the fair market value of the shares on the date of option exercise or (2) the amount realized on disposition exceeds the option price; and (b) capital gain (or loss), to the extent that the amount realized on disposition differs from the fair market value of the shares on the date of option exercise. If the shares are sold after expiration of these holding periods, the participant will realize capital gain or loss (assuming the shares are held as capital assets) equal to the difference between the amount realized on disposition and the option price.

Nonqualified Stock Options. With respect to options which do not qualify as incentive stock options, the participant will recognize no income upon grant of the option and, upon exercise, will recognize ordinary income to the extent of the difference between the amount paid by the participant for the shares and the fair market value of the shares on the date of option exercise. Upon a subsequent disposition of the shares received under the option, the participant will recognize capital gain or loss, as the case may be, to the extent of the difference between the fair market value of the shares at the time of exercise and the amount realized on the disposition (assuming the shares are held as capital assets).

Stock Appreciation Rights. Ordinary income will be recognized by a participant upon the exercise of an SAR, in an amount equal to the cash received or the fair market value of the shares received on the exercise date.

Restricted Stock. Participants holding restricted stock will recognize ordinary income in the year in which the restrictions lapse, in the amount of the fair market value of the shares as of the date of lapse of the restrictions, unless the participant elects to include the fair market value of the shares as of the date of grant in ordinary income at that time.

Performance Awards. Ordinary income will be recognized by a participant in the year in which it is received in an amount equal to the amount of the performance award on the date of receipt.

Consequences to TSYS and Its Subsidiaries. In general, TSYS and its subsidiaries will receive an income tax deduction at the same time and in the same amount as the amount which is taxable to the employee as compensation, except as provided below. To the extent a participant realizes capital gains, as described above, TSYS and its subsidiaries will not be entitled to any deduction for federal income tax purposes.
Under Section 162(m), compensation paid by a public company in excess of $1 million for any taxable year to “covered employees” generally is not deductible by the company or its affiliates for federal income tax purposes unless it is related to the performance of the company, is paid pursuant to a plan approved by shareholders of the company and meets certain other requirements.
Generally, “covered employees” is defined under Section 162(m) as any individual who is the chief executive officer or is among the four other highest paid executive officers named in the summary compensation table in the company’s proxy statement, other than the chief executive officer, as of the last day of the taxable year. It is anticipated that awards will qualify as performance based for purposes of Section 162(m), except for options subject to adjustment rights and restricted stock not subject to preestablished performance goals. TSYS does not presently anticipate making any such awards. However, TSYS reserves the ability to make awards which do not qualify for full deductibility under Section 162(m) if the Committee determines that the benefits of so doing outweigh full deductibility.

New Plan Benefits
The second column in the following table shows all grants of options of Synovus common stock to TSYS employees and officers under the Synovus 2000 Plan for fiscal year 1999. Although it is not anticipated that there will be any future grants of options under the TSYS 2000 Plan, the third column in the following table shows the last grant of options of TSYS common stock, which was made on November 3, 1997.

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