SCHEDULE 14A
INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Exchange Act of 1934 (Amendment No. )
| Filed by the Registrant þ | ||
| Filed by a Party other than the Registrant o | ||
| Check the appropriate box: |
| þ Preliminary Proxy Statement | ||
| o Confidential, for | ||
| o Definitive Proxy Statement | ||
| o Definitive Additional Materials | ||
| o Soliciting Material Pursuant to |
Synovus Financial Corp.
(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):
| Payment of Filing Fee (Check the appropriate box): | ||
| þ No fee required. | ||
| o Fee computed on table below per Exchange Act Rules 14a-6(i)(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 | |||
| 4) Proposed maximum aggregate value of transaction: | |||
| 5) Total fee paid: | |||
| o Fee paid previously with preliminary materials. | |||
| o 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: | |||
Richard E. Anthony
Chief Executive Officer
March 24, 2006
23, 2007
Dear Shareholder:
You are cordially invited to attend our Annual Meeting of Shareholders at 10:00 a.m. on Thursday,Wednesday, April 27, 2006,25, 2007, at the RiverCenter for the Performing Arts, 900 Broadway, Columbus, Georgia 31901. Enclosed with this Proxy Statement are your proxy card and the 20052006 Annual Report.
We hope that you will be able to be with us and let us give you a review of 2005.2006. If you are unable to attend the meeting, you can listen to it live and view the slide presentation over the Internet. You can access the meeting by going to our website at www.synovus.com. Additionally, we will maintain copies of the slides and audio of the presentation to the 20062007 Annual Meeting on the website for reference after the meeting.
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 vote promptly.
Thank you for helping us make 20052006 a good year. We look forward to your continued support in 20062007 and another good year.
Sincerely yours,
Richard E. Anthony
 | |
| Synovus Financial Corp. | • | Post Office Box 120 | • | Columbus, Georgia31902-0120 |
SYNOVUS®
NOTICE OF THE 20062007 ANNUAL MEETING OF SHAREHOLDERS
| TIME | 10:00 a.m. | ||
Wednesday, April | |||
| PLACE | RiverCenter for the Performing Arts | ||
900 Broadway | |||
Columbus, Georgia 31901 | |||
| ITEMS OF BUSINESS | (1) | To elect | |
| (2) | To | ||
| (3) | |||
| To ratify the appointment of KPMG LLP as Synovus’ independent auditor for the year | |||
| (4) To consider a shareholder proposal regarding director election by majority vote. | |||
| (5) To transact such other business as may properly come before the meeting and any adjournment thereof. | |||
| WHO MAY VOTE | You can vote if you were a shareholder of record on February | ||
| ANNUAL REPORT | A copy of the Annual Report is enclosed. | ||
| PROXY VOTING | Your vote is important. Please vote in one of these ways: | ||
| (1) | Use the toll-free telephone number shown on the proxy card; | ||
| (2) | Visit the website listed on your proxy card; | ||
| (3) | Mark, sign, date and promptly return the enclosed proxy card in the postage-paid envelope provided; or | ||
| (4) | Submit a ballot at the Annual Meeting. | ||
 | |
G. Sanders Griffith, III
Secretary
Columbus, Georgia
March 24, 200623, 2007
YOUR VOTE IS IMPORTANT. WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING, PLEASE VOTE YOUR SHARES PROMPTLY.
TABLE OF CONTENTS
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| 4 | |||||
| 14 | |||||
| 20 | |||||
| Shareholder Proposal to be Voted On: | |||||
| 21 | |||||
| 23 | |||||
| 29 | |||||
| 39 | |||||
| A-1 | |||||
| B-1 | |||||
PROXY STATEMENT
VOTING INFORMATION
VOTING INFORMATION
Purpose
This Proxy Statement and the accompanying proxy card are being mailed to Synovus shareholders beginning on or about March 24, 2006.23, 2007. The Synovus Board of Directors is soliciting proxies to be used at the 20062007 Annual Meeting of Synovus Shareholders which will be held on April 27, 2006,25, 2007, at 10:00 a.m., at the RiverCenter for the Performing Arts, 900 Broadway, 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
You are entitled to vote if you were a shareholder of record of Synovus stock as of the close of business on February 21, 2006.20, 2007. Your shares can be voted at the meeting only if you are present or represented by a valid proxy.
Quorum and Shares Outstanding
A majority of the votes entitled to be cast by the holders of the outstanding shares of Synovus stock must be present, either in person or represented by proxy, in order to conduct the Annual Meeting of Synovus Shareholders. On February 21, 2006, [ ]20, 2007, shares of Synovus stock were outstanding.
Proxy Card
The Board has designated two individuals to serve as proxies to vote the shares represented by proxies at the Annual Meeting of Shareholders. If you properly submit a proxy but do not specify how you want your shares to be voted, your shares will be voted by the designated proxies in accordance with the Board’s recommendations as follows:
“FOR:”
| • | The election of all the director nominees; | |
| • | The | |
| • | The ratification of the appointment of KPMG LLP as Synovus’ independent auditor for the year |
and “AGAINST:”
| • | The shareholder proposal regarding director election by majority vote. |
The designated proxies will vote in their discretion on any other matter that may properly come before the meeting. At the date the Proxy Statement went to press, we did not anticipate that any other matters would be raised at the Annual Meeting.
Voting of Shares
Holders of Synovus stock are entitled to ten votes on each matter submitted to a vote of shareholders for each share of Synovus stock owned on February 21, 200620, 2007 which: (i) has had the same owner since February 21, 2002;20, 2003; (ii) was acquired by reason of participation in a dividend reinvestment plan offered by Synovus and is held by the same owner who acquired it under such plan; (iii) is held by the same owner to whom it was issued as a result of an acquisition of a
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company or business by Synovus where the resolutions adopted by Synovus’ Board of Directors approving the acquisition specifically grant ten votes per share; (iv) was acquired under any employee, officerand/or director benefit plan maintained for one or more employees, officers
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and/or directors of Synovusand/or its subsidiaries, and is held by the same owner for whom it was acquired under any such plan; (v) is held by the same owner to whom it was issued by Synovus, or to whom it was transferred by Synovus from treasury shares, and the resolutions adopted by Synovus’ Board of Directors approving such issuanceand/or transfer specifically grant ten votes per share; (vi) was acquired as a direct result of a stock split, stock dividend or other type of share distribution if the share as to which it was distributed was acquired prior to, and has been held by the same owner since, February 21, 2002;20, 2003; (vii) has been owned continuously by the same shareholder for a period of 48 consecutive months prior to the record date of any meeting of shareholders at which the share is eligible to be voted; or (viii) is owned by a holder who, in addition to shares which are owned under the provisions of (i)-(vii) above, is the owner of less than 1,139,063 shares of Synovus stock (which amount has been appropriately adjusted to reflect stock splits and with such amount to be appropriately adjusted to properly reflect any other change in Synovus stock by means of a stock split, a stock dividend, a recapitalization or otherwise). Shareholders of shares of Synovus stock not described above are entitled to one vote per share for each share. The actual voting power of each holder of shares of Synovus stock will be based on information possessed by Synovus at the time of the Annual Meeting.
As Synovus stock is registered with the Securities and Exchange Commission and is traded on the New York Stock Exchange, Synovus stock is subject to the provisions of an NYSE rule which, in general, prohibits a company’s common stock and equity securities from being authorized or remaining authorized for trading on the NYSE if the company issues securities or takes other corporate action that would have the effect of nullifying, restricting or disparately reducing the voting rights of existing shareholders of the company. However, the rule contains a “grandfather” provision, under which Synovus’ ten vote provision falls, which, in general, permits grandfathered disparate voting rights plans to continue to operate as adopted. The number of votes that each shareholder will be entitled to exercise at the Annual Meeting will depend upon whether each share held by the shareholder meets the requirements which entitle one share of Synovus stock to ten votes on each matter submitted to a vote of shareholders. Shareholders of Synovus stock must complete the Certification on the proxy in order for any of the shares represented by the proxy to be entitled to ten votes per share. All shares entitled to vote and represented in person or by properly completed proxies received before the polls are closed at the Annual Meeting, and not revoked or superseded, will be voted in accordance with instructions indicated on those proxies.
SHAREHOLDERS WHO DO NOT CERTIFY ON THEIR PROXIES SUBMITTED BY MAIL, INTERNET OR PHONE THAT THEY ARE ENTITLED TO TEN VOTES PER SHARE WILL BE ENTITLED TO ONLY ONE VOTE PER SHARE.
Synovus 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
Directors are elected by a plurality of the votes cast, which means the seven18 nominees who receive the largest number of properly executed votes will be elected as directors. 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.
Pursuant to Synovus’ Articles of Incorporation, the affirmative vote by the holders of shares representing at least 66 2/3% of the votes entitled to be cast by the holders of all of the issued and outstanding shares of Synovus stock is required to amend the Articles of Incorporation and bylaws to declassify the Board of Directors.
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The affirmative vote of a majority of the votes cast is needed to approve the Synovus Financial Corp. Executive Cash Bonus2007 Omnibus Plan, ratify the appointment of KPMG LLP as Synovus’ independent auditor for 20062007 and approve the shareholder proposal regarding director election by majority vote.
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Tabulation of Votes
Under certain circumstances, brokers are prohibited from exercising discretionary authority for beneficial owners who have not returned proxies to the brokers (a “broker non-vote”). In these cases, and in cases where the shareholder abstains from voting on a matter, those shares will be counted for the purpose of determining if a quorum is present, but will not be included as votes cast with respect to those matters and, therefore, will have no effect on the vote with respect to any proposal other than the proposal to amend the Articles of Incorporation and bylaws to declassify the Board of Directors. Because the proposal to amend the Articles of Incorporation and bylaws to declassify the Board of Directors requires the affirmative vote by the holders of shares representing at least 66 2/3% of the votes entitled to be cast by the holders of all of the issued and outstanding shares of Synovus stock, abstentions and broker non-votes will have the same effect as a vote against the proposal.
How You Can Vote
You may vote by proxy or in person at the meeting. To vote by proxy, you may select one of the following options:
Vote By Telephone:
You can vote your shares by telephone by calling the toll-free telephone number (at no cost to you) shown on your proxy card. Telephone voting is available 24 hours a day, seven days a week.Easy-to-follow voice prompts allow you to vote your shares and confirm that your instructions have been properly recorded. Our telephone voting procedures are designed to authenticate the shareholder by using individual control numbers. If you vote by telephone, you do NOT need to return your proxy card.
Vote By Internet:
You can also choose to vote on the Internet. The website for Internet voting is shown on your proxy card. Internet voting is available 24 hours a day, seven days a week. You will be given the opportunity to confirm that your instructions have been properly recorded, and you can consent to view future proxy statements and annual reports on the Internet instead of receiving them in the mail. If you vote on the Internet, you do NOT need to return your proxy card.
Vote By Mail:
If you choose to vote by mail, simply mark your proxy card, date and sign it, sign the Certification and return it in the postage-paid envelope provided.
Revocation of Proxy
If you vote by proxy, you may revoke that proxy at any time before it is voted at the meeting. You may do this by (a) signing another proxy card with a later date and returning it to us prior to the meeting, (b) voting again by telephone or on the Internet prior to the meeting, or (c) attending the meeting in person and casting a ballot.
CB&T and Total System Services, Inc.
Synovus is the owner of all of the issued and outstanding shares of common stock of Columbus Bank and Trust Company® (“CB&T”). CB&T owns individually 81%81.1% of the outstanding shares of Total System Services, Inc.® (“TSYS®”), an electronic payment processing company.
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Corporate Governance Philosophy
The business affairs of Synovus are managed under the direction of the Board of Directors in accordance with the Georgia Business Corporation Code, as implemented by Synovus’ Articles of Incorporation and bylaws. The role of the Board of Directors is to effectively govern the affairs of Synovus for the benefit of its shareholders and other constituencies. The Board strives to ensure the success and continuity of business through the election of qualified management. It is also responsible for ensuring that Synovus’ activities are conducted in a responsible and ethical manner. Synovus is committed to having sound corporate governance principles.
Independence
The listing standards of the New York Stock Exchange provide that a director does not qualify as independent unless the Board of Directors affirmatively determines that the director has no material relationship with Synovus. The Board has established categorical standards of independence to assist it in determining director independence which conform to the independence requirements in the NYSE listing standards. The categorical standards of independence are incorporated within our Corporate Governance Guidelines, and are attached to this Proxy Statement as Appendix A. A and are also available in the Corporate Governance Section of our website at www.synovus.com/governance.
The Board has determined that a majority of its members are independent as defined by the listing standards of the NYSE and meet the categorical standards of independence set by the Board as each independent director has only immaterial relationships with Synovus.Board. Synovus’ Board has determined that the following directors are independent: Daniel P. Amos, Richard Y. Bradley, Frank W. Brumley, Elizabeth W. Camp, C. Edward Floyd (who retired as a director in 2006), T. Michael Goodrich, V. Nathaniel Hansford, John P. Illges, III (who retired as a director in 2006), Mason H. Lampton, Elizabeth C. Ogie, H. Lynn Page, J. Neal Purcell, and Melvin T. Stith.Stith and William B. Turner, Jr. Please see “Certain Relationships and Related Transactions” on page 3346 which includes information with respect to immaterial relationships between Synovus and its independent directors. This information was considered by the Board in determining a director’s independence from Synovus under Synovus’ categorical standards of independence and the NYSE listing standards.
Attendance at Meetings
The Board of Directors held fivefour meetings in 2005.2006. All directors attended at least 75% of Board and committee meetings held during their tenure during 20052006 except Daniel P. Amos and William B. Turner, Jr.James H. Blanchard. Mr. Blanchard attended all four meetings of the Board of Directors but was absent from three of the five Executive Committee meetings. The average attendance by directors at the aggregate number of Board and committee meetings they were scheduled to attend was 91%94%. Although Synovus has no formal policy with respect to Board members’ attendance at its annual meetings, it is customary for all Board members to attend as there is a Board meeting immediately preceding the annual meeting. All of Synovus’ directors who were serving at the time attended the 20052006 Annual Meeting of Shareholders.
Committees of the Board
Synovus’ Board of Directors has four principal standing committees — an Executive Committee, an Audit Committee, a Corporate Governance and Nominating Committee and a Compensation Committee. Each committee has a written charter adopted by the Board of Directors that complies with the listing standards of the NYSE pertaining to corporate governance. Copies of the committee charters are available in the Corporate Governance section of our website at www.synovus.com/governance. The Board has determined that each member of the Audit, Corporate Governance and Nominating and Compensation Committees is an independent director
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independent director as defined by the listing standards of the NYSE and our Corporate Governance Guidelines. The following table shows the membership of the various committees.
| Corporate Governance | ||||||
Executive | and Nominating | Compensation | ||||
| V. Nathaniel Hansford, Chair | J. Neal Purcell, Chair | Richard Y. Bradley, Chair | V. Nathaniel Hansford, Chair | |||
| Richard E. Anthony | Elizabeth W. Camp | Daniel P. Amos | T. Michael Goodrich | |||
| James H. Blanchard | Frank W. Brumley | Mason H. Lampton | ||||
| Richard Y. Bradley | Elizabeth C. | |||||
| Gardiner W. Garrard, Jr. | ||||||
| T. Michael Goodrich | ||||||
| Mason H. Lampton | ||||||
| J. Neal Purcell | ||||||
| James D. Yancey | ||||||
Executive Committee. Synovus’ Executive Committee held fourfive meetings in 2005.2006. During the intervals between meetings of Synovus’ Board of Directors, Synovus’ Executive Committee possesses and may exercise any and all of the powers of Synovus’ Board of Directors in the management and direction of the business and affairs of Synovus with respect to which specific direction has not been previously given by Synovus’ Board of Directors unless Board action is required by Synovus’ governing documents, law or rule.
Audit Committee. Synovus’ Audit Committee held 1011 meetings in 2005.2006. Its Report beginsis on page 24.27. The Board has determined that all fivefour members of the Committee are independent and financially literate under the rules of the NYSE and that at least one member, J. Neal Purcell, is an “audit committee financial expert” as defined by the rules of the Securities and Exchange Commission. The primary functions of Synovus’ Audit Committee include:
| • | Monitoring the integrity of Synovus’ financial statements, Synovus’ systems of internal controls and Synovus’ compliance with regulatory and legal requirements; | |
| • | Monitoring the independence, qualifications and performance of Synovus’ independent auditor and internal auditing activities; and | |
| • | Providing an avenue of communication among the independent auditor, management, internal audit and the Board of Directors. |
Corporate Governance and Nominating Committee. Synovus’ Corporate Governance and Nominating Committee held fourthree meetings in 2005.2006. The primary functions of Synovus��Synovus’ Corporate Governance and Nominating Committee include:
| • | Identifying qualified individuals to become Board members; | |
| • | Recommending to the Board the director nominees for each annual meeting of shareholders and director nominees to be elected by the Board to fill interim director vacancies; | |
| • | Overseeing the annual review and evaluation of the performance of the Board and its committees; and | |
| • | Developing and recommending to the Board corporate governance guidelines. |
Compensation Committee.Synovus’ Compensation Committee held sevensix meetings in 2005.2006. Its Report on Executive Compensation beginsis on page 30.38. The primary functions of Synovus’ Compensation Committee include:
| • | Designing and overseeing Synovus’ executive compensation program; | |
| • | Designing and overseeing all compensation and benefit programs in which employees and officers of Synovus are eligible to participate; and | |
| • | Performing an annual evaluation of the Chief Executive Officer. |
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The Compensation Committee’s charter reflects these responsibilities and allows the Committee to delegate any matters within its authority to individuals or subcommittees it deems appropriate. In addition, the Committee has the authority under its charter to retain outside advisors to assist the Committee in the performance of its duties. In July 2005, the Committee retained the services of Hewitt Associates for 2005 and 2006 to:
| • | Provide ongoing recommendations regarding executive compensation consistent with Synovus’ business needs, pay philosophy, market trends and latest legal and regulatory considerations; | |
| • | Provide market data for base salary, short-term incentive and long-term incentive decisions; and | |
| • | Advise the Committee as to best practices. |
Hewitt was engaged directly by the Committee, although the Committee also directed that Hewitt continue to work with Synovus’ management. Synovus’ Director of Human Resources and his staff develop executive compensation recommendations for the Committee’s consideration in conjunction with Synovus’ Chief Executive Officer and Chief People Officer and with the advice of Hewitt Associates.
Synovus’ Director of Human Resources works with the Chairman of the Committee to establish the agenda for Committee meetings. Management also prepares background information for each Committee meeting. Synovus’ Chief People Officer and Director of Human Resources attend all Committee meetings, while Synovus’ Chief Executive Officer attends some Committee meetings, such as the Committee meeting in which his performance is reviewed with the Committee or other meetings upon the request of the Committee. The Chief Executive Officer, Chief People Officer and the Director of Human Resources do not have authority to vote on Committee matters. A compensation consultant with Hewitt Associates also attends some Committee meetings upon the request of the Committee.
Compensation Committee Interlocks and Insider Participation. Messrs. Hansford, Goodrich and Lampton served on the Compensation Committee during 2006. None of these individuals is or has been an officer or employee of Synovus.
Consideration of Director Candidates
Shareholder Candidates.The Corporate Governance and Nominating Committee will consider candidates for nomination as a director submitted by shareholders. Although the Committee does not have a separate policy that addresses the consideration of director candidates recommended by shareholders, the Board does not believe that such a separate policy is necessary as Synovus’ bylaws permit shareholders to nominate candidates and as one of the duties set forth in the Corporate Governance and Nominating Committee charter is to review and consider director candidates submitted by shareholders. The Committee will evaluate individuals recommended by shareholders for nomination as directors according to the criteria discussed below and in accordance with Synovus’ bylaws and the procedures described under “Shareholder Proposals and Nominations” on page 38.
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Director Qualifications.Synovus’ Corporate Governance Guidelines contain Board membership criteria considered by the Corporate Governance and Nominating Committee in recommending nominees for a position on Synovus’ Board. The Committee believes that, at a minimum, a director candidate must possess personal and professional integrity, sound judgment and forthrightness. A director candidate must also have sufficient time and energy to devote to the affairs of Synovus, be free from conflicts of interest with Synovus, must not have reached the retirement age for Synovus directors and be willing to make, and financially capable of making, the required investment in Synovus’ stock pursuant to Synovus’ Director Stock Ownership
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Guidelines. The Committee also considers the following criteria when reviewing a director candidate:
| • | The extent of the director’s/potential director’s business acumen and experience; | |
| • | Whether the director/potential director assists in achieving a mix of Board members that represents a diversity of background and experience, including with respect to age, gender, race, place of residence and specialized experience; | |
| • | Whether the director/potential director meets the independence requirements of the listing standards of the NYSE; | |
| • | Whether the director/potential director would be considered a “financial expert” or “financially literate” as defined in the listing standards of the NYSE; | |
| • | Whether the director/potential director, by virtue of particular technical expertise, experience or specialized skill relevant to Synovus’ current or future business, will add specific value as a Board member; and | |
| • | Whether the director/potential director possesses a willingness to challenge and stimulate management and the ability to work as part of a team in an environment of trust. |
Identifying and Evaluating Nominees
The Corporate Governance and Nominating Committee has two primary methods for identifying director candidates (other than those proposed by Synovus’ shareholders, as discussed above). First, on a periodic basis, the Committee solicits ideas for possible candidates from a number of sources including members of the Board, Synovus executives and individuals personally known to the members of the Board. Second, the Committee is authorized to use its authority under its charter to retain at Synovus’ expense one or more search firms to identify candidates (and to approve such firms’ fees and other retention terms).
The Committee will consider all director candidates identified through the processes described above, and will evaluate each of them, including incumbents, based on the same criteria. The director candidates are evaluated at regular or special meetings of the Committee and may be considered at any point during the year. If based on the Committee’s initial evaluation a director candidate continues to be of interest to the Committee, the Chair of the Committee will interview the candidate and communicate his evaluation to the other Committee members and executive management. Additional interviews are conducted, if necessary, and ultimately the Committee will meet to finalize its list of recommended candidates for the Board’s consideration.
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One nominee for election as a director, Frederick L. Green, III, has not previously been elected by the shareholders of Synovus. Mr. Green was recommended to the Committee for consideration as a director nominee by the chief executive officer of Synovus.
Meetings of Non-Management and Independent Directors
The non-management directors of Synovus meet separately at least four times a year after each regularly scheduled meeting of the Board of Directors. Synovus’ independent directors meet at least once a year. V. Nathaniel Hansford, Synovus’ Lead Director, presides at the meetings of non-management and independent directors.
Communicating with the Board
Synovus’ Board provides a process for shareholders and other interested parties to communicate with one or more members of the Board.Board, including the Lead Director, or the non-management or independent directors as a group. Shareholders and other interested parties may communicate with the Board by writing the Board of Directors, Synovus Financial Corp.,c/o General Counsel’s Office, 1111 Bay Avenue, Suite 500, Columbus, Georgia 31901. Additional31901 or by calling (800)240-1242. These procedures by which shareholders and other interested parties can communicate with the Lead Director or with the non-management or independent directors individually or as a group are also available in the Corporate Governance section of our website at www.synovus.com/governance. Synovus’ process for handling shareholder and other communications to the Board has been approved by Synovus’ independent directors.
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Additional Information about Corporate Governance
Synovus has adopted Corporate Governance Guidelines which are regularly reviewed by the Corporate Governance and Nominating Committee. We have also adopted a Code of Business Conduct and Ethics which is applicable to all directors, officers and employees. In addition, we maintain procedures for the confidential, anonymous submission of any complaints or concerns about Synovus, including complaints regarding accounting, internal accounting controls or auditing matters. Shareholders may access Synovus’ Corporate Governance Guidelines, Code of Business Conduct and Ethics, each committee’s current charter, procedures for shareholders and other interested parties to communicate with the Lead Director or with the non-management or independent directors individually or as a group and procedures for reporting complaints and concerns about Synovus, including complaints concerning accounting, internal accounting controls and auditing matters in the Corporate Governance section of our website at www.synovus.com/governance. Copies of these documents are also available in print upon written request to the Corporate Secretary, Synovus Financial Corp., 1111 Bay Avenue, Suite 500, Columbus, Georgia 31901.
DIRECTOR COMPENSATION AND
The following table summarizes the compensation paid by Synovus to directors for the year ended December 31, 2006.
| Fees Earned | ||||||||||||||||
| or Paid in | Stock | All Other | ||||||||||||||
Name | Cash ($) | Awards ($)(1) | Compensation ($) | Total ($) | ||||||||||||
| Daniel P. Amos | $ | 40,000 | $ | 8,773 | $ | 10,000 | (2) | $ | 54,237 | |||||||
| Richard Y. Bradley | 55,000 | 8,773 | 67,551 | (3) | 126,788 | |||||||||||
| Frank W. Brumley | 40,000 | 8,773 | 18,850 | (2)(3) | 63,087 | |||||||||||
| Elizabeth W. Camp | 45,000 | 8,773 | 15,000 | (2)(3) | 64,237 | |||||||||||
| C. Edward Floyd, M.D.(4) | 40,000 | 23,315 | 16,500 | (2)(3) | 60,737 | |||||||||||
| Gardiner W. Garrard, Jr. | 45,000 | 8,773 | 67,551 | (3) | 116,788 | |||||||||||
| T. Michael Goodrich | 50,000 | 8,773 | 20,000 | (2)(3) | 74,237 | |||||||||||
| V. Nathaniel Hansford | 60,000 | 8,773 | 24,305 | (2)(3) | 88,542 | |||||||||||
| John P. Illges, III(5) | 45,000 | 23,315 | 57,151 | (3) | 106,388 | |||||||||||
| Alfred W. Jones III | 35,000 | 8,773 | 58,451 | (2)(3) | 97,688 | |||||||||||
| Mason H. Lampton | 50,000 | 8,773 | 72,051 | (2)(3) | 126,288 | |||||||||||
| Elizabeth C. Ogie | 40,000 | 8,773 | 3,000 | (3) | 47,237 | |||||||||||
| H. Lynn Page | 45,000 | 8,773 | 77,551 | (3) | 126,788 | |||||||||||
| J. Neal Purcell | 65,000 | 8,773 | 10,000 | (2) | 79,237 | |||||||||||
| Melvin T. Stith | 45,000 | 8,773 | 10,000 | (2) | 59,237 | |||||||||||
| William B. Turner, Jr. | 35,000 | 8,773 | 8,500 | (3) | 47,737 | |||||||||||
| James D. Yancey | 45,000 | 8,773 | 141,222 | (2)(3)(6) | 190,459 | |||||||||||
| ** | Compensation for Messrs. Blanchard, Anthony and Green for service on the Synovus Board is described under the Summary Compensation Table found on page 39. | |
| (1) | The grant date fair value of the 500 shares of restricted Synovus stock awarded to each director in 2006 was $13,865. The amount in this column reflects the dollar amount recognized for financial statement reporting purposes for the year ended December 31, 2006 in accordance with FAS 123(R) and includes amounts from awards granted in 2006 and prior to 2006. For a discussion of the restricted stock awards reported in this column, see Note 15 of Notes to Consolidated Financial Statements in the Financial Appendix. At December 31, 2006, each director held an aggregate of 1,000 shares of restricted Synovus stock, none of which are vested, with the exception of Messrs. Floyd and Illges whose shares vested upon retirement as a director. |
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| (2) | Includes $10,000 in contributions made by Synovus under Synovus’ Director Stock Purchase Plan. As described more fully below, qualifying directors can elect to contribute up to $5,000 per calendar quarter to make purchases of Synovus stock, and Synovus contributes an additional amount equal to 50% of the directors’ cash contributions under the plan. | |
| (3) | Includes compensation of $67,551 for Messrs. Bradley, Garrard and Yancey, $8,850 for Mr. Brumley, $5,000 for Ms. Camp, $6,500 for Dr. Floyd, $10,000 for Mr. Goodrich, $14,305 for Mr. Hansford, $57,151 for Mr. Illges, $48,451 for Mr. Jones, $62,051 for Mr. Lampton, $3,000 for Ms. Ogie, $77,551 for Mr. Page and $8,500 for Mr. Turner for service as a director of certain of Synovus’ subsidiaries. | |
| (4) | Upon reaching the age of 72 in May 2006, Dr. Floyd retired as a director and became an emeritus director of Synovus pursuant to Synovus’ bylaws. | |
| (5) | Upon reaching the age of 72 in December 2006, Mr. Illges retired as a director and became an emeritus director of Synovus pursuant to Synovus’ bylaws. | |
| (6) | Includes perquisite of $53,835 for providing Mr. Yancey with administrative assistance. Also includes incremental costs incurred by Synovus, if any, for providing Mr. Yancey with office space, security alarm monitoring and spousal entertainment (recreational activities at the TSYS Board retreat). Mr. Yancey, the former Chairman of the Board of Synovus, was provided with administrative assistance and office space during 2006. In computing the incremental cost to Synovus of providing Mr. Yancey with administrative assistance throughout 2006, Synovus aggregated the cost to Synovus of providing salary, benefits and office space (based on lease payments per square foot) to Mr. Yancey’s assistant and allocated the portion of which was attributable to providing services to Mr. Yancey as his assistant did not work exclusively with him. Amounts for office space, security alarm monitoring and spousal entertainment are not quantified because they do not exceed the greater of $25,000 or 10% of the total amount of perquisites. |
Director Compensation Program
Directors
The Corporate Governance and Nominating Committee of Synovus is responsible for the oversight and administration of the Synovus director compensation program. The Committee’s charter reflects these responsibilities and does not allow the Committee to delegate its authority to any person other than the members of the Corporate Governance and Nominating Committee. Under its charter, the Committee has authority to retain outside advisors to assist the Committee in performance of its duties. In November 2004, the Corporate Governance and Nominating Committee retained Mercer Human Resource Consulting to review the competitiveness of the Synovus director compensation program. Mercer was directed to develop peer groups of 15 to 20 companies against which to benchmark director compensation at Synovus and to review and compare director pay practices at Synovus to industry peer companies and to those of general industry companies, analyzing cash compensation, long-term incentive compensation and total compensation. The Corporate Governance and Nominating Committee also asked Mercer to overview recent director pay trends, including shifts in pay mix, equity compensation trends and changes related to increased responsibilities and liability. Mercer’s recommendations for director compensation were then presented to the Committee. In January 2005, Mercer recommended certain changes to the director compensation program at Synovus; the Corporate Governance and Nominating Committee discussed and considered these recommendations and recommended to the Board that it approve the current compensation structure. The decisions made by the Committee are the responsibility of the Committee and may reflect factors and considerations other than the information and recommendations provided by Mercer. The Committee has decided to review and evaluate director compensation every two years.
Cash Compensation of Directors. As reflected in the “Fees Earned or Paid in Cash” column of the Director Compensation Table above, for the fiscal year ended December 31, 2006, directors of Synovus received an annual cash retainer of $35,000, with Compensation Committee and Corporate Governance and Nominating Committee members receiving an additional cash retainer of $5,000 and Audit Committee and Executive Committee members receiving an additional cash retainer of $10,000. In addition, the Chairpersons of the Compensation Committee and Corporate Governance and Nominating Committee received a $5,000 cash retainer, the Chairperson of the Audit Committee received a $10,000 cash retainer and the Lead Director received a $5,000 cash retainer.
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By paying each director an annual retainer, Synovus compensates each director for his or her role and judgment as an advisor to Synovus, rather than for his or her attendance or effort at individual meetings. In so doing, directors with added responsibility are recognized with higher cash compensation. For example, members of the Audit Committee receive a higher cash retainer based upon the following compensation:
| Annual retainer | $ | 35,000 | ||
| Annual committee member retainer (Compensation and Corporate Governance and Nominating) | $ | 5,000 | ||
| Annual committee member retainer (Audit and Executive) | $ | 10,000 | ||
| Annual committee chair retainer (Compensation and Corporate Governance and Nominating) | $ | 5,000 | ||
| Annual Audit Committee chair retainer | $ | 10,000 | ||
| Annual Lead Director retainer | $ | 5,000 |
enhanced duties, time commitment and responsibilities of service on that committee. The Corporate Governance and Nominating Committee believes that this additional cash compensation is appropriate.
In determining the specific amounts of cash compensation, including fees for service on committees and as chairpersons of those committees, the Corporate Governance and Nominating Committee, with the assistance of Mercer, studied cash compensation at a peer group of 23 companies in the banking industry and at 350 large industrial, financial and service organizations and set the cash compensation levels at or around the 50th percentile for such peer companies.
Directors may elect to defer all or a portion of their cash compensation.compensation under the Synovus Directors’ Deferred Compensation Plan. The Directors’ Deferred Compensation Plan does not provide directors with an “above market” rate of return. Instead, the deferred amounts are deposited into one or more investment funds chosen byat the election of the director. In so doing, the plan is designed to allow directors to defer the income taxation of a portion of their compensation and to receive an investment return on those deferred amounts. All deferred fees are payable only in cash.
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Non-management Each of Messrs. Amos, Floyd, Goodrich, Jones and Purcell and Ms. Camp deferred all of their cash compensation under this plan during 2006.
Equity Compensation of Directors. During 2006, non-management directors also receivereceived an annual award of 500 shares of restricted Synovus stock in the form of a grant from the Synovus 2002 Long-Term Incentive Plan, 100% of which vests after three years.
DIRECTOR COMPENSATION TABLE
| Synovus | ||||||||||||||||||||||||
| $ Value of | Contribution | |||||||||||||||||||||||
| Annual | Total | Director | to Director | |||||||||||||||||||||
| Annual | Annual | Committee | Annual | Restricted | Stock | |||||||||||||||||||
| Board | Committee | Chair | Cash | Stock | Purchase | |||||||||||||||||||
| Name | Retainer | Retainer | Retainer | Retainer | Awards(1) | Plan | ||||||||||||||||||
| Daniel P. Amos | $ | 35,000 | $ | 5,000 | — | $ | 40,000 | $ | 13,610 | $ | 10,000 | |||||||||||||
| Richard E. Anthony | $ | 35,000 | $ | 10,000 | — | $ | 45,000 | — | $ | 10,000 | ||||||||||||||
| James H. Blanchard | $ | 35,000 | $ | 10,000 | — | $ | 45,000 | — | — | |||||||||||||||
| Richard Y. Bradley | $ | 35,000 | $ | 15,000 | $ | 5,000 | $ | 55,000 | $ | 13,610 | — | |||||||||||||
| Frank W. Brumley | $ | 35,000 | $ | 5,000 | — | $ | 40,000 | $ | 13,610 | $ | 10,000 | |||||||||||||
| Elizabeth W. Camp | $ | 35,000 | $ | 10,000 | — | $ | 45,000 | $ | 13,610 | $ | 10,000 | |||||||||||||
| C. Edward Floyd | $ | 35,000 | $ | 5,000 | — | $ | 40,000 | $ | 13,610 | $ | 10,000 | |||||||||||||
| Gardiner W. Garrard, Jr. | $ | 35,000 | $ | 10,000 | — | $ | 45,000 | $ | 13,610 | — | ||||||||||||||
| T. Michael Goodrich | $ | 35,000 | $ | 15,000 | — | $ | 50,000 | $ | 13,610 | $ | 10,000 | |||||||||||||
| V. Nathaniel Hansford | $ | 35,000 | $ | 15,000 | $ | 10,000 | (2) | $ | 60,000 | $ | 13,610 | $ | 10,000 | |||||||||||
| John P. Illges, III | $ | 35,000 | $ | 20,000 | (3) | $ | 10,000 | (3) | $ | 65,000 | $ | 13,610 | — | |||||||||||
| Alfred W. Jones III | $ | 35,000 | — | — | $ | 35,000 | $ | 13,610 | $ | 10,000 | ||||||||||||||
| Mason H. Lampton | $ | 35,000 | $ | 15,000 | — | $ | 50,000 | $ | 13,610 | $ | 10,000 | |||||||||||||
| Elizabeth C. Ogie | $ | 35,000 | $ | 5,000 | — | $ | 40,000 | $ | 13,610 | — | ||||||||||||||
| H. Lynn Page | $ | 35,000 | $ | 10,000 | — | $ | 45,000 | $ | 13,610 | — | ||||||||||||||
| J. Neal Purcell | $ | 35,000 | $ | 20,000 | (3) | $ | 10,000 | (3) | $ | 65,000 | $ | 13,610 | $ | 10,000 | ||||||||||
| Melvin T. Stith | $ | 35,000 | $ | 10,000 | — | $ | 45,000 | $ | 13,610 | $ | 10,000 | |||||||||||||
| William B. Turner, Jr. | $ | 35,000 | — | — | $ | 35,000 | $ | 13,610 | — | |||||||||||||||
| James D. Yancey | $ | 35,000 | $ | 10,000 | — | $ | 45,000 | $ | 13,610 | $ | 10,000 | |||||||||||||
When traveling from out-of-town, members The Board granted these restricted stock awards to directors on February 1, 2006, the first day of the Boardmonth following the Corporate Governance and Nominating Committee meeting to approve director compensation for the fiscal year. These restricted stock awards are designed to create equity ownership and to focus directors on the long-term performance of Directors are also eligible for reimbursement of their travel expenses incurredSynovus.
Before restricted stock awards were first granted to directors in connection2005, Synovus’ directors were not compensated with attendance at Board and Committee meetings. These amounts are not includedequity ownership in the table above.
company, other than contributions under the Director Stock Purchase Plan
Plan. With the assistance of Mercer’s market analysis, the Corporate Governance and Nominating Committee determined in 2005 that a competitive director compensation program needed to include a more appropriate level of equity compensation in order to align Synovus with best practices and to remain competitive with the compensation programs at peer companies. First, the Committee determined that restricted stock awards were more appropriate than the use of stock options based upon the market shift in equity pay mix at other similarly situated companies. Second, the Committee determined that a grant of 500 shares of restricted Synovus stock was appropriate by analyzing the market on equity compensation and then determining the right mix based upon a market value approach to the number of shares awarded. In so doing, the grants of restricted stock provide Synovus directors with a more balanced pay mix between cash and equity, consistent with the market trend toward equal weighting of cash and equity.
Synovus’ Director Stock Purchase Plan is a nontax-qualified,non-qualified, contributory stock purchase plan pursuant to which qualifying Synovus directors can purchase, with the assistance of contributions from Synovus, presently issued and outstanding shares of Synovus stock. Under the terms of the Director Stock Purchase Plan, qualifying directors can elect to contribute up to $5,000 per calendar quarter to make purchases of Synovus stock, and Synovus 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 Synovus stock purchased for their benefit under the Plan. Synovus’ contributions under this Plan are included in the “All Other Compensation” column of the Director Compensation Table above.
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Consulting Services
Effective January 19, 2005,
Synovus’ contributions under the Director Stock Purchase Plan further provide directors the opportunity to buy and maintain an equity interest in Synovus and James D. Yancey,to share in the former Chairman of the Board of Synovus, entered into a one-year Consulting Agreement in conjunction with Mr. Yancey’s
retirement as an employeecapital appreciation of Synovus. UnderTogether, the Agreement, Mr. Yancey received monthly paymentsrestricted stock awards and Synovus’ contributions under the Director Stock Purchase Plan provide an appropriate, competitive amount of $27,487compensation to directors in the form of equity, putting the equity component of compensation, as well as total compensation, at or near the median for peer group companies at the time the compensation structure was approved in 2005.
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The restricted stock awards to directors and wasSynovus’ contributions under the Director Stock Purchase Plan also provided with 20 hoursassist and facilitate directors’ fulfillment of personal use of corporate aircraft. Synovus also provided Mr. Yancey with an office and secretarial support during 2005 valued at approximately $46,400. The Agreement expired on December 31, 2005.
Stock Ownership Guidelines
Under Synovus’their stock ownership guidelines for directors,requirements. Synovus’ Corporate Governance Guidelines require all directors are required to accumulate over time shares of Synovus stock equal in value to at least three times the value of thetheir annual retainer. Directors have five years to attain this level of total stock ownership but must attain a share ownership threshold of one times the amount of the director’s annual retainer within three years. These stock ownership guidelines are designed to align the interests of Synovus’ directors to that of Synovus’ shareholders and the long-term performance of Synovus.
Consulting Agreement. For a discussion of James H. Blanchard’s Consulting Agreement with Synovus, see“Consulting Agreement” on page 45.
PROPOSALS TO BE VOTED ON
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE “FOR” ALL NOMINEES.
Number
At the date of this Proxy Statement, the Board of Directors of Synovus consists of 1918 members. As 20 board seats have been authorized by Synovus’ shareholders, Synovus has one directorshiptwo directorships which remainsremain vacant. ThisThese vacant directorshipdirectorships could be filled in the future at the discretion of Synovus’ Board of Directors. This discretionary power gives Synovus’ Board of Directors the flexibility of appointing new directors in the periods between Synovus’ 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 2007 Annual Meeting, the terms of office of the Class II directors expire at the 2008 Annual Meeting and the terms of office of the Class III directors expire at the 2006 Annual Meeting. However, if you approve the proposal to declassify the Board of Directors, as more fully described in Proposal 2 of this Proxy Statement, the term of all directors, including those elected at the 2006 Annual Meeting, will end at the 2007 Annual Meeting of Shareholders and all directors will thereafter be elected for one year terms. Proxies cannot be voted at the 20062007 Annual Meeting for a greater number of persons than the number of nominees named.
Nominees for Election as Director
The Board has nominated each of the following nominees have been nominated by18 individuals to be elected as directors at the Annual Meeting upon the recommendation of the Corporate Governance and Nominating CommitteeCommittee. All nominees are currently directors of Synovus and approvedhave previously been elected by the Board for submission toshareholders. Each director elected will serve until the shareholders: Richard Y. Bradley, Frank W. Brumley, Elizabeth W. Camp, T. Michael Goodrich, John P. Illges, III, J. Neal Purcell and William B. Turner, Jr., each to serve a three year term expiring at the 2009next Annual Meeting (or in 2007 if the proposal to declassify the Board of Directors and make related amendments to the Articles of Incorporationuntil his or her successor is duly elected and bylaws is approved).
qualified or until his or her earlier retirement, resignation or removal. 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 upon the recommendation of the Corporate Governance and Nominating Committee. If you do not wish your shares voted for one or more of the nominees, you may so indicate on the proxy.
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Members of the Board of Directors
Following is the principal occupation, age and certain other information for each director nominee and other directors serving unexpired terms.
| Year | ||||||||||||||
| Synovus | First | |||||||||||||
| Director | Elected | Principal Occupation and Other | ||||||||||||
| Name | Age | Classification | Director | Information | ||||||||||
| Daniel P. Amos(1) | 54 | II | 2001 | Chief Executive Officer and Director, Aflac Incorporated (Insurance Holding Company) | ||||||||||
| Richard E. Anthony(2) | 59 | II | 1993 | President and Chief Executive Officer, Synovus Financial Corp. | ||||||||||
| James H. Blanchard(3) | 64 | I | 1972 | Chairman of the Board, Synovus Financial Corp.; Chairman of the Executive Committee, Total System Services, Inc.; Director, Total System Services, Inc. and BellSouth Corporation | ||||||||||
| Richard Y. Bradley | 67 | III | 1991 | Partner, Bradley & Hatcher (Law Firm); Director, Total System Services, Inc. | ||||||||||
| Frank W. Brumley(4) | 65 | III | 2004 | Chairman of the Board and Chief Executive Officer, Daniel Island Company (Planned Community Development) | ||||||||||
| Elizabeth W. Camp | 54 | III | 2003 | President and Chief Executive Officer, DF Management, Inc. (Investment and Management of Commercial Real Estate) | ||||||||||
| C. Edward Floyd, M.D. | 71 | II | 1995 | Vascular Surgeon | ||||||||||
| Gardiner W. Garrard, Jr. | 65 | I | 1972 | President, The Jordan Company (Real Estate Development); Director, Total System Services, Inc. | ||||||||||
| T. Michael Goodrich | 60 | III | 2004 | Chairman and Chief Executive Officer, BE&K, Inc. (Engineering and Construction Company); Director, Energen Corporation | ||||||||||
| V. Nathaniel Hansford(5) | 62 | I | 1985 | President, Retired, North Georgia College and State University | ||||||||||
| Principal | ||||||||||
| Occupation | ||||||||||
| Year First | and Other | |||||||||
Name | Age | Elected Director | Information | |||||||
| Daniel P. Amos(1) | 55 | 2001 | Chairman of the Board and Chief Executive Officer, Aflac Incorporated (Insurance Holding Company) | |||||||
| Richard E. Anthony(2) | 60 | 1993 | Chairman of the Board and Chief Executive Officer, Synovus Financial Corp. | |||||||
| James H. Blanchard(3) | 65 | 1972 | Chairman of the Board and Chief Executive Officer, Retired, Synovus Financial Corp.; Director, Total System Services, Inc. and AT&T Corp. | |||||||
| Richard Y. Bradley | 68 | 1991 | Partner, Bradley & Hatcher (Law Firm); Director, Total System Services, Inc. | |||||||
| Frank W. Brumley(4) | 66 | 2004 | Chairman of the Board and Chief Executive Officer, Daniel Island Company (Planned Community Development) | |||||||
| Elizabeth W. Camp | 55 | 2003 | President and Chief Executive Officer, DF Management, Inc. (Investment and Management of Commercial Real Estate) | |||||||
| Gardiner W. Garrard, Jr. | 66 | 1972 | President, The Jordan Company (Real Estate Development and Private Equity Investments); Director, Total System Services, Inc. | |||||||
| T. Michael Goodrich | 61 | 2004 | Chairman and Chief Executive Officer, BE&K, Inc. (Engineering and Construction Company); Director, Energen Corporation | |||||||
| Frederick L. Green, III(5) | 48 | 2006 | President and Chief Operating Officer, Synovus Financial Corp. | |||||||
| V. Nathaniel Hansford(6) | 63 | 1985 | President, Retired, North Georgia College and State University | |||||||
| Alfred W. Jones III | 49 | 2001 | Chairman of the Board and Chief Executive Officer, Sea Island Company (Real Estate Development and Management); Director, Total System Services, Inc. | |||||||
| Mason H. Lampton(7) | 59 | 1993 | Chairman of the Board, Standard Concrete Products (Construction Materials Company); Director, Total System Services, Inc. | |||||||
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| Year | ||||||||||||||
| Synovus | First | |||||||||||||
| Director | Elected | Principal Occupation and Other | ||||||||||||
| Name | Age | Classification | Director | Information | ||||||||||
| John P. Illges, III | 71 | III | 1997 | Senior Vice President and Financial Consultant, Retired, The Robinson-Humphrey Company, Inc. (Stockbroker); Director, Total System Services, Inc. | ||||||||||
| Alfred W. Jones III | 48 | I | 2001 | Chairman of the Board and Chief Executive Officer, Sea Island Company (Real Estate Development and Management); Director, Total System Services, Inc. | ||||||||||
| Mason H. Lampton(6) | 58 | II | 1993 | Chairman of the Board, Standard Concrete Products (Construction Materials Company); Director, Total System Services, Inc. | ||||||||||
| Elizabeth C. Ogie(7) | 55 | II | 1993 | Private Investor | ||||||||||
| H. Lynn Page | 65 | I | 1978 | Director, Total System Services, Inc. | ||||||||||
| J. Neal Purcell | 64 | III | 2003 | Vice Chairman, Retired, KPMG LLP (Professional Services Provider); Director, Southern Company, Kaiser Permanente and Dollar General Corporation | ||||||||||
| Melvin T. Stith(8) | 59 | II | 1998 | Dean, Martin J. Whitman School of Management, Syracuse University; Director, Flowers Foods, Inc. | ||||||||||
| William B. Turner, Jr.(7) | 54 | III | 2003 | Vice Chairman of the Board and President, W.C. Bradley Co. (Metal Manufacturer and Real Estate) | ||||||||||
| James D. Yancey(9) | 64 | I | 1978 | Chairman of the Board, Columbus Bank and Trust Company; Chairman of the Board, Retired, Synovus Financial Corp.; Director, Total System Services, Inc. | ||||||||||
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| Principal | ||||||||||
| Occupation | ||||||||||
| Year First | and Other | |||||||||
Name | Age | Elected Director | Information | |||||||
| Elizabeth C. Ogie(8) | 56 | 1993 | Private Investor | |||||||
| H. Lynn Page | 66 | 1978 | Director, Total System Services, Inc. | |||||||
| J. Neal Purcell | 65 | 2003 | Vice Chairman, Retired, KPMG LLP (Professional Services Provider); Director, Southern Company, Kaiser Permanente and Dollar General Corporation | |||||||
| Melvin T. Stith(9) | 60 | 1998 | Dean, Martin J. Whitman School of Management, Syracuse University; Director, Flowers Foods, Inc. | |||||||
| William B. Turner, Jr.(8) | 55 | 2003 | Vice Chairman of the Board and President, W.C. Bradley Co. (Consumer Products and Real Estate) | |||||||
| James D. Yancey(10) | 65 | 1978 | Chairman of the Board, Columbus Bank and Trust Company; Chairman of the Board, Retired, Synovus Financial Corp.; Director, Total System Services, Inc. | |||||||
| (1) | Daniel P. Amos previously served as a director of Synovus from 1991 until 1998, when he resigned as a director as required by federal banking regulations to join the board of a company affiliated with a Japanese bank. | |
| (2) | Richard E. Anthony was elected | |
| (3) | James H. Blanchard was elected Chairman of the Board of Synovus in July | |
| (4) | Frank W. Brumley was elected Chairman of the Board and Chief Executive Officer of Daniel Island Company in January 2006. Prior to 2006, Mr. Brumley served as President of Daniel Island Company. | |
| (5) | Frederick L. Green, III was elected President and Chief Operating Officer of Synovus in October 2006. Mr. Green served as Vice Chairman of Synovus from 2003 until 2006. From 1991 until 2003, Mr. Green served in various capacities with The National Bank of South Carolina, a banking subsidiary of Synovus, including President of The National Bank of South Carolina. Mr. Green continues to serve as Chairman of the Board of The National Bank of South Carolina. | |
| (6) | V. Nathaniel Hansford serves as Lead Director of the Synovus Board. | |
| Mason H. Lampton was elected Chairman of the Board of Standard Concrete Products in June | ||
| Elizabeth C. Ogie is William B. Turner, Jr.’s first cousin. | ||
| Melvin T. Stith was appointed Dean of Syracuse University’s Martin J. Whitman School of Management in January 2005. Prior to 2005, Mr. Stith served as Dean of the College of Business at Florida State University. | ||
| James D. Yancey retired as an executive employee of Synovus in December 2004 and served as a non-executive Chairman of the Board until July 2005. Mr. Yancey was elected as an executive officer Chairman of the Board of Synovus in October 2003. Prior to 2003, Mr. Yancey served in various capacities with Synovusand/or CB&T, including Vice Chairman of the Board and President of both Synovus and CB&T. |
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PROPOSAL 2: AMENDMENT TO SYNOVUS’ARTICLES OF INCORPORATION AND BYLAWS TO DECLASSIFY THE BOARD OF DIRECTORS
boards also believe it provides continuity and stability in the management of the business and affairs of a company because a majority of directors always have prior experience as directors of the company and familiarity with the business of the company. Furthermore, proponents argue that staggered boards may enhance shareholder value by forcing an entity seeking control of a target company to initiate arms-length discussions with the board of a target company because the entity is unable to replace the entire board in a single election.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE “FOR” DECLASSIFICATION OF THE BOARD OF DIRECTORS AND THE RELATED AMENDMENTS TO THE ARTICLES OF INCORPORATION AND BYLAWS.
Article 10 of Synovus’ Articles of Incorporation and Section 2 of Article III of Synovus’ bylaws provide for the classification of the Board of Directors into three classes, with each class being elected every three years and with each class being as nearly equal in number as possible. The Articles of Incorporation and bylaws also contain provisions relating to the classification of the Board concerning the filling of director vacancies. The Board of Directors has determined that the Articles of Incorporation and bylaws should be amended to repeal these provisions of Article 10 and Section 2 of Article III of the Articles of Incorporation and bylaws, respectively, and to make certain conforming changes as appropriate, and has unanimously adopted a resolution approving the amendments, declaring their advisability and recommending the amendments to our shareholders.
The proposed amendment would amend and restate Article 10 of Synovus’ Articles of Incorporation as follows:
“10.
The proposed amendment would amend and restate Section 2 and Section 10 of Article III of Synovus’ bylaws as follows:
“ARTICLE III. DIRECTORS
SECTION 2. Election and Tenure.Each member of the Board of Directors of the corporation shall be elected at the annual meeting of shareholders and shall hold office for a term of one year and until his or her successor is duly elected and qualified or until his or her earlier retirement, resignation, removal or death. In such elections, the nominees receiving a plurality of votes shall be elected.
SECTION 10. Vacancies.Any vacancy occurring in the Board of Directors caused by the removal of a Director shall be filled by the shareholders, or if authorized by the shareholders, by the Board of Directors. Any other vacancy occurring in the Board of Directors, including vacancies occurring by reason of an increase in the number of directors comprising the Board, may be filled by the Board of Directors or the shareholders until the next annual meeting of shareholders and until a successor is duly elected and qualified. Vacancies in the Board of Directors filled by the Board of Directors may be filled by the affirmative vote of a majority of the remaining Directors, though less than a quorum, or the sole remaining Director, as the case may be.”
If the proposed amendments are approved by the shareholders of Synovus, the classified Board will be eliminated, the current term of office of each director will end at the 2007 Annual Meeting and directors will thereafter be elected for one-year terms at each Annual Meeting of Shareholders. Furthermore, any director chosen to fill a vacancy on the Board of Directors will hold office until the next Annual Meeting of Shareholders.
Classified or staggered boards have been widely adopted and have a long history in corporate law. Proponents of classified boards assert that they promote the independence of directors because directors elected for multi-year terms are less subject to outside influence. Proponents of classified
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On the other hand, some investors view classified boards as reducing the accountability of directors to shareholders by making it more difficult for shareholders to change a majority of directors even where a majority of shareholders are dissatisfied with the performance of incumbent directors. Many institutional investors believe that the election of directors is the primary means for shareholders to influence corporate governance policies and to hold management accountable for implementing these policies. In addition, opponents of classified boards assert that a staggered structure for the election of directors may discourage proxy contests in which shareholders have an opportunity to vote for a competing slate of nominees and therefore may erode shareholder value. In light of these views, a number of major corporations have determined that the evolving principles of corporate governance dictate that all directors of a corporation should be elected annually.
The Board of Directors carefully considered the arguments for and against continuation of the classified Board and determined that the classified Board should be eliminated. The Board believes that all directors should be equally accountable at all times for Synovus’ performance. Moreover, this determination by the Board furthers its goal of ensuring that Synovus’ corporate governance policies maximize management accountability to shareholders and would, if adopted, allow shareholders the opportunity each year to register their views on the performance of the Board of Directors. Because there is no limit to the number of terms an individual may serve, the continuity and stability of the Board’s membership and our policies and long-term strategic planning should not be affected.
If approved, the proposed amendment to the Articles of Incorporation will become effective upon the filing of Articles of Amendment to the Articles of Incorporation with the Secretary of State of the State of Georgia, which Synovus would do promptly after the Annual Meeting. The proposed amendment to the bylaws will become effective upon adoption by the shareholders at the Annual Meeting. If the proposal is not approved by the shareholders, then the Board of Directors will remain classified, and the directors will continue to be elected to three-year terms.
PROPOSAL 3: APPROVAL OF THE SYNOVUS FINANCIAL CORP.
2007 OMNIBUS PLAN
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE “FOR” APPROVAL OF THE SYNOVUS FINANCIAL CORP. EXECUTIVE CASH BONUS2007 OMNIBUS PLAN.
Synovus’ executive compensation program will include short-term incentive bonus awards under
Upon the recommendation of the Compensation Committee, on February 15, 2007 the Board of Directors adopted the Synovus Financial Corp. Executive Cash Bonus2007 Omnibus Plan (the “Plan”(“2007 Plan”)., subject to shareholder approval. The purposespurpose of the 2007 Plan is to advance the interests of Synovus and its shareholders through awards that give employees and directors a personal stake in Synovus’ growth, development and financial success. Awards under the 2007 Plan are designed to reward selected executive officers for superior corporate performancemotivate employees and directors to devote their best interests to the business of Synovus. Awards will also help Synovus attract and retain top quality executive officers.the services of employees and directors who are in a position to make significant contributions to Synovus’ future success. Subject to approval by Synovus’ shareholders, compensation paid pursuant to the 2007 Plan is intended, to the extent reasonable, to qualify for tax deductibility under Section 162(m) (“Section 162(m)”) and Section 409A of the Internal Revenue Code of 1986, as amended, and the regulations promulgated thereunder, as may be amended from time to time (“Section 162(m)”). Thetime. After approval of the 2007 Plan, is being submitted to shareholders for approval as required by Section 162(m).
no further awards will be made under the Synovus 2002 and 2000 Long-Term Incentive Plans.
Eligibility and Participation.The Chief Executive Officer and the four highest compensated officers Any employee of Synovus and its subsidiaries and any publicly-traded subsidiarynon-employee director of Synovus, areapproximately 12,625 persons, is eligible to participate in the 2007 Plan. Approximately 10 employees are eligibleIncentive stock options, however, may be granted only to participate in the Plan.employees. The
Compensation Committee as described below, has discretion to select participants from among eligible employees from year to year.DescriptionShares Subject to the Plan. The aggregate number of shares of Synovus stock which may be granted to participants pursuant to awards granted under the 2007 Plan may not exceed eighteen million (18,000,000) shares. Shares awarded under the 2007 Plan or the Synovus Financial Corp. 2002 and 2000 Long-Term Incentive Plans that are subsequently forfeited may also be awarded under the 2007 Plan. The maximum number of full-value awards (awards settled in stock other than stock options and stock appreciation rights) under the 2007 Plan shall be 9,000,000. As of December 31, 2006, 4,220,937 shares remain available for grant under Synovus’ 2002 and 2000 Long-Term Incentive Plans. Synovus does not anticipate granting new awards under such plans between fiscal year-end and the effective date of the 2007 Plan, except for grants of 222,879 stock options with an exercise price of $31.13 and a10-year term and 50,909 shares of restricted stock.
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Awards Under the 2007 Plan.Pursuant to the 2007 Plan, Synovus may grant the following types of awards subject to the following conditions:
Nonqualified and Incentive Stock Options. All stock options must have a maximum life of no more than ten years from the date of grant. At the time of grant, the Committee will determine the exercise price for any stock options. In no event, however, may the exercise price be less than 100% of the fair market value of Synovus’ common stock at the time of grant. At the time of exercise, payment in full of the exercise price will be paid in cash, shares of common stock valued at their fair market value on the date of exercise, a combination thereof, or by such other method as the Committee may determine.
Stock Appreciation Rights. Stock appreciation rights offer participants the right to receive payment for the difference (spread) between the exercise price of the stock appreciation right and the market value of Synovus’ common stock at the time of redemption. The Committee may authorize payment of the spread for a stock appreciation right in the form of cash, common stock to be valued at its fair market value on the date of exercise, a combination thereof, or by such other method as the Committee may determine.
Restricted Stock and Restricted Stock Units. The Committee may award incentive bonus opportunitiescommon stock to participants. Each fiscal year,a participant as a portion of the Compensationparticipant’s remuneration. In doing so, the Committee, establishes, in writing,its discretion, may impose conditions or restrictions on the award of common stock. The Committee
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may also award restricted stock units which are similar to restricted stock except that no shares are actually awarded on the date of grant.
Performance Units or Performance Shares. Section 162(m) generally limits to $1,000,000 the amount that a publicly held corporation may deduct for the compensation paid to its Chief Executive Officer and its four most highly compensated officers other than the Chief Executive Officer. “Qualified performance-based compensation,” however, is not subject to the $1,000,000 deduction limit. Accordingly, the 2007 Plan permits the Committee to establish performance goals consistent with Section 162(m) and authorizes the granting of cash, stock options, stock appreciation rights, common stock, other property, or any combination thereof to employees upon achievement of such established performance goals. In setting the performance goals, applicablethe Committee may use such measures as net earnings or net income (before or after taxes); earnings per share; net sales or revenue growth; net operating profit; return measures (including, but not limited to, the current return on assets, capital, invested capital, equity, sales, or revenue); cash flow (including, but not limited to, operating cash flow, free cash flow, cash generation, cash flow return on equity, and cash flow return on investment); earnings before or after taxes, interest, depreciation,and/or any succeeding fiscal year. The performance amortization; gross or operating margins; productivity ratios; share price (including, but not limited to, growth measures which are used to determine the amount of the incentive bonus award for each performance period are chosen from among the following for Synovus, any of its business segments and/or any of its business units, unless and until the Compensation Committee proposes atotal shareholder return); expense targets; margins; operating efficiency; market share; customer satisfaction; unit volume; working capital targets and change in working capital; economic value added (net operating profit after tax minus the measures for shareholder vote or applicable tax and/or other regulatory laws change to permitsum of capital multiplied by the Compensation Committee discretion to alter the performance measures without obtaining shareholder approval: (i) return on assets; (ii) net income; (iii) operating income; (iv) nonperforming assets and/or loans as a percentage of total assets and/or loans; (v) return on capital compared to cost of capital; (vi) earnings per share and/or earnings per sharecapital); asset growth; (vii) return on equity; (viii) noninterestnon-interest expense as a percentage of total expense; (ix) loan charge-offs as a percentage of total loans; (x) productivity and expense control; (xi) number of cardholder, merchant and/or other customer accounts processed and/or converted by TSYS; (xii)converted; and successful negotiation or renewal of contracts with new and/or existing customers by TSYS; (xiii) stock price; and (xiv) asset growth. Awards are determined based on the achievement of the preestablishedcustomers. The performance goals and are awarded based onmay relate to the individual participant, to Synovus as a percentagewhole, or to a subsidiary, division, department, region, function or business unit of a participant’s base salary.
The Compensation Committee has no discretionSynovus in which the participant is employed. Performance awards may be granted either alone or in addition to increase the amount of any awardother grants made under the Plan but will retain the ability to eliminate or decrease an award otherwise payable to a participant.2007 Plan.
Cash-Based Awards. The Compensation Committee must certify, in writing, that the performance goals have been met before any paymentsmay grant cash-based awards to participants may be made.as determined by the Committee. Payment of the incentive bonus award earned, if any, iscash-based awards may be made in either cash as soon as practicable after Compensationor common stock.
Other Stock-Based Awards. The Committee approvalmay grant other types of equity-based or deferred pursuant to the provisions of the Synovus/ TSYS Deferred Compensation Plan.
Termination of Employment.Any participant not employed by Synovusequity-related awards. These awards may be paid in either common stock or a publicly-traded subsidiary of Synovus on December 31 of any fiscal year will not be entitled to an award unless otherwise determined by the Compensation Committee.
cash.
Maximum Amount Payable to Any Participant. The annual award limits of the 2007 Plan include the following:
Options.The maximum aggregate number of shares subject to options granted in any one plan year to any one participant is 4,000,000 shares.
Stock Appreciation Rights. The maximum number of shares subject to stock appreciation rights granted in any one plan year to any one participant is 4,000,000 shares.
Restricted Stock or Restricted Stock Units. The maximum aggregate grant with respect to awards of restricted stock or restricted stock units in any one plan year to any one participant is 2,000,000 shares.
Performance Units or Performance Shares. The maximum aggregate award of performance units or performance shares that a participant may receive in any one plan year is 2,000,000 shares if the award is payable in shares, or equal to the value of 100,000 shares if the award is payable in cash or property other than shares, determined as of the earlier of the vesting or the payout date, as applicable.
Cash-Based Awards. The maximum aggregate amount payable for each performance periodawarded or credited with respect to cash-based awards to any one participant in any one plan year may not exceed $2,000,000.
Other Stock-Based Awards. The maximum aggregate grant with respect to other stock-based awards in any one plan year to any one participant is 2,000,000 shares.
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Adjustments in Connection with Certain Events. The Committee, in order to prevent dilution or enlargement of a participant’s rights under the 2007 Plan, shall substitute or adjust the number and kind of shares that may be issued under the 2007 Plan or under particular forms of awards, the number and kind of shares subject to any participant is $2 million.
Amendment ofoutstanding awards, the Plan.The Board of Directors may amendoption price or grant price applicable to outstanding awards, the Plan at any time including amendments that increase the costs of the Planannual award limits, and allocate benefits between persons and groupsother value determinations applicable to outstanding awards in the table below differently; provided, however, that no amendment can be made without shareholder approval that increases the maximum amount payableevent of any corporate event or transaction such as a merger, consolidation, reorganization, recapitalization, separation, partial or complete liquidation, stock dividend, stock split, reverse stock split, split up, spin-off, or other distribution of stock or property of Synovus, combination of shares, exchange of shares, dividend in-kind, or other like change in capital structure, number of outstanding shares or distribution (other than normal cash dividends) to shareholders of Synovus, or any participant in excess of the limit set forth above.
similar corporate event or transaction.
Duration of the 2007 Plan.The 2007 Plan will remain in effect from the date it is approvedbecome effective upon approval by Synovus’ shareholders untilshareholders. The 2007 Plan will terminate after 10 years or, if sooner, when all shares reserved under the date it is terminated by2007 Plan have been issued. At any time, the Board of Directors. The Board of Directors may terminate the 2007 Plan. The termination of the 2007 Plan atwill not affect outstanding awards in any time.
way.
Administration.The 2007 Plan will be administered by the Compensation Committee of the Board of Directors or, inDirectors. Members of the case of a publicly-traded subsidiary of Synovus,Committee are appointed by the CompensationBoard of Directors from among its members and may be removed by the Board of Directors in its discretion.
The Committee has broad discretion to construe, interpret and administer the 2007 Plan, to select the individuals to be granted Plan awards, to determine the number of shares to be subject to each Plan award, and to determine the terms, conditions and duration of each award. The Committee’s decisions will be conclusive, final and binding upon all parties. No member of the publicly traded subsidiary. The Committee will be comprisedliable for any action or determination made with respect to the 2007 Plan or any award granted under the 2007 Plan. To the fullest extent permitted by law, Synovus will indemnify the members of the Committee against reasonable expenses incurred in connection with any action taken against them with respect to the 2007 Plan or any award granted under the Plan.
Amendment of the 2007 Plan. The Committee may amend, modify, suspend or terminate the 2007 Plan at any time except that no amendment, modification, suspension or termination may adversely affect an existing award under the 2007 Plan without the affected participant’s consent. In addition, no amendment, modification, suspension or termination shall be made which would reprice, replace or regrant through cancellation, or which would lower the option price of a previously granted option or the grant price of a previously granted stock appreciation right without the approval of shareholders. Moreover, under NYSE listing standards the 2007 Plan cannot be materially amended without the approval of shareholders.
Change in Control. Unless otherwise determined by the Committee at grant, in the event of a change in control of Synovus, as defined in the 2007 Plan, the vesting of any outstanding awards granted under the 2007 Plan will be accelerated and all such awards will be fully exercisable.
Federal Tax Consequences of the 2007 Plan. The following discussion of the federal income tax consequences of awards granted under the 2007 Plan is intended only as a summary of the present federal income tax treatment of awards. These laws are highly technical and are subject to change at any time. This summary does not discuss the tax consequences of a participant’s death, or the provisions of the income tax laws of any municipality, state or foreign country in which a participant may reside.
Nonqualified Stock Options. Nonqualified stock options granted under the 2007 Plan will not be taxable to a participant at grant but generally will result in taxation at exercise, at which time the participant will recognize ordinary income in an amount equal to the difference between the option’s exercise price and the fair market value of the shares on the exercise date. Synovus
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will be entitled to deduct a corresponding amount as a business expense in the year the participant recognizes this income.
Incentive Stock Options. An employee will generally not recognize ordinary income on receipt or exercise of an incentive stock option so long as he or she has been an employee of Synovus or its subsidiaries from the date the incentive stock option was granted until three months before the date of exercise; however, the amount by which the fair market value of the shares on the exercise date exceeds the exercise price is an adjustment in computing the employee’s alternative minimum tax in the year of exercise. If the employee holds the shares of common stock received on exercise of the incentive stock option for one year after the date of exercise (and for two years from the date of grant of the incentive stock option), any difference between the amount realized upon the disposition of the shares and the amount paid for the shares will be treated as long-term capital gain (or loss, if applicable) to the employee. If the employee exercises an incentive stock option and satisfies these holding period requirements, Synovus may not deduct any amount in connection with the incentive stock option. If an employee exercises an incentive stock option but engages in a “disqualifying disposition” by selling the shares acquired on exercise before the expiration of the one and two-year holding periods described above, the employee generally will recognize ordinary income (for regular income tax purposes only) in the year of the disqualifying disposition equal to the excess, if any, of the fair market value of the shares on the date of exercise over the exercise price; and any excess of the amount realized on the disposition over the fair market value on the date of exercise will be taxed as long- or more “outside” directors withinshort-term capital gain (as applicable). If, however, the meaningfair market value of the shares on the date of disqualifying disposition is less than on the date of exercise, the employee will recognize ordinary income equal only to the difference between the amount realized on the disqualifying disposition and the exercise price. In either event, Synovus will be entitled to deduct an amount equal to the amount constituting ordinary income to the employee in the year of the disqualifying disposition.
Stock Appreciation Rights. To the extent that the requirements of the Internal Revenue Code of 1986 are met, there are no immediate tax consequences to a participant when a stock appreciation right is granted. When a participant exercises the right to the appreciation in fair market value of shares represented by a stock appreciation right, payments made in common stock are normally includable in the participant’s gross income for regular income tax purposes. Synovus will be entitled to deduct the same amount as a business expense in the same year. The includable amount and corresponding deduction each equal the fair market value of the common stock payable on the date of exercise.
Restricted Stock. The recognition of income from an award of restricted stock for federal income tax purposes depends on the restrictions imposed on the shares. Generally, taxation will be deferred until the first taxable year the shares are no longer subject to substantial risk of forfeiture. At the time the restrictions lapse, the participant will recognize ordinary income equal to the then fair market value of the stock. The participant may, however, make an election to include the value of the shares in gross income in the year of award despite such restrictions. Generally, Synovus will be entitled to deduct the fair market value of the shares transferred to the participant as a business expense in the year the participant includes the compensation in income.
Restricted Stock Units. Generally, a participant will not recognize ordinary income until common stock, cash, or other property become payable under the restricted stock unit, even if the award vests in an earlier year. Synovus will generally be entitled to deduct the amount the participant includes in income as a business expense in the year of payment.
Performance Units/ Performance Shares. As stated above, the performance units and performance shares awarded under the 2007 Plan are intended to be “qualified performance-based compensation” under Section 162(m) and, therefore, deductible by Synovus when the employee recognizes ordinary income. Employees under the 2007 Plan incur no income tax
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liability upon the initial grant of performance units or performance shares. At the end of the performance or measurement period, however, employees realize ordinary income on any amounts received in cash or common stock. Any subsequent appreciation on the common stock is treated as a capital gain.
Cash-Based Awards/Other Stock-Based Awards. Any cash payments or the fair market value of any common stock or other property a participant receives in connection with cash-based awards or other stock-based awards are includable in income in the year received or made available to the participant without substantial limitations or restrictions. Generally, Synovus will be entitled to deduct the amount the participant includes in income as a business expense in the year of payment.
Deferred Compensation. All awards under the 2007 Plan must satisfy the requirements of Section 162(m).
Estimate409A of the Internal Revenue Code of 1986 to avoid adverse tax consequences to participants.
Additional Information. In the event the 2007 Plan is terminated, participants under the 2007 Plan will retain all rights to their awards in accordance with the terms of the awards.
In the event of a termination of service by a participant, the Committee will determine the length of time that the participant has to exercise a stock option or stock appreciation right and the extent to which the participant can retain the rights to restricted stock, restricted stock units, performance units, performance shares, cash-based awards, and other stock-based awards.
The Committee may provide for the payment of dividends on shares of common stock granted in connection with awards or dividend equivalents with respect to any shares of common stock subject to an award that have not actually been issued under the award.
New Plan Benefits.For the fiscal year 2005, only Messrs. Blanchard The following table shows grants of restricted stock and Anthony would have been selected to participatestock options in the Plan, while Messrs. Griffith and Green and Ms. James would have been selected to participate in the Synovus Incentive Bonus Plan. Because the amounts that will be paid pursuant to the Plan are not currently determinable, the following chart sets forth the amountsstock that would have been awardedmade under the 2007 Plan for fiscal year 2005 if2006 had the Chief Executive Officer and2007 Plan been in effect:
NUMBER OF SHARES SUBJECT
TO AWARDS GRANTED
TO AWARDS GRANTED
| Restricted | ||||||||
Name and Principal Position | Stock Options | Stock Awards | ||||||
| Richard E. Anthony Chairman of the Board and Chief Executive Officer | 38,475(1 | ) | 12,825(1 | ) | ||||
| Thomas J. Prescott Executive Vice President and Chief Financial Officer | 12,825(1 | ) | 4,275(1 | ) | ||||
| G. Sanders Griffith, III Senior Executive Vice President, General Counsel and Secretary | 14,551(1 | ) | 4,850(1 | ) | ||||
| Frederick L. Green, III President and Chief Operating Officer | 14,876(1 | ) | 4,959(1 | ) | ||||
| Elizabeth R. James Vice Chairman and Chief People Officer | 13,230(1 | ) | 4,410(1 | ) | ||||
| Executive Group | 110,446(1 | ) | 36,816(1 | ) | ||||
| Nonexecutive Director Group | -0- | 8,500(2 | ) | |||||
| Nonexecutive Officer Employee Group | 16,781(3 | ) | 447,557(3 | ) | ||||
| (1) | Amounts represent grants that would have been made to executives based upon Synovus’ performance during the2004-2006 performance period had the 2007 Plan been in effect. | |
| (2) | Amount represents restricted stock awards that would have been made to nonexecutive directors for 2006 had the 2007 Plan been in effect. |
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| (3) | Amounts represent grants that would have been made to nonexecutive officer employees for 2006 had the 2007 Plan been in effect. |
Equity Compensation Plan Information
The table below provides information as of December 31, 2006 concerning the four other highest compensated officersshares of Synovus participated in the Plan.stock that may be issued under existing equity compensation plans of Synovus.
| (a) | (b) | (c) | ||||||||||
| Number of | Weighted- | Number of Securities | ||||||||||
| Securities to be | Average Exercise | Remaining Available for | ||||||||||
| Issued upon | Price of | Future Issuance under | ||||||||||
| Exercise of | Outstanding | Equity Compensation | ||||||||||
| Outstanding | Options, | Plans (Excluding | ||||||||||
| Options, Warrants | Warrants and | Securities Reflected in | ||||||||||
| Plan Category(1) | and Rights | Rights | Column (a)) | |||||||||
| Equity compensation plans approved by security holders | 22,809,794 | (2) | $ | 23.31 | 4,220,937 | (3) | ||||||
| Equity compensation plans not approved by security holders | — | — | — | |||||||||
| Total | 22,809,794 | $ | 23.31 | 4,220,937 | ||||||||
| (1) | Does not include information for equity compensation plans assumed by Synovus in mergers. A total of 829,467 shares of common stock was issuable upon exercise of options granted under plans assumed in mergers and outstanding at December 31, 2006. The weighted average exercise price of all options granted under plans assumed in mergers and outstanding at December 31, 2006 was $9.62. Synovus cannot grant additional awards under these assumed plans. | |
| (2) | Does not include an aggregate of 735,263 shares of restricted stock which will vest over the remaining years through 2011. | |
| (3) | Includes 4,220,937 shares available for future grants under Synovus’ 2002 and 2000 Long-Term Incentive Plans. |
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NEW PLAN BENEFITS
| Name and Position | Dollar Value ($) | |||
| Richard E. Anthony President and Chief Executive Officer | $ | 964,575 | ||
| James H. Blanchard Chairman of the Board | 1,114,800 | |||
| G. Sanders Griffith, III Senior Executive Vice President, General Counsel and Secretary | 417,375 | |||
| Frederick L. Green, III Vice Chairman | 376,950 | |||
| Elizabeth R. James Vice Chairman and Chief People Officer | 371,700 | |||
| Executive Group | 3,245,400 | |||
| Non-Executive Director Group | -0- | |||
| Non-Executive Officer Employee Group | -0- | |||
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PROPOSAL 4:3: RATIFICATION OF
APPOINTMENT OF THE INDEPENDENT AUDITOR
APPOINTMENT OF THE INDEPENDENT AUDITOR
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE “FOR” RATIFICATION OF THE APPOINTMENT OF KPMG LLP AS THE INDEPENDENT AUDITOR.
The Audit Committee has appointed the firm of KPMG LLP as the independent auditor to audit the consolidated financial statements of Synovus and its subsidiaries for the fiscal year ending December 31, 2006.2007 and Synovus’ internal control over financial reporting as of December 31, 2007. Representatives of KPMG will be present at the Annual Meeting with the opportunity to make a statement if they desire to do so and will be available to respond to appropriate questions from shareholders present at the meeting. Although shareholder ratification of the appointment of Synovus’ independent auditor is not required by our bylaws or otherwise, we are submitting the selection of KPMG to our shareholders for ratification to permit shareholders to participate in this important corporate decision. If not ratified, the Audit Committee will reconsider the selection, although the Audit Committee will not be required to select a different independent auditor for Synovus.
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PROPOSAL 5:4: SHAREHOLDER PROPOSAL REGARDING DIRECTOR ELECTION BY MAJORITY VOTE
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE “AGAINST” THE SHAREHOLDER’S PROPOSAL.
The United Brotherhood of Carpenters Pension Fund (“Fund”), which is the beneficial owner of approximately 5,000 shares of Synovus stock, has made a timely request that the following proposal, which the Fund intends to present for consideration at the 20062007 Annual Meeting, be included in this Proxy Statement. The Fund has advised Synovus that a representative of the Fund intends to be present at the Annual Meeting to present this proposal for consideration. The proposal and related supporting statement are set forth below exactly as received by Synovus. The Fund’s request was submitted by Douglas J. McCarron, Fund Chairman, 101 Constitution Avenue, N.W., Washington, D.C. 20001.
Shareholder Resolution:
“Resolved:
“Resolved: That the shareholders of Synovus Financial Corp. (“Company”) hereby request that the Board of Directors initiate the appropriate process to amend the Company’s articles of incorporation to provide that director nominees shall be elected by the affirmative vote of the majority of votes cast at an annual meeting of shareholders.”
Shareholder Supporting Statement:
“Our Company is incorporated in Georgia. Among other issues, Georgia corporate law addresses the issue of the level of voting support necessary forshareholders, with a specific action, such as the election of corporate directors. Georgia law provides that unless a company’s articles of incorporation provide otherwise, a plurality of all the votes cast at a meeting at which a quorum is present is sufficient to elect a director. (Georgia Business Corporation Code, 14-2-728.a.)
Our Company presently uses the plurality vote standard retained for contested director elections, that is, when the number of director nominees exceeds the number of board seats.”
Shareholder Supporting Statement:
“In order to elect directors. This proposal requests that the Board initiateprovide shareholders a changemeaningful role in the Company’sdirector elections, our company’s director election vote standard should be changed to providea majority vote standard. A majority vote standard would require that nominees for the board of directors musta nominee receive a majority of the votevotes cast in order to be elected or re-elected toelected. The standard is particularly well-suited for the Board.
vast majority of director elections in which only board nominated candidates are on the ballot. We believe that a majority vote standard in directorboard elections would give shareholdersestablish a meaningful rolechallenging vote standard for board nominees and improve the performance of individual directors and entire boards. Our Company presently uses a plurality vote standard in theall director election process.elections. Under the Company’s currentplurality vote standard, a nominee in a director electionfor the board can be elected with as little as a single affirmative vote, even if a substantial majority of the votes cast are “withheld” from thatthe nominee. The
In response to strong shareholder support for a majority vote standard would require that ain director receiveelections, an increasing number of companies, including Intel, Dell, Motorola, Texas Instruments, Wal-Mart, Safeway, Home Depot, Gannett, Marathon Oil and Supervalu, have adopted a majority of the vote caststandard in order to be elected to the Board.
The majority vote proposal received high levels of support last year, winning majority support at Advanced Micro Devices, Freeport McMoRan, Marathon Oil, Marsh and McClennan, Office Depot, Raytheon, and others. Leading proxy advisory firms recommended voting in favor of the proposal.
Somecompany bylaws. Additionally, these companies have adopted board governancebylaws or policies requiringto address post-election issues related to the status of director nominees that fail to receivewin election. Our Company has not established a majority support from shareholdersvote standard in Company bylaws, opting only to establish a post-election director resignation governance policy. The Company’s director resignation policy simply addresses post-election issues, establishing a requirement for directors to tender their resignations to the board.for board consideration should they receive more “withhold” votes than “for” votes. We believe that these director resignation policies, are inadequate for they are based oncoupled with the continued use of a plurality vote standard, are a wholly inadequate response to the plurality standard and would allow director nominees to be elected despite only minimal shareholder support. We contend that changingcall for the legal standard toadoption of a majority vote isstandard.
We believe the establishment of a superior solution that merits shareholder support.
Our proposal ismeaningful majority vote policy requires the adoption of a majority vote standard in the Company’s governance documents, not intended to limit the judgmentretention of the Board in craftingplurality vote standard. A majority vote standard combined with the requested governance change. For instance,Company’s current post-election director resignation policy would provide the Board shouldboard a framework to address the status of incumbenta director nomineesnominee who failfails to receive a majority vote underbe elected. The combination of a majority vote standard and whetherwith a plurality vote standard may be appropriate in director elections when the number of director nominees exceeds the available board seats.
We urge your supportpost-election policy establishes a meaningful right for this important director election reform.”shareholders to elect directors, while
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reserving for the board an important post-election role in determining the continued status of an unelected director.
We urge the board to adopt a majority vote standard.”
Board of Directors’ Statement in Opposition:
Synovus believes that adherence to sound corporate governance policies and practices is important to ensuring that Synovus is governed and managed with the highest standards of responsibility, ethics and integrity and in the best interests of its shareholders. Synovus currently elects its directors by a plurality standard, meaning that the nominees who receive the most affirmative votes are elected to the Board. This method of voting, which is permissible under Georgia law and is the predominant method currently in use among U.S. public companies, has served Synovus well for many years. In fact, in no instance can it be found that plurality voting prevented Synovus shareholders from either electing the directors they wanted to elect or otherwise expressing their dissatisfaction with any particular director or the Board as a whole.
Synovus believes it would not be in the best interests of its shareholders to change the method by which directors are elected for the following reasons:
The Fund’s proposal is unnecessary to achieve sound corporate governance at Synovus. Synovus has demonstrated its commitment to implementing best corporate governance practices and its openness to shareholder input regarding potential directors and governance. For example, in the area of director elections, the Board recently amended Synovus’ Corporate Governance Guidelines in January 2006 to provide that in an uncontested election, any nominee for director who receives a greater number of votes “withheld” from his or her election than votes “for” such election must promptly tender his or her resignation. This new guideline further provides for a process by which such director’s resignation is either accepted or rejected by the Corporate Governance and Nominating Committee and the Board. (See Appendix B of this Proxy Statement for the full text of this addition toprovision of the Corporate Governance Guidelines.) The Board also recently votedGuidelines). Many public companies have adopted similar resignation policies to recommendaddress the issue with the belief that the shareholders approve an amendment to Synovus’a resignation policy best maximizes shareholder access and sound corporate governance.
In addition, Synovus amended its Articles of Incorporation and bylaws in 2006 to declassify the Board so that each director will beis subject to shareholder approval on an annual basis. (See Proposal 2 of this Proxy Statement for Synovus’ proposal regarding the declassification of the Board.)
Furthermore, Synovus maintains a director nomination and election process that is designed to give due regard to shareholder nominees. The Corporate Governance and Nominating Committee has a process for consideration of shareholder nominees, and the Board maintains a process for shareholders to communicate with the Board. The Board believes that these mechanisms, not the process requested by the Fund’s proposal, provide the best foundation for a strong and effective Board and excellence in corporate governance.
Given the current state of applicable corporate law and practice, the Fund’s proposal for majority voting for directors may have unintended negative consequences. The Board believes that while conceptually the Fund’s proposal seems simple, implementation of the proposal would establish a potentially disruptive vote requirement that the Board does not believe is reasonable or in the best interests of Synovus’ shareholders. For example, the Fund’s proposal does not address what would happen if one or more incumbent directors fail to receive a majority of the votes cast. Georgia law provides that despite the expiration of a director’s term, such director continues to serve until a successor is elected and qualified or until there is a decrease in the number of directors. Therefore, under the Fund’s proposal, an incumbent director who does not receive a majority of the votes cast would nonetheless remain in office until such person’s successor was elected and qualified, absent resignation or removal from the Board. We believe that this “failed election” situation would not reflect the views of shareholders who have chosen to exercise their right to vote for the directors of their choice at the annual meeting.
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In addition, the plurality voting standard is the methodology known to and understood by shareholders and used by corporations that have been identified as leaders in corporate governance reforms. MajorityWhile majority voting on the other hand, is anhas recently been adopted by a minority of companies, it continues to be a relatively uncertain, untested voting standard. ItBecause of this uncertainty, combined with the negative consequences of failed elections, the American Bar Association recently reaffirmed that plurality voting is and should be the default standard for director elections. After careful consideration and thoughtful study, the American Bar Association found that the potential detriments that could be caused by changing plurality voting as the voting standard outweigh any potential advantages of adopting majority voting.
Moreover, it is possible that the unpredictability described above could deter the most qualified individuals from agreeing to serve as director candidates, whether nominated by the Board or a shareholder.
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This may then deprive Synovus of continued service by valued members of our Board, including directors with excellent qualifications and performance.
A further consequence of the Fund’s proposal may be to unnecessarily increase the cost of soliciting shareholder votes. If the Fund’s proposal is approved, the Board may need to employ proactive telephone solicitations, subsequent mailings or other vote-procuring strategies to obtain shareholder approval in future elections. The Board believes this would not be a good expenditure of Synovus’ funds in connection with director elections.
The Board believes that Synovus’ existing voting standard is fair, democratic and impartial and serves the best interests of its shareholders. Synovus’ history of electing, by a plurality, strong and independent boards is demonstrated in the fact that in the past ten years, the average affirmative vote for the directors has been greater than 98.7 percent of the votes cast. The outcome of Synovus’ election process would not have been different in any given year if the proposed majority voting standard had been used. Furthermore, the Board believes that the quality of its directors has a far greater impact on Synovus’ governance than the voting standard used to elect them.
EXECUTIVE OFFICERS
The following table sets forth the name, age and position with Synovus of each executive officer of Synovus.
| Position with | ||||||||
Name | Age | Synovus | ||||||
| Richard E. Anthony(1) | ||||||||
| Chairman of the Board and Chief Executive Officer | ||||||||
| Frederick L. Green, | ||||||||
| Elizabeth R. | Vice Chairman and Chief People Officer | |||||||
| G. Sanders Griffith, | Senior Executive Vice President, General Counsel and Secretary | |||||||
| Thomas J. | Executive Vice President and Chief Financial Officer | |||||||
| Mark G. | Executive Vice President and Chief Credit Officer | |||||||
| Andrew R. | Executive Vice President | |||||||
| Calvin | Executive Vice President, Corporate Affairs | |||||||
| (1) | As Messrs. | |
| (2) | ||
| Elizabeth R. James was elected Vice Chairman of Synovus in May 2000. From 1986 until 2000, Ms. James served in various capacities with Synovus, CB&Tand/or TSYS, including Chief Information Officer and Chief People Officer of Synovus. | ||
| G. Sanders Griffith, III was elected Senior Executive Vice President, General Counsel and Secretary of Synovus in October 1995. From 1988 until 1995, Mr. Griffith served in various capacities with Synovus, including Executive Vice President, General Counsel and Secretary. |
23
| Thomas J. Prescott was elected Executive Vice President and Chief Financial Officer of Synovus in December 1996. From 1987 until 1996, Mr. Prescott served in various capacities with Synovus, including Executive Vice President and Treasurer. | ||
| (5) | ||
| Mark G. Holladay was elected Executive Vice President and Chief Credit Officer of Synovus in April 2000. From 1974 until 2000, Mr. Holladay served in various capacities with CB&T, including Executive Vice President. |
20
| Andrew R. Klepchick was elected Executive Vice President of Synovus in August 2005. From 1988 until 2005, Mr. Klepchick served in various positions with Creative Financial Group, Ltd., a financial planning subsidiary of Synovus, including Executive Vice President of Creative Financial Group, Ltd. | ||
| Calvin Smyre was elected Executive Vice President of Synovus in November 1996. From 1976 until 1996, Mr. Smyre served in various capacities with CB&Tand/or Synovus, including Senior Vice President of Synovus. |
24
21
AND EXECUTIVE OFFICERS
The following table sets forth ownership of shares of Synovus stock by each director, each executive officer named in the Summary Compensation Table on page 26 and all directors and executive officers as a group as of December 31, 2005.
| Shares of | Shares of | Shares of | ||||||||||||||||||
| Synovus | Synovus | Synovus | Percentage | |||||||||||||||||
| Stock | Stock | Stock | of | |||||||||||||||||
| Beneficially | Beneficially | Beneficially | Outstanding | |||||||||||||||||
| Owned with | Owned with | Owned with | Total Shares | Shares of | ||||||||||||||||
| Sole Voting | Shared Voting | Sole Voting | of Synovus | Synovus | ||||||||||||||||
| And | And | but no | Stock | Stock | ||||||||||||||||
| Investment | Investment | Investment | Beneficially | Beneficially | ||||||||||||||||
| Power as of | Power as of | Power as of | Owned as of | Owned as of | ||||||||||||||||
| Name | 12/31/05 | 12/31/05 | 12/31/05 | 12/31/05(1) | 12/31/05 | |||||||||||||||
| Daniel P. Amos | 51,122 | 417,274 | 500 | 468,896 | * | |||||||||||||||
| Richard E. Anthony | 584,394 | 189,774 | 64,238 | 1,143,689 | * | |||||||||||||||
| James H. Blanchard | 1,336,597 | 203,815 | 49,687 | 2,904,517 | 1 | |||||||||||||||
| Richard Y. Bradley | 23,124 | 84,887 | 500 | 108,511 | * | |||||||||||||||
| Frank W. Brumley | 25,609 | — | 500 | 26,109 | * | |||||||||||||||
| Elizabeth W. Camp | 22,901 | 2,703 | 500 | 26,104 | * | |||||||||||||||
| C. Edward Floyd | 846,471 | 269,365 | 500 | 1,116,336 | * | |||||||||||||||
| Gardiner W. Garrard, Jr. | 204,147 | 793,682 | 500 | 998,329 | * | |||||||||||||||
| T. Michael Goodrich | 186,284 | 35,898 | (2) | 500 | 222,682 | * | ||||||||||||||
| Frederick L. Green, III | 104,939 | 415 | 30,784 | 277,452 | * | |||||||||||||||
| G. Sanders Griffith, III | 200,770 | 3,424 | 71,879 | 485,261 | * | |||||||||||||||
| V. Nathaniel Hansford | 124,749 | 424,239 | 500 | 549,488 | * | |||||||||||||||
| John P. Illges, III | 281,204 | 441,429 | 500 | 723,133 | * | |||||||||||||||
| Elizabeth R. James | 32,997 | — | 4,754 | 148,646 | * | |||||||||||||||
| Alfred W. Jones III | 10,079 | — | 500 | 10,579 | * | |||||||||||||||
| Mason H. Lampton | 97,020 | 178,981 | (3) | 500 | 276,501 | * | ||||||||||||||
| Elizabeth C. Ogie | 477,263 | 3,001,567 | (4) | 500 | 3,479,330 | 1 | ||||||||||||||
| H. Lynn Page | 721,418 | 11,515 | 500 | 733,433 | * | |||||||||||||||
| J. Neal Purcell | 10,309 | — | 500 | 10,809 | * | |||||||||||||||
| Melvin T. Stith | 8,205 | 117 | 500 | 8,822 | * | |||||||||||||||
| William B. Turner, Jr. | 418,244 | 2,867,526 | (4) | 500 | 3,286,270 | 1 | ||||||||||||||
| James D. Yancey | 1,182,869 | 88,532 | 500 | 2,753,063 | 1 | |||||||||||||||
| Directors and Executive Officers as a Group (26 persons) | 7,160,761 | 6,155,802 | 255,438 | 17,456,470 | 5.5 | |||||||||||||||
| Shares of | ||||||||||||||||||||
| Shares of | Synovus | Shares of | ||||||||||||||||||
| Synovus | Stock | Synovus | ||||||||||||||||||
| Stock | Beneficially | Stock | ||||||||||||||||||
| Beneficially | Owned | Beneficially | Percentage of | |||||||||||||||||
| Owned | with | Owned | Total | Outstanding | ||||||||||||||||
| with Sole | Shared | with Sole | Shares of | Shares of | ||||||||||||||||
| Voting | Voting | Voting | Synovus | Synovus | ||||||||||||||||
| And | And | and no | Stock | Stock | ||||||||||||||||
| Investment | Investment | Investment | Beneficially | Beneficially | ||||||||||||||||
| Power | Power | Power | Owned | Owned | ||||||||||||||||
| as of | as of | as of | as of | as of | ||||||||||||||||
Name | 12/31/06 | 12/31/06 | 12/31/06 | 12/31/06(1) | 12/31/06 | |||||||||||||||
| Daniel P. Amos | 52,315 | 58,860 | 1,000 | 112,175 | * | |||||||||||||||
| Richard E. Anthony | 576,559 | 187,754 | 83,245 | 1,185,228 | * | |||||||||||||||
| James H. Blanchard | 1,263,144 | 194,788 | 23,805 | 4,612,340 | 1 | |||||||||||||||
| Richard Y. Bradley | 30,984 | 84,887 | 1,000 | 116,871 | * | |||||||||||||||
| Frank W. Brumley | 26,764 | 55,286 | 1,000 | 83,050 | * | |||||||||||||||
| Elizabeth W. Camp | 24,286 | 2,703 | 1,000 | 27,989 | * | |||||||||||||||
| Gardiner W. Garrard, Jr. | 204,147 | 786,933 | 1,000 | 992,080 | * | |||||||||||||||
| T. Michael Goodrich | 173,548 | 19,180 | (2) | 1,000 | 193,728 | * | ||||||||||||||
| Frederick L. Green, III | 112,952 | 464 | 39,187 | 307,391 | * | |||||||||||||||
| G. Sanders Griffith, III | 202,484 | 3,521 | 86,963 | 517,091 | * | |||||||||||||||
| V. Nathaniel Hansford | 124,817 | 416,589 | 1,000 | 542,406 | * | |||||||||||||||
| Elizabeth R. James | 33,555 | — | 18,187 | 176,071 | * | |||||||||||||||
| Alfred W. Jones III | 11,392 | — | 1,000 | 12,392 | * | |||||||||||||||
| Mason H. Lampton | 98,295 | 178,981 | (3) | 1,000 | 278,276 | * | ||||||||||||||
| Elizabeth C. Ogie | 482,841 | 2,921,797 | (4) | 1,000 | 3,405,638 | 1 | ||||||||||||||
| H. Lynn Page | 714,262 | 11,515 | 1,000 | 726,777 | * | |||||||||||||||
| Thomas J. Prescott | 45,765 | — | 17,348 | 190,284 | * | |||||||||||||||
| J. Neal Purcell | 11,441 | — | 1,000 | 12,441 | * | |||||||||||||||
| Melvin T. Stith | 8,760 | 120 | 1,000 | 9,880 | * | |||||||||||||||
| William B. Turner, Jr. | 407,245 | 2,791,167 | (4) | 1,000 | 3,199,412 | 1 | ||||||||||||||
| James D. Yancey | 909,979 | 87,532 | 1,000 | 1,829,240 | 1 | |||||||||||||||
| Directors and Executive Officers as a Group (24 persons) | 5,683,730 | 5,019,095 | 315,473 | 16,117,903 | 4.9 | |||||||||||||||
25
