SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material under Rule 14a-12
REGIONS FINANCIAL CORPORATION
--------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
--------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
------------------------------------------------------------------------
(5) Total fee paid:
------------------------------------------------------------------------
[ ] Fee paid previously with preliminary materials:
----------------------------------------------------------------------------
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
------------------------------------------------------------------------
(3) Filing Party:
------------------------------------------------------------------------
(4) Date Filed:
------------------------------------------------------------------------
(Regions Logo)
REGIONS FINANCIAL CORPORATION
POST OFFICE BOX 10247
BIRMINGHAM, ALABAMA 35202-0247
TELEPHONE 205 944-1300
To the Stockholders:
You are cordially invited to attend the thirty-first annual meeting of the
stockholders of Regions Financial Corporation to be held at 10:00 a.m. local
time, on May 20, 2002, at the Regions Bank Building, 8 Commerce Street,
Montgomery, Alabama.
We hope you will plan to attend the stockholders' meeting. However, in
order that we may be assured of a quorum, we urge you to sign and return the
enclosed proxy in the postage-paid envelope provided as promptly as possible,
whether or not you plan to attend the meeting in person. If you do attend the
meeting, you may withdraw your proxy.
A reception and coffee will be held from 9:00 a.m. until 10:00 a.m., on the
fourth floor of the Regions Bank Building. We hope you will find it convenient
to come early enough to enjoy this social time prior to the stockholders'
meeting. To help us plan for the meeting and the reception, please complete and
return the accompanying postage-paid postcard if you plan to attend the annual
meeting.
/s/ Carl E. Jones, Jr.
Carl E. Jones, Jr.
Chairman of the Board
April 10, 2002
REGIONS FINANCIAL CORPORATION
POST OFFICE BOX 10247
BIRMINGHAM, ALABAMA 35202-0247
TELEPHONE 205 944-1300
---------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To be held May 20, 2002
---------------------
NOTICE IS HEREBY GIVEN that the annual meeting of stockholders of Regions
Financial Corporation (Regions or Company), a Delaware corporation, will be held
at the Regions Bank Building, 8 Commerce Street, Montgomery, Alabama, on Monday,
May 20, 2002, at 10:00 a.m. local time, for the purpose of considering and
acting on the following:
1. To elect the three nominees named in the Proxy Statement as
directors to serve for three year terms or until their successors
have been elected and qualified.
2. Proposal to ratify the Board of Directors' selection of Ernst &
Young LLP as independent auditors of the Company for the year
ending December 31, 2002.
3. To transact such other business as may properly come before the
meeting or any adjournment thereof.
Only stockholders of record at the close of business on April 1, 2002, are
entitled to receive notice of and to vote at the meeting. A complete list of the
stockholders entitled to vote at the meeting, arranged in alphabetical order and
showing the address of each stockholder and the number of shares registered in
the name of each stockholder shall be open to examination by any stockholder,
for any purpose germane to the meeting, during ordinary business hours, for a
period of at least 10 days prior to the meeting at the main office of Regions
Bank, 417 North 20th Street, Birmingham, Alabama. Stockholders are invited to
attend the meeting in person.
Please sign and date the accompanying proxy card and return it promptly in
the enclosed postage-paid envelope whether or not you plan to attend the meeting
in person. Alternatively, you may vote your shares by telephone or via the
Internet. Instructions are included with the proxy card. If you attend the
annual meeting, you may vote in person if you wish, even if you previously have
returned your proxy card or voted by telephone or on the Internet. The proxy may
be revoked at any time prior to its exercise.
By Order of the Board of Directors
/s/ SAMUEL E. UPCHURCH, JR.
Samuel E. Upchurch, Jr.
Corporate Secretary
April 10, 2002
REGIONS FINANCIAL CORPORATION
POST OFFICE BOX 10247
BIRMINGHAM, ALABAMA 35202-0247
TELEPHONE 205 944-1300
---------------------
PROXY STATEMENT
FOR 2002 ANNUAL MEETING OF STOCKHOLDERS
---------------------
Regions Financial Corporation (Regions or the Company) is furnishing this
Proxy Statement to the stockholders in connection with the 2002 annual meeting
of stockholders to be held on Monday, May 20, 2002, at 10:00 a.m. local time at
the Regions Bank Building, 8 Commerce Street, Montgomery, Alabama, and at any
adjournment thereof. The matters to be considered and acted upon are (1) the
election of three nominees as directors of the corporation, (2) proposal to
ratify the Board of Directors' selection of Ernst & Young LLP as independent
auditors of the Company for the year ending December 31, 2002, and (3) such
other business as may properly come before the meeting.
The enclosed proxy is solicited on behalf of the board of directors of
Regions and is revocable by the stockholder at any time prior to the voting of
such proxy. All properly executed proxies delivered pursuant to this
solicitation will be voted at the meeting and in accordance with instructions,
if any.
Participants in Regions' Dividend Reinvestment Plan and Directors' Stock
Incentive Plan will note that shares held by the administrator for such plans
are shown on the enclosed proxy card in addition to shares held directly by the
stockholder in certificate form. Signing and returning the proxy card will
enable voting of all shares, including those held in such plans.
The annual report of Regions Financial Corporation for the year 2001,
including financial statements, has been mailed to all stockholders. Such report
and financial statements are not a part of this proxy statement except as
specifically incorporated herein.
The date of this proxy statement is April 10, 2002.
SOLICITATION, VOTING, AND REVOCABILITY OF PROXIES
This is the first mailing of proxy solicitation materials to stockholders.
Regions will solicit proxies by mail and also may solicit proxies by telephone
or telegram or in person by the directors, officers, and employees of Regions,
who will receive no additional compensation for such solicitation but may be
reimbursed for out-of-pocket expenses. Brokerage houses, nominees, fiduciaries,
and other custodians will be requested to forward solicitation materials to
beneficial owners and will be reimbursed for their out-of-pocket expenses.
Regions has retained D.F. King & Co., Inc. to assist in the solicitation of
proxies. It is anticipated that the fee of such firm will not exceed $7,000 plus
reasonable out-of-pocket costs and expenses authorized by Regions.
Stockholders are urged to sign and date the enclosed proxy card and return
it as promptly as possible in the envelope enclosed for that purpose.
Stockholders of record can also give proxies by calling a toll-free telephone
number or by using the Internet. The telephone and Internet voting procedures
are designed to authenticate Regions stockholders' identities, to allow Regions
stockholders to give their voting instructions, and to confirm that Regions
stockholders' instructions have been recorded properly. Regions has been advised
by counsel that the procedures that have been put in place for telephone and
Internet voting are consistent with the requirements of applicable law.
Stockholders who wish to vote over the Internet should be aware that there may
be costs associated with electronic access, such as usage charges from Internet
access providers and telephone companies, and that there may be some risk a
stockholder's vote might not be properly recorded or counted because of an
unanticipated electronic malfunction.
Any Regions stockholder who has delivered a proxy or voted by telephone or
the Internet may revoke it at any time before it is voted by giving notice of
revocation in writing or submitting to Regions a signed proxy card bearing a
later date, provided that such notice or proxy card is actually received by
Regions before the vote of stockholders or in open meeting prior to the taking
of stockholder vote at the Regions annual meeting. Any notice of revocation
should be sent to Regions Financial Corporation, 417 North 20th Street,
Birmingham, Alabama 35203; Attention: Samuel E. Upchurch, Jr., Corporate
Secretary. A proxy will not be revoked by death or supervening incapacity of the
stockholder executing the proxy unless, before the vote, notice of such death or
incapacity is filed with the Corporate Secretary.
The shares of Regions Common Stock represented by properly executed proxies
received at or prior to the annual meeting and not subsequently revoked will be
voted as directed in such proxies. If instructions are not given, shares
represented by proxies received will be voted for the election of the three
nominees for director named in this proxy statement, for the proposal to ratify
the Board of Directors' selection of Ernst & Young LLP as independent auditors
of the Company for the year ending December 31, 2002, and in the discretion of
the proxy holder as to any other matters that properly may come before the
annual meeting. If necessary, and unless contrary instructions are given, the
proxy holder also may vote in favor of a proposal to adjourn the annual meeting
to permit further solicitation of proxies in order to obtain sufficient votes to
approve the matters presented or any other matter that properly comes before the
annual meeting. Proxies representing shares which were voted against any of the
matters presented will not be voted in favor of any proposal to adjourn the
annual meeting.
Please note that the procedures for voting by telephone or over the
Internet differ depending on whether Regions shares are held in your own name or
are held for you in a nominee or brokerage account ("street" name).
For Regions shares held in your name:
Any Regions stockholder of record desiring to vote by telephone or over the
Internet will be required to enter the unique control number imprinted on such
holder's Regions proxy card, and therefore should have the proxy card in hand
when initiating the session.
- To vote by telephone, dial 1-877-PRX-VOTE (1-877-779-8683) on a touch
tone telephone, and follow the simple menu instructions provided. There
is no charge for this call.
- To vote over the Internet, log on to the website
http://www.eproxyvote.com/rgbk and follow the simple instructions
provided. Similar instructions are included on the enclosed Regions proxy
card.
2
For Regions shares held in nominee accounts ("street" name):
A number of brokerage firms and banks are participating in a program
provided through ADP Investor Communication Services that offers telephone and
Internet voting options. This program is different than the program for shares
registered in the name of the stockholder. If your shares are held in an account
at a brokerage firm or bank participating in the ADP program, you may vote those
shares telephonically by calling the telephone number referenced on your voting
form. Votes submitted via the Internet through the ADP program must be received
by May 16, 2002. The giving of such proxy will not affect your right to vote in
person should you decide to attend the annual meeting.
VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF
As of April 1, 2002, Regions had issued 230,854,787 shares of common stock,
of which 1,196,000 shares were held as treasury stock and 229,658,787 shares
were outstanding. Stockholders are entitled to one vote for each share on all
matters to come before the meeting. Only stockholders of record at the close of
business on April 1, 2002, will be entitled to vote at the meeting or any
adjournment thereof.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
As of December 31, 2001, all Regions' affiliate banks beneficially held in
a fiduciary capacity for others under numerous trust relationships, 10,988,148
shares or 4.8% of Regions' outstanding common stock. Regions' affiliate bank
trust departments have sole voting power with respect to 10,356,559 of these
shares or 4.5%, shared voting power with respect to 55,392 of these shares, sole
dispositive power with respect to 3,559,241 of these shares and shared
dispositive power with respect to 1,803,913 of these shares. No entity is known
to the Company to be the beneficial owner of more than five percent of any class
of voting securities.
SECURITY OWNERSHIP OF DIRECTORS AND MANAGEMENT
As of April 1, 2002, Allen B. Morgan, Jr. was the only director or nominee
for director who is deemed to beneficially own more than 1% of Regions common
stock. As of such date, Mr. Morgan beneficially owned 3,433,040 shares or 1.49%
of the Company's outstanding common stock. All directors and executive officers
of Regions, as a group, owned beneficially a total of 7,991,228 shares (which
includes 1,866,090 shares that are the subject of presently exercisable options)
or 3.48% of the Company's outstanding common stock. Information with respect to
beneficial ownership is based upon information furnished by each officer,
director or nominee, or contained in filings made with the Securities and
Exchange Commission.
3
The following table presents information concerning the beneficial
ownership of Regions' common stock by certain of its executive officers at April
1, 2002. For beneficial ownership information of each director, see "Election of
Directors."
REGIONS STOCK BENEFICIALLY OWNED
--------------------------------
NAME AND ADDRESS TITLE OF CLASS NO. OF SHARES(1) % OF CLASS
---------------- -------------- ----------------- -----------
Carl E. Jones, Jr...................................... Common 873,164 .38%
Birmingham, Alabama
Richard D. Horsley..................................... Common 599,460 .26
Birmingham, Alabama
Allen B. Morgan, Jr.................................... Common 3,433,040 1.49
Memphis, Tennessee
John I. Fleischauer, Jr................................ Common 199,399 .09
Little Rock, Arkansas
Peter D. Miller........................................ Common 426,582 .19
Gainesville, Georgia
---------------
(1) The amounts shown represent the total shares beneficially owned by such
individuals, restricted shares (90,641 for Mr. Jones, 37,820 for Mr.
Horsley, 35,000 for Mr. Fleischauer, and 35,000 for Mr. Miller) and shares
which are issuable upon the exercise of all stock options which are
currently exercisable and exercisable within 60 days. Specifically, the
following individuals have the right to acquire the shares indicated after
their names, upon the exercise of such stock options: Mr. Jones, 362,903;
Mr. Horsley, 273,304; Mr. Morgan, 41,666; Mr. Fleischauer, 133,804; and Mr.
Miller 238,386.
No change in control of Regions has occurred since January 1, 2001, and no
arrangements are known to Regions which may at a later date result in a change
in control of the Company.
4
ELECTION OF DIRECTORS
Regions recommends the election of Sheila S. Blair, Allen B. Morgan, Jr.
and C. Kemmons Wilson, Jr. as directors, to hold office for a term of three
years expiring with the annual meeting of stockholders to be held in 2005 or
until their successors are elected and qualified. The proxy will be voted FOR
the nominees, unless otherwise directed. If any nominee is not available for
election, the proxies will be voted for such substitute nominee as the board of
directors may designate. Regions has no reason to believe that any substitute
nominee or nominees will be required. The proxies will not be voted for more
than three nominees.
INFORMATION ON DIRECTORS
The following table indicates the age, residence, principal occupation or
employment for the last five years of each nominee and director whose term of
office continues after the meeting, position and offices held with Regions or
its subsidiaries, the year the director was first elected, and the number of
shares of common stock of the Company beneficially owned at April 1, 2002.
YEAR
PRESENT OCCUPATION POSITION AND YEAR TERM OF
NAME OF NOMINEE AND PRINCIPAL OFFICES HELD WITH FIRST OFFICE
OR DIRECTOR, OCCUPATION FOR REGIONS AND ELECTED WILL
RESIDENCE, AND AGE LAST FIVE YEARS SUBSIDIARIES AS DIRECTOR EXPIRE
------------------ ------------------------- --------------------- ----------- -------
Sheila S. Blair(1) Retired, formerly Director, Regions 1989 2002
Birmingham, Executive Director, The
Alabama Greater Birmingham
67 Foundation (Community
foundation)
James B. Boone, Jr. Chairman of the Board, Director, Regions 1985 2003
Tuscaloosa, Boone Newspapers, Inc.
Alabama (Newspaper publishing,
66 management and ownership)
James S.M. French Chairman and President, Director, Regions 1986 2003
Birmingham, Dunn Investment Co.
Alabama (Construction,
62 construction materials,
investments)
Richard D. Horsley Vice Chairman of the Director, Regions; 1982 2003
Birmingham, Board and Executive Director, Regions
Alabama Financial Officer, Bank, Regions Agency,
59 Regions and Regions Bank Inc., Regions
Mortgage, Inc.,
Regions Life
Insurance Company,
and EFC Holdings
Corporation
Carl E. Jones, Jr. Chairman, President, and Director, Regions; 1997 2004
Birmingham, Chief Executive Officer, Director, Regions
Alabama Regions and Regions Bank, Bank, Regions
61 formerly Regional Mortgage, Inc.,
President, Regions Regions Interstate
Billing Service,
Inc., and EFC
Holdings Corporation
Allen B. Morgan, Jr.(1) Chairman and Chief Chairman and Chief 2001 2002
Memphis, Executive Officer, Morgan Executive Officer,
Tennessee Keegan, Inc. and Morgan Morgan Keegan &
59 Keegan & Company, Inc. Company, Inc.
Michael W. Murphy President, Marmick Oil Director, Regions 1998 2004
El Dorado, Company (Oil and gas
Arkansas exploration and
54 production)
NUMBER OF SHARES BENEFICIALLY
OWNED AT APRIL 1, 2002
NAME OF NOMINEE -----------------------------------
OR DIRECTOR, (2) PERCENT
RESIDENCE, AND AGE DIRECTLY INDIRECTLY OF CLASS
------------------ --------- ---------- --------
Sheila S. Blair(1) 107,082 17,048 .05%
Birmingham,
Alabama
67
James B. Boone, Jr. 31,609 11,733 .02
Tuscaloosa,
Alabama
66
James S.M. French 30,470 103,696 .06
Birmingham,
Alabama
62
Richard D. Horsley 599,460(3) 0 .26
Birmingham,
Alabama
59
Carl E. Jones, Jr. 835,990(3) 37,174 .38%
Birmingham,
Alabama
61
Allen B. Morgan, Jr.(1) 3,167,565(3) 265,475 1.49
Memphis,
Tennessee
59
Michael W. Murphy 0 3,639 .00
El Dorado,
Arkansas
54
5
YEAR
PRESENT OCCUPATION POSITION AND YEAR TERM OF
NAME OF NOMINEE AND PRINCIPAL OFFICES HELD WITH FIRST OFFICE
OR DIRECTOR, OCCUPATION FOR REGIONS AND ELECTED WILL
RESIDENCE, AND AGE LAST FIVE YEARS SUBSIDIARIES AS DIRECTOR EXPIRE
------------------ ------------------------- --------------------- ----------- -------
Henry E. Simpson Attorney, Lange, Simpson, Director, Regions 1973 2004
Birmingham, Robinson & Somerville LLP
Alabama
67
W. Woodrow Stewart Attorney, Stewart, Melvin Director, Regions 1999 2003
Gainesville, & Frost
Georgia
63
John H. Watson Chairman, Smith, Inc. Director, Regions 1999 2004
Dothan, (Heating and air
Alabama conditioning)
64
C. Kemmons Wilson, Jr.(1) Chairman, Wilson Hotel Director, Regions 1999 2002
Memphis, Management Co., Inc.
Tennessee (Hotel management and
55 franchising)
NUMBER OF SHARES BENEFICIALLY
OWNED AT APRIL 1, 2002
NAME OF NOMINEE ---------------------------------
OR DIRECTOR, (2) PERCENT
RESIDENCE, AND AGE DIRECTLY INDIRECTLY OF CLASS
------------------ --------- ---------- --------
Henry E. Simpson 148,202 57,523 .09%
Birmingham,
Alabama
67
W. Woodrow Stewart 14,750 0 .01
Gainesville,
Georgia
63
John H. Watson 170,604 18,778 .08
Dothan,
Alabama
64
C. Kemmons Wilson, Jr.(1) 188,964 0 .08
Memphis,
Tennessee
55
---------------
(1) Nominee for election at 2002 stockholders' meeting.
(2) Indirect beneficial ownership includes shares, if any, (a) owned as trustee
in which the director or any member of his/her immediate family has a
beneficial interest, or (b) held in a trust in which the director has a
beneficial interest, or (c) owned and traded in the name of the spouse,
minor children or other relative of the director living in his/her home, or
(d) owned by a corporation, partnership or other legal organization in which
the director has a substantial beneficial interest.
(3) Includes 273,304 shares for Mr. Horsley, 362,903 shares for Mr. Jones, and
41,666 for Mr. Morgan that are the subject of presently exercisable options.
Of the directors or nominees for director, none is a "control person" of
the Company by virtue of stock ownership. The only persons who might be
considered "control persons" of the Company are Carl E. Jones, Jr., President
and Chief Executive Officer and Richard D. Horsley, Vice Chairman and Executive
Financial Officer, who gain any control they may exercise by virtue of office.
Of the nominees and directors listed above, two also serve as directors of
other companies with a class of securities registered under the Securities
Exchange Act of 1934. James S. M. French serves as a director of Energen
Corporation, Hilb, Rogal and Hamilton Company, and Protective Life Corporation
and Michael W. Murphy as a director of Murphy Oil Company.
THE BOARD AND COMMITTEES OF THE BOARD
Regions held eight directors' meetings during 2001. All directors attended
at least 75% of the aggregate of the meetings held by the board and by
committees of which they were members, except Michael W. Murphy, who attended
50% of such meetings and James S.M. French, who attended 73% of such meetings.
Among other board committees, Regions has an audit committee and a compensation
committee that meet as needed. While Regions has no nominating committee
designated as such, the functions of a nominating committee are performed by the
personnel committee.
AUDIT COMMITTEE. The Audit Committee, which held four meetings in 2001,
consists of Sheila S. Blair (Chairman), Henry E. Simpson, and Lee J. Styslinger,
Jr. Committee members satisfy the independence requirements of both the Nasdaq
listing criteria and the Company's audit committee charter. Duties of the
Committee include reviewing with the Company's independent auditors, Ernst &
Young LLP, the planning and results of the auditing engagement, reviewing the
activities and recommendations of the Company's internal auditors, and reviewing
the adequacy of internal accounting controls. Additional information regarding
the functions performed by the Committee and its membership is set forth in the
"Report of Audit Committee," included immediately below.
6
AUDIT COMMITTEE REPORT
Regions' audited financial statements at and for the three year period
ended December 31, 2001, are included in Regions Annual Report on Form 10-K for
the fiscal year 2001. Regions, acting through its management and board of
directors, has the primary responsibility for the financial statements and the
reporting process, including the systems of internal accounting controls. Ernst
& Young LLP, independent auditors engaged by Regions, are responsible for
expressing an opinion on the conformity of those audited financial statements
with accounting principles generally accepted in the United States.
The Audit Committee oversees Regions' financial reporting process on behalf
of the board of directors. In fulfilling its oversight responsibilities, the
Committee has reviewed the audited financial statements with Regions'
management, including a discussion of the quality, not just the acceptability,
of the accounting principles, the reasonableness of significant judgments, and
the clarity of disclosures in the financial statements.
The Audit Committee has reviewed with Ernst & Young LLP their judgments as
to the quality, not just the acceptability, of the Company's accounting
principles and such other matters as are required to be discussed with the
Committee under auditing standards generally accepted in the United States.
The Audit Committee has discussed with Ernst & Young LLP their independence
in relation to Regions and Regions' management, including the matters addressed
in the written disclosures provided to Regions by Ernst & Young, as required by
the Independence Standards Board, the standard-setting body governing the
independence of auditors in relation to their public company clients. Fees for
the last annual audit were $823,000. Fees for audit related services were
$964,000 and fees for non-audit services were $3.7 million, totaling $4.7
million for other fees. Audit related services include fees for subsidiary
audits, statutory audits, employee benefit plan audits, FDICIA reviews, SAS-70
reviews, and SEC registration statements. Non-audit services included fees for
tax services, human resources actuarial services and risk management services.
No information technology consulting services were provided by the independent
auditors. The Committee has considered whether the provision of non-audit
services by Ernst & Young is compatible with maintaining their independence.
The Audit Committee has discussed with the Company's internal auditors and
Ernst & Young LLP the overall scope and plans for their respective audits. The
Committee regularly meets with Regions' internal auditors and Ernst & Young,
with and without management present, to discuss the results of their
examinations, their evaluations of the Company's internal accounting and
financial reporting controls, and the overall quality of the Company's financial
reporting.
In reliance on the reviews and discussions referred to above, the Audit
Committee recommended to the board of directors that the audited financial
statements be included in the Annual Report on Form 10-K for the year ended
December 31, 2001 for filing with the Securities and Exchange Commission.
Sheila S. Blair
Henry E. Simpson
Lee J. Styslinger, Jr.
Compensation Committee. The compensation committee, which held two
meetings during 2001, consists of Lee J. Styslinger, Jr. (Chairman), Sheila S.
Blair, and C. Kemmons Wilson, Jr.
The role of the compensation committee is to establish and monitor
compensation issues within the broad area of human resources management. The
compensation committee exercises administrative responsibility in working with
Company management on the development and clarification of the Company's
compensation philosophy, articulating reasons behind design of the Company's pay
and benefits programs and their relationship to corporate objectives and
competitive practices.
The functions of the compensation committee are recommending to the board
the compensation arrangements for executive management, approving compensation
arrangements for senior company officers, making recommendations to the board
concerning compensation plans in which officers are eligible to participate and
recommending to the board the establishment of or changes in benefit plans in
which officers
7
are eligible to participate, and recommending to the board the establishment of
or changes in benefit plans in which officers and employees participate
(including the authority to make amendments to tax-qualified plans in which
officers participate).
In discharging its responsibility, the compensation committee has, from
time to time, used the services of compensation consultants for guidance with
respect to competitive data and practices of other banks.
SECTION 16 TRANSACTIONS
Section 16(a) of the Securities Exchange Act of 1934 requires Regions'
executive officers and directors to file reports of ownership and changes in
ownership of Regions' stock with the Securities and Exchange Commission.
Executive officers and directors are required by SEC regulations to furnish
Regions with copies of all Section 16(a) forms they file.
Based on a review of the forms filed during 2001, Regions believes that its
executive officers and directors complied with all applicable filing
requirements.
8
EXECUTIVE COMPENSATION AND OTHER TRANSACTIONS
The following table is a summary of certain information concerning the
compensation earned by Regions' chief executive officer and each of the other
four most highly compensated executive officers during the last three fiscal
years.
SUMMARY COMPENSATION TABLE
ANNUAL COMPENSATION LONG TERM COMPENSATION
------------------------------------------- -------------------------------
AWARDS PAYOUTS
OTHER -------------------- -------- ALL
ANNUAL RESTRICTED STOCK LTIP OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS COMPENSATION STOCK(1) OPTIONS PAYOUTS COMPENSATION
--------------------------- ---- -------- ---------- ------------ ---------- ------- -------- ------------
Carl E. Jones, Jr........... 2001 $750,000 $ 871,875 0 $1,532,500 200,000 $ 0 $168,375(2)
Chairman, President and 2000 650,000 459,225 0 703,281 100,000 115,000 82,135
Chief Executive Officer 1999 650,000 184,860 0 0 33,750 384,688 74,741
Richard D. Horsley.......... 2001 357,000 375,388 0 558,100 80,000 0 130,525(3)
Vice Chairman and 2000 326,999 206,473 0 301,406 60,000 115,000 105,547
Executive Financial
Officer 1999 317,000 67,616 0 0 26,250 384,688 95,032
Allen B. Morgan, Jr.(4)..... 2001 130,000 1,370,000 0 0 125,000 0 2,425(5)
John I. Fleischauer, Jr..... 2001 320,000 334,404 0 558,100 80,000 0 41,795(6)
Regional President 2000 302,702 127,000 0 301,406 60,000 0 18,591
1999 282,703 108,762 0 0 18,804 0 0
Peter D. Miller............. 2001 310,000 266,009 0 558,100 80,000 0 42,051(7)
Regional President 2000 280,000 135,303 0 301,406 60,000 230,000 17,143
1999 240,000 87,106 0 0 26,250 0 18,707
---------------
(1) The Terms of the Restricted Stock awards are determined by the compensation
committee. Under the terms of the currently outstanding Restricted Stock
awards, the named executives must remain employed with Regions for the
duration of the restrictive period at the same or higher level in order for
the shares to be released. During the restriction period, the named
executive is eligible to receive dividends and exercise voting privileges on
such restricted shares. If any of the restrictions are removed at the
discretion of the compensation committee, the named executive officer will
receive a stock certificate for some percentage or all of the awarded
restricted shares. The restricted shares are not transferable by the named
executive during the restriction period. The compensation committee has the
discretion to modify the terms of the Restricted Stock awards. The
restrictive period for the restricted stock awarded in 2000 is seven years
from the date of grant, but the restrictions will automatically lapse sooner
if specified performance criteria are met. The performance criteria relate
to total stockholder return objectives relative to a group of peer
institutions. At December 31, 2001, Mr. Jones had 90,641 shares of
Restricted Stock with a fair market value of $2.7 million, Mr. Horsley had
37,820 shares of Restricted Stock with a fair market value of $1.1 million,
Mr. Morgan had no shares of Restricted Stock, Mr. Fleischauer had 35,000
shares of Restricted Stock with a fair market value of $1.1 million, and Mr.
Miller had 35,000 shares of Restricted Stock with a fair market value of
$1.1 million.
(2) Includes $72,092 allocated to Mr. Jones in 2001 under the 401k plan; $37,404
allocated to Mr. Jones in 2001 under the profit sharing plan; and $58,879
representing the estimated term component of the premium paid and the
estimated interest cost to Regions in 2001 resulting from premium payments
for a life insurance benefit plan for Mr. Jones. This plan serves as an
offset to an existing supplemental retirement plan.
(3) Includes $32,846 allocated to Mr. Horsley in 2001 under the 401k plan;
$17,821 allocated to Mr. Horsley in 2001 under the profit sharing plan; and
$79,858 representing the estimated term component of the premium paid and
the estimated interest cost to Regions in 2001 resulting from premium
payments for a life insurance benefit plan for Mr. Horsley. This plan serves
as an offset to an existing supplemental retirement plan.
(4) Mr. Morgan became employed by Regions on March 30, 2001; all amounts were
accrued and paid after that date.
9
(5) Represents the amount allocated to Mr. Morgan in 2001 under the 401k plan.
(6) Includes $25,146 allocated to Mr. Fleischauer in 2001 under the 401k plan
and $16,649 allocated to Mr. Fleischauer in 2001 under the profit sharing
plan.
(7) Includes $26,580 allocated to Mr. Miller in 2001 under the 401k plan and
$15,471 allocated to Mr. Miller in 2001 under the profit sharing plan.
STOCK OPTIONS
The following table presents information concerning individual grants of
options to purchase Regions' common stock made during 2001 to the named
executive officers.
OPTION GRANTS IN THE LAST FISCAL YEAR
NUMBER OF % OF TOTAL EXERCISE
SECURITIES UNDERLYING OPTIONS GRANTED PRICE GRANT DATE
NAME OPTIONS GRANTED TO EMPLOYEES IN 2001 (PER SHARE) EXPIRATION DATE PRESENT VALUE(1)
---- --------------------- -------------------- ----------- --------------- ----------------
Carl E. Jones, Jr. ....... 150,000 1.7% $27.905 1/16/11 $792,578
50,000 .6 30.65 4/18/11 289,501
Richard D. Horsley........ 80,000 .9 27.905 1/16/11 421,709
Allen B. Morgan, Jr. ..... 125,000 1.4 28.81 3/30/11 686,905
John I. Fleischauer,
Jr. .................... 80,000 .9 27.905 1/16/11 421,709
Peter D. Miller........... 80,000 .9 27.905 1/16/11 421,709
---------------
(1) Based on the Black-Scholes option pricing model adapted for use in valuing
executive stock options. The actual value, if any, an executive may realize
depends on the excess of the stock price over the exercise price on the date
the option is exercised, so there is no assurance the value realized by an
executive will be at or near the value estimated by the Black-Scholes model.
The estimated values under that model are based on the assumptions of
expected stock price volatility of .222, risk-free rate of return of 4.3%,
dividend yield of 3.7% and expected time to exercise of 5 years.
(2) All options granted in 2001 become exercisable graduated over a three year
period, with 50% exercisable after 12 months, 25% exercisable after 24
months, and 25% exercisable after 36 months, except that exercisability is
delayed for an additional 12 months to the extent the value of incentive
stock options (determined as of the date of grant) first exercisable in a
calendar year exceeds $100,000 as to any recipient.
10
The following table presents information concerning exercises of stock
options to purchase Regions' common stock during 2001 and the number and value
of unexercised options and stock appreciation rights (SAR) held by the named
executive officers.
AGGREGATED OPTION/SAR EXERCISES IN 2001
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY
OPTIONS/SARS OPTIONS/SARS
AT 12-31-01 AT 12-31-01
SHARES ACQUIRED VALUE EXERCISABLE/ EXERCISABLE/
NAME ON EXERCISE REALIZED UNEXERCISABLE(1) UNEXERCISABLE(1)
---- --------------- -------- ---------------------- --------------------
Carl E. Jones, Jr. .......... 12,080 $147,731 262,903/204,976 $2,002,070/$380,591
Richard D. Horsley........... 0 0 228,328/ 84,976 1,961,615/ 226,241
Allen B. Morgan, Jr. ........ 0 0 0/125,000 0/ 162,500
John I. Fleischauer, Jr. .... 0 0 93,804/ 80,000 600,975/ 176,400
Peter D. Miller.............. 0 0 142,500/ 80,000 722,400/ 176,400
---------------
(1) None of the currently exercisable options were granted with tandem SARs.
LONG-TERM INCENTIVE PLAN AWARDS IN 2001
No performance shares were awarded to Regions' named executive officers in
2001. Information concerning restricted stock awards during 2001 is included in
the summary compensation table on page 9.
RETIREMENT PLANS
The named executive officers are covered by the Regions Financial
Corporation Retirement Plan, a qualified defined benefit retirement plan, as
complimented by retirement compensation agreements pursuant to its supplemental
executive retirement program.
The following table shows estimated annual benefits payable at retirement,
including both qualified plan benefits and supplemental benefits, based on
combinations of final compensation and age at retirement.
PENSION PLAN TABLE
AGE AT RETIREMENT
---------------------------------------------------------------
COMPENSATION 55 60 62 63 64 65
------------ -------- -------- -------- -------- -------- --------
$125,000........................... $ 50,000 $ 62,500 $ 67,500 $ 70,000 $ 72,500 $ 75,000
150,000........................... 60,000 75,000 81,000 84,000 87,000 90,000
175,000........................... 70,000 87,500 94,500 98,000 101,500 105,000
200,000........................... 80,000 100,000 108,000 112,000 116,000 120,000
250,000........................... 100,000 125,000 135,000 140,000 145,000 150,000
300,000........................... 120,000 150,000 162,000 168,000 174,000 180,000
350,000........................... 140,000 175,000 189,000 196,000 203,000 210,000
400,000........................... 160,000 200,000 216,000 224,000 232,000 240,000
450,000........................... 180,000 225,000 243,000 252,000 261,000 270,000
500,000........................... 200,000 250,000 270,000 280,000 290,000 300,000
550,000........................... 220,000 275,000 297,000 308,000 319,000 330,000
600,000........................... 240,000 300,000 324,000 336,000 348,000 360,000
650,000........................... 260,000 325,000 351,000 364,000 377,000 390,000
700,000........................... 280,000 350,000 378,000 392,000 406,000 420,000
750,000........................... 300,000 375,000 405,000 420,000 435,000 450,000
11
In 2001, compensation covered by the plans for the five highest paid
executive officers was as follows: Mr. Jones, $750,000; Mr. Horsley, $357,000;
Mr. Morgan, $130,000; Mr. Fleischauer, $320,000; and Mr. Miller, $310,000.
Benefits are based on average compensation (limited to base salary) over
the three years prior to retirement, and are payable as a single life annuity
for single participants and a joint and 50% survivor annuity for married
participants. Other forms of payment are available on an actuarially equivalent
basis. Amounts shown are subject to offset for Company-sponsored long-term
disability payments and executive life insurance program cash values exceeding
premiums paid. Benefits are not offset by Social Security benefits. Benefits
will be reduced or eliminated if the participant terminates employment
voluntarily before age 55.
CHANGE OF CONTROL AGREEMENTS
Certain executive officers of Regions, including the five executive
officers named in the compensation table, have change of control agreements with
Regions which became effective in 2001. The terms of the agreements, which are
identical with respect to all the signatories, are summarized as follows.
The change of control agreement provides to each signatory executive
officer certain protections in the event a "change of control" in Regions
occurs. For this purpose, the agreement defines "change of control" to include,
generally, the acquisition by any person or group of beneficial ownership of
more than 50% of the combined voting power of Regions; a change in composition
of the board of directors such that incumbent directors make up less than a
majority of the board; completion of a merger, consolidation, or reorganization
(subject to exceptions for certain noncontrol transactions); and a liquidation
or dissolution of Regions or sale of all or substantially all of its assets.
Commencing on the date of a change of control and for the three year period
following, each signatory executive officer agrees to remain employed by
Regions, subject to the terms of the agreement, and to devote reasonable time
and attention and reasonable best efforts to perform the responsibilities of the
position. Regions agrees that the authority, duties, and responsibilities of
each signatory executive officer shall be at least commensurate with those in
effect prior to the change of control.
Also, during such three year period, the base salary of each signatory
executive officer may not be less than the base salary in effect prior to the
change of control, and the bonus may not be less than the highest bonus in the
preceding three years. Each signatory executive will be entitled to participate
in all incentive and retirement plans on terms comparable to other peer
executives, and to participate in all welfare benefit plans on comparable terms.
During such three year period following a change of control, Regions may
terminate the employment of a signatory executive officer only for "cause,"
defined generally as willfully failing to perform reasonably assigned duties, or
engaging in illegal conduct or gross misconduct which materially injures
Regions. The signatory executive officer may terminate employment for "good
reason," which includes Regions' reduction of the officer's duties or status,
and includes breach of the agreement by Regions.
If the signatory executive officer terminates employment for good reason,
or if the Company terminates employment for other than cause, the Company must
pay the executive officer accrued compensation and benefits plus an amount equal
to three times the aggregate base salary and highest annual bonus within the
past three years. If the executive officer's employment is terminated by death
or disability, Regions' liability is limited to benefits and accrued
compensation.
The signatory executive officer may resign for any reason during the 30 day
period following the first anniversary of a change of control. In that event,
the Company must pay the executive officer accrued compensation and benefits
plus an amount equal to three times the aggregate base salary and highest annual
bonus within the past three years.
If any payment under the agreement causes the signatory executive officer
to become subject to the excise tax imposed under section 4999 of the Internal
Revenue Code, then Regions must make an additional
12
payment such that, after tax on the additional payment, the executive will
retain an amount of the additional payment equal to the excise tax.
DIRECTORS' COMPENSATION
In 2001, directors of Regions were paid an annual directors' fee retainer
of $25,000, plus an additional annual retainer of $4,000 for each committee of
the board on which a director serves (or $6,000 in the case of the credit
committee), and an additional annual chairman's retainer of $2,000 for each
committee chairman. Directors who are employees of Regions or its subsidiaries
receive no fees for company board membership or attendance at company board or
board committee meetings. Directors are reimbursed for the reasonable cost of
travel and lodging for attendance at board and committee meetings.
Non-employee directors of Regions are eligible to participate in Regions
directors' deferred stock plan, under which a participating director may elect
to defer receipt of the participant's directors' fee retainer, which is invested
in Regions common stock and maintained in a rabbi trust. Regions contributes 25%
of the amount contributed by each participating director. Receipt and taxability
of benefits are deferred until the later of the time the participant reaches age
65 or terminates as a director.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The compensation committee of the Regions board consisted in 2001 of Mr.
Styslinger, Ms. Blair, and Mr. Wilson. In reaching compensation decisions
concerning executive officers other than Mr. Jones, the chief executive officer,
the committee took into account discussions with and recommendations by Mr.
Jones and Regions' senior personnel officer. There is no other involvement by
Regions' executive personnel in the committee's deliberations. Mr. Jones did not
participate in deliberations and decisions regarding his own compensation.
COMPENSATION COMMITTEE EXECUTIVE COMPENSATION REPORT
Set forth below is the Executive Compensation Committee Report of the
Compensation Committee.
EXECUTIVE COMPENSATION REPORT
General. Under the direct control of the compensation committee of the
Regions board, Regions has developed and installed compensation policies, plans,
and procedures that seek to enhance the profitability of Regions. Stockholder
value is aligned with the financial interests of Regions' senior managers as
financial goals are set for each year. Regions recognizes the importance of
annual and long-term incentive compensation plans to attract and retain
corporate officers and other key employees who are accordingly motivated to
perform to the best of their abilities. Both forms of incentive compensation are
variable and accordingly reflect corporate, strategic business unit, and
individual performance levels that encourage an explicit and continuing focus on
increasing profitability and stockholder value.
The committee's methodology and approach incorporate both qualitative and
quantitative considerations, which are reflected in the committee's
determinations concerning executive compensation and the specific components
thereof. In particular, the total compensation of the executive officers of
Regions can be divided into the categories of (i) annual base salary, (ii)
annual incentive compensation, and (iii) long-term incentive compensation. In
general, and as set forth in greater detail below, annual base salary is
intended to be comparable with executive base compensation paid by other similar
financial institutions; annual incentive compensation is intended to be tied
quantitatively to the achievement by Regions of pre-determined, objective
financial performance goals; and share-based grants for long-term incentive
compensation are intended to reward the executive recipients with incremental
value commensurate with long-term increases in value of Regions Common Stock.
The compensation decisions of the committee relative to Regions' principal
executive officers, including the five officers named above in the compensation
tables, are described below as to each of the three categories.
13
Base Salary. Annual base salaries are generally set at competitive levels
with similar financial institutions. Specifically the committee considers peer
group comparisons from survey data for other financial companies,
recommendations from an independent compensation consultant, and individual
performance assessments. For executives other than the chief executive officer,
the committee also considers the chief executive officer's recommendations.
While these factors are fully considered and discussed by the committee, the
committee members are not required to express or record the weight they assign
to any particular factor. In each instance the committee members reach a
consensus and the committee sets a base salary level for each executive.
In evaluating and establishing the base salaries of the executive officers,
the committee, in conjunction with its independent compensation consultant,
surveys the base salaries of the corresponding officers of other bank holding
companies in a survey group consisting of 18 companies closest to Regions in
asset size and deposit size, and also including the two other largest bank
holding companies headquartered in Alabama. The committee attempts to establish
the base salaries of the named executive officers to be competitive with the
base salaries of the corresponding executive officers of the companies in the
survey group, based on the most recent information available. Based on data as
of October 1, 2000, the information most recently available, the actual base
salaries of Regions named executive officers group was slightly below amounts
indicated by the survey comparison.
It should be noted that the survey comparison group is not the same as the
group of companies which make up the bank indices presented in the Comparison of
Five-year Cumulative Total Return graph included in this Proxy Statement. The
committee believes the use of a smaller survey group tailored by asset and
deposit size is more valid for salary evaluation purposes, even though not all
the survey companies are included in the indices, and even though numerous
companies included in the indices are not included in the survey group.
Based on the survey comparison, advice of an independent compensation
consultant, recommendations from the chief executive officer, and an inherently
subjective assessment of the comparative contributions of the executive
personnel to Regions' continued financial and operating success, the 2001 base
salaries for the other named officers were determined by the committee.
Annual Incentive Compensation. In the first quarter of 2001, the
compensation committee approved Regions' 2001 annual performance goals, as
prepared by Regions' comptroller, and as used for the purpose of determining
potential annual incentive compensation for the executive officers. The
performance goals were quantitative in nature, resulting in an incentive plan
formula that was weighted towards their overall importance in attaining Regions'
annual profit plan, and focused on the accomplishment of financial objectives,
before certain nonrecurring items, in the areas of: earnings per share,
minimizing growth in non-interest expense, consolidated interest margin, total
non-interest income, and combined revenues of Regions' securities subsidiaries
Morgan Keegan and Regions Investment Company. Regions exceeded threshold levels
in all five company-wide performance goals. Regions exceeded target performance
in three of the goals. Based on the various levels of goal achievement, the
chief executive and the other named officers received cash incentive awards as a
formula driven percentage of 2001 base salary levels.
Long Term Incentive Compensation. During 2001, the compensation committee
evaluated the merits of granting the chief executive officer, the named officers
and other key employees, further awards under Regions' long term incentive
plans. These plans provide the flexibility to grant long-term incentives in a
variety of forms, including stock options, performance shares and restricted
stock. With respect to stock-based compensation, the compensation committee
placed relatively more reliance on the advice of Regions' independent consultant
than in the cases of base salary and non stock-based compensation. As intended
with the establishment of the plans, the committee believes that it is highly
desirable to increase management's equity ownership interest in Regions. The
committee further believes that its incentive awards under the plans
successfully focused and committed Regions' management on building profitability
and stockholder value. The primary purpose of LTIP awards is to encourage
management members to take long-term steps to achieve and sustain earnings per
share and return on equity objectives. Accordingly, the committee further
awarded LTIP grants during 2001, including the award of performance accelerated
restrictive shares, which
14
are designed to accelerate vesting in return for an increased level of total
shareholder return. The committee, based on information from surveys and its
independent consultant, also awarded the overall 2001 grant at a level of
approximately 150% that of the 2000 grant. This was done in order to bring the
LTIP program to a competitive level with that of other peer institutions. The
grants also were issued with a graduated vesting schedule of three years.
In establishing the LTIP awards for the named officers, senior management
and other key employees, the committee reviewed with the chief executive officer
the recommended individual awards, considering the scope of accountability,
financial goals, and anticipated performance requirements and contributions
expected of the participants. The committee also took into account the number
and size of LTIP awards and stock options already held by executive officers
considered for additional awards.
Compensation of Chief Executive Officer. In deliberating the compensation
of the Chief Executive Officer, the committee adheres to the same basic
methodology and approach applied to executive compensation generally.
Accordingly, the base salary determination reflects the peer group survey
comparison described above, the annual incentive compensation is based on an
objective formula and tied to Regions' achievement of pre-determined,
quantitative financial goals, and the realization of long-term incentive
compensation, by its nature, is aligned with the realization of long-term
stockholder value.
In addition, the committee, in deliberating the chief executive officer's
base compensation, takes into account other factors, most notably, total
compensation target, individual performance and general market factors. The
committee set Mr. Jones' base salary for 2001 at a level it concluded would be
appropriate in light of the circumstances the committee considered, while
recognizing that his base salary would remain in the low end of the range of
salaries of chief executives of comparable bank holding companies.
LTIP awards for Mr. Jones were set separately and independently of his
participation, based on ownership and total compensation objectives that
reflected data from selected peer companies, his total compensation, and the
committee's desire to set appropriate long-term performance objectives.
Summary. The compensation committee of the board of directors remains
dedicated to ensuring that Regions' overall compensation program for its
executive officers, senior management and other key employees is properly
designed to:
- Attract, motivate, and retain outstanding contributors;
- Maintain a base salary structure that is competitive in Regions'
marketplace;
- Link annual incentive awards with specific performance targets that yield
superior results; and
- Provide long-term incentive awards that couple management ownership with
stockholder value.
Section 162(m) of the Code imposes certain limitations on the deductibility
by Regions for federal income tax purposes of compensation amounts paid to
highly paid executives. The committee is aware of the potential effects of
Section 162(m) of the Code. The committee has concluded that ensuring
deductibility under Section 162(m) is not as important as structuring incentive
compensation based on methodology and factors it deems appropriate. The
committee has chosen not to distort its methodology and application of the
factors it believes pertinent so as to ensure that all executive compensation is
deductible under Section 162(m). While the committee intends that Regions'
compensation plans will meet, to the extent practical, the prerequisites for
deductibility under Section 162(m), if it develops that a portion of the
compensation of one or more executive officers is not deductible under Section
162(m), then the committee expects that Regions would honor its obligations to
the executive officers under the compensation arrangements approved by the
committee.
15
The compensation committee will continue to review and evaluate
compensation programs at least annually. When and where appropriate, the
committee will consult with independent compensation consultants, legal
advisors, and Regions' public accounting firm with respect to the proper design
of the program toward achieving Regions' objectives as set forth by the chief
executive officer and the Regions board.
This report furnished by:
Lee J. Styslinger, Jr., Chairman
Sheila S. Blair
C. Kemmons Wilson, Jr.
FINANCIAL PERFORMANCE
Set forth below is a graph comparing the yearly percentage change in the
cumulative total return of Regions' common stock against the cumulative total
return of the S & P 500 Index, the NASDAQ Banks Index, and the S & P Banks Index
for the past five years. This presentation assumes that the value of the
investment in Regions' common stock and in each index was $100 and that all
dividends were reinvested. Regions has not previously included the S & P Banks
Index in this presentation. Given Regions' present size, geographic coverage,
and Regions' plan to list its common stock on the New York Stock Exchange,
Regions believes the S & P Bank Index is now more appropriate for comparison
purposes.
(PERFORMANCE GRAPH)
12/31/96 12/31/97 12/31/98 12/31/99 12/31/00 12/31/01
Regions $100.00 $166.50 $163.00 $104.70 $119.30 $135.90
S&P 500 Index $100.00 $133.50 $172.20 $208.50 $190.00 $167.60
NASDAQ Bank Index $100.00 $167.40 $166.30 $159.90 $182.40 $197.40
S & P Banks Index $100.00 $144.00 $154.00 $134.00 $158.00 $159.00
16
OTHER TRANSACTIONS
Directors and officers of Regions and their associates were customers of,
and had transactions with, the affiliate banks in the ordinary course of
business during 2001; additional transactions may be expected to take place in
the ordinary course of business. Included in such transactions are outstanding
loans and commitments from the affiliate banks, all of which were made on
substantially the same terms, including interest rates and collateral, as those
prevailing at the time for comparable transactions with other persons, and did
not involve more than the normal risk of collectibility or present other
unfavorable features.
Regions retained during 2001 and prior years and proposes to retain in the
future on behalf of the Company or certain of its subsidiaries the law firms
Lange, Simpson, Robinson, & Somerville LLP, of which director Henry E. Simpson
is a partner. During 2001, the Company or its subsidiaries paid legal fees of
$2.5 million to the firm of Lange, Simpson, Robinson & Somerville LLP.
RATIFICATION OF SELECTION OF INDEPENDENT AUDITORS
The Board of Directors and the Audit Committee have selected Ernst & Young
LLP as the Company's independent auditors for the year ending December 31, 2002.
The Board of Directors recommends that the stockholders ratify the selection of
Ernst & Young. Ernst & Young (or its predecessor) has served as the Company's
independent auditors since the Company's inception in 1971.
Ernst & Young LLP has been engaged to provide auditing services and also to
provide tax services and general accounting advice. In making this selection,
the Board of Directors and the Audit Committee considered whether the engagement
by the Company of Ernst & Young for services other than audit services is
compatible with Ernst & Young's independence.
A representative of the firm will be present at the stockholders' meeting
to make a statement if he or she so desires and to respond to appropriate
questions from stockholders.
PROPOSALS OF STOCKHOLDERS
Proposals by stockholders intended to be presented at Regions 2003 annual
meeting of stockholders must be received by Regions not later than December 11,
2002, for consideration for possible inclusion in the proxy statement relating
to that meeting.
OTHER BUSINESS
Regions does not know of any business to be presented for action at the
meeting other than those items listed in the notice of the meeting and referred
to herein. If any other matters properly come before the meeting or any
adjournment thereof, it is intended that the proxies will be voted in respect
thereof in accordance with the recommendations of the board of directors.
By Order of the Board of Directors
/s/ Samuel E. Upchurch, Jr.
Samuel E. Upchurch, Jr.
Corporate Secretary
Dated April 10, 2002
17
REGIONS FINANCIAL CORPORATION
P.O. BOX 10247
BIRMINGHAM, ALABAMA 35202-0247
P
R
O THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
X
The undersigned hereby appoints Carl E. Jones, Jr., Richard
Y D. Horsley, and Samuel E. Upchurch, Jr., and each or any one of them,
as Proxies, each with the power to appoint his substitute, and hereby
authorizes each to represent and to vote, as designated on the reverse
side, all the shares of common stock of Regions Financial Corporation
("Regions") held of record by the undersigned on April 1, 2002, at the
Annual Meeting of stockholders to be held May 20, 2002, or any
adjournment thereof. This card also constitutes voting instructions for
all shares beneficially owned and votable, if any, by the undersigned
as a participant in the Regions Financial Corporation Dividend
Reinvestment Plan, 401(K) Plan (including the Supplemental 401(K) Plan)
and/or Directors Stock Investment Plan and held of record by the
administrators and trustees of such Plans. If no direction is made as
to the manner of voting, the proxy will be voted for the nominees
listed in Item 1 and for Item 2.
Should the undersigned be present and elect to vote at the
Annual Meeting or at any adjournment thereof and after notification to
the Secretary of Regions at the meeting of the stockholder's decision
to terminate this proxy, then this proxy shall be deemed terminated and
of no further force and effect. This proxy may also be revoked by
submission of a properly executed subsequently dated proxy or by
written notice to Regions for receipt prior to the Annual Meeting.
SEE REVERSE SIDE
------------------------------------------------------------------------------
FOLD AND DETACH HERE
PLEASE MARK YOUR
[X] VOTES AS IN THIS
EXAMPLE.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER
DIRECTED HEREIN BY THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS MADE, THIS
PROXY WILL BE VOTED FOR THE NOMINEES LISTED IN ITEM 1 AND FOR ITEM 2.
FOR WITHHELD FOR AGAINST ABSTAIN
1. Election of [ ] [ ] To elect the three nominees for 2. To ratify the Board of
Directors director of Regions listed below: Directors' selection of [ ] [ ] [ ]
01 Sheila S. Blair, Ernst & Young LLP as
For, except vote withheld from 02 Allen B. Morgan, Jr. and independent auditors of
the following nominee(s): 03 C. Kemmons Wilson, Jr. Regions for the year ending
December 31, 2002.
3. In their discretion on such other business as may
properly come before the meeting or any adjournment
thereof.
Please sign exactly as name appears on this card. When
signing as attorney, executor, administrator, trustee
or guardian, please give full title. If shares are
held jointly, each holder must sign.
Please complete, date, sign and mail this proxy
promptly in the enclosed postage-prepaid envelope.
------------------------------------------------------
2002
------------------------------------------------------
SIGNATURE(S) DATE
-----------------------------------------------------------------------------------------------------------------------------------
FOLD AND DETACH HERE
REGIONS FINANCIAL CORPORATION
Regions stockholders can now vote their shares either by telephone or
in the Internet. This eliminates the need to return the proxy card. To
vote your shares over the telephone or the internet you must have your
proxy card and SSN available. The series of numbers that appear in the
box above must be used to access the system.
1. To vote over the telephone: On a touch-tone telephone call
1-(877)-PRX-VOTE (1-877-779-8683), 24 hours a day, seven days
a week.
2. To vote over the Internet: Log onto the Internet and go the
website www.eproxyvote.com/rgbk.
Your vote over the telephone or the internet authorizes the
named proxies in the same manner as if you marked, signed, dated and
returned your proxy card. If you choose to vote your shares over the
telephone or the internet, there is no need for you to mail back the
proxy card.
Regions Financial Corporation RSVP Card for May 20, 2002
Annual Meeting
I am a registered stockholder of Regions Financial Corporation and plan to
attend the 2002 Annual Meeting of Stockholders.
NAME(PLEASE PRINT NAME AS SHOWN ON PROXY CARD
NUMBER AND STREET
MAILING ADDRESS
CITY, STATE, AND ZIP CODE
DAYTIME PHONE EMPLOYEE
/ / yes / / no
I will be accompanied by ___ guest(s) (names and relationships)