EX-99.1 4 ex991.txt FORM 11-K FOR THE SYNOVUS EMPLOYEE STOCK PURCHASE PLAN Exhibit 99.1 FORM 11-K (Mark One) [X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2002 ------------------------------------------------------ OR [ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to ------------------------ ---------------------- Commission file number 1-10312 ---------------------------------------------------------- SYNOVUS FINANCIAL CORP. EMPLOYEE STOCK PURCHASE PLAN SYNOVUS FINANCIAL CORP. 901 FRONT AVENUE SUITE 301 COLUMBUS, GEORGIA 31901 (706) 649-5220 SYNOVUS FINANCIAL CORP. EMPLOYEE STOCK PURCHASE PLAN Financial Statements December 31, 2002, 2001, and 2000 (With Independent Auditors' Report Thereon) INDEPENDENT AUDITORS' REPORT The Plan Administrator Synovus Financial Corp. Employee Stock Purchase Plan: We have audited the accompanying statements of financial condition of the Synovus Financial Corp. Employee Stock Purchase Plan as of December 31, 2002 and 2001, and the related statements of operations and changes in plan equity for each of the years in the three-year period ended December 31, 2002. These financial statements are the responsibility of the Plan's administrator. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial condition of the Synovus Financial Corp. Employee Stock Purchase Plan as of December 31, 2002 and 2001, and the results of its operations and changes in its plan equity for each of the years in the three-year period ended December 31, 2002 in conformity with accounting principles generally accepted in the United States of America. April 11, 2003 /s/KPMG LLP SYNOVUS FINANCIAL CORP. EMPLOYEE STOCK PURCHASE PLAN Statements of Financial Condition December 31, 2002 and 2001
2002 2001 ------------ ------------ ASSETS Common stock of Synovus Financial Corp. at market value - 2,507,469 shares (cost $41,725,679) in 2002 and 2,490,767 shares (cost $36,757,923) in 2001 (note 2) $ 48,644,895 62,368,026 Dividends receivable 370,175 317,735 Cash 502,514 482,005 ------------ ------------ $ 49,517,584 63,167,766 ============ ============ LIABILITIES AND PLAN EQUITY Plan equity (4,577 and 5,426 participants in 2002 and 2001, respectively) $ 49,517,584 63,167,766 ============ ============
See accompanying notes to financial statements. 2 SYNOVUS FINANCIAL CORP. EMPLOYEE STOCK PURCHASE PLAN Statements of Operations and Changes in Plan Equity Years ended December 31, 2002, 2001, and 2000
2002 2001 2000 ------------- ------------ ------------ Dividend income $ 1,452,578 1,279,615 1,186,878 Realized gain on distributions to participants (note 5) 5,036,924 9,056,709 5,171,516 Unrealized (depreciation) appreciation of common stock of Synovus Financial Corp. (note 4) (18,690,887) (13,549,202) 14,166,917 Contributions (notes 1 and 3): Participants 7,991,626 7,392,598 6,620,926 Participating employers 3,995,292 3,697,695 3,307,572 ------------- ------------ ------------ (214,467) 7,877,415 30,453,809 Withdrawals by participants - common stock of Synovus Financial Corp. at market value (531,105 shares in 2002, 627,031 shares in 2001, and 655,064 shares in 2000) - (note 5) (13,435,715) (17,437,311) (12,738,838) ------------- ------------ ------------ (Decrease) increase in Plan equity for the year (13,650,182) (9,559,896) 17,714,971 Plan equity at beginning of year 63,167,766 72,727,662 55,012,691 ------------- ------------ ------------ Plan equity at end of year $ 49,517,584 63,167,766 72,727,662 ============= ============ ============
See accompanying notes to financial statements. 3 SYNOVUS FINANCIAL CORP. EMPLOYEE STOCK PURCHASE PLAN Notes to Financial Statements December 31, 2002, 2001, and 2000 (1) DESCRIPTION OF THE PLAN The Synovus Financial Corp. Employee Stock Purchase Plan (the Plan) was implemented as of January 15, 1979. The Plan is designed to enable participating Synovus Financial Corp. (Synovus) and subsidiaries' employees to purchase shares of Synovus common stock at prevailing market prices from contributions made by them and Synovus and subsidiaries (the Participating Employers). Synovus serves as the Plan administrator. Prior to August 1, 2002, the Plan agent was State Street Bank and Trust Company. Effective August 1, 2002, the Plan agent is Mellon Investor Services, LLC, hereafter referred to as "Agent." Through June 30, 2002, all employees who worked twenty hours per week or more were eligible to participate in the Plan after completing three months of continuous employment prior to the beginning of a calendar quarter. Effective July 1, 2002, the Plan was amended to allow employees who work twenty hours per week or more to become eligible to participate in the plan on the first payroll date after completing three months of continuous employment. The Plan also permits a participant who has successfully completed the State of Georgia's Intellectual Capital Partnership Program (ICAPP) to begin participation in the Plan immediately upon the participant's commencement of employment with a Participating Employer. Such participant's period of employment for purposes of determining the maximum compensation participant payroll deduction under the Plan will be measured beginning on the date of such participant's commencement of participation in such program. Participants contribute to the Plan through payroll deductions as a percentage of compensation. The maximum contribution ranges from 3% to 7% of compensation, based on years of service. Through June 30, 2002, the minimum contribution percentage was 0.5% of compensation. Effective July 1, 2002, the minimum allowable contribution is 1% of compensation. Matching contributions to the Plan are to be made by the Participating Employers in an amount equal to one-half of each participant's contribution. All contributions to the Plan vest immediately. The Plan provides, among other things, that all expenses of administering the Plan shall be paid by Synovus. Brokers' fees, commissions, postage, and other transaction costs incurred in connection with the purchase in the open market of Synovus common stock under the Plan are included in the cost of such stock to each participant. The Plan provides that each participant may withdraw at any time all or some of his account balance. The participant may elect to receive the proceeds in the form of shares of common stock of Synovus or in a lump-sum cash distribution. Prior to January 23, 2002, participants who had previously withdrawn shares from their Plan account remained eligible to participate, but with certain exceptions were precluded from receiving matching contributions from the Participating Employers for a specified period of time. Effective January 23, 2002, the Plan was amended to remove the above mentioned restriction on receiving matching contributions upon a withdrawal of shares from the Plan. Synovus expects to maintain the Plan indefinitely, but reserves the right to terminate or amend the Plan at any time, provided, however, that no termination or amendment shall affect or diminish any participant's (Continued) 4 SYNOVUS FINANCIAL CORP. EMPLOYEE STOCK PURCHASE PLAN Notes to Financial Statements December 31, 2002, 2001, and 2000 right to the benefit of contributions made by him or his employer prior to the date of such amendment or termination. Synovus reserves the right to suspend participating employer contributions to the Plan if its board of directors feels that Synovus' financial condition warrants such action. (2) SUMMARY OF ACCOUNTING POLICIES The investment in Synovus common stock is stated at market value which is based on the closing price at year-end obtained by using market quotations on the principal public exchange market for which such security is traded. The December 31, 2002 and 2001 market values were $19.40 and $25.05 per share, respectively. The realized gain on distributions to participants is determined by computing the difference between the average cost per common stock share and the market value per share at the date of the distribution to the participants. Dividend income is accrued on the record date. Contributions by participants and Participating Employers, as well as withdrawals, are accounted for on the accrual basis. The Plan is not qualified under Sections 401(a) or 501(a) of the Internal Revenue Code of 1986, as amended. The Plan does not provide for income taxes because any income is taxable to the participants. Participants in the Plan must treat as compensation income their pro rata share of contributions made to the Plan by their employer. Cash dividends paid on Synovus common stock purchased under the Plan will be taxable to the participants on a pro rata basis for Federal and state income tax purposes during the year any such dividend is received by the participant or the Plan. Upon disposition of the Synovus common stock purchased under the Plan, participants must treat any gain or loss as long-term or short-term capital gain or loss depending upon when such disposition occurs. The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, and changes therein, and disclosure of contingent assets and liabilities. Actual results could differ from those estimates. (Continued) 5 SYNOVUS FINANCIAL CORP. EMPLOYEE STOCK PURCHASE PLAN Notes to Financial Statements December 31, 2002, 2001, and 2000 (3) CONTRIBUTION Contributions by Participating Employers and by participants are as follows:
2002 2001 2000 ---------------------------- ---------------------------- ----------------------------- PARTICIPATING PARTICIPATING PARTICIPATING PARTICIPATING EMPLOYERS EMPLOYERS PARTICIPANTS EMPLOYERS PARTICIPANTS EMPLOYERS PARTICIPANTS --------------------------------------- ------------- ------------ ------------- ------------ ------------- ------------ Synovus Financial Corp. $ 754,288 1,510,390 659,656 1,321,014 238,201 476,402 Columbus Bank and Trust Company 333,828 667,614 320,172 640,925 371,061 743,835 Commercial Bank and Trust Company of Troup County 34,908 69,809 32,457 65,011 32,623 65,559 Commercial Bank of Thomasville 52,010 104,012 49,355 98,706 48,416 96,828 Security Bank and Trust Company of Albany 48,014 95,965 55,350 110,693 53,011 106,014 Sumter Bank and Trust Company 40,832 81,660 36,629 73,269 34,401 68,844 The Coastal Bank of Georgia 47,833 95,661 47,173 94,787 47,588 95,620 First State Bank and Trust Company 39,685 79,362 39,028 78,397 41,102 82,591 Bank of Hazlehurst 15,477 30,952 16,168 32,421 15,717 31,431 Cohutta Banking Company 40,439 80,872 35,579 71,204 33,176 66,346 Bank of Coweta 55,863 111,718 54,907 109,805 59,053 118,363 Citizens Bank & Trust of West Georgia 86,381 172,749 83,006 165,999 77,841 155,672 Synovus Securities, Inc. 187,350 374,689 164,216 329,372 131,227 262,198 The Quincy State Bank 30,276 60,548 29,761 59,516 29,993 59,980 Community Bank and Trust of Southeast Alabama 24,485 48,966 24,296 48,588 26,697 53,504 Tallahassee State Bank 21,436 42,869 21,330 42,655 18,463 36,924 CB&T Bank of Middle Georgia 41,018 82,031 36,272 72,968 40,387 80,767 First Community Bank of Tifton 40,694 81,382 38,078 76,782 38,497 77,252 Synovus Technologies, Inc. -- -- -- -- 189,541 379,644 CB&T Bank of Russell County 34,326 68,647 35,272 70,540 34,066 68,127 Sea Island Bank 35,718 71,429 42,077 77,746 37,820 75,636 Citizens First Bank 41,777 83,547 39,006 78,109 36,365 72,724 First Coast Community Bank 24,932 49,861 20,358 41,329 19,329 38,655 Bank of Pensacola 76,836 153,334 38,046 76,086 34,604 69,203 Vanguard Bank and Trust 65,984 131,956 63,060 127,072 53,102 106,896 The National Bank of Walton County 37,535 75,064 36,448 72,890 37,635 75,266 Athens First Bank & Trust Co. 139,416 278,815 131,285 262,557 124,251 248,493 The Citizens Bank of Fort Valley 18,380 36,757 15,623 31,244 14,337 28,714 The Citizens Bank of Cochran 10,158 20,314 10,789 21,578 10,306 20,610 First Commercial Bank of Birmingham 124,945 249,877 109,881 219,761 101,537 203,061 First National Bank of Jasper 84,556 169,098 83,830 167,647 81,383 162,411 Sterling Bank 34,570 69,135 32,077 64,149 32,318 64,632 The Bank of Tuscaloosa 43,352 86,697 44,183 88,359 43,140 86,273 First Commercial Bank of Huntsville 43,909 87,812 39,329 78,652 34,762 69,520 Peachtree National Bank 48,987 97,967 48,824 97,642 45,444 91,014 Synovus Mortgage Corp. 217,767 435,517 198,435 392,059 106,690 212,478 Citizens & Merchants State Bank 25,424 50,845 27,189 54,374 31,469 62,933 Synovus Trust Company 161,567 323,119 138,387 277,526 131,951 264,359 Synovus Service Corp. -- -- -- -- 195,237 392,609 The National Bank of South Carolina 253,789 507,539 247,187 494,371 231,542 462,991 Bank of North Georgia 248,713 497,407 205,409 410,911 131,570 263,127 Georgia Bank & Trust 34,056 68,107 28,504 57,002 26,223 52,440 Synovus Trust Company of Florida 12,456 24,911 9,755 19,509 7,633 15,266 Synovus Trust Company of Alabama 27,780 55,557 27,914 55,827 15,384 30,768 Charter Bank and Trust Co. 40,056 80,106 42,226 84,446 42,034 84,064 Merit Leasing Corp. 2,855 5,710 3,046 6,091 1,491 2,982 Mountain National Bank 38,291 76,577 36,096 72,187 33,733 67,462 Total Technology Ventures 3,029 6,057 3,006 6,012 2,562 5,125 ProCard 85,369 170,731 90,082 180,078 42,947 85,893 Synovus Insurance of Georgia 10,461 20,921 9,832 19,663 8,505 17,010 Pointpathbank -- -- 30,603 61,274 10,718 21,434 TSYS Total Debt Management, Inc. -- -- 50,266 101,323 20,489 40,976 Creative Financial Group 44,812 89,621 16,237 32,472 -- -- GLOBALT, Inc. 18,284 36,567 -- -- -- -- Machinery Leasing Co., Inc. 654 1,314 -- -- -- -- The Bank of Nashville 9,731 19,461 -- -- -- -- ------------- --------- --------- --------- --------- --------- Total contributions $ 3,995,292 7,991,626 3,697,695 7,392,598 3,307,572 6,620,926 ============= ========== ========= ========= ========= =========
(Continued) 6 SYNOVUS FINANCIAL CORP. EMPLOYEE STOCK PURCHASE PLAN Notes to Financial Statements December 31, 2002, 2001, and 2000 (4) UNREALIZED (DEPRECIATION) APPRECIATION OF SYNOVUS COMMON STOCK Changes in unrealized (depreciation) appreciation of Synovus common stock are as follows:
2002 2001 2000 ------------- ----------- ---------- Unrealized appreciation at end of year $ 6,919,216 25,610,103 39,159,305 Unrealized appreciation at beginning of year 25,610,103 39,159,305 24,992,388 ------------- ----------- ---------- Unrealized appreciation (depreciation) for the year $ (18,690,887) (13,549,202) 14,166,917 ============= =========== ==========
(5) REALIZED GAIN ON WITHDRAWAL DISTRIBUTIONS TO PARTICIPANTS The gain realized on withdrawal distributions to participants is summarized as follows:
2002 2001 2000 ------------- ----------- ---------- Market value at dates of distribution or redemption of shares of Synovus common stock $ 13,435,715 17,437,311 12,738,838 Less cost (computed on an average cost basis) of shares of Synovus common stock distributed or redeemed 8,398,791 8,380,602 7,567,322 ------------- ----------- ---------- Total realized gain $ 5,036,924 9,056,709 5,171,516 ============= =========== ==========
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