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COMPASS BANCSHARES, INC.
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COMPASS BANCSHARES, INC.
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<PAGE>
DIRECTIONS
COMPASS NEWS FOR EMPLOYEES
March 31, 1995 Volume 1, Issue 7
JONES ENDS SPECULATION ABOUT IN-MARKET MERGER
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The deposition of Chairman and CEO D. PAUL JONES, JR. generated a new round
of media attention about the consideration of an in-market merger. In his
deposition taken prior to the March 28 federal court hearing, Jones stated that
Harry B. Brock, Jr. approached a director of Regions Financial Corporation about
the possibility of the two banks merging.
In his testimony, Jones said that according to Regions CEO Stanley Mackin,
Brock told the director that Mackin should call Jones to discuss a merger. Jones
stated that he and Mackin subsequently met and held a "very tentative
discussion" that "never really went anywhere."
In the March 4 edition of Directions, Jones noted that an in-market merger
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was one of the options considered and rejected by the board in connection with
its Feb. 1 approval for going forward with Compass' strategic plan. There were
no discussions after that.
The company's strategic options were reviewed in an evaluation begun last
fall by independent investment advisor CS First Boston. The evaluation was
initiated following Brock's announcement at the Oct. 17 board meeting that he
had shopped the bank and had gotten a proposal from First Union to buy Compass.
In the March 4 Directions, responding to rumors, Jones said, "Our retired
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chairman knows full well that as a part of our strategic planning process we
considered the possibility of an in-market merger. He also knows that the idea
was rejected and that his discussion of the board's deliberations violates the
confidence placed in him by the board. The rumors that he is spreading are
designed to breed suspicion and mistrust and divert attention away from the fact
that his proposal would have cost many employees their jobs.
"We must not allow ourselves to be drawn into a public debate over every
idea considered and rejected by our board. Let's not get confused here. Mr.
Brock is saying that he absolutely will sell the bank under his plan. The board
is saying that isn't in their plan at all."
Further, Jones stated in the newsletter that there "are no substantive or
ongoing talks with any company" about a possible merger of equals or a sale of
the bank.
*****
TESTIMONY DISCLOSES: BROCK SECRETLY TAPED EMPLOYEE TELEPHONE CONVERSATIONS
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In a disturbing revelation, Harry B. Brock, Jr. has admitted that he
secretly taped up to 46 hours of telephone conversations since embarking on the
proxy contest for control of Compass Bank. On 31 90-minute tapes, Brock recorded
conversations with Compass employees, as well as reporters, securities analysts,
lawyers and shareholders.
The admissions came to light during Brock's sworn testimony for the March
28 hearing in U.S. District Court in the lawsuit that he filed against Compass
attempting to stop the scheduled shareholder vote.
In attempting to justify his curious behavior, Brock stated that he was
attempting to protect himself from being misquoted. His explanation, however,
fails to tell why he did not warn the other party that a recording was being
made or why he choose to record only certain persons. Brock did not say what use
he intended to make of the tapes. Here again, Brock's tactics just don't make
sense.
*****
JUDGE RULES: LET SHAREHOLDERS DECIDE
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ANNUAL MEETING ON FOR APRIL 11
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Compass Bank prevailed in a challenge issued by Harry B. Brock, Jr. in
federal court. With the ruling issued March 28 by U.S. District Judge Sam C.
Pointer, Jr., the shareholders' annual meeting is on as scheduled for April 11.
After hearing arguments on both sides, Judge Pointer denied all of Brock's
motions and gave the bank the go-ahead to proceed with the shareholder vote.
Among other things, Brock had asked the judge to set a new date for the
annual meeting if he found that Compass violated federal rules when it set a
March 8 record date. He also wanted the judge to make Compass tell shareholders
that it began soliciting proxies before it had met Securities and Exchange
Commission filing deadlines and to make Compass start over in the proxy
solicitation process.
"We are pleased that Judge Pointer denied Mr. Brock's request," said
Chairman and CEO D. PAUL JONES, JR. "The court flatly denied the group's
attempts to delay our annual meeting and put the future of Compass Bancshares
back in the hands of the shareholders where Mr. Brock initially said he wanted
it."
*****
VOTING DEADLINE APPROACHING
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Do not sit on the sidelines or wait to the last minute. Your vote is
important to the future of our company.
The DEADLINE for returning your instruction cards to Corporate Election
Services is APRIL 7, 1995, AT 5 P.M. EASTERN TIME.
At press time, less than 50 percent of the Employee Stock Ownership Plan
has voted.
Shares held in the Monthly Investment Plan, with a broker, or in
certificate form should be voted as soon as possible to ensure that they are
counted at the upcoming meeting.
*****
TELEPHONE BANKING TO OPEN NEW MARKET
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As our lives become increasingly complicated by car pools, power lunches
and health clubs, we welcome hassle-free services wherever we find them.
Recognizing that convenience is increasingly important, Compass is
introducing a new telephone banking service that allows for expanding its
customer base to those of us who want to be able to make loan applications while
sitting in traffic or standing on the links.
Beginning April 3, Compass will begin accepting applications for
installment loans and equity lines of credit through calls received by the new
Telephone Banking Department.
"This service is an added convenience for our customers," said BOB
ETHEREDGE, manager of telephone banking. "They can call a toll-free number,
provide all their application information and receive a response in a matter of
days."
Even though the new lines will originate through the Telephone Banking
Department, volume will be booked back to the banking office in which it closes.
"Rather than competing for existing business within the banking offices, we
are working to tap into a new market of customers who may not have previously
chosen to bank with Compass," Etheredge said.
Loans will be approved through Centralized Underwriting, and documents will
be prepared in Centralized Processing. For consumer loans and smaller equity
lines, completed paperwork will be mailed to the banking office chosen by the
customer, where the loan will be signed. Larger equity lines will continue to be
closed through an attorney.
Telephone sales representatives will accept applications from 7 a.m. to 7
p.m. Monday through Friday and from 8 a.m. to 1 p.m. on Saturdays. The number to
call is 1-800-COMPASS.
*****
COMPASS HELPS BRING JOBS TO TUSCALOOSA
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Tuscaloosa County small business entrepreneurs are increasing job
opportunities with the help of area banks through the Community Development Loan
Fund (CDLF).
The CDLF was created in 1994 as a means of providing capital for expanding
and start-up small businesses that do not qualify for bank loans. Compass Bank
is one of the founding partners of the CDLF, which is composed of six major
banks in Tuscaloosa, the city of Tuscaloosa, and Community Service Programs of
West Alabama, Inc. (CSP). CSP administers the program.
The CDLF partners provide seed money to capitalize the program, with the
goal of helping entrepreneurs create jobs for low-income individuals.
Most loan candidates have little to no business history or collateral,
making traditional bank loans unavailable.
The CDLF intends to make one- to five-year loans of $5,000 to $25,000. As
of March 1, 1995, $26,000 in loans had been made.
Initially, the CSP appoints a manager of the program. A nine-member loan
review board, consisting of representatives from each of the six member banks,
evaluates loan applications. CHRIS BERRY, commercial loan manager,
Tuscaloosa/University, represents Compass on the board.
*****
Directions is produced by the Employee Relations Department for employees of
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Compass Bancshares and its affiliates, headquartered at 15 South 20th Street,
Birmingham, AL 35233. BECKY PINKSTON and PAM COCHRAN, Editors.
