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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 Pursuant to Rule 14a-11(c) or 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:
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(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 thirtieth annual meeting of the
stockholders of Regions Financial Corporation to be held at 10:00 a.m. local
time, on May 16, 2001, at the Peabody Hotel, 149 Union Avenue, Memphis,
Tennessee.
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., in the
Continental Ballroom at the Peabody Hotel. We hope you will find it convenient
to come early enough to enjoy this social time prior to the stockholders'
meeting.
/s/ J. Stanley Mackin
J. Stanley Mackin
Chairman of the Board
April 10, 2001
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REGIONS FINANCIAL CORPORATION
POST OFFICE BOX 10247
BIRMINGHAM, ALABAMA 35202-0247
TELEPHONE 205 944-1300
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NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To be held May 16, 2001
---------------------
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 Peabody Hotel, 149 Union Avenue, Memphis, Tennessee, on Wednesday, May
16, 2001, at 10:00 a.m. local time, for the purpose of considering and acting on
the following:
1. To elect the four 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 approve an amendment to the 1999 Long Term Incentive
Plan.
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 4, 2001, 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. In the alternative, 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, 2001
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REGIONS FINANCIAL CORPORATION
POST OFFICE BOX 10247
BIRMINGHAM, ALABAMA 35202-0247
TELEPHONE 205 944-1300
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PROXY STATEMENT
FOR 2001 ANNUAL MEETING OF STOCKHOLDERS
---------------------
Regions Financial Corporation (Regions or the Company) is furnishing this
Proxy Statement to the stockholders in connection with the 2001 annual meeting
of stockholders to be held on Wednesday, May 16, 2001, at 10:00 a.m. local time
at the Peabody Hotel, 149 Union Avenue, Memphis, Tennessee, and at any
adjournment thereof. The matters to be considered and acted upon are (1) the
election of four nominees as directors of the corporation, (2) proposal to
approve an amendment to the 1999 Long Term Incentive Plan, 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, Directors' Stock
Incentive Plan, and 401(k) 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. Participants in these plans can
vote all of their shares, including shares held in these plans, by signing and
returning the proxy card or by voting by telephone or on the Internet.
The annual report of Regions Financial Corporation for the year 2000,
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, 2001.
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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 four
nominees for director named in this proxy statement, for the proposal to amend
the 1999 Long Term Incentive Plan, 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.
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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 15, 2001. 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 4, 2001, Regions had issued and outstanding 228,523,333 shares
of common stock, none of which were held as treasury stock. 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 4, 2001, will be
entitled to vote at the meeting or any adjournment thereof.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
As of December 31, 2000, all Regions' affiliate banks beneficially held in
a fiduciary capacity for others under numerous trust relationships, 11,805,008
shares or 5.37% of Regions' outstanding common stock. Regions' affiliate bank
trust departments have sole voting power with respect to 11,044,703 of these
shares or 5.03%, shared voting power with respect to 50,903 of these shares,
sole dispositive power with respect to 4,440,942 of these shares and shared
dispositive power with respect to 1,954,171 of these shares. No other 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
No director or nominee for director is deemed to own beneficially 1% or
more of Regions' common stock as of April 4, 2001. All directors and executive
officers of Regions, as a group, own beneficially a total of 4,835,262 shares
(which includes 2,053,108 shares that are the subject of presently exercisable
options) or 2.10% 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.
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The following table presents information concerning the beneficial
ownership of Regions' common stock by certain of its executive officers at April
4, 2001. 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 701,965 .31%
Birmingham, Alabama
Richard D. Horsley............................... Common 514,420 .22
Birmingham, Alabama
John I. Fleischauer, Jr.......................... Common 120,512 .05
Little Rock, Arkansas
Wilbur B. Hufham
Montgomery, Alabama............................ Common 434,841 .19
Peter D. Miller.................................. Common 343,653 .15
Gainesville, Georgia
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(1) The amounts shown represent the total shares beneficially owned by such
individuals, restricted shares (40,641 for Mr. Jones, 17,820 for Mr.
Horsley, 25,070 for Mr. Fleischauer, 17,820 for Mr. Hufham, and 15,000 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, 267,359; Mr. Horsley, 228,328; Mr. Fleischauer, 93,804; Mr. Hufham,
240,704; and Mr. Miller 198,386.
No change in control of Regions has occurred since January 1, 2000, and no
arrangements are known to Regions which may at a later date result in a change
in control of the Company.
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ELECTION OF DIRECTORS
Regions recommends that the board of directors for the ensuing year shall
consist of thirteen directors, and further recommends the election of Carl E.
Jones, Jr., Michael W. Murphy, Henry E. Simpson, and John H. Watson as
directors, to hold office for a term of three years expiring with the annual
meeting of stockholders to be held in 2004 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 four 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 4, 2001.
YEAR NUMBER OF SHARES BENEFICIALLY
PRESENT OCCUPATION POSITION AND YEAR TERM OF OWNED AT APRIL 4, 2001
NAME OF NOMINEE AND PRINCIPAL OFFICES HELD WITH FIRST OFFICE ---------------------------------
OR DIRECTOR, OCCUPATION FOR REGIONS AND ELECTED WILL (2) PERCENT
RESIDENCE, AND AGE LAST FIVE YEARS SUBSIDIARIES AS DIRECTOR EXPIRE DIRECTLY INDIRECTLY OF CLASS
------------------ ------------------------ --------------------- ----------- ------- -------- ---------- --------
Sheila S. Blair Retired, formerly Director, Regions 1989 2002 104,593 17,048 .05%
Birmingham, Executive Director, The
Alabama Greater Birmingham
66 Foundation (Community
foundation)
James B. Boone, Jr. Chairman of the Board, Director, Regions 1985 2003 28,959 11,733 .02
Tuscaloosa, Boone Newspapers, Inc.
Alabama (Newspaper publishing,
65 management and
ownership)
James S.M. French Chairman and President, Director, Regions 1986 2003 28,328 103,696 .06
Birmingham, Dunn Investment Co.
Alabama (Construction,
61 construction materials,
investments)
Richard D. Horsley Vice Chairman of the Director, Regions; 1982 2003 514,420(3) -- .22
Birmingham, Board and Executive Director, Regions
Alabama Financial Officer, Bank, Regions Agency,
58 Regions and Regions Bank Inc., Regions
Mortgage, Inc.,
Regions Life
Insurance Company,
Regions Asset
Management Co., Inc.
Ramco-FL Holding,
Inc., EFC Holdings
Corporation, and
Regions Interstate
Billing Service, Inc.
Carl E. Jones, Jr.(1) President and Chief Director, Regions; 1997 2001 663,571(3) 38,394 .31
Birmingham, Executive Officer, Director, Regions
Alabama Regions and Regions Bank, Regions
60 Bank, formerly Regional Mortgage, Inc.,
President, Regions Regions Interstate
Billing Service,
Inc., and EFC
Holdings Corporation
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YEAR NUMBER OF SHARES BENEFICIALLY
PRESENT OCCUPATION POSITION AND YEAR TERM OF OWNED AT APRIL 4, 2001
NAME OF NOMINEE AND PRINCIPAL OFFICES HELD WITH FIRST OFFICE ---------------------------------
OR DIRECTOR, OCCUPATION FOR REGIONS AND ELECTED WILL (2) PERCENT
RESIDENCE, AND AGE LAST FIVE YEARS SUBSIDIARIES AS DIRECTOR EXPIRE DIRECTLY INDIRECTLY OF CLASS
------------------ ------------------------ --------------------- ----------- ------- -------- ---------- --------
Olin B. King Chairman and CEO, SCI Director, Regions 1984 2002 25,989 -- .01
Huntsville, Systems, Inc.
Alabama (Diversified electronics
67 manufacturer)
Michael W. Murphy(1) President, Marmick Oil Director, Regions 1998 2001 -- 3,639 .00%
El Dorado, Company (Oil and gas
Arkansas exploration and
53 production)
Henry E. Simpson(1) Attorney, Lange, Director, Regions 1973 2001 147,142 50,644 .09
Birmingham, Simpson, Robinson &
Alabama Somerville LLP
66
W. Woodrow Stewart Attorney, Stewart, Director, Regions 1999 2003 12,407 -- .01
Gainesville, Melvin & Frost
Georgia
62
Lee J. Styslinger, Jr. Chairman, ALTEC Director, Regions 1985 2002 114,052 -- .05
Birmingham, Industries, Inc.
Alabama (Manufacturer of mobile
67 utility equipment)
John H. Watson(1) Chairman, Smith, Inc. Director, Regions 1999 2001 168,605 8,778 .08
Dothan, (Heating and air
Alabama conditioning)
63
C. Kemmons Wilson, Jr. Chairman, Wilson Hotel Director, Regions 1999 2002 187,463 -- .08
Memphis, Management Co., Inc.
Tennessee (Hotel management and
54 franchising)
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(1) Nominee for election at 2001 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 267,359 shares for Mr. Jones and 228,328 shares for Mr. Horsley
that are the subject of presently exercisable options.
In connection with its recent acquisition of Morgan Keegan, Inc., Regions
has agreed that Allen B. Morgan, Jr. will become a director of Regions. It is
anticipated that the board of directors, at its regular April board meeting,
will appoint Mr. Morgan as a director with a term expiring in 2002. Mr. Morgan
is chairman and chief executive officer of Morgan, Keegan & Company, Inc., which
is now a Regions subsidiary as a result of the Morgan Keegan acquisition, and he
was previously chairman and chief executive officer of Morgan Keegan, Inc.
J. Stanley Mackin, chairman and former chief executive officer of Regions,
will retire as chairman and director on the date of the annual meeting. After
Mr. Morgan becomes a director and Mr. Mackin retires, Regions will have 13
directors.
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.
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Of the nominees and directors listed above, four 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;
Olin B. King serves as a director of SCI Systems, Inc.; Michael W. Murphy as a
director of Murphy Oil Company, and Lee J. Styslinger, Jr. serves as a director
of The Mead Corporation.
THE BOARD AND COMMITTEES OF THE BOARD
Regions held nine directors' meetings during 2000. 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
46% 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 2000,
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. The Committee is
governed by the Company's audit committee charter included as Appendix A to this
proxy statement.
AUDIT COMMITTEE REPORT
Regions' audited financial statements at and for the three year period
ended December 31, 2000, are included in Regions Annual Report on Form 10-K for
the fiscal year 2000. 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 $719,000 and all other fees were $3.0 million,
including audit related services of $877,000 and non-audit services of $2.1
million. Audit related services include fees for statutory audits, employee
benefit plan audits, FDICIA reviews, SAS-70 reviews, and SEC registration
statements. 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
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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, 2000 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 three
meetings during 2000, 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 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 2000, Regions believes that its
executive officers and directors complied with all applicable filing
requirements.
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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........... 2000 $650,000 $459,225 0 $ 703,281 100,000 $ 115,000 $ 82,135(2)
President and Chief 1999 650,000 184,860 0 0 33,750 384,688 74,741
Executive Officer 1998 500,000 356,175 0 0 33,750 1,054,688 72,778
Richard D. Horsley.......... 2000 326,999 206,473 0 301,406 60,000 115,000 105,547(3)
Vice Chairman and 1999 317,000 67,616 0 0 26,250 384,688 95,032
Executive Financial
Officer 1998 299,667 149,427 0 0 26,250 1,054,688 86,666
John I. Fleischauer,
Jr.(4).................... 2000 302,702 127,000 0 301,406 60,000 0 18,591(5)
Regional President 1999 282,703 108,762 0 0 18,804 0 0
1998 100,074 109,954 0 1,249,939 15,000 0 5,943(6)
Wilbur B. Hufham............ 2000 279,999 140,063 0 301,406 60,000 115,000 98,987(7)
Regional President 1999 250,000 89,388 0 0 26,250 384,688 95,243
1998 240,000 125,264 0 0 26,250 1,054,688 83,793
Peter D. Miller............. 2000 280,000 135,303 0 301,406 60,000 230,000 17,143(8)
Regional President 1999 240,000 87,106 0 0 26,250 0 18,707
1998 240,000 121,067 0 0 26,250 0 24,000
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(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
restriction period for restricted stock awarded prior to 2000 is five years
from the date of grant. 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, 2000, Mr. Jones
had 40,641 shares of Restricted Stock with a fair market value of
$1,120,472, Mr. Horsley had 17,820 shares of Restricted Stock with a fair
market value of $491,297, Mr. Fleischauer had 25,070 shares of Restricted
Stock with a fair market value of $691,180, Mr. Hufham had 17,820 shares of
Restricted Stock with a fair market value of $491,297, and Mr. Miller had
15,000 shares of Restricted Stock with a fair market value of $413,550.
(2) Includes $1,701 allocated to Mr. Jones in 2000 under the Employee Stock
Ownership Plan; $15,311 allocated to Mr. Jones in 2000 under the profit
sharing plan; and $65,123 representing the estimated term component of the
premium paid and the estimated interest cost to Regions in 2000 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 $1,701 allocated to Mr. Horsley in 2000 under the Employee Stock
Ownership Plan; $15,311 allocated to Mr. Horsley in 2000 under the profit
sharing plan; and $88,535 representing the estimated
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term component of the premium paid and the estimated interest cost to
Regions in 2000 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. Fleischauer became employed by Regions on July 31, 1998; all amounts
were accrued and paid after that date.
(5) Includes $1,701 allocated to Mr. Fleischauer in 2000 under the Employee
Stock Ownership Plan and $16,890 allocated to Mr. Fleischauer in 2000 under
the profit sharing plan.
(6) Includes amounts allocated to Mr. Fleischauer for 1998 under two First
Commercial Corporation deferred compensation plans continued by Regions
after July 31, 1998.
(7) Includes $1,701 allocated to Mr. Hufham in 2000 under the Employee Stock
Ownership Plan; $16,845 allocated to Mr. Hufham in 2000 under the profit
sharing plan; and $80,441 representing the estimated term component of the
premium paid and the estimated interest cost to Regions in 2000 resulting
from premium payments for a life insurance benefit plan for Mr. Hufham. This
plan serves as an offset to an existing supplemental retirement plan.
(8) Includes $1,701 allocated to Mr. Miller in 2000 under the Employee Stock
Ownership Plan and $15,442 allocated to Mr. Miller in 2000 under the profit
sharing plan.
STOCK OPTIONS
The following table presents information concerning individual grants of
options to purchase Regions' common stock made during 2000 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 2000 (PER SHARE) EXPIRATION DATE PRESENT VALUE(1)
---- --------------------- -------------------- ----------- --------------- ----------------
Carl E. Jones, Jr. ..... 100,000 4.4% $20.09 March 15, 2010 $383,202
Richard D. Horsley...... 60,000 2.6 20.09 March 15, 2010 230,195
John I. Fleischauer,
Jr. .................. 60,000 2.6 20.09 March 15, 2010 230,195
Wilbur B. Hufham........ 60,000 2.6 20.09 March 15, 2010 230,195
Peter D. Miller......... 60,000 2.6 20.09 March 15, 2010 230,195
---------------
(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 4.99%,
dividend yield of 3.9% and expected time to exercise of 5 years.
(2) All options become exercisable 12 months after the date of grant, 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.
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The following table presents information concerning exercises of stock
options to purchase Regions' common stock during 2000 and the number and value
of unexercised options and stock appreciation rights (SAR) held by the named
executive officers.
AGGREGATED OPTION/SAR EXERCISES IN 2000
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY
OPTIONS/SARS OPTIONS/SARS
AT 12-31-00 AT 12-31-00
SHARES ACQUIRED VALUE EXERCISABLE/ EXERCISABLE/
NAME ON EXERCISE REALIZED UNEXERCISABLE(1) UNEXERCISABLE(1)
---- --------------- -------- ---------------------- --------------------
Carl E. Jones, Jr............. 12,000 $90,114 177,155/102,804 $ 941,193/$747,125
Richard D. Horsley............ 0 0 170,500/ 62,804 1,121,308/ 448,275
John I. Fleischauer, Jr. ..... 0 0 33,804/ 60,000 0/ 448,225
Wilbur B. Hufham.............. 0 0 205,976/ 62,804 1,595,410/ 448,275
Peter D. Miller............... 0 0 82,500/ 60,000 45,075/ 448,275
---------------
(1) None of the currently exercisable options were granted with tandem SARs.
LONG-TERM INCENTIVE PLAN AWARDS IN 2000
No performance shares were awarded to Regions' named executive officers.
Information concerning restricted stock awards during 2000 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
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In 2000, compensation covered by the plans for the five highest paid
executive officers was as follows: Mr. Jones, $650,000; Mr. Horsley, $326,999;
Mr. Fleischauer, $302,702; Mr. Hufham, $279,999; and Mr. Miller, $280,000.
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.
EMPLOYMENT AGREEMENTS
Regions is party to an employment agreement with John I. Fleischauer, Jr.,
Regional President, which became effective upon completion of the merger of
First Commercial Corporation with Regions on July 31, 1998. The agreement has a
term of three years. The agreement provided for a minimum annual salary and
bonus on inception, and also provides that Mr. Fleischauer's base salary will be
increased as of January 1 of each calendar year during the term of the agreement
by an amount at least equal to the average percentage increase in annual base
salary paid to the top three Regions executive officers (excluding Mr. Jones),
calculated for each year on a compounded basis. The agreement entitles Mr.
Fleischauer to participate fully in all executive incentive compensation and
bonus programs of Regions (including stock option, performance share and
restricted stock grants) in amounts and on a basis that are at least as
favorable as other Regions senior executives holding comparable positions.
Under the agreement, if Mr. Fleischauer voluntarily terminates his
employment, he will be entitled to receive in a lump sum payment an amount equal
to the base salary and bonus that would otherwise be payable to him during the
remaining term of the agreement. Moreover, if Mr. Fleischauer resigns for "good
reason" or his employment is terminated by Regions without "cause," both as
defined in the agreement, he will be entitled to receive severance benefits
consisting of (1) a lump sum cash payment equal to three times the sum of (A)
his annual base salary at the rate in effect immediately prior to the date of
termination and (B) his average bonus for the two fiscal years immediately
preceding the fiscal year in which the termination date occurs, (2) group term
life insurance, health insurance, accident and long-term disability insurance
benefits substantially similar in all respects to those that he was receiving
immediately prior to the termination date for a period of three years, and (3)
an additional payment, if necessary and in the amount necessary to offset the
effects of any excise tax imposed under section 4999 of the Internal Revenue
Code.
Regions has no other employment agreements with any of the named executive
officers.
DIRECTORS' COMPENSATION
In 2000, 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 the parent company receive no
fees for parent company board membership or attendance at parent company board
or board 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 participant reaches age 65 or terminates as a
director.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The compensation committee of the Regions board consisted in 2000 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
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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.
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 commensurate 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 year end
1999 information, 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 NASDAQ Banks Index 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
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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 2000 base
salaries for the other named officers were determined by the committee.
Annual Incentive Compensation. In the first quarter of 2000, the
compensation committee approved Regions' 2000 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: Net Income Per Share (fully
diluted), Return on Equity, Overhead Growth; and Core Deposit Growth. Regions
exceeded threshold levels in three company-wide performance goals. Regions
exceeded target performance in all regional business unit 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 2000
base salary levels.
Long Term Incentive Compensation. During 1999, the compensation committee
evaluated the merits of granting the chief executive officer, the named officers
and other key employees, further awards under Regions' 1991 Long-Term Incentive
Plan and 1999 Long Term Incentive Plan. 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 1991 and
1999 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 1991 and 1999 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 2000.
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
compensation, takes into account other factors. The committee also took note of
the fact that Mr. Jones had completed two full years in his new position as
chief executive officer and had successfully made the transition to that
position. The committee set Mr. Jones' base salary for 1999 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
commensurate with Mr. Jones promotion to chief executive officer.
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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.
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.
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AMENDMENT TO THE 1999 LONG TERM INCENTIVE PLAN
The personnel committee of the board of directors has adopted an amendment
to the 1999 Long Term Incentive Plan, subject to the approval of the
stockholders. The amendment increases the number of shares of the Company which
are subject to and available for distribution under the 1999 Long Term Incentive
Plan. In the absence of stockholder approval the proposed amendment will not
take effect.
The proposed amendment will increase from 10,000,000 to 25,000,000 the
total number of shares of common stock reserved and available for distribution
under the 1999 Long Term Incentive Plan. Such shares may consist, in whole or in
part, of authorized and unissued shares or treasury shares. Of the total amount,
no more than 2,500,000 shares may be granted as restricted stock awards. The
proposed amendment also provides that any performance objectives established
with respect to the chief executive officer, the executive financial officer,
and the regional presidents must be objective within the meaning of Section
162(m) of the Internal Revenue Code, and imposes limitations, consistent with
the requirements of Section 162(m), on the discretion of the Committee to alter
performance objectives established for those individuals.
The 1999 Long Term Incentive Plan provides generally for the granting of
incentive stock options, non-qualified stock options, stock appreciation rights
and shares of stock designated as restricted stock or performance shares, to
officers and key employees of the Company. The incentive plan was approved by
the stockholders and put into operation in 1999. It is intended to be used over
a period of years to assist the Company in attracting, retaining, motivating and
rewarding employees who make a significant contribution to the Company's long
term success, and to encourage employees to acquire and maintain an equity
interest in the Company.
The 1999 Long Term Incentive Plan is administered and interpreted by the
Committee, which is composed of disinterested persons, that is, persons who are
not employees and who are not eligible to receive benefits under the Plan. The
board of directors may, without further approval of the stockholders, suspend,
terminate or amend the 1999 Long Term Incentive Plan. However, no such action
may be taken without stockholder approval which would materially increase the
total number of shares of common stock which may be issued under the Plan, and
no action may be taken without a recipient's consent which would reduce or
impair any rights or obligations under any then outstanding award under the
Plan.
The 1999 Long Term Incentive Plan authorizes the granting of incentive
stock options and non-qualified stock options to purchase shares of common stock
of the Company. The closing market price of the common stock of the Company as
reporting by the Nasdaq National Market was $28.88 per share on April 6, 2001.
No stock options may be granted under the 1999 Long Term Incentive Plan
after March 17, 2009. The option price per share of incentive stock options
shall not be less than the fair market value of the common stock at the date of
the grant. The option price per share of non-qualified options may in the
discretion of the Committee be less than the fair market value of the common
stock on the date of the grant. Options may be exercised by payment in cash, or
in the discretion of the Committee, by delivery of shares having a market value
equal to the option price for or in any combination of cash and shares. An
option may be exercised only subject to such terms as the Committee may impose
at the time the option is granted. In general, an option must terminate not
later than ten years after the date of the grant. The aggregate fair market
value, determined as of the time an incentive stock option is granted, of the
common stock with respect to which incentive stock option are exercised for the
first time by an individual during any calendar year, under the 1999 Long Term
Incentive Plan and other stock option plans of the Company, may not exceed
$100,000.
Stock appreciation rights may be granted under the 1999 Long Term Incentive
Plan in connection with all or any part of incentive stock options or
non-qualified options, or independent of stock options. Stock appreciation
rights permit the recipient to receive from the Company an amount determinable
in relation to any increase in fair market value of the Company's common stock.
The amount awardable upon exercise of a stock appreciation right for each share
covered by the exercise is equal to the difference between the exercise price
and the fair market value of share on the date of exercise. In the discretion of
the committee stock appreciation rights may be granted in tandem with stock
options or independent of stock options. The committee has the discretion to
establish the terms of a stock appreciation right award at the time of grant,
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including the method of exercise, method of settlement, form of consideration
payable in settlement, and any other terms and conditions of the award. Any
stock appreciation right award and the terms and conditions thereof must be
evidenced by an award agreement between Regions and the recipient. The aggregate
amount due on exercise of a stock appreciation right may be paid wholly or
partly in cash or in common stock, in the discretion of the Committee.
The Company understands the federal income tax consequences of stock
options under the 1999 Long Term Incentive Plan, under existing federal income
tax laws and regulations to be as follows:
Holders of incentive stock options will not recognize taxable income
as a result of the exercise of such options (except to the extent of taxes
imposed under the alternative minimum tax), and will not recognize taxable
income upon the grant of such options. The amount by which the fair market
value of the stock at the time of the exercise exceeds the option price is
treated as a preference item subject to the alternative minimum tax.
The tax consequences upon disposition of stock acquired by exercise of
an incentive stock option depends upon when the disposition occurs. If the
optionee holds the stock received through exercise of an incentive stock
option for at least two years after the date the option was granted and for
at least one year after the stock was transferred to him, then any gain or
loss recognized on the disposition of the stock will be long term capital
gain or loss equal to the difference between the amount realized upon sale
and the option price. The Company will not be entitled to any tax deduction
in connection with the grant or exercise of incentive stock options
provided that the stock acquired through exercise of the option is not
disposed of within the two year or one year periods described above.
However, if stock acquired through exercise of an incentive stock option is
disposed of within the two year or one year periods described above, then
the excess, if any, of the fair market value of such stock over the option
price will be treated as compensation income to the optionee in the year in
which such disposition occurred, and the Company will be entitled to a like
income tax deduction in that year.
The holder of a non-qualified option, upon exercise, must include as
ordinary income subject to federal taxation an amount equal to the excess
of the fair market value of the stock acquired at date of exercise over the
option price.
The recipient of stock appreciation rights will not be subject to
federal income tax at the time of receipt. However, stock or cash delivered
pursuant to the exercise of such rights will be treated as taxable income
to the employee in the year of receipt.
A restricted stock award under the 1999 Long Term Incentive Plan consists
generally of a grant or sale of the Company's common stock to the recipient
subject to conditions determined by the Committee. The terms determinable by the
Committee in each restricted stock award include the number of shares, the
price, if any, to be paid by the recipient, the time within which the award may
be subject to forfeiture, the nature of the restrictions, including performance
criteria if any, and the circumstances upon which restrictions will lapse. The
recipient of restricted stock may not sell or transfer such shares during the
restriction period, and the certificates representing such shares remain in the
custody of the Company until the conditions of restriction are satisfied. Upon
lapse or removal of the restrictions, the recipient will receive a stock
certificate and will have unrestricted ownership of the covered shares.
The 1999 Plan also provides for the grant of awards in the form of
performance units. The Committee selects recipients of performance unit awards
and establishes performance objectives, the performance period, and the amount
and form of the award. The performance objectives may relate to the specific
performance of the recipient, or the performance of the region, subsidiary, unit
bank, department or function within which the recipient is employed. Performance
objectives are intended to enhance the long term financial condition of the
Company. If at the end of the performance period the performance objectives have
been satisfied, the recipient will have earned the award. If the specific
performance objectives are exceeded, the Committee in its discretion may award a
multiple of the target award, and if the performance objectives are satisfied in
part, the Committee in its discretion may grant the recipient a portion of the
performance award. The performance period will generally be not less than one
year and shall not exceed five years.
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The 1999 Long Term Incentive Plan provides for the grant of awards in the
form of dividend equivalents. Generally, a dividend equivalent entitles the
recipient to receive an amount equivalent to the cash dividends declared on
Regions common stock over a specified period. The committee has the discretion
to set the terms and conditions of a dividend equivalent award at the time of
grant, including the number of shares referable to the award, the time period,
the form of consideration in which an award is to be settled, and the method of
settlement.
The 1999 Plan also grants to the committee discretion to make stock-based
awards in other forms and to establish the terms and conditions of the award at
the time of grant. In general, any other form of stock-based award under the
1999 Plan will be payable in, valued in whole or in part by reference to, or be
otherwise based on or related to common stock of the Company. Any such award
must be determined by the committee to be consistent with the purposes of the
1999 Plan.
With respect to any or all awards under the 1999 Plan, the committee may
accelerate the award, meaning that the committee may determine that outstanding
options, stock appreciation rights, and other awards in the nature of rights
that may be exercised shall become fully exercisable and all restrictions on
outstanding awards shall lapse. Such acceleration is automatic without any
action by the committee upon the occurrence of a change in control of Regions
(as defined in the 1999 Plan to exclude certain merger-of-equals transactions),
unless in the opinion of Regions' accountants acceleration would preclude
pooling-of-interests accounting treatment. In exercising its discretion to
accelerate awards under the plan, the committee may distinguish among recipients
and among awards.
If an award is accelerated by virtue of a change in control, the committee
may, in its sole discretion, provide that the award will expire after a
designated period of time after such acceleration to the extent not then
exercised, that the award will be settled in cash rather than stock, that the
award will be assumed by another party to the transaction giving rise to the
acceleration, or any combination of the foregoing.
In addition to the 1999 Plan, Regions has previously adopted other
incentive based compensation plans, including the 1983 Stock Option Plan, the
1988 Stock Option Plan, and the 1991 Long Term Incentive Plan. The 1999 Plan is
similar in scope and operation to the 1991 Long Term Incentive Plan. No further
awards can be made under the 1983 plan, the 1988 plan, and the 1991 plan.
The board of directors recommends a vote "FOR" approval of the amendment to
the 1999 Long Term Incentive Plan under "Item 2" on the proxy card. The
affirmative vote of the holders of a majority of the outstanding shares of the
Company is required for approval of the amendment to the 1999 Long Term
Incentive Plan.
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PLAN BENEFITS
The following table sets forth certain information for the calendar year
2000 concerning the awards granted under the 1999 Long Term Incentive Plan to
the five executive officers named under the summary compensation table above,
the executive officers of the Company as a group, and other participating
officers and employees as a group.
PLAN BENEFITS
LONG-TERM INCENTIVE
PLAN
-----------------------
DOLLAR NUMBER
NAME AND POSITION AMOUNT ($) OF UNITS
----------------- ---------- ---------
Carl E. Jones, Jr.
President and Chief Executive Officer..................... 383,202(1) 100,000(2)
35,000(3)
Richard D. Horsley
Vice Chairman and Executive Financial Officer............. 230,195(1) 60,000(2)
15,000(3)
John I. Fleischauer, Jr.
Regional President........................................ 230,195(1) 60,000(2)
15,000(3)
Wilbur B. Hufham
Regional President........................................ 230,195(1) 60,000(2)
15,000(3)
Peter D. Miller
Regional President........................................ 230,195(1) 60,000(2)
15,000(3)
Executive Officers as a Group (10 persons).................. 1,972,308(1) 515,000(2)
138,500(3)
Other Officers and Employees as a Group (299 persons)....... 6,750,369(1) 1,762,625(2)
117,542(3)
---------------
(1) Represents the estimated value at the date of grant of stock options awarded
in 2000, using the Black Scholes option pricing model and the assumptions
identified on page 10 above in note (1) to the stock option grant table.
(2) Represents the number of shares of Regions' common stock underlying stock
options granted in 2000.
(3) Represents the number of restricted shares awarded in 2000. It is not
practical to estimate the 2000 dollar value of such awards.
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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 and the NASDAQ 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 S&P 500 INDEX NASDAQ BANK INDEX
------- ------------- -----------------
12/31/95 100.00 100.00 100.00
12/31/96 123.70 123.20 132.00
12/31/97 206.10 164.40 221.10
12/31/98 201.70 212.10 219.06
12/31/99 129.60 256.80 211.10
12/31/00 147.60 233.90 241.10
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 2000; 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 2000 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 2000, the Company or its subsidiaries paid legal fees of
$2,214,848 to the firm of Lange, Simpson, Robinson & Somerville LLP.
INDEPENDENT AUDITORS
The audit committee has selected the accounting firm of Ernst & Young LLP
to serve as the principal auditors for the Company for the current year. The
firm of Ernst & Young LLP also served as Regions' principal auditor during 2000.
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.
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PROPOSALS OF STOCKHOLDERS
Proposals by stockholders intended to be presented at Regions 2002 annual
meeting of stockholders must be received by Regions not later than December 11,
2001, 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, 2001
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APPENDIX A
REGIONS FINANCIAL CORPORATION
AUDIT COMMITTEE CHARTER
The Audit Committee shall serve as a committee of the Regions Financial
Corporation Board of Directors. The Audit Committee shall be composed of at
least three directors who are independent of the management of the company and
are free of any relationship that, in the opinion of the Board of Directors,
would interfere with their exercise of independent judgment as a committee
member. Should any member not meet the independence requirements as defined by
the Securities and Exchange Commission, that fact will be fully disclosed in
accordance with SEC rules. All Audit Committee members will be financially
literate, and at least one member will have accounting or related financial
management expertise.
The Audit Committee has a major responsibility to provide assistance to the
directors in fulfilling their responsibility for the quality and integrity of
the financial reports of the company. In so doing, the Audit Committee will be
responsible for maintaining free and open communication between directors, the
outside auditing firm, internal auditing department and management of the
company.
To the extent necessary to fulfill its responsibility, the committee will
also communicate with the company's legal department, financial reporting
department, security department, loan review department, and others as it deems
necessary.
In carrying out its responsibilities, the Audit Committee's policies and
procedures should remain flexible, in order for the committee to best react to
changing conditions and to ensure to the directors and stockholders that the
corporate accounting and reporting practices of the company are in accordance
with all requirements and are of the highest quality.
In order to fulfill its primary responsibilities, the committee shall meet
as often as deemed necessary but not less than quarterly to ensure
accomplishment of the annual agenda, which will include the following
components:
- Securing the approval of the full Board of Directors of this charter and
reviewing/reassessing the charter as conditions dictate.
- Recommending to the Board of Directors the appointment of the independent
auditing firm for the ensuing year.
- Establishing a clear understanding with the independent auditors that
they are ultimately accountable to the Board of Directors and the Audit
Committee, as the stockholders' representatives, who have the ultimate
authority in deciding to engage, evaluate, and if appropriate, terminate
their services.
- Reviewing and concurring with management's appointment, termination, or
replacement of the Director of Internal Audit.
- Receiving prior to each meeting a summary of findings from completed
internal audits and a report of significant deviations from the approved
audit plan.
- Meeting with the independent auditors and financial management of the
Company to review the scope of the proposed audit, the procedures to be
utilized, and the adequacy of the independent auditor's compensation,
conducting timely quarterly reviews for the current year, and at the
conclusion of the audit or quarterly review, evaluating the audit or
quarterly report, including any comments or recommendations of the
independent auditors.
- Reviewing with the independent auditors the Company's internal auditor,
and financial and accounting personnel, the adequacy and effectiveness of
the accounting and financial controls of the Company, and eliciting any
recommendations for the improvement of such internal controls or
particular areas where new or more detailed controls or procedures are
desirable.
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- Reviewing reports received from regulators and other agencies pertaining
to matters that may have a material effect on the financial statements or
related company compliance policies.
- Reviewing the internal audit function of the Company including the
independence and authority of its reporting obligations, the proposed
audit plans for the coming year, and the coordination of such plans with
the independent auditors.
- Inquiring of management, the internal auditor, and the independent
auditors about significant risks or exposures and assess the steps
management has taken to minimize such risks or exposures to the Company.
- Reviewing the quarterly financial statements with financial management
and the independent auditors prior to the filing of the Form 10-Q (or
prior to the press release of quarterly operation results, if possible)
to determine that the independent auditors do not take exception to the
disclosure and content of the interim financial statements, and
discussing any other matters required to be communicated to the committee
by the auditors. The chair of the committee may represent the entire
committee for purposes of this review.
- Reviewing with management and the independent auditors the audited
financial statements to be included in the Company's annual report to
determine that the independent auditors are satisfied with the disclosure
and content of the financial statements to be presented to the
stockholders. The chair of the committee may represent the entire
committee for purposes of this review.
- Reviewing with financial management and the independent auditors the
results of their timely analysis of significant financial reporting
issues and practices, including changes in, or adoptions of, accounting
principles and disclosure practices, and discussing any other matters
required to be communicated to the committee by the auditors.
- Reviewing with the financial management and the independent auditors
their judgments about the quality, not just acceptability, of accounting
principles and the clarity of the financial disclosure practices used or
proposed to be used, and particularly, the degree of aggressiveness or
conservatism of the organization's accounting principles and underlying
estimates, and other significant decisions made in preparing the
financial statements.
- Providing sufficient opportunity for the internal and independent
auditors to meet with the members of the Audit Committee without members
of management present, for discussion of the independent auditors'
evaluation of the Company's financial, accounting, and auditing
personnel, and the cooperation that the independent auditors received
during the course of audit.
- Reporting the results of the annual audit to the Board of Directors, and
if requested by the board, inviting the independent auditors to attend a
meeting of the entire Board of Directors to assist in reporting the
results of the annual audit or to answer other directors' questions
(alternatively, the other directors, particularly the other independent
directors, may be invited to attend the Audit Committee meeting during
which the results of the annual audit are reviewed).
- On an annual basis, obtaining from the independent auditors a written
communication delineating all their relationships and professional
services as required by Independence Standards Board Standard No. 1,
Independence Discussions with Audit Committees, and, in addition,
reviewing with the independent auditors the nature and scope of any
disclosed relationships or professional services and taking, or
recommending that the Board of Directors take, appropriate action to
ensure the continuing independence of the auditors.
- Reviewing the report of the Audit Committee to be included in the Annual
Report to stockholders, the annual report on Form 10-K, or the proxy
statement for the Company's annual meeting of stockholders, disclosing
whether or not the committee had reviewed and discussed with management
and the independent auditors, as well as discussed within the committee
(without management or the independent auditors present), the financial
statements and the quality of accounting principles and significant
judgments affecting the financial statements.
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- Submitting the minutes of all meetings of the Audit Committee to, or
reviewing the matters discussed at each meeting with, the Board of
Directors.
- Investigating any matter brought to its attention with the scope of its
duties, with the power to retain outside counsel for this purpose if, in
its judgment, deemed appropriate.
- Reviewing the Company's disclosure in the proxy statement for its annual
meeting of stockholders that describes that the Committee has satisfied
its responsibilities under this charter for the prior year, and in
addition, including a copy of this Charter in the Annual Report to
stockholders or the proxy statement at least triennially or the year
after any significant amendment to the Charter.
APPENDIX TO AUDIT COMMITTEE CHARTER
DEFINITIONS
"Independent director" means a person other than an officer or employee of
the company or its subsidiaries or any other individual having a relationship
which, in the opinion of the company's Board of Directors, would interfere with
the exercise of independent judgment in carrying out the responsibilities of a
director. The following persons shall not be considered independent:
- a director who is employed by the company or any of its affiliates for
the current year or any of the past three years;
- a director who accepts any compensation from the Company or any of its
affiliates in excess of $60,000 during the previous fiscal year, other
than compensation for board service, benefits under a tax-qualified
retirement plan, or non-discretionary compensation;
- a director who is a member of the immediate family of an individual who
is, or has been in any of the past three years, employed by the Company
or any of its affiliates as an executive officer. Immediate family
includes a person's spouse, parents, children, siblings, mother-in-law,
father-in-law, brother-in-law, sister-in-law, and any who resides in such
person's home;
- a director who is a partner in, or a controlling stockholder or an
executive officer of, any for-profit business organization to which the
company made or from which the company received, payments (other than
those arising solely from investments in the company's securities) that
exceed 5% of the company's or business organization's consolidated gross
revenues for that year, or $200,000, whichever is more, in any of the
past three years;
- a director who is employed as an executive of another entity where any of
the company's executives serve on that entity's compensation committee.
FINANCIAL LITERACY AND EXPERTISE
The Nasdaq listing requirements that take effect in 2002 require that audit
committees of listed companies have at least three directors, all of whom have a
minimum level of financial literacy (generally described as the ability to read
and understand financial statements), and that one audit committee member have
more significant accounting or financial expertise (which could be indicated by
professional certification, past experience in accounting or finance, or past
experience as an executive with financial oversight responsibilities (e.g.,
chief executive officer).
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APPENDIX B
REGIONS FINANCIAL CORPORATION
1999 LONG-TERM INCENTIVE PLAN
[PROPOSED AMENDMENT INDICATED IN BOLD]
ARTICLE 1
PURPOSE
1.1. General. The purpose of the Regions Financial Corporation 1999
Long-Term Incentive Plan (the "Plan") is to promote the success, and enhance the
value, of Regions Financial Corporation (the "Company"), by linking the personal
interests of its employees, officers and directors to those of Company
stockholders and by providing such persons with an incentive for outstanding
performance. The Plan is further intended to provide flexibility to the Company
in its ability to motivate, attract, and retain the services of employees,
officers and directors upon whose judgment, interest, and special effort the
successful conduct of the Company's operation is largely dependent. Accordingly,
the Plan permits the grant of incentive awards from time to time to selected
employees, officers and directors.
ARTICLE 2
EFFECTIVE DATE
2.1. Effective Date. The Plan shall be effective as of the date upon which
it shall be approved by the Board (the "Effective Date"). However, the Plan
shall be submitted to the stockholders of the Company for approval within 12
months of the Board's approval thereof. No Incentive Stock Options granted under
the Plan may be exercised prior to approval of the Plan by the stockholders and
if the stockholders fail to approve the Plan within 12 months of the Board's
approval thereof, any Incentive Stock Options previously granted hereunder shall
be automatically converted to Non-Qualified Stock Options without any further
act. In the discretion of the Committee, Awards may be made to Covered Employees
which are intended to constitute qualified performance-based compensation under
Code Section 162(m). Any such Awards shall be contingent upon the stockholders
having approved the Plan.
ARTICLE 3
DEFINITIONS
3.1. Definitions. When a word or phrase appears in this Plan with the
initial letter capitalized, and the word or phrase does not commence a sentence,
the word or phrase shall generally be given the meaning ascribed to it in this
Section or in Section 1.1 unless a clearly different meaning is required by the
context. The following words and phrases shall have the following meanings:
(a) "Award" means any Option, Stock Appreciation Right, Restricted
Stock Award, Performance Unit Award, Dividend Equivalent Award, or Other
Stock-Based Award, or any other right or interest relating to Stock or
cash, granted to a Participant under the Plan.
(b) "Award Agreement" means any written agreement, contract, or other
instrument or document evidencing an Award.
(c) "Board" means the Board of Directors of the Company.
(d) "Change in Control" means and includes each of the following:
(i) an acquisition (other than directly from the Company) of any
voting securities of the Company (the "Voting Securities") by any
"Person" (as the term person is used for the purposes of Section 13(d)
or 14(d) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act") immediately after which such Person has beneficial
ownership (within the meaning of Rule l3d-3
B-1
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promulgated under the Exchange Act) of 50% or more of the combined
voting power of the Company's then-outstanding Voting Securities;
provided, however, in determining whether or not a Change in Control has
occurred, Voting Securities which are acquired in a "Non-Control
Acquisition" (as hereinafter defined) shall not constitute an
acquisition which would constitute a Change in Control. A "Non-Control
Acquisition" shall mean (A) an acquisition by (A) any employee benefit
plan (or related trust) sponsored or maintained by the Company or any
Affiliate of the Company, (B) by the Company or (C) any Person in
connection with a Non-Control Transaction (as hereinafter defined).
(ii) individuals who, as of the date hereof, constitute the Board
(the "Incumbent Board") cease for any reason to constitute at least a
majority of the Board; provided, however, that any individual becoming a
director subsequent to the date hereof whose election, or nomination for
election by the Company's shareholders, was approved by a vote of at
least a majority of the directors then comprising the Incumbent Board
shall be considered as though such individual were a member of the
Incumbent Board, but excluding, for this purpose, any such individual
whose initial assumption of office occurs as a result of an actual or
threatened election contest with respect to the election or removal of
directors or other actual or threatened solicitation of proxies or
consents by or on behalf of a Person other than the Board; or
(iii) The consummation of:
(A) A merger, consolidation or reorganization with or into the
Company in which securities of the Company are issued, unless such
merger, consolidation or reorganization is a "Non-Control
Transaction". A "Non-Control Transaction" is a merger, consolidation
or reorganization with or into the Company or in which securities of
the Company are issued where:
(I) the stockholders of the Company immediately before such
merger, consolidation, or reorganization, own, directly or
indirectly, at least fifty-one percent (51%) of the combined
voting power of the outstanding voting securities of the
corporation resulting form such merger, consolidation or
reorganization (the "Surviving Corporation") in substantially the
same proportion as their ownership of the Voting Securities
immediately before such merger, consolidation or reorganization,
(II) the individuals who were members of the Board
immediately prior to the execution of the agreement providing for
such merger, consolidation or reorganization constitute at least
a majority of the members of the board of directors of the
Surviving Corporation or a corporation owning directly or
indirectly fifty-one percent (51%) or more of the Voting
Securities of the Surviving Corporation, and
(III) no person other than (i) the Company, (ii) any
subsidiary, (iii) any employee benefit plan (or any trust forming
a part thereof) maintained immediately prior to such merger,
consolidation, or reorganization by the Company owns fifty
percent (50%) or more of the combined voting power of the
Surviving Corporation's then-outstanding voting securities;
(B) A complete liquidation or dissolution of the Company; or
(C) The sale or other disposition of all or substantially all of
the assets of the Company to any Person.
Notwithstanding the foregoing, a Change in Control shall not be deemed
to occur solely because any Person (the "Subject Person") acquired
Beneficial Ownership of more than the permitted amount of the outstanding
Voting Securities as a result of the acquisition of Voting Securities by
the Company which, by reducing the number of Voting Securities outstanding,
increases the proportional number of shares Beneficially Owned by the
Subject Person, provided that if a Change in Control would occur (but for
the operation of this sentence) and after such acquisition of Voting
Securities by the Company, the Subject
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Person becomes the Beneficial Owner of any additional Voting Securities,
then a Change in Control shall occur.
(e) "Code" means the Internal Revenue Code of 1986, as amended from
time to time.
(f) "Committee" means the committee of the Board described in Article
4.
(g) "Company" means Regions Financial Corporation, a Delaware
corporation.
(h) "Covered Employee" means a covered employee as defined in Code
Section 162(m)(3) or the regulations thereunder.
(i) "Disability" shall mean any illness or other physical or mental
condition of a Participant that renders the Participant incapable of
performing his customary and usual duties for the Company, or any medically
determinable illness or other physical or mental condition resulting from a
bodily injury, disease or mental disorder which, in the judgment of the
Committee, is permanent and continuous in nature. The Committee may require
such medical or other evidence as it deems necessary to judge the nature
and permanency of the Participant's condition. Notwithstanding the above,
with respect to an Incentive Stock Option, Disability shall mean Permanent
and Total Disability as defined in Section 22(e)(3) of the Code.
(j) "Dividend Equivalent" means a right granted to a Participant under
Article 11.
(k) "Effective Date" has the meaning assigned such term in Section
2.1.
(l) "Fair Market Value" means, as of any given date, the average of
the highest and lowest reported sale prices of the Stock (or if no
transactions were reported on such date on the next preceding date on which
transactions were reported) in the principal market in which such Stock is
traded on such date.
(m) "Incentive Stock Option" means an Option that is intended to meet
the requirements of Section 422 of the Code or any successor provision
thereto.
(n) "Merger of Equals" means any Change of Control transaction
approved by the Incumbent Board and specifically designated by the
Incumbent Board as a Merger of Equals.
(o) "Non-Qualified Stock Option" means an Option that is not an
Incentive Stock Option.
(p) "Option" means a right granted to a Participant under Article 7 of
the Plan to purchase Stock at a specified price during specified time
periods. An Option may be either an Incentive Stock Option or a
Non-Qualified Stock Option.
(q) "Other Stock-Based Award" means a right, granted to a Participant
under Article 12, that relates to or is valued by reference to Stock or
other Awards relating to Stock.
(r) "Parent" means a corporation which owns or beneficially owns a
majority of the outstanding voting stock or voting power of the Company.
For Incentive Stock Options, the term shall have the same meaning as set
forth in Code Section 424(e).
(s) "Participant" means a person who, as an employee, officer or
director of the Company or any Subsidiary, has been granted an Award under
the Plan.
(t) "Performance Unit" means a right granted to a Participant under
Article 9, to receive cash, Stock, or other Awards, the payment of which is
contingent upon achieving certain performance goals established by the
Committee.
(u) "Plan" means the Regions Financial Corporation 1999 Long-Term
Incentive Plan, as amended from time to time.
(v) "Restricted Stock Award" means Stock granted to a Participant
under Article 10 that is subject to certain restrictions and to risk of
forfeiture.
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(w) "Stock" means the $.625 par value Common Stock of the Company, and
such other securities of the Company as may be substituted for Stock
pursuant to Article 14.
(x) "Stock Appreciation Right" or "SAR" means a right granted to a
Participant under Article 8 to receive a payment equal to the difference
between the Fair Market Value of a share of Stock as of the date of
exercise of the SAR over the grant price of the SAR, all as determined
pursuant to Article 8.
(y) "Subsidiary" means any corporation, limited liability company,
partnership or other entity of which a majority of the outstanding voting
stock or voting power is beneficially owned directly or indirectly by the
Company. For Incentive Stock Options, the term shall have the meaning set
forth in Code Section 424(f).
(z) "1933 Act" means the Securities Act of 1933, as amended from time
to time.
(aa) "1934 Act" means the Securities Exchange Act of 1934, as amended
from time to time.
ARTICLE 4
ADMINISTRATION
4.1. Committee. The Plan shall be administered by the Compensation
Committee of the Board or, at the discretion of the Board from time to time, by
the Board. The Committee shall consist of two or more members of the Board. It
is intended that the directors appointed to serve on the Committee shall be
"non-employee directors" (within the meaning of Rule 16b-3 promulgated under the
1934 Act) and "outside directors" (within the meaning of Code Section 162(m) and
the regulations thereunder) to the extent that Rule 16b-3 and, if necessary for
relief from the limitation under Code Section 162(m) and such relief is sought
by the Company, Code Section 162(m), respectively, are applicable. However, the
mere fact that a Committee member shall fail to qualify under either of the
foregoing requirements shall not invalidate any Award made by the Committee
which Award is otherwise validly made under the Plan. The members of the
Committee shall be appointed by, and may be changed at any time and from time to
time in the discretion of, the Board. During any time that the Board is acting
as administrator of the Plan, it shall have all the powers of the Committee
hereunder, and any reference herein to the Committee (other than in this Section
4.1) shall include the Board.
4.2. Action by the Committee. For purposes of administering the Plan, the
following rules of procedure shall govern the Committee. A majority of the
Committee shall constitute a quorum. The acts of a majority of the members
present at any meeting at which a quorum is present, and acts approved
unanimously in writing by the members of the Committee in lieu of a meeting,
shall be deemed the acts of the Committee. Each member of the Committee is
entitled to, in good faith, rely or act upon any report or other information
furnished to that member by any officer or other employee of the Company or any
Parent or Subsidiary, the Company's independent certified public accountants, or
any executive compensation consultant or other professional retained by the
Company to assist in the administration of the Plan.
4.3. Authority of Committee. The Committee has the exclusive power,
authority and discretion to:
(a) Designate Participants;
(b) Determine the type or types of Awards to be granted to each
Participant;
(c) Determine the number of Awards to be granted and the number of
shares of Stock to which an Award will relate;
(d) Determine the terms and conditions of any Award granted under the
Plan, including but not limited to, the exercise price, grant price, or
purchase price, any restrictions or limitations on the Award, any schedule
for lapse of forfeiture restrictions or restrictions on the exercisability
of an Award, and accelerations or waivers thereof, based in each case on
such considerations as the Committee in its sole discretion determines;
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(e) Accelerate the vesting or lapse of restrictions of any outstanding
Award, based in each case on such considerations as the Committee in its
sole discretion determines;
(f) Determine whether, to what extent, and under what circumstances an
Award may be settled in, or the exercise price of an Award may be paid in,
cash, Stock, other Awards, or other property, or an Award may be canceled,
forfeited, or surrendered;
(g) Prescribe the form of each Award Agreement, which need not be
identical for each Participant;
(h) Decide all other matters that must be determined in connection
with an Award;
(i) Establish, adopt or revise any rules and regulations as it may
deem necessary or advisable to administer the Plan;
(j) Make all other decisions and determinations that may be required
under the Plan or as the Committee deems necessary or advisable to
administer the Plan; and
(k) Amend the Plan or any Award Agreement as provided herein.
4.4. Decisions Binding. The Committee's interpretation of the Plan, any
Awards granted under the Plan, any Award Agreement and all decisions and
determinations by the Committee with respect to the Plan are final, binding, and
conclusive on all parties.
ARTICLE 5
SHARES SUBJECT TO THE PLAN
5.1. Number of Shares. Subject to adjustment as provided in Section 14.1,
the aggregate number of shares of Stock reserved and available for Awards or
which may be used to provide a basis of measurement for or to determine the
value of an Award (such as with a Stock Appreciation Right or Performance Unit
Award) shall be TWENTY-FIVE MILLION (25,000,000) shares. Not more than 10% of
the total authorized shares may be granted as Awards of Restricted Stock or
unrestricted Stock Awards.
5.2. Lapsed Awards. To the extent that an Award is canceled, terminates,
expires or lapses for any reason, any shares of Stock subject to the Award will
again be available for the grant of an Award under the Plan and shares subject
to SARs or other Awards settled in cash will be available for the grant of an
Award under the Plan.
5.3. Stock Distributed. Any Stock distributed pursuant to an Award may
consist, in whole or in part, of authorized and unissued Stock, treasury Stock
or Stock purchased on the open market.
5.4. Limitation on Awards. Notwithstanding any provision in the Plan to
the contrary (but subject to adjustment as provided in Section 14.1), the
maximum number of shares of Stock with respect to one or more Options and/or
SARs that may be granted during any one calendar year under the Plan to any one
Covered Employee shall be 150,000. The maximum fair market value (measured as of
the date of grant) of any Awards other than Options and SARs that may be
received by a Covered Employee (less any consideration paid by the Participant
for such Award) during any one calendar year under the Plan shall be $4,000,000.
ARTICLE 6
ELIGIBILITY
6.1. General. Awards may be granted only to individuals who are employees,
officers or directors of the Company or a Parent or Subsidiary.
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ARTICLE 7
STOCK OPTIONS
7.1. General. The Committee is authorized to grant Options to Participants
on the following terms and conditions:
(a) Exercise Price. The exercise price per share of Stock under an
Option shall be determined by the Committee, provided that the exercise
price for any Option shall not be less than the Fair Market Value as of the
date of the grant.
(b) Time and Conditions of Exercise. The Committee shall determine
the time or times at which an Option may be exercised in whole or in part.
The Committee also shall determine the performance or other conditions, if
any, that must be satisfied before all or part of an Option may be
exercised. The Committee may waive any exercise provisions at any time in
whole or in part based upon factors as the Committee may determine in its
sole discretion so that the Option becomes exerciseable at an earlier date.
(c) Payment. The Committee shall determine the methods by which the
exercise price of an Option may be paid, the form of payment, including,
without limitation, cash, shares of Stock, or other property (including
"cashless exercise" arrangements), and the methods by which shares of Stock
shall be delivered or deemed to be delivered to Participants; provided that
if shares of Stock surrendered in payment of the exercise price were
themselves acquired otherwise than on the open market, such shares shall
have been held by the Participant for at least six months.
(d) Evidence of Grant. All Options shall be evidenced by a written
Award Agreement between the Company and the Participant. The Award
Agreement shall include such provisions, not inconsistent with the Plan, as
may be specified by the Committee.
7.2. Incentive Stock Options. The terms of any Incentive Stock Options
granted under the Plan must comply with the following additional rules:
(a) Exercise Price. The exercise price per share of Stock shall be
set by the Committee, provided that the exercise price for any Incentive
Stock Option shall not be less than the Fair Market Value as of the date of
the grant.
(b) Exercise. In no event may any Incentive Stock Option be
exercisable for more than ten years from the date of its grant.
(c) Lapse of Option. An Incentive Stock Option shall lapse under the
earliest of the following circumstances; provided, however, that the
Committee may, prior to the lapse of the Incentive Stock Option under the
circumstances described in paragraphs (3), (4) and (5) below, provide in
writing that the Option will extend until a later date, but if Option is
exercised after the dates specified in paragraphs (3), (4) and (5) below,
it will automatically become a Non-Qualified Stock Option:
(1) The Incentive Stock Option shall lapse as of the option
expiration date set forth in the Award Agreement.
(2) The Incentive Stock Option shall lapse ten years after it is
granted, unless an earlier time is set in the Award Agreement.
(3) If the Participant terminates employment for any reason other
than as provided in paragraph (4) or (5) below, the Incentive Stock
Option shall lapse, unless it is previously exercised, three months
after the Participant's termination of employment; provided, however,
that if the Participant's employment is terminated by the Company for
cause or by the Participant without the consent of the Company, the
Incentive Stock Option shall (to the extent not previously exercised)
lapse immediately.
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(4) If the Participant terminates employment by reason of his
Disability, the Incentive Stock Option shall lapse, unless it is
previously exercised, one year after the Participant's termination of
employment.
(5) If the Participant dies while employed, or during the
three-month period described in paragraph (3) or during the one-year
period described in paragraph (4) and before the Option otherwise
lapses, the Option shall lapse one year after the Participant's death.
Upon the Participant's death, any exercisable Incentive Stock Options
may be exercised by the Participant's beneficiary, determined in
accordance with Section 13.6.
Unless the exercisability of the Incentive Stock Option is accelerated
as provided in Article 13, if a Participant exercises an Option after
termination of employment, the Option may be exercised only with respect to
the shares that were otherwise vested on the Participant's termination of
employment.
(d) Individual Dollar Limitation. The aggregate Fair Market Value
(determined as of the time an Award is made) of all shares of Stock with
respect to which Incentive Stock Options are first exercisable by a
Participant in any calendar year may not exceed $100,000.00.
(e) Ten Percent Owners. No Incentive Stock Option shall be granted to
any individual who, at the date of grant, owns stock possessing more than
ten percent of the total combined voting power of all classes of stock of
the Company or any Parent or Subsidiary unless the exercise price per share
of such Option is at least 110% of the Fair Market Value per share of Stock
at the date of grant and the Option expires no later than five years after
the date of grant.
(f) Expiration of Incentive Stock Options. No Award of an Incentive
Stock Option may be made pursuant to the Plan after the day immediately
prior to the tenth anniversary of the Effective Date.
(g) Right to Exercise. During a Participant's lifetime, an Incentive
Stock Option may be exercised only by the Participant or, in the case of
the Participant's Disability, by the Participant's guardian or legal
representative.
(h) Directors. The Committee may not grant an Incentive Stock Option
to a non-employee director. The Committee may grant an Incentive Stock
Option to a director who is also an employee of the Company or Parent or
Subsidiary but only in that individual's position as an employee and not as
a director.
ARTICLE 8
STOCK APPRECIATION RIGHTS
8.1. Grant of SARs. The Committee is authorized to grant SARs to
Participants on the following terms and conditions:
(a) Right to Payment. Upon the exercise of a Stock Appreciation
Right, the Participant to whom it is granted has the right to receive the
excess, if any, of:
(1) The Fair Market Value of one share of Stock on the date of
exercise; over
(2) The grant price of the Stock Appreciation Right as determined
by the Committee, which shall not be less than the Fair Market Value of
one share of Stock on the date of grant.
(b) Other Terms. All awards of Stock Appreciation Rights shall be
evidenced by an Award Agreement. The terms, methods of exercise, methods of
settlement, form of consideration payable in settlement, and any other
terms and conditions of any Stock Appreciation Right shall be determined by
the Committee at the time of the grant of the Award and shall be reflected
in the Award Agreement.
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ARTICLE 9
PERFORMANCE UNITS
9.1. Grant of Performance Units. The Committee is authorized to grant
Performance Units to Participants on such terms and conditions as may be
selected by the Committee. The Committee shall have the complete discretion to
determine the number of Performance Units granted to each Participant. All
Awards of Performance Units shall be evidenced by an Award Agreement.
9.2. Right to Payment. A grant of Performance Units gives the Participant
rights, valued as determined by the Committee, and payable to, or exercisable
by, the Participant to whom the Performance Units are granted, in whole or in
part, as the Committee shall establish at grant or thereafter. The Committee
shall set performance goals and other terms or conditions to payment of the
Performance Units in its discretion which, depending on the extent to which they
are met, will determine the number and value of Performance Units that will be
paid to the Participant.
9.3. Other Terms. Performance Units may be payable in cash, Stock, or
other property, and have such other terms and conditions as determined by the
Committee and reflected in the Award Agreement.
ARTICLE 10
RESTRICTED STOCK AWARDS
10.1. Grant of Restricted Stock. The Committee is authorized to make
Awards of Restricted Stock to Participants in such amounts and subject to such
terms and conditions as may be selected by the Committee. All Awards of
Restricted Stock shall be evidenced by a Restricted Stock Award Agreement.
10.2. Issuance and Restrictions. Restricted Stock shall be subject to such
restrictions on transferability and other restrictions as the Committee may
impose (including, without limitation, limitations on the right to vote
Restricted Stock or the right to receive dividends on the Restricted Stock).
These restrictions may lapse separately or in combination at such times, under
such circumstances, in such installments, upon the satisfaction of performance
goals or otherwise, as the Committee determines at the time of the grant of the
Award or thereafter.
10.3. Forfeiture. Except as otherwise determined by the Committee at the
time of the grant of the Award or thereafter, upon termination of employment
during the applicable restriction period or upon failure to satisfy a
performance goal during the applicable restriction period, Restricted Stock that
is at that time subject to restrictions shall be forfeited and reacquired by the
Company; provided, however, that the Committee may provide in any Award
Agreement that restrictions or forfeiture conditions relating to Restricted
Stock will be waived in whole or in part in the event of terminations resulting
from specified causes, and the Committee may in other cases waive in whole or in
part restrictions or forfeiture conditions relating to Restricted Stock.
10.4. Certificates for Restricted Stock. Restricted Stock granted under
the Plan may be evidenced in such manner as the Committee shall determine. If
certificates representing shares of Restricted Stock are registered in the name
of the Participant, certificates must bear an appropriate legend referring to
the terms, conditions, and restrictions applicable to such Restricted Stock.
ARTICLE 11
DIVIDEND EQUIVALENTS
11.1. Grant of Dividend Equivalents. The Committee is authorized to grant
Dividend Equivalents to Participants subject to such terms and conditions as may
be selected by the Committee. Dividend Equivalents shall entitle the Participant
to receive payments equal to dividends with respect to all or a portion of the
number of shares of Stock subject to an Award, as determined by the Committee.
The Committee may
B-8
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provide that Dividend Equivalents be paid or distributed when accrued or be
deemed to have been reinvested in additional shares of Stock, or otherwise
reinvested.
ARTICLE 12
OTHER STOCK-BASED AWARDS
12.1. Grant of Other Stock-Based Awards. The Committee is authorized,
subject to limitations under applicable law, to grant to Participants such other
Awards that are payable in, valued in whole or in part by reference to, or
otherwise based on or related to shares of Stock, as deemed by the Committee to
be consistent with the purposes of the Plan, including without limitation shares
of Stock awarded purely as a "bonus" and not subject to any restrictions or
conditions, convertible or exchangeable debt securities, other rights
convertible or exchangeable into shares of Stock, and Awards valued by reference
to book value of shares of Stock or the value of securities of or the
performance of specified Parents or Subsidiaries. The Committee shall determine
the terms and conditions of such Awards.
ARTICLE 13
PROVISIONS APPLICABLE TO AWARDS
13.1. Stand-Alone, Tandem, and Substitute Awards. Awards granted under the
Plan may, in the discretion of the Committee, be granted either alone or in
addition to, in tandem with, or in substitution for, any other Award granted
under the Plan. If an Award is granted in substitution for another Award, the
Committee may require the surrender of such other Award in consideration of the
grant of the new Award. Awards granted in addition to or in tandem with other
Awards may be granted either at the same time as or at a different time from the
grant of such other Awards.
13.2. Exchange Provisions. The Committee may at any time offer to exchange
or buy out any previously granted Award for a payment in cash, Stock, or another
Award (subject to Section 14.1), based on the terms and conditions the Committee
determines and communicates to the Participant at the time the offer is made,
and after taking into account the tax, securities and accounting effects of such
an exchange.
13.3. Term of Award. The term of each Award shall be for the period as
determined by the Committee, provided that in no event shall the term of any
Incentive Stock Option or a Stock Appreciation Right granted in tandem with the
Incentive Stock Option exceed a period of ten years from the date of its grant
(or, if Section 7.2(e) applies, five years from the date of its grant).
13.4. Form of Payment for Awards. Subject to the terms of the Plan and any
applicable law or Award Agreement, payments or transfers to be made by the
Company or a Parent or Subsidiary on the grant or exercise of an Award may be
made in such form as the Committee determines at or after the time of grant,
including without limitation, cash, Stock, other Awards, or other property, or
any combination, and may be made in a single payment or transfer, in
installments, or on a deferred basis, in each case determined in accordance with
rules adopted by, and at the discretion of, the Committee.
13.5. Limits on Transfer. No right or interest of a Participant in any
unexercised or restricted Award may be pledged, encumbered, or hypothecated to
or in favor of any party other than the Company or a Parent or Subsidiary, or
shall be subject to any lien, obligation, or liability of such Participant to
any other party other than the Company or a Parent or Subsidiary. No unexercised
or restricted Award shall be assignable or transferable by a Participant other
than by will or the laws of descent and distribution or, except in the case of
an Incentive Stock Option, pursuant to a domestic relations order that would
satisfy Section 414(p)(1)(A) of the Code if such Section applied to an Award
under the Plan; provided, however, that the Committee may (but need not) permit
other transfers where the Committee concludes that such transferability (i) does
not result in accelerated taxation, (ii) does not cause any Option intended to
be an incentive stock option to fail to be described in Code Section 422(b), and
(iii) is otherwise appropriate and desirable, taking into account any factors
deemed relevant, including without limitation, any state or federal tax or
securities laws or regulations applicable to transferable Awards.
B-9
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13.6. Beneficiaries. Notwithstanding Section 13.5, a Participant may, in
the manner determined by the Committee, designate a beneficiary to exercise the
rights of the Participant and to receive any distribution with respect to any
Award upon the Participant's death. A beneficiary, legal guardian, legal
representative, or other person claiming any rights under the Plan is subject to
all terms and conditions of the Plan and any Award Agreement applicable to the
Participant, except to the extent the Plan and Award Agreement otherwise
provide, and to any additional restrictions deemed necessary or appropriate by
the Committee. If no beneficiary has been designated or survives the
Participant, payment shall be made to the Participant's estate. Subject to the
foregoing, a beneficiary designation may be changed or revoked by a Participant
at any time provided the change or revocation is filed with the Committee.
13.7. Stock Certificates. All Stock certificates delivered under the Plan
are subject to any stop-transfer orders and other restrictions as the Committee
deems necessary or advisable to comply with federal or state securities laws,
rules and regulations and the rules of any national securities exchange or
automated quotation system on which the Stock is listed, quoted, or traded. The
Committee may place legends on any Stock certificate to reference restrictions
applicable to the Stock.
13.8. Acceleration Upon a Change in Control. Except as otherwise provided
in the Award Agreement, upon the occurrence of a Change in Control which is not
a Merger of Equals, all outstanding Options, Stock Appreciation Rights, and
other Awards in the nature of rights that may be exercised shall become fully
exercisable and all restrictions on outstanding Awards shall lapse; provided,
however that such acceleration will not occur if, in the opinion of the
Company's accountants, such acceleration would preclude the use of "pooling of
interest" accounting treatment for a Change in Control transaction that (a)
would otherwise qualify for such accounting treatment, and (b) is contingent
upon qualifying for such accounting treatment. To the extent that this provision
causes Incentive Stock Options to exceed the dollar limitation set forth in
Section 7.2(d), the excess Options shall be deemed to be Non-Qualified Stock
Options.
13.9. Acceleration Upon Certain Events Not Constituting a Change in
Control. In the event of the occurrence of any circumstance, transaction or
event not constituting a Change in Control (as defined in Section 3.1) but which
the Board of Directors deems to be, or to be reasonably likely to lead to, an
effective change in control of the Company of a nature that would be required to
be reported in response to Item 6(e) of Schedule 14A of the 1934 Act, the
Committee may in its sole discretion declare all outstanding Options, Stock
Appreciation Rights, and other Awards in the nature of rights that may be
exercised to be fully exercisable, and/or all restrictions on all outstanding
Awards to have lapsed, in each case, as of such date as the Committee may, in
its sole discretion, declare, which may be on or before the consummation of such
transaction or event. To the extent that this provision causes Incentive Stock
Options to exceed the dollar limitation set forth in Section 7.2(d), the excess
Options shall be deemed to be Non-Qualified Stock Options.
13.10. Acceleration for Any Other Reason. Regardless of whether an event
has occurred as described in Section 13.8 or 13.9 above, the Committee may in
its sole discretion at any time determine that all or a portion of a
Participant's Options, Stock Appreciation Rights, and other Awards in the nature
of rights that may be exercised shall become fully or partially exercisable,
and/or that all or a part of the restrictions on all or a portion of the
outstanding Awards shall lapse, in each case, as of such date as the Committee
may, in its sole discretion, declare. The Committee may discriminate among
Participants and among Awards granted to a Participant in exercising its
discretion pursuant to this Section 13.10.
13.11. Effect of Acceleration. If an Award is accelerated under Section
13.8 or 13.9, the Committee may, in its sole discretion, provide (i) that the
Award will expire after a designated period of time after such acceleration to
the extent not then exercised, (ii) that the Award will be settled in cash
rather than Stock, (iii) that the Award will be assumed by another party to the
transaction giving rise to the acceleration or otherwise be equitably converted
in connection with such transaction, or (iv) any combination of the foregoing.
The Committee's determination need not be uniform and may be different for
different Participants whether or not such Participants are similarly situated.
13.12. Performance Goals. The Committee may determine that any Award
granted pursuant to this Plan to a Participant (including, but not limited to,
Participants who are Covered Employees) shall be determined solely on the basis
of (a) the achievement by the Company or a Parent or Subsidiary of a specified
B-10
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target return, or target growth in return, on equity or assets, (b) the
Company's total shareholder return (stock price appreciation plus reinvested
dividends) relative to a defined comparison group or target over a specified
performance period, (c) the Company's stock price, (d) the achievement by an
individual, the Company, or a business unit of the Company, Parent or Subsidiary
of a specified target, or target growth in, revenues, net income or earnings per
share or decrease in expense, (e) the achievement of objectively determinable
goals with respect to service or product delivery, service or product quality,
customer satisfaction, meeting budgets and/or retention of employees or (f) any
combination of the goals set forth in (a) through (e) above. If an Award is made
on such basis, the Committee shall establish goals prior to the beginning of the
period for which such performance goal relates (or such later date as may be
permitted under Code Section 162(m) or the regulations thereunder) and the
Committee may for any reason reduce (but not increase) any Award,
notwithstanding the achievement of a specified goal. Any payment of an Award
granted with performance goals shall be conditioned on the written certification
of the Committee in each case that the performance goals and any other material
conditions were satisfied.
13.13. Termination of Employment. Whether military, government or other
service or other leave of absence shall constitute a termination of employment
shall be determined in each case by the Committee at its discretion, and any
determination by the Committee shall be final and conclusive. A termination of
employment shall not occur in a circumstance in which a Participant transfers
from the Company to one of its Parents or Subsidiaries, transfers from a Parent
or Subsidiary to the Company, or transfers from one Parent or Subsidiary to
another Parent or Subsidiary.
ARTICLE 14
CHANGES IN CAPITAL STRUCTURE
14.1. General. In the event a stock dividend is declared upon the Stock,
the authorization limits under Section 5.1 and 5.4 shall be increased
proportionately, and the shares of Stock then subject to each Award shall be
increased proportionately without any change in the aggregate purchase price
therefor. In the event the Stock shall be changed into or exchanged for a
different number or class of shares of stock or securities of the Company or of
another corporation, whether through reorganization, recapitalization,
reclassification, share exchange, stock split-up, combination of shares, merger
or consolidation, the authorization limits under Section 5.1 and 5.4 shall be
adjusted proportionately, and there shall be substituted for each such share of
Stock then subject to each Award the number and class of shares into which each
outstanding share of Stock shall be so exchanged, all without any change in the
aggregate purchase price for the shares then subject to each Award, or, subject
to Section 15.2, there shall be made such other equitable adjustment as the
Committee shall approve.
ARTICLE 15
AMENDMENT, MODIFICATION AND TERMINATION
15.1. Amendment, Modification and Termination. The Board or the Committee
may, at any time and from time to time, amend, modify or terminate the Plan
without stockholder approval; provided, however, that the Board or Committee may
condition any amendment or modification on the approval of stockholders of the
Company if such approval is necessary or deemed advisable with respect to tax,
securities or other applicable laws, policies or regulations.
15.2. Awards Previously Granted. At any time and from time to time, the
Committee may amend, modify or terminate any outstanding Award without approval
of the Participant; provided, however, that, subject to the terms of the
applicable Award Agreement, such amendment, modification or termination shall
not, without the Participant's consent, reduce or diminish the value of such
Award determined as if the Award had been exercised, vested, cashed in or
otherwise settled on the date of such amendment or termination. No termination,
amendment, or modification of the Plan shall adversely affect any Award
previously granted under the Plan, without the written consent of the
Participant.
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ARTICLE 16
GENERAL PROVISIONS
16.1. No Rights to Awards. No Participant or eligible participant shall
have any claim to be granted any Award under the Plan, and neither the Company
nor the Committee is obligated to treat Participants or eligible participants
uniformly.
16.2. No Stockholder Rights. No Award gives the Participant any of the
rights of a stockholder of the Company unless and until shares of Stock are in
fact issued to such person in connection with such Award.
16.3. Withholding. The Company or any Parent or Subsidiary shall have the
authority and the right to deduct or withhold, or require a Participant to remit
to the Company, an amount sufficient to satisfy federal, state, and local taxes
(including the Participant's FICA obligation) required by law to be withheld
with respect to any taxable event arising as a result of the Plan. With respect
to withholding required upon any taxable event under the Plan, the Committee
may, at the time the Award is granted or thereafter, require that any such
withholding requirement be satisfied, in whole or in part, by withholding shares
of Stock having a Fair Market Value on the date of withholding equal to the
amount required to be withheld for tax purposes, all in accordance with such
procedures as the Committee establishes.
16.4. No Right to Continued Service. Nothing in the Plan or any Award
Agreement shall interfere with or limit in any way the right of the Company or
any Parent or Subsidiary to terminate any Participant's employment or status as
an officer or director at any time, nor confer upon any Participant any right to
continue as an employee, officer or director of the Company or any Parent or
Subsidiary.
16.5. Unfunded Status of Awards. The Plan is intended to be an "unfunded"
plan for incentive and deferred compensation. With respect to any payments not
yet made to a Participant pursuant to an Award, nothing contained in the Plan or
any Award Agreement shall give the Participant any rights that are greater than
those of a general creditor of the Company or any Parent or Subsidiary.
16.6. Indemnification. To the extent allowable under applicable law, each
member of the Committee shall be indemnified and held harmless by the Company
from any loss, cost, liability, or expense that may be imposed upon or
reasonably incurred by such member in connection with or resulting from any
claim, action, suit, or proceeding to which such member may be a party or in
which he may be involved by reason of any action or failure to act under the
Plan and against and from any and all amounts paid by such member in
satisfaction of judgment in such action, suit, or proceeding against him
provided he gives the Company an opportunity, at its own expense, to handle and
defend the same before he undertakes to handle and defend it on his own behalf.
The foregoing right of indemnification shall not be exclusive of any other
rights of indemnification to which such persons may be entitled under the
Company's Articles of Incorporation or Bylaws, as a matter of law, or otherwise,
or any power that the Company may have to indemnify them or hold them harmless.
16.7. Relationship to Other Benefits. No payment under the Plan shall be
taken into account in determining any benefits under any pension, retirement,
savings, profit sharing, group insurance, welfare or benefit plan of the Company
or any Parent or Subsidiary unless provided otherwise in such other plan.
16.8. Expenses. The expenses of administering the Plan shall be borne by
the Company and its Parents or Subsidiaries.
16.9. Titles and Headings. The titles and headings of the Sections in the
Plan are for convenience of reference only, and in the event of any conflict,
the text of the Plan, rather than such titles or headings, shall control.
16.10. Gender and Number. Except where otherwise indicated by the context,
any masculine term used herein also shall include the feminine; the plural shall
include the singular and the singular shall include the plural.
B-12
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16.11. Fractional Shares. No fractional shares of Stock shall be issued
and the Committee shall determine, in its discretion, whether cash shall be
given in lieu of fractional shares or whether such fractional shares shall be
eliminated by rounding up.
16.12. Government and Other Regulations. The obligation of the Company to
make payment of awards in Stock or otherwise shall be subject to all applicable
laws, rules, and regulations, and to such approvals by government agencies as
may be required. The Company shall be under no obligation to register under the
1933 Act, or any state securities act, any of the shares of Stock paid under the
Plan. The shares paid under the Plan may in certain circumstances be exempt from
registration under the 1933 Act, and the Company may restrict the transfer of
such shares in such manner as it deems advisable to ensure the availability of
any such exemption.
16.13. Governing Law. To the extent not governed by federal law, the Plan
and all Award Agreements shall be construed in accordance with and governed by
the laws of the State of Delaware.
16.14. Additional Provisions. Each Award Agreement may contain such other
terms and conditions as the Committee may determine; provided that such other
terms and conditions are not inconsistent with the provisions of this Plan.
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REGIONS FINANCIAL CORPORATION
P.O. Box 10247
Birmingham, Alabama 35202-0247
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Carl E. Jones, Jr., Richard 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 4, 2001, at the Annual Meeting of stockholders to be held
May 16, 2001, 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 Employee Stock Ownership 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.
--------------------------------------------------------------------------------
- FOLD AND DETACH HERE -
42
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 four nominees for 2. To approve an amendment to Regions [ ] [ ] [ ]
Directors director of Regions listed below: 1999 Long Term Incentive Plan.
For, except vote withheld (1) Carl E. Jones, Jr., 3. In their discretion on such other business as may properly
from the following (2) Michael W. Murphy, come before the meeting or any adjournments thereof.
nominee(s): (3) Henry E. Simpson and
(4) John H. Watson
-----------------------------------
Please sign exactly as your 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.
---------------------------------------------
2001
---------------------------------------------
SIGNATURE(S) DATE
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-FOLD AND DETACH HERE-