<PAGE>
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:
[X] Preliminary Proxy Statement
[_] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to (S)240.14a-11(c) or (S)240.14a-12
COMPASS BANCSHARES, INC.
------------------------------------------------
(Name of Registrant as Specified In Its Charter)
COMPASS BANCSHARES, INC.
------------------------------------------------
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
[X] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(j)(2).
[_] $500 per each party to the controversy pursuant to Exchange Act Rule 14a-
6(i)(3).
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:*
(4) Proposed maximum aggregate value of transaction:
- --------
* Set forth the amount on which the filing fee is calculated and state how it
was determined.
[_] 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:
Notes:
<PAGE>
COMPASS BANCSHARES, INC.
To the Shareholders of
Compass Bancshares, Inc.
In connection with the annual meeting of shareholders of Compass
Bancshares, Inc., to be held on May 16, 1994, we enclose a Notice of Meeting and
Proxy Statement containing information concerning those matters which are to be
considered at the meeting.
Detailed information concerning the Corporation's activities and
operations during 1993 is contained in our annual report, which is also
enclosed.
You are cordially invited to attend the annual meeting in person. Please
sign and return the form of proxy in the enclosed postage-prepaid envelope so
that your shares can be voted in the event you are unable to attend the meeting.
Your proxy will, of course, be returned to you if you are present at the meeting
and so request.
Sincerely yours,
D. Paul Jones, Jr.
Chairman and Chief Executive Officer
Please complete, date, sign and mail promptly the accompanying proxy in the
return envelope furnished for that purpose, whether or not you plan to attend
the meeting.
<PAGE>
COMPASS BANCSHARES, INC.
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
to be held on
May 16, 1994
____________________
The annual meeting of the shareholders of Compass Bancshares, Inc., will
be held in the nineteenth floor offices of the Corporation at 15 South 20th
Street, Birmingham, Alabama, on Monday, May 16, 1994, at 11:00 o'clock, a.m.,
Birmingham time, for the following purposes:
1. To elect four (4) directors, each to serve for a term of three
years or until their successors are elected and qualified.
2. To approve an increase in the number of authorized shares of the
Corporation's common stock, par value $2.00 per share, from
50,000,000 to 100,000,000.
3. To approve the appointment of independent auditors.
4. To transact such other business as may properly come before the
meeting or any adjournment thereof.
Shareholders of record at the close of business on March 31, 1994, are
entitled to notice of and to vote at the meeting.
Shareholders who do not expect to attend the meeting are requested to
sign the enclosed proxy and return it immediately in the enclosed envelope in
order that their shares may be represented at the meeting.
By Order of the Board of Directors
Jerry W. Powell
General Counsel and Secretary
Birmingham, Alabama
April ___, 1994
<PAGE>
COMPASS BANCSHARES, INC.
Proxy Statement for Annual Meeting of
Shareholders to be Held May 16, 1994
_____________________________
INTRODUCTION
This Proxy Statement is furnished to shareholders of Compass Bancshares,
Inc., a Delaware corporation (the "Corporation"), in connection with the
solicitation of proxies by the Board of Directors of the Corporation for use at
the annual meeting of shareholders to be held May 16, 1994, and at any
adjournments thereof, for the purpose of (i) electing four directors of the
Corporation, (ii) approving an increase in the authorized shares of the
Corporation's common stock, par value $2.00 per share, from 50,000,000 to
100,000,000, (iii) approving the appointment of independent auditors and (iv)
transacting such other business as may properly come before the meeting. The
executive offices of the Corporation are located at 15 South 20th Street,
Birmingham, Alabama 35233. This Proxy Statement and the accompanying form of
proxy, together with a copy of the Corporation's annual report for 1993, were
mailed to shareholders of the Corporation on or about April ___, 1994.
Shareholders Entitled to Vote
Each holder of record of the Corporation's common stock as of the close
of business on March 31, 1994, will be entitled to vote at the shareholders'
meeting and at any adjournments thereof. Each shareholder will be entitled to
one vote on each proposal for each share of common stock of the Corporation held
as of such date. At the close of business on that date, there were __________
shares of the Corporation's common stock issued and outstanding. Notwithstanding
the record date specified above, the stock transfer books of the Corporation
will not be closed and stock may be transferred subsequent to the record date,
although all votes must be cast in the names of the shareholders of record as of
the record date.
Vote Required
All matters which may be considered and acted upon by the shareholders
at the meeting require approval by the affirmative vote of the holders of at
least a majority of the shares present in person or by proxy and constituting a
quorum at the annual meeting.
Proxies
If the enclosed form of proxy is executed and returned, it may
nevertheless be revoked at any time before it has been exercised, but if it is
not revoked, the shares represented thereby will be voted by the persons
designated in such proxy. Shares represented by the proxies received will be
voted in accordance with the instructions therein. In the absence of
instructions, proxies will be voted in favor of (i) the election as directors of
the nominees for directors named herein, (ii) approval of the increase in the
Corporation's authorized common stock, and (iii)
<PAGE>
approval of the appointment of KPMG Peat Marwick as independent auditors of the
Corporation for the year ending December 31, 1994.
HOLDINGS OF VOTING SECURITIES
The following table contains information concerning the only person
known to the Corporation to be the beneficial owner of more than five percent of
the Corporation's outstanding common shares as of December 31, 1993:
<TABLE>
<CAPTION>
Name and Address Number of Shares Owned Percent of Class
- ---------------- ---------------------- ----------------
<S> <C> <C>
Compass Bancshares, Inc. 2,611,682 7.2%
Employee Stock Ownership
Plan (the "ESOP") c/o
Compass Bank
Trust Division
P. O. Box 10566
Birmingham, Alabama 35296
</TABLE>
As of December 31, 1993, the number of shares of common stock
beneficially owned by all directors and executive officers of the Corporation as
a group was approximately 4,499,774 shares (12.1%), including outstanding
options to purchase 812,572 shares. (See "Election of Directors".)
ELECTION OF DIRECTORS
Management has nominated the four persons named below for election as
Class III directors, each to hold office for a term of three years or until
their successors shall have been elected and qualified. It is intended that the
persons named in the proxy will vote for the election of these persons.
Management believes that the nominees will be available and able to serve as
directors, but if for any reason any of these persons should not be available or
able to serve, the persons named in the proxy may exercise discretionary
authority to vote for substitutes proposed by the Board of Directors of the
Corporation.
Certain information about the nominees, directors with unexpired terms,
and executive officers who are not also directors or nominees is set forth in
the following table. All directors of the Corporation are also directors of
Compass Bank, the Corporation's lead bank subsidiary headquartered in
Birmingham, Alabama (sometimes referred to herein as the "Bank"), with the
exception of Thomas E. Jernigan. Executive officers who are not also directors
serve at the discretion of the Board of Directors.
2
<PAGE>
Common Stock Ownership
----------------------
<TABLE>
<CAPTION>
Shares
Director or beneficially
Officer of owned at
Corporation December 31, Percent of Principal Occupation Since January 1,
Name Since 1993 Class (1) 1989 and Other Information
---- ----------- ------------ ---------- -------------------------------------
Nominees to serve until annual meeting in 1997 (Class III)
- ----------------------------------------------------------
<S> <C> <C> <C> <C>
Harry B. Brock, Jr. 1970 865,854(2) 2.3 Retired since March 31, 1991, as
Chairman of the Board, Chief Executive
Officer and Treasurer of the Corporation
and Compass Bank. Age 67. Mr. Brock
is director Stanley M. Brock's father.
Stanley M. Brock 1990 167,221 * Partner, Balch & Bingham (law firm).
Age 43.
Garry N. 1991 63,804(3) * Chief Executive Officer of Drummond
Drummond, Sr. Company, Inc. (coal and coke production,
real estate investment). Age 55.
Thomas E. Jernigan 1971 489,622 1.3 President and Chief Executive Officer of
Marathon Corporation (investment
holding company and manufacturer of
men's clothing). Age 68.
<CAPTION>
Directors to serve until annual meeting in 1995 (Class I)
- ---------------------------------------------------------
<S> <C> <C> <C> <C>
Charles W. Daniel 1982 195,968(4) * President, Dantract, Inc. (real estate
investments). Age 53.
D. Paul Jones, Jr. 1978 508,674(5) 1.4 Chairman of the Board, Chief Executive
Officer and President of the Corporation
and Compass Bank. Director of Golden
Enterprises, Inc. Age 51.
G. W. "Red" Leach, 1980 192,629(6) * Insurance consultant; formerly
Jr. proprietor, Red Leach and Sons Insurance
(insurance sales). Age 70.
</TABLE>
3
<PAGE>
<TABLE>
<CAPTION>
Directors to serve until annual meeting in 1996 (Class II)
- ----------------------------------------------------------
<S> <C> <C> <C> <C>
William Eugene Davenport 1993 20,112 * President and Chief Operating
Officer, Russell Lands, Inc.
(resort land development,
residential construction and
building supply stores). Age
53.
Marshall Durbin, Jr. 1971 590,674(7) 1.6 President of Marshall Durbin &
Company, Inc. (poultry processing). Age
62.
Tranum Fitzpatrick 1989 147,279(8) * Chairman of Guilford Company, Inc. and
President of Guilford Capital and Empire-
Rouse, Inc. (real estate investment and
development). Age 55.
Goodwin L. Myrick 1988 916,425(9) 2.5 President and Chairman of the Board
of Alabama Farmers Federation, Alfa
Corporation, Alfa Insurance Companies
and Alfa Services, Inc. (agriculture and
insurance); and a dairy farmer. Director
of Alfa Corporation. Age 68.
John S. Stein 1989 42,015 * President and Chief Executive Officer of
Golden Enterprises, Inc. (snack food and
metal fastener production and
distribution). Director of Golden
Enterprises, Inc. Age 56.
<CAPTION>
Executive Officers Who Are Not Also Directors or Nominees for Director
- ----------------------------------------------------------------------
<S> <C> <C> <C> <C>
Garrett R. Hegel 1990 35,081(10) * Chief Financial Officer of the
Corporation and Compass Bank since
1990; formerly Senior Vice President-
Finance, and Senior Vice President-
Controller, of First Bank System, Inc.
(multistate bank holding company) and
Senior Manager-Audit of Ernst & Young
(accounting firm). Age 43.
</TABLE>
4
<PAGE>
<TABLE>
<S> <C> <C> <C> <C>
Charles E. McMahen 1990 132,346(11) * Chairman and Chief Executive Officer of
Compass Banks of Texas, Inc. since
1990; formerly Group Chairman of
MCorp (bank holding company). Age
54.
Jerry W. Powell 1981 41,432(12) * General Counsel and Secretary of the
Corporation and Compass Bank; formerly
Associate General Counsel and Assistant
Secretary of the Corporation and the
Bank. Age 44.
Byrd Williams 1993 90,638(13) * Executive Vice President of Compass
Bank since May 1992; Senior Vice
President - Operations of Compass Bank
from 1982 to 1992. Age 48.
Directors, nominees and 4,499,774 12.1
executive officers as a
group (16 persons)
</TABLE>
____________________________
*Less than one percent
(1) Percentages are calculated assuming the issuance of 812,572 options
outstanding under the Corporation's stock option plans described herein.
(2) Includes 824,091 shares owned directly by Mr. Brock and 41,763
shares owned directly by Mr. Brock's spouse. Excludes 580,591 shares owned by
Mr. Brock's grandchildren and adult children. Also excludes 142,468 shares owned
by The Brock Foundation and 960,048 shares owned by The Daniel Foundation of
Alabama, which are charitable foundations for which Mr. Brock serves as a
director and as president, the beneficial ownership of which is disclaimed.
(3) Includes 1,699 shares owned by the Drummond Company, Inc., of which
Mr. Drummond is Chief Executive Officer and principal shareholder.
(4) Includes 12,396 shares held by Mr. Daniel's wife and sons, the
beneficial ownership of which is disclaimed. Does not include 960,048 shares
owned by The Daniel Foundation of Alabama, a charitable foundation for which Mr.
Daniel serves as a director, the beneficial ownership of which is disclaimed.
5
<PAGE>
(5) Includes 9,108 shares subject to options exercisable at December 31,
1993, under the Corporation's stock option plans described herein.
(6) Includes 71,925 shares owned by Mr. Leach's wife, the beneficial
ownership of which is disclaimed.
(7) Includes 443,653 shares owned by Marshall Durbin Food Corporation, a
subsidiary of Marshall Durbin Food, Inc., of which Mr. Durbin is Chairman of the
Board and President, and 20,925 shares owned by The Marshall Durbin Management
Company, Inc. Profit Sharing Trust, of which Mr. Durbin is a trustee and a
beneficiary. Mr. Durbin disclaims beneficial ownership of such shares owned
directly by such Profit Sharing Trust.
(8) Includes 1,800 shares owned by Mr. Fitzpatrick's wife, the
beneficial ownership of which is disclaimed.
(9) Includes 904,369 shares owned by Alfa Mutual Insurance Company, Alfa
Mutual Fire Insurance Company, and Alfa Mutual General Insurance Company, of
which Mr. Myrick is President and Chairman of the Board, with respect to which
Mr. Myrick disclaims beneficial ownership.
(10) Includes 28,125 shares subject to options exercisable at December
31, 1993, under the Corporation's stock option plans described herein.
(11) Includes 102,801 shares subject to options exercisable at December
31, 1993, under the Corporation's stock option plans described herein.
(12) Includes 11,425 shares subject to options exercisable at December
31, 1993, under the Corporation's stock option plans described herein.
(13) Includes 31,525 shares subject to options exercisable at December
31, 1993, under the Corporation's stock option plans described herein.
6
<PAGE>
Remuneration of Directors
The Corporation pays non-employee directors a fee for each board meeting
attended, with the exception of Harry B. Brock, Jr., who has elected not to
receive fees for services as a director. Mr. Jernigan, who serves only on the
Corporation's Board, currently receives $1,150 per meeting attended and a
retainer of $725 per month. The other non-employee directors of the Corporation,
who also serve on the Board of Compass Bank, received $165 per Corporation Board
meeting attended or $460 per Board meeting attended if held on a day when no
Compass Bank Board meeting is held. Board committee members who are not also
employees currently receive $200 for each committee meeting attended if not held
on the same day as a meeting of Compass Bank's Board. Committee chairmen receive
a retainer of $100 per month in addition to the committee meeting attendance
fee. Additional amounts are paid to non-employee directors who serve on the
Board and committees of the Board of Compass Bank in accordance with the
compensation practices set by the Bank's Board of Directors.
Meetings of the Board of Directors and Committees
In 1993 the Board of Directors held four regular quarterly meetings. All
incumbent directors of the Corporation attended 75 percent or more of the
meetings of the Board and the committees on which they served.
Committees of the Board of Directors
Messrs. Jones, Harry B. Brock, Jr., and Durbin constitute the Executive
Committee, which has the full authority of the Board of Directors to act on all
matters between regularly scheduled Board meetings except as to certain matters
of an extraordinary nature. The results of each Executive Committee meeting are
reported to the full Board at the next regularly scheduled Board meeting. The
Executive Committee took action one time in 1993.
Messrs. Stein, Daniel and Leach constitute the Audit Committee of the Board
of Directors. This committee, which met three times during 1993, meets with the
Corporation's internal auditors and periodically with its independent auditors.
The committee's functions include formulating recommendations with respect to
engaging and discharging the independent auditors and considering the fees paid
to, services performed by and the independence of such auditors. This committee
reviews with the internal and independent auditors the plan for and results of
the audit of the Corporation, the adequacy of procedures for internal auditing
and the adequacy of the system of internal control. The Audit Committee also
reviews with the internal auditors and management the results of examinations of
the Corporation's subsidiary banks by the various regulatory authorities and
considers the results of the loan examinations conducted by the internal
auditors of the Corporation.
Messrs. Leach, Daniel, Durbin and Jernigan constitute the Compensation
Committee of the Board of Directors. These members are non-employee directors
and are ineligible to participate
7
<PAGE>
in any of the plans or programs administered by the committee. The primary
function of the committee is to review and approve senior officers' compensation
and to administer the Corporation's incentive plans. The committee met once
during 1993.
Messrs. Harry B. Brock, Jr., Stanley M. Brock, Davenport, Drummond, Durbin,
Fitzpatrick and Myrick constitute the Credit Committee of the Board of
Directors. This committee has general supervision over the credit policies of
the Corporation and its subsidiaries, establishes the appropriate credit
policies for the Corporation and its subsidiaries and provides appropriate
instruction to the officers of the Corporation regarding credit policies and
procedures. The committee met five times during 1993.
The Board of Directors has no standing nominating committee.
Stock Ownership Reporting by Directors and Officers
Section 16(a) of the Securities Exchange Act of 1934 requires that
executive officers and directors of the Corporation file reports of stock
ownership and changes in ownership with the Securities and Exchange Commission
(the "SEC") on Forms 3 (initial statement of ownership), 4 (monthly reports),
and 5 (annual reports). Based solely upon a review of copies of such reports or
representations that no annual reports on Form 5 for the 1993 fiscal year were
required to be filed by officers or directors, the Corporation believes that
Section 16(a) filing requirements applicable to its officers and directors were
complied with during fiscal year 1993, except that on February 16, 1993, Stanley
M. Brock, a director of the Corporation, filed a Form 5 to report a gift of
shares of the Corporation's common stock that was made to him on December 16,
1992, but two additional gifts to him during 1992 totalling 680 shares were not
reported on his Form 5 for the fiscal year 1992 and were not reported on monthly
Forms 4. Certificates evidencing the two gifts were delivered to a person other
than Mr. Brock and the gifted shares were credited during 1992 to a trust
account of which Mr. Brock is the beneficiary. The gifts were not discovered by
Mr. Brock until records of his stock ownership were reconciled after the
applicable due dates for monthly Forms 4 and the due date for a Form 5 for
transactions that occurred during 1992. The gifts were reported, however, on an
amendment to Mr. Brock's Form 5 for the fiscal year 1992 which was filed with
the SEC on March 10, 1994.
EXECUTIVE COMPENSATION AND OTHER INFORMATION
The Corporation's 1993 compensation program for executive officers
consisted principally of salaries, cash bonuses and compensation pursuant to
certain plans which are described below.
Summary Compensation Information
The following table sets forth certain information regarding compensation
paid by the Corporation and its subsidiaries during the fiscal years 1991, 1992,
and 1993 for services
8
<PAGE>
rendered to the Corporation and its subsidiaries during such years by the
Corporation's chief executive officer and the Corporation's four most highly
compensated executive officers other than the chief executive officer who were
serving in such capacities at the end of 1993:
Summary Compensation Table
<TABLE>
<CAPTION>
Long Term
Compensation Awards
Name -----------------------------
and Annual Compensation Securities All Other
Principal --------------------- Underlying Compensation
Position Year Salary Bonus Options (#) ($)(1)
- --------- ---- ---------- --------- -------------- -------------
<S> <C> <C> <C> <C> <C>
D. Paul Jones, Jr. 1993 408,098 408,098 4,150 25,925
Chairman and 1992 385,000 385,000 4,958 27,775
Chief Executive 1991 349,993 315,000 158,693 18,775
Officer of the
Corporation and
the Bank (2)
Garrett R. Hegel 1993 170,888 85,444 4,150 2,115
Chief Financial 1992 168,853 84,427 4,875 10,528
Officer of the 1991 160,812 72,366 6,750 6,143
Corporation and
Compass Bank
Charles E. McMahen 1993 297,676 208,373 4,150 10,819
Chairman and Chief 1992 280,688 196,481 4,958 21,655
Executive Officer 1991 265,835 167,475 83,693 17,365
of Compass Banks of
Texas, Inc. (3)
Jerry W. Powell 1993 140,000 42,000 2,800 12,246
General Counsel 1992 117,810 35,814 3,375 9,584
and Secretary of 1991 112,200 29,509 5,250 10,273
the Corporation and
Compass Bank
Byrd Williams 1993 182,500 127,750 4,150 19,685
Executive Vice 1992 156,062 115,543 27,375 15,812
President of
Compass Bank (4)
</TABLE>
9
<PAGE>
(1) The amounts shown in this column include annual contributions by the
Corporation to the ESOP/401(k) accounts of persons named in the table and
the discount from market value absorbed by the Corporation in connection
with purchases of Corporation common stock under the Corporation's Monthly
Investment Plan. The ESOP/401(k) plan and the Monthly Investment Plan are
generally available to employees of the Corporation.
(2) D. Paul Jones, Jr., became Chairman and Chief Executive Officer on March 31,
1991. Prior to such time during 1991 he served as President and Chief
Operating Officer and in other executive offices of the Corporation and
Compass Bank and information shown for 1991 includes compensation prior to
such date for services rendered in such other capacities.
(3) Compass Banks of Texas, Inc. is a subsidiary of the Corporation and an
indirect parent corporation of Compass Bank-Houston, Compass Bank-Dallas,
and certain other Texas-based subsidiaries of the Corporation.
(4) Byrd Williams became Executive Vice President of Compass Bank on May 18,
1992. Information shown for the year 1992 concerning Mr. Williams includes
compensation paid to him in such capacity after such date and prior to such
date in his capacity as Compass Bank's Senior Vice President - Operations.
Compensation Pursuant to Plans
The Corporation has certain compensation plans, described below, which
may provide benefits to executive officers of the Corporation.
Long Term Incentive Plans
The Corporation's shareholders approved the 1982 and 1989 Long Term
Incentive Plans (the "Plans"), which provide for the granting of incentive
awards in the form of stock options, stock appreciation rights, performance
units, restricted stock, supplemental cash and in such other forms as may be
deemed appropriate from time to time under the circumstances. The Plans are
administered by the Compensation Committee of the Board of Directors, which has
the sole discretion, subject to the terms of the Plans, to determine those
employees, including executive officers, eligible to receive awards and the
amount and type of such awards. The Compensation
10
<PAGE>
Committee also has the authority to interpret the Plans, formulate the terms and
conditions of award agreements and make all other determinations required in the
administration thereof. Under the 1982 Long Term Incentive Plan the committee is
authorized to grant awards of up to 2,475,000 shares of the Corporation's common
stock, subject to adjustment for capital structure changes. Under the 1989 Long
Term Incentive Plan the Compensation Committee may grant awards of up to
1,500,000 shares of the Corporation's common stock, subject to adjustment for
capital structure changes.
The following table reflects certain information concerning grants of
options to purchase the Corporation's common stock that were made by the
Corporation during 1993 to the executive officers of the Corporation named in
the Summary Compensation Table above:
Option Grants in Last Fiscal Year
<TABLE>
<CAPTION>
Individual Grants
-----------------------
Numbers % of Potential
of Total Realizable Value at
Securities Options Assumed Annual
Underlying Granted to Exercise Appreciation
Options Employees or Base Expir- for Option Term
Granted in Fiscal Price ation --------------------
Name (#) Year ($/Sh)(1) Date 5%($)(1) 10%($)(1)
- ---- ---------- ---------- --------- ------- -------- ---------
<S> <C> <C> <C> <C> <C> <C>
D . Paul Jones, Jr. 4,150 2.28 24.00 2/14/03 62,624 158,738
Garrett R. Hegel 4,150 2.28 24.00 2/14/03 62,624 158,738
Charles E. McMahen 4,150 2.28 24.00 2/14/03 62,624 158,738
Jerry W. Powell 2,800 1.54 24.00 2/14/03 42,252 107,100
Byrd Williams 4,150 2.28 24.00 2/14/03 62,624 158,738
</TABLE>
(1) The dollar amounts shown are based on certain assumed rates of appreciation
and the assumption that the options will not be exercised until the end of the
expiration periods applicable to the options. Actual realizable values, if any,
on stock option exercises and common stock holdings are dependent on the future
performance of the Corporation's common stock and overall stock market
conditions. There can be no assurance that the amounts reflected will be
achieved.
11
<PAGE>
The following table reflects certain information concerning exercises of
options with respect to the Corporation's common stock during 1993 by the
executive officers of the Corporation named in the Summary Compensation Table
above:
Aggregated Option Exercises in 1993
and 1993 Year-End Option Values
<TABLE>
<CAPTION>
Number of
Securities Value of
Underlying Unexercised
Unexercised In-the-Money
Options Options at
1993 Year- 1993 Year-
End (#) End ($)
Shares Acquired Value ------------- -------------
on Exercise Realized Exercisable/ Exercisable/
Name (#) ($) Unexercisable Unexercisable
- ---- --------------- -------- ------------- -------------
<S> <C> <C> <C> <C>
D. Paul Jones, Jr. 0 0 9,108/0 9,073/0
Garrett R. Hegel 2,650 34,229 28,125/0 236,270/0
Charles E. McMahen 0 0 102,801/0 1,014,550/0
Jerry W. Powell 0 0 11,425/0 61,301/0
Byrd Williams 0 0 31,525/0 35,246/0
</TABLE>
____________________________________________
Pension Plan
The Corporation has adopted a defined benefit pension plan pursuant to
which participants are entitled to an annual benefit on retirement equal to a
percentage of the average base compensation (generally defined as direct cash
compensation exclusive of bonuses, such as the bonuses shown in the Summary
Compensation Table above, and commissions) earned in the five consecutive years
of benefit service which produces the highest average. The following table shows
the estimated annual benefits payable upon retirement to salaried employees,
including executive officers, assuming retirement at normal retirement age 65 on
January 1, 1994:
12
<PAGE>
Pension Plan Table
<TABLE>
<CAPTION>
Highest
average
earnings- 10 years 15 years 20 years 25 years 30 years
five years service service service service service
- ---------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
$100,000 $ 15,522 $ 23,283 $ 31,044 $ 38,805 $ 46,566
125,000 20,022 30,033 40,044 50,055 60,066
150,000 24,522 36,783 49,044 61,305 73,566
200,000* 33,522 50,283 67,044 83,805 100,566
250,000* 39,974 59,961 79,948 99,935 118,800**
500,000* 39,974 59,961 79,948 99,935 118,800**
</TABLE>
____________________________________________
* The maximum compensation for benefits purposes is $235,840 before 1994 and
$150,000 after 1993.
** The maximum pension under Section 415 of the Internal Revenue Code of 1986.
The percentage amount of the benefit upon retirement under the pension
plan is determined by multiplying the number of years, up to 30, of a
participant's service with the Corporation by 1.8 percent. Benefits are reduced
by Social Security payments at the rate of 1.8 percent of primary Social
Security benefits times years of service up to 30 years. The estimated annual
retirement benefits shown in the foregoing table have been reduced by estimated
Social Security benefits. All employees of the Corporation who are over the age
of 21 and have worked 1,000 hours or more in their first 12 months of employment
or 1,000 hours or more in any calendar year thereafter are eligible to
participate. Under most circumstances employees are vested after five years of
service. Benefits are payable monthly commencing on the later of age 65 or the
participant's date of retirement. Eligible participants may retire at reduced
benefit levels after reaching age 55.
The current estimated years of credited service for each of the
executive officers named in the Summary Compensation Table above are as follows:
D. Paul Jones, Jr.,15; Charles E. McMahen, 3; Garrett R. Hegel, 3; Jerry W.
Powell, 12; and Byrd Williams, 16.
Compensation Committee Interlocks and Insider Participation
Directors of the Corporation G. W. "Red" Leach, Jr., Charles W. Daniel,
Marshall Durbin, Jr., and Thomas E. Jernigan constitute the Compensation
Committee of the Corporation's Board of Directors. D. Paul Jones, Jr., Chairman
and Chief Executive Officer of the Corporation, is a member of the Board of
Directors and serves on the Board Compensation Committee of Golden Enterprises,
Inc., of which John S. Stein, a director of the Corporation, is President and
Chief Executive Officer.
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Report of Board Compensation Committee on Executive Compensation
The Compensation Committee of the Board of Directors of the Corporation
(the "Committee") is composed entirely of persons who are not also officers of
the Corporation or any of its subsidiaries. The Committee is responsible for
reviewing and appraising the compensation of senior officers of the Corporation
and administering the Corporation's incentive plans. See "ELECTION OF DIRECTORS
- -- Committees of the Board of Directors."
The base salaries and incentive bonuses of the executive officers of the
Corporation, all of whom, with the exception of Charles E. McMahen, are also
executive officers of Compass Bank, are paid by Compass Bank. Mr. McMahen's
compensation is paid by Compass Texas Management, Inc., a subsidiary of the
Corporation that provides management and administrative services to the
Corporation's Texas-based subsidiaries. (The procedures relating to the
determination of Mr. McMahen's compensation is identical to the procedures
employed with respect to senior management officials of Compass Bank as
described herein and are encompassed in the description herein.) Management of
the Corporation and Compass Bank are compensated primarily through base
salaries, incentive bonuses, and equity-based compensation programs that are
designed to reward for long-term strategic management and enhancement of
stockholder value.
It is the Committee's practice to recommend to the full Board the base
salary of the chief executive officer of the Corporation and Compass Bank. The
full Board sets the base salaries of executive officers other than the chief
executive officer based on recommendations to the Committee from the chief
executive officer with respect to such other executive officers' salaries. In
connection with the Committee's setting of the chief executive officer's base
salary, the Human Resources Division of Compass Bank compiles publicly available
data concerning the salaries of the chief executive officers of the largest
Alabama-based bank holding companies other than the Corporation and financial
institutions located outside Alabama that are considered peers of the
Corporation. Such data is presented to the Committee for its consideration at
one or more Committee meetings in January or February of each year for salary
determinations for the ensuing year. The compensation levels approved by the
Committee and by the full Board with respect to the chief executive officer have
generally been at or above the median compensation levels of the other companies
surveyed. In addition to such comparative salary information, the Committee
reviews the financial performance of the Corporation during the prior fiscal
year, in particular the Corporation's net income and earnings per share for the
prior fiscal year as compared to the next previous fiscal year, and the
Incentive Plan adopted by the Board. The Committee then undertakes a subjective
analysis of the chief executive officer's base salary that is not related to any
particular established qualitative or quantitative criteria. Based on such
objective information and its subjective analysis, the Committee then determines
the chief executive officer's base salary to recommend to the full Board.
As noted above, the Board also has historically approved the base
salaries recommended to the Board by the chief executive officer with respect to
each of the other executive officers of the Corporation. Such salary
recommendations and the Board's approval of such recommendations are generally
based primarily on subjective analyses of reasonable base salaries that should
be paid to such persons as a result of their respective job performances during
the
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prior fiscal year and the responsibilities of their offices on behalf of the
Corporation and Compass Bank. Such base salary determinations are based upon
established salary administration guidelines applicable to all employees.
Bonuses paid to the chief executive officer and to other senior
management officials of the Corporation and Compass Bank, including, among
others, all of the persons named in the Summary Compensation Table above, are
based on predetermined performance goals and amounts payable as a percentage of
their base salaries depending on the achievement of those goals. The performance
criteria for bonuses payable for a given fiscal year are typically approved by
the entire Board of Directors at its regular meeting held in the first quarter
of each year.
The chief executive officer's incentive bonus is typically, and was in
1993, based entirely on the achievement of established goals of earnings per
share on the Corporation's common stock as determined in accordance with
generally accepted accounting principles. For fiscal year 1993, the
Corporation's chief executive officer and other of the executive officers were
not entitled to any bonus if the Corporation failed to achieve an increase in
earnings per share of at least 10 percent over earnings per share reported for
the previous fiscal year. An increase in earnings per share of at least 15
percent over the previous fiscal year's earnings per share was also required in
order for maximum achievable bonuses to be paid to the Corporation's chief
executive officer and others.
The chief executive officer's maximum bonus, based solely on earnings
per share goals, is typically 100% of base salary. Other executive officers of
the Corporation and Compass Bank have incentive bonus plans pursuant to which
they receive varying bonuses depending upon the performance of the departments
or divisions of the Corporation or Compass Bank with respect to which they have
supervisory responsibility, the performance of the Corporation or Compass Bank
as a whole, and their respective individual performances. As in the case of the
chief executive officer, those bonus plans provide for the payment of bonuses in
varying amounts as a percentage of base salaries depending on the achievement of
performance goals.
The Committee has considered the anticipated tax treatment to the
Company and to the executive officers of various payments and benefits. In
addition, the Committee is aware that some types of compensation payments and
their deductibility (e.g., the spread on exercise of non-qualified options)
depends upon the timing of an executive officer's vesting or exercise of
previously granted rights, and that interpretations of and changes in the tax
laws and other factors beyond the Committee's control also affect the
deductibility of compensation. For those and other reasons, the Committee will
not necessarily and in all circumstances limit executive compensation to that
deductible under Section 162(m) of the Internal Revenue Code. The Committee will
consider various alternatives to preserving the deductibility of compensation
payments and benefits to the extent reasonably practicable and to the extent
consistent with its other compensation objectives.
The foregoing information captioned "Report of Board Compensation
Committee on Executive Compensation" was reviewed and approved for inclusion in
this Proxy Statement by the
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undersigned members of the Committee:
/s/ Charles W. Daniel /s/ Thomas E. Jernigan
- ------------------------------ ------------------------------
Charles W. Daniel Thomas E. Jernigan
/s/ Marshall Durbin, Jr. /s/ G. W. "Red" Leach, Jr.
- ------------------------------ ------------------------------
Marshall Durbin, Jr. G. W. "Red" Leach, Jr.
Corporate Performance Graph
The following graph illustrates, for the period commencing December 31,
1988, and ending at year-end 1993, the yearly percentage change in the
cumulative total shareholder return on the Corporation's common stock as
compared with the cumulative total returns of the other companies included
within the Standard & Poor's 500 Stock Index and the National Association of
Securities Dealers, Inc., Automated Quotation System ("NASDAQ") Bank Stocks
Index. The graph reflects shareholder returns measured by dividing (i) the sum
of (A) the cumulative amount of dividends paid between year-end 1988 and year-
end 1993, assuming dividend reinvestment, and (B) the difference between the
closing price of the Corporation's common stock as reported through the NASDAQ
on December 31, 1993, and December 31, 1988, by (ii) the closing price of the
Corporation's common stock as reported through NASDAQ on December 31, 1988.
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN*
AMONG COMPASS BANCSHARES, INC., THE S & P 500 STOCK
INDEX AND THE NASDAQ BANK STOCKS INDEX
[GRAPH]
<TABLE>
<CAPTION>
Measurement period Compass S&P 500 NASDAQ Bank
(Fiscal year Covered) Bancshares Index Stocks Index
--------------------- ---------- ------- ------------
<S> <C> <C> <C>
Measurement PT -
12/31/88 $100 $100 $100
FYE 12/31/89 $ 94 $132 $111
FYE 12/31/90 $109 $128 $ 81
FYE 12/31/91 $226 $166 $134
FYE 12/31/92 $288 $179 $194
FYE 12/31/93 $279 $197 $221
</TABLE>
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CERTAIN TRANSACTIONS
Some of the executive officers, directors and proposed nominees for
director of the Corporation and their affiliates are and have been customers of
or had transactions with the Corporation and its subsidiaries in the ordinary
course of business. Such transactions include loans made by the Corporation's
subsidiary banks, all of which were made in the ordinary course of business on
substantially the same terms, including interest rates and collateral, as those
prevailing at the time for comparable transactions with unaffiliated persons and
did not involve more than the normal risk of collectibility or present other
unfavorable features. Additional transactions may be expected to take place with
the subsidiary banks in the ordinary course of business in the future.
The Corporation is a limited partner of Guilford Affordable Housing Fund
I, Ltd., an Alabama limited partnership (the "Partnership"), which was organized
in 1992 for the purpose of acquiring limited partnership interests in other
affiliated or unaffiliated limited partnerships which own and operate apartment
complexes with income eligible for low-income housing tax credits or historic
rehabilitation tax credits under the Internal Revenue Code of 1986. The general
partner of the Partnership and the owner of a one percent partnership interest
is Guilford Capital Corporation, of which Tranum Fitzpatrick, a director of the
Corporation, is the president, a director, and a principal shareholder. Mr.
Fitzpatrick is also the chairman of the board of Guilford Company, Inc., which
provides due diligence functions, compliance audits and certain other services
on a contractual basis to the Partnership. The Corporation has subscribed to
purchase $725,000 of units of interest in the Partnership, $290,000 of which was
invested during 1992, and $159,500 of which was invested during 1993, with the
remaining balance of subscription funds due to be paid in installments by June
1, 1996.
During 1993, D. Paul Jones, Jr., Chairman and Chief Executive Officer of
the Corporation, was indebted to the Corporation in connection with a loan for
the purpose of, among other things, financing the exercise of options to acquire
shares of common stock of the Corporation. Pursuant to a Demand Note and a
Pledge Agreement between Mr. Jones and the Corporation, both dated December 11,
1992, Mr. Jones pledged 317,673 shares of the Corporation's common stock as
collateral for a loan in the original principal amount of $3,450,000, which is
due on demand, bearing interest at an annual rate equal to the London Interbank
Offering Rate ("LIBOR") plus one percent. During 1993, the largest aggregate
amount of indebtedness outstanding on such loan, and the amount outstanding as
of March 1, 1994 was $3,118,750.
During 1993, the law firm of Balch & Bingham, of which Stanley M. Brock,
a director of the
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Corporation, is a member, rendered various legal services to the Corporation and
its subsidiaries. The total fees paid and expenses reimbursed to the firm by the
Corporation, its subsidiaries, and its customers during 1993 were $3,393,791.
PROPOSAL TO AMEND THE RESTATED CERTIFICATE OF INCORPORATION
TO INCREASE AUTHORIZED SHARES OF COMMON STOCK
The Board of Directors has unanimously adopted a proposed amendment to
Article 4 of the Restated Certificate of Incorporation which, if approved by the
shareholders, would increase from 50,000,000 to 100,000,000 the authorized
shares of common stock of the Corporation. The proposed amendment would revise
Article 4.1 of the Corporation's Restated Certificate of Incorporation to read
as follows:
"4.1 Authorized Stock. The total number of shares of all classes of
stock which the Corporation shall have authority to issue is one hundred
twenty-five million (125,000,000) consisting of
(i) Twenty-five million (25,000,000) shares of preferred stock, $0.10
par value per share (hereinafter the "Preferred Stock"); and
(ii) One hundred million (100,000,000) shares of common stock, $2.00
par value per share (hereinafter the "Common Stock")."
The Corporation's Restated Certificate of Incorporation was last amended
to increase the number of authorized shares of common stock to 50,000,000 in
1987. Since such time, the Corporation's common stock has been split in the form
of a stock dividend in July 1991. In addition, authorized shares of common stock
have been issued as consideration in seven acquisition transactions since 1987.
As a result of such stock split and acquisition transactions the Corporation
had, as of January 31, 1994, 36,441,720 issued and outstanding shares of common
stock and 811,787 shares subject to issuance pursuant to outstanding stock
options.
The Board of Directors, therefore, has determined that it is advisable
to increase the authorized number of shares of common stock because there may be
insufficient shares available for issuance from time to time for purposes which
the Board may determine to be in the best interests of the Corporation. Such
purposes would include providing shares for additional stock dividends, for
employee benefit and dividend reinvestment plans, possible future acquisitions,
raising capital and other general corporate purposes related to the development
and expansion of the Corporation. Moreover, shares of preferred stock
convertible into common stock can be issued only if there is sufficient
authorized common stock for issuance upon exercise of conversion rights. If
approved, the newly authorized shares of common stock would be issued by the
Corporation at such times, for such purposes and for such consideration as the
Board of Directors may deem advisable and without further shareholder approval.
Shareholders of the
18
<PAGE>
Corporation do not have preemptive rights to subscribe for or purchase
additional shares of the presently authorized common stock, and shareholders
will have no preemptive rights to subscribe for or purchase any of the
additional shares to be authorized.
Issuance of additional shares of common stock might have antitakeover
effects by diluting the voting power of a person seeking to acquire the
Corporation. Such effect, however, is not the purpose of the proposed increased
authorization and the Board has no present intention of issuing common stock for
such purpose. The authorization to issue additional shares of common stock as
presented in the proposal will not itself affect the rights of existing
shareholders.
Existing Provisions of Restated Certificate of Incorporation and Bylaws
The Corporation's Restated Certificate of Incorporation and Bylaws
presently contain several provisions which may make the Corporation a less
attractive target for an acquisition of control by a prospective acquiror which
does not have the support of the Board of Directors. These provisions may be
briefly summarized as follows:
Section 7.2 Approval of Business Combinations - Minimum Vote: This section
requires an affirmative "supermajority" shareholder vote (80 percent) before the
Corporation can enter into certain Business Combinations (as defined in the
Restated Certificate of Incorporation), except for certain Business Combinations
approved by a supermajority vote of the Board of Directors.
Section 7.3 Approval of Business Combinations - Maximum Vote: This section
requires an even greater supermajority shareholder vote (95 percent) than that
required in Section 7.2 for certain Business Combinations except for Business
Combinations that meet several specified conditions. Among the conditions is one
designed to ensure that shareholders of the Corporation receive a fair price for
any stock purchased from them in a Business Combination.
Section 7.4 Board of Directors: This section sets the number of directors at 14,
except as changed by a supermajority of the Board of Directors and divides the
Board into three nearly equal classes of directors, serving staggered three-year
terms. The section allows directors to be removed only for cause, and only by a
supermajority vote of shareholders. Vacancies or new directorships can only be
filled by a supermajority vote of the directors then in office. The section also
requires advance notice of shareholder nominations to the Board of Directors.
Section 7.5 Evaluation of Business Combinations, etc.: This section provides
that in evaluating any Business Combination, or tender or exchange offer, the
Board of Directors shall consider, in addition to the amount of consideration
involved, social and economic factors, the financial condition, competence,
experience and integrity of the acquiring Person (as defined in the Restated
Certificate of Incorporation) and its management and any other factors it deems
relevant.
Section 7.6 Bylaws: This section permits the Board of Directors to alter, amend,
or repeal the Bylaws, or to adopt new Bylaws, only upon a supermajority vote of
the Board of Directors.
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Section 7.7 Special Meetings of Shareholders: This section permits the Chairman
to call special meetings of shareholders, and requires the Chairman to call
special meetings at the written request of 80 percent of the Board of Directors.
This section also prohibits shareholders from calling a special meeting of
shareholders.
Section 7.8 Shareholders Meeting by Unanimous Written Consent: This section
allows shareholders to take actions without a meeting only with unanimous
written shareholder consent.
Section 7.9 Amendment of Article 7: This section requires a supermajority vote
of both shareholders and the Board of Directors to alter, amend or repeal
Article 7.
Article IX of the Bylaws: Article IX allows shareholders to amend the Bylaws
only by a supermajority vote. The Article also allows the Board of Directors to
amend the Bylaws as provided in the Restated Certificate of Incorporation.
Article III, Section 5 of the Bylaws: This section allows shares of other
corporations owned by the Corporation to be voted only by a supermajority of the
Board of Directors.
Articles IV and V of the Bylaws: These Articles require, respectively, a
supermajority vote of the Board of Directors for the election and removal of
members of the Executive Committee or other committees of the Board, and a
supermajority vote for removal of any officer elected by the Board.
The foregoing summary is limited in its entirety by reference to the
Corporation's Restated Certificate of Incorporation and Bylaws which are
available from the Corporation and are on file with the Securities and Exchange
Commission. The Board of Directors has no present intention to amend further the
Restated Certificate of Incorporation or Bylaws to add any other or additional
antitakeover provisions. Nor is the current proposal the result of management's
knowledge of any effort to obtain control of the Corporation by any means.
The Board of Directors unanimously recommends a vote FOR approval of the
Amendment to Article 4 of the Restated Certificate of Incorporation.
ELECTION OF AUDITORS
The Board of Directors has, on the advice of its Audit Committee,
reappointed KPMG Peat Marwick ("Peat Marwick") as the independent auditors of
the Corporation for the year ending December 31, 1994. Although not required to
do so, the Board of Directors has traditionally submitted the appointment of
independent auditors for approval at the annual meeting of shareholders. Peat
Marwick has acted as auditor of the Corporation and its subsidiaries since 1971.
A representative of Peat Marwick will be present at the annual meeting, with an
opportunity to make a statement if he or she so desires and to respond to
appropriate questions.
During the year ended December 31, 1993, Peat Marwick provided various
audit and non-
20
<PAGE>
audit services to the Corporation and its subsidiaries. In connection with its
service as the Corporation's auditors, Peat Marwick examined the consolidated
financial statements of the Corporation and its subsidiaries, reviewed certain
filings with the Securities and Exchange Commission and provided consultation
and assistance on accounting, tax and related matters as required.
The Board of Directors recommends a vote FOR approval of the appointment
of KPMG Peat Marwick as independent auditors.
SHAREHOLDER PROPOSALS
Any proposal which a shareholder of the Corporation intends to be
presented at the annual meeting of shareholders to be held in 1995 must be
received by the Corporation on or before November 24, 1994. Only proper
proposals which are timely received will be included in the proxy statement and
form of proxy.
OTHER MATTERS
Management does not know of any matters to be brought before the meeting
other than as described in this Proxy Statement. Should other matters properly
come before the meeting, the persons designated as proxies will vote in
accordance with their best judgment on such matters.
EXPENSES OF SOLICITATION
The cost of soliciting proxies in the accompanying form will be borne by
the Corporation. In addition to the use of the mails, proxies may be solicited
by directors, officers or other employees of the Corporation or its subsidiaries
personally, by telephone or by facsimile or other electronic means. The
Corporation does not expect to pay any compensation for the solicitation of
proxies, but may reimburse brokers, custodians or other persons holding stock in
their names or in the names of nominees for their expenses in forwarding proxy
materials to principals and obtaining their instructions.
Jerry W. Powell
General Counsel and Secretary
21
<PAGE>
PROXY
COMPASS BANCSHARES, INC.
This Proxy is Solicited on Behalf of the Board of Directors
The undersigned hereby appoints G. W. "Red" Leach, Jr., Jerry W. Powell and
John S. Stein, or any one of them, proxies, each with the power to appoint his
substitute, and hereby authorizes them to represent and to vote all the shares
of common stock of Compass Bancshares, Inc., held of record by the undersigned
on March 31, 1994, at the annual meeting of stockholders to be held on May 16,
1994, or at any adjournment thereof.
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 Proposals 1, 2 and 3.
(Continued, and to be Signed, on Reverse Side)
SEE REVERSE
SIDE
<PAGE>
[X] Please mark votes as in this example.
In their discretion the proxies are authorized to vote upon such other business
as properly may come before the meeting or any adjournment.
1. Election of Directors.
Nominees: Harry B. Brock, Jr., Stanley M. Brock, Garry N. Drummond, Sr., Thomas
E. Jernigan
FOR WITHHELD
[_] [_]
- --------------------------------------------------------------------------------
For all nominees except as noted above
2. Proposal to approve the appointment of KPMG Peat Marwick as the independent
auditors of the Corporation.
FOR AGAINST ABSTAIN
[_] [_] [_]
3. Proposal to amend Restated Certificate of Incorporation to increase
authorized shares of common stock.
FOR AGAINST ABSTAIN
[_] [_] [_]
When signing as attorney, trustee or guardian, please give full title as such.
If a corporation, please sign in full corporate name by President or other
authorized officer. If a partnership, please sign in partnership name by
authorized person.
MARK HERE
FOR ADDRESS
CHANGE AND
NOTE AT LEFT [_]
Please sign exactly as name appears hereon. When shares are held by joint
tenants, both should sign. Please mark, sign, date and return the proxy
promptly using the enclosed envelope.
Signature: _____________________________________________ Date:________________
Signature: _____________________________________________ Date:________________
