<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:
[_] Preliminary Proxy Statement [_] Confidential, for Use of the
Commission Only (as permitted by
[X] Definitive Proxy Statement Rule 14a-6(e)(2))
[_] 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)
Payment of Filing Fee (Check the appropriate box):
[X] No Filing Fee Required.
[_] 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 (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:
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(4) Date Filed:
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Notes:
<PAGE>
[LOGO OF COMPASS BANCSHARES APPEARS HERE]
To the Shareholders of
Compass Bancshares, Inc.
March 20, 1998
In connection with the annual meeting of shareholders of Compass Bancshares,
Inc., to be held on April 20, 1998, 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 1997 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. You may, of course, vote in person at the meeting, whether or not you
submitted a proxy.
Sincerely yours,
/s/ D. Paul Jones, Jr.
------------------------------------
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
April 20, 1998
----------------
The annual meeting of the shareholders of Compass Bancshares, Inc., will be
held at the Corporate Headquarters building, 15 South 20th Street, Birmingham,
Alabama, on Monday, April 20, 1998, at 10:00 a.m., for the following purposes:
1. To elect three (3) directors, each to serve for a term of three (3) years
or until their successors are elected and qualified.
2. To authorize the amendment of the Corporation's Restated Certificate of
Incorporation to increase the authorized shares of the Corporation's
common stock, par value $2.00 per share, from 100,000,000 shares to
200,000,000 shares.
3. 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 18, 1998, 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
/s/ Jerry W. Powell
-----------------------------------
Jerry W. Powell
General Counsel and Secretary
Birmingham, Alabama
March 20, 1998
<PAGE>
COMPASS BANCSHARES, INC.
PROXY STATEMENT FOR ANNUAL MEETING OF
SHAREHOLDERS TO BE HELD ON APRIL 20, 1998
----------------
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 on April 20, 1998, and at any
adjournments thereof, for the purpose of (i) electing three (3) directors of
the Corporation, (ii) approving a proposal to amend the Corporation's Restated
Certificate of Incorporation (the "Restated Certificate") to increase the
authorized shares of the Corporation's common stock, par value $2.00 per
share, from 100,000,000 shares to 200,000,000 shares and (iii) 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 1997, were mailed
to shareholders of the Corporation on or about March 20, 1998.
SHAREHOLDERS ENTITLED TO VOTE
Each holder of record of the Corporation's common stock as of the close of
business on March 18, 1998, 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 March 18, 1998, there were
69,873,170 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
At the meeting, a majority of the shares entitled to vote, represented in
person or by proxy, shall constitute a quorum for the transaction of business.
Assuming the presence of a quorum, directors shall be elected at the meeting
by a plurality of the votes cast, whether in person or by proxy. The amendment
to the Restated Certificate will require a majority of all outstanding shares
of the Corporation's common stock (regardless of whether such shares are
represented at the meeting in person or by proxy) to be voted in favor of the
amendment.
A shareholder may abstain or withhold his vote (collectively, "abstentions")
with respect to each item submitted for shareholder approval. Abstentions will
be counted as present for purposes of determining the existence of a quorum
but will be counted as not voting in favor of the relevant proposal. Since the
election of directors is determined by the votes cast at the meeting,
abstentions will not affect such election. However, since the proposed
amendment to the Restated Certificate will require the affirmative vote of a
majority of all shares outstanding, and not just those represented at the
meeting, abstentions will have the effect of a vote against the proposal.
1
<PAGE>
Generally, a broker is entitled to vote shares held in "street name" on
routine matters without instructions from the beneficial owner. On the other
hand, a broker may not be entitled to vote shares held in "street name" on
certain non-routine items absent customer instructions (known as a "broker
nonvote"). If a broker votes on any proposal submitted for shareholder
approval, even if he may not vote on all proposals, then all shares so voted
will be counted as present for purposes of determining the existence of a
quorum, and the broker nonvotes, if any, will be treated as having not voted
in favor of the relevant proposal. Generally, there can be no "broker
nonvotes" in the election of directors because the election of directors is a
matter for which a broker may exercise its discretion. Since the proposal to
amend the Restated Certificate will require the affirmative vote of a majority
of all shares outstanding, and not just those represented at the meeting,
broker nonvotes, if any, will have the effect of a vote against the proposal.
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 FOR the election as directors of the nominees for directors named herein
and FOR the proposal to amend the Restated Certificate.
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 5% of the
Corporation's outstanding common shares as of December 31, 1997:
<TABLE>
<CAPTION>
NAME AND ADDRESS NUMBER OF SHARES OWNED PERCENT OF CLASS
- ---------------- ---------------------- ----------------
<S> <C> <C>
Compass Bancshares, Inc. 4,109,506 6.2%
Employee Stock Ownership/401(k)
Plan and Trust (the "ESOP")
c/o Compass Bank
P. O. Box 10566
Birmingham, Alabama 35296
</TABLE>
2
<PAGE>
PROPOSAL ONE
ELECTION OF DIRECTORS
The Board of Directors has nominated three(3) persons named below for
election as Class I directors, each to hold office for a term of three (3)
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. The Board of Directors 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.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION OF EACH OF THE
NOMINEES.
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. Certain 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"). Executive
officers who are not also directors serve at the discretion of the Board of
Directors.
COMMON STOCK OWNERSHIP
<TABLE>
<CAPTION>
SHARES
DIRECTOR OR BENEFICIALLY
EXECUTIVE OFFICER OWNED AT PRINCIPAL OCCUPATION SINCE
OF CORPORATION DECEMBER 31, PERCENT OF JANUARY 1,
NAME SINCE 1997 CLASS (1) 1993 AND OTHER INFORMATION
---- ----------------- ------------ ---------- ---------------------------------
<C> <C> <C> <C> <S>
NOMINEES FOR ELECTION TO SERVE UNTIL ANNUAL MEETING IN 2001 (CLASS I)
Charles W. Daniel........... 1982 302,990 (2) * President, Dantract, Inc. (real
estate investments). Age 57.
D. Paul Jones, Jr........... 1978 781,365 (3) 1.2 Chairman of the Board, Chief
Executive Officer and President
of the Corporation and Compass
Bank. Director of Golden
Enterprises, Inc. Age 55.
Carl J. Gessler, Jr., M.D. . -- 28,273 * Physician. Age 42.
DIRECTORS ELECTED OR APPOINTED TO SERVE UNTIL ANNUAL MEETING IN 1999 (CLASS II)
Jack C. Demetree............ 1997 277,344(4) * Chairman, Demetree Brothers, Inc.
(commercial real estate
development). Age 69.
Tranum Fitzpatrick.......... 1989 225,305(5) * Chairman of Guilford Company,
Inc. and President of Guilford
Capital and Empire-Rouse, Inc.
(real estate investment and
development). Age 59.
John S. Stein............... 1989 76,270 * President and Chief Executive
Officer of Golden Enterprises,
Inc. (snack food distribution
and sales). Director of Golden
Enterprises, Inc. Age 60.
</TABLE>
3
<PAGE>
<TABLE>
<CAPTION>
SHARES
DIRECTOR OR BENEFICIALLY
EXECUTIVE OFFICER OWNED AT
OF CORPORATION DECEMBER 31, PERCENT OF PRINCIPAL OCCUPATION SINCE JANUARY 1,
NAME SINCE 1997 CLASS (1) 1993 AND OTHER INFORMATION
---- ----------------- ------------ ---------- -------------------------------------
<C> <C> <C> <C> <S>
DIRECTORS ELECTED OR APPOINTED TO SERVE UNTIL ANNUAL MEETING IN 2000 (CLASS III)
William Eugene Davenport. 1993 36,501 * President and Chief
Operating Officer,
Russell Lands, Inc.
(resort land
development,
residential
construction and
building supply
stores). Age 57.
Marshall Durbin, Jr...... 1971 750,407 (6) 1.1 President of Marshall
Durbin & Company, Inc.
(poultry processing).
Age 66.
Robert J. Wright......... 1996 244,565 (7) * President, Medical
Cities, Inc.
(development and
management of health
care facilities). Age
70.
EXECUTIVE OFFICERS WHO ARE NOT ALSO DIRECTORS OR NOMINEES FOR DIRECTOR
Garrett R. Hegel......... 1990 77,994(8) * Chief Financial Officer
of the Corporation and
Compass Bank. Age 47.
Charles E. McMahen....... 1990 166,324(9) * Chairman and Chief
Executive Officer of
Compass Banks of
Texas, Inc. Age 58.
Jerry W. Powell.......... 1981 90,455(10) * General Counsel and
Secretary of the
Corporation and
Compass Bank. Age 48.
G. Ray Stone............. 1996 248,464(11) * Senior Executive Vice
President and Chief
Credit Policy Officer
of Compass Bank. Age
54.
Byrd Williams............ 1992 190,334(12) * Group Executive Vice
President of Compass
Bank. Age 52.
Directors, nominees and
executive officers as a
group (14 persons)...... 3,496,591 5.3
</TABLE>
- --------
*Less than 1%
(1) A person is deemed to beneficially own securities which he or she has a
right to acquire within sixty (60) days (i.e., through the exercise of
options, warrants, rights or conversion privileges). Any securities which
are not outstanding but deemed to be beneficially owned by a person are
considered outstanding for the purpose of computing such person's
percentage ownership, but are not considered outstanding when computing
any other person's percentage ownership.
4
<PAGE>
(2) Includes 21,365 shares held by Mr. Daniel's wife and sons, the beneficial
ownership of which is disclaimed. Does not include 1,440,072 shares owned
by The Daniel Foundation of Alabama, a charitable foundation for which
Mr. Daniel serves as a director.
(3) Includes 19,887 shares subject to options and 24,750 shares allocated to
Mr. Jones' ESOP/401(k) account.
(4) Includes 23,592 shares owned directly by Mr. Demetree's spouse, the
beneficial ownership of which is disclaimed.
(5) Includes 19,200 shares owned directly by Mr. Fitzpatrick's spouse and
85,755 shares owned by Empire Rouse, Inc., of which Mr. Fitzpatrick is
President, the beneficial ownership of which is disclaimed.
(6) Includes 555,589 shares owned by Marshall Durbin Food Corporation, of
which Mr. Durbin is Chairman of the Board and President.
(7) Includes 55,765 shares owned jointly by Mr. Wright and his spouse.
(8) Includes 27,557 shares subject to options, 4,908 shares allocated to Mr.
Hegel's ESOP/ 401(k) account and 150 shares owned directly by his child.
(9) Includes 25,656 shares subject to options and 4,870 shares allocated to
Mr. McMahen's ESOP/401(k)account.
(10) Includes 19,088 shares subject to options and 20,690 shares allocated to
Mr. Powell's ESOP/401(k) account.
(11) Includes 22,757 shares subject to options and 36,687 shares allocated to
Mr. Stone's ESOP/401(k) account.
(12) Includes 59,282 shares subject to options, 27,489 shares allocated to Mr.
Williams' ESOP/401(k) account, and 2,712 shares held in a revocable trust
of which he is the sole beneficiary. Also includes 4,600 shares owned
beneficially by Mr. Williams' spouse, the beneficial ownership of which
is disclaimed.
REMUNERATION OF DIRECTORS
The Corporation pays non-employee directors a monthly retainer of $1,200 and
a fee of $1,665 for each board meeting attended. In addition, members of the
Corporation's audit committee receive $600 for each audit committee meeting
attended. Chairmen of all committees of the Boards of Directors of the
Corporation and Compass Bank receive a monthly retainer of $100 per month. The
non-employee directors of the Corporation who also serve on the Board of
Compass Bank receive $400 per Committee meeting attended if held on a day when
no Corporation Board meeting is held and $500 if held on a day when no Compass
Bank Board meeting is held. 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 1997 the Board of Directors held four regular quarterly meetings and no
special meetings. All incumbent directors of the Corporation attended 75% or
more of the meetings of the Board and the committees on which they served.
COMMITTEES OF THE BOARD OF DIRECTORS
Messrs. Jones, Daniel and Durbin constitute the standing Executive Committee
of the Board of Directors, which has the full authority of the Board of
Directors to act on all matters between regularly scheduled Board
5
<PAGE>
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 did not meet in
1997.
Messrs. Stein, Hansberry, Davenport and Fitzpatrick constitute the standing
Audit Committee of the Board of Directors. This committee, which met six times
during 1997, 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. Durbin, Daniel and Fitzpatrick constitute the standing Compensation
Committee of the Board of Directors. 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 two times during 1997.
Messrs. Durbin, Davenport, Demetree, Wright, and Stein constitute the
standing 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
six times during 1997.
The Board of Directors has no standing nominating committee.
SECTION 16 BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
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 1997 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 1997, except that director Marshall
Durbin, Jr. did not file timely one Form 4 to report one transaction involving
the transfer of shares of the Corporation's common stock owned indirectly by
him that occurred on December 10, 1997. On February 16, 1998, an annual report
on Form 5 was filed with the SEC by Mr. Durbin to report such transfer of
shares of common stock.
6
<PAGE>
EXECUTIVE COMPENSATION AND OTHER INFORMATION
The Corporation's 1997 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 1995,
1996, and 1997 for services 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
1997:
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM COMPENSATION
-------------------------
ANNUAL COMPENSATION AWARDS
----------------------- -------------------------
RESTRICTED SECURITIES ALL OTHER
NAME AND STOCK UNDERLYING COMPENSATION
PRINCIPAL POSITION YEAR SALARY ($) BONUS ($)(1) AWARDS ($)(2) OPTIONS (#) ($)(3)
------------------ ---- ---------- ------------ ------------- ----------- ------------
<S> <C> <C> <C> <C> <C> <C>
D. Paul Jones, Jr.................... 1997 589,994 404,441 978,551 -0- 50,203(4)
Chairman and Chief Executive Officer 1996 540,000 337,000 352,458 -0- 25,418(4)
of the Corporation and Compass Bank 1995 450,000 -0- -0- -0- 16,500(4)
Garrett R. Hegel..................... 1997 235,000 112,765 233,396 -0- 11,569(5)
Chief Financial Officer of the 1996 214,167 93,698 130,113 -0- 8,460(5)
Corporation and Compass Bank 1995 190,000 -0- -0- 3,846 3,570(5)
Charles E. McMahen................... 1997 360,000 103,644 436,815 -0- 30,710(7)
Chairman and Chief Executive 1996 337,332 147,578 219,051 -0- 16,841(7)
Officer of Compass Banks of 1995 319,991 -0- -0- 3,846 10,200(7)
Texas, Inc. (6)
G. Ray Stone......................... 1997 225,000 129,195 199,136 -0- 18,194(8)
Senior Executive Vice 1996 189,167 98,130 111,996 -0- 13,956(8)
President and Chief Credit Policy 1995 175,000 49,006 -0- 3,846 7,560(8)
Officer of the
Corporation
Byrd Williams........................ 1997 285,000 60,990 286,928 -0- 21,797(9)
Group Executive Vice President of 1996 270,401 118,301 171,288 -0- 17,330(9)
Compass Bank 1995 248,944 -0- -0- 3,846 10,468(9)
</TABLE>
- --------
(1) The bonus amounts shown in this column were paid based on performance
rendered during the years indicated, but the bonuses were paid during the
fiscal years immediately following the years indicated.
7
<PAGE>
(2) All of the restricted stock awards granted in 1997 to the executive
officers named above will vest on the following schedule: one-third
vesting on February 13, 1998, and a like amount vesting on that same date
in each of 1999 and 2000. Dividends will be paid on the restricted stock
prior to vesting. The value of the restricted stock awards shown above
reflects the number of shares awarded during the year indicated multiplied
by the closing market price of the Corporation's unrestricted common stock
on the date of the award. The following table shows the aggregate number
and value of all shares of restricted stock held by the persons identified
in the table above as of December 31, 1997:
<TABLE>
<CAPTION>
NUMBER MARKET
OF VALUE ON
SHARES 12/31/97
------ ----------
<S> <C> <C>
D. Paul Jones, Jr...................................... 47,115 $2,061,281
Garrett R. Hegel....................................... 12,915 565,031
Charles E. McMahen..................................... 23,280 1,018,500
G. Ray Stone........................................... 11,055 483,656
Byrd Williams.......................................... 16,290 712,688
</TABLE>
(3) The amounts shown in this column include annual contributions by the
Corporation (i) to the ESOP/401(k) accounts of persons named in the table,
(ii) 30% matching contributions by the Corporation with respect to
employee contributions for purchases of Corporation common stock under the
Corporation's Monthly Investment Plan ("MIP"), and (iii) matching
contributions by the Corporation to the accounts of persons named in the
table maintained under the ESOP Benefit Restoration Plan ("Restoration
Plan"). The ESOP/401(k) plan and the MIP are generally available to
employees of the Corporation and its subsidiaries. The Restoration Plan is
available to select persons whose annual compensation exceeds the $160,000
statutory cap on income which may be considered under the ESOP under
present IRS regulations.
(4) Includes contributions by the Corporation under the ESOP/401(k) of $9,494,
$9,218, and $3,000 in 1997, 1996 and 1995, respectively, matching
contributions made by the Corporation under the MIP of $17,700, $16,200,
and $13,500 for 1997, 1996 and 1995, respectively, and matching
contributions under the Restoration Plan of $23,009 in 1997.
(5) Includes contributions by the Corporation under the ESOP/401(k) of $9,494,
$7,718, and $3,000 1997, 1996 and 1995, respectively, matching
contributions made by the Corporation under the MIP of $705, $642, and
$570 for 1997, 1996 and 1995, respectively, and matching contributions
under the Restoration Plan of $1,370 in 1997.
(6) Compass Banks of Texas, Inc. is a wholly owned subsidiary of the
Corporation and the parent corporation of Compass Bank, Houston, Texas,
and certain other Texas-based subsidiaries of the Corporation.
(7) Includes contributions by the Corporation under the ESOP/401(k) of $9,494,
$9,218, and $3,000 in 1997, 1996 and 1995, respectively, matching
contributions made by the Corporation under the MIP of $10,800, $7,623,
and $7,200 for 1997, 1996 and 1995, respectively, and matching
contributions under the Restoration Plan of $10,416 in 1997.
(8) Includes contributions by the Corporation under the ESOP/401(k) of $9,494,
$8,281, and $2,310 in 1997, 1996 and 1995, respectively, matching
contributions made by the Corporation under the MIP of $6,750, $5,675, and
$5,250 for 1997, 1996 and 1995, respectively and matching contributions
under the Restoration Plan of $1,950 in 1997.
8
<PAGE>
(9) Includes contributions by the Corporation under the ESOP/401(k) of $9,494,
$9,218, and $3,000 in 1997, 1996 and 1995, respectively, matching
contributions made by the Corporation under the MIP of [$8,550], $8,112,
and $7,468 for 1997, 1996 and 1995, respectively, and matching
contributions under the Restoration Plan of $3,753 in 1997.
COMPENSATION PURSUANT TO PLANS
The Corporation has certain compensation plans, described below, pursuant to
which benefits may be provided to executive officers of the Corporation.
Long Term Incentive Plans
The Corporation's shareholders approved the 1982, 1989 and 1996 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 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 and 1989 Long Term Incentive Plans, the committee was
authorized to grant awards of up to 3,712,500,000 and 2,250,000 shares,
respectively, of the Corporation's common stock, giving effect to adjustments
for capital structure changes. Under the 1996 Plan, the Compensation Committee
may grant awards of up to 2,850,000 shares of the Corporations's common stock,
giving effect to adjustments for capital structure changes.
During 1997, the only awards made under the Plans to the officers named in
the Summary Compensation Table above were awards of restricted stock.
The following table reflects certain information concerning exercises of
options with respect to the Corporation's common stock during 1997, and the
value of unexercised options held as of the end of 1997, by the executive
officers of the Corporation named in the Summary Compensation Table above:
AGGREGATED OPTION EXERCISES IN 1997
AND 1997 YEAR END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF
SECURITIES VALUE OF
UNDERLYING UNEXERCISED
UNEXERCISED IN-THE-MONEY
OPTIONS AT OPTIONS AT
1997 YEAR END 1997 YEAR END
(#) ($)
------------- -------------
SHARES ACQUIRED EXERCISABLE/ EXERCISABLE/
NAME ON EXERCISE (#) VALUE REALIZED ($) UNEXERCISABLE UNEXERCISABLE
---- --------------- ------------------ ------------- -------------
<S> <C> <C> <C> <C>
D. Paul Jones, Jr....... -0- -0- 19,887/-0- 574,015/-0-
Garrett R. Hegel........ -0- -0- 27,557/-0- 798,672/-0-
Charles E. McMahen...... -0- -0- 25,656/-0- 726,422/-0-
G. Ray Stone............ -0- -0- 22,757/-0- 642,525/-0-
Byrd Williams........... -0- -0- 59,282/-0- 1,730,449/-0-
</TABLE>
9
<PAGE>
Pension Plan
The Corporation has adopted basic and supplemental retirement plans which,
subject to the conditions for vesting, provide retirement benefits based upon
credited years of service and average annual compensation during the five
consecutive years of benefit service which produces the highest average
("Final Average Annual Compensation"). The following table shows the estimated
annual benefits that would be payable upon retirement under the Corporation's
basic and supplemental retirement plans to plan participants, including
executive officers, assuming retirement at normal retirement age 65 on January
1, 1998:
PENSION PLAN TABLE
<TABLE>
<CAPTION>
ANNUAL RETIREMENT BENEFIT IF AGE 65 IN 1998
--------------------------------------------
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 $ 15,086 $22,629 $30,172 $37,715 $45,258
200,000 $ 33,086 49,629 66,172 82,715 99,258
400,000 $ 69,086 103,629 138,172 172,715 207,258
600,000 $105,086 157,629 210,172 262,715 315,258
800,000 $141,086 211,629 282,172 352,715 423,258
1,000,000 $177,086 265,629 354,172 442,715 531,258
1,200,000 $213,086 319,629 426,172 532,715 639,258
</TABLE>
- --------
Reflects all compensation without regard to statutory limits in qualified
plan.
All employees of the Corporation who have attained age 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 in the
Corporation's basic pension plan. However, participation in the supplemental
retirement plans is limited to a select group of management or highly
compensated employees of the Corporation as determined by the Compensation
Committee of the Board of Directors. Each of the executive officers named in
the Summary Compensation Table participates in one of the two supplemental
retirement plans. Under most circumstances employees are vested in their
retirement benefits under the plans after five years of service. Benefits
under the plans 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 Corporation's basic pension plan is a tax-qualified defined benefit plan
for purposes of the Employee Retirement Income Security Act of 1974, as
amended ("ERISA"). An individual's Final Average Annual Compensation under the
pension plan is based on a participant's direct cash compensation (exclusive
of bonuses, including any bonuses shown in the Summary Compensation Table
above, and commissions) up to certain maximum dollar limits imposed under the
Internal Revenue Code. The maximum annual dollar amounts recognized under the
basic pension plan were limited to $235,840 for years prior to 1994, $150,000
for years 1994 through 1996, and $160,000 for years after 1996. The percentage
of a participant's Final Average Annual Compensation payable as annual
benefits upon retirement under the pension plan is determined by multiplying
10
<PAGE>
the number of years, up to 30, of a participant's service with the Corporation
by 1.8%. Benefits under the pension plan are reduced by Social Security
payments at the rate of 1.8% 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.
In 1997, the Corporation adopted both the "Supplemental Retirement Plan" and
the "Special Supplemental Retirement Plan" in order to provide key management
employees a total retirement benefit equal to the retirement benefit which
would have been payable under the basic pension plan but for certain
limitations on calculating a participant's Final Average Annual Compensation
imposed under the Internal Revenue Code. While a participant's Final Average
Annual Compensation under the Supplemental Retirement Plan includes additional
amounts otherwise excluded under the basic pension plan, the Supplemental
Plan, like the pension plan, does not include a participant's bonuses in such
calculations. Such bonuses, however, are included in calculating a
participant's Final Average Annual Compensation under the Special Supplemental
Retirement Plan. Both supplemental pension plans operate as unfunded non-
qualified deferred compensation arrangements for purposes of ERISA.
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., 19; Charles E. McMahen, 8; Garrett R. Hegel, 8; G. Ray Stone, 31;
and Byrd Williams, 21.
Change of Control Employment Agreements
The Corporation entered into change of control employment agreements on
December 14, 1994 (the "Agreements") with each of the individuals named in the
Summary Compensation Table and five additional officers of the Corporation or
its subsidiaries. Since such time, certain other officers of the Corporation
or its subsidiaries have also entered into change in control employment
agreements with the Corporation. The Agreements are designed to retain such
officers and provide for continuity of management in the event of any actual
or threatened change in control of the Corporation. The Agreements with the
persons named in the Summary Compensation Table are effective for three-year
periods and are automatically extended annually for additional one-year
periods unless notice is given to the contrary. The Agreements are otherwise
terminable during their periods of effectiveness only by termination of the
executive's employment. Such termination in connection with a change in
control of the Corporation (as defined in the Agreements) will entitle an
executive to benefits under the Agreements. The Agreements require continued
employment of an executive following a change of control on an equivalent
basis to employment immediately before such change of control. In the event
that during the three-year period following a change of control, the executive
terminates the executive's employment for good reason (as defined in the
Agreements) or, during the thirty-day period commencing one year after the
change of control, for any reason, or the Company terminates the executive's
employment without cause (as defined in the Agreements), the executive will be
entitled to receive an immediate lump sum payment in an amount equal to
previously earned but unpaid compensation plus an amount equal to a range of
between two and three times the sum of such executive's then current salary
and annual bonus. In addition, the executive will continue to be eligible,
together with the executive's family, to receive benefits under the
Corporation's welfare benefit plans (e.g., medical, group life, etc.) for the
remainder of the three-year term, and any stock options then held by the
executive pursuant to the Corporation's stock option plans shall remain
exercisable in
11
<PAGE>
accordance with the terms of any stock option agreements between the
Corporation and the executive, notwithstanding any provision in such option
agreements to the contrary.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Directors of the Corporation Charles W. Daniel, Marshall Durbin, Jr., and
Tranum Fitzpatrick 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.
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. 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 shareholder value.
The Committee recommends to the full Board of Directors the base salary of
the chief executive officer of the Corporation and Compass Bank, as well as
the base salaries of other executive officers, based on recommendations to the
Committee from the Human Resources Division of Compass Bank. The Board of
Directors then approves the base salaries of the chief executive officer and
other executive officers.
In connection with the Committee's setting of the executive officers' base
salaries, the Human Resources Division of Compass Bank compiles publicly
available data concerning the salaries of the executive officers of financial
institutions that are considered peers of the Corporation based on their
relative assets. 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 with respect to the executive officers have generally been at
or above the median compensation levels of the other companies surveyed. The
Committee also undertakes a subjective analysis of the executive officers'
base salaries 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 executive officers' base salaries
for recommendation to the full Board of Directors.
12
<PAGE>
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 full Board of Directors of Compass Bank at its regular meeting held in the
first quarter of each year.
For fiscal years 1996 and 1995, the chief executive officer's incentive
bonus was 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. In 1997, the chief executive
officer's incentive bonus was based on the achievement of earnings per share
goals and on established goals of return on common equity. For fiscal year
1997, the Corporation's chief executive officer and other of the executive
officers were not entitled to any bonus attributable to earnings per share if
the Corporation failed to achieve an increase in earnings per share of at
least 10% over earnings per share reported for the previous fiscal year. An
increase in earnings per share of at least 15% 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 with
respect to the earnings per share component. As a result of an increase in
earnings per share in 1997 compared to reported earnings for 1996 of
approximately 10%, the Corporation's chief executive officer and each of the
other named executive officers whose bonus was based in part upon the
achievement of earnings per share goals received approximately 33% of their
maximum achievable bonuses for earnings per share.
The chief executive officer's maximum bonus, based solely on earnings per
share goals and return on common equity, 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 maximum bonus
of each of the other named executive officers range from 50% to 70%.
For fiscal year 1997, the Corporation's chief executive officer and other of
the executive officers were not entitled to any bonus attributable to return
on common equity if the Corporation failed to achieve a return on common
equity of at least 15% and a return on common equity of at least 18% was
required in order for the maximum bonus to be paid with respect to return on
common equity. As a result of a return on common equity with respect to the
Corporation's common stock in fiscal year 1997 of 17.31%, the Corporation's
chief executive officer and other officers whose bonuses are based in part on
return on common equity received approximately 21% of their maximum achievable
bonuses for return on common equity.
The 1996 Long Term Incentive Plan and the 1989 Long Term Incentive Plan each
provide for grants to the Corporation's officers and key employees of stock
options, stock appreciation rights, restricted stock, performance units and
supplemental cash payments. The payment of equity-based compensation to these
individuals under the Corporation's incentive compensation program is designed
to focus their attention on the enhancement of shareholder value.
13
<PAGE>
During 1997, the Corporation awarded 34,275 shares of restricted stock to
Mr. Jones, 8,175 shares of restricted stock to Mr. Hegel, 15,300 shares of
restricted stock to Mr. McMahen, 6,975 shares of restricted stock to Mr.
Stone, and 10,050 shares of restricted stock to Mr. Williams. The number of
shares of restricted stock awarded to these executive officers was determined
by the Compensation Committee and approved by the Board of Directors based
upon a subjective assessment of executive officers' performances, their
respective compensation and management level in the organization, and other
factors. One-third of the total number of shares of restricted stock awarded
to each of these executive officers vested on February 13, 1998, and a like
amount will vest on that same date in each of 1999 and 2000.
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 of 1986, as amended. 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.
/s/ Charles W. Daniel /s/ Tranum Fitzpatrick
_____________________________________ _____________________________________
Charles W. Daniel Tranum Fitzpatrick
/s/ Marshall Durbin, Jr.
_____________________________________
Marshall Durbin, Jr.
14
<PAGE>
CORPORATE PERFORMANCE GRAPH
The following graph illustrates, for the period commencing December 31,
1992, and ending at year end 1997, 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 1992 and year
end 1997, 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, 1997, and December 31, 1992, by (ii) the closing price of the
Corporation's common stock as reported through NASDAQ on December 31, 1992.
[GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN AMONG
COMPASS BANCSHARES, THE S&P 500 INDEX AND THE NASDAQ BANK INDEX
<CAPTION>
NASDAQ
Measurement period COMPASS S&P 500 BANK
(Fiscal Year Covered) BANKSHARES INDEX INDEX
- --------------------- ---------- ------- ------
<S> <C> <C> <C>
Measurement PT -
12/92 $ 100 $ 100 $ 100
FYE 12/93 $ 97 $ 110 $ 114
FYE 12/94 $ 100 $ 112 $ 114
FYE 12/95 $ 156 $ 153 $ 169
FYE 12/96 $ 195 $ 189 $ 223
FYE 12/97 $ 331 $ 252 $ 377
</TABLE>
* $100 INVESTED ON 12/31/92 IN STOCK OR INDEX-
INCLUDING REINVESTMENT OF DIVIDENDS.
FISCAL YEAR ENDING DECEMBER 31.
CERTAIN RELATIONSHIPS AND RELATED 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.
15
<PAGE>
During 1997, 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 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 1%. The largest aggregate amount of
indebtedness outstanding on such loan during 1997 was $3,118,750, and the
amount outstanding as of March 5, 1998, was $279,300. In addition, during
1997, Mr. Jones was indebted to the Corporation for a loan incurred under a
line of credit secured by shares of the Corporation's common stock. The loan
is due on demand and bears interest at the rate of Compass Bank Prime. The
largest aggregate amount of indebtedness outstanding for such loan during 1997
was $142,199, and the amount outstanding as of March 5, 1998 was $101.
During 1997, Jerry W. Powell, General Counsel and Secretary 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. Mr. Powell's loan bears interest at
the rate of Compass Bank Prime, is payable quarterly with the principal due on
demand, and is secured by shares of the Corporation's common stock. The
largest amount of indebtedness outstanding on such loan during 1997 was
$319,000 and the amount outstanding as of March 5, 1998, was $358,000.
During 1997, Garrett R. Hegel, Chief Financial 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 the
Corporation's common stock. Mr. Hegel's loan bears interest at the rate of
Compass Bank Prime, is payable quarterly with the principal due on demand, and
is secured by shares of the Corporation's common stock. The largest amount of
indebtedness outstanding on such loan during 1997 was $242,000 and the amount
outstanding as of March 5, 1998, was $304,000.
During 1997, Compass Bank commenced construction of a new five story 85,000
square foot headquarters building in Jacksonville, Florida. In connection with
the purchase of the land upon which this new facility is being built, Demetree
Brothers, Inc., a commercial real estate development company, was paid a real
estate brokerage commission of $144,882. Jack C. Demetree, a director of the
Corporation, is Chairman, President, and a principal stockholder of Demetree
Brothers, Inc.
16
<PAGE>
PROPOSAL TWO
AMENDMENT TO RESTATED CERTIFICATE TO INCREASE THE NUMBER OF AUTHORIZED SHARES
OF THE CORPORATION'S COMMON STOCK
The Corporation's Board of Directors has adopted and recommended for
shareholder approval a proposed amendment to Article 4 of the Restated
Certificate which, if approved, would increase the authorized shares of the
Corporation's common stock, par value $2.00 per share, from 100,000,000 shares
to 200,000,000 shares.
On the Record Date, the number of shares of common stock which were
authorized but unissued totaled approximately 30,126,830. The additional
authorized shares of common stock will be available for issuance by the
Corporation's Board of Directors from time to time for general corporate
purposes, without further action or authorization by the shareholders (except
as required by law or by a national stock exchange). The Board of Directors
could make a determination to issue such shares in connection with, among
other things, (i) possible future acquisitions, (ii) the declaration of a
stock split or stock dividend, (iii) the raising of additional capital funds
through offerings of shares of common stock or of equity or debt securities
convertible into or exchangeable for common stock and (iv) the Corporation's
various employee benefit plans, incentive compensation plans and dividend
reinvestment plan.
The existence or issuance of authorized but unissued shares of common stock
could, under certain circumstances, have an anti-takeover effect. Although the
authorization of additional shares of common stock would have no immediate
effect upon existing shareholders, the subsequent issuance of such additional
authorized shares to persons other than existing stockholders could reduce the
percentage interest of existing shareholders, thereby 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 of
Directors has no present intention of issuing additional shares of common
stock for that purpose.
If the amendment is approved, as soon as practicable after the meeting, the
Corporation will file with the Delaware Secretary of State's Office Articles
of Amendment to the Restated Certificate which will provide that Article 4.1
of the Restated Certificate shall be revised to read as follows:
"4.1 Authorized Stock. The total number of shares of all
classes of stock which the Corporation shall have the
authority to issue is two hundred twenty-five million
(225,000,000), consisting of
(1) Twenty-five million (25,000,000) shares of preferred
stock, $.10 par value per share (hereinafter "Preferred
Stock"); and
(2) Two hundred million (200,000,000) shares of common
stock, $2.00 par value per share (hereinafter "Common
Stock")."
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE PROPOSED AMENDMENT TO THE
RESTATED CERTIFICATE.
17
<PAGE>
SHAREHOLDER PROPOSALS FOR 1999 ANNUAL MEETING
Any proposal which a shareholder of the Corporation intends to be presented
at the annual meeting of shareholders to be held in 1999 must be received by
the Corporation on or before November 20, 1998. 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, for which
no additional compensation will be paid to those persons engaged in such
solicitation. The Corporation will 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. The Company has retained Morrow & Co., New York, New York, at an
approximate total cost of $7,500, plus out-of-pocket expenses, to assist in
the solicitation of proxies by mail, personally or by telephone or other means
of communication.
18
<PAGE>
COMPASS BANCSHARES, INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Garrett R. Hegel, Jerry W. Powell, and
Byrd Williams, or any one of them, proxies, each with the power to appoint his
substitute, and hereby authorize them to represent and to vote all the shares of
common stock of Compass Bancshares,Inc., held of record by the undersigned on
March 18, 1998, at the annual meeting of stockholders to be held on April 20,
1998, or at any adjournment(s) or postponement(s) 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 VOTE FOR PROPOSALS 1 AND 2.
YOU ARE ENCOURAGED TO SPECIFY YOUR CHOICE BY MARKING THE APPROPRIATE
BOXES (SEE REVERSE SIDE), BUT YOU NEED NOT MARK ANY BOXES IF YOU WISH TO VOTE IN
ACCORDANCE WITH THE BOARD OF DIRECTORS' RECOMMENDATIONS. THE PROXIES CANNOT
VOTE YOUR SHARES UNLESS YOU SIGN AND RETURN THIS CARD
(CONTINUED, AND TO BE SIGNED, ON REVERSE SIDE)
<PAGE>
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: 2. APPROVE THE PROPOSED AMENDMENT TO
CHARLES W. DANIEL D. PAUL JONES, THE CORPORATION'S AMENDED AND
JR., AND CARL J. GESSLER, JR., M.D. RESTATED CERTIFICATE OF
INCORPORATION TO INCREASE THE
NUMBER OF AUTHORIZED SHARES OF
COMMON STOCK, PAR VALUE $2.00 PER
SHARE, FROM 100,000,000 TO
200,000,000.
FOR [ ] WITHHELD [ ] FOR [ ] AGAINST [ ] ABSTAIN [ ]
[ ]
----------------------------
FOR ALL NOMINEES EXCEPT
AS NOTED ABOVE
MARK HERE FOR ADDRESS CHANGE AND NOTE
AT LEFT [ ]
WHEN SIGNING AS ATTORNEY, TRUSTEE OR
GUARDIAN, PLEASE GIVE FULL TITLE AS
SUCH. IF AS CORPORATION, PLEASE SIGN IN
FULL CORPORATE NAME BY PRESIDENT OR
OTHER AUTHORIZED OFFICER. IF A
PARTNERSHIP PLEASE SIGN IN PARTNERSHIP
NAME BY AUTHORIZED PERSON.
PLEASE SIGN EXACTLY AS NAME APPEARS
HEREIN. 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:
----------------------------------
<PAGE>
TO: Compass Bank, as Plan Trustee of the Compass Bancshares, Inc.
Employee Stock Ownership/401(k) Plan
I hereby direct you, as Trustee of the Compass Bancshares, Inc. Employee Stock
Ownership/401(k) Plan (the "Plan") to act in accordance with the instructions I
have specified on the reverse side hereof in voting each share of Compass
Bancshares, Inc. common stock ("Bancshares Stock") allocated to my account under
the Plan at the 1998 Annual Meeting of Stockholders of Compass Bancshares, Inc.
to be held on April 20, 1998, and at any adjournment thereof. Any previous
instructions to the Plan Trustee relating to the 1998 Annual Meeting of
Stockholders of Compass Bancshares, Inc. hereby are revoked under the terms of
the Plan and subject to the Plan Trustee's responsibilities under ERISA, the
Plan Trustee will vote Bancshares Stock allocated to the accounts of Plan
participants and beneficiaries ("Participants") in accordance with timely
instructions received from such Participants and will not vote Bancshares Stock
allocated to Plan Participants if the Plan Trustee does not receive timely
instructions from such Participants on or before the date designated below.
IMPORTANT: YOUR INSTRUCTIONS SHOULD BE MAILED IN THE ENCLOSED SELF-ADDRESSED
ENVELOPE. NO POSTAGE IS REQUIRED. IN ORDER TO COMPLY WITH YOUR INSTRUCTIONS,
THIS CARD MUST BE PROPERLY EXECUTED AND MAILED TO CONTINENTAL STOCK TRANSFER &
TRUST COMPANY SO AS TO BE RECEIVED BEFORE 5:00 P.M. EASTERN TIME ON APRIL 15,
1998. YOUR INSTRUCTIONS WILL BE KEPT CONFIDENTIAL.
DO NOT MAIL THESE INSTRUCTIONS TO COMPASS BANK OR COMPASS BANCSHARES, INC.
CONTINUED AND TO BE SIGNED ON REVERSE SIDE
<PAGE>
ITEMS LEFT BLANK WILL NOT BE CONSIDERED INSTRUCTIONS TO THE PLAN TRUSTEE.
1. ELECTION OF DIRECTORS OF COMPASS 2. APPROVE THE PROPOSED AMENDMENT TO
BANCSHARES, INC.: NOMINEES: THE CORPORATION'S AMENDED AND
CHARLES W. DANIEL, D. PAUL JONES, RESTATED CERTIFICATE OF
JR., AND CARL J. GESSLER, JR., M.D. INCORPORATION TO INCREASE THE
NUMBER OF AUTHORIZED SHARES OF
COMMON STOCK, PAR VALUE $2.00 PER
SHARE, FROM 100,000,000 TO
200,000,000.
FOR [ ] WITHHELD [ ] FOR [ ] AGAINST [ ] ABSTAIN [ ]
[ ]
--------------------------------------
For all nominees except as noted above
MARK HERE FOR ADDRESS CHANGE
AND NOTE AT LEFT [ ]
(Important: Please sign exactly as
name appears hereon.)
Signature:
--------------------------
Date:
-------------------------------
Signature:
--------------------------
Date:
-------------------------------
