<PAGE> 1
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:
<TABLE>
<S> <C>
/ / Preliminary Proxy Statement / / Confidential, for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
</TABLE>
Southtrust Corporation
--------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
--------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
/ / $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 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
<PAGE> 2
SOUTHTRUST CORPORATION (Logo)
420 NORTH 20TH STREET
BIRMINGHAM, ALABAMA 35203
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON APRIL 19, 1995
TO THE STOCKHOLDERS:
The Annual Meeting of Stockholders (the "Annual Meeting") of SouthTrust
Corporation (the "Company") will be held in the auditorium on the eighth floor
of the SouthTrust Tower, 420 North 20th Street, Birmingham, Alabama, on
Wednesday, April 19, 1995, at 9:00 A.M., Central Time, for the following
purposes:
(1) To elect three (3) persons to the Board of Directors of the
Company, each person to serve a three-year term and until such person's
successor is duly elected and qualified;
(2) To amend the Amended and Restated 1984 Stock Option Plan and the
1993 Stock Option Plan in the manner described in the accompanying Proxy
Statement; and
(3) To transact such other business as may properly come before the
Annual Meeting.
Holders of Common Stock of the Company of record at the close of business
on February 24, 1995 are entitled to notice of and to vote at the Annual
Meeting.
You are cordially invited to attend the Annual Meeting, and we hope you
will be present at the Annual Meeting. WHETHER YOU PLAN TO ATTEND OR NOT, PLEASE
SIGN AND RETURN THE ENCLOSED PROXY SO THAT THE COMPANY MAY BE ASSURED OF THE
PRESENCE OF A QUORUM AT THE ANNUAL MEETING. A postage-paid envelope addressed to
the Company is enclosed for your convenience in returning your proxy to the
Company.
By Order Of The Board Of Directors
AUBREY D. BARNARD
Secretary
Birmingham, Alabama
March 14, 1995
<PAGE> 3
SOUTHTRUST CORPORATION (Logo)
---------------------
PROXY STATEMENT
FOR THE ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON APRIL 19, 1995
The accompanying proxy is solicited on behalf of the Board of Directors of
SouthTrust Corporation, a Delaware corporation (the "Company"), for use at the
Annual Meeting of Stockholders (the "Annual Meeting") of the Company to be held
in the auditorium on the eighth floor of the SouthTrust Tower, 420 North 20th
Street, Birmingham, Alabama, on Wednesday, April 19, 1995 at 9:00 A.M., Central
Time. It is anticipated that this proxy material will be mailed to stockholders
on or about March 14, 1995.
The only matters to be considered at the Annual Meeting are the election of
three directors to serve for the term of office described below and the approval
of the proposed amendments to the Company's Amended and Restated 1984 Stock
Option Plan (the "1984 Stock Option Plan") and the Company's 1993 Stock Option
Plan (collectively, the "Stock Option Plans"). All shares of Common Stock
represented by an executed and completed proxy received by the Company in time
for voting at the Annual Meeting will be voted in accordance with the
instructions specified thereon, and if no instructions are specified thereon,
will be voted for the election of all three nominees named herein as directors
and in favor of the proposal to amend the Stock Option Plans. A proxy may be
revoked at any time prior to its exercise (i) by filing with the Secretary of
the Company either an instrument revoking the proxy or a duly executed proxy
bearing a later date or (ii) by attending the Annual Meeting and voting in
person. Attendance at the Annual Meeting by itself will not revoke a proxy.
In addition to the use of the mail, proxies may be solicited by telephone
or by telecopy or personally by the directors, officers and employees of the
Company, who will receive no extra compensation for their services. The expenses
of such solicitation will be paid by the Company. The Company will reimburse
banks, brokerage firms and other custodians, nominees and fiduciaries for
reasonable expenses incurred by them in sending proxy soliciting material to the
beneficial owners of shares of Common Stock of the Company.
As of February 24, 1995, the record date for the Annual Meeting, there were
issued and outstanding 81,941,730 shares of Common Stock of the Company. The
holders of each outstanding share of Common Stock of the Company as of such date
are entitled to one vote per share with respect to each matter to be considered
at the Annual Meeting. The presence, in person or by proxy, of a majority of the
outstanding shares of Common Stock of the Company is necessary to constitute a
quorum at the Annual Meeting. Shares of Common Stock represented by a properly
executed and returned proxy will be treated as present at the Annual Meeting for
purposes of determining a quorum without regard to whether the proxy is marked
as casting a vote for or against or abstaining with respect to a particular
matter. In addition, shares of Common Stock represented by "broker non-votes"
(i.e., shares of Common Stock held in record name by brokers or nominees as to
which a proxy is received and (i) instructions have not been received from the
beneficial owners or persons entitled to vote, (ii) the broker or nominee does
not have discretionary voting power and (iii) the record holder has indicated
that it does not have authority to vote such shares on that matter) generally
will be treated as present for purposes of determining a quorum, but as
described below, such broker non-votes will not have any effect upon the
election of directors at the Annual Meeting.
The affirmative vote of the holders of a plurality of the outstanding
shares of Common Stock of the Company present in person or represented by proxy
at the Annual Meeting is necessary to elect the nominees for directors named in
the Proxy Statement. Accordingly, abstentions and broker non-votes with respect
to the election of directors will have no effect upon the election of directors
at the Annual Meeting. The affirmative vote of the holders of a majority of the
outstanding shares of Common Stock of the Company is required for the adoption
of the proposed amendments to the Stock Option Plans. Abstentions and broker
non-votes with respect to the proposal to amend the Stock Option Plans will have
the same effect as votes against such proposal.
<PAGE> 4
ELECTION OF DIRECTORS
The Bylaws of the Company provide for a Board of Directors of not fewer
than three nor more than sixteen members. The Restated Certificate of
Incorporation and the Bylaws of the Company provide that the members of the
Board of Directors shall be divided into three classes, one class to be elected
at each annual meeting of stockholders and to serve for a term of three years.
As of the date of the Proxy Statement, the Board of Directors consists of nine
persons.
CURRENT NOMINEES
The Board of Directors proposes to nominate the three persons named below
for election as directors, such persons to serve until the 1998 Annual Meeting
of Stockholders and until their successors have been elected and shall have
qualified.
The names, ages and principal occupations during the past five years of the
nominees, the year each first became a director of the Company, and the number
and percentage of shares of the Company's Common Stock owned beneficially by
each of them as of January 31, 1995 are as follows:
<TABLE>
<CAPTION>
NUMBER AND PERCENT
OF SHARES OF COMMON
STOCK OF THE COMPANY
NAME, AGE AND BENEFICIALLY OWNED
PRINCIPAL OCCUPATION DIRECTOR AS OF JANUARY 31,
OF NOMINEES SINCE 1995
--------------------------------------------------- --------------- --------------------
<S> <C> <C>
John M. Bradford (56) April 23, 1987 24,507(1)
Chairman and President, 0.03%
Mrs. Stratton's Salads, Inc.
(processor of prepared salads)
William C. Hulsey (56) April 16, 1986 945,158(2)
Chairman and Chief Executive Officer, 1.15%
Arlington Properties, Inc.
(real estate development)
Wallace D. Malone, Jr. (58) August 2, 1972 1,454,660(3)
Chairman and Chief Executive Officer 1.76%
of the Company
</TABLE>
---------------
(1) Includes 10,540 shares held by Mr. Bradford's wife.
(2) Includes 18,678 shares held by Mr. Hulsey's wife (6,678 of which are held in
a custodial capacity) and 864,645 shares held by various trusts of which
Mr. Hulsey is a co-trustee.
(3) Includes 29,250 shares held by Mr. Malone's wife, 5,228 shares held by minor
children, 173,593 shares subject to employee stock options exercisable
within 60 days after January 31, 1995 and 279,168 shares held in Mr.
Malone's account by the trustee of the Company's Profit Sharing Plan as to
which the trustee possesses sole voting power but as to which Mr. Malone,
by virtue of allocating elections to various funds, possesses dispositive
power.
Each of the nominees was elected as a director at the Annual Meeting of
Stockholders held on April 15, 1992.
Unless directed to the contrary, the persons acting under the proxy
solicited hereby will vote for the nominees named above. Should any such nominee
become unable to accept election, which is not anticipated, it is intended that
the persons acting under the proxy will vote for the election in his stead of
such other person as the Board of Directors may recommend. Proxies may not be
voted for more than three persons.
THE BOARD OF DIRECTORS OF THE COMPANY RECOMMENDS A VOTE FOR THE NOMINEES
FOR DIRECTORS NAMED ABOVE.
2
<PAGE> 5
CONTINUING DIRECTORS
The following tabulation sets forth with respect to those persons who were
elected as directors of the Company at previous Annual Meetings of Stockholders
(and will continue to serve as directors following the Annual Meeting) the
names, ages and principal occupations during the past five years, the year each
person first became a director of the Company, and the number and percentage of
shares of the Company's Common Stock owned beneficially by each person as of
January 31, 1995:
<TABLE>
<CAPTION>
NUMBER AND PERCENT OF
SHARES OF COMMON STOCK OF
CURRENT THE COMPANY BENEFICIALLY
NAME, AGE AND TERM DIRECTOR OWNED AS OF JANUARY 31,
PRINCIPAL OCCUPATION EXPIRES SINCE 1995
---------------------------------------- -------- ------------------ --------------------------
<S> <C> <C> <C>
Herbert Stockham (66) 1996 October 17, 1973 107,751(1)
Chairman, Stockham Valves & 0.13%
Fittings, Inc. (manufacturing
business)
Charles G. Taylor (66) 1996 January 15, 1992 221,440(2)
President and Chief Executive Officer, 0.27%
The Taylor Group, Inc.
(contract service business)
Bill L. Harbert (71) 1997 February 18, 1981 626,091(3)
Chairman and Chief Executive Officer, 0.76%
Bill Harbert International
Construction, Inc.
(construction business)
Allen J. Keesler, Jr. (56) 1997 January 15, 1992 5,837(4)
President and Chief Executive Officer, 0.01%
Florida Power Corporation
(electric utility business)
T. W. Mitchell (66) 1997 January 17, 1973 568,494(5)
Chairman and Chief Executive Officer, 0.69%
Stuart Construction Co., Inc.
(construction business)
William K. Upchurch, Jr. (62) 1997 April 23, 1987 45,312(6)
Chairman and Chief Executive Officer, 0.05%
W. K. Upchurch Construction Company,
Inc. (construction business)
</TABLE>
---------------
(1) Includes 6,036 shares held by Mr. Stockham's wife and 2,551 shares held in a
trust with respect to which Mr. Stockham possesses voting power.
(2) Includes 1,468 shares owned by Mr. Taylor's wife.
(3) Includes 120,000 shares held in a corporation of which Mr. Harbert is a
principal stockholder and 11,700 shares held in a trust which is revocable
by Mr. Harbert.
(4) Includes 1,129 shares held by Mr. Keesler's wife.
(5) Includes 169,135 shares held by corporations of which Mr. Mitchell is a
principal stockholder and 183,859 shares held in trust for Mr. Mitchell's
wife.
(6) Includes 1,430 shares held in a trust of which Mr. Upchurch is trustee,
2,054 shares held by trusts of which Mr. Upchurch's wife is custodian and
2,796 shares held by Mr. Upchurch's wife.
Of the directors named above, Messrs. Stockham and Taylor were elected at
the 1993 Annual Meeting of Stockholders, and Messrs. Harbert, Keesler, Mitchell
and Upchurch were elected at the 1994 Annual Meeting of Stockholders, to serve
for the terms indicated.
Mr. Stockham is a director of The Southern Company, which has securities
registered under the Securities Exchange Act of 1934.
3
<PAGE> 6
The Company has an Audit Committee of the Board of Directors, consisting of
Messrs. Stockham and Keesler, which recommends to the Board of Directors the
independent accountants to be selected as the Company's auditors and reviews the
audit plan, financial statements and audit results. The Audit Committee also
reviews the internal audit reports of the Company and its affiliates and reviews
comments from the affiliates as to exceptions noted in the reports. The Audit
Committee held five meetings during 1994. Mr. Stockham is Chairman of the Audit
Committee.
The Company has a Human Resources Committee of the Board of Directors,
consisting of Messrs. Taylor, Hulsey and Harbert, which sets compensation for
the executive officers of the Company and administers the 1990 Discounted Stock
Plan, the 1984 Stock Option Plan, the 1993 Stock Option Plan and the Amended and
Restated Senior Officer Performance Incentive Plan (and similar plans) of the
Company. The Human Resources Committee held five meetings during 1994. Mr.
Taylor was named Chairman of the Human Resources Committee in December 1994.
The Company does not have any Nominating Committee of the Board of
Directors. The functions of a Nominating Committee are filled by the Board of
Directors.
COMPENSATION OF DIRECTORS
During the year ended December 31, 1994, the Board of Directors held five
regular and special meetings. Directors of the Company are paid $3,500 per
calendar quarter and $2,000 per meeting. Directors who are also employees of the
Company are not compensated for their service as directors or for attendance at
meetings of the Board of Directors. All directors attended more than 75% of the
meetings of the Board of Directors (including any meetings of any committees
thereof of which they are members).
STOCK OWNERSHIP OF CERTAIN EXECUTIVE OFFICERS
The following tabulation sets forth with respect to the five most highly
compensated executive officers of the Company and its subsidiaries the name and
age of such officer, the position of such officer with the Company or its
subsidiaries, the length of time the person has held such office and the number
and percentage of shares of the Company's Common Stock owned beneficially by
each person as of January 31, 1995:
<TABLE>
<CAPTION>
NUMBER AND PERCENT OF
SHARES OF COMMON
STOCK OF THE COMPANY
POSITION BENEFICIALLY OWNED
HELD AS OF JANUARY 31,
NAME AND AGE(1) OFFICE(2) SINCE 1995
------------------------------- --------------------------- -------- ---------------------
<S> <C> <C> <C>
Roy W. Gilbert, Jr. (58)(3) President of the Company 1/16/90 222,246(4)
0.27%
Julian W. Banton (54) Chief Executive Officer of 1/16/90 136,812(5)
SouthTrust Bank of 0.17%
Alabama, National
Association
Frederick W. Murray, Jr. (56) Executive Vice President of 1/1/80 159,982(6)
the Company 0.19%
James W. Rainer, Jr. (51) Executive Vice President of 12/15/82 137,762(7)
the Company 0.17%
All Executive Officers and N/A N/A 4,861,962
Directors as a Group (16 5.90%
persons)(8)
</TABLE>
---------------
(1) Information with respect to Wallace D. Malone, Jr., Chairman and Chief
Executive Officer of the Company, is set forth in the director nominee
table above.
(2) All officers of the Company and its subsidiaries are elected annually by the
Board of Directors of the Company or such subsidiary, as the case may be.
4
<PAGE> 7
(3) Effective as of February 10, 1995, Mr. Gilbert retired as President and
resigned as a director of the Company. Mr. Wallace D. Malone, Jr. was
elected to replace Mr. Gilbert as President of the Company. During 1995,
Mr. Gilbert has agreed to devote a portion of his time to serving as an
executive assistant to the Chief Executive Officer of the Company.
(4) Includes 3,640 shares held jointly with Mr. Gilbert's wife, 21,708 shares
held by Mr. Gilbert's wife, 69,416 shares subject to stock options
exercisable within 60 days after January 31, 1995 and 50,356 shares held in
Mr. Gilbert's account by the trustee of the Company's Profit Sharing Plan
as to which the trustee possesses sole voting power but as to which Mr.
Gilbert, by virtue of allocating elections to various funds, possesses
dispositive power.
(5) Includes 450 shares held by Mr. Banton's child, 97,921 shares subject to
stock options exercisable within 60 days after January 31, 1995 and 1,089
shares held in Mr. Banton's account by the trustee of the Company's Profit
Sharing Plan as to which the trustee possesses sole voting power but as to
which Mr. Banton, by virtue of allocating elections to various funds,
possesses dispositive power.
(6) Includes 23,000 shares held by Mr. Murray's wife, 792 shares held in a
custodial capacity, 69,222 shares subject to stock options exercisable
within 60 days after January 31, 1995 and 45,836 shares held in Mr.
Murray's account by the trustee of the Company's Profit Sharing Plan as to
which the trustee possesses sole voting power but as to which Mr. Murray,
by virtue of allocating elections to various funds, possesses dispositive
power.
(7) Includes 204 shares held by Mr. Rainer's wife, 11,000 shares held by Mr.
Rainer's child, 68,228 shares subject to stock options exercisable within
60 days after January 31, 1995 and 15,799 shares held in Mr. Rainer's
account by the trustee of the Company's Profit Sharing Plan as to which the
trustee possesses sole voting power but as to which Mr. Rainer, by virtue
of allocating elections to various funds, possesses dispositive power.
(8) This group includes Mr. Roy W. Gilbert, Jr., former President and director
of the Company, who retired as President and resigned as a director of the
Company effective February 10, 1995.
PROPOSED AMENDMENTS TO THE STOCK OPTION PLANS
The Company has adopted and maintains the 1984 Stock Option Plan and the
1993 Stock Option Plan (the "Stock Option Plans") pursuant to which the Company
grants to key employees of the Company incentive stock options (ISO's) and
nonqualified stock options (NQSO's).
The Board of Directors of the Company has approved, subject to approval by
the stockholders of the Company, certain amendments to the Stock Option Plans.
These amendments (i) provide additional flexibility to participants in the Stock
Option Plans to exercise certain of their stock options in the event of
retirement and similar events and to engage in certain other transactions and
(ii) effect certain technical changes to the Stock Option Plans.
The Stock Option Plans currently provide that if a participant's employment
with the Company is terminated by reason of death, disability, retirement or any
other reason, all rights under any outstanding stock option terminate upon the
earlier to occur of three months after the date of such termination or the
expiration date of such stock option. While ISO's are required to be exercised
within three months of termination of employment in order to qualify as such
under the Internal Revenue Code of 1986 (the "Code"), NQSO's are not subject to
such a requirement. The Board of Directors of the Company has concluded that it
is not in the best interests of the Company or a participant to require that all
stock options be exercised, upon the occurrence of certain events of termination
of employment, over a short period of time. Accordingly, the Board of Directors
of the Company proposes to amend the Stock Option Plans to provide that, in case
of a termination of employment by reason of death, disability or retirement
(prior to attaining 60 years of age), all outstanding NQSO's shall terminate on
the earlier to occur of twelve months following the date of termination of such
employment or the expiration date of such stock option, and that in case of
termination of employment by reason of retirement of a participant who has
attained 60 years of age, all outstanding NQSO's shall terminate on the earlier
to occur of three years following the date of termination of such employment or
the expiration date of such stock option; in all other cases of termination of
employment, all outstanding NQSO's shall terminate on the earlier to occur of
three months following the date of termination of employment or the
5
<PAGE> 8
expiration date of such stock option. The Stock Option Plans also provide that
no stock option may be sold or transferred, except by the laws of descent and
distribution. While current federal income tax law would restrict the
transferability of ISO's, such law does not restrict the transferability of
NQSO's, and there may be valid estate planning reasons for a participant to
transfer an NQSO to members of such participant's immediate family (or related
parties). Accordingly, it is proposed to amend the Stock Option Plans to provide
that NQSO's may be transferred by a participant to a member of the participant's
immediate family or to a trust for the benefit of such family members or to a
partnership whose only partners are such participant's family members, but that
such transferees may not transfer such NQSO's to third parties. Finally, the
Stock Option Plans currently provide that, in the event of certain mergers or
other reorganizations in which the Company is not the surviving corporation, all
stock options will terminate as of the date of such transaction, but
notwithstanding such fact, all such stock options will become immediately
exercisable and participants may elect to cause the surviving corporation in
such transaction to substitute replacement stock options for those stock options
as to which there may be certain unfavorable federal income tax consequences.
Due to recent accounting interpretations by the Securities and Exchange
Commission, the Board of Directors has concluded that it is desirable to amend
the Stock Option Plans to delete any reference to the termination of stock
options upon the occurrence of any such merger or reorganization. In addition,
the Stock Option Plans are being amended to broaden the definition of a merger
or reorganization of the Company to make it clear that it includes any merger or
reorganization in which equity securities of the Company are exchanged for other
consideration and to grant the Human Resources Committee, in the event of any
such merger or reorganization, the discretion to accelerate the exercisability
or vesting of stock options and to make such other modifications or revisions in
such stock options as may be appropriate to protect the interests of the
participants in the Stock Option Plans. The Board of Directors of the Company
believes that these amendments to the Stock Option Plans afford greater
flexibility to the Company in the event of any merger or reorganization and will
enable the Company to address more effectively the various issues that may arise
in this context.
The proposed amendments to the Stock Option Plans are annexed to the Proxy
Statement as Annex 1.
As of the date of the Proxy Statement, an aggregate of 2,661,444 shares of
Common Stock of the Company are reserved for issuance under the 1993 Stock
Option Plan. The Human Resources Committee of the Board of Directors of the
Company administers the Stock Option Plans, and the Committee selects as
participants those executives and employees of the Company and its subsidiaries
who, in the opinion of such Committee, are in a position to contribute
materially to the Company's continued growth and development and to its
long-term financial success. For information concerning stock options under the
Stock Option Plans that were allocated in fiscal 1994 and in the first quarter
of fiscal 1995 to executive officers of the Company and its subsidiaries, see
"EXECUTIVE COMPENSATION -- Stock Options and Stock Purchase Agreements."
The grant of both ISO's and NQSO's under the 1993 Stock Option Plan will be
subject to the following limitations: (i) the option price will be not less than
100% of the fair market value of the stock on the date a grant is determined to
be made; (ii) no option may be exercised more than ten years after the date of
grant; and (iii) such other conditions as the committee of the Board of
Directors administering the 1993 Stock Option Plan may determine. In addition,
if the fair market value (determined as of the date a grant is determined to be
made) of stock with respect to which options granted under the 1993 Stock Option
Plan first become exercisable in any one calendar year exceeds $100,000, then
the options issued with respect to the excess amount over $100,000 shall
constitute NQSO's, and shall not be ISO's.
INCENTIVE STOCK OPTIONS
Under the provisions of Section 422 of the Internal Revenue Code of 1986,
an employee is not subject to federal income tax consequences either upon the
grant or upon the exercise of an ISO. Gain or loss is recognized only upon the
disposition of the stock acquired pursuant to the exercise of an ISO, and such
gain or loss generally will constitute long-term capital gain. If the stock so
acquired is disposed of within two years of the date the ISO was granted, or
within one year of the exercise of the ISO, however, such disposition will
constitute a "disqualifying disposition." In the event of a disqualifying
disposition, the difference between the
6
<PAGE> 9
fair market value of the stock at the time of exercise and the exercise price
will be included in ordinary income for the year in which such disposition takes
place.
The Company is not allowed any deduction with respect to an ISO, unless
there is a disqualifying disposition.
However, upon the exercise of an ISO, the difference between the fair
market value of the stock at the time of exercise and the exercise price is an
item of tax preference for purposes of the alternative minimum tax applicable to
individuals. In general, a taxpayer's alternative minimum tax is computed by
applying the alternative minimum tax rate for individuals, 24%, to the excess of
(i) the sum of the taxpayer's regular taxable income, certain adjustments, tax
preference items and the taxpayer's alternative minimum tax net operating loss,
if any, over (ii) the exemption amount. The alternative minimum tax is payable
only if it exceeds the taxpayer's regular tax.
NONQUALIFIED STOCK OPTIONS
The grant of NQSO's does not result in any federal income tax consequences
for either the Company or the employee. However, upon exercise of an NQSO, the
optionee will realize ordinary income equal to the difference between the fair
market value of the shares purchased determined as of the date of exercise, and
the price which the optionee pays for the shares. The Company will be entitled
to a deduction for federal income tax purposes equal to the amount which the
employee is required to include in income, subject to two conditions: (i) the
amount taken into income by the employee must constitute "reasonable
compensation" for federal income tax purposes, and (ii) the Company must
withhold applicable taxes from the employee's income in accordance with Treas.
Reg. sec. 1.83-6(a)(2). Any sale or exchange of shares acquired pursuant to the
exercise of an NQSO will result in long-term or short-term capital gain or loss
to the optionee, depending upon whether the shares were held for one year or
longer, or less than one year, respectively. Currently capital gains of
individual taxpayers are taxed at a maximum rate of 28%, although such capital
gains are taken into account in computing the phase-out of the benefits of
itemized deductions and personal exemptions, and thus may have the effect of
increasing the marginal income tax rate applicable to the taxpayer's ordinary
income.
THE BOARD OF DIRECTORS OF THE COMPANY RECOMMENDS A VOTE FOR THE AMENDMENTS
TO THE STOCK OPTION PLANS DESCRIBED ABOVE.
7
<PAGE> 10
EXECUTIVE COMPENSATION
The following tables, graphs and other information provide certain details
concerning the cash and equity-based compensation payable to certain executives
of the Company and certain additional information, all of which are presented in
accordance with regulations of the Securities and Exchange Commission.
FIVE YEAR TOTAL STOCKHOLDER RETURN
The following indexed graph compares the Company's annual percentage change
in cumulative total stockholder return for the past five years with the
cumulative total return of the Standard and Poor's 500 Stock Index and the
Standard and Poor's Regional Bank Index during the same period. This
presentation assumes that $100 was invested in shares of the relevant issuers on
December 31, 1989, and that dividends received were immediately reinvested in
additional shares. The graph plots the value of the initial $100 investment at
one-year intervals. For purposes of constructing this data, the returns of each
component issuer have been weighted according to that issuer's market
capitalization.
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN
SOUTHTRUST CORPORATION
(PERFORMANCE THROUGH DECEMBER 31, 1994)
<TABLE>
<CAPTION>
MEASUREMENT PERIOD S&P MAJOR
(FISCAL YEAR COVERED) SOUTHTRUST S&P 500 REG. BANKS
<S> <C> <C> <C>
1989 100 100 100
1990 75 97 71
1991 183 126 128
1992 191 136 163
1993 222 150 172
1994 218 152 163
</TABLE>
REPORT OF THE HUMAN RESOURCES COMMITTEE ON EXECUTIVE COMPENSATION
The Human Resources Committee of the Board of Directors of the Company
annually establishes the compensation of the executive officers of the Company
and certain of its subsidiaries. In doing so, the Human Resources Committee's
primary objective is to ensure that the compensation programs for executives are
designed and administered to motivate executives to produce superior performance
for the Company and provide superior returns to stockholders of the Company.
An executive's base salary is established after a careful review of
competitive practices to ensure that the total compensation opportunity compares
favorably to similarly situated executives. A significant portion of an
8
<PAGE> 11
executive's total compensation is variable and is based on short-term and
long-term performance of the Company. Short-term performance of the Company is
rewarded, in the case of the senior executive officers of the Company, by annual
cash bonuses under the Senior Officer Performance Incentive Plan of the Company
(the "Incentive Plan") and, in the case of certain other executives of the
Company, by annual cash bonuses under a similar incentive plan, the amount of
which and the criterion for payment of which are established in advance by the
Human Resources Committee. The Stock Option Plans are the principal mechanisms
for rewarding executives for the long-term performance of the Company.
The following is a description of the compensation programs of the Company
and how each relates to the objectives outlined above.
Base Salary: The base salaries of the five highest paid executives of the
Company are listed in the Summary Compensation Table. The base salary of each
executive is reviewed annually by the Human Resources Committee. Each
executive's base pay is determined by considering the performance of the
individual as well as the executive's experience and total responsibility in
comparison to other executives of the Company and to executives with peer
institutions of comparable size. In doing so, the Human Resources Committee
seeks to ensure that the base pay of each executive is competitive and rewards
the executive for the executive's performance and total contribution to the
success of the Company.
As part of this process, the Human Resources Committee reviews a number of
salary surveys produced by compensation consulting firms. In terms of base
salaries, the surveys indicated that the base salaries of the executives of the
Company listed in the Summary Compensation Table, when compared to the peer
institutions described below, approximated the average base salary for
executives of such institutions.
The Human Resources Committee considers the Company's peer institutions to
be southeastern banks and bank holding companies with total assets ranging from
$6 to $20 billion, some of which are included in the Standard and Poor's
Regional Bank Index. These peer institutions were selected because they are
located within the Company's operating region and some of them are comparable in
size to the Company. In establishing the 1994 base salaries for the executives
listed in the Summary Compensation Table, the Human Resources Committee
considered the base salary of each such executive, the performance and
experience of each such executive and the base salaries for comparable
executives reported by the peer institutions. Comparing the Company only to peer
institutions of its approximate size and without any regard for any other
variable, the surveys indicated that the base salaries of the Company's
executives were at approximately the 65th percentile of the array of base
salaries reported by such institutions.
Incentive Plans: The Senior Executive Performance Incentive Plan of the
Company (the "Incentive Plan") is designed to reward executives annually for
achieving the after-tax net income goals of the Company for the preceding year.
Upon completion of the business plan for the forthcoming year, the Chief
Executive Officer of the Company presents to the Human Resources Committee the
net income goal of the Company on a consolidated basis and the net income goals
of the various subsidiaries of the Company for the year.
With respect to the executive officers named in the Summary Compensation
Table, the potential incentive award for each executive is dependent upon each
executive's level of responsibility and the judgement of the Human Resources
Committee of the executive's potential contribution to the achievement of the
particular net income goals. For 1994, the range of potential awards for such
executives was between 15% and 60% of such executive's annual base salary, with
each individual executive being assigned minimum, target and maximum awards. An
executive whose award is based upon a net income goal earns no award if less
than 95% of the target goal is achieved, earns incremental percentages of the
award if more than 95% but less than 105% of the target goal is achieved and
earns the maximum award if 105% of the target goal is achieved.
The amounts awarded the Company's five highest paid executives in 1994
under the Incentive Plan are set forth in the Annual Compensation Bonus column
of the Summary Compensation Table.
The Human Resources Committee has recommended to the Board of Directors,
and intends to recommend to the Board of Directors in the future, that it
continue to take appropriate steps to qualify compensation payable to its
executives for deductibility under the federal income tax laws.
9
<PAGE> 12
Stock Options: Stock options are the Company's principal long-term
incentive plan. The Human Resources Committee believes that stock options
encourage and reward management decisions that result in the long-term success
of the Company.
The value of stock options is dependent upon an appreciation in the value
of the underlying shares of Common Stock. The Human Resources Committee believes
stock options motivate and reward executives by including them within the
ownership base of the Company. In addition, to encourage a long term
perspective, options have a ten-year exercise period, and options cannot be
exercised before a one-year period has elapsed from grant date.
The Board of Directors of the Company determines the aggregate number of
shares of Common Stock to be allocated annually for use in connection with the
Stock Option Plans of the Company, and the Human Resources Committee then awards
stock options to particular executives. The number of shares of Common Stock
subject to options awarded by the Human Resources Committee to a particular
executive is determined in light of the executive's level of responsibility,
seniority and previous grants of stock options to such executive.
In addition, information respecting the peer institutions described above,
indicates that the stock option awards for the Company's five most highly
compensated executives during 1994 were significantly below average when
compared to the award opportunities that have been reported by the peer
institutions of comparable size to the Company. In addition, the total number of
shares of Common Stock subject to options for 1994, as a percentage of the
Company's total outstanding Common Stock is substantially below the median
reported by peer institutions of comparable size to the Company.
The Company also maintains the 1990 Discounted Stock Plan, which is
available to all employees including executives who have at least five years of
service with the Company. For information respecting the 1990 Discounted Stock
Plan, see the information set forth under the heading "Stock Options and Other
Stock Purchase Rights" in this Proxy Statement. Awards under the 1990 Discounted
Stock Plan have not been used extensively by the Human Resources Committee as a
vehicle for executive compensation.
Chief Executive Officer Compensation: The Human Resources Committee meets
in executive sessions to review the Chief Executive Officer's salary and
periodically engages independent consultants to advise the Human Resources
Committee on the compensation practices of similarly situated institutions.
The 1994 base salary increase for the Chief Executive Officer was
established after a review of the base salaries of comparable executives of the
peer institutions referred to above. This analysis contained information on all
components of the Chief Executive Officer's compensation. After reviewing the
data and equally weighing the Company's substantial asset growth and sustained
performance, including increased net income and increased earnings per share,
the Human Resources Committee established the Chief Executive Officer's base
salary for 1994. The Chief Executive Officer's base salary for 1994 was above
the average salary reported for chief executive officers of all peer
institutions, but when compared to peer institutions of comparable size, the
Chief Executive Officer's base salary was below the average compensation of
chief executive officers of such institutions.
The Chief Executive Officer's target award for achieving the net income
goal of the Company for 1994 was 40% and the maximum award was 60%. In 1994, the
Company's net income exceeded the target goal established by the Human Resources
Committee, resulting in a bonus of 56.8% of base salary being paid to the Chief
Executive Officer.
During 1994, the Chief Executive Officer also was granted options to
purchase 66,000 shares of Common Stock. The 1994 stock option award increase was
granted after a review of the stock option awards of comparable executives of
peer institutions of comparable size to the Company. The Chief Executive
Officer's 1994 option award, as a percentage of base salary, is below average
when compared to the awards reported by the peer institutions of comparable size
to the Company.
10
<PAGE> 13
The members of the Human Resources Committee are as follows:
Charles G. Taylor, Chairman
William C. Hulsey
Bill L. Harbert
Compensation Committee Interlocks and Insider Participation in Compensation
Decisions: None of the members of the Human Resources Committee have served as
officers of the Company. In addition, none of the Human Resources Committee
members have any other relationship to the Company, except that Bill Harbert
International Construction, Inc., a corporation of which Mr. Bill L. Harbert is
the principal stockholder and Chief Executive Officer ("Harbert International"),
has entered into an agreement with SouthTrust Bank of Alabama, National
Association, pursuant to which Harbert International is constructing an
operations center for SouthTrust Bank of Alabama, National Association. The
facilities comprising the operations center will encompass approximately 218,000
square feet and will be completed on or about September 30, 1995.
SUMMARY COMPENSATION TABLE
The following Summary Compensation Table sets forth the information
concerning compensation for services in all capacities, including cash and
non-cash compensation, awarded to, earned by or paid to the Company's Chief
Executive Officer and the four other most highly compensated executive officers
of the Company and certain of its subsidiaries in each of the last three fiscal
years, unless otherwise noted.
<TABLE>
<CAPTION>
LONG TERM COMPENSATION
-----------------------------------
AWARDS
----------------------- PAYOUTS
ANNUAL COMPENSATION(1) RESTRICTED -------
--------------------------- OTHER ANNUAL STOCK OPTIONS LTIP ALL OTHER
NAME AND PRINCIPAL BONUS COMPENSATION AWARD(S) (NUMBER OF PAYOUTS COMPENSATION
POSITION(1) YEAR SALARY($) ($)(2) ($)(3) ($) SHARES) ($) ($)
--------------------------- ---- --------- -------- ------------ ---------- ---------- ------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Wallace D. Malone, Jr., 1994 $630,000 $358,344 $ 2,191 N/A 66,000 N/A $ 60,335(5)
Chief Executive Officer 1993 605,016 363,000 20,121 N/A 32,266(4) N/A 59,770
of the Company 1992 565,008 254,250 18,305 N/A 34,827(4) N/A 58,661
Roy W. Gilbert, Jr., 1994 456,000 237,758 14,892 N/A 24,000 N/A 43,700(5)
President of the 1993 439,032 241,450 14,841 N/A 23,411(4) N/A 43,403
Company 1992 414,024 165,600 13,501 N/A 25,518(4) N/A 43,023
Julian W. Banton, 1994 303,500 166,925 5,152 N/A 15,000 N/A 18,137(6)
President and Chief 1993 292,000 160,600 5,152 N/A 11,679(4) N/A 28,836(6)
Executive Officer of 1992 267,000 93,450 4,821 N/A 12,342(4) N/A 27,705(6)
SouthTrust Bank of
Alabama, National
Association
Frederick W. Murray, Jr., 1994 188,500 80,414 5,954 N/A 4,750 N/A 18,137(6)
Executive Vice President 1993 183,000 82,350 5,954 N/A 7,319(4) N/A 18,158(6)
of the Company 1992 172,800 60,480 3,839 N/A 7,987(4) N/A 18,032(6)
James W. Rainer, Jr., 1994 177,000 75,508 4,099 N/A 4,750 N/A 17,123(6)
Executive Vice President 1993 171,000 76,950 4,099 N/A 6,839(4) N/A 16,971(6)
of the Company 1992 161,000 56,350 5,571 N/A 7,443(4) N/A 16,805(6)
</TABLE>
---------------
(1) Although each person received perquisites or other personal benefits in the
years shown, the value of these benefits did not exceed in the aggregate
the lesser of $50,000 or 10% of such person's salary and bonus in any year.
11
<PAGE> 14
(2) Represents amounts paid to each executive officer under the Senior Officer
Performance Incentive Plan.
(3) Represents life insurance premiums and additional taxes owed on the
additional compensation paid by the Company on behalf of each executive
officer.
(4) Adjusted for 3 for 2 stock split that occurred on May 19, 1993.
(5) Includes $30,000 for Mr. Malone and $20,000 for Mr. Gilbert, which amounts
were withheld by the Company from deferred compensation due Messrs. Malone
and Gilbert in 1994 in order to defray the costs of the Company agreeing to
pay Messrs. Malone and Gilbert an annual sum certain, commencing at the age
of 60 and continuing for the greater of their lifetime or 15 years, and
includes payments by the Company to defined contribution plans maintained
by the Company (including qualified and nonqualified compensation plans).
(6) Represents payments by the Company to defined contribution plans maintained
by the Company (including qualified and nonqualified compensation plans) on
behalf of the executive officers.
STOCK OPTIONS AND OTHER STOCK PURCHASE RIGHTS
The Company has adopted the Stock Option Plans pursuant to which the
Company grants to key employees of the Company either incentive stock options
("ISO's") or nonqualified stock options ("NQSO's"), and the 1990 Discounted
Stock Plan (the "Discounted Plan"), pursuant to which awards to purchase shares
of Common Stock of the Company at a discount are made to eligible employees,
including executive officers of the Company.
The grant of stock options pursuant to the Stock Option Plans is, and will
be, made subject to the following limitations: (i) the option price will be not
less than 100% of the fair market value of the Common Stock on the date a grant
is determined to be made; (ii) no option may be exercised after ten years from
the effective date of the grant; and (iii) such other conditions as the Human
Resources Committee, which administers the Stock Option Plans, may determine. A
total of 2,661,444 shares of Common Stock of the Company are available for
issuance under the Stock Option Plans.
The 1990 Discounted Stock Plan (the "Discounted Plan") was established in
order to give all employees an opportunity to acquire an equity interest in the
Company at a discount (17.5%) to market, and awards are made to all employees
(including executive officers) who have completed five years of full time
service to the Company and its subsidiaries. A total of 1,125,000 shares of
Common Stock of the Company are reserved for issuance under the Discounted Plan,
and the aggregate purchase price of shares of Common Stock awarded to each
employee may not exceed 10% of the annual salary of each employee. Certain
restrictions are imposed on the shares of Common Stock awarded under the
Discounted Plan and, under certain circumstances, the Company may repurchase
such shares.
The following table sets forth information concerning grants of stock
options during fiscal year 1994 to each executive officer listed below:
OPTION GRANTS IN FISCAL YEAR 1994
INDIVIDUAL GRANTS
<TABLE>
<CAPTION>
POTENTIAL
REALIZABLE VALUE
% OF TOTAL ASSUMING RATES
OPTIONS OPTIONS EXERCISE OF STOCK
GRANTED GRANTED OR BASE PRICE APPRECIATION OF
(NUMBER OF EMPLOYEES PRICE EXPIRATION ---------------------
NAME SHARES)(1)(2) IN 1994 ($/SH) DATE 5%(3) 10%(3)
------------------------------ ------------- ---------- -------- ----------- -------- ----------
<S> <C> <C> <C> <C> <C> <C>
Wallace D. Malone, Jr......... 66,000 28.56% $ 18.625 1/18/2004 $773,069 $1,959,108
Roy W. Gilbert, Jr............ 24,000 10.39% 18.625 1/18/2004 281,116 712,403
Julian W. Banton.............. 15,000 6.49% 18.625 1/18/2004 175,697 445,252
Frederick W. Murray, Jr....... 4,750 2.06% 18.625 1/18/2004 55,638 140,996
James W. Rainer, Jr........... 4,750 2.06% 18.625 1/18/2004 55,638 140,996
</TABLE>
---------------
(1) Does not include awards during 1994 under the Discounted Plan to Messrs.
Malone, Gilbert, Banton, Murray and Rainer to purchase 4,183, 3,027, 2,015,
1,251 and 1,175 shares of Common Stock, respectively, at a 17.5% discount
to the then market price of such shares; none of such persons purchased
12
<PAGE> 15
any shares of Common Stock awarded them under the Discounted Plan during
1994, except for Mr. Banton (who purchased all of the shares awarded him).
(2) Each of the options granted to the named executives in 1994 become
exercisable on January 11, 1995 (except for options respecting 16,107
shares of Common Stock which are exercisable in January 1996), and the
exercisability of such options is not subject to any future
performance-based condition. Nonqualified options granted to the named
executives pursuant to the 1993 Stock Option Plan have a reload option
which provides that if any optionee elects to exercise a nonqualified
option issued under the 1993 Stock Option Plan by tendering stock (rather
than cash) to the Company, the Human Resources Committee is authorized, but
not required, to grant additional nonqualified options with respect to a
number of shares of Common Stock of the Company equal to the number of
shares so tendered.
(3) These numbers are calculated by comparing the exercise price of such options
and the market value of the shares of Common Stock subject to such options,
assuming that the market price of such shares increase by 5% and 10%,
respectively, during each year that the options are exercisable.
The following table sets forth certain information concerning grants of
stock options during the first quarter of 1995 to certain executive officers of
the Company and certain of its subsidiaries and to certain other persons:
OPTION GRANTS DURING FISCAL 1995
<TABLE>
<CAPTION>
EXERCISE OR
OPTIONS GRANTED BASE PRICE
NAME OR GROUP (NUMBER OF SHARES) $/SH
-------------------------------------------------------------- ------------------ -----------
<S> <C> <C>
Wallace D. Malone, Jr......................................... 70,065 $19.125
Julian W. Banton.............................................. 15,000 19.125
Frederick W. Murray, Jr....................................... 5,000 19.125
James W. Rainer, Jr........................................... 5,000 19.125
Executive Group............................................... 102,315 19.125
Employee Group................................................ 305,915 19.125
</TABLE>
Stock options are granted at fair market value (or the last sales price of
the Common Stock, as reported by NASDAQ-National Market System) as of the date
that a decision is made to grant the stock option, although the Board of
Directors may not approve the grant until a later date.
The following table sets forth the number of stock options exercised and
the dollar value realized thereon by each of the executive officers of the
Company and certain of its subsidiaries listed below during 1994, along with the
number and dollar value of any options remaining unexercised at year end:
AGGREGATED STOCK OPTION EXERCISES IN 1994
AND DECEMBER 31, 1994 OPTION VALUES
<TABLE>
<CAPTION>
VALUE OF
NUMBER OF SHARES UNEXERCISED
UNDERLYING IN-THE-MONEY
OPTIONS AT OPTIONS AT
NUMBER OF DECEMBER 31, 1994 DECEMBER 31, 1994
SHARES ACQUIRED EXERCISABLE/ EXERCISABLE/
NAME ON EXERCISE VALUE REALIZED UNEXERCISABLE(1) UNEXERCISABLE(1)
------------------------------------ --------------- -------------- ----------------- -----------------
<S> <C> <C> <C> <C>
Wallace D. Malone, Jr............... 0 0 173,513/5,369 $ 500,101/0
Roy W. Gilbert, Jr.................. 105,706 55,058 69,416/5,369 60,531/0
Julian W. Banton.................... 0 0 97,921/5,369 705,044/0
Frederick W. Murray, Jr............. 3,000 18,666 69,222/0 574,042/0
James W. Rainer, Jr................. 7,000 43,553 68,228/0 567,855/0
</TABLE>
---------------
(1) Includes options exercisable within 60 days of December 31, 1994. As of such
date, all options held by the persons named in the above table were
exercisable, except for an aggregate of 16,107 shares which are exercisable
in January 1996.
13
<PAGE> 16
EXECUTIVE EMPLOYMENT AGREEMENTS AND OTHER ARRANGEMENTS
The Company is a party to an employment agreement with Mr. Wallace D.
Malone, Jr. This employment agreement provides for the employment of Mr. Malone
in a capacity at least equal to the capacity in which the executive was serving
as of October 1984 for a term commencing as of October 19, 1984 and ending on
December 31, 1993, unless the executive (if eligible) elects early retirement.
The employment agreement also provides that on December 31 of each year
subsequent to 1987 the term of employment thereunder is automatically renewed
for an additional period of one year, thus resulting in the term of employment
under the employment agreement, except when the executive attains 65 years of
age, always being at least five years, and provides further that if the
executive is terminated for any reason other than his death or disability or for
cause, which is defined in the employment agreement as certain acts of
dishonesty and certain acts competitive with the Company, the executive is
entitled to receive annual payments at the rate in effect immediately prior to
such termination of employment for a period of five years.
The Company also is a party to an Employment Agreement with Mr. Roy W.
Gilbert, Jr. containing provisions substantially similar to those set forth in
Mr. Malone's Employment Agreement. Effective as of February 10, 1995, Mr. Roy W.
Gilbert, Jr., after thirty-six years with the Company, elected early retirement
from his position as President of the Company, which had the effect of causing
only those provisions of Mr. Gilbert's Employment Agreement relating to
retirement and related matters to be applicable. For information respecting Mr.
Gilbert's pension benefits, see the table set forth below. In addition, under an
agreement that Mr. Gilbert and the Company executed in February 1995, which is
terminable at any time by Mr. Gilbert or the Company and which provides that Mr.
Gilbert, as executive assistant to the Chief Executive Officer of the Company,
will devote some of his time to the affairs of the Company during 1995, Mr.
Gilbert will receive aggregate compensation of approximately $87,500 during
1995.
The Company maintains a Retirement Income Plan (the "Retirement Plan")
which is a noncontributory, defined benefit plan and covers all employees who
have been in the employ of the Company or one of its subsidiaries for more than
one year.
The Retirement Plan provides generally for an annual benefit commencing at
age 65 equal to 1.55% of the employee's average base compensation during the
highest five consecutive years of the fifteen years preceding retirement, less
1.25% of primary Social Security benefits in effect at the time of retirement,
for each year of credited service. The Company also maintains an Additional
Retirement Plan for certain executives, and since 1987, contributions of the
Company with respect to Messrs. Malone and Gilbert were made under the
Additional Retirement Plan. The Company also maintains certain deferred
compensation and similar agreements which pay Messrs. Malone, Gilbert and others
certain amounts upon retirement.
14
<PAGE> 17
The following table shows the annual pension benefits under the Retirement
Plan and the Additional Retirement Plan (and the deferred compensation and
similar agreements) for retirement at age 65 based upon various salaries and
years of service. The effects of integration with Social Security benefits have
been excluded from the table, because the amount of reduction in benefits due to
integration varies depending on the employee's age at the time of retirement and
changes in the Social Security laws.
PENSION PLAN TABLE
<TABLE>
<CAPTION>
YEARS OF SERVICE
----------------------------------------------------------------------
REMUNERATION 15 YEARS 20 YEARS 25 YEARS 30 YEARS 35 YEARS
------------ ---------- -------- -------- -------- --------
<C> <S> <C> <C> <C> <C> <C>
$ 125,000 ................. $ 29,063 $ 38,750 $ 48,438 $ 58,125 $ 67,813
150,000 ................. 34,875 46,500 58,125 69,750 81,375
175,000 ................. 40,688 54,250 68,813 81,375 94,938
200,000 ................. 46,500 62,000 77,500 93,000 108,500*
225,000 ................. 52,313 69,750 87,188 104,625* 122,063*
250,000 ................. 58,125 77,500 96,875 116,250* 135,625*
300,000 ................. 69,750 93,000 116,250* 139,500* 162,750*
400,000 ................. 93,000 124,000* 155,000* 186,000* 217,000*
450,000 ................. 104,625* 139,500* 174,375* 209,250* 244,125*
500,000 ................. 116,250* 155,000* 193,750* 232,500* 271,250*
600,000 ................. 139,500* 186,000* 232,500* 279,000* 325,500**
700,000 ................. 162,750* 217,000* 271,250* 325,500* 379,750**
800,000 ................. 186,000* 248,000* 310,000* 372,000* 434,000*
900,000 ................. 209,250* 279,000* 348,750* 418,500* 488,250*
1,000,000 ................. 232,500* 310,000** 387,500* 465,000* 524,500*
</TABLE>
---------------
* Under the Employee Retirement Income Security Act of 1974, the maximum
pension benefit under the Retirement Plan is subject to certain limitations,
which, while varying in some cases, generally is $102,582. As indicated
above, the Company maintains an Additional Retirement Plan and certain
deferred compensation and similar agreements which supplement the benefits
payable to certain executive officers.
** Roy W. Gilbert, who retired as President of the Company on February 10, 1995,
will receive annual pension benefits of approximately $297,000 during 1995
(and approximately $354,900 in subsequent years), which will be payable to
Mr. Gilbert's spouse, at a reduced rate, in the event of Mr. Gilbert's death.
Current base salary figures of the Chief Executive Officer and the other
executive officers of the Company are set forth in the Summary Compensation
Table. As of December 31, 1994, credited years of service for each such
executive officer are as follows: Mr. Malone -- 36 years; Mr. Gilbert -- 36
years; Mr. Banton -- 12 years; Mr. Murray -- 30 years; and Mr. Rainer -- 30
years.
COMPLIANCE WITH SECTION 16(A) OF
THE SECURITIES AND EXCHANGE ACT OF 1934
The Company's executive officers, directors and 10% stockholders are
required under the Securities Exchange Act of 1934 to file reports of ownership
and changes in ownership with the Commission. Copies of these reports must also
be furnished to the Company.
Based solely on a review of copies of such reports furnished to the Company
through the date hereof, or written representations of such officers, directors
or stockholders that no reports were required, the Company believes that during
1994 all filing requirements applicable to its officers, directors and
stockholders were complied with in a timely manner.
15
<PAGE> 18
TRANSACTIONS WITH MANAGEMENT
Directors and executive officers of the Company and their associates were
customers of and/or had transactions with the banks which are subsidiaries of
the Company in the ordinary course of business during the year ended December
31, 1994, and may continue to do so in the future. All outstanding loans and
commitments included in such transactions were made on substantially the same
terms, including interest rates and collateral, as those prevailing at the time
for comparable transactions with other persons, and did not involve more than
normal risks of collectability or present other unfavorable features.
AUDITORS
Arthur Andersen LLP, independent accountants, have been engaged as the
Company's auditors since 1989 and will continue to serve as the Company's
auditors during 1995. Representatives of Arthur Andersen LLP will be in
attendance at the Annual Meeting and will be available to respond to questions
from stockholders.
STOCKHOLDER PROPOSALS
Stockholder proposals submitted for consideration at the next Annual
Meeting of Stockholders must be received by the Company no later than December
20, 1995, to be included in the 1996 proxy materials.
GENERAL INFORMATION
As of the date of this Proxy Statement, the Board of Directors does not
know of any other business to be presented for consideration or action at the
Annual Meeting, other than that stated in the notice of the Annual Meeting. If
other matters properly come before the Annual Meeting, the persons named in the
accompanying form of proxy will vote thereon in their best judgment.
BY ORDER OF THE BOARD OF DIRECTORS
SOUTHTRUST CORPORATION
AUBREY D. BARNARD
Secretary
Birmingham, Alabama
March 14, 1995
16
<PAGE> 19
ANNEX I
I. The Amended and Restated 1984 Stock Option Plan is hereby amended as follows:
A. Section 7.8 is amended to read in its entirety as follows:
"Section 7.8 Termination of Employment Due to Death, Disability,
Retirement or Otherwise. In the event that the employment of a Participant
is terminated by reason of death, Disability or Retirement, or in the event
the employment of a Participant is terminated for any reason other than
death, Disability or Retirement, the rights under then outstanding Options
granted pursuant to the Plan shall terminate upon the expiration date of
each such Option or three months after such date of termination of
employment, whichever first occurs; provided that in the event that the
employment of a Participant is terminated by reason of death, Disability or
Retirement (provided, in the case of Retirement, that such Participant has
not attained the age of 60 years), the rights under then outstanding
nonstatutory stock options granted pursuant to the Plan shall terminate
upon the expiration date of each such nonstatutory stock option or twelve
months after such date of termination of employment, whichever first
occurs; and provided, further, that in the event that the employment of a
Participant is terminated by reason of Retirement (provided that such
Participant has attained the age of 60 years), the rights under then
outstanding nonstatutory stock options granted pursuant to the Plan shall
terminate upon the expiration date of each such nonstatutory stock option
or three years after such date of termination of employment, whichever
first occurs."
B. Section 7.9 is amended to read in its entirety as follows:
"Section 7.9 Nontransferability of Options. During a Participant's
lifetime, incentive stock options granted to him under the Plan are
exercisable solely by such Participant. No Option granted under the Plan
may be sold, transferred, pledged, or assigned, or otherwise alienated or
hypothecated by a Participant, except that the Committee, in its
discretion, may amend any stock option agreement relating to any
outstanding nonstatutory stock option (i) to provide that such nonstatutory
stock option may be transferred by a Participant to members of such
Participant's immediate family, trusts for the benefit of such family
members and/or partnerships whose partners are such family members, but
such transferees may not transfer such nonstatutory stock options to third
parties, (ii) to provide that nonstatutory stock options amended by the
Committee in the manner described in (i) above shall be subject to all
other conditions and restrictions applicable to Options granted under the
Plan prior to such transfer and (iii) to set forth in such stock option
agreement the restrictions on transfer described in (i) and (ii) above, as
well as any other restriction necessary to render the Options not subject
to being transferred in accordance with this Section 7.9 to be exempt
pursuant to Rule 16b-3 of the Securities Exchange Act of 1934."
C. Section 7.10 is deleted in its entirety.
D. Section 10 is amended to read in its entirety as follows:
"Section 10. Merger or Consolidation.
Section 10.1 Treatment of Options. In the event of (a) a dissolution
or a liquidation of the Corporation, (b) any reorganization, consolidation
or merger of the Corporation in which the Corporation is not the continuing
or surviving corporation, (c) any reorganization, consolidation or merger
of the Corporation in which the Corporation is the continuing or surviving
corporation and pursuant to which equity securities of the Corporation
would be converted into cash, securities or other property, or (d) any sale
or other transfer of all or substantially all of the Corporation's assets
(in one transaction or a series of related transactions) (which events are
collectively referred to as the "Transaction"), the Committee may, in its
discretion, recommend that the Board take any of the following actions as a
result of, in
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anticipation of or in connection with the Transaction to assure that the
Participants in the Plan are accorded fair and equitable treatment in the
Transaction:
(i) Accelerate the time period or periods for purposes of vesting
all rights in or accelerating the exercisability of any outstanding
Option under the Plan that has not previously vested or is not then
exercisable; or
(ii) Make such other adjustments or modifications to outstanding
Options as the Committee deems appropriate to maintain and protect the
rights and interests of the Participants in the Plan in connection with
or following the Transaction, including, without limitation,
substituting new Options (whether incentive stock options or
nonstatutory stock options) for any of such outstanding Options and
taking such action as may be necessary or appropriate to maintain and
protect the federal and state income tax benefits expected to be
obtained by Participants pursuant to the Plan.
Any such action approved by the Board shall be conclusive and binding on
the Company and all Participants of the Plan."
II. The 1993 Stock Option Plan is hereby amended as follows:
A. Section 7.8 is amended to read in its entirety as follows:
"Section 7.8 Termination of Employment Due to Death, Disability,
Retirement or Otherwise. In the event that the employment of a Participant
is terminated by reason of death, Disability or Retirement, or in the event
the employment of a Participant is terminated for any reason other than
death, Disability or Retirement, the rights under then outstanding Options
granted pursuant to the Plan shall terminate upon the expiration date of
each such Option or three months after such date of termination of
employment, whichever first occurs; provided that in the event that the
employment of a Participant is terminated by reason of death, Disability or
Retirement (provided, in the case of Retirement, that such Participant has
not attained the age of 60 years), the rights under then outstanding
nonstatutory stock options granted pursuant to the Plan shall terminate
upon the expiration date of each such nonstatutory stock option or twelve
months after such date of termination of employment, whichever first
occurs; and provided, further, that in the event that the employment of a
Participant is terminated by reason of Retirement (provided that such
Participant has attained the age of 60 years), the rights under then
outstanding nonstatutory stock options granted pursuant to the Plan shall
terminate upon the expiration date of each such nonstatutory stock option
or three years after such date of termination of employment, whichever
first occurs."
B. Section 7.9 is amended to read in its entirety as follows:
"Section 7.9 Nontransferability of Options. During a Participant's
lifetime, incentive stock options granted to him under the Plan are
exercisable solely by such Participant. No Option granted under the Plan
may be sold, transferred, pledged, or assigned, or otherwise alienated or
hypothecated by a Participant, except that the Committee, in its
discretion, may amend any stock option agreement relating to any
outstanding nonstatutory stock option (i) to provide that such nonstatutory
stock option may be transferred by a Participant to members of such
Participant's immediate family, trusts for the benefit of such family
members and/or partnerships whose partners are such family members, but
such transferees may not transfer such nonstatutory stock options to third
parties, (ii) to provide that nonstatutory stock options amended by the
Committee in the manner described in (i) above shall be subject to all
other conditions and restrictions applicable to Options granted under the
Plan prior to such transfer and (iii) to set forth in such stock option
agreement the restrictions on transfer described in (i) and (ii) above, as
well as any other restriction necessary to render the Options not subject
to being transferred in accordance with this Section 7.9 to be exempt
pursuant to Rule 16b-3 of the Securities Exchange Act of 1934."
C. Section 7.10 is deleted in its entirety.
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D. Section 10 is amended to read in its entirety as follows:
"Section 10 Merger or Consolidation.
Section 10.1 Treatment of Options. In the event of (a) a dissolution
or a liquidation of the Corporation, (b) any reorganization, consolidation
or merger of the Corporation in which the Corporation is not the continuing
or surviving corporation, (c) any reorganization, consolidation or merger
of the Corporation in which the Corporation is the continuing or surviving
corporation and pursuant to which equity securities of the Corporation
would be converted into cash, securities or other property, or (d) any sale
or other transfer of all or substantially all of the Corporation's assets
(in one transaction or a series of related transactions) (which events are
collectively referred to as the "Transaction"), the Committee may, in its
discretion, recommend that the Board take any of the following actions as a
result of, in anticipation of or in connection with the Transaction to
assure that the Participants of the Plan are accorded fair and equitable
treatment in the Transaction:
(i) Accelerate the time period or periods for purposes of vesting
all rights in or accelerating the exercisability of any outstanding
Option under the Plan that has not previously vested or is not then
exercisable; or
(ii) Make such other adjustments or modifications to outstanding
Options as the Committee deems appropriate to maintain and protect the
rights and interests of the Participants in the Plan in connection with
or following the Transaction, including, without limitation,
substituting new Options (whether incentive stock options or
nonstatutory stock options) for any of such outstanding Options and
taking such action as may be necessary or appropriate to maintain and
protect the federal and state income tax benefits expected to be
obtained by Participants pursuant to the Plan.
Any such action approved by the Board shall be conclusive and binding on
the Company and all Participants of the Plan."
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APPENDIX A
SOUTHTRUST CORPORATION
BIRMINGHAM, ALABAMA
PROXY FOR THE ANNUAL MEETING OF STOCKHOLDERS
APRIL 19, 1995
(THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF THE COMPANY)
The undersigned hereby appoints J. Reese Murray and William O. Vann,
and each of them, with full power of substitution, proxies to vote the shares of
Common Stock of SouthTrust Corporation (the "Company") which the undersigned
could vote if personally present at the Annual Meeting of Stockholders of the
Company to be held in the auditorium on the eighth floor of the SouthTrust
Tower, 420 North 20th Street, Birmingham, Alabama, on April 19, 1995, at
9:00 A.M., Central Time, or any adjournment thereof:
1. ELECTION OF DIRECTORS:
[ ] FOR all nominees below [ ] WITHHOLD AUTHORITY to
(except as indicated to vote for all nominees
the contrary below) below
John M. Bradford, William C. Hulsey, Wallace D. Malone, Jr.
INSTRUCTION: To withhold authority to vote for an individual nominee,
write that nominee's name in the space provided below.
----------------------------------------------------------------------
2. AMENDMENT OF STOCK OPTION PLANS:
[ ] FOR [ ] AGAINST [ ] ABSTAIN respecting a proposal
to amend the 1984 Stock Option Plan and the 1993 Stock Option Plan
in the manner described in the accompanying Proxy Statement of the
Company.
3. OTHER MATTERS:
In their discretion, upon such other matters as may properly
come before the Annual Meeting of Stockholders.
<PAGE> 23
THIS PROXY WILL BE VOTED IN ACCORDANCE WITH YOUR INSTRUCTIONS, AND IF NO
INSTRUCTIONS ARE GIVEN, THIS PROXY WILL BE VOTED FOR THE ELECTION OF THE
PERSONS NOMINATED BY THE BOARD OF DIRECTORS AS DIRECTORS AND FOR THE AMENDMENT
OF THE STOCK OPTION PLANS.
Dated:
-----------------------------------------
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(Signature(s) of Stockholder(s))
(Please date and sign as name appears on proxy.
If shares are held jointly, each stockholder should
sign. Executors, administrators, trustees, etc.
should use full title and, if more than one, all
should sign. If the stockholder is a corporation,
please sign full corporate name by an authorized
officer.)
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