<PAGE> 1
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
<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] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[ ] Fee paid previously with preliminary materials:
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
<PAGE> 2
'(SOUTHTRUST CORPORATION LOGO)'
420 NORTH 20TH STREET
BIRMINGHAM, ALABAMA 35203
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON APRIL 15, 1998
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 15, 1998, 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 Restated Certificate of Incorporation of the Company
to increase the number of shares of Common Stock authorized for issuance
from 300,000,000 to 500,000,000 shares;
(3) To amend the Long-Term Incentive Plan of the Company; and
(4) 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 27, 1998 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
/s/ Aubrey D. Barnard
AUBREY D. BARNARD
Secretary
Birmingham, Alabama
March 10, 1998
<PAGE> 3
'(SOUTHTRUST CORPORATION LOGO)'
---------------------
PROXY STATEMENT
FOR THE ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON APRIL 15, 1998
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 15, 1998 at 9:00 A.M., Central
Time. It is anticipated that this proxy material will be mailed to stockholders
on or about March 10, 1998.
All share amounts set forth in this document (including amounts as of
December 31, 1997) have been adjusted to reflect a 3 for 2 split of the Common
Stock of the Company that was effective on February 26, 1998.
The matters to be considered at the Annual Meeting are (i) the election of
three directors to serve for the term of office described below, (ii) the
amendment of the Restated Certificate of Incorporation of the Company to
increase the number of shares of the Common Stock authorized for issuance from
300,000,000 to 500,000,000 shares and (iii) the amendment of the Long-Term
Incentive Plan of the Company. 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 (i) the
election of the three nominees named herein as directors, (ii) the approval of
the amendment to the Restated Certificate of Incorporation of the Company, and
(iii) the approval of the amendment to the Long-Term Incentive Plan of the
Company. A proxy may be revoked at any time prior to its exercise by filing with
the Secretary of the Company either an instrument revoking the proxy or a duly
executed proxy bearing a later date or by attending the Annual Meeting and
voting in person. Attendance at the Annual Meeting by itself will not revoke a
proxy.
All expenses of solicitation of proxies 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. In
addition, the Company has retained Morrow & Co., Inc. to assist in the
solicitation of proxies and anticipates that it will incur fees of $7,500,
excluding out-of-pocket costs, for this service. 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.
As of February 27, 1998, the record date for the Annual Meeting, there were
issued and outstanding 160,420,982 shares of Common Stock of the Company. The
holders of each such issued and outstanding share of Common Stock of the Company
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 the holders of a majority of the
issued and 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) any required 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 or (iii) the
record holder has indicated that it does not have authority to vote such shares
on that matter) will be treated as present for purposes of determining a quorum.
Since the election of directors is determined by a majority of the votes cast at
the Annual Meeting, abstentions and broker non-votes will not affect such
<PAGE> 4
election. However, since 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 amendment to the Restated Certificate of Incorporation
of the Company, and the affirmative vote of the holders of a majority of the
shares of the Common Stock present in person or by proxy at the Annual Meeting
is required for the adoption of the proposed amendment to the Long-Term
Incentive Plan, abstentions and broker non-votes will have the effect of
negative votes with respect to these matters.
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 eleven
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 2001 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 nominee first became a director of the Company, and the
number and percentage of shares of the Company's Common Stock owned beneficially
by each nominee as of December 31, 1997 are as follows:
<TABLE>
<CAPTION>
NUMBER AND PERCENT
OF SHARES OF COMMON
STOCK OF THE COMPANY
NAME, AGE AND PRINCIPAL DIRECTOR BENEFICIALLY OWNED AS
OCCUPATION OF NOMINEES SINCE OF DECEMBER 31, 1997(1)
- ----------------------- --------------- -----------------------
<S> <C> <C>
John M. Bradford (59)........................... April 23, 1987 39,048(2)
Chairman, President and 0.03%
Chief Executive Officer,
Mrs. Stratton's Salads, Inc.
(processor of prepared salads)
William C. Hulsey (59).......................... April 16, 1986 1,302,535(3)
Chairman and Chief Executive 0.84%
Officer, Arlington Properties, Inc.
(real estate development)
Wallace D. Malone, Jr. (61)..................... August 2, 1972 2,356,588(4)
Chairman, President and 1.52%
Chief Executive Officer
of the Company
</TABLE>
- ---------------
(1) Share amounts reflect adjustment for a 3 for 2 split of the Common Stock of
the Company effective on February 26, 1998.
(2) Includes 12,600 shares held by Mr. Bradford's wife.
(3) Includes 18,000 shares held by Mr. Hulsey's wife, 9,961 shares held in a
custodial capacity by Mr. Hulsey's wife and 1,149,525 shares held by various
trusts of which Mr. Hulsey is a co-trustee.
(4) Includes 43,875 shares held by Mr. Malone's wife, 337,111 shares subject to
employee stock options exercisable within 60 days after December 31, 1997
and 446,958 shares held in Mr. Malone's account by the trustee of SouthTrust
Corporation's Employee 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.
2
<PAGE> 5
Each of the nominees was elected as a director at the 1995 Annual Meeting
of Stockholders.
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.
CONTINUING DIRECTORS
The following tabulation sets forth certain information with respect to
those persons who were elected as directors of the Company at previous Annual
Meetings of Stockholders or otherwise (and who will continue to serve as
directors following the Annual Meeting):
<TABLE>
<CAPTION>
NUMBER AND PERCENT OF
SHARES OF COMMON
CURRENT STOCK OF THE COMPANY
NAME, AGE AND TERM DIRECTOR BENEFICIALLY OWNED AS
PRINCIPAL OCCUPATION EXPIRES SINCE OF DECEMBER 31, 1997(1)
- -------------------- ------- ----------------- -----------------------
<S> <C> <C> <C>
Carl F. Bailey (67).................. 1999 October 16, 1996 30,379
President, BDI 0.02%
(beverage distributor)
Formerly Chairman and
Chief Executive Officer,
South Central Bell Telephone Co.
(telephone and communications)
H. Allen Franklin (53)............... 1999 April 20, 1994 8,902
Chairman and Chief Executive 0.01%
Officer, Georgia Power Company
(electric utility)
Rex J. Lysinger (60)................. 1999 December 18, 1996 4,407
Management Consultant 0.00%
Formerly Chairman and
Chief Executive Officer,
Energen Corporation
(diversified energy company)
and Alabama Gas
Corporation (gas utility)
Julian W. Banton (57)................ 1999 July 16, 1997 289,240(2)
President and Chief Executive 0.19%
Officer of SouthTrust Bank,
National Association
F. Crowder Falls (64)................ 2000 July 19, 1995 4,728(3)
Business Consultant 0.00%
Formerly Carolinas
Managing Partner,
KPMG Peat Marwick
LLP (accountants)
Allen J. Keesler, Jr. (59)........... 2000 January 15, 1992 15,631(4)
Management Consultant 0.01%
Formerly President and
Chief Executive Officer,
Florida Power Corporation
(electric utility)
</TABLE>
3
<PAGE> 6
<TABLE>
<CAPTION>
NUMBER AND PERCENT OF
SHARES OF COMMON
CURRENT STOCK OF THE COMPANY
NAME, AGE AND TERM DIRECTOR BENEFICIALLY OWNED AS
PRINCIPAL OCCUPATION EXPIRES SINCE OF DECEMBER 31, 1997(1)
- -------------------- ------- ----------------- -----------------------
<S> <C> <C> <C>
Van L. Richey (48)................... 2000 December 18, 1996 6,684
President and Chief Executive 0.00%
Officer, American Cast Iron Pipe
Co. (cast iron pipe manufacturer)
William K. Upchurch, Jr. (65)........ 2000 April 23, 1987 75,636(5)
Chairman and Chief Executive 0.05%
Officer, W. K. Upchurch
Construction Company, Inc.
(construction business)
</TABLE>
- ---------------
(1) Share amounts reflect adjustment for a 3 for 2 split of the Common Stock of
the Company effective on February 26, 1998.
(2) Includes 189,799 shares subject to stock options exercisable within 60 days
after December 31, 1997.
(3) Includes 2,275 shares held by Mr. Falls' wife and 750 shares held by a trust
of which Mr. Falls is a co-trustee.
(4) Includes 2,250 shares held by Mr. Keesler's wife.
(5) Includes 3,659 shares held by trusts of which Mr. Upchurch is custodian and
12,122 shares held by Mr. Upchurch's wife.
Of the directors named above, Messrs. Falls, Keesler, Richey and Upchurch
were elected at the 1997 Annual Meeting of Stockholders, Mr. Franklin was
elected at the 1996 Annual Meeting of Stockholders and Messrs. Bailey, Lysinger
and Banton were elected by the Board of Directors on October 16, 1996, December
18, 1996 and July 16, 1997, respectively, to fill vacancies on the Board of
Directors. All of such persons are to serve for the terms indicated.
Mr. Franklin is a director of The Southern Company, Mr. Richey is a
director of Citation Corporation and Mr. Lysinger is a director of the Energen
Corporation. All of such corporations have securities registered under the
Securities Exchange Act of 1934.
The Company has an Audit Committee of the Board of Directors, consisting of
Messrs. Keesler and Richey, 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 four meetings during 1997. Mr. Keesler serves as Chairman of the
Audit Committee.
The Company has a Human Resources Committee of the Board of Directors,
consisting of Messrs. Bailey, Franklin and Hulsey (with Mr. Bailey serving as
Chairman), which sets compensation for the executive officers of the Company and
administers the employee benefit plans of the Company, including the 1990
Discounted Stock Plan, the Senior Officer Performance Incentive Plan and the
Long-Term Incentive Plan (including the predecessor stock option plans). The
Human Resources Committee held five meetings during 1997.
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, 1997, the Board of Directors held five
regular and special meetings. Directors of the Company are paid $3,500 per
calendar quarter and $2,500 per meeting. Directors who are also employees of the
Company are not compensated for their service as directors or for attendance at
meetings of
4
<PAGE> 7
the Board of Directors. All directors attended more than 75% of the meetings of
the Board of Directors (including any meetings of any committee thereof of which
they are members).
STOCK OWNERSHIP OF CERTAIN EXECUTIVE OFFICERS
The following tabulation sets forth certain information as of the date
indicated with respect to those executive officers of the Company and its
subsidiaries (who are not also directors of the Company), including the number
and percentage of shares of the Company's Common Stock owned beneficially by
each such person, and with respect to all executive officers and directors of
the Company as a group:
<TABLE>
<CAPTION>
NUMBER AND PERCENT OF
SHARES OF COMMON
STOCK OF THE COMPANY
POSITION BENEFICIALLY OWNED AS
NAME AND AGE HELD OF DECEMBER 31,
OF EXECUTIVE OFFICER(1) OFFICE(2) SINCE 1997(3)
- ----------------------- ------------------------ ----------------- ---------------------
<S> <C> <C> <C>
Thomas H. Coley (55).... Executive Vice President July 1, 1989 89,739(4)
of SouthTrust Bank, 0.06%
National Association
Frederick W. Murray,
Jr.(5) (59)........... Executive Vice President January 1, 1980 249,829(6)
of the Company 0.16%
James W. Rainer, Jr.
(54).................. Executive Vice President December 15, 1982 248,904(7)
of the Company 0.16%
All Executive Officers
and Directors as a
Group (15 persons).... N/A N/A 4,879,791
3.15%
</TABLE>
- ---------------
(1) Information with respect to Wallace D. Malone, Jr., Chairman, President and
Chief Executive Officer of the Company, and with respect to Julian W.
Banton, President and Chief Executive Officer of SouthTrust Bank, National
Association, is set forth in the preceding table.
(2) All officers of the Company and its subsidiaries are elected annually by the
Board of Directors of the Company or the subsidiary.
(3) Shares amounts reflect adjustment for a 3 for 2 split of the Common Stock of
the Company effective on February 26, 1998.
(4) Includes 78,936 shares subject to stock options exercisable within 60 days
after December 31, 1997.
(5) Mr. Murray resigned as Executive Vice President effective February 28, 1998,
but will continue on a part-time basis for a transition period.
(6) Includes 34,500 shares held by Mr. Murray's wife, 1,188 shares held in a
custodial capacity, 118,765 shares subject to stock options exercisable
within 60 days after December 31, 1997 and 74,452 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 9,606 shares held by Mr. Rainer's wife, 98,553 shares subject to
stock options exercisable within 60 days after December 31, 1997 and 25,663
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.
AMENDMENT TO THE RESTATED CERTIFICATE OF INCORPORATION
The Board of Directors of the Company has adopted a resolution recommending
that the first paragraph of Article FOURTH of the Restated Certificate of
Incorporation of the Company be amended to increase the authorized number of
shares of Common Stock from 300,000,000 to 500,000,000 shares. Under the
Restated
5
<PAGE> 8
Certificate of Incorporation of the Company, the holders of the Common Stock are
not entitled to preemptive rights.
If the proposed amendment is adopted, the additional authorized shares may
be issued by the Board of Directors without any further action or approval by
the stockholders of the Company. The Company may issue the additional authorized
shares of Common Stock in connection with stock dividends or splits, employee
benefit plans, the acquisition of financial institutions and other entities or
the generation of additional capital for the Company. If the Company were to
issue a significant number of the newly authorized shares of Common Stock, it is
possible that the ownership interest of the current stockholders of the Company
could be diluted and, depending upon the circumstances of such issuance, it is
possible that the earnings per share and book value per share of the currently
outstanding shares of Common Stock could be diluted. As of the date of the Proxy
Statement, and other than effecting a 3 for 2 split of its shares of Common
Stock, effective on February 26, 1998, the Company has no plans to issue any
shares of Common Stock, except that (i) the Company expects to issue shares of
Common Stock pursuant to the Long-Term Incentive Plan, (ii) the Company in the
past has issued shares of Common Stock to fund other employee benefit plans of
the Company, and expects to continue to do so, and (iii) the Company has engaged
in the acquisition of financial institutions and, at any particular time,
including the date of the Proxy Statement, the Company is a party to various
agreements and/or letters of intent providing for the acquisition of such
entities in exchange for shares of Common Stock of the Company and expects this
acquisition program to continue in the future.
Authorization of additional shares of Common Stock may have an
anti-takeover effect since such shares, which can be issued by the Board of
Directors without further stockholder approval, could be used to discourage
attempts by third parties to obtain control of the Company. The Board of
Directors is unaware of any third party currently attempting to gain control of
the Company.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE PROPOSED AMENDMENT TO THE
RESTATED CERTIFICATE OF INCORPORATION TO INCREASE THE AUTHORIZED COMMON STOCK.
AMENDMENT TO THE SOUTHTRUST CORPORATION
LONG-TERM INCENTIVE PLAN
The Board of Directors of the Company has recommended that Section 4.1(a)
of the SouthTrust Corporation Long-Term Incentive Plan be amended to increase
the maximum aggregate number of shares of Common Stock which may be granted,
paid out, or which may vest, as applicable, pursuant to any award granted in any
one fiscal year to any single participant from 450,000 to 1,125,000 shares, in
each case after adjustment for a 3 for 2 split of the Common Stock of the
Company effective on February 26, 1998.
The amendment to the Long-Term Incentive Plan will provide the Company with
greater flexibility in compensating officers of the Company in furtherance of
the goals of the Long-Term Incentive Plan. The goals are to (i) attract and
retain key executive and managerial employees, (ii) motivate such employees by
means of growth-related incentives, (iii) provide incentive compensation
opportunities that are competitive with those of other major corporations and
(iv) further align the interests of such employees with the stockholders of the
Company.
The Board of Directors has approved various awards to Mr. Wallace D.
Malone, Jr. Under Mr. Malone's leadership, the Company has achieved
extraordinary results, particularly in terms of significant and sustained
increases in stockholder value. To ensure, to the extent possible, that Mr.
Malone remains in his current capacity for at least five more years, the Human
Resources Committee of the Board of Directors and the Board of Directors have
made a series of awards to Mr. Malone, as described below.
Subject to stockholder approval of the above amendment to the Long-Term
Incentive Plan, the Human Resources Committee and the Board of Directors have
granted to Mr. Malone a Non-Qualified Stock Option covering 500,000 (750,000
after giving effect to the 3 for 2 split of the Common Stock of the Company
effective on February 26, 1998) shares of Common Stock of the Company,
exercisable at the fair market value of the Common Stock as of the date the
option was approved by the Human Resources Committee and the
6
<PAGE> 9
Board of Directors (such price is subject to adjustment to reflect the
aforementioned stock split). Mr. Malone's rights under the option shall vest
incrementally (20% each year) for a period of five years. In the event that Mr.
Malone retires or leaves the Company voluntarily or is terminated for cause,
then any right to any unvested portion of the stock option will terminate in
accordance with the provisions of the Long-Term Incentive Plan. Mr. Malone's
rights as to the stock option shall become 100% vested upon a change of control
of the Company (as defined in the Long-Term Incentive Plan) or upon his death or
disability.
The Human Resources Committee and the Board of Directors also have approved
the contribution of an amount equal to the value of 200,000 (300,000 after
giving effect to the 3 for 2 stock split of the Common Stock of the Company
effective February 26, 1998) shares of Common Stock of the Company (based on the
fair market value of the shares on the date of the action approving such
contribution subject to adjustment to reflect the aforementioned stock split) to
a deferred compensation plan for the benefit of Mr. Malone. Mr. Malone's rights
to receive any portion of the funds in the plan will not vest until the later to
occur of (i) five years after the date of the Company's contribution to the plan
or (ii) the first date of the fiscal year that next follows the date Mr. Malone
is no longer Chief Executive Officer of the Company. In the event that Mr.
Malone is terminated for cause or voluntarily leaves the Company, any unvested
rights under the deferred compensation plan will be terminated. Mr. Malone will
be immediately entitled to the entire value in such plan in the event of a
change of control in the Company (as defined in the Long-Term Incentive Plan) or
in the event of his death or disability.
The Human Resources Committee of the Board of Directors also have approved
the procurement of a $15,000,000 insurance policy on the life of Mr. Malone. The
Company will pay the requisite premiums for such policy and will have an
interest in such policy to the extent of such premium payments.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE PROPOSAL TO APPROVE THE
AMENDMENT TO THE LONG-TERM INCENTIVE PLAN.
EXECUTIVE COMPENSATION
The following information provides certain details concerning the cash and
equity-based compensation payable to certain executives of the Company as well
as certain other information.
FIVE YEAR TOTAL STOCKHOLDER RETURN
The following indexed graph compares the Company's annual percentage change
in cumulative total stockholders' 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, 1992, and that dividends received were immediately reinvested in
additional shares. The graph depicts 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.
7
<PAGE> 10
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN
SOUTHTRUST CORPORATION
(PERFORMANCE THROUGH DECEMBER 31, 1997)
<TABLE>
<CAPTION>
MEASUREMENT PERIOD S&P MARKET
(FISCAL YEAR COVERED) SOUTHTRUST S&P 500 REGIONAL BANKS
<S> <C> <C> <C>
12/92 100 100 100
12/93 116 110 105
12/94 114 112 100
12/95 168 153 154
12/96 236 188 208
12/97 438 251 324
</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
motivate executives to produce superior performance for the Company and to
provide superior returns to stockholders of the Company.
An executive's compensation is established after a careful review of
competitive practices to ensure that the total compensation opportunity afforded
such executive compares favorably to similarly situated executives. A
significant portion of an 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 and, in the case of certain other
executives of the Company, by annual cash bonuses under a similar incentive
plan, the amount and criterion of which are established in advance by the Human
Resources Committee. The Long-Term Incentive Plan (and prior to its adoption,
predecessor stock option plans of the Company) is the principal mechanism for
rewarding executives for the long-term performance of the Company.
8
<PAGE> 11
The following is a description of the compensation programs of the Company
and the manner in which such plans relate 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 executives of peer institutions. In doing so, the
Human Resources Committee seeks to ensure that the base salary 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. These surveys
indicated that the 1997 base salaries of the executives of the Company listed in
the Summary Compensation Table in general approximated the average base salary
for comparable executives of the peer institutions described below.
The Human Resources Committee considers the Company's peer institutions to
be southeastern banks and bank holding companies with total assets ranging from
$10 to $50 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 are of an asset size that is
significant but not greatly in excess of the Company's asset size. In
establishing the 1997 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 executives of the Company listed in the Summary Compensation
Table were at approximately the 50th percentile of the array of base salaries
reported by such peer institutions.
Annual Incentive Compensation
The Senior Officer Performance Incentive Plan is designed to reward senior
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 such year.
With respect to the executive officers named in the Summary Compensation
Table, the potential incentive award for each executive under the Senior Officer
Performance Incentive Plan 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 1997, the range of potential awards for such executives under
such plan was between 20% and 100% 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 of the Company 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 1997
under the Senior Officer Performance Incentive Plan are set forth in the Annual
Compensation-Bonus column of the Summary Compensation Table.
Long-Term Incentive Compensation
The Long-Term Incentive Plan of the Company makes available to the Human
Resources Committee various methods of compensating and awarding executives of
the Company, including the grant or award of
9
<PAGE> 12
stock options, stock appreciation rights, restricted stock and performance
units/shares. The various grants or awards under the Long-Term Incentive Plan
are used by the Human Resources Committee to reward management decisions that
result in the long-term success of the Company. The Long-Term Incentive Plan was
adopted in 1996 by the Company, and except for outstanding grants of stock
options, replaced the predecessor stock option plans of the Company.
The Human Resources Committee believes that stock ownership encourages and
rewards management decisions that result in the long-term success of the
Company. In the past, stock options have been one of the Company's principal
long-term incentive mechanisms, and the Human Resources Committee anticipates
that the various stock ownership mechanisms offered by the Long-Term Incentive
Plan will be used to further such stock ownership by executives.
Stock Options and Purchase Rights. The value of stock options is dependent
upon an appreciation in the value of the underlying shares of Common Stock. 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
grant of stock options, and the Human Resources Committee then grants stock
options to particular executives. The number of shares of Common Stock subject
to options granted 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.
Information respecting the peer institutions described above indicates that
the shares of Common Stock subject to stock options granted to the Company's
five most highly compensated executives during 1997 in general approximated the
average grants reported with respect to comparable executives of peer
institutions of comparable size to the Company. In addition, the total number of
shares of Common Stock subject to outstanding stock options as of September 30,
1997, as a percentage of the Company's then total outstanding Common Stock, is
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 as a vehicle for executive
compensation.
Other Stock-Based Incentive Compensation. Under the Long-Term Incentive
Plan, one of the mechanisms available to the Human Resources Committee is the
award of performance units/shares. The number of performance units/shares
granted to a particular executive, as well as the vesting of such performance
units/shares, is contingent upon certain performance goals and/or conditions
being met over a period of time. The Human Resources Committee determines
whether and to what extent the grants have been earned; such grants are payable
in cash, shares of Common Stock of the Company or a combination thereof, as
specified in the grant, with the fair market value of performance units/shares
(based on the then trading value of the Company's Common Stock) being determined
as of the payment date.
The percentage of the shares of Common Stock of the Company subject to
outstanding grants of performance units/shares as of December 31, 1997
approximates the median percentage reported by peer institutions of comparable
size to the Company.
Under the Omnibus Budget Reconciliation Act of 1993 ("OBRA"), Congress has
limited to $1 million per year the tax deduction available to public companies
for certain compensation paid to designated executive officers. The regulations
provide an exception from this limitation for certain performance-based
compensation, assuming that various requirements are met, and provide for
certain transition rules. To the extent feasible, the Human Resources Committee
of the Company intends that awards of compensation under its various incentive
plans to its executive officers qualify for deductibility under OBRA, but the
Human Resources Committee and the Board of Directors of the Company reserve the
right, in light of the overall goals and objectives of the Company, to exceed
such limitation if it is determined to be in the best interest of the Company
and its stockholders.
10
<PAGE> 13
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 1997 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 giving substantially the same weight to 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 1997. The Chief Executive Officer's base
salary for 1997 was at approximately the 75th percentile of the array of
salaries for chief executive officers of all peer institutions as reported by
such institutions.
For 1997, the Chief Executive Officer was entitled to receive under the
Senior Officer Performance Incentive Plan an incentive award equal to 66% of
base salary if the target award for Company's net income was achieved. Since the
Company's 1997 net income exceeded the target goal established by the Human
Resources Committee, the incentive award paid the Chief Executive Officer under
the Senior Officer Performance Incentive Plan was equal to 100% of base salary.
In addition, due to the Company's performance in 1997, a supplemental bonus was
awarded to Mr. Malone by the Human Resources Committee.
During 1997, the Chief Executive Officer was granted options to purchase
135,000 shares of Common Stock and granted 15,000 performance units/shares, in
each case after giving effect to the 3 for 2 split of the Common Stock of the
Company effective February 26, 1998. The 1997 stock option award was increased
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
1997 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. The 1997 grant of the performance units/shares to the Chief
Executive Officer is for a 36 month performance period beginning on January 1,
1997, and ending December 31, 1999. The amount of the payment will vary
depending upon the performance attained. Due to the extraordinary performance of
the Company, the amount of the payment made or accrued in 1997 to the Chief
Executive Officer in 1997 in respect of performance units/shares, when compared
to other peer institutions and weighted in terms of a percentage of base salary,
is somewhat above average to that reported by peer institutions of comparable
size to the Company.
For information regarding a Non-Qualified Stock Option granted to Mr.
Malone in 1998, which is designed to encourage Mr. Malone to remain in his
current capacity with the Company for at least five years, see Amendment to the
Long-Term Incentive Plan. If the pro rata portion of this award were combined
with his other annual grants for 1997, then the awards granted to Mr. Malone,
when compared to the awards, as granted to chief executive officers reported by
peer institutions of comparable size to the Company, would be above average.
During 1997, the members of the Human Resources Committee were as follows:
Carl F. Bailey, Chairman
William C. Hulsey
H. Allen Franklin
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.
11
<PAGE> 14
SUMMARY COMPENSATION TABLE
The following Summary Compensation Table sets forth certain information
concerning compensation for services rendered to the Company by the Company's
Chief Executive Officer and the four other most highly compensated executive
officers of the Company for each of the last three fiscal years:
<TABLE>
<CAPTION>
LONG-TERM COMPENSATION
----------------------------------
AWARDS(1) PAYOUTS
----------------------- --------
OTHER RESTRICTED
ANNUAL COMPENSATION(2) ANNUAL STOCK OPTIONS LTIP ALL OTHER
------------------------------ COMPENSATION AWARD(S) (NUMBER PAYOUTS COMPENSATION
NAME AND PRINCIPAL POSITION YEAR SALARY($) BONUS($)(3) ($)(4) ($) OF SHARES) ($) ($)
- --------------------------- ---- --------- ----------- ------------ ---------- ---------- -------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Wallace D. Malone, Jr.,...... 1997 $800,016 $895,000 $11,044 N/A 135,000 $984,149 $70,082
Chief Executive Officer 1996 770,016 870,000 20,191 N/A 112,500 908,445(5) 69,569(6)
of the Company 1995 695,000 459,772 0 N/A 105,097 N/A 67,104(6)
Julian W. Banton,............ 1997 $344,350 $197,193 $ 0 N/A 37,500 $414,096 $30,316
President and Chief 1996 323,520 172,193 5,152 N/A 22,500 382,242(5) 28,130(7)
Executive Officer of 1995 323,500 177,925 0 N/A 22,500 N/A 31,168(7)
SouthTrust Bank,
National Association
Thomas H. Coley.............. 1997 $240,000 $118,440 $ 0 N/A 12,750 $306,538 $21,164
Chief Executive Officer 1996 240,000 118,440 0 N/A 12,750 282,958(5) 21,075(7)
of SouthTrust Bank, 1995 240,000 120,000 0 N/A 10,500 N/A 22,930(7)
National Association
Frederick W. Murray, Jr.,.... 1997 $214,000 $139,100 $ 0 N/A 12,750 $274,271 $18,955
Executive Vice President 1996 214,000 139,100 14,841 N/A 15,000 253,172(5) 17,511(7)
of the Company 1995 198,167 87,627 0 N/A 7,500 N/A 20,156(7)
James W. Rainer, Jr.,........ 1997 $204,000 $132,600 $ 0 N/A 12,300 $260,826 $18,080
Executive Vice President 1996 204,000 132,600 4,099 N/A 15,000 240,762(5) 17,238(7)
of the Company 1995 188,167 83,207 0 N/A 7,500 N/A 18,893(7)
</TABLE>
- ---------------
(1) Share amounts reflect adjustment for a 3 for 2 split of the Common Stock of
the Company effective February 26, 1998.
(2) 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.
(3) Represents amounts paid to each executive officer under the Senior Officer
Performance Incentive Plan or otherwise and applicable for 1997.
(4) Represents life insurance premiums and additional taxes owed on the
additional compensation paid by the Company on behalf of each executive
officer.
(5) Represents amount of award of performance units/shares under the Long-Term
Incentive Plan of the Company that was accrued by the Company during 1997.
(6) Includes (i) $30,000 for Mr. Malone, which amount was withheld by the
Company from deferred compensation due Mr. Malone in each of 1997, 1996 and
1995 in order to defray the costs of the Company agreeing to pay Mr. Malone
an annual sum, commencing at the age of 60 and continuing for the greater of
his lifetime or 15 years, (ii) payments by the Company to defined
contribution plans maintained by the Company (including qualified and
nonqualified compensation plans) and (iii) the value of certain insurance
coverage.
(7) 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 DISCOUNTED STOCK PLAN
Pursuant to the Long-Term Incentive Plan (and the predecessor stock option
plans of the Company), the Company grants to key employees of the Company either
incentive stock options ("ISO's") or Nonqualified Stock Options ("NQSO's"), and
pursuant to the 1990 Discounted Stock Plan (the "Discounted Plan"),
12
<PAGE> 15
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 has been, 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.
The Discounted Plan was established in order to give all employees an
opportunity to acquire 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 1,687,500 shares of Common Stock of the Company is
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 and rights during fiscal year 1997 to each executive officer listed
below:
OPTION AND RIGHT GRANTS IN FISCAL YEAR 1997
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
----------------------------------------------------------------------------------
% OF
TOTAL POTENTIAL REALIZABLE VALUE
OPTIONS EXERCISE ASSUMING RATES OF STOCK
OPTIONS GRANTED GRANTED OR BASE PRICE APPRECIATION OF
(NUMBER OF EMPLOYEES PRICE EXPIRATION ---------------------------
NAME SHARES)(1)(2)(3) IN 1997 ($/SH) DATE 5%(4) 10%(4)
- ---- ---------------- --------- -------- ---------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Wallace D. Malone,
Jr. ............... 135,000 19.1% 24.250 1-16-2007 $2,058,844 $5,217,516
Julian W. Banton..... 37,500 5.3 24.250 1-16-2007 571,901 1,449,310
Thomas H. Coley...... 12,750 1.8 24.250 1-16-2007 194,446 492,765
James W. Rainer,
Jr................. 12,300 1.7 24.250 1-16-2007 187,584 475,374
Frederick W. Murray.. 12,750 1.8 24.250 1-16-2007 194,446 492,765
</TABLE>
- ---------------
(1) Share amounts reflect adjustment for a 3 for 2 split of the Common Stock of
the Company effective on February 26, 1998.
(2) Does not include awards during 1997 under the Discounted Plan to Mr. Malone
to purchase 4,173 shares, Mr. Banton to purchase 1,500 shares, Mr. Coley to
purchase 963 shares, Mr. Rainer to purchase 819 shares and Mr. Murray to
purchase 859 shares of Common Stock, respectively, at a 17.5% discount to
the then market price of such shares; none of such persons purchased any
shares of Common Stock owned then under the Discounted Plan during 1997,
except for Mr. Banton who purchased 1,299 shares.
(3) Each of the options granted to the named executives in 1997 became
exercisable on January 16, 1998, 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.
(4) 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.
13
<PAGE> 16
The following table sets forth the number of stock options exercised and
the dollar value realized thereon by each of the executives listed below during
1997, along with the number and dollar value of any options remaining
unexercised at year end (share amounts reflect adjustment for a 3 for 2 split of
the Common Stock of the Company that will be effective on February 26, 1998):
AGGREGATED STOCK OPTION EXERCISES IN 1997
AND DECEMBER 31, 1997 OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF VALUE OF
SHARES UNEXERCISED
UNDERLYING IN-THE-MONEY
OPTIONS AT OPTIONS AT
NUMBER OF DECEMBER 31, DECEMBER 31,
SHARES 1997 1997
ACQUIRED EXERCISABLE/ EXERCISABLE/
NAME ON EXERCISE VALUE REALIZED UNEXERCISABLE(1) UNEXERCISABLE(1)
- ---- ----------- -------------- ---------------- ----------------
<S> <C> <C> <C> <C>
Wallace D. Malone, Jr............ 0 $ 0 467,988 $13,685,390
Julian W. Banton................. 26,095 619,880 189,799 5,540,664
Thomas H. Coley.................. 4,500 132,083 78,936 2,313,649
Frederick W. Murray, Jr.......... 0 0 118,765 3,779,444
James W. Rainer, Jr.............. 8,905 236,655 98,553 2,771,304
</TABLE>
- ---------------
(1) Includes options exercisable within 60 days of December 31, 1997, but
excludes options disposed of by gift as of such date. As of such date, all
options held by the persons named in the above table were exercisable.
The following tabulation sets forth certain information regarding the
number of performance units/shares or other rights granted under the Long-Term
Incentive Plan of the Company during 1997 (share amounts reflect adjustment for
a 3 for 2 split of the Common Stock of the Company effective on February 26,
1998):
LONG-TERM INCENTIVE PLANS -- GRANTS IN 1997
<TABLE>
<CAPTION>
ESTIMATED FUTURE PAYOUTS
PERFORMANCE UNDER NON-STOCK
NUMBER OF OR OTHER PRICE-BASED PLANS
SHARES, UNITS PERIOD UNTIL ----------------------------
OR OTHER MATURATION THRESHOLD TARGET MAXIMUM
NAME RIGHTS (#) OR PAYOUT (#) (#) (#)
- ---- ------------- ------------ --------- ------ -------
<S> <C> <C> <C> <C> <C>
Wallace D. Malone, Jr............... 15,000 36 months 7,500 15,000 45,000
Julian W. Banton.................... 6,000 36 months 3,000 6,000 18,000
Thomas H. Coley..................... 3,450 36 months 1,725 3,450 10,350
Frederick W. Murray, Jr............. 3,000 36 months 1,500 3,000 9,000
James W. Rainer, Jr................. 2,850 36 months 1,425 2,850 8,550
</TABLE>
EXECUTIVE EMPLOYMENT AGREEMENTS AND OTHER ARRANGEMENTS
The Company is a party to an employment agreement with Mr. Wallace D.
Malone, Jr. providing 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, and subject to being
automatically renewed for an additional period of one year, so that the term of
employment under the employment agreement always will be at least five years.
The employment agreement 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, or if the executive elects to terminate the
employment agreement for good reason, which is defined to include a change of
duties or certain relocations, or if, during a limited period following a change
of control of the Company, the executive elects to terminate the employment
agreement without any reason, the executive is entitled to receive annual
compensation, based upon the executive's annual base salary as in effect
immediately prior to such termination and the executive's highest annual bonus
for a specified period prior to such termination, for a period of five years.
14
<PAGE> 17
The Company or certain of its subsidiaries are parties to certain
agreements with Messrs. Banton, Coley, Murray and Rainer, as well as certain
other executive officers of the Company and its subsidiaries, that become
effective only upon a change of control of the Company, provide for employment
of such executive for a period of three years and provide that, if the executive
is terminated for any reason other than his death or disability or for cause,
such executives are entitled to receive annual compensation, based upon the
executive's annual base salary as in effect immediately prior to such
termination and the executive's highest annual bonus for a specified period
prior to such termination, for a period of three years.
The employment agreement with Mr. Malone, as well as the change of control
employment agreements with the other executives described above, provide that
additional payments will be made to such persons to reimburse them for any
excise taxes that may be owed in the event that payments under such agreements
exceed the limitations of Section 280G of the Code.
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, all of the contributions
of the Company with respect to Mr. Malone were made under the Additional
Retirement Plan. The Company also maintains certain deferred compensation and
similar agreements which pay Mr. Malone and others certain amounts upon
retirement.
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
- ------------ -------- -------- -------- -------- --------
<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*
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* 217,000* 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.
15
<PAGE> 18
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, 1997, credited years of service for each such
executive officer are as follows: Mr. Malone -- 39 years; Mr. Banton -- 15
years; Mr. Coley -- 10 years; Mr. Murray -- 33 years; and Mr. Rainer -- 33
years.
COMPLIANCE WITH SECTION 16(A) OF
THE SECURITIES 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
1997 all filing requirements applicable to its officers, directors and
stockholders were complied with in a timely manner.
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, 1997, 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 features unfavorable to the
Company.
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 1998. 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
15, 1998, to be included in the 1999 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
/s/ Aubrey D. Barnard
AUBREY D. BARNARD
Secretary
Birmingham, Alabama
March 10, 1998
16
<PAGE> 19
'(SOUTHTRUST CORPORATION LOGO)'
P.O. BOX 2554
BIRMINGHAM, ALABAMA 35290
(RECYCLE LOGO)
<PAGE> 20
APPENDIX
SOUTHTRUST CORPORATION
BIRMINGHAM, ALABAMA
PROXY FOR THE ANNUAL MEETING OF STOCKHOLDERS
APRIL 15, 1998
(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 15, 1998, at 9:00
A.M., Central Time, or any adjournment thereof.
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, THE AMENDMENT OF THE
RESTATED CERTIFICATE OF INCORPORATION AND THE APPROVAL OF THE AMENDMENTS TO THE
LONG-TERM INCENTIVE PLAN.
(continued and to be signed on other side)
- FOLD AND DETACH HERE -
<PAGE> 21
<TABLE>
<CAPTION>
PLEASE MARK
YOUR VOTES AS [X]
INDICATED IN
THIS EXAMPLE
<S> <C> <C>
1. ELECTION OF DIRECTORS. John M. Bradford, William C. Hulsey, 2. AMENDMENT OF RESTATED
and Wallace D. Malone, Jr. CERTIFICATE OF INCORPORATION:
respecting a proposal to amend
FOR WITHHOLD (INSTRUCTION: To withhold authority to vote for an the Restated Certificate of
all Nominees AUTHORITY individual nominee, write that nominee's name in the Incorporation of the Company,
below (except as to vote for all space provided below.) as described in the accompanying
indicated to the nominees Proxy Statement of the Company.
contrary below)
[ ] [ ] --------------------------------------------------
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
3. AMENDMENT OF THE LONG-TERM INCENTIVE PLAN: respecting a proposal to amend the 4. OTHER MATTERS:
Long-Term Incentive Plan, as described in the accompanying Proxy Statement of the In their discretion, upon such
Company. other matters as may properly
come before the Annual Meeting
of Stockholders.
FOR AGAINST ABSTAIN
[ ] [ ] [ ] 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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