<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 19, 2000
TO THE STOCKHOLDERS:
The Annual Meeting of Stockholders (the "Annual Meeting") of SouthTrust
Corporation ("SouthTrust") will be held in the auditorium on the eighth floor of
the SouthTrust Tower, 420 North 20th Street, Birmingham, Alabama, on Wednesday,
April 19, 2000, at 9:00 a.m. Central Time, for the following purposes:
(1) To elect four (4) persons to the Board of Directors of SouthTrust,
each person to serve a three-year term and until such person's
successor is duly elected and qualified;
(2) To approve and ratify the SouthTrust Corporation Discount Stock
Payroll Purchase Plan;
(3) To approve and ratify the Amended and Restated Long-Term Incentive
Plan;
(4) To approve and ratify the Amended and Restated 1993 Stock Option
Plan and the Amended and Restated 1984 Stock Option Plan; and
(5) To transact such other business as may properly come before the
Annual Meeting.
Holders of Common Stock of SouthTrust of record at the close of business on
February 25, 2000 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
VOTE THE ENCLOSED PROXY SO THAT SOUTHTRUST MAY BE ASSURED OF THE PRESENCE OF A
QUORUM AT THE ANNUAL MEETING. You are requested to complete, date, sign and
return the enclosed Proxy Card in the postage-paid envelope included for your
convenience, or, in the alternative, you may vote via the Internet at
www.proxyvote.com or by telephone at the number noted on the enclosed voting
information form. Submitting your proxy with the Proxy Card, via the Internet or
by telephone will not affect your right to vote in person should you decide to
attend the Annual Meeting.
By Order of the Board of Directors
/s/ ALTON E. YOTHER
ALTON E. YOTHER
Secretary
Birmingham, Alabama
March 10, 2000
<PAGE> 3
(SOUTHTRUST CORPORATION LOGO)
---------------------
PROXY STATEMENT
FOR THE ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON APRIL 19, 2000
The accompanying proxy is solicited on behalf of the Board of Directors of
SouthTrust Corporation, a Delaware corporation ("SouthTrust"), for use at the
Annual Meeting of Stockholders (the "Annual Meeting") of SouthTrust to be held
in the auditorium on the eighth floor of the SouthTrust Tower, 420 North 20th
Street, Birmingham, Alabama, on Wednesday, April 19, 2000 at 9:00 a.m., Central
Time. It is anticipated that this proxy material will be mailed to stockholders
on or about March 10, 2000.
The matters to be considered at the Annual Meeting are (i) the election of
four directors, each person to serve a three-year term and until such person's
successor is duly elected and qualified; (ii) the approval and ratification of
the SouthTrust Corporation Discount Stock Payroll Purchase Plan; (iii) the
approval and ratification of the Amended and Restated Long-Term Incentive Plan;
and (iv) the approval and ratification of the Amended and Restated 1993 Stock
Option Plan and the Amended and Restated 1984 Stock Option Plan. All shares of
Common Stock represented by an executed and completed proxy received by
SouthTrust 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 four nominees named herein as
directors; (ii) the approval and ratification of the SouthTrust Corporation
Discount Stock Payroll Purchase Plan; (iii) the approval and ratification of the
Amended and Restated Long-Term Incentive Plan; and (iv) the approval and
ratification of the Amended and Restated 1993 Stock Option Plan and the Amended
and Restated 1984 Stock Option Plan. A proxy may be revoked at any time prior to
its exercise by filing with the Secretary of SouthTrust 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 SouthTrust.
SouthTrust 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
SouthTrust. In addition, SouthTrust 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
U.S. Postal System, proxies may be solicited by telephone, by telecopy, by other
electronic means or personally by the directors, officers and employees of
SouthTrust, who will receive no extra compensation for their services.
As of February 25, 2000, the record date for the Annual Meeting, there were
issued and outstanding 168,063,328 shares of Common Stock of SouthTrust. The
holders of each such issued and outstanding share of Common Stock of SouthTrust
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 SouthTrust 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 each of the matters to be voted on at the Annual Meeting
<PAGE> 4
is determined by a majority of the votes cast at the Annual Meeting, abstentions
and broker non-votes will not affect either the election of directors, the
approval and ratification of the SouthTrust Corporation Discount Stock Payroll
Purchase Plan, the approval and ratification of the Amended and Restated
Long-Term Incentive Plan, or the approval and ratification of the Amended and
Restated 1993 Stock Option Plan and the Amended and Restated 1984 Stock Option
Plan.
ELECTION OF DIRECTORS
The Restated Bylaws of SouthTrust provide for a Board of Directors of not
fewer than three nor more than sixteen members. The Restated Certificate of
Incorporation and the Restated Bylaws of SouthTrust 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
twelve persons.
CURRENT NOMINEES
The Board of Directors proposes to nominate the four persons named below
for election as directors, such persons to serve until the 2003 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 SouthTrust, and the
number and percentage of shares of SouthTrust's Common Stock owned beneficially
by each nominee as of December 31, 1999 are as follows:
<TABLE>
<CAPTION>
NUMBER AND PERCENT
OF SHARES OF COMMON
STOCK OF SOUTHTRUST
NAME, AGE AND PRINCIPAL DIRECTOR BENEFICIALLY OWNED AS
OCCUPATION OF NOMINEES SINCE OF DECEMBER 31, 1999
- ----------------------- ----------------- ---------------------
<S> <C> <C>
William A. Coley (56)........................... April 21, 1999 3,034*
Group President,
Duke Energy Corporation
(electric utility)
Allen J. Keesler, Jr. (61)...................... January 15, 1992 19,663(1)
Management Consultant 0.01%
Formerly President and Chief
Executive Officer, Florida
Power Corporation
(electric utility)
Van L. Richey (50).............................. December 18, 1996 8,935
President and Chief Executive 0.01%
Officer, American Cast Iron Pipe Co.
(cast iron pipe manufacturer)
William K. Upchurch, Jr. (67)................... April 23, 1987 81,644(2)
Chairman 0.05%
W.K. Upchurch
Construction Company, Inc.
(construction business)
</TABLE>
- ---------------
(1) Includes 3,750 shares held by Mr. Keesler's wife.
(2) Includes 3,798 shares held by trusts of which Mr. Upchurch's wife is
custodian and 12,606 shares held directly by Mr. Upchurch's wife.
* Indicates ownership of less than 0.01% of the outstanding SouthTrust Common
Stock.
2
<PAGE> 5
Messrs. Keesler, Richey and Upchurch were elected at the 1997 Annual
Meeting of Stockholders. Mr. Coley was elected by the Board of Directors on
April 21, 1999 to fill a vacancy on the Board created by the retirement of F.
Crowder Falls.
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 four persons.
THE BOARD OF DIRECTORS OF SOUTHTRUST 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 SouthTrust 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 SOUTHTRUST
NAME, AGE AND TERM DIRECTOR BENEFICIALLY OWNED AS
PRINCIPAL OCCUPATION EXPIRES SINCE OF DECEMBER 31, 1999
- -------------------- ------- ----------------- ---------------------
<S> <C> <C> <C>
Carl F. Bailey (69)..................... 2001 October 16, 1996 32,344
President, BDI 0.02%
(beverage distributor)
Formerly Chairman and
Chief Executive Officer,
South Central Bell Telephone Co.
(telephone and communications)
John M. Bradford (61)................... 2001 April 23, 1987 38,982(1)
Chairman, President and 0.02%
Chief Executive Officer,
Mrs. Stratton's Salads, Inc.
(processor of prepared salads)
William C. Hulsey (61).................. 2001 April 16, 1986 1,267,388(2)
Chairman and Chief Executive 0.74%
Officer, Arlington Properties, Inc.
(real estate development)
Wallace D. Malone, Jr. (63)............. 2001 August 2, 1972 3,308,024(3)
Chairman, President and 1.94%
Chief Executive Officer,
SouthTrust
Julian W. Banton (59)................... 2002 July 16, 1997 367,104(4)
President and Chief Executive 0.22%
Officer, SouthTrust Bank,
National Association (commercial
bank; subsidiary of SouthTrust)
H. Allen Franklin (55).................. 2002 April 20, 1994 12,988
President and Chief Operating 0.01%
Officer, Southern Company
(electric utility)
</TABLE>
3
<PAGE> 6
<TABLE>
<CAPTION>
NUMBER AND PERCENT OF
SHARES OF COMMON
CURRENT STOCK OF SOUTHTRUST
NAME, AGE AND TERM DIRECTOR BENEFICIALLY OWNED AS
PRINCIPAL OCCUPATION EXPIRES SINCE OF DECEMBER 31, 1999
- -------------------- ------- ----------------- ---------------------
<S> <C> <C> <C>
Donald M. James (51).................... 2002 December 16, 1998 3,915
Chairman and Chief Executive *
Officer, Vulcan Materials
Company (construction materials
and chemicals)
Rex J. Lysinger (62).................... 2002 December 18, 1996 6,564
Management Consultant *
Formerly Chairman and Chief
Executive Officer, Energen
Corporation (diversified energy
company) and Alabama Gas
Corporation (gas utility)
</TABLE>
- ---------------
(1) Includes 10,600 shares held by Mr. Bradford's wife.
(2) Includes 17,000 shares held by Mr. Hulsey's wife, 9,977 shares held in a
custodial capacity by Mr. Hulsey's wife and 1,108,290 shares held by various
trusts of which Mr. Hulsey is a co-trustee.
(3) Includes 44,537 shares held by Mr. Malone's wife, 457,500 shares held by a
limited partnership and 21,082 shares held in a trust, both over which Mr.
Malone exercises voting and dispositive power, 465,775 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, and 1,153,716 shares that are subject to
options exercisable within 60 days of December 31, 1999.
(4) Includes 26,673 shares that are owned by Mr. Banton's wife, and 288,660
shares that are subject to stock options exercisable within 60 days of
December 31, 1999.
* Indicates ownership of less than 0.01% of the outstanding SouthTrust Common
Stock.
Of the directors named above, Messrs. Bradford, Hulsey and Malone were
elected at the 1998 Annual Meeting of Stockholders, and Messrs. Franklin,
Bailey, Lysinger, Banton and James were elected at the 1999 Annual Meeting of
Stockholders. All of such persons are to serve for the terms indicated.
Mr. Bailey is a trustee of Colonial Properties Trust, Mr. Franklin is a
director of The Southern Company and Georgia Power Company, Mr. Lysinger and Mr.
Banton are both directors of Energen Corporation, Mr. James is a director of
Vulcan Materials Company and Protective Life Corporation, and Mr. Malone is a
director of Alabama Power Company. Each of these corporations has securities
registered under the Securities Exchange Act of 1934.
SouthTrust 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 SouthTrust's auditors and reviews the
audit plan, financial statements and audit results. The Audit Committee also
reviews the internal audit reports of SouthTrust and its affiliates and reviews
comments from the affiliates as to exceptions noted in the reports. The Audit
Committee held four meetings during 1999. Mr. Keesler serves as Chairman of the
Audit Committee.
SouthTrust 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 SouthTrust and
administers the employee benefit plans of SouthTrust, including the 1990
Discounted Stock Plan, the Amended and Restated Senior Officer Performance
Incentive Plan, the Amended and Restated Long-Term Incentive Plan (including the
predecessor stock option plans) and the Discount Stock Payroll Purchase Plan,
(subject to its approval by the stockholder at this Annual Meeting). The Human
Resources Committee held five meetings during 1999.
4
<PAGE> 7
SouthTrust does not have a 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, 1999, the Board of Directors held five
regular and special meetings. Directors of SouthTrust were paid $3,500 per
calendar quarter and, in addition, $3,000 per regular and special meeting
attended and $750 per committee meeting attended. Directors who are also
employees of SouthTrust are not compensated for their service as directors or
for attendance at meetings of the Board of Directors. Directors may receive
these fees in cash, or they may participate in two plans maintained by
SouthTrust with respect to director's fees. The Deferred Compensation Plan
allows directors to defer director's fees paid during the year until the earlier
of death or attainment of age 70. The Director's Stock Purchase Plan allows
directors to elect that all or any portion of their director's fees be used to
purchase SouthTrust Common Stock on the director's behalf through the SouthTrust
Corporation Dividend Reinvestment and Common Stock Purchase Plan. An amount
equal to 25% of the election amount is added to the election amount and used to
purchase SouthTrust Common Stock at the then market rate. All of the eligible
directors participate in the Director's Stock Purchase Plan. In addition, 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 SouthTrust and its
subsidiaries (who are not also directors of SouthTrust), including the number
and percentage of shares of SouthTrust's Common Stock owned beneficially by each
such person, and with respect to all executive officers and directors of
SouthTrust as a group:
<TABLE>
<CAPTION>
NUMBER AND PERCENT OF
SHARES OF COMMON
STOCK OF SOUTHTRUST
NAME AND AGE POSITION BENEFICIALLY OWNED AS
OF EXECUTIVE OFFICER(1) OFFICE(2) HELD SINCE OF DECEMBER 31, 1999
- ----------------------- ------------------------ ------------------- ---------------------
<S> <C> <C> <C>
Thomas H. Coley (57).... Executive Vice President July 1, 1989 134,464(3)
of SouthTrust Bank, 0.08%
National Association
James W. Rainer, Jr Executive Vice President December 15, 1982 257,237(4)
(56)..................
of SouthTrust 0.15%
E. Frank Schmidt (58)... Executive Vice President January 1, 1995 239,242(5)
of SouthTrust Bank, 0.14%
National Association
All Executive Officers 5,765,604
and Directors as a
Group.............. N/A N/A 3.39%
(16 persons)
</TABLE>
- ---------------
(1) Information with respect to Wallace D. Malone, Jr., Chairman, President and
Chief Executive Officer of SouthTrust, and with respect to Julian W. Banton,
President and Chief Executive Officer of SouthTrust Bank, National
Association, is set forth in the preceding tables.
(2) All officers of SouthTrust and its subsidiaries are elected annually by the
Board of Directors of SouthTrust or the respective subsidiary.
(3) Includes 104,706 shares subject to stock options exercisable within 60 days
after December 31, 1999.
(4) Includes 9,606 shares held by Mr. Rainer's wife, 26,744 shares held in Mr.
Rainer'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. Rainer, by virtue of allocating elections to various funds,
possesses dispositive power, and 94,835 shares subject to stock options
exercisable within 60 days after December 31, 1999.
5
<PAGE> 8
(5) Includes 984 shares held in a custodial capacity, 18,959 shares held in Mr.
Schmidt'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. Schmidt, by virtue of allocating elections to various funds,
possesses dispositive power, and 105,958 shares subject to stock options
exercisable within 60 days after December 31, 1999.
APPROVAL AND RATIFICATION OF THE SOUTHTRUST CORPORATION
DISCOUNT STOCK PAYROLL PURCHASE PLAN
The Board of Directors of SouthTrust has adopted the new SouthTrust
Corporation Discount Stock Payroll Purchase Plan (hereinafter the "Discount
Stock Plan"), subject to approval of the stockholders by a majority of the votes
cast at the Annual Meeting, to be effective as of January 1, 2000. The Discount
Stock Plan is intended to qualify under Section 423 of the Internal Revenue Code
and to provide eligible participants with the opportunity to purchase Common
Stock of SouthTrust through accumulated payroll deductions. A copy of the
Discount Stock Plan is annexed to the Proxy Statement as Exhibit I. The Board of
Directors recommends that the stockholders approve and ratify the Discount Stock
Plan.
The Board of Directors of SouthTrust intends that the Discount Stock Plan
will be used to replace the 1990 Discount Stock Purchase Plan of SouthTrust
Corporation (hereinafter the "1990 Plan"). At a meeting in December 1999, the
Board of Directors took action to provide that SouthTrust will not make further
grants under the 1990 Plan. The Board of Directors has determined, however, that
it is not in the best interest of SouthTrust to terminate the 1990 Plan at this
time due to certain restrictions on shares issued under the 1990 Plan that would
be released in the event of termination of the 1990 Plan. The Board of Directors
may, however, take action to terminate the 1990 Plan in July 2002, or
thereafter, when these restrictions under the 1990 Plan will lapse.
The number of shares available for issuance under the Discount Stock Plan
is 1,000,000 shares of Common Stock. As of the Record Date, there were 1,114,789
shares of Common Stock available for issuance under the 1990 Plan. If approved
by the stockholders of SouthTrust, the Discount Stock Plan will replace the 1990
Plan, thereby reducing the number of shares available for issuance under plans
of this type.
The Discount Stock Plan will provide eligible participants with the
opportunity to purchase Common Stock of SouthTrust through accumulated payroll
deductions. All full-time and part-time employees of SouthTrust who are
regularly scheduled to work at least 20-29 hours per week (approximately 6,700
persons as of the date of this Proxy Statement) will become eligible
participants after completing two years of service with SouthTrust. Eligible
participants may elect to have funds deducted from payroll and accumulated to
purchase shares of Common Stock of SouthTrust on the last trading day of the
year at a discounted price equal to 85% of the lesser of (1) the per share price
as of the closing of the first trading day of the year or (2) the per share
price as of the closing of the last trading day of the year. Except in the case
of retirement, death or disability, the eligible participant must be an employee
of SouthTrust on the last trading day of the year in order to effectuate the
purchase of shares for that year under the Discount Stock Plan.
The Discount Stock Plan provides that minimum payroll deductions must be at
least $20 per pay period and may be changed up to two times per year. In
addition, the number of shares purchased under the Discount Stock Plan in any
year is limited to a minimum value of $300 and a maximum value not to exceed the
lesser of (1) 10% of the eligible participant's annual compensation from
SouthTrust, or (2) $25,000.
The Discount Stock Plan contains a limited buy-back provision relating to
shares purchased under the plan. Upon purchase of shares by an eligible
participant under the Discount Stock Plan, SouthTrust will hold the
certificate(s) representing the purchase for a period of one year during which
period, should the participant desire to sell any of the shares, SouthTrust will
have a right of first refusal to repurchase such shares at the lesser of the
current market price or the same discounted price paid by the participant for
the shares, thereby negating any unrealized gain of such shares. SouthTrust will
be requesting a Private Letter Ruling from the Internal Revenue Service that the
inclusion of this buy-back provision in the Discount Stock
6
<PAGE> 9
Plan will not affect the plan's qualification under Section 423 of the Internal
Revenue Code. Should SouthTrust not receive a favorable Private Letter Ruling,
appropriate action will be taken to either abandon the Discount Stock Plan or
make changes that would insure that the Discount Stock Plan is qualified under
Section 423 of the Internal Revenue Code.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE APPROVAL AND RATIFICATION OF
THE SOUTHTRUST CORPORATION DISCOUNT STOCK PAYROLL PURCHASE PLAN.
APPROVAL AND RATIFICATION OF THE SOUTHTRUST CORPORATION
AMENDED AND RESTATED LONG-TERM INCENTIVE PLAN
The Board of Directors of SouthTrust has adopted and amended from time to
time the SouthTrust Corporation Long-Term Incentive Plan (the "Long-Term
Incentive Plan"). At a meeting in January 2000, the Board of Directors of
SouthTrust has further amended Section 4 of the Long-Term Incentive Plan to
increase the number of shares of common stock reserved for issuance under the
Long-Term Incentive Plan from 6,300,000 to 12,300,000. In addition, the Board of
Directors has amended Section 4 to provide that upon any change in the number of
outstanding shares of Common Stock due to the declaration or payment of a stock
dividend or stock split or through any recapitalization, a corresponding
adjustment will be made in the number of shares that may be granted under the
provisions of the Long Term Incentive Plan without any further action by the
Human Resources Committee. Nonetheless, the Human Resources Committee retains
the discretion to make further adjustments as are necessary to prevent dilution
or enlargement of rights. These amendments are subject to the approval of the
stockholders by a majority of the votes cast at the Annual Meeting and will be
effective retroactive to January 1, 2000. In connection with these amendments,
the Board of Directors has restated the Long-Term Incentive Plan in order to
incorporate all of the previous amendments into one document. The stockholders
are being asked to approve and ratify the Amended and Restated Long-Term
Incentive Plan, which will include approval of the amendments described herein.
As described in the Human Resources Committee Report on Executive
Compensation, one of the fundamental components of compensation for the key
employees of SouthTrust is long-term incentive compensation. Since the inception
of the Long-Term Incentive Plan in 1996, the Human Resources Committee has used
this plan as its sole means of providing long term growth-related incentives,
thus motivating and more closely aligning the interests of those employees with
the stockholders of SouthTrust. In addition, the Long-Term Incentive Plan has
also provided SouthTrust with greater flexibility in attracting and retaining
key executive and managerial employees and has allowed SouthTrust to provide
incentive compensation opportunities that are competitive with those of other
major corporations. By increasing the number of shares reserved for issuance
under the Long-Term Incentive Plan, the amendment to this plan will allow
SouthTrust to continue to achieve and further the goals of the Long-Term
Incentive Plan in future years.
The Long-Term Incentive Plan is designed to provide for several types of
awards, including (i) stock options with a fair market value exercise price at
the date of grant and (ii) restricted stock or performance unit/shares that are
conditioned on the satisfaction of certain performance criteria, all of which
are generally intended to constitute "qualified performance-based compensation"
under Section 162(m) of the Internal Revenue Code of 1986, as amended (the
"Code"), that would be exempt from certain deductibility limits. The performance
criteria are chosen by the Human Resources Committee from among the following
measures: return on average stockholder's equity; return on average assets; net
income; earnings per common share; total stockholder return; and such other
criteria as may be established by the Human Resources Committee in writing.
The Long-Term Incentive Plan is administered by the Human Resources
Committee of the Board of Directors. It is intended that the Human Resources
Committee will at all times be made up of "disinterested persons" within the
meaning of Rule 16b-3 promulgated under Section 16(b) of the Exchange Act, as
applicable to SouthTrust from time to time, and that all of its members will be
"outside directors" within the meaning of Section 162(m) of the Code. Under the
Long-Term Incentive Plan, the Human Resources Committee (i) selects the key
employees to receive awards from time to time, (ii) makes awards in such
7
<PAGE> 10
amounts as it determines, (iii) imposes such limitations, restrictions and
conditions upon awards as it deems appropriate, (iv) establishes performance
targets and allocation formulas for awards of restricted stock or performance
shares intended to be "qualified performance-based compensation" under Section
162(m) of the Code, (v) certifies the attainment of performance goals, if
applicable, as required by Section 162(m) of the Code, (vi) interprets the
Long-Term Incentive Plan and adopts, amends and rescinds administrative
guidelines and other rules and regulations relating to the Long-Term Incentive
Plan, (vii) corrects any defect or omission or reconciles any inconsistency in
the Long-Term Incentive Plan or any award granted thereunder and (viii) makes
all other determinations and takes all other actions necessary or advisable for
the implementation and administration of the Long-Term Incentive Plan. Under
certain circumstances, the vesting and /or restrictions of any outstanding award
may be accelerated or waived. No awards will be made under the Long-Term
Incentive Plan after 10 years from the date of the approval of the Long-Term
Incentive Plan by the stockholders, which was approved on April 17, 1996 at the
Annual Meeting of Stockholders. In no event may an individual receive awards
under the Long-Term Incentive Plan for a given calendar year covering in excess
of 1,125,000 shares, and the cash portion of any award under the Long-Term
Incentive Plan to any individual is limited to $3,000,000 for a given calendar
year.
Only "key employees" of SouthTrust may participate in the Long-Term
Incentive Plan. "Key employees" are those employees of SouthTrust who occupy
managerial or other important positions and who have made significant
contributions to the business of SouthTrust, as determined by the Human
Resources Committee. Approximately five percent of all employees of SouthTrust,
as such employees exist from time to time, are expected to participate. As of
the date of the initial mailing of this proxy material, five percent of the
employees of SouthTrust represents approximately 650 persons. The Human
Resources Committee, in its discretion, will select the award recipients.
The Long-Term Incentive Plan provides for the grant of options to purchase
shares of Common Stock at option prices which are not less than the fair market
value of shares of Common Stock at the close of business on the date of grant.
The Long-Term Incentive Plan also provides for the grant of SARs (either in
tandem with stock options or freestanding), which entitle holders upon exercise
to receive either cash or shares of Common Stock or a combination thereof, as
the Human Resources Committee in its discretion shall determine, with a value
equal to the difference between (i) the fair market value on the exercise date
of the shares with respect to which an SAR is exercised and (ii) the fair market
value of such shares on the date of grant (or, if different, the exercise price
of the related option in the case of a tandem SAR).
Awards of options under the Long-Term Incentive Plan, which may be either
incentive stock options (which qualify for special tax treatment) or
non-qualified stock options, are determined by the Human Resources Committee.
The terms and conditions of each option and of any SAR are to be determined by
the Human Resources Committee at the time of grant.
Exercise of an option (or an SAR) will result in the cancellation of any
related SAR (or option) to the extent of the number of shares in respect of
which such option or SAR has been exercised. Options and SARs granted under the
Long-Term Incentive Plan will expire not more than 10 years from the date of
grant, and the option agreements entered into with the optionees will specify
the extent to which options and SARs may be exercised during their respective
terms, including in the event of the optionee's death, disability or termination
of employment. Payment for shares issuable pursuant to the exercise of an option
may be made either in cash or by tendering shares of Common Stock with a fair
market value at the date of the exercise equal to the portion of the exercise
price which is not paid in cash.
The Long-Term Incentive Plan provides for the issuance of shares or
restricted stock to such key employees and on such terms and conditions as
determined from time to time by the Human Resources Committee. The restricted
stock award agreement with a participant will set forth the terms of the award,
including the applicable restrictions. Such restrictions may include the
continued service of the participant with SouthTrust, the attainment of
specified performance goals or any other condition deemed appropriate by the
Human Resources Committee.
The stock certificates evidencing the restricted stock will bear an
appropriate legend and will be held in the custody of SouthTrust until the
applicable restrictions have been satisfied. Subject to certain limited
8
<PAGE> 11
exceptions, the participant cannot sell, transfer, pledge, assign or otherwise
alienate or hypothecate shares of restricted stock until the applicable
restrictions have been satisfied. Once the restrictions are satisfied, the
shares will be delivered to the participant. During the period of restriction,
the participant may exercise full voting rights with respect to the restricted
stock. The participant will also be credited with dividends with respect to the
restricted stock. Such dividends may be payable currently or may be subject to
additional restrictions (including restrictions as to the time of payment) as
determined by the Human Resources Committee and set forth in the award
agreement.
In addition to restricted stock, the Human Resources Committee may award
performance units/shares to selected key employees. The value of a performance
unit/share will equal the fair market value of a share of Common Stock. The
Long-Term Incentive Plan provides that the number of performance units/shares
granted and/or the vesting of performance units/shares can be contingent on the
attainment of certain performance goals or other conditions over a period of
time (the "Performance Period"), all as determined by the Human Resources
Committee and evidenced by an award agreement. During the Performance Period,
the Human Resources Committee will determine what number (if any) of performance
units/shares have been earned. Earned performance units/shares may be paid in
cash, shares of Common Stock or a combination thereof having an aggregate fair
market value equal to the value of the earned performance units/shares as of the
payment date. Common Stock used to pay earned performance units/shares may have
additional restrictions as determined by the Human Resources Committee. Earned
but unpaid performance units/shares may be entitled to dividends as determined
by the Human Resources Committee and evidenced in the award agreement.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE APPROVAL AND RATIFICATION OF
THE AMENDED AND RESTATED LONG-TERM INCENTIVE PLAN.
APPROVAL AND RATIFICATION OF THE
AMENDED AND RESTATED 1993 STOCK OPTION PLAN AND THE
AMENDED AND RESTATED 1984 STOCK OPTION PLAN
The Board of Directors of SouthTrust has adopted and amended from time to
time the Amended and Restated 1984 Stock Option Plan (hereinafter the "1984
Plan") and the 1993 Stock Option Plan (the "1993 Plan"). The Board of Directors
has approved, subject to the approval of the stockholders of SouthTrust, certain
amendments to the 1993 Plan and the 1984 Plan, along with a restatement of each
of the plans incorporating all prior amendments. These amendments effect certain
clarifying administrative changes for the purpose of conforming such plans to
the Long-Term Incentive Plan.
Prior to the adoption of the Long-Term Incentive Plan in 1996, SouthTrust
used the 1993 Plan and the 1984 Plan (collectively, the "Stock Option Plans"),
to grant to key employees incentive stock options ("ISOs") and nonqualified
stock options ("NQSOs"). Upon the adoption of the Long-Term Incentive Plan,
SouthTrust ceased granting new options under the 1993 Plan and the 1984 Plan.
There are, however, previously granted options that remain outstanding and that
are subject to the terms of the 1993 Plan and the 1984 Plan.
The 1993 Plan and the 1984 Plan each currently provide that the plans are
administered by the Stock Option Committee of the Board of Directors. The
present name of this committee is the Human Resources Committee, and the Stock
Option Plans are being amended to reflect this correction. Furthermore, the
Stock Option Plans are being amended to provide that upon a change in the number
of outstanding shares of Common Stock by reason of a stock dividend, stock
split, recapitalization or other similar corporate change, a corresponding
adjustment shall be made in the aggregate number of shares of Common Stock
subject to each outstanding option, the stated option price and the aggregate
number of shares reserved for issuance under the Stock Option Plans without any
further action by the Human Resources Committee. Nonetheless, the Human
Resources Committee retains the discretion to make any further adjustments as
are necessary to prevent dilution or enlargement of rights.
9
<PAGE> 12
In addition to the foregoing amendments, the 1993 Plan and the 1984 Plan
were each amended by the Board of Directors in 1997 to provide that in the case
of retirement after attainment of age 60, a grantee under each of the Stock
Option Plans will have until the expiration date of any NQSO granted under the
Stock Option Plans in which to exercise such option. Previously, each of the
1993 Plan and the 1984 Plan had provided that a grantee would have three (3)
years from the date of retirement after age 60 in which to exercise any NQSO.
Other than for the inclusion of each of the foregoing amendments, the
Amended and Restated 1993 Stock Option Plan and the Amended and Restated 1984
Stock Option Plan, contain the same terms and conditions as were approved by the
stockholders of SouthTrust at the Annual Meeting held on April 19, 1995.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE APPROVAL AND RATIFICATION OF
THE AMENDED AND RESTATED 1993 STOCK OPTION PLAN AND THE AMENDED RESTATED 1984
STOCK OPTION PLAN.
NEW PLAN BENEFITS
As indicated above, awards are no longer being granted under the 1993 Plan
and the 1984 Plan. The following tabulation reflects certain information
respecting the amounts of the awards that will be received by the following
persons under the Long-Term Incentive Plan and the Discount Stock Plan.
<TABLE>
<CAPTION>
DISCOUNT STOCK PLAN
LONG-TERM INCENTIVE PLAN ---------------------
------------------------ NUMBER
NAME AND POSITION NUMBER OF OPTIONS(1) OF ELIGIBLE SHARES(2)
- ----------------- ------------------------ ---------------------
<S> <C> <C>
Wallace D. Malone, Jr.................................. 175,000 732
Chief Executive Officer
and President of SouthTrust
Julian W. Banton....................................... 75,000 732
President and Chief Executive
Officer of SouthTrust Bank,
National Association
Thomas H. Coley........................................ 20,000 732
Executive Vice President of
SouthTrust Bank,
National Association
James W. Rainer........................................ 0 732
Executive Vice President of
SouthTrust
E. Frank Schmidt....................................... 23,500 732
Executive Vice President of
SouthTrust Bank,
National Association
Executive Officer Group................................ 356,750 7,062
Non-Executive Director Group(3)........................ 0 0
Employee Group......................................... 738,400 *
</TABLE>
- ---------------
(1) Represents options granted pursuant to Article 6 of the Long-Term Incentive
Plan to the persons described above with respect to fiscal 2000. The amounts
may increase if additional grants are made during the year.
(2) Represents the maximum number of shares that may be purchased at the
discount price established pursuant to the Employee Discount Plan terms
using the price on the first trading day of the year.
(3) Non-executive officer directors of SouthTrust are not eligible to
participate in either the Long-Term Incentive Plan or the Discount Stock
Plan.
* Amounts for Employee Group are not determinable until the close of calendar
year 2000.
10
<PAGE> 13
EXECUTIVE COMPENSATION
The following information provides certain details concerning the cash and
equity-based compensation payable to certain executives of SouthTrust as well as
certain other information.
FIVE YEAR TOTAL STOCKHOLDER RETURN
The following indexed graph compares the cumulative total stockholders'
return on SouthTrust Common Stock for the past five years with the cumulative
total return of the Standard and Poor's 500 Index and the Standard and Poor's
Major Regional Bank Index during the same period. This presentation assumes that
$100 was invested in shares of the relevant issuers on December 31, 1994, and
that dividends received were immediately reinvested in additional shares. The
graph depicts the value of the initial $100 investment at one-year intervals.
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN
SOUTHTRUST CORPORATION
(PERFORMANCE THROUGH DECEMBER 31, 1999)
<TABLE>
<CAPTION>
S&P MAJOR REGIONAL BANK
SOUTHTRUST CORPORATION S&P 500 INDEX INDEX
---------------------- ------------- -----------------------
<S> <C> <C> <C>
12/94 100 100 100
12/95 147 137 157
12/96 206 169 215
12/97 384 225 323
12/98 342 289 356
12/99 358 350 306
</TABLE>
REPORT OF THE HUMAN RESOURCES COMMITTEE ON EXECUTIVE COMPENSATION
The Human Resources Committee of the Board of Directors of SouthTrust
annually establishes the compensation of the executive officers of SouthTrust
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 SouthTrust and to
provide superior returns to stockholders of SouthTrust.
11
<PAGE> 14
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 at peer
financial institutions. A significant portion of an executive's total
compensation is variable and is based on short-term and long-term performance of
SouthTrust. Short-term performance of SouthTrust is rewarded, in the case of the
senior executive officers of SouthTrust, by annual cash bonuses under the Senior
Officer Performance Incentive Plan and, in the case of certain other executives
of SouthTrust, 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 SouthTrust) is the principal mechanism for rewarding
executives for the long-term performance of SouthTrust.
The following is a description of the compensation programs of SouthTrust
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 SouthTrust 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 SouthTrust 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 SouthTrust.
As part of this process, the Human Resources Committee reviews a number of
salary surveys produced by various compensation consulting firms. While this
survey data includes banking institutions from across the country, the Human
Resources Committee primarily concentrates on data from SouthTrust's peer
institutions, which the Human Resources Committee considers to be southeastern
banks and bank holding companies with total assets ranging from $15 to $70
billion. Although this group is not identical to Standard and Poor's Major
Regional Bank Index, many of these institutions are included in such index.
These peer institutions were selected because they are located within
SouthTrust's operating region and are of an asset size that is significant but
not greatly in excess of SouthTrust's asset size. In establishing the 1999 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 SouthTrust to
this survey data of 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 SouthTrust listed in the Summary Compensation Table varied by
position, but in general 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 SouthTrust
for the preceding year. Upon completion of the business plan for the forthcoming
year, the Chief Executive Officer of SouthTrust presents to the Human Resources
Committee the net income goal of SouthTrust on a consolidated basis and the net
income goals of the various subsidiaries of SouthTrust 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 1999, the range of potential awards for such executives under
the Senior Officer Performance Incentive Plan, other than the Chief Executive
Officer, was between 33.34% and 130% of the executive's annual base salary, with
each individual executive being assigned minimum, target and maximum awards. An
executive whose award is
12
<PAGE> 15
based upon a net income goal of SouthTrust 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 SouthTrust's five highest paid executives in 1999 under
the Senior Officer Performance Incentive Plan are included in the Annual
Compensation-Bonus column of the Summary Compensation Table. Comparing
SouthTrust to the peer institutions described above, the incentive opportunities
available to eligible executives under the Senior Officer Performance Incentive
Plan approximates the average opportunities available at other peer
institutions.
Long-Term Incentive Compensation
The Long-Term Incentive Plan of SouthTrust makes available to the Human
Resources Committee various methods of compensating and rewarding executives of
SouthTrust, including the grant or award of 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
SouthTrust. The Long-Term Incentive Plan was adopted in 1996 and amended in 1998
and 1999 by SouthTrust, and except for outstanding grants of stock options,
replaced the predecessor stock option plans of SouthTrust.
The Human Resources Committee believes that stock ownership encourages and
rewards management decisions that result in the long-term success of SouthTrust.
In the past, stock options have been one of SouthTrust'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 SouthTrust 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 SouthTrust's most
highly compensated executives, other than the Chief Executive Officer, during
1999 in general approximated the average grants reported with respect to
comparable executives of peer institutions of comparable size to SouthTrust. In
addition, the total number of shares of Common Stock subject to outstanding
stock options as of September 30, 1999, as a percentage of SouthTrust's then
total outstanding Common Stock, is below the median reported by peer
institutions of comparable size to SouthTrust.
For 1999, SouthTrust also maintained the 1990 Discounted Stock Plan, which
was available to all employees including executives who have at least five years
of service with SouthTrust. For information respecting the 1990 Plan, see the
information set forth under the heading "Stock Options and Discounted Stock
Plans" in this Proxy Statement. Awards under the 1990 Plan have not been used
extensively as a vehicle for executive compensation. In December 1999, the Board
of Directors took action to provide that there will be no further grants under
the 1990 Plan.
The Board of Directors has approved, subject to stockholder approval, the
adoption of a new Discount Stock Payroll Purchase Plan. Information regarding
the specific provisions of this plan are more fully described in the section of
this Proxy Statement entitled "Approval and Ratification of the SouthTrust
Corporation Discount Stock Payroll Purchase Plan." This plan is intended to be a
broad based stock ownership plan qualified under Section 423 of the Internal
Revenue Code, and as such is also not intended to
13
<PAGE> 16
be used as a vehicle for executive compensation. In fact, this new plan actually
reduces the opportunity available to highly compensated employees from the
levels provided in the predecessor 1990 Plan.
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 SouthTrust 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 SouthTrust's Common Stock) being determined
as of the date earned.
The percentage of the shares of Common Stock of SouthTrust subject to
outstanding grants of performance units/shares as of December 31, 1999 falls
somewhat below the median percentage reported by peer institutions of comparable
size to SouthTrust.
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 proposed
regulations provide an exception from this limitation for certain
performance-based compensation, assuming that various requirements are met. The
Senior Officer Performance Incentive Plan and the Long-Term Incentive Plan are
designed to satisfy this exception for awards issued thereunder. The
stockholders of SouthTrust previously have approved the material terms and
conditions of the performance goals under which compensation is to be paid
pursuant to the Senior Officer Performance Incentive Plan and the Long-Term
Incentive Plan. Accordingly, SouthTrust anticipates being entitled to deduct an
amount equal to the taxable income reportable by each participant in the Senior
Officer Performance Incentive Plan and the Long-Term Incentive Plan as a result
of any award made under the respective plan up to a maximum limit of $4,000,000
with respect to the Senior Officer Performance Incentive Plan and, with respect
to the Long-Term Incentive Plan, up to $3,000,000, plus any amounts that may be
deductible with respect to grants of stock, stock options or restricted stock,
up to 1,125,000 shares in any given year. To the extent feasible, the Human
Resources Committee of SouthTrust 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
SouthTrust reserve the right, in light of the overall goals and objectives of
SouthTrust, to exceed such limitation if it is determined to be in the best
interest of SouthTrust and its stockholders.
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 1999 base salary increase for the Chief Executive Officer was
established after a review of the 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 SouthTrust'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 1999. The Chief Executive Officer's base
salary for 1999 was at approximately the 80th percentile of the array of
salaries for chief executive officers of all peer institutions as reported by
such institutions.
For 1999, the Human Resources Committee increased the opportunity available
to the Chief Executive Officer under the Senior Officer Performance Incentive
Plan to a range of 66.67% to 200% of base salary if the target award for
SouthTrust's net income was achieved. Under this plan, the Chief Executive
Officer would earn no award if less than 95% of the target goal is achieved,
would earn incremental percentages of the award if more than 95% but less than
105% of the target goal is achieved, and would earn the maximum award if 105% of
the target goal is achieved. Since SouthTrust's 1999 net income exceeded the
maximum target goal established by the Human Resources Committee, the incentive
award paid the Chief Executive Officer under
14
<PAGE> 17
the Senior Officer Plan was equal to 190.40% of base salary. This amount is in
excess of the target award based on the achievement of net income goals, but
falls slightly short of the maximum 200% opportunity available.
During 1999, the Chief Executive Officer was granted annual stock options
to purchase 535,000 shares of Common Stock through two separate stock option
grants during the year, one grant of 175,000 shares awarded in the course of the
annual grant including all eligible employees, and a second grant of 360,000
shares that was awarded based on the sustained performance of increasing net
income and performance of SouthTrust and a review of competitive data with
respect to the opportunity that had been available to the Chief Executive
Officer in previous years. The first stock option of 175,000 shares awarded to
the Chief Executive Officer was increased over the number of shares received in
1998 based on a review of competitive data. When combined with the second grant
of 360,000 shares, the 1999 combined annual stock option award, as a percentage
of base salary, is above average when compared to the awards reported by the
peer institutions of comparable size to SouthTrust. The Human Resources
Committee intends, however, that the second grant to the Chief Executive Officer
will not recur in future years. In addition, in 1999 the Human Resources
Committee also awarded to the Chief Executive Officer 20,250 performance
units/shares. The 1999 grant of the performance units/shares to the Chief
Executive Officer is for a 36 month performance period beginning on January 1,
1999, and ending December 31, 2001. The amount of the payment will vary
depending upon the performance attained. The amount of the payment made in 1999
to the Chief Executive Officer in 1999 in respect of performance units/shares,
when compared to other peer institutions and weighted in terms of a percentage
of base salary, is slightly below average to that reported by peer institutions
of comparable size to SouthTrust.
Compensation Committee Interlocks and Insider Participation in Compensation
Decisions
During 1999, the members of the Human Resources Committee were as follows:
Carl F. Bailey, Chairman
William C. Hulsey
H. Allen Franklin
None of the members of the Human Resources Committee have served as
officers of SouthTrust or any of its subsidiaries. During 1999, Mr. Malone
served as a member of the Compensation Committee of American Cast Iron Pipe Co.,
of which Mr. Richey is President and Chief Executive Officer. None of the Human
Resources Committee members have any other relationship to SouthTrust or any of
its subsidiaries other than as customers of SouthTrust's subsidiary banks, in
the ordinary course of business.
15
<PAGE> 18
SUMMARY COMPENSATION TABLE
The following Summary Compensation Table sets forth certain information
concerning compensation for services rendered to SouthTrust by SouthTrust's
Chief Executive Officer and the four other most highly compensated executive
officers of SouthTrust for each of the last three fiscal years:
<TABLE>
<CAPTION>
ANNUAL COMPENSATION(1) LONG TERM COMPENSATION
------------------------------ --------------------------------------
AWARDS PAYOUTS
----------------------- ----------
OTHER RESTRICTED
ANNUAL STOCK OPTIONS LTIP ALL OTHER
COMPENSATION AWARDS (NUMBER PAYOUTS COMPENSATION
NAME AND PRINCIPAL POSITION YEAR SALARY($) BONUS($)(2) ($)(3) ($) OF SHARES) ($) ($)
- --------------------------- ---- --------- ----------- ------------ ---------- ---------- ---------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Wallace D. Malone, Jr.,.... 1999 $975,000 $1,856,400 $64,167 N/A 535,000(5) $1,350,463 $88,342(9)
Chief Executive Officer 1998 900,000 1,425,000(4) 54,453 N/A 900,001(6)(7) 958,776(4) 75,180(9)
of SouthTrust 1997 800,016 895,000 11,044 N/A 135,000(7) 1,408,267(8) 70,082(9)
Julian W. Banton,.......... 1999 492,333 609,312 5,347 N/A 65,000 540,185 44,620(10)
Chairman, President and 1998 414,000 464,000 0 N/A 49,501(7) 403,420 37,105(10)
Chief Executive Officer 1997 344,350 197,193 0 N/A 37,500(7) 592,550(8) 30,316(10)
of SouthTrust Bank,
National Association
Thomas H. Coley,........... 1999 260,000 188,294 0 N/A 20,000 155,303 23,573(10)
Executive Vice President 1998 255,000 153,255 0 N/A 15,001(7) 298,635 22,850(10)
of SouthTrust Bank, 1997 240,000 118,440 0 N/A 12,750(7) 438,642(8) 21,164(10)
National Association
James W. Rainer, Jr.,...... 1999 225,200 214,390 0 N/A 20,000 256,588 20,483(10)
Executive Vice President 1998 214,200 160,500 0 N/A 15,001(7) 254,102 19,264(10)
of SouthTrust 1997 204,000 132,600 0 N/A 12,300(7) 373,230(8) 18,080(10)
E. Frank Schmidt,.......... 1999 255,000 201,659 0 N/A 20,000 270,093 23,182(10)
Executive Vice President 1998 240,000 165,600 0 N/A 15,001(7) 275,058 21,573(10)
of SouthTrust Bank, 1997 220,000 93,478 0 N/A 11,250(7) 404,413 19,495(10)
National Association
</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.
(2) Represents amounts paid to each executive officer under the Senior Officer
Performance Incentive Plan as well as other bonuses paid for a given year.
(3) Represents life insurance premiums and additional taxes owed on the
additional compensation paid by SouthTrust on behalf of each executive
officer.
(4) Amounts reported for 1998 under the categories of Bonus and LTIP Payouts
have been revised from the amounts set forth in the 1999 Proxy Statement
for such categories in the same period to reflect proper classification of
such amounts. The revisions do not change the aggregate compensation
reported for 1998.
(5) Includes a special grant of a Non-Qualified Stock Option covering an
aggregate of 360,000 shares of Common Stock, more fully described in the
Report of the Human Resources Committee on Executive Compensation.
(6) Includes special grants of Non-Qualified Stock Options covering an
aggregate of 750,000 shares of Common Stock.
(7) Share amounts reflect adjustment for a 3 for 2 split of the common stock of
SouthTrust effective February 26, 1998.
(8) The LTIP Payout amount for 1997 has been revised from the amount set forth
in the 1998 Proxy Statement to set forth the actual amount earned for the
Performance Period ended December 31, 1997 consistent with prior years
methodology and presentation.
(9) Includes (i) $30,000 for Mr. Malone, which amount was withheld by
SouthTrust from deferred compensation due Mr. Malone in each of 1998, 1997
and 1996 in order to defray the costs of SouthTrust 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 SouthTrust to defined
contribution plans maintained by SouthTrust (including qualified and
non-qualified compensation plans) and (iii) the value of certain insurance
coverage.
(10) Represents payments by SouthTrust to defined contribution plans maintained
by SouthTrust (including qualified and non-qualified compensation plans) on
behalf of the executive officers.
16
<PAGE> 19
STOCK OPTIONS AND DISCOUNTED STOCK PLANS
Pursuant to the Long-Term Incentive Plan (and the predecessor stock option
plans of SouthTrust), SouthTrust grants to key employees of SouthTrust either
incentive stock options ("ISO's") or non-qualified stock options ("NQSO's"), and
pursuant to the 1990 Plan in 1999 and earlier years, and the Discount Stock Plan
for years beginning in 2000 and afterwards, awards to purchase shares of common
stock of SouthTrust at a discount are made to eligible employees, including
executive officers of SouthTrust.
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 1990 Plan and the Discount Stock Plan were established in order to give
all employees an opportunity to acquire equity interest in SouthTrust at a
discount (17.5% in the case of the 1990 Plan and 15% in the case of the Discount
Stock Plan) to the market price, and awards are made to all employees (including
executive officers) who have completed five years of full time service to
SouthTrust and its subsidiaries in the case of the 1990 Plan and two years of
such service in the case of the Discount Stock Plan. A total of 1,114,789 shares
of Common Stock of SouthTrust is reserved for issuance under the 1990 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 1990 Plan and, under
certain circumstances, SouthTrust may repurchase such shares. In December 1999,
the Board of Directors took action to provide that there will be no further
grants under the 1990 Plan. The Board of Directors has adopted the Discount
Stock Plan, subject to stockholder approval, to be effective as of January 1,
2000. The Discount Stock Plan is described in greater detail under the heading
"Approval and Ratification of the SouthTrust Corporation Discount Stock Payroll
Purchase Plan."
The following table sets forth information concerning grants of stock
options and rights during fiscal year 1999 to each executive officer listed
below:
OPTION AND RIGHT GRANTS IN FISCAL YEAR 1999
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
--------------------------------------------------------------------------
POTENTIAL
% OF TOTAL REALIZABLE VALUE
OPTIONS OPTIONS EXERCISE ASSUMING RATES OF STOCK
GRANTED GRANTED OR BASE PRICE APPRECIATION OF
(NUMBER OF EMPLOYEES PRICE EXPIRATION ------------------------
NAME SHARES)(1) IN 1999 ($/SH) DATE 5%(2) 10%(2)
- ---- ---------- ---------- -------- ---------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C>
Wallace D. Malone, Jr........ 175,000(3) 13.7% 37.8125 1/20/09 $4,161,518 $10,546,095
360,000(4) 28.3 36.6600 10/19/09 8,299,908 21,033,576
Julian W. Banton............. 65,000(3) 5.1 37.8125 1/20/09 1,545,707 3,917,121
Thomas H. Coley.............. 20,000(3) 1.6 37.8125 1/20/09 475,602 1,205,268
James W. Rainer, Jr.......... 20,000(3) 1.6 37.8125 1/20/09 475,602 1,205,268
E. Frank Schmidt............. 20,000(3) 1.6 37.8125 1/20/09 475,602 1,205,268
</TABLE>
- ---------------
(1) Does not include awards during 1999 under the 1990 Plan to Mr. Malone to
purchase 3,221 shares, Mr. Banton to purchase 1,533 shares, Mr. Coley to
purchase 859 shares, Mr. Rainer to purchase 744 shares, and Mr. Schmidt to
purchase 842 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 under the 1990 Discount Stock Plan during 1999 except
for Mr. Malone, who purchased 3,221 shares.
(2) 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 increases by 5% and 10%,
respectively, during each year that the options are exercisable.
(3) Each of the options granted to the named executives in 1999 became
exercisable on January 20, 2000, with the exception of 2,644 shares granted
to Mr. Malone which become exercisable on January 20, 2001
17
<PAGE> 20
and 2,644 of the shares granted to Mr. Banton which also become exercisable
on January 20, 2001. The exercisability of such options is not subject to
any future performance-based condition.
(4) This option was granted to Mr. Malone as of October 20, 1999 and vests
incrementally (33.33% each year) for a period of three years.
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
1999, 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 SouthTrust effective on February 26, 1998):
AGGREGATED STOCK OPTION EXERCISES IN 1999
AND DECEMBER 31, 1999 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 1999 1999
ACQUIRED EXERCISABLE(1)/ EXERCISABLE(1)/
NAME ON EXERCISE VALUE REALIZED UNEXERCISABLE UNEXERCISABLE
- ---- ----------- -------------- ----------------- -----------------
<S> <C> <C> <C> <C>
Wallace D. Malone, Jr. ......... 83,399 $1,849,901 786,071 $8,494,226
902,645 360,000
Julian W. Banton................ 13,149 473,480 275,511 4,165,273
2,644 0
Thomas H. Coley................. 5,000 174,467 104,439 1,524,682
0 0
James W. Rainer, Jr. ........... 13,243 343,341 94,835 1,417,300
0 0
E. Frank Schmidt................ 6,000 197,736 105,948 1,481,465
0 0
</TABLE>
- ---------------
(1) Includes options exercisable within 60 days of December 31, 1999, but
excludes options disposed of by gift as of such date.
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 SouthTrust during 1999:
LONG-TERM INCENTIVE PLAN -- GRANTS IN 1999
<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 (#)(1) OR PAYOUT (#) (#) (#)
- ---- ------------- ------------ --------- ------ -------
<S> <C> <C> <C> <C> <C>
Wallace D. Malone, Jr. ............. 20,250 36 months 9,000 20,250 60,750
Julian W. Banton.................... 8,700 36 months 3,867 8,700 26,100
Thomas H. Coley..................... 4,200 36 months 1,867 4,200 12,600
James W. Rainer, Jr. ............... 3,150 36 months 1,400 3,150 9,450
E. Frank Schmidt.................... 4,200 36 months 1,867 4,200 12,600
</TABLE>
- ---------------
(1) The grant of performance units/shares or other rights under the Long-Term
Incentive Plan is conditioned on the satisfaction of certain performance
criteria, as chosen by the Human Resources Committee from among the
following measures: return on average stockholder's equity, return on
average assets, net income, earnings per common share, total stockholder
return, and such other criteria as may be established by the Human Resources
Committee in writing.
18
<PAGE> 21
EXECUTIVE EMPLOYMENT AGREEMENTS AND OTHER ARRANGEMENTS
SouthTrust 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
an initial term commencing as of October 19, 1984 and ending on December 31,
1992, 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 SouthTrust, 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 SouthTrust, 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.
SouthTrust or certain of its subsidiaries are parties to certain agreements
with Messrs. Banton, Coley, Rainer and Schmidt, as well as certain other
executive officers of SouthTrust and its subsidiaries, that become effective
only upon a change of control of SouthTrust, and that 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
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 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.
SouthTrust 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 SouthTrust 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. SouthTrust also maintains an Additional
Retirement Plan for certain executives that provides for benefits that mirror
those of the Retirement Plan on compensation excluded by IRS regulations from
inclusion in the Retirement Plan. In addition, for the period of time from 1987
until 1999, Mr. Malone was excluded from participation in the Retirement Plan
and all of the pension benefits provided by SouthTrust with respect to Mr.
Malone were made under the Additional Retirement Plan. During 1999, the
Retirement Plan was amended to again include Mr. Malone. Because the Additional
Retirement Plan is offset by benefits earned under the Retirement Plan, this
change will have no effect on the total retirement benefits provided to Mr.
Malone. SouthTrust also maintains a Performance Incentive Retirement Benefit
Plan designed to provide retirement benefits on the short-term incentive
compensation of certain executives selected for participation by the Human
Resources Committee including Messrs. Malone, Banton, Coley, Rainer, and
Schmidt. The plan formula mirrors the formula in the Retirement Plan and applies
it to the short-term incentive compensation paid to included executives.
SouthTrust also maintains certain deferred compensation and similar agreements
which pay Mr. Malone and others certain amounts upon retirement.
19
<PAGE> 22
The following table shows the annual pension benefits under the Retirement
Plan, the Additional Retirement Plan and the Performance Incentive Retirement
Benefit Plan for retirement at age 65 based upon various compensation amounts
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* 310,000* 387,500* 465,000* 524,500*
1,500,000............................ 348,750* 465,000* 581,250* 697,500* 813,750*
2,000,000............................ 465,000* 620,000* 775,000* 930,000* 1,085,000*
2,500,000............................ 581,250* 775,000* 968,750* 1,162,500* 1,356,250*
3,000,000............................ 697,500* 930,000* 1,162,500* 1,395,000* 1,627,500*
3,500,000............................ 813,750* 1,085,000* 1,356,250* 1,627,500* 1,898,750*
</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,
SouthTrust maintains an Additional Retirement Plan and certain deferred
compensation and similar agreements which supplement the benefits payable to
certain executive officers.
Base salary figures and short term incentive payments to the Chief
Executive Officer and the other executive officers of SouthTrust for the most
recent fiscal year are set forth in the Summary Compensation Table. As of
December 31, 1999, credited years of service for each such executive officer are
as follows: Mr. Malone -- 41 years; Mr. Banton -- 17 years; Mr. Coley -- 12
years; Mr. Rainer -- 35 years; and Mr. Schmidt -- 36 years.
SECTION 16(A) BENEFICIAL OWNERSHIP
REPORTING COMPLIANCE
SouthTrust'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 SouthTrust.
Based solely on a review of copies of such reports furnished to SouthTrust
through the date hereof, or written representations of such officers, directors
or stockholders that no reports were required, SouthTrust believes that during
1999 all filing requirements applicable to its officers, directors and
stockholders were complied with in a timely manner.
20
<PAGE> 23
TRANSACTIONS WITH MANAGEMENT
Directors and executive officers of SouthTrust and their associates were
customers of and/or had transactions with the banks which are subsidiaries of
SouthTrust in the ordinary course of business during the year ended December 31,
1999, 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
SouthTrust.
AUDITORS
Arthur Andersen LLP, independent accountants, have been engaged as
SouthTrust's auditors since 1989 and will continue to serve as SouthTrust's
auditors during 2000. 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 SouthTrust no later than November
10, 2000, to be included in the 2001 proxy materials. A stockholder must notify
SouthTrust before January 24, 2001 of a proposal for the 2001 Annual Meeting
which the stockholder intends to present other than by inclusion in SouthTrust's
proxy material. If SouthTrust does not receive such notice prior to January 24,
2001, proxies solicited by the management of SouthTrust will confer
discretionary authority upon the management of SouthTrust to vote upon any such
matter.
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/ Alton E. Yother
ALTON E. YOTHER
Secretary
Birmingham, Alabama
March 10, 2000
21
<PAGE> 24
EXHIBIT I
SOUTHTRUST CORPORATION
DISCOUNT STOCK PAYROLL PURCHASE PLAN
The following constitute the provisions of the Discount Stock Payroll
Purchase Plan of SouthTrust Corporation.
1. PURPOSE.
The purpose of the Plan is to provide employees of the Company and its
Designated Subsidiaries with an opportunity to purchase Common Stock of the
Company through accumulated payroll deductions. It is the intention of the
Company to have the Plan qualify as an "Employee Stock Purchase Plan" under
Section 423 of the Code. The provisions of the Plan, accordingly, shall be
construed so as to extend and limit participation in a manner consistent with
the requirements of that section of the Code.
2. DEFINITIONS.
(a) "Board" shall mean the Board of Directors of the Company.
(b) "Code" shall mean the Internal Revenue Code of 1986, as amended.
(c) "Committee" shall mean the Human Resources Committee of the Board.
(d) "Common Stock" shall mean the common stock, par value $2.50 per share,
of the Company.
(e) "Company" shall mean SouthTrust Corporation, a Delaware corporation,
and any Designated Subsidiary of the Company.
(f) "Compensation" shall mean, the annualized rate of base straight time
earnings as determined on the first day of the Plan Year, but excludes payments
for commissions, overtime, shift premium, incentive compensation, incentive
payments, bonuses and other compensation.
(g) "Continuous Service" shall mean the number of full years and completed
months of continuous employment with the Company calculated from an Employee's
last hire date to his date of severance of employment for any reason. Continuous
Service shall not be broken and shall be credited for absences due to vacation,
temporary sickness or injury, other paid or unpaid leaves of absence authorized
by the Company and leaves of absence which would not cause an individual to
cease to be an Employee.
(h) "Designated Subsidiary" shall mean any Subsidiary which has been
designated by the Board from time to time in its sole discretion as eligible to
participate in the Plan.
(i) "Employee" shall mean any individual who is an Employee of the Company
for tax purposes whose customary employment with the Company is at least twenty
(20) hours per week and more than five (5) months in any calendar year. For
purposes of the Plan, the employment relationship shall be treated as continuing
intact while the individual is on sick leave or other leave of absence approved
by the Company. Where the period of leave exceeds 180 days and the individual's
right to reemployment is not guaranteed either by statute or by contract, the
employment relationship shall be deemed to have terminated on the 181st day of
such leave.
(j) "Exercise Date" shall mean the last Trading Day of each Plan Year.
(k) "Fair Market Value" shall mean, as of any date, the last sales price of
the Common Stock as reported on the Automated Quotation System of the National
Association of Securities Dealers, Inc. -- National Market System ("NASDAQ") on
the date of such determination, as reported in The Wall Street Journal or such
other source as the Committee deems reliable.
(l) "Grant Date" shall mean the first Trading Day of each Plan Year.
(m) "Plan" shall mean this Discount Stock Payroll Purchase Plan.
I-1
<PAGE> 25
(n) "Plan Year" shall mean the period of approximately twelve (12) months
commencing on the first Trading Day on or after January 1st of each calendar
year and terminating on the last Trading Day of each calendar year.
(o) "Purchase Price" shall mean 85% of the Fair Market Value of a share of
Common Stock on the Grant Date or on the Exercise Date, whichever is lower;
provided however, that the Purchase Price may be adjusted by the Committee
pursuant to Section 20.
(p) "Subsidiary" shall mean a corporation, domestic or foreign, of which
not less than 50% of the voting shares are held by the Company or a Subsidiary,
whether or not such corporation now exists or is hereafter organized or acquired
by the Company or a Subsidiary.
(q) "Trading Day" shall mean a day on which NASDAQ is open for trading.
3. ELIGIBILITY.
(a) Subject to the limitations set forth herein, every Employee of the
Company shall be eligible to participate in the Plan as of the Grant Date
coincident with or immediately following his or her completion of at least two
years of Continuous Service.
(b) Any provisions of the Plan to the contrary notwithstanding, no Employee
shall be granted an option under the Plan (i) to the extent that, immediately
after the grant, such Employee (or any other person whose stock would be
attributed to such Employee pursuant to Section 424(d) of the Code) would own
capital stock of the Company and/or hold outstanding options to purchase such
stock possessing five percent (5%) or more of the total combined voting power or
value of all classes of the capital stock of the Company or of any Subsidiary,
or (ii) to the extent that his or her rights to purchase stock under all
employee stock purchase plans of the Company and its subsidiaries accrues at a
rate which exceeds Twenty-Five Thousand Dollars ($25,000) worth of capital stock
(determined at the fair market value of the shares at the time such option is
granted) for each calendar year in which such option is outstanding at any time.
4. PLAN YEARS.
The Plan shall be implemented by consecutive Plan Years with a new Plan
Year commencing on the first Trading Day on or after January 1st each year, or
on such other date as the Committee shall determine, and continuing thereafter
until terminated in accordance with Section 20 hereof.
5. PARTICIPATION.
(a) An eligible Employee may become a participant in the Plan by completing
an enrollment form authorizing payroll deductions in the form of Exhibit A to
this Plan and filing it with the Company's payroll office. If an Employee is
eligible to participate in the Plan before the first day of the Plan Year, such
Employee will begin participating in the Plan on the Grant Date by filing the
enrollment form in the payroll office prior to that date. If an Employee, who is
eligible to participate in the Plan before the first day of the Plan Year, files
an enrollment form after the Grant Date, such Employee will begin to participate
in the Plan as soon as administratively possible, but not more than 30 days
after the filing of the enrollment form. If an Employee becomes eligible to
participate in the Plan after the beginning of the Plan Year and files an
enrollment form in the payroll office, such Employee's participation in the Plan
will not commence until the following Plan Year.
(b) Payroll deductions for a participant shall commence on the first
payroll following the date the enrollment form is filed in the Company's payroll
office and shall end on the last payroll in the Plan Year to which such
authorization is applicable, unless sooner terminated by the participant as
provided in Section 10 hereof.
6. PAYROLL DEDUCTIONS.
(a) At the time a participant files his or her enrollment form, he or she
shall elect to have payroll deductions made on each pay day during the Plan
Year. A participant may authorize payroll deductions in an amount not less than
Twenty and No/100 Dollars ($20.00) per pay period and not more than ten percent
(10%) of the participant's Compensation during the Plan Year. Notwithstanding
the foregoing, the minimum
I-2
<PAGE> 26
amount which must be deducted from an eligible Employee's payroll during the
Plan Year shall be Three Hundred and No/100 Dollars ($300.00) and the maximum
amount which may be deducted from an eligible Employee's payroll during the Plan
Year shall be equal to the lesser of (i) Twenty-Five Thousand and No/100 Dollars
($25,000.00), or (ii) Ten Percent (10%) of such eligible Employee's Compensation
during the Plan Year.
(b) All payroll deductions made for a participant shall be credited to his
or her account under the Plan and shall be withheld in whole percentages or
whole dollar amounts only.
(c) A participant may discontinue his or her participation in the Plan as
provided in Section 10 hereof, or may increase or decrease the rate of his or
her payroll deductions during the Plan Year by completing or filing with the
Company a new enrollment form authorizing a change in payroll deduction rate. A
participant may not change the payroll deduction rate more than two times in any
one Plan Year. The Committee may, in its discretion, further limit the number of
participation rate changes during any Plan Year. The change in rate shall be
effective with the first full payroll period following five (5) business days
after the Company's receipt of the new enrollment form unless the Company elects
to process a given change in participation more quickly. A participant's
enrollment form shall remain in effect for successive Plan Years unless
terminated as provided in Section 10 hereof.
(d) Notwithstanding the foregoing, to the extent necessary to comply with
Section 423(b)(8) of the Code and Section 3(b) hereof, a participant's payroll
deductions may be decreased to zero percent (0%) at any time during a Plan Year.
Payroll deductions shall recommence at the rate provided in such participant's
enrollment form at the beginning of the next Plan Year, unless terminated by the
participant as provided in Section 10 hereof.
(e) At the time the option is exercised, in whole or in part, or at the
time some or all of the Company's Common Stock issued under the Plan is disposed
of, the participant must make adequate provision for the Company's federal,
state, or other tax withholding obligations, if any, which arise upon the
exercise of the option or the disposition of the Common Stock or withdrawal from
the Plan pursuant to Section 10 hereof. At any time, the Company may, but shall
not be obligated to, withhold from the participant's Compensation the amount
necessary for the Company to meet applicable withholding obligations, including
any withholding required to make available to the Company any tax deductions or
benefits attributable to sale or early disposition of Common Stock by the
Employee.
7. GRANT OF OPTION.
On the Grant Date of each Plan Year, each eligible Employee participating
in such Plan Year shall be granted an option to purchase on each Exercise Date
during such Plan Year (at the applicable Purchase Price) up to a number of
shares of the Company's Common Stock determined by dividing such Employee's
payroll deductions accumulated prior to such Exercise Date and retained in the
participant's account as of the Exercise Date by the applicable Purchase Price;
provided that such purchase shall be subject to the limitations set forth in
Sections 3(b) and 13 hereof. The Committee may, in its absolute discretion,
establish a maximum number of shares of the Company's Common Stock that an
Employee may purchase during each Plan Year by giving written notice to
participants of the establishment of such maximum prior to the effective date of
such maximum. Exercise of the option shall occur as provided in Section 8
hereof, unless the participant has withdrawn pursuant to Section 10 hereof. The
option shall expire on the last day of the Plan Year.
8. EXERCISE OF OPTION.
(a) Unless a participant withdraws from the Plan as provided in Section 10
hereof, his or her option for the purchase of shares shall be exercised
automatically on the Exercise Date, and the maximum number of full shares
subject to option shall be purchased for such participant at the applicable
Purchase Price with the accumulated payroll deductions in his or her account. No
fractional shares shall be purchased; any payroll deductions accumulated in a
participant's account which are not sufficient to purchase a full share shall be
retained in the participant's account for the subsequent Plan Year, subject to
earlier withdrawal by the participant as provided in Section 10 hereof. Any
other monies left over in a participant's account after the
I-3
<PAGE> 27
Exercise Date shall be returned to the participant. During a participant's
lifetime, a participant's option to purchase shares hereunder is exercisable
only by him or her.
(b) If the Committee determines that, on a given Exercise Date, the number
of shares with respect to which options are to be exercised may exceed (i) the
number of shares of Common Stock that were available for sale under the Plan on
the Grant Date of the applicable Plan Year, or (ii) the number of shares
available for sale under the Plan on such Exercise Date, the Committee may in
its sole discretion (x) provide that the Company shall make a pro rata
allocation of the shares of Common Stock available for purchase on such Grant
Date or Exercise Date, as applicable, in as uniform a manner as shall be
practicable and as it shall determine in its sole discretion to be equitable
among all participants exercising options to purchase Common Stock on such
Exercise Date, and continue the Plan Year then in effect, or (y) provide that
the Company shall make a pro rata allocation of the shares available for
purchase on such Grant Date or Exercise Date, as applicable, in as uniform a
manner as shall be practicable and as it shall determine in its sole discretion
to be equitable among all participants exercising options to purchase Common
Stock on such Exercise Date, and terminate the Plan Year then in effect pursuant
to Section 20 hereof. The Company may make pro rata allocation of the shares
available on the Grant Date of any applicable Plan Year pursuant to the
preceding sentence, notwithstanding any authorization of additional shares for
issuance under the Plan by the Company's shareholders subsequent to such Grant
Date.
9. DELIVERY OF STOCK CERTIFICATES; RESTRICTIONS ON RESALE.
(a) As promptly as practicable after each Exercise Date on which a purchase
of shares occurs, the Company shall instruct its transfer agent to prepare and
deliver to the Human Resources Department of the Company one or more
certificates representing the shares purchased upon exercise by each participant
in the Plan, which shall be held in escrow by the Company for the benefit of
each such participant until the expiration of the Company's repurchase option
described in Section 9(b) below. As promptly as practicable after the
termination of such repurchase option, the Company shall deliver to each
participant each certificate held in escrow by the Company for the benefit of
such participant for which the option has so terminated.
(b) If a participant or former participant proposes to dispose of a share
of Common Stock obtained under the Plan (i) prior to two years after the date on
which the option to purchase such share of Common Stock was granted, or (ii)
prior to one year after the Exercise Date on which the option to purchase such
share of Common Stock was exercised, that participant or former participant must
immediately deliver to the Committee written notice of such proposed
disposition. Upon receipt of such notice, the Company shall have the exclusive
option, for a period of ten (10) days after receipt of such notice, to purchase
such Common Stock for a price equal to the lesser of (i) the Purchase Price for
such shares or (ii) the Fair Market Value of such Common Stock on the date of
such repurchase. If the Company does not elect to exercise its option to
purchase such Common Stock, then the participant or former participant may
proceed with the proposed disposition.
10. WITHDRAWAL.
(a) A participant may withdraw all but not less than all the payroll
deductions credited to his or her account and not yet used to exercise his or
her option under the Plan at any time by giving written notice to the Company in
the form of Exhibit B to this Plan. All of the participant's payroll deductions
credited to his or her account shall be paid to such participant promptly after
receipt of notice of withdrawal and such participant's option for the Plan Year
shall be automatically terminated, and no further payroll deductions for the
purchase of shares shall be made for such Plan Year. If a participant withdraws
from a Plan Year, payroll deductions shall not resume at the beginning of the
succeeding Plan Year unless the participant delivers to the Company a new
enrollment form.
(b) A participant's withdrawal from a Plan Year shall not have any effect
upon his or her eligibility to participate in any similar plan which may
hereafter be adopted by the Company or in succeeding Plan Years which commence
after the termination of the Plan Year from which the participant withdraws.
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<PAGE> 28
11. TERMINATION OF EMPLOYMENT.
(a) Upon a participant's ceasing to be an Employee as a result of such
Employee's death, disability, or retirement (each, a "Termination Event"), the
Plan Year then in progress with respect to such participant shall be shortened
by setting a new Exercise Date for such participant, which shall be the last day
of the month in which the Termination Event occurs (the "Termination Event
Exercise Date"). The participant's option shall be deemed to have been exercised
automatically on the Termination Event Exercise Date.
(b) Upon a participant's ceasing to be an Employee other than by reason of
such Employee's death, disability or retirement, he or she shall be deemed to
have elected to withdraw from the Plan and the payroll deductions credited to
such participant's account during the Plan Year but not yet used to exercise the
option shall be returned to such participant or, in the case of his or her
death, to the person or persons entitled thereto under Section 15 hereof, and
such participant's option shall be automatically terminated.
12. INTEREST.
No interest shall accrue on the payroll deductions of a participant in the
Plan.
13. STOCK.
(a) Subject to adjustment upon changes in capitalization of the Company as
provided in Section 19 hereof, the maximum number of shares of the Company's
Common Stock which shall be made available for sale under the Plan shall be One
Million Shares (1,000,000) shares, plus an annual increase to be added on the
first day of the Company's fiscal year beginning in 2001 equal to the lesser of
(i) 100,000 shares or (ii) a lesser amount determined by the Board.
(b) The participant shall have no interest or voting right in shares
covered by his option until such option has been exercised.
(c) Shares to be delivered to a participant under the Plan shall be
registered in the name of the participant or in the name of the participant and
his or her spouse.
14. ADMINISTRATION.
The Plan shall be administered by the Committee. The Committee shall have
full power and authority to administer the Plan, to interpret and construe any
provision of the Plan finally and conclusively with respect to all persons
having any interest thereunder, to adopt rules and regulations not inconsistent
with the Plan for carrying out the Plan, providing for matters not specifically
covered thereby, and to alter, amend or revoke any rules or regulations so
adopted. Every finding, decision and determination made by the Board or the
Committee shall, to the full extent permitted by law, be final and binding upon
all parties.
15. DESIGNATION OF BENEFICIARY.
(a) A participant may file a written designation of a beneficiary who is to
receive any shares and cash, if any, from the participant's account under the
Plan in the event of such participant's death subsequent to an Exercise Date on
which the option is exercised but prior to delivery to such participant of such
shares and cash. In addition, a participant may file a written designation of a
beneficiary who is to receive any cash from the participant's account under the
Plan in the event of such participant's death prior to exercise of the option.
(b) Such designation of beneficiary may be changed by the participant at
any time by written notice. In the event of the death of a participant and in
the absence of a beneficiary validly designated under the Plan who is living at
the time of such participant's death, the Company shall deliver such shares
and/or cash to the executor or administrator of the estate of the participant,
or if no such executor or administrator has been appointed (to the knowledge of
the Company), the Company, in its discretion, may deliver such shares and/or
cash to the spouse or to any one or more dependents or relatives of the
participant, or if no spouse, dependent or relative is known to the Company,
then to such other person as the Company may designate.
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<PAGE> 29
16. TRANSFERABILITY.
Neither payroll deductions credited to a participant's account nor any
rights with regard to the exercise of an option or to receive shares under the
Plan may be assigned, transferred, pledged or otherwise disposed of in any way
(other than by will, the laws of descent and distribution or as provided in
Section 15 hereof) by the participant. Any such attempt at assignment, transfer,
pledge or other disposition shall be without effect, except that the Company may
treat such act as an election to withdraw funds from a Plan Year in accordance
with Section 10 hereof.
17. USE OF FUNDS.
All payroll deductions received or held by the Company under the Plan may
be used by the Company for any corporate purpose, and the Company shall not be
obligated to segregate such payroll deductions.
18. REPORTS.
Individual accounts shall be maintained for each participant in the Plan.
Statements of account shall be given to participating Employees at least
annually, which statements shall set forth the amounts of payroll deductions,
the Purchase Price, the number of shares purchased and the remaining cash
balance, if any.
19. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION, DISSOLUTION, LIQUIDATION, MERGER
OR ASSET SALE.
(a) Changes in Capitalization. Subject to any required action by the
shareholders of the Company, the maximum number of shares which have been
authorized for issuance under the Plan but not yet placed under option, the
maximum number of shares each participant may purchase each Plan Year (pursuant
to Section 7), as well as the price per share and the number of shares of Common
Stock covered by each option under the Plan which has not yet been exercised
shall be proportionately adjusted for any increase or decrease in the number of
issued shares of Common Stock resulting from a stock split, reverse stock split,
stock dividend, combination or reclassification of the Common Stock, or any
other increase or decrease in the number of shares of Common Stock effected
without receipt of consideration by the Company; provided, however, that
conversion of any convertible securities of the Company shall not be deemed to
have been "effected without receipt of consideration". Such adjustment shall be
made by the Committee, whose determination in that respect shall be final,
binding and conclusive. Except as expressly provided herein, no issuance by the
Company of shares of stock of any class, or securities convertible into shares
of stock of any class, shall affect, and no adjustment by reason thereof shall
be made with respect to, the number or price of shares of Common Stock subject
to an option.
(b) Dissolution or Liquidation. In the event of the proposed dissolution
or liquidation of the Company, the Plan Year then in progress shall be shortened
by setting a new Exercise Date (the "Dissolution or Liquidation Exercise Date"),
and shall terminate immediately prior to the consummation of such proposed
dissolution or liquidation, unless provided otherwise by the Board. The
Dissolution or Liquidation Exercise Date shall be before the date of the
Company's proposed dissolution or liquidation. The Committee shall notify each
participant in writing, at least ten (10) business days prior to the Dissolution
or Liquidation Exercise Date, that the Exercise Date for the participant's
option has been changed to the Dissolution or Liquidation Exercise Date and that
the participant's option shall be exercised automatically on the Dissolution or
Liquidation Exercise Date, unless prior to such date the participant has
withdrawn from the Plan Year as provided in Section 10 hereof.
(c) Merger or Asset Sale. In the event of a proposed sale of all or
substantially all of the assets of the Company, or the merger of the Company
with or into another corporation, in a transaction in which the Company is not
the surviving corporation of such merger, each outstanding option shall be
assumed or an equivalent option substituted by the successor corporation or a
parent or Subsidiary of the successor corporation. In the event that the
successor corporation refuses to assume or substitute for the option, the Plan
Year then in progress shall be shortened by setting a new Exercise Date (the
"Merger or Asset Sale Exercise Date") and any Plan Years then in progress shall
end on the Merger or Asset Sale Exercise Date. The Merger or Asset Sale Exercise
Date shall be before the date of the Company's proposed sale or merger. The
Committee shall notify each participant in writing, at least ten (10) business
days prior to the Merger or Asset
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<PAGE> 30
Sale Exercise Date, that the Exercise Date for the participant's option has been
changed to the Merger or Asset Sale Exercise Date and that the participant's
option shall be exercised automatically on the Merger or Asset Sale Exercise
Date, unless prior to such date the participant has withdrawn from the Plan Year
as provided in Section 10 hereof.
20. AMENDMENT OR TERMINATION.
(a) The Board (or the Committee) may at any time and for any reason
terminate or amend the Plan. Except as provided in Section 19 hereof, no such
termination can affect options previously granted, provided that a Plan Year may
be terminated by the Board on any Exercise Date if the Board determines that the
termination of the Plan Year or the Plan is in the best interests of the Company
and its shareholders. Except as provided in Section 19 and this Section 20
hereof, no amendment may make any change in any option theretofore granted which
adversely affects the rights of any participant. To the extent necessary to
comply with Section 423 of the Code (or any successor rule or provision or any
other applicable law, regulation or stock exchange rule), the Company shall
obtain shareholder approval in such a manner and to such a degree as required.
(b) Without shareholder consent and without regard to whether any
participant rights may be considered to have been "adversely affected," the
Board (or the Committee) shall be entitled to change the Plan Years, limit the
frequency and/or number of changes in the amount withheld during a Plan Year,
establish the exchange ratio applicable to amounts withheld in a currency other
than U.S. dollars, permit payroll withholding in excess of the amount designated
by a participant in order to adjust for delays or mistakes in the Company's
processing of properly completed withholding elections, establish reasonable
waiting and adjustment periods and/or accounting and crediting procedures to
ensure that amounts applied toward the purchase of Common Stock for each
participant properly correspond with amounts withheld from the participant's
Compensation, and establish such other limitations or procedures as the Board
(or the Committee) determines in its sole discretion to be advisable which are
consistent with the Plan.
(c) In the event the Committee determines that the ongoing operation of the
Plan may result in unfavorable financial accounting consequences, the Committee
may, in its discretion and, to the extent necessary or desirable, modify or
amend the Plan to reduce or eliminate such accounting consequence including, but
not limited to:
(1) altering the Purchase Price for any Plan Year including a Plan
Year underway at the time of the change in Purchase Price;
(2) shortening any Plan Year so that Plan Year ends on a new Exercise
Date, including a Plan Year underway at the time of the Committee action;
and
(3) allocating shares.
Such modifications or amendments shall not require stockholder approval or
the consent of any Plan participants.
21. NOTICES.
All notices or other communications by a participant to the Company under
or in connection with the Plan shall be deemed to have been duly given when
received in the form specified by the Company at the location, or by the person,
designated by the Company for the receipt thereof.
22. CONDITIONS UPON ISSUANCE OF SHARES.
Shares shall not be issued with respect to an option unless the exercise of
such option and the issuance and delivery of such shares pursuant thereto shall
comply with all applicable provisions of law, domestic or foreign, including,
without limitation, the Securities Act of 1933, as amended, the Securities
Exchange Act of 1934, as amended, the rules and regulations promulgated
thereunder, and the requirements of any stock exchange upon which the shares may
then be listed, and shall be further subject to the approval of counsel for the
Company with respect to such compliance.
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<PAGE> 31
As a condition to the exercise of an option, the Company may require the
person exercising such option to represent and warrant at the time of any such
exercise that the shares are being purchased only for investment and without any
present intention to sell or distribute such shares if, in the opinion of
counsel for the Company, such a representation is required by any of the
aforementioned applicable provisions of law.
23. TERM OF PLAN.
The Plan shall become effective upon the earlier to occur of its adoption
by the Board or its approval by the shareholders of the Company and shall
continue in effect for a term of ten (10) years unless sooner terminated under
Section 20 hereof; provided, however, that the Plan shall be null and void and
of no force and effect in the event that the shareholders of the Company fail to
approve the Plan within twelve (12) months after its adoption by the Board.
24. GOVERNING LAW.
The law of the State of Delaware will govern all matters relating to this
Plan except to the extent it is superseded by the laws of the United States.
25. NO CONTINUED EMPLOYMENT.
The Plan does not constitute a contract of employment or continued service,
and participation in the Plan will not give any Employee the right to be
retained in the employ of the Company or any right or claim to any benefit under
the Plan unless such right or claim has specifically accrued under the terms of
the Plan.
26. TREATMENT AS STOCKHOLDER.
Any contribution made by a participant under the Plan shall not create any
rights in such participant as a stockholder of the Company until shares of
Common Stock are registered in the name of such person.
27. NO LIABILITY.
No liability whatsoever shall attach to or be incurred by any past, present
or future shareholders, officers, directors or members of any committee of the
Board, as such, of the Company, under or by reason of any of the terms,
conditions or agreements contained in the Plan or implied therefrom, any and all
liabilities of, and any and all rights and claims against the Company, or any
shareholder, officer, director or committee member, as such, whether arising at
common law or in equity or created by statute or constitution or otherwise,
pertaining to the Plan, are hereby expressly waived and released by every
participant, as a part of the consideration for any benefits provided by the
Company under the Plan.
28. INDEMNIFICATION.
With respect to administration of the Plan, the Company shall indemnify
each past, present and future member of the Committee and the Board against, and
each member of the Committee and the Board shall be entitled without further act
on his or her part to indemnity from the Company, for all expenses (including
the amount of judgments and the amount of approved settlements made with a view
to the curtailment of costs of litigation, other than amounts paid to the
Company itself) reasonably incurred by him in connection with or arising out of
any action, suit or proceeding in which he or she may be involved by reason of
his or her being or having been a member of the Committee or the Board, whether
or not he or she continues to be a member of the Committee or the Board at the
time of incurring such expenses; provided, however, that such indemnify shall
not include any expenses incurred by any member of the Committee or the Board
(a) in respect of matters as to which he or she shall be finally adjudged in any
such action, suit or proceeding to have been guilty of gross negligence or
willful misconduct in the performance of his or her duty as a member of the
Committee or the Board, or (b) in respect of any matter in which any settlement
is effected, to an amount in excess of the amount approved by the Company on the
advice of its legal counsel; and provided, further, that no right of
indemnification under the provisions set forth herein shall be available to or
enforceable by any member of the Committee or the Board unless, within 60 days
after institution of any such action, suit or proceeding, he or she shall have
offered the Company, in writing, the opportunity to handle and defend same at
its own expense. The foregoing right of indemnification shall inure to the
benefit of the heirs, executors or administrators of each member of the
Committee and the Board and shall be in addition to all other rights to which
such member of the Committee or the Board may be entitled as a matter of law,
contract, or otherwise.
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<PAGE> 32
EXHIBIT 2
LONG-TERM INCENTIVE PLAN
SOUTHTRUST CORPORATION
JANUARY 1, 1996
(AMENDED AND RESTATED AS OF JANUARY 1, 2000)
<PAGE> 33
CONTENTS
<TABLE>
<S> <C> <C>
Article 1. Establishment, Objectives, and Duration....................................................... 1
Article 2. Definitions................................................................................... 1
Article 3. Administration................................................................................ 6
Article 4. Shares Subject to the Plan and Maximum Awards................................................. 6
Article 5. Eligibility and Participation................................................................. 7
Article 6. Stock Options................................................................................. 7
Article 7. Stock Appreciation Rights..................................................................... 10
Article 8. Restricted Stock.............................................................................. 11
Article 9. Performance Units and Performance Shares...................................................... 13
Article 10. Performance Measures.......................................................................... 15
Article 11. Beneficiary Designation....................................................................... 16
Article 12. Deferrals..................................................................................... 16
Article 13. Rights of Employees........................................................................... 16
Article 14. Change In Control............................................................................. 16
Article 15. Amendment, Modification, and Termination...................................................... 17
Article 16. Withholding................................................................................... 18
Article 17. Indemnification............................................................................... 18
Article 18. Successors.................................................................................... 19
Article 19. Legal Construction............................................................................ 19
</TABLE>
<PAGE> 34
SOUTHTRUST CORPORATION
LONG-TERM INCENTIVE PLAN
ARTICLE 1. ESTABLISHMENT, OBJECTIVES, AND DURATION
1.1 ESTABLISHMENT OF THE PLAN. SouthTrust Corporation, a Delaware
corporation (hereinafter referred to as the "Company"), has established an
incentive compensation plan to be known as the "SouthTrust Corporation
Long-Term Incentive Plan" (hereinafter referred to as the "Plan"), as set forth
in this document. The Plan permits the grant of Nonqualified Stock Options,
Incentive Stock Options, Stock Appreciation Rights, Restricted Stock,
Performance Shares and Performance Units.
The Plan became effective as of January 1, 1996 (the "Effective Date").
Subject to approval by the Company's stockholders, the Plan is hereby amended
and restated as of January 1, 2000. The Plan shall remain in effect as provided
in Section 1.3 hereof.
1.2 OBJECTIVES OF THE PLAN. The objectives of the Plan are to
optimize the profitability and growth of the Company through incentives which
are consistent with the Company's objectives and which link the interests of
Participants to those of the Company's stockholders; to provide Participants
with an incentive for excellence in individual performance; and to promote
teamwork among Participants.
The Plan is further intended to provide flexibility to the Company in
its ability to motivate, attract, and retain the services of Participants who
make significant contributions to the Company's success and to allow
Participants to share in the success of the Company.
1.3 DURATION OF THE PLAN. The Plan shall commence on the Effective
Date, as described in Section 1.1 hereof, and shall remain in effect, subject
to the right of the Board of Directors to amend or terminate the Plan at any
time pursuant to Article 15 hereof, until all Shares subject to it shall have
been purchased or acquired according to the Plan's provisions. However, in no
event may an Award be granted under the Plan on or after January 1, 2006.
ARTICLE 2. DEFINITIONS
Whenever used in the Plan, the following terms shall have the meanings
set forth below, and when the meaning is intended, the initial letter of the
word shall be capitalized:
2.1 "AWARD" means, individually or collectively, a grant under
this Plan of Nonqualified Stock Options, Incentive Stock Options, Stock
Appreciation Rights, Restricted Stock, Performance Shares and Performance
Units.
2.2 "AWARD AGREEMENT" means an agreement entered into by the
Company and each Participant setting forth the terms and provisions applicable
to Awards granted under this Plan.
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<PAGE> 35
2.3 "BENEFICIAL OWNER" OR "BENEFICIAL OWNERSHIP" shall have the
meaning ascribed to such term in Rule 13d-3 of the General Rules and
Regulations under the Exchange Act.
2.4 "BOARD" OR "BOARD OF DIRECTORS" means the Board of Directors
of the Company.
2.5 "CHANGE IN CONTROL" of the Company shall be deemed to have
occurred if:
(a) Any "person" (as such term is used in Sections 13(d) and 14(d)
of the Securities Exchange Act of 1934 (the "Exchange Act") as
in effect as of the date of this Agreement), other than the
Company or any "person" who as of the Effective Date is a
director or officer of the Company or whose shares of Common
Stock of the Company are treated as "beneficially owned" (as
such term is defined in Rule 13d-3 of the Exchange Act as in
effect as of the Effective Date) by any such director or
officer, is or becomes the beneficial owner, directly or
indirectly, of securities of the Company representing 20% or
more of the combined voting power of the Company's then
outstanding securities;
(b) Individuals who, as of the Effective Date, constitute the
Board of Directors (the "Board") of the Company
(the "Incumbent Board") cease for any reason to constitute at
least a majority of the Board, provided, however, that any
individual becoming a director subsequent to the date hereof
whose election, or nomination for election, was approved by a
vote of at least a majority of the directors comprising the
Incumbent Board shall be considered as though such individual
were a member of the Incumbent Board, but excluding for this
purpose any such individual whose initial assumption of
office occurs as a result of either an actual or threatened
election contest (as such terms are used in Regulation 14A
promulgated under the Exchange Act) or other actual or
threatened solicitation of proxies or consents by or on
behalf of a person other than the Board;
(c) The shareholders of the Company approve a reorganization,
merger or consolidation of the Company, unless, following
such reorganization, merger or consolidation, (i) more than
60% of, respectively, the then outstanding shares of common
stock of the corporation resulting from such reorganization,
merger or consolidation and the combined voting power of the
then outstanding voting securities of such corporation
entitled to vote generally in the election of the directors
is then beneficially owned, directly or indirectly, by all or
substantially all of the individuals and entities who were
the beneficial owners, respectively, of the outstanding
Common Stock of the Company and outstanding voting securities
of the Company immediately prior to such reorganization,
merger or consolidation in substantially these same
proportions as their ownership, immediately prior to such
reorganization, merger or consolidation, of the outstanding
Common Stock of the Company and the outstanding voting
securities of the Company, as the case may be, (ii) no person
(excluding the Company, any employee benefit plan (or related
trust) of the Company or such corporation resulting from such
reorganization, merger or consolidation and any person
beneficially owning, immediately prior to any reorganization,
merger or consolidation, directly or indirectly, 20% or more
of the outstanding Common Stock of the Company or outstanding
voting securities of the
2
<PAGE> 36
Company, as the case may be), beneficially owns, directly or
indirectly, 20% or more of, respectively, the then
outstanding shares of common stock of the corporation
resulting from such reorganization, merger or consolidation
or the combined voting power of the then outstanding voting
securities of such corporation entitled to vote generally in
the election of directors, and (iii) at least a majority of
the members of the board of directors of the corporation
resulting from such reorganization, merger or consolidation
were members of the Incumbent Board at the time of the
execution of the initial agreement providing for such
reorganization, merger or consolidation; or
(d) The shareholders of the Company approve (i) a complete
liquidation or dissolution of the Company or (ii) the sale or
other disposition of all or substantially all of the assets
of the Company, other than to a corporation, with respect to
which following such sale or other disposition, (A) more than
60% of, respectively, the then outstanding shares of common
stock of such corporation and the combined voting power of
the then outstanding voting securities of such corporation
entitled to vote generally in the election of directors is
then beneficially owned, directly or indirectly, by all or
substantially all of the individuals and entities who were
the beneficial owners, respectively, of the outstanding
Common Stock of the Company and the outstanding voting
securities of the Company immediately prior to such sale or
other disposition in substantially the same proportions as
their ownership, immediately prior to such sale or other
disposition, of the outstanding Common Stock of the Company
and outstanding voting securities of the Company, as the case
may be, (B) no person (excluding the Company, any employee
benefit plan (or related trust) of the Company or such
corporation resulting from such reorganization, merger or
consolidation, and any person beneficially owning,
immediately prior to such sale or other disposition, directly
or indirectly, 20% or more of the outstanding Common Stock of
the Company or the outstanding voting securities of the
Company, as the case may be), beneficially owns, directly or
indirectly, 20% or more, respectively, of the then
outstanding shares of Common Stock of such corporation and
the combined voting power of the then outstanding voting
securities of such corporation entitled to vote generally in
the election of directors, and (C) at least a majority of the
members of the board of directors of the corporation
resulting from such reorganization, merger or consolidation
were members of the Incumbent Board at the time of the
execution of the initial agreement providing for such sale or
other disposition of assets of the Company.
2.6 "CODE" means the Internal Revenue Code of 1986, as amended
from time to time.
2.7 "COMMITTEE" means the Human Resources Committee of the Board,
as specified in Article 3 herein, or such other Committee appointed by the Board
to administer the Plan with respect to grants of Awards.
2.8 "COMPANY" means SouthTrust Corporation, a Delaware
corporation, together with any and all Subsidiaries, and any successor thereto
as provided in Article 18 herein.
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<PAGE> 37
2.9 "COVERED EMPLOYEE" means a Participant who, as of the date of
vesting and/or payout of an Award, as applicable, is one of the group of
"covered employees," as defined in the regulations promulgated under Code
Section 162(m), or any successor statute.
2.10 "DIRECTOR" means any individual who is a member of the Board
of Directors of the Company.
2.11 "DISABILITY" shall have the meaning ascribed to such term in
the Participant's governing long-term disability plan.
2.12 "EFFECTIVE DATE" shall have the meaning ascribed to such term
in Section 1.1 hereof.
2.13 "EMPLOYEE" means any full-time, active employee of the
Company. Directors who are not employed by the Company shall not be considered
Employees under this Plan.
2.14 "EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended from time to time, or any successor act thereto.
2.15 "FAIR MARKET VALUE" shall be determined on the basis of the
closing or last sales price on the principal securities exchange on which the
Shares are traded or, if there is no such sale on the relevant date, then on
the last previous day on which a sale was reported.
2.16 "FREESTANDING SAR" means an SAR that is granted independently
of any Options, as described in Article 7 herein.
2.17 "INCENTIVE STOCK OPTION" OR "ISO" means an option to purchase
Shares granted under Article 6 herein and which is designated as an Incentive
Stock Option and which is intended to meet the requirements of Code Section
422.
2.18 "INSIDER" shall mean an individual who is, on the relevant
date, an officer, director or ten percent (10%) beneficial owner of any class
of the Company's equity securities that is registered pursuant to Section 12 of
the Exchange Act, all as defined under Section 16 of the Exchange Act.
2.19 "NONEMPLOYEE DIRECTOR" means an individual who is a member of
the Board of Directors of the Company but who is not an Employee of the
Company.
2.20 "NONQUALIFIED STOCK OPTION" OR "NQSO" means an option to
purchase Shares granted under Article 6 herein and which is not intended to
meet the requirements of Code Section 422.
2.21 "OPTION" means an Incentive Stock Option or a Nonqualified
Stock Option, as described in Article 6 herein.
2.22 "OPTION PRICE" means the price at which a Share may be
purchased by a Participant pursuant to an Option.
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<PAGE> 38
2.23 "PARTICIPANT" means an Employee who has outstanding an Award
granted under the Plan. The term "Participant" shall not include Nonemployee
Directors.
2.24 "PERFORMANCE-BASED EXCEPTION" means the performance-based
exception from the tax deductibility limitations of Code Section 162(m).
2.25 "PERFORMANCE SHARE" means an Award granted to a Participant,
as described in Article 9 herein.
2.26 "PERFORMANCE UNIT" means an Award granted to a Participant, as
described in Article 9 herein.
2.27 "PERIOD OF RESTRICTION" means the period during which the
transfer of Shares of Restricted Stock is limited in some way (based on the
passage of time, the achievement of performance objectives, or upon the
occurrence of other events as determined by the Committee, at its discretion),
and the Shares are subject to a substantial risk of forfeiture, as provided in
Article 8 herein.
2.28 "PERSON" shall have the meaning ascribed to such term in
Section 3(a)(9) of the Exchange Act and used in Sections 13(d) and 14(d)
thereof, including a "group" as defined in Section 13(d) thereof.
2.29 "RESTRICTED STOCK" means an Award granted to a Participant
pursuant to Article 8 herein.
2.30 "RETIREMENT" shall have the meaning ascribed to such term in
the Company's tax-qualified defined benefit retirement plan.
2.31 "SHARES" means the shares of Common Stock of the Company.
2.32 "STOCK APPRECIATION RIGHT" OR "SAR" means an Award, granted
alone or in connection with a related Option, designated as an SAR, pursuant to
the terms of Article 7 herein.
2.33 "SUBSIDIARY" means any corporation, partnership, joint venture
or other entity in which the Company has a majority voting interest.
2.34 "TANDEM SAR" means an SAR that is granted in connection with a
related Option pursuant to Article 7 herein, the exercise of which shall
require forfeiture of the right to purchase a Share under the related Option
(and when a Share is purchased under the Option, the Tandem SAR shall similarly
be canceled).
ARTICLE 3. ADMINISTRATION
3.1 THE COMMITTEE. The Plan shall be administered by the Human
Resources Committee of the Board, or by any other Committee appointed by the
Board, which Committee shall satisfy the "disinterested administration" rules
of Rule 16b-3 under the Exchange Act, as in effect
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and applicable to the Company as of the Effective Date or as in effect and
applicable to the Company as of any date subsequent to the Effective Date, and
which Committee shall satisfy the "outside director" rules of Code Section
162(m). The members of the Committee shall be appointed from time to time by,
and shall serve at the discretion of, the Board of Directors.
3.2 AUTHORITY OF THE COMMITTEE. Except as limited by law or by the
Certificate of Incorporation or Bylaws of the Company, and subject to the
provisions herein, the Committee shall have full power to select Employees who
shall participate in the Plan; determine the sizes and types of Awards;
determine the terms and conditions of Awards in a manner consistent with the
Plan; construe and interpret the Plan and any agreement or instrument entered
into under the Plan as they apply to Employees; establish, amend, or waive
rules and regulations for the Plan's administration as they apply to Employees;
and (subject to the provisions of Article 15 herein) amend the terms and
conditions of any outstanding Award to the extent such terms and conditions are
within the discretion of the Committee as provided in the Plan. Further, the
Committee shall make all other determinations which may be necessary or
advisable for the administration of the Plan, as the Plan applies to Employees.
As permitted by law, the Committee may delegate its authority as identified
herein.
3.3 DECISIONS BINDING. All determinations and decisions made by
the Committee pursuant to the provisions of the Plan and all related orders and
resolutions of the Board shall be final, conclusive and binding on all persons,
including the Company, its stockholders, Employees, Participants, and their
estates and beneficiaries.
ARTICLE 4. SHARES SUBJECT TO THE PLAN AND MAXIMUM AWARDS
4.1 NUMBER OF SHARES AVAILABLE FOR GRANTS. Subject to adjustment
as provided in Section 4.3 herein, the number of Shares hereby reserved for
issuance to Participants under the Plan shall be 12,300,000 Shares, which
includes the Shares authorized for issuance under the 1993 Stock Option Plan of
the Company that, as of the Effective Date, were not subject to outstanding
awards thereunder.
The following rules shall apply to grants of Awards under the Plan:
(a) The maximum aggregate number of Shares that may be granted,
paid out, or that may vest, as applicable, pursuant to any
Award granted in any one fiscal year to any single
Participant shall be 1,125,000 Shares.
(b) The maximum aggregate cash payout with respect to Awards
granted in any fiscal year which may be made to any
Participant shall be $3,000,000.
4.2 LAPSED AWARDS. If any Award granted under this Plan is
canceled, terminates, expires, or lapses for any reason (with the exception of
the termination of a Tandem SAR upon exercise of the related Option, or the
termination of a related Option upon exercise of the corresponding Tandem SAR),
any Shares subject to such Award again shall be available for the grant of an
Award under the Plan.
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4.3 ADJUSTMENTS IN AUTHORIZED SHARES. In the event of any change
in the number of outstanding Shares through the declaration and payment of a
stock dividend or stock split or through any recapitalization resulting in the
combination or exchange of Shares in which the Company does not receive any
consideration, a corresponding adjustment shall be made in the number and class
of Shares which may be delivered under Section 4.1, in the number and class of
and/or price of Shares subject to outstanding Awards granted under the Plan,
and in the Award limits set forth in subsections 4.1(a) and 4.1(b); provided,
however, that the number of Shares subject to any Award shall always be a whole
number; provided, further, that the Committee shall, in its sole discretion,
make any further adjustments as are necessary to prevent dilution or
enlargement of rights.
ARTICLE 5. ELIGIBILITY AND PARTICIPATION
5.1 ELIGIBILITY. Persons eligible to participate in this Plan
include all Employees of the Company, including Employees who are members of
the Board.
5.2 ACTUAL PARTICIPATION. Subject to the provisions of the Plan,
the Committee may, from time to time, select from all eligible Employees, those
to whom Awards shall be granted and shall determine the nature and amount of
each Award.
ARTICLE 6. STOCK OPTIONS
6.1 GRANT OF OPTIONS. Subject to the terms and provisions of the
Plan, Options may be granted to Participants in such number, and upon such
terms, and at any time and from time to time as shall be determined by the
Committee.
6.2 AWARD AGREEMENT. Each Option grant shall be evidenced by an
Award Agreement that shall specify the Option Price, the duration of the
Option, the number of Shares to which the Option pertains, and such other
provisions as the Committee shall determine. The Award Agreement also shall
specify whether the Option is intended to be an ISO within the meaning of Code
Section 422, or an NQSO whose grant is intended not to fall under the
provisions of Code Section 422.
6.3 OPTION PRICE. The Option Price for each grant of an Option
under this Plan shall be at least equal to one hundred percent (100%) of the
Fair Market Value of a Share on the date the Option is granted.
6.4 DURATION OF OPTIONS. Each Option granted to an Employee shall
expire at such time as the Committee shall determine at the time of grant;
provided, however, that no Option shall be exercisable later than the tenth
(10th) anniversary date of its grant.
6.5 DIVIDEND EQUIVALENTS. The Committee may grant dividend
equivalents in connection with Options granted under this Plan. Such dividend
equivalents may be payable in cash or in Shares, upon such terms as the
Committee, in its sole discretion, deems appropriate.
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6.6 EXERCISE OF OPTIONS. Options granted under this Article 6
shall be exercisable at such times and be subject to such restrictions and
conditions as the Committee shall in each instance approve, which need not be
the same for each grant or for each Participant.
6.7 PAYMENT. Options granted under this Article 6 shall be
exercised by the delivery of a written notice of exercise to the Company,
setting forth the number of Shares with respect to which the Option is to be
exercised, accompanied by full payment for the Shares.
The Option Price upon exercise of any Option shall be payable to the
Company in full either: (a) in cash or its equivalent, or (b) if permitted in
the governing Award Agreement, by tendering previously acquired Shares having
an aggregate Fair Market Value at the time of exercise equal to the total
Option Price (provided that the Shares which are tendered must have been held
by the Participant for at least six (6) months prior to their tender to satisfy
the Option Price), or (c) if permitted in the governing Award Agreement, by a
combination of (a) and (b).
The Committee also may allow cashless exercise as permitted under
Federal Reserve Board's Regulation T, subject to applicable securities law
restrictions, or by any other means which the Committee determines to be
consistent with the Plan's purpose and applicable law. In addition, the
Committee may authorize Company loans to Participants in connection with Option
exercises, upon such terms and subject to such limits that the Committee, in
its sole discretion, deems appropriate.
As soon as practicable after receipt of a written notification of
exercise and full payment, the Company shall deliver to the Participant, in the
Participant's name, Share certificates in an appropriate amount based upon the
number of Shares purchased under the Option(s).
6.8 RESTRICTIONS ON SHARE TRANSFERABILITY. In addition to the
foregoing, the Committee may impose such restrictions on any Shares acquired
pursuant to the exercise of an Option granted under this Article 6 as it may
deem advisable, including, without limitation, restrictions under applicable
Federal securities laws, under the requirements of any stock exchange or market
upon which such Shares are then listed and/or traded, and under any blue sky or
state securities laws applicable to such Shares.
6.9 TERMINATION OF EMPLOYMENT. In the event that 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. In
the event that the employment of a Participant is terminated prior to his
attaining age 60 by reason of death, Disability or Retirement, the rights under
each outstanding NQSO granted to such Participant pursuant to the Plan shall
terminate upon the expiration date of such NQSO or 12 months after such date of
termination of employment, whichever first occurs. In the event that the
employment of a Participant is terminated upon or after his attaining age 60 by
reason of death, Disability or Retirement, the rights under each
then-outstanding NQSO granted to such Participant pursuant to the Plan shall
terminate upon the expiration date of such NQSO. In addition to the foregoing,
the Committee may include such provisions in the Award Agreement entered into
with each Participant as it deems advisable, which provisions need not be
uniform among all Options issued pursuant to this Article 6, and may reflect
distinctions based on the reasons for termination of employment.
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6.10 NONTRANSFERABILITY OF OPTIONS.
(a) INCENTIVE STOCK OPTIONS. No ISO granted under the Plan may be
sold, transferred, pledged, assigned, or otherwise alienated
or hypothecated, other than by will or by the laws of descent
and distribution. Further, all ISOs granted to a Participant
under the Plan shall be exercisable during his or her
lifetime only by such Participant.
(b) NONQUALIFIED STOCK OPTIONS. No NQSO granted under the Plan
may be sold, transferred, pledged, or assigned, or otherwise
alienated or hypothecated by a Participant, other than by
will or by the laws of descent and distribution, and except
that the Committee, in its discretion, may provide that any
stock option agreement relating to any NQSO (i) 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 NQSO's to
third parties, (ii) shall be subject to all other conditions
and restrictions applicable to Options granted under the Plan
prior to such transfer and (iii) shall set forth 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 6.8 to be exempt pursuant to Rule 16b-3 of the
Securities Exchange Act of 1934; provided, however, that if
Rule 16b-3, or any comparable rule, as then in effect and
applicable to the Company, were to provide that transfers of
the type described in (i), (ii) and (iii) above shall result
in the NQSO's or the Plan being disqualified from the
exception afforded by Rule 16b-3, then such transfers shall
be prohibited under the Plan.
ARTICLE 7. STOCK APPRECIATION RIGHTS
7.1 GRANT OF SARS. Subject to the terms and conditions of the
Plan, SARs may be granted to Participants at any time and from time to time as
shall be determined by the Committee. The Committee may grant Freestanding SARs,
Tandem SARs, or any combination of these forms of SAR.
The Committee shall have complete discretion in determining the number
of SARs granted to each Participant (subject to Article 4 herein) and,
consistent with the provisions of the Plan, in determining the terms and
conditions pertaining to such SARs.
The grant price of a Freestanding SAR shall equal the Fair Market
Value of a Share on the date of grant of the SAR. The grant price of Tandem
SARs shall equal the Option Price of the related Option.
7.2 EXERCISE OF TANDEM SARS. Tandem SARs may be exercised for all
or part of the Shares subject to the related Option upon the surrender of the
right to exercise the equivalent portion of the related Option. A Tandem SAR
may be exercised only with respect to the Shares for which its related Option
is then exercisable.
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7.3 EXERCISE OF FREESTANDING SARS. Freestanding SARs may be
exercised upon whatever terms and conditions the Committee, in its sole
discretion, imposes upon them.
7.4 SAR AGREEMENT. Each SAR grant shall be evidenced by an Award
Agreement that shall specify the grant price, the term of the SAR, and such
other provisions as the Committee shall determine.
7.5 TERM OF SARS. The term of an SAR granted under the Plan shall
be determined by the Committee, in its sole discretion; provided, however, that
such term shall not exceed ten (10) years.
7.6 PAYMENT OF SAR AMOUNT. Upon exercise of an SAR, a Participant
shall be entitled to receive payment from the Company in an amount determined
by multiplying:
(a) The difference between the Fair Market Value of a Share on the
date of exercise over the grant price; by
(b) The number of Shares with respect to which the SAR is
exercised.
At the discretion of the Committee, the payment upon SAR exercise may
be in cash, in Shares of equivalent value, or in some combination thereof.
7.7 RULE 16B-3 REQUIREMENTS. Notwithstanding any other provision
of the Plan, the Committee may impose such conditions on exercise of an SAR
(including, without limitation, the right of the Committee to limit the time of
exercise to specified periods) as may be required to satisfy the requirements
of Section 16 of the Exchange Act (or any successor rule).
7.8 TERMINATION OF EMPLOYMENT. Each SAR Award Agreement shall set
forth the extent to which the Participant shall have the right to exercise the
SAR following termination of the Participant's employment with the Company.
Such provisions shall be determined in the sole discretion of the Committee,
shall be included in the Award Agreement entered into with Participants, need
not be uniform among all SARs issued pursuant to the Plan, and may reflect
distinctions based on the reasons for termination of employment.
7.9 NONTRANSFERABILITY OF SARS. Except as otherwise provided in a
Participant's Award Agreement, no SAR granted under the Plan may be sold,
transferred, pledged, assigned, or otherwise alienated or hypothecated, other
than by will or by the laws of descent and distribution, except that the
Committee, in its discretion, may provide that any Award Agreement evidencing
any SAR (i) 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 SARs to third parties, (ii) shall be subject
to all other conditions and restrictions applicable to SARs granted under the
Plan prior to such transfer and (iii) shall set forth the restrictions on
transfer described in (i) and (ii) above, as well as any other restriction
necessary to render the SARs not being transferred pursuant to this Section 7.9
to be exempt pursuant to Rule 16b-3 of the Securities Exchange Act of 1934;
provided, however, that if Rule 16b-3 or any comparable rule, as then in effect
and applicable to the Company, were to provide that transfers of the type
described in (i), (ii) and (iii) above shall result in the SARs or the Plan
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being disqualified from the exception afforded by Rule 16b-3, then such
transfers shall be prohibited under the Plan. Further, except as otherwise
provided in a Participant's Award Agreement, all SARs granted to a Participant
under the Plan shall be exercisable during his or her lifetime only by such
Participant.
ARTICLE 8. RESTRICTED STOCK
8.1 GRANT OF RESTRICTED STOCK. Subject to the terms and provisions
of the Plan, the Committee, at any time and from time to time, may grant Shares
of Restricted Stock to Participants in such amounts as the Committee shall
determine.
8.2 RESTRICTED STOCK AGREEMENT. Each Restricted Stock grant shall
be evidenced by a Restricted Stock Award Agreement that shall specify the
Period(s) of Restriction, the number of Shares of Restricted Stock granted, and
such other provisions as the Committee shall determine.
8.3 TRANSFERABILITY. Except as provided in this Article 8, the
Shares of Restricted Stock granted herein may not be sold, transferred,
pledged, assigned, or otherwise alienated or hypothecated until the end of the
applicable Period of Restriction established by the Committee and specified in
the Restricted Stock Award Agreement, or upon earlier satisfaction of any other
conditions, as specified by the Committee in its sole discretion and set forth
in the Restricted Stock Award Agreement, except that the Committee, in its
discretion, may provide any Restricted Stock Agreement relating to any
Restricted Stock (i) 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 Restricted Stock to third parties, (ii) shall
be subject to all the conditions and restrictions applicable to Restricted
Stock granted under the Plan prior to such transfer and (iii) shall set forth
the restrictions on transfers described in (i) and (ii) above, as well as any
other restriction necessary to render the Restricted Stock not being
transferred in accordance with this Section 8.3 to be exempt pursuant to Rule
16b-3 of the Securities Exchange Act of 1934; provided, however, that if Rule
16b-3 or any comparable rule, as then in effect and applicable to the Company,
were to provide that transfers of the type described in (i), (ii) and (iii)
above shall result in the Restricted Stock or the Plan being disqualified from
the exception afforded by Rule 16b-3, then such transfers shall be prohibited
under the Plan. All rights with respect to the Restricted Stock granted to a
Participant under the Plan shall be available during his or her lifetime only
to such Participant.
8.4 OTHER RESTRICTIONS. Subject to Article 11 herein, the
Committee shall impose such other conditions and/or restrictions on any Shares
of Restricted Stock granted pursuant to the Plan as it may deem advisable
including, without limitation, a requirement that Participants pay a stipulated
purchase price for each Share of Restricted Stock, restrictions based upon the
achievement of specific performance objectives (Company-wide, business unit,
and/or individual), time-based restrictions on vesting following the attainment
of the performance objectives, and/or restrictions under applicable Federal or
state securities laws.
The Company shall retain the certificates representing Shares of
Restricted Stock in the Company's possession until such time as all conditions
and/or restrictions applicable to such Shares have been satisfied.
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Except as otherwise provided in this Article 8, Shares of Restricted
Stock covered by each Restricted Stock grant made under the Plan shall become
freely transferable by the Participant after the last day of the applicable
Period of Restriction.
8.5 VOTING RIGHTS. During the Period of Restriction, Participants
holding Shares of Restricted Stock granted hereunder may exercise full voting
rights with respect to those Shares.
8.6 DIVIDENDS AND OTHER DISTRIBUTIONS. During the Period of
Restriction, Participants holding Shares of Restricted Stock granted hereunder
may be credited with regular cash dividends paid with respect to the underlying
Shares while they are so held. Such dividends may be paid currently, accrued as
contingent cash obligations, or converted into additional shares of Restricted
Stock, upon such terms as the Compensation Committee establishes.
The Committee may apply any restrictions to the dividends that the
Committee deems appropriate. Without limiting the generality of the preceding
sentence, if the grant or vesting of Restricted Shares granted to a Covered
Employee is designed to comply with the requirements of the Performance-Based
Exception, the Committee may apply any restrictions it deems appropriate to the
payment of dividends declared with respect to such Restricted Shares, such that
the dividends and/or the Restricted Shares maintain eligibility for the
Performance-Based Exception.
In the event that any dividend constitutes a "derivative security" or
an "equity security" pursuant to Rule 16(a) under the Exchange Act, such
dividend shall be subject to a vesting period equal to the remaining vesting
period of the Shares of Restricted Stock with respect to which the dividend is
paid.
8.7 TERMINATION OF EMPLOYMENT. Each Restricted Stock Award
Agreement shall set forth the extent to which the Participant shall have the
right to retain unvested Restricted Shares following termination of the
Participant's employment with the Company. Such provisions shall be determined
in the sole discretion of the Committee, shall be included in the Award
Agreement entered into with each Participant, need not be uniform among all
Shares of Restricted Stock issued pursuant to the Plan, and may reflect
distinctions based on the reasons for termination of employment; provided,
however that, except in the cases of terminations connected with a Change in
Control and terminations by reason of death or Disability, the vesting of
Shares of Restricted Stock which qualify for the Performance-Based Exception
and which are held by Covered Employees shall not be accelerated.
ARTICLE 9. PERFORMANCE UNITS AND PERFORMANCE SHARES
9.1 GRANT OF PERFORMANCE UNITS/SHARES. Subject to the terms of the
Plan, Performance Units and/or Performance Shares may be granted to
Participants in such amounts and upon such terms, and at any time and from time
to time, as shall be determined by the Committee.
9.2 VALUE OF PERFORMANCE UNITS/SHARES. Each Performance Unit shall
have an initial value that is established by the Committee at the time of
grant. Each Performance Share shall have an initial value equal to the Fair
Market Value of a Share on the date of grant. The Committee shall set
performance objectives in its discretion which, depending on the extent to
which they are met,
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will determine the number and/or value of Performance Units/Shares that will be
paid out to the Participant. For purposes of this Article 9, the time period
during which the performance objectives must be met shall be called a
"Performance Period."
9.3 EARNING OF PERFORMANCE UNITS/SHARES. Subject to the terms of
this Plan, after the applicable Performance Period has ended, the holder of
Performance Units/Shares shall be entitled to receive payout on the number and
value of Performance Units/Shares earned by the Participant over the
Performance Period, to be determined as a function of the extent to which the
corresponding performance objectives have been achieved.
9.4 FORM AND TIMING OF PAYMENT OF PERFORMANCE UNITS/SHARES.
Payment of earned Performance Units/Shares shall be made within seventy-five
(75) calendar days following the close of the applicable Performance Period in
a manner designated by the Committee, in its sole discretion. Subject to the
terms of this Plan, the Committee, in its sole discretion, may pay earned
Performance Units/Shares in the form of cash or in Shares (or in a combination
thereof) which have an aggregate Fair Market Value equal to the value of the
earned Performance Units/Shares at the close of the applicable Performance
Period. Such Shares may be granted subject to any restrictions deemed
appropriate by the Committee.
At the discretion of the Committee, Participants may be entitled to
receive any dividends declared with respect to Shares which have been earned in
connection with grants of Performance Units and/or Performance Shares which
have been earned, but not yet distributed to Participants (such dividends shall
be subject to the same accrual, forfeiture, and payout restrictions as apply to
dividends earned with respect to Shares of Restricted Stock, as set forth in
Section 8.6 herein). In addition, Participants may, at the discretion of the
Committee, be entitled to exercise their voting rights with respect to such
Shares.
9.5 TERMINATION OF EMPLOYMENT DUE TO DEATH, DISABILITY, OR
RETIREMENT. Unless determined otherwise by the Committee and set forth in the
Participant's Award Agreement, in the event the employment of a Participant is
terminated by reason of death, Disability or Retirement during a Performance
Period, the Participant shall receive a payout of the Performance Units/Shares
which is prorated, as specified by the Committee in its discretion.
Payment of earned Performance Units/Shares shall be made at a time
specified by the Committee in its sole discretion and set forth in the
Participant's Award Agreement. Notwithstanding the foregoing, with respect to
Covered Employees who retire during a Performance Period, payments shall be
made at the same time as payments are made to Participants who did not
terminate employment during the applicable Performance Period.
9.6 TERMINATION OF EMPLOYMENT FOR OTHER REASONS. In the event that
a Participant's employment terminates for any reason other than those reasons
set forth in Section 9.5 herein, all Performance Units/Shares shall be
forfeited by the Participant to the Company unless determined otherwise by the
Committee, as set forth in the Participant's Award Agreement.
9.7 NONTRANSFERABILITY. Except as otherwise provided in a
Participant's Award Agreement, Performance Units/Shares may not be sold,
transferred, pledged, assigned, or otherwise alienated or hypothecated, other
than by will or by the laws of descent and distribution, except that
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the Committee, in its discretion, may provide that any Award Agreement relating
to any Performance Units/Shares (i) 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 Performance Shares/Units to third
parties, (ii) shall be subject to all other conditions and restrictions
applicable to Performance Shares/Units granted under the Plan prior to such
transfer and (iii) shall set forth the restrictions on transfers described in
(i) and (ii) above, as well as any other restriction necessary to render the
Performance Shares/Units not being transferred in accordance with this Section
9.7 to be exempt pursuant to Rule 16b-3 of the Securities and Exchange Act of
1934; provided, however, that if Rule 16b-3 or any comparable rule, as then in
effect and applicable to the Company, were to provide that transfers of the
type described in (i), (ii) and (iii) above shall result in the Performance
Units/Shares or the Plan being disqualified from the exception afforded by Rule
16b-3, then such transfer shall be prohibited under this Plan. Further, except
as otherwise provided in a Participant's Award Agreement, a Participant's
rights under the Plan shall be exercisable during the Participant's lifetime
only by the Participant or the Participant's legal representative.
ARTICLE 10. PERFORMANCE MEASURES
Unless and until the Committee proposes for shareholder vote and
shareholders approve a change in the general performance measures set forth in
this Article 10, the attainment of which may determine the degree of payout
and/or vesting with respect to Awards to Covered Employees which are designed
to qualify for the Performance-Based Exception, the performance measure(s) to
be used for purposes of such grants shall be chosen from among the following
alternatives:
(a) Return on average, and shareholder's equity of the Company;
(b) Return on average assets of the Company;
(c) Net income of the Company;
(d) Earnings per common share of the Company;
(e) Total shareholder return of the Company; and
(f) Such other criteria as may be established by the Committee in
writing and which meets the requirements of the
Performance-Based Exception.
The Committee shall have the discretion to adjust the determinations
of the degree of attainment of the preestablished performance objectives;
provided, however, that Awards which are designed to qualify for the
Performance-Based Exception, and which are held by Covered Employees, may not
be adjusted upward (the Committee shall retain the discretion to adjust such
Awards downward).
In the event that applicable tax and/or securities laws change to
permit Committee discretion to alter the governing performance measures without
obtaining shareholder approval of such changes, the Committee shall have sole
discretion to make such changes without obtaining
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shareholder-approval. In addition, in the event that the Committee determines
that it is advisable to grant Awards which shall not qualify for the
Performance-Based Exception, the Committee may make such grants without
satisfying the requirements of Code Section 162(m).
ARTICLE 11. BENEFICIARY DESIGNATION
Each Participant under the Plan may, from time to time, name any
beneficiary or beneficiaries (who may be named contingently or successively) to
whom any benefit under the Plan is to be paid in case of his or her death
before he or she receives any or all of such benefit. Each such designation
shall revoke all prior designations by the same Participant, shall be in a form
prescribed by the Company, and will be effective only when filed by the
Participant in writing with the Company during the Participant's lifetime. In
the absence of any such designation, benefits remaining unpaid at the
Participant's death shall be paid to the Participant's estate.
ARTICLE 12. DEFERRALS
The Committee may permit or require a Participant to defer such
Participant's receipt of the payment of cash or the delivery of Shares that
would otherwise be due to such Participant by virtue of the exercise of an
Option or SAR, the lapse or waiver of restrictions with respect to Restricted
Stock, or the satisfaction of any requirements or objectives with respect to
Performance Units/Shares. If any such deferral election is required or
permitted, the Committee shall, in its sole discretion, establish rules and
procedures for such payment deferrals.
ARTICLE 13. RIGHTS OF EMPLOYEES
13.1 EMPLOYMENT. Nothing in the Plan shall interfere with or limit
in any way the right of the Company to terminate any Participant's employment
at any time, nor confer upon any Participant any right to continue in the
employ of the Company.
13.2 PARTICIPATION. No Employee shall have the right to be selected
to receive an Award under this Plan, or, having been so selected, to be
selected to receive a future Award.
ARTICLE 14. CHANGE IN CONTROL
14.1 TREATMENT OF OUTSTANDING AWARDS. Upon the occurrence of a
Change in Control, unless otherwise specifically prohibited under applicable
laws, or by the rules and regulations of any governing governmental agencies or
national securities exchanges:
(a) Any and all Options and SARs granted hereunder shall become
immediately exercisable, and shall remain exercisable
throughout their entire term;
(b) Any restriction periods and restrictions imposed on
Restricted Shares shall lapse; provided, however, that the
degree of vesting associated with Restricted Stock which
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has been conditioned upon the achievement of performance
conditions pursuant to Section 8.4 herein shall be determined
in the manner set forth in Section 14.1(c) herein;
(c) The vesting of all Performance Units and Performance Shares
shall be accelerated as of the effective date of the Change
in Control, and there shall be paid out in cash to
Participants within thirty (30) days following the effective
date of the Change in Control a pro rata amount based upon an
assumed achievement of all relevant performance objectives at
target levels, and upon the length of time within the
Performance Period which has elapsed prior to the Change in
Control; provided, however, that in the event the Committee
determines that actual performance to the date of the Change
in Control exceeds targeted levels, the prorated payouts
shall be made at levels commensurate with such actual
performance (determined by extrapolating such actual
performance to the end of the Performance Period), based upon
the length of time within the Performance Period which has
elapsed prior to the Change in Control; and provided further,
that there shall not be an accelerated payout with respect to
Awards of Performance Units or Performance Shares which
qualify as "derivative securities" under Section 16 of the
Exchange Act which were granted less than six (6) months
prior to the effective date of the Change in Control.
14.2 TERMINATION, AMENDMENT, AND MODIFICATIONS OF CHANGE-IN-CONTROL
PROVISIONS. Notwithstanding any other provision of this Plan or any Award
Agreement provision, the provisions of this Article 14 may not be terminated,
amended, or modified on or after the date of a Change in Control to affect
adversely any Award theretofore granted under the Plan without the prior
written consent of the Participant with respect to said Participant's
outstanding Awards.
ARTICLE 15. AMENDMENT, MODIFICATION, AND TERMINATION
15.1 AMENDMENT, MODIFICATION, AND TERMINATION. Subject to Section
14.2 herein, the Board may at any time and from time to time, alter, amend,
suspend or terminate the Plan in whole or in part; provided, however, that no
amendment which requires shareholder approval in order for the Plan to continue
to comply with Rule 16b-3 under the Exchange Act, including any successor to
such Rule, shall be effective unless such amendment shall be approved by the
requisite vote of shareholders of the Company entitled to vote thereon.
The Committee shall not have the authority to cancel outstanding
Awards and issue substitute Awards in replacement thereof.
15.2 ADJUSTMENT OF AWARDS UPON THE OCCURRENCE OF CERTAIN UNUSUAL OR
NONRECURRING EVENTS. Subject to the restriction set forth in Article 10 herein
on the exercise of upward discretion with respect to Awards which have been
designed to comply with the Performance-Based Exception, the Committee may make
adjustments in the terms and conditions of, and the criteria included in,
Awards in recognition of unusual or nonrecurring events (including, without
limitation, the events described in Section 4.3 hereof) affecting the Company
or the financial statements of the Company or of changes in applicable laws,
regulations, or accounting principles, whenever the Committee determines that
such adjustments are appropriate in order to prevent
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dilution or enlargement of the benefits or potential benefits intended to be
made available under the Plan.
15.3 AWARDS PREVIOUSLY GRANTED. No termination, amendment, or
modification of the Plan shall adversely affect in any material way any Award
previously granted under the Plan, without the written consent of the
Participant holding such Award.
15.4 COMPLIANCE WITH CODE SECTION 162(M). At all times when Code
Section 162(m) is applicable, all Awards granted under this Plan shall comply
with the requirements of Code Section 162(m); provided, however, that in the
event the Committee determines that such compliance is not desired with respect
to any Award or Awards available for grant under the Plan, then compliance with
Code Section 162(m) will not be required. In addition, in the event that
changes are made to Code Section 162(m) to permit greater flexibility with
respect to any Award or Awards available under the Plan, the Committee may,
subject to this Article 15, make any adjustments it deems appropriate.
ARTICLE 16. WITHHOLDING
16.1 TAX WITHHOLDING. The Company shall have the power and the
right to deduct or withhold, or require a Participant to remit to the Company,
an amount sufficient to satisfy Federal, state, and local taxes, domestic or
foreign, required by law or regulation to be withheld with respect to any
taxable event arising as a result of this Plan.
16.2 SHARE WITHHOLDING. With respect to withholding required upon
the exercise of Options or SARs, upon the lapse of restrictions on Restricted
Stock, or upon any other taxable event arising as a result of Awards granted
hereunder, Participants may elect, subject to the approval of the Committee, to
satisfy the withholding requirement, in whole or in part, by having the Company
withhold Shares having a Fair Market Value on the date the tax is to be
determined equal to the minimum statutory total tax which could be withheld on
the transaction. All such elections shall be irrevocable, made in writing,
signed by the Participant, and shall be subject to any restrictions or
limitations that the Committee, in its sole discretion, deems appropriate.
ARTICLE 17. INDEMNIFICATION
Each person who is or shall have been a member of the Committee, or of
the Board, shall be indemnified and held harmless by the Company against and
from any loss, cost, liability, or expense that may be imposed upon or
reasonably incurred by him or her in connection with or resulting from any
claim, action, suit, or proceeding to which he or she may be a party or in
which he or she may be involved by reason of any action taken or failure to act
under the Plan and against and from any and all amounts paid by him or her in
settlement thereof, with the Company's approval, or paid by him or her in
satisfaction of any judgement in any such action, suit, or proceeding against
him or her, provided he or she shall give the Company an opportunity at its own
expense, to handle and defend the same before he or she undertakes to handle
and defend it on his or her own behalf. The foregoing right of indemnification
shall not be exclusive of any other rights of indemnification to which such
persons may be entitled under the Company's Articles of Incorporation or
Bylaws, as
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a matter of law, or otherwise, or any power that the Company may have to
indemnify them or hold them harmless.
ARTICLE 18. SUCCESSORS
All obligations of the Company under the Plan with respect to Awards
granted hereunder shall be binding on any successor to the Company, whether the
existence of such successor is the result of a direct or indirect purchase, of
all or substantially all of the business and/or assets of the Company, or a
merger, consolidation, or otherwise.
ARTICLE 19. LEGAL CONSTRUCTION
19.1 GENDER AND NUMBER. Except where otherwise indicated by the
context, any masculine term used herein also shall include the feminine; the
plural shall include the singular and the singular shall include the plural.
19.2 SEVERABILITY. In the event any provision of the Plan shall be
held illegal or invalid for any reason, the illegality or invalidity shall not
affect the remaining parts of the Plan, and the Plan shall be construed and
enforced as if the illegal or invalid provision had not been included.
19.3 REQUIREMENTS OF LAW. The granting of Awards and the issuance
of Shares under the Plan shall be subject to all applicable laws, rules, and
regulations, and to such approvals by any governmental agencies or national
securities exchanges as may be required.
19.4 SECURITIES LAW COMPLIANCE. With respect to Insiders,
transactions under this Plan are intended to comply with all applicable
conditions of Rule 16b-3 or its successors under the Exchange Act. To the
extent any provision of the plan or action by the Committee fails to so comply,
it shall be deemed null and void, to the extent permitted by law and deemed
advisable by the Committee.
19.5 GOVERNING LAW. To the extent not preempted by Federal law, the
Plan, and all agreements hereunder, shall be construed in accordance with and
governed by the laws of the state of Delaware.
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EXHIBIT 3
AMENDED AND RESTATED
1993 STOCK OPTION PLAN
OF SOUTHTRUST CORPORATION
SECTION 1. ESTABLISHMENT, PURPOSE AND EFFECTIVE DATE OF PLAN
1.1 Establishment. SouthTrust Corporation, a Delaware
corporation, has established a stock option plan for key Employees, which shall
be known as the "1993 STOCK OPTION PLAN" (the "Plan"). It is intended that
certain of the Options issued pursuant to the Plan may constitute incentive
stock options ("ISOs") within the meaning of Section 422 of the Internal
Revenue Code of 1986, as amended (the "Code"). The Plan also shall provide for
the issuance of options which are not qualified under Section 422 of the Code,
the latter of which are referred to herein as nonqualified stock options
("NQSOs").
1.2 Purpose. The purpose of the Plan is to advance the
interests of the Corporation, by encouraging and providing for the acquisition
of an equity interest in the Corporation by key Employees through the grant of
ISOs and NQSOs. The Plan will enable the Corporation to attract and retain the
services of key Employees upon whose judgment, interest, and special effort the
successful conduct of its business operations is largely dependent.
1.3 Effective Date. The Plan became effective as of
January 21, 1993. The Plan is hereby amended and restated as of January 1,
2000, subject to ratification by the shareholders of the Corporation within 12
months of such date.
SECTION 2. DEFINITIONS
2.1 Definitions
(a) "Board" means the Board of Directors of the
Corporation.
(b) "Committee" means the Human Resources
Committee of the Board, or such other Committee appointed by the Board to
administer the Plan.
(c) "Corporation" means SouthTrust Corporation,
a Delaware corporation, as well as any subsidiary, 50% or more of the
outstanding voting stock of which is owned by the Corporation.
(d) "Disability" means the permanent and total
inability, by reason of physical or mental infirmity, or both, of a Participant
to perform the work customarily assigned to him by the Corporation. The
determination of the existence or nonexistence of Disability shall be made by
the Committee pursuant to a medical examination by a medical doctor selected or
approved by the Committee.
(e) "Employee" means the Chairman of the Board,
any Vice Chairman of the Board, the President, Secretary or Treasurer of the
Corporation, any Vice President of the
<PAGE> 53
Corporation, any other individual who performs similar policy making functions
for the Corporation or for a subsidiary.
(f) "Fair Market Value" means the last sales
price of the Stock, as reported on the National Association of Securities
Dealers Automated Quotation System-National Market System ("NASDAQ"), on the
date specified.
(g) "Option" means the right to purchase Stock
at a stated price for a specified period of time. For purposes of the Plan, an
Option may be designated as either (i) an ISO or (ii) an NQSO at the time of
grant.
(h) "Participant" means an Employee designated
by the Committee to participate in the Plan.
(i) "Retirement" (including "Early Retirement"
and "Normal Retirement") means termination of employment under the terms of the
Corporation's then current retirement program.
(j) "Stock" means the Common Stock of the
Corporation, $2.50 par value, or as it may then be constituted.
SECTION 3. ELIGIBILITY AND PARTICIPATION
3.1 Eligibility and Participation. Participants in the
Plan shall be selected by the Committee from among those Employees who, in the
opinion of the Committee, are in a position to contribute materially to the
Corporation's continued growth and development and to its long-term financial
success. Participation shall be based on the recommendations of the
Corporation's Chief Executive Officer, subject to approval by the Committee.
SECTION 4. ADMINISTRATION
4.1 Administration. The Committee, which shall be
appointed by the Board, shall be responsible for the administration of the
Plan. The Committee, by majority action thereof, is authorized to interpret the
Plan, to prescribe, amend, and rescind rules and regulations relating to the
Plan, to provide for conditions and assurances deemed necessary or advisable to
protect the interests of the Corporation, and to make all other determinations
necessary or advisable for the administration of the Plan, but only to the
extent not contrary to the express provisions of the Plan. Determinations,
interpretations, or other actions made or taken by the Committee pursuant to
the provisions of the Plan shall be final and binding and conclusive for all
purposes and upon all persons whomsoever.
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<PAGE> 54
SECTION 5. STOCK SUBJECT TO PLAN
5.1 Number. The total number of shares of Stock subject
to issuance under the Plan may not exceed 2,000,000, subject to adjustment as
provided by Subsection 5.3. The shares to be delivered under the Plan may
consist, in whole or in part, of authorized but unissued Stock or treasury
Stock not reserved for any other purpose.
5.2 Unused Stock. In the event any shares of Stock are
subject to an Option which, for any reason, expires, terminates or, with the
consent of the Participant, is cancelled as to such shares, such Stock may
again be made subject to an Option pursuant to the Plan.
5.3 Adjustment in Capitalization. In the event of any
change in the number of outstanding shares of Stock that occurs after
ratification of the Plan by the shareholders of the Corporation by reason of a
Stock dividend, Stock split, recapitalization or other similar corporate change
in which the number of shares of stock outstanding is increased, decreased or
then changed without the receipt by the Corporation of addition consideration,
a corresponding adjustment shall be made in the aggregate number of shares of
Stock subject to each outstanding Option, and its stated Option Price, and the
aggregate number of shares of Stock reserved for issuance under the Plan;
provided, however, that fractional shares shall be rounded to the nearest whole
share; provided, further, that the Committee shall, in its sole discretion,
make any further adjustments as are necessary to prevent dilution or
enlargement of rights.
SECTION 6. DURATION OF PLAN
6.1 Duration of Plan. The Plan shall remain in effect,
subject to the Board's right to earlier terminate the Plan pursuant to
Subsection 9.1 hereof, until all Stock subject to it shall have been purchased
or acquired pursuant to the provisions hereof. Notwithstanding the foregoing,
no Option may be granted under the Plan on or after the tenth (10th)
anniversary of the Plan's effective date.
SECTION 7. TERMS OF OPTIONS
7.1 Grant of Options.
a. In General. Subject to the provisions of
Subsection 3.1 and 5.1, Options may be granted to Employees at any time and
from time to time as shall be determined by the Committee. The Committee shall
have complete discretion in determining the number of Options granted to each
Participant, subject to ratification by the Board. The Committee also shall
determine and state at the time of grant whether an Option is to be designated
as an ISO or an NQSO. With respect to Options granted on or after January 1,
1987, under this Plan, if the Fair Market Value (determined at the date of
grant) of Stock with respect to which ISOs may become exercisable for the first
time in any calendar year by any Participant is greater than $100,000, then
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any such Options in excess of such amount, if any, shall constitute NQSOs and
shall not be ISOs.
b. Reload Options. In the event that a
Participant elects to exercise any NQSO issued under the Plan by tendering
stock (rather than cash) to the Corporation pursuant to Subsection 7.7 below,
the Committee is authorized (but not required) to grant such Participant
additional NQSOs with respect to a number of shares of Stock equal to the
number of shares so tendered, and having terms and conditions identical in all
respects to the NQSOs so exercised, except that the exercise price of such
newly issued Options shall be equal to the fair market value of the Stock as of
the date of such tender. Options described in the preceding sentence shall be
referred to as "Reload Options." The Committee also is authorized (but not
required) to grant Reload Options in the event that shares of Stock are
withheld from a Participant upon the exercise of an NQSO as provided in
Subsection 11.1 below. Such Reload Options shall be subject to the same terms
and conditions as the NQSOs whose exercise gave rise to the tax withholding
obligation, except that the exercise price of the Reload Options shall be equal
to the Fair Market Value of the shares as of the date of the exercise of the
original NQSOs. The Committee may impose such additional conditions upon the
exercisability of Reload Options as the Committee in its discretion deems
appropriate. The Committee is not authorized to grant Reload Options with
respect to any exercise of an ISO or with respect to any cash exercise of an
NQSO under the Plan.
7.2 Option Agreement. As determined by the Committee on
the date of grant, each Option shall be evidenced by a written Option agreement
that shall specify the type of Option granted, the Option price, the duration
of the Option, and the number of shares of Stock to which the Option pertains.
7.3 Option Price. No Option granted pursuant to the Plan
shall have an Option Price that is less than the Fair Market value of the Stock
on the trading day immediately preceding the date such Option is granted.
7.4 Duration of Options. Each Option shall expire at
such time as the Committed shall determine at the time it is granted, provided,
however, that no Option shall be exercisable later than the tenth (10th)
anniversary date of its grant.
7.5 Exercise of Options. Options granted under the Plan
shall be exercisable at such times and be subject to such restrictions and
conditions as the Committee shall in each instance approve, which need not be
the same for all Participants.
7.6 Restrictions on Stock Transferability. The Committee
shall impose such restrictions on any shares of Stock acquired pursuant to the
exercise of an Option under the Plan as it may deem advisable, including,
without limitation, restrictions under applicable federal securities law, under
the requirements of any stock exchange upon which such shares of Stock are then
listed and under any blue sky or state securities laws applicable to such
shares.
7.7 Payment. The Option price upon exercise of any
Option shall be payable to the Corporation in full either (i) in cash or its
equivalent, (ii) by tendering shares of previously acquired Stock which has
been held by such Participant for a minimum of six months prior to such
exercise, and having a Fair Market Value as of the trading day immediately
preceding the date of
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<PAGE> 56
exercise equal to the total Option Price, or (iii) by a combination of (i) and
(ii). The cash proceeds from such a payment shall be added to the general funds
of the Corporation and shall be used for general corporate purposes; any shares
of Stock received by the Corporation pursuant to the terms of this Subsection
7.7 shall be held by the Corporation as treasury shares.
7.8 Termination of Employment Due to Death, Disability,
Retirement or Otherwise. In the event that the employment of a Participant is
terminated by 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. In the event that the
employment of a Participant is terminated prior to his attaining age 60 by
reason of death, Disability or Retirement, the rights under each outstanding
nonstatutory stock option granted to such Participant pursuant to the Plan
shall terminate upon the expiration date of such nonstatutory stock option or
12 months after such date of termination of employment, whichever first occurs.
In the event that the employment of a Participant is terminated upon or after
his attaining age 60 by reason of death, Disability or Retirement, the rights
under each then-outstanding nonstatutory stock option granted to such
Participant pursuant to the Plan shall terminate upon the expiration date of
such nonstatutory stock option.
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 sole, 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."
SECTION 8. RIGHTS OF EMPLOYEES.
8.1 Employment. Nothing in the Plan shall interfere with
or limit in any way the right of the Corporation to terminate any Employee's
employment at any time, nor confer upon any Employee any right to continue in
the employ of the Corporation.
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<PAGE> 57
SECTION 9. AMENDMENT, MODIFICATION, AND TERMINATION OF PLAN
9.1 Amendment, Modification, and Termination of Plan.
The Board may at any time terminate, and from time to time may amend or modify
the Plan, provided, however, that no such action of the Board, without approval
of the shareholders, may:
(i) Increase the total amount of Stock which
may be issued under the Plan, except as provided in Subsection 5.3 of the Plan;
(ii) Change the class of Employees eligible to
receive Options;
(iii) Change the provisions of the Plan regarding
the Option Price except as permitted by Subsection 5.3;
(iv) Materially increase the cost of the Plan;
(v) Extend the period during which Options may
be granted; or
(vi) Extend the maximum period after the date of
grant during which Options may be exercised.
No amendment, modification, or termination of the Plan shall in any manner
adversely affect any Option theretofore granted under the Plan, without the
consent of the Participant.
SECTION 10. MERGER OR CONSOLIDATION
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 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
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(ii) Make any 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.
SECTION 11. TAX WITHHOLDING
11.1 Tax Withholding. Whenever shares of Stock are to be
issued under the Plan, the Corporation shall have the power to require the
recipient of the Stock to remit to the Corporation an amount sufficient to
satisfy federal, state, and local withholding tax requirements. The Corporation
also shall have the power to withhold an appropriate number of shares of Stock
sufficient to satisfy federal, state and local withholding tax requirements
upon the exercise of an Option under the Plan. In the event that the
Corporation withholds shares of Stock upon the exercise of an NQSO under the
Plan, the Committee shall have the authority (but not the obligation) to issue
Reload Options under Subsection 7.1 above with respect to the number of shares
of Stock so withheld.
SECTION 12. INDEMNIFICATION
12.1 Indemnification. Each person who is or shall have
been a member of the Committee or of the Board shall be indemnified and held
harmless by the Corporation against and from any loss, cost, liability, or
expense that may be imposed upon or reasonably incurred by him in connection
with or resulting from any claim, action, suit, or proceeding to which he may
be a party or in which he may be involved by reason of any action taken or
failure to act under the Plan and against and from any and all amounts paid by
him in settlement thereof, with the Corporation's approval, or paid by him in
satisfaction of any judgment in any such action, suit, or proceeding against
him, provided he shall give the Corporation an opportunity, at its own expense,
to handle and defend the same before he undertakes to handle and defend it on
his own behalf. The foregoing right of indemnification shall not be exclusive
of any other rights of indemnification to which such persons may be entitled
under the Corporation's Articles of Incorporation or Bylaws, as a matter of
law, or otherwise, or any power that the Corporation may have to indemnify them
or hold them harmless.
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<PAGE> 59
SECTION 13. REQUIREMENTS OF LAW; MISCELLANEOUS
13.1 Requirements of Law. The granting of Options or
Restricted Stock and the issuance of shares of Stock upon the exercise of an
Option shall be subject to all applicable laws, rules, and regulations, and to
such approvals by any governmental agencies or national securities exchanges as
may be required.
13.2 Governing Law. Except as otherwise required by
Delaware law, the Plan, and all agreements hereunder, shall be construed in
accordance with and governed by the laws of the State of Alabama.
13.3 Gender and Number. Except when otherwise indicated
by the context, words in the masculine gender when used in the Plan shall
include the feminine gender, the singular shall include the plural, and the
plural shall include the singular.
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EXHIBIT 4
AMENDED AND RESTATED 1984 STOCK OPTION PLAN
SECTION 1. ESTABLISHMENT, PURPOSE AND EFFECTIVE DATE OF PLAN
1.1 Establishment. SouthTrust Corporation, a Delaware
corporation, has established a stock option plan for key Employees, which shall
be known as the "1984 STOCK OPTION PLAN" (the "Plan"). It is intended that
certain of the Options issued pursuant to the Plan may constitute incentive
stock options within the meaning of Section 422A of the Internal Revenue Code
(the "Code"). The Plan also shall provide for the issuance of nonstatutory
stock options.
1.2 Purpose. The purpose of the Plan is to advance the
interests of the Corporation, by encouraging and providing for the acquisition
of an equity interest in the success of the Corporation by key Employees
through the grant of incentive stock options and nonstatutory stock options.
The Plan will enable the Corporation to attract and retain the services of key
Employees upon whose judgment, interest, and special effort the successful
conduct of its options is largely dependent.
1.3 Effective Date. The Plan became effective as of
January 19, 1984. The Plan is hereby amended and restated as of January 1,
2000, subject to ratification by the shareholders of the Corporation within 12
months of such date.
SECTION 2. DEFINITIONS
2.1 Definitions
(a) "Board" means the Board of Directors of the
Corporation.
(b) "Committee" means the Human Resources
Committee of the Board, or such other Committee appointed by the Board to
administer the Plan.
(c) "Corporation" means SouthTrust Corporation,
a Delaware corporation, as well as any subsidiary, 50% or more of the
outstanding voting stock of which is owned by the Corporation.
(d) "Disability" means the permanent and total
inability, by reason of physical or mental infirmity, or both, of a Participant
to perform the work customarily assigned to him by the Corporation. The
determination of the existence or nonexistence of Disability shall be made by
the Committee pursuant to a medical examination by a medical doctor selected or
approved by the Committee.
(e) "Employee" means the Chairman of the Board,
any Vice Chairman of the Board, the President, Secretary or Treasurer of the
Corporation, any Vice President of the
<PAGE> 61
Corporation, any other individual who performs similar policy making functions
for the Corporation or for a subsidiary.
(f) "Fair Market Value" means the last sales
price of the Stock, as reported on the National Association of Securities
Dealers Automated Quotation System-National Market System ("NASDAQ"), on the
date specified.
(g) "Option" means the right to purchase Stock
at a stated price for a specified period of time. For purposes of the Plan, an
Option may be either (i) an "incentive stock option" within the meaning of
Section 422A of the Code or (ii) a "nonstatutory stock option."
(h) "Participant" means an Employee designated
by the Committee to participate in the Plan.
(i) "Retirement" (including "Early Retirement"
and "Normal Retirement") means termination of employment under the terms of the
Corporation's then current retirement program.
(j) "Stock" means the Common Stock of the
Corporation, $2.50 par value, or as it may then be constituted.
a. Gender and Number. Except when otherwise indicated
by the context, words in the masculine gender when used in the Plan shall
include the feminine gender, the singular shall include the plural, and the
plural shall include the singular.
SECTION 3. ELIGIBILITY AND PARTICIPATION
3.1 Eligibility and Participation. Participants in the
Plan shall be selected by the Committee from among those Employees who, in the
opinion of the Committee, are in a position to contribute materially to the
Corporation's continued growth and development and to its long-term financial
success. Participation shall be based on the recommendations of the
Corporation's Chief Executive Officer, subject to approval by the Committee.
SECTION 4. ADMINISTRATION
4.1 Administration. The Committee, which shall be
appointed by the Board, shall be responsible for the administration of the
Plan. The Committee, by majority action thereof, is authorized to interpret the
Plan, to prescribe, amend, and rescind rules and regulations relating to the
Plan, to provide for conditions and assurances deemed necessary or advisable to
protect the interests of the Corporation, and to make all other determinations
necessary or advisable for the administration of the Plan, but only to the
extent not contrary to the express provisions of the Plan. Determinations,
interpretations, or other actions made or taken by the Committee pursuant to
the
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provisions of the Plan shall be final and binding and conclusive for all
purposes and upon all persons whomsoever.
SECTION 5. STOCK SUBJECT TO PLAN
5.1 Number. The total number of shares of Stock subject
to issuance under the Plan may not exceed 1,540,000, subject to adjustment as
provided by Subsection 5.3. The shares to be delivered under the Plan may
consist, in whole or in part, of authorized but unissued Stock or treasury
Stock not reserved for any other purpose.
5.2 Unused Stock. In the event any shares of Stock that
are subject to an Option which, for any reason, expires, terminated, or is
unexercised as to such shares, such Stock may again be subjected to an Option
pursuant to the Plan.
5.3 Adjustment in Capitalization. In the event of any
change in the number of outstanding shares of Stock that occurs after
ratification of the Plan by the shareholders of the Corporation by reason of a
Stock dividend, Stock split, recapitalization or other similar corporate change
in which the number of shares of stock outstanding is increased, decreased or
then changed without the receipt by the Corporation of addition consideration,
a corresponding adjustment shall be made in the aggregate number of shares of
Stock subject to each outstanding Option, and its stated Option Price, and the
aggregate number of shares of Stock reserved for issuance under the Plan;
provided, however, that fractional shares shall be rounded to the nearest whole
share; provided, further, that the Committee shall, in its sole discretion,
make any further adjustments as are necessary to prevent dilution or
enlargement of rights.
SECTION 6. DURATION OF PLAN
6.1 Duration of Plan. The Plan shall remain in effect,
subject to the Board's right to earlier terminate the Plan pursuant to
Subsection 9.1 hereof, until all Stock subject to it shall have been purchased
or acquired pursuant to the provisions hereof. Notwithstanding the foregoing,
no Option may be granted under the Plan on or after the tenth (10th)
anniversary of the Plan's effective date.
SECTION 7. TERMS OF OPTIONS
7.1 Grant of Options. Subject to the provisions of
Subsection 3.1 and 5.1, Options may be granted to Employees at any time and
from time to time as shall be determined by the Committee. The Committee shall
have complete discretion in determining the number of Options granted to each
Participant, subject to ratification by the Board. The Committee also shall
determine whether an Option is to be designated as an incentive stock option
within the meaning of Section 422A of the Code or a nonstatutory stock option.
With respect to Options granted prior to January
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1, 1987, the Fair Market Value (determined at the date of grant) of Stock for
which a Participant may be granted incentive stock options in any calendar year
shall not, in any event, exceed $100,000, plus any unused carryover calculated
in accordance with Section 422A(b)(8) of the Code. With respect to Options
granted on or after January 1, 1987, if the Fair Market Value (determined at
the date of grant) of Stock with respect to which incentive stock options may
become exercisable for the first time in any calendar year by any Participant
is greater than $100,000, then all such Options in excess of such amount, if
any, shall constitute nonstatutory stock options.
7.2 Option Agreement. As determined by the Committee on
the date of grant, each Option shall be evidenced by an Option agreement that
shall specify the type of Option granted, the Option price, the duration of the
Option, and the number of shares of Stock to which the Option pertains.
7.3 Option Price. No Option granted pursuant to the Plan
shall have an Option Price that is less than the Fair Market value of the Stock
on the trading day immediately preceding the date such Option is granted.
7.4 Duration of Options. Each Option shall expire at
such time as the Committed shall determine at the time it is granted, provided,
however, that no Option shall be exercisable later than the tenth (10th)
anniversary date of its grant.
7.5 Exercise of Options. Options granted under the Plan
shall be exercisable at such times and be subject to such restrictions and
conditions as the Committee shall in each instance approve, which need not be
the same for all Participants. Notwithstanding the provisions of this
Subsection 7.5, no incentive stock option granted to an Employee under the Plan
prior to January 1, 1987 shall be exercisable while there is outstanding
(within the meaning of Section 422A(c)(7) of the Code) any other incentive
stock option previously granted to such Employee under the Plan, or any other
plan meeting the requirements of Section 422A of the Code, to purchase Stock.
For purposes of the preceding sentence, an incentive stock option will be
considered "outstanding" until such option is exercised in full or expires by
reason of lapse of time.
7.6 Restrictions on Stock Transferability. The Committee
shall impose such restrictions on any shares of Stock acquired pursuant to the
exercise of an Option under the Plan as it may deem advisable, including,
without limitation, restrictions under applicable federal securities law, under
the requirements of any stock exchange upon which such shares of Stock are then
listed and under any blue sky or state securities laws applicable to such
shares.
7.7 Payment. The Option price upon exercise of any
Option shall be payable to the Corporation in full either (i) in cash or its
equivalent, (ii) by tendering shares of previously acquired Stock having a Fair
Market Value as of the trading day immediately preceding the date of exercise
equal to the total Option Price, or (iii) by a combination of (i) and (ii). The
proceeds from such a payment shall be added to the general funds of the
Corporation and shall be used for general corporate purposes.
7.8 Termination of Employment Due to Death, Disability,
Retirement or Otherwise. In the event that the employment of a Participant is
terminated for any reason other than
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death, Disability or Retirement, the rights under then-outstanding Options
granted pursuant to the Plan shall terminate upon the expiration date of such
Option or three months after such date of termination of employment, whichever
first occurs. In the event that the employment of a Participant is terminated
prior to his attaining age 60 by reason of death, Disability or Retirement, the
rights under each outstanding nonstatutory stock option granted to such
Participant pursuant to the Plan shall terminate upon the expiration date of
such nonstatutory stock option or 12 months after such date of termination of
employment, whichever first occurs. In the event that the employment of a
Participant is terminated upon or after his attaining age 60 by reason of
death, Disability or Retirement, the rights under each then-outstanding
nonstatutory stock option granted to such Participant pursuant to the Plan
shall terminate upon the expiration date of such nonstatutory stock option.
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.
SECTION 8. RIGHTS OF EMPLOYEES.
8.1 Employment. Nothing in the Plan shall interfere with
or limit in any way the right of the Corporation to terminate any Employee's
employment at any time, nor confer upon any Employee any right to continue in
the employ of the Corporation.
SECTION 9. AMENDMENT, MODIFICATION, AND TERMINATION OF PLAN
9.1 Amendment, Modification, and Termination of Plan.
The Board may at any time terminate, and from time to time may amend or modify
the Plan, provided, however, that no such action of the Board, without approval
of the shareholders, may:
(i) Increase the total amount of Stock which
may be issued under the Plan, except as provided in Subsection 5.3 of the Plan;
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(ii) Change the class of Employees eligible to
receive Options;
(iii) Change the provisions of the Plan regarding
the Option Price except as permitted by Subsection 5.3;
(iv) Materially increase the cost of the Plan;
(v) Extend the period during which Options may
be granted; or
(vi) Extend the maximum period after the date of
grant during which Options may be exercised.
No amendment, modification, or termination of the Plan shall in any manner
adversely affect any Option theretofore granted under the Plan, without the
consent of the Participant.
SECTION 10. MERGER OR CONSOLIDATION
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.
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<PAGE> 66
Any such action approved by the Board shall be conclusive and binding on the
Company and all Participants of the Plan."
SECTION 11. TAX WITHHOLDING
11.1 Tax Withholding. Whenever shares of Stock are to be
issued under the Plan, the Corporation shall have the power to require the
recipient of the Stock to remit to the Corporation an amount sufficient to
satisfy federal, state, and local withholding tax requirements.
SECTION 12. INDEMNIFICATION
12.1 Indemnification. Each person who is or shall have
been a member of the Committee or of the Board shall be indemnified and held
harmless by the Corporation against and from any loss, cost, liability, or
expense that may be imposed upon or reasonably incurred by him in connection
with or resulting from any claim, action, suit, or proceeding to which he may
be a party or in which he may be involved by reason of any action taken or
failure to act under the Plan and against and from any and all amounts paid by
him in settlement thereof, with the Corporation's approval, or paid by him in
satisfaction of any judgment in any such action, suit, or proceeding against
him, provided he shall give the Corporation an opportunity, at its own expense,
to handle and defend the same before he undertakes to handle and defend it on
his own behalf. The foregoing right of indemnification shall not be exclusive
of any other rights of indemnification to which such persons may be entitled
under the Corporation's Articles of Incorporation or Bylaws, as a matter of
law, or otherwise, or any power that the Corporation may have to indemnify them
or hold them harmless.
SECTION 13. REQUIREMENTS OF LAW
13.1 Requirements of Law. The granting of Options or
Restricted Stock and the issuance of shares of Stock upon the exercise of an
Option shall be subject to all applicable laws, rules, and regulations, and to
such approvals by any governmental agencies or national securities exchanges as
may be required.
13.2 Governing Law. Except as otherwise required by
Delaware law, the Plan, and all agreements hereunder, shall be construed in
accordance with and governed by the laws of the State of Alabama.
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EXHIBIT 5
SOUTHTRUST NOW OFFERS
INTERNET DELIVERY AND VOTING!
IT'S FAST, CONVENIENT AND IMMEDIATE.
In and effort to improve delivery of shareholder information, SouthTrust is
pleased to offer you the choice to view all future Proxy materials and/or
perform voting via the Internet. Each of these options offers an easy, fast and
convenient alternative to conventionally mailed shareholder information.
By voting through the Internet this year, you may elect to view all future
materials via the Internet. In addition to following the Internet voting
instructions on the left, you will be asked to provide an email address and PIN
number for future identification. All enrollments are confirmed by email within
24 hours. If you elect Internet delivery for future distribution of shareholder
materials, you will receive an email before the next annual shareholders'
meeting describing the necessary steps to view the appropriate materials and
vote the associated shares. If your email is returned as undeliverable, you
will be sent a voting instruction form within one business day.
If, in the future, you wish to cancel Internet delivery or change your email
address, it can be done at www.investordelivery.com using the enrollment number
provided with the email confirmation and the PIN number selected upon
enrollment. Shareholders interested in continuing to receive printed Proxy
materials still maintain the ability to vote via the Internet.
INTERNET VOTING
1. Review Proxy Materials
2. Go to www.proxyvote.com
3. Follow the simple instructions
4. Have your 12-digit control number found on the voting form
YOUR VOTE IS IMPORTANT! VOTE 24 HOURS A DAY!
IT IS NOT NECESSARY TO RETURN THE PRINTED VOTING FORM
IF YOU VOTE THROUGH THE INTERNET.
<PAGE> 68
(SOUTHTRUST CORPORATION LOGO)
P.O. BOX 2554
BIRMINGHAM, ALABAMA 35290
RECYCLED PAPER LOGO
<PAGE> 69
SOUTHTRUST CORPORATION
BIRMINGHAM, ALABAMA
PROXY FOR THE ANNUAL MEETING OF STOCKHOLDERS
APRIL 19, 2000
(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, 2000, 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, FOR THE APPROVAL AND
RATIFICATION OF THE DISCOUNT STOCK PAYROLL PURCHASE PLAN, FOR THE APPROVAL AND
RATIFICATION OF THE AMENDED AND RESTATED LONG- TERM INCENTIVE PLAN, FOR THE
APPROVAL AND RATIFICATION OF THE AMENDED AND RESTATED 1993 STOCK OPTION PLAN
AND AMENDED AND RESTATED 1984 STOCK OPTION PLAN.
<PAGE> 70
THIS PROXY CARD VALID ONLY WHEN SIGNED AND DATED.
SOUTHTRUST CORPORATION
<TABLE>
<CAPTION>
Vote on Directors For Withhold For All
All All Except
<S> <C> <C> <C> <C> <C>
1. Election of Directors, the nominees for Directors are:
1) William A. Coley, 2) Allen J. Keesler, Jr., 3) Van L. Richey,
4) William K. Upchurch, Jr. --- --- ---
To withhold authority to vote for an individual nominee, mark
"For All Except" and write the nominee's name on the line below.
----------------------------------------------------------------
<CAPTION>
Vote On Proposals For Against Abstain
<S> <C> <C> <C> <C> <C>
2. Approval and Ratification of the Discount Stock Payroll
Purchase Plan --- --- ---
3. Approval and Ratification of the Amended and Restated
Long-Term Incentive Plan --- --- ---
4. Approval and Ratification of the Amended and Restated
1993 Stock Option Plan and Amended and Restated
1984 Stock Option Plan --- --- ---
5. Other Matters: In their discretion upon such other matters as may properly
come before the Annual Meeting of Stockholders
- --------------------------------------------------------------- ---------------------------------------------------------
Signature Date Signature (Joint Owners) Date
</TABLE>
<PAGE> 71
Voting Alternatives
1. Vote via the Internet at www.proxyvote.com
- using control number below.
2. Vote via the Telephone at 1-800-690-6903
- using control number below.
3. Vote via the U.S. Postal System
- by returning the attached card below.
