Regions Bank 2009 Annual Report Download - page 169

In 2009, Regions granted 2.9 million restricted shares that vest based upon a service condition and a market
condition in addition to awards that were similar to prior grants. The fair value of these restricted shares was
estimated on the date of the grant using a Monte-Carlo simulation method. The assumptions related to this grant
included expected volatility of 84.81%, expected dividend yield of 1.00%, and an expected term of 4.0 years
based on the vesting term of the market condition. The risk-free rate is consistent with the assumption used to
value stock options. For all other grants that vest solely upon a service condition, the fair value of the awards is
estimated based upon the fair value of the underlying shares on the date of the grant.
Restricted stock award and unit activity for 2009, 2008 and 2007 is summarized as follows:
Number of
Shares/Units
Weighted-Average
Fair Value
(Grant Date)
Non-vested at December 31, 2006 ...................................... 3,290,589 $33.34
Granted ....................................................... 2,622,781 32.50
Vested ........................................................ (1,823,098) 33.19
Forfeited ...................................................... (439,218) 35.07
Non-vested at December 31, 2007 ...................................... 3,651,054 $32.60
Granted ....................................................... 1,704,599 20.99
Vested ........................................................ (799,276) 34.07
Forfeited ...................................................... (432,466) 31.11
Non-vested at December 31, 2008 ...................................... 4,123,911 $27.67
Granted ....................................................... 3,100,415 2.87
Vested ........................................................ (804,229) 16.39
Forfeited ...................................................... (455,503) 16.47
Non-vested at December 31, 2009 ...................................... 5,964,594 $17.15
As of December 31, 2009, the pre-tax amount of non-vested stock options and restricted stock awards and
units not yet recognized was $58 million, which will be recognized over a weighted-average period of 1.4 years.
No share-based compensation costs were capitalized during the years ended December 31, 2009, 2008 and 2007.
During 2009, Regions issued 645,683 cash-settled restricted stock units.
NOTE 18. PENSION AND OTHER EMPLOYEE BENEFIT PLANS
PENSION AND OTHER POSTRETIREMENT BENEFIT PLANS
Regions has a defined-benefit pension plan (the “Regions pension plan”) covering substantially all
employees employed on or before December 31, 2000. After January 1, 2001, the Regions pension plan was
closed to new entrants. Benefits under the Regions pension plan are based on years of service and the employee’s
highest five years of compensation during the last ten years of employment. Regions’ funding policy is to
contribute annually at least the amount required by Internal Revenue Service minimum funding standards.
Contributions are intended to provide not only for benefits attributed to service to date, but also for those
expected to be earned in the future. The Company also sponsors a supplemental executive retirement program
(the “Regions SERP”), which is a non-qualified plan that provides certain senior executive officers defined
pension benefits in relation to their compensation. Regions also sponsors a defined-benefit postretirement health
care plan that covers certain retired employees. Currently, the Company pays a portion of the costs of certain
health care benefits for all eligible employees who retired before January 1, 1989. No health care benefits are
provided for employees retiring at normal retirement age after December 31, 1988. For employees retiring before
normal retirement age, the Company currently pays a portion of the costs of certain health care benefits until the
retired employee becomes eligible for Medicare. Certain retirees, participating in plans of acquired entities, are
offered a Medicare supplemental benefit. The plan is contributory and contains other cost-sharing features such
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