Regions Bank 2010 Annual Report Download - page 175

Basic and diluted weighted-average common shares outstanding are the same due to the net losses for all
periods presented.
As discussed in Note 14, approximately 63 million common shares were issued in June of 2010 in
connection with the conversion of the remaining Series B mandatorily convertible preferred shares, which were
originally issued in May 2009. Under applicable accounting literature, such shares should be included in the
denominator in arriving at diluted earnings per share as if they were issued at the beginning of the reporting
period or as of the date issued, if later. Prior to conversion, these shares were not included in the computation
above as such amounts would have had an antidilutive effect on earnings (loss) per common share.
NOTE 16. SHARE-BASED PAYMENTS
Regions has long-term incentive compensation plans that permit the granting of incentive awards in the
form of stock options, restricted stock, restricted stock awards and units, and/or stock appreciation rights. While
Regions has the ability to issue stock appreciation rights, as of December 31, 2010, 2009 and 2008, there were no
outstanding stock appreciation rights. The terms of all awards issued under these plans are determined by the
Compensation Committee of the Board of Directors; however, no awards may be granted after the tenth
anniversary from the date the plans were initially approved by shareholders. Options and restricted stock usually
vest based on employee service, generally within three years from the date of the grant. The contractual lives of
options granted under these plans range from seven to ten years from the date of the grant.
On May 13, 2010, the shareholders of the Company approved the Regions Financial Corporation 2010
Long-Term Incentive Plan (“2010 LTIP”), which permits the Company to grant to employees and directors
various forms of incentive compensation. These forms of incentive compensation are similar to the types of
compensation approved in prior plans. The 2010 LTIP authorizes 100 million common share equivalents
available for grant, where grants of options count as one share equivalent and grants of full value awards (e.g.,
shares of restricted stock and restricted stock units) count as 2.25 share equivalents. Unless otherwise determined
by the Compensation Committee of the Board of Directors, grants of restricted stock and restricted stock units
accrue dividends as they are declared by the Board of Directors, and the dividends are paid upon vesting of the
award. The 2010 LTIP closed all prior long-term incentive plans to new grants, and accordingly, prospective
grants must be made under the 2010 LTIP or a successor plan. All existing grants under prior long-term incentive
plans were unaffected by this amendment. The number of remaining share equivalents available for future
issuance under the active long-term compensation plan was approximately 91 million at December 31, 2010.
Grants of performance-based restricted stock typically have a one-year performance period, after which
shares vest within three years after the grant date. Restricted stock units, which were granted in 2008, have a
vesting period of five years. Generally, the terms of these plans stipulate that the exercise price of options may not
be less than the fair market value of Regions’ common stock at the date the options are granted; however, under
prior stock option plans, non-qualified options could be granted with a lower exercise price than the fair market
value of Regions’ common stock on the date of grant. The contractual life of options granted under these plans
ranges from seven to ten years from the date of grant. Regions issues new shares from authorized reserves upon
exercise. Grantees of restricted stock awards or units must either remain employed with the Company for certain
periods from the date of grant in order for shares to be released or issued or retire after meeting the standards of a
retiree, at which time shares would be prorated and released.
The following table summarizes the elements of compensation cost recognized in the consolidated statements
of operations for the years ended December 31:
2010 2009 2008
(In millions)
Compensation cost of share-based compensation awards:
Restricted stock awards and units ................................ $10 $33 $50
Stock options ................................................ 13 14 16
Tax benefits related to compensation cost .............................. (8) (17) (24)
Compensation cost of share-based compensation awards, net of tax ......... $15 $30 $42
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