Regions Bank 2010 Annual Report Download - page 177

RESTRICTED STOCK AWARDS
During 2010, Regions granted 1 million restricted shares that vest based upon a service condition. Dividend
payments during the vesting period are deferred to the end of the vesting term. The fair value of these restricted
shares was estimated based upon the fair value of the underlying shares on the date of the grant. The valuation
was not adjusted for the deferral of dividends.
During 2009, Regions granted 3 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 percent, expected dividend yield of 1.00 percent, 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 2010, 2009 and 2008 is summarized as follows:
Number of
Shares/Units
Weighted-Average
Fair Value
(Grant Date)
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
Granted ....................................................... 1,166,968 6.96
Vested ........................................................ (936,412) 34.00
Forfeited ...................................................... (1,264,706) 15.97
Non-vested at December 31, 2010 ...................................... 4,930,444 $12.13
As of December 31, 2010, the pre-tax amount of non-vested stock options and restricted stock awards and
units not yet recognized was $51 million, which will be recognized over a weighted-average period of 0.90 years.
No share-based compensation costs were capitalized during the years ended December 31, 2010, 2009 and 2008.
Regions issued 857,957 and 645,683 of cash-settled restricted stock units during 2010 and 2009,
respectively. There were no cash-settled restricted stock units issued during 2008.
NOTE 17. EMPLOYEE BENEFIT PLANS
PENSION AND OTHER POSTRETIREMENT BENEFIT PLANS
Regions has a defined-benefit pension plan (the “pension plan”) covering only certain employees as the
pension plan is closed to new entrants. Benefits under the 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 “SERP”), which is a non-qualified plan that provides certain senior executive officers defined benefits in
relation to their compensation. All defined-benefit plans are referred to as “the plans” throughout the remainder
of this footnote. Regions also sponsors defined-benefit postretirement health care plans that cover certain retired
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