Regions Bank 2012 Annual Report Download - page 193

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, performance awards and/or stock
appreciation rights. While Regions has the ability to issue stock appreciation rights, none have been issued to
date. 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. Incentive awards 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, restricted stock units and performance stock units) count as 2.25 share equivalents.
Unless otherwise determined by the Compensation Committee of the Board of Directors, grants of restricted
stock, restricted stock units and performance 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 2010 LTIP was approximately
66 million at December 31, 2012.
Grants of performance-based restricted stock typically have a one to three-year performance period, and
shares vest within three years after the grant date. Restricted stock units have a vesting period of three to 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:
2012 2011 2010
(In millions)
Compensation cost of share-based compensation awards:
Restricted stock awards ........................................ $23 $10 $10
Stock options ................................................ 7 9 13
Cash-settled restricted stock units ................................ 3 3 7
Tax benefits related to compensation cost .............................. (12) (8) (11)
Compensation cost of share-based compensation awards, net of tax ......... $21 $14 $19
Note: The table above includes compensation cost of share-based compensation awards from discontinued
operations of approximately zero, $1 million, and $1 million, net of tax, for years 2012, 2011, and 2010,
respectively (see Note 3 to the consolidated financial statements).
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