EX-10.(cc) FORM OF STOCK OPTION AGREEMENT



 







Exhibit 10(cc)




COMPASS BANCSHARES, INC.

2002 INCENTIVE COMPENSATION PLAN

NON-QUALIFIED STOCK OPTION AGREEMENT




     THIS AGREEMENT is made and entered into as of April 18, 2005 among grantor Compass
Bancshares, Inc., a Delaware corporation (the “Corporation”), and grantee, ___
(“Grantee”).



W I T N E S S E T H:




     On April 15, 2002, the shareholders of the Corporation approved and ratified the Compass
Bancshares, Inc., 2002 Incentive Compensation Plan, (the “Plan”) pursuant to which, non-employee
directors of the Corporation are granted the option to purchase 2,000 shares of the Corporation’s
Common Stock (as hereinafter defined) (i) upon first being elected or appointed to the Board of
Directors of the Corporation (the “Board of Directors”) and (ii) as of the date of each annual
meeting of the shareholders of the Corporation if such non-employee director’s term of office
continues after such date. The terms and conditions of such grant are contained in this Agreement.



     NOW, THEREFORE, the parties hereto agree as follows:



     1.     Grant of Option. Grantee shall have the right and option to purchase on the terms and
conditions set forth herein and in the Plan, all or any part of an aggregate of 2,000 shares of the
$2.00 par value common stock of the Corporation (the “Common Stock”) at the purchase price of
$44.52 per share (the “Option Price”). The Option Price is 100% of the Fair Market Value of the
Common Stock on April 18, 2005, the date of the grant of the option covered by this Agreement.
Certain definitions are provided in Section 12 of this Agreement. All capitalized terms used
herein for which no definition is provided herein shall have the meanings set forth in the Plan.



     2.     Terms and Conditions. It is understood and agreed that the option evidenced hereby is
subject to the following terms and conditions:



               (a)     Expiration Date. The option shall expire on April 17, 2015 (the “Expiration
Date”). After the Expiration Date, the parties shall have no further rights or obligations
hereunder.




               (b)     Exercise of Option. Subject to Sections 2(d), the option covered by this
Agreement may be exercised by Grantee from time to time, in whole or in part, during the period
beginning on the date indicated above and ending on the Expiration Date.




               (c)     Method of Exercise and Payment of Purchase Price Upon Exercise. The method of
exercise of the option shall be by giving written notice to the Corporation. Payments shall be
made at the time of exercise and shall be in cash or in shares of Common Stock. In the event
payment is made in shares of Common Stock, such shares


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shall be valued at their Fair Market Value
on the date of exercise, as indicated by the closing stock price at the close of regular trading
hours of the primary stock exchange or market on which the Common Stock is traded on that date.
The option is not exercised until both the written notice and the payment for the shares exercised
are actually received by the Corporation.




               (d)     Forfeiture of Rights. The option or any unexercised portions thereof shall expire
and be forfeited upon cessation of Grantee’s service to the Corporation in all capacities
(“Service”), except that:





          (i)     If Grantee’s Service ceases for any reason other than Director
Misconduct, death, Director Disability or Director Retirement, Grantee may at any
time within a period of three (3) months after such
cessation, but not after the stated termination date of the option, exercise the
option. If Grantee shall die following any such cessation and prior to the
expiration of such three (3) month period, the option may be exercised in
accordance with its terms within such three (3) month period by the personal
representatives of the estate of Grantee or by any Person or Persons to who the
option has been transferred by gift or by will or the applicable laws of descent
and distribution.




          (ii)     If Grantee’s Service ceases by reason of Director Misconduct during
the course of Grantee’s term, Grantee’s rights to the option shall be forfeited as
of the date of the occurrence of such Director Misconduct.




          (iii)     If Grantee’s Service ceases by reason of Director Disability or
Director Retirement, Grantee may exercise the option in accordance with the terms
thereof as though such cessation had never occurred. If Grantee shall die
following any such cessation, the option may be exercised in accordance with its
terms by the personal representatives of the estate of Grantee or by any Person or
Persons to whom the option has been transferred by gift or by will or the
applicable laws of descent and distribution.




          (iv)     If Grantee shall die while a non-employee director of the
Corporation, the option may be exercised in accordance with its terms by the
personal representatives of the estate of Grantee or by any Person or Persons to
whom the option has been transferred by gift or by will or the applicable laws of
descent and distribution for a period of three (3) years from the date of such
death or until the expiration of the stated term of the option, whichever period is
shorter.


Nothing contained in this subsection shall extend the time period set forth in Section 2(a) during
which the option can be exercised.




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     3.     Non-Qualified Stock Option. This option is not intended to be an incentive stock option
within the meaning of Section 422(b) of the Internal Revenue Code of 1986, as amended (the “Code”).



     4.     No Rights as Shareholder. No option granted hereunder shall entitle the holder thereof to
any rights as a shareholder in the Corporation with respect to any shares to which the option
relates until such option has been exercised properly and paid for in full and the corresponding
shares have been issued.



     5.     Restrictions on Transfer of Shares. Grantee hereby agrees for himself and his legal
representative, heirs and distributees, that if a registration statement covering the shares
issuable upon exercise of any option hereunder is not effective under the Securities Act of 1933,
as amended (the “Act”), at the time of such exercise, or if an exemption from the registration
requirements of the Act is not available, then all shares of Common Stock then acquired upon such
exercise shall be acquired for investment, and that the notice of exercise delivered to the
Corporation shall be accompanied by a representation in writing acceptable in scope and form to
counsel to the Corporation and signed by Grantee or Grantee’s legal representative, heirs or
distributees, as the case may be, to the effect that the shares are being acquired in good faith
for investment and not with a view to distribution thereof. Any shares so acquired may be deemed
restricted securities under Rule 144 as promulgated by the Securities and Exchange Commission under
the Act, and as the same may be amended or replaced and subject to restrictions upon sale or other
disposition and may bear any required legend, or other legend deemed appropriate by the
Corporation, to that effect.



     6.     Registration of Shares. If at any time the Board of Directors or the Compensation
Committee shall reasonably determine that the listing, registration or qualification of any shares
subject to the option upon any securities exchange, or under any state or federal law, or the
consent or approval of any governmental or regulatory body is necessary or desirable as a condition
of or in connection with the issuance or purchase of shares hereunder, the option may not be
exercised in whole or in part unless such listing, registration, qualification, consent, or
approval has been effected or obtained free of any conditions not reasonably acceptable to the
Board of Directors or to the Compensation Committee.



     7.     Transfer of Rights. The option may be transferred only under the following circumstances:
(i) by will or the laws of descent and distribution, in which case the option may be exercised in
accordance with the provisions set forth above or (ii) by gift or pursuant to a domestic relations
order to a family member (or a trust for their benefit), in which case Grantee shall promptly
report the transfer to the Secretary of the Corporation so that the Corporation may deliver to his
transferee all requisite documents concerning the Plan (including the prospectus meeting the
requirements of Section 10(a) of the Securities Act of 1933, as amended). For this purpose,
“family member” includes any child, stepchild, grandchild, parent, stepparent, grandparent, spouse,
former spouse, sibling, niece, nephew, mother-in-law, father-in-law, son-in-law, daughter-in-law,
brother-in-law, or sister-in-law, including adoptive relationships, a trust in which these persons
have more than fifty (50) percent of the beneficial interest, a foundation in which



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these persons
(or Grantee) control the management of assets, and any other entity in which these persons (or
Grantee) own more than fifty (50) percent of the voting interests.



     8.     Plan to Control. The Plan is incorporated in this Agreement by this reference. Any
question of interpretation or application of the Plan or this Agreement shall be resolved by the
Board of Directors and its determination shall be final and binding on the Corporation, Grantee and
Grantee’s permitted assigns. In the event of any conflict between the provisions of the Plan and
of this Agreement, the Plan shall control. Grantee hereby acknowledges receipt of a copy of the
Plan.



     9.     Notices. All notices hereunder shall be in writing and, if to the Corporation, shall be
delivered personally to the Secretary of the Corporation or mailed to the Corporation’s principal
office at 15 South 20th Street, Birmingham, Alabama 35233, addressed to the attention of
the Secretary of the Corporation; and if to Grantee, shall be delivered personally or mailed to him
at the address noted below. Such addresses may be changed at any time by notice from one party to
the other.



     10.     Binding Effect. This Agreement shall bind and inure to the benefit of the parties hereto,
the successors and assigns of the Corporation and any person to whom the rights of Grantee are
transferred in accordance with the terms of this Agreement.



     11.     Headings. The section headings used herein are solely for reference only and shall not
affect in any way the meanings and interpretation of the terms and conditions set forth herein.



     12.     Certain Definitions. For purposes of this Agreement, the following terms shall be defined
as set forth below:




     (a)     “Director Disability” means that Grantee:




          (i)     has established to the satisfaction of the Board of Directors that
Grantee is unable to perform his or her duties as a member of the Board of
Directors by reason of any medically determinable physical or mental impairment
which can be expected to last for a continuous period of not less than twelve (12)
months; and




          (ii)     has satisfied any requirement imposed by the Compensation Committee in
regard to evidence of such disability.




     (b)     “Director Misconduct” means the occurrence of any one or more of the following:




          (i)     the willful and continued failure by Grantee to substantially perform
his or her duties (other than any such failure resulting from Director Disability,
death or Director Retirement), after a written demand for substantial performance
is delivered by the Board of Directors to Grantee that specifically identities the
manner in which the Board of Directors believes that Grantee has not substantially
performed



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his or her duties, and Grantee has failed to remedy the situation within
thirty (30) calendar days of receiving such notice; or




          (ii)     Grantee’s conviction for committing an act of fraud, embezzlement, theft
or another act constituting a felony or a crime involving moral turpitude; or




          (iii)     substance dependence or addiction to any drug illegally taken or to
alcohol; or




          (iv)     the engaging by Grantee in gross misconduct materially and demonstrably
injurious to the Corporation.



     No act or failure to act on Grantee’s part shall be considered “willful” unless done, or
omitted to be done, by Grantee not in good faith and without reasonable belief that his action or
omission was in the best interest of the Corporation. Director Misconduct shall be determined by
the Board of Directors in exercise of good faith and reasonable judgment.




     (c)     “Director Retirement” means mandatory retirement from service as a member of the Board of
Directors pursuant to the Corporation’s policies.



     IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first above
written.


	 	 	 	 	 
	 	COMPASS BANCSHARES, INC. 

 	 
	 	By:  	 	 
	 	 	Name:  	Jerry W. Powell 	 
	 	 	Title:  	Secretary and General Counsel 	 
	 




	 	 	 
	WITNESS:

	 	GRANTEE:
	 
	 	 
	 

	 	 
	 
	 	 
	


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