8-KMaterial Agreements

FIFTH THIRD BANCORP 8-K Report, Material Agreement (Mar 24, 2005)

Filed March 24, 2005For Securities:FITBFITBOFITBPFITB-PIFITB-PMFITB-PAFITBIFITB-PK

Summary

This 8-K filing by Fifth Third Bancorp (FITB) on March 24, 2005, reports on the compensation structure for its non-employee Directors for the year 2005. The Nominating and Corporate Governance Committee established a new compensation package designed to align director incentives with shareholder value and acknowledge the significant responsibilities of board service. The key components of the 2005 director compensation include a $50,000 annual retainer, split between cash and restricted stock, a grant of stock appreciation rights, and per-meeting fees for attendance. Additionally, committee chairs receive supplementary retainers and meeting fees. The filing also details a deferred compensation plan allowing directors flexibility in managing their compensation, with options for interest-bearing deferrals or returns tied to company stock performance.

Key Highlights

  • 1Fifth Third Bancorp's Nominating and Corporate Governance Committee set the 2005 compensation for non-employee Directors.
  • 2Non-employee Directors will receive an annual retainer of approximately $50,000.
  • 3The retainer is composed of $25,000 in cash and a restricted stock award of 592 shares, vesting fully on December 22, 2005.
  • 4Directors will also be granted stock appreciation rights (SARs) for 5,000 shares of Fifth Third Bancorp common stock.
  • 5Per-meeting fees of $1,500 will be paid for each Board and committee meeting attended by non-employee Directors (excluding committee chairs).
  • 6Committee chairs receive additional annual retainers ($7,500) and higher per-meeting fees ($2,500) for committee service.
  • 7A Deferred Compensation Plan allows Directors to defer 50% to 100% of their cash compensation, with options for interest-based returns or returns tied to the Company's common stock performance.

Frequently Asked Questions

The total annual retainer for a non-employee director is approximately $50,000, consisting of $25,000 in cash and 592 shares of restricted stock. This base amount is supplemented by potential per-meeting fees and, for committee chairs, additional retainers and meeting fees.

A portion of the compensation is directly tied to company stock. This includes 592 restricted shares that vest on December 22, 2005, and a grant of stock appreciation rights for 5,000 shares. Furthermore, directors can elect to have their deferred compensation returns linked to the rate of return on Fifth Third Bancorp's common stock.

No, directors who are also employees of Fifth Third Bancorp do not receive any additional compensation for their service on the Board or its Committees.

Directors have flexibility through the Deferred Compensation Plan. They can choose to defer between one-half and all of their cash compensation. These deferred funds can earn interest at a rate of 1% over the U.S. treasury bill rate or be invested to mirror the return of the company's common stock.