COLONIAL BANCGROUP INC
MANAGEMENT INCENTIVE PLAN
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<TYPE>EX-10.9
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<FILENAME>g66021ex10-9.txt
<DESCRIPTION>MANAGEMENT INCENTIVE PLAN
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                                                                    EXHIBIT 10.9

                           MANAGEMENT INCENTIVE PLAN
                                       OF
                          THE COLONIAL BANCGROUP, INC.

     This Management Incentive Plan of THE COLONIAL BANCGROUP, INC., a Delaware
corporation with its principal place of business in Montgomery, Alabama, is
dated as of the 1st day of January, 2000.

                                  WITNESSETH:

     WHEREAS, the Executive Compensation Subcommittee is responsible for certain
aspects of compensation for executive officers of The Colonial BancGroup, Inc.;
and

     WHEREAS, the Executive Compensation Subcommittee developed this Management
Incentive Plan in order to compensate and reward executive officers of The
Colonial BancGroup, Inc. for outstanding job performance which contributes to
the financial success of The Colonial BancGroup, Inc.; and

     WHEREAS, the Board of Directors of The Colonial BancGroup, Inc., upon
recommendation of the Executive Compensation Subcommittee, desires to adopt this
Management Incentive Plan for the purposes set forth herein;

     NOW, THEREFORE, the Board of Directors of The Colonial BancGroup, Inc.
hereby adopts, subject to shareholder approval, this Management Incentive Plan
as follows:

1.  DEFINITIONS.

     1.1. "BancGroup" means The Colonial BancGroup, Inc., a corporation
organized and existing under the laws of the State of Delaware, with its
principal place of business in Montgomery, Alabama, and any successor thereto,
whether by merger, consolidation, sale of assets, liquidation or otherwise.

     1.2. "Board" means the Board of Directors of BancGroup.

     1.3. "Code" means the Internal Revenue Code of 1986, as amended.

     1.4. "Compensation" means the base salary paid to Participants excluding
overtime, commissions, awards from other incentive programs, BancGroup
contributions to fringe benefit programs, and other "non-salary" income.

     1.5. "Executive Officer" means those persons who are full-time employees of
BancGroup and who are serving as the Chairman, President, or as an Executive
Vice President of BancGroup.

     1.6. "Participant" means an Executive Officer who has been designated for
participation in the Plan by the Subcommittee in accordance with Section 3 of
the Plan and who has commenced participation in the Plan.

     1.7. "Performance Agreement" means the written notice described in Section
3.2 of the Plan, executed by an Executive Officer of BancGroup and transmitted
on behalf of the Subcommittee by BancGroup to each Participant, setting forth
the terms and conditions of each Participant's participation in the Plan.

     1.8. "Plan" means the Management Incentive Plan of BancGroup established by
this document, as amended from time to time, and any related Performance
Agreements.

     1.9. "Plan Year" means any performance period which begins on January 1 of
a particular year and ends on December 31 of that same year.

     1.10. "Subcommittee" means the Executive Compensation Subcommittee of the
Board.

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2.  PURPOSE.

     The Plan is intended to promote and encourage excellence in the performance
of responsibilities by the Executive Officers; to maximize BancGroup's
soundness, profitability and growth, and to provide an incentive opportunity
that will permit those members of management who are positioned to make
significant contributions to BancGroup's success to receive appropriate total
cash compensation.

3.  PARTICIPATION.

     3.1. Selection to Participate.  The Subcommittee, prior to the close of
each Plan Year, may designate in writing one or more Executive Officers as
persons eligible to participate in the Plan during the next succeeding Plan
Year, except that in the case of the Plan Year ending December 31, 2000, the
Subcommittee may make such designation not later than ninety (90) days after the
commencement of that Plan Year. The Subcommittee shall solicit the
recommendation of the Chairman with respect to the participation of an Executive
Officer, other than the Chairman, in the Plan. Participation in the Plan is
conditional; participation in one Plan Year does not guarantee participation in
successive years.

     3.2. Designation of Award and Performance Goals.

          3.2.1. Not later than ninety (90) days after the commencement of each
     Plan Year, the Subcommittee shall approve and establish, and communicate in
     writing to each Participant in the Plan for such Plan Year, the terms and
     conditions of each such Participant's participation in the Plan for such
     Plan Year, including the award that each such Participant will be eligible
     to earn during such Plan Year (which shall be expressed as a percentage of
     each such Participant's Compensation as of the first day of such Plan Year
     and which shall specify a minimum, maximum, and target award for each such
     Participant) and the performance goals that must be achieved in order for
     each such Participant to earn such award; provided, however, that in no
     event shall the Subcommittee grant any Participant under the Plan an award
     that could result in such Participant earning an amount under the Plan
     greater than $3,000,000 with respect to any Plan Year.

          3.2.2. The Subcommittee shall establish corporate performance goals of
     one or more of the following business criteria: return on equity, return on
     assets, earnings per share, nonperforming assets, stock price, and net
     income. Performance goals established by the Subcommittee shall be
     objective performance goals within the meaning of Section 162(m) of the
     Code and Treasury Regulations promulgated thereunder. Furthermore, and
     notwithstanding any other provision of the Plan to the contrary, once the
     Subcommittee has established performance goals for a Participant, the
     Subcommittee shall have no discretion to (i) increase the amount of
     compensation that would otherwise be due upon the attainment of the goals,
     or (ii) alter the goals for the Plan Year to which they relate.

          3.2.3. In establishing the award and performance goals of Participants
     in the Plan, the Subcommittee shall consider the Participant's level of
     responsibility with BancGroup and the Participant's potential contribution
     to the performance goals of BancGroup. In establishing the award and
     performance goals of any Participant other than the Chairman of BancGroup,
     the Subcommittee shall solicit the recommendation of BancGroup's Chairman.

          3.2.4. The Subcommittee shall assign weightings to indicate the
     relative importance of each business criteria in determining incentive
     awards earned under the Plan. The sum of weightings assigned to any
     Participant must equal 100%. These weightings may vary from Plan Year to
     Plan Year, and, except with respect to the Chairman, shall be based on
     recommendations by the Chairman subject to approval by the Subcommittee.
     The Subcommittee shall assign such weightings not later than ninety (90)
     days after the commencement of each Plan Year, and such weightings shall
     remain in effect for the remainder of the Plan Year.

4.  PAYMENT OF AWARDS.

     4.1 Calculation of Award Payments.  Within sixty (60) days following the
close of each Plan Year in which a Participant is participating in the Plan, the
Subcommittee shall compare the terms and conditions of
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the award of each Participant and the performance goals assigned to each such
Participant. Following such determination, and prior to the payment of awards
pursuant to Section 4.2 below, the Subcommittee shall certify in writing to each
Participant and to the Board whether each Participant has met the terms and
conditions of the award for the Plan Year in question.

     4.2 Payment of Award Amounts.  All awards determined to have been earned
pursuant to Section 4.1 of the Plan shall be payable in cash, as soon as
administratively possible following the certification described in Section 4.1
above, but in no event later than seventy-five (75) days following the close of
the Plan Year to which such award related.

     4.3 Effect of Termination of Employment on Payment of Award.

          4.3.1. If a Participant terminates employment during a Plan Year for
     any reason other than retirement, disability, or death, no award will be
     payable under the Plan.

          4.3.2. If a Participant's employment terminates during a Plan Year as
     a result of retirement, disability, or death, the Participant, his
     Beneficiary, or his estate will receive a pro-rata portion of the incentive
     award determined as of the end of the Plan Year. The proration will be
     based on the Participant's year-to-date Compensation for the Plan Year and
     the achieved levels of performance as of the end of the Plan Year. The
     pro-rated award will be paid at the same time as awards are paid to active
     Participants.

          4.3.3. If a Participant's employment is terminated during a Plan Year
     for willful dishonesty or gross misconduct, no award will be payable. If a
     Participant's employment is terminated other than for willful dishonesty or
     gross misconduct, the Participant will receive a pro-rata portion of the
     incentive award determined as of the end of the Plan Year. The proration
     will be based on the Participant's year-to-date Compensation for the Plan
     Year and the achieved levels of performance as of the end of the Plan Year.
     The pro-rated award will be paid at the same time as awards are paid to
     active Participants.

5.  ADMINISTRATION.

     5.1. The Subcommittee, as Plan administrator, is authorized to administer
the Plan, subject to and in accordance with the provisions set forth herein, and
shall have all powers necessary and appropriate to enable it to properly
administer the Plan, including but not limited to the power to:

          5.1.1. approve the establishment and range of corporate goals,
     recommendations regarding participation, the amount of individual award
     payments, and all matters relating to the day-to-day operation of the Plan;

          5.1.2. construe and interpret the Plan, establish rules and
     regulations, delegate such administrative responsibilities as it deems
     proper, and to perform all other acts it deems necessary to carry out the
     intent and purpose of the Plan;

          5.1.3. suspend or terminate, in whole or in part, or amend the terms
     of the Plan, at any time, without the need for obtaining approval of the
     shareholders, by an instrument in writing; provided, however, that
     shareholder approval shall be required for any amendment that changes the
     material terms of the Plan applicable to any Participant;

          5.1.4. cancel the participation of any person who conducts himself in
     a manner which the Subcommittee, in the exercise of reasonable discretion,
     determines to be inimical to the best interests of BancGroup; and

          5.1.5. correct any defect, supply any omission, or reconcile any
     inconsistency in the Plan, in the manner and to the extent it shall deem
     necessary.

     5.2. The Subcommittee's determination under the Plan of the persons to
participate and receive awards and the terms and conditions of such awards need
not be uniformly applicable to all Participants, but may be made by the
Subcommittee on a selective basis among persons who receive or are eligible to
receive awards

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under the Plan, whether or not such persons are similarly situated. The
Subcommittee shall have final approval authority over the payment of all awards
under this Plan, whether individually or collectively.

6.  PLAN FUNDING AND ACCRUALS OF AWARDS

     The Plan is unfunded and awards hereunder shall be paid from general
corporate funds.

7.  NEW PARTICIPANTS, PROMOTIONS, OR TRANSFERS

     All participation in the Plan is subject to approval by the Subcommittee.
Newly hired or promoted employees who enter positions which are considered to be
eligible for participation in the Plan normally will, upon approval by the
Subcommittee, enter the Plan on January 1 next following the date of hire or
promotion. The Chairman, however, subject to approval by the Subcommittee, may
authorize immediate participation upon hire or promotion.

8.  MISCELLANEOUS.

     8.1. Construction of Plan.  Except as provided under federal law, the
provisions of the Plan shall be governed by and construed in accordance with the
laws of the State of Delaware, and shall be binding on and inure to the benefit
of any successor or successors to BancGroup.

     8.2. Right to Employment.  Participation in this Plan shall not be
construed as giving any Participant the right to be retained in the employ of
BancGroup. Further, BancGroup expressly reserves the right at any time to
dismiss any Participant with or without cause, such dismissal to be free from
any liability or any claim under the Plan, except as provided herein.

     8.3. Nonalienation of benefit.  No benefit under the Plan shall be subject
in any manner to anticipation, alienation, sale, transfer, assignment, pledge,
encumbrance or charge, and any attempt to do so shall be void.

     8.4. Withholding of taxes.  BancGroup shall have the right to deduct from
any award payable under this Plan all applicable withholding and employment
taxes at such times as they are due.

     8.5. Plan expenses.  Any expenses incurred in the administration of this
Plan shall be borne by BancGroup.

     8.6. Entire Agreement.  This Plan, as completed and executed by BancGroup,
the Performance Agreements, and all amendments thereto, will constitute the
entire agreement between BancGroup and Participants regarding the Plan.

     8.7. Captions.  The captions or headings in this Agreement are made for
convenience and general reference only and shall not be construed to describe,
define, or limit the scope or intent of the provisions of this Agreement.

     8.8. Number and gender.  The masculine pronoun used shall include the
feminine pronoun and the singular number shall include the plural number unless
the context of the Plan requires otherwise.

     IN WITNESS WHEREOF, The Colonial BancGroup, Inc. has caused this Management
Incentive Plan to be executed as of this the 1st day of January, 2000.

                                          THE COLONIAL BANCGROUP, INC.

                                          By:     /s/ ROBERT E. LOWDER
                                            ------------------------------------
                                            Robert E. Lowder
                                            Chairman & Chief Executive Officer

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