PNC Bank 2009 Annual Report Download - page 181

Equity Compensation Plan Information
At December 31, 2009
(a) (b) (c)
Number of securities to
be issued upon exercise
of outstanding options,
warrants and rights
Weighted-average
exercise price of
outstanding
options, warrants
and rights
Number of securities
remaining available for
future issuance under
equity compensation plans
(excluding securities
reflected in column (a))
Equity compensation plans approved by security holders
1997 Long-Term Incentive Award Plan (Note 1) 1,945,317
Stock Options 9,289,529 $ 63.23
2006 Incentive Award Plan (Note 2 and Note 3)
Stock Options 9,106,882 $ 48.69 28,738,247
Incentive Performance Unit Awards (Note 4) 285,500 N/A
Stock-Payable Restricted Stock Units 290,516 N/A
1996 Executive Incentive Award Plan Incentive Awards N/A (Note 5)
Employee Stock Purchase Plan (Note 6) 1,841,464
Total approved by security holders 18,972,427 32,525,028
Equity compensation plans not approved by security holders (Note 7)
Former National City Corporation Stock Option Plans 1,522,015 $637.64
Former National City Corporation 2004 Deferred Compensation Plan and
Other Equity-Based Compensation Plans 313,291 N/A (Note 8)
Former Sterling Financial Corporation Stock Option Plan 100,120 $ 68.23
Total not approved by security holders 1,935,426
Total 20,907,853 32,525,028
N/A – not applicable
Note 1 – After shareholder approval of the 2006 Incentive Award Plan at the 2006 annual meeting of PNC’s shareholders on April 25, 2006 (see Note 2 below), no further grants were
permitted under the 1997 Long-Term Incentive Award Plan, other than for the exercise of reload or performance unit rights. As of December 31, 2009, the number of remaining shares
reserved under this plan for that purpose was 1,945,317.
Note 2 – The 2006 Incentive Award Plan was adopted by the Board on February 15, 2006 and approved by the PNC shareholders at the 2006 annual meeting on April 25, 2006. The plan
initially authorized up to 40,000,000 shares of common stock for issuance under the plan, subject to adjustment in certain circumstances. If and to the extent that options and SARs granted
under the plan, or granted under the prior plan and outstanding on the approval date of the plan, terminate, expire or are cancelled, forfeited, exchanged or surrendered after the effective
date of the plan without being exercised or if any share awards, share units, dividend equivalents or other share-based awards are forfeited or terminated, or otherwise not paid in full,
after the effective date of the plan, the shares subject to such grants become available again for purposes of the plan.
Note 3 – Under the 2006 Incentive Award Plan, awards or portions of awards that, by their terms, are payable only in cash do not reduce the number of shares that remain available for
issuance under the plan (the number in column (c)). During 2009, a total of 1,030,824 cash-payable share units plus cash-payable dividend equivalents with respect to 379,979 of those
share units were granted under the plan. This number includes an incremental change in the cash-payable portion of the 2007 and 2008 incentive performance unit award grants described
in Note 4 below, a separate 2009 incentive performance unit award grant payable solely in cash, and 2009 grants of share units (some of which include rights to cash dividend equivalents)
payable solely in cash. Payments are subject to the conditions of the individual grants, including, where applicable, the achievement of any performance goals or service requirement
established for such grants. The comparable amount for 2007 was 189,581 cash-payable share units plus cash-payable dividend equivalents with respect to 68,288 share-payable restricted
share units and the comparable amount for 2008 was 371,302 cash-payable share units plus cash-payable dividend equivalents with respect to 91,449 cash-payable restricted share units.
Note 4 – These incentive performance unit awards provide for the issuance of shares of common stock (up to a target number of shares) based on the degree to which corporate performance
goals established by the Personnel and Compensation Committee (Committee) have been achieved, and, if a premium level of such performance is achieved, for further payment in cash. The
numbers in column (a) of this table for these awards reflect the maximum number of shares that could be issued pursuant to grants outstanding at December 31, 2009 upon achievement of the
performance goals and other conditions of the grants. Grants under the 2006 Incentive Award Plan were made in the first quarter of 2007 and the first quarter of 2008.
Note 5 – The 1996 Executive Incentive Award Plan is a shareholder-approved plan that enables PNC to pay annual bonuses to its senior executive officers based upon the achievement of
specified levels of performance. The plan as amended and restated as of January 1, 2007 was adopted by the Board on February 14, 2007 and approved by the PNC shareholders at the
2007 annual meeting on April 24, 2007. The plan does not specify a fixed share amount for awards under the plan. Rather, it provides for maximum bonus awards for a given period
(generally a year) for each individual plan participant of 0.2% of incentive income for that period. Incentive income is based on PNC’s consolidated pre-tax net income as further adjusted
for the impact of changes in tax law, extraordinary items, discontinued operations, acquisition and merger integration costs, and for the impact of PNC’s obligation to fund certain
BlackRock long-term incentive programs. Although the size of awards under the plan is dollar-denominated, payment may be made in cash, in stock, or in a combination of cash and stock.
During 2009, PNC did not pay bonuses in the form of restricted stock from this plan.
Note 6 – The purchase price for shares sold under the plan represents 95% of the fair market value on the last day of each six-month offering period.
Note 7 – The plans in this section of the table reflect awards under pre-acquisition plans of National City Corporation and Sterling Financial Corporation, respectively. National City was
merged into PNC on December 31, 2008 and Sterling was merged into PNC on April 4, 2008. Pursuant to the respective merger agreements for these acquisitions, common shares of
National City or Sterling, as the case may be, issuable upon the exercise or settlement of various equity awards granted under the National City or Sterling plans were converted into
corresponding awards covering PNC common stock. Additional information regarding these plans is included in Note 16 Stock-Based Compensation Plans in the Notes To Consolidated
Financial Statements in Item 8 of this Report.
Note 8 – The National City Corporation 2004 Deferred Compensation Plan provided eligible employees the opportunity to defer the receipt of cash compensation which would have
otherwise been received as salary, as variable pay, or as an incentive award and provided participants with nonelective deferred compensation. The plan was frozen in December 2008 as
to new deferral elections and nonelective deferred compensation earned after 2008. Deferred compensation already in the plan at that time, or contributed to the plan pursuant to previous
deferral elections, is credited with gains or losses based upon investment options made available from time to time, and, as such, there is no weighted-average exercise price. The plan does
not limit the number of shares that may be issued for the plan.
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