PNC Bank 2010 Annual Report Download - page 157
Download and view the complete annual report
Please find page 157 of the 2010 PNC Bank annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.Perpetual Trust Securities (the Trust I Securities) of PNC
Preferred Funding Trust I (Trust I) in which Trust I acquired
$500 million of LLC Preferred Securities. PNC REIT Corp.
owns 100% of LLC’s common voting securities. As a result,
LLC is an indirect subsidiary of PNC and is consolidated on
our Consolidated Balance Sheet. Trust I, II and III’s
investment in LLC Preferred Securities is characterized as a
noncontrolling interest on our Consolidated Balance Sheet
since we are not the primary beneficiary of Trust I, Trust II
and Trust III. This noncontrolling interest totaled
approximately $1.3 billion at December 31, 2010.
Each Trust III Security is automatically exchangeable into a
share of Series J Non-Cumulative Perpetual Preferred Stock of
PNC, each Trust II Security is automatically exchangeable
into a share of Series I Non-Cumulative Perpetual Preferred
Stock of PNC (Series I Preferred Stock), and each Trust I
Security is automatically exchangeable into a share of Series F
Non-Cumulative Perpetual Preferred Stock of PNC Bank,
N.A. (PNC Bank Preferred Stock), in each case under certain
conditions relating to the capitalization or the financial
condition of PNC Bank, N.A. and upon the direction of the
Office of the Comptroller of the Currency.
We entered into a replacement capital covenant in connection
with the closing of the Trust I Securities sale (the Trust RCC)
whereby we agreed that neither we nor our subsidiaries (other
than PNC Bank, N.A. and its subsidiaries) would purchase the
Trust Securities, the LLC Preferred Securities or the PNC
Bank Preferred Stock unless such repurchases or redemptions
are made from the proceeds of the issuance of certain
qualified securities and pursuant to the other terms and
conditions set forth in the replacement capital covenant with
respect to the Trust RCC.
We also entered into a replacement capital covenant in
connection with the closing of the Trust II Securities sale (the
Trust II RCC) whereby we agreed until March 29, 2017 that
neither we nor our subsidiaries would purchase or redeem the
Trust II Securities, the LLC Preferred Securities or the Series I
Preferred Stock unless such repurchases or redemptions are
made from the proceeds of the issuance of certain qualified
securities and pursuant to the other terms and conditions set
forth in the replacement capital covenant with respect to the
Trust RCC.
As of December 31, 2010, each of the Trust RCC and the
Trust II RCC are for the benefit of holders of our $200 million
of Floating Rate Junior Subordinated Notes issued in June
1998.
PNC has contractually committed to Trust II and Trust III that
if full dividends are not paid in a dividend period on the Trust
II Securities or the Trust III Securities, as applicable, or the
LLC Preferred Securities held by Trust II or Trust III, as
applicable, PNC will not declare or pay dividends with respect
to, or redeem, purchase or acquire, any of its equity capital
securities during the next succeeding dividend period, other
than: (i) purchases, redemptions or other acquisitions of shares
of capital stock of PNC in connection with any employment
contract, benefit plan or other similar arrangement with or for
the benefit of employees, officers, directors or consultants,
(ii) purchases of shares of common stock of PNC pursuant to a
contractually binding requirement to buy stock existing prior
to the commencement of the extension period, including under
a contractually binding stock repurchase plan, (iii) any
dividend in connection with the implementation of a
shareholders’ rights plan, or the redemption or repurchase of
any rights under any such plan, (iv) as a result of an exchange
or conversion of any class or series of PNC’s capital stock for
any other class or series of PNC’s capital stock, (v) the
purchase of fractional interests in shares of PNC capital stock
pursuant to the conversion or exchange provisions of such
stock or the security being converted or exchanged or (vi) any
stock dividends paid by PNC where the dividend stock is the
same stock as that on which the dividend is being paid.
PNC Bank, N.A. has contractually committed to Trust I that if
full dividends are not paid in a dividend period on the Trust I
Securities, LLC Preferred Securities or any other parity equity
securities issued by the LLC, neither PNC Bank, N.A. nor its
subsidiaries will declare or pay dividends or other
distributions with respect to, or redeem, purchase or acquire or
make a liquidation payment with respect to, any of its equity
capital securities during the next succeeding period (other than
to holders of the LLC Preferred Securities and any parity
equity securities issued by the LLC) except: (i) in the case of
dividends payable to subsidiaries of PNC Bank, N.A., to PNC
Bank, N.A. or another wholly-owned subsidiary of PNC Bank,
N.A. or (ii) in the case of dividends payable to persons that are
not subsidiaries of PNC Bank, N.A., to such persons only if,
(A) in the case of a cash dividend, PNC has first irrevocably
committed to contribute amounts at least equal to such cash
dividend or (B) in the case of in-kind dividends payable by
PNC REIT Corp., PNC has committed to purchase such
in-kind dividend from the applicable PNC REIT Corp. holders
in exchange for a cash payment representing the market value
of such in-kind dividend, and PNC has committed to
contribute such in-kind dividend to PNC Bank, N.A.
N
OTE
14 E
MPLOYEE
B
ENEFIT
P
LANS
P
ENSION
A
ND
P
OSTRETIREMENT
P
LANS
We have a noncontributory, qualified defined benefit pension
plan covering eligible employees. Benefits are determined
using a cash balance formula where earnings credits are a
percentage of eligible compensation. Earnings credit
percentages for plan participants on December 31, 2009 are
frozen at their level earned to that point. Earnings credits for
all employees who become participants on or after January 1,
2010 are a flat 3% of eligible compensation. Participants at
December 31, 2009 earn interest based on 30-year Treasury
securities with a minimum rate, while new participants on or
after January 1, 2010 are not subject to the minimum rate.
149