PNC Bank 2013 Annual Report Download - page 206

In the preceding table, the unit shares and related weighted-
average grant date fair value of the incentive/performance
awards exclude the effect of dividends on the underlying
shares, as those dividends will be paid in cash.
L
IABILITY A WARDS
A summary of all nonvested, cash-payable restricted share
unit activity follows:
Table 125: Nonvested Cash-Payable Restricted Share
Units – Rollforward
In thousands
Nonvested
Cash-Payable
Restricted
Share Units
Aggregate
Intrinsic
Value
Outstanding at December 31, 2012 920
Granted 485
Vested and Released (457)
Forfeited (7)
Outstanding at December 31, 2013 941 $73,015
Included in the preceding table are cash-payable restricted
share units granted to certain executives. These grants were
made primarily as part of an annual bonus incentive deferral
plan. While there are time-based and other vesting criteria,
there are generally no market or performance criteria
associated with these awards. Compensation expense
recognized related to these awards was recorded in prior
periods as part of annual cash bonus criteria. As of
December 31, 2013, there were 824,696 of these cash-payable
restricted share units outstanding.
The total of all share-based liability awards paid out during
2013, 2012 and 2011 was approximately $29 million, $39
million and $34 million, respectively.
E
MPLOYEE S TOCK P URCHASE P LAN
As of December 31, 2013, our ESPP had approximately
1.2 million shares available for issuance. Full-time employees
with six months and part-time employees with 12 months of
continuous employment with a participating PNC entity are
eligible to participate in the ESPP at the commencement of the
next six-month offering period. Eligible participants may
purchase our common stock at 95% of the fair market value
on the last day of each six-month offering period. No charge
to earnings is recorded with respect to the ESPP.
Table 126: Employee Stock Purchase Plan – Summary
Year ended December 31 Shares Issued Purchase Price Per Share
2013 167,260 $69.27 and $73.70
2012 183,892 $58.05 and $55.39
2011 165,408 $56.63 and $54.79
B
LACK R OCK LTIP AND E XCHANGE A GREEMENTS
BlackRock adopted the 2002 LTIP program to help attract and
retain qualified professionals. At that time, PNC agreed to
transfer up to 4 million shares of BlackRock common stock to
fund a portion of the 2002 LTIP program and future LTIP
programs approved by BlackRock’s Board of Directors,
subject to certain conditions and limitations. Approximately
1.1 million shares of BlackRock common stock were
transferred by PNC and distributed to LTIP participants in
connection with the 2002 LTIP program.
In 2009, PNC’s obligation to deliver its BlackRock common
shares to BlackRock under LTIP programs was replaced with
an obligation to deliver shares of BlackRock’s Series C
Preferred Stock. This change was part of an Exchange
Agreement with BlackRock whereby PNC acquired
2.9 million shares of Series C Preferred Stock from
BlackRock in exchange for common shares.
In 2011, we transferred approximately 1.3 million shares of
BlackRock Series C Preferred Stock to BlackRock in connection
with our obligation. On January 31, 2013, we transferred an
additional 205,350 shares to BlackRock in connection with our
obligation. After this transfer and at December 31, 2013, we hold
approximately 1.3 million shares of BlackRock Series C
Preferred Stock which are available to fund our obligation in
connection with the BlackRock LTIP programs.
PNC accounts for its BlackRock Series C Preferred Stock at fair
value, which offsets the impact of marking-to-market the
obligation to deliver these shares to BlackRock. The fair value of
the BlackRock Series C Preferred Stock is included on our
Consolidated Balance Sheet in the caption Other assets.
Additional information regarding the valuation of the BlackRock
Series C Preferred Stock is included in Note 9 Fair Value.
188 The PNC Financial Services Group, Inc. – Form 10-K