PNC Bank 2014 Annual Report Download - page 251

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,
with certain exceptions that are no longer applicable.
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
stock options and stock appreciation rights (“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.
Shares available for issuance under this plan are also reduced
by the number of any shares used in payment of bonuses
under the 1996 Executive Incentive Award Plan.
The plan was most recently amended and restated
incorporating amendments adopted by the Board and
approved by PNC’s shareholders at the 2011 annual meeting
of shareholders, effective as of March 11, 2011. These
amendments incorporate, among other things, an increase to
the overall limit on the number of shares that may be awarded
under the plan to 46,000,000, and a new requirement that each
award of a share (other than pursuant to a stock option or
SAR) granted under the plan after that effective date will
reduce the aggregate plan limit by 2.5 shares, while each
award of a share pursuant to a stock option or SAR will reduce
the aggregate plan limit by one share.
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 2014, a total of 397,929 cash-payable share units plus
cash-payable dividend equivalents with respect to 268,488 of
those share units were granted under the plan. This number
includes an incremental change in the cash-payable portion of
the 2012 incentive performance unit award grant described in
Note 4 below (net of forfeitures), a separate 2014
incentive performance unit award grant payable solely in cash,
2013 and 2014 grants of share units (all of which include
rights to cash dividend equivalents) payable solely in cash and
fractional units 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 2013 was 505,343 cash-payable share
units plus cash-payable dividend equivalents with respect to
391,520 cash-payable restricted share units, and the
comparable amount for 2012 was 543,959 cash-payable share
units plus cash-payable dividend equivalents with respect to
418,665 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 have been achieved, subject to potential negative
adjustment based on certain risk-related performance metrics,
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, 2014 upon achievement of the performance
goals and other conditions of the grants. At the premium level
of performance, a further maximum payout of cash
equivalents for 100%, 25% and 25%, respectively, of the same
number of share units for the 2012 grant, 2013 grant and 2014
grant, respectively, plus the incremental change described in
Note 3, could also be payable subject to the other conditions
of the grants. Grants under the 2006 Incentive Award Plan
were made in the first quarter of 2012, 2013 and 2014.
Note 5 – These stock-payable restricted stock units include
2011, 2012, 2013 and 2014 grants of performance-based
restricted share units (with the units payable solely in stock
and related dividend equivalents payable solely in cash) that
have a service condition, an external and also in the later
grants an internal risk-related performance condition and a
market condition and also include grants of other stock-
payable restricted share units, some of which are time-based,
others which are performance-based and some of which also
include related dividend equivalents payable solely in cash.
The number in column (a) includes the maximum number of
shares that could be issued pursuant to grants of this type of
award outstanding at December 31, 2014 upon achievement of
the performance and market conditions, where applicable, and
other conditions of the grants. Cash-payable dividend
equivalents were granted with respect to most of these stock-
payable restricted stock units. Where stock-payable restricted
share units include a fractional share interest, such fractional
share interest is payable only in cash share equivalents.
During 2014, a total of 39 cash share equivalents were paid in
the aggregate for fractional share interests, including any for
award grants described in Note 4.
Note 6 – 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
The PNC Financial Services Group, Inc. – Form 10-K 233