SunTrust 2008 Annual Report Download - page 142

SUNTRUST BANKS, INC.
Notes to Consolidated Financial Statements (Continued)
Stock-based compensation expense recognized in noninterest expense as of December 31 was as follows:
(Dollars in thousands) 2008 2007 2006
Stock-based compensation expense:
Stock options $12,407 $16,908 $23,329
Performance and restricted stock 76,656 35,299 18,340
Total stock-based compensation expense $89,063 $52,207 $41,669
The recognized tax benefit amounted to $33.8 million, $19.8 million and $15.8 million for the years ended December 31,
2008, 2007 and 2006, respectively.
Retirement Plans
Defined Contribution Plan
SunTrust maintains a defined contribution plan that offers a dollar for dollar match on the first 5% of eligible pay that a
participant, including executive participants, elects to defer to the 401(k) plan. Compensation expense related to this plan for
the years ended December 31, 2008, 2007 and 2006 totaled $79.6 million, $69.6 million and $66.4 million, respectively.
On December 31, 2007, SunTrust Banks, Inc. adopted written amendments to SunTrust Banks, Inc. 401(k) Excess Plan.
Effective January 1, 2007, the Company matching contribution under the SunTrust Banks, Inc. 401(k) Excess Plan will
provide for a year-end true up to include deferrals to the deferred compensation plan that could have been deferred under the
401(k) Excess Plan. Without further amendment, the matching contribution to the 401(k) Excess Plan will be automatically
increased, effective January 1, 2008, in accordance with the terms of the plan to be the same percentage of match as provided
in the qualified 401(k) Plan, which is 100% of the first 5% of eligible pay that a participant, including an executive
participant, elects to defer to the applicable plan, subject to such limitations as may be imposed by such plan provisions and
applicable laws and regulations.
Noncontributory Pension Plans
SunTrust maintains a funded, noncontributory qualified retirement plan covering employees meeting certain service
requirements. The plan provides benefits based on salary and years of service. Effective January 1, 2008, Retirement Plan
participants who were Company employees as of December 31, 2007 (“Affected Participants”) ceased to accrue additional
benefits under the existing pension benefit formula after that date and all their accrued benefits were frozen. Beginning
January 1, 2008, Affected Participants who have fewer than 20 years of service and future participants will accrue future
pension benefits under a cash balance formula that provides compensation and interest credits to a Personal Pension Account.
Affected Participants with 20 or more years of service as of December 31, 2007 were given the opportunity to choose
between continuing a traditional pension benefit accrual under a reduced formula or participating in the new Personal
Pension Account. Effective January 1, 2008, the vesting schedule was changed from the current 5-year cliff to a 3-year cliff
for participants employed by the Company on and after that date. SunTrust monitors the funded status of the plan closely and
following a significant decline in plan assets during 2008, SunTrust decided to make a contribution to the SunTrust
Retirement Plan at the end of 2008 in order to improve the plan’s funded status as of December 31, 2008.
On October 1, 2004, SunTrust acquired NCF. Prior to the acquisition, NCF sponsored a funded qualified retirement plan, an
unfunded nonqualified retirement plan for some of its participants, and certain other postretirement health benefits for its
employees. Effective December 31, 2004, participants no longer earned future service in the NCF Retirement Plan (qualified
plan), and participants’ benefits were frozen with the exception of adjustments for pay increases after 2004. All former NCF
employees who met the service requirements began to earn benefits in the SunTrust Retirement Plan effective January 1,
2005. On February 13, 2007, the NCF Retirement Plan was amended to completely freeze benefits for those Affected
Participants who do not elect, or are not eligible to elect, the traditional pension benefit formula in the SunTrust Retirement
Plan. The effective date for changes impacting the NCF Retirement Plan is January 1, 2008. Similar to the SunTrust
Retirement Plan, due to significant declines in the value of plan assets experienced in 2008, SunTrust contributed to the NCF
Retirement Plan at the end of 2008 in order to improve the plan’s funded status as of December 31, 2008.
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