SunTrust 2011 Annual Report Download - page 164
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Please find page 164 of the 2011 SunTrust 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.Notes to Consolidated Financial Statements (Continued)
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The aggregate intrinsic value in the table above represents the total pre-tax intrinsic value (the difference between the Company’s
closing stock price on the last trading day of 2011 and the exercise price, multiplied by the number of in-the-money stock options)
that would have been received by the option holders had all option holders exercised their options on December 31, 2011. This
amount changes based on the fair market value of the Company’s stock. Total intrinsic value of options exercised for the years
ended December 31, 2011, 2010 and 2009 was less than $1 million each year. Total fair value, measured as of the grant date, of
restricted shares vested was $55 million, $85 million, and $81 million, for the years ended December 31, 2011, 2010 and 2009,
respectively.
As of December 31, 2011 and 2010, there was $63 million and $62 million, respectively, of unrecognized stock-based compensation
expense related to nonvested stock options and restricted stock. The unrecognized stock compensation expense as of December 31,
2011 is expected to be recognized over a weighted average period of 2.2 years.
Stock-based compensation expense recognized in noninterest expense was as follows:
(Dollars in millions)
Stock-based compensation expense:
Stock options
Restricted stock
Restricted stock units
Total stock-based compensation expense
Year Ended December 31
2011
$15
32
10
$57
2010
$14
42
—
$56
2009
$12
66
—
$78
The recognized stock-based compensation tax benefit was $22 million, $21 million and $30 million for the years ended December
31, 2011, 2010, and 2009, respectively.
In addition to the SunTrust stock-based compensation awards, the Company has two subsidiaries which sponsor separate equity
plans where subsidiary restricted stock or restricted membership interests are granted to key employees of the subsidiaries. These
awards may be subject to one or more vesting criteria, including employment, performance or other conditions as established by
the board of directors or manager of the subsidiary at the time of grant. Compensation cost for these restricted awards is equal to
the fair market value of the shares at the date of the award and is amortized to compensation expense over the vesting period
considering assumed forfeitures. As the equity of these subsidiaries does not trade in public markets, fair value at grant date is
determined based on a current external valuation. Depending on the specific terms of the awards, unvested awards may or may
not be entitled to receive dividends or distributions during the vesting period. The restricted stock awards and restricted membership
interest awards are subject to certain fair value put and call provisions subsequent to vesting. Stock-based compensation expense
recognized in noninterest expense for these subsidiary equity plans for the years ended December 31, 2011, 2010 and 2009 totaled
$8 million, $13 million and $1 million, respectively. At the end of 2010, the vesting of some of these awards caused the Company
to record noncontrolling interest. In December 2011, one of the subsidiaries converted all unvested membership interest awards
into LTI cash awards for a fixed dollar amount equal to the fair value of the member interest at the date of modification. The
modified awards will continue to vest based on their original vesting schedule, and expense will be recognized based on the higher
of the original grant value or the modified value.
Retirement Plans
Defined Contribution Plan
SunTrust maintains a qualified 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, 2011, 2010 and 2009 totaled $81 million, $74 million and $76 million, respectively, excluding the $28
million special contribution in 2011 discussed below.
SunTrust also maintains the SunTrust Banks, Inc. Deferred Compensation Plan in which key executives of the Company are
eligible. In accordance with the terms of the plan, the matching contribution to the Deferred Compensation Plan is 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 SEO, elects to defer to the plan, subject to such limitations as may be imposed by the plans’ provisions and applicable
laws and regulations. Effective January 1, 2011, employees hired on or after January 1, 2011 will become vested in the Company’s
401(k) matching contributions and matching contributions under the Deferred Compensation Plan upon completion of two years
of vesting service. Effective January 1, 2012, the Company's 401(k) plan and the Deferred Compensation Plan were amended to
increase the matching contribution from 5% to 6% and to permit additional discretionary Company contributions equal to a fixed
percent of eligible earnings, as defined in the applicable plan. Additionally, the Company's 401(k) plan and the Deferred