SunTrust 2014 Annual Report Download - page 144

Notes to Consolidated Financial Statements, continued
121
Years Ended December 31
(Dollars in millions) 2014 2013 2012
Intrinsic value of options exercised 1$8 $11 $15
Fair value of vested restricted shares 128 21 31
Fair value of vested RSUs 111 1 3
1 Measured as of the grant date.
At December 31, 2014 and 2013, there was $61 million and $66
million, respectively, of unrecognized stock-based
compensation expense related to unvested stock options,
restricted stock, and RSUs. The unrecognized stock
compensation expense for December 31, 2014 is expected to be
recognized over a weighted average period of 1.68 years.
Stock-based compensation and the related tax benefit was
as follows:
Years Ended December 31
(Dollars in millions) 2014 2013 2012
Stock options $2 $6 $11
Restricted stock 27 32 30
RSUs 34 18 27
Total stock-based compensation $63 $56 $68
Stock-based compensation tax
benefit $24 $21 $26
Retirement Plans
Defined Contribution Plan
SunTrust's employee benefit program includes a qualified
defined contribution plan. For years ended December 31, 2014,
2013, and 2012, the plan provided a dollar for dollar match on
the first 6% of eligible pay that a participant, including executive
participants, elected to defer to the 401(k) plan. The Company's
expense related to this plan for the year ended December 31,
2014 was $98 million and $96 million for both December 31,
2013 and 2012. 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 401(k) Plan
subject to such limitations as may be imposed by the plans'
provisions and applicable laws and regulations. Employees will
vest in all Company 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 permit an additional discretionary
Company contribution equal to a fixed percentage of eligible
pay, as defined in the respective plans. Discretionary
contributions to the 401(k) Plan and the Deferred Compensation
Plan are shown in the following table.
Performance Year 1
(Dollars in millions) 2014 2013 2012
Contribution $19 $19 $38
Percentage of eligible pay 1% 1% 2%
1 Contributions for each of these performance years are paid in the first quarter of the
following performance year.
Noncontributory Pension Plans
The Company maintains a funded, noncontributory qualified
retirement plan (the "Retirement Plan") covering employees
meeting certain service requirements. The plan provides benefits
based on salary and years of service and, effective January 1,
2008, either a traditional pension benefit formula, a cash balance
formula (the PPA), or a combination of both. Participants are
100% vested after three years of service. The interest crediting
rate applied to each PPA was 3.89% for 2014. The Company
monitors the funding status of the plan closely and due to the
current funded status, the Company did not contribute to either
of its noncontributory qualified retirement plans ("Retirement
Benefit Plans") for the 2014 plan year.
The Company also maintains unfunded, noncontributory
nonqualified supplemental defined benefit pension plans that
cover key executives of the Company (the "SERP", the "ERISA
Excess Plan", and the "Restoration Plan"). The plans provide
defined benefits based on years of service and salary. The
Company's obligations for these nonqualified supplemental
defined benefit pension plans are included within the qualified
Pension Plans in the tables presented in this section under
“Pension Benefits.”
The SunTrust Banks, Inc. Restoration Plan (the “Restoration
Plan”), effective January 1, 2011, is a nonqualified defined
benefit cash balance plan designed to restore benefits to certain
employees that are limited under provisions of the Internal
Revenue Code and are not otherwise provided for under the
ERISA Excess Plan. The benefit formula under the Restoration
Plan is the same as the PPA under the Retirement Plan.
On October 1, 2004, the Company 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. Similar to the Company's Retirement Plan, due
to the current funding status of the NCF qualified Retirement
Plan, the Company did not make a contribution for the 2014 plan
year.
The Retirement Plan, the SERP, the ERISA Excess Plan,
and the Restoration Plan were each amended on November 14,
2011 to cease all future benefit accruals. As a result, the
traditional pension benefit formulas (final average pay formulas)
do not reflect future salary increases and benefit service after
December 31, 2011, and compensation credits under the Personal
Pension Accounts (cash balance formula) ceased. However,
interest credits under the Personal Pension Accounts continue to
accrue until benefits are distributed and service continues to be
recognized for vesting and eligibility requirements for early
retirement. Additionally, the NCF Retirement Plan, which had
been previously curtailed with respect to future benefit accruals,
was amended to cease any adjustments for pay increases after
December 31, 2011.
Other Postretirement Benefits
Although not a contractual obligation, the Company provides
certain health care and life insurance benefits to retired
employees (“Other Postretirement Benefits”). At the option of
the Company, retirees may continue certain health and life
insurance benefits if they meet specific age and service
requirements at the time of retirement. The health care plans are
contributory with participant contributions adjusted annually,