SunTrust 2015 Annual Report Download - page 144

Notes to Consolidated Financial Statements, continued
116
The aggregate intrinsic value in the preceding table represents
the total pre-tax intrinsic value (the difference between the
Company’s closing stock price on the last trading day of 2015
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, 2015. Additional option and stock-based
compensation information at December 31 is shown in the
following table.
(Dollars in millions) 2015 2014 2013
Intrinsic value of options exercised 1$15 $8 $11
Fair value of vested restricted shares 135 28 21
Fair value of vested RSUs 123 11 1
1 Measured as of the grant date.
At December 31, 2015 and 2014, there was $54 million and $61
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, 2015 is expected to be
recognized over a weighted average period of 1.8 years.
Stock-based compensation and the related tax benefit was as
follows:
Years Ended December 31
(Dollars in millions) 2015 2014 2013
Stock options $1 $2 $6
Restricted stock 16 27 32
Performance stock units 32 13 —
RSUs 46 34 18
Total stock-based compensation $95 $76 $56
Stock-based compensation tax
benefit $36 $29 $21
Retirement Plans
Noncontributory Pension Plans
The Company maintains a funded, noncontributory qualified
retirement plan ("Retirement Plan") covering employees
meeting certain service requirements. The plan provides benefits
based on salary and years of service, and based on either a
traditional pension benefit formula, a cash balance formula for
the PPAs, or a combination of both. Participants are 100% vested
after three years of service. The interest crediting rate applied to
each PPA was 3.00% for 2015. The Company monitors the
funding status of the plan closely and due to the current funded
status, the Company did not make a contribution to its
noncontributory qualified retirement plan for the 2015 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 SunTrust Banks, Inc. Restoration Plan (“Restoration
Plan”), effective January 1, 2011, is a nonqualified defined
benefit cash balance plan designed to restore benefits to certain
employees who 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 what is used for PPAs under the Retirement
Plan.
On October 1, 2004, the Company acquired NCF. Prior to
the acquisition, NCF sponsored a funded qualified retirement
plan ("NCF Retirement Plan") and an unfunded nonqualified
retirement plan, and certain other postretirement health benefits
plans for its employees ("NCF Retirement Plan"). Due to the
current funding status of the NCF qualified Retirement Plan, the
Company did not make a contribution for the 2015 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. Additionally, the NCF
Retirement Plan was amended to cease any adjustments for pay
increases after December 31, 2011.
Other Postretirement Benefits
The Company provides certain health care and life insurance
benefits (“Other Postretirement Benefits”) to retired employees.
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, and the life insurance plans are noncontributory.
Certain retiree health benefits are funded in a Retiree Health
Trust. Additionally, certain retiree life insurance benefits are
funded in a VEBA. Effective April 1, 2014, the Company
amended the plan which now requires retirees age 65 and older
to enroll in individual Medicare supplemental plans. In addition,
the Company will fund a tax-advantaged HRA to assist some
retirees with medical expenses.