Ameriprise 2008 Annual Report Download - page 140

As of December 31, 2008, there were approximately 0.7 million units outstanding of restricted stock units, including deferred
share units, of which approximately 0.5 million were fully vested.
Deferred Equity Program for Independent Financial Advisors
The P2 Deferral Plan, which was amended in April 2008, gives certain advisors the choice to defer a portion of their
commissions in the form of share-based awards, which are subject to forfeiture based on future service requirements. The
Company provides a match on the advisor deferrals, which participants can elect to receive in cash or shares of common
stock. The P2 Deferral Plan allows for the grant of share-based awards of up to 8.5 million shares of common stock.
The number of units awarded is based on the performance measures, deferral percentage and the market value of Ameriprise
Financial common stock on the deferral date as defined by the plan. As independent financial advisors are not employees of
the Company, the awards are expensed based on the stock price of the Company’s common stock up to the vesting date. The
share-based awards generally vest ratably over four years, beginning on January 1 of the year following the plan year in which
the award was made. The P2 Deferral Plan allows for accelerated vesting of the share-based awards based on age and years
as an advisor. Commission expense is recognized on a straight-line basis over the vesting period. For the years ended
December 31, 2008, 2007 and 2006, share-based expense related to restricted stock units was $44 million, $52 million,
and $31 million, respectively, for share-based awards under the P2 Deferral Plan.
As of December 31, 2008, there were approximately 3.7 million units outstanding under the P2 Deferral Plan, of which
approximately 2.3 million were fully vested.
17. Regulatory Requirements
Restrictions on the transfer of funds exist under regulatory requirements applicable to certain of the Company’s subsidiaries.
At December 31, 2008, the aggregate amount of unrestricted net assets was approximately $1.3 billion.
The National Association of Insurance Commissioners (‘‘NAIC’’) defines Risk-Based Capital (‘‘RBC’’) requirements for
insurance companies. The RBC requirements are used by the NAIC and state insurance regulators to identify companies that
merit regulatory actions designed to protect policyholders. These requirements apply to both the Company’s life and property
casualty insurance companies. In addition, IDS Property Casualty is subject to the statutory surplus requirements of the State
of Wisconsin. The Company’s life and property casualty companies each met their respective minimum RBC requirements.
State insurance statutes also contain limitations as to the amount of dividends and distributions that insurers may make
without providing prior notification to state regulators. For RiverSource Life, dividends in excess of statutory unassigned funds
require advance notice to the Minnesota Department of Commerce, RiverSource Life’s primary regulator, and are subject to
potential disapproval. In addition, dividends whose fair market value, together with that of other dividends or distributions
made within the preceding 12 months, exceeds the greater of (1) the previous year’s statutory net gain from operations or
(2) 10% of the previous year-end statutory capital and surplus are referred to as ‘‘extraordinary dividends.’’ Extraordinary
dividends also require advance notice to the Minnesota Department of Commerce, and are subject to potential disapproval.
Ameriprise Certificate Company (‘‘ACC’’) is registered as an investment company under the Investment Company Act of 1940
(the ‘‘1940 Act’’). ACC markets and sells investment certificates to clients. ACC is subject to various capital requirements
under the 1940 Act, laws of the State of Minnesota and understandings with the Securities and Exchange Commission
(‘‘SEC’’) and the Minnesota Department of Commerce. The terms of the investment certificates issued by ACC and the
provisions of the 1940 Act also require the maintenance by ACC of qualified assets. Under the provisions of its certificates and
the 1940 Act, ACC was required to have qualified assets (as that term is defined in Section 28(b) of the 1940 Act) in the
amount of $4.9 billion and $3.7 billion at December 31, 2008 and 2007, respectively. ACC had qualified assets of
$5.1 billion and $4.0 billion at December 31, 2008 and 2007, respectively. ACC’s capital ratio, as of December 31, 2008,
had dropped to 4.61% and 4.97% per the Minnesota Department of Commerce and SEC capital requirements, respectively.
Ameriprise Financial promptly provided additional capital to ACC in January 2009 to bring capital back above the 5%
requirement per the Minnesota Department of Commerce and SEC capital requirements. Ameriprise Financial and ACC
entered into a Capital Support Agreement on March 2, 2009, pursuant to which Ameriprise Financial agrees to commit such
capital to ACC as is necessary to satisfy applicable minimum capital requirements, up to a maximum commitment of
$115 million.
Threadneedle’s required capital is based on the requirements specified by the United Kingdom’s regulator, the Financial
Services Authority, under its Capital Adequacy Requirements for asset managers.
The Company has eight broker-dealer subsidiaries, American Enterprise Investment Services, Inc. (‘‘AEIS’’), Ameriprise
Financial Services, Inc. (‘‘AFSI’’), Securities America, Inc. (‘‘SAI’’), RiverSource Distributors, Inc. (‘‘RSD’’), RiverSource Fund
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