PNC Bank 2013 Annual Report Download - page 250

SAR) granted under the plan after that effective date will
reduce the aggregate plan limit by 2.5 shares, while each
award of a share pursuant to a stock option or SAR will reduce
the aggregate plan limit by one share.
Note 3 – Under the 2006 Incentive Award Plan, awards or
portions of awards that, by their terms, are payable only in
cash do not reduce the number of shares that remain available
for issuance under the plan (the number in column (c)).
During 2013, a total of 505,343 cash-payable share units plus
cash-payable dividend equivalents with respect to 391,520 of
those share units were granted under the plan. This number
includes an incremental change in the cash-payable portion of
the 2011 and 2012 incentive performance unit award grants
described in Note 4 below (net of forfeitures), a separate 2013
incentive performance unit award grant payable solely in cash,
2013 grants of share units (all of which include rights to cash
dividend equivalents) payable solely in cash and fractional
units payable solely in cash. Payments are subject to the
conditions of the individual grants, including, where
applicable, the achievement of any performance goals or
service requirement established for such grants. The
comparable amount for 2012 was 543,959 cash-payable share
units plus cash-payable dividend equivalents with respect to
418,665 cash-payable restricted share units, and the
comparable amount for 2011 was 560,544 cash-payable share
units plus cash-payable dividend equivalents with respect to
505,866 cash-payable restricted share units.
Note 4 – These incentive performance unit awards provide for
the issuance of shares of common stock (up to a target number
of shares) based on the degree to which corporate performance
goals established by the Personnel and Compensation
Committee have been achieved, subject to potential negative
adjustment based on certain risk-related performance metrics,
and, if a premium level of such performance is achieved, for
further payment in cash. The numbers in column (a) of this
table for these awards reflect the maximum number of shares
that could be issued pursuant to grants outstanding at
December 31, 2013 upon achievement of the performance
goals and other conditions of the grants. At the premium level
of performance, a further maximum payout of cash
equivalents for the same number of share units, plus the
incremental change described in Note 3, could also be payable
subject to the other conditions of the grants. Grants under the
2006 Incentive Award Plan were made in the first quarter of
2011, 2012 and 2013.
Note 5 – These stock-payable restricted stock units include
2011, 2012 and 2013 grants of performance-based restricted
share units (with the units payable solely in stock and related
dividend equivalents payable solely in cash) that have a
service condition, an external and an internal risk-related
performance condition and a market condition and also
include grants of other stock-payable restricted share units,
some of which are time-based, others which are performance-
based and some of which also include related dividend
equivalents payable solely in cash. The number in column
(a) includes the maximum number of shares that could be
issued pursuant to grants of this type of award outstanding at
December 31, 2013 upon achievement of the performance and
market conditions, where applicable, and other conditions of
the grants. Cash-payable dividend equivalents were granted
with respect to most of these stock-payable restricted stock
units. Where stock-payable restricted share units include a
fractional share interest, such fractional share interest is
payable only in cash share equivalents. During 2013, a total of
33 cash share equivalents were paid in the aggregate for
fractional share interests, including any for award grants
described in Note 4.
Note 6 – The 1996 Executive Incentive Award Plan is a
shareholder-approved plan that enables PNC to pay annual
bonuses to its senior executive officers based upon the
achievement of specified levels of performance. The plan as
amended and restated as of January 1, 2007 was adopted by
the Board on February 14, 2007 and approved by the PNC
shareholders at the 2007 annual meeting on April 24, 2007.
The plan does not specify a fixed share amount for awards
under the plan. Rather, it provides for maximum bonus awards
for a given period (generally a year) for each individual plan
participant of 0.2% of incentive income for that period.
Incentive income is based on PNC’s consolidated pre-tax net
income as further adjusted for the impact of changes in tax
law, extraordinary items, discontinued operations, acquisition
and merger integration costs, and for the impact of PNC’s
obligation to fund a portion of certain BlackRock long-term
incentive programs. Although the size of awards under the
plan is dollar-denominated, payment may be made in cash, in
shares of PNC common stock, or in a combination of cash and
stock.
During 2013, PNC paid a portion of annual bonuses under the
plan for the 2012 performance year in the form of 53,270
shares of restricted stock. These shares were issued under the
1996 Executive Incentive Award Plan. PNC has, however,
reduced the number of shares available for issuance under the
2006 Incentive Award Plan (as reflected in the number under
column (c) for that plan) by this number.
Note 7 – The purchase price for shares of PNC common stock
sold under the plan represents 95% of the fair market value on
the last day of each six-month offering period.
Note 8 – The plans in this section of the table reflect awards
under pre-acquisition plans of National City Corporation and
Sterling Financial Corporation, respectively. National City
was merged into PNC on December 31, 2008 and Sterling was
merged into PNC on April 4, 2008. Pursuant to the respective
merger agreements for these acquisitions, common shares of
National City or Sterling, as the case may be, issuable upon
the exercise or settlement of various equity awards granted
under the National City or Sterling plans were converted into
corresponding awards covering PNC common stock.
232 The PNC Financial Services Group, Inc. – Form 10-K