TCF Bank 2005 Annual Report Download - page 80

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60 TCF Financial Corporation and Subsidiaries
Note 17. Employee Benefit Plans
Employee Stock Purchase Plan The TCF Employees Stock
Purchase Plan generally allows participants to make contributions
by salary deduction of up to 50% of their salary on a tax-deferred
basis. TCF matches the contributions of all participants with TCF
common stock at the rate of 50 cents per dollar, with a maximum
company contribution of 3% of the employee’s salary. Effective
April 1, 2006, TCF has amended the TCF Employees Stock Purchase
Plan to increase the employer match to 75 cents per dollar for
employees with five to ten years of service, up to a maximum
company contribution of 4.5% of the employee’s salary, and to
$1 per dollar for employees with over ten years of service, up to a
maximum company contribution of 6% of the employee’s salary.
Employee contributions vest immediately while the Company’s
matching contributions are subject to a graduated vesting
schedule based on an employee’s years of vesting service over
five years. Employees have the opportunity to diversify and invest
their vested account balance in various mutual funds or TCF
common stock. At December 31, 2005, the fair value of the assets
in the plan totaled $230.7 million and included $218.8 million
invested in TCF common stock. The Company’s matching contri-
butions are expensed when made. TCF’s contributions to the plan
were $4.3 million, $4 million and $3.9 million in 2005, 2004 and
2003, respectively.
Pension Plan The TCF Cash Balance Pension Plan (the “Pension
Plan”) is a qualified defined benefit plan covering eligible employ-
ees who are at least 21 years old and have completed a year of
eligibility service with TCF. Employees hired after June 30, 2004
are not eligible to participate in the Pension Plan. TCF makes a
monthly allocation to the participant’s account based on a
percentage of the participant’s compensation. The percentage is
based on the sum of the participant’s age and years of employment
with TCF and includes interest on the account balance based on
the five-year Treasury rate plus 25 basis points for 2005 and 2004
and based on the ten-year Treasury rate for 2003. Participants are
fully vested after five years of qualifying service. In February 2006,
TCF amended the Pension Plan to discontinue compensation credits
for all participants effective March 31, 2006. Interest credits will
continue to be paid until participants withdraw their money
from the Pension Plan. All unvested participant accounts will
be vested on March 31, 2006. No significant gain or loss will be
recognized as a result of these changes. The projected benefit
obligation is expected to be reduced by $2.8 million from the
amounts presented below as a result of this plan change.
The following table reflects TCF’s stock option and restricted stock transactions under the Program since December 31, 2002:
Restricted Stock Stock Options
Exercise Price
Weighted-
Shares Price Range Shares Range Average
Outstanding at December 31, 2002 3,270,632 $ 9.87-$26.39 607,754 $ 3.44-$16.64 $12.72
Granted 255,900 18.73- 25.32 – – –
Exercised – – (125,558) 10.91- 16.09 12.11
Forfeited (214,480) 9.87- 26.39 (500) 10.91 10.91
Vested (250,898) 11.05- 20.38 – – –
Outstanding at December 31, 2003 3,061,154 9.87- 20.38 481,696 3.44- 16.64 12.88
Granted 149,120 24.33- 30.28 – – –
Exercised – – (155,832) 3.44- 16.64 12.81
Forfeited (62,980) 11.05- 30.13 – – –
Vested (115,068) 11.05- 24.10 – – –
Outstanding at December 31, 2004 3,032,226 9.87- 30.28 325,864 5.71- 16.64 12.91
Granted 526,400 25.97- 28.71 – – –
Exercised – – (66,064) 5.71- 16.64 9.60
Forfeited (111,185) 11.05- 30.28 – – –
Vested (1,138,165) 9.87- 21.85 – – –
Outstanding at December 31, 2005 2,309,276 9.87- 30.28 259,800 11.78- 16.64 13.76
Exercisable at December 31, 2005 N.A. N.A. 259,800 11.78- 16.64 13.76
N.A. Not Applicable.
Stock options outstanding and exercisable at December 31, 2005 had exercise prices ranging from $11.78 to $16.64, a weighted-average
exercise price of $13.76 and a weighted-average contractual life of three years.