BB&T 2013 Annual Report Download - page 118

118
NOTE 10. Shareholders’ Equity
P
re
f
erred Stock
The following table presents a summary of the non-cumulative perpetual preferred stock as of December 31, 2013:
Earliest
Issuance Redemption Liquidation Carrying Dividend
Issue Date Date Amount Amount Rate
(Dollars in millions)
Series D 5/1/12 5/1/17 $ 575 $ 559 5.850 %
Series E 7/31/12 8/1/17 1,150 1,120 5.625
Series F 10/31/12 11/1/17 450 437 5.200
Series G 5/1/13 6/1/18 500 487 5.200
$ 2,675 $ 2,603
Dividends on the preferred stock, if declared, accrue and are payable quarterly, in arrears. For each issuance, BB&T issued
depositary shares, each of which represents a fractional ownership interest in a share of the Company’s preferred stock. The
preferred stock has no stated maturity and redemption is solely at the option of the Company in whole, but not in part, upon
the occurrence of a regulatory capital treatment event, as defined. In addition, the preferred stock may be redeemed in whole
or in part, on any dividend payment date after five years from the date of issuance. Under current rules, any redemption of the
preferred stock is subject to prior approval of the FRB. The preferred stock is not subject to any sinking fund or other
obligations of the Company.
Equity-Based Compensation Plans
At December 31, 2013, options, restricted shares and RSUs were outstanding from equity-based compensation plans that
have been approved by shareholders. The majority of outstanding awards and awards available to be issued relate to plans
that allow for accelerated vesting of awards for holders who retire and have met all retirement eligibility requirements or in
connection with certain other events. Certain of these awards are subject to forfeiture under certain specified circumstances
until vested that may result in cancellation prior to vesting. Those plans are intended to assist the Company in recruiting and
retaining employees, directors and independent contractors and to associate the interests of eligible participants with those of
BB&T and its shareholders. The following table provides a summary of the equity-based compensation plans:
Equity-Based Compensation Plans December 31, 2013
Shares available for future grants (in thousands) 30,562
Vesting period, awards granted prior to 2010 5.0 yrs
Vesting period, awards granted after 2009 3.0 to 5.0
Option term 10.0
The fair value of each option award is measured on the date of grant using the Black-Scholes option-pricing model.
Substantially all of the awards are granted in February of each year. The assumptions used in the valuation of equity-based
awards are as follows:
Assumption Definition
Fair value of restricted shares Based on the common stock price on the grant date
Fair value of RSUs Based on the common stock price on the grant date less the present value of expected
dividends that are foregone during the vesting period
Expected life Based on historical behavior of employees related to exercises, forfeitures and
cancellations, adjusted for current information that indicates the future is reasonably
expected to differ from the past
Risk-free interest rate Based on U.S. Treasury yield curve in effect at the time of the grant
Dividend yield Based on the historical dividend yield of BB&T's stock, adjusted to reflect the
expected dividend yield over the expected life of the option
Volatility factor Based on the historical volatility of the stock price, adjusted for current information
that indicates the future is reasonably expected to differ from the past