STI 2018 Annual Report

Notes to Consolidated Financial Statements, continued 133 The following table presents stock option information at December 31, 2018: Options Outstanding Options Exercisable (Dollars in millions, except per share data) Number Outstanding at December 31, 2018 Weighted Average Exercise Price Weighted Average Remaining Contractual Life (Years) Total Aggregate Intrinsic Value Number Exercisable at December 31, 2018 Weighted Average Exercise Price Weighted Average Remaining Contractual Life (Years) Total Aggregate Intrinsic Value Range of Exercise Prices: $21.67 to 32.27 884,601 $25.36 3 $22 884,601 $25.36 3 $22 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 2018 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, 2018. Additional option and stock-based compensation information at December 31 is presented in the following table: (Dollars in millions) 2018 2017 2016 Intrinsic value of options exercised 1 $17 $28 $43 Fair value of vested restricted shares 1 1 — 41 Fair value of vested RSUs 1 77 62 74 1 Measured as of the grant date. At December 31, 2018 and 2017, there was $131 million and $75 million, respectively, of unrecognized stock-based compensation expense related to RSUs. The unrecognized stock compensation expense for December 31, 2018 is expected to be recognized over a weighted average period of 2.0 years. Unrecognized stock-based compensation expense related to restricted stock was immaterial at both December 31, 2018 and 2017. Additionally, the Company allows for the granting of phantom stock units, whereby certain employees are granted the contractual right to receive an amount in cash equal to the fair market value of a share of common stock on the vesting date. These shares vest pro-rata annually over three years on the anniversary of the grant date and are subject to variable accounting. The employees are entitled to dividend-equivalent rights on the granted shares. The Company granted less than 1 million phantom stock units during each of the years ended December 31, 2018 and 2017, and 2 million during the year ended December 31, 2016. The unrecognized compensation expense related to these phantom stock units at December 31, 2018 and 2017 was $10 million and $56 million, respectively, based on the Company's stock price at those respective dates. Stock-based compensation expense recognized in Employee compensation in the Consolidated Statements of Income consisted of the following: Years Ended December 31 (Dollars in millions) 2018 2017 2016 RSUs $104 $83 $56 Phantom stock units 1 35 77 67 Restricted stock 1 — 2 Total stock-based compensation expense $140 $160 $125 Stock-based compensation tax benefit 2 $34 $61 $48 1 Phantom stock units are settled in cash. The Company paid $76 million, $80 million, and $28 million during the years ended December 31, 2018, 2017, and 2016, respectively, related to these share-based liabilities. 2 Does not include excess tax benefits or deficiencies recognized in the Provision for income taxes in the Consolidated Statements of Income. Retirement Plans Noncontributory Pension Plans The Company maintains a frozen and funded noncontributory qualified retirement plan ("Retirement Plan") covering employees meeting certain service requirements. The Retirement Plan provides benefits based on salary and years of service. The SunTrust Retirement Plan includes a cash balance formula where the personal pension accounts continue to be credited with interest each year. The Company monitors the funded status of the Retirement Plan closely and, due to the current funded status, the Company did not make a contribution to it for the 2018 plan year. In the second quarter of 2017, the Company amended its NCFRetirement Plan in accordancewith its decision to terminate the pension plan effective as of July 31, 2017. The Company reclassified $60 million of pre-tax deferred losses from AOCI into net income upon settlement of the NCF Retirement Plan, which was completed in the fourth quarter of 2018. The Company also maintains various frozen, unfunded, noncontributory nonqualified supplemental defined benefit pension plans that cover key executives of the Company (the "SERP", the "ERISAExcess Plan", and the "Restoration Plan"). These plans provide defined benefits based on years of service and salary.