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Exhibit
10.26
2008 FORMS OF EMPLOYEE STOCK
OPTION
AND RESTRICTED STOCK/SHARE
UNIT
AGREEMENTS
FORM OF STANDARD EMPLOYEE
STOCK OPTION AGREEMENT
THE PNC FINANCIAL SERVICES
GROUP, INC.
2006 INCENTIVE AWARD
PLAN
NONSTATUTORY STOCK OPTION
AGREEMENT
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| OPTIONEE: |
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«First_Name_MI» «Last_Name» |
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| GRANT
DATE: |
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___________, 200_ |
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| OPTION
PRICE: |
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$_________ per share |
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| COVERED
SHARES: |
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«Shares» |
1. Definitions; Grant of Option .
Certain terms used in this Nonstatutory Stock Option Agreement (the
“Agreement”) are defined in Annex A (which is
incorporated herein as part of the Agreement) or elsewhere in the
Agreement, and such definitions will apply except where the context
otherwise indicates.
Pursuant to The PNC Financial Services
Group, Inc. 2006 Incentive Award Plan (the “Plan”) and
subject to the terms of the Agreement, PNC hereby grants to
Optionee an Option to purchase from PNC that number of shares of
PNC common stock specified above as the “Covered
Shares,” exercisable at the Option Price.
In the Agreement, “PNC”
means The PNC Financial Services Group, Inc. and
“Corporation” means PNC and its Consolidated
Subsidiaries. Headings used in the Agreement are for convenience
only and are not part of the Agreement.
2. Terms of the Option
.
2.1 Type of Option . The Option
is intended to be a Nonstatutory Stock Option.
2.2 Option Period . Except as
otherwise set forth in Section 2.3, the Option is exercisable
in whole or in part as to any Covered Shares as to which it is
outstanding and has become exercisable (“vested”) at
any time and from time to time through the Expiration Date as
defined in Section A.18 of Annex A hereto, including the early
termination provisions set forth in said definition.
To the extent that the Option or
relevant portion thereof is outstanding, the Option will vest as to
Covered Shares as set forth in this Section 2.2.
(a) Unless the Option has become fully
vested pursuant to Section 2.2(b), 2.2(c), 2.2(d), 2.2(e) or
2.2(f), the Option will become exercisable
(“vest”):
(i) as to one-third
(1/3 rd ) of the Covered Shares (rounded down to the nearest whole
Share), commencing on the first (1 st ) anniversary date of the Grant
Date provided that Optionee is still an employee of the
Corporation on such vesting date or is a Retiree whose Retirement
date occurred on or after the six (6) month anniversary date
of the Grant Date;
(ii) as to one-half
(1/2) of the remaining Covered Shares (rounded down to the
nearest whole Share), commencing on the second (2
nd
) anniversary date of
the Grant Date provided that Optionee is still an employee
of the Corporation on such vesting date or is a Retiree whose
Retirement date occurred on or after the first (1
st
) anniversary date of
the Grant Date; and
(iii) as to the remaining
Covered Shares, commencing on the third (3 rd ) anniversary date of the Grant
Date provided that Optionee is still an employee of the
Corporation on such vesting date or is a Retiree whose Retirement
date occurred on or after the first (1 st ) anniversary date of the Grant
Date.
(b) If Optionee’s employment is
terminated by the Corporation by reason of Total and Permanent
Disability and not for Cause, the Option will vest as to all
outstanding Covered Shares as to which it has not otherwise vested
commencing on Optionee’s Termination Date.
(c) If Optionee’s employment with
the Corporation is terminated by reason of Optionee’s death,
the Option will immediately vest as to all outstanding Covered
Shares as to which it has not otherwise vested, and the Option may
be exercised by Optionee’s properly designated beneficiary,
by the person or persons entitled to do so under Optionee’s
will, or by the person or persons entitled to do so under the
applicable laws of descent and distribution.
(d) If, after the occurrence of a CIC
Triggering Event but prior to the occurrence of a CIC Failure or of
the Change in Control triggered by the CIC Triggering Event,
Optionee’s employment with the Corporation is terminated by
the Corporation without Cause or by Optionee with Good Reason, the
Option will vest as to all outstanding Covered Shares as to which
it has not otherwise vested commencing on Optionee’s
Termination Date.
(e) Notwithstanding any other provision
of this Section 2.2, to the extent that the Option is
outstanding but not yet fully vested at the time a Change in
Control occurs, the Option will vest as to all then outstanding
Covered Shares as to which it has not otherwise vested, effective
as of the day immediately prior to the occurrence of the Change in
Control, provided that , at the time the Change in Control
occurs, Optionee is either (i) an employee of the Corporation
or (ii) a former employee of the Corporation whose unvested
Option, or portion thereof, is then outstanding and continues to
qualify for vesting pursuant to the terms of
Section 2.2(a)(i), (ii) and/or (iii).
(f) The Committee or its delegate may in
their sole discretion, but need not, accelerate the vesting date of
all or any portion of the Option subject, if applicable, to such
limitations as may be set forth in the Plan.
If Optionee is employed by a
Consolidated Subsidiary that ceases to be a subsidiary of PNC or
ceases to be a consolidated subsidiary of PNC under generally
accepted accounting principles and Optionee does not continue to be
employed by PNC or a Consolidated Subsidiary, then for purposes of
the Agreement, Optionee’s employment with the Corporation
terminates effective at the time this occurs.
2.3 Formal Allegations of Detrimental
Conduct . If any criminal charges are brought against Optionee
alleging the commission of a felony that relates to or arises out
of Optionee’s employment or other service relationship with
the Corporation in an indictment or in other analogous formal
charges commencing judicial criminal proceedings, the Committee may
determine to suspend the exercisability of the Option, to the
extent that the Option is then outstanding and exercisable, or to
require the escrow of the proceeds of any exercise of the Option.
Any such suspension or escrow is subject to the following
restrictions:
(a) It may last only until the earliest
to occur of the following:
(i) resolution of the criminal
proceedings in a manner that constitutes Detrimental
Conduct;
(ii) resolution of the criminal
proceeding in one of the following ways: (A) the charges as
they relate to such alleged felony have been dismissed (with or
without prejudice), (B) Optionee has been acquitted of such
alleged felony, or (C) a criminal proceeding relating to such
alleged felony has been completed without resolution (for example,
as a result of a mistrial) and the relevant time period for
recommencing criminal proceedings relating to such alleged felony
has expired without any such recommencement; and
(iii) termination of the suspension or
escrow in the discretion of the Committee; and
(b) It may be imposed only if the
Committee makes reasonable provision for the retention or
realization of the value of the Option to Optionee as if no
suspension or escrow had been imposed upon any termination of the
suspension or escrow under clauses (a)(ii) or
(iii) above.
2.4 Nontransferability; Designation
of Beneficiary; Payment to Legal Representative .
(a) The Option is not transferable or
assignable by Optionee.
(b) During Optionee’s lifetime,
the Option may be exercised only by Optionee or, in the event of
Optionee’s legal incapacity, by his or her legal
representative, as determined in good faith by PNC.
(c) During Optionee’s lifetime,
Optionee may file with PNC, at such address and in such manner as
PNC may from time to time direct, on a form to be provided by PNC
on request, a designation of a beneficiary or beneficiaries (a
“properly designated beneficiary”) to hold and exercise
Optionee’s stock options, to the extent outstanding and
exercisable, in accordance with their respective stock option
agreements and the Plan in the event of Optionee’s
death.
(d) If Optionee dies prior to the full
exercise or expiration of the Option and has not filed a
designation of beneficiary form as specified above, the Option will
be held and may be exercised by the person or persons entitled to
do so under Optionee’s will or under the applicable laws of
descent and distribution, as to which PNC will be entitled to rely
in good faith on instructions from Optionee’s executor,
administrator, or other legal representative.
(e) Any delivery of shares or other
payment made or action taken hereunder by PNC in good faith to or
on the instructions of Optionee’s executor, administrator, or
other legal representative shall extinguish all right to payment
hereunder.
3. Capital Adjustments . Upon the
occurrence of a corporate transaction or transactions (including,
without limitation, stock dividends, stock splits, spin-offs,
split-offs, recapitalizations, mergers, consolidations or
reorganizations of or by PNC (each, a “Corporate
Transaction”)), the Committee shall make those adjustments,
if any, in the number, class or kind of Covered Shares as to which
the Option is outstanding and has not yet been exercised and in the
Option Price that it deems appropriate in its discretion to reflect
the Corporate Transaction(s) such that the rights of Optionee are
neither enlarged nor diminished as a result of such Corporate
Transaction or Transactions, including without limitation
cancellation of the Option immediately prior to the effective time
of the Corporate Transaction and payment, in cash, in consideration
therefor, of an amount equal to the product of (a) the excess,
if any, of the per share value of the consideration payable to a
PNC common shareholder in connection with such Corporate
Transaction over the Option Price and (b) the total number of
Covered Shares subject to the Option that were outstanding and
unexercised immediately prior to the effective time of the
Corporate Transaction.
All determinations hereunder shall be
made by the Committee in its sole discretion and shall be final,
binding and conclusive for all purposes on all parties, including
without limitation the holder of the Option.
No fractional shares will be issued on
exercise of the Option. PNC shall determine the manner in which any
fractional shares will be treated.
4. Exercise of Option
.
4.1 Notice and Effective Date .
The Option may be exercised, in whole or in part, by delivering to
PNC written notice of such exercise, in such form as PNC may from
time to time prescribe, and by paying in full the aggregate Option
Price with respect to that portion of the Option being exercised
and satisfying any amounts required to be withheld pursuant to
applicable tax laws in connection with such exercise.
In addition, notwithstanding Sections
4.2 and 4.3, Optionee may elect to complete his or her Option
exercise through a brokerage service/margin account pursuant to the
broker-assisted cashless option exercise procedure under Regulation
T of the Board of Governors of the Federal Reserve System and in
such manner as may be permitted by PNC from time to time consistent
with said Regulation T.
The effective date of such exercise will
be the Exercise Date. Until PNC notifies Optionee to the contrary,
the form attached to the Agreement as Annex B shall be used to
exercise the Option and the form attached to the Agreement as Annex
C shall be used to make tax payment elections.
In the event that the Option is
exercised, pursuant to Section 2.4, by any person or persons
other than Optionee, such notice of exercise must be accompanied by
appropriate proof of the derivative right of such person or persons
to exercise the Option.
4.2 Payment of Option Price .
Upon exercise of the Option, in whole or in part, Optionee may pay
the aggregate Option Price (a) in cash or (b) if and to
the extent then permitted by PNC, using whole shares of PNC common
stock (either by physical delivery to PNC of certificates for the
shares or through PNC’s share attestation procedure) having
an aggregate Fair Market Value on the Exercise Date not exceeding
that portion of the aggregate Option Price being paid using such
shares, or through a combination of cash and shares of PNC common
stock; provided , however , that shares of PNC common
stock used to pay all or any portion of the aggregate Option Price
may not be subject to any contractual restriction, pledge or other
encumbrance and must be shares that have been owned by Optionee for
at least six (6) months prior to the Exercise Date and, in the
case of restricted stock, for which it has been at least six
(6) months since the restrictions lapsed, or, in either case,
for such other period as may be specified or permitted by
PNC.
4.3 Payment of Taxes . Optionee
may elect to satisfy any or all applicable federal, state, or local
tax liabilities incurred in connection with exercise of the Option
(a) by payment of cash, (b) if and to the extent then
permitted by PNC and subject to such terms and conditions as PNC
may from time to time establish, through the retention by PNC of
sufficient whole shares of PNC common stock otherwise issuable upon
such exercise to satisfy the minimum amount of taxes required to be
withheld in connection with such exercise, or (c) if and to
the extent then permitted by PNC and subject to such terms and
conditions as PNC may from time to time establish, using whole
shares of PNC common stock (either by physical delivery to PNC of
certificates for the shares or through PNC’s share
attestation procedure) that are not subject to any contractual
restriction, pledge or other encumbrance and that have been owned
by Optionee for at least six (6) months prior to the Exercise
Date and, in the case of restricted stock, for which it has been at
least six (6) months since the restrictions lapsed, or, in
either case, for such other period as may be specified or permitted
by PNC.
For purposes of this Section 4.3,
shares of PNC common stock that are used to satisfy applicable
taxes will be valued at their Fair Market Value on the date the tax
withholding obligation arises. In no event will the Fair Market
Value of the shares of PNC common stock otherwise issuable upon
exercise of the Option but retained pursuant to Section 4.3(b)
exceed the minimum amount of taxes required to be withheld in
connection with the Option exercise.
4.4 Effect . The exercise, in
whole or in part, of the Option will cause a reduction in the
number of unexercised Covered Shares as to which the Option is
outstanding equal to the number of shares of PNC common stock with
respect to which the Option is exercised.
5. Restrictions on Exercise and on
Shares Issued on Exercise . Notwithstanding any other provision
of the Agreement, the Option may not be exercised at any time that
PNC does not have in effect a registration statement under the
Securities Act of 1933 as amended relating to the offer of shares
of PNC common stock under the Plan unless PNC agrees to permit such
exercise. Upon the issuance of any shares of PNC common stock
pursuant to exercise of the Option at a time when such a
registration statement is not in effect, Optionee will, upon the
request of PNC, agree in writing that Optionee is acquiring such
shares for
investment only and not with a view to
resale and that Optionee will not sell, pledge, or otherwise
dispose of such shares unless and until (a) PNC is furnished
with an opinion of counsel to the effect that registration of such
shares pursuant to the Securities Act of 1933 as amended is not
required by that Act or by rules and regulations promulgated
thereunder, (b) the staff of the SEC has issued a no-action
letter with respect to such disposition, or (c) such
registration or notification as is, in the opinion of counsel for
PNC, required for the lawful disposition of such shares has been
filed and has become effective; provided , however ,
that PNC is not obligated hereby to file any such registration or
notification. PNC may place a legend embodying such restrictions on
the certificate(s) evidencing such shares.
6. Rights as Shareholder .
Optionee will have no rights as a shareholder with respect to any
Covered Shares until the Exercise Date and then only with respect
to those shares of PNC common stock issued upon such exercise of
the Option and not retained as provided in
Section 4.3.
7. Employment . Neither the
granting of the Option evidenced by the Agreement nor any term or
provision of the Agreement will constitute or be evidence of any
understanding, expressed or implied, on the part of PNC or any
subsidiary to employ Optionee for any period.
8. Subject to the Plan . The
Option evidenced by the Agreement and the exercise thereof are
subject to the terms and conditions of the Plan, which is
incorporated by reference herein and made a part hereof, but the
terms of the Plan will not be considered an enlargement of any
benefits under the Agreement. In addition, the Option is subject to
any rules and regulations promulgated by or under the authority of
the Committee.
9. Optionee Covenants
.
9.1 General . Optionee and PNC
acknowledge and agree that Optionee has received adequate
consideration with respect to enforcement of the provisions of
Sections 9 and 10 hereof by virtue of receiving this Option, which
gives Optionee an opportunity potentially to benefit from an
increase in the future value of PNC common stock (regardless of
whether any such benefit is ultimately realized); that such
provisions are reasonable and properly required for the adequate
protection of the business of PNC and its subsidiaries; and that
enforcement of such provisions will not prevent Optionee from
earning a living.
9.2 Non-Solicitation; No-Hire .
Optionee agrees to comply with the provisions of subsections
(a) and (b) of this Section 9.2 while employed by
the Corporation and for a period of twelve (12) months after
Optionee’s Termination Date regardless of the reason for such
termination of employment.
(a) Non-Solicitation . Optionee
shall not, directly or indirectly, either for Optionee’s own
benefit or purpose or for the benefit or purpose of any Person
other than PNC or any of its subsidiaries, solicit, call on, do
business with, or actively interfere with PNC’s or any
subsidiary’s relationship with, or attempt to divert or
entice away, any Person that Optionee should reasonably know
(i) is a customer of PNC or any subsidiary for which PNC or
any subsidiary provides any services as of the Termination Date, or
(ii) was a customer of PNC or any subsidiary for which PNC or
any subsidiary provided any services at any time during the twelve
(12) months preceding the Termination Date, or (iii) was,
as of the Termination Date, considering retention of PNC or any
subsidiary to provide any services.
(b) No-Hire . Optionee shall not,
directly or indirectly, either for Optionee’s own benefit or
purpose or for the benefit or purpose of any Person other than PNC
or any of its subsidiaries, employ or offer to employ, call on, or
actively interfere with PNC’s or any subsidiary’s
relationship with, or attempt to divert or entice away, any
employee of PNC or any of its subsidiaries, nor shall Optionee
assist any other Person in such activities.
Notwithstanding the above, if
Optionee’s employment with the Corporation is terminated by
the Corporation without Cause or by Optionee with Good Reason and
such Termination Date occurs during a Coverage Period (either as
Coverage Period is defined in Section A.13 of Annex A or, if
Optionee was a party to a CIC Severance Agreement that was in
effect at the time of such termination of employment, as Coverage
Period is defined in such CIC Severance Agreement, if longer), then
commencing immediately after such Termination Date, the provisions
of subsections (a) and (b) of this Section 9.2 shall
no longer apply and shall be replaced with the following subsection
(c):
(c) No-Hire . Optionee agrees
that Optionee shall not, for a period of twelve (12) months
after the Termination Date, employ or offer to employ, solicit,
actively interfere with PNC’s or any PNC affiliate’s
relationship with, or attempt to divert or entice away, any officer
of PNC or any PNC affiliate.
9.3 Confidentiality . During
Optionee’s employment with the Corporation, and thereafter
regardless of the reason for termination of such employment,
Optionee will not disclose or use in any way any confidential
business or technical information or trade secret acquired in the
course of such employment, all of which is the exclusive and
valuable property of the Corporation whether or not conceived of or
prepared by Optionee, other than (a) information generally
known in the Corporation’s industry or acquired from public
sources, (b) as required in the course of employment by the
Corporation, (c) as required by any court, supervisory
authority, administrative agency or applicable law, or
(d) with the prior written consent of PNC.
9.4 Ownership of Inventions .
Optionee shall promptly and fully disclose to PNC any and all
inventions, discoveries, improvements, ideas or other works of
inventorship or authorship, whether or not patentable, that have
been or will be conceived and/or reduced to practice by Optionee
during the term of Optionee’s employment with the
Corporation, whether alone or with others, and that are
(a) related directly or indirectly to the business or
activities of PNC or any of its subsidiaries or (b) developed
with the use of any time, material, facilities or other resources
of PNC or any subsidiary (“Developments”). Optionee
agrees to assign and hereby does assign to PNC or its designee all
of Optionee’s right, title and interest, including copyrights
and patent rights, in and to all Developments. Optionee shall
perform all actions and execute all instruments that PNC or any
subsidiary shall deem necessary to protect or record PNC’s or
its designee’s interests in the Developments. The obligations
of this Section 9.4 shall be performed by Optionee without
further compensation and shall continue beyond the Termination
Date.
10. Enforcement Provisions .
Optionee understands and agrees to the following provisions
regarding enforcement of the Agreement.
10.1 Governing Law and
Jurisdiction . The Agreement is governed by and construed under
the laws of the Commonwealth of Pennsylvania, without reference to
its conflict of laws provisions. Any dispute or claim arising out
of or relating to the Agreement or claim of breach hereof shall be
brought exclusively in the federal court for the Western District
of Pennsylvania or in the Court of Common Pleas of Allegheny
County, Pennsylvania. By execution of the Agreement, Optionee and
PNC hereby consent to the exclusive jurisdiction of such courts,
and waive any right to challenge jurisdiction or venue in such
courts with regard to any suit, action, or proceeding under or in
connection with the Agreement.
10.2 Equitable Remedies . A
breach of the provisions of any of Sections 9.2, 9.3 or 9.4 will
cause the Corporation irreparable harm, and the Corporation will
therefore be entitled to issuance of immediate, as well as
permanent, injunctive relief restraining Optionee, and each and
every person and entity acting in concert or participating with
Optionee, from initiation and/or continuation of such
breach.
10.3 Tolling Period . If it
becomes necessary or desirable for the Corporation to seek
compliance with the provisions of Section 9.2 by legal
proceedings, the period during which Optionee shall comply with
said provisions will extend for a period of twelve (12) months
from the date the Corporation institutes legal proceedings for
injunctive or other relief.
10.4 No Waiver . Failure of PNC
to demand strict compliance with any of the terms, covenants or
conditions of the Agreement shall not be deemed a waiver of such
term, covenant or condition, nor shall any waiver or relinquishment
of any such term, covenant or condition on any occasion or on
multiple occasions be deemed a waiver or relinquishment of such
term, covenant or condition.
10.5 Severability . The
restrictions and obligations imposed by Sections 9.2, 9.3 and 9.4
are separate and severable, and it is the intent of Optionee and
PNC that if any restriction or obligation imposed by any of these
provisions is deemed by a court of competent jurisdiction to be
void for any reason whatsoever, the remaining provisions,
restrictions and obligations shall remain valid and binding upon
Optionee.
10.6 Reform . In the event any of
Sections 9.2, 9.3 and 9.4 are determined by a court of competent
jurisdiction to be unenforceable because unreasonable either as to
length of time or area to which said restriction applies, it is the
intent of Optionee and PNC that said court reduce and reform the
provisions thereof so as to apply the greatest limitations
considered enforceable by the court.
10.7 Waiver of Jury Trial . Each
of Optionee and PNC hereby waives any right to trial by jury with
regard to any suit, action or proceeding under or in connection
with any of Sections 9.2, 9.3 and 9.4.
10.8 Applicable Law .
Notwithstanding anything in the Agreement, PNC will not be required
to comply with any term, covenant or condition of the Agreement if
and to the extent prohibited by law, including but not limited to
federal banking and securities regulations, or as otherwise
directed by one or more regulatory agencies having jurisdiction
over PNC or any of its subsidiaries. Further, to the extent, if
any, applicable to Optionee, Optionee agrees to reimburse PNC for
any amounts Optionee may be required to reimburse the Corporation
pursuant to Section 304 of the Sarbanes-Oxley Act of 2002, and
agrees that PNC need not comply with any term, covenant or
condition of the Agreement to the extent that doing so would
require that Optionee reimburse PNC or its subsidiaries for such
amounts pursuant to Section 304 of the Sarbanes-Oxley Act of
2002.
10.9. Compliance with Internal
Revenue Code Section 409A . It is the intention of the
parties that the Option and the Agreement comply with the
provisions of Section 409A to the extent, if any, that such
provisions are applicable to the Agreement, and the Agreement will
be administered by PNC in a manner consistent with this
intent.
If any payments or benefits hereunder
may be deemed to constitute nonconforming deferred compensation
subject to taxation under the provisions of Section 409A,
Optionee agrees that PNC may, without the consent of Optionee,
modify the Agreement and the Option to the extent and in the manner
PNC deems necessary or advisable or take such other action or
actions, including an amendment or action with retroactive effect,
that PNC deems appropriate in order either to preclude any such
payments or benefits from being deemed “deferred
compensation” within the meaning of Section 409A or to
provide such payments or benefits in a manner that complies with
the provisions of Section 409A such that they will not be
taxable thereunder.
11. Effective Date . If Optionee
does not accept the grant of the Option by executing and delivering
a copy of the Agreement to PNC, without altering or changing the
terms of the Agreement in any way, within thirty (30) days of
receipt by Optionee of a copy of the Agreement, PNC may, in its
sole discretion, withdraw its offer and cancel the Option and the
Agreement at any time prior to Optionee’s delivery to PNC of
a copy of the Agreement executed by Optionee.
Otherwise, upon execution and delivery
of the Agreement by both PNC and Optionee and, in the event that
Optionee is subject to the reporting requirements of
Section 16(a) of the Exchange Act with respect to PNC
securities, the filing with and acceptance by the SEC of a Form 4
reporting the Grant, the Option and the Agreement are effective as
of the Grant Date.
I N W
ITNESS W HEREOF , PNC has caused the
Agreement to be signed on its behalf effective as of the Grant
Date.
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| THE PNC FINANCIAL SERVICES GROUP, INC. |
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| By: |
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Chairman
and Chief Executive Officer |
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| ATTEST: |
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| By: |
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Corporate
Secretary |
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| Accepted and agreed to as of the Grant Date |
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| Optionee |
Annex A - Certain Definitions
Annex B - Notice of Exercise
Annex C - Tax Payment Election
Form
ANNEX A
CERTAIN
DEFINITIONS
* * *
A.1 “Agreement” means the
Nonstatutory Stock Option Agreement between PNC and Optionee
evidencing the grant of the Option to Optionee pursuant to the
Plan.
A.2 “Board” means the Board
of Directors of PNC.
A.3 “Cause.”
(a) “Cause” during a
Coverage Period . If the termination of Optionee’s
employment with the Corporation occurs during a Coverage Period,
then, for purposes of the Agreement, “Cause”
means:
(i) the willful and continued failure of
Optionee to substantially perform Optionee’s duties with the
Corporation (other than any such failure resulting from incapacity
due to physical or mental illness), after a written demand for
substantial performance is delivered to Optionee by the Board or
the CEO that specifically identifies the manner in which the Board
or the CEO believes that Optionee has not substantially performed
Optionee’s duties; or
(ii) the willful engaging by Optionee in
illegal conduct or gross misconduct that is materially and
demonstrably injurious to PNC or any of its
subsidiaries.
For purposes of the preceding clauses
(i) and (ii), no act or failure to act, on the part of
Optionee, shall be considered willful unless it is done, or omitted
to be done, by Optionee in bad faith and without reasonable belief
that Optionee’s action or omission was in the best interests
of the Corporation. Any act, or failure to act, based upon the
instructions or prior approval of the Board, the CEO or
Optionee’s superior or based upon the advice of counsel for
the Corporation, shall be conclusively presumed to be done, or
omitted to be done, by Optionee in good faith and in the best
interests of the Corporation.
The cessation of employment of Optionee
will be deemed to be a termination of Optionee’s employment
with the Corporation for Cause for purposes of the Agreement only
if and when there shall have been delivered to Optionee, as part of
the notice of Optionee’s termination, a copy of a resolution
duly adopted by the affirmative vote of not less than a majority of
the entire membership of the Board, at a Board meeting called and
held for the purpose of considering such termination, finding on
the basis of clear and convincing evidence that, in the good faith
opinion of the Board, Optionee is guilty of conduct described in
clause (i) or (ii) above and, in either case, specifying
the particulars thereof in detail. Such resolution shall be adopted
only after (1) reasonable notice of such Board meeting is
provided to Optionee, together with written notice that PNC
believes that Optionee is guilty of conduct described in clause
(i) or (ii) above and, in either case, specifying the
particulars thereof in detail, and (2) Optionee is given an
opportunity, together with counsel, to be heard before the
Board.
(b) “Cause” other than
during a Coverage Period . If the termination of
Optionee’s employment with the Corporation occurs other than
during a Coverage Period, then, for purposes of the Agreement,
“Cause” means:
(i) the willful and continued failure of
Optionee to substantially perform Optionee’s duties with the
Corporation (other than any such failure resulting from incapacity
due to physical or mental illness), after a written demand for
substantial performance is delivered to Optionee by PNC that
specifically identifies the manner in which it is believed that
Optionee has not substantially performed Optionee’s
duties;
(ii) a material breach by Optionee of
(1) any code of conduct of PNC or one of its subsidiaries or
(2) other written policy of PNC or a subsidiary, in either
case required by law or established to maintain compliance with
applicable law;
(iii) any act of fraud,
misappropriation, material dishonesty, or embezzlement by Optionee
against PNC or one of its subsidiaries or any client or customer of
PNC or a subsidiary;
(iv) any conviction (including a plea of
guilty or of nolo contendere ) of Optionee for, or entry by
Optionee into a pre-trial disposition with respect to, the
commission of a felony; or
(v) entry of any order against Optionee,
by any governmental body having regulatory authority with respect
to the business of PNC or any of its subsidiaries, that relates to
or arises out of Optionee’s employment or other service
relationship with the Corporation.
The cessation of employment of Optionee
will be deemed to have been a termination of Optionee’s
employment with the Corporation for Cause for purposes of the
Agreement only if and when the CEO or his or her designee (or, if
Optionee is the CEO, the Board) determines that Optionee is guilty
of conduct described in clause (i), (ii) or (iii) above
or that an event described in clause (iv) or (v) above
has occurred with respect to Optionee and, if so, determines that
the termination of Optionee’s employment with the Corporation
will be deemed to have been for Cause.
A.4 “CEO” means the chief
executive officer of PNC.
A.5 “Change in Control”
means a change of control of PNC of a nature that would be required
to be reported in response to Item 6(e) of Schedule 14A of
Regulation 14A (or in response to any similar item on any similar
schedule or form) promulgated under the Exchange Act, whether or
not PNC is then subject to such reporting requirement;
provided , however , that without limitation, a
Change in Control shall be deemed to have occurred if:
(a) any Person, excluding employee
benefit plans of the Corporation, is or becomes the beneficial
owner (as defined in Rules 13d-3 and 13d-5 under the Exchange Act
or any successor provisions thereto), directly or indirectly, of
securities of PNC representing twenty percent (20%) or more of
the combined voting power of PNC’s then outstanding
securities; provided , however , that such an
acquisition of beneficial ownership representing between twenty
percent (20%) and forty percent (40%), inclusive, of such
voting power shall not be considered a Change in Control if the
Board approves such acquisition either prior to or immediately
after its occurrence;
(b) PNC consummates a merger,
consolidation, share exchange, division or other reorganization or
transaction of PNC (a “Fundamental Transaction”)
with any other corporation, other than a Fundamental Transaction
that results in the voting securities of PNC outstanding
immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into voting securities
of the surviving entity) at least sixty percent (60%) of the
combined voting power immediately after such Fundamental
Transaction of (i) PNC’s outstanding securities,
(ii) the surviving entity’s outstanding securities, or
(iii) in the case of a division, the outstanding securities of
each entity resulting from the division;
(c) the shareholders of PNC approve a
plan of complete liquidation or winding-up of PNC or an agreement
for the sale or disposition (in one transaction or a series of
transactions) of all or substantially all of PNC’s
assets;
(d) as a result of a proxy contest,
individuals who prior to the conclusion thereof constituted the
Board (including for this purpose any new director whose election
or nomination for election by PNC’s shareholders in
connection with such proxy contest was approved by a vote of at
least two-thirds (2/3rds) of the directors then still in
office who were directors prior to such proxy contest) cease to
constitute at least a majority of the Board (excluding any Board
seat that is vacant or otherwise unoccupied);
(e) during any period of twenty-four
(24) consecutive months, individuals who at the beginning of
such period constituted the Board (including for this purpose any
new director whose election or nomination for election by
PNC’s shareholders was approved by a vote of at least
two-thirds (2/3rds) of the directors then still in office who
were directors at the beginning of such period) cease for any
reason to constitute at least a majority of the Board (excluding
any Board seat that is vacant or otherwise unoccupied);
or
(f) the Board determines that a Change
in Control has occurred.
Notwithstanding anything to the contrary
herein, a divestiture or spin-off of a subsidiary or division of
PNC or any of its subsidiaries shall not by itself constitute a
Change in Control.
A.6 “CIC Failure” means the
following:
(a) with respect to a CIC Triggering
Event described in Section A.8(a), PNC’s shareholders vote
against the transaction approved by the Board or the agreement to
consummate the transaction is terminated; or
(b) with respect to a CIC Triggering
Event described in Section A.8(b), the proxy contest fails to
replace or remove a majority of the members of the
Board.
A.7 “CIC Severance
Agreement” means the written agreement, if any, between
Optionee and PNC providing, among other things, for certain change
in control severance benefits.
A.8 “CIC Triggering Event”
means the occurrence of either of the following:
(a) the Board or PNC’s
shareholders approve a transaction described in Subsection (b)
of the definition of Change in Control contained in Section A.5;
or
(b) the commencement of a proxy contest
in which any Person seeks to replace or remove a majority of the
members of the Board.
A.9 “Committee” means the
Personnel and Compensation Committee of the Board or such person or
persons as may be designated or appointed by that committee as its
delegate or designee.
A.10 “Competitive Activity”
means, for purposes of the Agreement, any participation in,
employment by, ownership of any equity interest exceeding one
percent (1%) in, or promotion or organization of, any Person
other than PNC or any of its subsidiaries (1) engaged in
business activities similar to some or all of the business
activities of PNC or any subsidiary as of Optionee’s
Termination Date or (2) engaged in business activities that
Optionee knows PNC or any subsidiary intends to enter within the
first twelve (12) months after Optionee’s Termination
Date or, if later and if applicable, after the date specified in
clause (ii) of Section A.15(a), in either case whether
Optionee is acting as agent, consultant, independent contractor,
employee, officer, director, investor, partner, shareholder,
proprietor or in any other individual or representative capacity
therein.
A.11 “Consolidated
Subsidiary” means a corporation, bank, partnership, business
trust, limited liability company or other form of business
organization that (1) is a consolidated subsidiary of PNC
under generally accepted accounting principles and
(2) satisfies the definition of “service
recipient” under Section 409A of the Internal Revenue
Code.
A.12 “Corporation” means PNC
and its Consolidated Subsidiaries.
A.13 “Coverage Period” means
a period (a) commencing on the earlier to occur of
(i) the date of a CIC Triggering Event and (ii) the date
of a Change in Control and (b) ending on the date that is two
(2) years after the date of the Change in Control;
provided , however , that in the event that a
Coverage Period commences on the date of a CIC Triggering Event,
such Coverage Period will terminate upon the earlier to occur of
(x) the date of a CIC Failure and (y) the date that is
two (2) years after the date of the Change in Control
triggered by the CIC Triggering Event. After the termination of any
Coverage Period, another Coverage Period will commence upon the
earlier to occur of clauses (a)(i) and (a)(ii) in the preceding
sentence.
A.14 “Covered Shares” means
the number of shares of PNC common stock that Optionee has the
option to purchase from PNC pursuant to the Option.
A.15 “Detrimental Conduct”
means, for purposes of the Agreement:
(a) Optionee has engaged,
without the prior written consent of PNC (with consent to be given
at PNC’s sole discretion), in any Competitive Activity in the
continental United States at any time during the period commencing
on Optionee’s Termination Date and extending through (and
including) the first (1 st ) anniversary of the later of (i) Optionee’s
Termination Date and, if different, (ii) the first date after
Optionee’s Termination Date as of which Optionee ceases to be
engaged by the Corporation in any capacity for which Optionee
receives compensation from the Corporation, including but not
limited to acting for compensation as a consultant, independent
contractor, employee, officer, director or advisory
director;
(b) any act of fraud, misappropriation,
or embezzlement by Optionee against PNC or one of its subsidiaries
or any client or customer of PNC or one of its subsidiaries;
or
(c) any conviction (including a plea of
guilty or of nolo contendere ) of Optionee for, or any entry
by Optionee into a pre-trial disposition with respect to, the
commission of a felony that relates to or arises out of
Optionee’s employment or other service relationship with the
Corporation.
Optionee will be deemed to have engaged
in Detrimental Conduct for purposes of the Agreement only if and
when the Committee (if Optionee was an “executive
officer” of PNC as defined in SEC Regulation S-K when he or
she ceased to be an employee of the Corporation) or the CEO (if
Optionee was not such an executive officer), whichever is
applicable, determines that Optionee has engaged in conduct
described in clause (a) or clause (b) above or that an
event described in clause (c) above has occurred with respect
to Optionee, and, if so, determines that Optionee will be deemed to
have engaged in Detrimental Conduct.
A.16 “Exchange Act” means
the Securities Exchange Act of 1934 as amended, and the rules and
regulations promulgated thereunder.
A.17 “Exercise Date” means
the date (which must be a business day for PNC Bank, National
Association) on which PNC receives written notice, in such form as
PNC may from time to time prescribe, of the exercise, in whole or
in part, of the Option pursuant to the terms of the Agreement,
subject to receipt by PNC of full payment of the aggregate Option
Price, calculation by PNC of the applicable withholding taxes, and
receipt by PNC of payment for any taxes required to be withheld in
connection with such exercise as provided in Sections 4.1, 4.2 and
4.3 of the Agreement.
A.18 “Expiration
Date.”
(a) Expiration Date .
Expiration Date means the date on which the Option expires, which
will be the tenth (10 th ) anniversary of the Grant Date unless the Option expires
earlier pursuant to any of the provisions set forth in Sections
A.18(b) through A.18(d);
provided, however, if
there is a Change in Control, then notwithstanding Sections A.18(c)
and A.18(d), to the extent that the Option is outstanding and
vested or vests at the time the Change in Control occurs, the
Option will not expire at the earliest before the close of business
on the ninetieth (90 th ) day after the occurrence of the Change in Control (or
the tenth (10 th ) anniversary of the Grant Date if earlier), provided
that either (1) Optionee is an employee of the Corporation
at the time the Change in Control occurs and Optionee’s
employment with the Corporation is not terminated for Cause or
(2) Optionee is a former employee of the Corporation whose
Option, or portion thereof, is outstanding at the time the Change
in Control occurs by virtue of the application of one or more of
the exceptions set forth in Section A.18(c) and at least one of
such exceptions is still applicable at the time the Change in
Control occurs.
In no event will the Option
remain outstanding beyond the tenth (10 th ) anniversary of the Grant
Date.
(b) Termination for Cause . Upon
a termination of Optionee’s employment with the Corporation
for Cause, unless the Committee determines otherwise, the Option
will expire at the close of business on Optionee’s
Termination Date with respect to all Covered Shares, whether or not
vested and whether or not Optionee is eligible to Retire or
Optionee’s employment also terminates for another
reason.
(c) Ceasing to be an Employee other
than by Termination for Cause . If Optionee ceases to be an
employee of the Corporation other than by termination of
Optionee’s employment for Cause, then unless the Committee
determines otherwise, the Option will expire at the close of
business on Optionee’s Termination Date with respect to all
Covered Shares, whether or not vested, except to the extent that
the provisions set forth in subsection (1), (2), (3), (4) or
(5) of this Section A.18(c) apply to Optionee’s
circumstances and such applicable subsection specifies a later
expiration date for all or a portion of the Option. If more than
one of such exceptions is applicable to the Option or a portion
thereof, then the Option or such portion of the Option will expire
in accordance with the provisions of the subsection that specifies
the latest expiration date.
(1) Retirement
. If the termination of Optionee’s employment with the
Corporation meets the definition of Retirement, then the Option
will expire on the tenth (10 th ) anniversary of the Grant Date with respect to any
Covered Shares as to which the Option is vested on the Retirement
date or thereafter vests pursuant to Section 2.2 of the
Agreement.
(2) Death . If
Optionee’s employment with the Corporation is terminated by
reason of Optionee’s death, then the Option will expire on
the tenth (10 th ) anniversary of the Grant Date.
(3) Termination during
a Coverage Period without Cause or with Good Reason . If
Optionee’s employment with the Corporation is terminated
(other than by reason of Optionee’s death) during a Coverage
Period by the Corporation without Cause or by Optionee with Good
Reason, then the Option will expire on the third (3
rd
) anniversary of such
Termination Date (but in no event later than on the tenth
(10 th ) anniversary of the Grant Date).
(4) Total and Permanent
Disability . If Optionee’s employment is terminated
by the Corporation by reason of Total and Permanent Disability,
then the Option will expire on the third (3 rd ) anniversary of such Termination
Date (but in no event later than on the tenth (10
th
) anniversary of the
Grant Date).
(5) DEAP or Agreement
or Arrangement in lieu of or in addition to DEAP . In the
event that (a) Optionee’s employment with the
Corporation is terminated by the Corporation, and Optionee is
offered and has entered into the standard Waiver and Release
Agreement with PNC or one of its subsidiaries under an applicable
PNC or subsidiary Displaced Employee Assistance Plan, or any
successor plan by whatever name known (“DEAP”), or
Optionee is offered and has entered into a similar waiver and
release agreement between PNC or one of its subsidiaries and
Optionee pursuant to the terms of an agreement or arrangement
entered into by PNC or a subsidiary and Optionee in lieu of or in
addition to the DEAP, and (b) Optionee has not revoked such
waiver and release agreement, and (c) the time for revocation
of such waiver and release agreement by Optionee has lapsed, then
the Option will expire at the close of business on the ninetieth
(90 th ) day after Optionee’s Termination Date (but in no
event later than on the tenth (10 th ) anniversary of the Grant Date)
with respect to any Covered Shares as to which the Option has
already become vested; provided , however , that if
Optionee returns to employment with the Corporation no later than
said ninetieth (90 th ) day, then for purposes of the Agreement, the entire
Option, whether vested or unvested, will be treated as if the
termination of Optionee’s employment with the Corporation had
not occurred.
If the vested portion of the
Option (or the entire Option if fully vested) will expire on
Optionee’s Termination Date unless the conditions set forth
in this Section A.18(c)(5) are met, then such vested Option or
portion thereof will not terminate on the Termination Date, but
Optionee will not be able to exercise the Option after such
Termination Date unless and until all of the conditions set forth
in this Section A.18(c)(5) have been met and the Option will
terminate on the ninetieth (90 th ) day after Optionee’s Termination Date (but in no
event later than on the tenth (10 th ) anniversary of the Grant
Date).
(d) Detrimental Conduct . If the
Option would otherwise remain outstanding after Optionee’s
Termination Date with respect to any of the Covered Shares pursuant
to one or more of the exceptions set forth in the subsections of
Section A.18(c), then notwithstanding the provisions of such
exception or exceptions, the Option will expire on the date that
PNC determines that Optionee has engaged in Detrimental Conduct, if
earlier than the date on which the Option would otherwise expire;
provided , however , that:
(1) no determination that Optionee has
engaged in Detrimental Conduct may be made on or after the date of
Optionee’s death, and Detrimental Conduct will not apply to
conduct by or activities of beneficiaries or other successors to
the Option in the event of Optionee’s death;
(2) in the event that Optionee’s
employment with the Corporation is terminated (other than by reason
of Optionee’s death) during a Coverage Period by the
Corporation without Cause or by Optionee with Good Reason, whether
or not another exception is applicable, no determination that
Optionee has engaged in Detrimental Conduct for purposes of the
Agreement may be made on or after such Termination Date;
and
(3) no determination that Optionee has
engaged in Detrimental Conduct may be made after the occurrence of
a Change in Control.
A.19 “Fair Market Value” as
it relates to a share of PNC common stock as of any given date
means the average of the reported high and low trading prices on
the New York Stock Exchange (or such successor reporting system as
PNC may select) for a share of PNC common stock on such date, or,
if no PNC common stock trades have been reported on such exchange
for that day, the average of such prices on the next preceding day
and the next following day for which there were reported
trades.
A.20 “GAAP” or
“generally accepted accounting principles” means
accounting principles generally accepted in the United States of
America.
A.21 “Good Reason”
means:
(a) the assignment to Optionee of any
duties inconsistent in any respect with Optionee’s position
(including status, offices, titles and reporting requirements),
authority, duties or responsibilities immediately prior to either
the CIC Triggering Event or the Change in Control, or any other
action by the Corporation that results in a diminution in any
respect in such position, authority, duties or responsibilities,
excluding for this purpose an isolated, insubstantial and
inadvertent action not taken in bad faith that is remedied by the
Corporation promptly after receipt of notice thereof given by
Optionee;
(b) a reduction by the Corporation in
Optionee’s annual base salary as in effect on the Grant Date,
as the same may be increased from time to time;
(c) the Corporation’s requiring
Optionee to be based at any office or location that is more than
fifty (50) miles from Optionee’s office or location
immediately prior to either the CIC Triggering Event or the Change
in Control;
(d) the failure by the Corporation
(i) to continue in effect any bonus, stock option or other
cash or equity-based incentive plan in which Optionee participates
immediately prior to either the CIC Triggering Event or the Change
in Control that is material to Optionee’s total compensation,
unless a substantially equivalent arrangement (embodied in an
ongoing substitute or alternative plan) has been made with respect
to such plan, or (ii) to continue Optionee’s
participation in such plan (or in such substitute or alternative
plan) on a basis at least as favorable, both in terms of the amount
of benefits provided and the level of Optionee’s
participation relative to other participants, as existed
immediately prior to the CIC Triggering Event or the Change in
Control; or
(e) the failure by the Corporation to
continue to provide Optionee with benefits substantially similar to
those received by Optionee under any of the Corporation’s
pension (including, but not limited to, tax-qualified plans), life
insurance, health, accident, disability or other welfare plans in
which Optionee was participating, at costs substantially similar to
those paid by Optionee, immediately prior to the CIC Triggering
Event or the Change in Control.
A.22 “Grant Date” means the
date set forth as the Grant Date on page 1 of the Agreement and is
the date as of which the Option is authorized to be granted by the
Committee in accordance with the Plan.
A.23 “Internal Revenue Code”
means the Internal Revenue Code of 1986 as amended, and the rules
and regulations promulgated thereunder.
A.24 “Option” means the
option to purchase shares of PNC common stock granted to Optionee
under the Plan in Section 1 of the Agreement in accordance
with the terms of Article 6 of the Plan.
A.25 “Option Period” means
the period during which the Option may be exercised, as set forth
in Section 2.2 of the Agreement.
A.26 “Option Price” means
the dollar amount per share of PNC common stock at which the Option
may be exercised. The Option Price is set forth on page 1 of the
Agreement.
A.27 “Optionee” means the
person to whom the Option is granted and is identified as Optionee
on page 1 of the Agreement.
A.28 “Person” has the
meaning given in Section 3(a)(9) of the Exchange Act and also
includes any syndicate or group deemed to be a person under
Section 13(d)(3) of the Exchange Act.
A.29 “Plan” means The PNC
Financial Services Group, Inc. 2006 Incentive Award
Plan.
A.30 “PNC” means The PNC
Financial Services Group, Inc.
A.31 “Retire” or
“Retirement” means, for purposes of this Option and all
PNC stock options held by Optionee, whether granted under the Plan
or under an earlier PNC plan, termination of Optionee’s
employment with the Corporation (a) at any time on or after
the first day of the first month coincident with or next following
the date on which Optionee attains age fifty-five (55) and
completes five (5) years of service (where a year of service
is determined in the same manner as the determination of a year of
Vesting Service under the provisions of The PNC Financial Services
Group, Inc. Pension Plan) with the Corporation and (b) for a
reason other than termination by reason of Optionee’s death
or by the Corporation for Cause or, unless the Committee determines
otherwise, termination in connection with a divestiture of assets
or a divestiture of one or more subsidiaries.
A.32 “Retiree” means an
Optionee who has Retired.
A.33 “SEC” means the U.S.
Securities and Exchange Commission.
A.34 “Share” means a share
of authorized but unissued PNC common stock or a reacquired share
of PNC common stock, including shares purchased by PNC on the open
market for purposes of the Plan or otherwise.
A.35 “Termination Date”
means Optionee’s last date of employment with the
Corporation. If Optionee is employed by a Consolidated Subsidiary
that ceases to be a subsidiary of PNC or ceases to be a
consolidated subsidiary of PNC under generally accepted accounting
principles and Optionee does not continue to be employed by PNC or
a Consolidated Subsidiary, then for purposes of the Agreement,
Optionee’s employment with the Corporation terminates
effective at the time this occurs.
A.36 “Total and Permanent
Disability” means, unless the Committee determines otherwise,
Optionee’s disability as determined to be total and permanent
by the Corporation for purposes of the Agreement.
Reload Option Agreement Form
for
Original Options Granted
During 1999 or 2000
THE PNC FINANCIAL SERVICES
GROUP, INC.
1997 LONG-TERM INCENTIVE
AWARD PLAN
RELOAD NONSTATUTORY STOCK
OPTION AGREEMENT
|
|
|
| OPTIONEE: |
|
«EMPLOYEE» |
|
|
| ORIGINAL
OPTION GRANT DATE: |
|
______________, [1999][2000] |
|
|
| RELOAD
OPTION GRANT DATE: |
|
____________________________ |
|
|
| RELOAD
OPTION PRICE: |
|
$
per share |
|
|
| COVERED
SHARES: |
|
«STOCK AMT» |
Terms defined in The PNC Financial
Services Group, Inc. 1997 Long-Term Incentive Award Plan as amended
from time to time (“Plan”) are used in this reload
nonstatutory stock option agreement (“Reload
Agreement”) as defined in the Plan unless otherwise defined
in the Reload Agreement or an Annex thereto. In the Reload
Agreement, “PNC” means The PNC Financial Services
Group, Inc. and “Corporation” means PNC and its
Subsidiaries. For certain definitions, see Annex A attached hereto
and incorporated herein by reference. Headings used in the Reload
Agreement and in the Annexes hereto are for convenience only and
are not part of the Reload Agreement and Annexes.
1. Grant of Reload Option .
Optionee, having exercised all or a portion of the Option granted
to Optionee under the Plan as of
, [1999][2000] [insert Original
Option grant date] (the “Original Option”) while
employed by the Corporation and in a manner specified in the
Addendum to the Original Option stock option agreement, is hereby
granted, pursuant to the Plan and subject to the terms of the
Reload Agreement, a Reload Option (“Reload Option”) to
purchase from PNC that number of shares of PNC common stock
specified above as the “Covered Shares,” exercisable at
the Reload Option Price.
2. Terms of the Reload Option
.
2.1 Type of Option . The Reload
Option is intended to be a Nonstatutory Stock Option without
Rights.
2.2 Reload Option Period . The
Reload Option is exercisable in whole or in part as to any Covered
Shares as to which it is outstanding and has become exercisable
(“vested”) at any time and from time to time through
the Expiration Date.
To the extent that the Reload Option is
otherwise outstanding, the Reload Option will vest as to Covered
Shares as set forth in this Section 2.2.
(a) Unless the Reload Option
has become vested pursuant to Section 2.2(b), 2.2(c), 2.2(d),
2.2(e), 2.2(f) or 2.2(g), the Reload Option will become exercisable
(“vest”) commencing on the first (1 st ) anniversary date of the Reload
Option Grant Date provided that Optionee is still an
employee of the Corporation on such vesting date.
(b) If Optionee’s employment is
terminated by the Corporation by reason of Total and Permanent
Disability and not for Cause, the Reload Option will vest as to all
outstanding Covered Shares as to which it has not otherwise vested
commencing on Optionee’s Termination Date.
(c) If Optionee’s employment with
the Corporation is terminated by reason of Optionee’s death,
the Reload Option will immediately vest as to all outstanding
Covered Shares as to which it has not otherwise vested, and the
Reload Option may be exercised by Optionee’s properly
designated beneficiary, by the person or persons entitled to do so
under Optionee’s will, or by the person or persons entitled
to do so under the applicable laws of descent and
distribution.
(e) If, (i) on or after the six
(6) month anniversary of the Reload Option Grant Date and
(ii) after the occurrence of a CIC Triggering Event but prior
to the occurrence of a CIC Failure or of the Change in Control
triggered by the CIC Triggering Event, Optionee’s employment
with the Corporation is terminated by the Corporation without Cause
or by Optionee with Good Reason, the Reload Option will vest as to
all outstanding Covered Shares as to which it has not otherwise
vested commencing on Optionee’s Termination Date.
(e) If Optionee is a Retiree whose
Retirement date occurs on or after the six (6) month
anniversary of the Reload Option Grant Date, the Reload Option will
vest as to all outstanding Covered Shares as to which it has not
otherwise vested commencing on Optionee’s Retirement
date.
(f) Notwithstanding any other provision
of this Section 2.2, to the extent that the Reload Option is
outstanding but not yet fully vested at the time a Change in
Control occurs, the Reload Option will vest as to all then
outstanding Covered Shares as to which it has not otherwise vested,
effective as of the day immediately prior to the occurrence of the
Change in Control, provided that , at the time the Change in
Control occurs, Optionee is an employee of the
Corporation.
(g) The Committee or its delegate may in
their sole discretion, but need not, accelerate the vesting date of
all or any portion of the Reload Option subject, if applicable, to
such limitations as may be set forth in the Plan.
If Optionee is employed by a Subsidiary
that ceases to be a Subsidiary of PNC and Optionee does not
continue to be employed by PNC or a Subsidiary, then for purposes
of the Reload Agreement, Optionee’s employment with the
Corporation terminates effective at the time this
occurs.
2.3 Nontransferability; Designation
of Beneficiary; Payment to Legal Representative .
| (a) |
The Reload Option is not transferable or assignable by
Optionee. |
(b) During Optionee’s lifetime,
the Reload Option may be exercised only by Optionee or, in the
event of Optionee’s legal incapacity, by his or her legal
representative, as determined in good faith by PNC.
(c) During Optionee’s lifetime,
Optionee may file with PNC, at such address and in such manner as
PNC may from time to time direct, on a form to be provided by PNC
on request, a designation of a beneficiary or beneficiaries (a
“properly designated beneficiary”) to hold and exercise
Optionee’s stock options, to the extent outstanding and
exercisable, in accordance with their respective stock option
agreements and the Plan in the event of Optionee’s
death.
(d) If Optionee dies prior to the full
exercise or expiration of the Reload Option and has not filed a
designation of beneficiary form as specified above, the Reload
Option will be held and may be exercised by the person or persons
entitled to do so under Optionee’s will or under the
applicable laws of descent and distribution, as to which PNC will
be entitled to rely in good faith on instructions from
Optionee’s executor, administrator, or other legal
representative.
(e) Any delivery of shares or other
payment made or action taken hereunder by PNC in good faith to or
on the instructions of Optionee’s executor, administrator, or
other legal representative shall extinguish all right to payment
hereunder.
3. Capital Adjustments . Upon the
occurrence of a corporate transaction or transactions (including,
without limitation, stock dividends, stock splits, spin-offs,
split-offs, recapitalizations, mergers, consolidations or
reorganizations of or by PNC (each, a “Corporate
Transaction”)), the Committee shall make those adjustments,
if any, in the number, class or kind of Covered Shares as to which
the Reload
Option is outstanding and has not yet
been exercised and in the Reload Option Price that it deems
appropriate in its discretion to reflect the Corporate
Transaction(s) such that the rights of Optionee are neither
enlarged nor diminished as a result of such Corporate Transaction
or Transactions, including without limitation cancellation of the
Reload Option immediately prior to the effective time of the
Corporate Transaction and payment, in cash, in consideration
therefor, of an amount equal to the product of (a) the excess,
if any, of the per share value of the consideration payable to a
PNC common shareholder in connection with such Corporate
Transaction over the Reload Option Price and (b) the total
number of Covered Shares subject to the Reload Option that were
outstanding and unexercised immediately prior to the effective time
of the Corporate Transaction.
All determinations hereunder shall be
made by the Committee in its sole discretion and shall be final,
binding and conclusive for all purposes on all parties, including
without limitation the holder of the Reload Option.
No fractional shares will be issued on
exercise of the Reload Option. PNC shall determine the manner in
which any fractional shares will be treated.
4. Exercise of Reload Option
.
4.1 Notice and Effective Date .
The Reload Option may be exercised, in whole or in part, by
delivering to PNC written notice of such exercise, in such form as
PNC may from time to time prescribe, accompanied by full payment of
the aggregate Reload Option Price with respect to that portion of
the Reload Option being exercised and satisfaction of any amounts
required to be withheld pursuant to applicable tax laws in
connection with such exercise.
In addition, notwithstanding Sections
4.2 and 4.3, Optionee may elect to complete his or her Reload
Option exercise through a brokerage service/margin account pursuant
to the broker-assisted cashless option exercise procedure under
Regulation T of the Board of Governors of the Federal Reserve
System and in such manner as may be permitted by PNC from time to
time consistent with said Regulation T.
The effective date of such exercise will
be the Exercise Date. Until PNC notifies Optionee to the contrary,
the form attached to the Reload Agreement as Annex B shall be used
to exercise the Reload Option and the form attached to the Reload
Agreement as Annex C shall be used to make tax payment
elections.
In the event that the Reload Option is
exercised, pursuant to Section 2.3, by any person or persons
other than Optionee, such notice of exercise must be accompanied by
appropriate proof of the derivative right of such person or persons
to exercise the Reload Option.
4.2 Payment of Reload Option
Price . Upon exercise of the Reload Option, in whole or in
part, Optionee may pay the aggregate Reload Option Price
(a) in cash or (b) if and to the extent then permitted by
PNC, using whole shares of PNC common stock (either by physical
delivery to PNC of certificates for the shares or through
PNC’s share attestation procedure) having an aggregate Fair
Market Value on the Exercise Date not exceeding that portion of the
aggregate Reload Option Price being paid using such shares, or
through a combination of cash and shares of PNC common stock;
provided , however , that shares of PNC common stock
used to pay all or any portion of the aggregate Reload Option Price
may not be subject to any contractual restriction, pledge or other
encumbrance and must be shares that have been owned by Optionee for
at least six (6) months prior to the Exercise Date and, in the
case of restricted stock, for which it has been at least six
(6) months since the restrictions lapsed, or, in either case,
for such other period as may be specified or permitted by
PNC.
4.3 Payment of Taxes . Optionee
may elect to satisfy any or all applicable federal, state, or local
tax liabilities incurred in connection with exercise of the Reload
Option (a) by payment of cash, (b) if and to the extent
then permitted by PNC and subject to such terms and conditions as
PNC may from time to time establish, through the retention by PNC
of sufficient whole shares of PNC common stock otherwise issuable
upon such exercise to satisfy the minimum amount of taxes required
to be withheld in connection with such exercise, or (c) if and
to the extent then permitted by PNC and subject to such terms
and
conditions as PNC may from time to time
establish, using whole shares of PNC common stock (either by
physical delivery to PNC of certificates for the shares or through
PNC’s share attestation procedure) that are not subject to
any contractual restriction, pledge or other encumbrance and that
have been owned by Optionee for at least six (6) months prior
to the Exercise Date and, in the case of restricted stock, for
which it has been at least six (6) months since the
restrictions lapsed, or, in either case, for such other period as
may be specified or permitted by PNC.
For purposes of this Section 4.3,
shares of PNC common stock that are used to satisfy applicable
taxes will be valued at their Fair Market Value on the date the tax
withholding obligation arises. In no event will the Fair Market
Value of the shares of PNC common stock otherwise issuable upon
exercise of the Reload Option but retained pursuant to
Section 4.3(b) exceed the minimum amount of taxes required to
be withheld in connection with the Reload Option
exercise.
4.4 Effect . The exercise, in
whole or in part, of the Reload Option will cause a reduction in
the number of unexercised Covered Shares as to which the Reload
Option is outstanding equal to the number of shares of PNC common
stock with respect to which the Reload Option is
exercised.
5. Restrictions on Exercise and on
Shares Issued on Exercise . Notwithstanding any other provision
of the Reload Agreement, the Reload Option may not be exercised at
any time that PNC does not have in effect a registration statement
under the Securities Act of 1933 as amended relating to the offer
of shares of PNC common stock under the Plan unless PNC agrees to
permit such exercise. Upon the issuance of any shares of PNC common
stock pursuant to exercise of the Reload Option at a time when such
a registration statement is not in effect, Optionee will, upon the
request of PNC, agree in writing that Optionee is acquiring such
shares for investment only and not with a view to resale and that
Optionee will not sell, pledge, or otherwise dispose of such shares
unless and until (a) PNC is furnished with an opinion of
counsel to the effect that registration of such shares pursuant to
the Securities Act of 1933 as amended is not required by that Act
or by rules and regulations promulgated thereunder, (b) the
staff of the SEC has issued a no-action letter with respect to such
disposition, or (c) such registration or notification as is,
in the opinion of counsel for PNC, required for the lawful
disposition of such shares has been filed and has become effective;
provided , however , that PNC is not obligated hereby
to file any such registration or notification. PNC may place a
legend embodying such restrictions on the certificate(s) evidencing
such shares.
6. Rights as Shareholder .
Optionee will have no rights as a shareholder with respect to any
Covered Shares until the Exercise Date and then only with respect
to those shares of PNC common stock issued upon such exercise of
the Reload Option and not retained as provided in
Section 4.3.
7. Employment . Neither the
granting of the Reload Option evidenced by the Reload Agreement nor
any term or provision of the Reload Agreement will constitute or be
evidence of any understanding, expressed or implied, on the part of
PNC or any Subsidiary to employ Optionee for any period.
8. Subject to the Plan . The
Reload Option evidenced by the Reload Agreement and the exercise
thereof are subject to the terms and conditions of the Plan, which
is incorporated by reference herein and made a part hereof, but the
terms of the Plan will not be considered an enlargement of any
benefits under the Reload Agreement. In addition, the Reload Option
is subject to any rules and regulations promulgated by or under the
authority of the Committee.
9. Applicable Law . The Reload
Agreement is governed by and construed under the laws of the
Commonwealth of Pennsylvania, without reference to its conflict of
laws provisions.
Notwithstanding anything in the Reload
Agreement, PNC will not be required to comply with any term,
covenant or condition of the Reload Agreement if and to the extent
prohibited by law, including but not limited to federal banking and
securities regulations, or as otherwise directed by one or more
regulatory agencies having jurisdiction over PNC or any of its
subsidiaries. Further, to the extent, if any, applicable to
Optionee, Optionee agrees to reimburse PNC for any amounts Optionee
may be required to reimburse the Corporation pursuant to
Section 304 of the Sarbanes-Oxley Act of 2002, and agrees that
PNC need not comply with any term, covenant or condition of the
Reload Agreement to the extent that doing so would require that
Optionee reimburse PNC or its subsidiaries for such amounts
pursuant to Section 304 of the Sarbanes-Oxley Act of
2002.
10. Compliance with Internal Revenue
Code Section 409A . It is the intention of the parties
that the Reload Option and the Agreement comply with the provisions
of Section 409A of the Internal Revenue Code of 1986 as
amended, and the rules and regulations promulgated thereunder,
(“Section 409A”) to the extent, if any, that such
provisions are applicable to the Agreement, and the Agreement will
be administered by PNC in a manner consistent with this
intent.
Optionee understands and agrees that if
any payments or benefits hereunder may be deemed to constitute
nonconforming deferred compensation subject to taxation under the
provisions of Section 409A, PNC may, without the consent of
Optionee, modify the Agreement and the Reload Option to the extent
and in the manner PNC deems necessary or advisable or take such
other action or actions, including an amendment or action with
retroactive effect, that PNC deems appropriate in order either to
preclude any such payments or benefits from being deemed
“deferred compensation” within the meaning of
Section 409A or to provide such payments or benefits in a
manner that complies with the provisions of Section 409A such
that they will not be taxable thereunder.
11. No Additional Reload Option .
Exercise of the Reload Option will not entitle Optionee to receive
an additional reload option, regardless of the manner in which the
Reload Option is exercised.
12. Effective Date . If Optionee
does not accept the grant of the Reload Option by executing and
delivering a copy of the Reload Agreement to PNC, without altering
or changing the terms of the Reload Agreement in any way, within
thirty (30) days of receipt by Optionee of a copy of the
Reload Agreement, PNC may, in its sole discretion, withdraw its
offer and cancel the Reload Option and the Reload Agreement at any
time prior to Optionee’s delivery to PNC of a copy of the
Reload Agreement executed by Optionee.
Otherwise, upon execution and delivery
of the Reload Agreement by both PNC and Optionee and, in the event
that Optionee is subject to the reporting requirements of
Section 16(a) of the Exchange Act with respect to PNC
securities, the filing with and acceptance by the SEC of a Form 4
reporting the Reload Option Grant, the Reload Option and the Reload
Agreement are effective as of the Reload Option Grant
Date.
I N W
ITNESS W HEREOF , PNC has caused the
Reload Agreement to be signed on its behalf effective as of the
Reload Option Grant Date.
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| THE PNC FINANCIAL SERVICES GROUP, INC. |
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| By: |
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Chairman
and Chief Executive Officer |
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| ATTEST: |
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| By: |
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Corporate
Secretary |
Accepted and agreed to as of the Reload
Option Grant Date
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| Optionee |
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| Annex A -
Certain Definitions |
| Annex B -
Notice of Exercise |
| Annex C -
Tax Payment Election Form |
ANNEX A
CERTAIN
DEFINITIONS
* * *
Except where the context otherwise
indicates, the following definitions apply to the Reload
Nonstatutory Stock Option Agreement (“Reload
Agreement”) to which this Annex A is attached.
A.1 “Board” means the Board
of Directors of PNC.
A.2 “Cause”
means:
(a) the willful and continued failure of
Optionee to substantially perform Optionee’s duties with the
Corporation (other than any such failure resulting from incapacity
due to physical or mental illness), after a written demand for
substantial performance is delivered to Optionee by the Board or
the CEO that specifically identifies the manner in which the Board
or the CEO believes that Optionee has not substantially performed
Optionee’s duties; or
(b) the willful engaging by Optionee in
illegal conduct or gross misconduct that is materially and
demonstrably injurious to PNC or any Subsidiary.
For purposes of the preceding clauses
(a) and (b), no act or failure to act, on the part of
Optionee, shall be considered willful unless it is done, or omitted
to be done, by Optionee in bad faith and without reasonable belief
that Optionee’s action or omission was in the best interests
of the Corporation. Any act, or failure to act, based upon the
instructions or prior approval of the Board, the CEO or
Optionee’s superior or based upon the advice of counsel for
the Corporation, shall be conclusively presumed to be done, or
omitted to be done, by Optionee in good faith and in the best
interests of the Corporation.
The cessation of employment of Optionee
will be deemed to be a termination of Optionee’s employment
with the Corporation for Cause for purposes of the Reload Agreement
only if and when there shall have been delivered to Optionee, as
part of the notice of Optionee’s termination, a copy of a
resolution duly adopted by the affirmative vote of not less than a
majority of the entire membership of the Board, at a Board meeting
called and held for the purpose of considering such termination,
finding on the basis of clear and convincing evidence that, in the
good faith opinion of the Board, Optionee is guilty of conduct
described in clause (a) or (b) above and, in either case,
specifying the particulars thereof in detail. Such resolution shall
be adopted only after (1) reasonable notice of such Board
meeting is provided to Optionee, together with written notice that
PNC believes that Optionee is guilty of conduct described in clause
(a) or (b) above and, in either case, specifying the
particulars thereof in detail, and (2) Optionee is given an
opportunity, together with counsel, to be heard before the
Board.
A.3 “CEO” means the chief
executive officer of PNC.
A.4 “Change in Control”
means a change of control of PNC of a nature that would be required
to be reported in response to Item 6(e) of Schedule 14A of
Regulation 14A (or in response to any similar item on any similar
schedule or form) promulgated under the Exchange Act, whether or
not PNC is then subject to such reporting requirement;
provided , however , that without limitation, a
Change in Control shall be deemed to have occurred if:
(a) any Person, excluding employee
benefit plans of the Corporation, is or becomes the beneficial
owner (as defined in Rules 13d-3 and 13d-5 under the Exchange Act
or any successor provisions thereto), directly or indirectly, of
securities of PNC representing twenty percent
(20%) or more of the combined voting
power of PNC’s then outstanding securities; provided ,
however , that such an acquisition of beneficial ownership
representing between twenty percent (20%) and forty percent
(40%), inclusive, of such voting power shall not be considered a
Change in Control if the Board approves such acquisition either
prior to or immediately after its occurrence;
(b) PNC consummates a merger,
consolidation, share exchange, division or other reorganization or
transaction of PNC (a “Fundamental Transaction”)
with any other corporation, other than a Fundamental Transaction
that results in the voting securities of PNC outstanding
immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into voting securities
of the surviving entity) at least sixty percent (60%) of the
combined voting power immediately after such Fundamental
Transaction of (i) PNC’s outstanding securities,
(ii) the surviving entity’s outstanding securities, or
(iii) in the case of a division, the outstanding securities of
each entity resulting from the division;
(c) the shareholders of PNC approve a
plan of complete liquidation or winding-up of PNC or an agreement
for the sale or disposition (in one transaction or a series of
transactions) of all or substantially all of PNC’s
assets;
(d) as a result of a proxy contest,
individuals who prior to the conclusion thereof constituted the
Board (including for this purpose any new director whose election
or nomination for election by PNC’s shareholders in
connection with such proxy contest was approved by a vote of at
least two-thirds (2/3rds) of the directors then still in
office who were directors prior to such proxy contest) cease to
constitute at least a majority of the Board (excluding any Board
seat that is vacant or otherwise unoccupied);
(e) during any period of twenty-four
(24) consecutive months, individuals who at the beginning of
such period constituted the Board (including for this purpose any
new director whose election or nomination for election by
PNC’s shareholders was approved by a vote of at least
two-thirds (2/3rds) of the directors then still in office who
were directors at the beginning of such period) cease for any
reason to constitute at least a majority of the Board (excluding
any Board seat that is vacant or otherwise unoccupied);
or
(f) the Board determines that a Change
in Control has occurred.
Notwithstanding anything to the contrary
herein, a divestiture or spin-off of a subsidiary or division of
PNC or any of its Subsidiaries shall not by itself constitute a
Change in Control.
A.5 “CIC Failure” means the
following:
(a) with respect to a CIC Triggering
Event described in Section A.7(a), PNC’s shareholders vote
against the transaction approved by the Board or the agreement to
consummate the transaction is terminated; or
(b) with respect to a CIC Triggering
Event described in Section A.7(b), the proxy contest fails to
replace or remove a majority of the members of the
Board.
A.6 “CIC Severance
Agreement” means the written agreement, if any, between
Optionee and PNC providing, among other things, for certain change
in control severance benefits.
A.7 “CIC Triggering Event”
means the occurrence of either of the following:
(a) the Board or PNC’s
shareholders approve a transaction described in Subsection (b)
of the definition of Change in Control contained in
Section A.4; or
(b) the commencement of a proxy contest
in which any Person seeks to replace or remove a majority of the
members of the Board.
A.8 “Committee” means the
Personnel and Compensation Committee of the Board or such person or
persons as may be designated by that committee as its
delegate.
A.9 “Competitive Activity”
means, for purposes of the Reload Agreement, any participation in,
employment by, ownership of any equity interest exceeding one
percent (1%) in, or promotion or organization of, any Person
other than PNC or any Subsidiary (1) engaged in business
activities similar to some or all of the business activities of PNC
or any Subsidiary as of Optionee’s Termination Date or
(2) engaged in business activities that Optionee knows PNC or
any Subsidiary intends to enter within the first twelve
(12) months after Optionee’s Termination Date or, if
later and if applicable, after the date specified in clause
(2) of Section A.12(i), in either case whether Optionee is
acting as agent, consultant, independent contractor, employee,
officer, director, investor, partner, shareholder, proprietor or in
any other individual or representative capacity therein.
A.10 “Corporation” means PNC
and its Subsidiaries.
A.11 “Coverage Period” means
a period (a) commencing on the earlier to occur of
(i) the date of a CIC Triggering Event and (ii) the date
of a Change in Control and (b) ending on the date that is two
(2) years after the date of the Change in Control;
provided , however , that in the event that a
Coverage Period commences on the date of a CIC Triggering Event,
such Coverage Period will terminate upon the earlier to occur of
(x) the date of a CIC Failure and (y) the date that is
two (2) years after the date of the Change in Control
triggered by the CIC Triggering Event. After the termination of any
Coverage Period, another Coverage Period will commence upon the
earlier to occur of clauses (a)(i) and (a)(ii) in the preceding
sentence.
A.12 “Detrimental Conduct”
means, for purposes of the Reload Agreement:
(i) Optionee has engaged,
without the prior written consent of PNC (at PNC’s sole
discretion), in any Competitive Activity in the continental United
States at any time during the period commencing on Optionee’s
Termination Date and extending through the first (1
st
) anniversary of the
later of (1) Optionee’s Termination Date and, if
different, (2) the first date after Optionee’s
Termination Date as of which Optionee ceases to be engaged by the
Corporation in any capacity for which Optionee receives
compensation from the Corporation, including but not limited to
acting for compensation as a consultant, independent contractor,
employee, officer, director or advisory director;
(ii) a material breach by Optionee of
(1) any code of conduct of PNC or a Subsidiary or
(2) other written policy of PNC or a Subsidiary, in either
case required by law or established to maintain compliance with
applicable law;
(iii) any act of fraud,
misappropriation, material dishonesty, or embezzlement by Optionee
against PNC or a Subsidiary or any client or customer of PNC or a
Subsidiary;
(iv) any conviction (including a plea of
guilty or of nolo contendere ) of Optionee for, or entry by
Optionee into a pre-trial disposition with respect to, the
commission of a felony that relates to or arises out of
Optionee’s employment or other service relationship with the
Corporation; or
(v) entry of any order against Optionee,
by any governmental body having regulatory authority with respect
to the business of PNC or any Subsidiary, that relates to or arises
out of Optionee’s employment or other service relationship
with the Corporation.
Optionee will be deemed to have engaged
in Detrimental Conduct for purposes of the Reload Agreement only if
and when the CEO or his or her designee (or, if Optionee is the
CEO, the Board) determines that Optionee has engaged in conduct
described in clause (i) above, that Optionee is guilty of
conduct described in clause (ii) or (iii) above, or that
an event described in clause (iv) or (v) above has
occurred with respect to Optionee and, if so, determines that
Optionee will be deemed to have engaged in Detrimental
Conduct.
A.13 “Exchange Act” means
the Securities Exchange Act of 1934 as amended, and the rules and
regulations promulgated thereunder.
A.14 “Exercise Date” means
the date (which must be a business day for PNC Bank, National
Association) on which PNC receives written notice, in such form as
PNC may from time to time prescribe, of the exercise, in whole or
in part, of the Reload Option pursuant to the terms of the Reload
Agreement, subject to full payment of the aggregate Reload Option
Price and satisfaction of all taxes required to be withheld in
connection with such exercise as provided in Sections 4.1, 4.2 and
4.3 of the Reload Agreement.
A.15 “Expiration
Date.”
(a) Expiration Date .
Expiration Date means the date on which the Reload Option expires,
which will be the tenth (10 th ) anniversary of the Original Option Grant Date unless the
Reload Option expires earlier pursuant to any of the provisions set
forth in Sections A.15(b) through A.15(d);
provided, however, if
there is a Change in Control, then notwithstanding Sections A.15(c)
and A.15(d), to the extent that the Reload Option is outstanding
and vested or vests at the time the Change in Control occurs, the
Reload Option will not expire at the earliest before the close of
business on the ninetieth (90 th ) day after the occurrence of the Change in Control (or
the tenth (10 th ) anniversary of the Original Option Grant Date if
earlier), provided that either (1) Optionee is an
employee of the Corporation at the time the Change in Control
occurs and Optionee’s employment with the Corporation is not
terminated for Cause or (2) Optionee is a former employee of
the Corporation whose Reload Option, or portion thereof, is
outstanding at the time the Change in Control occurs by virtue of
the application of one or more of the exceptions set forth in
Section A.15(c) and at least one of such exceptions is still
applicable at the time the Change in Control occurs.
In no event will the Reload
Option remain outstanding beyond the tenth (10 th ) anniversary of the Original
Option Grant Date.
(b) Termination for Cause . Upon
a termination of Optionee’s employment with the Corporation
for Cause, unless the Committee determines otherwise, the Reload
Option will expire at the close of business on Optionee’s
Termination Date with respect to all Covered Shares, whether or not
vested and whether or not Optionee is eligible to Retire or
Optionee’s employment also terminates for another
reason.
(c) Ceasing to be an Employee other
than by Termination for Cause . If Optionee ceases to be an
employee of the Corporation other than by termination of
Optionee’s employment for Cause, then unless the Committee
determines otherwise, the Reload Option will expire at the close of
business on Optionee’s Termination Date with respect to all
Covered Shares, whether or not vested, except to the extent that
the provisions set forth in subsection (1), (2), (3), (4) or
(5) of this Section A.15(c) apply to Optionee’s
circumstances and such applicable subsection specifies a later
expiration date for all or a portion of the Reload Option. If more
than one of such exceptions is applicable to the Reload Option or a
portion thereof, then the Reload Option or such portion of the
Reload Option will expire in accordance with the provisions of the
subsection that specifies the latest expiration date.
(1) Retirement
. If the termination of Optionee’s employment with the
Corporation meets the definition of Retirement, then the Reload
Option will expire on the third (3 rd ) anniversary of Optionee’s
Retirement date (but in no event later than on the tenth (10
th
) anniversary of the
Original Option Grant Date) with respect to any Covered Shares as
to which the Reload Option is vested on Optionee’s Retirement
date or vests on the Retirement date pursuant to Section 2.2
of the Reload Agreement.
(2) Death . If
Optionee’s employment with the Corporation is terminated by
reason of Optionee’s death, then the Reload Option will
expire on the first (1 st ) anniversary of the date of Optionee’s death (but
in no event later than on the tenth (10 th ) anniversary of the Original
Option Grant Date).
(3) Termination during
a Coverage Period without Cause or with Good Reason . If
Optionee’s employment with the Corporation is terminated
(other than by reason of Optionee’s death) during a Coverage
Period by the Corporation without Cause or by Optionee with Good
Reason, then the Reload Option will expire on the third (3
rd
) anniversary of such
Termination Date (but in no event later than on the tenth
(10 th ) anniversary of the Original Option Grant Date) with
respect to any Covered Shares as to which the Reload Option is
vested on such date or vests on such Termination Date pursuant to
Section 2.2 of the Reload Agreement.
(4) Total and Permanent
Disability . If Optionee’s employment is terminated
by the Corporation by reason of Total and Permanent Disability,
then the Reload Option will expire on the third (3
rd
) anniversary of such
Termination Date (but in no event later than on the tenth
(10 th ) anniversary of the Original Option Grant
Date).
(5) DEAP or Agreement
or Arrangement in lieu of or in addition to DEAP . In the
event that (a) Optionee’s employment with the
Corporation is terminated by the Corporation, and Optionee is
offered and has entered into the standard Waiver and Release
Agreement with PNC or a Subsidiary under an applicable PNC or
Subsidiary Displaced Employee Assistance Plan, or any successor
plan by whatever name known (“DEAP”), or Optionee is
offered and has entered into a similar waiver and release agreement
between PNC or a Subsidiary and Optionee pursuant to the terms of
an agreement or arrangement entered into by PNC or a Subsidiary and
Optionee in lieu of or in addition to the DEAP, and
(b) Optionee has not revoked such waiver and release
agreement, and (c) the time for revocation of such waiver and
release agreement by Optionee has lapsed, then the Reload Option
will expire at the close of business on the ninetieth (90
th
) day after
Optionee’s Termination Date (but in no event later than on
the tenth (10 th ) anniversary of the Original Option Grant Date) with
respect to any Covered Shares as to which the Reload Option has
already become vested; provided , however , that if
Optionee returns to employment with the Corporation no later than
said ninetieth (90 th ) day, then for purposes of the Reload Agreement, the
entire Reload Option, whether vested or unvested, will be treated
as if the termination of Optionee’s employment with the
Corporation had not occurred.
If the Reload Option is
vested and will expire on Optionee’s Termination Date unless
the conditions set forth in this Section A.15(c)(5) are met,
then such vested Reload Option or portion thereof will not
terminate on the Termination Date, but Optionee will not be able to
exercise the Reload Option after such Termination Date unless and
until all of the conditions set forth in this Section A.15(c)(5)
have been met and the Reload Option will terminate on the ninetieth
(90 th ) day after Optionee’s Termination Date (but in no
event later than on the tenth (10 th ) anniversary of the Original
Option Grant Date).
(d) Detrimental Conduct . If the
Reload Option would otherwise remain outstanding after
Optionee’s Termination Date with respect to any of the
Covered Shares pursuant to one or more of the exceptions set forth
in the subsections of Section A.15(c), then notwithstanding the
provisions of such exception or exceptions, the Reload Option will
expire on the date that PNC determines that Optionee has engaged in
Detrimental Conduct, if earlier than the date on which the Reload
Option would otherwise expire; provided , however ,
that:
(1) no determination that Optionee has
engaged in Detrimental Conduct may be made on or after the date of
Optionee’s death, and Detrimental Conduct will not apply to
conduct by or activities of beneficiaries or other successors to
the Reload Option in the event of Optionee’s
death;
(2) in the event that Optionee’s
employment with the Corporation is terminated (other than by reason
of Optionee’s death) during a Coverage Period by the
Corporation without Cause or by Optionee with Good Reason, whether
or not another exception is applicable, no determination that
Optionee has engaged in Detrimental Conduct for purposes of the
Reload Agreement may be made on or after such Termination Date;
and
(3) no determination that Optionee has
engaged in Detrimental Conduct may be made after the occurrence of
a Change in Control.
A.16 “Fair Market Value” as
it relates to a share of PNC common stock means the average of the
reported high and low trading prices of a share of PNC common stock
on the New York Stock Exchange (or such successor reporting system
as PNC may select) on the relevant date, or, if no PNC common stock
trades have been reported on such exchange for that day, the
average of such prices on the next preceding day and the next
following day for which there were reported trades.
A.17 “Good Reason”
means:
(a) the assignment to Optionee of any
duties inconsistent in any respect with Optionee’s position
(including status, offices, titles and reporting requirements),
authority, duties or responsibilities immediately prior to either
the CIC Triggering Event or the Change in Control, or any other
action by the Corporation that results in a diminution in any
respect in such position, authority, duties or responsibilities,
excluding for this purpose an isolated, insubstantial and
inadvertent action not taken in bad faith that is remedied by the
Corporation promptly after receipt of notice thereof given by
Optionee;
(b) a reduction by the Corporation in
Optionee’s annual base salary as in effect on the Original
Option Grant Date, as the same may be increased from time to
time;
(c) the Corporation’s requiring
Optionee to be based at any office or location that is more than
fifty (50) miles from Optionee’s office or location
immediately prior to either the CIC Triggering Event or the Change
in Control;
(d) the failure by the Corporation
(i) to continue in effect any bonus, stock option or other
cash or equity-based incentive plan in which Optionee participates
immediately prior to either the CIC Triggering Event or the Change
in Control that is material to Optionee’s total compensation,
unless a substantially equivalent arrangement (embodied in an
ongoing substitute or alternative plan) has been made with respect
to such plan, or (ii) to continue Optionee’s
participation in such plan (or in such substitute or alternative
plan) on a basis at least as favorable, both in terms of the amount
of benefits provided and the level of Optionee’s
participation relative to other participants, as existed
immediately prior to the CIC Triggering Event or the Change in
Control; or
(e) the failure by the Corporation to
continue to provide Optionee with benefits substantially similar to
those received by Optionee under any of the Corporation’s
pension (including, but not limited to, tax-qualified plans), life
insurance, health, accident, disability or other welfare plans in
which Optionee was participating, at costs substantially similar to
those paid by Optionee, immediately prior to the CIC Triggering
Event or the Change in Control.
A.18 “Optionee” means the
person identified as Optionee on page 1 of the Reload
Agreement.
A.19 “Original Option” has
the meaning set forth in Section 1 of the Reload
Agreement.
A.20 “Original Option Grant
Date” is the date as of which the Original Option was
granted.
A.21 “Person” has the
meaning given in Section 3(a)(9) of the Exchange Act and also
includes any syndicate or group deemed to be a person under
Section 13(d)(3) of the Exchange Act.
A.22 “PNC” means The PNC
Financial Services Group, Inc.
A.23 “Reload Option” means
the Nonstatutory Stock Option granted to Optionee in Section 1
of the Reload Agreement pursuant to which Optionee may purchase
shares of PNC common stock as provided in the Reload
Agreement.
A.24 “Reload Option Grant
Date” means the date set forth as the Reload Option Grant
Date on page 1 of the Reload Agreement, which is the date the
Original Option was exercised in accordance with the terms of the
Addendum to the Original Option stock option agreement.
A.25 “Reload Option Price”
means the dollar amount per share of PNC common stock set forth as
the Reload Option Price on page 1 of the Reload
Agreement.
A.26 “Retiree” means an
Optionee who has Retired.
A.27 “Retire” or
“Retirement” means termination of Optionee’s
employment with the Corporation (a) at any time on or after
the first day of the first month coincident with or next following
the date on which Optionee attains age fifty-five (55) and
completes five (5) years of service (where a year of service
is determined in the same manner as the determination of a year of
Vesting Service under the provisions of The PNC Financial Services
Group, Inc. Pension Plan) with the Corporation and (b) for a
reason other than termination by reason of Optionee’s death
or by the Corporation for Cause or, unless the Committee determines
otherwise, termination in connection with a divestiture of assets
or a divestiture of one or more Subsidiaries.
A.28 “Right(s)” means stock
appreciation right(s) in accordance with the terms of Article 7 of
the Plan.
A.29 “SEC” means the U.S.
Securities and Exchange Commission.
A.30 “Subsidiary” has the
meaning set forth in the Plan; provided, however, that in order to
be a “Subsidiary” for purposes of the Agreement the
entity must also satisfy the definition of “service
recipient” under Section 409A of the Internal Revenue
Code of 1986 as amended.
A.31 “Termination Date”
means Optionee’s last date of employment with the
Corporation. If Optionee is employed by a Subsidiary that ceases to
be a Subsidiary of PNC and Optionee does not continue to be
employed by PNC or a Subsidiary, then for purposes of the Reload
Agreement, Optionee’s employment with the Corporation
terminates effective at the time this occurs.
A.32 “Total and Permanent
Disability” means, unless the Committee determines otherwise,
Optionee’s disability as determined to be total and permanent
by the Corporation for purposes of the Reload Agreement.
Reload Option Agreement Form
for
Original Options Granted
2001-2004
THE PNC FINANCIAL SERVICES
GROUP, INC.
1997 LONG-TERM INCENTIVE
AWARD PLAN
RELOAD NONSTATUTORY STOCK
OPTION AGREEMENT
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| OPTIONEE: |
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«EMPLOYEE» |
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| ORIGINAL
OPTION GRANT DATE: |
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| RELOAD
OPTION GRANT DATE: |
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| RELOAD
OPTION PRICE: |
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$ per
share |
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| COVERED
SHARES: |
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Terms defined in The PNC Financial
Services Group, Inc. 1997 Long-Term Incentive Award Plan as amended
from time to time (“Plan”) are used in this reload
nonstatutory stock option agreement (“Reload
Agreement”) as defined in the Plan unless otherwise defined
in the Reload Agreement or an Annex thereto. In the Reload
Agreement, “PNC” means The PNC Financial Services
Group, Inc. and “Corporation” means PNC and its
Subsidiaries. For certain definitions, see Annex A attached hereto
and incorporated herein by reference. Headings used in the Reload
Agreement and in the Annexes hereto are for convenience only and
are not part of the Reload Agreement and Annexes.
1. Grant of Reload Option .
Optionee, having exercised all or a portion of the Option granted
to Optionee under the Plan as of
, 200 (the “Original Option”) while
employed by the Corporation and in a manner specified in the
Addendum to the Original Option stock option agreement, is hereby
granted, pursuant to the Plan and subject to the terms of the
Reload Agreement, a Reload Option (“Reload Option”) to
purchase from PNC that number of shares of PNC common stock
specified above as the “Covered Shares,” exercisable at
the Reload Option Price.
2. Terms of the Reload Option
.
| 2.1 |
Type of Option . The Reload Option is intended to be a
Nonstatutory Stock Option without Rights. |
2.2 Reload Option Period . The
Reload Option is exercisable in whole or in part as to any Covered
Shares as to which it is outstanding and has become exercisable
(“vested”) at any time and from time to time through
the Expiration Date.
To the extent that the Reload Option is
otherwise outstanding, the Reload Option will vest as to Covered
Shares as set forth in this Section 2.2.
(a) Unless the Reload Option
has become vested pursuant to Section 2.2(b), 2.2(c), 2.2(d),
2.2(e) or 2.2(f), the Reload Option will become exercisable
(“vest”) commencing on the first (1 st ) anniversary date of the Reload
Option Grant Date provided that Optionee is still an
employee of the Corporation on such vesting date or is a Retiree
whose Retirement date occurred on or after the six (6) month
anniversary date of the Reload Option Grant Date.
(b) If Optionee’s employment is
terminated by the Corporation by reason of Total and Permanent
Disability and not for Cause, the Reload Option will vest as to all
outstanding Covered Shares as to which it has not otherwise vested
commencing on Optionee’s Termination Date.
(c) If Optionee’s employment with
the Corporation is terminated by reason of Optionee’s death,
the Reload Option will immediately vest as to all outstanding
Covered Shares as to which it has not otherwise vested, and the
Reload Option may be exercised by Optionee’s properly
designated beneficiary, by the person or persons entitled to do so
under Optionee’s will, or by the person or persons entitled
to do so under the applicable laws of descent and
distribution.
(f) If, after the occurrence of a CIC
Triggering Event but prior to the occurrence of a CIC Failure or of
the Change in Control triggered by the CIC Triggering Event,
Optionee’s employment with the Corporation is terminated by
the Corporation without Cause or by Optionee with Good Reason, the
Reload Option will vest as to all outstanding Covered Shares as to
which it has not otherwise vested commencing on Optionee’s
Termination Date.
(e) Notwithstanding any other provision
of this Section 2.2, to the extent that the Reload Option is
outstanding but not yet fully vested at the time a Change in
Control occurs, the Reload Option will vest as to all then
outstanding Covered Shares as to which it has not otherwise vested,
effective as of the day immediately prior to the occurrence of the
Change in Control, provided that , at the time the Change in
Control occurs, Optionee is either (i) an employee of the
Corporation or (ii) a former employee of the Corporation whose
unvested Reload Option, or portion thereof, is then outstanding and
continues to qualify for vesting pursuant to the terms of
Section 2.2(a).
(f) The Committee or its delegate may in
their sole discretion, but need not, accelerate the vesting date of
all or any portion of the Reload Option subject, if applicable, to
such limitations as may be set forth in the Plan.
If Optionee is employed by a Subsidiary
that ceases to be a Subsidiary of PNC and Optionee does not
continue to be employed by PNC or a Subsidiary, then for purposes
of the Reload Agreement, Optionee’s employment with the
Corporation terminates effective at the time this
occurs.
2.3 Nontransferability; Designation
of Beneficiary; Payment to Legal Representative .
(a) The Reload Option is not
transferable or assignable by Optionee.
(b) During Optionee’s lifetime,
the Reload Option may be exercised only by Optionee or, in the
event of Optionee’s legal incapacity, by his or her legal
representative, as determined in good faith by PNC.
(c) During Optionee’s lifetime,
Optionee may file with PNC, at such address and in such manner as
PNC may from time to time direct, on a form to be provided by PNC
on request, a designation of a beneficiary or beneficiaries (a
“properly designated beneficiary”) to hold and exercise
Optionee’s stock options, to the extent outstanding and
exercisable, in accordance with their respective stock option
agreements and the Plan in the event of Optionee’s
death.
(d) If Optionee dies prior to the full
exercise or expiration of the Reload Option and has not filed a
designation of beneficiary form as specified above, the Reload
Option will be held and may be exercised by the person or persons
entitled to do so under Optionee’s will or under the
applicable laws of descent and distribution, as to which PNC will
be entitled to rely in good faith on instructions from
Optionee’s executor, administrator, or other legal
representative.
(e) Any delivery of shares or other
payment made or action taken hereunder by PNC in good faith to or
on the instructions of Optionee’s executor, administrator, or
other legal representative shall extinguish all right to payment
hereunder.
3. Capital Adjustments . Upon the
occurrence of a corporate transaction or transactions (including,
without limitation, stock dividends, stock splits, spin-offs,
split-offs, recapitalizations, mergers, consolidations or
reorganizations of or by PNC (each, a “Corporate
Transaction”)), the Committee shall make those adjustments,
if any, in the number, class or kind of Covered Shares as to which
the Reload Option is outstanding and has not yet been exercised and
in the Reload Option Price that it deems appropriate in its
discretion to reflect the Corporate Transaction(s) such that the
rights of Optionee are neither enlarged nor diminished as a result
of such Corporate Transaction or Transactions, including
without limitation cancellation of the
Reload Option immediately prior to the effective time of the
Corporate Transaction and payment, in cash, in consideration
therefor, of an amount equal to the product of (a) the excess,
if any, of the per share value of the consideration payable to a
PNC common shareholder in connection with such Corporate
Transaction over the Reload Option Price and (b) the total
number of Covered Shares subject to the Reload Option that were
outstanding and unexercised immediately prior to the effective time
of the Corporate Transaction.
All determinations hereunder shall be
made by the Committee in its sole discretion and shall be final,
binding and conclusive for all purposes on all parties, including
without limitation the holder of the Reload Option.
No fractional shares will be issued on
exercise of the Reload Option. PNC shall determine the manner in
which any fractional shares will be treated.
4. Exercise of Reload Option
.
4.1 Notice and Effective Date .
The Reload Option may be exercised, in whole or in part, by
delivering to PNC written notice of such exercise, in such form as
PNC may from time to time prescribe, accompanied by full payment of
the aggregate Reload Option Price with respect to that portion of
the Reload Option being exercised and satisfaction of any amounts
required to be withheld pursuant to applicable tax laws in
connection with such exercise.
In addition, notwithstanding Sections
4.2 and 4.3, Optionee may elect to complete his or her Reload
Option exercise through a brokerage service/margin account pursuant
to the broker-assisted cashless option exercise procedure under
Regulation T of the Board of Governors of the Federal Reserve
System and in such manner as may be permitted by PNC from time to
time consistent with said Regulation T.
The effective date of such exercise will
be the Exercise Date. Until PNC notifies Optionee to the contrary,
the form attached to the Reload Agreement as Annex B shall be used
to exercise the Reload Option and the form attached to the Reload
Agreement as Annex C shall be used to make tax payment
elections.
In the event that the Reload Option is
exercised, pursuant to Section 2.3, by any person or persons
other than Optionee, such notice of exercise must be accompanied by
appropriate proof of the derivative right of such person or persons
to exercise the Reload Option.
4.2 Payment of Reload Option
Price . Upon exercise of the Reload Option, in whole or in
part, Optionee may pay the aggregate Reload Option Price
(a) in cash or (b) if and to the extent then permitted by
PNC, using whole shares of PNC common stock (either by physical
delivery to PNC of certificates for the shares or through
PNC’s share attestation procedure) having an aggregate Fair
Market Value on the Exercise Date not exceeding that portion of the
aggregate Reload Option Price being paid using such shares, or
through a combination of cash and shares of PNC common stock;
provided , however , that shares of PNC common stock
used to pay all or any portion of the aggregate Reload Option Price
may not be subject to any contractual restriction, pledge or other
encumbrance and must be shares that have been owned by Optionee for
at least six (6) months prior to the Exercise Date and, in the
case of restricted stock, for which it has been at least six
(6) months since the restrictions lapsed, or, in either case,
for such other period as may be specified or permitted by
PNC.
4.3 Payment of Taxes . Optionee
may elect to satisfy any or all applicable federal, state, or local
tax liabilities incurred in connection with exercise of the Reload
Option (a) by payment of cash, (b) if and to the extent
then permitted by PNC and subject to such terms and conditions as
PNC may from time to time establish, through the retention by PNC
of sufficient whole shares of PNC common stock otherwise issuable
upon such exercise to satisfy the minimum amount of taxes required
to be withheld in connection with such exercise, or (c) if and
to the extent then permitted by PNC and subject to such terms and
conditions as PNC may from time to time establish, using whole
shares of PNC common stock (either by physical delivery to PNC of
certificates for the shares or through PNC’s share
attestation procedure) that are not subject to any contractual
restriction, pledge or other encumbrance and that have been owned
by Optionee for at least six (6) months prior to the Exercise
Date and, in the case of restricted stock, for which it has been at
least six (6) months since the restrictions lapsed, or, in
either case, for such other period as may be specified or permitted
by PNC.
For purposes of this Section 4.3,
shares of PNC common stock that are used to satisfy applicable
taxes will be valued at their Fair Market Value on the date the tax
withholding obligation arises. In no event will the Fair Market
Value of the shares of PNC common stock otherwise issuable upon
exercise of the Reload Option but retained pursuant to
Section 4.3(b) exceed the minimum amount of taxes required to
be withheld in connection with the Reload Option
exercise.
4.4 Effect . The exercise, in
whole or in part, of the Reload Option will cause a reduction in
the number of unexercised Covered Shares as to which the Reload
Option is outstanding equal to the number of shares of PNC common
stock with respect to which the Reload Option is
exercised.
5. Restrictions on Exercise and on
Shares Issued on Exercise . Notwithstanding any other provision
of the Reload Agreement, the Reload Option may not be exercised at
any time that PNC does not have in effect a registration statement
under the Securities Act of 1933 as amended relating to the offer
of shares of PNC common stock under the Plan unless PNC agrees to
permit such exercise. Upon the issuance of any shares of PNC common
stock pursuant to exercise of the Reload Option at a time when such
a registration statement is not in effect, Optionee will, upon the
request of PNC, agree in writing that Optionee is acquiring such
shares for investment only and not with a view to resale and that
Optionee will not sell, pledge, or otherwise dispose of such shares
unless and until (a) PNC is furnished with an opinion of
counsel to the effect that registration of such shares pursuant to
the Securities Act of 1933 as amended is not required by that Act
or by rules and regulations promulgated thereunder, (b) the
staff of the SEC has issued a no-action letter with respect to such
disposition, or (c) such registration or notification as is,
in the opinion of counsel for PNC, required for the lawful
disposition of such shares has been filed and has become effective;
provided , however , that PNC is not obligated hereby
to file any such registration or notification. PNC may place a
legend embodying such restrictions on the certificate(s) evidencing
such shares.
6. Rights as Shareholder .
Optionee will have no rights as a shareholder with respect to any
Covered Shares until the Exercise Date and then only with respect
to those shares of PNC common stock issued upon such exercise of
the Reload Option and not retained as provided in
Section 4.3.
7. Employment . Neither the
granting of the Reload Option evidenced by the Reload Agreement nor
any term or provision of the Reload Agreement will constitute or be
evidence of any understanding, expressed or implied, on the part of
PNC or any Subsidiary to employ Optionee for any period.
8. Subject to the Plan . The
Reload Option evidenced by the Reload Agreement and the exercise
thereof are subject to the terms and conditions of the Plan, which
is incorporated by reference herein and made a part hereof, but the
terms of the Plan will not be considered an enlargement of any
benefits under the Reload Agreement. In addition, the Reload Option
is subject to any rules and regulations promulgated by or under the
authority of the Committee.
9. Optionee Covenants
.
9.1 General . Optionee and PNC
acknowledge and agree that Optionee has received adequate
consideration with respect to enforcement of the provisions of
Sections 9 and 10 hereof by virtue of receiving this Reload Option,
which gives Optionee an opportunity potentially to benefit from an
increase in the future value of PNC common stock (regardless of
whether any such benefit is ultimately realized); that such
provisions are reasonable and properly required for the adequate
protection of the business of the Corporation; and that enforcement
of such provisions will not prevent Optionee from earning a
living.
9.2 Non-Solicitation; No-Hire .
Optionee agrees to comply with the provisions of subsections
(a) and (b) of this Section 9.2 while employed by
the Corporation and for a period of twelve (12) months after
Optionee’s Termination Date regardless of the reason for such
termination of employment.
(b) Non-Solicitation . Optionee
shall not, directly or indirectly, either for Optionee’s own
benefit or purpose or for the benefit or purpose of any Person
other than PNC or any Subsidiary, solicit, call on, do business
with, or actively interfere with PNC’s or any
Subsidiary’s relationship with, or attempt to divert or
entice away, any Person that Optionee should reasonably know
(i) is a customer of PNC or any Subsidiary for which PNC or
any Subsidiary provides any services as of the Termination Date, or
(ii) was a customer of PNC or any Subsidiary for which PNC or
any Subsidiary provided any services at any time during the twelve
(12) months preceding the Termination Date, or (iii) was,
as of the Termination Date, considering retention of PNC or any
Subsidiary to provide any services.
(b) No-Hire . Optionee shall not,
directly or indirectly, either for Optionee’s own benefit or
purpose or for the benefit or purpose of any Person other than PNC
or any Subsidiary, employ or offer to employ, call on, or actively
interfere with PNC’s or any Subsidiary’s relationship
with, or attempt to divert or entice away, any employee of the
Corporation, nor shall Optionee assist any other Person in such
activities.
Notwithstanding the above, if
Optionee’s employment with the Corporation is terminated by
the Corporation without Cause or by Optionee with Good Reason and
such Termination Date occurs during a Coverage Period (either as
Coverage Period is defined in Section A.11 of Annex A or, if
Optionee was a party to a CIC Severance Agreement that was in
effect at the time of such termination of employment, as Coverage
Period is defined in such CIC Severance Agreement, if longer), then
commencing immediately after such Termination Date, the provisions
of subsections (a) and (b) of this Section 9.2 shall
no longer apply and shall be replaced with the following subsection
(c):
(c) No-Hire . Optionee agrees
that Optionee shall not, for a period of twelve (12) months
after the Termination Date, employ or offer to employ, solicit,
actively interfere with PNC’s or any PNC affiliate’s
relationship with, or attempt to divert or entice away, any officer
of PNC or any PNC affiliate.
9.3 Confidentiality . During
Optionee’s employment with the Corporation, and thereafter
regardless of the reason for termination of such employment,
Optionee will not disclose or use in any way any confidential
business or technical information or trade secret acquired in the
course of such employment, all of which is the exclusive and
valuable property of the Corporation whether or not conceived of or
prepared by Optionee, other than (a) information generally
known in the Corporation’s industry or acquired from public
sources, (b) as required in the course of employment by the
Corporation, (c) as required by any court, supervisory
authority, administrative agency or applicable law, or
(d) with the prior written consent of PNC.
9.4 Ownership of Inventions .
Optionee shall promptly and fully disclose to PNC any and all
inventions, discoveries, improvements, ideas or other works of
inventorship or authorship, whether or not patentable, that have
been or will be conceived and/or reduced to practice by Optionee
during the term of Optionee’s employment with the
Corporation, whether alone or with others, and that are
(a) related directly or indirectly to the business or
activities of PNC or any Subsidiary or (b) developed with the
use of any time, material, facilities or other resources of PNC or
any Subsidiary (“Developments”). Optionee agrees to
assign and hereby does assign to PNC or its designee all of
Optionee’s right, title and interest, including copyrights
and patent rights, in and to all Developments. Optionee shall
perform all actions and execute all instruments that PNC or any
Subsidiary shall deem necessary to protect or record PNC’s or
its designee’s interests in the Developments. The obligations
of this Section 9.4 shall be performed by Optionee without
further compensation and shall continue beyond the Termination
Date.
10. Enforcement Provisions .
Optionee understands and agrees to the following provisions
regarding enforcement of the Reload Agreement.
10.1 Governing Law and
Jurisdiction . The Reload Agreement is governed by and
construed under the laws of the Commonwealth of Pennsylvania,
without reference to its conflict of laws provisions. Any dispute
or claim arising out of or relating to the Reload Agreement or
claim of breach hereof shall be brought exclusively in the federal
court for the Western District of Pennsylvania or in the Court of
Common Pleas of Allegheny County, Pennsylvania. By execution of the
Reload Agreement, Optionee and PNC hereby consent to the exclusive
jurisdiction of such courts, and waive any right to challenge
jurisdiction or venue in such courts with regard to any suit,
action, or proceeding under or in connection with the Reload
Agreement.
10.2 Equitable Remedies . A
breach of the provisions of any of Sections 9.2, 9.3 or 9.4 will
cause the Corporation irreparable harm, and the Corporation will
therefore be entitled to issuance of immediate, as well as
permanent, injunctive relief restraining Optionee, and each and
every person and entity acting in concert or participating with
Optionee, from initiation and/or continuation of such
breach.
10.3 Tolling Period . If it
becomes necessary or desirable for the Corporation to seek
compliance with the provisions of Section 9.2 by legal
proceedings, the period during which Optionee shall comply with
said provisions will extend for a period of twelve (12) months
from the date the Corporation institutes legal proceedings for
injunctive or other relief.
10.4 No Waiver . Failure of PNC
to demand strict compliance with any of the terms, covenants or
conditions of the Reload Agreement shall not be deemed a waiver of
such term, covenant or condition, nor shall any waiver or
relinquishment of any such term, covenant or condition on any
occasion or on multiple occasions be deemed a waiver or
relinquishment of such term, covenant or condition.
10.5 Severability . The
restrictions and obligations imposed by Sections 9.2, 9.3 and 9.4
are separate and severable, and it is the intent of Optionee and
PNC that if any restriction or obligation imposed by any of these
provisions is deemed by a court of competent jurisdiction to be
void for any reason whatsoever, the remaining provisions,
restrictions and obligations shall remain valid and binding upon
Optionee.
10.6 Reform . In the event any of
Sections 9.2, 9.3 and 9.4 are determined by a court of competent
jurisdiction to be unenforceable because unreasonable either as to
length of time or area to which said restriction applies, it is the
intent of Optionee and PNC that said court reduce and reform the
provisions thereof so as to apply the greatest limitations
considered enforceable by the court.
10.7 Waiver of Jury Trial . Each
of Optionee and PNC hereby waives any right to trial by jury with
regard to any suit, action or proceeding under or in connection
with any of Sections 9.2, 9.3 and 9.4.
10.8 Applicable Law .
Notwithstanding anything in the Reload Agreement, PNC will not be
required to comply with any term, covenant or condition of the
Reload Agreement if and to the extent prohibited by law, including
but not limited to federal banking and securities regulations, or
as otherwise directed by one or more regulatory agencies having
jurisdiction over PNC or any of its subsidiaries. Further, to the
extent, if any, applicable to Optionee, Optionee agrees to
reimburse PNC for any amounts Optionee may be required to reimburse
the Corporation pursuant to Section 304 of the Sarbanes-Oxley
Act of 2002, and agrees that PNC need not comply with any term,
covenant or condition of the Reload Agreement to the extent that
doing so would require that Optionee reimburse PNC or its
subsidiaries for such amounts pursuant to Section 304 of the
Sarbanes-Oxley Act of 2002.
10.9. Compliance with Internal
Revenue Code Section 409A . It is the intention of the
parties that the Reload Option and the Agreement comply with the
provisions of Section 409A of the Internal Revenue Code of
1986 as amended, and the rules and regulations promulgated
thereunder, (“Section 409A”) to the extent, if any,
that such provisions are applicable to the Agreement, and the
Agreement will be administered by PNC in a manner consistent with
this intent.
If any payments or benefits hereunder
may be deemed to constitute nonconforming deferred compensation
subject to taxation under the provisions of Section 409A,
Optionee agrees that PNC may, without the consent of Optionee,
modify the Agreement and the Reload Option to the extent and in the
manner PNC deems necessary or advisable or take such other action
or actions, including an amendment or action with retroactive
effect, that PNC deems appropriate in order either to preclude any
such payments or benefits from being deemed “deferred
compensation” within the meaning of Section 409A or to
provide such payments or benefits in a manner that complies with
the provisions of Section 409A such that they will not be
taxable thereunder.
11. No Additional Reload Option .
Exercise of the Reload Option will not entitle Optionee to receive
an additional reload option, regardless of the manner in which the
Reload Option is exercised.
12. Effective Date . If Optionee
does not accept the grant of the Reload Option by executing and
delivering a copy of the Reload Agreement to PNC, without altering
or changing the terms of the Reload Agreement in any way, within
thirty (30) days of receipt by Optionee of a copy of the
Reload Agreement, PNC may, in its sole discretion, withdraw its
offer and cancel the Reload Option and the Reload Agreement at any
time prior to Optionee’s delivery to PNC of a copy of the
Reload Agreement executed by Optionee.
Otherwise, upon execution and delivery
of the Reload Agreement by both PNC and Optionee and, in the event
that Optionee is subject to the reporting requirements of
Section 16(a) of the Exchange Act with respect to PNC
securities, the filing with and acceptance by the SEC of a Form 4
reporting the Reload Option Grant, the Reload Option and the Reload
Agreement are effective as of the Reload Option Grant
Date.
I N W
ITNESS W HEREOF , PNC has caused the
Reload Agreement to be signed on its behalf effective as of the
Reload Option Grant Date.
|
|
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| THE PNC FINANCIAL SERVICES GROUP, INC. |
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| By: |
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|
|
Chairman
and Chief Executive Officer |
|
| ATTEST: |
|
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| By: |
|
|
|
|
Corporate
Secretary |
Accepted and agreed to as of the Reload
Option Grant Date
|
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| Optionee |
|
| Annex A -
Certain Definitions |
| Annex B -
Notice of Exercise |
| Annex C -
Tax Payment Election Form |
ANNEX A
CERTAIN
DEFINITIONS
* * *
Except where the context otherwise
indicates, the following definitions apply to the Reload
Nonstatutory Stock Option Agreement (“Reload
Agreement”) to which this Annex A is attached.
A.1 “Board” means the Board
of Directors of PNC.
A.2 “Cause.”
(a) “Cause” during a
Coverage Period . If the termination of Optionee’s
employment with the Corporation occurs during a Coverage Period,
then, for purposes of the Reload Agreement, “Cause”
means:
(i) the willful and continued failure of
Optionee to substantially perform Optionee’s duties with the
Corporation (other than any such failure resulting from incapacity
due to physical or mental illness), after a written demand for
substantial performance is delivered to Optionee by the Board or
the CEO that specifically identifies the manner in which the Board
or the CEO believes that Optionee has not substantially performed
Optionee’s duties; or
(ii) the willful engaging by Optionee in
illegal conduct or gross misconduct that is materially and
demonstrably injurious to PNC or any Subsidiary.
For purposes of the preceding clauses
(i) and (ii), no act or failure to act, on the part of
Optionee, shall be considered willful unless it is done, or omitted
to be done, by Optionee in bad faith and without reasonable belief
that Optionee’s action or omission was in the best interests
of the Corporation. Any act, or failure to act, based upon the
instructions or prior approval of the Board, the CEO or
Optionee’s superior or based upon the advice of counsel for
the Corporation, shall be conclusively presumed to be done, or
omitted to be done, by Optionee in good faith and in the best
interests of the Corporation.
The cessation of employment of Optionee
will be deemed to be a termination of Optionee’s employment
with the Corporation for Cause for purposes of the Reload Agreement
only if and when there shall have been delivered to Optionee, as
part of the notice of Optionee’s termination, a copy of a
resolution duly adopted by the affirmative vote of not less than a
majority of the entire membership of the Board, at a Board meeting
called and held for the purpose of considering such termination,
finding on the basis of clear and convincing evidence that, in the
good faith opinion of the Board, Optionee is guilty of conduct
described in clause (i) or (ii) above and, in either
case, specifying the particulars thereof in detail. Such resolution
shall be adopted only after (1) reasonable notice of such
Board meeting is provided to Optionee, together with written notice
that PNC believes that Optionee is guilty of conduct described in
clause (i) or (ii) above and, in either case, specifying
the particulars thereof in detail, and (2) Optionee is given
an opportunity, together with counsel, to be heard before the
Board.
(b) “Cause” other than
during a Coverage Period . If the termination of
Optionee’s employment with the Corporation occurs other than
during a Coverage Period, then, for purposes of the Reload
Agreement, “Cause” means:
(i) the willful and continued failure of
Optionee to substantially perform Optionee’s duties with the
Corporation (other than any such failure resulting from incapacity
due to physical or mental illness), after a written demand for
substantial performance is delivered to Optionee by PNC that
specifically identifies the manner in which it is believed that
Optionee has not substantially performed Optionee’s
duties;
(ii) a material breach by Optionee of
(1) any code of conduct of PNC or a Subsidiary or
(2) other written policy of PNC or a Subsidiary, in either
case required by law or established to maintain compliance with
applicable law;
(iii) any act of fraud,
misappropriation, material dishonesty, or embezzlement by Optionee
against PNC or a Subsidiary or any client or customer of PNC or a
Subsidiary;
(iv) any conviction (including a plea of
guilty or of nolo contendere ) of Optionee for, or entry by
Optionee into a pre-trial disposition with respect to, the
commission of a felony; or
(v) entry of any order against Optionee,
by any governmental body having regulatory authority with respect
to the business of PNC or any Subsidiary, that relates to or arises
out of Optionee’s employment or other service relationship
with the Corporation.
The cessation of employment of Optionee
will be deemed to have been a termination of Optionee’s
employment with the Corporation for Cause for purposes of the
Reload Agreement only if and when the CEO or his or her designee
(or, if Optionee is the CEO, the Board) determines that Optionee is
guilty of conduct described in clause (i), (ii) or
(iii) above or that an event described in clause (iv) or
(v) above has occurred with respect to Optionee and, if so,
determines that the termination of Optionee’s employment with
the Corporation will be deemed to have been for Cause.
A.3 “CEO” means the chief
executive officer of PNC.
A.4 “Change in Control”
means a change of control of PNC of a nature that would be required
to be reported in response to Item 6(e) of Schedule 14A of
Regulation 14A (or in response to any similar item on any similar
schedule or form) promulgated under the Exchange Act, whether or
not PNC is then subject to such reporting requirement;
provided , however , that without limitation, a
Change in Control shall be deemed to have occurred if:
(a) any Person, excluding employee
benefit plans of the Corporation, is or becomes the beneficial
owner (as defined in Rules 13d-3 and 13d-5 under the Exchange Act
or any successor provisions thereto), directly or indirectly, of
securities of PNC representing twenty percent (20%) or more of
the combined voting power of PNC’s then outstanding
securities; provided , however , that such an
acquisition of beneficial ownership representing between twenty
percent (20%) and forty percent (40%), inclusive, of such
voting power shall not be considered a Change in Control if the
Board approves such acquisition either prior to or immediately
after its occurrence;
(b) PNC consummates a merger,
consolidation, share exchange, division or other reorganization or
transaction of PNC (a “Fundamental Transaction”)
with any other corporation, other than a Fundamental Transaction
that results in the voting securities of PNC outstanding
immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into voting securities
of the surviving entity) at least sixty percent (60%) of the
combined voting power immediately after such Fundamental
Transaction of (i) PNC’s outstanding securities,
(ii) the surviving entity’s outstanding securities, or
(iii) in the case of a division, the outstanding securities of
each entity resulting from the division;
(c) the shareholders of PNC approve a
plan of complete liquidation or winding-up of PNC or an agreement
for the sale or disposition (in one transaction or a series of
transactions) of all or substantially all of PNC’s
assets;
(d) as a result of a proxy contest,
individuals who prior to the conclusion thereof constituted the
Board (including for this purpose any new director whose election
or nomination for election by PNC’s shareholders in
connection with such proxy contest was approved by a vote of at
least two-thirds (2/3rds) of the directors then still in
office who were directors prior to such proxy contest) cease to
constitute at least a majority of the Board (excluding any Board
seat that is vacant or otherwise unoccupied);
(e) during any period of twenty-four
(24) consecutive months, individuals who at the beginning of
such period constituted the Board (including for this purpose any
new director whose election or nomination for election by
PNC’s shareholders was approved by a vote of at least
two-thirds (2/3rds) of the directors then still in office who
were directors at the beginning of such period) cease for any
reason to constitute at least a majority of the Board (excluding
any Board seat that is vacant or otherwise unoccupied);
or
(f) the Board determines that a Change
in Control has occurred.
Notwithstanding anything to the contrary
herein, a divestiture or spin-off of a subsidiary or division of
PNC or any of its Subsidiaries shall not by itself constitute a
Change in Control.
A.5 “CIC Failure” means the
following:
(a) with respect to a CIC Triggering
Event described in Section A.7(a), PNC’s shareholders vote
against the transaction approved by the Board or the agreement to
consummate the transaction is terminated; or
(b) with respect to a CIC Triggering
Event described in Section A.7(b), the proxy contest fails to
replace or remove a majority of the members of the
Board.
A.6 “CIC Severance
Agreement” means the written agreement, if any, between
Optionee and PNC providing, among other things, for certain change
in control severance benefits.
A.7 “CIC Triggering Event”
means the occurrence of either of the following:
(a) the Board or PNC’s
shareholders approve a transaction described in Subsection (b)
of the definition of Change in Control contained in
Section A.4; or
(b) the commencement of a proxy contest
in which any Person seeks to replace or remove a majority of the
members of the Board.
A.8 “Committee” means the
Personnel and Compensation Committee of the Board or such person or
persons as may be designated by that committee as its
delegate.
A.9 “Competitive Activity”
means, for purposes of the Reload Agreement, any participation in,
employment by, ownership of any equity interest exceeding one
percent (1%) in, or promotion or organization of, any Person
other than PNC or any Subsidiary (1) engaged in business
activities similar to some or all of the business activities of PNC
or any Subsidiary as of Optionee’s Termination Date or
(2) engaged in business activities that Optionee knows PNC or
any Subsidiary intends to enter within the first twelve
(12) months after Optionee’s Termination Date or, if
later and if applicable, after the date specified in clause
(2) of Section A.12(i), in either case whether Optionee is
acting as agent, consultant, independent contractor, employee,
officer, director, investor, partner, shareholder, proprietor or in
any other individual or representative capacity therein.
A.10 “Corporation” means PNC
and its Subsidiaries.
A.11 “Coverage Period” means
a period (a) commencing on the earlier to occur of
(i) the date of a CIC Triggering Event and (ii) the date
of a Change in Control and (b) ending on the date that is two
(2) years after the date of the Change in Control;
provided , however , that in the event that a
Coverage Period commences on the date of a CIC Triggering Event,
such Coverage Period will terminate upon the earlier to occur of
(x) the date of a CIC Failure and (y) the date that is
two (2) years after the date of the Change in Control
triggered by the CIC Triggering Event. After the termination of any
Coverage Period, another Coverage Period will commence upon the
earlier to occur of clauses (a)(i) and (a)(ii) in the preceding
sentence.
A.12 “Detrimental Conduct”
means, for purposes of the Reload Agreement:
(i) Optionee has engaged,
without the prior written consent of PNC (at PNC’s sole
discretion), in any Competitive Activity in the continental United
States at any time during the period commencing on Optionee’s
Termination Date and extending through the first (1
st
) anniversary of the
later of (1) Optionee’s Termination Date and, if
different, (2) the first date after Optionee’s
Termination Date as of which Optionee ceases to be engaged by the
Corporation in any capacity for which Optionee receives
compensation from the Corporation, including but not limited to
acting for compensation as a consultant, independent contractor,
employee, officer, director or advisory director;
(ii) a material breach by Optionee of
(1) any code of conduct of PNC or a Subsidiary or
(2) other written policy of PNC or a Subsidiary, in either
case required by law or established to maintain compliance with
applicable law;
(iii) any act of fraud,
misappropriation, material dishonesty, or embezzlement by Optionee
against PNC or a Subsidiary or any client or customer of PNC or a
Subsidiary;
(iv) any conviction (including a plea of
guilty or of nolo contendere ) of Optionee for, or entry by
Optionee into a pre-trial disposition with respect to, the
commission of a felony that relates to or arises out of
Optionee’s employment or other service relationship with the
Corporation; or
(v) entry of any order against Optionee,
by any governmental body having regulatory authority with respect
to the business of PNC or any Subsidiary, that relates to or arises
out of Optionee’s employment or other service relationship
with the Corporation.
Optionee will be deemed to have engaged
in Detrimental Conduct for purposes of the Reload Agreement only if
and when the CEO or his or her designee (or, if Optionee is the
CEO, the Board) determines that Optionee has engaged in conduct
described in clause (i) above, that Optionee is guilty of
conduct described in clause (ii) or (iii) above, or that
an event described in clause (iv) or (v) above has
occurred with respect to Optionee and, if so, determines that
Optionee will be deemed to have engaged in Detrimental
Conduct.
A.13 “Exchange Act” means
the Securities Exchange Act of 1934 as amended, and the rules and
regulations promulgated thereunder.
A.14 “Exercise Date” means
the date (which must be a business day for PNC Bank, National
Association) on which PNC receives written notice, in such form as
PNC may from time to time prescribe, of the exercise, in whole or
in part, of the Reload Option pursuant to the terms of the Reload
Agreement, subject to full payment of the aggregate Reload Option
Price and satisfaction of all taxes required to be withheld in
connection with such exercise as provided in Sections 4.1, 4.2 and
4.3 of the Reload Agreement.
A.15 “Expiration
Date.”
(a) Expiration Date .
Expiration Date means the date on which the Reload Option expires,
which will be the tenth (10 th ) anniversary of the Original Option Grant Date unless the
Reload Option expires earlier pursuant to any of the provisions set
forth in Sections A.15(b) through A.15(d);
provided, however, if
there is a Change in Control, then notwithstanding Sections A.15(c)
and A.15(d), to the extent that the Reload Option is outstanding
and vested or vests at the time the Change in Control occurs, the
Reload Option will not expire at the earliest before the close of
business on the ninetieth (90 th ) day after the occurrence of the Change in Control (or
the tenth (10 th ) anniversary of the Original Option Grant Date if
earlier), provided that either (1) Optionee is an
employee of the Corporation at the time the Change in Control
occurs and Optionee’s employment with the Corporation is not
terminated for Cause or (2) Optionee is a former employee of
the Corporation whose Reload Option, or portion thereof, is
outstanding at the time the Change in Control occurs by virtue of
the application of one or more of the exceptions set forth in
Section A.15(c) and at least one of such exceptions is still
applicable at the time the Change in Control occurs.
In no event will the Reload
Option remain outstanding beyond the tenth (10 th ) anniversary of the Original
Option Grant Date.
(b) Termination for Cause . Upon
a termination of Optionee’s employment with the Corporation
for Cause, unless the Committee determines otherwise, the Reload
Option will expire at the close of business on Optionee’s
Termination Date with respect to all Covered Shares, whether or not
vested and whether or not Optionee is eligible to Retire or
Optionee’s employment also terminates for another
reason.
(c) Ceasing to be an Employee other
than by Termination for Cause . If Optionee ceases to be an
employee of the Corporation other than by termination of
Optionee’s employment for Cause, then unless the Committee
determines otherwise, the Reload Option will expire at the close of
business on Optionee’s Termination Date with respect to all
Covered Shares, whether or not vested, except to the extent that
the provisions set forth in subsection (1), (2), (3), (4) or
(5) of this Section A.15(c) apply to Optionee’s
circumstances and such applicable subsection specifies a later
expiration date for all or a portion of the Reload Option. If more
than one of such exceptions is applicable to the Reload Option or a
portion thereof, then the Reload Option or such portion of the
Reload Option will expire in accordance with the provisions of the
subsection that specifies the latest expiration date.
(1) Retirement
. If the termination of Optionee’s employment with the
Corporation meets the definition of Retirement, then the Reload
Option will expire on the tenth (10 th ) anniversary of the Original
Option Grant Date with respect to any Covered Shares as to which
the Reload Option is vested on the Retirement date or thereafter
vests pursuant to Section 2.2 of the Reload
Agreement.
(2) Death . If
Optionee’s employment with the Corporation is terminated by
reason of Optionee’s death, then the Reload Option will
expire on the tenth (10 th ) anniversary of the Original Option Grant
Date.
(3) Termination during
a Coverage Period without Cause or with Good Reason . If
Optionee’s employment with the Corporation is terminated
(other than by reason of Optionee’s death) during a Coverage
Period by the Corporation without Cause or by Optionee with Good
Reason, then the Reload Option will expire on the third (3
rd
) anniversary of such
Termination Date (but in no event later than on the tenth
(10 th ) anniversary of the Original Option Grant
Date).
(4) Total and Permanent
Disability . If Optionee’s employment is terminated
by the Corporation by reason of Total and Permanent Disability,
then the Reload Option will expire on the third (3
rd
) anniversary of such
Termination Date (but in no event later than on the tenth
(10 th ) anniversary of the Original Option Grant
Date).
(5) DEAP or Agreement
or Arrangement in lieu of or in addition to DEAP . In the
event that (a) Optionee’s employment with the
Corporation is terminated by the Corporation, and Optionee is
offered and has entered into the standard Waiver and Release
Agreement with PNC or a Subsidiary under an applicable PNC or
Subsidiary Displaced Employee Assistance Plan, or any successor
plan by whatever name known (“DEAP”), or Optionee is
offered and has entered into a similar waiver and release agreement
between PNC or a Subsidiary and Optionee pursuant to the terms of
an agreement or arrangement entered into by PNC or a Subsidiary and
Optionee in lieu of or in addition to the DEAP, and
(b) Optionee has not revoked such waiver and release
agreement, and (c) the time for revocation of such waiver and
release agreement by Optionee has lapsed, then the Reload Option
will expire at the close of business on the ninetieth (90
th
) day after
Optionee’s Termination Date (but in no event later than on
the tenth (10 th ) anniversary of the Original Option Grant Date) with
respect to any Covered Shares as to which the Reload Option has
already become vested; provided , however , that if
Optionee returns to employment with the Corporation no later than
said ninetieth (90 th ) day, then for purposes of the Reload Agreement, the
entire Reload Option, whether vested or unvested, will be treated
as if the termination of Optionee’s employment with the
Corporation had not occurred.
If the Reload Option is
vested and will expire on Optionee’s Termination Date unless
the conditions set forth in this Section A.15(c)(5) are met,
then such vested Reload Option or portion thereof will not
terminate on the Termination Date, but Optionee will not be able to
exercise the Reload Option after such Termination Date unless and
until all of the conditions set forth in this Section A.15(c)(5)
have been met and the Reload Option will terminate on the ninetieth
(90 th ) day after Optionee’s Termination Date (but in no
event later than on the tenth (10 th ) anniversary of the Original
Option Grant Date).
(d) Detrimental Conduct . If the
Reload Option would otherwise remain outstanding after
Optionee’s Termination Date with respect to any of the
Covered Shares pursuant to one or more of the exceptions set forth
in the subsections of Section A.15(c), then notwithstanding the
provisions of such exception or exceptions, the Reload Option will
expire on the date that PNC determines that Optionee has engaged in
Detrimental Conduct, if earlier than the date on which the Reload
Option would otherwise expire; provided , however ,
that:
(1) no determination that Optionee has
engaged in Detrimental Conduct may be made on or after the date of
Optionee’s death, and Detrimental Conduct will not apply to
conduct by or activities of beneficiaries or other successors to
the Reload Option in the event of Optionee’s
death;
(2) in the event that Optionee’s
employment with the Corporation is terminated (other than by reason
of Optionee’s death) during a Coverage Period by the
Corporation without Cause or by Optionee with Good Reason, whether
or not another exception is applicable, no determination that
Optionee has engaged in Detrimental Conduct for purposes of the
Reload Agreement may be made on or after such Termination Date;
and
(3) no determination that Optionee has
engaged in Detrimental Conduct may be made after the occurrence of
a Change in Control.
A.16 “Fair Market Value” as
it relates to a share of PNC common stock means the average of the
reported high and low trading prices of a share of PNC common stock
on the New York Stock Exchange (or such successor reporting system
as PNC may select) on the relevant date, or, if no PNC common stock
trades have been reported on such exchange for that day, the
average of such prices on the next preceding day and the next
following day for which there were reported trades.
A.17 “Good Reason”
means:
(a) the assignment to Optionee of any
duties inconsistent in any respect with Optionee’s position
(including status, offices, titles and reporting requirements),
authority, duties or responsibilities immediately prior to either
the CIC Triggering Event or the Change in Control, or any other
action by the Corporation that results in a diminution in any
respect in such position, authority, duties or responsibilities,
excluding for this purpose an isolated, insubstantial and
inadvertent action not taken in bad faith that is remedied by the
Corporation promptly after receipt of notice thereof given by
Optionee;
(b) a reduction by the Corporation in
Optionee’s annual base salary as in effect on the Original
Option Grant Date, as the same may be increased from time to
time;
(c) the Corporation’s requiring
Optionee to be based at any office or location that is more than
fifty (50) miles from Optionee’s office or location
immediately prior to either the CIC Triggering Event or the Change
in Control;
(d) the failure by the Corporation
(i) to continue in effect any bonus, stock option or other
cash or equity-based incentive plan in which Optionee participates
immediately prior to either the CIC Triggering Event or the Change
in Control that is material to Optionee’s total compensation,
unless a substantially equivalent arrangement (embodied in an
ongoing substitute or alternative plan) has been made with respect
to such plan, or (ii) to continue Optionee’s
participation in such plan (or in such substitute or alternative
plan) on a basis at least as favorable, both in terms of the amount
of benefits provided and the level of Optionee’s
participation relative to other participants, as existed
immediately prior to the CIC Triggering Event or the Change in
Control; or
(e) the failure by the Corporation to
continue to provide Optionee with benefits substantially similar to
those received by Optionee under any of the Corporation’s
pension (including, but not limited to, tax-qualified plans), life
insurance, health, accident, disability or other welfare plans in
which Optionee was participating, at costs substantially similar to
those paid by Optionee, immediately prior to the CIC Triggering
Event or the Change in Control.
A.18 “Optionee” means the
person identified as Optionee on page 1 of the Reload
Agreement.
A.19 “Original Option” has
the meaning set forth in Section 1 of the Reload
Agreement.
A.20 “Original Option Grant
Date” is the date as of which the Original Option was
granted.
A.21 “Person” has the
meaning given in Section 3(a)(9) of the Exchange Act and also
includes any syndicate or group deemed to be a person under
Section 13(d)(3) of the Exchange Act.
A.22 “PNC” means The PNC
Financial Services Group, Inc.
A.23 “Reload Option” means
the Nonstatutory Stock Option granted to Optionee in Section 1
of the Reload Agreement pursuant to which Optionee may purchase
shares of PNC common stock as provided in the Reload
Agreement.
A.24 “Reload Option Grant
Date” means the date set forth as the Reload Option Grant
Date on page 1 of the Reload Agreement, which is the date the
Original Option was exercised in accordance with the terms of the
Addendum to the Original Option stock option agreement.
A.25 “Reload Option Price”
means the dollar amount per share of PNC common stock set forth as
the Reload Option Price on page 1 of the Reload
Agreement.
A.26 “Retiree” means an
Optionee who has Retired.
A.27 “Retire” or
“Retirement” means termination of Optionee’s
employment with the Corporation (a) at any time on or after
the first day of the first month coincident with or next following
the date on which Optionee attains age fifty-five (55) and
completes five (5) years of service (where a year of service
is determined in the same manner as the determination of a year of
Vesting Service under the provisions of The PNC Financial Services
Group, Inc. Pension Plan) with the Corporation and (b) for a
reason other than termination by reason of Optionee’s death
or by the Corporation for Cause or, unless the Committee determines
otherwise, termination in connection with a divestiture of assets
or a divestiture of one or more Subsidiaries.
A.28 “Right(s)” means stock
appreciation right(s) in accordance with the terms of Article 7 of
the Plan.
A.29 “SEC” means the U.S.
Securities and Exchange Commission.
A.30 “Subsidiary” has the
meaning set forth in the Plan; provided, however, that in order to
be a “Subsidiary” for purposes of the Agreement the
entity must also satisfy the definition of “service
recipient” under Section 409A of the Internal Revenue
Code of 1986 as amended.
A.31 “Termination Date”
means Optionee’s last date of employment with the
Corporation. If Optionee is employed by a Subsidiary that ceases to
be a Subsidiary of PNC and Optionee does not continue to be
employed by PNC or a Subsidiary, then for purposes of the Reload
Agreement, Optionee’s employment with the Corporation
terminates effective at the time this occurs.
A.32 “Total and Permanent
Disability” means, unless the Committee determines otherwise,
Optionee’s disability as determined to be total and permanent
by the Corporation for purposes of the Reload Agreement.
FORM OF EMPLOYEE STOCK
OPTION
AGREEMENT –
IRELAND
THE PNC FINANCIAL SERVICES
GROUP, INC.
2006 INCENTIVE AWARD
PLAN
NONSTATUTORY STOCK OPTION
AGREEMENT
|
|
|
|
|
| OPTIONEE: |
|
«First_Name_MI» «Last_Name» |
|
|
| GRANT
DATE: |
|
___________, 200__ |
|
|
| OPTION
PRICE: |
|
$_________ per share |
|
|
| COVERED
SHARES: |
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1. Definitions; Grant of Option .
Certain terms used in this Nonstatutory Stock Option Agreement (the
“Agreement”) are defined in Annex A (which is
incorporated herein as part of the Agreement) or elsewhere in the
Agreement, and such definitions will apply except where the context
otherwise indicates.
Pursuant to The PNC Financial Services
Group, Inc. 2006 Incentive Award Plan (the “Plan”) and
subject to the terms of the Agreement, PNC hereby grants to
Optionee an Option to purchase from PNC that number of shares of
PNC common stock specified above as the “Covered
Shares,” exercisable at the Option Price.
In the Agreement, “PNC”
means The PNC Financial Services Group, Inc. and
“Corporation” means PNC and its Consolidated
Subsidiaries. Headings used in the Agreement are for convenience
only and are not part of the Agreement.
2. Terms of the Option
.
2.1 Type of Option . The Option
is intended to be a Nonstatutory Stock Option.
2.2 Option Period . Except as
otherwise set forth in Section 2.3, the Option is exercisable
in whole or in part as to any Covered Shares as to which it is
outstanding and has become exercisable (“vested”) at
any time and from time to time through the Expiration Date as
defined in Section A.18 of Annex A hereto, including the early
termination provisions set forth in said definition.
To the extent that the Option or
relevant portion thereof is outstanding, the Option will vest as to
Covered Shares as set forth in this Section 2.2.
(a) Unless the Option has become fully
vested pursuant to Section 2.2(b), 2.2(c), 2.2(d), 2.2(e), or
2.2(f), the Option will become exercisable
(“vest”):
(i) as to one-third
(1/3 rd ) of the Covered Shares (rounded down to the nearest whole
Share), commencing on the first (1 st ) anniversary date of the Grant
Date provided that Optionee is still an employee of the Corporation
on such vesting date or is a Retiree whose Retirement date occurred
on or after the six (6) month anniversary date of the Grant
Date;
(ii) as to one-half
(1/2) of the remaining Covered Shares (rounded down to the
nearest whole Share), commencing on the second (2
nd
) anniversary date of
the Grant Date provided that Optionee is still an employee
of the Corporation on such vesting date or is a Retiree whose
Retirement date occurred on or after the first (1
st
) anniversary date of
the Grant Date; and
(iii) as to the remaining
Covered Shares, commencing on the third (3 rd ) anniversary date of the Grant
Date provided that Optionee is still an employee of the Corporation
on such vesting date or is a Retiree whose Retirement date occurred
on or after the first (1 st ) anniversary date of the Grant Date.
(b) If Optionee’s employment is
terminated by the Corporation by reason of Total and Permanent
Disability and not for Cause, the Option will vest as to all
outstanding Covered Shares as to which it has not otherwise vested
commencing on Optionee’s Termination Date.
(c) If Optionee’s employment with
the Corporation is terminated by reason of Optionee’s death,
the Option will immediately vest as to all outstanding Covered
Shares as to which it has not otherwise vested, and the Option may
be exercised by Optionee’s properly designated beneficiary,
by the person or persons entitled to do so under Optionee’s
will, or by the person or persons entitled to do so under the
applicable laws of descent and distribution.
(d) If, after the occurrence of a CIC
Triggering Event but prior to the occurrence of a CIC Failure or of
the Change in Control triggered by the CIC Triggering Event,
Optionee’s employment with the Corporation is terminated by
the Corporation without Cause or by Optionee with Good Reason, the
Option will vest as to all outstanding Covered Shares as to which
it has not otherwise vested commencing on Optionee’s
Termination Date.
(e) Notwithstanding any other provision
of this Section 2.2, to the extent that the Option is
outstanding but not yet fully vested at the time a Change in
Control occurs, the Option will vest as to all then outstanding
Covered Shares as to which it has not otherwise vested, effective
as of the day immediately prior to the occurrence of the Change in
Control, provided that , at the time the Change in Control
occurs, Optionee is either (i) an employee of the Corporation
or (ii) a former employee of the Corporation whose unvested
Option, or portion thereof, is then outstanding and continues to
qualify for vesting pursuant to the terms of
Section 2.2(a)(i), (ii) and/or (iii).
(f) The Committee or its delegate may in
their sole discretion, but need not, accelerate the vesting date of
all or any portion of the Option subject, if applicable, to such
limitations as may be set forth in the Plan.
If Optionee is employed by a
Consolidated Subsidiary that ceases to be a subsidiary of PNC or
ceases to be a consolidated subsidiary of PNC under accounting
principles generally accepted in the United States of America and
Optionee does not continue to be employed by PNC or a Consolidated
Subsidiary, then for purposes of the Agreement, Optionee’s
employment with the Corporation terminates effective at the time
this occurs.
(f) For purposes of this Agreement,
Optionee’s period of employment will not include any period
of notice of termination of employment, whether expressed or
implied. Optionee’s Termination Date will mean the date upon
which Optionee ceases active employment following the provision of
such notification of termination or resignation from employment and
will be determined solely by this Agreement and without reference
to any other agreement, written or oral, including Optionee’s
contract of employment, if any.
2.3 Formal Allegations of Detrimental
Conduct . If any criminal charges are brought against Optionee
alleging the commission of a felony that relates to or arises out
of Optionee’s employment or other service relationship with
the Corporation in an indictment or in other analogous formal
charges commencing judicial criminal proceedings, the Committee may
determine to suspend the exercisability of the Option, to the
extent that the Option is then outstanding and exercisable, or to
require the escrow of the proceeds of any exercise of the Option.
Any such suspension or escrow is subject to the following
restrictions:
(a) It may last only until the earliest
to occur of the following:
(i) resolution of the criminal
proceedings in a manner that constitutes Detrimental
Conduct;
(ii) resolution of the criminal
proceeding in one of the following ways: (A) the charges as
they relate to such alleged felony have been dismissed (with or
without prejudice), (B) Optionee has been acquitted of such
alleged felony, or (C) a criminal proceeding relating to such
alleged felony has been completed without resolution (for example,
as a result of a mistrial) and the relevant time period for
recommencing criminal proceedings relating to such alleged felony
has expired without any such recommencement; and
(iii) termination of the suspension or
escrow in the discretion of the Committee; and
(b) It may be imposed only if the
Committee makes reasonable provision for the retention or
realization of the value of the Option to Optionee as if no
suspension or escrow had been imposed upon any termination of the
suspension or escrow under clauses (a)(ii) or
(iii) above.
2.4 Nontransferability; Designation
of Beneficiary; Payment to Legal Representative .
(a) The Option is not transferable or
assignable by Optionee.
(b) During Optionee’s lifetime,
the Option may be exercised only by Optionee or, in the event of
Optionee’s legal incapacity, by his or her legal
representative, as determined in good faith by PNC.
(c) During Optionee’s lifetime,
Optionee may, to the extent permitted by local law, file with PNC,
at such address and in such manner as PNC may from time to time
direct, on a form to be provided by PNC on request, a designation
of a beneficiary or beneficiaries (a “properly designated
beneficiary”) to hold and exercise Optionee’s stock
options, to the extent outstanding and exercisable, in accordance
with their respective stock option agreements and the Plan in the
event of Optionee’s death.
(d) If Optionee dies prior to the full
exercise or expiration of the Option and has not filed a
designation of beneficiary form as specified above or if such
designation is not effective under local law, the Option will be
held and may be exercised by the person or persons entitled to do
so under Optionee’s will or under the applicable laws of
descent and distribution, as to which PNC will be entitled to rely
in good faith on instructions from Optionee’s executor,
administrator, or other legal representative.
(e) Any delivery of shares or other
payment made or action taken hereunder by PNC in good faith to or
on the instructions of Optionee’s executor, administrator, or
other legal representative shall extinguish all right to payment
hereunder.
3. Capital Adjustments . Upon the
occurrence of a corporate transaction or transactions (including,
without limitation, stock dividends, stock splits, spin-offs,
split-offs, recapitalizations, mergers, consolidations or
reorganizations of or by PNC (each, a “Corporate
Transaction”)), the Committee shall make those adjustments,
if any, in the number, class or kind of Covered Shares as to which
the Option is outstanding and has not yet been exercised and in the
Option Price that it deems appropriate in its discretion to reflect
the Corporate Transaction(s) such that the rights of Optionee are
neither enlarged nor diminished as a result of such Corporate
Transaction or Transactions, including without limitation
cancellation of the Option immediately prior to the effective time
of the Corporate Transaction and payment, in cash, in consideration
therefor, of an amount equal to the product of (a) the excess,
if any, of the per share value of the consideration payable to a
PNC common shareholder in connection with such Corporate
Transaction over the Option Price and (b) the total number of
Covered Shares subject to the Option that were outstanding and
unexercised immediately prior to the effective time of the
Corporate Transaction.
All determinations hereunder shall be
made by the Committee in its sole discretion and shall be final,
binding and conclusive for all purposes on all parties, including
without limitation the holder of the Option.
No fractional shares will be issued on
exercise of the Option. PNC shall determine the manner in which any
fractional shares will be treated.
4. Exercise of Option
.
4.1 Notice and Effective Date .
The Option may be exercised, in whole or in part, by delivering to
PNC written notice of such exercise, in such form as PNC may from
time to time prescribe, and by paying in full the aggregate Option
Price with respect to that portion of the Option being exercised
and satisfying any amounts required to be withheld pursuant to
applicable tax laws in connection with such exercise.
In addition, notwithstanding Sections
4.2 and 4.3, Optionee may elect to complete his or her Option
exercise through a brokerage service/margin account pursuant to the
broker-assisted cashless option exercise procedure under Regulation
T of the Board of Governors of the Federal Reserve System and in
such manner as may be permitted by PNC from time to time consistent
with said Regulation T.
The effective date of such exercise will
be the Exercise Date. Until PNC notifies Optionee to the contrary,
the form attached to the Agreement as Annex B shall be used to
exercise the Option and the form attached to the Agreement as Annex
C shall be used to make tax payment elections.
In the event that the Option is
exercised, pursuant to Section 2.4, by any person or persons
other than Optionee, such notice of exercise must be accompanied by
appropriate proof of the derivative right of such person or persons
to exercise the Option.
4.2 Payment of Option Price .
Upon exercise of the Option, in whole or in part, Optionee may pay
the aggregate Option Price (a) in cash or (b) if and to
the extent then permitted by PNC, using whole shares of PNC common
stock (either by physical delivery to PNC of certificates for the
shares or through PNC’s share attestation procedure) having
an aggregate Fair Market Value on the Exercise Date not exceeding
that portion of the aggregate Option Price being paid using such
shares, or through a combination of cash and shares of PNC common
stock; provided, however , that shares of PNC common stock
used to pay all or any portion of the aggregate Option Price may
not be subject to any contractual restriction, pledge or other
encumbrance and must be shares that have been owned by Optionee for
at least six (6) months prior to the Exercise Date and, in the
case of restricted stock, for which it has been at least six
(6) months since the restrictions lapsed, or, in either case,
for such other period as may be specified or permitted by
PNC.
4.3 Payment of Withholding Taxes
. Optionee may elect to satisfy any Withholding Taxes (a) by
payment of cash, (b) if and to the extent then permitted by
PNC and subject to such terms and conditions as PNC may from time
to time establish, through the retention by PNC of sufficient whole
shares of PNC common stock otherwise issuable upon such exercise to
satisfy the minimum amount of Withholding Taxes, or (c) if and
to the extent then permitted by PNC and subject to such terms and
conditions as PNC may from time to time establish, using whole
shares of PNC common stock (either by physical delivery to PNC of
certificates for the shares or through PNC’s share
attestation procedure) that are not subject to any contractual
restriction, pledge or other encumbrance and that have been owned
by Optionee for at least six (6) months prior to the Exercise
Date and, in the case of restricted stock, for which it has been at
least six (6) months since the restrictions lapsed, or, in
either case, for such other period as may be specified or permitted
by PNC.
For purposes of this Section 4.3,
shares of PNC common stock that are used to satisfy applicable
taxes will be valued at their Fair Market Value on the date the tax
withholding obligation arises. In no event will the Fair Market
Value of the shares of PNC common stock otherwise issuable upon
exercise of the Option but retained pursuant to Section 4.3(b)
exceed the minimum amount of Withholding Taxes required to be
withheld in connection with the Option exercise.
4.4 Effect . The exercise, in
whole or in part, of the Option will cause a reduction in the
number of unexercised Covered Shares as to which the Option is
outstanding equal to the number of shares of PNC common stock with
respect to which the Option is exercised.
5. Restrictions on Exercise and on
Shares Issued on Exercise . Notwithstanding any other provision
of the Agreement, the Option may not be exercised at any time that
PNC does not have in effect a registration statement under the
Securities Act of 1933 as amended relating to the offer of shares
of PNC common stock under the Plan unless PNC agrees to permit such
exercise. Upon the issuance of any shares of PNC common stock
pursuant to exercise of the Option at a time when such a
registration statement is not in effect, Optionee will, upon the
request of PNC, agree in writing that Optionee is acquiring such
shares for investment only and not with a view to resale and that
Optionee will not sell, pledge, or otherwise dispose of such shares
unless and until (a) PNC is furnished with an opinion of
counsel to the effect that registration of such shares pursuant to
the Securities Act of 1933 as amended is not required by that Act
or by rules and regulations promulgated thereunder, (b) the
staff of the SEC has issued a no-action letter with respect to such
disposition, or (c) such registration or notification as is,
in the opinion of counsel for PNC, required for the lawful
disposition of such shares has been filed and has become effective;
provided, however , that PNC is not obligated hereby to file
any such registration or notification. PNC may place a legend
embodying such restrictions on the certificate(s) evidencing such
shares.
6. Rights as Shareholder .
Optionee will have no rights as a shareholder with respect to any
Covered Shares until the Exercise Date and then only with respect
to those shares of PNC common stock issued upon such exercise of
the Option and not retained as provided in
Section 4.3.
7. Employment . Neither the
granting of the Option evidenced by the Agreement nor any term or
provision of the Agreement will constitute or be evidence of any
understanding, expressed or implied, on the part of PNC or any
subsidiary to employ Optionee for any period.
8. Subject to the Plan . The
Option evidenced by the Agreement and the exercise thereof are
subject to the terms and conditions of the Plan, which is
incorporated by reference herein and made a part hereof, but the
terms of the Plan will not be considered an enlargement of any
benefits under the Agreement. In addition, the Option is subject to
any rules and regulations promulgated by or under the authority of
the Committee.
9. Optionee Covenants
.
9.1 General . Optionee and PNC
acknowledge and agree that Optionee has received adequate
consideration with respect to enforcement of the provisions of
Sections 9 and 10 hereof by virtue of receiving this Option, which
gives Optionee an opportunity potentially to benefit from an
increase in the future value of PNC common stock (regardless of
whether any such benefit is ultimately realized); that such
provisions are reasonable and properly required for the adequate
protection of the business of PNC and its subsidiaries; and that
enforcement of such provisions will not prevent Optionee from
earning a living.
9.2 Non-Solicitation; No-Hire .
Optionee agrees to comply with the provisions of subsections
(a) and (b) of this Section 9.2 while employed by
the Corporation and for a period of twelve (12) months after
Optionee’s Termination Date regardless of the reason for such
termination of employment.
(a) Non-Solicitation . Optionee
shall not, directly or indirectly, either for Optionee’s own
benefit or purpose or for the benefit or purpose of any Person
other than PNC or any of its subsidiaries, solicit, call on, do
business with, or actively interfere with PNC’s or any
subsidiary’s relationship with, or attempt to divert or
entice away, any Person that Optionee should reasonably know
(i) is a customer of PNC or any subsidiary for which PNC or
any subsidiary provides any services as of the Termination Date, or
(ii) was a customer of PNC or any subsidiary for which PNC or
any subsidiary provided any services at any time during the twelve
(12) months preceding the Termination Date, or (iii) was,
as of the Termination Date, considering retention of PNC or any
subsidiary to provide any services.
(b) No-Hire . Optionee shall not,
directly or indirectly, either for Optionee’s own benefit or
purpose or for the benefit or purpose of any Person other than PNC
or any of its subsidiaries, employ or offer to employ, call on, or
actively interfere with PNC’s or any subsidiary’s
relationship with, or attempt to divert or entice away, any
employee of PNC or any of its subsidiaries, nor shall Optionee
assist any other Person in such activities.
Notwithstanding the above, if
Optionee’s employment with the Corporation is terminated by
the Corporation without Cause or by Optionee with Good Reason and
such Termination Date occurs during a Coverage Period (either as
Coverage Period is defined in Section A.13 of Annex A or, if
Optionee was a party to a CIC Severance Agreement that was in
effect at the time of such termination of employment, as Coverage
Period is defined in such CIC Severance Agreement, if longer), then
commencing immediately after such Termination Date, the provisions
of subsections (a) and (b) of this Section 9.2 shall
no longer apply and shall be replaced with the following
subsection (c):
(c) No-Hire . Optionee agrees
that Optionee shall not, for a period of twelve (12) months
after the Termination Date, employ or offer to employ, solicit,
actively interfere with PNC’s or any PNC affiliate’s
relationship with, or attempt to divert or entice away, any officer
of PNC or any PNC affiliate.
9.3 Confidentiality . During
Optionee’s employment with the Corporation, and thereafter
regardless of the reason for termination of such employment,
Optionee will not disclose or use in any way any confidential
business or technical information or trade secret acquired in the
course of such employment, all of which is the exclusive and
valuable property of the Corporation whether or not conceived of or
prepared by Optionee, other than (a)
information generally known in the
Corporation’s industry or acquired from public sources,
(b) as required in the course of employment by the
Corporation, (c) as required by any court, supervisory
authority, administrative agency or applicable law, or
(d) with the prior written consent of PNC.
9.4 Ownership of Inventions .
Optionee shall promptly and fully disclose to PNC any and all
inventions, discoveries, improvements, ideas or other works of
inventorship or authorship, whether or not patentable, that have
been or will be conceived and/or reduced to practice by Optionee
during the term of Optionee’s employment with the
Corporation, whether alone or with others, and that are
(a) related directly or indirectly to the business or
activities of PNC or any of its subsidiaries or (b) developed
with the use of any time, material, facilities or other resources
of PNC or any subsidiary (“Developments”). Optionee
agrees to assign and hereby does assign to PNC or its designee all
of Optionee’s right, title and interest, including copyrights
and patent rights, in and to all Developments. Optionee shall
perform all actions and execute all instruments that PNC or any
subsidiary shall deem necessary to protect or record PNC’s or
its designee’s interests in the Developments. The obligations
of this Section 9.4 shall be performed by Optionee without
further compensation and shall continue beyond the Termination
Date.
10. Enforcement Provisions .
Optionee understands and agrees to the following provisions
regarding enforcement of the Agreement.
10.1 Governing Law and
Jurisdiction . The Agreement is governed by and construed under
the laws of the Commonwealth of Pennsylvania, without reference to
its conflict of laws provisions. Any dispute or claim arising out
of or relating to the Agreement or claim of breach hereof shall be
brought exclusively in the federal court for the Western District
of Pennsylvania or in the Court of Common Pleas of Allegheny
County, Pennsylvania. By execution of the Agreement, Optionee and
PNC hereby consent to the exclusive jurisdiction of such courts,
and waive any right to challenge jurisdiction or venue in such
courts with regard to any suit, action, or proceeding under or in
connection with the Agreement.
10.2 Equitable Remedies . A
breach of the provisions of any of Sections 9.2, 9.3 or 9.4 will
cause the Corporation irreparable harm, and the Corporation will
therefore be entitled to issuance of immediate, as well as
permanent, injunctive relief restraining Optionee, and each and
every person and entity acting in concert or participating with
Optionee, from initiation and/or continuation of such
breach.
10.3 Tolling Period . If it
becomes necessary or desirable for the Corporation to seek
compliance with the provisions of Section 9.2 by legal
proceedings, the period during which Optionee shall comply with
said provisions will extend for a period of twelve (12) months
from the date the Corporation institutes legal proceedings for
injunctive or other relief.
10.4 No Waiver . Failure of PNC
to demand strict compliance with any of the terms, covenants or
conditions of the Agreement shall not be deemed a waiver of such
term, covenant or condition, nor shall any waiver or relinquishment
of any such term, covenant or condition on any occasion or on
multiple occasions be deemed a waiver or relinquishment of such
term, covenant or condition.
10.5 Severability . The
restrictions and obligations imposed by Sections 9.2, 9.3 and 9.4
are separate and severable, and it is the intent of Optionee and
PNC that if any restriction or obligation imposed by any of these
provisions is deemed by a court of competent jurisdiction to be
void for any reason whatsoever, the remaining provisions,
restrictions and obligations shall remain valid and binding upon
Optionee.
10.6 Reform . In the event any of
Sections 9.2, 9.3 and 9.4 are determined by a court of competent
jurisdiction to be unenforceable because unreasonable either as to
length of time or area to which said restriction applies, it is the
intent of Optionee and PNC that said court reduce and reform the
provisions thereof so as to apply the greatest limitations
considered enforceable by the court.
10.7 Waiver of Jury Trial . Each
of Optionee and PNC hereby waives any right to trial by jury with
regard to any suit, action or proceeding under or in connection
with any of Sections 9.2, 9.3 and 9.4.
10.8 Applicable Law .
Notwithstanding anything in the Agreement, PNC will not be required
to comply with any term, covenant or condition of the Agreement if
and to the extent prohibited by law, including but not limited to
federal banking and securities regulations, or as otherwise
directed by one or more regulatory agencies having jurisdiction
over PNC or any of its subsidiaries. Further, to the extent, if
any, applicable to Optionee, Optionee agrees to reimburse PNC for
any amounts Optionee may be required to reimburse the Corporation
pursuant to Section 304 of the Sarbanes-Oxley Act of 2002, and
agrees that PNC need not comply with any term, covenant or
condition of the Agreement to the extent that doing so would
require that Optionee reimburse PNC or its subsidiaries for such
amounts pursuant to Section 304 of the Sarbanes-Oxley Act of
2002.
11. Effective Date . If Optionee
does not accept the grant of the Option by executing and delivering
a copy of the Agreement to PNC, without altering or changing the
terms of the Agreement in any way, within thirty (30) days of
receipt by Optionee of a copy of the Agreement, PNC may, in its
sole discretion, withdraw its offer and cancel the Option and the
Agreement at any time prior to Optionee’s delivery to PNC of
a copy of the Agreement executed by Optionee.
Otherwise, upon execution and delivery
of the Agreement by both PNC and Optionee and, in the event that
Optionee is subject to the reporting requirements of
Section 16(a) of the Exchange Act with respect to PNC
securities, the filing with and acceptance by the SEC of a Form 4
reporting the Grant, the Option and the Agreement are effective as
of the Grant Date.
12. Discretionary Grants, No
Entitlement and No Claim for Compensation . In accepting the
grant of this Option, Optionee acknowledges the
following:
(a) The Plan is established voluntarily
by PNC, the grant of options under the Plan is made at the
discretion of PNC, and the Plan may be modified, amended, suspended
or terminated by PNC at any time.
(b) The grant of this Option is
voluntary and occasional and does not create any contractual or
other right to receive future grants of options, or benefits in
lieu of options, even if options have been granted repeatedly in
the past.
(c) This Option is an extraordinary item
that does not constitute compensation of any kind for services of
any kind rendered to the Corporation (including, as applicable,
Optionee’s employer) and which is outside the scope of
Optionee’s employment contract, if any.
(d) This Option is not to be considered
part of Optionee’s normal or expected compensation or salary
for any purpose, including, but not limited to, calculating any
severance, resignation, termination, payment in lieu of notice,
redundancy, end of service payments, bonuses, long-service awards,
pension or retirement benefits or similar payments.
(e) In the event that Optionee’s
employer is not PNC, the grant of this Option will not be
interpreted to form an employment contract or relationship with PNC
and, furthermore, the grant of this Option will not be interpreted
to form an employment contract with Optionee’s employer or
any other Subsidiary of PNC.
(f) Optionee shall have no rights, claim
or entitlement to compensation or damages as a result of
Optionee’s termination of employment for any reason
whatsoever, whether or not in breach of contract or local law,
insofar as these rights, claim or entitlement arise or may arise
from Optionee’s ceasing to have rights under or be entitled
to exercise this Option as a result of such termination or loss or
diminution in value of the Option or any of the Covered Shares
purchased through exercise of the Option as a result of such
termination, and Optionee irrevocably releases his or her employer
and the Corporation, as applicable, from any such rights,
entitlement or claim that may arise. If, notwithstanding the
foregoing, any such right or claim is found by a court of competent
jurisdiction to have arisen, then, by signing this Agreement,
Optionee shall be deemed to have irrevocably waived his or her
entitlement to pursue such rights or claim.
13. Data Privacy .
(a) Optionee hereby explicitly and
unambiguously consents to the collection, use and transfer, in
electronic or other form, of his or her personal data as described
in this Agreement by and among, as applicable, his or her employer
and the Corporation for the exclusive purpose of implementing,
administering and managing his or her participation in the
Plan.
(b) Optionee understands that his or her
employer and the Corporation, as applicable, hold certain personal
information about him or her regarding Optionee’s employment,
the nature and amount of Optionee’s compensation, and the
fact and conditions of Optionee’s participation in the Plan,
including, but not limited to, his or her name, home address and
telephone number, date of birth, social insurance number or other
identification number, salary, nationality, job title, any shares
of stock or directorships held in the Corporation, details of all
options or any other entitlement to shares of stock awarded,
canceled, exercised, vested, unvested or outstanding in his or her
favor, for the purpose of implementing, administering and managing
the Plan (the “Data”). Optionee understands that the
Data may be transferred to any third parties assisting in the
implementation, administration and management of the Plan, that
these recipients may be located in his or her country, or
elsewhere, and that the recipient’s country may have
different data privacy laws and protections than his or her
country. Optionee understands that he or she may request a list
with the names and addresses of any potential recipients of the
Data by contacting Optionee’s local human resources
representative. Optionee authorizes the recipients to receive,
possess, use, retain and transfer the Data, in electronic or other
form, for the purposes of implementing, administering and managing
his or her participation in the Plan, including any requisite
transfer of such Data as may be required to a broker or other third
party. Optionee understands that the Data will be held only as long
as is necessary to implement, administer and manage his or her
participation in the Plan. Optionee understands that he or she may,
at any time, view the Data, request additional information about
the storage and processing of the Data, require any necessary
amendments to the Data or refuse or withdraw the consents herein,
in any case without cost, by contacting in writing his or her local
human resources representative. Optionee understands, however, that
refusing or withdrawing Optionee’s consent may affect his or
her ability to participate in the Plan. For more information on the
consequences of Optionee’s refusal to consent or withdrawal
of consent, Optionee understands that he or she may contact his or
her local human resources representative.
IN WITNESS WHEREOF, PNC has caused the
Agreement to be signed on its behalf effective as of the Grant
Date.
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| THE PNC FINANCIAL SERVICES GROUP, INC. |
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| By: |
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Chairman
and Chief Executive Officer |
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| ATTEST: |
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| By: |
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Corporate
Secretary |
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| Accepted and
agreed to as of the Grant Date |
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| Optionee |
Annex A - Certain Definitions
Annex B - Notice of Exercise
Annex C - Tax Payment Election
Form
ANNEX A
CERTAIN
DEFINITIONS
A.1 “Agreement” means the
Nonstatutory Stock Option Agreement between PNC and Optionee
evidencing the grant of the Option to Optionee pursuant to the
Plan.
A.2 “Board” means the Board
of Directors of PNC.
A.3 “Cause.”
(a) “Cause” during a
Coverage Period . If the termination of Optionee’s
employment with the Corporation occurs during a Coverage Period,
then, for purposes of the Agreement, “Cause”
means:
(i) the willful and continued failure of
Optionee to substantially perform Optionee’s duties with the
Corporation (other than any such failure resulting from incapacity
due to physical or mental illness), after a written demand for
substantial performance is delivered to Optionee by the Board or
the CEO that specifically identifies the manner in which the Board
or the CEO believes that Optionee has not substantially performed
Optionee’s duties; or
(ii) the willful engaging by Optionee in
illegal conduct or gross misconduct that is materially and
demonstrably injurious to PNC or any of its
subsidiaries.
For purposes of the preceding clauses
(i) and (ii), no act or failure to act, on the part of
Optionee, shall be considered willful unless it is done, or omitted
to be done, by Optionee in bad faith and without reasonable belief
that Optionee’s action or omission was in the best interests
of the Corporation. Any act, or failure to act, based upon the
instructions or prior approval of the Board, the CEO or
Optionee’s superior or based upon the advice of counsel for
the Corporation, shall be conclusively presumed to be done, or
omitted to be done, by Optionee in good faith and in the best
interests of the Corporation.
The cessation of employment of Optionee
will be deemed to be a termination of Optionee’s employment
with the Corporation for Cause for purposes of the Agreement only
if and when there shall have been delivered to Optionee, as part of
the notice of Optionee’s termination, a copy of a resolution
duly adopted by the affirmative vote of not less than a majority of
the entire membership of the Board, at a Board meeting called and
held for the purpose of considering such termination, finding on
the basis of clear and convincing evidence that, in the good faith
opinion of the Board, Optionee is guilty of conduct described in
clause (i) or (ii) above and, in either case, specifying
the particulars thereof in detail. Such resolution shall be adopted
only after (1) reasonable notice of such Board meeting is
provided to Optionee, together with written notice that PNC
believes that Optionee is guilty of conduct described in clause
(i) or (ii) above and, in either case, specifying the
particulars thereof in detail, and (2) Optionee is given an
opportunity, together with counsel, to be heard before the
Board.
(b) “Cause” other than
during a Coverage Period . If the termination of
Optionee’s employment with the Corporation occurs other than
during a Coverage Period, then, for purposes of the Agreement,
“Cause” means:
(i) the willful and continued failure of
Optionee to substantially perform Optionee’s duties with the
Corporation other than any such failure resulting from incapacity
due to physical or mental illness), after a written demand for
substantial performance is delivered to Optionee by PNC that
specifically identifies the manner in which it is believed that
Optionee has not substantially performed Optionee’s
duties;
(ii) a material breach by Optionee of
(1) any code of conduct of PNC or one of its subsidiaries or
(2) other written policy of PNC or a subsidiary, in either
case required by law or established to maintain compliance with
applicable law;
(iii) any act of fraud,
misappropriation, material dishonesty, or embezzlement by Optionee
against PNC or one of its subsidiaries or any client or customer of
PNC or a subsidiary;
(iv) any conviction (including a plea of
guilty or of nolo contendere ) of Optionee for, or entry by
Optionee into a pre-trial disposition with respect to, the
commission of a felony; or
(v) entry of any order against Optionee,
by any governmental body having regulatory authority with respect
to the business of PNC or any of its subsidiaries, that relates to
or arises out of Optionee’s employment or other service
relationship with the Corporation.
The cessation of employment of Optionee
will be deemed to have been a termination of Optionee’s
employment with the Corporation for Cause for purposes of the
Agreement only if and when the CEO or his or her designee (or, if
Optionee is the CEO, the Board) determines that Optionee is guilty
of conduct described in clause (i), (ii) or (iii) above
or that an event described in clause (iv) or (v) above
has occurred with respect to Optionee and, if so, determines that
the termination of Optionee’s employment with the Corporation
will be deemed to have been for Cause.
A.4 “CEO” means the chief
executive officer of PNC.
A.5 “Change in Control”
means a change of control of PNC of a nature that would be required
to be reported in response to Item 6(e) of Schedule 14A of
Regulation 14A (or in response to any similar item on any similar
schedule or form) promulgated under the Exchange Act, whether or
not PNC is then subject to such reporting requirement;
provided , however , that without limitation, a
Change in Control shall be deemed to have occurred if:
(a) any Person, excluding employee
benefit plans of the Corporation, is or becomes the beneficial
owner (as defined in Rules 13d-3 and 13d-5 under the Exchange Act
or any successor provisions thereto), directly or indirectly, of
securities of PNC representing twenty percent (20%) or more of
the combined voting power of PNC’s then outstanding
securities; provided , however , that such an
acquisition of beneficial ownership representing between twenty
percent (20%) and forty percent (40%), inclusive, of such
voting power shall not be considered a Change in Control if the
Board approves such acquisition either prior to or immediately
after its occurrence;
(b) PNC consummates a merger,
consolidation, share exchange, division or other reorganization or
transaction of PNC (a “Fundamental Transaction”) with
any other corporation, other than a Fundamental Transaction that
results in the voting securities of PNC outstanding immediately
prior thereto continuing to represent (either by remaining
outstanding or by being converted into voting securities of the
surviving entity) at least sixty percent (60%) of the combined
voting power immediately after such Fundamental Transaction of
(i) PNC’s outstanding securities, (ii) the
surviving entity’s outstanding securities, or (iii) in
the case of a division, the outstanding securities of each entity
resulting from the division;
(c) the shareholders of PNC approve a
plan of complete liquidation or winding-up of PNC or an agreement
for the sale or disposition (in one transaction or a series of
transactions) of all or substantially all of PNC’s
assets;
(d) as a result of a proxy contest,
individuals who prior to the conclusion thereof constituted the
Board (including for this purpose any new director whose election
or nomination for election by PNC’s shareholders in
connection with such proxy contest was approved by a vote of at
least two-thirds (2/3rds) of the directors then still in
office who were directors prior to such proxy contest) cease to
constitute at least a majority of the Board (excluding any Board
seat that is vacant or otherwise unoccupied);
(e) during any period of twenty-four
(24) consecutive months, individuals who at the beginning of
such period constituted the Board (including for this purpose any
new director whose election or nomination for election by
PNC’s shareholders was approved by a vote of at least
two-thirds (2/3rds) of the directors then still in office who
were directors at the beginning of such period) cease for any
reason to constitute at least a majority of the Board (excluding
any Board seat that is vacant or otherwise unoccupied);
or
(f) the Board determines that a Change
in Control has occurred.
Notwithstanding anything to the contrary
herein, a divestiture or spin-off of a subsidiary or division of
PNC or any of its subsidiaries shall not by itself constitute a
Change in Control.
A.6 “CIC Failure” means the
following:
(a) with respect to a CIC Triggering
Event described in Section A.8(a), PNC’s shareholders vote
against the transaction approved by the Board or the agreement to
consummate the transaction is terminated; or
(b) with respect to a CIC Triggering
Event described in Section A.8(b), the proxy contest fails to
replace or remove a majority of the members of the
Board.
A.7 “CIC Severance
Agreement” means the written agreement, if any, between
Optionee and PNC providing, among other things, for certain change
in control severance benefits.
A.8 “CIC Triggering Event”
means the occurrence of either of the following:
(a) the Board or PNC’s
shareholders approve a transaction described in Subsection
(b) of the definition of Change in Control contained in
Section A.5; or
(b) the commencement of a proxy contest
in which any Person seeks to replace or remove a majority of the
members of the Board.
A.9 “Committee” means the
Personnel and Compensation Committee of the Board or such person or
persons as may be designated or appointed by that committee as its
delegate or designee.
A.10 “Competitive Activity”
means, for purposes of the Agreement, any participation in,
employment by, ownership of any equity interest exceeding one
percent (1%) in, or promotion or organization of, any Person
other than PNC or any of its subsidiaries (1) engaged in
business activities similar to some or all of the business
activities of PNC or any subsidiary as of Optionee’s
Termination Date or (2) engaged in business activities that
Optionee knows PNC or any subsidiary intends to enter within the
first twelve (12) months after Optionee’s Termination
Date or, if later and if applicable, after the date specified in
clause (ii) of Section A.15(a), in either case whether
Optionee is acting as agent, consultant, independent contractor,
employee, officer, director, investor, partner, shareholder,
proprietor or in any other individual or representative capacity
therein.
A.11 “Consolidated
Subsidiary” means a corporation, bank, partnership, business
trust, limited liability company or other form of business
organization that (1) is a consolidated subsidiary of PNC
under accounting principles generally accepted in the United States
of America and (2) satisfies the definition of “service
recipient” under Section 409A of the Internal Revenue
Code.
A.12 “Corporation” means PNC
and its Consolidated Subsidiaries.
A.13 “Coverage Period” means
a period (a) commencing on the earlier to occur of
(i) the date of a CIC Triggering Event and (ii) the date
of a Change in Control and (b) ending on the date that is two
(2) years after the date of the Change in Control;
provided , however , that in the event that a
Coverage Period commences on the date of a CIC Triggering Event,
such Coverage Period will terminate upon the earlier to occur of
(x) the date of a CIC Failure and (y) the date that is
two (2) years after the date of the Change in Control
triggered by the CIC Triggering Event. After the termination of any
Coverage Period, another Coverage Period will commence upon the
earlier to occur of clauses (a)(i) and (a)(ii) in the preceding
sentence.
A.14 “Covered Shares” means
the number of shares of PNC common stock that Optionee has the
option to purchase from PNC pursuant to the Option.
A.15 “Detrimental Conduct”
means, for purposes of the Agreement:
(a) Optionee has engaged, without the
prior written consent of PNC (with consent to be given at
PNC’s sole discretion), in any Competitive Activity in the
continental United States at any time during the period commencing
on Optionee’s Termination Date and extending through (and
including) the first (1st) anniversary of the later of
(i) Optionee’s Termination Date and, if different,
(ii) the first date after Optionee’s Termination Date as
of which Optionee ceases to be engaged by the Corporation in any
capacity for which Optionee receives compensation from the
Corporation, including but not limited to acting for compensation
as a consultant, independent contractor, employee, officer,
director or advisory director;
(b) any act of fraud, misappropriation,
or embezzlement by Optionee against PNC or one of its subsidiaries
or any client or customer of PNC or one of its subsidiaries;
or
(c) any conviction (including a plea of
guilty or of nolo contendere ) of Optionee for, or any entry
by Optionee into a pre-trial disposition with respect to, the
commission of a felony that relates to or arises out of
Optionee’s employment or other service relationship with the
Corporation.
Optionee will be deemed to have engaged
in Detrimental Conduct for purposes of the Agreement only if and
when the Committee (if Optionee was an “executive
officer” of PNC as defined in SEC Regulation S-K when he or
she ceased to be an employee of the Corporation) or the CEO (if
Optionee was not such an executive officer), whichever is
applicable, determines that Optionee has engaged in conduct
described in clause (a) or clause (b) above or that an
event described in clause (c) above has occurred with respect
to Optionee, and, if so, determines that Optionee will be deemed to
have engaged in Detrimental Conduct.
A.16 “Exchange Act” means
the Securities Exchange Act of 1934 as amended, and the rules and
regulations promulgated thereunder.
A.17 “Exercise Date” means
the date (which must be a business day for PNC Bank, National
Association) on which PNC receives written notice, in such form as
PNC may from time to time prescribe, of the exercise, in whole or
in part, of the Option pursuant to the terms of the Agreement,
subject to receipt by PNC of full payment of the aggregate Option
Price, calculation by PNC of the applicable Withholding Taxes, and
receipt by PNC of payment for any taxes required to be withheld in
connection with such exercise as provided in Sections 4.1, 4.2 and
4.3 of the Agreement.
A.18 “Expiration
Date.”
(a) Expiration Date .
Expiration Date means the date on which the Option expires, which
will be the tenth (10 th ) anniversary of the Grant Date unless the Option expires
earlier pursuant to any of the provisions set forth in Sections
A.18(b) through A.18(d);
provided, however, if
there is a Change in Control, then notwithstanding Sections A.18(c)
and A.18(d), to the extent that the Option is outstanding and
vested or vests at the time the Change in Control occurs, the
Option will not expire at the earliest before the close of business
on the ninetieth (90 th ) day after the occurrence of the Change in Control (or
the tenth (10 th ) anniversary of the Grant Date if earlier), provided
that either (1) Optionee is an employee of the Corporation
at the time the Change in Control occurs and Optionee’s
employment with the Corporation is not terminated for Cause or
(2) Optionee is a former employee of the Corporation whose
Option, or portion thereof, is outstanding at the time the Change
in Control occurs by virtue of the application of one or more of
the exceptions set forth in Section A.18(c) and at least one of
such exceptions is still applicable at the time the Change in
Control occurs.
In no event will the Option
remain outstanding beyond the tenth (10 th ) anniversary of the Grant
Date.
(b) Termination for Cause . Upon
a termination of Optionee’s employment with the Corporation
for Cause, unless the Committee determines otherwise, the Option
will expire at the close of business on Optionee’s
Termination Date with respect to all Covered Shares, whether or not
vested and whether or not Optionee is eligible to Retire or
Optionee’s employment also terminates for another
reason.
(c) Ceasing to be an Employee other
than by Termination for Cause . If Optionee ceases to be an
employee of the Corporation other than by termination of
Optionee’s employment for Cause, then unless the Committee
determines otherwise, the Option will expire at the close of
business on Optionee’s Termination Date with respect to all
Covered Shares, whether or not vested, except to the extent that
the provisions set forth in subsection (1), (2), (3), (4) or
(5) of this Section A.18(c) apply to Optionee’s
circumstances and such applicable subsection specifies a later
expiration date for all or a portion of the Option. If more than
one of such exceptions is applicable to the Option or a portion
thereof, then the Option or such portion of the Option will expire
in accordance with the provisions of the subsection that specifies
the latest expiration date.
(1) Retirement
. If the termination of Optionee’s employment with the
Corporation meets the definition of Retirement, then the Option
will expire on the tenth (10 th ) anniversary of the Grant Date with respect to any
Covered Shares as to which the Option is vested on the Retirement
date or thereafter vests pursuant to Section 2.2 of the
Agreement.
(2) Death . If
Optionee’s employment with the Corporation is terminated by
reason of Optionee’s death, then the Option will expire on
the tenth (10 th ) anniversary of the Grant Date.
(3) Termination during
a Coverage Period without Cause or with Good Reason . If
Optionee’s employment with the Corporation is terminated
(other than by reason of Optionee’s death) during a Coverage
Period by the Corporation without Cause or by Optionee with Good
Reason, then the Option will expire on the third (3
rd
) anniversary of such
Termination Date (but in no event later than on the tenth
(10 th ) anniversary of the Grant Date).
(4) Total and Permanent
Disability . If Optionee’s employment is terminated
by the Corporation by reason of Total and Permanent Disability,
then the Option will expire on the third (3 rd ) anniversary of such Termination
Date (but in no event later than on the tenth (10
th
) anniversary of the
Grant Date).
(5) DEAP or Agreement
or Arrangement in lieu of or in addition to DEAP . In the
event that (a) Optionee’s employment with the
Corporation is terminated by the Corporation, and Optionee is
offered and has entered into the standard Waiver and Release
Agreement with PNC or one of its subsidiaries under an applicable
PNC or subsidiary Displaced Employee Assistance Plan, or any
successor plan by whatever name known (“DEAP”), or
Optionee is offered and has entered into a similar waiver and
release agreement between PNC or one of its subsidiaries and
Optionee pursuant to the terms of an agreement or arrangement
entered into by PNC or a subsidiary and Optionee in lieu of or in
addition to the DEAP, and (b) Optionee has not revoked such
waiver and release agreement, and (c) the time for revocation
of such waiver and release agreement by Optionee has lapsed, then
the Option will expire at the close of business on the ninetieth
(90 th ) day after Optionee’s Termination Date (but in no
event later than on the tenth (10 th ) anniversary of the Grant Date)
with respect to any Covered Shares as to which the Option has
already become vested; provided , however , that if
Optionee returns to employment with the Corporation no later than
said ninetieth (90 th ) day, then for purposes of the Agreement, the entire
Option, whether vested or unvested, will be treated as if the
termination of Optionee’s employment with the Corporation had
not occurred.
If the vested portion of the
Option (or the entire Option if fully vested) will expire on
Optionee’s Termination Date unless the conditions set forth
in this Section A.18(c)(5) are met, then such vested Option or
portion thereof will not terminate on the Termination Date, but
Optionee will not be able to exercise the Option after such
Termination Date unless and until all of the conditions set forth
in this Section A.18(c)(5) have been met and the Option will
terminate on the ninetieth (90 th ) day after Optionee’s Termination Date (but in no
event later than on the tenth (10 th ) anniversary of the Grant
Date).
(d) Detrimental Conduct . If the
Option would otherwise remain outstanding after Optionee’s
Termination Date with respect to any of the Covered Shares pursuant
to one or more of the exceptions set forth in the subsections of
Section A.18(c), then notwithstanding the provisions of such
exception or exceptions, the Option will expire on the date that
PNC determines that Optionee has engaged in Detrimental Conduct, if
earlier than the date on which the Option would otherwise expire;
provided , however , that:
(1) no determination that Optionee has
engaged in Detrimental Conduct may be made on or after the date of
Optionee’s death, and Detrimental Conduct will not apply to
conduct by or activities of beneficiaries or other successors to
the Option in the event of Optionee’s death;
(2) in the event that Optionee’s
employment with the Corporation is terminated (other than by reason
of Optionee’s death) during a Coverage Period by the
Corporation without Cause or by Optionee with Good Reason, whether
or not another exception is applicable, no determination that
Optionee has engaged in Detrimental Conduct for purposes of the
Agreement may be made on or after such Termination Date;
and
(3) no determination that Optionee has
engaged in Detrimental Conduct may be made after the occurrence of
a Change in Control.
A.19 “Fair Market Value” as
it relates to a share of PNC common stock as of any given date
means the average of the reported high and low trading prices on
the New York Stock Exchange (or such successor reporting system as
PNC may select) for a share of PNC common stock on such date, or,
if no PNC common stock trades have been reported on such exchange
for that day, the average of such prices on the next preceding day
and the next following day for which there were reported
trades.
A.20 “GAAP” or
“generally accepted accounting principles” means
accounting principles generally accepted in the United States of
America.
A.21 “Good Reason”
means:
(a) the assignment to Optionee of any
duties inconsistent in any respect with Optionee’s position
(including status, offices, titles and reporting requirements),
authority, duties or responsibilities immediately prior to either
the CIC Triggering Event or the Change in Control, or any other
action by the Corporation that results in a diminution in any
respect in such position, authority, duties or responsibilities,
excluding for this purpose an isolated, insubstantial and
inadvertent action not taken in bad faith that is remedied by the
Corporation promptly after receipt of notice thereof given by
Optionee;
(b) a reduction by the Corporation in
Optionee’s annual base salary as in effect on the Grant Date,
as the same may be increased from time to time;
(c) the Corporation’s requiring
Optionee to be based at any office or location that is more than
fifty (50) miles from Optionee’s office or location
immediately prior to either the CIC Triggering Event or the Change
in Control;
(d) the failure by the Corporation
(i) to continue in effect any bonus, stock option or other
cash or equity-based incentive plan in which Optionee participates
immediately prior to either the CIC Triggering Event or the Change
in Control that is material to Optionee’s total compensation,
unless a substantially equivalent arrangement (embodied in an
ongoing substitute or alternative plan) has been made with respect
to such plan, or (ii) to continue Optionee’s
participation in such plan (or in such substitute or alternative
plan) on a basis at least as favorable, both in terms of the amount
of benefits provided and the level of Optionee’s
participation relative to other participants, as existed
immediately prior to the CIC Triggering Event or the Change in
Control; or
(e) the failure by the Corporation to
continue to provide Optionee with benefits substantially similar to
those received by Optionee under any of the Corporation’s
pension (including, but not limited to, tax-qualified plans), life
insurance, health, accident, disability or other welfare plans in
which Optionee was participating, at costs substantially similar to
those paid by Optionee, immediately prior to the CIC Triggering
Event or the Change in Control.
A.22 “Grant Date” means the
date set forth as the Grant Date on page 1 of the Agreement and is
the date as of which the Option is authorized to be granted by the
Committee in accordance with the Plan.
A.23 “Internal Revenue Code”
means the Internal Revenue Code of 1986 as amended, and the rules
and regulations promulgated thereunder.
A.24 “Option” means the
option to purchase shares of PNC common stock granted to Optionee
under the Plan in Section 1 of the Agreement in accordance
with the terms of Article 6 of the Plan.
A.25 “Option Period” means
the period during which the Option may be exercised, as set forth
in Section 2.2 of the Agreement.
A.26 “Option Price” means
the dollar amount per share of PNC common stock at which the Option
may be exercised. The Option Price is set forth on page 1 of the
Agreement.
A.27 “Optionee” means the
person to whom the Option is granted and is identified as Optionee
on page 1 of the Agreement.
A.28 “Person” has the
meaning given in Section 3(a)(9) of the Exchange Act and also
includes any syndicate or group deemed to be a person under
Section 13(d)(3) of the Exchange Act.
A.29 “Plan” means The PNC
Financial Services Group, Inc. 2006 Incentive Award
Plan.
A.30 “PNC” means The PNC
Financial Services Group, Inc.
A.31 “Retire” or
“Retirement” means, for purposes of this Option and all
PNC stock options held by Optionee, whether granted under the Plan
or under an earlier PNC plan, termination of Optionee’s
employment with the Corporation (a) at any time on or after
the first day of the first month coincident with or next following
the date on which Optionee attains age fifty-five (55) and
completes five (5) years of service (where a year of service
is determined in the same manner as the determination of a year of
Vesting Service under the provisions of The PNC Financial Services
Group, Inc. Pension Plan) with the Corporation and (b) for a
reason other than termination by reason of Optionee’s death
or by the Corporation for Cause or, unless the Committee determines
otherwise, termination in connection with a divestiture of assets
or a divestiture of one or more subsidiaries.
A.32 “Retiree” means an
Optionee who has Retired.
A.33 “SEC” means the United
States Securities and Exchange Commission.
A.34 “Share” means a share
of authorized but unissued PNC common stock or a reacquired share
of PNC common stock, including shares purchased by PNC on the open
market for purposes of the Plan or otherwise.
A.35 “Termination Date”
means Optionee’s last date of employment with the
Corporation. If Optionee is employed by a Consolidated Subsidiary
that ceases to be a subsidiary of PNC or ceases to be a
consolidated subsidiary of PNC under accounting principles
generally accepted in the United States of America and Optionee
does not continue to be employed by PNC or a Consolidated
Subsidiary, then for purposes of the Agreement, Optionee’s
employment with the Corporation terminates effective at the time
this occurs.
For purposes of this Agreement,
Optionee’s period of employment will not include any period
of notice of termination of employment, whether expressed or
implied. Optionee’s Termination Date will mean the date upon
which Optionee ceases active employment following the provision of
such notification of termination or resignation from employment and
will be determined solely by this Agreement and without reference
to any other agreement, written or oral, including Optionee’s
contract of employment, if any.
A. 36 “Total and Permanent
Disability” means, unless the Committee determines otherwise,
Optionee’s disability as determined to be total and permanent
by the Corporation for purposes of the Agreement.
A.37 “Withholding Taxes”
means all applicable income and employment taxes, social insurance,
payroll taxes, contributions, payment on account obligations or
other payments required to be withheld in connection with exercise
of the Option.
FORMS OF EMPLOYEE RESTRICTED
STOCK/
SHARE UNIT
AGREEMENTS
200 Long-Term
Incentive Award Program Grant
Continued Employment Performance
Goal
Restricted Period: Three Years
(100%)
THE PNC FINANCIAL SERVICES
GROUP, INC.
2006 INCENTIVE AWARD
PLAN
* * *
200
LONG-TERM INCENTIVE AWARD PROGRAM
* * *
RESTRICTED STOCK
AGREEMENT
* * *
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GRANTEE:
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< name
> |
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GRANT DATE:
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________,
200__ |
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SHARES:
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<
number of whole shares> |
1. Definitions .
Certain terms used in this Restricted Stock Agreement (the
“Agreement”) are defined in Annex A (which is
incorporated herein as part of the Agreement) or elsewhere in the
Agreement, and such definitions will apply except where the context
otherwise indicates.
In the Agreement,
“PNC” means The PNC Financial Services Group, Inc. and
“Corporation” means PNC and its Consolidated
Subsidiaries.
2. Grant of Restricted
Shares . Pursuant to The PNC Financial Services Group, Inc.
2006 Incentive Award Plan (the “Plan”), and subject to
the terms and conditions of the Agreement, PNC hereby grants to the
Grantee named above (“Grantee”) a Restricted Shares
Award of the number of shares of PNC common stock set forth above,
and, upon acceptance of the Grant by Grantee in accordance with
Section 16, will cause the issuance of said shares to Grantee
subject to the terms and conditions of the Agreement and the
Plan.
The shares granted and issued
to Grantee hereby as a Restricted Shares Award subject to the
restrictions set forth in and the terms and conditions of the
Agreement and the Plan are hereafter referred to as the
“Restricted Shares.”
3. Terms of Grant .
The Grant is subject to the following terms and
conditions.
Restricted Shares will be
subject to a Restricted Period as provided in Section A.26 of
Annex A. Once issued in accordance with Section 16, Restricted
Shares will be deposited with PNC or its designee, or credited to a
book-entry account, during the term of the Restricted Period unless
and until forfeited pursuant to the terms of the
Agreement.
Any certificate or
certificates representing such Restricted Shares will contain the
following legend:
“This certificate and
the shares of stock represented hereby are subject to the terms and
conditions (including forfeiture and restrictions against transfer)
contained in The PNC Financial Services Group, Inc. 2006 Incentive
Award Plan and an Agreement entered into between the registered
owner and The PNC Financial Services Group, Inc. Release from such
terms and conditions will be made only in accordance with the
provisions of such Plan and such Agreement, a copy of each of which
is on file in the office of the Corporate Secretary of The PNC
Financial Services Group, Inc.”
Where a book-entry system is
used with respect to the issuance of Restricted Shares, appropriate
notation of such forfeiture possibility and transfer restrictions
will be made on the system with respect to the account or accounts
to which the Restricted Shares are credited.
Restricted Shares deposited
with PNC or its designee during the term of the Restricted Period
that become Awarded Shares as provided in Section A.2 of Annex A
will be released and reissued to, or at the pr
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