Exhibit 10.61

2009 FORMS OF EMPLOYEE STOCK OPTION, RESTRICTED STOCK,

RESTRICTED SHARE UNIT AND PERFORMANCE UNIT AGREEMENTS

FORMS OF EMPLOYEE STOCK OPTION AGREEMENTS

THE PNC FINANCIAL SERVICES GROUP, INC.

2006 INCENTIVE AWARD PLAN

NONSTATUTORY STOCK OPTION AGREEMENT

 

OPTIONEE:    «First_Name_MI» «Last_Name»    GRANT DATE:                , 20    
   OPTION PRICE:    $             per share    COVERED SHARES:    «Shares»   

1. Definitions; Grant of Option. Certain terms used in this Nonstatutory Stock
Option Agreement (the “Agreement”) are defined in Annex A hereto (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 then outstanding
and the Expiration Date has not yet occurred, 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 another subsection of
this Section 2.2, the Option will become exercisable (“vest”) as follows:

(i) as to one-third ( 1/3rd) of the Covered Shares (rounded down to the nearest
whole Share), commencing on the first (1st) 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;

 

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(ii) as to one-half ( 1/2) of the remaining Covered Shares (rounded down to the
nearest whole Share), commencing on the second (2nd ) 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
(3rd) 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 (1st) anniversary date of the
Grant Date.

(b) If Optionee’s employment is terminated by the Corporation by reason of
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 Change of Control Triggering Event but prior
to the occurrence of a Change of Control Failure or of the Change of Control
triggered by the Change of Control 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 of
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 of Control, provided that, at the time the
Change of 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;

 

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(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.

 

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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

 

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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 one year 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.

 

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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 or, if Optionee was a
party to a Change of Control Employment Agreement that was in effect at the time
of such termination of employment, within three years after the occurrence of a
Change of Control, 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 one year
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.

 

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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 PNC or its subsidiaries
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, the Option and the Agreement are effective as of the Grant Date.

 

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IN WITNESS WHEREOF, PNC has caused the Agreement to be signed on its behalf
effective as of the Grant Date.

THE PNC FINANCIAL SERVICES GROUP, INC.

By:

Chairman and Chief Executive Officer

ATTEST:

By:

Corporate Secretary

Accepted and agreed to as of the Grant Date

 

Optionee

Annex A - Certain Definitions

Annex B - Notice of Exercise

Annex C - Tax Payment Election Form

 

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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;

 

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(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 of Control” means:

(a) Any individual, entity or group (within the meaning of Section 13(d)(3) or
14(d)(2) of the Securities Exchange Act of 1934, as amended (the “Exchange
Act”)) (a “Person”) becomes the beneficial owner (within the meaning of Rule
13d-3 promulgated under the Exchange Act) of 20% or more of either (A) the
then-outstanding shares of common stock of PNC (the “Outstanding PNC Common
Stock”) or (B) the combined voting power of the then-outstanding voting
securities of PNC entitled to vote generally in the election of directors (the
“Outstanding PNC Voting Securities”); provided, however, that, for purposes of
this Section A.5(a), the following acquisitions shall not constitute a Change of
Control: (1) any acquisition directly from PNC, (2) any acquisition by PNC,
(3) any acquisition by any employee benefit plan (or related trust) sponsored or
maintained by PNC or any company controlled by, controlling or under common
control with PNC (an “Affiliated Company”), (4) any acquisition pursuant to an
Excluded Combination (as defined in Section A.5(c)) or (5) an acquisition of
beneficial ownership representing between 20% and 40%, inclusive, of the
Outstanding PNC Voting Securities or Outstanding PNC Common Stock shall not be
considered a Change of Control if the Incumbent Board as of immediately prior to
any such acquisition approves such acquisition either prior to or immediately
after its occurrence;

(b) Individuals who, as of the date hereof, constitute the Board (the “Incumbent
Board”) cease for any reason to constitute at least a majority of the Board
(excluding any Board seat that is vacant or otherwise unoccupied); provided,
however, that any individual becoming a director subsequent to the date hereof
whose election, or nomination for election by PNC’s shareholders, was approved
by a vote of at least two-thirds of the directors then comprising the Incumbent
Board shall be considered as though such individual was a member of the
Incumbent Board, but excluding, for this purpose, any such individual whose
initial assumption of office occurs as a result of an actual or threatened
election contest with respect to the election or removal of directors or other
actual or threatened solicitation of proxies or consents by or on behalf of a
Person other than the Board;

 

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(c) Consummation of a reorganization, merger, statutory share exchange or
consolidation or similar transaction involving PNC or any of its subsidiaries, a
sale or other disposition of all or substantially all of the assets of PNC, or
the acquisition of assets or stock of another entity by PNC or any of its
subsidiaries (each, a “Business Combination”), excluding, however, a Business
Combination following which all or substantially all of the individuals and
entities that were the beneficial owners of the Outstanding PNC Common Stock and
the Outstanding PNC Voting Securities immediately prior to such Business
Combination beneficially own, directly or indirectly, more than 60% of the
then-outstanding shares of common stock (or, for a non-corporate entity,
equivalent securities) and the combined voting power of the then-outstanding
voting securities entitled to vote generally in the election of directors (or,
for a non-corporate entity, equivalent governing body), as the case may be, of
the entity resulting from such Business Combination (including, without
limitation, an entity that, as a result of such transaction, owns PNC or all or
substantially all of PNC’s assets either directly or through one or more
subsidiaries) in substantially the same proportions as their ownership
immediately prior to such Business Combination of the Outstanding PNC Common
Stock and the Outstanding PNC Voting Securities, as the case may be (such a
Business Combination, an “Excluded Combination”); or

(d) Approval by the shareholders of PNC of a complete liquidation or dissolution
of PNC.

A.6 “Change of Control Employment Agreement” means the written agreement, if
any, between Optionee and PNC providing, among other things, for certain
payments and benefits upon a qualifying termination of employment following a
change of control.

A.7 “Change of Control Failure” means the following:

(a) with respect to a Change of Control 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 Change of Control 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.8 “Change of Control Triggering Event” means the occurrence of either of the
following:

(a) the Board or PNC’s shareholders approve a transaction described in
Subsection (c) of the definition of Change of 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.

 

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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 Change of Control Triggering Event and (ii) the date of a
Change of Control and (b) ending on the date that is two (2) years after the
date of the Change of Control; provided, however, that in the event that a
Coverage Period commences on the date of a Change of Control Triggering Event,
such Coverage Period will terminate upon the earlier to occur of (x) the date of
a Change of Control Failure and (y) the date that is two (2) years after the
date of the Change of Control triggered by the Change of Control 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 “Disabled” or “Disability” means, except as may otherwise be required by
Section 409A of the Internal Revenue Code, that Optionee either (i) is unable to
engage in any substantial gainful activity by reason of any medically
determinable physical or mental impairment that can be expected to result in
death or can be expected to last for a continuous period of not less than 12
months, or (ii) is, by reason of any medically determinable physical or mental
impairment that can be expected to result in death or can be expected to last
for a continuous period of not less than 12 months, receiving (and has received
for at least three months) income replacement benefits under any
Corporation-sponsored disability benefit plan. If Optionee has been determined
to be eligible for Social Security disability benefits, Optionee shall be
presumed to be Disabled as defined herein.

 

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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 (10th) 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) (with the Option expiring on the first date determined under any
of such sections);

provided, however, if there is a Change of 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 of Control occurs, the Option will not
expire at the earliest before the close of business on the ninetieth (90th) day
after the occurrence of the Change of Control (or the tenth (10th) anniversary
of the Grant Date if earlier), provided that either (1) Optionee is an employee
of the Corporation at the time the Change of 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 of 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 of
Control occurs.

In no event will the Option remain outstanding beyond the tenth
(10th) 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
(10th) 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 (10th) anniversary
of the Grant Date.

 

February 2009

 

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(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
(3rd) anniversary of such Termination Date (but in no event later than on the
tenth (10th) anniversary of the Grant Date).

(4) Disability. If Optionee’s employment is terminated by the Corporation by
reason of Disability, then the Option will expire on the third (3rd) anniversary
of such Termination Date (but in no event later than on the tenth
(10th) 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 (90th) day
after Optionee’s Termination Date (but in no event later than on the tenth
(10th) 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
(90th) 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 (90th) day after Optionee’s Termination Date (but in no event
later than on the tenth (10th) 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, 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 of Control.

 

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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) (i) the assignment to Optionee of any duties inconsistent in any respect
with, or any other diminution in, Optionee’s position (including status,
offices, titles and reporting requirements), authority, duties or
responsibilities such that Optionee’s position, authority, duties or
responsibilities are not at least commensurate in all material respects with the
most significant of those held, exercised and assigned to Optionee at any time
during the 120-day period immediately preceding the Change of Control, or if a
Change of Control has not yet occurred but there has been a Change of Control
Triggering Event, (ii) the assignment to Optionee of any duties inconsistent in
any material respect with, or any other material diminution in, Optionee’s
position (including status, offices, titles and reporting requirements),
authority, duties or responsibilities immediately prior to the Change of Control
Triggering Event, excluding in either case for this purpose an isolated,
insubstantial and inadvertent action not taken in bad faith and 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 to an annual
rate (i) that is less than 12 times the highest monthly base salary paid or
payable, including any base salary that has been earned but deferred, to
Optionee by the Corporation in respect of the 12-month period immediately
preceding the month in which the Change of Control occurs or, if a Change of
Control has not yet occurred but there has been a Change of Control Triggering
Event, (ii) that is less than 12 times the monthly base salary paid or payable,
including any base salary that has been earned but deferred, to Optionee by the
Corporation in respect of the month immediately preceding the month in which the
Change of Control Triggering Event occurs;

(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 Change of Control Triggering Event or the Change
of Control;

(d) other than an isolated, insubstantial and inadvertent failure not occurring
in bad faith and that is remedied by the Corporation promptly after receipt of
notice thereof given by Optionee, the failure by the Corporation to continue
Optionee’s participation in annual bonus, long-term cash incentive, equity
incentive, savings and retirement plans, practices, policies and programs that
provide Optionee with annual bonus opportunities, long-term incentive
opportunities (measured with respect to both regular and special incentive
opportunities, to the extent, if any, that such distinction is applicable),
savings opportunities and retirement benefit opportunities, in each case, no
less favorable, in the aggregate, than the most favorable of those provided by
the Corporation for Optionee under such plans, practices, policies and programs
as in effect (i) at any time during the 120-day period immediately preceding the
Change of Control, or if a Change of Control has not yet occurred but there has
been a Change of Control Triggering Event, (ii) immediately prior to the Change
of Control Triggering Event; or

(e) other than an isolated, insubstantial and inadvertent failure not occurring
in bad faith and that is remedied by the Corporation promptly after receipt of
notice thereof given by Optionee, the failure by the Corporation to continue to
provide Optionee with benefits under welfare benefit plans, practices, policies
and programs provided by the Corporation (including, without limitation,
medical, prescription, dental, vision, disability, employee life, group life,
accidental

 

February 2009

 

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death and travel accident insurance plans and programs) no less favorable, in
the aggregate, than those provided to Optionee under the most favorable of such
plans, practices, policies and programs in effect for Optionee (i) at any time
during the 120-day period immediately preceding the Change of Control, or if a
Change of Control has not yet occurred but there has been a Change of Control
Triggering Event, (ii) immediately prior to the Change of Control Triggering
Event.

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 “Plan” means The PNC Financial Services Group, Inc. 2006 Incentive Award
Plan.

A.29 “PNC” means The PNC Financial Services Group, Inc.

A.30 “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 at
any time and for any reason (other than termination by reason of Optionee’s
death or by the Corporation for Cause and, if the Committee or the CEO so
determines prior to such divestiture, other than by reason of termination in
connection with a divestiture of assets or a divestiture of one or more
subsidiaries of the Corporation) on or after the first date on which Optionee
has both attained at least age fifty-five (55) and completed 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 calculated under the provisions of
The PNC Financial Services Group, Inc. Pension Plan.

A.31 “Retiree” means an Optionee who has Retired.

A.32 “SEC” means the U.S. Securities and Exchange Commission.

A.33 “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.34 “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.

 

February 2009

 

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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

 

OPTIONEE:    «EMPLOYEE»    ORIGINAL OPTION GRANT DATE:       RELOAD OPTION GRANT
DATE:       RELOAD OPTION PRICE:    $ per share    COVERED SHARES:      

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 and the Expiration
Date has not yet occurred, 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 another subsection of
this Section 2.2, the Reload Option will become exercisable (“vest”) commencing
on the first (1st) 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
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.

 

February 2009

 

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(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, after the occurrence of a Change of Control Triggering Event but prior
to the occurrence of a Change of Control Failure or of the Change of Control
triggered by the Change of Control 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
of 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 of Control, provided that, at
the time the Change of 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

 

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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

 

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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.

 

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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 one year 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 or, if Optionee was a
party to a Change of Control Employment Agreement that was in effect at the time
of such termination of employment, within three years after the occurrence of a
Change of Control, 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 one year
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

 

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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 or its subsidiaries 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.

 

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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, the Reload Option and the Reload Agreement are effective as of the
Reload Option Grant Date.

 

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IN WITNESS WHEREOF, PNC has caused the Reload Agreement to be signed on its
behalf effective as of the Reload Option Grant Date.

THE PNC FINANCIAL SERVICES GROUP, INC.

By:

Chairman and Chief Executive Officer

ATTEST:

By:

Corporate Secretary

Accepted and agreed to as of the Reload Option Grant Date

 

 

 

Optionee

Annex A - Certain Definitions

Annex B - Notice of Exercise

Annex C - Tax Payment Election Form

 

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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;

 

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(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 of Control” means:

(a) Any individual, entity or group (within the meaning of Section 13(d)(3) or
14(d)(2) of the Securities Exchange Act of 1934, as amended (the “Exchange
Act”)) (a “Person”) becomes the beneficial owner (within the meaning of Rule
13d-3 promulgated under the Exchange Act) of 20% or more of either (A) the
then-outstanding shares of common stock of PNC (the “Outstanding PNC Common
Stock”) or (B) the combined voting power of the then-outstanding voting
securities of PNC entitled to vote generally in the election of directors (the
“Outstanding PNC Voting Securities”); provided, however, that, for purposes of
this Section A.4(a), the following acquisitions shall not constitute a Change of
Control: (1) any acquisition directly from PNC, (2) any acquisition by PNC,
(3) any acquisition by any employee benefit plan (or related trust) sponsored or
maintained by PNC or any company controlled by, controlling or under common
control with PNC (an “Affiliated Company”), (4) any acquisition pursuant to an
Excluded Combination (as defined in Section A.4(c)) or (5) an acquisition of
beneficial ownership representing between 20% and 40%, inclusive, of the
Outstanding PNC Voting Securities or Outstanding PNC Common Stock shall not be
considered a Change of Control if the Incumbent Board as of immediately prior to
any such acquisition approves such acquisition either prior to or immediately
after its occurrence;

(b) Individuals who, as of the date hereof, constitute the Board (the “Incumbent
Board”) cease for any reason to constitute at least a majority of the Board
(excluding any Board seat that is vacant or otherwise unoccupied); provided,
however, that any individual becoming a director subsequent to the date hereof
whose election, or nomination for election by PNC’s shareholders, was approved
by a vote of at least two-thirds of the directors then comprising the Incumbent
Board shall be considered as though such individual was a member of the
Incumbent Board, but excluding, for this purpose, any such individual whose
initial assumption of office occurs as a result of an actual or threatened
election contest with respect to the election or removal of directors or other
actual or threatened solicitation of proxies or consents by or on behalf of a
Person other than the Board;

 

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(c) Consummation of a reorganization, merger, statutory share exchange or
consolidation or similar transaction involving PNC or any of its subsidiaries, a
sale or other disposition of all or substantially all of the assets of PNC, or
the acquisition of assets or stock of another entity by PNC or any of its
subsidiaries (each, a “Business Combination”), excluding, however, a Business
Combination following which all or substantially all of the individuals and
entities that were the beneficial owners of the Outstanding PNC Common Stock and
the Outstanding PNC Voting Securities immediately prior to such Business
Combination beneficially own, directly or indirectly, more than 60% of the
then-outstanding shares of common stock (or, for a non-corporate entity,
equivalent securities) and the combined voting power of the then-outstanding
voting securities entitled to vote generally in the election of directors (or,
for a non-corporate entity, equivalent governing body), as the case may be, of
the entity resulting from such Business Combination (including, without
limitation, an entity that, as a result of such transaction, owns PNC or all or
substantially all of PNC’s assets either directly or through one or more
subsidiaries) in substantially the same proportions as their ownership
immediately prior to such Business Combination of the Outstanding PNC Common
Stock and the Outstanding PNC Voting Securities, as the case may be (such a
Business Combination, an “Excluded Combination”); or

(d) Approval by the shareholders of PNC of a complete liquidation or dissolution
of PNC.

A.5 “Change of Control Employment Agreement” means the written agreement, if
any, between Optionee and PNC providing, among other things, for certain
payments and benefits upon a qualifying termination of employment following a
change of control.

A.6 “Change of Control Failure” means the following:

(a) with respect to a Change of Control 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 Change of Control 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.7 “Change of Control Triggering Event” means the occurrence of either of the
following:

(a) the Board or PNC’s shareholders approve a transaction described in
Subsection (c) of the definition of Change of 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.

 

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A.11 “Coverage Period” means a period (a) commencing on the earlier to occur of
(i) the date of a Change of Control Triggering Event and (ii) the date of a
Change of Control and (b) ending on the date that is two (2) years after the
date of the Change of Control; provided, however, that in the event that a
Coverage Period commences on the date of a Change of Control Triggering Event,
such Coverage Period will terminate upon the earlier to occur of (x) the date of
a Change of Control Failure and (y) the date that is two (2) years after the
date of the Change of Control triggered by the Change of Control 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 (1st) 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 “Disabled” or “Disability” means, except as may otherwise be required by
Section 409A of the Internal Revenue Code, that Optionee either (i) is unable to
engage in any substantial gainful activity by reason of any medically
determinable physical or mental impairment that can be expected to result in
death or can be expected to last for a continuous period of not less than 12
months, or (ii) is, by reason of any medically determinable physical or mental
impairment that can be expected to result in death or can be expected to last
for a continuous period of not less than 12 months, receiving (and has received
for at least three months) income replacement benefits under any
Corporation-sponsored disability benefit plan. If Optionee has been determined
to be eligible for Social Security disability benefits, Optionee shall be
presumed to be Disabled as defined herein.

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

 

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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 (10th) 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) (with the Reload Option expiring
on the first date determined under any of such sections);

provided, however, if there is a Change of 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 of Control occurs, the
Reload Option will not expire at the earliest before the close of business on
the ninetieth (90th) day after the occurrence of the Change of Control (or the
tenth (10th) 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 of 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
of 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 of Control occurs.

In no event will the Reload Option remain outstanding beyond the tenth
(10th) 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 (10th) 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
(10th) anniversary of the Original Option Grant Date.

 

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(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
(3rd) anniversary of such Termination Date (but in no event later than on the
tenth (10th) anniversary of the Original Option Grant Date).

(4) Disability. If Optionee’s employment is terminated by the Corporation by
reason of Disability, then the Reload Option will expire on the third
(3rd) anniversary of such Termination Date (but in no event later than on the
tenth (10th) 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 (90th) day after
Optionee’s Termination Date (but in no event later than on the tenth
(10th) 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 (90th) 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 (90th) day after Optionee’s Termination Date (but in no event later
than on the tenth (10th) 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, 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

 

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(3) no determination that Optionee has engaged in Detrimental Conduct may be
made after the occurrence of a Change of 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) (i) the assignment to Optionee of any duties inconsistent in any respect
with, or any other diminution in, Optionee’s position (including status,
offices, titles and reporting requirements), authority, duties or
responsibilities such that Optionee’s position, authority, duties or
responsibilities are not at least commensurate in all material respects with the
most significant of those held, exercised and assigned to Optionee at any time
during the 120-day period immediately preceding the Change of Control, or if a
Change of Control has not yet occurred but there has been a Change of Control
Triggering Event, (ii) the assignment to Optionee of any duties inconsistent in
any material respect with, or any other material diminution in, Optionee’s
position (including status, offices, titles and reporting requirements),
authority, duties or responsibilities immediately prior to the Change of Control
Triggering Event, excluding in either case for this purpose an isolated,
insubstantial and inadvertent action not taken in bad faith and 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 to an annual
rate (i) that is less than 12 times the highest monthly base salary paid or
payable, including any base salary that has been earned but deferred, to
Optionee by the Corporation in respect of the 12-month period immediately
preceding the month in which the Change of Control occurs or, if a Change of
Control has not yet occurred but there has been a Change of Control Triggering
Event, (ii) that is less than 12 times the monthly base salary paid or payable,
including any base salary that has been earned but deferred, to Optionee by the
Corporation in respect of the month immediately preceding the month in which the
Change of Control Triggering Event occurs;

(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 Change of Control Triggering Event or the Change
of Control;

(d) other than an isolated, insubstantial and inadvertent failure not occurring
in bad faith and that is remedied by the Corporation promptly after receipt of
notice thereof given by Optionee, the failure by the Corporation to continue
Optionee’s participation in annual bonus, long-term cash incentive, equity
incentive, savings and retirement plans, practices, policies and programs that
provide Optionee with annual bonus opportunities, long-term incentive
opportunities (measured with respect to both regular and special incentive
opportunities, to the extent, if any, that such distinction is applicable),
savings opportunities and retirement benefit opportunities, in each case, no
less favorable, in the aggregate, than the most favorable of those provided by
the Corporation for Optionee under such plans, practices, policies and programs
as in effect (i) at any time during the 120-day period immediately preceding the
Change of Control, or if a Change of Control has not yet occurred but there has
been a Change of Control Triggering Event, (ii) immediately prior to the Change
of Control Triggering Event; or

(e) other than an isolated, insubstantial and inadvertent failure not occurring
in bad faith and that is remedied by the Corporation promptly after receipt of
notice thereof given by Optionee, the failure by the Corporation to continue to
provide Optionee with benefits under welfare benefit plans, practices, policies
and programs provided by the Corporation (including, without limitation,
medical, prescription, dental, vision, disability, employee life, group life,
accidental death and travel accident insurance plans and programs) no less
favorable, in the aggregate, than

 

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those provided to Optionee under the most favorable of such plans, practices,
policies and programs in effect for Optionee (i) at any time during the 120-day
period immediately preceding the Change of Control, or if a Change of Control
has not yet occurred but there has been a Change of Control Triggering Event,
(ii) immediately prior to the Change of Control Triggering Event.

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 “PNC” means The PNC Financial Services Group, Inc.

A.22 “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.23 “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.24 “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.25 “Retiree” means an Optionee who has Retired.

A.26 “Retire” or “Retirement” means termination of Optionee’s employment with
the Corporation at any time and for any reason (other than termination by reason
of Optionee’s death or by the Corporation for Cause and, if the Committee or the
CEO so determines prior to such divestiture, other than by reason of termination
in connection with a divestiture of assets or a divestiture of one or more
Subsidiaries of the Corporation) on or after the first date on which Optionee
has both attained at least age fifty-five (55) and completed 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 calculated under the provisions of
The PNC Financial Services Group, Inc. Pension Plan.

A.27 “Right(s)” means stock appreciation right(s) in accordance with the terms
of Article 7 of the Plan.

A.28 “SEC” means the U.S. Securities and Exchange Commission.

A.29 “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.30 “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.

 

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IRELAND

THE PNC FINANCIAL SERVICES GROUP, INC.

2006 INCENTIVE AWARD PLAN

NONSTATUTORY STOCK OPTION AGREEMENT

 

OPTIONEE:   «First_Name_MI» «Last_Name» GRANT DATE:               , 20    
OPTION PRICE:   $             per share COVERED SHARES:   «Shares»

1. Definitions; Grant of Option. Certain terms used in this Nonstatutory Stock
Option Agreement (the “Agreement”) are defined in Annex A hereto (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 then outstanding
and the Expiration Date has not yet occurred, the Option will vest as to Covered
Shares as set forth in this Section 2.2.

(b) Unless the Option has become fully vested pursuant to another subsection of
this Section 2.2, the Option will become exercisable (“vest”) as follows:

(i) as to one-third ( 1/3rd) of the Covered Shares (rounded down to the nearest
whole Share), commencing on the first (1st) 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 (2nd) 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 (1st) anniversary date of the Grant Date; and

 

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(iii) as to the remaining Covered Shares, commencing on the third
(3rd) 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 (1st) anniversary date of the
Grant Date.

(b) If Optionee’s employment is terminated by the Corporation by reason of
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.

(f) If, after the occurrence of a Change of Control Triggering Event but prior
to the occurrence of a Change of Control Failure or of the Change of Control
triggered by the Change of Control 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 of
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 of Control, provided that, at the time the
Change of 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.

(g) 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;

 

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(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.

 

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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

 

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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 one year after Optionee’s Termination Date regardless of the
reason for such termination of employment.

(c) 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.

 

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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 or, if Optionee was a
party to a Change of Control Employment Agreement that was in effect at the time
of such termination of employment, within three years after the occurrence of a
Change of Control, 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 one year
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.

 

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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 PNC or its subsidiaries
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, 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.

 

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(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.

 

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IN WITNESS WHEREOF, PNC has caused the Agreement to be signed on its behalf
effective as of the Grant Date.

 

THE PNC FINANCIAL SERVICES GROUP, INC. By:  

Chairman and Chief Executive Officer

ATTEST: By:  

Corporate Secretary

Accepted and agreed to as of the Grant Date

 

Optionee

Annex A - Certain Definitions

Annex B - Notice of Exercise

Annex C - Tax Payment Election Form

 

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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;

 

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(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 of Control” means:

(a) Any individual, entity or group (within the meaning of Section 13(d)(3) or
14(d)(2) of the Securities Exchange Act of 1934, as amended (the “Exchange
Act”)) (a “Person”) becomes the beneficial owner (within the meaning of Rule
13d-3 promulgated under the Exchange Act) of 20% or more of either (A) the
then-outstanding shares of common stock of PNC (the “Outstanding PNC Common
Stock”) or (B) the combined voting power of the then-outstanding voting
securities of PNC entitled to vote generally in the election of directors (the
“Outstanding PNC Voting Securities”); provided, however, that, for purposes of
this Section A.5(a), the following acquisitions shall not constitute a Change of
Control: (1) any acquisition directly from PNC, (2) any acquisition by PNC,
(3) any acquisition by any employee benefit plan (or related trust) sponsored or
maintained by PNC or any company controlled by, controlling or under common
control with PNC (an “Affiliated Company”), (4) any acquisition pursuant to an
Excluded Combination (as defined in Section A.5(c)) or (5) an acquisition of
beneficial ownership representing between 20% and 40%, inclusive, of the
Outstanding PNC Voting Securities or Outstanding PNC Common Stock shall not be
considered a Change of Control if the Incumbent Board as of immediately prior to
any such acquisition approves such acquisition either prior to or immediately
after its occurrence;

(b) Individuals who, as of the date hereof, constitute the Board (the “Incumbent
Board”) cease for any reason to constitute at least a majority of the Board
(excluding any Board seat that is vacant or otherwise unoccupied); provided,
however, that any individual becoming a director subsequent to the date hereof
whose election, or nomination for election by PNC’s shareholders, was approved
by a vote of at least two-thirds of the directors then comprising the Incumbent
Board shall be considered as though such individual was a member of the
Incumbent Board, but excluding, for this purpose, any such individual whose
initial assumption of office occurs as a result of an actual or threatened
election contest with respect to the election or removal of directors or other
actual or threatened solicitation of proxies or consents by or on behalf of a
Person other than the Board;

 

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(c) Consummation of a reorganization, merger, statutory share exchange or
consolidation or similar transaction involving PNC or any of its subsidiaries, a
sale or other disposition of all or substantially all of the assets of PNC, or
the acquisition of assets or stock of another entity by PNC or any of its
subsidiaries (each, a “Business Combination”), excluding, however, a Business
Combination following which all or substantially all of the individuals and
entities that were the beneficial owners of the Outstanding PNC Common Stock and
the Outstanding PNC Voting Securities immediately prior to such Business
Combination beneficially own, directly or indirectly, more than 60% of the
then-outstanding shares of common stock (or, for a non-corporate entity,
equivalent securities) and the combined voting power of the then-outstanding
voting securities entitled to vote generally in the election of directors (or,
for a non-corporate entity, equivalent governing body), as the case may be, of
the entity resulting from such Business Combination (including, without
limitation, an entity that, as a result of such transaction, owns PNC or all or
substantially all of PNC’s assets either directly or through one or more
subsidiaries) in substantially the same proportions as their ownership
immediately prior to such Business Combination of the Outstanding PNC Common
Stock and the Outstanding PNC Voting Securities, as the case may be (such a
Business Combination, an “Excluded Combination”); or

(d) Approval by the shareholders of PNC of a complete liquidation or dissolution
of PNC.

A.6 “Change of Control Employment Agreement” means the written agreement, if
any, between Optionee and PNC providing, among other things, for certain
payments and benefits upon a qualifying termination of employment following a
change of control.

A.7 “Change of Control Failure” means the following:

(a) with respect to a Change of Control 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 Change of Control 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.8 “Change of Control Triggering Event” means the occurrence of either of the
following:

(a) the Board or PNC’s shareholders approve a transaction described in
Subsection (c) of the definition of Change of 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.

 

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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 Change of Control Triggering Event and (ii) the date of a
Change of Control and (b) ending on the date that is two (2) years after the
date of the Change of Control; provided, however, that in the event that a
Coverage Period commences on the date of a Change of Control Triggering Event,
such Coverage Period will terminate upon the earlier to occur of (x) the date of
a Change of Control Failure and (y) the date that is two (2) years after the
date of the Change of Control triggered by the Change of Control 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 “Disabled” or “Disability” means, except as may otherwise be required by
Section 409A of the Internal Revenue Code, that Optionee either (i) is unable to
engage in any substantial gainful activity by reason of any medically
determinable physical or mental impairment that can be expected to result in
death or can be expected to last for a continuous period of not less than 12
months, or (ii) is, by reason of any medically determinable physical or mental
impairment that can be expected to result in death or can be expected to last
for a continuous period of not less than 12 months, receiving (and has received
for at least three months) income replacement benefits under any
Corporation-sponsored disability benefit plan. If Optionee has been determined
to be eligible for Social Security disability benefits, Optionee shall be
presumed to be Disabled as defined herein.

 

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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 (10th) 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) (with the Option expiring on the first date determined under any
of such sections);

provided, however, if there is a Change of 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 of Control occurs, the Option will not
expire at the earliest before the close of business on the ninetieth (90th) day
after the occurrence of the Change of Control (or the tenth (10th) anniversary
of the Grant Date if earlier), provided that either (1) Optionee is an employee
of the Corporation at the time the Change of 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 of 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 of
Control occurs.

In no event will the Option remain outstanding beyond the tenth
(10th) 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
(10th) 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 (10th) anniversary
of the Grant Date.

 

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(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
(3rd) anniversary of such Termination Date (but in no event later than on the
tenth (10th) anniversary of the Grant Date).

(4) Disability. If Optionee’s employment is terminated by the Corporation by
reason of Disability, then the Option will expire on the third (3rd) anniversary
of such Termination Date (but in no event later than on the tenth
(10th) 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 (90th) day
after Optionee’s Termination Date (but in no event later than on the tenth
(10th) 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
(90th) 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 (90th) day after Optionee’s Termination Date (but in no event
later than on the tenth (10th) 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, 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 of Control.

 

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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) (i) the assignment to Optionee of any duties inconsistent in any respect
with, or any other diminution in, Optionee’s position (including status,
offices, titles and reporting requirements), authority, duties or
responsibilities such that Optionee’s position, authority, duties or
responsibilities are not at least commensurate in all material respects with the
most significant of those held, exercised and assigned to Optionee at any time
during the 120-day period immediately preceding the Change of Control, or if a
Change of Control has not yet occurred but there has been a Change of Control
Triggering Event, (ii) the assignment to Optionee of any duties inconsistent in
any material respect with, or any other material diminution in, Optionee’s
position (including status, offices, titles and reporting requirements),
authority, duties or responsibilities immediately prior to the Change of Control
Triggering Event, excluding in either case for this purpose an isolated,
insubstantial and inadvertent action not taken in bad faith and 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 to an annual
rate (i) that is less than 12 times the highest monthly base salary paid or
payable, including any base salary that has been earned but deferred, to
Optionee by the Corporation in respect of the 12-month period immediately
preceding the month in which the Change of Control occurs or, if a Change of
Control has not yet occurred but there has been a Change of Control Triggering
Event, (ii) that is less than 12 times the monthly base salary paid or payable,
including any base salary that has been earned but deferred, to Optionee by the
Corporation in respect of the month immediately preceding the month in which the
Change of Control Triggering Event occurs;

(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 Change of Control Triggering Event or the Change
of Control;

(d) other than an isolated, insubstantial and inadvertent failure not occurring
in bad faith and that is remedied by the Corporation promptly after receipt of
notice thereof given by Optionee, the failure by the Corporation to continue
Optionee’s participation in annual bonus, long-term cash incentive, equity
incentive, savings and retirement plans, practices, policies and programs that
provide Optionee with annual bonus opportunities, long-term incentive
opportunities (measured with respect to both regular and special incentive
opportunities, to the extent, if any, that such distinction is applicable),
savings opportunities and retirement benefit opportunities, in each case, no
less favorable, in the aggregate, than the most favorable of those provided by
the Corporation for Optionee under such plans, practices, policies and programs
as in effect (i) at any time during the 120-day period immediately preceding the
Change of Control, or if a Change of Control has not yet occurred but there has
been a Change of Control Triggering Event, (ii) immediately prior to the Change
of Control Triggering Event; or

(e) other than an isolated, insubstantial and inadvertent failure not occurring
in bad faith and that is remedied by the Corporation promptly after receipt of
notice thereof given by Optionee, the failure by the Corporation to continue to
provide Optionee with benefits under welfare benefit plans, practices, policies
and programs provided by the Corporation (including, without limitation,
medical, prescription, dental, vision, disability, employee life, group life,
accidental

 

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death and travel accident insurance plans and programs) no less favorable, in
the aggregate, than those provided to Optionee under the most favorable of such
plans, practices, policies and programs in effect for Optionee (i) at any time
during the 120-day period immediately preceding the Change of Control, or if a
Change of Control has not yet occurred but there has been a Change of Control
Triggering Event, (ii) immediately prior to the Change of Control Triggering
Event.

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 “Plan” means The PNC Financial Services Group, Inc. 2006 Incentive Award
Plan.

A.29 “PNC” means The PNC Financial Services Group, Inc.

A.30 “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 at
any time and for any reason (other than termination by reason of Optionee’s
death or by the Corporation for Cause and, if the Committee or the CEO so
determines prior to such divestiture, other than by reason of termination in
connection with a divestiture of assets or a divestiture of one or more
subsidiaries of the Corporation) on or after the first date on which Optionee
has both attained at least age fifty-five (55) and completed 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 calculated under the provisions of
The PNC Financial Services Group, Inc. Pension Plan.

A.31 “Retiree” means an Optionee who has Retired.

A.32 “SEC” means the United States Securities and Exchange Commission.

A.33 “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.34 “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.

 

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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.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.

 

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THE PNC FINANCIAL SERVICES GROUP, INC.

2006 INCENTIVE AWARD PLAN

NONSTATUTORY STOCK OPTION AGREEMENT

 

OPTIONEE:    [Name] GRANT DATE:                        , 2009 OPTION PRICE:   
$            per share COVERED SHARES:    [Shares]

1. Definitions; Grant of Option. Certain terms used in this Nonstatutory Stock
Option Agreement (the “Agreement”) are defined in Annex A hereto (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 then outstanding
and the Expiration Date has not yet occurred, the Option will vest as to Covered
Shares as set forth in this Section 2.2.

(c) Unless the Option has become fully vested pursuant to another subsection of
this Section 2.2, the Option will become exercisable (“vest”) as follows:

(1) The Option will vest on the 3rd anniversary of the Grant Date if the
Committee determines in its reasonable discretion on or before that date that
the Performance Criteria as defined in Section A.28 of Annex A have been met.

In making its determination, the Committee shall be entitled to seek and rely in
good faith on such information, opinions, reports or statements, including
financial statements and other financial data, as the Committee deems
appropriate. Such information, opinions, reports or statements may be prepared
or presented by one or more officers or employees of the Corporation or by other
persons whom the Committee reasonably believes to be reliable and competent in
the matters presented.

It is anticipated that the Committee would consider and make its determination
as to whether or not the Performance Criteria have been met early in 2012 but no
later than the day immediately prior to the 3rd anniversary of the Grant Date.

 

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If the Committee determines that the Performance Criteria have been met in full,
the Option will vest as to all of the Covered Shares. If the Committee
determines that the Performance Criteria have not been met in full but have been
met in part, the Committee may determine in its discretion that the Option will
vest as to such portion of the Covered Shares as the Committee determines
appropriately reflects success against the Performance Criteria, in which case
the Option will vest as to those Covered Shares and will lapse as to the
unvested portion of the Covered Shares. Otherwise, if the Committee does not
determine in its reasonable discretion that the Performance Criteria have been
met by the 3rd anniversary of the Grant Date, the Option will lapse on such
date.

The Committee’s determinations with respect to the extent to which the
Performance Criteria have been met shall not vary between this Option and other
stock options granted under the Plan on                     , 2009 that contain
the same Performance Criteria.

(2) If not already vested at the time of termination of employment of the
Optionee by the Corporation by reason of Optionee’s Disability and not for
Cause, the Option will continue in effect in accordance with all provisions of
this Agreement other than those providing for an early Expiration Date due to
termination of employment and will be eligible for subsequent vesting thereafter
in accordance with the other provisions of this Section 2.2 as if the Optionee
had continued as an employee of the Corporation.

(3) If not already vested at the time of Retirement of the Optionee, (i) the
Option will, as to the portion of the Covered Shares that are Retirement Shares
as defined in Section A.32 of Annex A, continue in effect in accordance with all
provisions of this Agreement other than those providing for an early Expiration
Date due to termination of employment and will be eligible for subsequent
vesting thereafter in accordance with the other provisions of this Section 2.2
as if the Optionee had continued as an employee of the Corporation; and (ii) the
Option will lapse on Optionee’s Retirement date as to all of Optionee’s unvested
Covered Shares other than the Retirement Shares.

(4) If a Change of Control occurs prior to the 3rd anniversary of the Grant
Date, 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 of Control, unless the Committee affirmatively
determines prior to the time the Change of Control occurs that it is unlikely
that the Performance Criteria would have been met in which case the Option will
lapse effective as of the day immediately prior to the occurrence of the Change
of Control.

(b) [Intentionally omitted.]

(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 the Option is not already vested at the time of Optionee’s termination of
employment and if (i) such termination of employment occurs after a Change of
Control Triggering Event but prior to the occurrence of a Change of Control
Failure or of the Change of Control triggered by the Change of Control
Triggering Event and (ii) Optionee’s employment was terminated (other than by
reason of Optionee’s death) by the Corporation without Cause or by Optionee for
Good Reason, then the Option will continue in effect in accordance with all
provisions of this Agreement other than those providing for an early Expiration
Date due to termination of employment and will be eligible for subsequent
vesting thereafter in accordance with the other provisions of this Section 2.2
as if the Optionee had continued as an employee of the Corporation.

(e) [Intentionally omitted.]

(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.

 

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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

 

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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, to the extent vested and outstanding,
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

 

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(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 by PNC 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 one year after Optionee’s Termination Date regardless of the
reason for such termination of employment.

 

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(d) 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 or, if Optionee was a
party to a Change of Control Employment Agreement that was in effect at the time
of such termination of employment, within three years after the occurrence of a
Change of Control, 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 one year
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.

 

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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 PNC or its subsidiaries
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.

 

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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, the Option and the Agreement are effective as of the Grant Date.

IN WITNESS WHEREOF, PNC has caused the Agreement to be signed on its behalf
effective as of the Grant Date.

 

THE PNC FINANCIAL SERVICES GROUP, INC. By:     Chairman and Chief Executive
Officer

ATTEST:

By:    

Corporate Secretary

 

Accepted and agreed to as of the Grant Date

 

Optionee

Annex A - Certain Definitions

Annex B - Notice of Exercise

Annex C - Tax Payment Election Form

 

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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;

 

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(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 of Control” means:

(a) Any individual, entity or group (within the meaning of Section 13(d)(3) or
14(d)(2) of the Securities Exchange Act of 1934, as amended (the “Exchange
Act”)) (a “Person”) becomes the beneficial owner (within the meaning of Rule
13d-3 promulgated under the Exchange Act) of 20% or more of either (A) the
then-outstanding shares of common stock of PNC (the “Outstanding PNC Common
Stock”) or (B) the combined voting power of the then-outstanding voting
securities of PNC entitled to vote generally in the election of directors (the
“Outstanding PNC Voting Securities”); provided, however, that, for purposes of
this Section A.5(a), the following acquisitions shall not constitute a Change of
Control: (1) any acquisition directly from PNC, (2) any acquisition by PNC,
(3) any acquisition by any employee benefit plan (or related trust) sponsored or
maintained by PNC or any company controlled by, controlling or under common
control with PNC (an “Affiliated Company”), (4) any acquisition pursuant to an
Excluded Combination (as defined in Section A.5(c)) or (5) an acquisition of
beneficial ownership representing between 20% and 40%, inclusive, of the
Outstanding PNC Voting Securities or Outstanding PNC Common Stock shall not be
considered a Change of Control if the Incumbent Board as of immediately prior to
any such acquisition approves such acquisition either prior to or immediately
after its occurrence;

(b) Individuals who, as of the date hereof, constitute the Board (the “Incumbent
Board”) cease for any reason to constitute at least a majority of the Board
(excluding any Board seat that is vacant or otherwise unoccupied); provided,
however, that any individual becoming a director subsequent to the date hereof
whose election, or nomination for election by PNC’s shareholders, was approved
by a vote of at least two-thirds of the directors then comprising the Incumbent
Board shall be considered as though such individual was a member of the
Incumbent Board, but excluding, for this purpose, any such individual whose
initial assumption of office occurs as a result of an actual or threatened
election contest with respect to the election or removal of directors or other
actual or threatened solicitation of proxies or consents by or on behalf of a
Person other than the Board;

 

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(c) Consummation of a reorganization, merger, statutory share exchange or
consolidation or similar transaction involving PNC or any of its subsidiaries, a
sale or other disposition of all or substantially all of the assets of PNC, or
the acquisition of assets or stock of another entity by PNC or any of its
subsidiaries (each, a “Business Combination”), excluding, however, a Business
Combination following which all or substantially all of the individuals and
entities that were the beneficial owners of the Outstanding PNC Common Stock and
the Outstanding PNC Voting Securities immediately prior to such Business
Combination beneficially own, directly or indirectly, more than 60% of the
then-outstanding shares of common stock (or, for a non-corporate entity,
equivalent securities) and the combined voting power of the then-outstanding
voting securities entitled to vote generally in the election of directors (or,
for a non-corporate entity, equivalent governing body), as the case may be, of
the entity resulting from such Business Combination (including, without
limitation, an entity that, as a result of such transaction, owns PNC or all or
substantially all of PNC’s assets either directly or through one or more
subsidiaries) in substantially the same proportions as their ownership
immediately prior to such Business Combination of the Outstanding PNC Common
Stock and the Outstanding PNC Voting Securities, as the case may be (such a
Business Combination, an “Excluded Combination”); or

(d) Approval by the shareholders of PNC of a complete liquidation or dissolution
of PNC.

A.6 “Change of Control Employment Agreement” means the written agreement, if
any, between Optionee and PNC providing, among other things, for certain
payments and benefits upon a qualifying termination of employment following a
change of control.

A.7 “Change of Control Failure” means the following:

(a) with respect to a Change of Control 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 Change of Control 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.8 “Change of Control Triggering Event” means the occurrence of either of the
following:

(a) the Board or PNC’s shareholders approve a transaction described in
Subsection (c) of the definition of Change of 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.

 

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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 Change of Control Triggering Event and (ii) the date of a
Change of Control and (b) ending on the date that is two (2) years after the
date of the Change of Control; provided, however, that in the event that a
Coverage Period commences on the date of a Change of Control Triggering Event,
such Coverage Period will terminate upon the earlier to occur of (x) the date of
a Change of Control Failure and (y) the date that is two (2) years after the
date of the Change of Control triggered by the Change of Control 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 “Disabled” or “Disability” means, except as may otherwise be required by
Section 409A of the Internal Revenue Code, that Optionee either (i) is unable to
engage in any substantial gainful activity by reason of any medically
determinable physical or mental impairment that can be expected to result in
death or can be expected to last for a continuous period of not less than 12
months, or (ii) is, by reason of any medically determinable physical or mental
impairment that can be expected to result in death or can be expected to last
for a continuous period of not less than 12 months, receiving (and has received
for at least three months) income replacement benefits under any
Corporation-sponsored disability benefit plan. If Optionee has been determined
to be eligible for Social Security disability benefits, Optionee shall be
presumed to be Disabled as defined herein.

 

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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.

Unless the Option expires earlier pursuant to any of the provisions set forth in
Sections A.18(b) through A.18(d), the Option will expire as of the third
(3rd) anniversary of the Grant Date with respect to any Covered Shares as to
which the Option has not vested as of that date pursuant to Section 2.2 of the
Agreement or, if earlier and if applicable, the Option will expire at the time a
Change of Control occurs with respect to any Covered Shares as to which the
Option had not otherwise previously vested and which did not vest upon such
occurrence pursuant to Section 2.2 of the Agreement.

With respect to any Covered Shares as to which the Option has vested pursuant to
Section 2.2 of the Agreement, the Option will expire on the tenth
(10th) 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) (with the
Option expiring on the first date determined under any of such sections);

provided, however, if there is a Change of 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 of Control occurs, the Option will not
expire at the earliest before the close of business on the ninetieth (90th) day
after the occurrence of the Change of Control (or the tenth (10th) anniversary
of the Grant Date if earlier), provided that either (1) Optionee is an employee
of the Corporation at the time the Change of 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 of 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 of
Control occurs.

In no event will the Option remain outstanding beyond the tenth
(10th) 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) or (4) 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.

 

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(1) Retirement. Subject to Sections A.18(c)(6) and A.18(d), if the termination
of Optionee’s employment with the Corporation meets the definition of
Retirement, then the Option will expire on the tenth (10th) 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 (10th) anniversary
of the Grant Date.

(3) Termination during a Coverage Period without Cause or for 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 for Good Reason, then the Option will expire on the third
(3rd) anniversary of such Termination Date (but in no event later than on the
tenth (10th) anniversary of the Grant Date) with respect to any Covered Shares
as to which the Option is vested on such Termination Date or thereafter vests
pursuant to Section 2.2 of the Agreement.

(4) Disability. Subject to Section A.18(d), if Optionee’s employment is
terminated by the Corporation by reason of Disability, then the Option will
expire on the third (3rd) anniversary of such Termination Date (but in no event
later than on the tenth (10th) anniversary of the Grant Date).

(5) [Intentionally omitted.]

(6) Unvested Options Upon Retirement. If not already vested at the time Optionee
Retires, the Option will expire on the Termination Date with respect to any
Covered Shares that are not Retirement Shares.

(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, 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 of 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.

 

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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) (i) the assignment to Optionee of any duties inconsistent in any respect
with, or any other diminution in, Optionee’s position (including status,
offices, titles and reporting requirements), authority, duties or
responsibilities such that Optionee’s position, authority, duties or
responsibilities are not at least commensurate in all material respects with the
most significant of those held, exercised and assigned to Optionee at any time
during the 120-day period immediately preceding the Change of Control, or if a
Change of Control has not yet occurred but there has been a Change of Control
Triggering Event, (ii) the assignment to Optionee of any duties inconsistent in
any material respect with, or any other material diminution in, Optionee’s
position (including status, offices, titles and reporting requirements),
authority, duties or responsibilities immediately prior to the Change of Control
Triggering Event, excluding in either case for this purpose an isolated,
insubstantial and inadvertent action not taken in bad faith and 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 to an annual
rate (i) that is less than 12 times the highest monthly base salary paid or
payable, including any base salary that has been earned but deferred, to
Optionee by the Corporation in respect of the 12-month period immediately
preceding the month in which the Change of Control occurs or, if a Change of
Control has not yet occurred but there has been a Change of Control Triggering
Event, (ii) that is less than 12 times the monthly base salary paid or payable,
including any base salary that has been earned but deferred, to Optionee by the
Corporation in respect of the month immediately preceding the month in which the
Change of Control Triggering Event occurs;

(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 Change of Control Triggering Event or the Change
of Control;

(d) other than an isolated, insubstantial and inadvertent failure not occurring
in bad faith and that is remedied by the Corporation promptly after receipt of
notice thereof given by Optionee, the failure by the Corporation to continue
Optionee’s participation in annual bonus, long-term cash incentive, equity
incentive, savings and retirement plans, practices, policies and programs that
provide Optionee with annual bonus opportunities, long-term incentive
opportunities (measured with respect to both regular and special incentive
opportunities, to the extent, if any, that such distinction is applicable),
savings opportunities and retirement benefit opportunities, in each case, no
less favorable, in the aggregate, than the most favorable of those provided by
the Corporation for Optionee under such plans, practices, policies and programs
as in effect (i) at any time during the 120-day period immediately preceding the
Change of Control, or if a Change of Control has not yet occurred but there has
been a Change of Control Triggering Event, (ii) immediately prior to the Change
of Control Triggering Event; or

(e) other than an isolated, insubstantial and inadvertent failure not occurring
in bad faith and that is remedied by the Corporation promptly after receipt of
notice thereof given by Optionee, the failure by the Corporation to continue to
provide Optionee with benefits under welfare benefit plans, practices, policies
and programs provided by the Corporation (including, without limitation,
medical, prescription, dental, vision, disability, employee life, group life,
accidental death and travel accident insurance plans and programs) no less
favorable, in the aggregate, than those provided to Optionee under the most
favorable of such plans, practices, policies and programs in effect for Optionee
(i) at any time during the 120-day period immediately preceding the Change of
Control, or if a Change of Control has not yet occurred but there has been a
Change of Control Triggering Event, (ii) immediately prior to the Change of
Control Triggering Event.

 

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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 “Performance Criteria” means the following criteria related to PNC’s
acquisition and integration of National City Corporation:

(a) $1.2 billion of combined company annualized noninterest expense savings
achieved on a run-rate basis by 2011;

(b) On a consolidated basis, a return on assets at least equal to 0.90% by 2011;

(c) National City acquisition accretive to PNC’s earnings per share on a GAAP
basis by 2010;

(d) On track at the end of 2011 to achieve an internal rate of return on the
National City acquisition of at least 15%;

(e) Balance sheet acquired by PNC from National City positioned to meet PNC’s
desired risk profile by December 31, 2011;

(f) Successful implementation of PNC’s established enterprise risk management
discipline by December 31, 2011;

(g) Strong and reputable leadership team in place as of December 31, 2011; and

(h) Completed integration and PNC well-positioned for future growth as of
December 31, 2011.

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 at
any time and for any reason (other than termination by reason of Optionee’s
death or by the Corporation for Cause and, if the Committee or the CEO so
determines prior to such divestiture, other than by reason of termination in
connection with a divestiture of assets or a divestiture of one or more
subsidiaries of the Corporation) on or after the first date on which Optionee
has both attained at least age fifty-five (55) and completed 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 calculated under the provisions of
The PNC Financial Services Group, Inc. Pension Plan.

 

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A.32 [Alternate] “Retirement Shares” means that portion of the Covered Shares,
if any, equal to the total number of Covered Shares times the fraction obtained
by dividing the number of full quarters in the three year period from January 1,
2009 through December 31, 2011 completed on or prior to Optionee’s Retirement
Date by 12 (which is the number of quarters in the three year period). If
Optionee Retires before March 31, 2009, there will be no Retirement Shares. If
Optionee Retires on or after December 31, 2011, all of the Covered Shares will
be Retirement Shares.

A.32 [Alternate] “Retirement Shares” means that portion of the Covered Shares,
if any, determined as follows:

(1) If Optionee Retires before March 31, 2009, there will be no Retirement
Shares;

(2) If Optionee Retires on or after March 31, 2009 but before December 31, 2009,
the Retirement Shares will be equal to the total number of Covered Shares times
a fraction determined as follows: (a) the fraction will be  1/12 th if the last
full quarter completed before Optionee Retires is the 1st quarter of 2009,
(b) the fraction will be  1/6th if the last full quarter completed before
Optionee Retires is the 2nd quarter of 2009, and (c) the fraction will be  1/4th
if the last full quarter completed before Optionee Retires is the 3rd quarter of
2009;

(3) If Optionee Retires on or after December 31, 2009 but before December 31,
2010, the Retirement Shares will be equal to  1/3rd of the total number of
Covered Shares or such larger portion (not exceeding 100%) of the total number
of Covered Shares as the Committee (or its delegate) may approve prior to
Optionee’s Retirement Date;

(4) If Optionee Retires on or after December 31, 2010 but before December 31,
2011, the Retirement Shares will be equal to  3/4ths of the total number of
Covered Shares or such larger portion (not exceeding 100%) of the total number
of Covered Shares as the Committee (or its delegate) may approve prior to
Optionee’s Retirement Date; and

(5) If Optionee Retires on or after December 31, 2011, all of the Covered Shares
will be Retirement Shares.

A.33 “Retiree” means an Optionee who has Retired.

A.34 “SEC” means the U.S. Securities and Exchange Commission.

A.35 “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.36 “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.

 

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FORMS OF EMPLOYEE RESTRICTED STOCK, RESTRICTED SHARE UNIT,

AND PERFORMANCE UNIT AGREEMENTS

20     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

* * *

20     LONG-TERM INCENTIVE AWARD PROGRAM

* * *

RESTRICTED STOCK AGREEMENT

* * *

 

GRANTEE:    < name > GRANT DATE:                        , 20     SHARES:    <
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.”

 

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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.22 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.3 of Annex
A will be released and reissued to, or at the proper direction of, Grantee or
Grantee’s legal representative pursuant to Section 9.

4. Rights as Shareholder. Except as provided in Section 6 and subject to
Section 16, Grantee will have all the rights and privileges of a shareholder
with respect to the Restricted Shares including, but not limited to, the right
to vote the Restricted Shares and the right to receive dividends thereon if and
when declared by the Board; provided, however, that all such rights and
privileges will cease immediately upon any forfeiture of such shares.

5. Capital Adjustments. Restricted Shares awarded hereunder shall, as issued and
outstanding shares of PNC common stock, be subject to such adjustment as may be
necessary to reflect corporate transactions, including, without limitation,
stock dividends, stock splits, spin-offs, split-offs, recapitalizations,
mergers, consolidations or reorganizations of or by PNC; provided, however, that
any shares received as distributions on or in exchange for Unvested Shares shall
be subject to the terms and conditions of the Agreement as if they were
Restricted Shares.

 

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6. Prohibitions Against Sale, Assignment, etc.; Payment to Legal Representative.

(a) Unvested Shares may not be sold, assigned, transferred, exchanged, pledged,
hypothecated or otherwise encumbered, other than as may be required pursuant to
Section 10.2, unless and until the Restricted Period terminates and the Awarded
Shares are released and reissued by PNC pursuant to Section 9.

(b) If Grantee is deceased at the time Restricted Shares become Awarded Shares,
PNC will deliver such shares to the executor or administrator of Grantee’s
estate or to Grantee’s other legal representative as determined in good faith by
the Committee.

(c) Any delivery of shares or other payment made in good faith by PNC to
Grantee’s executor, administrator or other legal representative shall extinguish
all right to payment hereunder.

7. Forfeiture; Death; Qualifying Disability or Retirement Termination;
Termination in Anticipation of Change of Control.

7.1 Forfeiture on Termination of Employment. Except as otherwise provided in and
subject to the conditions of Section 7.3, Section 7.4(a), Section 7.5(a),
Section 7.6, Section 7.7, or Section 8, if applicable, in the event that
Grantee’s employment with the Corporation terminates prior to the third
(3rd) anniversary of the Grant Date, all Restricted Shares that are Unvested
Shares on Grantee’s Termination Date will be forfeited by Grantee to PNC without
payment of any consideration by PNC.

Upon forfeiture of Unvested Shares pursuant to the provisions of this
Section 7.1 or the provisions of Section 7.2, Section 7.4(b) or Section 7.5(b),
neither Grantee nor any successors, heirs, assigns or legal representatives of
Grantee will thereafter have any further rights or interest in such Unvested
Shares or any certificate or certificates representing such Unvested Shares.

7.2 Forfeiture for Detrimental Conduct. Unvested Shares that would otherwise
remain outstanding after Grantee’s Termination Date, if any, will be forfeited
by Grantee to PNC without payment of any consideration by PNC in the event that,
at any time prior to the date such shares become Awarded Shares, PNC determines
that Grantee has engaged in Detrimental Conduct; provided, however, that:
(a) this Section 7.2 will not apply to Restricted Shares that remain outstanding
after Grantee’s Termination Date pursuant to Section 7.3 or Section 7.6, if any;
(b) no determination that Grantee has engaged in Detrimental Conduct may be made
on or after the date of Grantee’s death; (c) Detrimental Conduct will not apply
to conduct by or activities of successors to the Restricted Shares by will or
the laws of descent and distribution in the event of Grantee’s death; and
(d) Detrimental Conduct will cease to apply to any Restricted Shares upon a
Change of Control.

 

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If any criminal charges are brought against Grantee alleging the commission of a
felony that relates to or arises out of Grantee’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 vesting of the Restricted Shares, to the extent that the Restricted
Shares are still outstanding and have not yet become Awarded Shares, or to
require the escrow of the proceeds of the shares. Any such suspension or escrow
is subject to the following restrictions:

(i) It may last only until the earliest to occur of the following:

(A) resolution of the criminal proceedings in a manner that constitutes
Detrimental Conduct;

(B) resolution of the criminal proceeding in one of the following ways: (1) the
charges as they relate to such alleged felony have been dismissed (with or
without prejudice), (2) Grantee has been acquitted of such alleged felony, or
(3) 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

(C) termination of the suspension or escrow in the discretion of the Committee;
and

(ii) It may be imposed only if the Committee makes reasonable provision for the
retention or realization of the value of the Restricted Shares to Grantee as if
no suspension or escrow had been imposed upon any termination of the suspension
or escrow under clauses (i)(B) or (C) above.

7.3 Death. In the event of Grantee’s death while an employee of the Corporation
and prior to the third (3rd) anniversary of the Grant Date, the Three-Year
Continued Employment Performance Goal will be deemed to have been achieved, and
the Restricted Period with respect to all then outstanding Unvested Shares, if
any, will terminate on the date of Grantee’s death.

The Restricted Shares which thereby become Awarded Shares will be released and
reissued by PNC to, or at the proper direction of, Grantee’s legal
representative pursuant to Section 9 as soon as administratively practicable
following such date.

7.4 Qualifying Disability Termination.

(a) In the event Grantee’s employment with the Corporation is terminated prior
to the third (3rd) anniversary of the Grant Date by the Corporation by reason of
Grantee’s Disability, Unvested Shares will not be automatically forfeited on
Grantee’s Termination Date. Instead, Unvested Shares will, subject to the
forfeiture provisions of Section 7.2 and Section 7.4(b), remain outstanding
pending and subject to affirmative approval of the vesting of the Restricted
Shares pursuant to this Section 7.4(a) by the Designated Person specified in
Section A.12 of Annex A.

 

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If such Unvested Shares are still outstanding but the Designated Person has not
made a specific determination to either approve or disapprove the vesting of the
Unvested Shares by the day immediately preceding the third (3rd) anniversary of
the Grant Date, then the Restricted Period will be automatically extended
through the first to occur of: (1) the day the Designated Person makes a
specific determination regarding such vesting; and (2) either (i) the ninetieth
(90th) day following the third (3rd ) anniversary of the Grant Date, if the
Designated Person is the Chief Human Resources Officer of PNC, or (ii) the 180th
day following such anniversary date if the Designated Person is the Committee or
its delegate, whichever is applicable; provided, however, if the Committee has
acted to suspend the vesting of the Restricted Shares pursuant to Section 7.2,
the Restricted Period will be extended until the terms of such suspension have
been satisfied.

If the vesting of the then outstanding Unvested Shares is affirmatively approved
by the Designated Person on or prior to the last day of the Restricted Period,
including any extension of the Restricted Period, if applicable, then the
Three-Year Continued Employment Performance Goal will be deemed to have been
achieved, and the Restricted Period with respect to all then outstanding
Unvested Shares, if any, will terminate as of the end of the day on the date of
such approval. The Restricted Shares outstanding at the termination of the
Restricted Period will become Awarded Shares and will be released and reissued
by PNC pursuant to Section 9.

(b) If the Designated Person disapproves the vesting of the Unvested Shares that
had remained outstanding after Grantee’s Termination Date pending and subject to
affirmative approval of vesting, then all such Unvested Shares that are still
outstanding will be forfeited by Grantee to PNC on such disapproval date without
payment of any consideration by PNC.

If by the end of the Restricted Period, including any extension of the
Restricted Period pursuant to the second paragraph of Section 7.4(a), if
applicable, the Designated Person has neither affirmatively approved nor
specifically disapproved the vesting of the Unvested Shares that had remained
outstanding after Grantee’s Termination Date pending and subject to affirmative
approval of vesting, then all such Unvested Shares that are still outstanding
will be forfeited by Grantee to PNC at the close of business on the last day of
the Restricted Period without payment of any consideration by PNC.

7.5 Qualifying Retirement.

(a) In the event that Grantee Retires on or after the first (1st) anniversary of
the Grant Date but prior to the third (3rd) anniversary of the Grant Date,
Unvested Shares will not be automatically forfeited on Grantee’s Termination
Date. Instead, Unvested Shares will, subject to the forfeiture provisions of
Section 7.2 and Section 7.5(b), remain outstanding pending and subject to
affirmative approval of the vesting of the Restricted Shares pursuant to this
Section 7.5(a) by the Designated Person specified in Section A.12 of Annex A.

 

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If such Unvested Shares are still outstanding but the Designated Person has not
made a specific determination to either approve or disapprove the vesting of the
Unvested Shares by the day immediately preceding the third (3rd) anniversary of
the Grant Date, then the Restricted Period will be automatically extended
through the first to occur of: (1) the day the Designated Person makes a
specific determination regarding such vesting; and (2) either (i) the ninetieth
(90th) day following the third (3rd ) anniversary of the Grant Date, if the
Designated Person is the Chief Human Resources Officer of PNC, or (ii) the 180th
day following such anniversary date if the Designated Person is the Committee or
its delegate, whichever is applicable; provided, however, if the Committee has
acted to suspend the vesting of the Restricted Shares pursuant to Section 7.2,
the Restricted Period will be extended until the terms of such suspension have
been satisfied.

If the vesting of the then outstanding Unvested Shares is affirmatively approved
by the Designated Person on or prior to the last day of the Restricted Period,
including any extension of the Restricted Period, if applicable, then the
Three-Year Continued Employment Performance Goal will be deemed to have been
achieved, and the Restricted Period with respect to all then outstanding
Unvested Shares, if any, will terminate as of the end of the day on the date of
such approval. The Restricted Shares outstanding at the termination of the
Restricted Period will become Awarded Shares and will be released and reissued
by PNC pursuant to Section 9.

(b) If the Designated Person disapproves the vesting of the Unvested Shares that
had remained outstanding after Grantee’s Termination Date pending and subject to
affirmative approval of vesting, then all such Unvested Shares that are still
outstanding will be forfeited by Grantee to PNC on such disapproval date without
payment of any consideration by PNC.

If by the end of the Restricted Period, including any extension of the
Restricted Period pursuant to the second paragraph of Section 7.5(a), if
applicable, the Designated Person has neither affirmatively approved nor
specifically disapproved the vesting of the Unvested Shares that had remained
outstanding after Grantee’s Termination Date pending and subject to affirmative
approval of vesting, then all such Unvested Shares that are still outstanding
will be forfeited by Grantee to PNC at the close of business on the last day of
the Restricted Period without payment of any consideration by PNC.

7.6 Termination in Anticipation of a Change of Control. Notwithstanding anything
in the Agreement to the contrary, if Grantee’s employment with the Corporation
is terminated by the Corporation prior to the third (3rd) anniversary of the
Grant Date and such termination is an Anticipatory Termination as defined in
Section A.2 of Annex A, then: (i) the Three-Year Continued Employment
Performance Goal will be deemed to have been achieved and the Restricted Period
with respect to any then outstanding Unvested Shares will terminate as of the
end of the day on the day immediately preceding Grantee’s Termination Date; and
(ii) all Restricted Shares that thereby become Awarded Shares will be released
and reissued by PNC pursuant to Section 9 as soon as administratively
practicable following such date.

 

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7.7 Other Committee Authority. Prior to the third (3rd) anniversary of the Grant
Date, the Committee or its delegate may in their sole discretion, but need not,
determine that, with respect to some or all of Grantee’s outstanding Unvested
Shares, the Three-Year Continued Employment Performance Goal will be deemed to
have been achieved and the Restricted Period with respect to such shares will
terminate, all subject to such restrictions, terms or conditions as the
Committee or its delegate may in their sole discretion determine.

8. Change of Control. Notwithstanding anything in the Agreement to the contrary,
upon the occurrence of a Change of Control: (i) if Grantee is an employee of the
Corporation as of the day immediately preceding the Change of Control, the
Three-Year Continued Employment Performance Goal will be deemed to have been
achieved and the Restricted Period will terminate with respect to all then
outstanding Unvested Shares, if any, as of the day immediately preceding the
Change of Control; (ii) if Grantee’s employment with the Corporation terminated
prior to the occurrence of the Change of Control but the Unvested Shares
remained outstanding after such termination of employment pursuant to
Section 7.4 or Section 7.5 and are still outstanding pending and subject to
affirmative approval of the vesting of such shares by the Designated Person
specified in Section A.12 of Annex A, then with respect to all Unvested Shares
outstanding as of the day immediately preceding the Change of Control, such
affirmative vesting approval will be deemed to have been given, the Three-Year
Continued Employment Performance Goal will be deemed to have been achieved, and
the Restricted Period will terminate, all as of the day immediately preceding
the Change of Control; and (iii) all Restricted Shares that thereby become
Awarded Shares will be released and reissued by PNC pursuant to Section 9 as
soon as administratively practicable following such date.

9. Termination of Prohibitions; Payment to Legal Representative. Except as
otherwise directed by the Committee pursuant to the suspension or escrow
provisions of Section 7.2, if and to the extent applicable, following
termination of the Restricted Period, PNC will release and issue or reissue the
then outstanding whole Restricted Shares that have become Awarded Shares without
the legend referred to in Section 3.

Upon release and issuance of shares that have become Awarded Shares in
accordance with this Section 9, PNC or its designee will deliver such whole
shares to, or at the proper direction of, Grantee or Grantee’s legal
representative.

Any delivery of shares or other payment made in good faith by PNC to Grantee’s
executor, administrator or other legal representative shall extinguish all right
to payment hereunder.

 

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10. Payment of Taxes.

10.1 Internal Revenue Code Section 83(b) Election. In the event that Grantee
makes an Internal Revenue Code Section 83(b) election with respect to the
Restricted Shares, Grantee shall satisfy all then applicable federal, state or
local withholding tax obligations arising from that election (a) by payment of
cash or (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, by physical delivery to
PNC of certificates for whole shares of PNC common stock that are not subject to
any contractual restriction, pledge or other encumbrance and that have been
owned by Grantee for at least six (6) months and, in the case of restricted
stock, for which it has been at least six (6) months since the restrictions
lapsed, or by a combination of cash and such stock. Any such tax election shall
be made pursuant to a form to be provided to Grantee by PNC on request. For
purposes of this Section 10.1, shares of PNC common stock that are used to
satisfy applicable withholding tax obligations will be valued at their Fair
Market Value on the date the tax withholding obligation arises. Grantee will
provide to PNC a copy of any Internal Revenue Code Section 83(b) election filed
by Grantee with respect to the Restricted Shares not later than ten (10) days
after the filing of such election.

10.2 Other Tax Liabilities. Where Grantee has not previously satisfied all
applicable withholding tax obligations, PNC will, at the time the tax
withholding obligation arises, retain sufficient whole shares of PNC common
stock from the shares granted pursuant to the Agreement to satisfy the minimum
amount of taxes then required to be withheld by the Corporation in connection
with the Restricted Shares. For purposes of this Section 10.2, shares of PNC
common stock retained to satisfy applicable withholding tax requirements will be
valued at their Fair Market Value on the date the tax withholding obligation
arises.

PNC will not retain more than the number of shares sufficient to satisfy the
minimum amount of taxes then required to be withheld in connection with the
Restricted Shares. If Grantee desires to have an additional amount withheld
above the required minimum, up to Grantee’s W-4 obligation if higher, and if PNC
so permits, Grantee may elect to satisfy this additional withholding either:
(a) by payment of cash; or (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,
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 Grantee for at least six (6) months and, in the case of
restricted stock, for which it has been at least six (6) months since the
restrictions lapsed. Any such tax election shall be made pursuant to a form
provided by PNC. Shares of PNC common stock that are used for this purpose will
be valued at their Fair Market Value on the date the tax withholding obligation
arises. If Grantee’s W-4 obligation does not exceed the required minimum
withholding in connection with the Restricted Shares, no additional withholding
may be made.

 

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11. Employment. Neither the granting and issuance of the Restricted Shares nor
any term or provision of the Agreement shall constitute or be evidence of any
understanding, expressed or implied, on the part of PNC or any subsidiary to
employ Grantee for any period or in any way alter Grantee’s status as an
employee at will.

12. Subject to the Plan and the Committee. In all respects the Grant and the
Agreement are subject to the terms and conditions of the Plan, which has been
made available to Grantee and is incorporated herein by reference; provided,
however, the terms of the Plan shall not be considered an enlargement of any
benefits under the Agreement. Further, the Grant and the Agreement are subject
to any interpretation of, and any rules and regulations issued by, the Committee
or its delegate or under the authority of the Committee, whether made or issued
before or after the Grant Date.

13. Headings; Entire Agreement. Headings used in the Agreement are provided for
reference and convenience only, shall not be considered part of the Agreement,
and shall not be employed in the construction of the Agreement. The Agreement
constitutes the entire agreement between Grantee and PNC and supersedes all
other discussions, negotiations, correspondence, representations, understandings
and agreements between the parties with respect to the subject matter hereof.

14. Grantee Covenants.

14.1 General. Grantee and PNC acknowledge and agree that Grantee has received
adequate consideration with respect to enforcement of the provisions of
Sections 14 and 15 by virtue of receiving this grant of Restricted Shares
(regardless of whether such shares ultimately become Awarded Shares); 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 Grantee from earning a living.

14.2 Non-Solicitation; No-Hire. Grantee agrees to comply with the provisions of
subsections (a) and (b) of this Section 14.2 while employed by the Corporation
and for a period of one year after Grantee’s Termination Date regardless of the
reason for such termination of employment.

(a) Non-Solicitation. Grantee shall not, directly or indirectly, either for
Grantee’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 Grantee 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.

 

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(b) No-Hire. Grantee shall not, directly or indirectly, either for Grantee’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
Grantee assist any other Person in such activities.

Notwithstanding the above, if Grantee’s employment with the Corporation is
terminated by the Corporation and such termination is an Anticipatory
Termination, then commencing immediately after such Termination Date, the
provisions of subsections (a) and (b) of this Section 14.2 will no longer apply
and will be replaced with the following subsection (c):

(c) No-Hire. Grantee agrees that Grantee shall not, for a period of one year
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.

14.3 Confidentiality. During Grantee’s employment with the Corporation, and
thereafter regardless of the reason for termination of such employment, Grantee
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 Grantee, 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.

14.4 Ownership of Inventions. Grantee 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 Grantee during the term of Grantee’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”). Grantee
agrees to assign and hereby does assign to PNC or its designee all of Grantee’s
right, title and interest, including copyrights and patent rights, in and to all
Developments. Grantee 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 14.4
shall be performed by Grantee without further compensation and will continue
beyond the Termination Date.

15. Enforcement Provisions. Grantee understands and agrees to the following
provisions regarding enforcement of the Agreement.

 

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15.1 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, Grantee
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.

15.2 Equitable Remedies. A breach of the provisions of any of Sections 14.2,
14.3 or 14.4 will cause the Corporation irreparable harm, and the Corporation
will therefore be entitled to issuance of immediate, as well as permanent,
injunctive relief restraining Grantee, and each and every person and entity
acting in concert or participating with Grantee, from initiation and/or
continuation of such breach.

15.3 Tolling Period. If it becomes necessary or desirable for the Corporation to
seek compliance with the provisions of Section 14.2 by legal proceedings, the
period during which Grantee 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.

15.4 No Waiver. Failure of PNC to demand strict compliance with any of the
terms, covenants or conditions of the Agreement will not be deemed a waiver of
such term, covenant or condition, nor will 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.

15.5 Severability. The restrictions and obligations imposed by Sections 14.2,
14.3 and 14.4 are separate and severable, and it is the intent of Grantee 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 will remain
valid and binding upon Grantee.

15.6 Reform. In the event any of Sections 14.2, 14.3 and 14.4 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 Grantee and PNC that said court reduce and reform the provisions
thereof so as to apply the greatest limitations considered enforceable by the
court.

15.7 Waiver of Jury Trial. Each of Grantee 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 14.2, 14.3 and 14.4.

15.8 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

 

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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 Grantee, Grantee agrees to reimburse PNC for
any amounts Grantee may be required to reimburse PNC or its subsidiaries
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 Grantee reimburse PNC or its
subsidiaries for such amounts pursuant to Section 304 of the Sarbanes-Oxley Act
of 2002.

15.9. Compliance with Internal Revenue Code Section 409A. It is the intention of
the parties that the Grant 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,
Grantee agrees that PNC may, without the consent of Grantee, modify the
Agreement and the Grant 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.

16. Acceptance of Grant; PNC Right to Cancel. If Grantee does not accept the
Grant by executing and delivering a copy of the Agreement to PNC, without
altering or changing the terms thereof in any way, within thirty (30) days of
receipt by Grantee of a copy of the Agreement, PNC may, in its sole discretion,
withdraw its offer and cancel the Grant at any time prior to Grantee’s delivery
to PNC of a copy of the Agreement executed by Grantee. Otherwise, upon execution
and delivery of the Agreement by both PNC and Grantee, the Agreement is
effective.

Grantee will not have any of the rights of a shareholder with respect to the
Restricted Shares as set forth in Section 4, and will not have the right to vote
or to receive dividends on such shares, until the date the Agreement is
effective and the Restricted Shares are issued in accordance with this
Section 16.

In the event that one or more record dates for dividends on PNC common stock
occur after the Grant Date but before the date the Agreement is effective in
accordance with this Section 16 and the Restricted Shares are issued, then upon
the effectiveness of the Agreement, the Corporation will make a cash payment to
Grantee equivalent to the amount of the dividends Grantee would have received
had the Agreement been effective and the Restricted Shares had been issued on
the Grant Date. Any such amount will be payable in accordance with applicable
regular payroll practice as in effect from time to time for similarly situated
employees.

 

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IN WITNESS WHEREOF, PNC has caused the Agreement to be signed on its behalf as
of the Grant Date.

 

THE PNC FINANCIAL SERVICES GROUP, INC. By:   Chairman and Chief Executive
Officer ATTEST: By:   Corporate Secretary ACCEPTED AND AGREED TO by GRANTEE

 

Grantee

 

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ANNEX A

CERTAIN DEFINITIONS

* * *

A.1 “Agreement” means the Restricted Stock Agreement between PNC and Grantee
evidencing the Grant of the Restricted Shares Award to Grantee pursuant to the
Plan.

A.2 “Anticipatory Termination.” If Grantee’s employment with the Corporation is
terminated by the Corporation other than for Cause, death or Disability prior to
the date on which a Change of Control occurs, and if it is reasonably
demonstrated by Grantee that such termination of employment (i) was at the
request of a third party that has taken steps reasonably calculated to effect a
Change of Control or (ii) otherwise arose in connection with or anticipation of
a Change of Control, such a termination of employment is an “Anticipatory
Termination.”

For purposes of this definition, “Cause” shall mean:

(a) the willful and continued failure of Grantee to substantially perform
Grantee’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 Grantee by the Board or the CEO which
specifically identifies the manner in which the Board or the CEO believes that
Grantee has not substantially performed Grantee’s duties; or

(b) the willful engaging by Grantee 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 (a) and (b), no act or failure to act, on
the part of Grantee, shall be considered willful unless it is done, or omitted
to be done, by Grantee in bad faith and without reasonable belief that Grantee’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 Grantee’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 Grantee in good faith and in the best interests of the Corporation.

The cessation of employment of Grantee will be deemed to be a termination of
Grantee’s employment with the Corporation for Cause for purposes of the
Agreement only if and when there shall have been delivered to Grantee, as part
of the notice of Grantee’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, Grantee is guilty of

 

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conduct described in clause (a) or clause (b) above and, in either case,
specifying the particulars thereof in detail. Such resolution shall be adopted
only after (i) reasonable notice of such Board meeting is provided to Grantee,
together with written notice that PNC believes that Grantee is guilty of conduct
described in clause (a) or clause (b) above and, in either case, specifying the
particulars thereof in detail, and (ii) Grantee is given an opportunity,
together with counsel, to be heard before the Board.

A.3 “Awarded Shares.” Provided that the Restricted Shares are then outstanding,
Restricted Shares become “Awarded Shares” when all of the following have
occurred: (a) the Three-Year Continued Employment Performance Goal has been
achieved or is deemed to have been achieved pursuant to the terms of the
Agreement; (b) the Restricted Period has terminated; and (c) if the Committee
has acted to suspend the vesting of the Restricted Shares pursuant to
Section 7.2 of the Agreement, the terms of such suspension have been satisfied
and the Restricted Shares have not been forfeited.

A.4 “Board” means the Board of Directors of PNC.

A.5 “Cause.” Except as otherwise provided in Section A.2, “Cause” means:

(a) the willful and continued failure of Grantee to substantially perform
Grantee’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 Grantee by PNC that specifically
identifies the manner in which it is believed that Grantee has not substantially
performed Grantee’s duties;

(b) a material breach by Grantee 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;

(c) any act of fraud, misappropriation, material dishonesty, or embezzlement by
Grantee against PNC or one of its subsidiaries or any client or customer of PNC
or a subsidiary;

(d) any conviction (including a plea of guilty or of nolo contendere) of Grantee
for, or entry by Grantee into a pre-trial disposition with respect to, the
commission of a felony; or

(e) entry of any order against Grantee, 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 Grantee’s employment or other
service relationship with the Corporation.

Except as otherwise provided in Section A.2, the cessation of employment of
Grantee will be deemed to have been a termination of Grantee’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 Grantee is the CEO, the Board) determines that
Grantee is guilty of

 

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conduct described in clause (a), (b) or (c) above or that an event described in
clause (d) or (e) above has occurred with respect to Grantee and, if so,
determines that the termination of Grantee’s employment with the Corporation
will be deemed to have been for Cause.

A.6 “CEO” means the chief executive officer of PNC.

A.7 “Change of Control” means:

(a) Any individual, entity or group (within the meaning of Section 13(d)(3) or
14(d)(2) of the Securities Exchange Act of 1934, as amended (the “Exchange
Act”)) (a “Person”) becomes the beneficial owner (within the meaning of Rule
13d-3 promulgated under the Exchange Act) of 20% or more of either (A) the
then-outstanding shares of common stock of PNC (the “Outstanding PNC Common
Stock”) or (B) the combined voting power of the then-outstanding voting
securities of PNC entitled to vote generally in the election of directors (the
“Outstanding PNC Voting Securities”); provided, however, that, for purposes of
this Section A.7(a), the following acquisitions shall not constitute a Change of
Control: (1) any acquisition directly from PNC, (2) any acquisition by PNC,
(3) any acquisition by any employee benefit plan (or related trust) sponsored or
maintained by PNC or any company controlled by, controlling or under common
control with PNC (an “Affiliated Company”), (4) any acquisition pursuant to an
Excluded Combination (as defined in Section A.7(c)) or (5) an acquisition of
beneficial ownership representing between 20% and 40%, inclusive, of the
Outstanding PNC Voting Securities or Outstanding PNC Common Stock shall not be
considered a Change of Control if the Incumbent Board as of immediately prior to
any such acquisition approves such acquisition either prior to or immediately
after its occurrence;

(b) Individuals who, as of the date hereof, constitute the Board (the “Incumbent
Board”) cease for any reason to constitute at least a majority of the Board
(excluding any Board seat that is vacant or otherwise unoccupied); provided,
however, that any individual becoming a director subsequent to the date hereof
whose election, or nomination for election by PNC’s shareholders, was approved
by a vote of at least two-thirds of the directors then comprising the Incumbent
Board shall be considered as though such individual was a member of the
Incumbent Board, but excluding, for this purpose, any such individual whose
initial assumption of office occurs as a result of an actual or threatened
election contest with respect to the election or removal of directors or other
actual or threatened solicitation of proxies or consents by or on behalf of a
Person other than the Board;

(c) Consummation of a reorganization, merger, statutory share exchange or
consolidation or similar transaction involving PNC or any of its subsidiaries, a
sale or other disposition of all or substantially all of the assets of PNC, or
the acquisition of assets or stock of another entity by PNC or any of its
subsidiaries (each, a “Business Combination”), excluding, however, a Business
Combination following which all or substantially all of the individuals and
entities that were the beneficial owners of the Outstanding PNC Common Stock and
the Outstanding PNC Voting Securities immediately prior to such Business
Combination beneficially own, directly or indirectly,

 

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more than 60% of the then-outstanding shares of common stock (or, for a
non-corporate entity, equivalent securities) and the combined voting power of
the then-outstanding voting securities entitled to vote generally in the
election of directors (or, for a non-corporate entity, equivalent governing
body), as the case may be, of the entity resulting from such Business
Combination (including, without limitation, an entity that, as a result of such
transaction, owns PNC or all or substantially all of PNC’s assets either
directly or through one or more subsidiaries) in substantially the same
proportions as their ownership immediately prior to such Business Combination of
the Outstanding PNC Common Stock and the Outstanding PNC Voting Securities, as
the case may be (such a Business Combination, an “Excluded Combination”); or

(d) Approval by the shareholders of PNC of a complete liquidation or dissolution
of PNC.

A.8 “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.9 “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 (a) engaged in business activities similar to some or
all of the business activities of PNC or any subsidiary as of Grantee’s
Termination Date or (b) engaged in business activities which Grantee knows PNC
or any subsidiary intends to enter within the first twelve (12) months after
Grantee’s Termination Date or, if later and if applicable, after the date
specified in clause (ii) of Section A.13(a), in either case whether Grantee 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 “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.11 “Corporation” means PNC and its Consolidated Subsidiaries.

A.12 “Designated Person” will be either: (a) the Committee or its delegate, if
Grantee was a member of the Corporate Executive Group (or equivalent successor
classification) or was subject to the reporting requirements of Section 16(a) of
the Exchange Act with respect to PNC securities when he or she ceased to be an
employee of the Corporation; or (b) the Chief Human Resources Officer of PNC, if
Grantee is not within one of the groups specified in Section A.12(a).

 

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A.13 “Detrimental Conduct” means, for purposes of the Agreement:

(a) Grantee 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 Grantee’s
Termination Date and extending through (and including) the first
(1st) anniversary of the later of (i) Grantee’s Termination Date and, if
different, (ii) the first date after Grantee’s Termination Date as of which
Grantee ceases to be engaged by the Corporation in any capacity for which
Grantee 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 Grantee 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 Grantee
for, or any entry by Grantee into a pre-trial disposition with respect to, the
commission of a felony that relates to or arises out of Grantee’s employment or
other service relationship with the Corporation.

Grantee will be deemed to have engaged in Detrimental Conduct for purposes of
the Agreement only if and when the Committee (if Grantee 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 Grantee was not such an executive
officer), whichever is applicable, determines that Grantee 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 Grantee, and, if so, determines
that Grantee will be deemed to have engaged in Detrimental Conduct.

A.14 “Disabled” or “Disability” means, except as may otherwise be required by
Section 409A of the Internal Revenue Code, that Grantee either (i) is unable to
engage in any substantial gainful activity by reason of any medically
determinable physical or mental impairment that can be expected to result in
death or can be expected to last for a continuous period of not less than 12
months, or (ii) is, by reason of any medically determinable physical or mental
impairment that can be expected to result in death or can be expected to last
for a continuous period of not less than 12 months, receiving (and has received
for at least three months) income replacement benefits under any
Corporation-sponsored disability benefit plan. If Grantee has been determined to
be eligible for Social Security disability benefits, Grantee shall be presumed
to be Disabled as defined herein.

A.15 “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.

 

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A.16 “GAAP” or “generally accepted accounting principles” means accounting
principles generally accepted in the United States of America.

A.17 “Grant” means the Restricted Shares Award granted to Grantee pursuant to
Section 2 of the Agreement and pursuant to which the Restricted Shares are
issued to Grantee subject to the restrictions set forth in and the terms and
conditions of the Agreement and the Plan.

A.18 “Grant Date” means the Grant Date set forth on page 1 of the Agreement and
is the date as of which the Restricted Shares Award is authorized to be granted
by the Committee or its delegate in accordance with the Plan.

A.19 “Grantee” means the person to whom the Restricted Stock Award is granted
and the Restricted Shares are issued, and is identified as Grantee on page 1 of
the Agreement.

A.20 “Internal Revenue Code” means the Internal Revenue Code of 1986 as amended,
and the rules and regulations promulgated thereunder.

A.21 “PNC” means The PNC Financial Services Group, Inc.

A.22 “Restricted Period” means, subject to early termination if so determined by
the Committee or its delegate or pursuant to Section 7.6 of the Agreement, if
applicable, the period from the Grant Date through (and including) the earlier
of: (a) the date of Grantee’s death; (b) the day immediately preceding the day a
Change of Control is deemed to have occurred; and (c) the day immediately
preceding the third (3rd) anniversary of the Grant Date or, if later, the last
day of any extension of the Restricted Period pursuant to Section 7.4(a) or
Section 7.5(a) of the Agreement, if applicable.

A.23 “Retire” or “Retirement” means termination of Grantee’s employment with the
Corporation at any time and for any reason (other than termination by reason of
Grantee’s death or by the Corporation for Cause and, if the Committee or the CEO
so determines prior to such divestiture, other than by reason of termination in
connection with a divestiture of assets or a divestiture of one or more
subsidiaries of the Corporation) on or after the first date on which Grantee has
both attained at least age fifty-five (55) and completed 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 calculated under the provisions of
The PNC Financial Services Group, Inc. Pension Plan.

A.24 “Retiree” means a Grantee who has Retired.

A.25 “SEC” means the United States Securities and Exchange Commission.

A.26 “Termination Date” means Grantee’s last date of employment with the
Corporation. If Grantee is employed by a Consolidated Subsidiary that ceases to
be a

 

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subsidiary of PNC or ceases to be a consolidated subsidiary of PNC under
generally accepted accounting principles and Grantee does not continue to be
employed by PNC or a Consolidated Subsidiary, then for purposes of the
Agreement, Grantee’s employment with the Corporation terminates effective at the
time this occurs.

A.27 “Three-Year Continued Employment Performance Goal” means, subject to early
achievement if so determined by the Committee or its delegate or to deemed
achievement pursuant to Section 7.3, Section 7.4, Section 7.5, Section 7.6, or
Section 8 of the Agreement, if applicable, that Grantee has been continuously
employed by the Corporation for the period from the Grant Date through (and
including) the day immediately preceding the first of the following to occur:
(a) the third (3rd) anniversary of the Grant Date; (b) the date of Grantee’s
death; and (c) the day a Change of Control is deemed to have occurred.

A.28 “Unvested Shares” means any Restricted Shares that are not Awarded Shares.

 

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Annual 25/25 Program – 20     Restricted Stock Grant

Continued Employment Performance Goal

Restricted Period: Three Years (100%)

THE PNC FINANCIAL SERVICES GROUP, INC.

2006 INCENTIVE AWARD PLAN

* * *

RESTRICTED STOCK AGREEMENT

* * *

 

GRANTEE:    < name > GRANT DATE:                        , 20     SHARES:    <
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.22 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.

 

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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.3 of Annex
A will be released and reissued to, or at the proper direction of, Grantee or
Grantee’s legal representative pursuant to Section 9.

4. Rights as Shareholder. Except as provided in Section 6 and subject to
Section 7.6(b), if applicable, and to Section 16, Grantee will have all the
rights and privileges of a shareholder with respect to the Restricted Shares
including, but not limited to, the right to vote the Restricted Shares and the
right to receive dividends thereon if and when declared by the Board; provided,
however, that all such rights and privileges will cease immediately upon any
forfeiture of such shares.

5. Capital Adjustments. Restricted Shares awarded hereunder shall, as issued and
outstanding shares of PNC common stock, be subject to such adjustment as may be
necessary to reflect corporate transactions, including, without limitation,
stock dividends, stock splits, spin-offs, split-offs, recapitalizations,
mergers, consolidations or reorganizations of or by PNC; provided, however, that
any shares received as distributions on or in exchange for Unvested Shares shall
be subject to the terms and conditions of the Agreement as if they were
Restricted Shares.

6. Prohibitions Against Sale, Assignment, etc.; Payment to Legal Representative.

(a) Unvested Shares may not be sold, assigned, transferred, exchanged, pledged,
hypothecated or otherwise encumbered, other than as may be required pursuant to
Section 10.2, unless and until the Restricted Period terminates and the Awarded
Shares are released and reissued by PNC pursuant to Section 9.

 

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(b) If Grantee is deceased at the time Restricted Shares become Awarded Shares,
PNC will deliver such shares to the executor or administrator of Grantee’s
estate or to Grantee’s other legal representative as determined in good faith by
the Committee.

(c) Any delivery of shares or other payment made in good faith by PNC to
Grantee’s executor, administrator or other legal representative shall extinguish
all right to payment hereunder.

7. Forfeiture; Death; Qualifying Disability, Retirement, or DEAP Termination;
Termination in Anticipation of Change of Control.

7.1 Forfeiture on Termination of Employment. Except as otherwise provided in and
subject to the conditions of Section 7.3, Section 7.4(a), Section 7.5(a),
Section 7.6(a), Section 7.7, Section 7.8, or Section 8, if applicable, in the
event that Grantee’s employment with the Corporation terminates prior to the
third (3rd) anniversary of the Grant Date, all Restricted Shares that are
Unvested Shares on Grantee’s Termination Date will be forfeited by Grantee to
PNC without payment of any consideration by PNC.

Upon forfeiture of Unvested Shares pursuant to the provisions of this
Section 7.1 or the provisions of Section 7.2, Section 7.4(b), Section 7.5(b) or
Section 7.6(c), neither Grantee nor any successors, heirs, assigns or legal
representatives of Grantee will thereafter have any further rights or interest
in such Unvested Shares or any certificate or certificates representing such
Unvested Shares.

7.2 Forfeiture for Detrimental Conduct. Unvested Shares that would otherwise
remain outstanding after Grantee’s Termination Date, if any, will be forfeited
by Grantee to PNC without payment of any consideration by PNC in the event that,
at any time prior to the date such shares become Awarded Shares, PNC determines
that Grantee has engaged in Detrimental Conduct; provided, however, that:
(a) this Section 7.2 will not apply to Restricted Shares that remain outstanding
after Grantee’s Termination Date pursuant to Section 7.3 or Section 7.7, if any;
(b) no determination that Grantee has engaged in Detrimental Conduct may be made
on or after the date of Grantee’s death; (c) Detrimental Conduct will not apply
to conduct by or activities of successors to the Restricted Shares by will or
the laws of descent and distribution in the event of Grantee’s death; and
(d) Detrimental Conduct will cease to apply to any Restricted Shares upon a
Change of Control.

If any criminal charges are brought against Grantee alleging the commission of a
felony that relates to or arises out of Grantee’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 vesting of the Restricted Shares, to the extent that the Restricted
Shares are still outstanding and have not yet become Awarded Shares, or to
require the escrow of the proceeds of the shares. Any such suspension or escrow
is subject to the following restrictions:

(i) It may last only until the earliest to occur of the following:

(A) resolution of the criminal proceedings in a manner that constitutes
Detrimental Conduct;

 

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(B) resolution of the criminal proceeding in one of the following ways: (1) the
charges as they relate to such alleged felony have been dismissed (with or
without prejudice), (2) Grantee has been acquitted of such alleged felony, or
(3) 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

(C) termination of the suspension or escrow in the discretion of the Committee;
and

(ii) It may be imposed only if the Committee makes reasonable provision for the
retention or realization of the value of the Restricted Shares to Grantee as if
no suspension or escrow had been imposed upon any termination of the suspension
or escrow under clauses (i)(B) or (C) above.

7.3 Death. In the event of Grantee’s death while an employee of the Corporation
and prior to the third (3rd) anniversary of the Grant Date, the Three-Year
Continued Employment Performance Goal will be deemed to have been achieved, and
the Restricted Period with respect to all then outstanding Unvested Shares, if
any, will terminate on the date of Grantee’s death.

The Restricted Shares which thereby become Awarded Shares will be released and
reissued by PNC to, or at the proper direction of, Grantee’s legal
representative pursuant to Section 9 as soon as administratively practicable
following such date.

7.4 Qualifying Disability Termination.

(a) In the event Grantee’s employment with the Corporation is terminated prior
to the third (3 rd) anniversary of the Grant Date by the Corporation by reason
of Grantee’s Disability, Unvested Shares will not be automatically forfeited on
Grantee’s Termination Date. Instead, Unvested Shares will, subject to the
forfeiture provisions of Section 7.2 and Section 7.4(b), remain outstanding
pending and subject to affirmative approval of the vesting of the Restricted
Shares pursuant to this Section 7.4(a) by the Designated Person specified in
Section A.12 of Annex A.

If such Unvested Shares are still outstanding but the Designated Person has not
made a specific determination to either approve or disapprove the vesting of the
Unvested

 

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Shares by the day immediately preceding the third (3rd) anniversary of the Grant
Date, then the Restricted Period will be automatically extended through the
first to occur of: (1) the day the Designated Person makes a specific
determination regarding such vesting; and (2) either (i) the ninetieth
(90th) day following the third (3rd) anniversary of the Grant Date, if the
Designated Person is the Chief Human Resources Officer of PNC, or (ii) the 180th
day following such anniversary date if the Designated Person is the Committee or
its delegate, whichever is applicable; provided, however, if the Committee has
acted to suspend the vesting of the Restricted Shares pursuant to Section 7.2,
the Restricted Period will be extended until the terms of such suspension have
been satisfied.

If the vesting of the then outstanding Unvested Shares is affirmatively approved
by the Designated Person on or prior to the last day of the Restricted Period,
including any extension of the Restricted Period, if applicable, then the
Three-Year Continued Employment Performance Goal will be deemed to have been
achieved, and the Restricted Period with respect to all then outstanding
Unvested Shares, if any, will terminate as of the end of the day on the date of
such approval. The Restricted Shares outstanding at the termination of the
Restricted Period will become Awarded Shares and will be released and reissued
by PNC pursuant to Section 9.

(b) If the Designated Person disapproves the vesting of the Unvested Shares that
had remained outstanding after Grantee’s Termination Date pending and subject to
affirmative approval of vesting, then all such Unvested Shares that are still
outstanding will be forfeited by Grantee to PNC on such disapproval date without
payment of any consideration by PNC.

If by the end of the Restricted Period, including any extension of the
Restricted Period pursuant to the second paragraph of Section 7.4(a), if
applicable, the Designated Person has neither affirmatively approved nor
specifically disapproved the vesting of the Unvested Shares that had remained
outstanding after Grantee’s Termination Date pending and subject to affirmative
approval of vesting, then all such Unvested Shares that are still outstanding
will be forfeited by Grantee to PNC at the close of business on the last day of
the Restricted Period without payment of any consideration by PNC.

7.5 Qualifying Retirement.

(a) In the event that Grantee Retires prior to the third (3rd) anniversary of
the Grant Date, Unvested Shares will not be automatically forfeited on Grantee’s
Termination Date. Instead, Unvested Shares will, subject to the forfeiture
provisions of Section 7.2 and Section 7.5(b), remain outstanding pending and
subject to affirmative approval of the vesting of the Restricted Shares pursuant
to this Section 7.5(a) by the Designated Person specified in Section A.12 of
Annex A.

 

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If such Unvested Shares are still outstanding but the Designated Person has not
made a specific determination to either approve or disapprove the vesting of the
Unvested Shares by the day immediately preceding the third (3rd) anniversary of
the Grant Date, then the Restricted Period will be automatically extended
through the first to occur of:

(1) the day the Designated Person makes a specific determination regarding such
vesting; and (2) either (i) the ninetieth (90th) day following the third
(3rd) anniversary of the Grant Date, if the Designated Person is the Chief Human
Resources Officer of PNC, or (ii) the 180th day following such anniversary date
if the Designated Person is the Committee or its delegate, whichever is
applicable; provided, however, if the Committee has acted to suspend the vesting
of the Restricted Shares pursuant to Section 7.2, the Restricted Period will be
extended until the terms of such suspension have been satisfied.

If the vesting of the then outstanding Unvested Shares is affirmatively approved
by the Designated Person on or prior to the last day of the Restricted Period,
including any extension of the Restricted Period, if applicable, then the
Three-Year Continued Employment Performance Goal will be deemed to have been
achieved, and the Restricted Period with respect to all then outstanding
Unvested Shares, if any, will terminate as of the end of the day on the date of
such approval. The Restricted Shares outstanding at the termination of the
Restricted Period will become Awarded Shares and will be released and reissued
by PNC pursuant to Section 9.

(b) If the Designated Person disapproves the vesting of the Unvested Shares that
had remained outstanding after Grantee’s Termination Date pending and subject to
affirmative approval of vesting, then all such Unvested Shares that are still
outstanding will be forfeited by Grantee to PNC on such disapproval date without
payment of any consideration by PNC.

If by the end of the Restricted Period, including any extension of the
Restricted Period pursuant to the second paragraph of Section 7.5(a), if
applicable, the Designated Person has neither affirmatively approved nor
specifically disapproved the vesting of the Unvested Shares that had remained
outstanding after Grantee’s Termination Date pending and subject to affirmative
approval of vesting, then all such Unvested Shares that are still outstanding
will be forfeited by Grantee to PNC at the close of business on the last day of
the Restricted Period without payment of any consideration by PNC.

7.6 Qualifying DEAP Termination.

(a) In the event that Grantee’s employment with the Corporation is terminated
prior to the third (3rd) anniversary of the Grant Date by the Corporation and
Grantee is offered and has entered into the standard Waiver and Release
Agreement with PNC or a Consolidated Subsidiary under an applicable PNC or
Consolidated Subsidiary Displaced Employee Assistance Plan, or any successor
plan by whatever name known (“DEAP”), or Grantee is offered and has entered into
a similar waiver and release agreement between PNC or a Consolidated Subsidiary
and Grantee pursuant to the terms of an agreement or arrangement entered into by
PNC or a Consolidated Subsidiary and Grantee in lieu of or in addition to the
DEAP, then Unvested Shares will not be automatically forfeited on Grantee’s
Termination Date. Instead, Unvested Shares will, subject to the forfeiture
provisions of Section 7.2 and Section 7.6(c), remain outstanding pending and
subject to affirmative approval of the vesting of the Restricted Shares pursuant
to this Section 7.6(a) by the Designated Person specified in Section A.12 of
Annex A, provided that Grantee does not revoke such waiver and release agreement
within the time for revocation of such waiver and release agreement by Grantee.

 

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If such Unvested Shares are still outstanding but the Designated Person has not
made a specific determination to either approve or disapprove the vesting of the
Unvested Shares by the day immediately preceding the third (3rd) anniversary of
the Grant Date, then the Restricted Period will be automatically extended
through the first to occur of: (1) the day the Designated Person makes a
specific determination regarding such vesting; and (2) either (i) the ninetieth
(90th) day following the third (3rd ) anniversary of the Grant Date, if the
Designated Person is the Chief Human Resources Officer of PNC, or (ii) the 180th
day following such anniversary date if the Designated Person is the Committee or
its delegate, whichever is applicable; provided, however, if the Committee has
acted to suspend the vesting of the Restricted Shares pursuant to Section 7.2,
the Restricted Period will be extended until the terms of such suspension have
been satisfied.

If the vesting of the then outstanding Unvested Shares is affirmatively approved
by the Designated Person on or prior to the last day of the Restricted Period,
including any extension of the Restricted Period, if applicable, then the
Three-Year Continued Employment Performance Goal will be deemed to have been
achieved, and the Restricted Period with respect to all then outstanding
Unvested Shares, if any, will terminate as of the end of the day on the date of
such approval. The Restricted Shares outstanding at the termination of the
Restricted Period will become Awarded Shares and will be released and reissued
by PNC pursuant to Section 9.

(b) In the event that the record date for any dividend payable with respect to
the Unvested Shares occurs on or after Grantee’s Termination Date but prior to
the lapse of the time for revocation by Grantee of the waiver and release
agreement specified in the first paragraph of Section 7.6(a), then such dividend
will be held, without interest, pending and subject to satisfaction of the
condition of Section 7.6(a) that Grantee enter into the offered waiver and
release agreement and not revoke such waiver and release agreement within the
time for revocation of such agreement by Grantee. In the event that this
condition is not met, any dividend being held pending and subject to
satisfaction of such condition will be forfeited by Grantee to PNC without
payment of any consideration by PNC.

(c) If (i) Grantee does not enter into, or enters into but revokes, the waiver
and release agreement specified in the first paragraph of Section 7.6(a) or
(ii) the Designated Person disapproves the vesting of the Unvested Shares that
had remained outstanding after Grantee’s Termination Date pending and subject to
the non-revocation of, and the lapse of the time within which Grantee may
revoke, such waiver and release agreement and pending and subject to affirmative
approval of the vesting of such shares, then all such Unvested Shares that are
still outstanding will be forfeited by Grantee to PNC on the date such failure
to satisfy the conditions of Section 7.6(a) occurs without payment of any
consideration by PNC.

 

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If, by the end of the Restricted Period, including any extension of the
Restricted Period pursuant to the second paragraph of Section 7.6(a), if
applicable, such Unvested Shares are still outstanding but the Designated Person
has neither affirmatively approved nor specifically disapproved the vesting of
such shares, then all such Unvested Shares will be forfeited by Grantee to PNC
at the close of business on the last day of the Restricted Period without
payment of any consideration by PNC.

7.7 Termination in Anticipation of a Change of Control. Notwithstanding anything
in the Agreement to the contrary, if Grantee’s employment with the Corporation
is terminated by the Corporation prior to the third (3rd) anniversary of the
Grant Date and such termination is an Anticipatory Termination as defined in
Section A.2 of Annex A, then: (i) the Three-Year Continued Employment
Performance Goal will be deemed to have been achieved and the Restricted Period
with respect to any then outstanding Unvested Shares will terminate as of the
end of the day on the day immediately preceding Grantee’s Termination Date; and
(ii) all Restricted Shares that thereby become Awarded Shares will be released
and reissued by PNC pursuant to Section 9 as soon as administratively
practicable following such date.

7.8 Other Committee Authority. Prior to the third (3rd) anniversary of the Grant
Date, the Committee or its delegate may in their sole discretion, but need not,
determine that, with respect to some or all of Grantee’s outstanding Unvested
Shares, the Three-Year Continued Employment Performance Goal will be deemed to
have been achieved and the Restricted Period with respect to such shares will
terminate, all subject to such restrictions, terms or conditions as the
Committee or its delegate may in their sole discretion determine.

8. Change of Control. Notwithstanding anything in the Agreement to the contrary,
upon the occurrence of a Change of Control: (i) if Grantee is an employee of the
Corporation as of the day immediately preceding the Change of Control, the
Three-Year Continued Employment Performance Goal will be deemed to have been
achieved and the Restricted Period will terminate with respect to all then
outstanding Unvested Shares, if any, as of the day immediately preceding the
Change of Control; (ii) if Grantee’s employment with the Corporation terminated
prior to the occurrence of the Change of Control but the Unvested Shares
remained outstanding after such termination of employment pursuant to
Section 7.4, Section 7.5 or Section 7.6 and are still outstanding pending and
subject to affirmative approval of the vesting of such shares by the Designated
Person specified in Section A.12 of Annex A, then with respect to all Unvested
Shares outstanding as of the day immediately preceding the Change of Control,
such affirmative vesting approval will be deemed to have been given, the
Three-Year Continued Employment Performance Goal will be deemed to have been
achieved, and the Restricted Period will terminate, all as of the day
immediately preceding the Change of Control, provided, however, in the case of
Unvested Shares that remained outstanding post-employment solely pursuant to
Section 7.6(a), that Grantee entered into and does not revoke the waiver and
release agreement specified in Section 7.6(a); and (iii) all Restricted Shares
that thereby become Awarded Shares will be released and reissued by PNC pursuant
to Section 9 as soon as administratively practicable following such date.

 

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9. Termination of Prohibitions; Payment to Legal Representative. Except as
otherwise directed by the Committee pursuant to the suspension or escrow
provisions of Section 7.2, if and to the extent applicable, following
termination of the Restricted Period, PNC will release and issue or reissue the
then outstanding whole Restricted Shares that have become Awarded Shares without
the legend referred to in Section 3.

Upon release and issuance of shares that have become Awarded Shares in
accordance with this Section 9, PNC or its designee will deliver such whole
shares to, or at the proper direction of, Grantee or Grantee’s legal
representative.

Any delivery of shares or other payment made in good faith by PNC to Grantee’s
executor, administrator or other legal representative shall extinguish all right
to payment hereunder.

10. Payment of Taxes.

10.1 Internal Revenue Code Section 83(b) Election. In the event that Grantee
makes an Internal Revenue Code Section 83(b) election with respect to the
Restricted Shares, Grantee shall satisfy all then applicable federal, state or
local withholding tax obligations arising from that election (a) by payment of
cash or (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, by physical delivery to
PNC of certificates for whole shares of PNC common stock that are not subject to
any contractual restriction, pledge or other encumbrance and that have been
owned by Grantee for at least six (6) months and, in the case of restricted
stock, for which it has been at least six (6) months since the restrictions
lapsed, or by a combination of cash and such stock. Any such tax election shall
be made pursuant to a form to be provided to Grantee by PNC on request. For
purposes of this Section 10.1, shares of PNC common stock that are used to
satisfy applicable withholding tax obligations will be valued at their Fair
Market Value on the date the tax withholding obligation arises. Grantee will
provide to PNC a copy of any Internal Revenue Code Section 83(b) election filed
by Grantee with respect to the Restricted Shares not later than ten (10) days
after the filing of such election.

10.2 Other Tax Liabilities. Where Grantee has not previously satisfied all
applicable withholding tax obligations, PNC will, at the time the tax
withholding obligation arises, retain sufficient whole shares of PNC common
stock from the shares granted pursuant to the Agreement to satisfy the minimum
amount of taxes then required to be withheld by the Corporation in connection
with the Restricted Shares. For purposes of this Section 10.2, shares of PNC
common stock retained to satisfy applicable withholding tax requirements will be
valued at their Fair Market Value on the date the tax withholding obligation
arises.

PNC will not retain more than the number of shares sufficient to satisfy the
minimum amount of taxes then required to be withheld in connection with the
Restricted Shares. If Grantee desires to have an additional amount withheld
above the required

 

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minimum, up to Grantee’s W-4 obligation if higher, and if PNC so permits,
Grantee may elect to satisfy this additional withholding either: (a) by payment
of cash; or (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, 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
Grantee for at least six (6) months and, in the case of restricted stock, for
which it has been at least six (6) months since the restrictions lapsed. Any
such tax election shall be made pursuant to a form provided by PNC. Shares of
PNC common stock that are used for this purpose will be valued at their Fair
Market Value on the date the tax withholding obligation arises. If Grantee’s W-4
obligation does not exceed the required minimum withholding in connection with
the Restricted Shares, no additional withholding may be made.

11. Employment. Neither the granting and issuance of the Restricted Shares nor
any term or provision of the Agreement shall constitute or be evidence of any
understanding, expressed or implied, on the part of PNC or any subsidiary to
employ Grantee for any period or in any way alter Grantee’s status as an
employee at will.

12. Subject to the Plan and the Committee. In all respects the Grant and the
Agreement are subject to the terms and conditions of the Plan, which has been
made available to Grantee and is incorporated herein by reference; provided,
however, the terms of the Plan shall not be considered an enlargement of any
benefits under the Agreement. Further, the Grant and the Agreement are subject
to any interpretation of, and any rules and regulations issued by, the Committee
or its delegate or under the authority of the Committee, whether made or issued
before or after the Grant Date.

13. Headings; Entire Agreement. Headings used in the Agreement are provided for
reference and convenience only, shall not be considered part of the Agreement,
and shall not be employed in the construction of the Agreement. The Agreement
constitutes the entire agreement between Grantee and PNC and supersedes all
other discussions, negotiations, correspondence, representations, understandings
and agreements between the parties with respect to the subject matter hereof.

14. Grantee Covenants.

14.1 General. Grantee and PNC acknowledge and agree that Grantee has received
adequate consideration with respect to enforcement of the provisions of
Sections 14 and 15 by virtue of receiving this grant of Restricted Shares
(regardless of whether such shares ultimately become Awarded Shares); 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 Grantee from earning a living.

14.2 Non-Solicitation; No-Hire. Grantee agrees to comply with the provisions of
subsections (a) and (b) of this Section 14.2 while employed by the Corporation
and for a period of one year after Grantee’s Termination Date regardless of the
reason for such termination of employment.

 

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(a) Non-Solicitation. Grantee shall not, directly or indirectly, either for
Grantee’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 Grantee 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. Grantee shall not, directly or indirectly, either for Grantee’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
Grantee assist any other Person in such activities.

Notwithstanding the above, if Grantee’s employment with the Corporation is
terminated by the Corporation and such termination is an Anticipatory
Termination, then commencing immediately after such Termination Date, the
provisions of subsections (a) and (b) of this Section 14.2 will no longer apply
and will be replaced with the following subsection (c):

(c) No-Hire. Grantee agrees that Grantee shall not, for a period of one year
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.

14.3 Confidentiality. During Grantee’s employment with the Corporation, and
thereafter regardless of the reason for termination of such employment, Grantee
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 Grantee, 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.

14.4 Ownership of Inventions. Grantee 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 Grantee during the term of Grantee’s
employment with the Corporation, whether alone or with others, and that are
(a) related directly or indirectly to

 

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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”). Grantee agrees to assign and hereby does assign to
PNC or its designee all of Grantee’s right, title and interest, including
copyrights and patent rights, in and to all Developments. Grantee 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 14.4 shall be performed by Grantee
without further compensation and will continue beyond the Termination Date.

15. Enforcement Provisions. Grantee understands and agrees to the following
provisions regarding enforcement of the Agreement.

15.1 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, Grantee
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.

15.2 Equitable Remedies. A breach of the provisions of any of Sections 14.2,
14.3 or 14.4 will cause the Corporation irreparable harm, and the Corporation
will therefore be entitled to issuance of immediate, as well as permanent,
injunctive relief restraining Grantee, and each and every person and entity
acting in concert or participating with Grantee, from initiation and/or
continuation of such breach.

15.3 Tolling Period. If it becomes necessary or desirable for the Corporation to
seek compliance with the provisions of Section 14.2 by legal proceedings, the
period during which Grantee 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.

15.4 No Waiver. Failure of PNC to demand strict compliance with any of the
terms, covenants or conditions of the Agreement will not be deemed a waiver of
such term, covenant or condition, nor will 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.

15.5 Severability. The restrictions and obligations imposed by Sections 14.2,
14.3 and 14.4 are separate and severable, and it is the intent of Grantee 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 will remain
valid and binding upon Grantee.

 

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15.6 Reform. In the event any of Sections 14.2, 14.3 and 14.4 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 Grantee and PNC that said court reduce and reform the provisions
thereof so as to apply the greatest limitations considered enforceable by the
court.

15.7 Waiver of Jury Trial. Each of Grantee 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 14.2, 14.3 and 14.4.

15.8 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 Grantee, Grantee agrees to reimburse PNC for
any amounts Grantee may be required to reimburse PNC or its subsidiaries
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 Grantee reimburse PNC or its
subsidiaries for such amounts pursuant to Section 304 of the Sarbanes-Oxley Act
of 2002.

15.9. Compliance with Internal Revenue Code Section 409A. It is the intention of
the parties that the Grant 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,
Grantee agrees that PNC may, without the consent of Grantee, modify the
Agreement and the Grant 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.

16. Acceptance of Grant; PNC Right to Cancel. If Grantee does not accept the
Grant by executing and delivering a copy of the Agreement to PNC, without
altering or changing the terms thereof in any way, within thirty (30) days of
receipt by Grantee of a copy of the Agreement, PNC may, in its sole discretion,
withdraw its offer and cancel the Grant at any time prior to Grantee’s delivery
to PNC of a copy of the Agreement executed by Grantee. Otherwise, upon execution
and delivery of the Agreement by both PNC and Grantee, the Agreement is
effective.

 

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Grantee will not have any of the rights of a shareholder with respect to the
Restricted Shares as set forth in Section 4, and will not have the right to vote
or to receive dividends on such shares, until the date the Agreement is
effective and the Restricted Shares are issued in accordance with this
Section 16.

In the event that one or more record dates for dividends on PNC common stock
occur after the Grant Date but before the date the Agreement is effective in
accordance with this Section 16 and the Restricted Shares are issued, then upon
the effectiveness of the Agreement, the Corporation will make a cash payment to
Grantee equivalent to the amount of the dividends Grantee would have received
had the Agreement been effective and the Restricted Shares had been issued on
the Grant Date. Any such amount will be payable in accordance with applicable
regular payroll practice as in effect from time to time for similarly situated
employees.

IN WITNESS WHEREOF, PNC has caused the Agreement to be signed on its behalf as
of the Grant Date.

 

THE PNC FINANCIAL SERVICES GROUP, INC.

By:   Chairman and Chief Executive Officer

ATTEST:

By:   Corporate Secretary ACCEPTED AND AGREED TO by GRANTEE

 

Grantee

 

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ANNEX A

CERTAIN DEFINITIONS

*  *  *

A.1 “Agreement” means the Restricted Stock Agreement between PNC and Grantee
evidencing the Grant of the Restricted Shares Award to Grantee pursuant to the
Plan.

A.2 “Anticipatory Termination.” If Grantee’s employment with the Corporation is
terminated by the Corporation other than for Cause, death or Disability prior to
the date on which a Change of Control occurs, and if it is reasonably
demonstrated by Grantee that such termination of employment (i) was at the
request of a third party that has taken steps reasonably calculated to effect a
Change of Control or (ii) otherwise arose in connection with or anticipation of
a Change of Control, such a termination of employment is an “Anticipatory
Termination.”

For purposes of this definition, Cause shall mean:

(a) the willful and continued failure of Grantee to substantially perform
Grantee’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 Grantee by the Board or the CEO which
specifically identifies the manner in which the Board or the CEO believes that
Grantee has not substantially performed Grantee’s duties; or

(b) the willful engaging by Grantee 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 (a) and (b), no act or failure to act, on
the part of Grantee, shall be considered willful unless it is done, or omitted
to be done, by Grantee in bad faith and without reasonable belief that Grantee’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 Grantee’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 Grantee in good faith and in the best interests of the Corporation.

The cessation of employment of Grantee will be deemed to be a termination of
Grantee’s employment with the Corporation for Cause for purposes of the
Agreement only if and when there shall have been delivered to Grantee, as part
of the notice of Grantee’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, Grantee is guilty of conduct described in
clause (a) or clause (b) above and, in either case, specifying the

 

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particulars thereof in detail. Such resolution shall be adopted only after
(i) reasonable notice of such Board meeting is provided to Grantee, together
with written notice that PNC believes that Grantee is guilty of conduct
described in clause (a) or clause (b) above and, in either case, specifying the
particulars thereof in detail, and (ii) Grantee is given an opportunity,
together with counsel, to be heard before the Board.

A.3 “Awarded Shares.” Provided that the Restricted Shares are then outstanding,
Restricted Shares become “Awarded Shares” when all of the following have
occurred: (a) the Three-Year Continued Employment Performance Goal has been
achieved or is deemed to have been achieved pursuant to the terms of the
Agreement; (b) the Restricted Period has terminated; and (c) if the Committee
has acted to suspend the vesting of the Restricted Shares pursuant to
Section 7.2 of the Agreement, the terms of such suspension have been satisfied
and the Restricted Shares have not been forfeited.

A.4 “Board” means the Board of Directors of PNC.

A.5 “Cause.” Except as otherwise provided in Section A.2, “Cause” means:

(a) the willful and continued failure of Grantee to substantially perform
Grantee’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 Grantee by PNC that specifically
identifies the manner in which it is believed that Grantee has not substantially
performed Grantee’s duties;

(b) a material breach by Grantee 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;

(c) any act of fraud, misappropriation, material dishonesty, or embezzlement by
Grantee against PNC or one of its subsidiaries or any client or customer of PNC
or a subsidiary;

(d) any conviction (including a plea of guilty or of nolo contendere) of Grantee
for, or entry by Grantee into a pre-trial disposition with respect to, the
commission of a felony; or

(e) entry of any order against Grantee, 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 Grantee’s employment or other
service relationship with the Corporation.

Except as otherwise provided in Section A.2, the cessation of employment of
Grantee will be deemed to have been a termination of Grantee’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 Grantee is the CEO, the Board) determines that
Grantee is guilty of conduct described in clause (a), (b) or (c) above or that
an event described in clause (d) or (e) above has occurred with respect to
Grantee and, if so, determines that the termination of Grantee’s employment with
the Corporation will be deemed to have been for Cause.

 

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A.6 “CEO” means the chief executive officer of PNC.

A.7 “Change of Control” means:

(a) Any individual, entity or group (within the meaning of Section 13(d)(3) or
14(d)(2) of the Securities Exchange Act of 1934, as amended (the “Exchange
Act”)) (a “Person”) becomes the beneficial owner (within the meaning of Rule
13d-3 promulgated under the Exchange Act) of 20% or more of either (A) the
then-outstanding shares of common stock of PNC (the “Outstanding PNC Common
Stock”) or (B) the combined voting power of the then-outstanding voting
securities of PNC entitled to vote generally in the election of directors (the
“Outstanding PNC Voting Securities”); provided, however, that, for purposes of
this Section A.7(a), the following acquisitions shall not constitute a Change of
Control: (1) any acquisition directly from PNC, (2) any acquisition by PNC,
(3) any acquisition by any employee benefit plan (or related trust) sponsored or
maintained by PNC or any company controlled by, controlling or under common
control with PNC (an “Affiliated Company”), (4) any acquisition pursuant to an
Excluded Combination (as defined in Section A.7(c)) or (5) an acquisition of
beneficial ownership representing between 20% and 40%, inclusive, of the
Outstanding PNC Voting Securities or Outstanding PNC Common Stock shall not be
considered a Change of Control if the Incumbent Board as of immediately prior to
any such acquisition approves such acquisition either prior to or immediately
after its occurrence;

(b) Individuals who, as of the date hereof, constitute the Board (the “Incumbent
Board”) cease for any reason to constitute at least a majority of the Board
(excluding any Board seat that is vacant or otherwise unoccupied); provided,
however, that any individual becoming a director subsequent to the date hereof
whose election, or nomination for election by PNC’s shareholders, was approved
by a vote of at least two-thirds of the directors then comprising the Incumbent
Board shall be considered as though such individual was a member of the
Incumbent Board, but excluding, for this purpose, any such individual whose
initial assumption of office occurs as a result of an actual or threatened
election contest with respect to the election or removal of directors or other
actual or threatened solicitation of proxies or consents by or on behalf of a
Person other than the Board;

(c) Consummation of a reorganization, merger, statutory share exchange or
consolidation or similar transaction involving PNC or any of its subsidiaries, a
sale or other disposition of all or substantially all of the assets of PNC, or
the acquisition of assets or stock of another entity by PNC or any of its
subsidiaries (each, a “Business Combination”), excluding, however, a Business
Combination following which all or substantially all of the individuals and
entities that were the beneficial owners of the Outstanding PNC Common Stock and
the Outstanding PNC Voting Securities immediately prior to such Business
Combination beneficially own, directly or indirectly, more than 60% of the
then-outstanding shares of common stock (or, for a non-corporate

 

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entity, equivalent securities) and the combined voting power of the
then-outstanding voting securities entitled to vote generally in the election of
directors (or, for a non-corporate entity, equivalent governing body), as the
case may be, of the entity resulting from such Business Combination (including,
without limitation, an entity that, as a result of such transaction, owns PNC or
all or substantially all of PNC’s assets either directly or through one or more
subsidiaries) in substantially the same proportions as their ownership
immediately prior to such Business Combination of the Outstanding PNC Common
Stock and the Outstanding PNC Voting Securities, as the case may be (such a
Business Combination, an “Excluded Combination”); or

(d) Approval by the shareholders of PNC of a complete liquidation or dissolution
of PNC.

A.8 “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.9 “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 (a) engaged in business activities similar to some or
all of the business activities of PNC or any subsidiary as of Grantee’s
Termination Date or (b) engaged in business activities which Grantee knows PNC
or any subsidiary intends to enter within the first twelve (12) months after
Grantee’s Termination Date or, if later and if applicable, after the date
specified in clause (ii) of Section A.13(a), in either case whether Grantee 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 “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.11 “Corporation” means PNC and its Consolidated Subsidiaries.

A.12 “Designated Person” will be either: (a) the Committee or its delegate, if
Grantee was a member of the Corporate Executive Group (or equivalent successor
classification) or was subject to the reporting requirements of Section 16(a) of
the Exchange Act with respect to PNC securities when he or she ceased to be an
employee of the Corporation; or (b) the Chief Human Resources Officer of PNC, if
Grantee is not within one of the groups specified in Section A.12(a).

A.13 “Detrimental Conduct” means, for purposes of the Agreement:

(a) Grantee 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 Grantee’s
Termination Date and extending through (and including) the first
(1st) anniversary of the later of (i) Grantee’s Termination Date and, if
different, (ii) the first date after Grantee’s Termination Date as of which
Grantee ceases to be engaged by the Corporation in any capacity for which
Grantee receives compensation from the Corporation, including but not limited to
acting for compensation as a consultant, independent contractor, employee,
officer, director or advisory director;

 

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(b) any act of fraud, misappropriation, or embezzlement by Grantee 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 Grantee
for, or any entry by Grantee into a pre-trial disposition with respect to, the
commission of a felony that relates to or arises out of Grantee’s employment or
other service relationship with the Corporation.

Grantee will be deemed to have engaged in Detrimental Conduct for purposes of
the Agreement only if and when the Committee (if Grantee 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 Grantee was not such an executive
officer), whichever is applicable, determines that Grantee 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 Grantee, and, if so, determines
that Grantee will be deemed to have engaged in Detrimental Conduct.

A.14 “Disabled” or “Disability” means, except as may otherwise be required by
Section 409A of the Internal Revenue Code, that Grantee either (i) is unable to
engage in any substantial gainful activity by reason of any medically
determinable physical or mental impairment that can be expected to result in
death or can be expected to last for a continuous period of not less than 12
months, or (ii) is, by reason of any medically determinable physical or mental
impairment that can be expected to result in death or can be expected to last
for a continuous period of not less than 12 months, receiving (and has received
for at least three months) income replacement benefits under any
Corporation-sponsored disability benefit plan. If Grantee has been determined to
be eligible for Social Security disability benefits, Grantee shall be presumed
to be Disabled as defined herein.

A.15 “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.

 

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A.16 “GAAP” or “generally accepted accounting principles” means accounting
principles generally accepted in the United States of America.

A.17 “Grant” means the Restricted Shares Award granted to Grantee pursuant to
Section 2 of the Agreement and pursuant to which the Restricted Shares are
issued to Grantee subject to the restrictions set forth in and the terms and
conditions of the Agreement and the Plan.

A.18 “Grant Date” means the Grant Date set forth on page 1 of the Agreement and
is the date as of which the Restricted Shares Award is authorized to be granted
by the Committee or its delegate in accordance with the Plan.

A.19 “Grantee” means the person to whom the Restricted Stock Award is granted
and the Restricted Shares are issued, and is identified as Grantee on page 1 of
the Agreement.

A.20 “Internal Revenue Code” means the Internal Revenue Code of 1986 as amended,
and the rules and regulations promulgated thereunder.

A.21 “PNC” means The PNC Financial Services Group, Inc.

A.22 “Restricted Period” means, subject to early termination if so determined by
the Committee or its delegate or pursuant to Section 7.7 of the Agreement, if
applicable, the period from the Grant Date through (and including) the earlier
of: (a) the date of Grantee’s death; (b) the day immediately preceding the day a
Change of Control is deemed to have occurred; and (c) the day immediately
preceding the third (3rd) anniversary of the Grant Date or, if later, the last
day of any extension of the Restricted Period pursuant to Section 7.4(a),
Section 7.5(a) or Section 7.6(a) of the Agreement, if applicable.

A.23 “Retire” or “Retirement” means termination of Grantee’s employment with the
Corporation at any time and for any reason (other than termination by reason of
Grantee’s death or by the Corporation for Cause and, if the Committee or the CEO
so determines prior to such divestiture, other than by reason of termination in
connection with a divestiture of assets or a divestiture of one or more
subsidiaries of the Corporation) on or after the first date on which Grantee has
both attained at least age fifty-five (55) and completed 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 calculated under the provisions of
The PNC Financial Services Group, Inc. Pension Plan.

A.24 “Retiree” means a Grantee who has Retired.

A.25 “SEC” means the United States Securities and Exchange Commission.

A.26 “Termination Date” means Grantee’s last date of employment with the
Corporation. If Grantee is employed by a Consolidated Subsidiary that ceases to
be a

 

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subsidiary of PNC or ceases to be a consolidated subsidiary of PNC under
generally accepted accounting principles and Grantee does not continue to be
employed by PNC or a Consolidated Subsidiary, then for purposes of the
Agreement, Grantee’s employment with the Corporation terminates effective at the
time this occurs.

A.27 “Three-Year Continued Employment Performance Goal” means, subject to early
achievement if so determined by the Committee or its delegate or to deemed
achievement pursuant to Section 7.3, Section 7.4, Section 7.5, Section 7.6,
Section 7.7, or Section 8 of the Agreement, if applicable, that Grantee has been
continuously employed by the Corporation for the period from the Grant Date
through (and including) the day immediately preceding the first of the following
to occur: (a) the third (3rd) anniversary of the Grant Date; (b) the date of
Grantee’s death; and (c) the day a Change of Control is deemed to have occurred.

A.28 “Unvested Shares” means any Restricted Shares that are not Awarded Shares.

 

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Restricted Stock Grant

Continued Employment Performance Goal

Restricted Period: Three Years (100%)

THE PNC FINANCIAL SERVICES GROUP, INC.

2006 INCENTIVE AWARD PLAN

* * *

RESTRICTED STOCK AGREEMENT

* * *

 

GRANTEE:    < name > GRANT DATE:                , 20     SHARES:    < 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.22 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.

 

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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.3 of Annex
A will be released and reissued to, or at the proper direction of, Grantee or
Grantee’s legal representative pursuant to Section 9.

4. Rights as Shareholder. Except as provided in Section 6 and subject to
Section 7.6(b), if applicable, and to Section 16, Grantee will have all the
rights and privileges of a shareholder with respect to the Restricted Shares
including, but not limited to, the right to vote the Restricted Shares and the
right to receive dividends thereon if and when declared by the Board; provided,
however, that all such rights and privileges will cease immediately upon any
forfeiture of such shares.

5. Capital Adjustments. Restricted Shares awarded hereunder shall, as issued and
outstanding shares of PNC common stock, be subject to such adjustment as may be
necessary to reflect corporate transactions, including, without limitation,
stock dividends, stock splits, spin-offs, split-offs, recapitalizations,
mergers, consolidations or reorganizations of or by PNC; provided, however, that
any shares received as distributions on or in exchange for Unvested Shares shall
be subject to the terms and conditions of the Agreement as if they were
Restricted Shares.

6. Prohibitions Against Sale, Assignment, etc.; Payment to Legal Representative.

(a) Unvested Shares may not be sold, assigned, transferred, exchanged, pledged,
hypothecated or otherwise encumbered, other than as may be required pursuant to
Section 10.2, unless and until the Restricted Period terminates and the Awarded
Shares are released and reissued by PNC pursuant to Section 9.

 

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(b) If Grantee is deceased at the time Restricted Shares become Awarded Shares,
PNC will deliver such shares to the executor or administrator of Grantee’s
estate or to Grantee’s other legal representative as determined in good faith by
the Committee.

(c) Any delivery of shares or other payment made in good faith by PNC to
Grantee’s executor, administrator or other legal representative shall extinguish
all right to payment hereunder.

7. Forfeiture; Death; Qualifying Disability, Retirement, or DEAP Termination;
Termination in Anticipation of Change of Control.

7.1 Forfeiture on Termination of Employment. Except as otherwise provided in and
subject to the conditions of Section 7.3, Section 7.4(a), Section 7.5(a),
Section 7.6(a), Section 7.7, Section 7.8, or Section 8, if applicable, in the
event that Grantee’s employment with the Corporation terminates prior to the
third (3rd) anniversary of the Grant Date, all Restricted Shares that are
Unvested Shares on Grantee’s Termination Date will be forfeited by Grantee to
PNC without payment of any consideration by PNC.

Upon forfeiture of Unvested Shares pursuant to the provisions of this
Section 7.1 or the provisions of Section 7.2, Section 7.4(b), Section 7.5(b) or
Section 7.6(c), neither Grantee nor any successors, heirs, assigns or legal
representatives of Grantee will thereafter have any further rights or interest
in such Unvested Shares or any certificate or certificates representing such
Unvested Shares.

7.2 Forfeiture for Detrimental Conduct. Unvested Shares that would otherwise
remain outstanding after Grantee’s Termination Date, if any, will be forfeited
by Grantee to PNC without payment of any consideration by PNC in the event that,
at any time prior to the date such shares become Awarded Shares, PNC determines
that Grantee has engaged in Detrimental Conduct; provided, however, that:
(a) this Section 7.2 will not apply to Restricted Shares that remain outstanding
after Grantee’s Termination Date pursuant to Section 7.3 or Section 7.7, if any;
(b) no determination that Grantee has engaged in Detrimental Conduct may be made
on or after the date of Grantee’s death; (c) Detrimental Conduct will not apply
to conduct by or activities of successors to the Restricted Shares by will or
the laws of descent and distribution in the event of Grantee’s death; and
(d) Detrimental Conduct will cease to apply to any Restricted Shares upon a
Change of Control.

If any criminal charges are brought against Grantee alleging the commission of a
felony that relates to or arises out of Grantee’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 vesting of the Restricted Shares, to the extent that the Restricted
Shares are still outstanding and have not yet become Awarded Shares, or to
require the escrow of the proceeds of the shares. Any such suspension or escrow
is subject to the following restrictions:

(i) It may last only until the earliest to occur of the following:

(A) resolution of the criminal proceedings in a manner that constitutes
Detrimental Conduct;

 

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(B) resolution of the criminal proceeding in one of the following ways: (1) the
charges as they relate to such alleged felony have been dismissed (with or
without prejudice), (2) Grantee has been acquitted of such alleged felony, or
(3) 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

(C) termination of the suspension or escrow in the discretion of the Committee;
and

(ii) It may be imposed only if the Committee makes reasonable provision for the
retention or realization of the value of the Restricted Shares to Grantee as if
no suspension or escrow had been imposed upon any termination of the suspension
or escrow under clauses (i)(B) or (C) above.

7.3 Death. In the event of Grantee’s death while an employee of the Corporation
and prior to the third (3rd) anniversary of the Grant Date, the Three-Year
Continued Employment Performance Goal will be deemed to have been achieved, and
the Restricted Period with respect to all then outstanding Unvested Shares, if
any, will terminate on the date of Grantee’s death.

The Restricted Shares which thereby become Awarded Shares will be released and
reissued by PNC to, or at the proper direction of, Grantee’s legal
representative pursuant to Section 9 as soon as administratively practicable
following such date.

7.4 Qualifying Disability Termination.

(a) In the event Grantee’s employment with the Corporation is terminated prior
to the third (3 rd) anniversary of the Grant Date by the Corporation by reason
of Grantee’s Disability, Unvested Shares will not be automatically forfeited on
Grantee’s Termination Date. Instead, Unvested Shares will, subject to the
forfeiture provisions of Section 7.2 and Section 7.4(b), remain outstanding
pending and subject to affirmative approval of the vesting of the Restricted
Shares pursuant to this Section 7.4(a) by the Designated Person specified in
Section A.12 of Annex A.

If such Unvested Shares are still outstanding but the Designated Person has not
made a specific determination to either approve or disapprove the vesting of the
Unvested Shares by the day immediately preceding the third (3rd) anniversary of
the Grant Date, then the Restricted Period will be automatically extended
through the first to occur of: (1) the day the Designated Person makes a
specific determination regarding such vesting; and (2) either (i) the ninetieth
(90 th) day following the third (3rd) anniversary of the Grant

 

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Date, if the Designated Person is the Chief Human Resources Officer of PNC, or
(ii) the 180th day following such anniversary date if the Designated Person is
the Committee or its delegate, whichever is applicable; provided, however, if
the Committee has acted to suspend the vesting of the Restricted Shares pursuant
to Section 7.2, the Restricted Period will be extended until the terms of such
suspension have been satisfied.

If the vesting of the then outstanding Unvested Shares is affirmatively approved
by the Designated Person on or prior to the last day of the Restricted Period,
including any extension of the Restricted Period, if applicable, then the
Three-Year Continued Employment Performance Goal will be deemed to have been
achieved, and the Restricted Period with respect to all then outstanding
Unvested Shares, if any, will terminate as of the end of the day on the date of
such approval. The Restricted Shares outstanding at the termination of the
Restricted Period will become Awarded Shares and will be released and reissued
by PNC pursuant to Section 9.

(b) If the Designated Person disapproves the vesting of the Unvested Shares that
had remained outstanding after Grantee’s Termination Date pending and subject to
affirmative approval of vesting, then all such Unvested Shares that are still
outstanding will be forfeited by Grantee to PNC on such disapproval date without
payment of any consideration by PNC.

If by the end of the Restricted Period, including any extension of the
Restricted Period pursuant to the second paragraph of Section 7.4(a), if
applicable, the Designated Person has neither affirmatively approved nor
specifically disapproved the vesting of the Unvested Shares that had remained
outstanding after Grantee’s Termination Date pending and subject to affirmative
approval of vesting, then all such Unvested Shares that are still outstanding
will be forfeited by Grantee to PNC at the close of business on the last day of
the Restricted Period without payment of any consideration by PNC.

7.5 Qualifying Retirement.

(a) In the event that Grantee Retires prior to the third (3rd) anniversary of
the Grant Date, Unvested Shares will not be automatically forfeited on Grantee’s
Termination Date. Instead, Unvested Shares will, subject to the forfeiture
provisions of Section 7.2 and Section 7.5(b), remain outstanding pending and
subject to affirmative approval of the vesting of the Restricted Shares pursuant
to this Section 7.5(a) by the Designated Person specified in Section A.12 of
Annex A.

If such Unvested Shares are still outstanding but the Designated Person has not
made a specific determination to either approve or disapprove the vesting of the
Unvested Shares by the day immediately preceding the third (3rd) anniversary of
the Grant Date, then the Restricted Period will be automatically extended
through the first to occur of: (1) the day the Designated Person makes a
specific determination regarding such vesting; and (2) either (i) the ninetieth
(90th) day following the third (3rd) anniversary of the Grant Date, if the
Designated Person is the Chief Human Resources Officer of PNC, or (ii) the 180th
day following such anniversary date if the Designated Person is the Committee or

 

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its delegate, whichever is applicable; provided, however, if the Committee has
acted to suspend the vesting of the Restricted Shares pursuant to Section 7.2,
the Restricted Period will be extended until the terms of such suspension have
been satisfied.

If the vesting of the then outstanding Unvested Shares is affirmatively approved
by the Designated Person on or prior to the last day of the Restricted Period,
including any extension of the Restricted Period, if applicable, then the
Three-Year Continued Employment Performance Goal will be deemed to have been
achieved, and the Restricted Period with respect to all then outstanding
Unvested Shares, if any, will terminate as of the end of the day on the date of
such approval. The Restricted Shares outstanding at the termination of the
Restricted Period will become Awarded Shares and will be released and reissued
by PNC pursuant to Section 9.

(b) If the Designated Person disapproves the vesting of the Unvested Shares that
had remained outstanding after Grantee’s Termination Date pending and subject to
affirmative approval of vesting, then all such Unvested Shares that are still
outstanding will be forfeited by Grantee to PNC on such disapproval date without
payment of any consideration by PNC.

If by the end of the Restricted Period, including any extension of the
Restricted Period pursuant to the second paragraph of Section 7.5(a), if
applicable, the Designated Person has neither affirmatively approved nor
specifically disapproved the vesting of the Unvested Shares that had remained
outstanding after Grantee’s Termination Date pending and subject to affirmative
approval of vesting, then all such Unvested Shares that are still outstanding
will be forfeited by Grantee to PNC at the close of business on the last day of
the Restricted Period without payment of any consideration by PNC.

7.6 Qualifying DEAP Termination.

(a) In the event that Grantee’s employment with the Corporation is terminated
prior to the third (3rd) anniversary of the Grant Date by the Corporation and
Grantee is offered and has entered into the standard Waiver and Release
Agreement with PNC or a Consolidated Subsidiary under an applicable PNC or
Consolidated Subsidiary Displaced Employee Assistance Plan, or any successor
plan by whatever name known (“DEAP”), or Grantee is offered and has entered into
a similar waiver and release agreement between PNC or a Consolidated Subsidiary
and Grantee pursuant to the terms of an agreement or arrangement entered into by
PNC or a Consolidated Subsidiary and Grantee in lieu of or in addition to the
DEAP, then Unvested Shares will not be automatically forfeited on Grantee’s
Termination Date. Instead, Unvested Shares will, subject to the forfeiture
provisions of Section 7.2 and Section 7.6(c), remain outstanding pending and
subject to affirmative approval of the vesting of the Restricted Shares pursuant
to this Section 7.6(a) by the Designated Person specified in Section A.12 of
Annex A, provided that Grantee does not revoke such waiver and release agreement
within the time for revocation of such waiver and release agreement by Grantee.

 

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If such Unvested Shares are still outstanding but the Designated Person has not
made a specific determination to either approve or disapprove the vesting of the
Unvested Shares by the day immediately preceding the third (3rd) anniversary of
the Grant Date, then the Restricted Period will be automatically extended
through the first to occur of: (1) the day the Designated Person makes a
specific determination regarding such vesting; and (2) either (i) the ninetieth
(90th) day following the third (3rd ) anniversary of the Grant Date, if the
Designated Person is the Chief Human Resources Officer of PNC, or (ii) the 180th
day following such anniversary date if the Designated Person is the Committee or
its delegate, whichever is applicable; provided, however, if the Committee has
acted to suspend the vesting of the Restricted Shares pursuant to Section 7.2,
the Restricted Period will be extended until the terms of such suspension have
been satisfied.

If the vesting of the then outstanding Unvested Shares is affirmatively approved
by the Designated Person on or prior to the last day of the Restricted Period,
including any extension of the Restricted Period, if applicable, then the
Three-Year Continued Employment Performance Goal will be deemed to have been
achieved, and the Restricted Period with respect to all then outstanding
Unvested Shares, if any, will terminate as of the end of the day on the date of
such approval. The Restricted Shares outstanding at the termination of the
Restricted Period will become Awarded Shares and will be released and reissued
by PNC pursuant to Section 9.

(b) In the event that the record date for any dividend payable with respect to
the Unvested Shares occurs on or after Grantee’s Termination Date but prior to
the lapse of the time for revocation by Grantee of the waiver and release
agreement specified in the first paragraph of Section 7.6(a), then such dividend
will be held, without interest, pending and subject to satisfaction of the
condition of Section 7.6(a) that Grantee enter into the offered waiver and
release agreement and not revoke such waiver and release agreement within the
time for revocation of such agreement by Grantee. In the event that this
condition is not met, any dividend being held pending and subject to
satisfaction of such condition will be forfeited by Grantee to PNC without
payment of any consideration by PNC.

(c) If (i) Grantee does not enter into, or enters into but revokes, the waiver
and release agreement specified in the first paragraph of Section 7.6(a) or
(ii) the Designated Person disapproves the vesting of the Unvested Shares that
had remained outstanding after Grantee’s Termination Date pending and subject to
the non-revocation of, and the lapse of the time within which Grantee may
revoke, such waiver and release agreement and pending and subject to affirmative
approval of the vesting of such shares, then all such Unvested Shares that are
still outstanding will be forfeited by Grantee to PNC on the date such failure
to satisfy the conditions of Section 7.6(a) occurs without payment of any
consideration by PNC.

If, by the end of the Restricted Period, including any extension of the
Restricted Period pursuant to the second paragraph of Section 7.6(a), if
applicable, such Unvested Shares are still outstanding but the Designated Person
has neither affirmatively approved nor specifically disapproved the vesting of
such shares, then all such Unvested Shares will be forfeited by Grantee to PNC
at the close of business on the last day of the Restricted Period without
payment of any consideration by PNC.

 

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7.7 Termination in Anticipation of a Change of Control. Notwithstanding anything
in the Agreement to the contrary, if Grantee’s employment with the Corporation
is terminated by the Corporation prior to the third (3rd) anniversary of the
Grant Date and such termination is an Anticipatory Termination as defined in
Section A.2 of Annex A, then: (i) the Three-Year Continued Employment
Performance Goal will be deemed to have been achieved and the Restricted Period
with respect to any then outstanding Unvested Shares will terminate as of the
end of the day on the day immediately preceding Grantee’s Termination Date; and
(ii) all Restricted Shares that thereby become Awarded Shares will be released
and reissued by PNC pursuant to Section 9 as soon as administratively
practicable following such date.

7.8 Other Committee Authority. Prior to the third (3rd) anniversary of the Grant
Date, the Committee or its delegate may in their sole discretion, but need not,
determine that, with respect to some or all of Grantee’s outstanding Unvested
Shares, the Three-Year Continued Employment Performance Goal will be deemed to
have been achieved and the Restricted Period with respect to such shares will
terminate, all subject to such restrictions, terms or conditions as the
Committee or its delegate may in their sole discretion determine.

8. Change of Control. Notwithstanding anything in the Agreement to the contrary,
upon the occurrence of a Change of Control: (i) if Grantee is an employee of the
Corporation as of the day immediately preceding the Change of Control, the
Three-Year Continued Employment Performance Goal will be deemed to have been
achieved and the Restricted Period will terminate with respect to all then
outstanding Unvested Shares, if any, as of the day immediately preceding the
Change of Control; (ii) if Grantee’s employment with the Corporation terminated
prior to the occurrence of the Change of Control but the Unvested Shares
remained outstanding after such termination of employment pursuant to
Section 7.4, Section 7.5 or Section 7.6 and are still outstanding pending and
subject to affirmative approval of the vesting of such shares by the Designated
Person specified in Section A.12 of Annex A, then with respect to all Unvested
Shares outstanding as of the day immediately preceding the Change of Control,
such affirmative vesting approval will be deemed to have been given, the
Three-Year Continued Employment Performance Goal will be deemed to have been
achieved, and the Restricted Period will terminate, all as of the day
immediately preceding the Change of Control, provided, however, in the case of
Unvested Shares that remained outstanding post-employment solely pursuant to
Section 7.6(a), that Grantee entered into and does not revoke the waiver and
release agreement specified in Section 7.6(a); and (iii) all Restricted Shares
that thereby become Awarded Shares will be released and reissued by PNC pursuant
to Section 9 as soon as administratively practicable following such date.

9. Termination of Prohibitions; Payment to Legal Representative. Except as
otherwise directed by the Committee pursuant to the suspension or escrow
provisions of Section 7.2, if and to the extent applicable, following
termination of the Restricted Period, PNC will release and issue or reissue the
then outstanding whole Restricted Shares that have become Awarded Shares without
the legend referred to in Section 3.

 

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Upon release and issuance of shares that have become Awarded Shares in
accordance with this Section 9, PNC or its designee will deliver such whole
shares to, or at the proper direction of, Grantee or Grantee’s legal
representative.

Any delivery of shares or other payment made in good faith by PNC to Grantee’s
executor, administrator or other legal representative shall extinguish all right
to payment hereunder.

10. Payment of Taxes.

10.1 Internal Revenue Code Section 83(b) Election. In the event that Grantee
makes an Internal Revenue Code Section 83(b) election with respect to the
Restricted Shares, Grantee shall satisfy all then applicable federal, state or
local withholding tax obligations arising from that election (a) by payment of
cash or (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, by physical delivery to
PNC of certificates for whole shares of PNC common stock that are not subject to
any contractual restriction, pledge or other encumbrance and that have been
owned by Grantee for at least six (6) months and, in the case of restricted
stock, for which it has been at least six (6) months since the restrictions
lapsed, or by a combination of cash and such stock. Any such tax election shall
be made pursuant to a form to be provided to Grantee by PNC on request. For
purposes of this Section 10.1, shares of PNC common stock that are used to
satisfy applicable withholding tax obligations will be valued at their Fair
Market Value on the date the tax withholding obligation arises. Grantee will
provide to PNC a copy of any Internal Revenue Code Section 83(b) election filed
by Grantee with respect to the Restricted Shares not later than ten (10) days
after the filing of such election.

10.2 Other Tax Liabilities. Where Grantee has not previously satisfied all
applicable withholding tax obligations, PNC will, at the time the tax
withholding obligation arises, retain sufficient whole shares of PNC common
stock from the shares granted pursuant to the Agreement to satisfy the minimum
amount of taxes then required to be withheld by the Corporation in connection
with the Restricted Shares. For purposes of this Section 10.2, shares of PNC
common stock retained to satisfy applicable withholding tax requirements will be
valued at their Fair Market Value on the date the tax withholding obligation
arises.

PNC will not retain more than the number of shares sufficient to satisfy the
minimum amount of taxes then required to be withheld in connection with the
Restricted Shares. If Grantee desires to have an additional amount withheld
above the required minimum, up to Grantee’s W-4 obligation if higher, and if PNC
so permits, Grantee may elect to satisfy this additional withholding either:
(a) by payment of cash; or (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,
using whole shares of PNC common stock (either by physical

 

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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 Grantee for at least six
(6) months and, in the case of restricted stock, for which it has been at least
six (6) months since the restrictions lapsed. Any such tax election shall be
made pursuant to a form provided by PNC. Shares of PNC common stock that are
used for this purpose will be valued at their Fair Market Value on the date the
tax withholding obligation arises. If Grantee’s W-4 obligation does not exceed
the required minimum withholding in connection with the Restricted Shares, no
additional withholding may be made.

11. Employment. Neither the granting and issuance of the Restricted Shares nor
any term or provision of the Agreement shall constitute or be evidence of any
understanding, expressed or implied, on the part of PNC or any subsidiary to
employ Grantee for any period or in any way alter Grantee’s status as an
employee at will.

12. Subject to the Plan and the Committee. In all respects the Grant and the
Agreement are subject to the terms and conditions of the Plan, which has been
made available to Grantee and is incorporated herein by reference; provided,
however, the terms of the Plan shall not be considered an enlargement of any
benefits under the Agreement. Further, the Grant and the Agreement are subject
to any interpretation of, and any rules and regulations issued by, the Committee
or its delegate or under the authority of the Committee, whether made or issued
before or after the Grant Date.

13. Headings; Entire Agreement. Headings used in the Agreement are provided for
reference and convenience only, shall not be considered part of the Agreement,
and shall not be employed in the construction of the Agreement. The Agreement
constitutes the entire agreement between Grantee and PNC and supersedes all
other discussions, negotiations, correspondence, representations, understandings
and agreements between the parties with respect to the subject matter hereof.

14. Grantee Covenants.

14.1 General. Grantee and PNC acknowledge and agree that Grantee has received
adequate consideration with respect to enforcement of the provisions of
Sections 14 and 15 by virtue of receiving this grant of Restricted Shares
(regardless of whether such shares ultimately become Awarded Shares); 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 Grantee from earning a living.

14.2 Non-Solicitation; No-Hire. Grantee agrees to comply with the provisions of
subsections (a) and (b) of this Section 14.2 while employed by the Corporation
and for a period of one year after Grantee’s Termination Date regardless of the
reason for such termination of employment.

 

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(a) Non-Solicitation. Grantee shall not, directly or indirectly, either for
Grantee’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 Grantee 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. Grantee shall not, directly or indirectly, either for Grantee’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
Grantee assist any other Person in such activities.

Notwithstanding the above, if Grantee’s employment with the Corporation is
terminated by the Corporation and such termination is an Anticipatory
Termination, then commencing immediately after such Termination Date, the
provisions of subsections (a) and (b) of this Section 14.2 will no longer apply
and will be replaced with the following subsection (c):

(c) No-Hire. Grantee agrees that Grantee shall not, for a period of one year
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.

14.3 Confidentiality. During Grantee’s employment with the Corporation, and
thereafter regardless of the reason for termination of such employment, Grantee
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 Grantee, 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.

14.4 Ownership of Inventions. Grantee 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 Grantee during the term of Grantee’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”). Grantee
agrees to assign and hereby does assign to PNC or its

 

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designee all of Grantee’s right, title and interest, including copyrights and
patent rights, in and to all Developments. Grantee 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 14.4 shall be performed by Grantee without further
compensation and will continue beyond the Termination Date.

15. Enforcement Provisions. Grantee understands and agrees to the following
provisions regarding enforcement of the Agreement.

15.1 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, Grantee
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.

15.2 Equitable Remedies. A breach of the provisions of any of Sections 14.2,
14.3 or 14.4 will cause the Corporation irreparable harm, and the Corporation
will therefore be entitled to issuance of immediate, as well as permanent,
injunctive relief restraining Grantee, and each and every person and entity
acting in concert or participating with Grantee, from initiation and/or
continuation of such breach.

15.3 Tolling Period. If it becomes necessary or desirable for the Corporation to
seek compliance with the provisions of Section 14.2 by legal proceedings, the
period during which Grantee 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.

15.4 No Waiver. Failure of PNC to demand strict compliance with any of the
terms, covenants or conditions of the Agreement will not be deemed a waiver of
such term, covenant or condition, nor will 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.

15.5 Severability. The restrictions and obligations imposed by Sections 14.2,
14.3 and 14.4 are separate and severable, and it is the intent of Grantee 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 will remain
valid and binding upon Grantee.

15.6 Reform. In the event any of Sections 14.2, 14.3 and 14.4 are determined by
a court of competent jurisdiction to be unenforceable because unreasonable
either as

 

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to length of time or area to which said restriction applies, it is the intent of
Grantee and PNC that said court reduce and reform the provisions thereof so as
to apply the greatest limitations considered enforceable by the court.

15.7 Waiver of Jury Trial. Each of Grantee 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 14.2, 14.3 and 14.4.

15.8 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 Grantee, Grantee agrees to reimburse PNC for
any amounts Grantee may be required to reimburse PNC or its subsidiaries
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 Grantee reimburse PNC or its
subsidiaries for such amounts pursuant to Section 304 of the Sarbanes-Oxley Act
of 2002.

15.9. Compliance with Internal Revenue Code Section 409A. It is the intention of
the parties that the Grant 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,
Grantee agrees that PNC may, without the consent of Grantee, modify the
Agreement and the Grant 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.

16. Acceptance of Grant; PNC Right to Cancel. If Grantee does not accept the
Grant by executing and delivering a copy of the Agreement to PNC, without
altering or changing the terms thereof in any way, within thirty (30) days of
receipt by Grantee of a copy of the Agreement, PNC may, in its sole discretion,
withdraw its offer and cancel the Grant at any time prior to Grantee’s delivery
to PNC of a copy of the Agreement executed by Grantee. Otherwise, upon execution
and delivery of the Agreement by both PNC and Grantee, the Agreement is
effective.

Grantee will not have any of the rights of a shareholder with respect to the
Restricted Shares as set forth in Section 4, and will not have the right to vote
or to receive dividends on such shares, until the date the Agreement is
effective and the Restricted Shares are issued in accordance with this
Section 16.

 

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In the event that one or more record dates for dividends on PNC common stock
occur after the Grant Date but before the date the Agreement is effective in
accordance with this Section 16 and the Restricted Shares are issued, then upon
the effectiveness of the Agreement, the Corporation will make a cash payment to
Grantee equivalent to the amount of the dividends Grantee would have received
had the Agreement been effective and the Restricted Shares had been issued on
the Grant Date. Any such amount will be payable in accordance with applicable
regular payroll practice as in effect from time to time for similarly situated
employees.

IN WITNESS WHEREOF, PNC has caused the Agreement to be signed on its behalf as
of the Grant Date.

 

THE PNC FINANCIAL SERVICES GROUP, INC.

By:

 

Chairman and Chief Executive Officer

ATTEST:

By:

 

Corporate Secretary

ACCEPTED AND AGREED TO by GRANTEE

 

Grantee

 

 

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ANNEX A

CERTAIN DEFINITIONS

*  *  *

A.1 “Agreement” means the Restricted Stock Agreement between PNC and Grantee
evidencing the Grant of the Restricted Shares Award to Grantee pursuant to the
Plan.

A.2 “Anticipatory Termination.” If Grantee’s employment with the Corporation is
terminated by the Corporation other than for Cause, death or Disability prior to
the date on which a Change of Control occurs, and if it is reasonably
demonstrated by Grantee that such termination of employment (i) was at the
request of a third party that has taken steps reasonably calculated to effect a
Change of Control or (ii) otherwise arose in connection with or anticipation of
a Change of Control, such a termination of employment is an “Anticipatory
Termination.”

For purposes of this definition, Cause shall mean:

(a) the willful and continued failure of Grantee to substantially perform
Grantee’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 Grantee by the Board or the CEO which
specifically identifies the manner in which the Board or the CEO believes that
Grantee has not substantially performed Grantee’s duties; or

(b) the willful engaging by Grantee 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 (a) and (b), no act or failure to act, on
the part of Grantee, shall be considered willful unless it is done, or omitted
to be done, by Grantee in bad faith and without reasonable belief that Grantee’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 Grantee’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 Grantee in good faith and in the best interests of the Corporation.

The cessation of employment of Grantee will be deemed to be a termination of
Grantee’s employment with the Corporation for Cause for purposes of the
Agreement only if and when there shall have been delivered to Grantee, as part
of the notice of Grantee’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, Grantee is guilty of conduct described in
clause (a) or clause (b) above and, in either case, specifying the

 

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particulars thereof in detail. Such resolution shall be adopted only after
(i) reasonable notice of such Board meeting is provided to Grantee, together
with written notice that PNC believes that Grantee is guilty of conduct
described in clause (a) or clause (b) above and, in either case, specifying the
particulars thereof in detail, and (ii) Grantee is given an opportunity,
together with counsel, to be heard before the Board.

A.3 “Awarded Shares.” Provided that the Restricted Shares are then outstanding,
Restricted Shares become “Awarded Shares” when all of the following have
occurred: (a) the Three-Year Continued Employment Performance Goal has been
achieved or is deemed to have been achieved pursuant to the terms of the
Agreement; (b) the Restricted Period has terminated; and (c) if the Committee
has acted to suspend the vesting of the Restricted Shares pursuant to
Section 7.2 of the Agreement, the terms of such suspension have been satisfied
and the Restricted Shares have not been forfeited.

A.4 “Board” means the Board of Directors of PNC.

A.5 “Cause.” Except as otherwise provided in Section A.2, “Cause” means:

(a) the willful and continued failure of Grantee to substantially perform
Grantee’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 Grantee by PNC that specifically
identifies the manner in which it is believed that Grantee has not substantially
performed Grantee’s duties;

(b) a material breach by Grantee 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;

(c) any act of fraud, misappropriation, material dishonesty, or embezzlement by
Grantee against PNC or one of its subsidiaries or any client or customer of PNC
or a subsidiary;

(d) any conviction (including a plea of guilty or of nolo contendere) of Grantee
for, or entry by Grantee into a pre-trial disposition with respect to, the
commission of a felony; or

(e) entry of any order against Grantee, 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 Grantee’s employment or other
service relationship with the Corporation.

Except as otherwise provided in Section A.2, the cessation of employment of
Grantee will be deemed to have been a termination of Grantee’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 Grantee is the CEO, the Board) determines that
Grantee is guilty of conduct described in clause (a), (b) or (c) above or that
an event described in clause (d) or (e) above has occurred with respect to
Grantee and, if so, determines that the termination of Grantee’s employment with
the Corporation will be deemed to have been for Cause.

 

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A.6 “CEO” means the chief executive officer of PNC.

A.7 “Change of Control” means:

(a) Any individual, entity or group (within the meaning of Section 13(d)(3) or
14(d)(2) of the Securities Exchange Act of 1934, as amended (the “Exchange
Act”)) (a “Person”) becomes the beneficial owner (within the meaning of Rule
13d-3 promulgated under the Exchange Act) of 20% or more of either (A) the
then-outstanding shares of common stock of PNC (the “Outstanding PNC Common
Stock”) or (B) the combined voting power of the then-outstanding voting
securities of PNC entitled to vote generally in the election of directors (the
“Outstanding PNC Voting Securities”); provided, however, that, for purposes of
this Section A.7(a), the following acquisitions shall not constitute a Change of
Control: (1) any acquisition directly from PNC, (2) any acquisition by PNC,
(3) any acquisition by any employee benefit plan (or related trust) sponsored or
maintained by PNC or any company controlled by, controlling or under common
control with PNC (an “Affiliated Company”), (4) any acquisition pursuant to an
Excluded Combination (as defined in Section A.7(c)) or (5) an acquisition of
beneficial ownership representing between 20% and 40%, inclusive, of the
Outstanding PNC Voting Securities or Outstanding PNC Common Stock shall not be
considered a Change of Control if the Incumbent Board as of immediately prior to
any such acquisition approves such acquisition either prior to or immediately
after its occurrence;

(b) Individuals who, as of the date hereof, constitute the Board (the “Incumbent
Board”) cease for any reason to constitute at least a majority of the Board
(excluding any Board seat that is vacant or otherwise unoccupied); provided,
however, that any individual becoming a director subsequent to the date hereof
whose election, or nomination for election by PNC’s shareholders, was approved
by a vote of at least two-thirds of the directors then comprising the Incumbent
Board shall be considered as though such individual was a member of the
Incumbent Board, but excluding, for this purpose, any such individual whose
initial assumption of office occurs as a result of an actual or threatened
election contest with respect to the election or removal of directors or other
actual or threatened solicitation of proxies or consents by or on behalf of a
Person other than the Board;

(c) Consummation of a reorganization, merger, statutory share exchange or
consolidation or similar transaction involving PNC or any of its subsidiaries, a
sale or other disposition of all or substantially all of the assets of PNC, or
the acquisition of assets or stock of another entity by PNC or any of its
subsidiaries (each, a “Business Combination”), excluding, however, a Business
Combination following which all or substantially all of the individuals and
entities that were the beneficial owners of the Outstanding PNC Common Stock and
the Outstanding PNC Voting Securities immediately prior to such Business
Combination beneficially own, directly or indirectly, more than 60% of the
then-outstanding shares of common stock (or, for a non-corporate

 

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entity, equivalent securities) and the combined voting power of the
then-outstanding voting securities entitled to vote generally in the election of
directors (or, for a non-corporate entity, equivalent governing body), as the
case may be, of the entity resulting from such Business Combination (including,
without limitation, an entity that, as a result of such transaction, owns PNC or
all or substantially all of PNC’s assets either directly or through one or more
subsidiaries) in substantially the same proportions as their ownership
immediately prior to such Business Combination of the Outstanding PNC Common
Stock and the Outstanding PNC Voting Securities, as the case may be (such a
Business Combination, an “Excluded Combination”); or

(d) Approval by the shareholders of PNC of a complete liquidation or dissolution
of PNC.

A.8 “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.9 “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 (a) engaged in business activities similar to some or
all of the business activities of PNC or any subsidiary as of Grantee’s
Termination Date or (b) engaged in business activities which Grantee knows PNC
or any subsidiary intends to enter within the first twelve (12) months after
Grantee’s Termination Date or, if later and if applicable, after the date
specified in clause (ii) of Section A.13(a), in either case whether Grantee 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 “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.11 “Corporation” means PNC and its Consolidated Subsidiaries.

A.12 “Designated Person” will be either: (a) the Committee or its delegate, if
Grantee was a member of the Corporate Executive Group (or equivalent successor
classification) or was subject to the reporting requirements of Section 16(a) of
the Exchange Act with respect to PNC securities when he or she ceased to be an
employee of the Corporation; or (b) the Chief Human Resources Officer of PNC, if
Grantee is not within one of the groups specified in Section A.12(a).

A.13 “Detrimental Conduct” means, for purposes of the Agreement:

(a) Grantee 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 Grantee’s
Termination Date and extending through (and including) the first
(1st) anniversary of the later of (i) Grantee’s Termination Date and, if
different, (ii) the first date after Grantee’s Termination Date as of which
Grantee ceases to be engaged by the Corporation in any capacity for which
Grantee receives compensation from the Corporation, including but not limited to
acting for compensation as a consultant, independent contractor, employee,
officer, director or advisory director;

 

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(b) any act of fraud, misappropriation, or embezzlement by Grantee 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 Grantee
for, or any entry by Grantee into a pre-trial disposition with respect to, the
commission of a felony that relates to or arises out of Grantee’s employment or
other service relationship with the Corporation.

Grantee will be deemed to have engaged in Detrimental Conduct for purposes of
the Agreement only if and when the Committee (if Grantee 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 Grantee was not such an executive
officer), whichever is applicable, determines that Grantee 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 Grantee, and, if so, determines
that Grantee will be deemed to have engaged in Detrimental Conduct.

A.14 “Disabled” or “Disability” means, except as may otherwise be required by
Section 409A of the Internal Revenue Code, that Grantee either (i) is unable to
engage in any substantial gainful activity by reason of any medically
determinable physical or mental impairment that can be expected to result in
death or can be expected to last for a continuous period of not less than 12
months, or (ii) is, by reason of any medically determinable physical or mental
impairment that can be expected to result in death or can be expected to last
for a continuous period of not less than 12 months, receiving (and has received
for at least three months) income replacement benefits under any
Corporation-sponsored disability benefit plan. If Grantee has been determined to
be eligible for Social Security disability benefits, Grantee shall be presumed
to be Disabled as defined herein.

A.15 “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.

 

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A.16 “GAAP” or “generally accepted accounting principles” means accounting
principles generally accepted in the United States of America.

A.17 “Grant” means the Restricted Shares Award granted to Grantee pursuant to
Section 2 of the Agreement and pursuant to which the Restricted Shares are
issued to Grantee subject to the restrictions set forth in and the terms and
conditions of the Agreement and the Plan.

A.18 “Grant Date” means the Grant Date set forth on page 1 of the Agreement and
is the date as of which the Restricted Shares Award is authorized to be granted
by the Committee or its delegate in accordance with the Plan.

A.19 “Grantee” means the person to whom the Restricted Stock Award is granted
and the Restricted Shares are issued, and is identified as Grantee on page 1 of
the Agreement.

A.20 “Internal Revenue Code” means the Internal Revenue Code of 1986 as amended,
and the rules and regulations promulgated thereunder.

A.21 “PNC” means The PNC Financial Services Group, Inc.

A.22 “Restricted Period” means, subject to early termination if so determined by
the Committee or its delegate or pursuant to Section 7.7 of the Agreement, if
applicable, the period from the Grant Date through (and including) the earlier
of: (a) the date of Grantee’s death; (b) the day immediately preceding the day a
Change of Control is deemed to have occurred; and (c) the day immediately
preceding the third (3rd) anniversary of the Grant Date or, if later, the last
day of any extension of the Restricted Period pursuant to Section 7.4(a),
Section 7.5(a) or Section 7.6(a) of the Agreement, if applicable.

A.23 “Retire” or “Retirement” means termination of Grantee’s employment with the
Corporation at any time and for any reason (other than termination by reason of
Grantee’s death or by the Corporation for Cause and, if the Committee or the CEO
so determines prior to such divestiture, other than by reason of termination in
connection with a divestiture of assets or a divestiture of one or more
subsidiaries of the Corporation) on or after the first date on which Grantee has
both attained at least age fifty-five (55) and completed 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 calculated under the provisions of
The PNC Financial Services Group, Inc. Pension Plan.

A.24 “Retiree” means a Grantee who has Retired.

A.25 “SEC” means the United States Securities and Exchange Commission.

A.26 “Termination Date” means Grantee’s last date of employment with the
Corporation. If Grantee is employed by a Consolidated Subsidiary that ceases to
be a

 

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subsidiary of PNC or ceases to be a consolidated subsidiary of PNC under
generally accepted accounting principles and Grantee does not continue to be
employed by PNC or a Consolidated Subsidiary, then for purposes of the
Agreement, Grantee’s employment with the Corporation terminates effective at the
time this occurs.

A.27 “Three-Year Continued Employment Performance Goal” means, subject to early
achievement if so determined by the Committee or its delegate or to deemed
achievement pursuant to Section 7.3, Section 7.4, Section 7.5, Section 7.6,
Section 7.7, or Section 8 of the Agreement, if applicable, that Grantee has been
continuously employed by the Corporation for the period from the Grant Date
through (and including) the day immediately preceding the first of the following
to occur: (a) the third (3rd) anniversary of the Grant Date; (b) the date of
Grantee’s death; and (c) the day a Change of Control is deemed to have occurred.

A.28 “Unvested Shares” means any Restricted Shares that are not Awarded Shares.

 

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THE PNC FINANCIAL SERVICES GROUP, INC.

2006 INCENTIVE AWARD PLAN

* * *

CASH-PAYABLE RESTRICTED SHARE UNITS AGREEMENT

* * *

 

GRANTEE:    [Name] GRANT DATE:                        , 20     SHARE UNITS:   
[Number]

 

 

1. Definitions. Certain terms used in this Cash-Payable Restricted Share Units
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 Share Units with Dividend Equivalents. 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”) an Award of Restricted Share Units (“Restricted
Share Units”) of the number of share units of PNC common stock set forth above,
together with Dividend Equivalents (“Dividend Equivalents”), payable in cash,
with respect to the same number of shares of PNC common stock as the number of
share units set forth above, all subject to acceptance of the Grant by Grantee
in accordance with Section 15 and subject to the terms and conditions of the
Agreement and the Plan.

3. Terms of Grant. The Grant is subject to the following terms and conditions.

Restricted Share Units and Dividend Equivalents are not transferable. The
Restricted Share Units and ongoing Dividend Equivalents are subject to
forfeiture pursuant to the terms and conditions of the Agreement prior to
vesting; provided, however, that there shall be no forfeiture of Dividend
Equivalents with respect to dividend payment dates that occur prior to a
forfeiture of the Restricted Share Units.

 

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Restricted Share Units that vest in accordance with the terms of Section 6 will
be settled pursuant to and in accordance with the terms of that Section.
Unvested Share Units that are forfeited by Grantee pursuant to and in accordance
with the terms of Section 5 will be cancelled without payment of any
consideration by PNC.

The right to ongoing Dividend Equivalents is granted in connection with the
Restricted Share Units and therefore shall terminate, without payment of any
consideration by PNC, upon the settlement of Vested Share Units or the
cancellation of Unvested Share Units, whichever is applicable.

4. Dividend Equivalents. From and after the Grant Date until such time as the
Restricted Share Units are either (i) settled pursuant to and in accordance with
the terms of Section 6 or (ii) cancelled upon forfeiture in accordance with the
terms of Section 5, the Corporation will make cash payments to Grantee
equivalent to the amounts of the quarterly cash dividends Grantee would have
received, if any, had the Restricted Share Units been shares of PNC common stock
issued and outstanding on the record dates for cash dividends on PNC common
stock that occur during such period.

The Corporation will make such payments to Grantee pursuant to this Section 4
each quarter following the dividend payment date that relates to each such
record date, if any. Such amounts shall be paid in cash in accordance with
applicable regular payroll practice as in effect from time to time for similarly
situated employees within 30 days after the applicable dividend payment date.

Termination or cancellation of these Dividend Equivalents will have no effect on
cash payments made pursuant to this Section 4 prior to such termination or
cancellation.

If these Dividend Equivalents terminate because the Restricted Share Units have
been settled pursuant to and in accordance with the terms of Section 6 and such
termination occurs after the dividend record date for a quarter but before the
related dividend payment date, the Corporation will nonetheless make such a
quarterly dividend equivalent payment to Grantee with respect to that record
date, if any.

5. Forfeiture Events.

(a) Termination for Cause. In the event that Grantee’s employment with the
Corporation is terminated by the Corporation for Cause prior to the 3rd
anniversary of the Grant Date and prior to the occurrence of a Change in
Control, if any, all Restricted Share Units that are Unvested Share Units on
Grantee’s Termination Date, together with all Dividend Equivalents granted
hereunder in connection with such Restricted Share Units, will be forfeited by
Grantee to PNC and cancelled without payment of any consideration by PNC.

(b) Competitive Activities. Unvested Share Units that would otherwise remain
outstanding after Grantee’s Termination Date, if any, together with all Dividend
Equivalents granted hereunder in connection with such Restricted Share Units,
will be

 

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forfeited by Grantee to PNC and cancelled without payment of any consideration
by PNC in the event that, at any time prior to the date such units vest in
accordance with Section 6, PNC, by PNC’s Designated Person, determines in its
sole discretion that Grantee has engaged in Competitive Activities; provided,
however, that no determination that Grantee has engaged in Competitive
Activities may be made on or after the date of Grantee’s death or on or after
the date of a Change in Control.

For purposes of this Section 5(b), “Competitive Activities” shall mean any
participation in, employment by, ownership of any equity interest exceeding 1%
in, or promotion or organization of, any Person (other than PNC or any of its
subsidiaries) engaged in financial services activities, including but not
limited to a bank, bank affiliate, broker, dealer, or hedge fund, whether
Grantee is acting as agent, consultant, independent contractor, employee,
officer, director, investor, partner, shareholder, proprietor or in any other
individual or representative capacity therein.

(c) Upon forfeiture and cancellation pursuant to the provisions of this
Section 5 of Unvested Share Units and Dividend Equivalents granted in connection
with such Restricted Share Units, the Grant will terminate and neither Grantee
nor any successors, heirs, assigns or legal representatives of Grantee will
thereafter have any further rights or interest in such Unvested Share Units or
Dividend Equivalents.

6. Vesting; Cash Settlement of Vested Share Units.

(a) Vesting. For the purpose of determining the vesting date applicable to each
portion of the Grant, the Restricted Share Units are divided into three
“Tranches” as follows: (1) 1/3 of the share units (rounded down to the nearest
whole share unit) are in the First Tranche of the Restricted Share Units;
(2) another 1/3 of the share units (rounded down to the nearest whole share
unit) are in the Second Tranche of the Restricted Share Units; and (3) the
remaining share units are in the Third Tranche of the Restricted Share Units.

Unless Unvested Share Units have been forfeited pursuant to the terms of
Section 5, Grantee’s Unvested Share Units will vest upon the earliest to occur
of the following:

 

 

(i)

the 1st anniversary of the Grant Date in the case of the First Tranche share
units, the 2nd anniversary of the Grant Date in the case of the Second Tranche
share units, and the 3rd anniversary of the Grant Date in the case of the Third
Tranche share units, respectively;

 

  (ii) the date of Grantee’s death; and

 

  (iii) the occurrence of a Change in Control.

(b) Settlement. Vested Share Units will be settled at the time set forth in this
Section 6(b) by the payment to Grantee of cash in an amount equal to the number
of Vested Share Units being settled multiplied by the Fair Market Value of a
share of PNC common stock on the settlement date.

 

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Payment will be made to Grantee with respect to the settlement of Vested Share
Units as soon as practicable, but in no event later than 30 days, following the
settlement date, which shall be the earliest to occur of the following:

 

 

(i)

the 1st, 2nd, or 3rd anniversary of the Grant Date, as the case may be, with
respect to the First, Second or Third Tranche of the Restricted Share Units, as
applicable;

 

  (ii) the date of Grantee’s death; and

 

  (iii) the occurrence of a Change in Control, but only if said Change in
Control also qualifies as a Change in Control under Internal Revenue Code
Section 409A and any regulations, revenue procedures or revenue rulings issued
by the Secretary of the United States Treasury applicable to such Section 409A.

7. No Rights as Shareholder. Grantee will have no rights as a shareholder of PNC
by virtue of this Grant.

8. Capital Adjustments. Upon the occurrence of a corporate transaction or
transaction (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
Compensation Committee shall make those adjustments, if any, in the number,
class or kind of Restricted Share Units and related Dividend Equivalents then
outstanding under the Grant that it deems appropriate in its discretion to
reflect the Corporate Transaction(s) such that the rights of Grantee are neither
enlarged nor diminished as a result of such Corporate Transaction or
Transactions, including without limitation measuring the value per share unit by
reference to the per share value of the consideration payable to a PNC common
shareholder in connection with such Corporation Transaction.

All determinations hereunder shall be made by the Compensation Committee in its
sole discretion and shall be final, binding and conclusive for all purposes on
all parties, including without limitation Grantee.

9. Prohibitions Against Sale, Assignment, etc.; Payment to Legal Representative.

(a) Unvested Restricted Share Units and Dividend Equivalents may not be sold,
assigned, transferred, exchanged, pledged, hypothecated or otherwise encumbered.

(b) If Grantee is deceased at the time Restricted Share Units vest and are
settled in accordance with the terms of Section 6, such payment will be made to
the executor or administrator of Grantee’s estate or to Grantee’s other legal
representative as determined in good faith by PNC.

 

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(c) Any payment made in good faith by PNC to Grantee’s executor, administrator
or other legal representative shall extinguish all right to payment hereunder.

10. Withholding Taxes.

Where Grantee has not previously satisfied all applicable withholding tax
obligations, PNC will, at the time the tax withholding obligation arises in
connection herewith, retain an amount sufficient to satisfy the minimum amount
of taxes then required to be withheld by the Corporation in connection therewith
from any amounts then payable hereunder to Grantee.

If Grantee desires to have an additional amount withheld above the required
minimum, up to Grantee’s W-4 obligation if higher, and if PNC so permits,
Grantee may elect to satisfy this additional withholding by payment of cash. If
Grantee’s W-4 obligation does not exceed the required minimum withholding in
connection herewith, no additional withholding may be made.

11. Employment. Neither the granting of the Restricted Share Units with Dividend
Equivalents nor any term or provision of the Agreement shall constitute or be
evidence of any understanding, expressed or implied, on the part of PNC or any
subsidiary to employ Grantee for any period or in any way alter Grantee’s status
as an employee at will.

12. Subject to the Plan and the Compensation Committee. In all respects the
Grant and the Agreement are subject to the terms and conditions of the Plan,
which has been made available to Grantee and is incorporated herein by
reference; provided, however, the terms of the Plan shall not be considered an
enlargement of any benefits under the Agreement. Further, the Grant and the
Agreement are subject to any interpretation of, and any rules and regulations
issued by, the Compensation Committee or its delegate or under the authority of
the Compensation Committee, whether made or issued before or after the Grant
Date.

13. Headings; Entire Agreement. Headings used in the Agreement are provided for
reference and convenience only, shall not be considered part of the Agreement,
and shall not be employed in the construction of the Agreement. The Agreement
constitutes the entire agreement between Grantee and PNC and supersedes all
other discussions, negotiations, correspondence, representations, understandings
and agreements between the parties with respect to the subject matter hereof.

14. Enforcement Provisions. Grantee understands and agrees to the following
provisions regarding enforcement of the Agreement.

 

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14.1 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, Grantee
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.

14.2 No Waiver. Failure of PNC to demand strict compliance with any of the
terms, covenants or conditions of the Agreement will not be deemed a waiver of
such term, covenant or condition, nor will 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.

14.3 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 Grantee, Grantee agrees to reimburse PNC for
any amounts Grantee may be required to reimburse PNC or its subsidiaries
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 Grantee reimburse PNC or its
subsidiaries for such amounts pursuant to Section 304 of the Sarbanes-Oxley Act
of 2002.

15. Acceptance of Grant; PNC Right to Cancel. If Grantee does not accept the
Grant by executing and delivering a copy of the Agreement to PNC, without
altering or changing the terms thereof in any way, within 30 days of receipt by
Grantee of a copy of the Agreement, PNC may, in its sole discretion, withdraw
its offer and cancel the Grant at any time prior to Grantee’s delivery to PNC of
a copy of the Agreement executed by Grantee. Otherwise, upon execution and
delivery of the Agreement by both PNC and Grantee, the Agreement is effective.

In the event that one or more record dates for dividends on PNC common stock
occur after the Grant Date but before the date the Agreement is effective in
accordance with this Section 15, then upon the effectiveness of the Agreement,
the Corporation will make a cash payment to Grantee equivalent to the dividend
equivalent payment Grantee would have received had the Agreement been effective
and the Restricted Share Units been outstanding on the Grant Date.

 

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IN WITNESS WHEREOF, PNC has caused the Agreement to be signed on its behalf as
of the Grant Date.

 

THE PNC FINANCIAL SERVICES GROUP, INC.

By:

 

Chairman and Chief Executive Officer

ATTEST:

By:

 

Corporate Secretary

ACCEPTED AND AGREED TO by GRANTEE

 

Grantee

 

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ANNEX A

CERTAIN DEFINITIONS

* * *

A.1 “Agreement” means the Cash-Payable Restricted Share Units Agreement between
PNC and Grantee evidencing the Grant of the Restricted Share Units with Dividend
Equivalents to Grantee pursuant to the Plan.

A.2 “Board” means the Board of Directors of PNC.

A.3 “Cause” shall mean, for purposes of the Agreement:

(a) the willful and continued failure of Grantee to substantially perform
Grantee’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 Grantee by PNC that specifically
identifies the manner in which it is believed that Grantee has not substantially
performed Grantee’s duties;

(b) a material breach by Grantee 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;

(c) any act of fraud, misappropriation, material dishonesty, or embezzlement by
Grantee against PNC or one of its subsidiaries or any client or customer of PNC
or a subsidiary;

(d) any conviction (including a plea of guilty or of nolo contendere) of Grantee
for, or entry by Grantee into a pre-trial disposition with respect to, the
commission of a felony; or

(e) entry of any order against Grantee, 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 Grantee’s employment or other
service relationship with the Corporation.

The cessation of employment of Grantee will be deemed to have been a termination
of Grantee’s employment with the Corporation for Cause for purposes of the
Agreement only if and when the Designated Person determines that Grantee is
guilty of conduct described in clause (a), (b) or (c) above or that an event
described in clause (d) or (e) above has occurred with respect to Grantee and,
if so, determines that the termination of Grantee’s employment with the
Corporation will be deemed to have been for Cause.

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

 

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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 will be deemed to have occurred if:

(a) any Person, excluding employee benefits 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 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 20% and 40%, inclusive, of such voting
power will 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 60% of the combined voting power
immediately after such Fundamental Transaction of (1) PNC’s outstanding
securities, (2) the surviving entity’s outstanding securities, or (3) 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 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 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 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.

 

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Notwithstanding anything to the contrary herein, a divestiture or spin-off of a
subsidiary or division of PNC or any of its subsidiaries will not by itself
constitute a Change in Control.

A.5 “Compensation 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.6 “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.7 “Corporation” means PNC and its Consolidated Subsidiaries.

A.8 “Designated Person” shall mean PNC’s CEO or any other executive officer of
PNC.

A.9 “Exchange Act” means the Securities Exchange Act of 1934 as amended, and the
rules and regulations promulgated thereunder.

A.10 “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.11 “GAAP” or “generally accepted accounting principles” means accounting
principles generally accepted in the United States of America.

A.12 “Grant” means the Award of Restricted Share Units with Dividend Equivalents
granted to Grantee pursuant to Section 2 of the Agreement.

A.13 “Grant Date” means the Grant Date set forth on page 1 of the Agreement and
is the date as of which the Restricted Share Units with Dividend Equivalents are
authorized to be granted by the Compensation Committee or its delegate in
accordance with the Plan.

A.14 “Grantee” means the person to whom the Award of Restricted Share Units with
Dividend Equivalents is granted, and is identified as Grantee on page 1 of the
Agreement.

A.15 “Internal Revenue Code” means the Internal Revenue Code of 1986 as amended,
and the rules and regulations promulgated thereunder.

 

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A.16 “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.17 “PNC” means The PNC Financial Services Group, Inc.

A.18 “SEC” means the United States Securities and Exchange Commission.

A.19 “Termination Date” means Grantee’s last date of employment with the
Corporation. If Grantee 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 Grantee does not continue to be
employed by PNC or a Consolidated Subsidiary, then for purposes of the
Agreement, Grantee’s employment with the Corporation terminates effective at the
time this occurs.

A.20 “Unvested Share Units” means any Restricted Share Units that have not
vested in accordance with the terms of Section 6 of the Agreement.

A.21 “Vested Share Units.” Provided that the Restricted Share Units have not
been forfeited pursuant to the terms of Section 5 of the Agreement and are then
outstanding, Restricted Share Units will vest in accordance with the terms of
Section 6 of the Agreement. Restricted Share Units that have vested and become
Vested Share Units are no longer subject to forfeiture under the terms of the
Agreement.

 

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THE PNC FINANCIAL SERVICES GROUP, INC.

2006 INCENTIVE AWARD PLAN

* * *

CASH-PAYABLE RESTRICTED SHARE UNITS AGREEMENT

* * *

 

GRANTEE:    [Name] GRANT DATE:                        , 20     SHARE UNITS:   
[Whole Number] share units

 

 

1. Definitions. Certain terms used in this Cash-Payable Restricted Share Units
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 Share Units with Dividend Equivalents. 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 grants to the Grantee
named above (“Grantee”) an award of Restricted Share Units (“Restricted Share
Units”) of the number of share units of PNC common stock set forth above,
together with Dividend Equivalents (“Dividend Equivalents”), payable in cash,
with respect to the same number of shares of PNC common stock as the number of
share units set forth above (together, the “Award”), all subject to acceptance
of the Award by Grantee in accordance with Section 16 and subject to the terms
and conditions of the Agreement and the Plan.

3. Terms of Award. The Award is subject to the following terms and conditions.

Restricted Share Units and Dividend Equivalents are not transferable. The
Restricted Share Units and ongoing Dividend Equivalents are subject to
forfeiture pursuant to the terms and conditions of the Agreement prior to
vesting; provided, however, that there shall be no forfeiture of Dividend
Equivalents with respect to dividend payment dates that occur prior to a
forfeiture of the Restricted Share Units to which they relate.

 

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Restricted Share Units that vest in accordance with the terms of Section 6 will
be settled pursuant to and in accordance with the terms of that Section.
Unvested Share Units that are forfeited by Grantee pursuant to and in accordance
with the terms of Section 5 will be cancelled without payment of any
consideration by PNC.

The right to ongoing Dividend Equivalents is granted in connection with the
Restricted Share Units and therefore shall terminate, without payment of any
consideration by PNC, upon the settlement of Vested Share Units or the
cancellation of Unvested Share Units, whichever is applicable.

4. Dividend Equivalents. From and after the Grant Date until such time as the
Restricted Share Units granted in connection with such Dividend Equivalents are
either (i) settled pursuant to and in accordance with the terms of Section 6 or
(ii) cancelled upon forfeiture in accordance with the terms of Section 5, the
Corporation will make cash payments to Grantee equivalent to the amounts of the
quarterly cash dividends Grantee would have received, if any, had the Restricted
Share Units to which such Dividend Equivalents relate been shares of PNC common
stock issued and outstanding on the record dates for cash dividends on PNC
common stock that occur during such period.

The Corporation will make such payments to Grantee pursuant to this Section 4
each quarter following the dividend payment date that relates to each such
record date, if any. Such amounts shall be paid in cash in accordance with
applicable regular payroll practice as in effect from time to time for similarly
situated employees within 30 days after the applicable dividend payment date.

Termination or cancellation of Dividend Equivalents will have no effect on cash
payments made pursuant to this Section 4 prior to such termination or
cancellation.

If the right to ongoing Dividend Equivalents terminates because the Restricted
Share Units to which they relate have been settled pursuant to and in accordance
with the terms of Section 6 and such termination occurs after the dividend
record date for a quarter but before the related dividend payment date, the
Corporation will nonetheless make such a quarterly dividend equivalent payment
to Grantee with respect to that record date, if any.

5. Forfeiture Events.

5.1 Termination for Cause. In the event that Grantee’s employment with the
Corporation is terminated by the Corporation for Cause prior to [date], all
Restricted Share Units that are Unvested Share Units on Grantee’s Termination
Date, together with the right to Dividend Equivalents granted in connection with
such Restricted Share Units, will be forfeited by Grantee to PNC and cancelled
without payment of any consideration by PNC; provided, however, this Section 5.1
shall only apply if the Termination Date occurs prior to the occurrence of a
Change of Control, if any.

 

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5.2 Termination Other than for Death or Disability. In the event that Grantee’s
employment with the Corporation terminates prior to [date] for any reason other
than (i) Grantee’s death or (ii) termination of Grantee’s employment by the
Corporation by reason of Grantee’s Disability, all Restricted Share Units that
are Unvested Share Units on Grantee’s Termination Date, together with the right
to Dividend Equivalents granted in connection with such Restricted Share Units,
will be forfeited by Grantee to PNC and cancelled without payment of any
consideration by PNC; provided, however, this Section 5.2 shall only apply if
the Termination Date occurs prior to the occurrence of a Change of Control, if
any.

5.3 Detrimental Conduct. Unvested Share Units that would otherwise remain
outstanding after Grantee’s Termination Date, if any, together with the right to
Dividend Equivalents granted in connection with such Restricted Share Units,
will be forfeited by Grantee to PNC and cancelled without payment of any
consideration by PNC in the event that, at any time prior to the date such units
vest in accordance with Section 6, PNC, by PNC’s Designated Person, determines
in its sole discretion that Grantee has engaged in Detrimental Conduct;
provided, however, that no determination that Grantee has engaged in Detrimental
Conduct may be made on or after the date of Grantee’s death or on or after the
date of a Change of Control.

5.4 Judicial Criminal Proceedings. If any criminal charges are brought against
Grantee alleging the commission of a felony that relates to or arises out of
Grantee’s employment or other service relationship with the Corporation in an
indictment or in other analogous formal charges commencing judicial criminal
proceedings, then to the extent that the Restricted Share Units are still
outstanding and have not yet vested, the vesting of the Unvested Share Units
shall be automatically suspended.

Such suspension of vesting shall continue until the earliest to occur of the
following:

(1) resolution of the criminal proceedings in a manner that results in a
conviction (including a plea of guilty or of nolo contendere) of Grantee for, or
any entry by Grantee into a pre-trial disposition with respect to, the
commission of a felony that relates to or arises out of Grantee’s employment or
other service relationship with the Corporation;

(2) resolution of the criminal proceedings in one of the following ways: (i) the
charges as they relate to such alleged felony have been dismissed (with or
without prejudice); (ii) Grantee has been acquitted of such alleged felony; or
(iii) 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;

(3) Grantee’s death; or

 

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(4) the occurrence of a Change of Control.

If the suspension is terminated by the occurrence of an event set forth in
clause (1) above, the Restricted Share Units, together with all Dividend
Equivalents granted in connection with such Restricted Share Units, will, upon
such occurrence, be automatically forfeited by Grantee to PNC and cancelled
without payment of any consideration by PNC.

If the suspension is terminated by the occurrence of an event set forth in
clause (2), (3) or (4) above, vesting and settlement shall proceed in accordance
with Section 6, as applicable.

5.5 Termination of Award Upon Forfeiture of Units. The Award will terminate, and
neither Grantee nor any successors, heirs, assigns or legal representatives of
Grantee will thereafter have any further rights or interest in the Restricted
Share Units or the related right to Dividend Equivalents evidenced by the
Agreement, upon forfeiture and cancellation pursuant to the provisions of
Section 5 of such Restricted Share Units and related right to Dividend
Equivalents.

6. Vesting; Cash Settlement of Vested Share Units.

6.1 Vesting. Unless Unvested Share Units have been forfeited pursuant to the
provisions of Section 5, Grantee’s Unvested Share Units will vest upon the
earliest to occur of the following:

 

  (i) [date] or, if later, on the date as of which any suspension imposed
pursuant to Section 5.4 is lifted and the units vest, as applicable;

 

  (ii) Grantee’s death; and

 

  (iii) the occurrence of a Change of Control.

6.2 Settlement. Vested Share Units will be settled at the time set forth in this
Section 6.2 by the payment to Grantee of cash in an amount equal to the number
of Vested Share Units being settled multiplied by the Fair Market Value of a
share of PNC common stock on the settlement date or as otherwise determined
pursuant to Section 8 if applicable.

Payment will be made to Grantee with respect to the settlement of Vested Share
Units as soon as practicable, but in no event later than 30 days, following the
settlement date, which shall be the earliest to occur of the following:

 

  (i) [date] or, if later, the date as of which any suspension imposed pursuant
to Section 5.4 is lifted and the units vest, as applicable;

 

  (ii) the date of Grantee’s death; and

 

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  (iii) the occurrence of a Change of Control, but only if such Change of
Control is a permissible payment event under Section 409A of the Internal
Revenue Code and any regulations, revenue procedures or revenue rulings issued
by the Secretary of the United States Treasury applicable to such Section 409A.

In the event that the settlement date is the date as of which any suspension
imposed pursuant to Section 5.4 is lifted, payment will be made no later than
the earlier of (a) 30 days after the settlement date and (b) December 31 of the
year in which the settlement date occurs.

7. No Rights as Shareholder. Grantee will have no rights as a shareholder of PNC
by virtue of this Award.

8. Capital Adjustments. Upon the occurrence of a corporate transaction or
transaction (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
Compensation Committee or its delegate shall make those adjustments, if any, in
the number, class or kind of Restricted Share Units and related Dividend
Equivalents then outstanding under the Award that it deems appropriate in its
discretion to reflect the Corporate Transaction(s) such that the rights of
Grantee are neither enlarged nor diminished as a result of such Corporate
Transaction or Transactions, including without limitation measuring the value
per share unit by reference to the per share value of the consideration payable
to a PNC common shareholder in connection with such Corporate Transaction.

All determinations hereunder shall be made by the Compensation Committee or its
delegate in its sole discretion and shall be final, binding and conclusive for
all purposes on all parties, including without limitation Grantee.

9. Prohibitions Against Sale, Assignment, etc.; Payment to Legal Representative.

(a) Restricted Share Units and Dividend Equivalents may not be sold, assigned,
transferred, exchanged, pledged, hypothecated or otherwise encumbered.

(b) If Grantee is deceased at the time vested Restricted Share Units are settled
in accordance with the terms of Section 6, such payment will be made to the
executor or administrator of Grantee’s estate or to Grantee’s other legal
representative as determined in good faith by PNC.

(c) Any payment made in good faith by PNC to Grantee’s executor, administrator
or other legal representative shall extinguish all right to payment hereunder.

 

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10. Withholding Taxes. Where Grantee has not previously satisfied all applicable
withholding tax obligations, PNC will, at the time the tax withholding
obligation arises in connection herewith, retain an amount sufficient to satisfy
the minimum amount of taxes then required to be withheld by the Corporation in
connection therewith from any amounts then payable hereunder to Grantee. If any
withholding is required prior to the time amounts are payable to Grantee
hereunder, the withholding will be taken from other compensation then payable to
Grantee or as otherwise determined by PNC.

If Grantee desires to have an additional amount withheld above the required
minimum, up to Grantee’s W-4 obligation if higher, and if PNC so permits,
Grantee may elect to satisfy this additional withholding by payment of cash. If
Grantee’s W-4 obligation does not exceed the required minimum withholding in
connection herewith, no additional withholding may be made.

11. Employment. Neither the granting of the Restricted Share Units and Dividend
Equivalents nor any term or provision of the Agreement shall constitute or be
evidence of any understanding, expressed or implied, on the part of PNC or any
subsidiary to employ Grantee for any period or in any way alter Grantee’s status
as an employee at will.

12. Subject to the Plan and the Compensation Committee. In all respects the
Award and the Agreement are subject to the terms and conditions of the Plan,
which has been made available to Grantee and is incorporated herein by
reference; provided, however, the terms of the Plan shall not be considered an
enlargement of any benefits under the Agreement. Further, the Award and the
Agreement are subject to any interpretation of, and any rules and regulations
issued by, the Compensation Committee or its delegate or under the authority of
the Compensation Committee, whether made or issued before or after the Grant
Date.

13. Headings; Entire Agreement. Headings used in the Agreement are provided for
reference and convenience only, shall not be considered part of the Agreement,
and shall not be employed in the construction of the Agreement. The Agreement
constitutes the entire agreement between Grantee and PNC with respect to the
subject matters addressed herein, and supersedes all other discussions,
negotiations, correspondence, representations, understandings and agreements
between the parties concerning the subject matters hereof.

14. Grantee Covenants.

14.1 General. Grantee and PNC acknowledge and agree that Grantee has received
adequate consideration with respect to enforcement of the provisions of
Sections 14 and 15 by virtue of receiving this Restricted Share Units and
Dividend Equivalents award (regardless of whether such share units ultimately
vest and settle); 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 Grantee from earning a living.

 

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14.2 Non-Solicitation; No-Hire. Grantee agrees to comply with the provisions of
subsections (a) and (b) of this Section 14.2 while employed by the Corporation
and for a period of twelve (12) months after Grantee’s Termination Date
regardless of the reason for such termination of employment.

(a) Non-Solicitation. Grantee shall not, directly or indirectly, either for
Grantee’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 Grantee 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. Grantee shall not, directly or indirectly, either for Grantee’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
Grantee assist any other Person in such activities.

14.3 Confidentiality. During Grantee’s employment with the Corporation, and
thereafter regardless of the reason for termination of such employment, Grantee
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 Grantee, 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.

14.4 Ownership of Inventions. Grantee 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 Grantee during the term of Grantee’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”). Grantee
agrees to assign and hereby does assign to PNC or its designee all of Grantee’s
right, title and interest, including copyrights and patent rights, in and to all
Developments. Grantee 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 14.4
shall be performed by Grantee without further compensation and will continue
beyond the Termination Date.

 

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15. Enforcement Provisions. Grantee understands and agrees to the following
provisions regarding enforcement of the Agreement.

15.1 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, Grantee
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.

15.2 Equitable Remedies. A breach of the provisions of any of Sections 14.2,
14.3 or 14.4 will cause the Corporation irreparable harm, and the Corporation
will therefore be entitled to issuance of immediate, as well as permanent,
injunctive relief restraining Grantee, and each and every person and entity
acting in concert or participating with Grantee, from initiation and/or
continuation of such breach.

15.3 Tolling Period. If it becomes necessary or desirable for the Corporation to
seek compliance with the provisions of Section 14.2 by legal proceedings, the
period during which Grantee 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.

15.4 No Waiver. Failure of PNC to demand strict compliance with any of the
terms, covenants or conditions of the Agreement will not be deemed a waiver of
such term, covenant or condition, nor will 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.

15.5 Severability. The restrictions and obligations imposed by Sections 14.2,
14.3 and 14.4 are separate and severable, and it is the intent of Grantee 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 will remain
valid and binding upon Grantee.

15.6 Reform. In the event any of Sections 14.2, 14.3 and 14.4 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 Grantee and PNC that said court reduce and reform the provisions
thereof so as to apply the greatest limitations considered enforceable by the
court.

 

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15.7 Waiver of Jury Trial. Each of Grantee 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 14.2, 14.3 and 14.4.

15.8 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 Grantee, Grantee agrees to reimburse PNC for
any amounts Grantee may be required to reimburse PNC or its subsidiaries
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 Grantee reimburse PNC or its
subsidiaries for such amounts pursuant to Section 304 of the Sarbanes-Oxley Act
of 2002.

15.9. Compliance with Internal Revenue Code Section 409A. It is the intention of
the parties that the Award and the Agreement comply with the provisions of
Section 409A of the Internal Revenue Code 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,
Grantee agrees that PNC may, without the consent of Grantee, modify the
Agreement and the Award 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.

16. Acceptance of Award; PNC Right to Cancel. If Grantee does not accept the
Award by executing and delivering a copy of the Agreement to PNC, without
altering or changing the terms thereof in any way, within 30 days of receipt by
Grantee of a copy of the Agreement, PNC may, in its sole discretion, withdraw
its offer and cancel the Award at any time prior to Grantee’s delivery to PNC of
a copy of the Agreement executed by Grantee. Otherwise, upon execution and
delivery of the Agreement by both PNC and Grantee, the Agreement is effective.

In the event that one or more record dates for dividends on PNC common stock
occur after the Grant Date but before the date the Agreement is effective in
accordance with this Section 16, then upon the effectiveness of the Agreement,
the Corporation will make a cash payment to Grantee equal to the amount of the
dividend equivalent payment Grantee would have received had the Agreement been
effective on the Grant Date.

 

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IN WITNESS WHEREOF, PNC has caused the Agreement to be signed on its behalf as
of the Grant Date.

 

THE PNC FINANCIAL SERVICES GROUP, INC.

By:

 

Chairman and Chief Executive Officer

ATTEST:

By:

 

Corporate Secretary

ACCEPTED AND AGREED TO by GRANTEE

 

Grantee

 

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ANNEX A

CERTAIN DEFINITIONS

* * *

A.1 “Agreement” means the Cash-Payable Restricted Share Units Agreement between
PNC and Grantee evidencing the Restricted Share Units with Dividend Equivalents
award granted to Grantee pursuant to the Plan.

A.2 “Award” means the Restricted Share Units with Dividend Equivalents award
granted to Grantee pursuant to the Plan and evidenced by the Agreement.

A.3 “Board” means the Board of Directors of PNC.

A.4 “Cause” means:

(a) The willful and continued failure of Grantee to substantially perform
Grantee’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 Grantee by PNC that specifically
identifies the manner in which it is believed that Grantee has not substantially
performed Grantee’s duties;

(b) A material breach by Grantee 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;

(c) Any act of fraud, misappropriation, material dishonesty, or embezzlement by
Grantee against PNC or one of its subsidiaries or any client or customer of PNC
or a subsidiary;

(d) Any conviction (including a plea of guilty or of nolo contendere) of Grantee
for, or entry by Grantee into a pre-trial disposition with respect to, the
commission of a felony; or

(e) Entry of any order against Grantee, 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 Grantee’s employment or other
service relationship with the Corporation.

The cessation of employment of Grantee will be deemed to have been a termination
of Grantee’s employment with the Corporation for Cause for purposes of the
Agreement only if and when PNC, by PNC’s Designated Person, determines that
Grantee is guilty of conduct described in clause (a), (b) or (c) above or that
an event described in clause (d) or (e) above has occurred with respect to
Grantee and, if so, determines that the termination of Grantee’s employment with
the Corporation will be deemed to have been for Cause.

 

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A.5 “CEO” means the chief executive officer of PNC.

A.6 “Change of Control” means:

(a) Any individual, entity or group (within the meaning of Section 13(d)(3) or
14(d)(2) of the Securities Exchange Act of 1934, as amended (the “Exchange
Act”)) (a “Person”) becomes the beneficial owner (within the meaning of Rule
13d-3 promulgated under the Exchange Act) of 20% or more of either (A) the
then-outstanding shares of common stock of PNC (the “Outstanding PNC Common
Stock”) or (B) the combined voting power of the then-outstanding voting
securities of PNC entitled to vote generally in the election of directors (the
“Outstanding PNC Voting Securities”); provided, however, that, for purposes of
this Section A.6(a), the following acquisitions shall not constitute a Change of
Control: (1) any acquisition directly from PNC, (2) any acquisition by PNC,
(3) any acquisition by any employee benefit plan (or related trust) sponsored or
maintained by PNC or any company controlled by, controlling or under common
control with PNC (an “Affiliated Company”), (4) any acquisition pursuant to an
Excluded Combination (as defined in Section A.6(c)) or (5) an acquisition of
beneficial ownership representing between 20% and 40%, inclusive, of the
Outstanding PNC Voting Securities or Outstanding PNC Common Stock shall not be
considered a Change of Control if the Incumbent Board as of immediately prior to
any such acquisition approves such acquisition either prior to or immediately
after its occurrence;

(b) Individuals who, as of the date hereof, constitute the Board (the “Incumbent
Board”) cease for any reason to constitute at least a majority of the Board
(excluding any Board seat that is vacant or otherwise unoccupied); provided,
however, that any individual becoming a director subsequent to the date hereof
whose election, or nomination for election by PNC’s shareholders, was approved
by a vote of at least two-thirds of the directors then comprising the Incumbent
Board shall be considered as though such individual was a member of the
Incumbent Board, but excluding, for this purpose, any such individual whose
initial assumption of office occurs as a result of an actual or threatened
election contest with respect to the election or removal of directors or other
actual or threatened solicitation of proxies or consents by or on behalf of a
Person other than the Board;

(c) Consummation of a reorganization, merger, statutory share exchange or
consolidation or similar transaction involving PNC or any of its subsidiaries, a
sale or other disposition of all or substantially all of the assets of PNC, or
the acquisition of assets or stock of another entity by PNC or any of its
subsidiaries (each, a “Business Combination”), excluding, however, a Business
Combination following which all or substantially all of the individuals and
entities that were the beneficial owners of the Outstanding PNC Common Stock and
the Outstanding PNC Voting Securities immediately prior to such Business
Combination beneficially own, directly or indirectly, more than 60% of the
then-outstanding shares of common stock (or, for a non-corporate

 

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entity, equivalent securities) and the combined voting power of the
then-outstanding voting securities entitled to vote generally in the election of
directors (or, for a non-corporate entity, equivalent governing body), as the
case may be, of the entity resulting from such Business Combination (including,
without limitation, an entity that, as a result of such transaction, owns PNC or
all or substantially all of PNC’s assets either directly or through one or more
subsidiaries) in substantially the same proportions as their ownership
immediately prior to such Business Combination of the Outstanding PNC Common
Stock and the Outstanding PNC Voting Securities, as the case may be (such a
Business Combination, an “Excluded Combination”); or

(d) Approval by the shareholders of PNC of a complete liquidation or dissolution
of PNC.

A.7 “Compensation 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.8 “Competitive Activity” means 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
(a) engaged in business activities similar to some or all of the business
activities of PNC or any subsidiary as of Grantee’s Termination Date or
(b) engaged in business activities which Grantee knows PNC or any subsidiary
intends to enter within the first twelve (12) months after Grantee’s Termination
Date or, if later and if applicable, after the date specified in clause (ii) of
Section A.12(a), in either case whether Grantee is acting as agent, consultant,
independent contractor, employee, officer, director, investor, partner,
shareholder, proprietor or in any other individual or representative capacity
therein.

A.9 “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.10 “Corporation” means PNC and its Consolidated Subsidiaries.

A.11 “Designated Person” shall mean PNC’s CEO or any other executive officer of
PNC.

A.12 “Detrimental Conduct” means:

(a) Grantee 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 Grantee’s
Termination Date and extending through (and including) the first
(1st) anniversary of the later of (i) Grantee’s Termination Date and, if
different, (ii) the first date after Grantee’s Termination Date as of which
Grantee ceases to be engaged by the

 

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Corporation in any capacity for which Grantee 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 Grantee 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 Grantee
for, or any entry by Grantee into a pre-trial disposition with respect to, the
commission of a felony that relates to or arises out of Grantee’s employment or
other service relationship with the Corporation.

Grantee will be deemed to have engaged in Detrimental Conduct for purposes of
the Agreement only if and when PNC, by PNC’s Designated Person, determines that
Grantee 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 Grantee
and, if so, determines that Grantee will be deemed to have engaged in
Detrimental Conduct.

A.13 “Disabled” or “Disability” means, except as may otherwise be required by
Section 409A of the Internal Revenue Code, that Grantee either (i) is unable to
engage in any substantial gainful activity by reason of any medically
determinable physical or mental impairment that can be expected to result in
death or can be expected to last for a continuous period of not less than 12
months, or (ii) is, by reason of any medically determinable physical or mental
impairment that can be expected to result in death or can be expected to last
for a continuous period of not less than 12 months, receiving (and has received
for at least three months) income replacement benefits under any
Corporation-sponsored disability benefit plan. If Grantee has been determined to
be eligible for Social Security disability benefits, Grantee shall be presumed
to be Disabled as defined herein.

A.14 “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.15 “GAAP” or “generally accepted accounting principles” means accounting
principles generally accepted in the United States of America.

A.16 “Grant Date” means the Grant Date set forth on page 1 of the Agreement and
is the date as of which the Restricted Share Units with Dividend Equivalents are
authorized to be granted by the Compensation Committee or its delegate in
accordance with the Plan.

 

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A.17 “Grantee” means the person to whom the Restricted Share Units with Dividend
Equivalents award is granted, and is identified as Grantee on page 1 of the
Agreement.

A.18 “Internal Revenue Code” means the Internal Revenue Code of 1986 as amended,
and the rules and regulations promulgated thereunder.

A.19 “PNC” means The PNC Financial Services Group, Inc.

A.20 Intentionally omitted

A.21 “SEC” means the United States Securities and Exchange Commission.

A.22 “Termination Date” means Grantee’s last date of employment with the
Corporation. If Grantee 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 Grantee does not continue to be
employed by PNC or a Consolidated Subsidiary, then for purposes of the
Agreement, Grantee’s employment with the Corporation terminates effective at the
time this occurs.

A.23 “Unvested Share Units” means any Restricted Share Units that are
outstanding but have not vested in accordance with the terms of Section 6 of the
Agreement.

A.24 “Vested Share Units.” Provided that the Restricted Share Units have not
been forfeited pursuant to the terms of Section 5 of the Agreement and are then
outstanding, Restricted Share Units will vest in accordance with the terms of
Section 6 of the Agreement.

 

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Restricted Stock Grant

Continued Employment Performance Goals

Restricted Periods: One Year (50%); Two Years (50%)

THE PNC FINANCIAL SERVICES GROUP, INC.

2006 INCENTIVE AWARD PLAN

* * *

RESTRICTED STOCK AGREEMENT

* * *

 

GRANTEE:    < name > GRANT DATE:                        , 20     SHARES:    <
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.”

For purposes of determining the Restricted Period and Continued Employment
Performance Goal applicable to each portion of the Restricted Shares under the
Agreement, the Restricted Shares are divided into two “Tranches” as follows:

(a) fifty percent (50%) of these shares (rounded down to the nearest whole
share) are in the First Tranche of Restricted Shares; and

 

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(c) the remaining fifty percent (50%) of these shares are in the Second Tranche
of Restricted Shares.

3. Terms of Grant. The Grant is subject to the following terms and conditions.

Restricted Shares are subject to the Restricted Period applicable to such shares
as provided in Section A.24 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 applicable Restricted
Period unless and until forfeited pursuant to the terms of the Agreement.

Any certificate or certificates representing 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
applicable Restricted Period that become Awarded Shares as provided in Section
A.3 of Annex A will be released and reissued to, or at the proper direction of,
Grantee or Grantee’s legal representative pursuant to Section 9.

4. Rights as Shareholder. Except as provided in Section 6 and subject to
Section 16, Grantee will have all the rights and privileges of a shareholder
with respect to the Restricted Shares including, but not limited to, the right
to vote the Restricted Shares and the right to receive dividends thereon if and
when declared by the Board; provided, however, that all such rights and
privileges will cease immediately upon any forfeiture of such shares.

5. Capital Adjustments. Restricted Shares awarded hereunder shall, as issued and
outstanding shares of PNC common stock, be subject to such adjustment as may be
necessary to reflect corporate transactions, including, without limitation,
stock dividends, stock splits, spin-offs, split-offs, recapitalizations,
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reorganizations of or by PNC; provided, however, that any shares received as
distributions on or in exchange for Unvested Shares shall be subject to the
terms and conditions of the Agreement as if they were Restricted Shares, and
shall have the same Restricted Period and Performance Goal that are applicable
to the Restricted Shares that such shares were a distribution on or for which
such shares were exchanged.

6. Prohibitions Against Sale, Assignment, etc.; Payment to Legal Representative.

(a) Unvested Shares may not be sold, assigned, transferred, exchanged, pledged,
hypothecated or otherwise encumbered, other than as may be required pursuant to
Section 10.2, unless and until the Restricted Period terminates and the Awarded
Shares are released and reissued by PNC pursuant to Section 9.

(b) If Grantee is deceased at the time Restricted Shares become Awarded Shares,
PNC will deliver such shares to the executor or administrator of Grantee’s
estate or to Grantee’s other legal representative as determined in good faith by
the Committee.

(c) Any delivery of shares or other payment made in good faith by PNC to
Grantee’s executor, administrator or other legal representative shall extinguish
all right to payment hereunder.

7. Forfeiture; Death; Qualifying Disability or Retirement Termination;
Termination in Anticipation of Change of Control.

7.1 Forfeiture on Termination of Employment. Except as otherwise provided in and
subject to the conditions of Section 7.3, Section 7.4(a), Section 7.5(a),
Section 7.6, Section 7.7, or Section 8, if applicable, in the event that
Grantee’s employment with the Corporation terminates prior to the second
(2nd) anniversary of the Grant Date, all Restricted Shares that are Unvested
Shares on Grantee’s Termination Date will be forfeited by Grantee to PNC without
payment of any consideration by PNC.

Upon forfeiture of Unvested Shares pursuant to the provisions of this
Section 7.1 or the provisions of Section 7.2, Section 7.4(b) or Section 7.5(b),
neither Grantee nor any successors, heirs, assigns or legal representatives of
Grantee will thereafter have any further rights or interest in such Unvested
Shares or any certificate or certificates representing such Unvested Shares.

7.2 Forfeiture for Detrimental Conduct. Unvested Shares that would otherwise
remain outstanding after Grantee’s Termination Date, if any, will be forfeited
by Grantee to PNC without payment of any consideration by PNC in the event that,
at any time prior to the date such shares become Awarded Shares, PNC determines
that Grantee has engaged in Detrimental Conduct; provided, however, that:
(a) this Section 7.2 will not apply to Restricted Shares that remain outstanding
after Grantee’s Termination Date pursuant to Section 7.3 or Section 7.6, if any;
(b) no determination that Grantee has engaged in Detrimental Conduct may be made
on or after the date of

 

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Grantee’s death; (c) Detrimental Conduct will not apply to conduct by or
activities of successors to the Restricted Shares by will or the laws of descent
and distribution in the event of Grantee’s death; and (d) Detrimental Conduct
will cease to apply to any Restricted Shares upon a Change of Control.

If any criminal charges are brought against Grantee alleging the commission of a
felony that relates to or arises out of Grantee’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 vesting of the Restricted Shares, to the extent that the Restricted
Shares are still outstanding and have not yet become Awarded Shares, or to
require the escrow of the proceeds of the shares. Any such suspension or escrow
is subject to the following restrictions:

(i) It may last only until the earliest to occur of the following:

(A) resolution of the criminal proceedings in a manner that constitutes
Detrimental Conduct;

(B) resolution of the criminal proceeding in one of the following ways: (1) the
charges as they relate to such alleged felony have been dismissed (with or
without prejudice), (2) Grantee has been acquitted of such alleged felony, or
(3) 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

(C) termination of the suspension or escrow in the discretion of the Committee;
and

(ii) It may be imposed only if the Committee makes reasonable provision for the
retention or realization of the value of the Restricted Shares to Grantee as if
no suspension or escrow had been imposed upon any termination of the suspension
or escrow under clauses (i)(B) or (C) above.

7.3 Death. In the event of Grantee’s death while an employee of the Corporation
and prior to the second (2nd) anniversary of the Grant Date, all remaining
applicable Continued Employment Performance Goals will be deemed to have been
achieved, and the Restricted Period or Periods with respect to all then
outstanding Unvested Shares, if any, will terminate on the date of Grantee’s
death.

The Restricted Shares which thereby become Awarded Shares will be released and
reissued by PNC to, or at the proper direction of, Grantee’s legal
representative pursuant to Section 9 as soon as administratively practicable
following such date.

 

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7.4 Qualifying Disability Termination.

(a) In the event Grantee’s employment with the Corporation is terminated prior
to the second (2nd) anniversary of the Grant Date by the Corporation by reason
of Grantee’s Disability, Unvested Shares will not be automatically forfeited on
Grantee’s Termination Date. Instead, Unvested Shares will, subject to the
forfeiture provisions of Section 7.2 and Section 7.4(b), remain outstanding
pending and subject to affirmative approval of the vesting of the Restricted
Shares pursuant to this Section 7.4(a) by the Designated Person specified in
Section A.13 of Annex A.

If such Unvested Shares are still outstanding but the Designated Person has not
made a specific determination to either approve or disapprove the vesting of the
Unvested Shares or relevant portion thereof by the day immediately preceding the
first (1st) anniversary of the Grant Date in the case of First Tranche shares or
the second (2nd) anniversary of the Grant Date in the case of Second Tranche
shares, then the Restricted Period applicable to such shares will be
automatically extended through the first to occur of: (1) the day the Designated
Person makes a specific determination regarding such vesting; and (2) either
(i) the ninetieth (90th) day following the first (1st) anniversary of the Grant
Date in the case of First Tranche shares or the second (2nd) anniversary of the
Grant Date in the case of Second Tranche shares, if the Designated Person is the
Chief Human Resources Officer of PNC, or (ii) the 180th day following such
anniversary date if the Designated Person is the Committee or its delegate,
whichever is applicable; provided, however, if the Committee has acted to
suspend the vesting of the Restricted Shares pursuant to Section 7.2, the
Restricted Period will be extended until the terms of such suspension have been
satisfied.

If the vesting of the then outstanding Unvested Shares or relevant portion
thereof is affirmatively approved by the Designated Person on or prior to the
last day of the applicable Restricted Period for the respective Tranche of
shares, including any extension of such Restricted Period, if applicable, then
the applicable Continued Employment Performance Goal with respect to such
Tranche of shares will be deemed to have been achieved, and the Restricted
Period with respect to all Unvested Shares in such Tranche then outstanding, if
any, will terminate as of the end of the day on the date of such approval. The
Restricted Shares outstanding at the termination of such applicable Restricted
Period will become Awarded Shares and will be released and reissued by PNC
pursuant to Section 9.

(b) If the Designated Person disapproves the vesting of Unvested Shares that had
remained outstanding after Grantee’s Termination Date pending and subject to
affirmative approval of vesting, then all such Unvested Shares that are still
outstanding will be forfeited by Grantee to PNC on such disapproval date without
payment of any consideration by PNC.

If by the end of the applicable Restricted Period, including any extension of
such Restricted Period pursuant to the second paragraph of Section 7.4(a), if
applicable, the Designated Person has neither affirmatively approved nor
specifically disapproved the vesting of Unvested Shares that had remained
outstanding after Grantee’s Termination Date pending and subject to affirmative
approval of vesting, then all such Unvested

 

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Shares that are still outstanding will be forfeited by Grantee to PNC at the
close of business on the last day of the applicable Restricted Period without
payment of any consideration by PNC.

7.5 Qualifying Retirement.

(a) In the event that Grantee Retires on or after the first (1st) anniversary of
the Grant Date but prior to the second (2nd) anniversary of the Grant Date,
Unvested Shares will not be automatically forfeited on Grantee’s Termination
Date. Instead, Unvested Shares will, subject to the forfeiture provisions of
Section 7.2 and Section 7.5(b), remain outstanding pending and subject to
affirmative approval of the vesting of the Restricted Shares pursuant to this
Section 7.5(a) by the Designated Person specified in Section A.13 of Annex A.

If such Unvested Shares are still outstanding but the Designated Person has not
made a specific determination to either approve or disapprove the vesting of the
Unvested Shares by the day immediately preceding the second (2nd) anniversary of
the Grant Date, then the Restricted Period applicable to such shares will be
automatically extended through the first to occur of: (1) the day the Designated
Person makes a specific determination regarding such vesting; and (2) either
(i) the ninetieth (90th) day following the second (2nd) anniversary of the Grant
Date, if the Designated Person is the Chief Human Resources Officer of PNC, or
(ii) the 180th day following such anniversary date if the Designated Person is
the Committee or its delegate, whichever is applicable; provided, however, if
the Committee has acted to suspend the vesting of the Restricted Shares pursuant
to Section 7.2, the Restricted Period will be extended until the terms of such
suspension have been satisfied.

If the vesting of the then outstanding Unvested Shares is affirmatively approved
by the Designated Person on or prior to the last day of the applicable
Restricted Period for such shares, including any extension of such Restricted
Period, if applicable, then the applicable Continued Employment Performance Goal
with respect to such Tranche of shares will be deemed to have been achieved, and
the Restricted Period with respect to all Unvested Shares in such Tranche then
outstanding, if any, will terminate as of the end of the day on the date of such
approval. The Restricted Shares outstanding at the termination of such
applicable Restricted Period will become Awarded Shares and will be released and
reissued by PNC pursuant to Section 9.

(b) If the Designated Person disapproves the vesting of Unvested Shares that had
remained outstanding after Grantee’s Termination Date pending and subject to
affirmative approval of vesting, then all such Unvested Shares that are still
outstanding will be forfeited by Grantee to PNC on such disapproval date without
payment of any consideration by PNC.

If by the end of the applicable Restricted Period, including any extension of
such Restricted Period pursuant to the second paragraph of Section 7.5(a), if
applicable, the Designated Person has neither affirmatively approved nor
specifically disapproved the

 

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vesting of Unvested Shares that had remained outstanding after Grantee’s
Termination Date pending and subject to affirmative approval of vesting, then
all such Unvested Shares that are still outstanding will be forfeited by Grantee
to PNC at the close of business on the last day of the applicable Restricted
Period without payment of any consideration by PNC.

7.6 Termination in Anticipation of a Change of Control. Notwithstanding anything
in the Agreement to the contrary, if Grantee’s employment with the Corporation
is terminated by the Corporation prior to the second (2nd) anniversary of the
Grant Date and such termination is an Anticipatory Termination as defined in
Section A.2 of Annex A, then: (i) all remaining applicable Continued Employment
Performance Goals, if any, will be deemed to have been achieved and the
Restricted Period or Periods with respect to all then outstanding Unvested
Shares, if any, will terminate as of the end of the day on the day immediately
preceding Grantee’s Termination Date; and (ii) all Restricted Shares that
thereby become Awarded Shares will be released and reissued by PNC pursuant to
Section 9 as soon as administratively practicable following such date.

7.7 Other Committee Authority. Prior to the second (2nd) anniversary of the
Grant Date, the Committee or its delegate may in their sole discretion, but need
not, determine that, with respect to some or all of Grantee’s outstanding
Unvested Shares, the applicable Continued Employment Performance Goal or Goals
will be deemed to have been achieved and the Restricted Period or Periods with
respect to such shares will terminate, all subject to such restrictions, terms
or conditions as the Committee or its delegate may in their sole discretion
determine.

8. Change of Control. Notwithstanding anything in the Agreement to the contrary,
upon the occurrence of a Change of Control: (i) if Grantee is an employee of the
Corporation as of the day immediately preceding the Change of Control, all
remaining applicable Continued Employment Performance Goals will be deemed to
have been achieved and the Restricted Period or Periods with respect to all then
outstanding Unvested Shares, if any, will terminate as of the day immediately
preceding the Change of Control; (ii) if Grantee’s employment with the
Corporation terminated prior to the occurrence of the Change of Control but
Unvested Shares remained outstanding after such termination of employment
pursuant to Section 7.4 or Section 7.5 and are still outstanding pending and
subject to affirmative approval of the vesting of such shares by the Designated
Person specified in Section A.13 of Annex A, then with respect to all such
Unvested Shares outstanding as of the day immediately preceding the Change of
Control, such affirmative vesting approval will be deemed to have been given,
the applicable Continued Employment Performance Goal or Goals will be deemed to
have been achieved, and the applicable Restricted Period or Periods will
terminate, all as of the day immediately preceding the Change of Control; and
(iii) all Restricted Shares that thereby become Awarded Shares will be released
and reissued by PNC pursuant to Section 9 as soon as administratively
practicable following such date.

9. Termination of Prohibitions; Payment to Legal Representative. Except as
otherwise directed by the Committee pursuant to the suspension or escrow
provisions of

 

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Section 7.2, if and to the extent applicable, following termination of the
Restricted Period, PNC will release and issue or reissue the then outstanding
whole Restricted Shares that have become Awarded Shares without the legend
referred to in Section 3.

Upon release and issuance of shares that have become Awarded Shares in
accordance with this Section 9, PNC or its designee will deliver such whole
shares to, or at the proper direction of, Grantee or Grantee’s legal
representative.

Any delivery of shares or other payment made in good faith by PNC to Grantee’s
executor, administrator or other legal representative shall extinguish all right
to payment hereunder.

10. Payment of Taxes.

10.1 Internal Revenue Code Section 83(b) Election. In the event that Grantee
makes an Internal Revenue Code Section 83(b) election with respect to the
Restricted Shares, Grantee shall satisfy all then applicable federal, state or
local withholding tax obligations arising from that election (a) by payment of
cash or (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, by physical delivery to
PNC of certificates for whole shares of PNC common stock that are not subject to
any contractual restriction, pledge or other encumbrance and that have been
owned by Grantee for at least six (6) months and, in the case of restricted
stock, for which it has been at least six (6) months since the restrictions
lapsed, or by a combination of cash and such stock. Any such tax election shall
be made pursuant to a form to be provided to Grantee by PNC on request. For
purposes of this Section 10.1, shares of PNC common stock that are used to
satisfy applicable withholding tax obligations will be valued at their Fair
Market Value on the date the tax withholding obligation arises. Grantee will
provide to PNC a copy of any Internal Revenue Code Section 83(b) election filed
by Grantee with respect to the Restricted Shares not later than ten (10) days
after the filing of such election.

10.2 Other Tax Liabilities. Where Grantee has not previously satisfied all
applicable withholding tax obligations, PNC will, at the time the tax
withholding obligation arises with respect to any Restricted Shares, retain
sufficient whole shares of PNC common stock from the shares granted pursuant to
the Agreement to satisfy the minimum amount of taxes then required to be
withheld by the Corporation in connection with such shares. For purposes of this
Section 10.2, shares of PNC common stock retained to satisfy applicable
withholding tax requirements will be valued at their Fair Market Value on the
date the tax withholding obligation arises.

PNC will not retain more than the number of shares sufficient to satisfy the
minimum amount of taxes then required to be withheld in connection with the
Restricted Shares. If Grantee desires to have an additional amount withheld
above the required minimum, up to Grantee’s W-4 obligation if higher, and if PNC
so permits, Grantee may elect to satisfy this additional withholding either:
(a) by payment of cash; or (b) if and to the extent then permitted by PNC and
subject to such terms and conditions as PNC may

 

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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 Grantee for at least six
(6) months and, in the case of restricted stock, for which it has been at least
six (6) months since the restrictions lapsed. Any such tax election shall be
made pursuant to a form provided by PNC. Shares of PNC common stock that are
used for this purpose will be valued at their Fair Market Value on the date the
tax withholding obligation arises. If Grantee’s W-4 obligation does not exceed
the required minimum withholding in connection with the Restricted Shares, no
additional withholding may be made.

11. Employment. Neither the granting and issuance of the Restricted Shares nor
any term or provision of the Agreement shall constitute or be evidence of any
understanding, expressed or implied, on the part of PNC or any subsidiary to
employ Grantee for any period or in any way alter Grantee’s status as an
employee at will.

12. Subject to the Plan and the Committee. In all respects the Grant and the
Agreement are subject to the terms and conditions of the Plan, which has been
made available to Grantee and is incorporated herein by reference; provided,
however, the terms of the Plan shall not be considered an enlargement of any
benefits under the Agreement. Further, the Grant and the Agreement are subject
to any interpretation of, and any rules and regulations issued by, the Committee
or its delegate or under the authority of the Committee, whether made or issued
before or after the Grant Date.

13. Headings; Entire Agreement. Headings used in the Agreement are provided for
reference and convenience only, shall not be considered part of the Agreement,
and shall not be employed in the construction of the Agreement. The Agreement
constitutes the entire agreement between Grantee and PNC and supersedes all
other discussions, negotiations, correspondence, representations, understandings
and agreements between the parties with respect to the subject matter hereof.

14. Grantee Covenants.

14.1 General. Grantee and PNC acknowledge and agree that Grantee has received
adequate consideration with respect to enforcement of the provisions of
Sections 14 and 15 by virtue of receiving this grant of Restricted Shares
(regardless of whether such shares ultimately become Awarded Shares); 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 Grantee from earning a living.

14.2 Non-Solicitation; No-Hire. Grantee agrees to comply with the provisions of
subsections (a) and (b) of this Section 14.2 while employed by the Corporation
and for a period of one year after Grantee’s Termination Date regardless of the
reason for such termination of employment.

 

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(a) Non-Solicitation. Grantee shall not, directly or indirectly, either for
Grantee’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 Grantee 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. Grantee shall not, directly or indirectly, either for Grantee’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
Grantee assist any other Person in such activities.

Notwithstanding the above, if Grantee’s employment with the Corporation is
terminated by the Corporation and such termination is an Anticipatory
Termination, then commencing immediately after such Termination Date, the
provisions of subsections (a) and (b) of this Section 14.2 will no longer apply
and will be replaced with the following subsection (c):

(c) No-Hire. Grantee agrees that Grantee shall not, for a period of one year
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.

14.3 Confidentiality. During Grantee’s employment with the Corporation, and
thereafter regardless of the reason for termination of such employment, Grantee
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 Grantee, 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.

14.4 Ownership of Inventions. Grantee 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 Grantee during the term of Grantee’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”). Grantee
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designee all of Grantee’s right, title and interest, including copyrights and
patent rights, in and to all Developments. Grantee 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 14.4 shall be performed by Grantee without further
compensation and will continue beyond the Termination Date.

15. Enforcement Provisions. Grantee understands and agrees to the following
provisions regarding enforcement of the Agreement.

15.1 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, Grantee
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.

15.2 Equitable Remedies. A breach of the provisions of any of Sections 14.2,
14.3 or 14.4 will cause the Corporation irreparable harm, and the Corporation
will therefore be entitled to issuance of immediate, as well as permanent,
injunctive relief restraining Grantee, and each and every person and entity
acting in concert or participating with Grantee, from initiation and/or
continuation of such breach.

15.3 Tolling Period. If it becomes necessary or desirable for the Corporation to
seek compliance with the provisions of Section 14.2 by legal proceedings, the
period during which Grantee 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.

15.4 No Waiver. Failure of PNC to demand strict compliance with any of the
terms, covenants or conditions of the Agreement will not be deemed a waiver of
such term, covenant or condition, nor will 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.

15.5 Severability. The restrictions and obligations imposed by Sections 14.2,
14.3 and 14.4 are separate and severable, and it is the intent of Grantee 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 will remain
valid and binding upon Grantee.

15.6 Reform. In the event any of Sections 14.2, 14.3 and 14.4 are determined by
a court of competent jurisdiction to be unenforceable because unreasonable
either as

 

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to length of time or area to which said restriction applies, it is the intent of
Grantee and PNC that said court reduce and reform the provisions thereof so as
to apply the greatest limitations considered enforceable by the court.

15.7 Waiver of Jury Trial. Each of Grantee 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 14.2, 14.3 and 14.4.

15.8 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 Grantee, Grantee agrees to reimburse PNC for
any amounts Grantee may be required to reimburse PNC or its subsidiaries
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 Grantee reimburse PNC or its
subsidiaries for such amounts pursuant to Section 304 of the Sarbanes-Oxley Act
of 2002.

15.9. Compliance with Internal Revenue Code Section 409A. It is the intention of
the parties that the Grant 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,
Grantee agrees that PNC may, without the consent of Grantee, modify the
Agreement and the Grant 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.

16. Acceptance of Grant; PNC Right to Cancel. If Grantee does not accept the
Grant by executing and delivering a copy of the Agreement to PNC, without
altering or changing the terms thereof in any way, within thirty (30) days of
receipt by Grantee of a copy of the Agreement, PNC may, in its sole discretion,
withdraw its offer and cancel the Grant at any time prior to Grantee’s delivery
to PNC of a copy of the Agreement executed by Grantee. Otherwise, upon execution
and delivery of the Agreement by both PNC and Grantee, the Agreement is
effective.

Grantee will not have any of the rights of a shareholder with respect to the
Restricted Shares as set forth in Section 4, and will not have the right to vote
or to receive dividends on such shares, until the date the Agreement is
effective and the Restricted Shares are issued in accordance with this
Section 16.

 

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In the event that one or more record dates for dividends on PNC common stock
occur after the Grant Date but before the date the Agreement is effective in
accordance with this Section 16 and the Restricted Shares are issued, then upon
the effectiveness of the Agreement, the Corporation will make a cash payment to
Grantee equivalent to the amount of the dividends Grantee would have received
had the Agreement been effective and the Restricted Shares had been issued on
the Grant Date. Any such amount will be payable in accordance with applicable
regular payroll practice as in effect from time to time for similarly situated
employees.

IN WITNESS WHEREOF, PNC has caused the Agreement to be signed on its behalf as
of the Grant Date.

 

THE PNC FINANCIAL SERVICES GROUP, INC.

By:

 

Chairman and Chief Executive Officer

ATTEST:

By:

 

Corporate Secretary

ACCEPTED AND AGREED TO by GRANTEE

 

Grantee

 

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ANNEX A

CERTAIN DEFINITIONS

* * *

A.1 “Agreement” means the Restricted Stock Agreement between PNC and Grantee
evidencing the Grant of the Restricted Shares Award to Grantee pursuant to the
Plan.

A.2 “Anticipatory Termination.” If Grantee’s employment with the Corporation is
terminated by the Corporation other than for Cause, death or Disability prior to
the date on which a Change of Control occurs, and if it is reasonably
demonstrated by Grantee that such termination of employment (i) was at the
request of a third party that has taken steps reasonably calculated to effect a
Change of Control or (ii) otherwise arose in connection with or anticipation of
a Change of Control, such a termination of employment is an “Anticipatory
Termination.”

For purposes of this definition, “Cause” shall mean:

(a) the willful and continued failure of Grantee to substantially perform
Grantee’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 Grantee by the Board or the CEO which
specifically identifies the manner in which the Board or the CEO believes that
Grantee has not substantially performed Grantee’s duties; or

(b) the willful engaging by Grantee 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 (a) and (b), no act or failure to act, on
the part of Grantee, shall be considered willful unless it is done, or omitted
to be done, by Grantee in bad faith and without reasonable belief that Grantee’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 Grantee’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 Grantee in good faith and in the best interests of the Corporation.

The cessation of employment of Grantee will be deemed to be a termination of
Grantee’s employment with the Corporation for Cause for purposes of the
Agreement only if and when there shall have been delivered to Grantee, as part
of the notice of Grantee’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, Grantee is guilty of

 

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conduct described in clause (a) or clause (b) above and, in either case,
specifying the particulars thereof in detail. Such resolution shall be adopted
only after (i) reasonable notice of such Board meeting is provided to Grantee,
together with written notice that PNC believes that Grantee is guilty of conduct
described in clause (a) or clause (b) above and, in either case, specifying the
particulars thereof in detail, and (ii) Grantee is given an opportunity,
together with counsel, to be heard before the Board.

A.3 “Awarded Shares.” Provided that the Restricted Shares are then outstanding,
Restricted Shares become “Awarded Shares” when all of the following have
occurred: (a) the Continued Employment Performance Goal or Goals applicable to
such Restricted Shares have been achieved or are deemed to have been achieved
pursuant to the terms of the Agreement; (b) the Restricted Period or Periods
applicable to such Restricted Shares have terminated; and (c) if the Committee
has acted to suspend the vesting of the Restricted Shares pursuant to
Section 7.2 of the Agreement, the terms of such suspension have been satisfied
and the Restricted Shares have not been forfeited.

A.4 “Board” means the Board of Directors of PNC.

A.5 “Cause.” Except as otherwise provided in Section A.2, “Cause” means:

(a) the willful and continued failure of Grantee to substantially perform
Grantee’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 Grantee by PNC that specifically
identifies the manner in which it is believed that Grantee has not substantially
performed Grantee’s duties;

(b) a material breach by Grantee 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;

(c) any act of fraud, misappropriation, material dishonesty, or embezzlement by
Grantee against PNC or one of its subsidiaries or any client or customer of PNC
or a subsidiary;

(d) any conviction (including a plea of guilty or of nolo contendere) of Grantee
for, or entry by Grantee into a pre-trial disposition with respect to, the
commission of a felony; or

(e) entry of any order against Grantee, 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 Grantee’s employment or other
service relationship with the Corporation.

Except as otherwise provided in Section A.2, the cessation of employment of
Grantee will be deemed to have been a termination of Grantee’s employment with
the Corporation for Cause for purposes of the Agreement only if and when the CEO
or his or

 

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her designee (or, if Grantee is the CEO, the Board) determines that Grantee is
guilty of conduct described in clause (a), (b) or (c) above or that an event
described in clause (d) or (e) above has occurred with respect to Grantee and,
if so, determines that the termination of Grantee’s employment with the
Corporation will be deemed to have been for Cause.

A.6 “CEO” means the chief executive officer of PNC.

A.7 “Change of Control” means:

(a) Any individual, entity or group (within the meaning of Section 13(d)(3) or
14(d)(2) of the Securities Exchange Act of 1934, as amended (the “Exchange
Act”)) (a “Person”) becomes the beneficial owner (within the meaning of Rule
13d-3 promulgated under the Exchange Act) of 20% or more of either (A) the
then-outstanding shares of common stock of PNC (the “Outstanding PNC Common
Stock”) or (B) the combined voting power of the then-outstanding voting
securities of PNC entitled to vote generally in the election of directors (the
“Outstanding PNC Voting Securities”); provided, however, that, for purposes of
this Section A.7(a), the following acquisitions shall not constitute a Change of
Control: (1) any acquisition directly from PNC, (2) any acquisition by PNC,
(3) any acquisition by any employee benefit plan (or related trust) sponsored or
maintained by PNC or any company controlled by, controlling or under common
control with PNC (an “Affiliated Company”), (4) any acquisition pursuant to an
Excluded Combination (as defined in Section A.7(c)) or (5) an acquisition of
beneficial ownership representing between 20% and 40%, inclusive, of the
Outstanding PNC Voting Securities or Outstanding PNC Common Stock shall not be
considered a Change of Control if the Incumbent Board as of immediately prior to
any such acquisition approves such acquisition either prior to or immediately
after its occurrence;

(b) Individuals who, as of the date hereof, constitute the Board (the “Incumbent
Board”) cease for any reason to constitute at least a majority of the Board
(excluding any Board seat that is vacant or otherwise unoccupied); provided,
however, that any individual becoming a director subsequent to the date hereof
whose election, or nomination for election by PNC’s shareholders, was approved
by a vote of at least two-thirds of the directors then comprising the Incumbent
Board shall be considered as though such individual was a member of the
Incumbent Board, but excluding, for this purpose, any such individual whose
initial assumption of office occurs as a result of an actual or threatened
election contest with respect to the election or removal of directors or other
actual or threatened solicitation of proxies or consents by or on behalf of a
Person other than the Board;

(c) Consummation of a reorganization, merger, statutory share exchange or
consolidation or similar transaction involving PNC or any of its subsidiaries, a
sale or other disposition of all or substantially all of the assets of PNC, or
the acquisition of assets or stock of another entity by PNC or any of its
subsidiaries (each, a “Business Combination”), excluding, however, a Business
Combination following which all or substantially all of the individuals and
entities that were the beneficial owners of the Outstanding PNC Common Stock and
the Outstanding PNC Voting Securities

 

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immediately prior to such Business Combination beneficially own, directly or
indirectly, more than 60% of the then-outstanding shares of common stock (or,
for a non-corporate entity, equivalent securities) and the combined voting power
of the then-outstanding voting securities entitled to vote generally in the
election of directors (or, for a non-corporate entity, equivalent governing
body), as the case may be, of the entity resulting from such Business
Combination (including, without limitation, an entity that, as a result of such
transaction, owns PNC or all or substantially all of PNC’s assets either
directly or through one or more subsidiaries) in substantially the same
proportions as their ownership immediately prior to such Business Combination of
the Outstanding PNC Common Stock and the Outstanding PNC Voting Securities, as
the case may be (such a Business Combination, an “Excluded Combination”); or

(d) Approval by the shareholders of PNC of a complete liquidation or dissolution
of PNC.

A.8 “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.9 “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 (a) engaged in business activities similar to some or
all of the business activities of PNC or any subsidiary as of Grantee’s
Termination Date or (b) engaged in business activities which Grantee knows PNC
or any subsidiary intends to enter within the first twelve (12) months after
Grantee’s Termination Date or, if later and if applicable, after the date
specified in clause (ii) of Section A.14(a), in either case whether Grantee 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 “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.11 “Continued Employment Performance Goal” means: (a) with respect to shares
in the First Tranche of Restricted Shares, the One-Year Continued Employment
Performance Goal; and (b) with respect to shares in the Second Tranche of
Restricted Shares, the Two-Year Continued Employment Performance Goal, as
applicable.

A.12 “Corporation” means PNC and its Consolidated Subsidiaries.

A.13 “Designated Person” will be either: (a) the Committee or its delegate, if
Grantee was a member of the Corporate Executive Group (or equivalent successor

 

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classification) or was subject to the reporting requirements of Section 16(a) of
the Exchange Act with respect to PNC securities when he or she ceased to be an
employee of the Corporation; or (b) the Chief Human Resources Officer of PNC, if
Grantee is not within one of the groups specified in Section A.13(a).

A.14 “Detrimental Conduct” means, for purposes of the Agreement:

(a) Grantee 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 Grantee’s
Termination Date and extending through (and including) the first
(1st) anniversary of the later of (i) Grantee’s Termination Date and, if
different, (ii) the first date after Grantee’s Termination Date as of which
Grantee ceases to be engaged by the Corporation in any capacity for which
Grantee 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 Grantee 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 Grantee
for, or any entry by Grantee into a pre-trial disposition with respect to, the
commission of a felony that relates to or arises out of Grantee’s employment or
other service relationship with the Corporation.

Grantee will be deemed to have engaged in Detrimental Conduct for purposes of
the Agreement only if and when the Committee (if Grantee 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 Grantee was not such an executive
officer), whichever is applicable, determines that Grantee 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 Grantee, and, if so, determines
that Grantee will be deemed to have engaged in Detrimental Conduct.

A.15 “Disabled” or “Disability” means, except as may otherwise be required by
Section 409A of the Internal Revenue Code, that Grantee either (i) is unable to
engage in any substantial gainful activity by reason of any medically
determinable physical or mental impairment that can be expected to result in
death or can be expected to last for a continuous period of not less than 12
months, or (ii) is, by reason of any medically determinable physical or mental
impairment that can be expected to result in death or can be expected to last
for a continuous period of not less than 12 months, receiving (and has received
for at least three months) income replacement benefits under any
Corporation-sponsored disability benefit plan. If Grantee has been determined to
be eligible for Social Security disability benefits, Grantee shall be presumed
to be Disabled as defined herein.

 

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A.16 “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.17 “GAAP” or “generally accepted accounting principles” means accounting
principles generally accepted in the United States of America.

A.18 “Grant” means the Restricted Shares Award granted to Grantee pursuant to
Section 2 of the Agreement and pursuant to which the Restricted Shares are
issued to Grantee subject to the restrictions set forth in and the terms and
conditions of the Agreement and the Plan.

A.19 “Grant Date” means the Grant Date set forth on page 1 of the Agreement and
is the date as of which the Restricted Shares Award is authorized to be granted
by the Committee or its delegate in accordance with the Plan.

A.20 “Grantee” means the person to whom the Restricted Stock Award is granted
and the Restricted Shares are issued, and is identified as Grantee on page 1 of
the Agreement.

A.21 “Internal Revenue Code” means the Internal Revenue Code of 1986 as amended,
and the rules and regulations promulgated thereunder.

A.22 “One-Year Continued Employment Performance Goal” means, subject to early
achievement if so determined by the Committee or its delegate or to deemed
achievement pursuant to Section 7.3, Section 7.4, Section 7.5, Section 7.6, or
Section 8 of the Agreement, if applicable, that Grantee has been continuously
employed by the Corporation for the period from the Grant Date through (and
including) the day immediately preceding the first of the following to occur:
(a) the first (1st) anniversary of the Grant Date; (b) the date of Grantee’s
death; and (c) the day a Change of Control is deemed to have occurred.

A.23 “PNC” means The PNC Financial Services Group, Inc.

A.24 “Restricted Period”. The applicable Restricted Period for Restricted Shares
means, subject to early termination if so determined by the Committee or its
delegate or pursuant to Section 7.6 of the Agreement, if applicable, the period
set forth in the applicable subsection below:

(a) For First Tranche Shares: with respect to shares in the First Tranche of
Restricted Shares, the period from the Grant Date through (and including) the
earlier of: (a) the date of Grantee’s death; (b) the day immediately preceding
the day a Change of Control is deemed to have occurred; and (c) the day
immediately preceding the first (1st) anniversary of the Grant Date or, if
later, the last day of any extension of the Restricted Period pursuant to
Section 7.4(a) or Section 7.5(a) of the Agreement, if applicable; and

 

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(b) For Second Tranche Shares: with respect to shares in the Second Tranche of
Restricted Shares, the period from the Grant Date through (and including) the
earlier of: (a) the date of Grantee’s death; (b) the day immediately preceding
the day a Change of Control is deemed to have occurred; and (c) the day
immediately preceding the second (2nd) anniversary of the Grant Date or, if
later, the last day of any extension of the Restricted Period pursuant to
Section 7.4(a) or Section 7.5(a) of the Agreement, if applicable.

A.25 “Retire” or “Retirement” means termination of Grantee’s employment with the
Corporation at any time and for any reason (other than termination by reason of
Grantee’s death or by the Corporation for Cause and, if the Committee or the CEO
so determines prior to such divestiture, other than by reason of termination in
connection with a divestiture of assets or a divestiture of one or more
subsidiaries of the Corporation) on or after the first date on which Grantee has
both attained at least age fifty-five (55) and completed 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 calculated under the provisions of
The PNC Financial Services Group, Inc. Pension Plan.

A.26 “Retiree” means a Grantee who has Retired.

A.27 “SEC” means the United States Securities and Exchange Commission.

A.28 “Termination Date” means Grantee’s last date of employment with the
Corporation. If Grantee 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 Grantee does not continue to be
employed by PNC or a Consolidated Subsidiary, then for purposes of the
Agreement, Grantee’s employment with the Corporation terminates effective at the
time this occurs.

A.29 “Tranche(s)” or “First or Second Tranche” have the meanings set forth in
Section 2 of the Agreement.

A.30 “Two-Year Continued Employment Performance Goal” means, subject to early
achievement if so determined by the Committee or its delegate or to deemed
achievement pursuant to Section 7.3, Section 7.4, Section 7.5, Section 7.6, or
Section 8 of the Agreement, if applicable, that Grantee has been continuously
employed by the Corporation for the period from the Grant Date through (and
including) the day immediately preceding the first of the following to occur:
(a) the second (2nd) anniversary of the Grant Date; (b) the date of Grantee’s
death; and (c) the day a Change of Control is deemed to have occurred.

A.31 “Unvested Shares” means any Restricted Shares that are not Awarded Shares.

 

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Restricted Stock Grant

Continued Employment Performance Goals

Restricted Periods: Three Years (25%); Four Years (25%); Five Years (50%)

THE PNC FINANCIAL SERVICES GROUP, INC.

2006 INCENTIVE AWARD PLAN

* * *

RESTRICTED STOCK AGREEMENT

* * *

 

GRANTEE:    < name > GRANT DATE:                        , 20     SHARES:    <
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.”

For purposes of determining the Restricted Period and Continued Employment
Performance Goal applicable to each portion of the Restricted Shares under the
Agreement, the Restricted Shares are divided into three “Tranches” as follows:

(a) twenty-five percent (25%) of these shares (rounded down to the nearest whole
share) are in the First Tranche of Restricted Shares;

 

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(b) another twenty-five percent (25%) of these shares (rounded down to the
nearest whole share) are in the Second Tranche of Restricted Shares; and

(c) the remaining fifty percent (50%) of these shares are in the Third Tranche
of Restricted Shares.

3. Terms of Grant. The Grant is subject to the following terms and conditions.

Restricted Shares are subject to the Restricted Period applicable to such shares
as provided in Section A.25 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 applicable Restricted
Period unless and until forfeited pursuant to the terms of the Agreement.

Any certificate or certificates representing 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
applicable Restricted Period that become Awarded Shares as provided in Section
A.3 of Annex A will be released and reissued to, or at the proper direction of,
Grantee or Grantee’s legal representative pursuant to Section 9.

4. Rights as Shareholder. Except as provided in Section 6 and subject to
Section 16, Grantee will have all the rights and privileges of a shareholder
with respect to the Restricted Shares including, but not limited to, the right
to vote the Restricted Shares and the right to receive dividends thereon if and
when declared by the Board; provided, however, that all such rights and
privileges will cease immediately upon any forfeiture of such shares.

5. Capital Adjustments. Restricted Shares awarded hereunder shall, as issued and
outstanding shares of PNC common stock, be subject to such adjustment as may be
necessary to reflect corporate transactions, including, without limitation,
stock

 

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dividends, stock splits, spin-offs, split-offs, recapitalizations, mergers,
consolidations or reorganizations of or by PNC; provided, however, that any
shares received as distributions on or in exchange for Unvested Shares shall be
subject to the terms and conditions of the Agreement as if they were Restricted
Shares, and shall have the same Restricted Period and Performance Goal that are
applicable to the Restricted Shares that such shares were a distribution on or
for which such shares were exchanged.

6. Prohibitions Against Sale, Assignment, etc.; Payment to Legal Representative.

(a) Unvested Shares may not be sold, assigned, transferred, exchanged, pledged,
hypothecated or otherwise encumbered, other than as may be required pursuant to
Section 10.2, unless and until the Restricted Period terminates and the Awarded
Shares are released and reissued by PNC pursuant to Section 9.

(b) If Grantee is deceased at the time Restricted Shares become Awarded Shares,
PNC will deliver such shares to the executor or administrator of Grantee’s
estate or to Grantee’s other legal representative as determined in good faith by
the Committee.

(c) Any delivery of shares or other payment made in good faith by PNC to
Grantee’s executor, administrator or other legal representative shall extinguish
all right to payment hereunder.

7. Forfeiture; Death; Qualifying Disability Termination; Termination in
Anticipation of Change of Control.

7.1 Forfeiture on Termination of Employment. Except as otherwise provided in and
subject to the conditions of Section 7.3, Section 7.4(a), Section 7.5,
Section 7.6, or Section 8, if applicable, in the event that Grantee’s employment
with the Corporation terminates prior to the fifth (5th) anniversary of the
Grant Date, all Restricted Shares that are Unvested Shares on Grantee’s
Termination Date will be forfeited by Grantee to PNC without payment of any
consideration by PNC.

Upon forfeiture of Unvested Shares pursuant to the provisions of this
Section 7.1 or the provisions of Section 7.2 or Section 7.4(b), neither Grantee
nor any successors, heirs, assigns or legal representatives of Grantee will
thereafter have any further rights or interest in such Unvested Shares or any
certificate or certificates representing such Unvested Shares.

7.2 Forfeiture for Detrimental Conduct. Unvested Shares that would otherwise
remain outstanding after Grantee’s Termination Date, if any, will be forfeited
by Grantee to PNC without payment of any consideration by PNC in the event that,
at any time prior to the date such shares become Awarded Shares, PNC determines
that Grantee has engaged in Detrimental Conduct; provided, however, that:
(a) this Section 7.2 will not apply to Restricted Shares that remain outstanding
after Grantee’s Termination Date pursuant to Section 7.3 or Section 7.6, if any;
(b) no determination that

 

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Grantee has engaged in Detrimental Conduct may be made on or after the date of
Grantee’s death; (c) Detrimental Conduct will not apply to conduct by or
activities of successors to the Restricted Shares by will or the laws of descent
and distribution in the event of Grantee’s death; and (d) Detrimental Conduct
will cease to apply to any Restricted Shares upon a Change of Control.

If any criminal charges are brought against Grantee alleging the commission of a
felony that relates to or arises out of Grantee’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 vesting of the Restricted Shares, to the extent that the Restricted
Shares are still outstanding and have not yet become Awarded Shares, or to
require the escrow of the proceeds of the shares. Any such suspension or escrow
is subject to the following restrictions:

(i) It may last only until the earliest to occur of the following:

(A) resolution of the criminal proceedings in a manner that constitutes
Detrimental Conduct;

(B) resolution of the criminal proceeding in one of the following ways: (1) the
charges as they relate to such alleged felony have been dismissed (with or
without prejudice), (2) Grantee has been acquitted of such alleged felony, or
(3) 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

(C) termination of the suspension or escrow in the discretion of the Committee;
and

(ii) It may be imposed only if the Committee makes reasonable provision for the
retention or realization of the value of the Restricted Shares to Grantee as if
no suspension or escrow had been imposed upon any termination of the suspension
or escrow under clauses (i)(B) or (C) above.

7.3 Death. In the event of Grantee’s death while an employee of the Corporation
and prior to the fifth (5th) anniversary of the Grant Date, all remaining
applicable Continued Employment Performance Goals will be deemed to have been
achieved, and the Restricted Period or Periods with respect to all then
outstanding Unvested Shares, if any, will terminate on the date of Grantee’s
death.

The Restricted Shares which thereby become Awarded Shares will be released and
reissued by PNC to, or at the proper direction of, Grantee’s legal
representative pursuant to Section 9 as soon as administratively practicable
following such date.

 

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7.4 Qualifying Disability Termination.

(a) In the event Grantee’s employment with the Corporation is terminated prior
to the fifth (5 th) anniversary of the Grant Date by the Corporation by reason
of Grantee’s Disability, Unvested Shares will not be automatically forfeited on
Grantee’s Termination Date. Instead, Unvested Shares will, subject to the
forfeiture provisions of Section 7.2 and Section 7.4(b), remain outstanding
pending and subject to affirmative approval of the vesting of the Restricted
Shares pursuant to this Section 7.4(a) by the Designated Person specified in
Section A.13 of Annex A.

If such Unvested Shares are still outstanding but the Designated Person has not
made a specific determination to either approve or disapprove the vesting of the
Unvested Shares or relevant portion thereof by the day immediately preceding the
third (3rd) anniversary of the Grant Date in the case of First Tranche shares,
or the fourth (4th) or fifth (5th) anniversary of the Grant Date in the case of
Second or Third Tranche shares, respectively, then the Restricted Period
applicable to such shares will be automatically extended through the first to
occur of: (1) the day the Designated Person makes a specific determination
regarding such vesting; and (2) either (i) the ninetieth (90th) day following
the third (3rd) anniversary of the Grant Date in the case of First Tranche
shares, or the fourth (4th) or fifth (5th) anniversary of the Grant Date in the
case of Second or Third Tranche shares, respectively, if the Designated Person
is the Chief Human Resources Officer of PNC, or (ii) the 180th day following
such anniversary date if the Designated Person is the Committee or its delegate,
whichever is applicable; provided, however, if the Committee has acted to
suspend the vesting of the Restricted Shares pursuant to Section 7.2, the
Restricted Period will be extended until the terms of such suspension have been
satisfied.

If the vesting of the then outstanding Unvested Shares or relevant portion
thereof is affirmatively approved by the Designated Person on or prior to the
last day of the applicable Restricted Period for the respective Tranche of
shares, including any extension of such Restricted Period, if applicable, then
the applicable Continued Employment Performance Goal with respect to such
Tranche of shares will be deemed to have been achieved, and the Restricted
Period with respect to all Unvested Shares in such Tranche then outstanding, if
any, will terminate as of the end of the day on the date of such approval. The
Restricted Shares outstanding at the termination of such applicable Restricted
Period will become Awarded Shares and will be released and reissued by PNC
pursuant to Section 9.

(b) If the Designated Person disapproves the vesting of Unvested Shares that had
remained outstanding after Grantee’s Termination Date pending and subject to
affirmative approval of vesting, then all such Unvested Shares that are still
outstanding will be forfeited by Grantee to PNC on such disapproval date without
payment of any consideration by PNC.

 

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If by the end of the applicable Restricted Period, including any extension of
such Restricted Period pursuant to the second paragraph of Section 7.4(a), if
applicable, the Designated Person has neither affirmatively approved nor
specifically disapproved the vesting of Unvested Shares that had remained
outstanding after Grantee’s Termination Date pending and subject to affirmative
approval of vesting, then all such Unvested Shares that are still outstanding
will be forfeited by Grantee to PNC at the close of business on the last day of
the applicable Restricted Period without payment of any consideration by PNC.

7.5 Other Committee Authority. Prior to the third (3rd) anniversary of the Grant
Date in the case of the First Tranche shares, or the fourth (4th) or fifth
(5th) anniversary of the Grant Date in the case of the Second or Third Tranche
shares, respectively, the Committee or its delegate may in their sole
discretion, but need not, determine that, with respect to some or all of
Grantee’s then outstanding Unvested Shares, the applicable Continued Employment
Performance Goal(s) with respect to such Tranche or Tranches of shares will be
deemed to have been achieved and the Restricted Period with respect to some or
all of the Unvested Shares in such Tranche or Tranches then outstanding, if any,
will terminate, all subject to such restrictions, terms or conditions as the
Committee or its delegate may in their sole discretion determine.

7.6 Termination in Anticipation of a Change of Control. Notwithstanding anything
in the Agreement to the contrary, if Grantee’s employment with the Corporation
is terminated by the Corporation prior to the fifth (5th) anniversary of the
Grant Date and such termination is an Anticipatory Termination as defined in
Section A.2 of Annex A, then: (i) all remaining applicable Continued Employment
Performance Goals will be deemed to have been achieved and the Restricted Period
or Periods with respect to all then outstanding Unvested Shares, if any, will
terminate as of the end of the day on the day immediately preceding Grantee’s
Termination Date; and (ii) all Restricted Shares that thereby become Awarded
Shares will be released and reissued by PNC pursuant to Section 9 as soon as
administratively practicable following such date.

8. Change of Control. Notwithstanding anything in the Agreement to the contrary,
upon the occurrence of a Change of Control: (i) if Grantee is an employee of the
Corporation as of the day immediately preceding the Change of Control, all
remaining applicable Continued Employment Performance Goals will be deemed to
have been achieved and the Restricted Period or Periods with respect to all then
outstanding Unvested Shares, if any, will terminate as of the day immediately
preceding the Change of Control; (ii) if Grantee’s employment with the
Corporation terminated prior to the occurrence of the Change of Control but
Unvested Shares remained outstanding after such termination of employment
pursuant to Section 7.4 and are still outstanding pending and subject to
affirmative approval of the vesting of such shares by the Designated Person
specified in Section A.13 of Annex A, then with respect to all such Unvested
Shares outstanding as of the day immediately preceding the Change of Control,
such affirmative vesting approval will be deemed to have been given, the
applicable Continued Employment Performance Goal or Goals will be deemed to have
been achieved, and the applicable Restricted Period or Periods will terminate,
all as of the day immediately

 

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preceding the Change of Control; and (iii) all Restricted Shares that thereby
become Awarded Shares will be released and reissued by PNC pursuant to Section 9
as soon as administratively practicable following such date.

9. Termination of Prohibitions; Payment to Legal Representative. Except as
otherwise directed by the Committee pursuant to the suspension or escrow
provisions of Section 7.2, if and to the extent applicable, following
termination of the Restricted Period, PNC will release and issue or reissue the
then outstanding whole Restricted Shares that have become Awarded Shares without
the legend referred to in Section 3.

Upon release and issuance of shares that have become Awarded Shares in
accordance with this Section 9, PNC or its designee will deliver such whole
shares to, or at the proper direction of, Grantee or Grantee’s legal
representative.

Any delivery of shares or other payment made in good faith by PNC to Grantee’s
executor, administrator or other legal representative shall extinguish all right
to payment hereunder.

10. Payment of Taxes.

10.1 Internal Revenue Code Section 83(b) Election. In the event that Grantee
makes an Internal Revenue Code Section 83(b) election with respect to the
Restricted Shares, Grantee shall satisfy all then applicable federal, state or
local withholding tax obligations arising from that election (a) by payment of
cash or (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, by physical delivery to
PNC of certificates for whole shares of PNC common stock that are not subject to
any contractual restriction, pledge or other encumbrance and that have been
owned by Grantee for at least six (6) months and, in the case of restricted
stock, for which it has been at least six (6) months since the restrictions
lapsed, or by a combination of cash and such stock. Any such tax election shall
be made pursuant to a form to be provided to Grantee by PNC on request. For
purposes of this Section 10.1, shares of PNC common stock that are used to
satisfy applicable withholding tax obligations will be valued at their Fair
Market Value on the date the tax withholding obligation arises. Grantee will
provide to PNC a copy of any Internal Revenue Code Section 83(b) election filed
by Grantee with respect to the Restricted Shares not later than ten (10) days
after the filing of such election.

10.2 Other Tax Liabilities. Where Grantee has not previously satisfied all
applicable withholding tax obligations, PNC will, at the time the tax
withholding obligation arises with respect to any Restricted Shares, retain
sufficient whole shares of PNC common stock from the shares granted pursuant to
the Agreement to satisfy the minimum amount of taxes then required to be
withheld by the Corporation in connection with such shares. For purposes of this
Section 10.2, shares of PNC common stock retained to satisfy applicable
withholding tax requirements will be valued at their Fair Market Value on the
date the tax withholding obligation arises.

 

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PNC will not retain more than the number of shares sufficient to satisfy the
minimum amount of taxes then required to be withheld in connection with the
Restricted Shares. If Grantee desires to have an additional amount withheld
above the required minimum, up to Grantee’s W-4 obligation if higher, and if PNC
so permits, Grantee may elect to satisfy this additional withholding either:
(a) by payment of cash; or (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,
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 Grantee for at least six (6) months and, in the case of
restricted stock, for which it has been at least six (6) months since the
restrictions lapsed. Any such tax election shall be made pursuant to a form
provided by PNC. Shares of PNC common stock that are used for this purpose will
be valued at their Fair Market Value on the date the tax withholding obligation
arises. If Grantee’s W-4 obligation does not exceed the required minimum
withholding in connection with the Restricted Shares, no additional withholding
may be made.

11. Employment. Neither the granting and issuance of the Restricted Shares nor
any term or provision of the Agreement shall constitute or be evidence of any
understanding, expressed or implied, on the part of PNC or any subsidiary to
employ Grantee for any period or in any way alter Grantee’s status as an
employee at will.

12. Subject to the Plan and the Committee. In all respects the Grant and the
Agreement are subject to the terms and conditions of the Plan, which has been
made available to Grantee and is incorporated herein by reference; provided,
however, the terms of the Plan shall not be considered an enlargement of any
benefits under the Agreement. Further, the Grant and the Agreement are subject
to any interpretation of, and any rules and regulations issued by, the Committee
or its delegate or under the authority of the Committee, whether made or issued
before or after the Grant Date.

13. Headings; Entire Agreement. Headings used in the Agreement are provided for
reference and convenience only, shall not be considered part of the Agreement,
and shall not be employed in the construction of the Agreement. The Agreement
constitutes the entire agreement between Grantee and PNC and supersedes all
other discussions, negotiations, correspondence, representations, understandings
and agreements between the parties with respect to the subject matter hereof.

14. Grantee Covenants.

14.1 General. Grantee and PNC acknowledge and agree that Grantee has received
adequate consideration with respect to enforcement of the provisions of
Sections 14 and 15 by virtue of receiving this grant of Restricted Shares
(regardless of whether such shares ultimately become Awarded Shares); 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 Grantee from earning a living.

 

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14.2 Non-Solicitation; No-Hire. Grantee agrees to comply with the provisions of
subsections (a) and (b) of this Section 14.2 while employed by the Corporation
and for a period of one year after Grantee’s Termination Date regardless of the
reason for such termination of employment.

(a) Non-Solicitation. Grantee shall not, directly or indirectly, either for
Grantee’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 Grantee 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. Grantee shall not, directly or indirectly, either for Grantee’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
Grantee assist any other Person in such activities.

Notwithstanding the above, if Grantee’s employment with the Corporation is
terminated by the Corporation and such termination is an Anticipatory
Termination, then commencing immediately after such Termination Date, the
provisions of subsections (a) and (b) of this Section 14.2 will no longer apply
and will be replaced with the following subsection (c):

(c) No-Hire. Grantee agrees that Grantee shall not, for a period of one year
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.

14.3 Confidentiality. During Grantee’s employment with the Corporation, and
thereafter regardless of the reason for termination of such employment, Grantee
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 Grantee, 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.

14.4 Ownership of Inventions. Grantee shall promptly and fully disclose to PNC
any and all inventions, discoveries, improvements, ideas or other works of

 

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inventorship or authorship, whether or not patentable, that have been or will be
conceived and/or reduced to practice by Grantee during the term of Grantee’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”). Grantee
agrees to assign and hereby does assign to PNC or its designee all of Grantee’s
right, title and interest, including copyrights and patent rights, in and to all
Developments. Grantee 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 14.4
shall be performed by Grantee without further compensation and will continue
beyond the Termination Date.

15. Enforcement Provisions. Grantee understands and agrees to the following
provisions regarding enforcement of the Agreement.

15.1 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, Grantee
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.

15.2 Equitable Remedies. A breach of the provisions of any of Sections 14.2,
14.3 or 14.4 will cause the Corporation irreparable harm, and the Corporation
will therefore be entitled to issuance of immediate, as well as permanent,
injunctive relief restraining Grantee, and each and every person and entity
acting in concert or participating with Grantee, from initiation and/or
continuation of such breach.

15.3 Tolling Period. If it becomes necessary or desirable for the Corporation to
seek compliance with the provisions of Section 14.2 by legal proceedings, the
period during which Grantee 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.

15.4 No Waiver. Failure of PNC to demand strict compliance with any of the
terms, covenants or conditions of the Agreement will not be deemed a waiver of
such term, covenant or condition, nor will 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.

15.5 Severability. The restrictions and obligations imposed by Sections 14.2,
14.3 and 14.4 are separate and severable, and it is the intent of Grantee and
PNC that if

 

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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 will remain valid and binding
upon Grantee.

15.6 Reform. In the event any of Sections 14.2, 14.3 and 14.4 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 Grantee and PNC that said court reduce and reform the provisions
thereof so as to apply the greatest limitations considered enforceable by the
court.

15.7 Waiver of Jury Trial. Each of Grantee 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 14.2, 14.3 and 14.4.

15.8 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 Grantee, Grantee agrees to reimburse PNC for
any amounts Grantee may be required to reimburse PNC or its subsidiaries
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 Grantee reimburse PNC or its
subsidiaries for such amounts pursuant to Section 304 of the Sarbanes-Oxley Act
of 2002.

15.9. Compliance with Internal Revenue Code Section 409A. It is the intention of
the parties that the Grant 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,
Grantee agrees that PNC may, without the consent of Grantee, modify the
Agreement and the Grant 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.

16. Acceptance of Grant; PNC Right to Cancel. If Grantee does not accept the
Grant by executing and delivering a copy of the Agreement to PNC, without
altering or changing the terms thereof in any way, within thirty (30) days of
receipt by Grantee of a copy of the Agreement, PNC may, in its sole discretion,
withdraw its offer and cancel the Grant at any time prior to Grantee’s delivery
to PNC of a copy of the Agreement executed by Grantee. Otherwise, upon execution
and delivery of the Agreement by both PNC and Grantee, the Agreement is
effective.

 

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Grantee will not have any of the rights of a shareholder with respect to the
Restricted Shares as set forth in Section 4, and will not have the right to vote
or to receive dividends on such shares, until the date the Agreement is
effective and the Restricted Shares are issued in accordance with this
Section 16.

In the event that one or more record dates for dividends on PNC common stock
occur after the Grant Date but before the date the Agreement is effective in
accordance with this Section 16 and the Restricted Shares are issued, then upon
the effectiveness of the Agreement, the Corporation will make a cash payment to
Grantee equivalent to the amount of the dividends Grantee would have received
had the Agreement been effective and the Restricted Shares had been issued on
the Grant Date. Any such amount will be payable in accordance with applicable
regular payroll practice as in effect from time to time for similarly situated
employees.

IN WITNESS WHEREOF, PNC has caused the Agreement to be signed on its behalf as
of the Grant Date.

 

THE PNC FINANCIAL SERVICES GROUP, INC.

By:

 

Chairman and Chief Executive Officer

ATTEST:

By:

 

Corporate Secretary

ACCEPTED AND AGREED TO by GRANTEE

 

Grantee

 

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ANNEX A

CERTAIN DEFINITIONS

*    *    *

A.1 “Agreement” means the Restricted Stock Agreement between PNC and Grantee
evidencing the Grant of the Restricted Shares Award to Grantee pursuant to the
Plan.

A.2 “Anticipatory Termination.” If Grantee’s employment with the Corporation is
terminated by the Corporation other than for Cause, death or Disability prior to
the date on which a Change of Control occurs, and if it is reasonably
demonstrated by Grantee that such termination of employment (i) was at the
request of a third party that has taken steps reasonably calculated to effect a
Change of Control or (ii) otherwise arose in connection with or anticipation of
a Change of Control, such a termination of employment is an “Anticipatory
Termination.”

For purposes of this definition, “Cause” shall mean:

(a) the willful and continued failure of Grantee to substantially perform
Grantee’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 Grantee by the Board or the CEO which
specifically identifies the manner in which the Board or the CEO believes that
Grantee has not substantially performed Grantee’s duties; or

(b) the willful engaging by Grantee 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 (a) and (b), no act or failure to act, on
the part of Grantee, shall be considered willful unless it is done, or omitted
to be done, by Grantee in bad faith and without reasonable belief that Grantee’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 Grantee’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 Grantee in good faith and in the best interests of the Corporation.

The cessation of employment of Grantee will be deemed to be a termination of
Grantee’s employment with the Corporation for Cause for purposes of the
Agreement only if and when there shall have been delivered to Grantee, as part
of the notice of Grantee’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, Grantee is guilty of

 

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conduct described in clause (a) or clause (b) above and, in either case,
specifying the particulars thereof in detail. Such resolution shall be adopted
only after (i) reasonable notice of such Board meeting is provided to Grantee,
together with written notice that PNC believes that Grantee is guilty of conduct
described in clause (a) or clause (b) above and, in either case, specifying the
particulars thereof in detail, and (ii) Grantee is given an opportunity,
together with counsel, to be heard before the Board.

A.3 “Awarded Shares.” Provided that the Restricted Shares are then outstanding,
Restricted Shares become “Awarded Shares” when all of the following have
occurred: (a) the Continued Employment Performance Goal or Goals applicable to
such Restricted Shares have been achieved or are deemed to have been achieved
pursuant to the terms of the Agreement; (b) the Restricted Period or Periods
applicable to such Restricted Shares have terminated; and (c) if the Committee
has acted to suspend the vesting of the Restricted Shares pursuant to
Section 7.2 of the Agreement, the terms of such suspension have been satisfied
and the Restricted Shares have not been forfeited.

A.4 “Board” means the Board of Directors of PNC.

A.5 “Cause.” Except as otherwise provided in Section A.2, “Cause” means:

(a) the willful and continued failure of Grantee to substantially perform
Grantee’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 Grantee by PNC that specifically
identifies the manner in which it is believed that Grantee has not substantially
performed Grantee’s duties;

(b) a material breach by Grantee 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;

(c) any act of fraud, misappropriation, material dishonesty, or embezzlement by
Grantee against PNC or one of its subsidiaries or any client or customer of PNC
or a subsidiary;

(d) any conviction (including a plea of guilty or of nolo contendere) of Grantee
for, or entry by Grantee into a pre-trial disposition with respect to, the
commission of a felony; or

(e) entry of any order against Grantee, 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 Grantee’s employment or other
service relationship with the Corporation.

Except as otherwise provided in Section A.2, the cessation of employment of
Grantee will be deemed to have been a termination of Grantee’s employment with
the Corporation for Cause for purposes of the Agreement only if and when the CEO
or his or

 

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her designee (or, if Grantee is the CEO, the Board) determines that Grantee is
guilty of conduct described in clause (a), (b) or (c) above or that an event
described in clause (d) or (e) above has occurred with respect to Grantee and,
if so, determines that the termination of Grantee’s employment with the
Corporation will be deemed to have been for Cause.

A.6 “CEO” means the chief executive officer of PNC.

A.7 “Change of Control” means:

(a) Any individual, entity or group (within the meaning of Section 13(d)(3) or
14(d)(2) of the Securities Exchange Act of 1934, as amended (the “Exchange
Act”)) (a “Person”) becomes the beneficial owner (within the meaning of Rule
13d-3 promulgated under the Exchange Act) of 20% or more of either (A) the
then-outstanding shares of common stock of PNC (the “Outstanding PNC Common
Stock”) or (B) the combined voting power of the then-outstanding voting
securities of PNC entitled to vote generally in the election of directors (the
“Outstanding PNC Voting Securities”); provided, however, that, for purposes of
this Section A.7(a), the following acquisitions shall not constitute a Change of
Control: (1) any acquisition directly from PNC, (2) any acquisition by PNC,
(3) any acquisition by any employee benefit plan (or related trust) sponsored or
maintained by PNC or any company controlled by, controlling or under common
control with PNC (an “Affiliated Company”), (4) any acquisition pursuant to an
Excluded Combination (as defined in Section A.7(c)) or (5) an acquisition of
beneficial ownership representing between 20% and 40%, inclusive, of the
Outstanding PNC Voting Securities or Outstanding PNC Common Stock shall not be
considered a Change of Control if the Incumbent Board as of immediately prior to
any such acquisition approves such acquisition either prior to or immediately
after its occurrence;

(b) Individuals who, as of the date hereof, constitute the Board (the “Incumbent
Board”) cease for any reason to constitute at least a majority of the Board
(excluding any Board seat that is vacant or otherwise unoccupied); provided,
however, that any individual becoming a director subsequent to the date hereof
whose election, or nomination for election by PNC’s shareholders, was approved
by a vote of at least two-thirds of the directors then comprising the Incumbent
Board shall be considered as though such individual was a member of the
Incumbent Board, but excluding, for this purpose, any such individual whose
initial assumption of office occurs as a result of an actual or threatened
election contest with respect to the election or removal of directors or other
actual or threatened solicitation of proxies or consents by or on behalf of a
Person other than the Board;

(c) Consummation of a reorganization, merger, statutory share exchange or
consolidation or similar transaction involving PNC or any of its subsidiaries, a
sale or other disposition of all or substantially all of the assets of PNC, or
the acquisition of assets or stock of another entity by PNC or any of its
subsidiaries (each, a “Business Combination”), excluding, however, a Business
Combination following which all or substantially all of the individuals and
entities that were the beneficial owners of the Outstanding PNC Common Stock and
the Outstanding PNC Voting Securities

 

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immediately prior to such Business Combination beneficially own, directly or
indirectly, more than 60% of the then-outstanding shares of common stock (or,
for a non-corporate entity, equivalent securities) and the combined voting power
of the then-outstanding voting securities entitled to vote generally in the
election of directors (or, for a non-corporate entity, equivalent governing
body), as the case may be, of the entity resulting from such Business
Combination (including, without limitation, an entity that, as a result of such
transaction, owns PNC or all or substantially all of PNC’s assets either
directly or through one or more subsidiaries) in substantially the same
proportions as their ownership immediately prior to such Business Combination of
the Outstanding PNC Common Stock and the Outstanding PNC Voting Securities, as
the case may be (such a Business Combination, an “Excluded Combination”); or

(d) Approval by the shareholders of PNC of a complete liquidation or dissolution
of PNC.

A.8 “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.9 “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 (a) engaged in business activities similar to some or
all of the business activities of PNC or any subsidiary as of Grantee’s
Termination Date or (b) engaged in business activities which Grantee knows PNC
or any subsidiary intends to enter within the first twelve (12) months after
Grantee’s Termination Date or, if later and if applicable, after the date
specified in clause (ii) of Section A.14(a), in either case whether Grantee 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 “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.11 “Continued Employment Performance Goal” means: (a) with respect to shares
in the First Tranche of Restricted Shares, the Three-Year Continued Employment
Performance Goal; (b) with respect to shares in the Second Tranche of Restricted
Shares, the Four-Year Continued Employment Performance Goal; and (c) with
respect to shares in the Third Tranche of Restricted Shares, the Five-Year
Continued Employment Performance Goal, as applicable.

A.12 “Corporation” means PNC and its Consolidated Subsidiaries.

 

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A.13 “Designated Person” will be either: (a) the Committee or its delegate, if
Grantee was a member of the Corporate Executive Group (or equivalent successor
classification) or was subject to the reporting requirements of Section 16(a) of
the Exchange Act with respect to PNC securities when he or she ceased to be an
employee of the Corporation; or (b) the Chief Human Resources Officer of PNC, if
Grantee is not within one of the groups specified in Section A.13(a).

A.14 “Detrimental Conduct” means, for purposes of the Agreement:

(a) Grantee 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 Grantee’s
Termination Date and extending through (and including) the first
(1st) anniversary of the later of (i) Grantee’s Termination Date and, if
different, (ii) the first date after Grantee’s Termination Date as of which
Grantee ceases to be engaged by the Corporation in any capacity for which
Grantee 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 Grantee 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 Grantee
for, or any entry by Grantee into a pre-trial disposition with respect to, the
commission of a felony that relates to or arises out of Grantee’s employment or
other service relationship with the Corporation.

Grantee will be deemed to have engaged in Detrimental Conduct for purposes of
the Agreement only if and when the Committee (if Grantee 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 Grantee was not such an executive
officer), whichever is applicable, determines that Grantee 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 Grantee, and, if so, determines
that Grantee will be deemed to have engaged in Detrimental Conduct.

A.15 “Disabled” or “Disability” means, except as may otherwise be required by
Section 409A of the Internal Revenue Code, that Grantee either (i) is unable to
engage in any substantial gainful activity by reason of any medically
determinable physical or mental impairment that can be expected to result in
death or can be expected to last for a continuous period of not less than 12
months, or (ii) is, by reason of any medically determinable physical or mental
impairment that can be expected to result in death or can be expected to last
for a continuous period of not less than 12 months, receiving (and has received
for at least three months) income replacement benefits under any
Corporation-sponsored disability benefit plan. If Grantee has been determined to
be eligible for Social Security disability benefits, Grantee shall be presumed
to be Disabled as defined herein.

 

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A.16 “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.17 “Five-Year Continued Employment Performance Goal” means, subject to early
achievement if so determined by the Committee or its delegate or to deemed
achievement pursuant to Section 7.3, Section 7.4, Section 7.6, or Section 8 of
the Agreement, if applicable, that Grantee has been continuously employed by the
Corporation for the period from the Grant Date through (and including) the day
immediately preceding the first of the following to occur: (a) the fifth
(5th) anniversary of the Grant Date; (b) the date of Grantee’s death; and
(c) the day a Change of Control is deemed to have occurred.

A.18 “Four-Year Continued Employment Performance Goal” means, subject to early
achievement if so determined by the Committee or its delegate or to deemed
achievement pursuant to Section 7.3, Section 7.4, Section 7.6, or Section 8 of
the Agreement, if applicable, that Grantee has been continuously employed by the
Corporation for the period from the Grant Date through (and including) the day
immediately preceding the first of the following to occur: (a) the fourth
(4th) anniversary of the Grant Date; (b) the date of Grantee’s death; and
(c) the day a Change of Control is deemed to have occurred.

A.19 “GAAP” or “generally accepted accounting principles” means accounting
principles generally accepted in the United States of America.

A.20 “Grant” means the Restricted Shares Award granted to Grantee pursuant to
Section 2 of the Agreement and pursuant to which the Restricted Shares are
issued to Grantee subject to the restrictions set forth in and the terms and
conditions of the Agreement and the Plan.

A.21 “Grant Date” means the Grant Date set forth on page 1 of the Agreement and
is the date as of which the Restricted Shares Award is authorized to be granted
by the Committee or its delegate in accordance with the Plan.

A.22 “Grantee” means the person to whom the Restricted Stock Award is granted
and the Restricted Shares are issued, and is identified as Grantee on page 1 of
the Agreement.

A.23 “Internal Revenue Code” means the Internal Revenue Code of 1986 as amended,
and the rules and regulations promulgated thereunder.

 

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A.24 “PNC” means The PNC Financial Services Group, Inc.

A.25 “Restricted Period.” The applicable Restricted Period for Restricted Shares
means, subject to early termination if so determined by the Committee or its
delegate or pursuant to Section 7.6 of the Agreement, if applicable, the period
set forth in the applicable subsection below:

(a) For First Tranche Shares: with respect to shares in the First Tranche of
Restricted Shares, the period from the Grant Date through (and including) the
earlier of: (i) the date of Grantee’s death; (ii) the day immediately preceding
the day a Change of Control is deemed to have occurred; and (iii) the day
immediately preceding the third (3rd) anniversary of the Grant Date or, if
later, the last day of any extension of the Restricted Period pursuant to
Section 7.4(a) of the Agreement, if applicable;

(b) For Second Tranche Shares: with respect to shares in the Second Tranche of
Restricted Shares, the period from the Grant Date through (and including) the
earlier of: (i) the date of Grantee’s death; (ii) the day immediately preceding
the day a Change of Control is deemed to have occurred; and (iii) the day
immediately preceding the fourth (4th) anniversary of the Grant Date or, if
later, the last day of any extension of the Restricted Period pursuant to
Section 7.4(a) of the Agreement, if applicable; and

(c) For Third Tranche Shares: with respect to shares in the Third Tranche of
Restricted Shares, the period from the Grant Date through (and including) the
earlier of: (i) the date of Grantee’s death; (ii) the day immediately preceding
the day a Change of Control is deemed to have occurred; and (iii) the day
immediately preceding the fifth (5th) anniversary of the Grant Date or, if
later, the last day of any extension of the Restricted Period pursuant to
Section 7.4(a) of the Agreement, if applicable.

A.26 “SEC” means the United States Securities and Exchange Commission.

A.27 “Termination Date” means Grantee’s last date of employment with the
Corporation. If Grantee 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 Grantee does not continue to be
employed by PNC or a Consolidated Subsidiary, then for purposes of the
Agreement, Grantee’s employment with the Corporation terminates effective at the
time this occurs.

A.28 “Three-Year Continued Employment Performance Goal” means, subject to early
achievement if so determined by the Committee or its delegate or to deemed
achievement pursuant to Section 7.3, Section 7.4, Section 7.6, or Section 8 of
the Agreement, if applicable, that Grantee has been continuously employed by the
Corporation for the period from the Grant Date through (and including) the day
immediately preceding the first of the following to occur: (a) the third
(3rd) anniversary of the Grant Date; (b) the date of Grantee’s death; and
(c) the day a Change of Control is deemed to have occurred.

 

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A.29 “Tranche(s)” or “First, Second or Third Tranche” have the meanings set
forth in Section 2 of the Agreement.

A.30 “Unvested Shares” means any Restricted Shares that are not Awarded Shares.

 

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THE PNC FINANCIAL SERVICES GROUP, INC.

2006 INCENTIVE AWARD PLAN

*    *    *

STOCK-PAYABLE RESTRICTED SHARE UNITS AGREEMENT

*    *    *

 

GRANTEE:    [Name] GRANT DATE:                        , 20    

SHARE UNITS:

   [Number]

 

 

1. Definitions. Certain terms used in this Stock-Payable Restricted Share Units
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 Share Units with Dividend Equivalents. 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 grants to the Grantee
named above (“Grantee”) an award of Restricted Share Units (“Restricted Share
Units”) of the number of share units of PNC common stock set forth above,
together with Dividend Equivalents (“Dividend Equivalents”) with respect to the
same number of shares of PNC common stock as the number of share units set forth
above (together, the “Award”), all subject to acceptance of the Award by Grantee
in accordance with Section 16 and subject to the terms and conditions of the
Agreement and the Plan.

3. Terms of Award. The Award is subject to the following terms and conditions.

Restricted Share Units and Dividend Equivalents are not transferable. The
Restricted Share Units and ongoing Dividend Equivalents are subject to
forfeiture pursuant to the terms and conditions of the Agreement prior to
vesting; provided, however, that there shall be no forfeiture of Dividend
Equivalents with respect to dividend payment dates that occur prior to a
forfeiture of the Restricted Share Units to which they relate.

Restricted Share Units that vest in accordance with the terms of Section 6 will
be settled pursuant to and in accordance with the terms of that Section.
Unvested Share Units that are forfeited by Grantee pursuant to and in accordance
with the terms of Section 5 will be cancelled without payment of any
consideration by PNC.

 

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The right to ongoing Dividend Equivalents is granted in connection with the
Restricted Share Units and therefore shall terminate, without payment of any
consideration by PNC, upon the settlement of Vested Share Units or the
cancellation of Unvested Share Units, whichever is applicable.

4. Dividend Equivalents. From and after the Grant Date until such time as the
Restricted Share Units granted in connection with such Dividend Equivalents are
either (i) settled pursuant to and in accordance with the terms of Section 6 or
(ii) cancelled upon forfeiture in accordance with the terms of Section 5, the
Corporation will make cash payments to Grantee equivalent to the amounts of the
quarterly cash dividends Grantee would have received, if any, had the Restricted
Share Units to which such Dividend Equivalents relate been shares of PNC common
stock issued and outstanding on the record dates for cash dividends on PNC
common stock that occur during such period.

The Corporation will make such payments to Grantee pursuant to this Section 4
each quarter following the dividend payment date that relates to each such
record date, if any. Such amounts shall be paid in cash in accordance with
applicable regular payroll practice as in effect from time to time for similarly
situated employees within 30 days after the applicable dividend payment date.

Termination or cancellation of Dividend Equivalents will have no effect on cash
payments made pursuant to this Section 4 prior to such termination or
cancellation.

If the right to ongoing Dividend Equivalents terminates because the Restricted
Share Units to which they relate have been settled pursuant to and in accordance
with the terms of Section 6 and such termination occurs after the dividend
record date for a quarter but before the related dividend payment date, the
Corporation will nonetheless make such a quarterly dividend equivalent payment
to Grantee with respect to that record date, if any.

5. Forfeiture Events.

5.1 Termination for Cause. In the event that Grantee’s employment with the
Corporation is terminated by the Corporation for Cause prior to the 5th
anniversary of the Grant Date, all Restricted Share Units that are Unvested
Share Units on Grantee’s Termination Date, together with the right to Dividend
Equivalents granted in connection with such Restricted Share Units, will be
forfeited by Grantee to PNC and cancelled without payment of any consideration
by PNC; provided, however, this Section 5.1 shall only apply if the Termination
Date occurs prior to the occurrence of a Change of Control, if any.

 

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5.2 Termination Prior to 3rd Anniversary of Grant Date Other than for Death or
Disability. In the event that Grantee’s employment with the Corporation
terminates prior to the 3rd anniversary of the Grant Date for any reason other
than (i) Grantee’s death or (ii) termination of Grantee’s employment by the
Corporation by reason of Grantee’s Disability, all Restricted Share Units that
are Unvested Share Units on Grantee’s Termination Date, together with the right
to Dividend Equivalents granted in connection with such Restricted Share Units,
will be forfeited by Grantee to PNC and cancelled without payment of any
consideration by PNC; provided, however, this Section 5.2 shall only apply if
the Termination Date occurs prior to the occurrence of a Change of Control, if
any[, and provided, further, that this Section 5.2 shall not apply if the
Termination Date occurs after the date on which James E. Rohr ceases to be the
CEO].

5.3 Detrimental Conduct. Unvested Share Units that would otherwise remain
outstanding after Grantee’s Termination Date, if any, together with the right to
Dividend Equivalents granted in connection with such Restricted Share Units,
will be forfeited by Grantee to PNC and cancelled without payment of any
consideration by PNC in the event that, at any time prior to the date such units
vest in accordance with Section 6, PNC, by PNC’s Designated Person, determines
in its sole discretion that Grantee has engaged in Detrimental Conduct;
provided, however, that no determination that Grantee has engaged in Detrimental
Conduct may be made on or after the date of Grantee’s death or on or after the
date of a Change of Control.

5.4 Judicial Criminal Proceedings. If any criminal charges are brought against
Grantee alleging the commission of a felony that relates to or arises out of
Grantee’s employment or other service relationship with the Corporation in an
indictment or in other analogous formal charges commencing judicial criminal
proceedings, then to the extent that the Restricted Share Units are still
outstanding and have not yet vested, the vesting of the Unvested Share Units
shall be automatically suspended.

Such suspension of vesting shall continue until the earliest to occur of the
following:

(1) resolution of the criminal proceedings in a manner that results in a
conviction (including a plea of guilty or of nolo contendere) of Grantee for, or
any entry by Grantee into a pre-trial disposition with respect to, the
commission of a felony that relates to or arises out of Grantee’s employment or
other service relationship with the Corporation;

(2) resolution of the criminal proceedings in one of the following ways: (i) the
charges as they relate to such alleged felony have been dismissed (with or
without prejudice); (ii) Grantee has been acquitted of such alleged felony; or
(iii) 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;

 

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(3) Grantee’s death; or

(4) the occurrence of a Change of Control.

If the suspension is terminated by the occurrence of an event set forth in
clause (1) above, the Restricted Share Units, together with all Dividend
Equivalents granted in connection with such Restricted Share Units, will, upon
such occurrence, be automatically forfeited by Grantee to PNC and cancelled
without payment of any consideration by PNC.

If the suspension is terminated by the occurrence of an event set forth in
clause (2), (3) or (4) above, vesting and settlement shall proceed in accordance
with Section 6, as applicable.

5.5 Termination of Award Upon Forfeiture of Units. The Award will terminate, and
neither Grantee nor any successors, heirs, assigns or legal representatives of
Grantee will thereafter have any further rights or interest in the Restricted
Share Units or the related right to Dividend Equivalents evidenced by the
Agreement, upon forfeiture and cancellation pursuant to the provisions of
Section 5 of such Restricted Share Units and related right to Dividend
Equivalents.

6. Vesting; Settlement of Vested Share Units.

6.1 Vesting. For the purpose of determining the vesting date applicable to each
portion of the Award, the Restricted Share Units are divided into three
“Tranches” as follows: (1) 25% of the share units (rounded down to the nearest
whole share unit) are in the First Tranche of the Restricted Share Units;
(2) another 25% of the share units (rounded down to the nearest whole share
unit) are in the Second Tranche of the Restricted Share Units; and (3) the
remaining 50% of the share units are in the Third Tranche of the Restricted
Share Units.

Unless Unvested Share Units have been forfeited pursuant to the provisions of
Section 5, Grantee’s Unvested Share Units will vest upon the earliest to occur
of the following:

 

 

(i)

the 3rd anniversary of the Grant Date in the case of the First Tranche share
units, the 4th anniversary of the Grant Date in the case of the Second Tranche
share units, and the 5th anniversary of the Grant Date in the case of the Third
Tranche share units, respectively, or, if later, on the date as of which any
suspension imposed pursuant to Section 5.4 is lifted and the units vest, as
applicable;

 

  (ii) Grantee’s death; and

 

  (iii) the occurrence of a Change of Control.

 

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6.2 Settlement. Vested Share Units will be settled at the time set forth in this
Section 6.2 by delivery to Grantee of that number of whole shares of PNC common
stock equal to the number of Vested Share Units being settled or as otherwise
provided in Section 8 if applicable. No fractional shares will be issued, and if
the Vested Share Units include a fractional interest, such fractional interest
will be liquidated on the basis of the then current Fair Market Value of PNC
common stock, or as otherwise provided in Section 8 if applicable, and paid to
Grantee in cash at the time the shares are issued.

Payment will be made to Grantee with respect to the settlement of Vested Share
Units as soon as practicable, but in no event later than 30 days, following the
settlement date, which shall be the earliest to occur of the following:

 

 

(i)

the 3rd , 4th , or 5th anniversary of the Grant Date, as the case may be, with
respect to the First, Second or Third Tranche of the Restricted Share Units, as
applicable, or, if later, the date as of which any suspension imposed pursuant
to Section 5.4 is lifted and the units vest, as applicable;

 

  (ii) the date of Grantee’s death; and

 

  (iii) the occurrence of a Change of Control, but only if such Change of
Control is a permissible payment event under Section 409A of the Internal
Revenue Code and any regulations, revenue procedures or revenue rulings issued
by the Secretary of the United States Treasury applicable to such Section 409A.

In the event that the settlement date is the date as of which any suspension
imposed pursuant to Section 5.4 is lifted, payment will be made no later than
the earlier of (a) 30 days after the settlement date and (b) December 31 of the
year in which the settlement date occurs.

7. No Rights as Shareholder Until Issuance of Shares. Grantee will have no
rights as a shareholder of PNC by virtue of this Award unless and until shares
are issued and delivered in settlement of vested Restricted Share Units pursuant
to Section 6.

8. Capital Adjustments.

8.1 Except as otherwise provided in Section 8.2, if applicable, upon the
occurrence of a corporate transaction or transaction (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 Compensation Committee or its delegate
shall make those adjustments, if any, in the number, class or kind of Restricted
Share Units and related Dividend Equivalents then outstanding under the Award
that it deems appropriate in its discretion to reflect the Corporate
Transaction(s) such that the rights of Grantee are neither enlarged nor
diminished as a result of such Corporate Transaction or Transactions, including
without limitation (a) measuring the value per share unit by reference to the
per share value of the

 

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consideration payable to a PNC common shareholder in connection with such
Corporate Transaction and (b) authorizing payment of all of the Vested Share
Units that are settled pursuant to Section 6 solely in cash at the applicable
time specified by Section 6.

All determinations hereunder shall be made by the Compensation Committee or its
delegate in its sole discretion and shall be final, binding and conclusive for
all purposes on all parties, including without limitation Grantee.

8.2 Upon the occurrence of a Change of Control, (a) the number, class and kind
of Restricted Share Units and related Dividend Equivalents then outstanding
under the Award will automatically be adjusted to reflect the same changes as
are made to outstanding shares of PNC common stock generally, (b) the value per
share unit will be measured by reference to the per share value of the
consideration payable to a PNC common shareholder in connection with such Change
of Control transaction, and (c) if the effect of the Change of Control
transaction on a PNC common shareholder is to convert that shareholder’s
holdings into consideration that does not consist solely (other than as to a
minimal amount) of shares of PNC common stock, then payment in settlement of all
of the Vested Share Units will be made solely in cash at the applicable time
specified by Section 6.

9. Prohibitions Against Sale, Assignment, etc.; Payment to Legal Representative.

(a) Restricted Share Units and Dividend Equivalents may not be sold, assigned,
transferred, exchanged, pledged, hypothecated or otherwise encumbered.

(b) If Grantee is deceased at the time vested Restricted Share Units are settled
in accordance with the terms of Section 6, such delivery of shares or other
payment will be made to the executor or administrator of Grantee’s estate or to
Grantee’s other legal representative as determined in good faith by PNC.

(c) Any delivery of shares or other payment made in good faith by PNC to
Grantee’s executor, administrator or other legal representative shall extinguish
all right to payment hereunder.

10. Withholding Taxes. Where Grantee has not previously satisfied all applicable
withholding tax obligations, PNC will, at the time the tax withholding
obligation arises in connection herewith, retain an amount sufficient to satisfy
the minimum amount of taxes then required to be withheld by the Corporation in
connection therewith from any amounts then payable to Grantee. To the extent
that any payment hereunder is settled in cash, PNC will withhold first from such
cash portion of the payment and, if that is not sufficient or if there is no
such cash portion, PNC will then retain whole shares of PNC common stock from
amounts payable to Grantee hereunder in the form of shares, until such
withholdings in the aggregate are sufficient to satisfy such minimum required
withholding obligations. If any withholding is required prior to the time
amounts are payable to Grantee hereunder, the withholding will be taken from
other compensation then payable to Grantee or as otherwise determined by PNC.

 

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For purposes of this Section 10, shares of PNC common stock retained to satisfy
applicable withholding tax requirements will be valued at their Fair Market
Value on the date the tax withholding obligation arises.

PNC will not retain more than the number of shares sufficient to satisfy the
minimum amount of taxes then required to be withheld in connection herewith
after any cash portion of the amounts payable hereunder has already been
withheld for such purpose. If Grantee desires to have an additional amount
withheld above the required minimum, up to Grantee’s W-4 obligation if higher,
and if PNC so permits, Grantee may elect to satisfy this additional withholding
by payment of cash. If Grantee’s W-4 obligation does not exceed the required
minimum withholding in connection herewith, no additional withholding may be
made.

11. Employment. Neither the granting of the Restricted Share Units and Dividend
Equivalents nor any term or provision of the Agreement shall constitute or be
evidence of any understanding, expressed or implied, on the part of PNC or any
subsidiary to employ Grantee for any period or in any way alter Grantee’s status
as an employee at will.

12. Subject to the Plan and the Compensation Committee. In all respects the
Award and the Agreement are subject to the terms and conditions of the Plan,
which has been made available to Grantee and is incorporated herein by
reference; provided, however, the terms of the Plan shall not be considered an
enlargement of any benefits under the Agreement. Further, the Award and the
Agreement are subject to any interpretation of, and any rules and regulations
issued by, the Compensation Committee or its delegate or under the authority of
the Compensation Committee, whether made or issued before or after the Grant
Date.

13. Headings; Entire Agreement. Headings used in the Agreement are provided for
reference and convenience only, shall not be considered part of the Agreement,
and shall not be employed in the construction of the Agreement. The Agreement
constitutes the entire agreement between Grantee and PNC with respect to the
subject matters addressed herein, and supersedes all other discussions,
negotiations, correspondence, representations, understandings and agreements
between the parties concerning the subject matters hereof.

14. Grantee Covenants.

14.1 General. Grantee and PNC acknowledge and agree that Grantee has received
adequate consideration with respect to enforcement of the provisions of
Sections 14 and 15 by virtue of receiving this Restricted Share Units and
Dividend Equivalents award (regardless of whether such share units ultimately
vest and settle); 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 Grantee from earning a living.

 

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14.2 Non-Solicitation; No-Hire. Grantee agrees to comply with the provisions of
subsections (a) and (b) of this Section 14.2 while employed by the Corporation
and for a period of twelve (12) months after Grantee’s Termination Date
regardless of the reason for such termination of employment.

(a) Non-Solicitation. Grantee shall not, directly or indirectly, either for
Grantee’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 Grantee 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. Grantee shall not, directly or indirectly, either for Grantee’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
Grantee assist any other Person in such activities.

14.3 Confidentiality. During Grantee’s employment with the Corporation, and
thereafter regardless of the reason for termination of such employment, Grantee
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 Grantee, 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.

14.4 Ownership of Inventions. Grantee 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 Grantee during the term of Grantee’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”). Grantee
agrees to assign and hereby does assign to PNC or its designee all of Grantee’s
right, title and interest, including copyrights and patent rights, in and to all
Developments. Grantee 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 14.4
shall be performed by Grantee without further compensation and will continue
beyond the Termination Date.

 

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15. Enforcement Provisions. Grantee understands and agrees to the following
provisions regarding enforcement of the Agreement.

15.1 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, Grantee
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.

15.2 Equitable Remedies. A breach of the provisions of any of Sections 14.2,
14.3 or 14.4 will cause the Corporation irreparable harm, and the Corporation
will therefore be entitled to issuance of immediate, as well as permanent,
injunctive relief restraining Grantee, and each and every person and entity
acting in concert or participating with Grantee, from initiation and/or
continuation of such breach.

15.3 Tolling Period. If it becomes necessary or desirable for the Corporation to
seek compliance with the provisions of Section 14.2 by legal proceedings, the
period during which Grantee 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.

15.4 No Waiver. Failure of PNC to demand strict compliance with any of the
terms, covenants or conditions of the Agreement will not be deemed a waiver of
such term, covenant or condition, nor will 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.

15.5 Severability. The restrictions and obligations imposed by Sections 14.2,
14.3 and 14.4 are separate and severable, and it is the intent of Grantee 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 will remain
valid and binding upon Grantee.

15.6 Reform. In the event any of Sections 14.2, 14.3 and 14.4 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 Grantee and PNC that said court reduce and reform the provisions
thereof so as to apply the greatest limitations considered enforceable by the
court.

 

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15.7 Waiver of Jury Trial. Each of Grantee 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 14.2, 14.3 and 14.4.

15.8 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 Grantee, Grantee agrees to reimburse PNC for
any amounts Grantee may be required to reimburse PNC or its subsidiaries
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 Grantee reimburse PNC or its
subsidiaries for such amounts pursuant to Section 304 of the Sarbanes-Oxley Act
of 2002.

15.9. Compliance with Internal Revenue Code Section 409A. It is the intention of
the parties that the Award and the Agreement comply with the provisions of
Section 409A of the Internal Revenue Code 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,
Grantee agrees that PNC may, without the consent of Grantee, modify the
Agreement and the Award 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.

16. Acceptance of Award; PNC Right to Cancel. If Grantee does not accept the
Award by executing and delivering a copy of the Agreement to PNC, without
altering or changing the terms thereof in any way, within 30 days of receipt by
Grantee of a copy of the Agreement, PNC may, in its sole discretion, withdraw
its offer and cancel the Award at any time prior to Grantee’s delivery to PNC of
a copy of the Agreement executed by Grantee. Otherwise, upon execution and
delivery of the Agreement by both PNC and Grantee, the Agreement is effective.

In the event that one or more record dates for dividends on PNC common stock
occur after the Grant Date but before the date the Agreement is effective in
accordance with this Section 16, then upon the effectiveness of the Agreement,
the Corporation will make a cash payment to Grantee equal to the amount of the
dividend equivalent payment Grantee would have received had the Agreement been
effective on the Grant Date.

 

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IN WITNESS WHEREOF, PNC has caused the Agreement to be signed on its behalf as
of the Grant Date.

 

THE PNC FINANCIAL SERVICES GROUP, INC.

By:

 

Chairman and Chief Executive Officer

ATTEST:

By:

 

Corporate Secretary

ACCEPTED AND AGREED TO by GRANTEE

 

Grantee

 

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ANNEX A

CERTAIN DEFINITIONS

*    *    *

A.1 “Agreement” means the Stock-Payable Restricted Share Units Agreement between
PNC and Grantee evidencing the Restricted Share Units with Dividend Equivalents
award granted to Grantee pursuant to the Plan.

A.2 “Award” means the Restricted Share Units with Dividend Equivalents award
granted to Grantee pursuant to the Plan and evidenced by the Agreement.

A.3 “Board” means the Board of Directors of PNC.

A.4 “Cause” means:

(a) The willful and continued failure of Grantee to substantially perform
Grantee’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 Grantee by PNC that specifically
identifies the manner in which it is believed that Grantee has not substantially
performed Grantee’s duties;

(b) A material breach by Grantee 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;

(c) Any act of fraud, misappropriation, material dishonesty, or embezzlement by
Grantee against PNC or one of its subsidiaries or any client or customer of PNC
or a subsidiary;

(d) Any conviction (including a plea of guilty or of nolo contendere) of Grantee
for, or entry by Grantee into a pre-trial disposition with respect to, the
commission of a felony; or

(e) Entry of any order against Grantee, 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 Grantee’s employment or other
service relationship with the Corporation.

The cessation of employment of Grantee will be deemed to have been a termination
of Grantee’s employment with the Corporation for Cause for purposes of the
Agreement only if and when PNC, by PNC’s Designated Person, determines that
Grantee is guilty of conduct described in clause (a), (b) or (c) above or that
an event described in clause (d) or (e) above has occurred with respect to
Grantee and, if so, determines that the termination of Grantee’s employment with
the Corporation will be deemed to have been for Cause.

 

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A.5 “CEO” means the chief executive officer of PNC.

A.6 “Change of Control” means:

(a) Any individual, entity or group (within the meaning of Section 13(d)(3) or
14(d)(2) of the Securities Exchange Act of 1934, as amended (the “Exchange
Act”)) (a “Person”) becomes the beneficial owner (within the meaning of Rule
13d-3 promulgated under the Exchange Act) of 20% or more of either (A) the
then-outstanding shares of common stock of PNC (the “Outstanding PNC Common
Stock”) or (B) the combined voting power of the then-outstanding voting
securities of PNC entitled to vote generally in the election of directors (the
“Outstanding PNC Voting Securities”); provided, however, that, for purposes of
this Section A.6(a), the following acquisitions shall not constitute a Change of
Control: (1) any acquisition directly from PNC, (2) any acquisition by PNC,
(3) any acquisition by any employee benefit plan (or related trust) sponsored or
maintained by PNC or any company controlled by, controlling or under common
control with PNC (an “Affiliated Company”), (4) any acquisition pursuant to an
Excluded Combination (as defined in Section A.6(c)) or (5) an acquisition of
beneficial ownership representing between 20% and 40%, inclusive, of the
Outstanding PNC Voting Securities or Outstanding PNC Common Stock shall not be
considered a Change of Control if the Incumbent Board as of immediately prior to
any such acquisition approves such acquisition either prior to or immediately
after its occurrence;

(b) Individuals who, as of the date hereof, constitute the Board (the “Incumbent
Board”) cease for any reason to constitute at least a majority of the Board
(excluding any Board seat that is vacant or otherwise unoccupied); provided,
however, that any individual becoming a director subsequent to the date hereof
whose election, or nomination for election by PNC’s shareholders, was approved
by a vote of at least two-thirds of the directors then comprising the Incumbent
Board shall be considered as though such individual was a member of the
Incumbent Board, but excluding, for this purpose, any such individual whose
initial assumption of office occurs as a result of an actual or threatened
election contest with respect to the election or removal of directors or other
actual or threatened solicitation of proxies or consents by or on behalf of a
Person other than the Board;

(c) Consummation of a reorganization, merger, statutory share exchange or
consolidation or similar transaction involving PNC or any of its subsidiaries, a
sale or other disposition of all or substantially all of the assets of PNC, or
the acquisition of assets or stock of another entity by PNC or any of its
subsidiaries (each, a “Business Combination”), excluding, however, a Business
Combination following which all or substantially all of the individuals and
entities that were the beneficial owners of the Outstanding PNC Common Stock and
the Outstanding PNC Voting Securities immediately prior to such Business
Combination beneficially own, directly or indirectly, more than 60% of the
then-outstanding shares of common stock (or, for a non-corporate

 

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entity, equivalent securities) and the combined voting power of the
then-outstanding voting securities entitled to vote generally in the election of
directors (or, for a non-corporate entity, equivalent governing body), as the
case may be, of the entity resulting from such Business Combination (including,
without limitation, an entity that, as a result of such transaction, owns PNC or
all or substantially all of PNC’s assets either directly or through one or more
subsidiaries) in substantially the same proportions as their ownership
immediately prior to such Business Combination of the Outstanding PNC Common
Stock and the Outstanding PNC Voting Securities, as the case may be (such a
Business Combination, an “Excluded Combination”); or

(d) Approval by the shareholders of PNC of a complete liquidation or dissolution
of PNC.

A.7 “Compensation 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.8 “Competitive Activity” means 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
(a) engaged in business activities similar to some or all of the business
activities of PNC or any subsidiary as of Grantee’s Termination Date or
(b) engaged in business activities which Grantee knows PNC or any subsidiary
intends to enter within the first twelve (12) months after Grantee’s Termination
Date or, if later and if applicable, after the date specified in clause (ii) of
Section A.12(a), in either case whether Grantee is acting as agent, consultant,
independent contractor, employee, officer, director, investor, partner,
shareholder, proprietor or in any other individual or representative capacity
therein.

A.9 “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.10 “Corporation” means PNC and its Consolidated Subsidiaries.

A.11 “Designated Person” means either: (a) the Compensation Committee or its
delegate, if Grantee is a member of the Corporate Executive Group (or equivalent
successor classification) or is subject to the reporting requirements of
Section 16(a) of the Exchange Act with respect to PNC securities, or if Grantee
was such a member or was subject to such reporting requirements when he or she
ceased to be an employee of the Corporation; or (b) the CEO, if Grantee is not
within one of the groups specified in Section A.11(a).

 

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A.12 “Detrimental Conduct” means:

(a) Grantee 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 Grantee’s
Termination Date and extending through (and including) the first
(1st) anniversary of the later of (i) Grantee’s Termination Date and, if
different, (ii) the first date after Grantee’s Termination Date as of which
Grantee ceases to be engaged by the Corporation in any capacity for which
Grantee 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 Grantee 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 Grantee
for, or any entry by Grantee into a pre-trial disposition with respect to, the
commission of a felony that relates to or arises out of Grantee’s employment or
other service relationship with the Corporation.

Grantee will be deemed to have engaged in Detrimental Conduct for purposes of
the Agreement only if and when PNC, by PNC’s Designated Person, determines that
Grantee 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 Grantee
and, if so, determines that Grantee will be deemed to have engaged in
Detrimental Conduct.

A.13 “Disabled” or “Disability” means, except as may otherwise be required by
Section 409A of the Internal Revenue Code, that Grantee either (i) is unable to
engage in any substantial gainful activity by reason of any medically
determinable physical or mental impairment that can be expected to result in
death or can be expected to last for a continuous period of not less than 12
months, or (ii) is, by reason of any medically determinable physical or mental
impairment that can be expected to result in death or can be expected to last
for a continuous period of not less than 12 months, receiving (and has received
for at least three months) income replacement benefits under any
Corporation-sponsored disability benefit plan. If Grantee has been determined to
be eligible for Social Security disability benefits, Grantee shall be presumed
to be Disabled as defined herein.

A.14 “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.15 “GAAP” or “generally accepted accounting principles” means accounting
principles generally accepted in the United States of America.

 

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A.16 “Grant Date” means the Grant Date set forth on page 1 of the Agreement and
is the date as of which the Restricted Share Units with Dividend Equivalents are
authorized to be granted by the Compensation Committee or its delegate in
accordance with the Plan.

A.17 “Grantee” means the person to whom the Restricted Share Units with Dividend
Equivalents award is granted, and is identified as Grantee on page 1 of the
Agreement.

A.18 “Internal Revenue Code” means the Internal Revenue Code of 1986 as amended,
and the rules and regulations promulgated thereunder.

A.19 “PNC” means The PNC Financial Services Group, Inc.

A.20 Intentionally omitted

A.21 “SEC” means the United States Securities and Exchange Commission.

A.22 “Termination Date” means Grantee’s last date of employment with the
Corporation. If Grantee 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 Grantee does not continue to be
employed by PNC or a Consolidated Subsidiary, then for purposes of the
Agreement, Grantee’s employment with the Corporation terminates effective at the
time this occurs.

A.23 “Unvested Share Units” means any Restricted Share Units that are
outstanding but have not vested in accordance with the terms of Section 6 of the
Agreement.

A.24 “Vested Share Units.” Provided that the Restricted Share Units have not
been forfeited pursuant to the terms of Section 5 of the Agreement and are then
outstanding, Restricted Share Units will vest in accordance with the terms of
Section 6 of the Agreement. Restricted Share Units that have vested and become
Vested Share Units are no longer subject to forfeiture under the terms of the
Agreement.

 

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2009 Performance Units Grant

Performance Period: January 1, 2009 - December 31, 2011 (3 Years)

Performance Criteria: Annual Levels of Financial Return from Investing
Activities

Achieved by PNC’s A&L Unit Relative to Benchmark Index

100% Vests on Final Award

THE PNC FINANCIAL SERVICES GROUP, INC.

2006 INCENTIVE AWARD PLAN

*    *     *

2009 PERFORMANCE UNITS AGREEMENT

*    *    *

 

GRANTEE:    GRANT DATE:    February 12, 2009 TARGET SHARE UNITS:   
                     Share Units

 

 

1. Definitions. Certain terms used in this 2009 Performance Units Agreement
(“Agreement”) are defined in Section 14 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.,
“Corporation” means PNC and its Consolidated Subsidiaries, and “Plan” means The
PNC Financial Services Group, Inc. 2006 Incentive Award Plan.

2. Grant of 2009 Performance Units. Pursuant to the Plan and subject to the
terms and conditions of the Agreement, PNC grants to the grantee named above
(“Grant” and “Grantee”) a Share-denominated incentive award opportunity of
Performance Units with the number of target Share Units set forth above (“Target
Share Units”).

The Grant is subject to the corporate performance conditions, employment
conditions, and other terms and conditions of this Agreement and to the Plan, to
final award determination, and to Grantee’s acceptance of the Grant in
accordance with Section 17. Payment of any Final Award (as defined in
Section 14.21) authorized pursuant to the Agreement will generally be made in
cash in an amount equal to the number of Share Units specified in the Final
Award multiplied by the per share price of PNC common stock on the award date
(sometimes referred to in the Agreement as payment in “cash Share-equivalents”).

In general, the Grant is an opportunity for Grantee to receive, at the end of
the applicable performance period, an award in cash Share-equivalents based on
the degree

 

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to which specified corporate performance criteria for PNC’s Asset & Liability
Unit (“A&L Unit”) have been achieved, as determined by the Committee (defined in
Section 14.14) and subject to its negative discretion, or otherwise in
accordance with the terms of the Agreement, provided that Grantee satisfies the
employment conditions specified in the Agreement (or qualifies for a specified
exception and is deemed to have satisfied those employment conditions) and the
other conditions of the Agreement are met.

The potential maximum award payout that Grantee will be eligible to receive will
be denominated in Share Units and will be expressed as a percentage of the
Target Share Units. The number of Target Share Units for this Grant is set forth
on page 1 of the Agreement. The potential maximum award payout percentage will
be determined by the levels of financial return from investing activities that
the A&L Unit achieves relative to benchmark performance (in basis points) for
each of the three years in the overall performance period and by the potential
award payout calculation schedule established by the Committee, giving equal
weight to each of the three covered years, subject to certain limitations or
adjustments if there is an early termination or limitation of the performance
measurement period (e.g., if Grantee dies or has a qualifying retirement or if
there is a Change of Control, as defined herein, during a performance
measurement period).

Absent a Change of Control (as defined herein), the Committee will determine the
Final Award, if any, that Grantee receives within this calculated maximum
potential payout amount, generally in early 2012 (or early in 2010 or 2011 in
the event of Grantee’s death prior to that time). The Committee may adjust the
Final Award downward, but not upward, from this calculated performance-based
amount. This potential award payout amount could be as high as 200% of the
Target Share Units for A&L Unit performance significantly above the applicable
benchmark index as specified by the Agreement for each year of the three-year
performance period and if Grantee remains an employee of the Corporation
throughout the full three-year performance period, or it could be zero if the
A&L Unit fails to achieve at least the threshold level of performance specified
for an award in the Agreement schedules with respect to such performance
standards and years or if Grantee fails to satisfy the employment conditions or
qualified exceptions specified in the Agreement.

Any Final Award payout authorized pursuant to this Grant will generally be paid
in cash Share-equivalents. The Grant must still be outstanding at the time a
Final Award determination is made for Grantee to be eligible to receive an
award, and any Final Award and payment thereof is subject to the terms and
conditions set forth in the Agreement and to the Plan.

The Agreement also provides a formula for calculation of the Final Award in the
event of a Change of Control of PNC and for the form and timing of payment of
any such award.

 

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3. Corporate Performance Conditions. The Grant is subject to the following
corporate performance conditions.

3.1 Performance Criteria. The corporate performance standards established by the
Committee as the performance criteria for the Performance Units are the levels
of financial return from investing activities achieved by the A&L Unit relative
to applicable Benchmark Performance Index, as defined in Section 14.6. This A&L
Unit investment performance is measured annually for each year (or shorter
partial-year period where required by the Agreement) in the Performance Period,
as defined in Section 14.33.

3.2 Benchmark Performance Indices and Annual Potential Payout Calculation
Schedules. The Committee has determined that the Benchmark Performance Index for
each year (or shorter partial-year period where required by the Agreement) in
the Performance Period will be the same benchmark performance index that PNC
uses internally to evaluate the investment performance of the A&L Unit as in
effect as of March 30 of that year, so that, for example, 2009 performance will
be compared to PNC’s internal performance benchmark index for the A&L Unit in
effect on March 30, 2009, 2010 performance will be compared to PNC’s internal
performance benchmark index for the A&L Unit in effect on March 30, 2010, etc.

The Committee also establishes the applicable Annual Potential Payout
Calculation Schedule (as defined in Section 14.3) with respect to this Grant for
the full years, and/or portion of a year where a limited-year calculation
applies, in the Performance Period. The Schedule established by the Committee at
the time it authorized this Grant shall apply to all full and partial covered
years in the Performance Period unless and until amended prospectively by the
Committee.

3.3 Calculation of Applicable Annual Potential Payout Percentages. After the end
of each year of the Performance Period, PNC will: (1) determine the level of
financial return from investing activities achieved by the A&L Unit for the
applicable period and the comparison in basis points of such performance to the
applicable Benchmark Performance Index; and (2) calculate the Annual Potential
Payout Percentage, as defined in Section 14.2, achieved by the A&L Unit for that
year. Such results will be presented to the Committee.

Where the Agreement requires the calculation of an Annual Potential Payout
Percentage for a given period that is less than a full year (e.g., upon certain
qualifying terminations or Change of Control), PNC will determine the level of
financial return from investing activities achieved by the A&L Unit relative to
benchmark for that limited period and the Limited-Year Annual Potential Payout
Percentage for that limited period as so required by the Agreement.

4. Grantee Service Requirement and Limitation of Potential Award; Early
Termination of Grant. The Grant is subject to the following employment
conditions.

4.1 Eligibility for an Award; Employment Conditions and Early Termination of
Grant. Grantee will not be eligible to receive a Final Award unless the Grant
remains

 

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outstanding on the Committee-determined Award Date (as defined in Section 14.5)
or as of the end of the day immediately preceding the day on which a Change of
Control occurs, if earlier.

The Grant will automatically terminate on Grantee’s Termination Date (as defined
in Section 14.45) unless an exception is available as set forth in Section 4.2,
Section 4.3, Section 4.4 or Section 4.5. Where one or more of the conditions to
an exception are post-employment conditions, the Grant will terminate upon the
failure of any of those conditions.

In the event that Grantee’s employment is terminated by the Corporation for
Cause (as defined in Section 14.9), the Grant will automatically terminate on
Grantee’s Termination Date whether or not the termination might otherwise have
qualified for an exception as a Retirement or a Disability termination pursuant
to Section 4.3 or Section 4.4.

In the limited circumstances where the Grant remains outstanding notwithstanding
Grantee’s termination of employment with the Corporation, Grantee will be
eligible for consideration for an award, subject to limitation as set forth in
the applicable section of the Agreement. Said award, if any, will be determined
and payable at the same time that such an award would have been determined and
payable had Grantee remained a Corporation employee, except that in the case of
death, the determination and payment of said award, if any, shall be accelerated
if so indicated in accordance with the applicable provisions of Section 5 or
Section 6, as applicable, and Section 7.

Any award that the Committee may determine to make after Grantee’s death will be
paid to Grantee’s legal representative, as determined in good faith by the
Committee, in accordance with Section 9.

Notwithstanding anything in Section 4 or Section 5 to the contrary, if a Change
of Control (as defined in Section 14.11) occurs prior to the time the Committee
makes a Final Award determination pursuant to Section 5.2 (that is, prior to the
Committee-determined Award Date), an award will be determined in accordance with
Section 6.

4.2 Death While an Employee. If Grantee dies while an employee of the
Corporation and prior to the Committee-determined Award Date, the Grant will
remain outstanding and Grantee will be eligible for consideration for a prorated
award calculated in accordance with Section 5.1(b), with an applicable
performance measurement date (as defined in Section 5.1) of the earlier of the
last day of the year in which the death occurred and December 31, 2011, and
payable in accordance with Section 7.

Any such award will be subject to Committee determination pursuant to
Section 5.2, and may be reduced or eliminated by the Committee in the exercise
of its negative discretion unless such determination occurs during a Change of
Control Coverage Period (as defined in Section 14.12) or a Change of Control has
occurred.

 

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In the event that a Change of Control occurs after the time Grantee died but
prior to the time the Committee makes an award determination with respect to
Grantee (either to award a specified amount or not to authorize any award), an
award will be deemed to be made pursuant to Section 6, calculated as specified
in Section 6.1(b) and payable in accordance with Section 7.

4.3 Qualifying Retirement. If Grantee Retires (as defined in Section 14.39)
prior to the Committee-determined Award Date and the termination of employment
is not also a termination by the Corporation for Cause, the Grant will remain
outstanding post-employment; provided, however, that PNC may terminate the Grant
at any time prior to the Award Date, other than during a Change of Control
Coverage Period or after the occurrence of a Change of Control, upon
determination that Grantee has engaged in Detrimental Conduct (as defined in
Section 14.18). If Grantee is Disabled (as defined in Section 14.19) at the time
of Retirement and Section 4.4 is also applicable to Grantee, that subsection
will govern rather than this Section 4.3.

Provided that the Grant has not been terminated prior to the award date for
Detrimental Conduct and is still outstanding at that time, Grantee will be
eligible for Committee consideration of a prorated award at the time that such
an award, if any, would have been considered had Grantee remained a Corporation
employee, calculated in accordance with Section 5.1(c) with a performance
measurement date of the last day of the last full quarter completed on or prior
to Grantee’s Retirement date, but in no event later than December 31, 2011, and
payable in accordance with Section 7.

Any such award will be subject to Committee determination pursuant to
Section 5.2, and may be reduced or eliminated by the Committee in the exercise
of its negative discretion unless such determination occurs during a Change of
Control Coverage Period or a Change of Control has occurred.

If Grantee dies after a qualifying Retirement but before the time set forth
above for consideration of an award and provided that the Grant has not been
terminated for Detrimental Conduct and is still outstanding at the time of
Grantee’s death, the Committee may consider an award for Grantee and make an
award determination with respect to Grantee (either to award a specified amount
or not to authorize any award). Any such award determination will be made and
such award, if any, will be calculated in accordance with Section 5.1(c) as
described above but will be paid in accordance with Section 7 during the
calendar year immediately following the year in which Grantee’s death occurs, if
the death occurs on or prior to December 31, 2011, or in 2012 if the death
occurs in 2012 but prior to the Award Date.

In the event that a Change of Control occurs prior to the time the Committee
makes an award determination with respect to Grantee (either to award a
specified amount or not to authorize an award), an award will be deemed to be
made pursuant to Section 6, calculated as specified in Section 6.1(c) and
payable in accordance with Section 7.

 

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4.4 Qualifying Disability Termination. If Grantee’s employment with the
Corporation is terminated by reason of Disability (as defined in Section 14.19)
prior to the Committee-determined Award Date and the termination of employment
is not also a termination by the Corporation for Cause, the Grant will remain
outstanding post-employment; provided, however, that PNC may terminate the Grant
at any time prior to the Award Date, other than during a Change of Control
Coverage Period or after the occurrence of a Change of Control, upon
determination that Grantee has engaged in Detrimental Conduct (as defined in
Section 14.18).

Provided that the Grant is still outstanding at that time, Grantee will be
eligible for Committee consideration of a full award at the time that such an
award, if any, would have been considered had Grantee remained a Corporation
employee, calculated in accordance with Section 5.1(d) and payable in accordance
with Section 7.

Any such award will be subject to Committee determination pursuant to
Section 5.2, and may be reduced or eliminated by the Committee in the exercise
of its negative discretion unless such determination occurs during a Change of
Control Coverage Period or a Change of Control has occurred. Although Grantee
will be eligible for consideration for a full award (Standard Payout
Calculation) at the scheduled time, it is anticipated that the Committee will
take into account the timing and circumstances of the Disability when deciding
whether and the extent to which to exercise its negative discretion.

If Grantee dies after a qualifying Disability termination but before the time
set forth above for consideration of an award and provided that the Grant has
not been terminated for Detrimental Conduct and is still outstanding at the time
of Grantee’s death, the Committee may consider an award for Grantee and make an
award determination with respect to Grantee (either to award a specified amount
or not to authorize any award). Any such award determination will be made and
such award, if any, will be paid in accordance with Section 7 during the year
immediately following the year in which Grantee’s death occurs, if the death
occurs on or prior to December 31, 2011, or in 2012 if the death occurs in 2012
but prior to the Award Date; provided, however, that the maximum award that may
be approved in these circumstances is the award that could have been authorized
had Grantee died while an employee of the Corporation.

In the event that a Change of Control occurs prior to the time the Committee
makes an award determination with respect to Grantee (either to award a
specified amount or not to authorize an award), an award will be deemed to be
made pursuant to Section 6, calculated as specified in Section 6.1(d) and
payable in accordance with Section 7.

4.5 Qualifying Termination in Anticipation of a Change of Control. If Grantee’s
employment with the Corporation is terminated by the Corporation prior to the
Award Date and such termination is an Anticipatory Termination as defined in
Section 14.4, then (i) the Grant will remain outstanding notwithstanding
Grantee’s

 

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termination of employment with the Corporation, (ii) the Grant will not be
subject to termination for Detrimental Conduct, and (iii) Grantee will be
eligible for consideration for an award pursuant to Section 5.2, calculated in
accordance with Section 5.1(e), or will receive an award pursuant to Section 6,
calculated as specified in Section 6.1(e), as applicable. Any such award will be
payable in accordance with Section 7.

If Grantee dies while eligible to receive an award pursuant to this Section 4.5
but prior to the time the Committee makes an award determination pursuant to
Section 5.2 or a Change of Control occurs, Grantee will be eligible for
Committee consideration of an award of up to the greater of the award Grantee
could have received had he died while an employee of the Corporation or an award
determined as set forth in Section 5.1(e). If Grantee dies while eligible to
receive an award pursuant to this Section 4.5 but a Change of Control occurs
prior to the time the Committee makes an award determination pursuant to
Section 5.2, Grantee will be deemed to receive an award in accordance with
Section 6.1(e).

5. Certification of Performance Results; Calculation of Maximum Potential Payout
Amount; and Final Award Determination.

5.1 Certification of Level of Achievement of A&L Unit Performance with Respect
to Performance Criteria; Calculation of Final Potential Payout Percentage and
Calculated Maximum Potential Payout Amount. As soon as practicable after
December 31, 2011, or after the earlier relevant date if the applicable
performance measurement date and potential award date are earlier under the
circumstances, PNC will present information to the Committee concerning the
following: (1) the levels of financial return from investing activities achieved
by the A&L Unit for each of the applicable full and partial years for which
performance is being measured under the circumstances, and the comparison, in
basis points, of such performance to applicable Benchmark Performance Index for
each such period; (2) the calculated Annual Potential Payout Percentages
determined in accordance with the applicable Schedule on the basis of the
performance achieved by the A&L Unit compared to applicable benchmark for such
periods; and (3) the calculated Final Potential Payout Percentage.

Subsections (a), (b), (c), (d) and (e) below set forth additional criteria for
the certifications and calculations to be made pursuant to this Section 5.1
under varying circumstances. The last day of the applicable performance
measurement period is sometimes referred to as the “performance measurement
date”. The time when the certification, calculation and Final Award
determination process will take place is sometimes referred to as the “scheduled
award determination period”, and the date when a Final Award, if any, is
determined and made by the Committee is sometimes referred to as the
“Committee-determined Award Date” (as set forth in Section 14.5).

Notwithstanding anything in this Section 5 to the contrary, if a Change of
Control has occurred, Section 6 will apply.

(a) Non-Exceptional Circumstances – Standard Payout Calculation. Provided that
Grantee remains an employee of the Corporation and the Grant remains outstanding

 

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such that Grantee remains eligible for consideration for an award, and that a
Change of Control has not occurred, the Performance Period will run through
December 31, 2011 and the process of certification of the levels of achievement
of A&L Unit performance with respect to the Performance Criteria, the
calculation of the Final Potential Payout Percentage and the Calculated Maximum
Potential Payout Amount, and the determination of the Final Award, if any, will
occur in early 2012.

Under the circumstances set forth in this subsection (a) above (“non-exceptional
circumstances”), PNC will present information to the Committee for purposes of
this Section 5.1 on the following basis:

(i) the applicable performance measurement date will be December 31, 2011;

(ii) the applicable Performance Period will consist of the full years 2009, 2010
and 2011;

(iii) the applicable Final Potential Payout Percentage will be the percentage
that is the average of the Annual Potential Payout Percentages for 2009, 2010
and 2011, but in no event greater than 200%;

(iv) the applicable Calculated Maximum Potential Payout Amount will be the
number of Share Units equal to the Final Potential Payout Percentage of the
Target Share Units; and

(v) the scheduled award determination period will occur in early 2012.

(b) Death While an Employee. In the event that Grantee dies while an employee of
the Corporation and prior to the regularly scheduled award date for
non-exceptional circumstances in early 2012 and the Grant remains outstanding
pursuant to Section 4.2, PNC will present information to the Committee for
purposes of this Section 5.1 on the following basis:

(i) the applicable performance measurement date will be the earlier of the last
day of the year in which the death occurred and December 31, 2011;

(ii) the applicable Performance Period will be the period commencing on
January 1, 2009 and ending on the applicable performance measurement date, and
will consist of the one, two or three full years, as the case may be, in that
period;

(iii) the applicable Final Potential Payout Percentage will be a Limited-Period
Final Potential Payout Percentage and will be the percentage that is the average
of the Annual Potential Payout Percentages for the full years in the applicable
Performance Period specified above, but in no event greater than 200%;

(iv) the applicable Calculated Maximum Potential Payout Amount will be the
number of Share Units equal to (x) the applicable Limited-Period Final Potential
Payout Percentage of the Target Share Units, then (y) prorated (as defined in
Section 14.37) based on the number of full years in the applicable Performance
Period specified above, including the year of death if prior to 2012; and

 

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(v) the scheduled award-determination period will occur during the year
immediately following the year in which Grantee died (i.e., early in 2010, 2011,
or 2012, as the case may be) unless Grantee dies after December 31, 2011 but
prior to the award date, in which case the scheduled award-determination period
will occur in 2012.

(c) Retirement. In the event that Grantee Retires prior to the regularly
scheduled award date for non-exceptional circumstances in early 2012 but Grantee
has met the conditions for a qualifying Retirement termination set forth in
Section 4.3 and the Grant has not been terminated by PNC prior to the award date
pursuant to Section 4.3 for Detrimental Conduct and remains outstanding, PNC
will present information to the Committee for purposes of this Section 5.1 on
the following basis:

(i) the applicable performance measurement date will be the last day of the last
full quarter completed prior to Grantee’s Retirement date or, if the Retirement
date is a quarter-end date, that quarter-end date, but in no event later than
December 31, 2011;

(ii) the applicable limited Performance Period will be the period commencing on
January 1, 2009 and ending on the applicable performance measurement date, and
will consist of the full and partial years in that period;

(iii) the applicable Final Potential Payout Percentage will be a Limited-Period
Final Potential Payout Percentage and will be the percentage that is the
weighted average of the Annual Potential Payout Percentages for the full years,
if any, and the Limited-Year Annual Potential Payout Percentage for the partial
year, if any, in the applicable limited Performance Period specified above,
calculated as set forth in Section 14.29;

(iv) the applicable Calculated Maximum Potential Payout Amount will be the
number of Share Units equal to (x) the applicable Limited-Period Final Potential
Payout Percentage of the Target Share Units, then (y) prorated (as defined in
Section 14.37) based on the number of full quarters in the applicable limited
Performance Period (i.e., in the period from January 1, 2009 through the
quarter-end date that is the applicable performance measurement date specified
above); and

(v) the scheduled award determination period will occur in early 2012 as
provided in Section 7.1, unless Grantee dies after Retirement but before the
beginning of 2011, in which case the scheduled award-determination period will
occur in early 2010 (if the death occurred in 2009) or early 2011 (if the death
occurred in 2010), as the case may be.

In the event that Grantee is Disabled at the time of Retirement and Section 4.4
is also applicable to Grantee, then Section 5.1(d) will govern rather than this
Section 5.1(c).

(d) Disability. Except as set forth in the following paragraph, in the event
that Grantee becomes Disabled prior to the regularly scheduled award date for

 

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non-exceptional circumstances in early 2012 but Grantee has met the conditions
for a qualifying Disability termination set forth in Section 4.4 and the Grant
has not been terminated by PNC prior to the award date pursuant to Section 4.4
for Detrimental Conduct and remains outstanding, PNC will present information to
the Committee for purposes of this Section 5.1 for consideration of an award on
the same basis as that set forth in Section 5.1(a) for a continuing employee of
the Corporation, together with such information as the Committee may request
concerning the timing and circumstances of the Disability. The scheduled
award-determination period will occur in early 2012 as provided in Section 7.1.

If Grantee dies after a qualifying Disability termination but prior to the
regularly scheduled award date and the Grant is still outstanding at the time of
Grantee’s death, Grantee will be eligible for Committee consideration of an
award at the time and up to the maximum amount of the award Grantee could have
received had he died while an employee of the Corporation.

(e) Qualifying Termination in Anticipation of a Change of Control. In the event
that Grantee’s employment with the Corporation is terminated by the Corporation
prior to the regularly scheduled award date for non-exceptional circumstances in
early 2012 but Grantee has met the conditions for a qualifying termination in
anticipation of a Change of Control set forth in Section 4.5 and the Grant
remains outstanding, but a Change of Control has not yet occurred, then:

(1) If a Change of Control transaction is pending at the regularly scheduled
award date, the Grant will remain outstanding and Grantee will be eligible to
receive an award pursuant to Section 5.2 on the same basis as that set forth in
Section 5.1(c) for a qualifying Retiree and the Committee will have no
discretion to reduce the size of such award; and

(2) If there is no Change of Control transaction pending at the regularly
scheduled award date, the Grant will remain outstanding and the Committee will
have discretion to authorize an award, pursuant to Section 5.2, to Grantee up to
a maximum permitted award calculated on the same basis as that set forth in
Section 5.1(c) for a qualifying Retiree, but the Committee will also have
discretion to reduce the award as set forth in Section 5.2(b).

If Grantee dies after an Anticipatory Termination but prior to the time the
Committee makes an award determination pursuant to Section 5.2 or a Change of
Control occurs, Grantee will be eligible for Committee consideration of an award
of up to the greater of the award Grantee could have received had he died while
an employee of the Corporation or an award determined as set forth above in this
Section 5.1(e).

If Grantee dies after an Anticipatory Termination but a Change of Control occurs
prior to the time the Committee makes an award determination pursuant to
Section 5.2, Grantee will be deemed to receive an award in accordance with
Section 6.1(e).

 

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5.2 Final Award Determination by Committee.

(a) The Committee will have the authority to award to Grantee (“award”) as a
Final Award such amount, denominated as a specified number of Share Units, as
may be determined by the Committee, subject to the limitations set forth in the
following paragraph, provided, that, the Grant is still outstanding, that
Grantee is either still an employee of the Corporation or qualifies for an
exception to the employment condition pursuant to Section 4.2, 4.3, 4.4 or 4.5,
and that the Final Potential Payout Percentage is greater than zero.

The Final Award may not exceed the applicable Calculated Maximum Potential
Payout Amount, as determined in accordance with the applicable subsection of
Section 5.1, and is subject to the exercise of negative discretion by the
Committee pursuant to Section 5.2(b), if applicable. The Committee will not have
authority to exercise negative discretion if a Change of Control Coverage Period
has commenced and has not yet ended or if a Change of Control has occurred. If
there has been a Change of Control, the Committee’s authority is subject to
Section 6.

The date on which the Committee makes its determination as to whether or not it
will authorize an award and, if so, the size of a Final Award, if any, it
authorizes within the Calculated Maximum Potential Payout Amount determined
pursuant to the Agreement is sometimes referred to in the Agreement as the
“Committee-determined Award Date” (as set forth in Section 14.5).

Payment of the Final Award, if any, will be made in cash in accordance with
Section 7. If Grantee dies after a Final Award is determined but before payment
is made, payment of the Final Award will be made to Grantee’s legal
representative, as determined in good faith by the Committee, in accordance with
Section 9.

(b) Except during a Change of Control Coverage Period or after the occurrence of
a Change of Control, the Committee may exercise negative discretion with respect
to the Grant and may determine, in light of such Corporation or individual
performance or other factors as the Committee may deem appropriate, that
notwithstanding the levels of financial return from investing activities
achieved by the A&L Unit relative to benchmark, the Committee will not award
Grantee the full Calculated Maximum Potential Payout Amount that the Committee
is authorized to award pursuant to Section 5.2(a), or any of such amount.

It is anticipated that the Committee will take into account such factors as
absolute A&L Unit financial performance, absolute proprietary trading results,
cumulative performance relative to benchmark, adherence to risk parameters, and
Grantee’s contributions to the success of other PNC businesses when deciding
whether and the extent to which to exercise its negative discretion.

If the Committee so determines to exercise its negative discretion pursuant to
this Section 5.2(b), the Final Award, if any, will be reduced accordingly;
provided, however,

 

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that the Committee may not exercise such negative discretion upon or after the
occurrence of a Change of Control (or during the period after the occurrence of
a Change of Control Triggering Event but before either a Change of Control
Failure of such triggering event or a Change of Control occurs).

(c) If a Change of Control occurs prior to the time the Committee makes an award
determination pursuant to Section 5.2, the Final Award will be determined in
accordance with Section 6 rather than being determined by the Committee pursuant
to Section 5.2 and will not be subject to the Committee’s negative discretion.

6. Change of Control Prior to a Committee-Determined Award Date.

6.1 Final Award Calculation.

Notwithstanding anything in the Agreement to the contrary, upon the occurrence
of a Change of Control at any time prior to a Committee-determined Award Date
pursuant to Section 5.2, (i) the Performance Period, if not already ended, will
be limited and will end on the last day of the last full quarter completed prior
to the day the Change of Control occurs or, if the Change of Control occurs on a
quarter-end date, on the day the Change of Control occurs, but in no event later
than December 31, 2011, and (ii) Grantee will be deemed to have been awarded a
Final Award in an amount determined as set forth in this Section 6, payable to
Grantee or Grantee’s legal representative at the time and in the manner set
forth in Section 7, provided that the Grant is still outstanding as of the end
of the day immediately preceding the day on which the Change of Control occurs
and has not already terminated or been terminated in accordance with the terms
of Section 4.

If this Section 6 is applicable and a Final Award is deemed to be awarded
pursuant to Section 6, the day the Change of Control occurs will be considered
the Award Date for purposes of the Agreement. This date is sometimes referred to
in the Agreement as the “Change-of-Control-determined Award Date” (as set forth
in Section 14.5).

(a) Standard Change of Control Payout Calculation. Provided that Grantee is an
employee of the Corporation and the Grant is outstanding as of the end of the
day immediately preceding the day on which the Change of Control occurs such
that Grantee remains eligible for an award, Grantee’s Final Award will be
determined as follows:

(i) the applicable performance measurement date will be the last day of the last
full quarter completed prior to the day the Change of Control occurs, or, if the
Change of Control occurs on a quarter-end date, the day the Change of Control
occurs, but in no event later than December 31, 2011;

(ii) the applicable Performance Period will be the period commencing on
January 1, 2009 and ending on the applicable performance measurement date, and
will consist of the full and partial years in that period;

 

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(iii) the scheduled award-determination period will occur as soon as practicable
after the occurrence of the Change of Control; and

(iv) a Final Award will be calculated in two parts (Part A and Part B), and the
Final Award amount will be the sum of the amounts calculated for the Part A
Award and the Part B Award as set forth below; provided, however, that the Part
B Award is not applicable in the limited circumstance where the Change of
Control occurs on or after December 31, 2011 and the Part A Award is not
prorated.

Part A Award: The Part A Award amount will be the number of Share Units
equal to:

(1) the “Change of Control Payout Percentage” (calculated as set forth below) of
the Target Share Units, then,

(2) prorated (as defined in Section 14.37) based on the number of full quarters
in the applicable limited Performance Period (i.e., in the period from
January 1, 2009 through the quarter-end date that is the applicable performance
measurement date specified above) unless the Change of Control occurs on or
after December 31, 2011. If the Change of Control occurs on or after
December 31, 2011 (and therefore the applicable Performance Period covers a full
three years), proration will not apply.

The “Change of Control Payout Percentage” will be (a) or (b) below, as
applicable, (but in no event greater than 200%):

(a) If the Change of Control occurs prior to December 31, 2011, such that the
Performance Period is less than three full years, the Change of Control Payout
Percentage will be the higher of (1) 100% and (2) a Limited-Period Final
Potential Payout Percentage calculated as set forth in Section 14.29 for the
applicable limited Performance Period specified above; and

(b) If the Change of Control occurs on or after December 31, 2011, the Change of
Control Payout Percentage will be the average of the Annual Potential Payout
Percentages for the full years 2009, 2010 and 2011.

Part B Award: The Part B Award amount will be the number of Share Units equal
to:

(1) 100% of the Target Share Units, multiplied by

(2) the fraction equal to 1.00 minus the fraction used for the proration by
quarters in the calculation of the Part A Award above.

If the calculation of the Part A Award above does not include a proration
factor, the Part B Award will not be applicable.

 

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Grantee’s Final Award determined pursuant to this Section 6.1(a) will be paid to
Grantee’s legal representative, as determined in good faith by the Committee, in
accordance with Section 9 if Grantee dies after the Change of Control occurs but
before this Final Award is paid.

(b) Death. If Grantee died while an employee of the Corporation and a Final
Award determination (either to award a specified amount or not to authorize any
award) was made by the Committee pursuant to Section 5.2 prior to the Change of
Control, no further or different award determination will be made pursuant to
this Section 6.1.

In the event the Grantee died while an employee of the Corporation and qualified
for consideration for an award pursuant to Section 4.2 but the Committee had not
yet made an award determination (either to award a specified amount or not to
authorize any award) with respect to Grantee at the time the Change of Control
occurs such that Grantee remains eligible for an award, then the scheduled
award-determination period will occur as soon as practicable after the
occurrence of the Change of Control, and the amount of Grantee’s Final Award
(payable to Grantee’s legal representative, as determined in good faith by the
Committee, in accordance with Section 9) will be determined on the following
basis, as applicable.

(1) If Grantee died in the calendar year prior to the year in which the Change
of Control occurs but the Committee had not yet made an award determination
(either to award a specified amount or not to authorize any award) with respect
to Grantee at the time the Change of Control occurs, Grantee’s Final Award will
be in the amount of the Calculated Maximum Potential Payout Amount determined in
the same manner as set forth in Section 5.1(b) but with no Committee discretion
to reduce the amount of the award.

(2) If Grantee died prior to but in the same calendar year as the Change of
Control, Grantee’s Final Award will be in the amount of the award that would
have been payable to Grantee pursuant to the calculations set forth in
Section 6.1(a), but substituting a Part B Award of zero Share Units for any Part
B Award amount calculated pursuant to that section, had Grantee not died but had
been an employee of the Corporation as of the end of day immediately preceding
the day the Change of Control occurred.

(c) Qualifying Retirement. In the event that Grantee Retired prior to the day
the Change of Control occurs but Grantee has met the conditions for a qualifying
Retirement termination set forth in Section 4.3 and the Grant has not been
terminated by PNC prior to the Change of Control pursuant to Section 4.3 for
Detrimental Conduct and is outstanding as of the end of the day immediately
preceding the day on which the Change of Control occurs such that Grantee
remains eligible for an award, Grantee’s Final Award will be in the amount of
the lesser of:

(1) the Calculated Maximum Potential Payout Amount determined in the same manner
as set forth in Section 5.1(c) but with no Committee discretion to reduce the
amount of the award; and

 

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(2) the amount of the award that would have been payable to Grantee pursuant to
the calculations set forth in Section 6.1(a), but substituting a Part B Award of
zero Share Units for any Part B Award amount calculated pursuant to that
section, had Grantee not Retired but had been an employee of the Corporation as
of the end of the day immediately preceding the day the Change of Control
occurred.

The scheduled award-determination period will occur as soon as practicable after
the occurrence of the Change of Control.

If Grantee died while a qualified Retiree and a Final Award determination
(either to award a specified amount or not to authorize any award) was made by
the Committee pursuant to Section 5.2 prior to the Change of Control, no further
or different award determination will be made pursuant to this Section 6.1.

If no such Final Award determination was made prior to the Change of Control,
Grantee’s Final Award determined pursuant to this Section 6.1(c) will be paid to
Grantee’s legal representative, as determined in good faith by the Committee, in
accordance with Section 9.

(d) Disability. In the event that Grantee became Disabled and Grantee’s
employment with the Corporation terminated prior to the day the Change of
Control occurs but Grantee has met the conditions for a qualifying Disability
termination set forth in Section 4.4 and the Grant has not been terminated by
PNC prior to the Change of Control pursuant to Section 4.4 for Detrimental
Conduct and is outstanding as of the end of the day immediately preceding the
day on which the Change of Control occurs such that Grantee remains eligible for
an award, Grantee’s Final Award will be in the amount of the award that would
have been payable to Grantee pursuant to the calculations set forth in
Section 6.1(a), but substituting a Part B Award of zero Share Units for any Part
B Award amount calculated pursuant to that section, had Grantee still been an
employee of the Corporation as of the end of the day immediately preceding the
day the Change of Control occurred. The scheduled award-determination period
will occur as soon as practicable after the occurrence of the Change of Control.

If Grantee died while qualified to receive an award and a Final Award
determination (either to award a specified amount or not to authorize any award)
was made by the Committee pursuant to Section 5.2 prior to the Change of
Control, no further or different award determination will be made pursuant to
this Section 6.1. If no such Final Award determination was made prior to the
Change of Control, Grantee’s Final Award (payable to Grantee’s legal
representative, as determined in good faith by the Committee, in accordance with
Section 9) will be an award determined in accordance with Section 6.1(b) as if
Grantee had died while an employee of the Corporation and prior to the Change of
Control.

(e) Qualifying Termination in Anticipation of a Change of Control. In the event
that Grantee’s employment with the Corporation was terminated by the Corporation
prior to the Award Date and such termination was an Anticipatory Termination as
defined in Section 14.4 and the Grant is outstanding at the time the Change of
Control occurs and Grantee remains eligible for an award pursuant to
Section 4.5, Grantee will receive a Final Award on the following basis, as
applicable.

 

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(1) If the Change of Control occurs within three (3) months of Grantee’s
Termination Date, Grantee will receive a Final Award on the same basis as a
continuing employee of the Corporation as set forth in Section 6.1(a).

(2) If the Change of Control occurs more than three (3) months after Grantee’s
Termination Date, Grantee will receive a Final Award on the same basis as a
qualifying Retiree as set forth in Section 6.1(c).

If Grantee died while qualified to receive an award pursuant to Section 4.5 and
a Final Award determination (either to award a specified amount or not to
authorize any award) was made by the Committee pursuant to Section 5.2 prior to
the Change of Control, no further or different award determination will be made
pursuant to this Section 6.1. If no such Final Award determination was made
prior to the Change of Control, Grantee’s Final Award (payable to Grantee’s
legal representative, as determined in good faith by the Committee, in
accordance with Section 9) will be in the same amount as the Final Award that
would have been paid to Grantee pursuant to this Section 6.1(e) had Grantee
still been alive on the Change-of-Control-determined Award Date.

6.2 No Committee Discretion. The Committee may not exercise any negative
discretion pursuant to Section 5.2(b) or otherwise exercise discretion pursuant
to the Agreement in any way that would serve to reduce an award deemed to be
made to Grantee pursuant to this Section 6.

7. Payment of Final Award; Termination of Grant as to Any Unawarded Performance
Units.

7.1 Payment of Final Award Determined by the Committee.

(a) Form of Payment. Payment of any Final Award determined by the Committee
pursuant to Section 5.2 will be made in cash in an amount equal to the number of
Share Units specified in the Final Award multiplied by the Fair Market Value (as
defined in Section 14.20) on the Award Date of a share of PNC common stock or as
otherwise provided in Section 8 if applicable.

(b) Timing. Determination of eligibility for an award, calculation of the
maximum permitted award amount, and a decision by the Committee on whether or
not to authorize an award and, if so, the size of such Final Award (the
“scheduled award-determination process”) and then payment of any such Final
Award will all generally occur in the first quarter of 2012 or as soon
thereafter as practicable after the final data necessary for the Committee to
make its award determination is available.

In general, it is expected that the Award Date will occur in 2012 and no later
than the end of the second quarter of that year, and that payment of a Final
Award, if any, will be made as soon as practicable after the Award Date. Except
as otherwise provided

 

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below, in no event will payment be made earlier than January 1, 2012 or later
than December 31, 2012, other than in unusual circumstances where a further
delay thereafter would be permitted under Section 409A of the Internal Revenue
Code, and if such a delay is permissible, as soon as practicable within such
limits.

In the event of Grantee’s death prior to the Award Date where Grantee has
satisfied all of the conditions of Section 4.2, 4.3, 4.4 or 4.5 of the Agreement
and otherwise meets all applicable criteria as set forth in the Agreement for
consideration for an award, (a) the scheduled award-determination process will
occur at the same time and in the same manner that such process would have
occurred had Grantee remained an employee of the Corporation, provided that if
the death occurs prior to 2011, the scheduled award-determination process will
occur in the calendar year immediately following Grantee’s death, and
(b) payment of a Final Award, if any, will be made during the calendar year
immediately following the year in which Grantee died if the death occurs on or
prior to December 31, 2011, or in 2012 if Grantee dies in 2012, provided, that,
in no event will payment occur later than December 31st of the calendar year so
specified as the year for payment, other than in unusual circumstances where a
further delay thereafter would be permitted under Section 409A of the Internal
Revenue Code, and if such a delay is permissible, as soon as practicable within
such limits.

Otherwise, in the event that Grantee is no longer employed by the Corporation
but has satisfied all of the conditions of Section 4.3, 4.4 or 4.5 of the
Agreement and otherwise meets all applicable criteria as set forth in the
Agreement for consideration for an award, (a) the scheduled award-determination
process will occur at the same time and in the same manner that such process
would have occurred had Grantee remained an employee of the Corporation,
generally in 2012 during the first quarter of that year, and (b) once the
Committee has made its award determination, payment of a Final Award, if any,
will be made as soon as practicable after the Award Date, provided, that, in no
event will payment be made earlier than January 1, 2012 or later than
December 31, 2012, other than in unusual circumstances where a further delay
thereafter would be permitted under Section 409A of the Internal Revenue Code,
and if such a delay is permissible, as soon as practicable within such limits.

(c) Disputes. If there is a dispute regarding payment of the Final Award, PNC
will settle the undisputed portion of the award, if any, within the time frame
set forth above in this Section 7.1, and will settle any remaining portion as
soon as practicable after such dispute is finally resolved but in any event
within the time period permitted under Section 409A of the Internal Revenue
Code.

7.2 Payment of Final Award Determined by Section 6. If a Final Award is deemed
to be made pursuant to Section 6 rather than determined by the Committee
pursuant to Section 5.2, the Final Award is fully vested as of the date of the
Change of Control. The number of Share Units in the Final Award will be
calculated as of the date of the Change of Control once the final data necessary
for the award determination is available, and the Final Award will be paid at
the time and in the form set forth below.

 

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(a) Timing. Payment of the Final Award will be made by PNC at the time set forth
in subsection (a)(1) of this Section 7.2 unless payment at such time would be a
noncompliant payment under Section 409A of the Internal Revenue Code, and
otherwise, at the time set forth in subsection (a)(2) of this Section 7.2, in
either case as further described below.

(1) If, under the circumstances, the Change of Control is a permissible payment
event under Section 409A of the Internal Revenue Code, payment of the Final
Award will be made in cash as soon as practicable after the date the Change of
Control occurs and the amount of the Final Award is determinable and determined
in accordance with Section 6, but in no event later than December 31st of the
calendar year in which the Change of Control occurs or, if later, by the 15th
day of the third calendar month following the date on which the Change of
Control occurs, other than in unusual circumstances where a further delay
thereafter would be permitted under Section 409A of the Internal Revenue Code,
and if such a delay is permissible, as soon as practicable within such limits.

(2) If, under the circumstances, payment at the time of the Change of Control
would not comply with Section 409A of the Internal Revenue Code, then payment
will be made in cash as soon as practicable after January 1, 2012, but in no
event later than December 31, 2012.

(b) Form of Payment. The Final Award will be paid in cash.

If, under the circumstances, the Change of Control is a permissible payment
event under Section 409A of the Internal Revenue Code and payment of the Final
Award is made at the time specified in Section 7.2(a)(1), then the Final Award
will be in an amount equal to the base amount described below in subsection
(A) of this Section 7.2(b).

If, under the circumstances, payment at the time of the Change of Control would
not comply with Section 409A of the Internal Revenue Code and payment of the
Final Award is made at the time specified in Section 7.2(a)(2), then the Final
Award will be in an amount equal to the base amount described below in
subsection (A) of this Section 7.2(b) plus the phantom investment amount
described below in subsection (B) of this Section 7.2(b).

(A) The base amount will be an amount equal to the number of Share Units
specified in the Final Award multiplied by the Fair Market Value (as defined in
Section 14.20) of a share of PNC common stock on the date of the Change of
Control or as otherwise provided in Section 8 if applicable.

(B) The phantom investment amount will be either (i) or (ii), whichever is
larger: (i) interest on the base amount described in Section 7.2(b)(A) from the
date of the Change of Control through the payment date at the short-term,
mid-term or long-term Federal rate under Internal Revenue Code Section 1274
(b)(2)(B), as applicable depending on the term until payment, compounded
semi-annually; or (ii) a phantom

 

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investment amount with respect to said base amount that reflects, if positive,
the performance of the PNC stock or other consideration received by a PNC common
shareholder in the Change of Control transaction, with dividends reinvested in
such stock, from the date of the Change of Control through the payment date. PNC
may, at its option, provide other phantom investment alternatives in addition to
those referenced in the preceding sentence and may permit Grantee to make a
phantom investment election from among such alternatives under and in accordance
with procedures established by PNC, but any such alternatives must provide for
at least the two phantom investments set forth in Section 7.2(b)(B)(i) and
(ii) at a minimum. The phantom investment amount will be applicable only in the
event that payment at the time of the Change of Control would not comply with
Section 409A of the Internal Revenue Code and thus payment is made at the time
specified in Section 7.2(a)(2) rather than at the time specified in
Section 7.2(a)(1).

(c) Disputes. If there is a dispute regarding payment of the Final Award, PNC
will settle the undisputed portion of the award, if any, within the time frame
set forth in the applicable subsection of Section 7.2(a), and will settle any
remaining portion as soon as practicable after such dispute is finally resolved
but in any event within the time period permitted under Section 409A of the
Internal Revenue Code.

7.3 Final Award Fully Vested. The Final Award, if any, will be fully vested at
the Committee-determined Award Date or as of the date of the Change of Control,
as applicable. PNC will deliver any cash payable pursuant to this Section 7 to,
or at the proper direction of, Grantee or Grantee’s legal representative, as
determined in good faith by the Committee, at the time specified in the
applicable subsection of Section 7.1 or Section 7.2, whichever is applicable.

In the event that Grantee is deceased, payment will be delivered to the executor
or administrator of Grantee’s estate or to Grantee’s other legal representative,
as determined in good faith by the Committee.

7.4 Termination of Grant as to Any Unawarded Performance Units. Once an award
determination has been made by the Committee pursuant to Section 5.2 or a Final
Award is deemed to have been made by virtue of the application of Section 6, the
Share-denominated incentive award opportunity represented by this Grant of
Performance Units will terminate as to any portion of the Performance Units not
so awarded.

Termination of all or a portion of the Grant pursuant to this Section 7.4, or
pursuant to Section 4, if applicable, will in no way affect Grantee’s covenants
or the other provisions of Sections 15 and 16.

8. Capital Adjustments.

8.1 Except as otherwise provided in Section 8.2, if applicable, in the event
that a corporate transaction or transactions (including, without limitation,
stock dividends, stock splits, spin-offs, split-offs, recapitalizations,
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reorganizations of or by PNC (each, a “Corporate Transaction”)) occur prior to
the time a Final Award, if any, is paid, the Committee shall make those
adjustments, if any, in the number, class or kind of the Target Share Units that
it deems appropriate in its discretion to reflect the Corporate Transaction(s)
such that the rights of Grantee are neither enlarged nor diminished as a result
of such Corporate Transaction or Transactions, including without limitation
measuring the value per Share Unit of any share-denominated award authorized for
payment to Grantee by reference to the per share value of the consideration
payable to a PNC common shareholder in connection with such Corporate
Transaction or Transactions.

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 Grantee.

8.2 Upon the occurrence of a Change of Control, (a) the number, class and kind
of the Target Share Units will automatically be adjusted to reflect the same
changes as are made to outstanding shares of PNC common stock generally, and
(b) the value per Share Unit to be used in calculating the base amount described
in Section 7.2(b) of any award that is deemed to be awarded to Grantee in
accordance with Section 6 will be measured by reference to the per share value
of the consideration payable to a PNC common shareholder in connection with such
Corporate Transaction or Transactions.

9. Prohibitions Against Sale, Assignment, etc.; Payment to Legal Representative.

(a) The Grant of Performance Units made hereunder may not be sold, assigned,
transferred, exchanged, pledged, hypothecated or otherwise encumbered.

(b) If Grantee is deceased at the time any Final Award authorized by this
Agreement is to be paid, such payment shall be made to the executor or
administrator of Grantee’s estate or to Grantee’s other legal representative as
determined in good faith by the Committee.

(c) Any payment made in good faith by PNC to Grantee’s executor, administrator
or other legal representative shall extinguish all right to payment hereunder.

10. Withholding Taxes; Payment Upon Inclusion Under Section 409A.

Where Grantee has not previously satisfied all applicable withholding tax
obligations, PNC will, at the time the tax withholding obligation arises in
connection herewith, retain an amount sufficient to satisfy the minimum amount
of taxes then required to be withheld by the Corporation in connection therewith
from any Final Award then payable to Grantee. If any withholding is required
prior to the time amounts are payable to Grantee hereunder, the withholding will
be taken from other compensation then payable to Grantee or as otherwise
determined by PNC.

 

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If Grantee desires to have an additional amount withheld above the required
minimum, up to Grantee’s W-4 obligation if higher, and if PNC so permits,
Grantee may elect to satisfy this additional withholding by payment of cash. If
Grantee’s W-4 obligation does not exceed the required minimum withholding in
connection with the Final Award, no additional withholding may be made.

It is the intention of the parties that the Grant and the Agreement comply with
the provisions of Section 409A to the extent, if any, that such provisions are
applicable to the Agreement. In the event that, notwithstanding such intention,
the arrangement fails to meet the requirements of Section 409A and the
regulations promulgated thereunder, then PNC may at that time permit the
acceleration of the time for payment to Grantee under the Agreement
notwithstanding any of the other provisions of the Agreement, but any such
accelerated payment may not exceed the amount required to be included in
Grantee’s income as a result of the failure to comply with the requirements of
Section 409A and the regulations promulgated thereunder. For purposes of this
provision, an amount will be deemed to have been included in Grantee’s income if
the amount is timely reported on Form W-2 or Form 1099-MISC, as appropriate.

11. Employment. Neither the Grant of Performance Units nor the calculation,
determination and payment of any Final Award hereunder nor any term or provision
of the Agreement shall constitute or be evidence of any understanding, expressed
or implied, on the part of PNC or any subsidiary to employ Grantee for any
period or in any way alter Grantee’s status as an employee at will.

12. Subject to the Plan and the Committee. In all respects the Grant and the
Agreement are subject to the terms and conditions of the Plan, which has been
made available to Grantee and is incorporated herein by reference; provided,
however, the terms of the Plan shall not be considered an enlargement of any
benefits under the Agreement. Further, the Grant and the Agreement are subject
to any interpretation of, and any rules and regulations issued by, the Committee
or its delegate or under the authority of the Committee, whether made or issued
before or after the Grant Date.

13. Headings; Entire Agreement. Headings used in the Agreement are provided for
reference and convenience only, shall not be considered part of the Agreement,
and shall not be employed in the construction of the Agreement.

The Agreement constitutes the entire agreement between Grantee and PNC, and
supersedes all other discussions, negotiations, correspondence, representations,
understandings and agreements between the parties, with respect to the subject
matter hereof.

14. Certain Definitions. Except where the context otherwise indicates, the
following definitions apply for purposes of the Agreement.

14.1 “A&L Unit” means the Asset & Liability unit of PNC.

 

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14.2 “Annual Potential Payout Percentage.” The Annual Potential Payout
Percentage for a given full covered year within the Performance Period (i.e.,
for 2009, 2010 or 2011) is the percentage determined in accordance with the
Annual Potential Payout Calculation Schedule applicable for that year on the
basis of the level of financial return from investing activities achieved by the
A&L Unit compared to applicable Benchmark Performance Index for that year,
rounded to the nearest one-hundredth percent.

Where the Agreement requires the calculation of an Annual Potential Payout
Percentage for a given period that is less than a full year (sometimes referred
to as a “partial year” or a “limited year” or “limited period”), then the Annual
Potential Payout Percentage for that covered period is sometimes referred to as
a “Limited-Year Annual Potential Payout Percentage”.

A “Limited-Year Annual Potential Payout Percentage” will be calculated in the
same manner as the Annual Potential Payout Percentage for a full covered year
except that it will be based on the level of financial return from investing
activities achieved by the A&L Unit compared to applicable Benchmark Performance
Index for the year-to-date period (using full quarters only) beginning on
January 1 of the given partial year and ending on the performance measurement
date specified by the Agreement.

14.3 “Annual Potential Payout Calculation Schedule” or “Schedule” for a given
full or partial covered year means the schedule established by the Committee
with respect to this Grant as applicable for that year and setting forth the
method by which the Annual Potential Payout Percentage will be calculated for
that full covered year on the basis of the level of financial return from
investing activities achieved by the A&L Unit compared to applicable Benchmark
Performance Index for that year. The Limited-Year Annual Potential Payout
Percentage will be calculated for that partial covered year, if a partial or
limited year calculation is required by the Agreement, on the basis of the level
of financial return from investing activities achieved by the A&L Unit compared
to applicable Benchmark Performance Index for the year-to-date period (using
full quarters only) beginning on January 1 of that partial year and ending on
the performance measurement date specified by the Agreement.

14.4 “Anticipatory Termination”. If Grantee’s employment with the Corporation is
terminated by the Corporation other than for Cause (as defined in
Section 14.9(a)), death or Disability prior to the date on which a Change of
Control occurs, and if it is reasonably demonstrated by Grantee that such
termination of employment (i) was at the request of a third party that has taken
steps reasonably calculated to effect a Change of Control or (ii) otherwise
arose in connection with or anticipation of a Change of Control, such a
termination of employment is an “Anticipatory Termination.”

14.5 “Award Date” means: (1) the date on which the Committee makes its
determination as to whether or not it will authorize an award, and if so, as to
the size of the Final Award, if any, it authorizes pursuant to Section 5.2
within the permitted

 

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Calculated Maximum Potential Payout Amount determined in accordance with the
Agreement (sometimes referred to as the “Committee-determined Award Date”); or
(2) if a Change of Control has occurred and Grantee is deemed to have been
awarded a Final Award pursuant to Section 6, the Award Date will be the date the
Change of Control occurs (sometimes referred to as the
“Change-of-Control-determined Award Date”).

14.6 “Benchmark Performance Index”. The Benchmark Performance Index for each
year in the Performance Period will be the same benchmark performance index that
PNC uses internally to evaluate the investment performance of the A&L Unit as in
effect as of March 30 of that year, so that, for example, 2009 performance will
be compared to PNC’s internal performance benchmark index for the A&L Unit in
effect on March 30, 2009, 2010 performance will be compared to PNC’s internal
performance benchmark index for the A&L Unit in effect on March 30, 2010, etc.

Where the Agreement requires the measurement of performance for a given period
that is less than a full year, then the applicable Benchmark Performance Index
for that limited period will be the benchmark performance index that PNC uses
internally to evaluate the investment performance of the A&L Unit as in effect
as of March 30 of the calendar year in which the limited period occurs.

14.7 “Board” means the Board of Directors of PNC.

14.8 “Calculated Maximum Potential Payout Amount” means the maximum size of the
award, denominated as a specified number of Share Units, that the Committee may
award to Grantee based on the degree to which the specified corporate
Performance Criteria have been achieved by the A&L Unit and the applicable
Annual Potential Payout Calculation Schedule(s) established by the Committee and
on Grantee’s level of satisfaction, or deemed satisfaction, of the service
requirements set forth in Section 4, including any limitations on the maximum
potential payout amount that may apply in the circumstances (e.g., in the case
of a qualifying Retirement).

14.9 “Cause”.

(a) “Cause” during a Change of Control Coverage Period or after the occurrence
of a Change of Control (or for purposes of the definition of an Anticipatory
Termination). If a termination of Grantee’s employment with the Corporation
occurs during a Change of Control Coverage Period or within three (3) years
after the occurrence of a Change of Control, then “Cause” means:

(i) the willful and continued failure of Grantee to substantially perform
Grantee’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 Grantee by the Board or the CEO which
specifically identifies the manner in which the Board or the CEO believes that
Grantee has not substantially performed Grantee’s duties; or

 

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(ii) the willful engaging by Grantee 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 Grantee, shall be considered willful unless it is done, or omitted
to be done, by Grantee in bad faith and without reasonable belief that Grantee’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 Grantee’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 Grantee in good faith and in the best interests of the Corporation.

The cessation of employment of Grantee will be deemed to be a termination of
Grantee’s employment with the Corporation for Cause for purposes of the
Agreement only if and when there shall have been delivered to Grantee, as part
of the notice of Grantee’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, Grantee is guilty of conduct described in
clause (i) or clause (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 Grantee, together with written
notice that PNC believes that Grantee is guilty of conduct described in clause
(i) or clause (ii) above and, in either case, specifying the particulars thereof
in detail, and (2) Grantee is given an opportunity, together with counsel, to be
heard before the Board.

“Cause” shall also have the meaning set forth in this Section 14.9(a) for
purposes of the definition of Anticipatory Termination in Section 14.4.

(b) “Cause” other than as provided in Subsection (a). Except as otherwise
provided in Section 14.9(a), “Cause” means:

(i) the willful and continued failure of Grantee to substantially perform
Grantee’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 Grantee by PNC that specifically
identifies the manner in which it is believed that Grantee has not substantially
performed Grantee’s duties;

(ii) a material breach by Grantee of (1) any code of conduct of PNC or any code
of conduct of a subsidiary of PNC that is applicable to Grantee or (2) other
written policy of PNC or other written policy of a subsidiary of PNC that is
applicable to Grantee, 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 Grantee against PNC or any of its subsidiaries or any client or customer of
PNC or any of its subsidiaries;

 

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(iv) any conviction (including a plea of guilty or of nolo contendere) of
Grantee for, or entry by Grantee into a pre-trial disposition with respect to,
the commission of a felony; or

(v) entry of any order against Grantee, 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 Grantee’s employment or other
service relationship with the Corporation.

The cessation of employment of Grantee will be deemed to have been a termination
of Grantee’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 Grantee is the
CEO, the Board) determines that Grantee 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 Grantee and, if so, determines that the termination
of Grantee’s employment with the Corporation will be deemed to have been for
Cause.

14.10 “CEO” means the chief executive officer of PNC.

14.11 “Change of Control” means:

(a) Any individual, entity or group (within the meaning of Section 13(d)(3) or
14(d)(2) of the Securities Exchange Act of 1934, as amended (the “Exchange
Act”)) (a “Person”) becomes the beneficial owner (within the meaning of Rule
13d-3 promulgated under the Exchange Act) of 20% or more of either (A) the
then-outstanding shares of common stock of PNC (the “Outstanding PNC Common
Stock”) or (B) the combined voting power of the then-outstanding voting
securities of PNC entitled to vote generally in the election of directors (the
“Outstanding PNC Voting Securities”); provided, however, that, for purposes of
this Section 14.11(a), the following acquisitions shall not constitute a Change
of Control: (1) any acquisition directly from PNC, (2) any acquisition by PNC,
(3) any acquisition by any employee benefit plan (or related trust) sponsored or
maintained by PNC or any company controlled by, controlling or under common
control with PNC (an “Affiliated Company”), (4) any acquisition pursuant to an
Excluded Combination (as defined in Section 14.11(c)) or (5) an acquisition of
beneficial ownership representing between 20% and 40%, inclusive, of the
Outstanding PNC Voting Securities or Outstanding PNC Common Stock shall not be
considered a Change of Control if the Incumbent Board as of immediately prior to
any such acquisition approves such acquisition either prior to or immediately
after its occurrence;

(b) Individuals who, as of the date hereof, constitute the Board (the “Incumbent
Board”) cease for any reason to constitute at least a majority of the Board
(excluding any Board seat that is vacant or otherwise unoccupied); provided,
however, that any individual becoming a director subsequent to the date hereof
whose election, or nomination for election by PNC’s shareholders, was approved
by a vote of at least two-thirds of the directors then comprising the Incumbent
Board shall be considered as

 

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though such individual was a member of the Incumbent Board, but excluding, for
this purpose, any such individual whose initial assumption of office occurs as a
result of an actual or threatened election contest with respect to the election
or removal of directors or other actual or threatened solicitation of proxies or
consents by or on behalf of a Person other than the Board;

(c) Consummation of a reorganization, merger, statutory share exchange or
consolidation or similar transaction involving PNC or any of its subsidiaries, a
sale or other disposition of all or substantially all of the assets of PNC, or
the acquisition of assets or stock of another entity by PNC or any of its
subsidiaries (each, a “Business Combination”), excluding, however, a Business
Combination following which all or substantially all of the individuals and
entities that were the beneficial owners of the Outstanding PNC Common Stock and
the Outstanding PNC Voting Securities immediately prior to such Business
Combination beneficially own, directly or indirectly, more than 60% of the
then-outstanding shares of common stock (or, for a non-corporate entity,
equivalent securities) and the combined voting power of the then-outstanding
voting securities entitled to vote generally in the election of directors (or,
for a non-corporate entity, equivalent governing body), as the case may be, of
the entity resulting from such Business Combination (including, without
limitation, an entity that, as a result of such transaction, owns PNC or all or
substantially all of PNC’s assets either directly or through one or more
subsidiaries) in substantially the same proportions as their ownership
immediately prior to such Business Combination of the Outstanding PNC Common
Stock and the Outstanding PNC Voting Securities, as the case may be (such a
Business Combination, an “Excluded Combination”); or

(d) Approval by the shareholders of PNC of a complete liquidation or dissolution
of PNC.

14.12 “Change of Control Coverage Period” means a period commencing on the
occurrence of a Change of Control Triggering Event and ending upon the earlier
to occur of (a) the date of a Change of Control Failure and (b) the date of a
Change of Control. After the termination of any Change of Control Coverage
Period, another Change of Control Coverage Period will commence upon the
occurrence of another Change of Control Triggering Event.

For purposes of this Agreement, “Change of Control Triggering Event” shall mean
the occurrence of either of the following: (i) the Board or PNC’s shareholders
approve a transaction described in Subsection (c) of the definition of Change of
Control contained in Section 14.11; or (ii) the commencement of a proxy contest
in which any Person seeks to replace or remove a majority of the members of the
Board.

For purposes of this Agreement, “Change of Control Failure” shall mean: (x) with
respect to a Change of Control Triggering Event described in clause (i) of the
definition above, PNC’s shareholders vote against the transaction approved by
the Board or the agreement to consummate the transaction is terminated; or
(y) with respect to a Change of Control Triggering Event described in clause
(ii) of the definition above, the proxy contest fails to replace or remove a
majority of the members of the Board.

 

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14.13 “Change of Control Payout Percentage” has the meaning set forth in
Section 6.1(a)(iv).

14.14 “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.

14.15 “Competitive Activity” means 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
(a) engaged in business activities similar to some or all of the business
activities of PNC or any subsidiary as of Grantee’s Termination Date or
(b) engaged in business activities which Grantee knows PNC or any subsidiary
intends to enter within the first twelve (12) months after Grantee’s Termination
Date or, if later and if applicable, after the date specified in clause (ii) of
Section 14.18(a), in either case whether Grantee is acting as agent, consultant,
independent contractor, employee, officer, director, investor, partner,
shareholder, proprietor or in any other individual or representative capacity
therein.

14.16 “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.

14.17 “Corporation” means PNC and its Consolidated Subsidiaries.

14.18 “Detrimental Conduct” means:

(a) Grantee 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 Grantee’s
Termination Date and extending through (and including) the first
(1st) anniversary of the later of (i) Grantee’s Termination Date and, if
different, (ii) the first date after Grantee’s Termination Date as of which
Grantee ceases to be engaged by the Corporation in any capacity for which
Grantee 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 Grantee 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 Grantee
for, or any entry by Grantee into a pre-trial disposition with respect to, the
commission of a felony that relates to or arises out of Grantee’s employment or
other service relationship with the Corporation.

 

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Grantee will be deemed to have engaged in Detrimental Conduct for purposes of
the Agreement only if and when the Committee or its delegate (if Grantee was an
“executive officer” of PNC as defined in SEC Regulation S-K when he ceased to be
an employee of the Corporation) or the CEO (if Grantee was not such an executive
officer) determines that Grantee 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 Grantee and, if so, determines that Grantee will be
deemed to have engaged in Detrimental Conduct.

14.19 “Disabled” or “Disability” means, except as may otherwise be required by
Section 409A, that Grantee either (i) is unable to engage in any substantial
gainful activity by reason of any medically determinable physical or mental
impairment that can be expected to result in death or can be expected to last
for a continuous period of not less than 12 months, or (ii) is, by reason of any
medically determinable physical or mental impairment that can be expected to
result in death or can be expected to last for a continuous period of not less
than 12 months, receiving (and has received for at least three months) income
replacement benefits under any Corporation-sponsored disability benefit plan. If
Grantee has been determined to be eligible for Social Security disability
benefits, Grantee shall be presumed to be Disabled as defined herein.

14.20 “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.

14.21 “Final Award” means the amount, if any, (a) awarded to Grantee by the
Committee in accordance with Section 5.2, or (b) deemed to be awarded to Grantee
pursuant to Section 6. The Final Award will be denominated as a specified number
of Share Units and will be payable in cash in accordance with Section 7.

14.22 “Final Potential Payout Percentage.”

Where a Final Award determination is made pursuant to Section 5, the term “Final
Potential Payout Percentage” will have the meaning set forth in (a) or
(b) below, whichever is applicable in the circumstances.

(a) Where the Performance Period specified by the applicable section of the
Agreement is the full three-year period commencing January 1, 2009 through and
including December 31, 2011, then the Final Potential Payout Percentage will be
the percentage that is the average (but in no event greater than 200%) of the
Annual Potential Payout Percentages for the three full covered years in the
Performance Period (i.e., one-third ( 1/3rd) of the sum of the annual
percentages for the full years 2009, 2010 and 2011). If all of the Annual
Potential Payout Percentages are 0%, then the Final Potential Payout Percentage
will be 0%.

 

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(b) Where the applicable performance measurement date specified by the Agreement
is a quarter-end or year-end date other than December 31, 2011, then the Final
Potential Payout Percentage will be a Limited-Period Final Potential Payout
Percentage and will be calculated as set forth in Section 14.29.

Where a Final Award is deemed to be awarded pursuant to Section 6 by reason of
the occurrence of a Change of Control, the payout calculation will be as set
forth in the applicable subsection of Section 6.

14.23 “GAAP” or “generally accepted accounting principles” means accounting
principles generally accepted in the United States of America.

14.24 “Good Reason” means:

(a) (i) the assignment to Grantee of any duties inconsistent in any respect
with, or any other diminution in, Grantee’s position (including status, offices,
titles and reporting requirements), authority, duties or responsibilities such
that Grantee’s position, authority, duties or responsibilities are not at least
commensurate in all material respects with the most significant of those held,
exercised and assigned to Grantee at any time during the 120-day period
immediately preceding the Change of Control, or if a Change of Control has not
yet occurred but there has been a Change of Control Triggering Event, (ii) the
assignment to Grantee of any duties inconsistent in any material respect with,
or any other material diminution in, Grantee’s position (including status,
offices, titles and reporting requirements), authority, duties or
responsibilities immediately prior to the Change of Control Triggering Event,
excluding in either case for this purpose an isolated, insubstantial and
inadvertent action not taken in bad faith and that is remedied by the
Corporation promptly after receipt of notice thereof given by Grantee;

(b) a reduction by the Corporation in Grantee’s annual base salary to an annual
rate (i) that is less than 12 times the highest monthly base salary paid or
payable, including any base salary that has been earned but deferred, to Grantee
by the Corporation in respect of the 12-month period immediately preceding the
month in which the Change of Control occurs or, if a Change of Control has not
yet occurred but there has been a Change of Control Triggering Event, (ii) that
is less than 12 times the monthly base salary paid or payable, including any
base salary that has been earned but deferred, to Grantee by the Corporation in
respect of the month immediately preceding the month in which the Change of
Control Triggering Event occurs;

(c) the Corporation’s requiring Grantee to be based at any office or location
that is more than fifty (50) miles from Grantee’s office or location immediately
prior to either the Change of Control Triggering Event or the Change of Control;

(d) other than an isolated, insubstantial and inadvertent failure not occurring
in bad faith and that is remedied by the Corporation promptly after receipt of
notice

 

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thereof given by Grantee, the failure by the Corporation to continue Grantee’s
participation in annual bonus, long-term cash incentive, equity incentive,
savings and retirement plans, practices, policies and programs that provide
Grantee with annual bonus opportunities, long-term incentive opportunities
(measured with respect to both regular and special incentive opportunities, to
the extent, if any, that such distinction is applicable), savings opportunities
and retirement benefit opportunities, in each case, no less favorable, in the
aggregate, than the most favorable of those provided by the Corporation for
Grantee under such plans, practices, policies and programs as in effect (i) at
any time during the 120-day period immediately preceding the Change of Control,
or if a Change of Control has not yet occurred but there has been a Change of
Control Triggering Event, (ii) immediately prior to the Change of Control
Triggering Event; or

(e) other than an isolated, insubstantial and inadvertent failure not occurring
in bad faith and that is remedied by the Corporation promptly after receipt of
notice thereof given by Grantee, the failure by the Corporation to continue to
provide Grantee with benefits under welfare benefit plans, practices, policies
and programs provided by the Corporation (including, without limitation,
medical, prescription, dental, vision, disability, employee life, group life,
accidental death and travel accident insurance plans and programs) no less
favorable, in the aggregate, than those provided to Grantee under the most
favorable of such plans, practices, policies and programs in effect for Grantee
(i) at any time during the 120-day period immediately preceding the Change of
Control, or if a Change of Control has not yet occurred but there has been a
Change of Control Triggering Event, (ii) immediately prior to the Change of
Control Triggering Event.

14.25 “Grant” means the grant to Grantee pursuant to the Plan and evidenced by
the Agreement of a Share-denominated incentive award opportunity of Performance
Units with the number of Target Share Units specified in the Agreement, subject
to the corporate performance conditions, employment conditions, and other terms
and conditions of the Agreement and to the Plan.

14.26 “Grant Date” means the Grant Date set forth on page 1 of the Agreement,
and is the date as of which the Committee authorized the Grant of the
Performance Units in accordance with the Plan.

14.27 “Grantee” means the person to whom the Grant is made, and is identified as
Grantee on page 1 of the Agreement.

14.28 “Internal Revenue Code” means the Internal Revenue Code of 1986 as
amended, and the rules and regulations promulgated thereunder.

14.29 “Limited-Period Final Potential Payout Percentage”. Where the Agreement
requires the calculation of a Limited-Period Final Potential Payout Percentage
and the applicable performance measurement date specified by the Agreement is a
quarter-end date other than December 31 st of 2009 or 2010, and thus the
applicable Performance Period consists of one or more full years and/or a
partial year, then the Limited-Period Final Potential Payout Percentage will be
the percentage that is the

 

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weighted average of the Annual Potential Payout Percentages for the full years,
if any, and the Limited-Year Annual Potential Payout Percentage for the partial
year in the applicable limited Performance Period calculated as follows:

(a) the sum of (i) four times the sum of the Annual Potential Payout Percentages
for the full years in the period, if any, and (ii) the number of full completed
quarters in the partial year of the applicable limited Performance Period, times
the Limited-Year Annual Potential Payout Percentage for that partial year;

divided by

(b) the total number of quarters in the applicable limited Performance Period.

Where the Agreement requires the calculation of a Limited-Period Final Potential
Payout Percentage and the applicable performance measurement date specified by
the Agreement is December 31st of 2009 or 2010 and thus the applicable
Performance Period consists of one or more full years (and no partial years),
then the Limited-Period Final Potential Payout Percentage will be the percentage
that is the average (but in no event greater than 200%) of the Annual Potential
Payout Percentages for the covered years in the Performance Period (e.g.,
one-half ( 1 /2) of the sum of the two annual percentages if the applicable
Performance Period is limited to the full years 2009 and 2010). If all of the
Annual Potential Payout Percentages are 0%, then the Limited-Period Final
Potential Payout Percentage will be 0%.

14.30 “Limited-Year Annual Potential Payout Percentage” has the meaning set
forth in the last two paragraphs of the definition of Annual Potential Payout
Percentage in Section 14.2.

14.31 “Performance Criteria” means the corporate performance standards
established by the Committee as the performance criteria for the Performance
Units as set forth in Section 3.1.

14.32 “Performance measurement date” has the meaning set forth in Section 5.1
and refers to the last day of the relevant performance measurement period.

14.33 “Performance Period” means the period during which corporate performance
will be measured against the performance standards established by the Committee
in accordance with the Agreement. The Performance Period will be the period
commencing January 1, 2009 through (and including) the applicable performance
measurement date specified in the Agreement.

Subject to early termination or limitation where so indicated in the Agreement
by specifying an earlier performance measurement date, the performance
measurement date will be December 31, 2011 and the Performance Period will be
the period commencing January 1, 2009 through (and including) December 31, 2011.

 

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If the Performance Period is terminated early or limited pursuant to the terms
of the Agreement, it is sometimes referred to as the “limited performance
period”. The three full years in the full Performance Period (2009, 2010 and
2011), or, if applicable, the full and partial years in the limited performance
period, are sometimes referred to as “covered years”.

14.34 “Performance Units” means the Share-denominated incentive award
opportunity performance units granted to Grantee in accordance with Article 10.3
of the Plan and evidenced by the Agreement.

14.35 “Plan” means The PNC Financial Services Group, Inc. 2006 Incentive Award
Plan as amended from time to time.

14.36 “PNC” means The PNC Financial Services Group, Inc.

14.37 “Prorate” or “Prorated” means multiplying by a fraction, sometimes
referred to as the “proration factor”, not to exceed 1 and determined as
follows.

If the Agreement specifies “prorating by years”, the proration factor is the
fraction equal to (a) the number of full years in the applicable Performance
Period, (b) divided by three, which is the number of years in the full 3-year
period from January 1, 2009 through December 31, 2011.

If the Agreement specifies “prorating by quarters”, the proration factor is the
fraction equal to (a) the number of full quarters in the applicable Performance
Period, (b) divided by twelve, which is the number of quarters in the full
3-year period from January 1, 2009 through December 31, 2011.

14.38 “Retiree”. Grantee is sometimes referred to as a “Retiree” if Grantee
Retires, as defined in Section 14.39.

14.39 “Retires” or “Retirement”. Grantee “Retires” if his employment with the
Corporation terminates at any time and for any reason (other than termination by
reason of Grantee’s death or by the Corporation for Cause and, if the Committee
or the CEO so determines prior to such divestiture, other than by reason of
termination in connection with a divestiture of assets or a divestiture of one
or more subsidiaries of the Corporation) on or after the first date on which
Grantee has both attained at least age fifty-five (55) and completed 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 calculated under the
provisions of The PNC Financial Services Group, Inc. Pension Plan. If Grantee
“Retires” as defined herein, the termination of Grantee’s employment with the
Corporation is sometimes referred to as “Retirement”.

14.40 “Schedule” means the Annual Potential Payout Calculation Schedule(s)
established by the Committee with respect to this Grant, as described in
Section 14.3.

 

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14.41 “SEC” means the United States Securities and Exchange Commission.

14.42 “Section 409A” means Section 409A of the Internal Revenue Code.

14.43 “Share” means a share of PNC common stock.

14.44 “Target Share Units” means the number of Share Units specified on page 1
of the Agreement as Target Share Units, subject to capital adjustments pursuant
to Section 8 if any.

14.45 “Termination Date” means Grantee’s last date of employment with the
Corporation. If Grantee 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 Grantee does not continue to be
employed by PNC or a Consolidated Subsidiary, then for purposes of the
Agreement, Grantee’s employment with the Corporation terminates effective at the
time this occurs.

15. Grantee Covenants.

15.1 General. Grantee and PNC acknowledge and agree that Grantee has received
adequate consideration with respect to enforcement of the provisions of
Sections 15 and 16 by virtue of receiving this Grant of an award opportunity of
Performance Units (regardless of whether a Final Award is ultimately determined
and paid or of the size of such Final Award, if any); 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 Grantee from earning a living.

15.2 Non-Solicitation; No-Hire. Grantee agrees to comply with the provisions of
subsections (a) and (b) of this Section 15.2 while employed by the Corporation
and for a period of one year after Grantee’s Termination Date regardless of the
reason for such termination of employment.

(a) Non-Solicitation. Grantee shall not, directly or indirectly, either for
Grantee’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 Grantee 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. Grantee shall not, directly or indirectly, either for Grantee’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
Grantee assist any other Person in such activities.

 

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Notwithstanding the above, if Grantee’s employment with the Corporation is
terminated by the Corporation and such termination is an Anticipatory
Termination, then commencing immediately after such Termination Date, the
provisions of subsections (a) and (b) of this Section 15.2 shall no longer apply
and will be replaced with the following subsection (c):

(c) No-Hire. Grantee agrees that Grantee shall not, for a period of one year
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.

15.3 Confidentiality. During Grantee’s employment with the Corporation, and
thereafter regardless of the reason for termination of such employment, Grantee
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 Grantee, 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.

15.4 Ownership of Inventions. Grantee 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 Grantee during the term of Grantee’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”). Grantee
agrees to assign and hereby does assign to PNC or its designee all of Grantee’s
right, title and interest, including copyrights and patent rights, in and to all
Developments. Grantee 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 15.4
shall be performed by Grantee without further compensation and will continue
beyond Grantee’s Termination Date.

16. Enforcement Provisions. Grantee understands and agrees to the following
provisions regarding enforcement of the Agreement.

16.1 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
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the Western District of Pennsylvania or in the Court of Common Pleas of
Allegheny County, Pennsylvania. By execution of the Agreement, Grantee 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.

16.2 Equitable Remedies. A breach of the provisions of any of Sections 15.2,
15.3 or 15.4 will cause the Corporation irreparable harm, and the Corporation
will therefore be entitled to issuance of immediate, as well as permanent,
injunctive relief restraining Grantee, and each and every person and entity
acting in concert or participating with Grantee, from initiation and/or
continuation of such breach.

16.3 Tolling Period. If it becomes necessary or desirable for the Corporation to
seek compliance with the provisions of Section 15.2 by legal proceedings, the
period during which Grantee 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.

16.4 No Waiver. Failure of PNC to demand strict compliance with any of the
terms, covenants or conditions of the Agreement will not be deemed a waiver of
such term, covenant or condition, nor will 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.

16.5 Severability. The restrictions and obligations imposed by Sections 15.2,
15.3 and 15.4 are separate and severable, and it is the intent of Grantee 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 will remain
valid and binding upon Grantee.

16.6 Reform. In the event any of Sections 15.2, 15.3 and 15.4 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 Grantee and PNC that said court reduce and reform the provisions
thereof so as to apply the greatest limitations considered enforceable by the
court.

16.7 Waiver of Jury Trial. Each of Grantee 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 15.2, 15.3 and 15.4.

16.8 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 Grantee, Grantee agrees to reimburse PNC for
any amounts Grantee may be required

 

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to reimburse PNC or its subsidiaries 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 Grantee reimburse PNC or its subsidiaries for such amounts pursuant to
Section 304 of the Sarbanes-Oxley Act of 2002.

16.9. Compliance with Internal Revenue Code Section 409A. It is the intention of
the parties that the Grant 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,
Grantee agrees that PNC may, without the consent of Grantee, modify the
Agreement 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.

17. Acceptance of Grant; PNC Right to Cancel; Effectiveness of Agreement.

If Grantee does not accept the Grant by executing and delivering a copy of the
Agreement to PNC, without altering or changing the terms thereof in any way,
within thirty (30) days of receipt by Grantee of a copy of the Agreement, PNC
may, in its sole discretion, withdraw its offer and cancel the Grant at any time
prior to Grantee’s delivery to PNC of a copy of the Agreement executed by
Grantee. Otherwise, upon execution and delivery of the Agreement by both PNC and
Grantee, the Agreement is effective.

 

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IN WITNESS WHEREOF, PNC has caused the Agreement to be signed on its behalf as
of the Grant Date.

 

THE PNC FINANCIAL SERVICES GROUP, INC.

By:

 

Chairman and Chief Executive Officer

ATTEST:

By:

 

Corporate Secretary

ACCEPTED AND AGREED TO by GRANTEE

 

Grantee

 

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SCHEDULE

*    *    *

ANNUAL POTENTIAL PAYOUT CALCULATION SCHEDULE

FOR

2009 PERFORMANCE UNITS

Final Award determination pursuant to Section 5 of the 2009 Performance Units
Agreement (the “Agreement”) requires the calculation of the Final Potential
Payout Percentage and the Calculated Maximum Potential Payout Amount, each as
defined in the Agreement. Final Award calculation pursuant to Section 6 of the
Agreement, if applicable, requires the calculation of the Change of Control
Payout Percentage and the calculated final award.

Those calculations, in turn, take into account the levels of performance
achieved by the A&L Unit with respect to the Performance Criteria, as measured
annually and expressed as the Annual Potential Payout Percentages for each of
the years and/or shorter partial-year period where required by the Agreement
(e.g., in the case of certain qualifying terminations of employment or change of
control) in the overall Performance Period.

Unless and until amended prospectively by the Committee, this Schedule will be
applied in order to determine the full Annual Potential Payout Percentage for
each full year in the Performance Period and, where applicable, the Limited-Year
Annual Potential Payout Percentage for any partial year period where there is a
limitation of the overall performance period required by the Agreement and such
limited performance period includes a partial year.

This Schedule assigns an Annual Potential Payout Percentage (ranging from 0% up
through 200%) to levels of annual performance relative to the benchmark
performance index as set forth in the following table, with percentages
interpolated for performance between the points indicated on the table, rounded
to the nearest one-hundredth percent (e.g., 0.00%, with 0.005% being rounded
upward to 0.01%). In no event will an Annual Potential Payout Percentage be
greater than 200% or less than 0%.

 

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Annual Performance

Relative to Benchmark

Performance Index

   Annual Potential Payout
Percentage   +40 basis points or higher    200 % +20 basis points    150 %

0 basis points (at benchmark)

to -25 basis points

   100 % -35 basis points    40 % -40 basis points or below    0 %

The annual performance referred to in the table above for a given full year is
the level of financial return from investing activities achieved by the A&L Unit
for that year as compared to the applicable Benchmark Performance Index as
defined by the Agreement for that year. This annual performance is expressed as
the number of basis points by which the specified A&L Unit performance exceeds
or falls short of benchmark index performance, with 0 basis points indicating
performance at the benchmark index level.

Where a Limited-Year Annual Potential Payout Percentage is required by the
Agreement, the “annual performance” referred to in the table above is the level
of financial return from investing activities achieved by the A&L Unit for the
year-to-date period (using full quarters only) beginning on January 1 of the
given partial year and ending on the performance measurement date specified by
the Agreement as compared to the Benchmark Performance Index applicable in
accordance with the Agreement.

Committee Negative Discretion. Once the annual potential payout percentage for
A&L Unit performance achieved for the relevant full year or partial-year period
has been determined by reference to the table above, including interpolation
where required, the Committee may decide, in its discretion, to reduce that
percentage (as long as such decision is not made during a Change of Control
Coverage Period, as defined in the Agreement, or after the occurrence of a
Change of Control) but may not increase it.

 

February 2009

 

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