Exhibit 10.28

 

2005 FORMS OF EMPLOYEE STOCK OPTION, RESTRICTED STOCK

AND RESTRICTED DEFERRAL AGREEMENTS

 

FORM OF STANDARD EMPLOYEE STOCK OPTION AGREEMENT

 

THE PNC FINANCIAL SERVICES GROUP, INC.

1997 LONG-TERM INCENTIVE AWARD PLAN

NONSTATUTORY STOCK OPTION AGREEMENT

 

OPTIONEE:    <Name> GRANT DATE:                        , 200     OPTION PRICE:
   $                      per share COVERED SHARES:    <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 Agreement
(“Agreement”) as defined in the Plan unless otherwise defined in the Agreement
or an Annex thereto. In the 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 Agreement and in the Annexes hereto are for convenience
only and are not part of the Agreement and Annexes.

 

1. Grant of Option. Pursuant to 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.

 

2. Terms of the Option.

 

2.1 Type of Option. The Option is intended to be a Nonstatutory Stock Option
without Rights.

 

2.2 Option Period. 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.

 

To the extent that the Option or relevant portion thereof is outstanding, the
Option will vest as to Covered Shares as set forth in this Section 2.2.

 

(a) Unless the Option has become fully vested pursuant to Section 2.2(b),
2.2(c), 2.2(d) or 2.2(e), the Option will become exercisable (“vest”):

 

(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 Total
and Permanent Disability and not for Cause, the Option will vest as to all
outstanding Covered Shares as to which it has not otherwise vested commencing on
Optionee’s Termination Date.

 

(c) If Optionee’s employment with the Corporation is terminated by reason of
Optionee’s death, the Option will immediately vest as to all outstanding Covered
Shares as to which it has not otherwise vested, and the Option may be exercised
by Optionee’s properly designated beneficiary, by the person or persons entitled
to do so under Optionee’s will, or by the person or persons entitled to do so
under the applicable laws of descent and distribution.

 

(d) If Optionee’s employment with the Corporation is terminated during a
Coverage Period by the Corporation without Cause or by Optionee with Good
Reason, the Option will vest as to all outstanding Covered Shares as to which it
has not otherwise vested commencing on Optionee’s Termination Date.

 

(e) Notwithstanding any other provision of this Section 2.2, to the extent that
the Option is outstanding but not yet fully vested at the time a Change in
Control occurs, the Option will vest as to all then outstanding Covered Shares
as to which it has not otherwise vested, effective as of the day immediately
prior to the occurrence of the Change in Control, provided that, at the time the
Change in Control occurs, Optionee is either (i) an employee of the Corporation
or (ii) a former employee of the Corporation whose unvested Option, or portion
thereof, is then outstanding and continues to qualify for vesting pursuant to
the terms of Section 2.2(a)(i), (ii) and/or (iii).

 

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 Agreement, Optionee’s employment with the Corporation terminates
effective at the time this occurs.

 

2.3 Nontransferability; Designation of Beneficiary. The Option is not
transferable or assignable by Optionee other than by transfer to a properly
designated beneficiary in the event of death, or by will or the laws of descent
and distribution.

 

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.

 

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. In the absence
of a properly designated beneficiary, 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.

 

3. Capital Adjustments. The number and class of Covered Shares as to which the
Option is outstanding and has not yet been exercised and the Option Price will
be subject to such adjustment, if any, as the Committee in its sole discretion
deems appropriate to reflect corporate 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”)), 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.

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All determinations hereunder will be made by the Committee in its sole
discretion and will 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 will
determine the manner in which any fractional shares will be treated.

 

4. Exercise of Option.

 

4.1 Notice and Effective Date. The Option may be exercised, in whole or in part,
by delivering to PNC written notice of such exercise, in such form as PNC may
from time to time prescribe, accompanied by full payment of the aggregate Option
Price with respect to that portion of the 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 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 2.3, 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 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
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
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

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Fair Market Value of the shares of PNC common stock otherwise issuable upon
exercise of the Option but retained pursuant to Section 4.3(b) exceed the
minimum amount of taxes required to be withheld in connection with the Option
exercise.

 

4.4 Effect. The exercise, in whole or in part, of the Option will cause a
reduction in the number of unexercised Covered Shares as to which the Option is
outstanding equal to the number of shares of PNC common stock with respect to
which the Option is exercised.

 

5. Restrictions on Exercise and on Shares Issued on Exercise. Notwithstanding
any other provision of the Agreement, the Option may not be exercised at any
time that PNC does not have in effect a registration statement under the
Securities Act of 1933 as amended relating to the offer of shares of PNC common
stock under the Plan unless PNC agrees to permit such exercise. Upon the
issuance of any shares of PNC common stock pursuant to exercise of the Option at
a time when such a registration statement is not in effect, Optionee will, upon
the request of PNC, agree in writing that Optionee is acquiring such shares for
investment only and not with a view to resale and that Optionee will not sell,
pledge, or otherwise dispose of such shares unless and until (a) PNC is
furnished with an opinion of counsel to the effect that registration of such
shares pursuant to the Securities Act of 1933 as amended is not required by that
Act or by rules and regulations promulgated thereunder, (b) the staff of the SEC
has issued a no-action letter with respect to such disposition, or (c) such
registration or notification as is, in the opinion of counsel for PNC, required
for the lawful disposition of such shares has been filed and has become
effective; provided, however, that PNC is not obligated hereby to file any such
registration or notification. PNC may place a legend embodying such restrictions
on the certificate(s) evidencing such shares.

 

6. Rights as Shareholder. Optionee will have no rights as a shareholder with
respect to any Covered Shares until the Exercise Date and then only with respect
to those shares of PNC common stock issued upon such exercise of the Option and
not retained as provided in Section 4.3.

 

7. Employment. Neither the granting of the Option evidenced by the Agreement nor
any term or provision of the Agreement will constitute or be evidence of any
understanding, expressed or implied, on the part of PNC or any Subsidiary to
employ Optionee for any period.

 

8. Subject to the Plan. The Option evidenced by the Agreement and the exercise
thereof are subject to the terms and conditions of the Plan, which is
incorporated by reference herein and made a part hereof, but the terms of the
Plan will not be considered an enlargement of any benefits under the Agreement.
In addition, the Option is subject to any rules and regulations promulgated by
or under the authority of the Committee.

 

9. Optionee Covenants.

 

9.1 General. Optionee and PNC acknowledge and agree that Optionee has received
adequate consideration with respect to enforcement of the provisions of Sections
9 and 10 hereof, that such provisions are reasonable and properly required for
the adequate protection of the business of the Corporation, and that enforcement
of such provisions will not prevent Optionee from earning a living.

 

9.2 Non-Solicitation; No-Hire. Optionee agrees to comply with the provisions of
subsections (a) and (b) of this Section 9.2 while employed by the Corporation
and for a period of twelve (12) months after Optionee’s Termination Date
regardless of the reason for such termination of employment.

 

(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 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.

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(b) No-Hire. Optionee shall not, directly or indirectly, either for Optionee’s
own benefit or purpose or for the benefit or purpose of any Person other than
PNC or any Subsidiary, employ or offer to employ, call on, or actively interfere
with PNC’s or any Subsidiary’s relationship with, or attempt to divert or entice
away, any employee of the Corporation, nor shall Optionee assist any other
Person in such activities.

 

Notwithstanding the above, if Optionee’s employment with the Corporation is
terminated by the Corporation without Cause or by Optionee with Good Reason and
such Termination Date occurs during a Coverage Period (either as Coverage Period
is defined in Section A.10 of Annex A or, if Optionee was a party to a CIC
Severance Agreement that was in effect at the time of such termination of
employment, as Coverage Period is defined in such CIC Severance Agreement, if
longer), then commencing immediately after such Termination Date, the provisions
of subsections (a) and (b) of this Section 9.2 shall no longer apply and shall
be replaced with the following subsection (c):

 

(c) No-Hire. Optionee agrees that Optionee shall not, for a period of twelve
(12) months after the Termination Date, employ or offer to employ, solicit,
actively interfere with PNC’s or any PNC affiliate’s relationship with, or
attempt to divert or entice away, any officer of PNC or any PNC affiliate.

 

9.3 Confidentiality. During Optionee’s employment with the Corporation, and
thereafter regardless of the reason for termination of such employment, Optionee
will not disclose or use in any way any confidential business or technical
information or trade secret acquired in the course of such employment, all of
which is the exclusive and valuable property of the Corporation whether or not
conceived of or prepared by Optionee, other than (a) information generally known
in the Corporation’s industry or acquired from public sources, (b) as required
in the course of employment by the Corporation, (c) as required by any court,
supervisory authority, administrative agency or applicable law, or (d) with the
prior written consent of PNC.

 

9.4 Ownership of Inventions. Optionee shall promptly and fully disclose to PNC
any and all inventions, discoveries, improvements, ideas or other works of
inventorship or authorship, whether or not patentable, that have been or will be
conceived and/or reduced to practice by Optionee during the term of Optionee’s
employment with the Corporation, whether alone or with others, and that are (a)
related directly or indirectly to the business or activities of PNC or any
Subsidiary or (b) developed with the use of any time, material, facilities or
other resources of PNC or any Subsidiary (“Developments”). Optionee agrees to
assign and hereby does assign to PNC or its designee all of Optionee’s right,
title and interest, including copyrights and patent rights, in and to all
Developments. Optionee shall perform all actions and execute all instruments
that PNC or any Subsidiary shall deem necessary to protect or record PNC’s or
its designee’s interests in the Developments. The obligations of this Section
9.4 shall be performed by Optionee without further compensation and shall
continue beyond the Termination Date.

 

10. Enforcement Provisions. Optionee understands and agrees to the following
provisions regarding enforcement of the Agreement.

 

10.1 Governing Law and Jurisdiction. The Agreement is governed by and construed
under the laws of the Commonwealth of Pennsylvania, without regard to conflict
of laws rules. 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.

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10.4 No Waiver. Failure of PNC to demand strict compliance with any of the
terms, covenants or conditions of the Agreement shall not be deemed a waiver of
such term, covenant or condition, nor shall any waiver or relinquishment of any
such term, covenant or condition on any occasion or on multiple occasions be
deemed a waiver or relinquishment of such term, covenant or condition.

 

10.5 Severability. The restrictions and obligations imposed by Sections 9.2, 9.3
and 9.4 are separate and severable, and it is the intent of Optionee and PNC
that if any restriction or obligation imposed by any of these provisions is
deemed by a court of competent jurisdiction to be void for any reason
whatsoever, the remaining provisions, restrictions and obligations shall remain
valid and binding upon Optionee.

 

10.6 Reform. In the event any of Sections 9.2, 9.3 and 9.4 are determined by a
court of competent jurisdiction to be unenforceable because unreasonable either
as to length of time or area to which said restriction applies, it is the intent
of Optionee and PNC that said court reduce and reform the provisions thereof so
as to apply the greatest limitations considered enforceable by the court.

 

10.7 Waiver of Jury Trial. Each of Optionee and PNC hereby waives any right to
trial by jury with regard to any suit, action or proceeding under or in
connection with any of Sections 9.2, 9.3 and 9.4.

 

10.8 Applicable Law. Notwithstanding anything in the Agreement, PNC will not be
required to comply with any term, covenant or condition of the Agreement if and
to the extent prohibited by law, including but not limited to federal banking
and securities regulations, or as otherwise directed by one or more regulatory
agencies having jurisdiction over PNC or any of its subsidiaries. Further, to
the extent, if any, applicable to Optionee, Optionee agrees to reimburse PNC for
any amounts Optionee may be required to reimburse the Corporation pursuant to
Section 304 of the Sarbanes-Oxley Act of 2002, and agrees that PNC need not
comply with any term, covenant or condition of the Agreement to the extent that
doing so would require that Optionee reimburse PNC or its subsidiaries for such
amounts pursuant to Section 304 of the Sarbanes-Oxley Act of 2002.

 

11. Compliance with Internal Revenue Code Section 409A. To the extent that any
of the terms or provisions of this Agreement or of the Option may result in the
application of Section 409A of the Internal Revenue Code of 1986 as amended to
this Option, 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 in
order to allow the Option to be excluded from the definition of “deferred
compensation” within the meaning of such Section 409A or in order to comply with
the provisions of Section 409A, other applicable provision(s) of the Internal
Revenue Code, and/or any rules, regulations or other regulatory guidance issued
under such statutory provisions.

 

12. Effective Date. If Optionee does not accept the grant of the Option by
executing and delivering a copy of the Agreement to PNC, without altering or
changing the terms of the Agreement in any way, within thirty (30) days of
receipt by Optionee of a copy of the Agreement, PNC may, in its sole discretion,
withdraw its offer and cancel the Option and the Agreement at any time prior to
Optionee’s delivery to PNC of a copy of the Agreement executed by Optionee.

 

Otherwise, upon execution and delivery of the Agreement by both PNC and Optionee
and, in the event that Optionee is subject to the reporting requirements of
Section 16(a) of the Exchange Act with respect to PNC securities, the filing
with and acceptance by the SEC of a Form 4 reporting the Grant, the Option and
the Agreement are effective as of the Grant Date.

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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:  

 

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    Chairman and Chief Executive Officer ATTEST: By:  

 

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    Corporate Secretary Accepted and agreed to as of the Grant Date.

 

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Optionee

 

Annex A- Certain Definitions

Annex B - Notice of Exercise

Annex C - Tax Payment Election Form

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ANNEX A

 

THE PNC FINANCIAL SERVICES GROUP, INC.

1997 LONG-TERM INCENTIVE AWARD PLAN

NONSTATUTORY STOCK OPTION AGREEMENT

CERTAIN DEFINITIONS

 

Except where the context otherwise indicates, the following definitions apply to
the Nonstatutory Stock Option Agreement (“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 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
Agreement only if and when there shall have been delivered to Optionee, as part
of the notice of Optionee’s termination, a copy of a resolution duly adopted by
the affirmative vote of not less than a majority of the entire membership of the
Board, at a Board meeting called and held for the purpose of considering such
termination, finding on the basis of clear and convincing evidence that, in the
good faith opinion of the Board, Optionee is guilty of conduct described in
clause (i) or (ii) above and, in either case, specifying the particulars thereof
in detail. Such resolution shall be adopted only after (1) reasonable notice of
such Board meeting is provided to Optionee, together with written notice that
PNC believes that Optionee is guilty of conduct described in clause (i) or (ii)
above and, in either case, specifying the particulars thereof in detail, and (2)
Optionee is given an opportunity, together with counsel, to be heard before the
Board.

 

(b) “Cause” other than during a Coverage Period. If the termination of
Optionee’s employment with the Corporation occurs other than during a Coverage
Period, then, for purposes of the Agreement, “Cause” means:

 

(i) the willful and continued failure of Optionee to substantially perform
Optionee’s duties with the Corporation (other than any such failure resulting
from incapacity due to physical or mental illness), after a written demand for
substantial performance is delivered to Optionee by PNC that specifically
identifies the manner in which it is believed that Optionee has not
substantially performed Optionee’s duties;

 

(ii) a material breach by Optionee of (1) any code of conduct of PNC or 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;

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(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 Agreement only if and when the CEO or his or her designee (or, if
Optionee is the CEO, the Board) determines that Optionee is guilty of conduct
described in clause (i), (ii) or (iii) above or that an event described in
clause (iv) or (v) above has occurred with respect to Optionee and, if so,
determines that the termination of Optionee’s employment with the Corporation
will be deemed to have been for Cause.

 

A.3 “CEO” means the chief executive officer of PNC.

 

A.4 “Change in Control” means a change of control of PNC of a nature that would
be required to be reported in response to Item 6(e) of Schedule 14A of
Regulation 14A (or in response to any similar item on any similar schedule or
form) promulgated under the Exchange Act, whether or not PNC is then subject to
such reporting requirement; provided, however, that without limitation, a Change
in Control shall be deemed to have occurred if:

 

(a) any Person, excluding employee benefit plans of the Corporation, is or
becomes the beneficial owner (as defined in Rules 13d-3 and 13d-5 under the
Exchange Act or any successor provisions thereto), directly or indirectly, of
securities of PNC representing twenty percent (20%) or more of the combined
voting power of PNC’s then outstanding securities; provided, however, that such
an acquisition of beneficial ownership representing between twenty percent (20%)
and forty percent (40%), inclusive, of such voting power shall not be considered
a Change in Control if the Board approves such acquisition either prior to or
immediately after its occurrence;

 

(b) PNC consummates a merger, consolidation, share exchange, division or other
reorganization or transaction of PNC (a “Fundamental Transaction”) with any
other corporation, other than a Fundamental Transaction that results in the
voting securities of PNC outstanding immediately prior thereto continuing to
represent (either by remaining outstanding or by being converted into voting
securities of the surviving entity) at least sixty percent (60%) of the combined
voting power immediately after such Fundamental Transaction of (i) PNC’s
outstanding securities, (ii) the surviving entity’s outstanding securities, or
(iii) in the case of a division, the outstanding securities of each entity
resulting from the division;

 

(c) the shareholders of PNC approve a plan of complete liquidation or winding-up
of PNC or an agreement for the sale or disposition (in one transaction or a
series of transactions) of all or substantially all of PNC’s assets;

 

(d) as a result of a proxy contest, individuals who prior to the conclusion
thereof constituted the Board (including for this purpose any new director whose
election or nomination for election by PNC’s shareholders in connection with
such proxy contest was approved by a vote of at least two-thirds (2/3rds) of the
directors then still in office who were directors prior to such proxy contest)
cease to constitute at least a majority of the Board (excluding any Board seat
that is vacant or otherwise unoccupied);

 

(e) during any period of twenty-four (24) consecutive months, individuals who at
the beginning of such period constituted the Board (including for this purpose
any new director whose election or nomination for election by PNC’s shareholders
was approved by a vote of at least two-thirds (2/3rds) of the directors then
still in office who were directors at the beginning of such period) cease for
any reason to constitute at least a majority of the Board (excluding any Board
seat that is vacant or otherwise unoccupied); or

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(f) the Board determines that a Change in Control has occurred.

 

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

 

A.5 “CIC Failure” means the following:

 

(a) with respect to a CIC Triggering Event described in Section A.7(a), PNC’s
shareholders vote against the transaction approved by the Board or the agreement
to consummate the transaction is terminated; or

 

(b) with respect to a CIC Triggering Event described in Section A.7(b), the
proxy contest fails to replace or remove a majority of the members of the Board.

 

A.6 “CIC Severance Agreement” means the written agreement, if any, between
Optionee and PNC providing, among other things, for certain change in control
severance benefits.

 

A.7 “CIC Triggering Event” means the occurrence of either of the following:

 

(a) the Board or PNC’s shareholders approve a transaction described in
Subsection (b) of the definition of Change in Control contained in Section A.4;
or

 

(b) the commencement of a proxy contest in which any Person seeks to replace or
remove a majority of the members of the Board.

 

A.8 “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 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.11(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.9 “Corporation” means PNC and its Subsidiaries.

 

A.10 “Coverage Period” means a period (a) commencing on the earlier to occur of
(i) the date of a CIC Triggering Event and (ii) the date of a Change in Control
and (b) ending on the date that is two (2) years after the date of the Change in
Control; provided, however, that in the event that a Coverage Period commences
on the date of a CIC Triggering Event, such Coverage Period will terminate upon
the earlier to occur of (x) the date of a CIC Failure and (y) the date that is
two (2) years after the date of the Change in Control triggered by the CIC
Triggering Event. After the termination of any Coverage Period, another Coverage
Period will commence upon the earlier to occur of clauses (a)(i) and (a)(ii) in
the preceding sentence.

 

A.11 “Detrimental Conduct” means, for purposes of the 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;

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

 

A.13 “Exercise Date” means the date 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 full
payment of the aggregate 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 Agreement.

 

A.14 “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.14(b)
through A.14(d);

 

provided, however, if there is a Change in Control, then notwithstanding
Sections A.14(c) and A.14(d), to the extent that the Option is outstanding and
vested or vests at the time the Change in Control occurs, the Option will not
expire at the earliest before the close of business on the ninetieth (90th) day
after the occurrence of the Change in 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 in Control occurs and Optionee’s
employment with the Corporation is not terminated for Cause or (2) Optionee is a
former employee of the Corporation whose Option, or portion thereof, is
outstanding at the time the Change in Control occurs by virtue of the
application of one or more of the exceptions set forth in Section A.14(c) and at
least one of such exceptions is still applicable at the time the Change in
Control occurs.

 

In no event will the Option remain outstanding beyond the tenth (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.14(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.

 

(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) Total and Permanent Disability. If Optionee’s employment is terminated by
the Corporation by reason of Total and Permanent Disability, then the Option
will expire on the third (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 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 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.14(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.14(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.14(c), then notwithstanding the provisions of such exception or exceptions,
the Option will expire on the date that PNC determines that Optionee has engaged
in Detrimental Conduct, if earlier than the date on which the Option would
otherwise expire; provided, however, that:

 

(1) no determination that Optionee has engaged in Detrimental Conduct may be
made on or after the date of Optionee’s death, and Detrimental Conduct will not
apply to conduct by or activities of beneficiaries or other successors to the
Option in the event of Optionee’s death;

--------------------------------------------------------------------------------

(2) in the event that Optionee’s employment with the Corporation is terminated
(other than by reason of Optionee’s death) during a Coverage Period by the
Corporation without Cause or by Optionee with Good Reason, whether or not
another exception is applicable, no determination that Optionee has engaged in
Detrimental Conduct for purposes of the Agreement may be made on or after such
Termination Date; and

 

(3) no determination that Optionee has engaged in Detrimental Conduct may be
made after the occurrence of a Change in Control.

 

A.15 “Good Reason” means:

 

(a) the assignment to Optionee of any duties inconsistent in any respect with
Optionee’s position (including status, offices, titles and reporting
requirements), authority, duties or responsibilities immediately prior to either
the CIC Triggering Event or the Change in Control, or any other action by the
Corporation that results in a diminution in any respect in such position,
authority, duties or responsibilities, excluding for this purpose an isolated,
insubstantial and inadvertent action not taken in bad faith that is remedied by
the Corporation promptly after receipt of notice thereof given by Optionee;

 

(b) a reduction by the Corporation in Optionee’s annual base salary as in effect
on the Grant Date, as the same may be increased from time to time;

 

(c) the Corporation’s requiring Optionee to be based at any office or location
that is more than fifty (50) miles from Optionee’s office or location
immediately prior to either the CIC Triggering Event or the Change in Control;

 

(d) the failure by the Corporation (i) to continue in effect any bonus, stock
option or other cash or equity-based incentive plan in which Optionee
participates immediately prior to either the CIC Triggering Event or the Change
in Control that is material to Optionee’s total compensation, unless a
substantially equivalent arrangement (embodied in an ongoing substitute or
alternative plan) has been made with respect to such plan, or (ii) to continue
Optionee’s participation in such plan (or in such substitute or alternative
plan) on a basis at least as favorable, both in terms of the amount of benefits
provided and the level of Optionee’s participation relative to other
participants, as existed immediately prior to the CIC Triggering Event or the
Change in Control; or

 

(e) the failure by the Corporation to continue to provide Optionee with benefits
substantially similar to those received by Optionee under any of the
Corporation’s pension (including, but not limited to, tax-qualified plans), life
insurance, health, accident, disability or other welfare plans in which Optionee
was participating, at costs substantially similar to those paid by Optionee,
immediately prior to the CIC Triggering Event or the Change in Control.

 

A.16 “Grant Date” means the date set forth as the Grant Date on page 1 of the
Agreement.

 

A.17 “Option” means the Nonstatutory Stock Option granted to Optionee in Section
1 of the Agreement pursuant to which Optionee may purchase shares of PNC common
stock as provided in the Agreement.

 

A.18 “Option Price” means the dollar amount per share of PNC common stock set
forth as the Option Price on page 1 of the Agreement.

 

A.19 “Optionee” means the person identified as Optionee on page 1 of the
Agreement.

 

A.20 “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.21 “PNC” means The PNC Financial Services Group, Inc.

 

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

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A.23 “Retire” or “Retirement” means termination of Optionee’s employment with
the Corporation (a) at any time on or after the first day of the first month
coincident with or next following the date on which Optionee attains age
fifty-five (55) and completes five (5) years of service (as determined in the
same manner as the determination of five years of Vesting Service under the
provisions of The PNC Financial Services Group, Inc. Pension Plan) with the
Corporation and (b) for a reason other than termination by reason of Optionee’s
death or by the Corporation for Cause or, unless the Committee determines
otherwise, termination in connection with a divestiture of assets or of one or
more Subsidiaries.

 

A.24 “Right(s)” means stock appreciation right(s) in accordance with the terms
of Article 7 of the Plan.

 

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

 

A.26 “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 Agreement, Optionee’s employment with the
Corporation terminates effective at the time this occurs.

 

A.27 “Total and Permanent Disability” means, unless the Committee determines
otherwise, Optionee’s disability as determined to be total and permanent by the
Corporation for purposes of the Agreement.

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FORM OF STOCK OPTION AGREEMENT FOR

EXECUTIVE WITH 1-YEAR VESTING

 

THE PNC FINANCIAL SERVICES GROUP, INC.

1997 LONG-TERM INCENTIVE AWARD PLAN

NONSTATUTORY STOCK OPTION AGREEMENT

 

OPTIONEE:    <Name> GRANT DATE:                        , 200     OPTION PRICE:
   $                      per share COVERED SHARES:    <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 Agreement
(“Agreement”) as defined in the Plan unless otherwise defined in the Agreement
or an Annex thereto. In the 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 Agreement and in the Annexes hereto are for convenience
only and are not part of the Agreement and Annexes.

 

1. Grant of Option. Pursuant to 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.

 

2. Terms of the Option.

 

2.1 Type of Option. The Option is intended to be a Nonstatutory Stock Option
without Rights.

 

2.2 Option Period. 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.

 

To the extent that the Option is otherwise outstanding, the Option will vest as
to Covered Shares as set forth in this Section 2.2.

 

(a) Unless the Option has become vested pursuant to Section 2.2(b), 2.2(c),
2.2(d) or 2.2(e), the Option will become exercisable (“vest”) as to all
outstanding Covered Shares 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.

 

(b) If Optionee’s employment is terminated by the Corporation by reason of Total
and Permanent Disability and not for Cause, the Option will vest as to all
outstanding Covered Shares as to which it has not otherwise vested commencing on
Optionee’s Termination Date.

 

(c) If Optionee’s employment with the Corporation is terminated by reason of
Optionee’s death, the Option will immediately vest as to all outstanding Covered
Shares as to which it has not otherwise vested, and the Option may be exercised
by Optionee’s properly designated beneficiary, by the person or persons entitled
to do so under Optionee’s will, or by the person or persons entitled to do so
under the applicable laws of descent and distribution.

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(d) If Optionee’s employment with the Corporation is terminated during a
Coverage Period 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 vested at the time a Change in Control
occurs, the Option will vest as to all then outstanding Covered Shares,
effective as of the day immediately prior to the occurrence of the Change in
Control, provided that, at the time the Change in Control occurs, Optionee is an
employee of the Corporation.

 

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 Agreement, Optionee’s employment with the Corporation terminates
effective at the time this occurs.

 

2.3 Nontransferability; Designation of Beneficiary. The Option is not
transferable or assignable by Optionee other than by transfer to a properly
designated beneficiary in the event of death, or by will or the laws of descent
and distribution.

 

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.

 

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. In the absence
of a properly designated beneficiary, 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.

 

3. Capital Adjustments. The number and class of Covered Shares as to which the
Option is outstanding and has not yet been exercised and the Option Price will
be subject to such adjustment, if any, as the Committee in its sole discretion
deems appropriate to reflect corporate 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”)), 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 will be made by the Committee in its sole
discretion and will 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 will
determine the manner in which any fractional shares will be treated.

 

4. Exercise of Option.

 

4.1 Notice and Effective Date. The Option may be exercised, in whole or in part,
by delivering to PNC written notice of such exercise, in such form as PNC may
from time to time prescribe, accompanied by full payment of the aggregate Option
Price with respect to that portion of the 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 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.

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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 2.3, 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 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
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
attestation procedure) that are not subject to any contractual restriction,
pledge or other encumbrance and that have been owned by Optionee for at least
six (6) months prior to the Exercise Date and, in the case of restricted stock,
for which it has been at least six (6) months since the restrictions lapsed, or,
in either case, for such other period as may be specified or permitted by PNC.

 

For purposes of this Section 4.3, shares of PNC common stock that are used to
satisfy applicable taxes will be valued at their Fair Market Value on the date
the tax withholding obligation arises. In no event will the Fair Market Value of
the shares of PNC common stock otherwise issuable upon exercise of the Option
but retained pursuant to Section 4.3(b) exceed the minimum amount of taxes
required to be withheld in connection with the Option exercise.

 

4.4 Effect. The exercise, in whole or in part, of the Option will cause a
reduction in the number of unexercised Covered Shares as to which the Option is
outstanding equal to the number of shares of PNC common stock with respect to
which the Option is exercised.

 

5. Restrictions on Exercise and on Shares Issued on Exercise. Notwithstanding
any other provision of the Agreement, the Option may not be exercised at any
time that PNC does not have in effect a registration statement under the
Securities Act of 1933 as amended relating to the offer of shares of PNC common
stock under the Plan unless PNC agrees to permit such exercise. Upon the
issuance of any shares of PNC common stock pursuant to exercise of the Option at
a time when such a registration statement is not in effect, Optionee will, upon
the request of PNC, agree in writing that Optionee is acquiring such shares for
investment only and not with a view to resale and that Optionee will not sell,
pledge, or otherwise dispose of such shares unless and until (a) PNC is
furnished with an opinion of counsel to the effect that registration of such
shares pursuant to the Securities Act of 1933 as amended is not required by that
Act or by rules and regulations promulgated thereunder, (b) the staff of the SEC
has issued a no-action letter with respect to such disposition, or (c) such
registration or notification as is, in the opinion of counsel for PNC,

--------------------------------------------------------------------------------

required for the lawful disposition of such shares has been filed and has become
effective; provided, however, that PNC is not obligated hereby to file any such
registration or notification. PNC may place a legend embodying such restrictions
on the certificate(s) evidencing such shares.

 

6. Rights as Shareholder. Optionee will have no rights as a shareholder with
respect to any Covered Shares until the Exercise Date and then only with respect
to those shares of PNC common stock issued upon such exercise of the Option and
not retained as provided in Section 4.3.

 

7. Employment. Neither the granting of the Option evidenced by the Agreement nor
any term or provision of the Agreement will constitute or be evidence of any
understanding, expressed or implied, on the part of PNC or any Subsidiary to
employ Optionee for any period.

 

8. Subject to the Plan. The Option evidenced by the Agreement and the exercise
thereof are subject to the terms and conditions of the Plan, which is
incorporated by reference herein and made a part hereof, but the terms of the
Plan will not be considered an enlargement of any benefits under the Agreement.
In addition, the Option is subject to any rules and regulations promulgated by
or under the authority of the Committee.

 

9. Optionee Covenants.

 

9.1 General. Optionee and PNC acknowledge and agree that Optionee has received
adequate consideration with respect to enforcement of the provisions of Sections
9 and 10 hereof, that such provisions are reasonable and properly required for
the adequate protection of the business of the Corporation, and that enforcement
of such provisions will not prevent Optionee from earning a living.

 

9.2 Non-Solicitation; No-Hire. Optionee agrees to comply with the provisions of
subsections (a) and (b) of this Section 9.2 while employed by the Corporation
and for a period of twelve (12) months after Optionee’s Termination Date
regardless of the reason for such termination of employment.

 

(b) Non-Solicitation. Optionee shall not, directly or indirectly, either for
Optionee’s own benefit or purpose or for the benefit or purpose of any Person
other than PNC or any Subsidiary, solicit, call on, do business with, or
actively interfere with PNC’s or any Subsidiary’s relationship with, or attempt
to divert or entice away, any Person that Optionee should reasonably know (i) is
a customer of PNC or any Subsidiary for which PNC or any Subsidiary provides any
services as of the Termination Date, or (ii) was a customer of PNC or any
Subsidiary for which PNC or any Subsidiary provided any services at any time
during the twelve (12) months preceding the Termination Date, or (iii) was, as
of the Termination Date, considering retention of PNC or any Subsidiary to
provide any services.

 

(b) No-Hire. Optionee shall not, directly or indirectly, either for Optionee’s
own benefit or purpose or for the benefit or purpose of any Person other than
PNC or any Subsidiary, employ or offer to employ, call on, or actively interfere
with PNC’s or any Subsidiary’s relationship with, or attempt to divert or entice
away, any employee of the Corporation, nor shall Optionee assist any other
Person in such activities.

 

Notwithstanding the above, if Optionee’s employment with the Corporation is
terminated by the Corporation without Cause or by Optionee with Good Reason and
such Termination Date occurs during a Coverage Period (either as Coverage Period
is defined in Section A.10 of Annex A or, if Optionee was a party to a CIC
Severance Agreement that was in effect at the time of such termination of
employment, as Coverage Period is defined in such CIC Severance Agreement, if
longer), then commencing immediately after such Termination Date, the provisions
of subsections (a) and (b) of this Section 9.2 shall no longer apply and shall
be replaced with the following subsection (c):

 

(c) No-Hire. Optionee agrees that Optionee shall not, for a period of twelve
(12) months after the Termination Date, employ or offer to employ, solicit,
actively interfere with PNC’s or any PNC affiliate’s relationship with, or
attempt to divert or entice away, any officer of PNC or any PNC affiliate.

 

9.3 Confidentiality. During Optionee’s employment with the Corporation, and
thereafter regardless of the

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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 Agreement.

 

10.1 Governing Law and Jurisdiction. The Agreement is governed by and construed
under the laws of the Commonwealth of Pennsylvania, without regard to conflict
of laws rules. Any dispute or claim arising out of or relating to the Agreement
or claim of breach hereof shall be brought exclusively in the federal court for
the Western District of Pennsylvania or in the Court of Common Pleas of
Allegheny County, Pennsylvania. By execution of the Agreement, Optionee and PNC
hereby consent to the exclusive jurisdiction of such courts, and waive any right
to challenge jurisdiction or venue in such courts with regard to any suit,
action, or proceeding under or in connection with the Agreement.

 

10.2 Equitable Remedies. A breach of the provisions of any of Sections 9.2, 9.3
or 9.4 will cause the Corporation irreparable harm, and the Corporation will
therefore be entitled to issuance of immediate, as well as permanent, injunctive
relief restraining Optionee, and each and every person and entity acting in
concert or participating with Optionee, from initiation and/or continuation of
such breach.

 

10.3 Tolling Period. If it becomes necessary or desirable for the Corporation to
seek compliance with the provisions of Section 9.2 by legal proceedings, the
period during which Optionee shall comply with said provisions will extend for a
period of twelve (12) months from the date the Corporation institutes legal
proceedings for injunctive or other relief.

 

10.4 No Waiver. Failure of PNC to demand strict compliance with any of the
terms, covenants or conditions of the Agreement shall not be deemed a waiver of
such term, covenant or condition, nor shall any waiver or relinquishment of any
such term, covenant or condition on any occasion or on multiple occasions be
deemed a waiver or relinquishment of such term, covenant or condition.

 

10.5 Severability. The restrictions and obligations imposed by Sections 9.2, 9.3
and 9.4 are separate and severable, and it is the intent of Optionee and PNC
that if any restriction or obligation imposed by any of these provisions is
deemed by a court of competent jurisdiction to be void for any reason
whatsoever, the remaining provisions, restrictions and obligations shall remain
valid and binding upon Optionee.

 

10.6 Reform. In the event any of Sections 9.2, 9.3 and 9.4 are determined by a
court of competent jurisdiction to be unenforceable because unreasonable either
as to length of time or area to which said restriction applies, it is the intent
of Optionee and PNC that said court reduce and reform the provisions thereof so
as to apply the greatest limitations considered enforceable by the court.

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10.7 Waiver of Jury Trial. Each of Optionee and PNC hereby waives any right to
trial by jury with regard to any suit, action or proceeding under or in
connection with any of Sections 9.2, 9.3 and 9.4.

 

10.8 Applicable Law. Notwithstanding anything in the Agreement, PNC will not be
required to comply with any term, covenant or condition of the Agreement if and
to the extent prohibited by law, including but not limited to federal banking
and securities regulations, or as otherwise directed by one or more regulatory
agencies having jurisdiction over PNC or any of its subsidiaries. Further, to
the extent, if any, applicable to Optionee, Optionee agrees to reimburse PNC for
any amounts Optionee may be required to reimburse the Corporation pursuant to
Section 304 of the Sarbanes-Oxley Act of 2002, and agrees that PNC need not
comply with any term, covenant or condition of the Agreement to the extent that
doing so would require that Optionee reimburse PNC or its subsidiaries for such
amounts pursuant to Section 304 of the Sarbanes-Oxley Act of 2002.

 

11. Compliance with Internal Revenue Code Section 409A. To the extent that any
of the terms or provisions of this Agreement or of the Option may result in the
application of Section 409A of the Internal Revenue Code of 1986 as amended to
this Option, 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 in
order to allow the Option to be excluded from the definition of “deferred
compensation” within the meaning of such Section 409A or in order to comply with
the provisions of Section 409A, other applicable provision(s) of the Internal
Revenue Code, and/or any rules, regulations or other regulatory guidance issued
under such statutory provisions.

 

12. Effective Date. If Optionee does not accept the grant of the Option by
executing and delivering a copy of the Agreement to PNC, without altering or
changing the terms of the Agreement in any way, within thirty (30) days of
receipt by Optionee of a copy of the Agreement, PNC may, in its sole discretion,
withdraw its offer and cancel the Option and the Agreement at any time prior to
Optionee’s delivery to PNC of a copy of the Agreement executed by Optionee.

 

Otherwise, upon execution and delivery of the Agreement by both PNC and Optionee
and the filing with and acceptance by the SEC of a Form 4 reporting the Grant,
the Option and the Agreement are effective as of the Grant Date.

 

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:  

 

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    Chairman and Chief Executive Officer ATTEST: By:  

 

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    Corporate Secretary Accepted and agreed to as of the Grant Date.

Optionee

 

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Annex A - Certain Definitions

Annex B - Notice of Exercise

Annex C - Tax Payment Election Form

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ANNEX A

 

THE PNC FINANCIAL SERVICES GROUP, INC.

1997 LONG-TERM INCENTIVE AWARD PLAN

NONSTATUTORY STOCK OPTION AGREEMENT

CERTAIN DEFINITIONS

 

Except where the context otherwise indicates, the following definitions apply to
the Nonstatutory Stock Option Agreement (“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 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
Agreement only if and when there shall have been delivered to Optionee, as part
of the notice of Optionee’s termination, a copy of a resolution duly adopted by
the affirmative vote of not less than a majority of the entire membership of the
Board, at a Board meeting called and held for the purpose of considering such
termination, finding on the basis of clear and convincing evidence that, in the
good faith opinion of the Board, Optionee is guilty of conduct described in
clause (i) or (ii) above and, in either case, specifying the particulars thereof
in detail. Such resolution shall be adopted only after (1) reasonable notice of
such Board meeting is provided to Optionee, together with written notice that
PNC believes that Optionee is guilty of conduct described in clause (i) or (ii)
above and, in either case, specifying the particulars thereof in detail, and (2)
Optionee is given an opportunity, together with counsel, to be heard before the
Board.

 

(b) “Cause” other than during a Coverage Period. If the termination of
Optionee’s employment with the Corporation occurs other than during a Coverage
Period, then, for purposes of the Agreement, “Cause” means:

 

(i) the willful and continued failure of Optionee to substantially perform
Optionee’s duties with the Corporation (other than any such failure resulting
from incapacity due to physical or mental illness), after a written demand for
substantial performance is delivered to Optionee by PNC that specifically
identifies the manner in which it is believed that Optionee has not
substantially performed Optionee’s duties;

 

(ii) a material breach by Optionee of (1) any code of conduct of PNC or 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;

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(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 Agreement only if and when the CEO or his or her designee (or, if
Optionee is the CEO, the Board) determines that Optionee is guilty of conduct
described in clause (i), (ii) or (iii) above or that an event described in
clause (iv) or (v) above has occurred with respect to Optionee and, if so,
determines that the termination of Optionee’s employment with the Corporation
will be deemed to have been for Cause.

 

A.3 “CEO” means the chief executive officer of PNC.

 

A.4 “Change in Control” means a change of control of PNC of a nature that would
be required to be reported in response to Item 6(e) of Schedule 14A of
Regulation 14A (or in response to any similar item on any similar schedule or
form) promulgated under the Exchange Act, whether or not PNC is then subject to
such reporting requirement; provided, however, that without limitation, a Change
in Control shall be deemed to have occurred if:

 

(a) any Person, excluding employee benefit plans of the Corporation, is or
becomes the beneficial owner (as defined in Rules 13d-3 and 13d-5 under the
Exchange Act or any successor provisions thereto), directly or indirectly, of
securities of PNC representing twenty percent (20%) or more of the combined
voting power of PNC’s then outstanding securities; provided, however, that such
an acquisition of beneficial ownership representing between twenty percent (20%)
and forty percent (40%), inclusive, of such voting power shall not be considered
a Change in Control if the Board approves such acquisition either prior to or
immediately after its occurrence;

 

(b) PNC consummates a merger, consolidation, share exchange, division or other
reorganization or transaction of PNC (a “Fundamental Transaction”) with any
other corporation, other than a Fundamental Transaction that results in the
voting securities of PNC outstanding immediately prior thereto continuing to
represent (either by remaining outstanding or by being converted into voting
securities of the surviving entity) at least sixty percent (60%) of the combined
voting power immediately after such Fundamental Transaction of (i) PNC’s
outstanding securities, (ii) the surviving entity’s outstanding securities, or
(iii) in the case of a division, the outstanding securities of each entity
resulting from the division;

 

(c) the shareholders of PNC approve a plan of complete liquidation or winding-up
of PNC or an agreement for the sale or disposition (in one transaction or a
series of transactions) of all or substantially all of PNC’s assets;

 

(d) as a result of a proxy contest, individuals who prior to the conclusion
thereof constituted the Board (including for this purpose any new director whose
election or nomination for election by PNC’s shareholders in connection with
such proxy contest was approved by a vote of at least two-thirds (2/3rds) of the
directors then still in office who were directors prior to such proxy contest)
cease to constitute at least a majority of the Board (excluding any Board seat
that is vacant or otherwise unoccupied);

 

(e) during any period of twenty-four (24) consecutive months, individuals who at
the beginning of such period constituted the Board (including for this purpose
any new director whose election or nomination for election by PNC’s shareholders
was approved by a vote of at least two-thirds (2/3rds) of the directors then
still in office who were directors at the beginning of such period) cease for
any reason to constitute at least a majority of the Board (excluding any Board
seat that is vacant or otherwise unoccupied); or

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(f) the Board determines that a Change in Control has occurred.

 

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

 

A.5 “CIC Failure” means the following:

 

(a) with respect to a CIC Triggering Event described in Section A.7(a), PNC’s
shareholders vote against the transaction approved by the Board or the agreement
to consummate the transaction is terminated; or

 

(b) with respect to a CIC Triggering Event described in Section A.7(b), the
proxy contest fails to replace or remove a majority of the members of the Board.

 

A.6 “CIC Severance Agreement” means the written agreement, if any, between
Optionee and PNC providing, among other things, for certain change in control
severance benefits.

 

A.7 “CIC Triggering Event” means the occurrence of either of the following:

 

(a) the Board or PNC’s shareholders approve a transaction described in
Subsection (b) of the definition of Change in Control contained in Section A.4;
or

 

(b) the commencement of a proxy contest in which any Person seeks to replace or
remove a majority of the members of the Board.

 

A.8 “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 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.11(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.9 “Corporation” means PNC and its Subsidiaries.

 

A.10 “Coverage Period” means a period (a) commencing on the earlier to occur of
(i) the date of a CIC Triggering Event and (ii) the date of a Change in Control
and (b) ending on the date that is two (2) years after the date of the Change in
Control; provided, however, that in the event that a Coverage Period commences
on the date of a CIC Triggering Event, such Coverage Period will terminate upon
the earlier to occur of (x) the date of a CIC Failure and (y) the date that is
two (2) years after the date of the Change in Control triggered by the CIC
Triggering Event. After the termination of any Coverage Period, another Coverage
Period will commence upon the earlier to occur of clauses (a)(i) and (a)(ii) in
the preceding sentence.

 

A.11 “Detrimental Conduct” means, for purposes of the 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;

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

 

A.13 “Exercise Date” means the date 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 full
payment of the aggregate 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 Agreement.

 

A.14 “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.14(b)
through A.14(d);

 

provided, however, if there is a Change in Control, then notwithstanding
Sections A.14(c) and A.14(d), to the extent that the Option is outstanding and
vested or vests at the time the Change in Control occurs, the Option will not
expire at the earliest before the close of business on the ninetieth (90th) day
after the occurrence of the Change in 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 in Control occurs and Optionee’s
employment with the Corporation is not terminated for Cause or (2) Optionee is a
former employee of the Corporation whose Option, or portion thereof, is
outstanding at the time the Change in Control occurs by virtue of the
application of one or more of the exceptions set forth in Section A.14(c) and at
least one of such exceptions is still applicable at the time the Change in
Control occurs.

 

In no event will the Option remain outstanding beyond the tenth (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

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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.14(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.

 

(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 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) Total and Permanent Disability. If Optionee’s employment is terminated by
the Corporation by reason of Total and Permanent Disability, then the Option
will expire on the third (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 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 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 Option is vested and will expire on Optionee’s Termination Date unless
the conditions set forth in this Section A.14(c)(5) are met, then such vested
Option 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.14(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.14(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;

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(2) in the event that Optionee’s employment with the Corporation is terminated
(other than by reason of Optionee’s death) during a Coverage Period by the
Corporation without Cause or by Optionee with Good Reason, whether or not
another exception is applicable, no determination that Optionee has engaged in
Detrimental Conduct for purposes of the Agreement may be made on or after such
Termination Date; and

 

(3) no determination that Optionee has engaged in Detrimental Conduct may be
made after the occurrence of a Change in Control.

 

A.15 “Good Reason” means:

 

(a) the assignment to Optionee of any duties inconsistent in any respect with
Optionee’s position (including status, offices, titles and reporting
requirements), authority, duties or responsibilities immediately prior to either
the CIC Triggering Event or the Change in Control, or any other action by the
Corporation that results in a diminution in any respect in such position,
authority, duties or responsibilities, excluding for this purpose an isolated,
insubstantial and inadvertent action not taken in bad faith that is remedied by
the Corporation promptly after receipt of notice thereof given by Optionee;

 

(b) a reduction by the Corporation in Optionee’s annual base salary as in effect
on the Grant Date, as the same may be increased from time to time;

 

(c) the Corporation’s requiring Optionee to be based at any office or location
that is more than fifty (50) miles from Optionee’s office or location
immediately prior to either the CIC Triggering Event or the Change in Control;

 

(d) the failure by the Corporation (i) to continue in effect any bonus, stock
option or other cash or equity-based incentive plan in which Optionee
participates immediately prior to either the CIC Triggering Event or the Change
in Control that is material to Optionee’s total compensation, unless a
substantially equivalent arrangement (embodied in an ongoing substitute or
alternative plan) has been made with respect to such plan, or (ii) to continue
Optionee’s participation in such plan (or in such substitute or alternative
plan) on a basis at least as favorable, both in terms of the amount of benefits
provided and the level of Optionee’s participation relative to other
participants, as existed immediately prior to the CIC Triggering Event or the
Change in Control; or

 

(e) the failure by the Corporation to continue to provide Optionee with benefits
substantially similar to those received by Optionee under any of the
Corporation’s pension (including, but not limited to, tax-qualified plans), life
insurance, health, accident, disability or other welfare plans in which Optionee
was participating, at costs substantially similar to those paid by Optionee,
immediately prior to the CIC Triggering Event or the Change in Control.

 

A.16 “Grant Date” means the date set forth as the Grant Date on page 1 of the
Agreement.

 

A.17 “Option” means the Nonstatutory Stock Option granted to Optionee in Section
1 of the Agreement pursuant to which Optionee may purchase shares of PNC common
stock as provided in the Agreement.

 

A.18 “Option Price” means the dollar amount per share of PNC common stock set
forth as the Option Price on page 1 of the Agreement.

 

A.19 “Optionee” means the person identified as Optionee on page 1 of the
Agreement.

 

A.20 “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.21 “PNC” means The PNC Financial Services Group, Inc.

 

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

--------------------------------------------------------------------------------

A.23 “Retire” or “Retirement” means termination of Optionee’s employment with
the Corporation (a) at any time on or after the first day of the first month
coincident with or next following the date on which Optionee attains age
fifty-five (55) and completes five (5) years of service (as determined in the
same manner as the determination of five years of Vesting Service under the
provisions of The PNC Financial Services Group, Inc. Pension Plan) with the
Corporation and (b) for a reason other than termination by reason of Optionee’s
death or by the Corporation for Cause or, unless the Committee determines
otherwise, termination in connection with a divestiture of assets or of one or
more Subsidiaries.

 

A.24 “Right(s)” means stock appreciation right(s) in accordance with the terms
of Article 7 of the Plan.

 

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

 

A.26 “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 Agreement, Optionee’s employment with the
Corporation terminates effective at the time this occurs.

 

A.27 “Total and Permanent Disability” means, unless the Committee determines
otherwise, Optionee’s disability as determined to be total and permanent by the
Corporation for purposes of the Agreement.

--------------------------------------------------------------------------------

FORM OF NON-CEG ANNUAL LTI PROGRAM

RESTRICTED STOCK GRANT AGREEMENT

 

200     Long-Term Incentive Award Program Grant

Continued Employment Performance Goal

Restricted Period: Three Years (100%)

 

THE PNC FINANCIAL SERVICES GROUP, INC.

1997 LONG-TERM INCENTIVE AWARD PLAN

* * *

200     LONG-TERM INCENTIVE AWARD PROGRAM

* * *

RESTRICTED STOCK AGREEMENT

* * *

 

GRANTEE:    < name > GRANT DATE:                        , 200     SHARES:    <
number of whole shares>

 

1. Grant of Restricted Shares. Pursuant to Article 12 of The PNC Financial
Services Group, Inc. 1997 Long-Term Incentive Award Plan as amended from time to
time (“Plan”), and subject to the terms and conditions of this Restricted Stock
Agreement (“Agreement”), The PNC Financial Services Group, Inc. (“PNC”) hereby
grants to the Grantee named above (“Grantee”) an Incentive Share Award (as
defined in the Plan) of the number of shares of PNC common stock set forth
above, and, upon acceptance of the Grant by Grantee in accordance with Section
17, 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 an Incentive Share Award subject to the terms and conditions
of the Agreement and the Plan are hereafter referred to as the “Restricted
Shares.”

 

2. Definitions. Terms defined in the Plan are used in the Agreement as defined
in the Plan unless otherwise defined in Annex A (attached hereto and
incorporated herein by reference) or elsewhere in the Agreement.

 

3. Terms of Grant. The Grant will be subject to the following terms and
conditions:

 

Restricted Shares will be subject to a Restricted Period as provided in Section
A.24 of Annex A. Once issued in accordance with Section 17, 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. 1997 Long-Term Incentive
Award Plan as amended 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 will be released and reissued to,
or at the proper direction of, Grantee or Grantee’s legal representative
pursuant to Section 9 as soon as administratively practicable following the end
of the Restricted Period.

 

4. Rights as Shareholder. Except as provided in Section 6 and subject to Section
7.6(c), if applicable, and to Section 17, 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 will, 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 will
be subject to the terms and conditions of the Agreement as if they were
Restricted Shares.

 

6. Prohibitions Against Sale, Assignment, etc. Unvested Shares may not be sold,
assigned, transferred, exchanged, pledged, hypothecated or otherwise encumbered,
other than by will or the laws of descent and distribution or 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.

 

7. Forfeiture; Death; Qualifying Disability or Retirement Termination;
Termination in Anticipation of Change in 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 7.5(c), Section 7.6(a), Section 7.6(b), or Section 8, if applicable, or
unless the Committee determines otherwise, 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), Section
7.5(c) or Section 7.6(d), 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
in Control.

--------------------------------------------------------------------------------

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 the then outstanding Unvested Shares 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 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 Total and Permanent Disability, Unvested Shares will not be forfeited
on Grantee’s Termination Date. Instead, Unvested Shares will, subject to the
forfeiture provisions of Section 7.2, remain outstanding pending 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 an affirmative 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 an
affirmative 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, whichever is applicable.

 

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 any then outstanding
Unvested Shares will terminate as of the end of the day on the date of such
approval or the day immediately preceding the third (3rd) anniversary of the
Grant Date, whichever is later. 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 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
disapproved the vesting of the Unvested Shares that had remained outstanding
after Grantee’s Termination Date pending 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 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 forfeited on Grantee’s Termination Date. Instead,
Unvested Shares will, subject to the forfeiture provisions of Section 7.2,
remain outstanding pending 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 an affirmative 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 an
affirmative 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, whichever is applicable.

 

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 any then outstanding
Unvested Shares will terminate as of the end of the day on the date of such
approval or the day immediately preceding the third (3rd) anniversary of the
Grant Date, whichever is later. 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 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
disapproved the vesting of the Unvested Shares that had remained outstanding
after Grantee’s Termination Date pending 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.

 

(c) In the event that Grantee Retires prior to the first (1st) anniversary of
the Grant Date, all Restricted Shares that are Unvested Shares on Grantee’s
Termination Date will be forfeited by Grantee to PNC on such date without
payment of any consideration by PNC; provided, however, that the Committee may,
in its sole discretion with respect to some or all of the Unvested Shares, treat
such shares as if Grantee had retired on or after the first (1st) anniversary of
the Grant Date.

 

7.6 Termination in Anticipation of a Change in Control.

 

(a) Notwithstanding anything in the Agreement to the contrary, if, after the
occurrence of a CIC Triggering Event but prior to a CIC Failure and prior to the
third (3rd) anniversary of the Grant Date, Grantee’s employment is terminated
(other than by reason of Grantee’s death) by the Corporation without Cause or by
Grantee for Good Reason, or if Grantee’s employment is deemed to have been so
terminated pursuant to Section 7.6(b), 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 (or, in the case of a qualifying termination pursuant to
Section 7.6(b), the date all of the conditions set forth in clauses (i), (ii)
and (iii) of the first or second paragraph, as the case may be, of Section
7.6(b) are met); 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.

 

(b) Grantee’s employment will also be deemed to have been terminated by the
Corporation without Cause after the occurrence of a CIC Triggering Event but
prior to a CIC Failure for purposes of Section 7.6(a) if: (i) Grantee’s
employment is terminated by the Corporation without Cause; (ii) such termination
of employment (a) was at the request of a third party that has taken steps
reasonably calculated to effect a Change in Control or (b) otherwise arose in
anticipation of a Change in Control; and (iii) a CIC Triggering Event or a
Change in Control occurs within three (3) months of such termination of
employment.

--------------------------------------------------------------------------------

Grantee’s employment will also be deemed to have been terminated by Grantee for
Good Reason after the occurrence of a CIC Triggering Event but prior to a CIC
Failure for purposes of Section 7.6(a) if: (i) Grantee terminates Grantee’s
employment with Good Reason; (ii) the circumstance or event that constitutes
Good Reason (a) occurs at the request of a third party that has taken steps
reasonably calculated to effect a Change in Control or (b) otherwise arose in
anticipation of a Change in Control; and (iii) a CIC Triggering Event or a
Change in Control occurs within three (3) months of such termination of
employment.

 

For purposes of this Section 7.6(b) only, Grantee will have the burden of
proving that the requirements of clause (ii) of the first or second paragraph of
this Section 7.6(b), as the case may be, have been met and the standard of proof
to be met by Grantee will be clear and convincing evidence.

 

For purposes of this Section 7.6(b) only, the definition of Change in Control in
Section A.6 of Annex A will exclude the proviso in Section A.6(a).

 

(c) If the Unvested Shares will be forfeited by Grantee to PNC by reason of
Grantee’s termination of employment with the Corporation pursuant to Section 7.1
unless all of the conditions set forth in clauses (i), (ii) and (iii) of the
first or second paragraph, as the case may be, of Section 7.6(b) are met, then
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
time all of the conditions set forth in clauses (i), (ii) and (iii) of the first
or second paragraph, as the case may be, of Section 7.6(b) have been met, such
dividend will be held, without interest, pending satisfaction of all of such
conditions. In the event that one or more of the conditions of Section 7.6(b)
are not met, any dividend being held pending satisfaction of such conditions
will be forfeited by Grantee to PNC without payment of any consideration by PNC.

 

(d) If the Unvested Shares will be forfeited by Grantee to PNC by reason of
Grantee’s termination of employment with the Corporation pursuant to Section 7.1
unless all of the conditions set forth in clauses (i), (ii) and (iii) of the
first or second paragraph, as the case may be, of Section 7.6(b) are met, then
the Restricted Shares will remain outstanding pending satisfaction of all of
those conditions. Upon the failure of any required condition, all such Unvested
Shares will be forfeited by Grantee to PNC on the date such failure occurs
without payment of any consideration by PNC.

 

8. Change in Control. Notwithstanding anything in the Agreement to the contrary,
upon the occurrence of a Change in Control: (i) if Grantee is an employee of the
Corporation as of the day immediately preceding the Change in 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 as of the day immediately preceding the Change in
Control; (ii) if Grantee’s employment with the Corporation terminated prior to
the occurrence of the Change in 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 approval of the vesting of such
shares by the Designated Person specified in Section A.13 of Annex A, then with
respect to all Unvested Shares outstanding as of the day immediately preceding
the Change in Control, such 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 in 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. Following termination of the Restricted Period,
PNC will release and 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, PNC or its
designee will deliver such whole shares to, or at the proper direction of,
Grantee or Grantee’s legal representative.

--------------------------------------------------------------------------------

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 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 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, 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 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 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 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 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 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 Grantee assist any other Person
in such activities.

 

Notwithstanding the above, if Grantee’s employment with the Corporation is
terminated by the Corporation without Cause or by Grantee with Good Reason and
such Termination Date occurs during a Coverage Period (either as Coverage Period
is defined in Section A.12 of Annex A or, if Grantee was a party to a written
agreement between Grantee and PNC providing, among other things, for certain
change in control severance benefits (a “CIC Severance Agreement”) that was in
effect at the time of such termination of employment, as Coverage Period is
defined in such CIC Severance Agreement, if longer), then commencing immediately
after such Termination Date, the provisions of subsections (a) and (b) of this
Section 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 twelve (12)
months after the Termination Date, employ or offer to employ, solicit, actively
interfere with PNC’s or any PNC affiliate’s relationship with, or attempt to
divert or entice away, any officer of PNC or any PNC affiliate.

 

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
Subsidiary 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 regard to its
conflict of laws rules. 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
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.

 

16. Compliance with Internal Revenue Code Section 409A. To the extent that any
of the

--------------------------------------------------------------------------------

terms or provisions of the Agreement or of the Grant may result in the
application of Section 409A of the Internal Revenue Code to this Grant, 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 in order to allow the Grant
to be excluded from the definition of “deferred compensation” within the meaning
of such Section 409A or in order to comply with the provisions of Section 409A,
other applicable provision(s) of the Internal Revenue Code and/or any rules,
regulations or other regulatory guidance issued under such statutory provisions.

 

17. 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 and, in the event that
Grantee is subject to the reporting requirements of Section 16(a) of the
Exchange Act with respect to PNC securities, the filing with and acceptance by
the SEC of a Form 4 reporting the Grant, the 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
17.

 

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 17 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.

 

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

--------------------------------------------------------------------------------

200     Long-Term Incentive Award Program Grant

Continued Employment Performance Goal

Restricted Period: Three Years (100%)

 

ANNEX A

TO

THE PNC FINANCIAL SERVICES GROUP, INC.

1997 LONG-TERM INCENTIVE AWARD PLAN

200     LONG-TERM INCENTIVE AWARD PROGRAM

RESTRICTED STOCK AGREEMENT

 

* * *

 

CERTAIN DEFINITIONS

 

Except where the context otherwise indicates, the following definitions apply
for purposes of the Restricted Stock Agreement (“Agreement”) to which this Annex
A is attached:

 

A.1 “Awarded Shares.” Provided that the Restricted Shares are then outstanding,
Restricted Shares become “Awarded Shares” when both 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; and (b) the Restricted Period has terminated.

 

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

 

A.3 “Business Day” means any day when the New York Stock Exchange is open for
business.

 

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 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 Subsidiary.

 

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

 

A.6 “Change in Control” means a change of control of PNC of a nature that would
be required to be reported in response to Item 6(e) of Schedule 14A of
Regulation 14A (or in response to any similar item on any similar schedule or
form) promulgated under the Exchange Act, whether or not PNC is then subject to
such reporting requirement; provided, however, that without limitation, a Change
in Control 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 twenty percent (20%) or more of the combined
voting power of PNC’s then outstanding securities; provided, however, that such
an acquisition of beneficial ownership representing between twenty percent (20%)
and forty percent (40%), inclusive, of such voting power 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 sixty percent (60%) of the combined
voting power immediately after such Fundamental Transaction of (i) PNC’s
outstanding securities, (ii) the surviving entity’s outstanding securities, or
(iii) in the case of a division, the outstanding securities of each entity
resulting from the division;

 

(c) the shareholders of PNC approve a plan of complete liquidation or winding-up
of PNC or an agreement for the sale or disposition (in one transaction or a
series of transactions) of all or substantially all of PNC’s assets;

 

(d) as a result of a proxy contest, individuals who prior to the conclusion
thereof constituted the Board (including for this purpose any new director whose
election or nomination for election by PNC’s shareholders in connection with
such proxy contest was approved by a vote of at least two-thirds (2/3rds) of the
directors then still in office who were directors prior to such proxy contest)
cease to constitute at least a majority of the Board (excluding any Board seat
that is vacant or otherwise unoccupied);

 

(e) during any period of twenty-four (24) consecutive months, individuals who at
the beginning of such period constituted the Board (including for this purpose
any new director whose election or nomination for election by PNC’s shareholders
was approved by a vote of at least two-thirds (2/3rds) of the directors then
still in office who were directors at the beginning of such period) cease for
any reason to constitute at least a majority of the Board (excluding any Board
seat that is vacant or otherwise unoccupied); or

 

(f) the Board determines that a Change in Control has occurred.

 

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

 

A.7 “CIC Failure” means the following:

 

(a) with respect to a CIC Triggering Event described in Section A.8(a), PNC’s
shareholders vote against the transaction approved by the Board or the agreement
to consummate the transaction is terminated; or

--------------------------------------------------------------------------------

(b) with respect to a CIC Triggering Event described in Section A.8(b), the
proxy contest fails to replace or remove a majority of the members of the Board.

 

A.8 “CIC Triggering Event” means the occurrence of either of the following:

 

(a) the Board or PNC’s shareholders approve a transaction described in
Subsection (b) of the definition of Change in Control contained in Section A.6;
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.

 

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 Subsidiary (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.11 “Corporation” means PNC and its Subsidiaries.

 

A.12 “Coverage Period” means a period (a) commencing on the earlier to occur of
(i) the date of a CIC Triggering Event and (ii) the date of a Change in Control
and (b) ending on the date that is three (3) years after the date of the Change
in Control; provided, however, that in the event that a Coverage Period
commences on the date of a CIC Triggering Event, such Coverage Period will
terminate upon the earlier to occur of (x) the date of a CIC Failure and (y) the
date that is three (3) years after the date of the Change in Control triggered
by the CIC Triggering Event. After the termination of any Coverage Period,
another Coverage Period will commence upon the earlier to occur of clause (a)(i)
and clause (a)(ii) in the preceding sentence.

 

A.13 “Designated Person” will be either: (a) the Committee, 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 (a) 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:

 

(a) Grantee 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 Grantee’s Termination Date and extending
through 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) a material breach by Grantee of (i) any code of conduct of PNC or a
Subsidiary or (ii) 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 a Subsidiary 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 which relates to or arises out of Grantee’s employment or
other service relationship with the Corporation; or

 

(e) entry of any order against Grantee by any governmental body having
regulatory authority with respect to the business of PNC or any Subsidiary,
which order 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 determines that Grantee has engaged
in conduct described in clause (a) above, that Grantee is guilty of conduct
described in clause (b) or clause (c) above, or that an event described in
clause (d) or clause (e) above has occurred with respect to Grantee and, if so,
determines that Grantee will be deemed to have engaged in Detrimental Conduct.

 

A.15 “Exchange Act” means the Securities Exchange Act of 1934 as amended, and
the rules and regulations promulgated thereunder.

 

A.16 “Fair Market Value” as it relates to PNC common stock means the average of
the high and low sale prices of the PNC common stock as reported on the New York
Stock Exchange (or such successor reporting system as PNC may select) on the
relevant date or, if no sale of the PNC common stock has been reported for that
day, the average of such prices on the next preceding day and the next following
day for which there were reported sales.

 

A.17 “Good Reason” means:

 

(a) the assignment to Grantee of any duties inconsistent in any respect with
Grantee’s position (including status, offices, titles and reporting
requirements), authority, duties or responsibilities immediately prior to either
the CIC Triggering Event or the Change in Control, or any other action by the
Corporation which results in a diminution in any respect in such position,
authority, duties or responsibilities, excluding for this purpose an isolated,
insubstantial and inadvertent action not taken in bad faith that is remedied by
the Corporation promptly after receipt of notice thereof given by Grantee;

 

(b) a reduction by the Corporation in Grantee’s annual base salary as in effect
on the Grant Date, as the same may be increased from time to time;

 

(c) the Corporation’s requiring 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 CIC Triggering Event or the Change in Control;

 

(d) the failure by the Corporation (i) to continue in effect any bonus, stock
option or other cash or equity-based incentive plan or program in which Grantee
participates immediately prior to either the CIC Triggering Event or the Change
in Control that is material to Grantee’s total compensation, unless a
substantially equivalent arrangement (embodied in an ongoing substitute or
alternative plan or program) has been made with respect to such plan or program,
or (ii) to continue Grantee’s participation in such plan or program (or in such
substitute or alternative plan or program) on a basis at least as favorable,
both in terms of the amount of benefits provided and the level of Grantee’s
participation relative to other participants, as existed immediately prior to
the CIC Triggering Event or the Change in Control; or

 

(e) the failure by the Corporation to continue to provide Grantee with benefits
substantially similar to those received by Grantee under any of the
Corporation’s pension (including, but not limited to, tax-qualified plans), life
insurance, health, accident, disability or other welfare plans or programs in
which Grantee was participating, at costs substantially similar to those paid by
Grantee, immediately prior to the CIC Triggering Event or the Change in Control.

--------------------------------------------------------------------------------

A.18 “Grant” means the Restricted Shares granted and issued to Grantee pursuant
to Section 1 of the Agreement.

 

A.19 “Grant Date” means the Grant Date set forth on page 1 of the Agreement.

 

A.20 “Grantee” means the person 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 “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.23 “PNC” means The PNC Financial Services Group, Inc.

 

A.24 “Restricted Period” means, subject to early termination if so determined by
the Committee 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 in
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.25 “Retiree” means a Grantee who has Retired.

 

A.26 “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 or, unless the Committee
determines otherwise, termination in connection with a divestiture of assets or
of one or more Subsidiaries) if such termination of employment occurs on or
after the first (1st) day of the first (1st) month coincident with or next
following the date on which Grantee attains age fifty-five (55) and completes
five (5) years of service (as determined in the same manner as the determination
of five years of Vesting Service under the provisions of The PNC Financial
Services Group, Inc. Pension Plan) with the Corporation.

 

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 Subsidiary that ceases to be a
Subsidiary of PNC and Grantee does not continue to be employed by PNC or a
Subsidiary, then for purposes of the Agreement, Grantee’s employment with the
Corporation terminates effective at the time this occurs.

 

A.29 “Three-Year Continued Employment Performance Goal” means, subject to early
achievement if so determined by the Committee 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 in Control is deemed to have occurred.

 

A.30 “Total and Permanent Disability” means, unless the Committee determines
otherwise, Grantee’s disability as determined to be total and permanent by the
Corporation for purposes of the Agreement.

 

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

--------------------------------------------------------------------------------

FORM OF CEG LTI PROGRAM

RESTRICTED STOCK GRANT AGREEMENT

 

200     CEG LTI Program Restricted Stock Grant

Continued Employment Performance Goal

Restricted Period: Through                     , 20        ) (100%) [restricted
period can vary, generally between two and four years]

 

THE PNC FINANCIAL SERVICES GROUP, INC.

1997 LONG-TERM INCENTIVE AWARD PLAN

* * *

RESTRICTED STOCK AGREEMENT

* * *

 

GRANTEE:    < name > GRANT DATE:                        , 200     SHARES:    <
number of whole shares>

 

1. Grant of Restricted Shares. Pursuant to Article 12 of The PNC Financial
Services Group, Inc. 1997 Long-Term Incentive Award Plan as amended from time to
time (“Plan”), and subject to the terms and conditions of this Restricted Stock
Agreement (“Agreement”), The PNC Financial Services Group, Inc. (“PNC”) hereby
grants to the Grantee named above (“Grantee”) an Incentive Share Award (as
defined in the Plan) of the number of shares of PNC common stock set forth
above, and, upon acceptance of the Grant by Grantee in accordance with Section
17, 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 an Incentive Share Award subject to the terms and conditions
of the Agreement and the Plan are hereafter referred to as the “Restricted
Shares.”

 

2. Definitions. Terms defined in the Plan are used in the Agreement as defined
in the Plan unless otherwise defined in Annex A (attached hereto and
incorporated herein by reference) or elsewhere in the Agreement.

 

3. Terms of Grant. The Grant will be subject to the following terms and
conditions:

 

Restricted Shares will be subject to a Restricted Period as provided in Section
A.25 of Annex A. Once issued in accordance with Section 17, 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. 1997 Long-Term Incentive
Award Plan as amended 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 will be released and reissued to,
or at the proper direction of, Grantee or Grantee’s legal representative
pursuant to Section 9 as soon as administratively practicable following the end
of the Restricted Period.

 

4. Rights as Shareholder. Except as provided in Section 6 and subject to Section
7.5(c), if applicable, and to Section 17, 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 will, 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 will
be subject to the terms and conditions of the Agreement as if they were
Restricted Shares.

 

6. Prohibitions Against Sale, Assignment, etc. Unvested Shares may not be sold,
assigned, transferred, exchanged, pledged, hypothecated or otherwise encumbered,
other than by will or the laws of descent and distribution or as may be required
pursuant to Section 10.2, unless and until the Restricted Period terminates and
the Awarded Shares are released and issued by PNC pursuant to Section 9.

 

7. Forfeiture; Death; Qualifying Disability or Other Termination; Termination in
Anticipation of Change in 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 7.4(c),
Section 7.5(a), Section 7.5(b), or Section 8, if applicable, or unless the
Committee determines otherwise, in the event that Grantee’s employment with the
Corporation terminates prior to                     , 20    , 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 7.4(c) or Section
7.5(d), 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 7.5, 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
in Control.

 

7.3 Death. In the event of Grantee’s death while an employee of the Corporation
and prior to                     , 20    , the Continued Employment Performance
Goal will be deemed to have been achieved, and the Restricted Period with
respect to the then outstanding Unvested Shares 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 Disability or Other Termination.

 

(a) In the event Grantee’s employment with the Corporation is terminated prior
to                     , 20     by the Corporation by reason of Grantee’s Total
and Permanent Disability, Unvested Shares will not be forfeited on Grantee’s
Termination Date. Instead, Unvested Shares will, subject to the forfeiture
provisions of Section 7.2, remain outstanding pending approval of the vesting of
the Restricted Shares pursuant to this Section 7.4(a) by the Designated Person
specified in Section A.14 of Annex A.

 

If such Unvested Shares are still outstanding but the Designated Person has not
made an affirmative determination to either approve or disapprove the vesting of
the Unvested Shares by                     , 20    , then the Restricted Period
will be automatically extended through the first to occur of: (1) the day the
Designated Person makes an affirmative determination regarding such vesting; and
(2) either (i) the ninetieth (90th) day following                     , 20    ,
if the Designated Person is the Chief Human Resources Officer of PNC, or (ii)
the 180th day following                     , 20     if the Designated Person is
the Committee, whichever is applicable.

 

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
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 date of such approval or
                    , 20    , whichever is later. 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 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
disapproved the vesting of the Unvested Shares that had remained outstanding
after Grantee’s Termination Date pending 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.

 

(c) In the event that Grantee’s employment with the Corporation is terminated
prior to                     , 20     other than by reason of death, by the
Corporation by reason of Grantee’s Total and Permanent Disability, or in
circumstances that qualify for vesting pursuant to Section 7.5(a) or Section
7.5(b), all Restricted Shares that are Unvested Shares on Grantee’s Termination
Date will be forfeited by Grantee to PNC on such date without payment of any
consideration by PNC unless the Committee determines otherwise. The Committee
may, in its sole discretion with respect to some or all of the Unvested Shares,
treat such shares in the same manner that such shares would be treated pursuant
to Section 7.4 if Grantee’s employment had been terminated by the Corporation by
reason of Total and Permanent Disability.

 

 

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7.5 Termination in Anticipation of a Change in Control.

 

(a) Notwithstanding anything in the Agreement to the contrary, if, after the
occurrence of a CIC Triggering Event but prior to a CIC Failure and prior to
                    , 20    , Grantee’s employment is terminated (other than by
reason of Grantee’s death) by the Corporation without Cause or by Grantee for
Good Reason, or if Grantee’s employment is deemed to have been so terminated
pursuant to Section 7.5(b), then: (i) the 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 (or, in the case of a
qualifying termination pursuant to Section 7.5(b), the date all of the
conditions set forth in clauses (i), (ii) and (iii) of the first or second
paragraph, as the case may be, of Section 7.5(b) are met); 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.

 

(b) Grantee’s employment will also be deemed to have been terminated by the
Corporation without Cause after the occurrence of a CIC Triggering Event but
prior to a CIC Failure for purposes of Section 7.5(a) if: (i) Grantee’s
employment is terminated by the Corporation without Cause; (ii) such termination
of employment (a) was at the request of a third party that has taken steps
reasonably calculated to effect a Change in Control or (b) otherwise arose in
anticipation of a Change in Control; and (iii) a CIC Triggering Event or a
Change in Control occurs within three (3) months of such termination of
employment.

 

Grantee’s employment will also be deemed to have been terminated by Grantee for
Good Reason after the occurrence of a CIC Triggering Event but prior to a CIC
Failure for purposes of Section 7.5(a) if: (i) Grantee terminates Grantee’s
employment with Good Reason; (ii) the circumstance or event that constitutes
Good Reason (a) occurs at the request of a third party that has taken steps
reasonably calculated to effect a Change in Control or (b) otherwise arose in
anticipation of a Change in Control; and (iii) a CIC Triggering Event or a
Change in Control occurs within three (3) months of such termination of
employment.

 

For purposes of this Section 7.5(b) only, Grantee will have the burden of
proving that the requirements of clause (ii) of the first or second paragraph of
this Section 7.5(b), as the case may be, have been met and the standard of proof
to be met by Grantee will be clear and convincing evidence.

 

For purposes of this Section 7.5(b) only, the definition of Change in Control in
Section A.6 of Annex A will exclude the proviso in Section A.6(a).

 

(c) If the Unvested Shares will be forfeited by Grantee to PNC by reason of
Grantee’s termination of employment with the Corporation pursuant to Section 7.1
unless all of the conditions set forth in clauses (i), (ii) and (iii) of the
first or second paragraph, as the case may be, of Section 7.5(b) are met, then
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
time all of the conditions set forth in clauses (i), (ii) and (iii) of the first
or second paragraph, as the case may be, of Section 7.5(b) have been met, such
dividend will be held, without interest, pending satisfaction of all of such
conditions. In the event that one or more of the conditions of Section 7.5(b)
are not met, any dividend being held pending satisfaction of such conditions
will be forfeited by Grantee to PNC without payment of any consideration by PNC.

 

(d) If the Unvested Shares will be forfeited by Grantee to PNC by reason of
Grantee’s termination of employment with the Corporation pursuant to Section 7.1
unless all of the conditions set forth in clauses (i), (ii) and (iii) of the
first or second paragraph, as the case may be, of Section 7.5(b) are met, then
the Restricted Shares will remain outstanding pending satisfaction of all of
those conditions. Upon the failure of any required condition, all such Unvested
Shares will be forfeited by Grantee to PNC on the date such failure occurs
without payment of any consideration by PNC.

 

8. Change in Control. Notwithstanding anything in the Agreement to the contrary,
upon the occurrence of a Change in Control: (i) if Grantee is an employee of the
Corporation as of the day immediately preceding the Change in Control, the
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 as of the day immediately
preceding the Change in Control; (ii) if Grantee’s employment with the
Corporation terminated prior to the occurrence of the Change in Control but the
Unvested Shares remained outstanding after such termination of employment
pursuant to Section 7.4 and are still outstanding pending approval of the
vesting of such shares by the Designated Person specified in Section A.14 of
Annex A, then with respect to all Unvested Shares outstanding as of the day
immediately preceding the Change in Control, such vesting approval will be
deemed to have been given, the 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 in 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. Following termination of the Restricted Period,
PNC will release and 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, PNC or its
designee will deliver such whole shares to, or at the proper direction of,
Grantee or Grantee’s legal representative.

 

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 applicable federal, state or local
withholding tax obligations arising from that election either: (a) by payment of
cash; (b) 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 (c) 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 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 required to be withheld in connection with the
Restricted Shares. If Grantee desires to have an additional amount, up to
Grantee’s W-4 obligation, withheld above the required minimum and if PNC so
permits, Grantee may elect to satisfy this additional withholding either: (a) by
payment of cash; or (b) using whole shares of PNC common stock (either by
physical delivery to PNC of certificates for the shares or through PNC’s
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.

 

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 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, 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 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 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 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 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 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 Grantee assist any other Person
in such activities.

 

Notwithstanding the above, if Grantee’s employment with the Corporation is
terminated by the Corporation without Cause or by Grantee with Good Reason and
such Termination Date occurs during a Coverage Period (either as Coverage Period
is defined in Section A.13 of Annex A or, if Grantee was a party to a written
agreement between Grantee and PNC providing, among other things, for certain
change in control severance benefits (a “CIC Severance Agreement”) that was in
effect at the time of such termination of employment, as Coverage Period is
defined in such CIC Severance Agreement, if longer), then commencing immediately
after such Termination Date, the provisions of subsections (a) and (b) of this
Section 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 twelve (12)
months after the Termination Date, employ or offer to employ, solicit, actively
interfere with PNC’s or any PNC affiliate’s relationship with, or attempt to
divert or entice away, any officer of PNC or any PNC affiliate.

--------------------------------------------------------------------------------

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
Subsidiary 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 regard to conflict
of laws rules. 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
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.

 

16. Compliance with Internal Revenue Code Section 409A. To the extent that any
of the terms or provisions of the Agreement or of the Grant may result in the
application of Section 409A of the Internal Revenue Code to this Grant, 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 in order to allow the Grant
to be excluded from the definition of “deferred compensation” within the meaning
of such Section 409A or in order to comply with the provisions of Section 409A,
other applicable provision(s) of the Internal Revenue Code and/or any rules,
regulations or other regulatory guidance issued under such statutory provisions.

 

17. 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 and, in the event that
Grantee is subject to the reporting requirements of Section 16(a) of the
Exchange Act with respect to PNC securities, the filing with and acceptance by
the SEC of a Form 4 reporting the Grant, the 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
17.

 

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 17 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.

 

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:  

 

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    Chairman and Chief Executive Officer ATTEST: By:  

 

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    Corporate Secretary ACCEPTED AND AGREED TO by GRANTEE.

 

--------------------------------------------------------------------------------

Grantee

--------------------------------------------------------------------------------

200     CEG LTI Program Restricted Stock Grant

Continued Employment Performance Goal

Restricted Period: Through                     , 20    ) (100%) [restricted
period can vary, generally between two and four years]

 

ANNEX A

TO

THE PNC FINANCIAL SERVICES GROUP, INC.

1997 LONG-TERM INCENTIVE AWARD PLAN

RESTRICTED STOCK AGREEMENT

 

* * *

 

CERTAIN DEFINITIONS

 

Except where the context otherwise indicates, the following definitions apply
for purposes of the Restricted Stock Agreement (“Agreement”) to which this Annex
A is attached:

 

A.1 “Awarded Shares.” Provided that the Restricted Shares are then outstanding,
Restricted Shares become “Awarded Shares” when both of the following have
occurred: (a) the Continued Employment Performance Goal has been achieved or is
deemed to have been achieved pursuant to the terms of the Agreement; and (b) the
Restricted Period has terminated.

 

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

 

A.3 “Business Day” means any day when the New York Stock Exchange is open for
business.

 

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 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 Subsidiary.

 

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

 

A.6 “Change in Control” means a change of control of PNC of a nature that would
be required to be reported in response to Item 6(e) of Schedule 14A of
Regulation 14A (or in response to any similar item on any similar schedule or
form) promulgated under the Exchange Act, whether or not PNC is then subject to
such reporting requirement; provided, however, that without limitation, a Change
in Control 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 twenty percent (20%) or more of the combined
voting power of PNC’s then outstanding securities; provided, however, that such
an acquisition of beneficial ownership representing between twenty percent (20%)
and forty percent (40%), inclusive, of such voting power 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 sixty percent (60%) of the combined
voting power immediately after such Fundamental Transaction of (i) PNC’s
outstanding securities, (ii) the surviving entity’s outstanding securities, or
(iii) in the case of a division, the outstanding securities of each entity
resulting from the division;

 

(c) the shareholders of PNC approve a plan of complete liquidation or winding-up
of PNC or an agreement for the sale or disposition (in one transaction or a
series of transactions) of all or substantially all of PNC’s assets;

 

(d) as a result of a proxy contest, individuals who prior to the conclusion
thereof constituted the Board (including for this purpose any new director whose
election or nomination for election by PNC’s shareholders in connection with
such proxy contest was approved by a vote of at least two-thirds (2/3rds) of the
directors then still in office who were directors prior to such proxy contest)
cease to constitute at least a majority of the Board (excluding any Board seat
that is vacant or otherwise unoccupied);

 

(e) during any period of twenty-four (24) consecutive months, individuals who at
the beginning of such period constituted the Board (including for this purpose
any new director whose election or nomination for election by PNC’s shareholders
was approved by a vote of at least two-thirds (2/3rds) of the directors then
still in office who were directors at the beginning of such period) cease for
any reason to constitute at least a majority of the Board (excluding any Board
seat that is vacant or otherwise unoccupied); or

--------------------------------------------------------------------------------

(f) the Board determines that a Change in Control has occurred.

 

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

 

A.7 “CIC Failure” means the following:

 

(a) with respect to a CIC Triggering Event described in Section A.8(a), PNC’s
shareholders vote against the transaction approved by the Board or the agreement
to consummate the transaction is terminated; or

 

(b) with respect to a CIC Triggering Event described in Section A.8(b), the
proxy contest fails to replace or remove a majority of the members of the Board.

 

A.8 “CIC Triggering Event” means the occurrence of either of the following:

 

(a) the Board or PNC’s shareholders approve a transaction described in
Subsection (b) of the definition of Change in Control contained in Section A.6;
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.

 

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 Subsidiary (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.15(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.11 “Continued Employment Performance Goal” means, subject to early achievement
if so determined by the Committee or to deemed achievement pursuant to Section
7.3, Section 7.4, Section 7.5, 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 first of the following to occur:
(a)                 , 20    ; (b) the day immediately preceding the date of
Grantee’s death; and (c) the day immediately preceding the day a Change in
Control is deemed to have occurred.

 

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

 

A.13 “Coverage Period” means a period (a) commencing on the earlier to occur of
(i) the date of a CIC Triggering Event and (ii) the date of a Change in Control
and (b) ending on the date that is three (3) years after the date of the Change
in Control; provided, however, that in the event that a Coverage Period
commences on the date of a CIC Triggering Event, such Coverage Period will
terminate upon the earlier to occur of (x) the date of a CIC Failure and (y) the
date that is three (3) years after the date of the Change in Control triggered
by the CIC Triggering Event. After the termination of any Coverage Period,
another Coverage Period will commence upon the earlier to occur of clause (a)(i)
and clause (a)(ii) in the preceding sentence.

--------------------------------------------------------------------------------

A.14 “Designated Person” will be either: (a) the Committee, 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 (a) the Chief Human Resources Officer of PNC,
if Grantee is not within one of the groups specified in Section A.14(a).

 

A.15 “Detrimental Conduct” means:

 

(a) Grantee 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 Grantee’s Termination Date and extending
through 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) a material breach by Grantee of (i) any code of conduct of PNC or a
Subsidiary or (ii) 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 a Subsidiary 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 which relates to or arises out of Grantee’s employment or
other service relationship with the Corporation; or

 

(e) entry of any order against Grantee by any governmental body having
regulatory authority with respect to the business of PNC or any Subsidiary,
which order 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 determines that Grantee has engaged
in conduct described in clause (a) above, that Grantee is guilty of conduct
described in clause (b) or clause (c) above, or that an event described in
clause (d) or clause (e) above has occurred with respect to Grantee and, if so,
determines that Grantee will be deemed to have engaged in Detrimental Conduct.

 

A.16 “Exchange Act” means the Securities Exchange Act of 1934 as amended, and
the rules and regulations promulgated thereunder.

 

A.17 “Fair Market Value” as it relates to PNC common stock means the average of
the high and low sale prices of the PNC common stock as reported on the New York
Stock Exchange (or such successor reporting system as PNC may select) on the
relevant date or, if no sale of the PNC common stock has been reported for that
day, the average of such prices on the next preceding day and the next following
day for which there were reported sales.

 

A.18 “Good Reason” means:

 

(a) the assignment to Grantee of any duties inconsistent in any respect with
Grantee’s position (including status, offices, titles and reporting
requirements), authority, duties or responsibilities immediately prior to either
the CIC Triggering Event or the Change in Control, or any other action by the
Corporation which results in a diminution in any respect in such position,
authority, duties or responsibilities, excluding for this purpose an isolated,
insubstantial and inadvertent action not taken in bad faith that is remedied by
the Corporation promptly after receipt of notice thereof given by Grantee;

 

(b) a reduction by the Corporation in Grantee’s annual base salary as in effect
on the Grant Date, as the same may be increased from time to time;

--------------------------------------------------------------------------------

(c) the Corporation’s requiring 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 CIC Triggering Event or the Change in Control;

 

(d) the failure by the Corporation (i) to continue in effect any bonus, stock
option or other cash or equity-based incentive plan or program in which Grantee
participates immediately prior to either the CIC Triggering Event or the Change
in Control that is material to Grantee’s total compensation, unless a
substantially equivalent arrangement (embodied in an ongoing substitute or
alternative plan or program) has been made with respect to such plan or program,
or (ii) to continue Grantee’s participation in such plan or program (or in such
substitute or alternative plan or program) on a basis at least as favorable,
both in terms of the amount of benefits provided and the level of Grantee’s
participation relative to other participants, as existed immediately prior to
the CIC Triggering Event or the Change in Control; or

 

(e) the failure by the Corporation to continue to provide Grantee with benefits
substantially similar to those received by Grantee under any of the
Corporation’s pension (including, but not limited to, tax-qualified plans), life
insurance, health, accident, disability or other welfare plans or programs in
which Grantee was participating, at costs substantially similar to those paid by
Grantee, immediately prior to the CIC Triggering Event or the Change in Control.

 

A.19 “Grant” means the Restricted Shares granted and issued to Grantee pursuant
to Section 1 of the Agreement.

 

A.20 “Grant Date” means the Grant Date set forth on page 1 of the Agreement.

 

A.21 “Grantee” means the person identified as Grantee on page 1 of the
Agreement.

 

A.22 “Internal Revenue Code” means the Internal Revenue Code of 1986 as amended,
and the rules and regulations promulgated thereunder.

 

A.23 “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.24 “PNC” means The PNC Financial Services Group, Inc.

 

A.25 “Restricted Period” means, subject to early termination if so determined by
the Committee or pursuant to Section 7.5 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 in
Control is deemed to have occurred; and (c)                 , 20     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 Subsidiary that ceases to be a
Subsidiary of PNC and Grantee does not continue to be employed by PNC or a
Subsidiary, then for purposes of the Agreement, Grantee’s employment with the
Corporation terminates effective at the time this occurs.

 

A.28 “Total and Permanent Disability” means, unless the Committee determines
otherwise, Grantee’s disability as determined to be total and permanent by the
Corporation for purposes of the Agreement.

 

A.29 “Unvested Shares” means any Restricted Shares that are not Awarded Shares.

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FORM OF 5-YEAR RESTRICTED STOCK GRANT AGREEMENT

 

Restricted Stock Grant

Continued Employment Performance Goals

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

 

THE PNC FINANCIAL SERVICES GROUP, INC.

1997 LONG-TERM INCENTIVE AWARD PLAN

* * *

RESTRICTED STOCK AGREEMENT

* * *

 

GRANTEE:    < name > GRANT DATE:                        , 200     SHARES:    <
number of whole shares>

 

1. Grant of Restricted Shares. Pursuant to Article 12 of The PNC Financial
Services Group, Inc. 1997 Long-Term Incentive Award Plan as amended from time to
time (“Plan”), and subject to the terms and conditions of this Restricted Stock
Agreement (“Agreement”), The PNC Financial Services Group, Inc. (“PNC”) hereby
grants to the Grantee named above (“Grantee”) an Incentive Share Award (as
defined in the Plan) of the number of shares of PNC common stock set forth
above, and, upon acceptance of the Grant by Grantee in accordance with Section
17, 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 an Incentive Share Award
subject to 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;

 

(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.

 

2. Definitions. Terms defined in the Plan are used in the Agreement as defined
in the Plan unless otherwise defined in Annex A (attached hereto and
incorporated herein by reference) or elsewhere in the Agreement.

 

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.27 of Annex A. Once issued in accordance with Section
17, 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. 1997 Long-Term Incentive
Award Plan as amended 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.1 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 as soon as
administratively practicable following the end of the Restricted Period
applicable to such shares.

 

4. Rights as Shareholder. Except as provided in Section 6 and subject to Section
7.6(c), if applicable, and to Section 17, 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 will, 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 will
be subject to the terms and conditions of the Agreement as if they were
Restricted Shares, and will 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. Unvested Shares may not be sold,
assigned, transferred, exchanged, pledged, hypothecated or otherwise encumbered,
other than by will or the laws of descent and distribution or as may be required
pursuant to Section 10.2, unless and until the applicable Restricted Period
terminates and the Awarded Shares are released and reissued by PNC pursuant to
Section 9.

 

7. Forfeiture; Death; Disability Termination; Retirement; Termination in
Anticipation of Change in 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(a), Section 7.6(b), 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, Section 7.4(b), Section 7.5, or Section
7.6(d), 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
in Control.

 

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.

 

7.4 Disability Termination.

 

(a) In the event Grantee’s employment with the Corporation is terminated prior
to the fifth (5th) anniversary of the Grant Date by the Corporation by reason of
Grantee’s Total and Permanent Disability, Unvested Shares will not be forfeited
on Grantee’s Termination Date. Instead, Unvested Shares will, subject to the
forfeiture provisions of Section 7.2, remain outstanding pending approval of the
vesting of the Restricted Shares pursuant to this Section 7.4(a) by the
Designated Person specified in Section A.14 of Annex A.

 

If such Unvested Shares are still outstanding but the Designated Person has not
made an affirmative 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 an affirmative 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, whichever is
applicable.

 

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, including any extension of such
Restricted Period, if applicable, then the applicable Continued Employment
Performance Goal will be deemed to have been achieved, and the Restricted Period
with respect to any such Unvested Shares then outstanding will terminate as of
the end of the day on the later of (i) the date of such approval and (ii) 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. 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 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
disapproved the vesting of Unvested Shares that had remained outstanding after
Grantee’s Termination Date pending 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 Retirement. In the event that Grantee Retires 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 on such date
without payment of any consideration by PNC unless the Committee determines
otherwise. The Committee may, in its sole discretion with respect to some or all
of the Unvested Shares, treat such shares in the same manner that such shares
would be treated pursuant to Section 7.4 if Grantee’s employment had been
terminated by the Corporation by reason of Total and Permanent Disability.

 

7.6 Termination in Anticipation of a Change in Control.

 

(a) Notwithstanding anything in the Agreement to the contrary, if, after the
occurrence of a CIC Triggering Event but prior to a CIC Failure and prior to the
fifth (5th) anniversary of the Grant Date, Grantee’s employment is terminated
(other than by reason of Grantee’s death) by the Corporation without Cause or by
Grantee for Good Reason, or if Grantee’s employment is deemed to have been so
terminated pursuant to Section 7.6(b), 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 (or, in the case of a qualifying
termination pursuant to Section 7.6(b), the date all of the conditions set forth
in clauses (i), (ii) and (iii) of the first or second paragraph, as the case may
be, of Section 7.6(b) are met); 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.

 

(b) Grantee’s employment will also be deemed to have been terminated by the
Corporation without Cause after the occurrence of a CIC Triggering Event but
prior to a CIC Failure for purposes of Section 7.6(a) if: (i) Grantee’s
employment is terminated by the Corporation without Cause; (ii) such termination
of employment (a) was at the request of a third party that has taken steps
reasonably calculated to effect a Change in Control or (b) otherwise arose in
anticipation of a Change in Control; and (iii) a CIC Triggering Event or a
Change in Control occurs within three (3) months of such termination of
employment.

 

Grantee’s employment will also be deemed to have been terminated by Grantee for
Good Reason after the occurrence of a CIC Triggering Event but prior to a CIC
Failure for purposes of Section 7.6(a) if: (i) Grantee terminates Grantee’s
employment with Good Reason; (ii) the circumstance or event that constitutes
Good Reason (a) occurs at the request of a third party that has taken steps
reasonably calculated to effect a Change in Control or (b) otherwise arose in
anticipation of a Change in Control; and (iii) a CIC Triggering Event or a
Change in Control occurs within three (3) months of such termination of
employment.

 

For purposes of this Section 7.6(b) only, Grantee will have the burden of
proving that the requirements of clause (ii) of the first or second paragraph of
this Section 7.6(b), as the case may be, have been met and the standard of proof
to be met by Grantee will be clear and convincing evidence.

 

For purposes of this Section 7.6(b) only, the definition of Change in Control in
Section A.6 of Annex A will exclude the proviso in Section A.6(a).

 

(c) If Unvested Shares will be forfeited by Grantee to PNC by reason of
Grantee’s termination of employment with the Corporation pursuant to Section 7.1
unless all of the conditions set forth in clauses (i), (ii) and (iii) of the
first or second paragraph, as the case may be, of Section 7.6(b) are met, then
in the event that the record date for any dividend payable with respect to such
Unvested Shares

--------------------------------------------------------------------------------

occurs on or after Grantee’s Termination Date but prior to the time all of the
conditions set forth in clauses (i), (ii) and (iii) of the first or second
paragraph, as the case may be, of Section 7.6(b) have been met, such dividend
will be held, without interest, pending satisfaction of all of such conditions.
In the event that one or more of the conditions of Section 7.6(b) are not met,
any dividend being held pending satisfaction of such conditions will be
forfeited by Grantee to PNC without payment of any consideration by PNC.

 

(d) If Unvested Shares will be forfeited by Grantee to PNC by reason of
Grantee’s termination of employment with the Corporation pursuant to Section 7.1
unless all of the conditions set forth in clauses (i), (ii) and (iii) of the
first or second paragraph, as the case may be, of Section 7.6(b) are met, then
such Restricted Shares will remain outstanding pending satisfaction of all of
those conditions. Upon the failure of any required condition, all such Unvested
Shares will be forfeited by Grantee to PNC on the date such failure occurs
without payment of any consideration by PNC.

 

8. Change in Control. Notwithstanding anything in the Agreement to the contrary,
upon the occurrence of a Change in Control: (i) if Grantee is an employee of the
Corporation as of the day immediately preceding the Change in 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 will terminate as of the day immediately preceding
the Change in Control; (ii) if Grantee’s employment with the Corporation
terminated prior to the occurrence of the Change in 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 approval of the vesting of
such shares by the Designated Person specified in Section A.14 of Annex A, then
with respect to all such Unvested Shares outstanding as of the day immediately
preceding the Change in Control, such 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 in 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. Following termination of the Restricted Period
applicable to such shares, PNC will release and 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, PNC or its
designee will deliver such whole shares to, or at the proper direction of,
Grantee or Grantee’s legal representative.

 

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

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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 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 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 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, 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 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 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 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 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 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 Grantee assist any other Person
in such activities.

 

Notwithstanding the above, if Grantee’s employment with the Corporation is
terminated by the Corporation without Cause or by Grantee with Good Reason and
such Termination Date occurs during a Coverage Period (either as Coverage Period
is defined in Section A.13 of Annex A or, if Grantee was a party to a written
agreement between Grantee and PNC providing, among other things, for certain
change in control severance benefits (a “CIC Severance Agreement”) that was in
effect at the time of such termination of employment, as Coverage Period is
defined in such CIC Severance Agreement, if longer), then commencing immediately
after such Termination Date, the provisions of subsections (a) and (b) of this
Section 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 twelve (12)
months after the Termination Date, employ or offer to employ, solicit, actively
interfere with PNC’s or any PNC affiliate’s relationship with, or attempt to
divert or entice away, any officer of PNC or any PNC affiliate.

 

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
Subsidiary 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 regard to its
conflict of laws rules. 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.

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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
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.

 

16. Compliance with Internal Revenue Code Section 409A. To the extent that any
of the terms or provisions of the Agreement or of the Grant may result in the
application of Section 409A of the Internal Revenue Code to this Grant, 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 in order to allow the Grant
to be excluded from the definition of “deferred compensation” within the meaning
of such Section 409A or in order to comply with the provisions of Section 409A,
other applicable provision(s) of the Internal Revenue Code and/or any rules,
regulations or other regulatory guidance issued under such statutory provisions.

 

17. 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 and, in the event that
Grantee is subject to the reporting requirements of Section 16(a) of the
Exchange Act with respect to PNC securities, the filing with and acceptance by
the SEC of a Form 4 reporting the Grant, the 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
17.

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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 17 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.

 

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:

 

 

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Chairman and Chief Executive Officer

ATTEST:

By:

 

 

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Corporate Secretary

ACCEPTED AND AGREED TO by GRANTEE.

 

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Grantee

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Restricted Stock Grant

Continued Employment Performance Goals

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

 

ANNEX A

TO

THE PNC FINANCIAL SERVICES GROUP, INC.

1997 LONG-TERM INCENTIVE AWARD PLAN

RESTRICTED STOCK AGREEMENT

 

* * *

 

CERTAIN DEFINITIONS

 

Except where the context otherwise indicates, the following definitions apply
for purposes of the Restricted Stock Agreement (“Agreement”) to which this Annex
A is attached:

 

A.1 “Awarded Shares.” Provided that the Restricted Shares are then outstanding,
Restricted Shares become “Awarded Shares” when both of the following have
occurred: (a) the Continued Employment Performance Goal applicable to such
Restricted Shares has been achieved or is deemed to have been achieved pursuant
to the terms of the Agreement; and (b) the Restricted Period applicable to such
Restricted Shares has terminated.

 

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

 

A.3 “Business Day” means any day when the New York Stock Exchange is open for
business.

 

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 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 Subsidiary.

 

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 particulars
thereof in detail. Such

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

 

A.6 “Change in Control” means a change of control of PNC of a nature that would
be required to be reported in response to Item 6(e) of Schedule 14A of
Regulation 14A (or in response to any similar item on any similar schedule or
form) promulgated under the Exchange Act, whether or not PNC is then subject to
such reporting requirement; provided, however, that without limitation, a Change
in Control 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 twenty percent (20%) or more of the combined
voting power of PNC’s then outstanding securities; provided, however, that such
an acquisition of beneficial ownership representing between twenty percent (20%)
and forty percent (40%), inclusive, of such voting power 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 sixty percent (60%) of the combined
voting power immediately after such Fundamental Transaction of (i) PNC’s
outstanding securities, (ii) the surviving entity’s outstanding securities, or
(iii) in the case of a division, the outstanding securities of each entity
resulting from the division;

 

(c) the shareholders of PNC approve a plan of complete liquidation or winding-up
of PNC or an agreement for the sale or disposition (in one transaction or a
series of transactions) of all or substantially all of PNC’s assets;

 

(d) as a result of a proxy contest, individuals who prior to the conclusion
thereof constituted the Board (including for this purpose any new director whose
election or nomination for election by PNC’s shareholders in connection with
such proxy contest was approved by a vote of at least two-thirds (2/3rds) of the
directors then still in office who were directors prior to such proxy contest)
cease to constitute at least a majority of the Board (excluding any Board seat
that is vacant or otherwise unoccupied);

 

(e) during any period of twenty-four (24) consecutive months, individuals who at
the beginning of such period constituted the Board (including for this purpose
any new director whose election or nomination for election by PNC’s shareholders
was approved by a vote of at least two-thirds (2/3rds) of the directors then
still in office who were directors at the beginning of such period) cease for
any reason to constitute at least a majority of the Board (excluding any Board
seat that is vacant or otherwise unoccupied); or

 

(f) the Board determines that a Change in Control has occurred.

 

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

 

A.7 “CIC Failure” means the following:

 

(a) with respect to a CIC Triggering Event described in Section A.8(a), PNC’s
shareholders vote against the transaction approved by the Board or the agreement
to consummate the transaction is terminated; or

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(b) with respect to a CIC Triggering Event described in Section A.8(b), the
proxy contest fails to replace or remove a majority of the members of the Board.

 

A.8 “CIC Triggering Event” means the occurrence of either of the following:

 

(a) the Board or PNC’s shareholders approve a transaction described in
Subsection (b) of the definition of Change in Control contained in Section A.6;
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.

 

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 Subsidiary (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.15(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.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 Subsidiaries.

 

A.13 “Coverage Period” means a period (a) commencing on the earlier to occur of
(i) the date of a CIC Triggering Event and (ii) the date of a Change in Control
and (b) ending on the date that is three (3) years after the date of the Change
in Control; provided, however, that in the event that a Coverage Period
commences on the date of a CIC Triggering Event, such Coverage Period will
terminate upon the earlier to occur of (x) the date of a CIC Failure and (y) the
date that is three (3) years after the date of the Change in Control triggered
by the CIC Triggering Event. After the termination of any Coverage Period,
another Coverage Period will commence upon the earlier to occur of clause (a)(i)
and clause (a)(ii) in the preceding sentence.

 

A.14 “Designated Person” will be either: (a) the Committee, 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 (a) the Chief Human Resources Officer of PNC,
if Grantee is not within one of the groups specified in Section A.14(a).

 

A.15 “Detrimental Conduct” means:

 

(a) Grantee 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 Grantee’s Termination Date and extending
through 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) a material breach by Grantee of (i) any code of conduct of PNC or a
Subsidiary or (ii) 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 a Subsidiary 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 which relates to or arises out of Grantee’s employment or
other service relationship with the Corporation; or

 

(e) entry of any order against Grantee by any governmental body having
regulatory authority with respect to the business of PNC or any Subsidiary,
which order 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 determines that Grantee has engaged
in conduct described in clause (a) above, that Grantee is guilty of conduct
described in clause (b) or clause (c) above, or that an event described in
clause (d) or clause (e) above has occurred with respect to Grantee and, if so,
determines that Grantee will be deemed to have engaged in Detrimental Conduct.

 

A.16 “Exchange Act” means the Securities Exchange Act of 1934 as amended, and
the rules and regulations promulgated thereunder.

 

A.17 “Fair Market Value” as it relates to PNC common stock means the average of
the high and low sale prices of the PNC common stock as reported on the New York
Stock Exchange (or such successor reporting system as PNC may select) on the
relevant date or, if no sale of the PNC common stock has been reported for that
day, the average of such prices on the next preceding day and the next following
day for which there were reported sales.

 

A.18 “Five-Year Continued Employment Performance Goal” means, subject to early
achievement if so determined by the Committee 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 fifth (5th)
anniversary of the Grant Date; (b) the date of Grantee’s death; and (c) the day
a Change in Control is deemed to have occurred.

 

A.19 “Four-Year Continued Employment Performance Goal” means, subject to early
achievement if so determined by the Committee 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 fourth (4th)
anniversary of the Grant Date; (b) the date of Grantee’s death; and (c) the day
a Change in Control is deemed to have occurred.

 

A.20 “Good Reason” means:

 

(a) the assignment to Grantee of any duties inconsistent in any respect with
Grantee’s position (including status, offices, titles and reporting
requirements), authority, duties or responsibilities immediately prior to either
the CIC Triggering Event or the Change in Control, or any other action by the
Corporation which results in a diminution in any respect in such position,
authority, duties or responsibilities, excluding for this purpose an isolated,
insubstantial and inadvertent action not taken in bad faith that is remedied by
the Corporation promptly after receipt of notice thereof given by Grantee;

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(b) a reduction by the Corporation in Grantee’s annual base salary as in effect
on the Grant Date, as the same may be increased from time to time;

 

(c) the Corporation’s requiring 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 CIC Triggering Event or the Change in Control;

 

(d) the failure by the Corporation (i) to continue in effect any bonus, stock
option or other cash or equity-based incentive plan or program in which Grantee
participates immediately prior to either the CIC Triggering Event or the Change
in Control that is material to Grantee’s total compensation, unless a
substantially equivalent arrangement (embodied in an ongoing substitute or
alternative plan or program) has been made with respect to such plan or program,
or (ii) to continue Grantee’s participation in such plan or program (or in such
substitute or alternative plan or program) on a basis at least as favorable,
both in terms of the amount of benefits provided and the level of Grantee’s
participation relative to other participants, as existed immediately prior to
the CIC Triggering Event or the Change in Control; or

 

(e) the failure by the Corporation to continue to provide Grantee with benefits
substantially similar to those received by Grantee under any of the
Corporation’s pension (including, but not limited to, tax-qualified plans), life
insurance, health, accident, disability or other welfare plans or programs in
which Grantee was participating, at costs substantially similar to those paid by
Grantee, immediately prior to the CIC Triggering Event or the Change in Control.

 

A.21 “Grant” means the Restricted Shares granted and issued to Grantee pursuant
to Section 1 of the Agreement.

 

A.22 “Grant Date” means the Grant Date set forth on page 1 of the Agreement.

 

A.23 “Grantee” means the person identified as Grantee on page 1 of the
Agreement.

 

A.24 “Internal Revenue Code” means the Internal Revenue Code of 1986 as amended,
and the rules and regulations promulgated thereunder.

 

A.25 “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.26 “PNC” means The PNC Financial Services Group, Inc.

 

A.27 “Restricted Period.” The applicable Restricted Period for Restricted Shares
means, subject to early termination if so determined by the Committee 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 in 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) or Section 7.5 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 in 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) or Section 7.5 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 in 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) or Section 7.5 of the Agreement, if
applicable.

 

A.28 “Retiree” means a Grantee who has Retired.

 

A.29 “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 or, unless the Committee
determines otherwise, termination in connection with a divestiture of assets or
of one or more Subsidiaries) if such termination of employment occurs on or
after the first (1st) day of the first (1st) month coincident with or next
following the date on which Grantee attains age fifty-five (55) and completes
five (5) years of service (as determined in the same manner as the determination
of five years of Vesting Service under the provisions of The PNC Financial
Services Group, Inc. Pension Plan) with the Corporation.

 

A.30 “SEC” means the United States Securities and Exchange Commission.

 

A.31 “Termination Date” means Grantee’s last date of employment with the
Corporation. If Grantee is employed by a Subsidiary that ceases to be a
Subsidiary of PNC and Grantee does not continue to be employed by PNC or a
Subsidiary, then for purposes of the Agreement, Grantee’s employment with the
Corporation terminates effective at the time this occurs.

 

A.32 “Three-Year Continued Employment Performance Goal” means, subject to early
achievement if so determined by the Committee 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 in Control is deemed to have occurred.

 

A.33 “Total and Permanent Disability” means, unless the Committee determines
otherwise, Grantee’s disability as determined to be total and permanent by the
Corporation for purposes of the Agreement.

 

A.34 “Tranche(s)” or “First, Second or Third Tranche” has the meaning set forth
in Section 1 of the Agreement.

 

A.35 “Unvested Shares” means any Restricted Shares that are not Awarded Shares.

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FORM OF NON-NEO ANNUAL 25/25 PROGRAM

RESTRICTED STOCK GRANT AGREEMENT

 

Annual 25/25 Program — 200     Restricted Stock Grant

Continued Employment Performance Goal

Restricted Period: Three Years (100%)

 

THE PNC FINANCIAL SERVICES GROUP, INC.

1997 LONG-TERM INCENTIVE AWARD PLAN

* * *

ANNUAL 25/25 PROGRAM

200     RESTRICTED STOCK GRANT

* * *

RESTRICTED STOCK AGREEMENT

* * *

 

GRANTEE:    < name > GRANT DATE:    February     , 200     SHARES:    < number
of whole shares>

 

1. Grant of Restricted Shares. Pursuant to Article 12 of The PNC Financial
Services Group, Inc. 1997 Long-Term Incentive Award Plan as amended from time to
time (“Plan”), and subject to the terms and conditions of this Restricted Stock
Agreement (“Agreement”), The PNC Financial Services Group, Inc. (“PNC”) hereby
grants to the Grantee named above (“Grantee”) an Incentive Share Award (as
defined in the Plan) of the number of shares of PNC common stock set forth
above, and, upon acceptance of the Grant by Grantee in accordance with Section
17, 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 an Incentive Share Award subject to the terms and conditions
of the Agreement and the Plan are hereafter referred to as the “Restricted
Shares.”

 

2. Definitions. Terms defined in the Plan are used in the Agreement as defined
in the Plan unless otherwise defined in Annex A (attached hereto and
incorporated herein by reference) or elsewhere in the Agreement.

 

3. Terms of Grant. The Grant will be subject to the following terms and
conditions:

 

Restricted Shares will be subject to a Restricted Period as provided in Section
A.24 of Annex A. Once issued in accordance with Section 17, 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. 1997 Long-Term Incentive
Award Plan as amended 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 will be released and reissued to,
or at the proper direction of, Grantee or Grantee’s legal representative
pursuant to Section 9 as soon as administratively practicable following the end
of the Restricted Period.

 

4. Rights as Shareholder. Except as provided in Section 6 and subject to Section
7.6(b) or Section 7.7(c), if applicable, and to Section 17, 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 will, 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 will
be subject to the terms and conditions of the Agreement as if they were
Restricted Shares.

 

6. Prohibitions Against Sale, Assignment, etc. Unvested Shares may not be sold,
assigned, transferred, exchanged, pledged, hypothecated or otherwise encumbered,
other than by will or the laws of descent and distribution or 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.

 

7. Forfeiture; Death; Qualifying Disability, Retirement or DEAP Termination;
Termination in Anticipation of Change in 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(a), Section 7.7(b), or Section 8, if applicable, or
unless the Committee determines otherwise, 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), Section
7.6(c) or Section 7.7(d), 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
in Control.

--------------------------------------------------------------------------------

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 the then outstanding Unvested Shares 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 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 Total and Permanent Disability, Unvested Shares will not be forfeited
on Grantee’s Termination Date. Instead, Unvested Shares will, subject to the
forfeiture provisions of Section 7.2, remain outstanding pending 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 an affirmative 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 an
affirmative 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, whichever is applicable.

 

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 any then outstanding
Unvested Shares will terminate as of the end of the day on the date of such
approval or the day immediately preceding the third (3rd) anniversary of the
Grant Date, whichever is later. 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 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
disapproved the vesting of the Unvested Shares that had remained outstanding
after Grantee’s Termination Date pending 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 Retirement.

 

(a) In the event that Grantee Retires prior to the third (3rd) anniversary of
the Grant Date, Unvested Shares will not be forfeited on Grantee’s Termination
Date. Instead, Unvested Shares will, subject to the forfeiture provisions of
Section 7.2, remain outstanding pending 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 an affirmative 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 an
affirmative 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, whichever is applicable.

 

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 any then outstanding
Unvested Shares will terminate as of the end of the day on the date of such
approval or the day immediately preceding the third (3rd) anniversary of the
Grant Date, whichever is later. 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 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
disapproved the vesting of the Unvested Shares that had remained outstanding
after Grantee’s Termination Date pending 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 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 Subsidiary under an applicable PNC or 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 Subsidiary and Grantee pursuant to the terms
of an agreement or arrangement entered into by PNC or a Subsidiary and Grantee
in lieu of or in addition to the DEAP, then Unvested Shares will not be
forfeited on Grantee’s Termination Date. Instead, Unvested Shares will, subject
to the forfeiture provisions of Section 7.2, remain outstanding pending approval
of the vesting of the Restricted Shares pursuant to this Section 7.6(a) by the
Designated Person specified in Section A.13 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.

 

If such Unvested Shares are still outstanding but the Designated Person has not
made an affirmative 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 an
affirmative 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, whichever is applicable.

--------------------------------------------------------------------------------

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 any then outstanding
Unvested Shares will terminate as of the end of the day on the date of such
approval or the day immediately preceding the third (3rd) anniversary of the
Grant Date, whichever is later. 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 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 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 the non-revocation
of, and the lapse of the time within which Grantee may revoke, such waiver and
release agreement and pending 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 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 in Control.

 

(a) Notwithstanding anything in the Agreement to the contrary, if, after the
occurrence of a CIC Triggering Event but prior to a CIC Failure and prior to the
third (3rd) anniversary of the Grant Date, Grantee’s employment is terminated
(other than by reason of Grantee’s death) by the Corporation without Cause or by
Grantee for Good Reason, or if Grantee’s employment is deemed to have been so
terminated pursuant to Section 7.7(b), 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 (or, in the case of a qualifying termination pursuant to
Section 7.7(b), the date all of the conditions set forth in clauses (i), (ii)
and (iii) of the first or second paragraph, as the case may be, of Section
7.7(b) are met); 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.

 

(b) Grantee’s employment will also be deemed to have been terminated by the
Corporation without Cause after the occurrence of a CIC Triggering Event but
prior to a CIC Failure for purposes of Section 7.7(a) if: (i) Grantee’s
employment is terminated by the Corporation without Cause; (ii) such termination
of employment (a) was at the request of a third party that has taken steps
reasonably calculated to effect a Change in Control or (b) otherwise arose in
anticipation of a Change in Control; and (iii) a CIC Triggering Event or a
Change in Control occurs within three (3) months of such termination of
employment.

 

Grantee’s employment will also be deemed to have been terminated by Grantee for
Good Reason after the occurrence of a CIC Triggering Event but prior to a CIC
Failure for purposes of Section 7.7(a) if: (i) Grantee terminates Grantee’s
employment with Good Reason; (ii) the circumstance or event that constitutes

--------------------------------------------------------------------------------

Good Reason (a) occurs at the request of a third party that has taken steps
reasonably calculated to effect a Change in Control or (b) otherwise arose in
anticipation of a Change in Control; and (iii) a CIC Triggering Event or a
Change in Control occurs within three (3) months of such termination of
employment.

 

For purposes of this Section 7.7(b) only, Grantee will have the burden of
proving that the requirements of clause (ii) of the first or second paragraph of
this Section 7.7(b), as the case may be, have been met and the standard of proof
to be met by Grantee will be clear and convincing evidence.

 

For purposes of this Section 7.7(b) only, the definition of Change in Control in
Section A.6 of Annex A will exclude the proviso in Section A.6(a).

 

(c) If the Unvested Shares will be forfeited by Grantee to PNC by reason of
Grantee’s termination of employment with the Corporation pursuant to Section 7.1
unless all of the conditions set forth in clauses (i), (ii) and (iii) of the
first or second paragraph, as the case may be, of Section 7.7(b) are met, then
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
time all of the conditions set forth in clauses (i), (ii) and (iii) of the first
or second paragraph, as the case may be, of Section 7.7(b) have been met, such
dividend will be held, without interest, pending satisfaction of all of such
conditions. In the event that one or more of the conditions of Section 7.7(b)
are not met, any dividend being held pending satisfaction of such conditions
will be forfeited by Grantee to PNC without payment of any consideration by PNC.

 

(d) If the Unvested Shares will be forfeited by Grantee to PNC by reason of
Grantee’s termination of employment with the Corporation pursuant to Section 7.1
unless all of the conditions set forth in clauses (i), (ii) and (iii) of the
first or second paragraph, as the case may be, of Section 7.7(b) are met, then
the Restricted Shares will remain outstanding pending satisfaction of all of
those conditions. Upon the failure of any required condition, all such Unvested
Shares will be forfeited by Grantee to PNC on the date such failure occurs
without payment of any consideration by PNC.

 

8. Change in Control. Notwithstanding anything in the Agreement to the contrary,
upon the occurrence of a Change in Control: (i) if Grantee is an employee of the
Corporation as of the day immediately preceding the Change in 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 as of the day immediately preceding the Change in
Control; (ii) if Grantee’s employment with the Corporation terminated prior to
the occurrence of the Change in 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 approval of the
vesting of such shares by the Designated Person specified in Section A.13 of
Annex A, then with respect to all Unvested Shares outstanding as of the day
immediately preceding the Change in Control, such 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 in 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. Following termination of the Restricted Period,
PNC will release and 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, PNC or its
designee will deliver such whole shares to, or at the proper direction of,
Grantee or Grantee’s legal representative.

 

 

--------------------------------------------------------------------------------

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 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 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.

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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, 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 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 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 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 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 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 Grantee assist any other Person
in such activities.

 

Notwithstanding the above, if Grantee’s employment with the Corporation is
terminated by the Corporation without Cause or by Grantee with Good Reason and
such Termination Date occurs during a Coverage Period (either as Coverage Period
is defined in Section A.12 of Annex A or, if Grantee was a party to a written
agreement between Grantee and PNC providing, among other things, for certain
change in control severance benefits (a “CIC Severance Agreement”) that was in
effect at the time of such termination of employment, as Coverage Period is
defined in such CIC Severance Agreement, if longer), then commencing immediately
after such Termination Date, the provisions of subsections (a) and (b) of this
Section 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 twelve (12)
months after the Termination Date, employ or offer to employ, solicit, actively
interfere with PNC’s or any PNC affiliate’s relationship with, or attempt to
divert or entice away, any officer of PNC or any PNC affiliate.

 

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
Subsidiary 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 regard to its
conflict of laws rules. 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
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.

--------------------------------------------------------------------------------

16. Compliance with Internal Revenue Code Section 409A. To the extent that any
of the terms or provisions of the Agreement or of the Grant may result in the
application of Section 409A of the Internal Revenue Code to this Grant, 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 in order to allow the Grant
to be excluded from the definition of “deferred compensation” within the meaning
of such Section 409A or in order to comply with the provisions of Section 409A,
other applicable provision(s) of the Internal Revenue Code and/or any rules,
regulations or other regulatory guidance issued under such statutory provisions.

 

17. 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 and, in the event that
Grantee is subject to the reporting requirements of Section 16(a) of the
Exchange Act with respect to PNC securities, the filing with and acceptance by
the SEC of a Form 4 reporting the Grant, the 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
17.

 

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 17 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.

 

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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Annual 25/25 Program - 200     Restricted Stock Grant

Continued Employment Performance Goal

Restricted Period: Three Years (100%)

 

ANNEX A

TO

THE PNC FINANCIAL SERVICES GROUP, INC.

1997 LONG-TERM INCENTIVE AWARD PLAN

ANNUAL 25/25 PROGRAM — 200     RESTRICTED STOCK GRANT

RESTRICTED STOCK AGREEMENT

 

* * *

 

CERTAIN DEFINITIONS

 

Except where the context otherwise indicates, the following definitions apply
for purposes of the Restricted Stock Agreement (“Agreement”) to which this Annex
A is attached:

 

A.1 “Awarded Shares.” Provided that the Restricted Shares are then outstanding,
Restricted Shares become “Awarded Shares” when both 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; and (b) the Restricted Period has terminated.

 

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

 

A.3 “Business Day” means any day when the New York Stock Exchange is open for
business.

 

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 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 Subsidiary.

 

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

 

A.6 “Change in Control” means a change of control of PNC of a nature that would
be required to be reported in response to Item 6(e) of Schedule 14A of
Regulation 14A (or in response to any similar item on any similar schedule or
form) promulgated under the Exchange Act, whether or not PNC is then subject to
such reporting requirement; provided, however, that without limitation, a Change
in Control 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 twenty percent (20%) or more of the combined
voting power of PNC’s then outstanding securities; provided, however, that such
an acquisition of beneficial ownership representing between twenty percent (20%)
and forty percent (40%), inclusive, of such voting power 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 sixty percent (60%) of the combined
voting power immediately after such Fundamental Transaction of (i) PNC’s
outstanding securities, (ii) the surviving entity’s outstanding securities, or
(iii) in the case of a division, the outstanding securities of each entity
resulting from the division;

 

(c) the shareholders of PNC approve a plan of complete liquidation or winding-up
of PNC or an agreement for the sale or disposition (in one transaction or a
series of transactions) of all or substantially all of PNC’s assets;

 

(d) as a result of a proxy contest, individuals who prior to the conclusion
thereof constituted the Board (including for this purpose any new director whose
election or nomination for election by PNC’s shareholders in connection with
such proxy contest was approved by a vote of at least two-thirds (2/3rds) of the
directors then still in office who were directors prior to such proxy contest)
cease to constitute at least a majority of the Board (excluding any Board seat
that is vacant or otherwise unoccupied);

 

(e) during any period of twenty-four (24) consecutive months, individuals who at
the beginning of such period constituted the Board (including for this purpose
any new director whose election or nomination for election by PNC’s shareholders
was approved by a vote of at least two-thirds (2/3rds) of the directors then
still in office who were directors at the beginning of such period) cease for
any reason to constitute at least a majority of the Board (excluding any Board
seat that is vacant or otherwise unoccupied); or

 

(f) the Board determines that a Change in Control has occurred.

 

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

 

A.7 “CIC Failure” means the following:

 

(a) with respect to a CIC Triggering Event described in Section A.8(a), PNC’s
shareholders vote against the transaction approved by the Board or the agreement
to consummate the transaction is terminated; or

--------------------------------------------------------------------------------

(b) with respect to a CIC Triggering Event described in Section A.8(b), the
proxy contest fails to replace or remove a majority of the members of the Board.

 

A.8 “CIC Triggering Event” means the occurrence of either of the following:

 

(a) the Board or PNC’s shareholders approve a transaction described in
Subsection (b) of the definition of Change in Control contained in Section A.6;
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.

 

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 Subsidiary (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.11 “Corporation” means PNC and its Subsidiaries.

 

A.12 “Coverage Period” means a period (a) commencing on the earlier to occur of
(i) the date of a CIC Triggering Event and (ii) the date of a Change in Control
and (b) ending on the date that is three (3) years after the date of the Change
in Control; provided, however, that in the event that a Coverage Period
commences on the date of a CIC Triggering Event, such Coverage Period will
terminate upon the earlier to occur of (x) the date of a CIC Failure and (y) the
date that is three (3) years after the date of the Change in Control triggered
by the CIC Triggering Event. After the termination of any Coverage Period,
another Coverage Period will commence upon the earlier to occur of clause (a)(i)
and clause (a)(ii) in the preceding sentence.

 

A.13 “Designated Person” will be either: (a) the Committee, 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 (a) 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:

 

(a) Grantee 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 Grantee’s Termination Date and extending
through 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) a material breach by Grantee of (i) any code of conduct of PNC or a
Subsidiary or (ii) 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 a Subsidiary 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 which relates to or arises out of Grantee’s employment or
other service relationship with the Corporation; or

 

(e) entry of any order against Grantee by any governmental body having
regulatory authority with respect to the business of PNC or any Subsidiary,
which order 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 determines that Grantee has engaged
in conduct described in clause (a) above, that Grantee is guilty of conduct
described in clause (b) or clause (c) above, or that an event described in
clause (d) or clause (e) above has occurred with respect to Grantee and, if so,
determines that Grantee will be deemed to have engaged in Detrimental Conduct.

 

A.15 “Exchange Act” means the Securities Exchange Act of 1934 as amended, and
the rules and regulations promulgated thereunder.

 

A.16 “Fair Market Value” as it relates to PNC common stock means the average of
the high and low sale prices of the PNC common stock as reported on the New York
Stock Exchange (or such successor reporting system as PNC may select) on the
relevant date or, if no sale of the PNC common stock has been reported for that
day, the average of such prices on the next preceding day and the next following
day for which there were reported sales.

 

A.17 “Good Reason” means:

 

(a) the assignment to Grantee of any duties inconsistent in any respect with
Grantee’s position (including status, offices, titles and reporting
requirements), authority, duties or responsibilities immediately prior to either
the CIC Triggering Event or the Change in Control, or any other action by the
Corporation which results in a diminution in any respect in such position,
authority, duties or responsibilities, excluding for this purpose an isolated,
insubstantial and inadvertent action not taken in bad faith that is remedied by
the Corporation promptly after receipt of notice thereof given by Grantee;

 

(b) a reduction by the Corporation in Grantee’s annual base salary as in effect
on the Grant Date, as the same may be increased from time to time;

 

(c) the Corporation’s requiring 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 CIC Triggering Event or the Change in Control;

 

(d) the failure by the Corporation (i) to continue in effect any bonus, stock
option or other cash or equity-based incentive plan or program in which Grantee
participates immediately prior to either the CIC Triggering Event or the Change
in Control that is material to Grantee’s total compensation, unless a
substantially equivalent arrangement (embodied in an ongoing substitute or
alternative plan or program) has been made with respect to such plan or program,
or (ii) to continue Grantee’s participation in such plan or program (or in such
substitute or alternative plan or program) on a basis at least as favorable,
both in terms of the amount of benefits provided and the level of Grantee’s
participation relative to other participants, as existed immediately prior to
the CIC Triggering Event or the Change in Control; or

 

(e) the failure by the Corporation to continue to provide Grantee with benefits
substantially similar to those received by Grantee under any of the
Corporation’s pension (including, but not limited to, tax-qualified plans), life
insurance, health, accident, disability or other welfare plans or programs in
which Grantee was participating, at costs substantially similar to those paid by
Grantee, immediately prior to the CIC Triggering Event or the Change in Control.

--------------------------------------------------------------------------------

A.18 “Grant” means the Restricted Shares granted and issued to Grantee pursuant
to Section 1 of the Agreement.

 

A.19 “Grant Date” means the Grant Date set forth on page 1 of the Agreement.

 

A.20 “Grantee” means the person 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 “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.23 “PNC” means The PNC Financial Services Group, Inc.

 

A.24 “Restricted Period” means, subject to early termination if so determined by
the Committee 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 in
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.25 “Retiree” means a Grantee who has Retired.

 

A.26 “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 or, unless the Committee
determines otherwise, termination in connection with a divestiture of assets or
of one or more Subsidiaries) if such termination of employment occurs on or
after the first (1st) day of the first (1st) month coincident with or next
following the date on which Grantee attains age fifty-five (55) and completes
five (5) years of service (as determined in the same manner as the determination
of five years of Vesting Service under the provisions of The PNC Financial
Services Group, Inc. Pension Plan) with the Corporation.

 

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 Subsidiary that ceases to be a
Subsidiary of PNC and Grantee does not continue to be employed by PNC or a
Subsidiary, then for purposes of the Agreement, Grantee’s employment with the
Corporation terminates effective at the time this occurs.

 

A.29 “Three-Year Continued Employment Performance Goal” means, subject to early
achievement if so determined by the Committee 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 in Control is deemed to have occurred.

 

A.30 “Total and Permanent Disability” means, unless the Committee determines
otherwise, Grantee’s disability as determined to be total and permanent by the
Corporation for purposes of the Agreement.

 

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

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FORM OF NEO ANNUAL 25/25 PROGRAM

RESTRICTED STOCK GRANT AGREEMENT

 

Annual 25/25 Program (NEOs) — 200     Restricted Stock Grant

Continued Employment Performance Goal

Restricted Period: Three Years (100%)

 

THE PNC FINANCIAL SERVICES GROUP, INC.

1996 EXECUTIVE INCENTIVE AWARD PLAN

 

* * *

 

RESTRICTED STOCK AGREEMENT

 

GRANTEE:    <name> GRANT DATE:    February     , 200     SHARES:    <number of
whole shares>

 

1. Grant of Restricted Shares. Pursuant to Sections 5 and 6 of The PNC Financial
Services Group, Inc. 1996 Executive Incentive Award Plan, as amended from time
to time (“Plan”), and subject to the terms and conditions of this Restricted
Stock Agreement (“Agreement”), The PNC Financial Services Group, Inc. (“PNC”)
hereby grants to the Grantee named above (“Grantee”) a restricted stock 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 18, 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
stock award subject to the terms and conditions of the Agreement and the Plan
are hereafter referred to as the “Restricted Shares.” The Restricted Shares are
being granted and issued to Grantee as part of an Incentive Award and include
Additional Stock as defined in the Plan.

 

2. Definitions. Terms defined in the Plan are used in the Agreement as defined
in the Plan unless otherwise defined in Annex A (attached hereto and
incorporated herein by reference) or elsewhere in the Agreement.

 

3. Terms of Grant. The Grant will be subject to the following terms and
conditions:

 

Restricted Shares will be subject to a Restricted Period as provided in Section
A.24 of Annex A. Once issued in accordance with Section 18, 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. 1996 Executive Incentive
Award Plan as amended 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.”

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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 will be released and reissued to,
or at the proper direction of, Grantee or Grantee’s legal representative
pursuant to Section 9 as soon as administratively practicable following the end
of the Restricted Period.

 

4. Rights as Shareholder. Except as provided in Section 6 and subject to Section
7.6(b) or Section 7.7(c), if applicable, and to Section 18, 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 will, 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 will
be subject to the terms and conditions of the Agreement as if they were
Restricted Shares.

 

6. Prohibitions Against Sale, Assignment, etc. Unvested Shares may not be sold,
assigned, transferred, exchanged, pledged, hypothecated or otherwise encumbered,
other than by will or the laws of descent and distribution or 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.

 

7. Forfeiture; Death; Qualifying Disability, Retirement, or DEAP Termination;
Termination in Anticipation of Change in 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(a), Section 7.7(b), or Section 8, if applicable, or
unless the Committee determines otherwise, 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), Section
7.6(c) or Section 7.7(d), 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
in Control.

 

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 the then outstanding Unvested Shares will
terminate on the date of Grantee’s death.

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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 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 Total and Permanent Disability, Unvested Shares will not be forfeited
on Grantee’s Termination Date. Instead, Unvested Shares will, subject to the
forfeiture provisions of Section 7.2, remain outstanding pending 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 an affirmative 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 an
affirmative determination regarding such vesting; and (2) either (i) the 180th
day following the third (3rd) anniversary of the Grant Date, if the Designated
Person is the Committee, or (ii) the ninetieth (90th) day following such
anniversary date, if the Designated Person is the Chief Human Resources Officer
of PNC, whichever is applicable.

 

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 any then outstanding
Unvested Shares will terminate as of the end of the day on the date of such
approval or the day immediately preceding the third (3rd) anniversary of the
Grant Date, whichever is later. 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 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
disapproved the vesting of the Unvested Shares that had remained outstanding
after Grantee’s Termination Date pending 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 Retirement.

 

(a) In the event that Grantee Retires prior to the third (3rd) anniversary of
the Grant Date, Unvested Shares will not be forfeited on Grantee’s Termination
Date. Instead, Unvested Shares will, subject to the forfeiture provisions of
Section 7.2, remain outstanding pending 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 an affirmative 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 an affirmative determination regarding
such vesting; and (2) either (i) the 180th day following the third (3rd)
anniversary of the Grant Date, if the Designated Person is the Committee, or
(ii) the ninetieth (90th) day following such anniversary date, if the Designated
Person is the Chief Human Resources Officer of PNC, whichever is applicable.

 

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 any then outstanding
Unvested Shares will terminate as of the end of the day on the date of such
approval or the day immediately preceding the third (3rd) anniversary of the
Grant Date, whichever is later. 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 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
disapproved the vesting of the Unvested Shares that had remained outstanding
after Grantee’s Termination Date pending 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 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 Subsidiary under an applicable PNC or 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 Subsidiary and Grantee pursuant to the terms
of an agreement or arrangement entered into by PNC or a Subsidiary and Grantee
in lieu of or in addition to the DEAP, then Unvested Shares will not be
forfeited on Grantee’s Termination Date. Instead, Unvested Shares will, subject
to the forfeiture provisions of Section 7.2, remain outstanding pending approval
of the vesting of the Restricted Shares pursuant to this Section 7.6(a) by the
Designated Person specified in Section A.13 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.

 

If such Unvested Shares are still outstanding but the Designated Person has not
made an affirmative 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 an
affirmative determination regarding such vesting; and (2) either (i) the 180th
day following the third (3rd) anniversary of the Grant Date, if the Designated
Person is the Committee, or (ii) the ninetieth (90th) day following such
anniversary date, if the Designated Person is the Chief Human Resources Officer
of PNC, whichever is applicable.

 

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 any then outstanding
Unvested Shares will terminate as

--------------------------------------------------------------------------------

of the end of the day on the date of such approval or the day immediately
preceding the third (3rd) anniversary of the Grant Date, whichever is later. 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 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 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 the non-revocation
of, and the lapse of the time within which Grantee may revoke, such waiver and
release agreement and pending 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 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 in Control.

 

(a) Notwithstanding anything in the Agreement to the contrary, if, after the
occurrence of a CIC Triggering Event but prior to a CIC Failure and prior to the
third (3rd) anniversary of the Grant Date, Grantee’s employment is terminated
(other than by reason of Grantee’s death) by the Corporation without Cause or by
Grantee for Good Reason, or if Grantee’s employment is deemed to have been so
terminated pursuant to Section 7.7(b), 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 (or, in the case of a qualifying termination pursuant to
Section 7.7(b), the date all of the conditions set forth in clauses (i), (ii)
and (iii) of the first or second paragraph, as the case may be, of Section
7.7(b) are met); 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.

 

(b) Grantee’s employment will also be deemed to have been terminated by the
Corporation without Cause after the occurrence of a CIC Triggering Event but
prior to a CIC Failure for purposes of Section 7.7(a) if: (i) Grantee’s
employment is terminated by the Corporation without Cause; (ii) such termination
of employment (a) was at the request of a third party that has taken steps
reasonably calculated to effect a Change in Control, or (b) otherwise arose in
anticipation of a Change in Control; and (iii) a CIC Triggering Event or a
Change in Control occurs within three (3) months of such termination of
employment.

 

Grantee’s employment will also be deemed to have been terminated by Grantee for
Good Reason after the occurrence of a CIC Triggering Event but prior to a CIC
Failure for purposes of Section 7.7(a) if: (i) Grantee terminates Grantee’s
employment with Good Reason; (ii) the circumstance or event that constitutes
Good Reason (a) occurs at the request of a third party that has taken steps
reasonably calculated to effect a Change in Control or (b) otherwise arose in
anticipation of a Change in Control; and (iii) a CIC Triggering Event or a
Change in Control occurs within three (3) months of such termination of
employment.

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For purposes of this Section 7.7(b) only, Grantee will have the burden of
proving that the requirements of clause (ii) of the first or second paragraph of
this Section 7.7(b), as the case may be, have been met and the standard of proof
to be met by Grantee will be clear and convincing evidence.

 

For purposes of this Section 7.7(b) only, the definition of Change in Control in
Section A.6 of Annex A will exclude the proviso in Section A.6(a).

 

(c) If the Unvested Shares will be forfeited by Grantee to PNC by reason of
Grantee’s termination of employment with the Corporation pursuant to Section 7.1
unless all of the conditions set forth in clauses (i), (ii) and (iii) of the
first or second paragraph, as the case may be, of Section 7.7(b) are met, then
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
time all of the conditions set forth in clauses (i), (ii) and (iii) of the first
or second paragraph, as the case may be, of Section 7.7(b) have been met, such
dividend will be held, without interest, pending satisfaction of all of such
conditions. In the event that one or more of the conditions of Section 7.7(b)
are not met, any dividend being held pending satisfaction of such conditions
will be forfeited by Grantee to PNC without payment of any consideration by PNC.

 

(d) If the Unvested Shares will be forfeited by Grantee to PNC by reason of
Grantee’s termination of employment with the Corporation pursuant to Section 7.1
unless all of the conditions set forth in clauses (i), (ii) and (iii) of the
first or second paragraph, as the case may be, of Section 7.7(b) are met, then
the Restricted Shares will remain outstanding pending satisfaction of all of
those conditions. Upon the failure of any required condition, all such Unvested
Shares will be forfeited by Grantee to PNC on the date such failure occurs
without payment of any consideration by PNC.

 

8. Change in Control. Notwithstanding anything in the Agreement to the contrary,
upon the occurrence of a Change in Control: (i) if Grantee is an employee of the
Corporation as of the day immediately preceding the Change in 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 as of the day immediately preceding the Change in
Control; (ii) if Grantee’s employment with the Corporation terminated prior to
the occurrence of the Change in 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 approval of the
vesting of such shares by the Designated Person specified in Section A.13 of
Annex A, then with respect to all Unvested Shares outstanding as of the day
immediately preceding the Change in Control, such 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 in 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. Following termination of the Restricted Period,
PNC will release and 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, PNC or its
designee will deliver such whole shares to, or at the proper direction of,
Grantee or Grantee’s legal representative.

 

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

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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 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 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, 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 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 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 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 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 Grantee assist any other Person
in such activities.

 

Notwithstanding the above, if Grantee’s employment with the Corporation is
terminated by the Corporation without Cause or by Grantee with Good Reason and
such Termination Date occurs during a Coverage Period (either as Coverage Period
is defined in Section A.12 of Annex A or, if Grantee was a party to a written
agreement between Grantee and PNC providing, among other things, for certain
change in control severance benefits (a “CIC Severance Agreement”) that was in
effect at the time of such termination of employment, as Coverage Period is
defined in such CIC Severance Agreement, if longer), then commencing immediately
after such Termination Date, the provisions of subsections (a) and (b) of this
Section 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 twelve (12)
months after the Termination Date, employ or offer to employ, solicit, actively
interfere with PNC’s or any PNC affiliate’s relationship with, or attempt to
divert or entice away, any officer of PNC or any PNC affiliate.

 

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
Subsidiary 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 regard to its
conflict of laws rules. 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
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.

 

16. Modification; Interpretation; Rules and Regulations. The Committee may
modify or amend the terms of the Agreement or the Grant; provided, however, no
modification or amendment of the Agreement or the Grant shall, without the
consent of Grantee, adversely affect the rights or obligations of Grantee.

 

The Committee will have the power to construe and interpret the Agreement. The
Grant and the Agreement are also subject to any administrative guidelines and
other rules and regulations relating to the Grant or the Agreement promulgated
by or under the authority of the Committee. The Committee’s determinations on
matters within its authority will be conclusive and binding on Grantee.

--------------------------------------------------------------------------------

17. Compliance with Internal Revenue Code Section 409A. To the extent that any
of the terms or provisions of the Agreement or of the Grant may result in the
application of Section 409A of the Internal Revenue Code to this Grant, 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 in order to allow the Grant
to be excluded from the definition of “deferred compensation” within the meaning
of such Section 409A or in order to comply with the provisions of Section 409A,
other applicable provision(s) of the Internal Revenue Code and/or any rules,
regulations or other regulatory guidance issued under such statutory provisions.

 

18. 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 and, in the event that
Grantee is subject to the reporting requirements of Section 16(a) of the
Exchange Act with respect to PNC securities, the filing with and acceptance by
the SEC of a Form 4 reporting the Grant, the 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
18.

 

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 18 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.

 

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

--------------------------------------------------------------------------------

Annual 25/25 Program (NEOs) — 200     Restricted Stock Grant

Continued Employment Performance Goal

Restricted Period: Three Years (100%)

 

ANNEX A

TO

THE PNC FINANCIAL SERVICES GROUP, INC.

1996 EXECUTIVE INCENTIVE AWARD PLAN

RESTRICTED STOCK AGREEMENT

 

* * *

 

CERTAIN DEFINITIONS

 

Except where the context otherwise indicates, the following definitions apply
for purposes of the Restricted Stock Agreement (“Agreement”) to which this Annex
A is attached:

 

A.1 “Awarded Shares.” Provided that the Restricted Shares are then outstanding,
Restricted Shares become “Awarded Shares” when both 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; and (b) the Restricted Period has terminated.

 

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

 

A.3 “Business Day” means any day when the New York Stock Exchange is open for
business.

 

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 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 Subsidiary.

 

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

 

A.6 “Change in Control” means a change of control of PNC of a nature that would
be required to be reported in response to Item 6(e) of Schedule 14A of
Regulation 14A (or in response to any similar item on any similar schedule or
form) promulgated under the Exchange Act, whether or not PNC is then subject to
such reporting requirement; provided, however, that without limitation, a Change
in Control 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 twenty percent (20%) or more of the combined
voting power of PNC’s then outstanding securities; provided, however, that such
an acquisition of beneficial ownership representing between twenty percent (20%)
and forty percent (40%), inclusive, of such voting power 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 sixty percent (60%) of the combined
voting power immediately after such Fundamental Transaction of (i) PNC’s
outstanding securities, (ii) the surviving entity’s outstanding securities, or
(iii) in the case of a division, the outstanding securities of each entity
resulting from the division;

 

(c) the shareholders of PNC approve a plan of complete liquidation or winding-up
of PNC or an agreement for the sale or disposition (in one transaction or a
series of transactions) of all or substantially all of PNC’s assets;

 

(d) as a result of a proxy contest, individuals who prior to the conclusion
thereof constituted the Board (including for this purpose any new director whose
election or nomination for election by PNC’s shareholders in connection with
such proxy contest was approved by a vote of at least two-thirds (2/3rds) of the
directors then still in office who were directors prior to such proxy contest)
cease to constitute at least a majority of the Board (excluding any Board seat
that is vacant or otherwise unoccupied);

 

(e) during any period of twenty-four (24) consecutive months, individuals who at
the beginning of such period constituted the Board (including for this purpose
any new director whose election or nomination for election by PNC’s shareholders
was approved by a vote of at least two-thirds (2/3rds) of the directors then
still in office who were directors at the beginning of such period) cease for
any reason to constitute at least a majority of the Board (excluding any Board
seat that is vacant or otherwise unoccupied); or

 

(f) the Board determines that a Change in Control has occurred.

 

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

 

A.7 “CIC Failure” means the following:

 

(a) with respect to a CIC Triggering Event described in Section A.8(a), PNC’s
shareholders vote against the transaction approved by the Board or the agreement
to consummate the transaction is terminated; or

--------------------------------------------------------------------------------

(b) with respect to a CIC Triggering Event described in Section A.8(b), the
proxy contest fails to replace or remove a majority of the members of the Board.

 

A.8 “CIC Triggering Event” means the occurrence of either of the following:

 

(a) the Board or PNC’s shareholders approve a transaction described in
Subsection (b) of the definition of Change in Control contained in Section A.6;
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.

 

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 Subsidiary (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.11 “Corporation” means PNC and its Subsidiaries.

 

A.12 “Coverage Period” means a period (a) commencing on the earlier to occur of
(i) the date of a CIC Triggering Event and (ii) the date of a Change in Control
and (b) ending on the date that is three (3) years after the date of the Change
in Control; provided, however, that in the event that a Coverage Period
commences on the date of a CIC Triggering Event, such Coverage Period will
terminate upon the earlier to occur of (x) the date of a CIC Failure and (y) the
date that is three (3) years after the date of the Change in Control triggered
by the CIC Triggering Event. After the termination of any Coverage Period,
another Coverage Period will commence upon the earlier to occur of clause (a)(i)
and clause (a)(ii) in the preceding sentence.

 

A.13 “Designated Person” will be either: (a) the Committee, 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 (a) 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:

 

(a) Grantee 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 Grantee’s Termination Date and extending
through 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) a material breach by Grantee of (i) any code of conduct of PNC or a
Subsidiary or (ii) 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 a Subsidiary 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 which relates to or arises out of Grantee’s employment or
other service relationship with the Corporation; or

 

(e) entry of any order against Grantee by any governmental body having
regulatory authority with respect to the business of PNC or any Subsidiary,
which order 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 determines that Grantee has engaged
in conduct described in clause (a) above, that Grantee is guilty of conduct
described in clause (b) or clause (c) above, or that an event described in
clause (d) or clause (e) above has occurred with respect to Grantee and, if so,
determines that Grantee will be deemed to have engaged in Detrimental Conduct.

 

A.15 “Exchange Act” means the Securities Exchange Act of 1934 as amended, and
the rules and regulations promulgated thereunder.

 

A.16 “Fair Market Value” as it relates to PNC common stock means the average of
the high and low sale prices of the PNC common stock as reported on the New York
Stock Exchange (or such successor reporting system as PNC may select) on the
relevant date or, if no sale of the PNC common stock has been reported for that
day, the average of such prices on the next preceding day and the next following
day for which there were reported sales.

 

A.17 “Good Reason” means:

 

(a) the assignment to Grantee of any duties inconsistent in any respect with
Grantee’s position (including status, offices, titles and reporting
requirements), authority, duties or responsibilities immediately prior to either
the CIC Triggering Event or the Change in Control, or any other action by the
Corporation which results in a diminution in any respect in such position,
authority, duties or responsibilities, excluding for this purpose an isolated,
insubstantial and inadvertent action not taken in bad faith that is remedied by
the Corporation promptly after receipt of notice thereof given by Grantee;

 

(b) a reduction by the Corporation in Grantee’s annual base salary as in effect
on the Grant Date, as the same may be increased from time to time;

 

(c) the Corporation’s requiring 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 CIC Triggering Event or the Change in Control;

 

(d) the failure by the Corporation (i) to continue in effect any bonus, stock
option or other cash or equity-based incentive plan or program in which Grantee
participates immediately prior to either the CIC Triggering Event or the Change
in Control that is material to Grantee’s total compensation, unless a
substantially equivalent arrangement (embodied in an ongoing substitute or
alternative plan or program) has been made with respect to such plan or program,
or (ii) to continue Grantee’s participation in such plan or program (or in such
substitute or alternative plan or program) on a basis at least as favorable,
both in terms of the amount of benefits provided and the level of Grantee’s
participation relative to other participants, as existed immediately prior to
the CIC Triggering Event or the Change in Control; or

 

(e) the failure by the Corporation to continue to provide Grantee with benefits
substantially similar to those received by Grantee under any of the
Corporation’s pension (including, but not limited to, tax-qualified plans), life
insurance, health, accident, disability or other welfare plans or programs in
which Grantee was participating, at costs substantially similar to those paid by
Grantee, immediately prior to the CIC Triggering Event or the Change in Control.

--------------------------------------------------------------------------------

A.18 “Grant” means the Restricted Shares granted and issued to Grantee pursuant
to Section 1 of the Agreement.

 

A.19 “Grant Date” means the Grant Date set forth on page 1 of the Agreement.

 

A.20 “Grantee” means the person 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 “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.23 “PNC” means The PNC Financial Services Group, Inc.

 

A.24 “Restricted Period” means, subject to early termination if so determined by
the Committee 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 in
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.25 “Retiree” means a Grantee who has Retired.

 

A.26 “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 or, unless the Committee
determines otherwise, termination in connection with a divestiture of assets or
of one or more Subsidiaries) if such termination of employment occurs on or
after the first (1st) day of the first (1st) month coincident with or next
following the date on which Grantee attains age fifty-five (55) and completes
five (5) years of service (as determined in the same manner as the determination
of five years of Vesting Service under the provisions of The PNC Financial
Services Group, Inc. Pension Plan) with the Corporation.

 

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 Subsidiary that ceases to be a
Subsidiary of PNC and Grantee does not continue to be employed by PNC or a
Subsidiary, then for purposes of the Agreement, Grantee’s employment with the
Corporation terminates effective at the time this occurs.

 

A.29 “Three-Year Continued Employment Performance Goal” means, subject to early
achievement if so determined by the Committee 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 in Control is deemed to have occurred.

 

A.30 “Total and Permanent Disability” means, unless the Committee determines
otherwise, Grantee’s disability as determined to be total and permanent by the
Corporation for purposes of the Agreement.

 

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

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FORM OF ANNUAL 25/25 PROGRAM

RESTRICTED AWARD DEFERRAL ACCOUNT AGREEMENT

 

Annual 25/25 Program — Restricted Deferred Award for 200    

Continued Employment Performance Goal

Restricted Period: Three Years (100%)

 

THE PNC FINANCIAL SERVICES GROUP, INC. AND AFFILIATES

DEFERRED COMPENSATION PLAN

* * *

ANNUAL 25/25 PROGRAM

RESTRICTED DEFERRED AWARD FOR 200    

* * *

RESTRICTED AWARD DEFERRAL ACCOUNT AGREEMENT

 

* * *

 

PARTICIPANT:    < name > GRANT DATE:    February     , 200     DEFERRED SHARES:
   < number of shares, including fractions>

 

1. Definitions. Terms defined in The PNC Financial Services Group, Inc. and
Affiliates Deferred Compensation Plan, as amended from time to time (“Plan”),
are used in this Restricted Award Deferral Account Agreement (“Agreement”) as
defined in the Plan unless otherwise defined in Annex A (attached hereto and
incorporated herein by reference) or elsewhere in the Agreement.

 

2. 200     Restricted Award Deferral Account. Subject to the terms and
conditions of the Agreement, The PNC Financial Services Group, Inc. (“PNC”) has,
in connection with the Corporation’s Annual 25/25 Program for 200    , granted
to the Participant named above (“Participant”) a restricted stock award in the
amount of the number of shares of PNC common stock set forth above under
“Deferred Shares.” In accordance with Participant’s prior Deferral Election,
such award has been deferred under the Plan, subject to the terms and conditions
of the Agreement.

 

Upon acceptance of the award of the Deferred Shares (“Award”) and the terms and
conditions of the deferral of such shares under the Plan and the Agreement in
accordance with Section 17, a separate subaccount of Participant’s Plan Account
will be established for Participant under the Plan to reflect the deferral of
such shares (“200     Restricted Award Deferral Account”). The Deferral Amounts
credited to such subaccount will be deemed to be invested in the phantom PNC
Common Stock Fund, such that the initial balance of the 200     Restricted Award
Deferral Account will be a number of units of phantom PNC common stock equal to
the number of Deferred Shares set forth above (“Deferred Share Units”). Except
as otherwise provided in the Agreement, the 200     Restricted Award Deferral
Account will be treated in the same manner and will be subject to the same terms
and conditions as a subaccount established under the Plan for Participant for
cash deferrals.

 

3. Restricted Period. The 200     Restricted Award Deferral Account will be
subject to the following terms and conditions:

 

The 200     Restricted Award Deferral Account and the Deferred Share Units will
be subject to forfeiture and transfer restrictions pursuant to the terms and
conditions of the Agreement during the term of a Restricted Period as provided
in Section A.23 of Annex A.

--------------------------------------------------------------------------------

An appropriate notation that the 200     Restricted Award Deferral Account and
the Deferred Share Units are subject to the terms and conditions of the
Agreement, including such forfeiture possibility and restrictions against
transfer, will be made on the Plan system with respect to the 200     Restricted
Award Deferral Account and the Deferred Share Units. It will also be noted that
release from such terms and conditions will be made only in accordance with the
provisions of the Agreement, a copy of which is on file in the office of the
Corporate Secretary of The PNC Financial Services Group, Inc.

 

To the extent that the Deferred Share Units become Awarded Share Units and are
not forfeited pursuant to Section 7, the 200     Restricted Award Deferral
Account and Deferred Share Units will be released from the terms and conditions
of the Agreement and the 200     Restricted Award Deferral Account will become a
regular subaccount under the Plan pursuant to Section 9 as soon as
administratively practicable following termination of the Restricted Period.

 

4. Phantom Dividends. Subject to Section 7.6(b) or Section 7.7(c), if
applicable, and to Section 17, any earnings credited to Participant under the
Plan with respect to the Deferred Share Units in the 200     Restricted Award
Deferral Account will not be restricted by the Agreement and will be credited to
the subaccount of Participant’s Plan Account that reflects deferrals of cash
annual incentive awards for 200    .

 

5. Capital Adjustments. Deferred Share Units, as units of phantom PNC common
stock, will be subject to such adjustment as may be necessary to reflect the
effect on such units of corporate transactions, including, without limitation,
stock dividends, stock splits, spin-offs, split-offs, recapitalizations,
mergers, consolidations or reorganizations of or by PNC, on shares of PNC common
stock; provided, however, that any share units credited to Participant as deemed
distributions on or in exchange for Unvested Share Units will be credited to the
200     Restricted Award Deferral Account as Deferred Share Units and will be
subject to the terms and conditions of the Agreement as such.

 

6. Prohibitions Against Transfer and Other Limitations. Deferred Share Units may
not be transferred to a subaccount other than the 200     Restricted Award
Deferral Account unless and until they become Awarded Share Units and are
released from the terms and conditions of the Agreement pursuant to Section 9
following termination of the Restricted Period.

 

Participant may not elect to begin distributions or make hardship withdrawals
from the 200     Restricted Award Deferral Account until that subaccount has
been released from the terms and conditions of the Agreement pursuant to Section
9. Any accelerated or other distribution of the 200     Restricted Award
Deferral Account that would otherwise occur pursuant to the Plan, or otherwise,
will be delayed until that subaccount has been released from the terms and
conditions of the Agreement pursuant to Section 9.

 

7. Forfeiture; Death; Qualifying Disability, Retirement or DEAP Termination;
Termination in Anticipation of Change in 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 (a), Section 7.7(b), or Section 8, if applicable, or
unless the Committee determines otherwise, in the event that Participant’s
employment with the Corporation terminates prior to the third (3rd) anniversary
of the Grant Date, all Deferred Share Units that are Unvested Share Units on
Participant’s Termination Date will be forfeited by Participant to PNC without
payment of any consideration by PNC.

 

Upon forfeiture of Unvested Share Units pursuant to the provisions of this
Section 7.1 or the provisions of Section 7.2, Section 7.4(b), Section 7.5(b),
Section 7.6(c) or Section 7.7(d), neither Participant nor any successors, heirs,
assigns or legal representatives of Participant will thereafter have any further
rights or interest in such Unvested Share Units.

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

 

7.3 Death. In the event of Participant’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 those Unvested Share Units
then in effect will terminate on the date of Participant’s death.

 

The Deferred Share Units which thereby become Awarded Share Units will be
released from the terms and conditions of the Agreement pursuant to Section 9 as
soon as administratively practicable following such date.

 

7.4 Disability Termination.

 

(a) In the event Participant’s employment with the Corporation is terminated
prior to the third (3rd) anniversary of the Grant Date by the Corporation by
reason of Participant’s Total and Permanent Disability, Unvested Share Units
will not be forfeited on Participant’s Termination Date. Instead, Unvested Share
Units will, subject to the forfeiture provisions of Section 7.2, remain in
effect pending approval of the vesting of the Deferred Share Units pursuant to
this Section 7.4(a) by the Designated Person specified in Section A.14 of Annex
A.

 

If such Unvested Share Units are still in effect but the Designated Person has
not made an affirmative determination to either approve or disapprove the
vesting of the Unvested Share Units 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 an affirmative 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, whichever is applicable.

 

If the vesting of the Unvested Share Units that are then in effect 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 any
Unvested Share Units then in effect will terminate as of the end of the day on
the date of such approval or the day immediately preceding the third (3rd)
anniversary of the Grant Date, whichever is later. The Deferred Share Units in
effect at the termination of the Restricted Period will become Awarded Share
Units and will be released from the terms and conditions of the Agreement
pursuant to Section 9.

 

(b) If the Designated Person disapproves the vesting of the Unvested Share Units
that had remained in effect after Participant’s Termination Date pending
approval of vesting, then all such Unvested Share Units that are still in effect
will be forfeited by Participant 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
disapproved the vesting of the Unvested Share Units that had remained in effect
after Participant’s Termination Date pending approval of vesting, then all such
Unvested Share Units that are still in effect will be forfeited by Participant
to PNC at the close of business on the last day of the Restricted Period without
payment of any consideration by PNC.

 

7.5 Retirement.

 

(a) In the event that Participant Retires prior to the third (3rd) anniversary
of the Grant Date, Unvested Share Units will not be forfeited on Participant’s
Termination Date. Instead, Unvested Share Units will, subject to the forfeiture
provisions of Section 7.2, remain in effect pending approval of the vesting of
the Deferred Share Units pursuant to this Section 7.5(a) by the Designated
Person specified in Section A.14 of Annex A.

 

If such Unvested Share Units are still in effect but the Designated Person has
not made an affirmative determination to either approve or disapprove the
vesting of the Unvested Share Units 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 an affirmative 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, whichever is applicable.

 

If the vesting of the Unvested Share Units that are then in effect 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 any
Unvested Share Units then in effect will terminate as of the end of the day on
the date of such approval or the day immediately preceding the third (3rd)
anniversary of the Grant Date, whichever is later. The Deferred Share Units in
effect at the termination of the Restricted Period will become Awarded Shares
and will be released and issued or reissued by PNC pursuant to Section 9.

 

(b) If the Designated Person disapproves the vesting of the Unvested Share Units
that had remained in effect after Participant’s Termination Date pending
approval of vesting, then all such Unvested Share Units that are still in effect
will be forfeited by Participant 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
disapproved the vesting of the Unvested Share Units that had remained
outstanding after Participant’s Termination Date pending approval of vesting,
then all such Unvested Share Units that are still in effect will be forfeited by
Participant to PNC at the close of business on the last day of the Restricted
Period without payment of any consideration by PNC.

 

7.6 DEAP Termination.

 

(a) In the event that Participant’s employment with the Corporation is
terminated prior to the third (3rd) anniversary of the Grant Date by the
Corporation and Participant 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 Participant is offered and has entered into a similar
waiver and release agreement between PNC or a Subsidiary and Participant
pursuant to the terms of an agreement or arrangement entered into by PNC or a
Subsidiary and Participant in lieu of or in addition to the DEAP, then Unvested
Share Units will not be forfeited on Participant Termination Date. Instead,
Unvested Share Units will, subject to the forfeiture provisions of Section 7.2,
remain in effect pending approval of the vesting of the Deferred Share

--------------------------------------------------------------------------------

Units pursuant to this Section 7.6(a) by the Designated Person specified in
Section A.14 of Annex A, provided that Participant does not revoke such waiver
and release agreement within the time for revocation of such waiver and release
agreement by Participant.

 

If such Unvested Share Units are still in effect but the Designated Person has
not made an affirmative determination to either approve or disapprove the
vesting of the Unvested Share Units 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 an affirmative 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, whichever is applicable.

 

If the vesting of the Unvested Share Units that are then in effect 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 any
Unvested Share Units then in effect will terminate as of the end of the day on
the date of such approval or the day immediately preceding the third (3rd)
anniversary of the Grant Date, whichever is later. The Deferred Share Units in
effect at the termination of the Restricted Period will become Awarded Share
Units and will be released from the terms and conditions of the Agreement
pursuant to Section 9.

 

(b) In the event that the record date for any phantom dividend to be credited to
Participant’s Plan Account with respect to the Unvested Share Units occurs on or
after Participant’s Termination Date but prior to the lapse of the time for
revocation by Participant of the waiver and release agreement specified in the
first paragraph of Section 7.6(a), then such phantom dividend will be held,
without interest, pending satisfaction of the condition of Section 7.6(a) that
Participant 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 Participant. In the event that this condition is not met, any
phantom dividend being held pending satisfaction of such condition will be
forfeited by Participant to PNC without payment of any consideration by PNC.

 

(c) If (i) Participant 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 Share
Units that had remained in effect after Participant’s Termination Date pending
the non-revocation of, and the lapse of the time within which Participant may
revoke, such waiver and release agreement and pending approval of the vesting of
such share units, then all such Unvested Share Units that are still in effect
will be forfeited by Participant 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 Share Units are still outstanding but the Designated
Person has neither affirmatively approved nor disapproved the vesting of such
shares units, then all such Unvested Share Units will be forfeited by
Participant 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 in Control.

 

(a) Notwithstanding anything in the Agreement to the contrary, if, after the
occurrence of a CIC Triggering Event but prior to a CIC Failure and prior to the
third (3rd) anniversary of the Grant Date, Participant’s employment is
terminated (other than by reason of Participant’s death) by the Corporation
without Cause or by Participant for Good Reason, or if Participant’s employment
is deemed to have been so terminated pursuant to Section 7.7(b), then: (i) the
Three-Year Continued Employment Performance Goal will be deemed to have been
achieved and the Restricted Period with respect to any Unvested Share Units then
in effect will terminate as of the end of the day on the day immediately
preceding Participant’s Termination Date (or, in the case of a qualifying
termination pursuant to Section 7.7(b), the date all of the

--------------------------------------------------------------------------------

conditions set forth in clauses (i), (ii) and (iii) of the first or second
paragraph, as the case may be, of Section 7.7(b) are met); and (ii) all Deferred
Share Units that thereby become Awarded Share Units will be released from the
terms and conditions of the Agreement pursuant to Section 9 as soon as
administratively practicable following such date.

 

(b) Participant’s employment will also be deemed to have been terminated by the
Corporation without Cause after the occurrence of a CIC Triggering Event but
prior to a CIC Failure for purposes of Section 7.7(a) if: (i) Participant’s
employment is terminated by the Corporation without Cause; (ii) such termination
of employment (a) was at the request of a third party that has taken steps
reasonably calculated to effect a Change in Control or (b) otherwise arose in
anticipation of a Change in Control; and (iii) a CIC Triggering Event or a
Change in Control occurs within three (3) months of such termination of
employment.

 

Participant’s employment will also be deemed to have been terminated by
Participant for Good Reason after the occurrence of a CIC Triggering Event but
prior to a CIC Failure for purposes of Section 7.7(a) if: (i) Participant
terminates Participant’s employment with Good Reason; (ii) the circumstance or
event that constitutes Good Reason (a) occurs at the request of a third party
that has taken steps reasonably calculated to effect a Change in Control or (b)
otherwise arose in anticipation of a Change in Control; and (iii) a CIC
Triggering Event or a Change in Control occurs within three (3) months of such
termination of employment.

 

For purposes of this Section 7.7(b) only, Participant will have the burden of
proving that the requirements of clause (ii) of the first or second paragraph of
this Section 7.7(b), as the case may be, have been met and the standard of proof
to be met by Participant will be clear and convincing evidence.

 

For purposes of this Section 7.7(b) only, the definition of Change in Control in
Section A.6 of Annex A will exclude the proviso in Section A.6(a).

 

(c) If the Unvested Share Units will be forfeited by Participant to PNC by
reason of Participant’s termination of employment with the Corporation pursuant
to Section 7.1 unless all of the conditions set forth in clauses (i), (ii) and
(iii) of the first or second paragraph, as the case may be, of Section 7.7(b)
are met, then in the event that the record date for any phantom dividend to be
credited to Participant’s Plan Account with respect to the Unvested Share Units
occurs on or after Participant’s Termination Date but prior to the time all of
the conditions set forth in clauses (i), (ii) and (iii) of the first or second
paragraph, as the case may be, of Section 7.7(b) are met, such phantom dividend
will be held, without interest, pending satisfaction of all of such conditions.
In the event that one or more of the conditions of Section 7.7(b) are not met,
any phantom dividend being held pending satisfaction of such conditions will be
forfeited by Participant to PNC without payment of any consideration by PNC.

 

(d) If the Unvested Share Units will be forfeited by Participant to PNC by
reason of Participant’s termination of employment with the Corporation pursuant
to Section 7.1 unless all of the conditions set forth in clauses (i), (ii) and
(iii) of the first or second paragraph, as the case may be, of Section 7.7(b)
are met, then the Deferred Share Units will remain in effect pending
satisfaction of all of those conditions. Upon the failure of any required
condition, all such Unvested Share Units will be forfeited by Participant to PNC
on the date such failure occurs without payment of any consideration by PNC.

 

8. Change in Control. Notwithstanding anything in the Agreement to the contrary,
upon the occurrence of a Change in Control: (i) if Participant is an employee of
the Corporation as of the day immediately preceding the Change in 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 Unvested
Share Units then in effect as of the day immediately preceding the Change in
Control; (ii) if Participant’s employment with the Corporation terminated prior
to the occurrence of the Change in Control but the Unvested Share Units remained
in effect after such termination of employment pursuant to Section 7.4, Section
7.5 or Section 7.6 and are still in effect pending approval of the vesting of
such share units by the Designated Person specified in Section A.14 of Annex A,
then with respect to all Unvested Share Units in effect as of the day
immediately preceding the Change in Control, such 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 in

--------------------------------------------------------------------------------

Control, provided, however, in the case of Unvested Share Units that remained
outstanding post-employment solely pursuant to Section 7.6(a), that Participant
entered into and does not revoke the waiver and release agreement specified in
Section 7.6(a); and (iii) all Deferred Share Units that thereby become Awarded
Share Units will be released from the terms and conditions of the Agreement
pursuant to Section 9 as soon as administratively practicable following such
date.

 

9. Release of Agreement Restrictions. To the extent that the Deferred Share
Units become Awarded Share Units and are not forfeited pursuant to Section 7,
PNC will release the 200     Restricted Award Deferral Account and Deferred
Share Units from the terms and conditions of the Agreement and the 200    
Restricted Award Deferral Account will become a regular subaccount under the
Plan as soon as administratively practicable following termination of the
Restricted Period.

 

10. FICA Withholding Taxes. During the term of the Restricted Period, any
earnings credited to Participant’s Plan Account with respect to the Deferred
Share Units in the 200     Restricted Award Deferral Account (phantom dividends)
will be treated as wages for purposes of the Federal Insurance Contributions Act
(“FICA”) in the year they are credited to Participant and will be subject to
Social Security and Medicare withholding at that time. Otherwise, the Deferred
Shares amount will be treated as wages for FICA purposes and will be subject to
Social Security and Medicare withholding at the time the 200     Restricted
Award Deferral Account and Deferred Share Units are released from the terms and
conditions of the Agreement pursuant to Section 9.

 

11. Employment. Neither the granting of the Award, the release of the 200    
Restricted Award Deferral Account and Deferred Share Units from the terms and
conditions of the Agreement pursuant to Section 9, 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 Participant for any
period or in any way alter Participant’s status as an employee at will.

 

12. Subject to the Plan. Except as otherwise provided in the Agreement, the
200     Restricted Award Deferral Account and Deferred Share Units are in all
respects subject to the terms and conditions of the Plan, which has been made
available to Participant and is incorporated herein by reference.

 

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 Participant and PNC and supersedes all
other discussions, negotiations, correspondence, representations, understandings
and agreements between the parties with respect to the subject matter hereof.

 

14. Participant Covenants.

 

14.1 General. Participant and PNC acknowledge and agree that Participant has
received adequate consideration with respect to enforcement of the provisions of
Sections 14 and 15, 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 Participant from earning a
living.

 

14.2 Non-Solicitation; No-Hire. Participant 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 Participant’s
Termination Date regardless of the reason for such termination of employment.

 

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

 

Notwithstanding the above, if Participant’s employment with the Corporation is
terminated by the Corporation without Cause or by Participant with Good Reason
and such Termination Date occurs during a Coverage Period (either as Coverage
Period is defined in Section A.12 of Annex A or, if Participant was a party to a
written agreement between Participant and PNC providing, among other things, for
certain change in control severance benefits (a “CIC Severance Agreement”) that
was in effect at the time of such termination of employment, as Coverage Period
is defined in such CIC Severance Agreement, if longer), then commencing
immediately after such Termination Date, the provisions of subsections (a) and
(b) of this Section 14.2 will no longer apply and will be replaced with the
following subsection (c):

 

(c) No-Hire. Participant agrees that Participant shall not, for a period of
twelve (12) months after the Termination Date, employ or offer to employ,
solicit, actively interfere with PNC’s or any PNC affiliate’s relationship with,
or attempt to divert or entice away, any officer of PNC or any PNC affiliate.

 

14.3 Confidentiality. During Participant’s employment with the Corporation, and
thereafter regardless of the reason for termination of such employment,
Participant 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 Participant, 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. Participant 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 Participant during the term of
Participant’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”).
Participant agrees to assign and hereby does assign to PNC or its designee all
of Participant’s right, title and interest, including copyrights and patent
rights, in and to all Developments. Participant 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 Participant without
further compensation and will continue beyond the Termination Date.

 

15. Enforcement Provisions. Participant 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 regard to its
conflict of laws rules. 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, Participant
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 Participant, and each and every person and entity
acting in concert or participating with Participant, from initiation and/or
continuation of such breach.

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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 Participant 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 Participant
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 Participant.

 

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

 

16. Compliance with Internal Revenue Code Section 409A. To the extent that any
of the terms or provisions of the Agreement or of the Award may result in the
application of Section 409A of the Internal Revenue Code to this Award, PNC may,
without the consent of Participant, modify the Agreement and the Award to the
extent and in the manner PNC deems necessary or advisable in order to allow the
Award to be excluded from the definition of “deferred compensation” within the
meaning of such Section 409A or in order to comply with the provisions of
Section 409A, other applicable provision(s) of the Internal Revenue Code and/or
any rules, regulations or other regulatory guidance issued under such statutory
provisions.

 

17. Acceptance of Award; PNC Right to Cancel. If Participant does not accept the
Award and the terms and conditions of the deferral of the Deferred Shares 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
Participant of a copy of the Agreement, PNC may, in its sole discretion,
withdraw its offer and cancel the Award at any time prior to Participant’s
delivery to PNC of a copy of the Agreement executed by Participant. Otherwise,
upon execution and delivery of the Agreement by both PNC and Participant and, in
the event that Participant is subject to the reporting requirements of Section
16(a) of the Exchange Act with respect to PNC securities, the filing with and
acceptance by the SEC of a Form 4 reporting the Award, the Award and the
Agreement are effective.

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The 200     Restricted Award Deferral Account will not be established and
Participant’s Plan Account will not be credited with any phantom dividends with
respect to the Deferred Share Units as set forth in Section 4 unless and until
the date the Award and the terms and conditions of the deferral of the Deferred
Shares are accepted and are effective in accordance with this Section 17.

 

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 Award and the terms and
conditions of the deferral of the Deferred Shares are accepted and are effective
in accordance with this Section 17, then upon the effectiveness of the Award and
the Agreement, Participant’s Plan Account will be credited with an amount
equivalent to the amount that would have been credited to such Plan Account with
respect to phantom dividends had the Agreement been effective and the Deferred
Share Units had been credited to Participant’s 200     Restricted Award Deferral
Account on the Grant Date.

 

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:  

 

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    Chairman and Chief Executive Officer ATTEST: By:  

 

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    Corporate Secretary ACCEPTED AND AGREED TO by PARTICIPANT.

 

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Participant

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Annual 25/25 Program — Restricted Deferred Award for 200    

Continued Employment Performance Goal

Restricted Period: Three Years (100%)

 

ANNEX A

TO

THE PNC FINANCIAL SERVICES GROUP, INC. AND AFFILIATES

DEFERRED COMPENSATION PLAN

ANNUAL 25/25 PROGRAM — RESTRICTED DEFERRED AWARD FOR 200    

RESTRICTED AWARD DEFERRAL ACCOUNT AGREEMENT

 

* * *

 

CERTAIN DEFINITIONS

 

Except where the context otherwise indicates, the following definitions apply
for purposes of the Restricted Award Deferral Account Agreement (“Agreement”) to
which this Annex A is attached:

 

A.1 “Awarded Share Units.” Provided that the Deferred Share Units have not been
forfeited pursuant to Section 7 of the Agreement, Deferred Share Units become
“Awarded Share Units” when both 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; and (b) the
Restricted Period has terminated.

 

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

 

A.3 “Business Day” means any day when the New York Stock Exchange is open for
business.

 

A.4 “Cause” means:

 

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

 

(b) the willful engaging by Participant in illegal conduct or gross misconduct
that is materially and demonstrably injurious to PNC or any Subsidiary.

 

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

 

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

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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 Participant, together
with written notice that PNC believes that Participant is guilty of conduct
described in clause (a) or clause (b) above and, in either case, specifying the
particulars thereof in detail, and (ii) Participant is given an opportunity,
together with counsel, to be heard before the Board.

 

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

 

A.6 “Change in Control” means a change of control of PNC of a nature that would
be required to be reported in response to Item 6(e) of Schedule 14A of
Regulation 14A (or in response to any similar item on any similar schedule or
form) promulgated under the Exchange Act, whether or not PNC is then subject to
such reporting requirement; provided, however, that without limitation, a Change
in Control 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 twenty percent (20%) or more of the combined
voting power of PNC’s then outstanding securities; provided, however, that such
an acquisition of beneficial ownership representing between twenty percent (20%)
and forty percent (40%), inclusive, of such voting power 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 sixty percent (60%) of the combined
voting power immediately after such Fundamental Transaction of (i) PNC’s
outstanding securities, (ii) the surviving entity’s outstanding securities, or
(iii) in the case of a division, the outstanding securities of each entity
resulting from the division;

 

(c) the shareholders of PNC approve a plan of complete liquidation or winding-up
of PNC or an agreement for the sale or disposition (in one transaction or a
series of transactions) of all or substantially all of PNC’s assets;

 

(d) as a result of a proxy contest, individuals who prior to the conclusion
thereof constituted the Board (including for this purpose any new director whose
election or nomination for election by PNC’s shareholders in connection with
such proxy contest was approved by a vote of at least two-thirds (2/3rds) of the
directors then still in office who were directors prior to such proxy contest)
cease to constitute at least a majority of the Board (excluding any Board seat
that is vacant or otherwise unoccupied);

 

(e) during any period of twenty-four (24) consecutive months, individuals who at
the beginning of such period constituted the Board (including for this purpose
any new director whose election or nomination for election by PNC’s shareholders
was approved by a vote of at least two-thirds (2/3rds) of the directors then
still in office who were directors at the beginning of such period) cease for
any reason to constitute at least a majority of the Board (excluding any Board
seat that is vacant or otherwise unoccupied); or

 

(f) the Board determines that a Change in Control has occurred.

 

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

 

A.7 “CIC Failure” means the following:

 

(a) with respect to a CIC Triggering Event described in Section A.8(a), PNC’s
shareholders vote against the transaction approved by the Board or the agreement
to consummate the transaction is terminated; or

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(b) with respect to a CIC Triggering Event described in Section A.8(b), the
proxy contest fails to replace or remove a majority of the members of the Board.

 

A.8 “CIC Triggering Event” means the occurrence of either of the following:

 

(a) the Board or PNC’s shareholders approve a transaction described in
Subsection (b) of the definition of Change in Control contained in Section A.6;
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.

 

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 Subsidiary (a) engaged in business activities similar to some or all of the
business activities of PNC or any Subsidiary as of Participant’s Termination
Date or (b) engaged in business activities which Participant knows PNC or any
Subsidiary intends to enter within the first twelve (12) months after
Participant’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 Participant
is acting as agent, consultant, independent contractor, employee, officer,
director, investor, partner, shareholder, proprietor or in any other individual
or representative capacity therein.

 

A.11 “Corporation” means PNC and its Subsidiaries.

 

A.12 “Coverage Period” means a period (a) commencing on the earlier to occur of
(i) the date of a CIC Triggering Event and (ii) the date of a Change in Control
and (b) ending on the date that is three (3) years after the date of the Change
in Control; provided, however, that in the event that a Coverage Period
commences on the date of a CIC Triggering Event, such Coverage Period will
terminate upon the earlier to occur of (x) the date of a CIC Failure and (y) the
date that is three (3) years after the date of the Change in Control triggered
by the CIC Triggering Event. After the termination of any Coverage Period,
another Coverage Period will commence upon the earlier to occur of clause (a)(i)
and clause (a)(ii) in the preceding sentence.

 

A.13 “Deferred Share Units” means the units of phantom PNC common stock credited
to Participant’s 200     Restricted Award Deferral Account.

 

A.14 “Designated Person” will be either: (a) the Committee, if Participant 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 (a) the Chief Human Resources Officer of PNC,
if Participant is not within one of the groups specified in Section A.14(a).

 

A.15 “Detrimental Conduct” means:

 

(a) Participant 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 Participant’s Termination Date and
extending through the first (1st) anniversary of the later of (i) Participant’s
Termination Date and, if different, (ii) the first date after Participant’s
Termination Date as of which Participant ceases to be engaged by the Corporation
in any capacity for which Participant 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) a material breach by Participant of (i) any code of conduct of PNC or a
Subsidiary or (ii) 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
Participant against PNC or a Subsidiary or any client or customer of PNC or a
Subsidiary;

 

(d) any conviction (including a plea of guilty or of nolo contendere) of
Participant for, or entry by Participant into a pre-trial disposition with
respect to, the commission of a felony which relates to or arises out of
Participant’s employment or other service relationship with the Corporation; or

 

(e) entry of any order against Participant by any governmental body having
regulatory authority with respect to the business of PNC or any Subsidiary,
which order relates to or arises out of Participant’s employment or other
service relationship with the Corporation.

 

Participant will be deemed to have engaged in Detrimental Conduct for purposes
of the Agreement only if and when the Committee determines that Participant has
engaged in conduct described in clause (a) above, that Participant is guilty of
conduct described in clause (b) or clause (c) above, or that an event described
in clause (d) or clause (e) above has occurred with respect to Participant and,
if so, determines that Participant will be deemed to have engaged in Detrimental
Conduct.

 

A.16 “Exchange Act” means the Securities Exchange Act of 1934 as amended, and
the rules and regulations promulgated thereunder.

 

A.17 “Good Reason” means:

 

(a) the assignment to Participant of any duties inconsistent in any respect with
Participant’s position (including status, offices, titles and reporting
requirements), authority, duties or responsibilities immediately prior to either
the CIC Triggering Event or the Change in Control, or any other action by the
Corporation which results in a diminution in any respect in such position,
authority, duties or responsibilities, excluding for this purpose an isolated,
insubstantial and inadvertent action not taken in bad faith that is remedied by
the Corporation promptly after receipt of notice thereof given by Participant;

 

(b) a reduction by the Corporation in Participant’s annual base salary as in
effect on the Grant Date, as the same may be increased from time to time;

 

(c) the Corporation’s requiring Participant to be based at any office or
location that is more than fifty (50) miles from Participant’s office or
location immediately prior to either the CIC Triggering Event or the Change in
Control;

 

(d) the failure by the Corporation (i) to continue in effect any bonus, stock
option or other cash or equity-based incentive plan or program in which
Participant participates immediately prior to either the CIC Triggering Event or
the Change in Control that is material to Participant’s total compensation,
unless a substantially equivalent arrangement (embodied in an ongoing substitute
or alternative plan or program) has been made with respect to such plan or
program, or (ii) to continue Participant’s participation in such plan or program
(or in such substitute or alternative plan or program) on a basis at least as
favorable, both in terms of the amount of benefits provided and the level of
Participant’s participation relative to other participants, as existed
immediately prior to the CIC Triggering Event or the Change in Control; or

 

(e) the failure by the Corporation to continue to provide Participant with
benefits substantially similar to those received by Participant under any of the
Corporation’s pension (including, but not limited to, tax-qualified plans), life
insurance, health, accident, disability or other welfare plans or programs in
which Participant was participating, at costs substantially similar to those
paid by Participant, immediately prior to the CIC Triggering Event or the Change
in Control.

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A.18 “Grant Date” means the Grant Date set forth on page 1 of the Agreement.

 

A.19 “Internal Revenue Code” means the Internal Revenue Code of 1986 as amended,
and the rules and regulations promulgated thereunder.

 

A.20 “Participant” means the Participant named on page 1 of the Agreement.

 

A.21 “Person” has the meaning given in Section 3(a)(9) of the Exchange Act and
also includes any syndicate or group deemed to be a person under Section
13(d)(3) of the Exchange Act.

 

A.22 “PNC” means The PNC Financial Services Group, Inc.

 

A.23 “Restricted Period” means, subject to early termination if so determined by
the Committee 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 Participant’s death; (b) the day immediately preceding the day a Change in
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.24 “Retiree” means a Participant who has Retired.

 

A.25 “Retire” or “Retirement” means termination of Participant’s employment with
the Corporation at any time and for any reason (other than termination by reason
of Participant’s death or by the Corporation for Cause or, unless the Committee
determines otherwise, termination in connection with a divestiture of assets or
of one or more Subsidiaries) if such termination of employment occurs on or
after the first (1st) day of the first (1st) month coincident with or next
following the date on which Participant attains age fifty-five (55) and
completes five (5) years of service (as determined in the same manner as the
determination of five years of Vesting Service under the provisions of The PNC
Financial Services Group, Inc. Pension Plan) with the Corporation.

 

A.26 “SEC” means the United States Securities and Exchange Commission.

 

A.27 “Termination Date” means Participant’s last date of employment with the
Corporation. If Participant is employed by a Subsidiary that ceases to be a
Subsidiary of PNC and Participant does not continue to be employed by PNC or a
Subsidiary, then for purposes of the Agreement, Participant’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 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 Participant 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 Participant’s death; and
(c) the day a Change in Control is deemed to have occurred.

 

A.29 “Total and Permanent Disability” means, unless the Committee determines
otherwise, Participant’s disability as determined to be total and permanent by
the Corporation for purposes of the Agreement.

 

A.30 “200     Restricted Award Deferral Account” means the subaccount of
Participant’s Plan Account established for Participant under the Plan in
accordance with Section 2 of the Agreement.

 

A.31 “Unvested Share Units” means any Deferred Share Units that are not Awarded
Share Units.