Document:

Exhibit

PERFORMANCE STOCK AWARD AGREEMENT

pursuant to the

CHESAPEAKE UTILITIES CORPORATION
2013 STOCK AND INCENTIVE COMPENSATION PLAN

On February __, 2017, (the “Grant Date”), Chesapeake Utilities Corporation, a Delaware corporation (the “Company”), has granted to                      (the “Grantee”), who resides at                                  , a Performance Stock Award on the terms and subject to the conditions of this Performance Stock Award Agreement.  

Recitals

WHEREAS, the Chesapeake Utilities Corporation 2013 Stock and Incentive Compensation Plan (the “Plan”) has been duly adopted by action of the Company's Board of Directors (the “Board”) on March 6, 2013 and approved by the Shareholders of the Company at a meeting held on May 2, 2013; and

WHEREAS, the Committee of the Board of Directors of the Company referred to in the Plan (the “Committee”) has determined that it is in the best interests of the Company to grant the Performance Stock Award described herein pursuant to the Plan; and

WHEREAS, the shares of the Common Stock of the Company (“Shares”) that are subject to this Agreement, when added to the other shares of Common Stock that are subject to awards granted under the Plan, do not exceed the total number of shares of Common Stock with respect to which awards are authorized to be granted under the Plan or the total number of shares of Common Stock that may be granted to an individual in a single calendar year.

Agreement

It is hereby covenanted and agreed by and between the Company and the Grantee as follows:

Section 1.    Performance Stock Award and Performance Period

The Company hereby grants to the Grantee a Performance Stock Award as of the Grant Date.  As more fully described herein, the Grantee may earn up to ________ Shares upon the Company's achievement of the performance criteria set forth in Section 2 (the “Performance Shares”) over the performance period from January 1, 2017 to December 31, 2019 (the “Performance Period”).  This Award has been granted pursuant to the Plan; capitalized terms used in this agreement which are not specifically defined herein shall have the meanings ascribed to such terms in the Plan.

Section 2.    Performance Criteria and Terms of Stock Award

(a)The Committee selected and established in writing performance criteria for the Performance Period, which, if met, may entitle the Grantee to some or all of the Performance Shares under this Award.  If this Award is intended by the Committee to comply 

with the exception from Code Section 162(m) for qualified performance-based compensation for Grantees who are “Covered Employees” as defined in Code Section 162(m), the performance criteria established shall be based on one or more Qualifying Performance Criteria selected by the Committee in writing within 90 days following the first day of the Performance Period (or, if earlier, before 25% of that period has elapsed), and at a time when the outcome relative to the attainment of the performance criteria is not substantially certain.  As soon as practicable after the Company’s independent auditors have certified the Company’s financial statements for each fiscal year of the Company in the Performance Period, the Committee shall determine for purposes of this Agreement the Company’s (1) total shareholder return, defined as the cumulative total return to shareholders (“Shareholder Value”), (2) growth in long-term earnings, defined as the growth in total capital expenditures as a percentage of total capitalization (“Growth”) and (3) earnings performance, defined as average return on equity (“RoE”), in accordance with procedures established by the Committee.  The Shareholder Value, Growth and RoE (each a “Performance Metric” and collectively, the “Performance Metrics”) shall be determined by the Committee in accordance with the terms of the Plan and this Agreement based on financial results reported to shareholders in the Company’s annual reports and may be subject to adjustment by the Committee for extraordinary events during the Performance Period, as applicable.  Both the Shareholder Value and the Growth Performance Metrics will be compared to the performance of the 2017-2019 Performance Peer Group, Attachment A here and to the 2017-2019 Long-Term Award Resolution (collectively referred to as the “Peer Group”) for the Performance Period and Awards will be determined according to the schedule in subsection (b) below.  For Shareholder Value, the calculation of total shareholder return will utilize the average closing stock price from November 1 through December 31 immediately preceding the beginning and at the end of the performance period.  For the average RoE Performance Metric, the Company’s performance will be compared to pre-determined RoE thresholds established by the Committee.  At the end of the Performance Period, the Committee shall certify in writing the extent to which the Performance Goals were met during the Performance Period for Awards for Covered Employees.  If the Performance Goals for the Performance Period are met, Covered Employees shall be entitled to the Award, subject to the Committee’s exercise of discretion to reduce any Award to a Covered Employee based on business objectives established for that Covered Employee or other factors as determined by the Committee in its sole discretion.  The Committee shall promptly notify the Grantee of its determination.

(b)The Grantee may earn 50% percent or more of the target award of ________ Performance Shares (the “Target Award”) up to a maximum number of Performance Shares set forth in Section 1 above (the “Maximum Award”) based upon achievement of threshold and target levels of performance against the Performance Metrics established for the Performance Period .  The Committee shall confirm the level of Award attained for the Performance Period after the Company’s independent auditors have certified the Company’s financial statements for each fiscal year of the Company in the Performance Period.
 
(c)    Once established, the performance criteria identified above normally shall not be changed during the Performance Period.  However, if any of the companies in the Peer Group cease to be publically traded, they will automatically be deleted from the Peer Group.  In addition, if the Committee determines that external changes or other unanticipated business conditions have materially affected the fairness of the goals, or that a change in the business, operations, corporate structure or capital structure of the Company, or the manner in which it conducts its business, or 

acquisitions or divestitures of subsidiaries or business units, or other events or circumstances materially affect the performance criteria or render the performance criteria unsuitable, then the Committee may approve appropriate adjustments to the performance criteria (either up or down) during the Performance Period.  Notwithstanding the foregoing, no changes shall be made to an Award intended to satisfy the requirements of Code Section 162(m) if such changes would affect the qualification of the Award as performance-based compensation within the meaning of Code Section 162(m).

(d)    Performance Shares that are earned by the Grantee pursuant to this Section 2 shall be issued promptly, without payment of consideration by the Grantee, within 2 1⁄2 months of the end of the Performance Period.  The Grantee shall have the right to vote the Performance Shares and to receive the dividends distributable with respect to such Shares on and after, but not before, the date on which the Grantee is recorded on the Company's ledger as holder of record of the Performance Shares (the “Issue Date”).  If, however, the Grantee receives Shares as part of any dividend or other distribution with respect to the Performance Shares, such Shares shall be treated as if they are Performance Shares, and such Shares shall be subject to all of the terms and conditions imposed by this Section 2.  Notwithstanding the foregoing, the Grantee shall be entitled to receive an amount in cash, equivalent to the dividends that would have been paid on the awarded Performance Shares from the Grant Date to the Issue Date for those Performance Shares actually earned by the Grantee during the applicable Performance Period.  Such dividend equivalents shall be payable at the time such Performance Shares are issued.  
    
(e)    The Performance Shares will not be registered for resale under the Securities Act of 1933 or the laws of any state except when and to the extent determined by the Board pursuant to a resolution.  Until a registration statement is filed and becomes effective, however, transfer of the Performance Shares shall require the availability of an exemption from such registration, and prior to the issuance of new certificates, the Company shall be entitled to take such measures as it deems appropriate (including but not limited to obtaining from the Grantee an investment representation letter and/or further legending the new certificates) to ensure that the Performance Shares are not transferred in the absence of such exemption.

(f)      In the event of a Change in Control, as defined in the Plan, during the Performance Period, the Grantee shall earn the Target Award of Performance Shares set forth in this Section 2, as if all performance criteria were satisfied, without any pro ration based on the proportion of the Performance Period that has expired as of the date of such Change in Control.

(g)    If, during the Performance Period, the Grantee has a Termination of Employment, Performance Shares shall be deemed earned or forfeited as follows:

(1)    Upon voluntary Termination of Employment by the Grantee or termination by the Company for failure of job performance or other just cause as determined by the Committee, all unearned Performance Shares shall be forfeited immediately; and

(2)    If the Grantee has a Termination of Employment by reason of death or Disability or Retirement (as such terms are defined in the Plan), the number of Performance Shares that would otherwise have been earned at the end of the Performance Period shall be reduced by pro rating such Performance Shares based on the proportion of the Performance Period during which the Grantee was employed by the Company (based upon the full months of the Performance Period elapsed as of the end of the month in which the Termination of Employment occurred over the total number of months in the Performance 

Period), unless the Committee determines that the Performance Shares shall not be so reduced.

(a)The Grantee shall be solely responsible for any federal, state and local taxes of any kind imposed in connection with the vesting or delivery of the Performance Shares.  Prior to the transfer of any Performance Shares to the Grantee, the Grantee shall remit to the Company an amount sufficient to satisfy any federal, state, local and other withholding tax requirements.  The Grantee may elect to have all or part of any withholding tax obligation satisfied by having the Company withhold Shares otherwise deliverable to the Grantee as Performance Shares, unless the Committee determines otherwise by resolution.  If the Grantee fails to make such payments or election, the Company and its subsidiaries shall, to the extent permitted by law, have the right to deduct from any payments of any kind otherwise due to the Grantee any taxes required by law to be withheld with respect to the Performance Shares.  In the case of any amounts withheld for taxes pursuant to this provision in the form of Shares, the amount withheld shall not exceed the maximum required by applicable law and regulations.  

(i)    Notwithstanding any other provision of this Agreement, if any payment or distribution (a "Payment") by the Company or any other person or entity to or for the benefit of the Grantee is determined to be an  "excess parachute payment" (within the meaning of Code Section 280G(b)(1) or any successor provision of similar effect), whether paid or payable or distributed or distributable pursuant to this Agreement or otherwise, then the Grantee’s benefits under this Agreement may, unless the Grantee elects otherwise pursuant to his employment agreement, be reduced by the amount necessary so that the Grantee’s total "parachute payment" as defined in Code Section 280G(b)(2)(A) under this and all other agreements will be $1.00 less than the amount that would be a "parachute payment".  The payment of any “excess parachute payment” pursuant to this paragraph shall also comply with the terms of the Grantee’s employment agreement, if any.

Section 3.    Additional Conditions to Issuance of Shares

Each transfer of Performance Shares shall be subject to the condition that if at any time the Committee shall determine, in its sole discretion, that it is necessary or desirable as a condition of, or in connection with, the transfer of Performance Shares (i) to satisfy withholding tax or other withholding liabilities, (ii) to effect the listing, registration or qualification on any securities exchange or under any state or federal law of any Shares deliverable in connection with such exercise, or (iii) to obtain the consent or approval of any regulatory body, then in any such event such transfer shall not be effective unless such withholding, listing, registration, qualification, consent or approval shall have been effected or obtained free of any conditions not acceptable to the Company.

Section 4.    Adjustment of Shares

(a)    If the Company shall become involved in a merger, consolidation or other reorganization, whether or not the Company is the surviving corporation, any right to earn Performance Shares shall be deemed a right to earn or to elect to receive the consideration into which the Shares represented by the Performance Shares would have been converted under the terms of the merger, consolidation or other reorganization.  If the Company is not the surviving corporation, the surviving corporation (the “Successor”) shall succeed to the rights and obligations of the Company under this Agreement.

(b)    If any subdivision or combination of Shares or any stock dividend, capital reorganization or recapitalization occurs after the adoption of the Plan, the Committee shall make such proportionate adjustments as are appropriate to the number of Performance Shares to be earned in order to prevent the dilution or enlargement of the rights of the Grantee.

Section 5.    No Right to Employment

Nothing contained in this Agreement shall be deemed by implication or otherwise to confer upon the Grantee any right to continued employment by the Company or any affiliate of the Company or to limit the right of the Company to terminate the Grantee’s employment for any reason or for no reason.

Section 6.    Notice

Any notice to be given hereunder by the Grantee shall be sent by mail addressed to Chesapeake Utilities Corporation, 909 Silver Lake Boulevard, Dover, Delaware 19904, for the attention of the Committee, c/o the Corporate Secretary, and any notice by the Company to the Grantee shall be sent by mail addressed to the Grantee at the address of the Grantee shown on the first page hereof.  Either party may, by notice given to the other in accordance with the provisions of this Section, change the address to which subsequent notices shall be sent.

Section 7.    Beneficiary Designation

Grantee may designate a beneficiary to receive any Performance Shares to which Grantee is entitled which vest as a result of Grantee’s death.  Grantee acknowledges that the Company may exercise all rights under this Agreement and the Plan against Grantee and Grantee’s estate, heirs, lineal descendants and personal representatives and shall not be limited to exercising its rights against Grantee’s beneficiary.  

Section 8.    Assumption of Risk

It is expressly understood and agreed that the Grantee assumes all risks incident to any change hereafter in the applicable laws or regulations or incident to any change in the market value of the Performance Shares.

Section 9.    Terms of Plan and Employment Agreement

This Agreement is entered into pursuant to the Plan (a summary of which has been delivered to the Grantee).  This Agreement is subject to all of the terms and provisions of the Plan, which are incorporated into this Agreement by reference, and the actions taken by the Committee pursuant to the Plan.  In the event of a conflict between this Agreement and the Plan, the provisions of the Plan shall govern.  In addition, this Award is subject to applicable provisions of the Grantee’s employment agreement, including provisions requiring the Company to recover some or all of the Performance Shares awarded hereunder in the circumstances described in such agreement or as otherwise required by applicable law. All determinations by the Committee shall be in its sole discretion and shall be binding on the Company and the Grantee.

Section 10.    Governing Law; Amendment

This Agreement shall be governed by, and shall be construed and administered in accordance with, the laws of the State of Delaware (without regard to its choice of law rules) and the requirements of any applicable federal law.  This Agreement may be modified or amended only by a writing signed by the parties hereto.

Section 11.    Action by the Committee

The parties agree that the interpretation of this Agreement shall rest exclusively and completely within the sole discretion of the Committee.  The parties agree to be bound by the decisions of the Committee with regard to the interpretation of this Agreement and with regard to any and all matters set forth in this Agreement.  The Committee may delegate its functions under this Agreement to an officer of the Company designated by the Committee (hereinafter the “Designee”).  In fulfilling its responsibilities hereunder, the Committee or its Designee may rely upon documents, written statements of the parties or such other material as the Committee or its Designee deems appropriate.  The parties agree that there is no right to be heard or to appear before the Committee or its Designee and that any decision of the Committee or its Designee relating to this Agreement shall be final and binding unless such decision is arbitrary and capricious.  

Section 12.    Terms of Agreement

This Agreement shall remain in full force and effect and shall be binding on the parties hereto for so long as any Performance Shares issued to the Grantee under this Agreement continue to be held by the Grantee.

IN WITNESS WHEREOF, the Company has caused this Agreement to be executed in its corporate name, and the Grantee has executed the same in evidence of the Grantee's acceptance hereof, upon the terms and conditions herein set forth, as of the day and year first above written.

CHESAPEAKE UTILITIES CORPORATION

By:                         

Its:                         

Grantee:

                                            

Attachment A
2017-2019 Performance Peer Group

The 2017-2019 Performance Peer Group consists of the following gas utility companies: 

		
	1.
	Atmos Energy Corporation

		
	2.
	Black Hills Corporation

		
	3.
	Delta Natural Gas Company, Inc.

		
	4.
	New Jersey Resources Corporation

		
	5.
	NiSource, Inc.

		
	6.
	Northwest Natural Gas Company

		
	7.
	Northwestern Corporation

		
	8.
	OneGas, Inc.

		
	9.
	RGC Resources, Inc.

		
	10.
	South Jersey Industries, Inc.

		
	11.
	Spire, Inc.

		
	12.
	WGL Holdings, Inc.

		
	13.
	Unitil Corporation

		
	14.
	Vectren, CorporationExhibit

Exhibit 10.2
THE BANK OF NEW YORK MELLON CORPORATION
The Bank of New York Mellon Corporation Long‐Term Incentive Plan
FORM OF PERFORMANCE SHARE UNIT AGREEMENT

The Bank of New York Mellon Corporation (the “Corporation”) and                                         , a key employee (the “Grantee”) of the Corporation, in consideration of the covenants and agreements herein contained and intending to be legally bound hereby, agree as follows:

SECTION 1:  Performance Share Unit Award

1.1  Award.*  Subject to the terms and conditions set forth in this Performance Share Unit Agreement (this “Agreement”) and to the terms of The Bank of New York Mellon Corporation Long‐Term Incentive Plan (the “Plan”), the Corporation hereby awards to the Grantee                performance share units (the “Grant Amount” of “PSUs” assuming achievement of 100% earnout), each representing a share of the Corporation’s common stock, par value $.01 (the “Common Stock”), on                              (the “Grant Date”), subject to adjustment as provided in Article IX of the Plan.  Each of the PSUs is denominated as a single share of Common Stock with a value equal to one share of Common Stock.  Capitalized terms not otherwise defined herein shall have the meaning set forth in the Plan. The purpose of the Award is to incentivize each Grantee to align his or her interests with that of the Corporation and to reward the Grantee’s future contribution to the performance of the Corporation’s business.

1.2  Acceptance.  The payment of the PSUs is contingent upon the Grantee’s acknowledgement of this Agreement in the manner prescribed by the Corporation, which shall constitute the Grantee’s acceptance of the terms and conditions of this Agreement and the Plan, as this Agreement and the Plan may be amended from time to time; provided, however, that no alteration, amendment, revocation or termination of this Agreement or the Plan shall, without the written consent of the Grantee, adversely affect the rights of the Grantee with respect to the award.  If the Grantee does not acknowledge this Agreement in the manner prescribed by the Corporation on or before               , this award will be forfeited.  In such case, the Grantee will have no rights to this award and it will not be reinstated.

1.3  Dividend Equivalent Rights; No Voting.  During the period prior to vesting, dividend equivalents shall be determined with respect to the PSUs as if reinvested as additional PSUs on the dividend payment date and shall be paid to the Grantee pursuant to Section 4 of this Agreement only if and to the extent that the underlying PSUs become vested as provided in this Agreement, and any remaining dividend equivalents shall be forfeited.  In the event that the Grantee receives any additional PSUs as an adjustment with respect to the Grant Amount, such additional PSUs will be subject to the same restrictions as if granted under this Agreement as of the Grant Date and paid pursuant to Section 4 of this Agreement.  During the period prior to vesting, the Grantee shall not be entitled to vote any shares represented by the PSUs.  “Corporation”, when used herein with reference to employment of the Grantee, shall include any Affiliate of the Corporation.  

*Satisfaction of 162(m) threshold was a prerequisite to receive this award [include applicable metrics].

SECTION 2:  Restrictions on Transfer

2.1  Nontransferable.  No PSUs awarded hereunder or any interest therein may be sold, transferred, assigned, pledged or otherwise disposed of (any such action being hereinafter referred to as a “Disposition”) by the Grantee until such time as this restriction lapses with respect to such PSUs pursuant to Section 3 hereof, and any attempt to make such a Disposition shall be null and void and result in the immediate forfeiture and return to the Corporation without consideration of any PSUs as to which restrictions on Disposition shall at such time be in effect.

SECTION 3:  Vesting, Risk Adjustment, Performance Period, 
Forfeiture, Termination of Employment, Disability and Covenants

3.1  Vesting, Risk Adjustment, Performance Period and Forfeiture.  

(a)    Vesting and Risk Adjustment.  Subject to Sections 3.5 and 5.6 of this Agreement, PSUs (as may be adjusted from the Grant Amount by reference to the performance goals and the risk adjustment process) may be earned as set forth in Attachment A for the period [Insert Performance Period] (the “Performance Period”) and shall vest and the restrictions on Disposition shall lapse on the      anniversary of the Grant Date provided that the Grantee remains continuously employed by the Corporation through the close of business on            and provided further that unvested PSUs are subject to forfeiture based upon the risk adjustment process each year and following completion of the Performance Period as set forth on Attachment B.  Subject to Section 4.1, the vesting date may be delayed if and to the extent the determination of the earnout achieved as set forth on Attachment A or the risk adjustment process set forth on Attachment B are not completed by such date. Notwithstanding the foregoing and in accordance with Section 4.1, a vesting may be delayed if, at the vesting date, the Grantee is the subject of ongoing disciplinary or performance management investigations or proceedings concerning the circumstances under which forfeiture or clawback of this award could apply.  In such cases, the applicable portion of the award, if any, will vest following the completion of such investigations and proceedings to the extent the Corporation determines that forfeiture and/or clawback does not apply.

(b)    Forfeiture upon Termination of Employment.  Subject to Sections 3.2 and 3.3 of this Agreement, upon the effective date of a termination of the Grantee’s employment with the Corporation occurring prior to                         , all unvested PSUs shall immediately be forfeited and returned to the Corporation without consideration or further action being required of the Corporation.  The effective date of the Grantee’s termination shall be the date upon which the Grantee ceases to perform services as an employee of the Corporation, without regard to accrued vacation, severance or other benefits or the characterization thereof on the payroll records of the Corporation.

(c)    Forfeiture upon Termination of Employment for Cause.  Notwithstanding anything to the contrary contained in this Agreement, upon the effective date of a termination of the Grantee’s employment with the Corporation for “Cause,” as defined in Section 3.4 below, all unvested PSUs shall immediately be forfeited and returned to the Corporation without consideration or further action being required of the Corporation.

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3.2  Specified Terminations of Employment.

(a)    Death.  If Grantee’s employment with the Corporation is terminated by reason of the Grantee’s death (or if Grantee’s death occurs at any time while the PSUs remain subject to restrictions on Disposition), all unvested PSUs may vest as provided in Section 3.1(a) above following completion of the Performance Period and the balance of the PSUs that do not vest with respect to the Performance Period shall be deemed forfeited at the end of the Performance Period.  

(b)    Age & Service Rule, Termination Providing Transition/Separation Pay prior to Age 55.  If the Grantee’s employment with the Corporation terminates by reason of (i) a termination on or after the Grantee’s attainment of age 55 but prior to age 60, and the combination of the Grantee’s age and years of credited employment with the Corporation (including full and partial years of age and service) on the date of Grantee’s termination equals or exceeds 65, or (ii) a termination providing transition/separation pay from the Corporation prior to the Grantee’s attainment of age 55, a pro rata portion of the unvested PSUs may vest as provided in Section 3.1(a) above following completion of the Performance Period, contingent upon the Grantee’s compliance with the covenants provided in Section 3.5 hereof.  If the Grantee fails to comply with such covenants, the PSUs shall immediately be forfeited.  The pro rata portion that vests shall equal (i) the number of days from the first day of the Performance Period through the date upon which the Grantee’s employment is terminated, divided by (ii) 1,095, with the result multiplied by (iii) the number of PSUs, with that result multiplied by (iv) the applicable final earnout percentage  as determined under Attachment A.  The balance of the PSUs awarded shall be deemed forfeited at the end of the Performance Period.  For the purposes of calculating the combination of the Grantee’s age and years of credited employment, partial years shall be determined based upon the number of days since the Grantee’s then prior birthday or the number of days of credited employment since the Grantee’s then prior anniversary, as the case may be.

(c)    Special Age Rule, Termination Providing Transition/Separation Pay after Age 55.  If the Grantee’s employment with the Corporation terminates by reason of (i) a termination on or after the Grantee’s attainment of age 60, or (ii) a termination providing transition/separation pay from the Corporation following the Grantee’s attainment of age 55, all unvested PSUs may vest as provided in Section 3.1(a) above following completion of the Performance Period, contingent upon the Grantee’s compliance with the covenants provided in Section 3.5 hereof.  If the Grantee fails to comply with such covenants, the PSUs shall immediately be forfeited.  The balance of the PSUs that do not vest with respect to the Performance Period shall be deemed forfeited at the end of the Performance Period.

(d)    Sale of Business.  If the Grantee’s employment terminates by reason of a termination by the Corporation due to a sale of a business unit or subsidiary of the Corporation by which the Grantee is employed and the Grantee is not otherwise entitled to transition/separation pay from the Corporation, all unvested PSUs may vest as provided in Section 3.1(a) above following completion of the Performance Period.  The balance of the PSUs that do not vest shall be deemed forfeited at the end of the Performance Period.  

(e)    Change in Control.  If the Grantee’s employment is terminated by the Corporation without “Cause,” as defined in Section 3.4 below, within two years after a Change in Control, as defined in Section 10.1 of the Plan, occurring after the Grant Date, all PSUs may vest as provided in Section 3.1(a) above following completion of the Performance Period.  The earnout achieved shall be determined in good faith by the Committee, and following a Change in Control or other corporate-type event may include, without limitation, determinations with respect to the earnout calculation so as to preserve as nearly as practicable the intended effect of the performance goals.  The balance of the PSUs that do not vest shall be deemed forfeited at the end of the Performance Period.  

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3.3  Disability.  If the Grantee receives current benefits under the Corporation’s long‐term disability plan while any portion of this award remains unvested, all PSUs may vest as provided in Section 3.1(a) above following completion of the Performance Period.  The balance of the PSUs that do not vest shall be deemed forfeited at the end of the Performance Period.  

3.4  Cause Definition.  Solely for purposes of this Agreement, “Cause” shall mean: 

(i) the Grantee has been convicted of, or has entered into a pretrial diversion or entered a plea of guilty or nolo contendere (plea of no contest) to a crime or offense constituting a felony (or its equivalent under applicable laws outside of the United States), or to any other crime or offense involving moral turpitude, dishonesty, fraud, breach of trust, money laundering, or any other offense that may preclude the Grantee from being employed with a financial institution;

(ii) the Grantee is grossly negligent in the performance of his or her duties or has failed to perform in any material respect the duties of his or her employment, including, without limitation, failure to comply with any lawful directive from the Corporation, other than by reason of incapacity due to disability or from any permitted leave of absence required by law; 

(iii) the Grantee has violated the Corporation’s Code of Conduct or any of the policies of the Corporation governing the conduct of business or his or her employment; 

(iv) the Grantee has engaged in any misconduct which has the effect of being materially injurious to the Corporation or any Affiliate, including, but not limited to, its reputation; 

(v) the Grantee has engaged in an act of fraud or dishonesty, including, but not limited to, taking or failing to take actions intending to result in personal gain; or

(vi) if the Grantee is employed outside the United States. any other circumstances (beyond those listed  above) that permit the immediate termination of his or her employment without notice or payment in accordance with the terms of his or her employment agreement or Applicable Laws (as defined in Section 5.2).

The determination of whether the Grantee’s actions will be considered Cause for purposes of this Agreement will be determined by the Corporation or any of its Affiliates, in its or their sole discretion, as applicable. Any determinations of Cause will be considered conclusive and binding on the Grantee.

3.5  Covenants.  Grantee agrees to provide the Corporation with 90 days’ advance written notice of any voluntary termination of Grantee’s employment with the Corporation.  Grantee agrees that for the period commencing on the effective date of Grantee’s termination of employment with the Corporation until the one‐year anniversary thereof or, if earlier, the vesting date, Grantee will not directly or indirectly (a) solicit or attempt to solicit or induce, directly or indirectly, (i) any current or prospective client of the Corporation or an Affiliate known to Grantee, to initiate or continue a client relationship with Grantee other than with the Corporation or Affiliate or to terminate or reduce its client relationship with the Corporation or Affiliate, or (ii) any employee of the Corporation or an Affiliate, to terminate such employee’s employment relationship with the Corporation or Affiliate in order to enter into a similar relationship with Grantee, or any other person or any entity, or (b) compete against the Corporation or an Affiliate in any capacity, whether as principal, agent, independent contractor, employee or otherwise, with any financial services industry company located within 1,000 miles of Grantee’s primary location of employment with the Corporation; provided, however, that the ownership of up to 5% of any class of the outstanding securities of any company the securities of 

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which are listed on a national securities exchange (a “Public Company”) (including, for purposes of calculating such percentage, the voting securities owned by persons acting in concert with such person or otherwise constituting a “group” for purposes of Section 13(d)(3) of the Securities Exchange Act of 1934) shall not be deemed a violation hereof provided that Grantee does not have an active role in the management of such Public Company.  If the Grantee fails to comply with such covenants, the consequence shall be forfeiture of the unvested and vested (but unsettled) PSUs.  Grantee expressly agrees to advise any person or entity that seeks to employ Grantee of the terms of these covenants.

3.6  Continuation.  For the avoidance of doubt, the provisions of Section 5.6 continue to apply without limitation in accordance with its terms notwithstanding any termination of employment or services under this Section 3.

SECTION 4:  Settlement

4.1  Time of Settlement.  Vested PSUs shall be settled within two and one-half months following the end of the Performance Period, contingent upon the Committee’s determination of the earnout achieved and subject to the individual per‐employee limitations included in the Plan; provided, however, if Grantee is a “specified employee” under Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”), upon separation from service and such settlement is deferred compensation conditioned upon a separation from service and not compensation Grantee could receive without separating from service, then settlement shall not be made until the first day following the six‐month anniversary of Grantee’s separation from service (or upon earlier death).   

4.2  Form of Settlement.  The PSUs, including any PSUs resulting from dividend equivalents, shall be settled in the form of Common Stock delivered in book‐entry form.  

SECTION 5:  Miscellaneous

5.1  No Right to Employment.  Neither the award of PSUs nor anything else contained in this Agreement or the Plan shall be deemed to limit or restrict the right of the Corporation to terminate the Grantee’s employment at any time, for any reason, with or without Cause.

5.2  Compliance with Laws.  Notwithstanding any other provision of this Agreement, the Grantee agrees to take any action, and consents to the taking of any action by the Corporation, with respect to the PSUs awarded hereunder necessary to achieve compliance with applicable laws, regulations or relevant regulatory requirements or interpretations in effect from time to time (“Applicable Laws”).  Any determination by the Corporation in this regard shall be final, binding and conclusive.  The Corporation shall in no event be obligated to register any securities pursuant to the U.S. Securities Act of 1933 (as the same shall be in effect from time to time) or to take any other affirmative action in order to cause the delivery of shares in book-entry form or otherwise therefore to comply with any Applicable Laws.  For the avoidance of doubt, the Grantee understands and agrees that if any payment or other obligation under or arising from this Agreement, including without limitation dividend equivalent rights, or the Plan is in conflict with or is restricted by any Applicable Laws, then the Corporation may reduce, revoke, cancel, clawback or impose different terms and conditions to the extent it deems necessary or appropriate, in its sole discretion, to effect such compliance.  If the Corporation determines that it is necessary or appropriate for any payments under this Agreement to be delayed in order to avoid additional tax, interest and/or penalties under Section 409A of the Code, then the payments would not be made before the date which is the first day following the six (6) month anniversary of the date of the Grantee’s termination of employment (or upon earlier death).  

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5.3  Plan Governs.  This is the Award Agreement contemplated in Section 2.3(b) of the Plan.  In the event of any conflict between the provisions of this Agreement and the Plan, the Plan shall govern.  A copy of the Plan can be found on the Corporation’s equity award website or may be obtained from the Executive Compensation Division of the Corporation’s Human Resources Department.  No amount of income received by the Grantee pursuant to the PSUs shall be considered compensation for purposes of any pension or retirement plan, insurance plan or any other employee benefit plan of the Corporation.

5.4  Liability for Breach.  The Grantee hereby indemnifies the Corporation and holds it harmless from and against any and all damages or liabilities incurred by the Corporation (including liabilities for attorneys’ fees and disbursements) arising out of any breach by Grantee of this Agreement, including, without limitation, any attempted Disposition in violation of Section 2.1 of this Agreement.

5.5  Tax Withholding.  The Grantee must pay the amount of any federal, state, local or foreign income or employment taxes required to be withheld on the compensation income resulting from the award of, or lapse of restrictions on, the PSUs directly to the Corporation in cash upon request; provided, however, that where the restrictions on Disposition set forth in Section 2.1 of this Agreement have lapsed the Grantee may satisfy such obligation in whole or in part by requesting the Corporation in writing to withhold from the Common Stock otherwise deliverable to the Grantee or by delivering to the Corporation shares of its Common Stock having a Fair Market Value on the date the restrictions lapse equal to the withholding tax obligation to be so satisfied, in accordance with such rules as the Committee may prescribe.  If the Grantee does not make such request, the Corporation will automatically net unless it has previously requested payment in cash.  The Corporation may also establish rules, notwithstanding Sections 2.1 and 4.1 hereof, which may differ from those described above in the case of employment taxes if such taxes are deemed to be due before the lapse of restrictions on Disposition.  The Corporation’s obligation to issue or credit shares to the Grantee is contingent upon the Grantee’s satisfaction of an amount sufficient to satisfy any federal, state, local or other withholding tax requirements, notwithstanding the lapse of the restrictions thereon. 

5.6  Forfeiture and Repayment.  If, directly or indirectly:

(a) during the course of the Grantee’s employment with the Corporation, the Grantee engages in conduct or it is discovered that the Grantee engaged in conduct that is materially adverse to the interests of the Corporation or its Affiliates, including failures to comply with the Corporation’s or its Affiliate’s rules or regulations, fraud, or conduct contributing to any financial restatements or irregularities; 

(b) during the course of the Grantee’s employment with the Corporation and, unless the Grantee has post‐termination obligations or duties owed to the Corporation or its Affiliates pursuant to an individual agreement set forth in subsection (d) below, for one year thereafter, the Grantee engages in solicitation and/or diversion of customers or employees;  

(c) during the course of the Grantee’s employment with the Corporation, the Grantee engages in competition with the Corporation or its Affiliates; 

(d) following termination of the Grantee’s employment with the Corporation for any reason, with or without Cause, the Grantee violates any post-termination obligations or duties owed to the Corporation or its Affiliates or any agreement with the Corporation or its Affiliates, including without limitation, any employment agreement, confidentiality agreement or other agreement restricting post‐employment conduct; or

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(e) any compensation that the Corporation or its Affiliates has promised or paid to the Grantee is required to be forfeited and/or repaid to the Corporation or its Affiliates pursuant to applicable regulatory requirements;

then the Corporation may cancel all or any portion of  the PSUs and/or require repayment of any shares of Common Stock (or the value thereof) or other amounts which were acquired pursuant to the PSUs.  The Corporation shall have sole discretion to determine what constitutes grounds for forfeiture and/or repayment under this Section 5.6, and, in such event, the portion of the PSUs that shall be cancelled and the sums or amounts that shall be repaid.  For purposes of the foregoing, Grantee expressly and explicitly authorizes the Corporation to issue instructions, on Grantee’s behalf, to any brokerage firm and/or third party administrator engaged by the Corporation to hold the shares of Common Stock and other amounts acquired pursuant to the PSUs to re-convey, transfer or otherwise return such shares and/or other amounts to the Corporation.

5.7  Governing Law and Choice of Forum.  This Agreement shall be construed and enforced in accordance with the laws of the State of New York, other than any choice of law provisions calling for the application of laws of another jurisdiction.  For purposes of litigating any dispute that arises directly or indirectly from the relationship of the parties evidenced by this grant or this Agreement, the parties hereby submit to and consent to the exclusive jurisdiction of the State of New York and agree that such litigation shall be conducted only in the courts of New York County, New York, or the federal courts for the United States for the Southern District of New York, and no other courts, where this grant is made and/or to be performed and agree to such other choice of forum provisions as are included in the Plan.

5.8  Severability.  The provisions of this Agreement are severable and if any one or more provisions are determined to be illegal or otherwise unenforceable, in whole or in part, the remaining provisions shall nevertheless be binding and enforceable.

5.9  Waiver.  The Grantee acknowledges that a waiver by the Corporation of any provision of this Agreement shall not operate or be construed as a waiver of any other provision of this Agreement, or of any subsequent breach of this Agreement.

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Attachment A
Performance Goals

Performance Goals

[Complete as appropriate]

The HRCC has the discretion to adjust the payout ranges to reflect the impact of any significant, unusual items on [the performance metrics] and share count, including market conditions and interest rate changes.  

US EC PSU Feb 2017

Attachment B
Risk Adjustment/Forfeiture Decision Process

For any performance year in which the Grantee remains a covered employee, the Grantee’s risk performance will be assessed via a Risk Culture Summary Scorecard (“RCSS”) Score or a Performance Management Platform (“PMP”) Risk Goal Rating. If, in any year, the Grantee receives an RCSS Score of 4 or worse, or a PMP Risk Goal Rating of “Below Expectations” or “Unsatisfactory,” the Grantee’s unvested PSUs will be subject to review by the Incentive Compensation Review Committee (“ICRC”) for consideration of forfeiture.  If the Grantee is no longer a covered employee or has left the Corporation, any unvested portion of the PSUs will also be subject to a risk review by the ICRC.  The ICRC is generally comprised of senior managers and senior control managers.

In that event, as part of its review, ICRC will ask –
		
	•
	Did the Grantee’s score/rating reflect poor risk behavior by the Grantee in a prior year?

		
	•
	Did the Grantee receive an award in that year?

 
If the answer to both questions is yes, ICRC asks the following questions with respect to each of the designated prior years:
 
		
	•
	Financial Impact:  How much did/will the issue cost the Company? 

		
	•
	Reputational Impact:  How much of a regulatory impact did/will it have on the Company?

 
ICRC selects the impact answer that falls into the highest category below to determine the impact forfeiture percentage.

	
						
	Criteria
	Metric
	None
	Low
	Medium
	High

	Financial Impact
	 
	 
	 
	 
	 

	Reputational Impact
	 
	 
	 
	 
	 

As used in this Attachment B, the term “Company” shall mean the Corporation and its Affiliates.  

Then the ICRC asks how much, if any, control/responsibility the Grantee had regarding the situation.  The answer to the last question determines the modifier to be applied to the impact forfeiture percentage.

	
				
	Criteria
	   None 
	Indirect
	Direct

	The Grantee’s role 
& responsibility
	 
	 
	 

Example [Insert Example]: 
 
      
The ICRC will submit its recommendations to the Human Resources and Compensation Committee of the Corporation’s Board of Directors for final action and approval.

US EC PSU Feb 2017

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