Exhibit 10.1
THE PNC FINANCIAL SERVICES GROUP, INC.
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
AMENDED AND RESTATED
(GENERALLY EFFECTIVE AS OF JANUARY 1, 2002)
WHEREAS, The PNC Financial Services Group, Inc. (the "Corporation")
previously adopted and presently maintains The PNC Financial Services Group,
Inc. Supplemental Executive Retirement Plan (the "Plan") originally effective as
of September 1, 1985 and amended and restated in its entirety effective January
1, 1999; and
WHEREAS, the Corporation desires to amend and restate the Plan in its
entirety, to be generally effective January 1, 2002, in order to reflect changes
made to the benefit formula to cease or reduce future benefit accruals for
certain Participants and other changes deemed necessary or appropriate; and
WHEREAS, Section 15 of the Plan authorizes the Corporation to amend the
Plan at any time.
NOW, THEREFORE, in consideration of the foregoing, the Plan is hereby
amended and restated in its entirety to provide as follows:
SECTION 1
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DEFINITIONS
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1.1 "Account" means the bookkeeping record described in Section 4 used
solely to communicate a Participant's Accrued Benefit expressed as a
single dollar amount.
1.2 "Accrued Benefit" means the Participant's Account balance converted to
a single-life annuity in the same manner as under the Pension Plan.
1.3 "Annual Base Salary" means the annual pay rate as of the last payday in
each January preceding the Participant's Vested Termination of
Employment.
Notwithstanding the foregoing, after a Change in Control, in no event
shall a Participant's Annual Base Salary be less than his annual pay
rate as of the last payday of the January preceding the date of the
Change in Control.
1.4 "Applicable Interest Rate" has the meaning assigned such term in the
Pension Plan.
1.5 "Average Bonus" means the average of the five highest bonuses whether
or not deferred of the ten final consecutive years of a Participant's
employment awarded to a Participant under the Executive Bonus Plan for
services performed by the Participant during the prior year.
1.6 "Average Final Compensation" means the Participant's average
Compensation (defined in Section 1.14(a) of the Plan) for the five
highest of the ten final consecutive years of a Participant's
employment, including the year of the Participant's death or Vested
Termination of Employment.
1.7 "Beneficiary" or "Beneficiaries" means the individual or individuals
designated by the Participant to receive the balance of the
Participant's account upon the Participant's death, in accordance with
Section 8 of the Plan.
1.8 "Board" means the Board of Directors of the Corporation.
1.9 "Cause" means:
(a) the willful and continued failure of a Participant to
substantially perform the Participant's duties with the
Employer (other than any such failure resulting from
incapacity due to physical or mental illness), after a written
demand for substantial performance is delivered to the
Participant by the Board or the Board of Directors of the
Employer, the Chief Executive Officer of the Corporation or
the Employer, or the Participant's superior, which
specifically identifies the manner in which the Board or the
Board of Directors of the Employer, Chief Executive Officer of
the Corporation or the Employer, or superior believes that the
Participant has not substantially performed the Participant's
duties; or
(b) the willful engaging by the Participant in illegal conduct or
gross misconduct that is materially and demonstrably injurious
to the Employer.
For purposes of the preceding clauses (a) and (b), no act or failure to
act, on the part of a Participant, shall be considered "willful" unless
it is done, or omitted to be done, by the Participant in bad faith and
without reasonable belief that the Participant's action or omission was
in the best interests of the Employer. Any act, or failure to act,
based upon the instructions or prior approval of the Board or the Board
of Directors of the Employer, Chief Executive Officer of the
Corporation or the Employer or the Participant's superior, or based
upon the advice of counsel for the Corporation or the Employer, shall
be conclusively presumed to be done, or omitted to be done, by the
Participant in good faith and in the best interests of the Corporation
or the Employer. The cessation of employment of the Participant shall
not be deemed to be for Cause unless and until there shall have been
delivered to the Participant a copy of a resolution duly adopted by the
affirmative vote of not less than a majority of the entire membership
of the Board or the Committee at a Board or Committee meeting called
and held for the purpose of considering such termination finding that,
in the good faith opinion of the Board or Committee, the Participant is
guilty of the conduct described in clause (a) or (b) above,
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and specifying the particulars thereof in detail. Such resolution shall
be adopted only after reasonable notice of such meeting is provided to
the Participant and the Participant is given an opportunity, together
with counsel, to be heard before the Board or the Committee.
1.10 "Change in Control" means a change of control of the Corporation 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 Securities
Exchange Act of 1934 (the "Exchange Act"), whether or not the
Corporation 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), directly or
indirectly, of securities of the Corporation representing 20%
or more of the combined voting power of the Corporation's then
outstanding securities, provided, however, that such an
acquisition of beneficial ownership representing between 20%
and 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) the Corporation consummates a merger, consolidation, share
exchange, division or other reorganization or transaction of
the Corporation (a "Fundamental Transaction") with any other
corporation, other than a Fundamental Transaction that results
in the voting securities of the Corporation outstanding
immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into voting
securities of the surviving entity) at least 60% of the
combined voting power immediately after such Fundamental
Transaction of (i) the Corporation'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 the Corporation approve a plan of complete
liquidation or winding-up of the Corporation or an agreement
for the sale or disposition (in one transaction or a series of
transactions) of all or substantially all of the Corporation'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 the Corporation's shareholders in connection with
such proxy contest was approved by a vote of at least
two-thirds 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);
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(e) during any period of 24 consecutive months, individuals who at
the beginning of such period constituted the Board (including
for this purpose any new director whose election or nomination
for election by the Corporation's shareholders was approved by
a vote of at least two-thirds 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.
"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.
Notwithstanding anything to the contrary herein, a divestiture or
spin-off of a Subsidiary or division of the Corporation shall not by
itself constitute a "Change in Control."
1.11 "Code" means the Internal Revenue Code of 1986, as amended.
1.12 "Committee" means the Personnel and Compensation Committee of the
Board.
1.13 "Compensation" means:
(a) For purposes of Section 3 of the Plan, the Annual Base Salary
established by the Employer for services rendered by a
Participant for a particular year, plus the amount of cash, if
any, whether deferred or not, awarded to a Participant under
any Executive Bonus Plan paid during that same year; provided,
however, that, subject to exceptions approved by the
Committee, the amount of cash awarded to a Participant under
any Executive Bonus Plan shall be the lower of the amount
awarded under such Executive Bonus Plan or the amount that
such Participant would have been awarded under such Executive
Bonus Plan had the Participant's annual bonus been awarded
pursuant to the same grade or level that is used in
calculating the Participant's recommended stock option grant
under The PNC Financial Services Group, Inc. 1997 Long-Term
Incentive Award Plan.
(b) For purposes of Section 4 of the Plan, the amount of cash,
whether deferred or not, awarded to a Participant under any
Executive Bonus Plan paid during a particular year; provided,
however, that for a Participant who is not a member of the
Corporate Executive Group, Compensation under the Plan may not
exceed $250,000 per year.
(c) Participants who have incurred a Total Disability shall be
treated as though they have continued in employment throughout
the continuance of such Total Disability with Compensation
equal to (i) for purposes of Section 3 of the Plan, the annual
pay rate in effect at the onset of such Total Disability plus
the bonus award described in Section 1.13(a) that was earned
in the year prior to the Total
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Disability, or (ii) for purposes of Section 4 of the Plan,
Compensation as defined in Section 1.13(b) for the last full
calendar year of Compensation, Compensation used for all of
the Participant's previous Earnings Credits annualized to be
reflective of one full year.
1.14 "Corporate Executive Group" means the group designated as such by the
Corporation.
1.15 "Corporation" means The PNC Financial Services Group, Inc. and any
successors thereto.
1.16 "Credited Service" has the meaning assigned such term in the Pension
Plan from time to time that results in the largest period of credited
service for the applicable participant.
1.17 "Deferral Election" means a Participant's irrevocable election to defer
the commencement of the payments of his or her benefits under the Plan
by timely delivery to the Plan Manager of a Deferral Election Form.
1.18 "Deferral Election Form" means the document, in a form approved by the
Plan Manager, whereby the Participant elects to defer the commencement
of the payment of his or her benefits under the Plan.
1.19 "Deferred Benefits" means the participant's benefits under the Plan the
payment of which have been deferred pursuant to a Deferral Election.
1.20 "Earnings Credits" means the credits allocated pursuant to Section 4.2
of the Plan to the Account of a Participant who is not a Grandfathered
Participant.
1.21 "Employer" means the Corporation and any Subsidiary that has been
designated by the Plan Manager as an Employer hereunder.
1.22 "ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
1.23 "Executive Bonus Plan" means the plans designated by the Committee as
participating hereunder.
1.24 "Good Reason" means:
(a) the assignment to a Participant of any duties inconsistent in
any respect with the Participant's position (including status,
offices, titles and reporting requirements), authority, duties
or responsibilities immediately prior to the Change in
Control, or any other action by the Employer 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 Employer promptly after
receipt of notice thereof given by the Participant;
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(b) a reduction by the Employer in the Participant's Annual Base
Salary in effect on the day prior to the date of a Change in
Control;
(c) the Employer's requiring the Participant to be based at any
office or location that is more than 50 miles from the
Participant's office or location immediately prior to the
Change in Control;
(d) the failure by the Employer (i) to continue in effect any
bonus, stock option or other cash or equity-based incentive
plan in which the Participant participates immediately prior
to the Change in Control that is material to the Participant'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 the Participant'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 the Participant's participation relative to
other participants, as existed immediately prior to the Change
in Control; or
(e) the failure by the Employer to continue to provide the
Participant with benefits substantially similar to those
received by the Participant under any of the Employer's
pension (including, but not limited to, tax-qualified plans),
life insurance, health, accident, disability or other welfare
plans in which the Participant was participating, at costs
substantially similar to those paid by the Participant,
immediately prior to the Change in Control.
1.25 "Grandfathered Participant" means a Participant who on December 31,
1998 (i) was employed by the Employer, (ii) participated in the Plan
and (iii) had completed at least five years of Credited Service and
attained age 50.
1.26 "Initial SEG 06 Participant" means a Participant who as of December 31,
1998 was a member of the Senior Executive Group level 06 or higher and
is not a member of the group described in Section 1.25.
1.27 "Hardship" means severe financial hardship to the Participant resulting
from a sudden and unexpected illness of the Participant or one of the
Participant's dependents (within the meaning of section 152(a) of the
Code), or an accident involving the Participant or a Participant's
dependent, loss of a Participant's property due to casualty, or other
similar extraordinary and unforeseeable circumstances arising as a
result of events beyond the control of the Participant. The
circumstances that will constitute Hardship shall depend upon the facts
of each case, but, in any case, Hardship will not exist to the extent
that such hardship is or may be relieved;
(a) through reimbursement or compensation by insurance or
otherwise;
(b) by liquidation of the Participant's assets, to the extent the
liquidation of such assets would not itself cause severe
financial hardship; or
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(c) by cessation of deferrals under this Plan or other plans
maintained by the Employer.
The Plan Manager shall have the sole and absolute discretion to
determine whether a Hardship exists.
1.28 "Interest Credits" means the credits allocated pursuant to Section 4.4
of the Plan to the Account of a Participant who is not a Grandfathered
Participant.
1.29 "Minimum Benefit" means the minimum benefit calculated under Section
4.7 for a Participant who is not a Grandfathered Participant.
1.30 "Participant" means all persons who participated in the Plan on
December 31, 1998 and all other persons who are invited thereafter by
the Corporation to participate in the Plan.
1.31 "Pension Plan" means The PNC Financial Services Group, Inc. Pension
Plan as in effect on January 1, 1999, and as amended from time to time
thereafter.
1.32 "Plan" means this The PNC Financial Services Group, Inc. Supplemental
Executive Retirement Plan, as amended from time to time.
1.33 "Plan Manager" means any individual designated by the Committee to
manage the operation of the Plan as herein provided or to whom the
Committee has duly delegated any of its duties and obligations
hereunder.
1.34 "Plan Year" means the calendar year beginning January 1.
1.35 "Prior Excess Plan" means The PNC Financial Services Group, Inc. ERISA
Excess Pension Plan as in effect on December 31, 1998.
1.36 "Prior Pension Plan" means The PNC Financial Services Group, Inc.
Pension Plan as in effect on December 31, 1998.
1.37 "Prior Plan" means The PNC Financial Services Group, Inc. Supplemental
Executive Retirement Plan as in effect on December 31, 1998.
1.38 "Subsidiary" means any business entity the equity of which (directly or
indirectly) is owned 50% or more by the Corporation.
1.39 "Total Disability" has the meaning assigned such term in the Pension
Plan.
1.40 "Transitional Earnings Credits" means the credits allocated pursuant to
Section 4.3 of the Plan to the Account of a Participant who is not a
Grandfathered Participant.
1.41 "Trust" means the grantor trust established by the Corporation to
assist in funding its obligation under the Plan.
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1.42 "Vested Termination of Employment" means a Participant's termination of
employment with the Employer:
(a) for any reason after completing five years of Vesting Service;
or
(b) by the Participant for Good Reason after a Change in Control
or by the Employer without Cause after a Change in Control.
1.43 "Vesting Service" has the meaning assigned such term in the Pension
Plan.
SECTION 2
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APPLICATION OF PLAN
-------------------
This Plan applies only to Participants who are employed on or after January 1,
1999. A Participant under the Prior Plan who was not employed on or after
January 1, 1999 will continue to be covered under the Prior Plan.
SECTION 3
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RETIREMENT INCOME SUPPLEMENT FOR
--------------------------------
GRANDFATHERED PARTICIPANTS
--------------------------
3.1 Grandfathered Participants
--------------------------
Upon Vested Termination of Employment, a Grandfathered Participant
shall receive an annual cash payment equal to the greater of:
(a) 10% plus 1% for each year of Credited Service (including
fractions thereof) in excess of ten but less than 25 years
times the Participant's Annual Base Salary at the time of
Vested Termination of Employment; or
(b) the annual amount of retirement benefit the Participant would
have received as a single life annuity under the Prior Pension
Plan if the Prior Pension Plan had been continued and the
definition of "Compensation" and "Average Final Compensation"
in the Prior Pension Plan were as recited in Sections 1.13(a)
and 1.6 above, respectively (assuming that the Participant
elected a single life annuity under the Prior Pension Plan and
commenced receiving benefits at age 62).
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The amount determined under Section 3.1(b) above will be reduced by the
annual amount of any benefit the Participant would have been entitled
to receive under the Prior Pension Plan and the Prior Excess Plan,
assuming the Participant commenced receiving benefit payments in the
form of a single life annuity under such plans at age 62.
Unless otherwise elected, the annual amount payable pursuant to Section
3.1(a) or 3.1(b) and the preceding sentence shall be paid in monthly
installments, commencing on the first day of the month coincident with
or next following the Vested Termination of Employment of the
Participant and continuing for fifteen years. Any benefit payment made
pursuant to Section 3.1(a) or 3.1(b) that commences prior to a
Participant's attainment of age 62 shall be actuarially reduced in
accordance with reduction factors used in the Prior Pension Plan. A
Participant may elect, in accordance with appropriate administrative
procedures, to receive, in lieu of the monthly retirement benefit to
which he is entitled hereunder, a lump-sum cash payment equal to the
present value of such monthly benefit, calculated using the interest
rate used under the Prior Pension Plan as of the date the payment is to
be made.
A Participant also may elect, pursuant to Section 10 of the Plan, to
defer the commencement of the payment of his or her benefits.
3.2 Death Benefit
-------------
Upon the death of a Grandfathered Participant prior to Vested
Termination of Employment, his or her Beneficiary shall receive an
annual cash payment equal to the greater of:
(a) 10% plus 1% for each year of Credited Service (including
fractions thereof) between ten and 25 years times the
Participant's Annual Base Salary at the time of death; or
(b) the annual amount of retirement benefit the Participant would
have received as a single life annuity under the Prior Pension
Plan if the Prior Pension Plan had been continued and if the
definition of "Compensation" and "Average Final Compensation"
in the Prior Pension Plan were as recited in Sections 1.13(a)
and 1.6 above, respectively.
The amount determined under Section 3.2(b) above will be reduced by the
annual amount of any benefit the Participant would be entitled to
receive under the Prior Pension Plan and the Prior Excess Plan.
The benefit shall be distributed to the Participant's Beneficiary or
Beneficiaries at the time and pursuant to the method elected by the
Participant. Upon application of the Participant's Beneficiary, the
Plan Manager may, in his or her sole and absolute discretion, direct
that the benefit be paid in a single lump sum.
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SECTION 4
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RETIREMENT INCOME SUPPLEMENT FOR PARTICIPANTS
---------------------------------------------
WHO ARE NOT GRANDFATHERED PARTICIPANTS
--------------------------------------
4.1 Accounts
--------
An Account shall be established and maintained for each Participant who
is not a Grandfathered Participant to which credits shall be allocated
pursuant to the provisions of this Section 4. A Participant's opening
Account balance shall be determined in the same manner as under the
Pension Plan based on the Participant's benefit accrued under the Prior
Plan as of December 31, 1998.
4.2 Earnings Credits
----------------
As of each pay period, there shall be credited to the Account of each
such active Participant who is not an Initial SEG 06 Participant and
who has earned Compensation during such pay period an amount determined
as follows:
Age Plus Years Percentage of Compensation
of Credited Service Credited to Participant's Account
------------------- ---------------------------------
Less than 40 3%
Between 40 and 49 4%
Between 50 and 59 5%
Between 60 and 69 6%
70 or more 8%
As of each pay period, there shall be credited to the Account of each
such active Participant who is an Initial SEG 06 Participant and who
has earned Compensation during such pay period an amount determined as
follows:
Age Plus Years Percentage of Compensation
of Credited Service Credited to Participant's Account
------------------- ---------------------------------
Less than 40 6%
Between 40 and 49 8%
Between 50 and 59 10%
Between 60 and 69 12%
70 or more 16%
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For purposes of the above two charts, age and Credited Service are
determined as of the last day of the preceding Plan Year. For purposes
of determining the percentage of Compensation to be credited to a
Participant's Account, only complete years of Credited Service and age
shall be used; no partial years of age or Credited Service shall be
counted.
4.3 Transitional Earnings Credits
-----------------------------
Beginning on January 1, 1999 and ending on December 31, 2008, as of
each calendar quarter, there shall be allocated Transitional Earnings
Credits to the Account of each active Participant who has earned
Compensation during such calendar quarter. These Transitional Earnings
Credits shall apply to the following Participants and are determined as
follows:
(a) For active Participants who as of January 1, 1999 were age 45
or older and had at least fifteen years of Credited Service,
an additional allocation of 4% of Compensation shall be made.
(b) For active Participants not described in (a) above who as of
January 1, 1999 were age 40 or older and had at least ten
years of Credited Service, an additional allocation of 2% of
Compensation shall be made.
Only Participants employed by the Employer on January 1, 1999 are
eligible for Transitional Earnings Credits. The rules applicable to
Earnings Credits described in Section 4.2 also apply to these
Transitional Earnings Credits.
4.4 Interest Credits
----------------
Each calendar quarter, the determination, calculation and allocation of
Interest Credits shall occur in the manner described in subsection (b)
below determined in accordance with subsection (a) below:
(a) For each calendar quarter, one-fourth of the Applicable
Interest Rate.
(b) During each calendar quarter, each Participant's Account shall
be adjusted by an amount equal to the interest rate determined
in (a) above multiplied by the Account balance as of the end
of the immediately preceding calendar quarter.
(c) A Participant who elects to defer the commencement of the
payment of his or her benefits under Section 10 of the Plan,
shall continue to receive an allocation of Interest Credits on
his or her Deferred Benefits in the manner prescribed above
until the first day of the month coincident with or preceding
the date the Participant receives a final distribution of his
or her Account.
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4.5 Payment of Benefits
-------------------
Upon Vested Termination of Employment, a Participant covered under this
Section 4 may elect, in accordance with appropriate administrative
procedures, to receive his or her benefit under this Plan in a form
available to the Participant under the Pension Plan. The form of
benefit elected under this Plan may be different from the basis upon
which a Participant receives his or her benefit under the Pension Plan.
A Participant also may elect, pursuant to Section 9 of the Plan, to
defer the commencement of the payment of his or her benefits.
The calculation of the amounts of optional forms of benefit shall
utilize the same adjustment factors as used in the Pension Plan, and it
is intended that these factors will be monitored and amended as
necessary to meet the provisions of Treasury Regulation section
3121(v)(2)-1(C)(2)(iii)(B)(3).
4.6 Death Benefit
-------------
Upon the death of a Participant prior to Vested Termination of
Employment, but after completing five full years of Vesting Service,
his or her Beneficiary shall be entitled to a benefit in an amount
equal to the Participant's Accrued Benefit determined as of the date of
his death.
The benefit shall be distributed to the Participant's Beneficiary or
Beneficiaries at the time and pursuant to the method elected by the
Participant. Upon application of the Participant's Beneficiary, the
Plan Manager may, in his or her sole and absolute discretion, direct
that the benefit be paid in a single lump sum.
4.7 Minimum Benefit
---------------
Upon Vested Termination of Employment, a Participant who is not a
Grandfathered Participant is entitled to a Minimum Benefit under the
Plan. The Minimum Benefit is equal to the Participant's benefit under
the Prior Plan calculated as of December 31, 1998. If the Minimum
Benefit exceeds the Participant's benefit under Section 4, the
Participant shall receive the Minimum Benefit in lieu of the Section 4
benefit.
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SECTION 5
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FROZEN BENEFIT - CERTAIN TRANSFERS
----------------------------------
Any Participant who is or becomes eligible to participate in The PNC Financial
Services Group, Inc. Retirement Savings Plan or who transfers employment to a
Subsidiary that is not an Employer shall have the value of his or her benefit
frozen as of the first day of the month following the date he or she is eligible
to participate in The PNC Financial Services Group, Inc. Retirement Savings Plan
or transfers employment to a Subsidiary that is not an Employer, except that
interest will continue to be credited under Section 4.4. Such frozen benefit
will be payable at the same time and in the same manner as benefits otherwise
payable under the Plan, provided that any future benefit eligibility
requirements are met.
SECTION 6
---------
FROZEN BENEFIT - DESIGNATED PARTICIPANTS
----------------------------------------
6.1 General Rule.
-------------
Effective as of April 1, 2002, benefit accruals under the Plan for
certain Participants designated by the Corporation who are notified of
the change prior to April 1, 2002 shall either (i) cease as of March
31, 2002, or (ii) as the case may be, be calculated as set forth in
this Section 6. The provisions of this Section 6 shall not be effective
with respect to any member of the Corporate Executive Group as
designated by the Corporation and in effect on March 31, 2002.
6.2 Designated Grandfathered Participants.
-------------------------------------
Effective April 1, 2002, Grandfathered Participants designated by the
Corporation whose benefits are calculated under Section 3 shall cease
to accrue additional years of Credited Service (and fractions thereof)
for purposes of calculating benefits payable upon Vested Termination of
Employment or at death. Such designated Grandfathered Participants'
years of Credited Service for purposes of Section 3 shall be calculated
as if their employment by an Employer had ended on March 31, 2002.
6.3 Designated Nongrandfathered Participants.
----------------------------------------
Effective April 1, 2002, Participants designated by the Corporation who
are not Grandfathered Participants and whose benefits are calculated
under Section 4 of the Plan shall cease to accrue any additional
benefits under the Plan. The values of such Participant's Accounts
shall be frozen at the values accrued through March 31, 2002, including
any Interest Credits due for the calendar quarter ended March 31, 2002.
No further Earnings Credits, Transitional Earnings Credits or Interest
Credits shall accrue to such designated nongrandfathered Participants'
Accounts after March 31, 2002.
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SECTION 7
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TRANSFER OF EMPLOYMENT TO MINORITY-OWNED ENTITY
-----------------------------------------------
If a Participant is transferred from the employment of the Corporation or a
Subsidiary to an entity the equity of which (directly or indirectly) is owned
10% or more (but 50% or less) by the Corporation (a "Minority-Owned Entity"),
the benefits earned while a Participant will be frozen (except that Interest
Credits under Section 4.4, if applicable, shall continue) and will be paid in
the event that the Participant subsequently becomes disabled while employed by
the Minority-Owned Entity or retires from the employment of the Minority-Owned
Entity.
SECTION 8
---------
DESIGNATION OF BENEFICIARIES
----------------------------
A Participant shall designate a Beneficiary or Beneficiaries to receive the
balance of the Participant's Account upon the Participant's death. Such
designation shall be on a form approved by the Plan Manager and shall not be
effective until it is received by the Plan Manager. If no valid Beneficiary
designation form is on file with the Plan Manager upon the Participant's death,
then the balance of the Participant's Account shall be payable to the
Beneficiary designated by the Participant under the Employer's group life
insurance plan, or, if no such designation exists, to the Participant's estate.
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SECTION 9
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PAYMENT OF BENEFITS
-------------------
The benefits payable to a Participant under this Plan shall be made from the
general revenues of the entity that employs the Participant on the date of the
Participant's Vested Termination of Employment.
SECTION 10
----------
DEFERRAL OF BENEFITS
--------------------
10.1 Deferral Election
-----------------
A Participant may elect to defer the commencement of the payment of his
or her benefits under this Plan. A Participant's Deferral Election Form
must be received by the Plan Manager at least one year prior to the
Participant's Vested Termination of Employment. The Deferral Election
Form shall specify the year in which payment shall commence and the
form of distribution.
10.2 Hardship Distribution
---------------------
Upon approval by the Plan Manager, in his or her sole and absolute
discretion, payment of a Participant's Deferred Benefits under the Plan
shall be made in the event of a Participant's Hardship. Payment of any
Hardship distribution shall be made in a single lump sum as soon as
administratively feasible after approval.
SECTION 11
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RIGHTS OF PARTICIPANTS
----------------------
No Participant shall have any rights to any payment under this Plan until Vested
Termination of Employment and in no event shall the interests of Participants
under this Plan be in any way subject to their debts or other obligations and
may not be voluntarily or involuntarily sold, transferred, or assigned.
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SECTION 12
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TRUST FUND
----------
No assets of the Corporation or any Employer shall be segregated or earmarked in
respect to any benefits, and all such benefits shall constitute unsecured
contractual obligations of the Employer. If the Corporation chooses to
contribute to the Trust to offset its obligation under this Plan, all assets or
property held by the Trust shall at all times remain subject to the claims of
the general creditors of the Corporation or any Employer.
SECTION 13
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CLAIMS PROCEDURE
----------------
13.1 Initial Claim
-------------
Claims for benefits under the Plan shall be filed with the Plan
Manager. If any Participant or Beneficiary claims to be entitled to a
benefit under the Plan and the Plan Manager determines that such claim
should be denied in whole or in part, the Plan Manager shall notify
such person of its decision in writing. Such notification will be
written in a manner calculated to be understood by such person and will
contain (i) specific reasons for the denial, (ii) specific reference to
pertinent Plan provisions, (iii) a description of any additional
material or information necessary for such person to perfect such claim
and an explanation of why such material or information is necessary and
(iv) information as to the steps to be taken if the person wishes to
submit a request for review. Such notification will be given within 60
days after the claim is received by the Plan Manager. If such
notification is not given within such period, the claim will be
considered denied as of the last day of such period and such person may
request a review of his or her claim.
13.2 Review Procedure
----------------
Within 60 days after the date on which a Participant or Beneficiary
receives a written notice of a denied claim (or, if applicable, within
60 days after the date on which such denial is considered to have
occurred) such person (or his or her duly authorized representative)
may (i) file a written request with the Committee for a review of his
or her denied claim and of pertinent documents and (ii) submit written
issues and comments to the Committee. The Committee will notify such
person of its decision in writing. Such notification will be written in
a manner calculated to be understood by such person and will contain
specific reasons for the decision as well as specific references to
pertinent Plan provisions. The decision on review will be made within
60 days after the request for review is received by the Committee. If
the decision on review is not made within such period, the claim will
be considered denied.
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13.3 Claims and Review Procedure Not Mandatory After a Change in Control
-------------------------------------------------------------------
After the occurrence of a Change in Control, the claims procedure and
review procedure provided for in this Section 13 shall be provided for
the use and benefit of Participants who may choose to use such
procedures, but compliance with the provisions of this Section 13 shall
not be mandatory for any Participant claiming benefits after a Change
in Control. It shall not be necessary for any Participant to exhaust
these procedures and remedies after a Change in Control prior to
bringing any legal claim or action, or asserting any other demand, for
payments or other benefits to which such Employee claims entitlement.
SECTION 14
----------
ADMINISTRATION
--------------
This Plan shall be administered by the Committee, and it shall have the sole
authority to resolve any questions which arise hereunder.
This Plan is intended to be "a plan which is unfunded and is maintained by an
employer primarily for the purpose of providing deferred compensation for a
select group of management or highly compensated employees" within the meaning
of sections 201(2), 301(a)(3) and 401(a)(1) of ERISA and shall be administered
in a manner consistent with that intent.
SECTION 15
----------
AMENDMENT AND TERMINATION
-------------------------
The Plan may be amended or terminated by the Board at any time, and any
Subsidiary of PNC that has adopted the Plan may withdraw from further
participation in the Plan at any time; provided, however, that no such
amendment, termination or withdrawal (each, a "Plan Change") shall reduce or in
any way adversely affect (i) the retirement or disability benefits payable
hereunder with respect to a Participant who is entitled to disability benefits
by reason of having become disabled prior to the date of the Plan Change or who
has terminated employment with the Employer prior to the date of such Plan
Change or (ii) the amount of, or payment of, the Accrued Benefit (as hereinafter
defined) of any other Participant as of the date of such Plan Change.
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For purposes of this Section 15, the term "Accrued Benefit" means, for a
Grandfathered Participant, the benefit that would be payable to the Participant
hereunder assuming that (i) the Participant terminated employment immediately
prior to the Plan Change, and (ii) solely for the purpose of determining the
Participant's eligibility for Vested Termination of Employment under this Plan
and not for purposes of determining the amount of benefit, that the Participant
had completed five years of Vesting Service (to the extent that the Participant
had not yet completed such years of Vesting Service immediately prior to the
Plan Change). The term "Accrued Benefit" means, for a Participant who is not a
Grandfathered Participant, an amount equal to the balance of the Participant's
Account immediately prior to the Plan Change.
After a Change in Control, the Plan may not be amended in any manner that
adversely affects the administration or payment of a Participant's benefits
hereunder (including but not limited to the timing and form or payment of
benefits hereunder) without the consent of the Participant nor may the
provisions of this Section 15, Section 16 or, for a Participant who is not a
Grandfathered Participant, Section 4.4, be amended after a Change in Control
with respect to a Participant without the written consent of the Participant;
provided, however, that the failure of a Participant to consent to any such
amendment shall not impair the ability of the Committee to amend the Plan with
respect to any other Participant who has consented to such amendment.
SECTION 16
----------
SUCCESSORS
----------
In addition to any obligations imposed by law upon any successor(s) to the
Corporation and the Employers, the Corporation and the Employers shall be
obligated to require any successor(s) (whether direct or indirect, by purchase,
merger, consolidation, operation of law or otherwise) to all or substantially
all of the business and/or assets of the Corporation and the Employers to
expressly assume and agree to perform under this Plan in the same manner and to
the same extent that the Corporation and the Employers would be required to
perform under it if no such succession had taken place; in the event of such a
succession, references to "Corporation" and "Employers" herein shall thereafter
be deemed to include such successor(s).
SECTION 17
----------
GOVERNING LAW
-------------
The Plan shall be governed according to the laws of the Commonwealth of
Pennsylvania to the extent not preempted by federal law.
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SECTION 18
----------
FUNDING OF BENEFITS
-------------------
In the sole discretion of the Corporation, the Corporation may establish a
grantor trust and make contributions thereto for the purpose of providing a
source of funds to pay benefits as they become due and payable hereunder;
provided, however, that no such trust shall result in a Participant being
required to include in gross income for federal income tax purposes any benefits
payable hereunder prior to the date of actual payment. Notwithstanding the
establishment of any such trust, a Participant's rights hereunder shall be
solely those of a general unsecured creditor of the Corporation and the
Employers.
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* * * *
Executed and adopted by the Director of Human Resources of The PNC Financial
Services Group, Inc. this 10th day of July, 2002.
/s/ William E. Rosner
--------------------------------------------
William E. Rosner, Senior Vice President and
Director of Human Resources
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