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EXHIBIT 10.6
PNC BANK CORP.
1997 LONG-TERM INCENTIVE AWARD PLAN
NONSTATUTORY STOCK OPTION AGREEMENT
OPTIONEE:
DATE OF GRANT:
OPTION PRICE PER SHARE:
COVERED SHARES:
Terms defined in the 1997 Long-Term Incentive Award Plan ("PLAN") of PNC Bank
Corp. ("CORPORATION") are used in this Agreement as defined in the Plan unless
otherwise defined in this Agreement. For certain definitions, see Annex C
attached hereto and incorporated herein by reference.
1. GRANT OF OPTION. Pursuant to the Plan and subject to the terms of this
Agreement, the Corporation hereby grants to the Optionee an Option to purchase
from the Corporation that number of Shares 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, at any time
and from time to time upon the earliest to occur of (i) the first anniversary of
the Date of Grant, (ii) the date of termination of the Optionee's employment
with the Corporation by reason of death or permanent and total disability, and
(iii) the date of termination of the Optionee's employment during a Coverage
Period either by the Corporation without Cause or by the Optionee with Good
Reason, provided that in the case of clause (iii) that such termination is at
least six months after the Date of Grant. The Option shall remain exercisable
until the Date of Expiration.
2.3 NONTRANSFERABILITY. The Option is not transferable by the Optionee other
than by will or by the laws of descent and distribution, and is exercisable,
during the Optionee's lifetime, only by the Optionee or, in the event of the
Optionee's legal disability, by the Optionee's legal representative.
3. CAPITAL ADJUSTMENTS. The number and class of unexercised Covered Shares and
the Option Price shall be subject to such adjustment, if any, as the Committee
in its sole discretion deems appropriate to reflect such events as stock
dividends, stock splits, recapitalizations, mergers, consolidations or
reorganizations.
4. EXERCISE OF OPTION.
4.1 NOTICE AND EFFECTIVE DATE. The Option may be exercised, in whole or in part,
by delivering to the Corporation written notice of such exercise, in such form
as the Committee may from time to time prescribe, accompanied by full payment of
(a) the Option Price with respect to that portion of the Option being exercised
and (b) any amounts required to be withheld pursuant to applicable tax laws in
connection with such exercise. In addition, the Optionee may elect to use the
cashless exercise procedure provided for pursuant to Section 4.2 hereof. The
effective date of such exercise shall be the Date of Exercise. Until the
Committee notifies the Optionee to the contrary, the form attached to this
Agreement as Annex A shall be used to exercise the Option granted hereunder.
4.2 PAYMENT OF THE OPTION PRICE. Upon exercise of the Option, in whole or in
part, the Optionee may pay the aggregate Option Price in cash, by delivering
duly endorsed certificates representing whole Shares having aggregate Fair
Market Value on the Date of Exercise not exceeding that portion of the Option
Price being paid by delivery of such Shares, or through a combination of cash
and Shares; provided, however, that no Shares may be used to pay any portion of
the Option Price that have not been held for at least six months prior to the
Date of Exercise or such other period as may be specified by the Committee.
Notwithstanding the foregoing, the Optionee may elect to complete his or her
option exercise through a brokerage service/margin account pursuant to the
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 the
Committee from time to time, consistent with said Regulation.
4.3 PAYMENT OF TAXES. The Optionee may elect to satisfy applicable tax
withholding requirements by payment of cash or, subject to such terms and
conditions as the Committee may from time to time establish to satisfy any or
all federal, state, or local tax liabilities incurred upon such exercise,
through retention by the Corporation of Shares otherwise issuable upon such
exercise or by delivery to the Corporation of previously acquired Shares. Until
the Committee notifies the Optionee to the contrary, the form attached to this
Agreement as Annex B shall be used to make such election.
4.4 EFFECT. The exercise, in whole or in part, of the Option shall cause a
reduction in the number of unexercised Covered Shares equal to the number of
Shares with respect to which the Option is exercised.
5. RESTRICTIONS ON EXERCISE AND UPON SHARES ISSUED UPON EXERCISE.
Notwithstanding any other provision of this Agreement, the Optionee agrees, for
himself (herself) and his (her) successors, that the Option may not be exercised
at any time that the Corporation does not have in effect a registration
statement under the Securities Act of 1933, as amended, relating to the offer of
Shares under the Plan, unless the Corporation agrees to permit such exercise.
The Optionee further agrees, for himself (herself) and his (her) successors,
that, upon the issuance of any Shares pursuant to the exercise of the Option, he
(she) will, upon the request of the Corporation, agree in writing that he (she)
is acquiring such Shares for investment only and not with a view to resale, and
that he (she) will not sell, pledge, or otherwise dispose of such Xxxxxx unless
and until (a) the Corporation is furnished with an opinion of counsel to the
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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 Securities and Exchange Commission 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 the Corporation, required for
the lawful disposition of such Shares has been filed and has become effective;
provided, however, that the Corporation is not obligated hereby to file any such
registration or notification. The Optionee further agrees that the Corporation
may place a legend embodying such restriction on the certificates evidencing
such Shares.
6. RIGHTS AS SHAREHOLDER. The Optionee shall have no rights as a Shareholder
with respect to any Covered Shares until such time as the Option is exercised
and then only with respect to those Shares issued upon such exercise.
7. EMPLOYMENT. Neither the granting of the Option evidenced by this Agreement
nor any term or provision of this Agreement shall constitute or be evidence of
any understanding, expressed or implied, on the part of the Corporation or any
of its subsidiaries to employ the Optionee for any period. References in this
Agreement to the employment of the Optionee with the Corporation shall include
employment with any subsidiary of the Corporation.
8. SUBJECT TO THE PLAN. The Option evidenced by this 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 shall not be considered an enlargement of any benefits under this
Agreement. In addition, the Option is subject to any rules and regulations
promulgated by the Committee.
IN WITNESS WHEREOF, the Corporation has caused this Agreement to be signed on
its behalf effective as of the Date of Grant.
PNC BANK CORP.
By: ________________________________
Chairman and Chief Executive Officer
ATTEST:
____________________________________
Secretary
ACCEPTED AND AGREED TO AS OF THE DATE OF XXXXX.
Optionee
Annex A - Option Exercise Form (Intentionally omitted)
Annex B - Tax Payment Election From (Intentionally omitted)
Annex C - Certain Definitions
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ANNEX C
TO PNC BANK CORP. 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 (the "AGREEMENT") to which this Annex C
is attached:
C.1 "CAUSE" means: (a) the willful and continued failure of the Optionee to
substantially perform the 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 the Optionee by the
Board or the Chief Executive Officer of the Corporation which specifically
identifies the manner in which the Board or Chief Executive Officer believes
that the Optionee has not substantially performed the Optionee's duties; or
(b) the willful engaging by the Optionee in illegal conduct or gross misconduct
that is materially and demonstrably injurious to the Corporation.
For purposes of the preceding clauses (a) and (b), no act or failure to act, on
the part of the Optionee, shall be considered "willful" unless it is done, or
omitted to be done, by the Optionee in bad faith and without reasonable belief
that the 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 Chief Executive Officer or the 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 the Optionee in good faith and in
the best interests of the Corporation. The cessation of employment of the
Optionee shall not be deemed to be for Cause unless and until there shall have
been delivered to the Optionee, as part of the notice of the 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 that,
in the good faith opinion of the Board, the Optionee is guilty of the conduct
described in clause (a) or (b) above and specifying the particulars thereof in
detail. Such resolution shall be adopted only after reasonable notice of such
Board meeting is provided to the Optionee and the Optionee is given an
opportunity, together with counsel, to be heard before the Board.
C.2 "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 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 or any successor provisions thereto), directly or indirectly, of
securities of the Corporation representing twenty percent (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 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) 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 sixty percent (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
(2/3) 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 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 (2/3) 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 the Corporation shall not by itself constitute a
"Change in Control."
C.3 "CIC FAILURE" means the following: (a) with respect to a CIC Triggering
Event described in Section C.4(a), the Corporation'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 C.4(b), the
proxy contest fails to replace or remove a majority of the members of the Board.
C.4 "CIC TRIGGERING EVENT" means the occurrence of either of the following: (a)
the Board or the Corporation's shareholders approve a transaction described in
Subsection (b) of the definition of Change in Control contained in Section C.2
hereof; 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.
C.5 "COVERAGE PERIOD" means a period 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
ending on the date that is two 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 shall terminate upon the
earlier to occur of (x) the date of a CIC Failure and (y) the date that is two
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
shall commence upon the earlier to occur of clauses (i) and (ii) in the
preceding sentence.
C.6 "DATE OF EXERCISE" means the date on which the Corporation receives written
notice of the exercise in such form as the Committee may from time to time
prescribe, in whole or in part, of the Option pursuant to the terms of the
Agreement.
C.7 "DATE OF EXPIRATION" means the date on which the Option shall expire, which
shall be the earliest of the following times:
(a) upon retirement of the Optionee from employment with the Corporation prior
to the date that the Option becomes exercisable pursuant to Section 2.2 of the
Agreement;
(b) upon termination of the Optionee's employment with the Corporation for
Cause;
(c) upon termination of the Optionee's employment with the Corporation for any
reason other than (i) Cause, (ii) retirement, (iii) death, (iv) permanent and
total disability or (v) termination during a Coverage Period by the Corporation
without Cause or by the Optionee with Good Reason, unless the Committee
determines otherwise;
(d) one year after termination of the Optionee's employment with the Corporation
by reason of death;
(e) three years after the termination of the Optionee's employment with the
Corporation by reason of (i) retirement on or after the date that the Option
becomes exercisable pursuant to Section 2.2 of the Agreement, (ii) permanent and
total disability, or (iii) termination during a Coverage Period by the
Corporation without Cause or by the Optionee with Good Reason; and
(f) ten years after the Date of Xxxxx.
C.8 "DATE OF GRANT" means the date set forth as the "Date of Grant" on page 1 of
the Agreement.
C.9 "GOOD REASON" means: (a) the assignment to the Optionee of any duties
inconsistent in any respect with the 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 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 the Optionee;
(b) a reduction by the Corporation in the Optionee's annual base salary as in
effect on the Date of Grant, as the same may be increased from time to time;
(c) the Corporation's requiring the Optionee to be based at any office or
location that is more than fifty (50) miles from the 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 the Optionee
participates immediately prior to either the CIC Triggering Event or the Change
in Control that is material to the 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
the 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 the 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 the Optionee with
benefits substantially similar to those received by the 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 the
Optionee was participating, at costs substantially similar to those paid by the
Optionee, immediately prior to the CIC Triggering Event or the Change in
Control.
C.10 "OPTION" means the Nonstatutory Stock Option granted to the Optionee in
Section 1 of the Agreement pursuant to which the Optionee may purchase Shares as
provided in the Agreement.
C.11 "OPTION PRICE" means the dollar amount per Share set forth as the "Option
Price" on page 1 of the Agreement.
C.12 "OPTIONEE" means the person identified as the "Optionee" on page 1 of the
Agreement.
C.13 "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.
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