PNC Bank 2005 Annual Report Download - page 134

over the Option Price and (b) the total number of Covered Shares subject to the Option that were
outstanding and unexercised immediately prior to the effective time of the Corporate Transaction.
All determinations hereunder will be made by the Committee in its sole discretion and will be final, binding
and conclusive for all purposes on all parties, including without limitation the holder of the Option.
No fractional shares will be issued on exercise of the Option. PNC will determine the manner in which any
fractional shares will be treated.
4. Exercise of Option.
4.1 Notice and Effective Date. The Option may be exercised, in whole or in part, by delivering to PNC
written notice of such exercise, in such form as PNC may from time to time prescribe, accompanied by full
payment of the aggregate Option Price with respect to that portion of the Option being exercised and
satisfaction of any amounts required to be withheld pursuant to applicable tax laws in connection with such
exercise.
In addition, notwithstanding Sections 4.2 and 4.3, Optionee may elect to complete his or her Option
exercise through a brokerage service/margin account pursuant to the broker-assisted cashless option
exercise procedure under Regulation T of the Board of Governors of the Federal Reserve System and in
such manner as may be permitted by PNC from time to time consistent with said Regulation T.
The effective date of such exercise will be the Exercise Date. Until PNC notifies Optionee to the contrary,
the form attached to the Agreement as Annex B shall be used to exercise the Option and the form attached
to the Agreement as Annex C shall be used to make tax payment elections.
In the event that the Option is exercised, pursuant to Section 2.3, by any person or persons other than
Optionee, such notice of exercise must be accompanied by appropriate proof of the derivative right of such
person or persons to exercise the Option.
4.2 Payment of Option Price. Upon exercise of the Option, in whole or in part, Optionee may pay the
aggregate Option Price (a) in cash or (b) if and to the extent then permitted by PNC, using whole shares of
PNC common stock (either by physical delivery to PNC of certificates for the shares or through PNC’ s
share attestation procedure) having an aggregate Fair Market Value on the Exercise Date not exceeding that
portion of the aggregate Option Price being paid using such shares, or through a combination of cash and
shares of PNC common stock; provided, however, that shares of PNC common stock used to pay all or any
portion of the aggregate Option Price may not be subject to any contractual restriction, pledge or other
encumbrance and must be shares that have been owned by Optionee for at least six (6) months prior to the
Exercise Date and, in the case of restricted stock, for which it has been at least six (6) months since the
restrictions lapsed, or, in either case, for such other period as may be specified or permitted by PNC.
4.3 Payment of Taxes. Optionee may elect to satisfy any or all applicable federal, state, or local tax
liabilities incurred in connection with exercise of the Option (a) by payment of cash, (b) if and to the extent
then permitted by PNC and subject to such terms and conditions as PNC may from time to time establish,
through the retention by PNC of sufficient whole shares of PNC common stock otherwise issuable upon
such exercise to satisfy the minimum amount of taxes required to be withheld in connection with such
exercise, or (c) if and to the extent then permitted by PNC and subject to such terms and conditions as PNC
may from time to time establish, using whole shares of PNC common stock (either by physical delivery to
PNC of certificates for the shares or through PNC’ s share attestation procedure) that are not subject to any
contractual restriction, pledge or other encumbrance and that have been owned by Optionee for at least six
(6) months prior to the Exercise Date and, in the case of restricted stock, for which it has been at least six
(6) months since the restrictions lapsed, or, in either case, for such other period as may be specified or
permitted by PNC.
For purposes of this Section 4.3, shares of PNC common stock that are used to satisfy applicable taxes will
be valued at their Fair Market Value on the date the tax withholding obligation arises. In no event will the