PNC Financial Services (PNC)

Our Policies on Timing of Awards

The Committee has adopted a formal equity compensation granting policy that codifies the practices generally used to grant stock options and other equity awards to our executive officers and senior employees. Under this policy, the Committee may make option grants to these individuals effective on the second business day after we publicly announce our quarterly (including year-end)

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earnings. This grant date would be the first such date on or following the decision to grant the option, regardless of the timing of that decision itself.

In the alternative, the Committee could make annual option grants effective on the date of the Board meeting at which the Board discusses the Committee’s determination of annual executive officer bonus determinations for the previous year. This meeting usually occurs in February.

The Committee seeks the flexibility to make all of its principal compensation decisions (salary, bonus, equity-based grants) on one specific date. No changes in the identity of an option grantee or the number of shares subject to the option may be made after the grant date for that option. In 2009, the Committee made all of these decisions on February 12.

The Committee recognizes that other companies have abused option granting practices. In light of those abuses, the Committee believes that granting and pricing options as of specifically identified dates improves transparency and reduces risk.

Our current practice is to use an exercise price for our options equal to the closing price on the grant date. We previously used the average of the high and low price on the grant date. However, because this method of determining the exercise price requires additional disclosure under the SEC’s disclosure rules, we changed the method of determining the exercise price from the average of the high and low to the closing price on the grant date.

Generally, the Committee delegates to management the opportunity to grant options to other senior employees out of a pool of options established by the Committee for each year around the beginning of the year, but the policy for these grants is otherwise the same as the policy applicable to grants to executive officers and other members of senior executive management. Most of these options are granted to these employees as part of the annual performance and compensation review process, with a grant date the same as the one used for the executive officers and other members of senior executive management. To the extent the pool is not fully utilized at that time, management may grant additional options later in the year, all of which are granted as of the date two business days after the quarterly earnings release next following management’s decision to grant such options.

Our Policies on Timing of Awards

In 2007, the Committee adopted a formal equity compensation granting policy that codified the practices generally used to grant stock options and other equity awards to our executive officers and senior employees. The Committee amended the policy in 2008 to refine timing requirements for grants to our executive officers and other senior employees.

Beginning with the 2009 grants, the Committee will continue to be able to make option grants to these individuals effective on the second business day after we publicly announce our quarterly (including year-end) earnings. This grant date would be the first such date on or following the decision to grant the option, regardless of the timing of that decision itself.

In the alternative, the Committee could make annual option grants effective on the date of the regularly scheduled Board meeting at which the Board ratifies the Committee’s determination of annual executive officer bonus determinations for the previous year. This meeting usually occurs in February.

This amendment stemmed from the Committee’s desire to have the flexibility to make all of its principal compensation decisions (salary, bonus, equity-based compensation) on one specific date. No changes in the identity of an option grantee or the number of shares subject to the option may be made after the grant date for that option.

The Committee recognizes that other companies have abused option granting practices in recent years. In light of those abuses, the Committee believes that granting and pricing options as of specifically identified dates improves transparency and reduces risk.

Our current practice is to use an exercise price for our options equal to the closing price on the grant date. Through 2006, we used the average of the high and low price on the grant date. However, because this method of determining the exercise price requires additional disclosure under the SEC’s disclosure rules, we changed the method of determining the exercise price from the average of the high and low to the closing price on the grant date.

The Committee typically grants options to our executive officers and other members of senior executive management early in the year as part of our annual performance and compensation review process. Over the past few years, the Committee met in early to mid-January and determined the number of options, if any, to be granted to each executive officer and other members of senior executive management. In 2007, the Committee met on January 4 and awarded options to the executive officers and other members of senior executive management effective two business days after earnings were released on January 23. In January 2008, the Committee met on January 14 and 15, and awarded options effective two business days after earnings were released on January 17.

Generally, the Committee delegates to management the opportunity to grant options to other senior employees out of a pool of options established by the Committee for each year around the beginning of the year, but the policy for these grants is otherwise the same as the policy applicable to grants to executive officers and other members of senior executive management. Most of these options are granted to these employees as part of the annual performance and compensation review process,

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with a grant date the same as the one used for the executive officers and other members of senior executive management. To the extent the pool is not fully utilized at that time, management may grant additional options later in the year, all of which are granted as of the date two business days after the quarterly earnings release next following management’s decision to grant such options.

The Committee did not grant any other options to executive officers and other members of senior executive management in 2007 other than under the annual grant process. Additional options were granted in 2007 to several executive officers and other senior employees upon the exercise of reload options granted in prior years. The Committee no longer grants new reload options. However, there are still reload options outstanding from prior years that could be exercised and result in additional option grants in future years. If an option holder exercises an option with a reload feature, the option holder uses shares of stock already owned to satisfy the exercise price and meet any associated tax withholding obligation, and the options exercised are replaced (or “reloaded”) with a new, at-the-market option for each share of common stock used. Options with this feature can only be reloaded once; the reload options cannot be replaced when they are exercised. The reload option normally will become exercisable in one year and will have the same remaining term as the option that was exercised.