Performance-Based Restricted Stock. The performance-based restricted stock units will vest ratably in annual installments over a four-year period. However, each initially equal annual installment is subject to adjustment based on State Street’s average return on common equity over the full term to date of the restricted stock award. If the average return on common equity for the fiscal years during the term completed prior to the vesting date is equal to or greater than 14%, then 100% or more of that installment of the award will vest (with an increase of 10% vesting for each additional 1% of average return on common equity, subject to a limit of 130% for average return on common equity of 17% or more). If the average return on common equity is below 14%, for each 1% of average return on common equity below 14%, the vesting is reduced by 10% (and is zero for average return on common equity below 5%). Therefore, the ultimate number of shares received under the award may be more or less than the initial number of units awarded. For purposes of determining the vesting of these awards, average return on common equity will be determined in accordance with U.S. generally accepted accounting principles. For 2009, Mr. Logue received an award of 35,786 performance-based restricted stock units, Mr. Hooley received an award of 138,002 performance-based restricted stock units, Mr. Antonellis received an award of 86,533 performance-based restricted stock units, Mr. Phalen received an award of 89,303 performance-based restricted stock units and Mr. Resch received an award of 99,598 performance-based restricted stock units.

Deferred and Non-Deferred Cash. For 2009, the cash element of incentive compensation awards for our senior executive officers was divided into two components: deferred cash and non-deferred, or immediately available, cash. Deferred cash awards for 2009 will vest ratably over the eight fiscal quarters following the date of grant and are credited with 3% interest per annum. For 2009, Mr. Logue received a deferred cash award of $2,695,000 and a non-deferred cash award of $2,695,000, Mr. Hooley received a deferred cash award of $2,069,600 and a non-deferred cash award of $446,700, Mr. Antonellis received a deferred cash award of $1,297,700 and a non-deferred cash award of $284,200, Mr. Phalen received a deferred cash award of $1,339,300 and a non-deferred cash award of $293,000 and Mr. Resch received a deferred cash award of $1,493,600 and a non-deferred cash award of $325,500.

Compensation Recovery. The deferred incentive compensation described above, consisting of performance-based restricted stock and deferred cash awards, each contain a compensation recovery, or “clawback” provision. This provision permits the reduction or cancellation, in whole or in part, of the amount to be paid in respect of the award in the event State Street determines that (1) the executive engages in fraud, gross negligence or any misconduct that was materially detrimental to the interests or business reputation of State Street or any of its businesses or (2) as a result of a material financial restatement or miscalculation or inaccuracy in the determination of performance metrics, financial results or other criteria, the executive would have received a smaller or no award.