Exhibit 10.1
AGREEMENT
THIS AGREEMENT ("Agreement") is made as of the XXXXX day of XXXXXXX, 2004,
between KEYCORP, an Ohio corporation ("Key"), and XXXXXXXXXX (the "Executive").
Key is entering into this Agreement in recognition of the importance of
the Executive's services to the continuity of management of Key and based upon
its determination that it will be in the best interests of Key and its
Subsidiaries to encourage the Executive's continued attention and dedication to
the Executive's duties in the potentially disruptive circumstances of a possible
Change of Control of Key. (As used in this Agreement, the terms "Subsidiaries"
and "Change of Control" and certain other capitalized terms have the meanings
ascribed to them in Section 8, at the end of this Agreement.)
Key and the Executive agree, effective as of the date first set forth
above, as follows:
1. Basic Severance Benefits. The benefits described in Sections 1.1, 1.2, and
1.3 below are subject to the limitations set forth in Sections 5.1 (which
requires an election among applicable agreements providing severance benefits if
more than one such agreement would apply in the particular circumstances of the
termination of the Executive's employment and stipulates that any payments
received under this Agreement are in lieu of other claims or rights), 5.2
(regarding withholding), and 5.3 (requiring the execution of a waiver and
release by the Executive).
1.1 If Employment is Terminated Without Cause, etc., Within Two Years of a
Change of Control. If, within two years following the occurrence of a
Change of Control, the Executive's employment with Key and its
Subsidiaries is terminated by Key or its Subsidiary for any reason other
than Cause, Disability, or death or by the Executive after a Reduction of
Compensation or a Mandatory Relocation has occurred:
(a) Lump Sum Payment. Key shall pay to the Executive, within 30
business days after the Termination Date, a lump sum severance
benefit equal to three times the sum of (i) one year's Base Salary
(at the highest rate in effect at any time during the one year
period ending on the date of the Change of Control) plus (ii)
Average Annual Incentive Compensation; and
(b) Retirement and Savings Plans. Effective as of the Termination
Date, the Executive's interest in all Relevant Plans shall become
fully vested and nonforfeitable and the Executive's right to and
interest in all subsequent accruals provided for in the remainder of
this Section 1.1(b) under any of the Relevant Plans shall also be
fully vested and nonforfeitable. For the period beginning on the day
after the Termination Date and ending on the third anniversary of
the Termination Date (the "Section 1.1 Benefit Period"), Key shall
cause the Executive to continue to be covered by and to participate
in all of the Relevant Plans in the same manner and to the same
extent as if the Executive continued in the full-time employ of Key
throughout the Section 1.1 Benefit Period, except that, if Key
determines that such coverage or participation in any one or more of
the Relevant Plans is Impermissible, the Executive shall continue to
be covered by and participate as aforesaid in all of the Relevant
Plans as to which such coverage or participation is not
Impermissible and, with respect to each Relevant Plan as to which
such continued coverage or participation is Impermissible, Section
1.4(b) shall apply. With respect to each Discontinued Plan, Section
1.4(c) shall apply.
1.2 If Employment is Terminated by Executive for Good Reason During a
Window Period. Except as provided in the last sentence of this Section
1.2, if the Executive's employment with Key and its Subsidiaries is
terminated by the Executive for Good Reason during a Window Period:
(a) Lump Sum Payment. Key shall pay to the Executive, within 30
business days after the Termination Date, a lump sum severance
benefit equal to one and one half times the sum of (i) one year's
Base Salary (at the highest rate in effect at any time during the
one year period ending on the date of the Change of Control) plus
(ii) Average Annual Incentive Compensation, and
(b) Retirement and Savings Plans. Effective as of the Termination
Date, the Executive's interest in all Relevant Plans shall become
fully vested and nonforfeitable and the Executive's right to and
interest in all subsequent accruals provided for in the remainder of
this Section 1.2(b) under any of the Relevant Plans shall also be
fully vested and nonforfeitable. For the period beginning on the day
after the Termination Date and ending eighteen months, to the day,
after the Termination Date (the "Section 1.2 Benefit Period"), Key
shall cause the Executive to continue to be covered by and to
participate in all of the Relevant Plans in the same manner and to
the same extent as if the Executive continued in the full-time
employ of Key throughout the Section 1.2 Benefit Period, except
that, if Key determines that such coverage or participation in any
one or more of the Relevant Plans is Impermissible, the Executive
shall continue to be covered by and participate as aforesaid in all
of the Relevant Plans as to which such coverage or participation is
not Impermissible and, with respect to each Relevant Plan as to
which such continued coverage or participation is Impermissible,
Section 1.4(b) shall apply. With respect to each Discontinued Plan,
Section 1.4(c) shall apply.
This Section 1.2 shall not apply if, at the Termination Date, (x) there
has been either any Reduction of Compensation or any Mandatory Relocation
(in which event Section 1.1 would apply to the termination) or (y) Key or
any Subsidiary has Cause to terminate the Executive's employment (in which
case no lump sum severance or retirement benefits would be payable or
provided under either of Sections 1.1 or 1.2).
1.3 Payment of Cost of COBRA Health Benefits. If the Executive becomes
entitled to payment of a lump sum severance benefit under either of
Sections 1.1 or 1.2 of this Agreement and the Executive elects to continue
to receive health benefits pursuant to an election that Key or any
Subsidiary is required to provide to the Executive in order to comply with
Section 4980B(f) of the Internal Revenue Code (commonly referred to as
"COBRA continuation coverage") during the period specified in Section
4980B(f) (the "COBRA continuation period"), Key will pay the cost of
continuing those benefits from the Termination Date through the first to
occur of (a) the end of the COBRA continuation period or (b) the date on
which the Executive becomes employed (other than on a part-time or
temporary basis) by any other person or entity.
1.4 Provisions Applicable to Continued Retirement and Savings Plan
Participation.
(a) If the Executive becomes entitled to payment of a lump sum
severance benefit under either of Section 1.1 or Section 1.2, the
rules set forth in the remainder of this Section 1.4(a) shall be
applicable for purposes of all Relevant Plans:
(i) the entire Section 1.1 Benefit Period or Section 1.2
Benefit Period (each, a "Benefit Period"), as the case may be,
shall be included in determining the Executive's years of
service,
(ii) amounts received by the Executive under clause (a)(i) of
either of Section 1.1 or Section 1.2, as the case may be,
shall be deemed to be base salary received by the Executive
ratably during the applicable Benefit Period, and
(iii) amounts received by the Executive under clause (a)(ii)
of either of Section 1.1 or Section 1.2, as the case may be,
to the extent allocable to short term incentive compensation
that was taken into account in determining Average Annual
Incentive Compensation, shall be deemed to be short term
incentive compensation received by the Executive ratably
during the applicable Benefit Period.
(b) If either Section 1.1(b) or Section 1.2(b) becomes applicable
and at any time during the applicable Benefit Period, Key determines
in good faith that continuing the Executive's coverage by and
participation in any of the Relevant Plans during the applicable
Benefit Period is Impermissible, the Executive shall not be covered
by and participate in such affected plan or plans during the
applicable Benefit Period, but Key shall provide to the Executive
under this Agreement, as a supplemental retirement benefit, payments
and benefits that put the Executive in the same position that the
Executive would have been in had the Executive continued to be
covered by and to participate in all such affected plans throughout
the applicable Benefit Period (taking into account the rules set
forth in Section 1.4(a)
above) to the same extent as the Executive was a participant
immediately before the Termination Date, with the supplemental
payments and benefits under this sentence being payable to the
Executive (or, if applicable, to the Executive's spouse, estate, or
designated beneficiary) at the same time and with the same payment
options as would be applicable under the affected plan or plans in
question.
(c) If either Section 1.1(b) or Section 1.2(b) becomes applicable
and any of the Relevant Plans are Discontinued Plans, as to each
such Discontinued Plan, Key shall provide to the Executive under
this Agreement, as a supplemental retirement benefit, payments and
benefits that put the Executive in the same position that the
Executive would have been in had the Discontinued Plan continued
through the end of the applicable Benefit Period without having
become a Discontinued Plan and had the Executive continued to be
covered by and to participate in that Discontinued Plan throughout
the applicable Benefit Period (taking into account the rules set
forth in Section 1.4(a) above) to the same extent as the Executive
was a participant immediately before the date of the Change of
Control, with the supplemental payments and benefits under this
sentence being payable to the Executive (or, if applicable, to the
Executive's spouse, estate, or designated beneficiary) at the same
time and with the same payment options as would be applicable under
the Discontinued Plan, provided however, that to the extent the
Discontinued Plan has been substituted for by another Relevant Plan,
the amount payable by Key under this Section 1.4(c) shall be offset
by the amounts actually paid under that substitute plan.
2. Certain Compensation Guaranties During Two Years following a Change of
Control. For so long as the Executive remains in the employ of Key or one of its
Subsidiaries during the period beginning on the day after any Change of Control
and continuing through the second anniversary of that Change of Control (the
period of the Executive's employment during such two year period being the
"Guaranteed Compensation Period"), the Executive shall be entitled to the
Incentive Compensation Guaranty set forth in Section 2.1 and to the Option/SAR
Guaranty set forth in Section 2.2.
2.1 Guaranteed Level of Incentive Compensation. Except as otherwise
provided in Section 2.3, Key shall cause the Executive to receive, during
the Guaranteed Compensation Period, as incentive compensation, an amount
that, on an annualized basis, is at least equal to the Executive's Average
Annual Incentive Compensation. The guaranty set forth in the immediately
preceding sentence (the "Incentive Compensation Guaranty") establishes a
minimum amount of incentive compensation that must be paid to the
Executive with respect to the Executive's employment during the Guaranteed
Compensation Period. Except as and to the extent otherwise permitted by
any of the provisions of Section 2.3:
(a) Key shall make payments to the Executive in cash that satisfy
the Incentive Compensation Guaranty quarterly in arrears, within 30
days after the end of each calendar quarter for each quarter or
portion thereof during the Guaranteed Compensation Period;
(b) If the Executive's employment terminates for any reason other
than Cause, Key shall pay all unpaid guaranteed incentive
compensation with respect to the Guaranteed Compensation Period to
the Executive in a lump sum by not later than 30 business days after
the Termination Date; and
(c) If the Executive's employment is terminated by Key for Cause,
Key shall not be required to pay to the Executive any amount of
incentive compensation on account of the Incentive Compensation
Guaranty that was not required to have been paid before the
Termination Date.
2.2 Guaranteed Participation in Stock Option and SAR Plans. During the
Guaranteed Compensation Period, the Executive shall participate fully (and
at a level at least substantially equivalent to that of comparable senior
executives of Key) in each and every stock option and stock appreciation
right plan in which similarly situated executives of Key and its
Subsidiaries generally participate. The guaranty of full participation set
forth in this Section 2.2 is hereinafter sometimes referred to as the
"Option/SAR Guaranty."
2.3 Exceptions to and Alternative Means of Satisfying the Incentive
Compensation Guaranty. For purposes of the exceptions and alternative
means of satisfying the Incentive Compensation Guaranty that are set forth
in this Section 2.3, the Incentive Compensation Guaranty shall be deemed
to be made up of two parts, the
"Short Term Part" and the "Long Term Part," each of which shall bear the
same proportion, respectively, to the entire Incentive Compensation
Guaranty as Average Short Term Incentive Compensation and Average Long
Term Incentive Compensation bear, respectively, to Average Annual
Incentive Compensation.
(a) Bona fide Short Term Incentive Compensation Plan Exception. If
(i) Key maintains a bona fide short term incentive compensation plan
that would satisfy the Short Term Part if the Executive received
short term incentive compensation under that plan at the Executive's
target level; (ii) Key, in administering that plan in good faith and
without discriminating against the Executive, utilizes a performance
factor that is intended to rate for the short term compensation
cycle in question either the corporation's overall performance or
the overall performance of the business unit in which the Executive
works; (iii) that performance factor is uniformly applied (either in
establishing an incentive compensation pool or against each
participant's target) to all participants in the plan or to all
participants in the plan that work in the business unit in which the
Executive works, as the case may be; and (iv) the application of
that factor reduces the short term incentive compensation payable
under that plan to a level below the Executive's target level; then
payment of the short term incentive compensation, if any, due to the
Executive at the reduced level under that plan shall satisfy Key's
obligation under the Short Term Part for that particular short term
compensation cycle.
(b) Annual Payment Exception. If Key maintains a bona fide short
term incentive compensation plan that would satisfy the Short Term
Part if the Executive received short term incentive compensation
under that plan at the Executive's target level and that plan
provides for payment of all amounts earned at regularly scheduled
times not less frequently than once a year, Key may satisfy the
Short Term Part by paying incentive compensation to the Executive
under that plan (at not less than the Executive's target level or as
reduced if permitted by 2.3(a) above) at those regularly scheduled
times, except that if Executive's employment terminates for any
reason other than Cause, Key shall make payments under that plan,
pro rated to include all periods within the Compensation Guaranty
Period as to which the Executive has not yet received incentive
compensation under that plan, within 30 business days after the
Termination Date.
(c) Issuance of Restricted Stock Alternative. As an alternative to
paying Executive cash to satisfy the Long Term Part, Key may make
restricted stock grants of Common Shares to the Executive each year
during the Guaranteed Compensation Period that:
(i) are made during the same calendar quarter of the year as
the calendar quarter during which Key made LTIC Stock Grants
in the year immediately preceding the Change Year (but if Key
made such grants during more than one calendar quarter in the
year immediately preceding the Change Year, then the new grant
shall be made during the same calendar quarter of the year as
the calendar quarter during which Key made grants to the
highest number of officers in the year immediately preceding
the Change Year);
(ii) have a Fair Market Value that on an annual basis is at
least equal to the Executive's Average Long Term Incentive
Compensation;
(iii) provide for time lapsed vesting of the restricted stock
subject to the grant so that the entire grant will be fully
vested not later than the third anniversary of the date of
grant if the Executive continues to be employed through that
date; and
(iv) have the further provision that, upon any termination of
the Executive's employment other than a termination for Cause
(including, without limitation, any termination by reason of
death, disability, voluntary or involuntary retirement, or
resignation), if, as of the Termination Date, less than a
proportionate part of the Common Shares subject to the
restricted stock grant granted to the Executive during the
Guaranteed Compensation Period has vested, then an additional
portion of those Common Shares shall vest immediately on the
Termination Date so that, in the aggregate, a proportionate
part has vested as of the Termination Date. For these
purposes, "a proportionate part" means the full number of
Common Shares in the restricted stock grant multiplied by a
fraction, the numerator of which is the number of days between
(x) January 1 of the calendar year in which the restricted
stock grant was made and (y) the last day of the Guaranteed
Compensation Period, inclusive, and the denominator of which
is 1095 (i.e., 365 times three).
If Key makes restricted stock grants as provided in this 2.3(c), Key will
have satisfied the Long Term Part.
3. Other Benefits.
3.1 Reimbursement of Certain Expenses After a Change of Control.
(a) From and after a Change of Control, Key shall pay, as incurred,
all expenses of the Executive, including the reasonable fees of
counsel engaged by the Executive, of defending any action brought to
have this Agreement declared invalid or unenforceable.
(b) From and after a Change of Control, Key shall pay, as incurred,
all expenses of the Executive, including the reasonable fees of
counsel engaged by the Executive, of prosecuting any action to
compel Key to comply with the terms of this Agreement upon receipt
from Executive of an undertaking to repay Key for such expenses if,
and only if, it is ultimately determined by a court of competent
jurisdiction that the Executive had no reasonable grounds for
bringing that action (which determination need not be made simply
because the Executive fails to succeed in the action).
(c) From and after a Change of Control, expenses (including
attorney's fees) incurred by the Executive in defending any action,
suit, or proceeding commenced or threatened (whether before or after
the Change of Control) against the Executive for any action or
failure to act as an employee, officer, or director of Key or any
Subsidiary shall be paid by Key, as they are incurred, in advance of
final disposition of the action, suit, or proceeding upon receipt of
an undertaking by or on behalf of the Executive in which the
Executive agrees to reasonably cooperate with Key or the Subsidiary,
as the case may be, concerning the action, suit, or proceeding, and
(i) if the action, suit, or proceeding is commenced or threatened
against the Executive for any action or failure to act as a
director, to repay the amount if it is proved by clear and
convincing evidence in a court of competent jurisdiction that the
Executive's action or failure to act involved an act or omission
undertaken with deliberate intent to cause injury to Key or a
Subsidiary or undertaken with reckless disregard for the best
interests of Key or a Subsidiary, or (ii) if the action, suit, or
proceeding is commenced or threatened against the Executive for any
action or failure to act as an officer or employee, to repay the
amount if it is ultimately determined that the Executive is not
entitled to be indemnified. The obligation of Key to advance
expenses provided for in this Section 3.1(c) shall not be deemed
exclusive of any other rights to which the Executive may be entitled
under the articles of incorporation or regulations of Key or of any
Subsidiary, any agreement, vote of shareholders or disinterested
directors, or otherwise.
3.2 Indemnification. From and after a Change of Control, Key shall
indemnify the Executive, to the full extent permitted or authorized by the
Ohio General Corporation Law as it may from time to time be amended, if
the Executive is (whether before or after the Change of Control) made or
threatened to be made a party to any threatened, pending, or completed
action, suit, or proceeding, whether civil, criminal, administrative, or
investigative, by reason of the fact that the Executive is or was a
director, officer, or employee of Key or any Subsidiary, or is or was
serving at the request of Key or any Subsidiary as a director, trustee,
officer, or employee of a bank, corporation, partnership, joint venture,
trust, or other enterprise. The indemnification provided by this Section
3.2 shall not be deemed exclusive of any other rights to which the
Executive may be entitled under the articles of incorporation or the
regulations of Key or of any Subsidiary, or any agreement, vote of
shareholders or disinterested directors, or otherwise, both as to action
in the Executive's official capacity and as to action in another capacity
while holding such office, and shall continue as to the Executive after
the Executive has ceased to be a director, trustee, officer, or employee
and shall inure to the benefit of the heirs, executors, and administrators
of the Executive.
3.3 Disability. If, after a Change of Control and prior to the Termination
Date, the Executive is unable to perform services for Key or any
Subsidiary for any period by reason of disability of the Executive, Key
will pay
and provide to the Executive all compensation and benefits to which the
Executive would have been entitled had the Executive continued to be
actively employed by Key or any Subsidiary through the earliest of the
following dates: (a) the first date on which the Executive is no longer so
disabled to such an extent that the Executive is unable to perform
services for Key or any Subsidiary (whereupon the Executive shall be
restored to his duties and this Agreement shall apply in accordance with
its terms), (b) the date on which the Executive becomes eligible for
payment of long term disability benefits under a long term disability plan
generally applicable to executives of Key or a Subsidiary, (c) the date on
which Key has paid and provided 24 months of compensation and benefits to
the Executive during the Executive's disability, or (d) the date of the
Executive's death.
3.4 Gross-Up of Payments Deemed to be Excess Parachute Payments.
(a) Key and the Executive acknowledge that, following a Change of
Control, one or more payments or distributions to be made by Key to
or for the benefit of the Executive (whether paid or payable or
distributed or distributable pursuant to the terms of this
Agreement, under some other plan, agreement, or arrangement, or
otherwise) (a "Payment") may be determined to be an "excess
parachute payment" that is not deductible by Key for federal income
tax purposes and with respect to which the Executive will be subject
to an excise tax because of Sections 280G and 4999, respectively, of
the Internal Revenue Code (hereinafter referred to respectively as
"Section 280G" and "Section 4999"). If the Executive's employment is
terminated after a Change of Control occurs, the Accounting Firm,
which, subject to any inconsistent position asserted by the Internal
Revenue Service, shall make all determinations required to be made
under this Section 3.4, shall determine whether any Payment would be
an excess parachute payment and shall communicate its determination,
together with detailed supporting calculations, to Key and to the
Executive within 30 days after the Termination Date or such earlier
time as is requested by Key. Key and the Executive shall cooperate
with each other and the Accounting Firm and shall provide necessary
information so that the Accounting Firm may make all such
determinations. Key shall pay all of the fees of the Accounting Firm
for services performed by the Accounting Firm as contemplated in
this Section 3.4.
(b) If the Accounting Firm determines that any Payment gives rise,
directly or indirectly, to liability on the part of the Executive
for excise tax under Section 4999 (and/or any penalties and/or
interest with respect to any such excise tax), Key shall make
additional cash payments to the Executive, from time to time and at
the same time as any Payment constituting an excess parachute
payment is paid or provided to the Executive, in such amounts as are
necessary to put the Executive in the same position, after payment
of all federal, state, and local taxes (whether income taxes, excise
taxes under Section 4999 or otherwise, or other taxes) and any and
all penalties and interest with respect to any such excise tax, as
the Executive would have been in after payment of all federal,
state, and local income taxes if the Payments had not given rise to
an excise tax under Section 4999 and no such penalties or interest
had been imposed.
(c) If the Internal Revenue Service determines that any Payment
gives rise, directly or indirectly, to liability on the part of the
Executive for excise tax under Section 4999 (and/or any penalties
and/or interest with respect to any such excise tax) in excess of
the amount, if any, previously determined by the Accounting Firm,
Key shall make further additional cash payments to the Executive not
later than the due date of any payment indicated by the Internal
Revenue Service with respect to these matters, in such amounts as
are necessary to put the Executive in the same position, after
payment of all federal, state, and local taxes (whether income
taxes, excise taxes under Section 4999 or otherwise, or other taxes)
and any and all penalties and interest with respect to any such
excise tax, as the Executive would have been in after payment of all
federal, state, and local income taxes if the Payments had not given
rise to an excise tax under Section 4999 and no such penalties or
interest had been imposed.
(d) If Key desires to contest any determination by the Internal
Revenue Service with respect to the amount of excise tax under
Section 4999, the Executive shall, upon receipt from Key of an
unconditional written undertaking to indemnify and hold the
Executive harmless (on an after tax basis) from any and all adverse
consequences that might arise from the contesting of that
determination, cooperate with Key in that contest at Key's sole
expense. Nothing in this clause (d) shall require the
Executive to incur any expense other than expenses with respect to
which Key has paid to the Executive sufficient sums so that after
the payment of the expense by the Executive and taking into account
the payment by Key with respect to that expense and any and all
taxes that may be imposed upon the Executive as a result of the
Executive's receipt of that payment, the net effect is no cost to
the Executive. Nothing in this clause (d) shall require the
Executive to extend the statute of limitations with respect to any
item or issue in the Executive's tax returns other than,
exclusively, the excise tax under Section 4999. If, as the result of
the contest of any assertion by the Internal Revenue Service with
respect to excise tax under Section 4999, the Executive receives a
refund of a Section 4999 excise tax previously paid and/or any
interest with respect thereto, the Executive shall promptly pay to
Key such amount as will leave the Executive, net of the repayment
and all tax effects, in the same position, after all taxes and
interest, that the Executive would have been in if the refunded
excise tax had never been paid.
4. No Set-Off; No Obligation to Seek Other Employment or to Otherwise Mitigate
Damages; No Effect Upon Other Plans. Key's obligation to make the payments
provided for in this Agreement and otherwise to perform its obligations
hereunder shall not be affected by any set-off, counterclaim, recoupment,
defense, or other claim whatsoever that Key or any of its Subsidiaries may have
against the Executive. The Executive shall not be required to mitigate damages
or the amount of any payment provided for under this Agreement by seeking other
employment or otherwise. Except as provided in Section 1.3, the amount of any
payment provided for under this Agreement shall not be reduced by any
compensation or benefits earned by the Executive as the result of employment by
another employer or otherwise after the termination of the Executive's
employment. Neither the provisions of this Agreement, nor the execution of the
waiver and release referred to in Section 5.3 below, nor the making of any
payment provided for hereunder shall reduce any amounts otherwise payable, or in
any way diminish the Executive's rights, under any incentive compensation plan,
stock option or stock appreciation rights plan, deferred compensation plan,
restricted stock plan or agreement, retirement or supplemental retirement plan,
stock purchase and savings plan, disability or insurance plan, or other similar
contract, plan, or arrangement of Key or any Subsidiary, all of which will
continue to be governed by their respective terms.
5. Certain Limitations on Benefits.
5.1 Election of Benefits Required; Payments in Lieu of Other Claims or
Rights. If (a) the Executive is a party to either or both of an employment
agreement (which includes any letter agreement regarding Executive's
employment with Key or any Subsidiary) or severance agreement with Key or
any Subsidiary (singularly or collectively, the "Prior Agreement"), and
(b) the Executive's employment is terminated under circumstances giving
rise to a right on the part of the Executive to receive continuing
compensation, separation pay, or other severance benefits under the Prior
Agreement and under this Agreement, the Executive shall have the right to
elect to have either the Prior Agreement (if and only to the extent the
Prior Agreement is applicable) or this Agreement (if and only to the
extent this Agreement is applicable) , but not both, apply to the
termination. If this Section 5.1 applies: (x) Key shall not make any
payments arising out of the termination of the Executive's employment,
either under the Prior Agreement or under this Agreement, until after the
Executive has delivered to Key a signed notice of election to receive
payments under the Prior Agreement or under this Agreement, and (y) if the
Executive elects to receive payments under the Prior Agreement, the
provisions of Sections 3.1, 3.2, and 3.4 of this Agreement shall
nevertheless continue to be applicable, but without duplication of
payments. If the Executive receives any payments under Section 1.1(a) or
Section 1.2(a), as the case may be, of this Agreement as a result of the
termination of the Executive's employment following a Change of Control,
those payments shall be in lieu of any and all other claims or rights that
the Executive may have for severance, separation, and/or salary
continuation pay upon that termination of the Executive's employment.
5.2 Taxes; Withholding of Taxes. Without limiting either the right of Key
or its Subsidiary to withhold taxes pursuant to this Section 5.2 or the
obligation of Key to make gross-up payments pursuant to Section 3.4, the
Executive shall be responsible for all income, excise, and other taxes
(federal, state, city, or other) imposed on or incurred by the Executive
as a result of receiving the payments provided in this Agreement,
including, without limitation, the payments provided under Section 1 of
this Agreement. Key or its Subsidiary may withhold from any amounts
payable under this Agreement all federal, state, city, or other taxes as
Key shall determine to be required pursuant to any law or government
regulation or ruling. Without limiting the generality
of the foregoing, Key or its Subsidiary may withhold from any amount
payable under either of Sections 1.1 or 1.2 of this Agreement amounts
sufficient to satisfy any tax withholding requirements that may arise out
of any payment made to the Executive by Key or any Subsidiary under
Section 1.3 of this Agreement.
5.3 Waiver and Release. Key may condition the payment of any amounts
otherwise due under Section 1 of this Agreement upon (a) the execution by
the Executive of a waiver and release in the form attached to this
Agreement as Exhibit A, with blanks appropriately filled and, in the case
of clause (e) contained therein, completed with the number of days that
Key determines is required under applicable law, but in no event more than
45 days, and (b) the observation of such waiting periods, if any, before
and after execution of the waiver and release by the Executive as are
required by law, such as, for example, the waiting periods required for a
waiver and release to be effective with respect to claims under the Age
Discrimination in Employment Act, provided that Key delivers to the
Executive such a waiver and release, appropriately completed, within seven
days of the date on which the Executive's employment is terminated.
6. Term of this Agreement. This Agreement shall be effective upon the date first
above written and shall thereafter apply to any Change of Control occurring on
or before December 31, 2005. Unless this Agreement is terminated earlier
pursuant to Section 6.1, on December 31, 2005 and on December 31 of each
succeeding year thereafter (a "Renewal Date"), the term of this Agreement shall
be automatically extended for an additional year unless either party has given
notice to the other, at least one year in advance of that Renewal Date, that the
Agreement shall not apply to any Change of Control occurring after that Renewal
Date.
6.1 Termination of Agreement Upon Termination of Employment Before a
Change of Control. This Agreement shall automatically terminate and cease
to be of any further effect on the first date occurring before a Change of
Control on which the Executive is no longer employed by Key or any
Subsidiary, except that, for purposes of this Agreement, any termination
of employment of the Executive that is effected before and in
contemplation of a Change of Control that occurs after the date of the
termination shall be deemed to be a termination of the Executive's
employment as of immediately after that Change of Control and this
Agreement shall be deemed to be in effect immediately after that Change of
Control.
6.2 No Termination of Agreement after a Change of Control. If a Change of
Control occurs while this Agreement remains in effect, this Agreement
shall remain effective indefinitely thereafter with respect to any and all
consequences flowing from that Change of Control under the terms of this
Agreement. However, after a Change of Control, Key may terminate this
Agreement with respect to any further Change of Control that might occur
after a future Renewal Date by giving notice, at least one year in advance
of that future Renewal Date, as contemplated above in this Section 6, that
the Agreement shall not apply to any Change of Control occurring after
that future Renewal Date.
7. Miscellaneous.
7.1 Successor to Key. Key shall not consolidate with or merge into any
other corporation, or transfer all or substantially all of its assets to
another corporation or bank, unless such other corporation or bank shall
assume this Agreement in a signed writing and deliver a copy thereof to
the Executive. Upon such assumption the successor corporation or bank
shall become obligated to perform the obligations of Key under this
Agreement and the term "Key" as used in this Agreement shall be deemed to
refer to such successor corporation or bank.
7.2 Notices. For purposes of this Agreement, notices and all other
communications provided for in this Agreement shall be in writing and
shall be deemed to have been duly given when delivered or mailed by United
States registered mail, return receipt requested, postage prepaid, and
addressed, in the case of notices to Key or a Subsidiary, as follows:
KeyCorp
127 Public Square
Cleveland, Ohio 44114
Attention: Secretary
and, in the case of notices to the Executive, properly addressed to the
Executive at the Executive's most recent home address as shown on the
records of Key or its Subsidiary, or such other address as either party
may have furnished to the other in writing in accordance herewith, except
that notices of change of address shall be effective only upon receipt.
7.3 Employment Rights. Nothing expressed or implied in this Agreement
shall create any right or duty on the part of Key or the Executive to have
the Executive continue as an officer of Key or a Subsidiary or to remain
in the employment of Key or a Subsidiary.
7.4 Administration. Key shall be responsible for the general
administration of this Agreement and for making payments under this
Agreement. All fees and expenses billed by the Accounting Firm for
services contemplated under this Agreement shall be the responsibility of
Key.
7.5 Source of Payments. Any payment specified in this Agreement to be made
by Key may be made, at the election of Key, directly by Key or through any
Subsidiary of Key. All payments under this Agreement shall be made solely
from the general assets of Key or one of its Subsidiaries (or from a
grantor trust, if any, established by Key for purposes of making payments
under this Agreement and other similar agreements), and the Executive
shall have the rights of an unsecured general creditor of Key with respect
thereto.
7.6 Claims Review Procedure. Whenever Key decides for whatever reason to
deny, whether in whole or in part, a claim for benefits under this
Agreement by the Executive, Key shall transmit a written notice of its
decision to the Executive, which notice shall be written in a manner
calculated to be understood by the Executive and shall contain a statement
of the specific reasons for the denial of the claim and a statement
advising the Executive that, within 60 days of the date on which the
Executive receives such notice, the Executive may obtain review of the
decision of Key in accordance with the procedures hereinafter set forth.
Within such 60-day period, the Executive or the Executive's authorized
representative may request that the claim denial be reviewed by filing
with Key a written request therefore, which request shall contain the
following information:
(a) the date on which the request was filed with Key,
(b) the specific portions of the denial of the Executive's claim
that the Executive requests Key to review, and
(c) any written material that the Executive desires Key to examine.
Within 30 days of the date specified in clause (a) of this Section 7.6,
Key shall conduct a full and fair review of its decision to deny the
Executive's claim for benefits and deliver to the Executive its written
decision on review, written in a manner calculated to be understood by the
Executive, specifying the reasons and the Agreement provisions upon which
its decision is based. Nothing in this Section 7.6 shall be construed as
limiting or restricting the Executive's right to institute legal
proceedings in a court of competent jurisdiction to enforce this Agreement
after complying with the procedures set forth in this Section 7.6 or as
limiting or restricting the scope of the court's review (which review
shall be de novo); provided, further, that the failure of the Executive to
comply with the procedures set forth in this Section 7.6 shall not bar or
prohibit the subsequent compliance by the Executive with those procedures
and thereafter the Executive shall have the right to institute legal
proceedings to enforce this Agreement.
7.7 Validity. The invalidity or unenforceability of any provision of this
Agreement shall not affect the validity or enforceability of any other
provision of this Agreement which shall remain in full force and effect.
7.8 Modification, Waiver, Etc. No provision of this Agreement may be
modified, waived, or discharged unless such waiver, modification, or
discharge is agreed to in a writing signed by the Executive and Key. No
waiver by either party hereto at any time of any breach by the other party
of, or compliance with, any condition or provision of this Agreement to be
performed by such other party shall be deemed a waiver of similar or
dissimilar provisions or conditions at the same time or at any prior or
subsequent time. No agreement or
representation, oral or otherwise, express or implied, with respect to the
subject matter hereof has been made by either party that is not set forth
expressly in this Agreement. This Agreement shall inure to the benefit of
and be enforceable by the Executive's personal representatives, executors,
administrators, successors, heirs, and designees. This Agreement shall be
governed by and construed in accordance with the laws of the State of
Ohio.
7.9 Savings Clause. If any payments otherwise payable to the Executive
under this Agreement are prohibited or limited by any statute or
regulation in effect at the time the payments would otherwise be payable,
including, without limitation, any regulation issued by the Federal
Deposit Insurance Corporation (the "FDIC") that limits executive change of
control payments that can be made by an FDIC insured institution or its
holding company if the institution is financially troubled (any such
limiting statute or regulation a "Limiting Rule"):
(a) Key will use its best efforts to obtain the consent of the
appropriate governmental agency (whether the FDIC or any other
agency) to the payment by Key to the Executive of the maximum amount
that is permitted (up to the amounts that would be due to the
Executive absent the Limiting Rule); and
(b) the Executive will be entitled to elect to have apply, and
therefore to receive benefits directly under, either (i) this
Agreement (as limited by the Limiting Rule) or (ii) any generally
applicable Key severance, separation pay, and/or salary continuation
plan that may be in effect at the time of the Executive's
termination.
Following any such election, the Executive will be entitled to receive
benefits under the agreement or plan elected only if and to the extent the
agreement or plan is applicable and subject to its specific terms.
8. Definitions.
8.1 Accounting Firm. The term "Accounting Firm" means the independent
auditors of Key for the fiscal year preceding the year in which the Change
of Control occurred and such firm's successor or successors; provided,
however, if such firm is unable or unwilling to serve and perform in the
capacity contemplated by this Agreement, Key shall select another national
accounting firm of recognized standing to serve and perform in that
capacity under this Agreement, except that such other accounting firm
shall not be the then independent auditors for Key or any of its
affiliates (as defined in Rule 12b-2 promulgated under the Securities
Exchange Act of 1934, as amended (the "1934 Act")).
8.2 Average Annual Incentive Compensation. The term "Average Annual
Incentive Compensation" means the sum of Average Short Term Incentive
Compensation, as defined in Section 8.4 below, and Average Long Term
Incentive Compensation, as defined in Section 8.3 below. For purposes of
this Agreement:
(a) except as provided in (c) below, incentive compensation means
any cash based incentive compensation, including bonuses and is
calculated before any reduction on account of deferrals;
(b) notwithstanding the fact that they are made in restricted stock
and/or performance shares rather than in cash, any LTIC Stock Grant
shall be deemed to be long term incentive compensation;
(c) special hiring bonuses paid or awarded to a newly hired
executive in connection with that hiring or extraordinary bonuses to
an incumbent executive, outside and beyond Key's regular incentive
compensation program, such as special retention awards to induce an
executive to stay with Key, shall not be treated as incentive
compensation;
(d) short term incentive compensation means incentive compensation
for periods of time of one year or less;
(e) targeted short term incentive compensation means:
(i) if the short term incentive compensation plan, program, or
arrangement in question designates a targeted amount or a
targeted level of achievement for the Executive or the
Executive's job grade, it means that targeted amount or level;
(ii) if the short term incentive compensation plan, program,
or arrangement in question has only one level of payout for
the Executive or the Executive's job grade (other than zero),
it means that level (i.e.: the level other than zero);
(iii) if the short term incentive compensation plan, program,
or arrangement in question does not designate a targeted
amount or level of achievement for the Executive or the
Executive's job grade but does have multiple anticipated
levels of possible payout or achievement for the Executive or
the Executive's job grade, it means (in each case excluding
from consideration any level that results in zero payout) the
middle level of payout or achievement for the Executive or the
Executive's job grade (or if there are an even number of
levels, the average of the two levels if there are only two
levels or the average of the middle two levels if there are
four or more levels); and
(iv) in all other cases, the amount anticipated or projected
to be paid under the plan, program, or arrangement in question
at the time the performance period in question commenced.
For purposes of calculating Average Annual Incentive Compensation under
this Section 8.2, in determining the amount of incentive compensation
(short or long term) payable to or targeted for the Executive for any past
or current incentive compensation period or cycle, if the incentive
compensation was for a partial period or cycle (such as where an executive
becomes a participant in an incentive plan after the incentive
compensation period or cycle has commenced so that the award payable to or
targeted for the executive is prorated), such incentive compensation
payable to or targeted for the Executive shall be determined as if the
Executive had participated throughout the complete incentive compensation
period or cycle in question. For example, if, with respect to a 12-month
plan that would have paid the Executive short term incentive compensation
of $12X if the Executive had been a participant for the full plan year,
the Executive became a participant when only seven months were left in the
plan year and the Executive was therefore paid incentive compensation of
only $7X, the Executive would be treated for purposes of this Section 8.2
as if the Executive had been a participant for the full plan year and had
been paid incentive compensation of $12X under the plan.
8.3 Average Long Term Incentive Compensation. The term "Average Long Term
Incentive Compensation" means:
(a) if the Change Year is 2004, the higher of:
(i) the dollar value of the 2003 LTIC Stock Grant; and
(ii) the dollar value of the 2004 LTIC Stock Grant; and
(b) if the Change Year is 2005 or any later year, the higher of:
(i) the average of the dollar value of the LTIC Stock Grants
made to the Executive in each of the two years immediately
preceding the Change Year (e.g., the average of the 2004 LTIC
Stock Grant and the 2005 LTIC Stock Grant if the Change Year
is 2006), or, if for any reason an LTIC Stock Grant was made
to Executive in only one of those two immediately preceding
years, the dollar value of the LTIC Stock Grant for that
single year, and
(ii) the dollar value of the LTIC Stock Grant for the Change
Year;
except that, if the Executive first became employed by Key or a Subsidiary
during the Change Year or during the year immediately preceding the Change
Year and pursuant to an offer letter or agreement the terms of which
were approved by the Committee, "Average Long Term Incentive Compensation"
shall be not less than the dollar value of the LTIC Stock Grant target
specified in that offer letter or agreement.
For purposes of this Section 8.3 the dollar value of any LTIC Stock Grant
means the aggregate Fair Market Value of the Common Shares subject to that
grant (whether those Common Shares are restricted Common Shares or
Performance Shares) as of the date the grant is made, taking into account
all and only all of the target level of those Common Shares that are
subject to the particular LTIC Stock Grant, without regard to changes in
Key's stock price after the date of grant or to any restrictions on or
contingencies concerning those Common Shares.
8.4 Average Short Term Incentive Compensation. The term "Average Short
Term Incentive Compensation" means the higher of:
(a) the average of the short term incentive compensation payable to
the Executive for each of the last two years immediately preceding
the Change Year or, if, for any reason, short term incentive
compensation was payable to the Executive for only one of those two
years, the amount of short term incentive compensation payable to
the Executive for that year, and
(b) the Executive's targeted short term incentive compensation for
the Change Year or for the year immediately preceding the Change
Year, whichever is higher,
except that if the Executive first became a participant in Key's short
term incentive compensation program during the Change Year, Average Short
Term Incentive Compensation means the Executive's targeted short term
incentive compensation for the Change Year.
8.5 Base Salary. The term "Base Salary" means the salary payable to the
Executive from time to time before any reduction for voluntary
contributions to the KeyCorp 401(k) Plan or any other deferral. Base
Salary does not include imputed income from payment by Key of country club
membership fees or other noncash benefits.
8.6 Cause. The employment of the Executive by Key or any of its
Subsidiaries shall have been terminated for "Cause" if, after a Change of
Control and prior to the termination of employment, any of the following
has occurred:
(a) the Executive shall have been convicted of a felony,
(b) the Executive commits an act or series of acts of dishonesty in
the course of the Executive's employment which are materially
inimical to the best interests of Key or a Subsidiary and which
constitutes the commission of a felony, all as determined by the
vote of three fourths of all of the members of the Board of
Directors of Key (other than the Executive, if the Executive is a
Director of Key) which determination is confirmed by a panel of
three arbitrators appointed and acting in accordance with the rules
of the American Arbitration Association for the purpose of reviewing
that determination,
(c) Key or any Subsidiary has been ordered or directed by any
federal or state regulatory agency with jurisdiction to terminate or
suspend the Executive's employment and such order or directive has
not been vacated or reversed upon appeal, or
(d) after being notified in writing by the Board of Directors of Key
to cease any particular Competitive Activity, the Executive shall
intentionally continue to engage in such Competitive Activity while
the Executive remains in the employ of Key or a Subsidiary.
If (x) Key or any Subsidiary terminates the employment of the Executive
during the two year period beginning on the date of a Change of Control
and at a time when it has "Cause" therefore under clause (c), above, (y)
the order or directive is subsequently vacated or reversed on appeal and
the vacation or reversal becomes final and
no longer subject to further appeal, and (z) Key or the Subsidiary fails
to offer to reinstate the Executive to employment within ten days of the
date on which the vacation or reversal becomes final and no longer subject
to further appeal, Key or the Subsidiary will be deemed to have terminated
the Executive without Cause during the two year period beginning on the
date of the Change of Control.
8.7 Change of Control. A "Change of Control" shall be deemed to have
occurred if, at any time while this Agreement is in effect pursuant to
Section 6 hereof, there is a Change of Control under any of clauses (a),
(b), (c), or (d) below. For these purposes, Key will be deemed to have
become a subsidiary of another corporation if any other corporation (which
term shall, for all purposes of this Section 8.7, include, in addition to
a corporation, a limited liability company, partnership, trust, or other
organization) owns, directly or indirectly, 50 percent or more of the
total combined outstanding voting power of all classes of stock of Key or
any successor to Key.
(a) A Change of Control will have occurred under this clause (a) if
Key is a party to a transaction pursuant to which Key is merged with
or into, or is consolidated with, or becomes the subsidiary of
another corporation and either
(i) immediately after giving effect to that transaction, less
than 65% of the then outstanding voting securities of the
surviving or resulting corporation or (if Key becomes a
subsidiary in the transaction) of the ultimate parent of Key
represent or were issued in exchange for voting securities of
Key outstanding immediately prior to the transaction, or
(ii) immediately after giving effect to that transaction,
individuals who were directors of Key on the day before the
first public announcement of (x) the pendency of the
transaction or (y) the intention of any person or entity to
cause the transaction to occur, cease for any reason to
constitute at least 51% of the directors of the surviving or
resulting corporation or (if Key becomes a subsidiary in the
transaction) of the ultimate parent of Key.
(b) A Change of Control will have occurred under this clause (b) if
a tender or exchange offer shall be made and consummated for 35% or
more of the outstanding voting stock of Key or any person (as the
term "person" is used in Section 13(d) and Section 14(d)(2) of the
1934 Act) is or becomes the beneficial owner of 35% or more of the
outstanding voting stock of Key or there is a report filed on
Schedule 13D or Schedule 14D-1 (or any successor schedule, form or
report), each as adopted under the 1934 Act, disclosing the
acquisition of 35% or more of the outstanding voting stock of Key in
a transaction or series of transactions by any person (as defined
earlier in this clause (b));
(c) A Change of Control will have occurred under this clause (c) if
either
(i) without the prior approval, solicitation, invitation, or
recommendation of the Key Board of Directors any person or
entity makes a public announcement of a bona fide intention
(A) to engage in a transaction with Key that, if consummated,
would result in a Change Event (as defined below in this
clause (c)), or (B) to "solicit" (as defined in Rule 14a-1
under the 1934 Act) proxies in connection with a proposal that
is not approved or recommended by the Key Board of Directors,
or
(ii) any person or entity publicly announces a bona fide
intention to engage in an election contest relating to the
election of directors of Key (pursuant to Regulation 14A,
including Rule 14a-11, under the 1934 Act),
and, at any time within the 24 month period immediately following the date
of the announcement of that intention, individuals who, on the day before
that announcement, constituted the directors of Key (the "Incumbent
Directors") cease for any reason to constitute at least a majority thereof
unless both (A) the election, or the nomination for election by Key's
shareholders, of each new director was approved by a vote of at least
two-thirds of the Incumbent Directors in office at the time of the
election or nomination for election of such new director, and (B) prior to
the time that the Incumbent Directors no longer constitute a majority of
the Board of Directors, the Incumbent Directors then in office, by a vote
of at least 75% of their number, reasonably
determine in good faith that the change in Board membership that has
occurred before the date of that determination and that is anticipated to
thereafter occur within the balance of the 24 month period to cause the
Incumbent Directors to no longer be a majority of the Board of Directors
was not caused by or attributable to, in whole or in any significant part,
directly or indirectly, proximately or remotely, any event under subclause
(i) or (ii) of this clause (c).
For purposes of this clause (c), the term "Change Event" shall mean any of
the events described in the following subclauses (x), (y), or (z) of this
clause (c):
(x) A tender or exchange offer shall be made for 25% or more
of the outstanding voting stock of Key or any person (as the
term "person" is used in Section 13(d) and Section 14(d)(2) of
the 1934 Act) is or becomes the beneficial owner of 25% or
more of the outstanding voting stock of Key or there is a
report filed on Schedule 13D or Schedule 14D-1 (or any
successor schedule, form, or report), each as adopted under
the 1934 Act, disclosing the acquisition of 25% or more of the
outstanding voting stock of Key in a transaction or series of
transactions by any person (as defined earlier in this
subclause (x)).
(y) Key is a party to a transaction pursuant to which Key is
merged with or into, or is consolidated with, or becomes the
subsidiary of another corporation and, after giving effect to
such transaction, less than 50% of the then outstanding voting
securities of the surviving or resulting corporation or (if
Key becomes a subsidiary in the transaction) of the ultimate
parent of Key represent or were issued in exchange for voting
securities of Key outstanding immediately prior to such
transaction or less than 51% of the directors of the surviving
or resulting corporation or (if Key becomes a subsidiary in
the transaction) of the ultimate parent of Key were directors
of Key immediately prior to such transaction.
(z) There is a sale, lease, exchange, or other transfer (in
one transaction or a series of related transactions) of all or
substantially all the assets of Key.
(d) A Change of Control will have occurred under this clause (d) if
there is a sale, lease, exchange, or other transfer (in one
transaction or a series of related transactions) of all or
substantially all of the assets of Key.
8.8 Change Year. The term "Change Year" means the year in which a Change
of Control occurred or, if more than one Change of Control has occurred,
the year in which the earliest Change of Control occurred.
8.9 Common Shares. The term "Common Shares" means common shares of Key.
8.10 Committee. The term "Committee" means the Compensation Committee of
the Board of Directors of Key or any successor to that committee.
8.11 Competitive Activity. The Executive shall be deemed to have engaged
in "Competitive Activity" if the Executive:
(a) engages in any business or business activity in which Key or any
of its Subsidiaries engages, including, without limitation, engaging
in any business activity in the banking or financial services
industry (other than as a director, officer, or employee of Key or
any of its Subsidiaries), or
(b) serves as a director, officer, or employee of any bank, bank
holding company, savings and loan association, building and loan
association, savings and loan holding company, insurance company,
investment banking or securities company, mutual fund company, or
other financial services company other than Key or any of its
Subsidiaries (each of the foregoing being hereinafter referred to as
a "Financial Services Company"), or renders services of a
consultative or advisory nature or otherwise to any such Financial
Services Company; provided, however, this clause (b) shall not
prohibit or restrict the Executive from serving in any such capacity
with the consent of Key.
8.12 Disability. For purposes of this Agreement, the Executive's
employment will have been terminated by Key or its Subsidiary by reason of
"Disability" of the Executive only if (a) as a result of bodily injury or
sickness, the Executive has been unable to perform the Executive's normal
duties for Key or its Subsidiary for a period of 180 consecutive days, and
(b) the Executive begins to receive payments under the KeyCorp Long Term
Disability Benefit Plan not later than 30 days after the Termination Date.
8.13 Discontinued Plan. The term "Discontinued Plan" means any Retirement
Plan and/or Savings Plan that:
(a) the Executive was covered by and participating in immediately
before the occurrence of a Change of Control, and
(b) was, between the date of the Change of Control and the
Termination Date, either terminated or altered in such a way as to
substantially reduce the benefits provided to the Executive
thereunder without having been substituted for by a similar plan
providing substantially similar benefits to the Executive.
8.14 Fair Market Value. The term "Fair Market Value" with respect to
Common Shares means:
(a) if the Common Shares are traded on a national exchange, the mean
between the high and low sales price per Common Share on the
national exchange on the date for which the determination of fair
market value is made or, if there are no sales of Common Shares on
that date, then on the next preceding date on which there were any
sales of Common Shares, or
(b) if the Common Shares are not traded on a national exchange, the
mean between the high and low sales price per Common Share in the
over-the-counter market, National Market System, as report by the
National Quotations Bureau, Inc. and NASDAQ on the date for which
the determination of fair market value is made or, if there are no
sales of Common Shares on that date, then on the next preceding date
on which there were any sales of Common Shares.
8.15 Good Reason. The Executive shall be deemed to have "Good Reason" to
terminate the Executive's employment under this Agreement during a Window
Period if, at any time after the occurrence of a Change of Control and
before the end of the Window Period, either or both of the events listed
in clauses (a) and (b) of this Section 8.15 occurs without the written
consent of the Executive:
(a) following notice by the Executive to Key and an opportunity by
Key to cure, the Executive determines in good faith that the
Executive's position, responsibilities, duties, or status with Key
are at any time materially less than or reduced from those in effect
before the Change of Control or that the Executive's reporting
relationships with superior executive officers have been materially
changed from those in effect before the Change of Control; or
(b) Key's headquarters is relocated outside of the greater Cleveland
metropolitan area (but this clause (b) shall apply only if Key's
headquarters was the Executive's principal place of employment
before the Change of Control).
For purposes of clause (a), Key will be deemed to have had an opportunity
to cure and to have failed to effect a cure if the circumstance otherwise
constituting Good Reason persists (as determined in good faith by the
Executive, whose determination shall be conclusive) for more than seven
calendar days after the Executive has given notice to Key of the existence
of that circumstance.
8.16 Impermissible. The term "Impermissible," when used in the context of
the Executive's continued coverage by and participation in any of the
Retirement Plans or Savings Plans shall mean that such a continuation
would violate the provisions of any such plan, would cause any such plan
that is or is intended to
be qualified under Section 401(a) of the Internal Revenue Code to fail to
be so qualified, would require shareholder approval, or would be unlawful.
8.17 LTIC Stock Grant. The term "LTIC Stock Grant" means the grant, if
any, of restricted stock, of Performance Shares, or of a combination of
restricted stock and Performance Shares made by the Committee to the
Executive during any particular year as part of Key's ongoing compensation
program. For greater clarity, for purposes of this Agreement:
(a) "The terms "2003 LTIC Stock Grant", "2004 LTIC Stock Grant,"
"2005 LTIC Stock Grant," etc. refer to LTIC Stock Grants, if any,
made to the Executive by resolution adopted by the Committee in the
specified year.
(b) An extraordinary grant or award of restricted stock, of
Performance Shares, or of a combination of restricted stock and
Performance Shares made to a newly hired executive in connection
with that hiring (i.e., any signing or hiring bonus) and a grant or
award made to an incumbent executive outside of Key's regular
restricted stock and Performance Share program (e.g., a special
retention grant or award) shall be treated as not being an LTIC
Stock Grant and shall not be taken into account when calculating
Average Long Term Incentive Compensation.
8.18 Mandatory Relocation. A "Mandatory Relocation" shall have occurred
if, at any time after a Change of Control, the Executive is required to
relocate the Executive's principal place of employment for Key or its
Subsidiary without the Executive's written consent more than 35 miles from
where the Executive was located prior to the Change of Control.
8.19 Performance Shares. The term "Performance Shares" means an award
denominated in Common Shares or phantom Common Shares the vesting of which
is contingent or accelerated upon attainment of one or more performance
goals (absent death, disability, or a Change of Control) .
8.20 Reduction of Compensation. A "Reduction of Compensation" shall have
occurred if any one or more of the following occurs:
(a) the Base Salary of the Executive is reduced at any time after a
Change of Control;
(b) following notice by the Executive to Key and an opportunity by
Key to cure, Key fails to satisfy the Short Term Incentive
Compensation Guaranty;
(c) following notice by the Executive to Key and an opportunity by
Key to cure, Key fails to satisfy the Long Term Incentive
Compensation Guaranty; or
(d) following notice by the Executive to Key and an opportunity by
Key to cure, Key fails to satisfy the Option/SAR Guaranty.
For purposes of clauses (b), (c) and (d), Key will be deemed to have had
an opportunity to cure and to have failed to effect a cure if the failure
to satisfy the Short Term Incentive Compensation Guaranty, the Long Term
Incentive Compensation Guaranty, and/or the Option/SAR Guaranty, as the
case may be, persists (as determined in good faith by the Executive) for
more than seven calendar days after the Executive has given notice to Key
of the existence of that failure.
8.21 Relevant Plans. The term "Relevant Plans" means:
(a) all Retirement Plans and Savings Plans that the Executive was
covered by and participating in immediately before the Termination
Date, and
(b) all Discontinued Plans.
Reference to a "Relevant Plan," in the singular, means any of the Relevant
Plans.
8.22 Retirement Plans. The term "Retirement Plans" means the KeyCorp Cash
Balance Pension Plan and the Supplemental Retirement Plan, each as from
time to time amended, restated, or otherwise modified, and any plan that,
after the date of this Agreement, succeeds, replaces, or is substituted
for any such plan, and all retirement plans of any nature maintained by
Key or any of its Subsidiaries in which the Executive was participating
prior to the Termination Date. Reference to a "Retirement Plan," in the
singular, means any of the Retirement Plans.
8.23 Savings Plans. The term "Savings Plans" means and includes the
KeyCorp 401(k) Savings Plan and the KeyCorp Excess 401(k) Savings Plan, in
both cases, as from time to time amended, restated, or otherwise modified,
including any plan that, after the date of this Agreement, succeeds,
replaces, or is substituted for either such plan, and all salary
reduction, savings, profit-sharing, or stock bonus plans (including,
without limitation, all plans involving employer matching contributions,
whether or not constituting a qualified cash or deferred arrangement under
Section 401(k) of the Internal Revenue Code), maintained by Key or any of
its Subsidiaries in which the Executive was participating prior to the
Termination Date. Reference to a "Savings Plan," in the singular, shall
mean any of the Savings Plans.
8.24 Supplemental Retirement Plan. The term "Supplemental Retirement Plan"
means the KeyCorp Supplemental Retirement Plan, the KeyCorp Excess Cash
Balance Pension Plan, the KeyCorp Supplemental Retirement Plan for Key
Executives, the KeyCorp Supplemental Retirement Benefit Plan, and the
KeyCorp Executive Supplemental Pension Plan, each as from time to time
amended, restated, or otherwise modified, and any plan that, after the
date of this Agreement, succeeds, replaces, or is substituted for any of
such plans.
8.25 Subsidiary. A "Subsidiary" means any corporation, bank, partnership,
or other entity a majority of the voting control of which is directly or
indirectly owned or controlled at the time in question by Key.
8.26 Termination Date. The term "Termination Date" means the date on which
the Executive's employment with Key and its Subsidiaries terminates.
8.27 Window Period. The term "Window Period," with respect to any
particular Change of Control, means the three-month period beginning on
the date that falls on the same day of the month as the date of the Change
of Control in the fifteenth month after the month in which the Change of
Control occurs. If at any time there has been more than one Change of
Control, there shall be a separate Window Period with respect to each such
Change of Control.
8.28 Agreement Supersedes Similar Agreement Previously Entered Into. This
Agreement supersedes a similar agreement originally entered into between
Key and the Executive as of [ORIGINAL DATE OF PREVIOUS AGREEMENT], and
that agreement (as amended, if it has been heretofore amended) is no
longer of any force or effect.
IN WITNESS WHEREOF, the parties have executed this Agreement as of
the date first written above.
KEYCORP
By_____________________________________
Henry L. Meyer III
Chairman and Chief Executive Officer
THE "EXECUTIVE"
_______________________________________
XXXXXXXXX
EXHIBIT A
WAIVER AND RELEASE
DO NOT SIGN WITHOUT READING AND UNDERSTANDING
In consideration of the payments to be made to me following termination of
my employment with KeyCorp pursuant to the agreement between KeyCorp and me
dated as of XXXXX, 2004 (the "Change of Control Agreement"), which payments I
acknowledge I am not entitled to receive without execution of this Waiver and
Release, and which payments will not commence earlier than eight days after the
execution of this Waiver and Release, I, for myself, my heirs, administrators,
executors, and assigns, release and discharge KeyCorp, its affiliates,
subsidiaries, divisions, successors, and assigns and the employees, officers,
directors, and agents thereof (collectively referred to throughout this Waiver
and Release as "Key") from any and all causes of action, charges of
discrimination, proceedings, or claims of every kind, nature, and character,
arising out of or relating to my employment with Key and the termination of my
employment with Key based upon or related to any contention (i) that my
employment terminated because of any tortuous, wrongful, unlawful, or improper
conduct or act or in violation or breach of any express or implied contract or
agreement, or (ii) that Key engaged in any discriminatory act, event, pattern,
or practice involving age, religion, creed, sex, national origin, ancestry,
handicap, disability, veteran status, marital status, race, or color, or the
continuing or future effects thereof (including, without limitation, the federal
Age Discrimination in Employment Act, 29 U.S.C. Section 621 et seq., or any
similar state law).
I warrant that no promise or inducement has been offered to me other than
as set forth in the Change of Control Agreement, that I am relying on no other
statement or representation by Key, and that I have not assigned any of my
rights. I have read this Waiver and Release; I have had a full opportunity to
consider it (including the opportunity to consult with an attorney of my
choice); and I understand that by signing it I am giving up important rights,
including any right to sue under federal, state, or local law. I also verify
that my entering into this Waiver and Release is wholly voluntary.
I further warrant that:
(a) I understand that I am specifically waiving rights or claims under the
federal Age Discrimination in Employment Act, 29 U.S.C. Section 621 et
seq.;
(b) I understand that I am not hereby waiving any rights or claims that
may arise after this Waiver and Release is executed by me;
(c) I understand that this Waiver and Release is being given by me in
exchange for consideration that is more valuable to me than what I am
entitled to without the Change of Control Agreement and the execution of
this Waiver and Release;
(d) I have been advised in writing by Key that I should have, at my
expense, an attorney of my choice review this Waiver and Release;
(e) I have been advised by Key that I may take up to _____ days from
receipt of this Waiver and Release to determine whether to execute the
same; and
(f) I have been advised by Key that this Waiver and Release may be revoked
by me within seven (7) days following execution of this Waiver and Release
whereupon this Waiver and Release shall be null and void.
IN WITNESS WHEREOF, I have hereby set my hand this _________ day of
_______________, ____.
Witness:
________________________________ ________________________________
EXHIBIT A
(CONT'D)
ACKNOWLEDGMENT OF RECEIPT OF WAIVER AND RELEASE
I do hereby acknowledge that on _____________________, ____, I received a
copy of the Waiver and Release which is attached hereto, and I understand that I
have _____* days from the date of receipt of the Waiver and Release to determine
whether to execute it.
Witness:____________________________ _____________________________
*to be completed the same as clause (e) of the Waiver and Release.
EXHIBIT A
(CONT'D)
Director of Human Resources
KeyCorp
127 Public Square
Cleveland, Ohio 44114
Re: Waiver and Release
Dear Sir or Madam:
On ________ __, ____, I executed a Waiver and Release in favor of
KeyCorp. More than seven (7) days have elapsed since I executed the Waiver and
Release. I have at no time revoked my acceptance or execution of the Waiver and
Release and, accordingly, I hereby request that KeyCorp commence making the
payments due to me under my Change of Control Agreement.
Very truly yours,
Witness:
_______________________ _________________________