EXHIBIT 10.65
KEYCORP
SECOND EXECUTIVE SUPPLEMENTAL PENSION PLAN
ARTICLE I
THE PLAN
The KeyCorp Second Executive Supplemental Pension Plan (the "Plan"), is
hereby established December 28, 2004 to be effective January 1, 2005. The Plan,
as structured, is designed to provide an additional retirement benefit for
certain select employees of KeyCorp that is in addition to the December 31, 2004
vested frozen nonqualified benefit to be provided to such employees under the
KeyCorp Executive Supplemental Pension Plan. It is the intention of KeyCorp and
it is the understanding of the employee covered under the Plan, that the Plan
constitutes a nonqualified retirement plan for a select group of employees, and
as such, the Plan is unfunded for tax purposes and for purposes of Title I of
the Employee Retirement Income Security Act of 1974, as amended ("ERISA").
ARTICLE II
DEFINITIONS
2.1 Meanings of Definitions. As used herein, the following words and phrases
shall have the meanings hereinafter set forth, unless a different meaning is
plainly required by the context:
(a) "AVERAGE INTEREST CREDIT" shall mean the average of the Interest
Credits (as defined in the Pension Plan) for the three (3) consecutive calendar
years ending with the year of the Participant's termination.
(b) "AVERAGE TREASURY RATE" shall mean the average of the Treasury
Rates (as defined in the Pension Plan) for the three (3) consecutive calendar
years ending with the year of the Participant's termination.
(c) "EQUITY/COMPENSATION AWARD" shall mean one-half (50%) of the value
of an award granted under the KeyCorp 2004 Equity Compensation Plan for any Plan
year. The term "Equity/Compensation Award" may include "Stock Appreciation
Rights", "Restricted Stock", "Restricted Stock Units", "Performance Shares",
and/or "Performance Units", but shall specifically not include "Options" as
those terms have been defined in accordance with the provisions of the KeyCorp
2004 Equity Compensation Plan."
(d) "BENEFICIARY" shall mean the Participant's surviving spouse who is
entitled to receive the benefits hereunder in the event the Participant dies
before his or her Supplemental Pension Benefit shall have been distributed to
him or her.
(e) "CREDITED SERVICE" shall be calculated with respect to a
Participant by measuring the period of service commencing on the Participant's
Employment Commencement Date and Re-Employment Commencement Date, if applicable,
and ending on the Participant's Severance from Service Date, and shall be
computed based on each full month during which time the Employee is employed by
an Employer.
(f) "COMPENSATION" for any Plan Year or any partial Plan Year in which
the Participant incurs a Severance From Service Date shall mean the entire
amount of base compensation paid to such Participant during such period by
reason of his employment as an Employee, as reported for federal income tax
purposes, or such base compensation which would have been paid except for (1)
the timing of an Employer's payroll processing operations, (2) the Participant's
election to participate in the KeyCorp 401(k) Savings Plan, the KeyCorp Excess
401(k) Savings Plan, a transportation reimbursement plan, and/or the KeyCorp
Flexible Benefits Plan, and/or (3) the Participant's election to defer such base
compensation under the KeyCorp Deferred Compensation Plan for the applicable
Plan Year, provided, however, that the term Compensation shall specifically
exclude:
(i) any amount attributable to the Participant's exercise of stock
appreciation rights and the amount of any gain to the
Participant upon the exercise of stock options;
(ii) any amount attributable to the Participant's receipt of
non-cash remuneration whether or not it is included in the
Participant's income for federal income tax purposes;
(iii) any amount attributable to the Participant's receipt of
moving expenses and any relocation bonus paid to the
Participant during the Plan Year;
(iv) any amount attributable to a lump sum severance payment paid
by an Employer or the Corporation to the Participant;
(v) any amount attributable to fringe benefits (cash and
non-cash);
(vi) any amount attributable to any bonus or payment made as an
inducement for the Participant to accept employment with an
Employer;
(vii) any amount paid to the Participant during the Plan Year which
is attributable to interest earned on compensation which had
been deferred under a plan of an Employer or the Corporation;
and
(viii) any amount paid for any period after the Participant's
termination or retirement date.
In the case of a Disabled Participant, such Participant's Compensation for
each year while Disabled shall equal an amount which shall reflect the
Participant's Compensation for the calendar year preceding the date of the
Participant's Disability.
(g) "CORPORATION" shall mean KeyCorp, an Ohio Corporation, its corporate
successors, and any corporation or corporations into or with which it may be
merged or consolidated.
(h) "DISABILITY" shall mean (1) the physical or mental disability of a
permanent nature which prevents a Participant from performing the duties such
Participant was employed to perform for his or her Employer when such disability
commenced, (2) qualifies for disability benefits under the federal Social
Security Act within 30 months following the Participant's disability, and (3)
qualifies the Participant for disability coverage under the KeyCorp Long Term
Disability Plan. In addition to the foregoing, the disability requirements
addressed in Section 409A of the Code are incorporated into the provisions of
this definition.
(i) "EARLY RETIREMENT DATE" shall mean the date of Participant's
retirement from his or her employment with Employer on or after the
Participant's attainment of age 55 and completion of a minimum of ten years of
Credited Service, but prior to the Participant's Normal Retirement Date.
(j) "EMPLOYEE" shall mean the employees listed on Exhibit A attached
hereto.
(k) "EMPLOYER" shall mean the Corporation and its subsidiaries unless
specifically excluded as an Employer for Plan purposes by written action by an
officer of the Corporation and approved by the Corporation. An Employer's
participation in the Plan shall be subject to any conditions or requirements
made by the Corporation, and each Employer shall be deemed to appoint the
Corporation as its exclusive agent under the Plan as long as it continues as a
subsidiary of the Corporation.
(l) "EXCESS PENSION PROGRAM BENEFIT" shall mean the Participant's
collective nonqualified pension benefit accrued under the KeyCorp Excess Cash
Balance Pension Plan and the KeyCorp Second Excess Cash Balance Pension Plan
subject to the terms and conditions of each respective Plan.
(m) "EXECUTIVE SUPPLEMENTAL PENSION PROGRAM BENEFIT" shall mean the
Participant's collective nonqualified pension benefit accrued under the KeyCorp
Executive Supplemental Pension Plan and the KeyCorp Second Executive
Supplemental Pension Plan subject to the terms and conditions of each respective
Plan.
(n) "FINAL AVERAGE COMPENSATION" shall mean with respect to any
Participant the annual average of his or her highest aggregate Compensation for
any period of five consecutive years within the period of ten consecutive years
immediately prior to his or her retirement, death, or other termination of
employment, or any termination of the Plan, whichever first occurs. If the
Participant receives no Compensation for any portion of such five years because
of an absence from work, there shall be treated as Compensation received during
such period of
absence an amount equal to the Compensation the Participant would have received
had he or she not been absent, such amount to be determined by the Corporation
on the basis of such Participant's Compensation in effect immediately prior to
such absence. In computing a Participant's Final Average Compensation, there
shall be included the Participant's highest five Incentive Compensation Awards
granted under an Incentive Compensation Plan during the ten year period
immediately preceding the earliest of his or her retirement, death, disability,
or other termination of employment.
(o) "EMPLOYMENT COMMENCEMENT DATE" of a Participant shall mean the date
on which he or she first performs an Hour of Service for an Employer.
(p) "HOUR OF SERVICE" shall mean any hour for which an Employee is paid
or entitled to payment by an Employer for the performance of duties.
(q) "INCENTIVE COMPENSATION AWARD" for any Plan year shall collectively
mean the short term incentive compensation award (whether in cash or common
shares of the Corporation, and whether paid or deferred, or a combination of
both) and the long term incentive compensation award (whether in cash or common
shares of the Corporation, and whether paid or deferred, or a combination of
both) (if any) granted to a Participant under an Incentive Compensation Plan, as
follows:
- An incentive compensation award granted under the KeyCorp
Annual Incentive Plan, the KeyCorp Short Term Incentive
Compensation Plan, the KeyCorp Management Incentive
Compensation Plan, and/or such other Employer-sponsored line
of business Incentive Compensation Plan which shall constitute
an Incentive Compensation Award for the year in which the
award is earned (without regard to the actual time of
payment).
- An incentive compensation award granted under the KeyCorp Long
Term Incentive Compensation Plan ("LTIC Plan") with respect to
any multi-year performance period which shall be deemed to be
for the last year of the multi-year period without regard to
the actual time of payment of the award. Accordingly, an
incentive compensation award granted under the LTIC Plan with
respect to the three-year performance period of 1993, 1994,
and 1995 will be deemed to be for 1995 (without regard to the
actual time of payment), and the entire incentive compensation
award under the LTIC Plan for that performance period will be
an Incentive Compensation Award for the year 1995.
- An incentive compensation award granted under the KeyCorp Long
Term Incentive Plan ("Long Term Plan") with respect to any
multi-year period which shall be deemed to be for the last
year of the multi-year performance period and for the year
immediately following such year (without regard to the actual
time of payment). Accordingly, an award granted under the Long
Term Plan with respect to the four-year performance period of
1998, 1999, 2000, and 2001 shall be deemed to be for the years
2001 and 2002, with one-half the award allocated to the year
2001, and one-half the award allocated to the year 2002.
- An incentive compensation award granted in the form of
restricted stock under the KeyCorp Amended and Restated 1991
Equity Compensation Plan with respect to any multi-year period
(but specifically excluding those awards applicable to the
2002-2003 multi-year period), which shall be deemed to be for
the year in which the award (grant) is made to the
Participant; provided, however, that only those shares of
restricted stock that have vested as of the Participant's
termination date shall be utilized for purposes of determining
the Participant's Incentive Compensation Award. The fair
market value of such shares as of the date of the restricted
stock grant multiplied by the number of vested shares as of
the Participant's termination date shall determine the value
of such Incentive Compensation Award for purposes of
calculating the Participant's Supplemental Pension Benefit
under the provisions of Article III of the Plan.
Notwithstanding the foregoing, however, in calculating the
Participant's Supplemental Pension Benefit under the
provisions of Article III of the Plan, if it is determined
that an incentive compensation award granted under the KeyCorp
Amended and Restated 1991 Equity Compensation Plan would
produce a larger monthly Supplemental Pension Benefit for the
Participant if the award was included in the year in which the
award (or any part of the award) initially vested rather than
in the year in which the award was granted, then
such incentive compensation award shall be included in the
year in which the award (or any part of the award) initially
vested rather than for the year in which the award was
granted.
If at the time of the Participant's termination date, the
Participant maintains shares of not forfeited restricted stock
and such restricted stock later vests in conjunction with the
passage of time or with the Corporation's attainment of
certain performance criteria, or otherwise, then as of such
subsequent vesting date the Participant's monthly Supplemental
Pension Benefit shall be recalculated to include such newly
vested shares. Such newly vested shares shall relate to the
award in which such shares were granted under the KeyCorp
Amended and Restated 1991 Equity Compensation Plan, and shall
be included as a part of that award (based on either the date
granted or the date initially vested, whichever date was
actually used by the Plan in calculating the Participant's
initial monthly Supplemental Pension Benefit).
For those limited Participants who, for Plan purposes and in
accordance with the provisions of this Section 2.1(q) hereof,
received Incentive Compensation Award(s) granted in the form
of time-lapsed restricted stock award(s) and/or performance
shares under the KeyCorp Amended and Restated 1991 Equity
Compensation Plan with respect to any multi-year period, the
term Incentive Compensation Award shall also include those
Equity/Compensation Award(s) granted to the Participant under
the 2004 Equity Compensation Plan. An Equity/Compensation
Award shall be deemed to be for the year in which the
Equity/Compensation Award vests. If the Equity/Compensation
Award is in the form of Restricted Stock, Restricted Stock
Units, Performance Units or Performance Shares, the fair
market value of such shares as of the date of the
Equity/Compensation Award grant multiplied by the number of
vested shares as of the Participant's termination date shall
determine the value of such Incentive Compensation Award for
purposes of calculating the Participant's Supplemental Pension
Benefit under the provisions of Article III of the Plan.
Notwithstanding the foregoing provisions of this Section 2.1(q)
hereof, in calculating a Participant's Incentive Compensation Award for any 12
month period, there shall be included only one award granted under the KeyCorp
Amended and Restated 1991 Equity Compensation Plan, or Equity/Compensation Award
under the KeyCorp 2004 Equity Compensation Plan included for purposes of
determining the Participant's Incentive Compensation Award for such 12 month
period.
(r) "INCENTIVE COMPENSATION PLAN" shall mean the KeyCorp Management
Incentive Compensation Plan, the KeyCorp Annual Incentive Plan, the KeyCorp
Short Term Incentive Compensation Plan, the KeyCorp Long Term Incentive
Compensation Plan, the KeyCorp Long Term Incentive Plan, the KeyCorp Amended and
Restated 1991 Equity Compensation Plan, the KeyCorp 2004 Equity Compensation
Plan, and/or such other Employer or KeyCorp-sponsored incentive compensation
plan that KeyCorp in its sole discretion determines constitutes an "Incentive
Compensation Plan" for purposes of this Section 2.1(r), as may be amended from
time to time."
(s) "HARMFUL ACTIVITY" shall have occurred if the Participant shall do
any one or more of the following:
(i) Use, publish, sell, trade or otherwise disclose Non-Public
Information of KeyCorp unless such prohibited activity was
inadvertent, done in good faith and did not cause significant
harm to KeyCorp.
(ii) After notice from KeyCorp, fail to return to KeyCorp any
document, data, or thing in his or her possession or to which
the Participant has access that may involve Non-Public
Information of KeyCorp.
(iii) After notice from KeyCorp, fail to assign to KeyCorp all
right, title, and interest in and to any confidential or
non-confidential Intellectual Property which the Participant
created, in whole or in part, during employment with KeyCorp,
including, without limitation, copyrights, trademarks, service
marks, and patents in or to (or associated with) such
Intellectual Property.
(iv) After notice from KeyCorp, fail to agree to do any acts and
sign any document reasonably requested by KeyCorp to assign
and convey all right, title, and interest in and to any
confidential or non-confidential Intellectual Property which
the Participant created, in whole or in part, during
employment with KeyCorp, including, without limitation, the
signing of patent applications and assignments thereof.
(v) Upon the Participant's own behalf or upon behalf of any other
person or entity that competes or plans to compete with
KeyCorp, solicit or entice for employment or hire any KeyCorp
employee.
(vi) Upon the Participant's own behalf or upon behalf of any other
person or entity that competes or plans to compete with
KeyCorp, call upon, solicit, or do business with (other than
business which does not compete with any business conducted by
KeyCorp) any KeyCorp customer the Participant called upon,
solicited, interacted with, or became acquainted with, or
learned of through access to information (whether or not such
information is or was non-public) while the Participant was
employed at KeyCorp unless such prohibited activity was
inadvertent, done in good faith, and did not involve a
customer whom the Participant should have reasonably known was
a customer of KeyCorp.
(vii) Upon the Participant's own behalf or upon behalf of any other
person or entity that competes or plans to compete with
KeyCorp, after notice from KeyCorp, continue to engage in any
business activity in competition with KeyCorp in the same or a
closely related activity that the Participant was engaged in
for KeyCorp during the one year period prior to the
termination of the Participant's employment.
For purposes of this Section 2.1(s) the term:
"INTELLECTUAL PROPERTY" shall mean any invention, idea, product,
method of doing business, market or business plan, process, program,
software, formula, method, work of authorship, or other information,
or thing relating to KeyCorp or any of its businesses.
"NON-PUBLIC INFORMATION" shall mean, but is not limited to, trade
secrets, confidential processes, programs, software, formulas,
methods, business information or plans, financial information, and
listings of names (e.g., employees, customers, and suppliers) that
are developed, owned, utilized, or maintained by an employer such as
KeyCorp, and that of its customers or suppliers, and that are not
generally known by the public.
"KEYCORP" shall include KeyCorp, its subsidiaries, and its
affiliates.
(t) "NORMAL RETIREMENT DATE" shall mean the first day of the month
coinciding with or immediately following a Participant's 65th birthday or, if
later, the fifth anniversary of the Participant's Employment Commencement Date.
(u) "PARTICIPANT" shall mean an Employee employed by an Employer in a
position classified as a job grade 89 or above, who is selected by the
Corporation to become a Participant in the Plan, and whose participation in the
Plan has not been terminated by the Corporation. The Corporation retains the
right at all times, in its sole and absolute discretion to determine who shall
become and remain a Participant in the Plan.
(v) "PENSION PLAN" shall mean the KeyCorp Cash Balance Pension Plan
with all amendments that may be made thereto.
(w) "SEVERANCE FROM SERVICE DATE" shall occur on the earlier of the
date on which a Participant quits, retires, is discharged or dies.
(x) "SOCIAL SECURITY PRIMARY INSURANCE AMOUNT" shall mean the amount
estimated by the Corporation that is expected to be paid to a Participant under
the Federal Insurance Contributions Act. Such amount shall be calculated
assuming the Participant receives payment at age 65 or the Participant's Normal
Retirement Date, whichever is later, and that he or she receives no earnings for
the purpose of calculating this amount after the date of
the Participant's termination of employment. All compensation prior to the
Participant's date of termination of employment with an Employer shall be based
upon a salary scale, projected backwards, which is the actual change in the
average compensation from year to year, as indexed, and determined by the Social
Security Administration.
(y) "SUPPLEMENTAL PENSION BENEFIT" shall mean the pension benefit
payable pursuant to the terms of the Plan to a Participant meeting the
eligibility requirements of Section 3.1 of the Plan.
2.2 CONSTRUCTION. Unless the context otherwise indicates, the masculine
wherever used shall include the feminine and neuter, the singular shall include
the plural, words such as "herein", "hereof", "hereby", "hereunder" and words of
similar import shall refer to the Plan as a whole and not any particular part
thereof.
All other capitalized but undefined terms used herein, shall have the
meaning given to them in the Pension Plan.
ARTICLE III
SUPPLEMENTAL PENSION BENEFIT
3.1 ELIGIBILITY. Subject to the provisions of Article V hereof, a Participant
shall be eligible for a Supplemental Pension Benefit hereunder if the
Participant (i) retires on or after age 65 with five or more years of Credited
Service, (ii) terminates employment with an Employer on or after age 55 with ten
or more years of Credited Service, (iii) terminates active employment with an
Employer upon becoming Disabled after completing five or more years of Credited
Service and disability benefits have ceased under the KeyCorp Long-Term
Disability Plan due to the Participant's election for Early or Normal Retirement
under the Pension Plan, or (iv) dies after completing five years of Credited
Service, and has a Beneficiary who is eligible for a benefit under the Pension
Plan.
A Participant shall also be eligible for an Supplemental Pension Benefit
if the Participant becomes involuntarily terminated from his or her employment
with an Employer for reasons other than the Participant's Discharge for Cause,
and (i) as of the Participant's termination date the Participant has a minimum
of twenty-five (25) or more years of Credited Service, and (ii) the Participant
enters into a written non-solicitation and non-compete agreement under terms
that are satisfactory to the Employer.
For purposes of this Section 3.1, hereof, the term "Discharge for Cause"
shall mean a Participant's employment termination that is the result of the
Participant's violation of the Employer's policies, practices or procedures,
violation of city, state, or federal law, or failure to perform his or her
assigned job duties in a satisfactory manner. The Employer shall determine
whether a Participant has been Discharged for Cause.
Notwithstanding any of the forgoing provisions of this Section 3.1,
however, a Participant's eligibility for a Supplemental Pension Benefit shall be
subject to the requirements of Article V of the Plan.
3.2 SUPPLEMENTAL PENSION BENEFIT CALCULATION. The amount of any Supplemental
Pension Benefit to be paid to a Participant under the terms of the Plan on or
after the Participant's Normal Retirement Date shall be calculated as follows:
A Participant's Supplemental Pension Benefit shall equal the
difference between "(a)" and"(b)" where:
1. "(a)" is equal to 2% times the Participant's years of Credited
Service (up to a Plan maximum of 25 years) times the
Participant's Final Average Compensation, and
2. "(b)" is equal to the sum of:
(i) the Participant's accrued and vested annual supplemental
pension benefit under the KeyCorp Executive Supplemental
Pension Plan calculated as of the Participant's Normal
Retirement Date payable in the form of a single life
annuity option,
(ii) the Participant's accrued and vested annual pension
benefit under the Pension Plan calculated as of the
participant's Normal Retirement Date, payable in the
form of a single life annuity option, and
(iii) the Participant's annual estimated Social Security
Primary Insurance Amount payable at the Participant's
Normal Retirement Date.
For purposes of calculating a Participant's Supplemental Pension Benefit
under this Section 3.2 hereof, the Participant's "annual pension benefit" under
the Pension Plan shall be the Participant's Accrued Benefit as of the
Participant's termination date calculated in accordance with the provisions of
Article IV of the Pension Plan as if such benefit were to be paid in the form of
a single life annuity; if the Participant is eligible for and elects to receive
his or her Pension Plan benefit under a Predecessor Plan grandfathered formula,
such "annual pension benefit" for purposes of this Section 3.2 hereof, shall be
the benefit payable to the Participant under the terms of the Pension Plan's
Predecessor Plan grandfathered formula as of the Participant's termination date,
as if such benefit were to be paid in the form of a single life annuity.
3.3 EARLY RETIREMENT ELECTION. In the event the Participant elects to receive
his or her Supplemental Pension Benefit on or after the Participant's Early
Retirement Date but prior to the Participant's Normal Retirement Date, the
Participant's Supplemental Pension Benefit shall be calculated as provided in
accordance with Section 3.2 hereof, provided, however, that in determining the
Participant's annual Pension Plan benefit as of the Participant's Normal
Retirement Date, the Participant's Accrued Benefit under the Pension Plan as of
his or her termination date shall be increased for purposes of this Plan with an
imputed Average Interest Credit to reflect the Participant's Pension Plan
benefit at his or her Normal Retirement Date and shall be converted to the form
of a single life annuity option using the Average Treasury Rate and the GATT
Mortality Table. The amount of the Participant's annual Supplemental Pension
Benefit otherwise determined under Section 3.2 and Section 3.3 hereof, shall be
reduced by 3.6% for each year that the Participant is between the ages of 55 and
60 and by 4.8% for each year after the Participant attains age 60 to actuarially
adjust the commencement of the Participant's Supplemental Pension Benefit prior
to his or her Normal Retirement Date.
3.4 ACTUARIAL FACTORS. The Supplemental Pension Benefit payable to a
Participant or Participant's Beneficiary in a form other than a single life
annuity shall be actuarially equivalent to such single life annuity payment
option. In making the determination provided for in this Article III, the
Corporation shall rely upon calculations made by the independent actuaries for
the Plan, who shall determine actuarially equivalent benefits under the Plan by
applying the UP-1984 Mortality Table (set back two years) and using an interest
rate of 6%.
3.5 RECALCULATION AS A RESULT OF HARMFUL ACTIVITY. Notwithstanding the
foregoing provisions of Section 3.2 and Section 3.3 hereof, the Corporation
reserves the right at all times to recalculate a Participant's Supplemental
Pension Benefit, if it is determined that within six months of the Participant's
termination date the Participant engaged in any Harmful Activity, as that term
is defined in accordance with Section 2.1(s) of the Plan, which resulted in the
forfeiture of all or any portion of the Participant's restricted share award(s)
under the KeyCorp Amended and Restated 1991 Equity Compensation Plan or
Equity/Compensation Awards granted under the KeyCorp 2004 Equity Compensation
Plan (if applicable). Such recalculation shall relate back to the Participant's
original date of termination, and any Supplemental Pension Benefit payment paid
to the Participant in excess of such recalculated Supplemental Pension Benefit
amount shall be offset against any future Supplemental Pension Benefit payments
to be paid to the Participant."
ARTICLE IV
PAYMENT OF SUPPLEMENTAL PENSION BENEFIT
4.1 IMMEDIATE PAYMENT UPON TERMINATION OR RETIREMENT OF PARTICIPANT. Subject
to the provisions of Section 4.2 and Section 4.3 hereof, a Participant meeting
the age and service eligibility requirements of Section 3.1, shall receive an
immediate distribution of his or her Supplemental Pension Benefit upon the
Participant's termination of employment in the form of a single life annuity,
unless the Participant elects in writing a minimum of thirty days prior to his
or her termination date to receive payment of his or her Supplemental Pension
Benefit under a different form of payment. The forms of payment from which a
Participant may elect shall provide a benefit that is actuarially equivalent to
the Participant's single life annuity payment as calculated under the provisions
of Section 3.2 hereof, and shall be identical to those forms of payment
specified in the Pension Plan, provided, however, that the lump sum payment
option available under the Pension Plan shall not be available under this Plan.
Such method of payment, once elected by the Participant, shall be irrevocable.
4.2 DEFERRED BENEFIT PAYMENT. A Participant who terminates his or her
employment with an Employer after meeting the age and service requirements of
Section 3.1, may elect to defer the receipt of his or her Supplemental Pension
Benefit until a date specified by the Participant, subject to the following
requirements: (i) the Participant
notifies the Corporation in writing of his or her deferral election a minimum of
twelve months prior to the Participant's termination of employment, (ii) the
Participant specifies the future date on which such Supplemental Pension Benefit
shall be distributed, (iii) the Participant's requested deferral period is for a
period of not less than five years following the Participant's retirement or
termination of employment, (iv) the Participant's Supplemental Pension Benefit
commencement date mirrors the benefit commencement date of the Participant's
Supplemental Pension Benefit under the KeyCorp Executive Supplemental Pension
Plan, and (v) the Participant commences distribution of his or her Supplemental
Pension Benefit no later than the first day of the month immediately following
the Participant's sixty-fifth (65th) birthday. The election to defer, once made
by the Participant, shall be irrevocable.
Notwithstanding the foregoing, in the case of an "unforeseeable
emergency", upon written application by the Participant to the Corporation, the
Corporation may accelerate the distribution of the Participant's deferred
Supplemental Pension Benefit. For purposes of this Section 4.2, the term
"unforeseeable emergency" shall mean a severe financial hardship to the
Participant resulting from a sudden and unexpected illness or accident of the
Participant, the Participant's spouse, or the Participant's dependent (as
defined in Section 152(a) of the Code), the loss of the Participant's property
due to casualty, or such other similar extraordinary and unforeseeable
circumstances arising as a result of events beyond the control of the
Participant. The determination of an "unforeseeable emergency" and the ability
of the Corporation to accelerate the Participant's Supplemental Pension Benefit
shall be determined in accordance with the requirements of Section 409A of the
Code and applicable regulations issued thereunder.
4.3 PAYMENT LIMITATION FOR KEY EMPLOYEES. Notwithstanding any other provision
of the Plan to the contrary, in the event that the Participant constitutes a
"key" employee of the Corporation (as that term is defined in accordance with
Section 416(i) of the Code without regard to paragraph (5) thereof),
distributions of the Participant's Supplemental Pension Benefit may not be made
before the date which is six months after the Participant's date of separation
from service (or, if earlier, the date of death of the Participant). The term
"separation from service" shall be defined for Plan purposes in accordance with
the requirements of Section 409A of the Code and applicable regulations issued
thereunder.
4.4 PAYMENT UPON DEATH OF PARTICIPANT.
(a) Upon the death of a Participant who has met the service requirements
of Section 3.1, but who has not yet commenced distribution of his or her
Supplemental Pension Benefit, there shall be paid to the Participant's
Beneficiary 50% of the Supplemental Pension Benefit which the Participant would
have been entitled to receive under the provisions of Section 3.2 of the Plan
calculated as if the Participant had retired on his or her Normal Retirement
Date and elected to receive his or her Supplemental Pension Benefit.
For purposes of this Section 4.4(a) only, the following shall apply:
(i) The Participant's Credited Service shall be calculated as of the
Participant's date of death.
(ii) The Participant's Pension Plan benefit shall be calculated under the
provisions of Article IV of the Pension Plan as if the Participant
had died on his or her Normal Retirement Date, with such Pension
Plan benefit being increased for purposes of this Section 4.4(a)
with an imputed Average Interest Credit to reflect what the
Participant's Pension Plan benefit would have been as of the
Participant's Normal Retirement Date; such Pension Plan benefit
shall be converted to a single life annuity option using the Average
Treasury Rate and Gatt Mortality Table.
(iii) The Participant's Social Security Primary Amount shall be calculated
as if the Participant had retired as of his or her Normal Retirement
Date.
Payment of this death benefit shall be made in the form of a single life
annuity and will be subject to distribution any time after the Participant's
Early Retirement Date, which shall be calculated in accordance with the
actuarial reduction provisions contained within Section 3.3 hereof, if paid
prior to the Participant's Normal Retirement Date.
(b) In the event of a Participant's death after the Participant has
commenced distribution of his or her Supplemental Pension Benefit, there shall
be paid to the Participant's Beneficiary only those survivor benefits provided
under the form of benefit payment elected by the Participant.
ARTICLE V
DISTRIBUTION OF LARGEST PLAN BENEFIT
5.1 DISTRIBUTION OF LARGEST PLAN BENEFIT. A Participant who meets the
eligibility requirements for an Executive Supplemental Pension Program Benefit
and who is also eligible for an Excess Pension Program Benefit shall
automatically be provided at the Participant's termination the larger of the two
Program benefits (i.e. the greater of the Participant's Excess Pension Program
Benefit or the Executive Supplemental Pension Program Benefit).
In making the determination required under this Section 5.1 hereof, the
Corporation shall rely upon calculations made by independent actuaries for the
Pension Plan, who shall apply the actuarial assumptions and interest rate then
in use under the Pension Plan for converting the Participant's Excess Pension
Program Benefit to a single life annuity form of payment. The Participant
automatically will receive the Program Benefit that provides the Participant
with the largest monthly single life annuity benefit.
5.2 BENEFICIARY DISTRIBUTION OF LARGEST PLAN BENEFIT.
(a) Upon the death of a Participant meeting eligibility requirements
for an Excess Pension Program Benefit and the eligibility requirements for an
Executive Supplemental Pension Program Benefit there shall be paid to the
Participant's Beneficiary the larger of the two Programs' death benefit. Such
death benefit shall be paid to the Beneficiary in the form of a single life
annuity.
(b) In the event of a Participant's death after the Participant has
commenced distribution of his or her Plan benefit, there shall be paid to the
Participant's Beneficiary only those survivor benefits provided under the form
of benefit payment elected by the Participant.
ARTICLE VI
ADMINISTRATION AND CLAIMS PROCEDURE
6.1 ADMINISTRATION. The Corporation, which shall be the "Administrator" of the
Plan for purposes of ERISA and the "Plan Administrator" for purposes of the
Code, shall be responsible for the general administration of the Plan, for
carrying out the provisions hereof, and for making payments hereunder. The
Corporation shall have the sole and absolute discretionary authority and power
to carry out the provisions of the Plan, including, but not limited to, the
authority and power (a) to determine all questions relating to the eligibility
for and the amount of any benefit to be paid under the Plan, (b) to determine
all questions pertaining to claims for benefits and procedures for claim review,
(c) to resolve all other questions arising under the Plan, including any
questions of construction and interpretation, and (d) to take such further
action as the Corporation shall deem necessary or advisable in the
administration of the Plan. All findings, decisions, and determinations of any
kind made by the Corporation shall not be disturbed unless the Corporation has
acted in an arbitrary and capricious manner. Subject to the requirements of law,
the Corporation shall be the sole judge of the standard of proof required in any
claim for benefits and in any determination of eligibility for a benefit. All
decisions of the Corporation shall be final and binding on all parties. The
Corporation may employ such attorneys, investment counsel, agents, and
accountants as it may deem necessary or advisable to assist it in carrying out
its duties hereunder. The actions taken and the decisions made by the
Corporation hereunder shall be final and binding upon all interested parties
subject, however, to the provisions of Section 6.2. The Plan Year, for purposes
of Plan administration, shall be the calendar year.
6.2 CLAIMS REVIEW PROCEDURE. Whenever the Corporation decides for whatever
reason to deny, whether in whole or in part, a claim for benefits under this
Plan filed by any person (herein referred to as the "Claimant"), the Corporation
shall transmit a written notice of its decision to the Claimant, which notice
shall be written in a manner calculated to be understood by the Claimant and
shall contain a statement of the specific reasons for the denial of the claim
and a statement advising the Claimant that, within 60 days of the date on which
he or she receives such notice, he or she may obtain review of the decision of
the Corporation in accordance with the procedures hereinafter set forth. Within
such 60-day period, the Claimant or his or her authorized representative may
request that the claim denial be reviewed by filing with the Corporation a
written request therefore, which request shall contain the following
information:
(a) the date on which the request was filed with the Corporation;
provided, however, that the date on which the request for review was in fact
filed with the Corporation shall control in the event that the date of the
actual filing is later than the date stated by the Claimant pursuant to this
paragraph (a);
(b) the specific portions of the denial of his claim which the Claimant
requests the Corporation to review;
(c) a statement by the Claimant setting forth the basis upon which he
believes the Corporation should reverse its previous denial of his claim and
accept his claim as made; and
(d) any written material which the Claimant desires the Corporation to
examine in its consideration of his position as stated pursuant to paragraph (c)
above.
In accordance with this Section 6.2, if the Claimant requests a review of
the Corporation's decision, such review shall be made by the Corporation, who
shall, within sixty (60) days after receipt of the request form, review and
render a written decision on the claim containing the specific reasons for the
decision including reference to Plan provisions upon which the decision is
based. All findings, decisions, and determinations of any kind made by the
Corporation shall not be modified unless the Corporation has acted in an
arbitrary and capricious manner. Subject to the requirements of a law, the
Corporation shall be the sole judge of the standard of proof required in any
claim for benefits, and any determination of eligibility for a benefit. All
decisions of the Corporation shall be binding on the Claimant and upon all other
Persons. If the Participant, or Beneficiary shall not file written notice with
the Corporation at the times set forth above, such individual shall have waived
all benefits under the Plan other than as already provided, if any, under the
Plan.
ARTICLE VII
FUNDING
All benefits under the Plan shall be payable solely in cash from the
general assets of the Corporation or a subsidiary, and Participants and
Beneficiaries shall have the status of general unsecured creditors of the
Corporation. The obligations of the Corporation to make distributions in
accordance with Article III and Article IV of the Plan constitute a mere promise
to make payments in the future. The Corporation shall have no obligation to
establish a trust or fund to fund its obligation to pay benefits under the Plan
or to insure any benefits under the Plan. Notwithstanding any provision of this
Plan, the Corporation may, in its sole discretion, combine the payment due and
owing under this Plan with one or more other payments owing to a Participant or
a Participant's Beneficiary under any other plan, contract, or otherwise (other
than any payment due under the Pension Plan), in one check, direct deposit, wire
transfer, or other means of payment. Finally, it is the intention of the
Corporation and the Participants that the Plan be unfunded for tax purposes and
for the purposes of Title I of the Employee Retirement Income Security Act of
1974, as amended.
ARTICLE VIII
AMENDMENT AND TERMINATION
The Corporation reserves the right to amend or terminate the Plan at any
time by action of its Board of Directors or a duly authorized committee of such
Board of Directors; provided, however, that no such action shall adversely
affect the benefit accrued up to the date of the Plan amendment or termination
for any Participant who has met the age and service requirements of Section 3.1
of the Plan, or any Participant or Participant's Beneficiary who is receiving,
or who is eligible to receive a Supplemental Pension Benefit hereunder, unless
an equivalent benefit is provided under another plan maintained by the
Corporation. No amendment or termination will result in an acceleration of
Supplemental Pension Benefits in violation of Section 409A of the Code.
ARTICLE IX
MISCELLANEOUS
9.1 INTEREST OF PARTICIPANT. The obligation of the Corporation under the Plan
to provide the Participant or the Participant's Beneficiary with a Supplemental
Pension Benefit merely constitutes the unsecured promise of the Corporation to
make payments as provided herein, and no person shall have any interest in, or a
lien, or prior claim on any property of the Corporation.
9.2 NO COMMITMENT AS TO EMPLOYMENT. Nothing herein contained shall be
construed as a commitment or agreement upon the part of any Participant
hereunder to continue his or her employment with an Employer, and
nothing herein contained shall be construed as a commitment on the part of any
Employer to continue the employment or rate of compensation of any Participant
hereunder for any period. All Participants shall remain subject to discharge to
the same extent as if the Plan had never been put into effect.
9.3 BENEFITS. Nothing in the Plan shall be construed to confer any right or
claim upon any person, firm, or corporation other than Participants and
Participants' Beneficiaries who become entitled to a benefit under the Plan.
9.4 RESTRICTIONS ON ALIENATION. Except to the extent permitted by law, no
benefit under the Plan shall be subject to anticipation, alienation, assignment
(either at law or in equity), encumbrance, garnishment, levy, execution, or
other legal or equitable process. No person shall have power in any manner to
anticipate, transfer, assign, (either at law or in equity), alienate or subject
to attachment, garnishment, levy, execution, or other legal or equitable
process, or in any way encumber his or her benefits under the Plan, or any part
thereof, and any attempt to do so shall be void.
9.5 ABSENCE OF LIABILITY. No member of the Board of Directors of the
Corporation or a subsidiary, or any officer of the Corporation or a subsidiary
shall be liable for any act or action hereunder, whether of commission or
omission, taken by any other member, or by any officer, agent, or Employee
except in circumstances involving his or her bad faith or willful misconduct.
9.6 EXPENSES. The expenses of administration of the Plan shall be paid by the
Corporation.
9.7 PRECEDENT. Except as otherwise specifically provided, no action taken in
accordance with the Plan by the Corporation shall be construed or relied upon as
a precedent for similar action under similar circumstances.
9.8 DUTY TO FURNISH INFORMATION. The Corporation shall furnish to each
Participant or Participant's Beneficiary any documents, reports, returns
statements, or other information that it reasonably deems necessary to
perform its duties imposed hereunder or otherwise imposed by law.
9.9 WITHHOLDING. The Corporation shall withhold any tax required by any
present or future law to be withheld from any payment hereunder to any
Participant or Participant's Beneficiary.
9.10 VALIDITY OF PLAN. The validity of the Plan shall be determined and the
Plan shall be construed and interpreted in accordance with the provisions of the
Act, the Code, and, to the extent applicable, the laws of the State of Ohio. The
invalidity or illegality of any provision of the Plan shall not affect the
validity or legality of any other part thereof.
9.11 PARTIES BOUND. The Plan shall be binding upon the Corporation, all
Participants, all Participants' Beneficiaries, and the executors,
administrators, successors, and assigns of each of them.
9.12 HEADINGS. All headings used in the Plan are for convenience of reference
only and are not part of the substance of the Plan.
ARTICLE X
CHANGE OF CONTROL
Notwithstanding any other provision of the Plan to the contrary, in the
event of a Change of Control, a Participant's interest in his or her
Supplemental Pension Benefit shall vest. On and after a Change of Control, a
Participant shall be entitled to receive an immediate distribution of his or her
Supplemental Pension Benefit if the Participant has at least five (5) years of
Credited Service, and (i) the Participant's employment is terminated by his or
her Employer and any other Employer without cause, or (ii) the Participant
resigns within two years following a Change of Control as a result of the
Participant's mandatory relocation, reduction in the Participant's base salary,
reduction in the Participant's average annual incentive compensation (unless
such reduction is attributable to the overall corporate or business unit
performance), or the Participant's exclusion from stock option programs as
compared to comparably situated Employees.
For purposes of this Article X hereof, a "Change of Control" shall be
deemed to have occurred if under a rabbi trust arrangement established by
KeyCorp ("Trust"), as such Trust may from time to time be amended or
substituted, the Corporation is required to fund the Trust because a "Change of
Control", as defined in the Trust, has
occurred.
ARTICLE XI
COMPLIANCE WITH
SECTION 409A CODE
The Plan is intended to provide for the deferral of compensation in
accordance with the provisions of Section 409A of the Code and regulations and
published guidance issued pursuant thereto. Accordingly, the Plan shall be
construed in a manner consistent with those provisions and may at any time be
amended in the manner and to the extent determined necessary or desirable by the
Corporation to reflect or otherwise facilitate compliance with such provisions
with respect to amounts deferred on and after January 1, 2005, including as
contemplated by Section 855(f) of the American Jobs Creation Act of 2004.
Notwithstanding any provision of the Plan to the contrary, no otherwise
permissible election or distribution shall be made or given effect under the
Plan that would result in early taxation or assessment of penalties or interest
of any amount under Section 409A of the Code.
Notwithstanding any provision of the Plan to the contrary, Supplemental
Pension Benefits shall not be distributed to a Participant earlier than:
(a) the Participant's separation from service as determined by the
Secretary of the Treasury (except as provided below with respect to a key
employee of the Corporation);
(b) death of the Participant; or
(c) upon the occurrence to the Participant, the Participant's spouse,
or the Participant's dependent an unforeseeable emergency as defined in Section
409A(a)(2)(B)(ii) of the Code.
If it is determined that a Participant constitutes a key employee (as
defined in Section 416(i) of the Code without regard to paragraph (5) thereof)
of the Corporation, the Participant shall not commence the distribution of his
or her Supplemental Pension Benefits before the date which is six months after
the date of the Participant's separation from service (or, if earlier, the date
of death of the Participant).
IN WITNESS WHEREOF, KeyCorp has caused this KeyCorp Second Executive
Supplemental Pension Plan to be executed as of December 28, 2004, and to be
effective as of January 1, 2005.
KEYCORP
By: /s/ Thomas E. Helfrich
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Title:Executive Vice President
EXHIBIT A
EMPLOYEE