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EXHIBIT 10
AGREEMENT
THIS AGREEMENT ("Agreement") is made as of the 5th day of February,
1996, between KEYCORP, an Ohio corporation ("Key"), and K. BRENT SOMERS (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 7, 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
4.1 (which stipulates that the payments are in lieu of other claims or rights),
4.2 (regarding withholding), 4.3 (regarding excess parachute payments), and 4.4
(regarding potential deferral of certain compensation above $1,000,000).
1.1 LUMP SUM SEVERANCE BENEFIT IF EMPLOYMENT IS TERMINATED IN
CERTAIN CIRCUMSTANCES 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 Base Salary or a Mandatory Relocation has occurred, Key shall
pay to the Executive, within ten business days after the Termination Date, a
lump sum severance benefit equal to 2 1/2 times the sum of (a) one year's base
salary (at the highest rate in effect at any time from one year prior to the
Change of Control to the Termination Date) plus (b) Average Annual Incentive
Compensation.
1.2 LUMP SUM SEVERANCE BENEFIT IF EMPLOYMENT IS TERMINATED BY
EXECUTIVE 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 voluntarily terminated by the Executive during a Window Period, Key shall
pay to the Executive, within ten business days after the Termination Date, a
lump sum severance benefit equal to the sum of (a) one year's base salary (at
the highest rate in effect at any time from one year prior to the Change of
Control to the Termination Date) plus (b) Average Annual Incentive
Compensation. This Section 1.2 shall not apply if, at the Termination Date,
(x) there has been either any Reduction of Base Salary or any Mandatory
Relocation (in which event Section 1.1 would apply to the
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termination) or (y) Key or any Subsidiary has Cause to terminate the
Executive's employment (in which case no lump sum severance benefit would be
payable 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 at the Executive's cost 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 to the Executive 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 by any other person or entity.
2. OTHER BENEFITS.
2.1 REIMBURSEMENT OF CERTAIN EXPENSES AFTER A CHANGE OF CONTROL.
From and after a Change of Control, Key shall pay, as incurred, all expenses,
including the reasonable fees of counsel engaged by the Executive, of defending
any action brought to have this Agreement declared invalid or unenforceable.
2.2 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, as a result
of accidental bodily injury or sickness, 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, (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. 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 which 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. 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. The provisions of this Agreement, and any payment provided for
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hereunder, shall not reduce any amounts otherwise payable, or in any way
diminish the Executive's rights, or rights which would accrue solely as a
result of the passage of time, under any incentive compensation plan, stock
option or stock appreciation rights plan, 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.
4. CERTAIN LIMITATIONS ON BENEFITS.
4.1 PAYMENTS IN LIEU OF OTHER CLAIMS OR RIGHTS. If the Executive
receives any payments under this Agreement as a result of 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. Without limiting the generality of the immediately
preceding sentence, if, without regard to this Section 4.1, the Executive
becomes entitled both to severance benefits under this Agreement and a
severance payment under the January 12, 1996 employment letter from Key to the
Executive that was signed on behalf of Key by Roger Noall (the "Employment
Letter"), the Executive shall have the right to elect to receive either the
severance benefits under this Agreement or the severance payment under the
Employment Letter, but not both, and Key shall not make any payments under
either this Agreement or the Employment Letter until after the Executive has
delivered to Key a signed notice of election to receive payments under this
Agreement or under the Employment Letter which notice shall acknowledge that if
amounts are paid under this Agreement, none will be paid under the Employment
Letter and vice versa.
4.2 TAXES; WITHHOLDING OF TAXES. Without limiting the right of
Key or its Subsidiary to withhold taxes pursuant to this Section 4.2, 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 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.
4.3 EXCESS PARACHUTE PAYMENT REDUCTION. If it is determined that
any payment or distribution by Key or any of its Subsidiaries to or for the
benefit of the Executive (whether paid or payable or distributed or
distributable pursuant to the terms of this Agreement or otherwise) (a
"Payment") would be nondeductible by Key or a Subsidiary for Federal income tax
purposes because of Section 280G of the Internal Revenue Code and applicable
regulations promulgated thereunder, then the aggregate present value of amounts
payable or distributable to or for the benefit of the Executive pursuant to
this Agreement (such payments or distributions pursuant to this Agreement are
hereinafter referred to as "Agreement Payments") shall be reduced (but not
below zero) to the Reduced Amount. The "Reduced Amount" shall
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be an amount expressed in present value that maximizes the aggregate present
value of Agreement Payments without causing any Payment to be nondeductible by
Key or a Subsidiary because of Section 280G of the Internal Revenue Code and
applicable regulations promulgated thereunder. For purposes of this Section
4.3, present value shall be determined in accordance with Section 280G(d)(4) of
the Internal Revenue Code and applicable regulations promulgated thereunder.
All determinations required to be made under this Section 4.3 shall be made by
the Accounting Firm which shall provide detailed supporting calculations both
to Key and 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. All such
determinations by the Accounting Firm shall be final and binding upon Key and
the Executive. The Executive shall determine which of the Agreement Payments
(or, at the election of the Executive, other payments) shall be eliminated or
reduced consistent with the requirements of this Section 4.3, provided that, if
the Executive does not make such determination within 20 days of the receipt of
the calculations made by the Accounting Firm, Key shall elect which of the
Agreement Payments shall be eliminated or reduced consistent with the
requirements of this Section 4.3 and shall notify the Executive promptly of
such election. As a result of the uncertainty in the application of Section
280G of the Internal Revenue Code and applicable regulations promulgated
thereunder at the time of the initial determination by the Accounting Firm
hereunder, it is possible that Agreement Payments will be made by Key that
should not have been made ("Overpayment") or that additional Agreement Payments
will not be made by Key which could have been made ("Underpayment"), in each
case, consistent with the calculations required to be made hereunder. If the
Accounting Firm or a court of competent jurisdiction (in a final judgment as to
which the time for appeal has lapsed or no appeal is available) determines at
any time that an Overpayment has been made, any such Overpayment shall be
treated for all purposes as a loan to the Executive which the Executive shall
repay to Key together with interest at the applicable short-term Federal rate
provided for in Section 1274(d)(1) of the Internal Revenue Code, compounded
semi-annually; provided, however, that no amount shall be payable by the
Executive to Key (or if paid by the Executive to Key, such payment shall be
returned to the Executive) if and to the extent such payment would not reduce
the amount which is subject to taxation under Section 4999 of the Internal
Revenue Code. If the Accounting Firm or a court of competent jurisdiction (in
a final judgment as to which the time for appeal has lapsed or no appeal is
available) determines at any time that an Underpayment has occurred, any such
Underpayment shall be promptly paid by Key to or for the benefit of the
Executive together with interest at the applicable short-term Federal rate
provided for in Section 1274(d)(1) of the Internal Revenue Code, compounded
semi-annually.
4.4 POTENTIAL DEFERRAL OF CERTAIN COMPENSATION IN EXCESS OF
$1,000,000 IN ANY CALENDAR YEAR.
(a) SECTION 162(M). For purposes of this Section 4.4,
the term "Section 162(m)" shall mean Section 162(m)
of the Internal Revenue Code (which prescribes rules
disallowing deductions for certain "applicable
employee remuneration" to any of five specified
"covered employees" of a publicly
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held corporation in excess of $1,000,000 per year),
as from time to time amended, and the corresponding
provisions of any similar law subsequently enacted,
and to all regulations issued under that section and
any such provisions.
(b) DEFERRAL. Except as otherwise provided in either of
Section 4.4(c) or Section 4.4(d), below, if Key
determines that, after giving effect to all
applicable elective deferrals of compensation, any
amount of compensation (including any base salary and
any incentive compensation payable under any
incentive compensation plan in which the Executive is
a participant) otherwise payable to the Executive
whether under this Agreement or otherwise at any
particular time (the "Scheduled Time"),
(i) would not be deductible by Key or any Subsidiary
if paid at the Scheduled Time by reason of the
disallowance rules of Section 162(m), and
(ii) would be deductible by Key or a Subsidiary if
deferred until and paid during a later year,
that amount of compensation shall be deferred until,
and paid during, the year that is determined by Key
to be the first year following the year of deferral
during which the compensation can be paid without
disallowance of the deduction for payment of the
compensation by reason of Section 162(m). If Key
determines that in any year following the year of
deferral a portion of, but not all of, the amounts
deferred (together with interest thereon as provided
in Section 4.4(e), below) can be paid without
disallowance of the deduction, that portion that can
be so paid shall be paid by Key during that year and
the remainder, except as otherwise provided in
Section 4.4(c) or Section 4.4(d), below, shall
continue to be deferred until a later year.
(c) EARLY PAYOUT OF DEFERRED AMOUNT IF DEFERRAL IS
DETERMINED TO BE INEFFECTIVE. If any amount of
compensation is deferred under Section 4.4(b) with
the expectation that it will be deductible by Key or
a Subsidiary if paid in a later year and Key later
determines that the compensation will not be
deductible by Key or a Subsidiary even if payment
thereof is deferred until a later year, then, within
three months of the date on which that determination
is made, the deferral with respect to that
compensation shall terminate and Key shall pay that
compensation to the Executive.
(d) PAYOUT FOLLOWING TERMINATION OF EMPLOYMENT IN ALL
EVENTS. On April 15 of the year immediately
following the year in which the Executive ceases to
be employed by Key or any Subsidiary, Key shall pay
to the Executive, in a single lump sum, all amounts
of compensation
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that have been deferred pursuant to this Section 4.4
and have not previously been paid so that, as of the
close of business on that date, no amount of
compensation will remain deferred under this Section
4.4 whether or not Key or any Subsidiary is entitled
to a deduction with respect to the payment of that
compensation.
(e) INTEREST ON DEFERRED AMOUNTS. Upon payment of any
amounts of compensation deferred for any period of
time pursuant to this Section 4.4, Key shall pay to
the Executive an additional amount equivalent to the
interest that would have accrued on that deferred
compensation if interest accrued thereon from the
date on which that compensation would have been paid
but for this Section 4.4 through the date on which
that compensation is paid at a variable rate equal,
in each calendar quarter, to 50 basis points higher
than the effective annual yield of the average of the
Moody's average corporate bond yield index for the
calendar month immediately preceding that calendar
quarter as published by Moody's Investor Service Inc.
(or any successor published thereto) or if such index
is no longer published a substantially similar index
selected by the Compensation and Organization
Committee, compounded quarterly.
5. TERM OF THIS AGREEMENT. This Agreement shall be effective
upon the day and date first above written and shall thereafter apply to any
Change of Control occurring on or before December 31, 1996. On December 31,
1996 and on December 31 of each succeeding year thereafter (a "Renewal Date"),
the term of this Agreement, if not previously terminated, 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.
5.1 TERMINATION OF AGREEMENT UPON TERMINATION OF EMPLOYMENT BEFORE
A CHANGE OF CONTROL. This Agreement shall automatically terminate 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
primarily 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.
5.2 NO TERMINATION OF AGREEMENT DURING TWO YEAR PERIOD BEGINNING
ON DATE OF A CHANGE OF CONTROL. After a Change of Control, this Agreement may
not be terminated. However, if the Executive's employment with Key and its
Subsidiaries continues for more than two years following the occurrence of a
Change of Control, then, for all purposes of this Agreement other than Section
2.1, that particular Change of Control shall thereafter be treated as if it
never occurred.
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6. MISCELLANEOUS.
6.1 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.
6.2 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.
6.3 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.
6.4 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.
6.5 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, and the
Executive shall have the rights of an unsecured general creditor of Key with
respect thereto.
6.6 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
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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 therefor, 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 which the Executive requests Key
to review, and
(c) any written material which the Executive desires Key
to examine.
Within 30 days of the date specified in clause (a) of this Section
6.6, 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 6.6 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 6.6 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 6.6 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.
6.7 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.
6.8 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 which 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.
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7. DEFINITIONS.
7.1 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")).
7.2 AGGREGATE INCENTIVE COMPENSATION AWARD. The term "Aggregate
Incentive Compensation Award" with respect to the Executive for any year shall
mean the aggregate incentive compensation awards (whether paid in cash,
deferred, or a combination of both) payable to the Executive under any dollar
denominated (in contrast to stock based) annual executive incentive
compensation plan or multi-year executive incentive compensation plan
maintained by Key or any Subsidiary (or any predecessor of Key or a Subsidiary)
for that year. For these purposes, an incentive compensation award payable to
the Executive under any incentive compensation plan with respect to a period of
more than one year will be deemed to be "for" the last year of that multi-year
period. If no incentive compensation award is payable to the Executive for any
particular year under any incentive compensation plan maintained by Key or any
Subsidiary (or any predecessor of Key or a Subsidiary), whether because the
Executive was not employed by Key or any Subsidiary (or any predecessor of Key
or a Subsidiary) during any part of that year, because incentive compensation
targets were not met, or because of any other circumstances, the Aggregate
Incentive Compensation Award for that year will be $-0-.
7.3 AVERAGE ANNUAL INCENTIVE COMPENSATION. The term "Average
Annual Incentive Compensation" shall mean the average of the three highest
Aggregate Incentive Compensation Awards payable to the Executive for any of the
years during the five-year period ended on the December 31 immediately
preceding the Termination Date.
7.4 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
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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 at a
time when it has "Cause" therefor 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.
7.5 CHANGE OF CONTROL. A "Change of Control" shall be deemed to
have occurred if at any time before the Termination Date 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 owns, directly or indirectly, 50 percent or more of the total
combined 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, at any time within 24 months
after the effective date of that transaction,
individuals who were directors of Key on the day
after the last annual meeting of shareholders of Key
occurring before the transaction cease for any reason
to constitute at least 40% 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 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,
(i) after giving effect to such transaction, less
than 40% of the then outstanding voting
securities of the surviving or resulting
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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, and
(ii) at any time within 24 months after the
effective date of that transaction,
individuals who were directors of Key on the
day after the last annual meeting of
shareholders of Key occurring before that
effective date 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.
(c) A Change of Control will have occurred under this
clause (c) if any of the events described in (i),
(ii), (iii), or (iv) of this clause (c) (a "Change
Event") occurs, but only if the condition set out in
(x) or the condition set out in (y) of this clause
(c) applies. The Change Events described in (i),
(ii), (iii), and (iv) of this clause (c) are as
follows:
(i) 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 voting stock of Key in a
transaction or series of transactions by any
person (as the term "person" is used in
Section 13(d) and Section 14(d)(2) of the
1934 Act).
(ii) 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.
(iii) 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.
(iv) The shareholders of Key approve any plan or
proposal for the liquidation or dissolution
of Key.
The conditions set out in (x) and (y) of this
clause (c) are as follows:
(x) A Change Event occurred in connection with a
transaction that was not approved or
recommended by the Key Board of Directors.
(y) A Change Event occurred in connection with a
transaction that was approved or recommended
by the Key Board of Directors but only if,
within the 24 month period ending on the date
of that
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Change Event, Key had been "put in play"
without the prior approval, solicitation,
invitation, or recommendation of the Key
Board of Directors. For purposes of this
condition (y), Key will be deemed to have
been "put in play" if any person or entity
makes a public announcement of an intention
(I) to engage in a transaction with Key that, if
consummated, would result in a Change Event,
or
(II) 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 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).
(d) A Change of Control will have occurred under this
clause (d) if any person or entity announces an
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 after the
last annual meeting of shareholders of Key occurring
before that announcement, constituted the directors
of Key cease for any reason to constitute at least a
majority thereof.
7.6 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.
7.7 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
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if (a) as a result of accidental bodily injury or sickness, the Executive has
been unable to perform his normal duties for Key or its Subsidiary for a period
of 180 consecutive days, and (b) the Executive begins to receive payments under
the Key Long Term Disability Plan not later than 30 days after the Termination
Date.
7.8 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 consent more than 35 miles from where the
Executive was located prior to the Change of Control, (b) Key or its Subsidiary
has given written notice to the Executive that such a relocation is required,
and (c) the Executive, in a written response to that notice, has declined to
consent to the required relocation.
7.9 REDUCTION OF BASE SALARY. A "Reduction of Base Salary" shall
have occurred if the base salary of the Executive is reduced at any time after
a Change of Control.
7.10 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.
7.11 TERMINATION DATE. The term "Termination Date" means the date
on which the Executive's employment with Key and its Subsidiaries terminates.
7.12 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 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.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.
KEYCORP
By___________________________
THE "EXECUTIVE"
____________________________
K. BRENT SOMERS