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EX. 10.3
KEYCORP
AUTOMATIC DEFERRAL PLAN
ARTICLE I
The KeyCorp Automatic Deferral Plan ("Plan") is established effective
January 1, 1999 to require certain key Employees of KeyCorp to automatically
defer a percentage of the total amount of their incentive compensation accrued
under a KeyCorp sponsored incentive compensation plan to the Plan. The Plan, as
structured, is intended to provide those key Employees of KeyCorp with a
tax-favorable savings vehicle, while providing KeyCorp with a means of retaining
their continued employment. It is the intention of KeyCorp, and it is the
understanding of those Participants covered under the Plan, that 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
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2.1 MEANING OF DEFINITIONS. For the purposes of this Plan, the
following words and phrases shall have the meanings hereinafter set forth,
unless a different meaning is clearly required by the context:
(a) "BENEFICIARY" shall mean the person, persons or entity
entitled under Article VIII to receive any Plan benefits
payable after a Participant's death.
(b) "BOARD" shall mean the Board of Directors of KeyCorp, the
Board's Compensation and Organization Committee, or any other
committee designated by the Board or a subcommittee designated
by the Board's Compensation and Organization Committee.
(c) "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 on
and after January 1, 1999 to secure the payment of any
Participants' Plan benefits payable hereunder.
(d) "CODE" shall mean the Internal Revenue Code of 1986, as
amended from time to time, together with all regulations
promulgated thereunder. Reference to a section of the Code
shall include such section and any comparable section or
sections of any future legislation that amends, supplements,
or supersedes such section.
(e) "COMMON STOCK ACCOUNT" shall mean the investment account
established under the Plan for bookkeeping purposes in which
the Participant shall have his or her Participant Deferrals
and Corporate Contributions credited. Participant Deferrals
and Corporate Contributions shall be credited based on a
bookkeeping allocation of KeyCorp Common Shares (both whole
and fractional rounded to the nearest one-hundredth of a
share) ("Common Shares") which shall be equal to the amount of
Participant Deferrals and Corporate Contributions deferred.
The Common Stock Account shall also reflect on a
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bookkeeping basis all dividends, gains, and losses
attributable to such Common Shares. All Participant Deferrals
and all Corporate Contributions credited to the Common Stock
Account shall be based on the New York Stock Exchange's
closing price for such Common Shares as of the day such
Participant Deferrals and Corporate Contributions are credited
to the Participant's Plan Account.
(f) "CORPORATE CONTRIBUTIONS" shall mean the dollar amount which
an Employer has agreed to contribute on a bookkeeping basis to
the Participant's Plan Account in accordance with the
provisions of Article V of the Plan.
(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) "DEFERRAL PERIOD" shall mean each applicable Incentive
Compensation Plan's plan year.
(i) "DEFERRED COMPENSATION PLAN" shall mean the KeyCorp Deferred
Compensation Plan as the same may be amended from time to
time.
(j) "DETERMINATION DATE" shall mean the last business day of each
calendar quarter.
(k) "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.
(l) "DISCHARGE FOR CAUSE" shall mean the termination (whether by
the Participant or the Employer) of a Participant's employment
from his or her Employer and any other Employer that is the
result of (1) serious misconduct as an Employee, including,
but not limited to, a continued failure after notice to
perform a substantial portion of his or her duties and
responsibilities unrelated to illness or incapacity, unethical
behavior such as acts of self-dealing or self-interest,
harassment, violence in the workplace, or theft; (2) the
commission of a crime involving a controlled substance, moral
turpitude, dishonesty, or breach of trust; or (3) the Employer
being directed by a regulatory agency or self-regulatory
agency to terminate or suspend the Participant or to prohibit
the Participant from performing services for the Employer. The
Corporation in its sole and absolute discretion shall
determine whether a Participant has been Discharged for Cause,
as provided for in this Section 2.1(l), provided, however,
that for a period of two years following a Change of Control,
any determination by the Corporation that an Employee has been
Discharged for Cause shall be set forth in writing with the
factual basis for such Discharge for Cause clearly specified
and documented by the Corporation.
(m) "DISTRIBUTION AGREEMENT" shall mean the executed agreement
submitted by the Participant to the Corporation a minimum of
twelve months prior to the Participant's initial vesting in
his or her Participant Deferrals and Corporate Contributions
for the applicable Deferral Period which shall contain, in
pertinent part, the Participant's distribution instructions
for such Participant Deferrals and Corporate Contributions
when
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vested. In the event the Participant elects or is required to
transfer his or her vested Participant Deferrals and/or
Corporate Contributions to the Deferred Compensation Plan, the
Participant, at the time of such transfer, shall be required
to execute a new Distribution Agreement which shall control
the distribution of such transferred Plan benefits from the
Deferred Compensation Plan.
(n) "EMPLOYEE" shall mean a common law employee who is employed by
an Employer.
(o) "EMPLOYER" shall mean the Corporation and any of its
subsidiaries or affiliates, unless specifically excluded as an
Employer for Plan purposes by written action by an officer of
the Corporation. An Employer's Plan participation shall be
subject to all conditions and requirements made by the
Corporation, and each Employer shall be deemed to have
appointed the Plan Administrator as its exclusive agent under
the Plan as long as it continues as an Employer.
(p) "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
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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(p) 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.
(q) "INCENTIVE COMPENSATION AWARD" shall collectively
mean the incentive compensation accrued by an Employee under
the terms of an Incentive Compensation Plan during the
applicable Deferral Period, which shall become subject to the
automatic deferral and vesting provisions of Article III and
Article VI of the Plan when such accrued incentive
compensation exceeds $100,000 for the applicable Deferral
Period. For purposes of this Section 2.1(q), the term
"Incentive Compensation Award" shall not include any
compensation paid to the Employee for the applicable Deferral
Period which constitutes any form of hiring bonus, sales
commissions, referral awards, recognition awards, and /or
corporate long term incentive compensation plan awards.
(r) "INCENTIVE COMPENSATION PLAN" shall mean a line of business or
management incentive compensation plan that is sponsored by
KeyCorp or an affiliate of KeyCorp which the Corporation in
its sole discretion has determined constitutes an Incentive
Compensation Plan for purposes of the automatic deferral and
vesting provisions of Article III and Article VI of the Plan.
(s) "INVOLUNTARY TERMINATION" shall mean the termination (by the
Employer) of a Participant's employment from his or her
Employer and from any other Employer, other than a Discharge
for Cause or a Termination Under Limited Circumstances.
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(t) "PARTICIPANT" shall mean an Employee who meets the eligibility
and participation requirements set forth in Section 3.1 of the
Plan, provided, however, that the term Participant shall not
include any Employee who has attained age 58 or older prior to
the start of the applicable Deferral Period, and who
affirmatively elects in a manner prescribed by the Corporation
to not participate in the Plan for the applicable Deferral
Period.
(u) "PARTICIPANT DEFERRALS" shall mean any Incentive Compensation
Award required to be automatically deferred to the Plan for
each applicable Deferral Period.
(v) "PLAN" shall mean the KeyCorp Automatic Deferral Plan with all
amendments hereafter made.
(w) "PLAN ACCOUNT" shall mean those bookkeeping accounts
established by the Corporation for each Plan Participant,
which shall reflect all Corporate Contributions and
Participant Deferrals invested for bookkeeping purposes in the
Plan's Common Stock Account, with all earnings, dividends,
gains, and losses thereon. Plan Accounts shall not constitute
separate Plan funds or separate Plan assets. Neither the
maintenance of, nor the crediting of amounts to such Plan
Accounts shall be treated (i) as the allocation of any
Corporation assets to, or a segregation of any Corporation
assets in any such Plan Accounts, or (ii) as otherwise
creating a right in any person or Participant to receive
specific assets of the Corporation.
(x) "PLAN YEAR" shall mean the calendar year.
(y) "RETIREMENT" shall mean the termination of a Participant's
employment any time after the Participant's attainment of age
55 and completion of 5 years of Vesting Service but shall not
include the Participant's (i) Discharge for Cause, (ii)
Involuntary Termination, (iii) Termination Under Limited
Circumstances, (iv) Disability, or (v) death .
(z) "TERMINATION UNDER LIMITED CIRCUMSTANCES" shall mean the
termination (whether by the Participant or the Employer) of a
Participant's employment from his or her Employer, and from
any other Employer (i) under circumstances in which the
Participant is entitled to receive severance benefits or
salary continuation benefits under the KeyCorp Separation Pay
Plan, (ii) under circumstances in which the Participant is
entitled to severance benefits or salary continuation or
similar benefits under a change of control agreement or
employment agreement within two years after a change of
control (as defined by such agreement) has occurred, or (iii)
as otherwise expressly approved by the Corporation or the
Compensation and Organization Committee, in their sole
discretion.
(aa) "VESTING SERVICE" for purposes of Section 2.1(y) shall be
calculated by measuring the period of service commencing on
the Employee's employment commencement date and ending on the
Employee's termination date and shall be computed based on
each full calendar month that the Employee is employed by an
Employer.
(bb) "VOLUNTARY TERMINATION" shall mean a voluntary termination of
the Participant's employment from his or her Employer and from
any other Employer, whether by resignation or otherwise, but
shall not include the Participant's Discharge for Cause,
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Involuntary Termination, Retirement, Termination Under Limited
Circumstances, or termination as a result of Disability or
death.
2.2 PRONOUNS. The masculine pronoun wherever used herein includes
the feminine in any case so requiring, and the singular may
include the plural.
ARTICLE III
ELIGIBILITY AND PARTICIPATION
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3.1 ELIGIBILITY AND PARTICIPATION. An Employee shall be required to
participate in the Plan, and shall automatically become a Plan Participant upon
the Employee's grant of an Incentive Compensation Award in excess of $100,000
which is accrued by the Employee during the applicable Deferral Period.
3.2 AUTOMATIC DEFERRAL REQUIREMENTS. An Employee meeting the
eligibility and automatic participation requirements of Section 3.1 hereof,
shall automatically defer, in accordance with the terms of the applicable
Incentive Compensation Plan in which the Employee participates, the following
amount from the Employee's applicable Incentive Compensation Award:
(a) THE PORTION OF THE PARTICIPANT'S INCENTIVE COMPENSATION AWARD
BETWEEN $100,000 UP TO AND INCLUDING $500,000. Twenty percent
(20%) of the Participant's Incentive Compensation Award
between $100,000 up to and including $500,000 shall be
automatically deferred to the Plan.
(b) THE PORTION OF THE PARTICIPANT'S INCENTIVE COMPENSATION AWARD
BETWEEN $500,000 UP TO AND INCLUDING $1,000,000. Twenty five
percent (25%) of the Participant's Incentive Compensation
Award between $500,000 up to and including $1,000,000 shall be
automatically deferred to the Plan.
(c) THE PORTION OF THE PARTICIPANT'S INCENTIVE COMPENSATION AWARD
GREATER THAN $1,000,000. Thirty percent (30%) of the
Participant's Incentive Compensation Award greater than
$1,000,000 Plan shall be automatically deferred to the Plan.
3.3 COMMITMENT LIMITED BY TERMINATION UNDER LIMITED CIRCUMSTANCES,
INVOLUNTARY TERMINATION, RETIREMENT, DISABILITY, OR DEATH. As of a Participant's
Termination Under Limited Circumstances, Involuntary Termination, Retirement,
Disability or death, the Participant shall be relieved from and, further, shall
not be permitted to make any further Participant Deferrals to the Plan, and any
Incentive Compensation Award that thereafter would have been subject to the
Automatic Deferral Requirements of Section 3.2 hereof, if and to the extent
payable, shall be paid directly to the Participant in accordance with the terms
of the applicable Incentive Compensation Plan.
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3.4 EFFECT OF A PARTICIPANT'S DISCHARGE FOR CAUSE OR VOLUNTARY
TERMINATION ON PARTICIPANT DEFERRALS. In the event of a Participant's Discharge
for Cause or Voluntary Termination, the Participant shall forfeit his or her
Incentive Compensation Award to the extent that it would otherwise become
subject to the Automatic Deferral Requirements of Section 3.2 of the Plan when
paid but for the termination of the Participant's employment. As to whether the
balance of the Participant's Incentive Compensation Award not subject to the
Automatic Deferral Requirements of Section 3.2, if any, shall be payable to the
Participant shall be determined in accordance with the terms of the applicable
Incentive Compensation Plan.
3.5 CHANGE IN PARTICIPATION STATUS. Participants shall make automatic
Participant Deferrals to the Plan only when the Participant's Incentive
Compensation Award exceeds $100,000 for the applicable Deferral Period. During
those Deferral Periods in which the Participant does not automatically defer
Participant Deferrals to the Plan, Participant Deferrals and Corporate
Contributions previously credited to the Participant's Plan Account shall remain
in the Plan and shall continue to vest under the terms of Section 6.1 hereof;
such Participant Deferrals and Corporate Contributions with all earnings, gains,
or losses thereon when vested shall be distributed to the Participant in
accordance with the provisions of Article VII of the Plan.
ARTICLE IV
PARTICIPANT DEFERRALS
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4.1 PLAN ACCOUNT. All Participant Deferrals shall be credited on a
bookkeeping basis to a Plan Account established in the Participant's name.
Separate sub-accounts may be established to reflect on a bookkeeping basis all
earnings, gains, or losses attributable to the Participant's Participant
Deferrals and those Corporate Contributions credited to the Participant's Plan
Account in accordance with the provisions of Section 5.1 hereof.
4.2 INVESTMENT OF PARTICIPANT DEFERRALS. Participant Deferrals shall be
automatically invested on a bookkeeping basis in the Plan's Common Stock
Account.
4.3 CREDITING OF PARTICIPANT DEFERRALS. Participant Deferrals shall be
credited to the Participant's Plan Account as of the payroll date on which the
Participant's Incentive Compensation Award would have been payable to the
Participant but for the Incentive Compensation Plan's automatic deferral
provisions to the Plan.
ARTICLE V
CORPORATE CONTRIBUTIONS
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5.1 CREDITING OF CORPORATION CONTRIBUTIONS. Matching Corporate
Contributions equal to 15% of the Participant's Participant Deferrals for the
applicable Deferral Period shall be credited on a bookkeeping basis to the
Participant's Plan Account as of the payroll date on which the Participant's
Participant Deferrals are automatically deferred and credited to the Plan.
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5.2 INVESTMENT OF CORPORATE CONTRIBUTIONS. All Corporate Contributions
credited to the Participant's Plan Account shall be invested for bookkeeping
purposes in the Plan's Common Stock Account.
5.3 DETERMINATION OF AMOUNT. The Plan Administrator shall verify the
amount of Participant Deferrals, Corporate Contributions, dividends, and
earnings, if any, to be credited to each Participant's Plan Account in
accordance with the provisions of the Plan. The reasonable and equitable
decision of the Plan Administrator as to the value of each Plan Account shall be
conclusive and binding upon all Participants and the Beneficiary of each
deceased Participant having any interest, direct or indirect in the
Participant's Plan Account. As soon as reasonably practicable after the close of
the Plan Year, the Corporation shall send to each Participant an itemized
accounting statement that shall reflect the Participant's Plan Account balance.
5.4 CORPORATE ASSETS. All Participant Deferrals, Corporate
Contributions, dividends, earnings and any other gains and losses credited to a
Participant's Plan Account on a bookkeeping basis, remain the assets and
property of the Corporation, which shall be subject to distribution to the
Participant only in accordance with Articles VII, X and XI of the Plan.
Distributions made under the Plan shall be in the form of Common Shares or a
plan-to-plan transfer to the Deferred Compensation Plan as provided in Article
VII hereof. Participants and Beneficiaries shall have the status of general
unsecured creditors of the Corporation. Nothing contained in the Plan shall
create, or be construed as creating a trust of any kind or any other fiduciary
relationship between the Participant, the Corporation, or any other person. It
is the intention of the Corporation and it is the understanding of the
Participant that the Plan be unfunded for tax purposes and for purposes of Title
I of the Employee Retirement Income Security Act of 1974, as amended.
5.5 NO PRESENT INTEREST. Subject to any federal statute to the
contrary, no right or benefit under the Plan and no right or interest in each
Participant's Plan Account shall be subject to anticipation, alienation, sale,
assignment, pledge, encumbrance, or charge, and any attempt to anticipate,
alienate, sell, assign, pledge, encumber, or charge any right or benefit under
the Plan, or Participant's Plan Account shall be void. No right, interest, or
benefit under the Plan or Participant's Plan Account shall be liable for or
subject to the debts, contracts, liabilities, or torts of the Participant or
Beneficiary. If the Participant or Beneficiary becomes bankrupt or attempts to
alienate, sell, assign, pledge, encumber, or charge any right under the Plan or
Participant's Plan Account, such attempt shall be void and unenforceable.
ARTICLE VI
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VESTING
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6.1 VESTING IN PARTICIPANT DEFERRALS AND CORPORATE CONTRIBUTIONS. The
calculation of a Participant's vested interest in those Participant Deferrals
and Corporate Contributions credited on a bookkeeping basis to the Participant's
Plan Account shall be measured from the last day of the applicable calendar
quarter in which Participant Deferrals and Corporate Contributions are credited
to the Participant's Plan Account ("Quarterly Deferral Date"). A Participant
shall become vested in his or her Participant Deferrals and Corporate
Contributions with all earnings, gains, and losses thereon for each applicable
Deferral Period under the following three-year graded vesting schedule:
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(a) From the date the Participant's Participant Deferrals and
Corporate Contributions are credited to the Participant's Plan
Account until one full calendar year from the Quarterly
Deferral
Date................................................... 0%.
(b) One full calendar year from the Quarterly Deferral Date of
the Participant's Participant Deferrals and Corporate
Contributions to the Plan but less than two full calendar
years from such Quarterly Deferral
Date..................................... 33%.
(C) TWO FULL CALENDAR YEARS FROM THE QUARTERLY DEFERRAL
DATE OF THE PARTICIPANT'S PARTICIPANT DEFERRALS AND CORPORATE
CONTRIBUTIONS TO THE PLAN BUT LESS THAN THREE FULL CALENDAR
YEARS FROM SUCH QUARTERLY DEFERRAL DATE
.................................... 66%.
(d) Three full calendar years from the date of the Quarterly Deferral
Date of the Participant's Participant Deferrals and Corporate Contributions to
the
Plan..................................................................100%.
Notwithstanding the foregoing provisions of this Section 6.1, a Participant
shall become fully vested in all Participant Deferrals and Corporate
Contributions credited on a bookkeeping basis to the Participant's Plan Account
upon the Participant's Termination Under Limited Circumstances, Disability or
death.
6.2 CONTINUED VESTING UPON RETIREMENT. Subject to the provisions of
Section 7.2 of the Plan, upon the Participant's Retirement, the Participant's
non-vested Participant Deferrals and Corporate Contributions credited to the
Participant's Plan Account with all earnings and gains thereon, shall remain in
the Plan and shall continue to vest under the vesting provisions of Section 6.1
of the Plan.
6.3 FORFEITURE OF CORPORATE CONTRIBUTIONS. In the event of the
Participant's Involuntary Termination, as that term is defined in accordance
with Section 2.1(s) of the Plan, the Participant shall become immediately vested
in those Participant Deferrals allocated on a bookkeeping basis to the
Participant's Plan Account with all earnings and gains thereon. All non-vested
Corporate Contributions and related earnings credited on a bookkeeping basis to
the Participant's Plan Account shall be forfeited as of the Participant's last
day of employment.
6.4 FORFEITURE OF PARTICIPANT DEFERRALS AND CORPORATE CONTRIBUTIONS.
Notwithstanding any provision of the Plan to the contrary, upon the
Participant's Discharge for Cause or the Participant's Voluntary Termination,
the Participant shall automatically forfeit all Participant Deferrals and
Corporate Contributions allocated on a bookkeeping basis to the Participant's
Plan Account with all earnings and gains thereon that have not vested in
accordance with the vesting provisions of Section 6.1 of the Plan as of the
Participant's last day of employment.
ARTICLE VII
DISTRIBUTION OF PLAN BENEFITS
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7.1 DISTRIBUTIONS PRIOR TO RETIREMENT. A Participant's vested
Participant Deferrals and Corporate Contributions with all earnings and gains
thereon, shall be distributed to the Participant as of the Determination Date
concurrently with or immediately following the Participant's vesting in his or
her Plan
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benefit in accordance with the distribution directions provided by the
Participant in his or her Distribution Agreement, as follows:
(a) as a single lump sum distribution of Common Shares,
or
(b) as a plan-to-plan transfer of the Participant's
vested bookkeeping Plan Account balance to the
Deferred Compensation Plan's Common Stock Account.
Lump sum distributions from the Plan of vested Participant Deferrals and
Corporate Contributions shall be made in Common Shares based on the bookkeeping
number of whole and fractional Common Shares attributable to those vested
Participant Deferrals and Corporate Contributions maintained in the Plan's
Common Stock Account as of the Determination Date concurrently with or
immediately preceding the date of such distribution. Participants' Plan Account
balances transferred to the Deferred Compensation Plan's Common Stock Account
will not be subject to investment diversification and/or reallocation under the
Deferred Compensation Plan.
Notwithstanding the foregoing provisions of this Section 7.1, however, in the
event a Participant who is subject to the Corporation Stock Ownership Guidelines
fails to meet his or her Stock Ownership Guidelines requirement at the time of
his or her Plan distribution and the Participant has elected to receive a lump
sum distribution from the Plan, the Corporation in its discretion may (1)
withhold such portion of the Participant's lump sum distribution of Common
Shares until the Participant has otherwise met his or her obligations under the
Corporation Stock Ownership Guidelines, or (2) issue to the Participant
restricted Common Shares whose transferability will be restricted until the
Participant otherwise meets his or her obligations under the Stock Ownership
Guidelines.
7.2 DISTRIBUTIONS FOLLOWING RETIREMENT. Upon the Participant's
Retirement, the Participant's Plan Account balance shall continue to be
maintained within the Plan and all Participant Deferrals and Corporate
Contributions credited to the Participant's Plan Account with all earnings,
gains, and losses thereon, shall continue to vest under the vesting provisions
of Section 6.1 of the Plan, and when vested, shall be distributed to the
Participant in accordance with the provisions of Section 7.1(a) hereof.
Notwithstanding the foregoing provisions of this Section 7.2, however, in the
event of the Participant's Retirement, and within twelve months of such
Retirement the Participant engages in any "Harmful Activity" as that term is
defined in accordance with Section 2.1 (p) of the Plan, such Participant's
non-vested Plan Account balance shall be immediately forfeited and the
Participant shall automatically cease Plan participation.
7.3 DISTRIBUTIONS FOLLOWING TERMINATION UNDER LIMITED CIRCUMSTANCES,
DISABILITY OR DEATH. Upon the Participant's Termination Under Limited
Circumstances, termination of employment due to Disability or death, all
Participant Deferrals and Corporate Contributions credited to the Participant's
Plan Account with all earnings, gains, and losses thereon shall become
immediately vested and shall be distributed to the Participant in a single lump
sum distribution of Common Shares.
7.4 DISTRIBUTIONS FOLLOWING INVOLUNTARY TERMINATION. Upon the
Participant's Involuntary Termination, all Participant Deferrals credited to the
Participant's Plan Account with all earnings, gains and losses thereon, in
accordance with the provisions of Section 6.3 of the Plan, shall become
immediately vested and shall be distributed to the Participant in a single lump
sum distribution. All non-vested Corporate Contributions credited to the
Participant's Plan Account with all related earnings thereon shall be forfeited
by the Participant as of his or her last day of employment.
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7.5 DISTRIBUTIONS FOLLOWING VOLUNTARY TERMINATION OR DISCHARGE FOR
CAUSE. Upon the Participant's Voluntary Termination or Discharge for Cause, all
non-vested Participant Deferrals and Corporate Contributions credited to the
Participant's Plan Account with all earnings, gains, and losses thereon shall be
forfeited by the Participant as of his or her last day of employment.
7.6 WITHHOLDING. The withholding of taxes with respect to the
Participant's Participant Deferrals, Corporate Contributions, and all earnings
and gains thereon shall be made at such time as it becomes required by any
state, federal or local law; such taxes shall be withheld from the Participant's
Participant Deferrals and Corporate Contributions in accordance with applicable
law to the maximum extent possible.
7.7 DISTRIBUTION LIMITATION. If the Corporation determines that a
Participant's Participant Deferrals and/or Corporate Contributions with all
earnings and gains thereon:
1. would not be deductible by the Corporation if paid in accordance
with the distribution instructions specified by the Participant in his or
her Distribution Agreement by reason of the disallowance rules of Section
162(m) of the Code, but
2. would be deductible by the Corporation if deferred and paid in a
later Plan Year, the Corporation reserves the right to defer the
distribution of all or any portion of such Participant's Participant
Deferrals and/or Corporate Contributions with all interest and earnings
thereon until such time as the Corporation determines that the distribution
of all or any portion of such Participant's Participant Deferrals and/or
Corporate Contributions will be payable without the disallowance of the
deduction prescribed by Code Section 162(m) ("Deferrals"). Such unpaid
Deferrals shall be transferred to the Deferred Compensation Plan and shall
be held in the Deferred Compensation Plan's Common Stock Account and the
provisions of the Deferred Compensation Plan thereafter shall become
applicable with regard to such Deferrals.
Notwithstanding any other provision of this Section 7.7, however, all
Deferrals transferred to the Deferred Compensation Plan together with all
earnings, gains, and losses thereon, shall be distributed to the Participant no
later than April 15 of the year following the employment termination date of the
Participant, regardless of the deductibility of such distribution.
7.8 FACILITY OF PAYMENT. If it is found that any individual to whom an
amount is payable hereunder is incapable of attending to his or her financial
affairs because of any mental or physical condition, including the infirmities
of advanced age, such amount (unless prior claim therefor shall have been made
by a duly qualified guardian or other legal representative) may, in the
discretion of the Corporation, be paid to another person for the use or benefit
of the individual found incapable of attending to his or her financial affairs
or in satisfaction of legal obligations incurred by or on behalf of such
individual. Any such payment shall be charged to the Participant's Plan Account
from which any such payment would otherwise have been paid to the individual
found incapable of attending to his or her financial affairs, and shall be a
complete discharge of any liability therefor under the Plan.
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ARTICLE VIII
BENEFICIARY DESIGNATION
-----------------------
8.1 BENEFICIARY DESIGNATION. Subject to Section 8.3 hereof, each
Participant shall have the right, at any time, to designate one or more persons
or an entity as Beneficiary (both primary as well as secondary) to whom benefits
under this Plan shall be paid in the event of Participant's death prior to
complete distribution of the Participant's vested Plan Account. Each Beneficiary
designation shall be in a written form prescribed by the Corporation and shall
be effective only when filed with the Corporation during the Participant's
lifetime.
8.2 CHANGING BENEFICIARY. Any Beneficiary designation may be changed by
the Participant without the consent of the previously named Beneficiary by the
Participant's filing of a new designation with the Corporation. The filing of a
new designation shall cancel all designations previously filed by the
Participant.
8.3 NO BENEFICIARY DESIGNATION. If a Participant fails to designate a
Beneficiary in the manner provided above, if the designation is void, or if the
Beneficiary (including all contingent Beneficiaries) designated by a deceased
Participant dies before the Participant, the Participant's Beneficiary shall be
the Participant's estate.
ARTICLE IX
ADMINISTRATION
--------------
9.1 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/or 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 Plan Administrator shall not be disturbed unless the Plan
Administrator has acted in an arbitrary and capricious manner. Subject to the
requirements of law, the Plan Administrator 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 Plan Administrator 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 9.2.
The Plan Year, for purposes of Plan administration, shall be the calendar year.
9.2 CLAIMS REVIEW PROCEDURE. Whenever the Plan Administrator 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
Plan Administrator 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
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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
Plan Administrator 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 Plan
Administrator a written request therefor, which request shall contain the
following information:
(a) the date on which the request was filed with the Plan
Administrator; provided, however, that the date on which the
request for review was in fact filed with the Plan
Administrator 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 or her claim which
the Claimant requests the Plan Administrator to review;
(c) a statement by the Claimant setting forth the basis upon which he
or she believes the Plan Administrator should reverse its previous denial of the
claim and accept the claim as made; and
(d) any written material which the Claimant desires the Plan
Administrator to examine in its consideration of his or her
position as stated pursuant to paragraph (b) above.
In accordance with this Section 9.2, if the Claimant requests a review
of the claim decision, such review shall be made by the Plan Administrator, 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 Plan
Administrator shall not be modified unless the Plan Administrator has acted in
an arbitrary and capricious manner. Subject to the requirements of law, the Plan
Administrator 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 Plan Administrator shall be binding on the claimant and upon
all other persons or entities. If the Participant or Beneficiary shall not file
written notice with the Plan Administrator 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 X
AMENDMENT AND TERMINATION OF PLAN
---------------------------------
10.1 RESERVATION OF RIGHTS. The Corporation reserves the right to
terminate the Plan at any time by action of the Board of Directors of the
Corporation, or any duly authorized committee thereof, and to modify or amend
the Plan, in whole or in part, at any time and for any reason, subject to the
following:
(a) PRESERVATION OF ACCOUNT BALANCE. No termination, amendment, or
modification of the Plan shall reduce (i) the amount of
Participant Deferrals and Corporate Contributions, and (ii)
all earnings and gains on such Participant Deferrals and
Corporate Contributions that have accrued up to the effective
date of the termination, amendment, or modification.
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(b) CHANGES IN EARNINGS RATE. No amendment or modification of the
Plan shall reduce the rate of earnings to be credited on all
Participant Deferrals and Corporate Contribution, and all
earnings and gains accrued thereon under the Common Stock
Account until the close of the applicable Plan Year in which
such amendment or modification is made.
10.2 EFFECT OF PLAN TERMINATION. If the Corporation terminates the
Plan, either in whole or in part, the following will apply:
(a) PARTIAL TERMINATION. The Corporation may partially terminate
the Plan by instructing the Plan Administrator to not accept
any additional Participant Deferrals. If such a partial
termination occurs, the Plan shall continue to operate and to
be effective with regard to those Participant Deferrals
deferred and Corporate Contributions made prior to the
effective date of such partial termination.
(b) COMPLETE TERMINATION. The Corporation may completely terminate
the Plan by instructing the Plan Administrator to not accept
any additional Participant Deferrals and to fully vest all
Participants' Plan Account balances. If such a complete
termination occurs, the Plan shall cease to operate and the
Plan Administrator shall distribute each Participant's Plan
Account balance. Participants' distributions shall be made in
equal quarterly installments in Common Shares over the
following period, based on the value of each Participant's
Plan Account balance:
Account Balance Payout Period
--------------- -------------
Equal to or less than $100,000 Lump Sum
More than $100,000 3 Years
Plan payments shall commence within sixty-five (65) days after the
Corporation terminates the Plan. The Participant's unpaid Plan Account balance
invested for bookkeeping purposes in the Plan's Common Stock Account shall be
reflected as a number of whole and fractional Common Shares in a distribution
sub-account and shall be credited with dividends on a bookkeeping basis which
shall be reinvested in the Plan's Common Stock Account throughout the
distribution period; all such reinvested dividends shall be paid to the
Participant in Common Shares in conjunction with the Participant's final
distribution under the Plan.
10.3 EFFECT OF PLAN TERMINATION. Notwithstanding anything to the
contrary contained in the Plan, the termination of the Plan shall terminate the
liability of the Corporation and all Employers to make further Corporate
Contributions to the Plan.
ARTICLE XI
CHANGE OF CONTROL
-----------------
11.1 CHANGE OF CONTROL. Notwithstanding any other provision of the Plan
to the contrary, in the event of a Change of Control as defined in accordance
with Section 2.1(c) of the Plan, no amendment or modification of the Plan may be
made at any time on or after such Change of Control (1) to reduce or modify a
Participant's Pre-Change of Control Account Balance, (2) to reduce or modify the
Common Stock Accounts' method of calculating earnings, gains, and/or losses on
the Participant's Pre-Change of
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Control Account Balance, or (3) to reduce or modify the Participant's
Participant Deferrals and/or Corporate Contributions to be credited to the
Participant's Plan Account for the applicable Deferral Period. For purposes of
this Section 11.1, the term "Pre-Change of Control Account Balance" shall mean,
with regard to any Plan Participant, the aggregate amount of the Participant's
Participant Deferrals and Corporate Contributions with all earnings, gains, and
losses thereon which are credited to the Participant's Plan Account through the
close of the calendar year in which such Change of Control occurs.
11.2 COMMON STOCK CONVERSION. In the event of a transaction or
occurrence in which the Common Shares of the Corporation are converted into or
exchanged for securities, cash and/or other property as a result of any capital
reorganization or reclassification of the capital stock of the Corporation, or
consolidation or merger of the Corporation with or into another corporation or
entity, or the sale of all or substantially all of its assets to another
corporation or entity, the Corporation shall cause the Common Stock Account to
reflect on a bookkeeping basis the securities, cash and other property that
would have been received in such reorganization, reclassification,
consolidation, merger or sale in an equivalent amount of Common Shares equal to
the balance in the Common Stock Account and, from and after such reorganization,
reclassification, consolidation, merger or sale, the Common Stock Account shall
reflect on a bookkeeping basis all dividends, interest, earnings and losses
attributable to such securities, cash, and other property.
11.3 AMENDMENT IN THE EVENT OF A CHANGE OF CONTROL. On and after a
Change of Control, the provisions of Article II, Article IV, Article V, Article
VI, Article VII, Article VIII, Article IX, Article X, and this Article XI may
not be amended or modified as such Sections and Articles apply with regard to
the Participants' Pre-Change of Control Account Balances.
ARTICLE XII
MISCELLANEOUS PROVISIONS
------------------------
12.1 UNFUNDED PLAN. This Plan is an unfunded plan maintained primarily
to provide deferred compensation benefits for a select group of "management or
highly-compensated employees" within the meaning of Sections 201, 301, and 401
of ERISA, and therefore is exempt from the provisions of Parts 2, 3, and 4 of
Title I of ERISA.
12.2 NO COMMITMENT AS TO EMPLOYMENT. Nothing herein contained shall be
construed as a commitment or agreement upon the part of any Employee 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, rate of compensation, or terms and conditions of employment of any
Employee 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.
12.3 BENEFITS. Nothing in the Plan shall be construed to confer any
right or claim upon any person, firm, or corporation other than the
Participants, former Participants, and Beneficiaries.
12.4 ABSENCE OF LIABILITY. No member of the Board of Directors of the
Corporation or a subsidiary or committee authorized by the Board of Directors,
or any officer of the Corporation or a subsidiary or officer of a subsidiary
shall be liable for any act or action hereunder, whether of commission
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or omission, taken by any other member, or by any officer, agent, or Employee,
except in circumstances involving bad faith or willful misconduct, for anything
done or omitted to be done.
12.5 EXPENSES. The expenses of administration of the Plan shall be paid
by the Corporation.
12.6 PRECEDENT. Except as otherwise specifically agreed to by the
Corporation in writing, 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.
12.7 WITHHOLDING. The Corporation shall withhold any tax which the
Corporation in its discretion deems necessary to be withheld from any payment to
any Participant, former Participant, or Beneficiary hereunder, by reason of any
present or future law.
12.8 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
ERISA, 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.
12.9 PARTIES BOUND. The Plan shall be binding upon the Employers,
Participants, former Participants, and Beneficiaries hereunder, and, as the case
may be, the heirs, executors, administrators, successors, and assigns of each of
them.
12.10 HEADINGS. All headings used in the Plan are for convenience of
reference only and are not part of the substance of the Plan.
12.11 DUTY TO FURNISH INFORMATION. The Corporation shall furnish to
each Participant, former Participant, or 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.
12.12 TRUST FUND. At its discretion, the Corporation may establish one
or more trusts, with such trustees as the Corporation may approve, for the
purpose of providing for the payment of benefits owed under the Plan. Although
such a trust may be irrevocable, in the event of insolvency or bankruptcy of the
Corporation, such assets will be subject to the claims of the Corporation's
general creditors. To the extent any benefits provided under the Plan are paid
from any such trust, the Employer shall have no further obligation to pay them.
If not paid from the trust, such benefits shall remain the obligation of the
Employer.
12.13 VALIDITY. In case any provision of this Plan shall be held
illegal or invalid for any reason, said illegality or invalidity shall not
affect the remaining parts hereof, but this Plan shall be construed and enforced
as if such illegal and invalid provision had never been inserted herein.
12.14 NOTICE. Any notice required or permitted under the Plan shall be
deemed sufficiently provided if such notice is in writing and hand delivered or
sent by registered or certified mail. Such notice shall be deemed given as of
the date of delivery or, if delivery is made by mail, as of the date shown on
the postmark or on the receipt for registration or certification. Mailed notice
to the Corporation shall be directed to the Corporation's address, attention:
KeyCorp Compensation and Benefits Department. Mailed notice to a Participant or
Beneficiary shall be directed to the individual's last known address in the
Employer's records
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12.15 SUCCESSORS. The provisions of this Plan shall bind and inure to
the benefit of each Employer and its successors and assigns. The term successors
as used herein shall include any corporate or other business entity, which
shall, whether by merger, consolidation, purchase or otherwise, acquire all or
substantially all of the business and assets of an Employer.
KEYCORP
By:
--------------------------------
Title:
------------------------------
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