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EMPLOYMENT AGREEMENT
BETWEEN KEYCORP
AND XXXXX XXXXX
THIS EMPLOYMENT AGREEMENT (this "Agreement") is made at
Cleveland, Ohio, this 19th day of July, 1995, between KEYCORP, an Ohio
corporation ("KeyCorp"), and XXXXX XXXXX, 00000 Xxxxxx Xxxxxxxxx, Xxxxxxxxx,
Xxxx 00000 ("Xxxxx").
W I T N E S S E T H:
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WHEREAS, pursuant to an Agreement and Plan of Merger and a
related Supplemental Agreement to Agreement and Plan of Merger, both dated as
of October 1, 1993, by and between Society Corporation, an Ohio corporation
("Society"), and the former KeyCorp, a New York corporation and a bank holding
company ("Old Key"), Society and Old Key agreed to the merger of Old Key into
Society in which Society was the surviving corporation and was renamed KeyCorp;
WHEREAS, KeyCorp and Xxxxx are parties to an employment
agreement, made February 4, 1994 pursuant to which KeyCorp agreed to continue
to employ Xxxxx for a period to end on the date of the 1996 Annual Meeting of
Shareholders of KeyCorp, unless such period should be extended by mutual
agreement; and
WHEREAS, KeyCorp and Xxxxx desire to amend and restate the
February 4, 1994 agreement and to enter into this Agreement pursuant to which
KeyCorp will continue to employ Xxxxx and Xxxxx will continue to serve KeyCorp;
NOW, THEREFORE, KeyCorp and Xxxxx, in consideration of the
promises and mutual covenants herein contained, agree as follows:
1. Definitions.
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1.1 ACOUNTING FIRM. The term "Accounting Firm" means the
independent auditors of KeyCorp for the fiscal year preceding the year
in which the earlier of (i) the Termination Date, or (ii) the year, if
any, in which occurred the first Change of Control occurring after the
Effective Time, 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, KeyCorp 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 KeyCorp or any of its affiliates
(as defined in Rule
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12b-2 promulgated under the Securities Exchange Act of 1934, as
amended).
1.2 SHORT TERM INCENTIVE COMPENSATION AWARD. The term "Short
Term Incentive Compensation Award" with respect to Xxxxx for any year
shall mean the annual incentive compensation award (whether paid in cash,
deferred, or a combination of both) payable to Xxxxx under the Combined
Short Term Incentive Compensation Plan for that year.
1.3 LONG TERM INCENTIVE COMPENSATION AWARD. The term "Long
Term Incentive Compensation Award" with respect to Xxxxx for any year
shall mean the incentive compensation award (whether paid in cash,
deferred, or a combination of both) payable to Xxxxx under the Combined
Long Term Incentive Compensation Plan for that year. For these purposes, an
incentive compensation award payable to Xxxxx under the Combined Long Term
Incentive Compensation Plan with respect to any multi-year period will be
deemed to be "for" the last year of that multi-year period. Thus, for
example, any incentive compensation award payable to Xxxxx under the
Combined Long Term Incentive Compensation Plan with respect to the three
year period comprised of 1990, 1991, and 1992 will be deemed to be "for"
1992 (without regard to the time of payment), the entire award under that
plan for that period will be part of the Long Term Incentive Compensation
Award for 1992, and no part of the award under that plan for that period
will be part of the Long Term Incentive Compensation Award for any year
other than 1992.
1.4 AVERAGE ANNUAL INCENTIVE COMPENSATION. The term "Average
Annual Incentive Compensation" shall mean the sum of
(a) The average of the two highest Short Term Incentive
Compensation Awards payable to Xxxxx for any of the years
during the five-year period ended on the December 31 immediately
preceding the Termination Date; plus
(b) The average of the two highest Long Term Incentive
Compensatin Awards payable to Xxxxx for any of the years during that
five-year period.
1.5 CAUSE. KeyCorp will have "Cause" to terminate Xxxxx at
any time during the Scheduled Term only if:
(a) Xxxxx commits a felony;
(b) Xxxxx commits an act or series of acts of dishonesty in
the course of his employment which are materially inimical to the best
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interests of KeyCorp or a Subsidiary as determined by a vote of a
mojority of all of the members of the Borad of Directors of KeyCorp
and, if the act or acts are capable of being cured, Xxxxx fails to
cure or take all reasonable steps to cure within 30 days of notice
from the Board of Directors to Xxxxx;
(c) Xxxxx continues to violate his obligation under Section
13.1 not to engage in Competitive Activities after the Board of
Directors has advised him in writing to cease those activities; or
(d) Other than for disability, Xxxxx totally abandons and
completely fails to attempt to perform his duties and
responsibilities as specified from time to time by the Board of
Directors of KeyCorp for 90 consecutive days after written notice
from the Board of Directors.
1.6 CHANGE OF CONTROL. A "Change of Control" shall be deemed
to have occurred if at any time or from time to time after the Effective
Time:
(a) There is a report filed on Schedule 13D or Schedule 14D-1
(or any successor schedule, form, or report), each as adopted under
the Securities Exchange Act of 1934, as amended, disclosing the
acquisition of 25% or more of the voting stock of KeyCorp 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
Securities Exchange Act of 1934, as amended);
(b) During (i) any period commencing with the Effective Time
and ending not later than the second anniversary of the
Effective Time, or (ii) any period of 24 consecutive calendar months
commencing on any date after the Effective Time, individuals who at
the beginning of such period constitute the directors of KeyCorp
cease for any reason to constitute at least a majority thereof unless
the election of each new director of KeyCorp was approved or
recommended by the vote of at least two-thirds of the entire
authorized number of members of the Board of Directors immediately
before the time each new director of KeyCorp was elected to the Board;
(c) KeyCorp merges with or into or consolidates with another
corporation and, after giving effect to such merger or
consolidation, less than sixty percent (60%) of the then outstanding
voting securities of the surviving or resulting corporation
represent or were
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issued in exchange for voting securities of KeyCorp outstanding
immediately prior to such merger or consolidation;
(d) 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 KeyCorp; or
(e) The shareholders of KeyCorp shall approve any plan or
proposal for the liquidation or dissolution of KeyCorp.
1.7 COMBINED LONG TERM DISABILITY PLAN. The term "Combined
Long Term Disability Plan" means and includes the KeyCorp Long Term
Disability Plan and the KeyCorp Supplemental Long Term Disability Program,
in both cases as from time to time amended, restated, or otherwise
modified, including any long term disability plan that, after the Effective
Time, succeeds, replaces, or is substituted for either such plan and
includes long term disability benefits or rights provided pursuant to or
under insurance contracts maintained by KeyCorp applicable to senior
executives of KeyCorp.
1.8 COMBINED LONG TERM INCENTIVE COMPENSATION PLAN. The term
"Combined Long Term Incentive Compensation Plan" means and includes the
Society Corporation Long Term Incentive Compensation Plan as from time to
time amended, restated, or otherwise modified, the KeyCorp Long Term Cash
Incentive Compensation Plan as from time to time amended, restated, or
otherwise modified, and any incentive compensation plan that, after the
Effective Time, succeeds, replaces, or is substituted for either such plan
and is applicable to senior executives of KeyCorp.
1.9 COMBINED SHORT TERM INCENTIVE COMPENSATION PLAN. The term
"Combined Short Term Incentive Compensation Plan" means and includes
the Society Corporation Management Incentive Compensation Plan as from time
to time amended, restated, or otherwise modified, the KeyCorp Short Term
Incentive Compensation Plan as from time to time amended, restated, or
otherwise modified, and any incentive compensation plan that, after the
Effective Time, succeeds, replaces, or is substituted for either such plan
and is applicable to senior executives of KeyCorp.
1.10 COMBINED RETIREMENT PLANS. The term "Combined Retirement
Plans" means and includes the KeyCorp Cash Balance Pension Plan, the
KeyCorp Excess Cash Balance Pension Plan, and the Amended and Restated
Society Corporation Supplemental Retirement Plan, in all cases, as from
time to time amended, restated, or otherwise modified, including any plan
that, after the Effective Time, succeeds, replaces, or is substituted for
any such plan, and all retirement plans of any nature (including, without
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limitation, retirement benefits or rights provided under employment
contracts or agreements with Xxxxx or provided in resolutions adopted by
the Board of Directors of KeyCorp or any of its Subsidiaries) maintained by
KeyCorp or any of its Subsidiaries in which Xxxxx was participating prior
to the end of the Scheduled Term. Reference to a "Combined Retirement
Plan," in the singular, shall mean any of the Combined Retirement Plans.
1.11 COMBINED SAVINGS PLANS. The term "Combined Savings
Plans" means and includes the KeyCorp 401(k) Savings Plan and the
KeyCorp Excess 401(k) Savings Plan, in both cases, as from time to time
amended, restated, or otherwise modified, including any plan that, after
the Effective Time, succeeds, replaces, or is substituted for either such
plan, and all salary reduction, savings, profit-sharing, or stock bonus
plans (including, without limitation, all plans involving employer matching
contributions, whether or not constituting a qualified cash or deferred
arrangement under Section 401(k) of the Internal Revenue Code), maintained
by KeyCorp or any of its Subsidiaries in which Xxxxx was participating
prior to the end of the Scheduled Term. Reference to a "Combined Savings
Plan," in the singular, shall mean any of the Combined Savings Plans.
1.12 COMPETITIVE ACTIVITY (BEFORE TERMINATION DATE). Xxxxx
shall be deemed to have engaged in "Competitive Activity" before the
Termination Date if, before the Termination Date, he engages, without the
consent of KeyCorp, in any business or business activity in which KeyCorp
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 KeyCorp or any of its
Subsidiaries).
1.13 COMPETITIVE ACTIVITY (AFTER TERMINATION DATE). Xxxxx
shall be deemed to have engaged in "Competitive Activity" after the
Termination Date if, after the Termination Date and without the consent of
KeyCorp, he serves as a director, officer, or employee of any Financial
Services Company located in a Restricted State or renders services of a
consultative or advisory nature or otherwise to any Financial Services
Company located in a Restricted State.
1.14 DAY. A "day" as used in this Agreement means a calendar
day unless business day is specifically referred to.
1.15 DEMOTION OR REMOVAL. Xxxxx shall be deemed to have been
subjected to "Demotion or Removal" if, during the Schduled Term and
other than by Voluntary Resignation, Xxxxx ceases to be Chief
Administrative Officer of KeyCorp, unless the reason for Xxxxx ceasing to
be Chief Administrative Officer of KeyCorp, is that Xxxxx was promoted to a
higher position, in which case, ceasing to hold the higher position at any
time
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during the Scheduled Term other than by Voluntary Resignation would be
a Demotion or Removal.
1.16 EFFECTIVE TIME. The term "Effective Time" means the
close of business on the date set forth in the first sentence of this
Agreement.
1.17 EQUITY COMPENSATION PLAN. The term "Equity Compensation
Plan" means the KeyCorp Amended and Restated 1991 Equity Compensation
Plan as from time to time amended, restated, or otherwise modified,
including any plan that, after the Effective Time, succeeds, replaces, or
is substituted for that plan and any predecessor or successor thereto, and
any other stock option or equity based plan adopted by Society before the
Effective Time or by KeyCorp after the Effective Time.
1.18 FINANCIAL SERVICES COMPANY. "Financial Services Company"
means a bank, bank holding company, savings and loan association,
building and loan association, savings and loan holding company, insurance
company, investment banking, or securities company, or other financial
services company, other than KeyCorp or any of its Subsidiaries.
1.19 FULL-TIME EMPLOYMENT WITH AN UNAFFILIATED EMPLOYER.
"Full-Time Employment with an Unaffiliated Employer" means full-time
(more than 30 hours per week) employment at either a base selary, hourly
rate, partnership interest, or other form of participation, which will
result in annual compensation to Xxxxx of at least 75% of the annual base
salary of Xxxxx with KeyCorp and its Subsidiaries at the highest rate in
effect at any time under this Agreement, but does not include employment by
(a) a corporation or other firm organized or formed by Xxxxx as a new
business (including, without limitation, a consulting business) after the
Termination Date, or (b) a corporation or other firm the majority of the
equity interests of which were acquired by Xxxxx and/or his immediate
family members after the Termination Date.
1.20 GOOD REASON (THROUGHOUT THE SCHEDULED TERM). Xxxxx shall
have "Good Reason" to terminate his employment under this Agreement if,
at any time during the Scheduled Term, one or more of the events listed in
(a) through (d) of this Section 1.20 occurs and, based on that event, Xxxxx
gives notice of his intention to terminate his employment effective on a
date that is within one year of the occurrence of that event:
(a) Xxxxx is subjected to Demotion or Removal;
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(b) Xxxxx'x base salary is reduced from the level of his base
salary as in effct from time to time (other than in conjunction
with an across the board and equal percentage reduction in the base
salaries of all KeyCorp senior executives);
(c) Xxxxx is excluded from full participation in any benefit
plan or arrangement maintained for senior executives of KeyCorp
generally;
(d) Xxxxx'x principal place of employment for KeyCorp is
relocated outside of the Cleveland metropolitan area or Xxxxx is
otherwise required by KeyCorp to relocate outside the Cleveland
metropolitan area.
1.21 IMPERMISSIBLE. The term "Impermissible," when used in
the context of Xxxxx'x continued coverage by and participation in any
of the Combined Retirement Plans or Combined Savings Plans shall mean that
such a continuation would violate the provisions of any such Plan, would
cause any such Plan to fail to be qualified under Section 401(a) of the
Internal Revenue Code, or would be unlawful, and when used in the context
of Xxxxx'x continued particitpation as an employee in the Equity
Compensation Plan shall mean that such a continuation would violate the
provisions of the plan, would require shareholder approval, or would be
unlawful.
1.22 RESTRICTED STATE. A "Restricted State" means Ohio, New
York, and any other state (including the District of Columbia) in which
KeyCorp and its Subsidiaries (taken as a whole) have at the time business
operations or activities which account for or constitute more than 5% of
the totol assets or total deposits of KeyCorp and its Subsidiaries on a
consolidated basis or more than 5% of the total income of KeyCorp and its
Subsidiaries on a consolidated basis for the then preceding three months.
A Financial Services Company shall be deemed to be located in a Restricted
State if its headquarters are then located in the Restricted State or if it
and its affiliates (taken as a whole) have at the time business operations
or activities in the Restricted State with total assets or total deposits
exceeding 5% of the total assets or total deposits of KeyCorp and its
Subsidiaries on a consolidated basis or which generate gross income during
the then preceding three months of more than 5% of the total income of
KeyCorp and its Subsidiaries on a consolidated basis for that three month
period. The determination of whether a state is a Restricted State shall
be made at the time Xxxxx first serves as a director, officer, or employee
of the Financial Services Company in question or first renders services of
a consultative or advisory nature or otherwise to such Financial Services
Company.
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1.23 SCHEDULED TERM. The term "Scheduled Term" shall mean the
period commencing at the Effective Time and ending on February 28,
1997.
1.24 SUBSIDIARY. A "Subsidiary," as of any time, means any
corporation, bank, partnership, or other entity a majority of the
voting control of which is directly or indirectly owned or controlled at
that time by KeyCorp.
1.25 SUPPLEMENTAL TERM. The term "Supplemental Term" shall
mean the three-year period commencing on March 1, 1997 and ending on
February 29, 2000.
1.26 TERMINATION DATE. The term "Termination Date" means the
last day of the Scheduled Term, or, if earlier, the date on which
Xxxxx'x employment with KeyCorp and its Subsidiaries terminates.
1.27 VOLUNTARY RESIGNATION. A "Voluntary Resignation" shall
have occurred if, during the Scheduled Term, Xxxxx terminates his
employment with KeyCorp and all its Subsidiaries by voluntarily resigning
at his own instance without having been requested to so resign by KeyCorp,
except that any resignation by Xxxxx during the Scheduled Term will not be
deemed to be a Voluntary Resignation if, at the time of that resignation,
Xxxxx had Good Reason to resign.
2. TERM OF FULL-TIME EMPLOYMENT. KeyCorp engages and employs
Xxxxx to render such services in the administration and operation of its
affairs as, from time to time, may be specified by its Board of Directors, for
a period commencing at the Effective Time and ending on February 28, 1997,
unless such period is extended by the mutual agreement of KeyCorp and Xxxxx or
is sooner terminated pursuant to this Agreement.
3. FULL-TIME SERVICES. Throughout the Scheduled Term, Xxxxx
will devote all his time and efforts to the service of KeyCorp, except (a) for
usual vacation periods and reasonable periods of illness, (b) for services as
an officer and director of any Subsidiary, (c) for service as a director or
trustee of other corporations or organizations which are not in competiton with
KeyCorp or any Subsidiary, and (d) for other activities agreed to by KeyCorp.
4. EXECUTIVE OFFICER. Throughout the Scheduled Term, Xxxxx
will be elected and serve as Chief Administrative Officer of KeyCorp, unless he
is promoted to a higher position or positions, in which case he will thereafter
during the remainder of the Scheduled Term be elected and serve in such higher
position or positions.
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5. COMPENSATION. For all services to be rendered by Xxxxx to
KeyCorp under this Agreement during the Scheduled Term, including
services as an officer of KeyCorp or as an officer, director, or member of
any committee of any Subsidiary, or any other services specified by the
Board of Directors of KeyCorp, KeyCorp shall pay to Xxxxx, in equal monthly
or more frequent installments, base salary at a annual rate not lower than
the annual rate of base salary being paid to Xxxxx as of the Effective
Time. In addition to such base salary, Xxxxx shall participate during the
Scheduled Term in any incentive compensation, retirement, savings, stock
option, disability, and other employee benefit and welfare plan or
arrangement allowed or provided by KeyCorp in which he would otherwise be
eligible for participation as an executive officer and employee of KeyCorp,
and, to the extent not provided, KeyCorp shall pay or provide for the
payment of benefits commensurate with Xxxxx'x annual compensation.
6. EFFECT OF FAILURE TO EXTEND PERIOD OF FULL-TIME EMPLOYMENT.
If, at the expiration of the Scheduled Term, Xxxxx'x employment under
this Agreement has not otherwise been terminated and Xxxxx'x full-time
employment with KeyCorp is not extended upon terms acceptable to Xxxxx
(either under this Agreement or under a new agreement), then Xxxxx shall
cease to be an officer of KeyCorp and shall cease to be an officer,
director, or employee of any Subsidiary on the last day of the Scheduled
Term but Xxxxx'x status as an employee of KeyCorp shall continue from that
date and throughout the Supplemental Term on the terms and subject to the
conditions set forth in this Section 6.
6.1 DUTIES, AND RESPONSIBILITIES. During the Supplemental
Term, Xxxxx shall have such duties and responsibilities as KeyCorp and
Xxxxx may mutually agree upon from time to time. KeyCorp shall make
available to Xxxxx an office and secretarial services appropriate to the
scope of the duties and responsibilities being assumed and performed by
Xxxxx from time to time during the Supplemental Term. Xxxxx shall have
complete discretion as to the time or times at which he performs services
on behalf of KeyCorp in response to any request for such services by
KeyCorp.
6.2 COMPENSATION, BENEFITS, AND PERQUISITES. During the
Supplemental Term, Xxxxx shall be entitled to (a) the compensation and
benefits specifically provided for in Sections 6.3, 6.4, 6.5, and 6.6 and
(b) such perquisites as are generally provided by KeyCorp to its senior
executives. Except for the compensation, benefits, and perquisites
referred to in the first sentence of this Section 6.2, Xxxxx shall not be
entitled to any other compensation, benefits, or perquisites from keyCorp
as a result of his continuing employee status during the Supplemental Term.
For purposes of determining Xxxxx'x rights under the Combined Long Term
Incentive Compensation Plan and the Combined Short Term Incentive
Compensation Plan during and after the Supplemental Term, Xxxxx'x
employment with KeyCorp shall be treated as if it had ended on the
Termination Date.
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6.3 CASH COMPENSATION. Throughout the Supplemental Term,
KeyCorp shall pay to Xxxxx semimonthly compensation peyments (one such
payment to be made on the fifteenth and the last day of each calendar
month) throughout the Supplemental Term. The first such semimonthly
payment shall be made for the period commencing on the first day of the
Supplemental Term and ending on the first day during the Supplemental Term
that is either the fifteenth or last day of the calendar month in which the
Supplemental Term begins. The last such semimonthly payment shall be made
for the period commencing with the last date immediately preceding the end
of the Supplemental Term that is either the first or sixteenth day of the
calendar month in which the Supplemental Term ends and ending on the last
day of the Supplemental Term. The amount of each such semimonthly payment
(other than the first and the last such payment) shall be equal to the sum
of (a) one half of one month's base salary of Xxxxx (at the highest rate in
effect at any time during the Scheduled Term), plus (b) one-twenty-fouth
(1/24) of Xxxxx'x Average Annual Incentive Compensation, minus (c) the
amount of any disability benefits received by Xxxxx with respect to the
semimonthly payment period from the Combined Long Term Disability Plan or
any other disability plan the entire cost of which was borne by KeyCorp.
The amount of each of the first and last such semimonthly payments shall be
equal to the amount specified in the immediately preceding sentence
multiplied by a fraction, the numerator of which is the number of days in
the period for which that payment is payable and the denominator of which
is the number of days in the semimonthly period at the end of which that
payment is payable. If Xxxxx dies after becoming entitled to payments
under this Section 6.3 but before the end of the Supplemental Term, any
payments due after his death shall be made to his estate or, if Xxxxx shall
so direct to KeyCorp in writing, to his wife or to a trust created by
Xxxxx. Xxxxx'x right to direct payment of such payments following his
death may be exercised by him at any time and from time to time during his
life, and any such direction made subsequent to an earlier one shall revoke
and supersede such earlier direction. The amounts payable to Xxxxx, his
wife, or any trust created by Xxxxx for any month under this Section 6.3
shalll be reduced, but not below zero, by the full amount of the payments,
if any, received by any person (including, without limitation, Xxxxx, his
wife, and any trust created by Xxxxx) for that month from all Combined
Retirement Plans on account of Xxxxx.
6.4 MEDICAL AND LIFE INSURANCE BENEFITS. KeyCorp shall
arrange to provide Xxxxx, throughout the period beginning on the first
day of the Supplemental Term and ending on the earlier of (a) the last day
of the Supplemental Term, or (b) the first date on which Xxxxx accepts
Full-Time Employment with an Unaffiliated Employer, with medical benefits
(including, if applicable, dental) and group term life insurance benefits,
in all cases at substantially the same level of coverage, and subject to
the same (by dollar
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amount) employee contribution requirement (if any), as those which
Xxxxx was receiving or entitled to receive as an officer of KeyCorp on the
last day of the Scheduled Term.
6.5 RETIREMENT AND SAVINGS PLAN PARTICIPATION. For the period
beginning on the first day of the Supplemental Term and ending on the
earlier of (a) the last day of the Supplemental Term, or (b) the date of
Xxxxx'x death (the "Section 6.5 Benefit Period"), KeyCorp shall cause Xxxxx
to continue to be covered by and to participate in all Combined Retirement
Plans and Combined Savings Plans that he was entitled to be covered by and
participating in as an officer of KeyCorp on the last day of the Scheduled
Term in the same manner and to the same extent as if Xxxxx continued in the
full-time employ of KeyCorp throughout the Section 6.5 Benefit Period,
except where such coverage or participation is impermissible. For these
purposes: (i) the entire Section 6.5 Benefit Period shall be included in
determining Xxxxx'x years of service, (ii) amounts received by Xxxxx under
clause (a) of Section 6.3 shall be deemed to be base salary received by
Xxxxx during the Section 6.5 Benefit Period, and (iii) amounts received by
Xxxxx under clause (b) of Section 6.3 shall be deemed to be incentive
compensation received by Xxxxx during the Section 6.5 Benefit Period and
shall, if relevant, be allocated between the Combined Short Term Incentive
Compensation Plan and the Combined Long Term Incentive Compensation Plan
based on the degree to which awards under each of those plans were taken
into account in determining Average Annual Incentive Compensation. If, at
any time during the Section 6.5 Benefit Period, KeyCorp determines in good
faith that continuing Xxxxx'x coverage by and participation in any of the
Combined Retirement Plans or any of the Combined Savings Plans during the
Supplemental Term is impermissible, Xxxxx shall not be covered by and
participate in such affected Plan or Plans during the Section 6.5 Benefit
Period, but KeyCorp shall, from time to time both during and after the
Section 6.5 Benefit Period, provide to Xxxxx under this Agreement
payments, benefits, and opportunities that, when added to the payments,
benefits, and opportunities available and payable to Xxxxx under the
Combined Retirement Plans and the Combined Savings Plans put Xxxxx in the
same position that he would have been in had he continued to be a full-time
employee of KeyCorp and a participant in all of the Combined Retirement
Plans and the Combined Savings Plans throughout the Section 6.5 Benefit
Period.
6.6 RIGHTS UNDER EQUITY COMPENSATION PLAN AND STOCK OPTIONS.
For purposes of determining Xxxxx'x rights under the Equity Compensation
Plan and under any stock options granted to Xxxxx under the Equity
Compensation Plan, Xxxxx shall be treated as remaining in the employ of
KeyCorp throughout the Section 6.5 Benefit Period.
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6.7 RIGHTS NOT AFFECTED BY ANY TERMINATION. If Xxxxx becomes
entitled to payments and benefits under this Section 6, his rights to
receive payments, benefits, and opportunities shall continue as and to
the extent provided in this Section 6 notwithstanding any subsequent
termination of Xxxxx'x employment relationship with KeyCorp, whether
that subsequent termination is with or without cause, voluntary or
involuntary, on account of disability, or otherwise. This Section 6.7
shall not override Section 13.2.
7. EFFECT OF GOOD REASON (IN GENERAL). If, at any time before
the expiration of the Scheduled Term, Xxxxx has Good Reason to
terminate his employment, Xxxxx shall have the right, exercisable at any
time during the period beginning on the date the event constituting any
particular instance of Good Reason first occurs and ending on the earlier
of (a) the first anniversary of that date, or (b) the end of the Scheduled
Term, to terminate his employment with KeyCorp by giving written notice of
such election to KeyCorp. Any such termination by Xxxxx during that period
shall be treated for all purposes of this Agreement as a termination of
Xxxxx'x employment by KeyCorp without Cause effective as of the date on
which Xxxxx delivers notice of his election under this Section 7 to
KeyCorp.
8. EFFECT OF TERMINATION WITHOUT CAUSE. If, at any time
before the expiration of the Scheduled Term, KeyCorp terminates Xxxxx'x
employment without Cause, KeyCorp shall pay and provide the following
amounts and benefits to Xxxxx:
8.1 COMPENSATION CONTINUATION PAYMENTS. KeyCorp shall pay to
Xxxxx semimonthly compensation continuation payments (one such
payment to be made on the fifteenth and the last day of each calendar
month) throughout the remainder of the Scheduled Term and thereafter
throughout the Supplemental Term. The first such semimonthly payment
shall be made for the period commencing on the day after the
Termination Date and ending on the first day after the Termination
Date that is either the fifteenth or last day of the calendar month in
which the Termination Date occurs. The last such semimonthly payment
shall be made for the period commencing with the last date immediately
preceding the end of the Supplemental Term that is either the first or
sixteenth day of the calendar month in which the Supplemental Term
ends and ending on the last day of the Supplemental Term. The amount
of each such semimonthly payment (other than the first and the last
such payment) shall be equal to the sum of (a) one half of one month's
base salary of Xxxxx (at the highest rate in effect at any time during
the two year period ending on the Termination Date), plus (b)
one-twenty-fourth (1/24) of Xxxxx'x Average Annual Incentive
Compensation. The amount of each of the first and last such
semimonthly payments shall be equal to the amount specified in the
immediately preceding sentence multiplied by a fraction, the
numerator of which is the
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number of days in the period for which that payment is payable and the
denominator of which is the number of days in the semimonthly period at the
end of which that payment is payable. If Xxxxx dies after becoming entitled
to payments under this Section 8.1 but before the end of the Supplemental
Term, any payments due after his death shall be made to his estate or, if
Xxxxx shall so direct of KeyCorp in writing, to his wife or to a trust
created by Xxxxx. Xxxxx'x right to direct payment of such payments
following his death may be exercised by him at any time and from time to
time during his life, and any such direction made subsequent to an earlier
one shall revoke and supersede such earlier direction. The amounts
payable to Xxxxx, his wife, or any trust created by Xxxxx for any month
under this Section 8.1 shall be reduced, but not below zero, by the full
amount of the payments, if any, received by any person (including, without
limitation, Xxxxx, his wife, and any trust created by Xxxxx) for that
month from all Combined Retirement Plans on account of Xxxxx.
8.2 MEDICAL AND LIFE INSURANCE BENEFITS. KeyCorp shall
arrange to provide Xxxxx, throughout the period beginning on the
Termination Date and ending on the earlier of (a) the last day of the
Supplemental Term, or (b) the first date on which Xxxxx accepts Full-Time
Employment with an Unaffiliated Employer, with medical benefits (including,
if applicable, dental) and group term life insurance benefits, in all cases
at substantially the same level of coverage, and subject to the same (by
dollar amount) employee contribution requirement (if any), as those which
Xxxxx was receiving or entitled to receive as an officer of KeyCorp on the
Termination Date.
8.3 CONTRACTUAL SUPPLEMENT TO RETIREMENT AND SAVINGS PLAN
BENEFITS. KeyCorp shall, from time to time both during and after the
period beginning on the Termination Date and ending on the earlier of (a)
the last day of the Supplemental Term, or (b) the date of Xxxxx'x death
(the "Section 8.3 Benefit Period"), provide to Xxxxx, under this Agreement,
paymets, benefits, and opportunities that, when added to the payments,
benefits, and opportunities available and payable to Xxxxx under the
Combined Retirement Plans and the Combined Savings Plans, put Xxxxx in
the same position that he would have been in had he continued to be a
full-time employee of KeyCorp and a participant in all of the Combined
Retirement Plans and the Combined Savings Plans throughout the Section 8.3
Benefit Period. In determining the position that Xxxxx would have been in
had he continued to be a full-time employee of KeyCorp and a participant
in all of the Combined Retirement Plans and the Combined Savings Plans
throughout the Section 8.3 Benefit Period: (i) the entire Section 8.3
Benefit Period shall be included in determining Xxxxx'x years of service,
(ii) amount's received by Xxxxx under clause (a) of Section 8.1 shall be
deemed to be base salary received by Xxxxx during the Section 8.3 Benefit
Period, and (iii) amounts received by Xxxxx under clause (b) of Section
8.1 shall be deemed to be incentive
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compensation received by Xxxxx during the Section 8.3 Benefit Period
and shall, if relevant, be allocated between the Combined Short Term
Incentive Compensation Plan and the Combined Long Term Incentive
Compensation Plan based on the degree to which awards under each of those
plans were taken into account in determining Average Annual Incentive
Compensation.
8.4 RIGHTS UNDER EQUITY COMPENSATION PLAN AND STOCK OPTIONS.
(a) For purposes of determining Xxxxx'x rights under the Equity
Compaensation Plan and under any stock options granted to Xxxxx under
the Equity Compensation Plan, Xxxxx shall be treated as remaining in
the employ of KeyCorp throughout the Section 8.3 Benefit Period,
unless that treatment is impermissible.
(b) If and to the extent the treatment prescribed in paragraph
(a), above, is impermissible, and the treatment prescribed in this
paragraph (b) does not conflict with the treatment for accounting
purposes of any transaction entered into by KeyCorp as a pooling of
interests, KeyCorp shall provide to Xxxxx from time to time, both
during and after the Section 8.3 Benefit Period, payments, benefits,
and opportunities that, when added to the payments, benefits, and
opportunities available and payable to Xxxxx under the Equity
Compensation Plan and options granted thereunder put Xxxxx in the same
position that he would have been regarding payments, benefits, and
opportunities under the Equity Compensation Plan and options granted
thereunder, if he had continued to be actively employed by KeyCorp
throughout the Section 8.3 Benefit Period.
(c) If and to the extent the treatment prescribed in paragraph
(a), above, is impermissible, and the treatment prescribed in
paragraph (b), above, conflicts with the treatment for accounting
purposes of any transaction entered into by KeyCorp as a pooling of
interests, Xxxxx'x rights under the Equity Compensation Plan and under
any stock options granted to Xxxxx under the Equity Compensation Plan
shall be as provided in that plan and under those stock options
without regard to this Section 8.4.
9. EFFECT OF DEATH WHILE IN EMPLOY OF KEYCORP. If Xxxxx dies
during the Scheduled Term while employed by KeyCorp, (a) KeyCorp shall pay to
Xxxxx'x estate any unpaid base salary due or to become due to Xxxxx with
respect to any period ending before his death, (b) if Xxxxx is survived by his
wife, KeyCorp shall pay the monthly survivor pension benefit provided for in
Section 41, (c) KeyCorp shall have no further obligations to Xxxxx for base
salary for any period after Xxxxx'x death, and (d) KeyCorp shall pay such
incentive compensation as is provided for under the Combined Short Term
Incentive Compensation Plan and the
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Combined Long Term Incentive Compensation Plan to Xxxxx'x estate or as
otherwise provided for under such plans.
10. EFFECT OF DISABILITY WHILE IN EMPLOY OF KEYCORP. If
during the Scheduled Term and while Xxxxx is employed by KeyCorp, he
becomes disabled, by reason of physical or mental impairment, to such an
extent that he is unable to perform his duties under this agreement:
10.1 KeyCorp may relieve Xxxxx of his duties under this
Agreement for as long as Xxxxx is so disabled.
10.2 KeyCorp shall pay to Xxxxx all base salary and incentive
compensation to which he would have been entitled under this
Agreement and under the Combined Short Term Incentive Compensation
Plan and the Combined Long Term Incentive Compensation Plan had he
continued to be actively employed by KeyCorp to the earliest of (a)
the first date on which he is no longer so disabled to such an extent
that he is unable to perform his duties under this Agreement, (b) the
date on which he becomes eligible for payment of long term disability
benefits under the Combined Long Term Disability Benefit Plan, (c) the
date of his death, or (d) the last day of the Scheduled Term.
10.3 If and when Xxxxx becomes eligible for payment of long
term disability benefits under the Combined Long Term
Disability Benefit Plan, KeyCorp shall pay to Xxxxx semimonthly
compensation continuation payments (one such payment to be made on the
fifteenth and the last day of each calendar month) throughout the
period (the "Section 10.3 Benefit Period") beginning with the date on
which Xxxxx becomes so eligible and ending on the earliest of (a) the
first date on which he is no longer so disabled to such an extent that
he is unable to perform his duties under this Agreement, (b) the date
of his death, or (c) the last day of the Scheduled Term. The first
such semimonthly payment shall be made for the period commencing on
the first day of the Section 10.3 Benefit Period and ending on the
first day after that date that is either the fifteenth or last day of
the calendar month in which the Section 10.3 Benefit Period begins.
The last such semimonthly payment shall be made for the period
commencing with the last date within the Section 10.3 Benefit Period
that is either the first or sixteenth day of the calendar month in
which the Section 10.3 Benefit Period ends and ending on the last day
of the Section 10.3 Benefit Period. The amount of each such
semimonthly payment (other than the first and the last such payment)
shall be equal to the sum of (i) one half of one month's base salary
of Xxxxx (at the highest rate in effect at any time during the two
year period ending on the last day before the date of the payment on
which Xxxxx performed services for KeyCorp), plus (ii)
one-twenty-fourth (1/24) of Xxxxx'x Average Annual Incentive
Compensation (determined as though the
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last day before the date of the payment on which Xxxxx performed
services for KeyCorp was the Termination Date). The amount of each
of the first and last such semimonthly payments shall be equal to
the amount specified in the immediately preceding sentence
multiplied by a fraction, the numerator of which is the number of days
in the period for which that payment is payable and the denominator of
which is the number of days in the semimonthly period at the end of
which that payment is payable.
10.4 The amounts payable to Xxxxx for any month under this
Section 10 shall be reduced, but not below zero, by the full amount of
the payments, if any, received by Xxxxx for that month (a) from all
Combined Retirement Plans, (b) from the Combined Long Term Disability
Plan, and (c) from any other disability plan the entire cost of which
is borne by KeyCorp.
10.5 For purposes of entitlement to a death benefit under
Section 9 or Section 14 of this Agreement, (a) Xxxxx will be treated
as being employed by KeyCorp throughout any portion of the Scheduled
Term during which he is entitled to receive payments from KeyCorp
under either of Sections 10.2 or 10.3 and (b) Xxxxx will not be
treated as being employed by KeyCorp at any time during the
Supplemental Term.
10.6 For purposes of all retirement, savings, stock option,
disability, and other employee benefit and welfare plans or
arrangements allowed or provided by KeyCorp to officers, Xxxxx shall
be treated in the same manner that KeyCorp treats other officers who
become disabled.
10.7 If (a) Xxxxx becomes disabled during the Scheduled Term,
(b) survives through the end of the Scheduled Term, and (b) remains
disabled on the last day of the Scheduled Term, he shall be entitled
to all of the payments, benefits, and perquisites provided for in
Section 6 during the Supplemental Term in the same manner and to the
same extent as if his full-time employment had continued through the
end of the Scheduled Term and KeyCorp and Xxxxx had thereafter failed
to extend the period of his full-time employment.
10.8 Except as provided in this Section 10, KeyCorp shall have
no further obligations to Xxxxx for base salary or incentive
compensation for any period during which Xxxxx is so disabled to such
an extent that he is unable to perform his duties under this
Agreement.
11. NO SET-OFF OR MITIGATION. The compensation and benefits
to be paid and provided by KeyCorp to Xxxxx under this Agreement are not to be
subject to any set-off against any claim by KeyCorp against Xxxxx. Xxxxx will
not be required to mitigate any amounts payable by KeyCorp to Xxxxx under any of
the terms of this Agreement and, except to the limited extent provided herein
with
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respect to welfare benefit plans, no payment or benefit to Xxxxx from any other
source will reduce the obligation of KeyCorp to make payment to and provide
benefits to Xxxxx during the Supplemental Term or after termination of his
employment as provided in this Agreement.
12. PAYMENTS ARE IN LIEU OF SEVERANCE PAYMENTS. If Xxxxx
becomes entitled to receive any payments under this Agreement during the
Supplemental Term or as a result of termination of his employment, those
payments shall be in lieu of any and all other claims or rights that Xxxxx may
have for severance, separation, and/or salary continuation pay.
13. LIMITATIONS ON COMPETITION
13.1 Xxxxx shall not engage in any Competitive Activity during
the period of his employment with KeyCorp.
13.2 Xxxxx shall not engage in any Competitive Activity at any
time while he is receiving payments under either of Sections 6.3 or
8.1. If Xxxxx continues to violate the restriction set forth in this
Section 13.2 after the Board of Directors has advised him in writing
to cease those activities and that violation is material, KeyCorp
shall thereupon be relieved of all further obligations to make payments
and provide benefits to Xxxxx under any of the provisions contained in
any of Sections 6 through 8. Xxxxx shall not be required to repay to
KeyCorp any payment received by him before he began to engage in any
such Competitive Activity. If a Financial Services Company has
business operations or activities in multiple states some of which are
Restricted States and some of which are not Restricted States, KeyCorp
will not unreasonably withhold its consent after the Termination Date
to Xxxxx serving as an officer, employee, or consultant of such
Financial Services Company if (a) Xxxxx'x duties and responsibilities
for such Financial Services Company are restricted to a specific
geographic region which does not include a Restricted State, and (b)
none of Xxxxx'x services or activities is performed in or relate to a
Restricted State.
14. DEATH BENEFIT FOR SURVIVING WIFE. If Xxxxx dies during
the Scheduled Term and while employed by KeyCorp leaving his wife surviving
him, KeyCorp shall pay to Xxxxx'x wife or, if Xxxxx shall so direct to KeyCorp
in writing, to a trust in which his wife is one of the beneficiaries or to his
estate, a monthly survivor pension equal to the excess, if any, of (a)
one-third of the monthly amount Xxxxx or his wife or his estate would receive
under Section 8.1 if Xxxxx had been terminated without Cause by KeyCorp on the
day before the date of his death (i.e., an amount equal to one-third of the
sum of two semimonthly payments calculated as provided in the fourth sentence of
Section 8.1), over (b) the aggregate monthly survivor benefits, if any, under
all Combined Retirement Plans received by Xxxxx'x wife. The monthly survivor
payments shall be paid at the rate of one per month
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commencing with the month following the month in which Xxxxx'x death occurs and
continuing through the month in which Xxxxx'x wife dies. Xxxxx'x rights to
direct payment of such monthly survivor pension following his death may be
exercised by him at any time and from time to time during his life, and any
such direction made subsequent to an earlier one shall revoke and supersede
such earlier direction.
15. STOCK OPTIONS. If a Change of Control occurs while Xxxxx
is employed by KeyCorp under this Agreement, any and all stock options to
purchase Common Shares of KeyCorp then held by him that are not then vested or
exercisable in full shall automatically and immediately become vested and
exercisable in full; provided, however, if the operation of this Section would
conflict with or jeopardize, in the judgment of the independent accountants of
KeyCorp, the treatment for accounting purposes of any transaction involving
KeyCorp as a pooling of interests, this Section shall be inoperative and have
no effect. All stock options to purchase Common Shares held by Xxxxx on the
date of this Agreement are hereby amended by adding the foregoing sentence and
any stock options to purchase Common Shares hereafter granted to Xxxxx shall be
deemed to contain the foregoing sentence. This Section shall not apply to any
stock options to purchase Common Shares granted to Xxxxx within the six month
period ending with the date immediately preceding the date on which occurs the
Effective Time.
16. ADDITIONAL RETIREMENT BENEFIT. Following the termination
of Xxxxx'x employment with KeyCorp under any circumstances other than a
termination during the Scheduled Term by KeyCorp for Cause, KeyCorp will pay to
Xxxxx an annual pension equal to the aggregate of (a) the amount of the
retirement benefit Xxxxx would be entitled to receive under the KeyCorp Cash
Balance Pension Plan (the "Pension Plan"), as in effect on the Termination
Date, without regard to the limitations of Sections 415 and 401(a)(17) of the
Internal Revenue Code, as if Xxxxx had commenced employment with Society on
June 20, 1973, and (b) the amount of annual supplemental retirement benefit, if
any, which Xxxxx would be entitled to receive under the Ammended and Restated
Society Corporation Supplemental Retirement Plan, as in effect on the
Termination Date, as if Xxxxx had commenced employment with Society on June 20,
1973, less the aggregate annual benefits received by Xxxxx under all Combined
Retirement Plans (including, as an "annual benefit received by Xxxxx" for these
purposes, the actuarial equivalent, in annaul terms, of any lump sum benefit
received by Xxxxx under any of the Combined Retirement Plans). The provisions
of the Pension Plan with respect to optional methods of payment (other than
payment of the full benefit in a single lump sum), the commencement and
duration of payments, and reemployment shall be applicable to the annual
pension payable pursuant to this Section 16. As used in this Section 16, the
terms "Pension Plan" and "Amended and Restated Society Corporation Supplemental
Retirement Plan" mean and include, in each such case, such plan as currently in
effect and as from time to
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time until the Termination Date amended, restated, or otherwise modified,
including any plan hereafter succeeding, replacing, or being substituted for
such plan. Following the termination of Xxxxx'x employment during the
Scheduled Term by KeyCorp for Cause, KeyCorp will pay to Xxxxx and/or to his
beneficiary such amounts as Xxxxx and/or his beneficiary is entitled to receive
under the Resolution adopted by the Board of Directors of Central National Bank
of Cleveland on November 21, 1984, relating to survivor benefits and amount of
retirement income and payments, a copy of which is attached to this Agreement
(the "Central Board Resolution"). Except as provided in the immediately
preceding sentence, no amount will be paid to Xxxxx under the Central Board
Resolution.
17. NO REDUCTION IN RETIREMENT BENEFITS FOR EARLY COMMENCEMENT
OF BENEFITS IN CERTAIN CIRCUMSTANCES. If Xxxxx becomes entitled to benefits
under either of Sections 6.5 or 8.3, and elects to commence receipt of benefits
under the Combined Retirement Plans after the end of the Supplemental Term but
before he attains age 65, he shall be entitled to receive, in the aggregate,
benefits under the Combined Retirement Plans, under Section 6.5 or 8.3 (as the
case may be), under Section 16, and under this Section 17 that equal the
amounts he would have received, in the aggregate, under the Combined Retirement
Plans, under Section 6.5 or 8.3 (as the case may be), and under Section 16 if
the benefits under those Plans and Sections had been determined without any
reduction on account of commencement of benefits before Xxxxx'x attainment of
age 65.
18. INDEMNIFICATION. KeyCorp shall indemnify Xxxxx, to the
full extent permitted or authorized by the Ohio General Corporation Law as it
may from time to time be amended, if Xxxxx is made or threatened to be made a
party to any threatened, pending, or completed action, suit, or proceeding,
whether civil, criminal, administrative, or investigative, by reason of the
fact that Xxxxx is or was a director, officer, or employee of KeyCorp or any
Subsidiary, or is or was serving at the request of KeyCorp or any Subsidiary as
a director, trustee, officer, or employee of a bank, corporation, partnership,
joint venture, trust, or other enterprise. The indemnification provided by
this Section 18 shall not be deemed exclusive of any other rights to which
Xxxxx may be entitled under the articles of incorporation or the regulations of
KeyCorp or of any Subsidiary, or any agreement, vote of shareholders or
disinterested directors, or otherwise, both as to action in Xxxxx'x official
capacity and as to action in another capacity while holding such office, and
shall continue as to Xxxxx after Xxxxx has ceased to be a director, trustee,
officer, or employee and shall inure to the benefit of the heirs, executors,
and administrators of Xxxxx.
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19. REIMBURSEMENT OF CERTAIN EXPENSES.
19.1 KeyCorp shall pay, as incurred, all expenses, including
the reasonable fees of counsel engaged by Xxxxx, of defending any
action brought to have this Agreement declared invalid or unenforceable.
19.2 KeyCorp shall pay, as incurred, all expenses, including
the reasonable fees of counsel engaged by Xxxxx, of prosecuting any
action to compel KeyCorp to comply with the terms of this Agreement upon
receipt from Xxxxx of an undertaking to repay KeyCorp for such expenses if,
and only if, it is ultimately determined by a court of competent
jurisdiction that Xxxxx had no reasonable grounds for bringing that action
(which determination need not be made simply because Xxxxx fails to succeed
in the action).
19.3 Expenses (including attorney's fees) incurred by Xxxxx in
defending any action, suit, or proceeding commenced or threatened
against Xxxxx for any action or failure to act as an employee, officer, or
director of KeyCorp or any Subsidiary shall be paid by KeyCorp, as they are
incurred, in advance of final disposition of the action, suit, or
proceeding upon receipt of an undertaking by or on behalf of Xxxxx in which
he agrees to reasonably cooperate with KeyCorp or the Subsidiary, as the
case may be, concerning the action, suit, or proceeding, and (a) if the
action, suit, or proceeding is commenced or threatened against Xxxxx for
any action or failure to act as a director, to repay the amount if it is
proved by clear and convincing evidence in a court of competent
jurisdiction that his action or failure to act involved an act or omission
undertaken with deliberate intent to cause injury to KeyCorp or a
Subsidiary or (b) if the action, suit, or proceeding is commenced or
threatened against Xxxxx for any action or failure to act as an officer or
employee, to repay the amount if it is ultimately determined that he is not
entitled to be indemnified. The obligation of KeyCorp to advance expenses
provided for in this Section 19.3 shall not be deemed exclusive of any
other rights to which Xxxxx may be entitled under the articles of
incorporation or the regulations of KeyCorp or of any Subsidiary, or any
agreement, vote of shareholders or disinterested directors, or otherwise.
20. TERMINATION OF CAUSE. In the event Xxxxx'x employment is
terminated during the Scheduled Term by KeyCorp for Cause, KeyCorp may, by
giving written notice to Xxxxx, terminate this Agreement and all its
obligations remaining to be performed or observed by it under this Agreement
other than KeyCorp's obligation to satisfy the terms of the Central Board
Resolution referred to in the penultimate sentence of Section 16.
21. EXCESS PARACHUTE PAYMENT REDUCTION. Anything in this
Agreement to the contrary notwithstanding, in the event it shall be determined
that any payment or distribution by KeyCorp or any of its Subsidiaries to or
for the
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benefit of Xxxxx (whether paid or payable or distributed or distributable
pursuant to the terms of this Agreement or otherwise) (a "Payment") would be
nondeductible by KeyCorp 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 Xxxxx 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 be an amount expressed in present value
which maximizes the aggregate present value of Agreement Payments without
causing any Payment to be nondeductible by KeyCorp because of Section 280G of
the Internal Revenue Code and applicable regulations promulgated thereunder.
For purposes of this Section 21, 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 21 shall be made by the Accounting Firm which shall provide
detailed supporting calculations both to KeyCorp and Xxxxx within 30 days after
the Termination Date or such earlier time as is requested by KeyCorp. KeyCorp
and Xxxxx shall cooperate with each other and the Accounting Firm and will
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 KeyCorp and Xxxxx. Xxxxx shall determine which of the
Agreement Payments (or, at the election of Xxxxx, other Payments) shall be
eliminated or reduced consistent with the requirements of this Section 21,
provided that, if Xxxxx does not make such determination within 20 days of the
receipt of the calculations made by the Accounting Firm, KeyCorp shall elect
which of the Agreement Payments shall be eliminated or reduced consistent with
the requirements of this Section 21 and shall notify Xxxxx 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 KeyCorp which should not have
been made ("Overpayment") or that additional Agreement Payments will not be
made by KeyCorp which could have been made ("Underpayment"), in each case,
consistent with the calculations required to be made hereunder. In the event
that 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 Xxxxx which Xxxxx shall repay to
KeyCorp 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 Xxxxx to
KeyCorp (or if paid by Xxxxx to Keycorp, such payment shall be returned to
Xxxxx) 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. In the
event that the Accounting Firm or a court of competent jurisdiction (in a final
judgment as to which the time for appeal has
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lapsed or no appeal is available) determines at any time that an Underpayment
has occurred, any such Underpayment shall be promptly paid by KeyCorp to or for
the benefit of Xxxxx 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.
22. DEFERRAL OF PAYMENT OF COMPENSATION UNDER CERTAIN
CIRCUMSTANCES.
22.1 SECTION 162(M). For purposes of this Section 22, the term
"Section 162(m)" shall mean Section 162(m) of the Internal Revenue Code
(which, as amended by the Revenue Reconciliation Act of 1993, prescribes
rules disallowing deductions for certain "applicable employee remuneration"
to any of five specified "covered employees" of a publicly 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.
22.2 DEFFERRAL. Except as otherwise porvided in either of
Section 22.3 or Section 22.4, below, if KeyCorp 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 Xxxxx
is a participant) otherwise payable to Xxxxx under this Agreement at any
particular time (the "Scheduled Time"),
(a) would not be deductible by KeyCorp if paid at the Scheduled
Time by reason of the disallowance rules of Section 162(m), and
(b) would be deductible by KeyCorp if defered until and paid
during a later year,
that amount of compensation shall be deferred until, and paid during,
the year that is determined by KeyCorp 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 Section162(m). If KeyCorp 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 22.5, below) can be paid without disallowance of the
deduction, that portion that can be so paid shall be paid by KeyCorp
during that year and the remainder, except as otherwise provided in
Section 22.3 or Section 22.4, below, shall continue to be deferred
until a later year.
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22.3 EARLY PAYOUT OF DEFERRED AMOUNT IF DEFERRAL IS DETERMINED
TO BE INEFFECTIVE. If any amount of compensation is deferred under
Section 22.2 with the expectation that it will be deductible by KeyCorp if
paid in a later year and KeyCorp later determines that the compensation
will not be deductible by KeyCorp 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 KeyCorp shall pay that compensation to Xxxxx.
22.4 PAYOUT FOLLOWING TERMINATION OF EMPLOYMENT IN ALL EVENTS.
On April 15 of the year immediately following the year in which Xxxxx
ceases to be employed as an officer by KeyCorp, KeyCorp shall pay to Xxxxx,
in a single lump sum, all amounts of compensation that have been deferred
pursuant to this Section 22 and have not previously been paid out so that,
as of the close of business on that date, no amount of compensation
will remain deferred under this Section 22 whether or not KeyCorp is
entitled to a deduction with respect to the payment of that compensation.
22.5 INTEREST ON DEFERRED AMOUNTS. Upon payment of any
amounts of compensation deferred for any period of time pursuant to
this Section 22, KeyCorp shall pay to Xxxxx 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 22 through the date on which that
compensation is paid at a variable rate equal, in each calendar quarter, to
the highest annual rate paid by Society National Bank on new XXX
certificates of deposit issued in Cuyahoga County, Ohio on the first
business day of that calendar quarter, compounded quarterly.
22.6 MISCELLANEOUS. Xxxxx'x rights with respect to payment
during his lifetime of any compensation deferred under this Section 22
shall not be subject to assignment. If Xxxxx dies before all compensation
deferred under this Section 22 has been paid to him, any such unpaid
compensation shall be paid, at the same time it would have been paid if
Xxxxx had not died but had merely ceased to be an employee of KeyCorp on
the date of his death (or, if earlier, on the last date he actually was an
employee of KeyCorp), to his estate or, if Xxxxx shall so direct to KeyCorp
in writing, to his wife or to a trust created by Xxxxx. The obligation of
KeyCorp to make payments of compensation deferred pursuant to this Section
22 constitutes the unsecured promise of KeyCorp to make payments from its
general assets as and when due and neither Xxxxx nor any person claiming
through him shall have, as of a result of this Section 22, any lien or
claim on any assets of KeyCorp that is superior to the claims of the
general creditors of KeyCorp.
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23. MERGER OR TRANSFER OF ASSETS OR STOCK OF KEYCORP. KeyCorp
will not enter into any transaction in which it (or any corporation acquiring
all or substantially all of KeyCorp's assets in the transaction) will become
the direct or indirect subsidiary of any other corporation unless the
corporation that is to be the ultimate parent corporation of KeyCorp (or of the
corporation acquiring all or substantially all of KeyCorp's assets in the
transaction) shall assume this Agreement in a signed writing and deliver a copy
thereof to Xxxxx. KeyCorp will not otherwise consolidate with or merge into
any other corporation, or transfer all or substantially all of its assets to
another corporation, unless the corporation with or into which KeyCorp is
merged, or the corporation to which substantially all of KeyCorp's assets are
being transferred, shall assume this Agreement in a signed writing and deliver
a copy thereof to Xxxxx. Upon any such assumption, the corporation assuming
this Agreement (the "Successor Corporation") shall become obligated to perform
the obligations of KeyCorp under this Agreement, and the term "KeyCorp" as used
in this Agreement (including, without limitation, as used in Section 1.15)
shall be deemed to refer to the Successor Corporation.
24. NOTICES. 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 in person (to the Secretary of KeyCorp in the
case of notices to KeyCorp and to Xxxxx in the case of notices to Xxxxx) or
mailed by United States registered mail, return receipt requested, postage
prepaid, as follows;
If to KeyCorp:
KeyCorp
000 Xxxxxx Xxxxxx
Xxxxxxxxx, Xxxx 00000-0000
Attention: Secretary
If to Xxxxx:
Xx. Xxxxx Xxxxx
00000 Xxxxxx Xxxxxxxxx
Xxxxxxxxx, Xxxx 00000
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.
25. 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.
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26. MISCELLANEOUS. 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 Xxxxx and KeyCorp. 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 be governed by and construed
in accordance with the laws of the State of Ohio.
27. PRIOR AGREEMENT. This Agreement amends, restates, and
extends the employment agreement between Xxxxx and Society Corporation made
February 4, 1994, and shall become effective at the Effective Time. At
such time, the provisions of this Agreement shall supersede the provisions of
the February 4, 1994 agreement and that agreement and all prior agreements on
the same subject matter shall hereafter be of no further force or effect.
KEYCORP
BY /S/ Xxxxxx X. Xxxxxxxxx
---------------------------
Xxxxxx X. Xxxxxxxxx,
President
/S/ XXXXX XXXXX
---------------------------
XXXXX XXXXX
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