KEYCORP
AUTOMATIC DEFERRAL PLAN
January 1, 2005 Restatement
The KeyCorp
Automatic Deferral Plan (“Plan”), as originally
established January 1, 1999, is hereby amended and rested in
its entirety to be effective as of January 1, 2005. The Plan,
as structured, requires 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. While requiring the automatic
deferral of certain incentive compensation to the Plan until
vested, the Plan provides Plan Participants with a tax-favorable
savings vehicle while permitting KeyCorp to retain the continued
services of such Participants. 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 it is exempt
from the provisions and requirements of the Employee Retirement
Income Security Act of 1974, as amended (“ERISA”). It
is also the understanding of Participants covered under the Plan
that the Plan will be administered in accordance with the
requirements of Section 409A of the Code.
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:
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(a)
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“ Beneficiary
” shall
mean the person, persons or entity entitled under Article VIII
to receive any Plan benefits payable after a Participant’s
death.
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(b)
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“ 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.
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(c)
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“ 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..
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(d)
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“ 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.
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(e)
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“ 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 a ten-day average of the
New York Stock Exchange’s closing price for such Common
Shares immediately preceding, up to and including the date such
Participant Deferrals and Corporate Contributions are credited to
the Participant’s Plan Account.”
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(f)
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“ 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.
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(g)
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“ 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.
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(h)
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“ Deferral Period
” shall
mean each applicable Incentive Compensation Plan’s Plan
Year.
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(i)
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“ Determination Date
” shall
mean the last business day of each calendar quarter.
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(j)
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“ 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.
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(k)
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“ 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(k), 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.
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(l)
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“ Employee
” shall
mean a common law employee who is employed by an
Employer.
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(m)
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“ 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.
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(n)
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“ Harmful Activity
” shall
have occurred if the Participant shall do any one or more of the
following. This provision shall survive the Participant’s
termination of employment from KeyCorp
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(i)
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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.
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(ii)
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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.
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(iii)
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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.
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(iv)
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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.
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(v)
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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.
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(vi)
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Upon the Participant’s own
behalf or upon behalf of any other person or entity that competes
or plans to compete with KeyCorp, call upon, solicit, or do
business with (other than business which does not compete with any
business conducted by KeyCorp) any KeyCorp customer the Participant
called upon, solicited, interacted with, or became acquainted with,
or learned of through access to information (whether or not such
information is or was non-public) while the Participant was
employed at KeyCorp unless such prohibited activity was
inadvertent, done in good faith, and did not involve a customer
whom the Participant should have reasonably known was a customer of
KeyCorp.
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(vii)
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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.
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For
purposes of this Section 2.1(n) the term:
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“Intellectual
Property” shall mean any invention, idea,
product, method of doing business, market or business plan,
process, program, software,
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formula, method, work of authorship,
or other information, or thing relating to KeyCorp or any of its
businesses.
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“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.
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“KeyCorp”
shall include KeyCorp,
its subsidiaries, and its affiliates.
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(o)
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“ 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(o),
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.
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(p)
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“ 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.
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(q)
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“ Involuntary
Termination ” shall mean the termination (by the
Employer) of a Participant’s employment from his or her
Employer and from any other Employer, but shall not include the
Participant’s Discharge for Cause or Termination Under
Limited Circumstances.
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(r)
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“ 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.
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(s)
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“ Participant Deferrals
” shall
mean any Incentive Compensation Award required to be automatically
deferred to the Plan for each applicable Deferral
Period.
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(t)
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“ Plan
” shall
mean the KeyCorp Automatic Deferral Plan with all amendments
hereafter made.
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(u)
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“ 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
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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 as (i) the allocation of any
Corporation assets to, or a segregation of any Corporation assets
in any such Plan Accounts, or (ii) otherwise creating a right
in any person or Participant to receive specific assets of the
Corporation.
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(v)
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“ Plan Year
” shall
mean the calendar year.
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(w)
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“ 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.
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(x)
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“ Termination
” shall
mean the voluntary or involuntary and permanent termination of a
Participant’s employment from his or her Employer and any
other Employer, whether by resignation or otherwise, but shall not
include the Participant’s Retirement.
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(y)
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“ 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 an officer of the
Corporation.
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(z)
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“ Vesting Service
” for
purposes of Section 2.1(z) 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 in
which the Employee is employed by an Employer.
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(aa)
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“ 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, Involuntary Termination,
Retirement, Termination Under Limited Circumstances, or termination
as a result of Disability or death.
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2.2
Pronouns . The masculine pronoun wherever used herein
includes the feminine in any case so requiring, and the singular
may include the plural.
ELIGIBILITY AND
PARTICIPATION
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 during the applicable
Deferral Period.
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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:
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(a)
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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.
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(b)
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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.
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(c)
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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.
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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 or to the Participant’s
Beneficiary in accordance with the terms of the applicable
Incentive Compensation Plan.
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.
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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.
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 date on which the Participant’s Participant
Deferrals are automatically deferred and credited to the
Plan.
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 and losses, 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 Administr
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