AMENDED AND RESTATED
1991 EQUITY COMPENSATION PLAN
(Amended as of March 13, 2003)
1. Purpose. The KeyCorp Amended and Restated 1991
Equity Compensation Plan is intended to promote the interests of
the Corporation and its shareholders by providing equity-based
incentives for effective service and high levels of performance to
Employees selected by the Committee. To achieve these purposes, the
Corporation may grant Awards of Options, Stock Appreciation Rights,
Limited Stock Appreciation Rights, Restricted Stock, and
Performance Shares to selected Employees, all in accordance with
the terms and conditions hereinafter set forth.
2.1 1934
Act. The term “ 1934 Act ” shall mean the
Securities Exchange Act of 1934, as amended.
2.2
Acquisition Price. The term “ Acquisition Price
” with respect to Restricted Stock shall mean such amount, if
any, required by applicable law and as may be specified by the
Committee in the Award Instrument with respect to that Restricted
Stock as the consideration to be paid by the Employee for that
Restricted Stock.
2.3 Award.
The term “ Award ” shall mean an award granted
under the Plan of an Option, of Stock Appreciation Rights, of
Limited Stock Appreciation Rights, of Restricted Stock, or of
Performance Shares.
2.4 Award
Instrument. The term “ Award Instrument ”
shall mean a written instrument evidencing an Award in such form
and with such provisions as the Committee may prescribe, including,
without limitation, an agreement to be executed by the Employee and
the Corporation, a certificate issued by the Corporation, or a
letter executed by the Committee or its designee. Acceptance of the
Award Instrument by an Employee constitutes agreement to the terms
of the Award evidenced thereby.
2.5 Change of
Control. A “Change of Control” shall be
deemed to have occurred if, at any time after the date of the grant
of the relevant Award, there is a Change of Control under any of
clauses (a), (b), (c), or (d) below. For these purposes, the
Corporation will be deemed to have become a subsidiary of another
corporation if any other corporation (which term shall include, in
addition to a corporation, a limited liability company,
partnership, trust, or other organization) owns, directly or
indirectly, 50 percent or more of the total combined
outstanding voting power of all classes of stock of the Corporation
or any successor to the Corporation.
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(a)
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A
Change of Control will have occurred under this clause (a) if
the Corporation is a party to a transaction pursuant to which
the
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Corporation is merged with or into,
or is consolidated with, or becomes the subsidiary of another
corporation and either
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(i)
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immediately after giving effect to
that transaction, less than 65% of the then outstanding voting
securities of the surviving or resulting corporation or (if the
Corporation becomes a subsidiary in the transaction) of the
ultimate parent of the Corporation represent or were issued in
exchange for voting securities of the Corporation outstanding
immediately prior to the transaction, or
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(ii)
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immediately after giving effect to
that transaction, individuals who were directors of the Corporation
on the day before the first public announcement of (A) the
pendency of the transaction or (B) the intention of any person
or entity to cause the transaction to occur, cease for any reason
to constitute at least 51% of the directors of the surviving or
resulting corporation or (if the Corporation becomes a subsidiary
in the transaction) of the ultimate parent of the
Corporation.
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(b)
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A
Change of Control will have occurred under this clause (b) if
a tender or exchange offer shall be made and consummated for 35% or
more of the outstanding voting stock of the Corporation or any
person (as the term “person” is used in Section 13(d)
and Section 14(d)(2) of the 1934 Act) is or becomes the
beneficial owner of 35% or more of the outstanding voting stock of
the Corporation or there is a report filed on Schedule 13D or
Schedule 14D-1 (or any successor schedule, form or report), each as
adopted under the 1934 Act, disclosing the acquisition of 35% or
more of the outstanding voting stock of the Corporation in a
transaction or series of transactions by any person (as defined
earlier in this clause (b)).
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(c)
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A
Change of Control will have occurred under this clause (c) if
either
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(i)
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without the prior approval,
solicitation, invitation, or recommendation of the
Corporation’s Board of Directors any person or entity makes a
public announcement of a bona fide intention (A) to
engage in a transaction with the Corporation that, if consummated,
would result in a Change Event (as
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defined below in this clause (c)),
or (B) to “solicit” (as defined in Rule 14a-1
under the 1934 Act) proxies in connection with a proposal that is
not approved or recommended by the Corporation’s Board of
Directors, or
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(ii)
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any
person or entity publicly announces a bona fide intention to
engage in an election contest relating to the election of directors
of the Corporation (pursuant to Regulation 14A, including
Rule 14a-11, under the 1934 Act),
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and, at any
time within the 24 month period immediately following the date
of the announcement of that intention, individuals who, on the day
before that announcement, constituted the directors of the
Corporation (the “Incumbent Directors”) cease for any
reason to constitute at least a majority thereof unless both
(A) the election, or the nomination for election by the
Corporation’s shareholders, of each new director was approved
by a vote of at least two-thirds of the Incumbent Directors in
office at the time of the election or nomination for election of
such new director, and (B) prior to the time that the
Incumbent Directors no longer constitute a majority of the Board of
Directors, the Incumbent Directors then in office, by a vote of at
least 75% of their number, reasonably determine in good faith that
the change in Board membership that has occurred before the date of
that determination and that is anticipated to thereafter occur
within the balance of the 24 month period to cause the
Incumbent Directors to no longer be a majority of the Board of
Directors was not caused by or attributable to, in whole or in any
significant part, directly or indirectly, proximately or remotely,
any event under subclause (i) or (ii) of this clause
(c).
For purposes of
this clause (c), the term “Change Event” shall mean any
of the events described in the following subclauses (x), (y), or
(z) of this clause (c):
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(x)
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A
tender or exchange offer shall be made for 25% or more of the
outstanding voting stock of the Corporation or any person (as the
term “person” is used in Section 13(d) and
Section 14(d)(2) of the 1934 Act) is or becomes the beneficial
owner of 25% or more of the outstanding voting stock of the
Corporation or there is a report filed on Schedule 13D or
Schedule 14D-1 (or any successor schedule, form, or report),
each as adopted under the 1934 Act, disclosing the acquisition of
25% or more of the outstanding voting stock of the Corporation in
a
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transaction or series of
transactions by any person (as defined earlier in this subclause
(x)).
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(y)
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The
Corporation is a party to a transaction pursuant to which the
Corporation is merged with or into, or is consolidated with, or
becomes the subsidiary of another corporation and, after giving
effect to such transaction, less than 50% of the then outstanding
voting securities of the surviving or resulting corporation or (if
the Corporation becomes a subsidiary in the transaction) of the
ultimate parent of the Corporation represent or were issued in
exchange for voting securities of the Corporation outstanding
immediately prior to such transaction or less than 51% of the
directors of the surviving or resulting corporation or (if the
Corporation becomes a subsidiary in the transaction) of the
ultimate parent of the Corporation were directors of the
Corporation immediately prior to such transaction.
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(z)
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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 the
Corporation.
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(d)
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A
Change of Control will have occurred under this clause (d) if
there is a sale, lease, exchange, or other transfer (in one
transaction or a series of related transactions) of all or
substantially all of the assets of the Corporation.
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2.6
Committee. The term “ Committee ” shall mean
a committee appointed by the Board of Directors of the Corporation
to administer the Plan. The Committee shall be composed of not less
than three directors of the Corporation. The Board of Directors may
also appoint one or more directors as alternate members of the
Committee. No officer or Employee of the Corporation or of any
Subsidiary shall be a member or alternate member of the Committee.
The Committee shall at all times be so comprised (a) as to
satisfy the disinterested administration standard contained in Rule
16b-3, if required to qualify for the Rule 16b-3 Exemption and
(b) as to satisfy the outside director standard under Section
162(m) of the Internal Revenue Code of 1986, as amended, if
required to qualify compensation paid under one or more of the
provisions of the Plan as performance-based compensation within the
meaning of that section.
2.7 Common
Shares. The term “ Common Shares ” shall
mean common shares of the Corporation, with a par value of $1
each.
2.8
Corporation. The term “ Corporation ” shall
mean KeyCorp and its successors, including the surviving or
resulting corporation of any merger of KeyCorp
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with or into,
or any consolidation of KeyCorp with, any other corporation or
corporations.
2.9
Disability. The term “ Disability ” with
respect to an Employee shall mean physical or mental impairment
which entitles the Employee to receive disability payments under
any long-term disability plan maintained by the
Corporation.
2.10
Employee. The term “ Employee ” shall mean
any individual employed by the Corporation or by any Subsidiary and
shall include officers as well as all other employees of the
Corporation or of any Subsidiary (including employees who are
members of the Board of Directors of the Corporation or any
Subsidiary).
2.11
Employment Termination Date. The term “ Employment
Termination Date ” with respect to an Employee shall mean
the first date on which the Employee is no longer employed by the
Corporation or any Subsidiary.
2.12 Exercise
Price. The term “ Exercise Price ” with
respect to an Option shall mean the price specified in the Option
at which the Common Shares subject to the Option may be purchased
by the holder of the Option.
2.13 Fair
Market Value. Except as otherwise determined by the Committee
at the time of the grant of an Award, the term “Fair
Market Value” with respect to Common Shares shall mean:
(a) if the Common Shares are traded on a national exchange,
the mean between the high and low sales price per Common Share on
that national exchange on the date for which the determination of
fair market value is made or, if there are no sales of Common
Shares on that date, then on the next preceding date on which there
were any sales of Common Shares, or (b) if the Common Shares
are not traded on a national exchange, the mean between the high
and low sales price per Common Share in the over-the-counter
market, National Market System, as reported by the National
Quotations Bureau, Inc. and NASDAQ on the date for which the
determination of fair market value is made or, if there are no
sales of Common Shares on that date, then on the next preceding
date on which there were any sales of Common Shares.
2.14 Incentive
Stock Option. The term “ Incentive Stock Option
” shall mean an Option intended by the Committee to qualify
as an “incentive stock option” within the meaning of
Section 422 of the Internal Revenue Code of 1986, as
amended.
2.15 Limited
Stock Appreciation Right. The term “ Limited Stock
Appreciation Right ” or " Limited SAR ”
shall mean an Award granted to an Employee with respect to all or
any part of any Option, that entitles the holder thereof to receive
from the Corporation, upon exercise of the Limited SAR and
surrender of the related Option, or any portion of the Limited SAR
and the related Option, an amount equal to (unless the Committee
specifies a lesser amount at the time of the grant of the
Award):
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(a)
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in
the case of a Limited SAR granted with respect to an Incentive
Stock Option, 100% of the excess, if any, measured at the time of
the exercise of
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the
Limited SAR, of (i) the Fair Market Value of the Common Shares
subject to the Incentive Stock Option with respect to which the
Limited SAR is exercised over (ii) the Exercise Price of those
Common Shares under the Incentive Stock Option, or
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(b)
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in
the case of a Limited SAR granted with respect to a Nonqualified
Option, 100% of the highest of:
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(i)
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the
excess, measured at the time of the exercise of the Limited SAR, of
(A) the Fair Market Value of the Common Shares subject to the
Nonqualified Option with respect to which the Limited SAR is
exercised over (B) the Exercise Price of those Common Shares
under the Nonqualified Option,
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(ii)
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the
excess of (A) the highest gross price (before brokerage
commissions and soliciting dealers’ fees) paid or to be paid
for a Common Share (whether in cash or in property and whether by
way of exchange, conversion, distribution upon liquidation, or
otherwise) in connection with any Change of Control multiplied by
the number of Common Shares subject to the Nonqualified Option with
respect to which the Limited SAR is exercised over (B) the
Exercise Price of those Common Shares under the Nonqualified
Option, or
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(iii)
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the
excess of (A) the highest Fair Market Value of the Common
Shares subject to the Nonqualified Option with respect to which the
Limited SAR is exercised on any one day during the period beginning
on the sixtieth day prior to the date on which the Limited SAR is
exercised multiplied by the number of Common Shares subject to the
Nonqualified Option with respect to which the Limited SAR is
exercised over (B) the Exercise Price of those Common Shares
under the Nonqualified Option.
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2.16
Nonqualified Option. The term “ Nonqualified
Option ” shall mean an Option intended by the Committee
not to qualify as an “incentive stock option” under
Section 422 of the Internal Revenue Code of 1986, as
amended.
2.17
Option. The term “ Option ,” (a) when
used otherwise than in connection with the term Stock Appreciation
Right or Limited Stock Appreciation Right, shall mean an Award
entitling the holder thereof to purchase a specified number of
Common Shares at a specified price during a specified period of
time, and (b) when used in connection with the term Stock
Appreciation Right or Limited Stock Appreciation Right, shall mean
(i) any such Award or (ii) any award under any other plan
maintained or assumed by the
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Corporation
entitling the holder thereof to purchase a specified number of
Common Shares at a specified price during a specified period of
time.
2.18 Option
Expiration Date. The term “ Option Expiration Date
” with respect to any Option shall mean the date selected by
the Committee after which, except as provided in Section 10.4
in the case of the death of the Employee to whom the option was
granted, the Option may not be exercised.
2.19
Performance Goal. The term “ Performance Goal
” shall mean a performance goal specified by the Committee in
connection with the potential grant of Performance Shares and may
include, without limitation, goals based upon cumulative earnings
per Common Share, return on investment, return on
shareholders’ equity, or achievement of any other goals,
whether or not readily expressed in financial terms, that are
related to the performance by the Corporation, by any Subsidiary,
or by any Employee or group of Employees in connection with
services performed by that Employee or those Employees for the
Corporation, a Subsidiary, or any one or more subunits of the
Corporation or of any Subsidiary.
2.20
Performance Period. The term “ Performance Period
” shall mean such one or more periods of time, which may be
of varying and overlapping durations, as the Committee may select,
over which the attainment of one or more Performance Goals will be
relevant in connection with one or more Awards of Performance
Shares.
2.21
Performance Shares. The term “ Performance Shares
” shall mean an Award denominated in Common Shares and
contingent upon attainment of one or more Performance Goals by the
Corporation or a Subsidiary or any subunit of the Corporation or of
any Subsidiary over a Performance Period.
2.22 Plan.
The term “ Plan ” shall mean this KeyCorp
Amended and Restated 1991 Equity Compensation Plan as from time to
time hereafter amended in accordance with
Section 20.
2.23
Restricted Stock. The term “ Restricted Stock
” shall mean Common Shares of the Corporation delivered to an
Employee pursuant to an Award subject to such restrictions,
conditions and contingencies as the Committee may provide in the
relevant Award Instrument, including (a) the restriction that
the Employee not sell, transfer, otherwise dispose of, or pledge or
otherwise hypothecate the Restricted Stock during the applicable
Restriction Period, (b) the requirement that, subject to the
provisions of Section 10, if the Employee’s employment
terminates so that the Employee is no longer employed by the
Corporation or any Subsidiary before the end of the applicable
Restriction Period, the Employee will offer to sell to the
Corporation at the Acquisition Price each Common Share of
Restricted Stock held by the Employee at the Employment Termination
Date with respect to which, as of that date, any restrictions,
conditions, or contingencies have not lapsed, and (c) such
other restrictions, conditions, and contingencies, if any, as the
Committee may provide in the Award Instrument with respect to that
Restricted Stock.
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2.24
Restriction Period. The term “ Restriction Period
” with respect to an Award of Restricted Stock shall mean the
period selected by the Committee and specified in the Award
Instrument with respect to that Restricted Stock during which the
Employee may not sell, transfer, otherwise dispose of, or pledge or
otherwise hypothecate that Restricted Stock.
2.25
Rule 16b-3. Term “ Rule 16b-3 ”
shall mean Rule 16b-3 or any rule promulgated in replacement
thereof or in substitution therefor under the 1934 Act.
2.26
Rule 16b-3 Exemption. The term “ Rule 16b-3
Exemption ” shall mean the exemption from Section 16(b)
of the 1934 Act that is available under Rule 16b-3.
2.27 Section
16(b) Employee. The term “ Section 16(b)
Employee ” shall mean an individual who is, or at any
time within the preceding six months was, a director, officer, or
10% shareholder of the Corporation within the meaning of Section
16(b) of the 1934 Act.
2.28 Stock
Appreciation Right. The term “ Stock Appreciation
Right “or “ SAR ” shall mean an Award
granted to an Employee with respect to all or any part of any
Option that entitles the holder thereof to receive from the
Corporation, upon exercise of the SAR and surrender of the related
Option, or any portion of the SAR and the related Option, an amount
equal to 100%, or such lesser percentage as the Committee may
determine at the time of the grant of the Award, of the excess, if
any, measured at the time of the exercise of the SAR, of
(a) the Fair Market Value of the Common Shares subject to the
Option with respect to which the SAR is exercised over (b) the
Exercise Price of those Common Shares under the Option.
2.29
Subsidiary. The term “ Subsidiary ” shall
mean any corporation, partnership, joint venture, or other business
entity in which the Corporation owns, directly or indirectly,
50 percent or more of the total combined voting power of all
classes of stock (in the case of a corporation) or other ownership
interest (in the case of any entity other than a
corporation).
2.30 Tandem
Award. The term “ Tandem Award ” shall mean
any two or more Awards that are linked by the terms of any such
Awards so that the exercise of one such Award, in whole or in part,
requires or will automatically result in the surrender or
cancellation, in whole or in proportionate part, of the other such
Awards.
2.31
Transferee. The term “Transferee” shall
mean, with respect to Nonqualified Options only, any person or
entity to which an Employee is permitted by the Committee to
transfer or assign all or part of his or her Options.
3. Administration. The Plan shall be administered by
the Committee. No Award may be made under the Plan to any member or
alternate member of the Committee. The Committee shall have
authority, subject to the terms of the Plan, (a) to
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determine the
Employees who are eligible to participate in the Plan, the type,
size, and terms of Awards to be granted to any Employee, the time
or times at which Awards shall be exercisable or at which
restrictions, conditions, and contingencies shall lapse, and the
terms and provisions of the instruments by which Awards shall be
evidenced, (b) to establish any other restrictions,
conditions, and contingencies on Awards in addition to those
prescribed by the Plan, (c) to interpret the Plan, and
(d) to make all determinations necessary for the
administration of the Plan.
The construction
and interpretation by the Committee of any provision of the Plan or
any Award Instrument delivered pursuant to the Plan and any
determination by the Committee pursuant to any provision of the
Plan or any Award Instrument shall be final and conclusive. No
member or alternate member of the Committee shall be liable for any
such action or determination made in good faith.
The Committee may
act only by a majority of its members. Any determination of the
Committee may be made, without a meeting, by a writing or writings
signed by all of the members of the Committee. In addition, the
Committee may authorize any one or more of their number or any
officer of the Corporation to execute and deliver documents on
behalf of the Committee and the Committee may delegate to one or
more employees, agents, or officers of the Corporation, or to one
or more third party consultants, accountants, lawyers, or other
advisors, such ministerial duties related to the operation of the
Plan as it may deem appropriate.
4. Eligibility. Awards may be granted to Employees of
the Corporation or any Subsidiary selected by the Committee in its
sole discretion. The granting of any Award to an Employee shall not
entitle that Employee to, nor disqualify the Employee from,
participation in any other grant of an Award. The maximum number of
Common Shares with respect to which any Employee may receive Awards
during any calendar year shall be the lesser of 400,000 Common
Shares or .2% of the outstanding Common Shares of the Corporation
on the date such award was made, which maximum number shall be
subject to adjustment as provided in Section 13 of the
Plan.
5. Stock
Subject to the Plan. The stock that may be issued and
distributed to Employees in connection with Awards granted under
the Plan shall be Common Shares and may be authorized and unissued
Common Shares, treasury Common Shares, or Common Shares acquired on
the open market specifically for distribution under the Plan, as
the Board of Directors may from time to time determine.
Subject to
adjustment as provided in Section 13, the number of Common
Shares available for grant of Awards under the Plan shall be
determined from time to time as follows: (a) on the date of
the 1994 Annual Meeting of Shareholders of the Corporation (at
which meeting an amendment and restatement of the Plan was
submitted for approval of the shareholders of the Corporation), the
number of Common Shares available for grant of Awards under the
Plan shall equal two percent of the total number of Common Shares
outstanding on March 31, 1994, and (b) on January 2,
1995 and on each January 2 occurring thereafter through
January 2, 2009, the number of Common Shares
available
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for grant of
Awards under the Plan shall be increased by adding to the number of
Common Shares then available for grant of Awards under the Plan,
the number of Common Shares of the Corporation that, when added to
the number of Common Shares that otherwise remain available for
grant of additional Awards under the Plan on that January 2,
equals two percent of the total number of Common Shares of the
Corporation outstanding on December 31st of the next
proceeding year.
The number of
Common Shares remaining available for grants of additional Awards
under the Plan at any particular time during a calendar year shall
be reduced, upon the granting thereafter of any Award under the
Plan, by the full number of Common Shares subject to that Award
except that, in the case of any particular Tandem Award, the number
of Common Shares counted as being subject to such Tandem Award
shall be the maximum number of Common Shares with respect to which
the Employee may receive value under such Tandem Award. If any
Award for any reason expires or is terminated, in whole or in part,
without the receipt by an Employee of Common Shares (or the
equivalent thereof in cash or other property), the Common Shares
subject to that part of the Award that has so expired or terminated
shall again be available for the future grant of Awards under the
Plan.
Notwithstanding
any other provision of the Plan, but subject to adjustment under
Section 13, (a) the maximum number of Common Shares that
may be issued under the Plan pursuant to Incentive Stock Options
shall be 9,600,000 Common Shares, and (b) the maximum number
of Common Shares that may be issued under the Plan as Restricted
Stock during any calendar year shall be that number of Common
Shares that is equal to five percent of the total number of Common
Shares available for grant of Awards under the Plan as of January 2
of that calendar year.
6.1 Type and
Date of Grant of Options.
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(a)
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The
Award Instrument pursuant to which any Incentive Stock Option is
granted shall specify that the Option granted thereby shall be
treated as an Incentive Stock Option. The Award Instrument pursuant
to which any Nonqualified Option is granted shall specify that the
Option granted thereby shall not be treated as an Incentive Stock
Option.
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(b)
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The
day on which the Committee authorizes the grant of an Incentive
Stock Option shall be the date on which that Option is granted. No
Incentive Stock Option may be granted on any date after the tenth
anniversary of the date of adoption, on March 17, 1994, by the
Board of Directors of the Corporation, of the Plan as amended and
restated.
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(c)
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The
day on which the Committee authorizes the grant of a Nonqualified
Option shall be considered the date on which that Option is
granted, unless the Committee specifies a later date.
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6.2 Exercise
Price. The Exercise Price under any Option shall be not less
than the Fair Market Value of the Common Shares subject to the
Option on the date the Option is granted.
6.3 Option
Expiration Date. The Option Expiration Date under any Incentive
Stock Option shall be not later than ten years from the date on
which the Option is granted. The Option Expiration Date under any
Nonqualified Option shall not be later than ten years and one month
from the date on which the Option is granted.
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(a)
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Except as otherwise provided in
Section 10, an Option may be exercised only while the Employee
to whom the Option was granted is in the employ of the Corporation
or of a Subsidiary. Subject to this requirement, each Option shall
become exercisable in one or more installments at the time or times
provided in the Award Instrument evidencing the Option. Once any
portion of an Option becomes exercisable, that portion shall remain
exercisable until expiration or termination of the Option. An
Employee to whom an Option is gran
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