KEYCORP AMENDED AND RESTATED
SECOND DIRECTOR DEFERRED COMPENSATION PLAN
The KeyCorp
Amended and Restated Second Director Deferred Compensation Plan
(the “Plan) as amended in 2007, is hereby amended and
restated in its entirety to be effective as of December 31,
2008. The Plan, as amended, is designed to provide Directors of
KeyCorp with the opportunity to defer the payment of their
directors’ fees in accordance with the provisions of this
Plan. It is the intention of KeyCorp and it is the understanding of
the Directors participating in the Plan that the Plan constitutes a
nonqualified plan of deferred compensation that is subject to the
provisions of Section 409A of the Code and the applicable
regulations issued thereunder.
For the
purposes hereof, the following words and phrases shall have the
meanings indicated.
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1.
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“Account”
shall mean the
bookkeeping account established in accordance with Article II
hereof.
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2.
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“Beneficiary”
shall mean any person
designated by a Participant in accordance with the Plan to receive
payment of all or a portion of the remaining balance of the
Participant’s Account in the event of the death of the
Participant prior to receipt by the Participant of the entire
amount credited to the Participant’s Account.
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3.
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“Change of
Control” shall be deemed to have occurred if,
under any rabbi trust arrangement maintained by the Corporation
(the “Trust”), as such Trust may from time to time be
amended or substituted, the Corporation is required to fund the
Trust to secure the payment of any Deferred Shares because a
“Change of Control,” as defined in the Trust, has
occurred on or after the effective date of the Plan.
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4.
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“Corporation”
shall mean KeyCorp, a
bank holding company and its corporate successors, including the
surviving corporation resulting from any merger of KeyCorp with any
other corporation or corporations.
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5.
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“Director”
shall mean (i) any
member of the Board of Directors of the Corporation and
(ii) any member of the Board of Directors of a
Subsidiary.
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6.
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“Election
Agreement” shall mean the written election to
defer Fees signed in writing by the Director and in the form
provided by the Corporation. Election Agreements shall be
irrevocable.
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7.
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“Fees”
shall mean the fees
earned as a Director.
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8.
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“Participant”
shall mean any Director
who has at any time elected to defer the receipt of his or her Fees
in accordance with the terms of the Plan.
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9.
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“Plan”
shall mean this Second
Director Deferred Compensation Plan, as the same may be amended or
substituted from time to time.
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10.
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“Subsidiary”
shall mean a corporation
organized and existing under the laws of the United States or of
any state or the District of Columbia of which more than 50%
percent of the issued and outstanding stock is owned by the
Corporation or by a Subsidiary of the Corporation, and which has
been designated by the Board of Directors or the Chief Executive
Officer of the Corporation as a Subsidiary eligible to participate
in the Plan.
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11.
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“Year”
shall mean the calendar
year.
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ARTICLE II
ELECTION TO DEFER
1.
Eligibility . Any Director may elect to defer receipt
of all or a specified portion of his or her Fees for any Year in
accordance with Section 2 of this Article.
2.
Election to Defer . A Director who desires to defer
the payment of all or a portion of his or her Fees for any Year
must complete and deliver an Election Agreement to the Corporation
no later than the last day of the Year prior to the Year in which
the Fees will be earned by the Director; provided, however, that
any Director hereafter elected to the Board of Directors of the
Corporation or a Subsidiary who was not a previously a Participant
in the Plan may make an election to defer the payment of Fees for
the Year in which he or she is elected to the Board of Directors by
delivering the Election Agreement to the Corporation within
30 days of first becoming a Director.
3.
Amount Deferred; Date of Deferral . A Participant
shall designate on the Election Agreement (a) the amount of
his or her Fees that are to be deferred to the Plan for any Year,
(b) the date on which the Participant’s Fees shall be
distributed, (c) whether the distribution of deferred Fees is
to be paid in its entirety or whether such Fees shall be paid in
installments, and (d) if in installments, the number of
quarterly installments. Deferrals shall be until the earlier to
occur: (i) the date specified by the Participant which may be
not later than the date on which the Participant would attain age
72, or (ii) the date of death of the Participant, at which
time payment of the amount deferred shall be made in accordance
with Section 7 or 10 of this Article. A Participant may not
select more than one date in each Election Agreement upon which
distribution shall be made or when installments shall begin;
distribution dates shall be the first business day of a calendar
quarter.
4.
Account . The Corporation shall maintain an Account
for the Fees deferred by each Participant. A Participant shall
designate on the Election Agreement whether to have the deferred
Fees valued on the basis of KeyCorp Common Shares in accordance
with Section 5 of this Article or based on an interest accrual
in accordance with Section 6 of this Article. The Corporation
may, if necessary or desirable, establish separate Accounts for the
Participant to properly account for amounts deferred under the
different alternatives and Years; all such Accounts are
collectively referred to herein as the Account. The Account based
on KeyCorp Common Shares shall be known as the “Common Shares
Account”, and the interest bearing account shall be known as
the “Interest Bearing Account”; a Participant may defer
a portion of his or her Fees into each type of Account.
5.
Common Shares Account . If a Participant elects to
have all or a portion of his or her Fees deferred into the Common
Shares Account, as of the last business day of any quarter, there
shall be added to such Account the number of Common Shares (whole
and fractional, rounded to the nearest one-hundredth of a share)
equal to the dollar amount of such Fees payable for such calendar
quarter plus all dividends payable during such quarter on the
Common Shares held in the Account on the first day of such quarter
divided by the market value of the Common Shares at the close of
business on the last business day of such quarter.
6.
Interest Bearing Account . If a Participant elects to
have all or a portion of his or her Fees deferred into the Interest
Bearing Account, there shall be added to the Account as of the last
business day of each calendar quarter the dollar amount of such
Fees payable for such calendar quarter plus all interest payable on
such Interest Bearing Account for such quarter as follows: A
Participant’s account will receive interest as of each month
equal to 120% of the applicable long term federal rate as published
by the Internal Revenue Service for that month, compounded monthly,
and divided by 12.
7.
Payment of Account; Period of Deferral . The amount
of a Participant’s Account shall be paid to the Participant
in a single payment and/or in a number of individual, substantially
equal consecutive quarterly installments (not to exceed 40), as
elected by the Participant in his or her Election Agreement.
Distributions from the Interest Bearing Account shall be made in
cash. Distributions from the Common Shares Account shall be made in
Common Shares. The amount of the Account remaining after payment of
each individual installment shall continue to be valued in
accordance with Section 5 of this Article or bear interest in
accordance with Section 6 of this Article. Full payment or the
first quarterly installment, as the case may be, shall be made in
accordance with the terms of the Participant’s Election
Agreement as soon as administratively practicable following the
Participant’s designated payment date, but in any event no
later than 90 days following the date (i) on which the
Participant has elected to commence distribution of his or her
Account, or (ii) of the Participant’s death.
Any installment
payment shall be made pro rata from the Common Shares Account and
the Interest Bearing Account. The election as to the time for and
method of payment of the amount of the Account relating to Fees
deferred for a particular Year shall be made on the Election
Agreement(s) and thereafter shall not be altered except as provided
in Section 10 of this Article.
In the event that
a Participant elects to receive installment payments under this
Section 7,
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(a)
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The
amount of the distribution from the Common Shares Account shall be
valued based on the fair market value of the Common Shares on the
last business day of the calendar quarter immediately prior to the
distribution date;
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(b)
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The
amount of the distribution from the Interest Bearing Account shall
be valued based on the value of such Account on the last business
day of the calendar quarter immediately prior to such distribution
date;
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(c)
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The
amount of each
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