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<SEC-DOCUMENT>0000950152-97-002371.txt : 19970329
<SEC-HEADER>0000950152-97-002371.hdr.sgml : 19970329
ACCESSION NUMBER: 0000950152-97-002371
CONFORMED SUBMISSION TYPE: 10-K405
PUBLIC DOCUMENT COUNT: 31
CONFORMED PERIOD OF REPORT: 19961231
FILED AS OF DATE: 19970328
SROS: NYSE
FILER:
COMPANY DATA:
COMPANY CONFORMED NAME: KEYCORP /NEW/
CENTRAL INDEX KEY: 0000091576
STANDARD INDUSTRIAL CLASSIFICATION: NATIONAL COMMERCIAL BANKS [6021]
IRS NUMBER: 346542451
STATE OF INCORPORATION: OH
FISCAL YEAR END: 1231
FILING VALUES:
FORM TYPE: 10-K405
SEC ACT: 1934 Act
SEC FILE NUMBER: 001-11302
FILM NUMBER: 97567144
BUSINESS ADDRESS:
STREET 1: 127 PUBLIC SQ
CITY: CLEVELAND
STATE: OH
ZIP: 44114-1306
BUSINESS PHONE: 2166893000
MAIL ADDRESS:
STREET 1: 127 PUBLIC SQ
CITY: CLEVELAND
STATE: OH
ZIP: 44114-1306
FORMER COMPANY:
FORMER CONFORMED NAME: SOCIETY CORP
DATE OF NAME CHANGE: 19920703
</SEC-HEADER>
<DOCUMENT>
<TYPE>10-K405
<SEQUENCE>1
<DESCRIPTION>KEYCORP 10-K405
<TEXT>
<PAGE> 1
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED DECEMBER 31, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM TO
COMMISSION FILE NUMBER 0-850
KEYCORP LOGO
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
OHIO
---------------------------
(STATE OR OTHER JURISDICTION OF
INCORPORATION OR ORGANIZATION)
127 PUBLIC SQUARE, CLEVELAND, OHIO
---------------------------------------
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
34-6542451
----------------
(I.R.S. EMPLOYER
IDENTIFICATION NO.)
44114-1306
----------------
(ZIP CODE)
(216) 689-6300
----------------------------------------------
(REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)
<TABLE>
<S> <C>
Securities registered pursuant Securities registered pursuant
to Section 12(b) of the Act: to Section 12(g) of the Act:
Common Shares, $1 par value
Rights to Purchase Common Shares None
- ---------------------------------------- ----------------------------------------
(TITLE OF EACH CLASS) (TITLE OF CLASS)
New York Stock Exchange
- ----------------------------------------
(NAME OF EACH EXCHANGE ON WHICH
REGISTERED)
</TABLE>
Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the Registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes [X] No [ ]
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of Registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [X]
The aggregate market value of voting stock held by nonaffiliates of the
Registrant was approximately $11,832,852,977 at February 28, 1997. (The
aggregate market value has been computed using the closing market price of the
stock as reported by the New York Stock Exchange on February 28, 1997.)
221,174,822
------------------------------------------------------------------
(NUMBER OF KEYCORP COMMON SHARES OUTSTANDING AS OF FEBRUARY 28, 1997)
Certain specifically designated portions of KeyCorp's 1996 Annual Report to
Shareholders are incorporated by reference into Parts I, II and IV of this Form
10-K. Certain specifically designated portions of KeyCorp's definitive Proxy
Statement for its 1997 Annual Meeting of Shareholders are incorporated by
reference into Part III of this Form 10-K.
<PAGE> 2
KEYCORP
1996 FORM 10-K ANNUAL REPORT
TABLE OF CONTENTS
<TABLE>
<CAPTION>
ITEM PAGE
NUMBER NUMBER
- ------ ------
<S> <C> <C>
PART I
1 Business............................................................. 1
2 Properties........................................................... 6
3 Legal Proceedings.................................................... 6
4 Submission of Matters to a Vote of Security Holders.................. 6
PART II
5 Market for Registrant's Common Stock and Related Stockholder
Matters.............................................................. 7
6 Selected Financial Data.............................................. 7
7 Management's Discussion and Analysis of Financial Condition and
Results of
Operations........................................................... 7
8 Financial Statements and Supplementary Data.......................... 8
9 Changes in and Disagreements with Accountants on Accounting and
Financial
Disclosure........................................................... 8
PART III
10 Directors and Executive Officers of the Registrant................... 8
11 Executive Compensation............................................... 8
12 Security Ownership of Certain Beneficial Owners and Management....... 8
13 Certain Relationships and Related Transactions....................... 8
PART IV
14 Exhibits, Financial Statement Schedules, and Reports on Form 8-K..... 9
Signatures........................................................... 13
Exhibits............................................................. 14
</TABLE>
<PAGE> 3
PART I
ITEM 1. BUSINESS
OVERVIEW
KeyCorp (also referred to herein as the "Corporation") is a legal entity
separate and distinct from its banking and other subsidiaries. Accordingly, the
right of KeyCorp, its security holders and its creditors to participate in any
distribution of the assets or earnings of its banking and other subsidiaries is
necessarily subject to the prior claims of the respective creditors of such
banking and other subsidiaries, except to the extent that claims of the
Corporation in its capacity as creditor of such banking and other subsidiaries
may be recognized.
KeyCorp, organized in 1958 under the laws of the state of Ohio and registered
under the Bank Holding Company Act of 1956, as amended, is headquartered in
Cleveland, Ohio, and is engaged primarily in the business of commercial and
retail banking. At December 31, 1996, it was one of the nation's largest bank
holding companies with consolidated total assets of approximately $67.6 billion.
Its subsidiaries provide a wide range of banking, fiduciary and other financial
services to its corporate, individual and institutional customers through three
primary lines of business: Corporate Banking, National Consumer Finance and
Community Banking. These services are provided across much of the country
through a network of banking subsidiaries operating more than 1,200 full-service
banking offices in 15 states, a 24-hour telephone banking call center services
group and nearly 1,900 ATMs as of December 31, 1996. At February 28, 1997, the
Corporation and its subsidiaries had approximately 26,963 full-time equivalent
employees.
In addition to the customary banking services of accepting deposits and making
loans, the bank and trust company subsidiaries provide specialized services,
including personal and corporate trust services, personal financial services,
customer access to mutual funds, cash management services, investment banking
services and international banking services. Through its subsidiary banks, trust
companies and registered investment adviser subsidiaries, KeyCorp provides
investment management services to institutional and individual clients,
including large corporate and public retirement plans, Taft-Hartley plans,
foundations and endowments, and high net worth individuals. In addition,
investment management subsidiaries serve as investment advisers to the
proprietary mutual funds offered by other affiliates.
KeyCorp provides other financial services both inside and outside of its primary
banking markets through its nonbank subsidiaries. These services include
accident and health insurance on loans made by subsidiary banks, venture
capital, community development financing, securities underwriting and brokerage,
automobile financing and other financial services. KeyCorp is an equity
participant in joint ventures with a number of other unaffiliated companies in
Electronic Payment Services, Inc., which operates ATMs throughout the country,
and Integrion Financial Network, L.L.C., which is building a platform for
electronic banking.
The following financial data is included in the Financial Review section of
KeyCorp's 1996 Annual Report to Shareholders and is incorporated herein by
reference as indicated below:
<TABLE>
<CAPTION>
DESCRIPTION OF FINANCIAL DATA PAGE
----------------------------------------------------------------------------- ----
<S> <C>
Selected Financial Data...................................................... 6
Average Balance Sheets, Net Interest Income and Yields/Rates................. 14
Components of Net Interest Income Changes.................................... 16
Composition of Loans......................................................... 25
Maturities and Sensitivity of Certain Loans to Changes in Interest Rates..... 27
Securities Available for Sale................................................ 28
Investment Securities........................................................ 28
Allocation of the Allowance for Loan Losses.................................. 29
Summary of Loan Loss Experience.............................................. 30
Summary of Nonperforming Assets and Past Due Loans........................... 31
Maturity Distribution of Time Deposits of $100,000 or More................... 33
Impaired Loans and Other Nonperforming Assets................................ 52
Short-Term Borrowings........................................................ 54
</TABLE>
1
<PAGE> 4
The executive offices of KeyCorp are located at 127 Public Square, Cleveland,
Ohio 44114-1306, and its telephone number is (216) 689-6300.
MERGERS, ACQUISITIONS AND DIVESTITURES
The information presented in Note 2, "Mergers, Acquisitions and Divestitures,"
beginning on page 49 of the Financial Review section of KeyCorp's 1996 Annual
Report to Shareholders is incorporated herein by reference.
COMPETITION
The market for banking and related financial services is highly competitive.
KeyCorp and its subsidiaries ("Key") competes with other providers of financial
services, such as other bank holding companies, commercial banks, savings
associations, credit unions, mortgage banking companies, mutual funds, insurance
companies, investment management firms, investment banking firms, broker-dealers
and a growing list of other local, regional and national institutions which
offer financial services. Key competes by offering quality products and
innovative services at competitive prices.
In recent years, mergers between financial institutions have added competitive
pressure to Key's core banking services. In addition, competition is expected to
intensify as a consequence of interstate banking laws now in effect in the
majority of states which permit banking organizations to expand geographically.
Further, the Riegle-Neal Interstate Banking and Branching Efficiency Act of 1994
(the "Interstate Act") removed the restrictions on interstate acquisitions of
banks and bank holding companies as of September 29, 1995. The act also
authorizes nationwide interstate branching and bank mergers effective June 1,
1997, although states may "opt-in" and permit branching sooner, or "opt-out" and
prohibit branching into or out of that state. See "Supervision and
Regulation--Interstate Banking and Other Recent Legislation" herein.
SUPERVISION AND REGULATION
The following discussion addresses certain of the material elements of the
regulatory framework applicable to bank holding companies and their
subsidiaries, and provides certain specific information regarding Key.
Regulation of financial institutions, such as Key, is intended primarily for the
protection of depositors, the deposit insurance funds of the Federal Deposit
Insurance Corporation ("FDIC") and the banking system as a whole, and generally
is not intended for the protection of shareholders or other investors.
In the following discussion, references to statutes and regulations are brief
summaries thereof and are qualified in their entirety by reference to the full
text of such statutes and regulations. In addition, there are other statutes and
regulations not described below that apply to the operation of banking
institutions. Changes in the applicable laws, and in their application by
regulatory agencies, cannot necessarily be predicted, but they may have a
material effect on the business and results of KeyCorp.
General
As a bank holding company, KeyCorp is subject to the regulation, supervision and
examination of the Board of Governors of the Federal Reserve System (the
"Federal Reserve Board") under the Bank Holding Company Act of 1956, as amended
(the "BHCA"). Under the BHCA, bank holding companies may not, in general,
directly or indirectly acquire the ownership or control of more than 5% of the
voting shares, or substantially all of the assets, of any company, including a
bank, without the prior approval of the Federal Reserve Board. In addition, bank
holding companies are generally prohibited under the BHCA from engaging in
commercial or industrial activities.
The Corporation's banking subsidiaries are also subject to extensive regulation,
supervision and examination by applicable Federal banking agencies. On January
13, 1997, KeyCorp converted all of its state-chartered bank subsidiaries, with
the exception of KeyBank of Washington, to national banks. KeyBank of
Washington's charter was converted on March 5, 1997. Key Bank USA, National
Association ("KeyBank USA"), Key Trust Company of Florida National Association
and KeyBank National Association in Ohio, New York,
2
<PAGE> 5
Washington, Alaska, Colorado, Idaho, Maine, Oregon, Utah, Vermont, Wyoming and
New Hampshire (all of which are separate banking subsidiaries) are national
banking associations with full banking powers, subject to regulation,
supervision and examination by the Office of the Comptroller of the Currency
(the "OCC"). Also on January 13, 1997, KeyCorp converted all of its
state-chartered trust company subsidiaries except Society Trust Company of New
York to national bank charters that limit their powers to trust-related
fiduciary activities. These are Key Trust Company of Ohio, National Association,
Key Trust Company of Indiana, National Association, and KeyTrust Company
National Association in New York, Alaska, Maine, Washington and Wyoming (all of
which are separate trust company subsidiaries). These entities are also subject
to the regulation, supervision and examination of the OCC, although they are not
regulated as banks for purposes of the BHCA. Society Trust Company of New York
is a state-chartered trust company subsidiary subject to regulation by the
banking authorities in the State of New York. Because the deposits in all of the
Corporation's banking subsidiaries are insured (up to applicable limits) by the
FDIC, the FDIC also has certain regulatory and supervisory authority over all
such banking subsidiaries.
The Corporation also has other financial services subsidiaries that are subject
to regulation, supervision and examination by the Federal Reserve Board, as well
as other applicable state and Federal regulatory agencies. For example, the
Corporation's brokerage and asset management subsidiaries are subject to
supervision and regulation by the Securities and Exchange Commission, the
National Association of Securities Dealers, Inc. and state securities
regulators, and the Corporation's insurance subsidiaries are subject to
regulation by the insurance regulatory authorities of the various states. Other
nonbank subsidiaries of the Corporation are subject to other laws and
regulations of both the Federal government and the various states in which they
are authorized to do business.
Dividend Restrictions
The principal source of cash flow to the Corporation, including cash flow to pay
dividends on the Corporation's common and preferred shares and debt service on
the Corporation's debt, is dividends from its banking and other subsidiaries.
Various Federal and state statutory and regulatory provisions limit the amount
of dividends that may be paid to the Corporation by its banking subsidiaries
without regulatory approval.
The approval of the OCC is required for the payment of any dividend by a
national bank if the total of all dividends declared by the board of directors
of such bank in any calendar year would exceed the total of: (i) the bank's net
profits (as defined and interpreted by regulation) for the current year plus
(ii) the retained net profits (as defined and interpreted by regulation) for the
preceding two years, less any required transfer to surplus or a fund for the
retirement of any preferred stock. In addition, a national bank can pay
dividends only to the extent that retained net profits (including the portion
transferred to surplus) exceed bad debts (as defined and interpreted by
regulation). All of the Corporation's banking subsidiaries and trust company
subsidiaries, with the exception of Society Trust Company of New York, are
national banks and are subject to these restrictions. Until the Corporation's
state-chartered banks were converted to national banks, they were subject to
similar restrictions under state law.
In addition, if, in the opinion of the applicable Federal banking agency, a
depository institution under its jurisdiction is engaged in or is about to
engage in an unsafe or unsound practice (which, depending on the financial
condition of the institution, could include the payment of dividends) the agency
may require, after notice and hearing, that such institution cease and desist
from such practice. The OCC and the FDIC have indicated that paying dividends
that would deplete a depository institution's capital base to an inadequate
level would be an unsafe and unsound practice. Moreover, under the Federal
Deposit Insurance Act (the "FDI Act"), an insured depository institution may not
pay any dividend if payment would cause it to become undercapitalized or if it
is undercapitalized. See "Regulatory Capital Standards and Related Matters --
Prompt Corrective Action." Also, the Federal Reserve Board, the OCC and the FDIC
have issued policy statements which provide that FDIC-insured depository
institutions and their holding companies should generally pay dividends only out
of the current operating earnings.
3
<PAGE> 6
Holding Company Structure
Transactions Involving Banking Subsidiaries. The Corporation's banking
subsidiaries are subject to Federal Reserve Act restrictions which limit the
amount of funds or other items of value that can be transferred from such
subsidiaries to either the Corporation and (with certain exceptions) the
Corporation's nonbanking subsidiaries. Any such loans or extensions of credit
are required to be secured in specified amounts.
Source of Strength Doctrine. Under Federal Reserve Board policy, a bank holding
company is expected to serve as a source of financial and managerial strength to
each of its subsidiary banks and, under appropriate circumstances, to commit
resources to support each such subsidiary bank. This support may be required by
the Federal Reserve Board at times when the Corporation may not have the
resources to provide it, or, for other reasons, would not otherwise be inclined
to provide it. Certain loans by a bank holding company to a subsidiary bank are
subordinate in right of payment to deposits in, and certain other indebtedness
of, the subsidiary bank. In addition, the Crime Control Act of 1990 provides
that in the event of a bank holding company's bankruptcy, any commitment by a
bank holding company to a Federal bank regulatory agency to maintain the capital
of a subsidiary bank will be assumed by the bankruptcy trustee and entitled to a
priority of payment.
Depositor Preference. The FDI Act provides that, in the event of the
"liquidation or other resolution" of an insured depository institution, the
claims of depositors of such institution (including claims by the FDIC as
subrogee of insured depositors) and certain claims for administrative expenses
of the FDIC as a receiver would be afforded a priority over other general
unsecured claims against such an institution, including Federal funds and
letters of credit. If an insured depository institution fails, insured and
uninsured depositors along with the FDIC will be placed ahead of unsecured,
nondeposit creditors, including a parent holding company, in order of priority
of payment.
Liability of Commonly Controlled Institutions. Under the FDI Act, an insured
depository institution which is under common control with another insured
depository institution is generally liable for any loss incurred, or reasonably
anticipated to be incurred, by the FDIC in connection with the default of such
commonly controlled institution, or any assistance provided by the FDIC to such
commonly controlled institution which is in danger of default. The term
"default" is defined generally to mean the appointment of a conservator or
receiver and the term "in danger of default" is defined generally as the
existence of certain conditions indicating that a "default" is likely to occur
in the absence of regulatory assistance.
Regulatory Capital Standards and Related Matters
Capital Guidelines. The Federal Reserve Board, the FDIC and the OCC have
adopted substantially similar risk-based and leverage capital guidelines for
United States banking organizations. Under these risk-based capital standards,
the minimum consolidated ratio of total capital to risk-adjusted assets
(including certain off-balance sheet items, such as standby letters of credit)
required by the Federal Reserve Board for bank holding companies, such as Key,
is currently 8%. At least one-half of the total capital must be comprised of
common equity, retained earnings, qualifying noncumulative, perpetual preferred
stock, a limited amount of qualifying cumulative, perpetual preferred stock and
minority interests in the equity accounts of consolidated subsidiaries, less
goodwill and certain other intangible assets ("Tier I capital"). The remainder
may consist of hybrid capital instruments, perpetual debt, mandatory convertible
debt securities, a limited amount of subordinated debt, other preferred stock
and a limited amount of loan and lease loss reserves ("Tier II capital"). As of
December 31, 1996, Key's Tier I and total capital to risk-adjusted assets ratios
were 7.98% and 13.01%, respectively.
In addition to the risk-based standard, Key is subject to minimum leverage ratio
guidelines. The leverage ratio is defined to be the ratio of a banking
organization's Tier I capital to its total consolidated quarterly average assets
less goodwill and certain other intangible assets. These guidelines provide for
a minimum leverage ratio of 3% for bank holding companies that have the highest
supervisory rating. All other bank holding companies must maintain a minimum
leverage ratio of at least 4% to 5%. Neither Key nor any of its banking
affiliates has
4
<PAGE> 7
been advised by its primary Federal banking regulator of any specific leverage
ratio applicable to it. As of December 31, 1996, Key's Tier I leverage ratio was
6.93%.
The Corporation's banking subsidiaries are also subject to capital requirements
adopted by their respective primary Federal regulatory agency which are
substantially similar to those imposed by the Federal Reserve Board on bank
holding companies. The Corporation's national bank subsidiaries are subject to
the capital requirements of the OCC. Prior to their conversion to national
banks, the Corporation's state-chartered bank subsidiaries were subject to FDIC
capital requirements. As of December 31, 1996, each of the Corporation's banking
subsidiaries had capital in excess of all minimum regulatory requirements.
Prompt Corrective Action. The "prompt corrective action" provisions of the FDI
Act group FDIC-insured depository institutions into five broad categories based
on their capital ratios. The five categories -- "well capitalized," "adequately
capitalized," "undercapitalized," "significantly undercapitalized" and
"critically undercapitalized" -- are based upon an institution's total, Tier I
and leverage capital ratios. Under the regulations, an institution is: (i) "well
capitalized" if it has a total risk-based capital ratio of 10% or greater, a
Tier I risk-based capital ratio of 6% or greater and a leverage ratio of 5% or
greater and is not subject to any written agreement, order or capital directive
to meet and maintain a specific capital level for any capital measure; (ii)
"adequately capitalized" if it has a total risk-based capital ratio of 8% or
greater, a Tier I risk-based capital ratio of 4% or greater and a leverage ratio
of 4% or greater (3% in certain circumstances) and is not "well capitalized";
(iii) "undercapitalized" if it has a total risk-based capital ratio of less than
8%, a Tier I risk-based capital ratio of less than 4% or a leverage ratio of
less than 4% (3% in certain circumstances); (iv) "significantly
undercapitalized" if it has a total risk-based capital ratio of less than 6%, a
Tier I risk-based capital ratio of less than 3% or a leverage ratio of less than
3%; and (v) "critically undercapitalized" if its tangible equity is equal to or
less than 2% of average quarterly tangible assets. An institution may be
downgraded to, or be deemed to be in, a capital category that is lower than is
indicated by its capital ratios if it is determined to be in an unsafe or
unsound condition or if it receives an unsatisfactory examination rating with
respect to certain matters.
Each KeyCorp banking subsidiary is considered to be "well capitalized." An
institution's capital category, as determined by applying the prompt corrective
action provisions of law, may not constitute an accurate representation of the
overall financial condition or prospects of the Corporation or its banking
subsidiaries, and should be considered in conjunction with other available
information regarding Key's financial condition and results of operations.
FDIC INSURANCE
Under the FDIC's risk-related insurance assessment system, all insured
depository institutions are required to pay annual assessments to the Bank
Insurance Fund (the "BIF") or the Savings Association Insurance Fund (the
"SAIF") of the FDIC. The assessments are based on the institution's risk
classification which, in turn, is based on an assignment of the institution by
the FDIC to one of three capital groups and to one of three supervisory
subgroups. The capital groups are "well capitalized," "adequately capitalized"
and "undercapitalized". The three supervisory subgroups are Group "A" (for
financially solid institutions with only a few minor weaknesses), Group "B" (for
those institutions with weaknesses which, if uncorrected, could cause
substantial deterioration of the institution and increase the risk to the
deposit insurance fund) and Group "C" (for those institutions with a substantial
probability of loss to the insurance fund, absent effective corrective action).
On August 8, 1995, the FDIC amended its regulations on insurance assessments to
establish a new assessment rate schedule of $.04 to $.31 per $100 of domestic
deposits in replacement of the previous schedule of $.23 to $.31 per $100 of
domestic deposits for institutions whose deposits are subject to assessment by
the BIF. The new BIF schedule became effective on June 1, 1995. Assessments
collected in accordance with the previous assessment schedule that exceed the
amount due under the new schedule have been refunded with interest, from the
effective date of June 1, 1995. For the period commencing June 1 through
December 31, 1995, insurance premiums on deposits of all of the Corporation's
banking subsidiaries were assessed at the rate of $.04 per $100 of domestic
deposits. The BIF rate was reduced further to zero as of January 1, 1996. The
FDIC maintained the SAIF assessment rate at $.23 per $100 of insured deposits
during 1995 and in 1996 through
5
<PAGE> 8
the date of enactment of the Deposit Insurance Funds Act of 1996 ("Funds Act")
passed by Congress on September 30 to recapitalize the SAIF. In accordance with
the Funds Act, effective January 1, 1997, the FDIC will require all insured
institutions to begin servicing the bonds issued in the late 1980s to fund
government assistance payments made necessary by a higher volume of insolvencies
in the thrift industry. The servicing will take the form of an annual assessment
equal to $.0129 per $100 of BIF-assessable deposits and $.0644 per $100 of
SAIF-assessable deposits. This will result in a 1997 expense of approximately $5
million for the Corporation's banking subsidiaries.
INTERSTATE BANKING AND OTHER RECENT LEGISLATION
On September 29, 1994, the Interstate Act was enacted into Federal law. Under
the Interstate Act, commencing on September 29, 1995, bank holding companies
were permitted to acquire banks located in any state regardless of the state law
in effect at the time. The Interstate Act also provides for the nationwide
interstate branching of banks. Under the Interstate Act, both national and
state-chartered banks will be permitted to merge across state lines (and thereby
establish interstate branches) commencing on June 1, 1997. States are permitted
to "opt-out" of the interstate branching authority by taking action prior to the
commencement date. States may also "opt-in" early (i.e., prior to June 1, 1997)
to the interstate branching provisions. All states in which the Corporation has
banking subsidiaries have "opted in" to the interstate branching provisions. As
a result, the Corporation plans to consolidate all of its bank subsidiaries
(other than KeyBank USA) into one national banking institution in mid-1997. The
Corporation continues to evaluate its business opportunities with respect to its
trust company subsidiaries, and plans for consolidating these subsidiaries are
not yet final.
In addition to the matters discussed above, there have been proposed a number of
legislative and regulatory proposals designed to strengthen the Federal deposit
insurance system and to improve the overall financial stability of the United
States banking system, and to provide for other changes in the bank regulatory
structure, including proposals to reduce regulatory burdens on banking
organizations and to expand the nature of products and services banks and bank
holding companies may offer. It is impossible to predict whether or in what form
these proposals may be adopted in the future, and, if adopted, what their effect
will be on Key.
ITEM 2. PROPERTIES
The headquarters of KeyCorp, KeyBank National Association (Ohio) and KeyBank USA
are located in Key Tower at 127 Public Square, Cleveland, Ohio 44114-1306. Key
currently leases approximately 695,000 square feet of the complex, encompassing
the first twenty-three floors, the 28th floor and the 54th through 56th floors
of the 57-story Key Tower. At December 31, 1996, the banking subsidiaries of
KeyCorp owned 711 of their branch banking offices and leased 494 offices. The
lease terms for applicable branch banking offices are not individually material,
with terms ranging from month-to-month to 99-year leases from inception.
Additional information pertaining to KeyCorp's properties is presented in Note
7, "Premises and Equipment," on page 53 of the Financial Review section of
KeyCorp's 1996 Annual Report to Shareholders and is incorporated herein by
reference.
ITEM 3. LEGAL PROCEEDINGS
In the ordinary course of business, Key is subject to legal actions which
involve claims for substantial monetary relief. Based on information presently
available to management and Key's counsel, management does not believe that any
legal actions, individually or in the aggregate, will have a material adverse
effect on the financial condition of Key.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
During the fourth quarter of the fiscal year covered by this report, no matter
was submitted to a vote of security holders of KeyCorp.
6
<PAGE> 9
PART II
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
MATTERS
On August 20, 1996, KeyCorp sold an aggregate of 270,263 KeyCorp Common Shares
pursuant to the exemption from registration under Rule 506 of the Securities Act
of 1933, as amended. The sale of the KeyCorp Common Shares was made in
connection with an acquisition of a privately held company by KeyCorp. The
acquisition was structured as a stock for stock exchange. KeyCorp received
shares of the privately held company and future services of certain of the
selling stockholders in exchange for KeyCorp Common Shares. In making the sale,
KeyCorp relied on the fact that the KeyCorp Common Shares were acquired by no
more than 35 persons other than accredited investors and that each
non-accredited investor, either alone or together with his purchaser
representative(s), was capable of evaluating the investment.
During the fourth quarter of 1996, the Corporation formed two wholly owned
Delaware business trusts, KeyCorp Institutional Capital A ("Capital A") and
KeyCorp Institutional Capital B ("Capital B"), which issued $350 million and
$150 million, respectively, of corporation-obligated mandatorily redeemable
capital securities of subsidiary trusts holding solely junior subordinated
deferrable interest debentures of the Corporation ("capital securities").
Goldman, Sachs & Co. acted as lead underwriter for the Capital A capital
securities sold on December 4, 1996, and Credit Suisse First Boston was the sole
underwriter for the Capital B capital securities sold on December 30, 1996. The
offering price and commission for both transactions was $1,000 per capital
security and $10 per capital security, respectively. The capital securities sold
by Capital A and Capital B were sold primarily to qualified institutional buyers
(as defined in Rule 144A under the Securities Act of 1933, as amended) and were
therefore exempt from registration. A limited amount of capital securities were
sold to institutional investors that are accredited investors within the meaning
of Rule 501 (a) under the Securities Act of 1933, as amended. Further
information pertaining to the capital securities is included in Note 11,
"Capital Securities," on page 56 of the Financial Review section of KeyCorp's
1996 Annual Report to Shareholders and is incorporated herein by reference.
The dividend restrictions discussion beginning on page 3 of this report and the
following disclosures included in the Financial Review section of KeyCorp's 1996
Annual Report to Shareholders are incorporated herein by reference:
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Discussion of Common Shares and shareholder information presented in the
Capital and Dividends section.............................................. 34
Presentation of quarterly market price and cash dividends per Common Share... 37
Discussion of dividend restrictions presented in Note 17, "Commitments,
Contingent Liabilities and Other Disclosures".............................. 62
</TABLE>
ITEM 6. SELECTED FINANCIAL DATA
The Selected Financial Data presented on page 6 of the Financial Review section
of KeyCorp's 1996 Annual Report to Shareholders is incorporated herein by
reference.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
The information included under "Management's Discussion and Analysis of
Financial Condition and Results of Operations" presented on pages 1 through 38
of the Financial Review section of KeyCorp's 1996 Annual Report to Shareholders
is incorporated herein by reference.
7
<PAGE> 10
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The Selected Quarterly Financial Data and the financial statements and the notes
thereto, presented on page 37 and on pages 42 through 68, respectively, of the
Financial Review section of KeyCorp's 1996 Annual Report to Shareholders are
incorporated herein by reference.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
Not applicable.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The information required by this item is set forth in the sections captioned
"Issue One -- ELECTION OF DIRECTORS" and "EXECUTIVE OFFICERS" contained in
KeyCorp's definitive Proxy Statement for the 1997 Annual Meeting of Shareholders
to be held May 15, 1997, and is incorporated herein by reference. KeyCorp
expects to file its final proxy statement on or about April 7, 1997.
ITEM 11. EXECUTIVE COMPENSATION
The information required by this item is set forth in the sections captioned
"THE BOARD OF DIRECTORS AND ITS COMMITTEES," "COMPENSATION OF EXECUTIVE
OFFICERS" and "EMPLOYMENT AND CHANGE OF CONTROL AGREEMENTS" contained in
KeyCorp's definitive Proxy Statement for the 1997 Annual Meeting of Shareholders
to be held May 15, 1997, and is incorporated herein by reference. The
information set forth in the sections captioned "COMPENSATION AND ORGANIZATION
COMMITTEE AND EQUITY BASED COMPENSATION COMMITTEE JOINT REPORT ON EXECUTIVE
COMPENSATION" and "KEYCORP STOCK PRICE PERFORMANCE" contained in KeyCorp's
definitive Proxy Statement for the 1997 Annual Meeting of Shareholders to be
held May 15, 1997, is not incorporated by reference in this Report on Form 10-K.
KeyCorp expects to file its final proxy statement on or about April 7, 1997.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The information required by this item is set forth in the section captioned
"SHARE OWNERSHIP AND PHANTOM STOCK UNITS" contained in KeyCorp's definitive
Proxy Statement for the 1997 Annual Meeting of Shareholders to be held May 15,
1997, and is incorporated herein by reference. KeyCorp expects to file its final
proxy statement on or about April 7, 1997.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The information required by this item is set forth in the section captioned
"Issue One -- ELECTION OF DIRECTORS" contained in KeyCorp's definitive Proxy
Statement for the 1997 Annual Meeting of Shareholders to be held May 15, 1997,
and is incorporated herein by reference. KeyCorp expects to file its final proxy
statement on or about April 7, 1997.
8
<PAGE> 11
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
(a) (1) FINANCIAL STATEMENTS
The following financial statements of KeyCorp and its subsidiaries, and the
auditor's report thereon, are incorporated herein by reference to the pages
indicated in the Financial Review section of KeyCorp's 1996 Annual Report to
Shareholders:
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Consolidated Financial Statements:
Report of Ernst & Young LLP, Independent Auditors.......................... 41
Consolidated Balance Sheets at December 31, 1996 and 1995.................. 42
Consolidated Statements of Income for the Years Ended December 31, 1996,
1995 and 1994........................................................... 43
Consolidated Statements of Changes in Shareholders' Equity for the Years
Ended December 31, 1996, 1995 and 1994.................................. 44
Consolidated Statements of Cash Flow for the Years Ended December 31, 1996,
1995 and 1994........................................................... 45
Notes to Consolidated Financial Statements................................. 46
</TABLE>
(a) (2) FINANCIAL STATEMENT SCHEDULES
All financial statement schedules for KeyCorp and its subsidiaries have been
included in the consolidated financial statements or the related footnotes, or
they are either inapplicable or not required.
(a) (3) EXHIBITS*
<TABLE>
<S> <C>
3.1 Amended and Restated Articles of Incorporation of KeyCorp. Filed as Exhibit
7 to Form 8-A/A filed on February 25, 1994, and incorporated herein by
reference.
3.2 Regulations of KeyCorp. Filed as Exhibit 6 to Form 8-A/A filed on February
25, 1994, and incorporated herein by reference.
4.1 Rights Agreement, dated as of August 25, 1989, between Society Corporation
and First Chicago Trust Company of New York, as Rights Agent. Filed as
Exhibit 1 to Form 8-A filed on August 29, 1989, and incorporated herein by
reference.
4.2 First Amendment to Rights Agreement, dated as of February 21, 1991, between
Society Corporation and First Chicago Trust Company of New York, as Rights
Agent. Filed as Exhibit 1 to Form 8-A filed on February 28, 1991, amending
Registration Statement on Form 8-A filed August 29, 1989, and incorporated
herein by reference.
4.3 Second Amendment to Rights Agreement, dated as of September 12, 1991,
between Society Corporation and First Chicago Trust Company of New York, as
Rights Agent.
4.4 Resignation of First Chicago Trust Company of New York as Rights Agent and
appointment of Society National Bank as Rights Agent effective July 1, 1992.
Filed as Exhibit 4.4 to Form 10-K for the year ended December 31, 1992, and
incorporated herein by reference.
4.5 Third Amendment to Rights Agreement, dated as of October 1, 1993, between
Society Corporation and Society National Bank, as Rights Agent. Filed as
Exhibit 4 to Schedule 13D filed on October 12, 1993, and incorporated herein
by reference.
10.1 KeyCorp Short Term Incentive Compensation Plan (January 1, 1997
Restatement).
10.2 KeyCorp Long Term Cash Incentive Compensation Plan (January 1, 1997
Restatement).
</TABLE>
9
<PAGE> 12
<TABLE>
<S> <C>
10.3 KeyCorp Supplemental Retirement Plan (August 1, 1996 Amendment and
Restatement).
10.4 Amended and Restated Employment Agreement between KeyCorp and Roger Noall,
dated July 19, 1995. Filed as Exhibit 10.1 to Form 10-Q for the quarter
ended September 30, 1995, and incorporated herein by reference.
10.5 Employment Agreement between KeyCorp and Gary Allen, dated July 1, 1993.
Filed as Exhibit 10.14 to Form 10-K for the year ended December 31, 1994,
and incorporated herein by reference.
10.6 Employment Agreement between KeyCorp and K. Brent Somers, dated February 5,
1996. Filed as Exhibit 10 to Form 10-Q for the quarter ended March 31, 1996,
and incorporated herein by reference.
10.7 Amended and Restated Director Deferred Compensation Plan (April 15, 1996
Amendment and Restatement). Filed as Exhibit 10 to Form 10-Q for the quarter
ended June 30, 1996, and incorporated herein by reference.
10.8 KeyCorp Universal Life Insurance Plan. Filed as Exhibit 10.15 to Form 10-K
for the year ended December 31, 1993, and incorporated herein by reference.
10.9 KeyCorp Supplemental Long Term Disability Plan. Filed as Exhibit 10.16 to
Form 10-K for the year ended December 31, 1993, and incorporated herein by
reference.
10.10 Society Corporation 1984 Stock Option Plan, as amended. Filed as Exhibit
10.14 to Form 10-K for the year ended December 31, 1995, and incorporated
herein by reference.
10.11 Society Corporation 1988 Stock Option Plan, amended as of September 19,
1996.
10.12 1987 Stock Option Plan of Trustcorp, Inc. Filed as Exhibit 10.16 to Form
10-K for the year ended December 31, 1995, and incorporated herein by
reference.
10.13 KeyCorp Amended and Restated 1991 Equity Compensation Plan (Amended as of
September 19, 1996).
10.14 Restatement of the Ameritrust Long-Term Incentive Plan as the Ameritrust
Stock Option Plan. Filed as Exhibit 10.19 to Form 10-K for the year ended
December 31, 1995, and incorporated herein by reference.
10.15 Trust Agreement (Executive Benefits Rabbi Trust), dated November 3, 1988.
Filed as Exhibit 10.20 to Form 10-K for the year ended December 31, 1995,
and incorporated herein by reference.
10.16 Ameritrust Corporation Deferred Compensation Plan. Filed as Exhibit 10.21 to
Form 10-K for the year ended December 31, 1995, and incorporated herein by
reference.
10.17 Old KeyCorp Supplemental Disability Plan (Specimen Document).
10.18 Form of Amendment to Employment Agreement and Severance Agreement for old
KeyCorp executives. Filed as Exhibit 10.37 to Form 10-K for the year ended
December 31, 1993, and incorporated herein by reference.
10.19 KeyCorp Directors' Stock Option Plan (November 17, 1994 Restatement). Filed
as Exhibit 10.37 to Form 10-K for the year ended December 31, 1994, and
incorporated herein by reference.
10.20 KeyCorp 1988 Stock Option Plan (September 19, 1996 Amendment and
Restatement).
10.21 KeyCorp Excess Cash Balance Pension Plan, effective January 1, 1996. Filed
as Exhibit 10.30 to Form 10-K for the year ended December 31, 1995, and
incorporated herein by reference.
</TABLE>
10
<PAGE> 13
<TABLE>
<S> <C>
10.22 KeyCorp Excess 401(k) Savings Plan (January 1, 1997 Amendment and
Restatement).
10.23 KeyCorp Executive Deferred Compensation Plan, effective June 1, 1990.
10.24 KeyCorp Survivor Benefit Plan, effective September 1, 1990.
10.25 KeyCorp Directors' Survivor Benefit Plan, effective September 1, 1990.
10.26 KeyCorp Supplemental Retirement Benefit Plan for Key Executives, effective
July 1, 1990 and restated August 16, 1990.
10.27 KeyCorp Umbrella Trust for Executives, between KeyCorp and National Bank of
Detroit dated July 1, 1990.
10.28 KeyCorp Umbrella Trust for Directors, between KeyCorp and National Bank of
Detroit dated July 1, 1990.
10.29 KeyCorp Executive Supplemental Pension Plan, amended, restated and effective
August 1, 1996.
10.30 KeyCorp Supplemental Retirement Plan, amended, restated and effective August
1, 1996.
10.31 KeyCorp Cash Balance Pension Plan, amended, restated and effective August 1,
1996.
10.32 Form of Change of Control Agreements between KeyCorp and certain executive
officers of KeyCorp effective October 15, 1996.
10.33 Amended and Restated Employment Agreement between KeyCorp and Robert W.
Gillespie effective November 21, 1996.
10.34 Form of Stock Performance Option Grant between KeyCorp and Robert W.
Gillespie, dated January 15, 1997.
10.35 Form of Stock Performance Option Grants between KeyCorp and certain
executive officers of KeyCorp, dated January 15, 1997.
10.36 KeyCorp Deferred Compensation Plan, effective January 1, 1997.
11 Statement re: Computation of Per Share Earnings.
12 Statement re: Computation of Ratios.
13 KeyCorp 1996 Annual Report to Shareholders.
21 Subsidiaries of the Registrant.
23 Consent of Ernst & Young LLP, Independent Auditors.
24 Powers of Attorney.
27 Financial Data Schedule.
</TABLE>
The Corporation hereby agrees to furnish the Securities and Exchange Commission
upon request, copies of instruments outstanding, including indentures, which
define the rights of long-term debt security holders.
All documents listed as Exhibits 10.1 through 10.36 constitute management
contracts or compensatory plans or arrangements.
* Copies of these Exhibits have been filed with the Securities and Exchange
Commission. Shareholders may obtain a copy of any exhibit, upon payment of
reproduction costs, by writing KeyCorp Investor Relations, at 127 Public
Square (Mailcode OH-01-27-1113), Cleveland, OH 44114-1306.
11
<PAGE> 14
(b) REPORTS ON FORM 8-K
<TABLE>
<S> <C>
October 18, 1996 -- Item 5. Other Events and Item 7. Financial Statements, Pro Forma
Financial Statements and Exhibits. Reporting that the Registrant issued
a press release on October 16, 1996, announcing its earnings results
for the three- and nine-month periods ended September 30, 1996.
November 25, 1996 -- Item 5. Other Events. Reporting that the Registrant issued a press
release on November 25, 1996, announcing strategic actions that have
been or will be undertaken in the next year to complete the
transformation to a nationwide, bank-based financial services company.
</TABLE>
No other reports on Form 8-K were filed during the fourth quarter of 1996.
12
<PAGE> 15
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF SECTIONS 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934, THE REGISTRANT HAS DULY CAUSED THIS REPORT TO BE SIGNED ON ITS
BEHALF BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED, ON THE DATE INDICATED.
KEYCORP
/S/ THOMAS C. STEVENS
--------------------------------------
THOMAS C. STEVENS
Executive Vice President,
General Counsel and Secretary
March 13, 1997
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES EXCHANGE ACT OF 1934, THIS REPORT
HAS BEEN SIGNED BELOW BY THE FOLLOWING PERSONS ON BEHALF OF THE REGISTRANT AND
IN THE CAPACITIES AND ON THE DATE INDICATED.
<TABLE>
<CAPTION>
SIGNATURE TITLE
- ---------------------- ----------------------
<S> <C>
* Robert W. Gillespie Chairman, President
and
Chief Executive
Officer (Principal
Executive Officer)
* K. Brent Somers Senior Executive Vice
President and Chief
Financial Officer
(Principal Financial
Officer)
* Lee G. Irving Executive Vice
President and Chief
Accounting Officer
(Principal Accounting
Officer)
* Cecil D. Andrus Director
* William G. Bares Director
* Albert C. Bersticker Director
<CAPTION>
SIGNATURE TITLE
- ---------------------- ----------------------
<S> <C>
* Kenneth M. Curtis Director
* John C. Dimmer Director
* Lucie J. Fjeldstad Director
* Stephen R. Hardis Director
* Henry S. Hemingway Director
* Charles R. Hogan Director
* Douglas J. McGregor Director
* Henry L. Meyer III Vice Chairman and
Director
* Steven A. Minter Director
* M. Thomas Moore Director
* Ronald B. Stafford Director
* Dennis W. Sullivan Director
* Peter G. Ten Eyck, Director
II
* Nancy B. Veeder Director
</TABLE>
/s/ Thomas C. Stevens
*By Thomas C. Stevens, attorney-in-fact
March 13, 1997
13
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-4.3
<SEQUENCE>2
<DESCRIPTION>EXHIBIT 4.3
<TEXT>
<PAGE> 1
Exhibit 4.3
SECOND AMENDMENT
TO
RIGHTS AGREEMENT
THIS SECOND AMENDMENT TO RIGHTS AGREEMENT (this "Amendment") is entered
into as of September 12, 1991, between Society Corporation, an Ohio corporation
(the "Company), and First Chicago Trust Company of New York, as Rights Agent
(the "Rights Agent"). This Amendment modifies and amends the Rights Agreement,
dated as of August 25, 1989, between the Company and the Rights Agent, as
modified and amended by the First Amendment to Rights Agreement, dated as of
February 21, 1991, also between the Company and the Rights Agent (the Rights
Agreement as amended being herein referred to as the "Rights Agreement") .
W I T N E S E T H:
------------------
WHEREAS, on August 17, 1989, the Board of Directors of the Company
authorized and declared a dividend consisting of one right (a "Right") for each
Common Share, with a par value of $1 each (a "Common Share"), of the Company
outstanding on September 12, 1989 (the "Record Date"), each Right initially
representing the right to purchase one Common Share of the Company, upon the
terms and subject to the conditions set forth in the Rights Agreement, and
further authorized the issuance of one Right in respect of each Common Share of
the Company that is (i) issued after the Record Date but before the earlier of
the occurrence of a Triggering Event and the Expiration Date (as such terms are
defined in the Rights Agreement), (ii) issued after the Record Date but
<PAGE> 2
before the Expiration Date in exchange for Common Stock, par value $1.00
per share, of Trustcorp, Inc., a Delaware corporation, upon consummation of the
merger of Trustcorp, Inc. into the Company, or (iii) issued upon exercise, after
the Record Date but before the Expiration Date, of any employee stock option
granted by the Company prior to the occurrence of a Triggering Event; and
WHEREAS, the Rights remain issued and outstanding as of the date hereof
and the Rights Agreement remains in effect with respect thereto; and
WHEREAS, as of the date hereof no Triggering Event or Shares Acquisition
Date has occurred; and
WHEREAS, the Company and Ameritrust Corporation, a Delaware corporation
("Ameritrust"), propose to enter into a Society Corporation Stock Option
Agreement (the "Stock Option Agreement") pursuant to which the Company will
grant to Ameritrust an option to acquire Common Shares of the Company subject to
and in accordance with the terms and conditions set forth in the Stock Option
Agreement; and
WHEREAS, the Company and Ameritrust propose to enter into an Agreement
and Plan of Merger (the "Merger Agreement") pursuant to which Ameritrust will
merge with and into the Company, which will be the surviving corporation in the
merger, subject to and in accordance with the terms and conditions set forth in
the Merger Agreement; and
WHEREAS, in connection with the anticipated
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<PAGE> 3
approval, execution, and delivery of the Stock Option Agreement and the Merger
Agreement, the Board of Directors of the Company has adopted, in accordance with
Section 26 of the Rights Agreement, a resolution approving this Amendment and
directing the appropriate officers of the Company to take all appropriate steps
to execute, deliver, and put into effect this Amendment, and an appropriate
officer of the Company has provided a certificate to the Rights Agent as
provided for in Section 26 of the Rights Agreement.
NOW, THEREFORE, in consideration of the premises and mutual agreements
herein set forth, the parties hereby agree as follows:
1. AMENDMENT OF SECTION 1(a). Section 1(a) of the Rights Agreement is
amended to read as follows:
(a) An "Acquiring Person" means any Person (other than the
Company, any Subsidiary, any employee benefit plan or employee stock
ownership plan of the Company or of any Subsidiary, or any Person
organized, appointed, or established by the Company or any Subsidiary for
or pursuant to the terms of any such plan) that, together with all
Affiliates and Associates of the Person, is the Beneficial Owner of more
than 15% of the Common Shares of the Company then outstanding, except that
(i) a Person will not be deemed to be an Acquiring Person if the Person
becomes the Beneficial Owner of more than 15% of the Common Shares as a
result of a reduction in the number of Common Shares outstanding unless
subsequent to the reduction the Person, or any Affiliate or Associate of
the Person, becomes the Beneficial Owner of any additional Common Shares
other than as a result of a stock dividend, stock split, or similar
transaction effected by the Company in which all shareholders are treated
equally, (ii) a Person will not be deemed to be an Acquiring Person if the
Person becomes the Beneficial Owner of more than 15% of the Common Shares
inadvertently and, as soon as practicable after the Person learns
-3-
<PAGE> 4
about such beneficial ownership, divests a sufficient number of Common
Shares so that the Person ceases to be the Beneficial Owner of more than 15%
of the Common Shares, and (iii), for purposes of this Section 1(a), neither
Ameritrust nor any Affiliate or Associate of Ameritrust shall be deemed to
be the Beneficial Owner of Common Shares of the Company by reason of the
approval, execution, or delivery of the Stock Option Agreement, the Merger
Agreement, or both, or by reason of the consummation of any transaction
contemplated by the Stock Option Agreement, the Merger Agreement, or both,
so long as Ameritrust or any Subsidiary of Ameritrust is not the Beneficial
Owner of any Common Shares of the Company other than (A) Common Shares of
the Company of which Ameritrust or any Subsidiary of Ameritrust is or
becomes the Beneficial Owner by reason of the approval, execution, or
delivery of the Stock Option Agreement, the Merger Agreement, or both, or by
reason of the consummation of any transaction contemplated by the Stock
Option Agreement, the Merger Agreement, or both, (B) Common Shares of the
Company Beneficially Owned by Ameritrust or any Subsidiary of Ameritrust on
September 12, 1991, or Common Shares of the Company acquired after September
12, 1991 by any Affiliate or Associate of Ameritrust (other than a
Subsidiary of Ameritrust), (C) Common Shares of the Company of which
Ameritrust or any Subsidiary of Ameritrust inadvertently becomes the
Beneficial Owner after September 12, 1991, provided that the number of such
Common Shares does not exceed 1/2% of the Common Shares of the Company then
outstanding and that Ameritrust or any such Subsidiary, as the case may be,
divests such Common Shares as soon as practicable after it learns about such
beneficial ownership, and (D) Common Shares of the Company Beneficially
Owned or otherwise held by Ameritrust or any Subsidiary of Ameritrust in
trust accounts or otherwise acquired in the ordinary course of its banking
or trust business.
2. AMENDMENT OF SECTION 1(i). Section 1(i) of the Rights Agreement
is amended to read as follows:
(i) A "Flip-in Event" means any event described in paragraphs
(A), (B), and (C) of Section 11(a)(ii), except that no Flip-in Event shall
be deemed to have occurred under any of the circumstances set forth in
Section 34 of this Agreement.
-4-
<PAGE> 5
3. AMENDMENT OF SECTION 1(j). Section 1(j) of the Rights Agreement
is amended to read as follows:
(j) A "Flip-over Event" means any event described in clauses
(x), (y), and (z) of Section 13(a), except that no Flip-over Event shall be
deemed to have occurred under any of the circumstances set forth in Section
34 of this Agreement.
4. AMENDMENT OF SECTION 1(p). Section 1(p) of the Rights Agreement
is amended to read as follows:
(p) The "Shares Acquisition Date" means the first date of public
announcement by the Company or by an Acquiring Person (whether by press
release, filing made with the Securities and Exchange Commission, or
otherwise) that a person has become an Acquiring Person, except that no
Shares Acquisition Date shall be deemed to have occurred under any of the
circumstances set forth in Section 34 of this Agreement.
5. AMENDMENT OF SECTION 1(s). Section 1(s) of the Rights Agreement
is amended to read as follows:
(s) A "Triggering Event" is deemed to occur (i) at the close of
business on the 20th calendar day following the occurrence of a Flip-in
Event or (ii) upon the occurrence of a Flip-over Event, except that no
Triggering Event shall be deemed to have occurred under any of the
circumstances set forth in Section 34 of the Rights Agreement.
6. ADDITION OF SECTION 1(t). A new Section 1(t) is added to the
Rights Agreement, to read as follows:
(t) The "Merger Agreement" shall mean the Agreement and Plan of
Merger, dated as of September 12, 1991, by and between Ameritrust and the
Company, as the same may be from time-to-time amended.
7. ADDITION OF SECTION 1(u). A new Section 1(u) is added to the
Rights Agreement, to read as follows:
-5-
<PAGE> 6
(u) "Ameritrust" shall mean Ameritrust Corporation, a Delaware
corporation, and its successors.
8. ADDITION OF SECTION 1(v). A new Section 1(v) is added to the
Rights Agreement, to read as follows:
(v) "Stock Option Agreement" shall mean the Society Corporation
Stock Option Agreement, dated as of September 12, 1991, by and between
Ameritrust and the Company, as the same may be from time-to-time amended.
9. AMENDMENT OF SECTION 3(a). Section 3(a) of the Rights
Agreement is amended to read as follows:
(a) Except as otherwise provided in Section 34 of this
Agreement, until the earlier of (i) the close of business on the 20th
calendar day after the Shares Acquisition Date or (ii) the close of business
on the 20th calendar day after the date of the commencement by any Person
(other than the Company, any Subsidiary, any employee benefit plan or
employee stock ownership plan of the Company or of any Subsidiary, or any
Person organized, appointed, or established by the Company or any Subsidiary
for or pursuant to the terms of any such plan), of a tender offer or
exchange offer the consummation of which would result in the Person making
the tender offer or exchange offer becoming an Acquiring Person (the earlier
of these dates is referred to as the "Distribution Date"), the Rights will
be evidenced (subject to the provisions of Section 3(b)) by the certificates
for Common Shares of the Company registered in the names of the holders of
the Common Shares (which certificates for Common Shares shall also be deemed
to be certificates for Rights) and not by separate Right certificates, and
the Rights will be transferable only in connection with the transfer of the
Common Shares on the transfer books of the Company maintained by the Company
or its transfer agent. As soon as practicable after the Distribution Date,
the Rights Agent will send, by first-class, insured, postage prepaid mail,
to each record holder of Common Shares as of the close of business on the
Distribution Date at the address of the holder shown on the records of the
Company or its transfer agent, a Right certificate, in substan-
-6-
<PAGE> 7
tially the form of Exhibit A ("Right Certificate"), evidencing one Right
for each Common Share held of record as of the close of business on the
Distribution Date. From and after the close of business on the Distribution
Date, the Rights will be evidenced solely by the Right Certificates.
10. AMENDMENT OF SECTION 3(c). Section 3(c) of the Rights
Agreement is amended to read as follows:
(c) Rights shall be issued in respect of all Common Shares that
are (i) issued after the Record Date but before the earlier of the
occurrence of a Triggering Event or the Expiration Date, (ii) issued after
the Record Date but before the Expiration Date in exchange for Common
Stock, par value $1.00 per share, of Trustcorp, Inc., a Delaware
corporation, upon consummation of the merger of Trustcorp, Inc. into the
Company, (iii) issued after the Record Date but before the Expiration Date
in exchange for Common Stock, par value $l.66-2/3 per share, of Ameritrust
upon consummation of the merger of Ameritrust into the Company or issued
pursuant to the Stock Option Agreement, or (iv) issued upon exercise, after
the Record Date but before the Expiration Date, of any employee stock
option granted by the Company prior to the occurrence of a Triggering
Event. In the event that any Rights are issued in accordance with this
Section 3(c) and, at the time of issuance, a Flip-in Event or Flip-over
Event has occurred, such Rights shall be entitled to the same rights and
privileges as if issued prior to the occurrence of the Flip-in Event or
Flip-over Event. Certificates representing Common Shares issued or
surrendered for transfer or exchange after September 12, 1991, but prior to
the earlier of the Distribution Date or the Expiration Date shall bear the
following legend:
This certificate also evidences and entitles
the holder to certain Rights as set forth in a
Rights Agreement between Society Corporation
and First Chicago Trust Company of New York,
Rights Agent, dated as of August 25, 1989, as
amended from time to time (the "Rights Agree-
ment"), the terms of which are hereby incorpo-
rated in this certificate by reference and a
copy of which is on file at the principal exec-
utive offices of Society Corporation. Under
-7-
<PAGE> 8
certain circumstances, as set forth in the Rights
Agreement, the Rights will be evidenced by separate
certificates and will no longer be evidenced by this
certificate. Society Corporation will mail to the
holder of this certificate a copy of the Rights
Agreement (as in effect on the date of mailing) without
charge promptly after receipt of a written request
therefor. Under certain circumstances, Rights that
are or were beneficially owned by an Acquiring Person
or an Affiliate or Associate of an Acquiring Person
(as these terms are defined in the Rights Agreement)
and any subsequent holder may become null and void.
Until the Distribution Date, the Rights associated with the Common Shares
represented by certificates containing the foregoing legend shall be
evidenced by the certificates alone, and the surrender for transfer of any
such certificate shall also constitute the surrender for transfer of the
Rights associated with the Common Shares represented by the certificate.
11. AMENDMENT OF SECTION 7(a). Section 7(a) of the Rights
Agreement is amended to read as follows:
(a) Subject to Section 7(e) and Section 34, the registered
holder of any Right Certificate may exercise the Rights evidenced by the
Right Certificate (except as otherwise provided in this Agreement), in
whole or in part, at any time after the Distribution Date upon surrender of
the Right Certificate, with the form of election to purchase and the
certificate on the reverse side duly executed, to the Rights Agent at its
office in New York, together with payment of the aggregate Purchase Price
(or, upon the occurrence of a Triggering Event, the aggregate Exercise
Price) with respect to the number of Common Shares as to which the
surrendered Rights are being exercised, at or prior to the close of
business on the earlier of (i) September 12, 1999 (the "Final Expiration
Date") and (ii) the date on which the Rights are redeemed as provided in
Section 23 (the earlier of these dates is referred to as the "Expiration
Date").
-8-
<PAGE> 9
12. AMENDMENT OF SECTION 11(a)(ii). Section 11(a) (ii) (A)
of the Rights Agreement is amended to read as follows:
(A) any Person (other than the Company, any Subsidiary, any
employee benefit plan or employee stock ownership plan of the Company or of
any Subsidiary, or any Person organized, appointed, or established by the
Company or any Subsidiary for or pursuant to the terms of any such plan),
alone or together with any of its Affiliates or Associates, becomes the
Beneficial Owner of more than 15% of the Common Shares of the Company then
outstanding, except that this clause (A) shall not apply (x) if the Person
becomes the Beneficial Owner of more than 15% of the Common Shares pursuant
to a tender offer or exchange offer for all outstanding Common Shares of
the Company at a price and on other terms determined by the Board of
Directors of the Company (prior to the purchase of Common Shares pursuant
to the tender or exchange offer) to be fair to and in the best interests of
the Company and its shareholders, employees, customers, and other
constituencies, (y) if the Person becomes the Beneficial Owner of more than
15% of the Common Shares as a result of a reduction in the number of Common
Shares then outstanding unless subsequent to the reduction the Person, or
any Affiliate or Associate of the Person, becomes the Beneficial Owner of
any additional Common Shares other than as a result of a stock dividend,
stock split, or similar transaction effected by the Company in which all
shareholders are treated equally, or (z) if the Person becomes the
Beneficial Owner of more than 15% of the Common Shares inadvertently and,
as soon as practicable after the Person learns about such beneficial
ownership, divests a sufficient number of Common Shares so that the Person
ceases to be the Beneficial Owner of more than 15% of the Common Shares,
and except further that, for purposes of this Clause (A), neither
Ameritrust nor any Affiliate or Associate of Ameritrust shall be deemed to
be the Beneficial Owner of Common Shares of the Company by reason of the
approval, execution, or delivery of the Stock Option Agreement, the Merger
Agreement, or both, or by reason of the consummation of any transaction
contemplated by the Stock Option Agreement, the Merger Agreement, or both,
so long as Ameritrust or any Subsidiary of Ameritrust is not the Beneficial
Owner of any Common Shares of the Company other than (A) Common Shares of
the Company of which Ameritrust
-9-
<PAGE> 10
or any subsidiary of Ameritrust is or becomes the Beneficial Owner by
reason of the approval, execution, or delivery of the Stock Option
Agreement, the Merger Agreement, or both, or by reason of the consummation
of any transaction contemplated by the Stock Option Agreement, the Merger
Agreement, or both, (B) Common Shares of the Company Beneficially Owned by
Ameritrust or any Subsidiary of Ameritrust on September 12, 1991, or Common
Shares of the Company acquired after September 12, 1991 by any Affiliate or
Associate of Ameritrust (other than a Subsidiary of Ameritrust), (C) Common
Shares of the Company of which Ameritrust or any Subsidiary of Ameritrust
inadvertently becomes the Beneficial Owner after September 12, 1991,
provided that the number of such Common Shares does no exceed 1/2% of the
Common Shares of the Company then outstanding and that Ameritrust or any
such Subsidiary, as the case may be, divests such Common Shares as soon as
practicable after it learns about such beneficial ownership, and (D) Common
Shares of the Company Beneficially Owned or otherwise held by Ameritrust or
any Subsidiary of Ameritrust in trust accounts or otherwise acquired in the
ordinary course of its banking or trust business, or
13. ADDITION OF SECTION 34. A new Section 34
is added to the Rights Agreement, to read as follows:
34. CERTAIN EVENTS. Notwithstanding any provision of this
Agreement to the contrary, no Distribution Date, Shares Acquisition Date,
Flip-In Event, Flip-over Event, or Triggering Event shall be deemed to have
occurred, and no holder of Rights shall be entitled to exercise the Rights
under or be entitled to any rights pursuant to Sections 7(a), il(a), or
13(a) of this Agreement, solely by reason of the approval, execution, or
delivery of the Stock Option Agreement, the Merger Agreement, or both, or
solely by reason of the consummation of any transaction contemplated by the
Stock Option Agreement, the Merger Agreement, or both, except that in the
event Ameritrust or any Subsidiary of Ameritrust becomes the Beneficial
Owner of any Common Shares of the Company other than pursuant to clauses
(i), (ii), or (iii) of Section 1(a) above, the provisions of this Section
34 shall not be applicable.
14. EFFECTIVENESS. This Amendment shall be deemed to be in force
and effective immediately upon execution
-10-
<PAGE> 11
and delivery of the Stock Option Agreement, the Merger Agreement, or both.
Except as amended hereby, the Rights Agreement shall remain in full force and
effect and shall be otherwise unaffected hereby.
15. MISCELLANEOUS.
(a) This Amendment shall be binding upon and shall inure to the
benefit of each of the parties and their respective successors and assigns.
(b) Unless otherwise defined herein, all defined terms used herein
shall have the same meanings given to them in the Rights Agreement.
(c) This Amendment shall be deemed to be a contract made under the
substantive laws of the State of Ohio and for all purposes shall be governed by
and construed in accordance with the internal substantive laws of such State
applicable to contracts to be made and performed entirely within such State.
(d) This Amendment may be executed in any number of counterparts,
each of which shall for all purposes be deemed an original and all of which
shall together constitute but one and the same instrument.
(e) If any term, provision, covenant, or restriction of this
Amendment is held by a court of competent jurisdiction or other authority to be
invalid, illegal, or unenforceable, the remainder of the terms, provisions,
covenants, and restrictions of this Amendment
-11-
<PAGE> 12
shall remain in full force and effect and shall in no way be affected, impaired,
or invalidated.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed as of the day and year first above written.
SOCIETY CORPORATION
By:/s/ Robert W. Gillespie
-----------------------
Name: Robert W. Gillespie
Title: Chairman of the
Board and Chief
Executive Officer
FIRST CHICAGO TRUST COMPANY OF
NEW YORK
By:/s/ John C. Bambach
-----------------------
Name: John C. Bambach
Title: Vice President
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.1
<SEQUENCE>3
<DESCRIPTION>EXHIBIT 10.1
<TEXT>
<PAGE> 1
Exhibit 10.1
KEYCORP
SHORT TERM INCENTIVE COMPENSATION PLAN
(JANUARY 1, 1997 RESTATEMENT)
KeyCorp (the "Corporation") hereby establishes this Short Term
Incentive Compensation Plan for the purpose of providing an incentive to
selected key officers of the Corporation and its subsidiaries.
ARTICLE I
DEFINITIONS
-----------
For the purposes hereof, the following words and phrases shall have the
meanings indicated:
1. A "Beneficiary" shall mean any person designated by a
Participant in accordance with the Plan to receive payment of all or a portion
of any Incentive Compensation Award for which the Participant is eligible at the
time of the Participant's death.
2. The "Committee" shall mean the Compensation and Organization
Committee of the Board of Directors of the Corporation or other Committee of the
Board of Directors hereafter succeeding to the responsibilities currently
performed by the Compensation and Organization Committee with respect to the
Plan.
3. A "Deferred Compensation Account" shall mean the bookkeeping
account to which any amount of an Incentive Compensation Award that has been
deferred pursuant to this Plan prior to January 1, 1997 shall be credited.
4. An "Incentive Compensation Award" shall mean the incentive
which may be paid to a Participant pursuant to the Plan for any calendar year.
5. "Market Point" shall mean for any Participant for any calendar
year the market point (as determined under the Corporation's salary
administration program) of such Participant's job grade at the end of the
calendar year; provided, however, that if the Corporation changes such
Participant's job grade during any such calendar year or such
1
<PAGE> 2
Participant is promoted, transferred, or otherwise moves into a different
job grade during such calendar year, then such Market Point shall be calculated
on a pro rata basis for each of the periods in which such job grades were in
effect for such Participant.
6. A "Participant" shall mean a senior officer of the Corporation
or one of its subsidiaries who is selected by the Committee to participate in
the Plan.
7. The "Plan" shall mean this Short Term Incentive Compensation
Plan, together with all amendments hereto.
8. "Plan Year" shall mean each calendar year for which the Plan
remains in existence.
9. "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 80 percent or more of the issued and outstanding stock is owned by the
Corporation or by a Subsidiary of the Corporation.
10. The "Target Incentive Compensation Pool" shall mean the
aggregate amount, as determined in accordance with Article II of the Plan, of
the aggregate individual target Incentive Compensation Awards of Participants.
11. "Target Pool Percentage" shall mean the percentage determined
pursuant to Article II, Section 2 below that will be used to establish the
aggregate amount available for Incentive Compensation Awards.
ARTICLE II
INCENTIVE COMPENSATION AWARDS
-----------------------------
1. PARTICIPATION. Annually, the Committee shall select the Participants
in the Plan for the Plan Year. In general, the selection will be made prior to
the beginning of each Plan Year or as soon thereafter as is reasonably possible;
in addition, such selection may be made at any time during a Plan Year in the
case of a newly hired employee or an employee that receives a new position. Not
in limitation of the foregoing, the Committee shall have the authority to
designate at the beginning of a Plan Year, or as soon thereafter as is
reasonably
2
<PAGE> 3
possible, employees in selected job grades as Participants, including any
employee that may later be hired or promoted into any such job grade during
the Plan Year, without further action on behalf of the Committee. Participants
shall be notified of their selection in writing. In the event that employees are
determined to be Participants by job grade, the Chief Executive Officer, or his
or her designee, may select additional eligible employees for Plan participation
notwithstanding their job grade. Employees otherwise eligible for participation
because of their job grade shall be excluded if they are participants in
business unit or similar incentive compensation plans.
2. INCENTIVE COMPENSATION POOL. As soon as practical after the end
of each Plan Year, the Committee shall determine the Target Pool Percentage (not
to exceed 200%) to be applied to the Target Incentive Compensation Pool to
establish the maximum aggregate amount to be distributed as Incentive
Compensation Awards. The guidelines for determining the percentage shall be
determined by the Committee prior to the Plan Year or as soon thereafter as is
reasonably possible.
Such individual target incentives for persons selected to be in the
Plan are as follows:
<TABLE>
<CAPTION>
Incentive Job Target Incentive As a
Group Grades Percent of Market Point
----- ------ -----------------------
<S> <C> <C>
I 95-96 50%
II 94 45%
III 92-93 40%
IV 90-91 35%
V 89 30%
VI 88 25%
VII 87 20%
VIII 85-86 15%
IX 84 and below 10%
</TABLE>
Target incentives for Participants who are eligible for part of the Plan Year or
whose incentive group assignment changed during the Plan Year will be calculated
on a pro rata basis for both the period of each incentive group assignment and
the period during the Plan Year in which the Participant was an eligible
employee. In the event that an individual whose job does not
3
<PAGE> 4
have an assigned salary grade is approved for participation in the Plan,
the Chief Executive Officer, or his or her designee, is authorized to select a
target incentive percentage for such individual and base the calculation of
target incentive and other calculations under this Plan on such individual's
base salary.
3. INCENTIVE COMPENSATION AWARDS. The Committee will determine the
amount of the Incentive Compensation Award for each Participant. No Incentive
Compensation Award may exceed the Participant's target incentive for the Plan
Year multiplied by the greater of (a) two hundred percent (200%) or (b) one
hundred fifty percent (150%) of the Target Pool Percentage. The Committee may
determine that a Participant shall receive no Incentive Compensation Award for
the Plan Year. Ordinarily, Incentive Compensation Awards shall be made only to
Participants who are actively employed at the end of the Plan Year; however,
Participants who retire or become disabled during a Plan Year, or the
Beneficiary(s) or estate of a Participant whose death occurs during a plan year
shall be entitled to, on a pro rata basis (for the period of time the
Participant was in the Plan for the Plan Year) the lesser of (i) the
Participant's target incentive or (ii) the Participant's target incentive times
the Target Pool Percentage if the Committee determines a Target Pool Percentage
of less than 100%.
4. PAYMENT OF INCENTIVE COMPENSATION AWARD. Incentive Compensation
Awards shall be paid on or prior to March 15 of the year following the Plan
Year. Notwithstanding any other provision of the Plan, the Committee, in its
sole discretion, shall have the authority to authorize payment of all or a
portion of all Incentive Compensation Awards prior to the end of the Plan Year,
and if a portion, the Corporation shall pay the remaining portion of the Award
on or prior to March 15 of the year following the Plan Year.
All Deferred Compensation Accounts for Incentive Compensation Awards
deferred prior to January 1, 1997 shall be transferred for record keeping
purposes to the KeyCorp Deferred Compensation Plan on January 1, 1997 and shall
be maintained in accordance with the provisions of such Deferred Compensation
Plan.
4
<PAGE> 5
Notwithstanding any other provision of the Plan, the Committee, in its
sole discretion, shall have the authority to require deferral of payment of all
or a portion of all Incentive Compensation Awards due to any Plan Participant if
the Committee determines that, based on the Corporation's estimated financial
results, the Corporation would be denied a deduction for federal income tax
purposes for such Award or the portion thereof by reason of Section 162(m) of
the Internal Revenue Code of 1986, as amended, and the regulations issued
thereunder, if the Award or the portion thereof were not so deferred. Such
deferred Incentive Compensation Awards, or the portion thereof, shall be
deferred in accordance with the provisions of the KeyCorp Deferred Compensation
Plan.
It is the intention of the Corporation and the Participants that the
Plan be unfunded for tax purposes and for the purposes of Title I of the
Employee Retirement Income Security Act of 1974, as amended.
ARTICLE III
ADMINISTRATION
--------------
The Corporation shall be responsible for the general administration of
the Plan and for carrying out the provisions hereof. The Committee shall have
all such powers as may be necessary to carry out its duties under the Plan,
including the power to determine all questions pertaining to claims for benefits
and procedures for claim review, and the power to resolve all other questions
arising under the Plan, including any questions of construction. The Corporation
and the Committee may take such further action as the Corporation and the
Committee shall deem advisable in the administration of the Plan. The actions
taken and the decisions made by the Corporation and the Committee hereunder
shall be final and binding upon all interested parties. In accordance with the
provisions of Section 503 of the Employee Retirement Income Security Act of
1974, as amended, the Committee shall provide a procedure for handling claims of
Participants or their Beneficiaries under this Plan. Such procedure shall be in
accordance with regulations issued by the Secretary of Labor and shall
6
<PAGE> 6
provide adequate written notice within a reasonable period of time with
respect to the denial of any such claims as well as a reasonable opportunity for
a full and fair review by the Committee of any such denial. Notwithstanding
anything to the contrary contained herein, the Corporation shall be the
"administrator" for the purpose of the Employee Retirement Income Security Act
of 1974, as amended. Any action authorized under the Plan to be done by the
Committee may be done by the Board of Directors or any other Board committee
authorized by the Board of Directors.
ARTICLE IV
AMENDMENT AND TERMINATION
-------------------------
The Corporation reserves the right to amend or terminate the Plan at
any time by action of its Board of Directors or a duly authorized committee
thereof.
ARTICLE V
MISCELLANEOUS
-------------
1. NOT AN EMPLOYMENT AGREEMENT. Nothing herein contained shall be
construed as a commitment to or agreement with any person employed by the
Corporation or a Subsidiary to continue such person's employment with the
Corporation or Subsidiary, and nothing herein contained shall be construed as a
commitment or agreement on the part of the Corporation or any Subsidiary to
continue the employment or the annual rate of compensation of any such person
for any period. All Participants shall remain subject to discharge to the same
extent as if the Plan had never been put into effect.
2. CLAIMS OF OTHER PERSONS. The provisions of the Plan shall in no
event be construed as giving any person, firm, or corporation any legal or
equitable right against the Corporation or any Subsidiary, their officers,
employees, agents, or directors, except any such rights as are specifically
provided for in the Plan or are hereafter created in accordance with the terms
and provisions of the Plan.
6
<PAGE> 7
3. ABSENCE OF LIABILITY. No member of the Board of Directors of the
Corporation or a Subsidiary or any officer or employee of the Corporation
or a Subsidiary shall be liable for any act or action hereunder, whether of
commission or omission.
4. SEVERABILITY. The invalidity or unenforceability of any
particular provisions of the Plan shall not affect any other provision hereof,
and the Plan shall be construed in all respects as if such invalid or
unenforceable provision were omitted herefrom.
5. GOVERNING LAW. The provisions of the Plan shall be governed and
construed in accordance with the laws of the State of Ohio.
KEYCORP
By: ________________________________
Roger Noall, Senior Executive Vice President
and Chief Administrative Officer
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.2
<SEQUENCE>4
<DESCRIPTION>EXHIBIT 10.2
<TEXT>
<PAGE> 1
Exhibit 10.2
LONG TERM CASH INCENTIVE COMPENSATION PLAN
(JANUARY 1, 1997 RESTATEMENT)
KeyCorp (the "Corporation") hereby establishes this Long Term Cash
Incentive Compensation Plan for the purpose of providing an incentive to
selected senior officers of the Corporation and its subsidiaries.
ARTICLE I
DEFINITIONS
-----------
For the purposes hereof, the following words and phrases shall have the
meanings indicated:
1. A "Beneficiary" shall mean any person designated by a Participant in
accordance with the Plan to receive payment of all or a portion of any Incentive
Compensation Award for which the Participant is eligible at the time of the
Participant's death.
2. Change of Control. A "Change of Control" shall be deemed to have
occurred if at any time 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.
(a) A Change of Control will have occurred under this clause (a)
if the Corporation is a party to a transaction pursuant to
which the Corporation
1
<PAGE> 2
is merged with or into, or is consolidated with, or becomes
the subsidiary of another corporation and either
(i) 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
(ii) 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.
(b) 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 Securities
Exchange Act of 1934, as amended (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)).
(c) A Change of Control will have occurred under this clause (c)
if either
(i) 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
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
2
<PAGE> 3
(ii) 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),
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):
(x) 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
transaction or series of transactions by any person
(as defined earlier in this subclause (x)).
(y) 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
3
<PAGE> 4
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.
(z) 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.
(d) 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.
3. The "Committee" shall mean the Compensation and Organization
Committee of the Board of Directors of the Corporation or other Committee of the
Board of Directors hereafter succeeding to the responsibilities currently
performed by the Compensation and Organization Committee with respect to the
Plan.
4. "Compensation Cycle" shall mean a period consisting of three
consecutive calendar years.
5. A "Deferred Compensation Account" shall mean the bookkeeping
account to which any amount of an Incentive Compensation Award that has been
deferred pursuant to this Plan prior to January 1, 1997 shall be credited.
6. An "Incentive Compensation Award" shall mean the incentive
which may be paid to a Participant pursuant to the Plan.
7. "Market Point" shall mean for any Participant the average market
point (as determined under the Corporation's salary administration program) of
such Participant's job grade at the end of each of the three years of the
applicable Compensation Cycle; provided, however, that if the Corporation
changes such Participant's job grade during any such year or such Participant is
promoted,
4
<PAGE> 5
transferred, or otherwise moves into a different job grade during such
year, then such Market Point shall be calculated on a pro rata basis for each of
the periods in which such job grades were in effect for such Participant.
8. A "Participant" shall mean a senior officer of the Corporation
or one of its subsidiaries who is selected by the Committee to participate in
the Plan.
9. The "Plan" shall mean this Long Term Cash Incentive
Compensation Plan, together with all amendments hereto.
10. "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 80 percent or more of the issued and outstanding stock is owned by the
Corporation or by a Subsidiary of the Corporation.
ARTICLE II
INCENTIVE COMPENSATION AWARDS
-----------------------------
1. PARTICIPATION. Annually, the Committee shall select the Participants
in the Plan for the Compensation Cycle and shall determine whether such
Participant shall be in Incentive Group I, Incentive Group II, or Incentive
Group III. The selection will be made prior to the beginning of each
Compensation Cycle or as soon thereafter as is reasonably possible. Participants
shall be notified of their selection in writing.
2. INCENTIVE COMPENSATION AWARDS. The Incentive Compensation Awards are
determined by applying a percentage to each Participant's target incentive. The
formula for determining the percentage shall be based on return on common equity
of the Corporation for the Compensation Cycle (i.e., average annual return on
common equity) and such formula shall be established by the Committee prior to
the beginning of a Compensation Cycle or as soon thereafter as is reasonably
possible. The Committee, in its sole discretion, may discontinue the
participation of an individual Participant; any such discontinued Participant
shall receive a pro rata Incentive Compensation Award after completion of the
Compensation Cycle; such pro rata
5
<PAGE> 6
payment shall be based on a fraction the numerator of which is the number of
months of the Compensation Cycle that are completed prior to such discontinuance
and the denominator of which is 36.
Individual target incentives are as follows:
<TABLE>
<CAPTION>
TARGET INCENTIVE
----------------
AS A PERCENT OF
---------------
INCENTIVE GROUP MARKET POINT
--------------- ------------
<S> <C>
I 30%
II 25%
III 20%
</TABLE>
In the event that the Committee approves participation in the Plan for an
individual whose job does not have an assigned job grade, the Committee is
authorized to base the calculation of target incentive and other calculations
under this Plan on such individual's base salary. As soon as practical after the
end of each Compensation Cycle, the Corporation shall compute the amount of the
Incentive Compensation Awards payable under the Plan for such Compensation Cycle
in accordance with the percentage determined by the formula. The Committee,
after consulting with the Chief Executive Officer or in its sole discretion,
reserves the right to increase or decrease the Incentive Compensation Awards of
all Participants by revising the computation of the Corporation's return on
common equity based on extraordinary circumstances that affected the
Corporation's financial performance; provided, however, if there occurs a Change
of Control, such authority to decrease the Incentive Compensation Awards shall
not apply to any Incentive Compensation Award, or any portion of Incentive
Compensation Award, earned on or prior to such Change of Control.
3. PAYMENT UPON DEATH, DISABILITY, RETIREMENT, AND PLAN TERMINATION.
Participants who retire at age 65 or older or become disabled during a
Compensation Cycle, or the Beneficiary(s) or the estate of a Participant whose
death occurs during a
6
<PAGE> 7
Compensation Cycle, shall receive a pro rata Incentive Compensation Award
after completion of the Compensation Cycle; such pro rata payment shall be
based on a fraction the numerator of which is the number of months of
the Compensation Cycle that are completed prior to such change in status
and the denominator of which is 36. The Committee may, in its sole
discretion, award a pro rata Incentive Compensation Award to Participants who
retire between the ages of 55 and 65, which pro rata payment will be calculated
in the same manner as set forth in the immediately preceding sentence. If a
Participant terminates employment during the Compensation Cycle for any reason
other than retirement, disability, or death, no Incentive Compensation Award
shall be payable to such Employee. In the event that a Participant dies prior to
receiving an Incentive Compensation Award, the Corporation shall pay any such
Incentive Compensation Award to the Participant's estate, unless the Participant
designates in writing that payment shall be made to a Beneficiary or
Beneficiaries. Such designation shall include the proportion to be paid to each
Beneficiary and indicate the disposition of such share if a Beneficiary does not
survive the Participant.
In the event of any termination of this Plan for any reason, the
guidelines or formulas for determining the Incentive Compensation Awards shall
be based on the performance of the Corporation from the beginning of such
Compensation Cycle to the calendar month end occurring just prior to the
effective date of the termination of the Plan. In the event of any such
termination of the Plan, the Committee shall have no right to decrease the
Incentive Compensation Awards computed in accordance with this Section and
Article II, Section 2 above. If this Plan is terminated during a Compensation
Cycle for any reason, including but not limited to a termination caused by a
Change of Control, each Participant shall receive a pro rata Incentive
Compensation Award based on the number of full months of the Compensation Cycle
that are completed prior to such termination of the Plan. In the event of any
such plan
7
<PAGE> 8
termination, the Corporation shall base such pro rata Incentive Compensation
Awards on the Corporation's performance for each full year of any
current Compensation Cycle and, for the year in which the termination occurs, on
the number of full months of such year prior to the effective date of such Plan
termination; the Corporation shall retain the services of the independent public
accountants used by the Corporation (prior to the plan termination) to determine
the financial performance for such partial year. The Corporation shall then
calculate such pro rata Incentive Compensation Award using the Corporation's
performance for each such full year and such partial year as determined above
(i.e., average monthly return on equity).
4. PAYMENT OF INCENTIVE COMPENSATION AWARD. Incentive Compensation
Award shall be paid on or prior to March 15 of the calendar year following the
end of the Compensation Cycle. Notwithstanding any other provision of the Plan,
the Committee, in its sole discretion, shall have the authority based on the
Corporation's estimated financial results for the Compensation Cycle to
authorize payment of all or a portion of all Incentive Compensation Awards prior
to the end of the Compensation Cycle, and if a portion, the Corporation shall
pay the remaining portion of the Award on or prior to March 15 of the calendar
year following the end of the Compensation Cycle.
All Deferred Compensation Accounts for Incentive Compensation Awards
deferred prior to January 1, 1997 shall be transferred for record keeping
purposes to the KeyCorp Deferred Compensation Plan on January 1, 1997 and shall
be maintained in accordance with the provisions of such Deferred Compensation
Plan.
Notwithstanding any other provision of the Plan, the Committee, in its
sole discretion, shall have the authority to require deferral of payment of all
or a portion of all Incentive Compensation Awards due to any Plan Participant if
the Committee determines that, based on the Corporation's estimated financial
results, the Corporation would be denied a deduction for federal income tax
purposes for such Award or the
8
<PAGE> 9
portion thereof by reason of Section 162(m) of the Internal Revenue Code of
1986, as amended, and the regulations issued thereunder, if the Award or the
portion thereof were not so deferred. Such deferred Incentive Compensation
Awards, or the portion thereof, shall be deferred in accordance with the
provisions of the KeyCorp Deferred Compensation Plan.
All payments of Incentive Compensation Awards shall be in cash from the
general assets of the Corporation or a Subsidiary, and Participants shall have
the status of general unsecured creditors of the Corporation.
It is the intention of the Corporation and the Participants that the
Plan be unfunded for tax purposes and for the purposes of Title I of the
Employee Retirement Income Security Act of 1974, as amended.
ARTICLE III
ADMINISTRATION
--------------
The Corporation shall be responsible for the general administration of
the Plan and for carrying out the provisions hereof. The Committee shall have
all such powers as may be necessary to carry out its duties under the Plan,
including the power to determine all questions pertaining to claims for benefits
and procedures for claim review, and the power to resolve all other questions
arising under the Plan, including any questions of construction. The Corporation
and the Committee may take such further action as the Corporation and the
Committee shall deem advisable in the administration of the Plan. The actions
taken and the decisions made by the Corporation and the Committee hereunder
shall be final and binding upon all interested parties. In accordance with the
provisions of Section 503 of the Employee Retirement Income Security Act of
1974, as amended, the Committee shall provide a procedure for handling claims of
Participants or their Beneficiaries under this Plan. Such procedure shall be in
accordance with regulations issued by the Secretary of Labor and shall provide
adequate written notice within a reasonable period of time with respect to the
9
<PAGE> 10
denial of any such claims as well as a reasonable opportunity for a full and
fair review by the Committee of any such denial. Notwithstanding anything to the
contrary contained herein, the Corporation shall be the "administrator" for the
purpose of the Employee Retirement Income Security Act of 1974, as amended. Any
action authorized under this Plan to be done by the Committee may be done by the
Board of Directors or any other Board committee authorized by the Board of
Directors.
ARTICLE IV
AMENDMENT AND TERMINATION
-------------------------
The Corporation reserves the right to amend or terminate the Plan at
any time by action of its Board of Directors or a duly authorized Committee
thereof. Unless the Committee determines otherwise prior to a Change of Control,
this Plan shall be automatically terminated on the effective date of any Change
of Control.
ARTICLE V
MISCELLANEOUS
-------------
1. NOT AN EMPLOYMENT AGREEMENT. Nothing herein contained shall be
construed as a commitment to or agreement with any person employed by the
Corporation or a Subsidiary to continue such person's employment with the
Corporation or Subsidiary, and nothing herein contained shall be construed as a
commitment or agreement on the part of the Corporation or any Subsidiary to
continue the employment or the annual rate of compensation of any such person
for any period. All Participants shall remain subject to discharge to the same
extent as if the Plan had never been put into effect.
2. CLAIMS OF OTHER PERSONS. The provisions of the Plan shall in no
event be construed as giving any person, firm, or corporation any legal or
equitable right as against the Corporation or any Subsidiary, their officers,
employees, agents, or directors, except any such rights as are specifically
provided for in the Plan or are hereafter created in accordance with the terms
and provisions of the Plan.
10
<PAGE> 11
3. ABSENCE OF LIABILITY. No member of the Board of Directors of
the Corporation or a Subsidiary or any officer or employee of the Corporation or
a Subsidiary shall be liable for any act or action hereunder, whether of
commission or omission.
4. SEVERABILITY. The invalidity or unenforceability of any
particular provisions of the Plan shall not affect any other provision hereof,
and the Plan shall be construed in all respects as if such invalid or
unenforceable provision were omitted herefrom.
5. GOVERNING LAW. The provisions of the Plan shall be governed
and construed in accordance with the laws of the State of Ohio.
KEYCORP
By: ______________________________________
Roger Noall, Senior Executive Vice President
and Chief Administrative Officer
11
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.3
<SEQUENCE>5
<DESCRIPTION>EXHIBIT 10.3
<TEXT>
<PAGE> 1
Exhibit 10.3
KEYCORP
SUPPLEMENTAL RETIREMENT PLAN
ARTICLE I
---------
THE PLAN
--------
The Society Corporation Supplemental Retirement Plan as originally
established effective as of May 14, 1981, and thereafter amended and restated in
its entirety, effective April 26, 1990 and January 1, 1993, and thereafter
amended and restated in its entirety effective January 1, 1995 as the KeyCorp
Supplemental Retirement Plan (the "Plan") is hereby amended and restated in its
entirety effective August 1, 1996. The Plan, as herein amended and restated,
supplements the retirement benefits of certain key employees of KeyCorp and its
subsidiaries who are covered by the Plan in accordance with the terms hereof.
The provisions of this Plan shall be applicable generally to all Grandfathered
Employees (as defined below).
ARTICLE II
----------
DEFINITIONS
-----------
2.1 MEANINGS OF DEFINITIONS. As used herein, the following words
and phrases shall have the meanings hereinafter set forth,
unless a different meaning is plainly required by the context:
(a) "AVERAGE INTEREST CREDIT" shall mean the average of the
Interest Credits (as defined in the Retirement Plan) for the
three (3) consecutive calendar years ending with the year of
the Grandfathered Employee's termination.
(b) "AVERAGE TREASURY RATE" shall mean the average of the Treasury
Rates (as defined in the Retirement Plan) for the three (3)
consecutive calendar years ending with the year of the
Grandfathered Employee's termination.
(c) "BENEFICIARY" shall mean Grandfathered Employee's surviving
spouse in the event the Grandfathered Employee dies before his
or her Supplemental Retirement Benefit shall have been
distributed to him or her.
(d) "COMPENSATION" for any Plan Year or any partial Plan year in
which the Grandfathered Employee incurs a severance from
service date shall mean the entire amount of base compensation
paid to such Grandfathered Employee during such period by
reason of his employment as an Employee as reported for
federal income tax purposes, or which would have been paid
except for (1) the timing of an Employer's payroll processing
operations, (2) the provisions of the
1
<PAGE> 2
KeyCorp 401(k) Savings Plan, or (3) the provisions of the
KeyCorp Flexible Benefits Plan, provided, however, that
the term shall more specifically exclude:
(i) any amount attributable to the Grandfathered
Employee's exercise of stock appreciation rights and
the amount of any gain to the Grandfathered Employee
upon the exercise of stock options;
(ii) any amount attributable to the Grandfathered
Employee's receipt of non-cash remuneration whether
or not it is included in the Grandfathered Employee's
income for federal income tax purposes;
(iii) any amount attributable to the Grandfathered
Employee's receipt of moving expenses and any
relocation bonus paid to the Grandfathered Employee
during the Plan Year;
(iv) any amount attributable to a lump sum severance
payment paid by an Employer or the Corporation to the
Grandfathered Employee;
(v) any amount attributable to fringe benefits (cash and
non-cash);
(vi) any amount attributable to any bonus or payment made
as an inducement for the Grandfathered Employee to
accept employment with an Employer;
(vii) any amount paid to the Grandfathered Employee during
the Plan year which is attributable to interest
earned on compensation deferred under a plan of an
Employer or the Corporation.
(viii) any amount attributable to salary deferrals paid to
the Grandfathered Employee during the Plan year,
which have been previously included as compensation
under the Plan; and
(ix) any amount paid for any period after the
Grandfathered Employee's termination or retirement
date.
(e) "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.
(f) "EARLY RETIREMENT DATE" shall mean the date of the
Grandfathered Employee's retirement from his or her employment
with an Employer on or after the Grandfathered Employee's
attainment of age 55 and completion of a minimum of ten years
of Benefit Service, but prior to the Grandfathered Employee's
Normal Retirement Date.
2
<PAGE> 3
(g) "EMPLOYEE" shall mean any person who is employed by an
Employer, provided, however, that as of December 31, 1994 all
Employees who are Plan Grandfathered Employees (other than
Grandfathered Employees) shall cease any further future
benefit accrual under the Plan and such Employees'
Supplemental Retirement Plan benefit shall be valued in
accordance with the provisions of Article IX hereof and
transferred to KeyCorp Excess Cash Balance Pension Plan.
Thereafter, effective January 1, 1995, the term "Employee"
shall include only Grandfathered Employees.
(h) "EMPLOYER" shall mean the Corporation and any of its
subsidiaries unless specifically excluded as an Employer for
Plan purposes by written action of an officer of the
Corporation and approved by the Corporation. An Employer's
participation shall be subject to any conditions or
requirements made by the Corporation, and each Employer shall
be deemed to appoint the Corporation as its exclusive agent
under the Plan as long as it continues as a subsidiary.
(i) "FINAL AVERAGE COMPENSATION" shall mean with respect to any
Employee the annual average of his highest aggregate
Compensation for any period of five consecutive years within
the period of ten consecutive full years immediately prior to
his retirement or other termination of employment, or any
termination of the Plan, whichever first occurs; provided,
however, that if an Employee is employed for less than five
consecutive years prior to such date, the term shall
mean the monthly average of the aggregate amount of his
Compensation for his entire period of employment, multiplied
by 12. If an Employee receives no Compensation for any
portion of such five consecutive years because of absence from
work, there shall be treated as Compensation received during
such period of absence an amount equal to the Compensation he
would have received had he not been absent, such amount to be
determined by the Corporation on the basis of such Employee's
salary or wage rate in effect immediately prior to such
absence; provided, however, that no Compensation shall be
credited hereunder for the period during which he is
permanently and totally disabled and for which he receives
benefits under the long term disability program maintained in
effect by his Employer.
(j) "GRANDFATHERED EMPLOYEE" shall mean an Employee who is listed
on Exhibit A attached hereto.
(k) "INCENTIVE COMPENSATION PLAN" shall mean the KeyCorp
Management Incentive Compensation Plan, the KeyCorp Short-Term
Incentive Compensation Plan, and the KeyCorp Long-Term
Incentive Compensation Plan, as may be amended from time to
time.
3
<PAGE> 4
(l) "NORMAL RETIREMENT DATE" shall mean the first day of the month
coinciding with or immediately following a Grandfathered
Employee's 65th birthday, or if later, the fifth anniversary
of the Participant's employment commencement date.
(m) "RETIREMENT PLAN" shall mean the KeyCorp Cash Balance Pension
Plan with all amendments, modifications and supplements which
may be made thereto, as in effect on the date of a
Grandfathered Employee's retirement, death, or other
termination of employment.
(n) "SUPPLEMENTAL RETIREMENT BENEFIT" shall mean the benefit paid
under this Plan as determined under Section 3.2.
All other capitalized and undefined terms used herein shall have the
meanings given them in the Retirement Plan for Employees of Society Corporation
and Subsidiaries (January 1, 1993 Restatement) ("Society Retirement Plan"),
unless a different meaning is plainly required by the context.
The masculine gender includes the feminine, and singular references
include the plural, unless the context clearly requires otherwise.
ARTICLE III
-----------
SUPPLEMENTAL RETIREMENT BENEFIT
-------------------------------
3.1 ELIGIBILITY. A Grandfathered Employee shall be eligible for a
Supplemental Retirement Benefit hereunder if the Grandfathered Employee (i)
retires on or after age 65 with five or more years of Credited Service, (ii)
terminates employment with an Employer on or after age 55 with ten or more years
of Benefit
4
<PAGE> 5
Service, (iii) terminates his active employment with an Employer upon
becoming Disabled after completing five or more years of Benefit Service and
disability benefits have ceased under the KeyCorp Long-Term Disability Plan due
to the Participant's election for Early or Normal Retirement under the
Retirement Plan, or (iv) dies after completing five or more years of Benefit
Service, and has a Beneficiary who is eligible for a benefit under the
Retirement Plan.
3.2 AMOUNT AND PAYMENT. The amount of a Grandfathered Employee's
Supplemental Retirement Benefit hereunder shall be determined as follows:
Effective as of December 5, 1989, the monthly Supplemental Retirement
Benefit payable to a Grandfathered Employee shall be such amount as is
required, when added to the monthly benefit payable (before the
reduction applicable to any optional method of payment) under the
Retirement Plan, to produce an aggregate monthly benefit equal to the
monthly benefit which would have been payable (determined without
regard to the annual limitation on Plan benefits imposed pursuant to
Section 415(b) of the Code, and $150,000 (as adjusted) limitation on
annual compensation taken into account under the Plan imposed pursuant
to Section 401(a)(17) of the Code, or the reduction applicable to any
optional method of payment) under either the Society Retirement Plan
formula in effect on and after January 1, 1989, or the applicable
Society Retirement Plan formula in effect prior to January 1, 1989,
whichever results in a larger monthly benefit, if there was added to
the Grandfathered Employee's Final Average Monthly Compensation an
amount equal to the monthly average of the highest five Incentive
Compensation Awards granted to him or her under the Incentive
Compensation Plan during the ten-year period preceding the earliest of
his retirement, death, disability, or other termination of employment.
Notwithstanding the foregoing, if a Grandfathered Employee was granted
fewer than five awards, such monthly average is determined by adding
the amounts of such awards and dividing by 60. Solely for purposes of
reference, the alternative benefit formulas in effect under the Society
Retirement Plan prior to January 1, 1989, and the eligibility criteria
applicable to each are reproduced in Exhibit B attached hereto.
3.3 EARLY RETIREMENT ELECTION. In the event the Grandfathered Employee
elects to receive his or her Supplemental Retirement Benefit on or after the
Grandfathered Employee's Early Retirement Date but prior to the Grandfathered
Employee's Normal Retirement Date, the Grandfathered Employee's Supplemental
Retirement Benefit shall be calculated in accordance with Section 3.2 and the
Grandfathered Employee's monthly benefit payable under the Retirement Plan for
purposes of this Section 3.3 shall be the Grandfathered Employee's Normal
Retirement Date. In calculating this Normal Retirement Date benefit, if the
Grandfathered Employee is not eligible for, or chooses not to elect his or her
monthly benefit under the provisions of Section 6.5(b) of the Retirement Plan,
then such Grandfathered Employee's Retirement Plan benefit as of his or her
termination date shall be increased for purposes of this Plan with an imputed
Average Interest Credit to reflect the Grandfathered Employee's benefit at his
or her Normal Retirement Date and shall be converted to the form of
5
<PAGE> 6
a single life annuity option using the Average Treasury Rate and GATT
Mortality Table. The amount of the Grandfathered Employee's monthly Supplemental
Retirement Benefit otherwise determined under this Section 3.3 hereof shall then
be reduced by .3% for each month between ages 55 and 60 and .4% for each month
after age 60 in which the commencement of the Grandfathered Employee's
Supplemental Retirement Benefit precedes his or her Normal Retirement Date.
3.4 ACTUARIAL FACTORS. The Supplemental Retirement Benefit payable to
a Grandfathered Employee or Grandfathered Employee's Beneficiary in a form other
than a single life annuity shall be actuarially equivalent to such single life
annuity payment option. In making the determination provided for in this Article
III, the Corporation shall rely upon calculations made by the independent
actuaries for the Plan, who shall determine actuarially equivalent benefits
under the Plan by applying the UP-1984 Mortality Table (set back two years) and
using an interest rate of 6%.
ARTICLE IV
----------
PAYMENT OF SUPPLEMENTAL RETIREMENT BENEFIT
------------------------------------------
4.1 IMMEDIATE PAYMENT UPON TERMINATION OR RETIREMENT OF GRANDFATHERED
EMPLOYEE. Subject to the provisions of Section 4.2 hereof, a Grandfathered
Employee meeting the age and service eligibility requirements of Section 3.1
shall receive an immediate distribution of his or her Supplemental Retirement
Benefit upon the Grandfathered Employee's retirement or termination of
employment, in the form of a single life annuity, unless the Grandfathered
Employee elects in writing a minimum of thirty days prior to his or her
retirement or termination date, to receive payment of his or her Supplemental
Retirement Benefit under a different form of payment. The forms of payment from
which a Grandfathered Employee may elect shall be identical to those forms of
payment specified in the Retirement Plan, provided, however, that the lump sum
payment option available under the Retirement Plan shall not be available under
this Plan. Such method of payment, once elected by the Grandfathered Employee,
shall be irrevocable.
4.2 DEFERRED BENEFIT PAYMENT. A Grandfathered Employee who retires
or terminates his or her employment with an Employer after meeting the age and
service requirements of Section 3.1, may elect to defer receipt of his or her
Supplemental Retirement Benefit until a date specified by the Grandfathered
Employee, provided, (1) the Grandfathered Employee notifies the Corporation in
writing of his or her deferral election a minimum of one year prior to the
Grandfathered Employee's retirement or termination of employment, (2) the
Grandfathered Employee specifies the future date on which such Supplemental
Retirement Benefit shall be distributed, and (3) the Grandfathered Employee
commences distribution of his or her Supplemental Retirement Benefit no later
than the first day of the month immediately following the Grandfathered
Employee's sixty-fifth (65th) birthday. The election to defer, once made by the
Grandfathered Employee, shall be irrevocable.
6
<PAGE> 7
Notwithstanding the foregoing, in the case of an "unforeseeable
emergency", upon written application by the Grandfathered Employee to the
Corporation, the Corporation, in its sole discretion, may accelerate the
distribution of the Grandfathered Employee's deferred Supplemental Retirement
Benefit. For purposes of this Section 4.2, the term "unforeseeable emergency"
shall mean an unanticipated emergency that is caused by an event beyond the
control of the Grandfathered Employee that would result in severe financial
hardship to the Grandfathered Employee if such premature distribution were not
permitted.
4.3 PAYMENT UPON DEATH OF GRANDFATHERED EMPLOYEE.
---------------------------------------------
(a) Upon the death of a Grandfathered Employee who has met the service
requirement of Section 3.1, but who has not yet commenced distribution
of his or her Supplemental Retirement Benefit there shall be paid to
the Grandfathered Employee's Beneficiary 50% of the Supplemental
Retirement Benefit which the Grandfathered Employee would have been
entitled to receive had he or she retired on his or her Normal
Retirement Date and elected to receive his or her Supplemental
Retirement Benefit.
For purposes of this Section 4.3(a) only, the following shall apply:
(i) The Grandfathered Employee's Benefit Service shall be
calculated as of the Grandfathered Employee's date of death.
(ii) The Grandfathered Employee's Retirement Plan benefit shall be
calculated under the provisions of Article IV of the
Retirement Plan as if the Grandfathered Employee retired on
his or her Normal Retirement Date, with such Retirement Plan
benefit being increased for purposes of this Section 4.3(a)
with an imputed Average Interest Credit to reflect what the
Grandfathered Employee's Plan benefit would have been as of
the Grandfathered Employee's Normal Retirement Date; such
Retirement Plan benefit shall be converted to a single life
annuity Option using the Average Treasury Rate and the Gatt
Mortality Table.
Payment of this death benefit shall be made in the form of a
single life annuity, and will be subject to distribution any time after
the Grandfathered Employee's Early Retirement Date, which shall be
calculated in accordance with the actuarial reduction provisions
contained within Section 3.3 hereof, if paid prior to the Participant's
Normal Retirement Date."
(b) In the event of a Grandfathered Employee's death after the
Grandfathered Employee has commenced distribution of his or her
Supplemental Retirement Benefit, there shall be paid to the
Grandfathered Employee's Beneficiary only those survivor benefits
provided under the form of benefit payment elected by the Grandfathered
Employee.
7
<PAGE> 8
4.4 PAYMENT UPON GRANDFATHERED EMPLOYEE'S ATTAINMENT OF AGE 70-1/2. A
Grandfathered Employee shall be required to commence distribution of his or her
Supplemental Retirement Benefit no later than April 1 of the calendar year
following the year in which the Grandfathered Employee attains age 70-1/2.
ARTICLE V
---------
ADMINISTRATION AND CLAIMS PROCEDURE
-----------------------------------
5.1 ADMINISTRATION. The Corporation, which shall be the
"Administrator" of the Plan for purposes of ERISA and the "Plan
Administrator" for purposes of the Code, shall be responsible for the general
administration of the Plan, for carrying out the provisions hereof, and for
making payments hereunder. The Corporation shall have the sole and absolute
discretionary authority and power to carry out the provisions of the Plan,
including, but not limited to, the authority and power (a) to determine all
questions relating to the eligibility for and the amount of any benefit to be
paid under the Plan, (b) to determine all questions pertaining to claims for
benefits and procedures for claim review, (c) to resolve all other questions
arising under the Plan, including any questions of construction, and (d) to take
such further action as the Corporation shall deem necessary or advisable in the
administration of the Plan. All findings, decisions, and determinations of any
kind made by the Corporation shall not be disturbed unless the Corporation has
acted in an arbitrary and capricious manner. Subject to the requirements of law,
the Corporation shall be the sole judge of the standard of proof required in any
claim for benefits and in any determination of eligibility for a benefit. All
decisions of the Corporation shall be final and binding on all parties. The
Corporation may employ such attorneys, investment counsel, agents, and
accountants as it may deem necessary or advisable to assist it in carrying out
its duties hereunder. The actions taken and the decisions made by the
Corporation hereunder shall be final and binding upon all interested parties
subject, however, to the provisions of Section 5.2. The Plan Year, for purposes
of Plan administration, shall be the calendar year.
5.2 CLAIMS REVIEW PROCEDURE. Whenever the Corporation decides for
whatever reason to deny, whether in whole or in part, a claim for benefits under
this Plan filed by any person (herein referred to as the "Claimant"), the
Corporation shall transmit a written notice of its decision to the Claimant,
which notice shall be written in a manner calculated to be understood by the
Claimant and shall contain a statement of the specific reasons for the denial of
the claim and a statement advising the Claimant that, within 60 days of the date
on which he receives such notice, he may obtain review of the decision of the
Corporation in accordance with the procedures hereinafter set forth. Within such
60-day period, the Claimant or his authorized representative may request that
the claim denial be reviewed by filing with the Corporation a written request
therefore, which request shall contain the following information:
(a) the date on which the request was filed with the Corporation; provided,
however, that the date on which the request for review was in fact
filed with the Corporation shall
8
<PAGE> 9
control in the event that the date of the actual filing is later than
the date stated by the Claimant pursuant to this paragraph (a);
(b) the specific portions of the denial of his claim which the Claimant
requests the Corporation to review;
(c) a statement by the Claimant setting forth the basis upon which he
believes the Corporation should reverse its previous denial of his
claim and accept his claim as made; and;
(d) any written material which the Claimant desires the Corporation to
examine in its consideration of his position as stated pursuant to
paragraph (c) above.
In accordance with this Section, if the Claimant requests a review of
the Corporation's decision, such review shall be made by the Corporation, who
shall, within sixty (60) days after receipt of the request form, review and
render a written decision on the claim containing the specific reasons for the
decision including reference to Plan provisions upon which the decision is
based. All findings, decisions, and determinations of any kind made by the
Corporation shall not be modified unless the Corporation has acted in an
arbitrary and capricious manner. Subject to the requirements of a law, the
Corporation shall be the sole judge of the standard of proof required in any
claim for benefits, and any determination of eligibility for a benefit. All
decisions of the Corporation shall be binding on the Claimant and upon all other
Persons. If the Claimant shall not file written notice with the Corporation at
the times set forth above, such individual shall have waived all benefits under
the Plan other than as already provided, if any, under the Plan.
ARTICLE VI
----------
FUNDING
-------
All benefits under the Plan shall be payable solely in cash from the
general assets of the Corporation or a subsidiary, and Grandfathered Employees,
and Grandfathered Employees' Beneficiaries shall have the status of general
unsecured creditors of the Corporation. The obligations of the Corporation to
make distributions in accordance with the provisions of the Plan constitute a
mere promise to make payments in the future. The Corporation shall have no
obligation to establish a trust or fund to fund its obligation to pay benefits
under the Plan or to insure any benefits under the Plan. Notwithstanding any
provision of this Plan, the Corporation may, in its sole discretion, combine the
payment due and owing under this Plan with one or more other payments owing to a
Grandfathered Employee, or a Grandfathered Employee's Beneficiary under any
other plan, contract, or otherwise (other than any payment due under the
Retirement Plan), in one check, direct deposit, wire transfer, or other means of
payment. Finally, it is the intention of the Corporation and the Grandfathered
Employees that the Plan be unfunded for tax purposes and for the purposes of
Title I of the Employee Retirement Income Security Act of 1974, as amended.
9
<PAGE> 10
Executed at Cleveland, Ohio, as of the 1st day of August, 1996.
KEYCORP
By:
---------------------------------------
Title:
-------------------------------------
10
<PAGE> 11
<TABLE>
<CAPTION>
EXHIBIT A
LIST OF GRANDFATHERED EMPLOYEE
------------------------------
NAME OF EMPLOYEE NAME OF EMPLOYEE
- ---------------- ----------------
<S> <C>
Andrews, James McGuire, James
Auletta, Patrick McDaniel, D. A.
Bailey, Raymond McGinty, Kevin
Barger, C. Michael Melluzzo, Sebastian
Beran, John Meyer, John R.
Blake, John T. Meyer III, Henry
Brooks, Craig Moody Jr., John
Bullard, Janet Murray, Bruce
Carlini, Lawrence Neel, Thomas M.
Colao Jr., Anthony Newman, Michael
Cortelli, John Noall, Roger
Cruse Jr., Donald Nucerino, Donald
Deal, Frederick O'Donnell, F. Scott
Doland, Michael Patrick, Robert
Dorland, David Platt, Craig, T.
Edmonds, David Ponchak, Frank
Egan, Richard Purinton II, Arthur
Fishell, James Rapacz, Richard
Flowers, James Rasmussen, Eric
Gill, Michael Roark, Michael
Gillespie, Jr., Robert Rusnak, Joseph
Greer, Michael Saddler, Thomas
Gula, Allen Schaedel, Elroy
Haas, Robert Seink, Edward
Hancock, John Simon, William
Hann, Jr., William Smith, James J.
Hartman, Sheldon Swisher, Trace
Hawthorne, Douglas Tracy, Robert
Hedberg, Douglas Trigg, Michael
Heintel, Jr., Carl Uzl, Ralph R.
Heisler, Jr., Robert Walker, Martin
Herron, David Wall, Stephen
Heyworth, Anthony Wert, James W.
Hitchcock, Thomas Willet, Richard
Holloway, Ruben L.
Johannsen, Rolland D.
Jones, Robert G.
Kamerer, James
Kaplan, Stephen
Karnatz, William
Kleinhenz, Karen R.
Klimas, Daniel
Knapp, Peter O.
Koontz, Cary
Kucler, Jack
Malone, Michael
Mayer, George
</TABLE>
11
<PAGE> 12
EXHIBIT B
---------
FOR PERIODS OF TIME PRIOR TO JANUARY 1, 1989, THREE ALTERNATIVE BENEFIT
FORMULAS WERE IN EFFECT UNDER THE SOCIETY RETIREMENT PLAN. THE MONTHLY AMOUNT OF
THE NORMAL RETIREMENT BENEFIT PAYABLE TO AN ELIGIBLE GRANDFATHERED EMPLOYEE WAS
EQUAL TO:
(a) IF HE BECAME A GRANDFATHERED EMPLOYEE AND THEREFORE BEGAN TO ACCRUE
BENEFITS UNDER THE PLAN PRIOR TO JULY 1, 1981, THE GREATER OF:
(i) his final average monthly compensation multiplied by the sum
of:
(A) 3.2% multiplied by his years of benefit service not
in excess of 15, plus
(B) 1% multiplied by his years of benefit service in
excess of 15 but not in excess of 25, plus
(C) 0.5% multiplied by his years of benefit service in
excess of 25; reduced by:
(D) 3.33% of his Social Security Benefit Amount
multiplied by his years of benefit service not in
excess of 15; or
(ii) the amount determined in accordance with the formula set forth
in paragraph (b) below which is otherwise applicable to a
person who becomes an Employee on or after July 1, 1981; or
(b) IF HE BECAME AN EMPLOYEE AND THEREFORE BEGAN TO ACCRUE BENEFITS
UNDER THE PLAN ON OR AFTER JULY 1, 1981, HIS FINAL AVERAGE MONTHLY COMPENSATION
MULTIPLIED BY THE SUM OF:
(i) 2% multiplied by his years of benefit service not in excess of
30, plus
(ii) 0.5% multiplied by his years of benefit service in excess of
30; reduced by:
(iii) 1.67% of his Social Security Benefit Amount multiplied by his
years of benefit service not in excess of 30 to a maximum of
50% of such Amount; or
(c) IF HE BECAME AN EMPLOYEE AND THEREFORE BEGAN TO ACCRUE BENEFITS
UNDER THE PLAN ON JANUARY 1, 1985, AND IMMEDIATELY PRIOR TO SUCH DATE WAS A
GRANDFATHERED EMPLOYEE IN THE THIRD NATIONAL BANK AND TRUST COMPANY OF DAYTON,
OHIO RETIREMENT PLAN, THE GREATER OF:
12
<PAGE> 13
(i) the amount determined in accordance with the formula set forth
in paragraph (b) above which is otherwise applicable to a
person who becomes an Employee on or after July 1, 1981; or
(ii) the sum of:
(A) 2.2% of his final average monthly compensation,
reduced by 2% of his Social Security Benefit Amount;
the difference to be multiplied by his years of
benefit service at normal retirement date not in
excess of 25, plus
(B) 1.1% of his final average monthly compensation,
reduced by 1% of his Social Security Benefit Amount;
the difference to be multiplied by his years of benefit
service at normal retirement date in excess of 25,
adjusted as necessary to produce the actuarial
equivalent value on a straight life annuity basis of a
benefit otherwise payable on a ten-year certain and
continuous basis; provided, however, that in the case
of each Employee who was in the employment of Society
National Bank of Cleveland on December 31, 1971, and
whose continuous service is not broken after the date
and prior to the date of his retirement, the monthly
amount of his normal retirement benefit otherwise
determined under this Section shall be not less than
the monthly amount of his normal retirement benefit
determined under the normal retirement benefit formula
of the Plan as in effect on December 31, 1971, based on
the assumption that he received no increases in the
rate of his compensation after December 31, 1971, and
using the rules for computing continuous service
specified in Article II of the Plan as in effect on
June 30, 1976 (hereinafter referred to as his "minimum
benefit"); and provided, further, that the monthly
amount so determined under the provisions of this
Exhibit B shall be reduced to the extent provided in
Section 14.10 of the Society Retirement Plan as in
effect on December 31, 1988. Notwithstanding anything
to the contrary contained in the Society Retirement
Plan, in no event shall an Employee receive a benefit
commencing at his normal retirement date which is less
than the largest early retirement benefit to which he
had been entitled under the Society Retirement Plan
prior to his normal retirement date.
13
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.11
<SEQUENCE>6
<DESCRIPTION>EXHIBIT 10.11
<TEXT>
<PAGE> 1
Exhibit 10.11
SOCIETY CORPORATION
1988 STOCK OPTION PLAN
1. PURPOSE. This 1988 Stock Option Plan (the "Plan") is intended to provide
to selected officers of Society Corporation (the "Corporation") and its
subsidiaries incentives for effective service and high levels of performance by
affording them the opportunity to purchase Common Shares of the Corporation to
increase their proprietary interest in the Corporation's continued progress and
success and to enable the Corporation and its subsidiaries to attract qualified
officers.
2. TYPES OF OPTIONS. Options granted under the Plan may be (a) "incentive
stock options" within the meaning of Section 422A of the Internal Revenue Code
of 1986, as amended, or (b) non-incentive stock options.
3. ADMINISTRATION. The Plan shall be administered by a Committee composed
of not less than three directors of the Corporation to be appointed by the Board
of Directors (the "Committee"). The members of the Committee shall not be
officers or employees of the Corporation or any subsidiary. The Board of
Directors may also appoint one or more directors as alternate members of the
Committee. No option may be granted to any member or alternate member of the
Committee. The Committee shall have authority, subject to the terms of the Plan
(a) to determine the officers to whom options shall be granted, the type of
option granted, the number of shares to be covered by each option, the purchase
price of the shares covered by each option, the form of consideration which may
be accepted in payment of the option price including, without limitation, cash,
securities, other property, or any combination thereof, the time or times at
which options shall be exercisable, and the terms and provisions of the
instruments by which options shall be evidenced, (b) to interpret the Plan, and
(c) to make all determinations necessary for the administration of the Plan.
Subject to Section 18, the Committee shall also have the authority to amend the
terms and conditions applicable to outstanding options provided that no
amendment shall contain terms and conditions inconsistent with the provisions of
the Plan. Notwithstanding the foregoing, the Corporation's Board of Directors
may exercise any authority granted herein to the Committee.
The construction and interpretation by the Committee of any provision of
the Plan or any stock option agreement entered into pursuant to the Plan and any
determination by the Committee pursuant to any provision of the Plan or any
stock option agreement 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.
4. ELIGIBILITY. Options may be granted to officers of the Corporation or
any subsidiary (including officers who are members of the Board of Directors of
the Corporation or any subsidiary). The granting of any option to an officer
shall not entitle such officer to, nor disqualify him from, participation in any
other grant of an option. Further, the granting of any option to an officer
shall not be deemed or construed to impair or affect in any manner
1
<PAGE> 2
whatsoever the right of the Corporation or any subsidiary in its discretion
to terminate the services of such officer.
5. STOCK AVAILABLE FOR OPTIONS. The stock which may be issued and sold upon
the exercise of options granted under the Plan may be authorized and unissued
Common Shares of the Corporation or treasury shares as the Board of Directors
may from time to time determine. The Corporation may reacquire Common Shares at
the time options are exercised, or from time to time in advance, whenever the
Board of Directors may deem such purchase advisable.
Common Shares may be either Ordinary Shares or Book Value Shares. "Ordinary
Shares" are Common Shares of the Corporation for which there is a generally
recognized trading market and which are freely transferable. "Book Value Shares"
are Common Shares of the Corporation which have the same voting, dividend, and
liquidation rights as Ordinary Shares, except that they shall not be
transferable other than to the Corporation and except that they shall be subject
to the repurchase provisions set forth in the stock option agreements pursuant
to which they were acquired or purchased.
Subject to adjustment as provided in Section 14, the total number of Common
Shares of the Corporation which may be issued or sold upon the exercise of all
options granted under this Plan shall not exceed the following:
(a) 1,350,000 Ordinary Shares, and
(b) a number of Book Value Shares, which as of the respective
dates of grant is proportionate to the number of Ordinary Shares
described in (a) above, based on the ratio of the then fair market
value per share of Ordinary Shares to the then applicable Book Value
Per Share (as hereinafter defined in Section 6) of the Book Value
Shares; provided, however, that such number of Book Value Shares shall
not exceed 2,025,000, and the number of Book Value Shares so determined
shall be rounded to the next lowest whole number of Book Value Shares.
The exercise of an option or stock appreciation right relating to Ordinary
Shares will reduce proportionately the number of Book Value Shares, if any,
subject to the same option or stock appreciation right, and vice versa. Any Book
Value Shares or Ordinary Shares ceasing to be subject to the related option
because of such reduction shall no longer be available for the future grant of
options under the Plan.
In the event that any outstanding option under the Plan for any reason
expires or is terminated prior to the end of the period during which options may
be granted under the Plan, the Common Shares subject to the unexercised portion
of such option shall again be available for the future grant of options under
the Plan.
2
<PAGE> 3
6. OPTION PRICE. The option price under an option to purchase Ordinary
Shares, whether an incentive stock option or a non-incentive stock option, shall
be not less than the fair market value of the Ordinary Shares covered by the
option, as determined by the Committee, on the date the option is granted.
The option price for any Book Value Share shall be not less than the Book
Value Per Share on the Fiscal Quarter Date coincident with or immediately
preceding the date of the grant of the option. "Book Value Per Share" as of any
date means the shareholders' equity allocable to Common Shares of the
Corporation, as set forth in the consolidated balance sheet of the Corporation
and its subsidiaries as at the Fiscal Quarter Date coincident with or
immediately preceding such date, divided by the number of Common Shares of the
Corporation outstanding as of such Fiscal Quarter Date; provided, however, that
the Book Value Per Share, for the purpose of calculating the repurchase price of
Book Value Shares, may be adjusted to such an extent as may be determined by the
Committee to preserve the benefit of the arrangement for holders of options on
Book Value Shares and the Corporation, if in the opinion of the Committee, after
consultation with the Corporation's independent public accountants, changes in
the Corporation's accounting policies' acquisitions, or other unusual or
extraordinary items have materially affected the number of the Corporation's
Common Shares outstanding or shareholders' equity allocable to the Corporation's
Common Shares.
"Fiscal Quarter Date" means March 31, June 30, September 30, or December 31
of any year or such other dates as the Corporation may from time to time fix as
ending dates of fiscal quarters of the Corporation.
7. GRANT OF STOCK OPTIONS; STOCK OPTION AGREEMENTS.
(a) Incentive Stock Options. The Committee may, from time to time,
grant incentive stock options under the Plan. Any grant of an incentive
stock option shall be to purchase a specified number of Ordinary
Shares. The day on which the Committee authorizes the grant of an
incentive stock option shall be the day on which such incentive stock
option is granted. No optionee may be granted incentive stock options
for Ordinary Shares that are exercisable for the first time by the
optionee in any calendar year (under all plans of the Corporation and
its subsidiaries) which exceed an aggregate fair market value
(determined at the time of grant) of $100,000.
(b) Non-lncentive Stock Options. The Committee may, from time to
time, grant non-incentive stock options under the Plan. Any grant of a
non-incentive stock option may be to purchase a specified number of
Ordinary Shares or Book Value Shares, or both, and may give the
optionee the election to purchase either Ordinary Shares or Book Value
Shares. The day on which the Committee authorizes the grant of a
non-incentive stock option shall be considered the day on which such
non-incentive stock option is granted, unless the Committee
3
<PAGE> 4
specifies a later day. The exercise of a non-incentive stock option to
purchase Ordinary Shares will reduce proportionately the number of Book
Value Shares, if any, covered by the same non-incentive stock option,
and vice versa. Any grant in respect of Book Value Shares shall provide
for the repurchase thereof by the Corporation, and upon such repurchase
the repurchase price may be paid in cash, in Ordinary Shares, or a
combination of such methods of payment, and may either give to the
optionee or retain in the Committee the right to elect the method of
payment of the repurchase price.
(c) Stock Option Agreements. Each grant of an incentive stock
option or a non-incentive stock option under the Plan shall be
evidenced by a stock option agreement executed on behalf of the
Corporation by an officer designated by the Committee and accepted by
the optionee. Such stock option agreement shall contain such terms and
provisions, consistent with the Plan, as the Committee may approve.
(d) Election. The Committee may, at the time of the grant of a
stock option, permit the optionee to irrevocably elect at such time
whether such stock option shall be an incentive stock option subject to
the terms and conditions set forth in the Plan applicable to incentive
stock options, which terms and conditions, if such election is made,
shall be set forth in the stock option agreement.
8. EXERCISE OF OPTIONS. Options, whether incentive stock options or
non-incentive stock options, shall be exercised by delivery of written notice of
exercise to the Corporation accompanied by payment of the option price. Except
as otherwise provided in Section 9, an option may be exercised only while the
optionee is in the employ of the Corporation or of a subsidiary. An optionee to
whom an option has been granted must remain in the continuous employ of the
Corporation or of a subsidiary for one year from the date on which the option is
granted before he or she or, with respect to any non-incentive stock options,
any Transferee may exercise any part of the option; provided, however, that this
requirement of one year of continuous employment shall not apply to an optionee
who retires under any retirement plan, program, or policy of the Corporation or
of a subsidiary unless the option is covered by a stock appreciation right, in
which case, the retiring optionee must have been in the continuous employ of the
Corporation or of a subsidiary for at least six months from the date on which
the option is granted. Thereafter, each option shall become exercisable in one
or more installments at the time or times provided in the instrument evidencing
the option. Once an installment becomes exercisable, it shall remain exercisable
until expiration or termination of the option. An officer to whom an option is
granted or any Transferee may exercise the option from time to time, in whole or
in part, up to the total number of shares with respect to which the option is
then exercisable. No fraction of a Common Share may, however, be purchased upon
the exercise of an option. A "Transferee" means, with respect to non-incentive
stock options, a person or entity to which, in the Committee's discretion, any
non-incentive stock option may be assigned or transferred.
4
<PAGE> 5
Notwithstanding any provision of this Section 8 to the contrary, any
option, whether an incentive stock option or a non-incentive stock option,
granted pursuant to the Plan (a) may, in the discretion of the Committee, become
fully exercisable as to all optioned shares from and after the time the optionee
ceases to be an employee of the Corporation or any of its subsidiaries as a
result of the sale or other disposition by the Corporation of assets or property
(including shares of any subsidiary) in respect of which the optionee had
theretofore been employed or as a result of which optionee's continued
employment with the Corporation or any subsidiary is no longer required, and (b)
shall, in the case of a change in control (as hereinafter defined) of the
Corporation, become fully exercisable as to all optioned shares from and after
the date of such change in control. For purposes of this paragraph, a "change in
control" shall be deemed to occur:
(i) upon the approval by the shareholders of the Corporation of
(A) any consolidation or merger of the Corporation with or into another
corporation or entity if, as a result of such consolidation or merger,
voting securities of the Corporation outstanding immediately prior to
such consolidation or merger will not represent or account for (either
directly by continuing to be outstanding as voting securities of the
resulting or surviving corporation or entity or indirectly by being
converted into or exchanged for voting securities of the resulting or
surviving corporation or entity) at least 60% of the voting securities
of the resulting or surviving corporation as of immediately after the
consolidation or merger, (B) any 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, or (C) adoption
of any plan or proposal for the liquidation or dissolution of the
Corporation, or
(ii) upon any "person" (as defined in Section 13(d) of the
Securities Exchange Act of 1934 as amended), corporation or other
entity, other than the Corporation or any subsidiary or employee
benefit plan or trust maintained by the Corporation or any of its
subsidiaries, becoming the "beneficial owner" (as defined in Rule 13d-3
promulgated under the Securities Exchange Act of 1934), directly or
indirectly, of more than 25% of the Common Shares of the Corporation
outstanding at the time, without the prior approval of the Board of
Directors of the Corporation, or
(iii) if, during any period of 24 consecutive calendar months,
individuals who at the beginning of such period constitute the
directors of the Corporation cease for any reason to constitute at
least a majority thereof unless the election or the nomination for
election by the shareholders of the Corporation of each new director of
the Corporation was approved by the vote of at least two-thirds of the
directors of the Corporation still then in office who were directors of
the Corporation at the beginning of any such period.
5
<PAGE> 6
9. EXERCISE OF OPTIONS AFTER TERMINATION OF EMPLOYMENT OR DEATH.
(a) Incentive Stock Options. An incentive stock option may be exercised
after termination of employment, whether upon death, disability, retirement, or
otherwise only to the extent provided in this Section 9(a).
(i) Upon any termination of employment for any reason other than
the optionee's death, disability, or retirement under any retirement
plan, program, or policy of the Corporation or of a subsidiary, the
optionee shall have the right within the period of three months next
following the date of such termination of employment, to purchase all
or any part of the Common Shares which the optionee would have been
entitled to purchase if he or she had exercised his or her option on
the date of such termination of employment, except that, if the
employment of the optionee is terminated by the Corporation or a
subsidiary, the optionee may exercise his or her incentive stock option
only with the consent of the Committee.
(ii) Upon any termination of employment due to retirement under
any retirement plan, program, or policy of the Corporation or of a
subsidiary, the optionee shall have the right within the period of two
years next following the date of termination of employment, to purchase
all or any part of the Common Shares which the optionee would have been
entitled to purchase if he or she had exercised his or her incentive
stock option on the date of such termination of employment.
(iii) Upon any termination of employment due to disability, the
optionee, or his attorney in fact or guardian, shall have the right
within the period of one year next following the date of termination of
employment, to purchase all or any part of the Common Shares which the
optionee would have been entitled to purchase if he or she had
exercised his or her incentive stock option on the date of such
termination of employment.
(iv) Upon the death of the optionee while in the active service of
the Corporation or of a subsidiary, or within the period referred to in
subsection (i), (ii), or (iii) of this Section 9(a), the optionee's
executor or administrator or the person or persons to whom the
optionee's rights under his or her option are transferred by will or
the laws of descent and distribution shall have the right, within the
period of two years next following the date of the optionee's death, to
purchase all or any part of the Common Shares which the optionee would
have been entitled to purchase if he or she had exercised his or her
incentive stock option on the date of death.
6
<PAGE> 7
(b) Non-incentive Stock Options. A non-incentive stock option may be
exercised after termination of employment, whether upon death, disability,
retirement, or otherwise only to the extent provided in this Section 9(b).
(i) Upon any termination of employment for any reason other than
the optionee's death, disability, or retirement under any retirement
plan, program, or policy of the Corporation or of a subsidiary, the
optionee or a Transferee shall have the right within the period of six
months next following the date of such termination of employment, to
purchase all or any part of the Common Shares which the optionee would
have been entitled to purchase if he or she had exercised his or her
option on the date of such termination of employment, except that if
the employment of the optionee is terminated by the Corporation or a
subsidiary, the optionee or Transferee may exercise his or her
incentive stock option only with the consent of the Committee.
(ii) Upon any termination of employment due to retirement under
any retirement plan, program, or policy of the Corporation or of a
subsidiary, the optionee or any Transferee shall have the right within
the period of two years next following the date of termination of
employment, to purchase all or any part of the Common Shares which the
optionee would have been entitled to purchase if he or she had
exercised his or her incentive stock option on the date of such
termination of employment.
(iii) Upon any termination of employment due to disability, the
optionee, his or her attorney in fact or guardian, or any Transferee
shall have the right within the period of two years next following the
date of termination of employment, to purchase all or any part of the
Common Shares which the optionee would have been entitled to purchase
if he or she had exercised his or her non-incentive stock option on the
date of such termination of employment.
(iv) Upon the death of the optionee while in the active service of
the Corporation or of a subsidiary, or within the period referred to in
subsection (i) (ii), or (iii) of this Section 9(b) the optionee's
executor or administrator, the person or persons to whom the optionee's
rights under his or her option are transferred by will or the laws of
descent and distribution, or any Transferee shall have the right,
within the period of two years next following the date of the
optionee's death, to purchase all or any part of the Common Shares
which the optionee would have been entitled to purchase if he or she
had exercised his or her non-incentive stock option on the date of
death.
10. TERMINATION OF OPTIONS. Notwithstanding any other provision in this
Plan, any option, whether an incentive stock option or a non-incentive stock
option, granted under the Plan shall terminate, and the right of the optionee or
other person to purchase Common Shares shall expire, at the time set forth in
the grant, which shall be not later than ten years from the
7
<PAGE> 8
date such option is granted; provided, however, in the case of non-incentive
stock options, the Committee may authorize a term of ten years and one week from
the date such option is granted if the Committee determines it is desirable in
order to assure that such option is not treated as an incentive stock option for
Federal income tax purposes.
11. PAYMENT FOR SHARES. Upon exercise of an option, whether an incentive
stock option or a non-incentive stock option, the option price shall be payable
either (a) in cash, or (b) by the transfer to the Corporation by the optionee or
Transferee of Ordinary Shares or Book Value Shares having a value (current
market value in the case of Ordinary Shares and Book Value in the case of Book
Value Shares) equal to the option price, including, in the discretion of the
Committee exercised at the time the option is granted, the right to transfer
shares acquired upon the exercise of a part of an option in payment of the
option price upon immediate exercise of a further part of the option, or (c) by
a combination of the methods described in (a) and (b) of this Section 11.
12. ASSIGNABILITY. Non-incentive stock options granted under the Plan may
be assignable or transferable in the Committee's discretion and may be exercised
by the Transferee. Except as otherwise provided in Section 9, an incentive stock
option granted under the Plan may not be assigned or transferred and may be
exercised only by the optionee to whom granted.
13. OPTIONS IN SUBSTITUTION FOR STOCK OPTIONS GRANTED BY OTHER COMPANIES.
Options, whether incentive stock options or non-incentive stock options, may be
granted under the Plan in substitution for stock options held by employees of a
company who become or are about to become officers of the Corporation or a
subsidiary as a result of the merger or consolidation of the employer company
with the Corporation or a subsidiary, or the acquisition by the Corporation or a
subsidiary of the assets of the employer company, or the acquisition by the
Corporation or a subsidiary of stock of the employer company as a result of
which it becomes a subsidiary of the Corporation. The terms, provisions, and
benefits of the substitute options so granted may vary from the terms,
provisions and benefits set forth in or authorized by the Plan to such extent as
the Committee at the time of grant may deem appropriate to conform, in whole or
in part, to the terms, provisions, and benefits of the options in substitution
for which they are granted.
14. ADJUSTMENT UPON CHANGES IN SHARES. The number and option price of the
Common Shares covered by each option and the total number of shares that may be
sold under the Plan shall be proportionately adjusted to reflect, as deemed
equitable and appropriate by the Committee, any stock dividend, stock split or
share combination of the Common Shares, or reclassification or recapitalization
of the Corporation. If the Corporation shall be a party to any merger,
consolidation, or other form of business combination, or liquidation or
dissolution, and in connection therewith the holders of Common Shares shall
become entitled to receive securities, cash, or other property in conversion or
extinguishment of, exchange for, or otherwise in respect of Common Shares, the
officer to whom an option has been granted shall be entitled, upon exercise of
the option rights granted under the Plan on the terms and conditions set forth
in the instrument evidencing the option, to receive, in lieu of Common
8
<PAGE> 9
Shares, the securities, cash, or other property that the officer would be
entitled to receive as a holder of Common Shares had the officer exercised the
option rights set forth in the instrument evidencing the option immediately
prior to the effective date of the merger, consolidation or other form of
business combination; provided, however, that the Committee may authorize the
disposition of the option rights granted under the Plan in such other manner as
any be necessary and equitable in its discretion to realize the intention of the
option rights granted under the Plan.
15. PURCHASE FOR INVESTMENT. Each person exercising an option, whether an
incentive stock option or a non-incentive stock option, may be required by the
Corporation to furnish a representation that he or she is acquiring the shares
purchased upon such exercise as an investment and not with a view to
distribution thereof if the Corporation shall, in its sole discretion, determine
that such representation is required to ensure that a resale or other
disposition of the shares would not involve a violation of the Securities Act of
1933, as amended, or of applicable blue sky laws. Any investment representation
so furnished shall no longer be applicable at any time such representation is no
longer necessary for such purposes.
16. LEGAL REQUIREMENTS. No option shall be granted and no shares shall be
delivered under this Plan except in compliance with all applicable Federal and
state laws and regulations, including, without limitation, the United States
Internal Revenue Code and Federal and state securities laws
17. DURATION AND TERMINATION OF THE PLAN. The Plan shall remain in effect
through February 17, 1998, and shall then terminate, unless terminated at an
earlier date by action of the Board of Directors: provided, however, that
termination of the Plan shall not affect options granted prior thereto.
18. AMENDMENTS. The Board of Directors may alter or amend the Plan from
time to time prior to its termination, except that, without shareholder
approval, no amendment shall increase the aggregate number of shares with
respect to which options may be granted (except in accordance with the
provisions of Section 14), reduce the option price at which options may be
exercised (except in accordance with the provisions of Section 14), extend the
time within which options may be granted under the Plan, or change the
requirements relating to either eligibility for participation in the Plan or
administration of the Plan. Except in accordance with the provisions of Section
14, neither the Board of Directors nor the Committee may, without the consent of
the holder of an option granted under the Plan, alter or impair such option. The
Committee may, with the agreement of the affected optionee, cancel any stock
option agreement entered into pursuant to the Plan. In the event of such
cancellation, the Committee may authorize the grant of a new incentive stock
option or nonincentive stock option for the same or a different number of Common
Shares specified in the cancelled stock option agreement, at such option price
and upon terms and provisions which would have been applicable under the Plan
had not the Corporation and the optionee entered into the cancelled stock option
agreement.
9
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.13
<SEQUENCE>7
<DESCRIPTION>EXHIBIT 10.13
<TEXT>
<PAGE> 1
Exhibit 10.13
AMENDMENT TO
KEYCORP AMENDED AND RESTATED
1991 EQUITY COMPENSATION PLAN
Pursuant to the direction of the Compensation and Organization
Committee of KeyCorp's Board of Directors, the KeyCorp Amended and Restated 1991
Equity Compensation Plan (the "Plan") is hereby amended as provided herein.
Terms not specifically defined herein shall have the meanings set forth in the
Plan.
1. Section 2.5 of the Plan is hereby amended to read as follows:
"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.
(a) A Change of Control will have occurred under this clause
(a) if 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 either
(i) 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
(ii) 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.
<PAGE> 2
(b) 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)).
(c) A Change of Control will have occurred under this
clause (c) if either
(i) 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
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
(ii) 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),
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,
2
<PAGE> 3
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):
(x) 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 transaction or series of transactions by any
person (as defined earlier in this subclause (x)).
(y) 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.
(z) 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.
(d) 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."
3
<PAGE> 4
2. A new Section 27 shall be added to the Plan, which Section 27
shall read as follows:
"27. PLAN EFFECTIVE DATE. The Plan, originally named the
Society Corporation 1991 Equity Compensation Plan, was approved by the
Corporation's shareholders at the Annual Meeting of Shareholders held
on April 16, 1991 and became effective on that date. On March 17, 1994,
the Corporation's Board of Directors adopted, subject to shareholder
approval, certain amendments to the Plan, then renamed the KeyCorp
Amended and Restated 1991 Equity Compensation Plan. The shareholders
approved these amendments at the Corporation's Annual Meeting of
Shareholders held on May 19, 1994. The Plan was further amended by
action of the Committee on July 17, 1996 to amend the definition of
Change of Control as set forth in Section 2.5 of the Plan, which
amendment was effective as of January 1, 1996. If the Corporation
hereafter enters into a transaction intended to be accounted for as a
pooling of interests and the Committee determines, based on the written
advice of the Corporation's independent accountants, that the July 17,
1996 amendment or the operation thereof would conflict with or
jeopardize the pooling of interests accounting treatment for such
transaction, then the July 17, 1996 amendment shall be inoperative and
shall be treated as if it had never been effected so that the
definition of Change of Control would be as in effect prior to such
amendment."
3. If the Corporation hereafter enters into a transaction intended to
be accounted for as a pooling of interests and the Committee determines, based
on the written advice of the Corporation's independent accountants, that this
amendment or the operation hereof would conflict with or jeopardize the pooling
of interests accounting treatment for such transaction, then this amendment
shall be inoperative and shall have no force or effect and the Plan shall be as
in effect prior to this amendment.
4. Except as provided in the preceding paragraph, this amendment shall
be effective as of January 1, 1996 and shall apply to all Options granted on and
after that date unless expressly provided otherwise in the relevant Award
Instrument.
IN WITNESS WHEREOF, the undersigned has set his hand as of July 17,
1996.
-----------------------------------
Roger Noall
Senior Executive Vice President and
Chief Administrative Officer
KeyCorp
4
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.17
<SEQUENCE>8
<DESCRIPTION>EXHIBIT 10.17
<TEXT>
<PAGE> 1
EXHIBIT 10.17
INSURED John A. Doe CUSTOMAX
POLICY NUMBER LA DOOOOOO
POLICY DATE 01-01-1987
EFFECTIVE DATE 01-01-1987 SPECIMEN
POLICY
DISABILITY INCOME POLICY
A Guaranteed renewable Noncancellable contract.
NONCANCELLABLE TO AGE 65 AT GUARANTEED PREMIUM RATE THEREAFTER UNTIL AGE 75,
RENEWABLE ON EACH POLICY ANNIVERSARY ON WHICH THE INSURED IS EMPLOYED AT LEAST
30 HOURS PER WEEK AFTER AGE 65, PREMIUM RATE IS BASED ON THE INSURED'S AGE ON
EACH RENEWAL DATE
[A Guaranteed renewable Noncancellable contract]
This policy provides disability income benefits under stated conditions. Please
refer to the policy provisions where we tell you when and how we will pay
benefits. You will find an index of these provisions on Page 2.
TWENTY DAY RIGHT TO EXAMINE POLICY
Within 20 days after this policy is delivered to you or your representative, you
may cancel the policy for any reason. To cancel this policy, you or your
representative must mail or deliver the policy to our Home Office or to one of
our authorized representatives. If this is done, the policy will be canceled
from the beginning and all of the premium paid will be refunded.
[Satisfaction guaranteed or full premium refund--you have 20 days to examine
this policy before making a decision to accept it.]
RENEWAL
This policy is even renewable after age 65 if you continue to work 30 or more
hours per week. You may renew this policy on each policy anniversary until the
policy anniversary when the insured's age is 65 by paying each premium before
its Grace Period ends. Beginning with the policy anniversary when his age is 65,
you may renew this policy until the policy anniversary when his age is 75 by
paying the appropriate premium on each premium due date on which he is employed
in a regular occupation at least 30 hours a week.
[This policy is even renewable after age 65 if you continue to work 30 or more
hours per week.]
This policy become effective on the Effective Date shown on page 3.
UNUN.
2211 Congress Street
Portland, Maine 04122
(Provisions may vary in certain states)
Executive
Professional
<PAGE> 2
INDEX OF POLICY PROVISIONS
TWENTY DAY RIGHT TO EXAMINE POLICY 1
RENEWAL 1
POLICY SCHEDULE 3
PREMIUMS 4
REINSTATEMENT 4
DEFINITIONS 5
BENEFITS 7
DISABILITY BENEFIT 7
MONTHLY BENEFIT AMOUNT 7
BENEFIT FOR LOSS OF USE 8
SUCCESSIVE DISABILITIES 8
WAIVER OF PREMIUM 8
BENEFIT INDEXING PROVISION 8
INDEXED AMOUNT 9
TRANSPLANT DONOR BENEFIT 9
REHABILITATION 9
EXCLUSIONS AND LIMITATIONS 9
PREEXISTING CONDITION LIMITATION 9
MULTIPLE BENEFITS 9
CLAIM INFORMATION 10
HOW TO FILE A CLAIM 10
CONDITIONS AND TIME LIMITS 10
HOW AND WHEN WE PAY BENEFITS 10
CHANGE OF PLAN PROVISION 11
GENERAL PROVISIONS 11
THE CONTRACT 11
INCONTESTABLE 11
CONTEST 12
CONFORMITY WITH STATE STATUTES 12
LEGAL ACTIONS 12
MISSTATEMENT OF AGE 12
OWNER 12
LOSS PAYEE 12
ASSIGNMENT 12
-2-
<PAGE> 3
POLICY SCHEDULE
Insured John A. Doe 01-01-87 Policy Date
Policy Number LA DOOOOO 01-01-87 Effective Date
SUMMARY OF PREMIUM
Premiums are payable as follows
-----
BEGINNING ANNUAL SEMIANNUAL QUARTERLY Your choice
01-01-1987 $335.90 $171.31 $87.33 premium payment
schedule
01-01-2017 Company rates then in effect -----
*Premium guaranteed to age 65
SUMMARY OF COVERAGE
Form - EP87 Annual Premium-$335.90 until 01-01-2017
Then company rates then
in effect
Maximum Disability Benefit - $1,000
Elimination period - 90 days
Maximum Benefit Period - To the later of (A) age 65 policy anniversary or
(B) 24 months after disability payments begin.
PREMIUM
RIDER BENEFIT ANNUAL CEASE
FORM DESCRIPTION AMOUNT PREMIUM DATE
---
Cost of Living Adjustment Some of the
Retirement Benefit optional benefits
------------------------------ available to
College Benefit customize your
particular program
---
Rider premiums for the premium term are included in the summary of premium
-3-
<PAGE> 4
PREMIUMS
All premiums except the first premium are due on the before the due date. They
are payable as stated on page 3.
Each premium will keep this policy in effect and continue coverage for the term
shown
[Premiums are guaranteed to age 65]
As long as all premiums are paid before the end of their Grace Period, we will
not increase the premium rate for this policy before the policy anniversary when
the Insured's age is 65. On and after the policy anniversary when his age is 65,
the premium is the rate then in effect for his age on each policy anniversary.
The Grace Period is the 31 consecutive days that begin with the day a premium is
due. We will keep this policy in effect and continue coverage during that time.
If the premium is not paid during those 31 days, this policy and all coverage
under this policy will terminate.
If we accept premium after the policy anniversary when the Insured's age is 65,
we will keep this policy in effect and continue coverage until the end of the
period for which we accept it.
If any premium is paid beyond the month in which the Insured dies or this policy
terminates for some other reason, we will refund the amount of the unearned
premium paid.
Premiums must be paid in United States dollars.
REINSTATEMENT
[Reinstatement possible for up to 6 months 6.]
If this policy terminates because a premium is not paid by the end of the Grace
Period, you may apply to reinstate this policy at any time until the first
unpaid premium is six months overdue.
In order to reinstate this policy, two requirements must be met. They are
1. a reinstatement application must be completed (to complete a
reinstatement application means you submit the reinstatement
application with evidence of the Insured's insurability and the full
amount of overdue premium); and
2. we approve the instatement application.
A reinstatement application must be prepaid, and we will issue a prepayment
agreement. The date of the prepayment agreement will be the date the
reinstatement application has been completed.
If we approve the reinstatement application, this policy will be reinstated on
the approval date. If the overdue premium is paid without submitting a
reinstatement application and we keep the premium without requesting a
reinstatement application within a reasonable time, this policy will be
reinstated the date we receive the premium. If we issue a prepayment agreement
and do not approve or disapprove the reinstatement application within 45 days
from the date of the
-4-
<PAGE> 5
prepayment agreement, this policy will be reinstated on that 45th day.
If this policy is reinstated it will only cover:
1. injury that occurs on or after the date this policy is restated or
2. sickness which is first diagnosed or is first treated more than 10 days
after this policy is reinstated.
IT WILL NOT COVER.
1. any injury or sickness when is excluded by name or description; and
2. any preexisting condition excluded by the reinstatement application.
DEFINITIONS
POLICY means the contract of insurance between you and us. This form, all
applications, and any riders, endorsements, or amendments that are attached to
it make up the entire contract.
[Coverage flexibility --this feature allows you to purchase varying levels and
types of coverage on a single policy.
COVERAGE means a type or amount of benefit provided by this policy. Each
benefit, each modification of that benefit for which we require evidence
of insurability, and each reinstatement of that benefit is a separate coverage.
For purposes of the Incontestable provision, an increase provided by the
Benefit Indexing Provision is part of the coverage that was indexed unless
evidence of insurability is required for that increase.
YOU and YOUR refer to the owner of this policy. The owner is the Insured unless
ownership right have been assigned.
WE, OUR and US refer to UNUM Life Insurance Company of America (or First UNUM
Life Insurance Company).
INSURED means the person named on page 3. It is the person whom we are insuring.
The Insured can not be changed.
INJURY means bodily harm cause by an accident.
SICKNESS means a mental or physical illness or condition which has been
diagnosed or treated.
MAXIMUM DISABILITY BENEFIT means the amount shown on page 3.
MAXIMUM BENEFIT PERIOD means the period shown on page 3.
PREEXISTING CONDITION means an injury or sickness suffered by the Insured which
exists on the effective date of the coverage and, during the past five years,
either:
1. was diagnosed;
2. caused the Insured to receive medical advice or treatment; or
3. cause symptoms for which an ordinarily prudent person would have sought
medical advice or treatment
CPI-U means the Consumer Price Index for All Urban Consumers published by the
Bureau of Labor Statistics or its successor. We may choose another
-5-
<PAGE> 6
nationally published index if the CPI-U is replaced or changed. If the new
or revised index is proportionate to the CPI-U, we will use the new index.
Otherwise, we will choose the index which, in our judgment, most closely
reflects the change in the cost of living in the United States. If the change
is subject to government approval, we will obtain it before we use the new or
revised index. CPI-U FACTOR means, during each year of disability, the ratio of
the Current Index to the Base Index. A year of disability is from one
anniversary of the beginning of disability to the next.
[Own occupation coverage--This definition of regular occupation recognizes the
years of education and experience the insured may have invested in
professionally recognized specialty. While he is totally disabled in his
occupation or specialty, he will receive the full monthly benefit, even it he is
working in a new occupation].
BASE INDEX means the last CPI-U index published in the calendar year before
disability begins.
CURRENT INDEX means the last CPI-U index published in each calendar year after
the disability begins.
REGULAR OCCUPATION means the Insured's occupation at the time the Elimination
Period begins. If the Insured engages primarily in a professionally recognized
specialty at that time, his occupation is that specialty.
TO WORK FULL TIME in his regular occupation means the Insured works
approximately the same number of hours in the same regular occupation as he was
working before disability began.
[During the Elimination Periods Insured need any experience]
[a loss of time or duties--loss of income is not required, whether Totally
Disabled or Residually Disabled, to satisfy the Elimination Period.]
IMPAIRMENT, IMPAIRS AND IMPAIRED mean (1) injury or sickness totally or
residually disable the Insured; and (2) the Insured is receiving medical care
from someone other than himself which is appropriate for the injury or sickness.
TOTAL DISABILITY AND TOTALLY DISABLED means injury or sickness restricts the
Insured's ability to perform the material and substantial duties of his regular
occupation to an extent that prevents him from engaging in his regular
occupation.
RESIDUAL DISABILITY AND RESIDUALLY DISABLED mean injury or sickness does not
prevent the Insured from engaging in his regular occupation, BUT does restrict
his ability to perform the material and substantial duties of his regular
occupation: (i) for as long a time as he customarily performed them before the
injury or sickness: or (ii) as effectively as he customarily performed them
before the injury or sickness.
DISABILITY AND DISABLED mean the period while he Insured is satisfying the
Elimination Period, or while the Disability Benefit or the Loss of Use Benefit
is payable.
[Elimination Period is the number of days during which an insured must _______
an impairment before benefits will be payable]
ELIMINATION PERIOD means the number days stated on page 3. preceding the date
benefits become payable (other than the Loss of Use Benefit), during which
injury or sickness impairs the Insured.
[You can customize your disability protection by varying the Elimination Period
of your various coverages.]
The Elimination Period begins on the first day that the Insured is impaired
Different Elimination Period may apply to different coverage under this policy.
The Elimination Period for each coverage is described on page 3.
-6-
<PAGE> 7
[Combines Elimination Periods for separate impairments from the same cause]
If the impairment ceases before the Insured satisfies the Elimination Period and
he become impaired again from the same cause within 6 months we will combine
those impairments to determine when benefits begin.
NET INCOME means all payment received by the Insured for duties that he performs
in his regular occupation minus his share of the usual and customary business
expenses which he or his company incurs on a regular basis and are essential to
the operation of the business.
[Flexibility--this policy allows for 3 different methods to determine "prior net
income".]
[Since inflation can be a major factor in today's economy, during disability an
Insured's "prior net income" is indexed based on the CPI-U.]
PRIOR NET INCOME means the largest of: (1) the Insured's average monthly net
income for the last 12 months before the Elimination Period began; (2) the
Insured's average monthly net income for the 12 months period immediately before
those 12 months; or (3) the highest average monthly net income for any two
consecutive years of the last 5 years before the Elimination Period began. On
each anniversary of the first day of a period of disability, we will calculate a
CPI-U Factor. We will multiply the prior net income by that Factor. Then we will
use that amount to calculate the Maximum Disability Benefit.
LOST OF NET INCOME means the Insured's indexed prior net income minus the net
income he received for the month to which a payment relates
BENEFITS
DISABILITY BENEFIT. We will pay the Monthly Benefit Amount in any month after
the Insured has satisfied the Elimination Period that:
1. the Insured is totally disabled or the insured is residually disabled
and experiences at least a 20% loss of net income in his regular
occupation as a result of a present injury or sickness;
2. the injury or sickness which causes the loss of net income is the one
which caused him to satisfy the Elimination Period;
[Medical care required only when appropriate.]
3. he is receiving medical care from someone other than himself which is
APPROPRIATE for the injury is sickness; and
4. benefits under the Disability Benefit and the Loss of Use Benefit
combined have not been paid for the Maximum Benefit Period.
After disability ceases, resumption of this Disability Benefit is subject to the
preceding requirements and those stated in the Successive Disabilities
provision.
[A___ monthly benefit will paid if the Insured is totally disabled or if his
loss of net income is 75% or more]
MONTHLY BENEFIT AMOUNT. If the Insured is totally disabled or if the Insured's
loss of net income is 75% or more, we will pay the Maximum Disability Benefit
for that month. Whenever the loss of net income is less than 75% but at least
20%, the amount payable will be determined by the following formula:
LOSS OF NET INCOME x Maximum Disability
prior net income Benefit
During the first six months that we pay the Disability Benefit, as a result of a
residual disability, we will pay one-half
-7-
<PAGE> 8
of the Maximum Disability Benefit rather than the amount due under the formula
if the Insured's loss of net income is from 20% to 50%.
[During the first 6 months of residual disability that the Insured's loss of net
income is 20% to 50%, we will pay half the Maximum Disability Benefit.]
[Loss of Use benefits are paid even if the insured is working in his regular
occupation and has no loss of net income.]
BENEFIT FOR LOSS OF USE. Limited by the Maximum Benefit
Period, we will pay the Maximum Disability Benefit monthly while an injury or
sickness causes the Insured the total loss of use of:
1. speech, hearing in both ears, or sight in both eyes; or
2. one hand and one foot; or
3. both hands or
4. both feet.
We will pay this benefit from the date of loss.
After disability ceases, resumption of this Loss of Use Benefit is subject to
the preceding requirements and those stated in the Successive Disabilities
provision.
[Disabilities recurring within 6 months will not be considered separate
disabilities unless they are the result of different causes.]
SUCCESSIVE DISABILITIES. A period of disability which follows a past period of
disability will be considered a separate period of disability only if the
subsequent period of disability is;
1. caused by a different injury or sickness than the one which caused the
past period of disability; or
2. separated from the past period of disability by at least six months
during which the Insured is able to return to work full time in his
regular occupation.
Any such separated period of disability will be considered a new disability; it
will be subject to its own Elimination Period and Maximum Benefit Period. Any
other subsequent period of disability will be considered an extension of the
past period of disability.
[Consecutive days not required.]
[During disability, premium is waived even beyond benefit periods. All premiums
paid from the date of loss will be refunded]
WAIVER OF PREMIUM. After disability has lasted for ninety days while this policy
is effect, we will waive the premium as long as the Insured is unable to return
to work full time in his regular occupation as a result of the injury or
sickness which cause the disability. We will refund premium already paid for
that period on a pro rata basis.
[To protect current income at all times, coverage must increase income
increases--this feature provides an annual increase in the benefits amount based
on changes in the CPI-U--minimum 4%, maximum 8%.]
BENEFIT INDEXING PROVISION. On each policy anniversary until the policy
anniversary when the Insured's age is 55, except during disability, you will
automatically have the opportunity to increase the Maximum Disability Benefit by
the Indexed Amount provided that:
1. on each fifth policy anniversary, we determine based on evidence
submitted that the Insured's total coverage then in effect does not
exceed our issue and participation limits for the income which he is
then earning and.
2. you have not refused the opportunity to increase the Insured's coverage
in two consecutive years.
If you cannot automatically increase the Maximum Disability Benefit because
-8-
<PAGE> 9
the Insured did not satisfy provision (1) above, you still may increase the
Maximum Disability Benefit by the Indexed Amount on any subsequent policy
anniversary until the policy anniversary when the Insured's age is 55, except
during disability, if on that date the income which he is then earning qualifies
him for the increase.
When the opportunity is made available, you may increase the Insured's Maximum
Disability Benefit by paying the premium for the increased amount. The premium
will be based on his age on that policy anniversary and the premium rate then in
effect for this plan. The Maximum Benefit Period. Elimination Period and plan
will be the same as for the coverage which is indexed.
INDEXED AMOUNT. The increase available each year will be the percent change in
the CPI-U between November 30 in the previous calendar year and November 30 of
the calendar year before that one or 8%, whichever is smaller, times the current
Maximum Disability Benefit for the policy. If the change in the CPI-U is less
then 4%, the increase available will be 4% of the current Maximum Disability
Benefit.
[Benefits are payable as a sickness]
TRANSPLANT DONOR BENEFIT. Disability which result from the transplant of a part
of the Insured's body to another person's body will be considered caused by a
sickness.
[Flexible Rehabilitation Program]
REHABILITATION. While the Insured is receiving the Disability Benefit, you may
request or we may suggest participation in a rehabilitation program designed to
help him return to work. If we determine that such a program is appropriate, we
may pay reasonable expenses for such items as tuition, books, training programs,
or additional living expenses. The actual expenses covered and the terms of the
plan will be subject to mutual agreement. Our agreement will be outlined in a
written plan of rehabilitation. Benefits will continue as provided by this
policy except if they are modified by the plan of rehabilitation.
EXCLUSIONS AND LIMITATIONS
This policy does not pay benefits which are based on injury or sickness caused
by war or an act of war, whether declared or undeclared.
PREEXISTING CONDITION LIMITATION. This policy does not pay benefits which are
based on a preexisting condition if:
1. the preexisting condition is not disclosed or is misrepresented in the
application; and
2. the preexisting condition impairs the Insured or causes a loss of use
or other loss during the first two years after the effective date of
the coverage.
Benefits will not be paid if they are based on impairment or loss of use or
other loss that began before the effective date of the coverage.
MULTIPLE BENEFITS. The Disability Benefit or Loss of Use Benefit payable in any
month shall not exceed the Maximum Disability Benefit. In any
-9-
<PAGE> 10
month that the Loss of Use Benefit is paid, no Disability Benefit will be
paid.
CLAIM INFORMATION
HOW TO FILE A CLAIM. To make a claim under this policy, the following steps
must be taken:
1. give Notice of Claim (someone must notify us that disability has
started as defined in this policy);
[Benefit procedures.]
2. file Proof of Loss (the Insured, or someone acting in his behalf, and
his attending physician must complete and return the claim form
provided by us);
3. promptly complete and return any other forms we require; and
4. the Insured undergoes a medical examination or a personal interview as
often as we reasonably request while the claim is pending. We reserve
the right to select the examiner. We will pay for the examination.
We will evaluate the claim and either:
1. pay the benefits specified in the policy; or
2. notify the Insured and any Loss Payee that benefits are not payable and
why. If we need more information, we will tell the Insured and any Loss
Payee what we need.
CONDITIONS AND TIME LIMITS. In order for benefits to be payable, there are some
conditions and time limits which each of us must meet. They are:
1. We must be given the Notice of Claim within 30 days after the
Elimination Period begins, or as soon as reasonably possible.
2. We will furnish claim forms within 15 days after we receive written
Notice of Claim. If the forms are not received within 15 days, send us
proof of what happened and the extent of the sickness or injury.
3. The claim forms and other information requested by us (Proof of Loss)
must be furnished to us within 90 days after each month for which a
benefit is payable. However, failure to furnish such proof within 90
days will not reduce or nullify the claim if proof is furnished as soon
as reasonably possible within one year after the 90 days. If the
Insured is legally unable to notify us, the one year limit does not
apply.
4. We must be given the information which we need to determine if a
benefit is payable and how much that benefit should be. We may require
relevant portions of income tax returns for the Insured or his
business, income statements, vouchers for overhead expenses, and other
statements or reports of receipts and payments. We may also require
evidence that the Insured was liable for an overhead expense before
disability began.
HOW AND WHEN WE PAY BENEFITS. We will pay benefits due under this policy in
United States dollars. We will not
-10-
<PAGE> 11
pay any benefit until we have sufficient Proof of Loss. When we have determined
that the claim is payable, we will pay according to the Benefits provision. If
any amount is accrued and unpaid when our liability terminates, we will pay it
immediately.
We will pay all benefits to the Loss Payee if living, otherwise we will pay you.
If you die while you are entitled to receive benefits, we will pay any remaining
benefit and any unearned premium to your estate.
CHANGE OF PLAN PROVISION
[The needs of individuals change is business and employment ________ change.
This policy ____ ____ and the right to convert his coverage to ________ _____
insurance contract, while ______ original ___ or premium ___]
This policy may be exchanged for any other disability income policy issued by us
when the exchange is made, subject to underwriting guidelines then in effect,
provided:
1. the Insured is not disabled;
2. he is able to work full time in his regular occupation and is doing so;
and
3. the request is made before the policy anniversary when his age is 55.
The Insured, amount Maximum Benefit Period and Elimination Period will be the
same as for this policy. Any rider attached to this policy when you exchange it
may be continued on the new policy if it is available with that policy. The new
policy will exclude any condition excluded by this policy.
The premium for the new policy will be based on the Insured's premium class and
age on the effective dates of the coverages exchanged and his regular occupation
on the date the exchange is effective.
If your request is approved, the new policy will be effective as of the date we
receive the request to exchange policies.
GENERAL PROVISION
THE CONTRACT. This policy represents the entire contract between you and us.
Statement by agents or brokers are not part of our contract. Only an executive
officer of this Company can approve a change in this policy. The approval must
be in writing and be endorsed on or attached to this policy. No one else can
change this policy or waive any of its conditions.
Unless we tell you something else, years, months and anniversaries that we refer
to are calculated from the Policy Date shown on page 3.
[If disability occurs within the 2 year contestability period we may contest
that disability only up to one year beyond the two year period of contestability
or the length of disability, whichever is short.]
INCONTESTABLE. We will not contest a coverage provided under this policy based
on information given in the application for that coverage after that coverage
has been in effect during the Insured's lifetime for two years from the
effective date of that coverage, excluding any period during which the Insured
is impaired or suffers a loss of use or other loss. In no event, will we contest
a coverage more than three years from the effective date of that coverage.
If impairment or loss of use or other loss begins after a coverage has been in
effect during the Insured's lifetime for two years from the effective date of
that
-11-
<PAGE> 12
coverage, we will not reduce or deny a claim which is based on that
impairment or loss of use or other loss because of a preexisting condition
unless the condition is excluded from coverage by name or description
CONTEST means that we question that validity of coverage under this policy by
letter to you. This contest is effective on the date we mail that letter and
refund the premium to you.
[Your state laws prevail.]
CONFORMITY WITH STATE STATUTES. If any provision of this policy conflicts with
the statutes of the state where the Insured resides on the effective date of
that provision, it is amended to conform with the minimum requirements of those
statutes.
LEGAL ACTIONS. No one may start legal action to recover on this policy until 60
days after written Proof of Loss has been given to us. Legal action must be
started within three years after the written Proof of Loss is required to be
furnished.
MISSTATEMENT OF AGE. If the Insured's age has been misstated, any benefit
payable will be changed to the amount which the premium paid would have bought
for the correct age.
If we accept premium for a coverage which we would not have issued or which
would have ceased according to the correct age, our only liability is to refund
the premium for the period not covered.
OWNER. You own this policy. You have all of the rights and privileges
granted by this policy while it is in effect. Some of your ownership rights are.
1. the right to continue or terminate this policy;
2. the right to name someone else (a Loss Payee) to receive the benefits
of this policy;
3. the right to suspend this policy while the Insured is in military
service; and
4. the right to assign any of all rights under this policy.
You may reduce the Maximum Disability Benefit at any time. Premium will be
recomputed for the reduced amount based on the Insured's age and premium class
on the effective dates of the coverage. The reduction will be effective on the
date we receive your written request at our Home Office.
LOSS PAYEE. If you decide to have someone else receive policy benefits, you must
notify us in writing on a form satisfactory to us. The notice will be effective
when we receive it at our Home Office.
ASSIGNMENT. You may assign any or all ownership rights to someone else. The
assignment must be in writing and must specify the rights which are assigned and
for how long. The Loss Payee is not changed by an assignment unless the
assignment specifically names a new Loss Payee.
No assignment is binding on us until the original or an acceptable copy is
received at our Home Office. We are not responsible for the validity or effect
of any assignment.
-12-
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.20
<SEQUENCE>9
<DESCRIPTION>EXHIBIT 10.20
<TEXT>
<PAGE> 1
Exhibit 10.20
KEYCORP
1988 STOCK OPTION PLAN
AS AMENDED AND RESTATED
AS OF SEPTEMBER 19, 1996
1. PURPOSE OF THE PLAN
The purpose of the KeyCorp 1988 Stock Option Plan is to provide a
method by which those employees of KeyCorp and its Subsidiaries who are largely
responsible for the management, growth, and protection of the business, and who
are making and can continue to make substantial contributions to the success of
the business, may be encouraged to acquire a larger stock ownership in KeyCorp,
thus increasing their proprietary interest in the business, providing them with
greater incentive for their continued employment, and promoting the interests of
KeyCorp and all of its shareholders. Accordingly, KeyCorp will, from time to
time during the term of the Plan, grant to such key employees as may be
selected, in the manner provided in the Plan, options to purchase KeyCorp Common
Shares and stock appreciation rights to use in connection with the stock
options, subject to the conditions provided in the Plan.
2. DEFINITIONS
Unless the context clearly indicates otherwise, the following terms
have the meanings set forth below.
(a) "Board of Directors" or "Board" means the Board of Directors of
KeyCorp.
(b) "Code" means the Internal Revenue Code of 1986, as amended.
(c) "Committee" means the committee appointed by the Board of Directors
of KeyCorp to administer the Plan.
(d) "Common Shares" means KeyCorp Common Shares, with a par value of $1
each.
(e) "Grant Date" as used with respect to a particular Option, means the
date as of which such Option is granted by the Committee pursuant to the Plan.
(f) "Incentive Stock Option" means an Option that qualifies as an
Incentive Stock Option as described in Section 421 of the Code.
(g) "Non-Qualified Stock Option" means any Option granted under the
Plan other than Incentive Stock Options.
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<PAGE> 2
(h) "Option" means an option granted pursuant to Section 5 of the Plan
to purchase Common Shares and which shall be designated as either an Incentive
Stock Option or a Non-Qualified Stock Option.
(i) "Optionee" means an individual to whom an Incentive Stock Option or
Non-Qualified Stock Option or Right is granted pursuant to the Plan.
(j) "Plan" means the KeyCorp 1988 Stock Option Plan as set forth herein
and as may be amended from time to time.
(k) "Right" means a stock appreciation right granted under Section 7 of
the Plan.
(l) "Subsidiary" means any stock corporation of which a majority of the
voting common or capital stock is owned, directly or indirectly, by KeyCorp and
any other company designated as such by the Committee, but only during the
period of such ownership or designation.
(m) "Total and Permanent Disability," as applied to an Optionee, means
that the Optionee has (1) physical or mental impairment which entitles the
Optionee to receive disability payments under any long term disability plan of
KeyCorp or of any Subsidiary, or (2) established to the satisfaction of KeyCorp
that the Optionee is unable to perform normal duties and responsibilities with
KeyCorp by reason of a medically determinable physical or mental impairment
which can be expected to result in death or which has lasted or can be expected
to last for a continuous period of not less than twelve months, all within the
meaning of Section 22(e)(3) of the Code, and (3) in either case, satisfied any
requirement imposed by the Committee.
(n) "Transferee" means, with respect to Non-Qualified Stock Options
only, any person or entity to which an Optionee is permitted by the Committee to
assign or transfer all or part of his or her Options.
3. ADMINISTRATION OF THE PLAN
(a) The Plan shall be administered by the Committee, which shall be
comprised of three or more Directors who are appointed by the Board of Directors
and selected from those Directors who are not employees of KeyCorp or a
Subsidiary. The Board may from time to time remove members from or add members
to the Committee. Vacancies on the Committee, howsoever caused, shall be filled
by the Board. The Board shall select one of the Committee's members as Chairman.
The Committee shall hold meetings at such times and places as it may determine,
subject to such rules as to procedures not inconsistent with the provisions of
the Plan as are prescribed by the Board, set forth in KeyCorp's Regulations as
applicable to committees, and as prescribed by the Committee itself. A majority
of the authorized number of members of the Committee shall constitute a quorum
for the transaction of business. The affirmative vote of a majority of the
members of the Committee present at any meeting at which a quorum is present
shall be the valid act of the Committee. Acts taken without a
2
<PAGE> 3
meeting and reduced to or approved in a writing or writings signed by all of
the members of the Committee then serving shall be the valid acts of the
Committee. No member of the Committee shall be eligible to be granted Options or
Rights under the Plan while a member of the Committee.
(b) The Committee shall be vested with full authority to make such
rules and regulations as it deems necessary or desirable to administer the Plan
and to interpret the provisions of the Plan. Any determination, decision, or
action of the Committee in connection with the construction, interpretation,
administration, or application of the Plan shall be final, conclusive, and
binding upon all Optionees and any person claiming under or through an Optionee
unless otherwise determined by the Board.
(c) Any determination, decision, or action of the Committee provided
for in the Plan may be made or taken by action of the Board, if it so
determines, with the same force and effect as if such determination, decision,
or action had been made or taken by the Committee. No member of the Committee or
of the Board shall be liable for any determination, decision, or action made in
good faith with respect to the Plan or any Option or Right granted under the
Plan. The fact that a member of the Board who is not then a member of the
Committee shall at the time be, or shall theretofore have been, or thereafter
may be a person who has received or is eligible to receive an Option or Right
shall not disqualify him or her from taking part in and voting at any time as a
member of the Board in favor of or against any amendment or repeal of the Plan,
provided that such vote shall be in accordance with the recommendations of the
Committee.
4. STOCK SUBJECT TO THE PLAN
(a) The Common Shares to be issued or transferred under the Plan will
be KeyCorp Common Shares which shall be made available, at the discretion of the
Board, either from authorized but unissued Common Shares or from Common Shares
reacquired by KeyCorp, including shares purchased in the open market. The
maximum number of Common Shares upon which Options may be granted in each year
under this Plan shall not exceed 2 percent of the total issued and outstanding
Common Shares as of December 31 of the next preceding year, as adjusted pursuant
to Section 15 of the Plan, provided, however, that for each year in which the
Plan is in effect, no more than 1,355,625 of the total issued and outstanding
Common Shares shall be available for the grant of Incentive Stock Options under
this Plan. In addition, the maximum number of Common Shares upon which Options
may be granted in each year under this Plan to any one individual Optionee shall
not exceed .2% of the total issued and outstanding Common Shares as of December
31 of the next preceding year, as adjusted pursuant to Section 15 of the Plan.
Unused grant capacity shall not cumulate from one year to the next.
(b) In the event that any outstanding Option or Right under the Plan
for any reason expires or is terminated, the Common Shares allocable to the
unexercised portion of such Option or Right may again be made subject to Option
or Right under the Plan.
3
<PAGE> 4
5. GRANT OF OPTIONS
The Committee may from time to time, subject to the provisions of the
Plan, grant Options to key employees of KeyCorp or of a Subsidiary to purchase
Common Shares allotted in accordance with Section 4 of the Plan. The Committee
may designate any Option granted as either an Incentive Stock Option or a
Non-Qualified Stock Option, or the Committee may designate a portion of the
Option as an Incentive Stock Option and the remaining portion as a Non-Qualified
Stock Option. If an Optionee exercises an Option, then at the discretion of the
Committee or pursuant to the terms of the original Option, the Optionee may
receive a replacement Option to purchase a number of Common Shares determined by
the Committee or the terms of the original Option, with an option price
determined under Section 6 of the Plan as of the date of exercise of the
original Option and with a term extending to the expiration date of the original
Option.
6. OPTION PRICE
The purchase price per share of any Option granted under the Plan shall
be 100 percent of the fair market value of one Common Share on the date the
Option is granted, except that the purchase price per share shall be 110 percent
of the fair market value in the case of an Incentive Stock Option granted to an
individual described in subsection 8(b) of the Plan. For purposes of the Plan,
the fair market value of a Common Share shall be equal to the highest closing
price of one Common Share as reported for consolidated trading on the New York
Stock Exchange (or such other national securities exchange on which the Common
Shares may be principally traded) on the date the Option is granted, or if no
sale of Common Shares has been made on any securities exchange on that day, the
fair market value shall be determined by reference to such price for the next
preceding day on which a sale occurred. During such time as Common Shares are
not listed on a national securities exchange, fair market value per share shall
be the mean between the closing dealer "bid" and "ask" prices for Common Shares
as quoted by National Association of Securities Dealers Automated Quotation
System for the day of the grant, and if no "bid" and "ask" prices are quoted for
the day of grant, the fair market value shall be determined by reference to such
prices on the next preceding day on which such prices were quoted. In the event
that Common Shares are not traded on a national securities exchange, and no
closing dealer "bid" and "ask" prices are available, then the fair market value
of one Common Share on the day the Option is granted shall be determined by the
Committee or by the Board. The purchase price shall be subject to adjustment
only as provided in Section 15 of the Plan.
7. GRANT OF RIGHTS
The Committee may, at any time and in its discretion, grant to any
employee of KeyCorp or any of its Subsidiaries who is awarded or who holds an
outstanding Option or any other outstanding stock option granted by KeyCorp, the
right to surrender such Option (to the extent any Option or such other stock
option is otherwise exercisable) and to receive from KeyCorp an amount equal to
the excess, if any, of the fair market value of the Common Shares with respect
to which such Option is surrendered on the date of such surrender over the
4
<PAGE> 5
option price of the Option or other stock option surrendered. Payment by KeyCorp
of the amount receivable upon any exercise of a Right may be made by delivery of
Common Shares, or cash, or any combination of Common Shares and cash, as
determined in the sole discretion of the Committee from time to time. No
fractional shares shall be issued. The Committee may provide for the elimination
of fractional Common Shares delivered to the Optionee without adjustment or for
the payment of the value of such fractional shares in cash. KeyCorp Common
Shares delivered to the Optionee upon the exercise of a Right, and the surrender
of the Option or stock option, shall be valued at the fair market value
(determined pursuant to Section 6) of a Common Share on the date the right is
exercised and the Option or stock option is surrendered. The Committee may limit
the period or periods during which the Rights may be exercised and may provide
such other terms and conditions (which need not be the same with respect to each
Optionee) under which a Right may be granted and/or exercised. A Right may be
exercised only as long as the related Option or stock option is exercisable. In
no event may a Right be exercised more than ten years after the date of the
grant of the related Option or stock option. A right may not be granted with
respect to an Incentive Stock Option at any time other than at the same time the
Incentive Stock Option is granted. Rights granted with respect to Incentive
Stock Options (a) shall expire no later than the expiration of the underlying
Option, (b) shall be for no more than the difference between the exercise price
of the underlying option and the market price of the stock subject to the
underlying option at the time the right is exercised, (c) shall be transferrable
only when the underlying Option is transferrable and under the same conditions,
(d) shall be exercisable only when the underlying Option is exercisable, and (e)
shall be exercisable only when the market price of the stock subject to the
underlying Option exceeds the exercise price of the Option.
8. ELIGIBILITY OF OPTIONEES
(a) Options and Rights shall be granted only to persons who are key
employees of KeyCorp or of a Subsidiary as determined by the Committee at the
time of grant. The term "employees" shall include persons who are Directors or
Officers who are also employees of KeyCorp or of any Subsidiary.
(b) Any other provision of the Plan notwithstanding, an individual who
owns more than ten percent of the total combined voting power of all classes of
outstanding KeyCorp Common Shares or any Subsidiary shall not be eligible for
the grant of an Incentive Stock Option unless the special requirements set forth
in Sections 6 and 10(a) of the Plan are satisfied. For purposes of this
subsection (b), in determining stock ownership, an individual shall be
considered as owning the stock owned, directly or indirectly, by or for his or
her brothers and sisters, spouse, ancestors, and lineal descendants. Stock
owned, directly or indirectly, by or for a corporation, partnership, estate, or
trust shall be considered as being owned proportionately by or for its
shareholders, partners, or beneficiaries. Stock with respect to which such
individual holds an Option shall not be counted. Outstanding stock shall include
all stock actually issued and outstanding immediately after the grant of the
Option. Outstanding stock shall not include shares authorized for issue under
outstanding Options held by the Optionee or by another person.
5
<PAGE> 6
(c) Subject to the terms, provisions, and conditions of the Plan and
subject to review by the Board, the Committee shall have exclusive jurisdiction
to (1) select the key employees to be granted Options or Rights (it being
understood that more than one Option or Right may be granted to the same
person), (2) determine the number of shares subject to each Option or Right, (3)
determine the date or dates when the Options or Rights will be granted, (4)
determine the purchase price of the shares subject to each Option in accordance
with Section 6 of the Plan, (5) determine the date or dates when each Option or
Right may be exercised within the term of the Option specified pursuant to
Section 10 of the Plan, (6) determine whether or not an Option constitutes an
Incentive Stock Option, and (7) prescribe the form, which shall be consistent
with the Plan, of the documents evidencing any Options or Rights granted under
the Plan.
(d) Neither anything contained in the Plan or in any document under the
Plan nor the grant of any Option or Right under the Plan shall confer upon any
Optionee any right to continue in the employ of KeyCorp or of any Subsidiary or
limit in any respect the right of KeyCorp or of any Subsidiary to terminate the
Optionee's employment at any time and for any reason.
9. NON-TRANSFERABILITY
Non-Qualified Stock Options may be assignable or transferable in the
Committee's discretion, and any Transferee shall have the power to exercise such
Non-Qualified Stock Option in accordance with the terms of such Option and this
Plan. No Incentive Stock Option or Right granted under the Plan shall be
assignable or transferable by the Optionee other than by will or the laws of
descent and distribution, and during the lifetime of an Optionee, all such
Options shall be exercisable only by the Optionee.
10. TERM AND EXERCISE OF OPTIONS AND RIGHTS
(a) Each Option or Right granted under the Plan shall terminate on the
date determined by the Committee and specified in the Option Agreement, provided
that each Option shall terminate not later than ten years after the date of
grant. However, any Option designated as an Incentive Stock Option granted to a
more than ten percent shareholder shall terminate not later than five years
after the date of grant. The Committee, at its discretion, may provide further
limitations on the exercisability of Options or Rights granted under the Plan.
An Option or Right may be exercised only during the continuance of the
Optionee's employment, except as provided in Section 11 of the Plan.
(b) A person electing to exercise an Option or Right shall give written
notice to KeyCorp, in such form as the Committee shall have prescribed or
approved, of such election and of the number of shares he or she has elected to
purchase and shall at the time of exercise tender the full purchase price of any
shares he or she has elected to purchase. The purchase price upon the exercise
of an Option shall be paid in full in cash, provided, however, that in lieu of
cash, with the approval of the Committee at or prior to exercise, an Optionee
or, with respect to Non-Qualified Stock Options, any Transferee may exercise his
or her Option by
6
<PAGE> 7
tendering to KeyCorp Common Shares owned by him or her and having a fair market
value equal to the cash exercise price applicable to his or her Option, with the
then fair market value of such stock to be determined in the manner provided in
Section 6 of the Plan (with respect to the determination of the fair market
value of Common Shares on the date an Option is granted). However, if an
Optionee or, with respect to Non-Qualified Stock Options, a Transferee pays the
Option exercise price of a Non-Qualified Stock Option in whole or in part in the
form of unrestricted Common Shares already owned by the Optionee or Transferee,
KeyCorp may require that the Optionee or Transferee have owned the stock for a
period of time that would not cause the exercise to create a charge to KeyCorp's
earnings. Such provision may be used by KeyCorp to prevent a pyramid exercise.
As conditions to exercising an Option or a Right, the holder must (1) arrange to
pay to KeyCorp any amount required to be withheld under any tax law on account
of the exercise, and (2) in the case of an Incentive Stock Option, agree to
notify KeyCorp of any disqualifying disposition (as defined in Section 421 of
the Code) of the Common Shares acquired upon the exercise and agree to pay to
KeyCorp any amount required to be withheld under any tax law on account of the
disposition. Any payment on account of withholding taxes shall be made in a form
acceptable to the Committee.
(c) An Optionee or a Transferee of an Option shall have no rights as a
shareholder with respect to any shares covered by his or her Option or Right
until the date the Stock Certificate is issued evidencing ownership of the
shares. No adjustments shall be made for dividends (ordinary or extraordinary),
whether in cash, securities, or other property, or distributions, or other
rights for which the record date is prior to the date such Stock Certificate is
issued, except as provided in Section 15 of the Plan.
(d) A person may, in accordance with the other provisions of the Plan,
elect to exercise Options or Rights in any order, notwithstanding the fact that
Options or Rights granted to him or her prior to the grant of the Options or
Rights selected for exercise are unexpired.
11. TERMINATION OF EMPLOYMENT
If an Optionee severs from all employment with KeyCorp and/or its
Subsidiaries, any Option or Right granted to him or her under the Plan shall
terminate as follows: (1)
(a) An Option or Right held by an Optionee who has terminated
employment due to a Total and Permanent Disability or, with respect to
Non-Qualified Stock Options, any Option or Right held by a Transferee shall
terminate twenty-four months after the termination of employment; (2)
- --------
(1) Pursuant to the resolutions adopted by the Executive Equity Compensation
Committee of the Board of Directors of the Corporation dated as of January 18,
1995, the amendments made in Section 11 of the Plan, as incorporated herein, do
not apply to Incentive Stock Options granted pursuant to the Plan. All Incentive
Stock Options granted under the Plan will be governed by the terms set forth in
the original Plan.
(2) Incentive Stock Options shall terminate upon their original expiration
date, as provided in the original Plan; provided, however, that the exercise of
an Incentive Stock Option more than one year after the termination
7
<PAGE> 8
(b) An Option or Right shall be exercisable within a period of one year
from the date of Optionee's death by (i) the executor or administrator of the
Optionee's estate, (ii) by the person to whom the Optionee shall have
transferred such right by last Will and Testament or by the laws of descent or
distribution or, (iii) with respect to Non-Qualified Stock Options, by any
Transferree;
(c) An Option or Right held by an Optionee who terminates for cause, as
determined by the Committee, or, with respect to Non-Qualified Stock Options, an
Option or Right held by any Transferee of such Optionee shall expire immediately
upon the date of termination unless some other expiration date is fixed by the
Committee;
(d) An Option or Right held by an Optionee who terminates employment
under circumstances entitling the Optionee to immediate payment of normal
retirement or early retirement benefits under any retirement or supplemental
retirement plan of KeyCorp or of a Subsidiary (whether the Optionee elects to
commence or defer receipt of such payment) or, with respect to Non-Qualified
Stock Options, an Option or Right held by any Transferee of such Optionee shall
expire twenty-four months after the termination of employment unless (i)
subsection 11(c) above is applicable, in which case such subsection 11(c) shall
govern, or (ii) a later expiration date is fixed by the Committee; (3) and
(e) An Option or Right held by an Optionee who terminates for any
reason other than those specified in subsections (a), (b), (c) or (d) above or,
with respect to Non-Qualified Stock Options, an Option or Right held by any
Transferree of such Optionee shall expire six months after the date of
termination of employment unless a later expiration date is fixed by the
Committee. (4)
The foregoing notwithstanding, no Option or Right shall be exercisable
after its expiration date.
Whether an authorized leave of absence or an absence for military or
governmental service shall constitute termination of employment for purposes of
the Plan shall be determined by the Committee, which determination shall be
final, conclusive, and binding upon the affected Optionee and any person
claiming under or through such Optionee. Termination of employment with any
Subsidiary of KeyCorp in order to accept employment with another Subsidiary of
KeyCorp or while remaining an employee of KeyCorp or of any of its Subsidiaries
shall not be a termination of employment for the purposes of this Section 11.
- --------------------------------------------------------------------------------
of employment because of disability will cause the Option to fail to qualify for
Incentive Stock Option treatment under the Code.
(3) Incentive Stock Options shall expire 3 months after the date of
termination, unless a later date is fixed by the Committee, as provided in the
original Plan.
(4) Incentive Stock Options shall expire 3 months after the date of
termination, unless a later date is fixed by the Committee, as provided in the
original Plan.
8
<PAGE> 9
12. MODIFICATION, EXTENSION, AND RENEWAL
Subject to the terms and conditions and within the limitations of the
Plan, the Committee may modify, extend, or renew outstanding Options or Rights
(to the extent not theretofore exercised) and authorize the granting of new
Options or Rights in substitution therefor. Without in any way limiting the
generality of the foregoing, the Committee may grant to an Optionee, if he or
she is otherwise eligible and consents thereto, a new or modified Option or
Right in lieu of an outstanding Option or Right for a number of shares at an
exercise price and for a term which are greater or less than under the earlier
Option or Right or may do so by cancellation and re-grant, amendment,
substitution, or otherwise subject only to the general limitations and
conditions of the Plan. The foregoing notwithstanding, no modification of an
Option or Right shall, without the consent of the Optionee, alter or impair any
rights or obligations under any Option or Right theretofore granted under the
Plan.
13. PERIOD IN WHICH GRANTS MAY BE MADE
Options and Rights may be granted pursuant to the Plan at any time on
or before April 26, 2000.
14. AMENDMENT OR TERMINATION OF THE PLAN
The Board may at any time terminate, amend, modify, or suspend the
Plan, provided that, without the approval of the shareholders of KeyCorp, no
amendment or modification shall be made by the Board which (a) increases the
maximum number of shares as to which Options or Rights may be granted under the
Plan; (b) alters the method by which the Option price is determined; (c) extends
any Option or Right for a period longer than ten years after the date of grant;
(d) materially modifies the requirements as to eligibility for participation in
the Plan; or (e) alters this Section 14 so as to defeat its purpose. Further, no
amendment, modification, suspension, or termination of the Plan shall in any
manner affect any Option or Right theretofore granted under the Plan without the
consent of the Optionee or any person validly claiming under or through the
Optionee.
15. CHANGES IN CAPITALIZATION
(a) In the event that the shares of KeyCorp, as presently constituted,
shall be changed into or exchanged for a different number or kind of shares of
stock or other securities of KeyCorp or of another corporation (whether by
reason of merger, consolidation, recapitalization, reclassification, split-up,
combination of shares, or otherwise), or if the number of such shares of stock
shall be increased through the payment of a stock dividend, then subject to the
provisions of subsection (c) below, there shall be substituted for or added to
each share of stock of KeyCorp which was theretofore appropriated or which
thereafter may become subject to an Option or Right under the Plan the number
and kind of shares of stock or other securities into which each outstanding
KeyCorp Common Share shall be so changed, or for which each such share shall be
exchanged, or to which each such share shall be entitled, as the case may be.
Outstanding Options and Rights shall also be appropriately amended as to
9
<PAGE> 10
price and other terms as may be necessary to reflect the foregoing events. The
maximum number of Common Shares upon which Options and Incentive Stock Options
may be granted, as provided in Section 4(a) of the Plan, shall be
proportionately adjusted to reflect any of the foregoing events.
(b) If there shall be any other change in the number or kind of
outstanding shares of stock of KeyCorp, or of any stock or other securities into
which such stock shall have been changed, or for which it shall have been
exchanged, and if the Board or the Committee, as the case may be, shall, in its
sole discretion, determine that such change equitably requires an adjustment in
any Option or Right which was theretofore granted or which may thereafter be
granted under the Plan, then such adjustment shall be made in accordance with
such determination.
(c) A dissolution or liquidation of KeyCorp or a merger or
consolidation in which KeyCorp is not the surviving corporation shall cause each
outstanding Option and Right to terminate, except to the extent that another
corporation may and does in the transaction assume and continue the Option or
substitute its own options. In either event, the Board or the Committee, as the
case may be, shall have the right to accelerate the time within which the Option
or Right may be exercised.
(d) Fractional shares resulting from any adjustment in Options or
Rights pursuant to this Section 15 may be settled as the Board or the Committee,
as the case may be, shall determine.
(e) To the extent that the foregoing adjustments relate to stock or
securities of KeyCorp, such adjustments shall be made by the Committee, whose
determination in that respect shall be final, binding, and conclusive. Notice of
any adjustment shall be given by KeyCorp to each holder of an Option or Right
which shall have been so adjusted.
(f) The grant of an Option or Right pursuant to the Plan shall not
affect in any way the right or power of KeyCorp to make adjustments,
reclassifications, reorganizations, or changes of its capital or business
structure or to merge, consolidate, dissolve, liquidate, sell, or transfer all
or any part of its business or assets.
16. ACCELERATION UPON CHANGE OF CONTROL
Unless otherwise specified by the Board or the Committee and set forth
in the documents evidencing any Options or Rights granted under the Plan, upon
the occurrence of a Change of Control of KeyCorp, each Option or Right granted
on or after January 3, 1994 to any Optionee that then remains outstanding shall
become immediately exercisable in full. For purposes of the Option or Right,
whether a Change of Control has occurred will be determined as provided in this
Section 16. Unless otherwise specified by the Board or the Committee and set
forth in the documents evidencing any Options or Rights granted under the Plan,
a Change of Control will be deemed to have occurred if at any time while the
Option is outstanding there is a Change of Control under any of clauses (a),
(b), (c), or (d), below. For these purposes
10
<PAGE> 11
KeyCorp will be deemed to have become a subsidiary of another corporation if any
one other corporation owns, directly or indirectly, 50 percent or more of the
total combined voting power of all classes of stock of KeyCorp.
(a) A Change of Control will have occurred under this clause (a) if
KeyCorp is a party to a transaction pursuant to which KeyCorp is merged with or
into, or is consolidated with, or becomes the subsidiary of another corporation
and, at any time within 24 months after the effective date of that transaction,
individuals who were directors of KeyCorp on the day after the last annual
meeting of shareholders of KeyCorp occurring before the transaction cease for
any reason to constitute at least 40% of the directors of the surviving or
resulting corporation or (if KeyCorp becomes a subsidiary in the transaction) of
the ultimate parent of KeyCorp.
(b) A Change of Control will have occurred under this clause (b) if
KeyCorp is a party to a transaction pursuant to which KeyCorp is merged with or
into, or is consolidated with, or becomes the subsidiary of another corporation
and,
(i) after giving effect to such transaction, less than 40% of the
then outstanding voting securities of the surviving or resulting corporation or
(if KeyCorp becomes a subsidiary in the transaction) of the ultimate parent of
KeyCorp represent or were issued in exchange for voting securities of KeyCorp
outstanding immediately prior to such transaction, and
(ii) at any time within 24 months after the effective date of that
transaction, individuals who were directors of KeyCorp on the day after the last
annual meeting of shareholders of KeyCorp occurring before that effective date
cease for any reason to constitute at least 51% of the directors of the
surviving or resulting corporation or (if KeyCorp becomes a subsidiary in the
transaction) of the ultimate parent of KeyCorp.
(c) A Change of Control will have occurred under this clause (c) if any
of the events described in (i), (ii), (iii), or (iv) of this clause (c) (a
"Change Event") occurs, but only if the condition set out in (x) or the
condition set out in (y) of this clause (c) applies. The Change Events described
in (i), (ii), (iii), and (iv) of this clause (c) are as follows:
(i) 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 (the "1934 Act"), 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 1934 Act (a "Person")).
(ii) KeyCorp is a party to a transaction pursuant to which KeyCorp
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 KeyCorp becomes a subsidiary in the transaction) of the
ultimate parent of KeyCorp represent or were issued in exchange for voting
securities of KeyCorp outstanding immediately prior to such transaction.
11
<PAGE> 12
(iii) 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.
(iv) The shareholders of KeyCorp approve any plan or proposal for
the liquidation or dissolution of KeyCorp.
The conditions set out in (x) and (y) of this clause (c) are as
follows:
(x) A Change Event occurred in connection with a transaction that
was not approved or recommended by KeyCorp's Board of Directors.
(y) A Change Event occurred in connection with a transaction that
was approved or recommended by KeyCorp's Board of Directors but only if, within
the 24 month period ending on the date of that Change Event, KeyCorp had been
"put in play" without the prior approval, solicitation, invitation, or
recommendation of KeyCorp's Board of Directors. For purposes of this condition
(y), KeyCorp will be deemed to have been "put in play" if any Person makes a
public announcement of an intention.
(I) to engage in a transaction with KeyCorp that, if
consummated, would result in a Change Event, or
(II) to "solicit" proxies in connection with a proposal that
is not approved or recommended by KeyCorp's Board of Directors or to engage in
an "election contest" relating to the election of Directors of KeyCorp (as those
terms are defined in Regulation 14 under the Securities Exchange Act or 1934, as
amended).
(d) A Change of Control will have occurred under this clause (d) if any
Person announces an intention to engage in an "election contest" relating to the
election of Directors of KeyCorp (as that term is defined in Regulation 14 under
the Securities Exchange Act of 1934, as amended) and, at any time within the
twenty-four month period immediately following the date of the announcement of
that intention, individuals who, on the day after the last annual meeting of
shareholders of KeyCorp occurring before that announcement, constituted the
directors of KeyCorp cease for any reason to constitute at least a majority
thereof.
Nothwithstanding the foregoing, the term "change of control" shall not
include the merger of the former KeyCorp, a New York Corporation, into Society
Corporation, an Ohio corporation, on March 1, 1994.
17. LISTING AND REGISTRATION OF SHARES
(a) No Option or Right granted pursuant to the Plan shall be
exercisable in whole or in part if at any time the Board or the Committee, as
the case may be, shall determine, in its sole discretion, that the listing,
registration, or qualification of the Common Shares subject to such Option or
Right on any securities exchange or under any applicable law, or the consent or
12
<PAGE> 13
approval of any governmental regulatory body, is necessary or desirable as a
condition of or in connection with the granting of such Option or Right or the
issue of shares thereunder unless such listing, registration, qualification,
consent, or approval shall have been effected or obtained free of any conditions
not acceptable to the Board.
(b) If a registration statement under the Securities Act of 1933 with
respect to shares issuable upon exercise of any Option or Right granted under
the Plan is not in effect at the time of exercise, the person exercising such
Option or Right shall give the Committee a written statement, satisfactory in
form and substance to the Committee, that he or she is acquiring the shares for
his or her own account for investment and not with a view to their disposition.
KeyCorp may place upon any Stock Certificate for shares issuable upon exercise
of such Option or Right such legend as the Committee may prescribe to prevent
disposition of the shares in violation of the Securities Act of 1933 or any
other applicable law.
18. EFFECTIVE DATE OF PLAN
The Plan was approved by KeyCorp's shareholders at the Annual Meeting
of Shareholders held on April 23, 1992, and became effective on that date.
Unless sooner terminated by the Board, the Plan will terminate ten years from
its effective date and no Options may be granted under the Plan after such
termination date. The Plan was restated by action of the Board of Directors on
November 17, 1994, to, among other things (i) adjust the number of shares
covered by the Plan and other various share limits contained in the Plan as a
result of the 3-for-2 stock split by means of a stock dividend on April 15, 1992
and the 1.205 exchange ratio applicable in the merger (the "Merger") of the
former KeyCorp, a New York corporation, into Society Corporation, an Ohio
corporation, on March 1, 1994, (ii) conform the provisions of the Plan to Ohio
law and KeyCorp's Regulations, both of which became applicable as a result of
the Merger, and (iii) incorporate all amendments to the Plan.
13
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.22
<SEQUENCE>10
<DESCRIPTION>EXHIBIT 10.22
<TEXT>
<PAGE> 1
Exhibit 10.22
KEYCORP EXCESS 401(K) SAVINGS PLAN
The KeyCorp Excess 401(k) Savings Plan ("Plan") is hereby amended and
restated in its entirety to be effective January 1, 1997. The Plan as amended
and restated, is intended to provide certain key employees of KeyCorp with a
Plan benefit equal the benefit that the Participant would have been eligible to
receive under the KeyCorp 401(k) Savings Plan but for the contribution limits
imposed by Section 402(g) of the Internal Revenue Code of 1986, as amended
(Code) or the compensation limits imposed by Section 401(a)(17) of the Code. It
is the intention of KeyCorp, and it is the understanding of those Participants
covered under the Plan, that the Plan is unfunded for tax purposes and for
purposes of Title I of the Employee Retirement Income Security Act of 1974, as
amended ("ERISA").
ARTICLE I
---------
DEFINITIONS
-----------
1.1 MEANING OF DEFINITIONS. For the purposes hereof, the following words and
phrases shall have the meanings hereinafter set forth, unless a different
meaning is plainly required by the context:
(A) "401(k) SAVINGS PLAN" shall mean the KeyCorp 401(k)
Savings Plan, with all amendments, modifications, supplements thereto
and hereafter made.
(B) "BENEFICIARY" shall mean the Participant's surviving
spouse who is entitled to receive the benefit hereunder in the event
the Participant dies before his or her Excess 401(k) Plan benefit shall
have been distributed to him or her in full.
(C) "CHANGE OF CONTROL" shall be deemed to have occurred if
under any rabbi trust arrangement maintained by the Corporation, the
Corporation is required under the terms of such arrangement to fund
such rabbi trust to secure the payment of any Participants' Plan
benefits payable hereunder because a "Change of Control" as defined in
such rabbi trust has occurred after January 1, 1997.
(E) "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 includes such section
and any comparable section or sections of any future legislation that
amends, supplements, or supersedes such section.
<PAGE> 2
(F) "COMPENSATION" of a Participant for any Plan Year or any
partial Plan Year in which the Participant incurs a Severance From
Service Date shall mean the entire amount of compensation paid to such
Participant during such period by reason of his employment with an
Employer, as reported for federal income tax purposes, plus that
compensation which would have been paid except for (1) the timing of an
Employer's payroll processing operations, (2) the provisions of the
KeyCorp 401(k) Savings Plan, or (3) the provisions of the KeyCorp
Flexible Benefits Plan, provided, however, that the term shall not
include:
(i) any amount attributable to the Employee's receipt of
stock appreciation rights and the amount of any gain
to the Employee upon the exercise of a stock option;
(ii) any amount attributable to the Employee's receipt of
non-cash remuneration which is included in the
Employee's income for federal income tax purposes;
(iii) any amount attributable to the Employee's receipt of
moving expenses and any relocation bonus paid to the
Employee during the Plan Year;
(iv) any amount attributable to a severance paid by an
Employer or the Corporation to the Employee;
(v) any amount attributable to fringe benefits (cash and
non-cash), regardless of whether any or all such
items are includible in such Participant's gross
income for federal tax purposes;
(vi) any amount attributable to any bonus or payment made
as an inducement for the Employee to accept
employment with an Employer;
(vii) any amount attributable to compensation of any type,
including bonus or incentive compensation payments,
paid on or after the Employee's Severance From
Service Date; or
(viii) any amount attributable to compensation deferred by
the Participant.
(G) "CORPORATE CONTRIBUTIONS" shall mean (i) those Matching
Employer Contributions and Profit Sharing Contributions an Employer has
agreed to contribute to the Plan in accordance with the provisions of
Article IV. Corporate Contributions shall be subject to the vesting
requirements contained within Article VI of the Plan, and a Participant
shall have no interest in those Corporate Contributions credited to his
or her Plan Account until the Participant is fully vested in such
Corporate Contributions.
<PAGE> 3
(H) "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.
(I) "DEFERRAL COMMENCEMENT DATE" shall mean the first pay
period coinciding with or immediately following the date on which the
Participant reaches his or her maximum contribution limit under Section
402(g) of the Code and/or the Participant's maximum compensation limit
under Section 401(a)(17) of the Code which effectively terminates the
Participant's further deferral of Compensation under the 401(k) Savings
Plan.
(J) "DEFERRAL ELECTION" shall mean the commitment made by the
Participant to defer up to 6% of the Participant's Compensation each
pay period to the Plan, which shall commence with the Participant's
Deferral Commencement Date; a Participant's Deferral Election shall be
made in such manner and at such time as the Corporation shall direct.
(K) "DEFERRAL PERIOD" shall mean each Plan year, provided
however that a Participants initial Deferral Period shall be from his
or her first day of participation in the Plan through the last day of
the applicable Plan year.
(L) "EMPLOYEE" shall mean any person who is employed by an
Employer who meets the definitional requirements of "Employee" as
contained within the 401(k) Savings Plan.
(M) "EMPLOYER" shall mean the Corporation and any of its
subsidiaries, unless specifically excluded as an Employer for Plan
purposes by written action of an officer of the Corporation. An
Employer's participation shall be subject to any conditions or
requirements made by the Corporation, and each Employer shall be deemed
to appoint the Plan Administrator as its exclusive agent under the Plan
as long as it continues as a subsidiary.
(N) "INVESTMENT FUND" shall mean those Investment Funds
established in accordance with and pursuant to the provisions of
Article III of the 401(k) Savings Plan, as may be amended from time to
time.
(O) "MATCHING EMPLOYER CONTRIBUTION" shall mean the amount
which an Employer has agreed to contribute to the Plan in accordance
with the provisions of Article IV of the Plan.
(P) "PARTICIPANT" shall mean an Employee who meets the
eligibility requirements set forth in Section 2.1 and becomes a Plan
Participant pursuant to Section 2.2 of the Plan.
<PAGE> 4
(Q) "PARTICIPANT DEFERRALS" shall mean the Participant's
elective deferral of Compensation under this Plan.
(R) "PLAN" shall mean the KeyCorp Excess 401(k) Savings Plan,
with all amendments, modifications, and supplements hereafter made.
(S) "PLAN ACCOUNT" shall mean those bookkeeping accounts
established by the Corporation for each Plan Participant, which shall
reflect (a) all Participant Deferrals and any earnings, gains, and
losses which would be attributable thereto, if such Participant
Deferrals had been invested pursuant to the Participant's directions in
the various Plan's Investment Funds, and (b) all Corporate
Contributions credited by the Corporation to each Participant, and any
dividends, gains, and losses which would be attributable thereto, if
such credited Corporate Contributions had been invested by the
Participant in the Corporation Stock Fund. Plan Accounts shall not
constitute separate Plan funds or 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) as otherwise
creating a right in any person or Participant to receive specific
assets of the Corporation. Benefits under the Plan shall be paid from
the general assets of the Corporation.
(T) "PROFIT SHARING CONTRIBUTIONS" shall mean those
discretionary contributions which an Employer may contribute to the
Plan pursuant to Article IV of the Plan.
(U) "VALUATION DATE" shall mean each "business day" or
"business days" designated by the Plan Administrator on which
Investment Funds are valued for bookkeeping purposes.
(V) "RETIREMENT" shall mean the termination of employment of a
Participant under circumstances making him or her eligible to receive
an Early Retirement or Normal Retirement Date benefit under the KeyCorp
Cash Balance Pension Plan as the same shall be in effect on the date of
a Participant's Retirement.
1.2 PRONOUNS: The masculine pronoun wherever used herein includes the
feminine in any case so requiring, and the singular may include the plural.
1.3 ADDITIONAL REFERENCE: All other words and phrases used herein shall
have the meaning given them in the 401(k) Savings Plan, unless a different
meaning is clearly required by the context.
<PAGE> 5
ARTICLE II
----------
EMPLOYEE PARTICIPATION
----------------------
2.1 EMPLOYEE ELIGIBILITY. An Employee shall be eligible to become a Participant
in the Plan, provided, (1) the Corporation selects such Employee to participate
in the Plan, (2) the Employee is a Participant in the 401(k) Savings Plan, (3)
such Employee's elective deferrals of Compensation under the 401(k) Savings Plan
reaches the deferral limitations prescribed by Section 402(g) of the Code,
and/or the compensation limitations prescribed by Section 401(a)(17) of the
Code, and (4) the Employee elects to defer up to 6% of his or her Compensation
to the Plan.
2.2 NOTIFICATION OF NEW PARTICIPANTS. The Corporation shall notify an Employee
of his or her eligibility to participate in the Plan; the Employee's election to
defer Compensation to the Plan shall be made at such time and in such a manner
as the Corporation shall direct. An Employee shall not become a Participant in
the Plan until the Employee's Deferral Election is received by the Corporation.
2.3 EFFECT AND DURATION. Upon becoming a Participant, an Employee shall be
entitled to the benefits and shall be bound by all terms and conditions of the
Plan. Each Employee who becomes a Participant in the Plan shall remain a
Participant until his or her Termination of Participation, as provided in
Section 7.1 hereof, provided however, that such Participant continues to meet
the eligibility requirements of Section 2.1 of the Plan, and provided further
that the Corporation continues the Participant's participation in the Plan.
2.4 AUTHORIZED LEAVE OF ABSENCE. A Participate on an authorized leave of absence
who is not receiving Compensation during such leave period shall continue as a
Plan Participant during such leave, provided, however, that no Corporate
Contributions shall be credited to the Participant's Plan Account on behalf of
the Participant during such leave period. Upon the Participant's return to
active employment with an Employer, the Participant's Participant Deferrals
shall automatically resume in accordance with the Participant's Deferral
Election as in effect prior to the Participant's leave period unless otherwise
modified by the Participant.
2.5 RE-EMPLOYMENT. If an Employee's employment is terminated and such Employee
is subsequently re-hired by an Employer, such Employee shall be eligible to
participate in the Plan only if the Employee meets the eligibility criteria
contained within Section 2.1 hereof, and the Corporation selects such Employee
to participate in the Plan.
ARTICLE III
-----------
PARTICIPANT DEFERRALS
---------------------
3.1 PARTICIPANT DEFERRALS. Upon meeting the eligibility criteria contained
within Section 2.1 hereof, a Participant may defer not less than one percent,
nor more than 6 percent of his or
<PAGE> 6
her Compensation to the Plan. Such Participant Deferrals shall be effective
with the first payment of Compensation to the Participant coinciding with or
immediately following the later of (1) the date on which the Participant's
elective deferral of Compensation under the 401(k) Savings Plan reaches the
maximum deferral limitations prescribed under Section 402(g) of the Code, and/or
the maximum compensation limits prescribed under Section 401(a)(17) of the Code,
and (2) the date on which the Corporation receives the Employee's Deferral
Election. Participant Deferrals shall be credited to the Participant's Plan
Account as of each applicable pay period in which the Participant makes
Participant Deferrals to the Plan.
3.2 CHANGE IN ELIGIBILITY STATUS. If the Corporation determines that a
Participant's performance is no longer at a level that deserves to be rewarded
through participation in the Plan, but does not terminate the Participant's
employment with an Employer, the Participant's existing Deferral Election shall
terminate at the conclusion of the Deferral Period, and no new Deferral Election
may be made by such Participant.
ARTICLE IV
----------
CORPORATE CONTRIBUTIONS
-----------------------
4.1 MATCHING EMPLOYER CONTRIBUTIONS. Matching Employer Contributions shall be
credited to the Participant's Plan Account as of each pay period in proportion
to the respective amount of each Participant's Participant Deferrals made to the
Plan during such pay period, so that the credited Matching Employer Contribution
shall be equal to 100% of the Participant's Participant Deferrals made to the
Plan for such pay period.
4.2 PROFIT SHARING CONTRIBUTIONS. Profit Sharing Contributions, if any, shall
be credited to Participant's Plan Accounts at such time and in such manner as
the Corporation directs.
ARTICLE V
---------
INVESTMENTS
-----------
5.1 PLAN ACCOUNT. All Participant Deferrals and Corporate Contributions shall be
credited to a Plan Account established in the Participant's name. Separate
sub-accounts may be established to reflect Participant's investment elections,
and any earnings, gains, or losses attributable to such elections.
5.2 INVESTMENT OF PARTICIPANT DEFERRALS. Each Participant shall direct the
manner in which his or her Participant Deferrals are to be invested for
bookkeeping purposes under the Plan. All Participant Deferrals may be invested
for bookkeeping purposes in any one or more of the Plan Investment Funds, in
such amount as the Participant shall elect, provided that such election amounts
are expressed in five percent increments. Participants may modify their
investment elections at such times and in such manner as the Corporation shall
direct. All Participant Deferrals invested in the Corporate Stock Fund shall be
credited to the
<PAGE> 7
Participant's Plan Account as of each applicable pay period based on the
New York Stock Exchange's closing price for such common shares as of the date of
payment of compensation for such applicable pay period.
5.3 INVESTMENT OF CORPORATE CONTRIBUTIONS. All Corporate Contributions credited
to a Participant's Plan Account shall be invested for bookkeeping purposes in
the Corporation Stock Fund based on the New York Stock Exchange's closing price
for such common shares as of the date of payment of compensation for such
applicable pay period. Corporate Contributions are not subject to Participants'
investment directions.
5.4 VALUATION OF PLAN ACCOUNTS. As of each Valuation Date, the Plan
Administrator shall determine the value of each Participant's Plan Account
balance, which shall reflect the net gain or loss of each Investment Fund
invested in (on a bookkeeping basis) by the Participant. The reasonable and
equitable decision of the Plan Administrator as to the value of each Investment
Fund shall be conclusive and binding upon all Participants and the Beneficiary
of each deceased Participant having any interest, direct or indirect in the
Participant's Plan Account. The value of an Investment Fund on any day not a
Valuation Date, shall be the value on the last preceding Valuation Date.
5.5 CORPORATE ASSETS. All Participant Deferrals, Corporate Contributions,
dividends, and any other earnings and losses credited to a Participant's Plan
Account remain the assets and property of the Corporation, which shall be
subject to distribution to the Participant only in accordance with Articles VII
and VIII of the Plan. All payments hereunder shall be in the form of cash and
shall be made from the general assets of the Corporation, and Participants and
Beneficiaries shall have the status of general unsecured creditors of the
Corporation. Nothing contained in the Plan shall create, or be construed as
creating a trust of any kind or any other fiduciary relationship between the
Participant, the Corporation, or any other person. It is the intention of the
Corporation and the Participant that the Plan be unfunded for tax purposes and
for purposes of Title I of the Employee Retirement Income Security Act of 1974,
as amended.
5.6 NO PRESENT INTEREST. Subject to any federal statute to the contrary, no
right or benefit under the Plan and no right or interest in each Participant's
Plan Account shall be subject to anticipation, alienation, sale, assignment,
pledge, encumbrance, or charge, and any attempt to anticipate, alienate, sell,
assign, pledge, encumber, or charge any right or benefit under the Plan, or
Participant's Plan Account shall be void. No right, interest, or benefit under
the Plan or Participant's Plan Account shall be liable for or subject to the
debts, contracts, liabilities, or torts of the Participant or Beneficiary. If
the Participant or Beneficiary becomes bankrupt or attempts to alienate, sell,
assign, pledge, encumber, or charge any right under the Plan or Participant's
Plan Account, such attempt shall be void and unenforceable.
5.7 DETERMINATION OF AMOUNT. The Plan Administrator shall verify the amount of
Participant Deferrals, Corporate Contributions, dividends, and earnings, if any,
to be credited to each Participant's Plan Account in accordance with the
provisions of the Plan. This
<PAGE> 8
determination shall be final and conclusive upon all Participants and
Beneficiaries hereunder. As soon as reasonably practicable after the close of
the Plan Year, the Corporation shall send to each Participant an itemized
accounting statement which shall reflect the Participant's Plan Account balance.
5.8 EFFECT OF PLAN TERMINATION. Notwithstanding anything to the contrary
contained in the Plan, the termination of the Plan or the termination of the
401(k) Savings Plan shall terminate the liability of the Corporation to make
further Corporate Contributions to the Plan.
ARTICLE VI
----------
VESTING
-------
6.1 PLAN VESTING. For purposes of determining a Participant's vested interest in
those Corporate Contributions credited to Participants' Plan Accounts, a
Participant shall become vested in those Corporate Contributions credited to his
or her Plan Account upon the following:
1. The Participant's completion of three years of vested service;
2. The Participant's termination of his active employment with an
Employer upon becoming Disabled; or
3. The Participant's death.
For purposes of this Section 6.1 hereof, vested service shall be
determined based on the Participant's Employment Commencement Date with an
Employer through the Participant's Severance From Service Date and shall be
calculated based on consecutive twelve-month periods during which time the
Participant is employed by an Employer.
ARTICLE VII
-----------
TERMINATION OF PARTICIPATION AND DISTRIBUTION
---------------------------------------------
7.1 TERMINATION OF PARTICIPATION. Each Participant shall cease to be a
Participant hereunder and shall be entitled to distribution of their vested Plan
benefits under the Plan, on the first to occur:
(a) On the date of the Participant's Retirement from the
employ of his or her Employer;
(b) On the date such Participant's employment with his or
her Employer is terminated for any other reason
(whether because of death, disability, voluntary
resignation, or otherwise),
<PAGE> 9
provided, however, that if any such date shall be a pay period, the Participant
shall for all purposes hereof cease to be a Participant upon the next succeeding
day
7.2 DISTRIBUTION. As of a Participant's Termination of Participation, the funds
attributable to Participant Deferrals and Corporate Contributions, if vested,
shall be distributed to the Participant or to his or her Beneficiary in a lump
sum payment. A Participant retiring from the employ of his or her Employer,
whose Plan Account balance equals or exceeds $50,000 as of such Retirement date,
may, request, subject to approval by the Corporation, that his or her
distribution be made in a series of installments over a fixed period of time
which shall not exceed 180 months. A Participant must request that his or her
distribution be made in the form of installments a minimum of twelve months
prior to the Participant's Retirement date.
Distribution under either method shall be made or commenced as soon as
reasonably practicable, but in no event later than 60 days after the close of
the Plan Year in which the Participant's termination of Participation has
occurred.
If a Participant or former Participant dies after the distribution of
his or her interest under the Plan has commenced, the remaining portion of the
Participant's entire interest under the Plan, if any, shall be distributed to
the Participant's Beneficiary under the method of distribution being used as of
the Participant's or former Participant's date of death. If a Participant or
former Participant dies before the distribution of his or her entire interest
has commenced, the Participant's or former Participant's entire interest under
the Plan shall be distributed to his or her Beneficiary in a lump-sum payment.
7.3 FORM OF DISTRIBUTION. The distribution of a Participant's or former
Participant's interest under the Plan shall be made in the form of cash.
7.4 FACILITY OF PAYMENT. If it is found that any individual to whom an amount is
payable hereunder is incapable of attending to his or her financial affairs
because of any mental or physical condition, including the infirmities of
advanced age, such amount (unless prior claim therefor shall have been made by a
duly qualified guardian or other legal representative) may, in the discretion of
the Corporation, be paid to another person for the use or benefit of the
individual found incapable of attending to his or her financial affairs or in
satisfaction of legal obligations incurred by or on behalf of such individual.
Any such payment shall be charged to the Participant's Plan Account from which
any such payment would otherwise have been paid to the individual found
incapable of attending to his financial affairs, and shall be a complete
discharge of any liability therefor under the Plan.
<PAGE> 10
ARTICLE VIII
------------
WITHDRAWALS
-----------
8.1 WITHDRAWAL OF CORPORATE CONTRIBUTIONS. Prior to the Participant's
Termination of Participation, the Participant may not withdraw from the Plan
those Participant Deferrals or Corporate Contributions credited to the
Participant's Plan Account, or any earnings or gains attributable thereto.
ARTICLE IX
----------
DEATH OF THE PARTICIPANT
------------------------
9.1 DEATH OF THE PARTICIPANT. In the event of the death of a Participant, the
amount, attributable to Participant Deferrals and vested Corporate Contributions
credited to the Participant's Plan Account shall be paid to the Participant's
Beneficiary If the Beneficiary (including all contingent Beneficiary(ies)),
fails to survive the Participant, the amount of the Participant's Account shall
be paid to the Participant's estate in a lump sum ninety days after the
appointment of an executor or administrator. In the event of the death of the
Beneficiary after the death of a Participant, the remaining amount of the
Account payable to such Beneficiary shall be paid in a lump sum to the estate of
such Beneficiary ninety days after the appointment of an executor or
administrator for such estate.
ARTICLE X
---------
ADMINISTRATION
--------------
ADMINISTRATION AND CLAIMS PROCEDURE
-----------------------------------
10.1 ADMINISTRATION. The Corporation, which shall be the "Administrator" of the
Plan for purposes of ERISA and the "Plan Administrator" for purposes of the
Code, shall be responsible for the general administration of the Plan, for
carrying out the provisions hereof, and for making payments hereunder. The
Corporation shall have the sole and absolute discretionary authority and power
to carry out the provisions of the Plan, including, but not limited to, the
authority and power (a) to determine all questions relating to the eligibility
for and the amount of any benefit to be paid under the Plan, (b) to determine
all questions pertaining to claims for benefits and procedures for claim review,
(c) to resolve all other questions arising under the Plan, including any
questions of construction or interpretation, and (d) to take such further action
as the Corporation shall deem necessary or advisable in the administration of
the Plan. All findings, decisions, and determinations of any kind made by the
Plan Administrator shall not be disturbed unless the Plan Administrator has
acted in an arbitrary and capricious manner. Subject to the requirements of law,
the Plan Administrator shall be the sole judge of the standard of proof required
in any claim for benefits and in any determination of eligibility for a benefit.
All decisions of the Plan Administrator shall be final
<PAGE> 11
and binding on all parties. The Corporation may employ such attorneys,
investment counsel, agents, and accountants as it may deem necessary or
advisable to assist it in carrying out its duties hereunder. The actions taken
and the decisions made by the Corporation hereunder shall be final and binding
upon all interested parties subject, however, to the provisions of Section 10.2.
The Plan year, for purposes of Plan administration, shall be the calendar year.
10.2 CLAIMS REVIEW PROCEDURE. Whenever the Plan Administrator decides for
whatever reason to deny, whether in whole or in part, a claim for benefits under
this Plan filed by any person (herein referred to as the "Claimant"), the Plan
Administrator shall transmit a written notice of its decision to the Claimant,
which notice shall be written in a manner calculated to be understood by the
Claimant and shall contain a statement of the specific reasons for the denial of
the claim and a statement advising the Claimant that, within 60 days of the date
on which he or she receives such notice, he or she may obtain review of the
decision of the Plan Administrator in accordance with the procedures hereinafter
set forth. Within such 60-day period, the Claimant or his or her authorized
representative may request that the claim denial be reviewed by filing with the
Plan Administrator a written request therefore, which request shall contain the
following information:
(i) the date on which the request was filed with the Plan
Administrator; provided, however, that the date on which the
request for review was in fact filed with the Plan
Administrator shall control in the event that the date of the
actual filing is later than the date stated by the Claimant
pursuant to this paragraph (i);
(ii) the specific portions of the denial of the claim on which the
Claimant requests the Plan Administrator to review;
(iii) a statement by the Claimant setting forth the basis upon which
the Plan Administrator should reverse its previous denial of
the claim and accept the claim as made; and
(iv) any written material which the Claimant desires the Plan
Administrator to examine in its consideration of his position
as stated pursuant to paragraph (ii) above.
In accordance with this Section, if the claimant requests a review of
the Plan Administrator's decision, such review shall be made by the Plan
Administrator, who shall, within ninety (90) days after receipt of the request
form, review and render a written decision on the claim containing the specific
reasons for the decision including reference to Plan provisions upon which the
decision is based. All findings, decisions, and determinations of any kind made
by the Plan Administrator shall not be modified unless the Plan Administrator
has acted in an arbitrary and capricious manner. Subject to the requirements of
a law, the Plan Administrator shall be the sole judge of the standard of proof
required in any claim for benefits, and any determination of eligibility for a
benefit. All decisions of the Plan Administrator shall be binding on the
claimant and upon all other Persons. If the Participant,
<PAGE> 12
or Beneficiary shall not file written notice with the Plan Administrator at
the times set forth above, such individual shall have waived all benefits under
the Plan other than as already provided, if any, under the Plan.
ARTICLE XI
----------
AMENDMENT AND TERMINATION
-------------------------
11.1 RESERVATION OF RIGHTS. The Corporation reserves the right to terminate the
Plan at any time by action of the Board of Directors of the Corporation, or any
duly authorized committee thereof, and to modify or amend the Plan, in whole or
in part, at any time and for any reason; provided, however, that no such action
shall reduce any Participant or Beneficiary's Participant Deferrals and
Corporate Contributions credited to the Participants' Plan Account as of the
effective date of such amendment.
11.2 EFFECT OF PLAN TERMINATION. If the Corporation terminates the Plan,
Participants shall receive distribution of their interests under the Plan within
60 days of the Plan's termination date, in a lump-sum payment.
ARTICLE XII
-----------
CHANGE OF CONTROL
12.1 CHANGE OF CONTROL. Notwithstanding the provisions of Section 11.1 and
Section 11.2 of Article XI, in the event of a Change of Control as defined in
Section 1.1(c) of the Plan, no amendment of modification of this Plan may be
made at any time on or after such Change of Control (1) to reduce or modify a
Participant's Pre-Change of Control Account Balance, or (2) to reduce or modify
the Investment Funds' method of crediting all earnings, gains and losses on a
Participant's Pre-Change of Control Account Balance. For purposes of this
Section 12.1 hereof, the term "Pre-Change of Control Account Balance" shall mean
with regard to any Plan Participant, the aggregate amount of such Participant's
Participant Deferrals and Corporate Contributions with all earnings, gains, and
losses thereon which are credited to the Participant's Plan Account through the
close of the calendar year in which such Change of Control occurs. All
Participant Deferrals and Corporate Contributions which are invested for
bookkeeping purposes in the Plan's Investment Funds shall be treated and shall
be valued in the same manner as the KeyCorp 401(k) Savings Plan Investment Funds
are treated and valued.
12.2 AMENDMENT IN THE EVENT OF A CHANGE OF CONTROL. On or after a Change of
Control, the provisions of Article IV, Article V, Article VI, Article VII, and
Article XII may not be amended or modified as such Sections and Articles apply
with regard to Participants' Pre-Change of Control Account Balances.
<PAGE> 13
ARTICLE XIII
------------
SECURITIES LAWS COMPLIANCE
13.1 RESTRICTIONS IMPOSED ON TRANSACTIONS INVOLVING THE CORPORATION STOCK FUND.
Notwithstanding any contrary provision in this Plan, the Corporation may, in its
discretion, but in a uniform, non-discriminatory manner, delay, suspend or
otherwise limit any investment in or withdrawal from the Corporation Stock Fund
for such time and to the extent the Corporation, on advice of legal counsel,
determines is necessary or desirable to avoid violating any applicable state or
federal securities laws, rules or regulations.
ARTICLE XIV
-----------
MISCELLANEOUS
-------------
14.1 TRUST FUND. At its discretion, the Corporation may establish one or more
trusts, with such trustees as the Corporation may approve, for the purpose of
providing for the payment of benefits owed under the Plan. Although such a trust
shall be irrevocable, in the event of insolvency or bankruptcy of the
Corporation, such assets will be subject to the claims of the Corporation's
general creditors. To the extent any benefits provided under the Plan are paid
from any such trust, Employer shall have no further obligation to pay them. If
not paid from the trust, such benefits shall remain the obligation of Employer.
14.2 PROTECTIVE PROVISIONS. A Participant will cooperate with Employer by
furnishing any and all information requested by Employer in order to facilitate
the payment of benefits hereunder.
14.3 VALIDITY. In case any provision of this Plan shall be held illegal or
invalid for any reason, said illegality or invalidity shall not affect the
remaining parts hereof, but this Plan shall be construed and enforced as if such
illegal and invalid provision had never been inserted herein.
14.4 NOTICE. Any notice required or permitted under the Plan shall be sufficient
if in writing and hand delivered or sent by registered or certified mail. Such
notice shall be deemed as given as of the date of delivery or, if delivery is
made by mail, as of the date shown on the postmark on the receipt for
registration or certification. Mailed notice to the Corporation shall be
directed to the Corporation address. Mailed notice to a Participant or
Beneficiary shall be directed to the individual's last known address in
Employer's records.
14.5 SUCCESSORS. The provisions of this Plan shall bind and inure to the benefit
of Employer and its successors and assigns. The term successors as used herein
shall include any corporate or other business entity which shall, whether by
merger, consolidation, purchase or otherwise acquire all or substantially all of
the business and assets of Employer, and successors of any such corporation or
other business entity.
<PAGE> 14
ARTICLE XV
----------
MISCELLANEOUS PROVISIONS
------------------------
15.1 NO COMMITMENT AS TO EMPLOYMENT. Nothing herein contained shall be construed
as a commitment or agreement upon the part of any Employee hereunder to continue
his or her employment with an Employer, and nothing herein contained shall be
construed as a commitment on the part of any Employer to continue the employment
or rate of compensation of any Employee hereunder for any period. All
Participants shall remain subject to discharge to the same extent as if the Plan
had never been put into effect.
15.2 BENEFITS. Nothing in the Plan shall be construed to confer any right or
claim upon any person, firm, or corporation other than the Participants, former
Participants, and Beneficiaries.
15.3 ABSENCE OF LIABILITY. No member of the Board of Directors of the
Corporation or a subsidiary or committee authorized by the Board of Directors,
or any officer of the Corporation or a subsidiary or officer of a subsidiary
shall be liable for any act or action hereunder, whether of commission or
omission, taken by any other member, or by any officer, agent, or Employee,
except in circumstances involving bad faith or willful misconduct, for anything
done or omitted to be done.
15.4 EXPENSES. The expenses of administration of the Plan shall be paid by the
Corporation.
15.5 PRECEDENT. Except as otherwise specifically provided, no action taken in
accordance with the Plan by the Corporation shall be construed or relied upon as
a precedent for similar action under similar circumstances.
15.6 WITHHOLDING. The Corporation shall withhold any tax which the Corporation
in discretion deems necessary to be withheld from any payment to any
Participant, former Participant, or Beneficiary hereunder, by reason of any
present or future law.
15.7 VALIDITY OF PLAN. The validity of the Plan shall be determined and the Plan
shall be construed and interpreted in accordance with the provisions of the Act,
the Code, and, to the extent applicable, the laws of the State of Ohio. The
invalidity or illegality of any provision of the Plan shall not affect the
validity or legality of any other part thereof.
15.8 PARTIES BOUND. The Plan shall be binding upon the Employers, Participants,
former Participants, and Beneficiaries hereunder, and, as the case may be, the
heirs, executors, administrators, successors, and assigns of each of them.
15.9 HEADINGS. All headings used in the Plan are for convenience of reference
only and are not part of the substance of the Plan.
<PAGE> 15
15.10 DUTY TO FURNISH INFORMATION. The Corporation shall furnish to each
Participant, former Participant, or Beneficiary any documents, reports, returns,
statements, or other information that it reasonably deems necessary to perform
its duties imposed hereunder or otherwise imposed by law.
Executed at Cleveland, Ohio, to be effective as of the 1st day of
January, 1997.
KEYCORP
By:
---------------------------
Title:
-------------------------
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.23
<SEQUENCE>11
<DESCRIPTION>EXHIBIT 10.23
<TEXT>
<PAGE> 1
Exhibit 10.23
KEYCORP
EXECUTIVE DEFERRED COMPENSATION PLAN
Effective June 1, 1990
<PAGE> 2
<TABLE>
<CAPTION>
TABLE OF CONTENTS
PAGE
----
<S> <C> <C>
ARTICLE I PURPOSE; EFFECTIVE DATE 1
1.1 Purpose 1
1.2 Effective Date 1
ARTICLE II DEFINITIONS 1
2.1 Account 1
2.2 Actuarial Equivalent 1
2.3 Beneficiary 2
2.4 Board 2
2.5 Change in Control 2
2.6 Committee 3
2.7 Company 4
2.8 Compensation 4
2.9 Deferral Commitment 4
2.10 Deferral Period 4
2.11 Determination Date 4
2.12 Discretionary Contribution 4
2.13 Earnings 4
2.14 Employer 5
2.15 Financial Hardship 5
2.16 Incentive Compensation 5
2.17 Make-Up Contribution 5
2.18 Participant 5
2.19 Participation Agreement 5
2.20 Plan 5
2.21 Prior Plan 6
2.22 Qualified Profit Sharing Plan 6
ARTICLE III PARTICIPATION AND DEFERRAL COMMITMENTS 6
3.1 Eligibility and Participation 6
3.2 Form of Deferral 7
3.3 Limitations on Deferral Committee 7
3.4 Commitment Limited by Termination 8
3.5 Modification of Deferral Commitment 8
3.6 Change in Employment Status 8
</TABLE>
(i)
<PAGE> 3
<TABLE>
<CAPTION>
TABLE OF CONTENTS
(Continued)
PAGE
----
<S> <C> <C>
ARTICLE IV DEFERRED COMPENSATION ACCOUNT 9
4.1 Account 9
4.2 Timing of Credits; Withholding 9
4.3 Make-Up Contributions 9
4.4 Discretionary Contributions 10
4.5 Determination of Account 10
4.6 Vesting of Account 11
4.7 Statement of Account 11
ARTICLE V PLAN BENEFITS 12
5.1 Distributions Prior to Termination
of Employment 12
5.2 Distributions Following Termination
of Employment 13
5.3 Form of Benefit Payment Following
Termination of Employment 14
5.4 Accelerated Distribution 14
5.5 Withholding for Taxes 14
5.6 Valuation and Settlement 15
5.7 Payment to Guardian 15
ARTICLE VI BENEFICIARY DESIGNATION 16
6.1 Beneficiary Designation 16
6.2 Changing Beneficiary 16
6.3 Community Property 16
6.4 No Beneficiary Designation 18
ARTICLE VII ADMINISTRATION 18
7.1 Committee; Duties 18
7.2 Agents 19
7.3 Binding Effect of Decisions 19
7.4 Indemnity of Committee 19
</TABLE>
(ii)
<PAGE> 4
<TABLE>
<CAPTION>
TABLE OF CONTENTS
(Continued)
PAGE
----
<S> <C> <C>
ARTICLE VIII CLAIMS PROCEDURE 19
8.1 Claim 19
8.2 Review of Claim 20
8.3 Notice of Denial of Claim 20
8.4 Reconsideration of Denied Claim 21
8.5 Employer to Supply Information 22
ARTICLE IX AMENDMENT AND TERMINATION OF PLAN 23
9.1 Amendment 23
9.2 Employer's Right to Terminate 23
ARTICLE X MISCELLANEOUS 24
10.1 Unfunded Plan 24
10.2 Company and Employer Obligations 25
10.3 Unsecured General Creditor 25
10.4 Trust Fund 25
10.5 Nonassignability 25
10.6 Not a Contract of Employment 26
10.7 Protective Provisions 26
10.8 Governing Law 26
10.9 Validity 26
10.10 Notice 27
10.11 Successors 27
(iii)
</TABLE>
<PAGE> 5
KEYCORP
EXECUTIVE DEFERRED COMPENSATION PLAN
ARTICLE I
PURPOSE; EFFECTIVE DATE
-----------------------
1.1 PURPOSE. The purpose of this Executive Deferred Compensation Plan
is to provide current tax planning opportunities as well as supplemental funds
for retirement or death for selected employees of the Employer. It is intended
that the Plan wil aid in attracting and retaining employees of exceptional
ability by providing them with these benefits.
1.2 EFFECTIVE DATE. The Plan is effective as of June 1, 1990.
ARTICLE II
DEFINITIONS
-----------
For the purposes of this Plan, the following terms shall have the
meanings indicated, unless the context clearly indicates otherwise:
2.1 ACCOUNT. "Account" means the device used by the Employer to measure
and determine the amount to be paid to a Participant under the Plan.
2.2 ACTUARIAL EQUIVALENT. "Actuarial Equivalent" means equivalence in
value between two or more forms and/or times of payment based on a
determination by an actuary chosen by the
PAGE 1 -- EXECUTIVE DEFERRED COMPENSATION PLAN
<PAGE> 6
committee, using sound acturial assumptions at the time of such determination
2.3 BENEFICIARY. "Beneficiary" means the person, persons or entity
entitled under Article VI to receive any Plan benefits payable after a
Participant's death.
2.4 BOARD. "Board" means the Board of Directors of the Company.
2.5 CHANGE IN CONTROL. A "Change in Control" means a Change in Control
of a nature that would be required to be reported (assuming such event has not
been "previously reported") in response to Item 1(a) of the current report on
Form 8-K, as in effect on the date hereof, pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934, as amended (the "Exchange Act") or any
successor thereto; provided that, without limitation, such a change in Control
shall be deemed to have occurred at such time as:
(a) Any person is or becomes the "beneficial owner (as
defined in Rule 13d-3 under the Exchange Act), directly or
indirectly, of twenty five percent (25%) or more of the combined
voting power of the Company's Voting Securities;
(b) Individuals who constitute the Board of the Company on
the date hereof (the "Incumbent Board") cease for any reason to
constitute at least a majority of the Board of the Company or the
Board of any corporation with which the Company merges, provided
that any person becoming a director subsequent to the date hereof
whose election, or nomination
PAGE 2 -- EXECUTIVE DEFERRED COMPENSATION PLAN
<PAGE> 7
for election by the Company's shareholders, was approved by a vote of at least
three quarters (3/4) of the directors comprising the Incumbent Board (either by
a specific vote or by approval of the proxy statement of the Company in which
such person is named as a nominee for director, without objection to such
nomination) shall be, for purposes of this clause (b), considered as though such
person were a member of the Incumbent Board;
(c) If any person or entity acquires an interest which is
determined by the Federal Reserve Board to constitute a controlling interest
in the Company;
(d) The sale by the Company of more than fifty percent (50%) of
the book value of its assets to a single purchaser or to a group of affiliated
purchasers; or
(e) The merger or consolidation of the Company in a transaction
in which the shareholders of the Company receive less than fifty percent (50%)
of the outstanding voting shares of the continuing corporation. Notwithstanding
anything in the foregoing to the contrary, no Change in Control shall be deemed
to have occurred by virtue of any transaction which results in which a
Participant, or group of Participants, acquiring, directly or indirectly, twenty
five percent (25%) or more of the combined voting power of the Company's Voting
Securities.
2.6 COMMITTEE. "Committee" means the Compensations
Committee of the Board.
PAGE 3 - EXECUTIVE DEFERRED COMPENSATION PLAN
<PAGE> 8
2.7 COMPANY. "Company" means KeyCorp, a New York
corporation.
2.8 COMPENSATION. "Compensation" means salary and incentive
Compensation payable to a Participant during the calendar year, before reduction
for amounts deferred under this Plan or any other salary reduction program.
Compensation does not include expense reimbursements, any form of non-cash
compensation, or benefits.
2.9 DEFERRAL COMMITMENT. "Deferral Commitment" means a
commitment made by a Participant to defer Compensation pursuant
to Article III.
2.10 DEFERRAL PERIOD. "Deferral Period" means each calendar
year. The initial Deferral Period, however, shall be from July 1, 1990,
through December 31, 1990.
2.11 DETERMINATION DATE. "Determination Date" means the
last day of each calendar month.
2.12 DISCRETIONARY CONTRIBUTION. "Discretionary Contribution"
means the Employer contribution credited to a Participant's Account under
Section 4.4.
2.13 EARNINGS. "Earnings" means the rate of growth credited
to an account on each Determination Date in a calendar year and shall be equal
to .5 percentage points higher than the effective annual yield of the average
of the Moody's Average Corporate Bond Yield Index for the previous calendar
month as published by Moody's Investor Service, Inc. (or any successor
PAGE 4 - EXECUTIVE DEFERRED COMPENSATION PLAN
<PAGE> 9
publisher thereto), or, if such index is no longer published, a substantially
similar index selected by the Board.
2.14 EMPLOYER. "Employer" means the Company and any
subsidiary or affiliate of the Company designated by the Board.
2.15 FINANCIAL HARDSHIP. "Financial Hardship" means a financial
hardship to the Participant resulting from a sudden and unexpected illness or
accident of the Participant or of a dependent of the Participant, loss of the
Participant's property due to casualty, or other similar extraordinary and
unforeseeable circumstances arising as a result of events beyond the control of
the Participant.
2.16 INCENTIVE COMPENSATION. "Incentive Compensation" means
amounts payable to a participant as incentive awards under the KeyCorp
Executive Incentive Compensation Plan.
2.17 MAKE-UP CONTRIBUTION. "Make-Up Contribution" means the
Employer contribution credited to a Participant's Account under 4.3.
2.18 PARTICIPANT. "Participant" means any eligible individual
who has elected to defer Compensation under this Plan.
2.19 PARTICIPATION AGREEMENT. "Participation Agreement" means
the agreement submitted by a Participant to the Committee prior to the
beginning of a Deferral Period, with respect to a Deferral Commitment made for
such Deferral Period.
2.20 PLAN. "Plan" means this Executive Deferred Compensation
Plan as amended from time to time.
PAGE 5 - EXECUTIVE DEFERRED COMPENSATION PLAN
<PAGE> 10
2.21 PRIOR PLAN. "Prior Plan" means the individual
deferral arrangements and plans in effect on May 31, 1990.
2.22 QUALIFIED PROFIT SHARING PLAN. "Qualified Profit Sharing
Plan" means the KeyCorp Profit Sharing Plus Plan, or any successor defined
contribution retirement income plan maintained by Employer that qualifies under
Section 401(a) of the Internal Revenue Code.
ARTICLE III
PARTICIPATION AND DEFERRAL COMMITMENTS
--------------------------------------
3.1 ELIGIBILITY AND PARTICIPATION.
(a) ELIGIBILITY. Eligibility to participate in the
Plan shall be limited to key employees of Employer who are
designated, from time to time, by the Board.
(b) PARTICIPATION. An eligible individual may elect to
participate in the Plan with respect to any Deferral Period by
submitting a Participation Agreement to the Committee by the 15th
day of the month immediately preceding the beginning of the
Deferral Period.
(c) PART-YEAR PARTICIPATION. When an individual
first becomes eligible to participate during a Deferral
Period, a Participation Agreement may be submitted to the
Committee within thirty (30) days after the Committee
notifies the individual of eligibility to participate.
Such Participation Agreement will be effective only with
regard
PAGE 6 - EXECUTIVE DEFERRED COMPENSATION PLAN
<PAGE> 11
to Compensation earned following submission to the
Committee.
3.2 FORM OF DEFERRAL. A Participant may elect Deferral
Commitments in the Participation Agreement as follows:
(a) SALARY DEFERRAL COMMITMENT. A salary Deferral
Commitment shall be related to the salary payable by
Employer to a Participant during the Deferral Period. The
amount to be deferred shall be stated either as a
percentage or a dollar amount.
(b) INCENTIVE DEFERRAL COMMITMENT. An incentive
Deferral Commitment shall be related to the Incentive
Compensation earned by the Participant for the Deferral
Period. The amount to be deferred shall be stated either
as a percentage or a dollar amount.
3.3 LIMITATIONS ON DEFERRAL COMMITMENTS. The following
limitations shall apply to Deferral Commitments:
(a) MINIMUM. The minimum deferral amount shall be two
hundred dollars ($200) for each month in the Deferral Period,
except there shall be no minimum deferral amount on an incentive
Deferral Commitment if the Participant has also made a salary
Deferral Commitment for the same Deferral Period. The minimum
Deferral Commitment for a Participant who enters participation
after the beginning of a Deferral Period shall be based on the
number of months remaining in the Deferral Period.
PAGE 7 - EXECUTIVE DEFERRED COMPENSATION PLAN
<PAGE> 12
(b) MAXIMUM. The maximum deferral amount shall be fifty
percent (50%) of salary in a salary Deferral Commitment and one
hundred percent (100%) of Incentive Compensation in an incentive
Deferral Commitment.
(c) CHANGES IN MINIMUM OR MAXIMUM. The Committee
may change the minimum or maximum deferral amounts from
time to time by giving written notice to all Participants.
No such change may affect a Deferral Commitment made prior
to the Committee's action.
3.4 COMMITMENT LIMITED BY TERMINATION. If a Participant
terminates employment with Employer prior to the end of the Deferral Period, the
Deferral Period shall end at the date of termination. The minimum deferral for
the Deferral Period shall be based on the number of months to the date of
termination.
3.5 MODIFICATION OF DEFERRAL COMMITMENT. Except as
provided in Section 5.1(b) below, Deferral Commitments shall be
irrevocable.
3.6 CHANGE IN EMPLOYMENT STATUS. If the Board determines
that a Participant's performance is no longer at a level that deserves reward
through participation in the Plan, but does not terminate the Participant's
employment with Employer, the Participant's existing Deferral Commitment shall
terminate at the end of the Deferral Period, and no new Deferral Commitment
may be made by such Participant after notice of such determination is given
by the Board.
PAGE 8 - EXECUTIVE DEFERRED COMPENSATION PLAN
<PAGE> 13
ARTICLE IV
DEFERRED COMPENSATION ACCOUNT
-----------------------------
4.1 ACCOUNT. The amounts deferred by a Participant under the
Plan, any Employer contributions and Earnings shall be credited to the
Participant's Account. Separate subaccounts may be maintained to reflect
different forms of distribution and levels of vesting and forms of payment. The
Account shall be a bookkeeping device utilized for the sole purpose of
determining the benefits payable under the Plan and shall not constitute a
separate fund of assets. On July 1, 1990, each Participant shall have an Account
balance equal to the amount held for the Participant pursuant to the Prior
Plan, if any.
4.2 TIMING OF CREDITS; WITHHOLDING. A Participant's deferred
Compensation shall be credited to the Participant's Account at the time it would
have been payable to the Participant. Any withholding of taxes or other amounts
with respect to deferred Compensation that is required by state, federal or
local law shall reduce the amount credited to the Participant's Account.
4.3 MAKE-UP CONTRIBUTIONS. Employer may credit a Make-
Up Contribution to the Participant's Account in this Plan equal to the
reduction in the Participant's allocation of a Qualified Profit Sharing Plan
contribution because of deferrals under this Plan. The Make-Up Contribution
shall be credited to the Account
PAGE 9 - EXECUTIVE DEFERRED COMPENSATION PLAN
<PAGE> 14
as of the date the contribution would have been credited to the Participant's
account in the Qualified Profit Sharing Plan in the absence of deferral.
4.4 DISCRETIONARY CONTRIBUTIONS. Employer may make
Discretionary Contributions to a Participant's Account. Discretionary
Contributions shall be credited at such times and in such amounts as the Board
in its sole discretion shall determine.
4.5 DETERMINATION OF ACCOUNT. Each Participant's Account as of
each Determination Date shall consist of the balance of the Account as of the
immediately preceding Determination Date, adjusted as follows:
(a) NEW DEFERRALS. The Account shall be increased
by any deferred Compensation credited since such Determination
Date.
(b) EMPLOYER CONTRIBUTIONS. The Account shall be
increased by any Employer contributions credited since such
Determination Date.
(c ) DISTRIBUTIONS. The Account shall be reduced by
any benefits distributed from the Account to the Participant since
such Determination Date.
(d) EARNINGS. The Account shall be increase by the
Earnings on the average daily balance in the Account since such
Determination Date.
PAGE 10 - EXECUTIVE DEFERRED COMPENSATION PLAN
<PAGE> 15
4.6 VESTING OF ACCOUNT. Each Participant shall be vested in
the amounts credited to such Participant's Account and Earnings thereon as
follows:
(a) AMOUNTS ROLLED OVER. A Participant shall be
one hundred percent (100%) vested at all times in any
amounts rolled into this Plan from the Prior Plan and any
Earnings thereon.
(b) AMOUNTS DEFERRED. A Participant shall be one
hundred percent (100%) vested at all times in the amount
of Compensation elected to be deferred under this Plan and
Earnings thereon.
(c) MAKE-UP CONTRIBUTIONS. A Participant's
Make-Up Contribution and Earnings thereon shall become vested
at the same time and in the same amount as they would have
become vested if made to the Qualified Profit Sharing
Plan.
(d) DISCRETIONARY CONTRIBUTIONS. A Participant's
Discretionary Contributions and Earnings thereon shall become
vested as determined by the Board.
4.7 STATEMENT OF ACCOUNT. The Committee shall give to
each Participant a statement showing the balance in the Participant's Account on
an annual basis and at such times as may be determined by the Committee.
PAGE 11 - EXECUTIVE DEFERRED COMPENSATION PLAN
<PAGE> 16
ARTICLE V
PLAN BENEFITS
5.1 DISTRIBUTION PRIOR TO TERMINATION OF EMPLOYMENT. A
Participant's Account may be distributed to the Participant prior
to termination of employment as follows:
(a) EARLY WITHDRAWALS. A Participant may elect in a
Participation Agreement to withdraw all or any portion of the
amount deferred by that Participation Agreement as of a date
specified in the election. Such date shall not be sooner than seven
years after the date the Deferral Period commences. The amount
withdrawn shall not exceed the amount of Compensation deferred,
without Earnings. Such election shall be made at the time the
Deferral Commitment is made and shall be irrevocable.
(b) HARDSHIP WITHDRAWAL. Upon finding that a
Participant has suffered a Financial Hardship, the Committee may,
in its sole discretion, make distributions from the Participant's
Account. The amount of such a withdrawal shall be limited to the
amount reasonably necessary to meet the Participant's needs
resulting from the Financial Hardship. If payment is made due to
Financial Hardship under this Plan or the Qualified Profit Sharing
Plan, the Participant's deferrals under this Plan shall cease for a
12-month period. Any resumption of the Participant's deferrals
under the Plan after such 12-month period shall be made only at
PAGE 12 - EXECUTIVE DEFERRED COMPENSATION PLAN
<PAGE> 17
the election of the Participant in accordance with Article
III herein.
(c) FORM OF PAYMENT AND TIME. Any distribution
pursuant to Section 5.1(a) or 5.1(b) shall be payable in a lump
sum. The distribution shall be paid in the case of a partial
withdrawal, as provided in the Participation Agreement, and in
case of a Financial Hardship, within thirty (30) days after the
determination of a Financial Hardship.
5.2 DISTRIBUTIONS FOLLOWING TERMINATION OF EMPLOYMENT.
Upon a Participant's termination of employment with Employer for any reason, the
Employer shall pay the Participant or in the case of death the Participant's
Beneficiary, benefits equal to the balance in the Participant's Account. Plan
benefits attributed to Deferrals made on or after July 1, 1990, shall be payable
in the manner provided in Section 5.3 and at the time provided in Section 5.6.
Plan benefits with respect to a Prior Plan shall be payable in the same manner
and at the same time as selected by the Participant under the Prior Plan.
5.3 FORM OF BENEFIT PAYMENT FOLLOWING TERMINATION OF
EMPLOYMENT.
(a) Subject to Section 5.3(c ), benefits shall be
paid in the form selected by the Participant at the time of the
Deferral Commitment. Options include:
(i) A lump sum payment.
PAGE 13 - EXECUTIVE DEFERRED COMPENSATION PLAN
<PAGE> 18
(ii) Equal monthly installments of the
Account and Interest amortized over a period of sixty
(60), one hundred twenty (120), or one hundred eighty
(180) months.
(b) The Interest on the unpaid balance of an Account
under (a) shall be equal to the average Earnings over the thirty
six (36) months immediately preceding the commencement of benefit
payments.
(c) SMALL ACCOUNT(S). Notwithstanding Section
5.3(a), if a Participant's Account is under fifty thousand
dollars ($50,000) on the valuation date, the benefit shall
be paid in a lump sum.
5.4 ACCELERATED DISTRIBUTION. Notwithstanding any other
provision of the Plan, at any time after a Change of Control or at any time
following termination of Employment, a Participant shall be entitled to receive,
upon written request to the Committee, a lump sum distribution equal to ninety
percent (90%) of the vested Account balance as of the Determination Date
immediately preceding the date on which the Committee receives the written
request. The remaining balance shall be forfeited by the Participant. The amount
payable under this section shall be paid in a lump sum within sixty five (65)
days following the receipt of the notice by the Committee from the Participant.
5.5 WITHHOLDING FOR TAXES. To the extent required by the law
in effect at the time payments are made, the Employer shall withhold from the
payments made hereunder any Taxes required to
PAGE 14 - EXECUTIVE DEFERRED COMPENSATION PLAN
<PAGE> 19
be withheld by the federal or any state or local government, including any
amounts which the Employer determines is reasonably necessary to pay any
generation-skipping transfer tax which is or may become due. A beneficiary,
however, may elect not to have withholding of federal income tax pursuant to
Section 3405(a)(2) of the Internal Revenue Code, or any successor provision
thereto.
5.6 VALUATION AND SETTLEMENT. The amount of a lump sum payment
and the initial amount of installments shall be based on the value of the
Participant's Account on the valuation date. The last day of the month preceding
the Participant's Termination of Employment shall be the valuation date. The
date on which a lump sum is paid or the date on such installments commence shall
be the settlement date. Subject to Section 5.7, the settlement date shall be no
more than sixty five (65) days after the valuation date. All payments shall be
made as of the first day of the month.
5.7 PAYMENT TO GUARDIAN. The Committee may direct payment to
the duly appointed guardian, conservator, or other similar legal representative
of a Participant or Beneficiary to whom payment is due. In the absence of such a
legal representative, the Committee may, in its sole and absolute discretion,
make payment to a person having the care and custody of a minor, incompetent or
person incapable of handling the disposition of property upon proof satisfactory
to the Committee of
PAGE 15 - EXECUTIVE DEFERRED COMPENSATION PLAN
<PAGE> 20
incompetency, minority, or incapacity. Such distribution shall completely
discharge the Committee from all liability with respect to such benefit.
ARTICLE VI
BENEFICIARY DESIGNATION
-----------------------
6.1 BENEFICIARY DESIGNATION. Subject to Section 6.3, each
Participant shall have the right, at any time, to designate one or more persons
or an entity as Beneficiary (both primary as well as secondary) to whom benefits
under this Plan shall be paid in the event of Participant's death prior to
complete distribution of the Participant's Account. Each Beneficiary designation
shall be in a written form prescribed by the Committee and shall be effective
only when field with the Committee during the Participant's lifetime.
6.2 CHANGING BENEFICIARY. Subject to Section 6.3, any
Beneficiary designation may be changed by a Participant without the consent of
the previously named Beneficiary by the filing of a new designation with the
Committee. The filing of a new designation shall cancel all designations
previously filed.
6.3 COMMUNITY PROPERTY. If the Participant resides in a
community property state, the following rules shall apply:
(a) Designation by a married Participant of a
Beneficiary other than the Participant's spouse shall not be
effective unless the spouse executes a written consent that
acknowledges the effect of the designation, or it is
PAGE 16 - EXECUTIVE DEFERRED COMPENSATION PLAN
<PAGE> 21
established the consent cannot be obtained because the
spouse cannot be located.
(b) A married Participant's Beneficiary designation
may be changed by a Participant with the consent of the
Participant's spouse as provided for in section 6.3(a) by the
filing of a new designation with the Committee.
(c) If the Participant's marital status changes after
the Participant has designated a Beneficiary, the following shall
apply:
(i) If the Participant is married at the
time of death but was unmarried when the
designation was made, the designation shall be void
unless the spouse has consented to it in the manner
prescribed in Section 6.3(a).
(ii) If the Participant is unmarried at
the time of death but was married when the designation
was made:
a) The designation shall be void if
the spouse was named as Beneficiary;
b) The designation shall remain valid
if a nonspouse Beneficiary was named.
(iii) If the Participant was married when
the designation was made and is married to a different
spouse at death, the designation shall be void unless
the new spouse has consented to it in the manner
prescribed above.
PAGE 17 - EXECUTIVE DEFERRED COMPENSATION PLAN
<PAGE> 22
6.4 NO BENEFICIARY DESIGNATION. If any Participant fails to
designation is void, or if the Beneficiary designated by a deceased Participant
dies before the Participant or before complete distribution of the Participant's
benefits, the Participant's Beneficiary shall be the person in the first of the
following classes in which there is a survivor:
(a) The Participant's spouse;
(b) The Participant's children in equal shares,
except that if any of the children predeceases the Participant but
leaves issue surviving, then such issue shall take by right of
representation the share the parent would have taken if living;
(c ) The Participant's estate.
ARTICLE VII
ADMINISTRATION
--------------
7.1 COMMITTEE; DUTIES. This Plan shall be administered by the
Compensation Committee of the Board. The Committee shall have the authority to
make, amend, interpret and enforce all appropriate rules and regulations for the
administration of the Plan and decide or resolve any and all questions,
including interpretations of the Plan, as may arise in such administration. A
majority vote of the Committee members shall control any decision. Members of
the Committee may be Participants under this Plan.
PAGE 18 - EXECUTIVE DEFERRED COMPENSATION PLAN
<PAGE> 23
7.2 AGENTS. The Committee may, from time to time, employ
agents and delegate to them such administrative duties as it sees fit, and may
from time to time consult with counsel who may be counsel to the Company.
7.3 BINDING EFFECT OF DECISIONS. The decision or action of
the Committee with respect to any question arising out of or in connection with
the administration, interpretation and application of the Plan and the rules
and regulations promulgated hereunder shall be final, conclusive and binding
upon all persons having any interest in the Plan.
7.4 INDEMNITY OF COMMITTEE. The Company shall indemnify an
hold harmless the members of the Committee against any and all claims, loss,
damage, expense or liability arising from any action or failure to act with
respect to this Plan on account of such person's service on the Committee,
except in the case of gross negligence or willful misconduct.
ARTICLE VIII
CLAIMS PROCEDURE
----------------
8.1 CLAIM. The Committee shall establish rules and procedures
to be followed by Participants and Beneficiaries in (a) filing claims for
benefits, and (b) for furnishing and verifying proofs necessary to establish
the right to benefits in accordance with the Plan, consistent with the remainder
of this Article. Such rules and procedures shall require that claims and proofs
be made in writing and directed to the Committee.
PAGE 19 - EXECUTIVE DEFERRED COMPENSATION PLAN
<PAGE> 24
8.2 REVIEW OF CLAIM. The Committee shall review all claims
for benefits. Upon receipt by the Committee of such a claim, it shall determine
all facts which are necessary to establish the right of the claimant to
benefits under the provisions of the Plan and the amount thereof as herein
provided within ninety (90) days of receipt of such claim. If prior to the
expiration of the initial ninety (90) day period, the Committee determines
additional time is needed to come to a determination on the claim, the
Committee shall provide written notice to the Participant, Beneficiary or other
claimant of the need for the extension, not to exceed a total of one hundred
eighty (180) days from the date the application was received.
8.3 NOTICE OF DENIAL OF CLAIM. In the event that any
Participant, Beneficiary or other claimant claims to be entitled to a benefit
under the Plan, and the Committee determines that such claim should be denied in
whole or in part, the Committee shall, in writing, notify such claimant that the
claim has been denied, in whole or in part, setting forth the specific reasons
for such denial. Such notification shall be written in a manner reasonable
expected to be understood by such claimant and shall refer to the specific
sections of the Plan relied on, shall describe any additional material or
information necessary for the claimant to perfect the claim and an explanation
of why such material or information is necessary, and where appropriate, shall
include an explanation of how the claimant can obtain reconsideration of such
denial.
PAGE 20 - EXECUTIVE DEFERRED COMPENSATION PLAN
<PAGE> 25
8.4 RECONSIDERATION OF DENIED CLAIM.
(a) Within sixty (60) days after receipt of the notice
of the denial of a claim, such claimant or duly authorized
representative may request, by mailing or delivery of such written
notice to the Committee, a reconsideration by the Committee of the
decision denying the claim. If the claimant or duly authorized
representative fails to request such a reconsideration within such
sixty (60) day period, it shall be conclusively determined for all
purposes of this Plan that the denial of such claim by the
Committee is correct. If such claimant or duly authorized
representative requests a reconsideration within such sixty (60)
day period, the claimant of duly authorized representative shall
have thirty (30) days after filing a request for reconsideration to
submit additional written material in support of the claim, review
pertinent documents, and submit issues and comments in writing.
(b) After such reconsideration request, the Committee
shall determine within sixty (60) days of receipt of the claimant's
request for reconsideration whether such denial of the claim was
correct and shall notify such claimant in writing of its
determination. The written notice of decision shall be in writing
and shall include specific reasons for the decision, written in a
manner calculated to be understood by the claimant, as well as
specific references to the pertinent Plan provisions on
PAGE 21 - EXECUTIVE DEFERRED COMPENSATION PLAN
<PAGE> 26
which the decision is based. In the event of special circumstances
determined by the Committee, the time for the Committee to make a
decision may be extended by an additional sixty (60) days upon
written notice to the claimant prior to the commencement of the
extension. If such determination is favorable to the claimant, it
shall be binding and conclusive. If such determination is adverse
to such claimant, it shall be binding and conclusive unless the
claimant or his duly authorized representative notifies the
Committee within ninety (90) days after the mailing or delivery to
the claimant by the Committee of its determination that claimant
intends to institute legal proceedings challenging the
determination of the Committee and actually institutes such legal
proceedings within one hundred eighty (180) days after such mailing
or delivery.
8.5 EMPLOYER TO SUPPLY INFORMATION. To enable the
Committee to perform its functions, the Employer shall supply full and timely
information to the Committee of all matters relating to the retirement, death or
other cause for termination of employment of all Participants, and such other
pertinent facts as the Committee may require.
PAGE 22 - EXECUTIVE DEFERRED COMPENSATION PLAN
<PAGE> 27
ARTICLE IX
AMENDMENT OF TERMINATION OF PLAN
--------------------------------
9.1 AMENDMENT. The Board may at any time amend the Plan by
written instrument, notice of which is given to all Participants and to
Beneficiaries receiving installment payments, subject to the following:
(a) PRESERVATION OF ACCOUNT BALANCE. No amendment
shall reduce the amount accrued in any Account to the date such
notice of the amendment is given.
(b) CHANGES IN EARNINGS RATE. No amendment shall
reduce the rate of earnings to be credited after the date of the
amendment to the amount already accrued in any Account and any
Deferred Compensation credited to the Account under Deferral
Commitments already in effect on that date.
9.2 EMPLOYER'S RIGHT TO TERMINATE. The Board may at any
time partially of completely terminate the Plan if, in its judgment, the tax,
accounting or other effects of the continuance of the Plan, or potential
payments thereunder would not be in the best interests of Employer.
(a) PARTIAL TERMINATION. The Board may partially
terminate the Plan by instructing the Committee not to accept
any additional Deferral Commitments. If such a partial
termination occurs, the Plan shall continue to operate and be
effective with regard to Deferral Commitments entered into prior
to the effective date of such partial termination.
PAGE 23 - EXECUTIVE DEFERRED COMPENSATION PLAN
<PAGE> 28
(b) COMPLETE TERMINATION. The Board may completely
terminate the Plan by instructing the Committee no to accept any
additional Deferral Commitments, and by terminating all ongoing
Deferral Commitments. If such a complete termination occurs, the
Plan shall cease to operate and in equal monthly installments over
the following period, based on the Account balance:
<TABLE>
<CAPTION>
Account Balance Payout Period
--------------- -------------
<S> <C>
Less than $50,000 Lump Sum
$50,000 but less than $100,000 3 Years
More than $100,000 5 Years
</TABLE>
Payments shall commence within sixty five (65) days after
the Board Terminates the Plan and earnings shall continue to be
credited on the unpaid Account balance at the rate specified in
Section 5.3(b).
ARTICLE X
MISCELLANEOUS
-------------
10.1 UNFUNDED PLAN. This plan is an unfunded plan maintained
primarily to provide deferred compensation benefits for a select group of
"management or highly-compensated employees" within the meaning of Sections 201,
301 and 401 of the Employee Retirement Income Security Act of 1974, as amended
("ERISA"), and therefore is exempt from the provisions of Parts 2, 3 and 4 of
Title I of ERISA.
PAGE 24 - EXECUTIVE DEFERRED COMPENSATION PLAN
<PAGE> 29
10.2 COMPANY AND EMPLOYER OBLIGATIONS. The obligation to make
benefit payments to any Participant under the Plan shall be a joint and several
liability of the Company and the Employer that employed the Participant.
10.3 UNSECURED GENERAL CREDITOR. Participants and
Beneficiaries shall be unsecured general creditors, with no secured or
preferential right to any assets of Employer or any other property for payment
of benefits under this Plan. Any life insurance policies, annuity contracts or
other property purchased by Employer in connection with this Plan shall remain
its general, unpledged and unrestricted assets. Employer's obligation under the
Plan shall be an unfunded and unsecured promise to pay money in the future.
10.4 TRUST FUND. At its discretion, the Company may establish
one or more trusts, with such trustees as the Board may approve, for the purpose
of providing for the payment of benefits owed under the Plan. Although such a
trust shall be irrevocable, its assets shall be held for payment of all the
Company's general creditors in the event of insolvency or bankruptcy. To the
extent any benefits provided under the Plan are paid from any such trust,
Employer shall have no further obligation to pay them. If not paid from the
trust, such benefits shall remain the obligation of Employer.
10.5 NONASSIGNABILITY. Neither a Participant nor any other
person shall have any right to commute, sell, assign, transfer, pledge, a
nticipate, mortgage or otherwise encumber,
PAGE 25 - EXECUTIVE DEFERRED COMPENSATION PLAN
<PAGE> 30
transfer, hypothecate or convey in advance of actual receipt the amounts, if
any, payable hereunder, or any part thereof, which are, and all rights to which
are, expressly declared to be unassignable and non-transferrable. No part of the
amounts payable shall, prior to actual payment, be subject to seizure or
sequestration for the payment of any debts, judgments, alimony or separate
maintenance owed by a Participant or any other person, nor be transferable by
operation of law in the event of a Participant's or any other person's
bankruptcy or insolvency.
10.6 NOT A CONTRACT OF EMPLOYMENT. This Plan shall not
constitute a contract of employment between Employer and the Participant.
Nothing in this Plan shall give a Participant the right to be retained in the
service of Employer or to interfere with the right of Employer to discipline or
discharge a Participant at any time.
10.7 PROTECTIVE PROVISIONS. A Participant will cooperate with
Employer by furnishing any and all information requested by Employer in order to
facilitate the payment of benefits hereunder, and by taking such physical
examinations as Employer may deem necessary and taking such other action as may
be requested by Employer.
10.8 GOVERNING LAW. The provisions of this Plan shall be
construed and interpreted according to the laws of the State of New York,
except as preempted by federal law.
10.9 VALIDITY. In case any provision of this Plan shall
be held illegal or invalid for any reason, said illegality or
PAGE 26 - EXECUTIVE DEFERRED COMPENSATION PLAN
<PAGE> 31
invalidity shall not affect the remaining parts hereof, but this Plan shall be
construed and enforced as if such illegal and invalid provision had never been
inserted herein.
10.10 NOTICE. Any notice required or permitted under the Plan
shall be sufficient if in writing and hand delivered or sent by registered or
certified mail. Such notice shall be deemed as given as of the date of delivery
or, if delivery is made by mail, as of the date shown on the postmark on the
receipt for registration or certification. Mailed notice to the Committee shall
be directed to the Company's address. Mailed notice to a Participant or
Beneficiary shall be directed to the individual's last known address in
Employer's records.
10.11 SUCCESSORS. The provisions of this Plan shall bind and
inure to the benefit of Employer and its successors and assigns. The term
successors as used herein shall include any corporate or other business entity
which shall, whether by merger, consolidation, purchase or otherwise acquire all
or substantially all of the business and assets of Employer, and successors of
any such corporation or other business entity.
KEYCORP/ Victor J. Riley, Jr.
By: ______________________________
Its Chairman, President & Chief
Executive Officer
Dated: ______________________________
PAGE 27 - EXECUTIVE DEFERRED COMPENSATION PLAN
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.24
<SEQUENCE>12
<DESCRIPTION>EXHIBIT 10.24
<TEXT>
<PAGE> 1
Exhibit 10.24
KEYCORP
SURVIVOR BENEFIT PLAN
Effective July 1, 1990
<PAGE> 2
TABLE OF CONTENTS
ARTICLE I PURPOSE..........................................................1
1.1 Purpose.............................................................1
1.2 Effective Date......................................................1
ARTICLE II DEFINITIONS.....................................................1
2.1 Board...............................................................1
2.2 Cash Value..........................................................1
2.3 Committee...........................................................1
2.4 Compensation........................................................2
2.5 Date of Participation...............................................2
2.6 Disability..........................................................2
2.7 Employer............................................................2
2.8 Employer's Cost.....................................................2
2.9 Employer's Share of Premium.........................................2
2.10. Insurer...........................................................2
2.11 Participant........................................................3
2.12 Participant's Share of Premium.....................................3
2.13 PLAN...............................................................3
2.14 Plan Benefit......................................................3
2.15 Policy.............................................................3
2.16 Retirement.........................................................3
2.17 Terminated for Cause...............................................4
2.18 Years of Credited Service..........................................5
ARTICLE III PARTICIPATION.................................................5
3.1 Eligibility.........................................................5
3.2 Participation.......................................................5
ARTICLE IV POLICY OWNERSHIP................................................5
4.1 Policy Ownership....................................................5
4.2 Employer's Security Interest........................................6
ARTICLE V PREMIUM PAYMENT..................................................6
5.1 Premium Payment.....................................................6
5.2 Payment of Participant's Share......................................6
ARTICLE VI EMPLOYER'S INTEREST IN THE POLICY...............................6
6.1 Collateral Assignment...............................................7
6.2 Limitations.........................................................7
ARTICLE VII PARTICIPANT'S INTEREST IN THE POLICY...........................8
7.1 Cash Surrender Value................................................8
7.2 Plan Benefit........................................................8
7.3 Insurance Proceeds..................................................8
ARTICLE VIII TERMINATION, RETIREMENT, DISABILITY..........................8
8.1 Termination of Employment Prior to Retirement.......................9
8.2 Termination of Employment Due to Retirement.........................9
8.3 Disability.........................................................10
ARTICLE IX AMENDMENT AND TERMINATION OF PLAN.............................11
9.1 Amendment..........................................................11
9.2. Termination.......................................................11
ARTICLE X INSURER NOT A PARTY TO PLAN.....................................12
ARTICLE XI NAMED FIDUCIARY................................................12
11.1 Named Fiduciary...................................................12
11.2 Indemnification...................................................12
-ii-
<PAGE> 3
ARTICLE XII CLAIMS PROCEDURE.............................................13
12.1 Claim.............................................................13
12.2 Review of Claim...................................................13
12.3 Notice of Denial of Claim.........................................13
12.4 Reconsideration of Denied Claim...................................14
12.5 Employer to Supply Information....................................15
ARTICLE XIII MISCELLANEOUS...............................................15
13.1 Not a Contract of Employment......................................15
13.2 Protective Provisions.............................................15
13.3. Transfer of Participant's Interest in the Policy.................16
13.4 Terms.............................................................16
13.5 Governing Law.....................................................16
13.6 Validity..........................................................16
13.7 Notice............................................................16
13.8 Successors........................................................16
-iii-
<PAGE> 4
KEYCORP
SURVIVOR BENEFIT PLAN
ARTICLE I
PURPOSE
1.1 PURPOSE. This Plan has been established to provide
certain key employees of KeyCorp and its subsidiaries with life insurance
protection. The Plan will provide life insurance benefits to the beneficiaries
of the participating employees under a split dollar life insurance arrangement.
1.2 EFFECTIVE DATE. The Plan will be effective as of
July 1, 1990.
ARTICLE II
DEFINITIONS
-----------
Whenever used in this document, the following terms shall have the
meanings set forth in this Article unless a contrary or different meaning is
expressly provided;
2.1 BOARD. "Board" shall mean the Board of Directors of KeyCorp.
2.2 CASH VALUE. "Cash Value" shall mean the Policy's cash value as that
term is defined in the Policy.
2.3 COMMITTEE. "Committee" shall mean the Committee appointed to
administer the Plan pursuant to Article XI.
2.4 COMPENSATION. "Compensation" shall mean the base salary payable to
the Participant and considered to be "wages" for purposes of federal income tax
withholding before reduction for amounts deferred under the KeyCorp Executive
Deferred
-1-
<PAGE> 5
Compensation Plan or any other elective salary reduction program. Compensation
does not include incentive compensation, bonuses, expenses reimbursement, any
form of non-cash compensation, or benefits.
2.5 DATE OF PARTICIPATION. "Date of Participation" shall be the later
of the date on which the Policy is issued or July 1, 1990.
2.6 DISABILITY. "Disability" shall mean a physical or mental condition
that prevents the Participant from satisfactorily performing the Participant's
usual duties for Employer. The Committee shall determine the existence of
Disability and may rely on advice from a medical examiner satisfactory to the
Committee in making the determination.
2.7 EMPLOYER. "Employer" shall mean KeyCorp, a New York corporation, or
a subsidiary of KeyCorp participating in this Plan.
2.8 EMPLOYER'S COST. "Employer's Cost" shall mean the Employer's Share
of Premium plus interest at the annual effective rate of eight and one-half
percent (8.5%) from the date each premium was paid.
2.9 EMPLOYER'S SHARE OF PREMIUM. "Employer's Share of Premium" shall
mean the aggregate amount of insurance premium paid by the Employer less the
Participant's Share of Premium.
2.10 INSURER. "Insurer" shall mean any insurance company issuing a life
insurance policy under this Plan.
2.11 PARTICIPANT. "Participant" shall mean an employee of the Employer
who has been designated as a Participant by the Board.
-2-
<PAGE> 6
2.12 PARTICIPANT'S SHARE OF PREMIUM. "Participant's Share of Premium"
shall mean the aggregate portion of premiums required to be contribution by the
Participant. This shall be an amount equal to the annual term cost of the
current life insurance proceeds payable as a Plan Benefit under Section 2.14
measured by the lower of the PS 58 rate or the Insurer's current published
premium rate for annually renewable term insurance for standard risks.
2.13 PLAN. "Plan" shall mean the KeyCorp Survivor Benefit Plan.
2.14 PLAN BENEFIT. "Plan Benefit" shall mean insurance proceeds equal
to the lesser of three (3) times the Participant's annual Compensation rate or
one million dollar ($1 million). The Plan Benefit shall be adjusted annually on
the anniversary of Plan participation based on Participant's annual Compensation
rate on January 1 of the current calendar year.
2.15 POLICY. "Policy" shall mean, with respect to each Participant, all
life insurance policies which are issued by an Insurer under this Plan on the
life of such Participant.
2.16 RETIREMENT . "Retirement" shall mean termination of employment
with the Employer, on or after age sixty-two (62) with fifteen (15) Years of
Credited Service, after age sixty-five (65), or pursuant to an employment
agreement between KeyCorp and the Participant.
2.17 TERMINATED FOR CAUSE. "Terminated for Cause" shall mean
termination of a Participant's employment by KeyCorp upon:
(a) The willful and continued failure by the Participant to
perform substantially the Participant's duties with KeyCorp (other than
any such failure
-3-
<PAGE> 7
resulting from the Participant's incapacity due to physical or mental
illness) after a demand for substantial performance is delivered to the
Participant by the President of KeyCorp with specifically identifies
the manner in which such executive believes that the Participant has
not substantially performed the Participant's duties, or has failed to
comply in material respects with the terms and obligations of
employment by KeyCorp as such terms and obligations are applied to
similarly situated employees, or
(b) The willful engaging by the Participant in illegal conduct
which is materially and demonstrably injurious to KeyCorp.
For purposes of this paragraph, no act, or failure to act, on the
Participant's part shall be considered "willful" unless done, or omitted to be
done, by the Participant in bad faith and without reasonable belief that the
Participant's action or omission was in, or not opposed to, the best interests
of KeyCorp. Any act, or failure to act, based upon authority given pursuant to a
resolution duly adopted by the Board or based upon the advice of counsel for
KeyCorp shall be conclusively presumed to be done, or omitted to be done, by the
Participant in good faith and in the best interests of the Company. It is also
expressly understood that the Participant's attention to matters not directly
related to the business of KeyCorp shall not provide a basic for termination for
Cause so long as the Board has approved the Participant's engagement in such
activities. Notwithstanding the foregoing, the Participant shall not be deemed
to have been Terminated for Cause unless and until there shall have been
delivered to the Participant a copy of a resolution duly adopted by the
affirmative vote of not less than three quarters (3/4) of the entire membership
of the Board at a meeting of the Board called and held for the purpose (after
reasonable notice to the Participant and an opportunity for the Participant,
together with the Participant's counsel, to be heard before the Board), finding
that in good faith opinion
-4-
<PAGE> 8
of the Board the Participant was guilty of the conduct set forth above in (a) or
(b) of this paragraph and specifying the particulars thereof in detail.
2.18 YEARS OF CREDITED SERVICE. "Years of Credited Service" means the
number of years of credited vesting service determined under the provisions of
the KeyCorp Pension Plan.
ARTICLE III
PARTICIPATION
-------------
3.1 ELIGIBILITY. Eligibility shall be limited to those employees of the
Employer who are designated by the Board to participate in the Plan.
3.2 PARTICIPATION. A Participant, upon being designated as such, shall
complete such documents as are prescribed by the Committee in order to
participate in the Plan.
ARTICLE IV
POLICY OWNERSHIP
----------------
4.1 POLICY OWNERSHIP. The Participant, or his transferee, shall be the
owner of the Policy and may exercise all ownership rights granted to the owner
by the terms of the Policy, subject to the rights of the Employer as herein
provided. The Participant's rights shall include, but are not limited to, the
right to assign has interest in the Policy, the right to change the beneficiary
of that portion of the proceeds to which he is entitled under Article VII, and
the right to exercise settlement options with respect to that portion. The
Participant shall not borrow against, surrender or cancel the Policy, nor
terminate the Policy dividend election without the express written consent of
the Employer.
-5-
<PAGE> 9
4.2 EMPLOYER'S SECURITY INTEREST. The Employer shall have a security
interest in the Cash Value of the Policy equal to the Employer's Share of
Premium and a portion of the death benefit, as defined in the collateral
assignment attached as Exhibit A, and as hereinafter provided under Article VI.
ARTICLE V
PREMIUM PAYMENT
---------------
5.1 PREMIUM PAYMENT. Each premium on the Policy shall be paid by the
Employer as it becomes due.
5.2 PAYMENT OF PARTICIPANT'S SHARE. Within thirty (30) days after
payment of the first Policy premium and thereafter, prior to the Policy
anniversary, the Employer shall notify the Participant of the Participant's
Share of Premium. The Employer shall deduct such amount from the Participant's
compensation ratably over the following twelve (12) months. Prior to Retirement,
the Participant shall be required to contribute the annual cost of insurance
protection, as determined above, in each year until the Participant retires.
After the Participant retires, the Employer shall be responsible for any
premiums due before the release of the collateral assignment under paragraph
8.2.
ARTICLE VI
EMPLOYER'S INTEREST IN THE POLICY
---------------------------------
6.1 COLLATERAL ASSIGNMENT. Each Participant shall assign the Policy to
the Employer as collateral, under the form of collateral assignment attached as
Exhibit A. Such assignment shall give the Employer the limited power to enforce
its right to recover the Employer's Share of Premium on the Policy from the Cash
Value or from the death benefit thereof. The collateral assignment of the Policy
to the Employer shall not be terminated, altered or amended by the Participant
without the express written consent of
-6-
<PAGE> 10
the Employer. The Employer and Participants will take all action necessary to
cause the collateral assignment to conform to the provisions of this Plan.
6.2 LIMITATIONS. The interest of the Employer in and to the Policy
shall be specifically limited to the following right in and to the Cash Value
and a portion of the death benefit:
(a) The right to recover the entire Cash Value in the event
the Policy is surrendered or canceled prior to the Participant's
Retirement;
(b) The right to recover, upon the death of the Participant
prior to Retirement, all of the Policy proceeds in excess of that
portion of the Policy proceeds payable to the Participant's beneficiary
or beneficiaries as provided in paragraph 7.3;
(c) Exempt as provided in paragraph 8.1, the right to receive
full ownership of the Policy, in the event of termination of employment
by the Participant prior to Retirement for reasons other than death or
disability;
(d) Except as provided in paragraph 9.2, the right to receive
full ownership of the Policy, in the event of termination of the Plan.
ARTICLE VII
PARTICIPANT'S INTEREST IN THE POLICY
------------------------------------
7.1 CASH SURRENDER VALUE. Notwithstanding any other provision in the
Plan to the contrary, the Participant shall at all times own that portion of the
Cash Value equal to the Participant's Share of Premium to the extent said Cash
Value exceeds the Employer's Share of Premium. Such ownership interest shall be
assigned to the Employer pursuant
-7-
<PAGE> 11
to the terms of the collateral assignment required under paragraph 6.1. Except
as provided in paragraph 8.1 and 9.2, in the event of the Participant's
termination of employment prior to Retirement or the Employer's termination of
the Plan, the Participant will be required to assign his interest in the Cash
Value to the Employer.
7.2 PLAN BENEFIT. Upon the death of the Participant, the beneficiary or
beneficiaries designated by the Participant shall be entitled to receive the
Plan Benefit.
7.3 INSURANCE PROCEEDS. The Employer shall promptly take all action
necessary to obtain the data benefit provided under the Policy (including any
benefit under this Plan owed to the beneficiary or beneficiaries designated by
the Participant). Such death benefit shall be paid to the beneficiary or
beneficiaries designated by the Participant after the full amount due the
Employer under paragraph 6.2(b) has been paid.
ARTICLE VIII
TERMINATION, RETIREMENT, DISABILITY
-----------------------------------
8.1 TERMINATION OF EMPLOYMENT PRIOR TO RETIREMENT. In the event of
termination of employment prior to Retirement for reasons other than death or
disability, the Participant shall have a ninety (90) day option to purchase the
Employer's interest in the Policy at price equal to the Employer's Cost.
Notwithstanding the above, if the Participant is Terminated for Cause, or fails
to exercise the purchase option, the Employer shall become the sole owner of the
Policy and the Participant shall execute any and all instruments the may be
required to vest ownership of said Policy in the Employer. Thereafter, neither
the Participant nor his beneficiaries shall have any further interest in the
Policy or this Plan.
8.2 TERMINATION OF EMPLOYMENT DUE TO RETIREMENT. In the event of
termination of employment with the Employer due to Retirement, the Employer
shall do the following:
-8-
<PAGE> 12
(a) If the Participant's termination date occurs prior to the
seventh (7th) anniversary of the Participant's Date of Participation,
the Employer shall continue to pay any premiums throughout the seventh
(7th anniversary of the Participant's Date of Participation. After the
seventh (7th) anniversary, the Employer shall immediately release its
interest in the Policy and in the collateral assignment. Upon release
of the collateral assignment, the Employer shall have no further
obligation to pay future Policy premiums and shall have no further
interest in the Policy.
(b) If the Participant's termination date occurs after the
seventh (7th) anniversary of the Participant's Date of Participation,
then the Employer shall immediately release its interest in the Policy
and in the collateral assignment. Upon release of the collateral
assignment, the Employer shall have no further interest in the Policy
and shall have no further obligation to pay future Policy premiums.
8.3 DISABILITY. In the event the Participant becomes disable prior to
Retirement, the Employer will continue the Plan with regard to the Participant.
During the period of the Disability, the Participant shall be required to
contribute the Participant's Share of Premium. Upon the Participant's attainment
of age sixty-five (65), the Participant shall be deemed to have retired.
-9-
<PAGE> 13
ARTICLE IX
AMENDMENT AND TERMINATION OF PLAN
---------------------------------
9.1 AMENDMENT. The Employer may amend the Plan from time to time as may
be necessary for administrative purposes and legal compliance. The power to
amend the Plan pursuant to this section shall include, but not be limited to,
the power to increase or decrease the Plan Benefit as defined under the Plan. If
such amendment adversely impacts the interest of the Participant, the Employer
shall grant the Participant a ninety (90) day option to purchase the Employer's
interest in the Policy at a price equal to the Employer's Cost. However, no such
amendment shall reduce the amount of benefit payable with respect to a
Participant who has retired.
9.2 TERMINATION. The Employer may, at any time, in its sole discretion,
terminate the Plan in whole or in part. Upon termination in whole or in part,
the Employer shall grant to the Participant a ninety (90) day option to purchase
the Employer's interest in the policy at a price equal to the Employer's Cost.
If the Participant fails to exercise this purchase option, the Employer, in its
discretion, may elect to become the sole owner of the Policy. If the Employer
elects to become the sole owner of the Policy, the Participant shall execute any
and all instruments that may be required to vest ownership of said Policy in the
Employer. Thereafter, neither the Participant nor this beneficiaries shall have
any further interest in the Policy. However, such termination shall not apply to
a Participant who has retired before the effective date of the termination.
Premiums on policies on such Participants shall continue to be paid and said
policy shall be transferred to such Participant as provided in paragraph 8.2.
-10-
<PAGE> 14
ARTICLE X
INSURER NOT A PARTY TO PLAN
---------------------------
The Insurer shall be bound only by the provisions of the Policy, any
endorsements on the Policy and the collateral assignment. Any payments made or
action taken by an Insurer in accordance therewith shall fully discharge it from
all claims, suits and demands of all person whosoever. Except as specifically
provided by endorsement on the Policy, it shall in no way be bound by the
provisions of this Plan.
ARTICLE XI
NAMED FIDUCIARY
---------------
11.1 NAMED FIDUCIARY. The Committee is hereby designated as the "Named
Fiduciary." The Committee shall be the Compensation Committee of the Board. As
the Named Fiduciary, the Committee shall have the authority to make, amend,
interpret and enforce all appropriate rules and regulations for the
Administration of the Plan and decide interpretations of the Plan, as may arise
in such administration. The Committee may allocate to others certain aspects of
the management and operation responsibilities of the Plan, including the
employment of advisors and the delegation of any ministerial duties to qualified
individuals.
11.2 INDEMNIFICATION. The Employer shall indemnify and hold harmless
the Committee and individual members against any and all claims, loss, damage,
expenses or liability arising from any action or failure to act with respect to
this Plan, except in the case of gross negligence or willful misconduct.
-11-
<PAGE> 15
ARTICLE XII
CLAIMS PROCEDURE
----------------
12.1 CLAIM. The Committee shall establish rules and procedures to be
followed by Participants and beneficiaries in (a) filing claims for benefits,
and (b) for furnishing and verifying proofs necessary to establish the right to
benefits in accordance with the Plan, consistent with the remainder of this
article. Such rules and procedures shall require that claims and proofs be made
in writing and directed to the Committee.
12.2 REVIEW OF CLAIM. The Committee shall review all claims for
benefits. Upon receipt by the Committee of such a claim, it shall determine all
fact which are necessary to establish the right of the claimant to benefits
under the provisions of the Plan and the amount thereof as herein provided
within ninety (90) days of receipt of such claim. If prior to the expiration of
the initial ninety (90) days period, the Committee determines additional time is
needed to come to a determination on the claim, the Committee shall provide
written notice to the Participant, beneficiary or other claimant of the need for
the extension, not to exceed a total of one hundred eighty (180) days from the
date the application was received.
12.3 NOTICE OF DENIAL OF CLAIM. In the event that any Participant,
beneficiary or other claimant claims to be entitled to a benefit under the Plan,
and the Committee determines that such claim should be denied in whole or in
part, the Committee shall, in writing, notify such claimant that his or her
claim has been denied, in whole or in part, setting forth the specific reasons
for such denial. Such notification shall be written in a manner reasonably
expected to be understood by such claimant and shall refer to the specific
sections of the Plan relied on, shall describe any additional material or
information necessary for the claimant to perfect the claim and an explanation
of why such material or information is necessary, and where appropriate, shall
include an explanation of how the claimant can obtain reconsideration of such
denial.
-12-
<PAGE> 16
12.4 RECONSIDERATION OF DENIED CLAIM
(a) Within sixty (60) days after receipt of the notice of the
denial of a claim, such claimant or has duly authorized representative
may request, by mailing or delivery of such written notice to the
Committee, a reconsideration by the Committee of the decision denying
the claim. If the claimant or his duly authorized representative fails
to request such a reconsideration within such sixty (60) day period, it
shall be conclusively determined for all purposes of this Plan that the
denial of such claim by the Committee is correct. If such claimant or
his duly authorized representative request a reconsideration within
such sixty (60) day period, the claimant or his duly authorized
representative shall have thirty (30) days after filing a request for
reconsideration to submit additional written material in support of the
claim, review pertinent documents, and submit issues and comments in
writing.
(b) After such reconsideration request, the Committee shall
determine within sixty (60) days of receipt of the claimant's request
for reconsideration whether such denial of the claim was correct and
shall notify such claimant in writing of its determination. The written
notice of decision shall be in writing and shall include specific
reasons for the decision, written in a manner calculated to be
understood by the claimant, as well as specific references to the
pertinent Plan provisions on which the decision is based. In the event
of special circumstances determined by the Committee, the time for the
Committee to make a decision may be extended by an additional sixty
(60) days upon written notice to the claimant prior to the commencement
of the extension. If such determination is favorable to the claimant,
it shall be binding and conclusive. If such determination is adverse to
such claimant, it shall be binding and conclusive unless the claimant
or his duly authorized representative notifies the Committee within
ninety (90) days after the mailing or delivery to the claimant by the
Committee of its determination that claimant intends to institute legal
proceedings challenging the determination
-13-
<PAGE> 17
of the Committee and actually institutes such legal proceedings within
one hundred eighty (180) days after such mailing or delivery.
12.5 EMPLOYER TO SUPPLY INFORMATION. To enable the Committee to perform
its functions, the Employer shall supply full and timely information to the
Committee of all matters relating to the retirement, death or other cause for
termination of employment of all Participants, and such other pertinent facts as
the Committee may require.
ARTICLE XIII
MISCELLANEOUS
-------------
13.1 NOT A CONTRACT OF EMPLOYMENT. The terms and conditions of the Plan
shall not be deemed to constitute a contract of employment between the Employer
and a Participant, and neither a Participant nor a Participant's beneficiary
shall have any rights against the Employer except as may otherwise be
specifically provided herein. Moreover, nothing in this Plan shall be deemed to
give a Participant the right to be retained in the service of the Employer or to
interfere with the right of the Employer to discipline or discharge him at any
time.
13.2 PROTECTIVE PROVISIONS. A Participant will cooperate with the
Employer by furnishing any and all information requested by the Employer, in
order to facilitate the payment of benefits hereunder, and by taking such
physical examinations as the Employer may deem necessary and taking such other
reasonable action as may be requested by the Employer.
13.3 TRANSFER OF PARTICIPANT'S INTEREST IN THE POLICY. In the event a
Participant shall transfer all of his interest in the Policy, then all of a
Participant's interest in the Policy shall be vested in his transferee, who
shall be substituted as a party hereunder, and a Participant shall have no
further interest in the Policy.
-14-
<PAGE> 18
13.4 TERMS. In this Plan document, unless the context clearly indicates
the contrary, the reference to the masculine gender will be deemed to include
the feminine gender, and the singular shall include the plural.
13.5 GOVERNING LAW. The provisions of the Plan shall be construed and
interpreted according to the laws of the State of New York, except as preempted
by federal law.
13.6 VALIDITY. In case any provision of this Plan shall be held illegal
or invalid for any reason, such illegality or invalidity shall not affect the
remaining parts hereof, but this Plan shall be construed and enforced as if such
illegal and invalid provision had never been inserted herein.
13.7 NOTICE. Any notice or filing required or permitted to be given to
the Employer under the Plan shall be sufficient if in writing and hand
delivered, or sent by registered or certified mail to the Committee. Such
notice, if mailed, shall be addressed to the principal offices of the Employer.
Notice mailed to the Participant shall be at such address as is given in the
records of the Employer. Notices shall be deemed given as of the date of
delivery or, if delivery is made by mail, as of the date shown on the postmark
on the receipt for registration or certification.
13.8 SUCCESSORS. The provisions of the Plan shall bind and inure to the
benefit of the Employer and its successor and assigns. The term successors as
used herein shall include any corporate or other business entity which shall,
whether by merger, consolidation, purchases of otherwise, acquire all or
substantially all of the business and assets of the Employer, and successors of
any such corporation or other business entity.
-15-
<PAGE> 19
IN WITNESS WHEREOF, the Employer has caused this instrument to be
executed by its officers thereunto duly authorized, as of the 3rd day of August,
1990.
KEYCORP
By: /s/
------------------------------------------------
Victor J. Riley, Jr.
Title: Chairman, President & Chief Executive Officer
----------------------------------------------
-16-
<PAGE> 20
[KEYCORP LOGO] SURVIVOR BENEFIT PLAN
COLLATERAL ASSIGNMENT
================================================================================
THIS ASSIGNMENT, made and entered into this ___________________________ day of
19__ , by the undersigned as owner (the "Owner") of that certain Life Insurance
Policy No. ________________ issued by Pacific Mutual Life Insurance Company,
Newport Beach, California ("Insurer") and any supplementary contracts issued in
connection therewith (said policy and contract being herein called the
"Policy"), upon the life of ______________________ ("Insured"), to the trustee
of the KeyCorp Umbrella Trust for Executives dated July 1, 1990 ("Assignee")
established by KeyCorp, a New York corporation or any participating subsidiary
of KeyCorp (the "Company").
WITNESSETH:
WHEREAS, the Insured is an employee of the Company; and
WHEREAS, said Assignee desires to assist the Insured by paying a portion of the
annual premium due on the Policy, as more specifically provided for in that
certain Survivor Benefit Plan dated July 1, 1990, adopted by the Company (the
"Plan"); and
WHEREAS, in consideration of the Assignee agreeing to pay such premiums, the
Owner agrees to grant the Assignee a security interest in said Policy as a
collateral security for the repayment of that portion of the premiums paid by
the Assignee.
NOW, THEREFORE, for value received, the undersigned hereby assigns, transfers
and sets over to the Assignee, its successors and assigns, the following
specific rights in the Policy and subject to the following terms and conditions:
1) This Assignment is made, and the Policy is to be held, as
collateral security for all liabilities of the Owner to the
Assignee, either now existing or that may hereafter arise
pursuant to the terms of the Plan.
2) The Assignee's interest in the Policy shall further be limited
to:
(a) The right to recover the entire Cash Value of the
Policy in the event the Policy is surrendered or
canceled, prior to the Insured's Retirement, as
provided in the Plan;
-17-
<PAGE> 21
[KEYCORP LOGO] SURVIVOR BENEFIT PLAN
COLLATERAL ASSIGNMENT
================================================================================
(b) The right to recover, upon the death of the Insured
prior to Retirement, all of the Policy proceeds in
excess of those payable to the Participant's
beneficiary or beneficiaries, as provided under the
Plan, reduced by any indebtedness against the Policy;
and
(c) The right to receive full ownership of the Policy in
the event of termination of the Insured's employment
prior to Retirement for reasons other than death or
disability, as provided in Paragraph 8.1 of the Plan;
and
(d) The right to receive full ownership of the Policy in
the event the Plan is terminated by the Board prior
to the Insured's Retirement as provided in Paragraph
9.2 of the Plan.
3) Except as specifically herein granted to the Assignee, the
Owner shall retain all incidents of ownership in the Policy,
including the right to assign his interest in the Policy, the
right to change the beneficiary of that portion of the
proceeds to which he is entitled under Article VII of the
Plan, and the right to exercise all settlement options
permitted by the terms of the Policy; provided, however, that
all rights retained by Owner shall be subject to the terms and
conditions of the Plan.
4) The Assigned shall, upon request, forward the Policy to the
Insurer, without reasonable delay, for endorsement of any
designation or change of beneficiary, any election of optional
mode of settlement, or the exercise of any other right
reserved by the Owner hereunder.
5) The Insurer is hereby authorized to recognize the Assignee's
claims to rights hereunder without investigating the reason
for any action taken by the Assignee, the validity or amount
of liabilities of the Owner to the Assignee under the
Agreement, the existence of any default therein, the giving of
any notice required herein, or the application to be made by
the Assignee of any amounts to be paid to the Assignee. The
signature of the Assignee shall be sufficient for the exercise
of any rights under the Policy assigned hereby to the Assignee
and the receipt of the Assignee for any sums received by its
shall be a full discharge and release therefor to the Insurer.
-18-
<PAGE> 22
[KEYCORP LOGO] SURVIVOR BENEFIT PLAN
COLLATERAL ASSIGNMENT
================================================================================
6) Upon termination of employment at Retirement, the Assignee
shall, as provided for under Paragraph 8.2 of the Plan,
reassign to the Owner the Policy and all specific right
included in this Collateral Assignment.
IN WITNESS WHEREOF, the undersigned Owner has executed this Assignment.
Witness Owner
-19-
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.25
<SEQUENCE>13
<DESCRIPTION>EXHIBIT 10.25
<TEXT>
<PAGE> 1
Exhibit 10.25
KEYCORP
DIRECTORS' SURVIVOR BENEFIT PLAN
Effective as of September 1, 1990
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
ARTICLE I PURPOSE EFFECTIVE DATE 1
ARTICLE II DEFINITIONS 1
2.1 Beneficiary 1
2.2 Board 1
2.3 Committee 1
2.4 Company 1
2.5 Participant 2
2.6 Participation Agreement 2
2.7 Year of Service 2
ARTICLE III PARTICIPATION 2
3.1 Eligibility and Participation 2
3.2 Suicide 2
ARTICLE IV BENEFITS 3
4.1 Death During Active Service
on the Board 3
4.2 Death After Termination of
Board Service 3
4.3 Payment of Benefits 4
ARTICLE V BENEFICIARY DESIGNATION 4
5.1 Beneficiary Designation 4
5.2 Changing Beneficiary 4
5.3 Community Property 4
5.4 No Beneficiary Designation 6
ARTICLE VI ADMINISTRATION 6
6.1 Committee Duties 6
6.2 Agents 7
6.3 Binding Effect of Decisions 7
6.4 Indemnity of the Committee 7
</TABLE>
(i)
<PAGE> 3
TABLE OF CONTENTS
(Continued)
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
ARTICLE VII CLAIMS PROCEDURE 7
7.1 Claim 7
7.2 Review of Claim 8
7.3 Notice of Denial of Claim 8
7.4 Reconsideration of Denied Claim 9
7.5 Company to Supply Information 10
ARTICLE VIII TERMINATION AMENDMENT 11
8.1 Amendment 11
8.2 Termination 11
ARTICLE IX MISCELLANEOUS 11
9.1 Unsecured General Creditor 11
9.2 Trust Fund 12
9.3 Nonassignability 12
9.4 Not A Contract of Employment 13
9.5 Protective Provisions 13
9.6 Governing Law 13
9.7 Validity 13
9.8 Notice 13
9.9 Successors 14
</TABLE>
(ii)
<PAGE> 4
KEYCORP
DIRECTORS' SURVIVOR BENEFIT PLAN
ARTICLE I
PURPOSE: EFFECTIVE DATE
-----------------------
The purpose of this Directors' Survivor Benefit Plan (hereinafter
referred to as the "Plan"), is to provide death benefits to the Beneficiaries of
eligible Directors of KeyCorp. It is intended that the Plan will aid in
retaining and attracting Directors of exceptional ability by providing them with
these benefits. This Plan shall be effective as of September 1, 1990.
ARTICLE II
DEFINITIONS
-----------
For purposes of this plan, the following terms shall have the meanings
indicated, unless the context clearly indicates otherwise:
2.1 BENEFICIARY. "Beneficiary" means the person, persons or entity
entitles under Article V to receive Plan benefits payable upon a Participant's
death.
2.2 BOARD. "Board" means the Board of Directors of KeyCorp.
2.3 COMMITTEE. "Committee" means the Compensation Committee of the
Board.
2.4 COMPANY. "Company means KeyCorp, a New York Corporation, or any
successor to the business thereof.
PAGE 1 - Directors' Survivor Benefit Plan
<PAGE> 5
2.5 PARTICIPANT. "Participant" means any individual who meets the
conditions for participation described in Article III.
2.6 PARTICIPATION AGREEMENT. "Participation Agreement" means the
agreement filed by a Participant on a form prescribed by the Committee which
acknowledges assent to the terms of the Plan.
2.7 YEAR OF SERVICE. "Year of Service" means twelve (12) months of
service on the Board.
ARTICLE III
PARTICIPATION
-------------
3.1 ELIGIBILITY AND PARTICIPATION.
(a) ELIGIBILITY. Eligibility to participate in the Plan shall
be limited to Directors of the Company.
(b) PARTICIPATION. A Director's participation in the Plan
shall be effective upon notification of the Director of eligibility to
participate, completion of a Participation Agreement by the Director
and acceptance of the Participation Agreement by the Committee.
3.2 SUICIDE. No benefits shall be paid under this Plan upon the death
of a Participant by reason of suicide within twenty-four (24) months after
signing a Participation Agreement.
PAGE 2 - DIRECTORS' SURVIVOR BENEFIT PLAN
<PAGE> 6
ARTICLE IV
BENEFITS
--------
4.1 DEATH DURING ACTIVE SERVICE ON THE BOARD. Upon the death of a
Participant who is a member of the Board of Directors, the Company shall pay the
Participant's Beneficiary one hundred thousand dollars ($100,000) plus the
amount needed to pay all federal and state income taxes on the benefit herein
provided, based upon the highest combined federal and state marginal tax rate
applicable to the Beneficiary in the year of the Participant's death.
4.2 DEATH AFTER TERMINATION OF BOARD SERVICE.
(a) If a Participant terminates service on the Board after
five (5) or more Years of Service, upon the death of the Participant,
the Company shall pay the Participant's Beneficiary one hundred
thousand dollars ($100,000) plus the amount needed to pay all federal
and state income taxes on the benefit provided, based upon the highest
combined federal and state marginal tax rate applicable to the
Beneficiary in the year of the Participant's death.
(b) If a Participant terminates service on the Board with less
than five (5) Years of Service, no benefits shall be payable under this
Plan to either the Participant or the Participant's Beneficiary.
PAGE 3 - DIRECTORS' SURVIVOR BENEFIT PLAN
<PAGE> 7
4.3 PAYMENT OF BENEFITS. Any benefits due to a Beneficiary under this
plan shall be payable within one hundred twenty (120) days after all documents
prescribed by the Committee have been forwarded to the Company.
ARTICLE V
BENEFICIARY DESIGNATION
-----------------------
5.1 BENEFICIARY DESIGNATION. Subject to Section 5.3, each Participant
shall have the right, at any time, to designate one or more persons or an entity
as Beneficiary (both primary as well as secondary) to whom benefits under this
Plan shall be paid in the event of the Participant's death. Each Beneficiary
designation shall be in written form prescribed by the Committee and shall be
effective only when filed with the Committee during the Participant's lifetime.
5.2 CHANGING BENEFICIARY. Subject to Section 5.3, any Beneficiary
designation may be changed by a Participant without the consent of the
previously named Beneficiary by the filing of a new designation with the
Committee. The filing of a new designation shall cancel all designations
previously filed.
5.3 COMMUNITY PROPERTY. If the Participant resides in a community
property state, the following rules shall apply:
(a) Designation by a married Participant of a Beneficiary
other than the Participant's spouse shall not be effective unless the spouse
executes a written consent that acknowledges the effect of the designation, or
it is
PAGE 4 - DIRECTORS' SURVIVOR BENEFIT PLAN
<PAGE> 8
established the consent cannot be obtained because the spouse cannot be located.
(b) A married Participant's Beneficiary designation may be
changed by a Participant with the consent of the Participant's spouse as
provided for in Section 5.3(a) by the filing of a new designation with the
Committee.
(c) If the Participant's marital status changes after the
Participant has designated a Beneficiary, the following shall apply:
(i) If the Participant is married at the time of
death but was unmarried when the designation was made, the
designation shall be void unless the spouse has consented to
it in the manner prescribed in Section 5.3(a).
(ii) If the Participant is unmarried at the time of
death but was married when the designation was made:
a) The designation shall be void if the
spouse was named as Beneficiary.
b) The designation shall remain valid if a
nonspouse Beneficiary was named.
(iii) If the Participant was married when the
designation was made and is married to a different spouse at
death, the designation shall be void unless
PAGE 5 - DIRECTORS' SURVIVOR BENEFIT PLAN
<PAGE> 9
the new spouse has consented to it in the manner prescribed above.
5.4 NO BENEFICIARY DESIGNATION. If any Participant fails to designate a
Beneficiary in the manner provided above, if the designation is void, or if the
Beneficiary designated by a deceased Participant dies before the Participant or
before complete distribution of the Participant's benefits, the Participant's
Beneficiary shall be the person in the first of the following classes in which
there is a survivor:
(a) The Participant's spouse;
(b) The Participant's children in equal shares, except that if
any of the children predeceases the Participant but leaves issue
surviving, then such issue shall take by right of representation the
share the parent would have taken if living;
(c) The Participant's estate.
ARTICLE VI
ADMINISTRATION
--------------
6.1 COMMITTEE DUTIES. This Plan shall be administered by the
Compensation Committee of the Board. The Committee shall have the authority to
make, amend, interpret and enforce all appropriate rules and regulations for the
administration of the Plan and decide or resolve any and all questions,
including interpretations of the Plan, as may arise in such administration.
PAGE 6 - DIRECTORS' SURVIVOR BENEFIT PLAN
<PAGE> 10
A majority vote of the Committee members shall control any decision. Members of
the Committee may be Participants under this Plan.
6.2 AGENTS. The Committee may, from time to time, employ other agents
and delegate to them such administrative duties as it sees fit, and may from
time to time consult with counsel who may be counsel to Company.
6.3 BINDING EFFECT OF DECISIONS. The decision or action of the
Committee in respect of any questions arising out of or in connection with the
administration, interpretation and application of the Plan in the rules and
regulations promulgated hereunder shall be final and conclusive and binding upon
all persons having any interest in Plan.
6.4 INDEMNITY OF THE COMMITTEE. Company shall indemnify and hold
harmless the Committee against any and all claims, loss, damage, expense or
liability arising from any action or failure to act with respect to this Plan,
except in the case of gross negligence or willful misconduct.
ARTICLE VII
CLAIMS PROCEDURE
----------------
7.1 CLAIM. The Committee shall establish rules and procedures to be
followed by Participants and Beneficiaries in (a) filing claims for benefits,
and (b) for furnishing and verifying proofs necessary to establish the right to
benefits in accordance with the Plan, consistent with the remainder of this
PAGE 7 - DIRECTORS' SURVIVOR BENEFIT PLAN
<PAGE> 11
Article. Such rules and procedures shall require that claims and proofs be made
in writing and directed to the Committee.
7.2 REVIEW OF CLAIM. The Committee shall review all claims for
benefits. Upon receipt by the Committee of such a claim, it shall determine all
facts which are necessary to establish the right of the claimant to benefits
under the provisions of the Plan and the amount thereof as herein provided
within ninety (90) days of receipt of such claim. If prior to the expiration of
the initial ninety (90) day period, the Committee determines additional time is
needed to come to a determination on the claim, the Committee shall provide
written notice to the Participant, Beneficiary or other claimant of the need for
the extension, not to exceed a total of one hundred eighty (180) days from the
date the application was received.
7.3 NOTICE OF DENIAL OF CLAIM. In the event that any Participant,
Beneficiary or other claimant claims to be entitled to a benefit under the Plan,
and the Committee determines that such claim should be denied in whole or in
part, the Committee shall, in writing, notify such claimant that the claim has
been denied, in whole or in part, setting forth the specific reasons for such
denial. Such notification shall be written in a manner reasonably expected to be
understood by such claimant and shall refer to the specific sections of the Plan
relied on, shall describe any additional material or information necessary for
the claimant to perfect the claim and an explanation of why such material or
information is necessary, and where appropriate,
PAGE 8 - DIRECTORS' SURVIVOR BENEFIT PLAN
<PAGE> 12
shall include an explanation of how the claimant can obtain reconsideration of
such denial.
7.4 RECONSIDERATION OF DENIED CLAIM.
(a) Within sixty (60) days after receipt of the notice of the
denial of a claim, such claimant or duly authorized representative may
request, by mailing or delivery of such written notice to the
Committee, a reconsideration by the Committee of the decision denying
the claim. If the claimant or duly authorized representative fails to
request such a reconsideration within such sixty (60) day period, it
shall be conclusively determined for all purposes of this Plan that the
denial of such claim by the Committee is correct. If such claimant or
duly authorized representative requests a reconsideration within such
sixty (60) day period, the claimant or duly authorized representative
shall have thirty (30) days after filing a request for reconsideration
to submit additional written material in support of this claim, review
pertinent documents, and submit issues and comments in writing.
(b) After such reconsideration request, the Committee shall
determine within sixty (60) days of receipt of the claimant's request
for reconsideration whether such denial of the claim was correct and
shall notify such claimant in writing of its determination. The written
notice of decision shall be in writing and shall include specific
reasons for the decision, written in a manner calculated to
PAGE 9 - DIRECTORS' SURVIVOR BENEFIT PLAN
<PAGE> 13
be understood by the claimant, as well as specific references to the
pertinent Plan provisions on which the decision is based. In the event
of special circumstances determined by the Committee, the time for the
Committee to make a decision may be extended by an additional sixty
(60) days upon written notice to the claimant prior to the commencement
of the extension. If such determination is favorable to the claimant,
it shall be binding and conclusive. If such determination is adverse to
such claimant, it shall be binding and conclusive unless the claimant
or his duly authorized representative notifies the Committee within
ninety (90) days after mailing or delivery to the claimant by the
Committee of its determination that claimant intends to institute legal
proceedings challenging the determination of the Committee and actually
institutes such legal proceeding within one hundred eighty (180) days
after such mailing or delivery.
7.5 COMPANY TO SUPPLY INFORMATION. To enable the Committee to perform
its functions, the Company shall supply full and timely information to the
Committee of all matters relating to the retirement, death or other cause for
termination of employment of all Participants, and such other pertinent facts as
the Committee may require.
PAGE 10 - DIRECTORS' SURVIVOR BENEFIT PLAN
<PAGE> 14
ARTICLE VIII
TERMINATION AMENDMENT
---------------------
8.1 AMENDMENT. The Board may, in its sole discretion, amend this Plan
at any time or from time to time. Any amendment may provide different benefits
or amounts of benefits from those herein set forth. However, no such amendment
shall reduce the amount of benefit payable with respect to a Participant who has
terminated service on the Board before the effective date of the amendment.
8.2 TERMINATION. The Board may, in its sole discretion, terminate this
Plan at any time. The Participants shall have no right to continuation of the
death benefit protection provided by this Plan. However, no such termination
shall prevent the payment of benefits with respect to Participants who have
terminated service on the Board before the effective date of termination.
ARTICLE IX
MISCELLANEOUS
-------------
9.1 UNSECURED GENERAL CREDITOR. Participants and their Beneficiaries,
heirs, successors and assigns shall have no legal or equitable rights, interest
or claims in any property or assets of Company, nor shall they be Beneficiaries
of, or have any rights, claims or interests in any life insurance policies or
the proceeds therefrom owned or which may be acquired by the Company. Any and
all other Company assets and policies shall be, and
PAGE 11 - DIRECTORS' SURVIVOR BENEFIT PLAN
<PAGE> 15
remain, the general, unpledged, and unrestricted assets of the Company.
Company's obligation under the Plan shall be that of an unfunded and unsecured
promise of Company to pay money.
9.2 TRUST FUND. At its discretion, Company may establish one or more
trusts, with such trustees as the Board may approve, for the purpose of
providing for the payment of benefits owed under the Plan. Although such a trust
shall be irrevocable, its assets shall be held for payment of all Company's
general creditors in the event of insolvency or bankruptcy. To the extent any
benefits provided under the Plan are paid from any such trust, Company shall
have no further obligation to pay them. If not paid from the trust, such
benefits shall remain the obligation of Company.
9.3 NONASSIGNABILITY. A Participant, Beneficiary nor any other person
shall have no right to commute, sell, assign, transfer, pledge, anticipate,
mortgage or otherwise encumber, transfer, hypothecate or convey in advance of
actual receipt the amounts, if any, payable hereunder, or any part thereof. Such
amounts and all rights under this Plan are expressly declared to be unassignable
and nontransferable. No part of the amounts payable shall, prior to actual
payment, be subject to seizure or sequestration for the payment of any debts,
judgments, alimony or separate maintenance owed by Participant or any other
person, nor be transferable by operation of law in the event of a Participant's
or any other person's bankruptcy or insolvency.
PAGE 12 - DIRECTORS' SURVIVOR BENEFIT PLAN
<PAGE> 16
9.4 NOT A CONTRACT OF EMPLOYMENT. The terms and conditions of this Plan
shall not be deemed to constitute a contract of employment between Company and
the Participant, and the Participant or Beneficiary shall have no rights against
Company except as may otherwise be specifically provided herein. Moreover,
nothing in this Plan shall be deemed to give a Participant the right to be
retained in the service of Company or to interfere with the right of Company to
discipline or discharge the Participant at any time.
9.5 PROTECTIVE PROVISIONS. A Participant or Beneficiary will cooperate
with Company by furnishing any and all information requested by Company, in
order to facilitate the payment of benefits hereunder, and by taking such
physical examinations as Company may deem necessary and taking such other action
as may be requested by Company.
9.6 GOVERNING LAW. The provision of this Plan shall be construed and
interpreted according to the laws of the State of New York.
9.7 VALIDITY. In case any provision of this Plan shall be held illegal
or invalid for any reasons, said illegality or invalidity shall not affect the
remaining parts hereof, but this Plan shall be construed and enforced as if such
illegal and invalid provision had never been inserted herein.
9.8 NOTICE. Any notice or firing required or permitted to be given to
the Committee under the Plan shall be sufficient if in writing and hand
delivered, or sent by registered or
PAGE 13 - DIRECTORS' SURVIVOR BENEFIT PLAN
<PAGE> 17
certified mail to the Committee. Such notice shall be deemed given as of the
date of delivery or, if delivery is made by mail, as of the date shown on the
postmark on the receipt for registration or certification.
9.9 SUCCESSORS. Provisions of this Plan shall bind and inure to the
benefit of KeyCorp and its successors and assigns. The term successors as used
herein shall include any corporate or other business entity which shall, whether
by merger, consolidation, purchase or otherwise acquire all or substantially all
of the business and assets of KeyCorp, and successors of any such corporation or
other business entity. IN WITNESS WHEREOF, and pursuant to resolution of the
Board of KeyCorp, such corporation has caused this instrument to be executed by
its duly authorized officers effective as of September 1, 1990.
KEYCORP
By: ______________________
Chairman
By: ______________________
Dated: ______________________
PAGE 14 - DIRECTORS' SURVIVOR BENEFIT PLAN
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.26
<SEQUENCE>14
<DESCRIPTION>EXHIBIT 10.26
<TEXT>
<PAGE> 1
Exhibit 10.26
KEYCORP
SUPPLEMENTAL RETIREMENT BENEFIT PLAN
FOR KEY EXECUTIVES
EFFECTIVE JULY 1, 1990
RESTATED AUGUST 16, 1990
<PAGE> 2
TABLE OF CONTENTS
PAGE
----
PREAMBLE................................................................... 1
ARTICLE I DEFINITIONS.................................................. 1
1.1 Board............................................... 1
1.2 Credited Service.................................... 1
1.3 Effective Date...................................... 2
1.4 Employee............................................ 2
1.5 Employer............................................ 2
1.6 Final Average Salary................................ 2
1.7 Incentive Compensation.............................. 2
1.8 Participant......................................... 3
1.9 Pension Plan........................................ 3
1.10 Plan................................................ 3
1.11 Plan Year........................................... 3
1.12 Salary.............................................. 3
1.13 Service............................................. 3
ARTICLE II PARTICIPATION................................................ 4
2.1 General Rule........................................ 4
2.2 Reemployment of Participant......................... 4
2.3 Prospective Changes in
Participation Requirements.......................... 4
2.4 Vesting............................................. 4
ARTICLE III RETIREMENT CONDITIONS........................................ 5
3.1 Normal Retirement................................... 5
3.2 Delayed Retirement Date............................. 5
3.3 Early Retirement Date............................... 5
<PAGE> 3
PAGE
----
ARTICLE IV RETIREMENT ALLOWANCES........................................ 6
4.1 Normal Retirement Allowance......................... 6
4.2 Delayed Retirement Allowance........................ 7
4.3 Early Retirement Allowance.......................... 7
4.4 Vested Termination Allowance........................ 8
4.5 Optional Methods of Retirement
Payments............................................ 9
4.6 Special Rules With Regard to
Calculation of Retirement
Allowances........................................... 10
ARTICLE V DEATH BENEFITS................................................ 12
5.1 Death Prior to Retirement............................ 12
5.2 Death After Commencement
of Retirement Allowance.............................. 13
ARTICLE VI DISABILITY BENEFITS........................................... 14
6.1 Total and Permanent Disability
Defined.............................................. 14
6.2 Termination Prior to Ten Years
of Credited Service.................................. 14
6.3 Termination After Ten Years
of Credited Service.................................. 14
6.4 Recovery From Disability Prior
to Normal Retirement Date............................ 15
ARTICLE VII ADMINISTRATION................................................ 16
7.1 Contributions by Participants........................ 16
7.2 Contributions by Employer............................ 16
7.3 Designation and Duties of
Administrator........................................ 17
7.4 Amendment............................................ 17
7.5 Plan Termination..................................... 17
<PAGE> 4
PAGE
----
ARTICLE VIII CLAIMS PROCEDURE.............................................. 18
8.1 Claim................................................ 18
8.2 Review of Claim...................................... 18
8.3 Notice of Denial of Claim............................ 18
8.4 Reconsideration of Denied Claim...................... 19
8.5 Employer to Supply Information....................... 20
ARTICLE IX MISCELLANEOUS................................................. 21
9.1 Headings and Subheadings............................. 21
9.2 Gender and Number.................................... 21
9.3 Construction of Plan................................. 21
9.4 Employee's Rights.................................... 21
9.5 Vested Interest...................................... 21
9.6 Receipt or Release................................... 22
9.7 Spendthrift Clause................................... 22
9.8 Facility of Payments................................. 22
9.9 Delegation of Authority by
the Employer......................................... 22
APPENDIX A
APPENDIX B
APPENDIX C
<PAGE> 5
KEYCORP
SUPPLEMENTAL RETIREMENT BENEFIT PLAN
FOR KEY EXECUTIVES
RESTATED AUGUST 16, 1990
PREAMBLE
The purpose of this Supplemental Retirement Benefit Plan for Key
Executives is to provide certain employees with supplemental retirement
benefits. It is intended that this Plan will aid in attracting and retaining
employees of exceptional ability by providing them with this benefit. This Plan
is effective on July 1, 1990.
ARTICLE I
DEFINITIONS
-----------
For the purposes herein, the following terms shall have the meaning
indicated:
1.1 BOARD. "Board" shall mean the Board of Directors of KeyCorp as from
time to time constituted.
1.2 CREDITED SERVICE. "Credited Service" shall mean the same period of
time as constitutes Credited Service for that Participant under the Pension Plan
except that:
(a) It shall not be subject to a thirty-five (35) year
maximum, and
Page 1 - SUPPLEMENTAL RETIREMENT BENEFIT PLAN FOR KEY EXECUTIVES
<PAGE> 6
(b) It shall continue to accrue during periods of total and
permanent disability to the extent provided by Article VI hereof.
1.3 EFFECTIVE DATE. "Effective Date" shall mean July 1, 1990.
1.4 EMPLOYEE. "Employee" shall mean any person regularly employed by
the Employer, including officers, but not including directors unless a director
is also an officer or employee of the Employer, nor attorneys or other persons
doing independent professional work who are retained by the Employer.
1.5 EMPLOYER. "Employer" shall mean KeyCorp and all of its wholly-owned
subsidiaries, each with respect to its own Employees.
1.6 FINAL AVERAGE SALARY. "Final Average Salary" shall mean the average
of the annual Salary of a Participant for the highest three (3) calendar years
out of the last five (5) calendar years preceding the Participant's termination
of employment; if the Participant has less than three (3) years of employment,
the average shall be for all of the Participant's years of employment. If the
Participant is not compensated for all or a part of a year in such period
because of an absence, the number of complete months in which the Participant
received no compensation during such year shall be disregarded in determining
Final Average Salary.
1.7 INCENTIVE COMPENSATION. "Incentive Compensation" shall mean amounts
payable to a participant under the KeyCorp Executive Incentive Compensation
Plan.
Page 2 - SUPPLEMENTAL RETIREMENT BENEFIT PLAN FOR KEY EXECUTIVES
<PAGE> 7
1.8 PARTICIPANT. "Participant" shall mean an employee entitled to
participate in this Plan in accordance with Article II hereof.
1.9 PENSION PLAN. "Pension Plan" shall mean the KeyCorp Pension Plan as
amended from time to time.
1.10 PLAN. "Plan" shall mean the KeyCorp Supplemental Retirement
Benefit Plan for Key Executives as contained herein or as amended from time to
time.
1.11 PLAN YEAR. "Plan Year" shall mean the calendar year.
1.12 SALARY. "Salary" shall mean the base salary and Incentive
Compensation of an Employee exclusive of bonuses, overtime pay and other extra
compensation. For this purpose, the basic salary of an Employee shall include:
(a) Amounts that are the subject of a deferred compensation
agreement between the Employee and the Employer;
(b) Amounts that are the subject of a Salary Reduction
Agreement within the meaning of the KeyCorp Profit Sharing Plus Plan;
and
(c) Amounts that are the subject of a salary reduction
arrangement between the Employee and the Employer in accordance with
the Internal Revenue Code Section 125.
1.13 SERVICE. "Service" shall mean the same period of time as
constitutes Service for that Participant under the Pension Plan.
Page 3 - SUPPLEMENTAL RETIREMENT BENEFIT PLAN FOR KEY EXECUTIVES
<PAGE> 8
ARTICLE II
PARTICIPATION
-------------
2.1 GENERAL RULES. Participation shall be limited to Participants of
the KeyCorp Supplemental Retirement Benefit Plan for Key Executives who are
designated as Participants of this Plan by the Board. A Participant in this Plan
shall not also be a Participant in the KeyCorp Supplemental Retirement Benefit
Plan.
2.2 REEMPLOYMENT OF PARTICIPANT. A Participant who has terminated his
employment and subsequently is reemployed shall become a Participant immediately
upon his reemployment provided that the Board again designates him for
participation in the Plan.
2.3 PROSPECTIVE CHANGES IN PARTICIPATION REQUIREMENTS. The Employer, in
its sole discretion, reserves the right to alter the requirements for
participation in Section 2.1 at any time and from time to time; provided,
however, that any such change shall not cause any Employee who became a Plan
Participant hereunder prior to the effective date of such change to become
ineligible hereunder by virtue of such change.
2.4 VESTING. A Participant shall be one-hundred percent (100%) vested
in benefits under this Plan upon completion of five (5) years of Credited
Service.
Page 4 - SUPPLEMENTAL RETIREMENT BENEFIT PLAN FOR KEY EXECUTIVES
<PAGE> 9
ARTICLE III
RETIREMENT CONDITIONS
---------------------
3.1 NORMAL RETIREMENT. Except as may be provided in an applicable
Appendix to the Plan, the Normal Retirement Date of a Participant shall be the
earliest of:
(a) The first day of the month coinciding with or next
following the date he attains the age of sixty-five (65); or
(b) The first day of the month coinciding with or next
following the date that the Participant both attains the age of
sixty-two (62) and completes fifteen (15) years of Credited Service.
3.2 DELAYED RETIREMENT DATE. A Participant may continue in the
employment of the Employer beyond his Normal Retirement Date, but, to the extent
permitted by applicable law, he may continue in the employment of the Employer
beyond his seventieth (70th) birthday only if agreed to by the Employer. To the
extent permitted by applicable law, a Participant continuing in employment
beyond his seventieth (70th) birthday shall retire from the employment of the
Employer on the first day of the month coinciding with or next following the end
of the last approved period of employment.
3.3 EARLY RETIREMENT DATE. A Participant may retire from employment of
the Employer prior to his Normal Retirement Date, on the first day of any month
coinciding with or following the date on which he has either attained the age of
Page 5 - SUPPLEMENTAL RETIREMENT BENEFIT PLAN FOR KEY EXECUTIVES
<PAGE> 10
sixty (60), or both attained the age of fifty (50) and completed at least
fifteen (15) years of Credited Service.
ARTICLE IV
RETIREMENT ALLOWANCES
---------------------
4.1 NORMAL RETIREMENT ALLOWANCE. A Participant shall, upon retirement
at his Normal Retirement Date, receive a monthly retirement allowance which
shall commence on such retirement date and shall be payable in the form and over
such duration as elected by the Participant. The amount of each such retirement
allowance shall be equal to (a) plus (b) minus (c) as follows:
(a) One-twelfth (1/12th) of seventy-five percent (75%) of his
Final Average Salary reduced by two (2) percentage points for the
number of years by which the Participant's total years of Credited
Service at his Normal Retirement Date is less than twenty-five (25)
years (rounded down to the nearest whole year), multiplied by a
fraction, the numerator of which is the Participant's years of Credited
Service earned prior to January 1, 1988, and the denominator of which
is the Participant's total years of Credited Service at his Normal
Retirement Date.
(b) One-twelfth (1/12th) of sixty-five percent (65%) of his
Final Average Salary reduced by 2.6 percentage points for the number of
years by which the Participant's total years of Credited Service at his
Normal Retirement Date is less than twenty-five (25) years (rounded
down to nearest whole year), multiplied by a fraction, the numerator of
which is the
Page 6 - SUPPLEMENTAL RETIREMENT BENEFIT PLAN FOR KEY EXECUTIVES
<PAGE> 11
Participant's years of Credited Service earned after December 31, 1987,and
the denominator of which is the Participant's total Years of Credited Service
at his Normal Retirement Date.
(c) The sum of:
(i) His monthly retirement benefit under the Pension
Plan determined at his Normal Retirement Date; and
(ii) His monthly Primary Social Security Benefit as
defined in the Pension Plan.
4.2 DELAYED RETIREMENT ALLOWANCE. Upon retirement after his Normal
Retirement Date, a Participant shall receive a monthly allowance which shall
commence on the first day of the month coincident with or next following the
date of such retirement and shall be payable in the form and over such duration
as elected by the Participant pursuant to Section 4.5. The amount of each such
monthly retirement allowance shall be computed in the same manner as the Normal
Retirement Allowance except that Final Average Salary and Credited Service will
be determined as of the Delayed Retirement date.
4.3 EARLY RETIREMENT ALLOWANCE. Upon retirement at his Early Retirement
Date, a Participant shall receive a monthly retirement allowance, which shall
commence on the first day of any month coinciding with or preceding his Normal
Retirement Date and shall be payable in the form and over such duration as
elected by the Participant pursuant to Section 4.5. The amount of each such
Page 7 - SUPPLEMENTAL RETIREMENT BENEFIT PLAN FOR KEY EXECUTIVES
<PAGE> 12
monthly retirement allowance shall be equal to the product of items (a), (b) and
(c) below:
(a) A monthly retirement allowance determined in the same
manner as for retirement at his Normal Retirement Date except that:
(i) Credited Service shall be determined as if the
Participant had in fact continued in active employment until
his Normal Retirement Date; and
(ii) Final Average Salary shall be determined as of
the date of his actual retirement.
(b) The ratio that the Participant's Credited Service to the
date of his actual retirement bears to the Credited Service that he
would have had if he had continued in employment until his Normal
Retirement Date. For this purpose, the Normal Retirement Date of a
Participant shall be the earliest date on which the Participant could
have retired under Section 3.1.
(c) Actuarial reduction factors which take into account the
commencement of benefits prior to a Participant's Normal Retirement
Date. Such actuarial reduction factors shall be the same factors as are
then applicable under the Pension Plan with respect to the commencement
of benefits before a Participant's Normal Retirement Date under the
Pension Plan.
4.4 VESTED TERMINATION ALLOWANCE. A vested Participant, who terminates
before his Early Retirement Date, shall receive a monthly retirement allowance,
Page 8 - SUPPLEMENTAL RETIREMENT BENEFIT PLAN FOR KEY EXECUTIVES
<PAGE> 13
which shall commence on the first day of the month coinciding with or next
following his sixty-fifth (65th) birthday and shall be payable in the form and
over such duration as elected by the Participant pursuant to Section 4.5. The
amount of each such monthly retirement allowance shall be equal to the product
of items (a) and (b) below:
(a) A monthly retirement allowance determined in the same
manner as for retirement at his Normal Retirement Date except that:
(i) Credited Service shall be determined as if the
Participant had in fact continued in active employment until
his sixty-fifth (65th) birthday; and
(ii) Final Average Salary shall be determined as of
the date of his actual retirement.
(b) The ratio that the Participant's Credited Service to the
date of his actual retirement bears to the Credited Service that he
would have had if he had continued in employment until his sixty-fifth
(65th) birthday.
4.5 OPTIONAL METHODS OF RETIREMENT PAYMENTS. The benefits hereunder
shall be paid in accordance with the optional method of retirement payment that
has been elected by the Participant at the time of initial Plan participation.
The Participant may elect one of the following payment forms:
(a) Joint and fifty percent (50%) survivor benefit.
(b) Joint and one hundred percent (100%) survivor
benefit.
(c) Ten (10) year certain and life.
Page 9 - SUPPLEMENTAL RETIREMENT BENEFIT PLAN FOR KEY EXECUTIVES
<PAGE> 14
(d) Fifteen (15) year certain and life.
(e) Single life annuity.
The same actuarial reduction factors and method of calculating actuarial
equivalence under the Pension Plan shall be applicable under this Plan. Any such
optional method of retirement payment shall be the actuarial equivalent of the
actual dollar amount of lifetime retirement allowance otherwise payable from
this Plan after adjustment for the benefit payable from the Pension Plan and the
Primary Social Security Benefit.
4.6 SPECIAL RULES WITH REGARD TO CALCULATION OF RETIREMENT ALLOWANCES.
The following special rules shall be applicable with regard to the calculation
of retirement allowances under the Plan:
(a) A Participant's monthly retirement benefit under the
Pension Plan shall mean the benefit to which the Participant is or,
upon proper application, would be, entitled under the Pension Plan. For
this purpose, the benefit to which the Participant would be entitled
under the Pension Plan is the benefit which he could receive if he
elected to commence payments at the earliest time available under the
Pension Plan, notwithstanding when he actually elects to have benefits
commence.
(b) The Participant's Primary Social Security Benefit shall
mean the Primary Social Security Benefit payable, if proper application
were made, when the Participant retires under this Plan.
Page 10 - SUPPLEMENTAL RETIREMENT BENEFIT PLAN FOR KEY EXECUTIVES
<PAGE> 15
If a Participant is not eligible for such Primary Social
Security Benefit upon his retirement under this Plan, and upon proper
application would not be so entitled, then no Primary Social Security
Benefit shall be taken into account under Section 4.1 until the
earliest date at which he is eligible to receive such benefits if
proper application were made. In such an event, the Primary Social
Security Benefit to which such Participant is or, upon proper
application, would be entitled at such earliest date shall be taken
into account under Section 4.1 in calculating his benefits under this
Plan from and after such date. Once such Primary Social Security
Benefits are taken into account under Section 4.1, any subsequent
change in the Participant's Primary Social Security Benefits (whether
such change is the result of applying a cost-of-living increase, or
recomputing the benefit based upon more recent compensation or
otherwise) shall be disregarded.
(c) If a Participant is not a participant in the Pension Plan,
his benefit will be determined without reference to the amount of his
benefit under the Pension Plan specified in Section 4.1; provided,
however, that if such Participant is a participant in a defined benefit
pension plan qualified under Internal Revenue Code Section 401(a),
maintained by the Employer or any subsidiary thereof, other than the
Pension Plan, then the benefit payable to such Participant under such
other plan, determined in accordance with subsection (a) above, shall
be applied in lieu of the amount of his benefit under the Pension Plan
specified in Section 4.1.
Page 11 - SUPPLEMENTAL RETIREMENT BENEFIT PLAN FOR KEY EXECUTIVES
<PAGE> 16
(d) If a Participant is entitled to receive a benefit from the
Pension Plan and also from another defined benefit pension plan
qualified under Internal Revenue Code Section 401(a), maintained by the
Employer or any subsidiary thereof, then the amount payable from such
other plan, determined in accordance with subsection (a) above, shall
be added to the amount of his benefit under the Pension Plan taken into
account in accordance with Section 4.1.
(e) Specific exceptions to the provisions of the Plan related
to the calculation of Retirement Allowances shall be governed by the
Appendices which are incorporated as part of this Plan.
ARTICLE V
DEATH BENEFITS
--------------
5.1 DEATH PRIOR TO RETIREMENT.
(a) If a Participant dies in active employment and prior to
becoming eligible for either an Early Retirement Allowance or a Normal
Retirement Allowance hereunder, no death benefit shall be payable from
this Plan.
(b) If a Participant dies in active employment but after
becoming eligible for either an Early Retirement Allowance or a Normal
Retirement Allowance, and is survived by his spouse, a monthly
retirement allowance shall be paid to his surviving spouse commencing
on the first day of the month coincident with or next following his
date of death and continuing on the first day of each month thereafter
during his spouse's lifetime. Each
Page 12 - SUPPLEMENTAL RETIREMENT BENEFIT PLAN FOR KEY EXECUTIVES
<PAGE> 17
such monthly retirement allowance shall equal seventy-five percent
(75%) of the monthly retirement allowance to which the Participant
would have been entitled had he retired on this date of death.
For the purpose of calculating this death benefit only, the
following special rules apply with respect to the calculation of the
Primary Social Security Benefit which the Participant would have been
entitled to receive:
(i) If both the Participant had attained his
sixty-second (62nd) birthday and his spouse had attained her
sixtieth (60th) birthday on the Participant's date of death,
then the Primary Social Security Benefit to which the
Participant would have been entitled had he retired on his
date of death instead of dying and then commenced receiving
Social Security benefits will be applied.
(ii) In all other cases, the Primary Social Security
Benefit shall be deemed to be zero.
5.2 DEATH AFTER COMMENCEMENT OF RETIREMENT ALLOWANCE. Except as
provided in Section 4.5, all rights to any benefits under the Plan will cease
upon the death of any Participant for whom retirement allowances have commenced.
Page 13 - SUPPLEMENTAL RETIREMENT BENEFIT PLAN FOR KEY EXECUTIVES
<PAGE> 18
ARTICLE VI
DISABILITY BENEFITS
-------------------
6.1 TOTAL AND PERMANENT DISABILITY DEFINED. Total and permanent
disability shall mean such disability as, after the expiration of the waiting
period provided by law, will entitle the Participant to receive disability
benefit payments in accordance with Title II of the United States Social
Security Act.
6.2 TERMINATION PRIOR TO TEN YEARS OF CREDITED SERVICE. A Participant
who terminates his employment with the Employer because of total and permanent
disability and who has completed less than ten (10) years of Credited Service at
such time shall not thereby be entitled to any benefits from the Plan.
6.3 TERMINATION AFTER TEN YEARS OF CREDITED SERVICE. A Participant who
terminates his employment with the Employer because of total and permanent
disability and who has completed ten (10) or more years of Credited Service
shall be subject to whichever of the following subsections shall be applicable:
(a) If he shall (after the applicable statutory waiting
period) be continuously disabled and entitled to Social Security
disability benefits until his attainment of age sixty-five (65), then
he shall receive a monthly retirement allowance from this Plan
commencing upon the first day of the month coincident with or next
following the attainment of his sixty-fifth (65th) birthday and payable
on the first day of each month thereafter for his remaining lifetime.
Such monthly retirement allowance shall be determined
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<PAGE> 19
in the same manner as for retirement at his Normal Retirement Date, except that:
(i) Credited Service shall be determined as if the
Participant had in fact continued in active employment until
his sixty-fifth (65th) birthday, and
(ii) Final Average Salary shall be determined as of
the date of his actual termination of employment due to
disability.
(b) If he shall (after the applicable statutory waiting
period) not be continually disabled and entitled to Social Security
disability benefits until his attainment of age sixty-five (65), he
shall not be entitled to a disability benefit from this Plan, but shall
be subject to the provisions of Section 6.4 hereof.
6.4 RECOVERY FROM DISABILITY PRIOR TO NORMAL RETIREMENT DATE. If a
Participant who became totally and permanently disabled thereafter recovers from
such disability prior to attaining age sixty-five (65) (as evidenced solely by
the fact that he is no longer eligible for Social Security disability benefits),
then his benefits from this Plan shall be determined as follows:
(a) If he returns to employment with the Employer upon such
recovery, then he shall not be entitled to any disability benefits in
accordance with this Article VI. For the purpose of determining his
entitlement to, and amount of, benefits under any other provision of
this
Page 15 - SUPPLEMENTAL RETIREMENT BENEFIT PLAN FOR KEY EXECUTIVES
<PAGE> 20
Plan, however, his period of Credited Service and Service shall
include the period during which he was totally and permanently
disabled.
(b) If he fails to return to employment with the Employer upon
such recovery, then he shall not be entitled to any disability benefits
in accordance with this Article VI. This shall not, however, deprive
him of the benefits if any, to which he is otherwise entitled under
this Plan based upon his age, Credited Service, Service and Final
Average Salary, as of his termination of employment due to disability.
ARTICLE VII
ADMINISTRATION
--------------
7.1 CONTRIBUTIONS BY PARTICIPANTS. No contributions by Participants
shall be required or permitted under this Plan.
7.2 CONTRIBUTIONS BY EMPLOYER.
(a) This Plan is intended to be an unfunded plan maintained
primarily to provide deferred compensation
(b) The Employer shall be responsible for the payment of all
benefits provided under the Plan. At its discretion, the Employer may
establish one or more trusts, with such trusts as the Employer may
approve for the purpose of providing for the payment of such benefits.
Such trust or trusts may be irrevocable, but the assets thereof shall
be subject to the claims of the Employer's creditors. To the extent any
benefits provided under the Plan are actually paid from any such trust,
the Employer shall
Page 16 - SUPPLEMENTAL RETIREMENT BENEFIT PLAN FOR KEY EXECUTIVES
<PAGE> 21
have no further obligation with respect thereto, but to the extent not
so paid, such benefits shall remain the obligations of, and shall be
paid by, the Employer. Employer's obligation under the Plan shall be
that of an unfunded and unsecured promise of Employer to pay money in
the future.
7.3 DESIGNATION AND DUTIES OF ADMINISTRATOR. The Board shall designate
the administrator of this Plan who shall administer this Plan and who shall
serve until the Board designates another administrator. All decisions of such
administrator with respect to the administration of this Plan shall be final and
binding upon the Employer, the Participants and all other parties hereto.
7.4 AMENDMENT. The Board shall have the right at any time, and from
time to time, to amend, in whole or in part, any or all of the provisions of
this Plan. However, no such amendment shall reduce or eliminate any benefit to
which the Participant would then be entitled to receive (based upon his age,
Credited Service, Service and Final Average Salary as of the date of such
amendment) as of the date of such amendment.
7.5 PLAN TERMINATION. The Board shall have the right at any time to
terminate this Plan. However, no such termination shall reduce or eliminate any
benefit to which the Participant would then be entitled to receive (based upon
his age, Credited Service, Service and Final Average Salary as of the date of
such termination) as of the date of such termination.
Page 17 - SUPPLEMENTAL RETIREMENT BENEFIT PLAN FOR KEY EXECUTIVES
<PAGE> 22
ARTICLE VIII
CLAIMS PROCEDURES
-----------------
8.1 CLAIM. The Committee shall establish rules and procedures to be
followed by Participants and Beneficiaries in (a) filing claims for benefits,
and (b) for furnishing and verifying proofs necessary to establish the right to
benefits in accordance with the Plan, consistent with the remainder of this
Article. Such rules and procedures shall require that claims and proofs be made
in writing and directed to the Committee.
8.2 REVIEW OF CLAIM. The Committee shall review all claims for
benefits. Upon receipt by the Committee of such a claim, it shall determine all
facts which are necessary to establish the right of the claimant to benefits
under the provisions of the Plan and the amount thereof as herein provided
within ninety (90) days of receipt of such claim. If prior to the expiration of
the initial ninety (90) day period, the Committee determines additional time is
needed to come to a determination on the claim, the Committee shall provide
written notices to the Participant, Beneficiary or other claimant of the need
for the extension, not to exceed a total of one hundred eighty (180) days from
the date the application was received.
8.3 NOTICE OF DENIAL OF CLAIM. In the event that any Participant,
Beneficiary or other claimant claims to be entitled to a benefit under the Plan,
and the Committee determines that such claim should be denied in whole or in
part, the Committee shall, in writing, notify such claimant that the claim has
been denied, in whole or in part, setting forth the specific reasons for such
denial. Such
Page 18 - SUPPLEMENTAL RETIREMENT BENEFIT PLAN FOR KEY EXECUTIVES
<PAGE> 23
notification shall be written in a manner reasonably expected to be
understood by such claimant and shall refer to the specific sections of the Plan
relied on, shall describe any additional material or information necessary for
the claimant to perfect the claim and an explanation of why such material or
information is necessary, and where appropriate, shall include an explanation of
how the claimant can obtain reconsideration of such denial.
8.4 RECONSIDERATION OF DENIED CLAIM.
(a) Within sixty (60) days after receipt of the notice of the
denial of a claim, such claimant or duly authorized representative may
request, by mailing or delivery of such written notice to the
Committee, a reconsideration by the Committee of the decision denying
the claim. If the claimant or duly authorized representative fails to
request such a reconsideration within such sixty (60) days period, it
shall be conclusively determined for all purposes of this Plan that the
denial of such claim by the Committee is correct. If such claimant or
duly authorized representative requests a reconsideration within such
sixty (60) day period, the claimant or duly authorized representative
shall have thirty (30) days after filing a request for reconsideration
to submit additional written material in support of the claim, review
pertinent documents, and submit issues and comments in writing.
(b) After such reconsideration request, the Committee shall
determine within sixty (60) days of receipt of the claimant's request
for
Page 19 - SUPPLEMENTAL RETIREMENT BENEFIT PLAN FOR KEY EXECUTIVES
<PAGE> 24
reconsideration whether such denial of the claim was correct and
shall notify such claimant in writing of its determination. The written
notice of decision shall be in writing and shall include specific
reasons for the decision, written in a manner calculated to be
understood by the claimant, as well as specific references to the
pertinent Plan provisions on which the decision is based. In the event
of special circumstances determined by the Committee, the time for the
Committee to make a decision may be extended by additional sixty (60)
days upon written notice to the claimant prior to the commencement of
the extension. If such determination is favorable to the claimant, it
shall be binding and conclusive. If such determination is adverse to
such claimant, it shall be binding and conclusive unless the claimant
or duly authorized representative notifies the Committee within ninety
(90) days after the mailing or delivery to the claimant by the
Committee of its determination that claimant intends to institute legal
proceedings challenging the determination of the Committee and actually
institutes such legal proceedings within one hundred eighty (180) days
after such mailing or delivery.
8.5 EMPLOYER TO SUPPLY INFORMATION. To enable the Committee to perform
its functions, the Employer shall supply full and timely information to the
Committee of all matters relating to the retirement, death or other cause for
termination of service of all Participants, and such other pertinent facts as
the Committee may require.
Page 20 - SUPPLEMENTAL RETIREMENT BENEFIT PLAN FOR KEY EXECUTIVES
<PAGE> 25
ARTICLE IX
MISCELLANEOUS
-------------
9.1 HEADINGS AND SUBHEADINGS. The headings and subheadings in the Plan
have been inserted for convenience of reference only and are to be ignored in
any construction of the provisions hereof.
9.2 GENDER AND NUMBER. Whenever any words are used herein in the
masculine gender they shall be construed as though they were also used in the
feminine gender in all cases where they would so apply, and whenever any words
are used herein in the singular form they shall be construed as though they were
also used in plural form in all cases where they would so apply.
9.3 CONSTRUCTION OF PLAN. This Plan shall be construed according to the
laws of the State of New York and all provisions hereof shall be administered
according to the laws of such State.
9.4 EMPLOYEE'S RIGHTS. Neither the establishment of this Plan, nor any
modification thereof, nor the payment of any benefits, shall be construed as
giving to an Employee or other person, any legal or equitable right against the
Employer, or any officer or Employee thereof, except as herein provided. Under
no circumstances shall the terms of employment of an Employee be modified or in
any way affected hereby.
9.5 VESTED INTEREST. No Plan Participant or other Employee shall have a
vested interest with respect to this Plan except as specifically provided
herein.
Page 21 - SUPPLEMENTAL RETIREMENT BENEFIT PLAN FOR KEY EXECUTIVES
<PAGE> 26
9.6 RECEIPT OR RELEASE. Any payment to an Employee, contingent
annuitant, beneficiary, or to their legal representatives, in accordance with
the provisions of the Plan, shall to the extent thereof be in full satisfaction
of all claims hereunder against the Employer, who may require such Employee,
contingent annuitant, beneficiary or legal representative, as a condition
precedent to such payment, to execute a receipt and release therefor in such
form as shall be determined by the Employer.
9.7 SPENDTHRIFT CLAUSE. Except insofar as may be contrary to any
applicable law, no payment of any benefit under the Plan shall be assignable and
no such payment or contribution shall be subject to the claims of any creditor.
9.8 FACILITY OF PAYMENTS. If any Employee, contingent annuitant or
beneficiary is a minor or is, in the judgment of the administrator, otherwise
legally incapable of personally receiving and giving a valid receipt for any
payment due him under the Plan, the administrator may, unless and until claim
shall have been made by a duly appointed guardian or legal representative of
such person, make such payment or any part thereof to such person's spouse,
child, parent, brother or sister, or other person deemed by the administrator to
have incurred expense for or assumed responsibility for the expense of such
person. Any payment so made shall be in complete discharge of any liability
under the Plan for such payment.
9.9 DELEGATION OF AUTHORITY BY THE EMPLOYER. Whenever the Employer,
under the terms of this Agreement, is permitted or required to do or perform any
Page 22 - SUPPLEMENTAL RETIREMENT BENEFIT PLAN FOR KEY EXECUTIVES
<PAGE> 27
act or matter or thing, it shall be done and performed by any officer thereunto
duly authorized by its Board of Directors.
IN WITNESS WHEREOF, KEYCORP has caused its corporate seal to be affixed
hereto and these presents to be executed by its duly authorized corporate
officers, this ____ day of _____________, 199_, to be effective as of July 1,
1990.
(Seal) KEYCORP
ATTEST
By:
- -------------------------------- ------------------------------
Secretary
IN WITNESS WHEREOF, KEYCORP has caused its corporate seal to be affixed
hereto and these presents to be executed by its duly authorized corporate
officers, this ____ day of ___________, 1990, to be effective as of July 1,
1990.
(Seal) KEYCORP
ATTEST
By:
- -------------------------------- ------------------------------
Secretary President
Page 23 - SUPPLEMENTAL RETIREMENT BENEFIT PLAN FOR KEY EXECUTIVES
<PAGE> 28
APPENDIX A
Special Provisions Applicable to Employees of Key Pacific Bancorporation and
its Subsidiaries.
1. Service and Credited Service (Plan Reference: Section I).
---------------------------------------------------------
For the purpose of determining the benefit payable to any Participant
listed below, the Service and Credit Service of such a Participant
shall be determined as if the Employer of each such Participant had
been an Employer under the Pension Plan throughout the period that the
Participant was in the employ of such Employer.
Thaddeus R. Winnowski
William H. Stevens
<PAGE> 29
APPENDIX B
Special Provisions Applicable to Employees of National Commercial Bank and Trust
Company.
1. Normal Retirement (Plan Reference: Section 3.01).
-------------------------------------------------
The Normal Retirement Date of Participants who were members of the
Retirement System of the national Commercial Bank and Trust Company on
January 1, 1951, shall be the first day of the month coinciding with or
next following the date that the Participant attains the age of sixty
(60).
<PAGE> 30
APPENDIX C
Special Provisions Applicable to Hans F. Horjo.
1. Credited Service (Plan Reference: Section 1.02).
------------------------------------------------
For purposes of determining Mr. Horjo's Credited Service under the
Plan, Mr. Horjo will be deemed to have commenced employment on July 1,
1976.
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.27
<SEQUENCE>15
<DESCRIPTION>EXHIBIT 10.27
<TEXT>
<PAGE> 1
Exhibit 10.27
KEYCORP
UMBRELLA TRUST(TM) FOR EXECUTIVES
JULY 1, 1990
KeyCorp
One KeyCorp Plaza
P.O. Box 88
Albany, New York 12201-0088 Company
NBD Bank, N.A.
611 Woodward Avenue
Detroit, Michigan 48226 Trustee
<PAGE> 2
TABLE OF CONTENTS
PAGE
----
PAGE 2 - UMBRELLA TRUST(TM) FOR EXECUTIVES
<PAGE> 3
INDEX OF TERMS
TERMS SECTION PAGE
PAGE 3 - UMBRELLA TRUST(TM) FOR EXECUTIVES
<PAGE> 4
KEYCORP
UMBRELLA TRUST(TM) FOR EXECUTIVES
This Trust Agreement is made and entered into by and between KeyCorp, a
New York corporation (the "Company"), and NBD Bank, N.A., a Michigan banking
corporation (the "Trustee").
The Company hereby establishes with the Trustee a trust to hold all
monies and other assets, together with the income thereon, as shall be paid or
transferred to it hereunder in accordance with the terms and conditions of this
Trust Agreement. The Trustee hereby accepts the trust established under this
Trust Agreement and agrees to hold, IN TRUST, all monies and other assets
transferred to it hereunder for the uses and purposes and upon the terms and
conditions set forth herein, and the Trustee further agrees to discharge and
perform fully and faithfully all of the duties and obligations imposed upon it
under this Trust Agreement.
PREAMBLE
--------
The Company has adopted the following plans (the "Plan") which shall be
subject to this trust:
Employment Contracts
Severance Plans
Supplemental Retirement Benefits Plan
Supplemental Survivor Benefit Plan
Executive Deferred Compensation Plan
If only one Plan is subject to this trust at any time, references in this Trust
Agreement to the Plans shall refer to such Plan.
The Plans are administered by an administrative committee (the
"Committee") appointed by the Company. If the Plans are administered by more
than one Committee at any time, reference in this Trust Agreement to the
Committee which relate to a particular Plan shall refer to the Committee which
administers that Plan and, if the reference does not relate to a particular
Plan, shall refer to all of such Committees. All references in this Trust
Agreement to the Committee shall refer to the administrative committee(s) which
administers the Plan(s), unless
PAGE 1 - UMBRELLA TRUST(TM) FOR EXECUTIVES
<PAGE> 5
the Company appoints a separate administrative committee to administer this
Trust Agreement. If the Company appoints a separate administrative committee to
administer this Trust Agreement, references in this Trust Agreement to the
Committee shall refer to such administrative committee which is appointed to
administer this Trust Agreement, unless the context clearly indicates otherwise.
The Plan participants who are covered by this Trust Agreement
("Participants") shall be all persons who are Plan participants prior to a
Special Circumstance, unless the Company specifically designates only specified
individuals or groups of Plan participants as Participants covered by this Trust
Agreement. After a person becomes a Participant covered by this Trust Agreement,
such person will continue to be a Participant at all times thereafter (including
after retirement or other termination of service) until all Plan benefits
payable to such Participant have been paid, the Participant ceases to be
entitled to any Plan benefits, or the Participant's death, whichever occurs
first. The term "Participants" shall not include any beneficiaries of
Participants.
At any time prior to a Special Circumstances, the Company may, by
written notice to the Trustee, cause additional plans to become Plans subject to
this Trust Agreement or cause additional Plan participants to become
Participants covered by this Trust Agreement. Upon and after a Special
Circumstance, the Company shall not add any additional plans or Plan
participants to this Trust Agreement.
The Company shall provide the Trustee with certified copies of the
following items: (i) the Plan documents; (ii) all Plan amendments promptly upon
their adoption; and (iii) lists and specimen signatures of the members of the
Committee(s) which administer the Plan(s) and this Trust Agreement and any other
Company representatives authorized to take action in regard to the
administration of the Plan(s) and this trust, including any changes in the
members of such Committee(s) and of such other representatives promptly
following any such change. The Company shall also provide the Trustee at least
annually with a list of all Participants in each Plan who are covered by this
Trust Agreement.
The purpose of this trust is to give Participants greater security by
placing assets in trust for use only to pay Plan benefits to Participants or, if
the Company becomes insolvent, to pay creditors. The Company shall continue to
be liable to Participants to make all payments required
PAGE 2 - UMBRELLA TRUST(TM) FOR EXECUTIVES
<PAGE> 6
under the terms of the Plans to the extent such payments are not made from this
trust. Distributions made from this trust to Participants or their beneficiaries
shall, to the extent of such distributions, satisfy the Company's obligations to
pay benefits to Participants and their beneficiaries under the Plans.
The Company and the Trustee agree that the trust hereby created has
been established to pay obligations of the Company pursuant to the Plans and is
subject to the rights of general creditors of the Company, and accordingly is a
grantor trust under the provisions of Sections 671 through 677 of the Internal
Revenue Code of 1986, as amended (the "Code"). The Company hereby agrees to
report all items of income, deductions and credits of the trust on its own
income tax returns; and the Company shall have no right to any distributions
from the trust or any claim against the trust for funds necessary to pay any
income taxes which the Company is required to pay on account of reporting the
income of the trust on its income tax returns. No contribution to or income of
the trust is intended to be taxable to Participants until benefits are
distributed to them.
The Plans are intended to be "unfunded" and maintained "primarily for
the purpose of providing deferred compensation for a select group of management
or highly compensated employees" for purposes of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA") and as such are intended not to be
covered by Parts 2 through 4 of Subtitle B of Title I of ERISA (relating to
participation and vesting, funding and fiduciary responsibility). The existence
of this trust is not intended to alter this characterization of the Plans.
ARTICLE I
EFFECTIVE DATE; DURATION
------------------------
1.01 Effective Date and Trust Year
-----------------------------
This trust shall become effective when the Trust Agreement has
been executed by the Company and the Trustee and the Company has made a
contribution to the trust. For tax purposes the trust year shall be the calendar
year. For financial reporting purposes the trust year shall coincide with the
Company's fiscal year. The Company shall report any change in its fiscal year
to the Trustee.
1.02 Duration
--------
PAGE 3 - UMBRELLA TRUST(TM) FOR EXECUTIVES
<PAGE> 7
1.02-1 This trust shall continue in effect until all assets of
the trust fund are exhausted through distribution of benefits to Participants,
payment to creditors in the event of insolvency, payment of fees and expenses of
the Trustee, and return of remaining funds to the Company pursuant to 1.02-2.
Notwithstanding the foregoing, this trust shall terminate on the day before
twenty-one years after the death of the last survivor of all present or future
Participants who are now living and those persons now living who are designated
as beneficiaries of any such Participants in accordance with the terms of any of
the Plans.
1.02-2 Except as otherwise provided in 1.02 and 1.03, the
trust shall be irrevocable until all benefits payable under the Plans to
Participants who are covered by this Trust Agreement are paid. The Trustee
shall then return to the Company any assets remaining in the trust.
1.02-3 If the existence of this trust or any Subtrust is held
to be ERISA Funding or Tax Funding by a federal court and appeals from that
holding are no longer timely or have been exhausted, this trust or such Subtrust
shall terminate. The Board of Directors of the Company (the "Board") may also
terminate this trust or any Subtrust if it determines, that either (i) judicial
authority or the opinion of the U.S. Department of Labor, Treasury Department or
Internal Revenue Services (as expressed in proposed or final regulations,
advisory opinions or rulings, or similar administrative announcements) creates a
significant risk that the trust or any Subtrust will be held to be ERISA Funding
or Tax funding or (ii) ERISA or the Code requires the trust or any Subtrust to
be amended in a way that creates a significant risk that the trust or such
Subtrust will be held to be ERISA Funding or Tax Funding, and failure to so
amend the trust or such Subtrust could subject the Company to material
penalties. Upon any such termination, the assets of each terminated Subtrust
remaining after payment of the Trustee's fees and expenses shall be distributed
as follows:
(a) Such assets shall be transferred to a new trust
established by the Company which is not deemed to be ERISA
Funding or Tax Funding, but which is similar in all other
respects to this trust, if the Company determines that it is
possible to establish such a trust.
(b) If the Company determines that it is not possible
to establish the trust in (a) above, then the assets shall be
distributed to the Company if the
PAGE 4 - UMBRELLA TRUST(TM) FOR EXECUTIVES
<PAGE> 8
Written Consent of Participants, as defined in 1.02-5, is
obtained for such distribution.
(c) If the Company determines that it is not possible
to establish the trust in (a) above and the Written Consent of
Participants is not obtained to distribute the assets to the
Company, then the assets of the terminated Subtrust shall be
allocated in proportion to (i) the vested accrued benefits and
(ii) then, if any assets remain, the unvested (if any) accrued
benefits of Participants under the applicable Plan and shall
be distributed to such Participants in lump sums. Any assets
remaining shall be distributed to other Subtrusts or the
Company in accordance with 2.04.
Notwithstanding the foregoing, the Trustee shall distribute
Plan benefits to a Participant to the extent that a federal court or IRS has
held that the interest of the Participant in this trust causes such Plan
benefits to be includible for federal income tax purposes in the gross income of
the Participant prior to actual payment of such Plan benefits to the Participant
and appeals from that holding are no longer timely or have been exhausted. The
Trustee may also distribute Plan benefits to a Participant, upon direction of
the Committee, if the Trustee reasonably believes that there is a significant
risk that the Participant's interest in the trust fund will be held to be ERISA
Funding or Tax Funding with respect to such Participant or that such Participant
will be determined not to be a "management or highly compensated employee" for
purposes of ERISA. The provisions of this paragraph shall also apply to any
beneficiary of a Participant.
1.02-4 This trust is "Tax Funding" if it causes the interest
of a Participant in this trust to be includible for federal income tax purposes
in the gross income of the Participant prior to actual payment of Plan benefits
to the Participant.
This trust is "ERISA Funding" if it prevents any of the Plans
from meeting the "unfunded" criterion of the exceptions to application of the
provisions of Parts 2 through 4 of Subtitle B of Title I of ERISA for plans that
are unfunded and maintained primarily for the purpose of providing deferred
compensation for a select group of management or highly compensated employees.
PAGE 5 - UMBRELLA TRUST(TM) FOR EXECUTIVES
<PAGE> 9
1.02-5 "Written Consent of Participants" means, for the
purposes of this Trust Agreement, consent in writing by Participants who (i) are
a majority in number and (ii) have more than fifty percent (50%) in value of the
accrued benefits, of the Participants in each Subtrust under this Trust
Agreement on the date of such consent.
1.03 Irrevocability
--------------
1.03-1 Subject to 1.02, this trust shall become irrevocable
upon the issuance by the Internal Revenue Service of a private letter ruling
establishing that its existence and ownership of assets do not cause the trust
to be deemed to be Tax Funding. If such a ruling is denied or the Company is
informed that a ruling will not be forthcoming, the Company may revoke the trust
and take possession of all assets held by the Trustee for the trust. This trust
shall also become irrevocable if such a ruling is not requested by the Company
within ninety (90) days after the date of establishing this trust.
1.03-2 Notwithstanding the provisions of 1.03-1, if a Special
Circumstance occurs, the Company may declare the trust to be irrevocable.
1.04 Special Circumstance
--------------------
1.04-1 Upon the occurrence of a Special Circumstance described
in 1.04-2, the trust assets shall be held for Participants who had accrued
benefits under the Plans before the Special Circumstance occurred, including
benefits accrued for such Participants after the Special Circumstance.
1.04-2 A "Special Circumstance" shall mean a Change in Control
(as defined in 1.04-3) or a Default (as defined in 1.04-6).
1.04-3 A "Change in Control" shall mean a Change in Control of
a nature that would be required to be reported (assuming such event has not been
"previously reported") in response to Item 1(a) of the current report on Form
8-X, as in effect on the date hereof, pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act") or any
successor thereto; provided that, without limitation, such a Change in Control
shall be deemed to have occurred at such time as:
(a) Any person is or becomes the "beneficial owner"
(as defined in Rule 13d-3 under the Exchange Act), directly or
indirectly, of twenty five percent
PAGE 6 - UMBRELLA TRUST(TM) FOR EXECUTIVES
<PAGE> 10
(25%) or more of the combined voting power of the Company's
Voting Securities;
(b) Individuals who constitute the Board of the
Company on the date hereof (the "Incumbent Board") cease for
any reason to constitute at least a majority of the Board of
the Company or the Board of any corporation with which the
Company merges, provided that any person becoming a director
subsequent to the date hereof whose election, or nomination
for election by the Company's shareholders, was approved by a
vote of at least three quarters (3/4) of the directors
comprising the Incumbent Board (either by a specific vote or
by approval of the proxy statement of the Company in which
such person is named as a nominee for director, without
objection to such nomination) shall be, for purposes of this
clause (b), considered as though such person were a member of
the Incumbent Board;
(c) If any person or entity acquires an interest
which is determined by the Federal Reserve Board to constitute
a controlling interest in the Company;
(d) The sale by the Company of more than fifty
percent (50%) of the book value of its assets to a single
purchaser or to a group of affiliated purchasers; or
(e) The merger or consolidation of the Company in a
transaction in which the shareholders of the Company receive
less than fifty percent (50%) of the outstanding voting shares
of the continuing corporation. Notwithstanding anything in the
foregoing to the contrary, no Change in Control shall be
deemed to have occurred by virtue of any transaction which
results in a Participant, or group of Participants, acquiring,
directly or indirectly, twenty five percent (25%) or more of
the combined voting power of the Company's Voting Securities.
1.04-4 For purposes of this Trust Agreement, a Change in
Control shall be deemed to have occurred when the Trustee makes a determination
to that effect on its own initiative or upon receipt by the Trustee of written
notice to that effect from the Company. The Chief Executive Officer of the
Company or the Board shall furnish written notice to the Trustee when a Change
in Control occurs under 1.04-3.
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<PAGE> 11
1.04-5 "Voting Securities" shall mean any securities of the
Company which vote generally in the election of directors.
1.04-6 A "Default" shall mean a failure by the Company to
contribute, within thirty (30) days of receipt of written notice from the
Trustee, any of the following amounts:
(a) The full amount of any insufficiency in assets of
any Subtrust that is required to pay any premiums or loan
interest payments on insurance contracts which are held in the
Subtrust;
(b) The full amount of any insufficiency in assets of
any Subtrust that is required to pay any Plan benefit that is
payable upon a direction from the Committee pursuant to 3.02-3
or upon resolution of a disputed claim pursuant to 3.03-2; or
(c) Any contribution which is then required under
2.01. If, after the occurrence of a Default, the Company at any time cures such
Default by contributing to the trust all amounts which are then required under
subparagraphs (a), (b) and (c) above, it shall then cease to be deemed that a
Default has occurred or that a Special Circumstance has occurred by reason of
such Default.
ARTICLE II
TRUST FUND AND FUNDING POLICY
-----------------------------
2.01 Contributions
-------------
2.01-1 The Company shall contribute to the trust such amounts
as are required to purchase or hold insurance contracts in the trust and to pay
premiums and loan interest payments thereon, all as described in 2.02-1. The
Company shall also contribute to the trust such amounts as are necessary to
enable the Trustee to make all Plan benefit payments to Participants when due,
unless the Company makes such payments directly, whenever the Trustee advises
the Company that the assets of the trust or Subtrust, other than insurance
contracts or amounts needed to pay future premiums or loan interest payments on
insurance contracts, are insufficient to make such payments. In its discretion,
the Company may contribute to the trust such additional amounts or assets as the
Committee may reasonably decide are necessary to provide security for all Plan
benefits payable to Participants covered by this trust.
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<PAGE> 12
2.01-2 Whenever the Company makes a contribution to the trust,
the Company shall designate the Plan(s) and Subtrust(s) to which such
contribution (or designated portions thereof) shall be allocated. The Company
may also make contributions to a special reserve for payment of future fees and
expenses of the Trustee and future trust fees and expenses for legal and
administrative proceedings. The Company shall designate a separate Subtrust to
receive such contributions, which shall be distinct from the other Subtrust(s)
established for the Plan(s).
A trust funding deposit for payment of future insurance
premiums ("Trust Funding Deposit") shall be established in each Subtrust which
holds insurance contracts. The Company shall designate the portion of each
contribution which shall be allocated to the Trust Funding Deposit for a
particular Subtrust. The Trust Funding Deposit for a Subtrust shall normally be
used only to pay premiums on insurance contracts which are held in that
Subtrust. However, if necessary, the Trust Funding Deposit may be used to pay
Plan benefits which are payable to Participants from the Subtrust in the sole
discretion of the Trustee.
2.01-3 The Company shall, immediately upon the occurrence of a
Special Circumstance (as defined in 1.04-2) or a Potential Change in Control (as
defined in 2.01-7), and at least annually following a Special Circumstance,
contribute to the trust the sum of the following:
(a) The present value of the remaining premiums and
the interest on any policy loans on insurance contracts held
in the trust to the extent the Trust Funding Deposit is
determined to be inadequate to pay such remaining premiums and
policy loan interest.
(b) The amount by which the present value of all
benefits (vested and unvested) payable under the Plans on a
pre-tax basis to Participants covered by this trust exceeds
the value of all trust assets. Each Participant's benefit
under any Plan for purposes of calculating present value shall
be the highest benefit the Participant would have accrued
under the Plan within the twenty four (24) months following
such event, assuming that the Participant's service continues
for twenty four (24) months at the same rate of compensation,
that the Participant continues to make future deferrals under
deferred compensation plans in accordance with his prior
elections, and that the Participant is terminated at a time
when he is entitled
PAGE 9- UMBRELLA TRUST(TM) FOR EXECUTIVES
<PAGE> 13
to receive any benefit enhancement provided by the Plan upon a
Change in Control. Any benefit enhancement or right with
respect to the Plans which is provided under employment or
severance agreements of Participants shall be taken into
account in making the foregoing calculation.
(c) The present value of a reasonable estimate
provided by the Trustee of its fees and expenses due over the
remaining duration of the trust. Unless the Trustee estimates
a greater amount, such amount shall be presumed to be equal to
two percent (2%) of the present value of all accrued benefits
(vested and unvested) payable under the Plans on a pre-tax
basis to Participants covered by this trust.
(d) The present value of a reasonable estimate
provided by the Trustee of the anticipated fees and expenses
for the purpose of commencing or defending lawsuits or legal
or administrative proceedings over the remaining duration of
the trust. Unless the Trustee estimates a greater amount, such
amount shall be presumed to be equal to two percent (2%) of
the present value of all accrued benefits (vested and
unvested) payable under the Plans on a pre-tax basis to
Participants covered by this trust.
2.01-4 The calculations required under 2.01-3 shall be based
on the terms of the Plans and the actuarial assumptions and methodology set
forth in Appendix A attached hereto. Before a Special Circumstance, Appendix A
may be revised by the Committee from time to time. After a Special Circumstance,
Appendix A may be revised only with the Written Consent of Participants.
2.01-5 Whenever the Company makes a contribution to the trust
pursuant to 2.01-3, it shall furnish the Trustee with a written statement
setting forth the computation of all required amounts contributed under
subparagraphs (a), (b), (c) and (d) of 2.01-3.
Whenever a Special Circumstance occurs or the Company makes a
contribution pursuant to 2.01-3, the Company shall deliver to the Trustee,
contemporaneously with or immediately prior to such event, a schedule (the
"Payment Schedule") indicating the amounts payable under each Plan in respect of
each Participant, or providing a formula or instructions acceptable to the
Trustee for determining the amounts so payable, the form in which such
PAGE 10 UMBRELLA TRUST(TM) FOR EXECUTIVES
<PAGE> 14
amounts are to be paid (as provided for or available under the Plans) and the
time of commencement for payment of such amounts. The Payment Schedule shall
include any other necessary instructions with respect to Plan benefits
(including legal expenses) payable under the Plans and any conditions with
respect to any Participant's entitlement to, and the Company's obligation to
provide, such benefits, and such instructions may be revised from time to time
to the extent so provided under the Plans or this Trust Agreement.
A modified Payment Schedule shall be delivered by the Company
to the Trustee at each time that (i) additional amounts are required to be paid
by the Company to the Trustee pursuant to 2.01-3, (ii) Excess Assets are
returned to the Company pursuant to 2.04, and (iii) upon the occurrence of any
event requiring a modification of the Payment Schedule. The Company shall also
furnish a Payment Schedule or modified Payment Schedule for any or all Plan(s)
upon request by the Trustee at any other time. Whenever the Company is required
to deliver to the Trustee a Payment Schedule or a modified Payment Schedule, the
Company shall also deliver at the same time to each Participant the respective
portion of the Payment Schedule or modified Payment Schedule that sets forth the
amount payable to that Participant.
2.01-6 Any contribution to the trust which is made by the
Company under 2.01-3 on account of a Potential Change in Control shall be
returned to the Company following one year after delivery of such contribution
to the Trustee unless a Change in Control shall have occurred during such
one-year period, if the Company requests such return within sixty (60) days
after such one-year period. If no such request is made within this 60-day
period, the contribution shall become a permanent part of the trust fund. The
one-year period shall recommence in the event of and upon the date of any
subsequent Potential Change in Control.
2.01-7 A "Potential Change in Control" shall be deemed to
occur if:
(a) Any person, as defined in Section 13(d)(3) of the
Act, other than a trustee or other fiduciary holding
securities under an employee benefit plan of the Company
delivers to the Company a statement containing the information
required by Schedule 13-D under the Act, or any amendment to
any such statement, that shows that such person has acquired,
directly or indirectly, the beneficial ownership of (i) more
than twenty four and nine tenths percent (24.9%) of any class
of equity security of the Company entitled to vote as single
class in
PAGE 11 - UMBRELLA TRUST(TM) FOR EXECUTIVES
<PAGE> 15
the election or removal from office of directors, or
(ii) more than twenty four and nine tenths percent (24.9%) of
the voting power of any group of classes of equity securities
of the Company entitled to vote as a single class in the
election or removal from office of directors;
(b) The Company becomes aware that preliminary or
definitive copies of a proxy statement and information
statement or other information have been filed with the
Securities and Exchange Commission pursuant to Rule 14a-6,
Rule 14a-11, Rule 14c-5, or Rule 14f-1 under the Act relating
to a Potential Change in Control of the Company;
(c) Any person delivers to the Company pursuant to
Rule 14d-3 under the Act a Tender Offer Statement relating to
Voting Securities of the Company;
(d) Any person (other than the Company) publicly
announces an intention to take actions which if consummated
would constitute a Change in Control;
(e) The Company enters into an agreement or
arrangement, the consummation of which would result in the
occurrence of a Change in Control;
(f) The Board approves a proposal, or the Company
enters into an agreement, which if consummated would
constitute a Change in Control; or
(g) The Board adopts a resolution to the effect that,
for purposes of this Trust Agreement, a Potential Change in
Control has occurred.
Notwithstanding the foregoing, a Potential Change in Control shall not be deemed
to occur as a result of any event described in (a) through (f) above, if
directors who were a majority of the members of the Board prior to such event
determine that the event shall not constitute a Potential Change in Control and
furnish written notice to the Trustee of such determination.
2.01-8 For purposes of this trust, a Potential Change in
Control shall be deemed to have occurred when the Trustee makes a determination
to that effect on its own initiative or upon receipt by the Trustee of written
notice to that effect from the Company. The Chief Executive Officer of the
Company or the Board shall furnish written notice to the Trustee when a
Potential Change in Control occurs under 2.01-7.
PAGE 12 - UMBRELLA TRUST(TM) FOR EXECUTIVES
<PAGE> 16
2.01-9 The Trustee shall accept the contributions made by the
Company and hold them as a trust fund for the payment of benefits under the
Plans. The Trustee shall not be responsible for determining the required amount
of contributions or for collecting any contribution not voluntarily paid, nor
shall the Trustee be responsible for the adequacy of the trust fund to meet and
discharge all liabilities under the Plans. Contributions may be in cash or in
other assets specified in 2.02.
2.02 Investments and Valuation
-------------------------
2.02-1 The trust fund shall be invested primarily in insurance
contracts ("Contracts"). Such Contracts may be purchased by the Company and
transferred to the Trustee as in-kind contributions or may be purchased by the
Trustee with the proceeds of cash contributions (or may be purchased upon
direction by the Committee pursuant to 2.02-2 or an Investment Manager pursuant
to 2.02-4). The Company's contributions to the trust shall include sufficient
cash to make projected premium payments on such Contracts and payments of
interest due on loans secured by the cash value of such Contracts, unless the
Company makes these payments directly. The Trustee shall have the power to
exercise all rights, privileges, options and elections granted by or permitted
under any Contract or under the rules of the insurance company issuing the
Contract ("Insurer"), including the right to obtain policy loans against the
cash value of the Contract. Prior to a Special Circumstance, the exercise by the
Trustee of any incidents of ownership under any Contract shall be subject to the
direction of the Committee. The Committee may from time to time direct the
Trustee in writing as to the designation of the beneficiary of a Participant
under a Contract for any part of the death benefits payable to such beneficiary
thereunder, and the Trustee shall file such designation with the Insurer.
Notwithstanding anything contained herein to the contrary,
neither the Company nor the Trustee shall be liable for the refusal of any
Insurer to issue or change any Contract or Contracts or to take any other action
requested by the Trustee; nor for the form, genuineness, validity, sufficiency
or effect of any Contract or Contracts held in the trust; nor for the act of any
person or persons that may render any such Contract or Contracts null and void;
nor for failure of any Insurer to pay the proceeds of any such Contract or
Contracts as and when the same shall become due and payable; nor for any delay
in payment resulting from any provision contained in any such Contract or
Contracts; nor for the fact that for any reason whatsoever (other than its
PAGE 13 UMBRELLA TRUST(TM) FOR EXECUTIVES
<PAGE> 17
own negligence or willful misconduct) any Contracts shall lapse or otherwise
become uncollectible.
2.02-2 Prior to a Special Circumstance, the Trustee shall
invest the trust fund in accordance with written directions by the Committee,
including directions for exercising rights, privileges, options and elections
pertaining to Contracts and for borrowing from Contracts or other borrowing by
the Trustee. The Trustee shall act only as an administrative agent in carrying
out directed investment transactions and shall not be responsible for the
investment decision. If a directed investment transaction violates any duty to
diversify, to maintain liquidity or to meet any other investment standard under
this trust or applicable law, the entire responsibility shall rest upon the
Company. The Trustee shall be fully protected in acting upon or complying with
any investment objectives, guidelines, restrictions or directions provided in
accordance with this paragraph.
After a Special Circumstance the Committee shall no longer be
entitled to direct the Trustee with respect to the investment of the trust fund,
unless the Written Consent of Participants is obtained for the Committee to
continue to have this right pursuant to 2.02-2. If such Written Consent of
Participants is not obtained, the trust fund shall be invested by the Trustee
pursuant to 2.02-3 or by an Investment Manager pursuant to 2.02-4. The Trustee
or Investment Manager shall have the right to invest the Trust Fund primarily in
insurance contracts pursuant to 2.02-1.
Notwithstanding the foregoing, no investments shall be made at
any time in any securities, instruments, accounts or real property of the
Company, and the Trustee may not loan trust fund assets to the Company, or
permit the Company to pledge trust fund assets as collateral for loans to the
Company.
The Committee may not direct the Trustee to make any
investments, and the Company may not make any contributions to the t