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Exhibit 10.33
AMENDED AND RESTATED EMPLOYMENT AGREEMENT
BETWEEN KEYCORP
AND XXXXXX X. XXXXXXXXX
THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT (this
"Agreement") is made at Cleveland, Ohio, as of November 21, 1996, between
KEYCORP, an Ohio corporation ("Key"), and XXXXXX X. XXXXXXXXX, 0000 Xxxxxxxxx
Xxxx, Xxxxx Xxxxx, Xxxx 00000 ("Xxxxxxxxx").
W I T N E S S E T H:
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WHEREAS, Key and Xxxxxxxxx are parties to an employment
agreement, originally made December 5, 1990, amended and restated in its
entirety as of October 1, 1993 and again as of December 20, 1993, and
subsequently further amended as of May 18, 1995, pursuant to which Xxxxxxxxx is
now serving as Key's Chairman of the Board, President, and Chief Executive
Officer; and
WHEREAS, Key and Xxxxxxxxx now desire to amend and restate
the employment agreement in its entirety;
NOW, THEREFORE, Key and Xxxxxxxxx, in consideration of the
promises and mutual covenants herein contained, amend and restate the employment
agreement originally entered into between them as of December 5, 1990 and
previously amended and restated in its entirety as of October 1, 1993 and again
as of December 20, 1993, and subsequently further amended as of May 18, 1995,
and agree as follows:
1. Definitions.
1.1 Accounting Firm. The term "Accounting Firm" means the
independent auditors of Key for the fiscal year preceding the year in which
the earlier of (i) the Termination Date, or (ii) the year, if any, in which
occurred the first Change of Control occurring after the Effective Time,
and such firm's successor or successors; provided, however, if such firm is
unable or unwilling to serve and perform in the capacity contemplated by
this Agreement, Key shall select another national accounting firm of
recognized standing to serve and perform in that capacity under this
Agreement, except that such other accounting firm shall not be the then
independent auditors for Key or any of its affiliates (as defined in Rule
12b-2 promulgated under the Securities Exchange Act of 1934, as amended
(the "1934 Act")).
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1.2 Aggregate Incentive Compensation Award. The term
"Aggregate Incentive Compensation Award" with respect to Xxxxxxxxx for any
year shall mean the aggregate annual incentive compensation awards (whether
paid in cash, deferred, or a combination of both) payable to Xxxxxxxxx
under both the Short Term Incentive Compensation Plan and the Long Term
Incentive Compensation Plan for that year. For these purposes, an incentive
compensation award payable to Xxxxxxxxx under the Long Term Incentive
Compensation Plan with respect to any multi-year period will be deemed to
be "for" the last year of that multi-year period. Thus, for example, any
incentive compensation award payable to Xxxxxxxxx under the Long Term
Incentive Compensation Plan with respect to the three year period comprised
of 1996, 1997, and 1998 will be deemed to be "for" 1998 (without regard to
the time of payment), the entire award under that plan for that period will
be part of the Aggregate Incentive Compensation Award for 1998, and no part
of the award under that plan for that period will be part of the Aggregate
Incentive Compensation Award for any year other than 1998.
1.3 Average Annual Incentive Compensation. The term "Average
Annual Incentive Compensation" shall mean the greater of:
(a) The average of the two highest Aggregate Incentive
Compensation Awards payable to Xxxxxxxxx for any of the years during
the five-year period ended on the December 31 immediately preceding
the Termination Date; or
(b) The average of the two highest Aggregate Incentive
Compensation Awards payable to Xxxxxxxxx for any of the years during
the five-year period ended on the December 31 immediately preceding
the first Change of Control, if any, occurring after the Effective
Time.
1.4 Cause (After a Change of Control). Key will have "Cause"
to terminate Xxxxxxxxx after a Change of Control has occurred only if:
(a) Xxxxxxxxx is convicted of a felony;
(b) Xxxxxxxxx commits an act or series of acts of dishonesty
in the course of his employment which are materially inimical to the
best interests of Key or a Subsidiary and which constitutes the
commission of a felony, all as determined in good faith by the vote of
three quarters of the entire authorized number of members of the Board
of Directors of Key, which determination is confirmed by a panel of
three arbitrators appointed and acting in accordance with the rules of
the American Arbitration Association for the purpose of reviewing that
determination; or
(c) Xxxxxxxxx continues to violate his obligation under
Section 14.1 not to engage in Competitive Activities after the Board
of Directors has advised him in writing to cease those activities and
that violation is material.
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1.5 Cause (Before a Change of Control). Key will have "Cause"
to terminate Xxxxxxxxx before a Change of Control if:
(a) Xxxxxxxxx commits a felony;
(b) Xxxxxxxxx commits an act or series of acts of dishonesty
in the course of his employment which are materially inimical to the
best interests of Key or a Subsidiary as determined by the vote of
three quarters of the entire authorized number of members of the Board
of Directors of Key and, if the act or acts are capable of being
cured, Xxxxxxxxx fails to cure or take all reasonable steps to cure
within 30 days of notice from the Board of Directors to Xxxxxxxxx;
(c) Xxxxxxxxx continues to violate his obligation under
Section 14.1 not to engage in Competitive Activities after the Board
of Directors has advised him in writing to cease those activities; or
(d) Other than for disability, Xxxxxxxxx totally abandons and
completely fails to attempt to perform his duties and responsibilities
as specified from time to time by the Board of Directors of Key for 90
consecutive days after written notice from the Board of Directors.
1.6 Change of Control. A "Change of Control" shall be deemed
to have occurred if, at any time during the Scheduled Term, there is a
Change of Control under any of clauses (a), (b), (c), or (d) below. For
these purposes, Key will be deemed to have become a subsidiary of another
corporation if any other corporation (which term shall, for all purposes of
this Section 1.6, 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 Key or any successor to
Key.
(a) A Change of Control will have occurred under this clause
(a) if Key is a party to a transaction pursuant to which Key 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 Key becomes a subsidiary
in the transaction) of the ultimate parent of Key represent or
were issued in exchange for voting securities of Key outstanding
immediately prior to the transaction, or
(ii) immediately after giving effect to that transaction,
individuals who were directors of Key on the day before the first
public announcement of (x) the pendency of the transaction or (y)
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
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surviving or resulting corporation or (if Key becomes a subsidiary
in the transaction) of the ultimate parent of Key.
(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 Key or any person (as
the term "person" is used in Section 13(d) and Section 14(d)(2) of the
0000 Xxx) is or becomes the beneficial owner of 35% or more of the
outstanding voting stock of Key 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 Key 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 Key Board of Directors any person or entity
makes a public announcement of a bona fide intention (A) to engage
in a transaction with Key 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 0000 Xxx) proxies in
connection with a proposal that is not approved or recommended by
the Key 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 Key (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 Key (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 Key's
shareholders, of each new director was approved by a vote of at least
two-thirds of the Incumbent Directors in office at the time of the election
or nomination for election of such new director, and (B) prior to the time
that the Incumbent Directors no longer constitute a majority of the Board
of Directors, the Incumbent Directors then in office, by a vote of at least
75% of their number, reasonably determine in good faith that the change in
Board membership that has occurred before the date of that determination
and that is anticipated to thereafter occur within the balance of the 24
month period to cause the Incumbent Directors to no longer be a majority of
the Board of Directors was not caused by or attributable to, in whole or in
any significant part, directly or indirectly, proximately or remotely, any
event under subclause (i) or (ii) of this clause (c).
For purposes of this clause (c), the term "Change Event" shall mean any of
the events described in the following subclauses (x), (y), or (z) of this
clause (c):
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(x) A tender or exchange offer shall be made for 25% or more
of the outstanding voting stock of Key or any person (as the term
"person" is used in Section 13(d) and Section 14(d)(2) of the 0000
Xxx) is or becomes the beneficial owner of 25% or more of the
outstanding voting stock of Key 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 Key
in a transaction or series of transactions by any person (as
defined earlier in this subclause (x)).
(y) Key is a party to a transaction pursuant to which Key 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 Key
becomes a subsidiary in the transaction) of the ultimate parent of
Key represent or were issued in exchange for voting securities of
Key outstanding immediately prior to such transaction or less than
51% of the directors of the surviving or resulting corporation or
(if Key becomes a subsidiary in the transaction) of the ultimate
parent of Key were directors of Key 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 Key.
(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 Key.
1.7 Competitive Activity (After Termination Date). Xxxxxxxxx
shall be deemed to have engaged in "Competitive Activity" after the
Termination Date if, after the Termination Date and without the consent of
Key, he serves as a director, officer, or employee of any Financial
Services Company located in a Restricted State or renders services of a
consultative or advisory nature or otherwise to any Financial Services
Company located in a Restricted State.
1.8 Competitive Activity (Before Termination Date). Xxxxxxxxx
shall be deemed to have engaged in "Competitive Activity" before the
Termination Date if, before the Termination Date, he engages, without the
consent of Key, in any business or business activity in which Key or any of
its Subsidiaries engages, including, without limitation, engaging in any
business activity in the banking or financial services industry (other than
as a director, officer, or employee of Key or any of its Subsidiaries).
1.9 Day. A "day" as used in this Agreement means a calendar
day unless business day is specifically referred to.
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1.10 Demotion or Removal. Xxxxxxxxx shall be deemed to have
been subjected to "Demotion or Removal" if, other than by Voluntary
Resignation, during the period of Xxxxxxxxx'x employment under this
Agreement (i) Xxxxxxxxx ceases to be a director of Key, (ii) Xxxxxxxxx
ceases to be Chairman of the Board of Directors of Key, or (iii) Xxxxxxxxx
ceases to be Chief Executive Officer of Key.
1.11 Effective Time. The term "Effective Time" means the
close of business on the date of this Agreement.
1.12 Financial Services Company. "Financial Services Company"
means a bank, bank holding company, savings and loan association, building
and loan association, savings and loan holding company, insurance company,
investment banking, or securities company, or other financial services
company, other than Key or any of its Subsidiaries.
1.13 Full-time Employment with an Unaffiliated Employer.
"Full-time Employment with an Unaffiliated Employer" means full-time (more
than 30 hours per week) employment at either a base salary, hourly rate,
partnership interest, or other form of participation, which will result in
annual compensation to Xxxxxxxxx of at least 75% of the annual base salary
of Xxxxxxxxx with Key and its Subsidiaries at the highest rate in effect at
any time under this Agreement, but does not include employment by (a) a
corporation or other firm organized or formed by Xxxxxxxxx as a new
business (including, without limitation, a consulting business) after the
Termination Date, or (b) a corporation or other firm the majority of the
equity interests of which were acquired by Xxxxxxxxx and/or his immediate
family members after the Termination Date.
1.14 Good Reason (Throughout the Term). Xxxxxxxxx shall have
"Good Reason" to terminate his employment under this Agreement if, at any
time during the term of his employment hereunder, one or more of the events
listed in (a) through (e) of this Section 1.14 occurs and, based on that
event, Xxxxxxxxx gives notice of his intention to terminate his employment
effective on a date that is within one year of the occurrence of that
event:
(a) Xxxxxxxxx is subjected to Demotion or Removal;
(b) Xxxxxxxxx'x base salary is reduced from the level of his
base salary as in effect from time to time (other than in conjunction
with an across the board and equal percentage reduction in the base
salaries of all Key senior executives);
(c) Xxxxxxxxx is excluded from full participation in any
benefit plan or arrangement maintained for senior executives of Key
generally without his consent or concurrence and such exclusion has
not been cured within 90 days after Xxxxxxxxx gives notice to the
Board of Directors of Key of his election to terminate his employment
for Good Reason based upon that exclusion;
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(d) Xxxxxxxxx determines in good faith that his
responsibilities, duties, or authority with Key are at any time
materially reduced without his consent or concurrence and such
reduction has not been cured within 90 days after Xxxxxxxxx gives
notice to the Board of Directors of Key of his election to terminate
his employment for Good Reason based upon that reduction; or
(e) Xxxxxxxxx'x principal place of employment for Key is
relocated outside of the Cleveland metropolitan area or Xxxxxxxxx is
otherwise required by Key to relocate outside the Cleveland
metropolitan area.
1.15 Good Reason (After a Change of Control). After a Change
of Control, in addition to those events that constitute Good Reason at any
time during the term of his employment under this Agreement and are listed
in Section 1.14, Xxxxxxxxx shall have "Good Reason" to terminate his
employment under this Agreement if, during the two year period commencing
on the date of that Change of Control, any of the events listed in (a)
through (c) of this Section 1.15 occurs and, based on that event, Xxxxxxxxx
gives notice of his intention to terminate his employment effective on a
date that is both (i) within one year of the occurrence of that event and
(ii) not later than the second anniversary of that Change of Control:
(a) The aggregate dollar amount of the incentive compensation
awards to Xxxxxxxxx under both the Short Term Incentive Compensation
Plan and the Long Term Incentive Compensation Plan for any year ending
after the date on which the Change of Control occurs is less than the
Average Annual Incentive Compensation;
(b) Xxxxxxxxx determines in good faith that his
responsibilities, duties or authority with Key are materially reduced
from those in effect before the Change of Control and the reduction
has not been cured within 30 days after Xxxxxxxxx gives notice to the
Board of Directors of Key of his election to terminate his employment
for Good Reason based upon that reduction; or
(c) Xxxxxxxxx determines in good faith that as a result of
the Change of Control he is unable to carry out the authorities,
powers, functions, responsibilities, or duties as Chairman of the
Board of Directors and Chief Executive Officer as those authorities,
powers, functions, responsibilities, or duties attached to those
positions were in effect before the Change of Control.
1.16 Impermissible. The term "Impermissible" when used in the
context of Xxxxxxxxx'x continued coverage by and participation in any of
the Retirement Plans or Savings Plans shall mean that such a continuation
would violate the provisions of any such Plan, would cause any such Plan to
fail to be qualified under Section 401(a) of the Internal Revenue Code, or
would be unlawful.
1.17 Long Term Disability Plan. The term "Long Term
Disability Plan" means and includes the KeyCorp Long Term Disability Plan
and the KeyCorp Supplemental Long
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Term Disability Program, in both cases as from time to time amended,
restated, or otherwise modified, including any long term disability plan or
program that, after the Effective Time, succeeds, replaces, or is
substituted for either such plan or program and includes long term
disability benefits or rights provided pursuant to or under insurance
contracts maintained by Key applicable to senior executives of Key.
1.18 Long Term Incentive Compensation Plan. The term "Long
Term Incentive Compensation Plan" means and includes the KeyCorp Long Term
Cash Incentive Compensation Plan, formerly known as the Society Corporation
Long Term Incentive Compensation Plan, as heretofore in effect from time to
time and as may be hereafter from time to time amended, restated, or
otherwise modified, including any incentive compensation plan that, after
the Effective Time, succeeds, replaces, or is substituted for such plan and
is applicable to senior executives of Key.
1.19 Restricted State. A "Restricted State" means Ohio, New
York, and any other state (including the District of Columbia) in which Key
and its Subsidiaries (taken as a whole) have at the time business
operations or activities which account for or constitute more than 5% of
the total assets or total deposits of Key and its Subsidiaries on a
consolidated basis or more than 5% of the total income of Key and its
Subsidiaries on a consolidated basis for the then preceding three months. A
Financial Services Company shall be deemed to be located in a Restricted
State if its headquarters are then located in the Restricted State or if it
and its affiliates (taken as a whole) have at the time business operations
or activities in the Restricted State with total assets or total deposits
exceeding 5% of the total assets or total deposits of Key and its
Subsidiaries on a consolidated basis or which generate gross income during
the then preceding three months of more than 5% of the total income of Key
and its Subsidiaries on a consolidated basis for that three month period.
The determination of whether a state is a Restricted State shall be made at
the time Xxxxxxxxx first serves as a director, officer, or employee of the
Financial Services Company in question or first renders services of a
consultative or advisory nature or otherwise to such Financial Services
Company.
1.20 Retirement Plans. The term "Retirement Plans" means and
includes the KeyCorp Cash Balance Pension Plan, which succeeded by merger
the Retirement Plan for Employees of Society Corporation and Subsidiaries,
and the KeyCorp Supplemental Retirement Plan, which succeeded by merger the
Amended and Restated Society Corporation Supplemental Retirement Plan, in
all cases, as from time to time amended, restated, or otherwise modified,
including any plan that, after the Effective Time, succeeds, replaces, or
is substituted for any such plan, and all retirement plans of any nature
maintained by Key or any of its Subsidiaries in which Xxxxxxxxx was
participating prior to the Termination Date. Reference to a "Retirement
Plan," in the singular, shall mean any of the Retirement Plans.
1.21 Savings Plans. The term "Savings Plans" means and
by merger the Society Corporation Employee Stock Purchase and Savings Plan,
and the KeyCorp Excess 401(k) Savings Plan, which succeeded includes the
KeyCorp 401(k) Savings Plan, which succeeded
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by merger the Amended and Restated Society Corporation Supplemental Stock
Purchase and Savings Plan, in both cases, as from time to time amended,
restated, or otherwise modified, including any plan that, after the
Effective Time, succeeds, replaces, or is substituted for either such
plan, and all salary reduction, savings, profit-sharing, or stock bonus
plans (including, without limitation, all plans involving employer
matching contributions, whether or not constituting a qualified cash or
deferred arrangement under Section 401(k) of the Internal Revenue Code),
maintained by Key or any of its Subsidiaries in which Xxxxxxxxx was
participating prior to the Termination Date. Reference to a "Savings
Plan," in the singular, shall mean any of the Savings Plans.
1.22 Scheduled Term. The term "Scheduled Term" shall mean the
period commencing at the Effective Time and ending May 31, 2000, except
that, if and when proxy materials are mailed to the shareholders of Key
announcing a date in May of 2000 as the date of the annual meeting of
shareholders of Key to be held in the year 2000, the date so announced
shall be substituted for May 31, 2000 as the end of the Scheduled Term.
1.23 Short Term Incentive Compensation Plan. The term "Short
Term Incentive Compensation Plan" means and includes the KeyCorp Short Term
Incentive Compensation Plan, formerly known as the Society Corporation
Management Incentive Compensation Plan, as heretofore in effect from time
to time and as may be hereafter from time to time amended, restated, or
otherwise modified, including any incentive compensation plan that, after
the Effective Time, succeeds, replaces, or is substituted for such plan and
is applicable to senior executives of Key.
1.24 Subsidiary. A "Subsidiary," as of any time, means any
corporation, bank, partnership, or other entity a majority of the voting
control of which is directly or indirectly owned or controlled at that time
by Key.
1.25 Supplemental Term. The term "Supplemental Term" shall
mean the two-year period commencing on the day after the last day of the
Scheduled Term and ending on the second anniversary of the last day of the
Scheduled Term.
1.26 Termination Date. The term "Termination Date" means the
date on which Xxxxxxxxx'x employment with Key and its Subsidiaries
terminates.
1.27 Voluntary Resignation. A "Voluntary Resignation" shall
have occurred if Xxxxxxxxx terminates his employment with Key and all its
Subsidiaries by voluntarily resigning at his own instance without having
been requested to so resign by Key, except that any resignation by
Xxxxxxxxx will not be deemed to be a Voluntary Resignation if, at the time
of that resignation, Xxxxxxxxx had Good Reason to resign.
2. Term of Employment. Key engages and employs Xxxxxxxxx to
render such services in the administration and operation of its affairs as, from
time to time, may be specified by its Board of Directors in a manner consistent
at all times and from time to time with his status as
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Chairman of the Board of Directors and Chief Executive Officer, all in
accordance with the terms and conditions of this Agreement, for a period
commencing at the Effective Time and ending on the last day of the Scheduled
Term, unless such period is extended by the mutual agreement of Key and
Xxxxxxxxx or is sooner terminated pursuant to this Agreement.
3. Full-Time Services. Xxxxxxxxx will devote all his time and
efforts to the service of Key, except (a) for usual vacation periods and
reasonable periods of illness, (b) for services as an officer and director of
any Subsidiary of Key, and (c) for service as a director or trustee of other
corporations or organizations which are not in competition with Key or any
Subsidiary.
4. Director and Executive Officer. Throughout the period of
his employment under this Agreement, (a) Xxxxxxxxx will be elected and serve as
a director of Key, (b) Xxxxxxxxx shall hold the offices of Chairman of the Board
of Directors and Chief Executive Officer of Key, and (c) Xxxxxxxxx shall be the
most senior (in duties, responsibilities, and authority) officer of Key.
5. Compensation. For all services to be rendered by Xxxxxxxxx
to Key under this Agreement, including services as an officer, director, or
member of any committee of Key or of any Subsidiary, or any other services
specified by the Board of Directors of Key, Key shall pay to Xxxxxxxxx, in equal
monthly or more frequent installments, base salary at a annual rate not lower
than $840,000 per annum. In addition to such base salary, Xxxxxxxxx shall
participate in any incentive compensation, retirement, savings, stock option,
disability, and other employee benefit and welfare plan or arrangement allowed
or provided by Key in which he would otherwise be eligible for participation as
an executive officer and employee of Key, and, to the extent not provided, Key
shall pay or provide for the payment of benefits commensurate with Xxxxxxxxx'x
annual compensation.
6. Effect of Failure to Renew. If, at the expiration of the
Scheduled Term, Xxxxxxxxx'x employment under this Agreement has not otherwise
been terminated and Xxxxxxxxx'x employment with Key is not extended upon terms
acceptable to Xxxxxxxxx (either under this Agreement or under a new agreement),
then each of Key and Xxxxxxxxx shall have the option (exercisable at any time
within 30 days after the expiration of the Scheduled Term) of terminating his
employment with Key as of the last day of the Scheduled Term and, upon exercise
of that option, Key shall pay and provide the following amounts and benefits to
Xxxxxxxxx:
6.1 Key shall pay to Xxxxxxxxx semimonthly compensation
continuation payments (one such payment to be made on each of the fifteenth
and the last day of each calendar month) throughout the Supplemental Term.
The first such semimonthly payment shall be made for the period commencing
on the day after the Termination Date and ending on the first day after the
Termination Date that is either the fifteenth or last day of the calendar
month. The last such semimonthly payment shall be made for the period
commencing with the last date immediately preceding the end of the
Supplemental Term that is either the first or sixteenth day of the calendar
month in which the Supplemental Term ends and ending on the last day of the
Supplemental Term. The amount of each such semimonthly payment (other than
the first and the last such payment) shall be equal to the sum of (a) one
half of one
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month's base salary of Xxxxxxxxx (at the highest rate in effect at any
time during the two year period ending on the Termination Date), plus (b)
one-twenty-fourth (1/24) of Xxxxxxxxx'x Average Annual Incentive
Compensation. The amount of each of the first and last such semimonthly
payments shall be equal to the amount specified in the immediately
preceding sentence multiplied by a fraction, the numerator of which is the
number of days in the period for which that payment is payable and the
denominator of which is the number of days in the semimonthly period at
the end of which that payment is payable. If Xxxxxxxxx dies after becoming
entitled to payments under this Section 6.1 but before the end of the
Supplemental Term, any payments due after his death shall be made to his
estate or, if Xxxxxxxxx shall so direct to Key in writing, to his wife or
to a trust created by Xxxxxxxxx. Xxxxxxxxx'x right to direct payment of
such payments following his death may be exercised by him at any time and
from time to time during his life, and any such direction made subsequent
to an earlier one shall revoke and supersede such earlier direction. The
amounts payable to Xxxxxxxxx, his wife, or any trust created by Xxxxxxxxx
for any month under this Section 6.1 shall be reduced, but not below zero,
by the full amount of the payments, if any, received by any person
(including, without limitation, Xxxxxxxxx, his wife, and any trust created
by Xxxxxxxxx) for that month from all Retirement Plans on account of
Xxxxxxxxx.
6.2 Key shall arrange to provide Xxxxxxxxx, throughout the
period beginning on the first day of the Supplemental Term and ending on
the earlier of (a) the last day of the Supplemental Term, or (b) the first
date on which Xxxxxxxxx accepts Full-time Employment with an Unaffiliated
Employer, with medical benefits (including, if applicable, dental), long
term disability benefits, and group term life insurance benefits, in all
cases at substantially the same level of coverage, and subject to the same
(by dollar amount) employee contribution requirement (if any), as those
which Xxxxxxxxx was receiving or entitled to receive as an officer of Key
on the Termination Date.
6.3 For the period beginning on the first day of the
Supplemental Term and ending on the earlier of (a) the last day of the
Supplemental Term, or (b) the date of Xxxxxxxxx'x death (the "Section 6.3
Benefit Period"), Key shall cause Xxxxxxxxx to continue to be covered by
and to participate in all Retirement Plans and Savings Plans that he was
entitled to be covered by and participating in as an officer of Key on the
Termination Date, except where such coverage or participation is
Impermissible. For these purposes: (i) the entire Section 6.3 Benefit
Period shall be included in determining Xxxxxxxxx'x years of service, and
(ii) Xxxxxxxxx'x base salary during the Section 6.3 Benefit Period shall be
deemed to be the amount he receives under clause (a) of Section 6.1 and
that portion of the amount payable under clause (b) of Section 6.1 that is
attributable to incentive compensation taken into account for purposes of
determining retirement benefits under any of the Retirement Plans and
Savings Plans shall be taken into account as if it were such incentive
compensation. If, at any time during the Section 6.3 Benefit Period, Key
determines in good faith that continuing Xxxxxxxxx'x coverage by and
participation in any of the Retirement Plans or any of the Savings Plans
during the Supplemental Term is Impermissible, Key shall not be required to
cause Xxxxxxxxx to continue to be covered by and to participate in such
affected Plan or Plans, but in lieu thereof, Key shall, within 45 days
after the end of the Section 6.3 Benefit Period, pay to
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Xxxxxxxxx a lump-sum amount, with respect to each such Plan in which
Xxxxxxxxx'x coverage or participation ceased for any time during that
period, equal to (x) in the case of a Savings Plan, the aggregate maximum
amount of the employer matching contributions which would have been, but
were not, credited to Xxxxxxxxx'x account if he had, at all times during
the Section 6.3 Benefit Period, continued to be covered by and participate
in such Savings Plan to the maximum extent permitted, and (y) in the case
of a Retirement Plan, the difference between the actuarial equivalent of
the benefit under the Retirement Plan which Xxxxxxxxx would have received
(after the end of the Section 6.3 Benefit Period) if he had, at all times
during the Section 6.3 Benefit Period, continued to be covered by and
participate in such Retirement Plan and had thereafter elected to receive a
straight life annuity at age 65 under that Retirement Plan and the
actuarial equivalent of the actual benefit paid or payable to Xxxxxxxxx
(after the end of the Section 6.3 Benefit Period) under the Retirement Plan
determined as if Xxxxxxxxx had elected to receive a straight life annuity
at age 65 under that Retirement Plan. For purposes of determining these
actuarial equivalents, the discount rate used shall be the lowest
"immediate annuity rate" published by the Pension Benefit Guaranty
Corporation under PBGC Regulation Section 2619 for plans with valuation
dates during the 90-day period ending on the Termination Date and the
accrual formulas and actuarial assumptions utilized shall be the most
favorable to Xxxxxxxxx of those in effect with respect to such Retirement
Plan during the 90-day period ending on the Termination Date. All
determinations and calculations required to be made under sub-clauses (x)
and (y) of this Section 6.3 shall be made by the Accounting Firm, which
shall provide detailed supporting calculations both to Key and to Xxxxxxxxx
within 30 days after the end of the Section 6.3 Benefit Period. All such
determinations and calculations by the Accounting Firm shall be final and
binding upon Key and Xxxxxxxxx.
7. Effect of Good Reason (In General). If, at any time before
the expiration of the Scheduled Term, Xxxxxxxxx has Good Reason to terminate his
employment, Xxxxxxxxx shall have the right, exercisable at any time during the
period beginning on the date the event constituting any particular instance of
Good Reason first occurs and ending on the earlier of (a) the first anniversary
of that date, or (b) the end of the Scheduled Term, to terminate his employment
with Key by giving written notice of such election to Key. Any such termination
by Xxxxxxxxx during that period shall be treated for all purposes of this
Agreement as a termination of Xxxxxxxxx'x employment by Key without Cause
effective as of the date on which Xxxxxxxxx delivers notice of his election
under this Section 7 to Key.
8. Effect of Termination Without Cause before a Change of
Control. If, at any time before the expiration of the Scheduled Term and before
a Change of Control has occurred, Xxxxxxxxx terminates his employment for Good
Reason or Key terminates Xxxxxxxxx'x employment without Cause, Key shall pay and
provide the following amounts and benefits to Xxxxxxxxx:
8.1 Key shall pay to Xxxxxxxxx semimonthly compensation
continuation payments (one such payment to be made on each of the fifteenth
and the last day of each calendar month) throughout the remainder of the
Scheduled Term and thereafter throughout the Supplemental Term. The first
such semimonthly payment shall be made for the period
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commencing on the day after the Termination Date and ending on the first
day after the Termination Date that is either the fifteenth or last day of
the calendar month. The last such semimonthly payment shall be made for the
period commencing with the last date immediately preceding the end of the
Supplemental Term that is either the first or sixteenth day of the calendar
month in which the Supplemental Term ends and ending on the last day of the
Supplemental Term. The amount of each such semimonthly payment (other than
the first and the last such payment) shall be equal to the sum of (a) one
half of one month's base salary of Xxxxxxxxx (at the highest rate in effect
at any time during the two year period ending on the Termination Date),
plus (b) one-twenty-fourth (1/24) of Xxxxxxxxx'x Average Annual Incentive
Compensation. The amount of each of the first and last such semimonthly
payments shall be equal to the amount specified in the immediately
preceding sentence multiplied by a fraction, the numerator of which is the
number of days in the period for which that payment is payable and the
denominator of which is the number of days in the semimonthly period at the
end of which that payment is payable. If Xxxxxxxxx dies after becoming
entitled to payments under this Section 8.1 but before the end of the
Supplemental Term, any payments due after his death shall be made to his
estate or, if Xxxxxxxxx shall so direct to Key in writing, to his wife or
to a trust created by Xxxxxxxxx. Xxxxxxxxx'x right to direct payment of
such payments following his death may be exercised by him at any time and
from time to time during his life, and any such direction made subsequent
to an earlier one shall revoke and supersede such earlier direction. The
amounts payable to Xxxxxxxxx, his wife, or any trust created by Xxxxxxxxx
for any month under this Section 8.1 shall be reduced, but not below zero,
by the full amount of the payments, if any, received by any person
(including, without limitation, Xxxxxxxxx, his wife, and any trust created
by Xxxxxxxxx) for that month from all Retirement Plans on account of
Xxxxxxxxx.
8.2 Key shall arrange to provide Xxxxxxxxx, throughout the
period beginning on the Termination Date and ending on the earlier of (a)
the last day of the Supplemental Term, or (b) the first date on which
Xxxxxxxxx accepts Full-time Employment with an Unaffiliated Employer, with
medical benefits (including, if applicable, dental), long term disability
benefits, and group term life insurance benefits, in all cases at
substantially the same level of coverage, and subject to the same (by
dollar amount) employee contribution requirement (if any), as those which
Xxxxxxxxx was receiving or entitled to receive as an officer of Key on the
Termination Date.
8.3 For the period beginning on the Termination Date and
ending on the earlier of (a) the last day of the Supplemental Term, or (b)
the date of Xxxxxxxxx'x death (the "Section 8.3 Benefit Period"), Key shall
cause Xxxxxxxxx to continue to be covered by and to participate in all
Retirement Plans and Savings Plans that he was entitled to be covered by
and participating in as an officer of Key on the Termination Date, except
where such coverage or participation is Impermissible. For these purposes:
(i) the Section 8.3 Benefit Period shall be included in determining
Xxxxxxxxx'x years of service, and (ii) Xxxxxxxxx'x base salary during the
Section 8.3 Benefit Period shall be deemed to be the amount he receives
under clause (a) of Section 8.1 and that portion of the amount payable
under clause (b) of Section 8.1 that is attributable to incentive
compensation taken into account for purposes of determining retirement
benefits
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under any of the Retirement Plans and Savings Plans shall be taken into
account as if it were such incentive compensation. If, at any time during
the Section 8.3 Benefit Period, Key determines in good faith that
continuing Xxxxxxxxx'x coverage by and participation in any of the
Retirement Plans or any of the Savings Plans during the Section 8.3 Benefit
Period is Impermissible, Key shall not be required to cause Xxxxxxxxx to
continue to be covered by and to participate in such affected Plan or
Plans, but in lieu thereof, Key shall, within 45 days after the end of the
Section 8.3 Benefit Period, pay to Xxxxxxxxx a lump-sum amount, with
respect to each such Plan in which Xxxxxxxxx'x coverage or participation
ceased for any time during the Section 8.3 Benefit Period, equal to (x) in
the case of a Savings Plan, the aggregate maximum amount of the employer
matching contributions which would have been, but were not, credited to
Xxxxxxxxx'x account if he had, at all times during the Section 8.3 Benefit
Period, continued to be covered by and participate in such Savings Plan to
the maximum extent permitted, and (y) in the case of a Retirement Plan, the
difference between the actuarial equivalent of the benefit under the
Retirement Plan which Xxxxxxxxx would have received (after the end of the
Section 8.3 Benefit Period) if he had, at all times during the Section 8.3
Benefit Period, continued to be covered by and participate in such
Retirement Plan and had thereafter elected to receive a straight life
annuity at age 65 under that Retirement Plan and the actuarial equivalent
of the actual benefit paid or payable to Xxxxxxxxx (after the end of the
Section 8.3 Benefit Period) under the Retirement Plan determined as if
Xxxxxxxxx had elected to receive a straight life annuity at age 65 under
that Retirement Plan. For purposes of determining these actuarial
equivalents, the discount rate used shall be the lowest "immediate annuity
rate" published by the Pension Benefit Guaranty Corporation under PBGC
Regulation Section 2619 for plans with valuation dates during the 90-day
period ending on the Termination Date and the accrual formulas and
actuarial assumptions utilized shall be the most favorable to Xxxxxxxxx of
those in effect with respect to such Retirement Plan during the 90-day
period ending on the Termination Date. All determinations and calculations
required to be made under sub-clauses (x) and (y) of this Section 8.3 shall
be made by the Accounting Firm, which shall provide detailed supporting
calculations both to Key and to Xxxxxxxxx within 30 days after the end of
the Section 8.3 Benefit Period. All such determinations and calculations by
the Accounting Firm shall be final and binding upon Key and Xxxxxxxxx.
9. Effect of Termination after a Change of Control by
Xxxxxxxxx for Good Reason or by Key Without Cause. If, at any time before the
expiration of the Scheduled Term and after a Change of Control has occurred,
Xxxxxxxxx terminates his employment for Good Reason or Key terminates
Xxxxxxxxx'x employment without Cause, Key shall pay and provide the following
amounts and benefits to Xxxxxxxxx:
9.1 Key shall pay to Xxxxxxxxx semimonthly compensation
continuation payments (one such payment to be made on each of the fifteenth
and the last day of each calendar month) throughout the remainder of the
Scheduled Term and thereafter throughout the Supplemental Term. The first
such semimonthly payment shall be made for the period commencing on the day
after the Termination Date and ending on the first day after the
Termination Date that is either the fifteenth or last day of the calendar
month. The last such semimonthly payment shall be made for the period
commencing with the last date immediately
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preceding the end of the Supplemental Term that is either the first or
sixteenth day of the calendar month in which the Supplemental Term ends and
ending on the last day of the Supplemental Term. The amount of each such
semimonthly payment (other than the first and the last such payment) shall
be equal to the sum of (a) one half of one month's base salary of Xxxxxxxxx
(at the highest rate in effect at any time during the two year period
ending on the Termination Date), plus (b) one-twenty-fourth (1/24) of
Xxxxxxxxx'x Average Annual Incentive Compensation. The amount of each of
the first and last such semimonthly payments shall be equal to the amount
specified in the immediately preceding sentence multiplied by a fraction,
the numerator of which is the number of days in the period for which that
payment is payable and the denominator of which is the number of days in
the semimonthly period at the end of which that payment is payable. If
Xxxxxxxxx dies after becoming entitled to payments under this Section 9.1
but before the end of the Supplemental Term, any payments due after his
death shall be made to his estate or, if Xxxxxxxxx shall so direct to Key
in writing, to his wife or to a trust created by Xxxxxxxxx. Xxxxxxxxx'x
right to direct payment of such payments following his death may be
exercised by him at any time and from time to time during his life, and any
such direction made subsequent to an earlier one shall revoke and supersede
such earlier direction. The amounts payable to Xxxxxxxxx, his wife, or any
trust created by Xxxxxxxxx for any month under this Section 9.1 shall be
reduced, but not below zero, by the full amount of the payments, if any,
received by any person (including, without limitation, Xxxxxxxxx, his wife,
and any trust created by Xxxxxxxxx) for that month from all Retirement
Plans on account of Xxxxxxxxx.
9.2 Key shall arrange to provide Xxxxxxxxx, throughout the
period beginning on the Termination Date and ending on the earlier of (a)
the last day of the Supplemental Term, or (b) the first date on which
Xxxxxxxxx accepts Full-time Employment with an Unaffiliated Employer, with
medical benefits (including, if applicable, dental), long term disability
benefits, and group term life insurance benefits, in all cases at
substantially the same level of coverage, and subject to the same (by
dollar amount) employee contribution requirement (if any), as those which
Xxxxxxxxx was receiving or entitled to receive as an officer of Key on the
Termination Date.
9.3 For the period beginning on the Termination Date and
ending on the earlier of (a) the last day of the Supplemental Term, or (b)
the date of Xxxxxxxxx'x death (the "Section 9.3 Benefit Period"), Key shall
cause Xxxxxxxxx to continue to be covered by and to participate in all
Retirement Plans and Savings Plans that he was entitled to be covered by
and participating in as an officer of Key on the Termination Date, except
where such coverage or participation is Impermissible. For these purposes:
(i) the Section 9.3 Benefit Period shall be included in determining
Xxxxxxxxx'x years of service, and (ii) Xxxxxxxxx'x base salary during the
Section 9.3 Benefit Period shall be deemed to be the amount he is deemed to
receive under clause (a) Section 9.1 and that portion of the amount payable
under clause (b) of Section 9.1 that is attributable to incentive
compensation taken into account for purposes of determining retirement
benefits under any of the Retirement Plans and Savings Plans shall be taken
into account as if it were such incentive compensation. If, at any time
during the Section 9.3 Benefit Period, Key determines in good faith that
continuing Xxxxxxxxx'x coverage by and
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participation in any of the Retirement Plans or any of the Savings Plans
during the Section 9.3 Benefit Period is Impermissible, Key shall not be
required to cause Xxxxxxxxx to continue to be covered by and to participate
in such affected Plan or Plans, but in lieu thereof, Key shall, within 45
days after the end of the Section 9.3 Benefit Period, pay to Xxxxxxxxx a
lump-sum amount, with respect to each such Plan in which Xxxxxxxxx'x
coverage or participation ceased for any time during the Section 9.3
Benefit Period equal to (x) in the case of a Savings Plan, the aggregate
maximum amount of the employer matching contributions which would have
been, but were not, credited to Xxxxxxxxx'x account if he had, at all times
during the Section 9.3 Benefit Period, continued to be covered by and
participate in such Savings Plan to the maximum extent permitted, and (y)
in the case of a Retirement Plan, the difference between the actuarial
equivalent of the benefit under the Retirement Plan which Xxxxxxxxx would
have received (after the end of the Section 9.3 Benefit Period) if he had,
at all times during the Section 9.3 Benefit Period, continued to be covered
by and participate in such Retirement Plan and had thereafter elected to
receive a straight life annuity at age 65 under that Retirement Plan and
the actuarial equivalent of the actual benefit paid or payable to Xxxxxxxxx
(after the end of the Section 9.3 Benefit Period) under the Retirement Plan
determined as if Xxxxxxxxx had elected to receive a straight life annuity
at age 65 under that Retirement Plan. For purposes of determining these
actuarial equivalents, the discount rate used shall be the lowest
"immediate annuity rate" published by the Pension Benefit Guaranty
Corporation under PBGC Regulation Section 2619 for plans with valuation
dates during the 90-day period ending on the Termination Date and the
accrual formulas and actuarial assumptions utilized shall be the most
favorable to Xxxxxxxxx of those in effect with respect to such Retirement
Plan during the 90-day period ending on the Termination Date. All
determinations and calculations required to be made under sub-clauses (x)
and (y) of this Section 9.3 shall be made by the Accounting Firm, which
shall provide detailed supporting calculations both to Key and to Xxxxxxxxx
within 30 days after the end of the Section 9.3 Benefit Period. All such
determinations and calculations by the Accounting Firm shall be final and
binding upon Key and Xxxxxxxxx.
10. Effect of Death While in Employ of Key. If Xxxxxxxxx dies
while employed by Key, (a) Key shall pay to Xxxxxxxxx'x estate any unpaid base
salary due or to become due to Xxxxxxxxx with respect to any period ending
before his death, (b) if Xxxxxxxxx is survived by his wife, Key shall pay the
monthly survivor pension benefit provided for in Section 15, (c) Key shall have
no further obligations to Xxxxxxxxx for base salary for any period after
Xxxxxxxxx'x death, and (d) Key shall pay such incentive compensation as is
provided for under the Short Term Incentive Compensation Plan and the Long Term
Incentive Compensation Plan to Xxxxxxxxx'x estate or as otherwise provided for
under such plans.
11. Effect of Disability While in Employ of Key. If, while
Xxxxxxxxx is employed by Key, he becomes disabled, by reason of physical or
mental impairment, to such an extent that he is unable to perform his duties
under this Agreement:
11.1 Key may relieve Xxxxxxxxx of his duties under this
Agreement for as long as Xxxxxxxxx is so disabled.
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11.2 Key shall pay to Xxxxxxxxx all base salary and incentive
compensation to which he would have been entitled under this Agreement and
under the Short Term Incentive Compensation Plan and the Long Term
Incentive Compensation Plan had he continued to be actively employed by Key
to the earliest of (a) the first date on which he is no longer so disabled
to such an extent that he is unable to perform his duties under this
Agreement (whereupon, if this clause (a) is the earliest to occur, he shall
again be restored to his duties under this Agreement, entitled to the
benefits of and subject to this Agreement as if no period of disability had
occurred), (b) the date on which he becomes eligible for payment of long
term disability benefits under the Long Term Disability Benefit Plan, (c)
the date of his death, or (d) the last day of the Scheduled Term
(whereupon, if this clause (d) is the earliest to occur, Xxxxxxxxx shall be
entitled to the benefits provided under Section 6 of this Agreement for the
Supplemental Term).
11.3 If and when Xxxxxxxxx becomes eligible for payment of
long term disability benefits under the Long Term Disability Benefit Plan,
Key shall pay to Xxxxxxxxx semimonthly compensation continuation payments
(one such payment to be made on each of the fifteenth and the last day of
each calendar month) throughout the period (the "Section 11.3 Benefit
Period") beginning with the date on which Xxxxxxxxx becomes so eligible and
ending on the earliest of (a) the first date on which he is no longer so
disabled to such an extent that he is unable to perform his duties under
this Agreement (whereupon, if this clause (a) occurs during the Scheduled
Term, he shall again be restored to his duties under this Agreement,
entitled to the benefits of and subject to this Agreement as if no period
of disability had occurred), (b) the date of his death, or (c) the last day
of the Supplemental Term. The first such semimonthly payment shall be made
for the period commencing on the first day of the Section 11.3 Benefit
Period and ending on the first day after that date that is either the
fifteenth or last day of the calendar month. The last such semimonthly
payment shall be made for the period commencing with the last date within
the Section 11.3 Benefit Period that is either the first or sixteenth day
of the calendar month in which the Section 11.3 Benefit Period ends and
ending on the last day of the Section 11.3 Benefit Period. The amount of
each such semimonthly payment (other than the first and the last such
payment) shall be equal to the sum of (i) one half of one month's base
salary of Xxxxxxxxx (at the highest rate in effect at any time during the
two year period ending on the last day before the date of the payment on
which Xxxxxxxxx performed services for Key), plus (ii) one-twenty-fourth
(1/24) of Xxxxxxxxx'x Average Annual Incentive Compensation (determined as
though the last day before the date of the payment on which Xxxxxxxxx
performed services for Key was the Termination Date). The amount of each of
the first and last such semimonthly payments shall be equal to the amount
specified in the immediately preceding sentence multiplied by a fraction,
the numerator of which is the number of days in the period for which that
payment is payable and the denominator of which is the number of days in
the semimonthly period at the end of which that payment is payable.
11.4 The amounts payable to Xxxxxxxxx for any month under
this Section 11 shall be reduced, but not below zero, by the full amount of
the payments, if any, received by
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Xxxxxxxxx for that month (a) from all Retirement Plans, (b) from the Long
Term Disability Plan, and (c) from any other disability plan the entire
cost of which is borne by Key.
11.5 For purposes of entitlement to a death benefit under
Section 10 or Section 15 of this Agreement, (a) Xxxxxxxxx will be treated
as being employed by Key throughout any portion of the Scheduled Term
during which he is entitled to receive payments from Key under either of
Sections 11.2 or 11.3 and (b) Xxxxxxxxx will not be treated as being
employed by Key at any time during the Supplemental Term.
11.6 For purposes of all retirement, savings, stock option,
disability, and other employee benefit and welfare plans or arrangements
allowed or provided by Key to officers, Xxxxxxxxx shall be treated in the
same manner that Key treats other officers who become disabled.
11.7 Except as provided in this Section 11, Key shall have no
further obligations to Xxxxxxxxx for base salary or incentive compensation
for any period during which Xxxxxxxxx is so disabled to such an extent that
he is unable to perform his duties under this Agreement.
12. No Set-off or Mitigation. The compensation and benefits
to be paid and provided by Key to Xxxxxxxxx under this Agreement are not to be
subject to any set-off against any claim by Key against Xxxxxxxxx. Xxxxxxxxx
will not be required to mitigate any amounts payable by Key to Xxxxxxxxx under
any of the terms of this Agreement and, except to the limited extent provided
herein with respect to welfare benefit plans, no payment or benefit to Xxxxxxxxx
from any other source will reduce the obligation of Key to make payment to and
provide benefits to Xxxxxxxxx after termination of his employment as provided in
this Agreement.
13. Payments Are in Lieu of Severance Payments. If Xxxxxxxxx
becomes entitled to receive payments under this Agreement as a result of
termination of his employment, those payments shall be in lieu of any and all
other claims or rights that Xxxxxxxxx may have for severance, separation, and/or
salary continuation pay upon that termination of his employment.
14. Limitations on Competition.
14.1 Xxxxxxxxx shall not engage in any Competitive Activity
during the period of his employment with Key.
14.2 Xxxxxxxxx shall not engage in any Competitive Activity
during any period after the Termination Date during which he is receiving
semimonthly compensation continuation payments under any of Sections 6.1,
8.1, or 9.1. If Xxxxxxxxx continues to violate the restriction set forth in
this Section 14.2 after the Board of Directors has advised him in writing
to cease those activities and that violation is material, Key shall
thereupon be relieved of all further obligations to make payments and
provide benefits to Xxxxxxxxx under any of the provisions contained in any
of Sections 6 through 9. Xxxxxxxxx shall not be required to repay to Key
any payment received by him before he began to engage in any such
Competitive
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Activity. If a Financial Services Company has business operations or
activities in multiple states some of which are Restricted States and some
of which are not Restricted States, Key will not unreasonably withhold its
consent after the Termination Date to Xxxxxxxxx serving as an officer,
employee, or consultant of such Financial Services Company if (a)
Xxxxxxxxx'x duties and responsibilities for such Financial Services Company
are restricted to a specific geographic region which does not include a
Restricted State, and (b) none of Xxxxxxxxx'x services or activities is
performed in or related to a Restricted State.
15. Death Benefit for Surviving Wife. If Xxxxxxxxx dies while
employed by Key leaving his wife surviving him, Key shall pay to Xxxxxxxxx'x
wife or, if Xxxxxxxxx shall so direct to Key in writing, to a trust in which his
wife is one of the beneficiaries or to his estate, a monthly survivor pension
equal to the excess, if any, of (a) one-third of the monthly amount Xxxxxxxxx or
his wife or his estate would receive under Section 8.1 if Xxxxxxxxx had been
terminated without Cause by Key on the day before the date of his death (i.e.,
an amount equal to one-third of the sum of two semimonthly payments calculated
as provided in the fourth sentence of Section 8.1), over (b) the aggregate
monthly survivor benefits, if any, under all Retirement Plans received by
Xxxxxxxxx'x wife. In the event Xxxxxxxxx and his wife die in a common accident
or in the event Xxxxxxxxx and his wife die within six months of each other's
death as a result of injuries sustained in a common accident, Xxxxxxxxx'x wife,
for purposes of the preceding sentence and for purposes of Section 10, shall be
deemed to have survived him, regardless of the actual order of their respective
deaths. The monthly survivor payments shall be paid at the rate of one per month
commencing with the month following the month in which Xxxxxxxxx'x death occurs
and continuing through the later of (i) the month in which Xxxxxxxxx'x wife
dies, or (ii) the 180th month following the month in which Xxxxxxxxx'x death
occurs. If Xxxxxxxxx'x wife dies before 180 monthly payments have been made, Key
shall pay the remaining payments to the estate of Xxxxxxxxx'x wife or in
accordance with Xxxxxxxxx'x written direction, if any, as above provided.
Xxxxxxxxx'x right to direct payment of such monthly survivor pension following
his death may be exercised by him at any time and from time to time during his
life, and any such direction made subsequent to an earlier one shall revoke and
supersede such earlier direction.
16. Stock Options. If a Change of Control occurs during the
period of Xxxxxxxxx'x employment under this Agreement and an election by
Xxxxxxxxx under this Section 16 would not conflict with the treatment for
accounting purposes of any transaction entered into by Key as a pooling of
interests, Xxxxxxxxx thereafter may from time to time elect to surrender to Key
his rights in any or all outstanding stock options (whether or not then
exercisable) to purchase Common Shares of Key then held by him. Upon any such
surrender, Key shall pay to Xxxxxxxxx an amount equal to the excess of (a) the
aggregate fair market value of all of the Common Shares subject to the stock
options so surrendered over (b) the aggregate option price of all such Common
Shares under those stock options. For purposes of this Section 16, "fair market
value" shall mean the higher of (i) the highest price paid per share for Common
Shares of Key in connection with the Change of Control, or (ii) the mean between
the high and low sales prices for Common Shares of Key (as reported in The Wall
Street Journal) on the date of Xxxxxxxxx'x election to surrender his rights in
all outstanding stock options.
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17. Additional Retirement Benefits.
17.1 If Xxxxxxxxx'x employment with Key terminates before
March 26, 2009 (his 65th birthday) for any reason other than (a) a
Voluntary Resignation that is effective before the end of the Scheduled
Term, or (b) Cause and Xxxxxxxxx (or any person claiming through Xxxxxxxxx)
receives retirement benefits under one or more of the Retirement Plans at
any time after March 26, 1999 (Xxxxxxxxx'x 55th birthday), Key shall pay to
Xxxxxxxxx, to his contingent annuitant, to his term-certain beneficiary,
and/or to his other beneficiary under each such plan, on each date after
March 26, 1999 on which a payment is payable under any such plan, a
supplemental retirement benefit equal to the excess, if any, of (x) the
amount that would be payable on that date under that plan if, at his
Termination Date, Xxxxxxxxx had attained age 65 (so that there would be no
reduction in the amount of the benefit due to commencement of payment
before age 65) and had completed 40 and 3/4 years of service with Key (so
that he would be treated as having the same number of years of service as
if he had continued in the employ of Key through his 65th birthday), over
(y) the amount actually payable on that date under that plan. Any amount
paid pursuant to this Section 17.1 shall be treated, for purposes of this
Agreement, as paid from a Retirement Plan.
17.2 If Xxxxxxxxx'x employment with Key is terminated by a
Voluntary Resignation that is effective before the end of the Scheduled
Term and Xxxxxxxxx elects to begin receiving retirement benefits under one
or more of the Retirement Plans after his 60th birthday but before his 65th
birthday, Key shall pay to Xxxxxxxxx, to his contingent annuitant, to his
term-certain beneficiary, and/ or to his other beneficiary under each such
plan, on the date any payment is payable under such plan, a supplemental
retirement benefit equal to the amount by which that payment is reduced
because Xxxxxxxxx began to receive benefits under that plan before his 65
birthday. Any amount paid pursuant to this Section 17.2 shall be treated,
for purposes of this Agreement, as paid from a Retirement Plan.
17.3 Upon termination of his employment with Key for any
reason whatsoever at any time after the Effective Time, Xxxxxxxxx will be
treated as having satisfied all of the requirements for eligibility for a
supplemental retirement benefit under the KeyCorp Supplemental Retirement
Plan, which succeeded by merger the Amended and Restated Society
Corporation Supplemental Retirement Plan, as from time to time amended,
restated, or otherwise modified, including any plan hereafter succeeding,
replacing, or being substituted for such plan.
18. Long Term and Short Term Incentive Compensation. If
Xxxxxxxxx'x employment with Key terminates for any reason other than (a) a
Voluntary Resignation that is effective before the end of the Scheduled Term,
(b) Cause, or (c) death or disability, for purposes of determining Xxxxxxxxx'x
rights to awards under the Long Term Incentive Compensation Plan and the Short
Term Incentive Compensation Plan, Xxxxxxxxx shall be treated as though, on the
Termination Date, he (a) had retired and (b) was more than 65 years of age.
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19. Office and Secretarial Support. If Xxxxxxxxx'x employment
with Key terminates for any reason other than (a) a Voluntary Resignation that
is effective before the end of the Scheduled Term, (b) Cause, or (c) death or
disability, Key shall provide to Xxxxxxxxx, during the period commencing
immediately after the Termination Date and continuing through May 31, 2007,
furnished office space and amenities (such as telephone, word processing and fax
machine) and secretarial support appropriate to Xxxxxxxxx'x status as a former
Chairman of the Board and Chief Executive Officer of Key either in Cleveland,
Ohio or in such other city, village or town located in the continental United
States, as requested by Xxxxxxxxx, at which Key or one of its Subsidiaries has
offices.
20. Indemnification. Key shall indemnify Xxxxxxxxx, to the
full extent permitted or authorized by the Ohio General Corporation Law as it
may from time to time be amended, if Xxxxxxxxx is made or threatened to be made
a party to any threatened, pending, or completed action, suit, or proceeding,
whether civil, criminal, administrative, or investigative, by reason of the fact
that Xxxxxxxxx is or was a director, officer, or employee of Key or any
Subsidiary, or is or was serving at the request of Key or any Subsidiary as a
director, trustee, officer, or employee of a bank, corporation, partnership,
joint venture, trust, or other enterprise. The indemnification provided by this
Section 20 shall not be deemed exclusive of any other rights to which Xxxxxxxxx
may be entitled under the articles of incorporation or the regulations of Key or
of any Subsidiary, or any agreement, vote of shareholders or disinterested
directors, or otherwise, both as to action in Xxxxxxxxx'x official capacity and
as to action in another capacity while holding such office, and shall continue
as to Xxxxxxxxx after Xxxxxxxxx has ceased to be a director, trustee, officer,
or employee and shall inure to the benefit of the heirs, executors, and
administrators of Xxxxxxxxx.
21. Reimbursement of Certain Expenses.
21.1 Key shall pay, as incurred, all expenses, including the
reasonable fees of counsel engaged by Xxxxxxxxx, of defending any action
brought to have this Agreement declared invalid or unenforceable.
21.2 Key shall pay, as incurred, all expenses, including the
reasonable fees of counsel engaged by Xxxxxxxxx, of prosecuting any action
to compel Key to comply with the terms of this Agreement upon receipt from
Xxxxxxxxx of an undertaking to repay Key for such expenses if, and only if,
it is ultimately determined by a court of competent jurisdiction that
Xxxxxxxxx had no reasonable grounds for bringing that action (which
determination need not be made simply because Xxxxxxxxx fails to succeed in
the action).
21.3 Expenses (including attorney's fees) incurred by
Xxxxxxxxx in defending any action, suit, or proceeding commenced or
threatened against Xxxxxxxxx for any action or failure to act as an
employee, officer, or director of Key or any Subsidiary shall be paid by
Key, as they are incurred, in advance of final disposition of the action,
suit, or proceeding upon receipt of an undertaking by or on behalf of
Xxxxxxxxx in which he agrees to reasonably cooperate with Key or the
Subsidiary, as the case may be, concerning the action, suit, or proceeding,
and (a) if the action, suit, or proceeding is commenced or threatened
against
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Xxxxxxxxx for any action or failure to act as a director, to repay the
amount if it is proved by clear and convincing evidence in a court of
competent jurisdiction that his action or failure to act involved an act
or omission undertaken with deliberate intent to cause injury to Key or a
Subsidiary or (b) if the action, suit, or proceeding is commenced or
threatened against Xxxxxxxxx for any action or failure to act as an
officer or employee, to repay the amount if it is ultimately determined
that he is not entitled to be indemnified. The obligation of Key to
advance expenses provided for in this Section 21.3 shall not be deemed
exclusive of any other rights to which Xxxxxxxxx may be entitled under the
articles of incorporation or the regulations of Key or of any Subsidiary,
or any agreement, vote of shareholders or disinterested directors, or
otherwise.
22. Termination for Cause. In the event Xxxxxxxxx'x
employment is terminated for Cause, Key may, by giving written notice to
Xxxxxxxxx, terminate this Agreement and all its obligations remaining to be
performed or observed by it under this
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Agreement(other than those under Section 24), except no termination of this
Agreement shall affect Xxxxxxxxx'x rights under any plan or benefit of Key, all
of which shall be governed by their respective terms.
23. Gross-Up of Payments Deemed to be Excess Parachute
Payments.
23.1 Key and Xxxxxxxxx acknowledge that, following a Change
of Control, one or more payments or distributions to be made by Key to or
for the benefit of Xxxxxxxxx (whether paid or payable or distributed or
distributable pursuant to the terms of this Agreement, under some other
plan, agreement, or arrangement, or otherwise) (a "Payment") may be
determined to be an "excess parachute payment" that is not deductible by
Key for Federal income tax purposes and with respect to which Xxxxxxxxx
will be subject to an excise tax because of Sections 280G and 4999,
respectively, of the Internal Revenue Code (hereinafter referred to
respectively as "Section 280G" and "Section 4999"). If Xxxxxxxxx'x
employment is terminated after a Change of Control occurs, the Accounting
Firm, which, subject to any inconsistent position asserted by the Internal
Revenue Service, shall make all determinations required to be made under
this Section 23, shall determine whether any Payment would be an excess
parachute payment and shall communicate its determination, together with
detailed supporting calculations, to Key and to Xxxxxxxxx within 30 days
after the Termination Date or such earlier time as is requested by Key. Key
and Xxxxxxxxx shall cooperate with each other and the Accounting Firm and
shall provide necessary information so that the Accounting Firm may make
all such determinations. Key shall pay all of the fees of the Accounting
Firm for services performed by the Accounting Firm as contemplated in this
Section 23.
23.2 If the Accounting Firm determines that any Payment gives
rise, directly or indirectly, to liability on the part of Xxxxxxxxx for
excise tax under Section 4999 (and/or any penalties and/or interest with
respect to any such excise tax), Key shall make additional cash payments to
Xxxxxxxxx, from time to time and at the same time as any Payment
constituting an excess parachute payment is paid or provided to Xxxxxxxxx,
in such amounts as are necessary to put Xxxxxxxxx in the same position,
after payment of all federal, state, and local taxes (whether income taxes,
excise taxes under Section 4999 or otherwise, or other taxes) and any and
all penalties and interest with respect to any such excise tax, as
Xxxxxxxxx would have been in after payment of all federal, state, and local
income taxes if the Payments had not given rise to an excise tax under
Section 4999 and no such penalties or interest had been imposed.
23.3 If the Internal Revenue Service determines that any
Payment gives rise, directly or indirectly, to liability on the part of
Xxxxxxxxx for excise tax under Section 4999 (and/or any penalties and/or
interest with respect to any such excise tax) in excess of the amount, if
any, previously determined by the Accounting Firm, Key shall make further
additional cash payments to Xxxxxxxxx not later than the due date of any
payment indicated by the Internal Revenue Service with respect to these
matters, in such amounts as are necessary to put Xxxxxxxxx in the same
position, after payment of all federal, state, and local taxes (whether
income taxes, excise taxes under Section 4999 or otherwise, or other taxes)
and any and all penalties and interest with respect to any such excise tax,
as Xxxxxxxxx would have been
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in after payment of all federal, state, and local income taxes if the
Payments had not given rise to an excise tax under Section 4999 and no such
penalties or interest had been imposed.
23.4 If Key desires to contest any determination by the
Internal Revenue Service with respect to the amount of excise tax under
Section 4999, Xxxxxxxxx shall, upon receipt from Key of an unconditional
written undertaking to indemnify and hold Xxxxxxxxx harmless (on an after
tax basis) from any and all adverse consequences that might arise from the
contesting of that determination, cooperate with Key in that contest at
Key's sole expense. Nothing in this Section 23.4 shall require Xxxxxxxxx to
incur any expense other than expenses with respect to which Key has paid to
Xxxxxxxxx sufficient sums so that after the payment of the expense by
Xxxxxxxxx and taking into account the payment by Key with respect to that
expense and any and all taxes that may be imposed upon Xxxxxxxxx as a
result of his receipt of that payment, the net effect is no cost to
Xxxxxxxxx. Nothing in this Section 23.4 shall require Xxxxxxxxx to extend
the statute of limitations with respect to any item or issue in his tax
returns other than, exclusively, the excise tax under Section 4999. If, as
the result of the contest of any assertion by the Internal Revenue Service
with respect to excise tax under
Section 4999, Xxxxxxxxx receives a refund of a Section 4999 excise tax
previously paid and/or any interest with respect thereto, Xxxxxxxxx shall
promptly pay to Key such amount as will leave Xxxxxxxxx, net of the
repayment and all tax effects, in the same position, after all taxes and
interest, that he would have been in if the refunded excise tax had never
been paid.
24. Deferral of Payment of Compensation under Certain
Circumstances.
24.1 Section 162(m). For purposes of this Section 24, the
term "Section 162(m)" shall mean Section 162(m) of the Internal Revenue
Code (which, as amended by the Revenue Reconciliation Act of 1993,
prescribes rules disallowing deductions for certain "applicable employee
remuneration" to any of five specified "covered employees" of a publicly
held corporation in excess of $1,000,000 per year), as from time to time
amended, and the corresponding provisions of any similar law subsequently
enacted, and to all regulations issued under that section and any such
provisions.
24.2 Deferral. Except as otherwise provided in either of
Section 24.3 or Section 24.4, below, if Key determines that, after giving
effect to all applicable elective deferrals of compensation, any amount of
compensation (including any base salary and any incentive compensation
payable under any incentive compensation plan in which Xxxxxxxxx is a
participant) otherwise payable to Xxxxxxxxx under this Agreement at any
particular time (the "Scheduled Time"),
(a) would not be deductible by Key if paid at the Scheduled
Time by reason of the disallowance rules of Section 162(m), and
(b) would be deductible by Key if deferred until and paid
during a later year,
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that amount of compensation shall be deferred until, and paid during, the
year that is determined by Key to be the first year following the year of
deferral during which the compensation can be paid without disallowance of
the deduction for payment of the compensation by reason of Section 162(m).
If Key determines that in any year following the year of deferral a portion
of, but not all of, the amounts deferred (together with interest thereon as
provided in Section 24.5, below) can be paid without disallowance of the
deduction, that portion that can be so paid shall be paid by Key during
that year and the remainder, except as otherwise provided in Section 24.3
or Section 24.4, below, shall continue to be deferred until a later year.
24.3 Early Payout of Deferred Amount if Deferral is
Determined to be Ineffective. If any amount of compensation is deferred
under Section 24.2 with the expectation that it will be deductible by Key
if paid in a later year and Key later determines that the compensation will
not be deductible by Key even if payment thereof is deferred until a later
year, then, within three months of the date on which that determination is
made, the deferral with respect to that compensation shall terminate and
Key shall pay that compensation to Xxxxxxxxx.
24.4 Payout Following Termination of Employment in All
Events. On April 15 of the year immediately following the year in which
Xxxxxxxxx ceases to be employed by Key, Key shall pay to Xxxxxxxxx, in a
single lump sum, all amounts of compensation that have been deferred
pursuant to this Section 24 and have not previously been paid so that, as
of the close of business on that date, no amount of compensation will
remain deferred under this Section 24 whether or not Key is entitled to a
deduction with respect to the payment of that compensation.
24.5 Interest on Deferred Amounts. Upon payment of any
amounts of compensation deferred for any period of time pursuant to this
Section 24, Key shall pay to Xxxxxxxxx an additional amount equivalent to
the interest that would have accrued on such deferred compensation if
interest accrued thereon on a daily basis from the date on which that
compensation would have been paid but for this Section 24 through the date
on which that compensation is paid at a rate varying from month to month
and equal to 50 basis points higher than the effective annual yield of the
average of the Moody's Average Corporate Bond Yield Index for the previous
month, as published by Xxxxx'x Investor Services, Inc. (or any successor
published thereto), or, if such index is no longer published, a
substantially similar index selected by the Accounting Firm, with interest
compounded as of the end of each month.
24.6 Miscellaneous. Xxxxxxxxx'x rights with respect to
payment during his lifetime of any compensation deferred under this Section
24 shall not be subject to assignment. If Xxxxxxxxx dies before all
compensation deferred under this Section 24 has been paid to him, any such
unpaid compensation shall be paid, at the same time it would have been paid
if Xxxxxxxxx had not died but had merely ceased to be an employee of Key on
the date of his death (or, if earlier, on the last date he actually was an
employee of Key), to his estate or, if
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Xxxxxxxxx shall so direct to Key in writing, to his wife or to a trust
created by Xxxxxxxxx. The obligation of Key to make payments of
compensation deferred pursuant to this Section 24 constitutes the unsecured
promise of Key to make payments from its general assets as and when due and
neither Xxxxxxxxx nor any person claiming through him shall have, as a
result of this Section 24, any lien or claim on any assets of Key that is
superior to the claims of the general creditors of Key.
25. Vesting of, and Extension of Exercise Period for, Stock
Options. All stock options (other than so-called "performance options," which
are options that vest or become exercisable only if certain stock price and/or
financial performance tests are achieved) granted to Xxxxxxxxx by Key after the
Effective Time which remain outstanding on the Termination Date shall be deemed
to have vested (to the extent not already vested) as of immediately prior to the
termination of his employment in all cases except when his employment is
terminated for Cause, by Voluntary Resignation before the end of the Scheduled
Term, or as a result of death or disability. All stock options (other than
performance options) granted to Xxxxxxxxx by Key after the Effective Time and
which remain outstanding and are vested on the Termination Date (whether
pursuant to the immediately preceding sentence or otherwise) shall be
exercisable after the Termination Date until their respective option expiration
date (which is the last date that the option would be exercisable in accordance
with its terms if Xxxxxxxxx had continued in Key's employment indefinitely)
unless Xxxxxxxxx'x employment is terminated for Cause or by Voluntary
Resignation before the end of the Scheduled Term. In the case of incentive stock
options granted to Xxxxxxxxx by Key after the Effective Time, this Section 25
shall apply, recognizing however that failure to exercise the incentive stock
option within the time periods after the Termination Date prescribed by the
Internal Revenue Code may cause the option to fail to qualify for incentive
stock option treatment under the Internal Revenue Code. In the event that an
option in accordance with its terms without regard to this Section 25 would vest
earlier than as provided in this Section 25 or would be exercisable for a longer
period than as provided in this Section 25, the terms of the option providing
for earlier vesting and/or a longer period of exercisability, as the case may
be, shall govern. Each stock option (other than performance options) granted to
Xxxxxxxxx by Key after the Effective Time shall be deemed to contain the
provisions of this Section 25 as a part of the award instrument evidencing such
option.
26. Savings Clause. If any payments otherwise payable to
Xxxxxxxxx under this Agreement are prohibited by any applicable statute or
regulation in effect at the time the payments would otherwise be payable,
including, without limitation, any regulation issued by the Federal Deposit
Insurance Corporation (the "FDIC") that limits so called "golden parachute
payments" that can be made by an FDIC insured institution or its holding company
if the institution is financially troubled and certain so-called
"indemnification payments" (any such statute or regulation being a "Limiting
Rule"):
(a) Key will use its best efforts to obtain the consent of
the appropriate governmental agency (whether the FDIC or any other
agency) to the payment by Key to Xxxxxxxxx of the maximum amount that
is permitted (up to the amounts that would be due to Xxxxxxxxx under
this Agreement or otherwise absent the Limiting Rule); and
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(b) Xxxxxxxxx will be entitled to elect to have apply, and
therefore to receive benefits directly under, either (i) this
Agreement (as limited by the Limiting Rule) or (ii) any generally
applicable Key plan or policy (including any severance, separation
pay, and/or salary continuation plan that may be in effect at the time
of Xxxxxxxxx'x termination), up to the amounts that would be due to
Xxxxxxxxx under this Agreement or otherwise absent the Limiting Rule.
27. Merger or Transfer of Assets of Key. Key will not
consolidate with or merge into any other corporation, or transfer all or
substantially all of its assets to another corporation, unless such other
corporation shall assume this Agreement in a signed writing and deliver a copy
thereof to Xxxxxxxxx. Upon such assumption the successor corporation shall
become obligated to perform the obligations of Key under this Agreement, and the
term "Key" as used in this Agreement shall be deemed to refer to such successor
corporation.
28. Notices. Notices and all other communications provided
for in this Agreement shall be in writing and shall be deemed to have been duly
given when delivered in person (to the Secretary of Key in the case of notices
to Key and to Xxxxxxxxx in the case of notices to Xxxxxxxxx) or mailed by United
States registered mail, return receipt requested, postage prepaid, as follows:
If to Key:
KeyCorp
000 Xxxxxx Xxxxxx
Xxxxxxxxx, Xxxx 00000-0000
Attention: Secretary
If to Xxxxxxxxx:
Xx. Xxxxxx X. Xxxxxxxxx
0000 Xxxxxxxxx Xxxx
Xxxxx Xxxxx, Xxxx 00000
or such other address as either party may have furnished to the other in writing
in accordance herewith, except that notices of change of address shall be
effective only upon receipt.
29. Validity. The invalidity or unenforceability of any
provision of this Agreement shall not affect the validity or enforceability of
any other provision of this Agreement which shall remain in full force and
effect.
30. Miscellaneous. No provision of this Agreement may be
modified, waived, or discharged unless such waiver, modification, or discharge
is agreed to in a writing signed by Xxxxxxxxx and Key. No waiver by either party
hereto at any time of any breach by the other party
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of, or compliance with, any condition or provision of this Agreement to be
performed by such other party shall be deemed a waiver of similar or dissimilar
provisions or conditions at the same time or at any prior or subsequent time. No
agreement or representation, oral or otherwise, express or implied, with respect
to the subject matter hereof has been made by either party which is not set
forth expressly in this Agreement. This Agreement shall be governed by and
construed in accordance with the laws of the State of Ohio.
31. Prior Agreement. This Agreement amends, restates, and
extends the employment agreement originally entered into between Xxxxxxxxx and
Key (under its former name, Society Corporation), made December 5, 1990, and
amended and restated in its entirety as of October 1, 1993 and again as of
December 20, 1993 and subsequently further amended as of May 18, 1995, and is
effective as of the Effective Time. As of that time, the provisions of this
Agreement supersede the provisions of the December 5, 1990 agreement as amended
and restated in its entirety as of October 1, 1993 and again as of December 20,
1993 and subsequently further amended as of May 18, 1995, and that agreement and
all prior agreements on the same subject matter shall be of no further force or
effect.
KEYCORP
By
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Xxxxx Xxxxx, Senior Executive Vice President
and Chief Administrative Officer
-----------------------------------------
XXXXXX X. XXXXXXXXX
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