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EX 10.2
SECOND AMENDMENT TO AGREEMENT
THIS SECOND AMENDMENT TO AGREEMENT ("AMENDMENT") is made as of the 21st
day of July, 1999, between KEYCORP, an Ohio corporation ("KEY"), and XXXXX X.
XXXXX III ("XXXXX") and modifies the Employment Agreement originally entered
into between Key and Xxxxx as of May 15, 1997, as heretofore amended (the
"AGREEMENT"). Capitalized terms used in this Amendment and not otherwise defined
herein have the meanings ascribed to them in the Agreement.
Key has determined that it will be in the best interests of Key and its
Subsidiaries to enter into, and to make the changes provided for in, this
Amendment.
Key and Xxxxx agree, effective as of the date first set forth above, to
amend the Agreement and the Agreement is hereby amended as follows:
1. CERTAIN COMPENSATION ADDED TO AGREEMENT. The following new Section
4A is hereby added to the Agreement to add certain compensation guaranties to
the protection to be afforded to Xxxxx after the occurrence of a Change of
Control:
"4A. CERTAIN COMPENSATION GUARANTIES DURING TWO YEARS
FOLLOWING A CHANGE OF CONTROL. For so long as Xxxxx remains in the
employ of the Surviving Entity or one of its subsidiaries during the
period beginning on the day after any Change of Control and continuing
through the second anniversary of that Change of Control (the period of
Xxxxx'x employment during such two year period being herein the
"Guaranteed Compensation Period"), Xxxxx shall be entitled to the
incentive compensation guaranty set forth in Section 4A.1 and to the
equity compensation guaranty set forth in Section 4A.2.
4A.1 GUARANTEED LEVEL OF INCENTIVE COMPENSATION. Except as
provided in (c) below (which provides for a forfeiture of unpaid
amounts if Xxxxx'x employment is terminated for Cause) and the last
sentence of (a) below (which provides for a potential reduction in
amount if based on overall corporate performance), the Surviving Entity
shall cause Xxxxx to receive, during the Guaranteed Compensation
Period, as incentive compensation, an amount that, on an annualized
basis, is at least equal to Xxxxx'x Average Annual Incentive
Compensation. The guaranty set forth in the immediately preceding
sentence (the "Incentive Compensation Guaranty") establishes a minimum
amount of incentive compensation that must be paid to Xxxxx with
respect to Xxxxx'x employment during the Guaranteed Compensation
Period. Except as otherwise provided in (a), (b), or (c) of this
Section 4A.1 below, the guaranteed incentive compensation for the
Guaranteed Compensation Period shall be paid to Xxxxx quarterly in
arrears, within 30 days after the end of each calendar quarter, for
each quarter (or portion thereof) during the Guaranteed Compensation
Period.
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(a) If and to the extent Xxxxx, together with similarly situated
executives of the Surviving Entity, is a participant in one or
more bona fide incentive compensation plans during the
Guaranteed Compensation Period, the Surviving Entity may defer
payment of guaranteed incentive compensation payable under
this Section 4A.1 up to the amount of the target award for
Xxxxx under that incentive compensation plan (provided,
however, if the compensation cycle under the incentive
compensation plan includes time periods outside the Guaranteed
Compensation Period, the deferral shall be up to a
proportionate amount of the target award) until such time as
payments are regularly scheduled to be made under that
incentive compensation plan, at which time the Surviving
Entity shall pay the deferred amount plus any other amount, if
any, to which Xxxxx is then entitled under the plan that has
not been earlier paid. (This could result in a guaranteed
payment being made after the end of the Guaranteed
Compensation Period, for example, where the compensation cycle
under the incentive compensation plan ends after the end of
the Guaranteed Compensation Period). Notwithstanding the
foregoing, if the Surviving Entity, in administering a bona
fide incentive compensation plan in which Xxxxx participates,
in good faith and without discriminating against Xxxxx,
establishes or utilizes a factor which is intended to reflect
or rate for the compensation cycle in question the
corporation's overall performance and that performance factor
is uniformly applied (either in establishing an incentive
compensation pool or against each participant's target) to
similarly situated officers as Xxxxx, the Surviving Entity may
elect to apply that performance factor against the target
award for Xxxxx under the incentive compensation plan in
question and, if applying that factor reduces Xxxxx'x target
award, the amount of guaranteed incentive compensation payable
under this Section 4A.1 which has been deferred under this
paragraph (a) on account of the incentive compensation plan in
question may be reduced by the same amount (or, if the
compensation cycle includes time periods outside the
Guaranteed Compensation Period, the reduction shall be by a
proportionate amount).
(b) If Xxxxx'x employment terminates for any reason other than
Cause, all unpaid guaranteed compensation with respect to the
Guaranteed Compensation Period shall be paid in a lump sum
within 30 business days following the Termination Date.
(c) If Xxxxx'x employment is terminated by the Surviving Entity
for Cause, the Surviving Entity shall not be required to pay
Xxxxx any additional amount of incentive compensation on
account of the Incentive Compensation Guaranty that was not
required to have been paid before the Termination Date.
4A.2 GUARANTEED PARTICIPATION IN EQUITY BASED COMPENSATION
PLANS. During the Guaranteed Compensation Period, Xxxxx shall
participate fully (and at a level at least equivalent to that of
comparable senior executives of the Surviving Entity) in each and every
stock option, stock appreciation, or similar equity based plan in which
similarly situated executives of the Surviving Entity generally
participate. The guaranty of full
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participation set forth in this Section 4A.2 is hereinafter sometimes
referred to as the "Equity Compensation Guaranty."
2. FAILURE TO SATISFY INCENTIVE COMPENSATION GUARANTY OR EQUITY
COMPENSATION GUARANTY ADDED AS CONSTITUTING CONSTRUCTIVE TERMINATION DURING TWO
YEARS AFTER A CHANGE OF CONTROL. Section 5.7(c) of the Agreement is amended to
read as follows:
"(c) following notice by Xxxxx to the Surviving Entity and an
opportunity by the Surviving Entity to cure, the Surviving
Entity fails to satisfy the Incentive Compensation Guaranty or
the Equity Compensation Guaranty or Xxxxx is otherwise
excluded from full participation in any incentive, option, or
other compensation plan that is generally applicable to senior
officers of the Surviving Entity after the Change of Control;
or"
The following paragraph is added at the end of Section 5.7 of the Agreement.
"For purposes of clause (c), the Surviving Entity will be deemed to
have had an opportunity to cure and to have failed to effected a cure
if the failure persists (as determined in good faith by Xxxxx) for more
than seven calendar days after Xxxxx has given notice to the Surviving
Entity of the existence of that failure."
3. AGREEMENT REMAINS IN FULL FORCE AND EFFECT. This Amendment is made
by Key and Xxxxx in writing, each intending to be legally bound. Each of Key and
Xxxxx hereby confirms that, except as amended by this Amendment, the Agreement
is and remains in full force and effect.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.
KEYCORP
By
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Xxxxxx X. Xxxxxxxxx
Chairman of the Board and
Chief Executive Officer
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XXXXX X. XXXXX III
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