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Exhibit 10.7
KEYCORP
NON-QUALIFIED GRANT AGREEMENT
PERFORMANCE OPTION
Xxxxxx X. Xxxxxxxxx
By action of the Equity Based Compensation Subcommittee
("Subcommittee") of the Compensation and Organization Committee of the Board of
Directors of KeyCorp, taken pursuant to the KeyCorp Amended and Restated 1991
Equity Compensation Plan ("Plan") on November 19, 1997, you have been granted a
Non-Qualified Stock Option (the "Option") effective on January 2, 1998 (the
"Option Grant Date") to purchase 106,600 Common Shares at a price of $70.3125
per share (the "Exercise Price"), which may be exercised, subject to the
provisions of the Plan, from time to time, in part or with respect to the full
number of Common Shares then remaining subject to the Option, during the period
commencing on the Vesting Date (as hereinafter defined) and ending January 2,
2008. (Unless otherwise indicated, the capitalized terms used herein shall have
the same meaning as set forth in the Plan).
The Vesting Date shall be the earlier of:
1. The first date on which the conditions in (a) and (b) below have
been satisfied:
(a) The Fair Market Value of a Common Share exceeds
$74.00 for seven consecutive trading days during the
period beginning on the Option Grant Date and ending
December 31, 2000, $82.00 for seven consecutive
trading days during the period beginning on the sixth
trading day before January 1, 2001 and ending on
December 31, 2001, or $90.00 for seven consecutive
trading days during the period beginning on the sixth
trading day before January 1, 2002 and ending on
December 31, 2002, and
(b) KeyCorp's earnings per Common Share equal or exceed
$5.20 per Common Share for the year 1999 or any
calendar year prior thereto or $5.84 per Common Share
for the year 2000, or
2
2. The first day on which a Change of Control occurs after the
Option Grant Date and on or before December 31, 2002;
provided, however, if no Change of Control has occurred on or
before December 31, 2000 and the earnings per Common Share
condition in 1(b) above has not been satisfied for a year
ending on or before December 31, 2000, the Option shall
terminate on December 31, 2000.
The Option shall terminate on December 31, 2002 unless the Vesting Date
occurs on or before that date or unless the Option has been earlier terminated
in accordance with the proviso contained in 2 above. For purposes of 1(b) above,
earnings per Common Share shall be determined on the same basis as KeyCorp
reports earnings per Common Share in its annual report on Form 10-K (or any
successor form) filed with the Securities and Exchange Commission, adjusted for
the effects of unusual events (such as gains or losses from the sale of
subsidiaries or deposits in excess of 3% of average deposits or other
significant extraordinary items), all as determined by the Subcommittee in its
sole discretion. Reference is hereby made to the Amended and Restated Employment
Agreement, dated as of November 21, 1996, between KeyCorp and you (the
"Employment Agreement"). As used herein, the terms "Cause", "Voluntary
Resignation" and "Scheduled Term" shall have the respective meanings given to
them under the Employment Agreement. Unless your employment is terminated for
Cause or by Voluntary Resignation before the end of the Scheduled Term, you will
be treated, for all purposes under the Option (including vesting and period of
exercisability), as if your employment with KeyCorp continued through January 2,
2008 (irrespective of death, disability, or otherwise). If your employment is
terminated for Cause or by Voluntary Resignation before the end of the Scheduled
Term, the Option will, in all cases, immediately terminate if prior to the
Vesting Date.
The Option shall be governed by the terms, conditions, and provisions
of the Plan.
January 2, 1998
/s/ Xxxxxx X. Xxxxxxxx
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Xxxxxx X. Xxxxxxxx
Executive Vice President
ACCEPTANCE
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The undersigned hereby acknowledges receipt of the Plan, agrees to be
bound by the foregoing Agreement and agrees and consents to the terms,
conditions, and provisions of the Agreement, Plan and the Award evidenced by
this Agreement.
/s/ Xxxxxx X. Xxxxxxxxx
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Xxxxxx X. Xxxxxxxxx
