1
Exhibit 10.10
AMENDMENT TO EMPLOYMENT AGREEMENT
THIS AMENDMENT (this "Amendment") is made at Cleveland, Ohio, as of the
20th day of November, 1997, between KeyCorp, an Ohio corporation ("Key"), and
XXXXX X. XXXXX III ("Xxxxx") and amends the Employment Agreement between Key
and Xxxxx dated as of May 15, 1997 (the "Employment Agreement").
WHEREAS, Key is in the process of adopting a long term incentive
compensation plan that provides for payouts every other year rather than every
year as has been the practice and the parties deem it appropriate to amend the
Employment Agreement to appropriately take into account this anticipated change,
along with changes made in Key's short term incentive compensation program.
NOW, THEREFORE, Xxxxx and Key hereby amend the Employment Agreement by
amending Section 21.2 thereof to read, in its entirety, as follows:
21.2 Average Annual Incentive Compensation. The term "Average Annual
Incentive Compensation" means the sum of Average Short Term Incentive
Compensation, as defined in clause (a) below, and Average Long Term Incentive
Compensation, as defined in clause (b) below.
(a) The term "Average Short Term Incentive Compensation" means the higher
of:
(i) the average of the short term incentive compensation payable to
Xxxxx for each of the last two years immediately preceding the Relevant
Year (as defined below in this clause (a)) or, if for any reason short
term incentive compensation was payable to Xxxxx for only one of those
two years, the amount of short term incentive compensation payable to
Xxxxx for that year, and
(ii) Xxxxx'x targeted short term incentive compensation for the
Relevant Year or for the year immediately preceding the Relevant Year,
whichever is higher.
For purposes of this Section 21.2, the term "Relevant Year" means the year in
which the Termination Date occurs unless, during the two year period ending on
the Termination Date, there has occurred one or more Changes of Control, in
which case the term "Relevant Year" means the year in which occurred the first
Change of Control that occurred during that two year period.
(b) The term "Average Long Term Incentive Compensation" means the higher
of:
(i) the average of the "Applicable Amounts" (as defined in clauses (x)
and (y) below) of the long term incentive compensation awards payable
to Xxxxx for each of the last two multi-year cycles that ended before
the Relevant Year or, if, for any reason, long term incentive
compensation was payable to Xxxxx for only one of
2
those two multi-year cycles, the Applicable Amount of the long term
incentive compensation award payable to Xxxxx for that multi-year
cycle, and
(ii) the Applicable Amount of Xxxxx'x targeted long term incentive
compensation award for the multi-year cycle that began with the
Relevant Year or, if higher or if no multi-year cycle began with the
Relevant Year, the Applicable Amount of Xxxxx'x targeted long term
incentive compensation award for the most recently commenced
multi-year cycle that began before the Relevant Year,
For these purposes:
(x) if the plan in question provides for a series of successive
multi-year periods, the last year of each of which follows the last
year of the immediately preceding multi-year period under the plan by
a single year (i.e., a plan that provides for possible payment of long
term incentive compensation each and every year for as long as the
plan continues), the Applicable Amount of the award for each multiyear
cycle under that plan shall be the full amount (i.e.: 100%) of the
award for that multi-year period; and
(y) if the plan in question provides for a series of successive
multi-year periods, the last year of each of which follows the last
year of the immediately preceding period under the plan by two years
(i.e., a plan that provides for possible payment of long term
incentive compensation every other year for as long as the plan
continues), the Applicable Amount of the award for each multi-year
cycle under that plan shall be one half of the full amount (i.e.: 50%)
of the award for that multi-year period.
The effect of clauses (x) and (y) is shown in the following table which assumes
that the multi-year long term incentive compensation plan in question was one
described in clause (x) (contemplating payments every year for successive
three-year cycles) through the three-year cycle ending with the year 1999 and
one described in clause (y) (contemplating payments every other year for
successive four-year cycles) starting with a four-year cycle ending with the
year 2001:
-------------------------------------------------------------------------------
Multi-Year Last "Applicable Amount" of Full Award
Cycle Year for the Multi-Year Cycle
-------------------------------------------------------------------------------
1995-1997 1997 100%
-------------------------------------------------------------------------------
1996-1998 1998 100%
-------------------------------------------------------------------------------
1997-1999 1999 100%
-------------------------------------------------------------------------------
1998-2001 2001 50%
-------------------------------------------------------------------------------
2000-2003 2003 50%
-------------------------------------------------------------------------------
2002-2005 2005 50%
-------------------------------------------------------------------------------
As used in this Section 21.2, incentive compensation means any cash based
incentive compensation, including bonuses and is calculated before any reduction
on account of deferrals; short term incentive compensation means incentive
compensation under all plans for periods of
3
time of one year or less and long term incentive compensation means incentive
compensation under all plans for periods of time of more than one year; targeted
long term or short term incentive compensation, as the case may be, means: (w)
if the incentive compensation plan, program, or arrangement in question
designates a targeted amount or a targeted level of achievement applicable to
Xxxxx, it means that targeted amount or level, (x) if the incentive compensation
plan, program, or arrangement in question has only one level of payout
applicable to Xxxxx (other than zero), it means that level (i.e. the level other
than zero), (y) if the incentive compensation plan, program, or arrangement in
question does not designate a targeted amount or level of achievement applicable
to Xxxxx but does have multiple anticipated levels of possible payout or
achievement applicable to Xxxxx, it means (in each case excluding from
consideration any level that results in zero payout) the middle level of payout
or achievement applicable to Xxxxx (or if there are an even number of levels,
the average of the two levels if there are only two levels or the average of the
middle two levels if there are four or more levels), and (z) in all other cases,
the amount anticipated or projected to be paid under the plan, program, or
arrangement in question at the time the performance period in question
commenced.
IN WITNESS WHEREOF, the parties hereto have executed this Amendment as of
the date first above written.
KEYCORP
By:
-------------------------------------- ---------------------------------
Xxxxxx X. Xxxxxxxxx XXXXX X. XXXXX III
Chairman and Chief Executive Officer
