Attached files
file | filename |
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10-K/A - FORM 10-K/A - KEYCORP /NEW/ | l40382e10vkza.htm |
EX-23 - EX-23 - KEYCORP /NEW/ | l40382exv23.htm |
EX-32.1 - EX-32.1 - KEYCORP /NEW/ | l40382exv32w1.htm |
EX-99.4 - EX-99.4 - KEYCORP /NEW/ | l40382exv99w4.htm |
EX-31.1 - EX-31.1 - KEYCORP /NEW/ | l40382exv31w1.htm |
EX-99.3 - EX-99.3 - KEYCORP /NEW/ | l40382exv99w3.htm |
EX-31.2 - EX-31.2 - KEYCORP /NEW/ | l40382exv31w2.htm |
EX-32.2 - EX-32.2 - KEYCORP /NEW/ | l40382exv32w2.htm |
Exhibit 10.40
KEYCORP
SECOND EXECUTIVE SUPPLEMENTAL PENSION PLAN
SECOND EXECUTIVE SUPPLEMENTAL PENSION PLAN
ARTICLE I
THE PLAN
The KeyCorp Second Executive Supplemental Pension Plan (the Plan), originally established on
December 28, 2004 and made effective January 1, 2005, and thereafter amended and restated as of
December 31, 2006 to reflect the merger of the KeyCorp Executive Supplemental Pension Plan into the
Plan effective December 31, 2006, and thereafter amended on December 31, 2007 and September 1,
2009, is hereby restated to reflect the December 31, 2009 Plan amendment to freeze all new
additional accruals under the Plan. It is the intention of KeyCorp and it is the understanding of
those employees covered under the Plan, that the Plan constitutes a nonqualified retirement plan
for a select group of management or highly compensated employees as described in Section 201(2),
Section 301(3) and Section 401(a)(1) of the Employee Retirement Income Security Act of 1974, as
amended, (ERISA) and as such, the Plan is unfunded for tax purposes and for purposes of Title I
of ERISA.
ARTICLE II
DEFINITIONS
2.1 Meanings of Definitions. As used herein, the following words and phrases shall have
the meanings hereinafter set forth, unless a different meaning is plainly required by the context:
(a) Average Interest Credit shall mean the average of the Interest Credits (as defined in
the Pension Plan) for the three (3) consecutive calendar years ending with the year of the
Participants termination.
(b) Average Treasury Rate shall mean the average of the Treasury Rates (as defined in the
Pension Plan) for the three (3) consecutive calendar years ending with the year of the
Participants termination.
(c) Equity/Compensation Award shall mean one-half (50%) of the value of an award granted
under the KeyCorp 2004 Equity Compensation Plan for any Plan year. The term Equity/Compensation
Award may include Stock Appreciation Rights, Restricted Stock, Restricted Stock Units,
Performance Shares, and/or Performance Units, but shall specifically not include Options as
those terms have been defined in accordance with the provisions of the KeyCorp 2004 Equity
Compensation Plan.
(d) Beneficiary shall mean the Participants surviving spouse who is entitled to receive the
benefits hereunder in the event the Participant dies before his or her Supplemental Pension Benefit
shall have been distributed to him or her.
(e) Credited Service shall be calculated with respect to a Participant by measuring the
period of service commencing on the Participants Employment Commencement Date and Re-Employment
Commencement Date, if applicable, and ending on the Participants Severance from Service Date, and
shall be computed based on each full month during which time the Employee is employed by an
Employer.
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(f) Compensation for any Plan Year or any partial Plan Year in which the Participant incurs
a Severance From Service Date shall mean the entire amount of base compensation paid to such
Participant during such period by reason of his employment as an Employee, as reported for federal
income tax purposes, or such base compensation which would have been paid except for (1) the timing
of an Employers payroll processing operations, (2) the Participants election to participate in
the KeyCorp 401(k) Savings Plan, the KeyCorp Excess 401(k) Savings Plan, a transportation
reimbursement plan, and/or the KeyCorp Flexible Benefits Plan, and/or (3) the Participants
election to defer such base compensation under the KeyCorp Deferred Compensation Plan or the
KeyCorp Deferred Savings Plan for the applicable Plan Year, provided, however, that the term
Compensation shall specifically exclude:
(i) | any amount attributable to the Participants exercise of stock appreciation rights and the amount of any gain to the Participant upon the exercise of stock options; | ||
(ii) | any amount attributable to the Participants receipt of non-cash remuneration whether or not it is included in the Participants income for federal income tax purposes; | ||
(iii) | any amount attributable to the Participants receipt of moving expenses and any relocation bonus paid to the Participant during the Plan Year; | ||
(iv) | any amount attributable to a lump sum severance payment paid by an Employer or the Corporation to the Participant; | ||
(v) | any amount attributable to fringe benefits (cash and non-cash); | ||
(vi) | any amount attributable to any bonus or payment made as an inducement for the Participant to accept employment with an Employer; | ||
(vii) | any amount paid to the Participant during the Plan Year which is attributable to interest earned on compensation which had been deferred under a plan of an Employer or the Corporation; and | ||
(viii) | any amount paid for any period after the Participants termination or retirement date, and | ||
(ix) | any deferred cash awards that upon vesting are paid to the Participant. |
(g) Corporation shall mean KeyCorp, an Ohio Corporation, its corporate successors, and any
corporation or corporations into or with which it may be merged or consolidated.
(h) Disability shall mean (1) a physical or mental disability which prevents a Participant
from performing the duties such Participant was employed to perform for his or her Employer when
such disability commenced, (2) has resulted in the Participants absence from work for 180
qualifying days, and (3) application has been made for the Participants disability coverage under
the KeyCorp Long Term Disability Plan and which constitutes a separation from service in accordance
with the requirements of Section 409A of the Code.
(i) Early Retirement Date shall mean the date of Participants retirement from his or her
employment with Employer on or after the Participants attainment of age 55 and completion of a
minimum of ten years of Credited Service, but prior to the Participants Normal Retirement Date.
(j) Employee shall mean the employees listed on Exhibit A attached hereto.
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(k) Employer shall mean the Corporation and its subsidiaries unless specifically excluded as
an Employer for Plan purposes by written action by an officer of the Corporation and approved by
the Corporation. An Employers participation in the Plan shall be subject to any conditions or
requirements made by the Corporation, and each Employer shall be deemed to appoint the Corporation
as its exclusive agent under the Plan as long as it continues as a subsidiary of the Corporation.
(l) Excess Pension Program Benefit shall mean the Participants collective nonqualified
pension benefit accrued under the KeyCorp Excess Cash Balance Pension Plan and the KeyCorp Second
Excess Cash Balance Pension Plan subject to the terms and conditions of each respective Plan.
(m) Executive Supplemental Pension Program Benefit shall mean the Participants collective
nonqualified pension benefit accrued under the KeyCorp Executive Supplemental Pension Plan and the
KeyCorp Second Executive Supplemental Pension Plan subject to the terms and conditions of each
respective Plan.
(n) Final Average Compensation shall mean with respect to any Participant the annual average
of his or her highest aggregate Compensation for any period of five consecutive years within the
period of ten consecutive years immediately prior to his or her retirement, death, or other
termination of employment, or any termination of the Plan, whichever first occurs. If the
Participant receives no Compensation for any portion of such five years because of an absence from
work, there shall be treated as Compensation received during such period of absence an amount equal
to the Compensation the Participant would have received had he or she not been absent, such amount
to be determined by the Corporation on the basis of such Participants Compensation in effect
immediately prior to such absence. In computing a Participants Final Average Compensation, there
shall be included the Participants highest five Incentive Compensation Awards granted under an
Incentive Compensation Plan during the ten year period immediately preceding the earliest of his or
her retirement, death, disability, or other termination of employment.
(o) Employment Commencement Date of a Participant shall mean the date on which he or she
first performs an Hour of Service for an Employer.
(p) Hour of Service shall mean any hour for which an Employee is paid or entitled to payment
by an Employer for the performance of duties.
(q) Incentive Compensation Award for any Plan year shall collectively mean the short term
incentive compensation award (whether in cash or common shares of the Corporation, and whether paid
or deferred, or a combination of both) and the long term incentive compensation award (whether in
cash or common shares of the Corporation, and whether paid or deferred, or a combination of both)
(if any) granted to a Participant under an Incentive Compensation Plan, as follows:
| An incentive compensation award granted under the KeyCorp Annual Incentive Plan, the KeyCorp Short Term Incentive Compensation Plan, the KeyCorp Management Incentive Compensation Plan, and/or such other Employer-sponsored line of business Incentive Compensation Plan which shall constitute an Incentive Compensation Award for the year in which the award is earned (without regard to the actual time of payment). | ||
| An incentive compensation award granted under the KeyCorp Long Term Incentive Compensation Plan (LTIC Plan) with respect to any multi-year performance period which shall be deemed to be for the last year of the multi-year period without regard to the actual time of payment of the award. Accordingly, an incentive compensation award granted under the LTIC Plan with respect to the |
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three-year performance period of 1993, 1994, and 1995 will be deemed to be for 1995 (without regard to the actual time of payment), and the entire incentive compensation award under the LTIC Plan for that performance period will be an Incentive Compensation Award for the year 1995. | |||
| An incentive compensation award granted under the KeyCorp Long Term Incentive Plan (Long Term Plan) with respect to any multi-year period which shall be deemed to be for the last year of the multi-year performance period and for the year immediately following such year (without regard to the actual time of payment). Accordingly, an award granted under the Long Term Plan with respect to the four-year performance period of 1998, 1999, 2000, and 2001 shall be deemed to be for the years 2001 and 2002, with one-half the award allocated to the year 2001, and one-half the award allocated to the year 2002. | ||
| An incentive compensation award granted in the form of restricted stock under the KeyCorp Amended and Restated 1991 Equity Compensation Plan with respect to any multi-year period (but specifically excluding those awards applicable to the 2002-2003 multi-year period), which shall be deemed to be for the year in which the award (grant) is made to the Participant; provided, however, that only those shares of restricted stock that have vested as of the Participants termination date shall be utilized for purposes of determining the Participants Incentive Compensation Award. The fair market value of such shares as of the date of the restricted stock grant multiplied by the number of vested shares as of the Participants termination date shall determine the value of such Incentive Compensation Award for purposes of calculating the Participants Supplemental Pension Benefit under the provisions of Article III of the Plan. | ||
Notwithstanding the foregoing, however, in calculating the Participants Supplemental Pension Benefit under the provisions of Article III of the Plan, if it is determined that an incentive compensation award granted under the KeyCorp Amended and Restated 1991 Equity Compensation Plan would produce a larger monthly Supplemental Pension Benefit for the Participant if the award was included in the year in which the award (or any part of the award) initially vested rather than in the year in which the award was granted, then such incentive compensation award shall be included in the year in which the award (or any part of the award) initially vested rather than for the year in which the award was granted. | |||
If at the time of the Participants termination date, the Participant maintains shares of not forfeited restricted stock and such restricted stock later vests in conjunction with the passage of time or with the Corporations attainment of certain performance criteria, or otherwise, then as of such subsequent vesting date the Participants monthly Supplemental Pension Benefit shall be recalculated to include such newly vested shares. Such newly vested shares shall relate to the award in which such shares were granted under the KeyCorp Amended and Restated 1991 Equity Compensation Plan, and shall be included as a part of that award (based on either the date granted or the date initially vested, whichever date was actually used by the Plan in calculating the Participants initial monthly Supplemental Pension Benefit). | |||
For those limited Participants who, for Plan purposes and in accordance with the provisions of this Section 2.1(q) hereof, received Incentive Compensation Award(s) granted in the form of time-lapsed restricted stock award(s) and/or |
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performance shares under the KeyCorp Amended and Restated 1991 Equity Compensation Plan with respect to any multi-year period, the term Incentive Compensation Award shall also include those Equity/Compensation Award(s) granted to the Participant under the 2004 Equity Compensation Plan. An Equity/Compensation Award shall be deemed to be for the year in which the Equity/Compensation Award vests, provided however, that if such Equity/Compensation Award vests after the close of the applicable Awards award cycle, then such Award will be deemed to for the last day of the final full year of the applicable Awards award cycle. If an Award contains more than one award cycle, then such Award shall be deemed to be for the last day of the final full year of the longest award cycle of the Award. If the Equity/Compensation Award is in the form of Restricted Stock, Restricted Stock Units, Performance Units or Performance Shares, the fair market value of such shares as of the date of the Equity/Compensation Award grant multiplied by the number of vested shares as of the Participants termination date shall determine the value of such Incentive Compensation Award for purposes of calculating the Participants Supplemental Pension Benefit under the provisions of Article III of the Plan. | |||
Notwithstanding the foregoing provisions of this Section 2.1(q) hereof, in calculating a Participants Incentive Compensation Award for any 12 month period, there shall be included only one award granted under the KeyCorp Amended and Restated 1991 Equity Compensation Plan, or Equity/Compensation Award under the KeyCorp 2004 Equity Compensation Plan included for purposes of determining the Participants Incentive Compensation Award for such 12 month period. | |||
| The (i) value of those vested deferred cash awards granted as a part of the Participants annual incentive compensation award, if any, will be included for purposes of determining the Participants Incentive Compensation Award under the Plan as of the year in which the applicable annual incentive compensation is earned (rather than paid), and (ii) 50% of the value of those deferred cash awards granted as a part of the Participants long term incentive award, if any, will be included for purposes of determining the Participants Incentive Compensation Award under the Plan as of the last business day of the final full year of the applicable long term awards cycle (rather than vesting date), provided, however, that if an award contains more than one award cycle, then in such event, the value of the award shall be included for purposes of determining the Participants Incentive Compensation Award under the Plan as of the last business day of the final full year of the longest award cycle within that award. |
(r) Incentive Compensation Plan shall mean the KeyCorp Management Incentive Compensation
Plan, the KeyCorp Annual Incentive Plan, the KeyCorp Short Term Incentive Compensation Plan, the
KeyCorp Long Term Incentive Compensation Plan, the KeyCorp Long Term Incentive Plan, the KeyCorp
Amended and Restated 1991 Equity Compensation Plan, the KeyCorp 2004 Equity Compensation Plan,
and/or such other Employer or KeyCorp-sponsored incentive compensation plan that KeyCorp in its
sole discretion determines constitutes an Incentive Compensation Plan for purposes of this
Section 2.1(r), as may be amended from time to time.
(s) Harmful Activity shall have occurred if the Participant shall do any one or more of the
following:
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(i) | Use, publish, sell, trade or otherwise disclose Non-Public Information of KeyCorp unless such prohibited activity was inadvertent, done in good faith and did not cause significant harm to KeyCorp. | ||
(ii) | After notice from KeyCorp, fail to return to KeyCorp any document, data, or thing in his or her possession or to which the Participant has access that may involve Non-Public Information of KeyCorp. | ||
(iii) | After notice from KeyCorp, fail to assign to KeyCorp all right, title, and interest in and to any confidential or non-confidential Intellectual Property which the Participant created, in whole or in part, during employment with KeyCorp, including, without limitation, copyrights, trademarks, service marks, and patents in or to (or associated with) such Intellectual Property. | ||
(iv) | After notice from KeyCorp, fail to agree to do any acts and sign any document reasonably requested by KeyCorp to assign and convey all right, title, and interest in and to any confidential or non-confidential Intellectual Property which the Participant created, in whole or in part, during employment with KeyCorp, including, without limitation, the signing of patent applications and assignments thereof. | ||
(v) | Upon the Participants own behalf or upon behalf of any other person or entity that competes or plans to compete with KeyCorp, solicit or entice for employment or hire any KeyCorp employee. | ||
(vi) | Upon the Participants own behalf or upon behalf of any other person or entity that competes or plans to compete with KeyCorp, call upon, solicit, or do business with (other than business which does not compete with any business conducted by KeyCorp) any KeyCorp customer the Participant called upon, solicited, interacted with, or became acquainted with, or learned of through access to information (whether or not such information is or was non-public) while the Participant was employed at KeyCorp unless such prohibited activity was inadvertent, done in good faith, and did not involve a customer whom the Participant should have reasonably known was a customer of KeyCorp. | ||
(vii) | Upon the Participants own behalf or upon behalf of any other person or entity that competes or plans to compete with KeyCorp, after notice from KeyCorp, continue to engage in any business activity in competition with KeyCorp in the same or a closely related activity that the Participant was engaged in for KeyCorp during the one year period prior to the termination of the Participants employment. | ||
For purposes of this Section 2.1(s) the term: | |||
Intellectual Property shall mean any invention, idea, product, method of doing business, market or business plan, process, program, software, formula, method, work of authorship, or other information, or thing relating to KeyCorp or any of its businesses. | |||
Non-Public Information shall mean, but is not limited to, trade secrets, confidential processes, programs, software, formulas, methods, business information or plans, financial information, and listings of names (e.g., employees, customers, and suppliers) that are developed, owned, utilized, or maintained by an employer such as KeyCorp, and that of its customers or suppliers, and that are not generally known by the public. | |||
KeyCorp shall include KeyCorp, its subsidiaries, and its affiliates. |
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(t) Normal Retirement Date shall mean the first day of the month coinciding with or
immediately following a Participants 65th birthday or, if later, the fifth anniversary of the
Participants Employment Commencement Date.
(u) Participant shall mean an Employee employed by an Employer in a position classified as a
job grade 89 or above, who is selected by the Corporation to become a Participant in the Plan, and
whose participation in the Plan has not been terminated by the Corporation. The Corporation
retains the right at all times, in its sole and absolute discretion to determine who shall become
and remain a Participant in the Plan.
(v) Pension Plan shall mean the KeyCorp Cash Balance Pension Plan with all amendments that
may be made thereto.
(w) Separation from Service shall occur on the earlier of the date on which a Participant
quits, retires, is terminated or dies, provided, however, that such date shall conform with the
requirements of Section 409A of the Code.
(x) Social Security Primary Insurance Amount shall mean the amount estimated by the
Corporation that is expected to be paid to a Participant under the Federal Insurance Contributions
Act. Such amount shall be calculated assuming the Participant receives payment at age 65 or the
Participants Normal Retirement Date, whichever is later, and that he or she receives no earnings
for the purpose of calculating this amount after the date of the Participants termination of
employment. All compensation prior to the Participants date of termination of employment with an
Employer shall be based upon a salary scale, projected backwards, which is the actual change in the
average compensation from year to year, as indexed, and determined by the Social Security
Administration.
(y) Supplemental Pension Benefit shall mean the pension benefit payable pursuant to the
terms of the Plan to a Participant meeting the eligibility requirements of Section 3.1 of the Plan.
2.2 Construction. Unless the context otherwise indicates, the masculine wherever used
shall include the feminine and neuter, the singular shall include the plural, words such as
herein, hereof, hereby, hereunder and words of similar import shall refer to the Plan as a
whole and not any particular part thereof.
All other capitalized but undefined terms used herein, shall have the meaning given to them in
the Pension Plan.
ARTICLE III
SUPPLEMENTAL PENSION BENEFIT
3.1 Eligibility. Subject to the provisions of Article V hereof, a Participant shall be
eligible for a Supplemental Pension Benefit hereunder if the Participant (i) retires on or after
age 65 with five or more years of Credited Service, (ii) terminates employment with an Employer on
or after age 55 with ten or more years of Credited Service, (iii) has a termination of employment
from his or her Employer upon becoming Disabled, or (iv) dies after completing five years of
Credited Service, and has a Beneficiary who is eligible for a benefit under the Pension Plan.
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A Participant shall also be eligible for an Supplemental Pension Benefit if the Participant becomes
involuntarily terminated from his or her employment with an Employer for reasons other than the
Participants Discharge for Cause, and (i) as of the Participants termination date the Participant
has a minimum of twenty-five (25) or more years of Credited Service, and (ii) the Participant
enters into a written non-solicitation and non-compete agreement under terms that are satisfactory
to the Employer.
For purposes of this Section 3.1, hereof, the term Discharge for Cause shall mean a
Participants employment termination that is the result of the Participants violation of the
Employers policies, practices or procedures, violation of city, state, or federal law, or failure
to perform his or her assigned job duties in a satisfactory manner. The Employer shall determine
whether a Participant has been Discharged for Cause.
Notwithstanding any of the forgoing provisions of this Section 3.1, however, a Participants
eligibility for a Supplemental Pension Benefit shall be subject to the requirements of Article V of
the Plan.
3.2 Supplemental Pension Benefit Calculation. The amount of any Supplemental Pension
Benefit to be paid to a Participant under the terms of the Plan on or after the Participants
Normal Retirement Date shall be calculated as follows:
A Participants Supplemental Pension Benefit shall equal the difference between
(a) and(b) where:
1. | (a) is equal to 2% times the Participants years of Credited Service (up to a Plan maximum of 25 years) times the Participants Final Average Compensation, and | ||
2. | (b) is equal to the sum of: |
(i) | the Participants accrued and vested annual pension benefit under the Pension Plan calculated as of the participants Normal Retirement Date, payable in the form of a single life annuity option, and | ||
(ii) | the Participants annual estimated Social Security Primary Insurance Amount payable at the Participants Normal Retirement Date. |
For purposes of calculating a Participants Supplemental Pension Benefit under this Section
3.2 hereof, the Participants annual pension benefit under the Pension Plan shall be the
Participants Accrued Benefit as of the Participants termination date calculated in accordance
with the provisions of Article IV of the Pension Plan as if such benefit were to be paid in the
form of a single life annuity; if the Participant receives his or her Pension Plan benefit under a
Predecessor Plan grandfathered formula, such annual pension benefit for purposes of this Section
3.2 hereof, shall be the benefit payable to the Participant under the terms of the Pension Plans
Predecessor Plan grandfathered formula as of the Participants termination date, as if such benefit
were to be paid in the form of a single life annuity.
3.3 Early Retirement Election. In the event the Participant receives his or her
Supplemental Pension Benefit on or after the Participants Early Retirement Date but prior to the
Participants Normal Retirement Date, the Participants Supplemental Pension Benefit shall be
calculated
as provided in accordance with Section 3.2 hereof, provided, however, that in determining the
Participants annual Pension Plan benefit as of the Participants Normal Retirement Date, the
Participants Accrued Benefit under the Pension Plan as of his or her termination date shall be
increased for purposes of this Plan with an imputed Average Interest Credit to reflect the
Participants Pension Plan benefit at his
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or her Normal Retirement Date and shall be converted to the form of a single life annuity option
using the Average Treasury Rate and the GATT Mortality Table. The amount of the Participants
annual Supplemental Pension Benefit otherwise determined under Section 3.2 and Section 3.3 hereof,
shall be reduced by 3.6% for each year that the Participant is between the ages of 55 and 60 and by
4.8% for each year after the Participant attains age 60 to actuarially adjust the commencement of
the Participants Supplemental Pension Benefit prior to his or her Normal Retirement Date.
3.4 Actuarial Factors. The Supplemental Pension Benefit payable to a Participant or
Participants Beneficiary in a form other than a single life annuity shall be actuarially
equivalent to such single life annuity payment option. In making the determination provided for in
this Article III, the Corporation shall rely upon calculations made by the independent actuaries
for the Plan, who shall determine actuarially equivalent benefits under the Plan by applying the
UP-1984 Mortality Table (set back two years) and using an interest rate of 6%.
3.5 Recalculation as a Result of Harmful Activity. Notwithstanding the foregoing
provisions of Section 3.2 and Section 3.3 hereof, the Corporation reserves the right at all times
to recalculate a Participants Supplemental Pension Benefit, if it is determined that within six
months of the Participants termination date the Participant engaged in any Harmful Activity, as
that term is defined in accordance with Section 2.1(s) of the Plan, which resulted in the
forfeiture of all or any portion of the Participants restricted share award(s) under the KeyCorp
Amended and Restated 1991 Equity Compensation Plan or Equity/Compensation Awards granted under the
KeyCorp 2004 Equity Compensation Plan (if applicable). Such recalculation shall relate back to the
Participants original date of termination, and any Supplemental Pension Benefit payment paid to
the Participant in excess of such recalculated Supplemental Pension Benefit amount shall be offset
against any future Supplemental Pension Benefit payments to be paid to the Participant.
ARTICLE IV
PAYMENT OF SUPPLEMENTAL PENSION BENEFIT
4.1 Immediate Payment Upon Termination or Retirement of Participant. Subject to the
provisions of Section 4.2 and Section 4.3 hereof, a Participant shall receive an immediate
distribution of his or her Supplemental Pension Benefit within 90 days following (1) the
Participants attainment of age 55, and (2) the Participants termination of employment under
circumstances which constitute a Separation from Service in accordance with the requirements of
Section 409A of the Code. Payment of the Participants Supplemental Pension Benefit shall be made
in the form of a single life annuity, unless the Participant elects in writing a minimum of thirty
days prior to his or her termination date to receive payment of his or her Supplemental Pension
Benefit under a different form of payment. The forms of payment from which a Participant may elect
shall provide a benefit that is actuarially equivalent to the Participants single life annuity
payment as calculated under the provisions of Section 3.2 hereof, and shall be identical to those
forms of payment specified in the Pension Plan, provided, however, that the lump sum payment option
available under the Pension Plan shall not be available under this Plan. Such method of payment,
once elected by the Participant, shall be irrevocable.
4.2 Deferred Benefit Payment. A Participant may elect to defer the receipt of his or her
Supplemental Pension Benefit until a date specified by the Participant, subject to the following
requirements: (i) the Participant notifies the Corporation in writing of his or her deferral
election a minimum of twelve months prior to the Participants termination of employment, (ii) the
Participant specifies the future date on which such Supplemental Pension Benefit shall be
distributed, (iii) the Participants requested deferral period is for a period of not less than
five years following the Participants
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Separation from Service, and (iv) the Participant commences distribution of his or her Supplemental
Pension Benefit no later than the first day of the month immediately following the Participants
sixty-fifth (65th) birthday. The election to defer, once made by the Participant, shall be
irrevocable.
4.3 Payment Limitation for Key Employees. Notwithstanding any other provision of the
Plan to the contrary, in the event that the Participant constitutes a key employee of the
Corporation, (as that term is defined in accordance with Section 416(i) of the Code without regard
to paragraph (5) thereof), distributions of the Participants Supplemental Pension Benefit may not
be made before the first day of the seventh month following the Participants date of separation
from service (or, if earlier, the date of the Participants death). The term key employee and
the term separation from service shall be defined for Plan purposes in accordance with the
requirements of Section 409A of the Code and applicable regulations issued thereunder.
4.4 Payment Upon the Death of the Participant.
(a) Upon the death of a Participant who has met the service requirements of Section 3.1, but
who has not yet commenced distribution of his or her Supplemental Pension Benefit, there shall be
paid to the Participants Beneficiary 50% of the Supplemental Pension Benefit which the Participant
would have been entitled to receive under the provisions of Section 3.2 of the Plan calculated as
if the Participant had retired on his or her Normal Retirement Date and elected to receive his or
her Supplemental Pension Benefit.
For purposes of this Section 4.4(a) only, the following shall apply:
(i) | The Participants Credited Service shall be calculated as of the Participants date of death. | ||
(ii) | The Participants Pension Plan benefit shall be calculated under the provisions of Article IV of the Pension Plan as if the Participant had died on his or her Normal Retirement Date, with such Pension Plan benefit being increased for purposes of this Section 4.4(a) with an imputed Average Interest Credit to reflect what the Participants Pension Plan benefit would have been as of the Participants Normal Retirement Date; such Pension Plan benefit shall be converted to a single life annuity option using the Average Treasury Rate and Gatt Mortality Table. | ||
(iii) | The Participants Social Security Primary Amount shall be calculated as if the Participant had retired as of his or her Normal Retirement Date. |
Payment of this death benefit shall be made in the form of a single life annuity and will be
subject to distribution any time after the Participants Early Retirement Date, which shall be
calculated in accordance with the actuarial reduction provisions contained within Section 3.3
hereof, if paid prior to the Participants Normal Retirement Date.
(b) In the event of a Participants death after the Participant has commenced distribution of
his or her Supplemental Pension Benefit, there shall be paid to the Participants Beneficiary only
those survivor benefits provided under the form of benefit payment elected by the Participant.
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ARTICLE V
DISTRIBUTION OF LARGEST PLAN BENEFIT
5.1 Distribution of Largest Plan Benefit. Subject to any previous benefit election made by
the Participant under the KeyCorp Executive Supplemental Pension Plan, a Participant who meets the
eligibility requirements for an Executive Supplemental Pension Program Benefit and who is also
eligible for an Excess Pension Program Benefit shall automatically be provided at the Participants
termination the larger of the two Program benefits (i.e. the greater of the Participants Excess
Pension Program Benefit or the Executive Supplemental Pension Program Benefit).
In making the determination required under this Section 5.1 hereof, the Corporation shall rely
upon calculations made by independent actuaries for the Pension Plan, who shall apply the actuarial
assumptions and interest rate then in use under the Pension Plan for converting the Participants
Excess Pension Program Benefit to a single life annuity form of payment. The Participant
automatically will receive the Program Benefit that provides the Participant with the largest
monthly single life annuity benefit.
5.2 Beneficiary Distribution of Largest Plan Benefit.
(a) | Upon the death of a Participant meeting eligibility requirements for an Excess Pension Program Benefit and the eligibility requirements for an Executive Supplemental Pension Program Benefit there shall be paid to the Participants Beneficiary the larger of the two Programs death benefit. Such death benefit shall be paid to the Beneficiary in the form of a single life annuity. | ||
(b) | In the event of a Participants death after the Participant has commenced distribution of his or her Plan benefit, there shall be paid to the Participants Beneficiary only those survivor benefits provided under the form of benefit payment elected by the Participant. |
ARTICLE VI
ADMINISTRATION AND CLAIMS PROCEDURE
6.1 Administration. The Corporation, which shall be the Administrator of the Plan for
purposes of ERISA and the Plan Administrator for purposes of the Code, shall be responsible for
the general administration of the Plan, for carrying out the provisions hereof, and for making
payments hereunder. The Corporation shall have the sole and absolute discretionary authority and
power to carry out the provisions of the Plan, including, but not limited to, the authority and
power (a) to determine all questions relating to the eligibility for and the amount of any benefit
to be paid under the Plan, (b) to determine all questions pertaining to claims for benefits and
procedures for claim review, (c) to resolve all other questions arising under the Plan, including
any questions of construction and interpretation, and (d) to take such further action as the
Corporation shall deem necessary or advisable in the administration of the Plan. All findings,
decisions, and determinations of any kind made by the Corporation shall not be disturbed unless the
Corporation has acted in an arbitrary and capricious manner. Subject to the requirements of law,
the Corporation shall be the sole judge of the standard of proof required in any claim for benefits
and in any determination of eligibility for a benefit. All decisions of the Corporation shall be
final and binding on all parties. The Corporation may employ such attorneys, investment counsel,
agents, and accountants as it may deem necessary or advisable to assist it in carrying out its
duties hereunder. The actions taken and the decisions made by the Corporation hereunder shall be
final and binding upon
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all interested parties subject, however, to the provisions of Section 6.2. The Plan Year, for
purposes of Plan administration, shall be the calendar year.
6.2 Claims Review Procedure. Whenever the Corporation decides for whatever reason to deny,
whether in whole or in part, a claim for benefits under this Plan filed by any person (herein
referred to as the Claimant), the Corporation shall transmit a written notice of its decision to
the Claimant, which notice shall be written in a manner calculated to be understood by the Claimant
and shall contain a statement of the specific reasons for the denial of the claim and a statement
advising the Claimant that, within 60 days of the date on which he or she receives such notice, he
or she may obtain review of the decision of the Corporation in accordance with the procedures
hereinafter set forth. Within such 60-day period, the Claimant or his or her authorized
representative may request that the claim denial be reviewed by filing with the Corporation a
written request therefore, which request shall contain the following information:
(a) | the date on which the request was filed with the Corporation; provided, however, that the date on which the request for review was in fact filed with the Corporation shall control in the event that the date of the actual filing is later than the date stated by the Claimant pursuant to this paragraph (a); | ||
(b) | the specific portions of the denial of his claim which the Claimant requests the Corporation to review; | ||
(c) | a statement by the Claimant setting forth the basis upon which he believes the Corporation should reverse its previous denial of his claim and accept his claim as made; and | ||
(d) | any written material which the Claimant desires the Corporation to examine in its consideration of his position as stated pursuant to paragraph (c) above. |
In accordance with this Section 6.2, if the Claimant requests a review of the Corporations
decision, such review shall be made by the Corporation, or at the election of the Corporation, by
the Claims Review Committee, who shall, within sixty (60) days after receipt of the request form,
review and render a written decision on the claim containing the specific reasons for the decision
including reference to Plan provisions upon which the decision is based. All findings, decisions,
and determinations of any kind made by the Corporation shall not be modified unless the Corporation
has acted in an arbitrary and capricious manner. Subject to the requirements of a law, the
Corporation shall be the sole judge of the standard of proof required in any claim for benefits,
and any determination of eligibility for a benefit. All decisions of the Corporation shall be
binding on the Claimant and upon all other Persons. If the Participant, or Beneficiary shall not
file written notice with the Corporation at the times set forth above, such individual shall have
waived all benefits under the Plan other than as already provided, if any, under the Plan.
ARTICLE VII
FUNDING
All benefits under the Plan shall be payable solely in cash from the general assets of the
Corporation or a subsidiary, and Participants and Beneficiaries shall have the status of general
unsecured creditors of the Corporation. The obligations of the Corporation to make distributions
in accordance with Article III and Article IV of the Plan constitute a mere promise to make
payments in the future. The Corporation shall have no obligation to establish a trust or fund to
fund its obligation to pay benefits under the Plan or to insure any benefits under the Plan.
Notwithstanding any provision of this Plan, the
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Corporation may, in its sole discretion, combine the payment due and owing under this Plan with one
or more other payments owing to a Participant or a Participants Beneficiary under any other plan,
contract, or otherwise (other than any payment due under the Pension Plan), in one check, direct
deposit, wire transfer, or other means of payment. Finally, it is the intention of the Corporation
and the Participants that the Plan be unfunded for tax purposes and for the purposes of Title I of
the Employee Retirement Income Security Act of 1974, as amended.
ARTICLE VIII
AMENDMENT AND TERMINATION
The Corporation reserves the right to amend or terminate the Plan at any time by action of its
Board of Directors or a duly authorized committee of such Board of Directors; provided, however,
that no such action shall adversely affect the benefit accrued up to the date of the Plan amendment
or termination for any Participant who has met the age and service requirements of Section 3.1 and
Section 4.1 of the Plan, or any Participant or Participants Beneficiary who is receiving, or who
is eligible to receive a Supplemental Pension Benefit hereunder, unless an equivalent benefit is
provided under another plan maintained by the Corporation. No amendment or termination will result
in an acceleration of Supplemental Pension Benefits in violation of Section 409A of the Code.
ARTICLE IX
MISCELLANEOUS
9.1 Interest of Participant. The obligation of the Corporation under the Plan to provide
the Participant or the Participants Beneficiary with a Supplemental Pension Benefit merely
constitutes the unsecured promise of the Corporation to make payments as provided herein, and no
person shall have any interest in, or a lien, or prior claim on any property of the Corporation.
9.2 No Commitment as to Employment. Nothing herein contained shall be construed as a
commitment or agreement upon the part of any Participant hereunder to continue his or her
employment with an Employer, and nothing herein contained shall be construed as a commitment on the
part of any Employer to continue the employment or rate of compensation of any Participant
hereunder for any period. All Participants shall remain subject to discharge to the same extent as
if the Plan had never been put into effect.
9.3 Benefits. Nothing in the Plan shall be construed to confer any right or claim upon any
person, firm, or corporation other than Participants and Participants Beneficiaries who become
entitled to a benefit under the Plan.
9.4 Restrictions on Alienation. Except to the extent permitted by law, no benefit under
the Plan shall be subject to anticipation, alienation, assignment (either at law or in equity),
encumbrance, garnishment, levy, execution, or other legal or equitable process. No person shall
have power in any manner to anticipate, transfer, assign, (either at law or in equity), alienate or
subject to attachment, garnishment, levy, execution, or other legal or equitable process, or in any
way encumber his or her benefits under the Plan, or any part thereof, and any attempt to do so
shall be void.
9.5 Absence of Liability. No member of the Board of Directors of the Corporation or a
subsidiary, or any officer of the Corporation or a subsidiary shall be liable for any act or action
hereunder, whether of commission or omission, taken by any other member, or by any officer, agent,
or Employee except in circumstances involving his or her bad faith or willful misconduct.
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9.6 Expenses. The expenses of administration of the Plan shall be paid by the Corporation.
9.7 Precedent. Except as otherwise specifically provided, no action taken in accordance
with the Plan by the Corporation shall be construed or relied upon as a precedent for similar
action under similar circumstances.
9.8 Duty to Furnish Information. The Corporation shall furnish to each Participant or
Participants Beneficiary any documents, reports, returns statements, or other information that it
reasonably deems necessary to perform its duties imposed hereunder or otherwise imposed by law.
9.9 Withholding. The Corporation shall withhold any tax required by any present or future
law to be withheld from any payment hereunder to any Participant or Participants Beneficiary.
9.10 Validity of Plan. The validity of the Plan shall be determined and the Plan shall be
construed and interpreted in accordance with the provisions of the Act, the Code, and, to the
extent applicable, the laws of the State of Ohio. The invalidity or illegality of any provision of
the Plan shall not affect the validity or legality of any other part thereof.
9.11 Parties Bound. The Plan shall be binding upon the Corporation, all Participants, all
Participants Beneficiaries, and the executors, administrators, successors, and assigns of each of
them.
9.12 Headings. All headings used in the Plan are for convenience of reference only and are
not part of the substance of the Plan.
ARTICLE X
CHANGE OF CONTROL
Notwithstanding any other provision of the Plan to the contrary, in the event of a Change of
Control, a Participants interest in his or her Supplemental Pension Benefit shall vest. On and
after a Change of Control, a Participant shall be entitled to receive an immediate distribution of
his or her Supplemental Pension Benefit if the Participant has at least five (5) years of Credited
Service, and (i) the Participants employment is terminated by his or her Employer and any other
Employer without cause, or (ii) the Participant resigns within two years following a Change of
Control as a result of the Participants mandatory relocation, reduction in the Participants base
salary, reduction in the Participants average annual incentive compensation (unless such reduction
is attributable to the overall corporate or business unit performance), or the Participants
exclusion from stock option programs as compared to comparably situated Employees.
For purposes of this Article X hereof, a Change of Control shall be deemed to have occurred
if under a rabbi trust arrangement established by KeyCorp (Trust), as such Trust may from time to
time be amended or substituted, the Corporation is required to fund the Trust because a Change of
Control, as defined in the Trust, has occurred.
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ARTICLE XI
COMPLIANCE WITH
SECTION 409A CODE
SECTION 409A CODE
The Plan is intended to provide for the deferral of compensation in accordance with the
provisions of Section 409A of the Code and regulations and published guidance issued pursuant
thereto. Accordingly, the Plan shall be construed and administered in a manner that is consistent
with those provisions and may at any time be amended in the manner and to the extent determined
necessary or desirable by the Corporation to reflect or otherwise facilitate compliance with such
provisions with respect to amounts deferred on and after January 1, 2005, including as contemplated
by Section 855(f) of the American Jobs Creation Act of 2004. Notwithstanding any provision of the
Plan to the contrary, no otherwise permissible election or distribution shall be made or given
effect under the Plan that would result in a violation, early taxation or assessment of penalties
or interest of any amount under Section 409A of the Code.
ARTICLE XII
MERGER OF THE
KEYCORP EXECUTIVE SUPPLEMENTAL PENSION PLAN
INTO THE PLAN
KEYCORP EXECUTIVE SUPPLEMENTAL PENSION PLAN
INTO THE PLAN
12.1 Merger. As of December 31, 2006, the KeyCorp Executive Supplemental Pension Plan
shall be merged into this Plan, and as of that date the KeyCorp Executive Supplemental Pension Plan
shall not exist separate and apart from this Plan and all benefits that have accrued under the
KeyCorp Executive Supplemental Pension Plan shall be merged into and shall become a part
of this Plan.
ARTICLE XIII
AMENDMENT TO FREEZE
AMENDMENT TO FREEZE
13.1. Amendment to Freeze the Plan.. Notwithstanding any other Plan provision to the
contrary, as of December 31, 2009, the Plan shall be frozen, and on and after that date all
Participants Supplemental Pension Benefits shall be calculated in accordance with the provisions
of this Article XIII and all other provisions of the Plan shall remain in full force and effect.
13.2 Calculation of Amount and Payment of Frozen Benefit. In accordance with the
provisions of this Section 13, the monthly Supplemental Pension Benefit that shall be payable to a
Participant on and after the Participants Normal Retirement Date shall be calculated under the
provisions of Section 3.2 of the Plan, provided, however, that in calculating the Participants
Supplemental Pension Benefit under Section 3.2 hereof, (i) the Participants Credited Service shall
only include the Credited Service that has been accrued by the Participant up through December 31,
2009, (ii) the Participants Final Average Compensation shall be determined as of December 31,
2009, and shall be calculated by utilizing the annual average of the Participants highest
aggregate Compensation for any period of five consecutive years within the period of ten
consecutive years immediately prior to December 31, 2009 and shall include the Participants
highest five Incentive Compensation Awards granted under an Incentive Compensation Plan during the
ten year period immediately preceding December 31, 2009, (iii) the Participants vested and accrued
annual pension benefit under the Pension Plan calculated as of the participants Normal Retirement
Date and payable in the form of a single life annuity option shall be calculated as if the
participant terminated his employment on December 31, 2009, and (iv) the
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Participants Social Security Primary Insurance Amount shall be determined under requirements of
the Social Security requirements that are in effect with regard to the Participant as of December
31, 2009.
IN WITNESS WHEREOF, KeyCorp has caused this KeyCorp Second Executive Supplemental Pension Plan
to be executed as of the 8th day of February, 2010, to be effective as of that date.
KEYCORP |
||||
By: | /s/ Steven N. Bulloch | |||
Title: | Assistant Secretary | |||
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EXHIBIT A
KeyCorp
Executive Supplemental Pension Plan
Participant List
Executive Supplemental Pension Plan
Participant List
Last | First | 1/1/2010 | ||
Name | Name | Status | ||
Tyson
|
Andrew R. | Active | ||
Blakely
|
Kevin M. | Retired | ||
Bingay
|
James S. | Retired | ||
Cress
|
George H. | Retired | ||
Evans
|
Michael L. | Retired | ||
Hammes
|
Michael | Retired | ||
Harding
|
Frank I. | Retired | ||
Hyde
|
Richard C. | Retired | ||
Krips
|
Jeanne B. | Retired | ||
Mancuso
|
John H. | Retired | ||
Potchen
|
Peter | Retired | ||
Tolman
|
K. Wade | Retired | ||
Butler
|
Michael A. | Vested Term. |