Thomas E. Helfrich
Chief Human Resources Officer
Executive Vice President

  (KEYCORP KEY LOGO) [l15595al1559502.gif]
 
127 Public Square
Cleveland, OH 44114-1306

August 9, 2005

         
 
      Tel: 216 689-0220
 
      Fax: 216 689-7827
 
      thomas_helfrich@keybank.com

Personal and Confidential
Via Hand Delivery
Mr. Jack Kopnisky
156 Brandywine Drive
Hudson, Ohio 44236
Dear Jack:
This letter agreement (the “Letter Agreement”) confirms the discussions you have
had with Tom Helfrich and others concerning your separation from KeyCorp
(“KeyCorp”), KeyBank National Association (“KeyBank”), and their affiliates
(collectively “Key”). The salary and benefits to be paid to you hereunder are in
lieu of all rights and interests you may have relating to your employment and
the termination thereof.

1.   Effective on August 12, 2005, and by operation of this Letter Agreement
without any further act on your part, you voluntarily resign from your
employment with KeyCorp and all officer and other positions you hold at Key. As
a former employee you are not entitled to any employee benefits, including,
without limitation, continued participation in your pension and 401(k) plans,
after your termination date set forth in this paragraph 1, except for the
employee rate on your Medical and Dental Plan (as applicable) as specified in
paragraph 2 hereof.

2.   In consideration of the non-competition and confidentiality covenants in
paragraph 3 and 4 hereof, and as separation pay under this Letter Agreement, you
will receive in the aggregate, fifteen (15) months of base salary, less
applicable withholding, payable in equal bi-weekly installments under Key’s
payroll system, for the period of on or about August 13, 2005 through on or
about March 10, 2006. In the case of your new employment outside of Key prior to
March 10, 2006, Medical and Dental Plan participation at the employee premium
rate will cease, and, if elected, your continued coverage will be at the COBRA
Rate for the balance of eighteen (18) months beginning as of August 13, 2005.
You will receive COBRA election information from North American Benefits Network
at or about the time of your termination of employment. You hereby agree to
advise Tom Helfrich or the Chief Human Resources Officer of KeyCorp, in writing,
of any new employment opportunity outside of Key at least two (2) weeks prior to
your commencement of such new employment. For purposes of this paragraph, other
employment outside of Key shall not include

 

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Jack Kopnisky
August 9, 2005
Page 2

    consulting assignments on your own behalf (i.e., as an individual or for a
company of which you are the principal owner, but not including consulting
assignments for an established consulting firm) as long as such consulting
assignments do not provide you with any employer-provided benefits, including,
without limitation, a pension, 401(k), or other retirement plan or stock options
as a result of any such assignment. For purposes of this Letter Agreement, Key’s
determination that you have secured employment outside of Key shall be final and
conclusive. Notwithstanding anything to the contrary in this Letter Agreement,
KeyCorp’s obligations to pay you separation pay and other payments and benefits
under this Letter Agreement shall cease and you shall forfeit all rights thereto
upon the occurrence of any material breach by you of any of your obligations
under this Letter Agreement or that you otherwise have to Key during or
following your employment, including, without limitation, (i) your obligation to
cooperate with Key in connection with any reasonable review of your previous
assignments and responsibilities and (ii) your obligations regarding
preservation of Key’s trade secrets, non-public information, and intellectual
property, non-contact and non-hiring, respectively, of Key’s customers and
employees, and the restrictive covenants set forth in paragraphs 3, 4 and 5
hereof.

3.   You agree that you shall not at any time, directly or indirectly, without
written authorization from Key, make use of or disclose to any person or entity
any confidential business-related, proprietary, or secret information,
confidential knowledge, trade secrets, or other confidential data not in the
public domain related to the business, products, services, employees, or
practices of Key that you have acquired during your employment with Key, whether
prepared by you or another. You further agree that the confidential character
and proprietary nature of any of the foregoing information does not become any
less confidential or proprietary to Key because you may commit some of the
information to your memory or because you may maintain some of this information
outside of Key’s offices. You further agree to promptly return to Key all I.D.
Cards, company credit cards, computers, BlackBerry, files, disks, workpapers,
customer, vendor, and employee records, and any other property belonging to Key
that is in your possession or control as of your termination date.

4.   (a) From the date hereof through November 12, 2006, you will not, directly
or indirectly, engage in any Competitive Activity, as defined in this
subparagraph (a), in the State of Ohio, except on behalf of Key, without the
written consent of Key, which consent Key may grant or withhold in its absolute
discretion. As used herein, “Competitive Activity” means (i) commencing or
engaging in any business or business activity for a Financial Services Company
as defined below; (ii) serving as a director, advisory director, officer,
member, partner, or employee of a Financial Services Company as defined below;
or (iii) serving as a consultant or advisor, or otherwise rendering services of
a consultative or advisory nature to a Financial Services Company as defined
below. As used herein, “Financial Services Company” means a bank, bank holding
company, financial holding

 

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Jack Kopnisky
August 9, 2005
Page 3

    company, trust company, savings and loan association, building and loan
association, credit union, leasing company, real estate company, investment
company, insurance company or agency, investment banking company, investment
advisor company, securities or brokerage company, or any other similar financial
services companies; provided, however, that this restriction on Competitive
Activity shall not prevent you from serving as a director or trustee of a
non-profit corporation that is not affiliated with a Financial Services Company.

    (b)  In the event a court of competent jurisdiction determines that any of
the limitations contained in subparagraph (a) above are excessive because of
duration or scope, the provisions thereof shall not be void but, with respect to
such limitations on duration or scope held to be excessive, they shall be
modified to incorporate the maximum limitations such court will permit, not
exceeding the limitations contained therein. In the event you engage in any
activity in violation of subparagraph (a) above, you agree that Key shall be
entitled to injunctive, equitable, and/or other relief. If Key commences an
action to enforce any of such provisions against you, Key and you agree that the
prevailing party in any such action shall be entitled to its or his reasonable
attorneys’ fees.

5.   You hereby acknowledge the enforceability of the restrictions set forth in
the (i) Acceptance of Grant Agreement in the KeyCorp Award of Restricted Stock
and Cash Performance Shares dated February 19, 2004, and signed by you on
May 17, 2004 (the “2004 Restricted Stock Grant”) and the (ii) Acceptance of
Restricted Stock Award in the KeyCorp Award of Restricted Stock dated
January 16, 2003, and signed by you on February 6, 2003 (the “2003 Restricted
Stock Grant”), copies of which are in Attachments A and B hereof.

6.   As of August 12, 2005, you shall forfeit all right, title, and interest you
may have in an Agreement, dated September 16, 2004, by and between you and
KeyCorp respecting a Change of Control of KeyCorp (the “COC Agreement”),
rendering the COC Agreement terminated and null and void. You further
acknowledge that all previous agreements, between you and KeyCorp or its
predecessors, if applicable, respecting a Change of Control of KeyCorp or its
predecessors prior to the COC Agreement are, as of the date hereof, terminated
and null and void.   7.   As incentive compensation for the period January 1,
2005 — August 12, 2005, you will be awarded one-half (1/2) of your target award
under the KeyCorp Annual Incentive Plan (the “STIC Plan”), payable on or about
March 10, 2006. Thereafter, you will receive no further award under the STIC
Plan.

8.   For purposes of the KeyCorp Automatic Deferral Plan (“ADP”) only, Key will
deem your termination of employment as a “Termination Under Limited
Circumstances” under ADP, thereby vesting you in all Participant Deferrals and
Corporate Contributions credited to your Plan Account with all earnings, gains,
and losses thereon as of your date of termination. Any amount in your ADP
account that is subject to a holdback period under Section 409A of the Internal

 

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Jack Kopnisky
August 9, 2005
Page 4

    Revenue Code (see paragraph 13 hereof) will be distributed to you under
Key’s normal ADP distribution schedule in April 2006, April 2007, and
April 2008.

9.   In respect of the Time Lapse Restricted Shares of your 2003 Restricted
Stock Grant, Key will pay to you on or about August 12, 2005 the value of such
Time Lapse Restricted Shares based on an average of the high and low prices for
KeyCorp stock on July 29, 2005, less applicable withholding. All your restricted
stock grants, including your 2003 Restricted Stock Grant, the Performance
Accelerated Restricted Shares, and your entire 2004 Restricted Stock Grant will
not vest and, therefore, are hereby forfeited.   10.   You may exercise your
vested and exercisable stock options in conformity with the plans under which
they were issued; note that for purposes of such plans your termination date is
August 12, 2005. A listing of your options that will be vested as of July 31,
2005 has been provided to you previously. You will have six (6) months from your
termination date to exercise your vested and exercisable stock options. You will
not be granted any stock options or restricted stock in 2005.   11.   For your
unvested balances under Key’s pension plans, Key agrees to pay you the value of
such unvested amounts as of your termination date, less applicable withholding,
within 30 days of your date of termination. You will be vested in the KeyCorp
Deferred Compensation Plan, with the lump sum component paid and the 60
quarterly installments commencing in October 2005. Further, on your termination
date, you will be vested in the KeyCorp 401(k) Savings Plan, Excess 401(k)
Savings Plan and Second Excess 401(k) Savings Plan. Any amounts under those
plans that are subject to a holdback period under Section 409A of the Internal
Revenue Code (see paragraph 13 hereof) will be distributed to you under
applicable Plan requirements in or about mid-February 2006.   12.   You will be
eligible to receive executive outplacement services from a KeyCorp preferred
provider, at Key’s expense, for up to six (6) months. For particulars, please
contact Tom Helfrich.   13.   The compensation and benefits provided to you
hereunder reflect Key’s good faith compliance with the recently enacted
Section 409A of the Internal Revenue Code (the “Code”) and IRS Notice 2005-1. To
the extent applicable, this Letter Agreement is intended to comply with the
provisions of Section 409A of the Code. Accordingly, this Letter Agreement shall
be administered in a manner consistent with this intent, and any provision that
would cause the Letter Agreement to fail to satisfy Section 409A of the Code
shall have no force and effect until amended to comply with Section 409A of the
Code (which amendment may be retroactive to the extent permitted by Section 409A
of the Code and may be made by Key without your consent). In particular, to the
extent that you become entitled to receive payment subject to Section 409A upon
an event that does not constitute a permitted distribution event under

 

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Jack Kopnisky
August 9, 2005
Page 5

    Section 409A(a)(2) of the Code, then notwithstanding anything to the
contrary in this Letter Agreement, payment will be made to you on the earlier of
(i) your “separation from service” with Key (determined in accordance with
Section 409A); provided, however, that if you are a “specified employee” (within
the meaning of Section 409A), your date of payment shall be made on the date
which is 6 months after the date of your separation from service with Key or
(ii) your death.

14.   For the tax year 2005, Key will reimburse you for your income tax
preparation services upon the same basis as is available to similar Key
executives at that time.   15.   In consideration of KeyCorp entering into this
Letter Agreement and providing the payments and benefits enumerated above, and
except for (i) the arrangements specified herein and (ii) any insurance or
indemnification rights you possess, you, for yourself and your heirs, legal
representatives, and assigns, release, acquit, and forever discharge KeyCorp and
its affiliates and subsidiaries and their former and current representatives,
employees, officers, directors, predecessors-in-interest, successors, and
assigns, jointly and severally, from any and all liabilities, attorneys’ fees,
obligations, duties, undertakings, agreements, contracts, compensation,
incentive compensation, separation pay, severance, employee benefits, plans,
policies, practices, claims, demands, damages, proceedings, actions, and causes
of action of every kind, nature, and character, which you have had, now have, or
may have in the future for events occurring to the date hereof, whether known or
unknown, suspected or unsuspected, that are by reason of, or in any manner
whatsoever connected with, or growing out of, your employment relationship with
KeyCorp or its affiliates, subsidiaries, or predecessors-in-interest, or the
termination of those employment relationships, including, without limitation,
any alleged tortious, wrongful, unlawful, or improper act or conduct or any
discriminatory events, acts, patterns, or practices based on age (including the
Age Discrimination in Employment Act, 29 U.S.C. 621, et seq.), religion, creed,
sex, sexual orientation, national origin, ancestry, disability, handicap,
veteran status, marital status, race, or color, or the continuing or future
effects thereof, or the KeyCorp Separation Pay Plan, or any alleged violation or
breach of any express, implied, or implied-in-law contract, agreement, promise,
or duty. Notwithstanding anything to the contrary in this paragraph, nothing
herein shall prohibit you from filing a charge or complaint with or from
participation in any investigation or proceeding of the U.S. Equal Employment
Opportunity Commission or the applicable State or Local Fair Employment
Practices Agency; however, you agree that you will not be entitled to any
further monetary compensation from Key in addition to that which is provided for
under this Letter Agreement.   16.   This Letter Agreement represents the
complete agreement between the parties hereto and supersedes all prior or
contemporaneous oral or written understandings on the subjects contained herein.
No one relies on any

 

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Jack Kopnisky
August 9, 2005
Page 6

    representations, oral or written, on the effect, enforceability, or meaning
of this Letter Agreement, except as is specifically set forth in this Letter
Agreement. This Letter Agreement can only be modified or waived, in whole or in
part, by a writing signed by all of the parties hereto. A facsimile or
electronic communication of this Letter Agreement and a facsimile or electronic
signature of a party shall be treated in all respects as an original document
and counterparts of this Letter Agreement may be executed separately and taken
together will be treated as one complete original document. This Letter
Agreement shall inure to the benefit of and be binding upon the parties hereto
and their respective heirs, legal representatives, affiliates, successors, and
assigns.

If the foregoing is acceptable, please sign and date this Letter Agreement and
the OWPA Statement which is incorporated herein.
We are sorry we had to make this letter so “legalistic” sounding. We truly wish
you and your family all the best and we thank you for your many contributions to
Key.

            Sincerely,

KEYCORP
      By:   /s/ Thomas E. Helfrich         Thomas E. Helfrich        Executive
Vice President     

AGREED TO this 9th day of August, 2005
     /s/ Jack Kopnisky     
Jack Kopnisky

 

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Jack Kopnisky
August 9, 2005
Page 7
Statement
Your Rights Under the Older Workers Benefit Protection Act
This Letter Agreement contains a waiver of your rights and claims under the Age
Discrimination in Employment Act of 1967 (“ADEA”). Your waiver must be knowing
and voluntary, which means, as a minimum, that you understand that:

a)   the waiver is part of an agreement between you and your employer which is
written so that you understand it;   b)   the waiver specifically refers to
rights or claims under ADEA;

c)   you do not waive any rights or claims that may arise after this Letter
Agreement is executed by you;

d)   your waiver is in exchange for consideration that is more valuable than
what you are already entitled to;   e)   you are advised to consult with an
attorney prior to executing this Letter Agreement;

f)   you have at least 21 days after receipt of this Letter Agreement to decide
whether to execute it; and

g)   you have 7 days after you execute this Letter Agreement to revoke it, and
this Letter Agreement will not be effective or enforceable until this 7-day
period has expired.

You acknowledge that you have been given at least 21 days to review and consider
the Letter Agreement and, if you sign it before 21 days has passed, you do so of
your own free choice. You understand that any changes made to this document will
not restart this 21-day period.
You further acknowledge that (1) you understand the above points, and therefore,
your waiver is knowing and voluntary and (2) if you receive any sum under this
Letter Agreement and later revoke it, that you must repay Key for all sums
received by you under this Letter Agreement.

                Date August 9, 2005  /s/ Jack Kopnisky       Jack Kopnisky