Document:

EX-10.30

 

Exhibit 10.30

KEYCORP

DEFERRED BONUS PLAN

ARTICLE I

          In accordance with the requirements of the American Jobs Creation Act of 2004, the KeyCorp
Signing Bonus Plan (“Plan”) as originally established January 1, 1999, and thereafter amended and
restated in its entirety as the KeyCorp Deferred Bonus Plan effective January 1, 2005, is hereby
amended and restated in its entirety as of December 31, 2007. The Plan as amended and restated,
continues to be structured to provide for the mandatory deferral of certain bonuses granted to
selected employees of KeyCorp. As structured, the Plan is intended to provide those selected
employees of KeyCorp with a tax-favorable savings vehicle, while allowing KeyCorp to retain the
employee’s continued employment. It is the intention of KeyCorp, and it is the understanding of
those employees who become covered under the Plan, that the Plan is unfunded for tax purposes. It
is also the understanding of those employees covered under the Plan that the Plan will be
administered in accordance with the requirements of Section 409A of the Code.

ARTICLE II

DEFINITIONS

          2.1 Meaning of Definitions. For the purposes of this Plan, the following words and
phrases shall have the meanings hereinafter set forth, unless a different meaning is clearly
required by the context:

	 	(a)	 	“Beneficiary” shall mean the person, persons or entity entitled under
Article VIII to receive any Plan benefits payable after a Participant’s death.
	 
	 	(b)	 	“Board” shall mean the Board of Directors of KeyCorp, the Board’s
Compensation and Organization Committee, or any other committee designated by the Board
or a subcommittee designated by the Board’s Compensation and Organization Committee.
	 
	 	(c)	 	“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 on and after January 1,
1999.
	 
	 	(d)	 	“Common Stock Account” shall mean the investment account established
under the Plan for bookkeeping purposes in which the Participant shall have his or her
Deferred Bonus credited. A Participant’s Deferred Bonus shall be credited based on a
bookkeeping allocation of KeyCorp Common Shares (both whole and fractional rounded to
the nearest one-hundredth of a share) (“Common Shares”), which on the date credited
shall be equal in market value (as determined under the last sentence of this Section
2.1(d)) to the amount of the Deferred Bonus. The Common Stock Account shall also
reflect on a bookkeeping basis all dividends, gains, and losses attributable to such
Common Shares. All Deferred Bonuses credited to the Common Stock

 

 

          Account shall be based on the New York Stock Exchange’s closing price for such Common Shares
as of the day such Deferred Bonus is credited to the Participant’s Plan Account.

	 	(e)	 	“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.
	 
	 	(f)	 	“Date of Hire” shall mean the first day an Employee commences active
employment with an Employer.
	 
	 	(f)	 	“Determination Date” shall mean as of the date that the Participant
vests in his or her Deferred Bonus amount.
	 
	 	(g)	 	“Disability” shall mean (1) a physical or mental disability which
prevents a Participant from performing the duties the Participant was employed to
perform for his or her Employer when such disability commenced, (2) has resulted in the
Participant’s absence from work for 180 qualifying days, and (3) application has been
made for the Participant’s disability coverage under the KeyCorp Long Term Disability
Plan.
	 
	 	(h)	 	“Distribution Agreement” shall mean the executed agreement submitted by
the Employee to the Corporation in conjunction with the Employee’s execution of his or
her employment agreement or as otherwise required by the Corporation, which shall
contain, in pertinent part, the Employee’s distribution instructions for such Deferred
Bonus when vested. In the event the Employee elects to transfer his or her vested
Deferred Bonus to the KeyCorp Deferred Savings Plan, the transferred Deferred Bonus
shall be subject to a mandatory 5 year deferral period from the date such Deferred
Bonus has vested and been transferred to the KeyCorp Deferred Savings Plan (i.e. the
date that it is otherwise payable to the Participant) under the subsequent election
requirements of Section 409A of the Code. An Employee’s election to transfer a vested
Deferred Bonus to the KeyCorp Deferred Savings Plan shall be made a minimum of twelve
full months prior to the date in which the Employee vests in such Deferred Bonus, in
accordance with the requirements of Section 409A.
	 
	 	(i)	 	“Employee” shall mean a common law employee who is employed by an
Employer.
	 
	 	(j)	 	“Employer” shall mean the Corporation and any of its subsidiaries or
affiliates, unless specifically excluded as an Employer for Plan purposes by written
action by an officer of the Corporation. An Employer’s Plan participation shall be
subject to all conditions and requirements made by the Corporation, and each Employer
shall be deemed to have appointed the Plan Administrator as its exclusive agent under
the Plan as long as it continues as an Employer.
	 
	 	(k)	 	“Harmful Activity” shall have occurred if the Participant shall do any
one or more of the following. This provision shall survive the Participant’s
termination of employment with Key:

	 	(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.

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	 	(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 Participant’s 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 Participant’s 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 Participant’s 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 Participant’s employment.
	 
	 	 	 	For purposes of this Section 2.1(k) 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.

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	 	 	 	“KeyCorp” shall include KeyCorp, its subsidiaries, and its affiliates.

	 	(l)	 	“Deferred Bonus” shall mean all or any portion of the
Employee’s bonus award that the Employer automatically defers to the Plan.
	 
	 	(m)	 	“Participant” shall mean an Employee who meets the eligibility and
participation requirements set forth in Section 3.1 of the Plan.
	 
	 	(n)	 	“Plan” shall mean the KeyCorp Deferred Bonus Plan with all amendments
hereafter made.
	 
	 	(o)	 	“Plan Account” shall mean the bookkeeping account established by the
Corporation for each Plan Participant, which shall reflect the Employee’s Deferred
Bonus deferred to the Plan on a bookkeeping basis, with all earnings, dividends, gains,
and losses thereon. Plan Accounts shall not constitute separate Plan funds or separate
Plan assets. Neither the maintenance of, nor the crediting of amounts to such Plan
Accounts shall be treated (i) as the allocation of any Corporation assets to, or a
segregation of any Corporation assets in any such Plan Accounts, or (ii) as otherwise
creating a right in any person or Participant to receive specific assets of the
Corporation.
	 
	 	(p)	 	“Plan Year” shall mean the calendar year.
	 
	 	(q)	 	“Termination Under Limited Circumstances” shall mean the termination
(whether by the Participant or the Employer) of a Participant’s employment from his or
her Employer, and from any other Employer (i) under circumstances in which the
Participant is entitled to receive severance benefits or salary continuation benefits
under the KeyCorp Separation Pay Plan, (ii) under circumstances in which the
Participant is entitled to severance benefits or salary continuation or similar
benefits under a change of control agreement or employment agreement within two years
after a change of control (as defined by such agreement) has occurred, or (iii) as
otherwise expressly approved by an officer of the Corporation.
	 
	 	(s)	 	“Termination of Employment” shall mean the voluntary or involuntary
termination of the Participant’s employment from his or her Employer and from any other
Employer, but shall not include the Participant’s Termination Under Limited
Circumstances or termination as a result of Disability or death.

          2.2 Pronouns. The masculine pronoun wherever used herein includes the feminine in any
case so requiring, and the singular may include the plural.

ARTICLE III

ELIGIBILITY AND PARTICIPATION

          3.1 Eligibility and Participation. An Employee shall become a Plan Participant upon
the Employer’s mandatory deferral of the Employee’s Deferred Bonus.

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ARTICLE IV

DEFERRED BONUS

          4.1 Crediting of the Deferred Bonus.  A Deferred Bonus shall be credited on a
bookkeeping basis to a Plan Account established in the Participant’s name as of the date on which
the Deferred Bonus would have been payable to the Participant but for the Employer’s mandatory
deferral of such Deferred Bonus to the Plan (“Deferred Bonus Date”).

          4.2 Investment of Deferred Bonuses. All Deferred Bonuses shall be automatically
invested on a bookkeeping basis in the Plan’s Common Stock Account.

          4.3 Determination of Amount. The Plan Administrator shall verify the amount of the
Participant’s Deferred Bonus, with all dividends, gains and losses, if any, credited to each
Participant’s Plan Account in accordance with the provisions of the Plan. The reasonable and
equitable decision of the Plan Administrator as to the value of each Plan Account shall be
conclusive and binding upon the Participants and the Beneficiary of each deceased Participant
having any interest, direct or indirect in the Participant’s Plan Account. As soon as reasonably
practicable after the close of the Plan Year, the Corporation shall send each Participant an
itemized statement that shall reflect the Participant’s Plan Account balance.

          4.4 Corporate Assets. All Deferred Bonuses, dividends, earnings and any other gains
and losses credited to each Participant’s Plan Account on a bookkeeping basis, remain the assets
and property of the Corporation, which shall be subject to distribution to the Participant only in
accordance with Article VI of the Plan. Distributions made under the Plan shall be in the form of
Common Shares or as a bookkeeping plan-to-plan transfer to the KeyCorp Deferred Savings Plan as
provided for in Article VI hereof. Participants and Beneficiaries shall have the status of general
unsecured creditors of the Corporation. Nothing contained in the Plan shall create, or be
construed as creating a trust of any kind or any other fiduciary relationship between the
Participant, the Corporation, or any other person. It is the intention of the Corporation and it
is the understanding of the Participant that the Plan is an unfunded Plan.

          4.5 No Present Interest. Subject to any federal statute to the contrary, no right or
benefit under the Plan and no right or interest in each Participant’s Plan Account shall be subject
to anticipation, alienation, sale, assignment, pledge, encumbrance, or charge, and any attempt to
anticipate, alienate, sell, assign, pledge, encumber, or charge any right or benefit under the
Plan, or Participant’s Plan Account shall be void. No right, interest, or benefit under the Plan
or Participant’s Plan Account shall be liable for or subject to the debts, contracts, liabilities,
or torts of the Participant or Beneficiary, including an domestic relations proceedings. If the
Participant or Beneficiary becomes bankrupt or attempts to alienate, sell, assign, pledge,
encumber, or charge any right under the Plan or Participant’s Plan Account, such attempt shall be
void and unenforceable.

ARTICLE V

VESTING

          5.1 Deferred Bonus Vesting. The calculation of a Participant’s vested interest in the
Deferred Bonus credited on a bookkeeping basis to the Participant’s Plan Account shall be measured
in whole calendar years. A Participant shall become vested in the Deferred Bonus allocated on a
bookkeeping basis to the Participant’s Plan Account with all earnings, gains, and losses thereon
after

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three full calendar years of service with his or her Employer following the Deferred Bonus
Date (as defined in Section 4.1(a)). Alternatively, at the Employer’s election, with such election
having been communicated to the Employee in writing prior to the Deferred Bonus Date, the Employee
shall become vested in his or her Deferred Bonus under the following three-year graded vesting
schedule (or such other multi-year vesting schedule as is expressly communicated in writing to the
Employee by the Employer prior to the Participant’s Deferred Bonus Date):

     (a) One full calendar year from the Participant’s Deferred Bonus Date but less
than two full calendar years from such Deferred Bonus Date ............................................................33%.

     (b) Two full calendar years from the Participant’s Deferred Bonus Date but less
than three full calendar years from such Deferred Bonus Date ............................................................66%.

     (c) Three full calendar years from the Participant’s Deferred Bonus Date ............................................................100%.

Notwithstanding the foregoing provisions of this Section 5.1, however, a Participant shall become
fully vested in the Deferred Bonus credited on a bookkeeping basis to the Participant’s Plan
Account upon the Participant’s Termination Under Limited Circumstances, Disability or death.

          5.2 Forfeiture of the Participant’s Deferred Bonus. Notwithstanding any provision of
the Plan to the contrary, upon the Participant’s Termination of Employment, the not vested Deferred
Bonus credited on a bookkeeping basis to the Participant’s Plan Account with all earnings and gains
thereon shall be automatically forfeited as of the Participant’s last day of employment.

ARTICLE VI

DISTRIBUTION OF PLAN BENEFITS

          6.1 Distribution of the Participant’s Deferred Bonus. A Participant’s vested Deferred
Bonus with all earnings and gains thereon shall be distributed from the Plan concurrently with or
immediately following the Participant’s vesting in his or her Deferred Bonus in accordance with the
distribution directions provided by the Participant in his or her Distribution Agreement, as
follows:

	 	(a)	 	as a single lump sum distribution of Common Shares, or
	 
	 	(b)	 	as a plan-to-plan transfer of the Participant’s vested Deferred
Bonus to the KeyCorp Deferred Savings Plan, provided, that the Participant is
in a benefits designator 86 or above and is otherwise eligible to participate
in the KeyCorp Deferred Savings Plan. Such plan-to-plan transfer will be
subject to the subsequent election provisions of Section 409A of the Code and
will not be subject to distribution from the Deferred Savings Plan until the
subsequent election requirements of Section 409A of the Code have been met.

Subject to the withholding requirements of Section 6.5 hereof, lump sum distributions from the Plan
shall be made in Common Shares based on the bookkeeping number of whole and fractional Common
Shares attributable to the Participant’s vested Deferred Bonus maintained in the Plan’s Common
Stock Account as of the Determination Date concurrently with or immediately preceding the date of
such distribution. Participants’ Plan Account balances transferred to the KeyCorp Deferred Savings
Plan’s Common Stock Account will not be subject to investment diversification and/or reallocation
under the KeyCorp Deferred Savings Plan.

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          6.2 Distributions Following Termination Under Limited Circumstances, Disability or
Death. Upon the Participant’s Termination Under Limited Circumstances, Disability, or death,
the Deferred Bonus credited to the Participant’s Plan Account with all earnings, gains, and losses
thereon shall become immediately vested and shall be distributed to the Participant or the
Participant’s Beneficiary in a single lump sum distribution of Common Shares, net of all applicable
tax withholdings.

          6.3 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 Participant’s vested Deferred Bonus shall not be
made before the first day of the seventh month following the Participant’s date of separation from
service (or, if earlier, the date of death of the Participant). 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.

          6.4 Harmful Activity. If a Participant engages in any “Harmful Activity” prior to or
within twelve months after the Participant’s Termination of Employment with an Employer, then all
not vested Plan benefits shall be immediately forfeited, and any Plan distributions made to the
Participant within one year prior to the Participant’s Termination or Retirement date shall be
fully repaid by the Participant to the Corporation within 60 days following the Participant’s
receipt of the Corporation’s notice of such Harmful Activity.

          The foregoing restrictions shall not apply in the event that the Participant’s Termination of
Employment within two years after a Change of Control if any of the following have occurred: a
relocation of the Participant’s principal place of employment more than 35 miles from the
Participant’s principal place of employment immediately prior to the Change of Control, a reduction
in the Participant’s base salary after a Change of Control, or Termination of Employment under
circumstances in which the Participant is entitled to severance benefits or salary continuation or
similar benefits under a change of control agreement, employment agreement, or severance or
separation pay plan.

          The determination by the Corporation as to whether a Participant has engaged in a “Harmful
Activity” prior to or within twelve months after the Participant’s termination of employment with
an Employer shall be final and conclusive upon the Participant and upon all other Persons.

          6.5 Withholding. The withholding of taxes with respect to any Deferred Bonus with all
earnings and gains thereon shall be made at such time as it becomes required by any state, federal
or local law; such taxes shall be withheld from the Deferred Bonus in accordance with applicable
law and shall be paid by reducing the number of Common Shares to be distributed to the Participant
based on such Common Shares’ market value as of the distribution date.

          6.6 Facility of Payment. If it is found that any individual to whom an amount is
payable hereunder is incapable of attending to his or her financial affairs because of any mental
or physical condition, including the infirmities of advanced age, such amount (unless prior claim
therefor shall have been made by a duly qualified guardian or other legal representative) may, in
the discretion of the Corporation, be paid to another person for the use or benefit of the
individual found incapable of attending to his or her financial affairs or in satisfaction of legal
obligations incurred by or on behalf of such individual. Any such payment shall be charged to the
Participant’s Plan Account from which any such payment would otherwise have been paid to the
individual found incapable of attending to his or her financial affairs, and shall be a complete
discharge of any liability therefor under the Plan.

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ARTICLE VII

BENEFICIARY DESIGNATION

          7.1 Beneficiary Designation. Subject to Section 7.3 hereof, each Participant shall
have the right, at any time, to designate one or more persons or an entity as Beneficiary (both
primary as well as secondary) to whom benefits under this Plan shall be paid in the event of
Participant’s death prior to complete distribution of the Participant’s vested Plan Account. Each
Beneficiary designation shall be in a written form prescribed by the Corporation and shall be
effective only when filed with the Corporation during the Participant’s lifetime.

          7.2 Changing Beneficiary. Any Beneficiary designation may be changed by the
Participant without the consent of the previously named Beneficiary by the Participant’s filing of
a new designation with the Corporation. The filing of a new designation shall cancel all
designations previously filed by the Participant.

          7.3 No Beneficiary Designation. If a Participant fails to designate a Beneficiary in
the manner provided above, if the designation is void, or if the Beneficiary (including all
contingent Beneficiaries) designated by a deceased Participant dies before the Participant, or if
the Beneficiary disclaims his or her interest in such benefit, the Participant’s Beneficiary shall
be the Participant’s estate.

ARTICLE VIII

ADMINISTRATION

          8.1 Administration. The Corporation, as the “Plan Administrator” 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/or 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 Plan Administrator shall not be disturbed
unless the Plan Administrator has acted in an arbitrary and capricious manner. Subject to the
requirements of law, the Plan Administrator 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 Plan Administrator 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 all interested parties subject,
however, to the provisions of Section 8.2. The Plan Year, for purposes of Plan administration,
shall be the calendar year.

          8.2 Claims Review Procedure. Whenever the Plan Administrator 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 Plan Administrator 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

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obtain review of the decision of the Plan Administrator 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 Plan Administrator
a written request therefor, which request shall contain the following information:

	 	(a)	 	the date on which the request was filed with the Plan Administrator; provided,
however, that the date on which the request for review was in fact filed with the Plan
Administrator 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 or her claim which the Claimant
requests the Plan Administrator to review;
	 
	 	(c)	 	a statement by the Claimant setting forth the basis upon which he or she
believes the Plan Administrator should reverse its previous denial of the claim and
accept the claim as made; and
	 
	 	(d)	 	any written material which the Claimant desires the Plan Administrator to
examine in its consideration of his or her position as stated pursuant to paragraph (b)
above.

          In accordance with this Section 8.2, if the Claimant requests a review of the claim decision,
such review shall be made by the Plan Administrator, 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 Plan Administrator
shall not be modified unless the Plan Administrator has acted in an arbitrary and capricious
manner. Subject to the requirements of law, the Plan Administrator 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 Plan Administrator shall be binding on the claimant and upon all
other persons or entities. If the Participant or Beneficiary shall not file written notice with
the Plan Administrator 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 IX

AMENDMENT AND TERMINATION OF PLAN

          9.1 Reservation of Rights. The Corporation reserves the right to terminate the Plan
at any time by action of the Board of Directors of the Corporation, or any duly authorized
committee thereof, and to modify or amend the Plan, in whole or in part, at any time and for any
reason, subject to the following:

	 	(a)	 	Preservation of Account Balance. No termination, amendment, or
modification of the Plan shall reduce (i) the amount of Deferred Bonuses, and (ii) all
earnings and gains on such Deferred Bonuses that have accrued up to the effective date
of the termination, amendment, or modification.
	 
	 	(b)	 	Changes in Earnings Rate. No amendment or modification of the Plan
shall reduce the rate of earnings to be credited on Deferred Bonuses with all earnings
and gains accrued thereon under the Common Stock Account until the close of the
applicable Plan Year in which such amendment or modification is made.

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          9.2 Effect of Plan Termination. If the Corporation terminates the Plan, either in
whole or in part, the Plan Administrator shall not accept any additional Deferred Bonuses. If such
a termination occurs, the Plan shall continue to operate and to be effective with regard to those
Deferred Bonuses maintained in the Plan prior to the effective date of such termination.

ARTICLE X

CHANGE OF CONTROL

          10.1 Change of Control. Notwithstanding any other provision of the Plan to the
contrary, in the event of a Change of Control as defined in accordance with Section 2.1(c) of the
Plan, no amendment or modification of the Plan may be made at any time on or after such Change of
Control (1) to reduce or modify a Participant’s Pre-Change of Control Account Balance, or (2) to
reduce or modify the Common Stock Accounts’ method of calculating earnings, gains, and/or losses on
the Participant’s Pre-Change of Control Account Balance. For purposes of this Section 10.1, the
term “Pre-Change of Control Account Balance” shall mean, with regard to any Plan Participant, the
aggregate undistributed amount of the Participant’s Deferred Bonus with all earnings, gains, and
losses thereon which are credited to the Participant’s Plan Account through the close of the
calendar year in which such Change of Control occurs.

          10.2 Common Stock Conversion. In the event of a transaction or occurrence in which
the Common Shares of the Corporation are converted into or exchanged for securities, cash and/or
other property as a result of any capital reorganization or reclassification of the capital stock
of the Corporation, or consolidation or merger of the Corporation with or into another corporation
or entity, or the sale of all or substantially all of its assets to another corporation or entity,
the Corporation shall cause the Common Stock Account to reflect on a bookkeeping basis the
securities, cash and other property that would have been received in such reorganization,
reclassification, consolidation, merger or sale in an equivalent amount of Common Shares equal to
the balance in the Common Stock Account and, from and after such reorganization, reclassification,
consolidation, merger or sale, the Common Stock Account shall reflect on a bookkeeping basis all
dividends, interest, earnings and losses attributable to such securities, cash, and other property.

          10.3 Amendment in the Event of a Change of Control. On and after a Change of Control,
the provisions of Article II, Article IV, Article V, Article VI, Article VII, Article VIII, Article
IX, and this Article X, may not be amended or modified as such Sections and Articles apply with
regard to the Participants’ Pre-Change of Control Account Balances.

ARTICLE XI

MISCELLANEOUS PROVISIONS

          11.1 Unfunded Plan. This Plan is an unfunded plan maintained primarily to provide
deferred compensation benefits for a select group of “management or highly-compensated employees.”

          11.2 No Commitment as to Employment. Nothing herein contained shall be construed as a
commitment or agreement upon the part of any Employee 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, rate of compensation, or terms and conditions of
employment of

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any Employee 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.

          11.3 Benefits. Nothing in the Plan shall be construed to confer any right or claim
upon any person, firm, or corporation other than the Participants, former Participants, and
Beneficiaries.

          11.4 Absence of Liability. No member of the Board of Directors of the Corporation or
a subsidiary or committee authorized by the Board of Directors, or any officer of the Corporation
or a subsidiary or officer of 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 bad faith or willful misconduct, for anything done or omitted to be
done.

          11.5 Expenses. The expenses of administration of the Plan shall be paid by the
Corporation.

          11.6 Precedent. Except as otherwise specifically agreed to by the Corporation in
writing, 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.

          11.7 Withholding. The Corporation shall withhold any tax that the Corporation in its
discretion deems necessary to be withheld from any payment to any Participant, former Participant,
or Beneficiary hereunder, by reason of any present or future law.

          11.8 Validity of Plan. The validity of the Plan shall be determined and the Plan
shall be construed and interpreted in accordance with 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.

          11.9 Parties Bound. The Plan shall be binding upon the Employers, Participants,
former Participants, and Beneficiaries hereunder, and, as the case may be, the heirs, executors,
administrators, successors, and assigns of each of them.

          11.10 Headings. All headings used in the Plan are for convenience of reference only
and are not part of the substance of the Plan.

          11.11 Duty to Furnish Information. The Corporation shall furnish to each Participant,
former Participant, or 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.

          11.12 Validity. In case any provision of this Plan shall be held illegal or invalid
for any reason, said illegality or invalidity shall not affect the remaining parts hereof, but this
Plan shall be construed and enforced as if such illegal and invalid provision had never been
inserted herein.

          11.13 Notice. Any notice required or permitted under the Plan shall be deemed
sufficiently provided if such notice is in writing and hand delivered or sent by registered or
certified mail. Such notice shall be deemed given as of the date of delivery or, if delivery is
made by mail, as of the date shown on the postmark or on the receipt for registration or
certification. Mailed notice to the Corporation shall be directed to the Corporation’s address,
attention: KeyCorp Compensation and Benefits Department. Mailed notice to a Participant or
Beneficiary shall be directed to the individual’s last known address in the Employer’s records

          11.14 Successors. The provisions of this Plan shall bind and inure to the benefit of
each Employer and its successors and assigns. The term successors as used herein shall include any
corporate

11

 

or other business entity, which shall, whether by merger, consolidation, purchase or
otherwise, acquire all or substantially all of the business and assets of an Employer.

ARTICLE XII

COMPLIANCE WITH

SECTION 409A OF THE CODE

          12.1 Compliance With Section 409A. 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 in a manner
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.
Notwithstanding any provision of the Plan to the contrary, no otherwise permissible election,
deferral, accrual, 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.

     IN WITNESS WHEREOF, KeyCorp has caused this KeyCorp Deferred Bonus Plan to be executed this
20th day of December, 2007, to be effective as of December 31, 2007.

	 	 	 	 	 	 	 	 	 	 	 
	 	 	KEYCORP  	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

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

12EX-10.40

 

Exhibit 10.40

KEYCORP

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, is hereby amended and restated effective December 31, 2007. The
Plan, as amended and restated, is structured and designed to provide a nonqualified supplemental
retirement benefit to a certain select group of employees of KeyCorp and its subsidiaries. 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
Participant’s 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
Participant’s 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 Participant’s 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 Participant’s Employment Commencement Date and Re-Employment
Commencement Date, if applicable, and ending on the Participant’s 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 Employer’s payroll processing operations, (2) the Participant’s 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 Participant’s
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 Participant’s 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 Participant’s receipt of
non-cash remuneration whether or not it is included in the Participant’s income
for federal income tax purposes;
	 
	 	(iii)	 	any amount attributable to the Participant’s 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 Participant’s termination or
retirement date.

     (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 Participant’s absence from work for 180
qualifying days, and (3) application has been made for the Participant’s disability coverage under
the KeyCorp Long Term Disability Plan.

     (i) “Early Retirement Date” shall mean the date of Participant’s retirement from his or her
employment with Employer on or after the Participant’s attainment of age 55 and completion of a
minimum of ten years of Credited Service, but prior to the Participant’s Normal Retirement Date.

     (j) “Employee” shall mean the employees listed on Exhibit A attached hereto.

     (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

2

 

Corporation. An Employer’s 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 Participant’s 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 Participant’s 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 Participant’s Compensation in effect
immediately prior to such absence. In computing a Participant’s Final Average Compensation, there
shall be included the Participant’s 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 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

3

 

	 	 	 	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
Participant’s termination date shall be utilized for purposes of determining
the Participant’s 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 Participant’s termination date shall determine the
value of such Incentive Compensation Award for purposes of calculating the
Participant’s Supplemental Pension Benefit under the provisions of Article III
of the Plan.
	 
	 	 	 	Notwithstanding the foregoing, however, in calculating the Participant’s
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 Participant’s 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 Corporation’s
attainment of certain performance criteria, or otherwise, then as of such
subsequent vesting date the Participant’s 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 Participant’s 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
performance shares under the KeyCorp Amended and Restated 1991 Equity
Compensation Plan with respect to any multi-year period, the term Incentive

4

 

	 	 	 	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. 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 Participant’s termination date shall determine the value of such
Incentive Compensation Award for purposes of calculating the Participant’s
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
Participant’s 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 Participant’s Incentive Compensation Award for such 12 month period.

     (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:

	 	(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 Participant’s 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.

5

 

	 	(vi)	 	Upon the Participant’s 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 Participant’s 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 Participant’s 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.

     (t) “Normal Retirement Date” shall mean the first day of the month coinciding with or
immediately following a Participant’s 65th birthday or, if later, the fifth anniversary of the
Participant’s 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) “Severance from Service Date” shall occur on the earlier of the date on which a
Participant quits, retires, is terminated or dies.

     (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
Participant’s 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 Participant’s termination of
employment. All compensation prior to the Participant’s date of termination of employment with an
Employer shall be based upon a

6

 

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.

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
Participant’s Discharge for Cause, and (i) as of the Participant’s 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
Participant’s employment termination that is the result of the Participant’s violation of the
Employer’s 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 Participant’s
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 Participant’s
Normal Retirement Date shall be calculated as follows:

A Participant’s Supplemental Pension Benefit shall equal the difference between

“(a)” and“(b)” where:

	 	1.	 	“(a)” is equal to 2% times the Participant’s years of Credited
Service (up to a Plan maximum of 25 years) times the Participant’s Final
Average Compensation, and

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	 	2.	 	“(b)” is equal to the sum of:

	 	(i)	 	the Participant’s accrued and vested annual
pension benefit under the Pension Plan calculated as of the
participant’s Normal Retirement Date, payable in the form of a single
life annuity option, and
	 
	 	(ii)	 	the Participant’s annual estimated Social
Security Primary Insurance Amount payable at the Participant’s Normal
Retirement Date.

     For purposes of calculating a Participant’s Supplemental Pension Benefit under this Section
3.2 hereof, the Participant’s “annual pension benefit” under the Pension Plan shall be the
Participant’s Accrued Benefit as of the Participant’s 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 Plan’s
Predecessor Plan grandfathered formula as of the Participant’s 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 Participant’s Early Retirement Date but prior to the
Participant’s Normal Retirement Date, the Participant’s Supplemental Pension Benefit shall be
calculated

as provided in accordance with Section 3.2 hereof, provided, however, that in determining the
Participant’s annual Pension Plan benefit as of the Participant’s Normal Retirement Date, the
Participant’s 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
Participant’s Pension Plan benefit at his 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 Participant’s 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 Participant’s Supplemental Pension
Benefit prior to his or her Normal Retirement Date.

3.4 Actuarial Factors. The Supplemental Pension Benefit payable to a Participant or
Participant’s 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 Participant’s Supplemental Pension Benefit, if it is determined that within six
months of the Participant’s 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 Participant’s 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
Participant’s 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.”

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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 (1) upon the Participant’s attainment of
age 55, and (2) the Participant’s termination of employment. Payment of the Participant’s
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 Participant’s 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 Participant’s termination of employment, (ii) the
Participant specifies the future date on which such Supplemental Pension Benefit shall be
distributed, (iii) the Participant’s requested deferral period is for a period of not less than
five years following the Participant’s retirement or termination of employment, 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 Participant’s 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 Participant’s Supplemental Pension Benefit may not
be made before the first day of the seventh month following the Participant’s date of separation
from service (or, if earlier, the date of the Participant’s 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 Participant’s 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 Participant’s Credited Service shall be calculated as of the Participant’s
date of death.

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	 	(ii)	 	The Participant’s 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
Participant’s Pension Plan benefit would have been as of the Participant’s 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 Participant’s 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 Participant’s 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 Participant’s Normal Retirement Date.

     (b) In the event of a Participant’s death after the Participant has commenced distribution of
his or her Supplemental Pension Benefit, there shall be paid to the Participant’s Beneficiary only
those survivor benefits provided under the form of benefit payment elected by the Participant.

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 Participant’s
termination the larger of the two Program benefits (i.e. the greater of the Participant’s 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 Participant’s
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 Participant’s 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 Participant’s death after the Participant has commenced
distribution of his or her Plan benefit, there shall be paid to the Participant’s
Beneficiary only those survivor benefits provided under the form of benefit payment
elected by the Participant.

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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 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 Corporation’s
decision, such review shall be made by the Corporation, or at the election of the Corporation, who
shall, within sixty (60) days after receipt of the request form, review and render a written
decision on the claim

11

 

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 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 Participant’s 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 Participant’s 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 Participant’s 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

12

 

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.

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
Participant’s 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 Participant’s 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 Participant’s 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

13

 

Supplemental Pension Benefit if the Participant has at least five (5) years of Credited
Service, and (i) the Participant’s 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 Participant’s mandatory relocation, reduction in the Participant’s base
salary, reduction in the Participant’s average annual incentive compensation (unless such reduction
is attributable to the overall corporate or business unit performance), or the Participant’s
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.

ARTICLE XI

COMPLIANCE WITH 

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 in a manner 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

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.

     IN WITNESS WHEREOF, KeyCorp has caused this KeyCorp Second Executive Supplemental Pension Plan
to be executed as of December 20, 2007, and to be effective as of December 31, 2007.

	 	 	 	 	 
	 	KEYCORP

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

14

 

Exhibit A

Employee

15

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