Document:

EX-10.26

 

Exhibit 10.26

INDEMNIFICATION AGREEMENT

     This Agreement made this ___th day of ___, ___, between The Lubrizol
Corporation, an Ohio corporation (the “Company”) and ___, a director, officer, employee or
representative (as hereinafter defined) of the Company (the “Indemnitee”);

     WHEREAS, the Company and the Indemnitee are each aware of the exposure to litigation of
directors, officers, employees and representatives of the Company as such persons exercise their
duties to the Company;

     WHEREAS, the Company and the Indemnitee are also aware of conditions in the insurance industry
that have affected and may continue to affect the Company’s ability to obtain appropriate liability
insurance on an economically acceptable basis;

     WHEREAS, the Company desires to continue to benefit from the services of highly qualified,
experienced and otherwise competent persons such as the Indemnitee;

     WHEREAS, the Indemnitee desires to serve or to continue to serve the Company as a director,
officer, employee and/or as a director, officer, trustee or other fiduciary of another corporation,
joint venture, trust or other enterprise in which the Company has a direct or indirect ownership
interest, for so long as the Company continues to provide on an acceptable basis adequate and
reliable indemnification against certain liabilities and expenses which may be incurred by the
Indemnitee.

     NOW, THEREFORE, in consideration of the foregoing premises and the mutual covenants herein
contained, the parties hereto agree as follows:

1. Indemnification

     The Company shall indemnify the Indemnitee with respect to his activities as a director,
officer or employee of the Company and/or as a person who is serving or has served on behalf of the
Company (“representative”) as a director, officer, trustee or other fiduciary of another
corporation, joint venture, trust or other enterprise, domestic or foreign, in which the Company
has a direct or indirect ownership interest (an “affiliated entity”) against expenses (including,
without limitation, attorneys’ fees, judgments, fines, and amounts paid in settlement) actually and
reasonably incurred by him (“Expenses”) in connection with any claim against Indemnitee which is
the subject of any threatened, pending, or completed action, suit, or proceeding, whether civil,
criminal, administrative, investigative or otherwise and whether formal or informal (a
“Proceeding”), to which Indemnitee was, is, or is threatened to be made a party by reason of facts
which include Indemnitee’s being or having been such a director, officer, employee or
representative, to the extent of the highest and most advantageous to the Indemnitee, as determined
by the Indemnitee, of one or any combination of the following:

	(a)	 	The benefits provided by the Company’s Code of Regulations in effect on the date hereof, a
copy of the relevant portions of which are attached hereto as Exhibit I;

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	(b)	 	The benefits provided by the Articles of Incorporation, Code of Regulations, or By-laws or
their equivalent of the Company in effect at the time Expenses are incurred by Indemnitee;
	 
	(c)	 	The benefits allowable under Ohio law in effect at the date hereof;
	 
	(d)	 	The benefits allowable under the law of the jurisdiction under which the Company exists at
the time Expenses are incurred by the Indemnitee;
	 
	(e)	 	The benefits available under liability insurance obtained by the Company; and
	 
	(f)	 	Such other benefits as are or may be otherwise available to Indemnitee.

     Combination of two or more of the benefits provided by (a) through (f) shall be available to
the extent that the Applicable Document, as hereafter defined, does not require that the benefits
provided therein be exclusive of other benefits. The document or law providing for the benefits
listed in items (a) through (f) above is called the “Applicable Document” in this Agreement.
Company hereby undertakes to use its best efforts to assist Indemnitee, in all proper and legal
ways, to obtain the benefits selected by Indemnitee under items (a) through (f) above. For purposes
of this Agreement, references to “other enterprises” shall include employee benefit plans for
employees of the Company or of any affiliated entity without regard to ownership of such plans;
references to “fines” shall include any excise taxes assessed on the Indemnitee with respect to any
employee benefit plan; references to “serving or has served on behalf of the Company” shall include
any service as a director, officer, employee or agent of the Company which imposes duties on, or
involves services by, the Indemnitee with respect to an employee benefit plan, its participants or
beneficiaries; references to the masculine shall include the feminine; references to the singular
shall include the plural and vice versa; and if the Indemnitee acted in good faith
and in a manner he reasonably believed to be in the interest of the participants and beneficiaries
of an employee benefit plan he shall be deemed to have acted in a manner consistent with the
standards required for indemnification by the Company under the Applicable Documents.

2. Insurance

     The Company shall maintain directors’ and officers’ or other similar liability insurance for
so long as Indemnitee’s services are covered hereunder, provided and to the extent that such
insurance is available on a basis acceptable to the Company. However, the Company agrees that the
provisions hereof shall remain in effect regardless of whether liability or other insurance
coverage is at any time obtained or retained by the Company; except that any payments in fact made
to Indemnitee under an insurance policy obtained or retained by the Company shall reduce the
obligation of the Company to make payments hereunder by the amount of the payments made under any
such insurance policy.

3. Payment of Expenses

     At Indemnitee’s request, after receipt of written notice pursuant to Section 6 hereof and an
undertaking in the form of Exhibit II attached hereto by or on behalf of Indemnitee to repay such

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amounts so paid on Indemnitee’s behalf if it shall ultimately be determined under the Applicable
Document that Indemnitee is not entitled to be indemnified by the Company for such Expenses, the
Company shall pay the Expenses as and when incurred by Indemnitee. That portion of Expenses which
represents attorneys’ fees and other costs incurred in defending any Proceeding shall be paid by
the Company within thirty (30) days of its receipt of such request, together with reasonable
documentation (consistent, in the case of attorneys’ fees, with Company practice in payment of
legal fees prior to a Change in Control, as hereafter defined) evidencing the amount and nature of
such Expenses, subject to its also having received such a notice and undertaking.

4. Escrow

     The Company shall dedicate up to an aggregate of SEVEN MILLION FIVE HUNDRED THOUSAND DOLLARS
($7,500,000) as collateral security for the initial funding of its obligations hereunder and under
similar agreements with other directors, officers, employees and representatives by depositing
assets or bank letters of credit in escrow or reserving lines of credit that may be drawn down by
an escrow agent in the dedicated amount (the “Escrow Reserve”); provided, however, that the terms
of any such Escrow reserve may provide that the cash, securities or letter or line of credit
available therefor shall only be utilized for the indemnification or advancement of expenses
provided for herein in the event that there shall have occurred within the preceding five (5) years
a Change in Control of the Company, as defined below. The Company shall promptly provide Indemnitee
with a true and complete copy of the agreement relating to the establishment and operation of the
Escrow Reserve, together with such additional documentation or information with respect to the
escrow as Indemnitee may from time to time reasonably request. The Company shall promptly deliver
an executed copy of the Agreement to the escrow agent for the Escrow Reserve to evidence to that
agent that Indemnitee is a beneficiary of that Escrow Reserve and shall deliver to Indemnitee the
escrow agent’s signed receipt evidencing that delivery. For purposes of this Agreement, a “Change
in Control” of the Company shall have occurred if at any time during the Term (as hereafter
defined) any of the following events shall occur:

	(a)	 	The Company is merged or consolidated with another corporation and as a result of such merger
or consolidation less than 80% of the outstanding voting securities of the surviving or
resulting corporation are owned in the aggregate by the shareholders of the Company,
immediately prior to such merger or consolidation;
	 
	(b)	 	There is a report filed on Scheduled 13D or Schedule 14D-l (or any successor schedule, form,
or report) each as promulgated pursuant to the Securities Exchange Act of 1934, as amended
(“Exchange Act”) disclosing the acquisition of 20% or more of the voting stock of the Company
in a transaction or series of transactions by any person (as the term “person” is used in
Section 13(d)(3) or Section 14(d)(2) of the Exchange Act);
	 
	(c)	 	The Company shall file a report or proxy statement with the Securities and Exchange
Commission pursuant to the Exchange Act disclosing in response to Item 1 of Form 8-K
thereunder or Item 5(f) of Schedule 14A thereunder (or any similar item of a successor
schedule, form or report) that a Change in Control of the Company has or may have occurred or
will or may occur in the future pursuant to any then-existing contract or transaction; or

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	(d)	 	During any period of twenty-four (24) consecutive months, individuals who at the beginning of
any such period constitute the directors of the Company cease for any reason to constitute at
least a majority thereof unless the election, or the nomination for election by the Company’s
shareholders, of each new director of the Company was approved by a vote of at least
two-thirds of the directors of the Company then still in office who were directors of the
Company at the beginning of any such period.

5. Additional Rights

     The indemnification provided in this Agreement shall not be exclusive of any other
indemnification or right to which Indemnitee may be entitled and shall continue after Indemnitee
has ceased to occupy a position as an officer, director, employee or representative as described in
Paragraph 1 above with respect to Proceedings relating to or arising out of Indemnitee’s acts or
omissions during his service in such position.

6. Notice to Company

     Indemnitee shall provide to the Company prompt written notice of any Proceeding brought,
threatened, asserted or commenced against Indemnitee with respect to which Indemnitee may assert a
right to indemnification hereunder; provided that failure to provide such notice shall not in any
way limit Indemnitee’s rights under this Agreement.

7. Cooperation in Defense and Settlement

     Indemnitee shall not make any admission or effect any settlement without the Company’s written
consent unless Indemnitee shall have determined to undertake her own defense in such manner and has
waived the benefits of this Agreement. The Company shall not settle any Proceeding to which
Indemnitee is a party in any manner which would impose any Expense on Indemnitee without his
written consent. Neither Indemnitee nor the Company will unreasonably withhold consent to any
proposed settlement. Indemnitee and the Company shall cooperate to the extent reasonably possible
with each other and with the Company’s insurers, in attempts to defend and/or settle such
Proceeding.

8. Assumption of Defense

     Except as otherwise provided below, to the extent that it may wish, the Company jointly with
any other indemnifying party similarly notified will be entitled to assume Indemnitee’s defense in
any Proceeding, with counsel mutually satisfactory to Indemnitee and the Company. After notice
from the Company to Indemnitee of the Company’s election so to assume such defense, the Company
will not be liable to Indemnitee under this Agreement for Expenses subsequently incurred by
Indemnitee in connection with the defense thereof other than reasonable costs of investigation or
as otherwise provided below. Indemnitee shall have the right to employ counsel in such Proceeding,
but the fees and expenses of such counsel incurred after notice from the Company of its assumption
of the defense thereof shall be at Indemnitee’s expense unless:

	(a)	 	The employment of counsel by Indemnitee has been authorized by the Company;

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	(b)	 	Counsel employed by the Company initially is unacceptable or later becomes unacceptable to
Indemnitee and such unacceptability is reasonable under then existing circumstances;
	 
	(c)	 	Indemnitee shall have reasonably concluded that there may be a conflict of interest between
Indemnitee and the Company in the conduct of the defense of such Proceeding; or
	 
	(d)	 	The Company shall not have employed counsel promptly to assume the defense of such
Proceeding, in each of which cases the fees and expenses of counsel shall be at the expense of
the Company and subject to payment pursuant to this Agreement. The Company shall not be
entitled to assume the defense of Indemnitee in any Proceeding brought by or on behalf of the
Company or as to which Indemnitee shall have made either of the conclusions provided for in
clauses (b) or (c) above.

9. Enforcement

     In the event that any dispute or controversy shall arise under this Agreement between
Indemnitee and the Company with respect to whether the Indemnitee is entitled to indemnification in
connection with any Proceeding or with respect to the amount of Expenses incurred, then with
respect to each such dispute or controversy Indemnitee may seek to enforce the Agreement through
legal action or, at Indemnitee’s sole option and request, through arbitration. If arbitration is
requested, such dispute or controversy shall be submitted by the parties to binding arbitration in
the City of Cleveland, State of Ohio, before a single arbitrator agreeable to both parties;
provided that indemnification in respect of any claim, issue or matter in a Proceeding brought
against Indemnitee by or in the right of the Company and as to which Indemnitee shall have been
adjudged to be liable for negligence or misconduct in the performance of her duty to the Company
shall be submitted to arbitration only to the extent permitted under the Company’s Code of
Regulations and applicable law then in effect. If the parties cannot agree on a designated
arbitrator within 15 days after arbitration is requested in writing by either of them, the
arbitration shall proceed in the City of Cleveland, State of Ohio, before an arbitrator appointed
by the American Arbitration Association. In either case, the Arbitration proceeding shall commence
promptly under the rules then in effect of that Association and the arbitrator agreed to by the
parties or appointed by that Association shall be an attorney other than an attorney who has, or is
associated with a firm having associated with it an attorney which has been retained by or
performed services for the Company or Indemnitee at any time during the five years preceding the
commencement of arbitration. The award shall be rendered in such form that judgment may be entered
thereon in any court having jurisdiction thereof. The prevailing party shall be entitled to prompt
reimbursement of any costs and expenses (including, without limitation, reasonable attorneys’ fees)
incurred in connection with such legal action or arbitration; provided that Indemnitee shall not be
obligated to reimburse the Company unless the arbitrator or court which resolves the dispute
determines that Indemnitee acted in bad faith in bringing such action or arbitration.

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10. Exclusions

     Notwithstanding the scope of indemnification which may be available to Indemnitees from time
to time under any Applicable Document, no indemnification, reimbursement or payment shall be
required of the Company hereunder with respect to:

	(a)	 	Any claim or any part thereof as to which Indemnitee shall have been adjudged by a court of
competent jurisdiction from which no appeal is or can be taken to have acted in willful
misfeasance, or willful disregard of his duties, except to the extent that such court shall
determine upon application that, despite the adjudication of liability, but in view of all the
circumstances of the case, Indemnitee is fairly and reasonably entitled to indemnity for such
expenses as the court shall deem proper;
	 
	(b)	 	Any claim or any part thereof arising under Section 16(b) of the Exchange Act pursuant to
which Indemnitee shall be obligated to pay any penalty, fine, settlement or judgment;
	 
	(c)	 	Any obligation of Indemnitee based upon or attributable to the Indemnitee gaining in fact any
personal gain, profit or advantage to which he was not entitled; or
	 
	(d)	 	Any Proceeding initiated by Indemnitee without the consent or authorization of the Board of
Directors of the Company, provided that this exclusion shall not apply with respect to any
claims brought by Indemnitee to enforce his rights under this Agreement or in any Proceeding
initiated by another person or entity whether or not such claims were brought by Indemnitee
against a person or entity who was otherwise a party to such Proceeding.

Nothing in this Section 10 shall eliminate or diminish Company’s obligations to advance that
portion of Indemnitee’s Expenses which represent attorneys’ fees and other costs incurred in
defending any Proceeding pursuant to Section 3 of this Agreement.

11. Extraordinary Transactions

     The Company covenants and agrees that, in the event of any merger, consolidation or
reorganization in which the Company is not the surviving entity, any sale of all or substantially
all of the assets of the Company or any liquidation of the Company (each such event is hereinafter
referred to as an extraordinary transaction ), the Company shall:

	(a)	 	Have the obligations of the Company under this Agreement expressly assumed by the survivor,
purchaser or successor, as the case may be, in such extraordinary transaction; or
	 
	(b)	 	Otherwise adequately provide for the satisfaction of the Company’s obligations under this
Agreement, in a manner acceptable to Indemnitee.

12. No Personal Liability

     Indemnitee agrees that neither the Directors nor any officer, employee, representative or
agent of the Company shall be personally liable for the satisfaction of the Company’s obligations
under this Agreement, and Indemnitee shall look solely to the assets of the Company and the escrow
referred to in Section 4 hereof for satisfaction of any claims hereunder.

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13. Severability.

     If any provision, phrase, or other portion of this Agreement should be determined by any court
of competent jurisdiction to be invalid, illegal or unenforceable, in whole or in part, and such
determination should become final, such provision, phrase or other portion shall be deemed to be
severed or limited, but only to the extent required to render the remaining provisions and portions
of the Agreement enforceable, and the Agreement as thus amended shall be enforced to give effect to
the intention of the parties insofar as that is possible.

14. Subrogation

     In the event of any payment under this Agreement, the Company shall be subrogated to the
extent thereof to all rights to indemnification or reimbursement against any insurer or other
entity or person vested in the Indemnitee, who shall execute all instruments and take all other
actions as shall be reasonably necessary for the Company to enforce such rights.

15. Governing Law

     The parties hereto agree that this Agreement shall be construed and enforced in accordance
with and governed by the laws of the State of Ohio.

16. Notices

     All notices, requests, demands and other communications hereunder shall be in writing and
shall be considered to have been duly given if delivered by hand and receipted for by the party to
whom the notice, request, demand or other communication shall have been directed, or mailed by
certified mail, return receipt requested, with postage prepaid:

	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	(a)

	 	If to the Company, to:
	 	THE LUBRIZOL CORPORATION

29400 Lakeland Boulevard

Wickliffe, Ohio 44092-2298

Attention: General Counsel	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	(b)

	 	If to Indemnitee, to:	 	 	 	 	 	 
	 
	 	 	 	 	 	 

	 

	 	 	 	29400 Lakeland Boulevard

Wickliffe, Ohio 44092-2298	 	 	 	 

or to such other or further address as shall be designated from time to time by the Indemnitee or
the Company to the other.

17. Termination

     This Agreement may be terminated by either party upon not less than sixty (60) days prior
written notice delivered to the other party, but such termination shall not in any way diminish the
obligations of Company hereunder (including the obligation to maintain the escrow referred to in
Section 4 hereof) with respect to Indemnitee’s activities prior to the effective date of
termination.

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18. Amendments

     This Agreement and the rights and duties of Indemnitee and the Company hereunder may not be
amended, modified or terminated except by written instrument signed and delivered by the parties
hereto. This Agreement is and shall be binding upon and shall inure to the benefits of the parties
thereto and their respective heirs, executors, administrators, successors and assigns.

     IN WITNESS WHEREOF, the undersigned have executed this Agreement in triplicate as of the date
first above written.

	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	INDEMNITEE	 	THE LUBRIZOL CORPORATION
	 
	 	 	 	 	 	 
	By

	 	 	 	By	 	 
	 

	 	 
	 	 	 	 
	 
	 	 	 	 	 	 
	Title:	 	Title: Chief Executive Officer

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EXHIBIT I
LUBRIZOL’S CODE OF REGULATIONS

Section 33. Indemnification

     The Company shall indemnify any director or officer and any former director or officer of the
Company and any such director or officer who is or has served at the request of the Company as a
director, officer or trustee of another corporation, partnership, joint venture, trust or other
enterprise (and her heirs, executors and administrators) against expenses, including attorney’s
fees, judgments, fines and amounts paid in settlement, actually and reasonably incurred by him by
reason of the fact that he is or was such director, officer or trustee in connection with any
threatened, pending or completed action, suit or proceeding, whether civil, criminal,
administrative or investigative to the full extent permitted by applicable law. The indemnification
provided for herein shall not be deemed to restrict the right of the Company (i) to indemnify
employees, agents and others to the extent not prohibited by such law, (ii) to purchase and
maintain insurance or furnish similar protection on behalf of or for any person who is or was a
director, officer, employee or agent of the Company, or any person who is or was serving at the
request of the Company as a director, officer, trustee, employee or agent of another corporation,
joint venture, partnership, trust or other enterprise against any liability asserted against him or
incurred by him in any such capacity or arising out of her status as such, and (iii) to enter into
agreements with persons of the class identified in clause (ii) above indemnifying them against any
and all liabilities (or such lesser indemnification as may be provided in such agreements) asserted
against or incurred by them in such capacities.

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EXHIBIT II
FORM OF UNDERTAKING

     THIS UNDERTAKING has been entered into by ______ (hereinafter “Indemnitee”) pursuant to
an Indemnification Agreement dated _________ (the “Indemnification Agreement”) between The
Lubrizol Corporation (hereinafter “Company”), an Ohio corporation and Indemnitee.

W I T N E S S E T H:

     WHEREAS, pursuant to the Indemnification Agreement, Company agreed to pay Expenses (within the
meaning of the Indemnification Agreement) as and when incurred by Indemnitee in connection with any
claim against Indemnitee which is the subject of any threatened, pending, or completed action,
suit, or proceeding, whether civil, criminal, administrative or investigative, to which Indemnitee
was, is, or is threatened to be made a party by reason of facts which include Indemnitee’s being or
having been a director, officer or representative (within the meaning of the Indemnification
Agreement) of Company;

     WHEREAS, such a claim has arisen against Indemnitee and Indemnitee has notified Company
thereof in accordance with the terms of Section 6 of the Indemnification Agreement (hereinafter the
“Proceeding”);

     WHEREAS, Indemnitee believes that Indemnitee should prevail in this Proceeding and it is in
the interest of both Indemnitee and Company to defend against the claim against Indemnitee
thereunder;

     NOW, THEREFORE, Indemnitee hereby agrees that in consideration of Company’s advance payment of
Indemnitee’s Expenses incurred prior to a final disposition of the Proceeding, Indemnitee hereby
undertakes to reimburse Company for any and all Expenses paid by Company on behalf of Indemnitee
prior to a final disposition of the Proceeding in the event that Indemnitee is determined under the
Applicable Document (within the meaning of the Indemnification Agreement) not to be entitled to
indemnification for such Expenses pursuant to the Indemnification Agreement and applicable law,
provided that if Indemnitee is entitled under the Applicable Document to indemnification for some
or a portion of such Expenses, Indemnitee’s obligation to reimburse Company shall only be for those
Expenses for which Indemnitee is determined not to be entitled to indemnification. Such
reimbursement or arrangements for reimbursement by Indemnitee shall be consummated within ninety
(90) days after a determination that Indemnitee is not entitled to indemnification and
reimbursement pursuant to the Indemnification Agreement and applicable law.

     IN WITNESS WHEREOF, the undersigned has set his hand this ___day of ___, ___.

	 	 	 
	 

	 	INDEMNITEE
	 
	 	 
	 

	 	 

10EX-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 is hereby 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. 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.

     In the case of a Disabled Participant, such Participant’s Compensation for each year while
Disabled shall equal an amount which shall reflect the Participant’s Compensation for the calendar
year preceding the date of the Participant’s Disability.

     (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) the physical or mental disability of a permanent nature which
prevents a Participant from performing the duties such Participant was employed to perform for his
or her Employer when such disability commenced, (2) qualifies for disability benefits under the
federal Social Security Act within 30 months following the Participant’s disability, and (3)
qualifies the Participant for disability coverage under the KeyCorp Long Term Disability Plan. In
addition to the foregoing, the disability requirements addressed in Section 409A of the Code are
incorporated into the provisions of this definition.

     (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.

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     (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 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

3

 

	 	 	 	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
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).

4

 

	 	 	 	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
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.

5

 

	 	(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(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 discharged 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.

6

 

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 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) terminates active employment with
an Employer upon becoming Disabled after completing five or more years of Credited Service and
disability benefits have ceased under the KeyCorp Long-Term Disability Plan due to the
Participant’s election for Early or Normal Retirement under the Pension Plan, 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:

7

 

     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
	 
	 	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 is eligible for and elects to receive 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 elects to receive 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

8

 

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.”

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 meeting the age and service
eligibility requirements of Section 3.1, shall receive an immediate distribution of his or her
Supplemental Pension Benefit upon the Participant’s termination of employment 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 who terminates his or her employment with an
Employer after meeting the age and service requirements of Section 3.1, 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.

     Notwithstanding the foregoing, in the case of an “unforeseeable emergency”, upon written
application by the Participant to the Corporation, the Corporation may accelerate the distribution
of the Participant’s deferred Supplemental Pension Benefit. For purposes of this Section 4.2, the
term “unforeseeable emergency” shall mean a severe financial hardship to the Participant resulting
from a sudden and unexpected illness or accident of the Participant, the Participant’s spouse, or
the Participant’s dependent (as defined in Section 152(a) of the Code), the loss of the
Participant’s property due to casualty, or such other similar extraordinary and unforeseeable
circumstances arising as a result of events beyond the control of the Participant. The
determination of an “unforeseeable emergency” and the ability of the Corporation to accelerate the
Participant’s Supplemental Pension Benefit shall be determined in accordance with the requirements
of Section 409A of the Code and applicable regulations issued thereunder.

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 date which is six months after the Participant’s date of separation from service (or, if
earlier, the date of death of the

9

 

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.

4.4 Payment Upon Death of 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.
	 
	 	(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

10

 

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.

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

11

 

	 	 	 	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 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 of
the Plan, or any Participant or Participant’s Beneficiary who is receiving, or who is eligible to
receive a Supplemental

12

 

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 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

13

 

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 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 early taxation or assessment of penalties or interest of any amount under Section
409A of the Code.

     Notwithstanding any provision of the Plan to the contrary, Supplemental Pension Benefits shall
not be distributed to a Participant earlier than:

	 	(a)	 	the Participant’s separation from service as determined by the
Secretary of the Treasury (except as provided below with respect to a key
employee of the Corporation);

14

 

	 	(b)	 	death of the Participant; or
	 
	 	(c)	 	upon the occurrence to the Participant, the Participant’s
spouse, or the Participant’s dependent an unforeseeable emergency as defined in
Section 409A(a)(2)(B)(ii) of the Code.

     If it is determined that a Participant constitutes a key employee (as defined in Section
416(i) of the Code without regard to paragraph (5) thereof) of the Corporation, the Participant
shall not commence the distribution of his or her Supplemental Pension Benefits before the date
which is six months after the date of the Participant’s separation from service (or, if earlier,
the date of death of the Participant).

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 21, 2006, and to be effective as of December 31, 2006.

	 	 	 	 	 	 	 
	 	 	KEYCORP	 	 
	 
	 

	 	By:
	 	/s/ Thomas Helfrich	 	 
	 

	 	 	 	 	 	 
	 

	 	Title:
	 	Executive Vice President	 	 

15

 

Exhibit A

     Employee

16

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