Document:

EX-10.1

 

EXHIBIT 10.1

FIRST AMENDMENT TO

AGREEMENT TO ACQUIRE LEASES AND LEASE PROPERTIES

     This First Amendment to Agreement to Acquire Leases and Lease Properties (this “Amendment”)
dated February 15, 2008 (the “Effective Date”) by and between VALUE CITY DEPARTMENT STORES LLC, an
Ohio limited liability company and successor by merger to Value City Department Stores, Inc.,
having an address of 3241 Westerville Road, Columbus, Ohio 43224 (“VCDS”), GB RETAILERS, INC., a
Delaware corporation having an address of 3241 Westerville Road, Columbus, Ohio 43224 (“GB” and
collectively with VCDS, the “VCDS Tenants”), SCHOTTENSTEIN STORES CORPORATION, an Ohio corporation
having an address of 1800 Moler Road, Columbus, Ohio 43207 (“SSC”), TRUSS REALTY CO., an Ohio
limited partnership having an address of 1800 Moler Road, Columbus, Ohio 43207 (“Truss”), VALLEY
FAIR CORPORATION, a Delaware corporation having an address of 1800 Moler Road, Columbus, Ohio 43207
(“Valley Fair”), EAST MAIN CENTERS-I LLC, an Ohio limited liability company having an address of
1800 Moler Road, Columbus, Ohio 43207 (“EMC”), and INDEPENDENCE LIMITED LIABILITY COMPANY, an Ohio
limited liability company having an address of 1800 Moler Road, Columbus, Ohio 43207
(“Independence” and together with SSC, Truss, Valley Fair and EMC, the “SSC Landlords”); RETAIL
VENTURES, INC., an Ohio corporation having an address of 3241 Westerville Road, Columbus, Ohio
43224 (“RVI”) (the VCDS Tenants, the SSC Landlords, and RVI, each being a “VCDS Entity” and
collectively, the “VCDS Entities”); and BURLINGTON COAT FACTORY WAREHOUSE CORPORATION, a Delaware
corporation having an address of 1830 Route 30, Burlington, New Jersey 08016 (“BURLINGTON”), and
the affiliate entities of Burlington set forth in Exhibit A to the Agreement (as defined
below) (collectively with BURLINGTON, the “BURLINGTON Entities”).

R E C I T A L S

     On October 3, the parties hereto entered into an Agreement to Acquire Leases and Lease
Properties (the “Agreement”).

     Pursuant to Section 3 of the Agreement, BURLINGTON is required to notify VCDS of (i) those
Leases which it elects to acquire by assignment, (ii) those Leased Premises with respect to which
it desires to enter into new leases with the SSC Landlords, (iii) those Leased Premises with
respect to which it desires to sublease from SSC or VCDS, (iv) those Leases and Leased Premises it
elects not to acquire by assignment, lease or sublease, and (v) those Leases as to which it elects
to extend the Consent Date (the “BURLINGTON Elections”).

     On December 19, 2008, BURLINGTON provided notice to the VCDS Entities of the BURLINGTON
Election.

     The parties desire to amend the Agreement to reflect the BURLINGTON Election, extend the
Consent Date for certain Leases, and make conforming changes.

 

Agreement

     NOW, THEREFORE, in consideration of the foregoing and other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

     1. All capitalized terms used herein, which are not specifically defined herein, shall have
the meaning ascribed to those terms in the Agreement.

     2. BURLINGTON acknowledges and agrees that it has waived all contingencies with respect to the
Leases set forth on Exhibit 1 hereto and is prepared to proceed to Closing following the
completion of the GOB Sales with respect to the such leases.

     3. In reliance upon BURLINGTON’s waiver of contingencies in the preceding paragraph, SSC
hereby waives all contingencies with respect to SSC Leases 110 and 145 and SSC Assigned
Lease 136.

     4. Pursuant to its rights under Section 3(a) of the Agreement, BURLINGTON has elected to cause
the Lease for Store No. 153 to become a BURLINGTON Rejection Lease. Further, such Lease
for Store No. 153 shall be deemed a Removed Lease pursuant to Section 3(c) of the Agreement. Such
Lease is hereby removed from the list of Leases in Exhibit B to the Agreement and the list
of Assignment Leases in Exhibit E to the Agreement.

     5. Pursuant to its rights under Section 3(a) of the Agreement, BURLINGTON has elected to cause
the Lease for Store No. 102 to become a BURLINGTON Rejection Lease. Further, such Lease
for Store No. 102 shall be deemed a Removed Lease pursuant to Section 3(c) of the Agreement. Such
Lease is hereby removed from the list of Leases in Exhibit B to the Agreement.

     6. The Closing with respect to the SSC Leases 110 and 145 shall occur on or before
April 1, 2008 in accordance with the Agreement.

     7. The Closing with respect to SSC Assigned Lease 136 shall occur on or before April
1, 2008 in accordance with the Agreement.

     8. The Closing with respect to Assignment Leases 107, 144, 185 and 196 shall occur on
or before February 15, 2008 in accordance with the Agreement.

     9. The Closing with respect to Assignment Leases 167, 181 and 425 shall occur on or
before March 15, 2008 in accordance with the Agreement.

     10. The Closing with respect to Assignment Lease 198 shall occur on or before April 1,
2008 in accordance with the Agreement.

     11. The Consent Date for Leases 152, 158, 177 and 189 (the “PREIT Leases”) is hereby
extended from December 20, 2007 to February 15, 2008. Further, with respect to the PREIT Leases,
Section 3(c) of the Agreement is hereby amended to change the date of December 31, 2007 to February
15, 2008 each place it appears. Provided, however, that with

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respect to Lease 189, VCDS and Landlord shall enter into a Termination Agreement in the form
attached hereto as Exhibit AA providing for the termination of such Lease on March 31, 2008
in return for a Termination Fee in the amount of Six Million Dollars ($6,000,000) to be paid by the
Landlord to VCDS, and Burlington and the Landlord shall enter into a new Lease for such space. The
Allocated Purchase Price for Lease 189 on Exhibit K shall be deleted. Further, with
respect to Leases 152, 158 and 177, in lieu of assignment of the Leases, the Leases will be
terminated on the Closing Date pursuant to a Termination Agreement substantially in the form of
Exhibit AA hereto, but without payment of a Termination Fee, and Burlington shall enter into new
leases with the Landlord.

     12. The Consent Date for Leases 129, 162, 164, 188, 401, 402 and 403 is hereby
extended from December 20, 2007 to June 20, 2008. Further, with respect to such Leases, Section
3(c) of the Agreement is hereby amended to change the date of December 31, 2007 to July 1, 2008
each place it occurs.

     13. The Closing Date with respect to each of the Leases 162, 164, 401, 402 and 403 shall occur
on or before the earlier of five (5) business days after Burlington delivers written notice to VCDS
that it has obtained the necessary Consents or waived such Consent requirements or September 1,
2008. Provided, however, if the Closing Date is earlier than September 1, 2008, at the request of
VCDS, VCDS and Burlington shall enter into a License Agreement in the form attached hereto as
Exhibit BB pursuant to which VCDS shall continue to occupy the Premises during the period
between the Closing Date and the date that is ninety (90) days after the notice for the purpose of
conducting GOB Sales, and the Possession Date shall be September 1, 2008 or such earlier date as
VCDS and Burlington may specify in such License Agreement.

     14. Section 3(d) of the Agreement is hereby amended to change the date by which SSC may elect
to cause a VCDS Removal of Leases 188 and 129 from March 1, 2008 to July 1, 2008.

     15. Section 5 of the Agreement is hereby amended to delete the dates February 8, 2008 and
March 15, 2008 and replace them with the Possession Date for each Lease set forth on First
Amended Exhibit T attached hereto.

     16. The date December 31, 2007 in the third from the last line of Section 5 of the Agreement
shall be changed to February 15, 2008 with respect to the PREIT Leases and July 1, 2008
with respect to Leases 129, 162, 164, 188, 401, 402 and 403.

     17. Section 9.4(d) of the Agreement is amended by deleting the first two sentences thereof in
their entirety and replacing them with the following:

	 	 	It is the intention of the parties that notwithstanding the delivery
of possession of each Leased Premises on the applicable Possession
Date, BURLINGTON, as to each of the Leased Premises having
Possession Dates prior to April 15, 2008 as set forth on Exhibit
T hereto, shall not be obligated to pay rent until August 1,
2008. Provided, however, for any Lease listed on Exhibit Z
hereof,

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	 	 	except Leases 401 and 402, for each day after February 15, 2008
through March 15, 2008 that the Closing is not held and possession
of the Leased Premises delivered the rent shall be abated for one
additional day after August 1, 2008. If the Closing Date for any
Lease listed on Exhibit Z, except Leases 401 and 402, is not
held on or before February 15, 2008, it shall be held on or before
March 15, 2008, and the date on which it is held shall be referred
to herein as the “Alternate Closing Date.”

     18. Exhibit T to the Agreement is deleted in its entirety and replaced with First
Amended Exhibit T attached hereto.

     19. All other provisions of the Agreement shall be unmodified and shall remain in full force
and effect.

     20. Any party hereto may execute this Amendment by facsimile signature, which facsimile
signature shall be deemed to be an original signature; provided, however, delivery of an executed
counterpart by telecopy shall be as effective as delivery of a manually executed counterpart
hereto, provided that an original executed counterpart is delivered within two (2) days from
delivery of the telecopy counterpart.

     21. This Amendment may be executed in two or more counterparts, each of which shall be deemed
an original, but all of which together shall constitute one and the same instrument.

[Remainder of the page intentionally left blank; signature pages follow.]

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     IN WITNESS WHEREOF, VCDS and BURLINGTON have executed this Amendment as of the date first
written above.

	 	 	 	 	 
	 	VALUE CITY DEPARTMENT STORES LLC

 	 
	 	By:  	/s/ Rolando de Aguiar
 	 
	 	 	Name:  	Rolando de Aguiar 	 
	 	 	Title:  	Vice President 	 
	 

	 	 	 	 	 
	 	GB RETAILERS, INC.

 	 
	 	By:  	/s/ Rolando de Aguiar
 	 
	 	 	Name:  	Rolando de Aguiar 	 
	 	 	Title:  	Vice President 	 
	 

	 	 	 	 	 
	 	SCHOTTENSTEIN STORES CORPORATION

 	 
	 	By:  	/s/ Jeffry D. Swanson
 	 
	 	 	Name:  	Jeffry D. Swanson 	 
	 	 	Title:  	Vice President 	 
	 

	 	 	 	 	 
	 	RETAIL VENTURES, INC.

 	 
	 	By:  	/s/ James A. McGrady
 	 
	 	 	Name:  	James A. McGrady 	 
	 	 	Title:  	Chief Financial Officer 	 
	 

	 	 	 	 	 
	 	TRUSS REALTY CO.

 	 
	 	By:  	/s/ Jay L. Schottenstein
 	 
	 	 	Name:  	Jay L. Schottenstein 	 
	 	 	Title:  	 	 
	 

	 	 	 	 	 
	 	VALLEY FAIR CORPORATION

 	 
	 	By:  	/s/ Jeffry D. Swanson
 	 
	 	 	Name:  	Jeffry D. Swanson 	 
	 	 	Title:  	Vice President 	 
	 

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	 	EAST MAIN CENTERS-I LLC

 	 
	 	By:  	/s/ Jeffry D. Swanson
 	 
	 	 	Name:  	Jeffry D. Swanson 	 
	 	 	Title:  	Vice President 	 
	 

	 	 	 	 	 
	 	INDEPENDENCE LIMITED LIABILITY COMPANY

 	 
	 	By:  	/s/ Jeffry D. Swanson
 	 
	 	 	Name:  	Jeffry D. Swanson 	 
	 	 	Title:  	Vice President 	 
	 

	 	 	 	 	 
	 	BURLINGTON COAT FACTORY WAREHOUSE 
CORPORATION
 	 
	 	By:  	/s/ Mark A. Nesci
 	 
	 	 	Mark A. Nesci, Executive Officer 	 
	 	 	 	 
	 

	 	 	BURLINGTON COAT FACTORY OF OHIO, LLC,

an Ohio limited liability company

	 	By:  	 	Burlington Coat Factory Warehouse

Corporation, its sole member

	 	 	 	 	 
	 	 	 
	 	By:  	                                                  /s/ Mark A. Nesci
 	 
	 	 	Mark A. Nesci, Chief Executive Officer 	 
	 	 	 	 
	 

	 	 	BURLINGTON COAT FACTORY OF 

KENTUCKY, LLC, a Kentucky limited
liability 
company

	 	By:  	 	Burlington Coat Factory Warehouse

Corporation, its sole member

	 	 	 	 	 
	 	 	 
	 	By:  	                                                  /s/ Mark A. Nesci
 	 
	 	 	Mark A. Nesci, Chief Executive Officer 	 
	 	 	 	 
	 

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	 	 	BURLINGTON COAT FACTORY OF

NEW JERSEY, LLC, a New Jersey limited

liability company

	 	By:  	 	Burlington Coat Factory Warehouse 
Corporation,
its sole member

	 	 	 	 	 
	 	 	 
	 	By:  	                                                  /s/ Mark A. Nesci
 	 
	 	 	Mark A. Nesci, Chief Executive Officer 	 
	 	 	 	 
	 

	 	 	BURLINGTON COAT FACTORY OF

PENNSYLVANIA, LLC, a Pennsylvania limited

liability company

	 	By:  	 	Burlington Coat Factory Warehouse

Corporation, its sole member

	 	 	 	 	 
	 	 	 
	 	By:  	                                                  /s/ Mark A. Nesci
 	 
	 	 	Mark A. Nesci, Chief Executive Officer 	 
	 	 	 	 
	 

	 	 	BURLINGTON COAT FACTORY OF 
MARYLAND, LLC, a Maryland
limited liability 
company

	 	By:  	 	Burlington Coat Factory Warehouse 
Corporation,
its sole member

	 	 	 	 	 
	 	 	 
	 	By:  	                                                  /s/ Mark A. Nesci
 	 
	 	 	Mark A. Nesci, Chief Executive Officer 	 
	 	 	 	 
	 

	 	 	BURLINGTON COAT FACTORY OF

DELAWARE, LLC, a Delaware
limited liability 
company

	 	By:  	 	Burlington Coat Factory Warehouse 

Corporation, its sole member

	 	 	 	 	 
	 	 	 
	 	By:  	                                                  /s/ Mark A. Nesci
 	 
	 	 	Mark A. Nesci, Chief Executive Officer 	 
	 	 	 	 
	 

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	 	 	BURLINGTON COAT FACTORY OF GEORGIA, LLC,

a Georgia limited liability company

	 	By:  	 	Burlington Coat Factory Warehouse

Corporation, its sole member

	 	 	 	 	 
	 	 	 
	 	By:  	                                                  /s/ Mark A. Nesci
 	 
	 	 	Mark A. Nesci, Chief Executive Officer 	 
	 	 	 	 
	 

	 	 	BURLINGTON COAT FACTORY OF NORTH

CAROLINA, LLC, a North Carolina limited

liability company

	 	By:  	 	Burlington Coat Factory Warehouse

Corporation, its sole member

	 	 	 	 	 
	 	 	 
	 	By:  	                                                  /s/ Mark A. Nesci
 	 
	 	 	Mark A. Nesci, Chief Executive Officer 	 
	 	 	 	 
	 

	 	 	BURLINGTON COAT FACTORY OF

MISSOURI, LLC, a Missouri limited liability

company

	 	By:  	 	Burlington Coat Factory Warehouse

Corporation, its sole member

	 	 	 	 	 
	 	 	 
	 	By:  	                                                  /s/ Mark A. Nesci
 	 
	 	 	Mark A. Nesci, Chief Executive Officer 	 
	 	 	 	 
	 

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EXHIBIT 1

	 	 	107
	 
	 	 	110
	 
	 	 	136
	 
	 	 	144
	 
	 	 	145
	 
	 	 	167
	 
	 	 	181
	 
	 	 	185
	 
	 	 	196
	 
	 	 	198
	 
	 	 	425EX-10.9

 

Exhibit 10.9

KEYCORP

ANNUAL INCENTIVE PLAN

(January 1, 2008 Restatement)

     KeyCorp (the “Corporation”) hereby establishes this Annual Incentive Plan for the purpose of
providing a discretionary annual incentive to selected key officers of the Corporation and its
subsidiaries.

ARTICLE
I

DEFINITIONS

     For the purposes hereof, the following words and phrases shall have the meanings indicated:

     1. A “Beneficiary” shall mean any person designated by a Participant in accordance with the
Plan to receive payment of all or a portion of any Incentive Award for which the Participant is
eligible at the time of the Participant’s death.

     2. A “Change of Control” shall mean a Change of Control under any of clauses (a), (b), (c), or
(d) below. A “Non-Initiated Change of Control” shall mean (i) a Change of Control under clause (c)
below (regardless of whether it also constitutes a Change of Control under any other clause below),
and (ii) a Change of Control under clause (a), (b), or (d) below if such Change of Control results
in whole or in any significant part, directly or indirectly, proximately or remotely, from or in
response or reaction to an offer or proposal (whether to the Board of Directors or the shareholders
of the Corporation) which was not solicited or invited by the management of the Corporation to
engage in a transaction with the Corporation that, if consummated, would result in a Change Event
under clause (c) below. An “Initiated Change of Control” shall mean all Changes of Control other
than a Non-Initiated Change of Control. The determination of the Committee whether a Change of
Control constitutes an Initiated or Non-Initiated Change of Control shall be final and conclusive.
For purposes of this definition, the Corporation will be deemed to have become a subsidiary of
another corporation if any other

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corporation (which term shall include, in addition to a corporation, a limited liability company,
partnership, trust, or other organization) owns, directly or
indirectly,
50 percent or more of the total combined outstanding voting power of all classes of stock of the
Corporation or any successor to the Corporation.

     (a) A Change of Control will have occurred under this clause (a) if the
Corporation is a party to a transaction pursuant to which the Corporation is merged
with or into, or is consolidated with, or becomes the subsidiary of another
corporation and either

(i) immediately after giving effect to that transaction, less than
65% of the then outstanding voting securities of the surviving or
resulting corporation or (if the Corporation becomes a subsidiary in
the transaction) of the ultimate parent of the Corporation represent
or were issued in exchange for voting securities of the Corporation
outstanding immediately prior to the transaction, or

(ii) immediately after giving effect to that transaction,
individuals who were directors of the Corporation on the day before
the first public announcement of (x) the pendency of the transaction
or (y) the intention of any person or entity to cause the
transaction to occur, cease for any reason to constitute at least
51% of the directors of the surviving or resulting corporation or
(if the Corporation becomes a subsidiary in the transaction) of the
ultimate parent of the Corporation.

     (b) A Change of Control will have occurred under this clause (b) if a
tender or exchange offer shall be made and consummated for 35% or more of
the outstanding voting stock of the Corporation or any person (as the term
“person” is used in Section 13(d) and Section 14(d)(2) of the 1934 Act) is
or becomes the beneficial owner of 35% or more of the

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outstanding voting stock of the Corporation or there is a report filed
on Schedule 13D or Schedule 14D-1 (or any successor schedule, form or
report), each as adopted under the 1934 Act, disclosing the acquisition of
35% or more of the outstanding voting stock of the Corporation in a
transaction or series of transactions by any person (as defined earlier in
this clause (b)).

     (c) A Change of Control will have occurred under this clause (c) if
either

(i) without the prior approval, solicitation, invitation, or
recommendation of the Corporation Board of Directors any person or
entity makes a public announcement of a bona fide intention (A) to
engage in a transaction with the Corporation that, if consummated,
would result in a Change Event (as defined below in this clause (c)),
or (B) to “solicit” (as defined in Rule 14a-1 under the 1934 Act)
proxies in connection with a proposal that is not approved or
recommended by the Corporation Board of Directors, or

(ii) any person or entity publicly announces a bona fide intention
to engage in an election contest relating to the election of
directors of the Corporation (pursuant to Regulation 14A, including
Rule 14a-11, under the 1934 Act), and, at any time within the 24
month period immediately following the date of the announcement of
that intention, individuals who, on the day before that
announcement, constituted the directors of the Corporation (the
“Incumbent Directors”) cease for any reason to constitute at least a
majority thereof unless both (A) the election, or the nomination for
election by the Corporation’s shareholders, of each new director was
approved by a vote of at least two-thirds of the

3

 

Incumbent Directors in office at the time of the election or
nomination for election of such new director, and (B) prior to the
time that the Incumbent Directors no longer constitute a majority of
the Board of Directors, the Incumbent Directors then in office, by a
vote of at least 75% of their number, reasonably determine in good
faith that the change in Board membership that has occurred before
the date of that determination and that is anticipated to thereafter
occur within the balance of the 24 month period to cause the
Incumbent Directors to no longer be a majority of the Board of
Directors was not caused by or attributable to, in whole or in any
significant part, directly or indirectly, proximately or remotely,
any event under subclause (i) or (ii) of this clause (c).

For purposes of this clause (c), the term “Change Event” shall mean any of the
events described in the following subclauses (x), (y), or (z) of this clause (c):

(x) A tender or exchange offer shall be made for 25% or more of the
outstanding voting stock of the Corporation or any person (as the term
“person” is used in Section 13(d) and Section 14(d)(2) of the 1934 Act) is
or becomes the beneficial owner of 25% or more of the outstanding voting
stock of the Corporation or there is a report filed on Schedule 13D or
Schedule 14D-1 (or any successor schedule, form, or report), each as adopted
under the 1934 Act, disclosing the acquisition of 25% or more of the
outstanding voting stock of the Corporation in a transaction or series of
transactions by any person (as defined earlier in this
subclause (x)).

(y) the Corporation is a party to a transaction pursuant to which the
Corporation is merged with or into, or is consolidated with, or becomes the
subsidiary of another corporation and, after giving effect to such
transaction, less than 50% of the then outstanding voting securities of the

4

 

surviving or resulting corporation or (if the Corporation becomes a
subsidiary in the transaction) of the ultimate parent of the Corporation
represent or were issued in exchange for voting securities of the
Corporation outstanding immediately prior to such transaction or less than
51% of the directors of the surviving or resulting corporation or (if the
Corporation becomes a subsidiary in the transaction) of the ultimate parent
of the Corporation were directors of the Corporation immediately prior to
such transaction.

(z) There is a sale, lease, exchange, or other transfer (in one transaction
or a series of related transactions) of all or substantially all the assets
of the Corporation.

     (d) A Change of Control will have occurred under this clause (d) if there is a
sale, lease, exchange, or other transfer (in one transaction or a series of related
transactions) of all or substantially all of the assets of the Corporation.

     3. The “Committee” shall mean the Compensation and Organization Committee of the Board of
Directors of the Corporation or other Committee of the Board of Directors hereafter succeeding to
the responsibilities currently performed by the Compensation and Organization Committee with
respect to the Plan.

     4. “Grant Agreement” shall mean the agreement under which the Participant’s restricted stock
and/or restricted stock units are granted to the Participant in accordance with the requirements of
the KeyCorp 2004 Equity Plan, as may be amended from time to time.

     5. An “Incentive Award” shall mean the incentive which may be paid to a Participant pursuant
to the Plan.

     6. “Market Point” shall mean for any Participant for any calendar year the market point (as
determined under the Corporation’s salary administration program) of such Participant’s job grade
at the end of the calendar year; provided, however, that if the Corporation changes such
Participant’s job grade during any such calendar year or such

5

 

Participant is promoted, transferred, or otherwise moves into a different job grade during such
calendar year, then such Market Point shall be calculated on a pro rata basis for each of the
periods in which such job grades were in effect for such Participant.

     7. A “Participant” shall mean a senior officer of the Corporation or one of its subsidiaries
who is selected by the Committee to participate in the Plan.

     8. The
“Plan” shall mean this Annual Incentive Plan, together with
all amendments hereto.

     9. “Plan Year” shall mean each calendar year for which the Plan remains in existence.

     10. “Subsidiary” shall mean a corporation organized and existing under the laws of the United
States or of any state or the District of Columbia of which 50 percent or more of the issued and
outstanding stock is owned by the Corporation or by a Subsidiary of the Corporation.

     11. The “Target Incentive Pool” shall mean the aggregate amount, as determined in accordance
with Article II of the Plan, of the aggregate individual target Incentive Awards of Participants.

     12. “Target Pool Percentage” shall mean the percentage determined pursuant to Article II,
Sections 3 and 4 below that will be used to establish the aggregate amount available for Incentive
Awards.

     13. The “1934 Act” shall mean the Securities Exchange Act of 1934 as from time to time
amended.

ARTICLE
II

INCENTIVE
AWARDS

     1. Participation. Annually, the Committee shall select the Participants in the Plan
for the Plan Year. In general, the selection will be made prior to the beginning of each Plan Year
or as soon thereafter as is reasonably practicable; in addition, such selection may be
made at any time during a Plan Year in the case of a newly hired employee or an employee that

6

 

receives a new position. Not in limitation of the foregoing, the Committee shall have the
authority to designate at the beginning of a Plan Year, or as soon thereafter as is reasonably
practicable, employees in selected job grades as Participants, including any employee that may
later be hired or promoted into any such job grade during the Plan Year, without further action on
behalf of the Committee. Participants shall be notified of their selection in writing. In the
event that employees are determined to be Participants by job grade, the Chief Executive Officer,
or his or her designee, may select, subject to the approval of the Committee or in accordance with
guidelines established by the Committee, additional eligible employees for Plan participation
notwithstanding their job grade. Employees otherwise eligible for participation because of their
job grade may be excluded, by action of the Committee or the Chief Executive Officer (or his or her
designee), if they are participants in business unit or other incentive compensation plans.

     2. Incentive Pool. The Committee shall approve on an annual basis the recommended
target incentives for persons selected to be in the Plan. Target incentives for Participants who
are eligible for part of the Plan Year or whose incentive group assignment changed during the Plan
Year will be calculated on a pro rata basis for both the period of each incentive group assignment
and the period during the Plan Year in which the Participant was an eligible employee. In the
event that an individual whose job does not have an assigned salary grade is approved for
participation in the Plan, the Chief Executive Officer, or his or her designee, is authorized to
select a target incentive percentage for such individual and base the calculation of target
incentive and other calculations under this Plan on such individual’s base salary.

     3. Formula for Target Pool Percentage; Knock-Out Factor. Prior to each Plan Year or
as soon as practical thereafter, the Committee shall devise a formula to determine the Target Pool
Percentage which formula shall be based on one or more financial criteria or other performance
goals. The Committee shall have the discretion to set minimal performance goals
which must be met before any Incentive Awards will be made under the Plan. In its sole

7

 

discretion
the Committee may revise or waive one or more of such minimal performance goals as a result of any
change in conditions or the occurrence of any events or other factors which make such goal or goals
unsuitable or undesirable. Notwithstanding that the Corporation has not met a minimal performance
goal, if the Committee determines that one or more lines of business of the Corporation have had a
level of performance deserving of Incentive Awards, the Committee may establish a pool for
Incentive Awards utilizing a Target Pool Percentage fixed at 25% (or such higher or lower
percentage as the Committee, in its sole discretion, shall determine).

     4. Incentive Awards. As soon as practical after the end of the Plan Year, the
Committee shall determine the Target Pool Percentage (not to exceed 300%) to be applied to the
Target Incentive Pool to establish the maximum aggregate amount to be distributed as Incentive
Awards. The percentage shall be based on the formula established in Section 3 hereof but the
Committee shall have the discretion to decrease or increase the otherwise determined Target Pool
Percentage for the Plan Year by not more than thirty per cent (30%) of such Target Pool Percentage.
(For example, if the Target Pool Percentage is established at 120%, the Committee would have the
discretion to increase the Target Pool Percentage to not more than 156% or to decrease the Target
Pool Percentage to not less than 84%.) In determining whether, and the extent to which, the
formula established in Section 3 hereof has been achieved, the Committee shall have the discretion
to disregard changes in accounting rules or practices, gains from the sale of subsidiaries or
assets outside the ordinary course of business, or restructuring or other nonrecurring charges or
similar adjustments. It is contemplated that Incentive Awards may, depending upon the
responsibilities of the Participant, be based wholly on corporate performance, partially on
corporate performance and partially on line of business or business unit performance, or wholly on
line of business or business unit performance. Ordinarily, the Committee will delegate to
management responsibility for determining Target Pool Percentages for each line of business or
business unit provided that
the aggregate weighted average Target Pool Percentages for all lines of business and business

8

 

units
shall be substantially equivalent to the Target Pool Percentage established by the Committee.

     The Committee shall determine or approve the amount of the Incentive Award for each
Participant above such job grade level as the Committee shall from time to time select and, with
respect to all other Participants, the Committee shall approve the Incentive Awards based on the
methodology utilized by management consistent with the Committee’s overall discretion.

     It may be determined that a Participant shall receive no Incentive Award for the Plan Year.
In addition, the Plan does not restrict the maximum amount of an Incentive Award that may be paid
to an individual Participant.

     5. Active Employment Requirement. Ordinarily, Incentive Awards shall be made only to
Participants who are actively employed at the end of the Plan Year; however, Participants who
retire at age 65 or over or become disabled during a Plan Year, or the Beneficiary(s) or estate of
a Participant whose death occurs during a Plan Year shall be entitled to, on a pro rata basis (for
the period of time the Participant was in the Plan for the Plan Year) the lesser of (i) the
Participant’s target incentive or (ii) the Participant’s target incentive times the Target Pool
Percentage if the Committee determines a Target Pool Percentage of less than 100%. Except as
provided in Section 5 hereof, no other Participant who is not actively employed at the end of the
Plan Year shall receive an Incentive Award unless the Committee, in its sole discretion, so
determines that an Incentive Award shall be made.

     6. Effect of Change of Control. Upon the occurrence of a Non-Initiated Change of
Control during the Plan Year, this Plan shall terminate and each Participant immediately prior to
the occurrence of such Non-Initiated Change of Control shall promptly receive 300% of such
Participant’s target incentive payable under the Plan for the full Plan Year. In the event of the
occurrence of an Initiated Change of Control during the Plan Year, the Committee, in its sole
discretion, shall determine whether the Plan should terminate and the manner of calculating,
and the time for payment, of Incentive Awards (if any) to be made under the Plan for the Plan Year.

9

 

     7. Payment of Incentive Award. Except as provided in the first sentence of Section 6
hereof, Incentive Awards shall be paid on or about the March 15 of the year following the
applicable performance Plan Year. Notwithstanding any other provision of the Plan, the Committee,
in its sole discretion, shall have the authority to authorize payment of all or a portion of all
Incentive Awards prior to the end of the performance Plan Year, and if a portion, the Corporation
shall pay the remaining portion of the Award as provided for in this Section 7.

     Notwithstanding any other provision of the Plan, the Committee, in its sole discretion, shall
have the authority to require the deferral of payment of all or a portion of all Incentive Awards
due to any Plan Participant if the Committee determines that the Corporation would be denied a
deduction for federal income tax purposes for such Award or the portion thereof by reason of
Section 162(m) of the Internal Revenue Code of 1986, as amended, and the regulations issued
thereunder, if the Award or the portion thereof were not so deferred. Such deferred Incentive
Awards, or the portion thereof, shall be deferred in accordance with the provisions of the KeyCorp
Deferred Savings Plan.

ARTICLE
III

1. Allocation of Restricted Shares Any Incentive Award payable to a Participant in excess
of $100,000 will have a percentage of the Award in excess of $100,000 paid to the Participant in
KeyCorp time-lapsed restricted common shares or restricted units, under the following allocation
structure:

	 	•	 	Twenty percent (20%) of the Participant’s Award amount between $100,000 up to and
including $500,000 will be paid to the Participant in restricted shares/units.

10

 

	 	•	 	Twenty five percent (25%) of the Participant’s Award amount between $500,000 up to and
including $1,000,000 will be paid to the Participant in restricted shares/units.
	 
	 	•	 	Thirty percent (30%) of the Participant’s Award amount greater than $1,000,000 will be
paid to the Participant in restricted shares/units.

All restricted shares/units awarded to the Participant in accordance with provisions of this
Section 6 will be subject to a three-year graded vesting period, which will commence as of the
date of the restricted stock/units grant. The vesting period will be measured based on consecutive
full calendar months. In the event of the Participant’s death or disability, or in the event the
Participant is terminated under limited circumstances, the Participant’s restricted shares/units
shall vest in accordance with the provisions of the applicable Grant Agreement.

All restricted shares and units shall be granted under the KeyCorp 2004 Equity Compensation Plan,
and the terms and conditions of each individual Grant Agreement shall control the disposition and
payment of all vested restricted shares/units, including all restrictions mandated under Section
409A of the Code.

ARTICLE
IV

ADMINISTRATION

     The Corporation shall be responsible for the general administration of the Plan and for
carrying out the provisions hereof. The Committee shall have all such powers as may be necessary
to carry out its duties under the Plan, including the power to determine all questions pertaining
to claims for benefits and procedures for claim review, and the power to resolve all other
questions arising under the Plan, including any questions of construction. The Corporation and the
Committee may take such further action as the Corporation and the Committee shall deem advisable in
the administration of the Plan. The actions taken and the decisions made by the Corporation and
the Committee hereunder shall be final and binding upon all interested parties. In accordance with
the provisions of Section 503 of the Employee

11

 

Retirement Income Security Act of 1974, as amended, the Committee shall provide a procedure for
handling claims of Participants or their Beneficiaries under this Plan. Such procedure shall be in
accordance with regulations issued by the Secretary of Labor and shall provide adequate written
notice within a reasonable period of time with respect to the denial of any such claims as well as
a reasonable opportunity for a full and fair review by the Committee of any such denial.
Notwithstanding anything to the contrary contained herein, the Corporation shall be the
“administrator” for the purpose of the Employment Retirement Income Security Act of 1974, as
amended. Any action authorized under the Plan to be done by the Committee may be done by the Board
of Directors or any other Board committee authorized by the Board of Directors.

ARTICLE
V

AMENDMENT
AND TERMINATION

     The Corporation reserves the right to amend or terminate the Plan at any time by action of the
Board of Directors or the Committee, but, from and after the occurrence of a Non-Initiated Change
of Control, no such amendment or termination shall adversely affect the rights of a Participant
which have accrued prior to such amendment or termination except with the written consent of such
Participant.

ARTICLE
VI

MISCELLANEOUS

     1. Not An Employment Agreement. Nothing herein contained shall be construed as a
commitment to or agreement with any person employed by the Corporation or a Subsidiary to continue
such person’s employment with the Corporation or Subsidiary, and nothing herein contained shall be
construed as a commitment or agreement on the part of the Corporation or any Subsidiary to continue
the employment or the annual rate of compensation of any such person for any period. All
Participants shall remain subject to discharge to the same extent as if the Plan had never been put
into effect.

12

 

     2. Unfunded for Tax and ERISA Purposes. 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.

     3. Claims of Other Persons. The provisions of the Plan shall in no event be construed
as giving any person, firm, or corporation any legal or equitable right against the Corporation or
any Subsidiary, their officers, employees, agents, or directors, except any such rights as are
specifically provided for in the Plan or are hereafter created in accordance with the terms and
provisions of the Plan.

     4. Absence of Liability. No member of the Board of Directors of the Corporation or a
Subsidiary or any officer or employee of the Corporation or a Subsidiary shall be liable for any
act or action hereunder, whether of commission or omission.

     5. Severability. The invalidity or unenforceability of any particular provisions of
the Plan shall not affect any other provision hereof, and the Plan shall be construed in all
respects as if such invalid or unenforceable provision were omitted herefrom.

     6. Governing Law. The provisions of the Plan shall be governed and construed in
accordance with the laws of the State of Ohio.

	 	 	 	 	 
	 	KEYCORP

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

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