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Exhibit 10.2
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STOCK YARDS
BANK & TRUST COMPANY
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EXECUTIVE
NONQUALIFIED
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DEFERRED
COMPENSATION PLAN
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(as Amended
and Restated in 2006)
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Section
1--Purpose
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Stock Yards Bank and Trust
Company (the "Employer") adopts the Plan set forth herein as a 2006
amendment and restatement of a plan previously in effect on an
Adoption Agreement and related "Executive Nonqualified Excess
Benefit Plan Document" dated March 1, 2004 (the "2004 Plan"), to
provide a means by which certain management Employees of the
Employer may elect to defer receipt of current compensation and, in
select cases, receive Employer Credits, in order to provide
retirement and other benefits on behalf of such Employees.
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The Plan is intended to be a
nonqualified deferred compensation plan that complies with the
provisions of Section 409A of the Internal Revenue Code (the
"Code"). The Plan is intended to be an unfunded plan maintained
primarily for the purpose of providing deferred compensation
benefits for a select group of management or highly compensated
employees under Sections 201(2), 301(a)(3) and 401(a)(1) of the
Employee Retirement Income Security Act of 1974.
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In light of proposed
regulations and other guidance recently issued by the Internal
Revenue Service under Code Section 409A, the Company now desires to
amend and restate the Plan in its entirety, to bring the Plan into
compliance with such guidance and to make minor clarifying changes,
effective as of January 1, 2005 except as otherwise provided
herein. Any individual who was a Participant with an Account in the
2004 Plan immediately prior to the effective date of this
restatement shall continue to be a Participant in the Plan on and
after such effective date.
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Account balances accumulated
prior to December 31, 2004, along with all interest credited
thereto, were separately accounted for under this Plan. Effective
upon the adoption of this 2006 Amended and Restated Plan, the
provisions set forth herein shall control all Account balances
regardless of when such funds were accumulated.
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Section
2--Definitions
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As used in the Plan,
including this Section 2, references to one gender shall include
the other and, unless otherwise indicated by the context:
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2.1
"Active Participant"
means a Participant in the Plan, other than a Participant who has
had a Termination of Employment, or a Participant whom the
Committee has determined is no longer be eligible for the Plan.
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2.2
"Annual Enrollment
Period" shall mean the period during which an Employee selected
for participation in this Plan in accordance with Section 4 must
enroll to make Deferrals which, with respect to any Plan Year,
shall be the period prior to the first day of the Plan Year, or, in
the case of those who are made eligible after the first day of a
Plan Year, and their eligibility in this Plan is the first such
eligibility for any defined contribution-type nonqualified deferred
compensation program of the Employer, the period ending 30 days
after that notification.
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2.3
"Beneficiary" means the
person, persons, entity or entities designated or determined
pursuant to the provisions of Section 13 of the Plan.
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2.4
"Board" means the Board
of Directors of Stock Yards Bank and Trust Company.
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2.5
"Code" means the
Internal Revenue Code of 1986, as amended.
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2.6
"Committee" means a
committee appointed by the Board to serve hereunder or, if not
specifically appointed, the Executive Compensation Committee of the
Board of the Employer.
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2.7
"Crediting Date" means
the date for crediting the amount of any Participant Deferral
Credits or Employer Credits to the Account of a Participant. Any
such amounts may be credited to the Account of a Participant on any
day that securities are traded on a national securities
exchange.
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2.8
"Deferral Credits"
means the amounts credited as soon as practicable after each
payroll date to the Participant's Account by the Employer pursuant
to the provisions of Section 4.1 based on a Participant's Election
Form.
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2.9
"Deferred Compensation
Account" or simply "Account" means the total account
maintained with respect to each Participant under the Plan,
including any amounts designated as an In-Service Account. The
Account shall be credited with Participant Deferral Credits and
Employer Credits, which shall each be reflected in separate
subaccounts on Plan reports, and credited or debited for deemed
investment gains or losses, and adjusted for payments in accordance
with the rules and elections in effect under Section 8.
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2.10
"Effective Date" shall
be March 1, 2001, the date the Plan was first effective. This
amendment and restatement of the Plan shall be effective January 1,
2005, except as otherwise provided herein.
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2.11
"Election Form" shall
mean the form or electronic enrollment process established from
time to time by the Committee that a Participant uses to make a
Deferral election under the Plan, and to designate when first
eligible hereunder (or, pursuant to a 2006 transition rule set
forth in Section 6.4) a payment form election as among the options
available for Account payments occurring after Retirement or death,
or to designate in advance of any Plan Year that some or all of the
Deferral Credits for that Plan Year should be allocated to an
In-Service Account.
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2.12
"Employee" means an
individual in the Service of the Employer if the relationship
between the individual and the Employer is the legal relationship
of employer and employee and if the individual is a member of a
select group of highly compensated or key management employees of
the Employer.
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2.13
"Employer" means Stock
Yards Bank and Trust Company, and any Employer that is a member of
controlled group of business or businesses under common control
(within the meaning of Section 414(c) of the Code) with Stock Yards
Bank and Trust Company, which adopts this Plan for the benefit of
its employees. In such event, Stock Yards Bank and Trust Company
shall be the only entity authorized or required to amend the Plan
or administer it, and the other adopting employers shall be
responsible solely for payments to its employees who participate
hereunder.
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2.14
"Employer Credits"
means the amounts credited to the Participant's Deferred
Compensation Account by the Employer pursuant to the provisions of
Section 4.2.
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2.15
"ERISA" means the
Employee Retirement Income Security Act of 1974, as amended.
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2.16
"In-Service Account"
means a separate sub-account of the Deferred Compensation Account
to be kept for each Participant who has elected to designate all or
a portion of one or more Plan Years' Deferral Credits to be
withdrawn at a specified date as described in Section 5.3. The
In-Service Account shall be adjusted in the same manner and at the
same time as the Deferred Compensation Account under Section 8 and
in accordance with the rules and elections in effect under Section
8.
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2.17
"Participant" means an
Employee who has been designated by the Committee as a Participant
and who has entered the Plan or who has an Account under the
Plan.
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2.18
"Plan" means The Stock
Yards Executive Deferred Compensation Plan, as herein set out or as
duly amended hereafter.
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2.19
"Plan Year" means the
twelve-month period ending on the last day of December.
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2.20
"Retirement" shall
mean, effective for any payment of benefits to be made after
calendar year 2006, a Participant's Termination of Employment
occurring on or after the Participant attains age 55 for any reason
other than death.
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2.21
"Retirement Account"
means the portion of the Deferred Compensation Account of a
Participant other than an In-Service Account. The Retirement
Account shall be adjusted from time to time in accordance with
Section 8.
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2.22
"Specified Employee"
means, effective April 1 of each year, any Employee who meets the
ownership, officer and compensation thresholds of Section
416(i)(1)(A)(i), (ii) or (iii) of the Code (applied in accordance
with the regulations thereunder and without regard to Section
416(i)(5) of the Code) with respect to the Employer at any time
during the twelve month period ending on December 31 of each year
(the "identification date"). If the Employee meets these thresholds
as of any identification date, the person is treated as a Specified
Employee for the twelve-month period beginning on April 1 following
the identification date. If the definition of Specified Employee is
changed in Proposed Treasury Regulation 1-409A-1(i) or any
successor guidance thereto, that changed definition shall control
hereunder.
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2.22
"Spouse" means, except
as otherwise provided in the Plan, a person who is the legally
married spouse of a Participant. " Surviving Spouse " means
the person to whom a Participant was legally married at the
Participant's death and who survives the Participant.
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2.23
"Trust" means the trust
fund established pursuant to Section 10.2, if adopted by the
Employer.
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2.24
"Trustee" means the
trustee, if any, named in the agreement establishing the Trust and
such successor or additional trustee as may be named pursuant to
the terms of the agreement establishing the Trust.
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2.25
"Termination of
Employment" shall mean the voluntary or involuntary severance
from employment with the Employer and each trade or business
(whether or not incorporated) that is required to be aggregated
with the Employer under rules similar to subsections (b) and (c) of
Section 414 of the Code, for any reason other than death. The
Committee shall determine, consistent with Code Section 409A and
guidance issued thereunder, whether a change in status to a
part-time employee providing minimal services or to a consultant
still providing substantial services shall be considered a
Termination of Employment, and whether and when a sick leave,
authorized leave of absence or other absence for military or
government service constitutes a Termination of Employment for
purposes of this Plan (generally not before at least six months
have elapsed).
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2.26
"Unforeseeable
Emergency" means a severe financial hardship to the Participant
arising as a result of events beyond the control of the Participant
and resulting from (i) a sudden or unexpected illness or accident
of the Participant, the Participant's Spouse or dependent (as
defined in Section 152(a) of the Code), (ii) loss of the
Participant's property due to casualty, or (iii) other similar
extraordinary and unforeseeable circumstances, all as determined in
the sole discretion of the Committee in accordance with the
Code.
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Section
3--Participation
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The Committee in its
discretion shall designate each Employee who is eligible to
participate in the Plan, and may designate that any such Employee
ceases being eligible and is no longer an Active Participant at any
time, effective as of the beginning of the next Plan Year after
notification thereof. An Employee designated by the Committee as a
Participant shall become a Participant as of any future date
determined by the Committee. A Participant who incurs a Termination
of Employment and who later returns to work for the Employer will
not be an Active Participant unless and until the Committee so
determines, whether or not the Participant has an Account remaining
under the Plan on the date of the return to employment.
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Section
4--Credits to Deferred Compensation Account
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4.1
Deferral Credits. Each
Active Participant may elect, by delivering an Election Form during
the Annual Enrollment Period, to defer the receipt of his base
salary at each regular payroll period by a dollar amount or any
whole percentage of up to 10%, and, beginning for 2007, to defer
the receipt of a dollar amount or any whole percentage of up to 50%
of any annual incentive bonus payable with respect to 2007 or later
service. The amount of the Participant Deferral shall be credited
by the Employer to the Deferred Compensation Account (or, if so
designated on the Election Form, In-Service Account) maintained for
the Participant pursuant to Section 5.3. The following special
provisions shall apply with respect to the Deferral Credits of a
Participant:
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4.1.1 The Participant's
Election Form shall become effective with respect to such
Participant as of the first day of January following the date such
form is received by the Committee (or, with respect to a
Participant made eligible mid-Plan Year, at the first payroll
period beginning after the Annual Enrollment Period has expired),
and shall be irrevocable as of the end of the Annual Enrollment
Period. The election of a Participant shall continue in effect for
subsequent years until modified by the Participant as permitted in
this Section 4.1, or until the earlier of the date the Participant
incures a Termination of Employment or the first day of the Plan
Year after the Participant ceases to be an Active Participant under
the Plan.
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4.1.2 The Committee may
permit a separate election to be applied to the any annual
incentive bonus, provided that such election must be made prior to
the first day of the Plan Year during which the related services
are performed, even if the annual incentive bonus for that Plan
Year might not otherwise be paid until the Plan Year following the
year in which services are performed.
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4.1.3 With respect to a
Participant made eligible for the Plan mid-Plan Year, any Election
Form shall apply solely to base salary not yet earned, and the
percentage deferral of any annual incentive bonus shall be applied
to only a portion of that bonus equal to the fraction, the
numerator of which is the number of days the Participant was
eligible for the Plan, and the denominator of which is the total
number of days in the performance period applicable to that annual
incentive.
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4.1.4 Base salary payable
after the last day of the Plan Year solely for services provided
during the final payroll period containing December 31, is treated
for purposes of this Section 4.1 as base salary for services
performed in the subsequent taxable year, and the subsequent Plan
Year's Election Form, if any, shall be applied thereto
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4.2
Employer Credits. The
Employer shall credit to the Account of each Participant selected
by the Committee to receive Employer contributions, an Employer
Credit in an amount, at the time and subject to the vesting
schedule set forth on a separate Employer Contribution Agreement
with respect to that Participant. Employer Credits need not be, and
generally will not be, granted to all Participants.
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4.3
FICA and Other Employment
Taxes . For each Plan Year in which a Deferral is being
withheld or an Employer Credit is made or vested, the Employer
shall withhold the Participant's share of FICA and other employment
taxes related to the Deferral or Employer Credit, from that portion
of the Participant's base salary or bonus that is not deferred and
is actually paid to the Participant. If necessary because of other
payroll deductions which shall take precedence, the Employer shall
reduce the Participant's Deferral or Employer Credit in order to
comply with this Section 4.3.
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Section
5--Distribution Events and Forms
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5.1
Termination of Employment;
Retirement. If the Participant terminates employment with the
Employer, the vested balance in the Account shall be paid to the
Participant by the Employer in a lump sum, within 60 days following
the Termination of Employment, or, if and only if the Termination
of Employment is a Retirement, in a lump sum or in annual
installments over no more than 10 years, as elected by the
Participant at the later of (i) entry into this Plan, or (ii)
before December 31, 2006, in accordance with Section 6.4.
Notwithstanding the foregoing, no distribution shall be made
earlier than six months after the Termination of Employment (even
if on account of Retirement) with respect to a Participant who is a
Specified Employee. Any payments to which a Specified Employee
would be entitled during the first six months following Termination
of Employment shall be accumulated and paid on the first day of the
seventh month following the date of Termination of Employment.
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5.2
Death. If the
Participant dies before incurring a Termination of Employment, the
Employer shall pay a benefit to the Participant's Beneficiary in
either a lump sum with 60 days following that event, or in annual
installments over no more than 10 years, as elected by the
Participant at the later of (i) entry into this Plan, or (ii)
before December 31, 2006, in accordance with Section 6.4 hereof. If
a Participant dies following his Termination of Employment, and
before all payments under the Plan have been made, the vested
balance remaining in the Account shall continue to be paid by the
Employer to the Participant's Beneficiary in the same time and
manner in effect prior to his death.
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5.3
In-Service
Distributions. A Participant may designate in the Election Form
during any Annual Enrollment Period to have a specified amount or
percentage of the Participant's future Deferral Credit added to an
In-Service Account for in-service distribution. The time and manner
of the in-service distribution shall be specified by the
Participant in the Election Form, as between a lump sum at a
designated date or in annual installments over not more than 6
years beginning at a designated date, provided that, the date so
designated is no less than 3 years later than the Deferral Plan
Year. Notwithstanding the foregoing, if a Participant incurs a
Termination of Employment or dies prior to the date on which the
entire balance in the In-Service Account has been distributed, then
the balance in the In-Service Account shall be distributed to the
Participant in the same manner and at the same time as the
remaining balance in the Account is distributed under Section 5.1
or 5.2.
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5.4
Unforeseeable
Emergency.
If a Participant experiences an Unforeseeable Financial Emergency,
the Participant may petition the Committee to receive a partial or
full distribution of the Participant's Account from the Plan. The
petition shall be accompanied by such documentation in support of
the existence of an Unforeseeable Financial Emergency as the
Committee shall require. The distribution shall not exceed the
lesser of (i) the Participant's vested Account; and (ii) the amount
necessary to satisfy the Unforeseeable Financial Emergency, plus
any amount necessary to pay taxes reasonably anticipated as a
result of the distribution, after taking into account the extent to
which the hardship resulting from the Unforeseeable Financial
Emergency is or may be relieved through reimbursement or
compensation by insurance or otherwise by liquidation of the
Participant's assets (to the extent the liquidation of such assets
would not itself cause severe financial hardship). If the Committee
in its sole discretion and in accordance with the Code approves the
petition for a distribution, the distribution shall be made within
60 days after the date of approval. A distribution due to
Unforeseeable Emergency shall not affect any Deferral election
previously made by the Participant. If a Participant's Termination
of Employment occurs after a request is approved in accordance with
this Section 5.4, but prior to distribution of the full amount
approved, the approval of the request shall be automatically null
and void and the benefits which the Participant is entitled to
receive under the Plan shall be distributed in accordance with
Section 5.1 or 5.2.
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Section
6--Election of Payment Options
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6.1
Making Payment
Elections. In the Participant's first Election Form (or, if
later, in a special payment form election in 2006 in accordance
with Section 6.4), the Participant shall elect the method under
which the vested balance in the Account will be made in the events
of death or Retirement. Absent a timely election, all payments
hereunder will be in a lump sum, within 60 days after the payment
triggering event.
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6.2
Payment Dates. A
payment shall be treated as made on the date specified for purposes
of Section 409A of the Code, if it is made on such date or a later
date within the same calendar year or, if later, by the 15th day of
the third calendar month following the date specified.
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6.3
Installments; Minimum
Payments. If the Participant elects an installment payment
option, the payment of each annual installment shall be made on the
anniversary of the date of the first installment payment, and the
amount of the annual installment shall be adjusted on such
anniversary for credits or debits to the Participant's Account.
Such adjustment shall be made by dividing the balance in the
Account on such date by the number of annual installments remaining
to be paid hereunder; provided that the last annual installment due
under the Plan shall be the entire amount credited to the
Participant's Account on the date of payment. Notwithstanding any
such election (other than with respect to an In-Service Account
paid prior to Termination of Employment), if under the
Participant's selected installment option annual payments would be
less than $2,500 each, the Participant will receive annual
installments equal to the greater of $2,500 and the remainder of
his Account. Provided further, however, that a Participant with an
Account of $10,000 or less at a Retirement or death that occurs on
or after January 1, 2007, will be paid his benefit in a single lump
sum regardless of any previous written election.
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6.4
Special 2006 Payment Form
Election . Notwithstanding any provision of the Plan to the
contrary, any Participant who has an Account in the Plan when this
2006 Amended and Restated Plan is adopted, and who does not
otherwise become entitled to a payment under this Plan during 2006
(without regard to the special election in this Section), shall
have an opportunity to make a new election to receive any benefits
to which the Participant may become entitled in 2007 and thereafter
in any of the payment forms described in Section 5. Such election
must be made, in the form prescribed by the Committee, on or before
December 31, 2006 and shall apply to the Participant's entire
Account under the Plan, including any amounts accrued under the
2004 Plan. No election made under this Section 6.4 shall be given
if effect if the Participant is entitled to any benefit payments on
or before December 31, 2006, but any such election otherwise shall
be considered irrevocable as of December 31, 2006. To the extent
that any existing Participant fails to elect a payment form in
accordance with the special election provisions of this 2006
Amended and Restated Plan on or before December 31, 2006, the
benefits paid thereafter shall be paid only after Termination of
Employment, and then in a single lump sum.
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6.5
Payments in 2005 and 2006.
Any Participant who becomes entitled to a payment of benefits in
2005 or 2006 under the terms of the Plan as in effect prior to this
2006 Amended and Restated Plan's adoption, shall have the timing
and form of such distribution governed by the terms of the 2004
Plan without regard to or exercise of any discretion therein to
change such timing or form from that elected in 2004 (or upon entry
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