Kentucky Bancshares, Inc. 2009 Stock Award Plan

Exhibit 10.1
Kentucky Bancshares, Inc.
2009 Stock Award Plan

SECTION 1
Purpose

The purpose of the Kentucky Bancshares, Inc. 2009 Stock Award Plan (the
"Plan") is to motivate and reward key employees, directors, advisory
directors, consultants and advisers by giving them a proprietary interest in
the Company's success.
SECTION 2
Definitions

As used in the Plan, the following terms shall have the meanings set
forth below:
"Award" shall mean any Option, Stock Appreciation Right, Restricted
Stock or Other Stock-Based Award.
 
"Award Agreement" shall mean any written or electronic notice of grant,
agreement, contract or other instrument or document evidencing any Award,
which may, but need not, be required to be executed, acknowledged or accepted
by a Participant.
 
"Board" shall mean the Board of Directors of the Company.
 
"Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time.
 
"Committee" shall mean, until otherwise determined by the Board, the
Compensation Committee of the Board.
 
"Common Stock" shall mean shares of common stock, no par value per
share, of the Company.
 
"Company" shall mean Kentucky Bancshares, Inc.
 
"Designated Beneficiary" shall mean the beneficiary designated by the
Participant, in a manner determined by the Board or Committee, to receive the
benefits due the Participant under the Plan in the event of the Participant's
death. In the absence of an effective designation by the Participant,
Designated Beneficiary shall mean the Participant's estate.
 
"Eligible Individual" shall mean (i) any person providing services as
an officer and/or director or advisory director of the Company or a
Subsidiary, whether or not employed by such entity, (ii) any employee of the
Company or a Subsidiary, including any director who is also an employee of
the Company or a Subsidiary, (iii) any officer or employee of an entity with
which the Company has contracted to receive executive, management or legal
services who provides services to the Company or a Subsidiary through such
arrangement, (iv) any consultant or adviser to the Company, a Subsidiary or
to an entity described in clause (iii) hereof who provides services to the
Company or a Subsidiary through such arrangement and (v) any person who has
agreed in writing to become a person described in clauses (i), (ii), (iii) or
(iv) within not more than 30 days following the date of grant of such
person's first Award under the Plan.
 
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended from time to time.
 
"Incentive Stock Option" shall mean an option granted under Section 6
of the Plan that is intended to meet the requirements of Section 422 of the
Code or any successor provision thereto.
 
"Nonqualified Stock Option" shall mean an option granted under Section
6 of the Plan that is not intended to be an Incentive Stock Option.
 
 "Option" shall mean an Incentive Stock Option or a Nonqualified Stock
Option.
 
"Other Stock-Based Award" shall mean any right or award granted under
Section 9 of the Plan.
 
"Participant" shall mean any Eligible Individual granted an Award under
the Plan.
 
"Person" shall mean any individual, corporation, partnership, limited
liability company, association, joint-stock company, trust, unincorporated
organization, government or political subdivision thereof or other entity.
 
"Restricted Stock" shall mean any restricted stock granted under
Section 8 of the Plan.

"Section 162(m)" shall mean Section 162(m) of the Code and all
regulations promulgated thereunder as in effect from time to time.
 
"Shares" shall mean the shares of Common Stock and such other
securities of the Company or a Subsidiary as the Board or Committee may from
time to time designate.
 
"Stock Appreciation Right" shall mean any right granted under Section 7
of the Plan.
 
"Subsidiary" shall mean (i) any corporation or other entity in which
the Company possesses directly or indirectly equity interests representing at
least 50% of the total ordinary voting power or at least 50% of the total
value of all classes of equity interests of such corporation or other entity
and (ii) any other entity in which the Company has a direct or indirect
economic interest that is designated as a Subsidiary by the Board or the
Committee.
 
SECTION 3
Administration and Delegation

(a)   Administration.  The Board or Committee shall administer the
Plan. Subject to the terms of the Plan and applicable law, and in addition to
other express powers and authorizations conferred on the Board or Committee
by the Plan, the Board and the Committee shall each have full power and
authority to:
1.    designate Participants;
2.    determine the type or types of Awards to be granted to an
Eligible Individual;
3.    determine the number of Shares to be covered by, or with
respect to which payments, rights or other matters are to
be calculated in connection with, Awards;
4.    determine the terms and conditions of any Award;
5.    determine whether, to what extent, and under what
circumstances Awards may be settled or exercised in cash,
whole Shares, other whole securities, other Awards, other
property or other cash amounts payable by the Company upon
the exercise of that or other Awards, or canceled,
forfeited or suspended and the method or methods by which
Awards may be settled, exercised, canceled, forfeited or
suspended;
6.    determine whether, to what extent, and under what
circumstances cash, Shares, other securities, other Awards,
other property, and other amounts payable by the Company
with respect to an Award shall be deferred either
automatically or at the election of the holder thereof, the
Board or the Committee;
7.    interpret and administer the Plan and any instrument or
agreement relating to, or Award made under, the Plan;
8.    establish, amend, suspend or waive such rules and
regulations and appoint such agents as it shall deem
appropriate for the proper administration of the Plan; and
9.    make any other determination and take any other action
that the Board or Committee deems necessary or desirable
for the administration of the Plan.
Unless otherwise expressly provided in the Plan, all designations,
determinations, interpretations and other decisions under or with respect to
the Plan or any Award shall be within the sole discretion of the Committee. 
Such designations, determinations, interpretations and other decisions may be
made at any time and shall be final, conclusive and binding upon all Persons,
including the Company, any Subsidiary, any Participant, any holder or
beneficiary of any Award, any stockholder of the Company and any Eligible
Individual.
(b)   Delegation.  Subject to the terms of the Plan and applicable law,
the Board and the Committee may each delegate to one or more or their
members, or to one or more agents, such administrative duties as they may
deem advisable.  The Board or the Committee, or any person to whom either has
delegated duties as aforesaid, may employ one or more persons to render
advice with respect to any responsibility of the Board, the Committee, or
such person may have under the Plan.  The Board and the Committee may each
employ such legal or other counsel, consultants and agents as they may deem
desirable for the administration of the Plan and may rely upon any opinion or
computation received from any such counsel, consultant or agent.  Expenses
incurred by the Board and by the Committee in the engagement of such counsel,
consultant or agent shall be paid by the Company, or the subsidiary or
affiliate whose employees have benefitted from the Plan, as determined by the
Board or the Committee.
(c)   Board Action.  A majority of the whole Board shall constitute a
quorum, and the acts of a majority of the members of the Board present at a
meeting at which a quorum is present, or acts approved in writing by all of
the members of the Board, shall be the acts of the Board for purposes of any
action the Board takes permitted by this Plan.
SECTION 4
Eligibility

Any Eligible Individual shall be eligible to be granted an Award.
 
SECTION 5
Shares Available; Adjustment

(a)   Shares Available for Awards. Subject to adjustment as provided
in Section 5(b):
1.    Calculation of Number of Shares Available.
(i)   Subject to the other provisions of this Section 5(a),
the number of Shares with respect to which Awards
payable in Shares may be granted under the Plan shall
be 150,000 Awards that by their terms may be settled
only in cash shall not be counted against the maximum
number of Shares provided herein.
(ii)  The number of Shares that may be issued pursuant to
Incentive Stock Options may not exceed 100,000
Shares.
(iii) To the extent any Shares covered by an Award are not
issued because the Award is forfeited or canceled or
the Award is settled in cash, such Shares shall again
be available for grant pursuant to new Awards under
the Plan.
(iv)  In the event that Shares are issued as Restricted
Stock or Other Stock-Based Awards under the Plan and
thereafter are forfeited or reacquired by the Company
pursuant to rights reserved upon issuance thereof,
such Shares shall again be available for grant
pursuant to new Awards under the Plan.
(v)   If the exercise price of any Option is satisfied by
tendering Shares to the Company, only the number of
Shares issued net of the Shares tendered shall be
deemed issued for purposes of determining the maximum
number of Shares available for issuance under Section
5(a)(i)(A).  However, all of the Shares issued upon
exercise shall be deemed issued for purposes of
determining the maximum number of Shares that may be
issued pursuant to Incentive Stock Options.
2.    Shares Deliverable Under Awards.  Any Shares delivered
pursuant to an Award may consist of authorized and unissued
Shares, Shares held by the Company or a Subsidiary and
Shares acquired in the open market or otherwise obtained by
the Company or a Subsidiary. The issuance of Shares may be
effected on a non-certificated basis, to the extent not
prohibited by applicable law or the applicable rules of any
stock exchange.
3.    Individual Limit. Any provision of the Plan to the contrary
notwithstanding, no individual may receive in any year
Awards under the Plan, whether payable in cash or Shares,
that relate to more than 5000 Shares.
4.    Use of Shares.  Subject to the terms of the Plan and the
overall limitation on the number of Shares that may be
delivered under the Plan, the Board and the Committee may
each use available Shares as the form of payment for
compensation, grants or rights earned or due under any
other compensation plans or arrangements of the Company or
a Subsidiary and the plans or arrangements of the Company
or a Subsidiary assumed in business combinations.
(b)   Adjustments.  In the event that the Board or Committee
determines that any dividend or other distribution (whether in the form of
cash, Shares, Subsidiary securities, other securities or other property),
recapitalization, stock split, reverse stock split, reorganization, merger,
consolidation, split-up, spin-off, combination, repurchase or exchange of
Shares or other securities of the Company, issuance of warrants or other
rights to purchase Shares or other securities of the Company, or other
similar corporate transaction or event affects the Shares such that an
adjustment is determined by the Board or Committee to be appropriate to
prevent dilution or enlargement of the benefits or potential benefits
intended to be made available under the Plan, then the Board or Committee
shall, in such manner as it may deem equitable, adjust any or all of (i) the
number and type of Shares (or other securities or property) with respect to
which Awards may be granted, (ii) the number and type of Shares (or other
securities or property) subject to outstanding Awards, and (iii) the grant or
exercise price with respect to any Award and, if deemed appropriate, make
provision for a cash payment to the holder of an outstanding Award and, if
deemed appropriate, adjust outstanding Awards to provide the rights
contemplated by Section 10(b) hereof; provided, in each case, that with
respect to Awards of Incentive Stock Options no such adjustment shall be
authorized to the extent that such authority would cause the Plan to violate
Section 422(b)(1) of the Code or any successor provision thereto and, with
respect to all Awards under the Plan, no such adjustment shall be authorized
to the extent that such authority would be inconsistent with the requirements
for full deductibility under Section 162(m); and provided further that the
number of Shares subject to any Award denominated in Shares shall always be a
whole number.
SECTION 6
Stock Options

(a)   Stock Options. Subject to the provisions of the Plan, the Board
and the Committee shall each have the authority to determine the Eligible
Individuals to whom Options shall be granted, the number of Shares to be
covered by each Option, the option price thereof, the conditions and
limitations applicable to the exercise of the Option and the other terms
thereof. The Board and the Committee shall each have the authority to grant
Incentive Stock Options, Nonqualified Stock Options or both. In the case of
Incentive Stock Options, the terms and conditions of such grants shall be
subject to and comply with such rules as may be required by Section 422 of
the Code, as from time to time amended, and any implementing regulations;
provided, however, that if, on the date of the grant of Incentive Stock
Options, the Eligible Individual to whom such grant is to be made (together
with persons whose stock ownership is attributed to such individual pursuant
to Code Section 424(d)) owns securities possessing more than ten percent of
the total combined voting power of all classes of stock of the Company or any
of its subsidiaries, the exercise price will not be less than 110% of the
fair market value of the Shares to which the Inventive Stock Option relates
determined as of the date of the grant, and such Incentive Stock Options are
not exercisable after the date five years from the date of the grant. 
Notwithstanding the foregoing, no Eligible Individual may be granted
Incentive Stock Options which would result in Shares with an aggregate fair
market value (measured on the date of the grant) of more than $100,000 first
becoming exercisable in any one calendar year.
(b)   Exercise. Each Option shall be exercisable at such times and
subject to such terms and conditions as the Board or Committee may specify in
the applicable Award Agreement or thereafter, provided, however, that in no
event may any Option granted hereunder be exercisable after the expiration of
10 years after the date of such grant. The Board or the Committee may each
impose such conditions with respect to the exercise of Options, including
without limitation, any condition relating to the application of Federal or
state securities laws, as it may deem necessary or advisable. An Option may
be exercised, in whole or in part, by giving written notice to the Company,
specifying the number of Shares to be purchased. The exercise notice shall be
accompanied by the full purchase price for the Shares.
(c)   Payment. The Option price shall be payable in United States
dollars and may be paid by (i) cash or cash equivalent; (ii) delivery of
shares of Common Stock, which shares shall be valued for this purpose at the
fair market value (valued in accordance with procedures established by the
Board or the Committee) as of the effective date of such exercise and, unless
otherwise determined by the Board or the Committee, shall have been held by
the optionee for at least six months; or (iii) in such other manner as may be
authorized from time to time by the Board or the Committee. Prior to the
issuance of Shares upon the exercise of an Option, a Participant shall have
no rights as a shareholder.
SECTION 7
Stock Appreciation Rights

(a)   Stock Appreciation Rights. Subject to the provisions of the
Plan, the Board and the Committee shall each have authority to determine the
Eligible Individuals to whom Stock Appreciation Rights shall be granted, the
number of Shares to be covered by each Award of Stock Appreciation Rights,
the grant price thereof, the conditions and limitations applicable to the
exercise of the Stock Appreciation Right and the other terms thereof. Stock
Appreciation Rights may be granted in tandem with another Award, in addition
to another Award, or frees