EXHIBIT 10.3
REPUBLIC
BANCORP, INC
REPUBLIC
BANK & TRUST COMPANY
AMENDED AND RESTATED
OFFICER COMPENSATION
CONTINUATION
AGREEMENT
This is an Amended and
Restated Agreement, originally dated as of the 12 th day
of January, 1995 is made by and between Republic
Bancorp, Inc., a Kentucky corporation (the
“Company”), and Scott Trager (the
“Executive”), who is presently President, Louisville
Region, of Republic Bank & Trust Company (the
“Bank”) (the “Agreement”), in consideration
of the mutual covenants herein contained and in further
consideration of services performed and to be performed by the
Executive for the Company and/or its subsidiaries. As of the
date of this Agreement, Bank is a wholly-owned subsidiary of the
Company. This Agreement, as so amended and restated shall
supersede the prior agreements and all amendments thereto,
effective as of the date of its adoption. The Bank joins in
this Agreement to further accomplish the terms and objectives of
this Agreement.
Recitals
A.
The Company considers the
establishment and maintenance of sound and vital management of the
Company and its subsidiaries to be essential to protecting and
enhancing the best interests of the Company and its
shareholders.
B.
The Company recognizes that,
while not anticipated, the possibility of a change of control may
exist. Such possibility, and the uncertainty and questions
which it may raise among management of the Company and its
subsidiaries may result in the departure or distraction of key
members of management to the detriment of the Company’s
shareholders.
C.
The Company’s Board of
Directors has determined that appropriate steps should be taken to
encourage key members of management of the Company and its
subsidiaries, such as the Executive, to remain in the employ of the
Company and/or its subsidiaries and perform their assigned duties
without distraction in the face of potentially disturbing
circumstances arising from the possibility of a change of control
of the Company.
NOW, THEREFORE, in
consideration of the foregoing and of the covenants herein
contained, the parties hereto agree as follows:
Section 1 —
Definitions
For purposes of this
Agreement, the following words and terms shall have the following
meanings:
1.1
Termination by the Bank of the
Executive’s employment for “Cause” shall
mean termination upon (A) the willful and continued failure by
the Executive substantially to perform the Executive’s duties
with the Bank (other than any such failure resulting from
Disability or temporary incapacity due to physical or mental
illness), after a written demand for substantial performance is
delivered to the Executive by the Board of Directors of the Bank
(the “Bank Board”), which demand specifically
identifies the manner in which the Bank Board believes that the
Executive has not substantially performed his duties; or
(B) the willful engaging by the Executive in gross misconduct
materially and demonstrably injurious to the Bank or the
Company. For purposes of this definition, no act, or failure
to act, on the Executive’s part shall be considered
“willful” unless done, or omitted to be done, by the
Executive not in good faith and without reasonable belief that the
Executive’s action or omission was in the best interests of
the Bank or the Company.
1.2
A “Change in
Control” of the Company shall mean (i) an event or
series of events which have the effect of any
“person” as such term is used in
Section 13(d) and 14(d) of the Exchange Act,
becoming the “beneficial owner” as defined in
Rule 13d-3 under the Exchange Act, directly or indirectly, of
securities of the Company or the Bank representing a greater
percentage of the combined voting power of the Company’s or
Bank’s then outstanding stock, than the Trager Family Members
as a group; (ii) an event or series of events which have the
effect of decreasing the Trager Family Members’ percentage
ownership of the combined voting power of the Company’s or
Bank’s then outstanding stock to less than 25%;
(iii) any person (including the Company or the Bank) publicly
announces an intention to take or to consider taking actions which
have consummated would constitute a Change in Control, or
(iv) the Company Board adopts a resolution to the effect that
a Potential Change in Control for purposes of this Plan has
occurred. For purposes of this paragraph, “Trager
Family Member” shall mean Bernard M. Trager, Jean S.
Trager and any of their lineal descendants, and any corporation,
partnership, limited liability company or trust the majority owners
or beneficiaries of which are directly or indirectly through
another entity Bernard M. Trager, Jean S. Trager, or one or
more of their lineal descendants.
1.3
“Compensation”
shall mean the
Executive’s annual base salary at the greater of (A) the
highest rate in effect at any time during the twelve months
immediately preceding the applicable Date of Termination, or
(B) the rate in effect immediately prior to the applicable
Change in Control.
1.4
“Contract
Period” shall
mean the period defined in Section 2 hereof.
1.5
“Date of
Termination” shall mean (A) if the
Executive’s employment is terminated for Good Reason, as
defined below, the date specified in the Notice of Termination, as
defined in this Section 1.8 below; and (B) if the
Executive’s employment is terminated for any other reason,
the date on which a Notice of Termination is given; provided
that , if within 30 days after any Notice of Termination is
given, the party receiving such Notice of Termination notifies the
other party that a dispute exists concerning the termination, the
Date of Termination shall be the date on which the dispute is
finally determined, either by mutual written agreement of the
parties, by a binding and final arbitration award or by a final
judgment, order or decree of a court of competent jurisdiction (the
time for appeal therefrom having expired and no appeal having been
perfected).
1.6
“Disability”
shall mean a physical or
mental incapacity of the Executive which entitles the Executive to
benefits under any long-term disability plan or wage continuation
plan applicable to him and maintained by the Company as in effect
immediately prior to the applicable Change in Control.
1.7
“Good
Reason” shall
mean:
(a)
Without the Executive’s
express written consent, the assignment to Executive of any duties
inconsistent with, or the reduction of powers or functions
associated with, his positions, duties, responsibilities and status
with the Company immediately prior to a Change in Control, or any
removal of Executive from, or any failure to reelect Executive to,
any positions or offices Executive held immediately prior to a
Potential Change in Control, except in connection with the
termination of Executive’s employment at death, for Cause or
on account of Retirement or Disability pursuant to the requirements
of this Agreement;
(b)
(i) the failure by
the Company to continue in effect any employee welfare or pension
benefit plans within the meaning of Sections 3(1) and
3(2) of the Employee Retirement Income Security Act of 1974
(the “Plans”), in which Executive was participating
immediately prior to a Potential Change in Control (or substitute
plans, programs or arrangements providing Executive with
substantially similar benefits),
(ii) the taking of
any action, or the failure to take any action, by the Company which
could (A) adversely affect Executive’s participation in,
or materially reduce Executive’s benefits under, any of the
Plans, (B) materially adversely affect the basis for computing
benefits under any of the Plans, or (C) deprive Executive of
any material fringe benefit enjoyed by Executive immediately prior
to a Potential Change in Control, or
(iii) the failure by
the Company to provide Executive with the number of paid vacation
days to which Executive was entitled immediately prior to a
Potential Change in Control in accordance with the Company’s
vacation policy applicable to Executive then in effect;
except, in each case, in
connection with the termination of Executive’s employment at
death, for Cause or on account of Retirement or Disability pursuant
to the requirements of this Agreement;
(c)
the failure by the Company to
obtain an assumption of the obligations of the Company under this
Agreement by any successor to the Company;
(d)
a reduction by the Bank in the
Executive’s base salary as in effect on the date hereof or as
the same may be increased from time to time, except as part of an
across-the-board reduction of base salaries applicable to all
salaried employees of the Bank, provided the reduction (or series
of reductions) does not exceed 5% of the Executive’s base
salary prior to such change;
(e)
the relocation of the
Bank’s principal executive offices to a location outside the
metropolitan Louisville area; or the Company’s requiring the
Executive to be based anywhere other than in the metropolitan
Louisville area, except for required travel on the Bank’s
business to an extent substantially consistent with similarly
situated executives’ business travel obligations;
(f)
any purported termination of
the Executive’s employment during the contract period which
is not effected pursuant to a Notice of Termination satisfying the
requirements of Section 3 below; and for purposes of this
Agreement, no such purported termination shall be
effective.
1.8
A “Notice of
Termination” shall mean a notice, from the Bank or from
the Executive, which shall indicate the specific termination
provision in this Agreement relied upon and shall set forth in
reasonable detail the facts and circumstances claimed to provide a
basis for termination of the Executive’s employment under the
provision so indicated.
1.9
“ Plans ”
shall have the meaning given in Section 1.7(b).
1.10
Any reference to
“Subsidiaries” of the Company shall include
those subsidiaries owned by the Company directly or owned by the
Company indirectly through another company which is wholly-owned by
the Company.
Section 2 —
Application of Agreement
This Agreement shall
apply only to termination of employment of the Executive during a
period (the “Contract Period”) commencing on the date
immediately preceding the date of a Change in Control and
terminating on the second anniversary of the date of that Change in
Control; provided, however, that each such Change in Control occurs
during the period commencing as of January 1, 1995 and
terminating at midnight on December 31, 1998 or as further
extended pursuant to the following sentence. At midnight on
December 31, 1998, and on each annual anniversary of that time
and date thereafter, such latter period shall be automatically
extended for two additional years, unless on or before such
anniversary the Company notifies the Executive in writing that it
elects not to extend such period. There is one Contract
Period for each Change in Control and there may be multiple
Change(s) in Control. With respect to a termination
pursuant to Section 3.2 only, the Contract Period shall also
include the period from and after a Potential Change in
Control. If a Potential Change in Control occurs but a Change
in Control does not follow within one year of the Potential Change
in Control, the Contract Period shall expire on the one year
anniversary of the Potential Change in Control.
Section 3 —
Termination
3.1
Procedure for Termination
. Any termination by the Bank or by the
Executive, pursuant to this Agreement, shall be communicated by
Notice of Termination to the other parties hereto. The
Executive shall not be deemed to have been terminated for Cause
unless and until
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