EXHIBIT 10.2
REPUBLIC BANCORP, INC. AND
SUBSIDIARIES
NON-EMPLOYEE DIRECTOR AND KEY
EMPLOYEE
DEFERRED COMPENSATION
PLAN
(as adopted November 18, 2004
and then
amended and restated March 16, 2005)
1.
General . This Republic Bancorp, Inc. And
Subsidiaries Non-Employee Director and Key Employee Deferred
Compensation Plan (the “Plan”) is intended to more
closely align board and executive compensation at Republic Bancorp,
Inc. (the “Company”) and subsidiaries with the
interests of the Company’s shareholders, by making available
to eligible participants tax-deferred investments in Company
stock. It is intended that the Plan be in compliance with
Code Section 409A (“Section 409A”). It
is also intended that the Plan be an unfunded arrangement
maintained for non-employee directors and for a select group of
management or highly compensated employees. Effective upon
the time that a Key Employee Participant (as defined below) is
first named on Exhibit A attached hereto, the Plan shall be
considered a “top hat plan” for purposes of the
Employee Retirement Income Security Act of 1974, as amended.
Capitalized terms used herein and not defined where used shall have
the meanings set forth in Section 23.
2.
Eligibility
. Eligibility in the Plan
shall be granted to the members of the Board of Directors of the
Company or of its Subsidiaries who are not also employees of the
Company or of its Subsidiaries (the “Director
Participants”). In addition, eligibility in the Plan
may be granted to the employees of the Company or of its
Subsidiaries who have been designated by the Compensation Committee
of the Board of Directors of the Company or the Subsidiary (as the
case may be for a particular Participant) (the
“Committee”) as being eligible for the Plan (the
“Key Employee Participants” and, together with Director
Participants, the “Participants”). The initial
Key Employee Participants (if any) are listed in
Exhibit A attached hereto. The Committee shall
have full power and discretion to name additional employees of the
Company as Key Employee Participants and to remove such employees
as Key Employee Participants at such times as it shall decide in
its sole discretion, provided that any such removal shall not
affect a Participant’s Deferral Elections already made until
the next period for which such elections could otherwise be changed
or revoked hereunder.
3.
Election .
(a)
Director Participant
Elections . Each
Director Participant may elect to defer under the Plan up to 100%
of his annual board and committee meeting fees (collectively,
“Board Fees”). A Director Participant’s
election to defer a portion of his Board Fees shall be made in
writing and shall be effective upon receipt and acceptance by the
Company. A new written election must be submitted to the
Company in 2005 with respect to any Board Fees to be earned in
2006, and such election shall remain in effect for subsequent years
unless a new written election is submitted in accordance with this
Section 3(a). Except in the case of a newly eligible
Director Participant who may file an election to defer within 30
days of his being eligible to participate in the Plan, an election
to defer (or to change or revoke an ongoing deferral
election)
shall be made no later than 10 days
preceding commencement of a calendar year with respect to any
deferral of Board Fees to be earned in such year, provided,
however, that such elections shall be made at an earlier time if
required under Section 409A. Any election may be changed
in writing, but only as to fees to be earned at and after
commencement of the next succeeding calendar year, and shall become
irrevocable 10 days before that succeeding calendar
year.
(b)
Key Employee Participant
Elections . Each
Key Employee Participant may elect to defer under the Plan up to
50% of his base salary (“Base Compensation”) and up to
100% of his annual incentive compensation with respect to services
for that upcoming year (even if the bonus is otherwise payable in a
later calendar year) (“Bonus Compensation”)
(collectively, “Annual Compensation”). A Key
Employee Participant’s election to defer a portion of his
Annual Compensation shall be made in writing and shall be effective
upon receipt and acceptance by the Company. A new written
election must be submitted to the Company in 2005 with respect to
any Annual Compensation to be earned in 2006, and such election
shall remain in effect for subsequent years unless a new written
election is submitted in accordance with this
Section 3(b). Except in the case of a newly eligible Key
Employee Participant who may file an election to defer Annual
Compensation earned with respect to services performed after such
election within 30 days of his designation by the Committee as
being eligible to participate in the Plan, an election to defer
Annual Compensation (or to change or revoke an ongoing deferral
election) shall be made no later than 10 days preceding
commencement of a calendar year with respect to any deferral of
Annual Compensation to be earned in such year.
Notwithstanding the foregoing, if Bonus Compensation qualifies as
“performance-based compensation” under
Section 409A, an election to defer Bonus Compensation may be
made as late as June 30 th of the year with respect
to which such Bonus Compensation relates, provided that there is no
minimum amount payable or substantially certain to be paid at the
date such election is actually made. Any election may be
changed in writing, but only as to compensation that relates to
services rendered after commencement of the next succeeding
calendar year, and shall become irrevocable 10 days before the
succeeding calendar year.
4.
Duration of Deferral
. Each Participant’s
election shall specify the period of the deferral, which shall be a
specified period of years ranging from two to five years from the
beginning of the year of deferral. A Participant may later
elect to lengthen the period of a deferral; provided, however, that
any delayed payment date election shall not take effect for 12
months following the election and the election must be made at
least 12 months before the previously-scheduled payment date with
respect to the deferral, and, provided further, that each such
change in payment date must provide for an additional deferral of
the payment date for five years later than the
previously-schedule payment date.
5.
Deferred Compensation
Account . The
Company shall maintain a bookkeeping account to which deferred
compensation of each Participant shall be credited at the end of
each calendar month after such compensation is earned (each a
“Deferred Compensation Account”). At the end of
each fiscal quarter, the amounts credited to each Deferred
Compensation Account shall be converted into whole stock units
(“Stock Units”) equivalent in value to shares of Class
A common stock of the Company (“Stock”). The
conversion of deferred compensation into Stock Units will be made
on the basis of the Fair Market Value of the Stock on the last
business day of each fiscal quarter. Any fractional units
shall be credited as cash and converted to Stock Units
only as and when the accumulated
cash credited to that Participant is sufficient to convert to a
whole Stock Unit at the end of a quarter.
6.
Dividend Equivalent
. During the term of deferral,
the Stock Units standing to the credit of each Participant’s
Deferred Compensation Account shall be credited with an amount
equal to the cash dividends that would have paid on the number of
Stock Units in such Deferred Compensation Account if such Stock
Units were deemed to be outstanding shares of Stock
(“Dividend Equivalents”). Dividend Equivalents
credited to Stock Units shall be converted to additional whole
Stock Units and credited to the Participant’s Deferred
Compensation Account at the end of each fiscal quarter. The
conversion of Dividend Equivalents into Stock Units shall be made
on the basis of the Fair Market Value of the Stock on the last
business day of each fiscal quarter. Any fractional units
shall be credited as cash and converted to Stock Units only as and
when the accumulated cash credited to that Participant is
sufficient to convert to a whole Stock Unit at the end of a
quarter.
7.
Changes in Stock
. In the event of a stock
dividend, stock split, reverse stock split or similar change in
capitalization affecting the Stock, the Committee shall make
appropriate adjustments in the number of Stock Units credited to
each Participant’s Deferred Compensation Account. The
adjustment by the Committee shall be final, binding and
conclusive.
8.
Rights of Participants
. Participation in the Plan,
and any actions taken pursuant to the Plan, shall not create or be
deemed to create a trust or fiduciary relationship of any kind
between the Company, its Subsidiaries and the Participant.
The Company or its Subsidiaries (as the case may be) may, but shall
have no obligation to, establish any separate fund, reserve, or
escrow or to provide security with respect to any amounts deferred
under the Plan. Any assets of the Company or its Subsidiaries
which are set aside in any separate fund, reserve or escrow shall
continue for all purposes to be a part of the general assets of the
Company or its Subsidiaries, with title to the beneficial ownership
of any such assets remaining at all times in the Company and its
Subsidiaries. No Participant, nor his legal representatives,
nor any of his beneficiaries shall have any right, other than the
right of an unsecured general creditor of the Company or its
Subsidiaries, in respect of the Deferred Compensation Account
established hereunder, and such persons shall have no property
interest whatsoever in any specific assets of the Company or its
Subsidiaries. A Participant shall have no rights as a
stockholder of the Company, and shall not be entitled to vote, with
respect to the Stock Units credited to his Deferred Compensation
Account.
9.
Distributions
.
(a)
Normal Distributions
.
(i)
Director Participants
. Each Director Participant
(or his beneficiary in the event of his death) shall be entitled to
receive the value of all Stock Units standing to the credit of his
Deferred Compensation Account upon the earliest to occur of: (A)
the payment date last selected pursuant to Section 4; and (B)
the Director Participant’s death or Disability.
(ii)
Key Employee
Participants . Each
Key Employee Participant (or his beneficiary in the event of his
death) shall be entitled to receive the value of all Stock Units
standing to the credit of his Deferred Compensation Account upon
the earliest to occur of: (A) the payment date last selected
pursuant to Section 4; and (B) the Key Employee
Participant’s death or Disability.
(b)
Early Distributions
. A Participant will only be
permitted to receive a distribution of his Deferred Compensation
Account prior to the times specified in Section 9(a) above in
the event of: (i) a Change in Control of the Company or Subsidiary
for which that Participant works or performs Director services; or
(ii) upon approval by the Committee, a de minimis payout of a
Participant’s entire Deferred Compensation Account upon his
Termination of Employment or Service if the payment is not greater
than $10,000 and the payout is made on or before the later of
December 31 of the year of his Termination of Employment or
2½ months after his Termination of Employment
(c)
Form of Distribution
. All distributions shall be
paid in a single lump of whole shares of Stock equal to the number
of Stock Units in the Deferred Compensation Account, with any
amount in excess of whole shares then credited to the account paid
in cash. All distributions under the Plan shall be the
obligation of the Company or Subsidiary for which the Participant
provides services.
(d)
Delay in Distribution to Key
Employees .
Notwithstanding anything to the contrary in this
Section 9, in the case of a distribution to a Participant who
is a “key employee” where the timing of such
distribution is based on such Participant’s Termination of
Employment, the date of distribution to such Participant shall be
at least six (6) months after the date of such Participant’s
Termination of Employment (or, if earlier, the date of the
Participants death or Disability). A “key
employee” shall be a key employee as defined in
Section 416(i) of the Code without regard to paragraph 5
thereof.
10.
Tax Withholding
.
(a)
Payment by Participant
. Each Participant shall, no
later than the date as of which his Stock Units or payments
received thereunder first become includible in the gross income of
the Participant for Federal income or employment tax purposes, pay
to the Company, or make arrangements satisfactory to the Committee
regarding payment of, any Federal, state, or local taxes of any
kind required by law to be withheld with respect to such
income. With respect to Key Employee Participants, the
Company will withhold any such taxes then due to be withheld from
the amount that would otherwise be deferred and credited
hereu
