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Exhibit 10.4
STOCK YARDS BANK & TRUST COMPANY
EXECUTIVE NONQUALIFIED
DEFERRED COMPENSATION PLAN
(as Amended and Restated in 2009 to address final
409A regulations)
Section 1--Purpose
Stock Yards Bank and Trust Company (the
"Employer") adopts the Plan set forth herein as a 2009 amendment
and restatement of a plan previously in effect 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.
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.
In light of regulations and other guidance
recently issued by the Internal Revenue Service under Code Section
409A, the Company now amends and restates 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, 2009 except as
otherwise provided herein.
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 a 2006
Amended and Restated Plan, the provisions set forth herein control
all Account balances regardless of when such funds were
accumulated.
Section 2--Definitions
As used in the Plan, including this Section 2,
references to one gender shall include the other and, unless
otherwise indicated by the context:
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.
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.
2.3
"Beneficiary" means the person, persons, entity or entities
designated or determined pursuant to the provisions of Section 13
of the Plan.
2.4
"Board" means the Board of Directors of Stock Yards Bank and
Trust Company.
2.5
"Code" means the Internal Revenue Code of 1986, as amended.
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.
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.
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.
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.
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.
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.
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.
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.
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.
2.15 "ERISA"
means the Employee Retirement Income Security Act of 1974, as
amended.
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.
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.
2.18 "Plan" means
The Stock Yards Executive Deferred Compensation Plan, as herein set
out or as duly amended hereafter.
2.19 "Plan Year"
means the twelve-month period ending on the last day of
December.
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.
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.
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 any successor guidance to Treas.
Reg. Section 1.409A-1(i), that changed definition shall control
hereunder.
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.
2.23 "Trust"
means the trust fund established pursuant to Section 10.2, if
adopted by the Employer.
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.
2.25
"Termination of Employment" shall mean the date the Employer
and the Employee reasonably anticipate that (i) the Employee will
not perform any further services for the Employer or any other
entity considered a single employer with the Employer under Section
414(b) or (c) of the Code (inserting in lieu of 80% each time it is
used thereunder with 50%) (together referred to herein as the
"Controlled Group"), or (ii) the level of bona fide services
performed after that date (as an employee or independent
contractor) will permanently decrease to less than 20% of the
average level of bona fide services performed over the previous 36
months (or if shorter over the duration of service). For this
purpose, service performed as an employee or as an independent
contractor is counted, and service as a member of the board of
directors of an Employer Group is counted because benefits under
this Plan are aggregated with benefits under a similar Employer
Group plan or agreement in which Executive also participates as a
director. The Employee will not be treated as having a Termination
of Employment while on military leave, sick leave or other bona
fide leave of absence if the leave does not exceed six months or,
if longer, the period during which the Employee has a reemployment
right with the corporation by statute or contract. If a bona
fide leave of absence extends beyond six months, a Termination of
Employment will be deemed to occur on the first day after the end
of such six month period, or on the day after the Employee's
statutory or contractual reemployment right lapses, if later.
The Committee will determine whether a Termination of Employment
has occurred based on all relevant facts and circumstances, in
accordance with Treasury Regulation Section 1.409A-1(h).
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.
Section 3--Participation
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.
Section 4--Credits to Deferred Compensation
Account
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:
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.
4.1.2The 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.
4.1.3With 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.
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
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.
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.
Section 5--Distribution Events and
Forms
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, 60 days following the Termination of Employment, or, if and
only if the Termination of Employment is a Retirement, begin 60
days afterward 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.
5.2
Death. If the Participant dies before incurring a
Termination of Employment, 60 days following that event the
Employer shall pay (or begin to pay) a benefit to the Participant's
Beneficiary in either 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 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.
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.
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 and Treas. Reg. Section
1-409A-3(i)(3) 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.
Section 6--Election of Payment
Options
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, 60 days
after the payment triggering event.
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.
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. Provided, 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.
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.
6.5
Payments in 2005 and 2006. Any Participant who becomes entitled
to a payment of benefits in 2005 or 2006 under the ter
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