Exhibit 10.6
COMMUNITY TRUST BANCORP,
INC.
SEVERANCE
AGREEMENT
THIS SEVERANCE AGREEMENT
(“Agreement”), applicable only in the event of a change
in control, is made effective as of the day of
______________________, 2008, by and between Community Trust
Bancorp, Inc., a Kentucky corporation having its principal place of
business in Pikeville, Kentucky (the “Company”), and
_____________________________ (the
“Employee”).
1. Payment of
Severance Amount . If the Employee’s
employment by the Company or any subsidiary or successor of the
Company shall be subject to a Voluntary Termination or an
Involuntary Termination within the Covered Period, then the Company
shall pay the Employee an amount equal to the applicable Severance
Amount. Except as otherwise provided by paragraph 3, the
applicable Severance Amount shall be payable within 15 days after
the Termination Date.
2. Definitions
. All the terms defined in this paragraph 2 shall have
the meanings given below throughout this Agreement.
(a) An
“Affiliate” shall mean any entity which owns or
controls, is owned by or is under common ownership or control with,
the Company.
(b) “Base
Annual Salary” shall be equal to the greater
of:
(i) the
employee’s annual salary excluding bonuses and special
incentive payments on the date of the earliest Change of Control to
occur during the Covered Period, or
(ii) the
employee’s annual salary excluding bonuses and special
incentive payments on the date of the Employee’s termination
of employment from the Company or an Affiliate.
(c) “Change
in Duties” shall mean any one or more of the
following:
(i) a significant
change in the nature or scope of the Employee’s authorities
or duties from those applicable to the Employee immediately prior
to the date on which a Change of Control occurs;
(ii) a reduction in the
Employee’s Base Annual Salary from that provided to the
Employee immediately prior to the date on which a Change of Control
occurs;
(iii) a diminution in
the Employee’s eligibility to participate in bonus, stock
option, incentive award and other compensation plans which provide
opportunities to receive compensation, from the greater
of:
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the opportunities provided by the Company
(including its subsidiaries) for executives with comparable
duties;
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or
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the opportunities under any such plans under
which the Employee was participating immediately prior to the date
on which a Change of Control occurs;
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(iv) a change in the
location of the Employee’s principal place of employment by
the Company (including its Affiliates) by more than twenty-five
miles from the location where the Employee was principally employed
immediately prior to the date on which a Change of Control occurs;
or
(v) a reasonable
determination by the Board of Directors of the Company that, as a
result of a Change in Control and a change in circumstances
thereafter significantly affecting the Employee’s position,
the Employee is unable to exercise the authorities, powers,
function or duties attached to the Employee’s position
immediately prior to the date on which a Change of Control
occurs.
(d) “A Change
of Control” shall be deemed to have occurred
if:
(i) any
“person”, including a “group” as determined
in accordance with section 13(d)(3) of the Securities Exchange Act
of 1934 (the “Exchange Act”), is or becomes the
beneficial owner, directly or indirectly, of securities of the
Company representing 30 percent or more of the combined voting
power of the Company’s then outstanding
securities;
(ii) as a result of, or
in connection with, any tender offer or exchange offer, merger or
other business combination, sale of assets or contested election,
or any combination of the foregoing transactions (a
“Transaction”), the persons who were directors of the
Company before the Transaction shall cease to constitute a majority
of the Board of Directors of the Company or any successor to the
Company;
(iii) the Company is
merged or consolidated with another corporation and as a result of
the merger or consolidation less than 70 percent of the outstanding
voting securities of the surviving or resulting corporation shall
then be owned in the aggregate by the former stockholders of the
Company, other than (x) affiliates within the meaning of the
Exchange Act or (y) any party to the merger or
consolidation;
(iv) a tender offer or
exchange offer is made and consummated for the ownership of
securities of the Company representing 30 percent or more of the
combined voting power of the Company’s then outstanding
voting securities; or
(v) the Company
transfers substantially all of its assets to another corporation
which is not a wholly-owned subsidiary of the Company.
(e)
“Code” shall mean the Internal Revenue Code of
1986, as amended.
(f) “Covered
Period” for the Employee shall mean a period of time
following the occurrence of a Change of Control equal to (i) two
years following the occurrence
