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 12th
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 there shall have been delivered to
the Executive a copy of a resolution duly adopted by the affirmative vote of
not less than 51% of the entire membership of the Board of Directors of the
Company (the “Company Board”) at a meeting of the Company Board called and held
for that purpose (after reasonable notice to the Executive and an opportunity
for the Executive, together with his counsel, to be heard before the Company
Board), finding that in the good faith opinion of the Company Board, the
Executive was guilty of conduct set forth in Section 1.1 and specifying
the particulars thereof in detail.


 


3.2           Termination for Cause or Before Contract Period.  Upon a
termination of the Executive’s employment for Cause during the Contract Period,
the Executive shall have no right to receive any compensation or benefits
hereunder.  Upon a termination of the
Executive’s employment without Cause during the Contract Period, the Executive
shall be entitled to receive the benefits provided in Section 3.4
hereof.  This Agreement shall not apply
to, and the Executive shall have no right to receive any compensation or
benefits hereunder in connection with, any termination of the Executive’s
employment by the Company other than during a Contract Period, and Executive
shall remain an “at will” employee until a Contract Period begins.


 


3.3           Termination for Good Reason.  During
the Contract Period, the Executive shall be entitled to terminate his
employment with the Company and, if such termination is for Good Reason, to
receive the benefits provided in Section 3.4 hereof.  The Executive shall give the Company Notice
of Termination of his employment pursuant to this Section 3.3, and
termination of the Executive’s employment shall be effective five business days
after the Executive gives notice thereof to the Company.  This Agreement shall not apply to, and the
Executive shall have no right to receive any compensation or benefits hereunder
in connection with, any termination of the Executive’s employment by the
Executive other than during a Contract Period. 
This Agreement shall not apply to, and the Executive shall have no right
to receive any compensation or benefits hereunder in connection with, a
termination of the Executive’s employment on account of the Executive’s death,
whether or not during the Contract Period.


 


3.4           Compensation Upon Termination.  If
during a Contract Period the Executive’s employment shall be terminated by the
Bank other than pursuant to death or for Cause, or if the Executive shall
terminate his employment for Good Reason, then the Company shall continue to
pay, or the Company shall cause the Bank to continue to pay, for the remainder
of the Contract Period, the Executive’s Compensation in the same manner as if
employment had not terminated.


 


In
addition to the severance benefit set forth in this Section 3.4, the
Company shall, or the Company shall cause the Bank to:


 


(1)           pay as incurred or reimburse Executive for all
legal fees and expenses incurred by the Executive resulting from termination
(including all such fees and expenses, if any, incurred in contesting any such
termination or in seeking to obtain or enforce any right or benefit provided by
this Agreement), as and when the Company is notified thereof, but in all events
within 21⁄2 months following the calendar year in which such amounts are
incurred; and


 


(2)           maintain in full force and effect, for the
continued benefit of the Executive for the shorter of (i) until the
Executive’s death (provided that benefits payable to his beneficiaries shall
not terminate upon his death), or (ii) with respect to any particular
Plan, the date he is afforded a comparable benefit at a comparable cost to the
Executive by a subsequent employer, or (iii) the remainder of the Contract
Period, all Plans in which Executive was entitled to participate immediately
prior to the Change of Control (unless Plans generally available to employees
of the Bank have been modified since the Change in Control in which case the
Plans to be continued shall be those in effect at the Date of Termination, at
the level most 


 

















 


comparable to that available to the Executive at the Change in
Control).  In the event that the Executive’s
participation in any Plan of the Company is prohibited, the Company shall
arrange to provide the Executive with benefits substantially similar to those
which the Executive is entitled to receive under that Plan, for such period.  To the extent such Plans or provisions for
comparable Plans constitute “deferred compensation” within the meaning of Section 409A
of the Code, the Company shall not delay or accelerate payment to vendors or
third parties for such coverage on Executive’s behalf, beyond the normal
periodic payment periods then applicable for the Plans for employees
generally.  On the last day of the
Contract Period (even if enjoyment of a benefit ceases earlier as provided
above), the Executive shall have assigned to him at no cost and with no
apportionment of prepaid premiums, any assignable insurance policy owned by the
Bank or the Company relating specifically to the Executive, and, if benefits
hereunder cease before the end of the Contract Period, the Company shall use
its best efforts, without requirement to pay additional cash premiums, to
maintain any such policy in full force and effect until such time, or allow the
Executive to arrange to do so; and


 


(3)           cause all stock options and stock appreciation
rights and/or the rights held by the Executive with respect to stock in the
Company, immediately prior to the termination, if not otherwise presently
exercisable, to become presently exercisable.


 


3.5           Disability.              If during the Contract Period, the Executive’s
employment shall be terminated, either by the Bank or by the Executive, due to
the Executive’s Disability, the Company shall pay the Executive the severance
compensation provided for in Section 3.4 and the same benefits as set
forth in Section 3.4(1)-(3).


 


3.6           No Mitigation.      The Executive shall not be
required to mitigate the amount of any payment provided for in this Section 3
by seeking other employment or otherwise, nor shall the amount of any payment
provided for in this Section 3 be reduced by any compensation earned by
the Executive as the result of employment by another employer after the Date of
Termination, or otherwise.


 


3.7           Delay in Payments
for Specified Employees.  Notwithstanding
the provisions of Section 3.4 hereof, if
the Executive is a “key employee” within the meaning of Section 416(i) (but
without regard to Section 416(i)(5)) of the Internal Revenue Code of 1986,
as amended (the “Code”), as of the last identification date thereof and
determined in the manner provided in Treasury Regulation §1.409-1(i) when  the Executive’s separation from service
occurs, and stock of the Company is at such separation publicly traded on an
established securities market or otherwise, any non-409A exempt severance
compensation payable pursuant to Section 3.4 and benefits in subsection (1) and
(2) shall not be paid earlier than 6 months following the date of the
Executive’s separation from service.  If
the preceding sentence applies to the Executive, then the  severance, reimbursements and benefits
required by Section 3.4 and subsections (1) and (2) shall not be
provided until 6 months following the Executive’s separation from service,
unless such benefits or amounts do not constitute “deferred compensation”
within the meaning given in Section 409A of the Code.  For example, such benefits or amounts might
not be deferred compensation to the extent benefits provided can be excluded
from the Executive’s gross income as is reportable by the Company or the Bank
on wage reports, or if they would be deductible by the Executive under Code Section 162
or 167 (without regard to any limitations based on adjusted gross income), and
are provided or reimbursed prior to the end of the second calendar year
following the calendar year in which the separation occurs.  If a benefit cannot be provided or paid for by
the Company during the 6 month period following the separation from service as
a result of this timing restriction, the Company shall pay to Executive the
amount of compensation that would have been paid during the 6 months, as well
any amount he has expended for benefits during the 6 months delay, within 5
days after the 6 months delay period has expired, and shall pay or provide for
the reimbursements and benefits provided hereunder otherwise at the time and in
the manner provided in Section 3.4.


 

















 


3.8           Meaning
of “Termination” or “Separation from Service.”  If and to the extent termination of
employment, or separation from service is required to trigger payment rights
hereunder, such phrase shall have the meaning given in Treasury Regulation
§1.409A-1(h) as reasonably interpreted by the Company. Specifically, these
phrases mean the date the Company and the Executive reasonably anticipate that (i) the
Executive will not perform any further services for the Company or any other
entity considered a single employer with the Company under Section 414(b) or
(c) of the Code (the “Employer Group”), or (ii) the level of bona
fide services performed after that date (as an employee or independent
contractor, except that service as a member of the board of directors of an
Employer Group entity is not counted unless termination benefits under this
Agreement are aggregated with benefits under any other Employer Group plan or
agreement in which Executive also participates as a director)  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).  The Employee will not be treated as having a
termination of employment or separation from service 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 Executive has a reemployment
right with the Company by statute or contract. 
If a bona fide leave of absence extends beyond six months, a termination
of employment or separation from service will be deemed to occur on the first
day after the end of such six month period, or on the day after the Executive’s
statutory or contractual reemployment right lapses, if later.


 


Section 4 — Miscellaneous


 


4.1           Successors Shall Assume. The Company will
require any successor (whether direct or indirect, by purchase, merger,
consolidation or otherwise) to all or substantially all of the business and/or
assets of the Company or the Bank, by agreement in form and substance
satisfactory to the Executive, expressly to assume and agree to perform this
Agreement in the same manner and to the same extent that the Company or the
Bank would be required to perform if no such succession had taken place.  Failure of the Company to obtain such
agreement prior to the effectiveness of any such succession shall be a breach
of this Agreement and shall entitle the Executive to compensation from the
Company in the same amount and on the same terms as the Executive would be
entitled hereunder if the Executive terminated the Executive’s employment for
Good Reason, except that for purposes of implementing the foregoing, the date
on which any such succession becomes effective shall be deemed the Date of
Termination.  As used in this Agreement, “Company”
shall mean the Company as defined in the preamble hereto and any successor to
its business and/or assets as aforesaid or which otherwise becomes bound by all
the terms and provisions of this Agreement by operation of law.  As used in this Agreement, “Bank” shall mean
the Bank as defined in the preamble hereto and any successor to its business
and/or assets as aforesaid or which otherwise becomes bound by all the terms
and provisions of this Agreement by operation of law.


 


4.2           Binding Effect.      This Agreement shall inure to the benefit of and
be enforceable by the Executive’s personal or legal representatives, executors,
administrators, successors, heirs, distributees, devisees and legatees.  If the Executive should die while any amounts
would still be payable to the Executive hereunder if the Executive had
continued to live, all such amounts, unless otherwise provided herein, shall be
paid in accordance with the terms of this Agreement to the Executive’s devisee,
legatee, or other designee or, if there be no such designee, to the Executive’s
estate.


 


4.3           Reduction of Amounts Payable.       In no event
shall any amount payable under any provision of this Agreement equal or exceed
an amount which would cause the Company to forfeit, pursuant to Section 280G(a) of
the Internal Revenue Code of 1986, as amended, its deduction for any or all
such amounts payable.  Pursuant to this Section 4.3,
the Company’s Compensation Committee has the power to reduce severance benefits
payable under this Agreement, if such benefits alone or in conjunction with
termination benefits provided under any other Company plan or program, would
cause the Company to forfeit otherwise deductible payments; provided, however
that no benefits payable under this Agreement shall be reduced pursuant to this
Section 4.3 to less than $1.00 below the amount of benefits which the
Company can properly deduct under Section 280G(a) of the Internal
Revenue Code of 1986, as amended.


 

















 


4.4           Notice.   Any notice or request required or permitted to be
given under this Agreement shall be in writing and shall be deemed sufficiently
given for all purposes if mailed by certified mail, postage prepaid and return
receipt requested, addressed to the intended recipient at


 


(a)           the addresses set forth below:


 


(i)           If
to the Company:


Republic Bancorp, Inc.


601 W. Market St.


Louisville, Kentucky 40202


 


All
notices to the Company shall be directed to the attention of the Chief
Executive Officer of the Company with a copy to the Secretary of the Company
and to the Secretary of the Bank.


 


(ii)          If to
the Bank:


Republic Bank & Trust Company


601 W. Market Street


Louisville, Kentucky 40202


 


All
notices to the Bank shall be directed to the attention of the Secretary of the
Bank with a copy to the Secretary of the Company.


 


(iii)         If to the
Executive:


at his last known


address in the Bank’s


employment records


 


(b)           Such other address as any of the parties shall
specify by written notice to the other parties of this Agreement.


 


4.5           Payment Obligations Absolute.  The
Company’s obligation to pay the Executive the amounts provided for hereunder
shall be absolute and unconditional and shall not be affected by any
circumstances, including, without limitation, any set-off, counterclaim, recoupment,
defense or other right which the Company may have against him or anyone else,
except with respect to tax withholding required pursuant to Section 4.11.  All amounts payable by the Company hereunder
shall be paid without notice or demand. 
Except as expressly provided herein, the Company waives all rights which
it may now have or may hereafter have conferred upon it, by statute or
otherwise, to amend, terminate, cancel or rescind this Agreement in whole or in
part.  Each and every payment made hereunder
by the Company shall be final and the Company shall not seek to recover all or
any part of such payment from the Executive or from whomsoever may be entitled
thereto, for any reason whatsoever.


 


4.6           Modifications and Waivers.              No
provisions of this Agreement may be modified, waived or discharged unless such
waiver, modification or discharge is agreed to in writing and signed by the
Executive and such officer as may be specifically designated by the Board of
Directors of the Company.  No waiver by
either party hereto at any time of any breach by the other party hereto of, or
compliance with, any condition or provision of this Agreement to be performed
by such other party shall be deemed a waiver of similar or dissimilar
provisions or conditions at the same or any prior or subsequent time.


 


4.7           Entire Agreement.   No agreements or
representations, oral or otherwise, express or implied, with respect to the
subject matter hereof have been made by either party which are not set forth
expressly in this Agreement.


 


4.8           Governing Law.   The validity, interpretation, construction and
performance of this Agreement shall be governed by the laws of the Commonwealth
of Kentucky.


 

















 


4.9           Validity. The invalidity or unenforceability of any
provisions of this Agreement shall not affect the validity or enforceability of
any other provision of this Agreement, which shall remain in full force and
effect.


 


4.10         Counterparts.        This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original but all of which
together will constitute one and the same instrument.


 


4.11         Payroll and Withholding Taxes.  The
Company may withhold from any amounts payable to the Executive hereunder all
federal, state, city or other taxes that the Company may reasonably determine
are required to be withheld pursuant to any applicable law or regulation.


 


IN
WITNESS WHEREOF the parties hereto have executed this Agreement, as of the day
and year first above written.


 


	
   

  	
   

  	
  REPUBLIC
  BANCORP, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  /s/
  Scott Trager

  	
   

  	
  By: 

  	
  /s/
  Steve Trager

  
	
  Scott
  Trager

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Title:
  

  	
  Vice
  Chairman, CEO Republic Bancorp, Inc.

  
	
   

  	
   

  	
   

  	
  Chairman &
  CEO: Republic Bank & Trust Company

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Date:
  

  	
  April 30,
  2008

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  REPUBLIC
  BANK & TRUST COMPANY

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By: 

  	
  /s/
  Steve Trager

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Title:
  

  	
  Vice
  Chairman, CEO Republic Bancorp, Inc.

  
	
   

  	
   

  	
   

  	
  Chairman &
  CEO: Republic Bank & Trust Company

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Date:
  

  	
  April 30,
  2008