Document:

first security 10qsb 93005 exhibit 10-5

    Exhibit
      10.5

     

    Summary
      of Outside Director Compensation Plan

    

    On
      September 12, 2005, the Boards of Directors of First Security Bancorp, Inc.
      (the
“Company”) and First Security Bank of Lexington, Inc. (the “Bank”) approved
      establishing a compensation plan for directors of the Company and the Bank
      who
      are not employees of either the Company or the Bank. This compensation plan
      provides for the payment to each outside director of a one-time $3,500 stipend
      plus a per meeting fee for meetings held after July 1, 2005 per the following
      schedule:

    

    
      	·  	
              Board
                of Director meetings - $550 fee per meeting or $750 per meeting in
                the
                case of an outside director serving as Chairman of the
                Board

            

    

    

    
      	·  	
              Nomination,
                Compensation and Corporate Governance Committee of the Board of Directors
                of the Company - $200 fee per committee meeting or $500 in the case
                of the
                Chairman of such committee

            

    

    

    
      	·  	
              Audit
                Committee of the Board of Directors of the Company or of the Bank
                - $200
                fee per committee meeting or $500 in the case of the Chairman of
                such
                committee

            

    

    

    
      	·  	
              Asset
                Liability Management/Investment Committee of the Board of Directors
                of the
                Bank - $200 fee per committee meeting or $500 in the case of the
                Chairman
                of such committee

            

    

    

    
      	·  	
              Director
                Loan Committee of the Board of Directors of the Bank - $100 fee per
                committee meeting

            

    

    

    Under
      the
      compensation plan, an outside director, other than when serving as Chairman
      of
      the Board or as Chairman of a Committee, must be present at the meeting (in
      person or by teleconference) to receive a fee if the director has missed two
      or
      more meetings during the prior twelve month period. Outside directors serving
      on
      the Board of Directors of both the Bank and the Company who attend a joint,
      concurrent or consecutive meeting of both Boards, or of the same committee
      of
      both Boards, or any combination of same, would be paid for attending such
      meetings as if they only attended one Board or committee meeting. Fees would
      be
      paid promptly as they accrue.first security 10qsb 93005 exhibit 10-6

    Exhibit
      10.6

     

     

     

     

     

    
 

     

    
      	
              
                 

                CONTRACT

                 

              

            

    

    

    BSC,
      INC

    

    

    

    AND

    

    

    

    FIRST
      SECURITY BANK

    

    

    

    LEXINGTON,
      KENTUCKY

    

    

    

    

    

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    

    

    CONTRACT

    

    

    This
      agreement, made and entered into this 14th
      day of
      November, 2005 by and between BSC, Inc. of 450 Old Vine Street, Lexington,
      Kentucky, hereinafter referred to as BSC and First Security Bank, Lexington,
      Kentucky, hereinafter referred to as First Security Bank.

    

    

    WITNESSETH:

    

    

    That
      for
      good and valuable consideration, the same being the mutual covenants contained
      herein, BSC and First Security Bank agree and contract as follows:

    

    

    1. DESCRIPTION
      OF SYSTEM

    BSC
      will
      provide “on-line” data processing service to First Security Bank in Lexington,
      using the Comprehensive Banking System (CBS) software licensed by FISERV, Inc.
      The software modules included in this system are:

    
      	 	
              a.

            	
              Common
                File Subsystem - A single, real time, on-line parameter file which
                controls all processing.

            

    

    
      	 	
              b.

            	
              Customer
                Information File Subsystem - A centralized file which automatically
                tracks
                and correlates all of a customer’s banking
                relationships.

            

    

    
      	 	
              c.

            	
              Proof
                of Deposit Subsystem - A central point of distribution and control
                for all
                monetary transactions.

            

    

    
      	 	
              d.

            	
              Transactions
                Subsystem - An integrated deposit system which handles the processing
                of
                all transaction-based deposit products, including Checking, Regular
                Savings, Club, NOW, Money Market,
                etc.

            

    

    
      	 	
              e.

            	
              Loan
                Subsystem - A combined subsystem which supports the automated processing
                of Real Estate, Commercial and Consumer Lending
                operation.

            

    

    
      	 	
              f.

            	
              Time
                Subsystem - A system for processing all investment or term-deposit
                accounts, Repurchase Agreements,
                etc.

            

    

    
      	 	
              g.

            	
              General
                Ledger Subsystem - An integrated accounting and financial control
                system
                designed to support the detailed information requirements of the
                entire
                organization.

            

    

    
      
        
           

          

          

        

        
        

      

      
        1

        
          

        

      

      
        
        

      

    

    

    2. DESCRIPTION
      OF SERVICES

    The
      service provided by BSC will also include the following features:

    
      	 	
              a.

            	
              First
                Security Bank or BSC entry, update, and retrieval (by authorized
                employees) of data stored in a central processing unit located on
                BSC
                premises through the use of display stations and printers located
                at First
                Security Bank.

            

    

    
      
        	 	b.	An average response time for "on-line" users at
                First
                Security Bank display stations not to exceed eight
                seconds.

      

      
        	 	
                c.

              	
                On
                  line communication access to the system is available during all
                  workdays
                  and regular work hours of First Security Bank. Processing times
                  usually
                  occur after normal work hours of First Security Bank. First Security
                  Bank
                  is responsible for informing BSC of their holiday and special weekend
                  schedules.

              

      

    

    
      	 	
              d.

            	
              BSC
                begins daily processing in the late afternoon after regular banking
                hours
                for First Security Bank. It is First Security Bank’s responsibility to
                deliver their work to BSC to all BSC sufficient time for the daily
                capture, sorting, and processing of the proof and transmit items
                prior to
                the Federal Reserve deadline and pickup by the courier service. Work
                not
                received timely will be processed, however, it may not meet the current
                day deadline with the Federal Reserve. After transmission of all
                proof and
                transit items to the AS/400 to update all the subsystems, the daily
                processing begins.

            

    

    
      	 	
              e.

            	
              The
                ability to process data in batches, if desired, by Grant County Deposit
                Bank personnel, and to have high volume output, such as transaction
                listing and master listings, printed at BSC and delivered to Grant
                County
                Deposit Bank on an emergency basis.

            

    

    
      	 	
              f.

            	
              The
                utilization of data base management concepts and techniques built
                into the
                system software operating on the central processing
                unit.

            

    

    
      	 	
              g.

            	
              The
                maintenance of BSC’s standard backup and recovery procedures
                which

            

    

    

    
      	 	
              1)

            	
              Provide
                for off-site storage of backup versions of data files and
                programs,

            

    

    

    
      	 	
              2)

            	
              Ensure
                proper control of the status of data files and their activity since
                last
                backup,

            

    

    

    
      	 	
              3)

            	
              Provide
                for alternative location availability for computer operation in emergency
                situation, and

            

    

    

    
      	 	
              4)

            	
              Activate
                reconstruction procedures for data lost through hardware or software
                malfunction, operator error, or other unforeseen
                destruction.

            

    

    
      
        
           

          

          

        

        
        

      

      
        2

        
          

        

      

      
        
        

      

    

    

    
      	 	
              h.

            	
              Transmit
                to First Security Bank’s ATM processor a current updated balance file
                after daily processing and receive daily transaction files from the
                processor for posting at the next scheduled processing
                cycle.

            

    

    
      	 	
              i.

            	
              The
                daily transmission of balance information to First Security Bank’s
                Internet Banking system

            

    

    
      	 	
              j.

            	
              The
                daily transmission of balance information to the Voice Response
                system

            

    

    
      	 	
              k.

            	
              Customer
                credit information on magnetic media to First Security Bank’s Credit
                Reporting Agency

            

    

    
      	 	
              l.

            	
              1098
                and 1099 information on magnetic media to the Internal Revenue
                Service

            

    

    
      	 	
              m.

            	
              The
                receipt of Automated Clearing House items origination from other
                financial
                institutions.

            

    

    
      	 	
              n.

            	
              All
                data and information received from First Security Bank will be available
                for audit and review by any banking or governmental agency having
                supervision over First Security Bank, including internal or external
                auditors employed by First Security Bank. These audits and reviews
                may be
                conducted during BSC’s regular business
                hours.

            

    

    
      	 	
              o.

            	
              Processing
                priorities are controlled by the AS/400 operating
                system.

            

    

    
      	 	
              p.

            	
              Immediate
                Report availability at First Security Bank upon completion of daily
                processing.

            

    

    
      	 	
              q.

            	
              BSC’s
                customer service representatives will make notification of all system
                changes that will affect procedures and reports to First Security
                at least
                three days in advance of such
                changes

            

    

    

    3. DESCRIPTION
      OF HARDWARE

    The
      hardware BSC will use in order to provide this service will include the
      following:

    
      	
            	
              a.

            	
              Located
                at BSC

            

    

    
      
        	 	
                1)

              	
                Central
                  processing unit with magnetic disk, diskette, and tape
                  storage,

              

      

      
        	 	2)	Multiple display
                stations

      

      
        	 	3) 	Line printer

      

    

     

    
      	 	
              b.

            	
              Leased
                dedicating communication lines including necessary attachments at
                BSC and
                each location. Security for these dedicated communication lines is
                the
                responsibility of the communication company and BSC is responsible
                for the
                attachments.

            

    

    
      
        
           

          

          

        

        
        

      

      
        3

        
          

        

      

      
        
        

      

    

    

    4. MAINTENANCE

    BSC
      will,
      at its expense, maintain all equipment furnished to First Security in good
      and
      proper working order with any necessary maintenance and repair performed in
      a
      timely fashion. In the event that repair of equipment named herein is necessary
      and the loss of use of said equipment during repair causes hardship to First
      Security Bank, BSC will furnish similar equipment on loan until the original
      equipment is restored to proper working order. BSC will provide for use of
      additional equipment if needed at BSC’s offices as alternate data entry
      stations.

    

    5. COURIER
      SERVICE

    First
      Security Bank shall provide for all courier service, when needed.

    

    6. FEE
      SCHEDULE

    First
      Security Bank agrees to pay to BSC the monthly fee of $12,000.00 for the
      performance of the above services rendered. If the costs to provide data
      transmission lines to First Security Bank increase by more than 25 percent
      during the life of this contract, then the amount that exceeds 25 percent may
      be
      billed to First Security Bank and an additional monthly charge.

    

    7. TRAINING
      SERVICES

    Training
      services shall be provided at BSC, for a fee of $400.00 per day. Training
      necessitated by new releases or updates by the software vendor are excluded
      from
      any additional charges. First Security Bank will not be limited as to the number
      of employees who may attend.

    

    8. ADDITIONAL
      PROGRAMMING SERVICES

    Programming
      service for major modifications or major additions to the above system shall
      be
      performed for a contracted fee not to exceed $60.00 per hour at the time such
      modifications or additions are defined.

    

    9. DURATION
      AND TERMINATION

    The
      period of this contract shall be for six consecutive months beginning with
      the
      date of this contract. First Security Bank may terminate this agreement after
      this period with one month written notice to BSC. BSC may terminate this
      agreement after this period with one month written notice to First Security
      Bank. In the event of termination by either party, BSC will provide all required
      First Security Bank data on standard magnetic media at no additional cost and
      First Security Bank will return all of BSC’s equipment to BSC. No monetary
      penalties will be imposed by BSC for 

    
      
        
           

          

          

        

        
        

      

      
        4

        
          

        

      

      
        
        

      

    

    termination
      as long as one month notice is given. In the event First Security Bank or BSC
      is
      merged or sold to another institution; receivership or bankruptcy will also
      require one month notice. This contract contains no provisions that would limit
      the ability of a regulator to arrange an orderly and reasonable conversion
      of
      data to another service provider or receiver. Should either party terminate
      this
      agreement without at least one month notice, then a termination fee may be
      assessed by the other party and it will be calculated at the rate of $12,000.00
      per month for each remaining month of the required one month notice period.
      Licensed software and any related documentation will remain the property of
      BSC.

    

    10. INSURANCE

    BSC
      is
      covered under the standard business policy which includes errors and omission
      coverage with a liability limit of $1,000,000.00 and blanket employee dishonesty
      protections with a liability limit of $100,000.00.

    

    11. SECURITY
      BREACH

    BSC
      agrees to promptly notify First Security Bank when any malicious activity is
      suspected or known. Any security breach of policy and/or procedures will be
      immediately reported to First Security Bank and it will be the responsibility
      of
      First Security Bank to inform the proper authorities of such
      violations.

    

    12. AUDITS
      AND DISASTER RECOVERY PLAN

    BSC
      will
      provide First Security Bank, on an annual basis, a copy of the current year
      financial audit and Level 2 SAS-70 operation audit conducted by BSC’s
      independent third party CPA or CPA firm at no additional cost to First Security
      Bank. The Level SAS-70 operations audit will include the results of disaster
      recovery plan tests conducted at BSC. BSC will provide First Security Bank
      with
      a current copy of BSC’s Disaster Recovery Plan.

    

    13. PROPRIETARY
      NATURE OF DATA

    It
      is
      agree that all data and information furnished to BSC by First Security Bank
      are
      to be regarded by the parties as confidential and are to be held in confidence
      and safekeeping by BSC for the sole use of First Security Bank.

    

    14. LIMITATION
      OF LIABILITY

    BSC
      agrees to use due care in processing First Security Bank work, which care shall
      conform to proper data processing standards, BSC shall be responsible for
      correcting any errors which are due to machine malfunctions or programming
      error, provided that such errors are reported to BSC within 60 days of receipt
      of information by First Security Bank.

    
      
        
           

          

          

        

        
        

      

      
        5

        
          

        

      

      
        
        

      

    

    

    15.  This
      contract, and written amendments thereto, contain all the terms and conditions
      agreed upon by the hereto, and no other agreements, oral or otherwise, regarding
      the subject matter of this contract shall be deemed to exist or to bind any
      of
      the parties hereto. All previous communications, representations, warranties,
      promises, conditions, or agreements of any kind or nature whatsoever shall
      not
      be binding upon the parties unless incorporated into this contract without
      the
      other’s consent. BSC and First Security Bank may modify the contract terms with
      regard to the addition or deletions of applications or services with sixty
      days
      written notices. Changes in the monthly fee will be negotiated in good faith
      by
      both BSC and First Security Bank when the changes requirements are known. BSC
      and First Security Bank will not engage in negotiations involving the receipt
      of
      gifts, premiums, or bonuses for singing this contract. This contract covers
      and
      includes the entire agreement between the parties.

    

    16.  This
      contract shall be governed by the laws of the Commonwealth of Kentucky both
      as
      to interpretation and performance.

     

            IN
      WITNESS WHEREOF,
      the parties hereto, individually and by their respective and duly authorized
      officers, have hereunto set their name.

     

    
      	 	 	 
	 	BSC,
              INC.
	 
 	 
 	 
 
	 	By:  	/s/ Michael
              A. Hunter
	 	
              

            
	 	 

    

     

    DATE:    
      8/19/05      

     

    
      
        	 	 	 
	 	First
                Security Bank
	 
 	 
 	 
 
	 	By:  	/s/ R.
                Douglas Hutcherson
	 	
                
President
&
                CEO
	 	 

      

     

    
      
        6

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