Document:

Exhibit 10.9

COMMUNITY TRUST BANCORP, INC.

EMPLOYEE INCENTIVE COMPENSATION PLAN

EFFECTIVE JANUARY 1, 2017

 

 

INCENTIVE COMPENSATION PLAN

TABLE OF CONTENTS

	
ARTICLE

	 	
 

	 	 	 
	
       I

	
OBJECTIVES...................................................................

	
     

	 	 	 
	
      II

	
DEFINITIONS.................................................................

	
     

	 	 	 
	
     III

	
ADMINISTRATION OF THE PLAN.............................

	
     

	 	 	 
	
     IV

	
PARTICIPANT ELIGIBILITY.......................................

	
     

	 	 	 
	
      V

	
PAYMENT TO PARTICIPANTS....................................

	
     

	 	 	 
	
     VI

	
DETERMINATION OF ANNUAL AWARD FUND.....

	
 

     

	 	 	 
	
    VII

	
CALCULATION OF AWARD........................................

	
     

	 	
 

Table I – 2017 Incentive Compensation Award................

	
 

 

     

	 	 	 
	
   VIII

	
MISCELLANEOUS PROVISIONS................................

	
    

	 	 	 
	 	
ATTACHMENT A............................................................

	
    

ARTICLE I

OBJECTIVES

Section 1.01

This plan is designed to reward employees for meeting or exceeding industry standards for profitability and adopted to achieve the following objectives:

(a)   Increase the profitability and growth of Community Trust Bancorp, Inc. in a manner which is consistent with other goals of the Company, its shareholders, and its employees,

(b)   Motivate and reward employees who contribute to the success of the Company,

		(c)	
Provide compensation which is competitive with other financial institutions,

		(d)	
Attract and retain personnel of outstanding ability and encourage excellence in the performance of individual responsibilities,

		(e)	
Allow the flexibility which permits revision and strengthening from time to time to reflect changing organizational goals and objectives.

  

ARTICLE II

DEFINITIONS

Section 2.01

As used herein, the following words and phrases shall have the meanings below unless the context clearly indicates otherwise:

		(a)	
"Award Period" means one Fiscal Year.

		(b)	
"Board" means the Board of Directors of Community Trust Bancorp, Inc.

(c)   "Company" means Community Trust Bancorp, Inc.

		(d)	
“Compensation Committee” means the Compensation Committee of the Board of Directors.

		(e)	
"Disability" means the total and permanent disability of a participant as defined by any Long‐Term Disability Plans in effect for the Company and as thereafter may be amended.

		(f)	
"Effective Date" means the date upon which the Plan shall become effective.

		(g)	
"Fiscal Year" means the accounting period adopted by the Company for federal income tax purposes.

		(h)	
“Participant” means a person designated by the Company to participate in the Plan.

		(i)	
"Plan" shall mean the Company’s Incentive Compensation Plan.

		(j)	
"Salary" or "Salaries" shall mean the base salary in effect for each participant as of the last pay period in December of the Award Period.

ARTICLE III

ADMINISTRATION OF THE PLAN

Section 3.01

The Compensation Committee shall administer the Plan and employ such other agents as may reasonably be required to administer the Plan.

Section 3.02

The Compensation Committee shall adopt such rules and regulations of general application as are beneficial for the administration of the Plan and shall make all discretionary decisions involving a Participant of the Plan.  Said committee shall also have the right to interpret the Plan, to determine the Effective Date, and to approve all employees who are to participate in the Plan.

Section 3.03

A majority of the Compensation Committee shall constitute a quorum.  The acts of a majority of the members present at any meeting at which there is a quorum shall be valid acts.  Acts reduced to and approved in writing by a majority of said committee shall also be valid acts.

Section 3.04

All incentive compensation payable under the Plan shall be paid from the general assets of the Company.  To the extent that any person acquires a right to receive payments under the Plan, such right shall be no greater than the right of any unsecured creditor of the Company.

Section 3.05

The Compensation Committee shall have the President and CEO of the Company send a written notice of such Plan to each selected Participant.  No person shall have the right to be included in the Plan until receiving said notice in the form of Attachment "A" hereto.

Section 3.06

All costs and expenses involved in the administration of this Plan shall be paid by the Company.

Section 3.07

Any determination or action of the Compensation Committee or the Board shall be final, conclusive and binding on all participants and their beneficiaries, heirs, personal representatives, executors, and administrators.

Section 3.08

The Board of Directors, in its sole discretion, may amend, modify or terminate the Plan at any time.  The Compensation Committee shall also annually review the pre-determined performance standards and may amend such schedules in its sole discretion.  Notwithstanding the foregoing, after the 90th day of the year, the performance standards may not be amended in a manner which would increase the amount of incentive compensation payable over the amount which would have been payable under the performance standards previously established for such year.

  

ARTICLE IV

PARTICIPANT ELIGIBILITY

Section 4.01

The following group shall participate in the Plan:

		(a)	
Full-time employees who do not participate in another incentive plan.

Section 4.02

Voluntary or involuntary termination of full‐time employment of a Participant prior to the payment of incentive compensation awards for an Award Period will result in such Participant forfeiting any incentive compensation for that Award Period (except as provided in Section 4.03 herein).

Section 4.03

If a Participant dies, retires, becomes disabled, or is granted a leave of absence during an Award Period, the Compensation Committee may, at its discretion or under such rules as it may have prescribed, award partial incentive compensation based on the level of achievement in relation to goals established for the Award Period.

Section 4.04

New employees of the Company shall participate in the Plan so long as eligibility to participate in the Plan came into existence no later than six (6) months after the beginning of said Award Period.  If a person becomes eligible at a date later than six (6) months into an Award Period, such person shall not be a Participant under this Plan until the first day of the next Award Period.

ARTICLE V

PAYMENT TO PARTICIPANTS

Section 5.01

The award payable under the Plan will be paid to participants within thirty days after the close of the Award Period.  Awards are not earned until paid to Participants.

ARTICLE VI

DETERMINATION OF ANNUAL AWARD FUND

Section 6.01

The target award fund as a percentage of employee salaries for an Award Period shall be determined annually by the Compensation Committee of the Board of Directors.   The target award may be changed by the Compensation Committee of the Board of Directors at any time at their discretion; provided, however, that the target award may not be increased after the 90th day of the year.

Section 6.02

The actual amount of the Incentive Compensation Plan award shall be calculated according to a schedule comparing actual Return on Average Assets (ROAA) and Earnings Per Share (EPS) for the Award Period to a pre-determined performance standard.  When performance is above the performance standard, the actual award fund is adjusted upward from the target award fund.

Section 6.03

In the event that the ROAA or EPS are not attained but the target net income is attained, the amount of the award under the Employee Incentive Plan shall be paid at the base level of target performance payment.

Section 6.04

There shall be a minimum acceptable performance beneath which no incentive awards are paid and a maximum above which there is no additional award paid to avoid excessive payout in the event of windfall profits.  Said minimum and maximum shall be reviewed annually and amended when necessary at any time in the sole discretion of the Compensation Committee provided, however, that the minimum may not be reduced and the maximum may not be increased after the 90th day of the year.

Section 6.05

A Participant who is rated a “4” or “5” on the most recent Performance Appraisal and Development Plan shall not be eligible to receive an award under the Plan.

  

ARTICLE VII

CALCULATION OF AWARD

Section 7.01

Employees will earn an award determined by EPS growth and ROAA as shown below:

TABLE I

2017 INCENTIVE COMPENSATION AWARD

	
 

 Target/ROAA

	
Award as a % of Target Award

	
Award as a % of Salary

	 	
1.16%

	
50%

	
2.00%

	
Base

	
1.22%

	
100%

	
4.00%

	 	
1.25%

	
106.00%

	
4.25%

	 	
1.28%

	
112.50%

	
4.50%

	
·

	
For 2017, the targeted (base) ROAA is established as follows: ROAA of 1.22% and EPS of $2.81 per the Company’s budget.

	
·

	
For 2017, net income target is $49,618,000.

	
·

	
These results are after accrual of the incentive.

ARTICLE VIII

MISCELLANEOUS PROVISIONS

Section 8.01

The Compensation Committee may elect to remove unusual, extraordinary, or non-recurring items from the calculation of ROAA and EPS.

Section 8.02

The Company shall not merge into or consolidate with another entity or sell all or substantially all of its assets to another entity unless such other entity shall become obligated to perform the terms and conditions hereof relating to any awards already earned but not yet paid to the participant on his behalf.

ATTACHMENT A

NOTICE OF PARTICIPATION

                                        is eligible for participation in the 2017 Plan Year for Community Trust Bancorp, Inc. Incentive Compensation Plan, such participant being subject to all of the terms and conditions of said Plan.

BY:  ___________________________________

Dated:  ____________________Exhibit 10.17

COMMUNITY TRUST BANCORP, INC.

2017 EXECUTIVE COMMITTEE

LONG-TERM INCENTIVE COMPENSATION PLAN

ARTICLE I

OBJECTIVES

Section 1.01

The 2016 Executive Committee Long-Term Incentive Compensation Plan is designed to reward members of the Executive Committee for Community Trust Bancorp, Inc.’s attainment of profitability on a long-term basis and is adopted to achieve the following objectives:

	
(a)

	
Increase the profitability and growth of Community Trust Bancorp, Inc. in a manner which is consistent with other goals of Community Trust Bancorp, Inc., its stockholders, and its employees;

	
(b)

	
Provide executive compensation which is competitive with other financial institutions;

	
(c)

	
Attract and retain personnel of outstanding ability and encourage excellence in the performance of individual responsibilities; and

	
(d)

	
Motivate and reward members of the Executive Committee for their contribution to the long-term success of Community Trust Bancorp, Inc.

ARTICLE II

DEFINITIONS

Section 2.01

As used herein, the following words and phrases shall have the meanings below unless the context clearly indicates otherwise:

	
(a)

	
“Annual Long-Term Incentive Plan” or “Plan” means the 2017 Executive Committee Long-Term Incentive Compensation Plan set forth in this document and all amendments thereto.

	
(b)

	
“Board” means the Board of Directors of Community Trust Bancorp, Inc.

	
(c)

	
“Change in Control” shall have the meaning specified in the Company’s 2015 Stock Ownership Incentive Plan.

	
(d)

	
“Cumulative Net Income” shall mean Community Trust Bancorp, Inc.’s cumulative net income for the three (3) years ending December 31, 2019, computed in accordance with generally accepted accounting principles, and giving effect to the accrual for payment of all incentive compensation.

	
(e)

	
“Company” means Community Trust Bancorp, Inc. and its subsidiaries.

	
(f)

	
“Compensation Committee” means the Compensation Committee of the Board.

	
(g)

	
“Disability” shall have the meaning specified in the Company’s 2015 Stock Ownership Incentive Plan.

	
(h)

	
“Effective Date” means January 1, 2017, the date on which the Plan becomes effective.

	
(i)

	
“Fiscal Year” means the accounting period adopted by the Company for federal income tax purposes.

	
(j)

	
“Participant” means each member of the Executive Committee as of January 1, 2017.

	
(k)

	
“Performance Goal” shall have the meaning set forth in Section 7.01 below.

	
(l)

	
“Performance Period” means the three (3) Fiscal Years beginning on January 1, 2017.

	
(m)

	
“Performance Unit” shall have the meaning specified in the Company’s 2015 Stock Ownership Incentive Plan, with each Performance Unit to have a potential value of $1.00.

	
(n)

	
“Retirement” shall have the meaning specified in the Company’s 2015 Stock Ownership Incentive Plan.

	
(o)

	
“Salary” or “Salaries” means the base salary in effect for each Participant as of the last pay period in December 2017.

ARTICLE III

ADMINISTRATION OF THE PLAN

Section 3.01

The Compensation Committee shall administer the Plan and employ such agents as may reasonably be required to administer the Plan.

Section 3.02

The Compensation Committee shall adopt such rules and regulations of general application as are beneficial for the administration of the Plan and shall make all discretionary decisions involving a Participant in the Plan. The Compensation Committee shall also have the right to interpret the Plan, consistently with the applicable provisions of the 2015 Stock Ownership Incentive Plan, to determine the Effective Date, and to approve Participants in the Plan.

Section 3.03

A majority of the Compensation Committee shall constitute a quorum. The acts of a majority of the members present at any meeting at which there is a quorum shall be valid acts. Acts reduced to and approved in writing by a majority of the Compensation Committee shall also be valid acts.

Section 3.04

All incentive compensation payable under the Plan shall be paid from the general assets of the Company. To the extent that any person acquires a right to receive payments under the Plan, such right shall be no greater than the right of any unsecured creditor of the Company.

Section 3.05

The Compensation Committee may authorize the Chairman of the Board, President and Chief Executive Officer of the Company to send a written notice of such Plan to each Participant, substantially in the form of Attachment A hereto, and to execute and deliver, on behalf of the Company, a Performance Unit Agreement granting Performance Units to the Participant consistent with the Plan. No person shall have rights under the Plan until receiving and executing a Performance Unit Agreement, also executed by the Company, substantially in the form of Attachment B hereto.

Section 3.06

All costs and expenses involved in the administration of the Plan shall be paid by the Company.

Section 3.07

Any determination or action of the Compensation Committee or the Board shall be final, conclusive and binding on all Participants and their beneficiaries, heirs, personal representatives, executors, and administrators.

Section 3.08

The Board of Directors, in its sole discretion, may amend, modify or terminate the Plan at any time. Notwithstanding the foregoing, after the ninetieth (90th) day of the year, the Performance Goals specified in Section 7.01 of this Plan may not be amended in a manner which would increase the amount of compensation payable pursuant to Performance Units over the amount which would have been payable under the Performance Goals previously established for such year.

ARTICLE IV

PARTICIPANT ELIGIBILITY

Section 4.01

The Participants in the Plan will be the members of the Executive Committee of the Company as of January 1, 2017.

Section 4.02

Voluntary or involuntary termination of full-time employment of a Participant prior to the expiration of the Performance Period will result in such Participant forfeiting any payment for Performance Units for the Performance Period, except as provided in Sections 4.03 and 4.04 below.

Section 4.03

In the case of termination of employment by reason of death, Disability, or Retirement of a Participant prior to the expiration of the Performance Period, any then outstanding Performance Units of such Participant shall be payable in an amount equal to the maximum amount payable under the Performance Unit (as set forth in Section 7.01 below) multiplied by a percentage equal to the percentage that would have been earned under the terms of the Performance Unit Agreement assuming that the rate at which the Performance Goal set forth in Section 7.01 below has been achieved, as of the date of such termination of employment, would have continued until the end of the Performance Period.

Section 4.04

If, within the 24-month period beginning on the date of a Change in Control, a Participant’s employment is terminated other than for Cause or by Participants for Good Reason (“Change in Control Termination Event”), any then outstanding Performance Units shall become fully vested and payable as soon as reasonably practicable, but no later than seventy-four (74) days following the Change in Control Termination Event, in an amount which is equal to the greater of (a) the maximum amount payable under the Performance Unit (as set forth in Section 7.01 below) multiplied by a percentage equal to the percentage that would have been earned under the terms of the Performance Unit Agreement assuming that the rate at which the Performance Goal has been achieved as of the date of such Change in Control would have been continued until the end of the Performance Period; or (b) the maximum amount payable under the Performance Unit (as set forth in Section 7.01 below) multiplied by the percentage of the Performance Period completed by the Participant at the time of the Change in Control Termination Event.

Section 4.05

New employees of the Company and persons promoted during the Performance Period who were not eligible to participate in the Plan at the beginning of the Performance Period, but have become members of the Executive Committee, shall participate in the Plan so long as such eligibility came into existence no later than six (6) months after the beginning of the Performance Period. If a person becomes eligible at a date later than six (6) months into the Performance Period, such person shall not be a Participant under the Plan.

ARTICLE V

PAYMENTS TO PARTICIPANTS

Section 5.01

The maximum payment in cash or shares that can be made pursuant to Performance Units granted to any one Participant in any calendar year is $1,000,000. Subject to this limitation and such terms and conditions as the Compensation Committee may impose, Performance Units shall be payable: (a) within seventy-four (74) days following the end of the Performance Period during which the Participant attained at least the minimum acceptable level of achievement under the Performance Goal; or (b) in the event of a Change in Control Termination Event, as soon as reasonably practicable following the Change in Control Termination Event, but no later than seventy-four (74) days following the Change in Control Termination Event.

Section 5.02

A Participant may elect to defer payment of all or part of his or her compensation under the Performance Units so long as the Participant requests such deferred payment under the terms of the Company’s Voluntary Deferred Compensation Plan; provided, however that such election to defer payment is subject to, and shall be made in accordance with, U. S. Treas. Reg. 1.409A-2(b)(1).

 

ARTICLE VI

 

DETERMINATION OF TARGET AWARD FUND FOR PERFORMANCE UNITS

 

Section 6.01

The target award fund shall be generated by a percentage of the Salary of the CTBI Chief Executive Officer, the CTB Chief Executive Officer, and the other members of the Executive Committee, respectively. The target award fund shall be computed as shown in Table I below; however, the target award may be changed by the Compensation Committee of the Board of Directors at any time during the Performance Period at their discretion; provided, however, that the target award as a percentage of Salary may not be increased after the ninetieth (90th) day of the 2016 calendar year.

TABLE I

TARGET AWARD FUND

 

	
PARTICIPANTS

	
SALARIES

 

 

	
TARGET AWARD

EXPRESSED AS A

 % OF SALARY

	
TARGET AWARD

 FUND

	
CTBI CEO

	
$

	
X 40%

	
$

	
CTB CEO

	
$

	
X 30%

	
$

	
All Other Members of

the Executive

 Committee

	
$

(aggregate salaries)*

	
X 20%

	
$

*The aggregate Salaries may be increased to reflect the Salaries of any new members of the Executive Committee to the extent permitted under Section 4.05 above.

 

Section 6.02

The actual amount of payments under the Performance Units shall be calculated according to a schedule comparing Cumulative Net Income to the Performance Goals described in Section 7.01 below. When performance meets established Performance Goals, the award fund will be adjusted according to the table shown in Section 7.01 below.

Section 6.03

Subject to Sections 4.03 and 4.04 above, there shall be a minimum acceptable performance beneath which no amounts may be paid under the Performance Units (sometimes referred to as the “threshold”) and a maximum performance above which there is no additional amount paid to avoid excessive payout in the event of windfall profits. Such minimum and maximum may be amended when necessary at any time in the sole discretion of the Compensation Committee; provided, however, that the minimum may not be reduced and the maximum may not be increased after the ninetieth (90th) day of the 2017 calendar year.

 

ARTICLE VII

CALCULATION OF PERFORMANCE UNIT PAYMENTS

Section 7.01

The amount payable to the Participants under the Performance Units is determined based on Cumulative Net Income, as shown in Table II below:

TABLE II

2017 PERFORMANCE GOALS

 

	
CUMULATIVE NET

 INCOME

	
Award as a % of

 Target Award

	
Award as a % of

CTBI Chief Executive

 Officer Salary

	
Award as a % of CTB CEO

Salary

	
Award as a %

of Salary of All

Other

Members of

the Executive

 Committee

	
90% of Target Cumulative Net Income (Minimum)

	
25%

	
10.0%

	
7.50%

	
5.00%

	
93% of Target Cumulative

Net Income

	
50%

	
20.0%

	
15.0%

	
10.0%

	
96% of Target Cumulative

Net Income

	
75%

	
30.0%

	
22.5%

	
15.0%

	
Target Cumulative Net Income (Per Schedule 1)

	
100%

	
40.0%

	
30.0%

	
20.0%

	
103% of Target Cumulative Net Income

	
120%

	
48.0%

	
36.0%

	
24.0%

	
107% of Target Cumulative Net Income

	
135%

	
54.0%

	
40.5%

	
27.05%

	
110.0% of Target Cumulative Net Income

(Maximum)

	
150%

	
60.0%

	
45.0%

	
30.0%

ARTICLE VIII

MISCELLANEOUS PROVISIONS

Section 8.01

The Compensation Committee may elect to remove unusual, extraordinary or non-recurring items from the calculation of Cumulative Net Income.

Section 8.02

Payments pursuant to the Performance Units shall be subject to recoupment by the Company to the extent required by applicable laws and regulations.

Section 8.03

The Company shall not merge into or consolidate with another entity or sell substantially all of its assets to another entity unless such other entity shall become obligated to perform the terms and conditions hereof relating to any amounts earned under Performance Units but not yet paid to the Participant.

SCHEDULE A

2017 Plan

CUMULATIVE NET INCOME TARGETS

	
CUMULATIVE NET INCOME TARGETS

	
% OF UNITS EARNED

	
$138 Million

	
25%

	
$142 Million

	
50%

	
$147 Million

	
75%

	
$153 Million

	
100%

	
$158 Million

	
120%

	
$164 Million

	
135%

	
$168 Million

	
150%

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