Document:

first security 8k 9-16-05 ex 10-1

    Exhibit
      10.1

    
 

    SALARY
      CONTINUATION AGREEMENT

     

    THIS
      SALARY CONTINUATION AGREEMENT
      (“Agreement”) is made and entered into on the _______ day of ______________,
      2005, to be effective as of ____________, 2005, by and between FIRST
      SECURITY BANK OF LEXINGTON, INC.,
      a
      Kentucky corporation, with its principal office and place of business located
      at
      318 East Main Street, Lexington, Kentucky 40507 (the “Bank”), and _____________________,
      an
      individual residing at _____________________________, Lexington, Kentucky 405__
      (the “Employee”).

     

    RECITALS

     

    Employee
      is employed by Bank in the position of _________________________of the Bank.
      To
      provide an element of stability, the Bank desires to provide for the
      continuation of the Employee’s compensation and other benefits of employment in
      the event of a change in control of the Bank coupled with the Employee’s actual
      or constructive termination of employment. The Bank and the Employee mutually
      desire to enter into this Agreement in order to set forth the specific terms
      of
      the Employee’s severance arrangement in consideration of the Employee’s
      continued employment and general release; provided, however, nothing herein
      shall be construed as a contract of employment for a specific term and the
      Employee remains employed by the Bank “at will”.

     

    NOW,
      THEREFORE, for and in consideration of the premises and the mutual covenants,
      agreements and undertakings of the parties hereinafter set forth, the Bank
      and
      the Employee do hereby agree
      as
      follows:

     

    
      	
              1.

            	
              Salary
                Continuation.
                If, within one (1) year after a Change in Control (i) Bank shall
                terminate
                Employee’s employment with Bank without Good Cause, or (ii) Employee shall
                voluntarily terminate such employment with Good Reason, the following
                provisions shall apply: 

            

    

     

    
      	 	
              a.

            	
              Bank
                shall pay Employee an amount in a single lump sum equal to 1/12 of
                the
                Employee’s annualized base salary (at the rate most recently determined)
                times ___________.

            

    

     

    
      	 	
              b.

            	
              The
                amount described in paragraph 1.a. shall be paid no later than 30
                days
                following the Employee’s termination of
                employment.

            

    

     

    
      	 	
              c.

            	
              Employee
                shall receive any and all benefits accrued under any benefit plan
                and for
                purposes of each such plan, Employee’s employment shall be deemed to have
                terminated by reason of retirement. Employee shall be fully vested
                in each
                and every retirement plan, including, but not limited to the Bank’s
                “401(k)” plan, sponsored by Bank.

            

    

     

    
      	 	
              d.

            	
              Employee
                and his dependents shall continue to be covered by and participate
                in all
                health, dental, and life insurance plans or arrangements made available
                by
                Bank in which Employee or his dependents were participating immediately
                prior to the date of his termination as if he continued to be an
                employee
                of Bank for

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    that
      period of time following his termination of employment that shall end on the
      first to occur of (i) the expiration of the _______-month period following
      the Employee’s termination of employment, or (ii) the date such coverage is
      available for Employee and his dependents through a subsequent employer (the
      “Period of Coverage”). Employee and his dependents shall participant in such
      coverages on the same terms and conditions as active employees, including,
      contributing the same amount to participate in such coverages as is contributed
      by active employees. If
      participation in any one or more of such plans and arrangements is not possible
      under the terms thereof, Bank will provide substantially identical benefits
      to
      Employee and his dependents, provided, however, the Bank shall not be
      responsible to pay for such coverage to the extent the cost of providing such
      coverage shall exceed 120% of the Bank’s cost of providing like coverage to
      active employees. For purposes of the preceding sentence, the 120% shall be
      measured separately for each benefit provided outside the Bank’s plan.
      Employee’s and his dependents’ rights to continuation of coverage under any
      group health plan of the Bank pursuant to Section 4980B of the Internal Revenue
      Code of 1986, as amended (“Code”) (“COBRA”) shall commence at the end of the
      Period of Coverage, and Employee shall participate in COBRA coverage on the
      same
      terms and conditions as any other qualified beneficiary, including payment
      of
      the full cost. The maximum length of any dependent’s coverage shall be
      determined by the qualifying event that immediately precedes the dependent’s
      commencement of continuation coverage, and any subsequent qualifying
      event.

     

    
      	 	
              e.

            	
              No
                payments to or with respect to Employee under this Agreement during
                the
                ___________ months following the Employee’s termination of employment
                shall be reduced by any amount Employee or his dependents, spouse
                or
                beneficiary may earn or receive from employment with another employer
                or
                from any other source.

            

    

     

    
      	
              2.

            	
              Term
                of Agreement.
                This Agreement shall terminate upon the later to occur of (i) the
                second anniversary of the effective date of the Agreement, or
                (ii) the first anniversary of a Change in
                Control.

            

    

     

    
      	
              3.

            	
              Change
                in Control Provisions.
                

            

    

     

    
      	 	
              a.

            	
              For
                purposes of this Section 3, except for 3.b.(ii)(B), “Company” shall mean,
                with respect to a particular transaction, one of the following:
                (i) the Bank; (ii) any entity that owns more than fifty
                percent
                (50%) of the total fair market value and total voting power of the
                Bank
                (“Majority
                Shareholder”);
                or (iii) any entity in a chain of entities in which each entity
                is a
                Majority Shareholder of the next entity in the chain, with one entity
                in
                the chain ultimately being a Majority Shareholder of the Bank. For
                the
                purposes of 3.b.(ii)(B), the Company shall mean of the entities listed
                in
                the immediately preceding sentence, only that entity that has no
                corporate
                Majority Shareholder.

            

    

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

    
      	 	
              b.

            	
              For
                purposes of this Section 3, “Person” shall mean (i) any person, or
                (ii) a group of more than one person where the surrounding
                circumstances demonstrate that the persons are acting as a group.
                Without
                limiting the generality of the foregoing, persons shall be considered
                to
                be acting as a group if they are owners of an entity that enters
                into a
                merger, consolidation, purchase or acquisition of stock, or similar
                business transaction with the
                Company.

            

    

     

    
      	 	
              c.

            	
              For
                the purposes of this Section 3, “Gross Fair Market Value” shall mean the
                value of an asset (or assets) determined without regard to any liabilities
                associated with the asset (or
                assets).

            

    

     

    
      	 	
              d.

            	
              For
                purposes of this Agreement, “Change in Control” shall be interpreted and
                applied in accordance with Code Section 409A and any and all guidance
                issued, now or hereafter, with respect thereto by the United States
                Department of the Treasury.

            

    

     

    
      	 	
              e.

            	
              A
                “Change in Control” shall occur when:

            

    

     

    
      	 	
              (i)

            	
              There
                is a change in ownership in the Company. A “change in ownership” shall
                occur when a Person acquires ownership of more than fifty percent
                (50%) of
                the fair market value or voting power of the Company, provided:
                (A) the fifty percent (50%) ownership calculation takes into
                consideration stock previously held by the Person; (B) if
                a Person
                already owns more than fifty percent (50%) of the fair market value
                or
                voting power of the Company, the Person’s acquisition of more stock shall
                not trigger a change in ownership; and (C) a change in ownership
                shall not occur if there is no stock in the Company outstanding after
                the
                transaction that results in the transfer of stock; or
                

            

    

     

    
      	 	
              (ii)

            	
              There
                is a change in the effective control of the Company. A “change in
                effective control” shall occur when, within a twelve month period:
                (A) a Person who does not already own thirty-five percent
                (35%) of
                the Company acquires thirty-five percent (35%) or more of the total
                voting
                power of the Company; or (B) the majority of the Company’s directors
                are replaced, but only if the replacement is hostile—that is, the change
                in the majority is not endorsed by a majority of the corporate directors
                in place immediately prior to the replacement; or
                

            

    

     

    
      	 	
              (iii)

            	
              There
                is a transfer of a substantial portion of corporate assets. A “transfer of
                a substantial portion of corporate assets” occurs when a Person acquires,
                within a twelve-month period, Company assets having a Gross Fair
                Market
                Value equal to forty percent (40%) or more of the total Gross Fair
                Market
                Value of Company assets owned prior to such acquisition(s); provided,
                however, a transfer of a substantial portion of corporate assets
                does not
                occur if the Company transfers ownership of assets to (A) a
                Person
                who is a shareholder of the Company immediately prior to the asset
                transfer in exchange for or with respect to the shareholder’s
                stock;

            

    

     

    
      
        
        

      

      
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    (B) an
      entity of which Company owns, directly or indirectly, fifty percent (50%) or
      more of the total value or voting power; (C) a Person who owns fifty
      percent (50%) or more of the total value or voting power of the Company; or
      (D) an entity of which fifty percent (50%) or more of the total value
      or
      voting power is owned, directly or indirectly, by a Person who owns 50% or
      more
      of the total value or voting power of the Company. For purposes of this Section
      3.e.(iii), except as otherwise provided, a Person’s status is determined
      immediately after the transfer of the assets.

     

    
      	
              4.

            	
              Definition
                of Good Cause.
                “Good Cause” shall mean:

            

    

     

    
      	 	
              a.

            	
              Employee’s
                conviction of any felony whatsoever or any other criminal violation
                involving dishonesty, fraud, or breach or
                trust;

            

    

     

    
      	 	
              b.

            	
              Employee’s
                willful engagement in any misconduct in the performance of his duty
                that
                materially injures Bank;

            

    

     

    
      	 	
              c.

            	
              Employee’s
                performance of any act which, if known to the customers or clients
                of Bank
                would materially and adversely impact on the business of Bank;
                

            

    

     

    
      	 	
              d.

            	
              Employee’s
                willful and substantial nonperformance of assigned duties; provided
                that
                such nonperformance has continued more than five (5) calendar days
                after
                Bank has given written notice of such nonperformance and of its intention
                to terminate Employee’s employment because of such nonperformance;
                

            

    

     

    
      	 	
              e.

            	
              Employee’s
                failure or refusal to follow the lawful instructions of the President
                and
                Chief Executive Officer of the Bank, if such failure or refusal continues
                for five (5) calendar days after the Bank delivers to Employee a
                written
                notice stating the instructions which Employee has failed or refused
                to
                follow; 

            

    

     

    
      	 	
              f.

            	
              Inability
                of the Bank to secure a bond covering Employee or a directive to
                the Bank
                by any governmental regulatory agency to terminate Employee’s employment
                or remove Employee from his current
                position.

            

    

     

    
      	
              5.

            	
              Definition
                of Good Reason.
                “Good Reason” shall exist if, without Employee’s express written
                consent:

            

    

     

    
      	 	
              a.

            	
              Bank
                shall assign to Employee duties of a nonexecutive nature or for which
                Employee is not reasonably equipped by his skills and
                experience;

            

    

     

    
      	 	
              b.

            	
              Bank
                shall reduce the salary of Employee, or materially reduce the amount
                of
                paid vacation to which he is entitled, or his fringe benefits and
                perquisites;

            

    

     

    
      	 	
              c.

            	
              Bank
                shall require Employee to relocate his principal business office
                or his
                principal place of residence outside the Lexington, Kentucky Metropolitan
                Statistical Area (the “Area”) or assign Employee duties that would
                reasonably require such relocation;

            

    

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

    
      	 	
              d.

            	
              Bank
                shall require Employee, or assign duties to Employee which would
                reasonably require him, to spend more than thirty (30) normal working
                days
                away from the Area during any consecutive twelve-month period;
                

            

    

     

    
      	 	
              e.

            	
              Bank
                shall fail to provide office facilities, secretarial services, and
                other
                administrative services to Employee which are substantially equivalent
                to
                the facilities and services provided to Employee immediately prior
                to the
                Change in Control; or

            

    

     

    
      	 	
              f.

            	
              Bank
                shall terminate bonus and benefit plans or arrangements, or reduce
                or
                limit Employee’s participation therein relative to the level of
                participation of other executives of similar rank, to such an extent
                as to
                materially reduce the aggregate value of Employee’s bonus compensation and
                benefits below their aggregate value as of the date immediately prior
                to
                the Change in Control.

            

    

     

    
      	
              6.

            	
              Employee’s
                Release.
                

            

    

     

    
      	 	
              a.

            	
              In
                consideration of the promises set forth herein, the sufficiency of
                which
                consideration is hereby acknowledged, Employee hereby releases and
                forever
                discharges the Bank, and its directors, affiliates, officers, agents
                and
                employees, from any and all causes of action or claims of any type
                that
                Employee might have from the beginning of the world through the date
                of
                Employee’s execution of this Agreement, arising or which could have arisen
                out of Employee’s employment relationship with the Bank, including but not
                limited to causes of action or claims of any type arising under the
                Age
                Discrimination In Employment Act of 1967, 29 USC §626 et seq. (“ADEA”),
                Title VII of the Civil Rights Act of 1964, 42 USC §2000e et seq. (“Title
                VII”), the Civil Rights Act of 1866, 42 USC §1981, the National Labor
                Relations Act, 29 USC §151 et seq., the Fair Labor Standards Act, 29 USC
                §201 et seq., the Americans With Disabilities Act, 42 USC §12101 et seq.
                (“ADA”), the Employee Retirement Income Security Act of 1974, 29 USC §1001
                et seq., the Kentucky Human Rights Act, and any other Federal, state
                or
                local statute, law, ordinance, regulation or order that may give
                rise to
                any cause of action including, but not limited to, claims of age
                or sex
                discrimination or breach of contract and claims for back pay, earned
                or
                accrued vacation pay, bonus, earned commissions, damages and any
                other
                relief or remedy at law or at equity. Employee further covenants
                and
                agrees never to institute directly or indirectly or to participate
                in
                (unless otherwise required by law) any action or proceeding of any
                kind
                against the Bank, its directors, affiliates, officers, agents and
                employees, based on or related to his employment relationship with
                the
                Bank, including, but not limited to, an action asserting that the
                Bank
                discriminated against him on the basis of age or sex or an action
                asserting breach of contract, it being understood that there is no
                intent
                herein to interfere with the Equal Employment Opportunity Commission’s
                right to enforce Title VII, the ADA, or the
                ADEA.

            

    

     

    
      	 	
              b.

            	
              The
                Agreement is a full, complete and final settlement by Employee of
                any and
                all claims, actions, causes of action, damages or costs against the
                Bank
                resulting from or pertaining to Employee’s employment the
                Bank.

            

    

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

    
      	 	
              c.

            	
              The
                Agreement shall supersede and replace any and all prior written or
                oral
                agreements previously entered into between the Employee and the Bank
                and
                such prior agreements shall be null and void and of no
                consequence.

            

    

     

    
      	 	
              d.

            	
              Employee
                shall have up to twenty-one (21) days from the date the Agreement
                is
                presented to Employee to sign the Agreement. If Employee signs the
                Agreement, Employee shall have seven (7) days from the date Employee
                signs
                the Agreement to revoke the Agreement. Employee shall not be entitled
                to
                any benefits contained herein until the seven (7) day revocation
                period
                has expired. This Agreement was presented to Employee on
                _______________.

            

    

     

    
      	 	
              e.

            	
              Except
                to the extent required to be disclosed by state or federal securities
                law,
                the Agreement and all its terms and provisions are strictly confidential
                and shall not be divulged or disclosed in any way to any person other
                than
                Employee’s spouse and legal counsel if Employee so desires, and Employee
                will protect the confidentiality of the Agreement in all regards.
                Should
                Employee choose to divulge the terms and conditions of the Agreement
                to
                Employee’s spouse or legal counsel, Employee shall ensure that they will
                be similarly bound to protect its confidentiality and that a breach
                of
                this paragraph by Employee’s spouse or legal counsel shall be considered a
                breach of this paragraph by
                Employee.

            

    

     

    
      	 	
              f.

            	
              Employee
                and the Bank have executed the Agreement voluntarily, with full knowledge
                of its significance. Both parties have had full opportunity to consult
                their respective legal counsel, as well as other persons of their
                choosing, before executing the Agreement. Employee acknowledges that
                he
                has carefully read the entire Agreement, that a copy of the Agreement
                was
                available to him prior to execution, that he knows and understands
                the
                provisions of the Agreement, and that he has signed the Agreement
                as his
                own free act and deed.

            

    

     

    
      	
              7.

            	
              Nondisclosure
                of Confidential Information.
                Employee shall not at any time or in any manner, directly or indirectly,
                use or disclose to any party any confidential information or proprietary
                data of Bank, or any of its affiliates, learned or obtained by Employee
                while an employee of Bank, except (i) as required by judicial
                or
                administrative
                process; (ii) after the confidential information has become
                generally
                available to the public through no breach of this Agreement by Employee;
                or (iii) with the prior written consent of Bank. In the event
                Employee violates this Section 7, and such violation is detrimental
                to the
                Bank, Bank shall be entitled to pursue all remedies at law or in
                equity in
                any action or proceeding to enforce this Section 7. For purposes
                of this
                Agreement, “confidential information” means material information of Bank,
                or its affiliates, disclosed to or known by Employee as a consequence
                of
                Employee’s employment with Bank and not generally known in the financial
                services industry, that directly relates to Bank’s business and that is
                detrimental to the Bank. Employee has carefully read and considered
                the
                provisions of this Section 7, and, having done so, agrees that the
                restriction set forth in this Section 7 is fair and reasonable and
                reasonably required for the protection of Bank’s
                interests.

            

    

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

    
      	
              8.

            	
              Compliance
                with FDIC Regulations.
                It is the intention of the parties that none of the payments to which
                Employee is entitled under this Agreement will constitute a “golden
                parachute payment” within the meaning of 12 USC Section 1828(k)(3) or
                implementing regulations of the FDIC, the payment of which is prohibited.
                Any payments made by Bank or any holding company of Bank to or for
                the
                benefit of Employee pursuant to this Agreement, or otherwise, are
                subject
                to and conditioned upon their compliance with 12 USC Section 1828(k)
                and
                any regulations promulgated thereunder.

            

    

     

    
      	
              9.

            	
              Springing
                Rabbi Trust.
                Notwithstanding anything in this Agreement (or the Trust Agreement)
                to the
                contrary, upon a Change in Control, if Employee is a “key employee” (as
                defined in Code section 416(i)) so that his payout (as described
                in
                Section 1.a. of this Agreement is delayed as described in Section
                18.e. of
                this Agreement, the Bank shall (i) establish a trust (if not
                already
                established) as described in subsection b. below, and (ii) maintain
                in the Trust an amount of money which is at all times at least equal
                to
                its obligations under this Agreement to Employee (as well as any
                other key
                employee with a similar agreement), by making sufficient contributions
                to
                the Trust, immediately upon such Change in Control in an amount equal
                to
                the Bank’s total liabilities to such Employee and all other key
                employees.

            

    

     

    The
      obligation of the Bank to provide benefits pursuant to this Agreement shall
      be
      the sole unsecured promise of the Bank with respect to this Agreement.
      Notwithstanding the foregoing, prior to any Change in Control, the Bank may
      establish a trust, pursuant to a Trust Agreement, for the purpose of setting
      aside funds to provide for the payment of benefits under this Agreement.
      However, the assets of the Trust shall at all time remain subject to the claims
      of the general creditors of the Bank, and the Employee shall not have any claim
      or right with respect to the assets held in the Trust, except to the extent
      that
      the Employee is a general creditor of the Bank.

     

    For
      purposes of this Section 9, the following words and phrases shall have the
      following meanings:

     

    
      	 	
              a.

            	
              Trust:
                The revocable grantor/rabbi trust established by the Bank for purposes
                of
                making payments under certain of the Bank’s nonqualified plans of deferred
                compensation. The Bank shall have the discretion to determine whether
                or
                not a Trust shall be established in connection with any agreement
                or
                nonqualified plan, including this Agreement; provided, however, in
                the
                event of a Change in Control, such discretion shall be removed from
                the
                Bank, and a Trust shall be established (if not already in existence)
                and
                fully funded in accordance with this Section
                9.

            

    

     

    
      	 	
              b.

            	
              Trust
                Agreement:
                An agreement entered into between the Trustee and the Bank providing
                for
                trust services in connection with a grantor trust that may be established
                in connection with this Agreement. As of the effective date of this
                Agreement, the Trust Agreement is _______________________________Trust,
                effective ___________, and as may be amended from time to
                time.

            

    

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

    
      	 	
              c.

            	
              Trustee:
                That corporate entity having trust powers that is appointed by the
                Bank
                prior to a Change in Control to perform trust services in connection
                with
                the Agreement, whose responsibilities shall be governed by the Agreement
                and by the Trust Agreement.

            

    

     

    
      	
              10.

            	
              Out
                of Pocket Expenses.
                Bank shall pay to Employee all out-of-pocket expenses, including
                attorneys’ fees, incurred by Employee in connection with the successful
                enforcement by Employee of this
                Agreement.

            

    

     

    
      	
              11.

            	
              Survival.
                This Agreement is not assignable; however, it shall be binding upon
                and
                shall inure to the benefits of the parties hereto and their respective
                personal representatives, heirs, successors and
                assigns.

            

    

     

    
      	
              12.

            	
              No
                Employment Contract.
                Nothing
                herein shall be construed as a contract of employment for a specific
                term
                and the Employee remains employed by the Bank “at
                will”.

            

    

     

    
      	
              13.

            	
              Applicable
                Law.
                This Agreement is entered into in, and shall be governed by and construed
                in accordance with the laws of, the Commonwealth of
                Kentucky.

            

    

     

    
      	
              14.

            	
              Severability.
                If any clause, phrase, provision or portion of this Agreement or
                the
                application thereof to any person or circumstance shall be invalid
                or
                unenforceable under any applicable law, such event shall not affect
                or
                render invalid or unenforceable the remainder of this Agreement and
                shall
                not affect the application of any clause, provision, or portion hereof
                to
                other person or circumstances.

            

    

     

    
      	
              15.

            	
              Headings.
                The headings in this Agreement are inserted for reference and convenience
                only, are not to be considered in the construction of the provisions
                hereof, and shall not in any way limit the scope or modify the substance
                or context of any section hereof.

            

    

     

    
      	
              16.

            	
              Amendment.
                No modification, amendment or alteration of the terms of this Agreement
                shall be binding or effective unless the same be in writing, dated
                subsequent to the date hereof, and duly executed by or on behalf
                of both
                of the parties to this Agreement.

            

    

     

    
      	
              17.

            	
              Notices.
                Any notice required or permitted to be given by any provision of
                this
                Agreement shall be in writing and shall be delivered personally or
                sent by
                registered or certified mail to the Employee or to the Chairman of
                the
                Board of the Bank, as the case may be, to the address of the Employee
                or
                of the Bank, as the case may be, at the address set forth in the
                introductory paragraph of this Agreement, or to such other address
                as
                either party hereto may from time to time specify to the other party
                by
                written notice given as herein provided. Any such notice shall be
                deemed
                to be delivered, given and received for all purposes as of the date
                so
                .
                delivered,
                if delivered personally, or as of the date on which the name was
                properly
                deposited in a regularly maintained receptacle for deposit of United
                States Mail, postage and charges prepaid, if sent by registered or
                certified mail.

            

    

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

    
      	
              18.

            	
              Intent
                to Comply with American Jobs Creation Act.
                To the extent that this Agreement is considered a deferred compensation
                plan, as contemplated by Code Section 409A, this Section 18 shall
                apply.
                It is intended that this Agreement shall comply with Code Section
                409A and
                all provisions contained herein shall be read and construed to so
                comply.
                

            

    

     

    
      	 	
              a.

            	
              All
                deferrals of compensation with respect to Employee’s service performed
                after December 31, 2004, and as described in this Agreement, shall
                be
                governed by the terms of this Agreement.

            

    

     

    
      	 	
              b.

            	
              To
                the extent so required, any deferral election made by Employee or
                deemed
                to be made by Employee, with respect to compensation payable on services
                performed in a calendar year shall be made before the end of the
                preceding
                calendar year; provided, that in the case of performance based
                compensation, the deferral election may be made not later than 6
                months
                before the end of the performance period. Employee shall be considered
                to
                have made all deferral elections under this Agreement in accordance
                with
                the preceding sentence, and shall not be permitted nor deemed to
                be
                permitted to modify any deferral election.

            

    

     

    
      	 	
              c.

            	
              Bank
                will not accept transfers under this Agreement from any other nonqualified
                deferred compensation plan in which Employee might participate.
                

            

    

     

    
      	 	
              d.

            	
              No
                rabbi trust that might be used to pay amounts due under this Agreement,
                nor the assets held by such trust, shall be located outside the United
                States. In addition, no such trust shall provide for the assets thereof
                to
                become restricted to the provision of benefits under the Agreement,
                or
                distributed to Employee, as a result of a change in the financial
                health
                or condition of the Bank. Nothing herein shall be construed to require
                the
                Bank or entitle Employee to have amounts due him under this Agreement
                paid
                from a rabbi trust. 

            

    

     

    
      	 	
              e.

            	
              In
                the event that Employee is considered to be a key employee (as defined
                in
                §416(i) of the Code without regard to paragraph (5) thereof), distribution
                to Employee may not be made earlier than the date which is 6 months
                after
                Employee’s termination of employment. The preceding sentence shall not
                apply to the extent that none of the stock of the Bank is publicly
                traded
                on an established securities market or otherwise. 

            

    

     

    
      	 	
              f.

            	
              The
                timing of any distributions pursuant to Employee’s deferral election, if
                any, shall not be accelerated. Notwithstanding anything contained
                in this
                Section 18, Employee shall not be permitted to alter the payment
                of his
                severance pay.

            

    

     

    IN
      WITNESS WHEREOF,
      the
      parties hereto have executed this Agreement on the date, month and year first
      above written.

     

    EMPLOYEE:

     

    

     

    

     

    ___________________________________

     

    [INSERT
      NAME]

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

    

     

    

     

    BANK:

     

    

     

    

     

    BY:________________________________

     

    [INSERT
      NAME AND TITLE]

     

     

    ATTEST:

     

     

    

     

    BY:
      ___________________________________

     

    

     

    TITLE:
      ________________________________

     

    

     

    15167169.1

    9/16/2005

     

     

     

    
      10first security 8k 9-16-05 ex 10-2

    Exhibit
      10.2

     

    [First
      Security Bank Letterhead]

     

    September
      15, 2005

     

    

    R.
      Douglas Hutcherson

    2101
      Brevard Court

    Lexington,
      Kentucky 40513

    

    Dear
      Doug:

    

    We
      are
      parties to a certain Employment Agreement (herein so called), dated December
      1,
      2003, pursuant to which you are employed as the President and CEO of First
      Security Bancorp, Inc. and First Security Bank of Lexington, Inc. Capitalized
      terms used herein that are defined in that Employment Agreement have the
      meanings given them in the Employment Agreement. 

     

    As
      you
      know, the Nomination, Compensation & Corporate Governance Committee of the
      Board of Directors is in the process of reviewing the severance arrangements
      of
      our executive officers. In the course of our review, we determined the following
      revisions/clarifications to your Employment Agreement are appropriate:

     

    Section
      3.B.:
      We have
      not implemented the split dollar life insurance arrangements contemplated by
      your Employment Agreement and agree to eliminate this requirement from your
      Employment Agreement. In place of this requirement, Bank has obtained life
      insurance benefits for you and agrees to continue to provide you life insurance
      benefits in the amount of $250,000, as currently in place, during the term
      of
      your Employment Agreement. 

     

    Section
      5:
      The
      stock options granted to you pursuant to your Employment Agreement are subject
      to the terms and conditions of the Stock Award Plan. To the extent the Board
      of
      Directors, or committee administering the Stock Award Plan, accelerates or
      adjusts outstanding options granted under the Stock Award Plan, in accordance
      with the terms of the Stock Award Plan, your options shall be accelerated and
      adjusted accordingly. Nothing in this paragraph shall be construed in a way
      that
      would cause the proportion of your options to decrease, except for an issuance
      of new shares by Bank.

     

    Section
      6.A.:
      If Bank
      terminates your Employment Agreement, and your employment thereunder, pursuant
      to Section 6.A. of the Employment Agreement prior
      to
      a Change
      of Control, you will be entitled to severance pay under Section 8.A., in
      accordance with Section 8, subject to compliance with the continuing covenants
      under Sections 9 and 10. If Bank terminates the Employment Agreement, and your
      employment thereunder, pursuant to Section 6.A. of the Employment Agreement
      at
      or
      after
      a Change
      of Control, you will be entitled to severance pay under Section 8.B., in
      accordance with Section 8, subject to compliance with the continuing covenants
      under Sections 9 and 10. You will not be entitled to severance pay under both
      8.A. and 8.B.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Section
      6.D. and Section 8:
      In
      order to comply with the American Jobs Creation Act of 2004 (“AJCA”), we agree
      to amend the definition of a “Change of Control” under the Employment Agreement
      and the severance pay arrangements as set out in Exhibit A attached hereto.
      Bank
      also agrees that it will abide by the rabbi trust provisions set forth in
      Exhibit A.

     

    Section
      8.D.:
      You and
      the Bank acknowledge that the discretion permitted the Bank in Section 8.D.
      may
      be prohibited by the AJCA. In consideration of the amendments made to your
      Employment Agreement, and to have a definitive agreement, you agree to the
      Release set forth in Exhibit A. In exchange therefore, Bank agrees to eliminate
      the provision regarding discretion. 

     

    Section
      9:
      Bank
      acknowledges that it may be necessary, if you are a “key employee” at the time
      an amount is payable to you pursuant to Section 8 of the Employment Agreement,
      to delay a portion of your payment for six (6) months. Bank agrees that only
      that part of your severance package and those payments that must be delayed
      under the AJCA will be delayed and that all other payments and benefits will
      be
      as provided in the Employment Agreement prior to the enactment of the AJCA.
      As a
      specific example, though not limited to this example, Bank agrees that the
      “Non-compete Term” described in Section 9.A. shall commence at the time of your
      termination of employment and shall not be extended an additional six (6)
      months.

     

    To
      evidence your agreement to the foregoing, please sign this letter in the space
      provided below. Upon your execution of this letter, the foregoing terms and
      Exhibit A will become a part of your Employment Agreement and your Employment
      Agreement will be deemed to be modified accordingly. 

     

    Sincerely
      yours,

     

    FIRST
      SECURITY BANK OF LEXINGTON, INC.

     

    

      By
         /s/
        Julian E.
        Beard                           

                                          Julian
        Beard,
        Chairman

       

    

     

    FIRST
      SECURITY BANCORP, INC.

     

    

      By
         /s/
        Julian E.
        Beard                           

                                          Julian
        Beard,
        Chairman

       

    

     

    Agreed:

     

    /s/
      R.
      Douglas Hutcherson                          Date:
      September
      15, 2005                 

    R.
      Douglas Hutcherson

     

    

       

    

    15167168.1

    

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    EXHIBIT
      “A” TO 

    LETTER
      AGREEMENT FOR R. DOUGLAS HUTCHERSON

     

    Effective
      September 15, 2005, the following additional provisions are added to and made
      a
      part of the Letter Agreement (and the Employment Agreement) between R. Douglas
      Hutcherson and First Security Bancorp, Inc. and First Security Bank of
      Lexington, Inc. To the extent the provisions set forth in this Exhibit A are
      contrary to the provisions in the Employment Agreement, the provisions in this
      Exhibit A shall control.

     

    
      	
              1.

            	
              Change
                in Control Provisions.
                

            

    

     

    
      	 	
              a.

            	
              For
                purposes of this Section 1, except for 1.b.(ii)(B), “Company” shall mean,
                with respect to a particular transaction, one of the following:
                (i) First Security Bancorp, Inc. and First Security Bank of
                Lexington, Inc. (“Bank”); (ii) any entity that owns more than fifty
                percent (50%) of the total fair market value and total voting power
                of the
                Bank (“Majority
                Shareholder”);
                or (iii) any entity in a chain of entities in which each entity
                is a
                Majority Shareholder of the next entity in the chain, with one entity
                in
                the chain ultimately being a Majority Shareholder of the Bank. For
                the
                purposes of 1.b.(ii)(B), the Company shall mean of the entities listed
                in
                the immediately preceding sentence, only that entity that has no
                corporate
                Majority Shareholder. 

            

    

     

    
      	 	
              b.

            	
              For
                purposes of this Section 1, “Person” shall mean (i) any person, or
                (ii) a group of more than one person where the surrounding
                circumstances demonstrate that the persons are acting as a group.
                Without
                limiting the generality of the foregoing, persons shall be considered
                to
                be acting as a group if they are owners of an entity that enters
                into a
                merger, consolidation, purchase or acquisition of stock, or similar
                business transaction with the Company.

            

    

     

    
      	 	
              c.

            	
              For
                the purposes of this Section 1, “Gross Fair Market Value” shall mean the
                value of an asset (or assets) determined without regard to any liabilities
                associated with the asset (or assets).

            

    

     

    
      	 	
              d.

            	
              For
                purposes of this Letter Agreement and the Employment Agreement, “Change in
                Control” shall be interpreted and applied in accordance with Code Section
                409A and any and all guidance issued, now or hereafter, with respect
                thereto by the United States Department of the Treasury.
                

            

    

     

    
      	 	
              e.

            	
              A
                “Change in Control” shall occur when:

            

    

     

    
      	 	
              i.

            	
              There
                is a change in ownership in the Company. A “change in ownership” shall
                occur when a Person acquires ownership of more than fifty percent
                (50%) of
                the fair market value or voting power of the Company, provided:
                (A) the fifty percent (50%) ownership calculation takes into
                consideration stock previously held by the Person; (B) if
                a Person
                already owns more than fifty percent (50%) of the fair market value
                or
                voting power of the Company, the Person’s acquisition of more stock shall
                not trigger a change in ownership; and (C) a change in ownership
                shall not occur if there is no

            

    

     

    
      
        
          1

        

        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    stock
      in
      the Company outstanding after the transaction that results in the transfer
      of
      stock; or

     

    
      	 	
              iii.

            	
              There
                is a change in the effective control of the Company. A “change in
                effective control” shall occur when, within a twelve month period:
                (A) a Person who does not already own thirty-five percent
                (35%) of
                the Company acquires thirty-five percent (35%) or more of the total
                voting
                power of the Company; or (B) the majority of the Company’s directors
                are replaced, but only if the replacement is hostile—that is, the change
                in the majority is not endorsed by a majority of the corporate directors
                in place immediately prior to the replacement; or
                

            

    

     

    
      	 	
              iv.

            	
              There
                is a transfer of a substantial portion of corporate assets. A “transfer of
                a substantial portion of corporate assets” occurs when a Person acquires,
                within a twelve-month period, Company assets having a Gross Fair
                Market
                Value equal to forty percent (40%) or more of the total Gross Fair
                Market
                Value of Company assets owned prior to such acquisition(s); provided,
                however, a transfer of a substantial portion of corporate assets
                does not
                occur if the Company transfers ownership of assets to (A) a
                Person
                who is a shareholder of the Company immediately prior to the asset
                transfer in exchange for or with respect to the shareholder’s stock;
                (B) an entity of which Company owns, directly or indirectly,
                fifty
                percent (50%) or more of the total value or voting power; (C) a
                Person who owns fifty percent (50%) or more of the total value or
                voting
                power of the Company; or (D) an entity of which fifty percent
                (50%)
                or more of the total value or voting power is owned, directly or
                indirectly, by a Person who owns 50% or more of the total value or
                voting
                power of the Company. For purposes of this Section 1.e.(iii), except
                as
                otherwise provided, a Person’s status is determined immediately after the
                transfer of the assets.

            

    

     

    
      	
              2.

            	
              Springing
                Rabbi Trust.
                Notwithstanding anything in this Letter Agreement or the Employment
                Agreement (or the Trust Agreement) to the contrary, upon a Change
                in
                Control, if you are a “key employee” (as defined in Code section 416(i))
                so that your payout (as described in Section 8 of the Employment
                Agreement) is delayed as described in Section 4 of this Letter Agreement,
                to the extent so doing does not foul any grandfathering of your severance
                benefits, the Bank shall (i) establish a trust (if not already
                established) as described in subsection b. below, and (ii) maintain
                in the Trust an amount of money which is at all times at least equal
                to
                its obligations under this Letter Agreement and the Employment Agreement
                to you (as well as any other key employee with a similar agreement),
                by
                making sufficient contributions to the Trust, immediately upon such
                Change
                in Control in an amount equal to the Bank’s total liabilities to you and
                all other key employees.

            

    

     

    
      	 	
              a.

            	
              The
                obligation of the Bank to provide benefits pursuant to this Letter
                Agreement and the Employment Agreement shall be the sole unsecured
                promise
                of the Bank with respect to this Letter Agreement and the Employment
                Agreement. Notwithstanding the foregoing, prior to any Change in
                Control,
                the Bank may establish a trust, pursuant to a Trust Agreement, for
                the
                purpose of setting aside funds to provide for the payment of benefits
                under this Agreement. However, the assets of the Trust shall at all
                time
                remain subject to the claims of the general creditors of the Bank,
                and you
                shall not have any claim or right

            

    

     

    
      
        
          2

        

        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    with
      respect to the assets held in the Trust, except to the extent that you are
      a
      general creditor of the Bank. 

     

    
      	 	
              b.

            	
              For
                purposes of this Section 2, the following words and phrases shall
                have the
                following meanings: 

            

    

     

    
      	 	
              i.

            	
              Trust:
                The revocable grantor/rabbi trust established by the Bank for purposes
                of
                making payments under certain of the Bank’s nonqualified plans of deferred
                compensation. The Bank shall have the discretion to determine whether
                or
                not a Trust shall be established in connection with any agreement
                or
                nonqualified plan, including this Letter Agreement and the Employment
                Agreement; provided, however, in the event of a Change in Control,
                such
                discretion shall be removed from the Bank, and a Trust shall be
                established (if not already in existence) and fully funded in accordance
                with this Section 2. 

            

    

     

    
      	 	
              ii.

            	
              Trust
                Agreement:
                An agreement entered into between the Trustee and the Bank providing
                for
                trust services in connection with a grantor trust that may be established
                in connection with this Letter Agreement. As of the effective date
                of this
                Letter Agreement, the Trust Agreement is First Security Bancorp,
                Inc. Key
                Employee Trust, effective ___________, and as may be amended from
                time to
                time. 

            

    

     

    
      	 	
              iii.

            	
              Trustee:
                That corporate entity having trust powers that is appointed by the
                Bank
                prior to a Change in Control to perform trust services in connection
                with
                the Letter Agreement and the Employment Agreement, whose responsibilities
                shall be governed by the Letter Agreement and the Employment Agreement
                and
                by the Trust Agreement.

            

    

     

    
      	
              3.

            	
              Your
                Release.

            

    

     

    
      	 	
              a.

            	
              In
                consideration of the promises set forth herein, the sufficiency of
                which
                consideration is hereby acknowledged, you hereby release and forever
                discharge the Bank, and its directors, affiliates, officers, agents
                and
                employees, from any and all causes of action or claims of any type
                that
                you might have from the beginning of the world through the date of
                your
                execution of this Letter Agreement, arising or which could have arisen
                out
                of your employment relationship with the Bank, including but not
                limited
                to causes of action or claims of any type arising under the Age
                Discrimination In Employment Act of 1967, 29 USC §626 et seq. (“ADEA”),
                Title VII of the Civil Rights Act of 1964, 42 USC §2000e et seq. (“Title
                VII”), the Civil Rights Act of 1866, 42 USC §1981, the National Labor
                Relations Act, 29 USC §151 et seq., the Fair Labor Standards Act, 29 USC
                §201 et seq., the Americans With Disabilities Act, 42 USC §12101 et seq.
                (“ADA”), the Employee Retirement Income Security Act of 1974, 29 USC §1001
                et seq., the Kentucky Human Rights Act, and any other Federal, state
                or
                local statute, law, ordinance, regulation or order that may give
                rise to
                any cause of action including, but not limited to, claims of age
                or sex
                discrimination or breach of contract and claims for back pay, earned
                or
                accrued vacation pay, bonus, earned commissions, damages and any
                other
                relief or remedy at law or at equity. You further covenant and agree
                never
                to institute directly or indirectly or to participate in (unless
                otherwise
                required by law) any action or
                proceeding

            

    

     

    
      
        
          3

        

        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    of
      any
      kind against the Bank, its directors, affiliates, officers, agents and
      employees, based on or related to your employment relationship with the Bank,
      including, but not limited to, an action asserting that the Bank discriminated
      against you on the basis of age or sex or an action asserting breach of
      contract, it being understood that there is no intent herein to interfere with
      the Equal Employment Opportunity Commission’s right to enforce Title VII, the
      ADA, or the ADEA. 

     

    
      	 	
              b.

            	
              The
                Letter Agreement and the Employment Agreement are a full, complete
                and
                final settlement by you of any and all claims, actions, causes of
                action,
                damages or costs against the Bank resulting from or pertaining to
                your
                employment with the Bank.

            

    

     

    
      	 	
              c.

            	
              The
                Letter Agreement and the Employment Agreement shall supersede and
                replace
                any and all prior written or oral agreements previously entered into
                between the you and the Bank and such prior agreements shall be null
                and
                void and of no consequence.

            

    

     

    
      	 	
              d.

            	
              You
                shall have up to twenty-one (21) days from the date the Letter Agreement
                is presented to you to sign the Letter Agreement. If you sign the
                Letter
                Agreement, you shall have seven (7) days from the date you sign the
                Letter
                Agreement to revoke the Letter Agreement. You shall not be entitled
                to any
                benefits contained herein until the seven (7) day revocation period
                has
                expired. This Letter Agreement was presented to you on September
                13,
                2005.

            

    

     

    
      	 	
              e.

            	
              Except
                to the extent required to be disclosed by state or federal securities
                law,
                the Letter Agreement and Employment Agreement and all their terms
                and
                provisions are strictly confidential and shall not be divulged or
                disclosed in any way to any person other than your spouse and legal
                counsel if you so desire, and you will protect the confidentiality
                of the
                Letter Agreement and the Employment Agreement in all regards. Should
                you
                choose to divulge the terms and conditions of the Letter Agreement
                and
                Employment Agreement to your spouse or legal counsel, you shall ensure
                that they will be similarly bound to protect their confidentiality
                and
                that a breach of this paragraph by your spouse or legal counsel shall
                be
                considered a breach of this paragraph by you.

            

    

     

    
      	 	
              f.

            	
              You
                and the Bank have executed the Letter Agreement voluntarily, with
                full
                knowledge of its significance. Both parties have had full opportunity
                to
                consult their respective legal counsel, as well as other persons
                of their
                choosing, before executing the Letter Agreement. You acknowledge
                that you
                have carefully read the entire Letter Agreement, that a copy of the
                Letter
                Agreement was available to you prior to execution, that you know
                and
                understand the provisions of the Agreement, and that you have signed
                the
                Letter Agreement as your own free act and
                deed.

            

    

     

    
      
        
          4

        

        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

     

    
      	
              4.

            	
              Intent
                to Comply with American Jobs Creation Act.
                To the extent that this Letter Agreement and the Employment Agreement
                are
                considered a deferred compensation plan, as contemplated by Code
                Section
                409A, this Section 4 shall apply. It is intended that this Letter
                Agreement and the Employment Agreement shall comply with Code Section
                409A
                and all provisions contained herein shall be read and construed to
                so
                comply. 

            

    

     

    
      	 	
              a.

            	
              All
                deferrals of compensation with respect to your service performed
                after December 31, 2004, and as described in this Letter Agreement
                and the
                Employment Agreement, shall be governed by the terms of this Section
                4.
                

            

    

     

    
      	 	
              b.

            	
              To
                the extent so required, any deferral election made by you or deemed
                to be
                made by you, with respect to compensation payable on services performed
                in
                a calendar year shall be made before the end of the preceding calendar
                year; provided, that in the case of performance-based compensation,
                the
                deferral election may be made not later than 6 months before the
                end of
                the performance period. You shall be considered to have made all
                deferral
                elections under this Letter Agreement and the Employment Agreement
                in
                accordance with the preceding sentence, and shall not be permitted
                nor
                deemed to be permitted to modify any deferral election.
                

            

    

     

    
      	 	
              c.

            	
              Bank
                will not accept transfers under this Letter Agreement or the Employment
                Agreement from any other nonqualified deferred compensation plan
                in which
                you might participate. 

            

    

     

    
      	 	
              d.

            	
              No
                rabbi trust that might be used to pay amounts due under this Letter
                Agreement or the Employment Agreement, nor the assets held by such
                trust,
                shall be located outside the United States. In addition, no such
                trust
                shall provide for the assets thereof to become restricted to the
                provision
                of benefits under the Agreement, or distributed to you, as a result
                of a
                change in the financial health or condition of the Bank. Nothing
                herein
                shall be construed to require the Bank or entitle you to have amounts
                due
                him under this Agreement paid from a rabbi trust.
                

            

    

     

    
      	 	
              e.

            	
              In
                the event that you are considered to be a key employee (as defined
                in
                §416(i) of the Code without regard to paragraph (5) thereof), distribution
                to you may not be made earlier than the date which is 6 months after
                your
                termination of employment. The preceding sentence shall not apply
                to the
                extent that none of the stock of the Bank is publicly traded on an
                established securities market or otherwise. 

            

    

     

    
      	 	
              f.

            	
              The
                timing of any distributions pursuant to your deferral election, if
                any,
                shall not be accelerated. Notwithstanding anything contained in this
                Section 4, you shall not be permitted to alter the payment of your
                severance pay. 

            

    

     

    15167168.1

     

     

    
      
        5

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