Document:

Exhibit 10.5

 

	
  

  	
  THE EXECUTIVE

  NONQUALIFIED “EXCESS” PLANTM

  	
  

  

 

ADOPTION AGREEMENT-Officers Plan

 

THIS AGREEMENT is made the 1st day of March, 2004, by Stock Yards Bank and Trust Company (the “Employer”),
having its principal office at 1040 East Main
Street, Louisville, KY 40206 and EXECUTIVE BENEFIT SERVICES, INC.
(the “Sponsor”), having its principal office at 4140 ParkLake Avenue, Suite 500,
Raleigh, NC 27612.

 

W I T N E S S E T H:

 

WHEREAS, the Sponsor
has established The Executive Nonqualified Excess PlanTM (the “Plan”); and

 

WHEREAS, the
Employer desires to adopt the Plan as an unfunded, nonqualified deferred
compensation plan: and

 

WHEREAS, the
Employer has been advised by the Sponsor to obtain legal and tax advice from
its professional advisors before adopting the Plan, and that the Sponsor
disclaims all liability for the legal and tax consequences which result from
the elections made by the Employer in this Adoption Agreement;

 

NOW, THEREFORE, the
Employer hereby adopts the Plan in accordance with the terms and conditions set
forth in this Adoption Agreement:

 

ARTICLE I

 

Terms used in this Adoption Agreement shall have the same meaning as in
the Plan, unless some other meaning is expressly herein set forth.  The Employer hereby represents and warrants
that the Plan has been adopted by the Employer upon proper authorization and
the Employer hereby elects to adopt the Plan for the benefit of its
Participants as referred to in the Plan. 
By the execution of this Adoption Agreement, the Employer hereby agrees to
be bound by the terms of the Plan.

 

This Adoption Agreement may only be used in connection with The
Executive Nonqualified Excess PlanTM.  The
Sponsor will inform the Employer of any amendments to the Plan or of the
discontinuance or abandonment of the Plan. 
For questions concerning the Plan, the Employer may call the Sponsor at
(919) 833-1042.

 

Ó      2003 Executive
Benefit Services, Inc.

 

1

 

ARTICLE II

 

The Employer
hereby makes the following designations or elections for the purpose of the
Plan [Section references below correspond to Section references in
the Plan]:

 

2.7          Compensation:  The “Compensation” of a Participant shall
mean all of each Participant’s [check desired option(s)]:

 

	
  ý

  	
   

  	
  (A)

  	
   

  	
  Compensation received as an Employee
  reportable in box 1, Wages, Tips and other Compensation, on Form W-2.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  o

  	
   

  	
  (B)

  	
   

  	
  Annual base salary.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  o

  	
   

  	
  (C)

  	
   

  	
  Annual bonus.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  o

  	
   

  	
  (D)

  	
   

  	
  Long term incentive plan compensation.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  o

  	
   

  	
  (E)

  	
   

  	
  Compensation received as an Independent
  Contractor reportable on Form 1099.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  o

  	
   

  	
  (F)

  	
   

  	
  Commissions.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  o

  	
   

  	
  (G)

  	
   

  	
  other [specify]:

  	
  .

  

 

Notwithstanding
the foregoing, Compensation ý SHALL o SHALL
NOT include Salary Deferral Credits under this Plan and amounts contributed by
the Participant pursuant to a Salary Deferral Agreement to another employee
benefit plan of the Employer which are not includible in the gross income of
the Employee under Section 125, 132(f)(4), 402(e)(3), 402(h) or 403(b) of the
Code.

 

2.8
         Crediting Date: The
Deferred Compensation Account of a Participant shall be credited with the
amount of any Salary Deferral Credits to such account at the time designated
below [check desired Crediting Date]:

 

	
  o

  	
   

  	
  (A)

  	
   

  	
  The last business day of each Plan Year.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  o

  	
   

  	
  (B)

  	
   

  	
  The last business day of each calendar
  quarter during the Plan Year.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  o

  	
   

  	
  (C)

  	
   

  	
  The last business day of each month during
  the Plan Year.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  o

  	
   

  	
  (D)

  	
   

  	
  The last business day of each payroll
  period during the Plan Year.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ý

  	
   

  	
  (E)

  	
   

  	
  Any business day on which Salary Deferral
  Credits are received by the Sponsor.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  o

  	
   

  	
  (F)

  	
   

  	
  Other [specify]:

  	
  .

  

 

 

2

 

2.10
       Disability: The
disability of a Participant shall be determined as follows:

 

	
  ý

  	
   

  	
  (A)

  	
   

  	
  The Employee participating in the Plan
  shall be considered to be disabled when he has been determined to be disabled
  for the purposes of any long term disability insurance covering the
  Participant that is sponsored by the Employer

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  o

  	
   

  	
  (B)

  	
   

  	
  The Participant shall be considered to be
  disabled when he has been determined to be disabled for purposes of the
  Federal Social Security Act.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  o

  	
   

  	
  (C)

  	
   

  	
  Other:

  	
  .

  

 

2.14
       Effective Date [check
desired option]:

 

	
  o

  	
   

  	
  (A)

  	
   

  	
  This is a newly-established Plan, and the
  Effective Date of the Plan is                                               .

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ý

  	
   

  	
  (B)

  	
   

  	
  This is an amendment and restatement of a
  plan named Stock Yards Bank and Trust
  Company Nonqualified Deferred Compensation Plan  with an
  effective date of March 1, 2001.
  The Effective date of this amended and restated Plan is March
  1, 2004 This is amendment number 1 to the Stock Yards
  Bank and Trust Company Nonqualifed Deferred Compensation Plan.

  

 

2.20                      Normal
Retirement Date: The Normal Retirement Date of a Participant shall be:
[check desired option]:

 

	
  ý

  	
   

  	
  (A)

  	
   

  	
  The attainment of age 65.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  o

  	
   

  	
  (B)

  	
   

  	
  The later of age            
  or the             
  anniversary of the participation commencement date. The participation
  commencement date is the first day of the first Plan Year in which the
  Participant commenced participation in the Plan.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  o

  	
   

  	
  (C)

  	
   

  	
  The completion of       
  Years of Service.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  o

  	
   

  	
  (D) 

  	
   

  	
  The completion of         Years
  of Service and attainment of age        .

  

 

3

 

2.22         Participating Employer(s):   As
of the Effective Date, the following Participating Employer(s) are parties to
the Plan [list all employer-parties, including the Employer]:

 

	
  Name of Employer

  	
   

  	
  Address

  	
   

  	
  Telephone No.

  	
   

  	
  EIN

  
	
  Stock
  Yards Bank and Trust

  Company

  	
   

  	
  1040
  East Main Street

  	
   

  	
  (502)
  625-9122

  	
   

  	
  61-0354170

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Louisville,
  KY 40206

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

2.23
       Plan: The
name of the Plan as applied to the Employer is:

 

The
Executives Nonqualified Deferred Compensation Plan of Stock Yards Bank and
Trust Company..

 

2.24
       Plan Administrator: The
Plan Administrator shall be [check desired option]:

 

	
  ý

  	
   

  	
  (A)

  	
   

  	
  Committee.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  o

  	
   

  	
  (B)

  	
   

  	
  Employer.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  o

  	
   

  	
  (C)

  	
   

  	
  Other
  (specify): 

  	
  .

  

 

2.25
       Plan Year: The
Plan Year shall be the 12 consecutive calendar month period ending on the last
day of the month of December,
and each anniversary thereof.

 

4

 

2.34
       Trust: [check
desired option]:

 

	
  o

  	
   

  	
  (A)

  	
   

  	
  The Employer
  does desire to establish a
  “rabbi” trust for the purpose of setting aside assets of the Employer
  contributed thereto for the payment of benefits under the Plan.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  o

  	
   

  	
  (B)

  	
   

  	
  The Employer
  does not desire to establish a
  “rabbi” trust for the purpose of setting aside assets of the Employer
  contributed thereto for the payment of benefits under the Plan.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ý

  	
   

  	
  (C)

  	
   

  	
  The Employer
  desires to establish a “rabbi” trust for the purpose of setting aside assets
  of the Employer contributed thereto for the payment of benefits under the
  Plan upon the occurrence of the following
  event(s): Upon the happening of
  a Change in Control as hereafter defined. A Change In Control shall occur
  upon (1) the acquisition by any person of 50% or  more of
  the voting power of the Employer’s outstanding voting stock, (2)  five or
  more of the current members of the Board of Directors ceasing to  be
  members of the Board unless ceasing any replacement director was  elected
  by a vote of either at least 75% of the remaining directors, or at  least 75%
  of the shares entitled to vote on such replacement, or (3)  approval
  by the shareholders of the Employer of (A) a merger or  consolidation with another corporation is the
  stockholders of the  Employer immediately before such vote will not, as a
  result of such  merger or consolidation, own more than 50% of the
  voting stock of the  corporation resulting from such merger or
  consolidation, or (B) a  complete liquidation of the Employer or the sale of
  all, or substantially  all, of the assets of the Employer. Notwithstanding
  the foregoing, a  Change in Control shall not occur solely because 50%
  or more of the  voting stock of the Employer is acquired by (i) a
  trust which is part of the  Employer’s or subsidiary’s ‘s employee benefit plan,
  or (ii) by a corporation which , immediately following such acquisition, is
  owned  directly or indirectly by the stockholders of the
  Employer in the same  proportion as their ownership of stock in the
  Employer immediately prior  to such acquisition. In the event a Change in
  Control occurs, you will be 
  notified by the Committee.

  

 

5

 

4.1       Salary
Deferral Credits:   A Participant may
elect to have his Compensation (as selected in 
Section 2.7 of this Adoption Agreement) reduced by the following annual
percentage or amount as  designated in
writing to the Committee [check the applicable options]:

 

	
  ý

  	
   

  	
  (A)

  	
   

  	
  Annual base salary:

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  [Complete the following blanks only
  if a minimum or maximum deferral is desired]:

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Minimum
  deferral:

  	
  $                      

  	
  or

  	
   

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
  Maximum
  deferral:

  	
  $                      

  	
  or

  	
  10

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  o

  	
   

  	
  (B)

  	
   

  	
  Annual bonus:

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  [Complete the following blanks only
  if a minimum or maximum deferral is desired]:

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Minimum
  deferral:

  	
  $                      

  	
  or

  	
   

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
  Maximum
  deferral:

  	
  $                      

  	
  or

  	
   

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  o

  	
   

  	
  (C)

  	
   

  	
  Other: 

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  [Complete the following blanks only
  if a minimum or maximum deferral is desired]:

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Minimum
  deferral:

  	
  $                      

  	
  or

  	
   

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
  Maximum
  deferral:

  	
  $                      

  	
  or

  	
   

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  o

  	
   

  	
  (D)

  	
   

  	
  Not applicable – no salary deferral provision.

  

 

4.1.2       Termination of Salary Deferrals:   A
Participant may terminate his Salary Deferral Agreement effective as of [check
desired option]:

 

	
  o

  	
   

  	
  (A)

  	
   

  	
  The first
  full payroll period commencing after the date written notice of the
  termination is received by the Committee.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ý

  	
   

  	
  (B)

  	
   

  	
  The first
  day of the Plan Year occurring after the date written notice of the
  termination is received by the Committee.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  o

  	
   

  	
  (C)

  	
   

  	
  Not
  applicable – no salary deferral provision.

  

 

6

 

4.2          Employer Credits:   The Employer will
make Employer Credits in the following manner [check a maximum of 2
desired option(s)]:

 

	
  ý

  	
   

  	
  (A)

  	
   

  	
  Employer
  Matching Credits:   The Employer may
  make matching credits to the Deferred Compensation Account of each Employee
  Participant in an amount determined as follows [check desired option(s)]:

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  o

  	
   

  	
  (i)

  	
   

  	
          %
  of the Participant’s Salary Deferral Credits.

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  o

  	
   

  	
  (ii)

  	
   

  	
          %
  of the first         % of the
  Participant’s Compensation which is elected as a Salary Deferral Credit.

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  ý

  	
   

  	
  (iii)

  	
   

  	
  An amount
  determined each Plan Year by the Employer.

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  o

  	
   

  	
  (iv)

  	
   

  	
  The Employer
  shall not match amounts provided above in excess of $               or
  in excess of         % of the
  Participant’s Compensation per Plan Year.

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  o

  	
   

  	
  (v)

  	
   

  	
  Other: 

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  .

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  o

  	
   

  	
  (vi)

  	
   

  	
  Not
  applicable – no Employer matching credits provision.

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ý

  	
   

  	
  (B)

  	
   

  	
  Employer
  Profit Sharing Credits:   The
  Employer may make profit sharing credits to the Deferred Compensation Account
  of each Active Employee Participant in an amount determined as follows:

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  o

  	
   

  	
  (i)

  	
   

  	
  Such amount
  out of the current or accumulated net profit of the Employer for such year as
  the Employer in its sole discretion shall determine.

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  ý

  	
   

  	
  (ii)

  	
   

  	
  Such amount
  as the Employer in its sole discretion shall determine without regard to
  current or accumulated net profit.

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  o

  	
   

  	
  (iii)

  	
   

  	
  The Employer
  shall not make profit sharing credits in excess of $              ,
  or in excess of         % of the Participant’s
  Compensation per Plan Year.

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  o

  	
   

  	
  (iv)

  	
   

  	
  Other: 

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  .

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  o

  	
   

  	
  (v)

  	
   

  	
  Not
  applicable – no Employer profit sharing provision.

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  o

  	
   

  	
  (C)

  	
   

  	
  Other
  [describe]:

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  .

  
									

 

7

 

5.1          Death of a Participant:   If
the Participant dies while in Service, the Employer shall pay a benefit to the
Beneficiary in an amount equal to the Accrued Benefit of the Participant
determined as of the date payments to the Beneficiary commence, plus [check if
desired]:

 

	
  o

  	
   

  	
  (A)

  	
   

  	
  An amount to
  be determined by the Committee.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  o

  	
   

  	
  (B)

  	
   

  	
  Other
  [specify]:

  	
  .

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ý

  	
   

  	
  (C)

  	
   

  	
  No
  additional benefits.

  

 

6.1          In-Service Withdrawals:   In-service
withdrawals may be made from the Plan [check desired option]:

 

	
  ý

  	
   

  	
  (A)

  	
   

  	
  Yes.

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  (i)

  	
   

  	
  The
  In-Service Account may be withdrawn only after the account has been established
  for [check desired option]:

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  ý

  	
   

  	
  (a)   A minimum of 3 years (insert minimum of 2 years.)

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  o

  	
   

  	
  (b)   Not applicable.

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  (ii)

  	
   

  	
  A
  Participant may defer the date of any scheduled in-service withdrawal by giving
  notice of the new withdrawal date to the Committee [check desired option]:

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  o

  	
   

  	
  (a)   At least        
  (insert minimum of 12) months prior to the scheduled withdrawal date.

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  ý

  	
   

  	
  (b)   Not applicable.

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  o

  	
   

  	
  (B)

  	
   

  	
  No
  in-service withdrawals.

  

 

8

 

6.2          Financial Hardship Withdrawals:   Financial
hardship withdrawals may be made from the Plan [check desired option]:

 

	
  ý

  	
   

  	
  (A)

  	
   

  	
  Yes.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  o

  	
   

  	
  (B)

  	
   

  	
  No.

  

 

6.3
         “Haircut” Withdrawals:   “Haircut”
withdrawals may be made from the Plan [check desired option]:

 

	
  o

  	
   

  	
  (A)

  	
   

  	
  Yes. If a
  Participant obtains a “haircut” withdrawal, the Participant shall forfeit 10% (specify percentage not less than
  10%) of the amount of withdrawal.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ý

  	
   

  	
  (B)

  	
   

  	
  No “haircut”
  withdrawals.

  

 

6.4
Education Withdrawals: Education
withdrawals may be made from the Plan [check desired option]:

 

	
  ý

  	
   

  	
  (A)

  	
   

  	
  Yes.

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  (i)

  	
   

  	
  Education
  withdrawals may be made in installment payments over no more than 6 years.

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  (ii)

  	
   

  	
  A
  Participant may defer the date of any scheduled education withdrawal by giving
  notice of the new withdrawal date to the Committee [check desired option]:

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  o

  	
   

  	
  (a)

  	
  At least        
  (insert minimum of 12) months prior to the scheduled withdrawal date.

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  ý

  	
   

  	
  (b)

  	
  Not
  applicable.

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  o

  	
   

  	
  (B)

  	
  No education
  withdrawals.

  

 

9

 

7.1          Payment Options:   Any
benefit payable under the Plan upon a Qualifying Distribution Event may be made
to the Participant or his Beneficiary (as applicable) in any of the following payment
forms, as selected by the Participant upon his entry into the Plan [check
desired option(s)]:

 

	
  ý

  	
   

  	
  (A)

  	
   

  	
  A lump sum
  in cash as soon as practicable following the date of the Qualifying Distribution
  Event.

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ý

  	
   

  	
  (B)

  	
   

  	
  Approximately
  equal annual installments over a term no longer than 10 years as elected by the Participant
  upon his entry into the Plan.

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  ý

  	
   

  	
  (i)

  	
   

  	
  Payment of
  the benefit shall commence as soon as practicable after the following date
  [select desired option]:

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  o

  	
   

  	
  (a)

  	
   

  	
  The first
  business day of the calendar year following
  the date of the Qualifying Distribution Event.

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  o

  	
   

  	
  (b)

  	
   

  	
  The first
  business day of the calendar quarter following
  the date of the Qualifying Distribution Event.

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  ý

  	
   

  	
  (c)

  	
   

  	
  The first
  business day of the calendar month following
  the date of the Qualifying Distribution Event.

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  The payment of each annual
  installment shall be made on the anniversary of the date selected for the
  commencement of the installment payments in this subsection (i).  The amount of the annual installment shall
  be adjusted on each anniversary date of the commencement of the installment
  payments for credits or debits to the Participant’s account pursuant to
  Section 9 of the Plan. Such adjustment shall be made by dividing the balance
  in the Deferred Compensation Account on each such date (following adjustment on
  such date) by the number of annual installments remaining to be paid
  hereunder; provided that the last annual installment due under the Plan shall
  be the entire amount credited to the Participant’s account on the date of the
  payment.

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  ý

  	
   

  	
  (ii)

  	
   

  	
  Notwithstanding
  the payment option elected by the Participant, the vested Accrued Benefit of
  the Participant will be distributed in a single lump payment if the amount of
  such benefit on the date that payment is to commence does not exceed [check
  desired option]:

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  o

  	
   

  	
  (a)

  	
   

  	
  $                  (Insert desired cash out amount).

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  ý

  	
   

  	
  (b)

  	
   

  	
  Not
  applicable.

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ý

  	
   

  	
  (C)

  	
   

  	
  A
  Participant may defer the date of any scheduled payment by giving notice of
  the new payment date to the Committee [check desired option]:

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  o

  	
   

  	
  (i)

  	
   

  	
  (a)

  	
   

  	
  At least        
  (insert minimum of 12) months prior to the scheduled payment date.

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  ý

  	
   

  	
  (ii)

  	
   

  	
  (b)

  	
   

  	
  Not
  applicable.

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  o

  	
   

  	
  (D)

  	
   

  	
  Other
  [specify]: 

  	
  .

  
										

 

10

 

8.     Vesting:   An
Active Participant shall be fully vested in the Employer Credits made to the Deferred
Compensation Account upon occurrence of the following events [check or complete
all that apply]:

 

	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ý

  	
   

  	
  (A)

  	
   

  	
  Normal
  Retirement Date.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ý

  	
   

  	
  (B)

  	
   

  	
  Death.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ý

  	
   

  	
  (C)

  	
   

  	
  Disability.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  o

  	
   

  	
  (D)

  	
   

  	
  Completion
  of that number of Years of Service specified below:

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  ý

  	
   

  	
  (i)

  	
   

  	
  Employer Matching Credits [complete if
  applicable]:

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  ý

  	
   

  	
  (a)

  	
   

  	
  Immediate
  100% vesting.

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  o

  	
   

  	
  (b)

  	
   

  	
  100% vesting
  after       Years of Service.

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  o

  	
   

  	
  (c)

  	
   

  	
  100% vesting
  at age        .

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  o

  	
   

  	
  (d)

  	
   

  	
  Number of Years

  of Service

  	
   

  	
  Vested

  Percentage

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Less than 

  	
  1

  	
   

  	
        

  	
  %

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  1

  	
   

  	
        

  	
  %

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  2

  	
   

  	
        

  	
  %

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  3

  	
   

  	
        

  	
  %

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  4

  	
   

  	
        

  	
  %

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  5

  	
   

  	
        

  	
  %

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  6

  	
   

  	
        

  	
  %

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  7

  	
   

  	
        

  	
  %

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  8 

  	
   

  	
        

  	
  %

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  9

  	
   

  	
        

  	
  %

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  10 or more

  	
   

  	
        

  	
  %

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  For this
  purpose, Years of Service of a Participant shall be calculated from the date designated
  below [check desired option]:

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  o

  	
   

  	
  (1)

  	
   

  	
  First Day of
  Service.

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  o

  	
   

  	
  (2)

  	
   

  	
  Effective
  Date of the Plan Participation.

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  o

  	
   

  	
  (3)

  	
   

  	
  Each
  Crediting Date.   Under this option (3), each Employer Matching
  Credit shall vest based on the Years of Service of a Participant from the
  Crediting Date on which each Employer Credit is made to his or her Deferred
  Compensation Account.

  
																

 

11

 

	
   

  	
   

  	
  ý

  	
   

  	
  (ii)

  	
   

  	
  Employer Profit Sharing Credits [complete if
  applicable]:

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  ý

  	
   

  	
  (a)

  	
   

  	
  Immediate
  100% vesting.

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  o

  	
   

  	
  (b)

  	
   

  	
  100% vesting
  after       Years of Service.

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  o

  	
   

  	
  (c)

  	
   

  	
  100% vesting
  at age        .

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  o

  	
   

  	
  (d)

  	
   

  	
  Number of Years

  of Service

  	
   

  	
  Vested

  Percentage

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Less than

  	
  1

  	
   

  	
        

  	
  %

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  1

  	
   

  	
        

  	
  %

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  2

  	
   

  	
        

  	
  %

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  3

  	
   

  	
        

  	
  %

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  4

  	
   

  	
        

  	
  %

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  5

  	
   

  	
        

  	
  %

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  6

  	
   

  	
        

  	
  %

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  7

  	
   

  	
        

  	
  %

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  8

  	
   

  	
        

  	
  %

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  9

  	
   

  	
        

  	
  %

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  10 or more

  	
   

  	
        

  	
  %

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  For this
  purpose, Years of Service of a Participant shall be calculated from the date designated
  below [check desired option]:

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  o

  	
   

  	
  (1)

  	
   

  	
  First Day of
  Service.

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  o

  	
   

  	
  (2)

  	
   

  	
  Effective
  Date of the Plan Participation.

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  o

  	
   

  	
  (3)

  	
   

  	
  Each
  Crediting Date. Under this option (3), each Employer Profit Sharing Credit
  shall vest based on the Years of Service of a Participant from the Crediting
  Date on which each Employer Credit is made to his or her Deferred
  Compensation Account.

  
																		

 

12

 

	
   

  	
   

  	
  o

  	
   

  	
  (iii)

  	
   

  	
  Other Employer Credits [complete if
  applicable]:

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  o

  	
   

  	
  (a)

  	
   

  	
  Immediate
  100% vesting.

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  o

  	
   

  	
  (b)

  	
   

  	
  100% vesting
  after       Years of Service.

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  o

  	
   

  	
  (c)

  	
   

  	
  100% vesting
  at age        .

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  o

  	
   

  	
  (d)

  	
   

  	
  Number of Years

  of Service

  	
   

  	
  Vested

  Percentage

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Less than 

  	
  1

  	
   

  	
        

  	
  %

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  1

  	
   

  	
        

  	
  %

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  2

  	
   

  	
        

  	
  %

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  3

  	
   

  	
        

  	
  %

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  4

  	
   

  	
        

  	
  %

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  5

  	
   

  	
        

  	
  %

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  6

  	
   

  	
        

  	
  %

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  7

  	
   

  	
        

  	
  %

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  8

  	
   

  	
        

  	
  %

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  9

  	
   

  	
        

  	
  %

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  10 or more

  	
   

  	
        

  	
  %

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  For this
  purpose, Years of Service of a Participant shall be calculated from the date designated
  below [check desired option]:

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  o

  	
   

  	
  (1)

  	
   

  	
  First Day of
  Service.

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  o

  	
   

  	
  (2)

  	
   

  	
  Effective
  Date of the Plan Participation.

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  o

  	
   

  	
  (3)

  	
   

  	
  Each
  Crediting Date.   Under this option (3),   each
  Other Employer Credit shall vest based on the Years of Service of a Participant
  from the Crediting Date on which each Employer Credit is made to his or her
  Deferred Compensation Account.

  
																

 

10.          Benefit Exchange:   The
Employer elects to permit the Participant to exchange all or any portion of the
vested Accrued Benefit under the Plan for another type of nonqualified benefit
[check desired option]:

 

	
  o

  	
   

  	
  (A)

  	
   

  	
  Yes.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ý

  	
   

  	
  (B)

  	
   

  	
  No.

  

 

11.          Transfer to Qualified Plan:   The
Employer elects to permit the Participant to direct the transfer of a portion
of his benefit under this Plan to a tax-qualified retirement plan maintained by
the Employer [check desired option]:

 

	
  o

  	
   

  	
  (A)

  	
   

  	
  Yes. Insert
  name of Qualified Plan:

  	
  .

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ý

  	
   

  	
  (B)

  	
   

  	
  No.

  

 

13

 

17.          Amendment or Termination of Plan: [check
or complete all that apply]:

 

	
  ý

  	
   

  	
  (A)

  	
   

  	
  Notwithstanding any provision in
  this Adoption Agreement or the Plan to the contrary, Section 8 of the Plan shall be amended to
  read as follows:

   

  See
  attached Exhibit A.

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  o

  	
   

  	
  (B)

  	
   

  	
  The Plan
  shall be terminated upon the occurrence of one or more of the following events
  [check if desired]:

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  o

  	
   

  	
  (i)

  	
   

  	
  The amount
  of shareholders equity shown on the financial statements of the Employer for
  each of the two most recent fiscal years is less than $            .

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  o

  	
   

  	
  (ii)

  	
   

  	
  The aggregate
  net loss (after tax) as reported on the financial statements of the Employer
  for the two most recent fiscal years is greater than $            .

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  o

  	
   

  	
  (iii)

  	
   

  	
  There is a
  change of control of the Employer. For this purpose, a “change of control”
  shall be deemed to have occurred if: (A) any person other than an officer who
  is an Employee of the Employer for at least one year preceding the change of
  control, acquires or becomes the beneficial owner, directly or indirectly, of
  securities of the Employer representing       %
  [insert percentage] or more of the combined voting power of the Employer’s
  then outstanding securities and thereafter, the membership of the Board
  becomes such that a majority are persons who were not members of the Board at
  the time of the acquisition of securities; or (B)  the Employer, or
  its assets, are acquired by or combined with another entity and less than a
  majority of the outstanding voting shares of such entity after the acquisition
  or combination are owned, immediately after the acquisition or combination,
  by the owners of voting shares of the Employer immediately prior to the
  acquisition or combination.

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  o

  	
   

  	
  (iv)

  	
   

  	
  Other
  [specify]:

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  .

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ý

  	
   

  	
  (C)

  	
   

  	
  In the event
  of a termination of the Plan, the Employer elects that [check if desired]:

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  ý

  	
   

  	
  (i)

  	
   

  	
  Each Active
  Participant will become fully vested in the Deferred Compensation Account.
  [If not checked, the vesting provisions of Section 8 will continue to apply.]

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  o

  	
   

  	
  (ii)

  	
   

  	
  The Deferred
  Compensation Account will be immediately distributed to each Participant in a
  single lump sum payment.  [If not checked the payment provisions of
  Section 7 will continue to apply.]

  

 

13

 

20.9        Construction:   The
provisions of the Plan and Trust (if any) shall be construed and enforced
according to the laws of the State of Kentucky,
except to the extent that such laws are superseded by ERISA.

 

IN WITNESS
WHEREOF, this Agreement has been executed as of the day and year first above
stated.

 

	
   

  	
   

  	
  STOCK YARDS BANK AND TRUST COMPANY

  
	
   

  	
   

  	
  Name of
  Employer

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Authorized Person

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Title

  

 

NOTE:
Execution of this Adoption Agreement creates a legal liability of the Employer
with significant tax consequences to the Employer and Participants. The
Employer should obtain legal and tax advice from its professional advisors
before adopting the Plan. The Sponsor disclaims all liability for the legal and
tax consequences which result from the elections made by the Employer in this
Adoption Agreement.

 

14

 

Exhibit A

 

If a Participant’s employment is
terminated for “Cause,” as that term is defined below, the Participant shall
forfeit all right, title, and interest in his or her Account values created by
or attributed to Employer contributions. 
The term “Cause” is defined to include: (i) being convicted of a felony
or misdemeanor involving fraud, embezzlement, theft, or dishonesty or other
criminal conduct against the Corporation; or (ii) dishonesty, breach of
fiduciary duty or any material breach by the Participant. 

 

15Exhibit 10.19

 

October 20, 2005

 

 

Ms. Sandra R.A. Karrmann

2620
King Arthur Boulevard

Lewisville,
Texas 75056

 

Re:         Offer of Employment

 

Dear Sandi:

 

This letter will discuss the
basic terms of Meritage Homes Corporation’s offer to you of the newly created position
of Vice President, Chief Human Resources Officer. We expect this position will
be an exciting and unique opportunity for Meritage Homes Corporation to move
into the future with the proper Human Resources tools for our continued success
in the home building industry. Based upon our discussions with you, we
understand that you have the experience, technical skill and personal strengths
to be successful in this critical management position.

 

Your compensation package
will consist of:

 

1.             An
annual base salary of $300,000, to be reviewed annually based on performance.

 

2.                                       A potential annual bonus in the $150,000 to
$200,000 range, payable in February following the previous calendar year.

 

A.                                   One-third of the bonus will be based on
Meritage Homes achieving its business plan performance objectives as
established by our Board of Directors. If Meritage meets a minimum of 90% of those
objectives, then you will be eligible for a $50,000 bonus, and if 100% of those
objectives are achieved, then you will be eligible for a $66,667 bonus.

 

B.                                     Another one-third, $50,000 to $66,667of your
potential bonus, will be based on your successful implementation of systems and
organization of the Human Resources Department, which are pre- approved and
evaluated by the co-CEOs.

 

C.                                     The final one-third, $50,000 to $66,667 of
your potential bonus, will be based upon your meeting objective and subjective
criteria in recruiting, training and employee retention. In the first year we would
expect you to hire a person to be in charge of coordinating corporate training.
All criteria will be determined mutually by you and the co-CEOs.

 

 

3.                                       We have agreed that you are eligible for a
hiring bonus of up to $177,000.

 

A.                                   $125,000 of that bonus will be payable on or
about January 15, 2006.

 

B.                                     $32,000 of that bonus will be payable on or
about January 15, 2007.

 

C.                                     $20,000 of that bonus will be payable on or
about January 15, 2008.

 

D.                                    You must be employed by Meritage Homes at the
time the bonus payment is due for you to receive these payments.

 

E.                                      You have agreed that if you leave the
employment of Meritage Homes for any reason before December 31, 2008, then
you will repay to Meritage Homes $100,000 of this signing bonus and that
Meritage Homes may offset any final payments or compensation due to you up
to $100,000 for that repayment.

 

4.                                       With regard to stock options:

 

A.                                   You will receive an initial option grant of
10,000 shares of stock to be vested at a rate of 20% per calendar year of your
employment, with your exercise of those options to be effected within seven
years from the date of grant.

 

B.                                     In addition, you will be eligible for annual
option grants of 7,500 shares per year, subject to the same vesting schedule.

 

C.                                     These stock option grants are subject to
approval of the Board of Directors and will be documented and subject to the
same requirements as Meritage’s stock option plans for similarly situated
employees.

 

5.                                       We have agreed to enter into a Change of
Control Agreement with you for you to receive a change of control payment of $300,000
if Meritage Homes Corporation is sold and you are either not offered the senior
most Human Resources position in the new company, the new company will not be
located in the Dallas area or you elect not to stay in another position with
the new company. Again, the terms of the Change of Control Agreement are
subject to approval by the Board of Directors.

 

6.                                       Benefits. We have agreed that you will have
benefits commensurate with those available for senior level executives. Currently
these will include:

 

2

 

A.                                   An automobile allowance in the amount of
$18,000 per year

 

B.                                     Three weeks per year of paid vacation.

 

C.                                     Medical and dental insurance coverage for you
and your family as is available for senior level executives.

 

D.                                    A company paid annual physical at a facility,
such as the Cooper Clinic.

 

E.                                      401(k) eligibility and matching and other
customary Meritage employee benefits, subject to the Plan documents and ERISA.

 

We are excited about the
opportunity to have you join Meritage Homes. Once you begin work, as we
discussed, we will also work with you to hire your executive assistant.

 

Please acknowledge your
acceptance of this exciting new position of our senior management team by
signing below and returning a copy to my office.

 

Once again, congratulations,
and I am looking forward to working with you.

 

	
   

  	
  Sincerely,

  
	
   

  	
   

  
	
   

  	
  /s/ John R. Landon

  	
   

  
	
   

  	
  John R. Landon

  
	
   

  	
  Co-Chairman and CEO

  

 

 

Agreed and Accepted By:

 

 

	
  /s/ Sandra Karrmann

  	
   

  

 

3

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