Document:

ctbi8kexeccomp2014ex10-12.htm

Exhibit 10.12

COMMUNITY TRUST BANCORP, INC.

 

2014 EXECUTIVE COMMITTEE

LONG-TERM INCENTIVECOMPENSATION PLAN

 

 

 

  

  

  

 

ARTICLE I

 

OBJECTIVES

Section 1.01

The 2014 Executive Committee Long-Term Incentive Compensation Plan is designed to reward members of the Executive Committee for Community Trust Bancorp, Inc.’s attainment of profitability on a long-term basis and is adopted to achieve the following objectives:

 

	
(a)  

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

 

	
(b)  

	
Provide executive compensation which is competitive with other financial institutions;

 

	
(c)  

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

 

	
(d)  

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

 

ARTICLE II

 

DEFINITIONS

 

Section 2.01

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

	
(a)  

	
“Annual Long-Term Incentive Plan” or “Plan” means the 2014 Executive Committee Long-Term Incentive Compensation Plan set forth in this document and all amendments thereto.

 

	
(b)  

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

 

	
(c)  

	
“Change in Control” shall have the meaning specified in the Company’s 2006 Stock Ownership Incentive Plan.

 

	
(d)  

	
“Cumulative Net Income” shall mean Community Trust Bancorp, Inc.’s cumulative net income for the three (3) years ending December 31, 2016, computed in accordance with generally accepted accounting principles, and giving effect to the accrual for payment of all incentive compensation.

 

	
(e)  

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

 

	
(f)  

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

 

	
(g)

	
“Disability” shall have the meaning specified in the Company’s 2006 Stock Ownership Incentive Plan.

 

	
 (h)

	
“Effective Date” means January 1, 2014, the date on which the Plan becomes effective.

 

	
(i)

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

 

	
(j)  

	
“Participant” means each member of the Executive Committee as of January 1, 2014.

 

	
(k)  

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

 

	
(l)  

	
“Performance Period” means the three (3) Fiscal Years beginning on January 1, 2014.

 

	
(m)  

	
“Performance Unit” shall have the meaning specified in the Company’s 2006 Stock Ownership Incentive Plan, with each Performance Unit to have a potential value of $1.00.

 

	
(n)  

	
“Retirement” shall have the meaning specified in the Company’s 2006 Stock Ownership Incentive Plan.

 

	
(o) 

	
“Salary” or “Salaries” means the base salary in effect for each Participant as of the last pay period in December 2014.

 

ARTICLE III

 

ADMINISTRATION OF THE PLAN

Section 3.01

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

Section 3.02

The Compensation Committee shall adopt such rules and regulations of general application as are beneficial for the administration of the Plan and shall make all discretionary decisions involving a Participant in the Plan. The Compensation Committee shall also have the right to interpret the Plan, consistently with the applicable provisions of the 2006 Stock Ownership Incentive Plan, to determine the Effective Date, and to approve Participants in the Plan.

Section 3.03

 

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

Section 3.04

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

Section 3.05

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

Section 3.06

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

Section 3.07

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

Section 3.08

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

ARTICLE IV

PARTICIPANT ELIGIBILITY

Section 4.01

The Participants in the Plan will be the members of the Executive Committee of the Company as of January 1, 2014.

Section 4.02

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

Section 4.03

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

In the case of termination of employment by reason of Retirement of a Participant prior to the expiration of the Performance Period, Participant’s Performance Units shall be payable on a pro rata basis at the end of the Performance Period, as provided in Section 5.01 below, in an amount equal to: (a) the amount to which the Participant would have been entitled with respect to the Participant’s Performance Units if the Participant’s employment had continued to the end of the Performance Period; multiplied by (b) a fraction, the numerator of which is the number of full months the Participant is employed by the Company during the Performance Period, and the denominator of which is 36 (the number of months in the Performance Period).

Section 4.04

Upon a Change in Control, any then outstanding Performance Units shall become fully vested and payable as soon as reasonably practicable, but no later than seventy-four (74) days following the Change in Control, in an amount which is equal to the greater of (a) the amount payable under the Performance Unit at the Target Cumulative Net Income level (as set forth in Section 7.01 below) multiplied by a percentage equal to the percentage that would have been earned under the terms of the Performance Unit Agreement assuming that the rate at which the Performance Goal has been achieved as of the date of such Change in Control would have been continued until the end of the Performance Period; or (b) the amount payable under the Performance Unit at the Target Cumulative Net Income level (as set forth in Section 7.01 below) multiplied by the percentage of the Performance Period completed by the Participant at the time of the Change in Control.

Section 4.05

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

ARTICLE V

PAYMENTS TO PARTICIPANTS

Section 5.01

The maximum payment that can be made pursuant to Performance Units granted to any one Participant in any calendar year is $250,000. Subject to this limitation and such terms and conditions as the Compensation Committee may impose, Performance Units shall be payable: (a) within seventy-four (74) days following the end of the Performance Period during which the Participant attained at least the minimum acceptable level of achievement under the Performance Goal; or (b) in the event of a Change in Control, as soon as reasonably practicable following the Change in Control, but no later than seventy-four (74) days following the Change in Control.

Section 5.02

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

 

ARTICLE VI

DETERMINATION OF TARGET AWARD FUND FOR PERFORMANCE UNITS

Section 6.01

The target award fund shall be generated by a percentage of the Salary of the CTBI Chief Executive Officer, the CTB Chief Executive Officer, and the other members of the Executive Committee, respectively. The target award fund shall be computed as shown in Table I below; however, the target award may be changed by the Compensation Committee of the Board of Directors at any time during the Performance Period at their discretion; provided, however, that the target award as a percentage of Salary may not be increased after the ninetieth (90th) day of the 2014 calendar year.

TABLE I

 

TARGET AWARD FUND

	
PARTICIPANTS

	
SALARIES

	
TARGET AWARD

EXPRESSED AS A % OF SALARY

	
TARGET AWARD

FUND

	
CTBI CEO

	
$

	
X 40%

	
$

	
CTB CEO

	
$

	
 X 30%                      

	
$

	
All Other Members of the Executive Committee

	
$

	
X 20%

	
$

	  	
(aggregate salaries)*

	  	  

 

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

Section 6.02

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

Section 6.03

Subject to Sections 4.03 and 4.04 above, there shall be a minimum acceptable performance beneath which no amounts may be paid under the Performance Units (sometimes referred to as the “threshold”) and a maximum performance above which there is no additional amount paid to avoid excessive payout in the event of windfall profits. Such minimum and maximum may be amended when necessary at any time in the sole discretion of the Compensation Committee; provided, however, that the minimum may not be reduced and the maximum may not be increased after the ninetieth (90th) day of the 2014 calendar year.

ARTICLE VII

CALCULATION OF PERFORMANCE UNIT PAYMENTS

Section 7.01

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

TABLE II

2014 PERFORMANCE GOALS

	
CUMULATIVE

NET INCOME

	
Award as a % of

Target Award

	
Award as a % of

CTBI CEO Salary

	
Award as a % of

CTB CEO Salary

	
Award as a % of

Salary of All Other Members of the

Executive Committee

	
90% of Target Cumulative Net Income (Minimum)

	
25%

	
10.0%

	
7.50%

	
2.50%

	
93% of Target Cumulative Net Income

	
50%

	
20.0%

	
15.0%

	
10.0%

	
96% of Target Cumulative Net Income

	
75%

	
30.0%

	
22.5%

	
15.0%

	
Target Cumulative Net Income (Per Schedule 1)

	
100%

	
40.0%

	
30.0%

	
20.0%

	
103% of Target Cumulative Net Income

	
120%

	
48.0%

	
36.0%

	
24.0%

	
107% of Target Cumulative Net Income

	
135%

	
54.0%

	
40.5%

	
27.05%

	
110.0% of Target Cumulative Net Income (Maximum)

	
150%

	
60.0%

	
45.0%

	
30.0%

 

ARTICLE VIII

 

MISCELLANEOUS PROVISIONS

Section 8.01

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

Section 8.02

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

Section 8.03

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

 

 

  

  

  

SCHEDULE A

CUMULATIVE NET INCOME TARGETS

	
CUMULATIVE NET INCOME TARGETS

	
% OF UNITS EARNED

	
$138 Million

	
25%                   

	
$142 Million

	
50%                   

	
$147 Million

	
75%                   

	
$153 Million

	
100%                  

	
$158 Million

	
120%                 

	
$164 Million

	
135%                

	
$168 Million

	
150%Exhibit 10.1 Form of Restricted Stock Agreement 1.28.2014

Exhibit 10.1

THE ALTRIA GROUP, INC.
2010 PERFORMANCE INCENTIVE PLAN 

RESTRICTED STOCK AGREEMENT 
(January 28, 2014)

ALTRIA GROUP, INC. (the “Company”), a Virginia corporation, hereby grants to the employee identified in the 2014 Restricted Stock Award section of the Award Statement (the “Employee”) under the Altria Group, Inc. 2010 Performance Incentive Plan (the “Plan”) a Restricted Stock Award (the “Award”) dated January 28, 2014 (the “Award Date”), with respect to the number of shares of the Common Stock of the Company (the “Common Stock”) set forth in the 2014 Restricted Stock Award section of the Award Statement (the “Shares”), all in accordance with and subject to the following terms and conditions of this Restricted Stock Agreement (the “Agreement”):

1.    Book Entry Registration.  The Shares shall be evidenced by a book entry account maintained by the Company’s Transfer Agent for the Common Stock.  Upon the vesting of Shares, no certificates will be issued except upon a separate written request made to such Transfer Agent or other agent as determined by the Company.

2.    Condition to Award.  As applicable and in the sole discretion of the Company or its delegate, this Award may be contingent on, and in consideration of, the execution of a Confidentiality and Non-Competition Agreement by the Employee.  In the event the Employee is required to execute a Confidentiality and Non-Competition Agreement, the Company or its delegate will so notify the Employee prior to issuance of the Award.  If the Employee does not execute the Confidentiality and Non-Competition Agreement within a reasonable time frame established by the Company or its delegate, but no later than 90 days after the Award Date, this Agreement will be null and void with respect to the Employee and the Employee will forfeit any and all rights to the Award. 

3.    Restrictions.  Subject to Section 2 above and Section 4 below, the restrictions on the Shares shall lapse and the Shares shall vest on the vesting date set forth in the 2014 Restricted Stock Award section of the Award Statement (the “Vesting Date”), provided that the Employee remains an employee of the Company (or a subsidiary or affiliate) during the entire period (the “Restriction Period”) commencing on the Award Date and ending on the Vesting Date. 

4.    Termination of Employment During Restriction Period.  In the event of the termination of the Employee’s employment with the Company (and with all subsidiaries and affiliates of the Company) prior to the Vesting Date due to death or Disability, or upon the Employee reaching eligibility for Normal Retirement, the restrictions on the Shares shall lapse and the Shares shall become fully vested on the date of death, Disability, or eligibility for Normal Retirement.

If the Employee’s employment with the Company (and with all subsidiaries and affiliates of the Company) is terminated for any reason other than death, Disability, or reaching eligibility for Normal Retirement prior to the end of the Restriction Period, the Employee shall forfeit all rights to the Shares immediately after termination of employment.  Notwithstanding the foregoing, the Compensation Committee of the Board of Directors of the Company (the “Compensation Committee”) may, in its sole discretion, waive the restrictions on, and the vesting requirements for, the Shares.  

5.    Voting and Dividend Rights.  During the Restriction Period, the Employee shall have the rights to vote the Shares and to receive any cash dividends payable with respect to the Shares, as paid, less applicable withholding taxes. 

6.    Transfer Restrictions.  This Award and the Shares (until they become unrestricted pursuant to the terms hereof) are non-transferable and may not be assigned, hypothecated or otherwise pledged and shall not be subject to execution, attachment or similar process.  Upon any attempt to effect any such disposition, or upon the levy of any such process, the Award shall immediately become null and void, and the Shares shall be forfeited.

7.    Withholding Taxes.  The Company is authorized to satisfy the actual minimum statutory withholding taxes arising from the granting or vesting of this Award, as the case may be, by deducting the number of Shares having an aggregate value equal to the amount of withholding taxes due from the total number of Shares awarded or the number of Shares vesting or otherwise becoming subject to current taxation.  The Company is also authorized to satisfy the actual withholding taxes arising from the granting or vesting of this Award, or hypothetical withholding tax amounts if the Employee is covered under a Company tax equalization policy, as the case may be, by the remittance of the required amounts from any proceeds realized upon the open-market sale of vested Shares by the Employee.  Shares deducted from this Award in satisfaction of actual minimum statutory withholding tax requirements shall be valued at the Fair Market Value of the Shares on the date as of which the amount giving rise to the withholding requirement first became includible in the gross income of the Employee under applicable tax laws.  If the Employee is covered by a Company tax equalization policy, the Employee also agrees to pay to the Company any additional hypothetical tax obligation calculated and paid in accordance with such tax equalization policy. 

8.    Death of Employee.  If any of the Shares shall vest upon the death of the Employee, they shall be registered in the name of the estate of the Employee except that, to the extent permitted by the Compensation Committee, if the Company shall have theretofore received in writing a beneficiary designation, the Shares shall be registered in the name of the designated beneficiary.

9.    Board Authorization in the Event of Restatement.  Notwithstanding anything in this Agreement to the contrary, if the Board of Directors of the Company or an appropriate Committee of the Board determines that, as a result of a restatement of the Company’s financial statements, the Employee has received greater compensation in connection with the Award than would have been received absent the incorrect financial statements, the Board or Committee, in its discretion, may take such action with respect to this Award as it deems necessary or appropriate to address the events that gave rise to the restatement and to prevent its recurrence.  Such action may include, to the extent permitted by applicable law, causing the full or partial cancellation of this Award and, with respect to Shares that have vested, requiring the Employee to repay to the Company the full or partial Fair Market Value of the Award determined at the time of vesting, and the Employee agrees by accepting this Award that the Board or Committee may make such a cancellation, impose such a repayment obligation, or take other necessary or appropriate actions in such circumstances.

10.    Other Terms and Provisions.  The terms and provisions of the Plan (a copy of which will  be furnished to the Employee upon written request to the Office of the Corporate Secretary, Altria Group, Inc., 6601 West Broad Street, Richmond, Virginia  23230) are incorporated herein by reference.  To the  extent any provision of this Award is inconsistent or in conflict with any term or provision of the Plan, the Plan shall govern. Capitalized terms not otherwise defined herein have the meaning set forth in the Plan.  Subject to the provisions of section 6(a) of the Plan, in the event of any merger,  share exchange,  reorganization, consolidation, recapitalization, reclassification, distribution, stock dividend, stock split, reverse stock split, split-up, spin-off, issuance of rights or warrants or other similar transaction or event affecting the Common Stock after the date of this Award,  the Board of Directors of the  Company  is  authorized, to the extent it deems appropriate,  to make adjustments to the number and kind of shares of  stock subject to this Award, including the substitution of equity interests in other entities involved in such transactions, to provide for  cash  payments  in lieu of Shares,  and to determine whether  continued  

2

employment with any entity resulting from such a transaction will or will not be treated as continued employment with the Company and its subsidiaries and affiliates, in each case subject to any Board or Compensation Committee action specifically addressing any such adjustments, cash payments, or continued employment treatment.

For purposes of this Agreement, (a) the term “Disability” means a disability that entitles the Employee to benefits under the applicable long-term disability insurance program of the Company or any subsidiary or affiliate of the Company, and (b) the term “Normal Retirement” means retirement from active employment with the Company and any subsidiary or affiliate of the Company following attainment of both age 65 and completion of five years of service with the Company, its subsidiaries, and its affiliates.  Generally, for purposes of this Agreement, (x) a “subsidiary” includes only any company in which the Company, directly or indirectly, has a beneficial ownership interest of greater than 50 percent and (y) an “affiliate” includes only any company that (A) has a beneficial ownership interest, directly or indirectly, in the Company of greater than 50 percent or (B) is under common control with the Company through a parent company that, directly or indirectly, has a beneficial ownership interest of greater than 50 percent in both the Company and the affiliate.

IN WITNESS WHEREOF, this Restricted Stock Agreement has been duly executed as of January 28, 2014.

	
			
	 
	ALTRIA GROUP, INC.

	 
	

	 

	 
	By:
	W. Hildebrandt Surgner, Jr. 
Corporate Secretary

3

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