STOCK YARDS BANCORP, INC. RESTRICTED STOCK UNIT GRANT AGREEMENT with vesting and settlement based on performance

4.2           Notwithstanding Section 4.1, if a Grantee experiences a Termination of Employment is the result of  (i) the Grantee's death, Disability (as defined in the Company's long term disability Plan of general application), or (ii) on or after age 60 (a "Qualifying Termination"), a pro rata portion of Common Stock with respect to the RSUs shall be issued at the time set forth in Section 3 above, as set forth below:

 

4.2.1           In the event of a Qualifying Termination prior to completion of the Performance Period, the Applicable Percentage of RSUs shall be determined through the end of the Performance Period in the same manner as it would for a grantee who is still employed on that date, but that percentage shall be subject to further adjustment equal to (i) the number of RSUs subject to the Award that would have vested in accordance with Section 3 above (assuming no Termination of Employment had occurred), multiplied by (ii) a service fraction, the numerator of which is the number of full months the Grantee was employed or rendering services following the Grant Date through the date of Grantee's Termination of Employment, and the denominator of which is the number of months in the Performance Period. Any RSUs that do not vest in accordance with the foregoing provisions of this Section 4.2.1 shall terminate and be forfeited as of the end of the Performance Period.

 

4.2.2           Notwithstanding Section 4.2.1, if a 409A Change (as defined below) occurs after a Qualifying Termination and prior to completion of the Performance Period, upon the date of the 409A Change, the Grantee shall vest in a prorated number of RSUs determined as described in Section 5 below, but multiplied by a service fraction, the numerator of which is the number of full months the Grantee was employed or rendering services following the Grant Date through the date of Grantee's Termination of Employment, and the denominator of which is the number of months in the Performance Period that expired between the Grant Date and the 409A Change.  Such number of RSUs shall be paid in cash or by delivery of shares of stock as provided in Section 5 below.  Any RSUs that do not vest under this provision shall terminate and be forfeited as of the date of the Change of Control.

5.            Change of Control.  In the event a Change of Control which also constitutes a change in ownership or effective control or a change in ownership of a substantial portion of the assets of the Company within the meaning of Section 409A of the Code (a "409A Change") occurs prior to both completion of the Performance Period and a Termination of Employment (other than a Qualifying Termination, which shall be governed by Section 4.2.2 above), a number of RSUs shall become fully vested on the date of such 409A Change as if all performance were at the Target performance level set out on Exhibit A for the Performance Period. Absent a resolution of the Board consistent with Article 11 of the Plan to have the securities resulting from the Change in Control substituted for the number of shares of Common Stock that would otherwise have been issued based on such vesting, each vested RSU shall be converted to cash based on the Fair Market Value received by shareholders of record for Common Stock in the Change of Control, and within 5 days after the 409A Change, such cash amount shall be paid to the Grantee. Any RSUs that do not vest under this provision shall terminate and be forfeited as of the date of the Change of Control.

 

6.           Tax Withholding.  The Company (or Bank, as the employer) shall withhold from wages otherwise due, or retain from any payment to Grantee in respect of the RSUs, or take such other action which Company deems necessary to satisfy any income or other tax withholding requirements as a result of the vesting of RSUs and issuance of Common Stock related thereto.  Unless an affirmative election is made by the Participant before the end of the Performance Period (or Change in Control, if earlier) to remit already-owned shares of Common Stock or a cash payment or to have amounts debited from other wages due, or some combination thereof, Grantee shall be deemed to have elected to satisfy any federal and state tax withholding requirements through a reduction in the number of shares of Common Stock issuable upon vesting, equal to their Fair Market Value based on the amount of withholding taxes reasonably estimated by the Company to be due upon vesting.

7.           Delay in Payment to Specified Employees.  Notwithstanding anything herein to the contrary, the date of delivery of Common Shares (or cash in lieu thereof if required hereby) to the Grantee shall be delayed if payment would otherwise be required hereunder after Termination of Employment (other than on account of Death) and before 6 months have elapsed from that termination date, if the Grantee is a Specified Employee and the circumstances of payment require delay under 409A of the Code. "Specified Employee" shall have the meaning given in Treas. Reg. § 1.409A-1(i) (or any successor thereto) using the prior calendar year as the determination period.

 

8.           Definitions.  Unless provided to the contrary in this Agreement, the definitions contained in the Plan and any amendments thereto shall apply to this Agreement.

 

9.           Restrictions Imposed by Law.  Notwithstanding any other provision of this Agreement, Grantee agrees that the Company will not be obligated to deliver any shares of Common Stock if counsel to the Company determines that such exercise, delivery or payment would violate any law or regulation of any governmental authority or any agreement between the Company and any national securities exchange upon which the Common Stock is listed.

 

10.           No Shareholder Status; No Dividends.  Grantee shall have no rights as a shareholder with respect to any RSUs or shares of Common Stock under this Agreement until such shares have been duly issued and delivered to Grantee, and no adjustment shall be made for dividends of any kind or description whatsoever or for distributions of other rights of any kind or description whatsoever respecting the shares prior to such issuance.  Grantee shall have no Cash Dividend Rights with respect to the RSUs.

 

11.           Modification, Amendment and Cancellation.  The Committee or Board of Directors of the Company shall have the right unilaterally to modify, amend or cancel this Award in accordance with the terms of the Plan.  This Award shall be subject to adjustment for changes in the Company's capitalization as provided in the Plan.

 

12.           Provisions Consistent with Plan.  This Agreement is intended to be construed to be consistent with, and is subject to, all applicable provisions of the Plan, including Section 9.5 thereof, and the Plan is incorporated herein by reference.  In the event of a conflict between the provisions of this Agreement and the Plan, the provisions of the Plan shall prevail.

 

13.           Clawback. By accepting the grant made under this Agreement, the Grantee agrees that the Company or its affiliate bank may recover some or all of the Common Stock transferred to Grantee under this Agreement, or recoup some or all of the value thereof via offset from other amounts owed to the Grantee by the Company or its affiliate bank, at any time in the three calendar years following such Common Stock's delivery to Grantee, if and to the extent that the Company's compensation committee concludes that (i) federal or state law or the listing requirements of the exchange on which the Company's stock is listed for trading so require, (ii) the performance criteria required herein were not met, or not met to the extent necessary to support delivery of the same number of shares, or (iii) as required by Section 304 of the Sarbanes-Oxley Act of 2002, after a restatement of the Company's financial results as reported to the Securities and Exchange Commission. Grantee agrees to promptly comply with any Company demand for recovery or recoupment.

14.           Post-Vesting Holding Requirement.  By accepting delivery of any Common Stock (net of such shares withheld for taxes as provided in Section 6 above) at vesting of an RSU hereunder, Grantee accepts and agrees to the following restriction on transfer of that Common Stock, for a period of 12 months following its issuance hereunder, or, if earlier, until the date that Grantee incurs a Termination of Employment (the "Holding Period").  During the Holding Period, Grantee may not sell, assign, gift or otherwise transfer the Common Stock delivered hereunder, other than in connection with a Change in Control.  The Company may hold Grantee's issued Common Shares in escrow during this Holding Period, or may place a legend on such certificates, as it deems necessary or appropriate to enforce this holding requirement.