Effective February 25, 2020, the Compensation Committee of the Board of Directors of Stock Yards Bancorp, Inc. (the "Company") approved a revised form of grant agreement for one type of equity compensation award, performance-vested stock units (PSUs), for executive officers under the Company's 2015 Omnibus Equity Compensation Plan (the "Plan"), and awarded a maximum of 65,111 PSUs to a group consisting of the Chief Executive Officer and six other executives of the Company's subsidiary, Stock Yards Bank & Trust Company.
The PSUs will each vest if and to the extent that certain financial performance is achieved in a three-year performance period (2020-2022 in the case of the most recent awards) and will entitle each grantee to issuance of one share of common stock for each vested PSU shortly after expiration of that three-year performance period. Vesting is based on two equally weighted criteria. The first is the Company's cumulative earnings per share (“EPS”) during that period, compared to threshold, target and maximum EPS goals, as defined in the agreement, approved by the Committee. The second criteria measures where the Company falls in a percentile ranking among peers' return on average assets. The peer group to which the Company will be ranked includes all publicly traded banks with assets between $1.5 and $7.0 billion, as ranked by S&P Global Market Intelligence. Each award is subject to the Performance-Vested Stock Unit Grant Agreement between the Company and each of the executive officers, with the form of such agreement being the same in each case.
The granted PSUs generally require the executive to remain employed until the end of the performance period in order to vest and be paid in shares of common stock, with prorated awards still paid to those who leave the Bank mid-cycle due to death, disability or termination on or after age 60 with 10 or more years of service. PSUs also vest at the target level (40% of the maximum) if a change of control occurs before the performance period ends and are paid out shortly after the change of control if one occurs. Executives do not receive the benefit of any dividends or other distributions paid on stock related to PSUs until after the stock is actually issued, if vested, at the end of the performance period. In addition, PSUs are subject to clawback under the Company's clawback policy, and the stock issued at the end of the performance period (net of shares withheld for taxes) must be retained for a minimum holding period of one year, unless the executive's employment ends earlier.
The foregoing description of the PSU grant agreement is qualified in its entirety by the full text of the form of agreement, which is attached as Exhibit 10.1 to this Current Report on Form 8-K.
D. Exhibits
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
