REPUBLIC BANCORP, INC.
1995 STOCK OPTION PLAN
[All numbers have been restated to reflect a 2-for-1 stock split which occurred
on 7/1/98]
Section 1 -- PURPOSE
The purpose of the 1995 Stock Option Plan (the "Plan") is to promote
the interests of Republic Bancorp, Inc. (the "Company"), and its shareholders by
providing a means to attract, retrain and motivate employees of the Company and
its subsidiaries, and to encourage stock ownership in the Company by such
employees and provide them with a means to acquire a proprietary interest in the
Company.
The stock options provided under the Plan will enable the Company to
respond to changes in compensation practices, tax laws, accounting regulations,
and the size and diversity of its business.
Section 2 -- DEFINITIONS
For purposes of the Plan, the following terms shall have the meanings
below unless the context clearly indicates otherwise:
2.1 "Bank" shall mean Republic Bank & Trust Company
2.2 "Board of Directors" shall mean the Board of Directors of the
Company
2.3 "Change of Control" of the Company shall mean (i) an event or
series of events which have the effect of any "person" as such term is used in
Section 13(d) and 14(d) of the Exchange Act, becoming the "beneficial owner" as
defined in Rule 13d-3 under the Exchange Act, directly or indirectly, of
securities of the Company or the Bank representing a greater percentage of the
combined voting power of the Company's or Bank's then outstanding stock, than
the Trager Family Members as a group; (ii) an event or series of events which
have the effect of decreasing the Trager Family Members' percentage ownership of
the combined voting power of the Company's or Bank's then outstanding stock to
less than 25%; or (iii) the business of the Company or Bank is disposed of
pursuant to a partial or complete liquidation, sale of assets, or otherwise. A
Change in Control shall also be deemed to occur if (i) the Company or Bank
enters into an agreement, the consummation of which would result in the
occurrence of a Change in Control, (ii) any person (including the Company)
publicly announces an intention to take or to consider taking actions which have
consummated would constitute a Change in Control (iii) the Board adopts a
resolution to the effect that a potential Change in Control for purposes of this
Plan has occurred. For purposes of this paragraph, "Trager Family Member" shall
mean Bernard M. Trager, Jean S. Trager and any of their lineal descendants, and
any corporation, partnership, limited liability company or trust the majority
owners or beneficiaries of which are directly or indirectly through another
entity, Bernard M. Trager, Jean S. Trager, or one or more of their lineal
descendants.
2.4 "Code" shall mean the Internal Revenue Code of 1986, as it may
be amended from time to time.
2.5 "Committee" shall mean the Compensation/Human Resources
Committee appointed by the Board of Directors
2.6 "Company" shall mean Republic Bancorp, Inc.
2.7 "Disability" shall mean permanent disability within the
meaning of Section 22(e)(3) of the Code. The determination of the Committee or
any question involving disability shall be conclusive and binding.
2.8 "Employee" shall mean an employee of the Company or any of its
Subsidiaries who has been designated by the Chairman of the Board of Directors
and approved by the Committee, under the criteria in Section 5, as eligible to
participate in the Plan.
2.9 "Fair Market Value" shall have the meaning specified in
Section 6.2
2.10 "Incentive Stock Option" shall mean an option to purchase Stock
granted under Section 6.2 of the Plan which is designated as an Incentive Stock
Option and is intended to meet the requirements of Section 422 of the Code.
2.11 "Nonqualified Stock Option" shall mean an option to purchase Stock
granted under Section 6.2 of the Plan which is not intended to be an Incentive
Stock Option.
2.12 "Option" shall mean an Incentive Stock Option or a Nonqualified
Stock Option.
2.13 "Option Period" shall mean the period from the date of the grant
of an Option to the date when the Option expires as stated in the terms of the
Stock Option Agreement.
2.14 "Optionee" shall mean an Employee who has been granted an option
to purchase shares of Stock under the provisions of the Plan.
2.15 "Plan" shall mean this Republic Bancorp, Inc. 1995 Stock Option
Plan.
2.16 "Stock" shall mean the Company's voting common stock of no par
value.
2.17 "Stock Option Agreement" shall mean an agreement between an
Optionee and the Company covering the specific terms and conditions of an
Option.
2.18 "Subsidiary" or "Subsidiaries" shall mean any corporation which at
the time qualifies as a subsidiary of the Company under the definition of
"subsidiary corporation" in Section 424(f) of the Code.
2.19 "Termination of Employment" shall be deemed to have occurred at
the close of business on the last day on which an Employee is carried as an
active employee on the records of the Company or any of its Subsidiaries. The
Committee shall determine whether an authorized leave of absence, or other
absence on military or government service, constitutes severance of the
employment relationship between the Company or a Subsidiary and the Employee.
Section 3 -- STOCK SUBJECT TO PLAN
3.1 AUTHORIZED STOCK. Subject to adjustment as provided in this
Section, the aggregate number of shares of Stock subject to an Option under the
Plan shall not exceed 2,000,000 shares of Class A Common Stock and 200,000
Shares of Class B Common Stock. Stock delivered under the Plan may consist, in
whole or in part, of authorized and unissued shares or treasury shares. Upon
approval by the Board of Directors, the Company may from time to time acquire
shares of Stock on the open market upon such terms as it deems appropriate for
reserve in connection with exercises hereunder.
3.2 EFFECT OF EXPIRATIONS. If any Option granted under the Plan expires
or terminates without exercise, the Stock no longer subject to such Option shall
be available to be re-awarded under the Plan.
3.3 ADJUSTMENTS IN AUTHORIZED SHARES. In the event of any merger,
reorganization, consolidation, recapitalization, separation, liquidation, stock
dividend, split-up, share combination, or other change in the corporate
structure of the Company affecting the number of shares of Stock or the kind of
shares or securities an appropriate and proportionate adjustment shall be made
in the number and kind of shares which may be delivered under the Plan, and in
the number and kind of or price of share subject to outstanding Options;
provided that the number of shares subject to any Option shall always be a whole
number. Any adjustment of an Incentive Stock Option under this Section shall be
made in such a manner so as not to constitute a "modification" within the
meaning of Section 424(h) of the Code. If the Company shall at any time merge or
consolidate with or into another corporation or association, each Optionee will
thereafter receive, upon the exercise of an Option, the securities or property
to which a holder of the number of shares of Stock then deliverable upon the
exercise of such Option would have been entitled upon such merger or
consolidation, and the Company shall take such steps in connection with such
merger or consolidation as may be necessary to assure that the provisions of
this Plan shall thereafter be applicable, as nearly as is reasonably possible,
in relation to any securities or property thereafter deliverable upon the
exercise of such Option. A sale of all or substantially all the assets of the
Company for a consideration (apart from the assumption of obligations)
consisting primarily of securities shall be deemed a merger or consolidation for
the foregoing purposes.
Section 4 -- ADMINISTRATION
4.1 THE COMMITTEE. The Plan shall be administered by the Committee.
4.2 AUTHORITY OF THE COMMITTEE. Subject to the provisions of the Plan
and upon the submission or request of the Chairman of the Board of Directors,
the Committee shall have sole power to (i) construe and interpret the Plan; (ii)
to establish, amend or waive rules and for its administration; (iii) to
determine and accelerate exercisability of any Option; (iv) to correct
inconsistencies in the Plan or in any Stock Option Agreement, or any other
instrument relating to an Option; and (v) subject to the provisions of Section 8
to amend the terms and conditions of any outstanding Option, to the extent such
terms and conditions are within the discretion of the Committee as provided in
the Plan. Notwithstanding the foregoing, no action of the Committee may, without
the consent of the person or persons entitled to exercise any outstanding
Option, adversely affect the rights of such person or persons. Nothing in this
Section 4.2 shall be construed to give the Committee member the authority to
select any Committee as a person to whom stock may be allocated pursuant to this
Plan, or to determine the number or maximum number of shares of Stock which may
be allocated to any Committee member.
4.3 SELECTION OF EMPLOYEE PARTICIPANTS. The Chairman of the Board of
Directors shall recommend the Employees to whom Options should be granted and
the number of such Options, and the Committee shall have the authority to
approve such grants.
4.4 DECISIONS BINDING. All determinations and decisions made by the
Committee pursuant to the provisions of the Plan shall be final, conclusive and
binding on all persons, including the Company, its shareholders. Optionees and
their estates and beneficiaries.
4.5 DELEGATION OF CERTAIN RESPONSIBILITIES. The Committee may, in its
sole discretion, delegate to appropriate officers of the Company the
administration of the Plan under this Section 4; provided, however, that no such
delegation by the Committee shall be made with respect to the administration of
the Plan as its affects officers or directors of the Company and provided
further that the Committee may not delegate its authority to correct
inconsistencies in the Plan. The Committee may delegate to the Chairman of the
Company its authority under this Section 4 to grant Options to Employees who are
not officers or directors of the Company. All authority delegated by the
Committee under this Section 4.5 shall be exercised in accordance with the
provisions of the Plan and any guidelines for the exercise of such authority
that may from time to time be established by the Committee.
4.6 PROCEDURES OF THE COMMITTEE. All determinations of the Committee
shall be made by not less than a majority of its members present at a meeting
(in person or otherwise) at which a quorum is present, or by unanimous written
consent. A majority of the entire Committee shall constitute a quorum for the
transaction of business. To the fullest extent permitted by law, no member of
the Committee shall be liable, and the Company shall indemnify each Committee
member, for any act or omission with respect to his services on the Committee.
Service on the Committee shall constitute service as a director of the Company
so that members of the Committee shall be entitled to indemnification and
reimbursement for services on the Committee to the same extent as for services
as directors of the Company.
4.7 STOCK OPTION AGREEMENTS. Each Option under the Plan shall be
evidenced by a Stock Option Agreement which shall be signed by the Chairman of
the Board and by the Optionee, and shall contain such terms and conditions as
may be approved by the Committee, which need not be the same in all cases. Any
Stock Option Agreement may be supplemented or amended in writing from time to
time as approved by the Committee, provided that the terms of such Agreements as
amended or supplemented, as well as the terms of the original Stock Option
Agreement, are not inconsistent with the provisions of the Plan. An Employee who
receives an Option under the Plan shall not, with respect to the Option, be
deemed to have become an Optionee or an Optionee, or to have any rights with
respect to the Option, unless and until the Employee has executed a Stock Option
Agreement or other instrument evidencing the Option and shall have delivered an
executed copy thereof to the Company, and has otherwise complied with the
applicable terms and conditions of the Option.
Section 5 -- ELIGIBILITY
Employees of the Company and its Subsidiaries who are expected to
contribute substantially to the growth and profitability of the Company and its
Subsidiaries are eligible to receive Options.
Section 6 -- GRANT OF OPTIONS
6.1 GENERAL. Any Option granted to an Employee may be made either alone
or in conjunction with any other type of Option which may be granted under the
Plan.
6.2 OPTION PRICE. The purchase price per share of Stock covered by an
option shall be determined by the Committee but shall not be less than 100% of
the fair market value (the "Fair Market Value") of such Stock on the date the
Option is granted. The Fair Market Value shall be determined by the Committee in
its sole discretion, provided that, if the Company's Stock is publicly traded on
an established securities market, the Fair Market Value shall be the closing
market price of the Company's Stock as reported on the date of grant, or, if no
trades were reported on that date, the closing price on the most recent trading
day immediately preceding the date of the grant. An Incentive Stock Option
granted to any person who, at the time the Option is granted, owns (within the
meaning of Section 424(d) of the Code) stock possessing more than 10% of the
total combined voting power of all classes of stock of the Company or of its
parent or any Subsidiary, shall have an exercise price which is at least 110% of
the Fair Market Value of the Stock subject to the Option.
6.3 OPTION PERIOD. The Option Period shall be determined by the
Committee, but no Option shall be exercisable later than ten years from the date
of grant. Notwithstanding the foregoing, in the case of an Optionee owning
(within the meaning of Section 424(d) of the Code), at the time an Incentive
Stock Option is granted, more than 10% of the total combined voting power of all
classes of stock of the Company or any Subsidiary, such Incentive Stock Option
shall not be exercisable later than five years from the date of grant. No Option
may be exercised at any time unless such Option is valid and outstanding as
provided in this Plan.
6.4 LIMITATION ON AMOUNT OF INCENTIVE STOCK OPTIONS. The aggregate Fair
Market Value (determined as of the time the Option is granted) of the Stock with
respect to which an Optionee=s Incentive Stock Options are exercisable for the
first time during any calendar year (under this and all other stock option plans
of the Company, any Subsidiary or any parent corporation) shall not exceed
$100,000. Options or portions of Options exercisable as a result of acceleration
under Section 10.8 in excess of the $100,000 limit described herein shall be
treated as a Nonqualified Stock Option for tax purposes.
6.5 NONTRANSFERABILITY OF OPTIONS. No Option shall be transferable by
the Optionee otherwise than by will or by the laws of descent and distribution,
and such option shall be exercisable, during the Optionee's lifetime, only by
the Optionee.
Section 7 -- EXERCISE OF OPTIONS
7.1 EXERCISABILTY. An Option may be exercised, so long as it is valid
and outstanding, from time to time in part or as a whole, subject to any
limitations with respect to the number of shares for which the Option may be
exercised at a particular time and to such other conditions (e.g., exercise
could be conditioned on performance) as the Committee in its discretion may
specify upon granting the Option or as otherwise provided in Section 7.
7.2 METHOD OF EXERCISE. To exercise an Option, the Optionee or the
other person(s) entitled to exercise the Option shall give written notice of
exercise to the Committee, specifying the number of full shares to be purchased.
Such notice shall be accompanied either by payment in full in cash for the Stock
being purchased plus, in the case of Nonqualified Stock Options, any required
withholding tax as provided in Section 11. If permitted by the Committee, in its
sole discretion, payment in full or in part may by made in the form of Stock
owned by the Optionee for at least 6 months (based on the Fair Market Value of
the Stock on the date the Option is exercised) evidenced by negotiable Stock
certificates registered either in the sole name of the Optionee or the names of
the Optionee and spouse, or by any combination of cash or shares. No shares of
Stock shall be issued unless the Optionee has fully complied with the provisions
of this Section 7.2.
7.3 TERMINATION OF EMPLOYMENT BY EMPLOYEE. After an Employee's
Termination of Employment, an Option may not be exercised, except as may be
specifically allowed in the applicable Stock Option Agreement upon death or
Disability but in no event after the expiration date of the Option as specified
in the applicable Stock Option Agreement. Except to the extent shorter periods
are provided in the Stock Option Agreement by the Committee, an Employee's right
to exercise an Incentive Stock Option shall terminate (i) at the expiration of
one year in the event of Disability of the Employee, or (ii) at the expiration
of one year after the Employee's death, if the Employee's Termination of
Employment occurs by reason of death or Disability; any Option exercised after
death may be exercised in full by the legal representative of the estate of the
Employee or by the person or persons who acquire the right to exercise such
Option by bequest or inheritance.
Section 8 - AMENDMENTS AND TERMINATION
8.1 AMENDMENTS AND TERMINATION. The Board of Directors may terminate,
suspend, amend of alter the Plan, but no action of directors may:
(a) Impair or adversely affect the rights of an Optionee under
an Option theretofore granted, without the Optionee's consent; or,
(b) Without the approval of the shareholders:
(i) Increase the total amount of Stock which may
be delivered under the Plan except as is
provided in Section 3 of the Plan;
(ii) Decrease the option price of any Option to
less than the option price on the date the
Option was granted;
(iii) Extend the maximum Option Period, or
(iv) Extend the period during which Options may
be granted, as specified in Section 13.
8.2 CONDITIONS ON OPTIONS. In granting an Option, the Committee may
establish any conditions that it determines are consistent with the purposes and
provisions of the Plan, including, without limitation, a condition that the
granting of an Option is subject to the surrender for cancellation of any or all
outstanding Options held by the Optionee. Any new Option made under this section
may contain such terms and conditions as the Committee may determine, including
an exercise price that is lower than that of any surrendered Option.
8.3 SELECTIVE AMENDMENTS. Any amendment or alteration of the Plan
may be limited to, or may exclude from its effect, particular classes of
Optionees.
Section 9 - RESTRICTION ON TRANSFER
9.1 RESTRICTION ON TRANSFER. No Optionee shall sell, assign, transfer
or otherwise dispose of any of his Option Stock for (i) at least 12 months
following exercise of the Option, or (ii) before his death or Disability if such
event occur sooner, and thereafter not until (a) he has received a bona fide
written offer to buy the Option Stock and has delivered to the Company an
irrevocable written offer to sell any such shares of Option Stock at any time
within 60 days after delivery of the offer and at a price per share equal to the
bona fide offer, and (b) the Company shall have failed to accept such offer
within the 60-day period. To accept the offer, the Company shall deliver notice
of its acceptance of its offer with 60 days after delivery of offer. Payment for
the Option Stock shall be made as provided in Section 9.4. The restrictions
imposed by this Section 9.1 shall not apply to the transfer by operation of law
to a deceased Optionee's personal representative or to persons who acquire the
Option Stock by bequest or inheritance (the "Heir"), but shall apply to the
Option Stock further transferred by that personal representative or Heir.
9.2 DEATH OR DISABILITY. With respect to any Option Stock acquired by
exercise of an Option after the Optionee's death or Disability, the personal
representative or Heir shall sell his Option Stock and the Company shall
purchase his Option Stock at a price per share equal to Book Value divided by
the total number of shares of Stock outstanding as of the date Book Value is
determined. Payment for the Option Stock shall be made as provided in Section
9.4. For purposes of this paragraph, "Book Value" shall be determined as of the
end of the month preceding the date of sale as determined on the regular books
of account of the Company.
9.3 EFFECT OF A CHANGE IN CONTROL. If a Change in Control occurs as a
result of the sale of securities of the Company or Bank for cash, the purchase
price in Section 9.2 shall be the greater of Fair Market Value, or the case sale
price per share of stock involved in the Change in Control transaction. If the
Option Stock is converted into the stock of another entity, or otherwise becomes
readily tradable on a public securities market, the Optionee shall not be bound
to sell his Option Stock under these stock restrictions and the right of first
refusal and restriction on transfer in Section 9.1 shall no longer apply and
neither the Optionee nor the Company shall be bound thereby.
9.4 PAYMENT FOR OPTION STOCK. The Company shall make payment in cash for
any Option Stock that it purchases pursuant to this Section 9 within 30 days
after the date when the Company delivers notice of its acceptance of the offer
made pursuant to Section 9.1, or six months after the death or Disability that
triggers purchases pursuant to Section 9.2. The Optionee or personal
representative shall surrender certificates representing the offered Option
Stock at the time the Company makes such payment.
9.5 RESTRICTION ON PLEDGE. no optionee shall, without the prior written
consent of the Company, pledge, mortgage or otherwise encumber any of his Option
Stock.
Section 10 - GENERAL PROVISIONS
10.1 UNFUNDED STATUS OF PLAN. The Plan is intended to constitute an
"unfunded" plan for incentive compensation, and the Plan is not intended to
constitute a plan subject to the provisions of the Employee Retirement Income
Security Act of 1974, as amended, and shall not extend, with respect to any
payments not yet made to a Optionee or Optionee, any rights that are greater
than those of a general creditor of the Company.
10.2 TRANSFERS, LEAVES OF ABSENCE AND OTHER CHANGES IN EMPLOYMENT STATUS.
For purposes of the Plan (i) a transfer of an Employee from the Company to a
Subsidiary, or vice versa, or from one Subsidiary to another; or (ii) a leave of
absence, duly authorized in writing by the Company or a Subsidiary, for military
service or sickness, or for any other purpose approved by the Company or a
Subsidiary if the period of such leave does not exceed 90 days; or (iii) any
leave of absence in excess of 90 days approved by the Company, shall not be
deemed a Termination of Employment. The Committee, in its sole discretion
subject to the terms of the Stock Option Agreement, shall determine the
disposition of all Options made under the Plan in all cases involving any
substantial change in employment status other than as specified herein.
10.3 DISTRIBUTION OF STOCK--SECURITIES RESTRICTIONS. The Committee may
require Optionees receiving Stock pursuant to any Option under the Plan to
represent to and agree with the Company in writing that the Optionee is
acquiring the shares for investment without a view to distribution thereof. No
shares shall be issued or transferred pursuant to an Option unless such issuance
or transfer complies with all relevant provisions of law, including but not
limited to, the (i) limitations, if any, imposed in the state of issuance or
transfer, (ii) restrictions, if any, imposed by the Securities Act of 1933, as
amended, the Securities Exchange Act of 1934, as amended, and the rules and
regulations promulgated thereunder, and (iii) requirements of any stock exchange
upon which the Company's shares may then be listed. The certificates for such
shares may include any legend which the Committee deems appropriate to reflect
any restrictions on transfer.
10.4 ASSIGNMENT PROHIBITED. Subject to the provisions of the Plan and the
Stock Option Agreement, no Option shall be assigned, transferred, pledged or
otherwise encumbered by the Optionee otherwise than by will or by the laws of
descent and distribution, and such Options shall be exercisable, during the
Optionee's lifetime, only by the Optionee. Options shall not be pledged or
hypothecated in any way, and shall not be subject to any execution, attachment,
or similar process. Any attempted transfer, assignment, pledge, hypothecation or
other disposition of an Option or Option Stock contrary to the provisions of the
Plan, or the levy of any process upon an Option or Option Stock, shall be null,
void and without effect.
10.5 OTHER COMPENSATION PLANS. Nothing contained in the Plan shall prevent
the Company or the Bank from adopting other compensation arrangements, subject
to stockholder approval if such approval is required.
10.6 AUTHORITY LIMITED TO COMMITTEE. No person shall at any time have any
right to receive an Option hereunder and no person shall have authority to enter
into an agreement on behalf of the Company for the granting of an Option or to
make any representation or warranty with respect thereto, except as granted by
the Committee. Optionees shall have no rights in respect to any Option except as
set forth in the Plan and the applicable Stock Option Agreement.
10.7 NO RIGHT TO EMPLOYMENT. Neither the action of the Company in
establishing the Plan, nor any action taken by it or by the Board of Directors
or the Committee under the Plan or any Stock Option Agreement, or any provision
of the Plan, shall be construed as giving to any person the right to be retained
in the employ of the Company or any Subsidiary.
10.8 CHANGE OF CONTROL. In the event of a Change of Control, Options
granted under the Plan shall become exercisable in full whether or not otherwise
exercisable at such time, and any such Option shall remain exercisable in full
thereafter until it expires pursuant to its terms.
10.9 OPTION PERIOD. No Option granted under the Plan shall be exercisable
or payable more than 10 years from the date of grant.
10.10 NOT A SHAREHOLDER. The person or persons entitled to exercise, or who
have exercised, an Option shall not be entitled to any rights as a shareholder
of the Company with respect to any shares subject to the Option until such
person or persons shall have become the holder of record of such shares.
Section 11 - TAXES
11.1 TAX WITHHOLDING. All Optionees shall make arrangements satisfactory to
the Committee to pay to the Company, at the time of exercise in the case of a
Nonqualified Stock Option, any federal, state or local taxes required to be
withheld with respect to such shares. If such Optionee shall fail to make such
tax payments as are required, the Company and its Subsidiaries shall, to the
extent permitted by law, have the right to deduct any such taxes from any
payment of any kind otherwise due to the Optionee.
11.2 SHARE WITHHOLDING. If permitted by the Committee, the withholding
obligation may be satisfied by the Company retaining shares of Stock with a fair
market value equal to the amount required to be withheld.
Section 12 - EFFECTIVE DATE OF PLAN
The Plan shall be effective on the date (the "Effective Date") when the
Board of Directors adopts the Plan, subject to approval of the Plan by a
majority of the total votes eligible to be cast at a meeting of shareholders
following adoption of the Plan by the Board of Directors, which vote shall be
taken within 12 months of the Effective Date; provided, however, that Options
may be granted before obtaining shareholder approval of the Plan, but any such
Options shall be contingent upon such shareholder approval being obtained and
may not be exercised before such approval.
Section 13 - TERM OF PLAN
Unless terminated earlier by the Board of Directors, no Option shall be
granted under the Plan more than ten years after the Effective Date as defined
in Section 12.
* * * * *
Board Approval: January 12, 1999 /s/ SET
-------------------------
(Secretary's Initials)
Shareholder Approval: January 12, 1995