KENTUCKY NATIONAL BANCORP, INC.
DIRECTOR FEE DEFERRAL PLAN
ARTICLE I
ESTABLISHMENT OF THE PLAN
1.01 The Company hereby establishes this Plan upon the
terms and conditions hereinafter stated.
1.02 Through acceptance of their appointment to the
Committee, each member of the Committee hereby accepts his or
her appointment hereunder upon the terms and conditions
hereinafter stated.
ARTICLE II
PURPOSE OF THE PLAN
2.01 The purpose of the Plan is to compensate Directors
of the Company, the Bank and their Affiliates through the
issuance of Shares in lieu of cash fees for service on the
Board.
ARTICLE III
DEFINITIONS
The following words and phrases when used in this Plan with
an initial capital letter, shall have the meanings set forth
below unless the context clearly indicates otherwise. Wherever
appropriate, the masculine pronoun shall include the feminine
pronoun and the singular shall include the plural.
3.01 "Affiliate" shall mean any "parent corporation" or
"subsidiary corporation" of the Company, as such terms are
defined in Section 424(e) and (f), respectively, of the Internal
Revenue Code of 1986, as amended.
3.02 "Bank" means Kentucky National Bank.
3.03 "Beneficiary" means the person or persons designated
by a Participant to receive any benefits payable under the Plan
in the event of such Participant's death. Such person or
persons shall be designated in writing on forms provided for
this purpose by the Committee and may be changed from time to
time by similar written notice to the Committee. In the absence
of a written designation, the Beneficiary shall be the
Participant's surviving spouse, if any or if none, his estate.
3.04 "Board" means the Board of Directors of the Company.
3.05 "Committee" means the Board or the Director Fee
Deferral Plan Committee appointed by the Board pursuant to
Article IV hereof.
3.06 "Company" means Kentucky National Bancorp, Inc.
3.07 "Director" means a member of the Board, an advisor
to the Board designated by the Board and any member of the board
of directors of an Affiliate whose members the Board has by
resolution designated as being eligible for participation in
this Plan.
3.08 "Disability" shall mean a physical or mental
condition, which in the sole and absolute discretion of the
Committee, is reasonably expected to be of indefinite duration
and to substantially prevent a Participant from fulfilling his
or her duties or responsibilities to the Company or an
Affiliate.
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3.09 "Effective Date" means the date on which the Plan
first becomes effective, as determined under Section 8.06
hereof.
3.10 "Non-employee Director" means shall mean any member
of the Board who, at the time discretion under the Plan is
exercised, is a "Non-Employee Director" within the meaning of
Rule 16b-3 of the Securities Exchange Act of 1934.
3.11 "Participant" means a Director who has been granted
Shares pursuant to this Plan.
3.12 "Plan" means this Kentucky National Bancorp, Inc.
Director Fee Deferral Plan.
3.13 "Plan Year" means the 12 month period ending
December 31 of each year. The initial Plan Year shall begin on
January 1, 2000 and end December 31, 2000.
3.14 "Share" means one share of Common Stock, par value
$.01 per share, of Kentucky National Bancorp, Inc.
ARTICLE IV
ADMINISTRATION OF THE PLAN
4.01 ROLE AND POWERS OF THE COMMITTEE. The Plan shall be
administered and interpreted by the Committee, which shall
consist of not less than two members of the Board who are Non-
Employee Directors. In the absence at any time of a duly
appointed Committee, the Plan shall be administered by those
members of the Board who are Non-Employee Directors, and by the
Board if there are less than two Non-Employee Directors.
The Committee shall have all of the powers allocated to it
in this and other Sections of the Plan. Except as limited by
the express provisions of the Plan or by resolutions adopted by
the Board, the Committee shall have sole and complete authority
and discretion (i) to grant Shares as payment for Board fees to
Participants, (ii) to interpret the Plan, (iii) to prescribe,
amend and rescind rules and regulations relating to the Plan and
(iv) to make other determinations necessary or advisable for the
administration of the Plan. The Committee shall have and may
exercise such other power and authority as may be delegated to
it by the Board from time to time. Subject to Section 4.02, the
interpretation and construction by the Committee of any
provisions of the Plan hereunder shall be final and binding.
The Committee shall act by vote or written consent of a majority
of its members, and shall report its actions and decisions with
respect to the Plan to the Board at appropriate times, but in no
event less than one time per calendar year.
4.02 ROLE OF THE BOARD. The members of the Committee
shall be appointed or approved by, and will serve at the
pleasure of, the Board. The Board may in its discretion from
time to time remove members from, or add members to, the
Committee. The Board shall have all of the powers allocated to
it in this and other Sections of the Plan, may take any action
under or with respect to the Plan which the Committee is
authorized to take, and may reverse or override any action taken
or decision made by the Committee under or with respect to the
Plan, provided, however, that the Board may not revoke any
Shares already granted or impair a Participant's rights.
Further, with respect to all actions taken by the Board in
regard to the Plan, such action shall be taken by a majority of
the Board where such a majority of the directors acting in the
matter are Non-Employee Directors.
4.03 LIMITATION ON LIABILITY. No member of the Board or
the Committee shall be liable for any determination made in good
faith with respect to the Plan or any Shares granted under it.
If a member of the Board or the Committee is a party or is
threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal,
administrative or investigative, by reason of anything done or
not done by him in such capacity under or with respect to the
Plan, the Company shall indemnify such member to the fullest
extent permitted under Company's governing instruments with
respect to the indemnification of Directors.
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ARTICLE V
PLAN SHARE RESERVE
5.01 SHARES SUBJECT TO THE PLAN. Except as otherwise
required under Article 8.01, the aggregate number of Shares
deliverable pursuant to the Plan shall not exceed 18,000 Shares.
Such Shares may either be authorized but unissued shares, shares
held in Treasury or share held in a grantor trust held by the
Bank.
ARTICLE VI
ELIGIBILITY; ALLOCATIONS
6.01 ELIGIBILITY. The Committee shall grant each
Director shares of Common Stock, as payment in lieu of his or
her cash Board fees (including Board fees earned prior to the
Effective Date), pursuant to procedures established by the
Committee.
ARTICLE VII
EARNINGS AND DISTRIBUTION OF SHARES
7.01 EARNING SHARES; FORFEITURES. All Shares granted to
Participants shall be fully vested upon grant and nonforfeitable
by a Participant.
7.02 DISTRIBUTION OF SHARES.
(a) TIMING OF DISTRIBUTIONS: General Rule.
Except as provided in subsections (c), and (d) below, Shares
shall be distributed no less frequently than as soon as
practicable after the calendar year for which the Shares have
been earned. As soon as practicable after the Effective Date,
Shares shall be distributed to Directors for all Board fees that
had been deferred through December 31, 1999. No fractional
shares shall be distributed.
(b) FORM OF DISTRIBUTION. The Committee shall
distribute all Shares in the form of Common Stock.
(c) WITHHOLDING. The Company's obligation to
deliver Shares shall be subject to the Participant's
satisfaction of any applicable federal, state or local income
and employment tax withholding obligation. The Committee, in
its discretion, may permit the Participant to satisfy the
obligation, in who or in part, by irrevocably electing to have
the Company withhold Shares, or to deliver to the Company,
Shares that the Participant already owns having a value equal to
the amount required to be withheld. The value of the shares to
be withheld, or delivered to the Company, shall be based on the
market value of the Shares on the date the amount of tax to be
withheld is determined. As an alternative, the Company may
return, or sell without notice a number of such shares
sufficient to cover the amount required to be withheld.
(d) REGULATORY EXCEPTIONS. No Shares shall be
distributed unless and until all of the requirements of all
applicable law and regulation shall have been fully complied
with, including the receipt of approval of the Plan by the
shareholders of the Company by such vote, if any, as may be
required by applicable law and regulations.
ARTICLE VIII
MISCELLANEOUS
8.01 ADJUSTMENTS FOR CAPITAL CHANGES.
(a) RECAPITALIZATIONS; STOCK SPLITS, ETC. The
number and kind of shares which may be granted under the Plan
shall be proportionately adjusted for any increase, decrease,
change or exchange of shares of Common Stock for a different
number or kind of shares or other securities of the Company
which results from a
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merger, consolidation, recapitalization, reorganization,
reclassification, stock dividend, split-up, combination of
shares, or similar event in which the number or kind of shares
is changed without the receipt or payment of consideration by
the Company.
(b) TRANSACTIONS IN WHICH THE COMPANY IS NOT THE
SURVIVING ENTITY. In the event of (i) the liquidation or
dissolution of the Company, (ii) a merger or consolidation in
which the Company is not the surviving entity, or (iii) the sale
or disposition of all or substantially all of the Company's
assets (any of the foregoing to be referred to herein as a
"Transaction"), all outstanding Shares shall be adjusted for any
change or exchange of shares of Common Stock for a different
number or kind of shares or other securities which results from
the Transaction.
(c) CONDITIONS AND RESTRICTIONS ON NEW, ADDITIONAL,
OR DIFFERENT SHARES OR SECURITIES. If, by reason of any
adjustment made pursuant to this Section, a Participant
becomes entitled to new, additional, or different shares of
stock or securities, such new, additional, or different shares
of stock or securities shall thereupon be subject to all of the
conditions and restrictions which were applicable to the shares
before the adjustment was made. In addition, the Committee
shall have the discretionary authority to impose on the Shares
subject to Plan Share Awards to Employees such restrictions as
the Committee may deem appropriate or desirable, including but
not limited to a right of first refusal, or repurchase option,
or both of these restrictions.
(d) OTHER ISSUANCES. Except as expressly provided
in this Section, the issuance by the Company or an Affiliate of
shares of stock of any class, or of securities convertible into
shares of Common Stock or stock of another class, for cash or
property or for labor or services either upon direct sale or
upon the exercise of rights or warrants to subscribe therefor,
shall not affect, and no adjustment shall be made with respect
to, the number or class of shares of Common Stock reserved for
issuance under the Plan.
8.02 AMENDMENT AND TERMINATION OF PLAN. The Board may,
by resolution, at any time amend or terminate the Plan; provided
that no amendment or termination of the Plan shall, without the
written consent of a Participant, impair any rights or
obligations under Shares theretofore granted to the Participant.
8.03 NO EMPLOYMENT OR OTHER RIGHTS. Neither the Plan nor
any grant of Shares hereunder nor any action taken by the
Committee or the Board in connection with the Plan shall create
any right, either express or implied, on the part of any
Director to continue in the service of the Company, the Bank, or
an Affiliate thereof.
8.04 VOTING AND DIVIDEND RIGHTS. No Participant shall
have any voting or dividend rights or other rights of a
stockholder in respect of any Shares prior to the time said
Shares are actually distributed to him.
8.05 GOVERNING LAW. The Plan and Trust shall be governed
and construed under the laws of the Commonwealth of Kentucky to
the extent that the Indiana Business Corporation Act or federal
law shall apply.
8.06 EFFECTIVE DATE. The Plan shall become effective
upon its approval by a favorable vote of shareholders of the
Company who own at least a majority of the total votes cast at a
duly called meeting of the Company's shareholders held in
accordance with applicable laws. In no event shall Shares be
made prior to the Effective Date.
8.07 TERM OF PLAN. This Plan shall remain in effect its
termination by the Board. Termination of the Plan shall not
affect any Shares previously granted, and such Shares shall
remain valid and in effect until they have been earned and paid,
or by their terms expire or are forfeited.
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