<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. ____)*
REPUBLIC BANCORP, INC.
(Name of Issuer)
CLASS A COMMON STOCK, NO PAR VALUE
(Title of Class of Securities)
720281 204
(CUSIP Number)
Bernard M. Trager
601 West Market Street
Louisville, Kentucky 40202
(502) 584-3600
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
January 29, 1999
(Date of Event Which Requires Filing of This Statement)
If the filing person has previously filed a statement on Schedule 13G
to report the acquisition that is the subject of this Schedule 13D, and is
filing this schedule because of Rule 13d-1(e),(f) or (g), check the following
box. /__/
*The remainder of this cover page shall be filled out for a reporting
person's initial fling on this form with respect to the subject class of
securities, and for any subsequent amendment containing information which would
alter disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not
be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange
Act of 1934 ("Act") or otherwise subject to the liabilities of that section of
the Act but shall be subject to all other provisions of the Act (however, see
the Notes).
<PAGE> 2
CUSIP NO. - 760281 20 4
(1) Names of Reporting Persons. . . . . . . Bernard M. Trager
I.R.S. Identification Nos. of
Above Persons (entities only) . . . . .
(2) Check the Appropriate Box
if a Member of a Group
(See Instructions). . . . . . . . . . (a)
(b)
(3) SEC Use Only. . . . . . . . . . . . .
(4) Source of Funds (see Instructions). . SC
(5) Check if Disclosure
of Legal Proceedings is
Required Pursuant to
Items 2(d) or 2(e). . . . . . . . . .
(6) Citizenship or Place
of Organization. . . . . . . . . . . . U.S.
Number of Shares Beneficially
Owned by Each Reporting Person
With:
(7) Sole Voting Power. . . . . . . . 1,028,344 <F1>
(8) Shared Voting Power. . . . . . . 7,908,228 <F1><F2>
(9) Sole Dispositive Power . . . . . 1,028,344 <F1>
(10) Shared Dispositive Power . . . . 7,908,228 <F1><F2>
(11) Aggregate Amount Beneficially
Owned by Each Reporting Person . . . .8,936,572 <F1><F2>
(12) Check if the Aggregate Amount
in Row (11) Excludes Certain
Shares (See Instructions). . . . . . .
(13) Percent of Class Represented
by Amount in Row (11) . . . . . . . . . 54.4%
(14) Type of Reporting Person . . . . . . . IN
- ----------
<F1>Includes 544,726 shares of Class B Common Stock of the Issuer (which
is convertible into Class A Common Stock on a one share for one share basis)
held by the reporting person.
<PAGE> 3
<F2>Includes 5,903,612 shares of Class A Common Stock held of record by
Teebank Family Limited Partnership ("Teebank"), 763,984 shares of Class B Common
Stock held of record by Teebank, 620,784 shares of Class A Common Stock held of
record by Jaytee Properties Limited Partnership ("Jaytee"), and 119,694 shares
of Class B Common Stock held of record by Jaytee. The reporting person is a
general and a limited partner and the reporting person's wife is a limited
partner of Teebank and Jaytee. The reporting person shares voting and investment
power over the shares held of record by Teebank and Jaytee with Mr. Steven E.
Trager, Mr. Scott Trager and Mr. Sheldon Gilman, as trustee. Also includes
117,454 shares of Class B Common Stock held by Mrs. Bernard M. Trager. Also
includes 300,000 shares of Class A Common Stock held by the Republic Bancorp,
Inc. Employee Stock Ownership Plan (the "ESOP"), of which the reporting person
is a member of the Administrative Committee. The reporting person shares voting
power over the shares held of record by the ESOP with Mr. William Petter and Mr.
Larry M. Hayes. Also includes 82,700 shares of Class A Common Stock held of
record by Trager Family Foundation, Inc., a 501(c)(3) corporation of which the
reporting person is a director. The reporting person shares voting power over
the shares held by such corporation with Jean S. Trager, Steven E. Trager and
Shelley Trager Lerner, the other directors of such corporation.
<PAGE> 4
Item 1. Security and Issuer.
The class of equity securities to which this statement relates
is the Class A Common Stock, no par value, of Republic Bancorp, Inc., a Kentucky
corporation (the "Issuer").
The Issuer's principal executive office is located at 601 West
Market Street, Louisville, Kentucky 40202.
Item 2. Identity and Background.
(a) The reporting person under this Form 13D is Bernard M.
Trager.
(b) The business address of the reporting person is 601 West
Market Street, Louisville, Kentucky 40202.
(c) The reporting person's principal occupation is Chairman of
Republic Bancorp, Inc., a bank holding company headquartered in Louisville,
Kentucky, 601 West Market Street, Louisville, Kentucky 40202.
(d) During the past five years, the reporting person has not
been convicted in a criminal proceeding (excluding traffic violations or similar
misdemeanors).
(e) During the past five years, the reporting person has not
been a party to a civil proceeding of a judicial or administrative body of
competent jurisdiction and as a result of such proceeding was or is subject to a
judgment, decree or final order enjoining future violations of, or prohibiting
or mandating activities subject to, federal or state securities laws or finding
any violation with respect to such laws.
(f) The reporting person is a citizen of the United States.
Item 3. Sources and Amount of Funds or Other Consideration.
On January 29, 1999, in Louisville, Kentucky, the ESOP
purchased 200,000 shares of Class A Common Stock of the Issuer at a price of
$12.91 per share from the reporting person, and purchased 100,000 shares of
Class A Common Stock of the Issuer at a price of $12.91 per share from Banker's
Insurance Agency, Inc. The ESOP borrowed an aggregate of $3,873,000 to finance
such acquisitions from the Issuer, pursuant to a Loan Agreement, Note, and Stock
Pledge Agreement included as exhibits hereto. The reporting person is a member
of the Administrative Committee of the ESOP, and, as such, shares voting power
<PAGE> 5
over the 300,000 shares of unallocated Class A Common Stock held by the ESOP.
Item 4. Purpose of Transaction.
The ESOP acquired the securities of the Issuer for the benefit
of participants of the ESOP, and to allow such participants to acquire
securities of the Issuer for investment purposes upon allocation of such
securities pursuant to the terms of the ESOP. Depending on market conditions and
other factors that the reporting person may deem relevant to investment
decisions, the reporting person may, individually, in his capacity as a general
partner of Teebank or Jaytee, as a member of the Administrative Committee of the
ESOP, or as a member of the board of directors of the Trager Family Foundation,
Inc., purchase additional shares of Class A Common Stock in the open market or
in private transactions. Depending on these same factors, the reporting person
may sell all or a portion of the shares of the Class A Common Stock that he now
owns or hereafter may acquire, individually, in his capacity as a general
partner of Teebank or Jaytee, as a member of the Administrative Committee of the
ESOP, or as a member of the board of directors of the Trager Family Foundation,
Inc., on the open market or in private transactions. In addition, the reporting
person is a director and Chairman of the Issuer, and, in those capacities has
the ability to influence the Issuer's activities and pursue opportunities
available to the Issuer.
Except as set forth in this Item 4, the reporting person does
not have any present plans or proposals which relate to or would result in: (i)
the acquisition by any person of additional securities of the Issuer, or the
disposition of securities of the Issuer, (ii) an extraordinary corporate
transaction, such as a merger, reorganization or liquidation involving the
Issuer or any of its subsidiaries, (iii) a sale or transfer of a material amount
of assets of the Issuer or of any of its subsidiaries, (iv) any change in the
present board of directors or management of the Issuer, including any plans or
proposals to change the number or term of directors or to fill any existing
vacancies on the board, (v) any material change in the present capitalization or
dividend policy of the Issuer, (vi) any other material change in the Issuer's
business or corporate structure, (vii) changes in the Issuer's charter, bylaws
or instruments corresponding thereto or other actions which may impede the
acquisition of control of the Issuer by any person, (viii) causing a class of
securities of the Issuer to be delisted from a national securities exchange or
to cease to be authorized to be quoted in an inter-dealer quotation system of a
registered national securities association, (ix) a class of equity securities of
the Issuer becoming eligible for termination of registration pursuant to Section
12(g)(4) of the Securities Exchange Act of 1934, or (x) any action similar to
any of those enumerated above.
<PAGE> 6
Item 5. Interest in Securities of the Issuer.
(a) The aggregate number of shares of the Class A Common Stock
that the reporting person owns beneficially, pursuant to Rule 13d-3 under the
Act, is 8,936,572, which constitutes approximately 54.4% of the Class A Common
Stock deemed outstanding pursuant to Rule 13d-3 under the Act.<F1><F2>
(b) Sole Voting Power. . . . . . . . 1,028,344 <F1>
Shared Voting Power. . . . . . . 7,908,228 <F1><F2>
Sole Dispositive Power . . . . . 1,028,344 <F1>
Shared Dispositive Power . . . . 7,908,228 <F1><F2>
The reporting person shares the power to vote or direct the
disposition of such securities with the following persons whose business or
residence addresses and principal occupations are as follows: (a) Steven E.
Trager, 601 W. Market Street, Louisville, Kentucky 40202, President and CEO of
the Issuer and Chairman and CEO of Republic Bank & Trust Company (the "Bank"),
601 W. Market Street, Louisville, Kentucky 40202; (b) Scott Trager, 601 W.
Market Street, Louisville, Kentucky 40202, Vice Chairman of the Issuer and
President of the Bank; (c) Sheldon Gilman, as trustee, 462 S. Fourth Street,
Ste. 500, Louisville, Kentucky 40202, Attorney, Lynch Cox Gilman & Mahan, PSC,
462 S. Fourth Street, Louisville, Kentucky 40202; (d) William Petter, 601 W.
Market Street, Louisville, Kentucky 40202, Vice Chairman and Chief Operating
Officer of the Issuer and Executive Vice President of the Bank; (e) Larry M.
Hayes, P. O. Box 11666, Lexington, Kentucky 40577, President of Midwest
Construction Company, Inc., P. O. Box 11666, Lexington, Kentucky 40577; (f) Jean
S. Trager, the reporting person's spouse, 601 W. Market Street, Louisville,
Kentucky 40202, employed by Banker's Insurance Agency, 601 W. Market Street,
Louisville, Kentucky 40202; and (g) Shelley Trager Lerner, 601 W. Market Street,
Louisville, Kentucky 40202, President, Banker's Insurance Agency, 601 W. Market
Street, Louisville, Kentucky 40202. All of such persons are U.S. citizens, and
none of such persons have been convicted in or is a party to a proceeding
described in Items 2(d) or 2(e).
- ----------
<F1>Includes 544,726 shares of Class B Common Stock of the Issuer (which
is convertible into Class A Common Stock on a one share for one share basis)
held by the reporting person.
<F2>Includes 5,903,612 shares of Class A Common Stock held of record by
Teebank, 763,984 shares of Class B Common Stock held of record by Teebank,
620,784 shares of Class A Common Stock held of record by Jaytee, and 119,694
shares of Class B Common Stock held of record by Jaytee. The reporting person is
a general and a limited partner and the reporting person's wife is a limited
partner of Teebank and Jaytee. The reporting person shares voting and investment
power over the shares held of record by Teebank and Jaytee with Mr. Steven E.
Trager, Mr. Scott Trager and Mr. Sheldon Gilman, as trustee. Also includes
117,454 shares of Class B Common Stock held by Mrs. Bernard M. Trager. Also
includes
<PAGE> 7
300,000 shares of Class A Common Stock held by the Republic Bancorp, Inc.
Employee Stock Ownership Plan (the "ESOP"), of which the reporting person is a
member of the Administrative Committee. The reporting person shares voting power
over the shares held of record by the ESOP with Mr. William Petter and Mr. Larry
M. Hayes. Also includes 82,700 shares of Class A Common Stock held of record by
Trager Family Foundation, Inc., a 501(c)(3) corporation of which the reporting
person is a director. The reporting person shares voting power over the shares
held by such corporation with Jean S. Trager, Steven E. Trager and Shelley
Trager Lerner, the other directors of such corporation.
(c) Except pursuant to the ESOP transactions described in Item
3, and except for (i) a gift made in Louisville, Kentucky on December 14, 1998
of 6,247 shares of Class A Common Stock from the reporting person to the Jewish
Community Federation; (ii) a gift made in Louisville, Kentucky on December 14,
1998 of 25 shares of Class A Common Stock from the reporting person to Walter T.
Cosby III; (iii) a gift made in Louisville, Kentucky on December 23, 1998 of
82,700 shares of Class A Common Stock from the reporting person to the Trager
Family Foundation, Inc.; and (iv) several gifts by the reporting person in
December, 1998 of limited partnership units of Teebank and Jaytee, which gifts
do not affect the reporting person's beneficial ownership under Rule 13d-3 of
the securities of the Issuer held by such partnerships, the reporting person has
not effected any transactions in shares of the Class A Common Stock in the past
60 days.
(d) The reporting person shares voting and investment power
over shares of Class A Common Stock and Class B Common Stock held of record by
Teebank and Jaytee with Steven E. Trager, Scott Trager and Sheldon Gilman, as
trustee (each a beneficial owner of more than five percent of the class), and
such individuals may have the power to direct the receipt of dividends from, or
the proceeds from the sale of, the issuer's securities. In addition, Steven E.
Trager, Scott Trager and Sheldon Gilman as trustee, among others, are limited
partners of Teebank and Jaytee, and thereby possess the right to receive
dividends from or the proceeds from the sale of pro rata interests in the
Issuer's securities upon distribution of assets from Teebank and Jaytee.
In addition, participants in the ESOP may have the right to
receive or the power to direct the receipt of dividends from, or the proceeds
from the sale of such securities.
(e) Not Applicable.
Item 6. Contracts, Arrangements, Understandings or Relationships with
Respect to Securities of the Issuer.
The ESOP, the Loan Agreement, Note and Stock Pledge Agreement
entered into between the Issuer and the ESOP, and the limited partnership
agreements of Jaytee and Teebank contain certain provisions that may affect
transfer or voting of securities of the Issuer. The description set forth in
this Item 6 of such agreements does not purport to be complete and is qualified
in its entirety by reference to such agreements, which are filed as Exhibits
99.1 - 99.6 to this Schedule 13D, and reference is hereby made to such
documents. The reporting person is not otherwise a party to any contract,
arrangement, understanding or relationship (legal or otherwise) with respect to
any securities of the issuer, including but not limited to transfer or voting of
any of the securities, finder's fees, joint ventures, loan or option
arrangements, puts or calls, guarantees of profits, division of profits or loss,
or the giving or withholding of proxies.
<PAGE> 8
Item 7. Material to be filed as Exhibits.
Exhibit 99.1 Republic Bancorp, Inc. Employee Stock Ownership
Plan
Exhibit 99.2 ESOP Loan Agreement
Exhibit 99.3 ESOP Promissory Note
Exhibit 99.4 Stock Pledge Agreement
Exhibit 99.5 Limited Partnership Agreement of Jaytee Properties
Limited Partnership
Exhibit 99.6 Limited Partnership Agreement of Teebank Family
Limited Partnership
<PAGE> 9
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
/S/ Bernard M. Trager
Bernard M. Trager
Date: February 8, 1999
<PAGE> 10
EXHIBIT 99.1
REPUBLIC BANCORP, INC.
EMPLOYEE STOCK OWNERSHIP PLAN
AND
TRUST AGREEMENT
January 1, 1999
<PAGE> 11
REPUBLIC BANCORP, INC.
PROFIT SHARING PLAN AND TRUST AGREEMENT
Table of Contents
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
PAGE
SECTION 1. - Definitions.............................................................................1
SECTION 2. - Participation...........................................................................7
2.01 Participation ...........................................................................7
2.02 Bound by Plan ..........................................................................8
SECTION 3. - Contributions and Accounts..............................................................8
3.01 Accounts...............................................................................8
3.02 Company Contributions..................................................................8
SECTION 4. - Accounts................................................................................8
4.01 Adjustment of Accounts.................................................................8
4.02 Allocation of Cash Contributions.......................................................9
4.03 Allocation of Forfeitures and Company Stock Contributions.............................10
4.04 Participating Companies...............................................................10
SECTION 5. - Eligibility for Benefits...............................................................12
5.01 Retirement............................................................................12
5.02 Disability............................................................................12
5.03 Death.................................................................................13
5.04 Termination of Employment Prior to Normal Retirement Age..............................13
5.05 Vesting Schedule......................................................................13
5.06 Restoration of Forfeited Accrued Benefit..............................................14
5.07 Calculation of Years of Service.......................................................14
5.08 Forfeiture............................................................................15
5.09 Beneficiary...........................................................................15
5.10 Uniformed Services Rights.............................................................16
SECTION 6. - Payment of Benefits....................................................................16
6.01 Commencement of Benefits..............................................................16
6.02 Distributions.........................................................................17
6.03 Pre-Retirement Distribution Rights....................................................17
<PAGE> 12
6.04 Minimum Distribution Requirements.....................................................18
6.05 Eligible Rollover Distributions.......................................................20
6.06 In-Service Withdrawals................................................................21
SECTION 7. - Claims Procedure.......................................................................21
7.01 Claim for Benefit.....................................................................21
7.02 Decision on Claim.....................................................................21
7.03 Review Procedure......................................................................21
7.04 Time Periods..........................................................................22
SECTION 8. - Administration........................................................................22
8.01 Administrative Committee..............................................................22
8.02 Powers and Duties.....................................................................23
8.03 Officers and Agents...................................................................23
8.04 Reliance Upon Reports.................................................................23
SECTION 9. - Trust Fund and Trustee.................................................................24
9.01 Trust Fund............................................................................24
9.02 Management of Fund....................................................................25
9.03 Distributions.........................................................................27
9.04 Accounting by Trustee.................................................................27
9.05 Expenses and Compensation.............................................................27
9.06 Resignation or Removal of Trustee.....................................................28
9.07 Notification to Trustee...............................................................28
9.08 Indemnity of Trustee..................................................................29
9.09 Procedure.............................................................................29
9.10 Appointment of Trustee................................................................29
9.11 Investment in Collective Trust Fund...................................................29
9.12 Acquisition Loans.....................................................................29
SECTION 10. - Top Heavy Rules.......................................................................31
10.01 Definitions...........................................................................31
10.02 Determination of Top Heavy Status.....................................................32
10.03 Minimum Employer Contribution.........................................................33
10.04 Vesting Table.........................................................................33
10.05 Amendment to Vesting Schedule.........................................................34
10.06 Adjustment to Code Section 415 Limitations............................................34
SECTION 11. - Miscellaneous.........................................................................35
11.01 Nondiversion..........................................................................35
<PAGE> 13
11.02 Return of Company Contributions.......................................................35
11.03 Nonassignability......................................................................36
11.04 Certificates Concerning Board Action..................................................36
11.05 Construction..........................................................................36
11.06 Indemnity of Employees................................................................37
11.07 Merger................................................................................37
11.08 Internal Revenue Code.................................................................37
11.09 Annual Additions......................................................................37
11.10 Status of Participants................................................................41
11.11 Incapacitated Recipient...............................................................41
11.12 Discretionary Acts....................................................................41
11.13 Notices to Administrator..............................................................41
11.14 Unclaimed Account Procedure...........................................................41
SECTION 12. - Fiduciary Responsibilities............................................................42
12.01 Named Fiduciaries.....................................................................42
12.02 Powers and Responsibilities...........................................................42
12.03 Allocation of Responsibilities........................................................43
12.04 Employees.............................................................................43
12.05 Funding Policy........................................................................43
SECTION 13. - Company Stock.........................................................................44
13.01 Voting of Company Stock...............................................................44
13.02 Dividends on Company Stock............................................................44
13.03 Put Option............................................................................45
13.04 Payment of Purchase Price.............................................................45
SECTION 14. - Amendment and Termination.............................................................46
14.01 Amendment.............................................................................46
14.02 Termination...........................................................................47
</TABLE>
<PAGE> 14
REPUBLIC BANCORP, INC.
EMPLOYEE STOCK OWNERSHIP PLAN AND TRUST AGREEMENT
January 1, 1999
This is (1) an employee stock ownership plan, which is also stock bonus
plan, adopted as of January 1, 1999; and (2) a Trust Agreement dated as of
January 1, 1999 between (a) Republic Bancorp, Inc. (b) Republic Bank & Trust
Company, Trustee.
SECTION 1.
DEFINITIONS
1.01 "Account" means collectively the "Company Stock Account" and the
"Other Investments Account" of a Participant.
1.02 "Accrued Benefit" means, with respect to a Participant, the
Nonforfeitable balance of his Account as of any date.
1.03 "Acquisition Loan" means a loan made to this Plan by a disqualified
person (as defined in Code Section 4975(e)(2)), or a loan to this Plan
which a disqualified person guarantees, provided the loan satisfies the
requirements of Treas. Reg. Section 54.4975-7(b).
1.04 "Active Participant" means as of an Anniversary Date, a Participant who
(a) has completed a Year of Service within the Plan Year ending on that
Anniversary Date and is employed by the Company on that Anniversary
Date, or (b) has ceased to be employed by the Company during the Plan
Year ending on that Anniversary Date on account of death, Total and
Permanent Disability or retirement after his Normal Retirement Age. An
Employee on an FMLA Leave, shall not be treated as having ceased to be
employed by the Company.
1.05 "Administrator" shall have the meaning set forth in Section 8.01.
1.06 "Anniversary Date" means each December 31.
1.07 "Break in Service" means a Plan Year during which a Participant has not
completed more than 500 Hours of Service. A Break in Service shall not
occur until the last day of the Plan Year.
<PAGE> 15
1.08 "Cashout" means a lump sum distribution of the present value of a
Participant's Accrued Benefit.
1.09 "Code" means the Internal Revenue Code of 1986, as amended.
1.10 "Company" means Republic Bancorp, Inc., and its successors and assigns
and any Employer or successor that adopts the Plan and becomes a party
to the Trust Agreement.
1.11 "Company Stock" means common stock issued by the Company or any
Employer which constitutes "employer securities" under Code section
409(l) and Treas. Reg. ss. 54.4975-12.
1.12 "Company Stock Account" means a separate account to be set up and
maintained pursuant to Section 3.01 for each Participant which reflects
his share of contributions to the Plan made in Company Stock, his share
of released Financed Shares, his share of Company Stock Forfeitures and
any Company Stock attributable to earnings or cash contributions.
1.13 "Compensation" shall have the meaning set forth in subsection (a),
subject to subsection (b):
(a) Wages actually paid or made available during a Plan Year for
personal services rendered in the course of employment by the
Company as defined in Section 3401 of the Code for purposes of
income tax withholding at the source, subject to the
following: (1) Compensation shall include any elective
deferral (as defined in Code section 402(g)(3)), and any
amount which is contributed or deferred by the Company at the
election of the Participant and which is not includible in the
gross income of the Participant by reason of Code section 125
or 457; (2) Compensation shall not include any amounts paid
before the Employee became a Participant, and (3) Compensation
shall be determined without regard to any rules that limits
the remuneration included in wages based on the nature or
location of the employment or the services performed (such as
the exception for agricultural labor in Code section
3401(a)(2)).
(b) The Compensation of each Participant taken into account for
determining all benefits provided under the Plan for any Plan
Year shall not exceed $150,000, as adjusted for increases in
the cost-of-living in accordance with Code section
401(a)(17)(B). The cost-of-living adjustment in effect for a
calendar year applies to any period, not exceeding 12 months,
over which Compensation is determined (determination period)
beginning in such calendar year. If a determination period
consists of fewer than 12 months, the annual compensation
limit is an amount equal to the otherwise applicable annual
compensation limit multiplied by a fraction, the numerator of
which is the number of months in the short determination
period, and the denomina tor of which is 12. If compensation
for any prior determination period is taken into account in
determining a Participant's allocations for the current Plan
Year, the
2
<PAGE> 16
Compensation for such prior determination period is subject to
the applicable annual compensation limit in effect for that
prior determination period.
1.14 "Employee" means, subject to (a) and (b), any individual who
is classified by the Employer as an employee for Federal income tax
purposes, excluding leased employees.
(a) If it determined that an individual who has not been
classified as an employee by the Employer (for example, an
individual classified as an independent contractor by the
Employer) should be reclassified as an employee of the
Employer, such reclassifica tion shall be effective for all
purposes under the Plan prospectively from the date of the
final determination, even though the reclassification
otherwise has an earlier effective date. The purpose of this
provision is to exclude from participation in the Plan all
individuals who may actually be common law employees of the
Employer, but who are not paid as though they were common law
employees, regardless of the reasons they are excluded from
the payroll and regardless of whether that exclusion is
correct. Moreover, any individual who signs an agreement with
the Employer stating that they are not eligible to participate
in the Plan shall not be eligible to participate during the
term provided in the agreement, whether they are common law
employees or not.
(b) "Leased employee" means any person (other than an employee of
the recipient) who pursuant to an agreement between the
recipient and any other person ("leasing organization") has
performed services for the recipient (or for the recipient and
related persons determined in accordance with Section
414(n)(6) of the Code) on a substantially full time basis for
a period of at least one year, and such services are performed
under primary direction or control of the recipient.
Contributions or benefits provided a leased employee by the
leasing organization which are attributable to services
performed for the recipient employer shall be treated as
provided by the recipient employer. A leased employee shall
not be considered an employee of the recipient if: (i) such
employee is covered by a money purchase pension plan
providing: (1) a nonintegrated employer contribution rate of
at least 10 percent of compensation (as defined in Section
415(c)(3) of the Code), but including amounts contributed
pursuant to a salary reduction agreement which are excludable
from the employee's gross income under Section 125, 401(a)(8),
402(h) or 403(b) of the Code, (2) immediate participation, and
(3) full and immediate vesting; and (ii) leased employees do
not constitute more than 20 percent of the recipient's
nonhighly compensated work force.
1.15 "Employer" means (i) all corporations that are members of a controlled
group of corporations (as defined in Section 414(b) of the Code and any
regulations adopted thereunder) of which the Company is a member, (ii)
all trades or businesses (whether or not incorporated) which are under
common control (as defined in Section 414(c) of the Code and any
regulations adopted thereunder) and which include the Company, and
(iii) all employers that are
3
<PAGE> 17
members of an affiliated service group (as defined in Section 414(m) of
the Code and any regulations adopted thereunder) of which the Company
is a member or a similar organization described in Section 414(o) of
the Code.
1.16 "Entry Date" means January 1, 1999 and July 1, 1999 and January 1 and
July 1 of each year thereafter.
1.17 "ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
1.18 "Financed Shares" means Company Stock acquired by the Trust with the
proceeds of an Acquisition Loan and which satisfy the definition of
"qualifying employer securities" under Code Section 4975(e)(8).
1.19 "FMLA Leave" means any unpaid leave of absence that is protected under
the Family and Medical Leave Act of 1993, as amended from time to time,
and any regulations thereunder.
1.20 "Forfeiture" means the amount forfeited, if any, in accordance with
Section 5.08.
1.21 "Forfeiture Break in Service" means the occurrence of both (i)
termination of employment (even if rehired) and (ii) five consecutive
Breaks in Service (or one Break in Service for any Plan Year beginning
before January 1, 1985)
1.22 "Fund" means all assets held by the Trustee under the Plan, including
all property delivered from time to time to the Trustee, and all
proceeds and reinvestments thereof and all accumulations thereon, but
excluding (i) all payments which at the time of reference shall have
been made from the Fund by the Trustee, and (ii) all amounts which have
been segregated into a separate fund. Each separate fund shall remain a
part of the Trust.
1.23 "Highly Compensated Employee" means any employee who: (1) was a
5-percent owner at any time during the determination year or the
look-back year, or (2) for the look-back year, had compensation from
the Employer in excess of $80,000. The $80,000 amount is adjusted at
the same time and in the same manner as under section 415(d), except
that the base period is the calendar quarter ending September 30, 1996.
For the purpose of this subsection the applicable Plan Year of the Plan
for which a determination is being made is called a determination year
and the preceding 12-month period is called a look-back year. A highly
compensated former employee is based on the rules applicable to
determining highly compensated employee status as in effect for that
determination year, in accordance with section 1.414(q)-1T, A-4 of the
temporary Income Tax Regulations and Notice 97-75. In determining
whether an Employee is a Highly Compensated Employee for years
beginning in 1997, the amendments to section 414(q) stated above are
treated as having been in effect for years beginning in 1996.
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<PAGE> 18
1.24 "Hour of Service" means each hour determined as follows:
(a) Each hour for which an Employee is paid, or entitled to
payment, for the performance of duties for the Employer. These
hours will be credited to the Employee for the Plan Year in
which the duties are performed.
(b) Each hour for which an employee is paid, or entitled to
payment, by the Employer on account of a period of time during
which no duties are performed (irrespective of whether the
employment relationship has terminated) due to vacation,
holiday, illness, incapacity (including disability), layoff,
jury duty, military duty or leave of absence. No more than 501
Hours of Service shall be credited under this subsection (b)
for any single continuous period (whether or not such period
occurs in a single Plan Year). Hours under this subsection
shall be calculated and credited pursuant to section
2530.200b-2 of the Department of Labor Regulations which is
incorporated herein by this reference.
(c) Each hour for which back pay, irrespective of mitigation of
damages, is either awarded or agreed to by the Employer. These
hours shall be credited to the Employee for the Plan Year or
Plan Years to which the award or agreement pertains rather
than the Plan Year in which the award, agreement or payment is
made.
(d) No Hour of Service shall be credited under more than one
subsection of this section. The Employer shall credit
Employees with Hours of Service on the basis of the "actual"
method, which is the determination of Hours of Service from
records of hours worked and hours for which the Employer makes
payment or for which payment is due from the Employer. When
records are not available, an Employee shall be deemed to work
45 hours for each calendar week in which the Employee is
credited with at least one Hour of Service.
(e) Solely for purposes of determining whether a Break in Service
for participation and vesting purposes has occurred in a
computation period, an individual who is absent from work due
to a statutory leave shall receive credit for the Hours of
Service which would otherwise have been credited to such
individual, or in any case in which such hours cannot be
determined, 8 Hours of Service per day of such absence. For
purposes of this subsection, an absence from work due to a
statutory leave means an absence (i) by reason of the
pregnancy of the individual, (ii) by reason of a birth of a
child of the individual, (iii) by reason of the placement of a
child with the individual in connection with the adoption of
such child by such individual, (iv) for purposes of caring for
such child for a period beginning immediately following such
birth or placement, or (v) that is an FMLA Leave. The Hours of
Service credited under this subsection shall be credited
either (A) in the computation period in which the absence
begins if the crediting is necessary to prevent a one-year
Break in Service in that period, or (B) in all other cases, in
the following computation period.
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<PAGE> 19
(f) Hours of Service shall be credited for any individual
considered an Employee for purposes of this Plan under Code
Sections 414(n) and 414(o).
1.25 "Investment Committee" means the committee described in Section
9.01(b).
1.26 "Notforfeitable" means a Participant's or Beneficiary's right, legally
enforceable against the Plan, to the Participant's Account, subject
only to Section 5.08.
1.27 "Non-Highly Compensated Employee" means any Employee who is not a
Highly Compensated Employee or a Family Member.
1.28 "Normal Retirement Age" means the date a Participant attains age 65.
1.29 "Other Investments Account" means a separate account to be set up and
maintained pursuant to Section 3.01 for each Participant which reflects
his interest in the Plan attributable to that portion of the Fund other
than Company Stock.
1.30 "Participant" means any Employee or former Employee who has qualified
for participation in the Plan and whose Accrued Benefit has not been
distributed.
1.31 "Plan" means the plan, including the trust, embodied in this instrument
as amended from time to time.
1.32 "Plan Year" means a 12 consecutive month period ending on an
Anniversary Date.
1.33 "Total and Permanent Disability" means total disability arising from
occupational or non-occupational medically determinable physical or
mental impairment which prevents a Participant from engaging in any
substantial gainful activity and which is determined by the Claims
Examiner or the Administrator (subject to Section 7) to be permanent
and continuous for the remainder of the Participant's life. Total and
Permanent Disability for purposes of the Plan shall not include any
disability arising before a Participant's original date of employ ment
for the Employer. The Administrator may make rules and regulations of
uniform application concerning a minimal level of earnings in a
restricted activity which shall not disqualify a Participant from
being considered to have incurred Total and Permanent Disability.
Total and Permanent Disability shall be determined solely and finally
by the Claims Examiner or the Administrator in accordance with Section
7 after consideration of such evidence as the Claims Examiner or the
Administrator may require, including reports of such physician or
physicians as the Claims Examiner or the Administrator may designate.
The provisions of this Section shall be uniformly and consistently
applied to all Participants.
1.34 "Trust" means the trust created hereunder, which may be known as the
"Republic Bancorp, Inc. Employee Stock Ownership Trust."
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<PAGE> 20
1.35 "Trustee" means Republic Bank & Trust Company and any successor trustee
or trustees.
1.36 "Valuation Date" means each Anniversary Date and any other date the
Administrator determines shall be a Valuation Date.
1.37 "Year of Service" means a Plan Year during which an Employee has
completed at least 1,000 Hours of Service.
SECTION 2.
PARTICIPATION
2.01 PARTICIPATION.
(a) Any Employee who is not already a Participant, who has
completed 1,000 Hours of Service within that Employee's
initial Employment Year, shall automatically become a
Participant on the Entry Date (if employed by the Company on
that date) coinciding with or next following the end of that
Employee's initial Employment Year. After an Employee's
initial Employment Year, (1) the eligibility computation
period for that Employee shall be the Plan Year which includes
the first anniversary of the Employee's initial Employment
Year, and where additional eligibility computation periods are
necessary, succeeding Plan Years , and (2) that Employee shall
automatically become a Participant on the Entry Date
coinciding with or next following (if employed by the Company
on that date) the end of the Plan Year during which that
employee completes 1,000 Hours of Service. As used in this
Section 2.01(a), the following terms shall have the following
meanings: (i) "Employment Date" means the date on which the
Employee is first credited with an Hour of Service for the
Employer; and (ii) "Employment Year" means a computation
period that consists of a twelve consecutive month period
beginning on an Employment Date. For the purpose of
determining Hours of Service under this Section 2.01,
references in Section 1.24 to the "Plan Year" shall be deemed
references to the appropriate twelve month period determined
under this Section 2.01.
(b) If a Participant ceases to be employed by the Company and then
resumes employment by the Company, he shall upon such
reemployment, resume participation. If an Employee who has
satisfied the service requirements of subsection (a) above is
separated from service on the applicable Entry Date, and if he
returns to service after that Entry Date, he shall commence
participation immediately upon his return. Any
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<PAGE> 21
other Employee who separates from service and who subsequently
returns shall become a Participant in accordance with
subsection (a) above.
2.02 BOUND BY PLAN. Upon becoming a Participant, a Participant shall be
bound then and thereafter by the terms of this Plan, including all
amendments to the Plan. No Participant shall have any rights to revoke,
modify or discontinue his participation during the term of his
employment or upon any reemployment.
SECTION 3.
CONTRIBUTIONS AND ACCOUNTS
3.01 ACCOUNTS. The Administrator shall maintain or cause to be maintained in
the name of each Participant a separate Company Stock Account and any
Other Investments Account. However, a separate Account need not be
maintained if no Plan assets would be allocable to that Account.
Amounts shall be credited or debited to the Accounts as provided in the
Plan. Although the Accounts will be maintained separately, the amounts
in the Accounts may be commingled in the Fund and invested by the
Trustee as a single investment fund. If a portion of a Participant's
Account has been forfeited, but the Account has not been distributed,
then the undistributed Accrued Benefit shall be held in a separate
Account which shall be Nonforfeitable at all times, and an additional
Account shall be maintained for that Participant, subject to Section 5,
with respect to any additional contributions or Forfeitures to be
allocated for the benefit of that Participant.
3.02 COMPANY CONTRIBUTIONS. The Company will contribute in cash or Company
Stock to the Fund from time to time such amounts, or nothing, as the
Company may determine from time to time.
SECTION 4.
ACCOUNTS
4.01 ADJUSTMENT OF ACCOUNTS. As of each Valuation Date the Administrator
shall
(a) First charge to the appropriate Account of each Participant
all distributions and payments made to him, or on his Account,
since the last preceding Valuation Date that have not been
charged previously;
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<PAGE> 22
(b) Next, credit to each Participant's Company Stock Account the
shares of Company Stock, if any, that have been purchased with
amounts from his Other Investments Account since the last
preceding Valuation Date, and adjust such accounts in
accordance with Sections 4.02 and 4.03; and
(c) Next allocate and credit to each Participant's Other
Investments Account the Company contributions made in cash and
cash Forfeitures that are allocated and credited as of that
date in accordance with Sections 4.02 and 4.03 and allocate
and credit to each Participant's Company Stock Account the
shares of Company Stock and Company Stock Forfeitures that are
to be allocated and credited as of that date in accordance
with Section 4.03.
(d) Finally, the Administrator shall make any remaining
allocations and adjustments described in Sections 4.02 and
4.03.
(e) Any securities received by the Trustee as a stock split or
dividend or as a result of a reorganization or other
recapitalization of the Company shall be allocated as of the
next Valuation Date in the same manner as the stock to which
it is attributable is then allocated. In the event any
rights, warrants, or options are issued on common shares or
other securities of the Company held in the Trust, they shall
be exercised for the acquisition of additional Common Stock
or other securities of the Company to the extent cash is then
available. Any Common Stock or other securities of the
Company acquired in this manner shall be treated as Common
Stock or other securities of the Company bought by the
Trustee for the net price paid. Any rights, warrants, or
options on Common Stock or other securities of the Company
which cannot be exercised for lack of cash may be sold by the
Trustee and the proceeds treated as a current cash dividend
received on Common Stock or other securities of the Company.
4.02 ALLOCATION OF CASH CONTRIBUTIONS. For each Plan Year, Company
contributions (other than contributions used to repay an Acquisition
Loan in that Plan Year) that are made in cash for that year, and cash
Forfeitures arising under the Plan during a Plan Year shall be
allocated, as of each Anniversary Date for that Plan Year, to the Other
Investments Account of each Active Participant in the same manner as
Company Stock contributed would be allocated under Section 4.03. Upon
the purchase of Company Stock or the repayment of an Acquisition Loan
with such cash, an appropriate number of shares of Company Stock shall
be credited to the Company Stock Account of such Participant and the
Participant's Other Investments Account shall be charged by the amount
of the cash used to buy such Company Stock or repay an Acquisition
Loan, as applicable. Subject to Section 13.02, the Trustee shall also
credit to the Other Investments Account of each Participant any cash
dividends paid to the Trustee on shares of Company Stock held in that
Participant's Company Stock Account as of the record date. Such cash
dividends credited to a Participant's Other Investments Account shall
be applied at the direction of the Administrator to purchase shares
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<PAGE> 23
of Company Stock or to the repayment of an Acquisition Loan.
Thereafter, an appropriate number of shares of Company Stock shall be
credited to the Company Stock Account of such Participant and the
Participant's Other Investments Account shall then be charged by the
amount of cash used to purchase such Company Stock for his Company
Stock Account or to repay an Acquisition Loan, as applicable. As of
each Valuation Date, before the allocation of any Company
contributions, as of such date, any net appreciation, depreciation,
income, gains or losses in the fair market value of the Trust Fund
(exclusive of Company Stock) shall be allocated among and credited to
the Other Investments Accounts of Participants, pro rata, according to
the balance of each Other Investments Account as of the next preceding
Valuation Date, reduced in each case by the amount of any charge to
such Other Investments Account since the next preceding Valuation Date.
4.03 ALLOCATION OF FORFEITURES AND COMPANY STOCK CONTRIBUTIONS. As of each
Anniversary Date there shall be determined the sum of (1) all shares of
Company Stock contributed by the Company under Section 3.02 to the
Trustee for the Plan Year then ended, (2) the number of Financed Shares
released from the Suspense Account for allocation to Participants'
Company Stock Accounts under Section 9.12 (except as provided under
Section 13.02) and (3) Company Stock Forfeitures arising for the Plan
Year then ended. That sum shall then be allocated on a non-monetary
basis among the Company Stock Accounts of the persons who were Active
Participants on the Anniversary Date as of which the allocation is
made. In the allocation there shall be allocated to each such Active
Participant's Company Stock Account that proportion of the total sum to
be allocated that each such Active Participant's Compensation received
during the Plan Year then ended is of all Compensation received by all
such Active Participants during the Plan Year then ended.
4.04 PARTICIPATING COMPANIES.
(a) Any Employer that, with the Administrator's consent, adopts
this Plan and becomes a party to the Trust Agreement shall be
a "Participating Company." Each Participat ing Company shall
be subject to the terms and conditions of this Plan as in
effect at the effective date of adoption by the Participating
Company and as subsequently amended from time to time by the
Sponsoring Company, subject to such modifica tions as are set
forth in the document evidencing the Participating Company's
adoption on the Plan. As used in this Section 4.04, the term
"Sponsoring Company" means Republic Bancorp, Inc. Unless the
context of the Plan clearly indicates to the contrary, the
terms "Company" and "Employer" mean each Participating Company
as relates to its adoption of the Plan.
(b) This Plan shall be deemed to be a single plan of all Employers
that have adopted this Plan. Employer contributions shall not
be accounted for separately, and all Plan assets shall be
available to pay benefits to all Participants and their
Beneficiaries. Employees may be transferred among
Participating Companies or employed simultaneously by more
than one Participating Company, and no such transfer or
simulta-
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<PAGE> 24
neous employment shall effect a termination of employment, be
deemed retirement or be the cause of a Forfeiture or a loss of
Years of Service under this Plan. For purposes of determining
Years of Service and the payment of benefits upon death or
other termination of employment, all Participating Companies
shall be deemed one Employer. Any Participant employed by a
Participating Company during a Plan Year who receives any
Compensation from a Participating Company during that Plan
Year shall receive allocations for the Plan Year in accordance
with Sections 4.02 and 4.03 based on his Compensation during
that Plan Year (such Participant shall receive an allocation
under Sections 4.02 and 4.03 only if he is an Active
Participant).
(c) Each Participating Company shall be deemed to have designated
irrevocably the Sponsoring Company as its sole agent (1) for
all purposes under Section 8 (including fixing the number of
members of, and the appointment and removal of, the
Administrative Committee); (2) for purposes of fixing the
number of members of, and the appointment and removal of, the
Investment Committee; (3) with respect to all its relations
with the Trustee (including the Trustee's appointment and
removal, and fixing the number of Trustees); and (4) for the
purpose of amending this Plan. A copy of each amendment shall
be delivered to each Participating Company. The Administrator
shall make any and all rules and regulations which it shall
deem necessary or appropriate to effectuate the purpose of
this Section 4.04, and such rules and regulations shall be
binding upon the Sponsoring Company, the Participating
Companies, the Participants and Beneficiaries.
(d) Any Participating Company may withdraw its participation in
the Plan by giving written notice to the Administrator stating
that it has adopted a separate plan. The notice shall be given
at least six months prior to a designated Valuation Date,
unless the Administrator shall accept a shorter period of
notification. Promptly after the designated Valuation Date the
Administrator, based on values fixed by the Trustee, shall
establish the withdrawing Participating Company's interest in
the Fund, after a reduction for fees and other expenses
related to the Participating Company's withdrawal. The Trustee
shall then, in accordance with the Administrator's
instructions, transfer the withdrawing Participating Company's
interest in the Fund to the trustee or other funding agent of
the Participating Company's separate plan. Neither the Trustee
nor the Administrator shall be obligated to transfer or direct
the transfer of assets under this Section until they are
satisfied as to all matters pertaining to the transfer,
including, but not limited to, the tax qualification of the
plan into which the transfer will be made. The Administrator
and the Trustee may rely fully on the representations and
instructions of the withdrawing Participating Company and
shall be fully protected and discharged with respect to any
transfer made in accordance with such representations or
instructions. Any transfer of assets in accordance with this
Section shall constitute a complete discharge of
responsibility of the Sponsoring Company, the remaining
Participating Companies, their Boards of Directors and
officers, and the Trustee without any responsibility on their
part collectively or
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<PAGE> 25
individually to see to the application thereof The
Administrator in its sole discretion shall have the right to
transfer the withdrawing Participating Company's interest in
the Fund to the new plan in the form of installments, in cash,
or in cash and kind and over a period of time not to exceed
one year following the designated Valuation Date of the
Participating Company's withdrawal. Any assets which are
invested in accordance with an investment contract or
agreement which by its terms precludes the realization upon
and distribution of such assets for a stated period of time
shall continue to be held by the Trustee under the terms and
conditions of this Plan until the expiration of such period,
subject to the Administrator's instructions.
(e) The Board of Directors of a Participating Company may at any
time terminate this Plan with respect to its Employees by
adopting a resolution to that effect and delivering a
certified copy to the Administrator. Section 14.02 shall apply
to a Participating Company's termination, but the continuation
of the Plan by the Sponsoring Company and other Participating
Companies shall not be affected. The termination of the Plan
with respect to a Participating Company's Employees shall not
effect a termination with respect to an Employee of the
Sponsoring Company or another Participating Company if such
Employee was not employed by the terminating Participating
Company on the effective date of the termination, even though
he may have been employed by the terminating Participating
Company at an earlier date. Any fees and other expenses
related to a Participating Company's termination shall be
charged against the Accounts of the affected Participants.
Upon termination of the Plan by any Participating Company, the
Administrator may in its sole discretion direct the Trustee to
segregate the Accounts of all affected Participants into a
separate fund, and the Administrator may in its sole
discretion direct the Trustee to invest the separate fund only
in Cash Equivalent Investments. If the Administrator does not
direct the investment of the separate fund, it shall be
invested by the Trustee in the Trustee's sole discretion.
SECTION 5.
ELIGIBILITY FOR BENEFITS
5.01 RETIREMENT. Upon termination of a Participant's employment by the
Employer for any reason on or after his Normal Retirement Age, the
Administrator shall direct the Trustee to begin payment of the
Participant's Accrued Benefit to him in accordance with Section 6,
within a reasonable time after the Valuation Date coinciding with or
next following the Participant's termination of employment.
5.02 DISABILITY. If a Participant ceases to be employed by the Employer
because of Total and Permanent Disability, the Administrator shall
direct the Trustee to begin payment of the
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<PAGE> 26
Participant's Accrued Benefit to him in accordance with Section 6,
within a reasonable time after the Valuation Date coinciding with or
next following the date determination of Total and Permanent Disability
is made.
5.03 DEATH. If a Participant dies before he receives his Accrued Benefit,
the Administrator shall direct the Trustee to pay the Participant's
Accrued Benefit to his Beneficiary in accordance with Section 6.02,
subject to Sections 6.03 and 6.04.
5.04 TERMINATION OF EMPLOYMENT PRIOR TO NORMAL RETIREMENT AGE. The following
provisions shall apply, subject to Section 6, with respect to a
Participant who ceases to be employed by the Employer for any reason
other than death, Total and Permanent Disability or retirement on or
after his Normal Retirement Age:
(a) PAYMENT. Subject to subsection (b) below, the Administrator
shall direct the Trustee to pay the Participant's Accrued
Benefit to him within a reasonable time after the second
Anniversary Date following the Anniversary Date that coincides
with or next follows the date of the Participant's termination
of employment.
(b) CONSENT. Any distribution to a Participant under this Plan
shall be subject to this subsection (b). The Administrator
shall obtain the Participant's written consent to any
distribution to a Participant, including the form of the
distribution, if (1) the present value of the Participant's
Accrued Benefit exceeds (or at the time of any prior
distribution exceeded) $5,000 and (2) the Administrator
directs the Trustee to make the distribution to the
Participant prior to his attaining the later of Normal
Retirement Age or age 62. If a Participant who is eligible for
a distribution does not file his written consent (if required)
with the Administrator within the period of time fixed by the
Administrator, the Participant's Accrued Benefit shall be
distributed within a reasonable time after the close of the
Plan Year in which such consent is received, but no later than
a reasonable time after the close of the Plan Year in which
the Participant has terminated employment and attained his
Normal Retirement Age (or in which he dies, if earlier).
(c) DISTRIBUTION PRIOR TO FORFEITURE BREAK IN SERVICE. If the
Participant's Accrued Benefit attributable to Company
contributions is zero, the Participant shall be deemed to have
received a Cashout on the Anniversary Date of the Plan Year in
which the Participant terminated employment.
5.05 VESTING SCHEDULE. A Participant's Account derived from Company
contributions shall be 100 percent Nonforfeitable upon and after his
attaining Normal Retirement Age (if employed by the Employer on or
after that date), or if his employment terminates as a result of death
or Total and Permanent Disability. If a Participant's employment
terminates prior to his Normal Retirement Age for any reason other than
death or Total and Permanent Disability,
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<PAGE> 27
then the Nonforfeitable percentage of his Account (the "Accrued
Benefit") derived from Company contributions shall be calculated as
follows:
YEARS OF SERVICE NONFORFEITABLE PERCENTAGE
Fewer than 5 0
5 or more 100
5.06 RESTORATION OF FORFEITED ACCRUED BENEFIT.
(a) If the Employer rehires a Participant who had a Nonforfeitable
Accrued Benefit of zero at termination of employment, the
Administrator shall restore his Account to the same dollar
amount as the dollar amount of such Account on the Valuation
Date coinciding with or next preceding the date of the
Cashout, unadjusted for any gains or losses occurring
subsequent to that Valuation Date. Notwithstanding the
preceding sentence, the Administrator shall not restore a
reemployed Participant's Account if the Participant incurred a
Forfeiture Break in Service before or as of the Anniversary
Date coinciding with or next following the Participant's date
of rehire.
(b) If the Participant has not incurred a Break in Service, the
Administrator shall restore the Participant's Account as of
the Anniversary Date coinciding with or next following the
Participant's date of rehire. To restore the Participant's
Company Contribution Account, the Administrator, to the extent
necessary, shall allocate to the Account: (1) First, the
amount, if any, of Participant Forfeitures the Administrator
would otherwise allocate; (2) Second, the Employer
contribution for the Plan Year to the extent made under a
discretionary formula. To the extent the amounts available for
restoration for a particular Plan Year are insufficient to
enable the Administrator to make the required restoration, the
Company shall contribute, without regard to any limitations in
this Plan, such additional amount as is necessary to enable
the Administrator to make the required restoration. Even if
amounts are available for restoration, the Company may
contribute such amount as it may in its sole discretion
determine to enable the Administrator to make all or any
portion of the required restoration. If, for a particular Plan
Year, the Administrator must restore the Account of more than
one reemployed Participant, then the Administrator shall make
the restoration allocation to each such Participant's Account
in the same proportion that a Participant's restored amount
for the Plan Year bears to the restored amount for the Plan
Year of all reemployed participants. The Administrator shall
not take into account the allocation(s) under this Section in
applying the limitation on allocations under Section 11.09.
5.07 CALCULATION OF YEARS OF SERVICE. Subject to the following rules, all
of an Employee's Years of Service shall be counted for vesting
purposes:
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<PAGE> 28
(a) Any Year of Service completed after a Forfeiture Break in
Service shall not count for the purpose of determining a
Participant's Nonforfeitable percentage of his Account derived
from Employer contributions made for his benefit prior to the
Forfeiture Break in Service.
(b) Any Year of Service completed before a Break in Service shall
not be counted if the number of consecutive Breaks in Service
equals or exceeds the greater of (i) five or (ii) the
aggregate number of Years of Service prior to the Break in
Service. For Plan Years beginning before January 1, 1985, the
Administrator shall apply the next preceding sentence by
disregarding the requirement for a minimum of five consecutive
Breaks in Service. This subsection shall only apply if the
Participant's right to his Account derived from Company
contributions is one hundred percent forfeitable at the time
he has a Break in Service. The aggregate number of Years of
Service before a Break in Service shall not include any Years
of Service not required to be taken into account under this
subsection by reason of any prior Break in Service.
5.08 FORFEITURE. A Participant's Forfeiture, if any, of his Account derived
from Company contributions shall occur under the Plan:
(a) As of the Anniversary Date of the Plan Year in which the
Participant first incurs a Forfeiture Break in Service; or, if
earlier and if applicable,
(b) As of the date on which the Participant receives a Cashout of
his Accrued Benefit. The Administrator shall determine the
percentage of a Participant's Forfeiture, if any, under this
Section solely by reference to the vesting schedule of Section
5.05. A Participant shall not forfeit any portion of his
Account for any other reason or cause except as expressly
provided by this Section or as provided under Section 11.02 or
Section 11.14. Any Company Stock acquired with the proceeds of
an Acquisition Loan may be forfeited only after other assets
comprising the Participant's Account have been forfeited.
5.09 BENEFICIARY. A designation of a Beneficiary shall be effective only if
it is set forth in a written instrument delivered to the Administrator
in such form as the Administrator may prescribe. In the absence of an
effective designation, the Beneficiary shall be
(a) The Participant's spouse, if known and living; or if there is
no known surviving spouse or the spouse disclaims the Accrued
Benefit, then
(b) The Participant's estate.
A married Participant's Beneficiary designation shall not be valid even
if executed prior to marriage, unless the Participant's spouse consents
to the specific Beneficiary designation or
15
<PAGE> 29
gives a general consent, and acknowledges the effect of such consent,
or unless the Participant is not married on the date of his death. The
spouse's consent must be in writing and a notary public or the
Administrator (or his representative) must witness the consent. A
married Participant's Beneficiary designation does not require spousal
consent if the Participant's spouse is the Participant's designated
Beneficiary. If the Participant establishes to the satisfaction of the
Administrator that such written consent cannot be obtained because
there is no spouse or because the spouse cannot be located, the
Participant's designation of a non-spouse Beneficiary shall be
acceptable. The consent must be in such form as the Administrator may
prescribe. Upon the filing with the Administrator of an effective
designation of Beneficiary, any and all prior designations filed by
that Participant shall be deemed revoked.
5.10 UNIFORMED SERVICES RIGHTS. Notwithstanding any provision of this Plan
to the contrary, contributions, benefits and service credit with
respect to qualified military service will be provided in accordance
with Code section 414(u). At any time when this Plan allows loans to
Participants, loan repayments will be suspended under this Plan as
permitted under Code section 414(u)(4).
SECTION 6.
PAYMENT OF BENEFITS
6.01 COMMENCEMENT OF BENEFITS.
(a) Subject to Section 6.01(b), payment of benefits under the Plan
shall in no event begin later than 60 days after the close of
the Plan Year in which the latest of the following events
occurs: (1) The date the Participant attains age 65 (or his
Normal Retirement Age, if earlier); (2) The tenth anniversary
of the year in which the Participant commenced participation
in the Plan; or (3) The Participant's date of termination of
service with the Employer.
(b) In no event shall any distribution under this Plan commence
later than the Required Beginning Date. The Required Beginning
Date of a Participant is the later of the April 1 of the
calendar year following the calendar year in which the
Participant attains age 70 1/2 or retires, except that benefit
distributions to a 5-percent owner must commence by the April
1 of the calendar year following the calendar year in which
the Participant attains age 70 1/2. A Participant is treated
as a 5-percent owner for purposes of this Section is such
Participant is a 5 percent owner as defined in section 416 of
the Code at any time during the Plan Year ending with or
within the calendar year in which such owner attains age 70
1/2. Once distributions have begun to a 5-percent owner under
this Section, they must continue to be distributed, even if
the Participant ceases to be a 5-percent owner in a subsequent
year.
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6.02 DISTRIBUTIONS.
(a) The Accrued Benefit payable to a former Participant or a
Beneficiary shall be distributed in accordance with the
following rules:
(1) All distributions of benefits under the Plan shall
be by lump sum payment.
(2) The Trustee shall, at the Participant's or
Beneficiary's election, distribute the Participant's
Company Stock Account either in whole shares of
Company Stock or in cash. The Trustee shall at the
Participant's or Beneficiary's election either apply
the Participant's Other Investments Account to
provide whole shares of Company Stock for
distribution or distribute cash in an amount equal
to the value of the Other Investments Account. Any
fractional share shall be distributed in cash.
(b) Notwithstanding Section 6.02, the Trustee, if directed in
writing by the Administra tor, shall pay, in cash, any cash
dividends on Company Stock allocated or allocable to
Participants' Company Stock Accounts, irrespective of whether
a Participant is fully vested in his Company Stock Account.
The Administrator's direction shall state whether the Trustee
is to pay the cash dividends currently, or within the 90 day
period following the close of the Plan Year in which the
Employer pays the dividends to the Trust. The Administrator
may request the Employer to pay dividends on Company Stock
directly to Participants.
(c) Upon the Participant's death, the Administrator shall direct
the Trustee to pay the Participant's Accrued Benefit in
accordance with subsection (a) and this subsection. The
Administrator shall direct the Trustee to pay the
Participant's Accrued Benefit to the Beneficiary in a lump sum
within a reasonable time after the Valuation Date coinciding
with or next following the Participant's death. If a
Beneficiary is living at the Participant's death, but such
Beneficiary dies before receiving the entire amount payable to
him, the remaining portion of the benefit shall be paid in a
single sum to the estate of such deceased Beneficiary.
6.03 PRE-RETIREMENT DISTRIBUTION RIGHTS.
(a) Subject to subsections (b) and (d) below each Qualified
Participant may elect to direct the Administrator to transfer
any portion of the Participant's Transferable Shares,
determined as of the Anniversary Date next preceding the
election, to another qualified defined contribution plan of
the Company, provided that such plan then offers at least
three distinct investment options and satisfies the
requirements of Code Section 401(a)(28)(B). The Participant
must elect, in written notice to the Administrator, to direct
such a transfer within 90 days after the end of each of the
six
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Plan Years during the Qualified Election Period, and the
transfer shall be made within 90 days after each such
election.
(b) If the fair market value of the Company Stock allocated to a
Qualified Participant's Company Stock Account is $500 or less
as of any Anniversary Date during the Qualified Election
Period, then the Qualified Participant shall not be entitled
to make an investment election under this Section 6.03 with
respect to the Plan Year ending on that Anniversary Date.
(c) For purposes of this Section 6.03, the following terms shall
have the following meanings:
(1) "Transferable Shares" means the number of shares of
Common Stock transferable to another qualified
defined contribution plan of the Company with respect
to the Qualified Election Period. The Transferable
Shares of a Qualified Participant are determined by
multiplying the number of shares of Company Stock
credited to the Participant's Company Stock Account
(including the Company Stock previously transferred
pursuant to this Section) by 25 percent or, with
respect to the last Plan Year in the Qualified
Election Period, by 50 percent, reduced by any prior
transfers or distributions received by such
Participant pursuant to this Section 6.03.
(2) "Qualified Election Period" means the 6 Plan Years
beginning with the Plan Year in which a Participant
first becomes a Qualified Participant.
(3) "Qualified Participant" means a Participant who has
attained age 55 and who has completed at least 10
years of participation in the Plan. A "year of
participation" means a Plan Year in which the
Participant was eligible for an allocation of Company
contributions, irrespective of whether the Company
actually contributed to the Plan for that year.
6.04 MINIMUM DISTRIBUTION REQUIREMENTS.
(a) The Administrator may not direct the Trustee to distribute the
Participant's Accrued Benefit, nor may the Participant elect
to have the Trustee distribute his Accrued Benefit, under a
method of payment which, as of the Required Beginning Date,(as
determined under Section 6.01) does not satisfy the minimum
distribution requirements under Code Section 401(a)(9) and the
applicable Treasury regulations. The minimum distribution for
a calendar year equals the Participant's Accrued Benefit as of
the latest Valuation Date preceding the beginning of the
calendar year divided by the Participant's life expectancy or,
if applicable, the joint and last survivor expectancy of the
Participant and his designated Beneficiary (as determined
under Section 5.09, subject to the Code Section 401(a)(9)
regulations). The Administrator
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shall increase the Participant's Accrued Benefit, as
determined on the relevant Valuation Date, for contributions
or Forfeitures allocated after the Valuation Date and by
December 31 of the valuation calendar year, and shall decrease
the valuation by distributions made after the Valuation Date
and by December 31 of the valuation calendar year. For
purposes of this valuation, the Administrator shall treat any
portion of the minimum distribution for the first distribution
calendar year made after the close of that year as a
distribution occurring in that first distribution calendar
year. In computing a minimum distribution, the Administrator
shall use the unisex life expectancy multiples under Treas.
Reg. Section 1.72-9. The Administrator Shall, unless the
Participant requests no redetermination, compute the minimum
distribu tion for a calendar year subsequent to the first
calendar year for which the Plan requires a minimum
distribution by redetermining the applicable life expectancy.
However, the Administrator may not redetermine the joint life
and last survivor expectancy of the Participant and a
nonspouse designated Beneficiary in a manner which takes into
account any adjustment to a life expectancy other than the
Participant's life expectancy.
(b) If the Participant's spouse is not his designated Beneficiary,
a method of payment to the Participant (whether by Participant
election or by Administrator direction) may not provide more
than incidental benefits to the Beneficiary. The Plan must
satisfy the minimum distribution incidental benefit ("MDIB")
requirement in the Treasury regulations issued under Code
Section 401(a)(9) for distributions made on or after the
Participant's Required Beginning Date and before the
Participant's death. To satisfy the MDIB requirement, the
Administrator shall compute the minimum distribution required
by this Section 6.03 by substituting the applicable MDIB
divisor for the applicable life expectancy factor, if the MDIB
divisor is a lesser number. Following the Participant's death,
the Administrator shall compute the minimum distribution
required by this Section 6.04 solely on the basis of the
applicable life expectancy factor and shall disregard the MDIB
factor. For Plan Years beginning prior to January 1, 1989, the
Plan satisfies the incidental benefits requirement if the
distributions to the Participant satisfied the MDIB
requirement or if the present value of the retirement benefits
payable solely to the Participant is greater than 50% of the
present value of the total benefits payable to the Participant
and his Beneficiaries. The Administrator shall determine
whether benefits to the Beneficiary are incidental as of the
date the Trustee is to commence payment of the retirement
benefits to the Participant, or as of any date the Trustee
redetermines the payment period to the Participant.
(c) The minimum distribution for the first distribution calendar
year is due by the Participant's Required Beginning Date. The
minimum distribution for each subsequent distribution calendar
year, including the calendar year in which the Participant's
Required Beginning Date falls, is due by December 31 of that
year.
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(d) The method of distribution to the Participant's Beneficiary
must satisfy Code Section 401(a)(9) and the applicable
Treasury regulations. If the Participant's death occurs after
his Required Beginning Date, the method of payment to the
Beneficiary shall provide for completion of payment over a
period which does not exceed the payment period which had
commenced for the Participant. If the Participant's death
occurs prior to his Required Beginning Date, the method of
payment to the Beneficiary shall provide for completion of
payment to the Beneficiary over a period not exceeding 5 years
after the date of the Participant's death.
6.05 ELIGIBLE ROLLOVER DISTRIBUTIONS.
Notwithstanding any provision of the Plan to the contrary that would
otherwise limit a distributee's election under this Section, a
distributee may elect, at the time and in the manner prescribed by the
Plan Administrator, to have any portion of an eligible rollover
distribution paid directly to an eligible retirement plan specified by
the distributee in a direct rollover.
(a) Eligible rollover distribution: An eligible rollover
distribution is any distribution of all or any portion of the
balance to the credit of the distributee, except that an
eligible rollover distribution does not include: any
distribution that is one of a series of substantially equal
periodic payments (not less frequently than annually) made for
the life (or life expectancy) of the distributee or the joint
lives (or joint life expectancies) of the distributee and the
distributee's designated beneficiary, or for a specified
period of ten years or more; any distribution to the extent
such distribution is required under section 401(a)(9) of the
Code; and the portion of any distribution that is not
includable in gross income (determined without regard to the
exclusion for net unrealized appreciation with respect to
employer securities).
(b) Eligible retirement plan: An eligible retirement plan is an
individual retirement account described in section 408(a) of
the Code, an individual retirement annuity described in
section 408(b) of the Code, an annuity plan described in
section 403(a) of the Code, or a qualified trust described in
section 401(a) of the Code, that accepts the distributee's
eligible rollover distribution. However, in the case of an
eligible rollover distribution to the surviving spouse, an
eligible retirement plan is an individual retirement account
or individual retirement annuity.
(c) Distributee: A distributee includes an Employee or former
Employee. In addition, the Employee's or former Employee's
surviving spouse and the Employee's or former Employee's
spouse or former spouse who is the alternate payee under a
qualified domestic relations order, as defined in section
414(p) of the Code, are distributees with regard to the
interest of the spouse or former spouse.
(d) Direct rollover: A direct rollover is a payment by the Plan to
the eligible retirement plan specified by the distributee.
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6.06 IN-SERVICE WITHDRAWALS. Any Participant who has attained age 59 1/2 and
who has at least five Years of Service may, upon 30 days advance
written notice to the Administrator, withdraw all or a portion of his
Accrued Benefit at its value as of the Valuation Date coinciding with
or next following delivery of the notice.
SECTION 7.
CLAIMS PROCEDURE
7.01 CLAIM FOR BENEFIT. Every Participant or Beneficiary who may be entitled
to payment of a benefit under this Plan and who has not already been
advised by the Administrator of his right to receive such benefit may
submit a written claim to the Administrator on such a form provided for
that purpose.
7.02 DECISION ON CLAIM. One member of the Administrator shall be designated
by the Administra tor as "Claims Examiner" to consider all claims. The
Claims Examiner may require from a Participant or Beneficiary who
submits a claim (a "Claimant") such other information as the Claims
Examiner deems pertinent to the determination and payment of Plan
benefits. If a claim is denied, in whole or in part, the Claims
Examiner shall notify the Claimant in writing of the denial. The
written notice shall contain, in a manner calculated to be understood
by the Claimant:
(a) The specific reason or reasons for the denial;
(b) Specific reference to the provisions of the Plan on which the
denial is based;
(c) A description of any additional material or information
necessary for the Claimant to perfect the claim and an
explanation of why such material or information is necessary;
and
(d) An explanation of how the denial may be appealed.
7.03 REVIEW PROCEDURE. A Claimant may appeal a decision of the Claimant
Examiner to the Administrator. The request for a review must be made in
writing and must be delivered to the Administrator. In connection with
such an appeal a Claimant may review pertinent Plan documents and
submit issues and comments in writing to the Administrator. The
Administrator shall review all relevant material, may in its sole
discretion hold a hearing, and
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shall render a decision regarding the claim. The Administrator's
decision shall be in writing; shall state specific reasons for its
decision, and shall include specific references to the pertinent Plan
provisions on which the decision is based.
7.04 TIME PERIODS. The Administrator may establish reasonable time periods
within which actions must be taken under the claims procedure set forth
in this Section 7. The claims procedure set forth in this Section 7
(including any time periods that are established) shall be administered
in accordance with applicable regulations adopted and issued by the
Department of Labor.
SECTION 8.
ADMINISTRATION
8.01 ADMINISTRATIVE COMMITTEE. The Company may appoint a committee, which
shall be known as the "Administrative Committee" to carry out the
Administrator's responsibilities under this Plan document, and the term
"Administrator" as used in this Plan means the Administrative
Committee. If the Company does not appoint an Administrative Committee,
the Company shall be the Administrator for all purposes. Unless the
Administrative Committee and the Company agree otherwise, the Company
shall act as the plan administrator for the purpose of satisfying any
requirement now or subsequently imposed by Federal or state legislation
to report or disclose to any Federal or state department or agency any
information concerning the Plan, and any cost or expense incurred in
satisfying such reporting or disclosure requirements shall be deemed a
reasonable expense of administering the Plan and may be paid from the
Fund. The Administrative Committee shall consist of the number of
persons as may be fixed by the Company from time to time. These persons
may but need not be Participants. The members of the Administrative
Committee may be removed by the Company at any time, with or without
cause. Any member of the Administrative Committee may resign at any
time by delivering a written resignation to the President or the
Secretary of the Company. Any vacancy in the membership of the
Administrative Committee, however arising, shall be filled by the
Company. The Administrative Committee may act only by the unanimous
vote of its members at a meeting or by a writing signed by each of its
members without a meeting. The Administrative Committee may authorize
one or more of its members to execute on its behalf any notices,
directions, certificates, consents or other documents. The Trustee, and
any other person or organization, upon written notice of such
authorization, shall accept and rely upon such authorization until
given a written notice that the authorization has been revoked or
changed by the Administrative Committee. A member of the Administrative
Committee who is also a Participant shall not vote or act upon any
matter affecting solely any of his benefits under the Plan. The
Administrative Committee may adopt and amend from time to time rules
and regulations for the conduct of its affairs.
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<PAGE> 36
The members of the Administrative Committee shall serve without
compensation for their services as such members.
8.02 POWERS AND DUTIES. Subject to Section 9.01(b), the Administrator shall
have complete control of the administration of the Plan, with all
powers necessary to enable it properly to carry out its duties in this
respect. Without limiting the generality of the foregoing, the
Administrator shall have discretionary power to
(a) Conclusively and finally determine, but only in accordance
with the Plan, the eligibility of Employees to participate in
the Plan and the eligibility of Participants and Beneficiaries
to receive benefits under the Plan;
(b) Adopt and amend from time to time policies, rules and
regulations for the administration of the Plan;
(c) Interpret and construe the Plan and Trust Agreement, and the
Administrator's interpretation and construction thereof in
good faith shall be conclusive, except that its interpretation
and construction shall not be conclusive as to the Trustee if
its interpretation and construction places upon the Trustee
liabilities and duties more onerous than those that would be
placed upon the Trustee under the interpretation and
construction contended for by the Trustee;
(d) Correct any defect or supply any omission or reconcile any
inconsistency in the Plan in such manner and to such extent as
the Administrator shall in its sole discretion deem desirable
to carry the same into effect; and
(e) Establish the acceptable forms of beneficiary designation for
death benefits and of any consent, election, notice or waiver
to be given by a Participant, spouse or Beneficiary.
(f) Direct the Trustee with respect to the voting of Company Stock
as provided in Section 13.01.
8.03 OFFICERS AND AGENTS. The Administrator may appoint such officers,
consultants, accountants, attorneys and representatives as it may deem
advisable. Unless paid by the Company, the Administrator shall direct
the Trustee to pay from the Fund (including segregated Accounts) the
fees and expenses of such consultants, accountants, attorneys and
representatives and any other expenses incurred by the Administrator in
the administration of the Plan.
8.04 RELIANCE UPON REPORTS. The Administrator and its officers, directors
and members, if any, shall be entitled to rely upon (a) all
valuations, certificates and reports made by any consultant or
accountant selected by the Administrator, (b) all opinions given by
any legal
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<PAGE> 37
counsel selected by the Administrator, (c) all reports furnished by the
Trustee, and (d) all information furnished by any Employer.
SECTION 9.
TRUST FUND AND TRUSTEE
9.01 TRUST FUND.
(a) The Fund shall, subject to this Section 9.01 and to Sections
9.12 and 13.01, be held, administered, controlled and invested
by the Trustee, and the Trustee, upon written direction by the
Investment Committee, shall invest and reinvest up to 100
percent of the Fund primarily (or exclusively) in Company
Stock. However, at such time as Company Stock is not available
for purchase, or in the absence of instructions from the
Investment Committee, the Fund may be invested by the Trustee
in accordance with Section 9.02. The Trustee shall have no
responsibility whatsoever either for the control, management,
administration or amendment of the Plan or for the Company
contributions, except to receive, hold, invest, reinvest and
distribute the same, together with earnings thereon, in
accordance with the provisions of this Agreement.
(b) The Company may appoint a committee, which shall be known as
the "Investment Committee" for purposes of instructing the
Trustee regarding the purchase of Company Stock and
Acquisition Loans. The Investment Committee shall consist of
the number of persons as may be fixed by the Company from time
to time. These persons may but need not be Participants. The
members of the Investment Committee may be removed by the
Company at any time, with or without cause. Any member of the
Investment Committee may resign at any time by delivering a
written resignation to the President or the Secretary of the
Company. Any vacancy in the membership of the Investment
Committee, however arising, shall be filled by the Company.
The Investment Committee may act only by the unanimous vote of
its members at a meeting or by a writing signed by each of its
members without a meeting. The Investment Committee may
authorize one or more of its members to execute on its behalf
any notices, directions, certificates, consents or other
documents. The Trustee, and any other person or organization,
upon written notice of such authorization, shall accept and
rely upon such authorization until given a written notice that
the authorization has been revoked or changed by the
Investment Committee. A member of the Investment Committee who
is also a Participant shall not vote or act upon any matter
affecting solely any of his benefits under the Plan. The
Investment Committee may adopt and amend from time to time
rules and regulations for the conduct of its affairs. The
members of the Investment Committee
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shall serve without compensation from the Plan for their
services as such members. The Investment Committee shall have
the power to direct the Trustee concerning the purchasing,
holding and selling of Company Stock as set forth in Section
9.02(l) and concerning entering into Acquisition Loans as set
forth in Section 9.12.
9.02 MANAGEMENT OF FUND. Subject to Sections 9.02(l) and 9.12, the Trustee
shall have the power to do all things and execute such instruments as
it may deem necessary or proper, including the following powers, all of
which may be exercised without order of, or report to, any court:
(a) INVESTMENTS. To invest and reinvest the Fund in any other
property of any nature whatsoever, whether real or personal
and wheresoever located (but any real estate shall be situated
in the United States), and including any mutual fund,
debentures, commercial paper, limited partnerships, insurance
contracts, group or individual annuity contracts and bonds,
but in thus investing and reinvesting the Fund the Trustee
shall use the degree of judgment and care that a prudent man
would use if he were the owner of the trust assets. If the
Trustee is a bank, it may invest in any common or collective
trust fund of the bank, and its affiliates, and it may invest
in deposits of the bank, and its affiliates.
(b) SALE. To sell publicly or privately, for cash or on credit,
without any order of court, upon such terms and conditions as
to the Trustee shall seem best, any property included in the
Fund including stock options; to make all proper deliveries,
assignments and conveyances incident to such sales, and no
purchaser from the Trustee shall be responsible for the proper
application of any consideration which the Trustee is
authorized to receive, and no right or title acquired from the
Trustee for such consideration shall be invalid because of a
misapplication by the Trustee.
(c) VOTING. Subject to Section 13.01, to vote shares of stock
included in the Fund in person or by special or general proxy,
with or without power of substitution, as to the Trustee shall
seem best; but the Trustee shall be liable for any loss
resulting from a failure to use reasonable care in deciding
how to vote the stock and in voting it.
(d) REORGANIZATION, ETC. If (1) any corporation whose stocks or
securities constitute a part of the Fund shall be reorganized
or recapitalized or consolidated with or merged into any other
corporation, or (2) opportunity shall be afforded to exchange
any of said stocks or securities for other stocks or
securities issued or to be issued by any such corporation or
by any other corporation, or (3) subscription rights shall be
issued upon any of said stocks or securities, then the Trustee
shall have full power and authority, in its discretion, in
such manner and upon such terms and conditions as it may deem
advisable to exchange any such stocks or securities so held
for the stocks or other securities of any such reorganized,
recapitalized, consolidated or merged corporation, or for
other stocks or securities of such corporation or any other
corporation, or to exercise such subscription rights.
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(e) BORROWING. Subject to Section 9.12, to borrow money at any
time and from time to time for the benefit of this trust and
to secure the loan or loans by a pledge or mortgage of the
assets of this trust and from time to time to renew such loans
and give additional security.
(f) NOMINEES. To hold any and all securities in bearer form, in
its own name, or in the name of a duly appointed nominee, with
or without indication of trusteeship; but the Trustee shall be
liable for the wrongful act of any such nominee or of the
Trustee with respect to any property, the title to which is so
held.
(g) ATTORNEYS AND AGENTS. To employ such attorneys, accountants
and other agents as the Trustee may deem necessary and to pay
their reasonable compensation and expenses from the Fund.
(h) OPTIONS. To write and sell call options under which the holder
of the option has the right to purchase shares of stock held
by the Trustee under the Trust. In addition, the Trustee shall
have the power to purchase call options for the purchase of
shares of stock covered by such options in transactions the
effect of which is to reduce or eliminate the Trustee's
obligations with respect to a stock option contract or
contracts it has previously written and sold.
(i) APPOINTMENT OF INVESTMENT MANAGER. The Company or the
Administrator may appoint an investment manager to manage,
acquire or dispose of any or all assets of the Trust other
than Company Stock. Any investment manager appointed pursuant
to this paragraph shall acknowledge in writing that it is a
fiduciary with respect to the Plan and shall be (a) registered
as an investment adviser under the Investment Advisers Act of
1940, (b) a bank, as defined in that Act, or (c) an insurance
company qualified to manage, acquire or dispose of any asset
of a plan under the laws of more than one State. Neither the
Trustee nor the Company nor the Administrator nor the
Investment Committee shall be liable for the acts or omissions
of any investment manager appointed pursuant to this
paragraph, nor shall the Trustee, the Administra tor, the
Investment Committee or Company be under any obligation to
invest or otherwise manage any asset of the Plan which is
subject to the management of such investment manager. The
Company or the Administrator and the investment manager and
the Investment Committee may execute an agreement delineating
the duties, responsibilities and liabilities of the investment
manager with respect to any part of the Fund subject to the
management of that investment manager, and that investment
manager shall have all the powers granted to the Trustee under
the Trust with respect to such assets.
(j) ASSET TRANSFERS. An amount equal to all or any portion of the
value of any Participant's Account may in the Administrator's
discretion be transferred to any
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other qualified plan maintained by any corporation, firm,
business organization or employer.
(k) COMMON, COLLECTIVE OR GROUP TRUST FUND. To invest all, or any
part, of the assets of the Fund in any (1) common or
collective trust fund maintained under Code Section 584, or
(2) group trust maintained under Revenue Ruling 81-100, 1981-1
C.B. 326, exclusively for the investment of assets of tax
exempt pension and profit sharing plans, the provisions of
which upon such investment shall automatically be adopted and
made a part of this Trust Agreement for the period such
investment is made in such group trust.
(l) PURCHASE OF COMPANY STOCK. The Trustee is authorized to use up
to 100 percent of the Fund, in accordance with the Investment
Committee's instructions, to acquire and hold Company Stock.
The Trustee is authorized to sell, in accordance with the
Investment Committee's instructions, all or any portion of the
Company Stock held by it. The Investment Committee's
instructions to the Trustee shall include the terms and
conditions of any purchase or sale.
9.03 DISTRIBUTIONS. Upon written direction (which may be a continuing
direction) from the Administrator as to the name of any person to whom
money is to be paid and the amount thereof, the Trustee shall draw
checks in the name of the person designated by the Administrator and
deliver such checks in such manner and in such amounts and at such time
as the Administrator shall timely direct. The Trustee shall make
distributions under the Plan in cash or Company Stock as directed by
the Administrator. If the Trustee shall deem it necessary to withhold
any distribution pending compliance with any legal requirements,
including the probate of a will, the appointment of a personal
representative, the payment of, or provision for, estate or inheritance
taxes, or for death duties or otherwise, the Trustee shall notify the
Administrator and shall thereafter take no action pending the delivery
of (a) the Administrator's instructions to distribute notwithstanding
such requirements and (b) the Company's agreement in a form
satisfactory to the Trustee which protects the Trustee from any
liability arising out of noncompliance with such requirements.
9.04 ACCOUNTING BY TRUSTEE. Within 60 days after the close of each Plan
Year, the Trustee shall file with the Company and the Administrator a
written report setting forth all investments, receipts and
disbursements and other transactions during such Plan Year. Each
Valuation date the trustee shall determine the fair market value of the
Trust assets and the net earnings and gains or losses. If the Company
Stock is or becomes not readily tradable on an established securities
market, any determination of fair market value required under this Plan
shall be by an independent appraiser who meets requirements similar to
those prescribed by Treasury regulations under Code Section 170(a)(1).
9.05 EXPENSES AND COMPENSATION. No person performing any duties for the Plan
who already receives full-tie pay from the Employer or from an employee
organization whose members
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<PAGE> 41
are participants in the Plan shall receive compensation from the Plan,
except reimbursement of expenses properly and actually incurred. A
Trustee that does not receive full-time pay from the Employer or from
any organization whose members are participants in the Plan shall be
entitled to receive from the Plan reimbursement of expenses properly
and actually incurred and such reasonable compensation as may be agreed
on from time to tie with the Administrator. Unless paid by the Company,
all reasonable expenses of the Trust (including the Trustee's
compensation) and any taxes that may be levied or assessed against the
Trustee (including any taxes that may be levied or assessed upon the
Fund or income of the Fund) on account of the Trust shall be paid from
the Fund (including segregated accounts). The Company may from time to
time pay on behalf of the Trust such expenses and compensation as the
Company may in its discretion determine.
9.06 RESIGNATION OR REMOVAL OF TRUSTEE. Any Trustee may resign at any time
by instrument in writing delivered to the Company and, in such event,
the Company will, within thirty days after receipt of such resignation,
appoint a successor trustee by instrument in writing delivered to any
Trustee and to such successor trustee. The Company also at any time may
remove a Trustee upon 30 days' prior written notice to the Trustee and
appoint a successor trustee or trustees by instrument in writing
delivered to the Trustee and to such successor trustee. In either
event, on the appointment of such successor and delivery of the
successor's written acceptance of the appointment to the Company and
the retiring Trustee, the retiring Trustee shall promptly turn over to
such successor all Fund assets held by the Trustee and shall make a
final accounting to the Company and the Administrator; provided, any
assets which are invested in accordance with an investment contract or
agreement which by its terms precludes the realization upon and
distribution of such assets for a stated period of time shall continue
to be held by the Trustee under the terms and conditions of this
Agreement until the expiration of such period. The successor trustee
shall have no responsibility except to receive such money and property
from the retiring Trustee and to hold and administer the same
thereafter in accordance with this Agreement and shall not be
responsible for any act or omission of the retiring Trustee, and shall
not be required to make any claim or demand against the retiring
Trustee unless the Administrator shall in writing request the successor
trustee to make a claim of damage against such retiring Trustee within
the time limit prescribed after the filing of the Trustee's final
report. Any such successor trustee shall have and may exercise all the
rights, powers and duties of the Trustee as fully and to the same
extent as if it had originally been named Trustee herein.
9.07 NOTIFICATION TO TRUSTEE. Any notice, direction, order, request,
certification or instruction of the Administrator or the Investment
Committee to the Trustee shall be in writing and shall be signed on
behalf of the Administrator or the Investment Committee. Any notice,
direction, order, request or instruction of a Participant to the
Trustee shall be in writing and shall be signed by the Participant. The
Trustee and every other person shall be entitled to rely conclusively
upon any and all such notices, directions, orders, requests,
certifications and instructions received from the Administrator, the
Investment Committee or a Participant and reasonably believed to be
properly executed.
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9.08 INDEMNITY OF TRUSTEE. The Trustee shall not be required to undertake or
defend any litigation arising in connection with the Plan, the Trust
Agreement or the Fund unless the Trustee is first indemnified by the
Company or by the Fund against the Trustee's anticipated costs,
expenses, damages and liabilities in connection therewith, except where
the litigation is occasioned by, or involves a question of, default,
neglect or breach of a fiduciary duty of the Trustee. If any litigation
arises in connection with which the Trustee is entitled to indemnity
under this Section, the Trustee shall give the Company prompt written
notice of the litigation or pending litigation. The Company shall then
take charge of the disposition of the litigation, including compromise
or the conduct of the litigation, at the Company's expense, including
counsel fees. The Trustee at the Trustee's own expense may retain its
own counsel and share in the conduct of any such litigation, but any
failure by the Trustee to do so shall not adversely affect the
Trustee's right to indemnity under this Section.
9.09 PROCEDURE. If there is more than one Trustee, the Trustee may act by
the vote of a majority at a meeting or by a writing signed by a
majority without a meeting. During any period when the office of one of
the Trustees is vacant or during any period when a Trustee is unable to
serve for any reason, any remaining Trustee or Trustees shall act as
the sole Trustee or Trustees of the Trust. The Trustees may authorize
one or more of them to execute documents and act on their behalf. Any
person, persons, partnership or corporation may act, and shall be fully
protected in acting, in accordance with any representative or
instruction of any one of the Trustees.
9.10 APPOINTMENT OF TRUSTEE. The Trustee (or Trustees) named in Section 1 is
a party to this instrument, and it hereby accepts its appointment as
Trustee. Hereafter the number of Trustees may be fixed by the Company
from time to time. A Trustee need not be a Participant and may be an
individual, corporation or banking institution.
9.11 INVESTMENT IN COLLECTIVE TRUST FUND. The Trustee, for collective
investment purposes, may combine into one trust fund the Trust created
under this Plan with the trust created under any other qualified plan
the Employer maintains. However, separate records shall be maintained
for each trust in order to reflect properly each Participant's Account
under the plan or plans in which he is a Participant.
9.12 ACQUISITION LOANS. This Section specifically authorizes the Trustee, as
directed by the Investment Committee, to enter into Acquisition Loan
transactions. The Investment Committee's instructions to the Trustee
shall include the terms and conditions of the Acquisition Loan. The
following terms and conditions apply to any Acquisition Loan:
(a) The Trustee shall use the proceeds of the Acquisition Loan
within a reasonable time after receipt only for any or all of
the following purposes: (1) to acquire Company Stock, (2) to
repay such loan, or (3) to repay a prior Acquisition Loan.
Except as provided under Section 13, no Company Stock acquired
with the proceeds of an Acquisition Loan may be subject to a
put, call or other option, or buy-sell or similar
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arrangement while held by and distributed from this Plan,
whether or not this Plan is then an employee stock ownership
plan.
(b) The interest rate of the Acquisition Loan shall not be more
than a reasonable rate of interest.
(c) Any collateral the Trustee pledges to the creditor must
consist only of the assets purchased by the borrowed funds and
those assets, if any, the Trust used as collateral on the
prior Acquisition Loan repaid with the proceeds of any current
Acquisition Loan.
(d) The creditor shall have no recourse against the Trust under
the Acquisition Loan except with respect to such collateral
given for the Acquisition Loan, contributions (other than
contributions of Company Stock) that the Employer makes to the
Trust to meet its obligations under the Acquisition Loan, and
earnings attributable to such collateral and the investment of
such contributions. The payment made with respect to an
Acquisition Loan by the Plan during a Plan Year must not
exceed an amount equal to the sum of such contributions and
earnings received during or prior to the year less such
payments in prior years. The Administrator shall account
separately for such contributions and earnings in the books of
account of the Plan until the Trust repays the Acquisition
Loan.
(e) In the event of default upon the Acquisition Loan, the value
of Plan assets transferred in satisfaction of the Acquisition
Loan shall not exceed the amount of the default, and if the
lender is a Disqualified Person, the Acquisition Loan shall
provide for transfer of Plan assets upon default only upon and
to the extent of the failure of the Plan to meet the payment
schedule of the Acquisition Loan.
(f) The Administrator shall initially credit all assets acquired
with the proceeds of an Acquisition Loan to a suspense
account. In withdrawing assets from the suspense account, the
Administrator shall apply the provisions of Treas. Reg.
Sections 54.4975-7 (b)(8) and (15) as if all securities in the
suspense account were encum bered. Upon the payment of any
portion of the loan, the number of securities to be released
from encumbrance shall be determined solely with reference to
principal payments and the following rules shall apply: (1)
The loan shall provide for annual payments of principal and
interest at a cumulative rate that is not less rapid at any
time than level annual payments of such amounts for 10 years.
(2) Interest included in any payment shall be disregarded only
to the extent that it would be determined to be interest under
standard loan amortization tables. (3) The loan shall not be
renewed, extended or refinanced in such a manner that the sum
of the expired duration of the exempt loan, the renewal
period, the extension period and the duration of a new exempt
loan exceeds 10 years. Alternatively, the number of securities
to be released from encumbrance by the Administrator shall be
based on
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the number of securities held immediately before release for
the current Plan Year multiplied by the ratio that the
payments of principal and interest on the Acquisition Loan for
the Plan Year bears to the payments of principal and interest
on the Acquisition Loan for the Plan Year plus the total
remaining payments of principal and interest projected on the
Acquisition Loan over the duration of the Acquisition Loan
repayment period. The Administrator shall allocate assets
released from the suspense account to the Accounts of Active
Participants in accordance with Section 4.03.
(g) The loan shall be for a specified term and shall not be
payable on demand except in the case of default.
SECTION 10.
TOP HEAVY RULES
10.01 DEFINITIONS. For purposes of applying the provisions of Section 10:
(a) "Key Employee" means, as of any Determination Date, any
Employee or former Employee and the beneficiaries of such
Employee who, at any time during the Plan Year which includes
the Determination Date or during the preceding four Plan
Years, is (i) an officer of the Employer and such individual's
Compensation exceeds 50 percent of the dollar limitation under
section 415(b)(1)(A) of the Code, (ii) one of the Employees
owning the ten largest interests in the Employer who has
Compensation exceeding 100 percent of the dollar limitation
under section 415(c)(l)(A) of the Code, (iii) a more than five
percent owner of the Employer, or (iv) a more than one percent
owner of the Employer who has Compensation during the Plan
Year of more than $150,000. The constructive ownership rules
of section 318 of the Code (or the principles of that section,
in the case of any unincorporated Employer), will apply to
determine ownership in the Employer. The determination of who
is a Key Employee shall be made in accordance with section
416(i) of the Code and the regulations under that Code
section.
(b) "Non-Key Employee" is an Employee who does not meet the
definition of Key Employee.
(c) "Compensation" for purposes of this Section 10 means
Compensation as defined in section1.07(a) and as limited by
section 401(a)(17) of the Code, except that any exclusion
described in section 1.07(a) shall not apply.
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<PAGE> 45
(d) "Required Aggregation Group" means: (1) Each qualified plan of
the Employer (whether or not terminated) in which at least one
Key Employee participates at any time during the five Plan
Year period ending on the Determination Date; and (2) Any
other qualified plan of the Employer which enables a plan
described in (1) to meet the requirements of section 401(a)(4)
of the Code or section 410 of the Code.
(e) "Permissive Aggregation Group" is the Required Aggregation
Group plus any other qualified plans maintained by the
Employer, but only if such group would satisfy in the
aggregate the requirements of Code section 401(a)(4) and Code
section 410. The Administrator shall determine which plan to
take into account in determining the Permissive Aggregation
Group.
(f) "Employer" means all the members of a controlled group of
corporations (as defined in Code section 414(b)), of a
commonly controlled group of trades or businesses (whether or
not incorporated) (as defined in Code section 414(c)), or an
affiliated service group (as defined in Code section 414(m)),
of which the Company is a part.
(g) "Determination Date" for any Plan Year is the Anniversary Date
of the preceding Plan Year or, in the case of the first Plan
Year of the Plan, the Anniversary Date of that Plan Year.
10.02 DETERMINATION OF TOP HEAVY STATUS.
(a) The Plan is top heavy for a Plan Year if the top heavy ratio
as of the Determination Date exceeds 60 percent. The top heavy
ratio is a fraction, the numerator of which is the Sum of the
Account balances of all Key Employees as of the Determination
Date, the contributions due as of the Determination Date, and
distributions made within the five Plan Year period ending on
the Determination Date, and the denominator of which is a
similar sum determined for all Employees. The Administrator
shall calculate the top heavy ratio without regard to the
Account balances attributable to deductible voluntary Employee
contributions, and without regard to the Account balance of
any Non-Key Employee who was formerly a Key Employee. The
Administrator shall calculate the top heavy ratio by
disregarding the Account balance (including distributions, if
any, of the Account) of an individual who has not received
credit for at least one Hour of Service during the five Plan
Year period ending on the Determination Date. The
Administrator shall calculate the top heavy ratio, including
the extent to which it must take into account distributions,
rollovers and transfers, in accordance with Code Section 416
and the regulations under that Code Section.
(b) If the Employer maintains other qualified plans (including a
simplified employee pension plan) this Plan is top heavy only
if it is part of the Required Aggregation Group, and the top
heavy ratio for both the Required Aggregation Group and the
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<PAGE> 46
Permissive Aggregation Group exceeds 60 percent. The
Administrator shall calculate the top heavy ratio in the same
manner as required by the subsection (a) of this Section
10.02, taking into account all plans within the aggregation
group. The Administrator shall calculate the present value of
accrued benefits and the other amounts the Administrator must
take into account under simplified employee pension plans
included within the group in accordance with the terms of
those plans, Code Section 416 and the regulations under that
Code section. The Administrator shall calculate the top heavy
ratio with reference to the Determination Dates that fall
within the same calendar year.
10.03 MINIMUM EMPLOYER CONTRIBUTION. If this Plan is top heavy in any Plan
Year, the Company guarantees a minimum contribution of the lesser of
(i) three percent of Compensation for the Plan Year for each Non-Key
Employee who is a Participant employed by the Employer on the
Anniversary Date of the Plan Year, without regard to Hours of Service
completed, or (ii) if the contribution rate for the Key Employee with
the highest contribution rate is less than three percent, the
guaranteed minimum contribution for Non-Key Employees shall equal the
highest contribution rate received by a Key Employee. Such minimum
contribution shall take priority over the allocation provisions of
Section 4.03. The Plan satisfies the guaranteed minimum contribution
for the Non-Key Employee if the Non-Key Employee's contribution rate is
at least equal to the minimum contribution. For purposes of this
Section, a Non-Key Employee Participant includes any Employee otherwise
eligible to participate in the Plan but who is not a Participant
because his Compensation does not exceed a specific level. The
contribution rate is the sum of Employer contributions (not including
Employer contributions to Social Security) and Forfeitures, if any,
allocated to the Participant's Account for the Plan Year divided by his
Compensation for the Plan Year. To determine the contribution rate, the
Administrator shall consider all qualified defined contribution plans
maintained by the Employer as a single plan. Subject to the next
sentence, if the Employer also contributes under and maintains a money
purchase pension plan, the Company shall make any additional
contribution required under this Section pursuant to the money purchase
pension plan formula. Notwithstanding the preceding sentence, if a
Participant participates both in this Plan and a defined benefit plan
sponsored by the Employer, then that Participant shall receive the
minimum benefit under the defined benefit plan rather than under this
Section 10.03. Elective contributions under a Code Section 401(k)
arrangement and employer matching contributions allocated on the basis
of those elective contributions shall not be counted in the calculation
of a Non-Key Employee's contribution rate, but shall be counted in the
calculation of a Key Employee's contribution rate.
10.04 VESTING TABLE. For any Plan Year for which the Plan is top heavy, the
Administrator shall calculate the Nonforfeitable percentage of a
Participant's Account derived from Employer contributions under the
following table rather than in accordance with Section 5.05:
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<PAGE> 47
YEARS OF SERVICE NONFORFEITABLE PERCENTAGE
Fewer than 3 0
3 or more 100
The above table shall not apply to the Account of any Participant who
does not have an Hour of Service after the Plan becomes top heavy. A
shift to the above table shall be effective on the first day of the
Plan Year for which the Plan becomes top heavy. If in any Plan Year
after the Plan becomes top heavy, the Plan ceases to be top heavy, the
Administrator may, in its sole discretion, elect to (a) continue to
apply the table in this Section 10.04, or (b) revert to the table in
Section 5.05. Any shift between the above table and the table in
Section 5.05 (whether shifting to the above table or reverting to the
table in Section 5.05) Shall be deemed an amendment to the vesting
schedule, and Section 10.05 shall apply. This Section 10.04 shall not
be applicable if vesting under the table in Section 5.05 is at least as
rapid as under the table in this Section 10.04.
10.05 AMENDMENT TO VESTING SCHEDULE. Although the Company reserves the right
to amend the above table for the calculation of the Nonforfeitable
percentage of Participant's Account at any time, the Administrator
shall not apply any amended table to reduce the Nonforfeitable
percentage of any Participant's Account (determined as of the later of
the date the Company adopts the amendment or the amendment becomes
effective) to a percentage less than the Nonforfeitable percentage
computed under the Plan with regard to the amendment. If the table for
the calculation of the Nonforfeitable percentage of the Account is
amended in any way that directly or indirectly affects the computation
of a Participant's Nonforfeitable percentage or if this Section 10.5
applies pursuant to Section 10.04, then each Participant with at least
three Years of Service may elect to have the Nonforfeitable percentage
of his Account computed under the Plan without regard to the amendment.
The Participant must file his written election with the Administrator
within 60 days of the latest of (a) the Company's adoption of the
amendment; (b) the effective date of the amendment; or (c) the
Participant's receipt of a copy of the amendment.
10.06 ADJUSTMENT TO CODE SECTION 415 LIMITATIONS. If a Participant is, or
was, covered under a Defined Benefit Plan and a Defined Contribution
Plan maintained by the Employer, and if the top-heavy ratio is more
than 0.90, then the overall limits on combined plan contributions and
benefits under Code section 415 and Section 11.09 of this Plan shall be
reduced so that 1.0 shall be substituted for 1.25 in the definitions of
Defined Contribution Fraction and Defined Benefit Fraction. If the
top-heavy ratio is less than 0.90, but is more than 0.60, then either
(i) the overall limits on combined plan contributions and benefits
under Code section 415 and Section 11.09 of this Plan shall be reduced
so that 1.0 shall be substituted for 1.25 in the definitions of Defined
Contribution Fraction and Defined Benefit Fraction, or (ii) the minimum
benefit accrual for the Defined Benefit Plan under Section 10.03 shall
be increased to 3% under Code section 416(h)(2). If, in any year, the
sum of the Defined Benefit Fraction and Defined Contribution Fraction
exceeds the reduced fractional limits above, the rate of
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<PAGE> 48
benefit accruals under the Defined Benefit Plan shall be reduced so
that the sum of the fractions equals the applicable limit.
SECTION 11.
MISCELLANEOUS
11.01 NONDIVERSION. Except as provided in Section 11.02 it shall be
impossible, at any time, for any part of the Trust to revert to the
Employer or to be used for, or diverted to, purposes other than for the
exclusive benefit of Employees and Beneficiaries.
11.02 RETURN OF COMPANY CONTRIBUTIONS. Contributions shall be returned to the
Company only in accordance with Section 11.09 or subsections (a), (b)
or (c) below:
(a) If a contribution is made by the Company by a mistake of fact,
the contribution shall, at the Company's request, be returned
to the Company within one year after payment of the
contribution.
(b) The Company's contributions are conditioned upon the initial
qualification of the Plan and if the Plan receives an adverse
determination with respect to its initial determination, then
such contributions shall, at the Company's request, be
returned to the Company within one year after the date of
denial of qualification of the Plan, provided that the
application for qualification is made by the time prescribed
by law for filing the Employer's return for the taxable year
in which the Plan is adopted, or such later date as the
Secretary of the Treasury may prescribe.
(c) The Company's contributions are conditioned upon the
deductibility of the contributions under section 404 of the
Code, and to the extent the deduction is disallowed, such
contributions (to the extent disallowed) shall, at the
Company's request, be returned to the Company within one year
after the disallowance of the deduction.
(d) The maximum that may be returned to the Company under
subsection (a) or (c) is the excess of (1) the amount
contributed, over, as relevant, (2) (i) the amount that would
have been contributed had no mistake of fact occurred, or (ii)
the amount that would have been contributed had the
contribution been limited to the amount that is deductible
after any disallowance. Earnings attributable to the excess
may not be returned to the Company, but losses attributable
thereto must reduce the amount to be so returned. Furthermore,
if the withdrawal of the amount attributable to the mistaken
or nondeductible contribution would cause the balance of the
individual Account of any Participant to be reduced to less
than the balance which would have
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been in the Account had mistaken or nondeductible amount not
been contributed, then the amount to be returned to the
Company shall be limited so as to avoid such reduction. In the
case of a reversion due to initial disqualification of the
Plan, the entire assets of the Plan attributable to Company
contributions shall be returned to the Company. A reversion
authorized under this Section 11.02 shall be paid even if a
resulting adjustment is made to the Account of a Participant
that is partly or entirely Nonforfeitable.
11.03 NONASSIGNABILITY.
(a) The benefit or interest under the Plan and Trust of any person
shall not be assignable or alienable by that person and shall
not be subject to alienation by operation of law or legal
process. The preceding sentence shall apply to the creation,
assignment or recognition of any right to any benefit payable
with respect to a Participant pursuant to a domestic relations
order, unless such order is determined to be a qualified
domestic relations order, as defined in section 414(p) of the
Code. A domestic relations order entered before January 1,
1985, shall be treated as a qualified domestic relations order
if payment of benefits pursuant to the order has commenced as
of such date, and may be treated as a qualified domestic
relations order if payment of benefits is not commenced as of
such date, even though the order does not satisfy the
requirements of Section 414(p) of the Code.
(b) This plan specifically permits a distribution to an alternate
payee under a qualified domestic relations order at any time,
irrespective of whether the Participant has attained his
earliest retirement age (as defined under Code section 414(p))
under the Plan. A distribution to an alternate payee prior to
the Participant's attainment of earliest retirement age is
available only if: (1) the order specifies distribution at
that time or permits an agreement between the Plan and the
alternate payee to authorize an earlier distribution; and (2)
if the present value of the alternate payee's benefits under
the Plan exceeds $5,000, and the order requires, the alternate
payee consents to any distribution occurring prior to the
Participant's attainment of earliest retirement age. Nothing
in this Section 11.03 gives a Participant a right to receive
distribution at a time otherwise not permitted under the Plan
nor does it permit the alternate payee to receive a form of
payment not permitted under the Plan.
11.04 CERTIFICATES CONCERNING BOARD ACTION. Any action by the Company's Board
of Directors may be evidenced by a resolution of the Board of
Directors, certified to the Administrator or to the Trustee by the
Secretary of the Company. The Administrator and the Trustee shall act,
and shall be fully protected in acting, in accordance with documents
certified in the manner set forth above.
11.05 CONSTRUCTION. The validity, interpretation, construction and
administration of the Plan shall be governed by the laws of Kentucky
except to the extent preempted by Federal law. The
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masculine gender, wherever used in this Plan, shall include the
feminine. The singular shall include the plural, and the plural the
singular, wherever appropriate for the proper interpretation of this
Plan. The headings in this Plan appear solely for ease of reference and
shall not be considered in the interpretation or construction of this
Plan. The Company intends that this Plan shall be qualified under Code
section 401(a), that the Plan shall be an employee stock ownership plan
under Code Section 4975(e)(7) and ERISA Section 407(d)(6), and that the
related trust shall be exempt under Code section 501(a); and the Plan
and related trust shall be interpreted in accordance with the
applicable requirements of the Code, ERISA and the regulations
thereunder.
11.06 INDEMNITY OF EMPLOYEES. Either directly or through insurance coverage
or through some combination of these methods the Company shall
indemnify and hold harmless its employees, officers and directors and
the members of the Administrative Committee and the Investment
Committee against all claims, damages and liabilities, in respect of
any claim or liability which may be asserted against any of them
because of any act or omission in the administration of the Plan or the
Trust or in their capacity as Trustees, except in case of any fraud or
willful wrongdoing by the person seeking to be indemnified and held
harmless. If any liability is asserted against an indemnitee with
respect to which the indemnitee is entitled to indemnity under this
section, the indemnitee shall give the Company prompt written notice of
the assertion of the liability. The Company shall then take charge of
the disposition of the asserted liability, including compromise or the
conduct of litigation, at the Company's expense, including counsel
fees. The indemnitee may at the indemnitee's own expense retain his own
counsel and share in the conduct of any such litigation, but any
failure by the indemnitee to do so shall not adversely affect the
indemnitee's right to indemnity under this Section.
11.07 MERGER. If this Plan is merged or consolidated with any other employee
benefit plan or if the assets or liabilities under this Plan are
transferred to any other employee benefit plan, each Participant under
the Plan must receive a benefit after such merger, consolidation or
transfer which is equal to or greater than the benefit such Participant
would have been entitled to receive immediately before such merger,
consolidation or transfer, the amount of such benefits before and after
such merger, consolidation or transfer to be determined as if the Plan
and such other employee benefit plan were then terminated.
11.08 INTERNAL REVENUE CODE. Any reference in this Plan to any provision of
the Internal Revenue Code of 1986, as amended, shall also be read as a
reference to the corresponding provision, if any, of any subsequent
Federal legislation.
11.09 ANNUAL ADDITIONS. Annual Additions to a Participant's Account shall be
limited in accordance with the following provisions.
(a) The maximum Annual Addition that may be contributed or
allocated to a Partici pant's account under the Plan for any
Plan Year shall not exceed the lesser of (i) the
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<PAGE> 51
Defined Contribution Dollar Limitation, or (ii) 25 percent of
the Participant's compensation, within the meaning of section
415(c)(3) of the Code, for the Limitation Year, provided that
the compensation limitation shall not apply to any
contribution for medical benefits (within the meaning of Code
sections 401(h) and 419A(f)(2) which is otherwise treated as
an Annual Addition.
(b) If there is any Excess Amount, any nondeductible voluntary
contributions shall be returned to the Participant to the
extent such return would reduce the Excess Amount. Any
remaining Excess Amount shall be disposed of as follows:
(1) If the Participant is employed by the Employer at the
end of the Limitation Year, then the Excess Amount
shall be used to reduce future contributions
(including any allocation of Forfeitures) under the
Plan for the next Limitation Year (and for each
succeeding Limitation Year as is necessary) for the
Participant. If the Participant is not employed by
the Employer at the end of the Limitation Year or any
succeeding Limitation Year before the Excess Amount
is allocated, the Excess Amount shall be held
unallocated in a suspense account. The suspense
account shall be applied to reduce future Employer
contributions (including the allocation of any
Forfeitures) for all remaining Participants in the
next Limitation Year, and each succeeding Limitation
Year if necessary in accordance with subsection (2)
below.
(2) If a suspense account is in existence at any time
pursuant to this subsection (b), it shall not
participate in any allocation of the Fund's
investment gains and losses. If the Plan is
terminated, any such suspense account shall revert to
the Employer to the extent it may not then be
allocated to any Participant's Account.
(c) If a Participant is, or was, covered under a defined benefit
plan and a defined contribution plan maintained by the
Employer, the sum of the Participant's Defined Benefit Plan
Fraction and Defined Contribution Plan Fraction may not exceed
1.0 in any Limitation Year. If, in any Limitation Year, the
sum of the Defined Benefit Plan Fraction and the Defined
Contribution Plan Fraction will exceed 1.0, the rate of
benefit accruals under the defined benefit plan will be
reduced so that the sum of the fractions equals 1.0.
(d) For purposes of this Section 11.09, the following terms shall
have the following meanings:
(1) "Defined Contribution Dollar Limitation" means
$30,000 as adjusted under Code section 415(d).
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(2) (A) Subject to subparagraph (B), "Annual
Addition" means the amount allocated to a
Participant's Account during the Plan Year
that constitute (i) the lesser of Employer
contributions or the fair market value of
the Financed Shares released as a result of
the contributions`, (ii) forfeitures, (iii)
participant and elective contributions, and
(iv) amounts allocated to an individual
medical account, as defined in section
415(1)(2) of the Code, which is part of a
pension or annuity plan maintained by the
Employer, or amounts derived from
distributions which are attributable to
post-retirement medical benefits, allocated
to the separate account of a key employee,
as defined in Code section 419(A)(d)(3),
under a welfare benefit fund, as defined
in Code section 419(e), maintained by the
Employer, both only with respect to Annual
Additions for a defined contribution plan.
(B) The term "Annual Addition" shall not include
any Company contributions applied to pay
interest on an Acquisition Loan, or any
Financed Shares which are allocated as
Forfeitures; provided however, this sentence
shall not apply in a Limitation Year for
which more than one-third of the Company
contributions, which are deductible under
Code section 404(a)(9), are allocated to the
Accounts of Highly Compensated Employees.
(3) "Maximum Permissible Amount" means the minimum Annual
Addition allowed under Section 11.09(a) above.
(4) "Excess Amount" means, with respect to a Participant,
the excess of his Annual Additions for the Limitation
Year over the Maximum Permissible Amount, which
occurs due to an allocation of Forfeitures, an error
in estimating a Participant's Compensation, or any
other fact or circumstance recognized by the
Secretary of the Treasury or his delegate as
reasonable.
(5) "Limitation Year" means a 12 consecutive month period
ending on the Anniversary Date.
(6) "Defined Benefit Plan Fraction" is a fraction, the
numerator of which is the sum of the Participant's
projected annual benefits under all defined benefit
plans (whether or not terminated) maintained by the
Employer, and the denominator of which is the lesser
of (i) 1.25 times the dollar limitation of section
415(b)(1)(A) of the Code in effect for the Limitation
Year, or (ii) 1.4 times the Participant's average
compensation for the three consecutive years that
produces the highest average. Notwithstanding the
above, if the Participant was a Participant as of the
first day of the first Limitation Year beginning
after December 31, 1986, in one or more defined
benefit plans
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<PAGE> 53
maintained by the Employer which were in existence on
May 6, 1986, the denominator of this fraction will
not be less than 125% of the sum of the annual
benefits under such plans which the Participant had
accrued as of the close of the last Limitation Year
beginning before January 1, 1987, disregard ing any
changes in the terms and conditions of the plan after
May 5, 1986. The preceding sentence applies only if
the defined benefit plans individually and in the
aggregate satisfied the requirements of Section 415
of the Code for all Limitation Years beginning before
January 1, 1987.
(7) "Defined Contribution Plan Fraction" is a fraction,
the numerator of which is the sum of the Annual
Additions to the Participant's Account under all
defined contribution plans maintained by the Employer
(whether or not terminated), for the current and all
prior Limitation Years, and the denomina tor of which
is the sum of the lesser of the following amounts
determined for such year and for each prior year of
service with the Employer (i) 1.25 times the dollar
limitation in effect under section 415(c)(l)(A) of
the Code for such year, or (ii) 1.4 times the amount
which may be taken into account under section
415(c)(1)(B) of the Code. Notwithstanding the above,
if the Employee was a Participant as of the end of
the first day of the first Limitation Year beginning
after December 31, 1986, in one or more defined
contribution plans maintained by the Employer which
were in existence on May 6, 1986, the numerator of
this fraction will be adjusted if the sum of this
fraction and the Defined Benefit Plan Fraction would
otherwise exceed 1.0 under the terms of the this
Plan. Under the adjustment, an amount equal to the
product of (i) the excess of the sum of the fractions
over 1.0 times (ii) the denominator of the Defined
Contribution Plan Fraction will be permanently
subtracted from the numerator of the Defined
Contribution Fraction. The adjustment is calculated
using the fractions as they would be computed as of
the end of the last limitation Year beginning before
January 1, 1987, and disregarding any changes in the
terms and conditions of the plan made after May 6,
1986, but using the Section 415 of the Code
limitation applicable to the first Limitation Year
beginning on or after January 1, 1987. The Annual
Addition for any Limitation Year beginning before
January 1, 1987, shall not be recomputed to treat all
employee contributions as Annual Additions.
(8) "Compensation" means Compensation as defined in
section 1.13(a) except that any exclusion described
in section 1.13(a) shall not apply. Notwithstand ing
any provision in Section 1.13(a) to the contrary,
Compensation shall include all amounts actually paid
or made available during the Limitation Year.
(9) Projected Annual Benefit Income" means the annual
benefit to which the Participant would be entitled
under the terms of the Plan, if the Participant
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continued employment until Normal Retirement Age (or
current age, if later) and the Participant's
compensation for the Limitation Year and all other
relevant factors used to determine such benefit
remain constant until Normal Retirement Age (or
current age, if later).
(e) If the Company or any Employer contributes any amount on
behalf of a Participant in this Plan, to any other defined
contribution plan, welfare benefit fund as defined in Code
section 419(e), or individual medical account as defined in
Code section 415(l)(2), maintained by any Employer, then the
limitation on annual additions provided in Section 11.09(a)
shall apply in the aggregate to this Plan and such other
plans. Reductions of annual additions, where required, shall
be accomplished first in the manner set forth in the Company's
401(k) Profit Sharing Plan, and then by allocating any
remaining excess to this Plan and accomplishing the reductions
in the manner set forth in this Section 11.09. For the purpose
of applying the term "Employer" in this Section 11.09, the
references in Section 1.15 to Code Sections 414(b) and 414(c)
shall be modified as provided in Code Section 415(h).
11.10 STATUS OF PARTICIPANTS. Neither the establishment or any amendment of
the Plan, nor the payment of any benefits, shall be construed as giving
to any Participant or other person any legal or equitable right against
the Employer, the Administrator or the Trustee except as expressly
provided herein, and in no event shall the terms of employment of any
Employee or Participant be modified or in any way be affected hereby
except as expressly provided herein.
11.11 INCAPACITATED RECIPIENT. If the Administrator finds that any
Participant or any Beneficiary entitled to receive a payment under this
Plan is unable to care for his affairs because of illness, injury or
minority, any such payment may, at the Administrator's direction, be
made for his benefit to the spouse, child, brothers, sisters, parents
or the person having custody of such Participant or such Beneficiary,
unless a prior claim shall have been made by a duly appointed guardian
or other legal representative.
11.12 DISCRETIONARY ACTS. Any discretionary acts to be taken, or policies to
be adopted, under the terms and provisions of this Plan and Trust
Agreement by the Administrator or the Trustee shall be uniform in their
nature and application to all those similarly situated.
11.13 NOTICES TO ADMINISTRATOR. The Company shall notify the Administrator of
the occurrence of any event of which the Company has knowledge that
would make any Participant or any Beneficiary eligible for any benefit
under the Plan.
11.14 UNCLAIMED ACCOUNT PROCEDURE.
(a) The Plan does not require either the Trustee or the
Administrator to search for, or ascertain the whereabouts of,
any Participant or Beneficiary. The Administrator, by
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certified mail addressed to his last known address of record
with the Administrator or the Employer, shall notify any
Participant, or Beneficiary, that he is entitled to a
distribution under this Plan. If the Participant, or
Beneficiary, fails to claim his distributive share or make his
whereabouts known in writing to the Administrator within six
months from the date of mailing of the notice, the
Administrator shall thereafter treat the Participant's or
Beneficiary's unclaimed payable Accrued Benefit as a
Forfeiture, which shall be reallocated in accordance with
Section 4.03 for the Plan Year in which the Forfeiture occurs.
A Forfeiture under this Section shall occur when the
Administrator determines that the Participant or Beneficiary
cannot be located.
(b) If a Participant or Beneficiary who has incurred a Forfeiture
of his Accrued Benefit under this Section makes a claim, at
any time, for his forfeited Accrued Benefit, the Administrator
shall restore the Participant's or Beneficiary's forfeited
Accrued Benefit to the same dollar amount as the dollar amount
of the Accrued Benefit forfeited, unadjusted for any gains or
losses occurring subsequent to the date of the forfeiture. The
Administrator shall make the restoration during the Plan Year
in which the Participant or Beneficiary makes the claim, first
from the amount, if any, of forfeitures the Administrator
otherwise would allocate for the Plan Year, and then from the
amount or additional amount, the Employer shall contribute to
enable the Administrator to make the required restoration. The
Administrator shall direct the Trustee to distribute the
Participant's or Beneficiary's restored Accrued Benefit to him
not later than sixty days after the close of the Plan Year in
which the Administra tor restores the forfeited Accrued
Benefit. The forfeiture provisions of this Section shall apply
solely to the Participant's or to the Beneficiary's Accrued
Benefit derived from Employer contributions.
SECTION 12.
FIDUCIARY RESPONSIBILITIES
12.01 NAMED FIDUCIARIES. The control, management and administration of the
Plan and the control, management and disposition of the Fund shall be
controlled by the following fiduciaries (individually a "Named
Fiduciary" and collectively the "Named Fiduciaries"): The Company, the
Administrator, the Administrative Committee, the Investment Committee,
and the Trustee.
12.02 POWERS AND RESPONSIBILITIES. Each Named Fiduciary shall have only such
powers and responsibilities as are expressed in the Plan. Any power or
responsibility for the control, management or administration of the
Plan or Fund which is not expressly allocated to a Named Fiduciary
shall be deemed allocated to the Administrator. Each Named Fiduciary
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<PAGE> 56
shall have no responsibility to inquire into the accounts and omissions
of any other Named Fiduciary in the exercise of powers or the discharge
of responsibilities assigned to such other Named Fiduciary by the Plan.
This provision is intended to allocate to each Named Fiduciary the
individual responsibility for the prudent execution of the functions
assigned to that Named Fiduciary, and none of such responsibilities or
any other responsibility shall be shared by two or more Named
Fiduciaries unless such sharing shall be provided for by a specific
provision of the Plan or the Trust. If one Named Fiduciary is required
by the Plan to follow the directions of another Named Fiduciary, the
two Named Fiduciaries shall not be deemed to have been assigned a
shared responsibility, but the responsibility of the Named Fiduciary
giving the directions shall be deemed his sole responsibility.
12.03 ALLOCATION OF RESPONSIBILITIES. Any Named Fiduciaries may by agreement
among themselves allocate to one or more other Named Fiduciaries any
responsibility or duty assigned to a Named Fiduciary by the Plan;
provided, however, that any agreement respecting such allocation shall
be in writing and shall be filed by the Administrator with the records
of the Plan. No such agreement shall be effective as to any Named
Fiduciary which is not a party to the agreement until such Named
Fiduciary has received written notice of the agreement from the Named
Fiduciaries who are parties to the agreement. Any Named Fiduciary may,
by written instrument filed by the Administrator with the records of
the Plan, designate a person who is not a Named Fiduciary to carry out
any of the Named Fiduciary's responsibilities under the Plan; provided,
however, that no such designation shall be effective as to any other
Named Fiduciary until such other Named Fiduciary has received notice of
that designation.
12.04 EMPLOYEES. Any Named Fiduciary or a person designated by a Named
Fiduciary to perform any responsibility of the Named Fiduciary pursuant
to the procedure described in Section 12.03 may employ one or more
persons to render advice with respect to any responsibility such Named
Fiduciary has under the Plan or such person has because of such
designation.
12.05 FUNDING POLICY. The Administrative Committee annually shall determine
anticipated liquidity requirements to meet projected benefit payments
for the following Plan Year and, if any adjustment from previous annual
liquidity requirements is appropriate, notice of the adjusted
requirement shall be communicated as soon as possible to the Trustee in
writing so that Fund investment policies may be appropriately
coordinated with Plan needs. If no notice is delivered to the Trustee
by the first day of any Plan Year, the Trustee may assume without
further inquiry that the liquidity requirements for such Plan Year
remain the same as requirements for the preceding Year.
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SECTION 13.
COMPANY STOCK
13.01 VOTING OF COMPANY STOCK. Except as provided in subsections (a) and (b),
all Company Stock held in the Trust shall be voted by the Trustee as
directed by the Administrative Committee.
(a) With respect to the voting of Company Stock which is not a
registration type class of securities, a Participant (or
Beneficiary) shall have the right to direct the Trustee
regarding the voting of such Company Stock allocated to his
Company Stock Account with respect to any corporate matter
which involves the approval or disap proval of any corporate
merger or consolidation, recapitalization, reclassification,
liquidation, dissolution, sale of substantially ail assets of
a trade or business, or such similar transaction as the
Treasury may prescribe in regulations.
(b) Each Participant (or Beneficiary) shall have the right to
direct the Trustee as to the exercise of any and all voting
rights attributable to shares of Company Stock then allocated
to his Company Stock Account, but only if the shares are a
registration type class of securities.
(c) The term "registration type class of securities" means (1) a
class of securities required to be registered under Section 12
of the Securities Exchange Act of 1934, and (2) a class of
securities which would be required to be so registered except
for the exemption from registration provided in subsection
(g)(2)(H) of such Section 12.
13.02 DIVIDENDS ON COMPANY STOCK.
(a) Any cash dividends paid with respect to Company Stock
(including Company Stock held in a suspense account) shall be
allocated to the Other Investments Account of a Participant in
the same ratio, determined as of the dividend declaration
date, that Company Stock allocated to a Participant's Company
Stock Account bears to the Company Stock allocated to all
Company Stock Accounts. However, cash dividends shall not be
allocated to Other Investment Accounts to the extent the
Administrator directs the Trustee (1) to apply the dividends
to the payment of an Acquisition Loan in accordance with
subsection (b), or (2) to apply the dividends to purchase
additional shares of Company Stock as provided in Section
4.02.
(b) Any cash dividends paid with respect to Company Stock
allocated to a Participant's Company Stock Account or held in
a suspense account may (as required by the applicable
Acquisition Loan documentation or, if not so required, as
determined in the sole discretion of the Administrator) be
used to repay the principal balance of an outstanding
Acquisition Loan or interest thereon in whole or in part, or
to purchase
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<PAGE> 58
additional shares of Company Stock as provided in Section
4.02. Financed Shares released from the suspense account by
reason of dividends paid with respect to Company Stock shall
be allocated to Participants' Company Stock Accounts as
follows:
(1) First, Financed Shares with a Fair Market Value at
least equal to the dividends paid with respect to the
Company Stock allocated to the Partici pants' Company
Stock Accounts shall be allocated among and credited
to the Company Stock Accounts of such Participants,
pro rata, according to the number of shares of
Company Stock held in such accounts on the dividend
declaration date.
(2) Then, any remaining Financed Shares released shall be
allocated among and credited to the Company Stock
Accounts of all Participants, pro rata, according to
each Participant's Compensation.
13.03 PUT OPTION. If the Company Stock is or becomes not readily tradeable on
an established securities market, then, at the time of distribution,
the Employer shall issue a "put option" with respect to Company Stock.
The put option shall permit the Participant to sell the Company Stock
to the Employer, at any time during two option periods, at the current
fair market value. The first put option period shall run for a period
of 60 days commencing on the date of distribution of the Company Stock
to the Participant, and if not exercised within that period the put
option shall temporarily lapse. The fair market value of the Company
Stock shall be re-calculated as of the close of the Plan Year in which
the first put option period commenced, and the Administrator shall
notify each distributee, who did not exercise the put option during the
first period, of the revised value of the Company Stock. The second put
option period shall commence on the date such notice is given and shall
permanently lapse 60 days thereafter. If a Participant or Beneficiary
exercises his put option, the Employer shall purchase the Company Stock
at fair market value upon the terms provided under Section 13.04. The
Employer may grant the Trust an option to assume the Employer's rights
and obligations under Sections 13.03 and 13.04. Sections 13.03 and
13.04 shall continue to apply to any the shares of Company Stock
acquired with the proceeds of an Acquisition Loan even if the Plan
ceases to be an employee stock ownership plan within the meaning of
Code Section 4975(e)(7).
13.04 PAYMENT OF PURCHASE PRICE. If the Company (or the Trustee at the
Administrator's direction) exercises an option to purchase Company
Stock pursuant to the exercise of a put option under Section 13.03, the
payment shall be made under (a) or (b) below at the election of the
Employer or Trustee.
(1) If the Company Stock was distributed as part of a
total distribution, payment may be made in
substantially equal installments over a period not
exceeding 5 years, subject to a Participant's
election for a longer period. The first
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<PAGE> 59
installment shall be paid no later than 30 days after
the Participant or Beneficiary exercises the put
option. The balance of the purchase price shall be
evidenced by a promissory note delivered to the
selling Participant or Beneficiary on the closing
date. The note shall bear a reasonable rate of
interest, determined as of the closing date, and the
purchaser shall provide adequate security for payment
of the note. The note shall provide for equal annual
installments with interest payable on each
installment, the first installment being due and
payable one year after the closing date. The note
shall also provide for acceleration upon 30 days'
default of the payment on interest or principal and
shall grant to the maker of the note the right to
prepay the note in whole or in part at any time or
times without penalty
(a) If the distribution was not part of a total distribution, the
payment shall be in a lump sum. If the distribution was part
of a total distribution, the purchaser may elect to make
payment in a lump sum. If the payment is by lump sum, the
purchaser shall pay the Participant or Beneficiary the fair
market value of the Company Stock being purchased no later
than 30 days after the date the Participant or Beneficiary
exercises the put option.
(b) The following terms shall have the meanings indicated below:
(1) "Closing date" means the date and time on which the
selling Participant or Beneficiary and the purchaser
may agree for purposes of effecting a sale and
purchase under Section 13.03, provided the closing
date shall occur not later than 30 days after the
Participant or Beneficiary exercises a put option.
(2) "Fair market value" means the value of the Company
Stock determined in accordance with Section 9.04 (A)
as of the date of the exercise of an option if the
exercise is by a disqualified person, or (B) in all
other cases, as of the most recent Valuation Date.
(3) "Total distribution" means a distribution to a
Participant or Beneficiary, within one taxable year
of the recipient, of the entire balance to the
recipient's credit under the Plan.
SECTION 14.
AMENDMENT AND TERMINATION
14.01 AMENDMENT. The Company reserves the right in its sole and final
discretion to amend or modify the Plan and the Trust in any respect at
any time and from time to time to any extent
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<PAGE> 60
which it may deem desirable, and any amendment may be effective as of
any date (including a date that precedes the date of adoption);
provided, however, that
(a) Without the written consent of the Trustee no amendment shall
be made which will increase the duties or responsibilities of
the Trustee;
(b) Except for amendments required by the Internal Revenue Service
as a condition of its approval of the Plan and Trust as
qualifying under Section 401(a) and Section 501(a) of the
Code, and subject to Sections 11.02 and 11.14 of this Plan,
(1) no amendment shall divest any Participant or Beneficiary
of any interest vested in that Participant or Beneficiary and
(2) no amendment shall permit any part of the Fund to be used
for, or diverted to, purposes other than for the exclusive
benefit of Employees and Beneficiaries;
(c) No amendment shall decrease the balance of a Participant's
Account or eliminate an optional form of distribution with
respect to any Account balance at the date of the amendment,
except to the extent permitted under Sections 412(c)(8) or
411(d)(6) of the Code; and
(d) Any amendment shall be by action of the Company's Board of
Directors.
14.02 TERMINATION. The Company may in its sole and absolute discretion
terminate (including by permanent discontinuance of contributions), or
partially terminate, the Plan at any time. Any termination of the Plan
shall be by action of the Company's Board of Directors. If the Company
terminates or partially terminates this Plan, then for all purposes of
this instrument each affected Participant's Account shall be 100
percent Nonforfeitable. The Account shall, notwithstanding Section
5.04(b), be distributed in a lump sum as soon as administratively
practicable after the termination, if the Employer does not maintain
any other defined contribution plan. As of the date of distribution of
Accounts in connection with the termination, the Administrator shall
allocate the net income, gain or loss occurring since the last
Valuation Date to the Accounts pro rata in an equitable and
nondiscriminatory manner. The net income, gain or loss shall be
determined after such reduction for fees and other administrative
expenses relating to the termination as the Administrator may
determine.
IN WITNESS WHEREOF, the Company and the Trustee have executed
this Plan and Trust Agreement as of January 1, 1999, but actually on
January 29, 1999.
REPUBLIC BANCORP, INC.
By /S/ MARK A. VOGT
Title: SVP
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<PAGE> 61
REPUBLIC BANK & TRUST COMPANY
By /S/ E. WILLIAM PETTER
Title: Executive Vice President
REPUBLIC FINANCIAL SERVICES
CORPORATION
By /S/ E. WILLIAM PETTER
Title:
REPUBLIC BANK & TRUST COMPANY, Trustee
By /S/ E. WILLIAM PETTER
Title: Executive Vice President
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<PAGE> 62
EXHIBIT 99.2
ESOP LOAN AGREEMENT
THIS ESOP LOAN AGREEMENT (the "Agreement") dated as of
January 29, 1999, between
REPUBLIC BANCORP, INC.
601 West Market Street
Louisville, Kentucky 40202 ("the "Lender")
and
REPUBLIC BANCORP, INC.
EMPLOYEE STOCK OWNERSHIP TRUST, a qualified employee stock ownership
trust 601 West Market Street
Louisville, Kentucky 40202 (the "Borrower")
RECITALS
A. The Borrower is a qualified employee stock ownership trust as
defined in sections 401(a) and 4975(e)(7) of the Internal Revenue Code of 1986,
as amended (the "Code").
B. The Borrower desires to obtain from the Lender a term loan in the
amount of $3,873,000.00 (the "Exempt Loan") for the purpose of funding the
acquisition of 300,000 shares of Class A Common Stock of Republic Bancorp, Inc.
C. The Exempt Loan is intended to be an "exempt loan" as defined in
Treas. Reg. Section 54.4975-7(b)(1)(iii).
D. The Lender is willing to make the Exempt Loan to the Borrower in
accordance with the terms and conditions of this Agreement.
AGREEMENTS
SECTION 1 - DEFINITIONS
As used in this Agreement, the terms and phrases defined in
the preamble and Recitals hereto shall have the meanings given them there, and
the following terms and phrases shall have the following meanings:
"Annual Interest Rate" means the annual interest rate of 7.25 percent.
<PAGE> 63
"Common Stock" means the Class A Common Stock of Republic Bancorp, Inc.
"ESOP" means the Republic Bancorp, Inc. Employee Stock Ownership Plan,
as originally effective January 1, 1999. The Borrower was organized as a part of
the ESOP effective January 1, 1999.
"ESOP Note" means that certain ESOP Promissory Note of even date
herewith made by the Borrower payable to the order of the Lender, in the
principal amount of $3,873,000.00, evidencing Borrower's obligation to repay the
Exempt Loan, and any instrument in renewal, replacement, reissuance, extension,
payment or novation of that ESOP Note.
"Event of Default" shall have the meaning given it in Section 8.1 of
this Agreement.
"Exempt Loan" means the unpaid principal balance of, and all accrued
but unpaid interest on, the term loan made by the Lender to Borrower pursuant to
Section 2 of this Agreement.
"Loan Documents" means this Agreement, the ESOP Note, the Stock Pledge
Agreement, and any other documents, instruments or other writings executed in
connection with this Agreement or the transaction contemplated by this
Agreement.
"Person" means any individual, firm, trust, estate, partnership,
corporation or other association.
"Pledged Stock" means shares of the issued and outstanding Common Stock
owned by the Trustee in its capacity as trustee for the Borrower and pledged to
the Lender as security for the Exempt Loan.
"Stock Pledge Agreement" means that certain Stock Pledge Agreement of
even date herewith between the Borrower and the Lender granting Lender a first
priority security interest in the Pledged Stock.
"Trustee" means as of the date of this Agreement, Republic Bank & Trust
Company, solely in its capacity as Trustee of the Borrower, and any additional
or successor trustees who may be appointed hereafter.
"Uniform Commercial Code" means the Uniform Commercial Code as in
effect in the Commonwealth of Kentucky.
"Unmatured Default" means the happening of any occurrence which,
together with the giving of any required notice or the passage of any required
period of time, would constitute an Event of Default.
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<PAGE> 64
SECTION 2 - THE EXEMPT LOAN
2.1 THE AMOUNT. Subject to the terms and conditions of this Agreement,
the Lender shall make a term loan to the Borrower in the principal sum of
$3,873,000. The Exempt Loan shall be evidenced by and shall be payable in
accordance with the terms of the ESOP Note and the terms and conditions of this
Agreement.
2.2 INTEREST ON THE EXEMPT LOAN. Except as provided by section 9 of
this Agreement, the unpaid principal balance of the Exempt Loan shall bear
interest at the Annual Interest Rate. All interest payable on the Exempt Loan
shall be calculated on the basis of the actual number of days elapsed over an
assumed year of 360 days.
2.3 PURPOSES OF EXEMPT LOAN. Borrower shall use the proceeds of the
Exempt Loan solely to acquire 300,000 shares of Common Stock from Bernard Trager
and Bankers Insurance Agency, Inc.
SECTION 3 - PAYMENT OF THE LOAN
3.1 PAYMENTS OF PRINCIPAL AND INTEREST. Borrower shall pay to the
Lender, the principal sum of $3,873,000, plus interest on the principal balance
outstanding from time to time at the annual rate of 7.25 percent from the date
of this Note, as follows: (a) Payments shall be in 119 consecutive monthly
installments, (b) the first installment in the amount of $48,069.95 shall be due
and payable on March 1, 1999, and (c) the remaining installments of $45730.01
each shall be due and payable on the first day of each subsequent month until
the entire principal balance of, and all accrued but unpaid interest on, this
Note has been paid in full. All payments shall be applied first to the accrued
but unpaid interest on the Exempt Loan and then to reduce the outstanding
principal balance of the Exempt Loan. On January 1, 2009, Borrower shall pay to
Lender the entire outstanding principal balance of, and all accrued interest on,
the Exempt Loan.
3.2 PREPAYMENT. Borrower shall have the right to prepay, at any time,
and from time to time, without penalty or premium, all or any part of the
outstanding principal balance of the Exempt Loan. Each prepayment shall be
applied first to the accrued but unpaid interest on the Exempt Loan and then to
reduce the outstanding principal balance of the Exempt Loan. If any prepayment
prepays less than the entire outstanding principal balance of the Exempt Loan,
Borrower shall continue to pay any principal and/or interest payments due
hereunder in the amounts and on the dates provided in this Agreement until the
entire principal balance of, and all accrued but unpaid interest on, the Exempt
Loan have been paid in full. Any such prepayment shall be applied to reduce the
principal payments due under the Exempt Loan in the reverse order of their
maturity, and the effect of any such prepayment shall be to reduce the number of
principal payments due under the Exempt Loan.
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<PAGE> 65
SECTION 4 - SECURITY FOR THE EXEMPT LOAN
4.1 STOCK PLEDGE AGREEMENT. As security for the Exempt Loan, the
Borrower shall grant to the Lender a first priority security interest in the
Pledged Stock pursuant to the Stock Pledge Agreement.
4.2 NONRECOURSE TO BORROWER. Notwithstanding any other provision of
this Agreement, the Lender shall have no recourse against the Trustee or the
Borrower, except as to such assets of the Borrower as are permitted by law;
provided, however, the Borrower shall be liable to the Lender if it fails or
refuses to make timely payment on the ESOP Note when it has sufficient funds
with which to do so.
SECTION 5 - CONDITIONS PRECEDENT
The Lender's obligation to make the Exempt Loan shall be
conditioned upon fulfillment of all the following conditions prior to the making
of the Exempt Loan:
5.1 CERTIFICATES OF RESOLUTION. Borrower shall have furnished the
Lender with a certified copy of the resolution of the Investment Committee of
the Borrower authorizing the execution, delivery and performance of the Loan
Documents on behalf of Borrower.
5.2 EXECUTED AGREEMENTS. The Borrower shall have executed and delivered
this Agreement and each of the other Loan Documents, including, without
limitation, the ESOP Note and the Stock Pledge Agreement.
5.3 NO DEFAULT. No Event of Default or Unmatured Default shall exist
which has not been cured to the satisfaction of the Lender.
SECTION 6 - REPRESENTATIONS AND WARRANTIES
To induce the Lender to enter into this Agreement, Borrower
represents and warrants to the Lender as follows:
6.1 EXISTENCE. Borrower is an employee stock ownership trust
established by Republic Bancorp, Inc. that is part of the ESOP, and is an exempt
organization under Section 501(a) of the Code. The ESOP is qualified , organized
and operated in accordance with Sections 401(a) and 4975(e)(7) of the Code.
6.2 RIGHT TO ACT. No registration with or consent or approval of any
government agency of any kind is required for the execution, delivery,
performance and enforceability of this Agreement and the other Loan Documents by
Borrower which has not been acquired by Borrower. Borrower has full right, power
and capacity to execute, deliver and perform this Agreement and the other Loan
Documents. This Agreement and the other Loan Documents have been duly executed
and delivered
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<PAGE> 66
and constitute legal, valid and binding obligations enforceable against Borrower
in accordance with their respective terms.
6.3 NO CONFLICTS. The execution and delivery of this Agreement and the
other Loan Documents, the consummation of the transactions contemplated thereby,
and the fulfillment of their obligations and undertakings thereunder by Borrower
do not (a) violate any provision of any applicable law, ordinance, rule or
regulation of any governmental body, or any judgment, decree, writ, injunction,
order or award of any arbitration panel, court or governmental authority
applicable to the Borrower, or (b) otherwise constitute a default, or result in
the imposition of any lien, under any existing contract or other obligation
binding upon Borrower with or without the passage of time or the giving of
notice or both.
6.4 LITIGATION. There is no litigation, at law or in equity, or any
proceeding before any federal, state or municipal court, board or other
governmental or administrative agency pending, or to the knowledge of Borrower,
threatened, which might involve any material judgment or liability against
Borrower or which might otherwise result in any material adverse change in the
financial condition of Borrower. No judgment, decree or order of any federal,
state or municipal court, board or other governmental or administrative agency
has been issued against Borrower.
6.5 NO DEFAULTS. No Event of Default or Unmatured Default exists on the
date of this Agreement, nor will any Event of Default or Unmatured Default begin
to exist immediately after the execution and delivery of this Agreement.
6.6 COMPLIANCE WITH LAWS. Borrower has not violated any applicable
statute, regulation or ordinance of the United States of America or of any
state, municipality or any other subdivision, jurisdiction or agency thereof, in
any respect materially adversely affecting Borrower's property, assets or
condition, financial or otherwise.
6.7 USE OF EXEMPT LOAN PROCEEDS. The proceeds of the Exempt Loan shall
be used solely to acquire 300,000 shares of Common Stock from Bernard Trager and
Bankers Insurance Agency, Inc.
SECTION 7 - COVENANTS
Borrower covenants and agrees that during the term of this
Agreement, it shall comply with all of the following provisions:
7.1 TAXES AND OTHER PAYMENT OBLIGATIONS.
(a) Borrower shall pay and discharge, or cause to be paid and
discharged, before any of them become delinquent, all taxes, assessments,
governmental charges, levies, and claims which if unpaid might become a lien or
charge upon any of the Borrower's property, and all of its other debts,
obligations and liabilities as due and payable.
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(b) Borrower may refrain from paying any amount it would be
required to pay pursuant to this section if the validity or amount thereof is
being contested in good faith by appropriate proceedings timely instituted which
shall operate to prevent the collection or enforcement of the obligation
contested, provided that, if requested by the Lender in writing, Borrower shall
set aside on its books and records appropriate reserves with respect to actions
against Borrower.
7.2 FINANCIAL RECORDS. Borrower shall maintain standard systems of
accounting in which true and complete entries shall be made of all dealings or
transactions in relation to its business and affairs in accordance with
generally accepted accounting principles applied on a basis consistent with
prior years and, without limitation, making appropriate accruals for estimated
contingent losses and liabilities.
7.3 EXISTENCE. Borrower shall preserve its existence as an exempt
organization under section 501(a) of the Code that is part of the ESOP and that
is a qualified employee stock ownership trust under sections 401(a) and
4975(e)(7) of the Code.
7.4 NOTICE REQUIREMENTS. Borrower shall notify the Lender in writing of
the occurrence of any of the following:
(a) Any Event of Default or Unmatured Default.
(b) All events of default or any event that would become an
event of default upon notice or lapse of time or both under any of the terms or
provisions of any note, or of any other evidence of indebtedness or agreement or
contract governing the borrowing of money, of Borrower.
(c) Levy of an attachment, execution or other process against
any of the property or assets of Borrower.
(d) Within 30 days after Borrower knows or has reason to know
that (1) a "prohibited transaction" with respect to the ESOP has occurred, (2)
the ESOP has been disqualified for federal income tax purposes, or (3) any
litigation regarding the ESOP is threatened or instituted, the Trustee shall
provide to the Lender a written statement setting forth details of such
prohibited transaction, disqualification or litigation and the action being or
proposed to be taken with respect thereto, together with copies of any notices,
applications or forms submitted to the Internal Revenue Service or the United
States Department of Labor, and copies of any notices or correspondence received
from the Internal Revenue Service or the United States Department of Labor, and
copies of any pleadings, notices or other documents relating to such litigation.
7.5 COMPLIANCE WITH LAW. Borrower shall comply in all material respects
with all valid and applicable statutes, rules and regulations of the United
States of America, of the states thereof and their counties, municipalities and
other subdivisions and of any other jurisdiction applicable to Borrower
including, without limitation, all applicable federal, state and local laws and
regulations
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the noncompliance with which would have a material adverse effect on the
Borrower or its ability to perform its obligations hereunder.
7.6 LIENS. Except for liens permitted in this Agreement, Borrower shall
not (a) create or incur any encumbrance, mortgage, pledge, lien, charge,
restriction or other security interest of any kind upon any of Borrower's
property or assets of any character, whether owned or held on the date of this
Agreement or acquired thereafter, or upon the income or profits therefrom, or
(b) transfer any such property or assets or the income or profits therefrom for
the purpose of subjecting the same to payment of indebtedness or performance of
any other obligation.
SECTION 8 - DEFAULT AND REMEDIES
8.1 EVENTS OF DEFAULT. Each of the following shall constitute an "Event
of Default" under this Agreement:
(a) FAILURE TO PAY. If Borrower fails to pay in full when
due any installment of principal or interest on the Note.
(b) NOTICE. If Borrower fails to observe, perform or comply
with any term, obligation, covenant, agreement, condition or other provision
contained or referred to in this Agreement, and such failure or event shall not
have been fully corrected within 30 days after the Lender has given written
notice thereof to Borrower.
(c) FALSITY OF REPRESENTATION OR WARRANTY. If any
representation or warranty or other statement of fact contained in this
Agreement or any other Loan Document or in any writing, certificate, report or
statement at any time furnished to the Lender by or on behalf of Borrower shall
be false or misleading in any material respect or shall omit a material fact,
whether or not made with knowledge.
(d) SOLVENCY.
(1) If Borrower, (A) admits in writing its inability
to pay its debts generally as they become due, (B) becomes insolvent in that its
total assets are in the aggregate worth less than all of its liabilities or it
is unable to pay its debts generally as they become due, (C) makes a general
assignment for the benefit of creditors, (D) files a petition or admits (by
answer, default or otherwise) the material allegations of any petition filed
against it, in bankruptcy under the Federal bankruptcy laws (as in effect on the
date of this Agreement or as they may be amended from time to time), or under
any other law for the relief of debtors, or for the discharge, arrangement or
compromise of its debts, or (E) consents to the appointment of a receiver,
conservator, trustee or liquidator of all or part of its assets.
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(2) If a petition shall have been filed against
Borrower in proceedings under the federal bankruptcy laws (as in effect on the
date of this Agreement or as they may be amended from time to time), or under
any other laws for the relief of debtors, or for the discharge, arrangement or
compromise of its liabilities, or an order shall be entered by any court of
competent jurisdiction appointing a receiver, conservator, trustee or liquidator
of all or part of the assets of any of them, and such petition or order is not
dismissed or stayed within 60 consecutive days after entry thereof.
(e) TERMINATION OF ESOP. If the Borrower shall cease to
exist as an exempt organization under section 501(a) of the Code or if the ESOP
shall cease to qualify as an employee stock ownership plan under section 401(a)
or section 4975(e)(7) of the Code.
8.2 REMEDIES UPON DEFAULT. Upon the occurrence of any Event of Default,
and at any time thereafter, the Lender shall have all of the following rights
and remedies (except as limited by Section 8.3) and it may exercise one or more
of them singly or in conjunction with others:
(a) ENFORCEMENT OF RIGHTS. The Lender shall have all of its
rights under this Agreement, the Stock Pledge Agreement and the ESOP Note, and
the right to proceed to protect and enforce its rights by suit in equity, action
at law and/or any other appropriate proceedings either for specific performance
of any covenant or condition contained in this Agreement or in any other Loan
Document, or in aid of the exercise of any power granted in this Agreement or in
any other Loan Document.
(b) RIGHT TO RECOVER EXPENSES. The Lender shall have the
right to recover from Borrower to the extent allowable by applicable law, such
amounts as shall be sufficient to reimburse the Lender fully for all of its
costs and expenses incurred in enforcing its rights and remedies under this
Agreement and any other Loan Documents, including, without limitation, the
Lender's reasonable attorneys' fees and court costs.
(c) CUMULATIVE REMEDIES. All of the rights and remedies of
the Lender upon the occurrence of an Event of Default shall be cumulative to the
greatest extent permitted by law, may be exercised successively or concurrently,
from time to time, and shall be in addition to all of those rights and remedies
afforded the Lender at law, in equity, or in bankruptcy. Notwithstanding the
foregoing, the Lender shall be entitled to recover from Borrower from the
cumulative exercise of all remedies an amount no greater than the sum of (1) the
outstanding principal amount of the Exempt Loan, (2) all accrued but unpaid
interest with respect to the principal amount of the Exempt Loan, (3) any other
amounts that Borrower is required by this Agreement to pay to the Lender (for
example, and without limitation, the reimbursement of expenses and legal fees),
and (4) any costs, expenses or damages which the Lender is otherwise permitted
to recover by the terms of this Agreement. Any exercise of any right or remedy
shall not be deemed to be an election of that right or remedy to the exclusion
of any other right or remedy.
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8.3 LIMITATIONS ON REMEDIES UPON DEFAULT. Any provision of this
Agreement, the ESOP Note, the Stock Pledge Agreement or any provision or
inference of or from any law, rule or regulation to the contrary
notwithstanding, the obligations of the Borrower described herein and evidenced
by the ESOP Note shall be non-recourse, and if an Event of Default shall occur,
the holder of the ESOP Note shall have no right to assets of the Borrower other
than (a) the Pledged Stock, (b) contributions (other than
contributions of employer securities as defined in Section 409(1) of the Code)
that are made to the ESOP to meet Borrower's obligations under the ESOP Note and
the Agreement (the "Contributions"); and (c) earnings attributable to the
Pledged Stock and the investment of the Contributions.
SECTION 9 - MISCELLANEOUS
9.1 INDEMNIFICATION BY BORROWER. To the extent allowable by applicable
law, Borrower shall indemnify and hold the Lender harmless from and against, and
shall pay to the Lender, the full amount of, any loss, claim, damage, liability
or expense (including attorneys' fees and legal expenses) resulting to the
Lender, either directly or indirectly, from (a) any material breach of or
inaccuracy in any of the representations and warranties of Borrower contained in
this Agreement or any other Loan Document, or (b) any breach, nonfulfillment or
default in the performance of any of the covenants and agreements of Borrower
contained in this Agreement or any other Loan Document.
9.2 FEES AND EXPENSES. To the extent allowable by applicable law,
Borrower shall pay to the Lender upon demand all out-of-pocket expenses incurred
by the Lender in connection with the collection and enforcement of the Exempt
Loan, including, but not limited to, the Lender's reasonable attorneys' fees,
and any and all reasonable costs and fees incurred in connection with the
recording or filing of any documents or instruments in any public office,
pursuant to or as a consequence of this Agreement, or to perfect or protect any
security for the Exempt Loan.
9.3 TERM OF AGREEMENT. The term of this Agreement shall commence as of
the date hereof, and continue until the first date when the Exempt Loan and all
accrued but unpaid interest thereon shall have been paid in full, and Borrower
shall have paid or performed all other obligations hereunder and under the other
Loan Documents.
9.4 ESOP RULES. Notwithstanding any other provision of this Agreement,
the following rules shall apply to the Exempt Loan: (1) The loan must provide
for annual payment of principal and interest at a cumulative rate that is not
less rapid at any time than level annual payments of such amounts for 10 years.
(2) Interest included in any payment is disregarded only to the extent that it
would be determined to be interest under standard loan amortization tables. (3)
The Exempt Loan shall not be renewed, extended, or refinanced if the sum of the
expired duration of the Exempt Loan, the renewal period, the extension period,
and the duration of a new exempt loan would exceed ten years.
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9.5 NO WAIVERS. Any failure or delay by the Lender in exercising any of
its rights with respect to this Agreement, any other Loan Document or the
transactions contemplated thereby shall not be deemed to be or operate as a
waiver of that right, nor shall any right be exclusive of any other right
referred to in this Agreement, or in any other Loan Document or available at law
or in equity, by statute or otherwise. Any single or partial exercise of any
right shall not preclude the further exercise of that right. Every right of the
Lender shall continue in full force and effect until such right is specifically
waived in a writing signed by the Lender seeking to waive such right.
9.6 COURSE OF DEALING. No course of dealing between the Lender and
Borrower shall operate as a waiver of any of the Lender's rights with respect to
this Agreement, any other Loan Document or the transactions contemplated
thereby.
9.7 WAIVERS BY BORROWER. Borrower hereby waives, to the extent
permitted by applicable law, (a) all presentments, demands for performances,
notices of nonperformance (except to the extent specifically required by this
Agreement), protests, notices of protest and notices of dishonor in connection
with the ESOP Note, (b) any requirement of diligence or promptness on the part
of the Lender in enforcement of its rights under this Agreement or any other
Loan Document, and (c) any requirement of marshaling assets or proceeding
against Persons or assets in any particular order.
9.8 SEVERABILITY. If any provision of this Agreement or its application
shall be unenforceable, the rights and obligations of the parties shall be
construed and enforced with that provision limited so as to make it enforceable
to the greatest extent allowed by law, or, if it is totally unenforceable as if
this Agreement did not contain that particular provision.
9.9 TIME OF THE ESSENCE. Time shall be of the essence in the
performance of all of Borrower's obligations under this Agreement and the other
Loan Documents.
9.10 BENEFIT AND BINDING EFFECT. This Agreement shall inure to the
benefit of, and be binding upon Borrower, its respective heirs, executors,
successors and assigns and any Person claiming by, through or under any of them.
Notwithstanding the next preceding sentence, the Lender shall, and Borrower
shall not, have the right to assign any of its benefits or obligations under
this Agreement. Any attempted assignment by Borrower shall constitute an Event
of Default under this Agreement and shall be null and void.
9.11 FURTHER ASSURANCES. Borrower shall sign such financing statements
or other documents or instruments as the Lender may request from time to time to
more fully create, perfect, continue, maintain or terminate the rights and
security interests intended to be granted or created pursuant to this Agreement
or any other Loan Document.
9.12 ENTIRE AGREEMENT; NO ORAL MODIFICATIONS. This Agreement, any
schedules and annexes hereto, and the other Loan Documents constitute the entire
agreement of the parties with respect to the subject matter hereof, and
supersede all prior understandings with respect to the subject matter of this
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Agreement. No change, modification, addition or termination of this Agreement or
any other Loan Document shall be enforceable unless in writing and signed by the
party against whom enforcement is sought.
9.13 HEADINGS. The headings used in this Agreement are included for
ease of reference only and shall not be considered in the interpretation or
construction of this Agreement.
9.14 CONSTRUCTION.
(a) This Agreement and the other Loan Documents shall be
governed and construed in accordance with the laws of the Commonwealth of
Kentucky except to the extent preempted by Federal law.
(b) The Lender and the Borrower intend that (1) the Exempt
Loan shall qualify as an "exempt loan" as defined in Treas. Reg. Section
54.4975-7(b)(1)(iii); and (2) the Borrower shall meet the requirements of
Section 4975(e)(7) of the Code and Section 407(d)(6) of ERISA; and
notwithstanding any provision of this Agreement, the applicable provisions of
the Code and ERISA, and the regulations thereunder, shall be deemed incorporated
in this Agreement to the extent necessary to carry out that intent.
(c) No provision of this Agreement shall be construed to have
a meaning that results in, or if the provision is unambiguous, it shall not be
enforced to the extent it would result in (1) the failure of the Exempt Loan to
qualify as an "exempt loan" as defined in Treas. Reg. Section
54.4975-7(b)(1)(iii); or (2) failure of the Borrower to meet the requirements of
Section 4975(e)(7) of the Code and Section 407(d)(6) of ERISA.
9.15 MULTIPLE COUNTERPARTS. This Agreement may be executed in any
number of counterparts, each of which so executed shall be deemed an original,
and such counterparts together shall constitute but one and the same contract,
which shall be sufficiently evidenced by any such original counterpart.
9.16 NOTICES.
A. REASONABLE NOTICE. Any requirement of the Uniform
Commercial Code or other applicable law of reasonable notice shall be met if
such notice is given at least 10 days before the time of sale, disposition or
other event or thing giving rise to the requirement of notice.
B. ADDRESSES. All notices or communications under this
Agreement shall be in writing (except as provided by Section 8 of this
Agreement) and mailed or delivered to the parties at the addresses given in the
preamble to this Agreement or to such other addresses of which a party has given
the other parties written notice. Any notice or communication so addressed and
(1) mailed to such address by registered mail, return receipt requested, postage
prepaid, shall be deemed to have been given when mailed or (2) delivered to a
small package air courier offering service to the address
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of the intended recipient and the shipping prepaid shall be deemed to have been
given when delivered to such courier.
IN WITNESS WHEREOF, the Lender and Borrower have executed this
Agreement on January 29, 1999.
REPUBLIC BANCORP, INC.
By /S/ MARK A. VOGT
Title: S.V.P.
("Lender")
REPUBLIC BANCORP, INC. EMPLOYEE STOCK
OWNERSHIP TRUST, by Republic Bank & Trust
Company, solely in its capacity as Trustee
By /S/ E. WILLIAM PETTER
Title: Executive Vice President
("Borrower")
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EXHIBIT 99.3
ESOP PROMISSORY NOTE
$3,873,000.00 January 29, 1999
Louisville, Kentucky
For value received, REPUBLIC BANCORP, INC. EMPLOYEE STOCK OWNERSHIP
TRUST (the "Borrower"), promises to pay to the order of REPUBLIC BANCORP, INC.,
601 West Market Street, Louisville, Kentucky (the "Lender"), the principal sum
of Three Million Eight Hundred Seventy-three Thousand Dollars ($3,873,000.00),
or so much thereof as may be outstanding hereunder from time to time (the
"Exempt Loan"), plus interest on the principal balance outstanding from time to
time at the annual rate of 7.25 percent from the date of this Note, as follows:
(a) Payments shall be in 119 consecutive monthly installments, (b) the first
installment in the amount of $48,069.95 shall be due and payable on March 1,
1999, and (c) the remaining installments of $45,730.01 each shall be due and
payable on the first day of each subsequent month until the entire principal
balance of, and all accrued but unpaid interest on, this Note has been paid in
full. All payments shall be applied first to the accrued but unpaid interest on
the Exempt Loan and then to reduce the outstanding principal balance of the
Exempt Loan. On January 1, 2009, Borrower shall pay to Lender the entire
outstanding principal balance of, and all accrued interest on, the Exempt Loan.
This Note is issued pursuant to an ESOP Loan Agreement of even date
herewith (the "ESOP Loan Agreement"), between the Lender and the Borrower.
The occurrence of an Event of Default (as defined in the ESOP Loan
Agreement) shall be a default under this Note. Upon any default under this Note,
the holder of this Note shall have all of the remedies set forth in the ESOP
Loan Agreement.
All or any part of the outstanding principal balance of this Note may
be prepaid at any time without penalty or premium. All prepayments shall be
applied in accordance with the terms of the ESOP Loan Agreement.
Failure of the holder of this Note to exercise any of its rights and
remedies shall not constitute a waiver of any provisions of this Note or of the
ESOP Loan Agreement or the other Loan Documents, or of any of such holder's
rights and remedies, nor shall it prevent the holder from exercising any rights
or remedies with respect to the subsequent happening of the same or similar
occurrences. All remedies of the holder hereof shall be cumulative to the
greatest extent permitted by law. Time shall be of the essence for payment of
all payments of interest and principal on this Note.
This Note has been delivered in, and shall be governed by and construed
in accordance with, the laws (including, without limitation, the conflicts of
laws rules) of the Commonwealth of Kentucky, except to the extent pre-empted by
federal law.
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If there is any default under this Note, and this Note is placed in the
hands of an attorney for collection, or is collected through any court,
including any bankruptcy court, the Borrower promises to pay to the order of the
holder hereof such holder's reasonable attorneys' fees and court costs incurred
in collecting or attempting to collect or securing or attempting to secure this
Note or enforcing the holder's rights with respect to any collateral securing
this Note, to the extent allowed by federal law and the laws of the Commonwealth
of Kentucky or any state in which any collateral for this Note is situated.
All parties to this instrument, whether makers, sureties, guarantors,
endorsers, accommodation parties or otherwise, shall be jointly and severally
bound, and jointly and severally waive presentment, demand, notice of dishonor,
protest, notice of protest, notice of nonpayment or nonacceptance and any other
notice and all due diligence or promptness that may otherwise be required by
law, and all exemptions to which they may now or hereafter be entitled under the
laws of the Commonwealth of Kentucky, of the United States of America or any
state thereof. The holder of this instrument may, with or without affecting the
obligations of any maker, surety, guarantor, endorser, accommodation party or
any other party to this Note (1) extend the time for payment of either principal
or interest from time to time, (2) release or discharge any one or more party
who is liable in this Note, (3) suspend the right to enforce this Note with
respect to any persons, (4) change, exchange or release any property in which
the Lender has any interest securing this Note, (5) justifiably or otherwise,
impair any collateral securing this Note or suspend the right to enforce against
any such collateral, and (6) at any time it deems it necessary or proper, call
for and should it be made available, accept, as additional security, the
signature or signatures of additional parties or a security interest in property
of any kind or description or both.
IN WITNESS WHEREOF, the Borrower has executed this Note on January 29,
1999.
REPUBLIC BANCORP, INC. EMPLOYEE STOCK
OWNERSHIP TRUST, by Republic Bank & Trust
Company, solely in its capacity as Trustee
By /S/ E. WILLIAM PETTER
Title: Executive Vice President
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EXHIBIT 99.4
STOCK PLEDGE AGREEMENT
This is a Stock Pledge Agreement ("Agreement") dated as of January 29,
1999 between Republic Bank & Trust Company Employee Stock Ownership Plan (the
"Pledgor"), and Republic Bancorp, Inc., of Louisville, Kentucky (the "Secured
Party").
RECITALS
A. The Pledgor is an employee stock ownership trust under section
4975(e)(7) of the Internal Revenue Code of 1986, as (the "Code") and under
Section 407(d)(6) of the Employee Retirement Income Security Act of 1974, as
("ERISA").
B. This Agreement is entered into pursuant to a Plan Loan Agreement of
even date herewith (the "Plan Loan Agreement") between the Secured Party and the
Pledgor, pursuant to which the Secured Party has agreed to make a term loan to
the Pledgor in an amount equal to $3,873,000 (the "Exempt Loan"). The Exempt
Loan is intended to be an "exempt loan" as defined in Treas. Reg. Section
54.4975-7(b)(1)(iii). The Pledgor intends to use the proceeds of the Exempt Loan
to purchase 300,000 shares of the Class A Common Stock of Republic Bancorp, Inc.
C. The Pledgor desires to enter into this Stock Pledge Agreement in
order to secure the payment and performance of its obligations under the ESOP
Loan Agreement and the ESOP Note. The terms used in this Stock Pledge Agreement
and not otherwise defined shall have the meanings given them in the ESOP Loan
Agreement.
AGREEMENT
1. DEFINITIONS. As used in this Stock Pledge Agreement:
(a) "Default" shall have the meaning given it in paragraph 10
of this Agreement.
(b) "Plan" shall mean the Republic Bancorp, Inc. Employee
Stock Ownership Plan.
(c) "ESOP Note" shall mean that certain ESOP Promissory Note
of even date herewith, made by the Pledgor, payable to the order of the Secured
Party and in the principal amount of $3,873,000, or any note executed or
delivered in renewal, replacement, extension, payment, substitution or novation
of such note.
(d) "Pledged Stock" shall mean shares of the issued and
outstanding Class A common stock of Republic Bancorp. Inc., purchased by the
Pledgor with the proceeds of the Exempt Loan.
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(e) "Secured Obligations" shall mean the obligations secured
by this Stock Pledge Agreement, as described in paragraph 3 of this Stock Pledge
Agreement.
(f) "Uniform Commercial Code" shall mean the Uniform
Commercial Code as in effect in the Commonwealth of Kentucky.
2. GRANT OF SECURITY INTEREST.
(a) The Pledgor grants the Secured Party a security interest
in and pledges to the Secured Party the following:
(1) the Pledged Stock;
(2) Contributions (other than contributions of
employer securities, as defined in Section 409(1) of the Code) that are
made to the Pledgor to meet its obligations under the Exempt Loan; and
(3) Earnings attributable to the property referred
to in subparagraphs (1) and (2) above.
(b) To the extent permitted under Treasury Reg. 54.497-7(b)(5)
and subject to paragraphs 11(c) and 14 below, the Pledgor further grants to the
Secured Party a security interest in the stock rights, rights to subscribe,
liquidating dividends, stock dividends, dividends paid in stock, new securities
or any other property to which the Pledgor is or may hereafter become entitled
to receive on account of the Pledged Stock. If the Pledgor receives additional
property of such nature, it shall immediately deliver such property to the
Secured Party to be held by the Secured Party in the same manner as the Pledged
Stock.
(c) The Pledged Stock and all of the property delivered to the
Secured Party pursuant to this Section 2 is sometimes referred to as the
"Collateral." To the extent permitted under Treasury Reg. Section
54.497-7(b)(5), and subject to paragraphs 11(c) and 14 below, the Pledgor grants
to the Secured Party a further security interest in accordance with this
Agreement in the proceeds or products of any sale or other disposition of the
Collateral.
(d) The Exempt Loan shall be without recourse against the
Pledgor, and no person entitled to payment under the Exempt Loan shall have any
right to assets of the Pledgor other than the Collateral.
(e) The term "Collateral" shall not include any of the shares
or earnings attributable to such shares that have been released pursuant to
paragraph 8 below.
3. OBLIGATIONS SECURED. The security interest created hereby secures
payment and performance of (a) the indebtedness evidenced by the ESOP Note, and
all obligations contained in
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the ESOP Note, (b) all of the obligations, agreement, covenants and
representations of the Pledgor to the Secured Party under the ESOP Loan
Agreement whether or not, either on the date of this Stock Pledge Agreement or
thereafter, evidenced by any note, instrument or other writing, and (c) any and
all indebtedness, obligation or liability of the Pledgor to the Secured Party,
however evidenced, whether existing on the date of this Stock Pledge Agreement
or arising thereafter, direct or indirect, absolute or contingent, arising out
of or in connection with the ESOP Loan Agreement. The payments made by the
Pledgor with respect to the Exempt Loan during a Plan Year (as such term is
defined in the Plan) shall not exceed an amount equal to the sum of such
contributions and earnings received during or prior to the Plan Year less such
payments in prior Plan Years.
4. REPRESENTATIONS AND WARRANTIES. To induce the Secured Party to enter
into this Stock Pledge Agreement, all of the representations and warranties made
by the Pledgor in the ESOP Loan Agreement are incorporated herein by reference,
and the Pledgor further represents and warrants as follows:
(a) The Pledgor has the full right, power and authority to
enter into, execute, deliver and perform its obligations under this Agreement.
This Agreement has been duly executed and delivered by the Pledgor and, assuming
due execution and delivery of this Agreement by the Secured Party, this
Agreement constitutes the legal, valid and binding obligation of the Pledgor,
enforceable against it in accordance with its terms, except as the same may be
limited by bankruptcy, insolvency, reorganization or other laws affecting the
enforcement of creditors' rights generally now or hereafter in effect, and
subject to the availability of equitable remedies.
(b) Upon its acquisition of the Collateral, the Pledgor shall
have good and marketable title to the Collateral, and the Collateral shall not
be subject to any lien, charge, pledge, encumbrance, claim or security interest
other than the security interest created by this Stock Pledge Agreement.
(c) Except for this Agreement, the Pledgor shall not enter
into any stock restriction or purchase agreement with respect to the Collateral
which would in any way restrict the sale, pledge or other transfer of the
Collateral or of any interest in or to the Collateral.
(d) The Pledged Stock constitutes 100 percent of the stock
purchased with the proceeds of the Exempt Loan.
5. DURATION OF SECURITY INTEREST. The Secured Party, its successors and
assigns, shall hold the Collateral and security interest created hereby upon the
terms of this Stock Pledge Agreement, and this security interest shall continue
until the Secured Obligations have been paid in full.
6. MAINTAINING FREEDOM FROM LIENS. The Pledgor shall keep the
Collateral free and clear of liens and shall pay all amounts, including taxes,
assessments or charges, which might result in a lien against the Collateral if
left unpaid unless the Pledgor at its own expense is contesting such amount in
good faith by an appropriate proceeding timely instituted which shall operate to
prevent
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the collection or satisfaction of the lien or amount so contested. If the
Pledgor fails to pay such amounts and is not contesting the validity or amount
thereof in accordance with the next preceding sentence, the Secured Party may,
but is not obligated to, pay such amounts, and such payment shall be conclusive
evidence of the legality or validity thereof. The Pledgor shall promptly
reimburse the Secured Party for any such payments, and until reimbursement, such
payments shall be a part of the Secured Obligations.
7. CERTAIN RIGHTS AND REQUIREMENTS RESPECTING COLLATERAL.
(a) The Pledgor shall continue to be the owner of the
Collateral so long as no Default has occurred and is continuing and may collect
and retain all dividends now or hereafter payable on or on account of the
Pledged Stock, and, so long as no Default has occurred, may exercise its voting
rights with respect to the Pledged Stock in accordance with the terms of the
Plan.
(b) The Pledgor shall not sell, transfer or attempt to sell or
transfer the Collateral, or any part thereof or interest therein, without the
prior express written consent of the Secured Party. Any such consent of the
Secured Party shall not constitute the release by the Secured Party of its
interest in the Collateral, and any such sale or transfer consented to shall
transfer the Collateral subject to the security interest of the Secured Party.
(c) Notwithstanding any other provision of the Stock Pledge
Agreement, the following rules shall apply to the Exempt Loan: (1) The loan must
provide for annual payment of principal and interest at a cumulative rate that
is not less rapid at any time than level annual payments of such amounts for 10
years. (2) Interest included in any payment is disregarded only to the extent
that it would be determined to be interest under standard loan amortization
tables. (3) The Exempt Loan shall not be renewed, extended, or refinanced if the
sum of the expired duration of the Exempt Loan, the renewal period, the
extension period, and the duration of a new exempt loan would exceed 10 years.
8. RELEASE OF SECURITY.
(a) As used in this paragraph, the term "Plan Year" shall
have the meaning set forth in the Plan.
(b) Within 90 days after the end of each Plan Year, the
Trustee of the Pledgor shall calculate the number of shares of Pledged Stock to
be released from the Secured Party's security interest (the "Released Shares").
(c) In accordance with Treas. Reg. Section 54.4975-7(b)(8)
(ii), for each Plan Year during the term of the Exempt Loan, the number of
Released Shares shall equal the number of shares of Pledged Stock held
immediately before release for the current Plan Year multiplied by a fraction.
The numerator of the fraction shall be the amount of principal paid on the Plan
Note for the Plan Year. The denominator of the fraction shall be the sum of the
numerator plus the principal to be paid
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on the Plan Note for all future years. The number of future years shall be
determined without taking into account any possible extensions or renewal
periods.
(d) Within 10 days after calculating the number of Released
Shares, the Trustee shall notify the Secured Party of the number of Released
Shares and shall deliver to the Secured Party a duly executed blank stock power
with respect to the number of shares of Pledged Stock in which the Secured Party
will still have a security interest after the release of the Released Shares.
(e) Within 20 days after receipt of the notice and stock power
from the Trustee, the Secured Party shall, against delivery of the new
certificate referred to in subparagraph (f) below, deliver to the Trustee (1)
the certificate representing the Pledged Stock (which includes the Released
Shares), (2) the blank stock power in its possession with respect to the Pledged
Stock (which includes the Released Shares), and (3) a duly executed release
which releases the Released Shares as collateral.
(f) Against delivery by the Secured Party of the documents
referred to in paragraph (e), the Trustee shall deliver to the Secured Party a
new stock certificate evidencing the shares of Pledged Stock which have not been
released as collateral.
9. DELIVERY OF CERTIFICATES AND STOCK POWERS. The Pledgor has,
contemporaneously with the execution of this Stock Pledge Agreement, delivered
to the Secured Party the Pledged Stock and an executed blank stock power for the
Pledged Stock.
10. DEFAULT. At the option of the Secured Party, the occurrence of an
Event of Default (as such term is defined in the ESOP Loan Agreement) under
paragraph 8.01 of the ESOP Loan Agreement, shall constitute a default under this
Stock Pledge Agreement (a "Default").
11. REMEDIES.
(a) Subject to the limitations of paragraphs 11(c) and 14 of
this Stock Pledge Agreement, upon any Default, the Secured Party may exercise
its rights under this Stock Pledge Agreement, and, in addition to exercising all
other rights and remedies, proceed to exercise with respect to the Collateral
all rights, options and remedies of a secured party upon default as provided for
under the Uniform Commercial Code.
(b) Subject to the limitations of paragraphs 11(c) and 14 of
this Stock Pledge Agreement, the rights of the Secured Party upon any Default
shall include, without limitation, the following:
(i) The right to the immediate possession of the
Collateral (except the Released Shares) not then in the Secured Party's
possession without requirement of notice or demand or of any legal
process.
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(ii) The right to proceed by appropriate legal
process at law or in equity to enforce any provision of this Stock
Pledge Agreement or in aid of the execution of any power of sale, or
for foreclosure of the security interest of the Secured Party, or for
the sale of the Collateral under the judgment or decree of any court.
(c) Notwithstanding any provision of this Stock Pledge
Agreement to the contrary, in the event of a Default, the value of the assets of
the Pledgor paid to the Secured Party in satisfaction of the Exempt Loan shall
not exceed the amount of the then current installment of principal and accrued
interest on the Exempt Loan then in default.
12. EXERCISE OF REMEDIES. The rights and remedies of the Secured Party
shall be deemed to be cumulative, and any exercise of any right or remedy shall
not be deemed to be an election of that right or remedy to the exclusion of any
other right or remedy. Notwithstanding the foregoing, the Secured Party shall be
entitled to recover from the Pledgor by the cumulative exercise of all remedies
no more than the sum of (a) the outstanding principal amount of the Exempt Loan,
(b) all accrued but unpaid interest with respect to the principal amount of the
Exempt Loan and (c) the costs, fees and expenses the Secured Party is otherwise
entitled to recover under the Plan Loan Agreement.
13. RETURN OF PLEDGED STOCK. The Secured Party may at any time deliver
the Pledged Stock, or any part thereof, to the Pledgor. The receipt by the
Pledgor of the Pledged Stock, or any part thereof, shall be a complete and full
discharge of the Secured Party, and the Secured Party shall be discharged from
any liability or responsibility with respect thereto.
14. INTERPRETATION AND LIMITATIONS.
(a) The Pledgor and the Secured Party intend that (1) the
Exempt Loan shall qualify as an "exempt loan" as defined in Treas. Reg. Section
54.4975-7(b)(1)(iii); and (2) the Pledgor shall meet the requirements of Section
4975(e)(7) of the Code and Section 407(d)(6) of ERISA; and notwithstanding any
provision of this Stock Pledge Agreement, the applicable provisions of the Code
and ERISA, and the regulations thereunder, shall be deemed incorporated in this
Stock Pledge Agreement to the extent necessary to carry out that intent.
(b) No provision of this Stock Pledge Agreement shall be
construed to have a meaning that results in, or if the provision is unambiguous,
it shall not be enforced to the extent it would result in (1) the failure of the
ESOP Loan to qualify as an "exempt loan" as defined in Treas. Reg. Section
54.4975-7(b)(1)(iii); or (2) failure of the Pledgor to meet the requirements of
Section 4975(e)(7) of the Code and Section 407(d)(6) of ERISA.
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15. NOTICE.
(a) Any requirement of the Uniform Commercial Code of
reasonable notice shall be met if such notice is given at least 10 days before
the time of sale, disposition or other event or thing giving rise to the
requirement of notice.
(b) All notices or communications under this Stock Pledge
Agreement shall be in writing and shall be given in accordance with, and shall
be subject to, Section 10.15 of the ESOP Loan Agreement.
16. FURTHER ASSURANCES. The Pledgor shall sign any such other documents
or instruments, and take such other actions, as the Secured Party may reasonably
request to more fully create and maintain, or to verify, ratify or perfect the
security interest intended to be created in this Stock Pledge Agreement.
17. MISCELLANEOUS.
(a) Failure by the Secured Party to exercise any right shall
not be deemed a waiver of that right, and any single or partial exercise of any
right shall not preclude the further exercise of that right. Every right of the
Secured Party shall continue in full force and effect until such right is
specifically waived in a writing signed by the Secured Party.
(b) If any part, term or provision of this Stock Pledge
Agreement is held by any court to be prohibited by any law applicable to this
Stock Pledge Agreement, the rights and obligations of the parties shall be
construed and enforced to the greatest extent allowed by law, or if such part,
term or provision is totally unenforceable, as if this Stock Pledge Agreement
did not contain that particular part, term or provision.
(c) The headings in this Stock Pledge Agreement have been
included for ease of reference only, and shall not be considered in the
construction or interpretation of this Stock Pledge Agreement.
(d) This Stock Pledge Agreement shall inure to the benefit of
the Secured Party, its successors and assigns, and all obligations of the
Pledgor shall bind its successors and assigns.
(e) To the extent allowed under the Uniform Commercial Code,
this Stock Pledge Agreement shall in all respects be governed by and construed
in accordance with the laws of the Commonwealth of Kentucky.
(f) If any term, condition or provision of this Stock Pledge
Agreement conflicts in any way with any term, condition or provision of the ESOP
Loan Agreement, the term, condition or provision of this Stock Pledge Agreement
shall govern.
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(g) This Stock Pledge Agreement constitutes the entire
agreement of the parties with respect to the subject matter hereof and
supersedes all prior understandings with respect to the subject matter hereof.
No change, modification, addition or termination of this Stock Pledge Agreement
shall be unenforceable unless in writing and signed by the party against whom
enforcement is sought.
(h) This Stock Pledge Agreement may be executed in any number
of counterparts, each of which so executed shall be deemed an original, and such
counterparts together shall be sufficiently evidenced by any such original
counterpart.
IN WITNESS WHEREOF, the Pledgor and the Secured Party have signed this
Stock Pledge Agreement on January 29, 1999.
REPUBLIC BANCORP, INC. EMPLOYEE STOCK
OWNERSHIP TRUST, by Republic Bank & Trust
Company, solely in its capacity as Trustee
By /S/ E. WILLIAM PETTER
Title: Executive Vice President
("Pledgor")
REPUBLIC BANCORP, INC.
By /S/ MARK A. VOGT
Title: Senior Vice President
("Secured Party")
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<PAGE> 84
EXHIBIT 99.5
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AGREEMENT OF
LIMITED PARTNERSHIP
FOR THE
JAYTEE PROPERTIES LIMITED PARTNERSHIP
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<PAGE> 85
JAYTEE PROPERTIES LIMITED PARTNERSHIP
TABLE OF CONTENTS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
ARTICLE PAGE
1. ESTABLISHMENT OF PARTNERSHIP................................................................................1
1.1 Formation and Controlling Law...................................................................1
1.2 Name............................................................................................2
1.3 Purposes........................................................................................2
1.4 Powers..........................................................................................2
1.5 Principal Place of Business.....................................................................2
1.6 Term............................................................................................2
1.7 Registered Agent................................................................................2
1.8 Nature of Partners' Interests...................................................................2
2. CAPITAL CONTRIBUTIONS; WITHDRAWALS; AND CAPITAL ACCOUNTS....................................................2
2.1 Continuation of Capital Accounts................................................................2
2.2 Units of Ownership Interests....................................................................3
2.3 Required Subsequent Capital Contributions.......................................................3
2.4 Additional Capital Contributions................................................................3
2.5 Liability of Limited Partners...................................................................3
2.6 Capital Accounts................................................................................3
2.7 Additions to Capital Accounts...................................................................4
2.8 Subtractions to Capital Accounts................................................................4
2.9 Withdrawal of Capital...........................................................................4
2.10 Interest on Capital Accounts and Contributions..................................................4
2.11 Restriction on Registration of Interest.........................................................4
3. PROFIT AND LOSS.............................................................................................5
3.1 Definitions of Net Profit and Net Loss..........................................................5
3.2 Allocation of Profits and Losses................................................................5
3.3 Allocations in Event of Transfer, Admission of New Partner, Etc.................................6
3.4 Definitions: Adjustment Dates; Operations Period..............................................6
3.5 Retention of Distributable Income as Capital Reserves...........................................7
4. DISTRIBUTIONS...............................................................................................7
4.1 Distribution Other Than Upon Winding-Up.........................................................7
4.2 Property Distributions..........................................................................7
4.3 Distributions Upon Winding-Up...................................................................7
5. ACCOUNTING..................................................................................................8
5.1 Books and Records...............................................................................8
5.2 Fiscal Year.....................................................................................8
5.3 Reports.........................................................................................8
5.4 Federal Income Tax Status and Elections.........................................................8
6. MANAGEMENT..................................................................................................8
6.1 Management by General Partners..................................................................8
6.2 Appointment of Co-Managing General Partner......................................................9
6.3 Voting the Partnership's Republic Bancorp, Inc. Shares........................................10
6.4 Liabilities of the General Partners............................................................11
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<PAGE> 86
6.5 Other Interests................................................................................11
6.6 Standard of Care of General Partners; Indemnification..........................................11
6.7 Limited Partners...............................................................................11
7. WITHDRAWAL.................................................................................................11
7.1 Restrictions on Withdrawal, Substitution and Transfer..........................................11
7.2 No Withdrawal by General Partners..............................................................12
7.3 Withdrawals by Limited Partners................................................................12
8. TRANSFERS; SUBSTITUTION; ADDITIONAL PARTNERS...............................................................12
8.1 Assignment of Limited Partner's Interest.......................................................12
8.2 Voluntary Transfers of Limited Partner's Interests.............................................12
8.3 Involuntary Transfers of Limited Partner Interests.............................................14
8.4 Determination of Value.........................................................................15
8.5 Payment of Purchase Price......................................................................16
8.6 Extension of Time for Payment of Purchase Price................................................16
8.7 Death or Incapacity of Limited Partner.........................................................16
8.8 Substitute Limited Partners....................................................................17
8.9 Transfers of General Partnership Interests.....................................................17
8.10 Incapacity of a General Partner................................................................18
8.11 Successor General Partner......................................................................18
8.12 Fiduciaries As Partners........................................................................18
8.12(a) FIDUCIARY CAPACITY.................................................................18
8.12(b) REVOCABLE TRUSTS...................................................................19
8.13 Additional Partners............................................................................19
9. FEDERAL INCOME TAX MATTERS.................................................................................19
9.1 Distributive Shares............................................................................19
9.2 Elections......................................................................................19
9.3 Tax Matters Partner............................................................................19
10. DISSOLUTION AND WINDING-UP................................................................................20
10.1 Events Occasioning Dissolution.................................................................20
10.2 Winding-Up.....................................................................................20
10.3 Events Not Occasioning Dissolution.............................................................20
11. MISCELLANEOUS.............................................................................................20
11.1 Non-Family Member Partner......................................................................20
11.2 Amendments.....................................................................................20
11.3 Notices........................................................................................20
11.4 No Delivery of Certificates....................................................................21
11.5 Governing Law..................................................................................21
11.6 Arbitration....................................................................................21
11.7 Power of Attorney..............................................................................22
11.8 Partition......................................................................................22
11.9 Waiver of Right to Court Decree of Dissolution.................................................22
11.10 Agreement Binding..............................................................................23
11.11 Invalid Provisions.............................................................................23
11.12 Waiver.........................................................................................23
11.13 Third Party Beneficiaries......................................................................23
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<PAGE> 88
AGREEMENT OF
LIMITED PARTNERSHIP
THIS AGREEMENT OF LIMITED PARTNERSHIP is made and entered into by
those persons identified on Schedule A as General Partners and Limited Partners.
The General Partners and the Limited Partners hereinafter identified are
referred to as the "Partners."
The Partners desire to form a Limited Partnership (the "Partnership")
for the purposes set forth herein, and in consideration of their mutual
agreements, they agree as follows.
1. ESTABLISHMENT OF PARTNERSHIP
1.1 FORMATION AND CONTROLLING LAW.
1.1(a) This Limited Partnership is a continuation and conversion
of the general partnership which is being conducted by Bernard M. Trager and
Jean S. Trager under the terms of a written partnership agreement dated February
1, 1993, and known as Jaytee Properties. By executing this Agreement Bernard M.
Trager and Jean S. Trager amend and restate their Partnership Agreement, and
agree that this instrument governs their relationship in all matters conducted
by the Partnership, and constitutes the conversion of the Jaytee Properties
General Partnership into a Kentucky Limited Partnership.
1.1(b) Bernard M. Trager and Jean S. Trager, as general partners
of Jaytee Properties personally guaranteed certain debt of their general
partnership and they agree, by the execution of this instrument, to retain and
remain personally liable to and for such debt as nothing herein is intended to
change or alter their legal obligations heretofore assumed and guaranteed by
them.
1.1(c) In addition to the assets from the Jaytee Properties
Partnership, the parties executing this Agreement are contributing additional
assets in exchange for General and Limited Partnership Interests in this
Partnership as depicted on Schedule A.
1.1(d) Accordingly, the Partners do hereby convert their general
partnership into a Limited Partnership pursuant to the provisions of the
Kentucky Uniform Limited Partnership Act. The rights and duties of the Partners
are as provided in the Kentucky Uniform Limited Partnership Act except as
modified by this Agreement. The law of the State of Kentucky is to apply to all
questions and matters pertaining to this Agreement. The Partners will take all
actions necessary or appropriate to allow the Partnership to carry on its
business in accordance with the terms of this Agreement, and Kentucky law.
Further, for Federal tax law purposes, references are made to the Internal
Revenue Code of 1986, as amended, and such references are hereinafter to as the
"Code."
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<PAGE> 89
1.2 NAME. The name of the Partnership is JAYTEE PROPERTIES LIMITED
PARTNERSHIP or such other name selected by the General Partners as may be
permitted by law. The Partnership will file such certificates of fictitious name
as may be required by law.
1.3 PURPOSES. The Partnership is formed for the following purposes: (a) to
manage the family's assets, (b) to create a more varied investment portfolio for
the family's assets, and (c) to create a convenient means to allow the Partners
to make gifts of Partnership interests to various members of their family.
1.4 POWERS. The Partnership will have the power to do all things necessary
or desirable in the conduct of its business to the fullest possible extent
permitted by law.
1.5 PRINCIPAL PLACE OF BUSINESS. The principal place of business for the
Partnership is Louisville, Kentucky and/or such other place or places as the
Partners may from time to time determine. The Managing or Co-Managing General
Partner will notify the Partners of the establishment of any office of the
Partnership in addition to, or replacement of, the principal office name herein
or any replacement thereof. The General Partners will maintain, at the
Partnership's principal office in Kentucky, those items referred to and required
by the Kentucky Uniform Limited Partnership Act ss. 362.409.
1.6 TERM. The term of the Partnership will commence on the filing of a
Certificate of Limited Partnership in the office of the Secretary of State of
Kentucky and will continue until dissolved in accordance with the terms of this
Agreement regarding Dissolution and Winding-Up.
1.7 REGISTERED AGENT. The name and address of the Partnership's registered
agent, and the address of Partnership's registered office in the State of
Kentucky, is as follows:
SHELDON G. GILMAN
500 MEIDINGER TOWER
Louisville, Kentucky 40202
1.8 NATURE OF PARTNERS' INTERESTS. The interests of the Partners in the
Partnership will be personal property. All property owned by the Partnership,
whether real or personal, tangible or intangible, or mixed, will be deemed to be
owned by the Partnership as an entity, and no Partner, individually or
otherwise, will have any ownership interest in such property.
2. CAPITAL CONTRIBUTIONS; WITHDRAWALS; AND CAPITAL ACCOUNTS
2.1 CONTINUATION OF CAPITAL ACCOUNTS. The General Partners' capital
accounts will continue as established upon the Partnership's books and records;
however, upon the conversion of this Partnership from a General Partnership into
a Limited Partnership each Partner's ownership interests will be converted into
General Partner's Interests and Limited Partner's Interests as the Partners
agree, and as reflected on Schedule A.
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<PAGE> 90
2.2 UNITS OF OWNERSHIP INTERESTS. A Partner's ownership interest may be
evidenced by Units of Ownership Interests as established and maintained on the
Partnership's books and records. Further, the transfer of a Partner's ownership
interest may be evidenced by the transfer of such Partner's Units of Ownership
Interests.
2.3 REQUIRED SUBSEQUENT CAPITAL CONTRIBUTIONS. Any General Partner whose
capital account has a deficit balance at the time of liquidation of such General
Partner's interest agrees to contribute to the capital of the Partnership an
amount of cash necessary to bring such General Partner's Capital Account up to
zero. Such amount will be paid to the Partnership by the later of the end of the
taxable year in question or 90 days after the date of the Partnership's
liquidation, and such amount will be available for payment to the Partnership's
creditors or for distribution to those Partners having positive Capital Account
balances.
2.4 ADDITIONAL CAPITAL CONTRIBUTIONS.
2.4(a) No Partner will be required to make any capital
contribution in addition to that hereinabove required. The General Partners will
be personally liable for all debts of the Partnership, other than nonrecourse
debt.
2.4(b) If additional contributions are necessary or appropriate,
then the Partners may make additional contributions in such amounts as necessary
in order for the Partners to maintain their proportionate percentage interest in
the Partnership. If not all of the Partners elect to make an additional
contribution, then the other Partners may make capital contributions for the
portion not contributed by those Partners who have elected not to make an
additional capital contribution.
2.5 LIABILITY OF LIMITED PARTNERS. Limited Partners will not have any
personal liability for Partnership debts, obligations or losses of the
Partnership in excess of the Limited Partner's obligation to make the
contribution to the Partnership as set forth in Schedule A of this Agreement.
2.6 CAPITAL ACCOUNTS.
2.6(a) A separate capital account ("Capital Account") will be
maintained for each General Partner and for each Limited Partner, and all
Capital Accounts will be maintained in accordance with the capital accounting
rules of Code Section 704(b), and the provisions of Treasury Department
Regulation Section 1.704-1(b)(2)(iv), and this Agreement will be so construed.
2.6(b) Each Partner's opening Capital Account balance will be
the amount of such Partner's initial capital contribution as set forth in
Schedule A and then will be increased and decreased in accordance with the
following provisions.
2.6(c) If a Partner transfers all or any part of such Partner's
interest in the Partnership, as provided and limited in this Agreement, then the
Capital Account of the transferor will become the Capital Account of the
transferee to the extent of the Partnership interest transferred.
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<PAGE> 91
2.7 ADDITIONS TO CAPITAL ACCOUNTS. Subsequent to the opening Capital
Account, a Partner's Capital Account will be increased by the following items:
(a) Such Partner's cash contributions to the Partnership's capital; (b) The fair
market value, as agreed upon, of any property contributed to the capital of the
Partnership by a Partner (net of liability secured by such contributed property
that the Partnership is considered to assume or take subject to under Code
Section 752); (c) Such Partner's share of the Partnership realized and
unrealized profits and any gains (whether or not any such items are exempt from
tax); (d) Such Partner's share of income described in Code Section 705(a)(1)(B);
and (e) Such other amounts that are required for the Capital Account to be
determined and maintained in accordance with Treasury Regulations.
2.8 SUBTRACTIONS TO CAPITAL ACCOUNTS. Subsequent to the opening Capital
Account, a Partner's Capital Account will be reduced by the following items:
2.8(a) Such Partner's share of the Partnership's realized and
unrealized losses (including expenditures described in Code Section 705(a)(2)(B)
or treated as an expenditure by reason of Treasury Regulation Section
1.704-1(b)(2));
2.8(b) The amount of cash and the fair market value of property
distributed (net of any liabilities assumed by such Partner or to which the
distributed property is subject); and
2.8(c) Such other amounts that are required for the Capital
Account to be determined and maintained in accordance with Treasury Regulations.
2.9 WITHDRAWAL OF CAPITAL. No Partner will be entitled to withdraw any
part of their capital contribution to the Partnership, or receive any
distributions from the Partnership, except as provided in this Agreement. No
Partner will be entitled to demand or receive any property from the Partnership
other than cash, except as otherwise in this Agreement.
2.10 INTEREST ON CAPITAL ACCOUNTS AND CONTRIBUTIONS. No Partner will be
entitled to interest on any capital contribution or on such Partner's Capital
Account.
2.11 RESTRICTION ON REGISTRATION OF INTEREST. Registration will be
restricted to the extent required so that the Partnership is not deemed to be a
"publicly traded partnership" under the Code. Partnership interests will only be
registered in the name of the beneficial owner. The Partnership will not be
bound to recognize any equitable or other claim to such interest on the part of
any other person (such as a broker, dealer, bank, trust company or clearing
corporation) which is acting as a nominee, agent or in some other representative
capacity, whether or not the Partnership will have knowledge thereof, except for
the following: (a) Interests held by a guardian, custodian or conservator for
the benefit of a minor or incompetent; (b) Interests held by a trust for the
benefit of a Partner or Partner's spouse, parent, parent - in - law, issue,
brother, sister, brother - in - law, sister - in - law, niece, nephew, cousin,
grandchild or grandchild - in - law; and (c) Interests held by a fiduciary for
other like beneficiaries. An interest in the Partnership will only be traded in
accordance with the Department of the Treasury's rules and regulations then in
effect which set forth the parameters within which a partnership may act and not
be deemed to be a "publicly traded
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<PAGE> 92
partnership" under the Code. In no event may an interest in the Partnership be
listed on an established securities exchange.
3. PROFIT AND LOSS
3.1 DEFINITIONS OF NET PROFIT AND NET LOSS. Profits and losses for any
Operations Period, as hereinafter defined, will be computed in the same manner
as the Partnership reports its income for Federal income tax purposes, except
that (i) income of the Partnership that is exempt from tax, and expenses that
are not deductible for tax purposes under the Code will be included in the
computation, and (ii) unrealized gain or loss will be taken into account as
provided herein. The principles of Treasury Regulation Section 1.704-1(b)(4)(i)
will be applied, when necessary, to prevent duplication or omission of Capital
Account adjustments, including, without limitation, those arising from deemed
sales as provided in this Agreement.
3.2 ALLOCATION OF PROFITS AND LOSSES.
3.2(a) Except as hereinafter provided, the Partnership's net
profits and losses for each Operations Period will be allocated to the Partners
on a pro rata basis based upon each Partner's ownership interests, as reflected
by such Partner's Capital Account, to the total of all Partners' ownership
interests as reflected by all Capital Accounts.
3.2(b) For income tax purposes only, depreciation (cost
recovery) deductions, depletion deductions and gain or loss with respect to
assets contributed by a Partner will be allocated among the Partners so as to
take into account the difference between the adjusted basis of the asset at the
time of its contribution and the agreed value of the asset. An asset will be
considered contributed by a Partner if it has a basis in the hands of the
Partnership which is determined, in whole or in part, by reference to the basis
of an asset actually contributed by a Partner (or previously deemed contributed
by a Partner pursuant hereto).
3.2(c) Net losses for any Operations Period which would
otherwise be allocated with respect to a Partnership interest owned by a Limited
Partner and which would cause such Limited Partner to have an Adjusted Capital
Account Deficit, will instead be allocated pro rata among the General Partners.
3.2(d) If any Limited Partner receives an adjustment,
allocation, or distribution, described in Treasury Regulation Section
1.704-1(b)(2)(ii)(d)(4), (5), or (6), items of Partnership gross income will be
specifically allocated to such Limited Partner in an amount and manner
sufficient to eliminate any Adjusted Capital Account Deficit created by such
adjustments, allocation, or distributions as quickly as possible. These
provisions are intended to constitute a "qualified income offset" within the
meaning of Treasury Regulation Section 1.704-1(b)(2)(ii)(d) and will be
interpreted and implemented as provided therein.
3.2(e) After satisfaction of any allocations hereinabove
required, if there have been any net losses allocated to the General Partners,
as hereinabove provided, then the Partnership's net
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<PAGE> 93
profit for an Operations Period will be allocated pro rata among the General
Partners until the General Partners have received allocations of net profit
equal in the aggregate to any net losses previously allocated to them as
hereinabove provided.
3.2(f) An "Adjusted Capital Account Deficit" exists with respect
to a Limited Partner if the Limited Partner's Capital Account, determined for
this purpose by reducing the Capital Account by the items described in Treasury
Regulation Section 1.704-1(b)(2)(ii)(d)(4), (5), and (6) and by increasing the
Capital Account by the amount described in Treasury Regulation Section
1.704-1(b)(2)(ii)(c) that the Partner is obligated to restore, is a negative
amount.
3.2(g) If there is a net decrease in the Partnership's Minimum
Gain, as provided by Treasury Regulation Section 1.704-2(b)(2), or Partner
Nonrecourse Debt Minimum Gain, as provided by Treasury Regulation Section
1.704-2(i)(3), during an Operations Period, each Partner will be allocated,
before any other allocations, items of income and gain for such Operations
Period, and subsequent Periods if necessary, an amount equal to such Partner's
share of the net decrease in the Partnership's Minimum Gain or Partner
Nonrecourse Debt Minimum Gain, as applicable, for such Operations Period;
provided that no such allocation will be required if any of the exceptions set
forth in Treasury Regulation Section 1.704-2(f) apply. It is intended that this
provision constitute a "MINIMUM GAIN CHARGEBACK" within the meaning of Treasury
Regulation Section 1.704-2.
3.3 ALLOCATIONS IN EVENT OF TRANSFER, ADMISSION OF NEW PARTNER, ETC. In
the event of the transfer of all or any part of a Partner's Partnership
interest, as provided and limited by this Agreement, at any time other than the
end of a Fiscal Year, the admission of a new Partner or disproportionate capital
contributions, the transferring Partner's, new Partner's or continuing Partners'
shares of the Partnership's income, gain, loss, deductions and credits allocable
to such Partnership interest will be allocated between the transferor Partner
and the transferee Partner(s) in the same ratio as the number of days in such
Fiscal Year before and after the date of such event; provided that the General
Partners may treat the periods before and after such event as separate Fiscal
Years.
3.4 DEFINITIONS: ADJUSTMENT DATES; OPERATIONS PERIOD.
3.4(a) The "Adjustment Dates" of the Partnership will be the
date of dissolution of the Partnership and each date on which there is a
distribution in kind of property of the Partnership, a contribution of money or
other property (other than a DE MINIMIS amount) to the Partnership by a new or
existing Partner as consideration of an interest in the Partnership, or a
distribution of money (other than a DE MINIMIS amount) by the Partnership to a
retiring or continuing Partner as consideration for an interest in the
Partnership.
3.4(b) An "Operations Period" of the Partnership will be the
period beginning on the date hereof, the first day of a fiscal year or an
Adjustment Date (as the case may be) and ending on the earlier of the next
succeeding Adjustment Date or the last day of a fiscal year.
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3.5 RETENTION OF DISTRIBUTABLE INCOME AS CAPITAL RESERVES. The General
Partners may elect to retain from the distributions of available cash any
amounts which, in the General Partners' judgment, are needed to provide reserves
and working capital for anticipated investments and operating expenses.
4. DISTRIBUTIONS
4.1 DISTRIBUTION OTHER THAN UPON WINDING-UP. The Managing or Co-Managing
General Partner, or the General Partner(s), if there are no Managing General
Partners, will determine in their sole discretion, whether distributions will be
made to any particular General or Limited Partner (including the Partner(s)
authorizing the distribution) or whether the Partnership's income will be
reinvested; provided, however, that such distributions will be made to each
Partner pro rata based upon the proportion of each Partner's ownership interests
to the total of all Partners' interests, determined as of the date of the
distribution. Distributions may only be cash, and the amount of cash
distributions will only be such amount which exceeds the reasonable working
reserves needed for the Partnership's operations.
4.2 PROPERTY DISTRIBUTIONS. If property, other than cash, is distributed
to a Partner, the fair market value of such property will be used for purposes
of determining the amount of such distribution. The difference, if any, of such
fair market value over (or under) the value at which such property is carried on
the books of the Partnership will be credited or charged to the Capital Accounts
of the Partners in accordance with the ratio in which the partners share in the
gain and loss of the Partnership. The fair market value of the property will be
determined by the Managing or Co- Managing General Partners or the General
Partners if there are no Managing Partners.
4.3 DISTRIBUTIONS UPON WINDING-UP. Upon the dissolution and winding up of
the Partnership, the assets of the Partnership will be distributed in the
following order of priority: (a) To the payment of the debts and liabilities of
the Partnership and the expenses of winding-up, including the establishment of
any reserves to pay any anticipated and contingent liabilities or obligations
which the Managing or Co-Managing or General Partners, as the case may be, in
their sole discretion, deem appropriate. Any such reserves will be charged
against the Partners' Capital Accounts on a pro rata based upon the proportion
of each Partner's ownership interests to the total of all Partners' interests,
which reserve, prior to payment of such liabilities and obligations, will be
placed in the hands of an escrow agent for such period and upon such terms as
the General Partners will determine; (b) To repay any loans to the Partnership
by a Partner, including any deferred payment obligation to a Partner or a
Partner's personal representative as the result of a redemption by the
Partnership of such Partner's interest; (c) To the Partners in an amount equal
to any credit balance in their Capital Accounts (as a negative Capital Account
balance will be considered a loan from the Partnership to the Partner for the
purpose of determining distributions upon dissolution), so that the Capital
Account of each Partner will be brought back to zero; and (d) The balance, if
any, will be distributed to the Partners in an amount equal to each Partner's
percentage interest in the Partnership.
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5. ACCOUNTING
5.1 BOOKS AND RECORDS. The General Partners will maintain the general
accounts of the Partnership. The books of the Partnership will be kept on a
basis consistent with the provisions of this Agreement and determined in the
same manner as the Partnership computes its income (loss) for Federal income tax
purposes; provided, however, that the Partnership will not use the installment
method for book purposes. Such books and records, and the items referred to in
Kentucky Uniform Limited Partnership Act Section 362.409(1) will be open to the
inspection and examination of all Partners, in person or by their duly
authorized representatives, at reasonable times. The books of the Partnership
will be maintained using a method of accounting as determined by the General
Partners.
5.2 FISCAL YEAR. The fiscal year of the Partnership will be the calendar
year.
5.3 REPORTS. As soon as practicable after the close of each fiscal year
the Partnership will furnish each Partner with a copy of the Partnership's
financial statements for such year and with a statement of such Partner's
Capital Account, as reflected on the books of the Partnership. Each Partner will
also be supplied with all information with respect to the Partnership required
in connection with the preparation of such Partner's tax returns.
5.4 FEDERAL INCOME TAX STATUS AND ELECTIONS.
5.4(a) This Limited Partnership will constitute a Partnership
for Federal income tax purposes, and the General Partners will report all items
of income, gain, loss, deduction and credit as a Partnership and in accordance
with the Partnership taxation rules pursuant to the Internal Revenue Code and
Treasury Regulations.
5.4(b) All elections required or permitted to be made by the
Partnership under the Code will be made by the General Partners in such manner
as will, in their opinion, be most advantageous to a majority in interest of the
Limited Partners.
6. MANAGEMENT
6.1 MANAGEMENT BY GENERAL PARTNERS. The business affairs of the
Partnership will be managed by the General Partners. All decisions of the
General Partners, including but not limited to Partnership distributions, will
be made in accordance with the decision of the General Partner or General
Partners holding a majority of the General Partner interests. Deadlock between
the General Partners on any issue will be deemed a disputed issue for purposes
of this Agreement and will be resolved through arbitration as provided in this
Agreement. The General Partners will have all necessary powers to carry out the
purposes of the Partnership, and in addition to the authority given to the
General Partners by this Agreement and by law, the General Partners will have
the specific authority to take the following actions.
6.1(a) The General Partners will have the authority, at any
time, and from time-to-time, to sell, exchange, lease and/or transfer legal and
equitable title to the Partnership property upon such
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terms and conditions and for such considerations as the General Partners
consider reasonable. The execution of any document or conveyance or lease by a
General Partner will be sufficient to transfer complete legal and equitable
title to the interest conveyed without the joiner, ratification, or consent of
the Partners. No Purchaser, tenant, transferee or obligor will have any
obligation whatever to see to the application of payments made to the General
Partners.
6.1(b) The General Partners will have the authority to retain,
without liability, any and all property in the form it is received, without
regard to its productivity or the proportion that any one asset or class of
assets may bear to the whole. The General Partners will not have liability or
responsibility for loss of income from or depreciation in the value of the
property that was retained in the form in which the General Partners received
it.
6.1(c) The General Partners will have the authority to employ
such consultants and professional help as the General Partners consider
necessary to assist in the prudent management, acquisition, leasing and transfer
of the Partnership property, and to obtain such policies of insurance as the
General Partners consider reasonably necessary to protect the Partnership
property from loss or liability.
6.1(d) The General Partners will be permitted to register or
take title to Partnership assets in the name of the Partnership or as trustee,
with or without disclosing the identity of the principal, or to permit the
registration of securities in "street name" under a custodial arrangement with
an established securities brokerage firm, trust department or other custodian.
6.1(e) Insofar as the law will permit, a General Partner who
succeeds another will be responsible only for the property and records delivered
by or otherwise acquired from the preceding General Partner, and may accept as
correct the accounting of the preceding General Partner without duty to audit
the accounting or to inquire further into the administration of the predecessor,
and without liability for a predecessor's errors and omissions.
6.1(f) No one serving as a General Partner will be required to
furnish a fiduciary bond or other security as a prerequisite to such Partner's
service.
6.2 APPOINTMENT OF CO-MANAGING GENERAL PARTNER. The General Partners, if
there is more than one General Partner, may appoint one or more of the General
Partners to serve as the Managing General Partner or Co-Managing General
Partner. As between the General Partners, either of the Co-Managing General
Partners will have the right to make all decisions, execute all documents, and
take all action on behalf of the Partnership.
6.2(a) The Co-Managing General Partners will be Bernard Trager
and Steven E. Trager. If either Bernard Trager or Steven E. Trager ceases to be
a General Partner, resigns as a Co- Managing General Partner, or becomes ill or
incapacitated, then the remaining Co-Managing General Partner will become the
sole Managing General Partner and will be authorized and empowered to act for
the Partnership and, in his name and place, take all actions and do all things
as deemed necessary and appropriate.
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6.2(b) Any person dealing with the Partnership may rely upon
the signed and certified affidavit of the Managing or Co-Managing General
Partner which states:
"On my oath, and under the penalties of perjury, I
swear that I am the duly elected and authorized Managing
(Co-Managing) General Partner of the
____________________________________(name of limited
partnership); I certify that I have not been removed as the
Managing (Co-Managing) General Partner and have the
authority to act for and bind _____________________________
(name of limited partnership) in the transaction of the
business which this affidavit is given as affirmation of my
authority."
6.2(c) The Co-Managing General Partners will be entitled to a
reasonable annual compensation for services rendered to the Partnership, this
compensation to be measured by the time required in the administration of the
Partnership, the value of property under administration, and the responsibility
assumed in discharge of the duties of office. A General Partner also will be
entitled to a reimbursement for all reasonable and necessary business expenses
incurred in the administration of the Partnership.
6.3 VOTING THE PARTNERSHIP'S REPUBLIC BANCORP, INC. SHARES.
6.3(a) If the Partnership owns any shares of Republic Bancorp,
Inc. ("Republic") stock, then the Managing or Co-Managing General Partner's
right to vote the Republic shares will be limited as herein provided. The right
to direct the voting of Republic stock will be vested in a committee composed of
at least three persons to be known as the "Voting Committee." The Voting
Committee will consist of at least one limited partner. The initial members of
the Voting Committee who will serve as such until their successors are appointed
and assume such position on the Committee will be Bernard M. Trager, Steven E.
Trager, Sheldon G. Gilman, and Scott Trager. In the event any person who is then
serving as a member of the Voting Committee resigns or is otherwise unable to
continue to serve as such, then the remaining members of the Voting Committee
will appoint the successor Voting Committee member.
6.3(b) The Voting Committee's right to direct the Managing or
Co-Managing General Partner in voting Republic shares applies to each matter
which is brought before an annual or special meeting of the shareholders of
Republic stock. Before each such shareholders' meeting the Managing or
Co-Managing General Partner will provide the Voting Committee with copies of all
proxy solicitation materials pertaining to the exercise of such rights, and such
materials will contain all the information distributed to other Republic
shareholders. The Voting Committee will then determine, by majority vote, how to
direct the Managing or Co-Managing General Partner to vote the shares of
Republic stock.
6.3(c) The Voting Committee's decisions will be binding and
conclusive on the Managing and/or Co-Managing Partner, who will vote all shares
of Republic stock in accordance with the directions of the Voting Committee.
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6.4 LIABILITIES OF THE GENERAL PARTNERS. The General Partners and their
agents will not be liable, responsible or accountable in damages or otherwise,
to the Partnership or to any of the Partners for any acts performed or omitted
to be performed in good faith. Such good faith errors will mean mistakes of
judgment or losses due to such mistakes or to the negligence or bad faith of any
employee, broker, advisor or other agent or representative of the Partnership
(provided that such agent or representative was selected with reasonable care).
The General Partners may consult with legal counsel selected by the Co-Managing
General Partners and will have no liability for the consequences of any action
or omission resulting from good faith reliance on the advice of such counsel.
The exculpation provided in this section shall apply to the agents, employees
and other legal representatives of each General Partner.
6.5 OTHER INTERESTS. The General Partners and the Limited Partners may
engage in or possess interests in other business ventures of every nature and
description, whether or not competitive with the business of the Partnership,
independently or with others, and neither the Partnership nor any Partner will,
by virtue of this Agreement, have any rights in or to such other ventures or the
income or profits derived therefrom.
6.6 STANDARD OF CARE OF GENERAL PARTNERS; INDEMNIFICATION.
6.6(a) A General Partner will not be liable, responsible or
accountable in damages to any Partner, or the Partnership, for any act or
omission on behalf of the Partnership performed or omitted by such General
Partner in good faith and in a manner reasonably believed by such General
Partner to be within the scope of the authority granted to the General Partners
by this Agreement and in the best interests of the Partnership, unless such
General Partner has been guilty of gross negligence or willful misconduct with
respect to such acts or omissions.
6.6(b) The Partnership will indemnify the General Partners for,
and hold the General Partners harmless from, any loss or damage incurred by the
General Partners by reason of any act or omission so performed or omitted by the
General Partners (and not involving gross negligence or willful misconduct).
6.7 LIMITED PARTNERS. Except for the voting rights that may be held by a
Limited Partner who is also a member of the Voting Committee, as provided above,
no person in such person's capacity as a Limited Partner will have any voice in
or take part in the management of the business or affairs of the Partnership or
have the right or authority to act for or bind the Partnership. The Limited
Partners will not be liable for any of the losses, debts or liabilities of the
Partnership in excess of their respective Capital Contributions and any profits
allocated to their Capital Accounts, except as otherwise expressly provided by
law. General Partners may also be Limited Partners.
7. WITHDRAWAL.
7.1 RESTRICTIONS ON WITHDRAWAL, SUBSTITUTION AND TRANSFER. This Limited
Partnership was formed by a family, a closely-held group, and they know, depend
upon, and trust one another, and have either surrendered certain management
rights in exchange for limited liability (as in the case
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of Limited Partners) or assumed sole management responsibility and risk (as in
the case of a General Partner), based upon their relationship and trust.
Furthermore, as Capital is also material to the business and investment
objectives of the Partnership and its federal tax status, any unauthorized
substitution or transfer of a Partner's interest in the Partnership could create
a substantial hardship on the Partnership, jeopardize its Capital base, and
adversely affect its tax structure. These restrictions on substitution and
transfer are intended merely as a method to protect and preserve the existing
relationships based upon the trust of the Partners and the Partnership's capital
and its financial ability to continue.
7.2 NO WITHDRAWAL BY GENERAL PARTNERS.
7.2(a) No General Partner may withdraw from the Partnership
before its dissolution.
7.2(b) Any General Partner, who, notwithstanding the
prohibition on withdrawal as set forth above, gives written notice of such
Partner's intention to withdraw as provided in Section 362.463 of the Kentucky
Uniform Limited Partnership Act will be entitled to a distribution equal to the
lesser of the following:
7.2(b)(1) The General Partner's Capital Account as of
the close of the month following the date the other Partners receive
the withdrawing General Partner's notice of withdrawal ("Effective
Date"). Such Capital Account will be adjusted to reflect such General
Partner's share of the profit or loss of the Partnership through the
Effective Date and contributions by, and distributions to, such
General Partner since the close of the Partnership's last Fiscal Year
to the extent such adjustments have not already been reflected in the
Capital Account of such General Partner on the Partnership's books; or
7.2(b)(2) The fair market value of his General Partner
interest as determined hereinafter.
7.2(b)(3) Further, such distribution will be reduced
by any damages attributable to such Partner's breach of this
Agreement.
7.3 WITHDRAWALS BY LIMITED PARTNERS. No Limited Partner, including those
Limited Partners who are also General Partners, may withdraw from the
Partnership prior to its dissolution.
8. TRANSFERS; SUBSTITUTION; ADDITIONAL PARTNERS
8.1 ASSIGNMENT OF LIMITED PARTNER'S INTEREST. The Limited Partners may not
sell, assign, transfer, pledge, hypothecate, or otherwise dispose of all or any
portion of their Limited Partner interests, except as provided below. Any
purported assignment, transfer, etc. which is prohibited by this Agreement will
be null and void and of no force or effect.
8.2 VOLUNTARY TRANSFERS OF LIMITED PARTNER'S INTERESTS.
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8.2(a) If any Limited Partner ("TRANSFEROR L.P.") receives a
bona fide written offer that the Transferor L.P. desires to accept ("TRANSFEREE
OFFER") from any person ("TRANSFEREE") to purchase all, but not less than all,
of the Transferor L.P.'s Limited Partnership interests, then, before any
transfer of the Transferor L.P.'s Limited Partner interests ("TRANSFEROR
INTEREST"), the Transferor L.P. will give the other Partners and the Partnership
written notice ("TRANSFER NOTICE") containing the following:
8.2(a)(1) the proposed Transferee's identity;
8.2(a)(2) a true and complete copy of the
Transferee Offer; and
8.2(a)(3) the Transferor L.P.'s offer ("OFFER") to
sell the Transferor Interest to the other Partners or to the
Partnership, as the case may be, at the lower of the Transferor
Interests' fair market value as determined herein or the price in the
Transferee Offer and at the other terms and conditions set forth in
the Transferee Offer.
8.2(b) Each of the other Partners will have the first option to
purchase the Transferor Interest in accordance with their percentages of
Partnership Interests in the Partnership or such other percentages as they may
unanimously agree upon. If not all of the other Partners elect to purchase, then
those Partners electing to purchase will have the right to purchase the balance
of the Transferor Interest in accordance with their respective percentages of
Partnership Interests among themselves, or in such other percentages as they may
unanimously agree.
8.2(c) If the other Partners fail to purchase all of the
Transferor Interest, then the Partnership will have the right to purchase the
remaining balance of the Transferor Interest
8.2(d) The Offer will be and remain irrevocable for 60 days
following the date the Transfer Notice is properly delivered to the other
Partners and to the Partnership ("OFFER PERIOD"). At any time during the Offer
Period, the other Partners or the Partnership or both may accept the Offer by
notifying the Transferor L.P. in writing. If the Offer is accepted, then the
parties will fix a closing date for the purchase, which will not be earlier than
ten, nor more than 90, days after the expiration of the Offer Period.
8.2(e) If the Offer is accepted by any other Partners or the
Partnership or both, as the case may be, the purchasing Partners or Partnership
may elect to pay the purchase price either in accordance with the terms and
conditions set forth in the Offer or in accordance with the terms and conditions
of this Agreement.
8.2(f) If all of the Transferor Interest is not purchased by
either the other Partners or the Partnership, then the Transferor L.P. will be
free, for a period of 30 days after the expiration of the Offer Period ("FREE
TRANSFER PERIOD") to transfer the Transferor Interest to the Transferee for the
same or greater price and on the same terms and conditions as set forth in the
Transferee Offer. If the Transferor L.P. does not transfer the Transferor
Interest within the Free Transfer Period, the
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Transferor L.P.'s right to transfer the Transferor Interest pursuant to the
terms and conditions set forth herein will expire.
8.2(g) Any transfer by the Transferor L.P. after the last day
of the Free Transfer Period or without the strict compliance with the terms,
provisions, and conditions of this Agreement will be null and void and of no
force and effect whatsoever.
8.2(h) Notwithstanding anything in this Agreement to the
contrary, Limited Partners may make gifts of their Limited Partnership Interests
to Permitted Transferees. For purposes of this Agreement, "PERMITTED TRANSFEREE"
means (i) any other Partner; (ii) the Partner's estate, spouse, lineal
ancestors, descendants by birth or adoption, siblings; (iii) charitable
organizations; and (iv) trusts for the exclusive benefit of a Partner or trusts
for any of the other foregoing enitities or individuals. Upon compliance with
the requirements for admission as a substitute Limited Partner as set forth this
Agreement, the donee may become a Substitute Limited Partner with respect to the
Partnership Interests transferred.
8.3 INVOLUNTARY TRANSFERS OF LIMITED PARTNER INTERESTS.
8.3(a) If any Limited Partner's Partnership Interest is sought
to be transferred by any involuntary means (other than death or adjudication of
incompetency or insanity), including, but not limited to, attachment,
garnishment, execution, bankruptcy, insolvency, levy or seizure, then such
Limited Partner's Partnership Interest will be purchased as follows.
8.3(b) Each of the other Partners will have the first option
to purchase in accordance with their percentages of Partnership Interests in the
Partnership or such other percentages as they may unanimously agree upon. If not
all of the other Partners elect to purchase, then those Partners electing to
purchase will have the right to purchase the balance of the offered Partnership
Interest in accordance with their respective percentages of Partnership
Interests among themselves, or in such other percentages as they may unanimously
agree.
8.3(c) If the other Partners fail to purchase all of the
interest sought to be involuntarily transferred, then the Partnership will have
the right to purchase the remaining balance of such Partnership Interest.
8.3(d) The option to the other Partners and to the Partnership
to purchase the interest sought to be involuntarily transferred is hereinafter
referred to as the "INVOLUNTARY OPTION."
8.3(e) The Involuntary Option period of the other Partners and
the Partnership will commence upon their receipt of actual notice of the
attempted involuntary transfer and will terminate, if not exercised, 60 days
thereafter, unless sooner terminated by written refusal of the other Partners.
An election to exercise any Involuntary Option will be made in writing and
transmitted to the Limited Partner whose Partnership Interest is sought to be
involuntarily transferred.
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8.3(f) Upon the failure or neglect of the other Partners or the
Partnership to purchase, in accordance with this Section, all of the Partnership
Interest sought to be involuntarily transferred, the unpurchased Partnership
Interest may be involuntarily transferred, but such transferee may not become a
Substitute Limited Partner unless the requirements for becoming a Substitute
Limited Partner as set forth in this Agreement are satisfied. Nevertheless, such
transferee will be subject to this Agreement's terms and conditions.
8.3(g) If, notwithstanding the provisions of this Agreement,
any Partnership Interest is transferred by involuntary means without compliance
with the terms and conditions of this Agreement, then the Involuntary Option
will be to purchase such Partnership Interest from the transferee(s).
8.3(h) The purchase price for all of a Limited Partner's
Partnership Interests to be purchased pursuant to the exercise of the
Involuntary Option will be the Limited Partner's Capital Account as of the close
of the month following the exercise of the Involuntary Option ("EFFECTIVE
DATE"). Such Capital Account will be adjusted to reflect such Limited Partner's
share of the profit or loss of the Partnership through the Effective Date and
contributions by, and distributions to, such Limited Partner since the close of
the Partnership's last Fiscal Year to the extent such adjustments have not
already been reflected in the Capital Account of such Limited Partner on the
Partnership's books. The purchaser will pay the purchase price pursuant to the
terms of this Agreement.
8.3(i) The closing date will occur on or before 30 days following
the exercise of the Involuntary Option. At the closing, the selling Limited
Partner will execute such instruments of assignment as shall be required by the
purchasing Partner(s) or the Partnership, so as to transfer the Partnership
Interests being sold free and clear of all liens, claims, security interests,
and encumbrances whatsoever. If the selling Limited Partner fails to execute
such documents, then either the Managing or Co-Managing General Partner may do
so pursuant to the power of attorney granted them in this Agreement.
8.4 DETERMINATION OF VALUE.
8.4(a) The value of a Partner's Limited or General Partner
interest, will be such interest's Fair Market Value. "Fair Market Value" will be
determined by the General Partners. If the withdrawing or transferor Partner
objects to the General Partners' determination of Fair Market Value, then such
value will be determined by an appraiser jointly chosen by the withdrawing or
transferor Partner and the General Partners. If the parties cannot agree on the
choice of one appraiser, then the General Partners will appoint an appraiser,
and the withdrawing or transferor Partner will appoint another appraiser. Each
party will bear the cost of their own appraisal. If the resulting appraisal
values are different and the higher appraisal value is less than 110 percent of
the lower appraisal, then the two appraisals will be averaged, and the averaged
value will be the deemed fair market value for the purposes of this Agreement.
If the higher appraisal value is more than 110 percent of the lower appraisal
value, then the Partnership's certified public accountant will appoint a third
appraiser and submit copies of the independent appraisals to the appraiser
selected by the accountant. The third appraiser will review both appraisals and,
on the basis of a review of the
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appraisals, will select the ONE appraisal which, in the opinion of the third
appraiser, is most correct. The decision of the third appraiser will be final
and the costs of such will be borne by the Partnership and will be accrued as a
liability of the Partnership.
8.4(b) Adjustments to Fair Market Value will be made as follows:
8.4(b)(1) To reflect any distributions made in the
regular course of business, between the Termination Date and the date
the Partnership begins payments in redemption of the Partnership
interest;
8.4(b)(2) To reflect the effect of the redemption of
the Partnership interest on the withdrawing Partner's interest, the
value of the total Partnership interests outstanding and the Capital
Account balances represented by the Partnership interests not
redeemed; and
8.4(b)(3) For purposes of determining the Fair Market
Value of a General Partner's interests, to reflect an assumption,
for appraisal purposes, that the withdrawal rights afforded a General
Partner in this Agreement do not exist.
8.5 PAYMENT OF PURCHASE PRICE. The purchase price for a Partner's interest
will be paid by the purchaser(s) in 120 equal monthly principal installments (or
the remaining term of the Partnership if less than 120 months) plus interest on
the unpaid principal balance at a rate equal to the prime rate charged by the
bank where the Partnership conducts its banking business. The interest rate will
be adjusted every six months. The first monthly installment will be due and
payable 120 days after the determination of value for the Partner's interest.
The purchaser(s) may prepay the entire unpaid principal balance at any time. In
the event of non-payment of any installment, the withdrawing Partner or the
deceased Partner's personal representative, as the case may be, may declare the
remaining payments in default and thereby require the immediate payment of the
entire unpaid principal balance with all accrued interest.
8.6 EXTENSION OF TIME FOR PAYMENT OF PURCHASE PRICE. Notwithstanding the
above, neither the Partnership nor the Partners will be required to make
payments for the purchase of more than one terminated or deceased Partner's
interest at any one time. If during the period of time in which the Partners or
the Partnership are making payments to purchase a Partner's interest, an event
occurs which would require the Partners or the Partnership to purchase an
additional Partner's interest, then the payments for such Partner's interest
will become due and payable 30 days after the completion of payments for the
purchase of the previously withdrawing or transferring Partner's interests. The
purchasing party will issue a promissory note setting forth the delayed payment,
with interest accruing thereon in accordance with these provisions. These
provisions only alter the timing of payments for a Partner's interest and do not
affect the determination of the Termination Date, the amount of the Purchase
Price, and all other rights and obligations provided herein.
8.7 DEATH OR INCAPACITY OF LIMITED PARTNER. The death, adjudication or
incompetency, or insanity of a Limited Partner will not dissolve the
Partnership. In the event of such death, adjudication of incompetency, or
insanity, the legal representative or legal successor of the deceased
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<PAGE> 104
or incompetent Limited Partner who has legal control of or inherits his Limited
Partner interests will be deemed the assignee of the entire Limited Partner
interests of the deceased or incompetent Limited Partner and may be admitted as
a Substitute Limited Partner if the requirements for becoming a Substitute
Limited Partner as set forth in this Agreement are satisfied. The estate of the
deceased or incompetent Limited Partner will be liable for any of his
liabilities and obligations to the Partnership and in his capacity as Limited
Partner.
8.8 SUBSTITUTE LIMITED PARTNERS. No assignee or transferee of a Limited
Partner's interest in the Partnership will have the right to become a substitute
Limited Partner unless all of the following conditions are satisfied:
8.8(a) The General Partners have received, in form and substance
satisfactory to them, a written instrument executed by the transferor, which
instrument transfers to the transferee all or part of the transferor's
Partnership interests;
8.8(b) The transferor and transferee execute and acknowledge such
other instruments as the General Partners may, in the General Partner's sole
discretion deem necessary or desirable to effect such admission, including the
transferee's written acceptance and adoption of this Agreement's terms and
conditions;
8.8(c) The assignee/transferee has paid or agreed to pay, as the
General Partners may determine, all reasonable expenses relating to such
admission; and
8.8(d) All of the General Partners have unanimously consented in
writing to the assignee's/transferee's admission as a substitute Limited
Partner.
8.9 TRANSFERS OF GENERAL PARTNERSHIP INTERESTS.
8.9(a) The General Partners may not sell, assign, transfer,
pledge, hypothecate, encumber, or otherwise dispose of their General Partner
interests, without the prior written consent of the other General Partner(s) and
a majority of the Limited Partners. Any purported assignment, transfer, etc. in
contravention of this Agreement will be null and void and of no force or effect.
8.9(b) Notwithstanding anything in this Agreement to the
contrary, in the event of the General Partner's death, the decedent's General
Partner interests will pass to the General Partner's estate (executor, personal
representative, administrator, trustee or assignee). However, the General
Partner's estate will only be a transferee of the General Partner interest and
may only become a substitute General Partner if the requirements for becoming a
Substitute General Partner, as set forth herein, are satisfied.
8.9(c) The transferee of a General Partner interest may not be
admitted as a substitute General Partner without the written consent of all the
General Partners. If there are no other General Partners, then such transferee
may be admitted only with the written consent of a majority of the Limited
Partnership interests.
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8.9(d) Further, the transferee must have approved and adopted
all of the provisions of this Agreement, as the same may have been amended,
which approval and adoption may be evidenced in such manner as is required by
the General Partners.
8.9(e) If the transferee does not receive the necessary consent
of the General or Limited Partners, as the case may be, but otherwise satisfies
the requirements of this Agreement, such General Partner interests will be
deemed Limited Partner interests in the hands of the transferee, and such
transferee will be deemed admitted only as a substitute Limited Partner with
respect thereto, and will not be deemed a General Partner for any purposes.
8.10 INCAPACITY OF A GENERAL PARTNER
8.10(a) At the commencement of this Partnership, there will be
two General Partners, Bernard Trager and Steven E. Trager, with both General
Partners being Co-Managing General Partners. In the event of a Co-Managing
General Partner's illness or incapacity, the remaining Co-Managing General
Partner will be authorized and empowered to act for the partnership as the
Managing General Partner, and in his name and place take all actions and do all
things as a Managing General Partner.
8.10(b) In the event a Co-Managing General Partner has ceased to
serve or is unable to serve, by reason of death, incapacity, or absence, the
other Managing General Partner will have the right and authority to execute an
amendment to the Certificate of Limited Partnership, as attorney-in-fact for the
withdrawing General Partner.
8.10(c) If any Partner is an individual person, then any person
acting under a durable power of attorney or Letters of Guardianship or Committee
may exercise all of the Partner's rights and voting authority for and on behalf
of his or her principal and will be entitled to receive any distributions from
the Partnership for and on behalf of the disabled Partner.
8.11 SUCCESSOR GENERAL PARTNER. Notwithstanding anything in this Agreement
to the contrary, upon the death or incapacity of Bernard Trager, Jean Trager
will become a General Partner by converting 1 percent of her then outstanding
Limited Partner interests into a 1 percent General Partner interest. If Jean
does not then own any Limited Partner interests, the Partnership will issue to
her a 1 percent General Partner interest under the terms and conditions of this
Agreement governing the issuance of Additional Partnership Interests. Jean will
execute this Agreement as a General Partner promptly after her admission as
such. Further, Jean will have no liability for debts and obligations of the
Partnership that were outstanding on the date when she becomes a General
Partner, except to the extent provided under the Kentucky Uniform Limited
Partnership Act.
8.12 FIDUCIARIES AS PARTNERS.
8.12(a) FIDUCIARY CAPACITY. A Partner may own one or more
interests in a fiduciary capacity, such as a trustee under a trust agreement, as
an executor or a personal representative of an estate, or as a custodian. Except
as hereinafter provided, such fiduciary will have no interest or
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<PAGE> 106
obligation individually with respect to any such interests, but will be
considered as acting solely in such fiduciary capacity. If a Partner acting in a
fiduciary capacity ceases to act as such, the successor fiduciary shall be a
Partner in the same fiduciary capacity with the same rights and obligations as
the predecessor fiduciary. A person may be a Partner in an individual capacity
and a Partner in one or more fiduciary capacities.
8.12(b) REVOCABLE TRUSTS. An individual Partner that holds his
or her interests as trustee under a Revocable Trust that has not been admitted
as a Partner will be considered to have the same duties and responsibilities to
the Partnership that such individual would have if he or she held the interests
individually. The Trust shall be admitted as a Partner upon the approval of the
General Partners and upon approval and adoption of all of the provisions of this
Agreement, as the same may have been amended, which approval and adoption may be
evidenced in such manner as is required by the General Partners.
8.13 ADDITIONAL PARTNERS.
8.13(a) Additional Partnership interests may be issued and sold
by the General Partners to any person including, but not limited to, a natural
person, trust, corporation, partnership or other association, for fair market
value as determined by the General Partners using their reasonable business
judgment, and under such terms as deemed advisable by the General Partners.
Admission of any Partner will not be a cause of dissolution.
8.13(b) The Partnership will admit any New Partners upon their
approval and adoption of all of the provisions of this Agreement, as the same
may have been amended, which approval and adoption may be evidenced in such
manner as is required by the General Partners.
9. FEDERAL INCOME TAX MATTERS
9.1 DISTRIBUTIVE SHARES. For purposes of Subchapter K of the Internal
Revenue Code, the distributive shares of the Partners of each item of
Partnership taxable income, gains, losses, deductions or credits for any Fiscal
Year will be in the same proportions as their respective shares of the net
income or net loss of the Partnership allocated to them pursuant to the terms of
this Agreement. Notwithstanding the foregoing, to the extent not inconsistent
with the allocation of gain provided for herein, gain recognized by the
Partnership which represents ordinary income by reason of recapture of
depreciation or cost recovery deductions for Federal income tax purposes will be
allocated to the Partner (or the Partner's successor-in-interest) to whom such
depreciation or cost recovery deduction to which such recapture relates was
allocated.
9.2 ELECTIONS. The election permitted by Code Section 754, and any
other elections required or permitted to be made by the Partnership under the
Code, will be made by the Co-Managing General Partner in such Co-Managing
General Partner's sole and absolute discretion.
9.3 TAX MATTERS PARTNER. The General Partners will from time to time
designate a Tax Matters Partner pursuant to Code Section 6231(a)(7).
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10. DISSOLUTION AND WINDING-UP
10.1 EVENTS OCCASIONING DISSOLUTION. The Partnership will dissolve and
terminate upon the occurrence of any of the following events, whichever shall
first occur:
10.1(a) The occurrence of an event of withdrawal by a General
Partner under Section 362.445 of the Kentucky Uniform Limited Partnership Act;
provided, however, if there is a remaining General Partner such remaining
General Partner will be obligated to continue the Partnership. Further, in the
event there are no remaining General Partners, then within 90 days of such event
of withdrawal, the Limited Partners, if they own more than 50 percent of the
outstanding partnership interests (excluding any Limited Partnership interests
held by a General Partner(s) whose withdrawal gave rise to the dissolution) may,
by unanimous written consent, agree to the appointment of a succesor General
Partner, effective as of the date of withdrawal of a General Partner(s).
10.1(b) December 31, 2036;
10.1(c) The written consent of all the Partners to dissolve the
Partnership;
10.1(d) Subject to the Partners' waiver of the right to seek
judicial dissolution, an entry of a decree of judicial dissolution otherwise
occurring under the Kentucky Uniform Limited Partnership Act.
10.2 WINDING-UP. The Partnership will be allowed one year from the date of
any event occasioning dissolution for the winding-up of its affairs and shall be
allowed such additional time as may be reasonable for the orderly sale of the
Partnership properties.
10.3 EVENTS NOT OCCASIONING DISSOLUTION. The Partnership will not dissolve
upon the death, bankruptcy, adjudication of incompetency or insanity, withdrawal
or assignment of the Partnership Interest of a Limited Partner. In any such
event, the General Partners will have the right and duty to continue the
business of the Partnership under the terms of this Agreement.
11. MISCELLANEOUS
11.1 NON-FAMILY MEMBER PARTNER. This Partnership will always have at least
one "Non-Family Member Partner." A "Non-Family Member Partner" means a partner
who is not a member of the Trager family, as the word "family" is defined in
Section 2704(c) of the Internal Revenue Code of 1986, as amended.
11.2 AMENDMENTS. This Agreement may be amended from time to time upon the
written consent of all of the General Partners and of the Non-Family Member
Partner. However, this Agreement will not be amended to change any Partner's
share of the liabilities or distributions without the consent of such Partner.
11.3 NOTICES.
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11.3(a) All notices, requests, demands or other communications
required or permitted under this Agreement will be in writing and be personally
delivered against a written receipt, delivered to a reputable messenger service
(such as Federal Express, DHL Courier, United Parcel Service, etc.) for
overnight delivery, transmitted by confirmed telephonic facsimile (fax), or
transmitted by mail, registered, express or certified, return receipt requested,
postage prepaid, addressed as follows:
11.3(a)(1) If given to the Partnership, to the
Partnership at its principal office; or
11.3(a)(2) If given to a Partner, to the Partner
at the address set forth on the records of the Partnership.
11.3(b) All notices, demands and requests will be effective upon
being properly personally delivered, upon being delivered to a reputable
messenger service, upon transmission of a confirmed fax or upon being deposited
in the United States mail as herein provided. However, the time period in which
a response to any such notice, demand or request must be given will commence to
run from the date of personal delivery, the date of delivery by a reputable
messenger service, the date on the confirmation of a fax or the date on the
return receipt, as applicable.
11.4 NO DELIVERY OF CERTIFICATES. The General Partners are not required to
deliver copies of any Certificate of Limited Partnership or amendment or
cancellation to the Limited Partners.
11.5 GOVERNING LAW. This Agreement will be construed in accordance with
and governed by the laws of the State of Kentucky.
11.6 ARBITRATION. The parties will submit any and all disputed issues to
final and binding arbitration. A disputed issue means any disagreement in regard
to any of the terms and conditions of this Agreement and any dispute between the
parties concerning their relationships, including issues not directly covered by
this Agreement. Any such dispute will not be subject to appeal to any court
except to permit a party to seek court enforcement of any arbitration award
rendered hereunder. If the parties agree to the appointment of a single
arbitrator, then the single arbitrator will determine and decide any dispute
arising hereunder. If the parties cannot agree to the selection of a single
arbitrator, then each party will designate an attorney to serve as an
arbitrator, and the selected attorneys will select an arbitrator, who is a
certified public accountant, to be the third arbitrator. The arbitrator(s) will
establish rules for the conduct of the arbitration consistent. The arbitrator(s)
will be impartial with the rules of the American Arbitration Association, and
KRS 417.050 et seq. and will have no prior or present relationship with any of
the parties. The arbitration hearing and proceedings will take place in the
State of Kentucky, and will be enforceable in the State of Kentucky. The
arbitrator(s) will be empowered to hear, conclusively determine and resolve all
claims and disputes between the parties. Arbitration fees and expenses will be
shared equally by the parties to the arbitration. The parties agree that all
matters to be arbitrated and the arbitration award will be maintained on a
confidential basis. All issues and the results thereof will not be disclosed by
the parties or their representatives, and the parties and their representatives
will not report any of
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<PAGE> 109
their proceedings to the public. These provisions will not prohibit any party
from securing witnesses, experts, or other advisors as is necessary in order for
the parties to present their case, etc.
11.7 POWER OF ATTORNEY.
11.7(a) Each Partner, in accepting this Agreement, makes,
constitutes and appoints the Co-Managing General Partners with full power of
substitution, as the Partner's attorney-in-fact and personal representative to
sign, execute, certify, acknowledge, file and record the Certificate of Limited
Partnership, and to sign, execute, certify, acknowledge, file and record all
appropriate instruments amending this Agreement, and the Certificate of Limited
Partnership on behalf of the Partner. In particular, the Co-Managing General
Partners, as attorney-in-fact, may sign, acknowledge, certify, and file and
record on the behalf of each Partner such instruments, agreements, and documents
that:
11.7(a)(1) Reflect the exercise by the Co-Managing
General Partner of any of the powers granted to him under this
Agreement;
11.7(a)(2) Reflect any amendments made to this
Agreement;
11.7(a)(3) Reflect the admission or withdrawal of a
General or Limited Partner; and
11.7(a)(4) May otherwise be required of the
Partnership or a Partner by Federal or State law, or the law of
any other applicable jurisdiction.
11.7(b) The power of attorney herein given by each Limited Partner
is a durable power and will survive the disability or incapacity of the
principal. Further, this power of attorney is irrevocable and a power coupled
with an interest; therefore, it will not be revoked by the death, dissolution or
termination of any Partner.
11.8 PARTITION. The Partners agree that no Partner, nor any successor in
interest to any Partner, will have the right, while this Agreement remains in
effect, to have any of the Partnership's property partitioned, or to file a
complaint or otherwise institute any suit, action, or proceeding at law or in
equity to have any of the Partnership's property partitioned. Further, each
Partner, on behalf of himself, his successors, heirs, and assigns hereby waives
any such right.
11.9 WAIVER OF RIGHT TO COURT DECREE OF DISSOLUTION. The parties agree that
irreparable damage would be done to the Partnership's good will and business
affairs if any Partner should bring an action in court to dissolve the
Partnership. Care has been taken in this Agreement to provide what the parties
feel is fair and just payment in liquidation of the Partnership interests of all
Partners. Accordingly, each party hereby waives and renounces his or her right
to a court decree of dissolution or to seek court appointment of a receiver
and/or liquidator for the Partnership, under any statutory, common law, or
regulatory rule, except as may be sought by the Partnership.
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11.10 AGREEMENT BINDING. This Agreement will be binding upon the next of
kin, heirs, executors, administrators, successors and assigns of the parties
hereto.
11.11 INVALID PROVISIONS. The invalidity or unenforceability of a particular
provision of this Agreement will not affect the other provisions hereof, and the
Agreement will be construed in all respects as if such invalid or unenforceable
provisions were omitted.
11.12 WAIVER. The failure to exercise any of the terms and conditions by the
parties will not be construed as a waiver of any other terms and conditions by
the parties, and, in addition, all terms and conditions hereof will be deemed to
be cumulative and the exercise of any term or condition by the parties will not
be deemed a waiver of any other right, and a failure to exercise any right will
not be deemed a waiver to exercise any other right at that time or at any other
time or times.
11.13 THIRD PARTY BENEFICIARIES. This Agreement does not create, and will
not be construed as creating, any rights enforceable by any person not a party
to this Agreement. In order to evidence their understanding of and agreement to
all the terms and conditions of this instrument, the parties have signed
multiple copies of this Agreement, each one of which, when signed by all the
parties, will be considered an original.
DATED: December 30, 1996.
GENERAL PARTNERS:
/S/ BERNARD M. TRAGER /S/ SHELLEY TRAGER KUSMAN
BERNARD M. TRAGER, SHELLEY TRAGER KUSMAN, LIMITED PARTNER
CO-MANAGING GENERAL PARTNER
/S/ STEVEN E. TRAGER /S/ SCOTT TRAGER
STEVEN E. TRAGER, SCOTT TRAGER, LIMITED PARTNER
CO-MANAGING GENERAL PARTNER
LIMITED PARTNERS: /S/ MARJORIE L. BASSLER VP&TD
PNC BANK KENTUCY, INC.
TRUSTEE OF THE BERNARD TRAGER TRUST
/S/ BERNARD M. TRAGER UNDER AGREEMENT
BERNARD M. TRAGER, LIMITED PARTNER DATED DECEMBER 23, 1985, LIMITED
PARTNER
/S/ JEAN S. TRAGER
JEAN S. TRAGER, LIMITED PARTNER /S/ STEVEN E. TRAGER
STEVEN E. TRAGER,
TRUSTEE OF THE STEVEN E. TRAGER
/S/ STEVEN E. TRAGER REVOCABLE TRUST UNDER AGREEMENT,
STEVEN E. TRAGER, LIMITED PARTNER DATED APRIL 3, 1995, LIMITED PARTNER
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/S/ SHELDON G. GILMAN /S/ SHELDON G. GILMAN
SHELDON G. GILMAN, SHELDON G. GILMAN,
TRUSTEE OF THE ANDREW KUSMAN TRUST, TRUSTEE OF THE BRETT KUSMAN TRUST,
DATED DECEMBER 27, 1989, LIMITED DATED JANUARY 2, 1992, LIMITED PARTNER
PARTNER
/S/ SHELDON G. GILMAN
/S/ SHELDON G. GILMAN, SHELDON G. GILMAN,
TRUSTEE OF THE MICHAEL KUSMAN TRUST, TRUSTEE OF THE EMILY TRAGER TRUST,
DATED DECEMBER 27, 1989, LIMITED DATED JUNE 1, 1992 LIMITED PARTNER
PARTNER
/S/ SHELDON G. GILMAN
SHELDON G. GILMAN,
TRUSTEE OF THE KEVIN TRAGER TRUST,
DATED DECEMBER 27, 1989, LIMITED
PARTNER
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<PAGE> 112
AMENDMENT NO. 1
TO
AGREEMENT OF LIMITED PARTNERSHIP
FOR
THE JAYTEE PROPERTIES LIMITED PARTNERSHIP
Section 11.2 of The Agreement of Limited Partnership for The Jaytee
Properties Limited Partnership, effective December 30, 1996, (the "Partnership
Agreement") provides that the Partnership may be amended from time to time upon
the written consent of the General Partners and the "Non-Family Member Partner."
The General Partners and the Non-Family Member Partner now deem advisable
amendments to the Partnership Agreement as set forth herein, effective as of
February 6, 1998.
The following Section is added to the Partnership Agreement:
6.8 FIDUCIARY DUTY OF PARTNERS. Notwithstanding anything herein to the contrary,
each of the Partners shall have a fiduciary duty of good faith, loyalty, and
fair dealing towards the Partnership and the other Partners. Accordingly, each
Partner is required to refrain from any activity which is or may be detrimental
to each Partner's or the Partnership's best interests or which interferes with
the objectives for which the Partnership has been organized.
In all other respects, the Partnership Agreement, as initially adopted
effective December 30, 1996, shall remain in full force and effect.
IN TESTIMONY WHEREOF, this Amendment has been executed, in multiple
counterparts, any one of which may be considered an original, February 6, 1998.
/S/ BERNARD M. TRAGER
Bernard M. Trager, General Partner
/S/ STEVEN E. TRAGER
Steven E. Trager, General Partner
/S/ SCOTT TRAGER
Scott Trager, Limited Partner ("Non-
Family Member Partner)
<PAGE> 113
EXHIBIT 99.6
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AGREEMENT OF
LIMITED PARTNERSHIP
FOR
TEEBANK FAMILY LIMITED PARTNERSHIP
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<PAGE> 114
TEEBANK FAMILY LIMITED PARTNERSHIP
TABLE OF CONTENTS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
ARTICLE PAGE
1. ESTABLISHMENT OF PARTNERSHIP................................................................................1
1.1 Formation and Controlling Law...................................................................1
1.2 Name............................................................................................1
1.3 Purposes........................................................................................1
1.4 Powers..........................................................................................2
1.5 Principal Place of Business.....................................................................2
1.6 Term............................................................................................2
1.7 Registered Agent................................................................................2
1.8 Nature of Partners' Interests...................................................................2
2. CAPITAL CONTRIBUTIONS; WITHDRAWALS; AND CAPITAL ACCOUNTS....................................................2
2.1 Continuation of Capital Accounts................................................................2
2.2 Units of Ownership Interests....................................................................2
2.3 Required Subsequent Capital Contributions.......................................................2
2.4 Additional Capital Contributions................................................................3
2.5 Liability of Limited Partners...................................................................3
2.6 Capital Accounts................................................................................3
2.7 Additions to Capital Accounts...................................................................3
2.8 Subtractions to Capital Accounts................................................................3
2.9 Withdrawal of Capital...........................................................................4
2.10 Interest on Capital Accounts and Contributions..................................................4
2.11 Restriction on Registration of Interest.........................................................4
3. PROFIT AND LOSS.............................................................................................4
3.1 Definitions of Net Profit and Net Loss..........................................................4
3.2 Allocation of Profits and Losses................................................................4
3.3 Allocations in Event of Transfer, Admission of New Partner, Etc.................................6
3.4 Definitions: Adjustment Dates; Operations Period..............................................6
3.5 Retention of Distributable Income as Capital Reserves...........................................6
4. DISTRIBUTIONS...............................................................................................6
4.1 Distribution Other Than Upon Winding-Up.........................................................6
4.2 Property Distributions..........................................................................6
4.3 Distributions Upon Winding-Up...................................................................7
5. ACCOUNTING..................................................................................................7
5.1 Books and Records...............................................................................7
5.2 Fiscal Year.....................................................................................7
5.3 Reports.........................................................................................7
5.4 Federal Income Tax Status and Elections.........................................................7
6. MANAGEMENT..................................................................................................8
6.1 Management by General Partners..................................................................8
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6.2 Appointment of Co-Managing General Partner......................................................9
6.3 Voting the Partnership's Republic Bancorp, Inc. Shares.........................................9
6.4 Liabilities of the General Partners............................................................10
6.5 Other Interests................................................................................10
6.6 Standard of Care of General Partners; Indemnification..........................................10
6.7 Limited Partners...............................................................................11
7. WITHDRAWAL.................................................................................................11
7.1 Restrictions on Withdrawal, Substitution and Transfer..........................................11
7.2 No Withdrawal by General Partners..............................................................11
7.3 Withdrawals by Limited Partners................................................................12
8. TRANSFERS; SUBSTITUTION; ADDITIONAL PARTNERS...............................................................12
8.1 Assignment of Limited Partner's Interest.......................................................12
8.2 Voluntary Transfers of Limited Partner's Interests.............................................12
8.3 Involuntary Transfers of Limited Partner Interests.............................................13
8.4 Determination of Value.........................................................................15
8.5 Payment of Purchase Price......................................................................15
8.6 Extension of Time for Payment of Purchase Price................................................16
8.7 Death or Incapacity of Limited Partner.........................................................16
8.8 Substitute Limited Partners....................................................................16
8.9 Transfers of General Partnership Interests.....................................................16
8.10 Incapacity of a General Partner................................................................17
8.11 Successor General Partner......................................................................18
8.12 Fiduciaries As Partners........................................................................18
8.13 Additional Partners............................................................................18
9. FEDERAL INCOME TAX MATTERS.................................................................................19
9.1 Distributive Shares............................................................................19
9.2 Elections......................................................................................19
9.3 Tax Matters Partner............................................................................19
10. DISSOLUTION AND WINDING-UP................................................................................19
10.1 Events Occasioning Dissolution.................................................................19
10.2 Winding-Up.....................................................................................19
10.3 Events Not Occasioning Dissolution.............................................................20
11. MISCELLANEOUS.............................................................................................20
11.1 Amendments.....................................................................................20
11.2 Notices........................................................................................20
11.3 No Delivery of Certificates....................................................................20
11.4 Governing Law..................................................................................20
11.5 Arbitration....................................................................................20
11.6 Power of Attorney..............................................................................21
11.7 Partition......................................................................................21
11.8 Waiver of Right to Court Decree of Dissolution.................................................22
11.9 Agreement Binding..............................................................................22
11.10 Invalid Provisions.............................................................................22
11.11 Waiver.........................................................................................22
11.12 Third Party Beneficiaries......................................................................22
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</TABLE>
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AGREEMENT OF
LIMITED PARTNERSHIP
THIS AGREEMENT OF LIMITED PARTNERSHIP is made and entered into by
those persons identified as General Partners and Limited Partners on Schedule A,
attached hereto and incorporated herein by reference. The General Partners and
the Limited Partners hereinafter identified are referred to as the "Partners."
The Partners desire to form a Limited Partnership (the "Partnership")
for the purposes set forth herein, and in consideration of their mutual
agreements, they agree as follows.
1. ESTABLISHMENT OF PARTNERSHIP
1.1 FORMATION AND CONTROLLING LAW.
1.1(a) This Limited Partnership is a continuation of The Jaytee
Properties Limited Partnership formed pursuant to a Certificate of Limited
Partnership filed with the Kentucky Secretary of State's office on December 30,
1996, and governed pursuant to a written limited partnership agreement dated
December 30, 1996.
1.1(b) The parties hereto will receive general and limited
partnership interests in Teebank Family Limited Partnership in the same
proportion as their interests in the Jaytee Properties Limited Partnership by
virtue of that certain Partnership Division Agreement dated May __, 1998 by and
between The Jaytee Properties Limited Partnership and Teebank Family Limited
Partnership (the "Division Agreement"). The ownership and proportions of the
general and limited partnership interests in Teebank Family Limited Partnership
will be listed on Schedule A.
1.1(c) Accordingly, the parties hereto hereby form this limited
partnership pursuant to the provisions of the Kentucky Uniform Limited
Partnership Act. The rights and duties of the Partners are as provided in the
Kentucky Uniform Limited Partnership Act except as modified by this Agreement.
The law of the State of Kentucky is to apply to all questions and matters
pertaining to this Agreement. The Partners will take all actions necessary or
appropriate to allow the Partnership to carry on its business in accordance with
the terms of this Agreement, and Kentucky law. Further, for Federal tax law
purposes, references are made to the Internal Revenue Code of 1986, as amended,
and such references are hereinafter to as the "Code."
1.2 NAME. The name of the Partnership is TEEBANK FAMILY LIMITED
PARTNERSHIP (the "Partnership") or such other name selected by the General
Partners as may be permitted by law. The Partnership will file such certificates
of fictitious name as may be required by law.
1.3 PURPOSES. The Partnership is formed for the purposes of effectuating
the division of The Jaytee Properties Limited Partnership pursuant to the terms
of the Division Agreement. The Partnership is being established as a Qualified
Family Partnership as defined in the Bank Holding Company Act. The activities of
the Partnership will be limited to those activities permitted for Qualified
Family Partnerships.
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<PAGE> 118
1.4 POWERS. The Partnership will have the power to do all things
necessary or desirable in the conduct of its business to the fullest possible
extent permitted by law.
1.5 PRINCIPAL PLACE OF BUSINESS. The principal place of business for the
Partnership is Oldham County, Kentucky and/or such other place or places as the
Partners may from time to time determine. The Managing or Co-Managing General
Partner will notify the Partners of the establishment of any office of the
Partnership in addition to, or replacement of, the principal office name herein
or any replacement thereof. The General Partners will maintain, at the
Partnership's principal office in Kentucky, those items referred to and required
by the Kentucky Uniform Limited Partnership Act Section 362.409.
1.6 TERM. The term of the Partnership will commence on the filing of a
Certificate of Limited Partnership in the office of the Secretary of State of
Kentucky and will continue until dissolved in accordance with the terms of this
Agreement regarding Dissolution and Winding-Up.
1.7 REGISTERED AGENT. The name and address of the Partnership's
registered agent, and the address of Partnership's registered office in the
State of Kentucky, is as follows:
Sheldon G. Gilman
462 South Fourth Avenue
Louisville, Kentucky, 40202
1.8 NATURE OF PARTNERS' INTERESTS. The interests of the Partners in the
Partnership will be personal property. All property owned by the Partnership,
whether real or personal, tangible or intangible, or mixed, will be deemed to be
owned by the Partnership as an entity, and no Partner, individually or
otherwise, will have any ownership interest in such property.
2. CAPITAL CONTRIBUTIONS; WITHDRAWALS; AND CAPITAL ACCOUNTS
2.1 CONTINUATION OF CAPITAL ACCOUNTS. The partners' capital accounts will
continue as established upon the Jaytee Properties Limited Partnership's books
and records, except that such capital accounts will be adjusted to reflect the
division of the Jaytee Properties Limited Partnership.
2.2 UNITS OF OWNERSHIP INTERESTS. A Partner's ownership interest may be
evidenced by Units of Ownership Interests as established and maintained on the
Partnership's books and records. Further, the transfer of a Partner's ownership
interest may be evidenced by the transfer of such Partner's Units of Ownership
Interests.
2.3 REQUIRED SUBSEQUENT CAPITAL CONTRIBUTIONS. Any General Partner whose
capital account has a deficit balance at the time of liquidation of such General
Partner's interest agrees to contribute to the capital of the Partnership an
amount of cash necessary to bring such General Partner's Capital Account up to
zero. Such amount will be paid to the Partnership by the later of the end of the
taxable year in question or 90 days after the date of the Partnership's
liquidation, and such amount will be available for payment to the Partnership's
creditors or for distribution to those Partners having positive Capital Account
balances.
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2.4 ADDITIONAL CAPITAL CONTRIBUTIONS.
2.4(a) No Partner will be required to make any capital
contribution in addition to that hereinabove required.
2.4(b) If additional contributions are necessary or appropriate,
then the Partners may make additional contributions in such amounts as necessary
in order for the Partners to maintain their proportionate percentage interest in
the Partnership. If not all of the Partners elect to make an additional
contribution, then the other Partners may make capital contributions for the
portion not contributed by those Partners who have elected not to make an
additional capital contribution.
2.5 LIABILITY OF LIMITED PARTNERS. Limited Partners will not have any
personal liability for Partnership debts, obligations or losses of the
Partnership in excess of the Limited Partner's obligation to make the
contribution to the Partnership as set forth in Schedule A of this Agreement.
2.6 CAPITAL ACCOUNTS.
2.6(a) A separate capital account ("Capital Account") will be
maintained for each General Partner and for each Limited Partner, and all
Capital Accounts will be maintained in accordance with the capital accounting
rules of Code Section 704(b), and the provisions of Treasury Department
Regulation Section 1.704-1(b)(2)(iv), and this Agreement will be so construed.
2.6(b) If a Partner transfers all or any part of such Partner's
interest in the Partnership, as provided and limited in this Agreement, then the
Capital Account of the transferor will become the Capital Account of the
transferee to the extent of the Partnership interest transferred.
2.7 ADDITIONS TO CAPITAL ACCOUNTS. Subsequent to the opening Capital
Account, a Partner's Capital Account will be increased by the following items:
(a) such Partner's cash contributions to the Partnership's capital; (b) the fair
market value, as agreed upon, of any property contributed to the capital of the
Partnership by a Partner (net of liability secured by such contributed property
that the Partnership is considered to assume or take subject to under Code
Section 752); (c) such Partner's share of the Partnership realized and
unrealized profits and any gains (whether or not any such items are exempt from
tax); (d) such Partner's share of income described in Code Section 705(a)(1)(B);
and (e) such other amounts that are required for the Capital Account to be
determined and maintained in accordance with Treasury Regulations.
2.8 SUBTRACTIONS TO CAPITAL ACCOUNTS. Subsequent to the opening Capital
Account, a Partner's Capital Account will be reduced by the following items:
2.8(a) Such Partner's share of the Partnership's realized and
unrealized losses (including expenditures described in Code Section 705(a)(2)(B)
or treated as an expenditure by reason of Treasury Regulation Section
1.704-1(b)(2));
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2.8(b) The amount of cash and the fair market value of property
distributed (net of any liabilities assumed by such Partner or to which the
distributed property is subject); and
2.8(c) Such other amounts tha are required for the Capital
Account to be determined and maintained in accordance with Treasury Regulations.
2.9 WITHDRAWAL OF CAPITAL. No Partner will be entitled to withdraw any
part of their capital contribution to the Partnership, or receive any
distributions from the Partnership, except as provided in this Agreement. No
Partner will be entitled to demand or receive any property from the Partnership
other than cash, except as otherwise in this Agreement.
2.10 INTEREST ON CAPITAL ACCOUNTS AND CONTRIBUTIONS. No Partner will be
entitled to interest on any capital contribution or on such Partner's Capital
Account.
2.11 RESTRICTION ON REGISTRATION OF INTEREST. Registration will be
restricted to the extent required so that the Partnership is not deemed to be a
"publicly traded partnership" under the Code. Partnership interests will only be
registered in the name of the beneficial owner. The Partnership will not be
bound to recognize any equitable or other claim to such interest on the part of
any other person (such as a broker, dealer, bank, trust company or clearing
corporation) which is acting as a nominee, agent or in some other representative
capacity, whether or not the Partnership will have knowledge thereof, except for
the following: (a) interests held by a guardian, custodian or conservator for
the benefit of a minor or incompetent; (b) interests held by a trust for the
benefit of a Partner or Partner's spouse, parent, parent-in-law, issue, brother,
sister, brother-in-law, sister-in-law, niece, nephew, cousin, grandchild or
grandchild-in-law; and (c) interests held by a fiduciary for other like
beneficiaries. An interest in the Partnership will only be traded in accordance
with the Department of the Treasury's rules and regulations then in effect which
set forth the parameters within which a partnership may act and not be deemed to
be a "publicly traded partnership" under the Code. In no event may an interest
in the Partnership be listed on an established securities exchange.
3. PROFIT AND LOSS
3.1 DEFINITIONS OF NET PROFIT AND NET LOSS. Profits and losses for any
Operations Period, as hereinafter defined, will be computed in the same manner
as the Partnership reports its income for Federal income tax purposes, except
that (i) income of the Partnership that is exempt from tax, and expenses that
are not deductible for tax purposes under the Code will be included in the
computation, and (ii) unrealized gain or loss will be taken into account as
provided herein. The principles of Treasury Regulation Section 1.704-1(b)(4)(i)
will be applied, when necessary, to prevent duplication or omission of Capital
Account adjustments, including, without limitation, those arising from deemed
sales as provided in this Agreement.
3.2 ALLOCATION OF PROFITS AND LOSSES.
3.2(a) Except as hereinafter provided, the Partnership's net
profits and losses for each Operations Period will be allocated to the Partners
on a pro rata basis based upon each Partner's
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ownership interests, as reflected by such Partner's Capital Account, to the
total of all Partners' ownership interests as reflected by all Capital Accounts.
3.2(b) For income tax purposes only, depreciation (cost
recovery) deductions, depletion deductions and gain or loss with respect to
assets contributed by a Partner will be allocated among the Partners so as to
take into account the difference between the adjusted basis of the asset at the
time of its contribution and the agreed value of the asset. An asset will be
considered contributed by a Partner if it has a basis in the hands of the
Partnership which is determined, in whole or in part, by reference to the basis
of an asset actually contributed by a Partner (or previously deemed contributed
by a Partner pursuant hereto).
3.2(c) Net losses for any Operations Period which would
otherwise be allocated with respect to a Partnership interest owned by a Limited
Partner and which would cause such Limited Partner to have an Adjusted Capital
Account Deficit, will instead be allocated pro rata among the General Partners.
3.2(d) If any Limited Partner receives an adjustment, allocation,
or distribution, described in Treasury Regulation Section
1.704-1(b)(2)(ii)(d)(4), (5), or (6), items of Partnership gross income will be
specifically allocated to such Limited Partner in an amount and manner
sufficient to eliminate any Adjusted Capital Account Deficit created by such
adjustments, allocation, or distributions as quickly as possible. These
provisions are intended to constitute a "qualified income offset" within the
meaning of Treasury Regulation Section 1.704-1(b)(2)(ii)(d) and will be
interpreted and implemented as provided therein.
3.2(e) After satisfaction of any allocations hereinabove
required, if there have been any net losses allocated to the General Partners,
as hereinabove provided, then the Partnership's net profit for an Operations
Period will be allocated pro rata among the General Partners until the General
Partners have received allocations of net profit equal in the aggregate to any
net losses previously allocated to them as hereinabove provided.
3.2(f) An "Adjusted Capital Account Deficit" exists with respect
to a Limited Partner if the Limited Partner's Capital Account, determined for
this purpose by reducing the Capital Account by the items described in Treasury
Regulation Section 1.704-1(b)(2)(ii)(d)(4), (5), and (6) and by increasing the
Capital Account by the amount described in Treasury Regulation Section
1.704-1(b)(2)(ii)(c) that the Partner is obligated to restore, is a negative
amount.
3.2(g) If there is a net decrease in the Partnership's Minimum
Gain, as provided by Treasury Regulation Section 1.704-2(b)(2), or Partner
Nonrecourse Debt Minimum Gain, as provided by Treasury Regulation Section
1.704-2(i)(3), during an Operations Period, each Partner will be allocated,
before any other allocations, items of income and gain for such Operations
Period, and subsequent Periods if necessary, an amount equal to such Partner's
share of the net decrease in the Partnership's Minimum Gain or Partner
Nonrecourse Debt Minimum Gain, as applicable, for such Operations Period;
provided that no such allocation will be required if any of the exceptions set
forth in Treasury Regulation Section 1.704-2(f) apply. It is intended that this
provision constitute a "MINIMUM GAIN CHARGEBACK" within the meaning of Treasury
Regulation Section 1.704-2.
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3.3 ALLOCATIONS IN EVENT OF TRANSFER, ADMISSION OF NEW PARTNER, ETC. In
the event of the transfer of all or any part of a Partner's Partnership
interest, as provided and limited by this Agreement, at any time other than the
end of a Fiscal Year, the admission of a new Partner or disproportionate capital
contributions, the transferring Partner's, new Partner's or continuing Partners'
shares of the Partnership's income, gain, loss, deductions and credits allocable
to such Partnership interest will be allocated between the transferor Partner
and the transferee Partner(s) in the same ratio as the number of days in such
Fiscal Year before and after the date of such event; provided that the General
Partners may treat the periods before and after such event as separate Fiscal
Years.
3.4 DEFINITIONS: ADJUSTMENT DATES; OPERATIONS PERIOD.
3.4(a) The "Adjustment Dates" of the Partnership will be the
date of dissolution of the Partnership and each date on which there is a
distribution in kind of property of the Partnership, a contribution of money or
other property (other than a DE MINIMIS amount) to the Partnership by a new or
existing Partner as consideration of an interest in the Partnership, or a
distribution of money (other than a DE MINIMIS amount) by the Partnership to a
retiring or continuing Partner as consideration for an interest in the
Partnership.
3.4(b) An "Operations Period" of the Partnership will be the
period beginning on the date hereof, the first day of a fiscal year or an
Adjustment Date (as the case may be) and ending on the earlier of the next
succeeding Adjustment Date or the last day of a fiscal year.
3.5 RETENTION OF DISTRIBUTABLE INCOME AS CAPITAL RESERVES. The General
Partners may elect to retain from the distributions of available cash any
amounts which, in the General Partners' judgment, are needed to provide reserves
and working capital for anticipated investments and operating expenses.
4. DISTRIBUTIONS
4.1 DISTRIBUTION OTHER THAN UPON WINDING-UP. The Managing or Co-Managing
General Partner, or the General Partner(s), if there are no Managing General
Partners, will determine in their sole discretion, whether distributions will be
made to any particular General or Limited Partner (including the Partner(s)
authorizing the distribution) or whether the Partnership's income will be
reinvested; provided, however, that such distributions will be made to each
Partner pro rata based upon the proportion of each Partner's ownership interests
to the total of all Partners' interests, determined as of the date of the
distribution. Distributions may only be cash, and the amount of cash
distributions will only be such amount which exceeds the reasonable working
reserves needed for the Partnership's operations.
4.2 PROPERTY DISTRIBUTIONS. If property, other than cash, is distributed
to a Partner, the fair market value of such property will be used for purposes
of determining the amount of such distribution. The difference, if any, of such
fair market value over (or under) the value at which such property is carried on
the books of the Partnership will be credited or charged to the Capital Accounts
of the Partners in accordance with the ratio in which the partners share in the
gain and loss
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<PAGE> 123
of the Partnership. The fair market value of the property will be determined by
the Managing or CoManaging General Partners or the General Partners if there are
no Managing Partners.
4.3 DISTRIBUTIONS UPON WINDING-UP. Upon the dissolution and winding up of
the Partnership, the assets of the Partnership will be distributed in the
following order of priority: (a) to the payment of the debts and liabilities of
the Partnership and the expenses of winding-up, including the establishment of
any reserves to pay any anticipated and contingent liabilities or obligations
which the Managing or Co-Managing or General Partners, as the case may be, in
their sole discretion, deem appropriate. Any such reserves will be charged
against the Partners' Capital Accounts on a pro rata based upon the proportion
of each Partner's ownership interests to the total of all Partners' interests,
which reserve, prior to payment of such liabilities and obligations, will be
placed in the hands of an escrow agent for such period and upon such terms as
the General Partners will determine; (b) to repay any loans to the Partnership
by a Partner, including any deferred payment obligation to a Partner or a
Partner's personal representative as the result of a redemption by the
Partnership of such Partner's interest; (c) to the Partners in an amount equal
to any credit balance in their Capital Accounts (as a negative Capital Account
balance will be considered a loan from the Partnership to the Partner for the
purpose of determining distributions upon dissolution), so that the Capital
Account of each Partner will be brought back to zero; and (d) the balance, if
any, will be distributed to the Partners in an amount equal to each Partner's
percentage interest in the Partnership.
5. ACCOUNTING
5.1 BOOKS AND RECORDS. The General Partners will maintain the general
accounts of the Partnership. The books of the Partnership will be kept on a
basis consistent with the provisions of this Agreement and determined in the
same manner as the Partnership computes its income (loss) for Federal income tax
purposes; provided, however, that the Partnership will not use the installment
method for book purposes. Such books and records, and the items referred to in
Kentucky Uniform Limited Partnership Act Section 362.409(1) will be open to the
inspection and examination of all Partners, in person or by their duly
authorized representatives, at reasonable times. The books of the Partnership
will be maintained using a method of accounting as determined by the General
Partners.
5.2 FISCAL YEAR. The fiscal year of the Partnership will be the calendar
year.
5.3 REPORTS. As soon as practicable after the close of each fiscal year
the partnership will furnish each partner with a copy of the partnership's
financial statements for such year and with a statement of such partner's
capital account, as reflected on the books of the partnership. each partner will
also be supplied with all information with respect to the partnership required
in connection with the preparation of such partner's tax returns.
5.4 FEDERAL INCOME TAX STATUS AND ELECTIONS.
5.4(a) This Limited Partnership will constitute a Partnership for
Federal income tax purposes, and the General Partners will report all items of
income, gain, loss, deduction and credit as a Partnership and in accordance with
the Partnership taxation rules pursuant to the Internal Revenue Code and
Treasury Regulations.
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5.4(b) All elections required or permitted to be made by the
Partnership under the Code will be made by the General Partners in such manner
as will, in their opinion, be most advantageous to a majority in interest of the
Limited Partners.
6. MANAGEMENT
6.1 MANAGEMENT BY GENERAL PARTNERS. The business affairs of the
Partnership will be managed by the General Partners. All decisions of the
General Partners, including but not limited to Partnership distributions, will
be made in accordance with the decision of the General Partner or General
Partners holding a majority of the General Partner interests. Deadlock between
the General Partners on any issue will be deemed a disputed issue for purposes
of this Agreement and will be resolved through arbitration as provided in this
Agreement. The General Partners will have all necessary powers to carry out the
purposes of the Partnership, and in addition to the authority given to the
General Partners by this Agreement and by law, the General Partners will have
the specific authority to take the following actions.
6.1(a) The General Partners will have the authority, at any time,
and from time-to-time, to sell, exchange, lease and/or transfer legal and
equitable title to the Partnership property upon such terms and conditions and
for such considerations as the General Partners consider reasonable. The
execution of any document or conveyance or lease by a General Partner will be
sufficient to transfer complete legal and equitable title to the interest
conveyed without the joiner, ratification, or consent of the Partners. No
Purchaser, tenant, transferee or obligor will have any obligation whatever to
see to the application of payments
made to the General Partners.
6.1(b) The General Partners will have the authority to retain,
without liability, any and all property in the form it is received, without
regard to its productivity or the proportion that any one asset or class of
assets may bear to the whole. The General Partners will not have liability or
responsibility for loss of income from or depreciation in the value of the
property that was retained in the form in which the General Partners received
it.
6.1(c) The General Partners will have the authority to employ
such consultants and professional help as the General Partners consider
necessary to assist in the prudent management, acquisition, leasing and transfer
of the Partnership property, and to obtain such policies of insurance as the
General Partners consider reasonably necessary to protect the Partnership
property from loss or liability.
6.1(d) The General Partners will be permitted to register or take
title to Partnership assets in the name of the Partnership or as trustee, with
or without disclosing the identity of the principal, or to permit the
registration of securities in "street name" under a custodial arrangement with
an established securities brokerage firm, trust department or other custodian.
6.1(e) Insofar as the law will permit, a General Partner who
succeeds another will be responsible only for the property and records delivered
by or otherwise acquired from the preceding General Partner, and may accept as
correct the accounting of the preceding General Partner without
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duty to audit the accounting or to inquire further into the administration of
the predecessor, and without liability for a predecessor's errors and omissions.
6.1(f) No one serving as a General Partner will be required to
furnish a fiduciary bond or other security as a prerequisite to such Partner's
service.
6.2 APPOINTMENT OF CO-MANAGING GENERAL PARTNER. The General Partners, if
there is more than one General Partner, may appoint one or more of the General
Partners to serve as the Managing General Partner or Co-Managing General
Partner. As between the General Partners, either of the Co-Managing General
Partners will have the right to make all decisions, execute all documents, and
take all action on behalf of the Partnership.
6.2(a) The Co-Managing General Partners will be Bernard Trager
and Steven E. Trager. If either Bernard Trager or Steven E. Trager ceases to be
a General Partner, resigns as a CoManaging General Partner, or becomes ill or
incapacitated, then the remaining Co-Managing General Partner will become the
sole Managing General Partner and will be authorized and empowered to act for
the Partnership and, in his name and place, take all actions and do all things
as deemed necessary and appropriate.
6.2(b) Any person dealing with the Partnership may rely upon the
signed and certified affidavit of the Managing or Co-Managing General Partner
which states:
"On my oath, and under the penalties of perjury,
I swear that I am the duly elected and authorized Managing
(Co-Managing) General Partner of the
_____________________________(name of limited
partnership); I certify that I have not been removed as
the Managing (Co-Managing) General Partner and have the
authority to act for and bind
_____________________________ (name of limited
partnership) in the transaction of the business which this
affidavit is given as affirmation of my authority."
6.2(c) The Co-Managing General Partners will be entitled to a
reasonable annual compensation for services rendered to the Partnership, this
compensation to be measured by the time required in the administration of the
Partnership, the value of property under administration, and the responsibility
assumed in discharge of the duties of office. A General Partner also will be
entitled to a reimbursement for all reasonable and necessary business expenses
incurred in the administration of the Partnership.
6.3 VOTING THE PARTNERSHIP'S REPUBLIC BANCORP, INC. SHARES.
6.3(a) If the Partnership owns any shares of Republic Bancorp,
Inc. ("Republic") stock, then the Managing or Co-Managing General Partner's
right to vote the Republic shares will be limited as herein provided. The right
to direct the voting of Republic stock will be vested in a committee composed of
at least three persons to be known as the "Voting Committee." The Voting
Committee will consist of at least one limited partner. The initial members of
the Voting Committee who will serve as such until their successors are appointed
and assume such position on the
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Committee will be Bernard M. Trager, Steven E. Trager, Sheldon G. Gilman, and
Scott Trager. In the event any person who is then serving as a member of the
Voting Committee resigns or is otherwise unable to continue to serve as such,
then the remaining members of the Voting Committee will appoint the successor
Voting Committee member.
6.3(b) The Voting Committee's right to direct the Managing or
Co-Managing General Partner in voting Republic shares applies to each matter
which is brought before an annual or special meeting of the shareholders of
Republic stock. Before each such shareholders' meeting the Managing or
Co-Managing General Partner will provide the Voting Committee with copies of all
proxy solicitation materials pertaining to the exercise of such rights, and such
materials will contain all the information distributed to other Republic
shareholders. The Voting Committee will then determine, by majority vote, how to
direct the Managing or Co-Managing General Partner to vote the shares of
Republic stock.
6.3(c) The Voting Committee's decisions will be binding and
conclusive on the Managing and/or Co-Managing Partner, who will vote all shares
of Republic stock in accordance with the directions of the Voting Committee.
6.4 LIABILITIES OF THE GENERAL PARTNERS. The General Partners and their
agents will not be liable, responsible or accountable in damages or otherwise,
to the Partnership or to any of the Partners for any acts performed or omitted
to be performed in good faith. Such good faith errors will mean mistakes of
judgment or losses due to such mistakes or to the negligence or bad faith of any
employee, broker, advisor or other agent or representative of the Partnership
(provided that such agent or representative was selected with reasonable care).
The General Partners may consult with legal counsel selected by the Co-Managing
General Partners and will have no liability for the consequences of any action
or omission resulting from good faith reliance on the advice of such counsel.
The exculpation provided in this section shall apply to the agents, employees
and other legal representatives of each General Partner.
6.5 OTHER INTERESTS. The General Partners and the Limited Partners may
engage in or possess interests in other business ventures of every nature and
description, whether or not competitive with the business of the Partnership,
independently or with others, and neither the Partnership nor any Partner will,
by virtue of this Agreement, have any rights in or to such other ventures or the
income or profits derived therefrom.
6.6 STANDARD OF CARE OF GENERAL PARTNERS; INDEMNIFICATION.
6.6(a) A General Partner will not be liable, responsible or
accountable in damages to any Partner, or the Partnership, for any act or
omission on behalf of the Partnership performed or omitted by such General
Partner in good faith and in a manner reasonably believed by such General
Partner to be within the scope of the authority granted to the General Partners
by this Agreement and in the best interests of the Partnership, unless such
General Partner has been guilty of gross negligence or willful misconduct with
respect to such acts or omissions.
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6.6(b) The Partnership will indemnify the General Partners for,
and hold the General Partners harmless from, any loss or damage incurred by the
General Partners by reason of any act or omission so performed or omitted by the
General Partners (and not involving gross negligence or willful misconduct).
6.7 LIMITED PARTNERS. Except for the voting rights that may be held by a
Limited Partner who is also a member of the Voting Committee, as provided above,
no person in such person's capacity as a Limited Partner will have any voice in
or take part in the management of the business or affairs of the Partnership or
have the right or authority to act for or bind the Partnership. The Limited
Partners will not be liable for any of the losses, debts or liabilities of the
Partnership in excess of their respective Capital Contributions and any profits
allocated to their Capital Accounts, except as otherwise expressly provided by
law. General Partners may also be Limited Partners.
7. WITHDRAWAL.
7.1 RESTRICTIONS ON WITHDRAWAL, SUBSTITUTION AND TRANSFER. This Limited
Partnership was formed by a family, a closely-held group, and they know, depend
upon, and trust one another, and have either surrendered certain management
rights in exchange for limited liability (as in the case of Limited Partners) or
assumed sole management responsibility and risk (as in the case of a General
Partner), based upon their relationship and trust. Furthermore, as Capital is
also material to the business and investment objectives of the Partnership and
its federal tax status, any unauthorized substitution or transfer of a Partner's
interest in the Partnership could create a substantial hardship on the
Partnership, jeopardize its Capital base, and adversely affect its tax
structure. These restrictions on substitution and transfer are intended merely
as a method to protect and preserve the existing relationships based upon the
trust of the Partners and the Partnership's capital and its financial ability to
continue.
7.2 NO WITHDRAWAL BY GENERAL PARTNERS.
7.2(a) No General Partner may withdraw from the Partnership
before its dissolution.
7.2(b) Any General Partner, who, notwithstanding the prohibition
on withdrawal as set forth above, gives written notice of such Partner's
intention to withdraw as provided in ss. 362.463 of the Kentucky Uniform Limited
Partnership Act will be entitled to a distribution equal to the lesser of the
following:
7.2(b)(1) The General Partner's Capital Account as
of the close of the month following the date the other Partners
receive the withdrawing General Partner's notice of withdrawal
("Effective Date"). Such Capital Account will be adjusted to reflect
such General Partner's share of the profit or loss of the Partnership
through the Effective Date and contributions by, and distributions to,
such General Partner since the close of the Partnership's last Fiscal
Year to the extent such adjustments have not already been reflected in
the Capital Account of such General Partner on the Partnership's
books; or
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7.2(b)(2) The fair market value of his General
Partner interest as determined hereinafter.
7.2(b)(3) Further, such distribution will be reduced
by any damages attributable to such Partner's breach of this
Agreement.
7.3 WITHDRAWALS BY LIMITED PARTNERS. No Limited Partner, including
those Limited Partners who are also General Partners, may withdraw from the
Partnership prior to its dissolution.
8. TRANSFERS; SUBSTITUTION; ADDITIONAL PARTNERS
8.1 ASSIGNMENT OF LIMITED PARTNER'S INTEREST. The Limited Partners may not
sell, assign, transfer, pledge, hypothecate, or otherwise dispose of all or any
portion of their Limited Partner interests, except as provided below. Any
purported assignment, transfer, etc. which is prohibited by this Agreement will
be null and void and of no force or effect.
8.2 VOLUNTARY TRANSFERS OF LIMITED PARTNER'S INTERESTS.
8.2(a) If any Limited Partner ("TRANSFEROR L.P.") receives a BONA
FIDE written offer that the Transferor L.P. desires to accept ("TRANSFEREE
OFFER") from any person ("TRANSFEREE") to purchase all, but not less than all,
of the Transferor L.P.'s Limited Partnership interests, then, before any
transfer of the Transferor L.P.'s Limited Partner interests ("TRANSFEROR
INTEREST"), the Transferor L.P. will give the other Partners and the Partnership
written notice ("TRANSFER NOTICE") containing the following:
8.2(a)(1) the proposed Transferee's identity;
8.2(a)(2) a true and complete copy of the Transferee
Offer;
8.2(a)(3) and the Transferor L.P.'s offer ("OFFER") to
sell the Transferor Interest to the other Partners or to the
Partnership, as the case may be, at the lower of the Transferor
Interests' fair market value as determined herein or the price in the
Transferee Offer and at the other terms and conditions set forth in
the Transferee Offer.
8.2(b) Each of the other Partners will have the first option to
purchase the Transferor Interest in accordance with their percentages of
Partnership Interests in the Partnership or such other percentages as they may
unanimously agree upon. If not all of the other Partners elect to purchase, then
those Partners electing to purchase will have the right to purchase the balance
of the Transferor Interest in accordance with their respective percentages of
Partnership Interests among themselves, or in such other percentages as they may
unanimously agree.
8.2(c) If the other Partners fail to purchase all of the
Transferor Interest, then the Partnership will have the right to purchase the
remaining balance of the Transferor Interest.
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8.2(d) The Offer will be and remain irrevocable for 60 days
following the date the Transfer Notice is properly delivered to the other
Partners and to the Partnership ("OFFER PERIOD"). At any time during the Offer
Period, the other Partners or the Partnership or both may accept the Offer by
notifying the Transferor L.P. in writing. If the Offer is accepted, then the
parties will fix a closing date for the purchase, which will not be earlier than
ten, nor more than 90, days after the expiration of the Offer Period.
8.2(e) If the Offer is accepted by any other Partners or the
Partnership or both, as the case may be, the purchasing Partners or Partnership
may elect to pay the purchase price either in accordance with the terms and
conditions set forth in the Offer or in accordance with the terms and conditions
of this Agreement.
8.2(f) If all of the Transferor Interest is not purchased by
either the other Partners or the Partnership, then the Transferor L.P. will be
free, for a period of 30 days after the expiration of the Offer Period ("FREE
TRANSFER PERIOD") to transfer the Transferor Interest to the Transferee for the
same or greater price and on the same terms and conditions as set forth in the
Transferee Offer. If the Transferor L.P. does not transfer the Transferor
Interest within the Free Transfer Period, the Transferor L.P.'s right to
transfer the Transferor Interest pursuant to the terms and conditions set forth
herein will expire.
8.2(g) Any transfer by the Transferor L.P. after the last day of
the Free Transfer Period or without the strict compliance with the terms,
provisions, and conditions of this Agreement will be null and void and of no
force and effect whatsoever.
8.2(h) Notwithstanding anything in this Agreement to the
contrary, Limited Partners may make gifts of their Limited Partnership Interests
to Permitted Transferees. For purposes of this Agreement, "PERMITTED TRANSFEREE"
means (i) any other Partner; (ii) the Partner's estate, spouse, lineal
ancestors, descendants by birth or adoption, siblings; (iii) charitable
organizations; and (iv) trusts for the exclusive benefit of a Partner or trusts
for any of the other foregoing entities or individuals. Upon compliance with the
requirements for admission as a substitute Limited Partner as set forth this
Agreement, the donee may become a Substitute Limited Partner with respect to the
Partnership Interests transferred.
8.3 INVOLUNTARY TRANSFERS OF LIMITED PARTNER INTERESTS.
8.3(a) If any Limited Partner's Partnership Interest is sought
to be transferred by any involuntary means (other than death or adjudication of
incompetency or insanity), including, but not limited to, attachment,
garnishment, execution, bankruptcy, insolvency, levy or seizure, then such
Limited Partner's Partnership Interest will be purchased as follows.
8.3(b) Each of the other Partners will have the first option to
purchase in accordance with their percentages of Partnership Interests in the
Partnership or such other percentages as they may unanimously agree upon. If not
all of the other Partners elect to purchase, then those Partners electing to
purchase will have the right to purchase the balance of the offered Partnership
Interest
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in accordance with their respective percentages of Partnership Interests among
themselves, or in such other percentages as they may unanimously agree.
8.3(c) If the other Partners fail to purchase all of the interest
sought to be involuntarily transferred, then the Partnership will have the right
to purchase the remaining balance of such Partnership Interest.
8.3(d) The option to the other Partners and to the Partnership to
purchase the interest sought to be involuntarily transferred is hereinafter
referred to as the "INVOLUNTARY OPTION."
8.3(e) The Involuntary Option period of the other Partners and
the Partnership will commence upon their receipt of actual notice of the
attempted involuntary transfer and will terminate, if not exercised, 60 days
thereafter, unless sooner terminated by written refusal of the other Partners.
An election to exercise any Involuntary Option will be made in writing and
transmitted to the Limited Partner whose Partnership Interest is sought to be
involuntarily transferred.
8.3(f) Upon the failure or neglect of the other Partners or the
Partnership to purchase, in accordance with this Section, all of the Partnership
Interest sought to be involuntarily transferred, the unpurchased Partnership
Interest may be involuntarily transferred, but such transferee may not become a
Substitute Limited Partner unless the requirements for becoming a Substitute
Limited Partner as set forth in this Agreement are satisfied. Nevertheless, such
transferee will be subject to this Agreement's terms and conditions.
8.3(g) If, notwithstanding the provisions of this Agreement, any
Partnership Interest is transferred by involuntary means without compliance with
the terms and conditions of this Agreement, then the Involuntary Option will be
to purchase such Partnership Interest from the transferee(s).
8.3(h) The purchase price for all of a Limited Partner's
Partnership Interests to be purchased pursuant to the exercise of the
Involuntary Option will be the Limited Partner's Capital Account as of the close
of the month following the exercise of the Involuntary Option ("EFFECTIVE
DATE"). Such Capital Account will be adjusted to reflect such Limited Partner's
share of the profit or loss of the Partnership through the Effective Date and
contributions by, and distributions to, such Limited Partner since the close of
the Partnership's last Fiscal Year to the extent such adjustments have not
already been reflected in the Capital Account of such Limited Partner on the
Partnership's books. The purchaser will pay the purchase price pursuant to the
terms of this Agreement.
8.3(i) The closing date will occur on or before 30 days following
the exercise of the Involuntary Option. At the closing, the selling Limited
Partner will execute such instruments of assignment as shall be required by the
purchasing Partner(s) or the Partnership, so as to transfer the Partnership
Interests being sold free and clear of all liens, claims, security interests,
and encumbrances whatsoever. If the selling Limited Partner fails to execute
such documents, then either the Managing or Co-Managing General Partner may do
so pursuant to the power of attorney granted them in this Agreement.
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8.4 DETERMINATION OF VALUE.
8.4(a) The value of a Partner's Limited or General Partner
interest, will be such interest's Fair Market Value. "Fair Market Value" will be
determined by the General Partners. If the withdrawing or transferor Partner
objects to the General Partners' determination of Fair Market Value, then such
value will be determined by an appraiser jointly chosen by the withdrawing or
transferor Partner and the General Partners. If the parties cannot agree on the
choice of one appraiser, then the General Partners will appoint an appraiser,
and the withdrawing or transferor Partner will appoint another appraiser. Each
party will bear the cost of their own appraisal. If the resulting appraisal
values are different and the higher appraisal value is less than 110 percent of
the lower appraisal, then the two appraisals will be averaged, and the averaged
value will be the deemed fair market value for the purposes of this Agreement.
If the higher appraisal value is more than 110 percent of the lower appraisal
value, then the Partnership's certified public accountant will appoint a third
appraiser and submit copies of the independent appraisals to the appraiser
selected by the accountant. The third appraiser will review both appraisals and,
on the basis of a review of the appraisals, will select the one appraisal which,
in the opinion of the third appraiser, is most correct. The decision of the
third appraiser will be final and the costs of such will be borne by the
Partnership and will be accrued as a liability of the Partnership.
8.4(b) Adjustments to Fair Market Value will be made as follows:
8.4(b)(1) To reflect any distributions made in the
regular course of business, between the Termination Date and the date
the Partnership begins payments in redemption of the Partnership
interest;
8.4(b)(2) To reflect the effect of the redemption
of the Partnership interest on the withdrawing Partner's interest, the
value of the total Partnership interests outstanding and the Capital
Account balances represented by the Partnership interests not
redeemed; and
8.4(b)(3) For purposes of determining the Fair Market
Value of a General Partner's interests, to reflect an assumption, for
appraisal purposes, that the withdrawal rights afforded a General
Partner in this Agreement do not exist.
8.5 PAYMENT OF PURCHASE PRICE. The purchase price for a Partner's interest
will be paid by the purchaser(s) in 120 equal monthly principal installments (or
the remaining term of the Partnership if less than 120 months) plus interest on
the unpaid principal balance at a rate equal to the prime rate charged by the
bank where the Partnership conducts its banking business. The interest rate will
be adjusted every six months. The first monthly installment will be due and
payable 120 days after the determination of value for the Partner's interest.
The purchaser(s) may prepay the entire unpaid principal balance at any time. In
the event of non-payment of any installment, the withdrawing Partner or the
deceased Partner's personal representative, as the case may be, may declare the
remaining payments in default and thereby require the immediate payment of the
entire unpaid principal balance with all accrued interest.
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8.6 EXTENSION OF TIME FOR PAYMENT OF PURCHASE PRICE. Notwithstanding the
above, neither the Partnership nor the Partners will be required to make
payments for the purchase of more than one terminated or deceased Partner's
interest at any one time. If during the period of time in which the Partners or
the Partnership are making payments to purchase a Partner's interest, an event
occurs which would require the Partners or the Partnership to purchase an
additional Partner's interest, then the payments for such Partner's interest
will become due and payable 30 days after the completion of payments for the
purchase of the previously withdrawing or transferring Partner's interests. The
purchasing party will issue a promissory note setting forth the delayed payment,
with interest accruing thereon in accordance with these provisions. These
provisions only alter the timing of payments for a Partner's interest and do not
affect the determination of the Termination Date, the amount of the Purchase
Price, and all other rights and obligations provided herein.
8.7 DEATH OR INCAPACITY OF LIMITED PARTNER. The death, adjudication or
incompetency, or insanity of a Limited Partner will not dissolve the
Partnership. In the event of such death, adjudication of incompetency, or
insanity, the legal representative or legal successor of the deceased or
incompetent Limited Partner who has legal control of or inherits his Limited
Partner interests will be deemed the assignee of the entire Limited Partner
interests of the deceased or incompetent Limited Partner and may be admitted as
a Substitute Limited Partner if the requirements for becoming a Substitute
Limited Partner as set forth in this Agreement are satisfied. The estate of the
deceased or incompetent Limited Partner will be liable for any of his
liabilities and obligations to the Partnership and in his capacity as Limited
Partner.
8.8 SUBSTITUTE LIMITED PARTNERS. No assignee or transferee of a Limited
Partner's interest in the Partnership will have the right to become a substitute
Limited Partner unless all of the following conditions are satisfied:
8.8(a) The General Partners have received, in form and substance
satisfactory to them, a written instrument executed by the transferor, which
instrument transfers to the transferee all or part of the transferor's
Partnership interests;
8.8(b) The transferor and transferee execute and acknowledge
such other instruments as the General Partners may, in the General Partner's
sole discretion deem necessary or desirable to effect such admission, including
the transferee's written acceptance and adoption of this Agreement's terms and
conditions;
8.8(c) The assignee/transferee has paid or agreed to pay, as the
General Partners may determine, all reasonable expenses relating to such
admission; and
8.8(d) All of the General Partners have unanimously consented in
writing to the assignee's/transferee's admission as a substitute Limited
Partner.
8.9 TRANSFERS OF GENERAL PARTNERSHIP INTERESTS.
8.9(a) The General Partners may not sell, assign, transfer,
pledge, hypothecate, encumber, or otherwise dispose of their General Partner
interests, without the prior written consent
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of the other General Partner(s) and a majority of the Limited Partners. Any
purported assignment, transfer, etc. in contravention of this Agreement will be
null and void and of no force or effect.
8.9(b) Notwithstanding anything in this Agreement to the
contrary, in the event of the General Partner's death, the decedent's General
Partner interests will pass to the General Partner's estate (executor, personal
representative, administrator, trustee or assignee). However, the General
Partner's estate will only be a transferee of the General Partner interest and
may only become a substitute General Partner if the requirements for becoming a
Substitute General Partner, as set forth herein, are satisfied.
8.9(c) The transferee of a General Partner interest may not be
admitted as a substitute General Partner without the written consent of all the
General Partners. If there are no other General Partners, then such transferee
may be admitted only with the written consent of a majority of the Limited
Partnership interests.
8.9(d) Further, the transferee must have approved and adopted
all of the provisions of this Agreement, as the same may have been amended,
which approval and adoption may be evidenced in such manner as is required by
the General Partners.
8.9(e) If the transferee does not receive the necessary consent
of the General or Limited Partners, as the case may be, but otherwise satisfies
the requirements of this Agreement, such General Partner interests will be
deemed Limited Partner interests in the hands of the transferee, and such
transferee will be deemed admitted only as a substitute Limited Partner with
respect thereto, and will not be deemed a General Partner for any purposes.
8.10 INCAPACITY OF A GENERAL PARTNER
8.10(a) At the commencement of this Partnership, there will be
two General Partners, Bernard Trager and Steven E. Trager, with both General
Partners being Co-Managing General Partners. In the event of a Co-Managing
General Partner's illness or incapacity, the remaining CoManaging General
Partner will be authorized and empowered to act for the partnership as the
Managing General Partner, and in his name and place take all actions and do all
things as a Managing General Partner.
8.10(b) In the event a Co-Managing General Partner has ceased to
serve or is unable to serve, by reason of death, incapacity, or absence, the
other Managing General Partner will have the right and authority to execute an
amendment to the Certificate of Limited Partnership, as attorney-in-fact for the
withdrawing General Partner.
8.10(c) If any Partner is an individual person, then any person
acting under a durable power of attorney or Letters of Guardianship or Committee
may exercise all of the Partner's rights and voting authority for and on behalf
of his or her principal and will be entitled to receive any distributions from
the Partnership for and on behalf of the disabled Partner.
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8.11 SUCCESSOR GENERAL PARTNER. Notwithstanding anything in this Agreement
to the contrary, upon the death or incapacity of Bernard Trager, Jean Trager
will become a General Partner by converting one percent of her then outstanding
Limited Partner interests into a one percent General Partner interest. If Jean
does not then own any Limited Partner interests, the Partnership will issue to
her a one percent General Partner interest under the terms and conditions of
this Agreement governing the issuance of Additional Partnership Interests. Jean
will execute this Agreement as a General Partner promptly after her admission as
such. Further, Jean will have no liability for debts and obligations of the
Partnership that were outstanding on the date when she becomes a General
Partner, except to the extent provided under the Kentucky Uniform Limited
Partnership Act.
8.12 FIDUCIARIES AS PARTNERS.
8.12(a) FIDUCIARY CAPACITY. A Partner may own one or more interests
in a fiduciary capacity, such as a trustee under a trust agreement, as an
executor or a personal representative of an estate, or as a custodian. Except as
hereinafter provided, such fiduciary will have no interest or obligation
individually with respect to any such interests, but will be considered as
acting solely in such fiduciary capacity. If a Partner acting in a fiduciary
capacity ceases to act as such, the successor fiduciary shall be a Partner in
the same fiduciary capacity with the same rights and obligations as the
predecessor fiduciary. A person may be a Partner in an individual capacity and a
Partner in one or more fiduciary capacities.
8.12(b) REVOCABLE TRUSTS. An individual Partner that holds his or
her interests as trustee under a Revocable Trust that has not been admitted as a
Partner will be considered to have the same duties and responsibilities to the
Partnership that such individual would have if he or she held the interests
individually. The Trust shall be admitted as a Partner upon the approval of the
General Partners and upon approval and adoption of all of the provisions of this
Agreement, as the same may have been amended, which approval and adoption may be
evidenced in such manner as is required by the General Partners.
8.13 ADDITIONAL PARTNERS.
8.13(a) Additional Partnership interests may be issued and sold by
the General Partners to any person including, but not limited to, a natural
person, trust, corporation, partnership or other association, so long as such
Partnership interest is in accordance with the requirements for a Qualified
Family Partnership, for fair market value as determined by the General Partners
using their reasonable business judgment, and under such terms as deemed
advisable by the General Partners. Admission of any Partner will not be a cause
of dissolution.
8.13(b) The Partnership will admit any New Partners upon their
approval and adoption of all of the provisions of this Agreement, as the same
may have been amended, which approval and adoption may be evidenced in such
manner as is required by the General Partners.
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9. FEDERAL INCOME TAX MATTERS
9.1 DISTRIBUTIVE SHARES. For purposes of Subchapter K of the Internal
Revenue Code, the distributive shares of the Partners of each item of
Partnership taxable income, gains, losses, deductions or credits for any Fiscal
Year will be in the same proportions as their respective shares of the net
income or net loss of the Partnership allocated to them pursuant to the terms of
this Agreement. Notwithstanding the foregoing, to the extent not inconsistent
with the allocation of gain provided for herein, gain recognized by the
Partnership which represents ordinary income by reason of recapture of
depreciation or cost recovery deductions for Federal income tax purposes will be
allocated to the Partner (or the Partner's successor-in-interest) to whom such
depreciation or cost recovery deduction to which such recapture relates was
allocated.
9.2 ELECTIONS. The election permitted by Code Section 754, and any
other elections required or permitted to be made by the Partnership under the
Code, will be made by the Co-Managing General Partner in such Co-Managing
General Partner's sole and absolute discretion.
9.3 TAX MATTERS PARTNER. The General Partners will from time to time
designate a Tax Matters Partner pursuant to Code Section 6231(a)(7).
10. DISSOLUTION AND WINDING-UP
10.1 EVENTS OCCASIONING DISSOLUTION. The Partnership will dissolve and
terminate upon the occurrence of any of the following events, whichever shall
first occur:
10.1(a) The occurrence of an event of withdrawal by a General Partner
under Section 362.445 of the Kentucky Uniform Limited Partnership Act; provided,
however, if there is a remaining General Partner such remaining General Partner
will be obligated to continue the Partnership. Further, in the event there are
no remaining General Partners, then within 90 days of such event of withdrawal,
the Limited Partners, if they own more than 50 percent of the outstanding
partnership interests (excluding any Limited Partnership interests held by a
General Partner(s) whose withdrawal gave rise to the dissolution) may, by
unanimous written consent, agree to the appointment of a successor General
Partner, effective as of the date of withdrawal of a General Partner(s).
10.1(b) December 31, 2036;
10.1(c) The written consent of all the Partners to dissolve the
Partnership;
10.1(d) Subject to the Partners' waiver of the right to seek
judicial dissolution, an entry of a decree of judicial dissolution otherwise
occurring under the Kentucky Uniform Limited Partnership Act.
10.2 WINDING-UP. The Partnership will be allowed one year from the date of
any event occasioning dissolution for the winding-up of its affairs and shall be
allowed such additional time as may be reasonable for the orderly sale of the
Partnership properties.
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10.3 EVENTS NOT OCCASIONING DISSOLUTION. The Partnership will not dissolve
upon the death, bankruptcy, adjudication of incompetency or insanity, withdrawal
or assignment of the Partnership Interest of a Limited Partner. In any such
event, the General Partners will have the right and duty to continue the
business of the Partnership under the terms of this Agreement.
11. MISCELLANEOUS
11.1 AMENDMENTS. This Agreement may be amended from time to time upon the
written consent of all of the General Partners and of the Non-Family Member
Partner. However, this Agreement will not be amended to change any Partner's
share of the liabilities or distributions without the consent of such Partner.
11.2 NOTICES.
11.2(a) All notices, requests, demands or other communications
required or permitted under this Agreement will be in writing and be personally
delivered against a written receipt, delivered to a reputable messenger service
(such as Federal Express, DHL Courier, United Parcel Service, etc.) for
overnight delivery, transmitted by confirmed telephonic facsimile (fax), or
transmitted by mail, registered, express or certified, return receipt requested,
postage prepaid, addressed as follows:
11.2(a)(1) If given to the Partnership, to the
Partnership at its principal office; or
11.2(a)(2) If given to a Partner, to the Partner at the
address set forth on the records of the Partnership.
11.2(b) All notices, demands and requests will be effective upon
being properly personally delivered, upon being delivered to a reputable
messenger service, upon transmission of a confirmed fax or upon being deposited
in the United States mail as herein provided. However, the time period in which
a response to any such notice, demand or request must be given will commence to
run from the date of personal delivery, the date of delivery by a reputable
messenger service, the date on the confirmation of a fax or the date on the
return receipt, as applicable.
11.3 NO DELIVERY OF CERTIFICATES. The General Partners are not required to
deliver copies of any Certificate of Limited Partnership or amendment or
cancellation to the Limited Partners.
11.4 GOVERNING LAW. This Agreement will be construed in accordance with
and governed by the laws of the State of Kentucky.
11.5 ARBITRATION. The parties will submit any and all disputed issues to
final and binding arbitration. A disputed issue means any disagreement in regard
to any of the terms and conditions of this Agreement and any dispute between the
parties concerning their relationships, including issues not directly covered by
this Agreement. Any such dispute will not be subject to appeal to any court
except to permit a party to seek court enforcement of any arbitration award
rendered hereunder.
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If the parties agree to the appointment of a single arbitrator, then the single
arbitrator will determine and decide any dispute arising hereunder. If the
parties cannot agree to the selection of a single arbitrator, then each party
will designate an attorney to serve as an arbitrator, and the selected attorneys
will select an arbitrator, who is a certified public accountant, to be the third
arbitrator. The arbitrator(s) will establish rules for the conduct of the
arbitration consistent with the rules of the American Arbitration Association
and KRS 417.050 et seq., will be impartial, and will have no prior or present
relationship with any of the parties. The arbitration hearing and proceedings
will take place in the Commonwealth of Kentucky, and will be enforceable in the
Commonwealth of Kentucky. The arbitrator(s) will be empowered to hear,
conclusively determine and resolve all claims and disputes between the parties.
Arbitration fees and expenses will be shared equally by the parties to the
arbitration. The parties agree that all matters to be arbitrated and the
arbitration award will be maintained on a confidential basis. All issues and the
results thereof will not be disclosed by the parties or their representatives,
and the parties and their representatives will not report any of their
proceedings to the public. These provisions will not prohibit any party from
securing witnesses, experts, or other advisors as is necessary in order for the
parties to present their case, etc.
11.6 POWER OF ATTORNEY.
11.6(a) Each Partner, in accepting this Agreement, makes, constitutes
and appoints the Co-Managing General Partners with full power of substitution,
as the Partner's attorney-in-fact and personal representative to sign, execute,
certify, acknowledge, file and record the Certificate of Limited Partnership,
and to sign, execute, certify, acknowledge, file and record all appropriate
instruments amending this Agreement, and the Certificate of Limited Partnership
on behalf of the Partner. In particular, the Co-Managing General Partners, as
attorney-in-fact, may sign, acknowledge, certify, and file and record on the
behalf of each Partner such instruments, agreements, and documents that:
11.6(a)(1) Reflect the exercise by the Co-Managing General
Partner of any of the powers granted to him under this Agreement;
11.6(a)(2) Reflect any amendments made to this Agreement;
11.6(a)(3) Reflect the admission or withdrawal of a
General or Limited Partner; and
11.6(a)(4) May otherwise be required of the Partnership or
a Partner by Federal or State law, or the law of any other applicable
jurisdiction.
11.6(b) The power of attorney herein given by each Limited Partner is
a durable power and will survive the disability or incapacity of the principal.
Further, this power of attorney is irrevocable and a power coupled with an
interest; therefore, it will not be revoked by the death, dissolution or
termination of any Partner.
11.7 PARTITION. The Partners agree that no Partner, nor any successor in
interest to any Partner, will have the right, while this Agreement remains in
effect, to have any of the Partnership's property
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partitioned, or to file a complaint or otherwise institute any suit, action, or
proceeding at law or in equity to have any of the Partnership's property
partitioned. Further, each Partner, on behalf of himself, his successors, heirs,
and assigns hereby waives any such right.
11.8 WAIVER OF RIGHT TO COURT DECREE OF DISSOLUTION. The parties agree that
irreparable damage would be done to the Partnership's good will and business
affairs if any Partner should bring an action in court to dissolve the
Partnership. Care has been taken in this Agreement to provide what the parties
feel is fair and just payment in liquidation of the Partnership interests of all
Partners. Accordingly, each party hereby waives and renounces his or her right
to a court decree of dissolution or to seek court appointment of a receiver
and/or liquidator for the Partnership, under any statutory, common law, or
regulatory rule, except as may be sought by the Partnership.
11.9 AGREEMENT BINDING. This Agreement will be binding upon the next of
kin, heirs, executors, administrators, successors and assigns of the parties
hereto.
11.10 INVALID PROVISIONS. The invalidity or unenforceability of a particular
provision of this Agreement will not affect the other provisions hereof, and the
Agreement will be construed in all respects as if such invalid or unenforceable
provisions were omitted.
11.11 WAIVER. The failure to exercise any of the terms and conditions by the
parties will not be construed as a waiver of any other terms and conditions by
the parties, and, in addition, all terms and conditions hereof will be deemed to
be cumulative and the exercise of any term or condition by the parties will not
be deemed a waiver of any other right, and a failure to exercise any right will
not be deemed a waiver to exercise any other right at that time or at any other
time or times.
11.12 THIRD PARTY BENEFICIARIES. This Agreement does not create, and will
not be construed as creating, any rights enforceable by any person not a party
to this Agreement.
In order to evidence their understanding of and agreement to all the terms and
conditions of this instrument, the parties have signed multiple copies of this
Agreement, each one of which, when signed by all the parties, will be considered
an original.
DATED: 7/17,1998
GENERAL PARTNERS:
/S/ BERNARD M. TRAGER /S/ STEVEN E. TRAGER
Bernard M. Trager, Steven E. Trager
Co-Managing General Partner Co-Managing General Partner
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LIMITED PARTNERS:
/S/ BERNARD M. TRAGER /S/ JEAN S. TRAGER
Bernard M. Trager, Limited Partner Jean S. Trager, Limited Partner
/S/ STEVEN E. TRAGER /S/ SHELLEY TRAGER KUSMAN
Steven E. Trager, Limited Partner Shelley Trager Kusman, Limited Partner
/S/ SCOTT TRAGER /S/ Paul Didier
Scott Trager, Limited Partner PNC Bank Kentucky, Inc.
Trustee of the Bernard Trager Trust
under Agreement dated December 23, 1985,
Limited Partner
/S/ STEVEN E. TRAGER /S/ SHELDON G. GILMAN
Steven E. Trager, Sheldon G. Gilman,
Trustee of the Steven E. Trager Trustee of the Andrew Kusman Trust,
Revocable Trust under Agreement, dated December 27, 1989,
Dated April 3, 1995, Limited Partner
Limited Partner
/S/ SHELDON G. GILMAN /S/ SHELDON G. GILMAN
Sheldon G. Gilman, Sheldon G. Gilman,
Trustee of the Michael Kusman Trust,Trustee of the Kevin Trager Trust,
dated December 27, 1989, dated December 27, 1989,
Limited Partner Limited Partner
/S/ SHELDON G. GILMAN /S/ SHELDON G. GILMAN
Sheldon G. Gilman, Sheldon G. Gilman,
Trustee of the Brett Kusman Trust, Trustee of the Emily Trager Trust,
dated January 2, 1992, dated June 1, 1992,
Limited Partner Limited Partner
/S/ SUSAN B. COHEN TRUST
U/A/DTD 7/3/92
Susan B. Cohen Trust
U/A dtd 7/3/92
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