-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, CYu2Ihjrym0Ti7uM1d6XBkT8c/9V8xkzLocZvDvGvsZCCcwhJln50HNv+rC5oz+Q A05iJCp6wGLXCddgWq4sWQ== 0000940397-99-000027.txt : 19990209 0000940397-99-000027.hdr.sgml : 19990209 ACCESSION NUMBER: 0000940397-99-000027 CONFORMED SUBMISSION TYPE: SC 13D PUBLIC DOCUMENT COUNT: 7 FILED AS OF DATE: 19990208 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: REPUBLIC BANCORP INC /KY/ CENTRAL INDEX KEY: 0000921557 STANDARD INDUSTRIAL CLASSIFICATION: STATE COMMERCIAL BANKS [6022] IRS NUMBER: 610862051 STATE OF INCORPORATION: KY FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D SEC ACT: SEC FILE NUMBER: 005-55299 FILM NUMBER: 99524301 BUSINESS ADDRESS: STREET 1: REPUBLIC CORPORATE CENTER STREET 2: 601 WEST MARKET ST CITY: LOUISVILLE STATE: KY ZIP: 40202 BUSINESS PHONE: 5025843600 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: TRAGER BERNARD M CENTRAL INDEX KEY: 0001078406 STANDARD INDUSTRIAL CLASSIFICATION: [] FILING VALUES: FORM TYPE: SC 13D BUSINESS ADDRESS: STREET 1: 601 WEST MARKET STREET CITY: LOUISVILLE STATE: KY ZIP: 40202 BUSINESS PHONE: 5025843600 SC 13D 1 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). 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 (8) Shared Voting Power. . . . . . . 7,908,228 (9) Sole Dispositive Power . . . . . 1,028,344 (10) Shared Dispositive Power . . . . 7,908,228 (11) Aggregate Amount Beneficially Owned by Each Reporting Person . . . .8,936,572 (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 - ---------- 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. 3 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. 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 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. 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. (b) Sole Voting Power. . . . . . . . 1,028,344 Shared Voting Power. . . . . . . 7,908,228 Sole Dispositive Power . . . . . 1,028,344 Shared Dispositive Power . . . . 7,908,228 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). - ---------- 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. 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 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. 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 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 EX-99.1 2 REPUBLIC BANCORP ESOP PLAN 10 EXHIBIT 99.1 REPUBLIC BANCORP, INC. EMPLOYEE STOCK OWNERSHIP PLAN AND TRUST AGREEMENT January 1, 1999 11 REPUBLIC BANCORP, INC. PROFIT SHARING PLAN AND TRUST AGREEMENT Table of Contents
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 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 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
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. 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 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 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. 4 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. 5 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." 6 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 7 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; 8 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 9 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- 10 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 11 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 12 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, 13 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: 14 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 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. 16 30 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 17 31 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 18 32 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. 19 33 (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. 20 34 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 21 35 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. 22 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 23 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 24 38 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. 25 39 (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 26 40 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 27 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. 28 42 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 29 43 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 30 44 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. 31 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 32 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: 33 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 34 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 35 49 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 36 50 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 37 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). 38 52 (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 39 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 40 54 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 41 55 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 42 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. 43 57 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 44 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 45 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 46 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 47 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 48 EX-99.2 3 ESOP LOAN AGREEMENT 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. 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. 2 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. 3 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 4 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. 5 67 (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 6 68 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. 7 69 (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. 8 70 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. 9 71 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 10 72 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 11 73 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") 12 EX-99.3 4 ESOP PROMISSORY NOTE 74 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. 75 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 2 EX-99.4 5 STOCK PLEDGE AGREEMENT 76 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. 77 (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 2 78 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 3 79 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 4 80 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. 5 81 (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. 6 82 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. 7 83 (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") 8 EX-99.5 6 JAYTEE PROPERTIES LP AGREEMENT 84 EXHIBIT 99.5 ----------------------------------------------------- AGREEMENT OF LIMITED PARTNERSHIP FOR THE JAYTEE PROPERTIES LIMITED PARTNERSHIP ----------------------------------------------------- 85 JAYTEE PROPERTIES LIMITED PARTNERSHIP TABLE OF CONTENTS
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 - ------------------------------------------------------------------------------------------------------------------- The Jaytee Properties Limited Partnership Page i 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 - ------------------------------------------------------------------------------------------------------------------- The Jaytee Properties Limited Partnership Page ii 87 - -------------------------------------------------------------------------------------------------------------------- The Jaytee Properties Limited Partnership Page iii
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." - -------------------------------------------------------------------------------- The Jaytee Properties Limited Partnership Page 1 of 24 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. - -------------------------------------------------------------------------------- The Jaytee Properties Limited Partnership Page 2 of 24 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. - -------------------------------------------------------------------------------- The Jaytee Properties Limited Partnership Page 3 of 24 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 - -------------------------------------------------------------------------------- The Jaytee Properties Limited Partnership Page 4 of 24 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 - -------------------------------------------------------------------------------- The Jaytee Properties Limited Partnership Page 5 of 24 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. - -------------------------------------------------------------------------------- The Jaytee Properties Limited Partnership Page 6 of 24 94 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. - -------------------------------------------------------------------------------- The Jaytee Properties Limited Partnership Page 7 of 24 95 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 - -------------------------------------------------------------------------------- The Jaytee Properties Limited Partnership Page 8 of 24 96 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. - -------------------------------------------------------------------------------- The Jaytee Properties Limited Partnership Page 9 of 24 97 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. - -------------------------------------------------------------------------------- The Jaytee Properties Limited Partnership Page 10 of 24 98 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 - -------------------------------------------------------------------------------- The Jaytee Properties Limited Partnership Page 11 of 24 99 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. - -------------------------------------------------------------------------------- The Jaytee Properties Limited Partnership Page 12 of 24 100 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 - -------------------------------------------------------------------------------- The Jaytee Properties Limited Partnership Page 13 of 24 101 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. - -------------------------------------------------------------------------------- The Jaytee Properties Limited Partnership Page 14 of 24 102 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 - -------------------------------------------------------------------------------- The Jaytee Properties Limited Partnership Page 15 of 24 103 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 - -------------------------------------------------------------------------------- The Jaytee Properties Limited Partnership Page 16 of 24 104 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. - -------------------------------------------------------------------------------- The Jaytee Properties Limited Partnership Page 17 of 24 105 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 - -------------------------------------------------------------------------------- The Jaytee Properties Limited Partnership Page 18 of 24 106 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). - -------------------------------------------------------------------------------- The Jaytee Properties Limited Partnership Page 19 of 24 107 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. - -------------------------------------------------------------------------------- The Jaytee Properties Limited Partnership Page 20 of 24 108 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 - -------------------------------------------------------------------------------- The Jaytee Properties Limited Partnership Page 21 of 24 109 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. - -------------------------------------------------------------------------------- The Jaytee Properties Limited Partnership Page 22 of 24 110 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 - -------------------------------------------------------------------------------- The Jaytee Properties Limited Partnership Page 23 of 24 111 /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 - -------------------------------------------------------------------------------- The Jaytee Properties Limited Partnership Page 24 of 24 112 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) EX-99.6 7 TEEBANK FAMILY LP AGREEMENT 113 EXHIBIT 99.6 - -------------------------------------------------------------------------------- AGREEMENT OF LIMITED PARTNERSHIP FOR TEEBANK FAMILY LIMITED PARTNERSHIP ------------------------------------------------------------------------------- 114 TEEBANK FAMILY LIMITED PARTNERSHIP TABLE OF CONTENTS
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 - ------------------------------------------------------------------------------------------------------------------- Teebank Family Limited Partnership Page i 115 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 - ------------------------------------------------------------------------------------------------------------------- Teebank Family Limited Partnership Page ii 116 - ------------------------------------------------------------------------------------------------------------------- Teebank Family Limited Partnership Page iii
117 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. - -------------------------------------------------------------------------------- Teebank Family Limited Partnership Page 1 of 23 118 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. - -------------------------------------------------------------------------------- Teebank Family Limited Partnership Page 2 of 23 119 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)); - -------------------------------------------------------------------------------- Teebank Family Limited Partnership Page 3 of 23 120 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 - -------------------------------------------------------------------------------- Teebank Family Limited Partnership Page 4 of 23 121 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. - -------------------------------------------------------------------------------- Teebank Family Limited Partnership Page 5 of 23 122 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 - -------------------------------------------------------------------------------- Teebank Family Limited Partnership Page 6 of 23 123 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. - -------------------------------------------------------------------------------- Teebank Family Limited Partnership Page 7 of 23 124 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 - -------------------------------------------------------------------------------- Teebank Family Limited Partnership Page 8 of 23 125 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 - -------------------------------------------------------------------------------- Teebank Family Limited Partnership Page 9 of 23 126 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. - -------------------------------------------------------------------------------- Teebank Family Limited Partnership Page 10 of 23 127 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 - -------------------------------------------------------------------------------- Teebank Family Limited Partnership Page 11 of 23 128 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. - -------------------------------------------------------------------------------- Teebank Family Limited Partnership Page 12 of 23 129 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 - -------------------------------------------------------------------------------- Teebank Family Limited Partnership Page 13 of 23 130 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. - -------------------------------------------------------------------------------- Teebank Family Limited Partnership Page 14 of 23 131 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. - -------------------------------------------------------------------------------- Teebank Family Limited Partnership Page 15 of 23 132 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 - -------------------------------------------------------------------------------- Teebank Family Limited Partnership Page 16 of 23 133 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. - -------------------------------------------------------------------------------- Teebank Family Limited Partnership Page 17 of 23 134 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. - -------------------------------------------------------------------------------- Teebank Family Limited Partnership Page 18 of 23 135 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. - -------------------------------------------------------------------------------- Teebank Family Limited Partnership Page 19 of 23 136 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. - -------------------------------------------------------------------------------- Teebank Family Limited Partnership Page 20 of 23 137 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 - -------------------------------------------------------------------------------- Teebank Family Limited Partnership Page 21 of 23 138 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 - -------------------------------------------------------------------------------- Teebank Family Limited Partnership Page 22 of 23 139 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 - -------------------------------------------------------------------------------- Teebank Family Limited Partnership Page 23 of 23 -----END PRIVACY-ENHANCED MESSAGE-----