Kentucky
(state or other jurisdiction of incorporation)
|
001-31220
(commission file number
)
|
61-0979818
(
irs employer identification no.)
|
346 North Mayo Trail, Pikeville, Kentucky
(
address of principal executive offices
)
|
41501
(
zip code
)
|
·
|
Base Salary Increases.
New annual base salaries were approved for the following named executive officers: Jean R. Hale (Chairman, President and Chief Executive Officer) - $485,000; Kevin J. Stumbo (Executive Vice President and Treasurer) - $191,000; Mark A. Gooch (Executive Vice President and Secretary) - $358,000; Larry W. Jones (Executive Vice President) - $220,000; and James B. Draughn (Executive Vice President) - $211,000.
|
·
|
Cash Incentive Compensation Awards for the Year Ended December 31, 2011.
The Committee previously established the performance measures under the Senior Management Incentive Compensation Plan and the Employee Incentive Compensation Plan for the year ended December 31, 2011, and the required level of performance was not achieved by the Company under these plans. Accordingly, no cash incentive awards were paid under the Plans for the year 2011.
|
·
|
Plans for Annual Incentive Compensation Awards for the Year Ending December 31, 2012.
The Committee approved the Senior Management Incentive Compensation Plan for the year ending December 31, 2012 which is included herein as Exhibit 10.7 to this Current Report on Form 8-K. The participation groups under the Plan are: (i) Group I, consisting of the Chief Executive Officer (CEO) and other members of the Executive Committee; (ii) Group II, consisting of the Company’s officers responsible for certain divisions and market presidents; and (iii) Group III, consisting of Senior Vice Presidents of consolidated functions selected for participation by the Compensation Committee. Individuals below the Senior Vice President level may be selected by the Compensation Committee for special option awards for extraordinary performance. This Plan may be amended, modified, or terminated by the Board of Directors at any time at its sole discretion, except that after the 90
th
day of the year the target award and the performance standards may not be changed in a manner that would increase the amount of incentive compensation payable for such year.
|
o
|
Participants will be eligible for a cash award determined by earnings per share growth and earnings as a percentage of average assets (ROAA). The minimum and maximum awards as a percentage of salary for each group will be: (i) Group I – CEO minimum award – 18% of salary and maximum award - 90% of salary; (ii) Group I – Other Executive Officers minimum award – 9% of salary and maximum award - 45% of salary; (iii) Group II - minimum award – 6.30% of salary and maximum award – 16.45% of salary; and (iv) Group III – minimum award – 4.95% of salary and maximum award – 11.00% of salary. In the event that the ROAA or EPS are not attained but the target net income is attained, the amount of the award under the Plan shall be paid at the base level of target performance payment. There shall be a minimum acceptable performance beneath which no incentive awards are paid and a maximum above which there is no additional award paid to avoid excessive payout in the event of windfall profits.
|
o
|
Participants will be eligible to receive stock options (pursuant to the Company’s 2006 Stock Ownership Incentive Plan) with a face value equal to certain percentages of salary or restricted stock (or a combination of options and restricted stock) deemed equivalent to the options earned. The minimum and maximum stock option awards as a percentage of salary for each group will be: (i) Group I – CEO minimum award of 18% of salary and maximum award of 30% of salary; (ii) Group I – Other Executive Officers – minimum award of 18% of salary and maximum award of 30% of salary; (iii) Group II – minimum award of 9% of salary and maximum award of 15% of salary; and (iv) Group III – minimum award of 4.05% of salary and maximum award of 7.50% of salary. In the event that the ROAA or EPS are not attained but the target net income is attained, the amount of stock options and/or restricted stock awarded under the Plan shall be granted at the base level of target performance. There shall be a minimum acceptable performance beneath which awards will not be granted and a maximum above which there is no additional award in the event of windfall profits.
|
o
|
Participants will be eligible for a cash award determined by earnings per share growth and earnings as a percentage of average assets (ROAA). The minimum and maximum awards as a percentage of salary for each participant will be: minimum award – 3.60% of salary and maximum award – 6.00% of salary. In the event that the ROAA or EPS are not attained but the target net income is attained, the amount of the award under the Plan shall be paid at the base level of target performance payment. There shall be a minimum acceptable performance beneath which no incentive awards are paid and a maximum above which there is no additional award paid to avoid excessive payout in the event of windfall profits.
|
·
|
Plan for Long-Term Incentive Compensation for Executive Committee.
The Committee approved the 2012 Executive Committee Long-Term Incentive Compensation Plan which is included herein as Exhibit 10.11 to this Current Report on Form 8-K. This Plan may be amended, modified, or terminated by the Board of Directors at any time at its sole discretion, except that after the 90
th
day of the year, the performance goals set forth within may not be amended in a manner which would increase the amount of compensation payable pursuant to performance units over the amount which would have been payable under the performance goals previously established for such year. Participants in this Plan will be the members of the Executive Committee of the Company.
|
o
|
The target award fund shall be generated by 20% of the salary of the CEO and 15% of the salary of other members of the Executive Committee. The target award may be changed by the Compensation Committee of the Board of Directors at any time during the Performance Period at their discretion provided, however, that the target award as a percentage of salary may not be increased after the 90
th
day of the 2012 calendar year.
|
o
|
The actual amount of payments under the performance units shall be calculated according to a schedule comparing cumulative net income (over a three-year performance period) to the performance goals described within the Plan and payments will be made in the form of cash. The minimum and maximum awards as a percentage of salary will be 5% and 30% for the CEO and 3.75% and 22.5% for all other members of the Executive Committee, respectively. No amounts may be paid under the performance units unless the Company attains a minimum acceptable performance, and no additional amounts may be paid above the maximum performance level.
|
Exhibit No.
|
Description
|
|
10.7
|
Senior Management Incentive Compensation Plan (for the year ending December 31, 2012)
|
|
10.9
|
Employee Incentive Compensation Plan (for the year ending December 31, 2012)
|
|
10.10
|
Amendment to the Community Trust Bancorp, Inc. 2006 Stock Ownership Incentive Plan dated January 24, 2012
|
|
10.11
|
Community Trust Bancorp, Inc. 2012 Executive Committee Long-Term Incentive Compensation Plan
|
|
99.1
|
Press Release dated January 26, 2012
|
COMMUNITY TRUST BANCORP, INC. | |||
Date: January 26, 2012
|
By:
|
/s/ Jean R. Hale | |
Jean R. Hale | |||
Chairman, President and Chief Executive Officer | |||
Exhibit No.
|
Description
|
|
10.7
|
Senior Management Incentive Compensation Plan (for the year ending December 31, 2012)
|
|
10.9
|
Employee Incentive Compensation Plan (for the year ending December 31, 2012)
|
|
10.10
|
Amendment to the Community Trust Bancorp, Inc. 2006 Stock Ownership Incentive Plan dated January 24, 2012
|
|
10.11
|
Community Trust Bancorp, Inc. 2012 Executive Committee Long-Term Incentive Compensation Plan
|
|
99.1
|
Press Release dated January 26, 2012
|
|
(a)
|
Increase the profitability and growth of Community Trust Bancorp, Inc. in a manner which is consistent with other goals of the Company, its stockholders and its employees,
|
|
(b)
|
Provide executive compensation which is competitive with other financial institutions,
|
|
(c)
|
Attract and retain personnel of outstanding ability and encourage excellence in the performance of individual responsibilities,
|
|
(d)
|
Motivate and reward those members of management who contribute to the success of the Company,
|
|
(e)
|
Distinguish among the performance contributions of some individuals by providing financial recognition for individual performance, as well as group performance, and
|
|
(f)
|
Allow the flexibility which permits revision and strengthening from time to time to reflect changing organizational goals and objectives.
|
|
(a)
|
“
Annual Incentive Plan
” or “
Annual Plan
” shall mean the Senior Management Incentive Compensation Plan set forth in this document and all amendments thereto.
|
|
(b)
|
“
Award Period
” means one Fiscal Year.
|
|
(c)
|
“
Board
” means the Board of Directors of Community Trust Bancorp, Inc.
|
|
(d)
|
“
Company
” means Community Trust Bancorp, Inc., and its subsidiaries.
|
|
(e)
|
“
Compensation Committee
” means the Compensation Committee of the Board.
|
|
(f)
|
“
Disability
” means the total and permanent disability of a participant as defined by any Long-Term Disability Plans in effect for the Company and as thereafter may be amended.
|
|
(g)
|
“
Effective Date
” means the date upon which the Plan shall become effective.
|
|
(h)
|
“
Fiscal Year
” means the accounting period adopted by the Company for federal income tax purposes.
|
|
(i)
|
“
Participan
t” means a person designated by the Company to participate in the Plan.
|
|
(j)
|
“
Plan
” shall mean the Company’s Senior Management Incentive Compensation Plan.
|
|
(k)
|
“
Salary
” or “
Salaries
” shall mean the base salary in effect for each participant as of the last pay period in December of the Award Period.
|
(l)
|
“
Stock Option
” shall mean Stock Options granted under the Community Trust Bancorp, Inc. 2006 Stock Ownership Incentive Plan as hereinafter may be amended including substitutions or replacements of the Plan. Such options shall be Incentive Stock Options to the extent possible under tax laws in effect at the time the option is awarded.
|
(m)
|
“Restricted Stock” shall mean Restricted Stock granted under the Community Trust Bancorp, Inc. 2006 Stock Ownership Incentive Plan as hereinafter may be amended including substitutions or replacements of the Plan
|
(a)
|
Group I shall consist of the Executive Committee of the Corporation.
|
(b)
|
Group II shall consist of the (1) CTB officers responsible for the divisions of Commercial Lending, Consumer Lending, Residential Real Estate Lending, Finance, Sales and Marketing, Human Resources, Compliance, Facilities Management and (2) the Presidents of each market
|
(c)
|
Group III shall consist of Senior Vice Presidents of consolidated functions who are selected for participation by the Compensation Committee.
|
(d)
|
Individuals below SVP level may be recommended and approved by the Compensation Committee for special awards of options for extraordinary performance.
|
* Target/ROAA
|
Award As A % of Target Award
|
Award as A % of Salary
|
Award As A % of Salary
|
ROAA
|
|
CEO
|
Group I
|
1.00%
|
90%
|
18%
|
9%
|
BASE
1.11%
|
100%
|
20%
|
10%
|
1.13%
|
150%
|
30%
|
15%
|
1.15%
|
200%
|
40%
|
20%
|
1.17%
|
250%
|
50%
|
25%
|
1.19.%
|
300%
|
60%
|
30%
|
1.21%
|
350%
|
70%
|
35%
|
1.23%
|
400%
|
80%
|
40%
|
1.25%
|
450%
|
90%
|
45%
|
|
·
|
For 2012, the Targeted (Base) ROAA is established as follows: ROAA of 1.11% and Earnings Per Share of $2.63 per the Company’s Budget.
|
·
|
For 2012, Net Income Target of $40,694,000
|
·
|
These results are after accrual of the incentive.
|
* Target/ROAA
|
Award As A % of
Target Award
|
Award As A % of Salary
|
||
ROAA
|
Group II
|
|||
|
||||
1.00%
|
90%
|
6.30%
|
||
BASE
1.11%
|
100%
|
7.00%
|
||
1.13%
|
112%
|
7.84%
|
||
1.15%
|
125%
|
8.75%
|
||
1.17%
|
150%
|
10.50%
|
||
1.19.%
|
175%
|
12.25%
|
||
1.21%
|
200%
|
14.00%
|
||
1.23%
|
217%
|
15.190%
|
||
1.25%
|
235%
|
16.45%
|
||
·
|
For 2012, the Targeted (Base) ROAA is established as follows: ROAA of 1.11% and Earnings Per Share of $2.63 per the Company’s Budget.
|
·
|
For 2012, Net Income Target of $40,694,000
|
·
|
These results are after accrual of the incentive.
|
* Target/ROAA
|
Award As A % of
Target Award
|
Award As A % of Salary
|
ROAA
|
Group III
|
|
1.00%
|
90%
|
4.95%
|
BASE
1.11%
|
100%
|
5.500%
|
1.13%
|
106%
|
5.83%
|
1.15%
|
122%
|
6.71%
|
1.17%
|
147%
|
8.085%
|
1.19%
|
163%
|
8.965%
|
1.21%
|
175%
|
9.625%
|
1.23%
|
187%
|
10.285%
|
1.25%
|
200%
|
11.00%
|
·
|
For 2012, the Targeted (Base) ROAA is established as follows: ROAA of 1.11% and Earnings Per Share of $2.63 per the Company’s Budget
|
·
|
For 2012, Net Income Target of $40,694,000
|
·
|
These results are after accrual of the incentive.
|
Target/ROAA
|
Stock Option Award As A % of Salary | |||
ROAA
|
CEO |
Group I
|
Group II
|
Group III
|
1.00%
|
18.00% |
18.00%
|
9.00%
|
4.05%
|
BASE
1.11%
|
20.00% |
20.00%
|
10.00%
|
4.50%
|
1.13%
|
21.00% |
21.00%
|
10.50%
|
4.75%
|
1.15%
|
23.00% |
23.00%
|
11.50%
|
5.00%
|
1.17%
|
24.00% |
24.00%
|
12.00%
|
5.25%
|
1.19%
|
25.00% |
25.00%
|
12.50%
|
5.75%
|
1.21%
|
26.00% |
26.00%
|
13.00%
|
6.25%
|
1.23%
|
27.00% |
27.00%
|
13.50%
|
6.75%
|
1.25%
|
29.00% |
29.00%
|
14.50%
|
7.25%
|
1.27%
|
30.00% |
30.00%
|
15.00%
|
7.50%
|
·
|
For 2012, the Targeted (Base) ROAA is established as follows: ROAA of 1.11% and Earnings Per Share of $2.63 per the Company’s Budget
|
·
|
For 2012, Net Income Target of $40,694,000
|
·
|
These results are after accrual of the incentive.
|
Target/ROAA
|
Award As A % of Target Award
|
Award As A % of Salary
|
1.00%
|
90%
|
3.60%
|
BASE
1.11%
|
100%
|
4.00%
|
1.13%
|
106.00%
|
4.25%
|
1.15%
|
112.50%
|
4.50%
|
1.17%
|
118.75%
|
4.75%
|
1.19%
|
125.00%
|
5.
00
%
|
1.21%
|
131.25%
|
5.25%
|
1.23%
|
143.75%
|
5
.
75%
|
1.25%
|
150.00%
|
6.
00
%
|
·
|
For 2012, the Targe
ted (Base) ROAA is established as follows: ROAA of 1.11% and Earning Per Share of $2.63 per the Company’s Budget .
|
·
|
For 2012, Net Income Target of $40,694,000.
|
·
|
These results are after accrual of the incentive
.
|
(a)
|
Increase the profitability and growth of Community Trust Bancorp, Inc. in a manner which is consistent with other goals of Community Trust Bancorp, Inc., its stockholders and its employees;
|
(b)
|
Provide executive compensation which is competitive with other financial institutions;
|
(c)
|
Attract and retain personnel of outstanding ability and encourage excellence in the performance of individual responsibilities; and
|
(d)
|
Motivate and reward members of the Executive Committee for their contribution to the long-term success of Community Trust Bancorp, Inc.
|
(a)
|
“
Annual Long-Term Incentive Plan” or “Plan”
means the 2012 Executive Committee Long-Term Incentive Compensation Plan set forth in this document and all amendments thereto.
|
(b)
|
“
Board”
means the Board of Directors of Community Trust Bancorp, Inc.
|
(c)
|
“Change in Control”
shall have the meaning specified in the Company’s 2006 Stock Ownership Incentive Plan.
|
(d)
|
“
Cumulative Net Income”
shall mean Community Trust Bancorp, Inc’s cumulative net income for the three (3) years ending December 31, 2014, computed in accordance with generally accepted accounting principles and giving effect to the accrual for payment of all incentive compensation.
|
(e)
|
“
Company”
means Community Trust Bancorp, Inc., and its subsidiaries.
|
(f)
|
“
Compensation Committee”
means the Compensation Committee of the Board.
|
(g)
|
“Disability”
shall have the meaning specified in the Company’s 2006 Stock Ownership Incentive Plan.
|
(h)
|
“Effective Date”
means January 1, 2012, the date on which the Plan becomes effective.
|
(i)
|
“Fiscal Year”
means the accounting period adopted by the Company for federal income tax purposes.
|
(j)
|
“Participant”
means each member of the Executive Committee as of January 1, 2012.
|
(k)
|
“Performance Goal”
shall have the meaning set forth in Section 7.01 below.
|
(l)
|
“
Performance Period”
means the three (3) Fiscal Years beginning on January 1, 2012.
|
(m)
|
“Performance Unit”
shall have the meaning specified in the Company’s 2006 Stock Ownership Incentive Plan, with each Performance Unit to have a potential value of $1.00.
|
(n)
|
“Retirement”
shall have the meaning specified in the Company’s 2006 Stock Ownership Incentive Plan.
|
(o)
|
“Salary” or “Salaries”
means the base salary in effect for each Participant as of the last pay period in December 2012.
|
PARTICIPANTS
|
SALARIES
|
TARGET AWARD EXPRESSED AS A % OF SALARY
|
TARGET AWARD FUND
|
Chief Executive Officer
|
$___________
|
X 20%
|
$___________
|
All Other Members of the Executive Committee
|
$___________
(aggregate Salaries)*
|
X 15%
|
$___________
|
CUMULATIVE NET INCOME
|
Award as a % of Target Award
|
Award as a % of Chief Executive Officer Salary
|
Award as a % of Salary of All Other Members of the Executive Committee
|
90% of Target Cumulative Net Income (
Minimum
)
|
25%
|
5%
|
3.75%
|
93.8% of Target Cumulative Net Income
|
50%
|
10%
|
7.50%
|
96.2% of Target Cumulative Net Income
|
75%
|
15%
|
11.25%
|
Target Cumulative Net Income (Per Schedule 1)
|
100%
|
20%
|
15%
|
103.8% of Target Cumulative Net Income
|
120%
|
24%
|
18%
|
107.7% of Target Cumulative Net Income
|
135%
|
27%
|
20.25%
|
111.5% of Target Cumulative Net Income (
Maximum
)
|
150%
|
30%
|
22.5%
|
1.
|
Grant
.
Pursuant to the 2012 LTIP, the Company hereby grants Participant _________ Performance Units, each with a designated value of $1.00, with a potential maximum aggregate value equal to $__________________ (“Maximum Award”), subject to the satisfaction of the Performance Goals set forth in Section 3 below. The Maximum Award represents 150% of the Participant’s Target Award, which is ______ Performance Units with an aggregate value of $_______________.
|
2.
|
Non-Transferability.
The Performance Units may not be assigned, pledged or otherwise transferred other than by will or the laws of descent and distribution, except that upon a Participant’s death, the Participant’s rights to any payment under this Agreement may be transferred to a beneficiary designated in accordance with the terms of the 2006 Incentive Plan.
|
3.
|
Performance Goals.
The Performance Units, and any payments to Participant thereunder, are subject to the satisfaction of the Performance Goals, based on the Company’s Cumulative Net Income (for the three years ending on December 31, 2014), as shown in the table below. The Participant will “earn” a number of Performance Units based upon the extent to which the Compensation Committee determines at the end of the three-year period ending December 31, 2014 (“Performance Period”), that the Performance Goals have been met. Subject to Sections 5 and 6 below, unless the minimum Target Cumulative Net Income is attained, no amount may be paid under the Performance Units, and all Performance Units will be deemed cancelled. Maximum Target Cumulative Net Income represents the highest Performance Goal that may be attained, and no additional amounts will be paid in the event that the Company’s Cumulative Net Income exceeds the maximum Cumulative Net Income shown below.
|
CUMULATIVE NET INCOME
|
Award under Performance Units as a % of Target Award
|
Award under Performance Units as a % of Chief Executive Officer Salary
|
Award as a % of Salary of All Other Members of the Executive Committee
|
90% of Target Cumulative Net Income (
Minimum
)
|
25%
|
5%
|
3.75%
|
93.8% of Target Cumulative Net Income
|
50%
|
10%
|
7.50%
|
96.2% of Target Cumulative Net Income
|
75%
|
15%
|
11.25%
|
Target Cumulative Net Income (Per Schedule 1)
|
100%
|
20%
|
15%
|
103.8% of Target Cumulative Net Income
|
120%
|
24%
|
18%
|
107.7% of Target Cumulative Net Income
|
135%
|
27%
|
20.25%
|
111.5% of Target Cumulative Net Income (
Maximum
)
|
150%
|
30%
|
22.5%
|
4.
|
Termination of Employment.
Voluntary or involuntary termination of full-time employment of a Participant prior to the expiration of the Performance Period will result in such Participant forfeiting any payment for Performance Units for the Performance Period, except as provided in Sections 5 and 6 below.
|
5.
|
Death, Disability or Retirement.
In the case of termination of employment by reason of death or Disability of a Participant prior to the expiration of the Performance Period, any then outstanding Performance Units of such Participant shall be earned and payable in an amount equal to the amount payable under the Performance Unit at the Target Cumulative Net Income level (as set forth in Section 3 above) multiplied by a percentage equal to the percentage that would have been earned under the terms of the Performance Unit Agreement assuming that the rate at which the Performance Goal set forth in Section 3 above has been achieved as of the date of such termination of employment would have continued until the end of the Performance Period. In the case of termination of employment by reason of Retirement of a Participant prior to the expiration of the Performance Period, Participant’s Performance Units shall be payable on a pro rata basis at the end of the Performance Period, as provided in Section 9 below, in the amount equal to: (a) the amount to which the Participant would have been entitled with respect to the Participant’s Performance Units if the Participant’s employment had continued to the end of the Performance Period; multiplied by (b) a fraction, the numerator of which is the number of full months the Participant is employed by the Company during the Performance Period, and the denominator of which is 36 (the number of months in the Performance Period).
|
6.
|
Change in Control.
Upon a Change in Control, any then outstanding Performance Units shall become fully vested and payable as soon as reasonably practicable, but no later than seventy-four (74) days following the Change in Control, in an amount which is equal to the greater of (a) the amount payable under the Performance Unit at the Target Cumulative Net Income level (as set forth in Section 3 above) multiplied by a percentage equal to the percentage that would have been earned under the terms of the Performance Unit Agreement assuming that the rate at which the Performance Goal has been achieved as of the date of such Change in Control would have been continued until the end of the Performance Period; or (b) the amount payable under the Performance Unit at the Target Cumulative Net Income level (as set forth in Section 3 above) multiplied by the percentage of the Performance Period completed by the Participant at the time of the Change in Control.
|
7.
|
Recoupment.
Payments pursuant to the Performance Units shall be subject to recoupment by the Company to the extent required by applicable laws and regulations.
|
8.
|
Authority of the Compensation Committee and the Board.
The Compensation Committee will administer the 2012 LTIP. Any determination or action by the Company’s Compensation Committee or Board of Directors shall be final, conclusive and binding on all Participants and their beneficiaries, heirs, personal representatives, executors and administrators. The Board of Directors, in its sole discretion, may amend, modify or terminate the 2012 LTIP Plan at any time. The Compensation Committee may change the target awards and may amend the minimum and maximum Performance Goals at any time during the Performance Period. Notwithstanding the foregoing, after the ninetieth (90
th
) day of the year: (a) the minimum Performance Goal may not be reduced and the maximum Performance Goal may not be increased; and (b) the Performance Goals may not otherwise be amended in a manner which would increase the amount of compensation payable pursuant to Performance Units over the amount which would have been payable under the Performance Goals previously established for the Performance Period.
|
9.
|
Payments to Participants.
The maximum payment that can be made pursuant to Performance Units granted to any one Participant in any calendar year is $250,000. Subject to this limitation and such terms and conditions as the Compensation Committee may impose, Performance Units shall be payable: (a) within seventy-four (74) days following the end of the Performance Period during which at least the minimum Performance Goal was attained; or (b) in the event of a Change in Control, as soon as reasonably practicable following the Change in Control, but no later than seventy-four (74) days following the Change in Control.
|
10.
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Withholding.
A Participant shall remit to the Company an amount sufficient to satisfy Federal, state and local taxes (including the Participant’s FICA obligation) required by law to be withheld with respect to the grant of, and payments made under, the Performance Units.. If Participant fails to do so, the Company is authorized to withhold from any cash or stock compensation then or thereafter payable to Participant, any tax required to be withheld.
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11.
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Deferral.
A Participant may elect to defer payment of all or part of his or her compensation under the Performance Units so long as the Participant requests such deferred payment under the terms of the Company’s Voluntary Deferred Compensation Plan; provided, however, that: (a) any such election must be made at least 12 months before the date on which payment is scheduled to be made to the Participant; (b) any such election may not take effect until at least 12 months after the date of election; and (c) any payment under the Performance Units that is subject to deferral must be deferred for a period of at least five years from the date the payment would have otherwise been made to the Participant under the 2012 LTIP.
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12.
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Governing Law.
This Agreement shall be governed by, and construed in accordance with the laws of the Commonwealth of Kentucky without regard to its conflict of laws rules.
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