UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
Date of Report (date of earliest event reported): December 29, 2005
S.Y. BANCORP, INC.
(Exact name of registrant as specified in its charter)
Kentucky 0-17262 61-1137529
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(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation or organization) File Number) Identification No.)
1040 East Main Street, Louisville, Kentucky, 40206
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(Address of principal executive offices)
(502) 582-2571
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(Registrant's telephone number, including area code)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions:
|_| Written communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
|_| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
|_| Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange
Act (17 CFR 240.14d-2(b))
|_| Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange
Act (17 CFR 240.13e-4(c))
Item 1.01 Entry into a Material Definitive Agreement.
On December 29, 2005, the Compensation Committee of the Board of Directors of
S.Y. Bancorp, Inc. ("Bancorp") approved the accelerated vesting of all
outstanding unvested options to purchase shares of Bancorp common stock that
were issued to officers of Bancorp prior to December 2005. These options were
awarded under Bancorp's 1995 and 2005 Stock Incentive Plans. The vesting of
stock options held by Bancorp's independent directors is not changed by this
action.
As a result of the Compensation Committee's action, options to purchase
approximately 190,000 shares of Bancorp's common stock at exercise prices within
a range of $16.80 to $23.95 per share may now be exercisable by their holders.
These options would otherwise have vested from time to time over the next five
years. Aside from the acceleration of the vesting date, the terms and conditions
of the stock option agreements governing the underlying stock options, including
exercise prices, remain unchanged.
By accelerating the vesting of these options effective as of December 31, 2005,
Bancorp estimates that it will reduce non-cash compensation expense in future
periods by approximately $1 million. This expected reduction compares with the
amount that Bancorp would likely record under Statement of Financial Accounting
Standards No. 123R, "Share-Based Payment," which Bancorp will adopt in January
2006.
The accelerated options represent approximately 23% of Bancorp's total
outstanding options, all of which had exercise prices equal to the market value
of Bancorp's common stock at the time of grant. Based upon an estimated closing
price of $24.50 per share on the date of accelerated vesting, 100% of the
accelerated options are "in the money," having exercise prices below the
estimated closing market price at the time of acceleration. The acceleration
also is expected to result in an additional $32,000 of compensation expense in
2005 based upon the estimated closing price of Bancorp's shares on the date of
accelerated vesting.
Bancorp will seek the consent from holders of incentive stock options within the
meaning of Section 422 of the Internal Revenue Code of 1986, as amended, if the
acceleration would have the effect of changing the status of the option for
federal income tax purposes from an incentive stock options to a non-qualified
stock option. Should any of the option holders withhold consent for the vesting
acceleration, then Bancorp would incur future expense associated with those
options over the remainder of their original vesting schedule as of January 1,
2006, and the current estimated expense elimination for Bancorp would be
reduced. Since Bancorp currently accounts for its stock options in accordance
with Accounting Principles Board Opinion No. 25, Accounting for Stock Issued to
Employees, it will report compensation expense related to the affected options
for disclosure purposes only in its fourth quarter 2005 financial statements.
Approximately 11% of the options affected by this action are held by current
named executive officers. The following table sets forth information regarding
accelerated options held by Bancorp's named executive officers.
Number of
Accelerated Exercise
Name Position Grant Date Options Price
----------------- ------------------------ ---------- ----------- ----------
Gregory A. Hoeck Executive Vice President 12.27.2001 1300 $16.80
12.17.2002 2000 19.55
12.16.2003 2700 21.18
12.14.2004 4800 23.95
Phillip S. Smith Executive Vice President 12.27.2001 1300 $16.80
12.17.2002 2000 19.55
12.16.2003 2700 21.18
12.14.2004 4800 23.95
Item 7.01 Regulation FD Disclosure.
On December 29, 2005, Bancorp issued a press release announcing the Compensation
Committee's approval of the accelerated option vesting. A copy of the press
release is furnished with this report as Exhibit 99.1.
Item 9.01 Financial Statements and Exhibits.
(c) Exhibits
99.1 Press release dated December 29, 2005
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Date: December 29, 2005
S.Y. BANCORP, INC.
By: /s/ Nancy B. Davis
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Nancy B. Davis, Executive Vice President,
Treasurer and Chief Financial Officer