For information concerning director compensation for 2016,2019, see the Role of the Compensation Committee section of the Compensation Discussion and Analysis.

CORPORATE GOVERNANCE

The Board of Directors has determined that the following fivesix of CTBI's sevenCTBI’s eight directors are "independent"“independent” as defined by applicable law and NASDAQ listing standards: Nick Carter, Franklin H. Farris, Jr., James E. McGhee II, M. Lynn Parrish, Dr. James R. Ramsey, and Anthony W. St. Charles.  The independent directors have no relationships with CTBI or its independent auditors other than immaterial relationships which were therefore not considered by the Board in confirming independence.  Mr. Parrish has been selected by the Board of Directors as the "lead“lead independent director."”

The lead independent director presides over executive sessions of the Board and acts as the liaison between independent directors and the Chairman of the Board.  The lead independent director also provides input to the Chairman of the Board concerning the agendas for Board meetings and performs other duties as assigned by the Board from time to time.

The leadership structure of the Board consists of a combined Chairman and Chief Executive Officer position, which has been held by Ms. Hale since 2004.  The Board believes that a unified Chief Executive Officer and Chairman is appropriate and in the best interests of CTBI and its shareholders.  The Board believes that combining these roles provides the following advantages:

The lead independent director serves an important corporate governance function by providing separate leadership for the non-management and independent directors. The Board makes the determination of the appropriate leadership structure based on current circumstances.  The Board also believes that the solid and profitable performance of CTBI under Ms. Hale'sHale’s direction particularly in light of the recent financial crisis, demonstrates the effectiveness of CTBI'sCTBI’s leadership structure.  Ms. Hale is the direct link between executive management and the Board, and as a banking professional with more than 40almost 50 years of industry experience, she provides critical insight and perception to the Board, as well as feedback to executive management, through her understanding of the issues at hand.

During 2015,2018, the Board held four executive sessions, under the guidelines for executive sessions prescribed in the Corporate Governance Guidelines, which included only non-management directors.

Shareholders may communicate directly with the Board of Directors by sending a written communication addressed to the Chairman of the Board of Directors at CTBI'sCTBI’s address.

The Board of Directors held six meetings during the 20152018 fiscal year, including the annual organizational meeting.  Each director serving in 2018 attended at least 75% of the aggregate number of Board meetings and meetings of Board committees on which such director served in 2015.2018.  It is the Board'sBoard’s policy that directors should attend each Annual Meeting of Shareholders subject to a substantial personal or business conflict.  All of CTBI'sCTBI’s directors holding office at the time attended the 20152018 Annual Meeting of Shareholders.  The Board has the following committees: Audit and Asset Quality Committee, Compensation Committee, Executive Committee, Nominating and Corporate Governance Committee, Risk and Compliance Committee, and Corporate Retirement and Employee Benefit Committee.

Under our Corporate Governance Guidelines, the Board is charged with providing oversight of our risk management processes. The Audit Committee and the Risk and Compliance Committee are primarily responsible for overseeing our risk management function on behalf of the Board.  In carrying out its responsibilities, the Audit and Risk and Compliance Committees work closely with our Chief Risk Officer and other members of our enterprise-wide risk management team.  Risk is inherent with every business, and how well a business manages risk can ultimately determine its success.  We face a number of risks, including general economic risks, credit risks, regulatory risks, audit risks, reputational risks and others, such as the impact of competition.  Management is responsible for the day-to-day management of risks CTBI faces, while the Board, as a whole and through its committees, has responsibility for the oversight of risk management.  In its risk oversight role, the Board has the responsibility to satisfy itself that the risk management processes designed and implemented by management are adequate and functioning as designed.

While the full Board of Directors is charged with ultimate oversight responsibility for risk management, various committees of the Board and members of management also have responsibilities with respect to our risk oversight.  The Audit Committee plays a large role in monitoring and assessing our financial, legal, and organizational risks.  CTBI utilizes an enterprise-wide risk management ("EWRM"(“EWRM”) process designed to provide the Board and management with the capabilities needed to identify, assess, and manage the full spectrum of risks inherent to our industry.  While business unit managers are primarily responsible for managing risk inherent in their areas of responsibility, CTBI has established a risk management governance structure to establish policies, monitor adherence to the policies, and manage the overall risk profile of CTBI.  CTBI'sCTBI’s EWRM program is not intended to replace normal risk management activities conducted by the business unit managers.  The EWRM program is designed to provide a portfolio view of risks across the entire enterprise.

As an integral part of the risk management process, management has established various committees consisting of senior executives and others within CTBI.  The purpose of these committees is to closely monitor risks and ensure that adequate risk management practices exist within their respective areas of authority.  Some of the principal committees include the Asset/Liability Management (ALCO) Committee, the Loan Portfolio Risk Management Committee, the Senior Credit Committee, the Information Technology Steering Committee, and various compliance-related committees.  Overlapping membership of these committees by senior executives and others helps provide a unified view of risk on an enterprise-wide basis.  To facilitate an enterprise-wide view of CTBI'sCTBI’s risk profile and coordinate the enterprise risk management governance process, a Chief Risk Officer has been appointed, who oversees the process and reports on CTBI'sCTBI’s risk profile.  Additionally, risk champions are assigned for various areas.  The risk champions facilitate implementation of the enterprise risk management and governance process across CTBI.  The Risk and Compliance Committee oversees and supports the EWRM process.  The Board of Directors, through its Risk and Compliance Committee, has overall responsibility for oversight of CTBI'sCTBI’s enterprise risk management governance process.  The Risk and Compliance Committee monitors and assesses regular reports from the management team'steam’s EWRM Committee regarding comprehensive organizational risk as well as particular areas of concern.  In addition, the Nominating Committee considers risks related to succession planning.  The Compensation Committee considers risks related to the attraction and retention of critical employees and risks relating to CTBI'sCTBI’s compensation programs and contractual employee arrangements and oversees incentives that encourage a level of risk-taking consistent with our overall strategy.  The Compensation Committee reviews compensation and benefit plans affecting employees in addition to those applicable to executive officers. 

REPORT OF THE AUDIT AND ASSET QUALITY COMMITTEE

The Audit and Asset Quality Committee (the "Audit Committee"“Audit Committee”) oversees the financial reporting process of CTBI on behalf of the Board of Directors.  All directors who serve on the Audit Committee meet the independence standards of Rule 5605(a)(2) and the audit committee qualifications of Rule 5605(c)(2) of the NASDAQ listing standards.  The Audit Committee monitors the integrity of CTBI'sCTBI’s financial statements, the qualifications and independence of CTBI'sCTBI’s independent registered public accounting firm ("(“independent auditor"auditor”), the performance of CTBI'sCTBI’s internal audit function, CTBI'sCTBI’s system of internal controls, financial reporting, and disclosure controls, and compliance with the Corporate Governance Guidelines and Code of Business Conduct and Ethics.  The Audit Committee has established procedures for the confidential, anonymous submission of concerns about accounting matters, internal controls, and auditing matters.  Management has the responsibility for the preparation of CTBI'sCTBI’s consolidated financial statements and management'smanagement’s assertion on the design and effectiveness of CTBI'sCTBI’s internal control over financial reporting.  The independent auditor has the responsibility for the examination of those consolidated financial statements.

The Audit Committee reviewed with the independent auditor, which is responsible for expressing an opinion on the conformity of the audited financial statements with accounting principles generally accepted in the United States of America, its judgments as to the quality, not just the acceptability, of CTBI'sCTBI’s accounting principlespolicies and such other matters as are required to be discussed with the Audit Committee under auditing standards generally accepted in the United States of America.practices.  Additionally, the Audit Committee'sCommittee’s review included discussion with CTBI'sCTBI’s independent auditor of matters required to be discussed pursuant to the Public Company Accounting Oversight Board ("PCAOB"(“PCAOB”) Auditing Standard No. 16 ("(“AS 16"16”) and Statement on Auditing Standards No. 61, Communication with Audit Committees, as amended (AICPA, Professional Standards, Vol. 1 AU Section 380), as adopted by the PCAOB in Rule 3200T..  AS 16 requires CTBI'sCTBI’s independent auditor to provide the Audit Committee with additional information regarding the scope and results of its audit of CTBI'sCTBI’s financial statements, including with respect to: (i) its responsibility under audit standards performed in accordance with standards of the PCAOB (United States), (ii) qualitative aspects of significant accounting policies and practices, (iii) management judgments and critical estimates, (iv) significant unusual transactions, (v) any significantrelated party relationships and transactions, (vi) audit adjustments, (vi)(vii) evaluation of the quality of financial reporting, (vii)(viii) other information in documents containing audited financial statements, (viii)(ix) any disagreements with management, (ix)(x) significant issues discussed with management, and (x)(xi) any difficulties encountered in performing the audit.

The Audit Committee received from BKD, LLP a letter providing the disclosures required by applicable requirements of the PCAOB, with respect to any relationships between BKD, LLP and CTBI that, in its professional judgment, may reasonably be thought to bear on independence.  BKD has discussed its independence with the Audit Committee and has confirmed in such letter that, in its professional judgment, it is independent of CTBI within the meaning of the federal securities laws.

The Audit Committee pre-approves all audit and non-audit services performed by the independent auditor.  The Audit Committee will periodically grant general pre-approval of certain audit and non-audit services.  Any other services must be specifically approved by the Audit Committee, and any proposed services exceeding the pre-approved cost levels must be specifically pre-approved by the Audit Committee.  In periods between Audit Committee meetings, the Chairman of the Audit Committee has the delegated authority from the Audit Committee to pre-approve additional services, and such pre-approvals are then communicated to the full Audit Committee.

The Audit Committee discussed with CTBI'sCTBI’s internal auditor and independent auditor the overall scope and plans for their respective audits.  The Audit Committee met with its internal auditor and independent auditor, with and without management present, to discuss the results of their examinations, their evaluations of CTBI'sCTBI’s internal controls, and the overall quality of CTBI'sCTBI’s financial reporting.  The Audit Committee held twelve meetings during fiscal year 2015.2018.

In fulfilling its oversight responsibilities, the Audit Committee reviewed with management and the independent auditor the audited consolidated financial statements of CTBI as of and for the year ended December 31, 20152018 and management'smanagement’s assertion on the design and effectiveness of CTBI'sCTBI’s internal control over financial reporting as of December 31, 2015.2018.

In reliance on the reviews and discussions referred to above, the Audit Committee recommended to the Board of Directors that the audited financial statements be included in the Annual Report on Form 10-K for the year ended December 31, 20152018 for filing with the Securities and Exchange Commission.  The Audit Committee has also recommended, subject to shareholder ratification, the selection of BKD, LLP as CTBI'sCTBI’s independent registered public accounting firm.

INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Audit Committee of the Board of Directors of CTBI engaged BKD, LLP ("BKD"(“BKD”) to serve as its independent registered certified public accounting firm for the year ended December 31, 2015.2018.

Aggregate fees billed topaid by CTBI forduring the fiscal years ending December 31, 20152018 and 2014 by CTBI's2017 to CTBI’s principal accounting firm, BKD, LLP, were as follows:

Audit related fees included payments for audits of CTBI'sCTBI’s ESOP and 401(k) Plan and out-of-pocket expenses related to the audit of the consolidated financial statements.statements, as well as services normally provided by an independent auditor in connection with statutory or regulatory filings or engagements.  Tax fees include payments for preparation of the federal and state corporate income tax returns and the preparation of the Form 5500s for the CTBI sponsored benefit plans.

RATIFICATION OF THE SELECTION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

ADVISORY VOTE ON EXECUTIVE COMPENSATION

INTEREST OF MANAGEMENT IN CERTAIN TRANSACTIONS

In the ordinary course of business, CTBI, through its wholly-owned commercial bank subsidiary, Community Trust Bank, Inc. (the "Bank"“Bank”), has had in the past and expects to have in the future banking transactions, including lending to its directors, officers, principal shareholders, and their associates.  When these banking transactions are credit transactions, they are made in the ordinary course of business, on substantially the same terms, including interest rates and collateral, as those prevailing at the time for comparable transactions with others.  None of the credits are disclosed as nonaccrual, past due, restructured, or potential problem credits.  In the opinion of CTBI'sCTBI’s Board of Directors, such transactions do not involve more than the normal risk of collectability or present any other unfavorable features.

Mr. Charles J. Baird, a director of CTBI, is a shareholder in Baird and Baird, P.S.C., a law firm that provided services to CTBI and its subsidiaries during 20152018 and will beis being retained by CTBI and its subsidiaries during the fiscal year 2016.2019.  Approximately $1.2$1.1 million in legal fees and $0.1 million in expenses paid on behalf of CTBI, $1.3$1.2 million in total, were paid to Baird and Baird, P.S.C. during 2015.2018.

The Board of Directors has determined that the Compensation Committee of the Board should review and approve related party transactions.  Accordingly, management recommends to the Compensation Committee related party transactions to be entered into by CTBI, including the proposed aggregate value of such transactions if applicable.  After review, the Compensation Committee recommends approval or disapproval of such transactions and at each subsequently scheduled meeting, management updates the Compensation Committee as to any material change to those proposed transactions.  The Compensation Committee provides a report to the Board of Directors at each regularly scheduled meeting of the related party transactions approved by the Compensation Committee since the date of its previous report to the Board.

SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Section 16(a) of the Securities Exchange Act of 1934 (the "Act"“Act”) requires CTBI'sCTBI’s executive officers and directors and persons who own more than ten percent (10%) of the Common Stock to file initial reports of ownership and changes in ownership with the Securities and Exchange Commission ("SEC"(“SEC”), as well as to furnish CTBI with a copy of such report.  Additionally, SEC regulations require CTBI to identify in its Proxy Statement those individuals for whom one of the referenced reports was not filed on a timely basis during the most recent fiscal year.  Based upon a review of Forms 3, 4, and 5 furnished to CTBI, there were no late SEC filings during 2015.in the year 2018.

COMPENSATION DISCUSSION AND ANALYSIS

During 2015,2018, the Compensation Committee ("Committee") continued its ongoing review of the compensation program for executive officers and monitored the impact of certain changes implemented from 2012 through 2014,2017, especially in regard to the executive incentive plans.  As described in more detail below, the changes made from 2012 through 20142017 were intended to increase the portion of total pay that is performance-based and accomplish threefour significant objectives: (i) improve the alignment of executive pay with CTBI performance; (ii) provide executives a pay opportunity that is competitive with industry practices; (iii) attract and retain qualified management; and (iv) maintain enterprise wide risk management.

In early 2012, the Committee adopted, and the Board of Directors approved, the followinga new strategy for managing executive compensation overcompensation.  The following summarizes the next several years:adopted strategy:

During 2015,2018, the Compensation Committee reviewed the executive compensation strategy described above and the actions taken to implement it from 2012 through 2014.since 2012.  The Committee concluded that the implementation of the new strategy had improved the competitiveness of the compensation opportunity provided to executive officers as well as the alignment of executive pay with CTBI performance.  As a result, the Committee concludeddetermined it would be appropriate to continue managing pay in accordance with the executive compensation strategy through the remainder of 20152018 and into 2016.2019.

CTBI'sCTBI’s normalized earnings (Net Income and EPS) and returns (Return on Assets and Return on Equity) for 20152018 were higher thanabove the  minimumtarget (base) performance targets forlevels set by the Committee at the beginning of the year. As further described below under “2018 Annual Incentive Plan,” based on performance, the Committee approved the payment of  cash bonuses and grants of restricted stock established at target (base) levels as provided by the  beginning of 20152018 Incentive Plan.  As further described below under the 2015 annual incentive plan and slightly above prior year results and the base performance targets under the 2015 annual incentive plan.  CTBI's“Long-Term Incentive Plan – Incentives Earned for 2016-2018 Performance Period,” CTBI’s normalized cumulative net income for the three-year periodthree years ended December 31, 20152018 was slightly below the cumulative net income goal for such three-year period but above the minimum or thresholdrequired level of performance requiredbut below the target (base) performance set by the Committee at the beginning of 2016.  Based on these results, the Committee approved the payment in cash of long-term incentives equal to earn any incentives under the long-termminimum provided by the Plan, or 75% of the executives’ target (base) incentive plan establishedpotential.  In addition to the incentive payments earned for performance through the end of 2018, the Committee approved base salary increases for each of the Named Executive Officers in 2013.  Cash bonusesearly 2019; the  base salary increases ranged from 3.37% to 5.36% over 2018 base salaries.  The Committee determined these salary increases were in keeping with the executive compensation strategy and totalthe philosophy of managing executive base salaries toward the market median.  See “Base Salaries” below for additional information about executive salary increases.  Total compensation paid to the Named Executive Officers in 2015 were higher thanwith respect to 2018 was above the prior year amounts reflecting: (i)paid to the attainment of the target (base) performance level for payment of a cash bonusNamed Executive Officers with respect to 2017 due to several reasons, including base salary increases and restricted sharesperformance-based incentive payments under both the annual and long-term incentive plan; (ii) partial achievement  of the performance goalplans for the three-year period endedperiods ending December 31, 2015 under the long-term incentive plan; and (iii) the changes to individual compensation resulting from the implementation of the executive compensation strategy (which  began in 2012) designed, among other things, to provide a pay opportunity competitive with industry practices.  See "2015 Annual Incentive Plan" and "Long-Term Incentive Plan" below for additional information, including the specific performance targets.2018.

The principal duties of the Compensation Committee are to establish the executive compensation strategy of CTBI; approve compensation plans that support the implementation of the strategy; assess and monitor the potential riskrisks associated with various compensation arrangements, especially incentive compensation plans; approve the compensation of the CEO; review the recommendations of the CEO and approve the compensation of the other executive officers of CTBI; and make recommendations to the Board of Directors concerning executive officer and outside director compensation.  The Committee is responsible for establishing, implementing, and continually monitoring adherence with CTBI'sCTBI’s executive compensation philosophy.

To accomplish these responsibilities, the Compensation Committee reviews and approves corporate goals and objectives relevant to the compensation of CTBI'sCTBI’s CEO, and it evaluates the performance of the CEO relative to the approved goals and objectives.  The Committee considers this evaluation of performance when it determines and approves the CEO's compensation considering this evaluation of performance.CEO’s compensation.   Additionally, the Committee reviews compensation levels for CTBI'sCTBI’s other executive officers relative to goals and objectives relevant to their responsibilities, considers the CEO'sCEO’s evaluation of their achievements, and approves their compensation based on this evaluation.

The Committee strives to establish and maintain compensation plans that are: (i) focused on rewarding performance; (ii) aligned with the interests of shareholders; (iii) competitive with the practices of peer companies; and (iv) sufficient to enable CTBI to attract and retain a strong management team.team; and (v) designed to avoid creation of undue risk for CTBI.

The Committee has followed certain guiding principles to ensure the effectiveness of CTBI'sCTBI’s executive compensation strategy.  The Committee recognizes the importance of perceived fairness of compensation practices, both internally and externally, and believes that the long-term success of CTBI and its ability to create value for shareholders is dependent on attracting, motivating, rewarding, and retaining skilled executives.  Significant time is devoted by the Committee to monitoring the relationship between executive pay and CTBI performance, and adjusting compensation plans and practices as needed from year to year to maintain an appropriate alignment of pay with performance.  The Committee recognizes that the competition for talented executives among financial institutions similar to CTBI is intense, and it considers compensation data and other labor market indicators as it reviews CTBI'sCTBI’s compensation plans.  Current economic and industry environments are considered when reviewing executive compensation.  Full disclosure is made to the independent members of the Board of Directors of CTBI'sCTBI’s executive compensation policies, practices, and issues to ensure that all directors understand the implications of the Committee'sCommittee’s decisions.  Likewise, the Committee works with management to ensure that public filings related to executive compensation are transparent and comply with applicable regulations.

The Compensation Committee has established various processes to assist it in ensuring CTBI'sCTBI’s executive compensation program is achieving its objectives.  Among these are:

In addition to its responsibilities for executive compensation, the Committee periodically reviews the compensation provided to the CTBI Board of Directors to ensure that the compensation provided for service on the Board and its committees is commensurate to the amount of work required from the individual directors as well as from the Board in aggregate.  The Committee periodically compares the pay arrangements for the Board and the actual amounts earned by individual directors to amounts paid to outside directors of banking companies in the Peer Group (as defined below) and to survey data for director compensation.  In late 2014,2018, the Committee reviewed the existing compensation program for outside directors of CTBI.  An analysis prepared by Pearl Meyer, the Committee’s independent compensation consultant, revealed that CTBI’s director compensation was significantly below the market median pay for outside directors of other similar financial institutions.  To ensure that CTBI could continue to attract and determined it would be appropriateretain outside directors with the skills and experience necessary to adjustprovide sufficient oversight, the Committee adjusted certain components of the outside director compensation plan.  The annual retainer paid to all outside directors was increased from $35,000 to $42,500, and the Committee established an incremental annual retainer of $5,000 for service on the Board from $30,000 to $35,000.lead independent director.  The Committee maintained the incremental retainer provided toretainers for the Chairman of the Audit and Asset Quality Committee was maintained at $10,000, resulting in a total retainer of $45,000.  The($10,000), as well as the incremental annual retainers  for the Chairman of the Risk and Compliance Committee ($5,000) and the Chairman of the Compensation Committee were maintained at $5,000, in each case resulting in a total retainer of $40,000.  These($5,000).  The Committee’s adjustments were deemed necessary to provide the Board of Directors with compensation that is comparable to amounts paid to outside directors at similar publicly traded financial institutions.  This adjusted Boarddirector compensation waswere approved by the Board of Directors and became effective in January 2015 and will remain in effect for 2016.1, 2019.  For additional information, see "Directors'“Directors’ Compensation."”

The Compensation Committee believes that executive officer compensation is an integral component of CTBI'sCTBI’s business and human resources strategies.  It is important to CTBI'sCTBI’s success that highly talented and experienced individuals serve as executive officers.  The Committee strives to provide compensation which is sufficient to attract and retain such executives.  The Committee seeks to establish executive compensation at fair, reasonable, and competitive levels.  The Committee also believes that executive compensation should be strategy-focused and recognize individual achievements as well as group contributions and CTBI results.  Therefore, the Committee desires to offer a competitive, market-driven executive officer compensation package which provides for a meaningful portion of compensation to be based upon performance.  As a result, CTBI'sCTBI’s executive compensation package includes incentive-based cash and equity compensation in addition to base salary and employee benefits.

The goal of the Compensation Committee is to offer market competitive compensation, without being the highest or lowest provider.  Total compensation packages, including base salaries plus cash- and stock-based incentives, are set at levels the Committee believes are sufficient to attract and retain qualified executives whose performance and success should contribute to shareholder value.  The compensation of Named Executive Officers is based on the same criteria and performance factors used for all other executive officers.

The Compensation Committee may engage outside advisors as necessary to assist with its oversight of executive compensation.   Pearl Meyer & Partners ("(“Pearl Meyer"Meyer” or "Consultant"“Consultant”) has been retained annually since 2012 to review CTBI'sCTBI’s executive compensation plans.  The role of the Consultant is to provide analyses, information, and advice to assist the Committee in making decisions related to compensation of executive officers.  The Committee believes that the Consultant is independent and no conflicts of interest are raised by the work of the Consultant under the criteria specified in SEC rules.

During November 2018, Pearl Meyer also reviewed the compensation program for the Board of Directors in late 2012.  The analysisand found that CTBI'sCTBI’s compensation program for outside directors was structured in a manner that was consistent with banking industry practices, in terms of providing retainers and meeting fees for board and committee service.  However, the amount of compensation provided to CTBI directors was below the median levels of compensation paid to outside directors of banks within the Peer Group and median values reported in survey data for comparable banks.  Based on these results, Pearl Meyer developed several  alternatives for  adjusting the compensation of the Board of Directors.  After consideringAs described above, after reviewing  the outcome of the Consultant's analysis, the Committee decided to gradually increase the compensation of Board members over a period of years to allow CTBI to adjust to the slightly higher annual expensealternatives for Board compensation.  TheCompensation, the Committee agreed to increase Board compensation by adjusting the annual retainers for Board members as well asfrom $35,000 to $42,500 and establishing an incremental annual retainer of $5,000 for the Lead Director.  Incremental annual retainers provided to chairs of Board committees.  In late 2014 and early 2015,for the Committee continued its reviewChairman of the competitivenessAudit and Asset Quality Committee, the Chairman of Boardthe Risk and Compliance Committee, and the Chairman of the Compensation Committee were maintained at their current levels ($10,000, $5,000, and $5,000, respectively). For more information on director compensation and approved a further gradual increase to the Board retainerchanges made for all directors, as previously discussed.  No changes were made to Board compensation arrangements for 2016.  See "Directors' Compensation" for additional details.2019, please see  “Directors’ Compensation.”

CTBI periodically compares its executive pay and business performance, as well as the compensation of the Board of Directors, to a group of comparable, publicly traded financial institutions ("(“Peer Group"Group”).  In establishing a Peer Group, CTBI seeks to include regional bank holding companies that are similar to CTBI in terms of assets, business lines, and geographic footprint.  During 2015,2018, the Committee worked with Pearl Meyer to review the Peer Group to ensure it continued to include organizations that were comparable to CTBI.  TheBased on this review, the Committee concluded there was no need to changedetermined that the existing Peer Group, which includes the fifteenCommittee had approved in 2017, was still appropriate, with one exception. The Committee removed State Bank Financial Corporation due to its acquisition by Cadence Bancorporation.  This  adjustment resulted in the Peer Group of fourteen companies listed below.  The Committee believes the Peer Group provides a reasonable basis of comparison for CTBI due to their similar business lines and geographic locations, as well as their comparable size, as reflected in their assets.  AtFollowing the timeCommittee’s review and adjustment of the Committee's review,Peer Group, the median assets of the Peer Group were about $3.9$4.6 billion, as compared to CTBI'sCTBI’s assets of approximately $3.9$4.2 billion.  The companies included in the Peer Group ranged in asset size from $2.5$2.3 billion to $8.4$10.8 billion.

CTBI'sCTBI’s executive compensation program includes the following major components, each of which are described further below.

 

Salaries for CTBI'sCTBI’s executives are established based upon the scope of their responsibilities, taking into account competitive market compensation paid by other similarly situated companies for comparable positions.  The Committee sets the CEO'sCEO’s base salary, subject to approval of the Board of Directors.  Any salary increase for the CEO is determined based on the Committee'sCommittee’s review of the CEO'sCEO’s leadership and contributions to the achievement of performance objectives for CTBI, which for 20152018 included asset and revenue growth, asset quality, core earnings performance, identification of strategic opportunities, and execution of the current business strategy and operating plan.  The Committee also considers how the CEO'sCEO’s salary compares to salaries of CEO'sCEO’s within the Peer Group.  Base salaries for other executive officers, including the other Named Executive Officers, are approved by the Committee after considering recommendations from the CEO.  In approving any salary increases for Named Executive Officers, the Committee considers performance for the prior year, responsibilities for the upcoming year, how the current salaries compare to those paid by peer companies to executives with similar responsibilities, and CTBI'sCTBI’s budget for salary increases for employees other than executive officers.  The Committee'sCommittee’s objective is to pay base salaries which will be sufficient to attract, retain, motivate, and reward management for successful performance while maintaining affordability within CTBI'sCTBI’s business plan.

The Committee has established a policy of managing executive officer salaries to the market median, recognizing that a series of increases over several years may be required to adjust salaries to the desired level for any executive whose current salary is significantly below the market (contingent upon the executive sustaining the required level of performance).  After considering the performance of both CTBI and individual performance,each executive, as well as how individual officer salaries compared to the market median, the Committee determined that it was appropriate to increase executive salaries for 2016.2019.  The salary increases for 20162019 reflect the Committee'sCommittee’s desire to balance the need to compensate our Named Executive Officers at levels that are competitive with the market and recognize their performance and value to CTBI with the need to control expenses in an economic and regulatory environment that continues to be challenging for CTBI and other financial institutions.  The salary increases approved for the Named Executive Officers for 20162019 ranged from 4.00%3.37% to 5.38%5.36%.   The increase for Kevin Stumbo included both a merit increase and a market adjustment in order to provide a base salary more in line with market salaries for chief financial officers in comparable financial institutions.  The following table shows the 20162018 and 2019 base salary for each Named Executive Officer and the percentage increase over 2015.2018.

The Named Executive Officers, ("NEOs"), other executive officers, and other members of senior management may earn annual cash incentive bonuses as well as stock-based awards under the Senior Management Incentive Compensation Plan ("the Incentive Plan").Plan.  Bonuses and stock awards are earned for achieving targets set for earnings per share ("EPS"(���EPS”) and return on average assets ("ROAA"(“ROAA”) of CTBI.  A cash-based employee incentive plan for employees not covered by another incentive plan is paid based upon the same performance criteria as the Senior Management Incentive Plan.   The Incentive Plan is designed to reward participants for meeting or exceeding annual profit goals, and it is intended to achieve the following objectives:

 

At the beginning of each year, the Committee establishes a target (base) level of performance for EPS and ROAA.  The Committee also establishes a performance range relative to the base level and an associated payment scale which defines the percent of salary that participants may earn as a cash bonus for a given level of performance.  In addition, the Committee establishes a separate payment scale which defines the percentage of salary that participants may receive as a stock award for a given level of performance.  Stock awards under the Incentive Plan may be granted as either restricted shares or stock options.

A portion of the total annual incentive earned under the Senior Management Incentive Plan is paid in restricted shares which vest ratably over four years.  InBeginning in 2012, the Committee reduced the portion of the annual incentive paid in restricted shares in order to offset some of the increase in the cash portion of the annual incentive.  Restricted stock awards granted in January 2016,2019, as a result of performance in 2015,2018, were earnedgranted at the target (base)  performance level.level, consistent with the  adjusted results for ROAA and EPS and  the cash bonus payment determination described above. As a result, the CTBI CEO, the CTB CEO, and the other NEOs earned restricted stock grants for 20152018 performance equal to 20%20.0%, 17.515%, and 15%15.0% of base salary, respectively. The value of these awards is shown in the Stock Awards column of the Summary Compensation Table.

Prior to setting the terms of the Incentive Plan for 2016,2019, the Committee considered the outcomes for 2015,2018, the adjustments made to the Incentive Plan fromsince 2012, through 2015, and the executive compensation strategy adopted in January 2012.

As a result of these discussions, the Committee recommended, and the Board approved, maintaining the Senior Management Incentive Plan for 20162019 in substantially the same form as 2015,2018, except for updating the performance targets to reflect the 20162019 business plan.   Key features of the 2016 Annual2019 Incentive Plan are listed below:

The following table shows the target (base) level of ROAA performance and the cash incentive awards that may be earned by the CTBI CEO, the CTB CEO, and other Named Executive Officers ("(“Other NEOs"NEOs”) for various levels of performance in 2016:2019:

As shown in the table above, executives would earn no incentives for performance below the minimum required level.  To ensure that executive pay varies with company performance, executives earn less than target for results above the minimum required level but below the expectedtarget (base) level, and they may earn larger incentives if results exceed the target (base) level.  Payments are "capped"“capped” at a maximum level to preclude overpayment and control the cost of the plan.  The maximum payment provided under the 2019 plan, as well as prior versions of the plan from 2015 and 2014 plansthrough 2018, is 200% of the target (base) opportunity, which was reduced from the maximum 450% of target applicable to the 2014 plan, in recognition of actions taken in prior years, including salary adjustments and increases to the target (base) amounts.

Other seniorCTB officers includingresponsible for the various consolidated functions as selected by the CTB CEO, the presidents of each market, division heads, and certain senior trustthe Community Trust and Investment Company officers ("responsible for various departments as selected by the CTIC CEO (“Group II Participants"Participants”) may receive awards for the year ending December 31, 20162019 based on the same performance measures and targets applicable to executive officers.  TargetPotential cash incentive awards for Group II participants, expressed as percentages of base salary, range from 6.30%3.50% to 8.75% of salary.  Other membersSenior vice presidents of managementconsolidated functions who are selected for participation by the Compensation Committee ("(“Group III Participants"Participants”) may receive awards for the year ending December 31, 20162019 based on the targets applicable to executive officers, ranging from 4.95%2.75% to 6.71% of salary.  

The following table shows the target (base) level of ROAA performance and the stock awards that may be earned by the CTBI CEO, the CTB CEO, and other executive officers, including the Other NEOs, for 20162019 performance. The stock awards shown below as percentages of salaries are the same as those used in the 20152018 Incentive Plan. Beginning in 2016, the Committee reduced the percentage of the target (base) award earned for performance at the minimum level from 90% to 50% for cash and stock awards.  In keeping with the changes made to the cash portion of the Incentive Plan in 2015, the maximum potential stock award wasis 115% of the target award, reduced from 150% of the target (base) to 115% of target (base)award in 2015 and 2016:2014:

The Committee at its sole discretion may choose to issue restricted stock, stock options, or a combination of options and restricted stock of an amountin the proportion recommended by the Compensation Committee and approved by the Board of Directors of Community Trust Bancorp, Inc. subject to any limitations of the 2015 Stock Ownership Incentive Plan.  For the last several years, the Committee has determined that any stock awards earned under the Incentive Plan would be granted as restricted shares, and the restrictions would lapse pro-rata over four years from the date of grant, contingent upon the executive'sexecutive’s continued service with CTBI.  In the event of certain participant employee termination events occurring within 24 months of a change in control of CTBI or the death of a participant, the restrictions will lapse.lapse on any unvested restricted shares on the date employment is terminated.  In the event the participant becomes disabled, restrictions will lapse on a pro-rata basis, dependent on time served from the date of grant through the date of termination due to disability.  In the event of a participant'sparticipant’s retirement prior to the lapse of all restrictions, the Committee will have discretion to review and revise any restrictions.  The actual number of any restricted shares granted will be determined based on the stock price on the date of grant (which would be in early 2017,2020, after the Committee has the opportunity to review the achievement of performance goals for 2016)2019).

For reference, the EPS and Net Income targets associated with the 20162019 target (base) level of ROAA are $2.77$3.49 and $48,684,000,$61,984,000, respectively.   For comparison, the cash incentive percentages of salary at target (base) for the CEO and other NEOs are unchanged from 2015,2018, and the stock award percentages of base salary at target (base) for the CEO and other NEOs are also unchanged from 2015.2018.   The Committee may adjust the cash and stock incentive percentages of salary in future years as it continues to implement the executive compensation strategy it adopted in 2012.  During the last several years, by gradually increasing the cash portion of the Incentive Plan and the total annual incentive opportunity, the Committee has brought CTBI'sCTBI’s plan more in line with typical market practices and increased the portion of total pay that is earned for performance.

CTBI has structured its incentive compensation plans in a manner which is designed to permit a large percentage of the total potential incentive compensation to be paid to participants who are not Named Executive Officers.  During 2016,2019, qualifying executive officers, other members of senior management, and other full-time employees are eligible to participate in various company incentive compensation plans.  Based on the number of participants and structure of CTBI'sCTBI’s incentive compensation plans, if CTBI achieves its 20162019 targets at the target (base) level, participants other than the Named Executive Officers will receive 83%75% of the total amount paid under all company-sponsored incentive compensation plans.

When it reviewed CTBI'sA key component of the  executive compensation arrangements during 2011,strategy approved by the Committee determined thatin 2012 was  the implementation of a forward-looking, performance-based long-term incentive compensation plan. The long-term incentive plan would accomplish a number of its objectives for improvingis intended to balance the executive compensation program, including: (i) providing balance to other, more short-term components of pay (such as base salaries and annual cash incentives), (ii) increasingand  increase the portion of total pay that is contingent upon performance, and (iii) improving the competitiveness of pay versus comparable bank holding companies.performance.

After considering a variety of alternatives for performance-contingent long-term incentives,several potential plan designs, the Committee recommended, and the Board approved the use of performance units beginning in 2012.  Performance units are long-term incentives which are earned for achieving one or more financial performance goals over a multi-year period.  Awards of performance units are permitted under CTBI'sCTBI’s shareholder-approved 2015 Stock Ownership Incentive Plan.  Only executive officers of CTBI (including the CEO and the other NEOs)  will participate in the performance unit plan, as thesethey are the executivesindividuals  who are held accountable for creating shareholder value.  As it reviewed the executive compensation program in late 2015,2018,  the Committee determined it would be appropriatedecided to continue granting performance units.  Accordingly, in early 2016,2019, the Committee approved long-term awards to the CEO and other NEOs, as further described below.

The Committee believes that earnings growth, when sustained over a period of time, will create value for CTBI shareholders.  For this reason, the Committee approved awards of performance units that require executives to achieve a target for cumulative net income over a three-year period.    In early 2016,2019, the Committee approved grants for a three-year period covering 2016, 2017,2019, 2020, and 2018.2021.  The Committee believes the cumulative net income performance requirement is achievable but challenging, given the gradual improvement in the U.S. economy, but notwithstanding the increasing regulatory burden onenvironment of the banking industry and the challenges to the local economy in some of the markets served by CTBI.  Targets for cumulative net income growth were set after giving consideration to CTBI'sCTBI’s results in prior years, CTBI'sCTBI’s forecasts of future results thewithin its strategic plan, local economy,economic conditions, and industry performance.

The Committee believes the continued use of performance units will further: (i) focus the executive officers on creating shareholder value through sustained growth in earnings; (ii)earnings, improve the alignment of pay with performance for all executive officers;officers, and (iii) create a more balanced incentive compensation program.  To the extent thatThe use of cash-based performance units are utilized,avoids any potential dilution to existing shareholders (as might occur if awards were stock-based) is avoided.  In keeping with its plan for gradual adjustments to executive incentive potentials under the annual incentive plan, the.   The Committee gradually adjusted the target incentive percentages of salary associated with the awards of performance units in 2012, 2013, and 2014.  This approach enabled the Committee2014 in order to gradually  change the mix of executive compensation, ultimately resulting in a greater portion of executive compensation being contingent on performance.

The table below shows the percentpercentage of salary that may be earned by the CTBI CEO, the CTB CEO, and  other executive officers, including the Other NEOs, based on achievement of the cumulative net income goal for 20162019 through 2018.2021.  Any earned performance units will be paid in early 2019,2022, after the Committee evaluates actual results for 20162019 through 20182021 versus the cumulative net income goal.

Voluntary or involuntary termination of employment prior to the end of the performance period and/or prior to the payment of any earned performance units will result in forfeiture of any outstanding performance units, except as noted below.  In the case of termination of employment by reason of death,  disability, or disabilityretirement prior to the expiration of the performance period, any outstanding performance units will be deemed to have been earned in an amount equal to the amount payable at targetthe maximum level multiplied by the percentage that would have been earned, assuming that the rate at which the performance goal has been achieved as of the date of such death or disabilitytermination of employment would have continued until the end of the performance period.  InUpon the caseoccurrence of certain termination of employment by reason of retirement prior toevents within the expiration24 month period beginning on the date of the performance period, the performance units will be payable in an amount equal to: (a) the amount to which the participant would have been entitled if 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 was employed during the performance period and the denominator of which is the number of months in the performance period.  Upon a change in control, any outstanding performance units granted under the 2015 Stock Ownership Incentive Plan will become fully vested and payable in an amount which is equal to the greater of (a) the maximum amount payable under the performance unit at the target level multiplied by the percentage that would have been earned, assuming that the rate at which the performance goal has been achieved as of the date of such change in control termination event would have continued until the end of the performance period or (b) the maximum amount payable under the performance unit at target level multiplied by the percentage of the performance period completed at the time of the change in control.control termination event.

As noted above, in 2012, CTBI began granting performance units with a three-year performance period. Accordingly, inIn early 2016,2019, the Committee reviewed performance for the three-year period ended December 31, 2015.2018.  The cumulative net income goal for 2013 – 20152016-2018 was $144.0$153.0 million, and actual cumulative net income for the period was $134.9$158.1 million.  ActualThe Committee determined it would be appropriate to adjust the calculation of results for the three-year period ending December 31, 2018 to exclude the windfall benefits from the Tax Cuts and Jobs Act and the additional one-time bonuses (paid only to non-executive employees) in 2017; reflect a higher effective tax rate for 2018 consistent with the actual effective tax rate for 2017; and exclude the additional accrual in 2018 required for the Federal Reserve Consent Order discussed above.  The adjusted cumulative net income for the 2016-2018 period was $147.3 million.  Adjusted results were between the minimum required level of performance of $129 million andbelow the target (base) level.  As a result,amount of $153.0 million, but slightly above the performance level ($147.0 million) which would trigger an incentive equal to 75% of the executives’ target (base) incentive potential.  Accordingly, the Committee approved incentive payments to the CEO and other Named Executive Officers earned incentives under the terms of the performance units equal to 50%75% of their target incentive potentials.  These amountspotentials under the Long-Term Incentive Compensation Plan for the 2016-2018 performance period.  Amounts earned under the plan and paid to executives in early 2019 are includedshown in the "Non-EquityNon-Equity Incentive Plan Compensation"Compensation column of the Summary Compensation Table included under "Executive Compensation" in this proxy statement.Table.

CTBI'sCTBI’s policy is to minimize the use of executive benefits and perquisites.  The Named Executive Officers participate in the same benefit plans as other CTBI employees, with the few exceptions described below.  During 2015,2018, there were no changes to the benefits and perquisites provided to Named Executive Officers, and none have been approved for 2016.2019.

To align the interests of all employees, including Named Executive Officers, with those of shareholders, CTBI has implemented an Employee Stock Ownership Plan ("ESOP"(“ESOP”) which provides awards of CTBI stock subject to vesting requirements.  Participation in the ESOP is available to any employee of CTBI or its subsidiaries who has been employed for one year, completed 1,000 hours of service, and attained the age of 21.  CTBI currently contributes 4.0% of covered employees'employees’ gross wages to the ESOP.  ESOP contributions are used to acquire shares of CTBI stock on the open market.

CTBI has established a 401(k) Plan under which employees can contribute from 1.0% to 20.0% of their annual salary, up to applicable limits.  CTBI provides a matching contribution equal to 50% of the first 8.0% of salary contributed by the employee.  CTBI also provides health insurance, life insurance, and other benefit programs that are usual and customary within the banking industry in order to attract and retain employees.  Named Executive Officers are eligible to participate in these plans on the same basis as other employees, subject to IRS limits.

CTBI provides supplemental life insurance to its Named Executive Officers, as well as other senior and key management.  The plan provides a split-dollar share of death benefits at an amount necessary to provide the Named Executive Officers with a total company-provided death benefit of three times their annual salary.  This amount is consistent with the death benefit provided to other eligible employees.  Additionally, each Named Executive Officer and other senior and key employees are provided a post-retirement death benefit equal to one times his or her annual salary at the time of retirement.  The benefits are funded with bank-owned life insurance policies.  CTBI will recover its plan costs upon the death of the covered individual, and the executive'sexecutive’s beneficiary will receive a portion of the insurance proceeds.  The Committee believes the supplemental life insurance program is common within the banking industry and provides an incentive for long-term employment with CTBI.

CTBI does not provide significant perquisites or personal benefits to executive officers.  The Named Executive Officers, as well as other executive officers, members of senior management, and key employees, are provided country club memberships and other perquisites with an aggregate individual annual value of less than $10,000.

Unlike some other banks in its Peer Group, CTBI does not provide any supplemental executive retirement plan.  CTBI allows executives to voluntarily defer receipt of any cash bonuses earned under the annual incentive plan.Incentive Plan.

CTBI does not provide employment agreements to executives. Due to ongoing industry consolidation, CTBI has established termination of employment and change in control agreements ("(“Severance Agreements"Agreements”) with each of its Named Executive Officers, other executive officers, and certain other senior officers.  Severance Agreements are provided in order to attract and retain key executives by protecting them in the event of a change in control.  The Severance Agreements are effective for a term equal to the longer of three years or the covered period should a change in control of CTBI occur during such three-year period.  These agreements are automatically renewable for additional one-year periods.  The covered period during which the terms and conditions of the Severance Agreements are effective is the period of time following a change in control equal to: (i) two years following the occurrence of the change in control in the event of an involuntary termination or a voluntary termination following a change in duties or (ii) the thirteenth month following the change in control in the event of a voluntary termination not preceded by a change in duties.

The Severance Agreements require the payment to a Named Executive Officer, other executive officer, or senior officer of a severance amount in the event of an involuntary or voluntary termination of employment after a change in control of CTBI during the covered period.  The severance amount payable under the Severance Agreements is equal to: (i) 2.99 times the Named Executive Officer'sOfficer’s or other executive officer'sofficer’s base annual salary in the event of involuntary termination or in the event of a voluntary termination of employment preceded by a change in duties subsequent to a change in control of CTBI, or (ii) 2.00 times the Named Executive Officer'sOfficer’s or other executive officer'sofficer’s annual base salary in the event of a voluntary termination of employment not preceded by a change in duties subsequent to a change in control of CTBI.

For purposes of the Severance Agreements, a change in control occurs when: (i) any person, including a group under Section 13(d)(3) of the Securities Exchange Act of 1934 is or becomes the owner of 30% or more of the combined voting power of CTBI'sCTBI’s outstanding securities; (ii) as a result of, or in connection with, any tender offer, exchange offer, merger or other combination, sale of assets or contested election, the persons who were directors of CTBI before such transaction(s) cease to constitute a majority of the Board of Directors of CTBI or successor of CTBI; (iii) a tender or exchange offer is made and consummated for the ownership of 30% or more of the combined voting power of CTBI'sCTBI’s  outstanding voting securities; or (iv) CTBI transfers substantially all of its assets to another corporation that is not a wholly-owned subsidiary of CTBI.

The Compensation Committee believes the use and structure of the Severance Agreements are consistent with CTBI'sCTBI’s compensation objectives to attract, motivate, and retain highly qualified executives.  The Committee also believes that the Severance Agreements promote job stability, provide a measure of financial security, preserve morale and productivity, and encourage retention during the period of uncertainty that accompanies an actual or potential change in control.  The Committee periodically reviews the terms of the Severance Agreements in the context of CTBI'sCTBI’s other executive compensation arrangements, changes in government regulations and trends in competitive practices.

No termination of employment or change in control payments were made under the Severance Agreements in 2015,2018, and there were no changes made to the terms of the Severance Agreements during 20152018 or to date in 2016.2019.

The Compensation Committee is responsible for the oversight of compensation risk.  The Committee annually reviews the Senior Management Incentive Compensation Plan, the Long-Term Incentive Compensation Plan, and the Employee Incentive Compensation Plan, as well as other compensation arrangements, to evaluate their potential for creating or increasing risk to CTBI.  During 2015,2018, the Committee reviewed the compensation risk assessment performed by management and concluded that CTBI'sCTBI’s compensation plans do not motivate or reward management for taking inappropriate risks and do not create any risks that are reasonably likely to have a material adverse impact on CTBI.

The Committee has adopted a recoupment policy applicable to members of CTBI'sCTBI’s Executive Committee. The policy provides, in general, that in the event any such person'sperson’s fraud, dishonesty or recklessness substantially contributes to CTBI'sCTBI’s material noncompliance with financial reporting requirements under securities laws resulting in CTBI'sCTBI’s obligation to prepare an accounting restatement, the Committee will direct CTBI to use prompt and reasonable efforts to recover from such person the amount of specified performance-based compensation determined by the Committee to have been materially affected by the restatement that is in excess of the amount of performance-based compensation which would have otherwise been received by such person, assuming the financial statements had originally been prepared as restated.  The Committee may approve amendments to the recoupment policy at any time, including amendments to conform to regulations adopted by the Securities and Exchange Commission or applicable listing requirements.

In 2015,2018, we submitted our executive compensation program to an advisory, nonbinding vote of shareholders (i.e., "say“say on pay"pay”).  At the 20152018 annual shareholders meeting, approximately 96% of votes cast were voted in favor of a resolution approving our executive compensation program.  Based on these results, the Committee concluded that shareholders supported CTBI'sCTBI’s approach to executive compensation.  In addition, at the 2011 Annual Shareholders' Meeting,2017 annual shareholders meeting, more than 85%80% of votes cast were in favor of having an annual say on pay vote.  Accordingly, at the 20162019 annual meeting, shareholders again are being asked to approve an advisory, nonbinding resolution in favor of CTBI'sCTBI’s executive compensation arrangements.  Although the results of annual say on pay resolutions are not binding on CTBI, the Committee welcomes feedback from shareholders, and it will consider the outcome of each year'syear’s say on pay vote as part of its ongoing review of the executive compensation program.

The Compensation Committee of CTBI has reviewed and discussed the Compensation Discussion and Analysis with management.  Based on that review and discussion, the Committee recommended to the Board of Directors that the Compensation Discussion and Analysis be included in this Proxy Statement.

EXECUTIVE COMPENSATION

The following table sets forth the total annual compensation paid or accrued by CTBI to or for the account of the Chief Executive Officer, the Chief Financial Officer, and each of the other three most highly compensated executive officers of CTBI ("(“Named Executive Officers"Officers” or "NEOs"“NEOs”) for the fiscal years ended December 31, 2015, 2014,2018, 2017, and 2013.2016.

The following table sets forth the information regarding plan based awards granted to NEOs in 2015.2018.

The following table sets forth the estimated payouts of non-equity incentive plan awards that may result from the performance units granted to the Named Executive Officers in 20152018 and 2014,2017, outstanding as of December 31, 2015:2018:

There were no stock option exercises by NEOs in 2018.  The following tables set forth information concerning options exercised by the NEOs and restricted stock vested during 20152018 and the number and value of unexercised options and restricted stock held by the NEOs of CTBI at December 31, 2015.2018.

CTBI provides additional benefits, not included in the previous tables, to the NEOs in the event of a change in control.  The following table provides an estimate of the value of such benefits, assuming the change in control had occurred on December 31, 2015.2018.

SHAREHOLDER PROPOSALS

MISCELLANEOUS

The Board of Directors of CTBI knows of no other business to be presented to the Annual Meeting.  If other matters should properly come before the Annual Meeting or any adjournment thereof, a vote may be cast pursuant to the accompanying proxy in accordance with the judgment of the person or persons voting the proxy.  The Board of Directors urges each shareholder who does not intend to be present and to vote at the Annual Meeting to submit a proxy as promptly as possible.