NOTICE OF THE
2021
2023 ANNUAL MEETING OF SHAREHOLDERS

March 12, 202117, 2023

To our Shareholders:

The Annual Meeting of Shareholders of Stock Yards Bancorp, Inc., a Kentucky corporation, will be held on Thursday, April 22, 202127, 2023, at 10:00 a.m., Eastern Time, solely by remote communication in a virtual-only format. The meeting will be accessible on the Internet at www.virtualshareholdermeeting.com/SYBT2021SYBT2023. The items of business to be presented at the Annual Meeting include the following proposals:

The record date for the determination of the shareholders entitled to vote at the meeting or at any adjournment thereof is the close of business on February 26, 2021.March 3, 2023.

A list of shareholders of record as of the record date and entitled to vote at the Annual Meeting will be made available for inspection by shareholders for any legally valid purpose related to the Annual Meeting (i) at the principal executive offices of Stock Yards Bancorp, beginning five business days prior to the meeting date and (ii) on the virtual shareholder meeting web site on the date of the meeting.

Your vote is important.important. Whether or not you plan to virtually attend the Annual Meeting of Shareholders, we hope you will vote as soon as possible. You may vote your shares via a toll free number, over the Internet,electronically using your computer, telephone or mobile device, or by completing, signing, dating and returning the enclosed proxy card in the mailing envelope provided. Instructions regarding each of the threethese methods of voting are contained in the accompanying Proxy Statement. I encourage you to take advantage of eitherone of the telephone or Internetelectronic voting options. Both offerEach offers a quick and convenient way to cast votes electronically and assureassures that your shares are represented at the meeting.

Thank you for your support of Stock Yards Bancorp. If your schedule permits, I hope you will join us throughvia the live webcast.

Stock Yards Bancorp, Inc.

PROXY STATEMENT

FOR THE 20212023 ANNUAL MEETING OF SHAREHOLDERS
APRIL 22, 2021

PROXY HIGHLIGHTS

This summary highlights information contained elsewhere in this Proxy Statement about the Annual Meeting and is not complete. We encourage you to read the entire Proxy Statement before voting your shares at the meeting. For complete information about our performance and financial results for 2022, please review our Annual Report on Form 10-K which accompanies this Proxy Statement.

Annual Meeting Information

Voting Matters and Board Recommendations

How to Vote Your Shares

You may vote your shares using one of the following methods:

YOUR VOTE IS IMPORTANT!

PLEASE CAST YOUR VOTE PROMPTLY

Attending the Virtual Annual Meeting

Our 2023 Annual Meeting will be held in a virtual-only format via a live webcast. You will be able to attend the meeting online, vote your shares electronically and submit questions either before or during the meeting by following the information and instructions provided in this Proxy Statement. To attend the Annual Meeting online, simply visit the virtual meeting website at www.virtualshareholdermeeting.com/SYBT2023. In order to be admitted to the meeting, you will need to enter the 16-digit control number located on your proxy card, voting instruction form or email notice included with your proxy materials. For more information about joining the online meeting, go to page 6.

Table of Contents

GENERAL INFORMATION ABOUT THE ANNUAL MEETING

About This Proxy Statement

This Proxy Statement is being furnished to the shareholders of Stock Yards Bancorp, Inc. in connection with the solicitation by its Board of Directors of proxies to be used at the 2023 Annual Meeting of Shareholders to be held by live webcast on Thursday, April 22, 2021, at 10:00 a.m., Eastern Time. The proxies may also be voted at any adjournments or postponements of the Annual Meeting.Shareholders. This Proxy Statement includes information regarding the matters to be acted upon at the 20212023 Annual Meeting and certain other information required by the Securities and Exchange Commission, or “SEC”, and the rules of the Nasdaq Stock Market.Market, or “Nasdaq”. This Proxy Statement is first being mailed to shareholders on or about March 12, 2021.17, 2023.

Throughout this Proxy Statement, unless the context otherwise requires, the terms “Stock“Stock Yards Bancorp”Bancorp”, “Bancorp”“Bancorp”, “the Company”“the Company”, “we”“we”, “us”“us” or “our”“our” all refer to Stock Yards Bancorp, Inc. and its direct and indirect wholly-owned subsidiaries, including Stock Yards Bank & Trust Company, which we refer to in this Proxy Statement as “the Bank”“the Bank”. Stock Yards Bancorp owns 100% of Stock Yards Bank & Trust Company. Because Stock Yards Bancorp has no significant operations of its own, its business and that of Stock Yards Bank & Trust Company are essentially the same.

Important Notice Regarding the Availability of Proxy Materials for the Shareholders Meeting to Be Held on April 22, 2021: The Notice and Proxy Statement and Annual Report are available at www.proxyvote.com and on the investor relations page of the Company’s web site at https://stockyardsbancorp.q4ir.com.

GENERAL INFORMATION ABOUT THE ANNUAL MEETING

Proxy Materials

Why have I received these materials?

We are mailing these proxy materials to you in connection with our 20212023 Annual Meeting of Shareholders, which will be held on Thursday, April 22, 2021,27, 2023, at 10:00 a.m., Eastern Time. As a shareholder, you are invited to participate in the meeting via live webcast and vote on the matters described in this Proxy Statement.

What is included in the proxy materials?

These proxy materials include:

What is a proxy?

We are soliciting your proxy to vote the shares of the Company’s common stock that you own at the Annual Meeting. A proxy is your designation of another person to vote stock you own. That other person is called a proxy. If you designate someone as your proxy in a written document, that document is also called a proxy or a proxy card. When you designate a proxy, you may also direct the proxy how to vote your shares. James A. Hillebrand, the Company’s Chairman and Chief Executive Officer, and Philip S. Poindexter, the Company’s President, have been designated as the proxies to cast the votes of Bancorp’s shareholders at the Annual Meeting. The proxies will vote your shares according to the instructions you provide on the proxy card or by telephone, mobile device or over the Internet.

Voting Information

What am I voting on?

Where can I find more information about these voting matters?

Who is entitled to vote at the Annual Meeting?

Holders of record of Common Stock (“Common Stock”) of Stock Yards Bancorp as of the close of business on February 26, 2021March 3, 2023 will be entitled to vote at the Annual Meeting. On February 26, 2021,March 3, 2023, there were 22,732,97629,287,064 shares of Common Stock outstanding and entitled to one vote on all matters presented for vote at the Annual Meeting.

How do I vote my shares without participating in the Annual Meeting?

If you are a “record” shareholder of Common Stock (that is, if you hold Common Stock in your own name in Stock Yards Bancorp’s stock records maintained by our transfer agent), you may vote your shares without participating in the Annual Meeting by using one of the following threefour options:

Use the Internet to transmit your voting instructions. Vote by 11:59 p.m., Eastern Time, on April 21, 2021 for shares held directly and by 11:59 p.m., Eastern Time, on April 19, 2021 for shares held in a Plan. Have your proxy card in hand when you access the web site and follow the instructions to create an electronic voting instruction form.

Use any touch-tone telephone to transmit your voting instructions. Vote by 11:59 p.m., Eastern Time, on April 21, 2021 for shares held directly and by 11:59 p.m., Eastern Time, on April 19, 2021 for shares held in a Plan. Have your proxy card in hand when you call and then follow the instructions.

Mail

Mark, sign and date your proxy card and either return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717.

Can I vote my shares during the meeting?

You may vote online during the meeting by logging into the virtual meeting web site with the 16-digit control number foundlocated on your proxy card, voting instruction form or email notice included with your proxy materials and following the on-screen instructions. You may also continue to vote your shares by mail, telephone, mobile device or internet prior to the virtual meeting by following the voting instructions included in your proxy materials. If you have already voted using one of these methods you do not need to vote again at the meeting unless you wish to change your vote or revoke a previous proxy.

If my shares are held by my broker, will my broker vote my shares for me?

If your shares are held in a stock brokerage account or by a bank or other holder of record (that is, in “street name”), you are considered the beneficial owner of those shares. This Notice of Annual Meeting and Proxy Statement and any accompanying documents have been forwarded to you by your broker, bank or other holder of record. As the beneficial owner, you have the right to direct your broker, bank or other holder of record how to vote your shares by using the voting instruction card provided by them or by following their instructions for voting by telephone, mobile device or over the Internet. Beneficial owners who wish to vote their shares electronically during the Annual Meeting may do so by following the instructions from their broker that accompany their proxy materials.

Who votes the shares held in my Stock Yards KSOP account?

If you are a participant in the Stock Yards Bank & Trust Company 401(k) and Employee Stock Ownership Plan (“KSOP”), you have the option of receiving your voting information either electronically or by regular postal mail. Plan participants who have elected to receive their voting information electronically should follow the instructions contained in the electronic communication. If you have not affirmatively elected to receive voting information for your KSOP shares electronically, you will receive a paper version of the proxy card via postal mail that will include the shares you own through your KSOP account. That proxy card will serve as a voting instruction card for the trustee of the plan. If you own shares through the plan and do not vote electronically or by mail, the plan trustee will be instructed by the plan’s administrative committee to vote the plan shares as the Board of Directors recommend.recommends.

What if I return my proxy card but do not provide voting instructions?

If you vote by proxy card, your shares will be voted as you instruct. If you return your proxy card but do not mark your voting instructions on your signed card, James A. Hillebrand, Chairman and Chief Executive Officer, and Philip S. Poindexter, President, as proxies named on the proxy card, will vote your shares FOR the election of the ten13 director nominees, FOR the ratification of BKD,FORVIS, LLP, and FOR the approval of the compensation ofsay-on-pay proposal and 1 YEAR on the named executive officers.say-on-frequency proposal.

Can I change my vote after I have voted?

Yes. You may change your vote at any time before the polls close at the Annual Meeting. You may do this by:

Your participation in the Annual Meeting will not have the effect of revoking a proxy unless you notify our Corporate Secretary in writing before the polls close that you wish to revoke a previously submitted proxy.

What is a broker non-vote?

If you are a beneficial owner whose shares are held of record by a broker, you must instruct the broker how to vote your shares. If you do not provide voting instructions, your shares will not be voted on any proposal on which the broker does not have the discretionary authority to vote. This is called a “broker non-vote.” In these cases the broker can register your shares as being present at the Annual Meeting for purposes of determining the presence of a quorum but will not be able to vote on those matters for which specific authorization is required under the rules of the New York Stock Exchange (“NYSE”) that govern brokers.

If you are a beneficial owner whose shares are held of record by a broker, your broker has discretionary voting authority to vote your shares on the ratification of BKD,FORVIS, LLP (Item(Proposal 2) even if the broker does not receive voting instructions from you. However, your broker does not have discretionary authority to vote on the election of directors (Item(Proposal 1), the say-on-pay proposal (Proposal 3) or the approval of executive compensation (Item 3)say-on-frequency proposal (Proposal 4) without instructions from you, in which case a broker non-vote will occur and your shares will not be voted on these matters.

What constitutes a quorum for purposes of the Annual Meeting?

Holders of a majority of the outstanding shares of Common Stock entitled to vote at the Annual Meeting must be present at the Annual Meeting or represented by proxy for the transaction of business. This is called a quorum. Proxies marked as abstaining (including proxies containing broker non-votes) on any matter to be acted upon by shareholders will be treated as present at the meeting for purposes of determining a quorum but will not be counted as votes cast on such matters. If a quorum is not present, we may propose to adjourn the meeting to solicit additional proxies and reconvene the meeting at a later date.

What vote is required to approve each item?Proposal?

You may vote “FOR” each nominee for director or “AGAINST” each nominee, or “ABSTAIN” from voting on one or more nominees. Unless you mark “AGAINST” or “ABSTAIN” with respect to a particular nominee or nominees or for all nominees, your proxy will be voted “FOR” each of the director nominees named in this Proxy Statement. A nominee will be elected as a director if the number of “FOR” votes exceeds the number of “AGAINST” votes.

The selection offollowing chart describes the independent registered public accounting firm will be ratified if the votes cast for it exceed the votes cast against it.

The proposal to approve the compensation of our named executive officers disclosed in this Proxy Statement will pass if votes cast for it exceed votes cast against it. Because this vote is advisory, it will not be binding upon Bancorp or the Board of Directors.

Any other itemproposals to be voted uponconsidered at the Annual Meeting, the vote required to elect directors and to approve each of the other proposals and the manner in which votes will pass if votes cast for it exceed votes cast against it.be counted.

What happens if the Annual Meeting is adjourned or postponed?

Your proxy will still be effective and will be voted at the rescheduled meeting in the same manner as it would have been voted at the originally scheduled meeting. You will still be able to change or revoke your proxy until it is voted.

Who counts the votes?

Broadridge Financial Solutions will count votes cast by proxy at the Annual Meeting. They will also certify the results of the voting and will also determine whether a quorum is present at the meeting. Any votes cast electronically during the Annual Meeting will be included in the final voting tally.

How are abstentions and broker non-votes treated?

You may abstain from voting on one or more nominees for director. You may also abstain from voting on any or all other proposals. Abstentions will be treated as shares that are present and entitled to vote for purposes of determining the presence of a quorum, but will not be counted in the number of votes cast for or against any nominee or with respect to any other matter. If a broker does not receive voting instructions from the beneficial owner of shares on a particular matter and indicates on the proxy that it does not have discretionary authority to vote on that matter, we will treat these shares as present at the meeting for purposes of determining a quorum but the shares will not count as votes cast on the matter. Abstentions and broker non-votes will not affect the outcome of any matters to be voted on at the Annual Meeting.

How does the Board recommend that I vote my shares?

The Board recommends a vote FOR each of the nominees for director set forth in this Proxy Statement, FOR the ratification of the selection of the independent registered accounting firm, and FOR the approval of the compensation ofsay-on-pay proposal and 1 YEAR on the named executive officers.say-on-frequency proposal.

With respect to any other matter that properly comes before the Annual Meeting, the proxy holders will vote as recommended by the Board of Directors or, if no recommendation is given, in their own discretion in the best interests of Stock Yards Bancorp. At the date this Proxy Statement went to press, the Board of Directors had no knowledge of any business other than that described herein that would be presented for consideration at the Annual Meeting.

Is my vote confidential?

Proxy instructions, ballots and voting tabulations that identify individual shareholders are kept confidential from our management and Board of Directors to protect your voting privacy. We will not disclose the proxy voting instructions or ballots of individual shareholders unless disclosure is required by law and in certain other limited circumstances. If you write comments on your proxy card, the card may be forwarded to our management and Board of Directors to review your comments.

Who will bear the expense of soliciting proxies?

Stock Yards Bancorp will bear the cost of soliciting proxies in the form enclosed. In addition to the solicitation by mail, proxies may be solicited personally or by telephone, facsimile or electronic transmission by our employees. We reimburse brokers holding Common Stock in their names or in the names of their nominees for their expenses in sending proxy materials to the beneficial owners of such Common Stock. The Company has engaged the services of Laurel Hill Advisory Group, LLC.,LLC, a professional proxy solicitation firm, to aid in the solicitation of proxies from certain brokers, bank nominees and other institutional owners. The Company’s costscost for such services will not exceed $7,500be $8,500 plus reasonable out of pocket expenses.

How can I find the voting results of the Annual Meeting?

Preliminary results will be announced at the Annual Meeting. Final results will be published in a Current Report on Form 8-K that we will file with the SEC within four business days after the Annual Meeting.

Virtual Meeting Information

Why are you holding a virtual meeting instead of a physical meeting?

The Annual Meeting will be conducted in an online, virtual-only format. This format enables us to leverage technology to communicate more efficiently with our shareholders. We can provide a consistent experience for all our shareholders regardless of geographic location and allow all shareholders with internet access to attend and participate in the meeting without the cost of travel. We have designed the virtual meeting format to provide the same participation opportunities as were provided at our past in-person meetings, including the ability to vote your shares and ask questions during the meeting.

How do I participate in the meeting?

To participate in the virtual meeting, visit www.virtualshareholdermeeting.com/SYBT2021SYBT2023 and enter the 16-digit control number includedlocated on your proxy card, voting instruction form or email notice that accompanied your proxy materials. You may log into the meeting platform beginning at 9:45 a.m., Eastern Time, on April 22, 2021.27, 2023. The live audio webcast will begin promptly at 10:00 a.m., Eastern Time. We encourage shareholders to access the virtual meeting web site prior to the start of the meeting and to allow sufficient time to complete the online registration process.

What are the technical requirements for accessing the online meeting site?

The virtual meeting platform is fully supported across browsers (Internet Explorer,(Microsoft Edge, Firefox, Chrome and Safari) and devices (desktops, laptops, tablets and cell phones) running the most updated version of applicable software and plugins. Participants should ensure that they have a strong Internet connection wherever they intend to participate in the meeting. Participants should also give themselves ample time to log in and ensure that they can hear streaming audio prior to the start of the meeting.

Will I have an opportunity to submit a question?

Yes, shareholders will have the opportunity to submit questions if they choose. If you wish to submit a question, you may do so in two ways. If you want to ask a question before the meeting, you may log into www.proxyvote.com and enter your 16-digit control number. Next, click on "Question“Question for Management,"” type in your question and click "Submit."“Submit.” Alternatively, if you want to submit your question during the meeting, log into the virtual meeting platform at www.virtualshareholdermeeting.com/SYBT2021SYBT2023, click the Q&A button to open the question panel, type your question into the fieldbox titled “Submit“Ask a Question” on the meeting screen and click "Submit.“Submit.” Shareholders may choose from a list of optional question topics or enter their own live question in the box provided. Questions and answers will be grouped by topic and substantially similar questions will be grouped and answered together.

Questions pertinent to meeting matters will be answered during the meeting, subject to time constraints. Shareholders should refer to the Rules of Conduct and Procedures for the meeting that will be posted on the virtual meeting web site for guidelines regarding the submission of questions, including certain topics and subject matter that we will consider inappropriate for purposes of the meeting. Any questions pertinent to meeting matters that cannot be answered during the meeting due to time constraints will be posted online and answered at www.syb.com. The questions and answers will be available as soon as practical after the meeting and will remain available until one week after posting.

What if I have lost or misplaced my 16-digit control number?

If you no longer have your control number or were not a shareholder on February 26, 2021,March 3, 2023, you may still enter the meeting as a guest in listen-only mode. To access the meeting as a guest, visit www.virtualshareholdermeeting.com/SYBT2021SYBT2023 and enter the requested information on the welcome screen. However, if you attend the meeting as a guest, you will not have the ability to vote or submit questions.

What if I experience technical difficulties accessing the meeting?

If you encounter any technical difficulties with the virtual meeting platform, please use the telephone numbers listed on the meeting web site prior to the start of the meeting and technicians will be available to assist you.

What will happen if we experience technical problems during the meeting webcast?

In the event of technical difficulties or interruptions with the Annual Meeting, we expect that an announcement will be made on the meeting website, www.virtualshareholdermeeting.com/SYBT2021.SYBT2023. If necessary, the announcement will provide updated information regarding the date, time and location of the Annual Meeting. Any updated information regarding the Annual Meeting will also be posted to the investor relations page on our website, www.syb.com.

Shareholder Proposals and Director Nominations

Is there any information thatCan I should know about future annual meetings?submit a proposal (other than a director nomination) for consideration at the 2024 Annual Meeting?

Any shareholder who intends to present a proposal at the 20222024 Annual Meeting of Shareholders must deliver the proposal to the Corporate Secretary at 1040 East Main Street, Louisville, Kentucky 40206the address provided below no later than November 12, 202117, 2023 if the proposal is submitted for inclusion in our proxy materials for that meeting pursuant to Rule 14a-8 under the Securities Exchange Act of 1934. In addition, our Bylaws impose certain advance notice requirements onFor a shareholder nominatingproposal that is submitted for presentation directly at the 2024 Annual Meeting but not intended to be included in our proxy materials under Rule 14a-8, the shareholder must give timely notice to our Corporate Secretary and otherwise comply with the applicable requirements of our Bylaws. Our Bylaws require that notice of a director or submitting ashareholder proposal to an Annual Meeting. Such notice must be submitted to thereceived by our Corporate Secretary of Stock Yards Bancorp no later than January 21, 2022. The notice must26, 2024 and contain the information prescribed by the Bylaws, copies of which are available from the Corporate Secretary. These requirements apply even if

How may I nominate individuals to serve as directors at the 2024 Annual Meeting?

Our Bylaws permit shareholders to nominate directors for consideration at an annual meeting. A shareholder desiring to present a director nomination directly at an annual meeting must provide the information required by our Bylaws and give timely notice of the nomination to our Corporate Secretary in accordance with our Bylaws. To nominate a director for consideration at the 2024 Annual Meeting of Shareholders, the notice must be received by our Corporate Secretary at the address provided below no later than January 26, 2024, and contain the information required by our Bylaws.

Further, the deadline for providing notice to the Company under Rule 14a-19, the SEC’s universal proxy rule, of a shareholder’s intent to solicit proxies on the Company’s proxy card in support of director nominees submitted in accordance with the advance notice provisions of our Bylaws for the 2024 Annual Meeting of Shareholders is February 27, 2024. This deadline under Rule 14a-19 does not desiresupersede or replace any of the timing requirements for advance notice under our Bylaws. The supplemental notice and information required under Rule 14a-19 is in addition to have his or her nomination or proposal includedthe advance notice requirements of our Bylaws and does not extend the deadline specified in our Proxy Statement.the Bylaws.

CORPORATE GOVERNANCE AND RELATED MATTERSAll shareholder proposals, director nominations and requests for copies of our Bylaws should be addressed as follows:

Stock Yards Bancorp, Inc.

Executive Offices

1040 E. Main Street

Louisville, Kentucky 40206

Attn: Corporate Secretary

CORPORATE GOVERNANCE

Corporate Governance Highlights

Our Board of Directors and management are committed to strong corporate governance practices, which we believe support our dedication to managing the Company’s business in a responsible and ethical manner and promote long-term shareholder value. Highlights of our governance structure and practices include the following:

Board Independence

Board Accountability

Board Effectiveness

Shareholder Alignment

Role of the Board and Governance Principlesof Directors

The Stock Yards Bancorp’s Board of Directors represents shareholders’ interests in perpetuating a successful business including optimizing shareholder returns. The Directors are responsible for determining that the Company is managed to ensure this result. This is an active responsibility, and the Board monitors the effectiveness of policies and decisions including the execution of the Company’s business strategies. Strong corporate governance guidelines form the foundation for Board practices. As a part of this foundation, the Board believes that high ethical standards in all Company matters are essential to earning the confidence of investors, customers, employees and vendors. Accordingly, Stock Yards Bancorp has established a framework that exercises appropriate measures of oversight at all levels of the Company and clearly communicates that the Board expects all actions be consistent with its fundamental principles of business ethics and other corporate governance guidelines. The Company’s governance guidelines and other related matters are published on the Company’s website: www.syb.com under the Investor Relations section.

Board Leadership Structure

The Board of Directors modified the Company’s leadership structure during 2018 in connection with the retirement of David P. Heintzman as Chief Executive Officer. Mr. Heintzman had previously held the positions of Chairman of the Board and Chief Executive Officer. He retired as Chief Executive Officer effective September 30, 2018, and James A. Hillebrand, previously President of the Company, was appointed to succeed Mr. Heintzman as Chief Executive Officer. Mr. Heintzman remained employed in the role of Executive Chairman until his retirement from the Company at the end of 2018. Thereafter, Mr. Heintzman continued to lead the Board as non-executive Chairman.

During 2020, the Nominating and Corporate Governance Committee, in consultation with Mr. Heintzman, reviewed the leadership structure of the Board and decided that the interests of the Company’s shareholders would be best served by again combining the roles of Chairman and Chief Executive Officer. Based upon the recommendation of the Nominating and Corporate Governance Committee, and noting the successful executive management transition process following Mr. Heintzman’s retirement and strong leadership skills demonstrated by Mr. Hillebrand following his promotion to Chief Executive Officer, the Board of Directors voted to appoint Mr. Hillebrand to the additional position of Chairman of the Board effective January 1, 2021.

Corporate Governance Guidelines

Our Board of Directors has adopted Corporate Governance Guidelines that provide the framework for how the Board conducts its business and fulfills its duties and responsibilities. The Corporate Governance Guidelines address board responsibilities, director independence, the role of the Lead Independent Director, director qualifications, stock ownership requirements and other Board structures and practices intended to enhance the Board’s effectiveness. Under the leadership and oversight of the Nominating and Corporate Governance Committee, the Corporate Governance Guidelines are reviewed annually in light of recent governance trends and developments, best practices and changes in applicable laws and regulations. The Corporate Governance Guidelines are available on the investor relations page of the Company’s website, www.syb.com.

Board Leadership Structure

The Board of Directors believes that the most effective leadership structure for the Company at the present time is to combine the roles of Chairman of the Board and Chief Executive Officer. Our current Chief Executive Officer, James A. Hillebrand, was appointed to the additional position of Chairman of the Board effective January 1, 2021. Mr. Hillebrand has a long history of service in various management capacities with the Bank, is very familiar with its business, its customers and the banking industry generally, and the community bank model in particular. The Board believes that he is highly qualified to lead discussions on important strategic and operational issues affecting the Bank and Bancorp. Combining the Chief Executive OfficeOfficer and Chairman positions creates a firm link between management and the Board and promotes development and implementation of corporate strategy. The Board also believes that the industry knowledge and experience provided by Mr. Hillebrand as our Chief Executive Officer, together with our strong lead independent director, Stephen M. Priebe, and our experienced committee chairs and other directors, will enable the Company to continue to meet the expectations of our shareholders and provide strong independent oversight from our directors.

The Board does not have a fixed policy on whether the roles of Chairman of the Board and Chief Executive Officer should be separate or combined. The Company’s corporate governance documents address the leadership structure of the Board and the respective roles of the Chairman of the Board and the Chief Executive Officer. The Board will annually elect one of its members to serve as Chairman of the Board. The Chairman will preside at all meetings of the shareholders and of the Board of Directors, and generally consult with the Board on matters pertaining to the Company’s business and affairs. Both positions may, but need not, be held by the same person. The decision as to whether the offices of Chairman of the Board and Chief Executive Officer should be combined or separated will be made from time to time by the Board of Directors at its discretion. The Board’s decision will be made in its business judgment and based upon its consideration of all relevant factors and circumstances at the time, including the specific needs of the Company’s business, the strengths of the individual or individuals holding those positions and the current composition of the Board. We would notify shareholders promptly of a decision by the Board to separate the roles of Chairman of the Board and Chief Executive Officer.

If the individual elected as Chairman of the Board is also the Chief Executive Officer, or if the Chairman of the Board is not an independent director, the Board will elect a lead independent director to help ensure strong independent leadership on the Board.

In addition to an independent lead director, threefive committees of the Board provide independent oversight of management – the Audit Committee, the Compensation Committee, and the Nominating and Corporate Governance Committee, the Risk Committee and the Trust Committee. Each is composed entirely of independent directors.

Lead Independent Director

If a lead independent director is called for under the Company’s governance documents, the Chair of the Nominating and Corporate Governance Committee acts in that role. Stephen M. Priebe currently serves as lead director because Mr. Hillebrand, as the current Chief Executive Officer of the Company, does not qualify as an independent director under the Board’s independence standards. The role and responsibility of the lead director presides at executive sessionsconsists of the following:

Committees of the Board

Stock Yards Bancorp maintains an Audit Committee, a Compensation Committee, a Nominating and Corporate Governance Committee and a Risk Committee of the Board of Directors. The lead directorBank maintains a Trust Committee of the Board of Directors. Each of these committees operates under a written charter approved by the Board of Directors and reviewed annually by the committee. The chair of each committee reports its activities, discussions, recommendations and approvals to the full Board at each regularly scheduled Board meeting. Committee leadership and membership is reviewed annually by the Nominating and Corporate Governance Committee and, upon its recommendations, approved by the Board. The charters are available on the investor relations page of our website, www.syb.com. Current members of each of these committees are identified below.

Audit Committee

The Board of Directors of Stock Yards Bancorp maintains an Audit Committee comprised of directors who are not officers of Stock Yards Bancorp. Each member of the Audit Committee meets the Securities and Exchange Commission (“SEC”) and NASDAQ independence requirements for membership on an audit committee and each is financially literate within the meaning of the NASDAQ listing rules.

The Audit Committee oversees the Company’s financial reporting process on behalf of the Board of Directors. Management has primary responsibility for the financial statements and the reporting process including the systems of internal controls. In fulfilling its oversight responsibilities, the Committee, among other matters,

The Audit Committee meets with our management at least quarterly to consider the adequacy of our internal controls and the objectivity of our financial reporting. This Committee also meets with the external auditors and with our internal auditors regarding these matters. Both the independent auditors and the internal auditors regularly meet privately with this Committee and have unrestricted access to this Committee.

The Audit Committee held six meetings during 2022.

The Board of Directors has determined that Messrs. Heintzman, Herde and Lechleiter are audit committee financial experts for Stock Yards Bancorp and are independent as described in the paragraph above. We refer you to the section captioned “REPORT OF THE AUDIT COMMITTEE” on page 65 of this Proxy Statement for more information about the role and responsibility of the Audit Committee in the Company’s financial reporting process.

Nominating and Corporate Governance Committee

The Board of Directors of Stock Yards Bancorp maintains a Nominating and Corporate Governance Committee. Each member of the Nominating and Corporate Governance Committee meets the NASDAQ independence requirements for membership on a nominating and governance committee. Responsibilities of the Committee are set forth in a written charter satisfying the NASDAQ’s corporate governance standards, requirements of federal securities law and incorporating other best practices.

The Committee’s primary duties and responsibilities consist of:

This Committee held four meetings during 2022.

Compensation Committee

The Board of Directors of Stock Yards Bancorp maintains a Compensation Committee. Each member of the Compensation Committee meets the NASDAQ independence requirements for membership on the Compensation Committee. The responsibilities of this Committee include oversight of executive and Board compensation and related programs. We refer you to the section captioned “REPORT ON EXECUTIVE COMPENSATION” beginning on page 31 of this Proxy Statement for more information about the role and responsibilities of the Compensation Committee in our executive compensation program and its activities during 2022.

The Compensation Committee held seven meetings during 2022.

Risk Committee

The Board of Directors of Stock Yards Bancorp maintains a Risk Committee. This Committee is responsible for overseeing and monitoring management’s implementation and enforcement of the Bank’s framework for risk management throughout the organization. The Committee’s primary duties and responsibilities consist of:

The Committee reviews and approves mattersdiscusses with management its assessment of asset quality and trends in asset quality, credit quality administration and underwriting standards and the effectiveness of portfolio risk management systems. The Committee is also responsible for reviewing and approving significant lending and credit policies and compliance with those policies. Additionally, the Risk Committee has oversight responsibility for a wide range of enterprise-related risks within the Bank, including regulatory compliance, information security, cybersecurity, insurance and physical security.

The Risk Committee held six regular meetings in 2022.

Trust Committee

The Board of Directors of Stock Yards Bank maintains a Trust Committee. The Trust Committee oversees the operations of the wealth management and trust department of the Bank to help ensure it operates in accordance with sound fiduciary principles and is in compliance with pertinent laws and regulations. The Committee’s primary duties and responsibilities consist of:

This Committee held five meetings in 2022.

Non-management Executive Sessions

The non-management members of the Board of Directors meet in executive session at least twice each year following the regularly scheduled Board meeting, and more frequently if necessary or appropriate. The Lead Independent Director presides over these executive sessions. The executive sessions provide an opportunity for the directors to discuss topics such as agendasbusiness results and schedules forperformance, executive leadership and succession, critical strategic matters and other matters outside the presence of management. Board meetings andcommittees also have the opportunity to meet in executive sessions, and information distributedsession without management if they choose to board members. The lead director will be available to consult and communicate with shareholders where appropriate.do so.

Board Evaluation Process

The Board conducts an annual self-assessment to enhance its effectiveness. Through regular evaluation of its policies, practices and procedures, the Board identifies areas for further consideration and improvement. The evaluation process is led by the Nominating and Corporate Governance Committee. Each year, that Committee discusses and decides upon the process to be followed for the upcoming year. Each director may be requested to complete a questionnaire and provide feedback on a range of issues, including his or her assessment of the Board’s overall effectiveness and performance; its committee structure; priorities for future Board discussion and attention; the composition of the Board and the background and skills of its members; the quality, timing and relevance of information received from management; the nature and scope of agenda items; and his or her individual contributions to the Board. The lead director then meets with each director individually either to discuss his or her questionnaire responses or, if directors were not requested to complete a questionnaire, to discuss thoughts and suggestions the director may have regarding the Board’s overall effectiveness or specific Board practices or policies. The lead director prepares a summary of findings drawn from the questionnaire responses and director interviews for presentation to the full Board of Directors. Each of the Committees also conducts their own self-assessments led by the respective committee chairs.

Codes of Conduct and Ethics

We require all of our officers and employees and, when applicable, our directors to accept and abide by our Code of Business Conduct and Ethics, or the “Code of Conduct”. The Code of Conduct reinforces our Company’s commitment to the highest standards of ethical business practices and compliance with all applicable legal requirements, and sets forth expectations for the use and protection of proprietary business and customer information and relationships with our employees, customers, vendors and the public, among other matters. Our Chief Executive Officer, President, Chief Financial Officer, Controller and other financial officers are also subject to a Code of Ethics which supplements our general Code of Conduct. We will promptly disclose any amendment or waiver with respect to the financial Code of Ethics in accordance with the applicable rules of the SEC and Nasdaq.

All of our directors, officers and employees are required to annually affirm in writing their continued understanding of and compliance with our Code of Conduct. Employees receive regular quarterly reminders of our “Do the Right Thing” policy and their responsibility to report questionable business practices that could be violations of law or breaches of our Code of Conduct. Employees are encouraged to report their concerns on a confidential basis either directly to a designated company employee or to a representative of an independent third party firm.

Board Oversight of Risk Management

The Board of Directors has a significant role in the oversight of risk management. The Board receives information regarding risks facing the Company, their relative magnitude and management’s plan for mitigating these risks. Primary risks facing the Company are credit, operational, cybersecurity and informational security, interest rate, liquidity, compliance/legal, strategic and reputational risks. After assessment by management, reports are made to committees of the Board. Credit risk is addressed by the Risk Committee of Bancorp. Operational and compliance/legal risks are addressed by the Audit Committee and the Risk Committee of Bancorp. Cybersecurity and informational security risks are addressed by the Risk Committee of Bancorp. Interest rate and liquidity risks are addressed by the Asset/Liability Committee comprised of Bank management and reports are made to the Board at each of its regular meetings. Strategic and reputational risk is addressed by the above committees in addition to the Compensation Committee of Bancorp along with other executive compensation matters. Oversight of the trust department is addressed by the Trust Committee of the Bank. Corporate governance matters are addressed by the Nominating and Corporate Governance Committee of Bancorp. The full Board receives reports from each of these committees at the Board meeting immediately following the Committee meeting. The Bank’s Director of Internal Audit has a direct reporting line to the Audit Committee of the Board. The Chief Risk Officer, Information Security Officer and Compliance Officer make regular reports to the Audit and Risk Committees and the full Board when appropriate.

Board Meetings and Attendance

During 2022, the Board of Directors of Stock Yards Bancorp held eight regularly scheduled meetings and one special meeting. All directors of Stock Yards Bancorp are also directors of the Bank. During 2022, the Bank’s Board of Directors also held eight regularly scheduled meetings and one special meeting.

All directors attended at least 75% of the number of meetings of the Board and committees of the Board on which they served that were held during the period he or she served as a director. All directors are encouraged to attend annual meetings of shareholders, and all attended the 2022 Annual Meeting.

Shareholder Communications with the Board of Directors

Shareholders may communicate directly to the Board of Directors in writing by sending a letter to the Board at: Stock Yards Bancorp Board of Directors, P.O. Box 32890, Louisville, KY 40232-2890. Communications directed to the Board of Directors will be received by the Chairman and processed by the Nominating and Corporate Governance Committee when the communications concern matters related to the duties and responsibilities of the Board of Directors.

BOARD OF DIRECTORS’ MEETINGS AND COMMITTEES

During 2020, the Board of Directors of Stock Yards Bancorp held nine regularly scheduled meetings. All directors of Stock Yards Bancorp are also directors of the Bank. During 2020, the Bank’s Board of Directors also held nine regularly scheduled meetings.

All directors attended at least 75% of the number of meetings of the Board and committees of the Board on which they served that were held during the period he or she served as a director. All directors are encouraged to attend annual meetings of shareholders, and all attended the 2020 Annual Meeting.CORPORATE RESPONSIBILITY

Stock Yards Bancorp maintains an Audit Committee,Bank is a Compensation Committee,community bank built on strong core values of trust, character, integrity, sound judgment, personal accountability and respect for others. We are committed to serving our customers’ needs and helping them to achieve their financial goals. Likewise, we are committed to being a good neighbor and investing in the communities in which we live and work, and to supporting our fellow team members by cultivating a healthy work environment in which they can grow and succeed together and individually. This means providing the products and services necessary to help our individual customers and their families reach their financial goals, assisting our business customers to grow and expand their businesses and extending access to banking and financial resources to all segments of our communities, including the underbanked. We recognize that environmental, social and governance (“ESG”) principles are important to delivering on those commitments and maintaining our core values.

In 2022, we published our inaugural Corporate Responsibility Report. The report identifies our ongoing practices and recent accomplishments in the areas of environmental risk and impact management, social responsibility, including diversity, equity and inclusion, and governance. It highlights many of the initiatives occurring both within the Bank and in our communities to promote the interests of our various stakeholders – our customers, team members, communities and shareholders. We encourage you to review the entire report, which is available on our website at www.syb.com. Neither our Corporate Responsibility Report nor any other content appearing on our website is deemed to be a part of, or incorporated by reference into, this Proxy Statement.

Highlights of our ESG efforts are summarized below:

Governance and Accountability

Responsibility toOur Customers

Responsibility to Our Employees

Responsibility to Our Community

Awards and Recognition

As a testament to the strong culture, inclusive environment and numerous benefits we are committed to providing our employees, we were recognized in 2022 by American Banker as one of the “Best Banks to Work For”, which evaluates employee satisfaction, as well as the policies and employee benefits of each institution. We were honored to be one of only 90 institutions in the country to make the list for 2022.

Board Oversight of ESG Matters

As we are early in our ESG journey, we have only begun to establish Board-level oversight for ESG matters. The Nominating and Corporate Governance Committee is responsible for monitoring and overseeing our ESG policies, practices and strategies. The Nominating and Corporate Governance Committee expects to engage with management on a Risk Committeeregular basis on our ESG initiatives and to receive periodic updates on developments related to ESG and associated governance issues.

PROPOSAL 1: ELECTION OF DIRECTORS

Board Size and Term of Office

Our Bylaws specify that the Board of Directors shall consist of not less than nine nor more than 20 directors. Within this range, the number of directors to be elected at each annual meeting of shareholders may be fixed from time to time by resolution of the Board of Directors. The Bank maintains a Trust CommitteeDirectors adopted prior to the giving of notice of the Board of Directors.

Audit Committee

The Board of Directors of Stock Yards Bancorp maintains an Audit Committee comprised of directors who are not officers of Stock Yards Bancorp. For 2020,meeting or by later resolution adopted by the Audit Committee was comprised of Messrs. Herde (Chairman), Lechleiter and Schutte. Each of these individuals meetsshareholders at the Securities and Exchange Commission (“SEC”) and NASDAQ independence requirements for membership on an audit committee and each is financially literate within the meaning of the NASDAQ listing rules.annual meeting. The Board of Directors has adopted a written charter forfixed the Audit Committee, and this charter is available on Stock Yards Bancorp’s website: www.syb.com.

The Audit Committee oversees Stock Yards Bancorp’s financial reporting process on behalfnumber of directors to be elected at the Board of Directors. Management has primary responsibility for the financial statements and the reporting process including the systems of internal controls. In fulfilling its oversight responsibilities, the Committee, among other matters, considers the appointment of the external auditors for Stock Yards Bancorp, reviews with the auditors the plan and scope of the audit and audit fees, monitors the adequacy of reporting and internal controls, meets regularly with internal and external auditors, reviews the independence of the external auditors, reviews Stock Yards Bancorp’s financial results as reported in SEC filings, and approves all audit and permitted non-audit services performed by its external auditors. The Committee reviews and evaluates identified related party transactions and discusses with management the Company’s major financial risk exposures and the steps management has taken to monitor and control those exposures. The Audit Committee meets with our management2023 Annual Meeting at least quarterly to consider the adequacy of our internal controls and the objectivity of our financial reporting. This Committee also meets with the external auditors and with our internal auditors regarding these matters. Both the independent auditors and the internal auditors regularly meet privately with this Committee and have unrestricted access to this Committee. The Audit Committee held five meetings during 2020.13.

The Board of Directors has determined that Messrs. Herde and Lechleiter are audit committee financial experts for Stock Yards Bancorp and are independent as described in the paragraph above. See “REPORT OF THE AUDIT COMMITTEE” for more information.

Nominating and Corporate Governance Committee

The Board of Directors of Stock Yards Bancorp maintains a Nominating and Corporate Governance Committee. Members of this Committee are Messrs. Priebe (Chairman), Brown and Herde, all of whom are non-employee directors meeting the NASDAQ independence requirements for membership on a nominating and governance committee. Responsibilities of the Committee are set forth in a written charter satisfying the NASDAQ’s corporate governance standards, requirements of federal securities law and incorporating other best practices.  The Board of Directors has adopted a written charter for the Nominating and Corporate Governance Committee, and this charter is available on Stock Yards Bancorp’s website: www.syb.com.

Among the Committee’s duties are identifying and evaluating candidates for election to the Board of Directors, including consideration of candidates suggested by shareholders. To submit a candidate for consideration by the Committee, a shareholder must provide written communication to the Committee. The Committee would apply the same board membership criteria to shareholder-nominated candidates as it would to Committee-nominated candidates. The Committee also assists the Board in determining the composition of Board committees, assessing the Board’s effectiveness and developing and implementing the Company’s corporate governance guidelines. This Committee held three meetings during 2020.

Compensation Committee

The Board of Directors of Stock Yards Bancorp maintains a Compensation Committee. Members of this Committee are Messrs. Lechleiter (Chairman), Priebe, Schutte and Tasman, all of whom meet the NASDAQ independence requirements for membership on the Compensation Committee. The Board of Directors has adopted a written charter for the Compensation Committee, and this charter is available on Stock Yards Bancorp’s website: www.syb.com. The responsibilities of this Committee include oversight of executive and Board compensation and related programs. The Compensation Committee held eight meetings during 2020. See “REPORT ON EXECUTIVE COMPENSATION” for more information.

Risk Committee

The Board of Directors of Stock Yards Bancorp maintains a Risk Committee. This Committee is responsible for monitoring the Bank’s commercial and consumer loan portfolio and the related credit risk. The Committee reviews and discusses with management its assessment of asset quality and trends in asset quality, credit quality administration and underwriting standards and the effectiveness of portfolio risk management systems. The Committee is also responsible for reviewing and approving significant lending and credit policies and compliance with those policies. Additionally, the Risk Committee has oversight responsibility for a wide range of enterprise-related risks within the Bank, including regulatory compliance, information security, cybersecurity, insurance and physical security. Members of this Committee are Messrs. Tasman (Chairman), Bickel, Heintzman and Ms. Heitzman. The Risk Committee held seven regular meetings in 2020.

Trust Committee

The Board of Directors of Stock Yards Bank maintains a Trust Committee. The members of the Trust Committee are Ms. Heitzman (Chair) and Messrs. Bickel, Brown and Heintzman. The Trust Committee oversees the operations of the wealth management and trust department of the Bank to help ensure it operates in accordance with sound fiduciary principles and is in compliance with pertinent laws and regulations. This Committee held six meetings in 2020.

ITEM 1. ELECTION OF TEN DIRECTORS

The Board of Directors presently consists of eleven members. One current director, Norman Tasman, will reach his mandatory retirement age before the date of the 2021 Annual Meeting and will not stand for re-election at the Annual Meeting. Directors serve a one-year term and hold office until the Annual Meeting following the year of their election and until his or her successor is elected and qualified, subject to his or her death, resignation, retirement, removal or disqualification.

The BoardAll of Directors has fixed the numberCompany’s directors also currently serve as directors of directors to bethe Bank. If elected, all of the nominees for election at the 2021 Annual Meeting at ten. The tenare expected to continue serving as Bank directors nominated byfollowing the meeting.

Nominees for Election

The Nominating and Corporate Governance Committee of the Board of Directors has presented a slate of 13 nominees for election this year toas directors at the 2023 Annual Meeting. If elected, we expect that all of the nominees will serve as directors and hold office until the 2022 Annual Meeting2024 annual meeting of shareholders and until their respective successors arehave been elected and qualified are identified below. Subjectqualified. However, if for any reason a nominee should become unable or unwilling to completion of its proposed merger transaction with Kentucky Bancshares, Inc., we intend to expand the size ofserve, proxies may be voted for another person nominated as a substitute by the Board concurrent withof Directors, or the closing ofBoard may reduce the transaction to twelve directors and add two existing members of the Kentucky Bancshares boardnumber of directors to our Board.be elected. The Board has no reason to believe that any nominee will be unable or unwilling to serve as a director if elected.

The Board of Directors presently consists of 14 members. One current director, J. McCauley Brown, will reach his mandatory retirement age before the date of the 2023 Annual Meeting and will not stand for re-election at the Annual Meeting. All nominees currently serve on our Board of Directors and, other than Allison J. Donovan and Laura L. Wells, were last elected to the Board of Directors by shareholders at the 2022 Annual Meeting. Ms. Donovan was appointed to our Board of Directors in November 2022. Ms. Wells is a former director of Commonwealth Bancshares, Inc. and was appointed to our Board of Directors in May 2022 following completion of our acquisition of Commonwealth Bancshares in March 2022.

Except for Mses. Arvin and Wells and Mr. Saunier, there are no arrangements or understandings between or among any of the nominees, directors or executive officers and any other person pursuant to which any of our nominees, directors or executive officers have been selected for their respective positions. We refer you to the section captioned “Commonwealth Bancshares Investor Agreement” on page 21 of this Proxy Statement for a discussion of our agreement with the principal shareholders of Commonwealth Bancshares to consider and, if acceptable to Stock Yards, nominate a qualified individual designated by the principal shareholders for election to our Board of Directors.

There are no family relationships between any of our directors or executive officers and any other directors or executive officers.

Unless otherwise directed, shares represented by a properly submitted proxy will be voted for the election of each nominee. Proxies cannot be voted at the Annual Meeting for a greater number of persons than the 13 nominees named in this Proxy Statement.

To be elected in an uncontested election, a director nominee must receive a majority of the total votes cast for his or her election. Because we did not receive advance notice by the deadline established in our Bylaws of any shareholder nominees for director, this election of directors is an uncontested election.

The following table contains information about the 13 nominees for election at the Annual Meeting. Each nominee has consented to being named in this Proxy Statement and agreed to serve as a director if elected.

Name	Age (1)	Independent	Director Since	Principal Occupation (2)	Other Public Company Boards
Shannon B. Arvin	48	✔	2021	President and CEO, Keeneland Association	None
Paul J. Bickel III	67	✔	2017	President, U.S. Specialties	None
Allison J. Donovan	42	✔	2022	Member, Stoll Keenon Ogden PLLC	None
David P. Heintzman	63	✔	1992	Former Chairman of the Boards and Retired Chief Executive Officer, Stock Yards Bancorp, Inc. and Stock Yards Bank & Trust Company	None
Carl G. Herde	62	✔	2005	Vice President/Financial Policy, Kentucky Hospital Association	None
James A. Hillebrand	54		2008	Chairman of the Boards and Chief Executive Officer, Stock Yards Bancorp, Inc. and Stock Yards Bank & Trust Company	None
Richard A. Lechleiter	64	✔	2007	President, Catholic Education Foundation of Louisville	None
Philip S. Poindexter	56		2022	President, Stock Yards Bancorp, Inc. and Stock Yards Bank & Trust Company	None
Stephen M. Priebe	59	✔	2012	President, Hall Contracting of Kentucky	None
Edwin S. Saunier	65	✔	2021	President, Saunier North American, Inc.	None
John L. Schutte	59	✔	2018	Chief Executive Officer, GeriMed, Inc.	None
Kathy C. Thompson	61		1994	Senior Executive Vice President, Stock Yards Bank & Trust Company, Director of the Bank’s Wealth Management and Trust Department	None
Laura L. Wells	48	✔	2022	Freelance Journalist	None

 

(1)	Ages listed are as of December 31, 2020.2022.

(2)	Each nominee has been engaged in his or her chiefprincipal occupation or employment for five years or more with the exception of Ms. Arvin and Messrs. Heintzman, Herde and Hillebrand and Ms. Heitzman as described below.

(3)

Mr. Lechleiter is a director of Amedisys, Inc., a publicly-traded healthcare services company. No other nominee holds, or at any time in the last five years has held, any directorship in a company with a class of securities registered pursuant to Section 12 of the Securities Exchange Act of 1934 or subject to the requirements of Section 15(d) of such Act or any company registered as an investment company under the Investment Company Act of 1940, other than Stock Yards Bancorp.

(4)	There is no family relationship between Mr. Heintzman and Ms. Heitzman.Poindexter.

 

Our Board

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Table of Directors, through a process managed by the Nominating and Corporate Governance Committee, conducts an annual review of director independence. During this review, the Nominating and Corporate Governance Committee considers transactions and relationships between each director or any member of his or her immediate family and the Company. The purpose of this review is to determine whether any such relationships or transactions are inconsistent with a determination that the director is independent.

Contents

 

As a result of this review, and based upon the advice and recommendations of the Nominating and Corporate Governance Committee, the Board of Directors has affirmatively determined that Messrs. Bickel, Brown, Herde, Lechleiter, Priebe and Schutte and Ms. Heitzman satisfy the independence requirements of the NASDAQ Stock Market. Mr. Heintzman served as an executive officer of the Bank until December 31, 2018 and does not satisfy these requirements. As current employees of the Bank, Mr. Hillebrand and Ms. Thompson also do not satisfy these requirements. The Board of Directors also previously determined that Mr. Tasman satisfied the NASDAQ independence requirements during his most recent year of service as a director prior to retirement.

In performing its independence review, the Nominating and Corporate Governance Committee noted that the Bank and Mr. Heintzman have in the past made charitable donations to the Catholic Education Foundation of Louisville, of which Mr. Lechleiter is the President. However, the Committee determined that these relationships were not material to the director or his affiliated organization.Composition

 

Our Articlesnominees for director represent a balance of Incorporationskills, experience and Bylaws require majority voting forperspectives that provide effective leadership and oversight of the electionCompany’s business and are aligned with our business and strategies, particularly our community bank orientation. The following charts present information on the composition of directors in uncontested elections. This meansour Board of Directors. Diversity data is based on information self-identified by each nominee to the Company.

Board Diversity Factors

The following chart provides certain demographic information about the 13 director nominees. Diversity characteristics are based on information self-identified by each nominee to the Company.

Board Diversity Matrix (As of March 10, 2023)
Total Number of Directors	13
	Female	Male	Non- Binary	Did Not Disclose Gender
Part I: Gender Identity
Directors	4	7		2
Part II: Demographic Background
African American or Black	1
Alaskan Native or American Indian
Asian
Hispanic or Latinx
Native Hawaiian or Pacific Islander
White	4	7
Two or More Races or Ethnicities	1
LGBTQ+
Did Not Disclose Demographic Background	2

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Director Skills Matrix

The matrix shown below identifies certain skills, qualifications and experience that the Board believes are relevant to our business and achievement of our long-term strategy. An individual director nomineesmay possess other skills, qualifications and experience not indicated in the matrix that may also be relevant and valuable to their service on our Board.

Qualifications and Experience

Arvin

Bickel

Donovan

Heintzman

Herde

Hillebrand

Lechleiter

Poindexter

Priebe

Saunier

Schutte

Thompson

Wells

Total

Executive Leadership

x

x

x

x

x

x

x

x

x

9

Accounting/Financial Reporting

x

x

x

x

x

x

6

Commercial Real Estate

x

x

2

Legal and Regulatory

x

x

x

x

x

x

x

7

Sales and Marketing

x

x

x

x

x

x

x

x

8

Community Engagement

x

x

x

x

x

x

x

x

x

9

Banking and Financial Services

x

x

x

x

x

x

x

7

Mergers and Acquisitions

x

x

x

x

x

x

x

x

8

Strategic Planning

x

x

x

x

x

x

x

x

x

x

x

11

Risk Management

x

x

x

x

x

x

x

x

8

Corporate Governance

x

x

x

x

x

5

Small Business

x

x

x

x

x

5

Customer Experience

x

x

x

x

x

x

x

x

x

x

x

11

Executive Leadership

Experience in an uncontested election for directors must receive a numberexecutive leadership position that provides the skill and perspective to understand and direct business operations, manage human capital, analyze risk, manage organizational change and develop and implement strategic plans.

Accounting/Financial Reporting

Knowledge of votes cast “for” his or her electionexperience in accounting, financial reporting or auditing processes that exceeds the number of votes cast “against.” The Company’s corporate governance guidelines further provide that any incumbent director who does not receive a majority of “for” votes in an uncontested election must, within five days following the certification of the election results, tender to the Chairman ofassists the Board hisin overseeing our financial condition, financial management systems and the effectiveness of our internal controls, and ensuring accuracy and transparency in financial reporting and disclosure.

Commercial Real Estate

Experience as investors, owners and developers in the development operation and financing of commercial real estate projects in our market areas that assists the Board in overseeing and evaluating risk in our commercial real estate loan portfolio.

Legal and Regulatory

Knowledge of and experience in legal and regulatory matters, particularly regulated business, that assists the Board in understanding and analyzing legal regulatory and compliance requirements and related risks and advising management with regard to relationships with our regulators.

Sales and Marketing

Experience in managing sales and marketing activities, particularly for new products and markets and the adoption and use of digital marketing strategies that assists the Board in developing strategies to attract and retain customers and grow market share in each of our markets.

Community Engagement

Leadership experience with civic, charitable or her resignation fromcommunity service organizations or in governmental or public policy roles that positively impact the Board. The resignation will specify that it is effective upon the Board’s acceptancereputation, image and public profile of the resignation. The Board will, through a process managed by the Nominating and Corporate Governance Committee and excluding the nomineeour company in question, accept or reject the resignation within 90 days after certification of the shareholder vote. The Board will promptly communicate any action taken on the resignation.our local communities.

 

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Banking and Financial Services

Experience in the banking or financial services industry that assists the Board in understanding the key drivers of success in our core lines of business, including the development of innovative financial products and services to meet the changing banking needs of our customers.

Mergers and Acquisitions

Leadership experience with the planning, analysis and execution of mergers and acquisitions transactions and the integration of people, operations and systems that assists the Board in evaluating business development opportunities to complement our core strategy of organic growth.

Strategic Planning

Experience in the development and implementation of operating plans and business strategies.

Risk Management

Knowledge of or experience with oversight of corporate risk and risk management functions that assists the Board in identifying and evaluating the key areas of risk within our company and establishing an appropriate framework for managing and controlling risk.

Corporate Governance

Knowledge of public company governance practices and policies that assists the Board in considering and adopting sound governance practices, adherence to high standards or ethical business conduct and understanding the impact of those policies and practices on our business.

Small Business

Experience in ownership and/or managerial positions with small and medium size businesses that assists the Board in understanding the banking and credit needs of this segment of our customer base and how the Bank interacts with its commercial and business customers.

Customer Experience

Experience in consumer-focused businesses that assists the Board in developing strategies to strengthen brand awareness and customer loyalty, build customer relationships, attract new customers and enhance the overall customer experience.

Additional Information Regarding the Background and Qualifications of Director Nominees

 

The Nominating and Corporate Governance Committee considers the particular experience, qualifications, attributes and expertise of each nominee for election to the Board. Having directors with different points of view, professional experience, education and skills provides broader perspectives and more diverse considerations valuable to the directors as they fulfill their leadership roles. Potential Board candidates are evaluated based upon various criteria, including:

 

●

Direct industry knowledge, broad-based business experience, or professional skills that indicate the candidate will make a significant and immediate contribution to the Board’s discussion and decision-making in the array of complex issues facing Bancorp;

●

Behavior and reputation that indicate he or she is committed to the highest ethical standards and the values of Bancorp;

●

Special skills, expertise, and background that add to and complement the range of skills, expertise, and background of the existing directors;

●

The ability to contribute to broad Board responsibilities, including succession planning, management development, and strategic planning; and

●

Confidence that the candidate will effectively, consistently, and appropriately take into account and balance the legitimate interests and concerns of all Bancorp’s shareholders in reaching decisions.

 

Directors must have time available to devote to Board activities and to enhance their knowledge of Stock Yards Bancorp and the banking industry.

 

The Nominating and Corporate Governance Committee engages in regular discussions

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Table of board and director succession matters, including plans for identifying potential candidates to fill positions vacated by retiring directors. Several of our existing directors will reach our mandatory retirement age over the course of the next few years. As the Committee seeks to identify qualified individuals to fill those vacancies and considers the overall composition of the Board, the Committee is committed to broadening the diversity of our Board and expects to actively consider race and ethnicity as additional factors in the evaluation of its potential director candidates.

Contents

 

All non-management directors are required to own Common Stock equal in value to at least $200,000 within three years of joining the Board and to maintain that minimum ownership level for the remainder of their service as a director. The Nominating and Corporate Governance Committee may exercise its discretion in enforcing the guidelines when the accumulation of Common Stock is affected by the price of Bancorp stock or changes in director compensation. Management directors also have ownership targets as set forth elsewhere in this Proxy Statement. All directors’ ownership positions exceed the requirement, and some of the more tenured directors are among the Company’s largest shareholders.

The Nominating and Corporate Governance Committee of the Board of Directors has presented a slate of ten nominees for election as directors at the 2021 Annual Meeting. If elected, we expect that all of the aforementioned nominees will serve as directors and hold office until the 2022 annual meeting of shareholders and until their respective successors have been elected and qualified. However, if for any reason a nominee should become unable or unwilling to serve, proxies may be voted for another person nominated as a substitute by the Board of Directors, or the Board may reduce the number of directors to be elected.

All ten nominees are standing for re-election and were last elected to the Board of Directors by shareholders at the 2020 Annual Meeting. Below is a summary of the Committee’s consideration and evaluation of each director nominee.

Ms. Arvin currently serves as the eighth President and CEO of the Keeneland Association. Prior to this, Ms. Arvin was a member of the Lexington, Kentucky law firm of Stoll Keenon Ogden, and served on the firm’s Board of Directors and Executive Committee. Ms. Arvin also served as corporate counsel to Keeneland since 2008, and as secretary and member of Keeneland’s Board of Directors since 2015. Also, Ms. Arvin currently holds the following positions: Trustee of The Lexington School, and Thoroughbred Owners and Breeders Association, Member of The Jockey Club, Board and Executive Committee Member of the Gluck Equine Foundation, Thoroughbred Racing Associations/Thoroughbred Racing Protective Bureau and the National Thoroughbred Racing Association. In connection with our acquisition of Kentucky Bancshares, Inc. in May 2021, we agreed to expand the size of our Boards of Directors by two directors and fill the resulting vacancies with two Kentucky Bancshares directors. We identified Ms. Arvin as one of the two former Kentucky Bancshares directors to be added to our Boards following completion of the acquisition. Ms. Arvin serves on the Nominating and Corporate Governance Committee of Bancorp and chairs the Bank’s Trust Committee.

 

Mr. Bickel is founder and President of U.S. Specialties, a commercial building supply company. He has served as the managing member of several real estate development organizations in the Louisville, Kentucky area over the past 30 years. Outside of commercial endeavors, Mr. Bickel has been very active in the Louisville community, serving in a leadership capacity on numerous area non-profit boards. Mr. Bickel serves on the RiskAudit Committee of Bancorp and the Bank’s Trust Committee.

 

Mr. BrownMs. Donovan retired asis a ViceMember in the Lexington, Kentucky office of Stoll Keenon Ogden PLLC, a regional law firm practicing out of five cities in Kentucky and Indiana. Ms. Donovan has been with the firm since 2006 and concentrates primarily on corporate, securities, mergers and acquisitions and banking matters. She is a director and the immediate past President of Brown-Forman Corporation, a Fortune 1,000 company,the Kentucky Bar Foundation, and has previously served on other community nonprofit boards, including the American Heart Association and the John W. Rowe Foundation, Inc. Ms. Donovan has previously participated in 2015. HisLeadership Central Kentucky and the Leadership Council on Legal Diversity Fellows program. Her extensive experience in business, managementbanking and accounting, and his deep ties to the Louisville community, bring valuable local and global perspectivescorporate law, as well as her previous experience as a director of another Kentucky-based banking institution, provide additional expertise to our Board. Additionally, his widespread commitment to community organizations in LouisvilleBoard and beyond gives him a strong sense ofwill complement the needs, prospects and potentialcontributions of our region. Mr. Brownother directors as we continue to develop and execute on our long-term strategies. Ms. Donovan serves on the Risk Committee and the Nominating and Corporate Governance Committee of Bancorp and the Bank’s Trust Committee.Bancorp.

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Mr. Heintzman retired as Chief Executive Officer of Bancorp and the Bank as of September 30, 2018. From October 1, 2018 through December 31, 2018, he held the position of Executive Chairman. HeChairman and he continued to serve as non-executive Chairman of the Boards of Bancorp and the Bank until January 1, 2021. Mr. Heintzman holds an accounting degree, and prior to joining the Bank, worked as a certified public accountant for an international accounting firm. He joined the Bank in 1985 and, prior to his appointment as Chief Executive Officer, held a series of executive positions, including Chief Financial Officer, Executive Vice President and President. In January 2005, he assumed the position of Chairman and Chief Executive Officer. Mr. Heintzman was instrumental in the Bank’s growth strategies and profitable execution. His commitment to ethical standards set the example for the Bank and its employees, and his tenure and experience in all areas of the business provide a unique perspective of the business and strategic direction of the Company. Mr. Heintzman serves onchairs the Risk Committee of Bancorp and the Bank’s Trust Committee.

Ms. Heitzman, Certified Public Accountant, Chartered Financial Analyst, with expertise in the institutional credit markets and experience with investment strategies, provides our Board with a deep knowledge and understanding of capital markets, finance and accounting. Ms. Heitzman retired in 2016 as a portfolio manager for New York City based KKR Prisma Capital. She joined that company in 2004 to help construct and manage customized portfolios. Before joining KKR Prisma, Ms. Heitzman served in various capacities at AEGON USA, previously Providian Capital. As a portfolio manager in capital market strategies, she facilitated significant growth and broad diversification of a $1 billion fund portfolio. Ms. Heitzman serves on the RiskAudit Committee of Bancorp and chairsBancorp. He has been designated by the Bank’s Trust Committee.Board of Directors as an audit committee financial expert.

 

Mr. Herde holds an accounting degree, is a Certified Public Accountant and joined Baptist Healthcare System, Inc., one of the largest not-for-profit health care systems in Kentucky, in 1984 as controller. He served as the Chief Financial Officer from 1993 until his retirement from Baptist in September 2016. He now serves as the Vice President/Financial Policy for the Kentucky Hospital Association. He has extensive experience in financial reporting and corporate finance. Mr. Herde chairs the Audit Committee of Bancorp and has been designated by the Board of Directors as an audit committee financial expert. He also serves on the Nominating and Corporate Governance Committee of Bancorp.

 

Mr. Hillebrand was appointed Chief Executive Officer of Bancorp and the Bank effective October 1, 2018, and assumed the additional roles of Chairman of the Boards of each company effective January 1, 2021. He joined Stock Yards Bank in 1996 as director and developer of the private banking group. Prior to joining the Bank, he was with a regional bank and a community bank where he specialized in private banking. He has directed the expansion of the Bank into the Indianapolis, and Cincinnati markets and was named President in 2008.

 

Mr. Lechleiter is the President of the Catholic Education Foundation of Louisville. From February 2002 until his retirement in January 2014, he served as the Executive Vice President and Chief Financial Officer of Kindred Healthcare, Inc., a Fortune 500 healthcare services company based in Louisville. Mr. Lechleiter also served in senior financial positions at other large publicly held healthcare services companies such as Humana Inc. and HCA, Inc. during his professional financial career spanning nearly 35 years. His extensive experience in business leadership, financial reporting, corporate finance, investor relations, mergers and acquisitions and corporate governance is valuable to the Board. Mr. Lechleiter serves on the Audit Committee of Bancorp and has been designated by the Board of Directors as an audit committee financial expert. He also chairs the Compensation Committee of Bancorp. 

 

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Mr. Poindexter was appointed President of Bancorp and the Bank in October 2018. He previously served as Chief Lending Officer of the Bank from 2008 until October 2018, and as Executive Vice President and Director of Commercial Banking of the Bank. Mr. Poindexter joined the Bank in 2004. Under his leadership as Chief Lending Officer, the Bank achieved record levels of organic loan growth. Mr. Poindexter has also been instrumental in promoting an active sales and service culture across all departments of the Bank with a focus on increased referral activity that has led to record levels of non-interest income for the Bank.

Mr. Priebe is President of Hall Contracting of Kentucky, which provides construction services in the areas of heavy construction, asphalt, civil, pipeline, and highway and bridge construction. A registered professional civil engineer, he began his career at Hall in 1986. Mr. Priebe has had extensive involvement with many civic organizations throughout his career. He has worked with the Kentucky Transportation Cabinet Disadvantaged Business Enterprise Training Program and is actively mentoring a local electric contractor. Mr. Priebe’s business acumen and familiarity with the local and regional economic climate bring valuable perspective to the Board. Mr. Priebe serves as our Lead Independent Director, chairs the Nominating and Corporate Governance Committee of Bancorp and serves as a member of the Compensation Committee of Bancorp.

Mr. Saunier currently serves as President of Saunier North American, Inc., a moving and storage company. Mr. Saunier is a member of the Policy Council of Commerce Lexington in Lexington, Kentucky, Past Chairman of the Winchester Clark County Chamber of Commerce in Winchester, Kentucky, founder of Leadership Winchester and Past President of Thoroughbred Club of America. In connection with our acquisition of Kentucky Bancshares, Inc. in 2021, we agreed to expand the size of our Boards of Directors by two directors and fill the resulting vacancies with two Kentucky Bancshares directors. We identified Mr. Saunier as one of the two former Kentucky Bancshares directors to be added to our Boards following completion of the acquisition. Mr. Saunier serves on the Risk Committee and Compensation Committee of Bancorp.

 

Mr. Schutte is Chief Executive Officer of GeriMed, Inc., a nationwide group purchasing organization specializing in long-term care pharmacy services for independent pharmacies that serve long-term care providers, such as nursing homes, assisted living facilities, and hospice, as well as prison populations. In February 2017, he founded MainPointe Pharmaceuticals, a national company that markets and distributes pharmaceuticals as well as over-the-counter products and supplements. He also previously served as Chairman of the Board of VistaPharm, for which he was the largest shareholder, until it was sold in December 2015. Mr. Schutte is also involved in numerous commercial real estate development projects in the Louisville area and elsewhere. His entrepreneurial skills and insights and strong reputation in the Louisville business community are beneficial to the Board. He serves on the Audit Committee and Compensation Committee of Bancorp.Bancorp and the Bank’s Trust Committee.

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Ms. Thompson joinedis the Bank in 1992 as ManagerDirector of the Wealth ManagementBank’s wealth management and Trust Department.trust department. The department currently managesmanaged approximately $3.9$6.6 billion in assets at December 31, 2022, and is one of the most profitable bank-owned trust companies in the country. Prior to joining the Company in 1992, Ms. Thompson practiced law for a large law firm in the estate planning lawand tax group and worked in a regional bank’sbank trust departmentcompany where she specialized infocused on investment management, and estate, trust and personal financial planning.

Ms. Wells has served as a freelance journalist covering the Near and Middle East for various U.S. and international media outlets since September 2009. She previously worked in institutional research and sales for Merrill Lynch & Co. Additionally, Ms. Wells was the co-founder and CEO of the Turkish office of an international online startup company from December 2010 to February 2012. She previously served as a director of Commonwealth Bancshares, Inc. and Commonwealth Bank and Trust Company from 2016 to 2022. She joined our Board of Directors in May 2022, following our acquisition of Commonwealth Bancshares earlier that year. Her nomination is being made pursuant to the terms of an Investor Agreement between us and the principal shareholders of Commonwealth Bancshares. Ms. Wells serves on the Risk Committee of Bancorp and the Bank’s Trust Committee.

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Commonwealth Bancshares Investor Agreement

On March 7, 2022, we completed the acquisition of Commonwealth Bancshares, Inc. In connection with the acquisition, we entered into an Investor Agreement with the principal shareholders of Commonwealth Bancshares, Darrell R. Wells, Margaret C. Wells and the Darrell R. Wells Trust, which, among other matters, gives the principal shareholders the right to designate a qualified individual to serve on our Board of Directors, with the agreement of Stock Yards. We refer to this individual as the “mutually acceptable director”. The individual designated by the principal shareholders as the mutually acceptable director will be subject to the annual review and nomination process applicable to all members of our Board of Directors. Laura L. Wells is the director nominee designated as the mutually acceptable director pursuant to the terms of the Investor Agreement.

Director Nomination Process

Our Nominating and Corporate Governance Committee is responsible for identifying and recommending director candidates to our Board for nomination. The Board, in coordination with the Nominating and Corporate Governance Committee, also considers Board leadership succession planning and committee membership.

When considering a candidate for membership on the Board, the Nominating and Corporate Governance Committee assesses a candidate’s independence, qualifications, skills and experience, as compared to the areas of qualifications, skills and experience that the Board has identified as important to be reflected on the Board. The Nominating and Corporate Governance Committee also evaluates the collective contribution of qualifications, skills and experience relevant to the Company for effective oversight. In the case of incumbent directors, the Committee also considers the director’s attendance and participation at meetings of the Board of Directors and committees on which he or she serves.

Although the Nominating and Corporate Governance Committee does not have a specific policy governing diversity, it considers, in identifying nominees for director, a nominee’s professional experience, education, qualifications and skills with a view towards having a diversity of viewpoints in the broadest sense being represented on the Board. These considerations include, without limitation, the individual’s interest in Stock Yards, independence, integrity, reputation, business experience, education, accounting and financial expertise, age, race, ethnicity, gender, civic and community relationships and knowledge and experience in matters impacting financial institutions.

The Nominating and Corporate Governance Committee engages in regular discussions of board and director succession matters, including plans for identifying potential candidates to fill positions vacated by retiring directors. Several of our existing directors will reach our mandatory retirement age over the course of the next few years. As the Committee seeks to identify qualified individuals to fill those vacancies and considers the overall composition of the Board, the Committee is committed to broadening the diversity of our Board and expects to actively consider race and ethnicity as additional factors in the evaluation of its potential director candidates. During 2022, we expanded the diversity of the Board through the addition of one director from the underrepresented community, Allison J. Donovan.

With respect to incumbent directors considered for re-election, the Nominating and Corporate Governance Committee also assesses each director’s performance, contribution, level of engagement, and meeting attendance record. In addition, the Nominating and Corporate Governance Committee determines whether nominees are in a position to devote an adequate amount of time to the effective performance of director duties.

Shareholder Nominations

The Nominating and Corporate Governance Committee will consider candidates for nomination as a director submitted by shareholders. The Committee evaluates individuals recommended by shareholders for nomination as directors according to the same criteria discussed above and in accordance with the Company’s bylaws and the procedures describe under “Shareholder Proposals and Director Nominations” on page 6 of this Proxy Statement.

Director Independence

Our Board of Directors, through a process managed by the Nominating and Corporate Governance Committee, conducts an annual review of director independence. During this review, the Nominating and Corporate Governance Committee considers transactions and relationships between each director or any member of his or her immediate family and the Company. The purpose of this review is to determine whether any such relationships or transactions are inconsistent with a determination that the director is independent.

As a result of this review, and based upon the advice and recommendations of the Nominating and Corporate Governance Committee, the Board of Directors has affirmatively determined that Messrs. Bickel, Heintzman, Herde, Lechleiter, Priebe, Saunier and Schutte and Mses. Arvin, Donovan and Wells satisfy the independence requirements of the NASDAQ Stock Market. As current employees of the Bank, Messrs. Hillebrand and Poindexter and Ms. Thompson do not satisfy these requirements. The Board of Directors also previously determined that Mr. Brown satisfied the NASDAQ independence requirements during his most recent year of service as a director prior to retirement.

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In performing its independence review, the Nominating and Corporate Governance Committee noted that the Bank has made charitable donations to the Catholic Education Foundation of Louisville, of which Mr. Lechleiter is the President, regularly engages Stoll Keenon Ogden PLLC, of which Ms. Donovan is a member, for legal services and leases warehouse space for storage from Mr. Saunier. However, the Committee determined that none of these relationships were material to the director or his or her affiliated organization.

Director Election Standard

Our Articles of Incorporation and Bylaws require majority voting for the election of directors in uncontested elections. This means that the director nominees in an uncontested election for directors must receive a number of votes cast “for” his or her election that exceeds the number of votes cast “against.” The Company’s corporate governance guidelines further provide that any incumbent director who does not receive a majority of “for” votes in an uncontested election must, within five days following the certification of the election results, tender to the Chairman of the Board his or her resignation from the Board. The resignation will specify that it is effective upon the Board’s acceptance of the resignation. The Board will, through a process managed by the Nominating and Corporate Governance Committee and excluding the nominee in question, accept or reject the resignation within 90 days after certification of the shareholder vote. The Board will promptly communicate any action taken on the resignation.

Director Stock Ownership

All non-management directors are required to own Common Stock equal in value to at least five times the amount of their annual cash retainer fee within five years of joining the Board and to maintain that minimum ownership level for the remainder of their service as a director. The Nominating and Corporate Governance Committee may exercise its discretion in enforcing the guidelines when the accumulation of Common Stock is affected by the price of Bancorp stock or changes in director compensation. Management directors also have ownership targets described elsewhere in this Proxy Statement.

Director Retirement Policy

Our Board does not have a term limits policy. Our Corporate Governance Guidelines establish a mandatory retirement age of 70 for all directors. Our retirement age policy is intended to recognize the valuable perspectives, knowledge and experience provided by our longer-tenured directors while also facilitating the Board’s recruitment of new directors with appropriate backgrounds and skills and provide for an orderly transition of leadership on the Board and its committees. In accordance with this policy, one incumbent director, J. McCauley Brown, is not standing for re-election at the 2023 Annual Meeting. The Board has not in the past, nor does it expect in the future to, grant waivers or exemptions from the retirement age policy.

Director Compensation

The Compensation Committee is responsible for reviewing and recommending to the Board the compensation paid to our non-employee directors. The Compensation Committee, with advice and assistance from McLagan, its independent consultant, reviews the compensation of our non-employee directors at least every two years. Their review of director compensation includes surveys of peer data from other institutions and the related form and substance of how directors are compensated, including comparative analyses of the Company’s director compensation program relative to its peer group. The compensation program for our non-employee directors consists of a combination of cash and equity. Directors of the Company who are employees of the Bank receive no additional compensation for their service as directors of the Company or the Bank.

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The following table outlines the director compensation structure in effect during 2022:

		Member Cash Retainer				Member Equity Retainer				Member Per Meeting Fee				Chair Additional Cash Retainer				Lead Director Additional Cash Retainer
Board of Directors		$	18,000			$	35,000			$	1,625				-			$	7,500
Audit Committee			-				-				1,200			$	11,000				-
Compensation Committee			-				-				800				7,500				-
Nominating and Corporate Governance Committee			-				-				800				6,000				-
Risk Committee			-				-				900				9,000				-
Trust Committee			-				-				800				5,000				-

Directors may defer all or a portion of their fees pursuant to the Director Nonqualified Deferred Compensation Plan (the “Director NQ Plan”), and the amounts so deferred then increase or decrease in value based on how the director elects that the account be allocated as among various investment options provided by the Bank. The investment options are currently the same options available under the Executive NQ Plan, except that directors may also direct that their fees be invested in Company stock, which is then actually purchased and held in trust at the Bank. At December 31, 2022, approximately 94 percent of the aggregate amounts owed directors under the Director NQ Plan were invested in the Company’s stock.

In November 2022, the Compensation Committee reviewed a report prepared by McLagan with respect to the Company’s average director compensation for 2022 compared to the average director compensation program for 2021 for the compensation peer group selected by McLagan and approved by the Compensation Committee. The McLagan report noted, amount other findings, that since the last director compensation review performed in 2020, the Company’s recent acquisitions and organic growth have resulted in a significant increase in peer group median revenue, and market median compensation for directors has followed that trend. Given the Company’s significant growth over the past two years and the relatively minor historical increases in director compensation, our average director compensation has moved substantially below the market median. After taking into account the information contained in the McLagan report, the Compensation Committee determined it was appropriate to recommend to the Board changes to the compensation amounts for non-employee directors for the two-year compensation period beginning January 1, 2023, to restore the positioning of our director compensation program relative to our peer group. Acting upon the recommendation of the Compensation Committee, the Board approved the following changes to director compensation amounts effective January 1, 2023:

		Member Cash Retainer				Member Equity Retainer				Member Per Meeting Fee				Chair Additional Cash Retainer				Lead Director Additional Cash Retainer
Board of Directors		$	42,000			$	50,000			$	1,625				-			$	20,000
Audit Committee			-				-				1,200			$	15,000				-
Compensation Committee			-				-				800				12,000				-
Nominating and Corporate Governance Committee			-				-				800				3,000				-
Risk Committee			-				-				900				9,000				-
Trust Committee			-				-				800				4,000				-

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2022 Director Compensation

The following table sets forth information regarding the compensation of our non-employee directors for 2022. Messrs. Hillebrand and Poindexter and Ms. Thompson serve as directors for the Company but receive no compensation for their director service.

																		Change in Pension
																		Value and
														Non-Equity				Nonqualified
		Fees Earned				Stock				Option				Incentive Plan				Deferred Compensation				All Other
		or Paid in Cash				Awards				Awards				Compensation				Earnings				Compensation				Total
Name		($)				($)(1)				($)(2)				($)				($)(3)				($)(4)				($)(5)
Ms. Arvin			38,700				35,000				-				-				-				617				74,317
Mr. Bickel			40,400				35,000				-				-				-				617				76,017
Mr. Brown			38,200				35,000				-				-				-				617				73,817
Ms. Donovan			6,325				-				12,720				-				-				-				19,045
Mr. Heintzman			49,400				35,000				-				-				-				617				85,017
Mr. Herde			52,400				35,000				-				-				-				617				88,017
Mr. Lechleiter			51,300				35,000				-				-				-				617				86,917
Mr. Priebe			53,300				35,000				-				-				-				617				88,917
Mr. Saunier			42,000				35,000				-				-				-				617				77,617
Mr. Schutte			43,800				35,000				-				-				-				617				79,417
Ms. Wells			26,125				-				20,260				-				-				-				46,385

(1)

In January 2022 each non-employee director then serving on the Board of Directors received a restricted stock unit award under the 2015 Omnibus Equity Compensation Plan. The number of shares granted was equal to $35,000 divided by the fair market value per share on the grant date. Based on the closing price of the Common Stock on the grant date, each director received 541 shares. The restricted stock unit awards, together with all dividend equivalents thereon, fully vest one year from the date of grant.

(2)	Represents 1,000 SARs for each director valued using a Black Scholes value of $12.72 (Ms. Donovan) and $20.26 (Ms. Wells), respectively, per right.

(3)

Each director has the option of deferring some or all of their fees. Investment options include Company stock and various mutual funds. Earnings on the non-employee directors' nonqualified deferred compensation balances are not included above. The investment alternatives of the nonqualified plan do not and have not offered above market rates of interest or preferential returns.

(4)	Represents dividends on 2022 restricted stock unit awards. Dividends are held until awards vest. As such, dividends on the shares earned in 2022 were paid in January 2023.

 

THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR THE ELECTION OF EACH OF THESE NOMINEES

 

ITEM 2.PROPOSAL 2: RATIFICATION OF THE SELECTION OF THE INDEPENDENT

REGISTERED PUBLIC ACCOUNTING FIRM

 

The Audit Committee has selected FORVIS, LLP (formerly BKD, LLPLLP) as the Company’s independent registered public accounting firm for the fiscal year ending December 31, 20212023 and has directed that management submit the selection of the independent registered public accounting firm to shareholders for ratification at the Annual Meeting. The firm of BKD,FORVIS, LLP has served as the Company’s auditors since June 7, 2018. Representatives of BKD,FORVIS, LLP are expected to be present atduring the meeting, will have an opportunity to make a statement if they so desire and will be available to respond to appropriate questions.

 

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Shareholder ratification of the selection of BKD,FORVIS, LLP as the Company’s independent registered public accounting firm is not required by the Company’s Bylaws or otherwise. However, we are submitting the selection of BKD,FORVIS, LLP to the shareholders for ratification as a matter of sound corporate practice. If the shareholders fail to ratify the selection, the Audit Committee will reconsider whether or not to retain BKD,FORVIS, LLP. Even if the selection is ratified, the Audit Committee in its discretion may direct the appointment of a different independent audit firm at any time during the year if it is determined that such a change would be in the best interests of the Company and its shareholders.

 

THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR THE RATIFICATION OF THE SELECTION OF BKD,FORVIS, LLP

 

ITEM 3.PROPOSAL 3: ADVISORY VOTE ON EXECUTIVE COMPENSATION

 

We are asking our shareholders to provide an advisory vote on the compensation of the named executive officers disclosed in the REPORT“REPORT ON EXECUTIVE COMPENSATIONCOMPENSATION” section of this Proxy Statement. We refer to this item throughout this Proxy Statement as the “say-on-pay” proposal. We have included this proposal among the items to be considered at the Annual Meeting pursuant to the requirements of Section 14A of the Securities Exchange Act of 1934. While this vote is non-binding on our Company and the Board of Directors, it will provide the Compensation Committee with information regarding investor sentiment regarding our executive compensation philosophy, policies and practices which the Committee will be able to consider when determining future executive compensation arrangements. Our current policy is to hold an advisory vote on executive compensation each year. We expectIn Proposal 4, we are asking our shareholders to hold the nextvote on an advisory vote at our 2022 Annual Meeting of Shareholders.basis for their preferred frequency for conducting future say-on-pay votes. Following is a summary of some of the key points of our 20202022 executive compensation program. SeeYou should refer to the REPORTsection captioned “REPORT ON EXECUTIVE COMPENSATION sectionCOMPENSATION” beginning on page 31 of this Proxy Statement for more information.information about our 2022 executive compensation.

 

The pay-for-performance compensation philosophy of the Compensation Committee supports Stock Yards Bancorp’s primary objective of creating value for its shareholders. The Committee strives to ensure that compensation of Stock Yards Bancorp’s executive officers is market-competitive to attract and retain talented individuals to lead Stock Yards Bancorp and the Bank to growth and higher profitability while maintaining stability and capital strength. Our executive compensation program has been designed to align managements’ interests with those of our shareholders. In addition, the program seeks to mitigate risks related to compensation. In designing the 20202022 compensation program, the Compensation Committee used key performance measurements to motivate our executive officers to achieve short-term and long-term business goals after reviewing peer and market data and the Company’s business expectations for 2020.2022.

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We believe that the information provided regarding executive compensation in this Proxy Statement demonstrates that our executive compensation program was designed appropriately and is working to maximize shareholder return while mitigating risk and aligning managements’ interests with our shareholders. Accordingly, the Board of Directors recommends that shareholders approve the following advisory resolution:

 

RESOLVED, that the shareholders of Stock Yards Bancorp, Inc. approve, on an advisory basis, the compensation paid to the Company’s named executive officers as disclosed in the Stock Yards Bancorp, Inc. 20212023 Proxy Statement pursuant to the executive compensation disclosure rules of the SEC, including the Compensation Discussion and Analysis, the Summary Compensation Table and the other executive compensation tables and related narratives.

 

THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR THE APPROVAL OF THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS AS DESCRIBED IN THIS PROXY STATEMENTSAY-ON-PAY PROPOSAL

 

PROPOSAL 4: ADVISORY VOTE ON THE FREQUENCY OF FUTURE SAY-ON-PAY VOTES

SECURITY

As described in Proposal 3 above, our shareholders have the opportunity to cast an advisory vote to approve the compensation of our named executive officers. This Proposal 4 affords shareholders the additional opportunity to cast an advisory vote on how often we should include a say-on-pay proposal in our proxy materials for future annual shareholder meetings or any special shareholder meeting for which we must include executive compensation information in the proxy statement for that meeting. We refer to this item throughout this Proxy Statement as the “say-on-frequency” vote. We have included this proposal among the items to be considered at the Annual Meeting pursuant to the requirements of Section 14A of the Exchange Act. Under this Proposal 4, shareholders may vote to conduct the say-on-pay vote every year, every two years or every three years. Shareholders that do not have a preference regarding the frequency of future say-on-pay votes may abstain from voting on this proposal.

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Our shareholders voted on a similar proposal in 2017. At that year’s annual meeting, a majority of our shareholders voted to hold the say-on-pay vote every year, which was the recommendation of our Board of Directors. We continue to believe that say-on-pay votes should be conducted every year so that our shareholders may annually express their views on our executive compensation program.

This vote, like the say-on-pay vote described in Proposal 3 above, is advisory and not binding on the Company or the Board of Directors. Shareholders are not voting to approve or disapprove the Board’s recommendation. However, the Board values the opinions expressed by shareholders in their votes on this proposal and will consider the outcome of the vote when making future decisions regarding the frequency of conducting a say-on-pay vote.

It is expected that the next say-on-frequency vote will occur at the 2029 annual meeting of shareholders.

Shareholders may cast their advisory vote to conduct future say-on-pay votes every “1 Year,” “2 Years” or “3 Years,” or they may abstain from this vote. 

The option of every year, every two years or every three years that receives the highest number of votes cast by shareholders will reflect the shareholders’ preferred frequency for holding future say-on-pay votes. However, because this vote is advisory and not binding on the Board of Directors or the Company, the Board may decide that it is in the best interests of our shareholders and the Company to hold a say-on-pay vote more or less frequently than the option selected by our shareholders.

THE BOARD OF DIRECTORS RECOMMENDS THAT YOU SELECT “ONE YEAR” AS THE PREFERRED FREQUENCY FOR HOLDING FUTURE SAY-ON-PAY VOTES

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STOCK OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENTINFORMATION

 

Set forth in the following table is the beneficial ownership of our Common Stock as of December 31, 20202022 for each person or entity known by us to beneficially own more than five percent of the outstanding shares of our Common Stock;Stock and for all our directors and executive officers as a group; and directors, executive officers and employees as a group. “Executive officer” means the chairman, president, any vice president in charge of a principal business unit, division or function, or other officer who performs a policy making function or any other person who performs similar policy making functions and is so designated by the Board of Directors. For a description of the voting and investment power with respect to the shares beneficially owned by the current directors, nominees for election as directors and named executive officers of Stock Yards Bancorp and the Bank, see the following tables.

 

	Amount and Nature		Percent of
	of Beneficial		Stock Yards Bancorp
Name of Beneficial Owner	Ownership		Common Stock (1)
BlackRock, Inc.	1,579,108(2)		7.0%
55 East 52nd Street
New York, NY 10055
The Vanguard Group, Inc.	1,316,506(3)		5.8%
100 Vanguard Boulevard
Malvern, PA 19355
Stock Yards Bank & Trust Company	1,264,444(4)		5.6%
1040 East Main Street
Louisville, KY 40206
Directors and executive officers of Bancorp and	1,449,633(5)		6.3%
the Bank as a group (16 persons)
Directors, executive officers, and employees of	2,033,492(5) (6)		8.8%
Bancorp and the Bank as a group (573 persons)

		Amount and Nature				Percent of
		of Beneficial				Stock Yards Bancorp
Name of Beneficial Owner		Ownership				Common Stock (1)
BlackRock, Inc.			1,977,501	(2)			6.8	%
55 East 52nd Street
New York, NY 10055
The Vanguard Group, Inc.			1,817,768	(3)			6.2	%
100 Vanguard Boulevard
Malvern, PA 19355
Darrell R. Wells			1,691,765	(4)			5.8	%
Margaret Cowley Wells
Darrell R. Wells Trust
4350 Brownsboro Road, Suite 310
Louisville, KY 40207
Neuberger Berman Group, LLC			1,645,416	(5)			5.6	%
1290 Avenue of the Americas
New York, NY 10104
Kayne Anderson Rudnick Investment Management LLC			1,534,878	(6)			5.3	%
2000 Avenue of the Stars, Suite 1110
Los Angeles, CA 90067
Directors and executive officers of Bancorp and the Bank as a group (18 persons)			1,101,505	(7)			3.7	%

 

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(1)

Shares of Stock Yards Bancorp Common Stock subject to outstanding stock appreciation rights (“SARs”) that are currently exercisable or may become exercisable within the following 60 days under Stock Yards Bancorp’s Stock Incentive Plans are deemed outstanding for purposes of computing the percentage of Stock Yards Bancorp Common Stock beneficially owned by the person and group holding such SARs but are not deemed outstanding for purposes of computing the percentage of Stock Yards Bancorp Common Stock beneficially owned by any other person or group.

(2)	Based upon Schedule 13G/A filed with the SEC as of December 31, 2020.on February 1, 2023.

(3)	Based upon Schedule 13G/A filed with the SEC on February 9, 2023.
(4)	Based upon Schedule 13D filed jointly on behalf of each of the reporting persons with the SEC on March 1, 2023. Beneficial ownership information for the reporting persons is presented in the Schedule 13D as of the date of filing and is based upon the number of shares of our Common Stock outstanding as of January 31, 2023. Darrell R. and Margaret C. Wells are the parents of our current director and nominee, Laura L. Wells. We refer you to the section captioned “Commonwealth Bancshares Investor Agreement” on page 21 of this Proxy Statement for additional information regarding their rights to designate a qualified individual to serve on our Board of Directors, with our agreement.
(5)	Based upon Schedule 13G filed with the SEC as of December 31, 2020.on February 10, 2023.

(4)(6)

The Bank holds these shares in its various fiduciary capacities as agent, personal representative, custodian and trustee. Of these shares, (a) all are heldBased upon Schedule 13G/A filed with sole voting power, (b) 869,148 shares are held with sole investment power, and (c) 183,955 shares are held with shared investment power.the SEC on February 14, 2023.

(5)(7)

Includes 391,909328,690 shares held by directors and executive officers subject to outstanding SARs that are currently exercisable or may become exercisable within the following 60 days, and 101,10791,157 shares held in KSOP accounts.the Directors

’(6)

The Deferred Compensation Plan and 93,651 shares held by the group include those described in note (5) above and 219,219 shares held by non-executive officers and employees of the Bank. In addition, includes 45,591 shares subject to outstanding SARs that are currently exercisable or may become exercisable within the following 60 days held by non-executive officers of the Bank and 319,049 shares held by non-executive officers and employees of the Bank in their KSOP accounts, with sole voting power and investment power. Stock Yards Bancorp has not undertaken the expense and effort of compiling the number of shares other officers and employees of the Bank may hold other than directly in their own name.accounts.

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The following table shows the beneficial ownership of Stock Yards Bancorp, Inc.’s Common Stock as of December 31, 20202022 by each current director, each nominee for election as director and each individual included as a named executive officer.officer in the Summary Compensation Table appearing on page 51 of this Proxy Statement.

 

Name		Number of Shares Beneficially Owned(1) (2) (3) (4)			Percent of Stock Yards Bancorp Common Stock
Paul J. Bickel III		26,828	(6)		(5)
J. McCauley Brown		14,173	(7)		(5)
William M. Dishman III		64,517	(8)		(5)
David P. Heintzman		286,107	(9)		1.25%
Donna L. Heitzman		10,726	(10)		(5)
Carl G. Herde		51,452			(5)
James A. Hillebrand		222,165	(11)		(5)
Richard A. Lechleiter		27,966	(12)		(5)
Philip S. Poindexter		95,373	(13)		(5)
Stephen M. Priebe		24,704			(5)
John L. Schutte		83,681	(14)		(5)
T. Clay Stinnett		89,635	(15)		(5)
Norman Tasman		314,907	(16)		1.37%
Kathy C. Thompson		76,887			(5)

 

Name	Number of Shares Beneficially Owned(1) (2) (3) (4)		Percent of Stock Yards Bancorp Common Stock
Shannon B. Arvin	1,384		*
Paul J. Bickel III	30,453	(5)	*
J. McCauley Brown	16,425	(6)	*
Allison J. Donovan	-		*
David P. Heintzman	206,355		*
Carl G. Herde	48,683		*
James A. Hillebrand	213,998	(7)	*
Richard A. Lechleiter	29,778	(8)	*
Philip S. Poindexter	109,917	(9)	*
Stephen M. Priebe	28,623		*
Michael V. Rehm	26,511		*
Edwin S. Saunier	6,668		*
John L. Schutte	87,205	(10)	*
T. Clay Stinnett	104,425	(11)	*
Kathy C. Thompson	53,052		*
Laura L. Wells	16,244	(12)	*

* Less than 1% of outstanding shares of Common Stock

(1)

Includes, where noted, shares in which members of the director’s, nominee’s or executive officer’s immediate family have a beneficial interest. The column does not, however, include the interest of certain of the listed directors, nominees or executive officers in shares held by other non-dependent family members in their own right. In each case, the principal disclaims beneficial ownership of any such shares, and declares that the listing in this Proxy Statement should not be construed as an admission that the principal is the beneficial owner of any such securities.

(2)	Includes shares subject to outstanding SARs that are currently exercisable or may become exercisable within the following 60 days and unvested restricted shares issued under Stock Yards Bancorp’s Stock Incentive Plan(s) as follows:

Name		Number of SARs				Number of Unvested Restricted Stock Grants
Arvin			200				541
Bickel			1,000				541
Brown			1,500				541
Donovan	��		-				-
Heintzman			50,955				541
Herde			-				541
Hillebrand			102,132				-
Lechleiter			-				541
Poindexter			54,926				-
Priebe			-				541
Rehm			13,672				-
Saunier			200				541
Schutte			800				541
Stinnett			42,746				-
Thompson			5,959				-
Wells			-				-

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(3)	Includes shares subject to outstanding SARs that are currently exercisable or may become exercisable within the following 60 days and unvested restricted shares issued under Stock Yards Bancorp’s Stock Incentive Plan(s) as follows:

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Name		Number of SARs				Number of Unvested Restricted Stock Grants
Bickel			600				730
Brown			1,500				730
Dishman			32,363				-
Heintzman			111,277				730
Heitzman			800				730
Herde			-				730
Hillebrand			114,732				-
Lechleiter			-				730
Poindexter			49,456				-
Priebe			1,500				730
Schutte			400				730
Stinnett			38,913				-
Tasman			-				730
Thompson			12,626				-

(3)	Includes shares held in Directors’ Deferred Compensation Plan as follows:

 

		Number
Name		of Shares
Arvin			-
Bickel			5,2438,657
Brown			3,2104,058
HeitzmanDonovan			6,178-
Heintzman			-
Herde			21,71924,231
Hillebrand			466484
Lechleiter			21,84624,363
Poindexter			-
Priebe			19,71324,108
Saunier			538
Schutte			2,9974,718
TasmanThompson			73,360-
Wells			-

 

(4)

(4)Includes shares held in the Company’s KSOP as follows:

Includes shares held in the Company’s KSOP as follows:

		Number
Name		of Shares
Dishman			6,987
Hillebrand			23,54224,095
Poindexter			13,55913,951
Rehm			2,226
Stinnett			12,34212,714
Thompson			34,89325,348

 

(5)	Less than one percent of outstanding Stock Yards Bancorp Common Stock.

(6)	Includes 10,500 shares held jointly by Mr. Bickel and his wife.spouse.

(6)	Includes 3,987 shares held by Mr. Brown’s spouse.
(7)	Includes 3,987343 shares ownedheld by Mr. BrownHillebrand’s wife.adult children.

(8)	Includes 5,055 shares owned by Mr.Dishman’s wife.

(9)	Includes 24,070 shares owned by Mr.Heintzman’s wife.

(10)	Includes 1,8182,500 shares held jointly by Ms. Heitzman and her husband; and 200 shares owned by Ms. Heitzman’s husband.

(11)	Includes 14,653 shares held jointly by Mr. Hillebrand and his wife; 11,634 shares owned by Mr. Hillebrand’s wife; and 586 shares held as custodian for children.

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(12)	Includes 1,400 shares held as custodian for children and 1,300 shares held in the name of Mr. Lechleiter’s mother.adult children.

(13)(9)

Includes 291 shares held as custodian for Mr. Poindexter’s children.

(14)(10)

Includes 23,073 shares held jointly by Mr. Schutte and his spouse and 2,250 shares ownedheld by Mr. Schutte’s wife.spouse.

(15)(11)

Includes 445448 shares ownedheld by Mr. Stinnett’s wifespouse and 176183 shares held as custodian for their children.

(16)(12)

Includes 89,038 shares held jointly by Mr.Tasman and his wife; and 7,0272,420 shares held as custodian for their son.Ms. Wells’ children.

DELINQUENT SECTION 16(a) REPORTS

Section 16(a) of the Securities Exchange Act of 1934, as amended, requires our executive officers, our directors and persons who own more than 10% of a registered class of Stock Yards Bancorp’s Common Stock to file initial reports of ownership and changes in ownership with the SEC and the NASDAQ. Such executive officers, directors and shareholders are required by SEC regulations to furnish us with copies of all Section 16(a) forms they file. Based solely on a review of the copies of such forms furnished to us and written representations from the applicable executive officers and our directors, all persons subject to the reporting requirements of Section 16(a) filed the required reports on a timely basis for the year ended December31, 2020, with the exception of Michael Rehm, Executive Vice President and Chief Lending Officer of the Bank, who completed two open market sales transactions on July 24, 2020 and August 19, 2020, for a total of 1,755 shares and reported both transactions on November 3, 2020.

 

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EXECUTIVE COMPENSATION AND OTHER INFORMATION

 

REPORT ON EXECUTIVE COMPENSATION

 

Compensation Discussion and Analysis

 

This compensation discussion and analysis (“CD&A”) describes the philosophy, objectives, process, components, and additional aspects of our 20202022 executive compensation program. This CD&A is intended to be read in conjunction with the tables and related narrative disclosure that immediately follow this section, which provide further historical compensation information for the following named executive officers (“NEOs”):

 

Name	Position
James A. Hillebrand	Chairman and Chief Executive Officer (“Chairman/CEO”)
Philip S. Poindexter	President
T. Clay Stinnett	Executive Vice President and Chief Financial Officer (“CFO”)
Kathy C. Thompson	Senior Executive Vice President and ManagerDirector of Wealth Management & Trust
William M. Dishman IIIMichael V. Rehm	Executive Vice President and Chief RiskLending Officer

 

CD&A Reference Guide

Executive Summary	Section I
Compensation Philosophy and Objectives	SectionII
Compensation Philosophy and ObjectivesDetermination Process	Section IIIII
Components of Our Compensation Determination ProcessProgram	Section IIIIV
Components of OurAdditional Compensation ProgramPolicies and Practices	Section IVV
Additional Compensation Policies and Practices	SectionV

 

I.

EXECUTIVE SUMMARYExecutive Summary

	●	Despite incurring significant one-time acquisition costs, 2022 represented the strongest year in our history. Highlights for the year ended December 31, 2022 follow:
	●	Completion of the Commonwealth Bancshares acquisition, which expanded our presence in Louisville and neighboring Shelby County and Northern Kentucky significantly
	●	Record organic loan production
	●	Substantial legacy loan growth across all markets
	●	The Federal Reserve raised interest rates by 425 basis points, which coupled with our loan growth expanded net interest income and net interest margin
	●	Increase in the allowance for credit loss on loans associated with loan growth and deterioration within the Federal Reserve’s future unemployment rate forecast
	●	Record levels of non-interest income
	●	Operating expenses remaining well-controlled
	●	Pristine credit quality
	●	Publication of our inaugural Environmental, Social and Governance (“ESG”) Corporate Responsibility Report

 

20202022 Select Business Results

 

In 2020 we continued ourWe have a long-term track record of performing at the top of our peer group on key profitability measures such as return on average assets (“ROAA”) and return on average equity (“ROAE”). As shown below, which are common metrics within the banking industry and which allow us to directly compare our performance against similarly-sized and situated banking institutions. In 2022 and 2021, our profitability results were negatively impacted by $18.5 million and $20.7 million of tax effected one-time acquisition costs, respectively, which led to a decline in our performance metrics relative to our compensation peer group. However, calculation methodologies for 2020, our ROAEboth short-term and long-term performance metrics exclude one-time acquisition costs.

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Our ROAA for 2022 totaled 1.25%, representing a decline from 1.33% reported in 2021. Compared to the compensation peer group, we ranked wellslightly above the 50^th percentile. However, when adjusted to exclude one-time acquisition costs, ROAA equated to 1.50%* and 1.69%* in 2022 and 2021, respectively, and was at or above the 90^th percentile for both periods.

Our ROAE of 12.58% for 2022 was slightly below the 50^th percentile of the compensation peer group as it has for many years. Our ROAA for 2020and represented a decline from 13.02% in 2021. When adjusted to exclude one-time acquisition costs, ROAE was slightly belowsignificantly in excess of the 75^th percentile of the compensation peer group.for 2022.

 

		ROAA			ROAE
25th percentile		0.75	%		6.65	%
50th percentile		1.15	%		10.97	%
75th percentile		1.42	%		12.82	%
90th percentile		1.46	%		13.47	%
Stock Yards Bancorp		1.40	%		14.01	%

		ROAA				ROAE
25th percentile			1.01	%			10.37	%
50th percentile			1.22	%			12.70	%
75th percentile			1.38	%			13.75	%
90th percentile			1.50	%			16.14	%
Stock Yards Bancorp – Actual			1.25	%			12.58	%
Stock Yards Bancorp – Adjusted*			1.50	%			15.09	%

 

Financial Results

 

●  Net income increased 25% to $93.0 million, or $3.21 per diluted share, in 2022 compared to $74.6 million, or $2.97 per diluted share, in the prior year. Despite incurring $18.5 million in tax effected one-time acquisition costs, 2022 represented the strongest year in our history. Excluding one-time acquisition costs, net income would have increased 17% to $111.5 million*, or $3.86* per diluted share year over year. Our reported annual diluted EPS has trended as follows over the past five years.

Net income decreased 11% to $58.9 million

●	Earnings per share (“EPS”) decreased 10% to $2.59 per diluted share

●	ROAE was 14.01%, a decrease from 17.09% the prior year

●	ROAA was 1.40%, a decrease from 1.90% the prior year

 

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* Adjusted for one-time acquisition costs. This result represents a non-GAAP financial measure. See Appendix A for a reconciliation of GAAP and non-GAAP financial measures.

 

Operating Results

 

●	Loans increased $687 million, or 24%, driven by recordRecord loan production (excluding PPP) drove $529 million of legacy portfolio growth and, combined with expansion into new markets, led to record total loans of $5.21 billion at December 31, 2022

●	Asset and credit quality remained strong, net loan growthamong the highest relative to our peers

●	Asset and credit quality remained strong, among the highest relative to our peers

●	Total revenue, comprising fully tax equivalenttax-equivalent net interest income and non-interest income, of $188.0$323.4 million, surpassed the previous record of $175.0$237.4 million in 20192021

 

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20202022 Shareholder Return

 

●

1-year total shareholder return (“TSR”): 2%4%; 3-year TSR: 17%70%; and 5-year TSR: 82%95%

●

Substantial and sustained dividend payout ratio; rate raised 1315 times since 20132012

●

In early 2021, announcedCompleted the pending acquisition of KentuckyCommonwealth Bancshares Inc., which is expected to close in the second quarter of 2021.March 2022

 

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Performance Orientation of 20202022 Compensation

 

Chairman/CEO Compensation Majority Performance-Based (Equity and Total). The Compensation Committee (the “Committee”) of our Board of Directors is responsible for the design and administration of our executive compensation program. The Committee’s philosophy is to place at risk a significant portion of executive officers’ total compensation, making it contingent on Company performance while remaining consistent with our risk management policies. As such, the Committee has structured the majority of the compensation of the Chairman/CEO as variable, at-risk and subject to the achievement of performance goals in order to be earned. Approximately 52% of the Chairman/CEO’s grant date target total direct compensation, consisting of base salary, short-term incentive opportunity and long-term incentive opportunity, was variable, at-risk and performance-based. Seventy-five percent of the long-term incentive equity grants were performance-based and were in the form of performance share units (“PSUs”). These PSUs are subject to three-year performance metrics tied to our key operating goals and will vest at the end of a three-year performance period, subject to a mandatory one-year post-vesting holding period. The other 25% were in the form of time-based stock appreciation rights (“SARs”) that vest over five years.

 

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Long-Term Incentives: 75% PSUs, 25% SARs; Three-Year Performance Period; High ThresholdTarget Performance Level. For the long-term incentive equity grants to executive officers, the Committee utilized PSUs to motivate operational achievement and link pay to performance, and SARs to motivate stock price appreciation over the long term, because they deliver value only if the stock price increases. For the grants in the form of PSUs, the Committee establishedmaintained three-year goals at the outset of the performance period for relative ROAA (85^th percentile is target performance, representing a rigorous and challenging level of achievement that was increased from the 80^th percentile in 2019)achievement) and cumulative EPS, the target for which reflects a solid growth rate.

 

Assessed CriteriaKey 2022 Executive Compensation Decisions and Updated Peer Group. The Committee evaluates annually the group of peer companies used as a reference point for evaluating executive compensation. Outcomes

In connection with determining 20202022 executive compensation, the Committee reviewed its criteria, in part because of pending acquisitions by the Company’s having fallen to the 38^th percentile by revenue of the existing peer group.Company. As part of this review, the Committee determined to maintain its key criteria but change some of the size ranges, which led to the removal of fourseven companies and the addition of twoten companies. As a result, the Company moved closer to the median for annual revenue and assets.

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COVID-19-Related Actions

Operating results for the year were lower compared to the record results posted in 2019, primarily due to pandemic-related increases in loan loss provisioning. Despite solid traditional credit metrics, we recorded a significant provision for credit losses (“provision”) during the past year. The 2020 provision expense was $16.9 million, compared to $1.0 million in 2019, based on our adoption of the new CECL provisioning methodology as required under the relevant accounting standards, the expected impact of the COVID-19 pandemic on forecasted unemployment and changing macro-economic conditions, and qualitative factor adjustments. In light of the unique circumstances in 2020, the Committee reviewed the effect of the COVID-19 pandemic on Company performance and thus on incentive programs, and determined it was in the best interests of shareholders and participants to make responsible, one-time adjustments to both performance goals and to payout opportunities, which were lowered, in recognition of the impact of the pandemic on our business. These one-time adjustments were applied only to the 2020 Short-Term Incentive Plan, and neither the criteria nor the payout opportunities under either the 2020 Long-Term Incentive Plan or any outstanding PSUs were adjusted.

These actions occurred amid broader considerations of the impact of COVID-19 on the Company. Specifically, we took actions to protect our employees and prioritize their well-being, including the following:

●

No furloughs or layoffs

●

No reductions in employee pay or benefits

●

Payment of special one-time COVID-related bonuses to frontline employees

●

Pay protection for employees that were directly affected by COVID

●

Enhancement of workplace safety, including heightened cleaning, distancing and remote working protocols

●

Extended flexibility of work hour schedules based on schooling and childcare needs

●

Allowed employees to roll unused vacation days into 2021 and 2022, in recognition of reduced vacation opportunities in 2020

●

No executive salary increases for 2021

Annual Cash Incentives. In light of the impact of the COVID-19 pandemic on financial performance, on September 15, 2020, the Committee made the decision to shift the EPS metrics from a GAAP EPS amount to a pre-provision EPS amount for the full year. Provision is the aspect of performance that is most volatile and most materially affected by COVID-19 and related economic impacts in 2020. We believe that pre-provision EPS more accurately reflected our fundamental performance in 2020 and is a better indicator of the long-term impacts of 2020 performance. In light of this change, and in recognition of shareholder expectations and views on mid-cycle changes, the Committee also reduced each payout opportunity level by 50% in recognition of the adjusted metric in an unprecedented year. Line of business goals for line of business executives such as Ms. Thompson were unchanged, but the associated payout component was lowered by 25%.

Long-Term Incentive Equity. During the discussion of changes to annual cash incentives, the Committee determined to leave the goals and structure of all aspects of PSUs and SARs unchanged given the long-term horizon of such awards.

Key 2020 Executive Compensation Decisions and Outcomes

In 2020, we had strong fundamental performance, outperformed our peers, and took prudent compensation action to balance shareholder experience, GAAP performance, core performance, future expectations and executive interests.

 

Base Salaries. BaseThe Committee reviewed our NEOs’ base salaries, determined that those salaries lagged the peer median in part because of its decision not to increase NEOs’ base salaries for 2021, and approved base salary increases ranged from zero to 3.7% dependingas discussed further on changes in market data, the time since the executive received a salary adjustment and other factors.    page 42.

 

Annual Cash Incentives. The Compensation Committee undertook a rigorous process to set the performance targets for 2020. As the effects of the pandemic unfolded, it became clear to the Committee that our Threshold level of corporate EPS under our annual incentive plan would likely not be attained due primarily to increased loan loss provision, and that annual incentive payments for at least four of our executives would be eliminated entirely. The Committee did not believe that our core operating performance warranted elimination of annual incentive payouts and therefore made adjustments as described on page 35.

2022. Annual cash incentive opportunities for fourthree of our NEOs, Messrs. Hillebrand, Poindexter Stinnett and Dishman,Stinnett, are tied exclusively to corporate profitability, as measured by EPS. Ms. Thompson’s and Mr. Rehm’s short-term incentive plan incorporatesplans incorporate goals related to hertheir line of business responsibilities as well as Company-wide profitability.

 

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Messrs. Hillebrand, Poindexter, Stinnett and DishmanStinnett

 

The primary performance metric utilized for Messrs. Hillebrand, Poindexter, and Stinnett and Dishman was diluted EPS. The initial target performance goal for 20202022 was set below25% higher than the prior year amount in recognition of unique circumstances associated with changes to accounting rules and the one-time benefit observed in 2019, but the goal nevertheless required strong performance to achieve above-target payouts even after the COVID-related adjustments.2021 EPS target.

 

The EPS metric hadmaintained a performance threshold of 96%94% of target and a performance maximum of 104%107% of target. The Committee uses EPS because it believes EPS drives long-term shareholder return, as it represents the culmination of executive officers’ efforts regarding profitability, revenue growth, expense control, risk profile and other elements.

 

The revised target annual incentive plan opportunities of each of Messrs. Hillebrand, Poindexter, Stinnett and DishmanStinnett were denominated as a percentage of base salary based on external and internal factors applicable to the positions held by these individuals, among other things, and ranged from 15%35% to 25%50% of base salary. Payouts were capped at 200% of the lowered target payout.

 

Company-wide performance accounted for 100% of the annual incentive plan opportunity for Messrs. Hillebrand, Poindexter, Stinnett and Dishman;Stinnett; there was no allocation to individual performance goals. All of our eligible executive officersNEOs participate in the annual incentive plan on the same terms, other than the target percentage of base salary, andsalary. Ms. Thompson hasand Mr. Rehm have additional components relating to her areatheir respective areas of responsibility.

 

As described above, GAAP EPS decreased 10%increased 8% to $2.59$3.21 per diluted share, driven largely by a dramatic increase in provision for potential future loan losses due to the combination of CECL adoptionCommonwealth acquisition, substantial organic growth and the pandemic. On a pre-provision basis, ourrecord non-interest income. This EPS was $3.17 compared to a Target of $2.89, whichresult led to short-term incentive payouts to Messrs. Hillebrand, Poindexter, Stinnett and DishmanStinnett at 200% of Target.target.

 

Ms. Thompson

 

Ms. Thompson’s short-term incentive includes three components: income before overhead allocations and taxes, consolidated EPS of the Company, and net new business. Ms. Thompson’s incentive is weighted 75% for her line of business and 25% for overall Company performance, and the Committee considers her line of business goals to be appropriately challenging to attain. Financial results drove theMs. Thompson’s short-term incentive payout for 2022 was 125% of target.

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Mr. Rehm

Mr. Rehm’s short-term incentive includes two components: production (& other) goals and consolidated EPS of the Company. Mr. Rehm’s incentive is weighted 75% for his line of business and 25% for overall Company performance, and the Committee considers his line of business goals to Ms. Thompson at 200%be appropriately challenging to attain. Mr. Rehm’s short-term incentive payout for 2022 was 191% of target.

 

Long-Term Incentive Equity. TheAs in 2021, the Company’s 20202022 long-term incentives consisted of 75% PSUs (by grant date value) that vest based on performance over a three-year measurement period, and 25% SARs that vest over five years. No pandemic-related changes were implemented to our long-term incentive awards granted in 2022 or prior years.

 

The performance metrics for the PSUs, which are weighted 50% each, are three-year relative ROAA, with the target set at the 85^th percentile and the threshold set at the 80^th percentile of the peer group, a very challenging relative level of performance; and three-year cumulative EPS, a true long-term performance period using a metric viewed as central to increasing long-term shareholder value. These objectives were increased from the 2019 plan, which used a target goal of the 80^th percentile and a threshold goal of the 75^th percentile, as a reflection of our high performance expectations relative to our peers and the broader banking market.

No pandemic-related changes were implemented to our long-term incentive awards granted in 2020 or prior years.

 

PSUs granted in 20182020 vested as of December 31, 20202022, and will be certified and distributed by March 31, 2021.2023. Based on our aggregate EPS for the three-year performance period 2018-20202020-2022 and preliminary data indicating that our average adjusted ROAA for the three-year performance period of 1.68% significantly1.53%* exceeded the 90^th percentile of the comparator group, we expect that recipients will be awarded grants on the EPS portion at targetthe maximum performance level and the ROAA portion at the maximum performance levels.

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Increased Stock Ownership Guidelines. In November 2020 the Committee’s regular review of our stock ownership guidelines led us to increase the multiple for our Chairman/CEO from 5x to 6x to remain in a leadership position.level.

 

2021 Compensation Decisions. In early 2021, we determined to forego salary increases* Adjusted for anyone-time acquisition costs. This result represents a non-GAAP financial measure. See Appendix A for a reconciliation of our NEOs for 2021 in light of the ongoing pandemicGAAP and economic uncertainty. In addition, we anticipate that our 2021 annual incentive program will revert to its historical design rather than utilizing the modified design adopted in 2020 in response to the pandemic. We also anticipate maintaining our customary performance-oriented long-term incentive design for our equity awards in 2021.non-GAAP financial measures.

 

Connecting Pay and Performance

 

In 2020, Stock Yards Bancorp continued to generate performance superior to a substantial majority of our peer companies as measured by key metrics. Our record of consistently higher long-term financial performance has in turn driven our long-term shareholder returns and key financial metrics to impressive levels relative to our peers. Consistent with our pay-for-performance philosophy, a substantial portion of annual target total direct compensation is variable, at-risk pay. We consider compensation to be “at risk” and performance-based if it is subject to operating performance or if its value depends on stock price appreciation.

 

The following charts demonstrate the positioning of our ROAA and ROAE compared to the peer group described on page 2939 over each of the last five years. As shown below, our ROAE and ROAA have consistently ranked in the top 10%25% of our peer group in every one of the last five years, and our ROAA ranked in the top 10% of the peer group every year exceptuntil 2020. Our ROAA in 2020 was2021 and 2022 profitability results were negatively impacted by one-time expenses related to the Company’s election to adopt CECLacquisitions of Kentucky Bancshares ($20.7 million net of tax) and the outsized balance sheet growth attributed to lower-yielding loans under the Paycheck Protection Program (“PPP”)Commonwealth Bancshares ($18.5 million net of tax). In addition,Even with that slight decline in profitability, our average ROAA over that five-year period was inat the 9990^th percentile of our peer group, and our average ROAE over that period was higher than that of anyat the 96^th percentile of our peers.peer group.

 

 

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The following chart compares our five-year total shareholder return (TSR) to the median TSR of our compensation peer group and an additional industry peer group.

 

 

Source: S&P Global Market Intelligence. Market pricing data as of December 31, 2020.2022.

 

(1)

TSR equals the return of a security over a period, including price appreciation and the reinvestment of dividends. Dividends are assumed to be reinvested at the closing price of the security on the ex-date of the dividend.

TSR equals the return of a security over a period, including price appreciation and the reinvestment of dividends. Dividends are assumed to be reinvested at the closing price of the security on the ex-date of the dividend.

(2)	See page 2939 for a listing of the compensation peer group. Excludes five banks in the original peer group that no longer meet selection criteria.

(3)	Nationwide peers representing 16370 major exchange-traded banks (NASDAQ, NYSE and NYSEAM) headquartered in the U.S. with total assets between $1.5$6 and $7.0$16 billion. Excludes merger targets.

 

The Committee believes stock price closely mirrors earnings growth over the long-term, and management should be incentedincentivized with respect to performance measures related to the operations of the Company. Over the short term, stock price is not controllable by management and should not be a tool to judge management’s performance. We believe our EPS growth aligns management’s interests with shareholders and drives total returnthus having EPS as a common focus in the Company’s annual and long-term incentive programs is in the best interest of shareholders. While the annual and long-term incentive programs use different EPS goals, together the programs drive shareholder value creation over the long term.time.

 

Additionally, the Committee believes that it uses appropriately challenging targets in setting goals for both short-term and long-term incentives, and that the Company’s financial results must significantly exceed peer median performance in order to achieve target-level awards. For example,Payouts for the EPS component under our short-term incentive programs require a minimum threshold of diluted EPS in order for bonuses to be earned. Under the Company’s performance share goals, executives do not achieve target award vesting for the ROAA component of our PSU program unless our ROAA exceeds the 85^th percentile of our comparator group (which is comprised of all publicly-tradedpublicly traded banks with $1.5$6.0 to $7.0$16.0 billion in assets), and no awards are earned if our ROAA does not exceed the 80^th percentile of our comparator group.

 

Say-on-Pay Results

 

At the 20202022 Annual Meeting of Shareholders, 97.4%98% of the votes were cast in favor of the advisory vote to approve executive compensation, commonly known as “say-on-pay.” This vote is consistent with the 2019 result.recent vote results. The Committee believes its compensation practices are properly aligned with the interests of shareholders, and that the high level of shareholder support of our 20202022 say-on-pay proposal indicates that most shareholders share the Committee’s view.

 

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Compensation Program Governance

 

The Committee continually reviews its policies and procedures to ensure they are consistent with strong corporate governance guidelines. This also includes education around governance best practices and their bearing on the Company and its executive compensation program.

 

What We Do:		What We Don’t Do:
Align pay and performance		No guaranteed bonuses – incentive compensation may be reduced to zero if financial metrics are not met
Engage an independent third-party compensation consultant for advice in making compensation decisions		No guaranteed bonuses –highly leveraged incentive compensation may be reduced to zero if financial metrics are not metplans that encourage excessive risk taking
Engage an independent third-partyReview compensation consultant for advice in making compensation decisionsdata from peers whose industry, revenues, and footprint share similarities with the Company		No highly leverageduncapped incentive plans that encourage excessive risk takingaward payouts
Review compensation data from peers whose industry, revenues, and footprint share similarities with the CompanyConduct an annual shareholder say-on-pay vote		No uncapped incentive award payoutsexcessive perquisites for our directors and executive officers
Conduct an annual shareholder say-on-pay voteMaintain additional holding requirements of one year once equity awards vest		No excessive perquisites for our directors and executive officerspayment of dividends on unvested equity awards
Maintain additional holding requirements of one year once equity awards veststock ownership guidelines for executive officers and directors		No paymentrepricing of dividends on unvested equity awardsoptions or SARs without prior shareholder approval
Maintain stock ownership guidelines for executive officers and directorsa clawback policy		No repricing of options or SARs without prior shareholder approval
Maintain a clawback policy		No excise tax gross ups

 

II.	Compensation Philosophy and Objectives

 

Our compensation philosophy guides the design and decisions of our compensation program to achieve the following objectives:

 

●

To attract, retain, and motivate top executive talent;

●

To link overall compensation to company performance;

●

To align executive interests with shareholder interests;

●

To place a significant portion of total compensation at risk, making it contingent on Company performance while remaining consistent with our risk management policies; and

●

To support the Company’s objective of creating shareholder value without taking unnecessary risks.

 

The Committee believes that the Company’s pay policies and practices do not create risks reasonably likely to have a material adverse effect on the Company.

 

III.	Compensation Determination Process

 

Role of the Compensation Committee

 

The Committee assists our Board in establishing our compensation philosophy and determining the compensation of our executive officers. The Committee is also responsible for determining the structure and components of our programs, as well as reviewing and approving the compensation of the NEOs, or recommending it for approval by the Board of Directors. The Committee is responsible for annually assessing the performance of the executive officers, including the NEOs, and for determining their annual salary, incentive (short- and long-term) compensation goals and payout/grant levels. Each of the four members of our Committee is independent as is defined under NASDAQ listing standards.

 

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The Committee held eightseven meetings during 2020,2022, and its actions included finalizing all aspects of 20202022 executive compensation. The Committee:Committee in 2022, among other items:

 

●

Reviewed its compensation philosophy

●

Conducted an annual performance evaluation of our CEO

●

Reviewed appropriate actions to take in lightConducted an annual performance evaluation of the COVID-19 pandemicour CEO

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●

Reviewed the Committee charter

●

Reviewed the Company’s 20202022 operating budget and its effect on incentive compensation programs for 20202022 (including setting the EPS benchmarks for short-term compensation payouts)payouts excluding one-time merger expenses)

●

Established the performance-based metrics and targets for the annual incentive plans

●

Established the design, award mix and performance goals for the long-term incentive plan

●

Evaluated achievement relative to performance targets, and determined and certified corresponding incentive payouts

	●	Reviewed and updatedapproved a peer group for use in compensation studies
	●	Reviewed the stock ownership guidelines for our executive officers

●

Discussed executive succession planning

●

Reviewed the Company-wide retirement plan programs, and

●

Received education on compensation trends, compliance issues and best practices from the Committee’s compensation consultants, McLagan.

 

Ultimately, the Committee’s decisions are based on a variety of factors, including short- and long-term Company performance, the officer’s level of responsibility, an assessment of individual performance, and competitive market data.

 

Role of Executives in Compensation Committee Deliberations

 

The Committee works closely with the CEO, and the CEO attends Committee meetings to discuss the Company’s compensation and performance matters, particularly as it relates to the other executive officers. For each executive officer other than himself, the CEO presents annual evaluations of such officers and makes recommendations to the Committee regarding their compensation. This assessment considers such factors as our achievement of goals related to corporate, division, function, and individual performance. Our CEO does not play any role with respect to any matter affecting his own compensation and is not present when the Committee discusses and formulates its compensation recommendation for the CEO. The Committee reviews recommendations made by its CEO and information from the executive compensation consultant review. The Committee sets the compensation for our CEO and each of our NEOs at its meetings in the first quarter of each year and subsequently reports its compensation decisions to the full Board of Directors.

 

The general counsel of the Company works with the Committee Chair to provide administrative support and, along with other executives, provide pertinent financial, tax, accounting, or operational information. Other executives, such as those from human resources or finance, may attend meetings from time-to-time to provide their insights and suggestions on pertinent topics. Only Committee members may vote on decisions regarding executive compensation. The Committee regularly conducts a portion of its business in executive session.

 

Role of the Compensation Consultant

 

The Committee views it as important to obtain objective, independent expertise and advice in carrying out its responsibilities, and has the power to retain an independent compensation consultant to assist it in the performance of its duties and responsibilities. The Committee has retained an independent executive compensation consultant to assist in evaluating the compensation practices at the Company and to provide advice and ongoing recommendations regarding executive compensation consistent with our business goals and pay philosophy.

 

In 2020,2022, the Committee continued to engage McLagan, which is part of the RewardsHuman Capital Solutions practice at Aon plc, to provide executive compensation consulting services regarding our compensation programs and pay levels. The scope of McLagan’s executive compensation consulting assignment included the ongoing evaluation of the appropriateness of our peer group of banks as well as a comparison of management’s base salaries, annual cash incentive awards and equity-based compensation to those paid by the banks in the peer bank group. The Committee used data developed by McLagan among the various factors that informed its determination of executive officer pay. While the Committee takes into consideration the review and recommendations of McLagan when making decisions about our executive compensation program, ultimately, the Committee makes its own independent decisions about compensation matters.

 

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McLagan reports directly to and performed services solely on behalf of the Committee and has no other relationship with the Company or its management. The Committee has assessed the independence of McLagan consistent with SEC rules and NASDAQ listing standards and has concluded that McLagan’s work did not involve any conflicts of interest.

 

Peer Selection Process

 

Each year, the Committee re-evaluates and updates the peer group, with the consultant’s guidance, to ensure ongoing relevance. The Committee uses this information for making compensation decisions, such as changes to base salaries, annual cash incentive awards, and long-term equity awards.

 

For 20202022 compensation, the Committee worked with the consultant in 20192021 to select peer banks using the following criteria as of March 31, 2019.2021. The chosen criteria were essentially consistent with the prior year:year and took into consideration the Company’s size given the possibility of future acquisitions and growth in certain criteria:

 

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LocatedNon-thrift institutions located in the continental United States excluding California;

●

Total revenue from $80$190 to $300$550 million;

●

Total assets less than $7$16 billion;

●

Insider ownership less than 35% with no single holder owning more than 15%;

	●	Publicly traded for at least one calendar year;
	●	Non-interest income greater than 15% of total revenue;

●

Market capitalization greater than $350$275 million;

	●	Located in markets with populations greater than 100,000;
	●	Non-performing assets / total assets less than 3.0%; and

●

Return on average assets greater than 0.5%.

 

Based on these criteria fouras well as acquisitions, the Committee removed seven companies were removed from the peer group used for 20202022 compensation decisions: HeritageBoston Private Financial, Bryn Mawr Bank Corp., Cambridge Bancorp, Farmers National Banc Corp., First Financial Corp., Great SouthernHills Bancorp, Inc., Access Nationaland Mercantile Bank Corp. and, Peoples Utah Bancorp. TwoEleven new companies met the criteria and were added to the peer group: National Bank Holdings Corp. and HomeTrust Bancshares Inc.group.

 

The table below lists the peer banks approved by the Compensation Committee for 2020:

2022 compensation decisions, with the newly added peer companies shown in italics:

Bryn Mawr Bank CorporationAmerant Bancorp Inc.	Old Second BancorpNicolet Bankshares Inc.
Carolina Financial CorporationCapital City Bank Group Inc.	Peapack-Gladstone Financial CorporationPark National Corp.
City Holding CompanyCo.	QCR Holdings, Inc.Peapack-Gladstone Financial
Enterprise Financial Services	QCR Holdings Inc
First Busey Corp.	Sandy Spring Bancorp Inc.
First Financial Bankshares	Seacoast Banking CorporationCorp. of FloridaFL
Farmers National BancFirst Merchants Corp.	South Plains Financial Inc.
Great Southern Bancorp Inc.	Southside Bancshares Inc.
HomeTrust BancsharesHomeStreet Inc.	United CommunityThe First Bancshares
Horizon Bancorp Inc.	Tompkins Financial Corp.
Independent Bank Corp.	Univest Corporation of PennsylvaniaFinancial Corp.
National BankInternational Bancshares Corp.	Veritex Holdings Corp.Inc.
MidWestOne Financial Group Inc.	Washington Trust Bancorp Inc.
Nicolet Bankshares, Inc.National Bank Holdings Corp.

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Our total revenue, asset size, net income and market capitalization and that of the peer group as ofestablished for 2022 compensation decisions, using the March 31,^st, 2019 2021 data considered by the Committee when establishing the peer group, effective date are set forth in the following table.table:

 

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Peer Bank Name, Ticker, State		Total Revenue				Total Assets				Net Income				Market Capitalization
		Dollars in millions
Bryn Mawr Bank Corporation (BMTC) PA		$	225			$	4,632			$	59,183			$	729
Carolina Financial Corporation (CARO) SC			175				3,482				60,159				771
City Holding Company (CHCO) WV			208				4,917				74,005				1,256
Enterprise Financial Services Corp. (EFSC) MO			236				6,932				84,452				1,096
Farmers National Banc Corp. (FMNB) OH			106				2,356				32,084				383
HomeTrust Bancshares Inc. (HTBI) NC			127				3,458				26,340				460
Independent Bank Corp. (IBCP) MI			163				3,384				40,059				507
National Bank Holdings Corp. (NBHC) CO			271				5,803				71,909				1,033
Nicolet Bankshares, Inc. (NCBS) WI			147				3,041				41,726				564
Old Second Bancorp Inc. (OSBC) IL			125				2,624				40,668				376
Peapack-Gladstone Financial Corporation (PGC) NJ			163				4,662				44,788				510
QCR Holdings, Inc. (QCRH) IL			192				5,067				45,507				534
Seacoast Banking Corp. of Florida (SBCF) FL			273				6,783				71,953				1,355
Southside Bancshares, Inc. (SBSI) TX			210				6,217				76,704				1,120
United Community Financial Corp. (UCFC) OH			112				2,852				35,728				457
Univest Corporation of Pennsylvania (UVSP) PA			224				5,036				53,772				716
Washington Trust Bancorp, Inc. (WASH) RI			197				5,035				69,716				833
Median		$	192			$	4,662			$	53,772			$	716
Stock Yards Bancorp, Inc.		$	162			$	3,281			$	57,755			$	772

Five banks in the original peer group no longer meet the selection criteria of the peer group due to merger and acquisition activity and are thus omitted from the peer performance comparisons shown in this proxy statement. Those five former peers are Carolina Financial Corp., Enterprise Financial Services, Seacoast Banking Corp. of FL, Southside Bancschares, Inc. and United Community Financial Corp.

Peer Bank Name (Ticker) State		Total Revenue				Total Assets				Market Capitalization
		Dollars in Millions
Amerant Bancorp Inc. (AMTB) FL			254				7,751				704
Capital City Bank Group Inc. (CCBG) FL			226				3,930				438
City Holding Company (CHCO) WV			218				5,894				1,286
Enterprise Financial Services Corp. (EFSC) MO			338				10,191				1,545
First Busey Corp. (BUSE) IL			401				10,760				1,394
First Financial Bankshares (FFIN) TX			504				12,103				6,649
First Merchants Corp. (FRME) IN			493				14,629				2,509
Great Southern Bancorp Inc. (GSBC) MO			214				5,604				776
HomeStreet Inc. (HMST) WA			373				7,265				941
Horizon Bancorp Inc. (HNBC) IN			234				6,056				817
Independent Bank Corp. (IBCP) MI			220				4,426				515
International Bancshares Corp. (IBOC) TX			528				14,922				2,941
MidWestOne Financial Group Inc. (MOFG) IA			194				5,737				495
National Bank Holdings Corp. (NBHC) CO			338				6,950				1,225
Nicolet Bankshares, Inc. (NCBS) WI			202				4,544				835
Park National Corp. (PRK) OH			468				9,914				2,112
Peapack-Gladstone Financial Corporation (PGC) NJ			193				5,970				588
QCR Holdings, Inc. (QCRH) IL			293				5,645				748
Sandy Spring Bancorp (SASR) MD			517				12,873				2,049
Seacoast Banking Corp. of Florida (SBCF) FL			331				8,812				2,004
South Plains Financial Inc. (SPFI) TX			231				3,733				410
Southside Bancshares, Inc. (SBSI) TX			237				6,999				1,258
The First Bancshares (FBMS) MS			203				5,443				769
Tompkins Financial Corp. (TMP) NY			302				8,095				1,233
Univest Corp. of Pennsylvania (UVSP) PA			261				6,417				840
Veritex Holdings Inc. (VBTX) TX			318				9,238				1,617
Washington Trust Bancorp, Inc. (WASH) RI			233				5,719				894
Median			261				6,950				941
Stock Yards Bancorp, Inc.			247				5,995				1,163

 

Referencing the Competitive Market in Determining 20202022 Compensation

 

The Committee considers a number ofseveral factors in determining appropriate pay levels and plan designs for our NEOs. These factors include competitive compensation data from peer companies and the banking market in general. The Committee does not view competitive market prescriptively or tie the compensation levels of our executives to specific market percentiles. Instead, the Committee applies judgment and discretion in establishing targeted pay levels, considering not only competitive market data, but also factors such as company, business unit and individual performance, scope of responsibility, internal pay equity, skill sets, leadership potential and succession planning.

 

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Mix of Pay

 

We believe that our executive compensation program strikes an appropriate balance between fixed and variable pay as well as between short and long-term pay. The following charts for our CEO and our other NEOs illustrate the target compensation established in early 2020,2022, consisting of base salary, annual incentive awards, and long-term equity-based compensation granted in 2020.

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2022.

 

 

Name		Salary				Target Bonus %				Target Bonus				PSUs				SARs				Total
Hillebrand		$	560,000				50	%		$	280,000			$	252,000			$	84,000			$	1,176,000
Poindexter			396,000				40	%			158,400				142,560				47,520				744,480
Thompson			364,000				35	%			127,400				114,660				38,220				644,280
Stinnett			317,000				35	%			110,950				99,855				33,285				561,090
Dishman			289,000				30	%			86,700				78,030				26,010				479,740

 

Name		Salary				Target Bonus %				Target Bonus				PSUs				SARs				Total
Hillebrand		$	710,000				50	%		$	355,000			$	319,500			$	106,500			$	1,491,000
Poindexter			465,000				40	%			186,000				167,400				55,800				874,200
Stinnett			400,000				35	%			140,000				126,000				42,000				708,000
Thompson			385,000				35	%			134,750				121,275				40,425				681,450
Rehm			335,000				35	%			117,250				105,525				35,175				592,950

 

As demonstrated above, variable pay at target for the CEO represents 52% of direct compensation. However, when the BankCompany performs at maximum, payouts for variable pay significantly increase commensurate with that outperformance.

As discussed elsewhere, the award opportunities under our cash incentive plan were reduced during 2020 in response to the pandemic, which had the effect of de-emphasizing cash incentives within the overall 2020 executive compensation program.

 

Each compensation element is discussed in more detail below and outlined in more detail in the 20202022 Summary Compensation Table and 20202022 Grants of Plan-Based Awards Table appearing on pages 4151 and 4352 of this proxy statement.

 

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IV.  Components of Our Compensation Program Compensation Component   Purpose   Link to Performance   Fixed or Performance Based   Short or Long-term                   Base salary   Provide stable compensation and attract and retain executives through market competitive payments   Based on each executive's performance and responsibilities. Used as a basis for short and long-term incentive award goals   Fixed   Short-term 41 Table of Contents  Compensation Component   Purpose   Link to Performance   Fixed or Performance Based   Short or Long-term Cash incentives   Incentivize and reward executives for achievement of certain annual financial goals   Incentives are 100% quantitative to goals important for near term financial success. Includes a measurement of our corporate performance for all executives, as well as business line performance for certain executives   Performance   Short-term                   Performance stock units   Reward executives for sustained long-term performance while aligning the value of awards with the success of our shareholders   Awards vest based on achievement of three-year goals on EPS growth and ROAA versus peers. Three-year performance period plus an additional one-year mandatory holding period on vested awards   Performance   Long-term                   Stock appreciation rights   Align interests of executives with shareholders by rewarding increases in our stock price   Awards only have value if stock price increases. Awards vest ratably over five years   Performance   Long-term   Base Salary   We provide a base salary as the fundamental element of executive compensation. In addition, salaries are the basis from which incentives and other select benefits are derived. In support of our focus to attract and retain top talent, our philosophy is to pay base salaries that are within a competitive range of market practice. Individual pay will vary within the range depending on each executive’s position, performance, experience, and contribution. Salaries areAfter reviewing the basis from which incentivesgrowth in the Company’s size, the competitive marketplace, current economic conditions and other select benefits are derived. Base salary increases ranged from zerothe individual pay factors, the Committee determined that our executives’ base salaries were below market, in part because of the Committee’s decision not to 3.7% depending on changesincrease base salaries for any NEOs in 2021. Accordingly, the Committee determined that, to bring our executives’ base salaries closer to range of market data, the time since the executive received a salary adjustmentmedian for their roles, base salaries for our NEOs would be increased as follows for 2022. Mr. Rehm was not an NEO in 2021 and other factors.became one in 2022.   Executive   2019 Base Salary     2020 Base Salary     Increase/Decrease     2022 Base Salary   2021 Base Salary   Increase   Hillebrand   $ 540,000     $ 560,000       3.7 %   $ 710,000     $ 560,000     27 % Poindexter     385,000       396,000       2.9 %   465,000     396,000     17 % Stinnett     314,000       317,000       1.0 %   400,000     317,000     26 % Thompson     364,000       364,000       0 %   385,000     364,000     6 % Dishman     286,000       289,000       1.0 % Rehm   335,000     277,000     21 %   3242 Table of Contents   Short-Term Cash Incentives   The objective of annual cash incentive compensation is to deliver variable compensation that is conditioned on the attainment of certain financial, departmental and/or operating results of the Company. Therefore, the Committee established an incentive program based upon the achievement of certainan EPS goalsgoal as well as line of business goals applicable to specific officers’ duties and employs a rigorous process to set the performance targets.   For 2020, theThe Committee amended theused diluted EPS measurement to “adjusted” EPS rather than budget EPS as was used in the past. This change was instituted to recognize slower earnings growth that was anticipated in 2020 due to new accounting rules associated with Current Expected Credit Losses (CECL) over which management has little or no control. Like many of its peer banks, the Company adopted ASC 326, Financial Instruments – Credit Losses, as amended, effective in 2020. ASC 326 as amended replaced “incurred loss” methodology for recognizing credit losses with a CECL model, which requires the measurement of all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. The COVID-19 pandemic had significant effects on our customer businesses and their debt service capabilities, and consequently on related loan loss provisions as evaluated under ASC 326 and CECL provisioning that more closely relates to forecasted unemployment and not customer business. Despite this impact, the Committee is committed to setting aggressive targets for management2022, as it hashad done in the past. The target performance goal for 2020 was revised below the prior year amount in recognition of unique circumstances driven by the COVID-19 pandemic. The goal nevertheless required strong performance to achieve target payouts even after the COVID-related adjustments. As the effects of the pandemic became clear and provided the Committee with a view of the potential financial impact, specifically that anticipated financial results were likely not to be reflective of core operating performance, the Committee made further adjustments to shift the EPS metric from an adjusted EPS amount to a pre-provision amount for the full year. Provision is the aspect of performance that is most volatile and most materially affected by COVID-19 in 2020. In light of this change, and in recognition of shareholder expectations and views on mid-cycle changes, the Committee also reduced each payout opportunity level by 50% in recognition of the adjusted metric in an unprecedented year. Goals for line of business executives such as Ms. Thompson, were unchanged but the line of business component was lowered by 25%. These decisions drove short-term incentive payouts to range from 100% to 192% of target, depending on the individual. We anticipate that our 2021 annual incentive program will revert to its historical design rather than utilizing the modified design adopted in 2020 in response to the pandemic.2021.   Messrs. Hillebrand, Poindexter Stinnett and DishmanStinnett   For 2020,2022, the determination as to whether cash incentives would be paid to Messrs. Hillebrand, Poindexter Stinnett and DishmanStinnett was based solely upon the achievement of diluted EPS objectives as set forth below.   The Committee strongly supports the use of EPS exclusively in determining short-term cash incentives for certain executives without specific line of business oversight. The Committee believes that EPS, over the long-term, drives TSR as it represents the culmination of executive officers’ efforts regarding profitability, revenue growth, expense control, risk profile and other elements. Oftentimes, boards use several goals to focus management on specific operational objectives while also balancing credit quality and other risks. With virtually all areas of the Company operating at high performance levels and operating ratios at superior levels, growth in EPS should be, and is, the primary focus of the management team. Establishing the appropriate mix of revenue growth, expense control measures, risk profile and other tactics are areas that management has control over and that should result in higher EPS over time. Therefore, the Committee believes aligning pay with EPS growthperformance gives management the appropriate incentive to make the best decisions. 33   The annual cash incentive formula includes increasingly higher payout percentages for corresponding higher adjusteddiluted EPS levels, further reinforcing the Committee’s pay-for-performance philosophy. EPS targets year-over-year EPS growth rates and corresponding bonus percentages for 20202022 were as follows:               Bonus as a Percentage of Base Salary                 Bonus as a Percentage of Base Salary               Adjusted EPS ($)   EPS Growth 2020/2019   Mr. Hillebrand   Mr. Poindexter   Mr. Stinnett   Mr. Dishman   EPS ($)   Mr. Hillebrand   Mr. Poindexter   Mr. Stinnett   Threshold   2.63     -3.3 %   10 %   8 %   7 %   6 %   3.24       10 %   8 %   7 % Target   2.72     0.0 %   50 %   40 %   35 %   30 %   3.44       50 %   40 %   35 % Maximum   2.84  or greater   4.4 %   100 %   80 %   70 %   60 %   3.69   or greater   100 %   80 %   70 % Actual Results   3.86 *     100 %   80 %   70 % * Adjusted for one-time acquisition costs. This result represents a non-GAAP financial measure. See Appendix A for a reconciliation of GAAP and non-GAAP financial measures.   The Committee set the target at a level that it considered rigorous and challenging and took into accountconsidered the relevant risks and opportunities. More specifically, the Committee reviewed the relevant financial objectives set as a resultbecause of the detailed budgeting process, and assessed various factors related to the achievability of these budget targets, including the risks associated with various macroeconomic factors and the risks of achieving specific actions that underlie the targets and the implied performance relative to prior years. Considering these factors, the Committee initially set the 20202022 target performance level for the diluted EPS goal at $2.72, equal to$3.44, which is below the 20192021 actual adjusted EPS result of $2.72 which included a one-time adjustment due to a change in state tax laws, and 8%$3.79. The 2022 target was set 25% above the 20192021 target of $2.52.$2.75. The Committee determined that setting the 2022 target above 2021 was not practical, as the 2021 actual adjusted EPS was significantly impacted by one-time factors including the acquisition of Kentucky Bancshares, SBA Paycheck Protection Program forgiveness activity, reductions in both the allowance for credit losses on loans and the allowance for credit losses on off-balance sheet exposures, and historic levels of excess liquidity. 43 Table of Contents   Ms. Thompson   Ms. Thompson’s short-term incentive includes three components: net new business, income before overhead allocations and taxes, and consolidated EPS of the Company. The net new business component replaced the former goal tied to gross revenue. The change was made to link her bonus to new business generation and retention, factors which are more closely under her influence while adding focus on new business generation as a key metric. We believeCommittee believes it is important for Ms. Thompson to have both line of business and overall bank performance components to her short-term incentive plan as growth in departmental profitability directly affects the profitability of the Company and significantly enhances shareholder value. As a result, the Committee believes Ms. Thompson should be partly measured on the overall success of the Company. Ms. Thompson’s incentive is weighted 75% for her line of business and 25% for overall Company performance, and the Compensation Committee considers her line of business goals to be appropriately challenging to attain. The matrix used to compute the incentive award, shown below, is structured such that achievement of target performance in all categories results in a cash incentive equal to 35% of base salary. The Committee established a hurdle for adjusted EPS of $3.23 for Ms. Thompson to receive any short-term incentive award, including from her line of business component. Ms. Thompson would not have received any short-term incentive award had adjusted EPS been $3.22 or lower. Because the Company’s actual adjusted EPS in 2022 exceeded this hurdle, Ms. Thompson was eligible to receive a short-term incentive award. Respective targets and corresponding bonus percentages for Ms. Thompson’s equally weighted line of business components are as follows:   Line of Business Component     Net New Business     Income Before Overhead Allocation and Taxes     Net New Business     Income Before Overhead Allocation and Taxes     Net New Business (50% of WM&T Performance)     Bonus as Percentage of Base Salary     Percentage Increase over Prior Year     Bonus as Percentage of Base Salary     Net New Business ($)     Bonus as Percentage of Base Salary     Percentage Increase over Prior Year     Bonus as Percentage of Base Salary   Threshold   $ 650,000       2.625 %     2.5 %     2.625 %   975,000     2.625 %   5.0 %   2.625 % Target     850,000       13.125 %     7 %     13.125 %   1,175,000     13.125 %   8.0 %   13.125 % Maximum     1,100,000       26.25 %     11.5 %     26.25 %   1,425,000     26.25 %   11.75 %   26.25 % Actual Results     1,200,000       26.25 %     10.6 %     23.63 %   1,590,000     26.25 %   -10.72 %   0 % EPS Component     EPS ($)   Bonus as Percentage of Base Salary   Threshold     3.24         1.75 % Target     3.44         8.75 % Maximum     3.69   or greater     17.50 % Actual Results     3.86  *       17.50 % * Adjusted for one-time acquisition costs. This result represents a non-GAAP financial measure. See Appendix A for a reconciliation of GAAP and non-GAAP financial measures. Mr. Rehm Mr. Rehm’s short-term incentive includes two components: a line of business component and consolidated EPS of the Company. The Committee believes it is important for Mr. Rehm to have both line of business and overall bank performance components to his short-term incentive plan as growth in departmental profitability directly affects the profitability of the Company and significantly enhances shareholder value. As a result, the Committee believes Mr. Rehm should be partly measured on the overall success of the Company. Mr. Rehm’s incentive is weighted 75% for his line of business and 25% for overall Company performance, and the Compensation Committee considers his line of business goals to be appropriately challenging to attain. The matrix used to compute the incentive award, shown below, is structured such that achievement of target performance in all categories results in a cash incentive equal to 35% of base salary. The Committee established a hurdle for adjusted EPS of $3.23 for Mr. Rehm to receive any short-term incentive award, including from his line of business component; Mr. Rehm would not have received any short-term incentive award had adjusted EPS been $3.22 or lower. Because the Company’s actual adjusted EPS in 2022 exceeded this hurdle, Mr. Rehm was eligible to receive a short-term incentive award.   3444 Table of Contents   EPSLine of Business Component   EPS ($) EPS Growth Bonus as Percentage of Base Salary Threshold 2.63   -3.3 % 1.75 % Target 2.72   0.0 % 8.75 % Maximum 2.84 or greater 4.4 % 17.50 %      COVID-related AdjustmentsMr. Rehm’s line of business bonus consists of a matrix of all areas of his responsibility including:  Commercial Banking, Private Banking, Corporate Cash Management, International, and Correspondent Banking.  The Commercial Banking areas are the source of significant loan and deposit growth.  Net interest income comprises approximately two-thirds of the Company’s consolidated revenues.  Growth in these areas significantly impacts the profitably of the Company.  Mr. Rehm’s matrix assigns various weights to Short-Term Cash Incentivesseveral categories including: net loan and Payoutsdeposit growth, related fee income, credit quality and overall management.  The program requires attainment of a minimum of 20 points in aggregate for any incentive bonus to be paid.  Additionally, certain point deductions are considered to promote asset quality including deductions for higher than expected loan provisioning and non-compliance with established customer service standards.  Conversely, better than expected credit quality provides additional points.  The matrix used to compute the incentive award, shown below, is structured such that achievement of target performance in all categories results in a cash incentive for his line of business component equal to 26.25% of base salary.  Goals are considered appropriately challenging and difficult to achieve.   AsThe loan growth component of Mr. Rehm’s incentive plan is weighted the effectshighest.  This goal is based on growth of loans outstanding rather than gross loan production.  More specifically, loan growth is measured as average loans outstanding year over year.  Total loans increased $1.04 billion, or 25%, from December 31, 2021 to December 31, 2022, driven by the pandemic unfolded, it became clearaddition of $632 million in loans related to the Committee that our Threshold levelCommonwealth Bancshares acquisition and strong organic loan growth, which more than offset a $122 million decline in the Paycheck Protection Program (PPP) loan portfolio. Excluding the loans acquired through the Commonwealth Bancshares acquisition and the PPP portfolio, record loan growth of corporate EPS under our annual incentive plan would likely not be attained due primarily to increased$529 million, or 13%, was experienced between December 31, 2021 and December 31, 2022, driven by solid organic growth across virtually every loan loss provision, and that annual incentive payments for at least four of our executives would be eliminated entirely. The Committee did not believe that our strong core operating performance warranted elimination of annual incentive payouts. Therefore, on September 15, 2020 the Committee made the decision to shift the EPS targets from an adjusted EPS amount to a pre-provision amount for the full year. Provision is the aspect of performance that is most volatile and most materially affected by COVID in 2020. The target performance level for the pre-provision EPS goal incorporated the company’s budgeted earnings for the full-year less budgeted provision. In this way, the Committee revised the specific profitability measure under the plan but did not revise budgeted profitability from that initially expected at the beginning of the year. In light of this change, and in recognition of shareholder expectations and views of mid-cycle changes, the Committee also reduced each payout opportunity level by 50% for four of our NEOs. Pre-provision EPS targets, lowered bonus percentages and actual results for 2020 were as follows:       Bonus as a Percentage of Base Salary   Pre-Provision EPS ($) Mr. Hillebrand Mr. Poindexter Mr. Stinnett Mr. Dishman Threshold 2.80   5 % 4 % 3.5 % 3 % Target 2.89   25 % 20 % 17.5 % 15 % Maximum 3.01 or greater 50 % 40 % 35 % 30 % Actual Results  $3.17    50  %  40 %  35 % 30 % portfolio segment.   The following table summarizesis a summary of Mr. Rehm’s performance under the revised short-term incentive opportunities (adjusted for COVID) and actual payments made for 2020 performance.     % of Base Salary     Potential Payout Amounts ($)     Actual       Threshold     Target     Maximum     Threshold     Target     Maximum     Earned ($)   Hillebrand     5 %     25 %     50 %   $ 28,000     $ 140,000     $ 280,000     $ 280,000   Poindexter     4 %     20 %     40 %     15,840       79,200       158,400       158,400   Stinnett     4 %     18 %     35 %     11,095       55,475       110,950       110,950   Dishman     3 %     15 %     30 %     8,670       43,350       86,700       86,700   35 Goals for line of business executives such as Ms. Thompson were unchanged, butcomponent. Line of Business Component Specific Components Component Weight at Target Performance   Departmental Points Earned Loan growth  50%   97.68 Non-interest deposit growth  10%   20.00 Interest bearing deposit growth 10%   20.00 Loan fees  5%   10.00 Deposit service charge revenue  5%   6.45 Corporate treasury management revenue  5%   6.40 Credit card revenue  5%   7.91 Credit quality  10%   20.00 Total  100%   188.44 The following summarizes the line of business component was lowered by 25%. The following detailsof Mr. Rehm’s parameter of the components of Ms. Thompson’s 2020 short term cash incentive as a percentage of her base salary:plan.   Line of business net new business 19.69 % Line of business income before overhead allocation and taxes 17.72 % EPS component 8.75 % Total 46.16 % Bonus as a Percentage of Salary Threshold Target Maximum Actual 50 100 200 188.44 13.125% 26.25% 52.50% 49.46%   For 2020, Ms. Thompson receivedEPS Component     EPS ($)   Bonus as Percentage of Base Salary   Threshold     3.24         1.75 % Target     3.44         8.75 % Maximum     3.69   or greater     17.50 % Actual Results     3.86 *        17.50 % * Adjusted for one-time acquisition costs. This result represents a cash incentivenon-GAAP financial measure. See Appendix A for a reconciliation of $168,022.GAAP and non-GAAP financial measures. 45 Table of Contents Short-Term Cash Payouts   Having determined the total 20202022 annual incentive plan payouts for each eligible NEO, the Committee then approved the annual incentive plan payout amounts as summarized below:     Salary ($)     Target Bonus (%)     Target Bonus ($)     Actual Earned %     Actual Earned ($)   Executive   Salary ($)   Target Bonus (%)   Target Bonus ($)   Actual Earned %   Actual Earned ($)   Hillebrand   $ 560,000       50 %   $ 280,000       100 %   $ 280,000     710,000     50 %   355,000     200 %   710,000   Poindexter     396,000       40 %     158,400       100 %     158,400     465,000     40 %   186,000     200 %   372,000   Stinnett   400,000     35 %   140,000     200 %   280,000   Thompson     364,000       24.1 %     87,725       192 %     168,022     385,000     35 %   134,750     125 %   168,438   Stinnett     317,000       35 %     110,950       100 %     110,950   Dishman     289,000       30 %     86,700       100 %     86,700   Rehm   335,000     35 %   117,250     191 %   224,316     Long-Term Incentives   The Committee believes that long-term incentive stock awards effectively align executives with interests of shareholders by providing individuals who have responsibility for management and growth of the Company with an opportunity to increase their ownership of the Company's Common Stock and to have a meaningful interest in the future of the Company and sustained shareholder value creation.  In making determination about the mix of vehicles in the long-term incentive equity grants, the Compensation Committee allocates a higher than median portion to performance-based equity, and a lower portion to time-based equity.   20202022 Equity Awards   In 2020,2022, the Committee continued its historical practice of having PSUs at target constitute 75% of the grant date value of the total long-term award and SARs represent 25% of the total long-term award. The Committee favors continuing the use of SARs because they directly align the interests of executives with shareholders’ interests as value is only realized through a rising stock price. The value of the long-term incentive award was determined as a percentage of the participant’s 20202022 base salary and is subsequently expressed as a number of shares of Company Common Stock valued on the date of grant. Fractional shares are not distributable. The following table summarizes the equity awards made to NEOs under the 2015 Omnibus Equity Compensation Plan.in 2022.   2020The Compensation Committee generally makes grants of stock awards to our NEOs at the second Compensation Committee meeting of our fiscal year, which typically occurs in mid-February. Awards are neither timed to relate to the price of our stock nor to correspond with the release of material non-public information, although grants are generally made when our trading window is open. Grants to current employees are generally effective on the date of the Compensation Committee meeting approving such grants. Grants to new employees, including potential NEOs, are typically made at the next regularly scheduled Compensation Committee meeting following the employee’s start date. The standard vesting schedule for our equity grants is 100% after the third year for performance stock units and 20% per year over five years for stock appreciation rights. 2022 Grant Summary             PSUs at Target (1)     SARs (2)             PSUs at Target (1)     SARs (2)     % of Base Salary     Number Granted     Fair Value     Number Granted     Fair Value     % of Base Salary     Number Granted     Fair Value     Number Granted     Fair Value   Hillebrand     60 %     7,809     $ 251,996       14,482     $ 83,996     60 %   6,590     $ 319,483     10,142     $ 106,491   Poindexter     48 %     4,417       142,537       8,193       47,519     48 %   3,452     167,353     5,314     55,797   Stinnett     42 %     3,094       99,843       5,738       33,280     42 %   2,599     126,000     4,000     42,000   Thompson     42 %     3,553       114,655       6,589       38,216     42 %   2,501     121,248     3,850     40,425   Dishman     36 %     2,418       78,029       4,484       26,007   Rehm   42 %   2,176     105,492     3,350     35,175     (1) Because grantees are not entitled to dividend payments during the performance period and have a mandatory one-year post-vesting holding period, the fair value of these PSUs is estimated based upon the fair value of the underlying shares on the date of the grant. (2)  Because grantees are not entitled to dividend payments during the performance period and have a mandatory one-year post-vesting holding period, the fair value of these PSUs is estimated based upon the fair value of the underlying shares on the date of the grant. (2) SARs are valued using Black-Scholes option pricing model as of the date of grant.    3646 Table of Contents   Performance Stock Units   In 2020,2022, the Committee granted PSUs to each of the NEOs. The terms of the 2020 PSUs were not revised based on changes to economic outlook due to the COVID-19 pandemic. PSUs were awarded under the following terms:   Performance period:   Three years, beginning January 1, 20202022 through December 31, 2022.2024.     Performance goals at   50% weighting each: 1. Cumulative EPS over the three-year performance period, excluding one-timeany acquisition costs and the effects of any changes in income tax rates that become effective during the performance period.     2. ROAA over the three-year performance period compared to all publicly-tradedpublicly traded banks with total assets between $1.5$6.0 and $7.0$16.0 billion as calculated by S&P Global Market Intelligence. Performance will be measured by calculating the simple average of the Company’s ROAA for the three years in the performance period and determining the percentile ranking as compared to peers. Performance ranges: Performance ranges: The PSUs provide for threshold, target and maximum performance goals as follows:     Threshold   Target   Maximum     Threshold   Target   Maximum                               Three-year cumulative EPS       See Below             See below       Peer bank ROAA performance percentile   80%   85%   90%     80%   85%   90%     Three-year EPS performance goals have been established by the Committee and consider the Company’s strategic plan as well as projected growth targets in order to maintain our standard as a top-performing community bank. The three-year EPS goal has defined threshold, target and maximum performance levels. We have elected not to disclose these performance levels for competitive reasons, but we note that the levels for 20202022 PSUs were set higher than those for the grants of PSUs made in 2019.2021, and are substantially above our EPS performance in 2021 and prior years.   The table below summarizes the design of the PSU portion of the 20202022 long-term incentive plan (all percentages relate to each executive’s 20202022 base salary in effect at January 1, 2020)2022):     EPS   ROAA vs. Peers   Total Value of PSUs that may be Earned, Based on Grant-Date Value, as a % of Base Salary   EPS     ROAA vs. Peers     Total Value of PSUs that may be Earned, Based on Grant-Date Value, as a % of Base Salary     Threshold   Target   Maximum   Threshold   Target   Maximum   Threshold   Target   Maximum   Threshold   Target   Maximum     Threshold   Target   Maximum     Threshold   Target   Maximum   Hillebrand   9.0 %   22.5 %   56.25 %   9.0 %   22.5 %   56.3 %   18.0 %   45.0 %   112.5 %   9.00 %   22.50 %   56.25 %   9.00 %   22.50 %   56.25 %   18.00 %   45.00 %   112.50 % Poindexter   7.2 %   18.0 %   45.0 %   7.2 %   18.0 %   45.0 %   14.4 %   36.0 %   90.0 %   7.20 %   18.00 %   45.00 %   7.20 %   18.00 %   45.00 %   14.40 %   36.00 %   90.00 % Stinnett   6.3 %   15.75 %   39.375 %   6.3 %   15.75 %   39.375 %   12.6 %   31.5 %   78.75 %   6.30 %   15.75 %   39.38 %   6.30 %   15.75 %   39.38 %   12.60 %   31.50 %   78.75 % Thompson   6.3 %   15.75 %   39.375 %   6.3 %   15.75 %   39.375 %   12.6 %   31.5 %   78.75 %   6.30 %   15.75 %   39.38 %   6.30 %   15.75 %   39.38 %   12.60 %   31.50 %   78.75 % Dishman   5.4 %   13.5 %   33.75 %   5.4 %   13.5 %   33.75 %   10.8 %   27.0 %   67.50 % Rehm   6.30 %   15.75 %   39.38 %   6.30 %   15.75 %   39.38 %   12.60 %   31.50 %   78.75 %   PSUs certified as earned by the Committee at the end of the performance period will be distributed to participants by March 31st of the year following the performance period. All payouts of PSUs will be made in shares of Company Common Stock based on the percentage earned of the target number of shares per participant determined at the beginning of the performance period.   PSUs generally require the executive to remain employed or serve on the Board of Directors until the end of a performance cycle in order to vest and be paid in shares of Common Stock, with prorated awards still paiddistributed after the end of the performance cycle to those who leave the Company mid-cycle due to death, disability or retirement (age 60).  PSUs also vest at the target level if a change in control occurs before a performance cycle ends. Executives do not receive the benefit of any dividends or other distributions paid on stock related to PSUs until after the stock is actually issued. In addition, executives are required to observe a one-year holding period after vesting, net of any shares sold to pay income taxes.   3747 Table of Contents   No pandemic-related changes were implemented to our long-term incentive awards granted in 20202022 or prior years.   PSUs granted in 20182020 vested as of December 31, 20202022 and will be certified and distributed by March 31, 2021.2023. Based on our aggregate EPS for the three-year performance period 2018-20202020-2022 and preliminary data indicating that our average adjusted ROAA for the three-year performance period of 1.68% significantly1.53%* exceeded the 90th percentile of the comparator group, we expect that recipients will be awarded grants on the EPS portion at targetmaximum and the ROAA portion at the maximum performance levels.   * Adjusted for one-time acquisition costs. This result represents a non-GAAP financial measure. See Appendix A for a reconciliation of GAAP and non-GAAP financial measures. Stock Appreciation Rights   The Committee favors continuing the use of SARs because they directly align the interests of executives with shareholders’ interests as value is only realized through a rising stock price. SARs provide a NEOthe recipient with the right to receive Company Common Stock equal in value to the appreciation in Company stock, if any, over the stock price as of the grant date as compared with the stock price during the exercise period. The vesting period of the SARs granted to executives in 2020 is2022 vest ratably over five years and the exercise period is ten years.years from the grant date.   V.  Additional Compensation Policies and Practices Other Executive Benefits   Post-Employment Compensation and Benefits. To enhance the objective of retaining key executives, the Company established Change in Control Severance (“CICS”) Agreements, concluding it to be in the best interests of the Company and its shareholders to take reasonable steps to compensate key executives, including all NEOs, in the event of a change in control or similar event. With these agreements in place, if the Company should receive takeover or acquisition proposals from third parties, the Company will be able to call upon these key executives for their advice and assessment of whether such proposals are in the best interests of shareholders, free of the influences of their personal employment situations. The CICS Agreements were updated in 2013 to require both a significant change in the Company’s ownership and termination of employment before executives would receive any payment under the agreements. This approach is commonly referred to as a double-trigger.double trigger.   Supplemental Retirement Benefits. The Bank has a nonqualified deferred compensation plan which, until 2006, merely provided all executive officers, including all NEOs, with the abilitythat allows executives to defer a portion of their cash compensation, and related taxes, and instead receive such compensation after their employment with the Bank ends or, in certain cases, while still employed bycredits those deferrals with contributions that the Bank through in-service distributions. Amendments in 2006 provided executives with Bank contributions for the amount of match they do not receive under the KSOP because of certain limits under the KSOP or the Internal Revenue Code. The Committee believes that the nonqualified deferred compensation plan provides the Company with the ability to attract and retain key employees. Further details about the nonqualified deferred compensation plan may be found in the narrative preceding the Nonqualified Deferred Compensation Table.   In the 1980's,1980s, the Bank created a plan (called the Senior Officer Security Plan (“SOSP”)) to enhance the retirement security of certain NEOs by granting them a fixed annual benefit per year after retirement. This fixed amount was originally designed to supplement broader-based retirement programs and bring the executives' retirement income from combined sources of the tax-qualified employer retirement programs, social securitySocial Security and this planthe SOSP to a level of approximately 70% of their pre-retirement income. Once implemented, the benefit amounts were never adjusted and therefore the planSOSP is not expected to yield the level of income replacement contemplated. This planThe SOSP still covers one current executive officer, Ms. Thompson, and there are no intentions to adjust her payment or add additional participants.   38 Stock Ownership Guidelines   The Committee believes that our executive officers should maintain meaningful equity interests in the Company to ensure that their interests are aligned with those of our shareholders. We adopted stock ownership guidelines that require our executive officers to own directly or indirectly a minimum level of the Company’s Common Stock, depending upon the executive’s position. Shares held by the executive, the executive’s spouse, or minor children, including, without limitation, shares held for the account of the executive in the Dividend Reinvestment Plan, the Company’s KSOP plan or an IRA are deemed owned by the executive under the guidelines. New or newly promoted officers to an executive level are required to reach the guidelines within five years of attaining executive status. The valuation is based on the closing price on the last trading day of the preceding calendar year. The Committee regularly reviews these guidelines in light of changing market trends, governance best practices and policies of our peer banks. In November 20202021 this review led us to increasemaintain the multiple for our CEO from 5x toat 6x, in order to remainremaining in a leadership position with respect to our ownership guidelines.   Position  Multiple of Base Salary  Chief Executive Officer 6x President 4x All Other Named Executive Officers 3x   All NEOs are currently exceed his or herin compliance with their applicable stock ownership guidelines. 48 Table of Contents   Clawbacks   The Committee maintains a general clawback policy to give the Company the flexibility to require the return of paid compensation in certain circumstances.   The policy allows the Company to recover some or all of the amounts paid with respect to awards that were based on achievement of performance criteria, at any time in the three calendar years following payment, if and to the extent that the Committee concludes that (i) federal or state law or the listing requirements of the exchange on which the Company’s stock is listed for trading so require, (ii) the performance criteria required for the award were not met, or not met to the extent necessary to support the amount of the award that was paid, or (iii) as required by Section 304 of the Sarbanes-Oxley Act of 2002, after a restatement of the Company’s financial results as reported to the Securities and Exchange Commission.   Anti-Hedging and Anti-Pledging Policy   Under our insider trading policy, no director, officer (including our NEOs) or employee is permitted to engage in securities transactions that would allow them either to insulate themselves from, or profit from, a decline in the Company’s stock price. Similarly, no director, officer (including our NEOs) or employee may enter into hedging transactions in the Company stock. Such transactions include (without limitation) short sales as well as any hedging transactions in derivative securities (e.g. puts, calls, swaps or collars) or other speculative transactions related to the Company’s stock. Holding Company stock in a margin account or pledging Company stock is also generally prohibited.   Income Tax Considerations   Section 162(m) of the Internal Revenue Code generally limits the deductibility of compensation in excess of $1 million paid by a public company to its CEO or anynamed executive officers. The Committee believes that tax deductibility is one of its other three most highly paidmany factors to be considered in developing an appropriate compensation package for executives, and that shareholder interests are not best served if the Committee’s flexibility and discretion is limited by restricting executive officers (other than the CFO). For 2017 and prior years, this limitation did not applycompensation to compensation that qualified as “performance-based”, as defined by the tax code to mean compensation that was based on the achievement of pre-established objective performance goals and paid under a plan pre-approved by our shareholders. For 2017 and prior years, the Committee monitored the effect of Section 162(m) on the deductibility of the Company’sdeductible compensation. The Committee weighedhas in the benefits of full deductibility with the other objectives of the executive compensation program and, accordingly, could have from time to time paidpast approved compensation that wasmay not tax-deductible. For 2017 and prior years, no compensation paid to executives was limited as to deductibility underbe fully deductible because of Section 162(m). In December 2017, Similarly, the Tax Cuts and Jobs Act was enacted. Under the Tax Cuts and Jobs Act, the qualified performance-based compensation exception to Section 162(m) that generally provided for the continued deductibility of performance-based compensation was repealed, effective for tax years commencing on or after January 1, 2018. Accordingly, commencing with our fiscal year ended December 31, 2018, compensation to our NEOs in excess of $1,000,000 not awarded prior to November 2, 2017, will generally not be deductible. Performance-based compensation awarded to our NEOs for periods prior to November 2, 2017, such as our performance-based PSUs granted in 2017 and prior years that have not yet been settled into shares of Common Stock, are expected to continue to qualify for the performance-based compensation exemption under Section 162(m). 39 The Committee will continue to evaluate the impact of the elimination of the performance-based exemption on its compensation programs. The Committee may exercise its judgment in this area and award compensation in the future that is not fully deductible under Section 162(m) if the Committee believes that such compensation will help the Company achieve its business objectives and serve the best interests of its shareholders.   49 Table of Contents REPORT OF THE COMPENSATION COMMITTEE   The Committee has reviewed and discussed with management the Compensation Discussion and Analysis and based on such review and discussions the Committee has recommended to the Board that the Compensation Discussion and Analysis be included in Stock Yards Bancorp, Inc.’s Annual Report on Form 10-K and the Proxy Statement.   The Compensation Committee of the Board of Directors of Stock Yards Bancorp, Inc.     Richard A. Lechleiter, Chairman Stephen M. Priebe Edwin S. Saunier John L. Schutte Norman Tasman     The report of the Compensation Committee shall not be deemed filed for purposes of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liabilities of that section, nor shall it be deemed soliciting material or subject to Regulation 14A of the Exchange Act or incorporated by reference in any filing under the Exchange Act or the Securities Act of 1933, except as shall be expressly set forth by specific reference in such filing.   50 Table of Contents   Executive Compensation Tables and Narrative Disclosure   The following table sets forth information concerning the compensation of our Chief Executive Officer, Chief Financial Officer, and the three most highly compensated executive officers other than the Chief Executive Officer and Chief Financial Officer. Throughout this section, we refer to executives named in this table individually as the "executive"“executive” and collectively as the "executives"“executives”. Each executive holds those same offices at the Bank, as well.   Compensation is presented for all years in which the executives were also named executive officers.   Summary Compensation Table Summary Compensation Table                                                                   Name and   Salary Bonus Stock Awards Option Awards Non-Equity Incentive Plan Compensation Change in Pension Value and Nonqualified Deferred Compensation Earnings All Other Compensation Total     Salary   Bonus   Stock Awards   Option Awards   Non-Equity Incentive Plan Compensation   Change in Pension Value and Nonqualified Deferred Compensation Earnings   All Other Compensation   Total   Principal Position Year ($) ($) ($) (1) ($) (2) ($) (3) ($) (4) ($) (5) (6) ($) Year   ($)     ($)     ($)(1)     ($)(2)     ($)(3)     ($)(4)     ($)(5)     ($)                                                         James A. Hillebrand 2020 560,000 - 251,996 83,996 280,000 - 92,326 1,268,318 2022   710,000     -     319,483     106,491     710,000     -     116,390     1, 962,364   Chairman and Chief Executive 2019 540,000 - 242,980 80,999 540,000 - 89,155 1,493,134 2021   560,000     -     251,975     83,996     560,000     -     92,843     1,548,814   Officer 2018 444,000 - 148,333 187,437 229,320 - 73,258 1,082,348 2020   560,000     -     251,996     83,996     280,000     -     92,326     1,268,318                                                         Philip S. Poindexter 2020 396,000 - 142,537 47,519 158,400 - 66,544 811,000 2022   465,000     -     167,353     55,797     372,000     -     78,211     1,138,361   President 2019 385,000 - 138,594 46,197 308,000 - 65,111 942,902 2021   396,000     -     142,519     47,512     316,800     -     67,144     969,975   2018 328,000 - 97,332 129,048 152,133 - 49,661 756,174 2020   396,000     -     142,537     47,519     158,400     -     66,544     811,000                                                         T. Clay Stinnett 2020 317,000 - 99,843 33,280 110,950 - 53,682 614,755 2022   400,000     -     126,000     42,000     280,000     -     66,693     914,693   Chief Financial Officer 2019 301,000 - 81,260 89,933 180,600 - 50,816 703,609 2021   317,000     -     99,812     33,277     221,900     -     53,265     725,254                     2020   317,000     -     99,843     33,280     110,950     -     53,682     614,755                                       Kathy C. Thompson 2020 364,000 - 114,655 38,216 168,022 100,368 63,914 849,175 2022   385,000     -     121,248     40,425     168,438     -     68,503     783,614   Senior EVP and Manager of 2019 364,000 - 114,635 38,219 159,250 127,233 63,809 867,146 Senior EVP and Director of 2021   364,000     -     114,655     38,220     254,800     -     64,343     836,018   Wealth Management and Trust 2018 364,000 - 114,679 38,222 133,770 - 65,352 716,023 2020   364,000     -     114,655     38,216     168,022     100,368     63,914     849,175                                                         William M. Dishman III 2020 289,000 - 78,029 26,007 86,700 - 49,817 529,553 EVP and Chief Risk Officer 2019 286,000 - 77,192 25,739 171,600 - 49,540 610,071 Michael Rehm 2022   335,000     -     105,492     35,175     224,316     -     58,438     758,421   Chief Lending Officer                                                                   2018 275,000 - 74,245 24,749 111,705 - 47,650 533,349                                                         (1) Stock awards include PSUs entitling executives to the issuance of one share of Common Stock for each vested PSU after the expiration of a three-year performance period. The value of the PSU grants measured at the grant date value was $48.48 in 2022, $44.44 in 2021 and $32.27 in 2020, $32.03 in 2019 and $31.54 in 2018.2020. The amount of related compensation included in the table above is that associated with the most probable performance outcome at the time of the grant. The table below reflects first the amount of compensation included in the table above is that associated withSummary Compensation Table and second, the most probable performance outcome at the time of the grant. The table below reflects first themaximum amount of compensation included in the Summary Compensation Table and second, the maximum amount achievable under these grants.   2020     2019     2018     2022     2021     2020     Most Probable on Date of Grant     Maximum     Most Probable on Date of Grant     Maximum     Most Probable on Date of Grant     Maximum     Most Probable on Date of Grant ($)     Maximum ($)     Most Probable on Date of Grant ($)     Maximum ($)     Most Probable on Date of Grant ($)     Maximum ($)   Hillebrand   $ 251,996     $ 629,975     $ 242,980     $ 607,481     $ 148,333     $ 370,816     319,483     798,708     251,975     629,981     251,996     629,975   Poindexter     142,537       356,390       138,594       346,469       97,332       243,363     167,353     418,479     142,519     356,364     142,537     356,390   Stinnett     99,843       249,608       81,260       203,166       N/A       N/A     126,000     314,975     99,812     249,619     99,843     249,608   Thompson     114,655       286,622       114,635       286,636       114,679       286,667     121,248     303,145     114,655     286,638     114,655     286,622   Dishman     78,029       195,072       77,192       193,045       74,245       185,644   Rehm   105,492     263,780     -     -     -     -     (2) Customary SARs were granted with an exercise price equal to the closing price of the Common Stock on the applicable grant date, or $54.91,$ 37.30, $36.6550.71 and $35.90$37.30 in 2020, 20192022, 2021 and 2018,2020, respectively. The fair value of each SAR was $10.50, $9.75 and $5.80, $6.61 and $6.66 respectively.SARs granted to Mr. Stinnett in conjunction with his May 1, 2019 promotion were granted with an exercise price of 10% higher than the closing price of the Common Stock on the grant date or $34.71, and the fair value of each of these SARs was $5.03. For assumptions used in valuation of SARs and other information regarding stock-based compensation, refer to Note 1719 to the 20202022 consolidated financial statements included in our Annual Report on Form 10-K filed with the SEC.   4151 Table of Contents   (3) In the earlier section of this proxy statementProxy Statement captioned“Compensation Discussion and Analysis”, we refer to Non-Equity Incentive Plan Compensation as “Compensation Discussion and Analysisshort-term cash incentives”, we refer to Non-Equity Incentive Plan Compensation as or “short-term cash incentivesincentives.” or “cash incentives.” (4) Assumptions used in calculating the change in actuarial value of the defined benefit above include a discount rate of 5.10% for December 31, 2022, 2.84% for December 31, 2021 and 2.43% for December 31, 2020, 3.16% for December 31, 2019 and 4.20% for December 31, 2018, retirement age of 65, and payments occurring for 15 years, with no pre- or post-retirement mortality. Earnings on the executives' nonqualified deferred compensation balances are not included above. The investment alternatives of the nonqualified plan do not and have not offered above-market rates of interest or preferential returns. Earnings on the executives' nonqualified deferred compensation balances are not included above. The investment alternatives of the nonqualified plan do not and have not offered above-market rates of interest or preferential returns. (5) All Other Compensation in 20202022 consists of the following:       Hillebrand     Poindexter     Stinnett     Thompson     Dishman   Matching contribution to 401(k)   $ 17,100     $ 17,100     $ 17,100     $ 17,100     $ 17,100   Contribution to ESOP     5,700       5,700       5,700       5,700       5,700   Contribution to nonqualified plan *     66,800       40,560       27,920       35,440       23,440   Other     2,726       3,184       2,962       5,674       3,577   * This is a Bank contribution to supplement the contributions that the executive does not receive under the Bank’s tax-qualified KSOP because of plan limits or Internal Revenue Code limits.     Hillebrand     Poindexter     Stinnett     Thompson     Rehm   Matching contribution to 401(k)   $ 18,300     $ 18,300     $ 18,300     $ 18,300     $ 18,300   Contribution to ESOP     6,100       6,100       6,100       6,100       6,100   Contribution to nonqualified plan *     89,200       50,000       39,600       37,200       29,200   Other     2,790       3,811       2,693       6,903       4,838     (6)* Perquisites totaled less than $10,000 for eachThis is a Bank contribution to supplement the contributions that the executive and are thereforedoes not included inreceive under the table.Bank’s tax- qualified KSOP because of plan limits or Internal Revenue Code limits.   The following table sets forth information concerning plan-based awards made to the executives during the last fiscal year.   Grants of Plan-Based Awards Table                                 All other   All other                                         stock   option       Grant                                 awards:   awards:   Exercise   date fair       Payouts   Estimated future payouts     number of   number of   or base   value of       under non-equity   under equity     shares of   securities   price of   stock and       Payouts under non-equity incentive plan awards (1)     Estimated future payouts under equity incentive plan awards (2)     All other stock awards: number of shares of stock or     All other option awards: number of securities underlying     Exercise or base price of option     Grant date fair value of stock and option       incentive plan awards (1)   incentive plan awards (2)     stock or   underlying   option   option   Grant   Threshold     Target     Maximum     Threshold     Target     Maximum     units     options     awards     awards   Grant   Threshold   Target   Maximum   Threshold   Target   Maximum     units   options   awards   awards   Name date   ($)     ($)     ($)     (#)     (#)     (#)     (#)     (#)(3)     ($/Sh)     ($)   date   ($)   ($)   ($)   ($)   ($)   ($)     (#)     (#)(3)    ($/Sh)   ($)    Hillebrand 2/25/20     28,000       140,000       280,000       -       -       -       -       -       -       -   2/14/22   71,000     355,000     710,000     -     -     -     -     -     -     -   2/25/20     -       -       -       3,123       7,809       19,522       -       -       -       251,996   2/14/22   -     -     -     2,636     6,590     16,475     -     -     -     319,483   2/25/20     -       -       -       -       -       -       -       14,482       37.30       83,996   2/14/22   -     -     -     -     -     -     -     10,142     54.91     106,491   Poindexter 2/25/20     15,840       79,200       158,400       -       -       -       -       -       -       -   2/14/22   37,200     186,000     372,000     -     -     -     -     -     -     -   2/25/20     -       -       -       1,767       4,417       11,044       -       -       -       142,537   2/14/22   -     -     -     1,381     3,452     8,632     -     -     -     167,353   2/25/20     -       -       -       -       -       -       -       8,193       37.30       47,519   2/14/22   -     -     -     -     -     -     -     5,314     54.91     55,797   Stinnett 2/25/20     11,095       55,475       110,950       -       -       -       -       -       -       -   2/14/22   28,000     140,000     280,000     -     -     -     -     -     -     -   2/25/20     -       -       -       1,237       3,094       7,735       -       -       -       99,843   2/14/22   -     -     -     1,039     2,599     6,497     -     -     -     126,000   2/25/20     -       -       -       -       -       -       -       5,738       37.30       33,280   2/14/22   -     -     -     -     -     -     -     4,000     54.91     42,000   Thompson 2/25/20     22,313       111,493       222,950       -       -       -       -       -       -       -   2/14/22   26,950     134,750     269,500     -     -     -     -     -     -     -   2/25/20     -       -       -       1,421       3,553       8,882       -       -       -       114,655   2/14/22   -     -     -     1,000     2,501     6,253     -     -     -     121,248   2/25/20     -       -       -       -       -       -       -       6,589       37.30       38,216   2/14/22   -     -     -     -     -     -     -     3,850     54.91     40,425   Dishman 2/25/20     8,670       43,350       86,700       -       -       -       -       -       -       -   Rehm 2/14/22   23,450     117,250     234,500     -     -     -     -     -     -     -   2/25/20     -       -       -       967       2,418       6,045       -       -       -       78,029   2/14/22   -     -     -     870     2,176     5,441     -     -     -     105,492   2/25/20     -       -       -       -       -       -       -       4,484       37.30       26,007   2/14/22   -     -     -     -     -     -     -     3,350     54.91     35,175     All material terms and conditions of grants are described in the section of this Proxy Statement captioned “Compensation Discussion and Analysis”. All equity grants were made under our 2015 Omnibus Equity Compensation Plan. Grants consisted of:   (1) Cash incentives (2) Cash incentivesPSUs (2)(3) PSUs (3) SARs   52 Table of Contents   The following table sets forth information concerning SARs, RSAs and PSUs held by the executives as of the end of the last fiscal year.   Outstanding Equity Awards at Fiscal Year End Table     Option Awards   Stock Awards     Option Awards   Stock Awards   Name   Number of securities underlying unexercised options (#) Exercisable     Number of securities underlying unexercised options (#) (1) Unexercisable     Option exercise price ($)   Option expiration date   Number of shares or units of stock that have not vested (#)     Market value of shares or units of stock that have not vested ($)     Equity incentive plan awards: number of unearned shares, units or other rights that have not vested (#) (2)     Equity incentive plan awards: market or payout value of unearned shares, units or other rights that have not vested ($)     Number of securities underlying unexercised options (#) Exercisable   Number of securities underlying unexercised options (#) (1) Unexercisable   Option exercise price ($)   Option expiration date   Number of shares or units of stock that have not vested (#) (2)   Market value of shares or units of stock that have not vested ($)   Equity incentive plan awards: number of unearned shares, units or other rights that have not vested (#) (2)   Equity incentive plan awards: market or payout value of unearned shares, units or other rights that have not vested ($)   Hillebrand                                                               16,425     -     19.37   2/18/2024   -     -     -     -       19,600       -       15.24   2/20/2022     -       -       -       -     12,319     -     22.96   3/17/2025   -     -     -     -       28,054       -       15.26   2/19/2023     -       -       -       -     14,428     -     25.76   3/15/2026   -     -     -     -       16,425       -       19.37   2/18/2024     -       -       -       -     7,571     -     40.00   3/21/2027   -     -     -     -       12,319       -       22.96   3/17/2025     -       -       -       -     5,938     1,485     35.90   2/20/2028   -     -     -     -       11,542       2,886       25.76   3/15/2026     -       -       -       -     20,000     5,000     39.32   10/1/2028   -     -     -     -       4,542       3,029       40.00   3/21/2027     -       -       -       -     7,352     4,902     36.65   2/19/2029   -     -     -     -       2,969       4,454       35.90   2/20/2028     -       -       -       -     5,793     8,689     37.30   2/25/2030   -     -     -     -       10,000       15,000       39.32   10/1/2028     -       -       -       -     1,723     6,892     50.71   2/25/2031   -     -     14,176     921,156       2,450       9,804       36.65   2/19/2029     -       -       11,000       445,280       -     10,142     54.91   2/14/2032     -     -     16,475     1,070,546       -       14,482       37.30   2/25/2030     -       -       13,666       553,200       91,549     37,110             -     -     30,651     1,991,702       107,901       49,655                 -       -       24,666       998,480     Poindexter                                                                 7,575       -       15.26   2/19/2023     -       -       -       -     8,098     -     22.96   3/17/2025   -     -     -     -       8,872       -       19.37   2/18/2024     -       -       -       -     9,469     -     25.76   3/15/2026   -     -     -     -       8,098       -       22.96   3/17/2025     -       -       -       -     4,968     -     40.00   3/21/2027   -     -     -     -       7,575       1,894       25.76   3/15/2026     -       -       -       -     3,897     975     35.90   2/20/2028   ‐-     -     -     -       2,980       1,988       40.00   3/21/2027   ‐-       -       -       -     14,000     3,500     39.32   10/1/2028   -     -     -     -       1,948       2,924       35.90   2/20/2028     -       -       -       -     4,193     2,796     36.65   2/19/2029   -     -     -     -       7,000       10,500       39.32   10/1/2028     -       -       -       -     3,277     4,916     37.30   2/25/2030   -     -     -     -       1,397       5,592       36.65   2/19/2029     -       -       6,274       253,972     975     3,898     50.71   2/25/2031   -     -     8,019     521,075       -       8,193       37.30   2/25/2030     -       -       7,731       312,951       -     5,314     54.91   2/14/2032     -     -       8,632       560,907       45,445       31,091                 -       -       14,005       566,923       48,877     21,399             -     -     16,651     1,081,982     Stinnett                                                                 11,502       -       15.26   2/19/2023     -       -       -       -     6,861     -     19.37   2/18/2024   -     -     -     -       6,861       -       19.37   2/18/2024     -       -       -       -     5,481     -     22.96   3/17/2025   -     -     -     -       5,481       -       22.96   3/17/2025     -       -       -       -     6,871     -     25.76   3/15/2026   -     -     -     -       5,496       1,375       25.76   3/15/2026     -       -       -       -     3,606     -     40.00   3/21/2027   -     -     -     -       2,163       1,443       40.00   3/21/2027     -       -       -       -     2,832     709     35.90   2/20/2028   -     -     -     -       1,416       2,125       35.90   2/20/2028     -       -       -       -     2,458     1,640     36.65   2/19/2029   -     -     -     -       819       3,279       36.65   2/19/2029     -       -       3,679       148,926     7,500     5,000     38.18   5/1/2029   -     -     -     -       2,500       10,000       38.18   5/1/2029     -       -       -       -     2,295     3,443     37.30   2/25/2030   -     -     -     -       -       5,738       37.30   2/25/2030     -       -       5,414       219,159     683     2,730     50.71   2/25/2031   -     -     5,617     364,993       36,238       23,960                                 9,093       368,085       -     4,000     54.91   2/14/2032     -     -     6,497     422,175       38,587     17,522                     12,114     787,168     (continued)   44 53 Table of Contents       Option Awards   Stock Awards   Name   Number of securities underlying unexercised options (#) Exercisable     Number of securities underlying unexercised options (#) (1) Unexercisable     Option exercise price ($)   Option expiration date   Number of shares or units of stock that have not vested (#)     Market value of shares or units of stock that have not vested ($)     Equity incentive plan awards: number of unearned shares, units or other rights that have not vested (#) (2)     Equity incentive plan awards: market or payout value of unearned shares, units or other rights that have not vested ($)   Thompson                                                                 1,977       -       22.96   3/17/2025     -       -       -       -         -       2,273       25.76   3/15/2026     -       -       -       -         3,577       2,385       40.00   3/21/2027     -       -       -       -         2,295       3,444       35.90   2/20/2028     -       -       -       -         1,156       4,626       36.65   2/19/2029     -       -       5,190       210,091         -       6,589       37.30   2/25/2030     -       -       6,218       251,705         9,005       19,317                 -       -       11,408       461,796   Dishman                                                                 5,005       -       15.24   2/20/2022     -       -       -       -         8,298       -       19.37   2/18/2024     -       -       -       -         6,343       -       22.96   3/17/2025     -       -       -       -         5,736       1,434       25.76   3/15/2026     -       -       -       -         2,299       1,534       40.00   3/21/2027     -       -       -       -         1,486       2,230       35.90   2/20/2028     -       -       -       -         778       3,116       36.65   2/19/2029     -       -       3,496       141,518         -       4,484       37.30   2/25/2030     -       -       4,232       171,311         29,945       12,798                 -       -       7,728       312,829   Outstanding Equity Awards at Fiscal Year End Table (continued)     Option Awards   Stock Awards   Name   Number of securities underlying unexercised options (#) Exercisable     Number of securities underlying unexercised options (#) (1) Unexercisable     Option exercise price ($)   Option expiration date   Number of shares or units of stock that have not vested (#)(2)     Market value of shares or units of stock that have not vested ($)     Equity incentive plan awards: number of unearned shares, units or other rights that have not vested (#) (2)     Equity incentive plan awards: market or payout value of unearned shares, units or other rights that have not vested ($)   Thompson                                                                 -       1,148       35.90   2/20/2028     -       -       -       -         -       2,313       36.65   2/19/2029     -       -       -       -         -       3,953       37.30   2/25/2030     -       -       -       -         784       3,136       50.71   2/25/2031     -       -       6,450       419,121         -       3,850       54.91   2/14/2032     -       -       6,253       406,320         784       14,400                 -       -       12,703       825,441                                                               Rehm                                                                 -       -       -   2/2/2023     147       36.00       -       -         8,000       2,000       39.32   10/1/2028     -       -       -       -         -       1,602       36.65   2/19/2029     -       -       -       -         2,006       3,008       37.30   2/25/2030   ‐-       -       -       -         597       2,386       50.71   2/25/2031     -       -       4,908       318,922         -       3,350       54.91   2/14/2032     -       -       5,441       353,556         10,603       12,346                 147       -       10,349       672,478     54 Table of Contents   (1) SARs vest 20% each year beginning one year after the grant date and each anniversary thereafter. The vesting schedule for SARs for each named executive officer is as follows (in number of shares).   Vesting Date   Hillebrand     Poindexter     Stinnett     Thompson     Dishman   2/19/2021     2,451       1,398       820       1,156       779   2/20/2021     1,484       975       708       1,148       743   2/25/2021     2,896       1,638       1,147       1,317       896   3/15/2021     2,886       1,894       1,375       2,273       1,434   3/21/2021     1,514       994       721       1,192       767   5/1/2021     -       -       2,500       -       -   10/1/2021     5,000       3,500       -       -       -   3/21/2022     1,515       994       722       1,193       767   2/19/2022     2,451       1,398       819       1,157       779   2/20/2022     1,485       974       708       1,148       743   2/25/2022     2,896       1,639       1,148       1,318       897   5/1/2022     -       -       2,500       -       -   10/1/2022     5,000       3,500       -       -       -   2/19/2023     2,451       1,398       820       1,156       779   2/20/2023     1,485       975       709       1,148       744   2/25/2023     2,897       1,638       1,147       1,318       897   5/1/2023     -       -       2,500       -       -   10/1/2023     5,000       3,500       -       -       -   2/19/2024     2,451       1,398       820       1,157       779   2/25/2024     2,896       1,639       1,148       1,318       897   5/1/2024     -       -       2,500       -       -   2/25/2025     2,897       1,639       1,148       1,318       897         49,655       31,091       23,960       19,317       12,798   Vesting Date   Hillebrand     Poindexter     Stinnett     Thompson     Rehm   2/14/2023     2,028       1,063       800       770       670   2/19/2023     2,451       1,398       820       1,156       801   2/20/2023     1,485       975       709       1,148       -   2/25/2023     4,619       2,613       1,830       2,102       1,598   5/1/2023     -       -       2,500       -       -   10/1/2023     5,000       3,500       -       -       2,000   2/14/2024     2,029       1,063       800       770       670   2/19/2024     2,451       1,398       820       1,157       801   2/25/2024     4,620       2,613       1,830       2,102       1,600   5/1/2024     -       -       2,500       -       -   2/14/2025     2,028       1,062       800       770       670   2/25/2025     4,620       2,613       1,830       2,101       1,599   2/14/2026     2,028       1,063       800       770       670   2/25/2026     1,723       975       683       784       597   2/14/2027     2,028       1,063       800       770       670         37,110       21,399       17,522       14,400       12,346     (2) RSAs (Mr. Rehm only) vest 20% each year beginning one year after the grant date. All RSAs have vested with the exception of 147 shares that will vest on February 2, 2023. PSUs are earned over three year performance periods ending December 31, 20222024 and 20212023 based on EPS and ROAA goals. The vesting schedule for PSUs for each named executive officer is as follows (in number of shares) and represents management’s estimate of most likely performance outcomes as of December 31, 2020.2022. For PSUs vesting on December 31, 2021,2023, most likely represents achievement of EPS goals at thresholdmaximum and ROAA goals at maximum.target. For PSUs vesting on December 31, 2022,2024, most likely represents achievement of EPS goals at targetmaximum and ROAA goals at maximum.   Vesting Date   Hillebrand     Poindexter     Stinnett     Thompson     Dishman   12/31/2021     11,000       6,274       3,679       5,190       3,496   12/31/2022     13,666       7,731       5,414       6,218       4,232         24,666       14,005       9,093       11,408       7,728   Vesting Date   Hillebrand     Poindexter     Stinnett     Thompson     Rehm   12/31/2023     14,176       8,019       5,617       6,450       4,908   12/31/2024     16,475       8,632       6,497       6,253       5,441         30,651       16,651       12,114       12,703       10,349     The following table sets forth SARs exercised by or stock awards vested for the executives during the last fiscal year. Stock awards include PSUs that vested on December 31, 2020.2022. Final determination as to the amounts of these awards will be calculated in March 2021.2023. Therefore, the awards in this table are the most probable amount as of December 31, 2020.2022.   SAR Exercises and Stock Vested Table SAR Exercises and Stock (RSAs and PSUs) Vesting                                         SAR Awards     Stock Awards       Number of Shares     Value Realized     Number of Shares     Value Realized       Acquired on Exercise     on Exercise     Acquired on Vesting     on Vesting   Name   (#)     ($)     (#)     ($)    Hillebrand     28,054       1,106,730       19,522       1,268,540   Poindexter     8,872       363,575       11,044       717,639   Stinnett     11,502       521,271       7,735       502,620   Thompson     20,908       903,841       8,882       577,152   Rehm     2,401       55,031       7,008       454,289         SAR Awards     Stock Awards       Number of Shares Acquired on Exercise     Value Realized on Exercise     Number of Shares Acquired on Vesting     Value Realized on Vesting   Name   (#)     ($)     (#)     ($)   Hillebrand     10,968       270,910       8,230       333,150   Poindexter     10,698       290,772       5,401       218,632   Stinnett     11,992       311,847       3,926       158,924   Thompson     9,089       162,693       6,363       257,574   Dishman     5,000       142,100       4,120       166,778   55 Table of Contents   Noncontributory Nonqualified Pension Plan   The purpose of the 2005 Restated Senior Officer Security Plan (the "SOSP"“SOSP”) was to provide benefits, beginning at age 65, of $82,000 per year for 15 years for Ms. Thompson, as a means to supplement her retirement income, after also considering expected Social Security benefits and the broad-based retirement plan applicable to Bank employees generally. The total potential benefit vests at 4% per year of service so that it is fully vested if the executive works for the Bank for a total of 25 years. At December 31, 2020,2022, Ms. Thompson was fully vested under the plan. There are no intentions to adjust the benefit payments or add additional participants to the SOSP.   If the executive terminates employment before age 55, SOSP benefit payments can begin as early as age 55 (or such later age as the executive has elected), but the annual payment amount will be lowered to an actuarially equivalent value.   Death benefits are provided in lieu of these retirement payments if the participant dies while in the employ of the Bank before age 65 or after leaving the Bank due to disability. The death benefits are provided by the Bank endorsing over to the executive, via a split dollar agreement, a right to payment of a portion of the death benefits due under several insurance policies purchased by the Bank on the executives. At December 31, 2020,2022, the SOSP provided for a $1,096,809$1,182,272 death benefit for Ms. Thompson.   If an executive dies after employment termination (other than on account of disability) but before retirement payments begin, the executive'sexecutive’s selected beneficiary is paid a death benefit equal to the retirement payments to which the executive would have been entitled, at the same time and in the same amounts those payments would have been paid to the executive. The following table illustrates these pension benefits.   Pension Benefit Table                         Name Plan Name   Number of Years of Credited Service (#)     Present Value of Accumulated Benefit ($)     Payments During Last Fiscal Year ($)   Thompson Senior Officers' Security Plan     28       916,948       -   47 Pension Benefit Table                               Number of Years of Credited Service     Present Value of Accumulated Benefit     Payments During Last Fiscal Year   Name Plan Name   (#)     ($)     ($)   Thompson Senior Officers’ Security Plan     30       748,179       -     Contributory Nonqualified Deferred Compensation Plan   The Executive Nonqualified Deferred Compensation Plan (the "NQ Plan"“NQ Plan”) allows the executive to defer receipt of and income taxes on up to 10% of base salary and 50% of annual incentive compensation. In addition, based on those deferrals, executives are credited with any match or basic ESOP contribution that they do not receive under the Bank’s KSOP applicable to employees generally, because of plan and Internal Revenue Code limits on pay that can be taken into account in calculating the qualified plan benefits. This Bank credit to the Executive’s Plan accounts is vested in accordance with the same vesting schedule as applies in the KSOP, but all executives in the Summary Compensation Table have sufficient tenure with the Bank to be 100% vested in all contributions to the NQ Plan.   As amounts are credited to the NQ Plan, the value of the plan will increase or decrease based on the actual investment performance of certain investment funds selected by the Company, from which the executives can designate (and re-designate as often as they wish) how their account balances should be allocated.   The executives have elected between a lump sum distribution or annual installments over no more than 10 years from the NQ Plan, but that election applies only if they leave the Bank's employ due to death or after age 55. If the executive's termination of employment occurs other than on account of death and prior to age 55, benefits are automatically paid in a lump sum. The NQ Plan was amended in 2014 to give executives an opportunity to designate a different payment option on future credits to that plan than applies to previous contributions.   The executive also may elect (prior to the year in which credits are to be made) to have some or all of their own deferrals paid to them in a lump sum or installments over up to six years, while still employed by the Bank, provided they timely designate the amount and time for that payment, and subject to Internal Revenue Code restrictions on later accelerating the payment or delaying it. Executives may also apply to receive a distribution in the event of an unforeseeable emergency.   56 Table of Contents Nonqualified Deferred Compensation Table             Registrant     Aggregate     Aggregate     Aggregate       Executive Contributions     Contributions     Earnings     Withdrawals/     Balance   Name   in Last Fiscal Year ($)     in Last Fiscal Year ($) (2)     in Last Fiscal Year ($)     Distributions ($)     at Last Fiscal Year End ($)                                             Hillebrand (1)     -       -       -       -       31,466         91,500       89,200       -       -       1,331,501   Poindexter     37,608       50,000       -       -       854,458   Stinnett     87,475       39,600       -       -       728,551   Thompson     38,388       37,200       -       -       688,765   Rehm     22,028       29,200       -       -       66,673     Nonqualified Deferred Compensation Table     Executive Contributions     Registrant Contributions     Aggregate Earnings     Aggregate Withdrawals/     Aggregate Balance       in Last Fiscal Year     in Last Fiscal Year     in Last Fiscal Year     Distributions     at Last Fiscal Year   Name   ($)     ($) (2)     ($)     ($)     End ($)                                             Hillebrand (1)     82,000       66,800       -       -       1,103,196         -       -       -       -       18,872   Poindexter     34,320       40,560       -       -       857,221   Stinnett     52,450       27,920       -       -       567,274   Thompson     31,395       35,440       -       -       814,932   Dishman     16,076       23,440       -       -       371,919   (1) Includes first an employee account, then a director fee deferral account accumulated from periods when theyMr. Hillebrand received directors' fees. (2) This is a Bank contribution to supplement the contributions that the executive does not receive under the Bank’s tax-qualified KSOP because of plan limits or Internal Revenue Code limits.   Potential Change in Control Payments   The Company has no employment agreement and/or severance agreement for any named executive officer for any reason other than change in control. Various benefit plans of the Bank have special terms that apply if a change in control occurs.     ● ●Awards made under the terms of the 2015 Omnibus Equity Compensation Plan vest if there is both a change in control and the executive's employment ends within 24 months thereafter; and Awards made under the terms of the 2015 Omnibus Equity Compensation Plan vest if there is both a change in control and the executive's employment ends within 24 months thereafter; and 48   ● If a change in control occurs, PSUs are paid in shares of stock as if target performance was achieved.   Each of the executives (except Mr. Rehm) had Change in Control Severance Agreements as of the end of 2020.2022. The following summarizes those agreements.   In the event Mr. Hillebrand, Mr. Poindexter or Ms. Thompson is terminated without "cause" or resign for "good reason" (as those terms are defined in the Change in Control Severance Agreements) during negotiations or within two years following a change in control of the Bank or Stock Yards Bancorp, the Bank will pay the executive a severance payment equal to three times the sum of their highest monthly base salary during the six months prior to termination or resignation, plus the highest annual cash bonus paid to them for the current and preceding two fiscal years before their termination or resignation. For Mr. Dishman and Mr. Stinnett, the same terms apply but the multiple of base salary and historical bonus will be two times.   Each executive with a Change in Control Severance Agreement also has a right to participate in the Bank's health plans at their cost for three (two in the case of Mr. Dishman and Mr. Stinnett) years following a covered severance, in addition to any existing rights under COBRA. Mr. Hillebrand, Mr. Poindexter, and Ms. Thompson are subject to an 18 month prohibition on competing with the Bank in any way within a 50 mile radius of any Bank office after a covered severance. All of the executives are required to maintain the confidentiality of all information regarding the business of the Bank and Bancorp and prohibited from soliciting customers or employees of the Bank for a period of 18 (12 for Mr. Dishman and Mr. Stinnett) months following the receipt of any severance payment.   Mr. Dishman's and Mr. Stinnett’s agreements capagreement caps the total payment plus other payments that are triggered by or enhanced due to a change in control if the full payment would cause the Bank to forfeit a tax deduction for some of the severance payment. In that event, the severance payment is reduced to an amount no less than $1.00 below the amount which the Bank can pay without a limitation on its deduction under Section 280G of the Internal Revenue Code and which Mr. Dishman and Mr. Stinnett can receive without subjecting the executive to an excise tax. Section 280G, in general, denies a tax deduction for part of the compensation received in connection with a change in control, and imposes an excise tax on the recipient of such a payment, if the total paid exceeds three times an executive's five-year average W-2 reported income. For Mr. Hillebrand, Mr. Poindexter and Ms. Thompson, rather than capping the amount paid based on Section 280G of the Internal Revenue Code, these agreements allow each executive to be paid the described severance amount, or an amount that is just below the Section 280G threshold, if the net amount they would receive after reduction for any excise tax they might owe, would be higher than the full amount after excise taxes are paid. None of the agreements provide for the Company to gross up amounts for taxes owed.   57 Table of Contents Payment under each of the Change in Control Severance Agreements is made only if the executive fully releases all claims against Stock Yards Bancorp and the Bank.   The following table estimates the amount that would have been payable under the Change in Control Severance Agreements if their terms had been triggered as of December 31, 20202022 and other amounts that vest or accelerate if there had been a termination on that date related to a change in control.   Officer   Change in Control Severance Agreement (1)     Value Realized if Unvested Options and Stock Awards were Vested and Exercised (2)     Total Potential Value     Change in Control Severance Agreement   Value Realized if Unvested Options and Stock Awards were Vested and Exercised (1)   Total Potential Value   Hillebrand   $ 2,763,281     $ 788,535     $ 3,551,816     $ 4,260,000     $ 1,548,029     $ 5,808,029   Poindexter     1,854,625       456,125       2,310,750     $ 2,511,000     $ 875,378     $ 3,386,378   Stinnett     995,200       312,422       1,307,622     $ 1,360,000     $ 690,485     $ 2,050,485   Thompson     1,596,066       377,767       1,973,833     $ 1,919,400     $ 622,027     $ 2,541,427   Dishman     921,200       253,721       1,174,921   Rehm   $ 0     $ 526,292     $ 526,292   (1) This is the total value as of December 31, 2022 of (i) PSUs that would become vested at the target award level (40% of maximum awards) as a result of change in control, (ii) the difference between the base price and the current fair market value as of December 31, 2022 on unvested SARs which would have vested had a change in control occurred as of that date and the executive terminated employment, and (iii) for Mr. Rehm only, the total value of his remaining unvested restricted stock if it was vested and issued upon a change in control and Mr. Rehm’s employment is terminated. The values above do not take into account the amounts executives who leave employment after age 60 with 10 or more years of service (retirement) might receive at the end of performance cycles for awards made before retirement, based on actual performance, then prorated for the portion of the performance period worked before retirement. If, for example, performance is at or above maximum, and an executive worked 2/3rds of the performance period, the total value paid would then be more than the target values listed above which are payable if a change in control occurs. Each executive also has unexercised SARs which were vested before December 31, 2022, which would remain exercisable for a period beyond termination, the potential value of which is not included in the above chart.   (1)These are the amounts that would be paid under these agreements assuming, in the case of Messrs. Hillebrand and Poindexter, their payments are reduced for the fact that their total severance plus the additional values from equity award vesting for purposes of Code section 280G exceed the 280G cap on what can be paid without loss of a deduction or excise taxes applying. Their severance included above is $1 below such cap, because the excise tax cost to them if the higher amount is paid is projected to be higher than the reduction in severance. However, these estimates assume no reduction in “parachute payment” values as determined under Code Section 280G is appropriate to account for the reasonable fair value of their restrictive covenants. If their restrictive covenants are determined to have a reasonable value that is not part of the “parachute payment” included for Code Section 280G purposes, they could be paid severance of up to $3,300,000 and $2,112,000, respectively. 49 (2)This is the total value as of December 31, 2020 of PSUs that would become vested at the target award level (40% of maximum awards) as a result of change in control, and the difference between the base price and the current fair market value as of December 31, 2020 on unvested SARs which would have vested had a change in control occurred as of that date and the executive terminated employment. The values above do not take into account the amounts executives who leave employment after age 60 with 10 or more years of service (retirement) might receive at the end of performance cycles for awards made before retirement, based on actual performance, then prorated for the portion of the performance period worked before retirement. If, for example, performance is at or above maximum, and an executive worked 2/3rds of the performance period, the total value paid would then be more than the target values listed above which are payable if a change in control occurs. Each executive also has unexercised SARs which were vested before December 31, 2020, which would remain exercisable for a period beyond termination, the potential value of which is not included in the above chart. CEO Pay Ratio   As required by Section 953(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act and related SEC rules, we are providing the following information about the relationship of the annual total compensation of our employees and the annual total compensation of James A. Hillebrand, the Chairman and Chief Executive Officer (the “CEO”) of our company:   For 2020,2022, our last completed fiscal year:     ● The median of the annual total compensation of all employees of our company (other than Mr. Hillebrand) was $56,252;$57,221; and   ● The annual total compensation of our CEO was $1,268,318.$1,962,364.   Based on this information, for 2020,2022, the ratio of the annual total compensation of Mr. Hillebrand, our Chief Executive Officer, to the median of the annual total compensation of all employees was 2334 to 1.    We calculated this pay ratio in a manner consistent with SEC rules based on our payroll and employment records and the methodology described below. The SEC rules for identifying the median compensated employee and calculating the pay ratio based on that employee’s annual total compensation allow companies to adopt a variety of methodologies, to apply certain exclusions, and to make reasonable estimates and assumptions that reflect their compensation practices. As such, the pay ratio reported by other companies may not be comparable to the pay ratio reported above, as other companies may have different employment and compensation practices and may utilize different methodologies, exclusions, estimates and assumptions in calculating their own pay ratios.   58 Table of Contents For 2022, we identified a new median employee using our employee population as of December 31, 2022, based on annual compensation information from our payroll records for 2022. Specifically, we collected annual base salaries and wages, bonuses, commissions, incentives and overtime paid during this 12-month period. We determined the annual total compensation of our median-compensated employee by adding together all of the elements of that employee’s compensation for 20202022 in accordance with the requirements of the Summary Compensation Table appearing on page 4151 of this Proxy Statement. That calculation included, in addition to wages, overtime and incentive payments, company contributions to the Bank’s retirement plan (including ESOP) and the taxable portion of long-term disability and group term life insurance premiums for the median employee.   This information is being provided to comply with the disclosure requirements of the Dodd-Frank Act. Neither the Compensation Committee nor our management used the pay ratio measure in making compensation decisions for our CEO or any of our other employees.   50 Director CompensationPay Versus Performance Disclosure   TheIn accordance with rules adopted by the SEC pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, we provide the following table sets forth informationdisclosure regarding theexecutive compensation offor our non-employee directors for 2020. Mr. Hillebrandprincipal executive officer (“PEO”) and Ms. Thompson serve as directorsnon-PEO named executive officers (“NEOs”) and Company performance for the Company but receive no compensationfiscal years listed below. The Compensation Committee did not consider the pay versus performance disclosure below in making its pay decisions for their director service.any of the years shown.   Director Compensation Table     Fees Earned or Paid in Cash     Stock Awards     Option Awards     Non-Equity Incentive Plan Compensation     Change in Pension Value and Nonqualified Deferred Compensation Earnings     All Other Compensation     Total   Name   ($)     ($) (1)     ($)     ($)     ($) (2)     ($) (3)     ($)                                                             Mr. Bickel     40,475       30,000       -       -       -       788       71,263   Mr. Brown     38,200       30,000       -       -       -       788       68,988   Mr. Heintzman     242,100 (4)      30,000       -       -       -       788       272,888   Ms. Heitzman     47,100       30,000       -       -       -       788       77,888   Mr. Herde     50,400       30,000       -       -       -       788       81,188   Mr. Lechleiter     50,900       30,000       -       -       -       788       81,688   Mr. Priebe     52,300       30,000       -       -       -       788       83,088   Mr. Schutte     41,775       30,000       -       -       -       788       72,563   Mr. Tasman     51,075       30,000       -       -       -       788       81,863                     Value of Initial Fixed $100 Investment based on:4           Year Summary Compensation Table Total for James A. Hillebrand¹ ($)   Compensation Actually Paid to James A. Hillebrand¹˒²˒³ ($)   Average Summary Compensation Table Total for Non-PEO NEOs1 ($)   Average Compensation Actually Paid to Non-PEO NEOs1,2,3 ($)   TSR ($)   Peer Group TSR ($)   Net Income ($ Millions)   Adjusted Diluted Earnings Per Share5 ($)   (a) (b)   (c)   (d)   (e)   (f)   (g)   (h)   (i)   2022 1,962,364   2,312,092   898,772   1,033,291   169.80   88.96   93.3   3.86   2021 1,548,814   3,364,352   786,865   1,575,947   163.84   116.64   74.6   3.79   2020 1,268,318   1,122,055   701,121   634,328   101.76   86.37   58.9   3.17     (1) In January 2020James A. Hillebrand was our PEO for each non-employee director then serving onyear presented. The individuals comprising the Board of Directors received a restricted stock award under the 2015 Omnibus Equity Compensation Plan. The number of shares granted was equal to $30,000 divided by the fair market value per share on the grant date. Based on the closing price on the grant date,non-PEO NEOs for each director received 730 shares. The restricted stock awards, together with all dividend equivalents thereon, fully vest one year from the date of grant.presented are listed below. 2020 2021 2022 Philip S. Poindexter Philip S. Poindexter Philip S. Poindexter T. Clay Stinnett T. Clay Stinnett T. Clay Stinnett Kathy C. Thompson Kathy C. Thompson Kathy C. Thompson William M. Dishman III William M. Dishman III Michael V. Rehm

(2)

Each director has the optionThe amounts shown for Compensation Actually Paid have been calculated in accordance with Item 402(v) of deferring some or all of his or her fees. Investment options include Company stockRegulation S-K and various mutual funds. Earnings on the non-employee directors' nonqualified deferred compensation balances are not included above. The investment alternatives of the nonqualified plan do not and have not offered above market rates of interestreflect compensation actually earned, realized or preferential returns.received by the Company’s NEOs. These amounts reflect the Summary Compensation Table total with certain adjustments as described in footnote 3 below.

(3)

Represents dividends on 2020 restricted stock awards. DividendsCompensation Actually Paid reflects the exclusions and inclusions of certain amounts for the PEO and the non-PEO NEOs as set forth below. Equity values are held until awards vest. As such, dividendscalculated in accordance with FASB ASC Topic 718. Amounts in the Exclusion of Stock Awards and Option Awards column are the totals from the Stock Awards and Option Awards columns set forth in the Summary Compensation Table. Amounts in the Exclusion of Change in Pension Value column reflect the amounts attributable to the Change in Pension Value reported in the Summary Compensation Table. Amounts in the Inclusion of Pension Service Cost are based on the shares earned in 2020 were paid in January 2021.service cost for services rendered during the listed year.

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Year		Summary Compensation Table Total for James A. Hillebrand ($)			Exclusion of Change in Pension Value for James A. Hillebrand ($)			Exclusion of Stock Awards and Option Awards for James A. Hillebrand ($)			Inclusion of Pension Service Cost for James A. Hillebrand ($)			Inclusion of Equity Values for James A. Hillebrand ($)			Compensation Actually Paid to James A. Hillebrand ($)
2022		1,962,364			—			(425,974)			—			775,702			2,312,092
2021		1,548,814			—			(335,971)			—			2,151,509			3,364,352
2020		1,268,318			—			(335,992)			—			189,729			1,122,055

Year		Average Summary Compensation Table Total for Non-PEO NEOs ($)			Average Exclusion of Change in Pension Value for Non-PEO NEOs ($)			Average Exclusion of Stock Awards and Option Awards for Non-PEO NEOs ($)			Average Inclusion of Pension Service Cost for Non-PEO NEOs ($)			Average Inclusion of Equity Values for Non-PEO NEOs ($)			Average Compensation Actually Paid to Non-PEO NEOs ($)
2022		898,772			—			(173,373)			—			307,892			1,033,291
2021		786,865			—			(144,998)			—			934,080			1,575,947
2020		701,121			25,092			(145,022)			—			53,137			634,328

Ms. Thompson was the only NEO who had a pension benefit in 2020; however, the company did not incur any service cost that year related to her pension benefit.

The amounts in the Inclusion of Equity Values in the tables above are derived from the amounts set forth in the following tables:

Year		Year-End Fair Value of Equity Awards Granted During Year That Remained Unvested as of Last Day of Year for James A. Hillebrand ($)				Change in Fair Value from Last Day of Prior Year to Last Day of Year of Unvested Equity Awards for James A. Hillebrand ($)				Vesting-Date Fair Value of Equity Awards Granted During Year that Vested During Year for James A. Hillebrand ($)				Change in Fair Value from Last Day of Prior Year to Vesting Date of Unvested Equity Awards that Vested During Year for James A. Hillebrand ($)				Fair Value at Last Day of Prior Year of Equity Awards Forfeited During Year for James A. Hillebrand ($)				Value of Dividends or Other Earnings Paid on Equity Awards Not Otherwise Included for James A. Hillebrand ($)				Total - Inclusion of Equity Values for James A. Hillebrand ($)
2022			771,361				173,137				—				(168,796	)			—				—				775,702
2021			616,247				1,321,359				—				213,903				—				—				2,151,509
2020			448,012				(134,559	)			—				(123,724	)			—				—				189,729

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Year		Average Year-End Fair Value of Equity Awards Granted During Year That Remained Unvested as of Last Day of Year for Non-PEO NEOs ($)				Average Change in Fair Value from Last Day of Prior Year to Last Day of Year of Unvested Equity Awards for Non-PEO NEOs ($)				Average Vesting-Date Fair Value of Equity Awards Granted During Year that Vested During Year for Non-PEO NEOs ($)				Average Change in Fair Value from Last Day of Prior Year to Vesting Date of Unvested Equity Awards that Vested During Year for Non-PEO NEOs ($)				Average Fair Value at Last Day of Prior Year of Equity Awards Forfeited During Year for Non-PEO NEOs ($)				Average Value of Dividends or Other Earnings Paid on Equity Awards Not Otherwise Included for Non-PEO NEOs ($)				Total - Average Inclusion of Equity Values for Non-PEO NEOs ($)
2022			313,948				77,332				—				(83,388	)			—				—				307,892
2021			265,959				569,898				—				98,223				—				—				934,080
2020			193,372				(68,969	)			—				(71,266	)			—				—				53,137

(4)

Includes,The Peer Group TSR set forth in addition tothis table utilizes the normal cash fees paid to all non-employee directors, an annual Board feeKBW NASDAQ Bank Index, which we also utilize in the stock performance graph required by Item 201(e) of $200,000 payable to Mr. HeintzmanRegulation S-K included in our Annual Report on Form 10-K for his role as Chairmanthe year ended December 31, 2022. The comparison assumes $100 was invested for the period starting December 31, 2019, through the end of the Board.listed year in the Company and in the KBW NASDAQ Bank Index, respectively. Historical stock performance is not necessarily indicative of future stock performance.

(5)

We determined adjusted diluted earnings per share to be the most important financial performance measure used to link Company performance to Compensation Actually Paid to our PEO and non-PEO NEOs in 2022. This figure is adjusted for one-time acquisition costs. See Appendix A for a reconciliation of adjusted diluted earnings per share to our GAAP financial measures. This performance measure may not have been the most important financial performance measure for years 2021 and 2020 and we may determine a different financial performance measure to be the most important financial performance measure in future years.

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Relationship Between Compensation Actually Paid and Company Total Shareholder Return (“TSR”)

 

The following chart sets forth the relationship between Compensation Committee, with advice and assistance from McLagan, its independent consultant, reviews Board compensation at least every two years. Their reviewActually Paid to our PEO, the average of director compensation includes surveys of benchmark institutionsCompensation Actually Paid to our non-PEO NEOs, and the related form and substance of how directors are compensated, including comparative analyses ofCompany’s cumulative TSR over the Company’s director compensation program relative to its peer group. For 2020, non-employee directors received an annual retainer of $18,000. Stock Yards Bancorp’s directors are also directors of the Bank, and received $1,625 for each Bank board meeting attended and $1,625 for each meeting of Stock Yards Bancorp’s Board of Directors he or she attended, if the meeting was not held immediately before or after a meeting of the Board of Directors of the Bank.three most recently completed fiscal years.

 

For 2020, non-employee directors

Relationship Between Compensation Actually Paid and Net Income

The following chart sets forth the relationship between Compensation Actually Paid to our PEO, the average of Stock Yards BancorpCompensation Actually Paid to our non-PEO NEOs, and our net income during the Bank who are members of the various standing committees of the Board of Directors received $1,200 per meeting of Bancorp’s Audit Committee, $800 per meeting of Bancorp’s Compensation Committee, $800 per meeting of Bancorp’s Nominating and Corporate Governance Committee, $900 per meeting of Bancorp’s Risk Committee and $800 per meeting of the Bank’s Trust Committee.three most recently completed fiscal years.

 

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Relationship Between Compensation Actually Paid and Adjusted Diluted Earnings Per Share

The following chart sets forth the relationship between compensation Actually Paid to our PEO, the average of Compensation Actually Paid to our non-PEO NEOs, and our Adjusted Diluted Earnings Per Share during the three most recently completed fiscal years.

*

Adjusted for one-time acquisition costs. This result represents a non-GAAP financial measure. See Appendix A for a reconciliation of GAAP and non-GAAP financial measures.

Relationship Between Company TSR and Peer Group TSR

The following chart compares our cumulative TSR over the three most recently completed fiscal years to that of the KBW NASDAQ Bank Index over the same period.

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Tabular List of Most Important Financial Performance Measures

The following table presents the financial performance measures that the Company considers to have been the most important in linking Compensation Actually Paid to our PEO and each of the non-PEO NEOs for 2022 to Company performance. The measures in this table are not ranked. We refer you to the section captioned “Compensation Discussion and Analysis” beginning on page 31 of this Proxy Statement for a discussion of each of these measures and how they are used in our executive compensation program.

James A. Hillebrand	Philip S. Poindexter	T. Clay Stinnett	Kathy C. Thompson	Michael V. Rehm
Adjusted Diluted Earnings Per Share	Adjusted Diluted Earnings Per Share	Adjusted Diluted Earnings Per Share	Adjusted Diluted Earnings Per Share	Adjusted Diluted Earnings Per Share
Return on Average Assets	Return on Average Assets	Return on Average Assets	Return on Average Assets	Return on Average Assets
			Net New Business* Income Before Overhead Allocation and Taxes*	Loan Growth

*

Two of Ms. Thompson’s financial measures, net new business and income before overhead allocation and taxes, relate strictly to her line of business, wealth management and trust.

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In addition, the Chairman of the Audit Committee received an annual retainer of $11,000, the Chairman of the Compensation Committee received an annual retainer of $7,500, the Chairman of the Nominating and Corporate Governance Committee received an annual retainer of $5,000, the Chairman of the Risk Committee received an annual retainer of $9,000, the Chairman of the Trust Committee received an annual retainer of $5,000 and the Lead Independent Director received an annual retainer of $7,500. Annual retainers are prorated if a director serves in a position for a portion of the year.

Directors may defer all or a portion of their fees pursuant to the Director Nonqualified Deferred Compensation Plan (the "Director NQ Plan"), and the amounts so deferred then increase or decrease in value based on how the director elects that the account be allocated as among various investment options provided by the Bank. The investment options are currently the same options available under the Executive NQ Plan, except that directors may also direct that their fees be invested in Company stock, which is then actually purchased and held in trust at the Bank. At December 31, 2020, approximately 95 percent of the aggregate amounts owed directors under the Director NQ Plan were invested in the Company’s stock.

REPORT OF THE AUDIT COMMITTEE

 

The Audit Committee’s role includes assisting the Board of Directors in monitoring the integrity of the Company’s financial statements and related reporting process, compliance by the Company with legal and regulatory requirements, the independent auditor’s qualifications, independence and performance, performance of the Company’s internal audit function and the business practices and ethical standards of the Company. The Audit Committee operates under a written charter approved by the Board of Directors. Messrs. Herde, LechleiterBickel, Heintzman and SchutteLechleiter serve on the Committee and Messrs. Heintzman, Herde and Lechleiter serve as audit committee financial experts.

 

The Audit Committee reviews Stock Yards Bancorp’s financial reporting process on behalf of the Board of Directors. Management is responsible for the Company’s internal controls and financial reporting process. The Company’s independent auditor is responsible for performing an independent audit of the Company’s consolidated financial statements and its internal controls over financial reporting in accordance with standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”) and to express its opinions on the Company’s financial statements in accordance with accounting principles generally accepted in the United States of America (US GAAP) and the Company’s internal control over financial reporting. The Audit Committee’s responsibility is to monitor and oversee these processes. In addition, the Audit Committee is directly responsible for the appointment, compensation, retention and oversight of the independent auditor, including review of their qualifications, independence and performance.

 

The Committee discussed with management, the internal auditors and the independent auditors the quality and adequacy of Stock Yards Bancorp’s internal controls and the internal audit function’s organization, responsibilities, budget and staffing. The Committee reviewed the audit plans of both the independent and internal auditors, including audit scope and identification and evaluation of financial and related audit risks. The Committee also discussed the results of the internal audit examinations.

 

Management represented to the Audit Committee that Stock Yards Bancorp’s consolidated financial statements were prepared in accordance with US GAAP and the Audit Committee reviewed and discussed the quarterly and year end consolidated financial statements contained in filings with the Securities and Exchange Commission (“SEC”) with management and the independent auditors. The Audit Committee discussed with the independent auditors matters required to be discussed by the Statementapplicable requirements of Auditing Standards No. 1301, Communication with Audit Committees, as adopted by the Public Company Accounting Oversight Board.PCAOB and the SEC.

 

In addition, the Audit Committee discussed with the independent auditors the auditors’ independence from Stock Yards Bancorp and its management, including the matters in the written disclosures required by the applicable requirements of the Public Company Accounting Oversight Board.PCAOB. The Audit Committee also considered whether the independent auditors’ provision of non-audit services to Stock Yards Bancorp is compatible with the auditors’ independence.

 

In reliance on the reviews and discussions referred to above, the Audit Committee recommended to the Board of Directors that the audited consolidated financial statements be included in Stock Yards Bancorp’s Annual Report on Form 10-K for the year ended December 31, 2020,2022, for filing with the SEC.

 

The Audit Committee of the Board of Directors of Stock Yards Bancorp, Inc.

 

	Carl G. Herde, Chairman
	Paul J. Bickel III
	David P. Heintzman
	Richard A. Lechleiter John L. Schutte

 

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INDEPENDENT AUDITOR FEES

 

The following table presents fees for professional services rendered by the Company’s independent registered public accounting firm, BKD,FORVIS, LLP, for the 20202022 and 20192021 financial statement audits and audit-related services provided during 20202022 and 2019.2021.

 

		2020				2019
Audit fees, excluding audit-related		$	417,000			$	388,000
Audit-related fees			-				20,800	(1)
All other fees			-				-
Total fees		$	417,000			$	408,800

(1)	Represents agreed upon procedures performed by BKD in conjunction with the Company’s acquisition of King Southern Bank in 2019.

		2022				2021
Audit fees, excluding audit-related		$	565,000			$	470,000
Audit-related fees			-				-
All other fees			-				-
Total fees		$	565,000			$	470,000

 

Audit fees include fees for the consolidated audit and review of Form 10-K as well as fees for reviews of quarterly financial information filed with the SEC on Form 10-Q, FDICIA and U.S Housing and Urban Development assisted programs reporting.

 

The Audit Committee is responsible for pre-approving all auditing services and permitted non-audit services to be performed by its independent auditors. For both 20202022 and 2019,2021, the Audit Committee pre-approved the performance of unspecified audit-related services for which fees may total up to $20,000 annually. No fees were incurred under this pre-approval authority in either 20202022 or 2019.2021.

 

TRANSACTIONS WITH MANAGEMENT AND OTHERS

 

Banking Transactions with Directors, Officers and Others

 

The Bank has had, and expects to have in the future, banking transactions in the ordinary course of business with certain directors and officers of Stock Yards Bancorp and the Bank and their associates, as well as with corporations or organizations with which they are connected as directors, officers, shareholders or partners. These banking transactions are made on substantially the same terms including interest rates and collateral as those prevailing at the time for comparable transactions with persons not related to the Bank or Stock Yards Bancorp. In the opinion of management of Stock Yards Bancorp and the Bank, such transactions do not involve more than the normal risk of collectibilitycollectability or present other unfavorable features. Loans made to directors and executive officers are in compliance with federal banking regulations and are thereby exempt from insider loan prohibitions included in the Sarbanes-Oxley Act of 2002.

 

At December 31, 2020,2022, loans to directors and officers of Stock Yards Bancorp and the Bank and their associates totaled $43.1$79 million equaling 9.8%10.4% of Bancorp’s consolidated stockholders’ equity.

 

Review and Approval of Related Person Transactions

 

Bancorp has written procedures for reviewing transactions between Bancorp and its directors and executive officers, their immediate family members and entities with which they have a position or relationship. These procedures are intended to determine whether any such related person transactions impair the independence of a director or present a conflict of interest on the part of a director or executive officer. Quarterly we require each of our directors and executive officers to complete a questionnaire listing any related person transactions. These are compiled by the internal audit department, and results are reported to the Audit Committee of the Board of Directors. Annually we require each director and executive officer to complete a directors’ and officers’ questionnaire that elicits information about related person transactions. Any related person transactions identified are discussed with the Audit Committee, and subsequently the Nominating and Corporate Governance Committee of the Board of Directors, and evaluated to determine whether any likelihood exists that the transaction could impair the director’s independence or present a conflict of interest for that director. Any such conclusion would be considered by the Board of Directors. Should it be determined a director is no longer independent, he/she would be removed from the Audit, Compensation or Nominating and Corporate Governance Committee(s) as applicable. If the transaction were to present a conflict of interest, the Board would determine the appropriate response. Upon receiving notice of any transaction on the part of an executive officer that may present a conflict of interest, the Director of Internal Audit will discuss the transaction with the Chief Executive Officer or if the transaction involves the Chief Executive Officer, the Chair of the Audit Committee, to determine whether the transaction presents a conflict of interest. In a case involving a conflict of interest, the Chief Executive Officer, or Chair of the Audit Committee, along with the director of Human Resources will determine the appropriate response.

 

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Under the oversight of the Audit Committee, management established a procedure under which any related person transaction or series of transactions in excess of $25,000, other than banking transactions in the ordinary course of business and in compliance with federal banking regulations, will be reported to and approved by the Audit Committee.

 

Transactions with Related Persons

 

In the ordinary course of business, the Bank may from time to time engage in non-banking transactions with other firms or entities whose officers, directors, partners or members are also directors or executive officers of Bancorp or members of their immediate families. In all cases, these transactions are conducted on an arms-length basis. ThereExcept as described below, there were no transactions in 20202022 with related persons involving amounts in excess of $120,000, which is the dollar threshold for disclosure under the SEC’s related person transaction rules.

In March 2022, we acquired Commonwealth Bancshares, Inc. and its wholly-owned banking subsidiary, Commonwealth Bank & Trust Company. Prior to the acquisition, Commonwealth Bank & Trust Company leased approximately 15,976 square feet of office space from Summit I Partners, Ltd., a real estate entity of which Darrell R. Wells is the majority owner. Mr. Wells is the father of our current director and nominee, Laura L. Wells. Mr. Wells, together with his spouse and his personal trust, beneficially own in excess of 5% of our outstanding Common Stock. We assumed the obligations of Commonwealth Bank under the lease with Summit I Partners following the acquisition. The aggregate amount of all lease payments due under the lease on and after January 1, 2022 until the lease expiration date of April 30, 2025, is $1,307,000.

 

As part of its annual assessment of director independence, the Nominating and Corporate Governance Committee considers the amount and nature of any business transactions or relationships between the Bank and any companies or organizations, including charitable organizations, with which a director may be affiliated. The Nominating and Corporate Governance Committee has determined that there are no such transactions or relationships that impair any director’s independence or present a conflict of interest on the part of any director.

 

CompensationCompensation Committee Interlocks and Insider Participation

 

During 20202022, Messrs. Lechleiter, Priebe, SchutteSaunier and Tasman,Schutte, all of whom are independent, non-employee directors, served on the Compensation Committee of the Board of Directors. None have served as an officer of Stock Yards Bancorp nor had any relationship with Stock Yards Bancorp requiring disclosure under the Securities and Exchange Commission’sSEC’s rules regarding related persons transactions. The Compensation Committee members have no interlocking relationships requiring disclosure under the rules of the Securities and Exchange Commission.SEC.

 

ANNUAL REPORT ON FORM 10-K

 

A copy of Stock Yards Bancorp, Inc.’s 20202022 Annual Report on Form 10-K as filed with the Securities and Exchange Commission, without exhibits, will be provided without charge following receipt of a written or oral request directed to: T. Clay Stinnett, Executive Vice President, Treasurer and Chief Financial Officer, Stock Yards Bancorp, Inc., P.O. Box 32890, Louisville, Kentucky 40232-2890, (502) 625-0890; or clay.stinnett@syb.com.clay.stinnett@syb.com. A copy of the Form 10-K may also be obtained at the companyCompany’s website, www.syb.com, or the SEC’s website, www.sec.gov.

 

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OTHER MATTERS

 

The officers and directors of Stock Yards Bancorp do not know of any matters to be presented for shareholder approval at the Annual Meeting other than those described in this Proxy Statement. If any other matters should properly come before the Annual Meeting, the Board of Directors intends that the persons named in the enclosed form of proxy, or their substitutes, will vote such proxy as recommended by the Board or, if no recommendation is given in their own discretion in the best interests of Stock Yards Bancorp.

 

	By Order of the Board of Directors
	/s/ James A. Hillebrand
	James A. Hillebrand Chairman and Chief Executive Officer Stock Yards Bancorp, Inc.
Louisville, Kentucky March 12, 202117, 2023

 

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APPENDIX A

Reconciliation of GAAP and non-GAAP Financial Measures

Earnings per diluted share equals net income divided by weighted average diluted shares outstanding. Return on average assets equals net income divided by total average assets, annualized to reflect a full year return on average assets. Similarly, return on average equity equals net income divided by total average equity, annualized to reflect a full year return on average equity.

As a result of the substantial impact that one-time acquisition costs related to the Kentucky Bancshares acquisition had on results for the year ended December 31, 2022, Bancorp considers adjusted diluted earnings per share, return on average assets and return on average equity ratios important as they reflect performance after removing certain merger expenses and purchase accounting adjustments.

		Years Ended December 31,
(dollars and shares in thousands)		2022				2021				$ Variance				% Variance
Net income, as reported (a)		$	92,972			$	74,645			$	18,327				24.6	%
Add: One-time acquisition costs			19,500				19,025				475				2.5	%
Add: Provision for credit losses on non-PCD loans			4,429				7,397				(2,968	)			-40.1	%
Less: Tax effect of adjustments to net income			(5,400	)			(5,747	)			347				-6.0	%
Net income – Non-GAAP (b)		$	111,501			$	95,320			$	16,181				17.0	%
Weighted average diluted shares outstanding (c)			28,922				25,156				3,766				15.0	%
Total average assets (d)		$	7,438,880			$	5,626,886				1,811,994				32.2	%
Total average equity (c)			738,798				573,261				165,537				28.9	%
Earnings per share – diluted – GAAP (a/c)		$	3.21			$	2.97			$	0.25				8.3	%
Earnings per share – Diluted – Non-GAAP (b/c)		$	3.86			$	3.79			$	0.07				1.7	%
Return on average assets – GAAP (a/d)			1.25	%			1.33	%			-8 bps				-5.8	%
Return on average assets – Non-GAAP (b/d)			1.50	%			1.69	%			-19 bps				-11.5	%
Return on average equity – GAAP (a/c)			12.58	%			13.02	%			-44 bps				-3.4	%
Return on average equity – Non-GAAP (b/c)			15.09	%			16.63	%			-154 bps				-9.2	%

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