EXHIBIT 10.5 GEORGIA BANK FINANCIAL CORPORATION 1997 EXECUTIVE LONG-TERM INCENTIVE PLAN

EXHIBIT 10.5

 

GEORGIA BANK FINANCIAL CORPORATION

1997 EXECUTIVE LONG-TERM INCENTIVE PLAN

 

ARTICLE I

 

PURPOSE

 

1.1 GENERAL. The purpose of the Georgia Bank Financial Corporation 1997 Executive Long-Term Incentive Plan (the “Plan”) is to promote the success, and enhance the value, of Georgia Bank Financial Corporation (the “Corporation”), by linking the personal interests of its key employees and officers to those of Corporation shareholders and by providing such persons with an incentive for outstanding performance. The Plan is further intended to provide flexibility to the Corporation in its ability to motivate, attract, and retain the services of persons upon whose judgement, interest, and special effort the successful conduct of the Corporation’s operation is largely dependent. Accordingly, the Plan permits the grant of stock appreciation rights from time to time to selected employees and officers.

 

ARTICLE 2

 

EFFECTIVE DATE

 

2.1. EFFECTIVE DATE. The Plan shall be effective as of the date upon which it shall be approved by the Board. However, the Plan shall be submitted to the shareholders of the Corporation for approval within 12 months of the board’s approval thereof. In the discretion of the Committee, Stock appreciation Rights may be made to Covered Employees which are intended to constitute qualified performance-based compensation under Code Section 162(m). Any such SARs shall be contingent upon the shareholders having approved the Plan.

 

ARTICLE 3

 

DEFINITIONS

 

3.1. DEFINITIONS. When a word or phrase appears in this Plan with the initial letter capitalized, and the word or phrase does not commence a sentence, the word or phrase shall generally be given the meaning ascribed to it in this Section or in Section 1.1 unless a clearly different meaning is required by the context. The following words and phrases shall have the following meanings:

 

“SAR Agreement” means any written agreement, contract, or other instrument or document evidencing a SAR.

 

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“Base Value” means base value established by the Committee for each SAR granted under the Plan.

 

“Board” means the Board of Directors of the Corporation.

 

“Change in Control” means and includes each of the following:

 

(1) The acquisition by any individual entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the 1934 Act) (a “Person”) of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the 1934 Act) of 25% or more of the combined voting owner of the then outstanding voting securities of the corporation entitled to vote generally in the election of directors (the “Outstanding Company Voting Securities”); provided, however, that for purposes of this subsection (1), the following acquisitions shall not constitute a Change of Control: (i) any acquisition by a Person who is on the Effective Date the beneficial owner of 25% or more of the Outstanding Company voting Securities, (ii) any acquisition directly from the Corporation, including without limitation a public offering of securities, (iii) any acquisition by the corporation, (iv) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Corporation or any corporation controlled by the corporation, or (v) any acquisition by any corporation pursuant to a transaction which complies with clauses (i), (ii), and (iii) of subsection (3) of this definition; or

 

(2) Individuals who, as of the Effective Date, constitute the Board (the “Incumbent Board”) cease for any reason to constitute at least a majority of the Board; provided, however, that any individual becoming a director subsequent to the Effective Date whose election, or nomination for election by the Corporation’s shareholders, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board shall be considered as though such individual were a member of the Incumbent Board, but excluding, for this propose, any such individual whose initial assumption of office occurs as a result of an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board; or

 

(3) Consummation of a reorganization, merger or consolidation to which the Corporation is a party or a sale or other disposition of all or substantially all of the assets of the Corporation (a “Business Combination”), in each case, unless, following such Business Combination, (i) all or substantially all of the individuals and entities who were the beneficial owners of the Outstanding Company Voting Securities immediately prior to such Business Combination beneficially own, directly or indirectly, more than 50% of the combined voting power of the then

 

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outstanding voting securities entitled to vote generally in the election of directors of the corporation resulting from such Business Combination (including, without limitation, a corporation which as a result of such transaction owns the Corporation or all or substantially all of the corporation’s assets either directly or through one or more subsidiaries) in substantially the same proportions as their ownership, immediately prior to such Business Combination of the Outstanding Company voting Securities, and (ii) no Person (excluding any corporation resulting from such Business Combination or any employee benefit plan (or related trust) of the Corporation or such corporation resulting from such Business Combination) beneficially owns, directly or indirectly, 25% or more of the combined voting power of the then outstanding voting securities of the corporation resulting from such Business Combination except to the extent that such ownership existed prior to the Business Combination, and (iii) at least a majority of the members of the board of directors of the corporation resulting from such Business Combination were members of the Incumbent Board (including persons deemed to be members of the Incumbent Board by reason of the proviso to subsection (2) of this definition at the time of the execution of the initial agreement, or of the action of the Board, providing for such business Combination.

 

“Code” means the Internal Revenue Code of 1986, as amended from time to time.

 

“Committee” means the committee of the Board described in Article 4.

 

“Corporation” means Georgia Bank Financial Corporation, a Georgia corporation.

 

“Covered Employee” means a covered employee as defined in Code Section 162(m)(3).

 

“Disability” shall mean any illness or other physical or mental condition of a Participant that renders the Participant incapable of performing his customary and usual duties for the Corporation, or any medically determinable illness or other physical or mental condition resulting from a bodily injury, disease or mental disorder which, in the judgement of the Committee, is permanent and continuous in nature. The Committee may require such medical or other evidence as it deems necessary to judge the nature and permanency of the Participant’s condition. The effective date of a Participant’s Disability shall be as determined by the Committee and communicated to the Participant in writing.

 

“Effective Date” has the meaning assigned such term in Section 2.1.

 

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“Fair Market Value,” on any date, means (i) if the Stock is not listed on a securities exchange or traded over the Nasdaq National Market or otherwise publicly quoted or traded, Fair Market Value will be determined by such method as the Committee determines in good faith to be reasonable; (ii) if the Stock is listed on a securities exchange or is traded over the Nasdaq National Market, the closing sales price on such exchange or the last reported sale price over such system on such date or, in the absence of reported sales on such date, the closing sales price or last sale price, as applicable on the immediately preceding date on which sales were reported; or (iii) if the Stock is not listed on a securities exchange or traded over the Nasdaq National Market, the mean between the bid and offered prices as quoted by Nasdaq or, if not quoted on Nasdaq, other recognized quotations service selected by the Committee in good faith for such date, provided that if it is determined that the fair market value is not properly reflected by such Nasdaq quotations, Fair Market Value will be determined by such other method as the Committee determines in good faith to be reasonable.

 

“Parent” means a corporation which owns or beneficially owns a majority of the outstanding voting stock or voting power of the Corporation.

 

“Participant” means a person who has been granted a SAR under the Plan.

 

“Stock Appreciation Right” or “SAR” means a stock appreciation right granted to a Participant under Article 7 of the Plan.

 

“Retirement” means a Participant’s termination of employment with the Corporation, Parent or Subsidiary after attaining any normal or early retirement age specified in any pension, profit sharing or other retirement program sponsored by the corporation, or in the event of the inapplicability thereof with respect to the person in question, as determined by the Committee in its judgement.

 

“Stock” means the $3.00 par value Common Stock of the Corporation and such other securities of the Corporation as may be substituted for Stock pursuant to Article 9.

 

“Subsidiary “ means any corporation, limited liability company, partnership or other entity of which a majority of the outstanding voting stock or voting power is beneficially owned directly or indirectly by the Corporation.

 

“1933 Act” means the Securities act of 1933, as amended from time to time.

 

“1934 Act” means the Securities Exchange Act of 1934, as amended from time to time.

 

 

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ARTICLE 4

 

ADMINISTRATION

 

4.1. COMMITTEE. The Plan shall be administered by the Compensation Committee of the Board or, at the discretion of the Board from time to time, by the Board. The Committee shall consist of two or more members of the Board who are both (i) “outside directors” as that term is used in Section 162(m) of the Code and the regulations promulgated thereunder, and (ii) “non-employee directors” as that term is defined in Rule 16b-3 promulgated under the 1934 Act. At any time at which the Plan is administered by the full Board, the Board shall have all the powers of the Committee hereunder, and any reference herein to the Committee (other than in this Section 4.1) shall include the Board.

 

4.2. ACTION BY THE COMMITTEE. For purposes of administering the Plan, the following rules of procedure shall govern the Committee. A majority of the Committee shall constitute a quorum. The acts of a majority of the members present at any meeting at which a quorum is present and acts approved unanimously in writing by the members of the Committee in lieu of a meeting shall be deemed the acts of the Committee. Each member of the Committee is entitled to, in good faith, rely or act upon any report or other information furnished to that member by any officer or other employee of the Corporation or any Parent or Subsidiary, and the Corporation’s independent certified public accountants, or any executive compensation consultant or other professional retained by the Corporation to assist I the administration of the Plan.

 

4.3. AUTHORITY OF COMMITTEE. The Committee has the exclusive power, authority and discretion to:

 

(a) Designate Participants;

 

(b) Determine the number and terms of SARs to be granted to each Participant;

 

(c) Accelerate the vesting of any outstanding SAR, based in each case on such considerations as the Committee in its sole discretion determines;

 

(d) Determine whether, to what extent, and under what circumstances a SAR may be sett