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 settled in cash,
Stock, other SARs, or other property, or a SAR may be canceled,
forfeited, or surrendered;
(e) Prescribe the form of each SAR
Agreement, which need not be identical for each
Participant;
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(f) Decide all other matters that
must be determined in connection with a SAR;
(g) Establish, adopt or revise any
rules and regulations as it may deem necessary or advisable to
administer the Plan; and
(h) Make all other decisions and
determinations that may be required under the Plan or as the
Committee deems necessary or advisable to administer the Plan,
and
(i) Amend the Plan or any SAR
Agreement as provided herein.
4.4. DECISIONS BINDING. The
Committee
