EXHIBIT 99
HERITAGE FINANCIAL GROUP
2006 EQUITY INCENTIVE PLAN
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TABLE OF CONTENTS
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ARTICLE I PURPOSE...........................................................................1
SECTION 1.1 GENERAL PURPOSE OF THE PLAN............................................1
ARTICLE II DEFINITIONS......................................................................1
ARTICLE III AVAILABLE SHARES................................................................5
SECTION 3.1 SHARES AVAILABLE UNDER THE PLAN........................................5
SECTION 3.2 SHARES AVAILABLE FOR OPTIONS AND STOCK APPRECIATION RIGHTS.............5
SECTION 3.3 SHARES AVAILABLE FOR RESTRICTED STOCK AWARDS...........................5
SECTION 3.4 ADDITIONAL OTS RESTRICTIONS............................................5
SECTION 3.5 COMPUTATION OF SHARES ISSUED...........................................6
ARTICLE IV ADMINISTRATION...................................................................6
SECTION 4.1 COMMITTEE..............................................................6
SECTION 4.2 COMMITTEE POWERS.......................................................7
ARTICLE V STOCK OPTIONS.....................................................................7
SECTION 5.1 GRANT OF OPTIONS.......................................................7
SECTION 5.2 SIZE OF OPTION.........................................................8
SECTION 5.3 EXERCISE PRICE.........................................................8
SECTION 5.4 EXERCISE PERIOD........................................................8
SECTION 5.5 VESTING DATE...........................................................8
SECTION 5.6 ADDITIONAL RESTRICTIONS ON INCENTIVE STOCK OPTIONS.....................9
SECTION 5.7 METHOD OF EXERCISE.....................................................9
SECTION 5.8 LIMITATIONS ON OPTIONS................................................10
SECTION 5.9 PROHIBITION AGAINST OPTION REPRICING..................................11
ARTICLE VI STOCK APPRECIATION RIGHTS.......................................................12
SECTION 6.1 GRANT OF STOCK APPRECIATION RIGHTS....................................12
SECTION 6.2 SIZE OF STOCK APPRECIATION RIGHT......................................12
SECTION 6.3 EXERCISE PRICE........................................................12
SECTION 6.4 EXERCISE PERIOD.......................................................12
SECTION 6.5 VESTING DATE..........................................................13
SECTION 6.6 METHOD OF EXERCISE....................................................13
SECTION 6.7 LIMITATIONS ON STOCK APPRECIATION RIGHTS..............................14
SECTION 6.8 PROHIBITION AGAINST STOCK APPRECIATION RIGHT REPRICING................15
ARTICLE VII RESTRICTED STOCK AWARDS........................................................15
SECTION 7.1 IN GENERAL............................................................15
SECTION 7.2 VESTING DATE..........................................................16
SECTION 7.3 DIVIDEND RIGHTS.......................................................17
SECTION 7.4 VOTING RIGHTS.........................................................17
SECTION 7.5 DESIGNATION OF BENEFICIARY............................................17
SECTION 7.6 MANNER OF DISTRIBUTION OF AWARDS......................................17
ARTICLE VIII SPECIAL TAX PROVISION.........................................................18
SECTION 8.1 TAX WITHHOLDING RIGHTS................................................18
ARTICLE IX AMENDMENT AND TERMINATION.......................................................18
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SECTION 9.1 TERMINATION...........................................................18
SECTION 9.2 AMENDMENT.............................................................18
SECTION 9.3 ADJUSTMENTS IN THE EVENT OF BUSINESS REORGANIZATION...................18
ARTICLE X MISCELLANEOUS....................................................................19
SECTION 10.1 STATUS AS AN EMPLOYEE BENEFIT PLAN....................................19
SECTION 10.2 NO RIGHT TO CONTINUED EMPLOYMENT......................................19
SECTION 10.3 CONSTRUCTION OF LANGUAGE..............................................19
SECTION 10.4 GOVERNING LAW.........................................................19
SECTION 10.5 HEADINGS..............................................................20
SECTION 10.6 NON-ALIENATION OF BENEFITS............................................20
SECTION 10.7 NOTICES...............................................................20
SECTION 10.8 APPROVAL OF SHAREHOLDERS..............................................20
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HERITAGE FINANCIAL GROUP
2006 EQUITY INCENTIVE PLAN
ARTICLE I
PURPOSE
SECTION 1.1 GENERAL PURPOSE OF THE PLAN.
The purpose of the Plan is to promote the long-term growth and
profitability of Heritage Financial Group, to provide directors, advisory
directors, officers and employees of Heritage Financial Group and its affiliates
with an incentive to achieve corporate objectives, to attract and retain
individuals of outstanding competence and to provide such individuals with an
equity interest in Heritage Financial Group.
ARTICLE II
DEFINITIONS
The following definitions shall apply for the purposes of this Plan,
unless a different meaning is plainly indicated by the context:
AFFILIATE means any "parent corporation" or "subsidiary corporation" of
the Company, as those terms are defined in Section 424(e) and (f) respectively,
of the Code.
AWARD means the grant by the Committee of an Incentive Stock Option, a
Non-Qualified Stock Option, a Stock Appreciation Right, a Restricted Stock Award
or any other benefit under this Plan.
AWARD AGREEMENT means a written instrument evidencing an Award under
the Plan and establishing the terms and conditions thereof.
BENEFICIARY means the Person designated by a Participant to receive any
Shares subject to a Restricted Stock Award made to such Participant that become
distributable, or to have the right to exercise any Options or Stock
Appreciation Rights granted to such Participant that are exercisable, following
the Participant's death.
BOARD means the Board of Directors of Heritage Financial Group and any
successor thereto.
CHANGE IN CONTROL means any of the following events:
(a) any third person, including a "group" as defined in Section
13(d)(3) of the Securities Exchange Act of 1934, becomes the beneficial owner of
shares of the Company with respect to which 25% or more of the total number of
votes for the election of the Board may be cast;
(b) as a result of, or in connection with, any cash tender offer,
merger or other business combination, sale of assets or contested election, or
combination of the
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foregoing, the persons who were directors of the Company shall cease to
constitute a majority of the Board;
(c) the stockholders of the Company approve an agreement providing
either for a transaction in which the Company will cease to be an independent
publicly owned corporation or for a sale or other disposition of all or
substantially all the assets of the Company; or
(d) a tender offer or exchange offer for 25% or more of the total
outstanding Shares of the Company is commenced (other than such an offer by the
Company).
CODE means the Internal Revenue Code of 1986, as amended from time to
time.
COMMITTEE means the Committee described in Article IV.
COMPANY means Heritage Financial Group, a federal corporation, and any
successor thereto.
DISABILITY means a condition of incapacity of a Participant which
renders that person unable to engage in the performance of his or her duties by
reason of any medically determinable physical or mental impairment which can be
expected to result in death or which has lasted or can be expected to last for a
continuous period of not less than twelve (12) months. Notwithstanding the
above, the term Disability in connection with Incentive Stock Options shall have
the meaning specified in Section 22(e)(3) of the Code.
EFFECTIVE DATE means May 17, 2006, the date on which the Plan is
approved by the stockholders of Heritage Financial Group.
EXCHANGE ACT means the Securities Exchange Act of 1934, as amended.
EXERCISE PERIOD means the period during which an Option or Stock
Appreciation Right may be exercised.
EXERCISE PRICE means the price per Share at which Shares subject to an
Option may be purchased upon exercise of the Option and on the basis of which
the Shares due upon exercise of a Stock Appreciation Right is computed.
FAIR MARKET VALUE means, with respect to a Share on a specified date:
(a) If the Shares are listed on any established stock exchange or
traded on the Nasdaq National Market or the Nasdaq SmallCap Market, the closing
sales price for such stock (or the closing bid, if no sales were reported) as
quoted on the Composite Tape or other comparable reporting system for the
exchange or market on the applicable date, or if the applicable date is not a
trading day, on the trading day immediately preceding the applicable date;
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(b) If the Shares are not traded on a national securities exchange but
are traded on the over-the-counter market, if sales prices are not regularly
reported for the Shares for the trading day referred to in clause (a), and if
bid and asked prices for the Shares are regularly reported, the mean between the
bid and the asked price for the Shares at the close of trading in the
over-the-counter market on the applicable date, or if the applicable date is not
a trading day, on the trading day immediately preceding the applicable date; and
(c) In the absence of such markets for the Shares, the Fair Market
Value shall be determined in good faith by the Committee.
FAMILY MEMBER means with respect to any Participant:
(a) the lineal ascendants and lineal descendants of such Participant or
his spouse, or any one or more of them, or
(b) an entity wholly owned by, including, but not limited to, a trust
the exclusive beneficiaries of which are, one or more of the lineal ascendants
or lineal descendants of such Participant or his spouse, or wholly owned jointly
by one or more of them and the Participant.
INCENTIVE STOCK OPTION means a right to purchase Shares that is granted
to an employee of the Company or any Affiliate that is designated by the
Committee to be an Incentive Stock Option and that is intended to satisfy the
requirements of Section 422 of the Code.
NON-QUALIFIED STOCK OPTION means a right to purchase Shares that is not
intended to qualify as an Incentive Stock Option or does not satisfy the
requirements of Section 422 of the Code.
OPTION means either an Incentive Stock Option or a Non-Qualified Stock
Option.
OPTION HOLDER means, at any relevant time with respect to an Option,
the person having the right to exercise the Option.
PARTICIPANT means any director, advisory director, officer or employee
of the Company or any Affiliate who is selected by the Committee to receive an
Award.
PERMITTED TRANSFEREE means, with respect to any Participant, a Family
Member of the Participant to whom an Award has been transferred as permitted
hereunder.
PERSON means an individual, a corporation, a partnership, a limited
liability company, an association, a joint-stock company, a trust, an estate, an
unincorporated organization and any other business organization or institution.
PLAN means the Heritage Financial Group 2006 Equity Incentive Plan, as
amended from time to time.
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QUALIFIED DOMESTIC RELATIONS ORDER means a Domestic Relations Order
that:
(a) clearly specifies:
(i) The name and last known mailing address of the Option
Holder and of each person given rights under such Domestic Relations Order;
(ii) the amount or percentage of the Option Holder's benefits
under this Plan to be paid to each person covered by such Domestic Relations
Order;
(iii) the number of payments or the period to which such
Domestic Relations Order applies; and
(iv) the name of this Plan; and
(b) does not require the payment of a benefit in a form or amount that
is:
(i) not otherwise provided for under the Plan; or
(ii) inconsistent with a previous Qualified Domestic Relations
Order.
For the purposes of this Plan, a "Domestic Relations Order" means a judgment,
decree or order, including the approval of a property settlement, that is made
pursuant to a state domestic relations or community property law and relates to
the provision of child support, alimony payments or marital property rights to a
spouse, child or other dependent of a Participant.
RESTRICTED STOCK AWARD means an award of Shares or Share Units pursuant
to Article VII.
SERVICE means, unless the Committee provides otherwise in an Award
Agreement, service in any capacity as a director, advisory director, officer or
employee of the Company or any Affiliate.
SHARE means a share of common stock, par value $.01 per share, of
Heritage Financial Group.
SHARE UNIT means the right to receive a Share at a specified future
date.
STOCK APPRECIATION RIGHT means the right to receive a payment in Shares
measured by the increase in the Fair Market Value of a Share over the Exercise
Price of that Stock Appreciation Right.
STOCK APPRECIATION RIGHT HOLDER means, at any relevant time with
respect to a Stock Appreciation Right, the person having the right to exercise
the Stock Appreciation Right.
TERMINATION FOR CAUSE means termination upon an intentional failure to
perform stated duties, a breach of a fiduciary duty involving personal
dishonesty which results in material loss to the Company or one of its
Affiliates or a willful violation of any law, rule or regulation (other
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than traffic violations or similar offenses) or a final cease-and-desist order
which results in material loss to the Company or one of its Affiliates.
Notwithstanding the above, if a Participant is subject to a different definition
of termination for cause in an employment or severance or similar agreement with
the Company or any Affiliate, such other definition shall control.
VESTING DATE means the date or dates on which the grant of an Option or
Stock Appreciation Right is eligible to be exercised or the date or dates on
which a Restricted Stock Award ceases to be forfeitable.
ARTICLE III
AVAILABLE SHARES
SECTION 3.1 SHARES AVAILABLE UNDER THE PLAN.
Subject to adjustment under Article IX, the maximum aggregate number of
Shares representing Awards shall not exceed 771,149 Shares. Shares representing
tandem Stock Appreciation Rights shall for such purpose only be counted as
either Shares representing Options outstanding or Stock Appreciation Rights
outstanding, but not as both.
SECTION 3.2 SHARES AVAILABLE FOR OPTIONS AND STOCK APPRECIATION
RIGHTS.
Subject to adjustment under Article IX and the limitations under
Section 3.4 below, the maximum aggregate number of Shares which may be issued
upon exercise of Options and Stock Appreciation Rights shall be 550,821 Shares,
and the maximum aggregate number of Shares which may be issued upon exercise of
Options and Stock Appreciation Rights to any one individual in any calendar year
shall be 137,705 Shares.
SECTION 3.3 SHARES AVAILABLE FOR RESTRICTED STOCK AWARDS.
Subject to adjustment under Article IX and the limitations under
Section 3.4 below, the maximum number of Shares which may be issued upon award
or vesting of Restricted Stock Awards under the Plan shall be 220,328 Shares and
the maximum aggregate number of Shares which may be issued upon award or vesting
of Restricted Stock Awards to any one individual in any calendar year shall be
55,082.
SECTION 3.4 ADDITIONAL OTS RESTRICTIONS.
As long as the Plan is subject to OTS regulations as applicable on the
Effective Date, subject to adjustment under Article IX, the following additional
restrictions shall apply:
(c) No Participant shall receive Options and Stock Appreciation Rights
with respect to more than 137,705 Shares.
(d) No Participant shall receive Restricted Stock Awards with respect
to more than 55,082 Shares.
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(e) No director or advisory director who is not also an employee of the
Company or its Affiliates shall receive Options and Stock Appreciation Rights
with respect to more than 27,541 Shares, and all such directors and advisory
directors as a group shall not receive Options and Stock Appreciation Rights
with respect to more than 165,246 Shares.
(f) No director or advisory director who is not also an employee of the
Company or its Affiliates shall receive Restricted Stock Awards with respect to
more than 11,016 Shares, and all such directors and advisory directors as a
group shall not receive Restricted Stock Awards with respect to more than 66,098
Shares.
(g) No Award may vest beginning earlier than one year from the
Effective Date of the Plan and all Awards shall vest in annual installments of
not more than 20% of the total Award.
SECTION 3.5 COMPUTATION OF SHARES ISSUED.
For purposes of this Article III, Shares shall be considered issued
pursuant to the Plan only if actually issued upon the exercise of an Option or
Stock Appreciation Right or in connection with a Restricted Stock Award. Any
Award subsequently forfeited, in whole or in part, shall not be considered
issued.
ARTICLE IV
ADMINISTRATION
SECTION 4.1 COMMITTEE.
(a) The Plan shall be administered by a Committee appointed by the
Board for that purpose and consisting of not less than two (2) members of the
Board. Each member of the Committee shall be an "Outside Director" within the
meaning of Section 162(m) of the Code or a successor rule or regulation, a
"Non-Employee Director" within the meaning of Rule 16b-3(b)(3)(i) under the
Exchange Act or a successor rule or regulation and an "Independent Director"
under the corporate governance rules and regulations imposing independence
standards on committees performing similar functions promulgated by any national
securities exchange or quotation system on which Shares are listed.
(b) The act of a majority of the members present at a meeting duly
called and held shall be the act of the Committee. Any decision or determination
reduced to writing and signed by all members shall be as fully effective as if
made by unanimous vote at a meeting duly called and held.
(c) The Committee's decisions and determinations under the Plan
need not be uniform and may be made selectively among Participants, whether or
not such Participants are similarly situated.
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SECTION 4.2 COMMITTEE POWERS.
Subject to the terms and conditions of the Plan and such limitations as
may be imposed by the Board, the Committee shall be responsible for the overall
management and administration of the Plan and shall have such authority as shall
be necessary or appropriate in order to carry out its responsibilities,
including, without limitation, the authority:
(a) to interpret and construe the Plan, and to determine all questions
that may arise under the Plan as to eligibility for participation in the Plan,
the number of Shares subject to Awards to be issued or granted, and the terms
and conditions thereof;
(b) with the consent of the Participant, to the extent deemed necessary
by the Committee, amend or modify the terms of any outstanding Award or
accelerate or defer the Vesting Date thereof;
(c) to adopt rules and regulations and to prescribe forms for the
operation and administration of the Plan; and
(d) to take any other action not inconsistent with the provisions of
the Plan that it may deem necessary or appropriate.
All decisions, determinations and other actions of the Committee made or taken
in accordance with the terms of the Plan shall be final and conclusive and
binding upon all parties having an interest therein.
ARTICLE V
STOCK OPTIONS
SECTION 5.1 GRANT OF OPTIONS.
(a) Subject to the limitations of the Plan, the Committee may, in
its discretion, grant to a Participant an Option to purchase Shares. An Option
must be designated as either an Incentive Stock Option or a Non-Qualified Stock
Option and, if not designated as either, shall be a Non-Qualified Stock Option.
Only employees of the Company or its Affiliates may receive Incentive Stock
Options.
(b) Any Option granted shall be evidenced by an Award Agreement which
shall:
(i) specify the number of Shares covered by the Option;
(ii) specify the Exercise Price;
(iii) specify the Exercise Period;
(iv) specify the Vesting Date; and
(v) contain such other terms and conditions not inconsistent
with the Plan as the Committee may, in its discretion, prescribe.
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SECTION 5.2 SIZE OF OPTION.
Subject to the restrictions of the Plan, the number of Shares as to
which a Participant may be granted Options shall be determined by the Committee,
in its discretion.
SECTION 5.3 EXERCISE PRICE.
The price per Share at which an Option may be exercised shall be
determined by the Committee, in its discretion, provided, however, that the
Exercise Price shall not be less than the Fair Market Value of a Share on the
date on which the Option is granted.
SECTION 5.4 EXERCISE PERIOD.
The Exercise Period during which an Option may be exercised shall
commence on the Vesting Date. It shall expire on the earliest of:
(a) the date specified by the Committee in the Award Agreement;
(b) the last day of the three-month period commencing on the date of
the Participant's termination of Service, other than on account of death,
Disability or a Termination for Cause;
(c) the last day of the one-year period commencing on the date of the
Participant's termination of Service due to death or Disability;
(d) as of the time and on the date of the Participant's termination of
Service due to a Termination for Cause; or
(e) the last day of the ten-year period commencing on the date on which
the Option was granted.
An Option that remains unexercised at the close of business on the last day of
the Exercise Period shall be canceled without consideration at the close of
business on that date.
SECTION 5.5 VESTING DATE.
(a) The Vesting Date for each Option Award shall be determined by
the Committee and specified in the Award Agreement.
(b) Unless otherwise determined by the Committee and specified in
the Award Agreement:
(i) if the Participant of an Option Award terminates Service
prior to the Vesting Date for any reason other than death or Disability, any
unvested Option shall be forfeited without consideration;
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(ii) if the Participant of an Option Award terminates Service
prior to the Vesting Date on account of death or Disability, the Vesting Date
shall be accelerated to the date of the Participant's termination of Service;
and
(iii) if a Change in Control occurs prior to the Vesting Date
of an Option Award that is outstanding on the date of the Change in Control, the
Vesting Date shall be accelerated to the earliest date of the Change in Control.
SECTION 5.6 ADDITIONAL RESTRICTIONS ON INCENTIVE STOCK OPTIONS.
An Option designated by the Committee to be an Incentive Stock Option
shall be subject to the following provisions:
(a) Notwithstanding any other provision of this Plan to the contrary,
no Participant may receive an Incentive Stock Option under the Plan if such
Participant, at the time the award is granted, owns (after application of the
rules contained in Section 424(d) of the Code) stock possessing more than ten
(10) percent of the total combined voting power of all classes of stock of the
Company or its Affiliates, unless (i) the option price for such Incentive Stock
Option is at least 110 percent of the Fair Market Value of the Shares subject to
such Incentive Stock Option on the date of grant and (ii) such Option is not
exercisable after the date five (5) years from the date such Incentive Stock
Option is granted.
(b) Each Participant who receives Shares upon exercise of an Option
that is an Incentive Stock Option shall give the Company prompt notice of any
sale of Shares prior to a date which is two years from the date the Option was
granted or one year from the date the Option was exercised. Such sale shall
disqualify the Option as an Incentive Stock Option.
(c) The aggregate Fair Market Value (determined with respect to each
Incentive Stock Option at the time such Incentive Stock Option is granted) of
the Shares with respect to which Incentive Stock Options are exercisable for the
first time by a Participant during any calendar year (under this Plan or any
other plan of the Company or an Affiliate) shall not exceed $100,000.
(d) Any Option under this Plan which is designated by the Committee as
an Incentive Stock Option but fails, for any reason, to meet the foregoing
requirements shall be treated as a Non-Qualified Stock Option.
SECTION 5.7 METHOD OF EXERCISE.
(a) Subject to the limitations of the Plan and the Award Agreement, an
Option Holder may, at any time on or after the Vesting Date and during the
Exercise Period, exercise his or her right to purchase all or any part of the
Shares to which the Option relates; provided, however, that the minimum number
of Shares which may be purchased at any time shall be 100, or, if less, the
total number of Shares relating to the Option which remain un-purchased. An
Option Holder shall exercise an Option to purchase Shares by:
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(iv) giving written notice to the Committee, in such form and
manner as the Committee may prescribe, of his or her intent to exercise the
Option;
(v) delivering to the Committee full payment for the Shares as
to which the Option is to be exercised; and
(vi) satisfying such other conditions as may be prescribed in
the Award Agreement.
(b) The Exercise Price of Shares to be purchased upon exercise of any
Option shall be paid in full:
(i) in cash (by certified or bank check or such other
instrument as the Company may accept); or
(ii) if and to the extent permitted by the Committee, in the
form of Shares already owned by the Option Holder for a period of more than six
(6) months as of the exercise date and having an aggregate Fair Market Value on
the date the Option is exercised equal to the aggregate Exercise Price to be
paid; or
(iii) by a combination thereof.
Payment for any Shares to be purchased upon exercise of an Option may also be
made by delivering a properly executed exercise notice to the Company, together
with a copy of irrevocable instructions to a broker to deliver promptly to the
Company the amount of sale or loan proceeds to pay the purchase price and
applicable tax withholding amounts (if any), in which event the Shares acquired
shall be delivered to the broker promptly following receipt of payment.
(c) When the requirements of this Section have been satisfied, the
Committee shall take such action as is necessary to cause the issuance of a
stock certificate evidencing the Option Holder's ownership of such Shares. The
Person exercising the Option shall have no right to vote or to receive
dividends, nor have any other rights with respect to the Shares, prior to the
date the Shares are transferred to such Person on the stock transfer records of
the Company, and no adjustments shall be made for any dividends or other rights
for which the record date is prior to the date as of which the transfer is
effected.
SECTION 5.8 LIMITATIONS ON OPTIONS.
(a) An Option by its terms shall not be transferable by the Option
Holder other than by will or the laws of descent and distribution, or pursuant
to the terms of a Qualified Domestic Relations Order, and shall be exercisable,
during the life of the Option Holder, only by the Option Holder or an alternate
payee designated pursuant to such a Qualified Domestic Relations Order;
provided, however, that a Participant may, at any time at or after the grant of
a Non-Qualified Stock Option under the Plan, apply to the Committee for approval
to transfer all or any portion of such Non-Qualified Stock Option which is then
unexercised to such Participant's Family Member. The Committee may approve or
withhold approval of such transfer in its sole
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and absolute discretion. If such transfer is approved, it shall be effected by
written notice to the Company given in such form and manner as the Committee may
prescribe and actually received by the Company prior to the death of the person
giving it. Thereafter, the transferee shall have, with respect to such
Non-Qualified Stock Option, all of the rights, privileges and obligations which
would attach thereunder to the Participant. If a privilege of the Option depends
on the life, Service or other status of the Participant, such privilege of the
Option for the transferee shall continue to depend upon the life, Service or
other status of the Participant. The Committee shall have full and exclusive
authority to interpret and apply the provisions of the Plan to transferees to
the extent not specifically addressed herein.
(b) The Company's obligation to deliver Shares with respect to an
Option shall, if the Committee so requests, be conditioned upon the receipt of a
representation as to the investment intention of the Option Holder to whom such
Shares are to be delivered, in such form as the Committee shall determine to be
necessary or advisable to comply with the provisions of applicable federal,
state or local law. It may be provided that any such representation shall become
inoperative upon a registration of the Shares or upon the occurrence of any
other event eliminating the necessity of such representation. The Company shall
not be required to deliver any Shares under the Plan prior to:
(i) the admission of such Shares to listing on any stock
exchange or trading on any automated quotation system on which Shares may then
be listed or traded; or
(ii) the completion of such registration or other
qualification under any state or federal law, rule or regulation as the
Committee shall determine to be necessary or advisable.
(c) An Option Holder may designate a Beneficiary to receive any
Options that may be exercised after his death. Such designation and any change
or revocation of such designation shall be made in writing in the form and
manner prescribed by the Committee. In the event that the designated Beneficiary
dies prior to the Option Holder, or in the event that no Beneficiary has been
designated, any Options that may be exercised following the Option Holder's
death shall be transferred to the Option Holder's estate. If the Option Holder
and his or her Beneficiary shall die in circumstances that cause the Committee,
in its discretion, to be uncertain which shall have been the first to die, the
Option Holder shall be deemed to have survived the Beneficiary.
SECTION 5.9 PROHIBITION AGAINST OPTION REPRICING.
Except as provided in Section 9.3, neither the Committee nor the Board
shall have the right or authority following the grant of an Option pursuant to
the Plan to amend or modify the Exercise Price of any such Option, or to cancel
the Option at a time when the Exercise Price is less than the Fair Market Value
of the Shares, in exchange for another Option or Award.
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ARTICLE VI
STOCK APPRECIATION RIGHTS
SECTION 6.1 GRANT OF STOCK APPRECIATION RIGHTS.
(a) Subject to the limitations of the Plan, the Committee may, in
its discretion, grant to a Participant a Stock Appreciation Right. A Stock
Appreciation Right must be designated as either a tandem Stock Appreciation
Right or a stand-alone Stock Appreciation Right and, if not so designated, shall
be deemed to be a stand-alone Stock Appreciation Right. A tandem Stock
Appreciation Right may only be granted at the same time as the Option to which
it relates. The exercise of a tandem Stock Appreciation Right shall cancel the
related Option for a like number of Shares and the exercise of a related Option
shall cancel a tandem Stock Appreciation Right for a like number of Shares.
(b) Any Stock Appreciation Right granted shall be evidenced by an
Award Agreement which shall:
(i) specify the number of Shares covered by the Stock
Appreciation Right;
(ii) specify the Exercise Price;
(iii) specify the Exercise Period;
(iv) specify the Vesting Date;
(v) specify that the Stock Appreciation Right shall be settled
in Shares; and
(vi) contain such other terms and conditions not inconsistent
with the Plan as the Committee may, in its discretion, prescribe.
SECTION 6.2 SIZE OF STOCK APPRECIATION RIGHT.
Subject to the restrictions of the Plan, the number of Shares as to
which a Participant may be granted Stock Appreciation Rights shall be determined
by the Committee, in its discretion.
SECTION 6.3 EXERCISE PRICE.
The price per Share at which a Stock Appreciation Right may be
exercised shall be determined by the Committee, in its discretion, provided,
however, that the Exercise Price shall not be less than the Fair Market Value of
a Share on the date on which the Stock Appreciation Right is granted.
SECTION 6.4 EXERCISE PERIOD.
The Exercise Period during which a Stock Appreciation Right may be
exercised shall commence on the Vesting Date. It shall expire on the earliest
of:
(a) the date specified by the Committee in the Award Agreement;
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(b) the last day of the three-month period commencing on the date of
the Participant's termination of Service, other than on account of death,
Disability or a Termination for Cause;
(c) the last day of the one-year period commencing on the date of the
Participant's termination of Service due to death or Disability;
(d) as of the time and on the date of the Participant's termination of
Service due to a Termination for Cause; or
(e) the last day of the ten-year period commencing on the date on which
the Stock Appreciation Right was granted.
A Stock Appreciation Right that remains unexercised at the close of
business on the last day of the Exercise Period shall be canceled without
consideration at the close of business on that date.
SECTION 6.5 VESTING DATE.
(a) The Vesting Date for each Stock Appreciation Right Award shall
be determined by the Committee and specified in the Award Agreement.
(b) Unless otherwise determined by the Committee and specified in
the Award Agreement:
(i) if the Participant of a Stock Appreciation Right Award
terminates Service prior to the Vesting Date for any reason other than death or
Disability, any unvested Award shall be forfeited without consideration;
(ii) if the Participant of a Stock Appreciation Right Award
terminates Service prior to the Vesting Date on account of death or Disability,
the Vesting Date shall be accelerated to the date of the Participant's
termination of Service; and
(iii) if a Change in Control occurs prior to the Vesting Date
of a Stock Appreciation Right Award that is outstanding on the date of the
Change in Control, the Vesting Date shall be accelerated to the earliest date of
the Change in Control.
SECTION 6.6 METHOD OF EXERCISE.
(a) Subject to the limitations of the Plan and the Award Agreement,
a Participant may, at any time on or after the Vesting Date and during the
Exercise Period, exercise his or her Stock Appreciation Right as to all or any
part of the Shares to which the Stock Appreciation Right relates; provided,
however, that the minimum number of Shares as to which a Stock Appreciation
Right may be exercised shall be 100, or, if less, the total number of Shares
relating to the Stock Appreciation Right which remain unexercised. A Stock
Appreciation Right Holder shall exercise a Stock Appreciation Right by:
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(i) giving written notice to the Committee, in such form and
manner as the Committee may prescribe, of his or her intent to exercise the
Stock Appreciation Right; and
(ii) satisfying such other conditions as may be prescribed in
the Award Agreement.
(b) When the requirements of this Section have been satisfied, the
Committee shall take such action as is necessary to cause the remittance to the
Stock Appreciation Right Holder (or, in the event of his or her death, his or
her Beneficiary) of a number of Shares with an aggregate Fair Market Value equal
to the excess (if any) of (i) the Fair Market Value of a Share on the date of
exercise over (ii) the Exercise Price per Share, times the number of Stock
Appreciation Rights exercised. The Person exercising the Stock Appreciation
Right shall have no right to vote or to receive dividends, nor have any other
rights with respect to the Shares, prior to the date the Shares are transferred
to such Person on the stock transfer records of the Company, and no adjustments
shall be made for any dividends or other rights for which the record date is
prior to the date as of which the transfer is effected.
SECTION 6.7 LIMITATIONS ON STOCK APPRECIATION RIGHTS.
(a) A Stock Appreciation Right by its terms shall not be transferable
by the Stock Appreciation Right Holder other than by will or the laws of descent
and distribution, or pursuant to the terms of a Qualified Domestic Relations
Order, and shall be exercisable, during the life of the Stock Appreciation Right
Holder, only by the Stock Appreciation Right Holder or an alternate payee
designated pursuant to such a Qualified Domestic Relations Order; provided,
however, that a Participant may, at any time at or after the grant of a Stock
Appreciation Right under the Plan, apply to the Committee for approval to
transfer all or any portion of such Stock Appreciation Right which is then
unexercised to such Participant's Family Member. The Committee may approve or
withhold approval of such transfer in its sole and absolute discretion. If such
transfer is approved, it shall be effected by written notice to the Company
given in such form and manner as the Committee may prescribe and actually
received by the Company prior to the death of the person giving it. Thereafter,
the transferee shall have, with respect to such Stock Appreciation Right, all of
the rights, privileges and obligations which would attach thereunder to the
Participant. If a privilege of the Stock Appreciation Right depends on the life,
Service or other status of the Participant, such privilege of the Stock
Appreciation Right for the transferee shall continue to depend upon the life,
Service or other status of the Participant. The Committee shall have full and
exclusive authority to interpret and apply the provisions of the Plan to
transferees to the extent not specifically addressed herein.
(b) The Company's obligation to deliver Shares with respect to a Stock
Appreciation Right shall, if the Committee so requests, be conditioned upon the
receipt of a representation as to the investment intention of the Stock
Appreciation Right Holder to whom such Shares are to be delivered, in such form
as the Committee shall determine to be necessary or advisable to comply with the
provisions of applicable federal, state or local law. It may be provided that
any such representation shall become inoperative upon a registration of the
Shares or upon the occurrence of any other event eliminating the necessity of
such representation. The Company shall not be required to deliver any Shares
under the Plan prior to:
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(i) the admission of such Shares to listing on any stock
exchange or trading on any automated quotation system on which Shares may then
be listed or traded; or
(ii) the completion of such registration or other
qualification under any state or federal law, rule or regulation as the
Committee shall determine to be necessary or advisable.
(c) A Stock Appreciation Right Holder may designate a Beneficiary
to receive any Stock Appreciation Right that may be exercised after his death.
Such designation and any change or revocation of such designation shall be made
in writing in the form and manner prescribed by the Committee. In the event that
the designated Beneficiary dies prior to the Stock Appreciation Right Holder, or
in the event that no Beneficiary has been designated, any Stock Appreciation
Rights that may be exercised following the Stock Appreciation Right Holder's
death shall be transferred to the Stock Appreciation Right Holder's estate. If
the Stock Appreciation Right Holder and his or her Beneficiary shall die in
circumstances that cause the Committee, in its discretion, to be uncertain which
shall have been the first to die, the Stock Appreciation Right Holder shall be
deemed to have survived the Beneficiary.
SECTION 6.8 PROHIBITION AGAINST STOCK APPRECIATION RIGHT REPRICING.
Except as provided in Section 9.3, neither the Committee nor the Board
shall have the right or authority following the grant of a Stock Appreciation
Right pursuant to the Plan to amend or modify the Exercise Price of any such
Stock Appreciation Right or to cancel the Stock Appreciation Right at a time
when the Exercise Price is less than the Fair Market Value of the Shares, in
exchange for another Stock Appreciation Right or Award.
ARTICLE VII
RESTRICTED STOCK AWARDS
SECTION 7.1 IN GENERAL.
(a) Each Restricted Stock Award shall be evidenced by an Award
Agreement which shall specify:
(i) the number of Shares or Share Units covered by the
Restricted Stock Award;
(ii) the amount, if any, which the Participant shall be
required to pay to the Company in consideration for the issuance of such Shares
or Share Units;
(iii) the date of grant of the Restricted Stock Award;
(iv) the Vesting Date for the Restricted Stock Award;
(v) as to Restricted Stock Awards awarding Shares, the rights
of the Participant with respect to dividends, voting rights and other rights and
preferences associated with such Shares; and
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(vi) as to Restricted Stock Awards awarding Share Units, the
rights of the Participant with respect to attributes of the Share Units which
are the equivalent of dividends and other rights and preferences associated with
Shares and the circumstances, if any, prior to the Vesting Date pursuant to
which Share Units shall be converted to Shares;
and contain such other terms and conditions not inconsistent with the Plan as
the Committee may, in its discretion, prescribe.
(b) All Restricted Stock Awards consisting of Shares shall be in the
form of issued and outstanding Shares that shall be registered in the name of
the Participant and held by the Committee, together with an irrevocable stock
power executed by the Participant in favor of the Committee or its designee,
pending the vesting or forfeiture of the Restricted Stock Award. The
certificates evidencing the Shares shall at all times prior to the applicable
Vesting Date bear the following legend:
The common stock evidenced hereby is subject to the terms of
an Award Agreement between Heritage Financial Group and [Name
of Participant] dated [Award Date] made pursuant to the terms
of the Heritage Financial Group 2006 Equity Incentive Plan,
copies of which are on file at the executive offices of
Heritage Financial Group, and may not be sold, encumbered,
hypothecated or otherwise transferred, except in accordance
with the terms of such Plan and Award Agreement.
or such other restrictive legend as the Committee, in its discretion, may
specify.
(c) Unless otherwise set forth in the Award Agreement, a Restricted
Stock Award by its terms shall not be transferable by the Participant other than
by will or by the laws of descent and distribution, and the Shares distributed
pursuant to such Award shall be distributable, during the lifetime of the
Participant, only to the Participant.
SECTION 7.2 VESTING DATE.
(a) The Vesting Date for each Restricted Stock Award shall be
determined by the Committee and specified in the Award Agreement.
(b) Unless otherwise determined by the Committee and specified in
the Award Agreement:
(i) if the Participant of a Restricted Stock Award terminates
Service prior to the Vesting Date for any reason other than death or Disability,
any unvested Shares or Share Units shall be forfeited without consideration;
(ii) if the Participant of a Restricted Stock Award terminates
Service prior to the Vesting Date on account of death or Disability, the Vesting
Date shall be accelerated to the date of termination of the Participant's
Service with the Company; and
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(iii) if a Change in Control occurs prior to the Vesting Date
of a Restricted Stock Award that is outstanding on the date of the Change in
Control, the Vesting Date shall be accelerated to the earliest date of the
Change in Control.
SECTION 7.3 DIVIDEND RIGHTS.
Unless otherwise set forth in the Award Agreement, any dividends or
distributions declared and paid with respect to Shares subject to a Restricted
Stock Award, whether or not in cash, or an equivalent amount in the case of a
Restricted Stock Award awarding Share Units, shall be paid to the Participant at
the same time they are paid to all other shareholders of the Company.
SECTION 7.4 VOTING RIGHTS.
Unless otherwise set forth in the Award Agreement, voting rights
appurtenant to the Shares subject to the Restricted Stock Award shall be
exercised by the Participant.
SECTION 7.5 DESIGNATION OF BENEFICIARY.
A Participant who has received a Restricted Stock Award may designate a
Beneficiary to receive any unvested Shares or Shares distributed in satisfaction
of any unvested Share Units that become vested on the date of the Participant's
death. Such designation (and any change or revocation of such designation) shall
be made in writing in the form and manner prescribed by the Committee. In the
event that the Beneficiary designated by a Participant dies prior to the
Participant, or in the event that no Beneficiary has been designated, any vested
Shares that become available for distribution on the Participant's death shall
be paid to the executor or administrator of the Participant's estate.
SECTION 7.6 MANNER OF DISTRIBUTION OF AWARDS.
The Company's obligation to deliver Shares with respect to a Restricted
Stock Award shall, if the Committee so requests, be conditioned upon the receipt
of a representation as to the investment intention of the Participant or
Beneficiary to whom such Shares are to be delivered, in such form as the
Committee shall determine to be necessary or advisable to comply with the
provisions of applicable federal, state or local law. It may be provided that
any such representation shall become inoperative upon a registration of the
Shares or upon the occurrence of any other event eliminating the necessity of
such representation. The Company shall not be required to deliver any Shares
under the Plan prior to (i) the admission of such Shares to listing on any stock
exchange or trading on any automated quotation system on which Shares may then
be listed or traded, or (ii) the completion of such registration or other
qualification under any state or federal law, rule or regulation as the
Committee shall determine to be necessary or advisable.
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ARTICLE VIII
SPECIAL TAX PROVISION
SECTION 8.1 TAX WITHHOLDING RIGHTS.
Where any Person is entitled to receive Shares, the Company shall have
the right to require such Person to pay to the Company the amount of any tax
which the Company is required to withhold with respect to such Shares, or, in
lieu thereof, to retain, or to sell without notice, a sufficient number of
Shares to cover the minimum amount required to be withheld.
ARTICLE IX
AMENDMENT AND TERMINATION
SECTION 9.1 TERMINATION
The Board may suspend or terminate the Plan in whole or in part at any
time prior to the tenth anniversary of the Effective Date by giving written
notice of such suspension or termination to the Committee. Unless sooner
terminated, the Plan shall terminate automatically on the tenth anniversary of
the Effective Date. In the event of any suspension or termination of the Plan,
all Awards previously granted under the Plan that are outstanding on the date of
such suspension or termination of the Plan shall remain outstanding and
exercisable for the period and on the terms and conditions set forth in the
Award Agreements evidencing such Awards.
SECTION 9.2 AMENDMENT.
The Board may amend or revise the Plan in whole or in part at any time;
provided, however, that, to the extent required to comply with Section 162(m) of
the Code or the corporate governance standards imposed under the listing or
trading requirements imposed by any national securities exchange or automated
quotation system on which the Company lists or seeks to list or trade Shares, no
such amendment or revision shall be effective if it amends a material term of
the Plan unless approved by the holders of a majority of the votes cast on a
proposal to approve such amendment or revision. To the extent OTS regulations
are changed subsequent to the Effective Date, the Board shall have the right but
not the obligation, to amend or revise the Plan without shareholder approval to
conform to the revised regulations.
SECTION 9.3 ADJUSTMENTS IN THE EVENT OF BUSINESS REORGANIZATION.
In the event any recapitalization, forward or reverse split,
reorganization, merger, consolidation, spin-off, combination, exchange of Shares
or other securities, stock dividend or other special and nonrecurring dividend
or distribution (whether in the form of cash, securities or other property),
liquidation, dissolution, or other similar corporate transaction or event,
affects the Shares such that an adjustment is appropriate in order to prevent
dilution or enlargement of the rights of Participants under the Plan, then the
Committee shall, in such manner as it may deem equitable, adjust any or all of:
(i) the number and kind of securities deemed to be available
thereafter for grants of Awards in the aggregate to all Participants;
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(ii) the number and kind of securities that may be delivered
or deliverable in respect of outstanding Awards; and
(iii) the Exercise Price of Options and Stock Appreciation
Rights.
In addition, the Committee is authorized to make adjustments in the
terms and conditions of, and the criteria included in, Awards (including,
without limitation, cancellation of Awards in exchange for the in-the-money
value, if any, of the vested portion thereof, or substitution of Awards using
stock of a successor or other entity) in recognition of unusual or nonrecurring
events (including, without limitation, events described in the preceding
sentence) affecting the Company or any Affiliate or the financial statements of
the Company or any Affiliate, or in response to changes in applicable laws,
regulations, or accounting principles.
ARTICLE X
MISCELLANEOUS
SECTION 10.1 STATUS AS AN EMPLOYEE BENEFIT PLAN.
This Plan is not intended to satisfy the requirements for qualification
under Section 401(a) of the Code or to satisfy the definitional requirements for
an "employee benefit plan" under Section 3(3) of the Employee Retirement Income
Security Act of 1974, as amended. It is intended to be a non-qualified incentive
compensation program that is exempt from the regulatory requirements of the
Employee Retirement Income Security Act of 1974, as amended. The Plan shall be
construed and administered so as to effectuate this intent.
SECTION 10.2 NO RIGHT TO CONTINUED EMPLOYMENT.
Neither the establishment of the Plan nor any provisions of the Plan
nor any action of the Board or Committee with respect to the Plan shall be held
or construed to confer upon any Participant any right to a continuation of his
or her position as a director, advisory director or employee of the Company. The
Company reserves the right to remove any participating member of the Board or
dismiss any Participant or otherwise deal with any Participant to the same
extent as though the Plan had not been adopted.
SECTION 10.3 CONSTRUCTION OF LANGUAGE.
Whenever appropriate in the Plan, words used in the singular may be
read in the plural, words used in the plural may be read in the singular, and
words importing the masculine gender may be read as referring equally to the
feminine or the neuter. Any reference to an Article or Section number shall
refer to an Article or Section of this Plan unless otherwise indicated.
SECTION 10.4 GOVERNING LAW.
The Plan shall be construed, administered and enforced according to the
laws of the State of Georgia without giving effect to the conflict of laws
principles thereof, except to the extent that such laws are preempted by federal
law. The federal and state courts located in the County or contiguous counties
in which the Company's headquarters are located shall have exclusive
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jurisdiction over any claim, action, complaint or lawsuit brought under the
terms of the Plan. By accepting any Award granted under this Plan, the
Participant, and any other person claiming any rights under the Plan, agrees to
submit himself, and any such legal action as he shall bring under the Plan, to
the sole jurisdiction of such courts for the adjudication and resolution of any
such disputes.
SECTION 10.5 HEADINGS.
The headings of Articles and Sections are included solely for
convenience of reference. If there is any conflict between such headings and the
text of the Plan, the text shall control.
SECTION 10.6 NON-ALIENATION OF BENEFITS.
The right to receive a benefit under the Plan shall not be subject in
any manner to anticipation, alienation or assignment, nor shall such right be
liable for or subject to debts, contracts, liabilities, engagements or torts.
SECTION 10.7 NOTICES.
Any communication required or permitted to be given under the Plan,
including any notice, direction, designation, comment, instruction, objection or
waiver, shall be in writing and shall be deemed to have been given at such time
as it is delivered personally or three (3) days after mailing if mailed, postage
prepaid, by registered or certified mail, return receipt requested, addressed to
such party at the address listed below, or at such other address as one such
party may by written notice specify to the other party:
(a) If to the Committee:
Heritage Financial Group
310 W. Oglethorpe Blvd.
Albany, GA 31705
Attention: Corporate Secretary
(b) If to a Participant, to such person's address as shown in the
Company's records.
SECTION 10.8 APPROVAL OF SHAREHOLDERS.
The Plan shall be subject to approval by the Company's shareholders
within twelve (12) months before or after the date the Board adopts the Plan.
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