EXHIBIT 10.7

 

FIRST BANK OF HENRY COUNTY

2000 STOCK INCENTIVE PLAN

 

--------------------------------------------------------------------------------

 

TABLE OF CONTENTS

 

 

 

PAGE

 

 

 

SECTION 1 DEFINITIONS

1

 

 

1.1

DEFINITIONS

1

 

 

 

SECTION 2 THE STOCK INCENTIVE PLAN

4

 

 

2.1

PURPOSE OF THE PLAN

4

2.2

STOCK SUBJECT TO THE PLAN

4

2.3

ADMINISTRATION OF THE PLAN

4

2.4

ELIGIBILITY AND LIMITS

5

 

 

 

SECTION 3 TERMS OF STOCK INCENTIVES

5

 

 

3.1

GENERAL TERMS AND CONDITIONS

5

3.2

TERMS AND CONDITIONS OF OPTIONS

6

(a)

Option Price

6

(b)

Option Term

7

(c)

Payment

7

(d)

Conditions to the Exercise of an Option

7

(e)

Termination of Incentive Stock Option Status

7

(f)

Special Provisions for Certain Substitute Options

8

3.3

TREATMENT OF AWARDS UPON TERMINATION OF SERVICE

8

 

 

 

SECTION 4 RESTRICTIONS ON STOCK

8

 

 

4.1

ESCROW OF SHARES

8

4.2

RESTRICTIONS ON TRANSFER

9

 

 

 

SECTION 5 GENERAL PROVISIONS

9

 

 

5.1

WITHHOLDING

9

5.2

CHANGES IN CAPITALIZATION; MERGER; LIQUIDATION

9

5.3

CASH AWARDS

10

5.4

COMPLIANCE WITH CODE

10

5.5

RIGHT TO TERMINATE SERVICE

10

5.6

RESTRICTIONS ON DELIVERY AND SALE OF SHARES; LEGENDS

10

5.7

NON-ALIENATION OF BENEFITS

11

5.8

TERMINATION AND AMENDMENT OF THE PLAN

11

5.9

STOCKHOLDER APPROVAL

11

5.10

CHOICE OF LAW

11

 

--------------------------------------------------------------------------------

 

FIRST BANK OF HENRY COUNTY

2000 STOCK INCENTIVE PLAN

 

SECTION 1  DEFINITIONS

 

1.1           Definitions.  Whenever used herein, the masculine pronoun shall be
deemed to include the feminine, and the singular to include the plural, unless
the context clearly indicates otherwise, and the following capitalized words and
phrases are used herein with the meaning thereafter ascribed:

 

(a)           “Bank” means First Bank of Henry County, a proposed state bank.

 

(b)           “Board of Directors” means the board of directors of the Bank.

 

(c)           “Cause” has the same meaning as provided in the employment
agreement between the Participant and the Bank or affiliate(s) on the date of
Termination of Service, or if no such definition or employment agreement exists,
“Cause” means conduct amounting to  (1) fraud or dishonesty against the Bank or
affiliate(s); (2) Participant’s willful misconduct, repeated refusal to follow
the reasonable directions of the Board of Directors or knowing violation of law
in the course of performance of the duties of Participant’s service with the
Bank or affiliate(s); (3) repeated absences from work without a reasonable
excuse; (4) repeated intoxication with alcohol or drugs while on the Bank’s or
affiliate(s)’ premises during regular business hours; (5) a conviction or plea
of guilty or nolo contendere to a felony or a crime involving dishonesty; or
(6) a breach or violation of the terms of any agreement to which Participant and
the Bank or affiliate(s) are party.

 

(d)           “Change in Control” means any one of the following events which
may occur after the date the Stock Incentive is granted:

 

(1)      the acquisition by any person or persons acting in concert of the then
outstanding voting securities of the Bank, if, after the transaction, the
acquiring person (or persons) owns, controls or holds with power to vote forty
percent (40%) or more of any class of voting securities of the Bank;

 

(2)      within any twelve-month period the persons who were directors of the
Bank immediately before the beginning of such twelve-month period (the
“Incumbent Directors”) shall cease to constitute at least a majority of the
Board of Directors; provided that any director who was not a director as of the
beginning of such twelve-month period shall be deemed to be an Incumbent
Director if that director were elected to the Board of Directors by, or on the
recommendation of or with the approval of, at least two-thirds of the directors
who then qualified as Incumbent Directors; and provided further that no director
whose initial assumption of office is in connection with an actual or threatened
election contest (as such terms are used in Rule 14a-11 of Regulation 14A
promulgated under the Securities Exchange Act of 1934) relating to the election
of directors shall be deemed to be an Incumbent Director;

 

--------------------------------------------------------------------------------

 

(3)      a reorganization, merger or consolidation, with respect to which
persons who were the stockholders of the Bank immediately prior to such
reorganization, merger or consolidation do not, immediately thereafter, own more
than fifty percent (50%) of the combined voting power entitled to vote in the
election of directors of the reorganized, merged or consolidated company’s then
outstanding voting securities; or

 

(4)      the sale, transfer or assignment of all or substantially all of the
assets of the Bank to any third party.

 

(e)           “Code” means the Internal Revenue Code of 1986, as amended.

 

(f)            “Committee” means the committee appointed by the Board of
Directors to administer the Plan pursuant to Plan Section 2.3.

 

(g)           “Disability” has the same meaning as provided in the long-term
disability plan or policy maintained or, if applicable, most recently
maintained, by the Bank or an affiliate for the Participant.  If no long-term
disability plan or policy was ever maintained on behalf of the Participant or,
if the determination of Disability relates to an Incentive Stock Option,
Disability shall mean that condition described in Code Section 22(e)(3), as
amended from time to time.  In the event of a dispute, the determination of
Disability shall be made by the Board of Directors and shall be supported by
advice of a physician competent in the area to which such Disability relates.

 

(h)           “Disposition” means any conveyance, sale, transfer, assignment,
pledge or hypothecation, whether outright or as security, inter vivos or
testamentary, with or without consideration, voluntary or involuntary.

 

(i)            “Fair Market Value” refers to the determination of value of a
share of Stock.  If the Stock is actively traded on any national securities
exchange or any Nasdaq quotation or market system, Fair Market Value shall mean
the closing price at which sales of Stock shall have been sold on the most
recent trading date immediately prior to the date of determination, as reported
by any such exchange or system selected by the Committee on which the shares of
Stock are then traded.  If the shares of Stock are not actively traded on any
such exchange or system, Fair Market Value shall mean the arithmetic mean of the
bid and asked prices for the shares of Stock on the most recent trading date
within a reasonable period prior to the determination date as reported by such
exchange or system.  If there are no bid and asked prices within a reasonable
period or if the shares of Stock are not traded on any exchange or system as of
the determination date, Fair Market Value shall mean the fair market value of a
share of Stock as determined by the Committee taking into account such facts and
circumstances deemed to be material by the Committee to the value of the Stock
in the hands of the Participant; provided that, for purposes of granting awards
other than Incentive Stock Options, Fair Market Value of a share of Stock may be
determined by the Committee by reference to the average market value determined
over a period certain or as of specified dates, to a tender offer price for the
shares of Stock (if settlement of an award is triggered by such an event) or to
any other reasonable measure of fair market value and provided further that, for
purposes of granting Incentive Stock Options, Fair Market Value of a share of
Stock shall be determined in

 

2

--------------------------------------------------------------------------------

 

accordance with the valuation principles described in the regulations
promulgated under Code Section 422.

 

(j)            “Incentive Stock Option” means an incentive stock option, as
defined in Code Section 422, described in Plan Section 3.2.

 

(k)           “Non-Qualified Stock Option” means a stock option, other than an
option qualifying as an Incentive Stock Option, described in Plan Section 3.2.

 

(l)            “Option” means a Non-Qualified Stock Option or an Incentive Stock
Option.

 

(m)          “Over 10% Owner” means an individual who at the time an Incentive
Stock Option is granted owns Stock possessing more than 10% of the total
combined voting power of the Bank or one of its Parents or Subsidiaries,
determined by applying the attribution rules of Code Section 424(d).

 

(n)           “Parent” means any corporation (other than the Bank) in an
unbroken chain of corporations ending with the Bank if, with respect to
Incentive Stock Options, at the time of granting of the Incentive Stock Option,
each of the corporations other than the Bank owns stock possessing fifty percent
(50%) or more of the total combined voting power of all classes of stock in one
of the other corporations in the chain.

 

(o)           “Participant” means an individual who receives a Stock Incentive
hereunder.

 

(p)           “Plan” means the First Bank of Henry County 2000 Stock Incentive
Plan.

 

(q)           “Stock” means the Bank’s common stock, $5.00 par value per share.

 

(r)            “Stock Incentive Agreement” means an agreement between the Bank
and a Participant or other documentation evidencing an award of a Stock
Incentive.

 

(s)           “Stock Incentives” means, collectively, Incentive Stock Options
and Non-Qualified Stock Options.

 

(t)            “Subsidiary” means any corporation (other than the Bank) in an
unbroken chain of corporations beginning with the Bank if, with respect to
Incentive Stock Options, at the time of the granting of the Incentive Stock
Option, each of the corporations other than the last corporation in the unbroken
chain owns stock possessing fifty percent (50%) or more of the total combined
voting power of all classes of stock in one of the other corporations in the
chain.

 

(u)           “Termination of Service” means the termination of the service
relationship, whether employment or otherwise, between a Participant and the
Bank and any affiliates, regardless of the fact that severance or similar
payments are made to the Participant for any reason, including, but not by way
of limitation, a termination by resignation, discharge,

 

3

--------------------------------------------------------------------------------

 

death, Disability or retirement.  The Committee shall, in its absolute
discretion, determine the effect of all matters and questions relating to a
Termination of Service, including, but not by way of limitation, the question of
whether a leave of absence constitutes a Termination of Service, or whether a
Termination of Service is for Cause.

 

SECTION 2  THE STOCK INCENTIVE PLAN

 

2.1           Purpose of the Plan.  The Plan is intended to (a) provide
incentives to officers, employees, directors and organizers of the Bank and its
affiliates to stimulate their efforts toward the continued success of the Bank
and to operate and manage the business in a manner that will provide for the
long-term growth and profitability of the Bank; (b) encourage stock ownership by
officers, employees, directors and organizers by providing them with a means to
acquire a proprietary interest in the Bank by acquiring shares of Stock; and (c)
provide a means of obtaining and rewarding key personnel.

 

2.2           Stock Subject to the Plan.  Subject to adjustment in accordance
with Section 5.2,   100,000 shares of Stock (the “Maximum Plan Shares”) are
hereby reserved exclusively for issuance pursuant to Stock Incentives.  At such
time as the Bank becomes subject to Section 16 of the Exchange Act, at no time
shall the Bank have outstanding Stock Incentives subject to Section 16 of the
Exchange Act and shares of Stock issued in respect of Stock Incentives in excess
of the Maximum Plan Shares.  The shares of Stock attributable to the nonvested,
unpaid, unexercised, unconverted or otherwise unsettled portion of any Stock
Incentive that is forfeited or cancelled or expires or terminates for any reason
without becoming vested, paid, exercised, converted or otherwise settled in full
will again be available for purposes of the Plan.

 

2.3           Administration of the Plan.  The Plan shall be administered by the
Committee.  The members of the Committee shall consist solely of at least two
members of the Board of Directors.  During those periods that the Bank is
subject to the provisions of Section 16 of the Securities Exchange Act of 1934,
the Board of Directors shall consider the advisability of whether each Committee
member shall qualify as an “outside director” as defined in Treasury Regulations
§1.162-27(e) as promulgated by the Internal Revenue Service and a “non-employee
director” as defined in Rule 16b-3(b)(3) as promulgated under the Exchange Act. 
The Committee shall have full authority in its discretion to determine the
officers, employees, directors and organizers of the Bank or its affiliates to
whom Stock Incentives shall be granted and the terms and provisions of Stock
Incentives subject to the Plan.  Subject to the provisions of the Plan, the
Committee shall have full and conclusive authority to interpret the Plan; to
prescribe, amend and rescind rules and regulations relating to the Plan; to
determine the terms and provisions of the respective Stock Incentive Agreements
and to make all other determinations necessary or advisable for the proper
administration of the Plan.  The Committee’s determinations under the Plan need
not be uniform and may be made by it selectively among persons who receive, or
are eligible to receive, awards under the Plan (whether or not such persons are
similarly situated).  The Committee’s decisions shall be final and binding on
all Participants.  Each member of the Committee shall serve at the discretion of
the Board of Directors and the Board of Directors may from time to time remove
members from or add members to the Committee.  Vacancies on the Committee shall
be filled by the Board of Directors.

 

4

--------------------------------------------------------------------------------

 

The Committee shall select one of its members as chairman and shall hold
meetings at the times and in the places as it may deem advisable.  Acts approved
by a majority of the Committee in a meeting at which a quorum is present, or
acts reduced to or approved in writing by a majority of the members of the
Committee, shall be the valid acts of the Committee.

 

2.4           Eligibility and Limits.  Stock Incentives may be granted only to
officers, employees, directors and organizers of the Bank or any affiliate;
provided, however, that an Incentive Stock Option may only be granted to an
employee of the Bank or any Subsidiary.  In the case of Incentive Stock Options,
the aggregate Fair Market Value (determined as of the date an Incentive Stock
Option is granted) of stock with respect to which stock options intended to meet
the requirements of Code Section 422 become exercisable for the first time by an
individual during any calendar year under all plans of the Bank and its Parents
and Subsidiaries shall not exceed $100,000; provided further, that if the
limitation is exceeded, the Incentive Stock Option(s) which cause the limitation
to be exceeded shall be treated as Non-Qualified Stock Option(s).  To the extent
required under Code Section 162(m) of the Code and the regulations thereunder
for compensation to be treated as qualified performance based compensation, the
maximum number of shares of Stock with respect to which Options may be granted
during any calendar year to any individual may not exceed 50,000, subject to
adjustment in accordance with Section 5.2.  In applying this limitation, if an
Option, or any portion thereof, granted to an employee is cancelled or repriced
for any reason, then the shares of Stock attributable to such cancellation or
repricing either shall continue to be counted as an outstanding grant or shall
be counted as a new grant, as the case may be, against the affected employee’s
50,000 limit for the appropriate calendar year.

 

SECTION 3  TERMS OF STOCK INCENTIVES

 

3.1           General Terms and Conditions.

 

(a)           The number of shares of Stock as to which a Stock Incentive shall
be granted shall be determined by the Committee in its sole discretion, subject
to the provisions of Section 2.2, as to the total number of shares available for
grants under the Plan.  If a Stock Incentive Agreement so provides, a
Participant may be granted a new Option to purchase a number of shares of Stock
equal to the number of previously owned shares of Stock tendered in payment of
the Exercise Price (as defined below) for each share of Stock purchased pursuant
to the terms of the Stock Incentive Agreement.

 

(b)           Each Stock Incentive shall be evidenced by a Stock Incentive
Agreement in such form and containing such terms, conditions and restrictions as
the Committee may determine is appropriate.  Each Stock Incentive Agreement
shall be subject to the terms of the Plan and any provision in a Stock Incentive
Agreement  that is inconsistent with the Plan shall be null and void.

 

(c)           The date a Stock Incentive is granted shall be the date on which
the Committee has approved the terms of, and satisfaction of any conditions
applicable to, the grant of the Stock Incentive and has determined the recipient
of the Stock Incentive and the number of

 

5

--------------------------------------------------------------------------------

 

shares covered by the Stock Incentive and has taken all such other action
necessary to complete the grant of the Stock Incentive.

 

(d)           The Committee may provide in any Stock Incentive Agreement (or
subsequent to the award of a Stock Incentive but prior to its expiration or
cancellation, as the case may be) that, in the event of a Change in Control, the
Stock Incentive shall or may be cashed out on the basis of any price not greater
than the highest price paid for a share of Stock in any transaction reported by
any market or system selected by the Committee on which the shares of Stock are
then actively traded during a specified period immediately preceding or
including the date of the Change in Control or offered for a share of Stock in
any tender offer occurring during a specified period immediately preceding or
including the date the tender offer commences; provided that, in no case shall
any such specified period exceed three (3) months (the “Change in Control
Price”).  For purposes of this Subsection, any Option shall be cashed out on the
basis of the excess, if any, of the Change in Control Price over the Exercise
Price to the extent the Option is then exercisable in accordance with the terms
of the Option and the Plan.

 

(e)           Any Stock Incentive may be granted in connection with all or any
portion of a previously or contemporaneously granted Stock Incentive.  Exercise
or vesting of a Stock Incentive granted in connection with another Stock
Incentive may result in a pro rata surrender or cancellation of any related
Stock Incentive, as specified in the applicable Stock Incentive Agreement.

 

(f)            Stock Incentives shall not be transferable or assignable except
by will or by the laws of descent and distribution and shall be exercisable,
during the Participant’s lifetime, only by the Participant; in the event of the
Disability of the Participant, by the legal representative of the Participant;
or in the event of the death of the Participant, by the personal representative
of the Participant’s estate or if no personal representative has been appointed,
by the successor in interest determined under the Participant’s will.

 

3.2           Terms and Conditions of Options.   Each Option granted under the
Plan shall be evidenced by a Stock Incentive Agreement.  At the time any Option
is granted, the Committee shall determine whether the Option is to be an
Incentive Stock Option or a Non-Qualified Stock Option, and the Option shall be
clearly identified as to its status as an Incentive Stock Option or a
Non-Qualified Stock Option.  At the time any Incentive Stock Option is
exercised, the Bank shall be entitled to place a legend on the certificates
representing the shares of Stock purchased pursuant to the Option to clearly
identify them as shares of Stock purchased upon exercise of an Incentive Stock
Option.  An Incentive Stock Option may only be granted within ten (10) years
from the earlier of the date the Plan is adopted by the Board of Directors or
approved by the Bank’s stockholders.  All Options shall provide that the primary
Federal regulator of the Bank may require a Participant to exercise an Option in
whole or in part if the capital of the Bank falls below minimum requirements and
shall further provide that, if the Participant fails to so exercise any such
portion of the Option, that portion of the Option shall be forfeited.

 

(a)           Option Price .   Subject to adjustment in accordance with
Section 5.2 and the other provisions of this Section 3.2, the exercise price
(the “Exercise Price”) per share of Stock purchasable under any Option shall be
as set forth in the applicable Stock Incentive

 

6

--------------------------------------------------------------------------------

 

Agreement.  With respect to each grant of an Incentive Stock Option to a
Participant who is not an Over 10% Owner, the Exercise Price per share shall not
be less than the Fair Market Value on the date the Option is granted.  With
respect to each grant of an Incentive Stock Option to a Participant who is an
Over 10% Owner, the Exercise Price shall not be less than 110% of the Fair
Market Value on the date the Option is granted.  With respect to each grant of a
Non-Qualified Stock Option, the Exercise Price per share shall be no less than
the Fair Market Value.

 

(b)           Option Term .  The term of an Option shall be as specified in the
applicable Stock Incentive Agreement; provided, however that any Option granted
to a Participant shall not be exercisable after the expiration of ten (10) years
after the date the Option is granted and any Incentive Stock Option granted to
an Over 10% Owner shall not be exercisable after the expiration of five (5)
years after the date the Option is granted.

 

(c)           Payment.   Payment for all shares of Stock purchased pursuant to
the exercise of an Option shall be made in any form or manner authorized by the
Committee in the Stock Incentive Agreement or by amendment thereto, including,
but not limited to, cash or, if the Stock Incentive Agreement provides, (1) by
delivery to the Bank of a number of shares of Stock which have been owned by the
holder for at least six (6) months prior to the date of exercise having an
aggregate Fair Market Value of not less than the product of the Exercise Price
multiplied by the number of shares the Participant intends to purchase upon
exercise of the Option on the date of delivery; (2) in a cashless exercise
through a broker; or (3) by having a number of shares of Stock withheld, the
Fair Market Value of which as of the date of exercise is sufficient to satisfy
the Exercise Price.   In its discretion, the Committee also may authorize (at
the time an Option is granted or thereafter) Bank financing to assist the
Participant as to payment of the Exercise Price on such terms as may be offered
by the Committee in its discretion.  Payment shall be made at the time that the
Option or any part thereof is exercised, and no shares shall be issued or
delivered upon exercise of an Option until full payment has been made by the
Participant.  The holder of an Option, as such, shall have none of the rights of
a stockholder.

 

(d)           Conditions to the Exercise of an Option.  Each Option granted
under the Plan shall be exercisable by whom, at such time or times, or upon the
occurrence of such event or events, and in such amounts, as the Committee shall
specify in the Stock Incentive Agreement; provided, however, that subsequent to
the grant of an Option, the Committee, at any time before complete termination
of such Option, may accelerate the time or times at which such Option may be
exercised in whole or in part, including, without limitation, upon a Change in
Control and may permit the Participant or any other designated person to
exercise the Option, or any portion thereof, for all or part of the remaining
Option term notwithstanding any provision of the Stock Incentive Agreement to
the contrary.  Notwithstanding the foregoing, no Option granted prior to the
third anniversary of the date the Bank opens for business shall contain
provisions which allow the Option to become vested and exercisable at a rate
faster than in equal, annual one-third increments commencing with the first
anniversary of the date the Bank opens for business.

 

(e)           Termination of Incentive Stock Option Status.  With respect to an
Incentive Stock Option, in the event of the termination of employment of a
Participant, the Option or portion thereof held by the Participant which is
unexercised shall expire, terminate and become unexercisable no later than three
(3) months after the date of termination of employment;

 

7

--------------------------------------------------------------------------------

 

provided, however, that in the case of a holder whose termination of employment
is due to death or Disability, up to one (1) year may be substituted for such
three (3) month period.  For purposes of this Subsection (e), termination of
employment of the Participant shall not be deemed to have occurred if the
Participant is employed by another corporation (or a parent or subsidiary
corporation of such other corporation) which has assumed the Incentive Stock
Option of the Participant in a transaction to which Code Section 424(a) is
applicable.

 

(f)            Special Provisions for Certain Substitute Options. 
Notwithstanding anything to the contrary in this Section 3.2, any Option issued
in substitution for an option previously issued by another entity, which
substitution occurs in connection with a transaction to which Code
Section 424(a) is applicable, may provide for an exercise price computed in
accordance with such Code Section and the regulations thereunder and may contain
such other terms and conditions as the Committee may prescribe to cause such
substitute Option to contain as nearly as possible the same terms and conditions
(including the applicable vesting and termination provisions) as those contained
in the previously issued option being replaced thereby.

 

3.3           Treatment of Awards Upon Termination of Service.  Except as
otherwise provided by Plan Section 3.2(e), any award under this Plan to a
Participant who suffers a Termination of Service may be cancelled, accelerated,
paid or continued, as provided in the Stock Incentive Agreement or, in the
absence of such provision, as the Committee may determine.  The portion of any
award exercisable in the event of continuation or the amount of any payment due
under a continued award may be adjusted by the Committee to reflect the
Participant’s period of service from the date of grant through the date of the
Participant’s Termination of Service or such other factors as the Committee
determines are relevant to its decision to continue the award.

 

SECTION 4  RESTRICTIONS ON STOCK

 

4.1           Escrow of Shares.  Any certificates representing the shares of
Stock issued under the Plan shall be issued in the Participant’s name, but, if
the Stock Incentive Agreement so provides, the shares of Stock shall be held by
a custodian designated by the Committee (the “Custodian”).  Each applicable
Stock Incentive Agreement providing for transfer of shares of Stock to the
Custodian shall appoint the Custodian as the attorney-in-fact for the
Participant for the term specified in the applicable Stock Incentive Agreement,
with full power and authority in the Participant’s name, place and stead to
transfer, assign and convey to the Bank any shares of Stock held by the
Custodian for such Participant, if the Participant forfeits the shares under the
terms of the applicable Stock Incentive Agreement.  During the period that the
Custodian holds the shares subject to this Section, the Participant shall be
entitled to all rights, except as provided in the applicable Stock Incentive
Agreement, applicable to shares of Stock not so held.  Any dividends declared on
shares of Stock held by the Custodian shall, as the Committee may provide in the
applicable Stock Incentive Agreement, be paid directly to the Participant or, in
the alternative, be retained by the Custodian until the expiration of the term
specified in the applicable Stock Incentive Agreement and shall then be
delivered, together with any proceeds, with the shares of Stock to the
Participant or to the Bank, as applicable.

 

8

--------------------------------------------------------------------------------

 

4.2           Restrictions on Transfer.  The Participant shall not have the
right to make or permit to exist any Disposition of the shares of Stock issued
pursuant to the Plan except as provided in the Plan or the applicable Stock
Incentive Agreement.  Any Disposition of the shares of Stock issued under the
Plan by the Participant not made in accordance with the Plan or the applicable
Stock Incentive Agreement shall be void.  The Bank shall not recognize, or have
the duty to recognize, any Disposition not made in accordance with the Plan and
the applicable Stock Incentive Agreement, and the shares so transferred shall
continue to be bound by the Plan and the applicable Stock Incentive Agreement.

 

SECTION 5  GENERAL PROVISIONS

 

5.1           Withholding.  The Bank shall deduct from all cash distributions
under the Plan any taxes required to be withheld by federal, state or local
government.  Whenever the Bank proposes or is required to issue or transfer
shares of Stock under the Plan, the Bank shall have the right to require the
recipient to remit to the Bank an amount sufficient to satisfy any federal,
state and local withholding tax requirements prior to the delivery of any
certificate or certificates for such shares.  A Participant may pay the
withholding tax in cash, by tendering shares of Stock which have been owned by
the holder for at least six (6) months prior to the date of exercise or, if the
applicable Stock Incentive Agreement provides, a Participant may elect to have
the number of shares of Stock he is to receive reduced by the smallest number of
whole shares of Stock which, when multiplied by the Fair Market Value of the
shares of Stock determined as of the Tax Date (defined below), is sufficient to
satisfy federal, state and local, if any, withholding taxes arising from
exercise or payment of a Stock Incentive (a “Withholding Election”).  A
Participant may make a Withholding Election only if both of the following
conditions are met:

 

(a)           The Withholding Election must be made on or prior to the date on
which the amount of tax required to be withheld is determined (the “Tax Date”)
by executing and delivering to the Bank a properly completed notice of
Withholding Election as prescribed by the Committee; and

 

(b)           Any Withholding Election made will be irrevocable; however, the
Committee may, in its sole discretion, disapprove and give no effect to the
Withholding Election.

 

5.2           Changes in Capitalization; Merger; Liquidation.

 

(a)            The number of shares of Stock reserved for the grant of Options,
the maximum number of shares of Stock for which Options may be granted to any
individual during any calendar year, the number of shares of Stock reserved for
issuance upon the exercise of each outstanding Option, and the Exercise Price of
each outstanding Option shall be proportionately adjusted for any increase or
decrease in the number of issued shares of Stock resulting from a subdivision or
combination of shares or the payment of an ordinary stock dividend in shares of
Stock to holders of outstanding shares of Stock or any other increase or
decrease in the number of shares of Stock outstanding effected without receipt
of consideration by the Bank.

 

(b)           In the event of any merger, consolidation, extraordinary dividend
(including a spin-off), reorganization or other change in the corporate
structure of the Bank or its

 

9

--------------------------------------------------------------------------------

 

Stock or tender offer for shares of Stock, the Committee, in its sole
discretion, may make such adjustments with respect to awards and take such other
action as it deems necessary or appropriate to reflect or in anticipation of
such merger, consolidation, extraordinary dividend (including a spin-off),
reorganization, other change in corporate structure or tender offer, including,
without limitation, the assumption of other awards, the substitution of new
awards, the termination or adjustment of outstanding awards (with or without the
payment of any consideration), the acceleration of awards or the removal of
restrictions on outstanding awards, all as may be provided in the applicable
Stock Incentive Agreement or, if not expressly addressed therein, as the
Committee subsequently may determine in the event of any such merger,
consolidation, extraordinary dividend (including a spin-off), reorganization or
other change in the corporate structure of the Bank or its Stock or tender offer
for shares of Stock.  The Committee’s general authority under this Section 5.2
is limited by and subject to all other express provisions of the Plan.  Any
adjustment pursuant to this Section 5.2 may provide, in the Committee’s
discretion, for the elimination without payment therefor of any fractional
shares that might otherwise become subject to any Stock Incentive.

 

(c)           The existence of the Plan and the Stock Incentives granted
pursuant to the Plan shall not affect in any way the right or power of the Bank
to make or authorize any adjustment, reclassification, reorganization or other
change in its capital or business structure, any merger or consolidation of the
Bank, any issue of debt or equity securities having preferences or priorities as
to the Stock or the rights thereof, the dissolution or liquidation of the Bank,
any sale or transfer of all or any part of its business or assets, or any other
corporate act or proceeding.

 

5.3           Cash Awards.  The Committee may, at any time and in its
discretion, grant to any holder of a Stock Incentive the right to receive, at
such times and in such amounts as determined by the Committee in its discretion,
a cash amount which is intended to reimburse such person for all or a portion of
the federal, state and local income taxes imposed upon such person as a
consequence of the receipt of the Stock Incentive or the exercise of rights
thereunder.

 

5.4           Compliance with Code.  All Incentive Stock Options to be granted
hereunder are intended to comply with Code Section 422, and all provisions of
the Plan and all Incentive Stock Options granted hereunder shall be construed in
such manner as to effectuate that intent.

 

5.5           Right to Terminate Service.  Nothing in the Plan or in any Stock
Incentive Agreement shall confer upon any Participant the right to continue as
an officer, employee, director or organizer of the Bank or affect the right of
the Bank to terminate the Participant’s service at any time.

 

5.6           Restrictions on Delivery and Sale of Shares; Legends.  Each Stock
Incentive is subject to the condition that if at any time the Committee, in its
discretion, shall determine that the listing, registration or qualification of
the shares covered by such Stock Incentive upon any securities exchange or under
any state or federal law is necessary or desirable as a condition of or in
connection with the granting of such Stock Incentive or the purchase or delivery
of shares thereunder, the delivery of any or all shares pursuant to such Stock
Incentive may be withheld unless and until such listing, registration or
qualification shall have been effected.  If a

 

10

--------------------------------------------------------------------------------

 

registration statement is not in effect under the Securities Act of 1933 or any
applicable state securities laws with respect to the shares of Stock purchasable
or otherwise deliverable under Stock Incentives then outstanding, the Committee
may require, as a condition of exercise of any Option or as a condition to any
other delivery of Stock pursuant to a Stock Incentive, that the Participant or
other recipient of a Stock Incentive represent, in writing, that the shares
received pursuant to the Stock Incentive are being acquired for investment and
not with a view to distribution and agree that the shares will not be disposed
of except pursuant to an effective registration statement, unless the Bank shall
have received an opinion of counsel that such disposition is exempt from such
requirement under the Securities Act of 1933 and any applicable state securities
laws.  The Bank may include on certificates representing shares delivered
pursuant to a Stock Incentive such legends referring to the foregoing
representations or restrictions or any other applicable restrictions on resale
as the Bank, in its discretion, shall deem appropriate.

 

5.7           Non-alienation of Benefits.  Other than as specifically provided
with regard to the death of a Participant, no benefit under the Plan shall be
subject in any manner to anticipation, alienation, sale, transfer, assignment,
pledge, encumbrance or charge; and any attempt to do so shall be void.  No such
benefit shall, prior to receipt by the Participant, be in any manner liable for
or subject to the debts, contracts, liabilities, engagements or torts of the
Participant.

 

5.8           Termination and Amendment of the Plan.  The Board of Directors at
any time may amend or terminate the Plan without stockholder approval; provided,
however, that the Board of Directors may condition any amendment on the approval
of stockholders of the Bank if such approval is necessary or advisable with
respect to tax, securities or other applicable laws.  No such termination or
amendment without the consent of the holder of a Stock Incentive shall adversely
affect the rights of the Participant under such Stock Incentive.

 

5.9           Stockholder Approval.   The Plan must be submitted to the
stockholders of the Bank for their approval within twelve (12) months before or
after the adoption of the Plan by the Board of Directors.  If such approval is
not obtained, any Stock Incentive granted hereunder will be void.

 

5.10         Choice of Law.  The laws of the State of Georgia shall govern the
Plan, to the extent not preempted by federal law.

 

11

--------------------------------------------------------------------------------

 

IN WITNESS WHEREOF, the Bank has caused this Plan to be executed as of this
      day of                                 , 2000.

 

 

 

FIRST BANK OF HENRY COUNTY

 

 

 

By:

 

 

 

 

Title:

 

 

 

 

ATTEST:

 

 

 

 

 

 

Secretary

 

 

 

[SEAL]

 

 

12

--------------------------------------------------------------------------------