Document:

EXHIBIT 10.2

HERITAGE FINANCIAL GROUP

DEFERRED COMPENSATION AND EXCESS/MATCHING CONTRIBUTION PLAN

EFFECTIVE APRIL 1, 2002

Purpose

           The purpose of the Plan is to provide specified benefits to a select group of employees who
contribute materially to the continued growth, development and future business success of Heritage
Financial Group, a federally chartered corporation and any of its subsidiaries that sponsor the Plan. The
Plan shall be unfunded for tax purposes and for purposes of Title I of ERISA.

ARTICLE I

Definitions

           For purposes of' the Plan, unless otherwise clearly apparent from the context, the following
phrases or terms shall have the following indicated meanings:

           "Account Balance" shall mean, with respect to a Participant, a credit on the records of the
Employer equal to the Deferral Account balance, the Matching Contribution Account balance and the
Excess Contribution Account balance. The Account Balance, and each other specified account balance,
shall be a bookkeeping entry only and shall be utilized solely as a device for the measurement and
determination of the amounts to be paid to a Participant, or his designated Beneficiary, pursuant to the
Plan.

           "Annual Bonus" shall mean any cash compensation, in addition to Base Annual Salary, relating to
services performed during any calendar year, whether or not paid in such calendar year or included on the
Federal Income Tax Form W-2 for such calendar year, payable to a Participant as an Employee under any
Employer's cash bonus and cash incentive plans or arrangements.

           "AnnualDeferral Amount" shall mean that portion of a Participant's Base Annual Salary and
Annual Bonus that a Participant elects to have, and is deferred, in accordance with Article 3, for any one
Plan Year. In the event of a Participant's Disability (if deferrals cease in accordance with Section 6.1) or
Termination of Employment prior to the end of a Plan Year, such year's Annual Deferral Amount shall be
the actual amount withheld prior to such event.

           "Base Annual Salary" shall mean the annual cash compensation relating to services performed by
a Participant during any calendar year, whether or not paid in such calendar year or included on the
Federal Income Tax Form W-2 for such calendar year, excluding bonuses, commissions, overtime, fringe
benefits, stock options, other stock based compensation, relocation expenses, incentive payments, non-monetary awards, and other fees, automobile and other allowances paid to a Participant for employment
services rendered (whether or not such allowances are included in the Employee's gross income). Base
Annual Salary shall be calculated before reduction for compensation voluntarily deferred or contributed
by the Participant pursuant to all Qualified Plans and non-qualified plans of any Employer and shall be
calculated to include amounts not otherwise included in the Participant's gross income under Code
Sections 125, 402(e)(3), 402(h), or 403(b) pursuant

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to plans established by any Employer; provided, however, that all such amounts will be included in
compensation only to the extent that, had there been no such plan, the amount would have been payable
in cash to the Participant.

           "Beneficiary" shall mean one or more persons, estates or other entities, designated in accordance
with Article 7, that are entitled to receive benefits under the Plan upon the death of a Participant.

           "Beneficiary Designation Form" shall mean the form established from time to time by the
Committee that a Participant completes, signs and returns to the Employer or the Committee to designate
one or more Beneficiaries.

           "Board" shall mean the board of directors of the Company.

           "Change in Control" shall mean the first to occur of any of the following events:

                      (a)           An acquisition of control of Heritage, MHC (the "Parent") (whether in mutual or
stock form), the Company or Heritage Bank of the South (the "Bank") within the meaning of the Home
Owners' Loan Act of 1933 and 12 C.F.R. Part 574.4(a) as in effect on the date hereof that is not subject
to rebuttal;

                      (b)           Any event that would be required to be reported in response to Item 1 of the
current report on Form 8-K, as in effect on the date hereof, pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934 (the "Exchange Act") if the Exchange Act were applicable to the
Parent, the Company or the Bank;

                      (c)           Any "person" (as that term is used in Section 13 and 14(d)(2) of the Exchange
Act) becomes the beneficial owner (as that term is used in Section 13(d) of the Exchange Act), directly or
indirectly, of 25% or more of the Parent's, the Company's or the Bank's outstanding securities entitled to
vote in the election of directors, excluding beneficial ownership of the Company or the Bank by the
Parent and beneficial ownership of the Bank by the Company;

                      (d)           Individuals who are members of the Board or the board of directors of the Parent
or the Bank on the date hereof (each the "Incumbent Board") cease for any reason to constitute at least a
majority thereof, provided that any person becoming a member of the Board or the board of directors of
the Parent or the Bank subsequent to the date hereof whose election was approved by a vote of at least
three-quarters of the members comprising the Incumbent Board, or whose nomination for election by the
Parent's, the Company's or the Bank's stockholders (or members in the case of the Parent in mutual form)
was approved by the nominating committee serving under the Incumbent Board shall be considered a
member of the incumbent Board;

                      (e)           The sale of all or substantially all of the assets of the Parent, the Company or the
Bank, excluding transfers to entities that are within a "controlled group of corporations" (as defined in
Code Section 1563) in which the Parent is the parent corporation; or

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                      (f)           A reorganization, merger, consolidation or similar transaction involving the
Parent, the Company or the Bank in which either the Parent, the Company or the Bank is not the resulting
entity or the Parent, the Company or the Bank is the resulting entity but the stockholders of such entity
immediately prior to such transaction do not own at least 60% of the voting securities of such entity
immediately following the completion of such transaction.

           The term "Change in Control" does not include an acquisition of securities by an employee benefit
plan of the Parent, the Company or the Bank or an acquisition of securities of the Parent, the Company or
the Bank in consideration for a contribution of capital to the Parent, the Company or the Bank.

           "Claimant" shall have the meaning set forth in Section 12.1.

           "Code" shall mean the Internal Revenue Code 1986, as it may be amended from time to time.

           "Committee" shall mean the committee described in Article 10.

           "Company" shall mean Heritage Financial Group, a Federally-chartered corporation, and any
successor to all or substantially all of the Company's assets or business.

           "Deduction Limitation" shall mean the following described limitation on a benefit that may
otherwise be distributable pursuant to the provisions of the Plan. Except as otherwise provided, this
limitation shall be applied to all distributions that are "subject to the Deduction Limitation" under the
Plan.  If an Employer determines in good faith prior to a Change in Control that there is a reasonable
likelihood that any compensation paid to a Participant for a taxable year of the Employer would not be
deductible by the Employer solely by reason of the limitation under Code Section 162(m), then to the
extent deemed necessary by the Employer to ensure that the entire amount of any distribution to the
Participant pursuant to the Plan prior the Change in Control is deductible, the Employer may defer all or
any portion of a distribution under the Plan. Any amounts deferred pursuant to this limitation shall
continue to be credited/debited with additional amounts in accordance with Section 3.8 below, even if
such amount is being paid out in installments. The amounts so deferred and amounts credited thereon
shall be distributed to the Participant or his Beneficiary (in the event of the Participant's death) at the
earliest possible date, as determined by the Employer in good faith, on which the deductibility of
compensation paid or payable to the Participant for the taxable year of the Employer during which the
distribution is made will not be limited by Section 162(m), or if earlier, the effective date of a Change in
Control. Notwithstanding anything to the contrary in the Plan the Deduction Limitation shall not apply to
any distributions made after a Change in Control.

           "Deferral Account" shall mean (i) a sum of all of a Participant's Annual Deferral Amounts, (ii)
amounts credited or debited thereon in accordance with the provisions of the Plan, less (iii) all
distributions made to the Participant or his Beneficiary pursuant to the Plan that relate to his Deferral
Account.

           "Disability" shall mean a period of disability during which a Participant qualifies for permanent
disability benefits under the Participant's Employer's long-term disability plan, or, if a Participant does
not participate in such a plan, a period of disability during which the

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Participant would have qualified for permanent disability benefits under such a plan had the Participant
been a participant in such a plan, as determined in the sole discretion of the Committee. If the
Participant's Employer does not sponsor such a plan, or discontinues to sponsor such a plan, Disability
shall be determined by the Committee in its sole discretion.

           "Disability Benefit" shall mean the benefit set forth in Section 6.2.

           "Election Form" shall mean the form established from time to time by the Committee that a
Participant completes, signs and returns to the Committee to make his election of the Annual Deferral
Amount for each Plan Year under the Plan.

           "Employee" shall mean a person who is classified as an employee of any Employer.

           "Employer(s)" shall mean the Company, the Bank and any other subsidiaries of the Company that
have been selected by the Board to participate in the Plan and have adopted the Plan as a sponsor.

           "ERISA" shall mean the Employee Retirement Income Security Act of 1974, as it may be
amended from time to time.

           "Excess Contribution Account" shall mean (i) a sum of all of a Participant's Excess Contribution
Amounts, (ii) amounts credited or debited thereon in accordance with the provisions of the Plan, less (iii)
all distributions made to the Participant or his Beneficiary pursuant to the Plan that relate to his Excess
Contribution Account.

           "Excess Contribution Amount" shall equal to the difference between (a) and (b) where:

                      (a)           is the amount of contributions that would have been allocated for the Plan Year
on behalf of the Participant under all Qualified Plans, if the limitations imposed on such contributions for
the Plan Year by Code Sections 401 (a)( 17), 415, 402(g) and 401(k) and 401(m) (determined after taking
into account any corrective actions taken by the Employers with respect to these Code Sections) were not
applicable; and

                      (b)           is the amount of contributions made under all Qualified Plans by the Employer(s)
on behalf of the Participant, the Matching Contribution, and the amounts contributed by the Participant to
all Qualified Plans (other than nondeductible voluntary contributions), in each case for such Plan Year.

           "Matching Contribution" shall mean the amount of matching contribution made on behalf of a
Participant pursuant to Section 3.2 hereof.

           "Matching Contribution Account" shall mean (i) a sum of all of a Participant's Matching
Contributions, (ii) amounts credited or debited thereon in accordance with the provisions of the Plan, less
(iii) all distributions made to the Participant or his Beneficiary pursuant to the Plan that relate to his
Matching Contribution Account.

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           "Monthly Installment Method" shall mean a monthly installment payment over the number of
months selected by the Participant in accordance with the Plan, calculated as follows: The Account
Balance of the Participant shall be calculated as of the close of business three business days prior to the
last business day of the month. The monthly installment shall be calculated by multiplying this balance
by a fraction, the numerator of which is one, and the denominator of which is the remaining number of
monthly payments due the Participant. By way of example, if the Participant receives benefits under a
60-month Monthly Installment Method, the payment shall be 1/60 of the Account Balance, calculated as
described in this definition. The following month, the payment shall be 1/59 of the Account Balance,
calculated as described in this definition. Each monthly installment shall be paid on or as soon as
practicable after the last business day of the applicable month.

           "Participant" shall mean any Employee (i) who is selected to participate in the Plan, (ii) who signs
a Plan Agreement and an Election Form and Beneficiary Designation Form and (iii) whose signed Plan
Agreement, Election Form and Beneficiary Designation Form are accepted by the Employer or the
Committee. A spouse or former spouse of a Participant shall not be treated as a Participant in the Plan or
have an Account Balance under the Plan, even if he or she has an interest in the Participant's benefits
under the Plan as a result of applicable law or property settlements resulting from legal separation or
divorce.

           "Plan" shall mean this Deferred Compensation and Excess/Matching Contribution Plan, which
shall be evidenced by this instrument and by each Plan Agreement, as they may be amended from time to
time.

           "Plan Agreement" shall mean a written agreement, as may be amended from time to time, which is
entered into by and between an Employer and a Participant. Each Plan Agreement executed by a
Participant and the Participant's Employer shall provide for the entire benefit to which such Participant is
entitled under the Plan; should there be more than one Plan Agreement, the Plan Agreement bearing the
latest date of acceptance by the Employer shall supersede all previous Plan Agreements in their entirety
and shall govern such entitlement. The terms of any Plan Agreement may be different for any Participant,
and any Plan Agreement may provide some but not all of the benefits set forth in the Plan.

           "PlanYear" shall mean a period beginning on January 1 of each calendar year and continuing
through December 31 of such calendar year.

           "Qualified Plan" shall mean each plan that meets the qualification requirements of Code Section
401(a) that is maintained by an Employer.

           "Qualified Plan Matching Contribution" shall mean the matching contribution (within the meaning
of Code Section 401 (m)(4)(A)), if any, made by the Employer(s) on behalf of a Participant to a Qualified
Plan that is a 40 1(k) plan during the Plan Year.

           "Short-Term Payout" shall mean the payout set forth in Section 4.1.

           "Termination Benefit" shall mean the benefit set forth in Article 5.

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           "Termination ofEmployment" shall mean the severing of employment with all Employers,
voluntarily or involuntarily, for any reason other than Disability or an authorized leave of absence.

           "Trust" shall mean one or more trusts established pursuant to a trust agreement, between the
Employer(s) and the trustee named therein to provide benefits hereunder, as amended from time to time.

           "UnforeseeableFinancialEmergency" shall mean an unanticipated emergency that is caused by an
event beyond the control of the Participant that would result in severe financial hardship to the
Participant resulting from (i) a sudden and unexpected illness or accident of the Participant or a
dependent of the Participant, (ii) a loss of the Participant's principal residence due to casualty or (iii) such
other extraordinary and unforeseeable circumstances arising as a result of events beyond the control of
the Participant, all as determined in the sole discretion of the Committee. A distribution will be deemed
to be on account of an Unforeseeable Financial Emergency if the distribution is on account of:

                      (a)           Unreimbursed medical expenses (as defined in Code Section 213(d)) and amounts
necessary to obtain medical care for the Participant, the Participant's spouse or any dependent;

                      (b)           the purchase of the Participant's principal residence (but not ongoing mortgage
payments);

                      (c)           tuition and related educational fees for the immediately forthcoming twelve (12)
month period of post-secondary education for the Participant, his spouse or dependents; or

                      (d)           the need to prevent eviction from or foreclosure on the Participant's principal
residence.

ARTICLE 2

Selection, Enrollment, Eligibility

           2.1           Selection by Committee. Participation in the Plan shall be limited to a select group of
management and highly compensated Employees of the Employers as determined by the Committee in its
sole discretion from time to time. From that group, the Committee shall select, in its sole discretion,
Employees to participate in the Plan.

           2.2           Enrollment Requirements. As a condition to participation, each selected Employee shall
complete, execute and return to the Employer or the Committee a Plan Agreement, an Election Form and
a Beneficiary Designation Form, all within 30 days after he is selected to participate in the Plan. In
addition, the Committee may establish from time to time such other enrollment requirements as it
determines in its sole discretion are necessary or appropriate.

           2.3           Eligibility; Commencement of Participation. Provided an Employee selected to participate
in the Plan has met all enrollment requirements set forth in the Plan and required by the Committee,
including returning all required documents to the Employer or the

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Committee within the specified time period, that Employee shall commence participation in the Plan on
the first day of the month following the month in which the Employee completes all enrollment
requirements. If an Employee fails to meet all such requirements within the period required, in
accordance with Section 2.2, that Employee shall not be eligible to participate in the Plan until the
first day of the Plan Year following the delivery to and acceptance by the Employer or the
Committee of the required documents.

           2.4           Termination ofParticipation and/orDeferrals. If the Committee determines in good
faith than a Participant no longer qualifies as a member of a select group of management or
highly compensated employees, as membership in such group is determined in accordance with
Sections 201(2), 301(a)(3) and 401(a)(l) of ERISA, the Committee shall have the right, in its sole
discretion, to (i) terminate any deferral election the Participant has made for the remainder of the
Plan Year in which the Participant's membership status changes, (ii) prevent the Participant from
making future deferral elections, (iii) cease making Matching Contributions or Excess
Contributions on his behalf (other than those previously declared), and/or (iv) immediately
distribute the Participant's then Account Balance as a Termination Benefit and terminate the
Participant's participation in the Plan.

ARTICLE 3

Deferrals/Matching Contributions/Crediting/Taxes

           3.1           Compensation Deferrals. For each Plan Year, a Participant may elect to defer, as his
Annual Deferral Amount, such amount of his Base Annual Salary and Annual Bonus as is set
forth in the Participant's Election Form(s) with respect to such Plan Year. The election shall be
irrevocable with respect to compensation covered by the election until the end of the Plan Year.
If no election is made, the amount deferred shall be zero. Notwithstanding the foregoing, if a
Participant first becomes a Participant after the first day of a Plan Year, the maximum Annual
Deferral Amount shall be limited to the amount of Base Annual Salary and Annual Bonus not yet
earned by the Participant as of the date the Participant submits a Plan Agreement and an Election
Form and Beneficiary Designation Form to the Employer or the Committee for acceptance.

           3.2           Matching Contributions. With respect to each Plan Year, each Employer shall
contribute on behalf of a Participant who is an Employee of that Employer a Matching
Contribution equal to the difference between (a) eight (8) percent of the Participant's Base
Annual Salary for the Plan Year, and (b) the amount of the Qualified Plan Matching
Contributions made by the Employer on behalf of that Participant with respect to such Plan Year,
determined after any corrective actions are taken by the Employer to comply with Code Section
401(m). The Matching Contribution shall be credited to each eligible Participant's Matching
Contribution Account as of the last day of the Plan Year to which the Matching Contribution
relates. Notwithstanding the foregoing, Matching Contributions will not be made by the Bank
during periods of regulatory suspension or prohibition as set forth in Article 14.

           3.3           Excess Contribution Amount. With respect to each Plan Year, each Employer shall
contribute on behalf of a Participant who is an Employee of that Employer the Excess

Contribution Amount determined with respect to that Participant for the Plan Year. The

Excess Contribution Amount shall be credited to each eligible Participant's Excess

Contribution Account as of the last day of the Plan Year to which the Excess Contribution

Amount relates. Notwithstanding the foregoing, Excess Contribution Amount will not be

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made by the Bank during periods of regulatory suspension or prohibition as set forth in Article 14.

           3.4           Election to Defer; Effect ofElection Form; Suspension.

           (a)           First Plan Year. In connection with a Participant's commencement of
participation in the Plan, the Participant shall make an irrevocable election regarding his Annual
Deferral Amount for the Plan Year in which the Participant commences participation in the Plan,
along with such other elections as the Committee deems necessary or desirable under the Plan.
For these elections to be valid, the Election Form must be completed and signed by the
Participant, timely delivered to the Employer or the Committee (in accordance with Section 2.2
above) and accepted by the Employer or the Committee.

           (b)           SubsequentPlan Years. For each succeeding Plan Year, the Participant shall
make an irrevocable election regarding his Annual Deferral Amount for that Plan Year, and such
other elections as the Committee deems necessary or desirable under the Plan. Such election shall
be made before the end of the Plan Year preceding the Plan Year for which the election is made,
by means of a new Election Form. If no such Election Form is timely delivered for a Plan Year,
the Annual Deferral Amount shall be zero for that Plan Year. In the case of a deferral of a
Participant's Annual Bonus, the election form shall be delivered to the Employer or the
Committee prior to the date such Annual Bonus is announced by the Employer.

           (c)           Suspension of Election. A Participant may suspend an election relating to an
Annual Deferral Amount for the remainder of the Plan Year by filing with the Committee a
written notice of the suspension, which election will become effective as of the next payroll period.

           3.5           Withholding of Annual Deferral Amounts. For each Plan Year, the Base Annual
Salary portion of the Annual Deferral Amount shall be withheld from each regularly scheduled Base
Annual Salary payroll in equal amounts, as adjusted from time to time for increases and
decreases in Base Annual Salary. The Annual Bonus portion of the Annual Deferral Amount
shall be withheld at the time the Annual Bonus is paid to the Participant, whether or not this
occurs during the Plan Year itself.

           3.6           Vesting. A Participant shall at all times be 100% vested in his Account Balance.

           3.7           Crediting of Account Balances. As of the end of the each calendar quarter
during the Plan Year, each Participant's Account Balance shall be credited with interest based on
value of the Participant's Account Balance on the last day of the calendar quarter (and further
allocated among each of the underlying Accounts). Interest shall be credited at a rate equal to the
interest rate for a 10-year Treasury bond determined as of the last day of that calendar quarter.
However, during the period that benefits are being paid to a Participant or his Beneficiary under
the Monthly Installment Method interest shall be credited monthly as of the close of business
three business days prior to the last day of the month. Notwithstanding the foregoing, interest
pursuant to this Section 3.7 shall not be credited on any portion of a Participant's Account
Balance held in the Trust and the amounts held in the Trust shall be

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invested by the trustee of the Trust pursuant to the trust agreement and shall be credited with the
earnings and debited with the losses relating to such investment.

           3.8           FICA and Other Taxes. For each Plan Year the Participant's Employer(s) shall
withhold from that portion of the Participant's Base Annual Salary and Annual Bonus that is not
being deferred, in a manner determined by the Employer(s), the Participant's share of FICA,
medicare and other' employment taxes on the Annual Deferral Amount, Matching Contribution
and Excess Contribution Amount for such Plan Year. The Committee may reduce the Annual
Deferral Amount in order to comply with this Section 3.8 if it determines that such action is
necessary or appropriate.

           3.9           Tax Withholding from Distributions. The Participant's Employer(s), or the
trustee of the Trust, shall withhold from any payments made to a Participant under the Plan all
federal, state and local income, employment and other taxes required to be withheld by the
Employer(s), or the trustee of the Trust, in connection with such payments, in amounts and in a
manner to be determined in the sole discretion of the Employer(s) and the trustee of the Trust.

ARTICLE 4

Short-Term Payout ofAnnual Deferral Amount;

Unforeseeable Financial Emergencies; Withdrawal Election

           4.1           Short-TermPayout. In connection with each election to defer an Annual Deferral
Amount, a Participant may irrevocably elect to receive a future "Short-Term Payout" from the Plan
with respect to such Annual Deferral Amount. Subject to the Deduction Limitation, the Short-Term Payout shall be a lump sum payment in an amount that is equal to such Annual Deferral
Amount and amounts credited or debited thereon, determined at the time that the Short-Term
Payout becomes payable (rather than the date of a Termination of Employment). Subject to the
Deduction Limitation and the other terms and conditions of the Plan, each Short-Term Payout
elected shall be paid out during a period beginning 1 day and ending 60 days after the last day of
any Plan Year designated by the Participant that is at least five Plan Years after the Plan Year in
which the Annual Deferral Amount is actually deferred. By way of example, if a five year Short-Term Payout is elected for an Annual Deferral Amount that is deferred in the Plan Year
commencing January 1, 2002, the five year Short-Term Payout would become payable during a
60 day period commencing January 1, 2008.

           4.2           Other Benefits Take Precedence Over Short-Term. Should an event occur that
triggers a benefit payment under Article 5 or 6, any Annual Deferral Amount, plus amounts credited or
debited thereon, that is subject to a Short-Term Payout election under Section 4.1 shall not be paid in
accordance with Section 4.1 but shall be paid in accordance with the other applicable Article.

           4.3           Withdrawal Payout/Suspensions for Unforeseeable Financial Emergencies. If the
Participant experiences an Unforeseeable Financial Emergency, the Participant may petition the
Committee to (i) suspend any deferrals required to be made by a Participant and/or (ii) receive a
partial or full payout from the Plan. The payout shall not exceed the lesser of the Participant's
Account Balance, calculated as if such Participant were receiving a Termination Benefit, or the
amount reasonably needed to satisfy the Unforeseeable Financial Emergency. If, subject to the
sole discretion of the Committee, the petition for a suspension and/or payout

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is approved, suspension shall take effect upon the date of approval and any payout shall be made
within 60 days of the date of approval. Following approval of a payout under this Section 4.3, a
Participant shall not be permitted to resume participation in the Plan for the later of 6 months
following such withdrawal or the first day of the following Plan Year. If the Participant petitions
the Committee only to suspend deferrals and the Committee approves such suspension, the
Participant shall not be permitted to resume participation in the Plan until the first day of the
following Plan Year. The payment of any amount under this Section 4.3 shall be subject to the
Deduction Limitation.

ARTICLE 5

Termination Benefit

           5.1           Termination Benefit. Subject to the Deduction Limitation, a Participant (or his
Beneficiary if Termination of Employment is due to death of the Participant) shall receive a
Termination Benefit equal to the Participants Account Balance if he experiences a Termination
of Employment.

           5.2           Payment ofTermination Benefit. The Participant shall receive distribution of all
amounts payable to him under this Article under the Monthly Installment Method over a period
of sixty (60) months. The installment payments shall commence no later than 60 days after the
date of the Participant's Termination of Employment. Any payment made shall be subject to the
Deduction Limitation. Should the Participant die prior to the payment of his entire Account
Balance, the provisions of Section 5.3 shall apply.

           5.3           Death Prior to Completion of Termination Benefit. If a Participant dies after
Termination of Employment but before the Termination Benefit is paid in full, the Participant's unpaid
Termination Benefit payments shall continue and shall be paid to the Participant's Beneficiary over the
remaining number of months and in the same amounts as that benefit would have been paid to the
Participant had the Participant survived.

ARTICLE 6

Disability Waiver and Benefit

           6.1           Disability Waiver.

           (a)           Waiver of Deferral. A Participant who suffers from a Disability shall be excused from
fulfilling that portion of the Annual Deferral Amount commitment that would otherwise have been
withheld from a Participant's Base Annual Salary or Annual Bonus for the Plan Year during which the
Participant first suffers a Disability. During the period of Disability, the Participant shall not be allowed
to make any additional deferral elections, but will continue to be considered a Participant for all other
purposes of the Plan.

           (b)           Return to Work. If a Participant returns to employment with an Employer after a
Disability ceases, the Participant may elect to defer an Annual Deferral Amount for the Plan Year
following his return to employment or service and for every Plan Year thereafter while a Participant in
the Plan; provided such deferral elections are otherwise allowed and an Election Form is delivered to and
accepted by the Committee for each such election in accordance with Section 3.4 above.

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           6.2           Continued Eligibility; Disability Benefit. A Participant suffering a Disability shall, for
benefit purposes under the Plan, continue to be considered to be employed and shall be eligible for the
benefits provided in Articles 4 and 5 in accordance with the provisions of those Articles.
Notwithstanding the above, the Committee shall have the right to, in its sole and absolute discretion and
for purposes of the Plan only, deem the Participant to have experienced a Termination of Employment
after such Participant is determined to be suffering a Disability, in which case the Participant shall
receive a Disability Benefit equal to his Account Balance. The Participant shall receive distribution of all
amounts payable to him under this Section under the Monthly Installment Method over a period of sixty
(60) months. Any payment made shall be subject to the Deduction Limitation. If the Participant dies prior
to receiving the full amount of his Disability Benefit, then his Beneficiary shall receive the balance of
such Disability Benefit in the manner described in Section 5.3.

ARTICLE 7

Beneficiary Designation

           7.1           Beneficiary. Each Participant shall have the right, at any time, to designate his
Beneficiary(ies) (both primary as well as contingent) to receive any benefits payable under the Plan upon
the death of a Participant. The Beneficiary designated under the Plan may be the same as or different
from the Beneficiary designated under any other plan of an Employer in which the Participant
participates.

           7.2           Beneficiary Designation: Chance; Spousal Consent. A Participant shall designate his
Beneficiary by completing and signing the Beneficiary Designation Form and returning it to the
Employer or the Committee. A Participant shall have the right to change a Beneficiary by completing,
signing and otherwise complying with the terms of the Beneficiary Designation Form and the
Committee's rules and procedures, as in effect from time to time. If the Participant names someone other
than his spouse as a Beneficiary, a spousal consent, in the form designated by the Committee, must be
signed by that Participant's spouse and returned to the Employer or the Committee. Upon the acceptance
by the Employer or the Committee of a new Beneficiary Designation Form, all Beneficiary designations
previously filed shall be canceled. The Committee shall be entitled to rely on the last Beneficiary
Designation Form filed by the Participant and accepted by the Employer or the Committee prior to his
death.

           7.3           Acknowledgment. No designation or change in designation of a Beneficiary shall be
effective until received and acknowledged in writing by the Employer or the Committee.

           7.4           No Beneficiary Designation. If a Participant fails to designate a Beneficiary as
provided in Sections 7.1, 7.2 and 7.3 above or, if all designated Beneficiaries predecease the Participant
or die prior to complete distribution of the Participant's benefits, then the Participant's designated
Beneficiary shall be deemed to be his surviving spouse. If the Participant has no surviving spouse, the
benefits remaining under the Plan to be paid to a Beneficiary shall be payable to the Participant's estate.

           7.5           Doubt as to Beneficiary. If the Committee has any doubt as to the proper Beneficiary to
receive payments pursuant to the Plan, the Committee shall have the right, exercisable in its discretion, to
cause the Participant's Employer to withhold such payments until this matter is resolved to the
Committee's satisfaction.

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           7.6           Discharge of Obligations. The payment of benefits under the Plan to a Beneficiary
shall fully and completely discharge all Employers and the Committee from all further obligations under
the Plan with respect to the Participant.

ARTICLE 8

Leave of Absence

           8.1           Paid Leave of Absence. If a Participant is authorized by the Participant's Employer for
any reason to take a paid leave of absence from the employment of the Employer, the Participant shall
continue to be considered employed by the Employer and the Annual Deferral Amount shall continue to
be withheld during such paid leave of absence in accordance with Section

3.4.

           8.2           Unpaid Leave of Absence. If a Participant is authorized by the Participants' Employer
for any reason to take an unpaid leave of absence from the employment of the Employer, the Participant
shall continue to be considered employed by the Employer and the Participant shall be excused from
making deferrals until the earlier of the date the leave of absence expires or the Participant returns to a
paid employment status. Upon such expiration or return, deferrals shall resume for the remaining portion
of the Plan Year in which the expiration or return occurs, based on the deferral election, if any, made for
that Plan Year. If no election was made for that Plan Year, no deferral shall be withheld.

ARTICLE 9

Termination, Amendment or Modification

           9.1           Termination. Although each Employer anticipates that it will continue as a sponsor of
the Plan for an indefinite period of time, there is no guarantee that any Employer will continue as a
sponsor of the Plan or will not terminate its sponsorship of the Plan at any time in the future.
Accordingly, each Employer reserves the right to discontinue its sponsorship of the Plan at any time with
respect to any or all of its participating Employees by action of its board of directors. Upon the
termination of the sponsorship of the Plan by an Employer, the Plan Agreements of the affected
Participants who are employed by that Employer shall terminate and their Account Balances, determined
as if they had experienced a Termination of Employment on the date of such sponsorship termination,
shall be paid to the Participants as follows: Prior to a Change in Control, an Employer shall have the
right, in its sole discretion, and notwithstanding any elections made by the Participant, to pay such
benefits in a lump sum or pursuant to a Monthly Installment Method of up to 60 months, with amounts
credited and debited during the installment period as provided herein. After a Change in Control, the
Employer shall be required to pay such benefits in a lump sum. If all Employers terminate their
sponsorship of the Plan, the Plan shall terminate. The termination of sponsorship of the Plan or the
termination of the Plan shall not adversely affect any Participant or Beneficiary who has become entitled
to the payment of any benefits under the Plan as of the date of such termination; provided, however, that
the Employer shall have the right to accelerate installment payments without a premium or prepayment
penalty by paying the Account Balance in a lump sum or pursuant to a Monthly Installment Method
using fewer months.

           9.2           Amendment. Any Employer may, at anytime, amend or modify the Plan in whole or in
part with respect to that Employer by the action of its board of directors; provided, however, that

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no amendment or modification shall be effective to decrease or restrict the value of a Participant's
Account Balance in existence at the time the amendment or modification is made. The amendment or
modification of the Plan shall not affect any Participant or Beneficiary who has become entitled to the
payment of benefits under the Plan as of the date of the amendment or modification; provided, however,
that the Employer shall have the right to accelerate installment payments without a premium or
prepayment penalty by paying the Account Balance in a lump sum or pursuant to a Monthly Installment
Method using fewer months.

           9.3           Effect ofPayment. The full payment of the applicable benefit under Articles 4, 5 or 6
of the Plan shall completely discharge all obligations to a Participant and his designated Beneficiaries
under the Plan and the Participant's Plan Agreement shall terminate.

ARTICLE 10

Administration

           10.1           Committee Duties. The Plan shall be administered by a Committee which shall
consist of the Board, or such committee as the Board shall appoint. Members of the Committee may be
Participants under the Plan. The Committee shall also have the discretion and authority to (i) make,
amend, interpret, and enforce all appropriate rules and regulations for the administration of the Plan and
(ii) decide or resolve any and all questions including interpretations of the Plan, as may arise in
connection with the Plan. Any individual on the Committee who is a Participant shall not vote or act on
any matter relating solely to himself When making a determination or calculation, the Committee shall be
entitled to rely on information furnished by a Participant or Employer(s).

           10.2           Agents. In the administration of the Plan, the Committee may, from time to time,
employ agents and delegate to them such administrative duties as it sees fit (including acting through a
duly appointed representative) and may from time to time consult with counsel who may be counsel to
any Employer.

           10.3           Binding Effect of Decisions. The decision or action of the Committee with respect to
any question arising out of or in connection with the administration, interpretation and application of the
Plan and the rules and regulations promulgated hereunder shall be final and conclusive and binding upon
all persons having any interest in the Plan.

           10.4           Indemnity of Committee. All Employers shall indemnify and hold harmless the
members of the Committee, and any person to whom the duties of the Committee may be delegated,
against any and all claims, losses, damages, expenses or liabilities arising from any action or failure to
act with respect to the Plan, except in the case of gross misconduct by the Committee or any of its
members or any such delegate.

           10.5           Information. To enable the Committee to perform its functions, each Employer shall
supply full and timely information to the Committee as the Committee may reasonably request.

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ARTICLE 11

Other Benefits and Agreements

The benefits provided for a Participant or a Participant's Beneficiary under the Plan are in addition to any
other benefits available to such Participant under any other plan or program sponsored by the
Participant's Employer. The Plan shall supplement and shall not supersede, modify or amend any other
such plan or program except as may otherwise be expressly provided therein.

ARTICLE 12

Claims Procedures

           12.1           Presentation of Claim. Any Participant or Beneficiary of a deceased Participant (such
Participant or Beneficiary being referred to below as a "Claimant") may deliver to the Committee a
written claim for a determination with respect to the amounts distributable to such Claimant from the
Plan. If such a claim relates to the contents of a notice received by the Claimant, the claim must be made
within 60 days after such notice was received by the Claimant. All other claims must be made within 180
days of the date on which the event that caused the claim to arise occurred. The claim must state with
particularity the determination desired by the Claimant.

           12.2           Notification of Decision. The Committee shall consider a Claimant's claim within a
reasonable time, and shall notify the Claimant in writing:

                      (a)           that the Claimant's requested determination has been made, and that the claim has
been allowed in full; or

                      (b)           that the Committee has reached a conclusion contrary, in whole or in part, to the
Claimant's requested determination, and such notice must set forth in a manner calculated to be
understood by the Claimant:

                                 (i)           the specific reason(s) for the denial of the claim, or any part of it;

                                 (ii)           specific reference(s) to pertinent provisions of the Plan upon which such
denial was based;

                                 (iii)           a description of any additional material or information necessary for the
Claimant to perfect the claim, and an explanation of why such material or information is necessary; and

                                 (iv) an explanation of the claim review procedure set forth in Section 12.3 below.

           12.3           Review ofa Denied Claim. With 60 days after receiving a notice from the Committee
that a claim has been denied, in whole or in part, a Claimant (or the Claimant's duly authorized
representative) may file with the Committee a written request for a review of the denial of the claim.
Thereafter, but not later than 30 days after the review procedure began, the Claimant (or the Claimant's
duly authorized representative):

                      (a)           may review pertinent documents;

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                      (b)           may submit written comments or other documents; and/or

                      (c)           may request a hearing, which the Committee, in its sole discretion, may grant.

           12.4           Decision on Review. The Committee shall render its decision on review promptly, and
not later dm 60 days after the filing of a written request for review of the denial, unless a hearing is held
or other special circumstances require additional time, in which case the Committee's decision must be
rendered within 120 days after such date. Such decision must be written in a manner calculated to be
understood by the Claimant, and it must contain:

                      (a)           specific reasons for the decision;

                      (b)           specific reference(s) to the pertinent Plan provisions upon which the decision was
based; and

                      (c)           such other matters as the Committee deems relevant.

           12.5           Legal Action. A Claimant's compliance with the foregoing provisions of this Article
12 is a mandatory prerequisite to a Claimant's right to commence any legal action with respect to any
claim for benefits under the Plan.

ARTICLE 13

Trust

           13.1           Establishment ofthe Trust. The Employer(s) may establish the Trust upon such terms
as they deem appropriate.

           13.2           Interrelationship of the Plan and the Trust. The provisions of the Plan and the Plan
Agreement shall govern the rights of a Participant to receive distributions pursuant to the Plan. The
provisions of the Trust shall govern the rights of the Employers, Participants and the creditors of the
Employers to the assets transferred to the Trust. Each Employer shall at all times remain liable to carry
out its obligations under the Plan.

           13.3           Investment of Trust Assets. The trustee of the Trust shall be authorized, upon written
instructions received from the Committee or investment manager appointed by the Committee, to invest
and reinvest the assets of the Trust in accordance with the applicable trust agreement.

           13.4           Distributions From the Trust. Each Employer's obligations under the Plan may be
satisfied with Trust assets distributed pursuant to the terms of the Trust and any such distribution shall
reduce the Employer's corresponding obligations under the Plan.

ARTICLE 14

Regulatory Provisions

No Matching Contribution or Excess Contribution Amount will be made by the Bank under the following
circumstances:

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           14.1           Temporary Suspension or Prohibition. If the Participant is suspended and/or
temporarily prohibited from participating in the conduct of the Bank's affairs by a notice served under
Section 8(e)(3) or (g)(l) of the Federal Deposit Insurance Act ("FDIA"), 12 U.S.C. § l818(e)(3) and
(g)(l), all obligations of the Bank to make Matching Contributions and Excess Contribution Amounts on
behalf of such Participant shall be suspended as of the date of service of such notice, unless stayed by
appropriate proceedings. If the charges in the notice are dismissed, the Bank may in its discretion
reinstate in whole or in part any of its obligations which were suspended.

           14.2           Permanent Suspension or Prohibition. If the Participant is removed and/or
permanently prohibited from participating in the conduct of the Bank's affairs by an order issued under
Section 8(e)(4) or (g)(l) of the FDIA, 12 U.S.C. § 18l8(e)(4) and (g)(l), all obligations of the Bank to
make Matching Contributions and Excess Contribution Amounts on behalf of such Participant shall
terminate as of the effective date of such order.

           14.3           Default. If the Bank is in default (as defined in Section 3(x)(l) of the FDJA), all
obligations of the Bank to make Matching Contributions and Excess Contribution Amounts on behalf of
Participants shall terminate.

           14.4           Termination by Regulators. All obligations of the Bank to make Matching
Contributions and Excess Contribution Amounts on behalf of Participants shall cease: (i) at the time the
Federal Deposit Insurance Corporation enters into an agreement to provide assistance to or on behalf of
the Bank under the authority contained in Section 13(c) of the FDIA; or (ii) at the time the Bank's
primary regulator approves a supervisory merger to resolve problems related to operation of the Bank or
when the Bank is determined by its primary regulator to be in an unsafe or unsound condition.

ARTICLE 15

Miscellaneous

           15.1           Status of Plan. The Plan is intended to be a plan that is not qualified within the
meaning of Code Section 40 1(a) and that "is unfunded and is maintained by an Employer primarily for
the purpose of providing deferred compensation for a select group of management or highly compensated
employees" within the meaning of ERISA Sections 20 1(2), 301(a)(3) and 401 (a)( 1). The Plan shall be
administered and interpreted to the extent possible in a manner consistent with that intent.

           15.2           Unsecured General Creditor. Participants and their Beneficiaries, heirs, successors
and assigns shall have no legal or equitable rights, interests or claims in any property or assets of an
Employer. For purposes of the payment of benefits under the Plan, any and all of an Employer's assets
shall be, and remain the general, unpledged and unrestricted assets of the Employer. An Employer's
obligation under the Plan shall be merely of an unfunded and unsecured promise to pay money in the
future.

           15.3           Employer's Liability. An Employer's liability for the payment of benefits shall be
defined only by the Plan including a Participant's Plan Agreement. An Employer shall have no obligation
to a Participant under the Plan except as expressly provided in the Plan including such Participant's Plan
Agreement.

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           15.4           Nonassignabilitv. Neither a Participant nor any other person shall have any right to
commute, sell, assign, transfer, pledge, anticipate, mortgage or otherwise encumber, transfer,
hypothecate, alienate or convey in advance of actual receipt, the amounts, if any, payable hereunder, or
any part thereof, which are, and all rights to which are expressly declared to be, unassignable and non-transferable. No part of the amounts payable shall, prior to actual payment, be subject to seizure,
attachment, garnishment or sequestration for the payment of any debts, judgments, alimony or separate
maintenance allowed by a Participant or any other person, be transferable by operation of law in the
event of a Participant's or any other person's bankruptcy or insolvency or be transferable to a spouse as a
result of a property settlement or otherwise.

           15.5           Not a Contract of Employment. The terms and conditions of the Plan shall not be
deemed to constitute a contract of employment between any Employer and the Participant. Nothing in the
Plan shall be deemed to give a Participant the right to be retained in the service of any Employer or to
interfere with the right of any Employer to discipline or discharge the Participant at any time.

           15.6           Furnishing Information. A Participant or his Beneficiary will cooperate with the
Committee by furnishing any and all information requested by the Committee and take such other actions
as may be requested in order to facilitate the administration of the Plan and the payments of benefits
hereunder, including but not limited to, taking such physical examinations as the Committee may deem
necessary.

           15.7           Terms. Whenever any words are used herein in the masculine, they shall be construed
as though they were in the feminine in all cases where they would so apply; and whenever any words are
used herein in the singular or in the plural, they shall be co as though they were used in the plural or the
singular, as the case may be, in all cases where they would so apply.

           15.8           Captions. The captions of the articles, sections and paragraphs of the Plan are for
convenience only and shall not control or affect the meaning or construction of any of its provisions.

           15.9           Governing Law. Subject to ERISA, the provisions of the Plan shall be construed and
interpreted according to the internal laws of the State of Georgia without regard to its conflicts of laws
and principles.

           15.10           Notice. Any notice or filing required or permitted to be given to the Committee under
the Plan shall be sufficient if in writing and hand-delivered, or sent by registered or certified mail, to the
address below.

           Director of Human Resources

           Heritage Financial Group

           310 West Oglethorpe Blvd.

           PO Box 50728

           Albany, GA 31703

Such notice shall be deemed given as of the date of delivery or, if delivery is made by mail, as of the date
shown on the postmark on the receipt for registration or certification. Any notice or filing required or
permitted to be given to a Participant under the Plan shall be

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sufficient if in writing and hand-delivered, or sent by mail, to the last known address of the Participant.

           15.11           Successors. The provisions of the Plan shall bind and inure to the benefit of the
Participant's Employer and its successors and assigns and the Participants and their Beneficiaries.

           15.12           Spouse's Interest. The interest in the benefits hereunder of a spouse of a Participant
who has predeceased the Participant shall automatically pass to the Participant and shall not be
transferable by such spouse in any manner, including, but not limited to, such spouse's will, nor shall
such interest pass under the laws of intestate succession.

           15.13           Validity. In case any provision of the Plan shall be illegal or invalid for any reason,
said illegality or invalidity shall not affect the remaining parts hereof~ but the Plan shall be constructed
and enforced as if such illegal or invalid provision had never been inserted herein.

           15.14           Incompetent. If' the Committee determines in its discretion that a benefit under the
Plan is to be paid to a minor, a person declared incompetent or to a person incapable of handling the
disposition of that person's property, the Committee may direct payment of such benefit to the guardian,
legal representative or person having the care and custody of such minor, incompetent or incapable
person. The Committee may require proof of minority, incompetence, incapacity or guardianship, as it
may deem appropriate prior to distribution of the benefit. Any payment of a benefit shall be a payment
for the account of the Participant and the Participant's Beneficiary, as the case may be, and shall be a
complete discharge of any liability under the Plan for such payment amount

           15.15           Court Order. The Committee is authorized to make any payments directed by court
order in any action in which the Plan or the Committee has been named as a party. In addition, if a court
determines that a spouse or former spouse of a Participant has an interest in the Participant's benefits
under the Plan in connection with a property settlement or otherwise, the Committee, in its sole
discretion shall have the right, notwithstanding any election made by a Participant, to immediately
distribute the spouse's or former spouse's interest in the Participant's benefits under the Plan to that
spouse or former spouse.

           15.16           Distribution in the Event of Taxation. If, for any reason, all or any portion of a
Participant's benefits under the Plan becomes taxable to the Participant prior to receipt, a Participant may
petition the Committee for a distribution of that portion of his benefit that has become taxable. Upon the
grant of such a petition, which grant shall not be unreasonably withheld (and, after a Change in Control,
shall be granted), a Participant's Employer shall distribute to the Participant immediately available funds
in an amount equal to the taxable portion of his benefit (which amount shall not exceed a Participant's
unpaid Account Balance under the Plan). If the petition is granted, the tax liability distribution shall be
made within 90 days of the date when the Participant's petition is granted. Such a distribution shall affect
and reduce the benefits to be paid under the Plan.

           15.17           Insurance. The Employers, on their own behalf or on behalf of the trustee of the
Trust, and, in their sole discretion, may apply for and procure insurance on the life of any Participant, in
such amounts and in such forms as they may choose. The Employers or the trustee of the Trust, as the
case may be, shall be the sole owner and beneficiary of any such insurance. No

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Participant shall have any interest whatsoever in any such policy or policies, and a Participant shall, at
the request of the Employers, submit to medical examinations and supply such information and execute
such documents as may be required by the insurance company or companies to whom the Employers
have applied for insurance.

           15.18           Legal Fees To Enforce Rights After Chance in Control. Each Employer is aware
that upon the occurrence of a Change in Control, the Board or the board of directors of a Participant's
Employer (which might then be composed of new members) or shareholder(s) of the Company or the
Participant's Employer, or of any successor corporation, might then cause or attempt to cause the
Company, the Participant's Employer or such successor to refqse to comply with its obligations under the
Plan and might cause or attempt to cause the Company or the Participant's Employer to institute, or may
institute, litigation seeking to deny Participants the benefits intended under the Plan. In these
circumstances, the purpose of the Plan could be frustrated. Accordingly, if, following a Change in
Control, it should appear to any Participant that the Company, the Participant's Employer or any
successor corporation has failed to comply with any of its obligations under the Plan or any agreement
thereunder, or, if the Company, such Employer or any other person takes any action to declare the Plan
void or unenforceable or institutes any litigation or other legal action designed to deny, diminish or to
recover from any Participant the benefits intended to be provided, then the Company and the Participant's
Employer irrevocably authorize such Participant to retain counsel of his choice at the expense of the
Company and the Participant's Employer (who shall be jointly and severally liable) to represent such
Participant in connection with the initiation or defense of any litigation or other legal action, whether by
or against the Company, the Participant's Employer or any director, officer, shareholder or other person
affiliated with the Company, the Participant's Employer or any successor thereto in any jurisdiction.

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The Company and the Bank in their capacity as Employers have signed the Plan as of
       MAY          21      , 2002.

	 	HERITAGE FINANCIAL GROUP

a Federally-chartered corporation
	 		
		By:	 

		Title:	 

	 		
		HERITAGEBANK OF THE SOUTH,

a federally chartered savings bank
	 		
		By:	 

		Title:	 

20
End.EXHIBIT 10.3

HERITAGE FINANCIAL GROUP

 SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN

 

 EFFECTIVE APRIL 1,2002

 

 Purpose

            The purpose of the Plan is to provide supplemental retirement benefits to a select group of
employees who contribute materially to the continued growth, development and future business success
of Heritage Financial Group, a federally chartered corporation and any of its subsidiaries that sponsor the
Plan. The Plan shall be unfunded for tax purposes and for purposes of Title I of ERISA.

 

ARTICLE I

 Definitions

            For purposes of the Plan, unless otherwise clearly apparent from the context, the following
phrases or terms shall have the following indicated meanings:

 

            "Annual Benefit" shall mean with respect to any Participant, an annual benefit equal to two
percent of the Participant's Final Average Compensation, times the number of the Participant's Years of
Service (not to exceed fifteen), calculated through the last day of the month in which the Participant
experiences a Termination of Employment. Except as otherwise specifically provided in the Participant's
Plan Agreement, the Participant's Annual Benefit shall not exceed the lesser of (1) thirty percent of the
Participant's Final Average Compensation or (2) an annual benefit ninety-five thousand dollars
($95,000).

 

            "Beneficiary" shall mean one or more persons, estates or other entities, designated in accordance
with Article 9, that are entitled to receive benefits under the Plan upon the death of the Participant.

 

            "Beneficiary Designation Form" shall mean the form established from time to time by the
Committee that the Participant completes, signs and returns to the Employer or the Committee to
designate one or more Beneficiaries.

 

            "Board" shall mean the board of directors of the Company.

 

            "Change in Control" shall mean the first to occur of any of the following events:

 

                        (a)            An acquisition of control of Heritage, MHC (the "Parent") (whether in mutual
or stock form), the Company or Heritage Bank of the South (the "Bank") within the meaning of the Home
Owners' Loan Act of 1933 and 12 C.F.R. Part 574.4(a) as in effect on the date hereof that is not subject
to rebuttal;

 

 

 

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                       (b)            Any event that would be required to be reported in response to Item 1 of the
current report on Form 8-K, as in effect on the date hereof, pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934 (the "Exchange Act") if the Exchange Act were applicable to the
Parent, the Company or the Bank;

 

                        (c)            Any "person" (as that term is used in Section 13 and 1 4(d)(2) of the Exchange
Act) becomes the beneficial owner (as that term is used in Section 13(d) of the Exchange Act), directly or
indirectly, of 25% or more of the Parent's, the Company's or the Bank's outstanding securities entitled to
vote in the election of directors, excluding beneficial ownership of the Company or the Bank by the
Parent and beneficial ownership of the Bank by the Company;

 

                        (d)            Individuals who are members of the Board or the board of directors of the
Parent or the Bank on the date hereof (each the "Incumbent Board") cease for any reason to constitute at
least a majority thereof, provided that any person becoming a member of the Board or the board of
directors of the Parent or the Bank subsequent to the date hereof whose election was approved by a vote
of at least three-quarters of the members comprising the Incumbent Board, or whose nomination for
election by the Parent's, the Company's or the Bank's stockholders (or members in the case of the Parent
in mutual form) was approved by the nominating committee serving under the Incumbent Board shall be
considered a member of the incumbent Board;

 

                        (e)            The sale of all or substantially all of the assets of the Parent, the Company or
the Bank, excluding transfers to entities that are within a "controlled group of corporations" (as defined
in Code Section 1563) in which the Parent is the parent corporation; or

 

                        (f)           A reorganization, merger, consolidation or similar transaction involving the
Parent, the Company or the Bank in which either the Parent, the Company or the Bank is not the resulting
entity or the Parent, the Company or the Bank is the resulting entity but the stockholders of such entity
immediately prior to such transaction do not own at least 60% of the voting securities of such entity
immediately following the completion of such transaction.

 

            "Claimant" shall have the meaning set forth in Section 14.1.

 

            "Code" shall mean the Internal Revenue Code 1986, as it may be amended from time to time.

 

            "Committee" shall mean the committee described in Articlel2.

 

            "Company" shall mean Heritage Financial Group, a Federally-chartered corporation, and any
successor to all or substantially all of the Company's assets or business.

 

            "Compensation" shall mean the annual cash compensation relating to services performed by a
Participant during any calendar year, whether or not paid in such calendar year or included on the Federal
Income Tax Form W-2 for such calendar year, excluding fringe benefits, stock options, other

 

 

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          stock based compensation, relocation expenses, non-monetary awards, and automobile and other
allowances paid to a Participant for employment services rendered (whether or not such allowances are
included in the Employee's gross income). Compensation shall be calculated before reduction for
compensation voluntarily deferred or contributed by the Participant pursuant to all qualified or non-qualified plans of any Employer and shall be calculated to include amounts not otherwise included in the
Participant's gross income under Code Sections 125, 402(e)(3), 402(h), or 403(b) pursuant to plans
established by any Employer; provided, however, that all such amounts will be included in compensation
only to the extent that, had there been no such plan, the amount would have been payable in cash to the
Participant.

 

            "Employee" shall mean a person who is classified as an employee of any Employer.

 

            "Employer(s)" shall mean the Company, the Bank and any other subsidiaries of the Company, if
any, that have been selected by the Board to participate in the Plan and have adopted the Plan as a
sponsor.

 

            "Equivalent Actuarial Value" shall mean, unless otherwise specified in the Plan Agreement, a
benefit of equivalent value to another form of benefit, computed on the basis of an interest rate factor of
7.5 percent per annum.

 

            "ERISA" shall mean the Employee Retirement Income Security Act of 1974, as it may be
amended from time to time.

 

            "Final Average Compensation" shall mean the amount determined by dividing by two the
Participant's Compensation during the two Plan Years (whether or not consecutive) in the five Plan Year
period immediately prior to his Termination of Employment (or if Termination of Employment occurs
during the month of December then including the Plan Year in which Termination of Employment
occurs) that results in the largest total.

 

            "Monthly Benefit" shall mean one twelfth (1/12) of the Participant's Annual Benefit.

 

            "Normal Retirement Date" shall mean the later of (1) the date of the Participant's Termination of
Employment or (2) the Participant's attainment of age sixty-five (65).

 

            "Participant" shall mean any Employee (i) who is selected to participate in the Plan, (ii) who signs
a Plan Agreement and a Beneficiary Designation Form and (iii) whose signed Plan Agreement and
Beneficiary Designation Form are accepted by the Employer or the Committee. A spouse or former
spouse of a Participant shall not be treated as a Participant in the Plan or have an Annual Benefit under
the Plan, even if he or she has an interest in the Participant's benefits under the Plan as a result of
applicable law or property settlements resulting from legal separation or divorce.

 

            "Payout Period" shall mean 180 consecutive months commencing on the first day of the calendar
month next following the Participant's Normal Retirement Date.

 

 

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           "Plan" shall mean this Supplemental Executive Retirement Elan, which shall be evidenced by this
instrument and by each Plan Agreement, as they may be amended from time to time.

 

            "Plan Agreement" shall mean a written agreement, as may be amended from time to time, which
is entered into by and between an Employer and a Participant. Should there be more than one Plan
Agreement, the Plan Agreement bearing the latest date of acceptance by the Employer shall supersede all
previous Plan Agreements in their entirety and shall govern such entitlement. The terms of any Plan
Agreement may be different for any Participant, and any Plan Agreement may limit the benefits
otherwise provided under the Plan.

 

            "Plan Year" shall mean a period beginning on January 1 of each calendar year and continuing
through December 31 of such calendar year.

 

            "Termination of Employment" shall mean the severing of employment with all Employers for any
reason.

 

            "Trust" shall mean any trust established between the Employer(s) and the trustee named therein to
provide benefits hereunder, as amended from time to time.

 

            "Years of Service" shall mean the total number of Plan Years (or fraction thereof determined on a
months basis) after calendar year 2001 during which the Participant is employed on a full-time basis by
an Employer or a predecessor. Years of Service occurring through calendar year 2001 (including service
with another financial institution) shall be credited to extent provided under a Participant's Plan
Agreement. No more than fifteen (15) Years of Service shall be taken into account under the Plan.

 

ARTICLE 2

 Selection, Enrollment, Eligibility

            2.1           Selection by Committee. Participation in the Plan shall be limited to a select group of
management and highly compensated Employees of the Employers, as determined by the Committee in
its sole discretion from time to time. From that group, the Committee shall select, in its sole discretion,
Employees to participate in the Plan.

 

            2.2           Enrollment Requirements. As a condition to participation, each selected Employee
shall complete, execute and return to the Employer or the Committee a Plan Agreement and a Beneficiary
Designation Form. In addition, the Committee shall establish from time to time such other enrollment
requirements as it determines in its sole discretion are necessary or appropriate.

 

            2.3           Eligibility; Commencement of Participation. Provided an Employee selected to
participate in the Plan has met all enrollment requirements set forth in the Plan and required by the
Committee, including returning all required documents to the Employer or the Committee, that Employee
shall commence participation in the Plan on the date his Plan Agreement is executed by the Employer.

 

 

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           2.4           Termination of Participation. If the Committee determines in good faith that a
Participant no longer qualifies as a member of a select group of management or highly compensated
employees, as membership in such group is determined in accordance with Sections 201(2), 301 (a)(3)
and 401 (a)(1) of ERISA, the Committee shall have the right, in its sole discretion, to (I) cease further
benefit accruals hereunder, and/or (ii) immediately distribute in a single lump sum the Equivalent
Actuarial Value of the Monthly Benefits for the Payout Period, determined as if the Participant
experienced a Termination of Employment, and terminate the Participant's participation herein.

 

ARTICLE 3

 Benefits

            3.1           Benefits. Upon a Participant's Normal Retirement Date, the Employer shall pay the
Monthly Benefit to him during the Payout Period.

 

            3.2           Death Benefits.

 

                        (a)             If the Participant dies before having commenced receiving benefits under
Section 3.1, then the Employer shall pay to his Beneficiary the Monthly Benefit for one hundred and
eighty (180) months commencing on the first day of the month following the date the Participant dies.

 

                        (b)             If the Participant dies after he has commenced receiving benefits under Section
3.1, then the Employer shall pay to his Beneficiary the Monthly Benefit during the remainder of the
Payout Period.

 

            3.3           Acceleration of Benefits; Lump Sum Payments. The Committee may accelerate the
payment of a Participant's Monthly Benefits at such time and in such manner as the Committee may
determine, in which case the accelerated benefit shall be equal to the Equivalent Actuarial Value of such
unpaid Monthly Benefits.

 

            3.4           Tax Withholding from Distributions. The Employer, or the trustee of the Trust, shall
withhold from any payments made to a Participant all federal, state and local income, employment and
other taxes required to be withheld by the Employer, or the trustee of the Trust, in connection with such
payments, in amounts and in a manner to be determined in the sole discretion of the Employer and the
trustee of the Trust.

 

            3.5           Restriction on Benefits. Notwithstanding anything contained in this Article 3 to the
contrary, the obligations of the Bank to a Participant under the Plan are subject to the regulatory
restrictions set forth in Article 7.

ARTICLE 4

 In-Service Withdrawals and Distributions

            No in-service withdrawals or distributions are permitted under the Plan.

 

 

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ARTICLE 5

 Vesting

            Unless otherwise provided in the Participant's Plan Agreement, the Participant shall be fully
vested in his Monthly Benefit at all times.

ARTICLE 6

 Participant Contributions

            Participant contributions are neither permitted nor required under the Plan.

 

ARTICLE 7

 Regulatory Provisions

            The obligations of' the Bank to a Participant under the Plan are subject to the following
restrictions:

 

            7.1           Temporary Suspension or Prohibition. If the Participant is suspended and/or
temporarily prohibited from participating in the conduct of the Bank's affairs by a notice served under
Section 8(e)(3) or (g)(1) of the Federal Deposit Insurance Act ("FDIA"), 12 U.S.C. § 1818(e)(3) and
(g)(1), the Bank's obligations to such Participant under the Plan shall be suspended as of the date of
service of such notice, unless stayed by appropriate proceedings. If the charges in the notice are
dismissed, the Bank may in its discretion reinstate in whole or in part any of its obligations which were
suspended.

 

            7.2           Permanent Suspension or Prohibition. If the Participant is removed and/or
permanently prohibited from participating in the conduct of the Bank's affairs by an order issued under
Section 8(e)(4) or(g)(1) of the FDIA, 12 U.S.C. § 1818(e)(4) and (g)(1), all obligations of the Bank to
such Participant under the Plan shall terminate as of the effective date of the order, but vested rights of
the contracting parties shall not be affected.

 

            7.3           Default. If the Bank is in default (as defined in Section 3(x)(1) of the FDIA), all
obligations of the Bank to Participants and Beneficiaries under the Plan shall terminate as of the date of
default, but this provision shall not affect any vested rights of the contracting parties.

 

            7.4           Termination by Regulators. All obligations of the Bank to Participants and
Beneficiaries under the Plan shall be terminated, except to the extent determined that continuation of the
Plan is necessary for the continued operation of the Bank: (i) by the Director of the Office of Thrift
Supervision (the "OTS Director") or his designee, at the time the Federal Deposit Insurance Corporation
enters into an agreement to provide assistance to or on behalf of the Bank under the authority contained
in Section 13(c) of the FDIA; or (ii) by the OTS Director or his designee, at the time the OTS Director or
his designee approves a supervisory merger to resolve problems related to operation of the Bank or when
the Bank is determined by the OTS Director to be in an unsafe or unsound condition. Any rights of the
parties that have already vested, however, shall not be affected by any such action.

 

 

 

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           7.5           Other Regulatory Restrictions on Payment. Notwithstanding anything herein to the
contrary, (1) any payments made by the Bank under the Flan shall be subject to and conditioned upon
compliance with 12 USC Section 1828(k) and any regulations promulgated thereunder and (2) payments
contemplated to be made by the Bank under the Plan shall not be immediately payable to the extent such
payments are barred or prohibited by an action or order issued by the Office of Thrift Supervision or the
Federal Deposit Insurance Corporation.

 

ARTICLE 8

 Funding

            8.1           Funding Generally. The Employer's obligations under the Plan shall be an unfunded
and unsecured promise to pay. The Employer shall not be obligated under any circumstances to fund in
advance its obligations under the Plan, and when the benefit amount is paid it shall be expensed out of
the Employer's general assets.

 

            8.2           Option to Fund Informally. Notwithstanding Section 8.1, the Employer may, at its
sole option, or by agreement, informally fund its obligations under the Plan in whole or in part, provided,
however, that in no event shall such informal funding be construed to create any trust fund, escrow
account or other security for any Participant or Beneficiary with respect to the payment of any benefit
under the Plan, other than as permitted by Internal Revenue Service and Department of Labor rules and
regulations for unfunded supplemental retirement plans.

 

ARTICLE 9

 Beneficiary Designation

            9.1           Beneficiary. Each Participant shall have the right, at any time, to designate his
Beneficiary~es) (both primary as well as contingent) to receive any benefits payable under the Plan to a
beneficiary upon the death of the Participant. The Beneficiary designated under the Plan may be the same
as or different from the Beneficiary designated under any other plan of an Employer in which the
Participant participates.

 

            9.2           Beneficiary Designation: Change; Spousal Consent. A Participant shall designate his
Beneficiary by completing and signing the Beneficiary Designation Form and returning it to the
Employer or the Committee. A Participant shall have the right to change a Beneficiary by completing,
signing and otherwise complying with the terms of the Beneficiary Designation Form and the
Committee's rules and procedures, as in effect from time to time. If the Participant names someone other
than his spouse as a Beneficiary, a spousal consent, in the form designated by the Committee, must be
signed by that Participant's spouse and returned to the Employer or the Committee, Upon the acceptance
by the Employer or the Committee of a new Beneficiary Designation Form, all Beneficiary designations
previously filed shall be canceled. The Committee shall be entitled to rely on the last Beneficiary
Designation Form filed by the Participant and accepted by the Employer or the Committee prior to his
death.

 

 

 

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           9.3           Acknowledgment. No designation or change in designation of a Beneficiary shall be
effective until received and acknowledged in writing by the Employer or the Committee.

 

            9.4           No Beneficiary Designation. If a Participant fails to designate a Beneficiary as
provided in Sections 9.1, 9.2 and 9.3 above or, if all designated Beneficiaries predecease the Participant
or die prior to complete distribution of the Participant's benefits, then the Participant's designated
Beneficiary shall be deemed to be his surviving spouse. If the Participant has no surviving spouse, the
benefits remaining under the Plan to be paid to a Beneficiary shall be payable to the Participant's estate.

 

            9.5           Doubt as to Beneficiary. If the Committee has any doubt as to the proper Beneficiary
to receive payments pursuant to the Plan, the Committee shall have the right, exercisable in its discretion,
to cause the Employer to withhold such payments until this matter is resolved to the Committee's
satisfaction.

 

            9.6           Discharge of Obligations. The payment of benefits under the Plan to a Beneficiary
shall fully and completely discharge all Employers and the Committee from all further obligations under
the Plan with respect to the Participant.

 

ARTICLE 10

 Leave of Absence

            If the Participant is authorized by the Employer for any reason to take a leave of absence from the
employment of the Employer, the Participant shall continue to be considered employed by the Employer
during such leave of absence (and therefore not to have experienced a Termination of Employment) and
service during the leave of absence shall be credited for purposes of determining the Participant's Years
of Service.

ARTICLE 11

 Termination, Amendment or Modification

            11.1             Termination. Although each Employer anticipates that it will continue as a sponsor
of the Plan for an indefinite period of time, there is no guarantee that it will continue as a sponsor of the
Plan or will not terminate its sponsorship of the Plan at any time in the future. Accordingly, each
Employer reserves the right to terminate its sponsorship of the Plan at any time with respect to any or all
of its Participants, by action of its board of directors. Upon termination of sponsorship of the Plan by an
Employer, the Annual and Monthly Benefit of each affected Participant shall be determined as if he had
experienced a Termination of Employment on the date Plan sponsorship is terminated. Monthly Benefits
shall be paid to affected Participants as follows: Prior to a Change in Control, the Employer shall have
the right, in its sole discretion, to pay the Equivalent Actuarial Value of the Monthly Benefits for the
Payout Period in a lump sum; otherwise payments shall be made as provided for in Article 3.  After a
Change in Control, the Employer shall be required to pay the Equivalent Actuarial Value of the Monthly
Benefits for the Payout Period in a lump sum. If all Employers terminate their sponsorship of the Plan,
the Plan shall terminate. The termination of sponsorship of the Plan or the termination of the Plan shall
not adversely affect any Participant or Beneficiary who has become entitled to the

 

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payment of any benefits under the Plan as of the date of termination; provided, however, that the
Employer shall have the right to accelerate payments without a premium or prepayment penalty by
paying the Equivalent Actuarial Value of the remaining benefits in a lump sum.

 

            11 .2            Amendment. Any Employer may, at any time, amend or modify the Plan in whole or
in part with respect to that Employer by the action of its board of directors; provided, however, that no
amendment or modification shall be effective to decrease or restrict the value of a Participant's Annual
Benefit determined at the time the amendment or modification is made, calculated as if the Participant
had experienced a Termination of Employment as of the effective date of the amendment or
modification. The amendment or modification of the Plan shall not affect any Participant or Beneficiary
who has become entitled to the payment of benefits under the Plan as of the date of the amendment or
modification; provided, however, that the Employer shall have the right to accelerate payments without a
premium or prepayment penalty by paying the Equivalent Actuarial Value of the unpaid Monthly
Benefits in a lump ~um.

 

            11 .3            Effect of Payment. The full payment of the applicable benefit under the Plan shall
completely discharge all obligations to a Participant and his designated Beneficiaries under the Plan.

 

ARTICLE 12

 Administration

            12.1            Committee Duties. The Plan shall be administered by a Committee which shall
consist of the Board, or such committee as the Board shall appoint. Members of the Committee may be
Participants under the Plan. The Committee shall also have the discretion and authority to (I) make,
amend, interpret, and enforce all appropriate rules and regulations for the administration of the Plan and
(ii) decide or resolve any and all questions including interpretations of the Plan, as may arise in
connection with the Plan. Any individual on the Committee who is a Participant shall not vote or act on
any matter relating solely to himself. When making a determination or calculation, the Committee shall
be entitled to rely on information furnished by a Participant or the Employer(s).

 

            12.2            Agents. In the administration of the Plan, the Committee may, from time to time,
employ agents and delegate to them such administrative duties as it sees fit (including acting through a
duly appointed representative) and may from time to time consult with counsel who may be counsel to
any Employer.

 

            12.3            Binding Effect of Decisions. The decision or action of the Committee with respect to
any question arising out of or in connection with the administration, interpretation and application of the
Plan and the rules and regulations promulgated hereunder shall be final and conclusive and binding upon
all persons having any interest in the Plan.

 

            12.4            Indemnity of Committee. All Employers shall indemnify and hold harmless the
members of the Committee, and any person to whom the duties of the Committee may be delegated,
against any and all claims, losses, damages, expenses or liabilities arising from any action or failure to
act with respect

 

 

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to the Plan, except in the case of gross misconduct by the Committee or any of its members or any such
delegate.

 

            12.5             Information. To enable the Committee to perform its functions, each Employer shall
supply full and timely information to the Committee as the Committee may reasonably request.

ARTICLE 13

 Other Benefits and Agreements

            The benefits provided for a Participant or a Participant's Beneficiary under the Plan are in
addition to any other benefits available to such Participant under any other plan or program sponsored by
the Participant's Employer. The Plan shall supplement and shall not supersede, modify or amend any
other such plan or program except as may otherwise be expressly provided therein.

 

ARTICLE 14

 Claims Procedures

            14.1	Presentation of Claim. Any Participant or Beneficiary of a deceased Participant (such
Participant or Beneficiary being referred to below as a "Claimant") may deliver to the Committee a
written claim for a determination with respect to the amounts distributable to such Claimant from the
Plan. If such a claim relates to the contents of a notice received by the Claimant, the claim must be made
within 60 days after such notice was received by the Claimant. All other claims must be made within 180
days of the date on which the event that caused the claim to arise occurred. The claim must state with
particularity the determination desired by the Claimant.

 

            14.2	Notification of Decision. The Committee shall consider a Claimant's claim within a
reasonable time, and shall notify the Claimant in writing:

 

                        (a)            that the Claimant's requested determination has been made, and that the claim
has been allowed in full; or

 

                        (b)            that the Committee has reached a conclusion contrary, in whole or in part, to the
Claimant's requested determination, and such notice must set forth in a manner calculated to be
understood by the Claimant:

 

                                    (i)            the specific reason(s) for the denial of the claim, or any part of it;

 

                                    (ii)            specific reference(s) to pertinent provisions of the Plan upon which such
denial was based;

 

                                    (iii)            a description of any additional material or information necessary for the
Claimant to perfect the claim, and an explanation of why such material or information is necessary; and

 

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                                   (iv)             an explanation of the claim review procedure set forth in Section 14.3
below.

 

            14.3            	Review of a Denied Claim. With 60 days after receiving a notice from the Committee
that a claim has been denied, in whole or in part, a Claimant (or the Claimant's duly authorized
representative) may file with the Committee a written request for a review of the denial of the claim.
Thereafter, but not later than 30 days after the review procedure began, the Claimant (or the Claimant's
duly authorized representative):

 

                        (a)            may review pertinent documents;

 

                        (b)            may submit written comments or other documents; and/or

 

                        (c)            may request a hearing, which the Committee, in its sole discretion, may grant.

 

            14.4             Decision on Review. The Committee shall render its decision on review promptly,
and not later than 60 days after the filing of a written request for review of the denial, unless a hearing is
held or other special circumstances require additional time, in which case the Committee's decision must
be rendered within 120 days after such date. Such decision must be written in a manner calculated to be
understood by the Claimant, and it must contain:

 

                        (a)            specific reasons for the decision;

 

                        (b)            specific reference(s) to the pertinent Plan provisions upon which the decision
was based; and

 

                        (c)            such other matters as the Committee deems relevant.

 

            14.5             Legal Action. A Claimant's compliance with the foregoing provisions of this Article
14 is a mandatory prerequisite to a Claimant's right to commence any legal action with respect to any
claim for benefits under the Plan.

 

ARTICLE 15

 Trust

            15.1            Establishment ofthe Trust. The Employer(s) may establish the Trust upon such
terms as they deem appropriate.

 

            15.2            Interrelationship ofthe Plan and the Trust. The provisions of the Plan and the Plan
Agreement shall govern the rights of a Participant to receive distributions pursuant to the Plan, The
provisions of the Trust shall govern the rights of the Employers, Participants and the creditors of the
Employers to the assets transferred to the Trust. Each Employer shall at all times remain liable to carry
out its obligations under the Plan.

 

 

 

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nbsp;          15.3            Investment Of Trust Assets. The trustee of the Trust shall be authorized, upon
written instructions received from the Committee or investment manager appointed by the Committee, to
invest and reinvest the assets of the Trust in accordance with the applicable trust agreement.

 

            15.4            Distributions From the Trust. Each Employer's obligations under the Plan may be
satisfied with Trust assets distributed pursuant to the terms of the Trust and any such distribution shall
reduce the Employer's obligations under the Plan.

 

ARTICLE 16

 Miscellaneous

            16.1            Status of Plan. The Plan is intended to be a plan that is not qualified within the
meaning of Code Section 401(a) and that "is unfunded and is maintained by an employer primarily for
the purpose of~ providing deferred compensation for a select group of management or highly
compensated employees" within the meaning of ERISA Sections 201(2), 301 (a)(3) and 401 (a)(1). The
Plan shall be administered and interpreted to the extent possible in a manner consistent with that intent.

 

            16.2            Unsecured General Creditor. Participants and their Beneficiaries, heirs, successors
and assigns shall have no legal or equitable rights, interests or claims in any property or assets of an
Employer. For purposes of the payment of benefits under the Plan, any and all of an Employer's assets
shall be, and remain the general, unpledged and unrestricted assets of the Employer. An Employer's
obligation under the Plan shall be merely of an unfunded and unsecured promise to pay money in the
future.

 

            16.3            Employer's Liability. An Employer's liability for the payment of benefits shall be
defined only by the Plan including a Participant's Plan Agreement. An Employer shall have no obligation
to a Participant under the Plan except as expressly provided in the Plan including such Participant's Plan
Agreement.

 

            16.4            Nonassignability. Neither a Participant nor any other person shall have any right to
commute, sell, assign, transfer, pledge, anticipate, mortgage or otherwise encumber, transfer,
hypothecate, alienate or convey in advance of actual receipt, the amounts, if any, payable hereunder, or
any part thereof, which are, and all rights to which are expressly declared to be, unassignable and non-transferable. No part of the amounts payable shall, prior to actual payment, be subject to seizure,
attachment, garnishment or sequestration for the payment of any debts, judgments, alimony or separate
maintenance allowed by a Participant or any other person, be transferable by operation of law in the
event of a Participant's or any other person's bankruptcy or insolvency or be transferable to a spouse as a
result of a property settlement or otherwise.

 

            16.5            Not a Contract of Employment. The terms and conditions of the Plan shall not be
deemed to constitute a contract of employment between any Employer and the Participant. Nothing in the
Plan shall be deemed to give a Participant the right to be retained in the service of any Employer or to
interfere with the right of any Employer to discipline or discharge the Participant at any time.

 

 

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           16.6            Furnishing Information. A Participant or his Beneficiary will cooperate with the
Committee by furnishing any and all information requested by the Committee and take such other actions
as may be requested in order to facilitate the administration of the Plan and the payments of benefits
hereunder, including but not limited to, taking such physical examinations as the Committee may deem
necessary.

 

            16.7            Terms. Whenever any words are used herein in the masculine, they shall be construed
as though they were in the feminine in all cases where they would so apply; and whenever any words are
used herein in the singular or in the plural, they shall be co as though they were used in the plural or the
singular, as the case may be, in all cases where they would so apply.

 

            16.8            Captions. The captions of the articles, sections and paragraphs of the Plan are for
convenience only and shall not control or affect the meaning or construction of any of its provisions.

 

            16.9            Governing Law. Subject to ERISA, the provisions of the Plan shall be construed and
interpreted according to the internal laws of the State of Georgia without regard to its conflicts of laws
and principles.

 

            16.10            Notice. Any notice or filing required or permitted to be given to the Committee
under the Plan shall be sufficient if in writing and hand-delivered, or sent by registered or certified mail,
to the address below.

 

            Director of Human Resources

            Heritage Financial Group

            310 West Oglethorpe Blvd.

            PO Box 50728

            Albany, GA 31703

 

            Such notice shall be deemed given as of the date of delivery or, if delivery is made by mail, as of
the date shown on the postmark on the receipt for registration or certification. Any notice or filing
required or permitted to be given to a Participant under s Plan shall be sufficient if in writing and hand-delivered, or sent by mail, to the last known address of the Participant.

 

            16.11            Successors. The provisions of the Plan shall bind and inure to the benefit of the
Participant's Employer and its successors and assigns and the Participant and the Participant's designated
Beneficiaries.

 

            16.12            Spouse's Interest. The interest in the benefits hereunder of a spouse of a Participant
who has predeceased the Participant shall automatically pass to the Participant and shall not be
transferable by such spouse in any manner, including, but not limited to, such spouse's will, nor shall
such interest pass under the laws of intestate succession.

 

            16.13            Validity. In case any provision of the Plan shall be illegal or invalid for any reason,
said illegality or invalidity shall not affect the remaining parts hereof, but the Plan shall be constructed
and enforced as if such illegal or invalid provision had never been inserted herein.

 

 

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           16.14             Incompetent. If the Committee determines in its discretion a benefit under the Plan
is to be paid to a minor, a person declared incompetent or to a person incapable of handling the
disposition of that person's property, the Committee may direct payment of such benefit to the guardian,
legal representative or person having the care and custody of such minor, incompetent or incapable
person. The Committee may require proof of minority, incompetence, incapacity or guardianship, as it
may deem appropriate prior to distribution of the benefit. Any payment of a benefit shall be a payment
for the account of the Participant and the Participant's Beneficiary, as the case may be, and shall be a
complete discharge of any liability under the Plan for such payment amount

 

            16.15            Court Order. The Committee is authorized to make any payments directed by court
order in any action in which the Plan or the Committee has been named as a party. In addition, if a court
determines that a spouse or former spouse of a Participant has an interest in the Participant's benefits
under the Plan in connection with a property settlement or otherwise, the Committee, in its sole
discretion shall have the right, notwithstanding any election made by a Participant, to immediately
distribute the spouse's or former spouse's interest in the Participant's benefits under the Plan to that
spouse or former spouse.

 

            16.16            Distribution in the Event of Taxation. If, for any reason, all or any portion of a
Participant's benefits under the Plan becomes taxable to the Participant prior to receipt, a Participant may
petition the Committee for a distribution of that portion of his benefit that has become taxable. Upon the
grant of such a petition, which grant shall not be unreasonably withheld (and, after a Change in Control,
shall be granted), a Participant's Employer shall distribute to the Participant immediately available funds
in an amount equal to the taxable portion of his benefit (which amount shall not exceed a Participant's
Equivalent Actuarial Value of his unpaid Monthly Benefits). If the petition is granted, the tax liability
distribution shall be made within 90 days of the date when the Participant's petition is granted. Such a
distribution shall affect and reduce the benefits to be paid under the Plan.

 

            16.17            Insurance. The Employers, on their own behalf or on behalf of the trustee of the
Trust, and, in their sole discretion, may apply for and procure insurance on the life of any Participant, in
such amounts and in such forms as they may choose. The Employers or the trustee of the Trust, as the
case may be, shall be the sole owner and beneficiary of any such insurance. No Participant shall have any
interest whatsoever in any such policy or policies, and a Participant shall at the request of the Employers
submit to medical examinations and supply such information and execute such documents as may be
required by the insurance company or companies to whom the Employers have applied for insurance.

 

            16.18            Legal Fees To Enforce Rights After Change in Control. Each Employer is aware
that upon the occurrence of a Change in Control, the Board or the board of directors of a Participant's
Employer (which might then be composed of new members) or shareholders of the Company or the
Participant's Employer, or of any successor corporation, might then cause or attempt to cause the
Company, the Participant's Employer or such successor to refuse to comply with its obligations under the
Plan and might cause or attempt to cause the Company or the Participant's Employer to institute, or may
institute, litigation seeking to deny Participants the benefits intended under the Plan. In these
circumstances, the purpose of the Plan could be frustrated. Accordingly, if, following a Change in
Control, it should appear to any Participant that the Company, the Participant's Employer or any
successor corporation

 

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has failed to comply with any of its obligations under the Plan or any agreement thereunder, or, if the
Company, such Employer or any other person takes any action to declare the Plan void or unenforceable
or institutes any litigation or other legal action designed to deny, diminish or to recover from any
Participant the benefits intended to be provided, then the Company and the Participant's Employer
irrevocably authorize such Participant to retain counsel of his choice at the expense of the Company and
the Participant's Employer (who shall be jointly and severally liable) to represent such Participant in
connection with the initiation or defense of any litigation or other legal action, whether by or against the
Company, the Participant's Employer or any director, officer, shareholder or other person affiliated with
the Company, the Participant's Employer or any successor thereto in any jurisdiction.

 

            The Company and the Bank have in their capacity as Employers signed the Plan as of
            MAY 21            , 2002.

 

 

 
	 	HERITAGE FINANCIAL GROUP

 a Federally-chartered corporation
			
		By:	
		Title:	
			
		HERITAGE BANK OF THE SOUTH

 a Federally-chartered savings bank
			
		By:	
		Title:	

 

 

 

 

 

 

 

 

 

 

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HERITAGE FINANCIAL GROUP

 SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN AGREEMENT

 

            Heritage Financial Group (the "Company") and Heritage Bank of the South (the "Bank") are
sponsors of the Heritage Financial Group Supplemental Executive Retirement Plan (the "Plan"). The
Company, the Bank and the undersigned executive of the Company and the Bank (the "Employee")
hereby agree, for good and valuable consideration, the value of which is hereby acknowledged, that the
Employee shall participate in the Plan as such Plan is currently in effect and as the same may hereafter be
modified or amended. The Employee does hereby acknowledge that he has been provided with a copy of
the Plan as currently in effect and he does specifically agree to the terms and conditions thereof. The
Employee understands that his receipt (or his Beneficiary's receipt) of benefits under the Plan shall be
subject to all provisions of the Plan. All capitalized terms not defined herein shall have the meaning
assigned to them under the Plan.

 

SPECIAL RESTRICTIONS ON PLAN BENEFITS, VESTING

 AND YEARS OF SERVICE CREDIT

 

            1.           No limitations other than those contained in the Plan shall apply to the Employee's
entitlement to benefits under the Plan.

 

            2.           The Employee acknowledges that his collective Annual Benefit under the Plan from all
Employers shall not exceed the lesser of (i) thirty percent (30%) of his Final Average Compensation or
(ii) ninety five thousand dollars ($95,000).

 

            3.           The Employee's entitlement to benefits is not subject to a vesting schedule.

 

            4           The Employee shall be credited with nine (9) Years of Service under the Plan relating to
the period through calendar year 2001.

 

BENEFICIARY DESIGNATION

 

            The Employee acknowledges that he must designate his spouse as his sole primary
Beneficiary, unless his spouse executes a Spousal Consent permitting another person to be so
designated as primary Beneficiary.

 

            The Employee designates the following individuals as his "Beneficiary". The Employee
acknowledges that he is aware of his right to change such designation by submitting to the Committee at
a subsequent time a new written designation of his primary and secondary Beneficiaries to whom
payment under the Plan shall be made in the event of his death prior to complete distribution of the
benefits payable to him under the Plan. The Employee understands that any Beneficiary designation
made subsequent to

 

 

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the execution of this Plan Agreement must be executed and dated by him and shall become effective only
when receipt thereof is acknowledged in writing by the Committee, the Company or the Bank.

 

                        PRIMARY BENEFICIARIES:           _______________________________

 

                       SECONDARY BENEFICIARIES:       _______________________________

 

            The Employee understands that he may at any time, upon written request to the Company, the
Bank or the Committee, obtain a copy of the Plan as then in effect.

 

 

 

 
	__________________________	__________________________
	Lee H. Bettis, Employee	(Date)
 
	
	HERITAGE FINANCIAL GROUP
	
	By 	__________________________	__________________________
		Authorized Officer	(Date)
 
	
	HERITAGE BANK OF THE SOUTH
	
	By 	__________________________	__________________________
		Authorized Officer	(Date)

 

 

 

 

 

 

 

 

 

 

 

 

2
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HERITAGE FINANCIAL GROUP

 SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN AGREEMENT

 

            Heritage Financial Group (the "Company") and Heritage Bank of the South (the "Bank") are
sponsors of the Heritage Financial Group Supplemental Executive Retirement Plan (the "Plan"). The
Company, the Bank and the undersigned executive of the Company and the Bank (the "Employee")
hereby agree, for good and valuable consideration, the value of which is hereby acknowledged, that the
Employee shall participate in the Plan as such Plan is currently in effect and as the same may hereafter be
modified or amended. The Employee does hereby acknowledge that he has been provided with a copy of
the Plan as currently in effect and he does specifically agree to the terms and conditions thereof. The
Employee understands that his receipt (or his Beneficiary's receipt) of benefits under the Plan shall be
subject to all provisions of the Plan. All capitalized terms not defined herein shall have the meaning
assigned to them under the Plan.

 

SPECIAL RESTRICTIONS ON PLAN BENEFITS, VESTING

 AND YEARS OF SERVICE CREDIT

 

            1.           No limitations other than those contained in the Plan shall apply to the Employee's
entitlement to benefits under the Plan.

 

            2.           The Employee acknowledges that his collective Annual Benefit under the Plan from all
Employers shall not exceed the lesser of (i) thirty percent (30%) of his Final Average Compensation or
(ii) ninety five thousand dollars ($95,000).

 

            3.           The Employee's entitlement to benefits is not subject to a vesting schedule.

 

            4           The Employee shall be credited with nine (9) Years of Service under the Plan relating to
the period through calendar year 2001.

 

BENEFICIARY DESIGNATION

 

            The Employee acknowledges that he must designate his spouse as his sole primary
Beneficiary, unless his spouse executes a Spousal Consent permitting another person to be so
designated as primary Beneficiary.

 

            The Employee designates the following individuals as his "Beneficiary". The Employee
acknowledges that he is aware of his right to change such designation by submitting to the Committee at
a subsequent time a new written designation of his primary and secondary Beneficiaries to whom
payment under the Plan shall be made in the event of his death prior to complete distribution of the
benefits payable to him under the Plan. The Employee understands that any Beneficiary designation
made subsequent to

 

 

Next Page

the execution of this Plan Agreement must be executed and dated by him and shall become effective only
when receipt thereof is acknowledged in writing by the Committee, the Company or the Bank.

 

                        PRIMARY BENEFICIARIES:           _______________________________

 

                       SECONDARY BENEFICIARIES:       _______________________________

 

            The Employee understands that he may at any time, upon written request to the Company, the
Bank or the Committee, obtain a copy of the Plan as then in effect.

 

 

 

 
	__________________________	__________________________
	O. Leonard Dorminey, Employee	(Date)
 
	
	HERITAGE FINANCIAL GROUP
	
	By 	__________________________	__________________________
		Authorized Officer	(Date)
 
	
	HERITAGE BANK OF THE SOUTH
	
	By 	__________________________	__________________________
		Authorized Officer	(Date)

 

 

 

 

 

 

 

 

 

 

 

 

2
Next Page

HERITAGE FINANCIAL GROUP

 SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN AGREEMENT

 

            Heritage Financial Group (the "Company") and Heritage Bank of the South (the "Bank") are
sponsors of the Heritage Financial Group Supplemental Executive Retirement Plan (the "Plan"). The
Company, the Bank and the undersigned executive of the Company and the Bank (the "Employee")
hereby agree, for good and valuable consideration, the value of which is hereby acknowledged, that the
Employee shall participate in the Plan as such Plan is currently in effect and as the same may hereafter be
modified or amended. The Employee does hereby acknowledge that he has been provided with a copy of
the Plan as currently in effect and he does specifically agree to the terms and conditions thereof. The
Employee understands that his receipt (or his Beneficiary's receipt) of benefits under the Plan shall be
subject to all provisions of the Plan. All capitalized terms not defined herein shall have the meaning
assigned to them under the Plan.

 

SPECIAL RESTRICTIONS ON PLAN BENEFITS, VESTING

 AND YEARS OF SERVICE CREDIT

 

            1.           No limitations other than those contained in the Plan shall apply to the Employee's
entitlement to benefits under the Plan.

 

            2.           The Employee acknowledges that his collective Annual Benefit under the Plan from all
Employers shall not exceed the lesser of (i) thirty percent (30%) of his Final Average Compensation or
(ii) ninety five thousand dollars ($95,000).

 

            3.           The Employee's entitlement to benefits is not subject to a vesting schedule.

 

            4           The Employee shall be credited with nine (9) Years of Service under the Plan relating to
the period through calendar year 2001.

 

BENEFICIARY DESIGNATION

 

            The Employee acknowledges that he must designate his spouse as his sole primary
Beneficiary, unless his spouse executes a Spousal Consent permitting another person to be so
designated as primary Beneficiary.

 

            The Employee designates the following individuals as his "Beneficiary". The Employee
acknowledges that he is aware of his right to change such designation by submitting to the Committee at
a subsequent time a new written designation of his primary and secondary Beneficiaries to whom
payment under the Plan shall be made in the event of his death prior to complete distribution of the
benefits payable to him under the Plan. The Employee understands that any Beneficiary designation
made subsequent to

 

 

Next Page

the execution of this Plan Agreement must be executed and dated by him and shall become effective only
when receipt thereof is acknowledged in writing by the Committee, the Company or the Bank.

 

                        PRIMARY BENEFICIARIES:           _______________________________

 

                       SECONDARY BENEFICIARIES:       _______________________________

 

            The Employee understands that he may at any time, upon written request to the Company, the
Bank or the Committee, obtain a copy of the Plan as then in effect.

 

 

 

 
	__________________________	__________________________
	Carol W. Slappey, Employee	(Date)
 
	
	HERITAGE FINANCIAL GROUP
	
	By 	__________________________	__________________________
		Authorized Officer	(Date)
 
	
	HERITAGE BANK OF THE SOUTH
	
	By 	__________________________	__________________________
		Authorized Officer	(Date)

 

 

 

 

 

 

 

 

 

 

 

 

2
End.

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