CAPITAL CITY BANK GROUP, INC.
2005 ASSOCIATE INCENTIVE PLAN
1. Purpose. The purpose of the 2005 Associate Incentive Plan
("Plan") of Capital City Bank Group, Inc. ("Company") is to provide a means
through which the Company and its Subsidiaries may attract able persons to
enter and remain in the employ or other service of the Company and its
Subsidiaries, and to provide a means whereby those key persons upon whom the
responsibilities of the successful administration and management of the
Company rest, and whose present and potential contributions to the welfare
of the Company are of importance, can acquire and maintain stock ownership,
thereby strengthening their commitment to the welfare of the Company and
promoting an identity of interest between shareowners and these key persons.
A further purpose of the Plan is to provide such key persons
with additional incentive and reward opportunities designed to enhance the
profitable growth of the Company. The Plan provides for granting Incentive
Stock Options, Nonqualified Stock Options, Stock Appreciation Rights,
Restricted Stock Awards, Phantom Stock Unit Awards and Performance Share
Units, or any combination of the foregoing.
2. Definitions. The following definitions shall be applicable
throughout the Plan.
(a) "Appreciation Date" shall mean the date designated by a
Holder of Stock Appreciation Rights for measurement of the appreciation in
the value of rights awarded to him, which date shall be the date notice of
such designation is received by the Committee, or its designee.
(b) "Award" shall mean, individually or collectively, any
Incentive Stock Option, Nonqualified Stock Option, Stock Appreciation Right,
Restricted Stock Award, Phantom Stock Unit Award or Performance Share Unit
Award.
(c) "Award Period" shall mean a period of time within which
performance is measured for the purpose of determining whether an award of
Performance Share Units has been earned.
(d) "Board" shall mean the Board of Directors of the Company.
(e) "Cause" shall mean the Company or a Subsidiary having cause
to terminate a Participant's employment under any existing employment
agreement between the Participant and the Company or a Subsidiary or, in the
absence of such an employment agreement, upon (i) the determination by the
Committee that the Participant has failed to perform his duties to the
Company or a Subsidiary (other than as a result of his incapacity due to
physical or mental illness or injury), which failure amounts to an
intentional and extended neglect of his duties to such party, (ii) the
Committee's determination that the Participant has engaged or is about to
engage in conduct materially injurious to the Company or a Subsidiary, or
(iii) the Participant having been convicted of a felony.
(f) "Change in Control" shall, unless the Committee otherwise
directs by resolution adopted prior thereto, be deemed to occur if (i) any
"person" (as that term is used in Sections 13 and 14(d)(2) of the Securities
and Exchange Act of 1934 ("Exchange Act")) is or becomes the beneficial
owner (as that term is used in Section 13(d) of the Exchange Act), directly
or indirectly, of twenty-five percent (25%) or more of the voting stock; or
(ii) during any period of two consecutive years, individuals who at the
beginning of such period constitute the Board cease for any reason to
constitute at least a majority thereof, unless the election or the
nomination for election by the Company's shareowners of each new director
was approved by a vote of at least three-quarters of the directors then
still in office who were directors at the beginning of the period. Any
merger, consolidation or corporate reorganization in which the owners of the
Company's capital stock entitled to vote in the election of directors
("Voting Stock") prior to said combination, own fifty percent (50%) or more
of the resulting entity's voting stock shall not, by itself, be considered a
Change in Control.
(g) "Code" shall mean the Internal Revenue Code of 1986, as
amended. Reference in the Plan to any section of the Code shall be deemed
to include any amendments or successor provisions to such section and any
regulations under such section.
(h) "Committee" shall mean a committee appointed by the Board;
provided, that to the extent required by Rule 16b-3 of the Securities and
Exchange Commission under the Exchange Act, such Committee shall be
comprised solely of two or more Non-Employee Directors, as defined in Rule
16b-3(b)(3) under the Exchange Act. All references in this Plan to the
"Committee" shall mean the Board if no Committee has been appointed.
(i) "Common Stock" shall mean the Common Stock of the Company,
one penny ($0.01) par value per share.
(j) "Company" shall mean Capital City Bank Group, Inc., a
Florida corporation.
(k) "Date of Grant" shall mean the date on which the granting of
an Award is authorized or such other date as may be specified in such
authorization.
(l) "Disability" shall mean the complete and permanent inability
by reason of illness or accident to perform the duties of the occupation at
which a Participant was employed when such disability commenced or, if the
Participant was retired when such disability commenced, the inability to
engage in any substantial gainful activity, as determined by the Committee
based upon medical evidence acceptable to it.
(m) "Eligible Associate" shall mean any person regularly
employed by the Company or a Subsidiary on a full-time salaried basis who
satisfies all of the requirements of Section 6.
(n) "Exchange Act" shall mean the Securities Exchange Act of
1934, as amended.
(o) "Fair Market Value" shall mean the average of (i) the high
and low prices of the Common Stock on the principal national securities
exchange on which the Common Stock
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is traded for the ten (10) trading days immediately preceding the date of
determination, if the Common Stock is then traded on a national securities
exchange; or (ii) the last reported sale price of the Common Stock on the
Nasdaq National Market for the ten (10) trading days immediately preceding
the date of determination, if the Common Stock is not then traded on a
national securities exchange; or (iii) the closing bid price last quoted by
an established quotation service for over-the-counter securities for the ten
(10) trading days immediately preceding the date of determination, if the
Common Stock is not reported on the Nasdaq National Market. However, if the
Common Stock is not publicly-traded at the time an option is granted under
the Plan, "Fair Market Value" shall be deemed to be the fair value of the
Common Stock as determined by the Committee after taking into consideration
all factors which it deems appropriate, including, without limitation,
recent sale and offer prices of the Common Stock in private transactions
negotiated at arm's length.
(p) "Holder" shall mean a Participant who has been granted an
Option, a Stock Appreciation Right, a Restricted Stock Award, Phantom Stock
Unit Award or a Performance Share Unit Award.
(q) "Incentive Stock Option" shall mean an Option granted by the
Committee to a Participant under the Plan which is designated by the
Committee as an Incentive Stock Option pursuant to Section 422 of the Code.
(r) "Nonqualified Stock Option" shall mean an Option granted by
the Committee to a Participant under the Plan which is not designated by the
Committee as an Incentive Stock Option.
(s) "Normal Termination" shall mean termination:
(i) With respect to the Company or a Subsidiary, at
retirement (excluding early retirement) pursuant to the Company retirement
plan then in effect;
(ii) On account of Disability;
(iii) With the written approval of the Committee; or
(iv) By the Company or a Subsidiary without cause.
(t) "Option" shall mean an Award granted under Section 7 of the
Plan.
(u) "Option Period" shall mean the period described in Section
7(c).
(v) "Participant" shall mean a person who has been selected to
participate in the Plan and to receive an Award pursuant to Section 6.
Participants are limited to Eligible Associates or a director of a
Subsidiary who is not otherwise a participant in the Company's 1996 Director
Stock Purchase Plan.
(w) "Performance Goals" shall mean the performance objectives of
the Company during an Award Period or Restricted Period established for the
purpose of
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determining whether, and to what extent, Awards will be earned for an Award
Period or Restricted Period.
(x) "Performance Share Unit" shall mean a hypothetical
investment equivalent equal to one share of Stock granted in connection with
an Award made under Section 9 of the Plan.
(y) "Phantom Stock Unit" shall mean a hypothetical investment
equivalent equal to one Share of Stock granted in connection with an Award
made under Section 10 of the Plan, or credited with respect to Awards of
Performance Share Units which have been deferred under Section 9.
(z) "Plan" shall mean the 2005 Associate Incentive Plan of
Capital City Bank Group, Inc.
(aa) "Restricted Period" shall mean, with respect to any share of
Restricted Stock, the period of time determined by the Committee during
which such share of Restricted Stock is subject to the restrictions set
forth in Section 10.
(bb) "Restricted Stock" shall mean shares of Common Stock issued
or transferred to a Participant subject to the restrictions set forth in
Section 10 and any new, additional or different securities a Participant may
become entitled to receive as a result of adjustments made pursuant to
Section 12.
(cc) "Restricted Stock Award" shall mean an Award granted under
Section 10 of the Plan.
(dd) "Securities Act" shall mean the Securities Act of 1933, as
amended.
(ee) "Stock" shall mean the Common Stock or such other authorized
shares of stock of the Company as the Board may from time to time authorize
for use under the Plan.
(ff) "Stock Appreciation Right" or "SAR" shall mean an Award
granted under Section 8 of the Plan.
(gg) "Subsidiary" shall mean any corporation which is a
"subsidiary corporation" of the Company within the meaning of Section 424(f)
of the Code.
(hh) "Valuation Date" shall mean the last day of an Award Period
or the date of death of a Participant, as applicable.
3. Effective Date, Duration and Shareowner Approval. Subject to
the approval of this Plan by the shareowners of the Company at a duly
convened meeting of shareowners, the Plan shall be effective as of January
1, 2005 upon its adoption by the Board. It shall continue in effect for a
term of ten (10) years thereafter unless sooner terminated under Section 15
hereof.
4. Administration. The Committee shall administer the Plan. A
majority of the members of the Committee shall constitute a quorum. The
acts of a majority of the members
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present at any meeting at which a quorum is present or acts approved in
writing by a majority of the Committee shall be deemed the acts of the
Committee. Subject to the provisions of the Plan, the Committee shall have
exclusive power to:
(a) Select the persons to be Participants in the Plan;
(b) Determine the nature and extent of the Awards to be made to
each Participant;
(c) Determine the time or times when Awards will be made;
(d) Determine the duration of each Award Period;
(e) Determine the conditions to which the payment of Awards may
be subject;
(f) Establish the Performance Goals for each Award Period;
(g) Prescribe the form or forms evidencing Awards; and
(h) Cause records to be established in which there shall be
entered, from time to time as Awards are made to Participants, the date of
each Award, the number of Incentive Stock Options, Nonqualified Stock
Options, SARs, Phantom Stock Units, Performance Share Units and Shares of
Restricted Stock awarded by the Committee to each Participant, the
expiration date, the Award Period and the duration of any applicable
Restricted Period.
The Committee shall have the authority, subject to the provisions
of the Plan, to establish, adopt, or revise such rules and regulations and
to make all such determinations relating to the Plan as it may deem
necessary or advisable for the administration of the Plan. The Committee's
interpretation of the Plan or any Awards granted pursuant thereto and all
decisions and determinations by the Committee with respect to the Plan shall
be final, binding, and conclusive on all parties unless otherwise determined
by the Committee.
5. Grant of Awards. The Committee may, from time to time, grant
awards of Options, Stock Appreciation Rights, Restricted Stock, Phantom
Stock Units and/or Performance Share Units to one or more Participants;
provided, however, that:
(a) Subject to Section 12, the aggregate number of shares of
Stock made subject to Awards may not exceed 700,000;
(b) Such shares shall be deemed to have been used in payment of
Awards whether they are actually delivered or the Fair Market Value
equivalent of such shares is paid in cash. In the event any Option, SAR not
attached to an Option, Restricted Stock, Phantom Stock Unit or Performance
Share Unit shall be surrendered, terminate, expire, or be forfeited, the
number of shares of Stock no longer subject thereto shall thereupon be
released and shall thereafter be available for new Awards under the Plan to
the fullest extent permitted by the Exchange Act (if applicable at the
time); and
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(c) Stock delivered by the Company in settlement of Awards under
the Plan may be authorized and unissued Stock or Stock held in the treasury
of the Company or may be purchased on the open market or by private purchase
at prices no higher than the Fair Market Value at the time of purchase.
6. Eligibility. Participants shall be limited to officers and
employees of the Company and its Subsidiaries who have received written
notification from the Committee that they have been selected to participate
in the Plan.
7. Stock Options. One or more Incentive Stock Options or
Nonqualified Stock Options can be granted to any Participant; provided,
however, that Incentive Stock Options may be granted only to Eligible
Associates. Each Option so granted shall be subject to the following
conditions.
(a) Option price. The option price ("Option Price") per share
of Stock shall be set by the Committee at the time of grant but shall not be
less than (i) in the case of an Incentive Stock Option, the Fair Market
Value of a share of Stock at the Date of Grant, and (ii) in the case of a
Nonqualified Stock Option, the par value per share of Stock.
(b) Manner of exercise and form of payment. Options which have
become exercisable may be exercised by delivery of written notice of
exercise to the Committee accompanied by payment of the Option Price. The
Option Price shall be payable in cash and/or shares of Stock valued at the
Fair Market Value at the time the Option is exercised, or, in the discretion
of the Committee, either (i) in other property having a Fair Market Value on
the date of exercise equal to the Option Price, or (ii) by delivering to the
Company a copy of irrevocable instructions to a stockbroker to deliver
promptly to the Company an amount of sale or loan proceeds sufficient to pay
the Option Price.
(c) Other terms and conditions. If the Holder has not died or
his relationship as an officer, employee or director with the Company or a
Subsidiary has not terminated, the Option shall become exercisable in such
manner and within such period or periods ("Option Period"), not to exceed
ten (10) years from its Date of Grant, as set forth in the Stock Option
Agreement to be entered into in connection therewith.
(i) Each Option shall lapse in the following situations:
-- Ten (10) years after it is granted;
-- Three (3) months after Normal Termination, except
as otherwise provided by the Committee, or
-- Any earlier time set forth in the Stock Option
Agreement.
(ii) If the Holder terminates his relationship as an
officer, employee or director with the Company or a Subsidiary otherwise
than by Normal Termination or death, the Option shall lapse at the time of
termination.
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(iii) If the Holder dies within the Option Period or within
three (3) months after Normal Termination (or such other period as may have
been established by the Committee), the Option shall lapse unless it is
exercised within the Option Period and in no event later than twelve (12)
months after the date of Holder's death by the Holder's legal representative
or representatives or by the person or persons entitled to do so under the
Holder's last will and testament or, if the Holder shall fail to make
testamentary disposition of such Option or shall die intestate, by the
person entitled to receive said Option under the applicable laws of descent
and distribution.
(d) Stock Option Agreement. Each Option granted under the Plan
shall be evidenced by a "Stock Option Agreement" between the Company and the
Holder of the Option containing such provisions as may be determined by the
Committee, but shall be subject to the following terms and conditions.
(i) Each Option or portion thereof that is exercisable
shall be exercisable for the full amount or for any part thereof, except as
otherwise determined by the terms of the Stock Option Agreement.
(ii) Each share of Stock purchased through the exercise of
an Option shall be paid for in full at the time of the exercise. Each
Option shall cease to be exercisable, as to any share of Stock, when the
Holder purchases the share or exercises a related SAR or when the Option
lapses.
(iii) Options shall not be transferable by the Holder
except by will or the laws of descent and distribution and shall be
exercisable during the Holder's lifetime only by him or her.
(iv) Each Option shall become exercisable by the Holder in
accordance with the vesting schedule (if any) established by the Committee
for the Award.
(v) Each Stock Option Agreement may contain an agreement
that, upon demand by the Committee for such a representation, the Holder
shall deliver to the Committee at the time of any exercise of an Option a
written representation that the shares to be acquired upon such exercise are
to be acquired for investment and not for resale or with a view to the
distribution thereof. Upon such demand, delivery of such representation
prior to the delivery of any shares issued upon exercise of an Option shall
be a condition precedent to the right of the Holder or such other person to
purchase any shares. In the event certificates for Stock are delivered
under the Plan with respect to which such investment representation has been
obtained, the Committee may cause a legend or legends to be placed on such
certificates to make appropriate reference to such representation and to
restrict transfer in the absence of compliance with applicable federal or
state securities laws.
(e) Grants to 10% Holders of Company Voting Stock.
Notwithstanding Section 7(a), if an Incentive Stock Option is granted to a
Holder who owns stock representing more than ten percent (10%) of the voting
power of all classes of stock of the Company or of the Company and its
Subsidiaries, the period specified in the Stock Option Agreement for which
the Option thereunder is granted and at the end of which such Option shall
expire shall not exceed
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five (5) years from the Date of Grant of such Option and the Option Price
shall be at least one hundred ten percent (110%) of the Fair Market Value
(on the Date of Grant) of the Stock subject to the Option.
(f) Limitation. To the extent the aggregate Fair Market Value
(as determined as of the Date of Grant) of Stock for which Incentive Stock
Options are exercisable for the first time by any Participant during any
calendar year (under all plans of the Company and its Subsidiaries) exceeds
One Hundred Thousand Dollars ($100,000), such excess Incentive Stock Options
shall be treated as Nonqualified Stock Options.
(g) Voluntary Surrender. The Committee may permit the voluntary
surrender of all or any portion of any Nonqualified Stock Option and its
corresponding SAR, if any, granted under the Plan to be conditioned upon the
granting to the Holder of a new Option for the same or a different number of
shares as the Option surrendered or require such voluntary surrender as a
condition precedent to a grant of a new Option to such Participant. Such
new Option shall be exercisable at the Option Price, during the exercise
period, and in accordance with any other terms or conditions specified by
the Committee at the time the new Option is granted, all determined in
accordance with the provisions of the Plan without regard to the Option
Price, exercise period, or any other terms and conditions of the
Nonqualified Stock Option surrendered.
(h) Order of Exercise. Options granted under the Plan may be
exercised in any order, regardless of the Date of Grant or the existence of
any other outstanding Option.
(i) Notice of Disposition. Participants shall give prompt
notice to the Company of any disposition of Stock acquired upon exercise of
an Incentive Stock Option if such disposition occurs within either two (2)
years after the Date of Grant of such Option and/or one (1) year after the
receipt of such Stock by the Holder.
8. Stock Appreciation Rights. Any Option granted under the Plan may
include a SAR, either at the time of grant or by amendment except that in
the case of an Incentive Stock Option, such SAR shall be granted only at the
time of grant of the related Option. The Committee may also award to
Participants SARs independent of any Option. A SAR shall be subject to such
terms and conditions not inconsistent with the Plan as the Committee shall
impose, including, but not limited to, the following:
(a) Vesting. A SAR granted in connection with an Option shall
become exercisable, be transferable and shall lapse according to the same
vesting schedule, transferability and lapse rules that are established by
the Committee for the Option. A SAR granted independent of an Option shall
become exercisable, be transferable and shall lapse in accordance with a
vesting schedule, transferability and lapse rules established by the
Committee.
(b) Failure to Exercise. If on the last day of the Option
Period (or in the case of a SAR independent of an Option, the SAR period
established by the Committee), the Fair Market value of the Stock exceeds
the Option Price, the Holder has not exercised the Option or SAR, and
neither the Option nor the SAR has lapsed, such SAR shall be deemed to have
been
8
exercised by the Holder on such last day and the Company shall make the
appropriate payment therefor.
(c) Payment. The amount of additional compensation which may be
received pursuant to the award of one SAR is the excess, if any, of the Fair
Market Value of one share of Stock on the Appreciation Date over the Option
Price, in the case of a SAR granted in connection with an Option, or the
Fair Market Value of one (1) share of Stock on the Date of Grant, in the
case of a SAR granted independent of an Option. The Company shall pay such
excess in cash, in shares of Stock valued at Fair Market Value, or any
combination thereof, as determined by the Committee. Fractional shares
shall be settled in cash.
(d) Designation of Appreciation Date. A Participant may
designate an Appreciation Date at such time or times as may be determined by
the Committee at the time of grant by filing an irrevocable written notice
with the Committee or its designee, specifying the number of SARs to which
the Appreciation Date relates, and the date on which such SARs were awarded.
Such time or times determined by the Committee may take into account any
applicable "window periods" required by Rule 16b-3 under the Exchange Act.
(e) Expiration. Except as otherwise provided in the case of
SARs granted in connection with Options, the SARs shall expire on a date
designated by the Committee which is not later than ten (10) years after the
date on which the SAR was awarded.
9. Performance Shares.
(a) Award Grants. The Committee is authorized to establish
Performance Share programs to be effective over designated Award Periods of
not less than one (1) year nor more than five (5) years. At the beginning
of each Award Period, the Committee will establish in writing Performance
Goals based upon financial or other objectives for the Company for such
Award Period and a schedule relating the accomplishment of the Performance
Goals to the Awards to be earned by Participants. Performance Goals may
include absolute or relative growth in earnings per share or rate of return
on shareowners' equity or other measurement of corporate performance and may
be determined on an individual basis or by categories of Participants. The
Committee may adjust Performance Goals or performance measurement standards
as it deems equitable in recognition of extraordinary or non-recurring
events experienced during an Award Period by the Company, a Subsidiary or by
any other corporation whose performance is relevant to the determination of
whether Performance Goals have been attained. The Committee shall determine
the number of Performance Share Units to be awarded, if any, to each
Participant who is selected to receive an Award. The Committee may add new
Participants to a Performance Share program after its commencement by making
pro rata grants.
(b) Determination of Award. At the completion of a Performance
Share program, or at other times as specified by the Committee, the
Committee shall calculate the amount earned with respect to each
Participant's award by multiplying the Fair Market Value on the Valuation
Date by the number of Performance Share Units granted to the Participant and
multiplying the amount so determined by a performance factor representing
the degree of attainment of the Performance Goals.
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(c) Partial Awards. A Participant for less than a full Award
Period, whether by reason of commencement or termination of employment or
otherwise, shall receive such portion of an Award, if any, for that Award
Period as the Committee shall determine.
(d) Payment of Non-deferred Awards. The amount earned with
respect to an Award shall be fully payable in shares of Stock based on the
Fair Market Value on the Valuation Date; provided, however, that, at its
discretion, the Committee may vary such form of payment as to any
Participant upon the specific request of such Participant. Except as
provided in subparagraph 9(e), payments of Awards shall be made as soon as
practicable after the completion of an Award Period.
(e) Deferral of Payment. A Participant may file a written
election with the Committee to defer the payment of any amount otherwise
payable pursuant to subparagraph 9(d) on account of an Award to a period
commencing at such future date as specified in the election. Such election
must be filed with the Committee no later than the last day of the month
which is two-thirds of the way through the Award Period during which the
Award is earned, unless the Committee specifies an earlier filing date.
(f) Separate Accounts. At the conclusion of each Award Period,
the Committee shall cause a separate account to be maintained in the name of
each Participant with respect to whom all or a portion of an Award of
Performance Share Units earned under the Plan has been deferred. All
amounts credited to such account shall be fully vested at all times.
(g) Election of Form of Investment. Within sixty (60) days from
the end of each Award Period, and at such time or times, if any, as the
Committee may permit, a Participant may file a written election with the
Committee of the percentage of the deferred portion of any Award of
Performance Share Units which is to be expressed in the form of dollars and
credited with interest, the percentage of such Award which is to be
expressed in the form of Phantom Stock Units and the percentage of such
Award which is to be deemed invested in any other hypothetical investment
equivalent from time to time made available under the Plan by the Committee.
In the event a Participant fails to file an election within the time
prescribed, one hundred percent (100%) of the deferred portion of such
Participant's Award shall be expressed in the form of Phantom Stock Units.
(h) Interest Portion. The amount of interest credited with
respect to the portion of an Award credited to the Participant's account
which is deferred and credited with interest (the "Interest Portion") shall
be equal to the amount such portion would have earned had it been credited
with interest from the last day of the Award Period with respect to which
the Award was made until the seventh (7th) business day preceding the date
as of which payment is made, compounded annually, at the Company's rate of
return on shareowners' equity for each fiscal year that payment is deferred,
or at such other rate as the Committee may from time to time determine. The
Committee may, in its sole discretion, credit interest on amounts payable
prior to the date on which the Company's rate of return on shareowners'
equity becomes ascertainable at the rate applicable to deferred amounts
during the year immediately preceding the year of payment.
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(i) Phantom Stock Unit Portion. With respect to the portion of
an Award credited to the Participant's account which is deferred and
expressed in the form of Phantom Stock Units (the "Phantom Stock Unit
Portion"), the number of Phantom Stock Units so credited shall be equal to
the result of dividing (i) the Phantom Stock Unit Portion by (ii) the Fair
Market Value on the date the Award Period ended.
(j) Dividend Equivalents. Within thirty (30) days from the
payment of a dividend by the Company on its Stock, the Phantom Stock Unit
Portion of each Participant's account shall be credited with additional
Phantom Stock Units the number of which shall be determined by (i)
multiplying the dividend per share paid on the Company's Stock by the number
of Phantom Stock Units credited to his account at the time such dividend was
declared, then (ii) dividing such amount by the Fair Market Value on the
payment date for such dividend.
(k) Payment of Deferred Awards. Payment with respect to amounts
credited to the account of a Participant shall be made in a series of annual
installments over a period of ten (10) years, or such other period as the
Committee may direct, or as the Committee may allow the Participant to
elect, in either case at the time of the original deferral election. Except
as otherwise provided by the Committee, each installment shall be withdrawn
proportionately from the Interest Portion and from the Phantom Stock Unit
Portion of a Participant's account based on the percentage of the
Participant's account which he originally elected to be credited with
interest and with Phantom Stock Units, or, if a later election has been
permitted by the Committee and is then in effect, based on the percentage
specified in such later election. Payments shall commence on the date
specified by the Participant in his deferral election, unless the Committee
in its sole discretion determines that payment shall be made over a shorter
period or in more frequent installments, or commence on an earlier date, or
any or all of the above. If a Participant dies prior to the date on which
payment with respect to all amounts credited to his account shall have been
completed, payment with respect to such amounts shall be made to the
Participant's estate in a series of annual installments over a period of
five (5) years, unless the Committee in its sole discretion determines that
payment shall be made over a shorter period or in more frequent
installments, or both. To the extent practicable, each installment payable
hereunder shall approximate that part of the amount then credited to the
Participant's or his estate's account which, if multiplied by the number of
installments remaining to be paid would be equal to the entire amount then
credited to the Participant's account.
(l) Composition of Payment. The Committee shall cause all
payments with respect to deferred Awards to be made in a manner such that
not more than one-half of the value of each installment shall consist of
Stock. To that end, payment with respect to the Interest Portion and the
Phantom Stock Unit Portion of a Participant's account shall be paid in cash
and Stock as the Committee shall determine in its sole discretion. The
determination of any amount to be paid in cash for Phantom Stock Units shall
be made by multiplying (i) the Fair Market Value of one share of Stock on
the date as of which payment is made, by (ii) the number of Phantom Stock
Units for which payment is being made. The determination of the number of
shares of Stock, if any, to be distributed with respect to the Interest
Portion of a Participant's account shall be made by dividing (i) one-half of
the value of such portion on the date as of which payment is made, by (ii)
the Fair Market Value of one (1) share of Stock on such date. Fractional
shares shall be paid in cash.
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(m) Alternative Investment Equivalents. If the Committee shall
have permitted Participants to elect to have deferred Awards of Performance
Share Units invested in one or more hypothetical investment equivalents
other than interest or Phantom Stock Units, such deferred Awards shall be
credited with hypothetical investment earnings at such rate, manner and time
as the Committee shall determine. At the end of the deferral period,
payment shall be made in respect of such hypothetical investment equivalents
in such manner and at such time as the Committee shall determine.
(n) Adjustment of Performance Goals. The Committee may, during
the Award Period, make such adjustments to Performance Goals as it may deem
appropriate, to compensate for, or reflect, any significant changes that may
have occurred during such Award Period in (i) applicable accounting rules or
principles or changes in the Company's method of accounting or in that of
any other corporation whose performance is relevant to the determination of
whether an Award has been earned or (ii) tax laws or other laws or
regulations that alter or affect the computation of the measures of
Performance Goals used for the calculation of Awards.
10. Restricted Stock Awards and Phantom Stock Units.
(a) Award of Restricted Stock and Phantom Stock Units.
(i) The Committee shall have the authority (1) to grant
Restricted Stock and Phantom Stock Unit Awards, (2) to issue or transfer
Restricted Stock to Participants, and (3) to establish terms, conditions and
restrictions applicable to such Restricted Stock and Phantom Stock Units,
including the Restricted Period, which may differ with respect to each
grantee, the time or times at which Restricted Stock or Phantom Stock Units
shall be granted or become vested and the number of shares or units to be
covered by each grant.
(ii) The Holder of a Restricted Stock Award shall execute
and deliver to the Secretary of the Company an agreement with respect to
Restricted Stock and escrow agreement satisfactory to the Committee and the
appropriate blank stock powers with respect to the Restricted Stock covered
by such agreements and shall pay to the Company, as the purchase price of
the shares of Stock subject to such Award, the aggregate par value of such
shares of Stock within sixty (60) days following the making of such Award.
If a Participant shall fail to execute the agreement, escrow agreement and
stock powers or shall fail to pay such purchase price within such period,
the Award shall be null and void. Subject to the restrictions set forth in
Section 10(b), the Holder shall generally have the rights and privileges of
a shareowner as to such Restricted Stock, including the right to vote such
Restricted Stock. At the discretion of the Committee, cash and stock
dividends with respect to the Restricted Stock may be either currently paid
or withheld by the Company for the Holder's account, and interest may be
paid on the amount of cash dividends withheld at a rate and subject to such
terms as determined by the Committee. Cash or stock dividends so withheld
by the Committee shall not be subject to forfeiture.
(iii) In the case of a Restricted Stock Award, the
Committee shall then cause stock certificates registered in the name of the
Holder to be issued and deposited together with the stock powers with an
escrow agent to be designated by the Committee. The Committee
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shall cause the escrow agent to issue to the Holder a receipt evidencing any
stock certificate held by it registered in the name of the Holder.
(iv) In the case of a Phantom Stock Units Award, no shares
of Stock shall be issued at the time the Award is made, and the Company will
not be required to set aside a fund for the payment of any such Award. The
Committee shall, in its sole discretion, determine whether to credit to the
account of, or to currently pay to, each Holder of an Award of Phantom Stock
Units an amount equal to the cash dividends paid by the Company upon one
share of Stock for each Phantom Stock Unit then credited to such Holder's
account ("Dividend Equivalents"). Dividend Equivalents credited to Holder's
account shall be subject to forfeiture and may bear interest at a rate and
subject to such terms as determined by the Committee.
(b) Restrictions.
(i) Restricted Stock awarded to a Participant shall be
subject to the following restrictions until the expiration of the Restricted
Period: (1) the Holder shall not be entitled to delivery of the stock
certificate; (2) the shares shall be subject to the restrictions on
transferability set forth in the grant; (3) the shares shall be subject to
forfeiture to the extent provided in subparagraph (d) and, to the extent
such shares are forfeited, the stock certificates shall be returned to the
Company, and all rights of the Holder to such shares and as a shareowner
shall terminate without further obligation on the part of the Company.
(ii) Phantom Stock Units awarded to any Participant shall
be subject to the following restrictions until the expiration of the
Restricted Period: (1) the units shall be subject to forfeiture to the
extent provided in subparagraph (d), and to the extent such units are
forfeited, all rights of the Holder to such units shall terminate without
further obligation on the part of the Company and (2) any other restrictions
which the Committee may determine in advance are necessary or appropriate.
(iii) The Committee shall have the authority to remove any
or all of the restrictions on the Restricted Stock and Phantom Stock Units
whenever it may determine that, by reason of changes in applicable laws or
other changes in circumstances arising after the date of the Restricted
Stock Award or Phantom Stock Award, such action is appropriate.
(c) Restricted Period. The Restricted Period of Restricted
Stock and Phantom Stock Units shall commence on the Date of Grant and shall
expire from time to time as to that part of the Restricted Stock and Phantom
Stock Units indicated in a schedule established by the Committee with
respect to the Award.
(d) Forfeiture Provisions. In the event a Holder terminates
employment or service as a director during a Restricted Period, that portion
of the Award with respect to which restrictions have not expired
("Non-Vested Portion") shall be treated as follows.
(i) Resignation or discharge:
-- The Non-Vested Portion of the Award shall be
completely forfeited.
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(ii) Normal Termination:
-- The Non-Vested Portion of the Award shall be
prorated for service during the Restricted Period
and shall be received as soon as practicable
following termination.
(iii) Death:
-- The Non-Vested Portion of the Award shall be
prorated for service during the Restricted Period
and paid to the Participant's estate as soon as
practicable following death.
(e) Delivery of Restricted Stock and Settlement of Phantom Stock
Units. Upon the expiration of the Restricted Period with respect to any
shares of Stock covered by a Restricted Stock Award, a stock certificate
evidencing the shares of Restricted Stock which have not then been forfeited
and with respect to which the Restricted Period has expired (to the nearest
full share) shall be delivered without charge to the Holder, or his estate,
free of all restrictions under the Plan.
Upon the expiration of the Restricted Period with respect to
any Phantom Stock Units covered by a Phantom Stock Unit Award, the Company
shall deliver to the Holder or his estate without any charge one share of
Stock for each Phantom Stock Unit which has not then been forfeited and with
respect to which the Restricted Period has expired ("vested unit") and cash
equal to any Dividend Equivalents credited with respect to each such vested
unit and the interest thereon, if any; provided, however, that the Committee
may, in its sole discretion, elect to pay cash or part cash and part Stock
in lieu of delivering only Stock for vested units. If cash payment is made
in lieu of delivering Stock, the amount of such payment shall be equal to
the Fair Market Value for the date on which the Restricted Period lapsed
with respect to such vested unit.
(f) Payment for Restricted Stock. Except as provided in
subparagraph 10(a)(ii), a Holder shall not be required to make any payment
for Stock received pursuant to a Restricted Stock Award.
11. General.
(a) Additional Provisions of an Award. The award of any benefit
under the Plan may also be subject to such other provisions (whether or not
applicable to the benefit awarded to any other Participant) as the Committee
determines appropriate including, without limitation, provisions to assist
the Participant in financing the purchase of Common Stock through the
exercise of Options, provisions for the forfeiture of or restrictions on
resale or other disposition of shares acquired under any form of benefit,
provisions giving the Company the right to repurchase shares acquired under
any form of benefit in the event the Participant elects to dispose of such
shares, and provisions to comply with Federal and state securities laws and
Federal and state income tax withholding requirements.
(b) Privileges of Stock Ownership. Except as otherwise
specifically provided in the Plan, no person shall be entitled to the
privileges of stock ownership in respect of shares of
14
stock which are subject to Options or Restricted Stock Awards, Performance
Share Unit Awards or Phantom Stock Unit Awards hereunder until such shares
have been issued to that person upon exercise of an Option according to its
terms or upon sale or grant of those shares in accordance with a Restricted
Stock Award, Performance Share Unit Award or Phantom Stock Unit Award.
(c) Government and Other Regulations. The obligation of the
Company to make payment of Awards in Stock or otherwise shall be subject to
all applicable laws, rules, and regulations, and to such approvals by
governmental agencies as may be required. The Company shall be under no
obligation to register under the Securities Act any of the shares of Stock
issued under the Plan. If the shares issued under the Plan may in certain
circumstances be exempt from registration under the Securities Act, the
Company may restrict the transfer of such shares in such manner as it deems
advisable to ensure the availability of any such exemption.
(d) Tax Withholding. Notwithstanding any other provision of the
Plan, the Company or a Subsidiary, as appropriate, shall have the right to
deduct from all Awards, to the extent paid in cash, all federal, state or
local taxes as required by law to be withheld with respect to such Awards
and, in the case of Awards paid in Stock, the Holder or other person
receiving such Stock may be required to pay to the Company or a Subsidiary,
as appropriate prior to delivery of such Stock, the amount of any such taxes
which the Company or Subsidiary is required to withhold, if any, with
respect to such Stock. Subject in particular cases to the disapproval of the
Committee, the Company may accept shares of Stock of equivalent Fair Market
Value in payment of such withholding tax obligations if the Holder of the
Award elects to make payment in such manner at least six months prior to the
date such tax obligation is determined.
(e) Claim to Awards and Employment Rights. No employee or other
person shall have any claim or right to be granted an Award under the Plan
nor, having been selected for the grant of an Award, to be selected for a
grant of any other Award. Neither this Plan nor any action taken hereunder
shall be construed as giving any Participant any right to be retained in the
employ of the Company or a Subsidiary.
(f) Conditions. Each Participant to whom Awards are granted
under the Plan shall be required to enter into an Incentive Plan Agreement
in a form authorized by the Committee, which may include provisions that
the Participant shall not disclose any confidential information of the
Company or any of its Subsidiaries acquired during the course of such
Participant's employment.
(g) Payments Upon Death of Participant. Upon the death of a
Participant in the Plan, the Company shall pay the amounts payable with
respect to an Award of Performance Share Units, Phantom Share Units or
Restricted Stock, if any, due under the Plan to the Participant's estate.
(h) Payments to Persons Other than Participants. If the
Committee shall find that any person to whom any amount is payable under the
Plan is unable to care for his affairs because of illness or accident, or is
a minor, or has died, then any payment due to such person or his estate
(unless a prior claim therefor has been made by a duly appointed legal
representative), may, if the Committee so directs the Company, be paid to
his spouse, child, relative, an
15
institution maintaining or having custody of such person, or any other
person deemed by the Committee to be a proper recipient on behalf of such
person otherwise entitled to payment. Any such payment shall be a complete
discharge of the liability of the Committee and the Company therefor.
(i) No Liability of Committee Members. No member of the
Committee shall be personally liable by reason of any contract or other
instrument executed by such member or on his behalf in his capacity as a
member of the Committee nor for any mistake of judgment made in good faith,
and the Company shall indemnify and hold harmless each member of the Board
and each other employee, officer or director of the Company to whom any duty
or power relating to the administration or interpretation of the Plan may be
allocated or delegated, against any cost or expense (including counsel fees)
or liability (including any sum paid in settlement of a claim) arising out
of any act or omission to act in connection with the Plan unless arising out
of such person's own fraud or bad faith; provided, however, that approval of
the Board shall be required for the payment of any amount in settlement of a
claim against any such person. The foregoing right of indemnification shall
not be exclusive of any other rights of indemnification to which such
persons may be entitled under the Company's Articles of Incorporation or
By-Laws, as a matter of law, or otherwise, or any power that the Company may
have to indemnify them or hold them harmless.
(j) Governing Law. The Plan will be administered in accordance
with federal laws, or in the absence thereof, the laws of the State of
Florida.
(k) Funding. Except as provided under Section 10, no provision
of the Plan shall require the Company, for the purpose of satisfying any
obligations under the Plan, to purchase assets or place any assets in a
trust or other entity to which contributions are made or otherwise to
segregate any assets, nor shall the Company maintain separate bank accounts,
books, records, or other evidence of the existence of a segregated or
separately maintained or administered fund for such purposes. Holders shall
have no rights under the Plan other than as unsecured general creditors of
the Company, except that insofar as they may have become entitled to payment
of additional compensation by performance of services, they shall have the
same rights as other employees under general law.
(l) Nontransferability. A person's rights and interest under the
Plan, including amounts payable, may not be sold, assigned, donated or
transferred or otherwise disposed of, mortgaged, pledged or encumbered
except by will or the laws of descent and distribution.
(m) Reliance on Reports. Each member of the Committee shall be
fully justified in relying, acting or failing to act, and shall not be
liable for having so relied, acted or failed to act in good faith, upon any
report made by the independent public accountant of the Company and its
Subsidiaries and upon any other information furnished in connection with the
Plan by any person or persons other than himself.
(n) Relationship to Other Benefits. No payment under the Plan
shall be taken into account in determining any benefits under any pension,
retirement, profit sharing, group insurance or other benefit plan of the
Company or any Subsidiary except as otherwise specifically provided.
16
(o) Expenses. The expenses of administering the Plan shall be
borne by the Company and its Subsidiaries.
(p) Pronouns. Masculine pronouns and other words of masculine
gender shall refer to both men and women.
(q) Titles and Headings. The titles and headings of the
sections in the Plan are for convenience of reference only, and in the event
of any conflict, the text of the Plan, rather than such titles or headings
shall control.
12. Changes in Capital Structure. Unless the Committee specifically
determines otherwise, options, SARs, Restricted Stock Awards, Phantom Stock
Unit Awards, Performance Share Unit Awards, and any agreements evidencing
such Awards, and Performance Goals, shall be subject to adjustment or
substitution as to the number, price or kind of a share of Stock or other
consideration subject to such Awards or as otherwise determined by the
Committee to be equitable (i) in the event of changes in the outstanding
Stock or in the capital structure of the Company, or of any other
corporation whose performance is relevant to the attainment of Performance
Goals hereunder, by reason of stock dividends, stock splits,
recapitalizations, reorganizations, mergers, consolidations, combinations,
exchanges or other relevant changes in capitalization occurring after the
Date of Grant of any such Award or (ii) in the event of any change in
applicable laws or any change in circumstances which results in or would
result in any substantial dilution or enlargement of the rights granted to,
or available for, Participants in the Plan, or which otherwise warrants
equitable adjustment because it interferes with the intended operation of
the Plan. In addition, unless the Committee specifically determines
otherwise, in the event of any such adjustments or substitution, the
aggregate number of shares of Stock available under the Plan shall be
appropriately adjusted by the Committee, whose determination shall be
conclusive. Any adjustment in Incentive Stock Options under this Section 12
shall be made only to the extent not constituting a "modification" within
the meaning of Section 424(h)(3) of the Code, and any adjustments under this
Section 12 shall be made in a manner which does not adversely affect the
exemption provided pursuant to Rule 16b-3 under the Exchange Act. The
Company shall give each Participant notice of an adjustment hereunder and,
upon notice, such adjustment shall be conclusive and binding for all
purposes.
13. Effect of Change in Control.
(a) In the event of a Change in Control, notwithstanding any
vesting schedule provided for hereunder or by the Committee with respect to
an Award of Options, SARs, Phantom Stock Units or Restricted Stock, such
Option or SAR shall become immediately exercisable with respect to one
hundred percent (100%) of the shares subject to such Option or SAR, and the
Restricted Period shall expire immediately with respect to one hundred
percent (100%) of the Phantom Stock Units or shares of Restricted Stock
subject to Restrictions; provided, however, that to the extent that so
accelerating the time an Incentive Stock Option may first be exercised would
cause the limitation provided in Section 7(f) to be exceeded, such Options
shall instead first become exercisable in so many of the next following
years as is necessary to comply with such limitation.
17
(b) In the event of a Change in Control, all incomplete Award
Periods in effect on the date the Change in Control occurs shall end on the
date of such change, and the Committee shall, (i) determine the extent to
which Performance Goals with respect to each such Award Period have been met
based upon such audited or unaudited financial information then available as
it deems relevant, (ii) cause to be paid to each Participant partial or full
Awards with respect to Performance Goals for each such Award Period based
upon the Committee's determination of the degree of attainment of
Performance Goals, and (iii) cause all previously deferred Awards to be
settled in full as soon as possible.
(c) The obligations of the Company under the Plan shall be
binding upon any successor corporation or organization resulting from the
merger, consolidation or other reorganization of the Company, or upon any
successor corporation or organization succeeding to substantially all of the
assets and business of the Company. The Company agrees that it will make
appropriate provisions for the preservation of Participant's rights under
the Plan in any agreement or plan which it may enter into or adopt to effect
any such merger, consolidation, reorganization or transfer of assets.
14. Nonexclusivity of the Plan. Neither the adoption of this Plan by
the Board nor the submission of this Plan to the shareowners of the Company
for approval shall be construed as creating any limitations on the power of
the Board to adopt such other incentive arrangements as it may deem
desirable, including, without limitation, the granting of stock options
otherwise than under this Plan, and such arrangements may be either
applicable generally or only in specific cases.
15. Amendments and Termination.
(a) The Committee may, without further action by the shareowners
and without receiving further consideration from the participants, amend
this Plan or condition or modify awards under this Plan in response to
changes in securities or other laws or rules, regulations or regulatory
interpretations thereof applicable to this Plan or to comply with applicable
self-regulatory organization rules or requirements.
(b) The Committee may at any time and from time to time
terminate or modify or amend the Plan in any respect, except that, without
shareowner approval, the Committee may not materially amend the Plan,
including, but not limited to, the following:
(i) materially increase the number of shares of Common
Stock to be issued under the Plan (other than pursuant to Sections 12 and
15(a));
(ii) materially increase benefits to participants,
including any material change to (A) permit a repricing (or decrease in
exercise price) of outstanding Stock Options, (B) reduce the price at which
Stock Options may be offered, or (C) extend the duration of the Plan;
(iii) materially expand the class of participants eligible
to participate in the Plan; and
(iv) expand the types of Stock Options or other awards
provided under the Plan.
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(c) The termination or any modification or amendment of the
Plan, except as provided in subsection (a), shall not without the consent of
a participant, affect his or her rights under an award previously granted to
him or her.
* * *
As adopted by the Board of Directors of
Capital City Bank Group, Inc. effective
as of January 1, 2005.