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As filed with the Securities and Exchange Commission on May 20, 1996
Registration No. 33-_____
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U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.
FORM SB-2
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
COMMUNITY CENTRAL BANK CORPORATION
(Name of small business issuer as in its charter)
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Michigan 6712 38-3291744
(State or other jurisdiction Primary Standard Industrial (I.R.S. Employer
of incorporation or organization) Classification Code Number Identification No.)
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100 NORTH MAIN STREET, P.O. BOX 7
MOUNT CLEMENS, MICHIGAN 48046-0007
(810) 783-4500
(Address and telephone number of principal executive
offices and principal place of business or intended principal place of
business)
HAROLD W. ALLMACHER, CHAIRMAN
100 NORTH MAIN STREET, P.O. BOX 7
MOUNT CLEMENS, MICHIGAN 48046-0007
(810) 783-4500
(Name, address, and telephone number of agent for service)
Copies to:
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JEROME M. SCHWARTZ GORDON R. LEWIS
DICKINSON, WRIGHT, MOON, VAN DUSEN & FREEMAN WARNER NORCROSS & JUDD LLP
500 WOODWARD AVENUE, SUITE 4000 111 LYON STREET, SUITE 900
DETROIT, MICHIGAN 48226 GRAND RAPIDS, MICHIGAN 49503
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Approximate date of proposed sale to the public: As soon as practicable after
the Registration Statement becomes effective.
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
CALCULATION OF REGISTRATION FEE
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TITLE OF EACH CLASS AMOUNT TO BE PROPOSED MAXIMUM PROPOSED MAXIMUM AMOUNT OF
OF SECURITIES TO BE REGISTERED (1) OFFERING PRICE PER AGGREGATE OFFERING REGISTRATION FEE
REGISTERED SHARE PRICE(1)
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Common Stock 948,750 shrs. $10 $9,487,500 $3,271.55
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(1) Includes 123,750 shares of Common Stock which may be purchased by the
Underwriters to cover over-allotments.
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THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SECTION 8(a) OF
THE SECURITIES ACT OF 1933, MAY DETERMINE.
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CROSS REFERENCE SHEET
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Location or Caption
Item Number of Form SB-2 in Prospectus
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1. Front of Registration Statement and Outside Front Outside Front Cover Page
Cover Page of Prospectus . . . . . . . . . . . .
2. Inside Front and Outside Back Cover Pages of Inside Front Cover Page; Additional Information; Outside
Prospectus . . . . . . . . . . . . . . . . . . . . . . Back Cover Page
3. Summary Information and Risk Factors . . . . . . . . . Prospectus Summary; Risk Factors
4. Use of Proceeds . . . . . . . . . . . . . . . . . . . . Use of Proceeds
5. Determination of Offering Price . . . . . . . . . . . . Risk Factors - Determination of Offering Price;
Underwriting
6. Dilution . . . . . . . . . . . . . . . . . . . . . . . Not Applicable
7. Selling Security Holders . . . . . . . . . . . . . . . Not Applicable
8. Plan of Distribution . . . . . . . . . . . . . . . . . Outside Front Cover Page; Underwriting
9. Legal Proceedings . . . . . . . . . . . . . . . . . . . Legal Proceedings
10. Directors, Executive Officers, Promoters and Control Management
Persons . . . . . . . . . . . . . . . . . . . . . . . .
11. Security Ownership of Certain Beneficial Owners and Principal Shareholders
Management . . . . . . . . . . . . . . . . . . . . . .
12. Description of Securities . . . . . . . . . . . . . . . Outside Front Cover Page; Description of Capital Stock
13. Interest of Named Experts and Counsel . . . . . . . . . Experts; Legal Matters
14. Disclosure of Commission Position on Description of Capital Stock-Limitation of Liability and
Indemnification for Securities Act Liabilities . . . . Indemnification of Directors and Officers; Underwriting;
Additional Information; Part II, Item 24
15. Organization Within Last Five Years . . . . . . . . . . Related Party Transactions
16. Description of Business . . . . . . . . . . . . . . . . Business
17. Management's Discussion and Analysis or Plan of Business-Plan of Operations
Operation . . . . . . . . . . . . . . . . . . . . . . .
18. Description of Property . . . . . . . . . . . . . . . . Business-Bank Premises
19. Certain Relationships and Related Transactions . . . . Related Party Transactions
20. Market for Common Equity and Related Outside Front Cover Page; Risk Factors-No Prior Public
Shareholder Matters . . . . . . . . . . . . . . . . . . Market; Limited Trading Market Expected
21. Executive Compensation . . . . . . . . . . . . . . . . Management-Director and Executive Officer Compensation
22. Financial Statements . . . . . . . . . . . . . . . . . Financial Statements
23. Changes in and Disagreement with Accountants on
Accounting and Financial Disclosure . . . . . . . . . . Not Applicable
24. Indemnification of Directors and Officers . . . . . . . Description of Capital Stock-Limitation of Liability and
Indemnification of Directors and Officers; Part II
25. Other Expenses of Issuance and Distribution . . . . . . Part II
26. Recent Sales of Unregistered Securities . . . . . . . Part II
27. Exhibits . . . . . . . . . . . . . . . . . . . . . . . Part II; Exhibits
28. Undertakings . . . . . . . . . . . . . . . . . . . . . Part II
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INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR
MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT
BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR
THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE
SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE
UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS
OF ANY SUCH STATE.
SUBJECT TO COMPLETION, DATED MAY 20, 1996
PROSPECTUS
825,000 SHARES
COMMUNITY CENTRAL BANK CORPORATION LOGO
COMMON STOCK
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Community Central Bank Corporation, a Michigan corporation (the "Company")
is offering for sale 825,000 shares of its Common Stock (the "Common Stock").
The Company is a proposed bank holding company organized to own all of the
common stock of Community Central Bank, a Michigan banking corporation (in
organization) to be located in Mount Clemens, Michigan (the "Bank"). Neither the
Company nor the Bank has ever conducted any business operations other than
matters related to their initial organization and the raising of capital. See
"Business." There has been no public trading market for the Common Stock. Roney
& Co. has advised the Company that it anticipates making a market in the Common
Stock following completion of the offering, although there can be no assurance
that an active trading market will develop. See "Underwriting" for a discussion
of the factors considered in determining the initial public offering price. The
Company expects that the quotations for the Common Stock will be reported on the
OTC Bulletin Board. The directors of the Company are expected to purchase at
least 210,000 of the shares of Common Stock at the public offering price.
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THE COMMON STOCK OFFERED BY THIS PROSPECTUS INVOLVES A SIGNIFICANT
AMOUNT OF RISK. SEE "RISK FACTORS" ON PAGE 5 FOR CERTAIN
CONSIDERATIONS RELEVANT TO AN INVESTMENT IN
THE COMPANY'S COMMON STOCK.
THESE SECURITIES ARE NOT SAVINGS ACCOUNTS OR SAVINGS DEPOSITS AND THEY ARE NOT
INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR
ANY OTHER GOVERNMENT AGENCY.
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
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PRICE TO UNDERWRITING PROCEEDS TO
PUBLIC DISCOUNT(1)(2) COMPANY(2)(3)
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Per Share............................. $10.00 $ $
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Total(2).............................. $8,250,000 $ $
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(1) The Company has agreed to indemnify the Underwriters against certain
liabilities including liabilities under the Securities Act of 1933. See
"Underwriting".
(2) The Company has granted the Underwriters a 30-day option to purchase up to
123,750 additional shares of its Common Stock solely to cover
over-allotments, if any. If the Underwriters exercise such option in full,
the Price to Public, Underwriting Discounts, and Proceeds to Company will be
approximately $ , $ and $ , respectively. See
"Underwriting." The Underwriters have agreed that no Underwriting Discounts
will be incurred by the Company for shares sold by the Underwriters to
members of the Board of Directors or their immediate families. See
"Underwriting." Members of the Board of Directors have provided nonbinding
expressions of interest to purchase a total of approximately 210,000 shares.
If 210,000 shares are so purchased, Underwriting Discounts will be reduced
by, and proceeds to the Company will be increased by $ .
(3) Before deducting estimated offering expenses payable by the Company of
$ .
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The shares of Common Stock are offered severally by the Underwriters
subject to prior sale, when, as and if delivered to and accepted by them, and
subject to the right of the Underwriters to withdraw, cancel or modify such
offer and to reject orders in whole or in part. It is expected that delivery of
the shares of Common Stock will be made in Detroit, Michigan on or about
, 1996.
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(RONEY & CO. LOGO)
THE DATE OF THIS PROSPECTUS IS , 1996.
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State of Michigan Map
Map of County of Macomb
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AVAILABLE INFORMATION
The Company is not currently a reporting company pursuant to the Securities
Exchange Act of 1934 (the "Exchange Act"), but will be required to file reports
pursuant to the Exchange Act following the completion of the offering. The
Company, which will use a December 31 fiscal year, intends to furnish its
shareholders with annual reports containing audited financial information and,
for the first three quarters of each fiscal year, quarterly reports containing
unaudited financial information.
Requests for such documents should be directed to Celestina Giles,
Corporate Secretary, 100 North Main Street, P.O. Box 7, Mount Clemens, Michigan
48046-0007.
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IN CONNECTION WITH THE OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE COMMON STOCK OF
THE COMPANY AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN
MARKET. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
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PROSPECTUS SUMMARY
The following summary is qualified in its entirety by the more detailed
information and financial statements appearing elsewhere in this Prospectus.
Unless the context clearly suggests otherwise, references in this Prospectus to
the Company include the Bank. Except as otherwise indicated, all information in
this Prospectus assumes no exercise of the Underwriters' over-allotment option.
THE COMPANY
The Company was incorporated on April 26, 1996 under Michigan law and will
be a bank holding company owning all of the common stock of the Bank. The Bank
is organizing as a Michigan banking corporation with depository accounts to be
insured by the Bank Insurance Fund of the Federal Deposit Insurance Corporation
(the "FDIC"). The Bank intends to provide a range of commercial and consumer
banking services primarily in the communities of Macomb County, Michigan,
including Mount Clemens, Clinton Township, Harrison Township, Chesterfield
Township, and Macomb Township. Those services will reflect the Bank's intended
strategy of serving small to medium size businesses, and individual customers in
its market area. The Bank's retail banking strategy will initially focus on
providing attractive products and services, including computer home banking,
telephone banking and automated bill paying services to individuals in the
bank's market area. Completion of the offering will be conditioned on the
Company and the Bank having received all necessary regulatory approvals, subject
to the satisfaction of certain conditions. Management anticipates commencing
business in temporary facilities late in the third quarter of 1996, and moving
its business to its permanent leased facilities late in the fourth quarter of
1996.
REASON FOR STARTING COMMUNITY CENTRAL BANK
The liberalization in recent years of Michigan's branch banking laws,
together with the expansion of interstate banking, has led to substantial
consolidation of the banking industry in Michigan and especially the
Metropolitan Detroit area in which the Bank will be located. In many cases, when
these consolidations occurred, local boards of directors were dissolved and
local management relocated or in some cases terminated.
In the opinion of the Company's management, this situation has created a
favorable opportunity for a new commercial bank with local management and local
directors. Management believes that such a bank can be successful in attracting
small to medium sized businesses and individuals as customers who wish to
conduct business with a locally owned and managed institution that demonstrates
an active interest in their business and personal financial affairs. The Bank
will seek to take advantage of this opportunity by emphasizing in its marketing
plan the Bank's local management, their strong ties and active commitment to the
community.
MARKET AREA
The Bank's main office will be located on a prominent corner at 100 North
Main Street in downtown Mount Clemens, Michigan. The Bank will be leasing a
building at the crossroads of North Main Street and Market Street that is being
renovated for the Bank.
Macomb County is one of the fastest growing communities in Michigan and has
a stable and diverse economic base. Macomb County, which is comprised of 27
cities, villages or townships, ranks third in population out of Michigan's 83
counties and 47th out of 3,100 counties nationally. With a current population of
over 700,000, Macomb County covers 482 square miles and is home to over 15,000
businesses. Macomb County is also an active boating center with 31 miles of
coastline on Lake St. Clair and over 40,000 registered pleasure craft.
Macomb County is also a large banking market. According to available
industry data, as of June 30, 1995 total deposits in this market, including
banks, thrifts and credit unions, were approximately $10.2 billion.
The Bank's main office will also serve as the Company's corporate
headquarters. The Company's address will be 100 North Main Street, Mount
Clemens, Michigan 48043. The Company's telephone number is (810) 783-4500.
MANAGEMENT
The Company has assembled a management team, including the Board of
Directors, with strong business experience in the Bank's market area and a
shared vision and commitment to the future growth and success of the Bank.
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Harold W. Allmacher, Chairman and Chief Executive Officer of the Company,
has over 30 years of banking experience in the Bank's market area. Mr. Allmacher
was President and Chief Executive Officer of First National Bank Corporation
("FNBC"), a bank holding company with over $500,000,000 of assets at the time of
its acquisition in February of 1995 by Old Kent Financial Corporation ("Old
Kent"). Mr. Allmacher served as Chief Executive Officer of FNBC for 10 years.
Richard J. Miller, President and Treasurer of the Company, was corporate
treasurer of FNBC at the time of its acquisition by Old Kent. Mr. Miller has
over 15 years experience in bank financial, accounting and operations positions.
Mr. Allmacher and Mr. Miller are assembling a staff that will include
several former officers of FNBC or its subsidiary, First National Bank in Macomb
County ("FNB"). The Bank intends to compete aggressively for its banking
business through a systematic program of direct calling on both prospective
customers and referral sources such as attorneys, accountants and other business
people many of whom the management have come to know during their professional
careers. Andrew Tassopoulos, formerly a vice president of commercial lending at
FNB, where he spent 10 years, is expected to be the senior loan officer in
charge of the Bank's commercial and retail lending operations. Ken Flynn,
formerly a vice president in charge of mortgage lending at FNB, with over 20
years of banking experience, is expected to head up the Bank's mortgage lending
department.
The Company has formed a Board of Directors comprised of individuals with a
broad background in business, real estate, banking and education. Current
directors include Harold Allmacher, Celestina Giles, Gebran Anton and Raymond
Contesti, all former directors of FNBC or FNB. Mr. Anton is also a director of
Chateau Properties, Inc., a publicly held real estate investment trust traded on
the New York Stock Exchange.
The Board of Directors of the Company anticipates that its members, alone
or with their spouses, will purchase at least 210,000 shares of the Common Stock
in the offering. See "Principal Shareholders".
This management team represents a significant asset to the Company and the
Bank. Many of the individuals who will be working for the Bank have many years
experience individually, as well as in some cases having worked together
successfully at FNB. The officer staff currently assembled by the Company
represents a wide range of business, banking and investment knowledge and
experience. The Company believes that these individuals and their relationships
in the Bank's market area should offer the Bank a substantial opportunity to
attract new relationships.
THE OFFERING
Securities offered by the
Company........................ 825,000 shares of Common Stock. In
addition, the Company has granted the
Underwriters an option to purchase up to an
additional 123,750 shares to cover
over-allotments. See "Description of
Capital Stock."
Common Stock to be outstanding
after the offering............. 825,000 shares (948,750 shares if the
over-allotment option is exercised in
full).
Use of proceeds by the
Company........................ Capitalization of the Bank and payment of
organization and preopening expenses. See
"Use of Proceeds."
Proposed NASD Over the Counter
Bulletin Board Symbol.......... CCBK
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RISK FACTORS
The Common Stock offered hereby involves a high degree of risk and should be
considered only by persons who can afford the loss of their investment. The
following constitute some of the potential risks of an investment in the Common
Stock and should be carefully considered by prospective investors prior to
purchasing shares of Common Stock. The order of the following is not intended
to be indicative of the relative importance of any described risk nor is the
following intended to be inclusive of all risks of investment in the Common
Stock.
LACK OF OPERATING HISTORY
Neither the Company nor the Bank has any operating history. The business of
the Company and the Bank is subject to the risks inherent in the establishment
of a new business enterprise. Because the Company is only recently formed and
the Bank and the Company are in the process of obtaining the necessary
regulatory approvals, subject to the satisfaction of certain conditions, but
the Bank has not commenced banking operations as of the date hereof,
prospective investors do not have access to all of the information that, in
assessing their proposed investment, is available to the purchasers of
securities of a financial institution with a history of operations.
SIGNIFICANT LOSSES EXPECTED
As a result of the substantial start-up expenditures that must be incurred by a
new bank and the time it will take to develop its deposit base and loan
portfolio, it is expected that the Bank, and thus the Company, will operate at
a substantial loss during the start-up of the Bank. Accordingly, they are not
expected to be profitable for at least the first two years. Cumulative losses
during the first two years of operation are expected to exceed $1 million.
There is no assurance that the Bank will ever operate profitably. As a result,
it is anticipated that the book value of the Common Stock will decrease
accordingly. If the Company does not reach profitability and recover its
accumulated operating losses and the non-recoverable portion of its investment
in fixed assets, investors in the offering would likely suffer a significant
decline in the value of their shares of Common Stock.
DELAY IN COMMENCING OPERATIONS
Although the Company and the Bank expect to receive all regulatory approvals
and commence business in temporary facilities late in the third quarter of
1996, and complete construction of, and move into their permanent leased
facilities late in the fourth quarter of 1996, there can be no assurance as to
when, if at all, these events will occur. Any delay in commencing operations
will increase pre-opening expenses and postpone realization by the Bank of
potential revenues. Absent the receipt of revenues and commencement of
profitable operations, the Company's accumulated deficit will continue to
increase (and book value per share decrease) as operating expenses such as
salaries and other administrative expenses continue to be incurred.
GOVERNMENT REGULATION AND MONETARY POLICY
The Company and the Bank have received all regulatory approvals required to
organize and establish the Company and the Bank and expect to receive authority
to commence operations, subject to the satisfaction of certain conditions.
Those conditions include, among other things, that: (i) beginning
paid-in-capital of the Bank will be not less than $7.5 million; (ii) initial
capitalization will be sufficient to provide a ratio of Tier 1 capital to total
estimated assets at the end of the third year of operations of at least 8%; and
(iii) a commitment that no dividends will be paid by the Bank until all initial
losses have been recaptured, an appropriate allowance for loan and lease losses
has been established, and overall capital is adequate. Regulatory capital
requirements imposed on the Bank may have the effect of constraining future
growth, absent the infusion of additional capital.
The Company and the Bank will be subject to extensive state and federal
government supervision and regulation. Existing state and federal banking laws
will subject the Bank to substantial limitations with respect to loans,
purchase of securities, payment of dividends and many other aspects of its
banking business. There can be no assurance that future legislation or
government policy will not adversely affect the banking industry or the
operations of the Bank. Federal economic and monetary policy may affect the
Bank's ability to attract deposits, make loans and achieve satisfactory
interest spreads. See "Supervision and Regulation."
NO ASSURANCE OF DIVIDENDS
It is anticipated that no dividends will be paid on the Common Stock for the
foreseeable future. The Company will be largely dependent upon dividends paid
by the Bank for funds to pay dividends on the Common Stock, if and when such
dividends are declared. No assurance can be given that future earnings of the
Bank, and resulting dividends to the Company, will be sufficient to permit the
legal payment of dividends to Company shareholders at any time in the future.
Even if the Company may legally declare dividends, the amount and timing of
such dividends will be at the discretion of the Company's Board of Directors.
The Board may in its sole discretion decide not to declare dividends. These
shares should not be purchased by persons who need or desire dividend income
from this investment. For a more detailed discussion of other regulatory
limitations on the payment of cash dividends by the Company, see "Dividend
Policy."
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COMPETITION
The Company and the Bank will face strong competition for deposits, loans and
other financial services from numerous Michigan and out-of- state banks,
thrifts, credit unions and other financial institutions as well as other
entities which provide financial services, including consumer finance
companies, securities brokerage firms, mortgage brokers, insurance companies,
mutual funds, and other lending sources and investment alternatives. Some of
the financial institutions and financial services organizations with which the
Bank will compete are not subject to the same degree of regulation as the Bank.
Many of the financial institutions aggressively compete for business in the
Bank's proposed market area. Most of these competitors have been in business
for many years, have established customer bases, are larger, have
substantially higher lending limits than the Bank, and will be able to offer
certain services that the Bank does not expect to provide in the foreseeable
future, including multiple branches, trust services, and international banking
services. In addition, most of these entities have greater capital resources
than the Bank, which, among other things, may allow them to price their
services at levels more favorable to the customer and to provide larger credit
facilities than could the Bank. See "Business -- Market Area" and "Business -
Competition." Management has also been advised that another new bank is in
organization with the intent of commencing operation in the Bank's market area.
Additionally, recently passed federal legislation regarding interstate
branching and banking may act to increase competition in the future from larger
out-of-state banks. See "Supervision and Regulation -- Recent Regulatory
Developments."
DEPENDENCE ON MANAGEMENT
The Company is, and for the foreseeable future will be, dependent primarily
upon the services of Harold J. Allmacher, the Chairman of the Board and Chief
Executive Officer of the Company, and Richard J. Miller, President and
Treasurer of the Company. If the services of Mr. Allmacher or Mr. Miller were
to become unavailable to the Company for any reason, or if the Company were
unable to hire highly qualified and experienced personnel either to replace Mr.
Allmacher or Mr. Miller, or any other proposed employee, or to staff the
anticipated growth, the operating results of the Company would be adversely
affected. The Company and the Bank do not have employment agreements with
these or other officers. See "Business - Employees" and "Management."
DISCRETION IN USE OF PROCEEDS
The offering is intended to raise funds to provide for the initial
capitalization of the Bank, purchase leasehold improvements, equipment and
other assets for the Bank's operations, fund loans, provide working capital
for general corporate purposes, and pay initial operating expenses. While
management currently has no such plans, if opportunities arise, some of the
proceeds of the offering could also be used to finance acquisitions of other
financial institutions, branches of other institutions, or expansion into other
lines of business closely related to banking. However, management will retain
discretion in employing the proceeds of the offering. See "Use of Proceeds."
LENDING RISKS AND LENDING LIMITS
The risk of nonpayment of loans is inherent in commercial banking, and such
nonpayment, if it occurs, would likely have a material adverse effect on the
Company's earnings and overall financial condition as well as the value of the
Common Stock. Because the Bank does not have an operating history, none of the
Bank's customers will have an established credit history with the Bank.
Management will attempt to minimize the Bank's credit exposure by carefully
monitoring the concentration of its loans within specific industries and
through prudent loan application and approval procedures, but there can be no
assurance that such monitoring and procedures will reduce such lending risks.
Credit losses can cause insolvency and failure of a financial institution, and
in such event, its shareholders could lose their entire investment.
The Bank's lending limit will initially be approximately $1 million.
Accordingly, the size of the loans which the Bank can offer to potential
customers is less than the size of loans which most of the Bank's competitors
with larger lending limits are able to offer. This limit initially will affect
the ability of the Bank to seek relationships with the area's larger
businesses. The Bank expects to accommodate loan volumes in excess of its
lending limit through the sale of participations in such loans to other banks.
However, there can be no assurance that the Bank will be successful in
attracting or maintaining customers seeking larger loans or that the Bank will
be able to engage in participations of such loans on terms favorable to the
Bank.
IMPACT OF INTEREST RATES AND ECONOMIC CONDITIONS
The results of operations for financial institutions, including the Bank, may
be materially and adversely affected by changes in prevailing economic
conditions, including declines in real estate market values, rapid changes in
interest rates and the monetary and fiscal policies of the federal government.
See "Supervision and Regulation -- General" and "-- Recent Regulatory
Developments." The Bank's profitability is in part a function of the spread
between the interest rates earned on investments and loans and the interest
rates paid on deposits and other interest-bearing liabilities. In the early
1990s, many banking organizations experienced historically high interest rate
spreads. More recently, interest rate spreads have generally narrowed due to
changing market conditions and competitive pricing pressure, and there can be
no assurance that such factors will not continue to exert such pressure or that
such high interest rate spreads will return. Although economic conditions in
the Bank's market area have been generally favorable, there can be no assurance
that such conditions will continue to prevail. Substantially all the Bank's
loans will be to businesses and individuals in Southeastern Michigan and any
decline in the economy of this area could have an adverse impact on the Bank.
Like most banking
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institutions, the Bank's net interest spread and margin will be affected by
general economic conditions and other factors that influence market interest
rates and the Bank's ability to respond to changes in such rates. At any given
time, the Bank's assets and liabilities will be such that they are affected
differently by a given change in interest rates. As a result, an increase or
decrease in rates could have a material adverse effect on the Bank's net
income, capital and liquidity. While management intends to take measures to
guard against interest rate risk, there can be no assurance that such measures
will be effective in minimizing the exposure to interest rate risk. See
"Supervision and Regulation."
NEED FOR TECHNOLOGICAL CHANGE
The banking industry is undergoing rapid technological changes with frequent
introductions of new technology-driven products and services. In addition to
better serving customers, the effective use of technology increases efficiency
and enables financial institutions to reduce costs. The Company's future
success will depend in part on its ability to address the needs of its
customers by using technology to provide products and services that will
satisfy customer demands for convenience as well as to create additional
efficiencies in the Bank's operations. Many of the Bank's competitors have
substantially greater resources to invest in technological improvements. Such
technology may permit competitors to perform certain functions at a lower cost
than the Bank. There can be no assurance that the Bank will be able to
effectively implement new technology-driven products and services or be
successful in marketing such products and services to its customers. See
"Business -- Business Strategy."
ANTI-TAKEOVER PROVISIONS
Chapters 7A and 7B of the Michigan Business Corporation Act provide for
certain supermajority vote and other requirements on certain business
combinations with interested shareholders and limit voting rights of certain
acquirers of control shares. In addition, federal law requires the approval of
the Federal Reserve Board prior to acquisition of "control" of a bank holding
company. These provisions may have the effect of delaying or preventing a
change in control of the Company without action by the shareholders. As a
result, these provisions could adversely affect the price of the Common Stock
by, among other things, preventing a shareholder of the Company's Common Stock
from realizing a premium which might be paid as a result of a change in control
of the Company. See "Description of Capital Stock - Certain Anti-Takeover
Provisions."
INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Company's Articles of Incorporation and bylaws provide for the
indemnification of its officers and directors and insulate its officers and
directors from liability for certain breaches of the duty of care. It is
possible that the indemnification obligations imposed under these provisions
could result in a charge against the Company's earnings and thereby affect the
availability of funds for payment of dividends to the Company's shareholders.
See "Description of Captial Stock - Indemnification of Directors and Officers."
DETERMINATION OF OFFERING PRICE; LIMITED TRADING MARKET EXPECTED
The initial public offering price of $10.00 per share was determined by the
Company in consultation with Roney & Co., the Managing Underwriter of the
offering (the "Managing Underwriter"). This price is not based upon earnings
or any history of operations and should not be construed as indicative of the
present or anticipated future value of the Common Stock. Prior to the
offering, there has been no public trading market for the Common Stock. The
price at which these shares are being offered to the public may be greater than
the market price for the Common Stock following the offering. The Managing
Underwriter has advised the Company that, upon completion of the offering, it
intends to use reasonable efforts to initiate quotations of the Common Stock on
the OTC Bulletin Board and to act as a market maker in the Common Stock,
subject to applicable laws and regulatory requirements, although it is not
obligated to do so. Making a market in securities involves maintaining bid and
ask quotations and being able, as principal, to effect transactions in
reasonable quantities at those quoted prices, subject to various securities
laws and other regulatory requirements. The development of a public trading
market depends, however, upon the existence of willing buyers and sellers, the
presence of which is not within the control of the Company, the Bank or any
market maker. Market makers on the OTC Bulletin Board are not required to
maintain a continuous two sided market, are required to honor firm quotations
for only a limited number of shares, and are free to withdraw firm quotations
at any time. Even with a market maker, factors such as the limited size of
the offering, the lack of earnings history for the Company and the absence of
a reasonable expectation of dividends within the near future mean that there
can be no assurance of an active and liquid market for the Common Stock
developing in the foreseeable future. Even if a market develops, there can be
no assurance that a market will continue, or that shareholders will be able to
sell their shares at or above the price at which these shares are being offered
to the public. Purchasers of Common Stock should carefully consider the
limited liquidity of their investment in the shares being offered hereby.
REGULATORY RISK
The banking industry is heavily regulated. Many of these regulations are
intended to protect depositors, the public, and the Federal Deposit Insurance
Corporation, not shareholders. Applicable laws, regulations, interpretations
and enforcement policies have been subject to significant, and sometimes
retroactively applied, changes in recent years, and may be subject to
significant future changes. There can be no assurance that such future changes
will not adversely affect the business of the Company. In addition, the burden
imposed by federal
7
<PAGE> 10
and state regulations may place banks in general, and the Company specifically,
at a competitive disadvantage compared to less regulated competitors. See
"Supervision and Regulation."
USE OF PROCEEDS
The net proceeds to the Company from the sale of the 825,000 shares of Common
Stock offered hereby are estimated to be $___________ ($___________ if the
Underwriters' over-allotment option is exercised in full), after deduction of
the underwriting discounts and commissions, but before deducting estimated
offering expenses of $___________. The Underwriters have agreed that no
underwriting discounts or commissions will be incurred by the Company for
shares sold by the Underwriters to members of the Board of Directors or their
immediate families. Such persons have provided nonbinding expressions of
interest to purchase approximately 210,000 shares. If such persons purchase
210,000 shares, underwriting discounts and commissions will be reduced by, and
proceeds to the Company will be increased by $__________.
The Company expects to contribute approximately $7,500,000 of the net
proceeds of the offering to the Bank by purchasing all of the Bank's common
stock to be issued. This purchase of the Bank's stock is intended to provide
the Bank with the capital required by regulators to commence operations. The
Bank plans to use approximately $350,000 for leasehold improvements, and
$300,000 to purchase furniture, fixtures and equipment and other necessary
assets for the Bank's operations. The Company will use approximately $60,000
to repay loans made to the Company by certain of the Bank's organizers to cover
expenses of organizing the Company and the Bank. It is currently anticipated
that the balance of the net proceeds received by the Bank will be used to fund
investments in loans and securities and for payment of operating expenses. The
remaining net proceeds (plus any net proceeds as a result of the exercise of
the Underwriters' over-allotment option) will initially be invested by the
Company in investment grade securities and otherwise held by the Company as
working capital for general corporate purposes and to pay operating expenses,
as well as for possible future capital contributions to the Bank. The funds
will also be available to finance possible acquisitions of other branches or
expansion into other lines of business closely related to banking, although the
Company presently has no plans to do so.
DIVIDEND POLICY
The Company initially expects that Company and Bank earnings, if any, will be
retained to finance the growth of the Company and the Bank and that no cash
dividends will be paid for the foreseeable future. After the Bank achieves
profitability and recovers its operating deficit, the Company may consider
payment of dividends. However, the declaration of dividends is at the
discretion of the Board of Directors and there is no assurance that dividends
will be declared at any time. If and when dividends are declared, the Company
will be largely dependent upon dividends paid by the Bank for funds to pay
dividends on the Common Stock. It is also possible, however, that the Company
might at some time in the future pay dividends generated from income or
investments and from other activities of the Company.
Under Michigan law, the Bank will be restricted as to the maximum amount of
dividends it may pay on its Common Stock. A Michigan state bank may not
declare dividends except out of net profits then on hand after deducting its
losses and bad debts and then only if the bank will have a surplus amounting to
at least 20% of its capital after the payment of the dividend. A Michigan
state bank may not declare or pay any cash dividend or dividend in kind until
the cumulative dividends on its preferred stock, if any, have been paid in
full. If the surplus of a Michigan state bank is at any time less than the
amount of its capital, before the declaration of a cash dividend or dividend in
kind, it must transfer to surplus not less than 10% of its net profits for the
preceding half-year (in the case of quarterly or semi-annual dividends) or the
preceding two consecutive half-year periods (in the case of annual dividends).
The ability of the Company and the Bank to pay dividends is also affected by
various regulatory requirements and policies, such as the requirement to
maintain adequate capital above regulatory guidelines. See "Supervision and
Regulation." Such requirements and policies may limit the Company's ability to
obtain dividends from the Bank for its cash needs, including funds for
acquisitions, payment of dividends by the Company, and the payment of operating
expenses.
8
<PAGE> 11
CAPITALIZATION
The following table sets forth the capitalization of the Company as it is
projected to be immediately after the sale of the 825,000 shares of Common
Stock offered hereby and the application of the estimated net proceeds. See
"Use of Proceeds."
<TABLE>
<S> <C>
Short-term debt $ -0-
Shareholders' equity:
Common Stock, 9,000,000 shares
authorized; 825,000 shares issued
and outstanding $7,590,000
Total shareholders' equity $7,590,000
</TABLE>
BUSINESS
BACKGROUND
The liberalization in recent years of Michigan's branch banking laws,
together with the expansion of interstate banking, has led to substantial
consolidation of the banking industry in Michigan and especially the
Metropolitan Detroit area in which the Bank is located. In the past several
years, many of the financial institutions within the primary market area of the
Bank have either been acquired by or merged with larger financial institutions
or out-of-state financial institutions. In many cases, when these
consolidations occurred, local boards of directors were dissolved and local
management relocated or in some cases terminated. This has in some cases
resulted in policy and credit decisions being centralized away from the local
management of the financial providers in the Bank's primary market area.
In the opinion of the Company's management, this situation has created a
favorable opportunity for a new commercial bank with local management and
directors. Management of the Company believes that such a bank can attract
those customers who wish to conduct business with a locally managed institution
that demonstrates an active interest in their business and personal financial
affairs. The Company believes that a locally managed institution will be able
to deliver more timely responses to customer requests, provide customized
financial products and services, and offer the personal attention of the Bank's
senior banking officers. The Bank will seek to take advantage of this
opportunity by emphasizing in its marketing plan the Bank's local management
and the Bank's ties and commitment to its market area.
The Company will own all of the issued and outstanding stock of the Bank.
Prior to the completion of the offering, the Company expects to have only one
share of Common Stock outstanding that would be held by one of its organizers.
Following completion of the offering and before commencement of operations, the
Bank intends to complete the furnishing of its temporary facility, certain
training of its staff and the purchase, lease and installation of equipment
necessary to transact a banking business. Correspondent banking relationships
and other arrangements for services will be completed as necessary.
The Company was incorporated as a Michigan business corporation on April 26,
1996. The Company was formed to acquire all of the Bank's issued and
outstanding stock and to engage in the business of a bank holding company under
the federal Bank Holding Company Act of 1956, as amended. On May 9, 1996, the
Company received an order from the Commissioner of the Financial Institutions
Bureau of the State of Michigan (the "Commissioner") approving the application
to establish the Bank, subject to certain conditions set forth in its order.
The Company's application for FDIC deposit insurance is expected to be approved
in May of 1996, subject to certain conditions including conditions related to
capital adequacy. The Company's application to become a bank holding company
for the Bank is expected to be approved by the Federal Reserve Board in June of
1996. The Bank expects to have such conditions satisfied and commence business
in temporary facilities late in the third quarter of 1996. The Bank intends to
commence business as soon as reasonably practical upon completion of the
offering and satisfaction of conditions to which certain of its regulatory
approvals are subject. See "Risk Factors -- Delay in Commencing Operations"
and "Risk Factors -- Government Regulation and Monetary Policy." The Bank
expects to move into its permanent leased facilities late in the fourth quarter
of 1996.
The Company will maintain its offices at 100 North Main Street, Mount Clemens,
Michigan 48043, telephone number (810) 783-4500.
BUSINESS STRATEGY
The Bank intends to provide a range of business and consumer financial
services to serve small to medium-sized business customers and individuals. The
foundation of this strategy will be to emphasize local management and its
commitment to the Bank's primary market area. Harold W. Allmacher, Chairman
and Chief Executive Officer of the Company, has over 30 years of banking
experience in the Bank's market area.
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<PAGE> 12
Richard J. Miller, President and Treasurer of the Company, has over 15 years
experience in finance and operations. Mr. Allmacher was President and Chief
Executive Officer and Mr. Miller was corporate treasurer of FNBC, a one-bank
holding company with more than $500 million of assets at the time of its
acquisition in February of 1995 by Old Kent. Mr. Allmacher and Mr. Miller are
assembling a highly qualified staff, which will include several former officers
of FNBC's banking subsidiary, FNB. The staff is committed to providing
outstanding customer service and banking products. The Bank intends to compete
aggressively for its banking business through a systematic program of direct
calling on both customers and referral sources such as attorneys, accountants
and other business people, many of whom the management have come to know during
their professional careers.
BUSINESS FINANCIAL SERVICES. The Bank intends to offer products and services
consistent with its goal of attracting small to medium-sized business customers
as well as a variety of individuals. Commercial loans will be offered on both a
secured and unsecured basis and will be available for working capital purposes,
the purchase of equipment and machinery, financing of accounts receivable and
inventory and for the purchase of real estate, primarily owner occupied real
estate. As part of its banking business, the Bank may make loans to all types
of borrowers secured by first and junior mortgages on various types of real
estate, including without limitation, single-family residential, multi-family
residential, mixed use, commercial, developed, and undeveloped. In making such
loans, the Bank will be subject to written policies, reviewed and approved at
least annually by the Bank's board of directors, pursuant to federal law and
regulations. Such policies address loan portfolio diversification and prudent
underwriting standards, loan administration procedures, and documentation,
approval and reporting requirements. In addition, Federal regulations impose
supervisory loan-to-value ratios applicable to each type of loan secured by
real estate.
The Bank will generally look to a borrower's business operations as the
principal source of repayment and will also seek, when appropriate, security
interests in the inventory, accounts receivable or other personal property of
the borrower, and personal guaranties. Although the Bank intends to be
aggressive in seeking new loan growth, it intends to stress high quality in its
loans. To promote such standards, the Board of Directors of the Bank intends to
establish strict lending policies, including specified lending authorities,
loan review policies and lending committees. In establishing such policies,
the Board of Directors will be required to conform to applicable bank
regulatory requirements. See "Supervision and Regulation". Andrew
Tassopoulos, formerly a vice president of commercial lending at FNB, where he
spent 10 years, is currently expected to be the senior loan officer in charge
of the Bank's commercial and retail lending operations.
The Bank will actively pursue business checking accounts by offering
competitive rates, computerized banking, and other convenient services to many
of its business customers. In some cases the Bank will require its business
borrowers to maintain minimum balances. Management of the Bank also intends to
establish relationships with one or more correspondent banks and other
independent financial institutions to provide other services requested by its
customers, including loan participations where the requested loan amount
exceeds the Bank's legal lending limit.
CONSUMER FINANCIAL SERVICES. The Bank's retail banking strategy will
initially focus on providing attractive products and services, including
computer home banking, telephone banking and automated bill paying services to
individuals in the bank's market area. The Bank believes that by offering these
technologically advanced banking products which allow customers to bank 24
hours a day from any point at their convenience it can attract new deposits and
loans without the necessity of expensive brick and mortar branch operations.
In addition, the Bank will originate residential real estate loans in the
form of first mortgages and home equity loans. The Bank has applied to the
Federal National Mortgage Association for approval as a seller servicer of
residential mortgage loans and intends to sell most of its fixed rate mortgages
into the secondary market. Most of its adjustable rate loans and home equity
loans, which will also be primarily adjustable rate, are intended to be held in
the Bank's portfolio. Ken Flynn, formerly a vice president in charge of
mortgage lending at FNB with over 20 years of banking experience, is currently
expected to head up this department.
The Bank intends to offer other consumer lending services including credit
cards, auto loans, boat loans and other personal loan products on both a
secured and unsecured basis.
With an experienced staff to provide personalized service, management
believes it will be able to generate competitively priced loans and deposits.
This experienced staff will have access to current software and database
systems selected to deliver high-quality products and provide responsive
service to clients. The Bank expects to enter into agreements with third-party
service providers to provide customers with convenient electronic access to
their accounts and other bank products through debit cards, voice response and
home banking. The use of third- party service providers is intended to allow
the Bank to remain at the forefront of technology while minimizing the costs of
delivery.
INVESTMENTS. The principal investment of the Company will be its purchase of
all of the common stock of the Bank. Funds retained by the Company from time
to time may be invested in various debt instruments, including but not limited
to, obligations of or guaranteed by the United States, general obligations of a
State or political subdivision thereof, bankers' acceptances or certificates of
deposit of United States commercial banks, or commercial paper of United States
issuers rated in the highest category by a nationally-recognized investment
rating service. Although the Company is permitted to make limited portfolio
investments in equity securities and to make equity investments in subsidiary
corporations engaged in certain non-banking activities which may include real
estate-related activities, such as mortgage banking, community development,
real estate appraisals,
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<PAGE> 13
arranging equity financing for commercial real estate, and owning and operating
real estate used substantially by the Bank or acquired for its future use, the
Company has no present plans to make any such equity investment. See,
"Supervision and Regulation -- The Company -- Investments and Activities." The
Company's board of directors may alter the Company's investment policy without
shareholder approval.
The Bank may invest its funds in a wide variety of debt instruments and may
participate in the Federal funds market with other depository institutions.
Subject to certain exceptions, the Bank is prohibited from investing in equity
securities. Under one such exception, in certain circumstances and with the
prior approval of the FDIC, the Bank could invest up to 10% of its total assets
in the equity securities of a subsidiary corporation engaged in certain real
estate-related activities. The Bank has no present plans to make such an
investment. Real estate acquired by the Bank in satisfaction of or foreclosure
upon such loans may be held by the Bank, subject to a determination by a
majority of the Bank's board of directors at least annually of the advisability
of retaining the property, for a period not exceeding 60 months after the date
of acquisition, or such longer period as the Commissioner may approve (up to a
maximum of 10 years after the date of acquisition). The Bank is also permitted
to invest an aggregate amount not in excess of its capital in such real estate
as is necessary for its accommodation in the transaction of its business. The
Bank has no present plans to make any such investment. The Bank's board of
directors may alter the Bank's investment policy without shareholder approval.
MARKET AREA
Management believes that recent changes in the local banking industry,
including mergers and acquisitions involving both commercial banks and thrift
institutions, resulted in a decrease in the level of service for small to
medium-sized business customers in the Bank's market area. Management believes
that there continues to be the perception in the local business community that
many of the larger financial institutions are not as focused on providing
personal service to small to medium-sized businesses. Accordingly, management
believes that there are increased market opportunities for the Bank to serve
these businesses.
The Bank's main office will be located at 100 North Main Street, in downtown
Mount Clemens, Michigan with free parking and easy access from I-94, North
River Road and Gratiot Avenue.
The principal market anticipated to be served by the Bank will be Macomb
County, which includes Mount Clemens, Clinton Township, Harrison Township,
Chesterfield Township and Macomb Township. Macomb County is one of the fastest
growing communities in Michigan and has a stable and diverse economic base.
Macomb County, which is comprised of 27 cities, villages or townships, ranks
third in population out of Michigan's 83 counties and 47th out of 3,100
counties nationally. With a current population of over 700,000, Macomb County
covers 482 square miles and is home to over 15,000 businesses. Macomb County
is also an active boating center with 31 miles of coastline on Lake St. Clair
and over 40,000 registered pleasure craft.
Macomb County is also a large banking market. According to available
industry data, as of June 30, 1995 total deposits in this market, including
banks, thrifts and credit unions, were approximately $10.2 billion.
COMPETITION
There are many thrifts, credit unions and bank offices located within the
Bank's primary market area. Most are branches of larger financial institutions
which, in management's view, are managed with a philosophy of strong
centralization. Management has also been advised that there is another new
bank in organization with the intent to commence business in the market area.
The Bank will face competition from the thrifts, credit unions, and other banks
as well as finance companies, insurance companies, mortgage companies,
securities brokerage firms, money market funds and other providers of financial
services. Most of the Bank's competitors have been in business a number of
years, have established customer bases, are larger and have higher lending
limits than the Bank. The Bank will compete for loans principally through its
ability to communicate effectively with its customers and understand and meet
their needs. Management believes that its personal service philosophy will
enhance its ability to compete favorably in attracting individuals and small
businesses. The Bank will actively solicit retail customers and will compete
for deposits by offering customers personal attention, professional service,
computerized banking, and competitive interest rates.
BANK PREMISES
The Bank has leased a two-story building at 100 North Main Street, in
downtown Mount Clemens, Michigan, for use as the Bank's main office and the
Company's headquarters. This building is of masonry construction and has
approximately 10,000 square feet of usable space. This location is at the
intersection of Main Street and Market Street. It is easily accessible by both
Northbound and Southbound Gratiot Avenue, and is in the portion of downtown
Mount Clemens closest to I-94. The building is one of a few locations in
downtown Mount Clemens with substantial on-site parking. The Bank expects to
commence its business late in the third quarter of 1996 in a temporary facility
at the same location. Late in the fourth quarter of 1996, the Bank expects to
open its permanent offices in the two-story building that it will be leasing
for its main office.
EMPLOYEES
Initially the Bank is expected to have approximately 18 full-time employees,
including the Chief Executive Officer, the President, the Corporate Secretary,
the Controller, the Senior Loan Officer, the teller staff and other
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<PAGE> 14
support positions. The Bank is assembling a staff of experienced
professionals. Management encourages all employees to share management's goal
of high-quality customer service.
PLAN OF OPERATION
The Company's plan of operation for the twelve months following the
completion of the offering does not contemplate the need to raise additional
funds during that period. Management has concluded, based on current
pre-opening growth projections, that the Bank is likely to have adequate funds
to meet its cash requirements for at least the next several years. Management
expects to pursue opportunities involving home banking services, but currently
has no specific plans for product research or development which would be
performed within the next twelve months. Management plans to expend
approximately $350,000 for leasehold improvements and $300,000 for the purchase
of fixtures and equipment prior to commencing operation. During the first
twelve months of operation, the Company does not anticipate requiring
substantial additional equipment. No significant changes in the number of
employees is anticipated in the first twelve months of operations after the
Bank commences its business.
MANAGEMENT
DIRECTORS AND OFFICERS
The directors and officers of the Company as of the date hereof, and the
contemplated directors and officers of the Bank upon completion of this
offering, are as follows:
<TABLE>
<CAPTION>
POSITION WITH
THE COMPANY POSITION(S)
NAME AGE (AND DIRECTOR CLASS) WITH THE BANK
--------------------- ------- ---------------------------------- -----------------------------------
<S> <C> <C> <C>
Harold W. Allmacher 56 Chairman of the Board, Chief Executive Chairman of the Board, Chief Executive
Officer, and Director (Class III) Officer, and Director
Gebran S. Anton 63 Director (Class III) Director
Joseph Catenacci 60 Director (Class I) Director
Raymond Contesti 60 Director (Class I) Director
Salvatore Cottone 55 Director (Class II) Director
Celestina Giles 49 Corporate Secretary and Director (Class Corporate Secretary and Director
I)
Joseph F. Jeannette 51 Director (Class III) Director
Philip E. Greco 54 Director (Class I) Director
Bobby L. Hill 64 Director (Class II) Director
Richard J. Miller 37 President, Treasurer and Director President and Director
(Class II)
Dean S. Petitpren 53 Director (Class II) Director
Carole L. Schwartz 58 Director (Class III) Director
</TABLE>
Under Federal law and regulations and subject to certain exceptions, the
addition or replacement of any director, or the employment, dismissal or
reassignment of a senior executive officer, of the Bank occurring within two
years of the chartering of the Bank or its acquisition by the Company (or at
any time thereafter that the Bank is not in compliance with applicable minimum
capital requirements or is otherwise in a troubled condition) is subject to
prior notice to and disapproval by the FDIC.
The Company's Articles of Incorporation provide that the number of directors,
as determined from time to time by the Board of Directors, shall be no less
than six and no more than fifteen. The Board of Directors has presently fixed
the number of directors at twelve. The Articles of Incorporation further
provide that the directors shall be divided into three classes, Class I, Class
II, and Class III, with each class serving a staggered three-year term and with
the number of directors in each class being as nearly equal as possible. The
initial terms of the Class I, Class II, and Class III directors has been
established at one year, two years, and three years, respectively. The
subsequent terms of each class of director will be three years.
It is anticipated that the entire Board of Directors of the Bank will be
elected annually by its shareholder, the Company.
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<PAGE> 15
Officers of the Company and the Bank will be elected annually by their
respective Boards of Directors and perform such duties as are prescribed in the
bylaws or by the Board of Directors.
There are no family relationships among any of the Company's directors,
officers or key personnel. Carole Schwartz, one of the directors, is the
spouse of Judge Michael Schwartz, who is one of the organizers of the Bank.
EXPERIENCE OF DIRECTORS AND OFFICERS
The experience and backgrounds of the directors and officers, and their
proposed positions with the Company, are summarized below.
HAROLD W. ALLMACHER (Chairman of the Board, Chief Executive Officer, Director)
has been employed in banking for over 30 years. He began his career at FNB as a
Commercial Lender in 1973 and most recently was President and CEO of FNB from
1986 until February 1, 1995. He was a Director of FNBC from April, 1987 until
February, 1995, when the company merged with Old Kent and a director of FNB for
the same period. He served as President and an Advisory Director for Old Kent
Bank-Macomb from February 1995, until October 1995 when he retired. Mr.
Allmacher serves on numerous boards of community organizations some of which
include the Community Growth Alliance, St. John's Hospital Macomb, and Macomb
County School to Work Program.
RICHARD J. MILLER (President, Treasurer, Director) has over 15 years experience
in financial accounting, bank operations, and regulatory compliance. Mr. Miller
was employed at FNB or its successor, Old Kent Bank-Macomb, from 1985 until
December 1995, most recently as Vice President and Controller. He also served
as Executive Officer and Corporate Treasurer of FNBC until the time of FNBC's
merger with Old Kent in 1995. Mr. Miller serves on several community boards,
including the Macomb Y.M.C.A. and Metro Macomb Productions (producer of the
Mount Clemens Santa Claus Parade).
CELESTINA GILES (Corporate Secretary and Director) was Executive Secretary of
FNB from 1981 through October 1995. She also served as a Director of FNB and
FNBC from April 1992 until the time of the company's merger in 1995. She served
as an Advisory Director for Old Kent Bank-Macomb from February 1995 until
October 1995. Mrs. Giles is active in the American Cancer Society, the Traffic
Safety Association of Macomb County and the Macomb County Treasurer's
Association.
GEBRAN S. ANTON (Director) has been the Owner and Vice President of Anton, Zorn
& Associates and Owner and President of Gebran Anton Development Company since
1988, both of which are real estate development and brokerage companies. Mr.
Anton is the former owner of Anton's, Inc., a chain of retail mens clothing
stores. He formerly served as Director and Chairman of the Board of FNB from
1977 to 1987 and also served as a Director of Central Holding Company from 1987
until 1994, when it was acquired by Standard Federal Savings Bank. Mr. Anton
is a businessman and real estate owner in Mount Clemens. Mr. Anton serves on
the Board of Directors of Chateau Properties, Inc., a real estate investment
trust traded on the New York Stock Exchange.
JOSEPH CATENACCI (Carlo) (Director) has been Executive Vice President of John
Carlo, Inc., a highway and heavy construction company located in Clinton
Township, since 1961. He is a Director of Mount Clemens General Hospital as
well as other private companies.
RAYMOND M. CONTESTI (Director) has been Superintendent of Clintondale Community
Schools from 1983 to present. He was a Director of FNB and FNBC from August
1987 to February 1995 and an Advisory Director of Old Kent Bank-Macomb from
February 1995 to April 1996. Dr. Contesti is also a member of the Board of
Directors of MCG Telesis, the parent company of Mount Clemens General Hospital.
He serves on numerous community boards including the Economic Development
Corporation of Clinton Township, the Macomb/St. Clair Private Industry Council,
the Michigan Association of School Administrators and the American Association
of School Administrators.
SALVATORE COTTONE (Director) has been the Owner and President of Resco, Inc., a
real estate development company, from 1988 to present. He is a member of the
American Institute of Certified Public Accountants, the Michigan Institute of
Certified Public Accountants, and the Building Industry Association of
Southeastern Michigan.
PHILIP E. GRECO (Director) has been President of Greco Title Company, a title
insurance company located in the Metropolitan Detroit area from 1976 to the
present.
BOBBY L. HILL (Director) has been a County Commissioner on the Macomb County
Board of Commissioners since January 1991. Prior to that time, he was an
administrator of Adult and Community Vocational Education for Mount Clemens
Community Schools. He also serves on the Mount Clemens Education Foundation
and the Mount Clemens Stadium Fund Committee.
JOSEPH F. JEANNETTE (Director) has been the Assistant Director of Elementary
Education for Utica Community Schools from 1994 to the present. From 1967
until 1994, he served in various positions for Utica Community Schools,
including serving as Coordinator of Elementary Education from 1989 to 1994, and
as a Principal from 1972 to 1989. He is also Mayor Pro Tem for the City of
Utica.
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<PAGE> 16
DEAN S. PETITPREN (Director) has been President of Petitpren, Inc., a wholesale
beer distributor located in Macomb County, from 1961 to the present. He is a
Director of SADD of Michigan and several private companies in the community. He
is also a member of the Central Macomb County Chamber of Commerce, the Michigan
Sheriffs Association, as well as other groups.
CAROLE L. SCHWARTZ (Director) most recently was the President of Shannon
Management Company, a property management company, from 1990 to 1992. She is
also a Commissioner on the Zoning Board of Appeals for Clinton Township,
Michigan, and is active in several community groups, including the Michigan
Diabetes Association.
DIRECTOR AND EXECUTIVE OFFICER COMPENSATION
In the first year of operation, no compensation is expected to be paid to any
directors of the Company for their services in such capacities. Depending on
the structure and operation of the Company, the operations of the Bank and
other factors, the Company's and the Bank's Boards of Directors may thereafter
determine that reasonable fees or compensation are appropriate. In that event
it is likely that directors of the Company and the Bank would receive
compensation, such as meeting fees, which would be consistent with the
compensation paid to directors of financial institution holding companies and
banks of similar size.
The Bank's three executive officers have all chosen to join the Bank at
compensation levels below those earned in their previous positions. Their
interest is to achieve earlier profitability for the Bank by reducing operating
expenses. The annual compensation for Mr. Allmacher and Mr. Miller for the
first year of operations will be $60,000 each, and Ms. Giles' compensation for
the first year will be less than this amount. Executive officers' compensation
in subsequent years will be determined by the Compensation Committee, a
committee of the Bank's Board of Directors comprised of outside directors. The
Bank's officers may participate in the Company's 1996 Employee Stock Option
Plan. Officers of the Bank may also participate in any benefit plans adopted
for Bank employees. The Bank expects to eventually adopt a 401(k) plan for its
employees. Neither the Company nor the Bank has an employment agreement with
any officer.
1996 EMPLOYEE STOCK OPTION PLAN
The Board of Directors has adopted, and the sole shareholder of the Company
has approved, a 1996 Employee Stock Option Plan (the "Plan"). The Plan's
adoption is intended to enable the key employees of the Company or any
subsidiary to participate in any growth and profitability of the Company and
encourage their continuation as employees of the Company or a subsidiary to the
benefit of the Company and its shareholders. Pursuant to the Plan, stock
options may be granted which qualify under the Internal Revenue Code as
incentive stock options or as stock options that do not qualify as incentive
stock options. The Board is of the judgment that the interests of the Company
and its shareholders will be advanced by implementation of this Plan. The
following is a summary of the principal provisions of the Plan.
ADMINISTRATION. The Plan will be administered by a committee of the Board of
Directors of the Company comprised of directors who are not eligible to
participate in the Plan (the "Committee"). The Committee will make
determinations with respect to the officers and other key employees who will
participate in the Plan and the extent of their participation, including the
type of option. In making such determinations, the Committee may consider the
position and responsibilities of the employee, the nature and value of his or
her services and accomplishments, the present and potential contribution of the
employee to the success of the Company, and such other factors as the Committee
may deem relevant.
SHARES. The total number of shares of Common Stock which may be issued under
the Plan will not exceed 40,000 shares (subject to adjustment for certain
events as described below). The shares will be authorized but unissued shares
(including shares reacquired by the Company).
OPTION AGREEMENT. Each option granted under the Plan will be evidenced by an
agreement in such form as the Committee shall from time to time approve, which
agreement must comply with and be subject to certain conditions set forth in
the Plan. Options granted under the Plan may be incentive stock options or
non-qualified options, as determined from time to time by the Committee for
each optionee.
OPTION PRICE. The option price will not be less than the fair market value
of the shares of Common Stock at the time the option is granted except in the
case of an incentive stock option granted to a 10% shareholder where the option
price will be equal to 110% of fair market value. For purposes of the Plan,
fair market value per share means the average of the published closing bid and
asked prices of the Common Stock on the OTC Bulletin Board (the "Bulletin
Board"), or if the Common Stock has become listed on The Nasdaq Stock Market
("Nasdaq"), then on Nasdaq instead; or if the Common Stock is not quoted on
either the Bulletin Board or Nasdaq, a value determined by any fair and
reasonable means prescribed by the Committee. The option price shall be paid
in cash or through the delivery of previously owned shares of the Company's
Common Stock, or by a combination of cash and Common Stock. For purposes of
the grant of options under the Plan, and not for any other purpose, the Board
of Directors has determined that $10 per share should be used as the market
price for the Common Stock prior to the completion of the offering.
DURATION OF OPTIONS. The duration of each option will be determined by the
Committee, except that (1) the maximum duration may not exceed ten years from
the date of grant, and (2) for incentive stock options granted to persons who
own 10% or more of the Company's stock, the duration of such options may not
exceed
14
<PAGE> 17
five years from the date of grant. The Committee will determine at the time of
grant whether the option will be exercisable in full or in cumulative
installments.
Except as hereinafter provided, an option may be exercised by an optionee
only while such optionee is in the employ of the Company or a subsidiary. In
the event that the employment of an optionee to whom an option has been granted
under the Plan shall terminate (except as set forth below) such option may be
exercised, to the extent that the option was exercisable on the date of
termination of employment, only until the earlier of three (3) months after
such termination or the original expiration date of the option; provided,
however, that if termination of employment results from death or total and
permanent disability, such three (3) month period shall be extended to twelve
(12) months.
ADJUSTMENTS. The Committee may make appropriate adjustments in the number of
shares of Common Stock for which options may be granted or which may be issued
under the Plan and the price per share of each option if there is any change in
the Common Stock as a result of a stock dividend, stock split, recapitalization
or otherwise.
CHANGE IN CONTROL. In the case of a change in control (as defined in the
Plan) of the Company, each option then outstanding shall become exercisable in
full immediately prior to such change in control.
TERMINATION OF PLAN AND AMENDMENTS. An option may not be granted pursuant to
the Plan after April 30, 2001. The Board of Directors may from time to time
terminate the Plan or amend the Plan subject to shareholder approval to the
extent necessary to satisfy the requirements of Rule 16b-3 under the Exchange
Act, or any successor rule.
FEDERAL INCOME TAX CONSEQUENCES. The grant of a non-qualified option or
incentive stock option has no federal tax consequences for the optionee or the
Company. Upon the exercise of a non-qualified option, the optionee is deemed
to realize taxable income to the extent that the fair market value of the
shares of Common Stock exceeds the option price. The Company is entitled to a
tax deduction for such amounts at the date of exercise. If any stock received
upon the exercise of a non-qualified option is later sold, any excess of the
sale price over the fair market value of the stock at the date of exercise is
taxable to the optionee.
No taxable income results to the optionee upon the exercise of an incentive
stock option if the incentive stock option is exercised during the period of
the optionee's employment or within three months thereafter, except in the case
of disability or death. However, the amount by which the fair market value of
the stock acquired pursuant to an incentive stock option exceeds the option
price is a tax preference item which may result in the imposition on the
optionee of an alternative minimum tax. If no disposition of the shares is
made within two years from the date the incentive stock option was granted and
one year from the date of exercise, any profit realized upon disposition of the
shares may be treated as a long-term capital gain by the optionee. The Company
will not be entitled to a tax deduction upon such exercise of an incentive
stock option, nor upon a subsequent disposition of the shares unless such
disposition occurs prior to the expiration of the holding periods.
Under the terms of the Plan the aggregate market value (determined at the
time the option is granted) of the stock with respect to which incentive stock
options are exercisable for the first time in any year by any optionee may not
exceed $100,000.
1996 STOCK OPTION PLAN FOR NONEMPLOYEE DIRECTORS
In order to increase the proprietary interest of nonemployee directors of the
Company and to enhance the Company's ability to retain and attract experienced
and knowledgeable directors, the Board of Directors has adopted and the sole
shareholder of the Company has approved the 1996 Stock Option Plan for
Nonemployee Directors (the "Nonemployee Director Plan"). The following is a
summary of the Nonemployee Director Plan.
GRANT OF OPTIONS AND ADMINISTRATION. Pursuant to the Nonemployee Director
Plan, as of June 1, 1996, the Company will automatically grant each person who
is then a director of the Company who is not an employee of the Company or any
affiliate ("Nonemployee Director") an option to purchase 4,000 shares of Common
Stock of the Company at the public offering price of $10 per share.
Nonemployee Directors who are appointed or elected after June 1, 1996 will
receive an option for a lesser number of shares, the number of which will
depend on which annual meeting is the first annual meeting occurring
concurrently with, or after he or she becomes a Nonemployee Director, as set
forth in the table below:
<TABLE>
<CAPTION>
The Nonemployee Director's
If the Nonemployee Director's Option will be for the
First Annual Meeting is the: Following Number of Shares:
------------------------------ ---------------------------
<S> <C>
1997 Annual Meeting 3,000
1998 Annual Meeting 2,000
1999 Annual Meeting 1,000
</TABLE>
The Nonemployee Director Plan will be administered by the Committee or another
committee appointed by at least a majority of the Board of Directors of the
Company.
15
<PAGE> 18
SHARES. The total number of shares of the Company's Common Stock which may
be issued under the Nonemployee Director Plan will not exceed 40,000 shares
(subject to adjustment for certain events as described below). The shares will
be authorized but unissued shares (including shares reacquired by the Company).
OPTION AGREEMENT. Each option granted under the Nonemployee Director Plan
will be evidenced by an agreement in such form as the Committee shall from time
to time approve, which agreement must comply with and be subject to certain
conditions set forth in the Nonemployee Director Plan.
SCHEDULE FOR BECOMING FULLY EXERCISABLE. Options granted under the
Nonemployee Director Plan are immediately exercisable for 1,000 shares of
Common Stock. On the date of each successive annual meeting of the Company,
each option will become exercisable for an additional 1,000 shares of Common
Stock, until it is exercisable in full. In the event of a "change in control"
of the Company, as defined in the Nonemployee Director Plan, each option then
outstanding shall become immediately exercisable in full, immediately prior to
such change in control.
OPTION PRICE. The option exercise price for options granted under the
Nonemployee Director Plan will be the fair market value per share on the date
the option is granted to the Nonemployee Director. For purposes of the
Nonemployee Director Plan, fair market value per share means the average
between the published closing bid and asked prices of the Common Stock on the
Bulletin Board or if the Common Stock has become listed on Nasdaq then on
Nasdaq instead; or if the Common Stock is not quoted on either the Bulletin
Board or Nasdaq, a value determined by any fair and reasonable means prescribed
by the Committee. The options are not transferable by Nonemployee Directors,
except by will, the laws of descent and distribution, or pursuant to a
qualified domestic relations order. To the extent exercisable, each option may
be exercised from time to time, in full, or in part in minimum installment of
500 shares, during the term of the option. Payment of the option exercise
price may be made in cash or shares of Common Stock already owned by the person
exercising the option, valued at the fair market value per share of Common
Stock on the date of exercise, or a combination of cash and Common Stock. For
purposes of the grant of options under the Nonemployee Director Plan, and not
for any other purpose, the Board of Directors has determined that $10 per share
should be used as the market price for the Common stock prior to the completion
of the offering.
DURATION OF OPTIONS. The unexercised portion of each option automatically
expires, and is no longer exercisable, on the earliest to occur of the
following: (i) seven years after the option is granted, (ii) three months after
the person who was granted the option ceases to be a Nonemployee Director,
other than due to permanent disability, death, or for cause, (iii) one year
following the death or permanent disability of the Nonemployee Director, and
(iv) termination of the Nonemployee Director's service as such, for cause.
ADJUSTMENTS. In the event that there is any change in the number of shares of
Common Stock through the declaration of stock dividends or stock splits, or
through recapitalization, merger, consolidation, combination of shares, or
otherwise, the Committee or the Board of Directors will make such adjustments,
if any, as it may deem appropriate, in the number of shares of Common Stock
subject to outstanding options, the option price, and any other terms it deems
appropriate.
TERMINATION OF PLAN AND AMENDMENT. The Board of Directors of the Company
may, from time to time, terminate or suspend the Nonemployee Director Plan, in
whole or in part, or amend the Nonemployee Director Plan, without approval of
the shareholders of the Company; except that no such action shall be taken by
the Board that (i) materially increases the benefits accruing to the
participants, materially increases the number of securities that may be issued
(except adjustments permitted under the paragraph above), or materially
modifies the eligibility requirements for participation, (ii) causes the
Nonemployee Director Plan to fail to satisfy the applicable requirements of
Rule 16b-3 under the Exchange Act, or any Nonemployee Director to fail to
qualify as a "disinterested person" as defined in that rule, or (iii) impairs
the rights of any option holder granted under the Nonemployee Director Plan,
without such option holder's consent.
FEDERAL INCOME TAX CONSEQUENCES. Under current federal income tax law,
options granted under the Nonemployee Director Plan will be non-qualified stock
options which do not qualify as incentive stock options under Section 422 of
the Internal Revenue Code. The grant of a non- qualified option has no federal
tax consequences for the optionee or the Company. Upon the exercise of a
non-qualified option, the optionee is deemed to realize taxable income to the
extent that the fair market value of the shares of Common Stock exceeds the
option price. The Company is entitled to a tax deduction for such amounts at
the date of exercise. If any stock received upon the exercise of a
non-qualified option is later sold, any excess of the sale price over the fair
market value of the stock at the date of exercise is taxable to the optionee.
RELATED PARTY TRANSACTIONS
Over the past several months, the organizers of the Bank have loaned
approximately $60,000 in aggregate amount to the Company to cover
organizational expenses of the Bank and the Company. No interest is payable on
the loans. All of these loans will be repaid by the Company from the net
proceeds of the offering. The organizers include the members of the Board of
Directors and Judge Michael Schwartz.
The main office of the Bank is being leased by the Bank from T.A.P.
Properties, L.L.C. ("T.A.P."), a Michigan limited liability company, which is
owned by three persons, two of whom are Gebran Anton and Dean Petitpren,
members of the Company's Board of Directors. The lease has a term of 15 years
and provides
16
<PAGE> 19
for the payment of $2,559,375 of total fixed rent over the term of the lease.
The monthly lease payments begin at $10,000 per month in the first year and
increase over the term of the lease to $16,531 per month in the final five
years of the lease. In addition, the Bank will be required to make payments
for taxes, insurance, and other operating expenses. T.A.P. has agreed to
expend up to approximately $1 million for the acquisition and improvement of
the property that is being leased to the Bank, including the construction of
tenant improvements. The Bank will be responsible for the payment of any
amounts over $1,000,000. Such amount is expected to be about $350,000. The
building has approximately 10,000 square feet of usable space.
BANKING TRANSACTIONS
It is anticipated that the directors and officers of the Company and the Bank
and the companies with which they are associated will have banking and other
transactions with the Company and the Bank in the ordinary course of business.
Any loans and commitments to lend to such affiliated persons or entities
included in such transactions will be made in accordance with all applicable
laws and regulations and on substantially the same terms, including interest
rates and collateral, as those prevailing at the time for comparable
transactions with unaffiliated parties of similar creditworthiness, and will
not involve more than normal risk or present other unfavorable features to the
Company and the Bank.
INDEMNIFICATION
The Articles of Incorporation and bylaws of the Company provide for the
indemnification of directors and officers of the Company, including reasonable
legal fees, incurred by such directors and officers while acting for or on
behalf of the Company as a director or officer, subject to certain limitations.
See "Description of Capital Stock -- Indemnification of Directors and
Officers." The scope of such indemnification otherwise permitted by Michigan
law may be limited in certain circumstances by Federal law and regulations.
See "Recent Regulatory Developments." The Company may purchase directors' and
officers' liability insurance for directors and officers of the Company and the
Bank.
PRINCIPAL SHAREHOLDERS
The Company has to date issued only one share of Common Stock. The following
table sets forth certain information with respect to the anticipated beneficial
ownership of the Company's Common Stock after the sale of shares offered
hereby, by (i) each person expected by the Company to beneficially own more
than 5% of the outstanding Common Stock; (ii) each of the current directors and
executive officers of the Company; and (iii) all such directors and executive
officers of the Company as a group. Pursuant to the Underwriting Agreement
(the "Underwriting Agreement"), the Company will direct the Underwriters to
offer to sell the number of shares listed below to the directors and executive
officers listed below (exclusive of the 1,000 shares for each person subject to
the option shown in the applicable footnote to the table). All share numbers
are provided based upon such directions from the Company and non-binding
expressions of interest supplied by the persons listed below. Depending upon
their individual circumstances at the time, each of the such persons may
purchase a greater or fewer number of shares than indicated in the following
table and in fact may purchase no shares.
<TABLE>
<CAPTION>
Number of shares Percentage of
beneficially owned outstanding shares
Name and Address after offering (1) after offering (4)
------------------------------------- ------------------ ------------------
<S> <C> <C>
Harold W. Allmacher
4377 Clarke Drive
East China, Michigan 48054 26,000 (2) 3.15%
Gebran S. Anton
One Sycamore Lane
Grosse Pointe, MI 48230 26,000 (3) 3.15%
Joseph Catenacci
6227 Woodbridge
Washington Twp., MI 48094 26,000 (3) 3.15%
Raymond Contesti
37402 Radde
Clinton Twp., MI 48036 16,000 (3) 1.94%
Salvatore Cottone
11812 Shawnee Pointe
Shelby Twp., MI 48315 26,000 (3) 3.15%
Celestina Giles
34337 Manor Run Circle
Sterling Heights, MI 48312 4,000 (2) 0.48%
</TABLE>
17
<PAGE> 20
<TABLE>
<S> <C> <C>
Philip E. Greco
41238 Clairpointe
Harrison Twp., MI 48045 6,000 (3) 0.73%
Bobby L. Hill
165 Clinton River Drive
Mount Clemens, MI 48043 3,000 (3) 0.36%
Joseph F. Jeannette
45650 Remer
Utica, MI 48317 26,000 (3) 3.15%
Richard J. Miller
42992 Ian Court
Clinton Twp., MI 48038 11,000 (2) 1.33%
Dean S. Petitpren
2540 Military
Port Huron, MI 48061 26,000 (3) 3.15%
Carole L. Schwartz
37473 Alpina Lane
Clinton Twp., MI 48036 26,000 (3) 3.15%
Directors and executive officers of
the Company as a group (12 persons) 222,000 (2)(3) 26.52%
</TABLE>
______________________
(1) Some or all of the Common Stock listed may be held jointly with, or for
the benefit of, spouses and children of, or various trusts established by,
the person indicated.
(2) Includes 1,000 shares that such person has the right to acquire within 60
days of May 1, 1996 pursuant to the Company's 1996 Employee Stock Option
Plan. Such person also holds an option under such plan to purchase an
additional 4,000 shares.
(3) Includes 1,000 shares that such person has the right to acquire within 60
days of May 1, 1996 pursuant to the Company's Nonemployee Director Plan.
Such person also holds an option under such plan to purchase an additional
3,000 shares.
(4) The percentages shown are based on the 825,000 shares offered hereby plus
the number of shares that the named person or group has the right to
acquire within 60 days of May 1, 1996; and in each case assumes no
exercise of the Underwriters' over-allotment option.
SUPERVISION AND REGULATION
GENERAL
Financial institutions and their holding companies are extensively regulated
under federal and state law. Consequently, the growth and earnings performance
of the Company and the Bank can be affected not only by management decisions
and general economic conditions, but also by the statutes administered by, and
the regulations and policies of, various governmental regulatory authorities.
Those authorities include, but are not limited to, the Board of Governors of
the Federal Reserve System (the "Federal Reserve Board"), the FDIC, the
Commissioner, the Internal Revenue Service, and federal and state taxing
authorities. The effect of such statutes, regulations and policies can be
significant, and cannot be predicted with a high degree of certainty.
Federal and state laws and regulations generally applicable to financial
institutions and their holding companies regulate, among other things, the
scope of business, investments, reserves against deposits, capital levels
relative to operations, lending activities and practices, the nature and amount
of collateral for loans, the establishment of branches, mergers, consolidations
and dividends. The system of supervision and regulation applicable to the
Company and the Bank establishes a comprehensive framework for their respective
operations and is intended primarily for the protection of the FDIC's deposit
insurance funds, the depositors of the Bank, and the public, rather than
shareholders of the Bank or the Company.
Federal law and regulations, including provisions added by the Federal
Deposit Insurance Corporation Improvement Act of 1991 ("FDICIA") and
regulations promulgated thereunder, establish supervisory standards applicable
to the lending activities of the Bank, including internal controls, credit
underwriting, loan documentation, and loan-to-value ratios for loans secured by
real property. The Bank intends to comply with these requirements, and in some
cases may apply more restrictive standards.
18
<PAGE> 21
The following references to material statutes and regulations affecting the
Company and the Bank are brief summaries and do not purport to be complete, and
are qualified in their entirety by reference to such statutes and regulations.
Any change in applicable law or regulations may have a material effect on the
business of the Company and the Bank.
THE COMPANY
GENERAL. The Company has received approval of the Commissioner and expects
to receive approval of the Federal Reserve Board to acquire all of the capital
stock to be issued by the Bank in connection with its organization. When the
Company becomes the sole shareholder of the Bank, the Company will be a bank
holding company and, as such, will be required to register with, and will be
subject to regulation by, the Federal Reserve Board under the Bank Holding
Company Act, as amended (the "BHCA"). Under the BHCA, the Company will be
subject to periodic examination by the Federal Reserve Board and will be
required to file periodic reports of its operations and such additional
information as the Federal Reserve Board may require.
In accordance with Federal Reserve Board policy, the Company will be expected
to act as a source of financial strength to the Bank and to commit resources to
support the Bank in circumstances where the Company might not do so absent such
policy. In addition, in certain circumstances a Michigan state bank having
impaired capital may be required by the Commissioner either to restore the
bank's capital by a special assessment upon its shareholders, or to initiate
the liquidation of the Bank.
Any capital loans by a bank holding company to a subsidiary bank are
subordinate in right of payment to deposits and to certain other indebtedness
of such subsidiary bank. In the event of a bank holding company's bankruptcy,
any commitment by the bank holding company to a federal bank regulatory agency
to maintain the capital of a subsidiary bank will be assumed by the bankruptcy
trustee and entitled to a priority of payment. This priority would apply to
guarantees of capital plans under FDICIA.
INVESTMENTS AND ACTIVITIES. Under the BHCA, bank holding companies are
prohibited, with certain limited exceptions, from engaging in activities other
than those of banking or of managing or controlling banks and from acquiring or
retaining direct or indirect ownership or control of voting shares or assets of
any company which is not a bank or bank holding company, other than subsidiary
companies furnishing services to or performing services for its subsidiaries,
and other subsidiaries engaged in activities which the Federal Reserve Board
determines to be so closely related to banking or managing or controlling banks
as to be a proper incident thereto. Since September 29, 1995, the BHCA has
permitted the Federal Reserve Board under specified circumstances to approve
the acquisition, by a bank holding company located in one State, of a bank or
bank holding company located in another State, without regard to any
prohibition contained in State law. See "Recent Regulatory Developments".
In general, any direct or indirect acquisition by the Company of any voting
shares of any bank which would result in the Company's direct or indirect
ownership or control of more than 5% of any class of voting shares of such
bank, and any merger or consolidation of the Company with another bank holding
company, will require the prior written approval of the Federal Reserve Board
under the BHCA. In acting on such applications, the Federal Reserve Board must
consider various statutory factors, including among others, the effect of the
proposed transaction on competition in relevant geographic and product markets,
and each party's financial condition, managerial resources, and record of
performance under the Community Reinvestment Act.
The merger or consolidation of an existing bank subsidiary of the Company
with another bank, or the acquisition by such a subsidiary of assets of another
bank, or the assumption of liability by such a subsidiary to pay any deposits
in another bank, will require the prior written approval of the responsible
Federal depository institution regulatory agency under the Bank Merger Act,
based upon a consideration of statutory factors similar to those outlined above
with respect to the BHCA. In addition, in certain such cases an application
to, and the prior approval of, the Federal Reserve Board under the BHCA and/or
the Commissioner under the Michigan Banking Code, may be required.
With certain limited exceptions, the BHCA prohibits bank holding companies
from acquiring direct or indirect ownership or control of voting shares or
assets of any company other than a bank, unless the company involved is engaged
solely in one or more activities which the Federal Reserve Board has determined
to be so closely related to banking or managing or controlling banks as to be a
proper incident thereto. Under current Federal Reserve Board regulations, such
permissible non-bank activities include such things as mortgage banking,
equipment leasing, securities brokerage, and consumer and commercial finance
company operations. Any such acquisition will require, except in certain
cases, at least 60 days' prior written notice to the Federal Reserve Board.
In evaluating a written notice of such an acquisition, the Federal Reserve
Board will consider various factors, including among others the financial and
managerial resources of the notifying bank holding company, and the relative
public benefits and adverse effects which may be expected to result from the
performance of the activity by an affiliate of such company. The Federal
Reserve Board may apply different standards to activities proposed to be
commenced de novo and activities commenced by acquisition, in whole or in part,
of a going concern. The required notice period may be extended by the Federal
Reserve Board under certain circumstances, including a notice for acquisition
of a company engaged in activities not previously approved by regulation of the
Federal Reserve Board. If such a proposed acquisition is not disapproved or
subjected to
19
<PAGE> 22
conditions by the Federal Reserve Board within the applicable notice period,
it is deemed approved by the Federal Reserve Board.
CAPITAL REQUIREMENTS. The Federal Reserve Board uses capital adequacy
guidelines in its examination and regulation of bank holding companies. If
capital falls below minimum guidelines, a bank holding company may, among other
things, be denied approval to acquire or establish additional banks or non-bank
businesses.
The Federal Reserve Board's capital guidelines establish the following
minimum regulatory capital requirements for bank holding companies: (i) a
leverage capital requirement expressed as a percentage of total assets, (ii) a
risk-based requirement expressed as a percentage of total risk-weighted assets,
and (iii) a Tier 1 leverage requirement expressed as a percentage of total
assets. The leverage capital requirement consists of a minimum ratio of total
capital to total assets of 6%, with an expressed expectation that banking
organizations generally should operate above such minimum level. The
risk-based requirement consists of a minimum ratio of total capital to total
risk-weighted assets of 8%, of which at least one-half must be Tier 1 capital
(which consists principally of shareholders' equity). The Tier 1 leverage
requirement consists of a minimum ratio of Tier 1 capital to total assets of 3%
for the most highly rated companies, with minimum requirements of 4% to 5% for
all others.
The risk-based and leverage standards presently used by the Federal Reserve
Board are minimum requirements, and higher capital levels will be required if
warranted by the particular circumstances or risk profiles of individual
banking organizations. Further, any banking organization experiencing or
anticipating significant growth would be expected to maintain capital ratios,
including tangible capital positions (i.e., Tier 1 capital less all intangible
assets), well above the minimum levels.
The Federal Reserve Board's regulations provide that the foregoing capital
requirements will generally be applied on a bank-only (rather than a
consolidated) basis in the case of a bank holding company with less than $150
million in total consolidated assets. Nonetheless, on a pro forma basis,
assuming the issuance and sale by the Company of the 825,000 shares of Common
Stock offered hereby at $10.00 per share, the Company's leverage capital ratio,
risk-based capital ratio and Tier 1 leverage ratio, in each case as calculated
on a consolidated basis under the Federal Reserve Board's capital guidelines,
would exceed the minimum requirements.
FDICIA requires the federal bank regulatory agencies biennially to review
risk-based capital standards to ensure that they adequately address interest
rate risk, concentration of credit risk and risks from non-traditional
activities and, since adoption of the Riegle Community Development and
Regulatory Improvement Act of 1994 (the "Riegle Act"), to do so taking into
account the size and activities of depository institutions and the avoidance of
undue reporting burdens. See "Recent Regulatory Developments." In 1995, the
agencies adopted regulations requiring as part of the assessment of an
institution's capital adequacy the consideration of: (i) identified
concentrations of credit risks, (ii) the exposure of the institution to a
decline in the value of its capital due to changes in interest rates, and (iii)
the application of revised conversion factors and netting rules on the
institution's potential future exposure from derivative transactions. In
addition, the agencies proposed: (i) additional required data submissions on
periodic Reports of Condition and Income ("Call Reports") regarding interest
rate exposure, to furnish a basis for future regulations imposing explicit
minimum capital charges for interest rate risk, and (ii) incorporation in the
capital adequacy regulations of a measure for market risk in, among other
things, the trading of debt instruments.
DIVIDENDS. The Company is a corporation separate and distinct from the Bank.
Most of the Company's revenues will be received by it in the form of dividends
or interest paid by the Bank. The Bank is subject to statutory restrictions on
its ability to pay dividends. See "The Bank - Dividends." The Federal Reserve
Board has issued a policy statement on the payment of cash dividends by bank
holding companies. In the policy statement, the Federal Reserve Board
expressed its view that a bank holding company experiencing earnings weaknesses
should not pay cash dividends exceeding its net income or which could only be
funded in ways that weakened the bank holding company's financial health, such
as by borrowing. Additionally, the Federal Reserve Board possesses enforcement
powers over bank holding companies and their non-bank subsidiaries to prevent
or remedy actions that represent unsafe or unsound practices or violations of
applicable statutes and regulations. Among these powers is the ability to
proscribe the payment of dividends by banks and bank holding companies. Similar
enforcement powers over the Bank are possessed by the FDIC. The "prompt
corrective action" provisions of FDICIA impose further restrictions on the
payment of dividends by insured banks which fail to meet specified capital
levels and, in some cases, their parent bank holding companies.
In addition to the restrictions on dividends imposed by the Federal Reserve
Board, the Michigan Business Corporation Act imposes certain restrictions on
the declaration and payment of dividends by Michigan corporations such as the
Company. See "Description of Capital Stock- Common Stock-Dividend Rights."
THE BANK
GENERAL. Upon completion of its organization, the Bank will be a Michigan
banking corporation, and its deposit accounts will be insured by the Bank
Insurance Fund (the "BIF") of the FDIC. As a BIF-insured, Michigan chartered
bank, the Bank will be subject to the examination, supervision, reporting and
enforcement requirements of the Commissioner, as the chartering authority for
Michigan banks, and the FDIC, as administrator of the BIF. These agencies and
federal and state law extensively regulate various aspects of the banking
business including, among other things, permissible types and amounts of loans,
investments and other
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<PAGE> 23
activities, capital adequacy, branching, interest rates on loans and on
deposits, the maintenance of non-interest bearing reserves on deposit accounts,
and the safety and soundness of banking practices.
DEPOSIT INSURANCE. As an FDIC-insured institution, the Bank will be required
to pay deposit insurance premium assessments to the FDIC. Pursuant to FDICIA,
the FDIC adopted a risk-based assessment system under which all insured
depository institutions are placed into one of nine categories and assessed
insurance premiums, based upon their level of capital and supervisory
evaluation. Institutions classified as well- capitalized (as defined by the
FDIC) and considered healthy pay the lowest premium while institutions that are
less than adequately capitalized (as defined by the FDIC) and considered of
substantial supervisory concern pay the highest premium. Risk classification
of all insured institutions is made by the FDIC for each semi-annual assessment
period.
FDICIA required the FDIC to establish assessment rates at levels which would
restore the BIF to a mandated reserve ratio of 1.25% of insured deposits over a
period not to exceed 15 years. In November 1995, the FDIC determined that the
BIF had reached the required ratio. Accordingly, the FDIC has established the
schedule of BIF insurance assessments for the first semi-annual assessment
period of 1996, ranging from 0% of deposits for institutions in the highest
category to .27% of deposits for institutions in the lowest category.
The FDIC may terminate the deposit insurance of any insured depository
institution if the FDIC determines, after a hearing, that the institution or
its directors have engaged or are engaging in unsafe or unsound practices, or
have violated any applicable law, regulation, order, or any condition imposed
in writing by, or written agreement with, the FDIC, or if the institution is in
an unsafe or unsound condition to continue operations. The FDIC may also
suspend deposit insurance temporarily during the hearing process for a
permanent termination of insurance if the institution has no tangible capital.
CAPITAL REQUIREMENTS. The FDIC has established the following minimum capital
standards for state-chartered, FDIC-insured non-member banks, such as the Bank:
a leverage requirement consisting of a minimum ratio of Tier 1 capital to total
assets of 3% for the most highly-rated banks with minimum requirements of 4% to
5% for all others, and a risk-based capital requirements consisting of a
minimum ratio of total capital to total risk-weighted assets of 8%, at least
one-half of which must be Tier 1 capital. Tier 1 capital consists principally
of shareholders' equity.
The capital requirements described above are minimum requirements. Higher
capital levels will be required if warranted by the particular circumstances or
risk profiles of individual institutions. As a condition to the regulatory
approvals of the Bank's formation, the Bank will be required to have an initial
capitalization sufficient to provide a ratio of Tier 1 capital to total
estimated assets of at least 8% at the end of the third year of operation.
FDICIA establishes five capital categories, and the federal depository
institution regulators, as directed by FDICIA, have adopted, subject to certain
exceptions, the following minimum requirements for each of such categories:
<TABLE>
<CAPTION>
Total Tier 1
Risk-Based Risk-Based Leverage
Capital Ratio Capital Ratio Ratio
------------- ------------- -----------
<S> <C> <C> <C>
Well capitalized 10% or above 6% or above 5% or above
Adequately capitalized 8% or above 4% or above 4% or above
Undercapitalized Less than 8% Less than 4% Less than 4%
Significantly undercapitalized Less than 6% Less than 3% Less than 3%
Critically undercapitalized -- -- A ratio of tangible
equity to total
assets of 2% or less
</TABLE>
Subject to certain exceptions, these capital ratios are generally determined
on the basis of Call Reports submitted by each depository institution and the
reports of examination by each institution's appropriate federal depository
institution regulatory agency.
Among other things, FDICIA requires the federal depository institution
regulators to take prompt corrective action in respect of depository
institutions that do not meet minimum capital requirements. The scope and
degree of regulatory intervention is linked to the capital category to which a
depository institution is assigned.
Depending upon the capital category to which an institution is assigned, the
regulators' corrective powers include: requiring the submission of a capital
restoration plan; placing limits on asset growth and restrictions on
activities; requiring the institution to issue additional capital stock
(including additional voting stock) or to be acquired; restricting transactions
with affiliates; restricting the interest rate the institution may pay on
deposits; ordering a new election of directors of the institution; requiring
that senior executive officers or directors be dismissed; prohibiting the
institution from accepting deposits from correspondent banks; requiring the
institution to divest certain subsidiaries; prohibiting the payment of
principal or interest on subordinated debt; and ultimately, appointing a
receiver for the institution.
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<PAGE> 24
In general, a depository institution may be reclassified to a lower category
than is indicated by its capital position if the appropriate federal depository
institution regulatory agency determines the institution to be otherwise in an
unsafe or unsound condition or to be engaged in an unsafe or unsound practice.
This could include a failure by the institution, following receipt of a
less-than-satisfactory rating on its most recent examination report, to correct
the deficiency.
DIVIDENDS. Under Michigan law, the Bank will be restricted as to the maximum
amount of dividends it may pay on its Common Stock. A Michigan state bank may
not pay dividends except out of net profits after deducting its losses and bad
debts. A Michigan state bank may not declare or pay a dividend unless the bank
will have a surplus amounting to at least 20% of its capital after the payment
of the dividend. A Michigan state bank having surplus less than the amount of
its capital may not declare or pay any dividend until an amount equal to at
least 10% of net profits for the preceding half year (in the case of quarterly
or semi-annual dividends) or full year (in the case of annual dividends) has
been transferred to surplus. A Michigan state bank may, with the approval of
the Commissioner, by vote of shareholders owning 2/3 of the stock eligible to
vote increase its capital stock by a declaration of a stock dividend, provided
that after the increase the bank's surplus equals at least 20% of its capital
stock, as increased. The Bank may not declare or pay any dividend until the
cumulative dividends on preferred stock (should any such stock be issued and
outstanding) have been paid in full. The Bank has no present plans to issue
preferred stock.
FDICIA generally prohibits a depository institution from making any capital
distribution (including payment of a dividend) or paying any management fee to
its holding company if the depository institution would thereafter be
undercapitalized. The FDIC may prevent an insured bank from paying dividends
if the bank is in default of payment of any assessment due to the FDIC. In
addition, payment of dividends by a bank may be prevented by the applicable
federal regulatory authority if such payment is determined, by reason of the
financial condition of such bank, to be an unsafe and unsound banking practice.
The Federal Reserve Board has issued a policy statement providing that bank
holding companies and insured banks should generally only pay dividends out of
current operating earnings.
INSIDER TRANSACTIONS. The Bank is subject to certain restrictions imposed by
the Federal Reserve Act on any extensions of credit to the Company or its
subsidiaries, on investments in the stock or other securities of the Company or
its subsidiaries and the acceptance of the stock or other securities of the
Company or its subsidiaries as collateral for loans. Certain limitations and
reporting requirements are also placed on extensions of credit by the Bank to
its directors and officers, to directors and officers of the Company and its
subsidiaries, to principal shareholders of the Company, and to "related
interests" of such directors, officers and principal shareholders. In
addition, such legislation and regulations may affect the terms upon which any
person becoming a director or officer of the Company or one of its subsidiaries
or a principal shareholder of the Company may obtain credit from banks with
which the Bank maintains a correspondent relationship.
SAFETY AND SOUNDNESS STANDARDS. On July 10, 1995, the FDIC, the Office of
Thrift Supervision, the Federal Reserve Board and the Office of the Comptroller
of the Currency published final guidelines implementing the FDICIA requirement
that the federal banking agencies establish operational and managerial
standards to promote the safety and soundness of federally insured depository
institutions. The guidelines, which took effect on August 9, 1995, establish
standards for internal controls, information systems, internal audit systems,
loan documentation, credit underwriting, interest rate exposure, asset growth,
and compensation, fees and benefits. In general, the guidelines prescribe the
goals to be achieved in each area, and each institution will be responsible for
establishing its own procedures to achieve those goals. If an institution
fails to comply with any of the standards set forth in the guidelines, the
institution's primary federal regulator may require the institution to submit a
plan for achieving and maintaining compliance. The preamble to the guidelines
states that the agencies expect to require a compliance plan from an
institution whose failure to meet one or more of the standards is of such
severity that it could threaten the safe and sound operation of the
institution. Failure to submit an acceptable compliance plan, or failure to
adhere to a compliance plan that has been accepted by the appropriate
regulator, would constitute grounds for further enforcement action. The
federal banking agencies have also published for comment proposed asset quality
and earnings standards which, if adopted, would be added to the safety and
soundness guidelines. This proposal, like the final guidelines, would make
each depository institution responsible for establishing its own procedures to
meet such goals.
STATE BANK ACTIVITIES. Under FDICIA, as implemented by final regulations
adopted by the FDIC, FDIC-insured state banks are prohibited, subject to
certain exceptions, from making or retaining equity investments of a type, or
in an amount, that are not permissible for a national bank. FDICIA, as
implemented by FDIC regulations, also prohibits FDIC-insured state banks and
their subsidiaries, subject to certain exceptions, from engaging as principal
in any activity that is not permitted for a national bank or its subsidiary,
respectively, unless the bank meets, and continues to meet, its minimum
regulatory capital requirements and the FDIC determines the activity would not
pose a significant risk to the deposit insurance fund of which the bank is a
member. Impermissible investments and activities must be divested or
discontinued within certain time frames set by the FDIC in accordance with
FDICIA. These restrictions are not currently expected to have a material
impact on the operations of the Bank.
CONSUMER BANKING. The Bank's business will include making a variety of types
of loans to individuals. In making these loans, the Bank will be subject to
State usury and regulatory laws and to various federal statutes, such as the
Equal Credit Opportunity Act, Fair Credit Reporting Act, Truth in Lending Act,
Real Estate Settlement Procedures Act, and Home Mortgage Disclosure Act, and
the regulations promulgated thereunder, which prohibit discrimination, specify
disclosures to be made to borrowers regarding credit and settlement costs,
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<PAGE> 25
and regulate the mortgage loan servicing activities of the Bank, including the
maintenance and operation of escrow accounts and the transfer of mortgage loan
servicing. The Riegle Act imposed new escrow requirements on depository and
non-depository mortgage lenders and servicers under the National Flood
Insurance Program. See "Recent Regulatory Developments." In receiving
deposits, the Bank will be subject to extensive regulation under State and
federal law and regulations, including the Truth in Savings Act, the Expedited
Funds Availability Act, the Bank Secrecy Act, the Electronic Funds Transfer
Act, and the Federal Deposit Insurance Act. Violation of these laws could
result in the imposition of significant damages and fines upon the Bank, its
directors and officers.
RECENT REGULATORY DEVELOPMENTS.
In 1994, the Congress enacted two major pieces of banking legislation, the
Riegle Act and the Riegle-Neal Interstate Banking and Branching Efficiency Act
of 1994 (the "Riegle-Neal Act"). The Riegle Act addressed such varied issues
as the promotion of economic revitalization of defined urban and rural
"qualified distressed communities" through special purpose "Community
Development Financial Institutions," the expansion of consumer protection with
respect to certain loans secured by a consumer's home and reverse mortgages,
and reductions in compliance burdens regarding Currency Transaction Reports, in
addition to reform of the National Flood Insurance Program, the promotion of a
secondary market for small business loans and leases, and mandating specific
changes to reduce regulatory impositions on depository institutions and holding
companies.
The Riegle-Neal Act substantially changed the geographic constraints
applicable to the banking industry. Effective September 29, 1995, the
Riegle-Neal Act allows bank holding companies to acquire banks located in any
state in the United States without regard to geographic restrictions or
reciprocity requirements imposed by state law, but subject to certain
conditions, including limitations on the aggregate amount of deposits that may
be held by the acquiring holding company and all of its insured depository
institution affiliates. Effective June 1, 1997 (or earlier if expressly
authorized by applicable state law), the Riegle-Neal Act allows banks to
establish interstate branch networks through acquisitions of other banks,
subject to certain conditions, including certain limitations on the
aggregate amount of deposits that may be held by the surviving bank and all of
its insured depository institution affiliates. The establishment of de novo
interstate branches or the acquisition of individual branches of a bank in
another state (rather than the acquisition of an out-of-state bank in its
entirety) is allowed by the Riegle-Neal Act only if specifically authorized by
state law. The legislation allows individual states to "opt-out" of certain
provisions of the Riegle-Neal Act by enacting appropriate legislation prior to
June 1, 1997.
In November, 1995, Michigan exercised its right to opt-in early to the
Riegle-Neal Act, and permitted non-U.S. banks to establish branch offices in
Michigan. Effective November 29, 1995, the Michigan Banking Code was amended
to permit, in appropriate circumstances and with the approval of the
Commissioner, (i) the acquisition of Michigan-chartered banks by FDIC-insured
banks, savings banks, or savings and loan associations located in other States,
(ii) the sale by a Michigan-chartered bank of one or more of its branches (not
comprising all or substantially all of its assets) to an FDIC-insured bank,
savings bank or savings and loan association located in a State in which a
Michigan- chartered bank could purchase one or more branches of the purchasing
entity, (iii) the acquisition by a Michigan-chartered bank of an FDIC- insured
bank, savings bank or savings and loan association located in another State,
(iv) the acquisition by a Michigan-chartered bank of one or more branches (not
comprising all or substantially all of the assets) of an FDIC-insured bank,
savings bank or savings and loan association located in another State, (v) the
consolidation of one or more Michigan-chartered banks and FDIC-insured banks,
savings banks or savings and loan associations located in other States having
laws permitting such consolidation, with the resulting organization chartered
either by Michigan or one of such other States, (vi) the establishment by
Michigan-chartered banks of branches located in other States, the District of
Columbia, or U.S. territories or protectorates, (vii) the establishment of
branches in Michigan by FDIC-insured banks located in other States, the
District of Columbia or U.S. territories or protectorates having laws
permitting a Michigan-chartered bank to establish a branch in such
jurisdiction, and (viii) the establishment by foreign banks of branches located
in Michigan. The amending legislation also expanded the regulatory authority
of the Commissioner and made certain other changes.
The Michigan Legislature has adopted, with effect from March 28, 1996, the
Credit Reform Act. This statute, together with amendments to other related
laws, permits regulated lenders, indirectly including Michigan-chartered banks,
to charge and collect higher rates of interest and increased fees on certain
types of loans to individuals and businesses. The laws prohibit "excessive
fees and charges", and authorize governmental authorities and borrowers to
bring actions for injunctive relief and statutory and actual damages for
violations by lenders. The statutes specifically authorize class actions, and
also civil money penalties for knowing and wilful, or persistent violations.
FDIC regulations which became effective April 1, 1996, impose limitations
(and in certain cases, prohibitions) on (i) certain "golden parachute"
severance payments by troubled depository institutions and their affiliated
holding companies to institution-affiliated parties (primarily directors,
officers, employees, or principal shareholders of the institution), and (ii)
certain indemnification payments by a depository institution or its affiliated
holding company, regardless of financial condition, to institution-affiliated
parties. The FDIC regulations impose limitations on indemnification payments
which could restrict, in certain circumstances, payments by the Company or the
Bank to their respective directors or officers otherwise permitted under the
Michigan Business Corporation Act ("MBCA") or the Michigan Banking Code,
respectively. See "Description of Capital Stock -- Indemnification of Directors
and Officers."
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<PAGE> 26
DESCRIPTION OF CAPITAL STOCK
The Company's authorized capital stock consists of 9,000,000 shares of Common
Stock and 1,000,000 shares of Preferred Stock. As of the date of this
Prospectus, there is one share of Common Stock issued and outstanding. No
shares of Preferred Stock have been issued by the Company.
Michigan law allows the Company's Board of Directors to issue additional
shares of stock up to the total amount of Common Stock and Preferred Stock
authorized without obtaining the prior approval of the shareholders.
PREFERRED STOCK
The Board of Directors of the Company is authorized to issue Preferred Stock,
in one or more series, from time to time, with such voting powers, full or
limited but not to exceed one vote per share, or without voting powers, and
with such designations, preferences and relative, participating, optional or
other special rights, and qualifications, limitations or restrictions thereof,
as may be provided in the resolution or resolutions adopted by the Board of
Directors. The authority of the Board of Directors includes, but is not
limited to, the determination or fixing of the following with respect to shares
of such class or any series thereof: (i) the number of shares and designation
of such series; (ii) the dividend rate and whether dividends are to be
cumulative; (iii) whether shares are to be redeemable, and, if so, whether
redeemable for cash, property or rights; (iv) the rights to which the holders
of shares shall be entitled, and the preferences, if any, over any other
series; (v) whether the shares shall be subject to the operation of a purchase,
retirement or sinking fund, and, if so, upon what conditions; (vi) whether the
shares shall be convertible into or exchangeable for shares of any other class
or of any other series of any class of capital stock and the terms and
conditions of such conversion or exchange; (vii) the voting powers, full or
limited, if any, of the shares; (viii) whether the issuance of any additional
shares, or of any shares of any other series, shall be subject to restrictions
as to issuance, or as to the powers, preferences or rights of any such other
series; and (ix) any other preferences, privileges and powers and relative,
participating, optional or other special rights and qualifications, limitations
or restrictions.
COMMON STOCK
Dividend Rights
Subject to any prior rights of any holders of Preferred Stock then
outstanding, the holders of the Common Stock will be entitled to dividends
when, as and if declared by the Company's Board of Directors out of funds
legally available therefor. Under Michigan law, dividends may be legally
declared or paid only if after the distribution the corporation can pay its
debts as they come due in the usual course of business and the corporation's
total assets equal or exceed the sum of its liabilities plus the amount that
would be needed to satisfy the preferential rights upon dissolution of any
holders of preferred stock then outstanding whose preferential rights are
superior to those receiving the distribution.
Funds for the payment of dividends by the Company are expected to be obtained
primarily from dividends of the Bank. There can be no assurance that the
Company will have funds available for dividends, or that if they are available,
that dividends will be declared by the Company's Board of Directors. As the
Bank is not expected to be profitable during its start up period, the Company
does not expect to be in a position to declare dividends at any time in the
near future.
Voting Rights
Subject to the rights, if any, of holders of shares of Preferred Stock then
outstanding, all voting rights are vested in the holders of shares of Common
Stock. Each share of Common Stock entitles the holder thereof to one vote on
all matters, including the election of directors. Shareholders of the Company
do not have cumulative voting rights.
Preemptive Rights
Holders of Common Stock do not have preemptive rights.
Liquidation Rights
Subject to any rights of any Preferred Stock then outstanding, holders of
Common Stock are entitled to share on a pro rata basis in the net assets of the
Company which remain after satisfaction of all liabilities.
Transfer Agent
State Street Bank & Trust Company of Boston, Massachusetts, serves as the
transfer agent of the Company's Common Stock.
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<PAGE> 27
DESCRIPTION OF CERTAIN CHARTER PROVISIONS
The following provisions of the Company's Articles of Incorporation may
delay, defer, prevent, or make it more difficult for a person to acquire the
Company or to change control of the Company's Board of Directors, thereby
reducing the Company's vulnerability to an unsolicited takeover attempt.
Classification of the Board of Directors
The Company's Articles of Incorporation provide for the Board of Directors to
be divided into three classes of directors, each class to be as nearly equal in
number as possible, and also provides that the number of directors shall be
fixed by majority of the Board at no fewer than six nor more than fifteen.
Pursuant to the Articles of Incorporation, the Company's directors have been
divided into three classes. Four Class I directors have been elected for a
term expiring at the 1997 annual meeting of shareholders, four Class II
directors have been elected for a term expiring at the 1998 annual meeting of
shareholders, and four Class III directors have been elected for a term
expiring at the 1999 annual meeting of shareholders (in each case, until their
respective successors are elected and qualified).
Removal of Directors
The MBCA provides that, unless the articles of incorporation otherwise
provide, shareholders may remove a director or the entire board of directors
with or without cause. The Company's Articles of Incorporation provide that a
director may be removed only for cause and only by the affirmative vote of the
holders of a majority of the voting power of all the shares of the Company
entitled to vote generally in the election of directors.
Filling Vacancies on the Board of Directors
The Company's Articles of Incorporation provide that a new director chosen to
fill a vacancy on the Board of Directors will serve for the remainder of the
full term of the class in which the vacancy occurred.
Nominations of Director Candidates
The Company Articles of Incorporation include a provision governing
nominations of director candidates. Nominations for the election of directors
may be made by the Board of Directors, a nominating committee appointed by the
Board of Directors, or any shareholder entitled to vote for directors. In the
case of a shareholder nomination, the Articles of Incorporation provide certain
procedures that must be followed. The shareholder intending to nominate
candidates for election must deliver written notice containing certain
specified information to the Secretary of the Company at least sixty (60) days
but not more than ninety (90) days prior to the anniversary date of the
immediately preceding annual meeting of shareholders.
Certain Shareholder Action
The Company's Articles of Incorporation require that any shareholder action
must be taken at an annual or special meeting of shareholders, that any meeting
of shareholders must be called by the Board of Directors or the Chairman of the
Board, and prohibit shareholder action by written consent. Shareholders of the
Company are not permitted to call a special meeting of shareholders or require
that the Board call such a special meeting. The MBCA permits shareholders
holding 10% or more of all of the shares entitled to vote at a meeting to
request the Circuit Court of the County in which the Company's principal place
of business or registered office is located to order a special meeting of
shareholders for good cause shown.
Increased Shareholders' Vote for Alteration, Amendment or Repeal of Article
Provisions
The Company's Articles of Incorporation require the affirmative vote of the
holders of at least 66 2/3% of the voting stock of the Company entitled to vote
generally in the election of directors for the alteration, amendment or repeal
of, or the adoption of any provision inconsistent with the foregoing provisions
of the Company's Articles of Incorporation.
CERTAIN ANTI-TAKEOVER PROVISIONS
Michigan Fair Price Act. Certain provisions of the MBCA establish a statutory
scheme similar to the supermajority and fair price provisions found in many
corporate charters (the "Fair Price Act"). The Fair Price Act provides that a
supermajority vote of 90 percent of the shareholders and no less than
two-thirds of the votes of noninterested shareholders must approve a "business
combination." The Fair Price Act defines a "business combination" to encompass
any merger, consolidation, share exchange, sale of assets, stock issue,
liquidation, or reclassification of securities involving an "interested
shareholder" or certain "affiliates." An "interested shareholder" is generally
any person who owns 10 percent or more of the outstanding voting shares of the
corporation. An "affiliate" is a person who directly or indirectly controls,
is controlled by, or is under common control with a specified person.
The supermajority vote required by the Fair Price Act does not apply to
business combinations that satisfy certain conditions. These conditions
include, among others: (i) the purchase price to be paid for the shares of the
corporation in the business combination must be at least equal to the highest
of either (a) the
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<PAGE> 28
market value of the shares or (b) the highest per share price paid by the
interested shareholder within the preceding two-year period or in the
transaction in which the shareholder became an interested shareholder,
whichever is higher; and (ii) once becoming an interested shareholder, the
person may not become the beneficial owner of any additional shares of the
corporation except as part of the transaction which resulted in the interested
shareholder becoming an interested shareholder or by virtue of proportionate
stock splits or stock dividends.
The requirements of the Fair Price Act do not apply to business combinations
with an interested shareholder that the board of directors has approved or
exempted from the requirements of the Fair Price Act by resolution prior to the
time that the interested shareholder first became an interested shareholder.
Control Share Act. The MBCA regulates the acquisition of "control shares" of
large public Michigan corporations (the "Control Share Act"). Following
completion of the offering, the Control Share Act is expected to apply to the
Company and its shareholders.
The Control Share Act establishes procedures governing "control share
acquisitions." A control share acquisition is defined as an acquisition of
shares by an acquiror which, when combined with other shares held by that
person or entity, would give the acquiror voting power at or above any of the
following thresholds: 20 percent, 33-1/3 percent or 50 percent. Under the
Control Share Act, an acquiror may not vote "control shares" unless the
corporation's disinterested shareholders (defined to exclude the acquiring
person, officers of the target corporation, and directors of the target
corporation who are also employees of the corporation) vote to confer voting
rights on the control shares. The Control Share Act does not affect the voting
rights of shares owned by an acquiring person prior to the control share
acquisition.
The Control Share Act entitles corporations to redeem control shares from the
acquiring person under certain circumstances. In other cases, the Control
Share Act confers dissenters' right upon all of the corporation's shareholders
except the acquiring person.
INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Company's Articles of Incorporation provide that the Company shall
indemnify its present and past directors, executive officers, and such other
persons as the Board of Directors may authorize, to the fullest extent
permitted by law.
The Company's Bylaws contain indemnification provisions concerning third
party actions as well as actions in the right of the Company. The Bylaws
provide that the Company shall indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative
(other than an action by or in the right of the Company) by reason of the fact
that he or she is or was a director or officer of the Company, or while serving
as such a director or officer, is or was serving at the request of the Company
as a director, officer, partner, trustee, employee or agent of another foreign
or domestic corporation, partnership, joint venture, trust or other enterprise,
whether for profit or not, against expenses (including attorney's fees),
judgements, penalties, fees and amounts paid in settlement actually and
reasonably incurred by him or her in connection with such action, suit or
proceeding if he or she acted in good faith and in a manner he or she
reasonably believed to be in or not opposed to the best interests of the
Company or its shareholders, and, with respect to any criminal action or
proceeding, had no reasonable cause to believe his or her conduct was unlawful.
With respect to derivative actions, the Bylaws provide that the Company shall
indemnify any person who was or is a party to or is threatened to be made a
party to any threatened, pending or completed action or suit by or in the right
of the Company to procure a judgment in its favor by reason of the fact that he
or she is or was a director or officer of the Company, or, while serving as such
a director or officer, is or was serving at the request of the Company as a
director, officer, partner, trustee, employee or agent of another foreign or
domestic corporation, partnership, joint venture, trust or other enterprise,
whether for profit or not, against expenses (including attorney's fees) and
amounts paid in settlement actually and reasonably incurred by him or her in
connection with the action or suit if he or she acted in good faith and in a
manner he or she reasonably believed to be in or not opposed to the best
interests of the Company or its shareholders. No indemnification is provided in
the Bylaws in respect of any claim, issue or matter in which such person has
been found liable to the Company except to the extent that a court of competent
jurisdiction determines upon application that, despite the adjudication of
liability but in view of all circumstances of the case, such person is fairly
and reasonably entitled to indemnity for such expenses which such court shall
deem proper.
LIMITATION OF DIRECTOR LIABILITY
The MBCA permits corporations to limit the personal liability of their
directors in certain circumstances. The Company's Articles of Incorporation
provide that a director of the Company shall not be personally liable to the
Company or its shareholders for monetary damages for breach of the director's
fiduciary duty. However, they do not eliminate or limit the liability of a
director for any breach of a duty, act or omission for which the elimination or
limitation of liability is not permitted by the MBCA, currently including,
without limitation, the following: (1) breach of the director's duty of
loyalty to the Company or its shareholders; (2) acts or omissions not in good
faith or that involve intentional misconduct or a knowing violation of law; (3)
illegal loans, distributions of dividends or assets, or stock purchases as
described in Section 551(1) of MBCA; and (4) transactions from which the
director derived an improper personal benefit.
26
<PAGE> 29
SHARES ELIGIBLE FOR FUTURE SALE
As of May 14, 1996, the Company had one share of Common Stock outstanding
that was held by a member of the Board of Directors. Upon completion of the
offering, the Company expects to have 825,000 shares of its Common Stock
outstanding. The 825,000 shares of the Company's Common Stock sold in the
offering (plus any additional shares sold upon the Underwriters' exercise of
their over-allotment option) have been registered with the Securities and
Exchange Commission ("SEC") under the Securities Act of 1933 (the "Securities
Act") and may generally be resold without registration under the Securities Act
unless they were acquired by directors, executive officers, or other affiliates
of the Company (collectively, "Affiliates"). Affiliates of the Company may
generally only sell shares of the Common Stock pursuant to Rule 144 under the
Securities Act.
In general, under Rule 144 as currently in effect, an affiliate (as defined
in Rule 144) of the Company may sell shares of Common Stock within any
three-month period in an amount limited to the greater of 1% of the outstanding
shares of the Company's Common Stock or the average weekly trading volume in
the Company's Common Stock during the four calendar weeks preceding such sale.
Sales under Rule 144 are also subject to certain manner-of-sale provisions,
holding periods for restricted shares, notice requirements, and the
availability of current public information about the Company.
The Company and the directors and officers of the Company and the Bank (who
are expected to hold an aggregate of approximately 210,000 shares after the
offering), have agreed, or will agree, that (a) they will not issue, offer for
sale, sell, transfer, grant options to purchase or otherwise dispose of any
shares of Common Stock without the prior written consent of the Managing
Underwriter for a period of 180 days from the date of this Prospectus, except
that (i) the Company may issue shares upon the exercise of options under the
Company's 1996 Employee Stock Option Plan or the Nonemployee Directors Plan and
(ii) the directors and officers may gift Common Stock owned by them to others
who have agreed in writing to be bound by the same agreement, and (b) they will
not sell, transfer, assign, pledge, or hypothecate any shares of Common Stock
for a period of three months from the date of this Prospectus acquired in
connection with directions from the Company for issuer directed securities.
As of May 14, 1996, the Company had outstanding 9 options to purchase an
aggregate of 36,000 shares of its Common Stock at an exercise price of $10 per
share pursuant to the Company's Nonemployee Directors Plan and 3 options to
purchase an aggregate of 15,000 shares of its Common Stock at an exercise price
of $10 per share pursuant to the Company's 1996 Employee Stock Option Plan.
These options are held by a total of 12 persons, each of whom is a member of
the Board of Directors of the Company.
Prior to the offering, there has been no public trading market for the Common
Stock, and no predictions can be made as to the effect, if any, that sales of
shares or the availability of shares for sale will have on the prevailing
market price of the Common Stock after completion of the offering.
Nevertheless, sales of substantial amounts of Common Stock in the public market
could have an adverse effect on prevailing market prices.
UNDERWRITING
The Underwriters named below (the "Underwriters"), have severally agreed,
subject to the terms and conditions of the Underwriting Agreement, to purchase
from the Company, the respective number of shares of the Company's Common Stock
set forth opposite their names in the table below.
<TABLE>
<CAPTION>
Number
Underwriter of Shares
----------- ---------
<S> <C>
Roney & Co. . . . . . . . . . . . . . . . . . . . . . . . .
----------
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . 825,000
</TABLE>
The Underwriting Agreement provides that the obligations of the Underwriters
thereunder are subject to certain conditions and provides for the Company's
payment of certain expenses incurred in connection with the review of the
underwriting arrangements for the offering by the National Association of
Securities Dealers, Inc. The Underwriters are obligated to purchase at least
825,000 of the shares of Common Stock offered hereby, excluding shares covered
by the over-allotment option granted to the Underwriters, if any are purchased.
The Company and the Underwriters have agreed that the Underwriters will
purchase the 825,000 shares of Common Stock offered hereunder at a price to the
public of $10.00 per share less Underwriting Discounts and Commissions of
$________ per share. However, no Underwriting Discounts or Commissions will be
incurred by the Company with respect to any shares sold to members of the Board
of Directors of the Company or their immediate families. The Underwriters
propose to offer the Common Stock to selected dealers who are members of the
National Association of Securities Dealers, Inc., at a price of $10 per share
less a concession not in excess of $_______ per share. The Underwriters may
allow, and such dealers may re-allow, concessions not in excess of $______ per
share to certain other brokers and dealers.
27
<PAGE> 30
The Underwriters have informed the Company that the Underwriters do not
intend to make sales to any accounts over which they exercise discretionary
authority.
The Company has granted the Underwriters an option, exercisable within 30
days after the date of the offering, to purchase up to an additional 123,750
shares of Common Stock from the Company to cover over-allotments, if any, at
the same price per share as is to be paid by the Underwriters for the other
shares offered hereby. The Underwriters may purchase such shares only to cover
over-allotments, if any, in connection with the offering.
The Underwriting Agreement contains indemnity provisions between the
Underwriters and the Company and the controlling persons thereof against
certain liabilities, including liabilities arising under the Securities Act.
The Company is generally obligated to indemnify the Underwriters and their
controlling persons in connection with losses or claims arising out of any
untrue statement of a material fact contained in this Prospectus or in related
documents filed with the Commission or with any state securities administrator,
or any omission of certain material facts from such documents.
There has been no public trading market for the Common Stock. The price at
which the shares are being offered to the public was determined by negotiations
between the Company and the Managing Underwriter. This price is not based upon
earnings or any history of operations and should not be construed as indicative
of the present or anticipated future value of the Common Stock. Several
factors were considered in determining the initial offering price of the Common
Stock, among them the size of the offering, the desire that the security being
offered be attractive to individuals and the Managing Underwriters's experience
in dealing with initial public offerings for financial institutions.
LEGAL PROCEEDINGS
Neither the Bank nor the Company is a party to any pending legal proceedings
or aware of any threatened legal proceedings where the Company or the Bank may
be exposed to any material loss.
LEGAL MATTERS
The legality of the Common Stock offered hereby will be passed upon for the
Company by Dickinson, Wright, Moon, Van Dusen & Freeman, Detroit and Bloomfield
Hills, Michigan. Warner Norcross & Judd LLP Grand Rapids, Michigan, is acting
as counsel for the Managing Underwriter in connection with certain legal
matters relating to the shares of Common Stock offered hereby.
EXPERTS
The financial statements of the Company included in this Prospectus have been
audited by Plante & Moran, LLP, independent public accountants, as indicated in
their report with respect thereto. Such financial statements and their report
have been included herein in reliance upon the authority of said firm as
experts in accounting and auditing.
ADDITIONAL INFORMATION
The Company has filed with the Securities and Exchange Commission ("SEC") a
Form SB-2 Registration Statement under the Securities Act with respect to the
Common Stock offered hereby. This Prospectus does not contain all of the
information set forth in the Registration Statement, certain portions of which
have been omitted as permitted by the Rules and Regulations of the SEC. For
further information pertaining to the shares of Common Stock offered hereby and
to the Company, reference is made to the Registration Statement, including the
Exhibits filed as a part thereof, copies of which can be inspected at and
copied at the Public Reference Section of the SEC at 450 Fifth Street, N.W.,
Washington, D.C. 20549, and at the SEC's regional offices located at
Northwestern Atrium Center, 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661, and Room 1400, 75 Park Place, New York New York 10007. Copies
of such materials can also be obtained at prescribed rates by writing to the
Public Reference Section of the SEC at 450 Fifth, N.W., Washington, D.C. 20549.
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the Company
pursuant to the provisions discussed above under "Description of Capital Stock
-- Indemnification of Directors and Officers," or otherwise, the Company has
been advised that in the opinion of the SEC such indemnification is against
public policy as expressed in the Securities Act and is, therefore,
unenforceable.
28
<PAGE> 31
COMMUNITY CENTRAL BANK CORPORATION
FINANCIAL STATEMENTS
(A COMPANY IN THE DEVELOPMENT STAGE)
INDEX
<TABLE>
<CAPTION>
PAGE NO.
--------
<S> <C>
INDEPENDENT AUDITORS' REPORT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-2
FINANCIAL STATEMENTS
Balance Sheet . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-3
Statement of Shareholder's Equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-4
Statement of Income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-5
Statement of Cash Flows . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-6
Notes to Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-7
</TABLE>
F - 1
<PAGE> 32
INDEPENDENT AUDITORS' REPORT
The Board of Directors
Community Central Bank Corporation
We have audited the accompanying balance sheet of Community Central Bank
Corporation (a Company in the development stage) as of May 8, 1996, and the
related statements of shareholder's equity, income and cash flows for the
period from April 26, 1996 (inception) through May 8, 1996. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform our audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Community Central Bank
Corporation (a Company in the development stage) as of May 8, 1996, and the
results of its operations and cash flows for the period from April 26, 1996
(inception) through May 8, 1996 in conformity with generally accepted
accounting principles.
May 8, 1996
/s/ PLANTE & MORAN, LLP
------------------------------
Bloomfield Hills, Michigan
F - 2
<PAGE> 33
COMMUNITY CENTRAL BANK CORPORATION
(A COMPANY IN THE DEVELOPMENT STAGE)
BALANCE SHEET
MAY 8, 1996
<TABLE>
<CAPTION>
ASSETS
<S> <C>
Cash $ 12,535
Office Equipment 4,550
Organization and deferred offering costs 35,915
----------
Total assets $ 53,000
==========
LIABILITIES AND SHAREHOLDER'S EQUITY
Accounts payable $ 6,000
Related party notes payable (Note 3) 47,000
SHAREHOLDER'S EQUITY
Preferred stock, no par value; 1,000,000
shares authorized, none issued ----
Common stock - no par value 9,000,000
shares authorized, none issued ----
----------
Total shareholder's equity ----
----------
Total liabilities and shareholder's equity $ 53,000
==========
</TABLE>
See Notes to Financial Statements.
F - 3
<PAGE> 34
COMMUNITY CENTRAL BANK CORPORATION
(A COMPANY IN THE DEVELOPMENT STAGE)
STATEMENT OF SHAREHOLDER'S EQUITY
PERIOD FROM APRIL 26, 1996 (INCEPTION) TO MAY 8, 1996
Balance at April 26, 1996 $ ----
Balance at May 8, 1996 $ ----
See Notes to Financial Statements.
F - 4
<PAGE> 35
COMMUNITY CENTRAL BANK CORPORATION
(A COMPANY IN THE DEVELOPMENT STAGE)
STATEMENT OF INCOME
PERIOD FROM APRIL 26, 1996 (INCEPTION) TO MAY 8, 1996
Total revenue $ ----
Total expense ----
---------
Net Income $ ----
See Notes to Financial Statements.
F - 5
<PAGE> 36
COMMUNITY CENTRAL BANK CORPORATION
(A COMPANY IN THE DEVELOPMENT STAGE)
STATEMENT OF CASH FLOWS
PERIOD FROM APRIL 26, 1996 (INCEPTION) TO MAY 8, 1996
<TABLE>
<S> <C>
Cash flows from operating activities from development stage
operations -
Net income $ ----
Adjustments to reconcile net income from development stage
operations to net cash provided by operating activities:
Increase in accounts payable 6,000
---------
Net cash used in operating activities 6,000
Cash flows from investing activities -
Purchase of office equipment (4,550)
Organizational costs (15,905)
---------
Net cash used in investing activities (20,455)
Cash flows from financing activities -
Proceeds from related party notes payable 47,000
Deferred offering costs (20,010)
---------
Net cash provided by financing activities 26,990
---------
Net increase in cash 12,535
Cash, beginning balance ----
---------
Cash, ending balance $ 12,535
=========
</TABLE>
See Notes to Financial Statements.
F - 6
<PAGE> 37
COMMUNITY CENTRAL BANK CORPORATION
(A COMPANY IN THE DEVELOPMENT STAGE)
NOTES TO FINANCIAL STATEMENTS
MAY 8, 1996
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Organization - Community Central Bank Corporation (the
"Company") was incorporated on April 26, 1996 as a bank
holding company to establish and operate a new bank, Community
Central Bank (the "Bank") in Mount Clemens, Michigan. The
Company intends to raise a minimum of $7,590,000 in equity
capital through the sale of 825,000 shares of the Company's
common stock at $10 per share, net of $660,000 in underwriting
discounts. Proceeds from the offering will be used to
capitalize the Bank, lease facilities and provide working
capital.
Basis of presentation - The preparation of financial
statements in conformity with generally accepted accounting
principles requires management to make estimates and
assumptions that affect the amounts reported in the financial
statements and accompanying notes. Actual results could
differ from those estimates.
NOTE 2 - ORGANIZATION AND DEFERRED OFFERING COSTS
Organization and deferred offering costs represent
incorporation costs, consulting, legal and accounting costs
and costs relating to the common stock offering. Management
anticipates that deferred offering costs will approximate
$180,000 through completion of the offering. Deferred
offering costs will be offset against the offering proceeds.
NOTE 3 - NOTES PAYABLE RELATED PARTIES
Non interest bearing demand notes payable in the amount of
$47,000 are outstanding to the Company's organizers.
Management intends to repay the loans from the proceeds of the
common stock offering.
F - 7
<PAGE> 38
-------------------------------------------------------
-------------------------------------------------------
NO DEALER, SALESPERSON OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS
PROSPECTUS IN CONNECTION WITH THE OFFER MADE BY THIS PROSPECTUS, AND IF GIVEN OR
MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED BY THE COMPANY OR ANY UNDERWRITERS. NEITHER THE DELIVERY OF THIS
PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE
ANY IMPLICATION THAT THE INFORMATION HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT
TO THE DATE HEREOF. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR A
SOLICITATION OF AN OFFER TO BUY ANY SECURITIES OFFERED HEREBY BY ANYONE IN ANY
JURISDICTION IN WHICH SUCH OFFER OR SOLICITATION IS NOT AUTHORIZED OR IN WHICH
THE PERSON MAKING SUCH OFFER OR SOLICITATION IS NOT QUALIFIED TO DO SO OR TO
ANYONE TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION.
------------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Available Information.................. 2
Prospectus Summary..................... 3
Risk Factors........................... 5
Use of Proceeds........................ 8
Dividend Policy........................ 8
Capitalization......................... 9
Business............................... 9
Management............................. 12
Related Party Transactions............. 16
Principal Shareholders................. 17
Supervision and Regulation............. 18
Description of Capital Stock........... 24
Shares Eligible for Future Sale........ 27
Underwriting........................... 27
Legal Proceedings...................... 28
Legal Matters.......................... 28
Experts................................ 28
Additional Information................. 28
Index to Financial Statements.......... F-1
</TABLE>
------------------------
Until , 1996 (25 days after the commencement date of this
offering), all dealers effecting transactions in the Common Stock, whether or
not participating in this distribution, may be required to deliver a Prospectus.
This delivery requirement is in addition to the obligation of dealers to deliver
a Prospectus when acting as underwriter and with respect to their unsold
allotments or subscriptions.
-------------------------------------------------------
-------------------------------------------------------
-------------------------------------------------------
-------------------------------------------------------
825,000 SHARES
[COMMUNITY CENTRAL BANK CORP. LOGO]
COMMON STOCK
--------------------------
PROSPECTUS
--------------------------
(LOGO)/----
, 1996
-------------------------------------------------------
-------------------------------------------------------
<PAGE> 39
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 24. Indemnification of Directors and Officers.
The registrant's Articles of Incorporation provide that the registrant
shall indemnify its present and past directors, executive officers, and such
other persons as the Board of Directors may authorize, to the full extent
permitted by law.
The registrant's Bylaws contain indemnification provisions concerning third
party actions as well as actions in the right of the registrant. The Bylaws
provide that the registrant shall indemnify any person who was or is a party or
is threatened to be made a party to any threatened, pending or completed
action, suit or proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of the registrant) by
reason of the fact that he or she is or was a director or officer of the
registrant or is, or while serving as such a director or officer was, serving
at the request of the registrant as a director, officer, partner, trustee,
employee or agent of another foreign or domestic corporation, partnership,
joint venture, trust or other enterprise, whether for profit or not, against
expenses (including attorney's fees), judgements, penalties, fees and amounts
paid in settlement actually and reasonably incurred by him or her in connection
with such action, suit or proceeding if he or she acted in good faith and in a
manner he or she reasonably believed to be in or not opposed to the best
interests of the registrant or its shareholders, and with respect to any
criminal action or proceeding, had no reasonable cause to believe his or her
conduct was unlawful.
With respect to derivative actions, the Bylaws provide that the registrant
shall indemnify any person who was or is a party to or is threatened to be made
a party to any threatened, pending or completed action or suit by or in the
right of the registrant to procure a judgment in its favor by reason of the
fact that he or she is or was a director or officer of the registrant, or is or
was serving at the request of the registrant as a director, officer, partner,
trustee, employee or agent of another foreign or domestic corporation,
partnership, joint venture, trust or other enterprise against expenses
(including attorney's fees) actually and reasonably incurred by him or her in
connection with the defense or settlement of such judgment or suit if he or she
acted in good faith and in a manner he or she reasonably believed to be in or
not opposed to the best interests of the registrant or its shareholders and
except that no indemnification shall be made in respect of any claim, issue or
matter as to which such person has been found liable to the registrant unless
and only to the extent that the court in which such action or suit was brought
shall determine upon application that, despite the adjudication of liability
but in view of all circumstances of the case, such person is fairly and
reasonably entitled to indemnity for such expenses which such court shall deem
proper.
The registrant's Articles of Incorporation provide that a director of the
registrant shall not be personally liable to the registrant or its shareholders
for monetary damages for breach of the director's fiduciary duty. However, it
does not eliminate or limit the liability of a director for any breach of a
duty, act or omission for which the elimination or limitation of liability is
not permitted by the MBCA, currently including, without limitation, the
following: (1) breach of the director's duty of loyalty to the registrant or
its shareholders; (2) acts or omissions not in good faith or that involve
intentional misconduct or a knowing violation of law; (3) illegal loans,
distributions of dividends or assets, or stock purchases as described in
Section 551(1) of MBCA; and (4) transactions from which the director derived an
improper personal benefit.
Item 25. Other Expenses of Issuance and Distribution.
The following table sets forth the various expenses in connection with the
sale and distribution of the Common Stock being registered, other than
underwriting discounts and commissions. All amounts shown are estimates,
except the SEC registration fee and the NASD filing fee, and assume sale of
825,000 shares in the offering.
<TABLE>
<S> <C>
SEC registration fee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 3,271.55
NASD filing fee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,448.75
Printing and mailing expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . 15,000.00
Fees and expenses of counsel . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100,000.00
Accounting and related expenses . . . . . . . . . . . . . . . . . . . . . . . . . . 30,000.00
Blue Sky fees and expenses (including counsel fees) . . . . . . . . . . . . . . . . 20,000.00
Registrar and Transfer Agent fees . . . . . . . . . . . . . . . . . . . . . . . . . 3,500.00
Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,000.00
----------
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $178,220.30
===========
</TABLE>
II-1
<PAGE> 40
Item 26. Recent Sales of Unregistered Securities.
The registrant has borrowed approximately $60,000 from its organizers
during the past six months to pay organizational and related expenses. To the
extent that such transactions would be deemed to involve the offer or sale of a
security, the registrant would claim an exemption under Section 4(2) of the
Securities Act of 1933 for such transactions. In addition, the registrant,
sold one share of its Common Stock to Harold Allmacher its Chairman and Chief
Executive Officer for $10. The registrant also claims an exemption for such
sale pursuant to Section 4(2).
Item 27. Exhibits.
<TABLE>
<CAPTION>
Exhibit No. Description
----------- -----------
<S> <C>
1 Form of Underwriting Agreement
3.1 Articles of Incorporation of Community Central Bank Corporation
3.2 Bylaws of Community Central Bank Corporation
4.1 Specimen Stock Certificate of Community Central Bank Corporation
5 Opinion of Dickinson, Wright, Moon, Van Dusen & Freeman
10.1 1996 Employee Stock Option Plan
10.2 1996 Stock Option Plan for Nonemployee Directors
10.3 Lease Agreement
21 Subsidiaries of Community Central Bank Corporation
23.1 Consent of Dickinson, Wright, Moon, Van Dusen & Freeman (included in opinion filed as Exhibit 5)
23.2 Consent of Plante & Moran, LLP
27 Financial Data Schedule
</TABLE>
Item 28. Undertakings.
The undersigned registrant hereby undertakes as follows:
(1) The registrant will provide to the underwriter at the closing
specified in the underwriting agreement certificates in such denominations and
registered in such names as required by the underwriter to permit prompt
delivery to each purchaser.
(2) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling persons
of the registrant pursuant to the foregoing provisions, or otherwise, the
registrant has been advised that in the opinion of the SEC such indemnification
is against public policy as expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for indemnification against
liabilities arising under the Securities Act (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of such issue.
II-2
<PAGE> 41
(3) The registrant will:
(i) For determining any liability under the Securities Act, treat
the information omitted from the form of prospectus filed as part of this
registration statement in reliance upon Rule 430A and contained in a form
of prospectus filed by the registrant under Rule 424(b)(1), or (4) or
497(h) under the Securities Act as part of this registration statement as
of the time the SEC declared it effective; and
(ii) For determining any liability under the Securities Act, treat
each post-effective amendment that contains a form of prospectus as a new
registration statement for the securities offered in the registration
statement, and that offering of the securities at that time as the initial
bona fide offering of those securities.
II-3
<PAGE> 42
SIGNATURES
In accordance with the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements of filing on Form SB-2 and authorized this registration
statement to be signed on its behalf by the undersigned, thereunder duly
authorized, in the City of Mount Clemens, State of Michigan, on May 17, 1996.
COMMUNITY CENTRAL BANK CORPORATION
By:/s/ Harold W. Allmacher, Chairman
---------------------------------
Harold W. Allmacher, Chairman
and Chief Executive Officer
In accordance with the requirements of the Securities Act of 1933, this
registration statement was signed by the following persons in the capacities
indicated on May 17, 1996.
<TABLE>
<CAPTION>
Signatures Title
---------- -----
<S> <C>
/s/ Harold W. Allmacher
----------------------------- Chairman of the Board, Chief Executive Officer and
Harold W. Allmacher Director
/s/ Gebran S. Anton
----------------------------- Director
Gebran S. Anton
/s/ Joseph Catenacci
----------------------------- Director
Joseph Catenacci
/s/ Raymond Contesti
----------------------------- Director
Raymond Contesti
/s/ Salvatore Cottone
----------------------------- Director
Salvatore Cottone
/s/ Celestina Giles
----------------------------- Corporate Secretary and Director
Celestina Giles
/s/ Philip E. Greco
----------------------------- Director
Philip E. Greco
/s/ Bobby L. Hill
----------------------------- Director
Bobby L. Hill
/s/ Joseph F. Jeanette
----------------------------- Director
Joseph F. Jeanette
</TABLE>
II-4
<PAGE> 43
<TABLE>
<S> <C>
/s/ Richard J. Miller
----------------------------- President, Treasurer (Principal Financial Officer
Richard J. Miller and Principal Accounting Officer), and Director
/s/ Dean S. Petitpren
----------------------------- Director
Dean S. Petitpren
/s/ Carole L. Schwartz
----------------------------- Director
Carole L. Schwartz
</TABLE>
II-5
<PAGE> 44
COMMUNITY CENTRAL BANK CORPORATION
EXHIBIT INDEX
Registration Statement on Form SB-2
<TABLE>
<CAPTION>
Exhibit No. Description
----------- -----------
<S> <C>
1 Form of Underwriting Agreement
3.1 Articles of Incorporation of Community Central Bank Corporation
3.2 Bylaws of Community Central Bank Corporation
4.1 Specimen Stock Certificate of Community Central Bank Corporation
5 Opinion of Dickinson, Wright, Moon, Van Dusen & Freeman
10.1 1996 Employee Stock Option Plan
10.2 1996 Stock Option Plan for Nonemployee Directors
10.3 Lease Agreement
21 Subsidiaries of Community Central Bank Corporation
23.1 Consent of Dickinson, Wright, Moon, Van Dusen & Freeman (included in opinion filed as Exhibit 5)
23.2 Consent of Plante & Moran, LLP
27 Financial Data Schedule
</TABLE>
<PAGE> 1
EXHIBIT 1
825,000 SHARES
COMMUNITY CENTRAL BANK CORPORATION
COMMON STOCK
UNDERWRITING AGREEMENT
June __, 1996
Roney & Co.
As Representative of the several Underwriters
c/o Roney & Co.
One Griswold
Detroit, Michigan 48226
Dear Sirs:
Community Central Bank Corporation, a Michigan corporation (the
"COMPANY"), proposes to issue and sell 825,000 shares (the "FIRM SHARES") of
its authorized but unissued Common Stock (the "COMMON STOCK") to the several
underwriters named in Exhibit A attached to this Agreement (the "UNDERWRITERS")
for whom Roney & Co. is acting as Representative. In addition, the Company
proposes to grant to the Underwriters an option to purchase up to an additional
123,750 shares (the "OPTIONAL SHARES") to cover over-allotments. The Firm
Shares and the Optional Shares are called, collectively, the "SHARES."
1. SALE AND PURCHASE OF THE SHARES.
(a) On the basis of the representations, warranties and
agreements of the Company contained in, and subject to the terms
and conditions of, this Agreement, the Company agrees to issue and
sell to the Underwriters, and the Underwriters agree severally and
not jointly, to purchase, the Firm Shares set forth opposite their
respective names on Exhibit A at a purchase price of $9.20 per
Share, except as set forth in Section 1(b) below.
(b) On the basis of the representations, warranties and
agreements of the Company contained in, and subject to the terms
and conditions of, this Agreement, and pursuant to directions from
the Company, the Underwriters will offer to sell to each of the
persons listed on Exhibit B the number of Shares set forth
opposite their respective names on Exhibit B. To the extent such
persons offer to buy such Shares, the Underwriters agree to
purchase such Shares at a purchase price of $10.00 per Share. The
parties agree that the securities purchased
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and sold under this subparagraph shall constitute "issuer directed
securities" sold to the issuer's employees or directors or other
persons under the Free-Riding and Withholding Interpretation under
Article III of the Rules of Fair Practice of the National
Association of Securities Dealers, Inc. ("NASD").
(c) On the basis of the representations, warranties and
agreements of the Company contained in, and subject to the terms
and conditions of, this Agreement, the Company grants to the
Underwriters an option to purchase all or any part of the Optional
Shares at a price per Share of $9.20. The over-allotment option
may be exercised only to cover over-allotments in the sale of the
Firm Shares by the Underwriters and may be exercised in whole or
in part at any time or times on or before 12:00 noon, Detroit
time, on the day before the Firm Shares Closing Date (as defined
in Section 2 below), and only once at any time after that date and
within 30 days after the Effective Date (as defined in Section 3
below), in each case upon written or transmitted facsimile notice,
or verbal notice confirmed by transmitted facsimile, written or
telegraphic notice, by Roney & Co. to the Company no later than
12:00 noon, Detroit time, on the day before the Firm Shares
Closing Date or at least three but not more than five full
business days before the Optional Shares Closing Date (as defined
in Section 2 below), as the case may be, setting forth the number
of Optional Shares to be purchased and the time and date (if other
than the Firm Shares Closing Date) of such purchase. The number
of Optional Shares to be purchased by each Underwriter shall be
determined by multiplying the number of Optional Shares to be sold
by the Company pursuant to such notice of exercise by a fraction,
the numerator of which is the number of Firm Shares to be
purchased by such Underwriter as set forth opposite its name on
Exhibit A and the denominator of which is 825,000 (subject to such
adjustments to eliminate any fractional share purchases as Roney &
Co. in its discretion may make).
(d) Roney & Co. represents and warrants to the Company that
each Underwriter has authorized Roney & Co. to accept delivery of
its Shares and to make payment and to receipt therefor. Roney &
Co., individually and not as the Representative of the
Underwriters, may (but shall not be obligated to) make payment for
any Shares to be purchased by any Underwriter whose funds shall
not have been received by Roney & Co. by the Firm Shares Closing
Date (as defined in Section 2 below) or the Optional Shares
Closing Date (as defined in Section 2 below), as the case may be,
for the account for such Underwriter, but any such payments shall
not relieve such Underwriter from any of its obligations under
this Agreement. Roney & Co. represents and warrants that it has
been authorized by each of the other Underwriters to enter into
this Agreement on its behalf and to act for it in the manner
herein provided.
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2. DELIVERY AND PAYMENT. Delivery by the Company of the Firm
Shares to Roney & Co., for the respective accounts of the
Underwriters, and payment of the purchase price by certified or
official bank check payable in Detroit Clearing House (next day)
funds to the Company, shall take place at the offices of Roney &
Co., One Griswold, Detroit, Michigan 48226, at 10:00 a.m., Detroit
time, at such time and date, not later than the third (or, if the
Firm Shares are priced, as contemplated by Rule 15c6-1(c) under
the Securities Exchange Act of 1934, as amended (the "EXCHANGE
ACT"), after 4:30 p.m., Washington, D.C. time, the fourth) full
business day following the first date that any of the Shares are
released by the Underwriters for sale to the public, as Roney &
Co. shall designate by at least 48 hours prior notice to the
Company (the "FIRM SHARES CLOSING DATE"); provided, however, that
if the Prospectus (as defined in Section 4 below) is at any time
prior to the Firm Shares Closing Date recirculated to the public,
the Firm Shares Closing Date shall occur upon the later of the
third or fourth, as the case the may be, full business day
following the first date that any of the Shares are released by
the Underwriters for sale to the public or the date that is 48
hours after the date that the Prospectus has been so recirculated.
To the extent the option with respect to the Optional Shares is
exercised, delivery by the Company of the Optional Shares, and payment of
the purchase price by certified or official bank check payable in Detroit
Clearing House (next day) funds to the Company, shall take place at the
offices of Roney & Co. specified above at the time and on the date (which
may be the Firm Shares Closing Date) specified in the notice referred to
in Section l(c) (such time and date of delivery and payment are called
the "OPTIONAL SHARES CLOSING DATE"). The Firm Shares Closing Date and
the Optional Shares Closing Date are called, individually, a "CLOSING
DATE" and, collectively, the "CLOSING DATES."
Certificates representing the Firm Shares shall be registered in
such names and shall be in such denominations as Roney & Co. shall
request at least two full business days before the Firm Shares Closing
Date or, in the case of the Optional Shares, on the day of notice of
exercise of the option as described in Section l(c), and shall be made
available to Roney & Co. for checking and packaging, at such place as is
designated by Roney & Co., at least one full business day before the
Closing Date.
3. PUBLIC OFFERING. The Company understands that the Underwriters
propose to make a public offering of their respective portions of the
Shares, as set forth in and pursuant to the Prospectus, as soon after the
Effective Date as Roney & Co. deems advisable. The Company hereby
confirms that the Underwriters and dealers have been authorized to
distribute each preliminary prospectus and are authorized to distribute
the Prospectus (as from time to time amended or supplemented).
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4. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
The Company represents and warrants to the Underwriters and
agrees with the Underwriters as follows:
(a) The Company has carefully prepared in conformity with the
requirements of the Securities Act of 1933, as amended (the
"SECURITIES ACT") and the rules and regulations adopted by the
Securities and Exchange Commission (the "COMMISSION") thereunder
(the "RULES"), a registration statement on Form SB-2 (No.
33-_______), including a preliminary prospectus, and has filed
with the Commission the registration statement and such amendments
thereof as may have been required to the date of this Agreement.
Copies of such registration statement (including all amendments
thereof) and of the related preliminary prospectus have heretofore
been delivered by the Company to you. The term "PRELIMINARY
PROSPECTUS" means any preliminary prospectus (as defined in Rule
430 of the Rules) included at any time as a part of the
registration statement. The registration statement as amended
(including any supplemental registration statement under Rule
462(b) or any amendment under Rule 462(c) of the Rules) at the
time and on the date it becomes effective (the "EFFECTIVE DATE"),
including the prospectus, financial statements, schedules,
exhibits, and all other documents incorporated by reference
therein or filed as a part thereof, is called the "REGISTRATION
STATEMENT;" provided, however, that "REGISTRATION STATEMENT" shall
also include all Rule 430A Information (as defined below) deemed
to be included in such Registration Statement at the time such
Registration Statement becomes effective as provided by Rule 430A
of the Rules. The term "PROSPECTUS" means the Prospectus as filed
with the Commission pursuant to Rule 424(b) of the Rules or, if no
filing pursuant to Rule 424(b) of the Rules is required, means the
form of final prospectus included in the Registration Statement at
the time such Registration Statement becomes effective. The term
"RULE 430A INFORMATION" means information with respect to the
Shares and the offering thereof permitted to be omitted from the
Registration Statement when it becomes effective pursuant to Rule
430A of the Rules. Reference made herein to any preliminary
prospectus or to the Prospectus shall be deemed to refer to and
include any document attached as an exhibit thereto or
incorporated by reference therein, as of the date of such
preliminary prospectus or the Prospectus, as the case may be. The
Company will not file any amendment of the Registration Statement
or supplement to the Prospectus to which Roney & Co. shall
reasonably object in writing after being furnished with a copy
thereof.
(b) Each preliminary prospectus, at the time of filing
thereof, contained all material statements which were required to
be stated therein in accordance with the Securities Act and the
Rules, and conformed in all material respects with the
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requirements of the Securities Act and the Rules, and did not
include any untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under
which they were made, not misleading. The Commission has not
issued any order suspending or preventing the use of any
preliminary prospectus. When the Registration Statement shall
become effective, when the Prospectus is first filed pursuant to
Rule 424(b) of the Rules, when any post-effective amendment of the
Registration Statement shall become effective, when any supplement
to or pre-effective amendment of the Prospectus is filed with the
Commission and at each Closing Date, the Registration Statement
and the Prospectus (and any amendment thereof or supplement
thereto) will comply with the applicable provisions of the
Securities Act and the Exchange Act and the respective rules and
regulations of the Commission thereunder, and neither the
Registration Statement nor the Prospectus, nor any amendment
thereof or supplement thereto, will contain any untrue statement
of a material fact or will omit to state any material fact
required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they
were made, not misleading; provided, however, that the Company
makes no representation or warranty as to the information
contained in the Registration Statement or the Prospectus or any
amendment thereof or supplement thereto in reliance upon and in
conformity with information furnished in writing to the Company by
any of the Underwriters, specifically for use in connection with
the preparation thereof.
(c) All contracts and other documents required to be filed as
exhibits to the Registration Statement have been filed with the
Commission as exhibits to the Registration Statement.
(d) Plante & Moran, LLP, whose report is filed with the
Commission as part of the Registration Statement, are, and during
the periods covered by their report were, independent public
accountants as required by the Securities Act and the Rules.
(e) The Company and its subsidiary, Community Central Bank, a
Michigan banking corporation (the "BANK"), have been duly
organized and are validly existing as a corporation or banking
corporation, as applicable, in good standing under the laws of the
State of Michigan. Neither the Company nor the Bank have any
properties or conduct any business outside of the State of
Michigan which would require either of them to be qualified as a
foreign corporation or bank, as the case may be, in any
jurisdiction outside of Michigan. Neither the Company nor the
Bank has any directly or indirectly held subsidiary other than the
Bank. The Company has all power, authority, authorizations,
approvals, consents,
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orders, licenses, certificates and permits needed to enter into,
deliver and perform this Agreement and to issue and sell the
Shares.
(f) The application for permission to organize the Bank (the
"FIB APPLICATION") was approved by the Commissioner of the
Financial Institutions Bureau for the State of Michigan (the
"COMMISSIONER") on May 9, 1996, pursuant to Order No.
BT-0612-96-02, subject to certain conditions specified in the
Order and supplemental correspondence from the Commissioner dated
the same date. The Order and supplemental correspondence from
the Commissioner are collectively referred to in this Agreement as
the "FIB ORDER." All conditions contained in the FIB Order have
been satisfied except those conditions relating to paid-in capital
of the Bank, approval of the Company as a bank holding company,
maintenance of capital ratios and valuation reserves, and the
Certificate of Paid-In Capital and Surplus. The application to
the Federal Deposit Insurance Corporation (the "FDIC") to become
an insured depository institution under the provisions of the
Federal Deposit Insurance Act (the "FDIC APPLICATION") was
approved by the FDIC on May __, 1996 pursuant to Order No.
________ (the "FDIC ORDER"), subject to certain conditions
specified in the Order. All conditions contained in the FDIC
Order have been satisfied except those conditions relating to
________. The Company's application to become a bank holding
company and acquire all issued capital stock of the Bank (the
"BANK HOLDING COMPANY APPLICATION") under the Bank Holding Company
Act of 1956, as amended, was approved on June ____, 1996 pursuant
to Order No. _____ (the "FEDERAL RESERVE BOARD APPROVAL"), subject
to certain conditions specified in the Federal Reserve Board
Approval. All conditions in the Federal Reserve Board Approval
have been satisfied, except those conditions relating to
_________. Each of the FIB Application, FDIC Application, and
Bank Holding Company Application, at the time of their respective
filings, contained all required information and such information
was complete and accurate in all respects. Other than the
remaining conditions to be fulfilled under the FIB Order, FDIC
Order and the Federal Reserve Board Approval specified above, no
authorization, approval, consent, order, license, certificate or
permit of and from any federal, state, or local governmental or
regulatory official, body, or tribunal, is required for the
Company or the Bank to commence and conduct their respective
businesses and own their respective properties as described in the
Prospectus, except such authorizations, approvals, consents,
orders, licenses, certificates, or permits as are not material to
the commencement or conduct of their respective businesses or to
the ownership of their respective properties.
(g) The financial statements of the Company and any related
notes thereto, included in the Registration Statement and the
Prospectus, present fairly the financial position of the Company
as of the date of such financial statements
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and for the period covered thereby. Such statements and any
related notes have been prepared in accordance with generally
accepted accounting principals applied on a consistent basis and
certified by the independent accountants named in subsection 4(d)
above. No other financial statements are required to be included
in the Prospectus or the Registration Statement.
(h) The Company owns adequate and enforceable rights to use,
any patents, patent applications, trademarks, trademark
applications, service marks, copyrights, copyright applications
and other similar rights (collectively, "INTANGIBLES") necessary
for the conduct of the material aspects of its business as
described in the Prospectus and the Company has not infringed, is
infringing, or has received any notice of infringement of, any
Intangible of any other person.
(i) The Company has a valid and enforceable leasehold
interest in the real property located at 100 North Main Street,
Mount Clemens, Michigan, which is as described in the Prospectus,
and is free and clear of all liens, encumbrances, claims, security
interests and defects.
(j) There are no litigation or governmental or other
proceedings or investigations pending before any court or before
or by any public body or board or threatened (or any reasonable
basis therefor) against, or involving the Company or the Bank or
their businesses.
(k) The Company and Bank have filed all federal, state, and
local tax returns required to be filed by them and paid all taxes
shown due on such returns as well as all other material taxes,
assessments and governmental charges which have become due; no
material deficiency with respect to any such return has been
assessed or proposed.
(l) Subsequent to the respective dates as of which
information is given in the Registration Statement and the
Prospectus, there has not been any material adverse change in the
condition (financial or other), business, properties or prospects
of the Company.
(m) No default exists, and no event has occurred which with
notice or lapse of time, or both, would constitute a default, in
the due performance and observance of any material term, covenant
or condition, by the Company, the Bank or, to the best of the
Company's knowledge, any other party, of any lease, indenture,
mortgage, note or any other agreement or instrument to which the
Company or the Bank is a party or by which either of them or
either of their businesses may be bound or affected.
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(n) Neither the Company nor the Bank is in violation of any
term or provision of the articles of incorporation or bylaws of
the Company or the Bank. Neither the Company nor the Bank is in
violation of, nor is either of them required to take any action to
avoid any material violation of, any franchise, license, permit,
judgment, decree, order, statute, rule or regulation.
(o) Neither the execution, delivery or performance of this
Agreement by the Company nor the consummation of the transactions
contemplated hereby (including, without limitation, the issuance
and sale by the Company of the Shares) will give rise to a right
to terminate or accelerate the due date of any payment due under,
or conflict with or result in the breach of any term or provision
of, or constitute a default (or an event which with notice or
lapse of time, or both, would constitute a default) under, or
require any consent under, or result in the execution or
imposition of any lien, charge or encumbrance upon any properties
or assets of the Company or the Bank pursuant to the terms of, any
lease, indenture, mortgage, note or other agreement or instrument
to which the Company or the Bank is a party or by which either of
them or either of their businesses may be bound or affected, or
any franchise, license, permit, judgment, decree, order, statute,
rule or regulation or violate any provision of the articles of
incorporation or bylaws of the Company or the Bank, except those
which are immaterial in amount or effect.
(p) The Company has authorized capital stock as set forth in
the Prospectus. One share of Common Stock of the Company is
issued and outstanding, which will be redeemed at or promptly
following the Closing if permitted by applicable law. No shares
of preferred stock are issued and outstanding. The issuance, sale
and delivery of the Shares have been duly authorized by all
necessary corporate action by the Company and, when issued, sold
and delivered against payment therefor pursuant to this Agreement,
will be duly and validly issued, fully paid and nonassessable and
none of them will have been issued in violation of any preemptive
or other right. Upon issuance, all of the capital stock of the
Bank will be duly authorized and validly issued, fully paid and
nonassessable and will be owned by the Company, free and clear of
all liens, encumbrances and security interests (subject to the
provisions of Section 201 of the Michigan Banking Code of 1969).
There is no outstanding option, warrant or other right calling for
the issuance of, and no commitment, plan or arrangement to issue,
any share of stock of the Company or the Bank or any security
convertible into or exchangeable for stock of the Company or the
Bank, except for stock options described in the Registration
Statement (the "STOCK OPTIONS") under the 1996 Employee Stock
Option Plan and the 1996 Stock Option Plan for Nonemployee
Directors (collectively, the "STOCK OPTION PLANS"). The Common
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Stock, the Shares and the Stock Options conform to all statements
in relation thereto contained in the Registration Statement and
the Prospectus.
(q) Subsequent to the respective dates as of which
information is given in the Registration Statement and the
Prospectus, neither the Company nor the Bank has (1) issued any
securities or incurred any material liability or obligation,
direct or contingent, (2) entered into any material transaction,
or (3) declared or paid any dividend or made any distribution on
any of their stock, except liabilities, obligations, and
transactions reasonably expected based on the disclosures in the
Prospectus, and redemption of one share of Common Stock for $10 at
or promptly following the Closing if permitted by applicable law.
(r) This Agreement has been duly and validly authorized,
executed and delivered by the Company and is the legal, valid and
binding agreement and obligation of the Company.
(s) The Commission has not issued any order preventing or
suspending the use of any preliminary prospectus.
(t) Neither the Company, nor the Bank, nor, to the Company's
knowledge any director, officer, agent, employee or other person
associated with the Company or the Bank, acting on behalf of the
Company or the Bank, has used any corporate funds for any unlawful
contribution, gift, entertainment or other unlawful expense
relating to political activity; made any direct or indirect
unlawful payment to any foreign or domestic government official or
employee from corporate funds; violated or is in violation of any
provision of the Foreign Corrupt Practices Act of 1977; or made
any bribe, rebate, payoff, influence payment, kickback or other
unlawful payment.
(u) Neither the Company nor the Bank nor any affiliate of
either of them has taken, and they will not take, directly or
indirectly, any action designed to cause or result in, or which
has constituted or which might reasonably be expected to
constitute, the stabilization or manipulation of the price of the
shares of the Common Stock in order to facilitate the sale or
resale of any of the Shares.
(v) No transaction has occurred between or among the Company
or the Bank and any of their officers, directors, organizers or
the Company's shareholder or any affiliate or affiliates of any
such officer, director, organizer, or shareholder, that is
required to be described in and is not described in the
Prospectus.
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(w) The Company is not and will not after the offering be an
"investment company", or a company "controlled" by an "investment
company", within the meaning of the Investment Company Act of 1940, as
amended.
(x) The Company has obtained from all of its executive
officers and directors their written agreement that (i) for a
period of 180 days from the date of the Effective Date, they will
not sell, contract to sell, or grant any option for the sale of or
otherwise dispose of, directly or indirectly, any shares of Common
Stock of the Company (or any securities convertible into or
exercisable for such shares of Common Stock), except for (1) the
exercise of Stock Options under the Stock Option Plans or (2)
gifts of Common Stock (or other securities) to a donee or donees
who agree in writing with Roney & Co. to be bound by this clause,
and (ii) for a period of three months from the date of the
Effective Date, they will not sell, transfer, assign, pledge, or
hypothecate any shares of Common Stock acquired under Paragraph
1(b), above.
5. CONDITIONS OF THE UNDERWRITERS' OBLIGATIONS. The obligation of the
Underwriters to purchase the Shares shall be subject to the accuracy of the
representations and warranties of the Company in this Agreement as of the date
of this Agreement and as of the Firm Shares Closing Date or Optional Shares
Closing Date, as the case may be, to the accuracy of the statements of Company
officers made pursuant to the provisions of this Agreement, to the performance
by the Company of its obligations under this Agreement, and to the following
additional terms and conditions:
(a) The Registration Statement shall have become effective
not later than 5:00 P.M., Detroit time, on the date of this
Agreement or on such later date and time as shall be consented to
in writing by Roney & Co.; if the filing of the Prospectus, or any
supplement thereto, is required pursuant to Rule 424(b) of the
Rules, the Prospectus shall have been filed in the manner and
within the time period required by Rule 424(b) of the Rules; at
each Closing Date, if any, no stop order shall have been issued or
proceedings therefor initiated or threatened by the Commission;
and any request of the Commission for inclusion of additional
information in the Registration Statement, or otherwise, shall
have been complied with to the reasonable satisfaction of Roney &
Co.
(b) At each Closing Date, Roney & Co., as Representative of
the Underwriters, shall have received the favorable opinion of
Dickinson, Wright, Moon, Van Dusen & Freeman, counsel for the
Company, dated the Firm Shares Closing Date or the Optional Shares
Closing Date, as the case may be, addressed to the Underwriters
and in form and scope reasonably satisfactory to counsel for Roney
& Co. to the effect that:
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(i) Each of the Company and the Bank (A) is a corporation or
banking corporation, as applicable, existing and in good standing
under the laws of the State of Michigan and (B) is not required to
be qualified to do business in any jurisdiction outside Michigan.
(ii) Each of the Company and the Bank has full corporate power and
authority and all material authorizations, approvals, orders, licenses,
certificates and permits of and from all governmental bank regulatory
officials and bodies and, to the best of such counsel's knowledge, after
due inquiry, all other governmental regulatory officials and bodies,
necessary to own its properties and to commence and conduct its business
as described in the Registration Statement and Prospectus, including,
without limitation, the FIB Order, the FDIC Order and the Federal Reserve
Board Approval, subject to the fulfillment of the conditions with respect
to the FIB Order, the FDIC Order and the Federal Reserve Board Approval
all as described in Section 4(f) above, except for such authorizations,
approvals, orders, licenses, certificates and permits as are not material
to the ownership of their properties or commencement or conduct of their
businesses;
(iii) The Company has authorized capital stock as set forth in the
Prospectus and, prior to the Closing, had one Share of Common Stock
issued and outstanding; the Shares have been duly and validly authorized
and issued and are and will be fully paid and nonassessable and are not
and will not be subject to preemptive rights; the Shares and the other
capital stock and Stock Options of the Company conform in all material
respects to the descriptions thereof contained in the Registration
Statement and the Prospectus;
(iv) To such counsel's knowledge, after due inquiry, the Company
has no directly or indirectly held subsidiary other than the Bank;
(v) When issued, the Company will be the registered
holder of all of the outstanding capital stock of the Bank, and all
such shares of stock so held are validly issued and outstanding, fully
paid and nonassessable and are owned free and clear of any liens,
encumbrances or other claims or restrictions whatsoever (subject to the
provisions of Section 201 of the Michigan Banking Code of 1969);
(vi) the certificates evidencing the Shares are in the form
approved by the Board of Directors of the Company, comply with the
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bylaws and the articles of incorporation of the Company, comply as to
form and in all other material respects with applicable legal
requirements;
(vii) this Agreement has been duly and validly authorized, executed
and delivered by the Company, and is the legal, valid and binding
agreement and obligation of the Company enforceable in accordance with
its terms, except (a) as enforcement thereof may be limited by
bankruptcy, insolvency, reorganization, moratorium or other laws relating
to or affecting enforcement of creditors' rights or by general equity
principles or (b), with respect to provisions relating to indemnification
and contribution, to the extent they are held by the exercise of judicial
discretion to be void as against public policy;
(viii) the Company is conveying to the respective Underwriters good
and valid title to their respective Shares, free and clear of any
liens, encumbrances, security interests, restrictions and claims of which
such counsel has knowledge;
(ix) to the best of such counsel's knowledge, after due
inquiry, there are (A) no contracts or other documents which are
required to be filed as exhibits to the Registration Statement other than
those filed as exhibits thereto, (B) no legal or governmental proceedings
pending or threatened against, or involving the business of, the Company
or the Bank, and (C) no statutes or regulations applicable to the Company
or the Bank, or certificates, permits, grants or other consents,
approvals, orders, licenses or authorizations from regulatory officials
or bodies, which are required to be obtained or maintained by the Company
or the Bank and which are of a character required to be disclosed in the
Registration Statement and Prospectus and which have not been so
disclosed and properly described therein;
(x) the statements in the Registration Statement and the
Prospectus, insofar as they are descriptions of corporate documents,
contracts, agreements or other documents, or descriptions of laws,
regulations, regulatory requirements, or regulatory proceedings, or refer
to compliance with law or to statements of law or legal conclusions, are
correct in all material respects and, to the best of such counsel's
knowledge, after due inquiry, do not omit to state a material fact
required to be stated therein or necessary to make the statements in the
Registration Statement and Prospectus, in light of the circumstances
under which they were made, not misleading;
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(xi) to the best of such counsel's knowledge, after due
inquiry, the execution, delivery and performance of this Agreement, the
consummation of the transactions herein contemplated and the compliance
with the terms and provisions hereof will not give rise to a right to
terminate or accelerate the due date of any payment due under, or
conflict with or result in a breach of any of the terms or provisions of,
or constitute a default (or an event which, with notice or lapse of time,
or both, would constitute a default) under, or require any consent under,
or result in the execution or imposition of any lien, charge or
encumbrance upon any properties or assets of the Company or the Bank
pursuant to the terms of, any lease, indenture, mortgage, note or other
agreement or instrument to which the Company or the Bank is a party or by
which either of them or either of their properties or businesses is or
may be bound or affected, nor will such action result in any violation of
the provisions of the articles of incorporation or bylaws of the Company
or the Bank or any statute or any order, rule, or regulation applicable
to the Company or the Bank of any court of any federal, state, local or
other regulatory authority or other governmental body, the effect of
which, in any such case, would be expected to be materially adverse to
the Company or the Bank;
(xii) to the best of such counsel's knowledge, after due inquiry,
no consent, approval, authorization or order of any court or
governmental agency or body, domestic or foreign, is required to be
obtained by the Company in connection with the execution and delivery of
this Agreement or the consummation of the transactions contemplated by
this Agreement, except those which have been obtained;
(xiii) to the best of such counsel's knowledge, after due inquiry,
(A) neither the Company nor the Bank is in breach of, or in default (or
an event has occurred which, with notice or lapse of time, or both, would
constitute a default) under, any lease, indenture, mortgage, note, or
other agreement or instrument to which the Company or the Bank, as the
case may be, is a party or by which either of them is or may be bound or
affected; or (B) neither the Company nor the Bank is in violation of any
term or provision of either of their articles of incorporation or bylaws,
or of any franchise, license, grant, permit, judgment, decree, order,
statute, rule or regulation; and (C) neither the Company nor the Bank has
received any notice of conflict with the asserted rights of others in
respect of Intangibles necessary for the commencement or conduct of its
business, the effect of which, in any such case, would be expected to be
materially adverse to the Company or the Bank;
13
<PAGE> 14
(xiv) the Registration Statement and the Prospectus and any
amendments or supplements thereto (other than the financial statements
as to which no opinion need be rendered) comply as to form with the
requirements of the Securities Act and the Rules in all material
respects;
(xv) nothing has come to the attention of such counsel that would
lead them to believe that the Registration Statement or Prospectus, as
amended or supplemented, if amended or supplemented, contains any untrue
statement of a material fact or omits a material fact required to be
stated therein or necessary to make the statements therein not
misleading; and
(xvi) the Registration Statement is effective under the Securities
Act, and, to the best of such counsel's knowledge, after due inquiry,
no proceedings for a stop order are pending or threatened under the
Securities Act.
In rendering the foregoing opinion, such counsel may rely upon
certificates of public officials (as to matters of fact and law) and
officers of the Company (as to matters of fact), and include customary
qualifications in its opinion as are acceptable to Roney & Co. Copies of
all such certificates shall be furnished to counsel to Roney & Co. on the
Closing Date.
(c) On or prior to each Closing Date, Roney & Co., as Representative of
the Underwriters, shall have been furnished such documents, certificates and
opinions as they may reasonably require for the purpose of enabling them to
review the matters referred to in subsection (b) of this Section 5, and in
order to evidence the accuracy, completeness or satisfaction of the
representations, warranties or conditions herein contained.
(d) Prior to each Closing Date, (i) there shall have been no
material adverse change in the condition or prospects, financial or
otherwise, of the Company or the Bank; (ii) there shall have been no
material transaction, not in the ordinary course of business, entered into
by the Company or the Bank except as set forth in the Registration Statement
and Prospectus, other than transactions referred to or contemplated therein
or to which Roney & Co. has given its written consent; (iii) neither the
Company nor the Bank shall be in default (nor shall an event have occurred
which, with notice or lapse of time, or both, would constitute a default)
under any provision of any material agreement, understanding or instrument
relating to any outstanding indebtedness that is material in amount; (iv) no
action, suit or proceeding, at law or in equity, shall be pending or
14
<PAGE> 15
threatened against the Company or the Bank before or by any court or
Federal, state or other commission, board or other administrative agency
having jurisdiction over the Company or the Bank, as the case may be, which
is expected to have a material adverse effect on the Company or the Bank;
and (v) no stop order shall have been issued under the Securities Act and no
proceedings therefor shall have been initiated or be threatened by the
Commission.
(e) At each Closing Date, Roney & Co., as Representative of
the Underwriters, shall have received a certificate signed by the
Chairman of the Board and the President of the Company dated the Firm Shares
Closing Date or Optional Shares Closing Date, as the case may be, to the
effect that the conditions set forth in subsection (d) above have been
satisfied and as to the accuracy, as of the Firm Shares Closing Date or the
Optional Shares Closing Date, as the case may be, of the representations and
warranties of the Company set forth in Section 4 hereof.
(f) At or prior to each Closing Date, Roney & Co., as
Representative of the Underwriters, shall have received a "blue sky"
memorandum of Dickinson, Wright, Moon, Van Dusen & Freeman, counsel for the
Company, addressed to Roney & Co., as Representative of the Underwriters and
in form and scope reasonably satisfactory to Roney & Co. concerning
compliance with the blue sky or securities laws of the states listed in
Exhibit C attached to this Agreement.
(g) All proceedings taken in connection with the sale of the
Shares as herein contemplated shall be reasonably satisfactory in form
and substance to Roney & Co. and to counsel for Roney & Co., and Roney & Co.
shall have received from counsel for Roney & Co. a favorable opinion, dated
as of each Closing Date, with respect to such of the matters set forth under
Subsection (b) of this Section 5, and with respect to such other related
matters, as Roney & Co. may reasonably require.
(h) There shall have been duly tendered to Roney & Co., as
Representative of the Underwriters, certificates representing all the
Shares agreed to be sold by the Company on the Firm Shares Closing Date or
the Optional Shares Closing Date, as the case may be.
(i) No order suspending the sale of the Shares prior to each
Closing Date, in any jurisdiction listed in Exhibit C, shall have been
issued on the Firm Shares Closing Date or the Optional Shares Closing Date,
as the case may be, and no proceedings for that purpose shall have been
instituted or, to Roney & Co.'s knowledge or that of the Company, shall be
contemplated.
15
<PAGE> 16
(j) The NASD, upon review of the terms of the public offering of the
Shares, shall not have objected to the Underwriters' participation in the
same.
If any condition to the Underwriters' obligations hereunder to be
fulfilled prior to or at the Firm Shares Closing Date or the Optional Shares
Closing Date, as the case may be, is not so fulfilled, Roney & Co., as
Representative of the Underwriters, may terminate this Agreement pursuant to
Section 9(c) hereof or, if Roney & Co., as Representative of the Underwriters,
so elects, waive any such conditions which have not been fulfilled or extend
the time of their fulfillment.
6. COVENANTS.
The Company covenants and agrees that it will:
(a) Use its best efforts to cause the Registration Statement
to become effective and will notify Roney & Co. immediately, and
confirm the notice in writing, (i) when the Registration Statement and any
post-effective amendment thereto becomes effective, (ii) of the issuance by
the Commission of any stop order or of the initiation, or the threatening,
of any proceedings for that purpose and (iii) of the receipt of any comments
from the Commission. The Company will make every reasonable effort to
prevent the issuance of a stop order, and, if the Commission shall enter a
stop order at any time, the Company will make every reasonable effort to
obtain the lifting of such order at the earliest possible moment.
(b) During the time when a prospectus is required to be
delivered under the Securities Act, comply so far as it is able with
all requirements imposed upon it by the Securities Act, as now and hereafter
amended, and by the Rules, as from time to time in force, so far as
necessary to permit the continuance of sales of or dealings in the Shares.
If at any time when a prospectus relating to the Shares is required to be
delivered under the Securities Act any event shall have occurred as a result
of which, in the reasonable opinion of counsel for the Company or counsel
for Roney & Co., the Registration Statement or Prospectus as then amended or
supplemented includes an untrue statement of a material fact or omits to
state any material fact required to be stated therein or necessary to make
the statements therein, in the light of the circumstances under which they
were made, not misleading, or if it is necessary at any time to amend or
supplement the Registration Statement or Prospectus to comply with the
Securities Act, the Company will notify Roney & Co. promptly and prepare and
file with the Commission an appropriate amendment or supplement in form
satisfactory to Roney & Co. The cost of preparing, filing and delivering
copies of such amendment or supplement shall be paid by the Company.
16
<PAGE> 17
(c) Deliver to the Underwriters such number of copies of each
preliminary prospectus as may reasonably be requested by Roney & Co.,
as Representative of the Underwriters, and, as soon as the Registration
Statement, or any amendment or supplement thereto, becomes effective,
deliver to each Underwriter three signed copies of the Registration
Statement, including exhibits, and all post-effective amendments thereto and
deliver to the Underwriters such number of copies of the Prospectus, the
Registration Statement and supplements and amendments thereto, if any,
without exhibits, as Roney & Co., as Representative of the Underwriters, may
reasonably request.
(d) Endeavor in good faith, in cooperation with Roney & Co.
and its counsel, at or prior to the time the Registration Statement
becomes effective, to qualify the Shares for offering and sale under the
securities laws relating to the offering or sale of the Shares of the states
listed in Exhibit C. In each jurisdiction where such qualification shall be
effected, the Company will, unless Roney & Co. agrees that such action is
not at the time necessary or advisable, file and make such statements or
reports at such times as are or may reasonably be required by the laws of
such jurisdiction. The Company will advise you promptly of the suspension
of the qualification of the Shares for offering, sale or trading in any
jurisdiction, or any initiation or threat of any proceeding for such
purpose, and in the event of the issuance of any order suspending such
qualification, the Company, with your cooperation, will use all reasonable
efforts to obtain the withdrawal thereof.
(e) Furnish its security holders as soon as practicable an
earnings statement (which need not be certified by independent
certified public accountants unless required by the Securities Act or the
Rules) covering a period of at least twelve months beginning after the
effective date of the Registration Statement, which shall satisfy the
provisions of Section 11(a) of the Securities Act and the Rules thereunder.
(f) For a period of five years from the Effective Date,
furnish to its shareholders annual audited and quarterly unaudited
consolidated financial statements with respect to the Company including
balance sheets and income statements.
(g) For a period of five years from the Effective Date,
furnish to Roney & Co. and, upon request of Roney & Co., to each of the
other Underwriters, the following:
17
<PAGE> 18
(i) at the time they have been sent to shareholders of the Company or
filed with the Commission three copies of each annual, quarterly,
interim, or current financial and other report or communication sent by the
Company to its shareholders or filed with the Commission;
(ii) as soon as practicable, three copies of every press release and
every material news item and article in respect of the Company or the
affairs of the Company which was released by the Company;
(iii) all other information reasonably requested by Roney & Co. with
respect to the Company to comply with Rule 15c2-11 of the Rules and
Section 4 of Schedule H of the NASD By-Laws; and
(iv) such additional documents and information with respect to the
Company and its affairs as Roney & Co. may from time to time reasonably
request.
(h) Acquire all of the Bank's outstanding capital stock, free and clear
of all liens, encumbrances, or other claims or restrictions whatsoever, for not
less than $7,500,000 from the proceeds of the offering and, in all other
material respects, apply the net proceeds from the offering in the manner set
forth under "Use of Proceeds" in the Prospectus.
(i) Not file any amendment or supplement to the Registration Statement
or Prospectus after the effective date of the Registration Statement to which
Roney & Co. shall reasonably object in writing after being furnished a copy
thereof.
(j) Timely file with the Commission reports on Form SR (if applicable)
containing the information required by that Form in accordance with the
provisions of Rule 463 of the Regulation under the Act.
(k) Comply with all registration, filing and reporting requirements of
the Securities Act or the Exchange Act, which may from time to time be
applicable to the Company.
(l) Cause the proper submission of the Certificate of Paid In Capital
and Surplus, give advance written notice to the Commissioner of the Bank's
opening date, and cause the Bank to maintain capital and the valuation reserve
in accordance with the FIB Order; [FDIC & FED CONDITIONS]; and in all other
respects comply with the requirements of, and satisfy the conditions of, the
FIB
18
<PAGE> 19
Order, the FDIC Order and the Federal Reserve Board Approval as soon as
practicable.
(m) Pay, or reimburse if paid by the Underwriters, whether or not the
transactions contemplated hereby are consummated or this Agreement is
terminated, all costs and expenses incident to the performance of the
obligations of the Company under this Agreement, including those relating to
(1) the preparation, printing, filing and delivery of the Registration
Statement, including all exhibits thereto, each preliminary prospectus, the
Prospectus, all amendments of and supplements to the Registration Statement and
the Prospectus, and the printing of the Underwriting Agreement and related
agreements including, without limitation, the Dealer Agreement and Agreement
Among Underwriters, (2) the issuance of the Shares and the preparation and
delivery of certificates for the Shares to the Underwriters, (3) the
registration or qualification of the Shares for offer and sale under the
securities or "blue sky" laws of the various jurisdictions referred to in
Exhibit C, including the fees and disbursements of counsel in connection with
such registration and qualification and the preparation and printing of
preliminary, supplemental, and final blue sky memoranda, (4) the furnishing
(including costs of shipping and mailing) to the Underwriters of copies of each
preliminary prospectus, the Prospectus and all amendments of or supplements to
the Prospectus, and of the several documents required by this Section to be so
furnished, (5) the filing requirements and fees of the NASD in connection with
its review of the terms of the public offering and the underwriting, (6) the
furnishing (including costs of shipping and mailing) of copies of all reports
and information required by Section 6(g), (7) all transfer taxes, if any, with
respect to the sale and delivery of the Shares by the Company to the
Underwriters, (8) the inclusion of the Shares on the OTC Bulletin Board; and
(9) the Underwriters' out-of-pocket expenses, including without limitation,
road show expenses and legal fees of counsel to Roney & Co. (such out-of-pocket
expenses and legal fees payable by the Company shall not exceed $20,000). Upon
a successful completion of the offering, the Underwriters will credit the
out-of-pocket and legal fee reimbursement described in Section 6(m)(9) against
the underwriting discount.
(n) Not, without the prior written consent of Roney & Co., sell,
contract to sell or grant any option for the sale of or otherwise dispose of,
directly or indirectly, or register with the Commission, any shares of Common
Stock of the Company (or any securities convertible into or exercisable for
such shares of Common Stock) within 180 days after the date of the Prospectus,
except as provided in this Agreement and except for grants and exercises of
Stock Options under the Stock Option Plans as described in the Prospectus.
19
<PAGE> 20
(o) Maintain the Exchange Act registration of the Common Stock for not
less than three fiscal years from the Effective Date, unless the Company's
shareholders direct the Company to deregister the Common Stock.
(p) Use its best efforts to cause itself and the Bank to commence their
businesses as described in the Prospectus not later than December 31, 1996.
7. INDEMNIFICATION.
(a) The Company agrees to indemnify and hold harmless each Underwriter
and each person, if any, who controls each Underwriter within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act against any
and all losses, claims, damages and liabilities, joint or several (including
any reasonable investigation, legal and other expenses incurred in connection
with, and any amount paid in settlement of, any action, suit or proceeding or
any claim asserted), to which they, may become subject under the Securities
Act, the Exchange Act or other Federal or state statutory law or regulation, at
common law or otherwise, insofar as such losses, claims, damages or liabilities
arise out of or are based upon any untrue statement or alleged untrue statement
of a material fact contained in any preliminary prospectus, the Registration
Statement or the Prospectus or any amendment thereof or supplement thereto, or
arise out of or are based upon the omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading; provided, however, that such indemnity shall
not inure to the benefit of the Underwriters (or any person controlling the
Underwriters) on account of any losses, claims, damages or liabilities arising
from the sale of the Shares in the public offering to any person by the
Underwriters if such untrue statement or omission or alleged untrue statement
or omission was made in such preliminary prospectus, the Registration Statement
or the Prospectus, or such amendment or supplement, in reliance upon and in
conformity with information furnished in writing to the Company by or on behalf
of the Underwriters specifically for use therein. The Company shall not be
liable hereunder to an Underwriter (or any controlling person thereof) to the
extent that any loss, claim, damage or other liability incurred by the
Underwriter arises from the Underwriter's fraudulent act or omission.
(b) Each Underwriter severally agrees to indemnify and hold harmless
the Company, each person, if any, who controls the Company within the meaning
of Section 15 of the Securities Act or Section 20 of the Exchange Act, each
director of the Company and each officer of the Company who signs the
Registration Statement, to the same extent as the foregoing indemnity from the
20
<PAGE> 21
Company to the Underwriters, but only insofar as such losses, claims,
damages or liabilities arise out of or are based upon any untrue statement or
omission or alleged untrue statement or omission which was made in any
preliminary prospectus, the Registration Statement or the Prospectus, or any
amendment thereof or supplement thereto, in reliance upon and in conformity
with information furnished in writing to the Company by any of the Underwriters
specifically for use therein; provided, however, that the obligation of each
Underwriter to indemnify the Company (including any controlling person,
director or officer thereof) hereunder shall be limited to the total price at
which the Shares purchased by that Underwriter hereunder were offered to the
public. The Underwriters shall not be liable hereunder to the Company
(including any controlling person, director or officer thereof) to the extent
that any loss, claim, damage or other liability incurred by the Company arises
from a fraudulent act or omission by the Company.
(c) Any party that proposes to assert the right to be indemnified under
this Section will, promptly after receipt of notice of commencement of any
action, suit or proceeding against such party in respect of which a claim is to
be made against an indemnifying party or parties under this Section, notify
each such indemnifying party of the commencement of such action, suit or
proceeding, enclosing a copy of all papers served, but the omission so to
notify such indemnifying party of any such action, suit or proceeding shall not
relieve it from any liability that it may have to any indemnified party
otherwise than under this Section. In case any such action, suit or proceeding
shall be brought against any indemnified party and it shall notify the
indemnifying party of the commencement thereof, the indemnifying party shall be
entitled to participate in, and, to the extent that it shall wish, jointly with
any other indemnifying party similarly notified, to assume the defense thereof,
with counsel reasonably satisfactory to such indemnified party, and after
notice from the indemnifying party to such indemnified party of its election so
to assume the defense thereof and the approval by the indemnified party of such
counsel, the indemnifying party shall not be liable to such indemnified party
for any legal or other expenses, except as provided below and except for the
reasonable costs of investigation subsequently incurred by such indemnified
party in connection with the defense thereof. The indemnified party shall have
the right to employ its counsel in any such action, but the fees and expenses
of such counsel shall be at the expense of such indemnified party unless (1)
the employment of counsel by such indemnified party has been authorized in
writing by the indemnifying parties, (2) the indemnified party shall have
reasonably concluded that, because of the existence of different or additional
defenses available to the indemnified party or of other reasons, there may be a
conflict of interest between the indemnifying parties and the indemnified party
in the conduct
21
<PAGE> 22
of the defense of such action (in which case the indemnifying
parties shall not have the right to direct the defense of such
action on behalf of the indemnified party) or that, under the
circumstances, it is otherwise appropriate, or (3) the
indemnifying parties shall not have employed counsel to assume the
defense of such action within a reasonable time after notice of
the commencement thereof, in each of which cases the fees and
expenses of counsel shall be at the expense of the indemnifying
parties. An indemnifying party shall not be liable for any
settlement of any action, suit, proceeding or claims effected
without its written consent.
8. CONTRIBUTION. In order to provide for just and equitable contribution
in circumstances in which the indemnification provided for in Section 7(a) or
7(b) is due in accordance with its terms but for any reason is held to be
unavailable, the Company and the Underwriters shall contribute to the aggregate
losses, claims, damages and liabilities (including any investigation, legal and
other expenses reasonably incurred in connection with, and any amount paid in
settlement of, any action, suit or proceeding or any claims asserted, but after
deducting any contribution received from other persons), to which the Company
and the Underwriters may be subject, in such proportion so that the
Underwriters are responsible for that portion represented by the percentage
that the underwriting discount appearing on the front cover page of the
Prospectus bears to the public offering price appearing thereon and the Company
is responsible for the balance; provided, however, that (a) in no case shall
the Underwriters be responsible for any amount in excess of the underwriting
discount applicable to the Shares purchased by the Underwriters hereunder and
(b) no person found guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Securities Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation. For
purposes of this Section, each person, if any, who controls the Underwriters
within the meaning of the Securities Act or the Exchange Act shall have the
same rights to contribution as the Underwriters, and each person, if any, who
controls the Company within the meaning of the Securities Act or the Exchange
Act, each officer of the Company who shall have signed the Registration
Statement and each director of the Company shall have the same rights to
contribution as the Company, subject in each case to clauses (a) and (b) of
this Section. Any party entitled to contribution will, promptly after receipt
of notice of commencement of any action, suit or proceeding against such party
in respect of which a claim for contribution may be made against another party
or parties under this Section, notify such party or parties from whom
contribution may be sought, but the omission so to notify such party or parties
from whom contribution may be sought shall not relieve the party or parties
from whom contribution may be sought from any other obligation it or they may
have hereunder or otherwise than under this Section. No party shall be liable
for contribution with respect to any action, suit, proceeding or claim settled
without its written consent.
In any proceeding relating to the Registration Statement, any
preliminary prospectus, the Prospectus or any supplement thereto or amendment
thereof, each party against whom contribution may be sought under this Section
8 hereby consents to the jurisdiction of any court in Michigan, agrees that
process issuing from such court may be served upon him or it by
22
<PAGE> 23
any other contributing party and consents to the service of such process and
agrees that any other contributing party may join him or it as an additional
defendant in any such proceeding in which such other contributing party is a
party.
9. TERMINATION. This Agreement may be terminated by Roney & Co. by
notifying the Company at any time:
(a) before the earliest of (1) 11:00 a.m., Detroit time, on
the business day following the Effective Date, (2) the time of
release by Roney & Co. for publication of the first newspaper
advertisement with respect to the Shares and (3) the time when the
Shares are first generally offered by the Underwriters to dealers
by letter or telegram;
(b) at or before any Closing Date if, in the judgment of
Roney & Co., payment for and delivery of the Shares is rendered
impracticable or inadvisable because (1) additional material
governmental restrictions, not known to be in force and effect
when this Agreement is signed, shall have been imposed upon
trading in securities generally or minimum or maximum prices shall
have been generally established on the New York Stock Exchange, on
the American Stock Exchange or on the over-the-counter market, or
trading in securities generally shall have been suspended on
either such Exchange or on the over-the-counter market or a
general banking moratorium shall have been established by federal,
New York or Michigan authorities, (2) a war or other calamity
shall have occurred or shall have accelerated to such an extent as
to affect adversely the marketability of the Shares, (3) the
Company or the Bank shall have sustained a material loss by fire,
flood, accident, hurricane, earthquake, theft, sabotage or other
calamity or malicious act, which, whether or not said loss shall
have been insured, will in Roney & Co.'s opinion, make it
inadvisable to proceed with the offering of the Shares, (4) the
FIB Order, the FDIC Order, or the Federal Reserve Board Approval
shall have been withdrawn or materially altered, or notice shall
have been received to the effect that any of such approvals will
not be received, or, if received, will be subject to conditions
that the Company would not be able to fulfill in a reasonable time
in Roney & Co.'s reasonable opinion, (5) in Roney's reasonable
opinion it is not probable that the Company and Bank will be able
to commence business before December 31, 1996, for any reason, or
(6) there shall have been such material change in the condition,
business operations or prospects of the Company or the market for
the Shares or similar securities as in Roney & Co.'s judgment
would make it inadvisable to proceed with the offering of the
Shares; or
(c) at or before any Closing Date, if any of the conditions
specified in Section 5 or any other agreements, representations or
warranties in this Agreement shall not have been fulfilled when
and as required by this Agreement.
23
<PAGE> 24
If this Agreement is terminated pursuant to any of its provisions, except as
otherwise provided in this Agreement, the Company shall not be under any
liability to the Underwriters (other than for obligations assumed in Section 6
hereof), and the Underwriters shall not be under any liability to the Company;
provided, however, that if this Agreement is terminated by Roney & Co. because
of any failure, refusal or inability on the part of the Company to comply with
the terms or to fulfill any of the conditions of this Agreement, or for any
reasons provided in subparagraphs (b) and (c) above, the Company will reimburse
the Underwriters for all accountable out-of-pocket expenses (including, without
limitation, road show expenses and fees and disbursements of counsel to Roney &
Co. up to a maximum of $20,000) incurred by them in connection with the
proposed purchase and sale of the Shares or in contemplation of performing
their obligations hereunder.
10. REPRESENTATIONS AND AGREEMENTS TO SURVIVE DELIVERY. All
representations, warranties and agreements contained in this Agreement shall be
deemed to be representations, warranties and agreements at the Closing Dates,
and such representations, warranties and agreements of the Company, including,
without limitation, the payment and reimbursement agreements contained in
Section 6 hereof and the indemnity and contribution agreements contained in
Sections 7 and 8 hereof, shall remain operative and in full force and effect
regardless of any investigation made by or on behalf of the Underwriters or any
controlling person and shall survive termination of this Agreement and/or
delivery of the Shares to and payment for the Shares by the Underwriters
pursuant to this Agreement. In addition, the covenants contained in Section 6
hereof, the agreements contained in this Section 10 and in Sections 7, 8 and 9
shall survive termination of this Agreement and/or delivery of the Shares to
and payment for the Shares by the Underwriters pursuant to this Agreement.
11. MISCELLANEOUS. This Agreement has been and is made for the benefit of
the Underwriters, the Company and their respective successors and assigns, and,
to the extent expressed herein, for the benefit of persons controlling the
Underwriters or the Company, and directors and certain officers of the Company,
and their respective successors and assigns, and no other person, partnership,
association or corporation shall acquire or have any right under or by virtue
of this Agreement. The term "SUCCESSORS AND ASSIGNS" shall not include any
purchaser of Shares from the Underwriters merely because of such purchase.
If any action or proceeding shall be brought by any Underwriter or the
Company in order to enforce any right or remedy under this Agreement, the
Underwriters and the Company hereby consent to, and agree that they will submit
to, the jurisdiction of the courts of the State of Michigan and of any Federal
court sitting in the State of Michigan.
All notices and communications hereunder shall be in writing and
mailed or delivered or by telephone or telegraph if subsequently
confirmed in writing, to the Underwriters, c/o Roney & Co., at One Griswold,
Detroit, Michigan 48226 (facsimile No. (313) 963-2303) (with a copy to Gordon
R. Lewis, Warner Norcross & Judd LLP, 900 Old Kent Building, 111 Lyon Street,
N.W., Grand Rapids, Michigan 49503 (facsimile No. (616) 752-2500)); and to the
24
<PAGE> 25
Company at 100 North Main Street, Mount Clemens, Michigan 48043, Attention:
Harold W. Allmacher, Chairman of the Board and Chief Executive Officer
(facsimile No. (810) 465-9501) (with a copy to Jerome M. Schwartz, Dickinson,
Wright, Moon, Van Dusen & Freeman, 500 Woodward Avenue, Suite 4000, Detroit,
Michigan 48226 (facsimile No. (313) 223-3598)).
This Agreement shall be construed in accordance with the laws of the
State of Michigan, without giving effect to principles of conflicts of laws.
Please confirm that the foregoing correctly sets forth the agreement
between us.
Very truly yours,
COMMUNITY CENTRAL BANK CORPORATION
By:
------------------------------------
Harold W. Allmacher
Its: Chairman of the Board and
Chief Executive Officer
Confirmed by Roney & Co.,
as Representative for, and on
behalf of, the Underwriters
named on Exhibit A:
RONEY & CO.
By:
-----------------------------
John C. Donnelly
Director, Corporate Finance
25
<PAGE> 26
EXHIBIT A
<TABLE>
<CAPTION>
Number of Firm Shares
Name of Underwriter to be Purchased
------------------- ---------------------
<S> <C>
Roney & Co. ...................................
</TABLE>
<PAGE> 27
EXHIBIT B
<TABLE>
<CAPTION>
Number Relationship
of of Person to
Name Shares the Company
------------------- ------ ------------------------
<S> <C> <C>
Harold W. Allmacher 25,000 Chairman, CEO & Director
Gebran S. Anton 25,000 Director
Joseph Catenacci 25,000 Director
Raymond Contesti 15,000 Director
Salvatore Cottone 25,000 Director
Celestina Giles 3,000 Corporate Secretary & Director
Joseph F. Jeannette 25,000 Director
Philip E. Greco 5,000 Director
Bobby L. Hill 2,000 Director
Richard J. Miller 10,000 President, Treasurer & Director
Dean S. Petitpren 25,000 Director
Carole L. Schwartz 25,000 Director
</TABLE>
<PAGE> 28
EXHIBIT C
---------
States
------
Michigan
Florida
Indiana
New Jersey
New York
Ohio
<PAGE> 1
EXHIBIT 3.1
MICHIGAN DEPARTMENT OF COMMERCE-CORPORATION AND SECURITIES BUREAU
Date Received ____________________________ Effective Date ___________________
Corporate Identification Number __ __ __ - __ __ __
ARTICLES OF INCORPORATION
OF
COMMUNITY CENTRAL BANK CORPORATION
These Articles of Incorporation are signed by the incorporator
for the purpose of forming a profit corporation pursuant to the
provisions of Act 284, Public Acts of 1972, as amended, as follows:
ARTICLE I
Name
The name of the corporation is Community Central Bank Corporation.
ARTICLE II
Corporate Purpose
The purpose or purposes for which the corporation is formed are to serve
as a bank holding company registered under the Bank Holding Company Act of
1956, being 12 U.S.C. Sections 1841 to 1850 (as amended from time to time, and
including any successor statutes) and to engage in any activity within the
purposes for which corporations may be formed under the Business Corporation
Act of Michigan.
ARTICLE III
Capital Stock
The total number of shares of all classes of stock which the corporation
shall have authority to issue is 10,000,000 shares which shall be divided into
two classes as follows;
(1) 1,000,000 shares of Preferred Stock (Preferred Stock); and
(2) 9,000,000 shares of Common Stock (Common Stock).
<PAGE> 2
The designations and the powers, preferences and relative, participating
optional or other special rights, and the qualifications limitations or
restrictions of the above classes of stock shall be as follows:
A. PREFERRED STOCK
1. Shares of Preferred Stock may be issued in one or more series at such
time or times and for such consideration or considerations as the Board of
Directors may determine.
2. The Board of Directors is expressly authorized at any time, and from
time to time, to provide for the issuance of shares of Preferred Stock in one
or more series, with such voting powers, full or limited, but not to exceed one
vote per share, or without voting powers and with such designations,
preferences and relative, participating, optional or other special rights, and
qualifications, limitations or restriction thereof, as shall be stated and
expressed in the resolution or resolutions providing for the issue thereof
adopted by the Board of Directors, and as are not stated and expressed in these
Articles of Incorporation, or any amendment thereto, including (but without
limiting the generality of the foregoing) the following:
(a) The designation of such series and number of shares comprising such
series, which number may (except where otherwise provided by the Board of
Directors in creating such series) be increased or decreased (but not below
the number of shares then outstanding) from time to time by action of the
Board of Directors.
(b) The dividend rate or rates on the shares of such series and the
preference or relation which such dividends shall bear to the dividends
payable on any other class of capital stock or on any other series of
Preferred Stock, the terms and conditions upon which and the periods in
respect of which dividends shall be payable, whether and upon what condition
such dividends shall be cumulative and, if cumulative, the date or dates
from which dividends shall accumulate.
(c) Whether the shares of such series shall be redeemable, and, if
redeemable, whether redeemable for cash, property or rights, including
securities of any other corporations, at the option of either the holder or
the corporation or upon the happening of a specified event, the limitations
and restrictions with respect to such redemption, the time or times when,
the price or prices or rate or rates at which, the adjustments with which
and the manner in which such shares shall be redeemable, including the
manner of selecting shares of such series for redemption if less than all
shares are to be redeemed.
(d) The rights to which the holders of shares of such series shall be
entitled, and the preferences, if any, over any other series (or of any
other series over such series), upon the voluntary or involuntary
liquidation, dissolution, distribution or winding up of the corporation,
which rights may vary depending on whether such liquidation, dissolution,
distribution or winding up is voluntary or involuntary, and, if voluntary,
may vary at different dates.
-2-
<PAGE> 3
(e) Whether the shares of such series shall be subject to the operation
of a purchase, retirement or sinking fund, and, if so, whether and upon what
conditions such purchase, retirement or sinking fund shall be cumulative or
noncumulative, the extent to which and the manner in which such fund shall
be applied to the purchase or redemption of the shares of such series for
retirement or to other corporate purposes and the terms and provisions
relative to the operation thereof.
(f) Whether the shares of such series shall be convertible into, or
exchangeable for, at the option of either the holder or the corporation or
upon the happening of a specified event, shares of any other class or of any
other series of any class of capital stock of the corporation, and, if so
convertible or exchangeable, the times, prices, rates, adjustments, and
other terms and conditions of such conversion or exchange.
(g) The voting powers, full and/or limited, if any, of the shares of
such series, and whether and under what conditions the shares of such series
(alone or together with the shares of one or more other series having
similar provisions) shall be entitled to vote separately as a single class,
for the election of one or more directors, or additional directors of the
corporation in case of dividend arrearages or other specified events, or
upon other matters.
(h) Whether the issuance of any additional shares of such series, or of
any shares of any other series, shall be subject to restrictions as to
issuance, or as to the powers, preferences or rights of any such other
series.
(i) Any other preferences, privileges and powers and relative,
participating, option or other special rights, and qualifications,
limitations or restrictions of such series, as the Board of Directors may
deem advisable and as shall not be inconsistent with the provisions of these
Articles of Incorporation.
3. Unless and except to the extent otherwise required by law or provided
in the resolution or resolutions of the Board of Directors creating any series
of Preferred Stock pursuant to this Section A, the holders of the Preferred
Stock shall have no voting power with respect to any matter whatsoever. In no
event shall the Preferred Stock be entitled to more than one vote in respect of
each share of stock.
4. Shares of Preferred Stock redeemed, converted, exchanged, purchased,
retired or surrendered to the corporation, or which have been issued and
reacquired in any manner, may, upon compliance with any applicable provisions
of the Business Corporation Act of the State of Michigan, be given the status
of authorized and unissued shares of Preferred Stock and may be reissued by the
Board of Directors as part of the series of which they were originally a part
or may be reclassified into and reissued as part of a new series or as a part
of any other series, all subject to the protective conditions or restrictions
of any outstanding series of Preferred Stock.
-3-
<PAGE> 4
B. COMMON STOCK
1. Except as otherwise required by law or by any amendment to these
Articles of Incorporation, each holder of Common Stock shall have one vote for
each share of stock held by him of record on the books of the corporation on
all matters voted upon by the shareholders.
2. Subject to the preferential dividend rights, if any, applicable to
shares of Preferred Stock and subject to applicable requirements, if any, with
respect to the setting aside of sums for purchase, retirement or sinking funds
for Preferred Stock, the holders of Common Stock shall be entitled to receive,
to the extent permitted by law, such dividends as may be declared from time to
time by the Board of Directors.
3. In the event of the voluntary or involuntary liquidation, dissolution,
distribution of assets or winding up of the corporation, after distribution in
full of the preferential amounts, if any, to be distributed to the holders of
shares of Preferred Stock, holders of Common Stock shall be entitled to receive
all of the remaining assets of the corporation of whatever kind available for
distribution to shareholders ratably in proportion to the number of shares of
Common Stock held by them respectively. The Board of Directors may distribute
in kind to the holders of Common Stock such remaining assets of the corporation
or may sell, transfer or otherwise dispose of all or any part of such remaining
assets to any other corporation, trust or entity, or any combination thereof,
and may sell all or any part of the consideration so received and distribute
any balance thereof in kind to holders of Common Stock. The merger or
consolidation of the corporation into or with any other corporation, or the
merger of any other corporation into it, or any purchase or redemption of
shares of stock of the corporation of any class, shall not be deemed to be a
dissolution, liquidation of winding up of the corporation for the purposes of
this paragraph.
4. Such numbers of shares of Common Stock as may from time to time be
required for such purpose shall be reserved for issuance (i) upon conversion of
any shares of Preferred Stock or any obligation of the corporation convertible
into shares of Common Stock which is at the time outstanding or issuable upon
exercise of any options or warrants at the time outstanding and (ii) upon
exercise of any options, warrants or rights at the time outstanding to purchase
shares of Common Stock.
ARTICLE IV
Board of Directors
A. Number, Election and Term of Directors. The business and affairs of
the corporation shall be managed by or under the direction of a Board of
Directors. The number of directors of the corporation shall be fixed from time
to time by resolution adopted by the affirmative vote of a majority of the
entire Board of Directors of the corporation, except that the minimum number of
directors shall be fixed at no less than 6 and the maximum number of directors
shall be fixed at no more than 15. The directors shall be divided into three
classes, designated Class I, Class II and Class III. Each class shall consist,
as nearly equal in number as possible, of one-
-4-
<PAGE> 5
third of the total number of directors constituting the entire Board of
Directors. Initially, Class I directors shall be elected for a one-year
term, Class II directors for a two-years term and Class III directors for a
three-year term. At each succeeding annual meeting of shareholders, beginning
in 1997, successors of the class of directors whose term expires at that annual
meeting shall be elected for a three-year term. If the number of directors is
changed, any increase or decrease shall be apportioned among the classes so as
to maintain the number of directors in each class as nearly equal as possible.
B. Shareholder Nomination of Director Candidates. Nominations for
election to the Board of Directors of the corporation at a meeting of
shareholders may be made by the Board of Directors, on behalf of the Board of
Directors by any nominating committee appointed by the Board of Directors, or
by any shareholder of the corporation entitled to vote for the election of
directors at the meeting. Nominations, other than those made by or on behalf
of the Board of Directors, shall be made by notice in writing delivered to or
mailed, postage prepaid, and received by the Secretary of the corporation at
least 60 days but no more than 90 days prior to the anniversary date of the
immediately preceding Annual Meeting of Shareholders. The notice shall set
forth (i) the name and address of the shareholder who intends to make the
nomination; (ii) the name, age, business address and, if known, residence
address of each nominee; (iii) the principal occupation or employment of each
nominee; (iv) the number of shares of stock of the corporation which are
beneficially owned by each nominee and by the nominating shareholder; (v) any
other information concerning the nominee that must be disclosed by nominees in
a proxy solicitation pursuant to Regulation 14A of the Securities Exchange Act
of 1934 (or any subsequent provisions replacing such Regulation); and (vi) the
executed consent of each nominee to serve as a director of the corporation, if
elected. The chairman of the meeting of shareholders may, if the facts
warrant, determine that a nomination was not made in accordance with the
foregoing procedures, and if the chairman should so determine, the chairman
shall so declare to the meeting and the defective nomination shall be
disregarded.
C. Newly Created Directorships and Vacancies. Newly created directorships
resulting from any increase in the number of directors and any vacancies on the
Board of Directors resulting from death, resignation, disqualification, removal
or other cause shall be filled by the affirmative vote of a majority of the
remaining directors then in office, even though less than a quorum, or by a
sole remaining director. Any director of any class chosen to fill a vacancy in
such class shall hold office for a term that shall coincide with the remaining
term of that class, but in no case will a decrease in the number of directors
shorten the term of any incumbent director. A director shall hold office until
the next annual meeting for the year in which his or her term expires and until
such director's successor shall have been elected and qualified.
D. Removal. Any director may be removed from office only for cause and
only by the affirmative vote of the holders of at least a majority of the
voting power of all the shares of the corporation entitled to vote generally in
the election of directors, voting together as a single class.
-5-
<PAGE> 6
E. Preferred Stock. Notwithstanding the foregoing paragraphs, whenever
the holders of any one or more classes or series of Preferred Stock issued by
the corporation shall have the right, voting separately by class or series, to
elect directors at an annual or special meeting of shareholders, the election,
term of office, filling of vacancies and other features of such directorships
shall be governed by the terms of the Articles of Incorporation applicable
thereto. The then authorized number of directors of the corporation shall be
increased by the number of additional directors to be elected, and such
director so elected shall not be divided into classes pursuant to this Article
unless expressly provided by such terms.
F. Amendment or Repeal. Notwithstanding anything contained in these
Articles of Incorporation or the By-laws of the corporation to the contrary,
the affirmative vote of the holders of at least 66 2/3% of the voting power of
all the shares of the corporation entitled to vote generally in the election of
directors, voting together as a single class, shall be required to alter,
amend, repeal or adopt any provision inconsistent with the purpose and intent
of this Article.
ARTICLE V
Directors' Liability
A director of the corporation shall not be personally liable to the
corporation or its shareholders for monetary damages for breach of fiduciary
duty as a director, except for liability (i) for any breach of the director's
duty of loyalty to the corporation or its shareholders, (ii) for acts or
omissions not in good faith or that involve intentional misconduct or a knowing
violation of law, (iii) a violation of Section 551(1) of the Michigan Business
Corporation Act, or (iv) for any transaction from which the director derived
any improper personal benefit. If the Michigan Business Corporation Act is
amended after the date of these Articles of Incorporation to authorize
corporate action further eliminating or limiting the personal liability of
directors, then the liability of a director of the corporation shall be
eliminated or limited to the fullest extent permitted by the Michigan Business
Corporation Act, as so amended.
Any repeal or modification of the foregoing paragraph by the shareholders
of the corporation shall not adversely affect any right or protection of a
director of the corporation existing at the time of such repeal or
modification.
ARTICLE VI
Indemnification
Directors and executive officers of the corporation shall be indemnified as of
right to the fullest extent now or hereafter permitted by law in connection
with any actual or threatened civil, criminal, administrative or investigative
action, suit or proceeding (whether brought by or in the name of the
corporation, a subsidiary, or otherwise) arising out of their service to
the corporation or a subsidiary, or to another organization at the request of
the corporation or a
-6-
<PAGE> 7
subsidiary. Persons who are not directors or executive officers of the
corporation may be similarly indemnified in respect of such service to the
extent authorized at any time by the Board of Directors of the corporation.
The corporation may purchase and maintain insurance to protect itself and any
such director, officer or other person against any liability asserted against
him and incurred by him in respect of such service whether or not the
corporation would have the power to indemnify him against such liability by law
or under the provisions of this paragraph. The provisions of this paragraph
shall be applicable to directors, officers and other persons who have ceased to
render such service, and shall inure to the benefit of the heirs, executors,
and administrators of the directors, officers and other persons referred to in
this paragraph.
ARTICLE VII
Shareholder Action
Any action required or permitted to be taken on or after July 1, 1996 by
any shareholders of the corporation must be effected at a duly called annual or
special meeting of such shareholders and may not be effected by any consent in
writing by such shareholders. Except as may be otherwise required by law,
special meetings of shareholders of the corporation may be called only by the
Board of Directors or the Chairman of the Board. Notwithstanding anything
contained in these Articles of Incorporation or the By-laws of the corporation
to the contrary, the affirmative vote of at least 66 2/3% of the voting power
of all the shares of the corporation entitled to vote generally in the election
of directors, voting together as a single class, shall be required to alter,
amend or adopt any provision inconsistent with the purpose and intent of this
Article.
ARTICLE VIII
Registered Office and Agent
The address of the initial registered office of the corporation is: 500
Woodward Avenue, Suite 4000, Detroit, Michigan 48226. The name of the
resident agent is: Jerome M. Schwartz.
ARTICLE IX
Incorporator
The name and address of the incorporator of the corporation is as follows:
Jerome M. Schwartz
Dickinson, Wright, Moon, Van Dusen & Freeman
500 Woodward Avenue, Suite 4000
Detroit, Michigan 48226
-7-
<PAGE> 8
I, the incorporator, sign my name this 19th day of April, 1996.
__________________________________________
Incorporator, Jerome M. Schwartz
Fees remitted by and document to be returned to:
Jerome M. Schwartz
Dickinson, Wright, Moon, Van Dusen and Freeman
500 Woodward Avenue, Suite 4000
Detroit, Michigan 48226
-8-
<PAGE> 1
EXHIBIT 3.2
BYLAWS
OF
COMMUNITY CENTRAL BANK CORPORATION
ARTICLE I.
OFFICES
SECTION 1. PRINCIPAL OFFICE. The principal office shall be in
the City of Mount Clemens, State of Michigan.
SECTION 2. OTHER OFFICES. The corporation may also have offices
at such other places both within and without the State of Michigan as the Board
of Directors may from time to time determine or the business of the corporation
may require.
ARTICLE II.
MEETINGS OF SHAREHOLDERS
SECTION 1. Times and Places of Meetings. All meetings of the
shareholders shall be held at such times and places, within or without the
State of Michigan, as may be fixed from time to time by the Board of Directors.
If no designation of the place of a meeting is made, such meeting shall be held
at the principal office of the corporation in Mount Clemens, Michigan.
SECTION 2. ANNUAL MEETINGS. Annual meetings of the shareholders
shall be held each year at such time on such business day in the month of April
as may be designated by the Board of Directors, or if no such designation is
made, at 10 a.m. on the third Tuesday in April, or if that day is a legal
holiday, then on the next succeeding business day at such place and hour as
shall be fixed by the Board of Directors.
SECTION 3. SPECIAL MEETINGS. Special meetings of the
shareholders may be called by resolution of a majority of the Board of
Directors or by the Chairman of the Board and shall be held on a date fixed by
the Board of Directors or the Chairman of the Board.
SECTION 4. NOTICE OF MEETINGS. Written notice of each meeting
of shareholders, stating the time, place and purposes thereof, shall be given
to each shareholder entitled to vote at the meeting not less than ten (10) nor
more than sixty (60) days before the date fixed for the meeting. Notice of a
meeting need not be given to any shareholder who signs a waiver of notice
before or after the meeting. Attendance of a shareholder at a meeting shall
constitute both (a) a waiver of notice or defective notice except when the
shareholder attends a meeting for the
<PAGE> 2
express purpose of objecting, at the beginning of the meeting, to holding the
meeting or transacting any business because the meeting has not been lawfully
called or convened, and (b) a waiver of objection to consideration of a
particular matter at the meeting that is not within the purpose or purposes
described in the meeting notice, except when the shareholder objects to
considering the matter when it is presented.
SECTION 5. SHAREHOLDER LIST. The officer or agent who has
charge of the stock ledger of the corporation shall prepare and make a complete
list of the shareholders entitled to vote at each meeting, arranged by class or
series of shares in alphabetical order, showing the address of and the number
of shares registered in the name of each shareholder. The list shall be
produced and kept at the time and place of the meeting and may be inspected at
any time during the meeting by any shareholder who is present at the meeting.
SECTION 6. QUORUM. Unless a greater or lesser quorum is
provided in the Articles of Incorporation or by law, shares entitled to cast a
majority of the votes at a meeting constitute a quorum at the meeting. Except
when the holders of a class or series of shares are entitled to vote separately
on an item of business, shares of all classes and series entitled to vote shall
be combined as a single class and series for the purpose of determining a
quorum. When the holders of a class or series of shares are entitled to vote
separately on an item of business, shares of that class or series entitled to
cast a majority of the votes of that class or series at a meeting constitute a
quorum of that class or series at the meeting unless a greater or lesser quorum
is provided in the Articles of Incorporation or by law. If there is no quorum,
the officer of the corporation presiding as chairman of the meeting shall have
the power to adjourn the meeting from time to time, without notice other than
announcement at the meeting, until a quorum is present, when any business may
be transacted which might have been transacted at the meeting as first convened
had there been a quorum. However, if the adjournment is for more than thirty
(30) days, or if after the adjournment the Board fixes a new record date for
the adjourned meeting, notice of the time, place and purposes of such meeting
shall be given to each shareholder of record on the new record date. Once a
quorum is determined to be present, the shareholders present in person or by
proxy at such meeting may continue to do business until adjournment,
notwithstanding the withdrawal of enough shareholders to leave less than a
quorum. If a meeting is adjourned solely for the purpose of receiving the
results of voting by shareholders, such meeting need not be reconvened. If not
reconvened, such meeting shall stand adjourned pending submission of the
results of voting to the Secretary of the corporation, whereupon such meeting
shall stand adjourned until the next regular or special meeting of
shareholders.
SECTION 7. VOTE REQUIRED. When a quorum is present at a
meeting, any action to be taken by a vote of the shareholders, other than the
election of directors, shall be authorized by a majority of the votes cast by
the holders of shares entitled to vote on the action, unless a greater vote is
required by the Articles of Incorporation or express provision of statute.
Except as otherwise provided by the Articles of Incorporation, directors shall
be elected by a plurality of the votes cast at an election.
2
<PAGE> 3
SECTION 8. VOTING RIGHTS. Except as otherwise provided by the
Articles of Incorporation or the resolution or resolutions of the Board of
Directors creating any class of stock, each shareholder shall at every meeting
of the shareholders be entitled to one vote in person or by proxy for each
share of the capital stock having voting power held by such shareholder. Each
proxy to vote shall be in writing and signed by the shareholder or his or her
duly authorized representative, and no proxy shall be voted after three years
from its date, unless the proxy provides for a longer period.
SECTION 9. CONDUCT OF MEETINGS. Meetings of shareholders
generally shall follow accepted rules of parliamentary procedure, subject to
the following:
(a) The chairman of the meeting shall have absolute
authority over matters of procedure, and there shall be no appeal from
the ruling of the chairman. If, in his or her absolute discretion,
the chairman deems it advisable to dispense with the rules of
parliamentary procedure as to any meeting of shareholders or part
thereof, he or she shall so state and shall clearly state the rules
under which the meeting or appropriate part thereof shall be
conducted.
(b) If disorder should arise which, in the absolute
discretion of the chairman, prevents the continuation of the
legitimate business of the meeting, the chairman may quit the chair
and announce the adjournment of the meeting, and upon his or her so
doing, the meeting is immediately adjourned without the necessity of
any vote or further action of the shareholders.
(c) The chairman may require any person who is not a bona
fide shareholder of record on the record date, or a validly appointed
proxy of such a shareholder, to leave the meeting.
(d) The chairman may introduce nominations, resolutions
or motions submitted by the Board of Directors for consideration by
the shareholders without a motion or second. Except as the chairman
shall direct, a resolution or motion not submitted by the board of
directors shall be considered for a vote only if proposed by a
shareholder of record on the record date or a validly appointed proxy
of such a shareholder, and seconded by such a shareholder or proxy
other than the individual who proposed the resolution or motion.
(e) Except as the chairman shall direct, no matter may be
presented to the meeting which has not been submitted in writing to
the Secretary for inclusion in the agenda at least 10 days before the
date of the meeting.
(f) When all shareholders present at a meeting in person
or by proxy have been offered an opportunity to vote on any matter
properly before a meeting, the chairman may at his or her discretion
declare the polls to be closed, and no further votes may be cast or
changed after such declaration. If no such declaration is made by the
3
<PAGE> 4
chairman, the polls shall remain open and shareholders may cast
additional votes or change votes until the inspectors of election have
delivered their final report to the chairman.
(g) When the chairman has declared the polls to be closed
on all matters then before a meeting, the chairman may declare the
meeting to be adjourned pending determination of the results by the
inspectors of election. In such event, the meeting shall be
considered adjourned for all purposes, and the business of the meeting
shall be finally concluded upon delivery of the final report of the
inspectors of election to the chairman at or after the meeting.
(h) When the chairman determines that no further matters
may properly come before a meeting, he or she may declare the meeting
to be adjourned, without motion, second, or vote of the shareholders.
(i) When the chairman has declared a meeting to be
adjourned, unless the chairman has declared the meeting to be
adjourned until a later date, no further business may properly be
considered at the meeting even though shareholders or holders of
proxies representing a quorum may remain at the site of the meeting.
SECTION 10. INSPECTORS OF ELECTION. The Board of Directors or,
if they shall not have so acted, the Chairman of the Board, may appoint at or
prior to any meeting of shareholders one or more persons (who may be directors
or employees of the corporation) to serve as inspectors of election. The
inspectors so appointed shall determine the number of shares outstanding and
the voting power of each, the shares represented at the meeting, the existence
of a quorum, the validity and effect of proxies, and shall receive votes or
ballots, hear and determine challenges and questions arising in connection with
the right to vote, count and tabulate votes or ballots, determine the result,
and do such acts as are proper to conduct the election or vote with fairness to
all shareholders.
SECTION 11. VOTING. When any vote is taken by written ballot at
any meeting of shareholders, an unrevoked proxy submitted in accordance with
its terms shall be accepted in lieu of, and shall be deemed to constitute, a
written ballot marked as specified in such proxy.
ARTICLE III.
RECORD DATE
SECTION 1. FIXING OF RECORD DATE BY BOARD. For the purpose of
determining the shareholders entitled to notice of or to vote at any meeting of
shareholders, or any adjournment thereof, or to express consent to or dissent
from any corporate action in writing without a meeting, or for the purpose of
determining shareholders entitled to receive payment of any dividend or the
distribution or allotment of any rights or evidences of interests arising out
of any change, conversion or exchange of capital stock, or for the purpose of
any other action, the Board
4
<PAGE> 5
of Directors may fix, in advance, a date as the record date for any such
determination of shareholders. Such date shall not be more than sixty (60)
days nor less than ten (10) days before the date of any such meeting, nor more
than sixty (60) days prior to the effectuation of any other action proposed to
be taken. Only shareholders of record on a record date so fixed shall be
entitled to notice of, and to vote at, such meeting or to receive payment of
any dividend or the distribution or allotment of any rights or evidences of
interests arising out of any change, conversion or exchange of capital stock.
SECTION 2. PROVISION FOR RECORD DATE IN THE ABSENCE OF BOARD ACTION.
If a record date is not fixed by the Board of Directors: (a) the record date
for determination of shareholders entitled to notice of or to vote at a meeting
of shareholders shall be the close of business on the day next preceding the
day on which notice is given, or, if no notice is given, the day next preceding
the day on which the meeting is held; (b) the record date for determining
shareholders entitled to express consent to corporate action in writing,
without a meeting, when no prior action by the Board of Directors is necessary,
shall be the day on which the first written consent is expressed; and (c) the
record date for determining shareholders for any other purpose shall be the
close of business on the day on which the resolution of the Board relating
thereto is adopted.
SECTION 3. ADJOURNMENTS. When a determination of shareholders of
record entitled to notice of or to vote at a meeting of shareholders has been
made as provided in this Article, the determination applies to any adjournment
of the meeting unless the board fixes a new record date for the adjourned
meeting.
ARTICLE IV.
DIRECTORS
SECTION 1. NUMBER AND QUALIFICATION OF DIRECTORS. Each director
shall be at least twenty-one (21) years of age. A director need not be a
citizen of the United States or a resident of the State of Michigan. The
number of directors shall be fixed by resolution of the Board of Directors as
provided in the Articles of Incorporation.
SECTION 2. VACANCIES. Vacancies and newly created directorships
resulting from any increase in the authorized number of directors shall be
filled in the manner provided in the Articles of Incorporation.
SECTION 3. POWERS. The business and affairs of the corporation
shall be managed by its Board of Directors, which may exercise all such powers
of the corporation and do all such lawful acts and things as are not by statute
or by the Articles of Incorporation or by these Bylaws directed or required to
be exercised or done by the shareholders.
SECTION 4. FEES AND EXPENSES. The directors may be paid their
expenses, if any, of attendance at each meeting of the board of directors and
may be paid a fixed sum for attendance at each meeting of the Board of
Directors or a stated salary as director. No such payment shall
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preclude any director from serving the corporation in any other capacity and
receiving compensation therefor. Members of special or standing committees may
be allowed compensation for attending committee meetings.
SECTION 5. RESIGNATION AND REMOVAL. Any director may resign at
any time and such resignation shall take effect upon receipt of written notice
thereof by the corporation, or at such subsequent time as set forth in the
notice of resignation. Directors may be removed only as provided by statute or
the Articles of Incorporation.
ARTICLE V.
MEETINGS OF DIRECTORS
SECTION 1. PLACE OF MEETINGS. The Board of Directors of the
corporation may hold meetings, both regular and special, either within or
without the State of Michigan.
SECTION 2. REGULAR MEETINGS. Regular meetings of the Board of
Directors may be held with or without notice at such time and at such place as
shall from time to time be determined by the Board.
SECTION 3. SPECIAL MEETINGS. Special meetings of the Board may be
called by the Chairman of the Board or the President on two (2) days' notice to
each director, either personally, by mail, by telegram, by facsimile
transmission, or by telephone; special meetings shall be called by the Chairman
of the Board or the President in like manner and on like notice on the written
request of two (2) directors.
SECTION 4. PURPOSE NEED NOT BE STATED. Neither the business to be
transacted at, nor the purpose of, any regular or special meeting of the Board
of Directors need be specified in the notice of such meeting.
SECTION 5. QUORUM. At all meetings of the Board of Directors a
majority of the total number of directors shall constitute a quorum for the
transaction of business, and the acts of a majority of the directors present at
any meeting at which there is a quorum shall be the acts of the Board of
Directors, except as may be otherwise specifically provided by statute or by
the Articles of Incorporation. If a quorum is not present at any meeting of
the Board of Directors, the directors present thereat may adjourn the meeting
from time to time, without notice other than announcement at the meeting, until
a quorum is present.
SECTION 6. ACTION WITHOUT A MEETING. Unless otherwise
restricted by the Articles of Incorporation or these Bylaws, any action
required or permitted to be taken at any meeting of the Board of Directors or
of any committee thereof may be taken without a meeting if, before or after the
action, all members of the board or of such committee, as the case may be,
consent thereto in writing and such written consent is filed with the minutes
or proceedings of the Board or committee.
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SECTION 7. MEETING BY TELEPHONE OR SIMILAR EQUIPMENT. Members of the
Board of Directors or any committee designated by the Board of Directors may
participate in a meeting of the Board or such committee by means of conference
telephone or similar communications equipment by means through which all
persons participating in the meeting can communicate with each other.
Participation in a meeting pursuant to this Section shall constitute presence
in person at the meeting.
SECTION 8. WAIVER OF NOTICE. Attendance of a director at or
participation in a meeting of the Board of Directors or any committee
constitutes a waiver of notice of the meeting, except where a director attends
a meeting for the express purpose of objecting, at the beginning of the meeting
or upon his or her arrival, to the meeting or the transaction of any business
because the meeting has not lawfully been called or convened, and the person
does not thereafter vote for or assent to any action taken at the meeting.
Notice of any meeting of the Board or a committee need not be given to any
person entitled thereto who waives such notice in writing, either before or
after the meeting.
ARTICLE VI.
COMMITTEES OF DIRECTORS
SECTION 1. COMMITTEES. The Board of Directors may from time to time
appoint committees, whose membership shall consist of such members of the Board
of Directors as it may deem advisable, to serve at the pleasure of the Board.
The Board of Directors may also appoint directors to serve as alternates for
members of each committee in the absence or disability of regular members. The
Board of Directors may fill any vacancies in any committee as they occur.
SECTION 2. EXECUTIVE COMMITTEE. The Executive Committee, if there is
one, shall have and may exercise the full powers and authority of the Board of
Directors in the management of the business affairs and property of the
corporation during the intervals between meetings of the Board of Directors.
The Executive Committee shall also have the power and authority to declare
distributions and dividends and to authorize the issuance of stock.
SECTION 3. AUDIT COMMITTEE.
(a) Function. The Audit Committee shall perform the
function of an audit committee for the corporation as that function
may be defined for the purpose of compliance with laws and regulations
applicable to the corporation. The Audit Committee shall have the
following duties and responsibilities and such other duties and
responsibilities as are assigned to it from time to time by the
Board of Directors:
(i) causing a suitable examination of the financial
records and operations of the corporation to be made by the
internal auditor of the corporation;
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(ii) recommending to the Board of Directors the
employment of independent public accountants;
(iii) reviewing with the independent public
accountants and management of the corporation and its
subsidiaries the basis for reports required by Section 36 of
the Federal Deposit Insurance Act, as amended, and any
regulations issued pursuant to such act by the Federal Deposit
Insurance Corporation or any successor of such corporation;
(iv) reviewing examination reports of the
corporation prepared by regulatory authorities and such other
information concerning examination reports of the
corporation's subsidiaries as the committee deems advisable;
and
(v) reporting to the board of directors at least
once each calendar year concerning the results of examinations
made and such conclusions and recommendations as the Audit
Committee deems advisable.
(b) Eligibility of Members. Directors who fulfill all
of the following conditions shall be eligible to serve on the Audit
Committee:
(i) members may not be current employees of the
corporation or an its subsidiaries; and
(ii) members must satisfy the requirements
established by Section 36 of the Federal Deposit Insurance
Act, as amended, and any regulations issued pursuant to such
act by the Federal Deposit Insurance corporation or any
successor of such corporation.
(c) Authorized Actions. The Audit Committee shall have
the power to take and effect such actions as it deems necessary
or advisable in the performance of its duties. The committee may
engage counsel and other consultants to assist the committee in
performing its duties. Such counsel and other consultants may but
need not be otherwise engaged by the corporation unless otherwise
prohibited by applicable laws or regulations.
SECTION 4. COMPENSATION COMMITTEE.
(a) Function. The Compensation Committee shall perform
the function of a compensation committee as that function may
be defined for the purpose of compliance with laws and regulations
applicable to the corporation. The Compensation Committee shall have
the following duties and responsibilities and such other duties and
responsibilities as are assigned to it from time to time by the Board
of Directors:
(i) administering the option plans and benefit
plans of the corporation which are approved by the Board of
Directors;
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(ii) determining the compensation policy of the
corporation, reviewing the personnel policies and programs of
the corporation, and submitting recommendations to the Board
of Directors;
(iii) determining the compensation of the Chief
Executive Officer, reviewing individual salaries of other
executive officers, and submitting recommendations to the
Board of Directors; and
(iv) preparing an annual report that may be
submitted to the corporation's shareholders concerning the
compensation policy of the corporation and the committee's
compensation decisions during the previous fiscal year.
(b) Eligibility of Members. Directors who fulfill all
of the following conditions shall be eligible to serve on the Compensation
Committee:
(i) members may not be current employees of the
corporation or any of its subsidiaries;
(ii) members must be "disinterested persons" as
such term may be defined for purposes of Section 16 of the
Securities Exchange Act of 1934, as amended; and
(iii) members must not have an Interlocking
Relationship with any executive officer of the corporation.
An Interlocking Relationship shall include a relationship where an
executive officer of the corporation serves as a member of the board of
directors of another entity of which a director of the corporation is an
executive officer, or any other relationship that would be required to be
disclosed pursuant to Item 402(j)(3) of Regulation S-K issued by the
Securities and Exchange Commission.
(c) Authorized Actions. The Compensation Committee shall
have the power to take and effect the following actions:
(i) authorize the issuance of stock pursuant to
the option plans and benefit plans of the Corporation which
are approved by the Board of Directors;
(ii) interpret the option plans and benefit plans
of the corporation which it administers to the extent that
such power does not conflict with the terms of the applicable
plan document; and
(iii) engage counsel and other consultants as the
committee may deem necessary or advisable to assist the
committee in performing its duties, which
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counsel and other consultants may but need not be otherwise engaged by the
corporation.
SECTION 5. NOMINATING COMMITTEE. The Nominating Committee, if
there is one, shall consider candidates for the Board of Directors, propose to
the Board of Directors candidates for directors for submission to the
shareholders at the annual meeting, and review the retirement policy for
directors and make recommendations to the Board of Directors concerning this
policy.
SECTION 6. OTHER COMMITTEES. The Board of Directors may
designate such other committees as it may deem appropriate, and such committees
shall exercise the authority delegated to them.
SECTION 7. MEETINGS. Each committee provided for above shall
meet as often as its business may require and may fix a day and time for
regular meetings, notice of which shall not be required. Whenever the day
fixed for a meeting shall fall on a holiday, the meeting shall be held on the
following business day or on such other day as the chairman of the committee
may determine. Special meetings of committees may be called by any member, and
notice thereof may be given to the members by telephone, telegram, letter or
facsimile transmission. A majority of the members of a committee shall
constitute a quorum for the transaction of the business of the committee. A
record of the proceedings of each committee shall be kept and presented to the
Board of Directors.
SECTION 8. SUBSTITUTES. In the absence or disqualification of a
member of a committee, the members thereof present at a meeting and not
disqualified from voting, whether or not they constitute a quorum, may
unanimously appoint another member of the Board to act at the meeting in place
of such absent or disqualified member.
ARTICLE VII.
OFFICERS
SECTION 1. APPOINTMENT OF OFFICERS. The Board of Directors at
its first meeting after the annual meeting of shareholders, or as soon as
practicable after the election of directors in each year, shall appoint from
its number a Chairman of the Board and a President. The Board of Directors
shall also appoint a Secretary and a Treasurer, all of whom shall be officers
of the corporation. The Board of Directors may also appoint and expressly
designate such other individuals as it may deem proper to be officers of the
corporation, with such titles as the Board of Directors may deem appropriate.
If the offices of Chairman of the Board and President are held by a single
person, that officer shall be the Chief Executive Officer of the corporation;
if not, the Board of Directors shall designate either the Chairman of the Board
or the President to be the Chief Executive Officer of the corporation. The
dismissal of an officer, the appointment of an officer to fill the office of
one who has been dismissed or has ceased for any reason to be an officer, the
appointment of any additional officers and the change of an officer to a
different
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or additional office may be made by the Board of Directors at any later
meeting. Any two or more offices may be filled by the same person.
SECTION 2. AUTHORITY OF OFFICERS. The Chief Executive Officer,
the President (if not also the Chief Executive Officer), the Secretary, the
Treasurer, and such other persons as the Board of Directors shall have
appointed and expressly designated as officers shall be the only officers of
the corporation. Only the officers of the corporation shall have discretionary
authority to determine the fundamental policies of the corporation.
SECTION 3. TERM OF SERVICE. Each officer shall serve at the
pleasure of the Board. The Board of Directors may remove any officer from his
or her office for cause or without cause. Any officer may resign his or her
office or position at any time, such resignation to take effect upon receipt of
written notice thereof by the corporation unless otherwise specified in the
resignation.
SECTION 4. CHAIRMAN OF THE BOARD. The Chairman of the Board
shall preside at all meetings of the shareholders and all meetings of the Board
of Directors.
SECTION 5. PRESIDENT. The President shall, subject to the
direction of the Board of Directors, see that all orders and resolutions of the
Board are carried into effect, and shall perform all other duties necessary or
appropriate to his or her office, subject, however, to his or her right and the
right of the directors to delegate any specific powers to any other officer or
officers of the corporation. In case of the absence or inability to act of the
Chairman of the Board, the President shall exercise all of the duties and
responsibilities of the Chairman until the Board shall otherwise direct.
SECTION 6. CHIEF EXECUTIVE OFFICER. The Chief Executive
Officer, in addition to his or her duties as Chairman of the Board or
President, as the case may be, shall have final authority, subject to the
control of the Board of Directors, over the general policy and business of the
corporation. The Chief Executive Officer shall have the power, subject to the
control of the Board of Directors, to appoint, suspend or discharge and to
prescribe the duties and to fix the compensation of such agents and employees
of the corporation, other than the officers appointed by the Board, as he or
she may deem necessary.
SECTION 7. VICE CHAIRMEN OF THE BOARD. Each Vice-Chairman of
the Board shall have such powers and perform such duties as may be assigned to
him or her from time to time by the Board of Directors or the Chief Executive
Officer. In case of the absence or inability to act of the Chairman of the
Board and the President, the duties of his or her office shall, unless
otherwise specified by these Bylaws, be performed by the Vice-Chairmen of the
Board in the order of their seniority or such other priority as may be
established by the board or by the Chief Executive Officer, unless and until
the Board shall otherwise direct, and, when so acting, the duly authorized
Vice-Chairman of the Board shall have all the powers of, and shall be subject
to the restrictions upon, the Chairman of the Board or the President.
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SECTION 8. VICE PRESIDENTS. Each Executive Vice President,
Senior Vice President, Vice President, Assistant Vice President and such other
vice presidents as may be designated by the Board of Directors shall have such
powers and perform such duties as may be assigned to him or her from time to
time by the Board of Directors or the Chief Executive Officer. In case of the
absence or inability to act of the President, and in the absence or inability
to act of the Vice-Chairmen of the Board, the duties of the President shall,
unless otherwise specified by these Bylaws, be performed by the Executive Vice
Presidents, the Senior Vice Presidents, the Vice Presidents, the Assistant Vice
Presidents and then such other vice presidents as may be designated by the
Board in the order of their seniority or such other priority as may be
established by the Board, unless and until the board shall otherwise direct,
and, when so acting, the duly authorized Executive Vice President, Senior Vice
President, Vice President or Assistant Vice President shall have all the powers
of, and shall be subject to the restrictions upon, the President. Executive
Vice Presidents, Senior Vice Presidents, Vice Presidents and Assistant Vice
Presidents, have the authority to sign or execute contracts and other documents
which shall be binding on the corporation and to fulfill the terms thereof, but
such Executive Vice Presidents, Senior Vice Presidents, Vice Presidents and
Assistant Vice Presidents shall not have the discretionary policy-making
authority conferred upon the officers by these Bylaws unless expressly
designated as an officer by the Board of Directors.
SECTION 9. SECRETARY. The Secretary shall attend all sessions
of the Board of Directors and all meetings of the shareholders and shall record
all votes and the minutes of all proceedings in a book to be kept for that
purpose. The Secretary shall perform like duties for committees when required.
He or she shall give, or cause to be given, notice of all meetings of the
shareholders and meetings of the Board of Directors. He or she shall keep in
safe custody the seal of the corporation and shall see that it is affixed to
all documents the execution of which, on behalf of the corporation under its
seal, is necessary or appropriate, and when so affixed may attest the same. He
or she shall perform such other duties as may be prescribed by the Board of
Directors.
SECTION 10. TREASURER. The Treasurer shall have custody of the
corporate funds and securities, except as otherwise provided by the Board,
shall cause to be kept full and accurate accounts of receipts and disbursements
in books belonging to the corporation, and shall deposit all moneys and other
valuable effects in the name and to the credit of the corporation in such
depositories as may be designated by the Board of Directors. He or she shall
disburse the funds of the corporation as may be ordered by the Board of
Directors, taking proper vouchers for such disbursements, and shall render to
the directors, at the regular meetings of the Board or whenever they may
require it, an account of all his or her transactions as Treasurer and of the
financial condition of the corporation.
SECTION 11. ABSENCE. In the case of the absence or inability to
act of any officer or for any other reason that the Board may deem sufficient,
the Board of Directors or the Chief Executive Officer may delegate for the time
being the powers or duties of such officer to any other director or officer.
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ARTICLE VIII.
INDEMNIFICATION
SECTION 1. INDEMNIFICATION OTHER THAN IN ACTIONS BY OR IN THE
RIGHT OF THE CORPORATION. Any person who was or is a party or is threatened to
be made a party to any threatened, pending or completed action, suit or
proceeding, whether civil, criminal, administrative or investigative (other
than an action by or in the right of the corporation) by reason of the fact
that he or she is or was a director or officer of the corporation, or, while
serving as such a director or officer, is or was serving at the request of the
corporation as a director, officer, partner, trustee, employee or agent of
another foreign or domestic corporation, partnership, joint venture, trust or
other enterprise, whether for profit or not, shall be indemnified by the
corporation against expenses (including attorneys' fees), judgments, penalties,
fees and amounts paid in settlement actually and reasonably incurred by him or
her in connection with such action, suit or proceeding if he or she acted in
good faith and in a manner he or she reasonably believed to be in or not
opposed to the best interests of the corporation or its shareholders, and, with
respect to any criminal action or proceeding, had no reasonable cause to
believe his or her conduct was unlawful. The termination of any action, suit
or proceeding by judgment, order, settlement, conviction or upon a plea of nolo
contendere or its equivalent, shall not, of itself, create a presumption that
the person did not act in good faith and in a manner which he or she reasonably
believed to be in or not opposed to the best interests of the corporation or
its shareholders, or with respect to any criminal action or proceeding, that he
or she had reasonable cause to believe that his or her conduct was unlawful.
Persons who are not directors or officers of the corporation may be similarly
indemnified in respect of such service to the extent authorized at any time by
the Board of Directors, except as otherwise provided by statute or the Articles
of Incorporation.
SECTION 2. INDEMNIFICATION IN ACTIONS BY OR IN THE RIGHT OF THE
CORPORATION. Any person who was or is a party or is threatened to be made a
party to any threatened, pending or completed action or suit by or in the right
of the corporation to procure a judgment in its favor by reason of the fact
that he or she is or was a director or officer of the corporation, or, while
serving as such a director or officer, is or was serving at the request of the
corporation as a director, officer, partner, trustee, employee or agent of
another foreign or domestic corporation, partnership, joint venture, trust or
other enterprise, whether for profit or not, shall be indemnified by the
corporation against expenses (including attorneys' fees) and amounts paid in
settlement actually and reasonably incurred by him or her in connection with
the action or suit if he or she acted in good faith and in a manner he or she
reasonably believed to be in or not opposed to the best interests of the
corporation or its shareholders. Indemnification shall not be made for any
claim, issue or matter in which such person has been found liable to the
corporation except to the extent authorized in Section 6 of this Article.
Persons who are not directors or officers of the corporation may be similarly
indemnified in respect of such service to the extent authorized at any time by
the Board of Directors, except as otherwise provided by statute or the Articles
of Incorporation.
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SECTION 3. EXPENSES. To the extent that a director or officer,
or other person whose indemnification is authorized by the Board of Directors,
has been successful on the merits or otherwise, including the dismissal of an
action without prejudice, in the defense of any action, suit or proceeding
referred to in Section 1 or 2 of this Article, or in the defense of any claim,
issue or matter therein, he or she shall be indemnified against expenses
(including attorneys' fees) actually and reasonably incurred by him or her in
connection therewith and any action, suit or proceeding brought to enforce the
mandatory indemnification provided in this Section.
SECTION 4. AUTHORIZATION OF INDEMNIFICATION. Any
indemnification under Section 1 or 2 of this Article (unless ordered by a
court) shall be made by the corporation only as authorized in the specific case
upon a determination that indemnification is proper in the circumstances
because the person has met the applicable standard of conduct set forth in this
Article and upon an evaluation of the reasonableness of expenses and amounts
paid in settlement. Such determination shall be made (a) by the Board of
Directors by a majority vote of a quorum consisting of directors who are not
parties or threatened to be made parties to such action, suit or proceeding, or
if such a quorum cannot be obtained, by a majority vote of a committee duly
designated by the Board consisting solely of two or more directors not at the
time parties or threatened to be made parties to such action, suit or
proceeding; (b) by independent legal counsel (who may be the regular counsel of
the corporation) in a written opinion, which counsel shall be selected as
provided in (a) above, provided that if a committee cannot be designated as
provided in (a) above, then the Board shall select such independent counsel;
(c) by all Independent Directors (as that term is defined in the Michigan
Business Corporation Act) who are not parties or threatened to be made parties
to such action, suit or proceeding; or (d) by the shareholders, but shares held
by directors, officers, employees or agents who are parties or threatened to be
made parties to such action, suit or proceeding may not be voted. In
designating a committee under (a) above, or in the selection of independent
legal counsel in the event a committee cannot be designated pursuant to (b)
above, all directors may participate. The corporation may indemnify a person
for a portion of expenses (including reasonable attorneys' fees), judgments,
penalties, fees and amounts paid in settlement for which the person is entitled
to indemnification under Section 1 or 2 of this Article, even though the person
is not entitled to indemnification for the total amount of such expenses,
judgments, penalties, fees and amounts paid in settlement.
SECTION 5. ADVANCING OF EXPENSES. Expenses incurred by any
person who is or was serving as a director or officer of the corporation or a
subsidiary in defending a civil or criminal action, suit or proceeding
described in Section 1 or 2 of this Article shall be paid by the corporation in
advance of the final disposition of such action, suit or proceeding if (a) the
person furnishes the corporation a written affirmation of his or her good faith
belief that he or she has met the applicable standard of conduct set forth in
Section 1 or 2 of this Article; (b) the person furnishes the corporation a
written undertaking, executed personally or on his or her behalf, to repay the
advance if it is ultimately determined that he or she did not meet the
applicable standard of conduct; and (c) a determination is made that the facts
then known to those making the determination would not preclude indemnification
under the Michigan Business Corporation Act. Persons who are or were not
serving as a director or officer of the corporation or a subsidiary may receive
similar advances of expenses to the extent authorized at any time by the
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Board of Directors, except as otherwise provided by statute or the Articles of
Incorporation. Determinations under this Section shall be made in the manner
specified in Section 4 of this Article. Notwithstanding the foregoing, in no
event shall any advance be made in instances where the Board or independent
legal counsel reasonably determines that such person deliberately breached his
or her duty to the corporation or its shareholders.
SECTION 6. RIGHT TO INDEMNIFICATION UPON APPLICATION; PROCEDURE
UPON APPLICATION. A director, officer or other person who is a party or
threatened to be made a party to an action, suit or proceeding may apply for
indemnification to the court conducting the proceeding or to another court of
competent jurisdiction. On receipt of an application, the court may order
indemnification if it determines that the person is fairly and reasonably
entitled to indemnification in view of all the relevant circumstances, whether
or not he or she met the applicable standard of conduct set forth in Section 1
or 2 of this Article or was adjudged liable as described in Section 2 of this
Article, provided, however, that if he or she was adjudged liable, his or her
indemnification shall be limited to reasonable expenses incurred.
SECTION 7. INDEMNIFICATION UNDER BYLAWS NOT EXCLUSIVE. The
indemnification or advancement of expenses provided by this Article shall not
be deemed exclusive of any other rights to which those seeking indemnification
or advancement of expenses may be entitled under the Articles of Incorporation,
any bylaw, agreement, vote of shareholders or disinterested directors, or
otherwise, both as to action in his or her official capacity and as to action
in another capacity while holding such office, and shall continue as to a
person who has ceased to be a director, officer, employee or agent, and shall
inure to the benefit of the heirs, executors and administrators of such a
person. The total amount of expenses advanced or indemnified from all sources
shall not exceed the amount of actual expenses incurred by the person seeking
indemnification or advancement of expenses. All rights to indemnification
under this Article shall be deemed to be provided by a contract between the
corporation and the director, officer, employee or agent who serves in such
capacity at any time while these Bylaws and other relevant provisions of the
general corporation law and other applicable law, if any, are in effect. Any
repeal or modification thereof shall not affect any rights or obligations then
existing.
SECTION 8. INSURANCE. The corporation may purchase and maintain
insurance on behalf of any person who is or was a director, officer, employee
or agent of the corporation, or is or was serving at the request of the
corporation as a director, officer, partner, trustee, employee or agent of
another corporation, partnership, joint venture, trust or other enterprise
against any liability asserted against him or her and incurred by him or her in
any such capacity, or arising out of his or her status as such, whether or not
the corporation would have the power to indemnify him or her against such
liability under the provisions of this Article.
SECTION 9. MERGERS. For the purposes of this Article,
references to the "corporation" include all constituent corporations absorbed
in a consolidation or merger, as well as the resulting or surviving
corporation, so that any person who is or was a director, officer, employee or
agent of such constituent corporation, or is or was serving at the request of
such constituent corporation as a director, officer, partner, trustee, employee
or agent of another foreign or domestic
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corporation, partnership, joint venture, trust or other enterprise, whether for
profit or not, shall stand in the same position under the provisions of this
Article with respect to the resulting or surviving corporation as if he or she
had served the resulting or surviving corporation in the same capacity.
SECTION 10. SAVINGS CLAUSE. If this Article or any portion thereof
shall be invalidated on any ground by any court of competent jurisdiction, then
the corporation shall nevertheless indemnify each director, officer or other
person whose indemnification is authorized by the board of directors as to
expenses (including attorneys' fees), judgments, fees and amounts paid in
settlement with respect to any action, suit or proceeding, whether civil,
criminal, administrative or investigative, including a grand jury proceeding
and an action by the corporation, to the full extent permitted by any
applicable portion of this Article that shall not have been invalidated or by
any other applicable law.
ARTICLE IX.
SUBSIDIARIES
SECTION 1. SUBSIDIARIES. The Board of Directors or any officer
designated by the Board of Directors may vote the shares of stock owned by the
corporation in any subsidiary, whether wholly or partly owned by the
corporation, in such manner as the Board of Director or such officer deems in
the best interests of the corporation, including, without limitation, for the
election of directors of any subsidiary corporation, or for any amendments to
the charter or bylaws of any such subsidiary corporation, or for the
liquidation, merger or sale of assets of any such subsidiary corporation. The
Board of Directors or any officer designated by the Board of Directors may
cause to be elected to the Board of Directors of any such subsidiary
corporation such persons as they shall designate, any of whom may, but need not
be, directors, executive officers, or other employees or agents of the
corporation.
SECTION 2. SUBSIDIARY OFFICERS NOT EXECUTIVE OFFICERS. The
officers of any subsidiary corporation shall not, by virtue of holding such
title and position, be deemed to be executive officers of the corporation, nor
shall any such officer of a subsidiary corporation, unless he or she is also a
director or executive officer of the corporation, be entitled to have access to
any files, records or other information relating or pertaining to the
corporation, its business and finances, or to attend or receive the minutes of
any meetings of the Board of Directors or any committee of the corporation,
except as and to the extent expressly authorized and permitted by the Board of
Directors.
ARTICLE X.
CERTIFICATES OF STOCK
SECTION 1. FORM. Every holder of stock in the corporation shall
be entitled to have a certificate, signed by, or in the name of the corporation
by, the Chairman of the Board, a Vice
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Chairman of the Board, the President, an Executive Vice President, a Senior
Vice President, or a Vice President and the Treasurer, an Assistant Treasurer,
the Secretary or an Assistant Secretary of the corporation, certifying the
number of shares owned by him or her in the corporation. The certificate may
but need not be, sealed with the seal of the corporation, or a facsimile
thereof.
SECTION 2. FACSIMILE SIGNATURES. Where a certificate is signed
(a) by a transfer agent or an assistant transfer agent, or (b) by a transfer
clerk acting on behalf of the corporation and a registrar, the signatures of
the Chairman of the Board, Vice Chairman of the Board, President, Executive
Vice President, Senior Vice President, Vice President, Treasurer, Assistant
Treasurer, Secretary or Assistant Secretary may be facsimiles. In case any
officer(s) who has signed, or whose facsimile signature(s) has been used on,
any certificate shall cease to be such officer(s) before such certificate has
been delivered by the corporation, such certificate may nevertheless be issued
and delivered as though the person(s) who signed such certificate or whose
facsimile signature(s) appears thereon continued to be such officer(s).
SECTION 3. LOST CERTIFICATES. The officers may direct a new
certificate to be issued in place of any certificate theretofore issued by the
corporation alleged to have been lost, stolen or destroyed upon the making of
an affidavit of that fact by the person claiming the certificate of stock to be
lost, stolen or destroyed. When authorizing such issue of a new certificate or
certificates, the officers may, in their discretion and as a condition
precedent to the issuance thereof, require the owner of such lost, stolen or
destroyed certificate, or his or her legal representative, to advertise the
same in such manner as it shall require and/or to give the corporation a bond
in such sum as they may direct as indemnity against any claim that may be made
against the corporation with respect to the certificate alleged to have been
lost, stolen or destroyed.
SECTION 4. REGISTERED OWNER. The corporation shall be entitled
to recognize the exclusive rights of a person registered on its books as the
owner of shares to receive dividends and to vote as such owner, and to hold
liable for calls and assessments a person registered on its books as the owner
of shares; the corporation shall not be bound to recognize any equitable or
other claim to or interest in such share or shares on the part of any other
person, whether or not it shall have express or other notice thereof, except as
otherwise provided by the laws of Michigan.
ARTICLE XI.
GENERAL PROVISIONS
SECTION 1. CHECKS. Any signature on any check, demand or note
may be signed by the facsimile signature of any person authorized by the Board
of Directors to sign under this Section I of Article XI. If any officer who has
signed or whose facsimile signature has been used shall cease to be such
officer, such document may nevertheless be signed by means of such facsimile
signature and delivered as though the person who signed such document or whose
facsimile signature has been used thereon had not ceased to be such officer.
17
<PAGE> 18
SECTION 2. FISCAL YEAR. The fiscal year of the corporation
shall be the calendar year unless a different fiscal year is fixed by
resolution of the Board of Directors.
SECTION 3. SEAL. The corporate seal shall have inscribed
thereon the name of the corporation and the words "Corporate Seal Michigan."
The seal may be used by causing it or a facsimile thereof to be impressed,
affixed, reproduced or otherwise.
SECTION 4. VOTING SECURITIES. The Chief Executive Officer, the
President, or any officer designated by the board of directors shall have full
power and authority on behalf of the corporation to attend and to act and to
vote, or to execute in the name or on behalf of the corporation a proxy
authorizing an agent or attorney-in-fact for the corporation to attend and to
act and to vote, at any meetings of security holders of corporations in which
the corporation may hold securities, and at such meetings he or she and his or
her duly authorized agent or attorney-in-fact shall possess and may exercise
any and all rights and powers incident to the ownership of such securities and
which, as the owner thereof, the corporation might have possessed and exercised
if present.
SECTION 5. DIVIDENDS. Dividends upon the capital stock of the
corporation, subject to the provisions of the Articles of Incorporation, if
any, may be declared by the Board of Directors at any regular or special
meeting pursuant to law. Dividends may be paid in cash, in property, or in
shares of capital stock, subject to the provisions of the Articles of
Incorporation.
SECTION 6. RESERVES. Before payment of any dividends, there may be
set aside out of any funds of the corporation available for dividends such sum
or sums as the directors from time to time, in their absolute discretion, think
proper as a reserve or reserves to meet contingencies, or for equalizing
dividends, or for repairing or maintaining any property of the corporation, or
for such other purpose as the directors shall think conducive to the interests
of the corporation, and the directors may modify or abolish any such reserve in
the manner in which it was created.
ARTICLE XII.
AMENDMENTS
These Bylaws may be amended, altered, changed, added to or repealed by
the shareholders at any regular or special meeting of the shareholders if
notice of such action be contained in the notice of such meeting, or by the
Board of Directors at any regular or special meeting of the Board of Directors.
18
<PAGE> 1
EXHIBIT 4.1
COMMON STOCK COMMON STOCK
[BANK CORPORATION LOGO]
NUMBER COMMUNITY SHARES
CENTRAL BANK CORPORATION
CERTIFICATE IS TRANSFERABLE
IN BOSTON AND NEW YORK | |
SEE REVERSE FOR
CERTAIN DEFINITIONS
INCORPORATED UNDER THE LAWS OF THE STATE OF MICHIGAN
This certifies that
is the owner of
FULLY PAID AND NON-ASSESSABLE SHARES OF COMMON STOCK OF
COMMUNITY CENTRAL BANK CORPORATION
transferable only on the books of the Corporation in person or by attorney upon
surrender of this certificate properly endorsed. This certificate is issued by
the Corporation and accepted by the holder subject to all of the terms and
conditions contained in the Articles of Incorporation and By-Laws of the
Corporation and is not valid unless countersigned by the Transfer Agent.
Witness the facsimile seal of the Corporation and the facsimile signatures
of its duly authorized officers.
DATED:
<TABLE>
<S> <C> <C>
COUNTERSIGNED AND REGISTERED [COMMUNITY CENTRAL BANK CORPORATION FACSIMILE OF
STATE STREET BANK AND TRUST COMPANY SEAL] NEED SIGNATURE
(BOSTON)
TRANSFER AGENT AND REGISTRAR CHAIRMAN AND CHIEF EXECUTIVE OFFICER
BY: FACSIMILE OF
AUTHORIZED OFFICER NEED SIGNATURE
PRESIDENT
</TABLE>
<PAGE> 2
COMMUNITY CENTRAL BANK CORPORATION
The Corporation will furnish to each shareholder upon request and
without charge a full statement of the designation, relative rights,
preferences and limitations of the shares of each class of stock of this
Corporation authorized to be issued, the designation, relative rights,
preferences, and limitations of each series thereof so far as the same have
been prescribed and the authority of the Board of Directors of this Corporation
to designate and prescribe the relative rights, preferences and limitations of
other series.
The following abbreviations, when used in the inscription on the face
of this certificate, shall be construed as though they were written out in full
according to applicable laws or regulations:
<TABLE>
<S><C>
TEN COM - as tenants in common UNIF GIFT MIN ACT- _______________Custodian_____________
(Cust) (Minor)
TEN ENT - as tenants by the entireties under Uniform Gifts to Minors
JT TEN - as joint tenants with right of survivorship Act________________________________
and not as tenants in common (State)
Additional abbreviations may also be used though not in the above list.
For value received,_________________________________________________________hereby sell, assign and transfer unto
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
_______________________________________________
| |
|_____________________________________________|
_________________________________________________________________________________________________________________________________
_________________________________________________________________________________________________________________________________
(PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS, INCLUDING ZIP CODE, OF ASSIGNEE)
_________________________________________________________________________________________________________________________________
_________________________________________________________________________________________________________________________________
____________________________________________________________________________________________________________________________shares
of the common stock represented by the within Certificate, and do hereby irrevocably constitute and appoint
__________________________________________________________________________________________________________________________Attorney
to transfer the said stock on the books of the within named Corporation with full power of substitution in the premises.
Dated_________________________________
__________________________________________________________________
THE SIGNATURE TO THIS ASSIGNMENT MUST CORRESPOND WITH THE NAME AS
NOTICE: WRITTEN UPON THE FACE OF THE CERTIFICATE IN EVERY PARTICULAR
WITHOUT ALTERATION OR ENLARGEMENT OR ANY CHANGE WHATEVER.
</TABLE>
<PAGE> 1
[DICKINSON, WRIGHT, MOON, VAN DUSEN & FREEMAN-LETTERHEAD]
EXHIBIT 5
May 17, 1996
Securities and Exchange Commission
Judiciary Plaza
450 Fifth Street
Washington, D.C. 20549
RE: COMMUNITY CENTRAL BANK CORPORATION
Gentlemen:
We are acting as counsel to Community Central Bank Corporation, a
Michigan corporation (the"Company") in connection with the proposed issuance
and sale by the Company of shares of its common stock ("Common Stock"). The
Common Stock is described in a registration statement on Form SB-2 (the
"Registration Statement") being filed by the Company with the Securities and
Exchange Commission under the Securities Act of 1933, as amended.
Based upon our examination of such corporate records and other
documents and certificates as we deemed it necessary to examine, it is our
opinion that:
1. The Company is a corporation validly existing under
the laws of the State of Michigan; and
2. The Common Stock, when issued and sold by the
Company, will be legally issued, fully paid and
non-assessable.
We hereby consent to the use of this opinion as Exhibit 5 to the
Registration Statement and to the use of our firm name under the caption
"Legal Matters" in the related Prospectus.
Very Truly Yours,
/s/ Dickinson, Wright, Moon, Van Dusen & Freeman
------------------------------------------------
Dickinson, Wright, Moon, Van Dusen & Freeman
<PAGE> 1
Exhibit 10.1
COMMUNITY CENTRAL BANK CORPORATION
1996 EMPLOYEE STOCK OPTION PLAN
__________________________
As adopted by the Board of Directors
on May 14, 1996
__________________________
ARTICLE I - PURPOSE
The purpose of the 1996 Employee Stock Option Plan (the "Plan") of
Community Central Bank Corporation (the "Company") is to enable key employees
of the Company or any Subsidiary to participate in the Company's future growth
and profitability by offering them long-term performance-based incentive
compensation. The Plan also provides a means through which the Company and its
Subsidiaries can attract and retain key employees.
ARTICLE II - DEFINITIONS
2.1 The following terms have the meaning described below when used in the
Plan:
(a) "Board of Directors" shall mean the board of directors of the Company.
(b) "Code" shall mean the Internal Revenue Code of 1986, as amended, and
as it may be further amended from time to time.
(c) "Committee" shall mean the Stock Option Committee of the Board of
Directors.
(d) "Common Stock" shall mean the Common Stock of the Company.
(e) "Company" shall mean Community Central Bank Corporation.
<PAGE> 2
(f) "Fair Market Value" on a particular date shall mean (i) if the Common
Stock is quoted on the OTC Bulletin Board (the "Bulletin Board"), the mean
between the closing high bid and low asked quotations for such day (or, in the
event that the Common Stock was not quoted on such day, the most recent
preceding business day on which the Common Stock was quoted) of the Common
Stock on the Bulletin Board, (ii) if the Common Stock is quoted on The Nasdaq
Stock Market ("Nasdaq"), the mean between the closing high bid and low asked
quotations for such day of the Common Stock on Nasdaq, or (iii) if neither
clause (i) nor (ii) is applicable, a value determined by any fair and
reasonable means prescribed by the Committee.
(g) "Incentive Stock Option" shall mean a stock option granted under
Article VI that is intended to meet the requirements of Section 422 of the
Code.
(h) "Non-Qualified Stock Option" shall mean a stock option granted under
Article VI that is not intended to be an Incentive Stock Option.
(i) "Option" shall mean an Incentive Stock Option or Non-Qualified Stock
Option.
(j) "Participant" shall mean an eligible employee who has been granted an
Option.
(k) "Subsidiary" shall mean a corporation a majority of the outstanding
voting capital stock of which is owned by the Company.
ARTICLE III - ADMINISTRATION
3.1 Stock Option Committee. The Committee appointed by the Board of
Directors of the Company shall administer the Plan. The members of the
Committee shall be nonemployee directors who shall not be eligible to receive
an Option under the Plan. The Committee shall have full power and authority,
subject to such orders or resolutions not inconsistent with the provisions of
the Plan as may from time to time be issued or adopted by the Board of
Directors, to grant to eligible employees (as determined by the Committee)
Options under Article VI of the Plan, to interpret the provisions of the Plan
and any agreements relating to Options granted under the Plan and to supervise
the administration of the Plan. In making determinations of eligibility for
the Plan, the Committee may consider the position and responsibilities of the
employee, the nature and value of his or her services and accomplishments, the
present and potential contribution of the employee to the success of the
Company, and such other factors as the Committee may deem relevant.
(b) Decisions of Committee. All decisions made by the Committee pursuant
to the provisions of the Plan and related resolutions of the Board of Directors
shall be final, conclusive and binding on all persons, including the Company,
its shareholders and employees, and beneficiaries of employees.
- 2 -
<PAGE> 3
ARTICLE IV - SHARES SUBJECT TO THE PLAN
4.1 (a) Number of Shares. Subject to adjustment as provided for in
Section 4.1(b), the maximum number of shares of Common Stock with respect to
which Options may be granted shall be 40,000 shares of Common Stock. Shares of
Common Stock shall be made available from the authorized but unissued shares of
the Company (including shares reacquired by the Company). If an Option granted
under the Plan shall expire or terminate for any reason, the shares subject to,
but not delivered, under such Option shall be available for other Options to be
issued under the Plan.
(b) Adjustments. All as may be deemed appropriate by the Committee, the
aggregate number of shares of Common Stock which may be issued under the Plan,
the number of shares covered by each outstanding Option, and the price per
share in each Option, may be proportionately adjusted for any increase or
decrease in the number of issued shares of Common Stock of the Company
resulting from a subdivision or consolidation of shares or any other capital
adjustment, a stock split, the payment of a stock dividend, or other increase
or decrease in such shares effected without receipt of consideration by the
Company.
ARTICLE V - ELIGIBILITY
5.1 The persons eligible to participate in the Plan and receive Options
under the Plan are officers and other key employees of the Company and its
Subsidiaries, including directors who are full time employees, as determined by
the Committee.
ARTICLE VI - STOCK OPTIONS
6.1 Grant of Options. Subject to the limitations of the Plan, the
Committee, after such consultation with and consideration of the
recommendations of management or the Board of Directors as the Committee
considers desirable, shall select from eligible employees Participants to be
granted Options and determine the time when each Option shall be granted and
the number of shares subject to each Option. Options may be either Incentive
Stock Options or Non-Qualified Stock Options. More than one Option may be
granted to the same person. The Committee may not grant a Participant
Incentive Stock Options which in the aggregate are first exercisable during any
one calendar year with respect to Common Stock the aggregate Fair Market Value
of which (determined as of the time of grant) exceeds $100,000.
- 3 -
<PAGE> 4
6.2 Option Agreements. Each Option under the Plan shall be evidenced by
an option agreement that shall be signed by an officer of the Company and the
Participant and shall contain such provisions as may be approved by the
Committee. Any such option agreement may be amended from time to time as
approved by the Committee and the Participant, provided that the terms of such
option agreement after being amended conform to the terms of the Plan.
6.3 Option Price. The price at which shares of Common Stock may be
purchased upon exercise of an Option shall be not less than one hundred percent
(100%) of the Fair Market Value of such shares on the date such Option is
granted.
6.4 Exercise of Options.
(a) The period during which each Option may be exercised shall be fixed by
the Committee at the time such Option is granted, but such period in no event
shall expire later than ten (10) years from the date the Option is granted.
(b) Subject to the terms and conditions of the option agreement and unless
canceled prior to exercise, each Option shall be exercisable in whole or in
part in installments at such time or times as the Committee may prescribe and
specify in the applicable option agreement.
(c) No shares shall be delivered pursuant to any exercise of an Option
until payment in full of the option price therefor is received by the Company.
Such payment shall be made in cash or through the delivery of shares of Common
Stock of the Company with a value equal to the total option price or a
combination of cash and shares. Any shares so delivered shall be valued at
their Fair Market Value on the exercise date. No Participant shall be deemed
to be a holder of any shares subject to any Option prior to the issuance of
such shares upon exercise of such Option.
6.5 Ten-Percent Shareholder Rule. If a Participant owns more than ten
percent (10%) of the total combined voting power of all classes of the Company
or of any Subsidiary's stock at the time an Incentive Stock Option is granted
to such Participant, the option price to such Participant shall not be less
than one hundred ten percent (110%) of the Fair Market Value per share of the
Common Stock on the date of grant, and such Incentive Stock Option by its terms
shall not be exercisable after the expiration of five (5) years from the date
of grant.
6.6 Non-Transferability of Options. No Option or any rights with respect
thereto shall be subject to any debts or liabilities of a Participant, nor be
assignable or transferable
- 4 -
<PAGE> 5
except by Will or the laws of descent and distribution, nor be exercisable
during the Participant's lifetime other than by the Participant, nor shall
Common Stock be issued to or in the name of one other than the Participant;
provided, however, that an Option may after the death or disability of a
Participant be exercised pursuant to Section 6.7; and provided further than
any Common Stock issued to a Participant hereunder may at the request of the
Participant be issued in the names of the Participant and one other person, as
joint tenants with right of survivorship and not as tenants in common, or in
the name of a trust for the benefit of the Participant or for the benefit of
the Participant and others.
6.7 Termination of Employment; Death and Disability. Subject to the
condition that no Option may be exercised in whole or in part after the
expiration of the option period specified in the applicable option agreement:
(a) Except as hereinafter provided, an Option may be exercised by the
Participant only while such Participant is in the employ of the Company or a
Subsidiary. In the event that the employment of a Participant to whom an
Option has been granted under the Plan shall terminate (except as set forth
below) such Option may be exercised, to the extent that the Option was
exercisable on the date of termination of employment, only until the earlier of
three (3) months after such termination or the original expiration date of the
Option; provided, however, that if termination of employment results from death
or total and permanent disability, such three (3) month period shall be
extended to twelve (12) months.
(b) In the event of the permanent disability of a Participant as
determined by the Committee, an Option which is otherwise exercisable may be
exercised by the Participant's legal representative or guardian. In the event
of the death of the Participant, an Option which is otherwise exercisable may
be exercised by the person or persons whom the Participant shall have
designated in writing on forms prescribed by and filed with the Committee
("Beneficiaries"), or, if no such designation has been made, by the person or
persons to whom the Participant's rights shall have passed by Will or the laws
of descent and distribution ("Successors"). The Committee may require an
indemnity and/or such evidence or other assurances as the Committee in its sole
and absolute discretion may deem necessary in connection with an exercise by a
legal representative, guardian, Beneficiary or Successor.
ARTICLE VII - GENERAL PROVISIONS
7.1 Change in Control.
(a) In the case of a Change in Control (as defined below) of the Company,
unless the Committee determines otherwise, each Option then outstanding shall
become exercisable in full immediately prior to such Change in Control.
- 5 -
<PAGE> 6
(b) Any determination by the Committee made pursuant to subsection (a)
above may be made as to all outstanding Options or only as to certain Options
specified by the Committee and any such determinations shall be made in cases
covered by subparagraphs 7.1(c)(i) and (ii) below prior to or as soon as
practicable after the occurrence of such event and in the cases covered by
subparagraphs 7.1(c)(iii) or (iv) prior to the occurrence of such event.
(c) A Change in Control shall occur if:
(i) Any "person" or "group of persons" as such terms are defined in
Section 13(d) and 14(c) of the Securities Exchange Act of 1934 (the "Exchange
Act") directly or indirectly purchases or otherwise becomes the "beneficial
owner" (as defined in the Exchange Act) or has the right to acquire such
beneficial ownership (whether or not such right is exercised immediately, with
the passage of time or subject to any condition) of voting securities
representing forty percent (40%) or more of the combined voting power of all
outstanding voting securities of the Company,
(ii) During any period of two consecutive calendar years the individuals
who at the beginning of such period constitute the Board of Directors cease for
any reason to constitute at least the majority of the members thereof unless
(1) there are five or more directors then still in office who were directors at
the beginning of the period and (2) the election or the nomination for election
by the Company's shareholders of each new director was approved by at least
two-thirds (2/3) of the directors then still in office who were directors at
the beginning of the period,
(iii) The shareholders of the Company shall approve an agreement to merge
or consolidate the Company with or into another corporation as a result of
which less than fifty percent (50%) of the outstanding voting securities of the
surviving or resulting entity are or are to be owned by the former shareholders
of the Company (excluding from former shareholders a shareholder who is or as a
result of the transaction in question, becomes an "affiliate" as defined in
Rule 12b-2 under the Exchange Act of any party to such consolidation or
merger), or
(iv) The shareholders of the Company shall approve the sale of all or
substantially all of the Company's business and/or assets to a person or entity
that is not a wholly-owned subsidiary of the Company.
7.2 No Right of Continued Employment. Neither the establishment of the
Plan, the granting of Options or any action of the Company or of the Board of
Directors or of the Committee shall be held or construed to confer upon any
person any legal right to be continued in the employ of the Company or its
Subsidiaries, each of which expressly reserves the right to discharge any
employee whenever the interest of any such company in its sole discretion may
so require without liability to such company, the Board of Directors or the
- 6 -
<PAGE> 7
Committee except as to any rights that may be expressly conferred upon such
employee under the Plan.
7.3 No Segregation of Cash or Shares. The Company shall not be required
to segregate any shares of Common Stock that may at any time be represented by
Options, and the Plan shall constitute an "unfunded" plan of the Company. No
employee shall have rights with respect to shares of Common Stock prior to the
delivery of such shares. The Company shall not, by any provisions of the Plan,
be deemed to be a trustee of any Common Stock or any other property and the
liabilities of the Company to any employee pursuant to the Plan shall be those
of a debtor pursuant to such contract obligations as are created by or pursuant
to the Plan, and the rights of any employee, former employee or beneficiary
under the Plan shall be limited to those of a general creditor of the Company.
7.4 Delivery of Shares. No shares shall be delivered pursuant to any
exercise of an Option under the Plan unless the requirements of such laws and
regulations as may be deemed by the Committee to be applicable thereto are
satisfied. All certificates for shares of Common Stock delivered under the
Plan shall be subject to such stock-transfer orders and other restrictions as
the Committee may deem advisable under the rules, regulations, and other
requirements of the Securities and Exchange Commission, any stock exchange upon
which the Common Stock is then listed, and any applicable Federal or state
securities law, and the Committee may cause a legend or legends to be put on
any such certificates to make appropriate reference to such restrictions.
7.5 Governing Law. The Plan and all determinations made and action taken
pursuant thereto shall be governed by the laws of the State of Michigan and
construed in accordance therewith.
7.6 Payments and Tax Withholding. The delivery of any shares of Common
Stock under the Plan shall be for the account of the Company and any such
delivery or distribution shall not be made until the recipient shall have made
satisfactory arrangements for the payment of any applicable withholding taxes.
ARTICLE VIII - AMENDMENT AND TERMINATION
8.1 Amendment or Termination. The Board of Directors may amend or
terminate the Plan provided, however, that no such amendment or termination
shall adversely affect any Option then in effect unless the prior approval of
the Participant so affected is obtained and provided further that any amendment
to the Plan shall be subject to shareholder
- 7 -
<PAGE> 8
approval to the extent necessary to satisfy the requirements of Section 16
under the Exchange Act.
ARTICLE IX - EFFECTIVENESS OF PLAN
9.1 The Plan was adopted by the Board of Directors on May 14, 1996 subject
to the approval by the sole shareholder of the Company and was approved by such
shareholder on May 14, 1996.
ARTICLE X - SEVERABILITY
10.1 If any provision of the Plan, or any term or condition of any Option
granted thereunder, is invalid, such provision, term, condition or application
shall to that extent be void (or, in the discretion of the Board of Directors,
such provision, term or condition may be amended so as to avoid such invalidity
or failure), and shall not affect other provisions, terms or conditions or
applications thereof, and to this extent such provisions, terms and conditions
are severable.
- 8 -
<PAGE> 1
Exhibit 10.2
COMMUNITY CENTRAL BANK CORPORATION
1996 STOCK OPTION PLAN FOR NONEMPLOYEE DIRECTORS
___________________________
As adopted by the Board of Directors
on May 14, 1996
___________________________
SECTION 1. PURPOSE
The purpose of this Community Central Bank Corporation 1996 Stock Option
Plan for Nonemployee Directors ("Plan") is to increase the proprietary interest
of the Nonemployee Directors in the success of Community Central Bank
Corporation ("Corporation") and to enhance the Corporation's ability to retain
and attract experienced and knowledgeable directors.
SECTION 2. DEFINITION OF SELECTED TERMS
In addition to the definitions of certain words and phrases that are
provided in various sections of this Plan, the following terms when used herein
shall have the meanings set forth below.
(a) "Affiliate(s)" shall mean those corporations a majority of the
outstanding voting capital stock of which is directly or indirectly
owned by the Corporation.
(b) "Annual Meeting" shall mean an annual meeting of the
shareholders of the Corporation at which one or more members of the
Board of Directors are elected, held in 1997, 1998 or 1999.
(c) "Board of Directors" shall mean the Board of Directors of the
Corporation.
(d) "Fair Market Value per Share" on a particular date shall mean
(i) if the common stock is quoted on the OTC Bulletin Board (the
"Bulletin Board"), the mean between the closing high bid and low
asked quotations for
<PAGE> 2
such day (or, in the event that the common stock was not quoted
on such day, the most recent preceding business day on which the
common stock was quoted) of the common stock on the Bulletin
Board, (ii) if the common stock is quoted on The Nasdaq Stock
Market ("Nasdaq"), the mean between the closing high bid and low
asked quotations for such day of the common stock on Nasdaq, or
(iii) if neither clause (i) nor (ii) is applicable, a value
determined by any fair and reasonable means prescribed by the
Committee.
(e) "Internal Revenue Code" shall mean the Internal Revenue Code
of 1986, as amended.
(f) "Nonemployee Director(s)" shall mean those directors of the
Corporation who are not employees of the Corporation or any
Affiliate.
(g) "Option" shall mean an option granted to a Nonemployee
Director under this Plan.
(h) "Optionee" means any person to whom an Option has been granted
or who becomes a holder of an Option under the provisions of this
Plan.
SECTION 3. ADMINISTRATION
This Plan shall be administered by a committee appointed by at least a
majority of the Board of Directors (the "Committee"). The amount, nature, and
timing of Options shall be automatic, as described in Section 6, and not
subject to the determination of the Committee. The Committee may, subject to
the provisions of this Plan, establish such rules and regulations as it deems
necessary or advisable for the proper administration of this Plan, and may make
determinations and may take such other action in connection with or in
relation to this Plan as it deems necessary or advisable. Each determination
or other action made or taken by the Committee pursuant to this Plan, including
interpretations of this Plan, shall be final and conclusive for all purposes
and upon all persons, including, but without limitation, the Corporation, its
Affiliates, the Board of Directors, the affected Nonemployee Directors, and
their respective successors in interest. The Committee shall not be empowered
to take any action, whether or not otherwise authorized under this Plan, that
would result in any Nonemployee Director failing to qualify as a "disinterested
person", as defined in Rule 16b-3 (as in effect on the date hereof and as may
be amended during the term of this Plan) of the rules and regulations
promulgated by the Securities and Exchange Commission pursuant to its authority
granted under the Securities Exchange Act of 1934 ("Rule 16b-3").
-2-
<PAGE> 3
SECTION 4. STOCK SUBJECT TO THIS PLAN
The Stock to be issued under this Plan shall be shares of common stock of
the Corporation ("Stock"). The Stock shall be made available from authorized
but unissued shares (including shares acquired in the open market). The total
number of shares of Stock that may be issued under this Plan pursuant to
Options granted hereunder shall be 40,000. Such number of shares shall be
subject to adjustment in accordance with Section 10 hereof. Stock subject to
any unexercised portion of an Option which expires, is cancelled, or is
terminated for any reason, may again be subject to the grant of Options under
this Plan.
SECTION 5. ELIGIBILITY
Each Nonemployee Director is eligible to participate in this Plan.
Options are automatically granted to Nonemployee Directors as provided for
herein.
SECTION 6. GRANT AND EXERCISE OF OPTION
(a) Automatic Option Grants. As of June 1, 1996, each Nonemployee
Director shall be granted one Option to purchase 4,000 shares of Stock.
Nonemployee Directors who are appointed or elected after June 1, 1996 will
receive an Option for a lesser number of shares, the number of which will
depend on which annual meeting is the first annual meeting occurring
concurrently with, or after he or she becomes a Nonemployee Director, as set
forth in the table below:
<TABLE>
<CAPTION>
The Nonemployee Director's
If the Nonemployee Director's Option will be for the
First Annual Meeting is the: Following Number of Shares:
----------------------------- ---------------------------
<S> <C>
1997 Annual Meeting 3,000
1998 Annual Meeting 2,000
1999 Annual Meeting 1,000
</TABLE>
(b) Schedule Under Which Options Become Fully Exercisable. Each Option
granted under the Plan shall be immediately exercisable for 1,000 shares of
Stock. Each Option will become exercisable for an additional 1,000 shares of
Stock as of the date of each successive Annual Meeting, until it is exercisable
in full.
(c) Option Price. The Option price of each share of Stock purchasable
under an Option shall be the Fair Market Value per Share on the date of grant.
(d) Option Agreement. Each Option granted under this Plan shall be
evidenced by a stock option agreement ("Stock Option Agreement") that
is duly executed
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<PAGE> 4
on behalf of the Corporation and by the Nonemployee Director to whom the Option
is granted. Each Stock Option Agreement shall be subject to the terms and
conditions of this Plan and in such form, not inconsistent with this Plan, as
the Board of Directors or the Committee shall from time to time approve.
Appropriate officers of the Corporation are hereby authorized to execute and
deliver Stock Option Agreements on behalf of the Corporation.
(e) Manner of Exercise. Any Option (subject to Section 6(b)) may be
exercised from time to time, in whole, or in part in minimum installments
of 500 shares, by giving written notice to the Corporation, signed by the
person exercising the Option, stating the number of shares of Stock with
respect to which the Option is being exercised, accompanied by payment of the
full consideration for the shares as to which the Option is being exercised, in
one or a combination of the following alternative forms: (i) cash, or (ii)
shares of Stock already owned by the person exercising the Option, valued at
the Fair Market Value per Share of Stock on the date of exercise.
(f) Expiration of Options. The unexercised portion of each Option shall
automatically and without notice expire and become null and void at the time of
the earliest to occur of the following:
(i) the expiration of seven years from the date the Option was
granted;
(ii) the expiration of three months after the Optionee ceases to be
a Nonemployee Director, other than by reason of permanent
disability (as defined in Section 22(e)(3) of the Internal Revenue
Code), death, or for cause;
(iii) the expiration of one year following the death or permanent
disability (as defined in Section 22(e)(3) of the Internal Revenue
Code) of the Optionee; or
(iv) the termination of the Optionee's service as a Nonemployee
Director, if such termination is for cause (the Committee or the
Board of Directors shall have the right to determine what
constitutes cause, and such determination shall be conclusive and
binding for all purposes).
(g) Options are Nonqualified. Each Option granted under this
Plan shall be a nonqualified stock option which does not qualify as an
incentive stock option within the meaning of Section 422 of the Internal
Revenue Code.
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<PAGE> 5
SECTION 7. NONTRANSFERABILITY OF OPTIONS
No Option shall be transferable otherwise than by will or by the laws of
descent and distribution or pursuant to a qualified domestic relations order as
defined by the Internal Revenue Code or Title I of the Employee Retirement
Income Security Act, or the rules thereunder. During the lifetime of an
Optionee, the Option shall be exercisable only by the Optionee personally or by
the Optionee's legal representative.
SECTION 8. NO RIGHT TO CONTINUE AS DIRECTOR
Neither this Plan nor the granting of an Option, nor any other action
taken pursuant to this Plan shall constitute or be evidence of any agreement or
understanding, express or implied, that the Board of Directors will nominate
any director for re-election, or that the Corporation will retain a director
for any period of time, or at any particular rate of compensation.
SECTION 9. RIGHTS AS A SHAREHOLDER
An Optionee or a transferee of an Option pursuant to Section 7 shall have
no rights as a Shareholder with respect to any Stock that is the subject of
either an unexercised or exercised Option until the Optionee or such transferee
shall have become the holder of record of such Stock, and no adjustments shall
be made for dividends in cash or other property or other distributions or
rights in respect of such Stock for which the record date is prior to the date
on which the Optionee or such transferee shall have in fact become the holder
of record of the Stock acquired pursuant to the Option.
SECTION 10. ADJUSTMENT IN THE NUMBER OF SHARES AND IN OPTION PRICE
In the event there is any change in the number of shares of Stock through
the declaration of stock dividends or stock splits or through recapitalization
or merger or consolidation or combination of shares or otherwise, the Committee
or the Board of Directors shall make such adjustment, if any, as it may deem
appropriate in the number of shares of Stock available for Options as well as
the number of shares of Stock subject to any outstanding Options, the option
price thereof and any other terms it deems appropriate. Any such adjustment
may provide for the elimination of any fractional shares which might otherwise
become subject to any Option without payment therefor. The grant of Options
under this Plan shall not affect the right of the Corporation to adjust,
reclassify, reorganize or otherwise change its capital or business structure or
to merge, consolidate, dissolve, liquidate or sell or transfer all or any part
of its business or assets.
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<PAGE> 6
SECTION 11. USE OF PROCEEDS
The cash proceeds received by the Corporation from the issuance of shares
pursuant to Options under this Plan shall be used for general corporate
purposes.
SECTION 12. TAX WITHHOLDING
The delivery of any shares of Common Stock under the Plan shall be for the
account of the Company and any such delivery or distribution shall not be made
until the recipient shall have made satisfactory arrangements for the payment
of any applicable withholding taxes.
SECTION 13. EFFECTIVE DATE AND TERM OF THIS PLAN
(a) This Plan shall become effective on June 1, 1996, provided that the
holders of a majority of all of the shares of the Corporation's Stock issued
and outstanding shall, by vote at a meeting of shareholders duly called and
held or by written consent, have approved this Plan.
(b) Unless previously terminated in accordance with Section 14 of this Plan,
this Plan shall terminate at the close of business on April 30, 2000, after
which no Options shall be granted under this Plan. Such termination shall not
affect any Options granted prior to such termination.
SECTION 14. AMENDMENT, SUSPENSION OR TERMINATION OF THIS PLAN
The Board of Directors may, from time to time, terminate or suspend this
Plan, in whole or in part, or amend this Plan from time to time, including the
adoption of amendments deemed necessary or desirable to qualify the Options
under rules and regulations promulgated by the Securities and Exchange
Commission with respect to directors who are subject to the provisions of
Section 16 of the Securities Exchange Act of 1934 (the "Act"), or to correct
any defect or supply any omission or reconcile any inconsistency in this Plan
or in any Option granted hereunder, without the approval of the Shareholders of
the Corporation; except that no such action may be taken which would: (i)
materially increase the benefits accruing to participants under this Plan,
materially increase the number of securities which may be issued under this
Plan (except as permitted in Section 10), or materially modify the eligibility
requirements for participation in this Plan, (ii) cause any Nonemployee
Director to not qualify as a "disinterested person" as defined in Rule 16b-3,
(iii) cause this Plan not to satisfy all applicable requirements of Rule 16b-3,
or (iv) impair the rights of any Optionee under any Option previously granted
under this Plan without the Optionee's consent. In no event shall any
provision of this Plan dealing with persons who are designated to receive
grants or awards, the amount or price of
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<PAGE> 7
securities to be granted or awarded, or the timing of grants or awards, be
amended more than once every six months, other than to comport with changes in
the Internal Revenue Code, the Employee Retirement Income Security Act, or the
rules thereunder.
SECTION 15. LIMITATION ON ISSUE OR TRANSFER OF SHARES
Notwithstanding any provisions of this Plan or the terms of any Option,
the Corporation shall not be required to issue any shares of Stock or transfer
on its books and records any shares of Stock if such issue or transfer would,
in the judgment of the Committee or of counsel for the Corporation, constitute
a violation of any state or Federal law, or of the rules or regulations of any
governmental regulatory body, or any securities exchange or automated dealer
quotation system. An Optionee desiring to exercise an Option may be required
by the Corporation, as a condition of the effectiveness of any exercise of an
Option, to agree in writing that all securities to be acquired pursuant to such
exercise shall be held for his or her account without a view to any further
distribution thereof, that the certificates for such shares shall bear an
appropriate legend to that effect, and that such shares will not be transferred
or disposed of except in compliance with applicable federal and state
securities laws.
SECTION 16. CHANGE IN CONTROL
(a) In the case of a Change in Control (as defined below) of the
Corporation, unless the Committee determines otherwise, each Option then
outstanding shall become exercisable in full immediately prior to such Change
in Control.
(b) Any determination by the Committee made pursuant to this Section may
be made as to all outstanding Options or only as to certain Options specified
by the Committee and any such determinations shall be made in cases covered by
subparagraphs 16(c)(i) and (ii) below prior to or as soon as practicable after
the occurrence of such event and in the cases covered by subparagraphs
16(c)(iii) or (iv) prior to the occurrence of such event.
(c) A Change in Control shall occur if:
(i) Any "person" or "group of persons" as such terms are defined in
Section 13(d) and 14(c) of the Act directly or indirectly purchases or
otherwise becomes the "beneficial owner" (as defined in the Act) or has the
right to acquire such beneficial ownership (whether or not such right is
exercised immediately, with the passage of time or subject to any condition) of
voting securities representing forty percent (40%) or more of the combined
voting power of all outstanding voting securities of the Corporation,
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<PAGE> 8
(ii) During any period of two consecutive years the individuals who at the
beginning of such period constitute the Board of Directors cease or any reason
to constitute at least the majority of the members thereof unless (1) there are
five or more directors then still in office who were directors at the beginning
of the period and (2) the election or the nomination for election by the
Corporation's shareholders of each new director was approved by at least
two-thirds (2/3) of the directors then still in office who were directors at
the beginning of the period,
(iii) The shareholders of the Corporation shall approve an agreement to
merge or consolidate the Corporation with or into another corporation as a
result of which less than fifty percent (50%) of the outstanding voting
securities of the surviving or resulting entity are or are to be owned by the
former shareholders of the Corporation (excluding from former shareholders a
shareholder who is or as a result of the transaction in question, becomes an
"affiliate" as defined in Rule 12b-2 under the Act of any party to such
consolidation or merger), or
(iv) The shareholders of the Corporation shall approve the sale of all or
substantially all of the Corporation's business and/or assets to a person or
entity that is not a wholly-owned subsidiary of the Corporation.
SECTION 17. NO SEGREGATION OF CASH OR SHARES
The Corporation shall not be required to segregate any shares of Stock
that may at any time be represented by Options, and the Plan shall constitute
an "unfunded" plan of the Corporation. No employee shall have rights with
respect to shares of Stock prior to the delivery of such shares. The
Corporation shall not, by any provisions of the Plan, be deemed to be a trustee
of any Stock or any other property and the liabilities of the Corporation to
any employee pursuant to the Plan shall be those of a debtor pursuant to such
contract obligations as are created by or pursuant to the Plan, and the rights
of any employee, former employee or beneficiary under the Plan shall be limited
to those of a general creditor of the Corporation.
SECTION 18. DELIVERY OF SHARES
No shares shall be delivered pursuant to any exercise of an Option under
the Plan unless the requirements of such laws and regulations as may be deemed
by the Committee to be applicable thereto are satisfied. All certificates for
shares of Stock delivered under the Plan shall be subject to such
stock-transfer orders and other restrictions as the Committee may deem
advisable under the rules, regulations, and other requirements of the
Securities and Exchange Commission, any stock exchange upon which the Stock is
then listed, and any applicable Federal or state securities law, and the
committee may cause a legend or legends to be put on any such certificates to
make appropriate reference to such restrictions.
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<PAGE> 9
SECTION 19. GOVERNING LAW
This Plan and all determinations made and actions taken pursuant thereto
shall be governed by the laws of the State of Michigan and construed in
accordance therewith.
SECTION 20. SEVERABILITY
If any provision of the Plan, or any term or condition of any Option
granted thereunder, is invalid, such provision, term, condition or application
shall to that extent be void (or, in the discretion of the Board of Directors,
such provision, term or condition may be amended so as to avoid such invalidity
or failure), and shall not affect other provisions, terms or conditions or
applications thereof, and to this extent such provisions, terms and conditions
are severable.
-9-
<PAGE> 1
EXHIBIT 10.3
LEASE AGREEMENT
This Lease, made this 16th day of May, 1996, by and between T.A.P.
PROPERTIES, L.L.C., a Michigan Limited Liability Company ("Landlord"), whose
address is 79 Macomb Place, Mount Clemens, Michigan 48043 and Community Central
Bank, a state banking corporation ("Tenant"), whose address is 100 North Main
St., Mount Clemens, Michigan 48043.
W I T N E S S E T H:
1. DESCRIPTION OF PREMISES. Landlord, for and in consideration
of the rents to be paid and the covenants and agreements to be performed by
Tenant, does hereby lease to Tenant premises situated in the City of Mount
Clemens, Macomb County, Michigan, more particularly described as:
The Building whose address is 100 N. Main Street containing
approximately 9,824 square feet and the parking and ingress and egress
areas adjacent thereto ("Leased Premises") situated on the parcel of
real estate located at the northeast corner of Main Street and Market
Street ("Development"). The Leased Premises and Development are both
more particularly described on the Site Plan by Civic Engineering
attached hereto as Exhibit "A." The Leased Premises both includes and
is subject to the right to use the ingress and egress areas of the
Development in common with other tenants thereof.
2. TERM AND DELIVERY OF POSSESSION. The commencement date of
this Lease is the date appearing in the introductory paragraph hereto and
possession of the Leased Premises shall be delivered to Tenant on that date.
The term of this Lease for purposes of Tenant's rental obligation shall be
fifteen (15) years ("Rental Period"). The Rental Period shall commencement on
the earlier of November 1, 1996 or the date Tenant completes the improvements
to the Leased Premises provided in the immediately succeeding paragraph. The
expiration of the term shall be at 11:59 P.M. on the last date of the 180th
month after the Rental Period commences provided however that in the event the
Rental Period commences on a date other than the first day of a calendar month,
the termination date shall be extended to 11:59 P.M. on the last day of the
next month and Tenant shall be liable for a prorata rental payment during the
initial partial month in accordance with the terms of the rent paragraph
hereof.
3. CONSTRUCTION. The Leased Premises are being delivered to
Tenant in an "as is" condition. Tenant has inspected the Leased Premises and
is satisfied with its condition as of the date of delivery. Landlord and
Tenant have undertaken the preparation of detailed plans and specifications
("Plans") for the construction of the Leased Premises. The Plans are
identified as follows:
James Debard, Architect
Job No. 9558 dated 2-24-96
Sheets SP-1
A-1 through 11
S-1 & 2
M-2 & 2
E-1 through 3
HVAC print to be provided
<PAGE> 2
and are incorporated herein by reference. Tenant shall renovate the building
located on the Leased Premises in accordance with the Plans. Tenant shall
undertake its construction obligations in accordance with all applicable
building codes and other governmental regulations regulating the same.
Landlord shall have access to the Leased Premises to inspect and satisfy itself
that Tenant is complying with its construction duties and responsibilities.
4. LANDLORD'S CONTRIBUTION TO CONSTRUCTION. Landlord will
contribute the maximum sum of One Million ($1,000,000.00) Dollars for
construction costs for the Leased Premises including land and site
improvements, preparation of the Plans, engineering, development and other
related expenses. To the extent that completion of the Leased Premises
pursuant to the Plans exceeds One Million ($1,000,000.00) Dollars, Tenant shall
be responsible for those excess obligations. All disbursements of Landlord's
construction contribution shall be made pursuant to the requirements of
Landlord's lender who is financing the Development.
5. RENT. Tenant shall and hereby agrees to pay Landlord as fixed
rent for the Leased Premises, the sum of Two Million Five Hundred Fifty Nine
Thousand Three Hundred Seventy Five ($2,559,375.00) Dollars to be paid monthly
in advance upon commencement of the Rental Period as follows:
<TABLE>
<CAPTION>
Monthly
Lease Year Gross Annual Rent Installment
---------- ----------------- -----------
<S> <C> <C>
Year One $120,000.00 $10,000.00
Year Two $135,000.00 $11,250.00
Years Three thru Five $450,000.00 $12,500.00
Years Six thru Ten $862,500.00 $14,375.00
Years Eleven thru Fifteen $991,875.00 $16,531.25
</TABLE>
without any prior demand therefor and without any deduction or set-off
whatsoever in lawful money of the United States, on the 1st day of each and
every calendar month during the term of this Lease, at the offices of the
Landlord, or at such other place as Landlord may designate in writing from time
to time. Any installment of rent due or accruing hereunder and any other sum,
whether termed rent or otherwise and payable hereunder by Tenant to Landlord
which is not paid when due, shall bear interest at the rate of ten (10%)
percent per annum from the date when the same shall respectively become payable
until the same is paid. Time is of the essence of this Lease.
6. USE AND OCCUPANCY. During the term of this Lease the Leased
Premises shall be used for the following purposes and for no other purpose
whatsoever: banking and related financial services. Tenant agrees to keep the
Leased Premises in accordance with all police, sanitary and other regulations
imposed by any governmental authority, and to observe all reasonable
regulations and requirements of underwriters concerning the use and condition
of the Leased Premises tending to reduce fire hazards and insurance rates.
Tenant shall not perform any act or carry on any practice which may injure the
Leased Premises or the Development or which will be a nuisance, disturbance or
menace to the
2
<PAGE> 3
other tenants in the Development. Tenant shall keep the Leased Premises in
good repair and order and shall at all times maintain the same in a neat, clean
and sanitary condition and at the expiration of the term hereof shall surrender
the Leased Premises in good order, repair and condition.
7. UTILITIES AND SERVICES. Tenant is responsible for all charges
made against the Leased Premises for gas, water, heat, sanitation, electricity,
janitorial, snow removal and similar items, during the term of the Lease and
shall pay the same as they become due. To the extent that any such services
are billed directly to Landlord by the entity providing the same, Tenant shall
pay the same upon presentation by Landlord of invoices therefor.
8. ALTERATIONS. Except pursuant to the Plans, Tenant agrees that
the Leased Premises shall not be altered, improved or changed without prior
written consent of Landlord. All alterations, improvements and changes which
may be approved by Landlord shall be made at such times and in such manner as
Landlord may reasonably designate and shall be done either by or under the
direction of Landlord, but at the cost of Tenant. All alterations,
improvements and changes except movable office furniture installed at the
expense of the Tenant and removable without defacing or injuring the
Development or Leased Premises, shall, unless otherwise provided by written
agreement, be the property of Landlord, and remain upon and be surrendered with
the Leased Premises; provided however, that Landlord may designate by written
notice to Tenant those alterations, improvements and changes which shall be
removed by Tenant at the expiration of this Lease and Tenant shall promptly
remove the same and repair any damage to the Leased Premises caused by such
removal. All damage or injury done to the Leased Premises by the Tenant, or by
any person who may be in or upon the premises with the consent, invitation or
license of Tenant, shall be paid for by Tenant.
9. REPAIRS AND MAINTENANCE BY TENANT. Tenant agrees at its own
expense to keep the Leased Premises and every part thereof, including
specifically but not by way of limitation, roof and outer walls, heating,
cooling, mechanical, plumbing, electrical systems, parking areas, including
ingress and egress areas, pedestrian sidewalks, landscaping and planting areas,
lighting facilities and all other facilities and improvements in good repair
and at the expiration of the term, yield and deliver up the same in like
condition as when taken, reasonable wear and tear thereof excepted. Tenant
shall not undertake any roof repairs without first obtaining approval therefor
from Landlord. If use of the original roofing contractor is required to
maintain the original warranty on the roof, the original roof contractor shall
be utilized provided that that contractor will undertake the repairs at a
competitive price. Tenant shall obtain a service contract for the heating and
cooling system with a contractor acceptable to Landlord and shall provide
Landlord with a copy of said service contract. All such repairs and
maintenance shall be in quality and class equal to the original work or
installations. If Tenant fails to make such repairs and maintenance, they may
be made by Landlord at the expense of Tenant and shall be paid for by Tenant
within ten (10) days after rendition of an invoice therefor by Landlord.
3
<PAGE> 4
10. LANDLORD'S OPTION REGARDING PARKING LOT AND LANDSCAPE AREAS.
Landlord reserves the right to undertake the repair and maintenance
responsibilities for areas of the Leased Premises outside of the building
located thereon, including but not limited to, the parking lot, sidewalks and
landscaped areas or any portion thereof. If Landlord exercises this option,
Tenant shall pay Landlord the cost of repairs and maintenance undertaken by
Landlord, plus an administration fee calculated at the market rate within ten
(10) days after rendition of an invoice therefor by Landlord.
11. ADDITIONAL RENTALS. Tenant shall and agrees to pay as
additional rentals the real estate taxes and assessments and insurance premiums
for hazard, fire, casualty, liability and other insurance with respect to the
Leased Premises during the term hereof. To the extent that said charges are
billed to and paid by Landlord, Tenant shall reimburse Landlord for said
additional rentals within ten (10) days of presentation of invoices therefor.
The following provisions apply to these obligations:
A. Real Estate Taxes and Assessments. In the event the
State of Michigan or any political subdivision thereof having taxing authority
shall substitute a franchise tax, transfer tax or net income tax for or in
place of said real estate taxes and assessments, said substitution shall not
relieve Tenant of its liability as provided herein and said substituted tax
shall determine Tenant's liability hereunder.
B. Development Common Charges. In the event charges are
incurred with respect to the Development which benefit all tenants thereof,
each tenant of the Development including Tenant shall pay its prorata portion
of said common expenses. Tenant's prorata share shall be equal to the product
obtained by multiplying said Development common expenses by a fraction, the
numerator of which shall be the number of square feet of the Leased Premises
and the denominator of which shall be the number of square feet of the
Development.
12. RULES AND REGULATIONS. Landlord reserves the right from time
to time to promulgate rules and regulations for the Development which shall
apply equally to all tenants therein. Tenant covenants and agrees that Tenant,
its agents, employees, visitors and licensees shall comply with those rules and
regulations if and when promulgated by Landlord.
13. INDEMNIFICATION AND INSURANCE. Tenant shall indemnify
Landlord and save Landlord harmless from any and all liability, claims and
expense for damages to any person or property in, or on the Leased Premises
from any cause whatsoever. Tenant shall, during the entire term of this Lease
keep in full force and effect the following insurance coverage:
A. Public liability and property damage insurance with
respect to the Leased Premises and the business operated by Tenant therein with
underlying limits of not less than $500,000.00 per occurrence, $1,000,000.00
aggregate, $500,000.00 personal and advertising injury, $1,000,000.00 aggregate
for products and umbrella coverage of not less than $1,000,000.00 each
occurrence and $1,000,000.00 aggregate.
4
<PAGE> 5
B. All risk and hazard insurance including standard
extended coverage, vandalism, malicious mischief and theft endorsements in an
amount equal to the full replacement cost of the Leased Premises which shall
include business income insurance in an amount equal to 100% of the annual rent
due hereunder by Tenant not to be terminated by the expiration of the policy.
This insurance shall be written with a company with an A.M. Best rating of not
less than A+ in the insurance industry and shall name Landlord as an additional
insured. Tenant shall furnish Landlord with copies of said policies or
certificates of insurance therefor or otherwise acceptable evidence that such
insurance is in full force at all times during the term hereof. In the event
Tenant shall fail to procure such insurance, Landlord may at its option procure
the same for the account of Tenant and the cost thereof shall be paid to
Landlord by Tenant immediately upon receipt by Tenant of a statement from
Landlord for the cost thereof.
14. LOSS AND DAMAGE. Tenant agrees that all property kept, stored
or maintained in the Leased Premises or in or around the Development shall be
kept, stored and maintained at the risk of Tenant only. Landlord shall not be
liable for any loss of or damage to any such property from any cause whatsoever
including water or other substance which may leak, issue or flow from any part
of the Development, or by or from the plumbing, gas, steam, sewerage, electric
or water lines, pipes or conduits or from theft, fire or other accident or
casualty or from any other damage otherwise occurring or resulting. Landlord
shall not be liable for any latent defects, structural or otherwise, in
construction, condition, lack of repair or proper operation of the Leased
Premises or the Development or any machinery, equipment or facility therein.
It is further agreed that Landlord shall not be liable for any accident or
casualty arising from acts of other tenants or occupants of the Development,
their agents, employees, invitees or licensees or from any default of Tenant or
any unauthorized acts of Landlord's employees.
15. ASSIGNMENT AND SUBLETTING. Tenant covenants not to assign or
transfer this Lease or hypothecate or mortgage the same or sublet the Leased
Premises or any part thereof or use or permit them to be used for any purpose
other than above mentioned, without the prior written consent of Landlord which
consent shall not be unreasonably withheld. Consent by Landlord to one or more
assignments of this Lease or to one or more sublettings of the Leased Premises
shall not be deemed to be a waiver of the requirement for consent of Landlord
for any future assignments or subletting. In the event Tenant, with or without
the previous consent of Landlord, does assign or in any manner transfer this
Lease or any interest therein, Tenant shall in no way be released from any of
its obligations under this Lease.
16. DAMAGE BY CASUALTY. In the event the Leased Premises or other
parts of the Development are damaged by fire or other casualty, Landlord,
unless it elects to terminate this Lease as provided hereafter, shall repair
the damage with reasonable dispatch after notice thereof. The source of funds
for the repair shall be proceeds from the insurance maintained by Tenant
pursuant to Paragraph 13 A. hereof. The proceeds
5
<PAGE> 6
shall be devoted first to repair of any leasehold improvements which were built
with Landlord's contribution under Paragraph 4 hereof. Repair by Landlord for
any damage caused by carelessness, negligence or improper conduct of Tenant,
its agents, employees, visitors or licensees shall not prejudice any right of
Landlord or its insurer.
If the Leased Premises is so damaged by fire or other casualty
that they are untenantable but are, nevertheless, repaired by Landlord, the rent
shall be adjusted proportionately for the time during which and the extent to
which the Leased Premises may have been untenantable. If such repairs are
delayed because of Tenant's failure to adjust Tenant's own insurance claim or
because of Tenant's failure to remove its damaged property, no reduction shall
be made beyond a reasonable time allowed for such adjustment or removal.
If the fire or casualty to the Leased Premises is caused by
carelessness, negligence, or improper conduct by Tenant, or its agents,
employees, visitors or licensees, then, notwithstanding such damage, Tenant
shall be liable for the rent, during the unexpired portion of the term of this
Lease, without abatement, unless Landlord elects to terminate this Lease as
provided hereafter.
Landlord shall not be obligated to rebuild or reconstruct the
Leased Premises if the fire or other casualty occurs within three (3) years of
the expiration of the Lease term. If Landlord elects not to rebuild Landlord
shall deliver to Tenant a notice specifying a date for termination of the Lease
as if that date had been originally fixed as the expiration of the term of this
Lease and the rent shall be adjusted as of the time of the occurrence of such
fire or other casualty.
Landlord and Tenant do hereby release and discharge the other
party and any officer, agent, employee or representative of such party of and
from any liability whatsoever hereafter arising from loss, damage or injury
caused by fire or other casualty for which insurance (permitting waiver of
liability and containing a waiver of subrogation) is carried by the injured
party at the time of such loss, damage or injury to the extent of any recovery
by the injured party under such insurance.
17. ACCESS TO PREMISES. Tenant shall permit Landlord, its agents
and employees, to have reasonable access to the Leased Premises during regular
business hours to inspect the same, to exhibit the Leased Premises to
prospective tenants during the last three (3) months of the lease term and
during all holdover periods, and for other reasonable purposes, provided,
however, neither Landlord nor Landlord's agents or employees shall be entitled
if such access would compromise security for the Leased Premises, nor shall
they have access to any area of the Leased Premises which would compromise
Tenant's obligation to maintain the confidentiality of customer information.
18. EMINENT DOMAIN. If the whole or any substantial part of the
Leased Premises or the Development shall be taken by or conveyed to any public
authority under the power of eminent domain, then the term of this Lease shall
cease on the part so taken or conveyed on the date possession
6
<PAGE> 7
aof that part shall be required for public use, and any rent paid in advance of
such date shall be refunded to Tenant, and Landlord and Tenant shall each have
the right to terminate this Lease upon written notice to the other, which
notice shall be delivered within ninety (90) days following the date notice is
received of such taking. In the event that neither Party hereto shall
terminate this Lease during said 90-day period, Landlord shall make all repairs
to the Leased Premises and the Development which are necessary to render and
restore the same to a complete architectural unit of like quality and character
as existed just prior to such taking, and Tenant shall continue in possession
of the portion of the Leased Premises not taken under the power of eminent
domain, under the same terms and conditions as are herein provided, except that
the rent reserved herein shall be reduced in direct proportion to the amount of
the Leased Premises so taken, and/or if a portion of the Development is taken,
in proportion to the diminution in utility resulting rom such taking. All
damages awarded for such taking or conveyance shall belong to and be the
property of Landlord, whether such damages be awarded as compensation for
diminution in value of the leasehold or to the fee of the Leased Premises;
provided, however, Landlord shall not be entitled to any portion of any award
which compensates Tenant for the unamortized portion of the expenses for
improvements to the Leased Premises (but exclusive of those expenses paid by
Landlord pursuant to Paragraph 4 of this Lease, which shall belong to
Landlord), or for the removal and reinstallation of fixtures, loss of business
or moving expenses.
19. DEFAULT OF TENANT. In the event of any failure of Tenant to
pay any rental or other charges due hereunder within five (5) bank working days
after written notice of non-payment, or any failure to perform any other of the
terms, conditions or covenants of this Lease to be observed or performed by
Tenant for more than thirty (30) days after written notice of such de fault
shall have been mailed to Tenant, or if Tenant shall abandon said premises, or
permit this Lease to be taken under any writ of execution, then the Landlord,
besides other rights or remedies it may have, shall have the right to declare
this Lease terminated and/or shall have the immediate right of re-entry and may
remove all persons and property from the Leased Premises and such property may
be removed or stored in a public warehouse or elsewhere at the cost of, and
for the account of Tenant, without evidence of notice or resort to legal
process and without being deemed guilty of trespass, or becoming liable for any
loss or damage which may be occasioned thereby.
Should Landlord elect to re-enter or take possession pursuant
to legal proceedings or any notice provided for Landlord, Landlord may either
terminate this Lease or from time to time, without terminating this Lease relet
the premises or any part thereof on such terms and conditions as Landlord shall
in its reasonable discretion deem advisable. The proceeds of such reletting
shall be applied: first to the payment of any indebtedness of Tenant to
Landlord other than rent due hereunder; second, to the payment of any
reasonable costs of such reletting, including the cost of any reasonable
alterations and repairs to the premises; third, to the payment of rent due and
unpaid hereunder; and the residue, if any, shall be held by Landlord and
applied in payment of
7
<PAGE> 8
future rent as the same may become due and payable hereunder. Should the
proceeds of such reletting during any month be less than the monthly rent
reserved hereunder, then Tenant shall during each such month pay such
deficiency to Landlord.
All rights and remedies of Landlord specified above and
elsewhere in this Lease shall be cumulative and none shall exclude another or
any other right of remedy allowed by law, and such rights and remedies may be
exercised concurrently. Reasonable attorney fees and expenses shall be awarded
to the prevailing party in the event of any litigation to enforce the
obligations of the opposite party under this Lease.
Notwithstanding any other provisions contained in this Lease,
in the event (a) Tenant or its successors or assigns shall become insolvent or
bankrupt, or if it or their interests under this Lease shall be levied upon or
sold under execution or other legal process, or (b) the depository institution
then operating on the Leased Premises is closed, or is taken over by any
depository institution supervisory authority ("Authority"), Landlord may, in
either such event, terminate this Lease only with the concurrence of any
Receiver or Liquidator appointed by such Authority; provided that in the event
this Lease is terminated by the Receiver or Liquidator, the maximum claim of
Landlord for rent, damages or indemnity for injury resulting from the
termination, rejection or abandonment of the unexpired Lease shall by law in no
event be in an amount equal to all accrued and unpaid rent to the date of
termination.
20. BANKRUPTCY. In the event the estate created hereby shall be
taken in execution or by other process of law, or if Tenant shall be
adjudicated insolvent or bankrupt pursuant to the provisions of any state or
federal insolvency or bankruptcy law, or if a receiver or trustee of the
property of Tenant shall be appointed by reason of Tenant's insolvency or
inability to pay its debts, or if any assignment shall be made of Tenant's
property for the benefit of creditors, then and in any such events, Landlord
may terminate this Lease by written notice to Tenant; provided, however, if the
order of court creating any of such disabilities shall not be final by reason
of pendency of such proceedings, or appeal from such order, then Landlord shall
not have the right to terminate this Lease so long as Tenant performs its
obligations hereunder.
21. WAIVER. The waiver by Landlord of any agreement, condition or
provision herein contained shall not be deemed to be a waiver of any subsequent
breach of the same or any other agreement, condition or provision hereof, nor
shall any custom or practice which may develop between the parties in the
administration of the terms hereof be construed to waive or lessen the right of
Landlord to insist upon the performance by Tenant in strict accordance with
said terms. The subsequent acceptance of rental hereunder by Landlord shall
not be deemed to be a waiver of any preceding breach by Tenant of any
agreement, condition or provision of this Lease other than the failure of
Tenant to pay the particular rental so accepted regardless of Landlord's
knowledge of such preceding breach at the time of acceptance of such rental.
8
<PAGE> 9
22. SUBORDINATION. Landlord reserves the right to subject and
subordinate this Lease at all times to the lien of any mortgage or mortgages
now or hereafter placed on the Development and/or Leased Premises and to all
advances made or hereafter to be made upon the security thereof, provided,
however, such subordination shall be upon the express condition that the
validity of this Lease shall be recognized by the mortgagee, and that,
notwithstanding any default by the mortgagor with respect to said mortgage or
any foreclosure thereof, Tenant's possession and right of use under this Lease
in and to the Leased Premises shall not be disturbed by such mortgagee unless
and until Tenant shall breach any of the provisions hereof, and this Lease or
Tenant's right to possession hereunder shall have been terminated in accordance
with the provisions of this Lease. To effectuate the same, Tenant will execute
and deliver an appropriate instrument or instruments subordinating this Lease
to the lien of any such mortgage or mortgages upon request by any mortgagee or
proposed mortgagee. In the event Landlord's interest in the premises shall be
mortgaged and transferred by foreclosure of such mortgage or deed in lieu
thereof, Landlord's interest shall not be merged with the fee so as to release
Tenant hereunder and in the event of any such merger by operation of law, this
Lease shall not terminate and Tenant shall attorn to such owner.
23. HOLDING OVER. It is hereby agreed that in the event Tenant
holds over after the termination of this Lease, the tenancy shall be from month
to month but for no longer period and shall be subject to all the terms and
conditions of this Lease except that the rental to be paid by Tenant during
said hold-over period shall be a rental equal to double the highest rate at any
time payable during the term of this Lease unless Landlord and Tenant agree to
another rent during said hold-over period. In the event such new rent is
agreed to by Landlord and Tenant said new rent shall be binding only if
contained in writing signed by both of the parties.
24. TENANT'S ACCEPTANCE LETTER. Tenant agrees within ten (10)
days after request therefor by Landlord to execute in recordable form and
deliver to Landlord for Landlord's mortgagee a statement in writing certifying
(a) that this Lease is in full force and effect, (b) the dates of commencement
and expiration of the term of this Lease, (c) that rent is paid currently
without any off-set or defense thereto, (d) the amount of rent, if any, paid in
advance, (e) that there are no uncured defaults by Landlord or, a statement of
any uncured defaults claimed by Tenant, and (f) any other necessary information
requested by said mortgagee.
25. NOTICES. Any bill, statement, notice, communication or
payment which Landlord or Tenant may desire will be required to give to the
other party shall be in writing and shall be sent to the other party addressed
as follows:
Landlord: Tenant:
T.A.P. PROPERTIES, L.L.C. Community Central Bank
79 Macomb Place 100 North Main St.
Mount Clemens, MI 48043 Mount Clemens, MI 48043
9
<PAGE> 10
or at such other address as either party shall have designated to the other,
and the time of the rendition or receipt of such shall be the time when he same
is deposited with an official United States Post Office, postage and fees fully
prepaid thereon for first class mail.
26. ADVERTISEMENTS. Tenant shall not erect or install any signs
or advertising media which does not comply with the requirements of the local
municipality. Tenant agrees not to use any advertising media that shall be
deemed objectionable to Landlord, or other tenants of the Development, such as
loudspeakers or phonographs in a manner to be heard outside the Leased
Premises. Tenant is responsible for obtaining any municipal approvals required
in connection with said advertising.
27. QUIET ENJOYMENT. Upon payment by Tenant of the rents and
other charges due hereunder, and upon the observance and performance of all
covenants, terms and conditions on Tenant's part to be observed and performed,
Tenant shall peaceably and quietly hold and enjoy the Leased Premises for the
term hereby demised without hinderance or interruptions by Landlord or any
other person or persons lawfully or equitably claiming by, through or under
Landlord, subject however to the terms and conditions of this Lease.
28. ATTORNMENT. In the event any proceedings are brought for the
foreclosure of or in the event of exercise of the power of sale under any
mortgage made by Landlord covering the Leased Premises, Tenant shall, at the
option and request of the holder of said mortgage, attorn to said holder upon
any such foreclosure or sale and recognize said holder as the Landlord under
this Lease.
29. LIABILITY OF LANDLORD. If Landlord shall fail to perform any
covenant, term or condition of this Lease upon Landlord's part to be performed,
and if as a consequence of such default Tenant shall recover a money judgment
against Landlord, such judgment shall be satisfied only out of the proceeds of
sale received upon execution of such judgment and levied thereon against the
right, title and interest of Landlord in the Development and land of which the
Leased Premises are a part and out of rents or other income from such property
receivable by Landlord, and neither Landlord nor any of the co-partners
comprising the partnership which is the Landlord herein shall be liable for any
deficiency.
30. TRANSFER OF LANDLORD'S INTEREST. In the event of any transfer
or transfers of Landlord's interest in this Lease or the Development or land,
the transferor shall be automatically relieved of any and all obligations and
liabilities on the part of Landlord accruing from and after the date of such
transfer.
31. MORTGAGEE PROTECTION CLAUSE. Tenant agrees to give any
Mortgagees by Registered Mail, a copy of any Notice of Default served upon
Landlord, provided that prior to such notice Tenant has been notified, in
writing, (by way of Notice of Assignment of Rents and Leases, or otherwise) of
the address of such Mortgagees. Tenant further agrees that if Landlord shall
have failed to cure such default within the time provided for in this Lease,
then the Mortgagees shall have an
10
<PAGE> 11
additional thirty (30) days within which to cure such default or if such
default cannot be cured within that time, then such additional time as may be
necessary if within such thirty (30) days, any Mortgagee has commenced and is
diligently pursuing the remedies necessary to cure such default, (including but
not limited to commencement of foreclosure proceedings, if necessary to effect
such cure) in which event this Lease shall not be terminated while such
remedies are being so diligently pursued.
32. ENTIRE AGREEMENT AND CONTROLLING LAW. This Lease shall
constitute the entire agreement of the parties hereto. All prior agreements
between the parties, whether written or oral, are merged herein and shall be of
no force and effect. This Lease cannot be changed, modified, or discharged
except by an agreement in writing, signed by the party against whom enforcement
of the change, modification or discharge is sought. This Lease shall be
governed by and construed in accordance with the laws of the State of Michigan.
If any provision of this Lease or the application thereof to any person or
circumstances shall, to any extent, be invalid or unenforceable, the remainder
of this Lease shall not be affected thereby and each provision of the Lease
shall be valid and enforceable to the fullest extent permitted by the law.
IN WITNESS WHEREOF, Landlord and Tenant have signed and sealed this
Lease on the day and date first above written.
Landlord:
T.A.P. PROPERTIES, L.L.C.
a Michigan Limited Liability Company
Marge Murphy By: Gebran Anton
-------------------------------- ----------------------------------
Witness
Tenant:
COMMUNITY CENTRAL BANK,
a state banking corporation
Marge Murphy By: Richard J. Miller
-------------------------------- ----------------------------------
Witness
11
<PAGE> 1
EXHIBIT 21
SUBSIDIARIES OF THE REGISTRANT
Community Central Bank, a Michigan banking corporation, is in the
process of being organized and will become a subsidiary of the Company.
<PAGE> 1
EXHIBIT 23.2
Independent Auditors' Consent
We consent to the use in this Registration Statement of Central Community Bank
Corporation (the "Company") on Form SB-2 of our report dated May 8, 1996 on the
financial statements for the period ended May 8, 1996 appearing in this
Registration Statement. We also consent to the reference to us under the
heading "Experts", and to the incorporation by reference of this consent into
any Rule 462(b) registration statement of the Company that incorporates by
reference this Registration Statement.
/s/ Plante & Moran, LLP
--------------------------
Bloomfield Hills, Michigan
May 17, 1996
<TABLE> <S> <C>
<ARTICLE> 9
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM AUDITED
FINANCIAL STATEMENT DATED MAY 8, 1996
</LEGEND>
<S> <C>
<PERIOD-TYPE> OTHER
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> APR-26-1996
<PERIOD-END> MAY-08-1996
<CASH> 12,535
<INT-BEARING-DEPOSITS> 0
<FED-FUNDS-SOLD> 0
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 0
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<LOANS> 0
<ALLOWANCE> 0
<TOTAL-ASSETS> 53,000
<DEPOSITS> 0
<SHORT-TERM> 0
<LIABILITIES-OTHER> 53,000
<LONG-TERM> 0
0
0
<COMMON> 0
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<TOTAL-LIABILITIES-AND-EQUITY> 53,000
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