FORSYTH BANCSHARES INC, DEF 14A, 2000-04-20

FORSYTH BANCSHARES INC
DEF 14A, 2000-04-20
STATE COMMERCIAL BANKS

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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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SCHEDULE 14A
PROXY STATEMENT PURSUANT TO SECTION 14(A)
OF THE SECURITIES EXCHANGE ACT OF 1934
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Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:

[ ] Preliminary Proxy Statement

[ ] CONFIDENTIAL, FOR USE OF THE COMMISSION ONLY (AS PERMITTED BY RULE
14A-6(E)(2))
[X] Definitive Proxy Statement

[ ] Definitive Additional Materials

[ ] Soliciting Material Pursuant to 240.14a-11(c) or 240.14a-12

FORSYTH BANCSHARES, INC.
(Name of Registrant as Specified in its Charter)

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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
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2) Aggregate number of securities to which transaction applies:
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3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which
the filing fee is calculated and state how it was determined):
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4) Proposed maximum aggregate value of transaction:
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5) Total fee paid:
--------------------------------------------------------------------

[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting
fee was paid previously.Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.

1) Amount Previously Paid:
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2) Form, Schedule or Registration Statement No.:
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3) Filing Party:
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4) Date Filed:
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<PAGE>
Forsyth Bancshares, Inc.
P.O. Box 2820
Cumming, Georgia 30028
770-886-9500

April 21, 2000
TO OUR SHAREHOLDERS:

You are cordially invited to attend the 2000 Annual Meeting of Shareholders
of Forsyth Bancshares, Inc., which will be held at the Sawnee Community Center
on Tuesday, May 16, 2000 at 10:00 a.m., local time.

At the Annual Meeting, you will be asked to consider and vote upon (i) the
election of seventeen (17) directors to serve until the Annual Meeting of
Shareholders in 2001 and until their successors are elected and qualified; (ii)
the adoption and approval of a Long Term Incentive Plan for selected employees
of the Company's bank subsidiary, The Citizens Bank of Forsyth County; and (iii)
such other matters as may properly come before the Annual Meeting or any
reconvened meeting following any adjournment thereof.

Enclosed are the Notice of Annual Meeting, Proxy Statement, Proxy and 1999
Annual Report to Shareholders. We are proud of our progress and we encourage
you to review carefully our Annual Report.

We hope you can attend the Annual Meeting of Shareholders and vote your
shares in person. In any case, please complete the enclosed Proxy and return it
to us. Your completion of the Proxy will ensure that your preferences will be
expressed on the matters that are being considered. If you deliver a completed
proxy, but you are able to attend the Annual Meeting, you may revoke your Proxy
and re-cast your votes by voting in person at the Annual Meeting or by following
the revocation procedures described in the accompanying Proxy Statement.

If you have any questions about the Proxy Statement or our Annual Report,
please contact us.

Sincerely,

/s/ James J. Myers
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James J. Myers
Chairman of the Board

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<PAGE>
FORSYTH BANCSHARES, INC.
P.O. BOX 2820
CUMMING, GEORGIA 30028
770-886-9500

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS

TO BE HELD ON TUESDAY, MAY 16, 2000

NOTICE IS HEREBY GIVEN that the 2000 Annual Meeting of Shareholders of
Forsyth Bancshares, Inc. (the "Company") will be held at the Sawnee Community
Center, located at 1090 Tribble Gap Road, Cumming, Georgia 30040 on Tuesday, May
16, 2000, at 10:00 a.m., local time (the "Annual Meeting"), for the following
purposes:

1. To consider and vote upon the election of seventeen (17) directors to
serve until the Annual Meeting of Shareholders in 2001 and until their
successors have been duly elected and qualified.

2. To consider and vote upon a Long Term Incentive Plan for selected
employees of the Company's bank subsidiary, The Citizens Bank of
Forsyth County.

3. To transact such other business as may properly come before the Annual
Meeting and any adjournments or postponements thereof.

Only shareholders of record at the close of business on April 10, 2000, are
entitled to notice of, and to vote at, the Annual Meeting. A complete list of
shareholders entitled to vote at the Annual Meeting will be available at the
Annual Meeting.

By Order of the Board of Directors,

/s/ Timothy M. Perry
-------------------------------
TIMOTHY M. PERRY
President and Chief Executive Officer

Cumming, Georgia
April 21, 2000

YOU ARE URGED TO COMPLETE, SIGN, DATE AND RETURN YOUR PROXY PROMPTLY IN THE
ENVELOPE PROVIDED SO THAT YOUR SHARES WILL BE VOTED IN ACCORDANCE WITH YOUR
WISHES. RETURNING YOUR PROXY DOES NOT DEPRIVE YOU OF YOUR RIGHT TO ATTEND THE
MEETING AND VOTE YOUR SHARES IN PERSON.

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<PAGE>
FORSYTH BANCSHARES, INC.
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PROXY STATEMENT
FOR ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 16, 2000
----------------------------

INTRODUCTION
GENERAL

This Proxy Statement is being furnished to the shareholders of Forsyth
Bancshares, Inc. (the "Company") in connection with the solicitation by the
Company of proxies for use at the Company's 2000 Annual Meeting of Shareholders
to be held at Sawnee Community Center, located at 1090 Tribble Gap Road,
Cumming, Georgia 30040, on Tuesday, May 16, 2000, and at any postponements or
adjournments thereof (the "Annual Meeting").

The Annual Meeting is being held to consider and vote upon (i) the election
of seventeen (17) directors to serve until the Annual Meeting of Shareholders in
2001 and until their successors are elected and qualified; (ii) the approval of
a Long Term Incentive Compensation Plan for selected employees of the Company's
bank subsidiary, The Citizens Bank of Forsyth County; and (iii) such other
matters as may properly come before the Annual Meeting. The Board of Directors
of the Company knows of no other business that will be presented for
consideration at the Annual Meeting other than the matters described in this
Proxy Statement. This proxy solicitation is being made by the Company.

The Company's 1999 Annual Report to Shareholders, including financial
statements for the fiscal year ended December 31, 1999, accompanies this Proxy
Statement. These materials are first being mailed to the shareholders of the
Company on or about April 21, 2000.

RECORD DATE, SOLICITATION AND REVOCABILITY OF PROXIES

The Company's Board of Directors has fixed April 10, 2000 as the record
date (the "Record Date") for the determination of the Company's shareholders
entitled to notice of, and to vote at, the Annual Meeting. Accordingly, only
shareholders of the Company on the Record Date will be entitled to vote at the
Annual Meeting. On the Record Date, there were 800,000 shares of the no par
value common stock of the Company ("Common Stock" or "Shares") issued and
outstanding and held by approximately 620 holders of record.

Holders of Common Stock are entitled to one vote on each matter considered
and voted upon at the Annual Meeting for each Share of Common Stock held of
record on the Record Date. Shares of Common Stock represented by a properly
executed proxy, if such proxy is received in time and not revoked, will be voted
at the Annual Meeting in accordance with the instructions indicated in such
proxy. IF NO INSTRUCTIONS ARE INDICATED, SUCH SHARES OF COMMON STOCK WILL BE
VOTED "FOR" ELECTION OF ALL SEVENTEEN NOMINEES FOR DIRECTOR NAMED IN THE PROXY
STATEMENT AND IN THE DISCRETION OF THE PROXY HOLDERS AS TO ANY OTHER BUSINESS
PROPERLY BROUGHT BEFORE THE ANNUAL MEETING.

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<PAGE>
A shareholder who gives a proxy may revoke it at any time prior to its
exercise at the Annual Meeting by (i) giving written notice of revocation to the
Secretary of the Company, at Forsyth Bancshares, Inc., 501 Tri-County Plaza,
Cumming, Georgia 30040, (ii) properly submitting to the Company a duly executed
proxy bearing a later date to P.O. Box 2820, Cumming, Georgia 30028, or (iii)
appearing in person at the Annual Meeting and voting in person.

The approval of each proposal set forth in this Proxy Statement requires
that a quorum be present at the Annual Meeting. The presence, in person or by
properly executed proxy, of the holders of a majority of the outstanding Shares
entitled to vote at the Annual Meeting is necessary to constitute a quorum.
Each shareholder is entitled to one vote on each proposal per Share held as of
the Record Date. In the event that a quorum is not represented in person or by
proxy at the Annual Meeting, a majority of Shares represented at that time may
adjourn the Annual Meeting to allow the solicitation of additional proxies or
other measures to obtain a quorum.

PROPOSAL ONE - ELECTION OF DIRECTORS

NOMINEES

The Bylaws of the Company provide that the Board of Directors of the
Company shall consist of members who shall be subject to re-election each year.
The directors are elected by the shareholders for a term of one year and until
their successors are elected and qualified. The term of office of directors
expires each year at the Annual Meeting of Shareholders, and a new class of
directors is elected or re-elected by the shareholders each year at that time.

At the Annual Meeting, the terms of Catherine M. Amos, Jeffrey S. Bagley,
Danny M. Bennett, Michael P. Bennett, Bryan L. Bettis, Talmadge W. Bolton,
Thomas L. Bower III, Charles R. Castleberry, Charles D. Ingram, Herbert A. Lang,
Jr., John P. McGruder, James J. Myers, Danny L. Reid, Charles R. Smith, Wyatt L.
Willingham and Jerry M. Wood will expire, and the Board of Directors has
nominated each of these 16 individuals to stand for re-election as directors at
the Annual Meeting. During 1999, David H. Denton resigned as a member of the
Board of Directors. The Company has nominated Timothy M. Perry, the Company's
President and Chief Executive Officer, to replace Mr. Denton as a member of the
Board of Directors. If elected by the shareholders, each of the nominees will
serve a one year term which will expire at the Annual Meeting of Shareholders in
2001.

THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS VOTE "FOR"
THE PROPOSAL TO ELECT ALL OF THE NOMINEES FOR ELECTION AS DIRECTORS.

If any of the nominees should be unavailable to serve for any reason (which
is not anticipated), the Board of Directors may designate a substitute nominee
or nominees (in which case the persons named as proxies on the enclosed proxy
card will vote the Shares represented by all valid proxy cards for the election
of such substitute nominee or nominees), allow the vacancy or vacancies to
remain open until a suitable candidate or candidates are located, or by
resolution provide for a lesser number of directors.

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VOTE REQUIRED

This Proposal requires approval by a "plurality" of the votes cast by the
Shares entitled to vote in the election. This means that Proposal One will be
approved only if the holders of a majority of the Shares entitled to vote and
voting at the Annual Meeting vote in favor of Proposal One. With respect to
Proposal One, abstentions and "broker non-votes" will be counted as Shares
present for purposes of determining the presence of a quorum. However, neither
abstentions nor "broker non-votes" will be counted as votes cast for purposes of
determining whether a particular proposal has received sufficient votes for
approval. A "broker non-vote" occurs when a nominee does not have discretionary
voting power with respect to that proposal and has not received instructions
from the beneficial owner.

INFORMATION REGARDING NOMINEES AND CONTINUING DIRECTORS

The following table sets forth certain information regarding the seventeen
(17) nominees for director. Except as otherwise indicated, (i) each of the
named persons has been engaged in his or her present principal occupation for
more than five years and (ii) each nominee, other than Timothy M. Perry, has
been a director of the Company since its organization in 1996. Stock ownership
and other information is as of March 13, 2000.

<TABLE>
<CAPTION>
NOMINEES FOR DIRECTOR AND CONTINUING DIRECTORS
SHARES
BENEFICIALLY
OWNED
NAME (AGE) BUSINESS INFORMATION (PERCENTAGE)(1)
- ---------- -------------------- ---------------
<S> <C> <C>
Catherine M. Amos Ms. Amos, a native of Forsyth County, Georgia, has been the President 19,500(2)
(48) of Amos Properties, Inc., an owner of commercial real estate properties (2.44%)
since 1989, and the Secretary and Treasurer and co-owner of Amos
Plumbing & Electrical Co., Inc., a contracting firm, since 1975. Ms.
Amos is a member of the Lake Lanier Islands Authority as well as
a member of several other civic, social and community organizations.
Ms. Amos is also a director of the Bank.

Jeffrey S. Bagley Mr. Bagley, a native of Forsyth County, Georgia, has been a Judge for 5,000
(38) the State Court of Forsyth County since 1997. Mr. Bagley was a partner (*)
with the law firm of Boling, Rice, Bettis, Bagley & Martin from 1992
until 1997. He is a member of the Rotary Club of South Forsyth
County as well as several other civic and social organizations. Mr.
Bagley is also a director of the Bank.

Danny M. Bennett Mr. Bennett, a native of Forsyth County, Georgia, is the President of 10,000(3)
(39) GeoCorp Development Co., Inc., a land development company located (1.25%)
in Cumming, Georgia. He is also a Vice President and Construction
Engineer with Georgia North Contracting, Inc. Mr. Bennett has been
an officer of each of these companies since 1988. Mr. Bennett is
also a director of the Bank.

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<PAGE>
SHARES
BENEFICIALLY
OWNED
NAME (AGE) BUSINESS INFORMATION (PERCENTAGE)(1)
- ---------- -------------------- ---------------

Michael P. Bennett Mr. Bennett is a resident of Forsyth County, Georgia and is on the 9,500(4)
(55) Board of Directors for Forsyth County Farm Bureau. Mr. Bennett is (1.19%)
also the Chief Financial Officer and Secretary of 5 Bennett Farms,
Inc. and served on the Forsyth County Commission from 1987 to
1994. Mr. Bennett has been a self-employed farmer since 1975.
Mr. Bennett is also a director of the Bank.

Bryan L. Bettis Mr. Bettis, a native of Forsyth County, Georgia, has been the Vice 5,000(5)
(38) President of Midway Building Supply, Inc., in Alpharetta, Georgia, (*)
since 1978. Mr. Bettis is also the President of Bettis Construction,
Inc., a residential construction company, and a member of the
Rotary Club of South Forsyth County.

Talmadge W. Bolton Mr. Bolton, a native of Forsyth County, Georgia, has been the Chief 10,000(6)
(66) Executive Officer of Bolton's Truck Parts, Inc., since 1978. He is (1.25%)
a member of Lafayette Masonic Lodge No. 44 and a board member
of the Forsyth County Department of Family & Children Services
and the Forsyth County Zoning Department. Mr. Bolton is also a
director of the Bank.

Thomas L. Bower III Mr. Bower has been a resident of Gainesville, Georgia for 25 years. 10,000
(48) Mr. Bower is the Secretary/Treasurer of Clipper Petroleum, Inc. with (1.25%)
whom he has been associated since 1974, and a partner in B&B
Associates, a real estate and convenience store partnership. Mr.
Bower also serves on the Board of Directors for the Hall County
Humane Society.

Charles R. Castleberry Mr. Castleberry, a native of Forsyth County, Georgia, has been 5,000(7)
(46) employed by Progressive Lighting, Inc. as a manager and representative (*)
since 1985. Mr. Castleberry is a member of the Rotary Club of
South Forsyth County, a member and past director of the Cumming
Chamber of Commerce, and past Chairman of the Board for the
Forsyth County Planning and Development Board.

Charles D. Ingram Mr. Ingram, a native of Forsyth County, Georgia, has been a co-owner 5,000
(57) and President of I & S Investments, Inc. since 1989. Mr. Ingram (*)
was formerly the President of Forsyth County Bank and served on
the advisory board for Wachovia Bank. Mr. Ingram is also a
director of the Bank.

Herbert A. Lang, Jr. Mr. Lang is a long-time resident of Forsyth County and has been the 10,000
(48) owner of Lang Signs, Inc., a sign manufacturer, since 1973. He is (1.25%)
a member of the Rotary Club of South Forsyth County. Mr. Lang
is also a director of the Bank.

John P. McGruder Dr. McGruder is a resident of Cumming, Georgia and has been the co- 10,000(8)
(58) owner of Crestview Animal Hospital since 1984. He is also a (1.25%)
member of the Cumming First United Methodist Church where he
serves on the Building Committee.

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<PAGE>
SHARES
BENEFICIALLY
OWNED
NAME (AGE) BUSINESS INFORMATION (PERCENTAGE)(1)
- ---------- -------------------- ---------------

James J. Myers Mr. Myers is a resident of Forsyth County, Georgia and has been the 7,500(9)
(50) owner of James J. Myers, CPA, PC since 1991. Mr. Myers has been (*)
a CPA since 1976 and is a member of the Cumming Forsyth
Optimist Club and Leadership Forsyth. Mr. Myers is Chairman of
the Company's Board of Directors and also Chairman of the Board
of the Directors of the Bank.

Timothy M. Perry Mr. Perry is the President and Chief Executive Officer of the Company 2,000(14)
(38) and the Bank, as well as a director of the Bank. He is a resident (*)
of Cumming, Georgia and has over 19 years of banking experience
in the State of Georgia. Mr. Perry has been an officer of the Bank
since its inception in 1996. Prior to joining the Bank, he was Senior
Vice President/Senior Credit Officer of Barrow Bank & Trust Company
from 1995 through June 1996 and Vice President, Commercial
Lending of The Peoples Bank of Forsyth County from 1986 through 1995.
Mr. Perry has been nominated to replace David H. Denton as a Director.

Danny L. Reid Mr. Reid, a native of Forsyth County, Georgia, has been a co-owner 10,000(10)
(47) of Reid & Reid Grading and Pipeline, Inc., a grading contractor and (1.25%)
developer, since 1982. Mr. Reid is also a director of the Bank.

Charles R. Smith Mr. Smith is a resident of Forsyth County and has presided as a Judge 25,000(11)
(71) of the Municipal Court of Cumming, Georgia, since 1992. Mr. Smith (3.13%)
is a retired former partner of Smith & Smith, Attorneys at Law, with
whom he was a partner since 1956. He was an organizer, director and
former Chairman of the Board of The Peoples Bank of Forsyth County.
Mr. Smith is also a director of the Bank.

Wyatt L. Willingham Mr. Willingham is a resident of Cumming, Georgia and is the Vice 7,500(12)
(47) President and General Manager of North Georgia Fast Foods, Inc., with (*)
which he has been associated since 1973. Mr. Willingham is a member
of the Mount Zion Lodge and the Yaarab Temple. Mr. Willingham is
also a director of the Bank.

Jerry M. Wood Mr. Wood is a long-time resident of Forsyth County and has been the 5,000(13)
(51) President and owner of Wood Ace Hardware Company since 1980. (*)
Mr. Wood is a founding member of the Rotary Club of South Forsyth
County and has served as Chairman of Finance, Chairman of the Trustees,
and Secretary of the Building Committee of the Midway United
Methodist Church.

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<PAGE>
EXECUTIVE OFFICERS
SHARES
BENEFICIALLY
OWNED
NAME (AGE) BUSINESS INFORMATION (PERCENTAGE)(1)
- ---------- -------------------- ---------------

Jimmy S. Fagan Mr. Fagan is the Executive Vice President of the Company and also the 10,000(15)
(63) Executive Vice President of the Bank, and has held these positions with (1.25%)
the Company and the Bank since their inception. He is a long-time
resident of Cumming, Georgia and has over 34 years of banking experience
in Forsyth County, Georgia. Prior to joining the Company, he served as
Vice Chairman and President of The Peoples Bank of Forsyth County,
with which he was associated since 1984. He is a member of the Rotary
Club of South Forsyth County and the Forsyth Development Authority.

Holly R. Hunt Mrs. Hunt is the Vice President, Secretary and Treasurer of the Company. -0-
(41) Mrs. Hunt is also the Chief Financial Officer of the Bank. She has (*)
been an officer of the Company and the Bank since November 1998. Mrs.
Hunt is a resident of Cleveland, Georgia and has over 15 years of
banking experience in the State of Georgia. Prior to joining the
Company, she was an independent bank consultant from June 1997 to
November 1998 and Vice President and Internal Auditor for Regions
Bank, formerly Metro Bank, from October 1994 to June 1997.

DIRECTORS AND OFFICERS AS A GROUP (19 PERSONS) 166,000
(20.76%)
<FN>
- --------------------
(1) Information relating to beneficial ownership of Company Common Stock is
based upon information furnished by each person using "beneficial
ownership" concepts set forth in the rules of the Securities and Exchange
Commission. Under those rules, a person is deemed to be a "beneficial
owner" of a security if that person has or shares "voting power," which
includes the power to vote or direct the voting of such security, or
"investment power," which includes the power to dispose of or to direct the
disposition of such security. The person is also deemed to be a beneficial
owner of any security of which that person has a right to acquire
beneficial ownership within 60 days. Under those rules, more than one
person may be deemed to be a beneficial owner of the same securities, and a
person may be deemed to be a beneficial owner of securities as to which he
or she may disclaim any beneficial interest. Accordingly, directors are
named as beneficial owners of shares as to which they may disclaim any
beneficial interest.

(2) Includes 11,500 Shares owned jointly with Ms. Amos' husband, as to which
Shares Ms. Amos may be deemed to share voting and investment power.

(3) Includes 5,000 Shares owned jointly with Mr. Bennett's wife, as to which
Shares Mr. Bennett may be deemed to share voting and investment power.

(4) Includes 7,500 Shares that are owned jointly with Mr. Bennett's wife, as to
which Shares Mr. Bennett may be deemed to share voting and investment
power; 1500 Shares owned jointly with Mr. Bennett's children, as to which
Shares Mr. Bennett may be deemed to share voting and investment power; and
500 Shares owned jointly by Mr. Bennett's wife and child, as to which
Shares Mr. Bennett may be deemed to share voting and investment power.

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<PAGE>
(5) All 5,000 Shares are owned jointly with Mr. Bettis' business partner, and
Mr. Bettis may be deemed to share voting and investment power.

(6) All 10,000 Shares are held by the trustee for the Talmadge W. Bolton Living
Trust.

(7) All 5,000 Shares are owned jointly with Mr. Castleberry's wife, and Mr.
Castleberry may be deemed to share voting and investment power.

(8) All 10,000 Shares are owned jointly with Mr. McGruder's wife, and Mr.
McGruder may be deemed to share voting and investment power.

(9) Includes 2,500 Shares held by the trustee for the IRA of Mr. Myers.

(10) Includes 5,000 Shares owned jointly with Mr. Reid's wife, as to which
Shares Mr. Reid may be deemed to share voting and investment power.

(11) All 25,000 Shares are owned jointly with Mr. Smith's wife, and Mr. Smith
may be deemed to share voting and investment power.

(12) All 7,500 Shares are owned jointly with Mr. Willingham's wife, and Mr.
Willingham may be deemed to share voting and investment power.

(13) Includes 3,000 Shares owned jointly with Mr. Wood's wife and 2,000 Shares
owned jointly with Mr. Wood's daughter, as to which Shares Mr. Wood may be
deemed to share voting and investment power.

(14) Includes 1,000 Shares owned jointly with Mr. Perry's wife, as to which
Shares Mr. Perry may be deemed to share voting and investment power.

(15) All 10,000 Shares are owned jointly with Mr. Fagan's wife, and Mr. Fagan
may be deemed to share voting and investment power.

(*) Less than one percent.
</TABLE>

None of the members of the Board of Directors are related, except that John
P. McGruder's wife is a first cousin to Catherine M. Amos.

MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS

The Board of Directors of the Company conducts its business through
meetings of the full Board and through joint committees of the Boards of
Directors of the Company and the Bank, including an Audit Committee, Investment
Committee, Loan Committee and Personnel Committee. During 1999, the full Board
of Directors held seven (7) meetings, the Audit Committee held ten (10)
meetings, the Investment Committee held three (3) meetings, the Loan Committee
held thirty-seven (37) meetings, and the Personnel Committee held four (4)
meetings. With the exception of Bryan L. Bettis and Thomas L. Bower, each
director attended at least 75% of all meetings of the full Board of Directors
and of each committee of the Board of which he (or she) is a member.

The Audit Committee is responsible for reviewing with the Company's
independent accountants, their audit plan, the scope and results of their audit
engagement and the accompanying management letter, if any; reviewing the scope
and results of the Company's internal auditing procedures; consulting with the
independent accountants and management with regard to the Company's accounting
methods and the adequacy of the Company's internal accounting controls;
approving professional services provided by the independent accountants;
reviewing the independence of the independent accountants; and reviewing the
range of the independent accountants' audit and non-audit fees. The Board of
Directors has not adopted a written charter for the Audit Committee. During
1999, the Audit Committee was composed of Catherine M. Amos, Jeffrey S. Bagley,
James J. Myers and Charles R. Smith. Effective January 1, 2000, the Audit
Committee members for the fiscal year 2000 are Jeffrey S. Bagley, Danny M.
Bennett, Talmadge W. Bolton and James J. Myers. All of the members of the Audit
Committee are "independent" within the meaning of Rule 4200(14) of the National
Association of Securities Dealers' listing standards.

The Investment Committee is responsible for ensuring that guidelines
provided by them in the Company's investment policy are carried out by

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<PAGE>
management. During 1999, the Investment Committee was composed of Danny M.
Bennett, Talmadge W. Bolton, James J. Myers, Herbert A. Lang and John P.
McGruder. Effective January 1, 2000, the Investment Committee members for the
fiscal year 2000 are John P. McGruder, James J. Myers, Charles R. Smith and
Wyatt L. Willingham.

The Loan Committee is responsible for ensuring that policy and regulation
guidelines are adhered to by lending personnel. Loans in excess of the lending
limits for personnel are reviewed and approved by the committee. During 1999,
the Loan Committee was composed of Michael P. Bennett, Charles D. Ingram, James
J. Myers, Danny L. Reid and Wyatt L. Willingham. Effective January 1, 2000, the
Loan Committee members for the fiscal year 2000 are Catherine M. Amos, Michael
P. Bennett, Charles D. Ingram, James J. Myers, and Danny L. Reid.

The Personnel Committee is responsible for setting the compensation and
benefits of the executive officers and other employees of the Company and the
Bank. In addition, the Personnel Committee will act as the Administrative
Committee under the Company's Long Term Incentive Plan (See Proposal Two below)
if the adoption of that plan is approved by the shareholders. During 1999, the
Personnel Committee was composed of Jeffrey S. Bagley, Charles D. Ingram,
Herbert A. Lang, Jr. and James J. Myers. Effective January 1, 2000, the
Personnel Committee members for the fiscal year 2000 are Jeffrey S. Bagley,
Charles D. Ingram, Herbert A. Lang, Jr. and James J. Myers.

The Board of Directors as a whole functions as a nominating committee to
select management's nominees for election as directors of the Company. The
Board of Directors will consider nominees recommended by shareholders if
submitted to the Company in accordance with the procedures set forth in Section
3.8 of the Bylaws of the Company. For more information on nomination
procedures, see "Shareholders' Proposals and Nomination Procedures for the
Annual Meeting of Shareholders in 2001" below.

DIRECTOR COMPENSATION

During 1999, directors, who are not employees of the Company or the Bank,
received compensation. Directors received $100 for each Bank Board of Directors
meeting attended and $25 for each committee meeting attended. Effective January
1, 2000, Directors will receive $150 for each Bank Board of Directors meeting
attended and $50 for each committee meeting attended. For the fiscal year 2000,
the Chairman of the Board of Directors shall receive $200 for each Bank Board of
Directors meeting attended, and committee Chairmen will receive $75 for each
committee meeting attended. No compensation is paid to directors of the Company
with respect to Company Board of Directors meetings.

COMMON STOCK OWNERSHIP OF CERTAIN BENEFICIAL OWNERS

As of March 13, 2000, the 19 directors and executive officers of the
Company beneficially owned 171,800 shares or 21.48% of the Common Stock of the
Company. The Company is unaware of any person that beneficially owns more than
five percent (5%) of the Company's Common Stock. For information regarding the
beneficial ownership of the Company's Common Stock as of March 13, 2000 by each
of the Company's directors, director nominees and executive officers, see
"Proposal One - Election of Directors - Information Regarding Nominees and
Continuing Directors."

11
<PAGE>
PROPOSAL TWO - LONG TERM INCENTIVE PLAN

RECOMMENDATION OF BOARD OF DIRECTORS

The Board of Directors of the Company has approved the adoption of a Long
Term Incentive Plan (the "Incentive Plan") for selected senior management and
administrative employees of the Bank ("Key Employees"), and has adopted a
resolution that the Incentive Plan be submitted to the shareholders for their
consideration and approval at the 2000 Annual Meeting. If approved by the
shareholders, the Incentive Plan will be effective as of January 1, 2000 (the
"Effective Date"). In the event that the shareholders fail to approve the
adoption of the Incentive Plan, the plan will not be implemented during the
fiscal year 2000 without shareholder approval.

The original operating conditions fixed by the Georgia Department of
Banking and Finance (the "Department") at the time the Bank's charter was
approved include a requirement that "any plan for issuance of stock options to
key employees and/or officers of the bank shall be submitted to the Department
for prior approval before issuance of any options." Accordingly, if the
Incentive Plan is approved by the shareholders, it will then be submitted to the
Department for its approval prior to the issuance of any Awards.

THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT THE SHAREHOLDERS VOTE
"FOR" THE ADOPTION OF THE INCENTIVE PLAN.

VOTE REQUIRED

This Proposal requires approval by a "plurality" of the votes cast by the
Shares entitled to vote in the election. This means that Proposal Two will be
approved only if the holders of a majority of the Shares entitled to vote and
voting at the Annual Meeting vote in favor of Proposal Two. With respect to
Proposal Two, abstentions and "broker non-votes" will be counted as Shares
present for purposes of determining the presence of a quorum. However, neither
abstentions nor "broker non-votes" will be counted as votes cast for purposes of
determining whether a particular proposal has received sufficient votes for
approval. A "broker non-vote" occurs when a nominee does not have discretionary
voting power with respect to that proposal and has not received instructions
from the beneficial owner.

PURPOSES AND PROVISIONS OF THE INCENTIVE PLAN

The Board of Directors believes that an essential element for the long term
success and profitability of the Company will be the ability of the Bank to
attract and retain highly qualified senior management and administrative
employees in an increasingly competitive job market. The adoption of the
Incentive Plan is deemed by the Board of Directors to be a necessary step in
achieving that long term goal. The specific purpose of the Incentive Plan is to
achieve this goal by providing Key Employees with a direct long term interest in
the profitability and growth of the Company and the Bank through equity
ownership.

The Incentive Plan authorizes the Personnel Committee, with the approval of
the Board of Directors, to make discretionary awards of various types of equity
based deferred compensation ("Awards") to Key Employees. The term of the
Incentive Plan (the "Term") is 10 years from the Effective Date (i.e., the
period ending December 31, 2009), and Awards may be made on one or more
occasions throughout the Term. However, the Incentive Plan will continue to be

12
<PAGE>
administered until all matters relating to any Awards made during the Term have
been finally resolved.

Because the Incentive Plan is a "nonqualified" deferred compensation plan
(i.e., it is not a "qualified" pension or profit sharing plan under 401(a) of
the Internal Revenue Code of 1986 ("Code")) the Board of Directors has full
discretion in selecting Key Employees to participate in the Incentive Plan.
However, the general standard for the selection of Key Employees is set forth in
the Incentive Plan as follows:

Officers and key employees of the Employer and its Subsidiaries
(including Officers or employees who are members of the Board, but
excluding directors who are not Officers or employees) who, in the opinion
of the Committee, are mainly responsible for the continued growth and
development and financial success of the business of the Employer or one of
its Subsidiaries shall be eligible to be granted Awards under the Plan.
Subject to the provisions of the Plan, the Committee shall, from time to
time, select from such eligible persons those to whom Awards shall be
granted and determine the number of shares to be granted.

The Board of Directors estimates that approximately six employees, based on the
Bank's current staffing levels and personnel, may qualify for selection as Key
Employees eligible to receive Awards. It is anticipated that this number will
increase as the Company's operations continue to grow throughout the Term.

The Incentive Plan provides that Key Employees who terminate their service
on behalf of the Bank during a specified period after the date of an Award (the
"Restriction Period") may forfeit all or a pro rata part of any Awards
previously made to them, depending on the reason for such termination. The
length of the Restriction Period will be separately fixed by the Board of
Directors for each Award, and will be not less than three years, except that
stock option Awards may be exercisable in annual installments over a period not
to exceed 10 years. The Incentive Plan therefore encourages Key Employees to
continue their service with the Bank in order to realize the full value of all
such Awards. Because the value of all Awards authorized under the Incentive
Plan is based upon the value of the Shares, Key Employees are also given a
direct interest in working to maximize the value of the Shares.

The Incentive Plan also provides that the rights of Key Employees under
outstanding Awards will accelerate upon the occurrence of a "Change in Control."
For purposes of the Incentive Plan, a Change in Control means a transfer of a
controlling interest in the Company or the Bank, shareholder approval of a sale,
lease or other transfer of all or substantially all of the Company's or the
Bank's assets, shareholder approval of a merger or consolidation in which the
Company or the Bank is not the surviving corporation or any change in a majority
of the Board of Directors of the Company during a two consecutive year period
unless such change was approved by a vote of at least two-thirds of the
Directors still in office who were Directors at the start of such two year
period. The principal reason for including such provisions in the Incentive
Plan is to assure Key Employees that any Awards they receive will be protected,
regardless of changes in the ownership or control of the Company or the Bank.
The specific effects of these provisions following a Change in Control are more
particularly described below.

13
<PAGE>
TYPES OF AWARDS

The types of Awards that are authorized under the Incentive Plan include
Restricted Stock, Performance Shares, Stock Appreciation Rights ("SAR's"),
Incentive Stock Options ("ISO's") and Non-Qualified Stock Options ("NQSO's").
By authorizing different types of Awards, the Incentive Plan allows the Company
continuing discretion in structuring deferred compensation arrangements for its
Key Employees. A summary of each type of Award follows, but shareholders should
refer to the written plan document for a complete description.

STOCK OPTIONS: A stock option is a contractual right to purchase a
---------------
specified number of shares of stock for a specified purchase price at some time
in the future, should the employee elect to exercise the option. The Incentive
Plan authorizes two different types of stock options: NQSO's and ISO's. The
principal difference between NQSO's and ISO's is their treatment for income tax
purposes. (See discussion below of the respective tax treatment of NQSO's and
ISO's.) Under the Incentive Plan, both NQSO's and ISO's become exercisable in
annual installments under a schedule fixed by the Board of Directors at the time
of the Award, but not to exceed 10 years from the date of grant. The exercise
price for any stock options granted under the Incentive Plan must not be less
than the fair market value of the Shares on the date of grant. The exact terms
of any stock option Award will be set forth in a written Stock Option Agreement
signed by the Key Employee at the time of the Award. In the event of a Change
in Control, all stock options shall become immediately exercisable for the
remainder of their term. Also, following a Change in Control optionees may
require the Company to purchase all unexercised options in cash for a period of
60 days, provided that options granted to officers and directors must have been
held for at least six months in order to be subject to this purchase
requirement.

SAR'S: A SAR is a contractual right to receive the value (i.e., the spread
-----
between the exercise price and market value of the Shares on the exercise date)
of any unexercised stock option in lieu of the Shares subject to such option.
Accordingly, a SAR is generally issued in tandem with a stock option Award.
However, this decision is in the discretion of the Personnel Committee. The
employee may exercise the SAR or the related stock option, but not both. Under
the Incentive Plan, a SAR may only be exercised at such time as the related
stock option is exercisable, and only with the consent of the Personnel
Committee. Upon the exercise of a SAR, the related stock option will
automatically lapse. A SAR may be paid in cash or by the issuance of Shares
equal in value to the SAR, or both, in the discretion of the Personnel
Committee. However, in the event of a Change in Control all SAR's shall become
immediately exercisable for cash for a period of 60 days, provided that SAR's
granted to officers and employees must have been outstanding for at least six
months in order to be subject to this purchase requirement

PERFORMANCE SHARES: A Performance Share is a contractual right to receive
-------------------
the future value of a specified number of Shares, contingent upon the Company or
the Bank meeting specified performance criteria set by the Personnel Committee
at the time of the Award. Any Award of Performance Shares will be credited to a
Performance Share account, but will not involve the actual issuance of Shares.
Accordingly, a Performance Share does not carry with it any voting rights,
dividend rights or other rights associated with actual Share ownership. Payment
of Performance Shares following the Restriction Period may be made in cash or in
Shares at the election of the Personnel Committee, although the Incentive Plan
states that payment will normally be made one-half in cash and one-half in
Shares. In the event of a Change in Control, all Performance Shares shall be
immediately payable in cash, regardless of whether the performance criteria have
been met or whether the Restriction Period has expired.

14
<PAGE>
RESTRICTED STOCK: A Restricted Stock Award involves the issuance of a
-----------------
stock certificate for a specified number of Shares in the name of the Key
Employee. However, in the discretion of the Personnel Committee, the
certificate may be retained by the Company during the Restriction Period.
Moreover, the Shares will be forfeited, in whole or in part, if the Key Employee
terminates employment during the Restriction Period, and the Shares of
Restricted Stock may not be transferred by the Key Employee during the
Restriction Period. In the event of a Change in Control all restrictions on the
Restricted Stock will lapse, regardless of whether the Restriction Period has
expired.

The Board of Directors has adopted a resolution reserving up to 80,000 of
the Company's authorized but unissued Shares for possible future issuance to Key
Employees pursuant to the Incentive Plan. By approving Proposal Two, the
shareholders will also approve such action and the future issuance of the
reserved Shares pursuant to the Incentive Plan. The Board of Directors
anticipates that the reserved Shares will be allocated in such a manner that
Shares will be maintained in reserve for new Awards throughout the Term. In
determining the aggregate number of Shares issued pursuant to the Incentive
Plan, Shares will be deemed to have been issued in payment of Performance Shares
regardless of whether they are actually issued or the equivalent value of such
Shares is paid in cash. To the extent that any Award lapses, or the rights of
the holder terminate for any other reason, any Shares subject to such Award
shall again be available for issuance pursuant to the Incentive Plan. Issued
Shares may be reacquired by the Company and again held in reserve or reissued
under the Incentive Plan, but repurchased Shares shall not increase the
aggregate number of Shares that may be issued under the Incentive Plan.

AMOUNTS PAYABLE BY KEY EMPLOYEES IN CONNECTION WITH AWARDS

Whether a Key Employee is required to pay any amount to the Company in
connection with the receipt or exercise of an Award will depend upon the type of
Award. These rules are summarized below:

STOCK OPTIONS: In order to exercise a stock option Award, whether a NQSO
--------------
or an ISO, a Key Employee must pay the exercise price specified in the Stock
Option Agreement to the Company. The exercise price may be paid by the Key
Employee in cash or by surrendering Shares with a fair market value equal to the
exercise price. Under the Code, the exercise price for an ISO must be at least
equal to the fair market value on the date of grant. There is no similar
statutory restriction on the exercise price for a NQSO. However, the provisions
of the Incentive Plan impose such a requirement on both NQSO's and ISO's.

SAR'S: Since a SAR is a right to receive the accrued value of a stock
-----
option, rather than the total number of Shares subject to the option, the
exercise of a SAR does not involve any actual payment by the Key Employee to the
Company, other than the release of some of the Shares subject to the option. The
value of the SAR is the spread between the exercise price under the related
option and the fair market value of the Shares when the SAR is exercised.

PERFORMANCE SHARES: A Performance Share Award does not involve any payment
------------------
by the Key Employee to the Company at the time it is granted. At the election
of the Personnel Committee, a Performance Share Award may be paid, in whole or
in part, by the issuance of Shares to the Key Employee. In such a case, the Key
Employee is not required to make any payment to the Company for the issued
Shares.

15
<PAGE>
RESTRICTED STOCK: A Restricted Stock Award does not require the Key
-----------------
Employee to pay any amount to the Company for the issued Shares.

In addition to the payments described above, Key Employees are required to
pay to the Company (or a subsidiary, as appropriate) any amounts required to be
withheld under federal or state tax laws. Any required withholding may be paid
by Key Employees in cash or by surrendering Shares with a fair market value
equal to their withholding obligation.

DETERMINATION OF "FAIR MARKET VALUE"

As described above, the exercise price under any stock options may not be
less than the fair market value of the Shares on the date of grant. In
addition, the value of all of the other types of Awards is based, at least in
part, on the fair market value of the Shares. Therefore, the determination of
fair market value is critical to the operations of the Incentive Plan.

Because the Shares are not actively traded on any national exchange or over
the counter market, it may be difficult to determine their fair market value on
the various valuation dates required under the Incentive Plan. If the Shares
should become actively traded in the future, the Incentive Plan provides that
fair market value will be based on the price of actual sales made through a
national exchange or over the counter market. In the absence of such active
trading, the Incentive Plan provides that the fair market value of the Shares
will be determined in "good faith" by the Board of Directors in accordance with
Proposed Treasury Regulation 1.422A-2(e)(2)(ii). Any reasonable valuation
method may be adopted by the Board of Directors for this purpose. However, the
Proposed Regulations specifically cite "the opinions of completely independent
and well-qualified experts" as one way in which the good faith standard may be
met. Therefore, it may be necessary for the Company to periodically obtain one
or more independent appraisals of the Shares for purposes of the Incentive Plan.

The Incentive Plan also provides a special definition of fair market value
that applies to any rights exercised by Key Employees in connection with a
Change in Control. Generally, it provides that fair market value will be based
upon the highest price established by the Share purchase, tender offer, merger
or other transaction that gave rise to the Change in Control.

BENEFITS OR AMOUNTS UNDER THE INCENTIVE PLAN

Because the selection of Key Employees and the grant of Awards under the
Incentive Plan is completely discretionary, the benefits or amounts to be
allocated to any particular employee or group of employees under the Incentive
Plan are not determinable in advance. Similarly, it is not possible to
determine the benefits or amounts that would have been allocable to any employee
or group of employees during 1999 if the Incentive Plan had been in effect. The
Incentive Plan does not include any provision requiring the Company to fund any
amount with respect to past employee services, or requiring any specific or
estimated annual payment with respect to current employee services.

APPLICATION OF SECURITIES LAWS TO SHARES ISSUED UNDER THE INCENTIVE PLAN

Under the Securities Act of 1933 (the "1933 Act"), it is unlawful for any
person either to sell or offer to sell any "security" (within the meaning of the
1933 Act) unless the sale or offering of such security has been registered under
the 1933 Act, or qualifies for an exemption from the registration requirements
of the 1933 Act. The Securities Exchange Commission (the "SEC") has held that a

16
<PAGE>
stock option issued under a deferred compensation plan that does not require any
payment by the employee at the date of grant generally does not constitute a
sale, or offer to sell, a security. However, the subsequent exercise of the
stock option will constitute the sale of a security for purposes of the 1933 Act
if any payment by the employee is required.

The Shares reserved for possible issuance under the Incentive Plan have not
been registered under the 1933 Act. Therefore, it will be necessary to qualify
any future issuance of such Shares to Key Employees for an exemption from the
registration requirements under the 1933 Act. Some of the exemptions that may
be available for such transactions are summarized below.

Because the Company operates exclusively within the State of Georgia, the
issuance of Shares under the Incentive Plan may qualify for exemption as an
intrastate offering. Under 3(a)(11) of the 1933 Act and Rule 147 promulgated
by the SEC thereunder, this exemption will apply where all offerees and
purchasers are "resident" within a single state, which is also the state of
incorporation of the employer and the state in which substantially all of the
employer's business is conducted. However, if even one employee to whom the
securities are offered or sold is not a resident of that state, the exemption is
lost. Therefore, in relying on this exemption it is prudent to carefully limit
the number of employees involved and to obtain assurances regarding their state
of residence.

Another exemption that may apply to the issuance of Shares under the
Incentive Plan is 4(2) of the 1933 Act, which exempts transactions "not
involving any public offering" of securities. The SEC has also promulgated
Regulation D, which sets forth three separate safe harbors (Rules 504, 505 and
506) pursuant to which an issuer may qualify for the "limited offering"
exemption under 4(2). In general, the Regulation D safe harbors may limit the
amount of securities that can be sold and the number of offerees, and may
require the same disclosures about the issuer that are required in a public
offering.

Because of the limited number of Key Employees and the limited amount of
securities involved, the Company anticipates that the issuance of Shares under
the Incentive Plan will qualify for the limited offering exemption. However, in
SEC v. Ralston Purina Co., 346 U.S. 119 (1953), the United States Supreme Court
held that an offering of stock to employees would not be an exempt limited
offering where the class of offerees was composed of persons needing the
protection of the 1933 Act. This class consists of unsophisticated investors
who have limited access to the issuer's financial information. Therefore, the
Company intends to address this issue by limiting the Key Employees who
participate under the Incentive Plan to the Bank's senior management and
administrative employees, and by providing each Key Employee with a copy of the
Company's most recent financial report and disclosures filed with the SEC under
the Securities Exchange Act of 1934 (the "1934 Act").

Shareholders should also note that the Term of the Incentive Plan is 10
years, and the scope of the Company's operations and the number of Key Employees
may increase significantly during that time. In such event, it may no longer be
possible to qualify the issuance of Shares under the intrastate or limited
offering exemptions. The Company would incur substantial effort and expense if
it became necessary to register such Shares under the 1933 Act.

In addition to the federal securities laws, Georgia law may require a
separate registration of any Shares issued under the Incentive Plan. However,
the Georgia Securities Act of 1973 (the "Georgia Act") provides for various

17
<PAGE>
registration exemptions. These include transactions (i) in connection with an
employee stock bonus plan requiring payment of no consideration other than
services ( 10-5-9(A) of the Georgia Act), (ii) in connection with a stock
option plan in which no person other than an employee of the issuer, or of an
affiliate of the issuer, may participate and requiring payment of no
consideration other than services ( 10-5-9(C) of the Georgia Act), and (iii) in
connection with the issuance of securities upon the exercise of options granted
pursuant to such a stock option plan ( 10-5-9(D) of the Georgia Act). The
Company anticipates that the various Awards, and the issuance of Shares under
the Incentive Plan, will qualify for one or more of these exemptions. In
addition, the Georgia Act includes certain limited offering exemptions, which
may also apply to such transactions.

Shareholders should also note that, unless registered under the 1933 Act,
Shares issued under the Incentive Plan will be "restricted stock" in the hands
of Key Employees. As a result, Key Employees will be prohibited by the
securities laws from transferring such Shares unless they are subsequently
registered, or an exemption is available. The most commonly used exemption for
such resales is SEC Rule 144, which permits (subject to certain limitations)
resales of restricted stock that the seller has held for at least two years.

EXEMPTION FROM "SHORT-SWING" PROFIT RULES

Section 16(b) of the 1934 Act permits the issuer of any registered security
to recover the profits made by any director, officer or 10% shareholder on
purchase and sale transactions occurring in any six month period. Under rules
adopted by the SEC in 1991, the grant of stock options or other derivative
securities under a deferred compensation plan may be deemed to constitute the
purchase (or sale) of the underlying security for purposes of the "short-swing
liability" rules of 16(b). However, SEC Rule 16b-3 provides several
alternative means to qualify such transactions for an exemption under 16(b).
The Incentive Plan is intended to qualify for such an exemption under Rule 16b-3
as a plan pursuant to which transactions involving the issuer's securities
(including derivative securities) must be approved in advance by the issuer's
board of directors or a committee of two or more "Non-Employee Directors."

TAX CONSEQUENCES TO THE COMPANY AND KEY EMPLOYEES

The granting of an Award generally will not result in current taxation to
the Key Employee or a current tax deduction for the Company. The tax
consequences of such transactions will normally be governed by Code 83. Under
these rules, the Key Employee must recognize compensation income equal to the
fair market value of the Award at the time it first becomes freely transferable
or is not subject to a substantial risk of forfeiture. Under 83(h), the
employer is entitled to a deduction equal to the amount of gain recognized by
the employee. The taxable year in which the employer's deduction is allowed
must be "matched" under 83 to the year in which gain is recognized by the
employee.

The tax treatment of stock options is somewhat different, and depends upon
whether the option is a NQSO or an ISO. In the case of a NQSO, an employee will
not recognize income on the grant of the option unless the option itself has a
"readily ascertainable value." In order for this exception to apply, the option
itself generally must be actively traded on an established market. Therefore,
it should not apply to NQSO's issued under the Incentive Plan. At the time an
NQSO is exercised, the employee must recognize compensation income, and the
employer is allowed a tax deduction, determined under the 83 rules described
above. The amount of the employee's income, and the employer's matching
deduction, is equal to the excess of the fair market value of the stock received

18
<PAGE>
as of the exercise date over the amount paid by the employee for the stock under
the NQSO.

Stock options that meet the special requirements for ISO's are subject to
more favorable tax treatment than NQSO's. These requirements include limits on
the term of the option, the amount of ISO's exercisable in any year and the
exercise price under the option, as well as a requirement that an ISO plan be
approved by the shareholders. Under Code 422, an employee is not required to
recognize income on either the grant or the exercise of an ISO. Rather, the
employee will only recognize gain when the stock received under the ISO is
actually sold. The amount of gain recognized will be the difference between the
amount realized on the sale and the amount paid by the employee for the stock
(i.e., the exercise price) under the ISO. Provided that the employee has owned
the stock for the required holding period, any gain on its sale may also qualify
for long term capital gain treatment. However, for alternative minimum tax
purposes, the difference between the option price and fair market value of the
stock will be a tax preference item for the employee in the year of exercise.
Because of this favorable tax treatment to employees, the Code does not allow
any deduction to an employer with respect to the grant or exercise of an ISO.

COMPLETE COPY OF INCENTIVE PLAN

A complete copy of the Incentive Plan will be available upon request at the 2000
Annual Meeting. In addition, a copy of the Incentive Plan may be obtained by
any shareholder, without charge, by submitting a written request for such a copy
to Forsyth Bancshares, Inc., 501 Tri-County Plaza, Cumming, Georgia 30040,
Attention: Holly R. Hunt, Secretary of the Company.

EXECUTIVE COMPENSATION

SUMMARY COMPENSATION OF EXECUTIVE OFFICERS

Under rules established by the SEC, the Company is required to provide
certain data and information in regard to the compensation and benefits provided
to the Company's Chief Executive Officer and four other most highly compensated
executive officers who receive compensation in excess of $100,000 per year
(collectively, the "Named Executive Officers"). For purposes hereof, only David
H. Denton, the Company's former Chief Executive Officer, and Jimmy S. Fagan, the
Company's Executive Vice President, earned over $100,000 in salary and bonus
during 1999, or for any other period since the Company's inception. The
following table

19
<PAGE>
summarizes by various categories, for the fiscal years ended December 31, 1999,
1998 and 1997, the total compensation paid by the Company to its Named Executive
Officers.

<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE

ANNUAL COMPENSATION(1)
----------------------
ALL OTHER
NAME AND POSITION YEAR SALARY BONUS COMPENSATION(2)
----------------- ----------- ------ -------- ---------------
<S> <C> <C> <C> <C>
David H. Denton(3) 1999 $ 98,000 0 $ 2,300
President and 1998 98,000 0 1,440
Chief Executive Officer 1997 96,974 0 1,440

Jimmy S. Fagan 1999 108,900(4) 1,000 1,592
Executive Vice President 1998 108,900(4) 170
1997 108,900(4) 0 170

Timothy M. Perry(5) 1999 94,567(6) 5,000 112
President and 1998 __(7)__ _(7)__ __(7)__
Chief Executive Officer 1997 __(7)__ _(7)__ __(7)__
<FN>
- ------------------
(1) Excludes perquisites and other personal benefits, the aggregate amount of which did
not, in the case of any Named Executive Officer, exceed $50,000 or 10% of such Named
Executive Officer's annual salary and bonus in any year.
(2) This amount represents the dollar value of excess life insurance benefits received by
the Named Executive Officer in each year.
(3) Mr. Denton resigned during 1999 as President and Chief Executive Officer.
(4) Includes $11,400 of compensation earned in each of 1999, 1998 and 1997, which was
deferred by Mr. Fagan in accordance with his Executive Deferred Compensation
Agreement.
(5) Mr. Perry replaced Mr. Denton during 1999 as President and Chief Executive Officer.
(6) Includes $21,423 representing the estimated fair market value of an automobile
transferred by the Bank to Mr. Perry during 1999.
(7) Mr. Perry was not includible as a Named Executive Officer prior to his appointment as
Chief Executive Officer of the Company and the Bank in 1999. Accordingly, his
Compensation during 1997 and 1998 is not included in the Summary Compensation Table.
</TABLE>

TERMINATION OF EMPLOYMENT AGREEMENT WITH DAVID H. DENTON

David H. Denton and the Company previously entered into an employment
agreement (the "Employment Agreement") pursuant to which Mr. Denton served as
the President and Chief Executive Officer of the Company and the Bank. The
Employment Agreement provided for a salary of $98,000 plus annual medical
insurance premiums. Additionally, the Employment Agreement provided that Mr.
Denton might participate in the Company's or the Bank's retirement, welfare and
other benefit programs and was entitled to reimbursement for automobile expenses
and travel and business expenses. The Company also maintained a key man life
insurance policy on Mr. Denton providing for death benefits in the amount of
$600,000 payable to the Company and $400,000 payable to Mr. Denton's family.

The Employment Agreement provided for an initial term of five years
(subject to annual extensions at the Bank's election), beginning on June 28,
1996. However, Mr. Denton and the Company mutually agreed to Mr. Denton's
voluntary resignation from his positions with the Company and the Bank effective

20
<PAGE>
August 27, 1999. The terms of the Company's separation agreement with Mr.
Denton required the continuation of certain compensation payments to him for a
period of six months, and all such payments have been made. All other matters
relating to Mr. Denton's former employment have been resolved, and the Company
and the Bank have no further obligations to him under the Employment Agreement.

The Company has not entered into an employment agreement with any other
officer or employee of the Company or the Bank.

BANK 401(K) PLAN

The Bank established, effective January 1, 1998, a qualified salary plan
pursuant to Section 401(i) of the Internal Revenue Code (the "401(k) Plan").
The 401(k) Plan is open to all employees, including executive officers,
beginning on the first day of their employment with the Bank. Pursuant to the
401(k) Plan, each participating employee is permitted to authorize payroll
deductions of up to 6% of his or her total compensation during the calendar year
(the "Basic Contributions"), and is permitted to make supplemental contributions
of up to 10% of his or her total compensation during the calendar year (the
"Supplemental Contributions"). An employee's aggregate contributions are
subject to limits set by law. The Bank may, but is not required to, make
matching contributions in cash or the Company's Common Stock equal to 20% of
each participant's Basic Contributions. During 1999, the Bank did not make any
matching contributions to the 401(k) Plan. However, matching contributions to
the 401(k) Plan may be made in the future in the discretion of the Bank's Board
of Directors. Participants are immediately 100% vested in their Basic and
Supplemental Contributions.

EXECUTIVE DEFERRED COMPENSATION AGREEMENTS

The Bank has entered into a deferred compensation agreement with one of its
executive officers, Jimmy S. Fagan, under which the Bank has agreed to set
aside, or place in a special trust, the amount of $11,400 for each full year
that Mr. Fagan is employed with the Bank. The Bank is not required to invest
such amounts but, if the Bank elects to make such investments, any earnings
inure to the employee's benefit. All amounts of deferred compensation
(including earnings, if any) will be paid in a single lump sum amount within 30
days of Mr. Fagan's termination of employment. Amounts of compensation deferred
pursuant to this deferred compensation agreement are included in Mr. Fagan's
salary as disclosed in the Summary Compensation Table in the year such
compensation is earned. Such compensation will not be included in Mr. Fagan's
salary in the Summary Compensation Table in the later year in which he actually
receives such compensation.

CERTAIN TRANSACTIONS AND BUSINESS RELATIONSHIPS

Directors, executive officers and principal shareholders of the Company and
the Bank and their affiliates have been customers of the Bank from time to time
in the ordinary course of business, and additional transactions are expected to
take place in the future. In accordance with applicable federal laws and
regulations, all loans by the Bank to such persons are made on substantially the
same terms, including interest rates and collateral, as those prevailing at the
time for comparable transactions with other persons, do not involve more than
the normal risk of collectability or embody other unfavorable features, and
comply with specified quantitative limits imposed by such federal laws and
regulations. At December 31, 1999, the aggregate amount of loans and extensions
of credit outstanding to such persons was approximately $3,424,016, which

21
<PAGE>
represented 53.55% of the total equity capital of the Bank as of such date.
Deposit accounts with Company and Bank officers, directors and their affiliates
totaled $3,478,000 at December 31, 1999.

None of the Bank's loans outstanding at any time during or subsequent to
1999 to directors, executive officers or principal shareholders of the Company
or the Bank or their associates is or has been on past due or non-accrual
status, has been restructured, or is considered by the Bank to be a problem
loan.

SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Section 16(a) of the 1934 Act requires the Company's directors and
executive officers, and persons who own more than 10% of the Company's Common
Stock, to file with the SEC initial reports of ownership and reports of changes
in ownership of Common Stock and other equity securities of the Company.
Directors, executive officers, and greater than 10% shareholders are required by
SEC regulation to furnish the Company with copies of all 16(a) reports they
file. To the Company's knowledge, based solely on a review of the copies of
such reports furnished to the Company and written representations that no other
reports were required during the fiscal year ended December 31, 1999, all
16(a) filing requirements applicable to directors, executive officers, and
greater than 10% beneficial owners were complied with by such persons.

EXPENSES OF SOLICITATION

The cost of soliciting proxies will be borne by the Company. In addition
to solicitations by mail, officers, directors and regular employees of the
Company may solicit personally or by telephone, telegraph or other means without
additional compensation. The Company will reimburse brokers, fiduciaries and
custodians for their costs in forwarding proxy materials to beneficial owners of
Common Stock held in their names.

INDEPENDENT PUBLIC ACCOUNTANTS

On March 17, 1998, the Company appointed Mauldin & Jenkins, LLC as the
Company's independent public accountants and dismissed the Company's former
auditors, Porter Keadle Moore, LLP. The decision to change accountants was
unanimously approved by the Company's Board of Directors. There were no
disagreements with the former auditors on any matter of accounting principles or
practices, financial statement disclosure or auditing scope or procedure with
respect to the Company's financial statements for the fiscal year ended December
31, 1997 or through the time of replacement.

Mauldin & Jenkins, LLC acted as the Company's independent public
accountants for the fiscal year ended December 31, 1999. Representatives of
Mauldin & Jenkins, LLC will be present at the Annual Meeting with the
opportunity to make a statement if they desire to do so and will be available to
answer questions concerning the financial affairs of the Company.

22
<PAGE>
SHAREHOLDERS' PROPOSALS AND NOMINATION PROCEDURES
FOR THE ANNUAL MEETING OF SHAREHOLDERS IN 2001

Director nominations and other proposals of shareholders intended to be
presented at the Annual Meeting of Shareholders in 2001 must be submitted to the
Company in accordance with the procedures set forth in Section 3.8 of the Bylaws
of the Company and in accordance with applicable rules of the SEC, including
Rule 14a-8. The effect of those provisions is that shareholders must submit
such nominations and proposals, together with certain related information
specified in the above-referenced section of the Bylaws, in writing to the
Company on or before December 31, 2000 in order for such matters to be included
in the Company's proxy materials for, and voted upon at, the 2001 Annual
Meeting. All such proposals, nominations and related information should be
submitted on or before such date by certified mail, return receipt requested, to
the Secretary of the Company, Holly R. Hunt, 501 Tri-County Plaza, Cumming,
Georgia 30040. A copy of the above-referenced section of the Bylaws will be
provided upon request in writing to the Secretary of the Company at such
address.

Pursuant to Section 3.8 of its Bylaws, the Company has established certain
nomination requirements for an individual to be elected as a director of the
Company at any annual or special meeting of the shareholders. These
requirements include, but are not limited to, the requirement that the
nominating shareholder provide the Company: (i) notice of any proposed director
within certain timeframes; (ii) the name and certain biographical information on
the nominee; and (iii) a sworn or certified statement by the shareholder that
indicates that the nominee has consented to the nomination and that the
shareholder believes that the nominee will stand for election and will serve if
elected. The chairman of any meeting of the shareholders may, for good cause
shown and with proper regard for the orderly conduct of the meeting, waive in
whole or in part the operation of Section 3.8 of the Company's Bylaws. These
provisions could reduce the likelihood that a third party could nominate and
elect individuals to serve on the Company's Board of Directors.

OTHER MATTERS

The management of the Company does not know of any matters to be presented
at the Annual Meeting other than those mentioned in this Proxy Statement. If
any other matters properly come before the Annual Meeting, the persons
designated as proxies will vote on such matters in accordance with their best
judgment.

The management of the Company urges you to attend the Annual Meeting and to
vote your Shares in person. Whether or not you plan to attend, please sign and
promptly return your proxy. Your proxy may be revoked at any time before it is
voted. Such proxy, if executed and returned, gives discretionary authority with
respect to any other matters that may come before the Meeting.

23
<PAGE>
ANNUAL REPORT ON FORM 10-KSB

Upon the written request of any person who proxy is solicited by this Proxy
Statement, the Company will furnish to such person without charge (other than
for exhibits) a copy of the Company's Annual Report on Form 10-KSB for the
fiscal year ended December 31, 1999, including financial statements and
schedules thereto, as filed with the SEC. Requests may be made to Forsyth
Bancshares, Inc., 501 Tri-County Plaza, Cumming, Georgia 30040, Attention:
Holly Hunt, Secretary of the Company.

By Order of the Board of Directors,

/s/ Timothy M. Perry
--------------------------------
TIMOTHY M. PERRY
President and Chief Executive Officer

Cumming, Georgia
April 21, 2000

24
<PAGE>
PROXY
-----
FORSYTH BANCSHARES, INC.
ANNUAL MEETING OF SHAREHOLDERS

The undersigned hereby appoints Timothy M. Perry and James J. Myers, or either
of them, each with full power of substitution as proxies to vote the stock of
the undersigned at the Annual Meeting of Shareholders of Forsyth Bancshares,
Inc. (the "Company") to be held at the Sawnee Community Center on May 16, 2000
at 10:00 a.m., local time, and at any and all adjournments or postponements
thereof (the "Annual Meeting").

1. ELECTION OF DIRECTORS
FOR ALL NOMINEES FOR DIRECTOR LISTED BELOW. WITHHOLD AUTHORITY
(except as marked to the contrary below) (to vote for all nominees listed)

Catherine M. Amos, Jeffrey S. Bagley, Danny M. Bennett, Michael P. Bennett,
Bryan L. Bettis, Talmadge W. Bolton, Thomas L. Bower III, Charles R.
Castleberry, Charles D. Ingram, Herbert A. Lang, Jr., John P. McGruder, James J.
Myers, Timothy M. Perry, Danny L. Reid, Charles R. Smith, Wyatt L. Willingham
and Jerry M. Wood

To withhold authority to vote for any individual nominee, write
that nominee's name in the space provided below.

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

(Continued and to be signed on reverse)

2. APPROVAL OF LONG TERM INCENTIVE PLAN FOR SELECTED KEY EMPLOYEES:

FOR ADOPTION OF LONG TERM INCENTIVE PLAN WITHHOLD AUTHORITY

3. IN THE DISCRETION OF THE PROXIES ON SUCH OTHER MATTERS AS MAY PROPERLY
COME BEFORE THE MEETING OR ANY ADJOURNMENTS THEREOF.

AUTHORIZED NOT AUTHORIZED

THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED BY THE
UNDERSIGNED SHAREHOLDER AND IN THE DISCRETION OF THE PROXIES. IF NO DIRECTION
IS MADE, THIS PROXY WILL BE VOTED "FOR" EACH OF THE PROPOSALS AND WITH
DISCRETIONARY AUTHORITY ON ALL OTHER MATTERS THAT MAY PROPERLY COME BEFORE THE
MEETING.

Dated , 2000
--------------------------

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

-----------------------------------
Signature (s) of Shareholder(s)

Please date and sign this proxy exactly as the names appear hereon. In the
case of joint tenants, each joint owner should sign. If a corporation, please
sign in full corporate name by president or other authorized officer. When
signing as attorney, executor, trustee, administrator or guardian, please give
full title as such. if a partnership, please sign in partnership name by
authorized person.

THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
AND MAY BE REVOKED BY THE SHAREHOLDER PRIOR TO ITS EXERCISE

25
<PAGE>
APPENDIX I
----------

LONG-TERM INCENTIVE PLAN
------------------------
OF FORSYTH BANCSHARES, INC.
---------------------------

ARTICLE I
---------
PURPOSE
-------

1.1 PURPOSE. The purpose of this Long-Term Incentive Plan is to
-------
provide a means through which Forsyth Bancshares, Inc., a Georgia corporation
(referred to herein as the "Company"), may attract able persons to enter the
employ of the Company or its subsidiaries and to provide a means whereby those
key employees upon whom the responsibilities of the successful administration
and management of the Company and its subsidiaries rest, and whose present and
potential contributions to the welfare of the Company are of importance, can
acquire and maintain stock ownership, thereby strengthening their commitment to
the welfare of the Company and their desire to continue their employment with
the Company or its subsidiaries.

A further purpose of the Plan is to provide such key employees with
additional incentive and reward opportunities designed to enhance the profitable
growth of the Company. So that the appropriate incentive can be provided, the
Plan provides for the granting of non-qualified Options, Incentive Stock
Options, Stock Appreciation Rights, Restricted Stock Awards, and Performance
Shares, or any combination of the foregoing.

1.2 ESTABLISHMENT. The Plan is effective as of January 1, 2000, and
-------------
subject to the provisions of Article XII hereof, Awards may be made as provided
herein for a period of ten (10) years after such date. The Plan shall continue
in effect after such ten (10) year period until all matters relating to the
payment of Awards and administration of the Plan have been settled.

ARTICLE II
----------
DEFINITIONS
-----------

2.1 "Award" means, individually or collectively, any Option, Stock
Appreciation Right, Restricted Stock Award or Performance Share Award.

2.2 "Award Period" means a period of not less than three (3) years and
relates to Performance Share Awards as provided in Article VIII of the Plan.

2.3 "Bank" means The Citizens Bank of Forsyth County, a Georgia banking
corporation.

2.4 "Board" means the Board of Directors of the Company.

2.5 "Code" means the Internal Revenue Code of 1986. Reference in the
Plan to any section of the Code shall be deemed to include any amendments or
successor provisions to such section and any regulations promulgated under such
section.

2.6 "Committee" means the Personnel Committee of the Board, referred to
in Article III hereof, or any successor committee hereafter designated by the
Board to administer the Plan.

26
<PAGE>
2.7 "Company" means Forsyth Bancshares, Inc., a Georgia corporation.

2.8 "Date of Grant" means the date on which the granting of an Award is
authorized by the Board or such later date as may be specified by the Board in
such authorization.

2.9 "Eligible Employee" means any person regularly employed by the
Company or a Subsidiary on a full-time salaried basis who satisfies all of the
requirements of Article V hereof.

2.10 "Fair Market Value" means, as applicable and in the following order
of priority, (a) the closing market price of the Stock reported in the
consolidated trading prices for any national securities exchange on which the
Stock is listed on the Valuation Date, or (b) if the Stock is actively traded
over the counter, the mean between the closing bid and asked price of the Stock
on the Valuation Date, or (c) if the Stock is neither listed on a national
securities exchange nor actively traded over the counter, the fair market value
of the Stock determined in good faith by the Board as provided in Proposed
Treasury Regulation 1.422A-2(e)(2)(ii), as of the Valuation Date.

2.11 "Holder" means an Eligible Employee who has been granted an Option,
a SAR, a Restricted Stock Award or a Performance Share Award.

2.12 "Incentive Stock Option" means an Option within the meaning of 422
of the Code.

2.13 "Normal Termination" means Termination:

(a) At or after (i) age 65, or (ii) age 60 with ten (10) or more
full years of service with the Company (including service with a Subsidiary),

(b) By reason of permanent and total disability as defined in Code
22(e)(3), or

(c) With the written approval of the Company, given in the context
of the Company's acknowledgment that any Option granted under a shareholder
approved stock option plan that has not been exercised by the terminating
employee but is then exercisable by him will not lapse by reason of such
Termination unless it is for "Cause" (as defined in Section 13.1(c) hereof).

2.14 "Option" means an Award granted under Article VI of the Plan and
includes both non-qualified Options and Incentive Stock Options.

2.15 "Performance Share" means an Award granted under Article VIII of
the Plan.

2.16 "Plan" means this Forsyth Bancshares, Inc. Long-Term Incentive
Plan, including any Plan amendments adopted in accordance with Article XII
hereof.

2.17 "Restricted Stock Award" means an Award granted under Article IX
of the Plan.

2.18 "Restriction Period" means a period of not less than three (3)
years and relates to Restricted Stock Awards as provided in Article IX of the
Plan.

2.19 "Stock" means the no par value Common Stock of the Company and,
after substitution as provided in Article XI hereof, such other stock as shall
be substituted therefor.

27
<PAGE>
2.20 "Stock Appreciation Right" or "SAR" means the right of the Holder
of any unexercised Option granted under a shareholder approved stock option plan
to receive pursuant to the terms of the Option, whether by the original grant of
such Option or by an amendment thereof, a number of shares of Stock, or at the
election of the Company, cash or a combination of cash and shares of Stock,
based on the increase in the value of the optioned shares of Stock.

2.21 "Subsidiary" means any corporation, partnership, limited liability
company or other entity in which a majority of the outstanding voting stock or
aggregate voting power is beneficially owned, directly or indirectly, by the
Company. For purposes of the Plan, the term "Subsidiary" expressly includes, but
is not limited to, the Bank.

2.22 "Termination" means an individual's ceasing to be an employee of
the Company or any of its Subsidiaries for any reason other than such
individual's death.

2.23 "Valuation Date" means any date specified by the provisions of the
Plan or by the Board as the date fixed determining Fair Market Value.

ARTICLE III
-----------
ADMINISTRATION
--------------

3.1 ADMINISTRATION BY COMMITTEE. The Committee shall administer the
-----------------------------
Plan. A majority of the Committee shall constitute a quorum. The acts of a
majority of the members present at any meeting at which a quorum is present or
acts approved in writing by a majority of the Committee shall be deemed the acts
of the Committee.

Subject to the approval of the Board and any limitations expressly set
forth in the Plan, the Committee shall have exclusive power to:

(a) Select the Eligible Employees to participate in the Plan;

(b) Determine the Awards to be made to each Eligible Employee
selected;

(d) Determine the conditions, including any performance
requirements, to which the payment of Awards shall be subject; and

(e) Prescribe the written agreements and other forms evidencing
Awards.

3.2 COMMITTEE TO MAKE RULES AND INTERPRET PLAN. The Committee shall
---------------------------------------------
have the authority, subject to the provisions of the Plan, to establish, adopt
or revise such rules and regulations and to make all such determinations
relating to the Plan as the Committee may deem necessary or advisable for the
administration of the Plan. The Committee's interpretation of the Plan, or any
Awards granted pursuant thereto, and all decisions and determinations by the
Committee with respect to the Plan shall be final, binding and conclusive on all
parties unless otherwise determined by the Board.

3.3 COMMITTEE MEMBERS INELIGIBLE. No Eligible Employee shall be a
------------------------------
member of the Committee. In connection with the Board's review and approval of
any Award proposed by the Committee, any Eligible Employee who is a member of
the Board shall be ineligible to vote.

28
<PAGE>
ARTICLE IV
----------
OPTIONS, STOCK APPRECIATION RIGHTS, RESTRICTED
----------------------------------------------
STOCK AWARDS AND PERFORMANCE SHARE AWARDS;
------------------------------------------
SHARES SUBJECT TO THE PLAN
--------------------------

4.1 COMMITTEE TO GRANT AWARDS. The Committee may, with the approval of
-------------------------
the Board, grant Awards to one or more Eligible Employees as determined by the
Committee in accordance with the provisions of Article V, provided that:

(a) Subject to Article XI, the aggregate number of shares of Stock
made subject to Awards during the term of the Plan may not exceed eighty
thousand (80,000).

(b) Such shares of Stock shall be deemed to have been used in
payment of Performance Shares regardless of whether such shares are actually
delivered or the Fair Market Value equivalent thereof is paid in cash. To the
extent that an Award lapses or the rights of its Holder terminate, any shares of
Stock subject to such Award shall again be available for the grant of an Award.

(c) Stock delivered by the Company in settlement of an Award may
be authorized and unissued Stock or Stock held in the treasury of the Company or
may be purchased on the open market or by private purchase. Any private
purchase shall be made at prices no higher than Fair Market Value at the time of
purchase.

ARTICLE V
---------
ELIGIBILITY
-----------

5.1 OFFICERS AND KEY EMPLOYEES ELIGIBLE. Officers and key employees of
-----------------------------------
the Company and its Subsidiaries (including Officers or employees who are
members of the Board, but excluding directors who are not Officers or employees)
who, in the opinion of the Committee, are mainly responsible for the continued
growth and development and financial success of the business of the Company or
one of its Subsidiaries shall be eligible to be granted Awards under the Plan.
Subject to the provisions of the Plan, the Committee shall, from time to time,
select from such Eligible Employees those to whom Awards shall be granted and
determine the number of shares subject to such Awards and the other terms and
conditions thereof.

ARTICLE VI
----------
STOCK OPTIONS
-------------

6.1 GRANT OF OPTIONS. One or more Options may be granted to any
------------------
Eligible Employee.

6.2 CONDITIONS OF OPTIONS. Each Option so granted shall be subject to
----------------------
the following conditions:

(a) OPTION PRICE. The option price per share of Stock shall be
-------------
set by the grant but shall in no instance be less than Fair Market Value on the
Date of Grant.

(b) FORM OF PAYMENT. At the time of the exercise of the Option,
-----------------
the option price shall be payable in cash and/or shares of Stock valued at Fair
Market Value on the business day immediately preceding the day on which the
Option is exercised.

29
<PAGE>
(c) OTHER TERMS AND CONDITIONS. If the Holder has not died or
-----------------------------
terminated employment, the Option shall become exercisable in cumulative annual
installments in such manner and within such period or periods, not to exceed ten
(10) years from its Date of Grant, as set forth in the Stock Option Agreement,
upon payment in full of the exercise price in cash and/or shares of Stock.

(i) If not exercised, the Option shall lapse in the following
situations: (A) ten (10) years after the Date of Grant, (B) three (3)
months after Normal Termination, or (C) any earlier time set by the Stock
Option Agreement.

(ii) If the Holder terminates employment other than by Normal
Termination, the Option shall lapse at the time of Termination.

(iii) If the Holder dies within the option period, or within the
option period and within three (3) months after Normal Termination, the
Option shall lapse unless it is exercised within the option period and in
no event later than fifteen (15) months after the date of death by the
Holder's legal representative or representatives or by the person or
persons entitled to do so under the Holder's last will and testament, or,
if the Holder shall fail to make testamentary disposition of such Option or
shall die intestate, by the person or persons entitled to receive said
Option under the applicable laws of decent and distribution.

(d) SPECIAL LIMITATIONS ON INCENTIVE STOCK OPTIONS.
---------------------------------------------------
Notwithstanding any other provisions of the Plan, an Incentive Stock Option
shall not be exercisable while there is outstanding any Incentive Stock Option
previously granted to the Holder under the Plan. For purposes of this Section
6.2(d), an Incentive Stock Option shall be treated as outstanding until such
Option and all installments thereof have accrued and have been exercised in full
or have expired by reason of lapse of time. No person who owns more than ten
percent (10%) of the combined voting power of the Company or any Subsidiary,
after applying the attribution rules of 424(d) of the Code, shall be eligible
to receive any Incentive Stock Options.

(e) STOCK OPTION AGREEMENT. Each Option granted under the Plan
------------------------
shall be evidenced by a "Stock Option Agreement" between the Company and the
Holder containing such provisions as are determined by the Committee, including
without limitation all provisions that may be required to qualify as an
Incentive Stock Option under 422 of the Code. Without limiting the authority
of the Committee to include additional provisions, any Stock Option Agreement
shall be subject to the following terms and conditions:

(i) Any Option or portion thereof that is exercisable shall be
exercisable for the full amount or for any part thereof, except as
otherwise expressly set forth in the Stock Option Agreement.

(ii) Every share of Stock purchased through the exercise of an Option
shall be paid for in full at the time of exercise. Each Option shall cease
to be exercisable, as to any such share, when the Holder purchases the
share or exercises a related SAR or when the Option lapses.

(iii) Options shall not be transferable by the Holder except by will
or under the laws of descent and distribution and shall be exercisable
during the Holder's lifetime only by the Holder.

30
<PAGE>
(iv) In consideration for the granting of each Option, the Holder
shall agree to remain in the employ of the Company or one or more of its
Subsidiaries at the pleasure of the Company or such Subsidiary for a
continuous period of at least one year after the Date of Grant. In the
discretion of the Committee, this requirement may be waived if the Holder
during said one year period becomes incapacitated or enters the active
service of the military forces of the United States or other United States
service connected with national defense activities. The Holder shall agree
that during such employment, he or she will devote his or her entire
business time, energy and skills to the service and interests of the
Company or such Subsidiary; provided, however, that the Holder shall be
--------- -------
entitled to devote a reasonable portion of his or her time to civic,
political, religious and personal business matters not competitive with
the Company or its Subsidiaries, and shall also be entitled to vacation,
sick leave and other absences in accordance with the regular policies of
the Company and its Subsidiaries.

(f) INDIVIDUAL DOLLAR LIMITATIONS. In the case of an Incentive
-------------------------------
Stock Option, the aggregate Fair Market Value (on the business day immediately
preceding the Date of Grant) of the Stock for which any employee may be granted
Incentive Stock Options that first become exercisable in any calendar year may
not exceed $100,000 (or such other individual grant limit as may be in effect
under the Code on the Date of Grant).

ARTICLE VII
-----------
STOCK APPRECIATION RIGHTS
-------------------------

7.1 GRANT OF SARS. Any Option granted under a shareholder approved
---------------
stock option plan may include a SAR, either at the time of grant or by
amendment.

7.2 CONDITIONS OF SARS. Such SAR shall be subject to such terms and
--------------------
conditions not inconsistent with the Plan as the Committee shall impose,
including but not limited to the following:

(a) RIGHT TO EXERCISE. A SAR shall be exercisable to the extent
-------------------
that the related Option is exercisable and only with the consent of the
Committee.

(b) FAILURE TO EXERCISE. If on the last business day of the stock
-------------------
option period the Fair Market Value of the Stock exceeds the option price, and
the Holder has not exercised the SAR, the SAR shall be deemed to have been
exercised by the Holder on such last day of the stock option period.

(c) PAYMENT. An exercisable SAR shall entitle the Holder to
-------
surrender unexercised the Option in which it is included, or any portion
thereof, and to receive in exchange therefor that number of shares of Stock
having an aggregate value equal to the excess of the value of one share over the
option price per share specified in such Option, multiplied by the number of
shares subject to the Option, or the portion thereof, which are so surrendered.
The Committee, in its sole discretion, may elect to settle the obligation of the
Company arising out of the exercise of a SAR by the payment of cash or partially
by the payment of cash and partially by the delivery of shares of Stock, the
total value of which shall in either case be equal to the aggregate value of the
SAR, as determined under the preceding sentence. The Committee shall also have
the right to place such limitations and restrictions on the Company's obligation
to make such cash payments or deliver shares under SARs as the Committee, in its
sole discretion, deems to be in the best interest of the Company. The term
"value" as applied to shares delivered under this Section 7.2(c) shall be their
Fair Market Value on the business day immediately preceding the date on which
the SAR is exercised. To the extent that a SAR included in an Option is
exercised, such Option shall be deemed to have been exercised, and shall not be
deemed to have lapsed.

(d) OTHER LIMITATIONS. A SAR shall be subject to such other
------------------
limitations as the Committee and/or the Stock Option Agreement shall impose.

31
<PAGE>
ARTICLE VIII
------------
PERFORMANCE SHARES
------------------

8.1 GRANT OF PERFORMANCE SHARES. Grants of Performance Shares may be
-----------------------------
made to any Eligible Employee during the term of the Plan. Such Performance
Shares shall be paid out in full or in part on the basis of the Company's or a
Subsidiary's performance following the beginning of the Company's fiscal year in
which the Award is made as hereinafter set forth. In determining the size of
Performance Share Awards, the Committee shall take into account a Holder's
responsibility level, performance, potential, cash compensation level, and the
Fair Market Value of the Stock at the time of the Award, as well as such other
factors as the Committee deems appropriate. The Committee shall not, over the
entire term of the Plan, grant to any single Holder more than thirty percent
(30%) of the maximum number of Performance Shares that may be granted under the
Plan. Awards cancelled or portions of Awards not paid out in full for any
single Holder shall not be included for purposes of this limitation. Grants of
Performance Shares shall be deemed to have been made on January 1 of the year in
which the grant is made. If any Performance Shares granted under the Plan shall
be forfeited, cancelled or not paid out in full, such Performance Shares may
again be awarded under the Plan. Shares of Stock delivered upon the payment of
Performance Shares may be either treasury shares, shares purchased for the
account of the participant, authorized and unissued shares, or any combination
thereof.

8.2 CONDITIONS OF PERFORMANCE SHARE AWARD. An award of a Performance
---------------------------------------
Share shall be subject to the following terms and conditions:

(a) PERFORMANCE SHARE ACCOUNT. Performance Shares shall be
---------------------------
credited to a Performance Share account to be maintained for each such Holder.
Each Performance Share shall be deemed to be equivalent to one share of Stock.
The Award of Performance Shares under the Plan shall not entitle the Holder to
any interest in or to any dividends declared on the Stock, or to any voting or
other rights of a shareholder. The value of the Performance Shares in a
Holder's Performance Share account at the time of Award or the time of payment
shall be the Fair Market Value at such time of an equivalent number of shares of
the Stock (subject to the limitation provided in Section 8.2(c) hereof).

(b) RIGHT TO PAYMENT OF PERFORMANCE SHARES. Following the end of
--------------------------------------
the Award Period, the Holder of a Performance Share shall be entitled to receive
payment of an amount based on the achievement of the performance measures for
such Award Period, as determined by the Committee. The Committee shall have the
right to establish performance measures within a reasonable time after the
beginning of the Award Period but subject to such later revisions as the
Committee shall deem appropriate to reflect significant, unforeseen events or
changes.

(c) FORM AND TIMING OF PAYMENT. No payment of Performance Shares
---------------------------
shall be made prior to the end of an Award Period. Payment therefor shall be
made as soon as practicable after the receipt of audited financial statements
relating to the last year of such period.

32
<PAGE>
(d) PAYMENT OF AWARD. The payment to which a Holder of
------------------
Performance Shares shall be entitled at the end of an Award Period shall be a
dollar amount equal to the Fair Market Value on the last day of the Award Period
of the number of shares of Stock equal to the number of Performance Shares
earned and payable to the Holder in accordance with Section 8.2(b) hereof.
Notwithstanding the foregoing, the dollar amount payable for the Performance
Shares shall not exceed by more than 200% the
Fair Market Value of such Performance Shares on their Date of Grant. Payment
shall normally be made one-half in cash and one-half in Stock. However, the
Committee may authorize payment in such other combinations of cash and Stock, or
all in cash or all in Stock, as the Committee deems appropriate. Any issuance
of shares of Stock in payment of Performance Shares shall be subject to the
authorization of the Board.

The number of shares of Stock to be paid in lieu of cash will be determined
by dividing the portion of the payment not paid in cash by:

(i) If Stock is issued in connection with the payment of Performance
Shares, the Fair Market Value of the Stock on the business day immediately
preceding the date on which the Stock is issued; or

(ii) If Stock is purchased by the Company in connection with the
payment of Performance Shares, the price per share paid for such Stock.

8.3 TERMINATION OF HOLDER DURING AWARD PERIOD. In the event a Holder
-------------------------------------------
terminates employment during an Award Period, the payout of Performance Shares
will be as follows:

(a) Resignation or discharge (i.e., other than under Sections
8.3(b) or (c) hereof)-The Award will be completely forfeited;

(b) Normal Termination-Payout will be at the end of the Award
Period and prorated for service during the Award Period;

(c) Early retirement (i.e., under circumstances other than Normal
Termination) pursuant to a Company or Subsidiary sponsored retirement plan-

(i) If at the Holder's election, the Award will be completely
forfeited;

(ii) If at the Company's election, payout will be at the end of the
Award period and prorated for service during the Award Period;

(d) Death or Disability-Payout will be at the end of the Award
Period and prorated for service during the Award Period.

33
<PAGE>
ARTICLE IX
----------
RESTRICTED STOCK AWARDS
-----------------------

9.1 GRANT OF RESTRICTED STOCK AWARDS. The Committee may grant a
------------------------------------
Restricted Stock Award to any Eligible Employee. At the time a Restricted Stock
Award is made, the Committee shall establish a Restriction Period applicable to
such Award as hereinafter provided, which shall not be less than three (3)
years. Except as expressly provided in Article XIII of the Plan, the
Restriction Period applicable to a particular Restricted Stock Award shall not
be changed.

9.2 CONDITIONS OF RESTRICTED STOCK AWARDS. The grant of a Restricted
---------------------------------------
Stock Award shall be subject to the following terms and conditions:

(a) RESTRICTION PERIOD. Stock awarded pursuant to a Restricted
-------------------
Stock Award shall be represented by a stock certificate registered in the name
of the Holder. The Holder shall have the right to enjoy all shareholder rights
during the Restriction Period, with the exception that:

(i) The Holder shall not be entitled to delivery of the stock
certificate until the Restriction Period shall have expired;

(ii) The Company may issue the share certificate subject to such
restrictive legends and/or Stock transfer instructions as the Company deems
appropriate, and/or provide for retention of custody of the Stock by the
Company during the Restriction Period;

(iii) The Holder may not sell, transfer, pledge, exchange,
hypothecate or otherwise dispose of the Stock during the Restriction
Period;

(iv) Cash and stock dividends may be either currently paid or
withheld by the Company for the Holder's account, provided that, in the
discretion of the Committee, interest may be paid on the amount of cash
dividends withheld at a rate and subject to such terms as may be determined
by the Committee; and

(v) A breach of the terms and conditions established by the
Committee pursuant to the Restricted Stock Award will result in forfeiture
of the stock, and any cash or stock dividends withheld thereon.

(b) ISSUANCE OF STOCK. If Stock is issued in connection with a
-------------------
Restricted Stock Award, the value of the Stock for the Company's record keeping
purposes shall be its Fair Market Value on the business day immediately
preceding the date of issuance.

(c) PAYMENT FOR RESTRICTED STOCK. A Holder shall not be required
-----------------------------
to make any payment for Stock received pursuant to a Restricted Stock Award.

9.3 TERMINATION OF HOLDER DURING RESTRICTION PERIOD. In the event a
--------------------------------------------------
Holder terminates employment during a Restriction Period, an Award will be
forfeited as follows:

(a) Resignation or discharge (i.e., other than under Sections
9.3(b) or (c) hereof)-The Award will be completely forfeited.

(b) Normal Termination-The Award will be prorated for service
during the period and will be received as soon as practicable following
retirement.

(c) Early retirement (i.e., under circumstances other than Normal
Termination) pursuant to a Company or Subsidiary sponsored retirement plan-

(i) If at the Holder's election, the Award will be completely
forfeited.

(ii) If at the Company's election, the Award will be prorated for
service during the Restriction Period and will be received as soon as
practicable following retirement.

(d) Death or Disability-The Award will be prorated for service during the
Restriction Period and received as soon as practicable following death or
disability.

34
<PAGE>
ARTICLE X
---------
GENERAL
-------

10.1 GOVERNMENTAL REGULATIONS. The obligation of the Company to make
-------------------------
payment of Awards in Stock or otherwise shall be subject to all applicable laws,
rules, and regulations, and to such approvals by government agencies as may be
required or appropriate in the determination of counsel for the Company. The
Company shall be under no obligation to register under the Securities Act of
1933, as amended (the "1933 Act"), or the Georgia Securities Act of 1973 (the
"Georgia Act") any of the shares of Stock issued, delivered or paid in
settlement under the Plan. If the shares of Stock issued under the Plan may
under certain circumstances be exempt from registration under the 1933 Act or
the Georgia Act, the Company may restrict the transfer of such shares in such
manner as the Company deems advisable to ensure the availability of any such
exemption.

10.2 TAX WITHHOLDING. The Company or a Subsidiary, as appropriate,
----------------
shall have the right to deduct from all Awards paid in cash any federal, state
or local taxes required by law to be withheld with respect to such cash payments
and, in the case of Awards paid in Stock, the employee or other person receiving
such Stock may, as a condition to the receipt of such Stock, be required to pay
to the Company or a Subsidiary, as appropriate, the amount of any such taxes
that the Company or Subsidiary is required to withhold with respect to such
Stock.

10.3 CLAIM TO AWARDS AND EMPLOYMENT RIGHTS. No employee or other
------------------------------------------
person shall have any claim or right to be granted an Award under the Plan.
Neither this Plan nor any action taken hereunder shall be construed under any
circumstances as giving any employee any right to be retained in the employment
of the Company or a Subsidiary.

10.4 BENEFICIARIES. Any payment of Awards due under the Plan to a
-------------
deceased participant shall be paid to the beneficiary designated by the
participant and filed with the Committee. If no such beneficiary has been
designated or survives the participant, payment shall be made to the
participant's legal representative. A beneficiary designation may be changed or
revoked by a participant at any time, provided that the change or revocation is
set forth in a written instrument signed by the participant and filed with the
Committee.

10.5 NONTRANSFERABILITY. A person's rights and interests under the
------------------
Plan, including any amounts payable hereunder, may not be assigned, pledged or
transferred except, in the event of an employee's death, to a designated
beneficiary as expressly provided in the Plan, or in the absence of such
designation, by will or pursuant to the laws of descent and distribution.

35
<PAGE>
10.6 INDEMNIFICATION. Each person who is or shall have been a member
---------------
of the Committee or of the Board shall be indemnified and held harmless by the
Company from and against any loss, cost, liability or expense that may be
imposed upon or reasonably incurred by such person in connection with or
resulting from any claim, action, suit or proceeding initiated by reason of any
action or failure to act under the Plan, and against and from any and all
amounts paid by such person in satisfaction of a judgment entered in any such
action, suit or proceeding against him. As an express condition to any right to
indemnification, the person asserting such right shall give the Company the
right and opportunity, at the Company's expense, to control and defend any
action giving rise to the claim for indemnification before the person asserting
such right undertakes to handle and defend such claim on his or her own behalf.
The foregoing right of indemnification is in addition to any indemnification
rights to which such persons may be entitled under the Company's Articles of
Incorporation or Bylaws as a matter of law, and any discretionary power that the
Company may have to indemnify or hold such persons harmless.

10.7 RELIANCE ON REPORTS. Each member of the Committee and each member
-------------------
of the Board shall be fully justified in relying or acting in good faith upon
any report made by the independent public accountants of the Company and its
Subsidiaries and upon any other information furnished in connection with the
Plan by any person or persons other than such member. In no event shall any
person who is or shall have been a member of the Committee or the Board be
liable for any determination made or other action taken or any omission to act
in reliance upon any such report or information, including the furnishing of
information, if undertaken in good faith.

10.8 RELATIONSHIP TO OTHER BENEFITS. No payment under the Plan shall
--------------------------------
be taken into account in determining any benefits under any pension, retirement,
profit sharing, group insurance or other benefit plan of the Company or any
Subsidiary.

10.9 EXPENSES. The expenses of administering the Plan shall be borne
--------
by the Company and its Subsidiaries.

10.10 CONSTRUCTION. Any pronouns used herein, whether used in the
------------
masculine, feminine or neuter gender shall include all other genders as
appropriate. The singular shall include the plural, and vice versa. The titles
and headings of the articles and sections in the Plan are for convenience of
reference only, and shall not affect the meaning or construction of the
provisions of the Plan.

ARTICLE XI
----------
CHANGES IN CAPITAL STRUCTURE
----------------------------

11.1 ADJUSTMENT FOR CHANGES IN CAPITAL STRUCTURE. Options, SARs,
------------------------------------------------
Restricted Stock Awards, Performance Share Awards and any agreements evidencing
such Awards shall be subject to appropriate adjustment, as determined in good
faith by the Committee, as to the number and price of shares of Stock, and any
other terms included in such Awards, in the event of any changes in the
Company's capitalization by reason of stock dividends, stock splits,
recapitalizations, reorganizations, mergers, consolidations, combinations,
exchanges or other relevant changes in capitalization occurring after the Date
of Grant of any such Award. In the event of any such change, the aggregate
number of shares of Stock available under the Plan shall also be adjusted as the
Committee deems appropriate. Any determination by the Committee pursuant to
this Section 11.1 shall be conclusive on all persons.

36
<PAGE>
------
ARTICLE XII
-----------
AMENDMENTS AND TERMINATION
--------------------------

12.1 AMENDMENT OR TERMINATION OF PLAN BY BOARD. The Board may at any
-------------------------------------------
time terminate the Plan or, with the express written consent of an individual
participant, cancel or reduce or otherwise alter such participant's outstanding
Awards if the tax, accounting or other effects of the Plan or potential payments
hereunder would not be in the best interest of the Company. The Board may at
any time, or from time to time, amend or suspend and, if suspended, reinstate,
the Plan in whole or in part; provided, however, that without further
-------- -------
shareholder approval the Board shall not:

(a) Increase the maximum number of shares that may be issued on
the exercise of Options, SARs, or pursuant to Restricted Stock Awards or
Performance Share Awards, except as provided in Articles VIII and XI hereof;

(b) Change the minimum Option price;

(d) Extend the termination date of the Plan; or

(e) Permit the granting of an Award to a person who is not an
Eligible Employee.

ARTICLE XIII
------------
PAYMENTS UPON A CHANGE IN CONTROL
---------------------------------

13.1 DEFINITIONS. For purposes of this Article XIII the following
-----------
definitions shall apply:

(a) CHANGE IN CONTROL. A Change in Control of the Company shall
-----------------
be deemed to have occurred if:

(i) Any person (as such term is used in 13(d) and 14(d) of the
Securities Exchange Act of 1934, as amended (the "1934 Act"), but excluding
the Company and any Subsidiaries), should acquire greater than fifty
percent (50%) of the combined voting power of the then outstanding
securities of the Company or the Bank as a result of a tender or exchange
offer, open market purchases, privately-negotiated purchases or otherwise;
or

(ii) The shareholders of the Company should approve any one of the
following transactions:

(A) Any consolidation or merger of the Company or the Bank in
which the Company, the Bank or another Subsidiary is not the surviving
corporation immediately after the merger; or

(B) Any sale, lease, exchange or other transfer (in one
transaction or a series of related transactions) of all, or
substantially all, the assets of the Company or the Bank; or

37
<PAGE>
(C) During any period of two (2) consecutive years, the
individuals who at the beginning of such period constitute the Board
cease for any reason to constitute at least a majority thereof, unless
the election or the nomination for election by the Company's
shareholders of each new director was approved by a vote of at least
two-thirds (2/3) of the directors then still in office who were
directors at the beginning of such period.

(b) PRICE. The applicable price under Section 13.2 hereof for
-----
SARs, and for options as to which no SARs have been granted, shall be the excess
of the highest of:

(i) The highest Fair Market Value during the ninety (90) day
period preceding the date of exercise;

(ii) The highest price per share for the Stock included in a
filing made on any Schedule 13D pursuant to 13(d) of the 1934 Act
referred to in Section 13.1(a) above and paid within the ninety (90)
day period preceding the date of such report;

(iii) The highest price paid in any tender or exchange offer
referred to in Section 13.1(a) above and paid at the time of exercise
or within the ninety (90) day period preceding such exercise (other
than a tender offer by the Company or any Subsidiary); or

(iv) The price for a share of Stock to be paid in any cash merger
or similar transaction referred to in Section 13.1(a) above and
approved by the Company's shareholders within the ninety (90) day
period preceding the date of exercise;

over the option price, except that the price under Section 13.2 hereof for
Incentive Stock Options and SARs granted with respect to Incentive Stock Options
shall in all cases be limited to the spread between the Fair Market Value of the
Stock on the date of exercise and the option price.

(c) CAUSE. For purposes of this Article XIII, the employment of a
-----
Holder shall be deemed to have been terminated by the Company for "Cause" if
such Holder has:

(i) Engaged in one or more acts constituting a felony, or
involving fraud or serious moral turpitude; or

(ii) Willfully refused (except by reason of incapacity due to
accident or illness) to perform substantially his or her duties, and
such refusal shall have resulted in demonstrable injury to the Company
or any Subsidiary; or

(iii) Willfully engaged in misconduct materially injurious to the
Company or any Subsidiary.

No act or failure to act on such Holder's part shall, for purposes of this
Article XIII, be considered "willful" unless done, or omitted to be done,
without a reasonable belief that the action or omission was in the best interest
of the Company and its Subsidiaries. Notwithstanding the foregoing, such Holder
shall not be deemed to have been terminated for Cause unless and until the
Company shall have delivered to the Holder a copy of a resolution, duly adopted
by the affirmative vote of a majority of the entire membership of the Board,
finding that in the good faith opinion of the Board the Holder is guilty of
conduct constituting Cause for termination, and specifying the nature of such
conduct in reasonable detail.

38
<PAGE>
(d) GOOD REASON. For purposes of this Article XIII, "Good Reason"
-----------
shall be deemed to exist under any of the following circumstances:

(i) A Holder has been assigned duties inconsistent with his or
her position, duties, responsibilities and status with the Company or
a Subsidiary immediately prior to a Change in Control, or has been
assigned reporting responsibilities, titles or positions of a lesser
scope than those in effect immediately prior to a Change in Control,
or has been removed from, or not re-elected to, any of such positions,
except in connection with the termination of his or her employment for
Cause;

(ii) The Company or a Subsidiary has reduced such Holder's base
salary as in effect immediately prior to a Change in Control;

(iii) The Company or a Subsidiary has required such Holder to be
based anywhere other than the Company's principal executive offices in
Cumming, Georgia, its branch office in the Midway community, or any
other location where such Holder was based immediately prior to a
Change in Control, except for required travel on the Company's
business or in the event such Holder consents to any such relocation;

(iv) The Company has failed to continue in effect any benefit,
retirement or compensation plan, stock bonus, stock option, stock
appreciation rights plan, life insurance plan, health plan or
disability plan in which such Holder is participating at the time of a
Change in Control (or a plan providing substantially similar
benefits), or the Company has taken any action that would adversely
affect such Holder's participation in or materially reduce his or her
benefits under any of such plans or deprive such Holder of any
material fringe benefit or perquisite enjoyed by him or her at the
time of the Change in Control, or the Company has failed to provide
such Holder with the number of paid vacation days to which he or she
is then entitled in accordance with the Company's normal vacation
policy in effect prior to the Change in Control.

13.2 OCCURRENCE OF CHANGE IN CONTROL. Upon the occurrence of a Change
--------------------------------
in Control:

(a) All Incentive Stock Options and non-qualified Options shall
become immediately exercisable in full for the remainder of their terms.

(b) Optionees may require the Company to purchase the Options as
to which no SARs have been granted for cash for a period of sixty (60) days
following the occurrence of a Change in Control at the price specified in
Section 13.1(b)(ii) hereof, provided that Options granted to officers and
directors, in order to be subject to this purchase requirement, must have been
held for at least six (6) months after the Date of the Grant.

(c) All SARs shall become immediately exercisable in full for cash
for a period of sixty (60) days following the occurrence of a Change in Control
at the price specified in Section 13.1(b)(ii) above, provided that SARs held by
officers and directors, in order to be subject to this purchase requirement must
have been outstanding for at least six (6) months at the time the employee
exercises such SARs.

(d) All restrictions on Restricted Stock shall expire,
notwithstanding that the Change in Control occurs prior to the expiration of
otherwise applicable Restriction Periods.

39
<PAGE>
(e) All Performance Shares shall become immediately payable in
cash, notwithstanding that the Change in Control occurs prior to: (i) the
achievement of the performance measures as established by the Committee, or (ii)
the end of an Award Period. The amount of such payment will be based upon the
highest of the per share prices described in Section 13.1(b) hereof.

(f) For a period of three (3) years after a Change in Control, all
non-qualified Options and all Incentive Stock Options will remain exercisable
for a period of ninety (90) days following (i) termination of a Holder's
employment by the Company other than for Cause, or (ii) resignation by the
Holder for Good Reason, to the extent that such Options are not otherwise
exercisable pursuant to other provisions of the Plan.

IN WITNESS WHEREOF, pursuant to the approval of its Board of Directors and
shareholders, the Company hereby adopts this Long Term Incentive Plan, effective
as of January 1, 2000.

Forsyth Bancshares, Inc.

By:
- --------------------------- -----------------------------
Witness Timothy M. Perry, President

40
<PAGE>
APPENDIX II
-----------

SUPPLEMENTAL INFORMATION PURSUANT TO
------------------------------------
ITEM 10 OF SCHEDULE 14A
-----------------------

The foregoing proxy materials include a proposal for shareholder approval
of a Long Term Incentive Plan (the "Plan"), which may include options or other
rights to acquire the Company's shares. Accordingly, the following supplemental
information is provided to the Commission pursuant to instruction 5 of Item 10
on Schedule 14A:

(1) Grants of "Awards" under the Plan are discretionary. In addition,
if approved by the Company's shareholders, the Plan must be submitted for
approval by the Georgia Department of Banking and Finance prior to the issuance
of any Awards. Accordingly, there is no fixed timetable or date for the first
issuance of Awards, including options or other rights, or the first issuance of
shares pursuant to such options or rights.

(2) It is anticipated that the initial Awards and shares will qualify
for one or more exemptions from registration pursuant to the intrastate and
limited offering exemptions. The facts that support this conclusion are set
forth in the foregoing proxy materials. Without limitation, such facts include
the following:

(a) At the current level of staffing and operations, it is
anticipated that no more than 6 employees will qualify to participate
in the Plan;

(b) All of the intended participants in the Plan are Georgia
residents; and

(c) Participation in the Plan is limited to senior management and
administrative employees who have access to extensive information
regarding the Company's operations and financial condition.

(3) The foregoing proxy materials specifically recognize that
registration may be required if the scope of the Company's operations and
participation in the Plan are substantially increased.