<PAGE>
As filed with the Securities and Exchange Commission on November 12, 1996
Registration No. 333-12293
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-------------------------------------------
AMENDMENT NO. 1 TO
FORM SB-1
REGISTRATION STATEMENT
Under
The Securities Act of 1933
-------------------------------------------
PEOPLES BANCORP, INC.
(Name of Small Business Issuer in Its Charter)
Georgia 6711 58-2265412
- ----------------------------- ------------- ------------------
(State of Jurisdiction of (Primary Standard Industrial (I.R.S. Employer
Incorporation or Organization) Classification Code Number) Identification No.)
516 Bankhead Highway
Carrollton, Georgia 30117
(770) 838-9608
(Address and Telephone Number of Principal Executive Offices)
Timothy I. Warren With a copy to:
Peoples Bancorp, Inc. Gilbert H. Davis, Esq.
516 Bankhead Highway Stanley H. Pollock, Esq.
Carrollton, Georgia 30117 Holland & Knight
(770) 838-9608 Suite 2000, One Atlantic Center
(Name, address and telephone number of 1201 West Peachtree Street
agent for service) Atlanta, Georgia 30309-3400
____________________________________________
Approximate date of proposed sale to the public: As soon as practicable
following effectiveness of this Registration Statement.
If any of the securities being registered on this form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box. [X]
If this form is filed to register additional securities for an offering pursuant
to Rule 462(b) under the Securities Act, please check the following box and list
the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [_]
If this form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, please check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [_]
_____________________________
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
========================================================================================================
Proposed Maximum Proposed Maximum
Title of Class of Dollar Amount Offering Price Aggregate Amount of
Securities To Be Registered To Be Registered Per Share Offering Price Registration Fee
- --------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock $8,000,000 $10.00 $8,000,000 $2,759
========================================================================================================
</TABLE>
The Registrant hereby amends this Registration Statement on such date or dates
as may be necessary to delay its effective date until the Registrant shall file
a further amendment which specifically states that this Registration Statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
Disclosure alternative used (check one): Alternative 1 _______ Alternative
2 X
-----
<PAGE>
CROSS REFERENCE SHEET BETWEEN FORM SB-1 AND PROSPECTUS
<TABLE>
<CAPTION>
Form Number and Caption Location or Heading in Prospectus
--------------------------------------------------------- -------------------------------------------------
<S> <C> <C>
1. Inside Front and Outside Back Cover Pages of Inside Front and Outside Back Cover Pages;
Prospectus............................................... Additional Information
2. Significant Parties...................................... Management; Principal Shareholders; Legal Matters
3. Relationship with Issuer of Experts Named in
Registration Statement................................... Not Applicable
4. Legal Proceedings........................................ Not Applicable
5. Changes in and Disagreements with Accountants............ Not Applicable
6. Disclosure of Commission Position on Indemnification for Management
Securities Act Liabilities...............................
Model B Items
1. Cover Page............................................... Front Cover Page
2. Distribution Spread...................................... Front Cover Page
3. Summary Information, Risk Factors and Dilution........... Prospectus Summary; Risk Factors
4. Plan of Distribution..................................... The Offering
5. Use of Proceeds to Issuer................................ Use of Proceeds
6. Description of Business.................................. Prospectus Summary; Business; Supervision and
Regulation
7. Description of Property.................................. Business
8. Directors, Executive Officers and Significant Employees.. Management
9. Remuneration of Directors and Officers................... Management
10. Security Ownership of Certain Security Holders and
Management............................................... Principal Shareholders
11. Interest of Management and Others in Certain
Transactions............................................. Certain Transactions
12. Securities Being Offered................................. Description of Capital Stock; Divident Policy
PART F/S
13. Financial Information Required in Prospectus............. Financial Statements
</TABLE>
<PAGE>
PEOPLES BANCORP, INC.
a proposed bank holding company for
PEOPLES BANK OF WEST GEORGIA
(In Organization)
to be headquartered in Carrollton, Carroll County, Georgia
$6,250,000 MINIMUM OFFERING -- 625,000 SHARES OF COMMON STOCK AT $10 PER
SHARE
$8,000,000 MAXIMUM OFFERING -- 800,000 SHARES OF COMMON STOCK AT $10 PER SHARE
MINIMUM PURCHASE - 100 SHARES ($1,000)
Peoples Bancorp, Inc. (the "Company") has been formed to become a bank
holding company which will own all of the issued stock of Peoples Bank of West
Georgia (In Organization) (the "Bank"). The Bank is currently being organized
under the laws of the State of Georgia as a state-chartered commercial bank with
deposits to be insured by the Federal Deposit Insurance Corporation (the
"FDIC"). The Bank received its bank charter from the Georgia Department of
Banking and Finance (the "DBF") on October 11, 1996, and received preliminary
approval of its application for federal deposit insurance from the FDIC on
October 30, 1996. Neither the Company nor the Bank has commenced operations and
neither will do so unless this offering provides the funds required to
capitalize the Bank and the Company and the Bank receives a permit to begin
business from the DBF and final approval of insurance of deposit accounts by the
FDIC. The Company is offering for sale a minimum of 625,000 shares and a maximum
of 800,000 shares (the "Shares") of the $.01 par value common stock (the "Common
Stock") with minimum proceeds to the Company of at least $6,250,000 after
payment of any sales commissions. The organizers, directors and officers of the
Company and Bank currently intend to subscribe for at least 326,400 Shares of
this offering. See "Management" and "Principal Shareholders." There has been no
public market for the Common Stock and there can be no assurance that an active
trading market will develop as a result of this offering. See "The Offering" and
"Description of Capital Stock."
This offering will not be completed unless the Company's directors
have determined in their reasonable discretion that an adequate provision has
been made to obtain the Bank's permit to begin business and insurance of
accounts. Such regulatory approvals generally are conditioned upon the Company
and the Bank satisfying certain conditions within specified time periods,
including the capitalization of the Bank from the proceeds of this offering.
___________________ (Continued on next page)
THESE SECURITIES ARE NOT SAVINGS DEPOSITS AND ARE NOT INSURED BY THE FEDERAL
DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENT AGENCY. INVESTMENT IN THE
COMPANY INVOLVES A HIGH DEGREE OF RISK AND INVESTORS SHOULD NOT INVEST ANY FUNDS
IN THIS OFFERING UNLESS THEY CAN AFFORD TO LOSE THEIR ENTIRE INVESTMENT. SEE
THE "RISK FACTORS" SECTION OF THE PROSPECTUS FOR A DISCUSSION OF THOSE RISKS
THAT MANAGEMENT BELIEVES PRESENT THE MOST SUBSTANTIAL RISK TO AN INVESTOR.
___________________
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON THE ACCURACY
OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
<TABLE>
<CAPTION>
=======================================================================================
Underwriting
Price to Discounts and Proceeds to
Public Commissions (1) Company (2)
<S> <C> <C> <C>
- ---------------------------------------------------------------------------------------
Per Share...................... $10 $0 $10
Minimum Offering(3)............ $6,250,000 $0 $6,250,000
Maximum Offering(3)............ $8,000,000 $0 $8,000,000
=======================================================================================
</TABLE>
(Footnotes on next page)
THE DATE OF THIS PROSPECTUS IS ____________, 1996.
<PAGE>
(Cover page continued)
The Company believes that all regulatory conditions will be satisfied
within two months following the release of subscription proceeds from
the escrow account for the minimum offering, depending on the length
of time required to complete the minimum offering. Subscription
proceeds will not be released from the escrow account until (i) the
Company receives subscriptions for at least 625,000 Shares with
proceeds to the Company of at least $6,250,000 after any commissions
paid, and (ii) the Bank directors have made adequate provisions for
satisfying (as they determine in their reasonable discretion) any
regulatory conditions that may be imposed prior to obtaining a permit
to begin business from the DBF and insurance of deposit accounts from
the FDIC. However, there is a possibility the Bank will not obtain
require final regulatory approvals and that the Bank may not be
permitted to open for business, even if this offering is completed,
the Shares issued and proceeds expended. In that event, purchasers of
the Shares would likely suffer a material loss or, in an extreme case,
a complete loss of their investment. See "Risk Factors," "The
Offering" and "Business."
The Company's offices are currently located at 516 Bankhead Highway,
Carrollton, Georgia 30117, and its telephone number is (770) 838-9608.
___________________
(Footnotes from previous page)
(1) The Shares are being offered on behalf of the Company by the organizers,
directors and executive officers of the Company and the Bank. Such
associated persons will receive no compensation for selling the Shares, but
shall be reimbursed for reasonable expenses incurred by them in connection
with this offering. Such associated persons are not deemed to be "brokers"
solely by reason of their participation in this offering in accordance with
Rule 3a4-1 of the Securities Act of 1934, as amended. The offering is not
underwritten and the Company has employed no brokers, dealers, or
salespersons in connection with the sale of the Shares. However, the
Company reserves the right to simultaneously offer the Shares through
registered securities broker-dealers or sales persons and to pay reasonable
commissions not to exceed 8.0% of gross offering proceed to such persons,
subject to the condition that the proceeds to the Company of the offering
are not less than $6,250,000 net of commissions paid.
(2) Before deduction of expenses payable by the Company estimated at $38,000
for registration fees, legal and accounting fees, printing costs and other
offering expenses.
(3) This offering consists of a minimum offering of 625,000 Shares and a
maximum offering of 800,000 Shares. The minimum offering is being made on
a "best efforts, all or none" basis and all subscription proceeds will be
deposited in an escrow account with The Bankers Bank, Atlanta, Georgia,
pending acceptance or rejection of subscriptions and completion of the
minimum offering. If subscription proceeds from the sale of the minimum
offering are not deposited in the escrow account by January 31, 1997 (which
period may be extended for up to three 90-day periods by the Company
without notice to subscribers but not beyond October 31, 1997),
subscriptions will be canceled and all proceeds will be returned promptly
to subscribers by mail in full without interest. After completion of the
----------------
minimum offering, the sale of up to the additional 175,000 Shares of the
maximum offering may be continued on a "best efforts basis" through October
31, 1997 or opening of the Bank, and all subscription proceeds shall be
deposited in a non-escrow Company deposit account at The Bankers Bank
pending acceptance or rejection of subscriptions. The Company will accept
or reject subscriptions within 15 days of receipt. Interest earned on all
subscription proceeds will be paid to the Company whether or not the
minimum offering is completed. Subscriptions are not binding until
accepted by the Company. The Company reserves the right to accept or
reject subscriptions, in whole or in part, in its sole discretion.
Subscriptions which have been accepted will be subsequently canceled by the
Company in the event the conditions of this offering have not been timely
satisfied. Proceeds of rejected or canceled subscriptions would be
returned promptly to subscribers by mail in full without interest after the
----------------
occurrence of such event and in any event no later than October 31, 1997.
All costs and expenses in excess of interest earned on subscription
proceeds of this offering will be borne by the organizers and directors of
the Company in the event the minimum offering fails and all subscriptions
are canceled.
The Company may not be required to file reports under the Securities
Exchange Act of 1934, as amended, after 1996 or 1997. However, the Company
intends to furnish its shareholders with annual reports that include audited
financial statements in any event.
-2-
<PAGE>
PROSPECTUS SUMMARY
THIS SUMMARY IS QUALIFIED IN ITS ENTIRETY BY THE DETAILED INFORMATION
AND FINANCIAL STATEMENTS APPEARING ELSEWHERE IN THIS PROSPECTUS. PROSPECTIVE
PURCHASERS SHOULD READ THE ENTIRE PROSPECTUS CAREFULLY BEFORE MAKING AN
INVESTMENT DECISION.
THE COMPANY AND THE BANK
Peoples Bancorp, Inc. (the "Company") was incorporated on August 27,
1996 for the purpose of becoming a bank holding company for its proposed wholly-
owned subsidiary, Peoples Bank of West Georgia (In Organization) (the "Bank").
The Company filed applications to the Board of Governors of the Federal Reserve
System (the "FRB") and the Georgia Department of Banking and Finance (the "DBF")
on November 4, 1996 for authority to become a bank holding company which will
own all of the issued stock of the Bank. Those applications are pending with the
FRB and DBF but have not yet been approved. The holding company structure will
provide the Company with greater flexibility than the Bank would otherwise have
to expand and diversify its business activities, such as through newly formed
subsidiaries or through acquisitions.
The Bank has been organized under the laws of the State of Georgia as
a state-chartered commercial bank with deposits to be insured by the Federal
Deposit Insurance Corporation (the "FDIC"). The Bank received its bank charter
approval from the DBF on October 11, 1996 and received preliminary approval of
its application for federal deposit insurance from the FDIC on October 30, 1996.
The Bank is to be located in Carrollton, Carroll County, Georgia, which will be
the Bank's primary service area. The Bank is currently in the process of
fulfilling the conditions established by the DBF and FDIC in order to obtain a
permit to begin business from the DBF and insurance of deposit accounts from the
FDIC. The regulatory approvals from the FRB, the FDIC and the DBF are or will be
variously effective for three months to two years with provision for extensions
to provide adequate time to complete the offering and commence business
operations. The Organizers believe that any regulatory approval to extend
expiration dates will be approved by the agencies in due course. Upon approval
of the Company's holding company applications by the FRB and DBF, the issuance
of the permit to begin business by the DBF and insurance of deposit accounts by
the FDIC, the Bank will be permitted to begin business and no further regulatory
approvals will be required. The Bank will then seek to attract deposits from the
general public and will make commercial, consumer and real estate loans.
Customer deposits with the Bank will be insured to the maximum extent provided
by law through the FDIC. See "Business."
The applications for the Company to become a bank holding company and
for the Bank to become a state-chartered commercial bank were submitted by
Messrs. Timothy I. Warren, Steve R. Adams, John B. Bohannon, Ann C. Carter,
Lester H. Harmon, William P. Johnson, Phillip Kauffman, Jeff R. Matthews,
Charles J. Puckett, William C. Seaton and Mark S. Swindle, the organizers and
directors of the Company and the Bank (the "Organizers"). The Company and the
Bank have employed Timothy I. Warren as their President and Chief Executive
Officer and Elaine B. Lovvorn has been employed as Senior Vice President, Chief
Financial and Operations Officer of the Bank. As a full-time employee, and the
Chief Executive Officer, Mr. Warren has primary responsibility for the
organizational efforts of the Company and the Bank, and the loss of Mr. Warren's
services could cause organizational efforts to fail. See "Management,"
"Principal Shareholders" and "Certain Transactions."
Neither the Company nor the Bank has commenced their respective
operations as a bank holding company or as a commercial bank and neither will do
so unless the required capitalization of the Bank by the Company is obtained
from proceeds of this offering and regulatory approvals are obtained. The
Company believes that all regulatory conditions will be satisfied within two
months following the release of subscription proceeds from the escrow account
for the minimum offering, depending on the length of time required to complete
the minimum offering. See "Risk Factors -- Burdens of Government Regulation;
Requirement for Further Regulatory Approvals," "Business" and "Supervision and
Regulation."
Subject to the approval of the DBF and a final determination by the
Organizers, the Bank's and Company's permanent offices are to be located at 631
Bankhead Highway, Carrollton, Carroll County, Georgia 30117 (the "Main Office").
However, the Company's offices are currently located at 516 Bankhead Highway in
Carrollton (the "Temporary Offices"), and the Bank proposes to begin business at
that location pending construction of the Main Office. The Company's telephone
number is (770) 838-9608.
-3-
<PAGE>
THE OFFERING
This offering consists of a minimum offering of 625,000 Shares offered
on a "best efforts, all or none" basis and an additional 175,000 Shares offered
on a "best efforts" basis for a maximum offering of up to 800,000 Shares. The
minimum number of Shares required to be sold will increase to the extent
necessary to result in net proceeds to the Company of at least $6,250,000 after
paying sales commissions not to exceed 8.0% of gross offering proceeds in the
event the Company retains securities broker-dealers or sales persons to assist
with the offering. A minimum subscription of 100 Shares ($1,000) has been
established by the Company.
The Organizers of the Bank currently intend to subscribe for 326,400
Shares of this offering. The Organizers may, but are not obligated to, purchase
additional Shares if such purchases are necessary to complete the minimum
offering. The maximum aggregate number of Shares that these Organizers may
purchase in the minimum offering is 393,750 Shares. The foregoing numerical
limitation does not apply to any Shares of this offering to be purchased by any
additional persons who may become officers or directors of the Company or the
Bank after the date of this Prospectus or to additional Shares purchased once
the minimum offering has been achieved. See "Management," "Principal
Shareholders" and "Certain Transactions."
USE OF PROCEEDS
The Company and the Bank will use the net proceeds of this offering
(i) to capitalize the Bank through the purchase of 600,000 shares of the Bank's
common stock at a price of $10.00 per share, (ii) to pay directly or to repay
amounts borrowed by the Company (and guaranteed by the Organizers) pursuant to a
$350,000 line of credit from Peoples Bank of Fannin County (the "Organization
Loan") used to pay organizational, offering and pre-opening expenses, (iii) to
purchase, construct and furnish the Main Office for the Company and the Bank,
(iv) to fund rent and other operating expenses of the Temporary Offices, and
(iv) for general corporate purposes, including supporting the Bank's growth and
engaging in other permitted activities. See "Use of Proceeds," "Business,"
"Supervision and Regulation" and "Certain Transactions."
RISK FACTORS
An investment in the securities offered by this prospectus involves
substantial risks, including the following:
. The Company and the Bank will be subject to extensive government
regulation and control, which will limit the scope of Company and
Bank activities and impose compliance burdens and costs.
. Neither the Company nor the Bank has commenced their respective
operations and neither will do so unless the required
capitalization of the Bank by the Company is obtained from
proceeds of this offering and regulatory approvals are obtained.
There can be no assurance that the Company or the Bank will not
be delayed in or precluded from the commencement of their
respective business operations, even if proceeds of this offering
have been expended and Shares issued.
. The Bank will experience competition in attracting and retaining
deposit accounts, making commercial, consumer and real estate
loans and providing other services in its primary service area
with many well-established commercial banks and savings
institutions which may have competitive advantages over the Bank.
. The Company and the Bank are presently being organized and
therefore neither has any prior operating history. New commercial
banking institutions are frequently not profitable in the initial
years of operations and no assurance can be given as to the
ultimate success of the Bank.
. The profitability of the Bank will be materially affected by
economic conditions and other uncertainties beyond the Bank's
control due to the nature of its business.
-4-
<PAGE>
. The Bank's marketing focus on small to medium sized businesses
and real estate developers and builders, as well as on middle
class customers, may involve certain lending risks beyond those
inherent to commercial banking institutions who rely on larger
businesses and more wealthy customers.
. The Company has entered into an employment agreement with an
individual with banking experience to serve as president of the
Bank, but the success of the Company and the Bank will depend
upon the ability of the Company and the Bank to employ and retain
skilled banking personnel at all levels of their business.
. The public offering price for the securities being offered hereby
was determined by the Board of Directors of the Company and bears
no relation to any established criteria of value.
. The Company does not anticipate paying cash dividends on its
Common Stock in the immediate future and regulatory requirements
restrict the amount of dividends that it may pay.
. Although the securities being offered hereby will be freely
transferable immediately upon issuance, there is no current
public market for the Common Stock and it is not currently
expected that an active trading market will develop in the near
future.
. Upon completion of this offering, the Organizers of the Company
will own a substantial percentage of the Company's outstanding
Common Stock and stock options will be issued in the future to
officers and key employees of the Company and the Bank, which
will result in control of the Board of Directors and policies of
the Company and the Bank by the Organizers, directors and
officers of the Company.
. A shareholder's percentage ownership interest in the Company
acquired pursuant to this offering is subject to dilution under
certain circumstances following the completion of the offering.
. Certain provisions in the Company's Articles of Incorporation and
Bylaws may discourage non-negotiated take-over attempts which
certain shareholders might deem to be in their best interest and
may tend to perpetuate existing management.
See "Risk Factors."
-5-
<PAGE>
RISK FACTORS
AN INVESTMENT IN THE SHARES OF THE COMMON STOCK OFFERED HEREBY
INVOLVES A SUBSTANTIAL DEGREE OF RISK AND SHOULD BE UNDERTAKEN ONLY BY PERSONS
WHO CAN AFFORD TO LOSE THEIR ENTIRE INVESTMENT. THESE SHARES WILL NOT BE INSURED
BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENTAL AGENCY.
IN ADDITION TO INDIVIDUAL CONSIDERATIONS AND FACTORS SET FORTH ELSEWHERE IN THIS
PROSPECTUS, PERSONS INTERESTED IN PURCHASING SHARES OF THE COMMON STOCK SHOULD
CAREFULLY CONSIDER THE FOLLOWING RISKS BEFORE MAKING A DECISION TO SUBSCRIBE.
BURDENS OF GOVERNMENT REGULATION. The Company and the Bank will be
subject to extensive government regulation and control. This regulation not only
imposes cost and compliance burdens but also limits and defines the scope and
nature of the Company's and the Bank's activities. See "Business" and
"Supervision and Regulation."
REQUIREMENT FOR FURTHER REGULATORY APPROVALS. Neither the Company nor
the Bank has commenced their respective operations as a bank holding company or
as a commercial bank and neither will do so unless the required capitalization
of the Bank by the Company is obtained from proceeds of this offering, the FRB
and DBF approve the Company's holding company applications, the DBF issues a
permit to begin business and the FDIC authorizes insurance of deposit accounts.
Although the Company does not foresee any difficulty in meeting the requirements
and time deadlines established for obtaining such authorizations, there can be
no assurance that the Company or the Bank will not be delayed in or precluded
from the commencement of their respective business operations.
There is also a possibility that this offering could be completed, the
Shares issued and offering proceeds expended as described in "Use of Proceeds"
without the DBF ultimately issuing a permit to begin business or the FDIC
ultimately granting insurance of deposit accounts. In that event, the Company's
directors could determine to pursue voluntary dissolution of the Bank and to
propose that the shareholders approve the liquidation of the Company and to
distribute net assets to the Company's shareholders. In the event the Bank does
not open for business, it would likely result in a material loss to purchasers
of the Shares and, in an extreme case, a subscriber could lose the entire amount
of his investment. The Organizers will have the discretion to determine whether
adequate provision has been made to satisfy remaining conditions for required
regulatory approvals if the minimum offering is completed, and will have an
economic incentive to do so because offering proceeds will be used to repay the
Organization Loan guaranteed by the Organizers. See "Certain Transactions."
EXPECTED UNPROFITABLE OPERATIONS. New commercial banking institutions
are generally not profitable in the initial years of operations, and the
Organizers of the Company and the Bank do not expect to achieve profitable
operations on a current basis until at least the second full year of operations.
No assurance can be given as to when or whether the Bank's operations will
become profitable.
COMPETITION WITH WELL-ESTABLISHED FINANCIAL INSTITUTIONS. The Bank
will experience competition in attracting and retaining deposit accounts, making
commercial, consumer and real estate loans and providing other services in its
primary service area with many well-established financial institutions which may
have competitive advantages as a result of greater resources and higher lending
limits (by virtue of their greater capitalization) than the Company or the Bank.
Such competitors also may offer their customers certain services which the Bank
will not provide directly but might be offered indirectly by the Bank through
correspondent institutions. Moreover, entry into the Bank's primary service area
of other independent institutions may affect the Bank's competitive position. In
addition to commercial banks and savings institutions, the Bank will be
competing with credit unions, brokerage firms, money market funds, and other
financial institutions which provide services similar to the deposit, lending
and other services to be offered by the Bank, and which may have competitive
advantages as a result of greater capitalization or being subject to different
regulations.
In order to compete with other financial institutions in its primary
service area, the Bank will rely principally upon local advertising and
promotional activity and upon personal contacts by its directors, officers and
shareholders to attract business and acquaint potential customers with the
personalized services to be offered by an independent, locally-owned and
-6-
<PAGE>
headquartered commercial bank. The Organizers believe that the Bank will be
able to compete effectively with other institutions, but no assurance can be
given in this regard. See "Business."
LACK OF OPERATING HISTORY. The Company and the Bank are presently
being organized and neither has any prior operating history. Since the Company
will function principally as a bank holding company, its success will depend on
the Bank's operations. The business of commercial banking involves primarily the
acceptance by the Bank of deposits from customers, and the investment by the
Bank of those funds in either securities (for instance, United States Treasury
obligations) or loans to customers of the Bank. Profits from operations depend,
in large part, on the spread between the interest income earned by the Bank on
its investments and loans and the interest paid by the Bank on deposits. Deposit
flows are influenced by a number of factors including interest rates on money
market funds and other competing investments, account maturities and levels of
personal income and savings. Lending activities are influenced by, among other
things, the demand for and supply of housing, commercial ventures and consumer
goods, conditions in the local economy, and the availability and cost of funds.
Sources of funds for lending activities include deposits, loan payments,
proceeds from sales of loans, investment returns and borrowings. No assurance
can be given as to the ultimate success of the Bank. See "Business."
POTENTIAL ADVERSE IMPACT OF ECONOMIC CONDITIONS AND OTHER
UNCERTAINTIES. The results of operations of commercial banking institutions
depend to a large extent on the level of "net interest income" or "rate
differentials" (i.e., the difference between the income earned on loans,
securities and other assets, and the interest paid on deposits and other
borrowings). Net interest income is materially affected by general economic and
political conditions (both domestic and international), the monetary and fiscal
policies of the federal government and the regulatory policies of governmental
agencies. Conditions such as fluctuating interest rates, money supply policies,
inflation, recession, unemployment, natural resource policies, international
conflicts, and other factors beyond the Bank's control may adversely affect the
profitability of the Bank. See "Business" and "Supervision and Regulation."
Management anticipates that a majority of the Bank's borrowers and
depositors will be businesses and individuals located and doing business in and
around Carrollton, Carroll County, Georgia. Any factors which adversely affect
the local economy would be likely to have an adverse effect on the performance
of the Bank.
LENDING RISKS. The risk of nonpayment (or deferred payment) of loans
is inherent to commercial banking institutions. The Bank's marketing focus on
small to medium sized businesses and real estate developers and builders, as
well as on middle-class customers may, however, involve certain lending risks
not inherent in loans to larger business and real estate developers and builders
or to more wealthy customers. Larger organizations would have greater capacity
to repay amounts loaned by the Bank in the event of an economic downturn or
other adversity than the smaller companies to which the Bank will be lending.
Management of the Bank intends to carefully evaluate all loan applicants and to
attempt to minimize its credit risk exposure by use of thorough loan application
and approval procedures. Because the Bank will create its loan portfolio from
all new customers, it will be several years before the quality of the Bank's
established loan portfolio can be fully evaluated. See "Business."
NEED FOR RETENTION OF PERSONNEL WITH BANKING MANAGEMENT EXPERIENCE.
The Bank has an employment agreement with Mr. Warren as President of the Bank,
and expects to enter into employment agreements with other executive officers of
the Bank. The Bank also has employed Elaine B. Lovvorn as Senior Vice President
and Chief Financial and Operations Officer. The Bank intends to employ a staff
of experienced banking personnel at all levels of services to its customers. The
DBF has required the Bank to employ a Senior Credit Officer before the DBF
issues a permit to begin business. The Bank is actively seeking qualified
candidates to fill this position. Any person selected by the Bank to serve as
Senior Credit Officer will be subject to prior approval by the DBF and FDIC.
There can be no assurance that the Bank will be able to retain a person to act
in such capacity who is acceptable to the DBF and the FDIC. The ability of the
Company and the Bank to conduct their operations in an organized, efficient and
profitable manner will depend greatly upon the skills of banking personnel and
on their continued employment by the Company and the Bank. See "Management."
ARBITRARY OFFERING PRICE. Since neither the Company nor the Bank has
any prior operating history, the public offering price for the securities being
offered hereby was determined by the Board of Directors of the Company and bears
no relationship to assets, book value, earnings or other established criteria of
value. In fixing the public offering price, the Board of Directors considered,
among other things, the Bank's business plan, the regulatory requirement that
the Bank have an initial capitalization of at least $6,000,000, the
marketability of various offering prices, and the offering prices of other
-7-
<PAGE>
newly-organized bank holding companies and financial institutions. The Board
has determined to seek sufficient capital from this initial public offering in
order to reach the goals of the Bank's business plan and to provide support for
the Bank's growth and to engage in other permitted activities. See "Business."
RESTRICTIONS ON DIVIDENDS. In order to preserve its capital to
facilitate growth and expansion of its business, the Company does not anticipate
paying cash dividends on its Common Stock in the immediate future. Furthermore,
the Company's primary source of funds for the payment of dividends will be
dividends from the Bank, and there are regulatory requirements and limitations
on the amount of dividends that the Bank may pay to the Company. See "Dividend
Policy" and "Supervision and Regulation."
LIMITED TRADING MARKET. The securities being offered hereby will not
be subject to any specific restrictions on transfer (with the exception of
securities held by the Company's directors, officers and affiliates) and will be
freely transfer rable immediately upon issuance. Nevertheless, prior to this
offering there has been no public market for the Common Stock and it is not
currently expected that an active trading market will develop for at least
several years after this offering, if ever. As a result, shareholders who desire
to sell their Common Stock may be required to locate purchasers on their own and
may not be able to do so.
POTENTIAL CONTROL BY MANAGEMENT. Upon completion of this offering,
the Organizers and current officers of the Company anticipate owning
approximately 40.8% of the outstanding Shares of the Company's Common Stock
assuming a maximum offering is achieved (or approximately 52.2% assuming a
minimum offering is achieved). The Company also expects to grant stock options
to officers and key employees of the Company and the Bank in the future, with
options with respect to 23,000 Shares currently expected to be granted prior to
commencing operations. The Organizers, directors and officers of the Company
may, by virtue of their ownership of Shares, control the Board of Directors and
the policies of the Company and the Bank. The foregoing percentages may increase
upon the addition of new directors and officers who determine to purchase Shares
or if any Organizers determine to purchase additional Shares in this offering or
otherwise, which increase cannot be currently determined. See "Management,"
"Principal Shareholders" and "Certain Transactions."
ANTICIPATED DILUTION. The Common Stock offered hereby is not subject
to preemptive rights, so that shareholders are not entitled to purchase
additional Shares of Common Stock if such Common Stock is offered to others. As
a result, a shareholder's percentage ownership interest in the Company would be
diluted if additional Shares of Common Stock are sold by the Company to others.
Similarly, the exercise by any of the officers and employees of the Company or
the Bank who may receive stock options would dilute a shareholder's percentage
ownership interest in the Company. See "Management," "Certain Transactions" and
"Description of Capital Stock."
CHANGE IN CONTROL PROVISIONS. Certain provisions included in the
Company's Articles of Incorporation and Bylaws are designed to encourage
potential acquirors to negotiate directly with the Board of Directors of the
Company. The Board of Directors believes that these provisions are prudent and
will reduce the Company's vulnerability to take-over attempts and certain other
transactions which may not have been negotiated with and approved by the Board.
The Board of Directors believes that it is in the best interest of the Company
and shareholders to encourage potential acquirors to negotiate directly with the
Board. However, these provisions may discourage non-negotiated take-over
attempts which certain shareholders might deem to be in their best interest and
may tend to perpetuate existing management. These provisions include authority
for the Company to issue shares of preferred stock, a supermajority voting
requirement for approval of mergers and business combinations, staggered terms
for members of the Board of Directors, and super majority voting requirements
for amendments to certain provisions of the Articles of Incorporation and the
Bylaws and for removal of directors.
THE OFFERING
TERMS OF THE OFFERING
The Company is offering for sale a minimum of 625,000 Shares and a
maximum of 800,000 Shares. The minimum offering is being made on a "best
efforts, all or none" basis and all subscription proceeds will be deposited in
an
-8-
<PAGE>
escrow account with The Bankers Bank, Atlanta, Georgia ("Escrow Agent" or the
"Escrow Account"), pending acceptance of subscriptions and completion of the
minimum offering. The minimum number of Shares required to be sold will increase
to the extent necessary to result in net proceeds to the Company of at least
$6,250,000 after paying sales commissions (not to exceed 8.0% of gross offering
proceeds) in the event the Company retains securities broker-dealers or sales
persons to assist with the offering. The expiration date of the minimum offering
(as such date may be extended, the "Expiration Date") will be the earlier of the
date all Shares offered hereby are sold or 5:00 p.m. Eastern time on January 31,
1997 (which period may be extended for up to three 90-day periods by the Company
without notice to subscribers but not beyond October 31, 1997). If at least
$6,250,000 of subscription proceeds from the sale of the minimum offering are
not deposited in the escrow account by the Expiration Date, subscriptions will
be canceled and all proceeds will be returned promptly to subscribers promptly
by mail in full without interest.
----------------
After completion of the minimum offering, the sale of the additional
up to 175,000 Shares of the maximum offering may continue on a "best efforts
basis" through the earlier of October 31, 1997 or the opening of the Bank for
business. All subscription proceeds after completion of the minimum offering
will be deposited in a non-escrow Company deposit account at Escrow Agent
pending acceptance or rejection of subscriptions. Interest earned on all
subscription proceeds will be paid to the Company whether or not related
subscriptions are accepted or rejected or the minimum offering is completed. The
Company reserves the right to terminate the offering after accepting
subscriptions for less than the maximum offering, provided subscriptions in at
least the amount of the minimum offering have been accepted at such time.
The Company and the Bank require regulatory approvals from the FRB,
DBF and FDIC before the Bank may commence banking operations. Such regulatory
approvals generally are conditioned upon the Company and the Bank satisfying
certain conditions within specified time periods, including the capitalization
of the Bank from the proceeds of this offering. The Company believes that all
regulatory conditions will be satisfied within two months following the release
of subscription proceeds from the escrow account for the minimum offering,
depending on the length of time required to complete the minimum offering.
Subscription proceeds will not be released from the escrow account until (i) the
Company receives subscriptions for at least 625,000 Shares with proceeds to the
Company of at least $6,250,000 after any commissions paid, and (ii) the Bank
directors have made adequate provisions for satisfying (as they determine in
their reasonable discretion) any regulatory conditions that may be imposed prior
to obtaining a permit to begin business from the DBF and insurance of deposit
accounts from the FDIC. There is a possibility, however, that the Bank will not
receive its permit to begin business or insurance of deposit accounts or open
for business, even if this offering is completed, the Shares issued and proceeds
expended. This event could result in a material loss to purchasers of the
Shares. See "Risk Factors" and "Certain Transactions."
The Shares are being offered on behalf of the Company by the
Organizers, directors and executive officers of the Company and the Bank. Such
persons will receive no compensation for selling the Shares, but will be
reimbursed for reasonable expenses incurred by them in connection with this
offering. This offering is not underwritten and the Company has employed no
brokers or dealers in connection with the sale of the Shares. However, the
Company reserves the right to simultaneously offer the Shares through registered
securities broker-dealers or salespersons and to pay reasonable commissions to
such persons, subject to the condition that the proceeds to the Company of the
offering are not less than $6,250,000 net of commissions paid not to exceed 8.0%
of gross offering proceeds. Such broker-dealers may be deemed "underwriters" as
such term is defined under the Securities Act of 1933. As of the date of this
Prospectus, no broker-dealer has been retained by the Company in connection with
the sale of the Shares offered hereby.
The Organizers currently intend to subscribe for 326,400 Shares of
this offering. The Organizers may, but are not obligated to, purchase additional
Shares if such purchases are necessary to complete the minimum offering. The
maximum aggregate number of Shares that these Organizers may purchase in the
minimum offering is 393,750 Shares, or 63% of the minimum offering. The
foregoing numerical limitation does not apply to any Shares of this offering to
be purchased by any additional persons who become officers or directors of the
Company or the Bank after the date of this Prospectus, or to additional Shares
purchased once the minimum offering has been achieved. No Organizer or director
(including immediate family members and affiliates) will be permitted to
purchase in this offering an amount of Shares which would exceed 20% of the
total number of Shares outstanding upon completion of this offering. Shares
purchased in this offering by the Organizers, directors and Bank officers are
being purchased for investment purposes and not for resale. See "Management,"
"Principal Shareholders" and "Certain Transactions." No person may purchase 10%
or more of the total number of Shares
-9-
<PAGE>
outstanding upon completion of this offering without submitting financial and
any other required information to the appropriate regulatory authorities.
METHOD OF SUBSCRIPTION
A minimum subscription of 100 Shares ($1,000) has been established by
the Company for this offering. However, the Company reserves the right to accept
subscriptions for less than the minimum subscription, in its sole discretion.
In order to purchase the Shares offered hereby a prospective investor
must:
(1) COMPLETE AND SIGN THE SUBSCRIPTION AGREEMENT ACCOMPANYING THIS
PROSPECTUS;
(2) MAKE FULL PAYMENT FOR THE PURCHASE PRICE FOR THE SHARES IN UNITED
STATES CURRENCY BY CHECK, BANK DRAFT OR MONEY ORDER PAYABLE TO
"PEOPLES BANCORP, INC. ESCROW ACCOUNT"; AND
(3) DELIVER THE SUBSCRIPTION AGREEMENT, TOGETHER WITH FULL PAYMENT
FOR THE PURCHASE PRICE, TO PEOPLES BANCORP, INC., TIMOTHY I.
WARREN, PRESIDENT, 516 BANKHEAD HIGHWAY, CARROLLTON, GEORGIA
30117.
All subscription payments received prior to completion of the minimum
offering will be promptly deposited in an escrow account with the Escrow Agent.
The Escrow Agent will invest subscription proceeds in short-term, interest-
bearing government securities or bank certificates of deposit until released
from the escrow account. The Escrow Agent, by accepting appointment as such, in
no way endorses the purchase of the Company's securities by any person.
SUBSCRIPTION ACCEPTANCE
Subscriptions are not binding until accepted by the Company. Deposit
of funds in the escrow account pending satisfaction of the conditions listed
above shall not be deemed to be an acceptance of the subscriptions to which the
funds relate. The Company reserves the right to accept or reject subscriptions,
in whole or in part, in its sole discretion. This permits the Company to refuse
to sell the Shares to any person submitting a subscription agreement or to
accept part but not all of a subscription so that a subscriber might ultimately
be issued fewer than the full number of Shares for which he or she subscribes.
In determining which subscriptions to accept, in whole or in part, the Company
may take into account the order in which subscriptions are received and a
subscriber's potential to do business with, or to refer customers to, the Bank.
The Company will determine whether to accept or reject a subscription within 15
days of receipt. In the event the Company rejects all or a part of a
subscription, the Escrow Agent will refund to the subscriber by mail, all or the
appropriate portion of the amount remitted with the subscription without
-------
interest promptly after the occurrence of such event. In addition,
- --------
subscriptions which have been accepted may be subsequently canceled by the
Company in the event the Company does not obtain regulatory approval to become a
bank holding company or the Bank does not receive a permit to begin business.
Canceled subscriptions would be returned to subscribers promptly by mail in full
without interest. All costs and expenses of this offering and of the
- ----------------
organization of the Company and the Bank in excess of interest earned on
subscription proceeds will be borne by the Organizers in the event subscriptions
are canceled.
Certificates representing the securities offered hereby will be issued
by the Company and mailed to investors as soon as practicable after subscription
proceeds are released from the escrow account following completion of the
minimum offering and during the maximum offering period.
-10-
<PAGE>
USE OF PROCEEDS
The net proceeds from the sale of the Shares offered hereby after
deducting estimated offering expenses of $38,000 will be between $6,212,000 if
the minimum of 625,000 Shares are sold and $7,962,000 if the maximum of 800,000
Shares are sold. Offering expenses will be paid by the Company through draws on
the Organization Loan and repaid from the gross proceeds of this offering.
The Organizers also expect the Company and the Bank to incur
approximately $64,000 of organizational expenses and preopening expenses of
approximately $175,000 (assuming the minimum offering is completed on January
31, 1997 and the Bank begins operation in the Temporary Offices on March 31,
1997), which would be offset in part by estimated preopening investment income
on offering proceeds of approximately $50,000. Offering, organizational and
preopening expenses incurred prior to conclusion of the offering have been paid
or reimbursed to the Organizers through draws by the Company on the Organization
Loan (which has been guaranteed by the Organizers). To the extent such amounts
and accrued interest thereon will exceed $370,000, additional offering,
organizational and preopening expenses will be paid through draws on any
additional line of credit established for the Company and/or advances by the
Organizers, with all of such amounts to be repaid by the Company together with
accrued interest from net offering proceeds.
The Company will capitalize the Bank with a minimum of $6,000,000 and
up to $7,700,000 of the net offering proceeds by purchasing between 600,000 and
770,000 shares of the Bank's stock at a price of $10.00 per share. After the
anticipated expenditure of approximately $1,857,000 in the aggregate, the Bank
will have remaining working capital of between approximately $4,143,000 and
$5,843,000 to be used for the purposes of making loans and investments in the
course of the Bank's operations and to pay operating expenses (to the extent
such expenses are not met by operating income). See "Business" and "Certain
Transactions."
The remaining balance of the net proceeds of this offering of between
approximately $190,000 and $240,000 (depending on the number of Shares sold)
will be retained to establish the Company's working capital and for general
corporate purposes, including supporting the Bank's growth and engaging in other
permitted activities.
The following table sets forth in tabular form the estimated use by
the Company and the Bank of the gross proceeds of the minimum and maximum
offerings based on the best estimate of management at this time and assuming
that the offering is concluded as of January 31, 1997 and that the Bank
commences operations on March 31, 1997 in the Temporary Offices, for purposes of
projecting offering, organizational and preopening expenses and for computing
interest payable on the Organization Loan. Preopening expenses will increase,
with a corresponding reduction in working capital available to the Company and
Bank, in the event completion of the offering is delayed for any reason.
-11-
<PAGE>
USE OF PROCEEDS
<TABLE>
<CAPTION>
Minimum Maximum
Offering Offering
-------- --------
<S> <C> <C>
Gross offering proceeds/(1)/............................................... $6,250,000 $8,000,000
========== ==========
Anticipated use of proceeds by the Company:
Offering expenses...................................................... 38,000 38,000
Organizational expenses/(2)/........................................... 22,000 22,000
Working capital........................................................ 190,000 240,000
Capitalization of the Bank through purchase of
common stock of the Bank........................................... 6,000,000 7,700,000
---------- ----------
Total...................................................................... $6,250,000 $8,000,000
========== ==========
Anticipated use of capital by the Bank:
Organizational expenses/(2)/........................................... $ 42,000 $ 42,000
Preopening operating expenses/(2)(3)/.................................. 125,000 125,000
Land and Bank premises /(4)/........................................... 1,460,000 1,460,000
Furniture, fixtures and equipment...................................... 230,000 230,000
Working capital........................................................ 4,143,000 5,843,000
---------- ----------
Total...................................................................... $6,000,000 $7,700,000
========== ==========
</TABLE>
____________________
/(1)/ Assuming the sale of 625,000 Shares and 800,000 Shares, respectively,
at a price of $10.00 per Share.
/(2)/ Organizational expenses consist primarily of consulting fees for
market analysis and business plan required as part of the application
process, filing fees, accounting, appraisal and legal fees and
expenses. Preopening operating expenses consist primarily of salaries
and benefits, rent and occupancy expense, and interest expense. Such
expenses have been estimated through March 31, 1997. All of such
expenses as well as those for premises and leasehold improvements, and
for furniture, fixtures and equipment are expected to be incurred
provided that the offering proceeds are released from escrow.
/(3)/ Assuming $175,000 of gross expenses, net of anticipated preopening
income of $50,000.
/(4)/ In order to facilitate organization of the Company and the Bank, the
Organizers may determine to accelerate expenditures for Temporary
Office renovations, Main Office construction or otherwise in
anticipation of completing the minimum offering, which could require
that they advance additional funds or guarantee additional Company
debt to be repaid from offering proceeds.
The Organizers reserve the right to modify the foregoing use of
proceeds as circumstances require and in order to facilitate the organization of
the Company and the establishment of the Bank's business.
DIVIDEND POLICY
In order to preserve its capital to facilitate growth and expansion of
its business, the Company does not anticipate paying cash dividends on its
Common Stock in the immediate future. The payment of cash dividends by the
Company will be subject to determination by the Board of Directors and will
depend on favorable operating results, financial conditions, tax considerations,
and other relevant factors. At present, the only source of funds from which the
Company would pay cash dividends would be dividends paid to the Company by the
Bank. The Bank similarly does not anticipate paying cash
-12-
<PAGE>
dividends to the Company in the near future in order to preserve its capital to
facilitate growth and expansion of its business. Payment of cash dividends by
the Bank is also subject to regulatory requirements and limitations. See
"Business" and "Supervision and Regulation."
No assurances can be given that any dividends will be declared by the
Company or, if declared, what the amount of the dividends will be or whether
such dividends, once declared, would continue.
CAPITALIZATION
The following table sets forth the capitalization of the Company as of
August 31, 1996 and as adjusted to give pro forma effect to the sale by the
Company of the minimum offering of 625,000 Shares and the maximum offering of
800,000 Shares and the receipt of the net proceeds anticipated by the Company
from such sale, which will result in initial compliance with all regulatory
capital requirements. All offering proceeds, without interest, will be returned
----------------
to subscribers in the event the minimum offering is not completed.
<TABLE>
<CAPTION>
OUTSTANDING/(1)/ AS ADJUSTED/(2)/
SHARES AMOUNT SHARES AMOUNT
------ ------ ------ ------
<S> <C> <C> <C> <C>
ASSUME MINIMUM OFFERING:
Advances from Organizers -- $ 98,100 -- $ 0
======== ==========
Preferred Stock, $.01 par value;
1,000,000 shares authorized None 0 None 0
Common stock, $.01 par value;
10,000,000 shares authorized; one share 6,250
issued, 625,000 to be issued as adjusted 1 -- 625,000 ----------
--------
Capital surplus 10 6,206,750
-------- ----------
Accumulated deficit (23,404) (125,000)
-------- ----------
Total equity $(23,394) $6,087,000
======== ==========
ASSUME MAXIMUM OFFERING:
Advances from Organizers -- $ 98,100 -- $ 0
======== ----------
Preferred stock, $.01 par value;
1,000,000 shares authorized None 0 None 0
Common stock, $.01 par value;
10,000,000 shares authorized; one share
issued, 800,000 to be issued as adjusted 1 -- 800,000 8,000
-------- ----------
Capital surplus 10 7,954,000
-------- ----------
Accumulated deficit $(23,404) (125,000)
-------- ----------
Total equity $(23,394) $7,837,000
======== ==========
</TABLE>
____________________________
/(1)/ In August 1996, the Company issued one Share of Common Stock to Mr.
Warren for $10 in connection with the organization of the Company.
-13-
<PAGE>
/(2)/ Expenses related to this offering are estimated to be $38,000 and will
be charged to the capital surplus upon completion of the offering.
Accumulated deficit represents gross preopening and organizational
expenses of $175,000 estimated to the opening of the Bank, less
estimated investment income for the preopening period of $50,000.
BUSINESS
THE COMPANY
The Company was incorporated on August 27, 1996 for the purpose of
becoming a bank holding company for its proposed wholly-owned subsidiary, the
Bank. The Company has filed applications with the FRB and the DBF for authority
to become a bank holding company which will own all of the issued stock of the
Bank.
Neither the Company nor the Bank has commenced their respective
operations as a bank holding company or as a commercial bank and neither will do
so unless the required capitalization of the Bank by the Company is obtained
from proceeds of this offering and regulatory approvals are obtained. See
"Supervision and Regulation."
The Company's offices are currently located at 516 Bankhead Highway,
Carrollton, Georgia 30117, in the Temporary Offices, and its telephone number is
(770) 838-9608. Subject to the approval of the DBF and final determination of
the Organizers, the Main Office will be located at 631 Bankhead Highway,
Carrollton, Georgia 30117. The Company will maintain its offices at the same
location as the Bank's offices.
The Company is authorized to engage in any activity permitted by law
to a corporation, subject to applicable federal and state regulatory
restrictions on the activities of bank holding companies. The holding company
structure will provide the Company with greater flexibility than the Bank would
otherwise have to expand and diversify its business activities, such as through
newly formed subsidiaries or through acquisitions. While the Company has no
present plans to engage actively in any other business activities, management
anticipates studying the feasibility of establishing or acquiring subsidiaries
to engage in other business activities to the extent permitted by law. See
"Supervision and Regulation."
The principal assets of the Company will consist initially of the net
proceeds of this offering and the Bank's stock. These assets will be used to
fund the initial activities of the Company. The Company's needs for additional
capital will depend to a great extent upon the capital needs of the Bank, which
in turn will depend upon the level of deposits and total assets of the Bank. The
Bank's capital needs for at least the next three years are expected to be
satisfied principally from the proceeds of this offering and from normal
business operations. If, after the first three years, the Bank were to grow at a
more rapid rate than anticipated by management, the Bank's capital needs could
exceed the amount of capital retained by the Company. Management believes that
additional capital may be available through the sale of additional securities or
debt offerings should the need for additional capital arise.
THE BANK
The Bank is currently being organized under the laws of the State of
Georgia as a state-chartered commercial bank with deposits to be insured by the
FDIC. The Bank received its bank charter from the DBF on October 11, 1996 and
received preliminary approval of its application for federal deposit insurance
from the FDIC on October 30, 1996. The Bank has until October 11, 1998 to
complete its organization and October 30, 1997 to satisfy conditions for
insurance of deposit accounts under the terms of its preliminary approvals,
although the Organizers believe extensions would be granted in due course, if
required. The Bank is to be located in Carrollton, Carroll County, Georgia, its
primary service area, and is the process of fulfilling the DBF and FDIC
conditions.
The Bank is required to have an initial capitalization of at least
$6,000,000. The Company is committed to provide that amount of initial capital
for the Bank from the net proceeds of this offering by purchasing 600,000 shares
of the Bank's $5 par value stock at a price of $10 per share. The $10 per share
purchase price for the Bank's common stock was arbitrarily established based
upon normal industry practice which has been generally approved by the DBF. The
per share
-14-
<PAGE>
price could have been established at any level, provided that one-half of the
per share price was allocated to capital and one-half to surplus and provided
that the total of capital and surplus was sufficient to meet the minimum
capitalization level set by the DBF for the Bank.
Upon the issuance of a permit to begin business by the DBF and of
insurance of accounts by the FDIC, the Bank will engage in attracting deposits
from the general public and will make commercial, consumer and real estate
loans. The permit to begin business will be issued to the Bank when it has
satisfied the conditions in the DBF's approval of the Bank's charter
application, including but not limited to matters such as the adoption by the
Bank's Board of Directors of a written loan policy, liquidity policy, investment
policy and funds management policy. Those written policies have not been
formulated at this time, but will be completed, submitted for approval and
revised as required during this offering. Customer deposits with the Bank will
be insured to the maximum extent provided by law through the FDIC. It is
currently anticipated that the Bank will commence operations in the Temporary
Offices within two months after completion of the minimum offering.
The Organizers developed market analysis with respect to the proposed
primary service as described below and a proprietary business plan that were
included in their applications to the DBF and FDIC. The Bank's business plan for
its initial years of operation relies principally upon local advertising and
promotional activity and upon personal contacts by its directors, officers and
shareholders to attract business and to acquaint potential customers with the
Bank's personalized services. The Bank intends to emphasize a high degree of
personalized client service in order to be able to serve each customer's banking
needs. The Bank's marketing approach will emphasize the advantages of dealing
with an independent, locally-owned and headquartered commercial bank to meet the
particular needs of individuals, professionals and small to medium-sized
businesses and real estate developers and builders in the community. All banking
services will be continually evaluated with regard to their profitability and
efforts will be made to modify the Bank's business plan if the plan does not
prove successful.
Management believes that the Bank's business plan will make the Bank
profitable by the end of its second full year of operations. However, that
business plan forecasts one year of unprofitable operations and it has been the
experience in the banking industry for new financial institutions to lose money
in the first years of operations. There can be no assurance as to when or
whether the Bank's operations will become profitable.
PRIMARY SERVICE AREA
The Bank's primary service area will be Carrollton, Georgia and
surrounding acres of Carroll County. Carrollton is located fifty miles west of
Atlanta, eighty miles east of Birmingham and fourteen miles south of Interstate
20. With a currently estimated population of approximately 16,000, Carrollton
serves as a retail, commercial, education, manufacturing and health care center
for several counties in the western part of Georgia and the eastern part of
Alabama. The world's largest privately owned rod and cable manufacturing company
and the world's largest record manufacturing company are both located in
Carrollton. Other companies in Carrollton engage in business such as advanced
aerospace industry technology, fiber optics for the communication industry,
textiles, plastics and other manufacturing products.
Carroll County is served by a number of highway connections with the
rest of the state and country via Interstate 20, U.S. Highway 27 and Georgia
Highways 61 and 78, as well as local roads.
The currently anticipated site selected for the Main Office, 631
Bankhead Highway, Carrollton, would place the Bank's office near the center of
the city on one of its busiest thoroughfares. This location provides connections
with all major roads leading into the city and affords roughly equal access to
all parts of Carroll County.
COMPETITION
The Bank will experience competition in attracting and retaining
business and personal checking and savings accounts, and making commercial,
consumer and real estate loans and providing other services in its primary
service area. The primary factors in competing for such accounts are interest
rates, the range of financial services offered, convenience of office locations
and flexible office hours. Direct competition for such accounts comes from other
commercial banks, savings institutions, credit unions, brokerage firms and money
market funds. The primary factors in competing for loans are interest rates,
loan
-15-
<PAGE>
origination fees and the range of lending services offered. Competition for
origination of loans normally comes from other commercial banks, savings
institutions, credit unions and mortgage banking firms. Such entities may have
competitive advantages as a result of greater resources and higher lending
limits (by virtue of their greater capitalization). Such competitors also may
offer their customers certain services which the Bank will not provide directly
but might be offered indirectly by the Bank through correspondent institutions.
Within Carroll County there are six commercial banks (Citizens Bank
and Trust of West Georgia, Regions Bank (formerly The Community Bank of
Carrollton), NationsBank of Georgia, N.A., SouthTrust Bank of Georgia, N.A.,
SunTrust Bank and West Georgia National Bank of Carrollton) operating a total of
twenty offices. In addition, there is one federal savings association
(Carrollton Federal Bank) that operates four offices in Carroll County. There
are currently four financial institution offices located within one mile of the
currently proposed Main Office site,
Competition may be further increased as a result of the enactment of
the Riegle-Neal Interstate Banking and Branch Efficiency Act of 1994 (the
"Interstate Banking Act") on September 29, 1994. Beginning in September 1995,
bank holding companies, upon meeting certain criteria, were authorized to
acquire existing banks on a nationwide basis without regard to state statutes to
the contrary. Effective June 1, 1997, the Interstate Banking Act will permit
mergers of banks on an interstate basis, unless states in which such banks are
located pass legislation specifically prohibiting out-of-state banks from
operating interstate branches within their boundaries. In addition, the
Interstate Banking Act provides for de novo interstate branching where states
enact legislation specifically authorizing interstate branching within the host
state. In addition, Georgia law has been changed to allow inter-county branching
without limitation beginning July 1, 1998. See "Supervision and Regulation --
Recent Legislative Developments."
EMPLOYEES
As of the date of this Prospectus, the only employees of the Company
and the Bank are Timothy I. Warren, the President and Chief Executive Officer of
the Company and the Bank, Elaine B. Lovvorn, Senior Vice President and Chief
Financial and Operations Officer of the Bank and Secretary and Treasurer of the
Company, and their administrative assistant. Unless the Company expands its
operations into other activities permitted by law to a bank holding company, it
is unlikely that the Company will have many employees.
During the first year of operations, management anticipates that the
Bank will employ approximately 13 persons of whom it is estimated three will be
officers of the Bank, four will be tellers and six will be customer service,
lending, bookkeeping and secretarial personnel. In addition to the current
employees, the Bank will employ a Senior Credit Officer who is subject to the
approval of the DBF and the FDIC. The DBF has required as a condition to its
issuance of a permit to begin business that this officers be hired by the Bank.
See "Management."
BANK OFFICES
The Bank intends to begin operations in the Temporary Offices pending
construction of the Main Office. The Temporary Office consists of a two-story
brick building with approximately 3,500 square feet of space on the main floor.
Phillip Kauffman, one of the Organizers, leased the building for a term ending
March 1998 at a monthly rental rate of $2,500. The Temporary Office lease was
assigned by Mr. Kauffman and assumed by the Company on September 13, 1996. See
"Certain Transactions -- Temporary Office Lease Assumption." The Organizers
anticipate that the Bank will commence operation in the Temporary Office within
approximately 60 days after completion of the minimum offering and after
expenditures of approximately $30,000 for improvements.
The Main Office will be a two-story building with approximately 6,000
square feet of finished space on the first floor and 4,000 square feet of
unfinished space on the second floor. The Main Office plans provide for six
inside teller stations, four outside drive-up teller stations, and one outside
automatic teller machine. Total construction costs of the Main Office are
currently expected to be $1,130,000, with construction expected to be completed
between approximately six and 12 months after completion of the minimum
offering. Management anticipates that there will be approximately 48 parking
spaces adjacent to the Main Office, which will provide sufficient parking for
customers. The currently anticipated Main Office site
-16-
<PAGE>
would be purchased from Charles J. Puckett, one of the Organizers, for $300,000.
See "Certain Transactions -- Main Office Site Purchase." The Bank premises will
require furniture, fixtures and equipment in order to make the premises suitable
for its banking operations, which management estimates will cost approximately
$230,440.
The Bank intends to open from 9:00 a.m. to 4:00 p.m., Monday through
Thursday, from 9:00 a.m. to 6:00 p.m. on Friday, and from 9:00 a.m. to 12:00
p.m. on Saturday. Management intends that the Bank's drive-through teller
station will be open from 8:30 a.m. to 4:00 p.m. Monday through Thursday, 8:30
a.m. to 6:00 p.m. on Friday, and 8:30 a.m. to 12:00 p.m. on Saturday.
BANKING SERVICES GENERALLY
The Bank will offer a full range of commercial banking services to
individual, professional and business customers in its primary service area.
These services will include personal and business checking accounts and savings
and other time certificates of deposit. The transaction accounts and time
certificates will be at rates competitive with those offered in the Bank's
primary service area. Customer deposits with the Bank will be insured to the
maximum extent provided by law through the FDIC. The Bank plans to issue credit
cards to act as a merchant depository for cardholder drafts under both Visa and
MasterCard. The Bank intends to offer night depository and bank-by-mail services
and to sell traveler's checks (issued by an independent entity) and cashier's
checks. The Bank does not anticipate offering trust and fiduciary services
initially and will rely on trust and fiduciary services offered by correspondent
banks until the Bank determines that it is profitable to offer such services
directly.
LENDING ACTIVITIES
GENERAL CREDIT RISK. The Bank will seek to attract deposits from the
general public and will use such deposits, together with borrowings and other
sources of funds, to originate and purchase loans. The Bank will offer a full
range of short and medium-term commercial, consumer and real estate loans. The
Bank will attempt to react to prevailing market conditions and demands in its
lending activities, while avoiding excessive concentrations of any particular
loan category. The Bank has not yet fixed specific goals with respect to lending
concentration by type of loan and the Bank's written loan policy is in the
process of being developed and will be approved by the DBF prior to issuing a
permit to begin business to the Bank. The Bank will develop a loan approval
process which will provide for various levels of officer lending authority. When
a loan amount exceeds an officer's lending authority, it will be transferred to
an officer with a higher limit with ultimate lending authority resting with the
Loan Committee of the Board of Directors.
The risk of nonpayment (or deferred payment) of loans is inherent in
making all loans. However, management of the Bank intends to carefully evaluate
all loan applicants and to attempt to minimize its credit risk exposure by use
of thorough loan application and approval procedures that will be established
for each category of loan prior to beginning operation. In determining whether
to make a loan, the Bank shall consider matters such as the borrower's credit
history, analyze the borrower's income and ability to service the loan and
evaluate the need for collateral to secure recovery in the event of default.
Under Georgia law, the Bank is limited in the amount it can loan to a single
borrower (and its related interests) to no more than 15% of the Bank's statutory
capital base unless the loan in excess of 15% of the statutory capital base is
approved by the Bank's board of directors and unless the entire amount of the
loan is secured. In no event, however, may the loan be greater than 25% of the
Bank's statutory capital base. The Organizers expect that the Bank's legal
lending limit under Georgia law for one borrower based upon its initial
statutory capital base will be approximately $625,000 for unsecured loans and
$1,250,000 for fully secured loans. The Bank's loan policy, when developed and
approved by the DBF, may establish a lower lending limit. The Bank will maintain
an allowance for loan losses based upon management's assumptions and judgments
about the ultimate collectibility of loans in its portfolio and provide an
allowance for possible loan losses based upon a percentage of the outstanding
balances and for specific loans when their ultimate collectibility is considered
questionable. Certain risks with regard to specific categories of loans are
described below.
COMMERCIAL LOANS. Commercial lending activities will be directed
principally toward businesses whose demand for funds will fall within the Bank's
anticipated lending limit, such as small to medium-size professional firms,
retail and wholesale businesses, light industry and manufacturing concerns
operating in and around the Bank's primary service area. The types of loans
provided will include principally term loans with variable interest rates
secured by equipment, inventory, receivables and real estate, as well as secured
and (to a limited extent) unsecured working capital lines of credit. Repayment
-17-
<PAGE>
of these loans will be dependent upon the financial success of the business
borrower and, in the discretion of the Bank, personal guarantees may be obtained
from the principals of business borrowers and/or third parties to further
support the borrower's ability to service the debt and reduce the risk of
nonpayment.
REAL ESTATE LOANS. Real estate lending will be oriented toward short-
term interim loans and construction loans. The Bank may originate a limited
number of variable-rate residential and other mortgage loans for its own account
and both variable and fixed-rate residential mortgage loans for resale. The
residential loans will be secured by first mortgages on one-to-four family
residences in the Bank's market area. Loans secured by second mortgages on a
borrower's residence may also be made. Under Georgia law, a Bank will make loans
secured by real estate only where such loans are for not more than 75% of the
fair market value of the real estate in the case of a single maturity loan or
for not more than 90% of the value of the real estate in the case of amortized
loans.
CONSUMER LOANS. Consumer lending will be made on a secured or
unsecured basis and will be oriented primarily to the needs of the Bank's
customers, with an emphasis on automobile financing, home improvements, debt
consolidation and other personal needs. Consumer loans will generally involve
more risk than first mortgage loans because the collateral for a defaulted loan
may not provide an adequate source of repayment of the outstanding loan balance
because of damage to the collateral or other loss of value and the remaining
deficiency often does not warrant further collection efforts. In addition,
consumer loan performance is dependent upon the borrower's continued financial
stability and are therefore more likely to be adversely affected by job loss,
divorce, illness or personal bankruptcy. Various federal and state laws,
including federal and state bankruptcy and insolvency laws, may also limit the
amount which can be recovered.
ASSET AND LIABILITY MANAGEMENT
The primary assets of the Bank will consist of its loan portfolio and
investment account. Consistent with the requirements of prudent banking
necessary to maintain liquidity, management will seek to match maturities and
rates of loans and the investment portfolio with those of deposits, although
exact matching is not always possible. Management will seek to invest the
largest portion of the Bank's assets in commercial, consumer and real estate
loans. The Bank anticipates that loans will be limited to less than 75% of
deposits and capital funds; however, this ratio may be exceeded in the Bank's
initial period of operation. It is anticipated that the Bank's investment
account will consist primarily of marketable securities of the United States
government, federal agencies and state and municipal governments, generally with
varied maturities.
The Bank's investment policy will provide for a portfolio divided
among issues purchased to meet one or more of the following objections: (i) to
complement strategies developed in assets/liquidity management, including
desired liquidity levels; (ii) to maximize after-tax income from funds not
needed for day-to-day operations and loan demand; and (iii) to provide
collateral necessary for acceptance of public funds. Management anticipates that
its policy will allow the Bank to deal with seasonal deposits fluctuations and
to provide for basic liquidity consistent with the Bank's loan demand. When
possible, maturation will match anticipated liquidity demands. Longer term
securities may be selected for a combination of yield and exemption from federal
income taxation when appropriate. Deposit accounts will represent the majority
of the liabilities of the Bank. These will include transaction accounts, time
deposits and certificates of deposit.
Initially, the Bank anticipates deriving its income principally from
interest charged on loans and, to a lesser extent, from interest earned on
investments, from fees received in connection with the origination of loans and
from other services. The Bank's principal expenses are anticipated to be
interest expense on deposits and operating expenses. The funds for such
activities are anticipated to be provided principally by operating revenues,
deposit growth, purchase of federal funds from other banks, repayment of
outstanding loans and sale of loans and investment securities.
SUPERVISION AND REGULATION
The following summaries of statutes and regulations affecting bank
holding companies and banks do not purport to be complete. Such summaries are
qualified in their entirety by reference to such statutes and regulations.
SUPERVISION AND REGULATION OF THE COMPANY
-18-
<PAGE>
The Company will be a bank holding company within the meaning of the
federal Bank Holding Company Act of 1956, as amended, and the Georgia Bank
Holding Company Act. As a bank holding company, the Company will be required to
file with the FRB and the DBF annual reports and information regarding its
business operations and those of its subsidiary. A bank holding company and its
subsidiary will also be subject to examination by these agencies.
A bank holding company is required by the federal Bank Holding Company
Act to obtain approval from the FRB prior to acquiring, directly or indirectly,
ownership of more than 5% of the voting stock of or control of any bank that is
not already majority owned or controlled by that bank holding company. The
Riegle Community Development and Regulatory Improvement Act of 1994 (the
"Regulatory Improvement Act") provides for the creation of a community
development financial institution's fund to promote economic revitalization in
community development. Banks are allowed to participate in such community
development banks. The Regulatory Improvement Act also contains (i) provisions
designed to enhance small business capital formation and to enhance disclosure
with regard to high cost mortgages for the protection of consumers, and (ii)
more than 50 regulatory relief provisions that apply to banks and thrift
institutions, including the coordination of examinations by various federal
agencies, coordination of frequency and types of reports financial institutions
are required to file and reduction of examinations for well capitalized
institutions.
The federal Bank Holding Company Act also prohibits bank holding
companies, with certain exceptions, from acquiring more than 5% of the voting
shares of any company that is not a bank and from engaging in any business other
than banking or managing or controlling banks and other subsidiaries authorized
by the statute or furnishing services to, or performing services for,
subsidiaries without the prior approval of the FRB. The FRB is authorized to
approve, among other things, the ownership of shares by a bank holding company
in any company the activities of which it has determined by order or regulation
to be so closely related to banking or to managing or controlling banks as to be
a proper incident thereto. Notice to and review by the FRB of such activities
would be necessary before the Company could engage in such activities. The FRB
is empowered to differentiate between activities that are initiated de novo by a
bank holding company or a subsidiary and activities commenced by acquisition of
a going concern.
A bank holding company may be compelled by bank regulatory authorities
to invest additional capital in the event the subsidiary bank experiences either
significant loan losses or rapid growth of loans or deposits. In addition, a
bank holding company may be required to provide additional capital to other
banks that it acquires as a condition to obtaining the approvals and consents of
regulatory authorities in connection with such acquisitions. FRB policy requires
a bank holding company to act as a source of financial strength and to take
measures to preserve and protect bank subsidiaries in situations where
additional investments in a troubled bank may not be warranted.
The Company will also be a bank holding company within the meaning of
the Georgia Bank Holding Company Act, which provides that, without prior
approval of the DBF, it is unlawful for (i) any bank holding company to acquire
direct or indirect ownership or control of more than 5% of the voting shares of
any bank, (ii) any bank holding company or subsidiary thereof, other than a
bank, to acquire all or substantially all of the assets of the bank, or (iii)
any bank holding company to merge or consolidate with any other bank holding
company. It also is unlawful for a bank holding company to acquire direct or
indirect ownership or control of 5% or more of the voting shares of a bank in
Georgia unless such bank has been in existence and continuously operating as a
bank for a period of five years or more prior to the date of application to the
commissioner for approval of such acquisition. This restriction is not
applicable to companies, such as the Company, that will control only the one
bank that is to be acquired. However, these companies are themselves prohibited
from acquiring another bank until the initial bank has been incorporated for a
period of twenty-four months. The effect of these provisions on the Company is
to prevent the possibility that the Company or the Bank will be acquired by an
existing bank holding company for a minimum of five years, and to prohibit the
Company from acquiring another bank for a period of two years.
As a bank holding company, the Company is subject to capital adequacy
guidelines as established by the FRB. The FRB established risk-based capital
guidelines for bank holding companies effective March 15, 1989. Beginning on
December 31, 1992, the minimum required ratio for total capital to risk weighted
assets became 8 percent (of which at least 4 percent must consist of Tier 1
capital). Tier 1 capital (as defined in regulations of the FRB) consists of
common and qualifying preferred stock and minority interests in equity accounts
of consolidated subsidiaries, less goodwill and other intangible assets required
to be deducted under the FRB's guidelines.
-19-
<PAGE>
The FRB's guidelines apply on a consolidated basis to bank holding
companies with total consolidated assets of $150 million or more. For bank
holding companies with less than $150 million in total consolidated assets (such
as the Company), the guidelines will be applied on a bank only basis, unless the
bank holding company is engaged in nonbanking activity involving significant
leverage or has significant amount of debt outstanding that is held by the
general public. The FRB has stated that risk-based capital guidelines establish
minimum standards and that bank holding companies generally are expected to
operate well above the minimum standards.
The Company is a legal entity separate and distinct from the Bank.
Therefore, the stock of the Company is subject to the registration requirements
of the Securities Act of 1933. The Company may also be subject to the
requirements of the Securities Exchange Act of 1934, which include, without
limitation, the filing of annual, quarterly and other reports with the
Securities and Exchange Commission .
SUPERVISION AND REGULATION OF THE BANK
The Bank will be examined and regulated by the DBF and the FDIC.
Pursuant to regulations adopted by the DBF, the Bank must have the approval of
the Commissioner to pay cash dividends unless at the time of such payment (i)
the total classified assets at the most recent examination of the Bank do not
exceed 80% of the Bank's equity capital and reserves as reflected by such
examination; (ii) the aggregate amount of dividends declared or anticipated to
be declared in the calendar year does not exceed 50% of the net profits, after
taxes but before dividends, for the previous calendar year; and (iii) the ratio
of the Bank's equity capital and reserves to adjusted total assets is not less
than 6%. In addition, the DBF (i) will prohibit the payment of any dividends by
the Bank unless and until the Company and the Bank have become cumulatively
profitable on a consolidated basis and (ii) will require that the Bank maintain
a capital-to-asset ratio of not less than 8% during the first three years of
operation.
The Bank will be a member of the FDIC, which currently insures the
deposits of each member bank to a maximum of $100,000 per depositor. For this
protection, the Bank will pay a semi-annual statutory assessment and will be
subject to the rules and regulations of the FDIC. The FDIC has the authority to
prevent the continuance or development of unsound and unsafe banking practices.
The FDIC is also authorized, among other things, to approve conversions,
mergers, consolidations and assumption of deposit liability transactions between
insured banks and uninsured banks or institutions, and to prevent capital or
surplus diminution in such transactions where the resulting, continuing, or
assumed bank is an insured nonmember state bank.
The Bank, as a state chartered bank, will be permitted to branch only
to the extent that banks are permitted to branch under Georgia law. In January
1996, the Georgia legislature passed a bill designed to eliminate Georgia's
county-wide branching restrictions. The new law provides that effective July 1,
1996, banks in Georgia, with prior approval of the DBF (and the appropriate
federal regulatory authority), may establish up to three new branches to be
located in any county in the state. Effective July 1, 1998, Georgia banks may
establish and unlimited number of branches in any county in the state, upon
receipt of appropriate regulatory approvals.
Federal banking regulations applicable to all banks, among other
things (i) provide federal bank regulatory agencies with powers to prevent
unsafe and unsound banking practices; (ii) restrict preferential loans by banks
to "insiders" of banks; (iii) require banks to keep information on loans to
principal shareholders and executive officers; and (iv) prohibit certain
director and officer interlocks between financial institutions.
The FDIC has adopted final risk-based capital guidelines for all FDIC
insured state chartered banks that are not members of the Federal Reserve
System. As of December 31, 1992, all banks are required to maintain a minimum
ratio of total capital to risk weighted assets of 8 percent (of which at least 4
percent must consist of Tier 1 capital). Tier 1 capital of state chartered banks
(as defined in regulations) generally consists of (i) common stockholders
equity; (ii) noncumulative perpetual preferred stock and related surplus; and
(iii) minority interests in the equity accounts of consolidated subsidiaries.
In addition, the FDIC adopted a minimum ratio of Tier 1 capital to
total assets of banks. This capital measure is generally referred to as the
leverage capital ratio. The FDIC has established a minimum leverage capital
ratio of 3 percent
-20-
<PAGE>
if the FDIC determines that the institution is not anticipating or experiencing
significant growth and has well-diversified risk, including no undue interest
rate exposure, excellent asset quality, high liquidity, good earnings and, in
general, is considered a strong banking organization, rated Composite 1 under
the Uniform Financial Institutions Rating Systems. Other financial institutions
are expected to maintain leverage capital at least 100 to 200 basis points above
the minimum level.
On December 19, 1991, the Federal Deposit Insurance Corporation
Improvement Act of 1991 (the "Improvement Act") was enacted into law. The
Improvement Act provides for, among other matters, addressing the safety and
soundness of deposit insurance funds, prompt regulatory corrective action by
federal agencies when a bank begins to experience difficulties that may threaten
loss to the FDIC, revised limitations on borrowings by insiders of banks, their
parent bank holding companies and their affiliates, limited guarantees of
capital restoration by bank holding companies of their subsidiary banks and
provisions for depository institution conversions. The FDIC has adopted
regulations which, among other matters, implement provisions of the Improvement
Act that require or permit the FDIC to take specific supervisory actions when
FDIC-insured institutions come within one of five specific capital categories.
The five capital categories are designated as (1) well capitalized, (2)
adequately capitalized, (3) undercapitalized, (4) significantly
undercapitalized, and (5) critically undercapitalized.
The Company will be an "affiliate" of the Bank within the meaning of
the Federal Reserve Act, which, among other things, imposes restrictions on
loans to the Company by the Bank or investments by the Bank in securities of the
Company and on the use of such securities as collateral for loans by the Bank to
any borrower. The Company will also be subject to certain restrictions with
respect to engaging in the business of issuing, underwriting and distributing
securities.
MONETARY POLICY
Banking is a business that depends on interest rate differentials. In
general, the difference between the interest rates paid by the Bank on its
deposits and other borrowings and the interest rate received on loans extended
to its customers and on securities held in its portfolios comprises the major
portion of the Bank's earnings.
The earnings and growth of the Bank and of the Company are affected
not only by general economic conditions, both domestic and foreign, but also by
the monetary and fiscal policies of the United States and its agencies,
particularly the FRB. The FRB implements national monetary policy (as opposed to
fiscal policy), such as seeking to curb inflation and combat recession, by its
open market operations in the United States government securities, adjustments
in the amount of industry reserves that banks and other financial institutions
are required to maintain and adjustments to the discount rates applicable to
borrowings by banks from the Federal Reserve System. The actions of the FRB in
these areas influence the growth of bank loans, investments and deposits and
also affect interest rates charged and paid on deposits. The nature and impact
of any future changes in monetary policies cannot be predicted with certainty.
RECENT LEGISLATIVE DEVELOPMENTS
On September 29, 1994, the "Riegle-Neal Interstate Banking and
Branching Efficiency Act of 1994" (the "Interstate Banking Act") was enacted. In
general, the Interstate Banking Act will, among other matters, permit bank
holding companies, upon receipt of appropriate regulatory approvals, (i) to
consolidate their multistate bank subsidiaries into a single bank on or after
June 1, 1997, unless the state legislatures act to "opt-out" of this provision
prior to such effective date; and (ii) to acquire banks in any state one year
after the effective date of the Interstate Banking Act. The Interstate Banking
Act will also permit banks, upon receipt of appropriate regulatory approvals, to
establish de novo branches across state lines, so long as the individual states
-- ----
into which the potential de novo entrant proposes to branch specifically pass
-- ----
legislation to authorize out-of-state banks to branch in that state on a de novo
-- ----
basis. The Interstate Banking Act generally prohibits an interstate acquisition
(other than an initial entry into a state by a bank holding company)), which
would result in either the control of more than (i) 10% of the total amount of
insured deposits in the United States, or (ii) 30% of the total amount of
insured deposits in the home state of the target bank, unless such 30%
limitation is waived by the home state on a basis which does not discriminate
against out-of-state institutions.
The Riegle Community Development and Regulatory Improvement Act of
1994 (the "Regulatory Improvement Act") provides for the creation of a community
development financial institution's fund to promote economic revitalization in
community development. Banks are allowed to participate in such community
development banks. The Regulatory
-21-
<PAGE>
Improvement Act also contains (i) provisions designed to enhance small business
capital formation and to enhance disclosure with regard to high cost mortgages
for the protection of consumers, and (ii) more than 50 regulatory relief
provisions that apply to banks and thrift institutions, including the
coordination of examinations by various federal agencies, coordination of
frequency and types of reports financial institutions are required to file and
reduction of examinations for well capitalized institutions.
In January 1996, the Georgia legislative passed a law effective July
1, 1996 that eliminated Georgia's inter-county branching restrictions. Until
July 1, 1998 and subject to regulatory approval, banks may establish up to three
new branches located in any county in Georgia. Effective on July 1, 1998,
Georgia banks may establish an unlimited number of banks with appropriate
regulatory approval.
The United States Congress and the Georgia General Assembly have
periodically considered and adopted legislation that has resulted in, and could
further result in, deregulation of both banks and other financial institutions.
Such legislation could further eliminate geographic restrictions on banks and
bank holding companies and current prohibitions against banks engaging in
certain non-banking activities. Such legislative changes could place the Company
in more direct competition with other financial institutions, including mutual
funds, securities brokerage firms, insurance companies and investment banking
firms. The effect of any such legislation on the business of the Company cannot
be accurately predicted. The Company cannot predict what other legislation might
be enacted or what other regulations might be adopted, and if enacted or
adopted, the effect thereof.
MANAGEMENT
DIRECTORS AND EXECUTIVE OFFICERS
The members of the Board of Directors of the Company are divided into
three classes that serve staggered three-year terms. The members of one class
are elected at each annual meeting of shareholders and hold office until the
third annual meeting following their election or until successors are elected
and qualified. The following table sets forth certain information with respect
to the current directors and executive officers of the Company and the Bank.
<TABLE>
<CAPTION>
POSITION POSITION
NAME AGE WITH COMPANY WITH BANK
- ---- --- ------------ ---------
<S> <C> <C> <C>
Timothy I. Warren 35 President, Chief Executive President, Chief Executive
Officer and Director Officer and Director
Steve R. Adams 43 Director Director
John B. Bohannon 49 Vice Chairman of the Board Vice Chairman of the Board of
of Directors Directors
Ann C. Carter 48 Director Director
Lester H. Harmon 50 Director Director
William P. Johnson 63 Director Director
Phillip Kauffman 49 Chairman of the Board of Chairman of the Board of
Directors Directors
Elaine B. Lovvorn 52 Secretary Senior Vice President, Chief
Financial and Operations Officer
Jeff R. Matthews 40 Director Director
Charles J. Puckett 63 Director Director
William C. Seaton 48 Director Director
</TABLE>
-22-
<PAGE>
<TABLE>
<S> <C> <C> <C>
Mark S. Swindle 48 Director Director
</TABLE>
The business and residential addresses respectively of the above-named
Directors and Executive Officers of the Company are as follows: Mr. Warren, 516
Bankhead Highway, Carrollton, Georgia 30117 and 4141 Tyus Road, Carrollton,
Georgia 30117; Mr. Adams, 1952 Highway 27 N., Carrollton, Georgia 30117 and 565
Miller Academy Road, Carrollton, Georgia 30117; Mr. Bohannon, 205 Bankhead
Avenue, Carrollton, Georgia 30117 and 115 Habersham Place, Carrollton, Georgia
30117; Ms. Carter, 205 Bankhead Avenue, Carrollton, Georgia 30117 and 356 Club
Drive, Carrollton, Georgia 30117; Mr. Harmon, 155 Sage Street, Temple, Georgia
30179 and 70 Harmon Road, Temple, Georgia 30179; Mr. Johnson, 306 Tanner Street,
Carrollton, Georgia 30117 and 108 W. Club Drive, Carrollton, Georgia 30117; Mr.
Kauffman, 500 Industrial Ct. W., Villa Rica, Georgia 30180 and 120 Lisa Lane,
Carrollton, Georgia 30117; Ms. Lovvorn, 516 Bankhead Highway, Carrollton,
Georgia 30117 and 114 Mill Street, Bowdon, Georgia 30108; Mr. Matthews, P.O. Box
324, Villa Rica, Georgia 30180 and 250 Garst Road, Carrollton, Georgia 30116;
Mr. Puckett, 2208 Bankhead Highway, Carrollton, Georgia 30117 and 88 Mallard
Lake, Carrollton, Georgia 30117; Mr. Seaton, 102 Wedgewood Drive, Carrollton,
Georgia 30117 and 50 N. Hill Street, Carrollton, Georgia 30117; Mr. Swindle, 105
Somerset Place, Suite A, Carrollton, Georgia 30117 and 109 Stonewall Drive,
Carrollton, Georgia 30117.
Ms. Carter and Messrs. Harmon and Seaton are currently serving in
Class I with terms expiring in 1997, Messrs. Adams, Bohannon, Matthews and
Swindle are currently serving in Class II with terms expiring in 1998, and
Messrs. Johnson, Kauffman, Puckett and Warren are currently serving in Class III
with a term expiring in 1999. The business experience of each of the directors
and executive officers of the Company and the Bank is set forth below.
Timothy I. Warren will serve as the President, Chief Executive Officer
and a Director of the Company and the Bank upon its organization. Mr. Warren has
been involved in banking since 1980. Mr. Warren was President, Chief Executive
Officer and a Director of The Community Bank of Carrollton from April 1991 to
July 1996, when that bank was merged into Regions Bank, and the President, Chief
Executive Officer and a Director of The Bank of Villa Rica from February 1996
and until that bank was also merged into Regions Bank in July 1996. Mr. Warren
then served as an area manager for Regions Bank in the former bank market areas
until leaving Regions Bank in August 1996 to assume his current positions with
the Company and the Bank.
Steve R. Adams will serve as a Director of the Company and the Bank.
Mr. Adams founded West Georgia Ambulance (providing emergency ambulance service)
and Adams Transportation (providing multi-transportation services). In January
1996, Mr. Adams sold West Georgia Ambulance to AMR, a publicly-traded company
listed on the New York Stock Exchange. Mr. Adams remains the Chief Operating
Officer of the West Georgia Division of AMR.
John B. Bohannon will serve as Vice Chairman of the Board of Directors
of the Company and the Bank. Since 1974, Mr. Bohannon has been President of
First Realty Associates, Inc. Mr. Bohannon was a Director of The Community Bank
of Carrollton from September 1987 until June 1996.
Ann C. Carter will serve as a Director of the Company and the Bank and
is an interior design specialist. Ms. Carter was a director of The Community
Bank of Carrollton from September 1987 until June 1996.
Lester H. Harmon will serve as a Director of the Company and the Bank.
Since 1974, Mr. Harmon has been the owner and President of West Georgia Crown
and Bridge. Mr. Harmon was a Director of The Community Bank of Carrollton from
September 1987 until June 1996.
William P. Johnson will serve as a Director of the Company and the
Bank. Mr. Johnson has practiced law in Carrollton, Georgia since 1957, and is a
senior partner in the law firm of Johnson, Dangle and Parmer. Mr. Johnson
currently is the President of Universal Furniture, and a Director of Temple
Manufacturing. Mr. Johnson was a Director of The Community Bank of Carrollton
from September 1987 until June 1996.
-23-
<PAGE>
Phillip Kauffman will serve as Chairman of the Board of Directors of
the Company and the Bank. Since December 1989, Mr. Kauffman has been the
President of Leuco-Henderson, a tooling manufacturer. Mr. Kauffman was a
Director of The Community Bank of Carrollton from September 1987 until November
1995.
Elaine B. Lovvorn will serve as Secretary of the Company and Senior
Vice President, Chief Financial and Operations Officer of the Bank upon its
organization. Mrs. Lovvorn has been involved in banking for 33 years and has
held banking officer positions as either an operations officer or financial
officer for more than 20 years. She assisted in the organization of Carroll
National Bank in July 1987, and served as that bank's Cashier through September
1991 when it was acquired by Synovus Financial Corporation. She then joined The
Community Bank of Carrollton as a Senior Vice President and Controller in March
1992, remaining there through February 1994 before returning to her home town of
Bowdon to serve as the manager of a $40 million branch of Carrollton Federal
Savings and Loan Association. Mrs. Lovvorn then rejoined The Community Bank in
November 1994 and remained there through August 1996, when that bank was
converted into a Regions Bank branch and Mrs. Lovvorn joined the Company.
Jeff R. Matthews will serve as a Director of the Company and the Bank.
Since 1978, Mr. Matthews has been self-employed as a timber dealer and real
estate developer.
Charles J. Puckett will serve as a Director of the Company and the
Bank. Mr. Puckett has been the owner and President of People's
Dodge/Chrysler/Jeep since 1977. Mr. Puckett was a Director of The Community Bank
of Carrollton from September 1987 until June 1996.
William C. Seaton will serve as a Director of the Company and the
Bank. Mr. Seaton has been the President of Seaton Development Co., Inc., a real
estate development company, since May 1973. From August 1985 until January 1995,
Mr. Seaton co-owned Eagle Outdoor Advertising, Inc., which is involved in
building and marketing billboards. Mr. Seaton has been the sole owner of that
firm since January 1995. Mr. Seaton was also a Director of The Community Bank of
Carrollton from September 1987 until June 1996.
Mark S. Swindle will serve as a Director of the Company and the Bank.
Mr. Swindle has been President of BSA Activewear, a manufacturer of active
sportswear apparel, since May, 1989. Mr. Swindle was also a Director of The
Community Bank of Carrollton from September 1987 until June 1996.
The Bylaws of the Company and the Bank provide for the Board of
Directors to have between six and twenty directors, which shall be fixed from
time to time by resolution of the Board. The Board of Directors of the Company
and the Bank have fixed by resolution the number of directors currently to be
eleven members. The individuals listed as directors in the foregoing table are
presently serving as directors of the Company and as directors of the Bank. The
Board of Directors of the Bank intends to maintain a loan committee, an
investment committee, and an audit committee. The DBF and the FDIC have the
authority to disallow any individual from serving as a director of the Bank.
REMUNERATION
The directors of the Company and the Bank other than Timothy I. Warren
have not received and will not receive fees or other compensation in connection
with the organization of the Company and the Bank. The directors of the Company
and the Bank will not be paid fees for their service on or at meetings of the
Board of Directors or committees thereof, until such time as the Bank has become
profitable on a cumulative basis.
Timothy I. Warren has entered into an employment agreement with the
Bank to serve as President and Chief Executive Officer of the Company and the
Bank providing for an annual minimum base salary of $135,000. Mr. Warren has
agreed to be paid at the annual rate of $100,000 until the Company accepts
subscriptions for the minimum 625,000 shares. Elaine B. Lovvorn has also been
retained with an annual base salary of $42,000 until the Company accepts
subscriptions for the minimum offering at which time her annual base salary will
increase to $55,000. Mr. Warren may receive a performance bonus ranging from 0%
to 50% of annual base salary and will be awarded based upon the Bank's
-24-
<PAGE>
performance and upon the Bank's composite rating received in its most recent
report of examination by its primary Federal regulatory authority.
In addition, the Company also intends to implement an Employee
Incentive Stock Option Plan for employees of the Bank and reserve a total of
75,000 shares out of the Company's total authorized shares for this purpose. The
Company currently expects to grant options with respect to 15,000 shares to Mr.
Warren under the terms of his employment agreement and additional options with
respect to an additional 8,000 shares to Ms. Lovvorn and other Bank officers
soon after establishing the plan, all with an exercise price per share equal to
the initial offering price of $10.00.
Mr. Warren's employment agreement also provides for employee benefits
such as annual vacation, the use of a Bank-owned automobile, life and medical
insurance with dependant coverage, dental insurance, country club membership and
reimbursement for reasonable business related expenses.
Mr. Warren's employment under the employment agreement commenced on
August 15, 1996, and will terminate in July of 2001, unless terminated sooner
because of his death, disability or for cause. The agreement will automatically
renew for one year after the expiration of the initial term unless either party
gives 90 days prior written notice to the contrary. If terminated without cause
he is entitled to receive his annual base salary payable in 48 bi-monthly equal
payments, net of withholding.
In addition, the employment agreement provides for severance pay for
Mr. Warren in the event of Mr. Warren's termination (except for cause) after a
change of control of the Bank. Under the employment agreement, the term
"control" means the acquisition of 25 percent or more of the voting securities
of the Bank by any person, or persons acting as a group within the meaning of
Section 13(d) of the Securities Exchange Act of 1934 or the acquisition of
between 10 percent and 25 percent if the Board of Directors of the Bank or the
Comptroller of the Currency, the Federal Deposit Insurance Corporation or the
Federal Reserve Bank has made a determination that such acquisition constitutes
or will constitute control of the Bank.
The employment agreement provides that if the employee is terminated
after 365 days as a result of a change of control, the employee shall be
entitled to receive his salary through the last day of the calendar month of the
termination, or payment in lieu of the notice period. In addition, Mr. Warren
would receive an amount equal to three times his then existing annual base
salary. The employment agreement further provides that the payment shall also be
made in connection with, or within 120 days after, a change of control of the
Bank if such change of control was opposed by Mr. Warren on the Bank's Board of
Directors. This payment would be in addition to any amount otherwise owed to the
employee pursuant to the employment agreement.
In the event of a change of control, the following items would be
automatically considered due and payable to Mr. Warren under the employment
agreement: (i) non-forfeitable deferred compensation shall be paid in full; (ii)
long-term performance plan objective payments as described in Section II, 2, f,
shall be declared accomplished and earned based upon performance up to date of
the change of control; and (iii) in the event that the employee is a participant
in a restricted stock plan, or share option plan, and such plan is terminated
involuntarily as a result of the change of control, all stock and options shall
be declared 100% vested and distributed.
LIMITATION ON DIRECTORS' LIABILITY
The Company's Articles of Incorporation contain a provision which, in
accordance with Georgia law, eliminates or limits the personal liability of
directors to their corporations or the shareholders thereof for monetary damages
for certain breaches of their duty of care or other duty. This provision
provides that a director of the company shall not be personally liable for
monetary damages for a breach of his or her duty of care or other duty as a
director, except for liabilities for (i) any appropriation, in violation of the
director's duties, of any business opportunity of the Company, (ii) acts or
omissions not in good faith or which involve intentional misconduct or a knowing
violation of law, (iii) authorization of improper dividends or redemptions, or
(iv) any transaction from which the director derived an improper personal
benefit. Liability for monetary damages remains unaffected by such provision if
liability is based on any of these grounds. Liability for monetary damages for
violations of federal securities laws would also remain unaffected. The
provision does not eliminate a director's fiduciary duty, nor does it preclude a
shareholder from pursuing injunctive or other equitable remedies.
-25-
<PAGE>
The provision under Georgia law was prompted in part by adverse
changes in the cost and availability of director and officer liability insurance
and by a concern that corporations would encounter difficulties in attracting
and retaining qualified directors. The Board of Directors believes this
provision in the Company's Articles of Incorporation is essential to maintain
and improve the ability of the Company to attract and retain competent
directors.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 (the "Act") may be permitted to directors, officers and
controlling persons of the issuer pursuant to the foregoing provisions or
otherwise, the Company has been advised that in the opinion of the Securities
and Exchange Commission such indemnification is against public policy as
expressed in the Act and is, therefore, unenforceable.
CERTAIN TRANSACTIONS
ORGANIZERS' AND DIRECTORS' SHARES
The Organizers currently intend to subscribe for 326,400 Shares of
this offering. The Organizers may, but are not obligated to, purchase additional
Shares if such purchases are necessary to complete the minimum offering. No
Organizer, director or officer and his affiliates will be permitted to purchase
in this offering an amount of Shares which would exceed 20% (including Shares
owned by their immediate family members and affiliates) of the total number of
Shares outstanding upon completion of this offering. The maximum aggregate
number of Shares that these Organizers and directors may purchase to complete
the minimum offering is 393,750 Shares, or 63% of the 625,000 Shares included in
the minimum offering. The foregoing numerical limitation does not apply to any
Shares to be purchased by any additional directors or to additional Shares
purchased after the minimum offering has been achieved. Shares purchased in this
offering by Organizers are being purchased for investment purposes and not for
resale. See "Business," "Management" and "Principal Shareholders."
In August 1996, the Company issued one Share of Common Stock to
Timothy I. Warren for $10 in connection with the organization of the Company and
such subscription will be redeemed for $10 per Share (the price at which they
were issued) upon the issuance of the Shares being offered hereby.
ORGANIZATION LOAN AND OFFERING ESCROW
The Organizers have established the Organization Loan, a $350,000 line
of credit with Peoples Bank of Fannin County for purposes of paying offering,
organizational and preopening expenses for the Company and the Bank and to fund
acquisition of the Main Office site, construction of the Main Office and to
purchase furniture and equipment to be used in the Bank's business. The
Organization Loan bears interest at the prime rate published in the Wall Street
Journal (currently 8.250% per annum) and matures on April 18, 1997. The
Organizers have personally guaranteed repayment of amounts borrowed under the
Organization Loan. Any amounts required to pay organizational, preopening and
offering expenses which exceed the amount available under the Organization Loan
will be advanced by the Organizers either from their personal funds or through
an additional Company line of credit that would almost certainly be guaranteed
by the Organizers. Any additional funds advanced by the Organizers on behalf of
the Company and the Bank will be repaid to the Organizers from the proceeds of
this offering with interest at the Wall Street Journal prime rate. The Company's
ability to repay these loans, and relieve the Organizers from their personal
guarantees, depends upon the completion of this offering. These arrangements
also serve as an incentive for the Organizers to exercise their discretionary
authority to release offering proceeds from escrow in order to assure that the
Organization Loan is repaid. See "The Offering" and "Risk Factors -- Requirement
for Further Regulatory Approvals."
MAIN OFFICE SITE PURCHASE
Charles J. Puckett, one of the Organizers, purchased the property on
which the Main Office site will be located for $150,000 from an unrelated third
party in 1987. Mr. Puckett and the Bank have entered into an agreement providing
for the purchase of the Main Office site by the Bank at a price of $300,000
contingent on approval of the site by the DBF and completion of the minimum
offering. See also "Business -- Bank Offices."
-26-
<PAGE>
TEMPORARY OFFICE LEASE ASSUMPTION
Phillip Kauffman, one of the Organizers, leased the Temporary Office
pursuant to a lease agreement that contemplates assignment to the Bank and the
assumption by the Bank of Mr. Kauffman's obligations under the lease. The term
of the lease will expire in March 1998. The monthly lease rate is $2,500. On
September 13, 1996, Mr. Kauffman assigned the lease to the Company. See also
"Business --Bank Offices."
LENDING AND OTHER MATTERS
It is anticipated that the Company's directors and officers, and the
businesses and other organizations with which they are associated, will have
banking transactions in the ordinary course of business with the Bank. It will
be the policy of the Bank that any loans or other commitments to such persons or
entities will be made in accordance with applicable law and on substantially the
same terms, including interest rates and collateral, as those prevailing at a
time for comparable transactions with other persons or entities of similar
standing. See "Business." All future transactions with affiliates of the
Company and the Bank will be on terms no less favorable than could be obtained
from an unaffiliated third party and will be subject to approval by a majority
of directors including a majority of disinterested directors.
Each loan by the Bank to any officer, director or controlling person
of the Bank or any of its affiliates may be made only in compliance with the
following conditions: The loan (i) will be evidenced by a promissory note naming
the Bank as payee, will contain an annual percentage rate which is reasonably
comparable to that normally charged to non-affiliates by other commercial
lenders for similar loans made in the Bank's locale; (ii) will be repaid
pursuant to appropriate amortization schedules and contain default provisions
comparable to those normally used by other commercial lenders for similar loans
made to non-affiliates in the Bank's locale; (iii) will be made only if credit
reports and financial statements, or other reasonable investigation appropriate
in light of the nature and terms of the loan and which meet the loan policies
normally used by other commercial lenders for similar loans made to non-
affiliates in the Bank's locale show the loan to be collectible and the borrower
a satisfactory credit risk; and (iv) the purpose of the loan and the
disbursement of proceeds are reviewed and monitored in a manner comparable to
that normally used by other commercial lenders for similar loans made in the
Bank's locale.
PRINCIPAL SHAREHOLDERS
SHARE SUBSCRIPTIONS
The following table sets forth certain information regarding the
Shares of the Company's Common Stock that each Organizer and director intends to
subscribe for and the aggregate number of the Shares intended to be subscribed
for by all Organizers and directors as a group.
<TABLE>
<CAPTION>
ANTICIPATED SHARE OWNERSHIP
AFTER OFFERING /(2)(3)/
--------------
MINIMUM MAXIMUM
NUMBER OF OFFERING OFFERING
NAME /(1)/ SHARES PERCENT PERCENT
- ---- --------- -------- --------
<S> <C> <C> <C>
Steve R. Adams 15,000 2.40% 1.88%
Organizer and Director
John B. Bohannon 20,000/(4)/ 3.20% 2.50%
Organizer and Director
Ann C. Carter 10,000 1.60% 1.25%
Organizer and Director
Lester H. Harmon 10,000 1.60% 1.25%
Organizer and Director
</TABLE>
-27-
<PAGE>
<TABLE>
<CAPTION>
ANTICIPATED SHARE OWNERSHIP
AFTER OFFERING /(2)(3)/
--------------
MINIMUM MAXIMUM
NUMBER OF OFFERING OFFERING
NAME /(1)/ SHARES PERCENT PERCENT
- ---- --------- -------- --------
<S> <C> <C> <C>
William P. Johnson 60,000 9.60% 7.50%
Organizer and Director
306 Tanner St., Carrollton, Georgia 30117
Phillip Kauffman 50,000 8.00% 6.25%
Organizer and Director
500 Ind. Ct. West, Villa Rica, Georgia 30180
Elaine B. Lovvorn 4,500/(5)/ /*/ /*/
Company Secretary; Bank CFO and COO
Jeff R. Matthews 30,000/(6)/ 4.80% 3.75%
Organizer and Director
Charles J. Puckett 100,000/(7)/ 16.00% 12.50%
Organizer and Director
2208 Bankhead Highway, Carrollton, Georgia 30117
William C. Seaton 10,000/(8)/ 1.60% 1.25%
Organizer and Director
Mark S. Swindle 10,000/(9)/ 1.60% 1.25%
Organizer and Director
Timothy I. Warren 25,400/(10)/ 4.06% 3.17%
President, Chief Executive Officer,
Organizer and Director
All current directors and officers as a group 326,400 52.22% 40.80%
(12 persons)/(2)(3)/
</TABLE>
_____________________________________
/*/ Less than one percent.
/(1)/ Except as otherwise indicated, the persons named in the above table
have sole voting and investment power with respect to all Shares shown
as beneficially owned by them. The information as to beneficial
ownership has been furnished by the respective persons listed in the
above table.
/(2)/ The maximum aggregate number of Shares that these Organizers,
directors and officers may purchase in the minimum offering is 393,750
Shares or 63% of the outstanding Shares of the minimum offering. These
numbers do not reflect any of these additional Shares which the
Organizers and directors may purchase if such purchases are necessary
to complete the minimum offering. The foregoing numerical limitation
and the numbers of Shares set forth above also do not include any
Shares to be purchased by any additional directors or officers of the
Company or the Bank or to additional Shares purchased after the
minimum offering has been achieved. See "The Offering" and "Certain
Transactions."
-28-
<PAGE>
/(3)/ The Organizers of the Company and the Bank may be deemed "control
persons" or "promoters" of the Company as those terms are defined
under Section 405 of the Securities Act of 1933.
/(4)/ Anticipated to include 7,500 Shares held by Mr. Bohannon's wife and
7,500 Shares owned jointly by them and with respect to which Mr.
Bohannon will share voting and investment power.
/(5)/ Includes 3,500 shares that will be subject to options to be granted to
Ms. Lovvorn. Those options will be immediately exercisable at an
exercise price of $10.00 per share and expire ten years from the date
of grant. See "Management -- Remuneration."
/(6)/ Anticipated to be held jointly with Mr. Matthews' wife, who will share
voting and investment power with respect to those Shares.
/(7)/ Mr. Puckett expects these Shares to be owned by a family limited
partnership of which Mr. Puckett would serve as the general partner
and with voting and investment power with respect to the Shares.
/(8)/ Anticipated to include Shares to be held by Mr. Seaton as custodian
for his minor children.
/(9)/ Anticipated to include 1,000 Shares owned by Mr. Swindle's wife, who
will share voting and investment power with respect to those Shares,
and 270 Shares held by Mr. Swindle as custodian for his minor
children.
/(10)/ Anticipated to include 100 Shares owned by Mr. Warren's wife and 300
Shares held by Mr. Warren as custodian for his minor children.
Includes 15,000 shares that will be subject to options to be granted
to Mr. Warren under the terms of his employment agreement. Those
options will be immediately exercisable at an exercise price of $10.00
per share and expire ten years from the date of grant. See
"Management -- Remuneration."
OPTIONS
The following table indicates the options granted or to be granted to
persons listed above. Each of the options will have a ten-year term from the
date of grant and is immediately exercisable.
<TABLE>
<CAPTION>
Shares of Common Stock Exercise
Name Subject to Options Price Per Share Date of Exercise
<S> <C> <C> <C>
Timothy I. Warren 15,000 $10.00 N/A
Elaine B. Lovvorn 3,500 $10.00 N/A
</TABLE>
DESCRIPTION OF CAPITAL STOCK
COMMON STOCK
The Company is authorized by its Articles of Incorporation to issue
10,000,000 Shares of Common Stock, $.01 par value. One share of Common Stock is
currently outstanding and held by an Organizer. See "Capitalization."
Shareholders are entitled to one vote per Share on all matters to be
voted on by shareholders and are not entitled to cumulate their votes in the
election of directors, which means that the holders of a majority of the Shares
voting for the election of directors can elect all of the directors then
standing for election should they choose to do so. Shareholders are entitled to
receive such dividends, if any, as may be declared from time to time by the
Board of Directors, subject to prior regulatory approval, from funds legally
available therefor. Shareholders are entitled to share pro rata in any
distribution to the holders of Common Stock in the event of any liquidation,
dissolution or winding-up of the Company.
-29-
<PAGE>
Shareholders have no preemptive or other subscription or conversion
rights and there are no redemption or sinking fund provisions with respect to
such Shares. The Shares offered by this Prospectus, upon payment therefor, will
be fully paid and non assessable.
PREFERRED STOCK
The Company is authorized by its Articles of Incorporation to issue up
to 1,000,000 shares of preferred stock, $.01 par value per share. No shares of
preferred stock have been issued. The Company's Board of Directors may, without
further action by the shareholders, from time to time, direct the issuance of
preferred stock, in one or more series, for any proper corporate purpose with
preferences, voting powers, conversion rights, qualifications, special or
relative rights, and privileges which could adversely affect the voting power or
other rights of holders of Shares of Common Stock. Preferred stock could be
issued in one or more series with such voting, conversion or other rights as
could discourage possible acquirors of the Company from making a tender offer or
other attempt to gain control of the Company, even if such transaction was
generally favorable to the Company's shareholders. Satisfaction of any dividend
preferences on outstanding preferred stock would reduce the amount of funds
available for the payment of dividends on the Company's Common Stock. In
addition, the holders of preferred stock would normally be entitled to receive a
preference payment in the event of any liquidation, dissolution or winding-up of
the Company before any payment is made to the holders of the Common Stock. The
Board of Directors has no present plans or understandings for the issuance of
any preferred stock and does not intend to issue any preferred stock except on
terms which the Board deems to be in the best interest of the Company and its
shareholders.
TRANSFER AGENT AND REGISTRAR
The Bank will act as transfer agent and registrar for the Shares of
the Company.
REPORT TO SHAREHOLDERS
The Company intends to furnish its shareholders with annual reports
containing audited financial statements and quarterly reports containing
unaudited financial information.
SECURITIES ELIGIBLE FOR FUTURE SALE
Upon completion of this offering, the Company will have a minimum of
625,000 Shares and the maximum amount of 800,000 Shares outstanding. All of
these Shares will be freely tradeable without restriction or registration under
the Securities Act of 1933, as amended (the "1933 Act"), except for Shares
purchased by persons who, as a result of positions with the Company (such as the
directors and officers) or stock ownership (such as Organizers), are
"affiliates" of the Company (as that term is defined under Rule 144 promulgated
under the 1933 Act). The Shares owned by such "affiliates" of the Company will
be subject to resale restrictions under the 1933 Act. All of the Shares issuable
upon exercise of options granted under the Company's stock option plan will be
"restricted securities" (i.e., securities which have not been registered under
the 1933 Act). Securities held by "affiliates" and "restricted securities" may
be eligible for sale in the open market in accordance with the provisions of
Rule 144 promulgated under the 1933 Act.
In general, under Rule 144, a person (including an affiliate of the
Company) who has beneficially owned restricted securities for at least two years
would be entitled to sell within any three month period in "broker's
transactions" (i.e., transac tions executed by a broker or dealer on an exchange
or in over-the-counter market), the number of securities that does not exceed
the greater of 1% of the securities then outstanding or the average weekly
trading volume of the securities in the market during the four calendar weeks
preceding such sale. Non-affiliates who have held their restricted securities
for at least three years would be entitled to sell such securities under Rule
144 without regard to the volume limitation.
-30-
<PAGE>
PROVISIONS PERTAINING TO CHANGE IN CONTROL
The Company's Articles of Incorporation and Bylaws contain certain
provisions that might be deemed to have a potential defensive "anti-takeover"
effect. The Board of Directors of the Company believes that the provisions
described below are prudent and will reduce the Company's vulnerability to
takeover attempts and certain other transactions which may not be negotiated
with and approved by the Board. The Board of Directors believes that it is in
the best interest of the Company and its shareholders to encourage potential
acquirors to negotiate directly with the Board and that these provisions will
encourage such negotiations and discourage hostile takeover attempts. It is also
the view of the Board of Directors that these "anti-takeover" provisions should
not discourage persons from proposing an acquisition or other transaction at
prices reflective of the true value of the Company which is in the best interest
of all shareholders. Notwithstanding these provisions, the Board of Directors
has a fiduciary obligation to act in the best interest of the shareholders and
the Company in determining corporate action.
DIRECTORSHIPS
The Company's Board of Directors is divided into three classes which
must be as close to equal in size as possible. The members of each class serve
three-year terms with the election of each class in successive years. The
Company's Bylaws provide that the size of the Board of Directors, within the six
to twenty member range specified in the Articles of Incorporation, may be
increased or decreased only by a majority vote of the directors then in office.
The Articles of Incorporation provide that any vacancies occurring on the Board
of Directors, including a vacancy created by an increase in the number of
directors, shall be filled for the remainder of the unexpired term only by a
majority vote of the directors then in office.
REMOVAL OF DIRECTORS
The Company's Articles of Incorporation provide that no director may
be removed except for cause and then only by the vote of holders of at least 75%
of the outstanding voting stock of the Company entitled to vote. However, if
two-thirds of the directors then in office approve the removal, then the vote of
the holders of a majority of the outstanding voting stock of the Company is
required to remove a director.
SPECIAL MEETINGS OF SHAREHOLDERS
The Company's Articles of Incorporation provide that a special meeting
of shareholders may be called by the Chairman of the Board, by a majority vote
of the directors then in office or by the holders of at least 75% of the
outstanding voting stock of the Company.
NO ACTION BY WRITTEN CONSENT
The Company's Articles of Incorporation provide that shareholders
shall not be entitled to take any action by written consent in lieu of taking
such action at an annual or special meeting of shareholders.
APPROVAL OF CERTAIN BUSINESS TRANSACTIONS
The Company's Articles of Incorporation provide that the vote of
holders of at least 80% of the outstanding voting stock of the Company is
required to approve certain mergers, consolidations or dispositions of assets of
the Company or any of its subsidiaries. However, if the proposed transaction is
approved by the vote of at least two-thirds of the directors then in office,
then the vote of holders of a majority of the outstanding voting stock of the
Company is required to approve such transaction.
AMENDMENT OF THE ARTICLES OF INCORPORATION
The Company's Articles of Incorporation authorize the alteration,
amendment or repeal of certain Articles by the affirmative vote of holders of at
least 80% of the outstanding voting stock of the Company. However, if the
proposed action is approved by a vote of at least two-thirds of the directors
then in office, then the vote of holders of a majority of the
-31-
<PAGE>
outstanding voting stock of the Company is required to approve such action.
Other provisions require approval by a majority of the outstanding voting stock
of the Company.
AMENDMENT OF BYLAWS
The Company's Articles of Incorporation provide that the Bylaws may be
altered, amended or repealed, or new Bylaws adopted, by the Board of Directors
or the shareholders at a duly constituted meeting. Such action by the Board of
Directors requires the vote of two-thirds of directors then in office. Such
action by the shareholders requires the affirmative vote of holders of at least
80% of the outstanding voting stock of the Company.
LEGAL MATTERS
The legality of the Shares is being passed upon for the Company by
Holland & Knight, Suite 2000, One Atlantic Center, 1201 West Peachtree Street,
Atlanta, Georgia 30309-3400.
EXPERTS
The financial statements of the Company as of August 31, 1996 included
in this Prospectus have been examined by Snyder, Camp, Stewart & Co., LLP,
independent public accountants, as stated in their opinion, appearing elsewhere
herein, and have been so included in reliance upon such opinion given upon the
authority of such firm as expert in accounting and auditing.
ADDITIONAL INFORMATION
The Company has filed a Registration Statement under the Securities
Act of 1933, as amended, with respect to the securities offered hereby with the
Securities and Exchange Commission (the "Commission"). As permitted by the Rules
and Regulations of the Commission, this Prospectus does not contain all of the
information set forth in the Registration Statement and the exhibits filed
therewith and reference is made to the Registration Statement and the exhibits
filed therewith for further information concerning the Company and the
securities offered hereby. Each statement contained in this Prospectus as to the
contents of a document filed as an exhibit to the Registration Statement is
qualified by reference to the exhibit for a complete statement of its terms and
conditions. Copies of such material, as well as periodic reports and information
filed by the Company, can be obtained upon payment of the fees prescribed by the
Commission, or may be examined at the offices of the Commission without charge,
at (i) the public reference facilities in Washington, D.C. at Judiciary Plaza,
Room 1024, 450 Fifth Street, N.W., Washington, D.C. 20549, (ii) the Northeast
Regional Office in New York at 7 World Trade Center, Suite 1300, New York, New
York 10048, and (iii) the Midwest Regional Office in Chicago, Illinois at 500
West Madison Street, Suite 1400, Chicago, Illinois 66661-2511. The Commission
maintains a Web site that contains reports, proxy and information statements and
other information regarding registrants that file electronically with the
Commission (the address of such site is http://www.sec.gov).
The Company will provide without charge to each person to whom a copy
of this Prospectus is delivered, upon the written or oral request of such
person, a copy of any or all of the documents which are incorporated by
reference herein, other than exhibits to such documents (unless such exhibits
are specifically incorporated by reference into such documents). Requests should
be directed to Timothy I. Warren, President, at the Company's principal
executive offices.
-32-
<PAGE>
PEOPLES BANCORP, INC.
(A Development Stage Corporation)
Index to Financial Statements
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
Independent Auditors' Report F-2
Financial Statements:
Balance Sheet as of August 31, 1996 F-3
Statement of Operations for the period from March 1, 1996
(inception) to August 31, 1996 F-4
Statement of Stockholder's Equity for the period from
March 1, 1996 (inception) to August 31, 1996 F-5
Statement of Cash Flows for the period from March 1, 1996
(inception) to August 31, 1996 F-6
Notes to Financial Statements F-7
</TABLE>
F-1
<PAGE>
INDEPENDENT AUDITORS' REPORT
To the Board of Directors
Peoples Bancorp, Inc.
We have audited the accompanying balance sheet of Peoples Bancorp, Inc. (A
development stage corporation) as of August 31, 1996, and the related statements
of operations, stockholder's equity and cash flows for the period from March 1,
1996 (inception) to August 31, 1996. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Peoples Bancorp, Inc. as of
August 31, 1996 and the results of its operations and its cash flows from March
1, 1996 (inception) to August 31, 1996 in conformity with generally accepted
accounting principles.
/s/ SNYDER, CAMP, STEWART & CO., LLP
Norcross, Georgia
September 9, 1996
F-2
<PAGE>
PEOPLES BANCORP, INC.
(A Development Stage Corporation)
Balance Sheet
August 31, 1996
<TABLE>
<CAPTION>
Assets
------
<S> <C>
Cash $ 2,506.34
Prepaid expenses 13,514.50
Deferred organization costs 59,278.45
----------
$75,299.29
==========
Liabilities and Stockholder's Equity
------------------------------------
Liabilities:
Advances from organizers $ 98,100.00
Accrued expense 593.50
-----------
Total liabilities 98,693.50
-----------
Stockholder's equity:
Preferred stock, $.01 par value; 1,000,000 shares
authorized; no shares issued or outstanding 0.00
Capital stock, $.01 par value; 10,000,000 shares
authorized; 1 share issued and outstanding 0.01
Additional paid-in capital 9.99
Accumulated deficit (23,404.21)
-----------
Total stockholder's equity (23,394.21)
------------
$ 75,299.29
============
</TABLE>
See accompanying auditors' report and notes to financial statements.
F-3
<PAGE>
PEOPLES BANCORP, INC.
(A Development Stage Corporation)
Statement of Operations
For the Period from March 1, 1996 (inception) to August 31, 1996
<TABLE>
<CAPTION>
Expenses:
<S> <C>
Occupancy expenses $ 17,225.27
Personnel expenses 5,087.22
Interest 1,091.72
----------
Net loss $ (23,404.21)
===========
</TABLE>
See accompanying auditors' report and notes to financial statements.
PEOPLES BANCORP, INC.
(A Development Stage Corporation)
F-4
<PAGE>
Statement of Stockholder's Equity
For the Period from March 1, 1996 (inception) to August 31, 1996
<TABLE>
<CAPTION>
Deficit
Accumulated
Additional During the
Preferred Common Paid-in Development
Stock Stock Capital Stage Total
----- ----- ------- ----- -----
<S> <C> <C> <C> <C> <C>
Proceeds from the sale of
organization shares $ - .01 9.99 - 10.00
Net loss - - - (23,404.21) (23,404.21)
---------- ------- ----------- ---------- ----------
Balance, August 31, 1996 $ - .01 9.99 (23,404.21) (23,394.21)
========== ======= =========== ========== ==========
</TABLE>
See accompanying auditors' report and notes to financial statements.
F-5
<PAGE>
PEOPLES BANCORP, INC.
(A Development Stage Corporation)
Statement of Cash Flows
For the Period from March 1, 1996 (inception) to August 31, 1996
<TABLE>
<CAPTION>
<S> <C>
Cash flows from operating activities:
Net loss $ (23,404.21)
Adjustments to reconcile net loss to net cash used
in operating activities:
Increase in prepaid expenses (13,514.50)
Increase in deferred expenses (59,278.45)
Increase in accrued expenses 593.50
-----------
Net cash used for operating activities (95,603.66)
-----------
Cash flows from financing activities:
Proceeds from the sale of organization shares 10.00
Increase in advances from organizers 98,100.00
-----------
Net cash provided by financing activities 98,110.00
-----------
Net increase in cash and cash equivalents $ 2,506.34
===========
Cash and cash equivalents at beginning of period -
-------------------
Cash and cash equivalents at end of period $ 2,506.34
===========
Supplemental cash flow information
- ----------------------------------
Interest paid $ 498.22
===========
</TABLE>
See accompanying auditors' report and notes to financial statements.
F-6
<PAGE>
PEOPLES BANCORP, INC.
(A Development Stage Corporation)
Notes to Financial Statements
August 31, 1996
(1) Organization and Summary of Significant Accounting Policies
-----------------------------------------------------------
Peoples Bancorp, Inc. (the "Company") was incorporated on August 27, 1996,
for the purpose of becoming a bank holding company for its proposed wholly-
owned subsidiary, Peoples Bank of West Georgia (the "Bank"), which will
operate in the Carroll County area. The organizers of the Bank filed a
joint application to charter the Bank with the Department of Banking and
Finance and the Federal Deposit Insurance Corporation. The Company is also
making an application to become a bank holding company with the Federal
Reserve Bank of Atlanta.
Neither the Company nor the Bank has commenced their respective operations
as a bank holding company or as a commercial bank and neither will do so
unless regulatory approvals are obtained and the required capitalization of
the Bank by the Company is obtained from proceeds of the sale of the
Company's common stock.
Prior to the Company's incorporation on August 27, 1996, organizational and
pre-opening activities were conducted by the organizers. Expenditures on
behalf of the Company by the organizers are considered expenditures of the
Company. Costs of organizing the Company have been capitalized and will be
amortized over five years using the straight-line method upon commencement
of operations. Costs of the intended common stock offering have been
deferred and will be offset against the proceeds of the offering upon
successful completion. These costs will be charged to expense if the
minimum offering is not purchased. Additional costs are expected to be
incurred for both organization costs and stock offering costs.
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those
estimates.
Financial instruments that potentially subject the Company to credit risk
include cash on deposit with banks. The fair values of cash and interest
bearing borrowings, approximate their carrying amounts.
The Company will be subject to federal and state income taxes when taxable
income is generated. No income taxes have been recognized because no
taxable income has been generated.
The Company plans to adopt a calendar year for both financial reporting and
tax reporting purposes.
F-7
<PAGE>
PEOPLES BANCORP, INC.
(A Development Stage Corporation)
Notes to Financial Statements, Continued
August 31, 1996
(2) Advances from Organizers
------------------------
Prior to incorporation, the organizers secured a line of credit with a
maximum limit of $350,100. Organizational costs, pre-opening expenses, and
offering expenses incurred prior to commencing operations, will be funded
through the use of this line. The line has a maturity date of April 18,
1997 and carries an initial interest rate of 8.25%, which varies with the
prime rate. The outstanding balance of $77,100 on August 31, 1996 is
included in advances from organizers. Upon successful completion of the
sale of common stock, the organizers will be reimbursed from the proceeds
from the offering. If the offering is not successful, the advances will not
be repaid.
(3) Common Stock Offering
---------------------
The Company intends to file a Registration Statement on Form SB-1 with the
Securities and Exchange Commission offering for sale a minimum of 625,000
and a maximum of 800,000 shares of the Company's $.01 par value common
stock at $10 per share.
(4) Stock Option Plan
-----------------
The Company plans to adopt an Employee Stock Option Plan for the granting
of options to purchase up to an aggregate of 75,000 shares of common stock.
The Company currently expects to grant options totaling 23,000 shares to
certain Bank officers soon after establishing the plan, all with an
exercise price per share equal to the initial offering price of $10.00.
(5) Stockholder's Equity
--------------------
The Company's Articles of Incorporation authorize it to issue up to
10,000,000 shares of Common Stock, par value $.01 per share. The Company's
Articles of Incorporation also authorize the issuance of 1,000,000 shares
of Preferred Stock, par value $.01 per share, which may be issued in one or
more series with such preferences, limitations and rights as shall be
determined by the Board of Directors of the Company. No Preferred Stock has
been issued, and there are no plans at this time to issue Preferred Stock
in the future.
(6) Commitments
-----------
The organizers of the Company have entered into an agreement with an
organizer of the Company for the purchase of an office facility to be used
as the site of the Company's and the Bank's operating office. The contract
purchase price is $300,000 and is contingent upon approval by regulatory
authorities and successful completion of the sale of the Company's stock.
The organizers of the Bank have entered into an employment agreement with
one of the organizing directors to serve as President and Chief Executive
Officer of the Company and the Bank providing for an annual base salary,
the right to receive a bonus (based upon performance standards), the right
to receive stock options, and other customary executive benefits.
Prior to incorporation, the organizers entered into an operating lease for
use by the Company's proposed subsidiary. The lease requires monthly rental
payments of $2,500 and will expire in February 1997 provided that notice
has been given by September 30, 1996, but otherwise extends to March 1998.
Rental payments, amounting to $15,000, have been recognized as expense
through August 31, 1996.
F-8
<PAGE>
PEOPLES BANCORP, INC.
a bank holding company for
Peoples Bank of West Georgia (In Organization)
516 Bankhead Highway
Carrollton, Georgia 30117
(770) 838-9608
Subscription For Shares of Common Stock
Ladies and Gentlemen:
Peoples Bancorp, Inc. (the "Company") is offering to sell Shares of Common
Stock (the "Shares") at a price of $10 per Share. A minimum subscription of 100
Shares ($1,000) has been established by the Company. The undersigned hereby
tenders this subscription for the purchase of the number of Shares set forth
below. The undersigned has also enclosed a check (bank draft or money order)
which represents the full subscription price, payable to the "Peoples Bancorp,
Inc. Escrow Account." All subscription payments will be promptly deposited by
the Company in an escrow account at The Bankers Bank, Atlanta, Georgia, as
Escrow Agent.
The undersigned acknowledges and agrees that:
1. The undersigned has received a copy of the Company's Prospectus. By
executing this subscription, the undersigned acknowledges and agrees to all the
terms and conditions of the offering as described in the Prospectus and all the
terms and conditions of this subscription. The subscriber by executing this
subscription is not waiving any rights available under applicable federal or
state securities laws.
2. A subscription is not binding until accepted by the Company. The Company
reserves the right to accept or reject a subscription, in whole or in part, in
its sole discretion. In determining which subscriptions to accept, in whole or
in part, the Company may take into account the order in which the subscriptions
are received and the subscriber's potential to do business with, or to refer
customers to, the Bank. The Company shall notify the subscriber by mail of its
acceptance or rejection of the subscription, in whole or in part, subject to the
terms and conditions of the offering.
The Shares purchased by the undersigned shall be registered as specified below.
If Shares are to be issued in more than one name, please specify whether
ownership is to be as individual owner, tenants in common, joint tenants with
right of survivorship, community property, etc. If Shares are to be held in
joint ownership, all joint owners should sign this subscription. If Shares are
to be issued in the name of one person for the benefit of another, please
indicate whether registration should be as trustee or custodian for such other
person.
IN WITNESS WHEREOF, the undersigned has executed this subscription on the date
set forth below and has returned the subscription, with the full subscription
price for the Shares, to the Company.
Date:________________, 199_____________ _________________________________
Signature of Subscriber
Number of Shares Subscribed for:_______ _________________________________
(at $10 per Share) Signature of Subscriber
Total Subscription Price: $___________ _________________________________
Print Name(s) in which
Home Address of Subscriber: Shares are to be Registered
_______________________________________ _________________________________
Street Address Social Security/Taxpayer
Identification Number
_______________________________________ _________________________________
City, State and Zip Code Telephone Number and Area Code
A-1
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
<S> <C>
Prospectus Summary.................................................. 3
Risk Factors........................................................ 6
The Offering........................................................ 8
Use of Proceeds..................................................... 11
Dividend Policy..................................................... 12
Capitalization...................................................... 13
Business............................................................ 14
Supervision and Regulation.......................................... 18
Management.......................................................... 22
Certain Transactions................................................ 26
Principal Shareholders.............................................. 27
Description of Capital Stock........................................ 29
Legal Matters....................................................... 32
Experts............................................................. 32
Additional Information.............................................. 32
Financial Statements............................................... F-1
Subscription Agreement............................................. A-1
</TABLE>
UNTIL ________________, 1996 (90 DAYS AFTER THE DATE OF THIS PROSPECTUS), ALL
DEALERS EFFECTING TRANSACTIONS IN THE REGISTERED SECURITIES, WHETHER OR NOT
PARTICIPATING IN THIS DISTRIBUTION, MAY BE REQUIRED TO DELIVER A PROSPECTUS.
THIS IS IN ADDITION TO THE OBLIGATION OF DEALERS TO DELIVER A PROSPECTUS WHEN
ACTING AS UNDERWRITERS AND WITH RESPECT TO THEIR UNSOLD ALLOTMENTS OR
SUBSCRIPTIONS.
______________________
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS IN CONNECTION WITH THE OFFER CONTAINED IN THIS PROSPECTUS UNLESS
PRECEDED OR ACCOMPANIED BY THIS PROSPECTUS, NOR HAS ANY PERSON BEEN AUTHORIZED
TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE
CONTAINED IN THIS PROSPECTUS IN CONNECTION WITH THE OFFER CONTAINED IN THIS
PROSPECTUS, AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT
BE RELIED UPON. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER OR SOLICITATION IN
ANY JURISDICTION TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR
SOLICITATION IN SUCH JURISDICTION. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR
ANY SALE MADE HEREUNDER SHALL UNDER ANY CIRCUMSTANCES CREATE AN IMPLICATION THAT
THERE HAS BEEN NO CHANGE IN THE FACTS HEREIN SET FORTH SINCE THE DATE HEREOF.
HOWEVER, IF ANY MATERIAL CHANGE OCCURS WHILE THIS PROSPECTUS IS REQUIRED BY LAW
TO BE DELIVERED, THIS PROSPECTUS WILL BE AMENDED OR SUPPLEMENTED ACCORDINGLY.
______________________
PEOPLES BANCORP, INC.
800,000 SHARES
OF COMMON STOCK
AT $10 PER SHARE
______________________
PROSPECTUS
______________________
NOVEMBER ___, 1996
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 1. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 14-2-202(b)(4) of the Georgia Business Corporation Code provides
that a corporation's articles of incorporation may contain a provision
eliminating or limiting the personal liability of a director to the corporation
or its shareholders for monetary damages for breach of duty of care or other
duty as a director. This Section also provides, however, that such a provision
shall not eliminate or limit the liability of a director (i) for any
appropriation, in violation of his duties, of any business opportunity of the
corporation, (ii) for acts or omissions involving intentional misconduct or a
knowing violation of law, (iii) for certain other types of liability set forth
in the Code, and (iv) for transactions from which the director derived an
improper personal benefit. Article 6 of the Registrant's Articles of
Incorporation contains a provision eliminating or limiting the personal
liability of a director of the Registrant to the fullest extent authorized by
the Georgia Business Corporation Code.
In addition, Sections 14-2-851 and 14-2-857 of the Georgia Business
Corporation Code, provides for indemnification of directors and officers of the
Registrant for liability and expenses reasonably incurred by them in connection
with any civil, criminal, administrative or investigative action, suit or
proceeding in which they may become involved by reason of being a director or
officer of the Registrant. Indemnification is permitted if the director or
officer acted in a manner which he believed in good faith to be in or not
opposed to the best interests of the Registrant and, with respect to, in
criminal actions, if he had no reasonable cause to believe his conduct to be
unlawful; provided that the Registrant may not indemnify any director (i) in
connection with a proceeding by or in the right of the corporation in which the
director was adjudged liable to the corporation; or (ii) in connection with any
other proceeding in which he was adjudged liable on the basis that personal
profit was improperly received by him. Article 8 of the Registrant's Articles of
Incorporation contains a provision providing for the indemnification of officers
and directors and advancement of expenses to the fullest extent authorized by
the Georgia Business Corporation Code.
The Registrant may seek to purchase and maintain directors and officers
liability insurance which insures against liabilities that directors and
officers of the Registrant may incur in such capacities.
ITEM 2. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
<TABLE>
<S> <C>
Legal fees $20,000
Blue sky fees 1,250
Printing 2,500
SEC filing fee 2,759
EDGAR filing expenses 3,000
Accounting 5,000
Miscellaneous 3,491
-------
$38,000
=======
</TABLE>
ITEM 3. UNDERTAKINGS.
(a) The undersigned Registrant hereby undertakes as follows:
(1) The Registrant will file, during any period in which it offers or
sells securities, a post-effective amendment to this Registration
Statement to:
(i) include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933, as amended (the "Securities Act");
II-1
<PAGE>
(ii) reflect in the prospectus any facts or events which,
individually or together, represent a fundamental change in
the information in the Registration Statement; and
(iii) include any additional or changed material information in
the plan of distribution.
(2) The Registrant will, for determining liability under the
Securities Act, treat each post-effective amendment as a new
registration statement of the securities offered, and the
offering of the securities at that time to be the initial bona
fide offering.
(3) The Registrant will file a post-effective amendment to remove
from registration any of the securities that remain unsold at the
end of the offering.
(4) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and
controlling persons of the Registrant pursuant to the foregoing
provisions, or otherwise, the Registrant has been advised that in
the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the
Securities Act and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other
than the payment by the Registrant of expenses incurred or paid
by a director, officer or controlling person of the Registrant in
the successful defense of any action, suit or proceeding) is
asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant
will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in
the Securities Act and will be governed by the final adjudication
of such issue.
ITEM 4. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
The documents as set forth on the Exhibit Index on page II-5 are
incorporated herein by reference, and such documents are filed as exhibits to
this Registration Statement.
II-2
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Amendment No. 1 to Registration Statement to be signed on
its behalf by the undersigned, thereunto duly authorized, in the City of
Carrollton, State of Georgia, on November 7, 1996.
PEOPLES BANCORP, INC.
By: /s/ Timothy I. Warren
--------------------------------
Timothy I. Warren, President
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the date indicated:
<TABLE>
<CAPTION>
Signature Title Date
- --------- ----- ----
<S> <C> <C>
/s/ Timothy I. Warren President and Chief November 7, 1996
------------------------------
Timothy I. Warren Executive, Financial and
Accounting Officer/Director
*
______________________________ Director November 7, 1996
Steve R. Adams
*
______________________________ Director November 7, 1996
John B. Bohannon
*
______________________________ Director November 7, 1996
Ann C. Carter
*
______________________________ Director __________, 1996
Mark S. Swindle
*
______________________________ Director November 7, 1996
Lester H. Harmon
*
______________________________ Director November 7, 1996
William P. Johnson
</TABLE>
II-3
<PAGE>
<TABLE>
<S> <C> <C>
*
______________________________ Director November 7, 1996
Philip Kauffman
*
______________________________ Director November 7, 1996
Jeff R. Matthews
*
______________________________ Director November 7, 1996
Charles J. Puckett
*
______________________________ Director November 7, 1996
William C. Seaton
</TABLE>
* /s/ Timothy I. Warren
--------------------------------------
Timothy I. Warren, as Attorney-in-Fact
II-4
<PAGE>
EXHIBIT INDEX
-------------
<TABLE>
<CAPTION>
Sequential
Exhibit No.
- -----------
<C> <S>
2.1 Articles of Incorporation of the Registrant dated August 27, 1996
(filed as Exhibit 2.1 to Registrant's Registration Statement on
Form SB-1 (Registration No. 333-12293) filed September 19, 1996
(the "Registration Statement") which exhibit is incorporated
herein by reference)
2.2 Bylaws of the Registrant (filed as Exhibit 2.2 to the
Registration Statement and incorporated herein by reference)
4 Form of Subscription Agreement (included as Appendix A to
Prospectus)
6.1 Employment Agreement between the Registrant and Timothy I. Warren
6.2 Line of Credit Agreement from Peoples Bank of Fannin County to
the Organizers (filed as Exhibit 6.2 to the Registration
Statement and incorporated herein by reference)
6.3 Lease Agreement with respect to Temporary Headquarters and
Assignment and Assumption with respect thereto (filed as Exhibit
6.3 to the Registration Statement and incorporated herein by
reference)
6.4 Purchase and Sale Agreement with Respect to Main Office Site
(filed as Exhibit 6.4 to 6.5 the Registration Statement and
incorporated herein by reference)
6.5 Employee Incentive Stock Option Plan (filed as Exhibit 6.5 to the
Registration Statement and incorporated herein by reference)
9 Escrow Agreement between The Bankers Bank and the Registrant
10(a)(i) Consent of Snyder, Camp, Stewart & Co., LLP
10(a)(ii) Consent of Holland & Knight (included in Exhibit 11)
11 Opinion of Holland & Knight regarding the legality of the
securities to be offered (filed as Exhibit 11 to the Registration
Statement and incorporated herein by reference)
</TABLE>
II-5
<PAGE>
EXHIBIT 6.1
EMPLOYMENT AGREEMENT OF TIMOTHY I. WARREN
BANK
EMPLOYMENT AGREEMENT
--------------------
This agreement made and entered into this 30th day of August 1996, between
the Peoples Bank of West Georgia, Carrollton, Georgia ("the Bank") and Timothy
I. Warren, ("employee");
WHEREAS, the Bank is a state bank, regulated by the Georgia Department of
Banking and Finance, insured by the Federal Deposit Insurance Corporation, and
located in Carrollton, Georgia; and
WHEREAS, the Bank wants to employ the employee as President and Chief
Executive Officer of the Bank; and
WHEREAS, the parties desire to enter into this agreement setting forth the
terms and conditions of the employment relationship of the Bank and the
employee;
NOW, THEREFORE, it is AGREED as follows:
I. RELATIONSHIP ESTABLISHED AND DUTIES
---------------------------------------
1. The Bank and the Bank Holding Company (when formed) hereby will employ
the employee as President and Chief Executive Officer, to hold the
title of President and Chief Executive Officer, and to perform such
services and duties as the Board of Directors may, from time to time,
designate during the term hereof. Subject to the terms and conditions
hereof, employee will perform such duties and exercise such authority
as are customarily performed and exercised by persons holding such
office, subject to the general direction of the Board of Directors of
the Bank, exercised in good faith in accordance with standards of
reasonable business judgment.
2. Employee shall serve on the Board of Directors of the Bank and the
Bank Holding Company (when formed), but shall not be entitled to
--- ---
Directors' Fees just like any other director, and shall serve as a
non-voting member of its Executive Committee, subject to the terms
hereof.
3. Employee accepts such employment and shall devote his full time,
attention, and efforts to the diligent performance of his duties
herein specified and as an officer and director of the Bank and will
not accept employment with any other individual, corporation,
partnership, governmental authority, or any other entity, or engage in
any other venture for profit which the Bank may consider to be in
conflict with his or its best interest or to be in competition with
the Bank's business, or which may interfere in any way with the
employee's performance of his duties hereunder. Any exception to this
must be made by notification and approval of the Board.
<PAGE>
II. TERMS OF EMPLOYMENT
------------------------
1. The initial term of employment under this Agreement shall continue for
5 (five) years unless such is terminated pursuant to the terms hereof
or by the first to occur of the conditions to be stated hereinafter.
This Agreement will be automatically extended each year after the
initial term unless either party gives 90 days contrary written notice
to the other. The term previously stated notwithstanding this
contract shall be terminated by the earlier to occur of any of the
following:
a. the death of the employee;
b. the complete disability of employee. "Complete disability" as
used herein shall mean the inability of employee, due to illness,
accident, or other physical or mental incapacity to perform the
services provided for hereunder for an aggregate of sixty days
within any period of 120 consecutive days during the term hereof;
provided, however, disability shall not constitute a basis for
discharge for cause;
c. the discharge of employee by the Bank for cause. "Cause" as used
herein shall mean:
1) such negligence or misconduct as shall constitute, as a
matter of law, a breach of the covenants and obligations of
employee hereunder;
2) failure or refusal of employee to comply with the provisions
of this agreement;
3) employee being convicted by any duly constituted court with
competent jurisdiction of a crime involving moral turpitude;
4) at the discretion of the Board, this contract may be
terminated if there are acts the Board feels are moral
turpitude;
5) termination of the contract at the discretion of the Board
for failure to perform at acceptable levels of deposit
growth and other performance standards as determined by the
Board.
Termination of employee's employment shall constitute a tender by employee
of his resignation as an officer and director of the Bank and the Bank Holding
Company. In the event of termination the employee is entitled to severance pay
equal to one month's pay for each year employed by the Bank.
-2-
<PAGE>
III. COMPENSATION
------------------
For all services which employee may render to the Bank during the term
hereof, the Bank shall pay to employee, subject to such deductions as may be
required by law:
1. Base Salary. An annual salary of $135,000 payable in equal weekly
installments and subject to such deductions as may be required by law,
for the first 12 months. Thereafter, annual increase reviews will be
done during the month of December for a January 1 effective increase
date during the term of this Agreement so that for the 12 months
beginning on each such anniversary date, the employee's salary
increases will take effect. The Board has sole discretion as to the
amount of the CEO's compensation.
2. Performance Bonuses. Each year, a performance bonus, ranging from 0%
to 50% of annual base salary will be awarded provided the Bank and
---------------------
Holding Company receive a CAMEL 1 or CAMEL 2 at the most recent
---------------------------------------------------------------
examination by the regulators, and based upon the Board's evaluation
----------------------------- -------------------------------------
of the bank's current condition based on a combination of safety and
--------------------------------------------------------------------
soundness criteria including capital adequacy, risk assessment, asset
---------------------------------------------------------------------
quality, liquidity, planning, policy adherence, personnel
---------------------------------------------------------
administration, internal controls, and management information systems
---------------------------------------------------------------------
and mutually agreed upon goals such as the Return on Average Assets
achieved before the application of taxes based upon the following
formula:
a. ROA equal to .90 but less than 1% Bonus = 5%
b. ROA greater than 1.0% but less than 1.10% Bonus = 10%
c. ROA equal to 1.10% but less than 1.20% Bonus = 15%
d. ROA equal to 1.20% but less than 1.30% Bonus = 20%
e. ROA equal to 1.30% but less than 1.40% Bonus = 25%
f. ROA equal to 1.40% but less than 1.60% Bonus = 30%
g. ROA equal to 1.60% but less than 1.75% Bonus = 35%
h. ROA equal to 1.75% but less than 2.00% Bonus = 40%
i. ROA over 2.00% Bonus = 50%
3. Stock Options. Based on his satisfactory performance the Employee, as
------------------------------------------------------
determined by the Board using mutually agreed upon safety and
-------------------------------------------------------------
soundness criteria as well as capital adequacy, asset quality,
--------------------------------------------------------------
profitability, and liquidity, shall have the right and option to
-----------------------------
-3-
<PAGE>
purchase an additional number of shares of common stock of the Bank
Holding Company in the following sequence:
a. 15,000 shares initially over the term of this Agreement not to
exceed 10 years,
b. beginning at the second year of Bank operation and thereafter in
an amount determined by multiplying (i) five thousand shares by
(ii) a fraction whose numerator is the Bonus Amount for the year
and whose denominator is the maximum Bonus Amount which could
have been received by the Employee for the year, for a maximum of
twenty-five thousand shares over the term of this Agreement.
The option granted to the Employee pursuant to this paragraph 3 may
be exercised by the Employee, in whole or in part, at any time or from
time to time during the period this Agreement is in effect beginning
on the first day of the second month following the close of the Bank's
fiscal year to which such grant is attributable. Notwithstanding
anything contained herein to the contrary, if the shareholders of the
Bank or the Bank Holding Company approve of a capital reorganization
of the common stock of the Bank Holding Company or a merger or
consolidation of the Bank Holding Company with or into another
corporation, or the sale of all or substantially all of the assets of
the Bank; or the Bank Holding Company, then Employee shall have the
right and option to purchase all stock options that would have been
paid to the Employee for the remaining term of this Agreement pursuant
to the terms of this paragraph, The purchase price for each share of
common stock of the Bank Holding Company that the Employee purchases
pursuant to the exercise of the options granted herein shall be the
book value at the time of purchase and shall be paid in cash upon
exercise.
IV. OTHER BENEFITS
-------------------
1. The employee shall be entitled to participate in any plan of the Bank
relating to stock options, stock purchases, profit sharing, group life
insurance, medical coverage, education, or other retirement or
employee benefits that the Bank may adopt for the benefit of its
employees.
2. The employee shall be eligible to participate in any other benefits
which may be or become applicable to the Bank's executive employees,
shall be furnished a car with all expenses of maintenance to cover all
automobile use, a reasonable expense account, the payment of
reasonable expenses for attending annual and periodic meetings of
trade associations, and any other benefits which are commensurate with
the responsibilities and functions to be performed by the employee
under this Agreement. Employer also agrees to pay all reasonable
expenses in connection with the attendance and participation at said
trade association meetings by employee's spouse.
-4-
<PAGE>
3. At such reasonable times as the Board of Directors shall in its
discretion permit, the employee shall be entitled, without loss of
pay, to absent himself voluntarily from the performance of his
employment under this Agreement, all such voluntary absences to count
as vacation time, provided that:
a. The employee shall be entitled to an annual vacation of 4 (four)
weeks per year. The employee shall schedule at least two
consecutive weeks of vacation each year.
b. The timing of vacations shall be scheduled in a reasonable manner
by the employee. The employee shall not be entitled to receive
any additional compensation from the Bank on account of his
failure to take a vacation; nor shall he be entitled to
accumulate unused vacation time from one calendar year to the
next.
c. In addition to the aforesaid paid vacations, the employee shall
be entitled, without loss of pay to absent himself voluntarily
from the performance of his employment with the Bank for such
additional periods of time and for such valid and legitimate
reasons as the Board of Directors in its discretion may
determine. Further, the Board of Directors shall be entitled to
grant to the employee a leave or leaves of absence with or
without pay at such time or times and upon such terms and
conditions as the Board, in its discretion, may determine.
V. CHANGE OF CONTROL
---------------------
1. If during the term of this Agreement there is a change of control
(COC) of the Bank, the Employee shall be entitled to termination or
severance pay in the event the employee's employment is terminated,
except for just cause as defined in Section II., paragraph 1, c, after
the change in control. In the event the employee is terminated after
365 days as a result of COC, the employee shall be entitled to receive
his salary through the last day of the calendar month of the
termination, or payment in lieu of the notice period. In addition,
the terminated employee shall receive an amount equal to 3 (three)
times his then existing annual base salary. This payment shall also
be made in connection with, or within 120 days after, a change in
control of the Bank if such change in control was opposed by the
employee or the Bank's Board of Directors. This payment shall be in
addition to any amount otherwise owed to the employee pursuant to this
Agreement.
2. The following items are automatically considered due and payable in
the event that change of control occurs:
a. Non-forfeitable deferred compensation shall be paid out in full.
-5-
<PAGE>
b. Long-term performance plan objective payments as described in
Section III, 2, f, shall be declared accomplished and earned
based upon performance up to date of the COC.
c. In the event that the employee is a participant in a restricted
stock plan, or share option plan, and such plan is terminated
involuntarily as a result of the COC, all stock and options shall
be declared 100% vested, and distributed. The term "control"
shall refer to the acquisition of 25 percent or more of the
voting securities of the Bank by any person, or persons acting as
a group within the meaning of Section 13(d) of the Securities
Exchange Act of 1934, or to such acquisition of a percentage
between 10 percent and 25 percent if the Board of Directors of
the Bank or the Comptroller of the Currency, the FDIC, or the
Federal Reserve Bank have made a determination that such
acquisition constitutes or will constitute control of the Bank.
The term "person" refers to an individual, corporation, Bank,
bank holding company, or other entity.
VI. POST TERMINATION COVENANTS
-------------------------------
1. If during the term hereof employee shall cease employment hereunder
for any reason, then employee agrees that for six months if dismissed
for cause and one year without cause following such termination he
will not be employed in the banking business or any related field
thereto in Carrollton, Georgia or Carroll County, Georgia.
Furthermore, following such termination employee agrees that he will
not, without the prior written consent of the Bank:
1) furnish anyone with the name of, or any list or lists of
customers of the Bank or utilize such list or information himself
for banking purposes; or
2) furnish, use, or divulge to anyone any information acquired by
him from the Bank relating to the Bank's methods of doing
business; or
3) contact directly or indirectly any customer of the Bank for
banking solicitation purposes; or
4) hire for any other Bank or employer (including himself) any
employee of the Bank or directly or indirectly cause such
employee to leave his or her employment to work for another.
2. It is understood and agreed by the parties hereto that the provisions
of this section are independent of each other, and the invalidity of
any such provision or portion thereof shall not affect the validity or
enforceability of any other provisions of this agreement.
-6-
<PAGE>
VII. WAIVER OF PROVISIONS
--------------------------
Failure of any of the parties to insist, in one or more instances, on
performance by the others in strict accordance with the terms and conditions of
this agreement shall not be deemed a waiver or relinquishment of any right
granted hereunder of the future performance of any such term or condition or of
any other term or condition of this agreement, unless such waiver is contained
in a writing signed by or on behalf of all the parties.
VIII. GOVERNING LAW
--------------------
This agreement shall be governed by and construed and enforced in
accordance with the laws of the State of Georgia. If for any reason any
provision of this agreement shall be held by a court of competent jurisdiction
to void or unenforceable, the same shall not affect the remaining provisions
thereof.
IX. MODIFICATION AND AMENDMENT
-------------------------------
This agreement contains the sole and entire agreement among the parties
hereto and supersedes all prior discussions and agreements among the parties,
and any such prior agreements shall, from and after the date hereof, be null and
void. This agreement shall not be modified or amended except by an instrument
in writing signed by or on behalf of the parties hereto.
X. COUNTERPARTS AND HEADINGS
-----------------------------
This agreement may be executed simultaneously in any number of
counterparts, each of which shall be deemed an original but all of which shall
constitute one and the same instrument. The headings set out herein are for
convenience of reference and shall not be deemed a part of this agreement.
XI. CONTRACT NONASSIGNABLE
---------------------------
This agreement may not be assigned or transferred by any party hereto, in
whole or in part, without the prior written consent of the other.
-7-
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the year and date first above written.
EMPLOYEE:
Witness
- --------------------- ---------------------- -------------------
EMPLOYEE Date
BANK
By: Witness
- --------------------- ---------------------- -------------------
Chairman of the Board Date
-8-
<PAGE>
EXHIBIT 6.9
ESCROW AGREEMENT
ESCROW AGREEMENT
THIS ESCROW AGREEMENT (this "Agreement") is entered into and effective as
of the day of , 1996, by and between Peoples Bancorp,
---------- -------------
Inc., a Georgia corporation (the "Company"), and The Bankers Bank (the "Escrow
Agent").
W I T N E S S E T H:
--------------------
WHEREAS, the Company proposes to offer and sell (the "Offering") up to
625,000 shares of Common Stock, no par value per share (the "Shares"), to
investors at $10.00 per Share pursuant to a registered public offering; and
WHEREAS, the Company desires to establish an escrow for funds forwarded by
subscribers for Shares, and the Escrow Agent is willing to serve as Escrow Agent
upon the terms and conditions herein set forth.
NOW, THEREFORE, in consideration of the premises and other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:
1. DEPOSIT WITH ESCROW AGENT.
-------------------------
(a) The Escrow Agent agrees that it will from time to time accept, in its
capacity as escrow agent, subscription funds for the Shares (the "Escrowed
Funds") received by it from subscribers or from the Company when it has received
checks from subscribers. All checks shall be made payable to the Escrow Agent.
If any check does not clear normal banking channels in due course, the Escrow
Agent will promptly notify the Company. Any check which does not clear normal
banking channels and is returned by the drawer's bank to Escrow Agent will be
promptly turned over to the Company along with all other subscription documents
relating to such check. Any check received that is made payable to a party
other than the Escrow Agent shall be returned to the Company for return to the
proper party. The company in its sole and absolute discretion may reject any
subscription for shares for any reason and upon such rejection it shall notify
and instruct the Escrow Agent in writing to return the Escrowed Funds by check
made payable to the subscriber. If the Company rejects or cancels any
subscription for any reason the Company will retain any interest earned on the
Escrowed Funds to help defray organizational costs.
(b) Subscription agreements forent the following information: (i) the name
and address of the subscriber; (ii) the number of Shares subscribed for by such
subscriber; (iii) the subscription price paid by such subscriber; (iv) the
subscriber's tax identification number certified by such subscriber; and (v) a
copy of the subscription agreement.
<PAGE>
2. INVESTMENT OF ESCROWED FUNDS. Upon collection of each check by the
----------------------------
Escrow Agent, the Escrow Agent shall invest the funds in deposit accounts or
certificates of deposit which are fully insured by the Federal Deposit Insurance
Corporation or another agency of the United States government, short-term
securities issued or fully guaranteed by the United States government, federal
funds, or such other investments as the Escrow Agent and the Company shall
agree. The Company shall provide the Escrow Agent with instructions from time to
time concerning in which of the specific investment instruments described above
the Escrowed Funds shall be invested, and the Escrow Agent shall adhere to such
instructions. Unless and until otherwise instructed by the Company, the Escrow
Agent shall by means of a "Sweep" or other automatic investment program invest
the Escrowed Funds in blocks of $10,000 in federal funds. Interest and other
earnings shall start accruing on such funds as soon as such funds would be
deemed to be available for access under applicable banking laws and pursuant to
the Escrow Agent's own banking policies.
3. DISTRIBUTION OF ESCROWED FUNDS. The Escrow Agent shall distribute the
------------------------------
Escrowed Funds in the amounts, at the times, and upon the conditions hereinafter
set forth in this Agreement.
(a) If at any time on or prior to the expiration date of the offering as
described in the prospectus relating to the offering (the "Closing Date"), (i)
the Escrow Agent has certified to the Company in writing that the Escrow Agent
has received at least $6,250,000 in Escrowed Funds, and (ii) the Escrow Agent
has received a certificate from the President or the Chairman of the Board of
the Company that all other conditions to the release of funds as described in
the Company's Registration Statement filed with the Securities and Exchange
Commission pertaining to the public offering have been met, then the Escrow
Agent shall deliver the Escrowed Funds to the company to the extent such
Escrowed Funds are collected funds. If any portion of the Escrowed Funds are
not collected funds, then the Escrow Agent shall notify the Company of such
facts and shall distribute such funds to the Company only after such funds
become collected funds. Foved by the Escrow Agent which have cleared normal
banking channels. In all events, the Escrow Agent shall deliver not less than
$6,250,000 in collected funds to the Company, except as provided in Paragraphs
3(b) and 3(c) hereof. The Escrow Agent agrees thereafter to continue to accept
subscription payments through termination of the offering as described in the
Company's Registration Statement and to deliver such collected funds at the
direction of the President or the Chairman of the Board of the Company.
(b) In lieu of collected funds, the organizers of the Company may pay for
subscriptions by assigning to the Company any portion of any obligation of the
Company to repay any advances made by such organizers to the Company to fund
organizational or other expenses and delivering such assignment to the Escrow
Agent to be held hereunder.
(c) If the Escrowed Funds do not, on or prior to the Closing Date, become
deliverable to the Company based on failure to meet the conditions described in
Paragraph 3(a), or if the Company terminates the offering at any time prior to
the Closing Date and delivers written notice to the Escrow Agent of such
termination (the "Termination Notice"), the Escrow Agent shall return the
Escrowed Funds which are collected funds as directed in writing by the Company
to the respective subscribers in amounts equal to the subscription amount
theretofore paid by each of them, without interest. All uncleared checks
<PAGE>
representing Escrowed Funds which are not collected funds as of the Initial
Closing Date shall be collected by the Escrow Agent, and together with all
related subscription documents thereof shall be delivered to the Company by the
Escrow Agent, unless the Escrow Agent is otherwise specifically directed in
writing by the Company.
4. DISTRIBUTION OF INTEREST. Any interest earned on the Escrowed Funds
------------------------
shall be retained by the Company.
5. FEE OF ESCROW AGENT. The Compnt will accrue a service charge of
-------------------
$15.00 per month. The service charges will be payable by the Company upon the
release of the Escrowed Funds. The $1,500 fee is payable upon execution of this
Agreement.
6. LIABILITY OF ESCROW AGENT.
-------------------------
(a) In performing any of its duties under the Agreement, or upon the
claimed failure to perform its duties hereunder, the Escrow Agent shall not be
liable to anyone for any damages, losses or expenses which it may incur as a
result of the Escrow Agent so acting, or failing to act; provided, however, the
Escrow Agent shall be liable for damages arising out of its willful default or
misconduct or its gross negligence under this Agreement. Accordingly, the
Escrow Agent shall not incur any such liability with respect to (i) any action
taken or omitted to be taken in good faith upon advice of its counsel or counsel
for the Company which is given with respect to any questions relating to the
duties and responsibilities of the Escrow Agent hereunder ; or (ii) any action
taken or omitted to be taken in reliance upon any document, including any
written notice or instructions provided for this Escrow Agreement, not only as
to its due execution and to the validity and effectiveness of its provisions but
also as to the truth and accuracy of any information contained therein, if the
Escrow Agent shall in good faith believe such document to be genuine, to have
been signed or presented by a proper person or persons, and to conform with the
provisions of this Agreement.
(b) The Company agrees to indemnify and hold harmless the Escrow Agent
against any and all losses, claims, damages, liabilities and expenses,
including, without limitation, reasonable costs of investigation and counsel
fees and disbursements which may be imposed by the Escrow Agent or incurred by
it in connection with its acceptance of this appointment as Escrow Agent
hereunder or the performance of its duties hereunder, including, without
limitationject matter thereof; except, that if the Escrow Agent shall be found
guilty of willful misconduct or gross negligence under this agreement, then, in
that event, the Escrow agent shall bear all such losses, claims, damages and
expenses.
(c) If a dispute ensues between any of the parties hereto which, in the
opinion of the Escrow Agent, is sufficient to justify its doing so, the Escrow
Agent shall retain legal counsel of its choice as it reasonably may deem
necessary to advise it concerning its obligations hereunder and to represent it
in any litigation to which it may be a part by reason of this Agreement. The
Escrow Agent shall be entitled to tender into the registry or custody of any
court of competent jurisdiction all money or property in its hands under the
terms of this Agreement, and to file such legal proceedings as it deems
appropriate, and shall thereupon by discharged from all further duties under
this Agreement. Any such legal action may be brought in any such court as the
Escrow Agent shall determine to have jurisdiction thereof. In connection with
<PAGE>
such dispute, the Company shall indemnify the Escrow Agent against its court
costs and reasonable attorney's fees incurred.
(d) The Escrow Agent may resign at any time upon giving thirty (3) days
written notice to the Company. If a successor escrow agent is not appointed by
Company within thirty (3) days after notice of resignation, the Escrow Agent may
petition any court of competent jurisdiction to name a successor escrow agent
and the Escrow Agent herein shall be fully relieved of all liability under this
Agreement to any and all parties upon the transfer of the Escrowed Funds and all
related documentation thereto, including appropriate information to assist the
successor escrow agent with the reporting of earnings of the Escrowed Funds to
the appropriate state and federal agencies in accordance with the applicable
state and federal income tax laws, to the successor escrow agent designated by
the Cf Successor. The Company may, upon the delivery of thirty (30) days
written notice appointing a successor escrow agent to the Escrow Agent,
terminate the services of the Escrow Agent hereunder. In the event of such
termination, the Escrow Agent shall immediately deliver to the successor escrow
agent selected by the Company, all documentation and Escrowed Funds including
interest earnings thereon in its possession, less any fees and expenses due to
the Escrow Agent or required to be paid by the Escrow Agent to a third party
pursuant to this Agreement.
8. NOTICE. All notices, requests, demands and other communications or
------
deliveries required or permitted to be given hereunder shall be in writing and
shall be deemed to have been duly given three days after having been deposited
for mailing if sent by registered mail, or certified mail return receipt
requested, or delivery by courier, to the respective addresses set forth below:
IF TO THE SUBSCRIBERS FOR SHARES: To their respective addresses as
specified in their Subscription
Agreements.
THE COMPANY: Peoples Bancorp, Inc.
516 Bankhead Hwy.
Carrollton, Georgia 30117
Attention: Timothy I. Warren
President/CEO
WITH A COPY TO: Holland & Knight
Suite 2000
1 Atlantic Center
1201 W. Peachtree Street, NE
Atlanta, Georgia 30309-3400
Attention: Gil Davis
Attorney at Law
<PAGE>
THE ESCROW AGENT: The Bankers Bank
3715 Northside Parkway
300 Northcreek, Suite 800
Atlanta, Georgia 30327
Attention: William R. Burkett
Senior Vice President
9. REPRESENTATIONS OF THE COMPANY. The Company hereby acknowledges that
------------------------------
the status of the Escrow Agent with respect to the offering of the Shares is
that of agent only for the limited purposes herein set forth, and hereby agrees
it will not represent or imply that the Escrow Agent, by serving as the Escrow
Agent hereunder or otherwise, has investigated the desirability or advisability
in an investment in the Shares, or has approved, endorsed or passed upon the
merits of the Shares, nor shall the Company use the name of the Escrow Agent in
any manner whatsoever in connection with the offer or sale of the Shares, other
than by acknowledgment that it has agreed to serve as Escrow Agent for the
limited purposes herein set forth.
10. GENERAL.
-------
(a) This Agreement shall be governed by and construed and enforced in
accordance with the laws of the State of Georgia.
(b) The section headings contained herein are for reference purposes only
and shall not in any way affect the meaning or interpretation of this Agreement.
(c) This Agreement sets forth the entire agreement and understanding of the
parties with regard to this escrow transaction and supersedes all prior
agreements, arrangements and understandings relating to the subject matter
hereof.
(d) This Agreement may be amended, modified, superseded or canceled, and
any of the terms or conditions hereof may be waived, only by a written
instrument executed by each party hereto or, in the case of a waiver, by the
party waiving compliance. The faa further or continuing waiver of any such
condition or breach, or a waiver of any other condition or of the breach of any
other terms of this Agreement.
(e) This Agreement may be executed simultaneously in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
(f) This Agreement shall inure to the benefit of the parties hereto and
their respective administrators, successors and assigns. The Escrow Agent shall
be bound only by the terms of this Escrow Agreement and shall not be bound by or
incur any liability with respect to any other agreement or understanding between
<PAGE>
the parties except as herein expressly provided. The Escrow Agent shall not
have any duties hereunder except those specifically set forth herein.
(g) No interest in any part to this Agreement shall be assignable in the
absence of a written agreement by and between all the parties to this Agreement,
executed with the same formalities as this original Agreement.
IN WITNESS WHEREOF, the parties have duly executed this Agreement as the
date first written above.
COMPANY: ESCROW AGENT:
PEOPLES BANCORP, INC. THE BANKERS BANK
By: /s/ Timothy I. Warren By: /s/ William R. Burkett
---------------------- ------------------------
Timothy I. Warren William R. Burkett
President/CEO Senior Vice President
<PAGE>
EXHIBIT 10(A)(I)
CONSENT OF SNYDER, CAMP, STEWART & CO., LLP
INDEPENDENT AUDITORS' CONSENT
We consent to the inclusion in this Registration Statement on Form SB-1 of our
report dated September 9, 1996 on our examination of the financial statements of
Peoples Bancorp, Inc. as of and for the period ended August 31, 1996. We also
consent to the reference to our firm under the heading "Experts" in the
prospectus.
/s/ SNYDER, CAMP, STEWART & CO., LLP
-------------------------------------
Norcross, Georgia
November 6, 1996
