<PAGE>
As filed with the Securities and Exchange Commission on September 19, 1996
Registration No. 333-__________
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-------------------------------------------
FORM SB-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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PEOPLES BANCORP, INC.
(Name of Small Business Issuer in Its Charter)
<TABLE>
<S> <C> <C>
Georgia 6711 Applied for
--------------------------- ---------------------------- ---------------------
(State of Jurisdiction of (Primary Standard Industrial (I.R.S. Employer
Incorporation or Organization) Classification Code Number) Identification No.)
</TABLE>
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]
-------------------------------------------
<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 X Alternative 2
--- ---
<PAGE>
CROSS REFERENCE SHEET PURSUANT TO RULE 404(A)
Form Number and Caption Location or Heading in Prospectus
----------------------- ---------------------------------
1. Inside Front and Outside Back
Cover Pages of Prospectus............ Facing Page, Cover Page
2. Significant Parties.................. Principal Shareholders
3. Relationship with Issuer of Experts
Named in Registration Statement...... Not Applicable
4. Selling Security-Holders............. Not Applicable
5. Changes in and Disagreements with
Accountants.......................... Not Applicable
6. Disclosure of Commission Position on
Indemnification for Securities Act
Liabilities.......................... Management
7. Financial Statements................. Financial Statements
<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
$5,250,000 MINIMUM OFFERING -- 525,000 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 ______________, 1996, and received
preliminary approval of its application for federal deposit insurance from the
FDIC on _______________, 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 525,000
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 $5,250,000 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.
================================================================================
Underwriting
Price to Discounts and Proceeds to
Public Commissions (1) Company (2)
- --------------------------------------------------------------------------------
Per Share........................ $10 $0 $10
Minimum Offering(3).............. $5,250,000 $0 $5,250,000
Maximum Offering(3).............. $8,000,000 $0 $8,000,000
================================================================================
(Footnotes on next page)
THE DATE OF THIS PROSPECTUS IS ____________, 1996.
<PAGE>
(Continued from previous page)
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 525,000 Shares with proceeds to the Company of at least $5,250,000 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 $5,250,000 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 525,000 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 275,000 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 _________________, 1996 for authority to become a bank holding company which
will own all of the issued stock of the Bank. Those applications have been
accepted by 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 ______________, 1996 and received preliminary approval of its
application for federal deposit insurance from the FDIC on _______________,
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 525,000 Shares offered on a
"best efforts, all or none" basis and an additional 275,000 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 $5,250,000 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 500,000 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
-6-
<PAGE>
to attract business and acquaint potential customers with the personalized
services to be offered by an independent, locally-owned and 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,
-7-
<PAGE>
among other things, the Bank's business plan, the regulatory requirement that
the Bank have an initial capitalization of at least $5,000,000, the
marketability of various offering prices, and the offering prices of other
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 transferrable 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 62.2% 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 525,000 Shares and a maximum of
800,000 Shares. The minimum offering is being made on a "best efforts, all or
-8-
<PAGE>
none" basis and all subscription proceeds will be deposited in an 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 $5,250,000
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
$5,250,000 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
275,000 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 525,000 Shares with proceeds to the
Company of at least $5,250,000 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 $5,250,000 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 75% 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 outstanding upon completion of this
offering without submitting financial and any other required information to the
appropriate regulatory authorities.
-9-
<PAGE>
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.
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 $5,212,000 if the minimum
of 525,000 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
-10-
<PAGE>
$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 $5,000,000 and up to
$7,700,000 of the net offering proceeds by purchasing between 500,000 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 $3,143,000 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.
USE OF PROCEEDS
<TABLE>
<CAPTION>
Minimum Maximum
Offering Offering
----------- -----------
<S> <C> <C>
Gross offering proceeds/(1)/..................... $ 5,250,000 $ 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...................... 5,000,000 7,700,000
----------- -----------
Total............................................ $ 5,250,000 $ 8,000,000
=========== ===========
Anticipated use of capial 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................................. 3,143,000 5,843,000
----------- -----------
Total............................................ $ 5,000,000 $ 7,700,000
=========== ===========
</TABLE>
- -----------------
/(1)/ Assuming the sale of 525,000 Shares and 800,000 Shares, respectively, at a
price of $10.00 per Share.
-11-
<PAGE>
/(2)/ Organizational expenses consist primarily of consulting fees for market
analysis and feasibility studies, 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 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.
-12-
<PAGE>
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 525,000 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 issued,
525,000 to be issued as adjusted 1 -- 525,000 5,250
-------- ----------
Capital surplus 10 5,206,750
-------- ----------
Accumulated deficit (23,404) (125,000)
-------- ----------
Total equity $(23,394) $5,087,000
-------- ----------
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.
/(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.
-13-
<PAGE>
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 for authority to become a bank holding company
which will own all of the issued stock of the Bank with the FRB and the DBF.
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 ______________, 1996 and
received preliminary approval of its application for federal deposit insurance
from the FDIC on _______________, 1996. The Bank has until ________________,
1997 to complete its organization and ________________, 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 $5,000,000.
The Company is committed to provide that amount of initial capital for the Bank
from the net proceeds of this offering by purchasing 500,000 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 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
-14-
<PAGE>
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. 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 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 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
-15-
<PAGE>
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, has leased the building for a term
ending February 1997 (if notice is given by September 30, 1996) at a monthly
rental rate of $2,500. The Temporary Office lease will be assumed by the Bank
upon completion of the minimum offering. 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 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.
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<PAGE>
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 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.
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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
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
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<PAGE>
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.
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.
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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 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.
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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 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 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
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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
Officer and Director 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
Mark S. Swindle 48 Director Director
</TABLE>
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.
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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.
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
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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 $100,000 until the Company
accepts subscriptions for the minimum of 525,000 shares. Upon accepting
subscriptions for the minimum offering, Mr. Warren's annual base salary will
increase to $135,000. 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 performance.
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 about prior notice from
either party. If terminated without cause he is entitled to receive his annual
base salary payable in 48 bi-monthly equal payments, net of withholding.
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.
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.
-24-
<PAGE>
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 75% of the 525,000 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."
TEMPORARY OFFICE LEASE ASSUMPTION
Phillip Kauffman, one of the Organizers, has 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 February 1997 provided that notice has been given by
September 30, 1996, but otherwise extends to March 1998. The monthly lease rate
is $2,500. See also "Business -- Bank Offices."
-25-
<PAGE>
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
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 2.86% 1.88%
Organizer and Director
John B. Bohannon 20,000/(4)/ 3.81% 2.50%
Organizer and Director
Ann C. Carter 10,000 1.90% 1.25%
Organizer and Director
Lester H. Harmon 10,000 1.90% 1.25%
Organizer and Director
William P. Johnson 60,000 11.43% 7.50%
Organizer and Director
306 Tanner St.,
Carrollton, GA 30117
Phillip Kauffman 50,000 9.52% 6.25%
Organizer and Director
500 Ind. Ct. West,
Villa Rica, GA 30180
</TABLE>
-26-
<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>
Elaine B. Lovvorn 1,000/(5)/ 0.19% 0.13%
Company Secretary;
Bank CFO and COO
Jeff R. Matthews 30,000/(6)/ 5.71% 3.75%
Organizer and Director
Charles J. Puckett 100,000/(7)/ 19.05% 12.50%
Organizer and Director
2208 Bankhead Highway,
Carrollton, GA 30117
William C. Seaton 10,000/(8)/ 1.90% 1.25%
Organizer and Director
Mark S. Swindle 10,000/(9)/ 1.90% 1.25%
Organizer and Director
Timothy I. Warren 10,400/(10)/ 1.98% 1.30%
President, Chief Executive
Officer, Organizer and Director
All current directors and 326,400 62.17% 40.80%
officers as a group
(12 persons)/(2)(3)/
</TABLE>
- -------------
/(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 75%
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."
/(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)/ Does not include 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.
-27-
<PAGE>
/(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. Does not
include 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."
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.
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.
-28-
<PAGE>
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
525,000 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., transactions 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.
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.
-29-
<PAGE>
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 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, Atlanta, Georgia.
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 can be obtained from the Public Reference
Section of the Commission at 450 Fifth Street N.W., Washington, D. C. 20549, at
prescribed rates.
-30-
<PAGE>
PEOPLES BANCORP, INC.
(A Development Stage Corporation)
Index to Financial Statements
- --------------------------------------------------------------------------------
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
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
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 expenses 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
Expenses:
Occupancy expenses $ 17,225.27
Personnel expenses 5,087.22
Interest 1,091.72
----------
Net loss $(23,404.21)
===========
See accompanying auditors' report and notes to financial statements.
F-4
<PAGE>
PEOPLES BANCORP, INC.
(A Development Stage Corporation)
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 525,000
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
PAGE
Prospectus Summary.............. 3
Risk Factors.................... 6
The Offering.................... 8
Use of Proceeds................. 10
Dividend Policy................. 12
Capitalization.................. 13
Business........................ 14
Supervision and Regulation...... 18
Management...................... 22
Certain Transactions............ 25
Principal Shareholders.......... 26
Description of Capital Stock.... 28
Legal Matters................... 30
Experts......................... 30
Additional Information.......... 30
Financial Statements............ F-1
Subscription Agreement.......... A-1
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 repre-
sentations in connection with the offer
contained in this Prospectus unless
preceded or accompanied by this Prospectus,
nor has any person been authorized
authorized to give any information or
to make any representations other than
these contained in this Prospectus in
connect with the offer contained in this
Prospectus, and, if given or made, such
information or representations must not
be relied upon. This Prospectus does n
constitute an offer or solicitation in
any jurisdiction to any person to whom
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
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
______________________
____________, 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.
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
=======
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) 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.
II-1
<PAGE>
(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 Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Carrollton, State of
Georgia, on August 30, 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:
Signature Title Date
--------- ----- ----
/s/ Timothy I. Warren President and Chief August 30, 1996
- ------------------------------
Timothy I. Warren Executive, Financial and
Accounting Officer/Director
/s/ Steve R. Adams Director August 30, 1996
- ------------------------------
Steve R. Adams
/s/ John B. Bohannon Director August 30, 1996
- ------------------------------
John B. Bohannon
/s/ Ann C. Carter Director August 30, 1996
- ------------------------------
Ann C. Carter
Director , 1996
- ------------------------------ ----------
Mark S. Swindle
/s/ Lester H. Harmon Director August 30, 1996
- ------------------------------
Lester H. Harmon
/s/ William P. Johnson Director August 30, 1996
- ------------------------------
William P. Johnson
II-3
<PAGE>
/s/ Philip Kauffman Director August 30, 1996
- ------------------------------
Philip Kauffman
/s/ Jeff R. Matthews Director August 30, 1996
- ------------------------------
Jeff R. Matthews
/s/ Charles J. Puckett Director August 30, 1996
- ------------------------------
Charles J. Puckett
/s/ William C. Seaton Director August 30, 1996
- ------------------------------
William C. Seaton
II-4
<PAGE>
EXHIBIT INDEX
-------------
Sequential Sequential
Exhibit No. Page No.
- ----------- ----------
2.1 Articles of Incorporation of the Registrant
dated August 27, 1996
2.1 Bylaws of the Registrant
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
6.3 Lease Agreement with respect to Temporary Headquarters and
Assignment and Assumption with respect thereto
6.4 Purchase and Sale Agreement with Respect to Main Office Site
6.5 Employee Incentive Stock Option Plan
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
*To be filed by amendment.
II-5
<PAGE>
EXHIBIT 2.1
ARTICLES OF INCORPORATION
OF
PEOPLES BANCORP, INC.
ARTICLE 1. NAME. The name of the corporation (the "Corporation") is
--------- ----
Peoples Bancorp, Inc.
ARTICLE 2. STATE OF ORGANIZATION. The Corporation is organized pursuant
--------- ---------------------
to the provisions of the Georgia Business Corporation Code (the "Code").
ARTICLE 3. CAPITAL STOCK.
--------- -------------
A. AUTHORIZED SHARES. The total number of shares of all classes of
capital stock which the Corporation shall have authority to issue is 11,000,000,
consisting of 10,000,000 shares of common stock, par value $0.01 per share (the
"Common Stock") and 1,000,000 shares of preferred stock, par value $0.01 per
share (the "Preferred Stock"). The shares may be issued from time to time as
authorized by the Board of Directors of the Corporation without further approval
of the shareholders except as otherwise provided herein or to the extent that
such approval is required by statute, rule or regulation.
B. COMMON STOCK. Except as otherwise provided by statute or Preferred
Stock Designations (as defined below), the holders of the common stock shall
exclusively possess all voting power. Each holder of shares of common stock
shall be entitled to one vote for each share held of record by such holder as to
each matter submitted to shareholders for approval. There shall be no cumulative
voting rights in the election of directors of the Corporation.
C. PREFERRED STOCK. The shares of Preferred Stock may be issued from
time to time in one or more series as may be established by the Board of
Directors of the Corporation. The Board of Directors is hereby expressly
authorized to fix and determine by resolution(s) the number of shares of each
series of Preferred Stock and the designation thereof, any voting and other
powers, preferences and relative participating, optional or special rights,
including the number of votes, if any, per share, and such qualifications,
limitations or restrictions on any such powers, preferences and rights as shall
be stated in the resolution(s) providing for the issue of the series (a
"Preferred Stock Designation") and as may be permitted by the Code. The number
of authorized shares of Preferred Stock may be increased or decreased (but not
below the number of shares of such class or series then outstanding) by the
affirmative vote of holders of a majority of the voting power of the then
outstanding shares of capital stock, voting together as a single class, without
a separate vote of the holders of the Preferred Stock, or any series thereof,
unless the vote of such holders if required pursuant to any Preferred Stock
Designation.
ARTICLE 4. REGISTERED OFFICE, REGISTERED AGENT, AND PRINCIPAL OFFICE.
--------- ---------------------------------------------------------
The initial registered office of the Corporation shall be at 516 Bankhead
Highway, Carrollton, Georgia, Carroll County, Georgia 30117. The initial
registered agent of the Corporation at that address shall be Timothy I. Warren.
The initial principal office of the Corporation shall be at 516 Bankhead
Highway, Carrollton, Georgia 30117.
ARTICLE 5. DIRECTORS.
--------- ---------
A. The Corporation shall be under the direction of the Board of
Directors. The Board of Directors shall consist of not less than six (6) nor
more than twenty (20) directors. The number of directors within this range
shall be fixed from time to time only by the Board of Directors pursuant to a
resolution adopted by a majority of the directors then in office. The Board of
Directors shall be divided into three classes: Class I, Class II, and Class
III, with each class to be as nearly equal in number as possible. Each director
shall serve for a term ending on the date of the third annual meeting of
shareholders of the Corporation (the "Annual Meeting") following the Annual
Meeting at which such director was elected; provided, however, that the
directors designated herein as members of Class I shall serve for a term ending
on the date of the first Annual Meeting following the date on which such
directors are so designated, the directors designated herein as members of Class
II shall serve for a term ending on the date of the second Annual Meeting
following the date on which said directors were so designated, and the directors
designated herein as members of Class III shall serve for a term ending on the
date of the third Annual Meeting following the date on which such directors were
so designated. Notwithstanding the foregoing, each director shall serve until
his successor is elected and qualified or until his death, resignation or
removal.
1
<PAGE>
B. The initial Board of Directors of the Corporation shall consist of
eleven (11) members, whose names, addresses and initial class are set forth
below:
Name Address
---- -------
Class I (Term Expiring 1997)
Ann C. Carter 356 Club Drive
Carrollton, Georgia 30117
Lester H. Harmon 70 Harmon Road
Temple, Georgia 30179
William C. Seaton 50 N. Hill Street
Carrollton, Georgia 30117
Class II (Term Expiring 1998)
Steve R. Adams 1952 Highway 27 North
Carrollton, Georgia 30117
John B. Bohannan 115 Habersham Place
Carrollton, Georgia 30117
Jeff R. Matthews 250 Garst Road
Carrollton, Georgia 30117
Mark S. Swindle 109 Stonewall Drive
Carrollton, Georgia 30117
Class III (Term Expiring 1999)
William P. Johnson 306 Tanner Street
Carrollton, Georgia 30117
Phillip Kauffman 120 Lisa Lane
Carrollton, Georgia 30117
Charles J. Puckett 2208 Highway 166
Carrollton, Georgia 30117
Timothy I. Warren 4141 Tyus Road
Carrollton, Georgia 30117
C. Any director may be removed from office at any time, but only for
cause, by the affirmative vote of holders of 75% of the then outstanding shares
of capital stock of the Corporation entitled to be cast, voting together as a
single class, at a meeting of shareholders called for that purpose, unless the
removal has been approved by a resolution adopted by at least two-thirds of the
directors then in office, in which event the removal shall be approved by vote
of the holders of a majority of the voting power of the then outstanding shares
of capital stock of the Corporation entitled to be cast, voting together as a
single class, at a meeting of the shareholders called for that purpose. For
purposes of this paragraph, "cause" shall mean any act or omission for which a
director may be personally liable to the Corporation or its shareholders
pursuant to Article 6 hereof, as well as any other act or omission which relates
to personal dishonesty, incompetence or intentional failure to perform stated
duties.
2
<PAGE>
D. Any vacancy occurring in the Board of Directors, including any
vacancy created by reason of an increase in the number of directorships, may be
filled by the vote of a majority of directors then in office. Any director so
chosen shall hold office until such director's successor shall have been elected
and qualified. Any director chosen by the Board of Directors to fill a vacancy
created, other than by reason of an increase in the number of directorships,
shall serve for the unexpired term of the director whose vacancy is being
filled. Any director chosen by the Board of Directors to fill a vacancy created
by reason of an increase in the number of directorships shall serve for a term
to expire at the next election of directors by the shareholders.
ARTICLE 6. DIRECTOR'S LIABILITY. A director of the Corporation shall
--------- --------------------
not be personally liable to the Corporation or its shareholders for monetary
damages for breach of his duty of care or other duty as a director by reason of
any act or omission, except for liability (i) for any appropriation, in
violation of his duties, of any business opportunity of the Corporation; (ii)
for acts or omissions which involve intentional misconduct or a knowing
violation of law; (iii) for the types of liability set forth in Section 14-2-832
of the Code; or (iv) for any transaction from which the director derives an
improper personal benefit. If the Code is amended to authorize corporate action
further limiting the personal liability of directors, then the liability of a
director of the Corporation shall be limited to the fullest extent permitted the
Code, as so amended. Any repeal or modification of this Article by the
shareholders of the Corporation shall not adversely affect any right or
protection of a director of Corporation existing at the time of such repeal or
modification.
ARTICLE 7. SHAREHOLDER MEETINGS.
--------- --------------------
A. Special meetings of shareholders may be called at any time by the
Chairman of the Board or the President, by a majority of the directors then in
office or by the written request of the holders of at least 75% of the then
outstanding shares of capital stock of the Corporation entitled to be cast,
voting together as a single class.
B. The shareholders of the Corporation 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 called for that purpose.
C. Advance notice of shareholder nominations for election of
directors and of business to be brought by shareholders before any meeting the
shareholders of the Corporation shall be given in the manner provided in the
Bylaws of the Corporation.
ARTICLE 8. CERTAIN BUSINESS TRANSACTIONS.
--------- -----------------------------
A. The affirmative vote of holders of at least 80% of the standing
shares of capital stock entitled to be cast at a meeting called to vote on any
transaction submitted to the shareholders pursuant to this Article, voting
together as a single class, shall be required for the approval or authorization
of: (i) any merger or consolidation of the Corporation or any of its
subsidiaries with or into any other corporation, partnership, person or other
entity; or (ii) any sale, lease, exchange, transfer or disposition of all or
substantially all of the assets of the Corporation or any of its subsidiaries to
or with any other corporation, partnership, person or other entity; or (iii)
adoption of any plan or proposal for the liquidation or dissolution of the
Corporation; provided, however, that such 80% voting requirement shall not be
applicable if the Board of Directors of the Corporation shall have approved any
such action or transaction described in clauses (i), (ii) or (iii) by resolution
adopted by at least two-thirds of the directors then in office, in which case
the affirmative vote of holders of a majority of the outstanding shares of
capital stock entitled to be cast, voting together as a single class, be
required to approve such action or transaction.
B. The fact that any action or transaction complies with the
provisions of this Article shall not be construed to impose any fiduciary duty,
obligation or responsibility on the Board of Directors or any member thereof to
approve such action or transaction, recommendation, adoption or approval to the
shareholders of the Corporation, nor shall any such compliance limit, prohibit
or otherwise restrict in any manner the Board of Directors, or any member
thereof, with respect to evaluations of, or actions or responses taken with
respect to, such action or transaction.
3
<PAGE>
ARTICLE 10. BYLAWS. In furtherance and not in limitation of the power
---------- ------
conferred by statute, the Board of Directors is expressly authorized to make,
alter, amend and repeal the Bylaws of the Corporation by vote of at least two-
thirds of the directors then in office, subject to the powers of the holders of
the capital stock of the Corporation to alter, amend or repeal the Bylaws;
provided, however, that, with respect to the powers of the holders of capital
stock to alter, amend and repeal the Bylaws of the Corporation, notwithstanding
any other provisions of these Articles of Incorporation or any provision of law
which might otherwise permit a lesser vote or no vote, but in addition to any
affirmative vote of holders of any particular class or series of the capital
stock of the Corporation required by law, or these Articles of Incorporation,
the affirmative vote of holders of at least 80% of the voting power of the then
outstanding shares of capital stock entitled to be cast, voting together as a
single class, shall be required to alter, amend or repeal any provision of
Bylaws.
ARTICLE 11. AMENDMENT OF ARTICLES OF INCORPORATION. The Corporation
---------- --------------------------------------
reserves the right to amend, alter or repeal any provision contained in these
Articles of Incorporation in the manner now or hereafter prescribed by statute,
and all rights conferred on shareholders herein are granted subject to this
reservation. Notwithstanding the preceding sentence, the provisions set forth
in this Article and Articles 3, 6, 7, 8, 9 and 10 hereof may not be altered,
amended or repealed in any respect, and no other provision(s) may be adopted
which would impair in any respect the operation or effect of any such
provisions, except by the affirmative vote of holders of at least 80% of the
voting power of the then outstanding shares of capital stock, voting together as
a single class; provided, however, that such 80% voting requirement shall not be
applicable if the Board of Directors of the Corporation shall approve such
action by resolution adopted by at least two-thirds of the directors then in
office, in which case the affirmative vote of holders of a majority of the then
outstanding shares of capital stock entitled to be cast at the meeting of
shareholders called for that purpose, voting together as a single class, shall
be required to approve such action.
ARTICLE 12. SAVINGS CLAUSE. In the event any provision (or portions
---------- --------------
thereof) of these Articles of Incorporation shall be found to be invalid,
prohibited or unenforceable for any reason, the remaining provisions (or
portions thereof) of these Articles of Incorporation shall remain in full force
and effect, and shall be construed as if such invalid, prohibited or
unenforceable provision had been stricken herefrom or otherwise rendered
inapplicable, it being the intent of the Corporation and its shareholders that
each such remaining provision (or portions thereof) of these Articles of
Incorporation remain, to the fullest extent permitted by law, applicable and
enforceable as to all shareholders notwithstanding any such finding.
ARTICLE 13. INCORPORATOR. The name and address of the incorporator of
---------- ------------
the Corporation is Gilbert H. Davis, Esq., Holland & Knight, Suite 2000, One
Atlantic Center, 1201 West Peachtree Street, N.E., Atlanta, Georgia 30309-3400.
IN WITNESS WHEREOF, the undersigned has executed these Articles of
Incorporation.
/s/ Gilbert H. Davis
--------------------------------------
Gilbert H. Davis, Esq., Incorporator
Holland & Knight
Suite 2000
One Atlantic Center
1201 West Peachtree Street, N.E.
Atlanta, Georgia 30309-3400
(404) 898-8197
4
<PAGE>
EXHIBIT 2.2
BYLAWS OF PEOPLES BANCORP, INC.
ARTICLE ONE
OFFICES
SECTION 1.1 REGISTERED OFFICE AND AGENT. The Corporation will maintain
----------- ---------------------------
a registered office and will have a registered agent whose business office is
identical with such registered office. The registered office need not be
identical with the principal business office of the Corporation.
SECTION 1.2 OTHER OFFICES. The Corporation may have offices at such
----------- -------------
other place(s), within or without the State of Georgia, as the Board of
Directors may from time to time determine or the business of the Corporation may
require.
ARTICLE TWO
SHAREHOLDERS' MEETINGS
SECTION 2.1 DATE, TIME AND PLACE OF MEETINGS. All meetings of the
----------- --------------------------------
shareholders shall be held on such date, time and place, within or without the
State of Georgia, as the Board of Directors may set forth from time to time, or
if no place is so specified, at the principal executive office of the
Corporation.
SECTION 2.2 ANNUAL MEETINGS. The annual meeting of shareholders shall
----------- ---------------
be held on a date and at a time following the end of the Corporation's fiscal
year as may be determined by the Board of Directors, for the purpose of electing
directors and transacting any and all business that may properly come before the
meeting.
SECTION 2.3 SPECIAL MEETINGS. Special meetings of the shareholders for
----------- ----------------
any purpose(s) may be called at any time by the Chairman of the Board or the
President or by a majority of the directors then in office or by written request
of the holders of at least 75% of the then outstanding shares of capital stock
of the Corporation entitled to be cast, voting together as a single class.
Business transacted at any special meeting of shareholders shall be limited to
the purpose(s) stated in the notice thereof.
SECTION 2.4 NOTICE OF MEETINGS. Written notice of each shareholders'
----------- ------------------
meeting stating the date, time and place of the meeting will be delivered either
personally or by mail to each shareholder of record entitled to vote at such
meeting, not less than 10 days nor more than 60 days before the date of the
meeting. In the case of an annual meeting, the notice of the meeting need not
state the purpose(s) for which the meeting is called. In the case of a special
meeting, the notice of meeting shall state the purpose(s) for which the meeting
is called. If mailed, such notice shall be deemed to be delivered when
deposited in the United States mail with first class postage affixed thereon,
prepaid, addressed to each shareholder at his address as it appears on the
Corporation's record of shareholders. Attendance of a shareholder at a meeting
of the shareholders shall constitute a waiver of notice of such meeting and of
all objections to the place or time of such meeting, or the manner in which it
has been called or convened, except when a shareholder attends a meeting solely
for the purpose of stating, at the beginning of the meeting, any such objection
to the transaction of any business. Notice need not be given to any shareholder
who signs a waiver of notice, in person or by proxy, either before or after the
meeting. If the language of a proposed resolution or plan requiring the
approval of the shareholders is included in a written notice of a meeting of the
shareholders, the shareholders' meeting considering the resolution or plan may
adopt it with such clarifying or other amendments as do not enlarge its original
purpose without further notice to shareholders not present in person or by
proxy.
SECTION 2.5 QUORUM. The presence, in person or by proxy, of the holders
----------- ------
of a majority of shares then issued and outstanding and entitled to vote, shall
constitute a quorum for the transaction of business at any meeting of
shareholders, except as otherwise required by statute or the Articles of
Incorporation. Where a quorum is once present at a meeting, it shall not be
broken by the subsequent withdrawal of any of those present.
SECTION 2.6 ADJOURNMENT. In the absence of a quorum or for any other
----------- -----------
reason, the holders of the majority of the shares then issued and outstanding
and entitled to vote at any meeting of the shareholders, present in person or
represented by proxy, or the Chairman of the Board, or the President, shall have
the power to adjourn the meeting from time to time, without notice other than
announcement at the meeting of the date, time and place of the adjourned
meeting. At such adjourned meeting in which a quorum shall be present or
represented, any business may be transacted which might have been transacted at
the meeting as originally notified. If after the adjournment a new record date
is picked for the adjourned meeting, notice of the adjourned meeting shall be
given to each shareholder of record entitled to vote at the adjourned meeting.
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SECTION 2.7 VOTE REQUIRED. When a quorum is present at any meeting, the
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affirmative vote of the holders of a majority of the shares of stock of the
Corporation entitled to vote and present in person or represented by proxy,
voting together as a single class, shall decide any questions brought before
such meeting, except as otherwise required by statute or the Articles of
Incorporation.
SECTION 2.8 VOTING OF SHARES. Except as otherwise required by statue or
----------- ----------------
the Articles of Incorporation, each shareholder shall be entitled to one vote,
in person or represented by proxy, for each share of stock having voting power
held by such shareholder at every meeting of the shareholders. Shareholders may
vote in person or by written proxy; provided, however, no proxy shall be voted
or acted on after 11 months from its date, unless the proxy provides for a
longer period. Any proxy to be voted at a meeting of shareholders shall be
filed with the Secretary of the Corporation before or at the time of the
meeting. Voting on matters brought before a shareholders' meeting may, at the
discretion of the person presiding at the meeting, be by voice vote or show of
hands, unless any qualified voter, prior to the voting on such matter, demands
vote by ballot, in which event the voting shall be by ballot.
SECTION 2.9 NO ACTION BY WRITTEN CONSENT. 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.
SECTION 2.10 SHAREHOLDERS' LIST. A complete list of shareholders
------------ ------------------
entitled to vote at any meeting of shareholders, arranged in alphabetical order
showing the address of each such shareholder as it appears in the records of the
Corporation and the number of shares registered in the name of such shareholder,
shall be prepared by the Secretary of the Corporation at least 10 days prior to
every meeting of shareholders. Such list shall be open to the examination of
any shareholder, for any purpose relating to the meeting, during ordinary
business hours for a period of at least 10 days prior to the meeting, either at
a place within the city where the meeting is to be held or, if not so specified,
the place where the meeting is to be held, and a duplicate list shall be
similarly open to examination at the principal executive office of the
Corporation. The list shall also be produced and kept at the time and place of
the meeting during the duration thereof, and may be inspected by any shareholder
who is present.
SECTION 2.11 INSPECTORS OF ELECTION. In advance of any meeting of
------------ -----------------------
shareholders, the Board of Directors may appoint any persons, other than
nominees for office, as inspectors of election to act at such meeting or any
adjournment thereof. The number of inspectors shall be either one or three. If
such persons are not so appointed or fail or refuse to act, the presiding
officer of such meeting shall make such appointment(s) at the meeting. The
number of inspectors shall be either one or three. If there are three
inspectors, the decision, action or certificate of a majority of such inspectors
shall be effective and shall represent the decision, action or certificate of
all. No such inspector need be a shareholder of the Corporation.
Unless otherwise required by statute or the Articles of Incorporation,
the duties of such inspectors shall include: determining the number of shares
outstanding and the voting power of each share, the number of shares represented
at the meeting, the existence of a quorum, the authenticity, validity and effect
of proxies; receiving votes or ballots; hearing and determining all challenges
and questions in any way arising in connection with the right to vote; counting
and tabulating all ballots or votes and determining the results thereof; and
such acts as may be proper to conduct the election or vote with fairness to all
shareholders. Upon request, the inspectors shall make a report in writing to
the secretary of the meeting concerning any challenge, question or other matter
as may have been determined by them and shall execute and deliver to such
secretary a certificate of any fact found by them.
SECTION 2.12 CONDUCT OF MEETINGS.
------------ -------------------
(a) All annual and special meetings or shareholders shall be conducted in
accordance with such rules and procedures as the Board of Directors may
determine subject to the requirements of statute and, as to matters not governed
by such rules and procedures, as the presiding officer of such meeting shall
determine. The presiding officer of any annual or special meeting of
shareholders shall be the President or, in his absence, such person as
designated by the Board of Directors. The Secretary, or in his absence, a
person designated by the presiding officer, shall act as secretary of the
meeting.
(b) At any annual meeting of shareholders, only such business shall be
conducted as shall have been brought before the meeting (i) as specified in the
notice of the meeting given by or at the direction of the Board of Directors,
(ii) otherwise properly brought before the meeting by or at the direction of the
Board of Directors, or (iii) otherwise properly brought before the meeting by
any shareholder of the Corporation who is entitled to vote with respect thereto
and who complies with the notice procedures set forth in this subparagraph (b).
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For business to be properly brought before an annual meeting by a
shareholder, the shareholder must have given timely notice thereof in writing to
the Secretary of the Corporation. To be timely, a shareholder's notice must be
delivered or mailed to and received at the principal executive office of the
Corporation not less than 30 days prior to the date of the annual meeting;
provided, however, that in the event that less than 40 days' notice or prior
public disclosure of the date of the meeting is given or made to shareholders,
notice by a shareholder to be timely must be received not later than the close
of business on the 10th day following the day on which such notice of the date
of the annual meeting was mailed or such public disclosure was made. A
shareholder's notice to the Secretary shall set forth as to each matter such
shareholder proposes to bring before the annual meeting (i) a brief description
of the business desired to be brought before the annual meeting and the reasons
for conducting such business at the annual meeting (ii) the name and address, as
they appear on the books of the Corporation, of the shareholder proposing such
business, (iii) the class and number of shares of the Corporation's capital
stock that are beneficially owned by such shareholder and (iv) any material
interest of such shareholder in such business. Notwithstanding anything in these
Bylaws to the contrary, no business shall be brought before or conducted at an
annual meeting except in accordance with the provisions of this subparagraph
(b). The presiding officer at the annual meeting shall, if the facts so
warrant, determine and declare to the meeting that a matter of business was not
properly brought before the meeting in accordance with the provisions of this
subparagraph (b) and, if he should so determine, he shall so declare to the
meeting and any such business so determined to be not properly brought before
the meeting shall not be transacted.
(c) At any special meeting of the shareholders, only such business shall
be conducted as shall have been brought before the meeting by or at the
direction of the Board of Directors.
SECTION 2.13 VOTING OF SHARES BY CERTAIN HOLDERS.
------------ -----------------------------------
(a) If shares or other securities having voting power stand of record in
the names of two or more persons, whether fiduciaries, members of a partnership,
joint tenants, tenants in common, tenants by the entirety or otherwise, or if
two or more persons have the same fiduciary relationship respecting the same
shares, unless the Secretary of the Corporation is given written notice to the
contrary and is furnished with a copy of the instrument or order appointing them
or creating the relationship wherein it is so provided, their acts with respect
to voting shall have the following effect: (1) if only one votes, his act binds
all; (2) if more than one vote, the act of the majority so voting binds all;
(3) if more than one vote, but the vote is evenly split on any particular
matter, each faction may vote the securities in question proportionally, or any
person voting the shares, or a beneficiary, if any, may apply to such Court as
may have jurisdiction to appoint an additional person to act with the persons so
voting the shares, which shall then be voted as determined by the majority of
such persons and the person appointed by the Court. If the instrument so filed
shows that any such tenancy is held in unequal interests, a majority or even-
split for the purposes hereof shall be a majority or even-split in interests.
Shares standing in the name of another corporation may be voted by any officer,
agent or proxy as the bylaws of such corporation may prescribe, or, in the
absence of such provision, as the board of directors of such corporation may
determine. Shares held by an administrator, executor, guardian or conservator
may be voted by him, either in person or by proxy, without a transfer of such
shares into his name. Shares standing in the name of a trustee may be voted by
him, either in person or by proxy, but no trustee shall be entitled to vote
shares held by him without a transfer of such shares into his name. Shares
standing in the name of a receiver may be voted by such receiver, and shares
held by or under the control of a receiver may be voted by such receiver without
the transfer thereof into his name if authority so to do is contained in an
appropriate order of the court or other public authority by which such receiver
was appointed.
(b) A shareholder whose shares are pledged shall be entitled to vote such
shares until the shares have been transferred into the name of the pledgee, and
thereafter the pledgee shall be entitled to vote the shares so transferred.
ARTICLE THREE
THE BOARD OF DIRECTORS
SECTION 3.1 GENERAL POWERS. The business and affairs of the Corporation
----------- --------------
will be managed by or under the direction of the Board of Directors. In
addition to the powers and authority expressly conferred upon it by these
Bylaws, the Board of Directors may exercise all such powers of the Corporation
and do all such lawful acts and things as are not by statute, by any legal
agreement among shareholders, by the Articles of Incorporation or by these
Bylaws directed or required to be exercised or done by the shareholders. The
Board of Directors shall annually elect a Chairman of the Board from among its
members and may elect a Vice Chairman of the Board from among its members.
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SECTION 3.2 NUMBER AND TENURE. The Board of Directors shall consist of
----------- -----------------
not less than six nor more than 20 directors. The number of directors shall be
determined from time to time by resolution of the Board of Directors. The Board
of Directors shall be divided into three classes subject to the provisions of
the Articles of Incorporation. Each director shall hold office until his
successor is elected and qualified or until his earlier death, resignation,
attaining the age of 75 years, incapacity to serve or removal. No decrease in
the number of directors shall shorten the term of any incumbent director.
Except as otherwise provided in the Articles of Incorporation and these Bylaws,
directors shall be elected at each annual meeting of shareholders, or at a
special meeting of shareholders called for purposes that include the election of
directors.
SECTION 3.3 QUALIFICATION OF DIRECTORS. Directors shall be natural
----------- --------------------------
persons who have attained the age of 21 years but need not be residents of the
State of Georgia or shareholders of the Corporation. A director shall not be
permitted to stand for election after his seventieth birthday.
SECTION 3.4 VACANCY. Any vacancy occurring in the Board of Directors,
----------- -------
including any vacancy occurring by reason of an increase in the number of
directors or by the removal of a director, may be filled by the vote of a
majority of the directors then in office, though less than a quorum. Any
director so chosen shall hold office until such director's successor shall have
been elected and qualified. Any director chosen by the Board of Directors to
fill a vacancy created, other than by reason of an increase in the number of
directorships, shall serve for the unexpired term of the director whose vacancy
is being filled. Any director chosen by the Board of Directors to fill a
vacancy created by reason of an increase in the number of directorships shall
serve for a term to expire at the next election of directors by the
shareholders.
SECTION 3.5 REMOVAL. At a meeting of shareholders with respect to which
----------- -------
notice of such purpose has been given, any or all members of Board of Directors
may be removed for cause, and then only by the affirmative vote of the holders
of 75% of the then outstanding shares of stock of the Corporation entitled to be
cast, voting together as single class. Notwithstanding the foregoing, if a
removal has been approved by a resolution adopted by at least two-thirds of the
directors then in office, the removal shall be approved by vote of the holders
of a majority of the voting power of the then outstanding shares of capital
stock of the Corporation entitled to be cast, voting together as a single class.
For purposes hereof, "cause" shall mean any act or omission for which a director
may be personally liable to the Corporation or its shareholders pursuant to the
Articles of Incorporation, as well as any other act or omission which relates to
personal dishonesty, incompetence or intentional failure to perform stated
duties.
SECTION 3.6 COMPENSATION. The Board of Directors shall have the
----------- ------------
authority to set the compensation of directors and members of any committees
thereof. The directors and members of any committees thereof may also be paid
for their expenses, if any, of attendance at each meeting of the Board or any
committee thereof. No provision of these Bylaws shall be construed to preclude
any director or committee member from serving the Corporation in any other
capacity and receiving compensation therefor.
SECTION 3.7 NOMINATIONS OF DIRECTORS.
----------- ------------------------
(a) Only persons who are nominated in accordance with the procedures set
forth in these Bylaws shall be eligible for election as Directors. Nominations
of persons for election to the Board of Directors of the Corporation may be made
at any meeting of shareholders at which Directors are to be elected only (i) by
or at the direction of the Board of Directors or (ii) by any shareholder of the
Corporation entitled to vote for the election of Directors at the meeting who
complies with the notice procedures set forth in this Section. Each year the
President shall appoint a special committee of three directors to recommend to
the Board of Directors persons to be the management nominees for election as
directors. Based on such recommendations, the Board of Directors shall act as a
nominating committee to select the management nominees for election as
directors. Except in the case of a nominee substituted as a result of the death
or other incapacity of a management nominee, the nominating committee shall
deliver the names of its nominees to the Secretary at least 25 days prior to the
date of the annual meeting.
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(b) Nominations, other than those management nominees made by or at the
direction of the Board of Directors, shall be made by timely notice in writing
to the Secretary of the Corporation. To be timely, a shareholder's notice shall
be delivered or mailed to and received at the principal executive offices of the
Corporation not less than 30 days prior to the date of the meeting; provided,
however, that in the event that less than 40 days' notice or prior public
disclosure of the date of the meeting is given or made to shareholders, notice
by the shareholder to be timely must be so received not later than the close of
business on the 10th day following the day on which such notice of the date of
the meeting is mailed or such public disclosure was made. Such shareholder's
notice shall set forth (i) as to each person whom the shareholder proposes to
nominate for election or re- election as a director, all information relating to
such person as required to be disclosed in solicitation of proxies for election
of directors, or as otherwise required, in each case pursuant to Regulation 14A
under the Securities and Exchange Act of 1934, as amended (including such
person's written consent to being named in a proxy statement as a nominee and to
serving as a director if elected); and (ii) as to the shareholder giving the
notice (x) the name and address, as they appear on the books of the Corporation,
of such shareholder and (y) the class and number of shares of the Corporation's
capital stock that are beneficially owned by such shareholder. At the request
of the Board of Directors any person nominated by the Board of Directors for
election as a director shall furnish to the Secretary of the Corporation that
information required to be set forth in a shareholder's notice of nomination
which pertains to the nominee. No person shall be eligible for election as a
Director of the Corporation unless nominated in accordance with the provisions
of this Section. The officer presiding at the meeting shall, if the facts so
warrant, determine and declare to the meeting that a nomination was not made in
accordance with the provisions of this Section and, if he should so determine,
he shall so declare to the meeting and the defective nomination shall be
discharged.
SECTION 3.8 DIRECTORS EMERITUS. The Board of Directors shall have the
----------- ------------------
authority, at its discretion, to choose persons to serve as directors emeritus.
Such action, if taken, shall be taken at the regular meeting of the Board of
Directors next following the annual meeting of shareholders. No more than three
persons may serve as directors emeritus at any one time. Once elected, a
director emeritus shall serve a term of one year, but he may be re-elected by
the Board to serve additional terms. A director emeritus shall be allowed to
attend all regular and special meetings of the Board of Directors, and he may
actively participate in such meetings except that he shall not be allowed to
vote on any matters voted upon by the directors, nor shall he be counted for
purposes of determining if there is a quorum. A director emeritus may also
serve in an advisory capacity on committees, but again, he shall not be allowed
to vote. A director emeritus may be removed from office at any time, with or
without cause, by majority vote of the Board of Directors. A director emeritus
shall be entitled to reasonable compensation for his services as a director
emeritus and to reasonable expenses incurred in attending meetings, all as
determined by the Board of Directors, provided that no such compensation shall
be paid unless the direct members of the Board of Directors are likewise being
compensated, and provided further that such compensation shall be less than that
paid to the members of the Board of Directors. A director emeritus shall not
have the responsibility imposed upon a director, nor shall he be subject to any
liability imposed upon a director, or otherwise be deemed a director.
ARTICLE FOUR
MEETINGS OF THE BOARD OF DIRECTORS
SECTION 4.1 ANNUAL AND OTHER REGULAR MEETINGS. The annual regular
----------- ---------------------------------
meeting of the Board of Directors shall be held at the time and place of the
regularly scheduled meeting of the Board of Directors next following the annual
meeting of the shareholders. Regular meetings of the Board of Directors or any
committee thereof may be held between annual meetings without notice at such
time and at such place, within or without the State of Georgia, as from time to
time shall be determined by the Board or any committee thereof, as the case may
be.
SECTION 4.2 SPECIAL MEETINGS. Special meetings of Board of Directors
----------- ----------------
may be called for any purpose(s) by the Chairman of the Board or the President
or by written request of any two or more directors then in office. Special
meetings of any committee of the Board of Directors may be held on the date set
at the previous meeting of the committee or when called by its chairman or by a
majority of its members. Any such special meetings shall be held at such date,
time and place, within or without the State of Georgia, as shall be communicated
in the notice of the meeting.
SECTION 4.3 NOTICE. Notice of any special meeting of the Board of
----------- ------
Directors or any committee thereof, setting forth the date, time and place of
the meeting, shall be delivered to each director or committee member, addressed
to him at his residence or usual place of business, or by telephone, telegram,
cable, telecommunication, teletype, facsimile transmission or personal delivery
not later than the second business day immediately preceding the date of the
meeting. Neither the business to be transacted at, nor the purpose of, any
regular or special meeting need be specified in the notice or any waiver of
notice.
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Notice of any meeting need not be given to any director or committee
member who shall attend such meeting in person (except when the person attends a
meeting for the express purpose of objecting, at the beginning of the meeting,
to the transaction of any business because the meeting is not properly called or
convened) or who shall waive notice thereof, before or after such meeting, in a
signed writing.
SECTION 4.4 QUORUM AND ADJOURNMENT. At all meetings of the Board of
----------- ----------------------
Directors or any committee thereof, the presence of a majority of the directors
or committee members then in office shall constitute a quorum for the
transaction of business. In the absence of a quorum or for any other reason, a
majority of the directors or committee members present thereat may adjourn the
meeting from time to time. Notice of any adjourned meeting shall be given to
each director or committee member who was not present at the time of adjournment
and, unless the time and place of the adjourned meeting are announced at the
time of adjournment, to the other directors or committee members. At any
reconvened meeting following such adjournment at which a quorum shall be
present, any business may be transacted which might have transacted at the
meeting as originally notified.
SECTION 4.5 VOTING. At all meetings of the Board of Directors or any
----------- ------
committee thereof, each director or committee member present shall have one
vote. The act of a majority of the directors or committee members present at
any meeting, in which there is a quorum, shall be the act of the Board of
Directors or any committee thereof, except as otherwise provided by statute, the
Articles of Incorporation or these Bylaws. On any question on which the Board
of Directors or any committee thereof shall vote, the names of those voting and
their votes shall be entered into the minutes of the meeting when any member of
the Board of Directors or any committee member present at the meeting so
requests.
SECTION 4.6 PRESUMPTION OF ASSENT. Any director or committee member
----------- ---------------------
present at a meeting of the Board of Directors or any committee thereof shall be
presumed to have assented to any action taken at the meeting unless his dissent
or abstention is entered in the minutes of the meeting or unless he files, at
the meeting or immediately after its adjournment, his written dissent to the
action with the person acting as secretary of the meeting. This right to
dissent shall not be available to a director or committee member who voted in
favor of the action.
SECTION 4.7 MEETING BY MEANS OF CONFERENCE TELEPHONE OR SIMILAR
----------- ---------------------------------------------------
TELECOMMUNICATIONS EQUIPMENT. Members of the Board of Directors or any
- ----------------------------
committee thereof may participate in a meeting of the Board or any committee by
means of conference telephone or similar telecommunications equipment, by means
of which all persons participating in the meeting can hear each other.
Participation in the meeting in this matter shall constitute presence in person
at such meeting.
SECTION 4.8 ACTION BY DIRECTORS WITHOUT A MEETING. Any action required
----------- -------------------------------------
or permitted to be taken at any meeting of the Board of Directors or any
committee thereof may be taken without a meeting if a written consent, setting
forth the action so taken, is signed by all the directors or all the committee
members, as the case may be, and filed with the minutes of the proceedings of
the Board or the committee. Such consent will have the same force and effect as
a unanimous vote of the Board of Directors or the committee.
SECTION 4.9 CONDUCT OF MEETINGS. All meetings of the Board of Directors
----------- -------------------
or any committee thereof shall be conducted in accordance with such rules and
procedures as the directors may determine subject to the requirements of statute
and, as to matters not governed by such rules and procedures, as the presiding
officer of such meeting shall determine. The presiding officer of any meeting
of the Board of Directors shall be the Chairman of the Board or, in his absence,
the President, or, in the absence of both, such person as designated by the
Board of Directors. The Secretary, or in his absence, a person designated by
the presiding officer, shall act as secretary of the meeting.
SECTION 4.10 RESIGNATION. Any director may resign at any time by giving
------------ -----------
written notice thereof to the Corporation addressed to the Chairman of the Board
or the President. Unless otherwise specified, such resignation shall take
effect upon delivery of such notice unless some other date is specified in such
notice. Acceptance of any resignation shall not be necessary to make it
effective unless the resignation is tendered subject to such acceptance. A
director's absence from more than three consecutive regular meetings of the
Board of Directors, unless excused by resolution of the Board of Directors,
shall be deemed to constitute the resignation of such a director, effective once
such resignation is accepted by resolution of the Board of Directors.
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ARTICLE FIVE
BOARD COMMITTEES
SECTION 5.1 COMMITTEES.
----------- ----------
(a) The Board of Directors may, by the vote of a majority of the
directors then in office, establish committees, including standing or special
committees, which shall have such duties as are authorized by the Board or by
these Bylaws. Committee members, and the chairman of each committee, shall be
appointed by the Board of Directors. If an executive committee or similar
committee is designated by the Board of Directors, the President shall serve as
a member of that committee. The presiding officer of any committee meeting
shall be the chairman of the committee and the chairman shall designate a person
to act as secretary of the committee meeting.
(b) The Board of Directors may, by the vote of majority of the directors
then in office, remove any member of any committee, with or without cause, or
fill any vacancies in any committee, and dissolve or discontinue any committee.
(c) The designation of any committee under this Article and the
delegation of authority thereto shall not operate to relieve the Board of
Directors, or any director, of any responsibility imposed by statute.
SECTION 5.2 MINUTES. Each committee shall keep minutes of its actions
----------- -------
and proceedings. Any action taken by the Board of Directors with respect to the
actions or proceedings of any committee shall be entered into the minutes of the
Board of Directors.
ARTICLE SIX
OFFICERS
SECTION 6.1 OFFICERS. The officers of the Corporation shall include a
----------- --------
President, a Secretary, and a Treasurer. The Board of Directors may also
designate the Chairman of the Board as an officer of the Corporation. The Board
of Directors may also designate one or more Vice Presidents as Executive Vice
President or Senior Vice President. The Board of Directors may also elect or
authorize the appointment of such other officers or assistant officers as the
business of the Corporation may require. In addition to the duties and powers
enumerated in this Article, the officers of the Corporation shall perform such
other duties and exercise such further powers as the Board of Directors may
authorize or determine from time to time. Any two or more of the above offices
may be held by the same persons except as prohibited by statute, but no officers
shall execute, acknowledge or verify an instrument in more than one capacity if
the instrument is required by statute or the Articles of Incorporation to be
executed, acknowledged or verified by two or more officers. No officer need be
a shareholder of the Corporation.
SECTION 6.2 COMPENSATION. The salaries of the officers of the
----------- ------------
Corporation shall be fixed by the Board of Directors. No officer shall be
prevented from receiving compensation by reason of also being a director of the
Corporation.
SECTION 6.3 ELECTION AND TERM OF OFFICE. The officers of the
----------- ---------------------------
Corporation shall be elected annually by the Board of Directors at the first
meeting of the Board of Directors held after each annual meeting of the
shareholders. If the election of officers is not held at such meeting, such
election shall be held as soon as possible thereafter. Each officer of the
Corporation shall hold office until his successor is elected or until his
earlier resignation, death or removal, or the termination of his office. The
election or appointment of an officer, employee or agent shall not itself create
contractual rights. The Board of Directors may authorize the Corporation to
enter into an employment contract or other arrangement with any officer; but no
such contract shall impair the rights of the Board of Directors to remove any
officer at any time in accordance with this Article.
SECTION 6.4 REMOVAL. Any officer may be removed from office at any
----------- -------
time, with or without cause, by the vote of a majority of the directors then in
office whenever in their judgement, the best interest of the Corporation will be
served thereby. Any such removal shall be without prejudice to the contract
rights, if any, of the officer so removed.
SECTION 6.5 VACANCY. Any vacancy in an office resulting from any cause
----------- -------
may be filled by the Board of Directors in the manner prescribed by these
Bylaws.
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SECTION 6.6 CHAIRMAN AND VICE CHAIRMAN OF THE BOARD. The Chairman of
----------- ---------------------------------------
the Board shall be elected annually by the Board of Directors from among its
members. The Chairman shall preside at all meetings of the Board and shall
perform all of the duties and shall have all the powers commonly incident to his
office or delegated to him by the Board of Directors, or which are or may at any
time be authorized or required by statute or these Bylaws. Unless a Vice
President has been elected and has as one of his duties to act in the
President's stead in the event of his absence or inability to serve, then the
Chairman of the Board, in the event of the President's absence, inability to
serve or refusal to serve, shall act in the President's stead and shall have all
the powers of and be subject to all the restrictions of the President until such
time as the President resumes his duties, a new President is chosen, or an
officer of the Corporation is selected by the Board of Directors to perform the
duties of the President. The Board of Directors also shall elect annually a Vice
Chairman who, in the absence of the Chairman, shall preside at all meetings of
the Board and shall perform all of the duties and have all of the powers of the
Chairman.
SECTION 6.7 PRESIDENT. The President shall be the Chief Executive
----------- ---------
Officer of the Corporation and shall have general responsibility for the
management and supervision of the business of the Corporation and corporate
policy. The President shall have administrative authority over the business of
the Corporation, and shall have such further authority and perform such other
duties as may be delegated to him by the Board of Directors.
SECTION 6.8 VICE PRESIDENT. Each Executive Vice President, each Senior
----------- --------------
Vice President and each other Vice President shall have such powers and perform
such duties as may be delegated to him by the Board of Directors or delegated by
the President. In the absence or disability of the President, those powers,
duties and functions of the President may be temporarily performed and exercised
by such one of the Executive Vice Presidents, Senior Vice Presidents or the
other Vice Presidents as shall be expressly designated by the Board of
Directors. When more than one Vice President is elected, the Board may specify
an order of seniority among such Vice Presidents.
SECTION 6.9 SECRETARY. The Secretary shall attend all meetings of the
----------- ---------
Board of Directors and all meetings of the shareholders and record all votes and
the minutes of all proceedings in books to be kept for that purpose, and shall
perform like duties for any Board committees when required. The Secretary shall
give, or cause to be given, any notice required to be given of any meetings of
the shareholders, of the Board of Directors or any Board committees when
required, and shall perform such other duties as may be prescribed by the Board
of Directors or the President, under whose supervision the Secretary shall be.
The Secretary shall cause to be kept such books and records as the Board of
Directors or the President may require and shall cause to be prepared, recorded,
transferred, issued, sealed and cancelled certificates of stock as required by
the transactions of the Corporation and its shareholders. The Secretary shall
attend to such other correspondence and shall perform such other duties as may
be incident to such office or as may be assigned to him by the Board of
Directors or the President. The Secretary shall have custody of the seal of the
Corporation, shall have the authority to affix the same to any instrument, the
execution of which on behalf of the Corporation under its seal is duly
authorized, and shall attest the same by his signature whenever required. The
Board of Directors may give general authority to any other officer to affix the
seal of the Corporation and to attest the same by his signature.
SECTION 6.10 TREASURER. The Treasurer shall have charge of and be
------------ ---------
responsible for all funds, securities, receipts and disbursements of the
Corporation, and shall deposit, or cause to be deposited, in the name of the
Corporation, all monies or other valuable effects, in such banks, trust
companies or other depositories as shall from time to time be selected by the
Board of Directors. He shall render to the President and to the Board of
Directors, whenever requested, an account of the financial condition of the
Corporation, and in general, he shall perform all such other duties as may be
delegated to him by the Board of Directors or the President.
SECTION 6.11 ASSISTANT VICE PRESIDENT, ASSISTANT SECRETARY AND
---------------------------------------------------------------
ASSISTANT TREASURER. The Assistant Vice President, Assistant Secrtary and
- -------------------
Assistant Treasurer, in the absence or disability of any Vice President, the
Secretary or the Treasurer, respectively, shall perform the duties and
exercise the powers of those offices, and, in general, they shall perform such
other duties as shall be delegated to them by the Board of Directors or by the
person appointing them. Specifically, the Assistant Secretary may affix the
seal of the Corporation to all necessary documents and attest the signature of
any officer of the Corporation.
8
<PAGE>
SECTION 6.12 DELEGATION OF AUTHORITY. In the case of the absence of any
------------ -----------------------
officer of the Corporation or for any other reason that the Board of Directors
may deem sufficient, the Board of Directors may delegate, for the time being,
any or all of the powers or duties of such officer to any other officer or to
any director.
ARTICLE SEVEN
CAPITAL STOCK
SECTION 7.1 STOCK CERTIFICATES. Each shareholder shall be entitled to a
----------- ------------------
certificate representing the number of shares of capital stock of the
Corporation owned by such person. The certificate shall be in such form as
approved by the Board of Directors of the Corporation. Each certificate shall
be signed by the President or a Vice President and by the Secretary or an
Assistant Secretary and shall be sealed with the seal of the Corporation or a
facsimile thereof. The signatures upon a certificate may be facsimiles. In
case any officer who shall have signed or whose facsimile signature has been
placed upon a certificate shall have ceased to be such officer of the
Corporation before such certificate shall have been issued by the Corporation,
such certificate may nevertheless be issued as though the person who signed such
certificate had not ceased to be such officer.
SECTION 7.2 STOCK RECORDS. Each certificate for shares of Stock in the
----------- -------------
Corporation shall be numbered or otherwise identified in the stock records of
the Corporation. The Corporation shall keep stock records which shall show the
names and addresses of the persons to whom the shares are issued, with the
number of shares and date of issuance.
SECTION 7.3 STOCK TRANSFERS. Transfers of shares of stock of the
----------- ---------------
Corporation shall be made on the stock transfer books of the Corporation only
when authorized by the person named in the certificate, or by his legal
representative, who shall furnish written evidence of such authority, or by his
attorney authorized by a duly executed power of attorney and filed with the
Corporation. Such transfer shall be made only upon surrender of the certificate
therefor, or in the case of a certificate alleged to have been lost, stolen or
destroyed, upon compliance with the provisions of this Article and as may
otherwise be provided by statute. The Corporation shall be entitled to
recognize the exclusive right of a person registered on its books as the owner
of shares to receive dividends and to vote as such owner, and for all other
purposes, and shall not be bound to recognize any equitable or other claim to or
interest in such share or shares on the part of any other person, whether or not
it shall have express or other notice thereof, except as otherwise provided by
law. No transfer shall be valid, except between the parties thereto, until such
transfer shall have been made upon the books of the Corporation as herein
provided. The Board of Directors shall have the power and authority to make
such other rules and regulations concerning the issue, transfer and registration
of certificates of the Corporation's stock as it may deem appropriate.
SECTION 7.4 RECORD DATES. The Board of Directors may fix, in advance, a
----------- ------------
date as the record date for the purpose of determining shareholders entitled to
notice of, or to vote at, any meeting of shareholders or any adjournment
thereof, or shareholders entitled to receive payment of any dividend of other
distribution or allotment of any rights, or entitled to exercise any rights in
respect of any change, conversion or exchange of stock, or in order to make a
determination of shareholders for any other purpose. Such date in any case
shall not be more than 70 days, and in the case of the meeting of shareholders,
not less than 10 days, prior to the date on which the particular action,
requiring the determination of shareholders is to be taken. Only those
shareholders of record on the dates so fixed shall be entitled to any of the
foregoing rights, notwithstanding the transfer of any such stock on the books of
the Corporation after any such record date fixed by the Board of Directors.
SECTION 7.5 TRANSFER AGENTS AND REGISTRARS. The Corporation may have
----------- ------------------------------
one or more transfer agents and one or more registrars of its stock whose
respective duties the Board of Directors or Secretary may, from time to time,
determine. No certificate of stock shall be valid until countersigned by a
transfer agent, if the Corporation has a transfer agent, or until registered by
the registrar, if the Corporation has a registrar. The duties of transfer agent
and registrar may be combined.
SECTION 7.6 LOST CERTIFICATES. The Corporation may issue a new
----------- -----------------
certificate of stock in place of any certificate previously issued and alleged
to have been lost, stolen or destroyed, and the Corporation may require the
owner of the lost, stolen or destroyed certificate, or his legal representative
to give the Corporation a bond sufficient to indemnify it against any claim that
may be made against it on account of the alleged loss, theft or destruction of
any such certificate or the issuance of such new certificate and any other
conditions as may otherwise be provided by statute.
9
<PAGE>
ARTICLE EIGHT
GENERAL PROVISIONS
SECTION 8.1 REFERENCES. Whenever in these Bylaws reference is made to
----------- ----------
an Article or Section number, such reference is to the number of an Article or
Section of the Bylaws. Whenever in the Bylaws reference is made to the Bylaws,
such reference is to these Bylaws of the Corporation as the same may be amended
from time to time. Whenever in the Bylaws reference is made to the Articles of
Incorporation, such reference is to the Articles of Incorporation of the
Corporation as the same may be amended from time to time.
SECTION 8.2 REFERENCE TO GENDER. Whenever in the Bylaws reference is
----------- -------------------
made to the masculine gender, such reference shall where the context so requires
be deemed to include the feminine gender and the neuter gender, and the Bylaws
shall be read accordingly.
SECTION 8.3 LEGAL RESTRICTIONS. All matters covered in these Bylaws
----------- ------------------
shall be subject to such restrictions as shall be imposed on the Corporation by
applicable state and federal statutes, rules and regulations.
SECTION 8.4 SEAL. The seal of the Corporation shall be in such form as
----------- ----
the Board of Directors may determine from time to time. The seal may be used by
causing it or by facsimile thereof to be impressed or affixed or reproduced or
otherwise. If it is inconvenient to use such a seal at any time, the signature
of the Chairman of the Board, President, Secretary or an Assistant Secretary of
the Corporation, followed by the word "Seal" shall be deemed the seal of the
Corporation.
SECTION 8.5 FISCAL YEAR. The fiscal year of the Corporation shall be
----------- -----------
fixed by resolution of the Board of Directors and may be changed from time to
time.
SECTION 8.6 VOTING SHARES IN SUBSIDIARIES. In the absence of other
----------- -----------------------------
arrangements by the Board of Directors, shares of stock issued by another
corporation and owned or controlled by the Corporation, whether in a fiduciary
capacity or otherwise, may be voted by the President of the Corporation or by
such other person as the Board of Directors by resolution shall so designate,
and such person may execute the aforementioned powers by executing proxies and
written waivers and consents on behalf of the Corporation.
SECTION 8.7 INSPECTION OF BOOKS. The Board of Directors shall have the
----------- -------------------
power to determine which accounts and books of the Corporation, if any, shall be
opened to the inspection of shareholders, except such as may by statute be
specifically opened to inspection, and shall have the power to affix reasonable
rules and regulations not in conflict with the applicable statute for the
inspection of accounts and books which by statute or by the determination of the
Board of Directors shall be opened to inspection, and the shareholders' rights
in this respect are and shall be restricted and limited accordingly.
SECTION 8.8 CONTRACTS. No contract or other transaction between
----------- ---------
Corporation and any other corporation, partnership or other entity shall be
affected or invalidated by the fact that a shareholder, director or officer of
the Corporation is a shareholder, director, partner or other officer of, or is
interested in, such other corporation, partnership or other entity, and no
contract or other transaction between Corporation and any other person shall be
affected or invalidated by the fact that a shareholder, director or officer of
the Corporation is a party to, or interested in, such contract or transaction;
provided that, in each such case, the nature and extent of the interest of such
shareholder, director or officer in such contract or other transaction or the
fact that such shareholder, director or officer is a shareholder, director,
officer, partner or other party of such other corporation, partnership, entity
or other person is known to the Board of Directors or is disclosed at the
meeting of the Board of Directors at which such contract or the transaction is
authorized.
SECTION 8.9 AMENDMENT OF BYLAWS. These Bylaws may be altered, amended
----------- -------------------
or repealed, or new Bylaws adopted, pursuant to the provisions of the Articles
of Incorporation.
10
<PAGE>
ARTICLE NINE
INDEMNIFICATION
SECTION 9.1 INDEMNIFICATION.
----------- ---------------
A. Each person who is or was a director or officer of the Corporation, and
each person who is or was a director or officer of the Corporation who at
request of the Corporation is serving or has served as an officer, director,
partner, agent, joint venturer or trustee of another corporation, partnership,
joint venture, trust or other enterprise, shall be indemnified by the
Corporation against those expenses (including attorneys' fees), judgments, fines
and amounts paid in settlement which are allowed to be paid or reimbursed by the
Corporation under the laws of the State of Georgia and which are actually and
reasonably incurred in connection with any action, suit or proceeding, pending
or threatened, whether civil, criminal, administrative or investigative, in
which such person may be involved by reason of his being or having been a
director or officer of this Corporation or as an officer, director, partner,
agent, joint venturer or trustee of such other enterprise.
B. Expenses incurred in defending a criminal or civil action, suit, or
proceeding may be paid by the corporation in advance of the final disposition of
such action, suit, or proceeding as authorized by the Board of Directors in the
specific case upon receipt of an undertaking by or on behalf of the Director,
office, employee, or agent to repay such amount unless it shall ultimately be
determined that he is entitled to be indemnified by the Corporation as
authorized in this section.
C. In any instance where the laws of the State of Georgia permit
indemnification or advancement of expenses to be provided to persons who are or
have been an officer or director the Corporation or who are or have been an
officer, director, partner, agent, joint venturer trustee of any such other
enterprise only on a determination that certain specified standards of conduct
have been met, upon application for indemnification, or advancement of expenses
by any such person the Corporation shall promptly cause such determination to be
made (i) by the Board of Directors by majority vote of a quorum consisting of
directors not at the time parties to such proceeding; (ii) if such a quorum
cannot be obtained, then by majority vote of a committee duly designated by the
Board of Directors (in which designation directors who are parties participate),
consisting solely of two (2) or more directors not at the time parties to such
proceeding; (iii) by special legal counsel selected by the Board of Directors
cannot be obtained under (i) and a committee cannot be designated under (ii),
selected by majority vote of the full Board of Directors (in which selection
directors who are parties participate); or (iv) by the shareholders, but shares
owned or voted under control of the directors who are at the time parties to
such proceeding may not be voted with respect to such determination.
D. As a condition to any such right of indemnification or advancement of
expenses, the Corporation may require that it be permitted to participate in the
defense of any such action or proceeding through legal counsel designated by the
Corporation and at the expense of the Corporation.
E. The Corporation may purchase and maintain insurance on behalf of any such
persons, whether or not the Corporation would have the power to indemnify such
officers and directors against any liability under the laws of the State of
Georgia. If any expenses or other amounts are paid by way of indemnification,
other than by court order, action by shareholders or by an insurance carrier,
the Corporation shall provide notice of such payment to the shareholders in
accordance with the provisions of the laws of the State of Georgia.
F. The indemnification and advancement of expenses provided in this Article
shall not b deemed exclusive of any other rights, in respect to indemnification
or otherwise, to which the persons seeking indemnification or advancement of
expenses may be entitled under any bylaws, resolution, agreement, statute or
otherwise.
G. The rights to indemnification and advancement of expenses provided by
this Article shall be deemed a contract between the Corporation and each such
person and any modification or repeal of this Article shall not affect any right
or obligation then existing with respect to any stated fact then or previously
existing or any action, or proceeding previously or thereafter brought or
threatened based in whole or in part of any such state of facts. Such contract
right may not be modified or repealed without consent of each such person. The
rights to indemnification and advancement of expenses provided by this Article
shall continue to a person entitled to indemnification and advancement of
expenses provided by this Article shall continue to a person entitled to
indemnification hereunder who has ceased to be a director or office and shall
inure to the benefit of the heirs, executors, or administrators of each such
person.
H. Notwithstanding anything contained herein to the contrary, Article 8 is
intended to provide indemnification to each director and officer of the
Corporation to the fullest extent authorized by the Code, as the same exists or
may hereafter be amended (but, in the case of any such amendment, only to the
extent that such amendment permits the Corporation to provide broader rights
than said statute permitted the Corporation to provide prior thereto).
11
<PAGE>
EXHIBIT 6.2
LINE OF CREDIT AGREEMENT FROM PEOPLES BANK OF FANNIN COUNTY TO THE ORGANIZERS
<TABLE>
<CAPTION>
FORM OF PROMISSORY NOTE
================================================================================================================
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Principal Loan Date Maturity Loan No. Call Collateral Account Officer Initials
$350,100.00 04-18-96 04-18-97 xxxxxxxxx 06 0100 xxxxxxxxx 003
================================================================================================================
</TABLE>
References in the shaded area are for Lender's use only and do not limit the
applicability of this document to any particular loan or item.
<TABLE>
<S> <C> <C> <C>
BORROWER: WILLIAM C. SEATON, (SSN: 256- LENDER: PEOPLES BANK OF FANNIN
74-5747) J. WAYNE GARNER COUNTY
(SSN: ###-##-####), PHILLIP MAIN OFFICE
KAUFFMAN (SSN: ###-##-####), PO BOX 1749
LESTER H. HARMON (SSN: 416- BLUE RIDGE, GA 30513
58-9730), JOHN B. BOHANNON
(SSN: ###-##-####), WILLIAM P.
JOHNSON (SSN: ###-##-####),
ANN C. CARTER (SSN: 255-78-
7077), CHARLES J. PUCKETT
(SSN: ###-##-####), MARK S.
SWINDLE (SSN: ###-##-####) and
STEVE R. ADAMS (SSN: 259-86-
4678).
dba: ASSOCIATION FOR THE
FORMATION OF PEOPLES
BANK OF WEST GEORGIA,
CARROLLTON, GEORGIA 30117
</TABLE>
================================================================================
<TABLE>
<S> <C> <C>
Principal Amount: $350,100.00 Initial Rate: 8.250% Date of Note: April 18, 1996
</TABLE>
PROMISE TO PAY. WILLIAM C. SEATON, J. WAYNE GARNER, PHILLIP KAUFFMAN, LESTER
H. HARMON, JOHN B. BOHANNON, WILLIAM P. JOHNSON, ANN C. CARTER, CHARLES J.
PUCKETT, MARK S. SWINDLE and STEVE R. ADAMS ("Borrower") promise to pay to
PEOPLES BANK OF FANNIN COUNTY ("Lender"), or order, in lawful money of the
United States of America, the principal amount of Three Hundred Fifty Thousand
One Hundred & 00/100 Dollars ($350,100.00) or so much as may be outstanding,
together with interest on the unpaid outstanding principal balance of each
advance. Interest shall be calculated from the date of each advance until
repayment of each advance. The interest rate will not increase above 16.000%.
PAYMENT. BORROWER WILL PAY THIS LOAN ON DEMAND, OR IF NO DEMAND IS
MADE, IN ONE PAYMENT OF ALL OUTSTANDING PRINCIPAL PLUS ALL ACCRUED UNPAID
INTEREST ON APRIL 18, 1997. IN ADDITION, BORROWER WILL PAY REGULAR QUARTERLY
PAYMENTS OF ACCRUED UNPAID INTEREST BEGINNING JULY 18, 1996, AND ALL SUBSEQUENT
INTEREST PAYMENTS ARE DUE ON THE SAME DAY OF EACH QUARTER AFTER THAT. Interest
on this Note is computed on a 365/360 simple interest basis; that is, by
applying the ratio of the annual interest rate over a year of 360 days,
multiplied by the outstanding principal balance, multiplied by the actual number
of days the principal balance is outstanding. Borrower will pay Lender at
Lender's address shown above or at such other place as Lender may designate in
writing. Unless otherwise agreed or required by applicable law, payments will
be applied first to accrued unpaid interest, then to principal, and any
remaining amount to any unpaid collection costs and late charges.
1
<PAGE>
VARIABLE INTEREST RATE. The interest rate on this Note is subject to change
from time to time based on changes in an independent index which is the
Prime rate as published in the Wall Street Journal. When a range of rates has
been published, the higher of the rates will be used (the "Index"). The Index
is not necessarily the lowest rate charged by Lender on its loans. If the Index
becomes unavailable during the term of this loan, Lender may designate a
substitute index after notice to Borrower. Lender will tell Borrower the
current Index rate upon Borrower's request. Borrower understands that Lender
may make loans based on other rates as well. The interest rate change will not
occur more often than each Day. THE INDEX CURRENTLY IS 8.250% PER ANNUM. THE
INTEREST RATE TO BE APPLIED TO THE UNPAID PRINCIPAL BALANCE OF THIS NOTE WILL BE
AT A RATE EQUAL TO THE INDEX, ADJUSTED IF NECESSARY FOR THE MAXIMUM RATE
LIMITATION DESCRIBED BELOW, RESULTING IN AN INITIAL ANNUAL RATE OF SIMPLE
INTEREST OF 8.250%. NOTWITHSTANDING ANY OTHER PROVISION OF THIS NOTE, THE
VARIABLE INTEREST RATE OR RATES PROVIDED FOR IN THIS NOTE WILL BE SUBJECT TO THE
FOLLOWING MAXIMUM RATE. NOTICE: Under no circumstances will the interest rate
on this Note be more than (except for any higher default rate shown below) the
lesser of 16.000% per annum or the maximum rate allowed by applicable law.
PREPAYMENT. Borrower agrees that all loan fees and other prepaid finance
charges are earned fully as of the date of the loan and will not be
subject to refund upon early payment (whether voluntary or as a result of
default), except as otherwise required by law. Except for the foregoing,
Borrower may pay without penalty all or a portion of the amount owed earlier
than it is due. Early payments will not, unless agreed to by Lender in writing,
relieve Borrower of Borrower's obligation to continue to make payments of
accrued unpaid interest. Rather, they will reduce the principal balance due.
LATE CHARGE. If a payment is 10 DAYS OR MORE LATE, Borrower will be charged
5.000% OF THE UNPAID PORTION OF THE REGULARLY SCHEDULED PAYMENT OR
$100.00, WHICHEVER IS LESS, REGARDLESS OF ANY PARTIAL PAYMENTS LENDER HAS
RECEIVED.
DEFAULT. Borrower will be in default if any of the following happens:
(a) Borrower fails to make any payment when due. (b) Borrower breaks any
promise Borrower has made to Lender, or Borrower fails to comply with or to
perform when due any other term, obligation, covenant, or condition contained in
this Note or any agreement related to this Note, or in any other agreement or
loan Borrower has with Lender. (c) Any representation or statement made or
furnished to Lender by Borrower or on Borrower's behalf is false or misleading
in any material respect either now or at the time made or furnished. (d)
Borrower dies or becomes insolvent, a receiver is appointed for any part of
Borrower's property, Borrower makes an assignment for the benefit of creditors,
or any proceeding is commenced either by Borrower or against Borrower under any
bankruptcy or insolvency laws. (e) Any creditor tries to take any of Borrower's
property on or in which Lender has a lien or security interest. This includes a
garnishment of any of Borrower's accounts with Lender. (f) Any of the events
described in this default section occurs with respect to any guarantor of this
Note. (g) A material adverse change occurs in Borrower's financial condition,
or Lender believes the prospect of payment or performance of the indebtedness is
impaired. (h) Lender in good faith deems itself insecure.
LENDER'S RIGHTS. Upon default, Lender may declare the entire unpaid
principal balance on this Note and all accrued unpaid interest immediately due,
without notice, and then Borrower will pay that amount. Upon default, including
failure to pay upon final maturity, Lender, at its option, may also, if
permitted under applicable law, increase the variable interest rate on this Note
to 16.000% per annum. The interest rate will not exceed the maximum rate
permitted by applicable law. Lender may hire or pay someone else to help
collect this Note if Borrower does not pay. Borrower also will pay Lender that
amount. This includes, subject to any limits under applicable law, Lender's
costs of collection, including court costs and fifteen percent (15%) of the
principal plus interest accrued as attorneys' fees, if any sums owing under this
Note are collected by or through an attorney-at-law, whether or not there is a
lawsuit, and legal expenses for bankruptcy proceedings (including efforts to
modify or vacate any automatic stay or injunction), appeals, and any anticipated
post-judgment collection services. If not prohibited by applicable law,
Borrower also will pay any court costs, in addition to all other sums provided
by law. THIS NOTE HAS BEEN DELIVERED TO LENDER AND ACCEPTED BY LENDER IN THE
STATE OF GEORGIA. THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF GEORGIA.
RIGHT OF SETOFF. Borrower grants to Lender a contractual possessory
security interest in, and hereby assigns, conveys, delivers, pledges, and
transfers to Lender all Borrower's right, title and interest in and to,
Borrower's accounts with Lender (whether checking, savings, or some other
account), including without limitation all accounts held jointly with someone
else and all accounts Borrower may open in the future, excluding however all IRA
and Keogh accounts, and all trust accounts for which the grant of a security
interest would be prohibited by law. Borrower authorizes Lender, to the extent
permitted by applicable law, to charge or setoff all sums owing on this Note
against any and all such accounts, and, at Lender's option, to administratively
freeze all such accounts to allow Lender to protect Lender's charge and setoff
rights provided in this paragraph.
2
<PAGE>
LINE OF CREDIT. This Note evidences a straight line of credit. Once
the total amount of principal has been advanced, Borrower is not entitled to
further loan advances. Advances under this Note may be requested orally by
Borrower or by an authorized person. All oral requests shall be confirmed in
writing on the day of the request. All communications, instructions, or
directions by telephone or otherwise to Lender are to be directed to Lender's
office shown above. The following party or parties are authorized to request
advances under the line of credit until Lender receives from Borrower at
Lender's address shown above written notice of revocation of their authority:
ASSOCIATION FOR THE FORMATION OF PEOPLES BANK OF WEST GEORGIA. Borrower agrees
to be liable for all sums either: (a) advanced in accordance with the
instructions of an authorized person or (b) credited to any of Borrower's
accounts with Lender. The unpaid principal balance owing on this Note at any
time may be evidenced by endorsements on this Note or by Lender's internal
records, including daily computer print-outs. Lender will have no obligation to
advance funds under this Note if: (a) Borrower or any guarantor is in default
under the terms of this Note or any agreement that Borrower or any guarantor has
with Lender, including any agreement made in connection with the signing of this
Note; (b) Borrower or any guarantor ceases doing business or is insolvent; (c)
any guarantor seeks, claims, or otherwise attempts to limit, modify or revoke
such guarantor's guarantee of this Note or any other loan with Lender; (d)
Borrower has applied funds provided pursuant to this Note for purposes other
than those authorized by Lender; or (e) Lender in good faith deems itself
insecure under this Note or any other agreement between Lender and Borrower.
GENERAL PROVISIONS. This Note is payable on demand. The inclusion of
specific default provisions or rights of Lender shall not preclude Lender's
right to declare payment of this Note on its demand. Lender may delay or forgo
enforcing any of its rights or remedies under this Note without losing them.
Borrower and any other person who signs, guarantees or endorses this Note, to
the extent allowed by law, waive presentment, demand for payment, protest and
notice of dishonor. Upon any change in the terms of this Note, and unless
otherwise expressly stated in writing, no party who signs this Note, whether as
maker, guarantor, accommodation maker or endorser, shall be released from
liability. All such parties waive any right to require Lender to take action
against any other party who signs this Note as provided in O.C.G.A. (S) 10-7-24
and agree that Lender may renew or extend (repeatedly and for any length of
time) this loan, or release any party or guarantor or collateral; or impair,
fail to realize upon or perfect Lender's security interest in the collateral;
and take any other action deemed necessary by Lender without the consent of or
notice to anyone. All such parties also agree that Lender may modify this loan
without the consent of or notice to anyone other than the party with whom the
modification is made. The obligations under this Note are joint and several.
IN WITNESS WHEREOF, THIS NOTE HAS BEEN SIGNED AND SEALED BY THE UNDERSIGNED,
WHO ACKNOWLEDGES A COMPLETED COPY HEREOF, ON THE ABOVE DATE
BORROWER:
/s/ William C. Seaton (SEAL) /s/ J. Wayne Garner (SEAL)
- --------------------- -------------------
WILLIAM C. SEATON J. WAYNE GARNER
/s/ Phillip Kauffmann (SEAL) /s/ Lester H. Harmon (SEAL)
- -------------------- ---------------------
PHILLIP KAUFFMANN LESTER H. HARMON
/s/ John B. Bohannon (SEAL) /s/ William P. Johnson (SEAL)
- -------------------- ----------------------
JOHN B. BOHANNON WILLIAM P. JOHNSON
/s/ Ann C. Carter (SEAL) /s/ Charles J. Puckett (SEAL)
- ----------------- ----------------------
ANN C. CARTER CHARLES J. PUCKETT
/s/ Mark S. Swindle (SEAL) /s/ Steve R. Adams (SEAL)
- ------------------- ------------------
MARK S. SWINDLE STEVE R. ADAMS
3
<PAGE>
EXHIBIT 6.3
LEASE AGREEMENT WITH RESPECT TO TEMPORARY HEADQUARTERS AND
ASSIGNMENT AND ASSUMPTION WITH RESPECT THERETO
February 2, 1995
THIS LEASE, made this 2nd day of February, 1996, by and between Emory Lee
Cole & Melody W. Dunn, first party, (hereinafter called "Landlord"); and
Philip Kauffman, second party, (hereinafter called "Tenant")
WITNESSETH:
Premises: 1. The Landlord, for and in consideration of the rents, covenants,
agreements, and stipulations hereinafter mentioned,reserved, and
contained, to be paid, kept and performed by the Tenant, has
leased and rented, and by these presents does lease and rent, unto
the said Tenant, and said Tenant hereby agrees to lease and take
upon the terms and conditions which hereinafter appear, the
following described property (hereinafter called premises), to wit:
and being known as 516 Bankhead Highway, Carrollton, Georgia
30117. No easement for light or air is included in the premises.
Term: 2. To have and to hold the same for a term of _____________
beginning on the 1st day of April, 1996, and ending on the 31st
day of March, 1998, at midnight, unless sooner terminated as
hereinafter provided with right of renewal for an additional
twelve month period at the same rate.
Rental: 3. Tenant agrees to pay Landlord, by payment to Emory Lee Cole,
promptly on the first day of each month in advance, during the term
of this lease, a monthly rental of Two Thousand Five Hundred and
00/10 ($2,500.00) dollars. Tenant agrees to pay Landlord a Security
Deposit of $2,500.00 prior to occupancy.
Agent's 4. [OMITTED]
Commission
Purchase 5. [OMITTED]
of Property
by Tenant
Utility 6. Tenant shall pay all utility bills, including, but not
Bills limited to water, sewer, gas, electricity, fuel, light, and heat
bills, for the leased premises and Tenant shall pay all charges for
garbage collection services or other sanitary services rendered to
the leased premises or used by Tenant in connection therewith. If
Tenant fails to pay any of said utility bills or charges for
garbage collection or other sanitary services, Landlord may pay the
same and such payment may be added to the rental of the premises
next due as additional rental.
Use of 7. Premises shall be used for all legal purposes and no other.
Premises Premises shall not be used for any illegal purposes; nor in any
manner to create any nuisance or trespass; nor, in any manner to
vitiate the insurance or increase the rate of insurance on
premises.
Abandonment 8. Tenant agrees not to abandon or vacate leased premises
of Leased during the period of this lease, and agrees to use said premises
Premises for purpose herein leased until the expiration hereof.
Repairs by 9. Landlord agrees to keep in good repair the roof, foundations,
Landlord and exterior walls of the premises (exclusive of all glass and
exclusive of all exterior doors), and underground utility and
sewer pipes outside the exterior walls of the Building, except
repairs rendered necessary by the negligence of Tenant, its
agents, employees, or invitees. Landlord gives to Tenant exclusive
control of premises and shall be under no obligation to inspect
said premises. Tenant shall promptly report in writing Landlord
any defective condition known to it which Landlord is required to
repair, and failure to so report such defects shall make Tenant
responsible to Landlord for any liability incurred by Landlord by
reason of such defects.
1
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Repairs by 10. Tenant accepts the leased premises in their present condition
Landlord and as suited for the uses intended by Tenant. Tenant shall,
throughout the initial term of this lease and all renewals
thereof, at its expense, maintain in good order and repair the
leased premises, including the building and other improvements
located thereon, except those repairs expressly required to be
made by Landlord. Tenant further agrees to care for the grounds
around the building, including the mowing of grass, paving, care
of shrubs, and general landscaping. Tenant agrees to return said
premises to Landlord at the expiration, or prior to termination,
of this lease in as good condition and repair as when first
received, natural wear and tear, damage by storm, fire,
lightning, earthquake or other casualty alone excepted.
Elevators, (if any), are accepted by Tenant as in satisfactory
operating condition on this date, and Tenant, at his own expense,
shall maintain said elevators in good operating condition during
the term of this lease, or any extension thereof.
Tax 11. [OMITTED]
Escalation
Destruction 12. If premises are totally destroyed by storm, fire, lightning,
of, or earthquake, or other casualty, this lease shall terminate as of
Damage to the date of such destruction, and rental shall be accounted for
Premises as between Landlord and Tenant as of that date. If premises are
damaged but not wholly destroyed by any such casualties, rental
shall abate in such proportion as use of premises has been
destroyed, and Landlord shall restore premises to substantially
the same conditions as before damage as speedily as practicable,
whereupon full rental shall recommence.
Indemnity 13. Tenant agrees to indemnify and save harmless the Landlord
against all claims for damages to persons or property by reason
of the use or occupancy of the leased premises, and all expenses
incurred by Landlord because thereof, including attorneys' fees
and court costs.
Governmental 14. Tenant agrees, at his own expense, to promptly comply with
Orders all requirements of any legally constituted public authority made
necessary by reason of Tenant's occupancy of said premises.
Landlord agrees to promptly comply with any such requirements if
not made necessary by reason of Tenant's occupancy. It is
mutually agreed, however, between Landlord and Tenant, that if in
order to comply with such requirements, the cost to Landlord or
Tenant, as the case may be, shall exceed a sum equal to one
year's rent, then Landlord or Tenant who is obligated to comply
with such requirements is privileged to terminate this lease by
giving written notice of termination to the other party, by
registered mail, which termination shall become effective sixty
(60) days after receipt of such notice, and which notice shall
eliminate necessity of compliance with such requirement by party
giving such notice unless party receiving such notice of
termination shall, before termination becomes effective, pay to
party giving notice all cost of compliance in excess of one
year's rent, or secure payment of said sum in manner satisfactory
to party giving notice.
Condemnation 15. If the whole of the leased premises, or such portion thereof
as will make premises unusable for the purposes herein leased, be
condemned by any legally constituted authority for any public use
or purpose, then in either of said events the term hereby granted
shall cease from the date when possession thereof is taken by
public authorities, and rental shall be accounted for as between
Landlord and Tenant as of said date. Such termination, however,
shall be without prejudice to the rights of either Landlord or
Tenant to recover compensation and damage caused by condemnation
from the condemnor. It is further understood and agreed that
neither the Tenant nor Landlord shall have any rights in any
award made to the other by any condemnation authority
notwithstanding the termination of the lease as herein provided.
Landlord agrees to pay to Agent, from the award made to Landlord
under condemnation, the balance of lease commissions, reduced to
then present cash value, as provided in paragraph 4 hereof, and
agent may become a party to the condemnation proceeding for the
purpose of enforcing its rights under this paragraph.
2
<PAGE>
Assignment and 16. [OMITTED]
Subletting
Removal of Fixtures 17. Tenant may (if not in default hereunder) prior to the
expiration of this lease, or any extension thereof, remove
all fixtures and equipment which he has placed in premises,
provided Tenant repairs all damage to premises caused by
such removal.
Cancellation of 18. It is mutually agreed that in the event the Tenant
Lease by shall default in the payment of rent, including additional
Landlord rent, herein reserved, when due, and fails to cure said
default within five (5) days after written notice thereof
from Landlord; or if Tenant shall be in default in
performing any of the terms or provisions of this lease
other than the provision requiring the payment of rent, and
fails to cure such default within thirty (30) days after
the date of receipt of written notice of default from
Landlord; or if Tenant is adjudicated bankrupt; or if a
permanent receiver is appointed for Tenant's property and
such receiver is not removed within sixty days after
written notice from Landlord to Tenant to obtain such
removal; or if, whether voluntarily or involuntarily,
Tenant takes advantage of any debtor relief proceedings
under any present or future law, whereby the rent or any
part thereof is, or is proposed to be, reduced or payment
thereof deferred; or if Tenant makes an assignment for
benefit of creditors; or if Tenant's effects should be
levied upon or attached under process against Tenant, not
satisfied or dissolved within thirty (30) days after
written notice from Landlord to Tenant to obtain
satisfaction thereof; then, and in any of said events,
Landlord at his option may at once, or within six (6)
months thereafter (but only during continuance of such
default or condition), terminate this lease by written
notice to Tenant; whereupon this lease shall end. After an
authorized assignment or subletting of the entire premises
covered by this lease, the occurring of any of the
foregoing defaults or events shall affect this lease only
if caused by , or happening to, the assignee or sublessee.
Any notice provided in this paragraph may be given by
Landlord, or his attorney, or Agent herein named. Upon such
termination by Landlord, Tenant will at once surrender
possession of the premises to Landlord and remove all of
Tenant's effects therefrom; and Landlord may forthwith re-
enter the premises and repossess himself thereof, and
remove all persons and effects therefrom, using such force
as may be necessary without being guilty of trespass,
forcible entry or detainer or other tort.
Reletting by 19. Landlord, as Tenant's agent, without terminating this
Landlord lease, upon Tenant's breaching this contract, may at
Landlord's option enter upon and rent premises at the best
price obtainable by reasonable effort, without
advertisement and by private negotiations and for any term
Landlord deems proper. Tenant shall be Landlord upon
reletting.
Exterior Signs 20. Tenant shall place no signs upon the outside walls or
roof of the leased premises except with the written consent
of the Landlord. Any and all signs placed on the within
leased premises by Tenant shall be maintained in compliance
with rules and regulations governing such signs and the
Tenant shall be responsible to Landlord for any damage
caused by installation, use, or maintenance of said signs,
and Tenant agrees upon removal of said signs to repair all
damage incident to such removal.
Entry for 21. Landlord may card premises "For Rent" or "For Sale"
Carding, Etc. thirty (30) days before the termination of this lease.
Landlord may enter the premises at reasonable hours to
exhibit same to prospective purchasers or tenants and to
make repairs required of Landlord under the terms hereof,
or to make repairs to Landlord's adjoining property, if
any.
Effect of 22. No termination of this lease prior to the normal ending
Termination of thereof, by lapse of time or otherwise, shall affect
Lease Landlord's right to collect rent for the period prior to
termination thereof.
Mortgagee's 23. [OMITTED]
Rights
No Estate in 24. This contract shall create the relationship of Landlord
Land and Tenant between the parties hereto; no estate shall pass
out of Landlord. Tenant has only a usufruct, not subject to
levy and sale, and not assignable by Tenant except by
Landlord's consent.
Holding Over 25. If Tenant remains in possession of premises, after
expiration of the term hereof, with Landlord's
acquiescence, and without any express agreement of parties,
Tenant shall be a tenant at will at rental rate in effect
at end of lease; and there shall be no renewal of lease by
operation of law.
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<PAGE>
Attorney's Fees 26. If any rent owing under this lease is collected by or
and Homestead through an attorney at law, Tenant agrees to pay ten
percent (10%) thereof as attorneys' fees. Tenant waives all
homestead rights and exemptions which he may have under any
law as against any obligation owing under this lease.
Tenant hereby assigns to Landlord his homestead and
exemption.
Rights Cumulative 27. All rights, powers and privileges conferred hereunder
upon parties hereto shall be cumulative but not restrictive
to those given by law.
Service of Notice 28. Tenant hereby appoints as his agent to receive service
of all dispossessory or distraint proceedings and notices
hereunder, and all notices required under this lease, the
person in charge of leased premises at the time, or
occupying said premises; and if no person is in charge of,
or occupying said premises, then such service or notice may
be made by attaching the same on the main entrance to said
premises. A copy of all notices under this lease shall also
be sent to Tenant's last known address, if different from
said premises.
Waiver of Rights 29. No failure of Landlord to exercise any power given
Landlord hereunder, or to insist upon strict compliance by
Tenant with his obligation hereunder, and no custom or
practice of the parties at variance with the terms hereof
shall constitute a waiver of Landlord's right to demand
exact compliance with the terms hereof.
Time of Essence 30. Time is of the essence of this agreement.
Definitions 31. "Landlord" as used in this lease shall include first
party, his heirs, representatives, assigns and successors
in title to premises. "Tenant" shall include second party,
his heirs and representatives, and if this lease shall be
validly assigned or sublet, shall include also Tenant
assignees or sublessees, as to premises covered by such
assignment or sublease. "Agent" shall include third party,
his successors, assigns, heirs, and representatives.
"Landlord," "Tenant", and "Agent" include male and female,
singular and plural, corporation, partnership or
individual, as may fit the particular parties.
Special In so far as the following stipulations conflict with any
Stipulations of the foregoing provisions, the following shall control:
Special Stipulations are attached hereto and incorporated
herein.
4
<PAGE>
This lease contains the entire agreement of the parties hereto and no
representations, inducements, promises or agreements, oral or otherwise, between
the parties, not embodied herein, shall be of any force or effect.
IN WITNESS WHEREOF, the parties herein have hereunto set their hands and
seals, in triplicate, the day and year first above written.
Signed, sealed and delivered as to Landlord, in the presence of:
/s/ Patricia Hardy /s/ Emory Lee Cole (SEAL)
- --------------------------- -------------------------
(Landlord) Emory Lee Cole
/s/ Glenda Rundall /s/ Melody Williamson Dunn (SEAL)
- --------------------------- ---------------------------------
Notary Public (Landlord) Melody Williamson Dunn
My commission expires 9/12/96.
Signed, sealed and delivered as to Tenant, in the presence of:
/s/ Patricia A. Hardy /s/ Philip Kauffman (SEAL)
- ---------------------------- -------------------------
(Tenant) Philip Kauffman
/s/ Glenda Rundall (SEAL)
- --------------------------- -------------------------
Notary Public (Tenant)
My commission expires 9/12/96.
SPECIAL STIPULATIONS:
1) Landlord and Tenant agree the aforementioned term of the lease shall be
reduced to twelve (12) months provided tenant gives written notice to
Landlord prior to September 30, 1996.
2) Landlord shall remove all personal items in said property, except cabinets
along inside walls.
3) Tenant shall have right to assign lease or sublet property, provided tenant
remains personally liable to Landlord for the term of the lease.
4) Security system to remain with property.
/s/ Emory Lee Cole /s/ Philip Kauffman
- ---------------------------------- --------------------
LANDLORD TENANT
/s/ Melody Williamson Dunn
- -----------------------------------
LANDLORD
5
<PAGE>
EXHIBIT 6.4
PURCHASE AND SALE AGREEMENT WITH RESPECT TO MAIN OFFICE SITE
PURCHASE AND SALE AGREEMENT
March 1, 1996
1. PURCHASE AND SALE. As a result of the efforts of First
-----------------
Realty Associates, Inc., a licensed Broker (hereinafter referred to as "Selling
Broker") and First Realty Associates, Inc., a licensed Broker (hereinafter
referred to as "Listing Broker"; Listing Broker and Selling Broker being
hereinafter sometimes collectively referred to as "Broker"), the undersigned
Buyer agrees to buy, and the undersigned Seller agrees to sell all that tract or
parcel of land, with such improvements as are located thereon, described as
follows:
All that tract of land lying and being in Land Lot 249 of the 5th
District, Section of Carroll County, Georgia and being known as 631 Bankhead
Avenue and 101 Thurman Street, Carrollton, Georgia 30117, Multiple Listing
#________ according to the present system of numbering in and around this area,
being more particularly described as Lot _____, Block _____, Unit _____,
Phase/Section _____ of _________________________ subdivision, as recorded in
Plat Book _____, Page _____, Carroll County, Georgia records together with all
lighting fixtures, all electrical, mechanical, plumbing, air-conditioning and
any other systems or fixtures as are attached thereto; all plants, trees, and
shrubbery now a part thereof, together with all the improvements thereon; and
all appurtenances thereto, all being hereinafter collectively referred to as the
"Property". The full legal description of said Property is the same as is
recorded with the Clerk of the Superior Court of the County in which the
Property is located and is made a part of this agreement by reference.
2. PURCHASE PRICE AND METHOD OF PAYMENT. Buyer warrants
------------------------------------
and represents that at the time of closing Buyer will have sufficient cash
(together with the loan or loans, if any, as described herein) to complete the
purchase contemplated herein and that Buyer (according to his actual current
knowledge) [BUYER INITIAL: _________] DOES ("Sale of Buyer's Property
Contingency Exhibit" attached) or [BUYER INITIAL: _________] DOES NOT have real
property to sell or lease in order to complete the purchase contemplated herein
and in the event of a "does not" selection above, Buyer further warrants that
failure to sell the current residence or any other property will not be grounds
for refund of earnest money in the event of loan denial.
The purchase price of said Property shall be Three Hundred Thousand
and 00/100 Dollars, (U.S.) $300,000.00 to be paid as set forth in sub-paragraph
A, B or C [Select A, B or C below. The others are not a part of this Agreement]:
[X] A. ALL CASH AT CLOSING: At Closing, Buyer shall pay
purchase price to Seller in cash, or its equivalent. Buyer's
obligation to close shall not be contingent upon Buyer's ability to
obtain financing. Buyer shall pay all usual and customary closing
costs.
[ ] B. WHERE LOAN IS TO BE ASSUMED, see Exhibit
"_______________" attached hereto and by reference made a part
hereof.
[ ] C. WHERE NEW LOAN IS TO BE OBTAINED: Buyer shall
immediately disclose to Broker, upon loan application, the name(s)
of the lender(s) with which Buyer has applied.
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(1) LOAN TERMS: This Agreement is made conditioned upon
Buyer's "ability to obtain" (as hereinafter defined) a loan in the principal
amount of ___________% of the purchase price or $____________, to be secured by
a first lien security deed on the within described Property; said loan to be
paid in consecutive monthly installments of principal and interest over a term
of not less than __________ years. Initial monthly payments of principal and
interest shall not be more than $__________. "Ability to obtain" as used herein
means that Buyer is qualified to receive the loan described herein based upon
lender's customary and standard underwriting criteria. Proceeds of said loan,
together with any balance of such purchase price, shall be paid in cash or its
equivalent by Buyer to Seller at closing. This loan shall be a [Select (a),
(b), (c) or (d) below. The others are not a part of this Agreement]:
(a) [ ] FIXED RATE MORTGAGE LOAN with an interest rate of not more than
__________% per annum on the unpaid principal balance.
(b) [ ] ADJUSTABLE RATE MORTGAGE ("ARM") LOAN with an initial interest
rate of not more than __________% per annum on the unpaid
principal balance. The interest rate payable to lender by Buyer
may increase or decrease according to the terms of said loan, and
as a result, the monthly installments of principal and interest
payable by Buyer may increase or decrease.
(c) [ ] FHA OR VA LOAN with an initial interest rate of not more than
__________% per annum on the unpaid principal balance, see Exhibit
"___________________", attached hereto and by reference made a
part hereof.
(d) [ ] OTHER LOAN, see Exhibit "___________________", attached hereto and
by reference made a part hereof.
(2) CLOSING COSTS: ___________________________ shall pay
all usual and customary closing costs for said loan in a sum not to exceed
__________% of said loan amount. Buyer shall pay any usual and customary
closing costs exceeding said sum. ___________________________ shall pay the
cost of any required survey.
(3) LOAN DISCOUNT: ___________________________ shall pay
any Loan Discount payable in connection with said loan in a sum not to exceed
__________% of said loan amount.
(4) PRIVATE MORTGAGE INSURANCE: The initial Private Mortgage Insurance
Premium, if any, for said loan and any portion of private mortgage insurance
premium, which is required by lender to be spread over subsequent monthly
payments, shall be paid by Buyer.
(5) FLOOD INSURANCE. If flood insurance is desired by
Buyer, or required by Buyer's lender, Buyer shall pay for said flood insurance.
(6) APPLICATION AND ESCROW DEPOSITS: Buyer agrees to make
application for said loan with ______________ (_____) calendar days from Binding
Agreement Date, to pursue said application diligently and in good faith, to
execute all papers, to provide all documents, to perform all other actions
necessary to obtain said loan and to accept such loan if approved by a lender.
Should Buyer not apply for said loan in the time specified above, Seller may,
upon written notification to Buyer, declare Buyer in default and Buyer
thereafter shall have 5 calendar days to cure said default by providing Seller
with written evidence of formal loan application. If required by lender, Buyer
shall, in addition to the payment of principal and interest upon said loan, pay
at closing the amount of money necessary to establish an escrow account and
shall also pay, along with each monthly payment of principal and interest, one-
twelfth of the annual ad valorem taxes and hazard insurance premiums for the
Property, as estimated by lender. Buyer shall also pay each month the private
mortgage insurance amount if required by lender.
(7) LOAN OPTIONS: Buyer understands and acknowledges the
possibility that many different loan programs, available from many different
lenders, may well fit within the description of the loan set forth herein. No
attempt has been made by Buyer to describe exactly all of the particular terms
and conditions of said loan. The economics of this transaction, as bargained
for by the parties, are such that Buyer agrees that a loan with terms consistent
with those described herein shall be acceptable to Buyer and shall satisfy this
loan contingency. Buyer, at his option and without voiding this agreement, may
also apply for a loan with different terms and conditions and close the
transaction provided (a) all other terms and conditions of this Agreement are
fulfilled; and (b) the new loan does not increase the costs charged to the
Seller. Buyer shall be obligated to close this transaction if Buyer has the
ability to obtain a loan with terms as described herein and/or any other loan
for which Buyer has applied and been approved.
2
<PAGE>
(8) BUYER'S LOAN RESPONSIBILITY: Buyer acknowledges and
represents that he has not relied upon the advice or representations, if any, of
Broker or Broker's Affiliated Licensees regarding the type of loan or the terms
of any particular loan program to be obtained by Buyer. Buyer shall have the
responsibility of independently investigating and choosing the lender, type of
loan, and loan program to be applied for by Buyer in connection with Purchase
Price and Method of Payment paragraph. Buyer agrees to hold harmless listing
broker, selling broker and their affiliated licensees, from any claim or loss
whatsoever arising out of Buyer's application and commitment for any loan, and
with respect to the terms of the instruments evidencing or securing said loan.
3. EARNEST MONEY. Buyer has paid to the undersigned
-------------
Seller, Holder, Escrow Agent, $1,000.00 check, OR $___________________ cash,
receipt whereof is hereby acknowledged by Holder, as earnest money, which
earnest money is to be deposited in Holder's escrow/trust account and is to be
applied as part payment of the purchase price of said Property at time of
closing. All parties to this Agreement agree that Holder may deposit the
earnest money in an interest-bearing escrow/trust account and that Holder will
retain the interest earned on said deposit. Buyer and Seller understand and
agree that Holder shall deposit the earnest money in Holder's escrow/trust
account within five (5) banking days following the Binding Agreement Date. In
the event the Earnest Money check is returned for insufficient funds or
otherwise not honored by the bank drawn upon and Buyer has not delivered good
funds to Holder within three (3) days of bank's notice, then and in that event,
the Seller in his sole discretion shall have the right to terminate this
Agreement by giving written notice to the parties. The parties to this
Agreement understand and acknowledge that disbursement of earnest monies held by
Holder, escrow agent, can occur only as follows: (A) at closing; (B) upon
written agreement signed by all parties having an interest in the funds; (C)
upon court order; (D) upon failure of any contingency or failure of either party
to fulfill his obligations contained in this Agreement; or (E) as otherwise set
out herein.
If any dispute arises between Buyer and Seller as to the final
disposition of all or part of the earnest money, Holder may, at its option,
notify Buyer and Seller in writing that Holder is unable to resolve such dispute
and may, at its option, interplead all or any disputed part of the earnest money
into court. Holder shall be entitled to be compensated by the party who does
not prevail in the interpleader action for its costs and expenses, including
reasonable attorney's fees incurred in filing said interpleader. If Holder
decides not to interplead, Holder may make a disbursal of said earnest money
upon a reasonable interpretation of this Agreement. If Holder decides to make a
disbursal to which all parties to this Agreement do not expressly agree, Holder
must give all parties fifteen (15) days notice in writing of Holder's intent to
disburse. Such notice shall be delivered by Certified Mail to the parties' last
known addresses and must recite to whom and when the disbursal will be made.
After disbursement, Holder shall notify all parties by Certified Mail of such
disbursement. In the event Holder interpleads the funds into court or makes a
disbursal upon a reasonable interpretation of this Agreement, then and in either
event, the parties thereafter shall make no claim against Holder or Broker for
said disputed earnest money and shall not seek damages from Holder or Broker by
reason thereof or by reason of any other matter arising out of this Agreement or
the transaction contemplated hereunder.
4. DESTRUCTION OF PROPERTY. Should the Property be
-----------------------
destroyed or substantially damaged before time of closing, Seller is to notify
immediately the Buyer or Broker. After which, Buyer may declare this Agreement
void and receive refund of earnest money deposited. In the event Buyer elects
not to void this Agreement at this time, then within five (5) calendar days
after Seller receives notification of the amount of the insurance proceeds, if
any, Seller shall notify Buyer of the amount of insurance proceeds and the
Seller's intent to repair or not repair said damage. Within five (5) calendar
days of Seller's notification, Buyer may (A) declare this Agreement void and
receive refund of earnest money deposited, or (B) consummate this agreement and
receive such insurance as is paid on claim of loss if Seller has elected not to
repair said damage.
5. CONDITION OF PROPERTY.
---------------------
A. Condition at Closing: Seller warrants that at time of closing the
Property will be in the same condition as it was on the Binding
Agreement Date, normal wear and tear excepted.
B. Warranty(ies), Transfer: Seller agrees to transfer to Buyer, at
closing, Seller's interest in any manufacturer's warranties, service
contracts, termite bond or treatment guarantee, and/or other similar
warranties which by their terms may be transferable to Buyer.
C. Utility Services: Seller shall cause utility services, pool and spa
to be operational so that Buyer may complete all inspections under
this Agreement.
D. Seller's Disclosure: [Buyer must initial either sub-paragraph (1) or
(2) below; the uninitialed sub-paragraph is not part of this
Agreement.] The Seller's Property Disclosure Statement:
3
<PAGE>
[BUYER INITIAL: _________] (1) Has not been received by Buyer. Seller shall
provide said Property Disclosure to Buyer no
later than two (2) calendar days from the
Binding Agreement Date. In the event Seller
fails to provide said Property Disclosure in a
timely manner or said Property Disclosure
discloses conditions which are unacceptable to
Buyer, Buyer may terminate this Agreement by
giving Seller written notice thereof within
four (4) calendar days from Binding Agreement
Date, in which case Holder shall return the
earnest money to Buyer. In the event Buyer
fails to provide said written notice, Buyer
waives the right to terminate this Agreement in
accordance with this paragraph.
OR
[BUYER INITIAL: _________] (2) Has been received by Buyer.
6. INSPECTION. Buyer, his inspectors or representatives,
----------
at Buyer's expense and at reasonable times during normal business hours shall
have the right and responsibility to enter upon the Property for the purpose of
making a diligent, prudent and competent inspection (including conducting the
final walkthrough), by examining, testing, and surveying the Property. Buyer
agrees to assume all responsibility for the acts of himself, his inspectors, and
representatives in exercising his rights under this paragraph and agrees to hold
Seller, Broker and Broker's Affiliated Licensees harmless for any damages or
injuries resulting therefrom. The inspection of the Property shall include, but
is not limited to: all appliances remaining with the Property; heating and air
conditioning systems; plumbing (including without limitation, sewer/septic and
water/well systems, pool and spa); electrical systems; roof, gutters, structural
components, foundation, fireplace and chimney; drainage conditions or evidence
of excessive moisture adversely affecting the structure; excessive levels (as
defined by the Environmental Protection Agency) of radon, toxic wastes,
hazardous substances including, but not limited to: lead, asbestos and
ureaformaldehyde, or other undesirable substances; any other condition or
circumstance which may adversely affect the Property, and any personal property
described in this Agreement. Buyer waives any objection to matters disclosed by
inspection which are of a purely cosmetic nature. [Select A. INSPECTION
PROCEDURE or B. PROPERTY SOLD "AS IS" the other is not a part of this
Agreement.]:
[BUYER INITIAL: _________] A. INSPECTION PROCEDURE
(1) Buyer shall, within ____N/A______ (______) calendar days from
Binding Agreement Date, make such inspection AND either (a) accept
Property in its present condition by written notice to Seller, OR (b) furnish
to Seller a copy of the Inspection Report with a written Amendment to this
Agreement setting forth those items in the inspection report which Buyer
requests be repaired and/or replaced and which do not constitute substantial
upgrade to the Property.
If Buyer does neither (a) nor (b) within the time period set forth in
6.A.1., then this paragraph 6.A. shall be deemed waived by Buyer.
(2) If Buyer submits the written Amendment described in
6.A.1.b., then the Seller shall, within ______________ (______) calendar days
from Binding Agreement Date, either:
(a) sign the written Amendment, thereby agreeing to the provisions
therein, OR submit to Buyer a written counter Amendment. If Seller
does neither (a) nor (b) within the time period set forth in
6.A.2., Buyer shall, within the time period set forth in 6.A.3.,
either:
(c) accept the Property in its present condition by written notice to
Seller, OR terminate this Agreement by written notice to Seller,
in which case Holder shall return the earnest money to Buyer.
If Buyer does neither (c) nor (d) within the time period set forth in
6.A.3., this paragraph 6.A. shall be deemed waived by Buyer.
(3) If Seller submits the written counter Amendment described in 6.A.2.b.,
Buyer shall, within ____N/A______ (______) calendar days from Binding
Agreement Date, either:
(a) sign the Seller's written counter Amendment, OR
(b) terminate this agreement by written notice to Seller, in which
case Holder shall return the earnest money to Buyer.
4
<PAGE>
If Buyer does neither (a) nor (b) within the time period set forth in
6.A.3., this paragraph 6.A. shall be deemed waived by Buyer.
OR
[BUYER INITIAL: _________] B. PROPERTY SOLD "AS IS". All parties acknowledge
and agree that the Property is being sold "AS IS"
(except as provided in Condition of Property and
Wood Infestation Report paragraphs), with any and
all faults. The Seller shall have no obligation
for repairs or replacements noted in any
inspection(s) made by or for Buyer. Such repairs
or replacements shall be the sole responsibility
of Buyer.
C. PROPERTY ACCEPTANCE. Notwithstanding anything
contained herein to the contrary, Seller's
responsibility in connection with the Property
shall cease at closing, and closing shall
constitute Buyer's acceptance of the Property
unless provision is otherwise made in writing.
Nothing contained in the Inspection paragraph
shall amend, alter, or modify Seller's
obligations under the Condition of Property
Paragraph herein.
7. WOOD INFESTATION REPORT. No less than seven (7), but
-----------------------
within thirty (30), days prior to the closing, the Seller shall cause to be
made, at Seller's expense, an inspection of the main dwelling from a licensed
pest control operator. If visible evidence of active or previous infestation is
indicated, Seller agrees, prior to closing, to (A) treat said infestation and
correct structural damages resulting from said infestation and provide
documentation evidencing correction of same and/or (B) provide documentation,
satisfactory to lender (if applicable), indicating that there is no structural
damage resulting from any previous infestation. Seller, at closing, shall
provide a letter on a standard form in accordance with the regulations of the
Georgia Structural Pest Control Commission, stating that the main dwelling has
been inspected and found to be free from visible evidence of active infestation
caused by termite or other wood destroying organisms.
8. SEWER/SEPTIC TANK AND PUBLIC WATER/WELL. Any lender
---------------------------------------
imposed inspection(s) of the septic tank or well systems shall be obtained and
paid for by Buyer. Seller warrants that the main dwelling on the above
described Property is served by:
<TABLE>
<S> <C> <C>
A. Public Sewer ________/________ or Septic Tank ________/_______ or Private Sewer ________/_______
Buyer Seller Buyer Seller Buyer Seller
Initials Initials Initials Initials Initials Initials
B. Public Water ________/________ or Private Water ________/_______ or Well ________/_______
Buyer Seller Buyer Seller Buyer Seller
Initials Initials Initials Initials Initials Initials
</TABLE>
9. HOME WARRANTY PROGRAM. Buyer acknowledges that a home
---------------------
warranty may be available for the main dwelling at an additional cost.
5
<PAGE>
10. TITLE.
-----
A. Examination. Buyer shall have a reasonable time after the Binding
Agreement Date to examine title and to furnish Seller with a written statement
of objections affecting the marketability of said title. Seller shall have a
reasonable time after receipt of such objections to satisfy all valid
objections. If Seller fails to satisfy such valid objections within a
reasonable time, then, at the option of Buyer evidenced by written notice to
Seller, this Agreement shall be null and void. Marketable title as used herein
shall mean title which a title insurance company licensed to do business in the
State of Georgia will insure at its regular rates, subject only to standard
exceptions unless otherwise specified herein. Buyer acknowledges that owner's
title insurance may be purchased at closing, at Buyer's expense.
B. Warranty. Seller warrants that he presently has title to said
Property. At the time of closing, Seller agrees to convey good and marketable
title to said Property by general warranty deed subject only to (1) zoning
ordinances affecting said Property, (2) general utility, sewer, and drainage
easements of record upon which the improvements do not encroach, (3) subdivision
easements and restrictions of record, and (4) leases, other easements, other
restrictions and encumbrances specified in this Agreement. In the event leases
are specified in this Agreement, Buyer agrees to assume Seller's
responsibilities thereunder to the tenant and to the broker who negotiated such
leases.
11. BROKERAGE. In negotiating this Agreement, Broker has
---------
rendered a valuable service for which reason Broker is made a party to enable
Broker to enforce his commission rights hereunder against the parties hereto on
the following basis: Seller agrees to pay Broker the full commission when the
sale is consummated. In the event the sale is not consummated because of
Seller's inability, failure or refusal to perform any of Seller's covenants
herein, then Seller shall pay the full commission to Broker immediately, and
Broker, at the option of Buyer, shall return the earnest money to Buyer. Buyer
agrees that if Buyer fails or refuses to perform any of Buyer's covenants
herein, Buyer shall forthwith pay Broker the full commission immediately;
provided that Broker may first apply one-half of the earnest money toward
payment of, but not to exceed, the full commission and may pay the balance
thereof to Seller as liquidated damages to Seller, if Seller claims balance as
Seller's liquidated damages in full settlement of any claim for damages,
whereupon Broker shall be released from any and all liability for return of the
earnest money to Buyer.
Commission to be paid in connection with this Agreement has been
negotiated between Seller and Broker and shall be $ -0- or N/A
------------- -----------
% of the Purchase Price, due and payable upon transfer of title (closing) or as
otherwise provided herein. In the event this sale is made in cooperation with
another Broker, Selling Broker shall receive N/A % and Listing Broker
------------
shall receive ____________% of the total real estate commission paid hereunder
or as otherwise provided herein.
12. AGENCY DISCLOSURE. In this transaction, the Listing
-----------------
Broker (if any) has acted for Seller and the Selling Broker's relationship with
the parties to this Agreement is as specified in the attached Exhibit. Either
the "Agency Exhibit" or the "Transaction Broker Exhibit" is attached and made a
part hereof by reference herein.
13. CLOSING AND POSSESSION.
----------------------
A. Taxes: Real estate taxes on said Property for the calendar year in
which the sale is closed shall be prorated as of the date of closing.
B. Transfer Tax: Seller shall pay State of Georgia property transfer
tax.
C. Closing Date: This transaction shall be closed on or before
December 31, 1996, provided, however, (1) that in the event the loan described
in Purchase Price and Method of Payment Paragraph hereinabove is unable to be
closed on or before said date, or (2) that Seller fails to satisfy valid title
objections, either Buyer or Seller may, at his option, by written notice to the
other party, extend this Agreement's closing date seven (7) calendar days from
the above-stated closing date.
D. Possession: Buyer agrees to allow Seller to retain possession of
the Property until midnight (______) day(s) after closing. In the event that
Seller retains possession of the Property beyond the day of closing, Seller does
hereby guarantee that at the date of surrender of occupancy by the Seller, the
Property shall be in the same condition as of the day of closing.
E. Property Delivery Condition: Seller shall deliver Property clean and
free of debris at time of possession.
F. Prorations: Seller and Buyer agree to prorate between themselves,
as of the date of closing or the day of surrender of the Property by the Seller
(whichever is the later), association fees (if mandatory) and all utility bills
rendered subsequent to closing which include service for any period of time the
Property was owned/occupied by Seller or any prior owner/occupant.
G. Closing Certifications: Buyer and Seller agree (1) to comply with
and (2) to execute and deliver such certifications, affidavits, and statements
as are required at the closing in order to meet the requirements of Internal
Revenue Code Section 1445.
6
<PAGE>
14. ASSOCIATION/ASSESSMENT FEES. Unless otherwise stated
---------------------------
in an Association/Assessment Fee Exhibit, there are no mandatory association
fees, nor any special assessment(s).
15. OTHER PROVISIONS.
----------------
A. Binding Effect. The terms, covenants and conditions of this
Agreement shall inure to the benefit of, and be binding upon, the parties
hereto, their heirs, successors, legal representatives and permitted assigns.
B. Transfer or Assignment. This Agreement shall not be transferred or
assigned without the written consent of all parties to this Agreement and any
permitted assignee shall fulfill all the terms and conditions of this Agreement.
C. Survival of Agreement. Any condition or stipulation not fulfilled
at time of closing shall survive the closing, execution and delivery of the
Warranty Deed until such time as said conditions or stipulations are fulfilled.
D. Modification. This Agreement may not be modified, altered or amended
except by written instrument executed by the parties hereto.
E. Entire Agreement. This Agreement constitutes the sole and entire
agreement between the parties hereto and no modification of this Agreement shall
be binding unless signed by all parties to this Agreement. No representation,
promise, or inducement not included in this Agreement shall be binding upon any
party hereto.
F. Governing Law. This Agreement is made and entered into as a
contract for the purchase and sale of real property to be interpreted under and
governed and enforced according to the laws of the State of Georgia.
G. Terminology and Captions. All pronouns, singular, plural,
masculine, feminine or neuter, shall mean and include the person, entity, firm
or corporation to which they relate as the context may require. Wherever the
context may require, the singular shall mean and include the plural and the
plural shall mean and include the singular. The term "Agreement" as used
herein, as well as the terms "herein," "hereof," "hereunder," "hereinafter," and
the like mean this Agreement in its entirety and all exhibits, amendments and
addenda attached hereto and made a part hereof. The captions and paragraph
headings are for reference and convenience only and do not enter into or become
a part of the context of this agreement.
16. RESPONSIBILITY TO COOPERATE. All parties agree that
---------------------------
such documentation as is reasonably necessary to carry out the responsibilities
and obligations of this Agreement shall be produced, executed and/or delivered
by said parties within time required to fulfill the terms and conditions of this
Agreement.
17. ALTERNATE DISPUTE RESOLUTION AVAILABLE. All parties to
--------------------------------------
this Agreement acknowledge that, in the event a dispute arises after execution
of this Agreement, there are alternatives to litigation through alternate
dispute resolution methods, such as mediation and binding arbitration, provided
all parties agree in writing to employ such methods. In the event that the
parties agree to resolve any disputes which may arise after execution of this
Agreement through binding arbitration, they will enter into a separate
Arbitration or Mediation Agreement.
18. TIME IS OF THE ESSENCE. Time is of the essence of this
----------------------
Agreement.
19. NOTICES. Except as may otherwise be provided for in
-------
this Agreement, all notices or demands required or permitted hereunder shall be
delivered either (A) in person; (B) by overnight delivery service prepaid; (C)
by facsimile (FAX) transmission; or (D) by the United States Postal Service,
postage prepaid, registered or certified, return receipt requested. Such
notices shall be deemed to have been given as of the date and time the same are
actually received by Broker or Broker's Affiliated Licensee or receiving party.
In the event that any notice, demand, information, or disclosure is required by
the terms of this Agreement to be given by a party to "Broker," such Broker
shall be deemed to be the Broker or Affiliated Licensee, if any, for the other
party, and if none, then directly to the other party.
7
<PAGE>
20. DISCLAIMER.
----------
A. Independent Expert Advice: Seller and Buyer acknowledge that they
have not relied upon the advice or representations of Broker or Broker's
Affiliated Licensees, including but not limited to: legal and tax consequences
of this Agreement in the sale of the Property; the terms and conditions of
financing; the purchase and ownership of the Property; the structural condition
of the Property; the operating condition of the electrical, heating, air
conditioning, plumbing, water heating systems, pool, spa and appliances in the
Property; the availability of utilities to the Property; the investment
potential or resale value of the Property; the availability and ownership of
amenity package, if applicable; restrictive covenants and architectural
controls; or any other system or condition enumerated in the "Inspection of
Property" paragraph above or any other condition or circumstance which may
adversely affect the Property. Seller and Buyer acknowledge that if such, or
similar, matters have been of concern to them, they have sought and obtained
independent advice relative thereto. Buyer acknowledges that closing shall
constitute acceptance of the Property unless provision is otherwise made in
writing.
B. Property Conditions: Seller and Buyer acknowledge that various
substances used in the construction of the improvements on the Property or
otherwise located on the Property may now or in the future be determined to be
toxic, hazardous or undesirable and may need to be specially treated, handled
and/or removed from the Property. Persons who have an interest in the Property
may be required by law to undertake the clean-up of such substances. Buyer and
Seller acknowledge that: Brokers have no expertise with respect to toxic wastes,
hazardous substances or undesirable substances; such substances can be extremely
costly to correct and remove; Brokers have made no investigations or
representations with respect to such substances; and Brokers shall have no
liability to Seller or Buyer regarding the presence of said substances on the
Property. Seller and Buyer release Broker and Broker's Affiliated Licensees
from any claim, rights of action or suits relating to the presence of any
hazardous substances, toxic wastes, or undesirable substances on the Property.
21. INSTRUCTIONS TO CLOSING ATTORNEY. Closing Attorney is
--------------------------------
instructed to: (A) transfer "Survival of Agreement" paragraph to the closing
statement; (B) obtain and distribute to and from the appropriate parties such
certifications, affidavits, and statements as are required in order to meet the
requirements of Internal Revenue Code (S) 1445 (Foreign/Non-Foreign Sellers), or
in the alternative to disburse and hold the sales proceeds in such a manner as
may be required to comply with Internal Revenue Code (S) 1445; (C) file with the
Internal Revenue Service the IRS Form 1099 B documenting this transaction, and
comply with any other reporting requirements related thereto.
22. EXHIBITS AND ADDENDA. In the event Personal Property
--------------------
shall remain with the Property, the same shall be set out in a Bill of Sale
attached hereto and made a part of this Agreement by reference thereto. The
following Exhibits and/or Addenda are attached hereto and by reference made a
part hereof:
"Agency Exhibit" or "Transaction Broker Exhibit"
SPECIAL STIPULATIONS: THE FOLLOWING STIPULATIONS, IF CONFLICTING WITH ANY
PRECEDING PARAGRAPH, SHALL CONTROL:
23. CONTRACT IS CONTINGENT UPON THE STATE BANKING DEPARTMENT APPROVING SAID
PROPERTY FOR A BANKING FACILITY AND GRANTING PURCHASER A CHARTER TO OPEN AND
OPERATE A STATE BANK.
[ ] Special Stipulations Continued and made a part hereof.
TIME LIMIT OF OFFER. This instrument shall be open for acceptance until ______
- -------------------
o'clock ____M, on the ________ day of __________________, 19___.
8
<PAGE>
ACCEPTANCE DATE
- ---------------
The above proposition is hereby accepted, 1:00 o'clock PM, on the 1st day of
March, 1996.
BINDING AGREEMENT DATE
- ----------------------
This instrument shall become a binding Agreement when written acceptance
thereof, or a facsimile (FAX) transmission of the accepted instrument is
actually received by Broker, Broker's Affiliated Licensees, or Offeror. Upon
receipt of acceptance, the other party, Broker or Broker's Affiliated Licensee
shall be notified immediately.
9
<PAGE>
<TABLE>
<S> <C>
CARROLLTON INVESTORS
( ) /s/ John B. Bohannon
- ---------------------- ---- ------------ ----------------------------------
Selling Broker MLS Office Code Buyer's Signature:
Print or Type Name:
------------------
By: Buyer's Signature:
------------------------------------ Print or Type Name:
Broker or Broker's Affiliated Licensee ------------------
Print or Type Name:
-------------------
Bus. Phone: FAX #
------------ ----------- -------------------------------------
Listing Broker MLS Office Code Seller's Signature:
Print or Type Name:
------------------
By: /s/ C.J. Puckett
------------------------------------ -----------------------------------
Broker or Broker's Affiliated Licensee Seller's Signature:
Print or Type Name: Print or Type Name: C.J. Puckett
------------------- -------------------
Bus. Phone: FAX #
------------ -----------
</TABLE>
10
<PAGE>
EXHIBIT 6.5
EMPLOYEE INCENTIVE STOCK OPTION PLAN
1. PURPOSE OF THE PLAN.
-------------------
This Employee Incentive Stock Option Plan (the "Plan") has been
established for Peoples Bancorp, Inc., a Georgia corporation ("Bancorp"),
Peoples Bank of West Georgia (the "Bank"), a Georgia bank and wholly owned
subsidiary of the Company, and such other direct and indirect subsidiaries as
Bancorp may have from time to time (Bancorp, the Bank and such other
subsidiaries, collectively, the "Company"), and is intended to encourage valued
employees of the Company to develop a proprietary interest in the success of the
Company, and to attract and retain such employees of the Company.
2. ADMINISTRATION OF THE PLAN.
--------------------------
2.1 The Board of Directors of Bancorp shall appoint a Stock Option Plan
Committee (the "Committee") which shall administer the Plan. The Committee shall
consist of not less than three (3) members of the Board of Directors; provided,
however, that each member of the Committee shall not at any time within one year
prior to his service as an administrator of the Plan or during such service have
received a grant or award of equity securities pursuant to the Plan.
Subject to the provisions of this Plan, the Committee shall have full
authority, in its discretion: (i) to determine from the eligible employees of
the Company and any subsidiary those employees to whom options will be granted;
(ii) to determine when such options shall be granted; (iii) to determine the
option price of the shares subject to each option, which price shall not be less
than the minimum specified in Section 6 hereof; (iv) to determine when each
option shall become exercisable and the duration of the exercise period; and (v)
to interpret the Plan and to prescribe and rescind rules and regulations
relating to it.
2.2 Determinations or interpretations by the Committee of any provisions
of the Plan, or of any option granted under it, shall be final. No member of the
Committee shall be liable for any action or determination made in good faith
with respect to the Plan or any option granted under it.
3. TYPES OF OPTIONS.
----------------
The options granted under this Plan to any eligible person may be either
"Incentive Stock Options", as defined in Section 422 of the Internal Revenue
Code of 1986, as amended (the "Code"), or "Nonqualified Stock Options", which
are not Incentive Stock Options. The options granted under this Plan shall be
designated as either Incentive Stock Options or Nonqualified Stock Options.
4. ELIGIBILITY.
-----------
4.1 All regularly employed employees of the Company or any subsidiary
(as defined in Code Section 424(f)), including officers and directors who are
such employees, shall be eligible to participate in this Plan.
4.2 No option may be granted to any employee who owns stock
possessing more than ten percent of the total combined voting power of all
classes of stock of Bancorp or any subsidiary, unless the option price is fixed
and not less than 110% of the fair market value of the stock, subject to the
option at the time such option is granted, and, notwithstanding the provisions
of Section 7 hereof, the exercise period is limited to not more then five (5)
years from the date such option is granted. For purposes of the immediately
preceding sentence, a person shall be considered as owning the stock owned
directly or indirectly by or for his brothers and sisters, whether by the whole
or half blood, spouse, ancestors, and lineal descendants; and the stock owned
directly or indirectly by a corporation, partnership, estate or trust shall be
considered as being owned proportionately by its shareholders, partners, or
beneficiaries.
4.3 The aggregate fair market value (determined as of the time the
option is granted) of the common stock with respect to which Incentive Stock
Options are exercisable for the first time by any employee during any calendar
year shall not exceed $100,000.
1
<PAGE>
5. STOCK SUBJECT TO THE PLAN.
-------------------------
The stock subject to the options granted under the Plan shall be shares
of Bancorp's common stock which are authorized but unissued or reacquired by
Bancorp, or any authorized but unissued or reacquired shares into which such
shares of common stock are exchanged, reclassified or converted. Subject to
adjustment as provided in Section 13 hereof, the aggregate number of shares for
which options may be granted under the Plan shall not exceed Seventy-five
Thousand (75,000). However, any shares subject to option under the Plan, which
option for any reason expires or is terminated unexercised as to such shares,
may again be subject to an option under the Plan.
6. OPTION PRICE.
------------
6.1 The exercise price for each option granted under this Plan shall
be determined by the Committee at the time the option is granted, but in no
event shall such exercise price be less than 100% of the fair market value of
Bancorp's common stock on the date of grant.
6.2 If the stock is listed on an established stock exchange on the
date any option is granted, the fair market value of the stock on that date
shall be deemed to be the mean between the highest and lowest quoted selling
prices of the stock on such stock exchange on that date, or if no sale of
Bancorp's stock shall have been made on any stock exchange on that date, on the
next preceding day on which there was a sale of stock. If the stock is not
listed on an established stock exchange on the date any option is granted, the
fair market value of the stock on that date shall be deemed to be either (i) if
the stock is not actively traded in the over-the-counter market, an amount
arrived at by the Committee by applying any reasonable valuation method, or (ii)
if the stock is actively traded in the over-the-counter market, the mean between
dealer "bid" and "ask" closing prices of the stock in the over-the-counter
market on that date as reported by the National Association of Securities
Dealers Automated Quotation System or other applicable inter-dealer quotation
system.
7. TERM OF THE OPTIONS.
-------------------
The term of each option shall be determined by the Committee at the
time the option is granted; provided, however, that no option shall be
exercisable after the expiration of ten (10) years from the date of grant and
all options shall be subject to earlier termination as hereinafter provided.
8. EXERCISE OF OPTION.
------------------
The time at which or the event upon the happening of which each option
granted hereunder becomes exercisable, in whole or in part, shall be determined
by the Committee at the time the option is granted.
9. DATE OF GRANT AND FORM OF AGREEMENT.
-----------------------------------
Each option granted under this Plan, unless otherwise specifically
indicated, shall be granted as of the date of the Committee resolution granting
the option. The Committee shall notify the recipient of the grant in writing
delivered either in person or by certified mail. The notification shall serve
as the option agreement and shall contain a summary of the essential terms and
conditions of the Plan and a complete statement of the particular terms and
conditions of the options represented thereby. Any inconsistencies between the
terms of the Plan and the terms of the option agreement shall be governed by the
terms of the Plan.
10. MANNER OF EXERCISE.
------------------
10.1 Any person electing to exercise, in whole or in part, any option
granted under the Plan shall give written notice to Bancorp of his election and
of the number of whole shares he has elected to purchase, such notice to be
accompanied with payment in full.
10.2 Payment for shares being purchased pursuant to the exercise of
an option shall be made in cash, by certified check, by shares of common stock
of Bancorp or by a combination thereof. Any stock transferred to Bancorp under
the exercise of an option shall be valued in the same manner as provided for in
Section 6.2 hereof with the exception that the value shall be determined as of
the date of exercise rather than the date the option is granted.
2
<PAGE>
10.3 Bancorp shall not be required to issue fractional shares in the
exercise of any option granted under this Plan, and any fractional shares
otherwise issuable on the exercise of any such option shall be disregarded.
11. RESTRICTION ON TRANSFER.
------------------------
Each option granted under this Plan shall be transferable only by will
or pursuant to applicable laws of descent and distribution and during his
lifetime shall be exercisable only by the employee to whom the option is
granted. Except as permitted by the preceding sentence, the option granted under
this Plan shall not be transferred, assigned, pledged or hypothecated in any way
(whether by operation of law or otherwise), and the option shall not be subject
to execution, attachment or similar process. Any attempt to transfer, assign,
pledge, hypothecate or otherwise dispose of any option contrary to the
provisions of the Plan, or upon the levy or any attachment or similar process
upon such option, shall cause the option to immediately become null and void.
12. TERMINATION OF EMPLOYMENT.
-------------------------
12.1 If the employment of an employee with the Company or any
subsidiary terminates for any reason other than death or disability, any options
granted to the employee under this Plan which have not been exercised shall
automatically terminate on the earlier of (i) the date which is the three month
anniversary of the effective date of the employee's termination of employment or
(ii) the original expiration date of such option, to the extent of the number of
shares which were purchasable under any such option at the date of such
termination of employment; provided, however, that the Committee reserves the
right to terminate any such option, effective on the employee's date of
termination of employment, if the employee is terminated for "cause." For
purposes of this Agreement, the term "cause" shall mean (i) failure to follow
reasonable instructions or policies of the Board of Directors; (ii) gross or
continued negligence or willful misconduct of the employee materially damaging
to the business of the Company of the Bank; or (iii) dishonesty, theft,
unethical business conduct or conviction of the employee of a crime involving
breach of trust or moral turpitude. The transfer of an employee from Bancorp to
any subsidiary or vice versa, or from one subsidiary to another subsidiary,
shall not be deemed a termination of employment for purposes of the Plan.
12.2 In the event of the death of an employee, any option held by him
at the time of the death shall become fully exercisable, shall be transferred as
provided in his will or as determined by applicable laws of descent and
distribution, and may be exercised, in whole or in part, by the estate of the
employee, or any person that acquired the option by such bequest or inheritance
from the employee, at any time or from time to time on or before the earlier of
three months after the date of death or the expiration date prescribed in the
respective option agreement. In the event that an employee becomes permanently
and totally disabled (as determined by the Committee in its sole discretion),
any option held by him on the date of disability (such date to be determined by
the Committee in its sole discretion) shall become fully exercisable and may be
exercised in whole or in part, by the employee or his duly appointed guardian or
conservator at any time or from time to time, on or before the earlier of one
year after the date of disability or the expiration date prescribed in the
option agreement.
13. ADJUSTMENTS DUE TO CERTAIN EVENTS.
---------------------------------
13.1 In the event that there is a change in the common stock of
Bancorp by reason of dividends paid in shares of common stock, combination or
reclassification of shares, recapitalization, stock split, merger, consolidation
or otherwise, the Committee shall make such adjustment, if any, as it may deem
equitable in the number and kind of shares which may become subject to options
to be granted under the Plan, in the number and kind of shares covered by
options theretofore granted, or in the exercise price of shares covered by any
such option.
13.2 Upon the complete liquidation of Bancorp, other than pursuant to
a plan of reorganization, any unexercised options granted under this Plan shall
be canceled. In the event of the complete liquidation of any subsidiary
employing the employee or in the event such subsidiary ceases to be a
subsidiary, any unexercised part of any option granted shall be canceled unless
the employee shall be become employed by the Company or another subsidiary
concurrently with such event.
3
<PAGE>
14. CHANGE IN CONTROL.
-----------------
Notwithstanding the provisions of the Plan or the provisions of any
option agreement regarding exercisability of an option, Bancorp shall have the
right, exercisable in its sole discretion by notice to employee, to require
employee to purchase, within ten (10) days from the date of such notice, all or
any portion of the shares which are subject to the option pursuant to the other
terms and conditions hereof, and the option shall terminate as to any balance
remaining of the shares as of the eleventh (11th) day from the date of such
notice, in the event (i) the Board (or, if the approval of the Board is not
required as a matter of law, the shareholders of Bancorp) shall approve (a) any
consolidation or merger of Bancorp in which Bancorp is not the continuing or
surviving corporation or pursuant to which shares of common stock would be
converted to cash, securities or other property, other than a merger of Bancorp
in which the holders of common stock immediately prior to the merger have the
same proportionate ownership of common stock of the surviving corporation
immediately after the merger, or (b) any sale, lease, exchange or other transfer
(in one transaction or a series of related transactions) of all, or
substantially all, the assets of Bancorp, or (c) the adoption of a plan or
proposal for the liquidation or dissolution of Bancorp, or (ii) any person (as
such term is defined in and pursuant to Section 13(d) of the Securities Exchange
Act of 1934 as in effect on the date of this Plan), corporation or other entity
other than Bancorp shall make a tender offer or exchange offer to acquire any
common stock (or securities convertible into common stock) for cash, securities
or any other consideration, provided that (a) at least a portion of such
securities sought pursuant to the offer in question is acquired and (b) after
consummation of such offer, the person, corporation or other entity in question
is the "beneficial owner" (as such term is defined in and pursuant to Rule 13d-3
promulgated under the Securities Exchange Act of 1934 as in effect on the date
of this Plan), directly or indirectly, of 50% or more of the outstanding common
stock (calculated as provided in and pursuant to Rule 13d-3(d) promulgated under
the Securities Exchange Act of 1934 as in effect on the date of this Plan in the
case of rights to acquire common stock).
15. RIGHTS AS A STOCKHOLDER.
-----------------------
An employee shall not by reason of the Plan or any option granted
pursuant to the Plan have any rights of a stockholder of Bancorp unless shares
have been issued and a certificate therefor has been delivered to him. Nothing
in the Plan or any option granted hereunder shall (i) confer upon any employee
any right to continue in the employ of the Company or (ii) interfere in any way
with the right of the Company to terminate the employment of any employee.
16. LISTING AND REGISTRATION OF SHARES.
----------------------------------
Each option shall be subject to the requirement that if at any time
the Committee shall determine that the listing, registration or qualification of
the shares covered thereby upon any securities exchange or under any federal or
state law or the consent or approval of any governmental regulatory body, is
necessary or desirable as the condition of, or in connection with, the granting
of any such option or the issue or purchase of shares thereunder, such option
may not be exercised in whole or in part unless and until such listing,
registration, qualification, consent or approval shall have been effected or
obtained free of any conditions not acceptable to the Committee. In this regard,
the Committee may impose such conditions upon the exercise of any option granted
under the Plan as it may deem necessary or advisable to assure compliance with
such laws, rules and regulations.
17. AMENDMENT OR TERMINATION OF THE PLAN.
------------------------------------
The Board of Directors may, without further stockholder approval,
amend or discontinue this Plan at any time; provided, however, that no
unexercised option granted under this Plan may be altered or canceled except in
accordance with its terms or as otherwise provided in Section 13 hereunder,
without the written consent of the participant to whom such option was granted;
and further provided that without the approval of the stockholders, no amendment
may (i) increase the maximum number of shares for which options may be granted
under the Plan (except in accordance with Section 13 hereunder), (ii) permit the
grant of options under the Plan after the expiration date of the Plan, (iii)
change the designation of the class of employees eligible to receive options
under the Plan, or (iv) materially increase the benefits accruing to eligible
employees.
18. TAX WITHHOLDING.
---------------
Whatever shares of common stock are to be issued and delivered under
the Plan, the Board shall have the right, at or prior to the delivery of any
certificate or certificates for such shares, to require the recipient to remit
to the Company an amount sufficient to satisfy withholding requirements with
respect to federal, state and local income and employment taxes.
4
<PAGE>
19. TERM OF THE PLAN.
----------------
This Plan shall become effective on the earlier of the date of its
adoption by the Board of Directors of Bancorp or its approval by the
stockholders of Bancorp. The Plan shall expire and no options shall be granted
pursuant to the Plan after ten (10) years from the effective date of the Plan.
20. STOCKHOLDER APPROVAL.
--------------------
This Plan shall be submitted to the stockholders of Bancorp for their
approval within twelve (12) months of its adoption by the Board of Directors. In
the event that the stockholder approval is not obtained, any options theretofore
and thereafter granted shall not be Incentive Stock Options.
21. NOTICES.
-------
All notices or other communications hereunder must be in writing and
will be deemed given on the date delivered if delivered in person, or on the
third business day after mailed by depositing the same postage prepaid in a post
office addressed to Bancorp at its principal office and to any other person at
their last known addressed furnished to Bancorp.
IN WITNESS WHEREOF, Bancorp has executed this instrument by its
officers, duly authorized by its Board of Directors, and affixed its corporate
seal this ________ day of _____________________________, 199_____.
PEOPLES BANCORP, INC.
By:
-------------------------------
Timothy I. Warren, President
Attest:
-----------------------------
Elaine B. Lovvorn, Secretary
[CORPORATE SEAL]
5
<PAGE>
PEOPLES BANCORP, INC.
EMPLOYEE STOCK OPTION AGREEMENT
Dear ______________:
The Board of Directors of Peoples Bancorp, Inc. ("Bancorp") hereby
notifies you (the "Employee") of Bancorp's grant to you of an incentive stock
option (the "Option") to purchase shares of Bancorp's common stock (the "Stock")
on the following terms and conditions:
1. PLAN. This Option is granted pursuant to the provisions of Bancorp's
----
Employee Incentive Stock Option Plan (the "Plan") and the terms and
conditions of the Plan are incorporated herein by reference and made a
part hereof. This Option is subject to, and Bancorp and the Employee
agree to be bound by, all of the terms and conditions of the Plan under
which this Option was granted as the same shall have been amended from
time to time in accordance with the terms thereof. A copy of the Plan
has been delivered to, and receipt is hereby acknowledged by, the
Employee.
2. OPTION. Bancorp hereby grants to the Employee the Option to purchase
------
all or any part of the aggregate of such number of shares of the Stock
subject to the terms and condition of the Plan and as set forth on
Exhibit "A" attached hereto and incorporated herein by reference.
3. NON-TRANSFERABLE OPTION. This Option and all rights hereunder are
-----------------------
neither assignable nor transferable by the Employee otherwise than by
will or under applicable laws of descent and distribution, and during the
Employee's lifetime this Option is exercisable only by him. Without
limiting the generality of the foregoing, this Option shall not be
transferred, assigned, pledged or hypothecated in any way (whether by
operation of law or otherwise) and shall not be subject to execution,
attachment or similar process.
4. NOTICE OF EXERCISE OF OPTION. This Option may be exercised by the
----------------------------
Employee or by his administrators, executors or personal representatives
by written notice in substantially the form of "Notice of Exercise"
attached hereto as Exhibit "B", and accompanied by a certified or
cashier's check payable to Bancorp in payment of the Option exercise
price applicable to such Stock as provided herein. Upon receipt of such
notice and accompanying payment, subject to the terms hereof, Bancorp
shall cause to be issued to the Employee or to his representatives,
executors, or personal representatives, as the case may be, a
certificate(s) for the number of shares of Stock purchased hereunder
which will be registered in the name of the person exercising this
Option.
Acceptance by the Employee of the certificate(s) representing the Stock
purchased hereunder shall constitute a confirmation by the Employee that
the representations, warranties, acknowledgments and agreements made
herein shall be true and correct at that time.
5. RESTRICTIONS ON STOCK TRANSFER. The Employee represents and warrants to
------------------------------
Bancorp that he will acquire these securities for his own account, for
investment purposes only and not with a view to sale or distribution
thereof, in whole or in part, and that he has such knowledge and
experience in the business and financial matters of Bancorp that he is
capable of evaluating the merits and risks of an investment in these
securities. The Employee acknowledges and agrees that these securities
have not been registered under the Securities Act of 1933 in reliance on
an exemption thereunder for transactions not involving a public offering;
that the undersigned shall have no right to require that Bancorp register
these securities under the Securities Act of 1933; and that the Employee
can bear the economic risks of the investment for an indefinite period of
time as there may not be an active public market for these securities.
The following legend shall be placed on the certificate(s)
representing the Stock purchased by the Employee hereunder:
THESE SECURITIES HAVE BEEN ISSUED OR SOLD IN RELIANCE UPON EXEMPTIONS
FROM THE REGISTRATION REQUIREMENTS UNDER FEDERAL AND STATE SECURITIES
6
<PAGE>
LAWS. THESE SECURITIES MAY NOT BE SOLD OR TRANSFERRED EXCEPT IN A
TRANSACTION WHICH IS (1) EXEMPT UNDER FEDERAL OR STATE SECURITIES LAWS OR
PURSUANT TO AN EFFECTIVE REGISTRATION UNDER FEDERAL OR STATE SECURITIES
LAWS OR THAT IS OTHERWISE IN COMPLIANCE WITH FEDERAL OR STATE SECURITIES
LAWS OR (2) UPON RECEIPT OF AN OPINION OF COUNSEL SATISFACTORY TO PEOPLES
BANCORP, INC. WITH RESPECT TO COMPLIANCE WITH FEDERAL AND STATE
SECURITIES LAWS.
THESE SECURITIES HAVE BEEN ISSUED OR SOLD IN RELIANCE ON PARAGRAPH (13)
OF CODE SECTION 10-5-9 OF THE GEORGIA SECURITIES ACT OF 1973, AND MAY NOT
BE SOLD OR TRANSFERRED EXCEPT IN A TRANSACTION WHICH IS EXEMPT UNDER SUCH
ACT OR PURSUANT TO AN EFFECTIVE REGISTRATION UNDER SUCH ACT.
6. ENTIRE AGREEMENT. Subject to the terms and conditions of the Plan,
----------------
which is incorporated herein by reference, this Agreement expresses the
entire understanding and agreement of the parties hereto.
Please execute this Agreement in the space provided below to evidence
your acceptance hereof.
PEOPLES BANCORP, INC.
By:_________________________________
Title:______________________________
Date:_______________________________
READ AND AGREED TO:
_______________________________
Employee
Date:__________________________
7
<PAGE>
EXHIBIT "A"
TO EMPLOYEE STOCK OPTION AGREEMENT
BETWEEN
PEOPLES BANCORP, INC.
AND
___________________________
24. Type of Option: this is an _____ "Incentive" or _____ "Nonqualified" Option
--------------
(as defined in the Plan).
25. Number of Shares Subject to Option: ______________________ (_________)
----------------------------------
Shares.
26. Option Exercise Price: $___________ per Share.
---------------------
27. Date of Grant: ________________________
-------------
28. Option Vesting Schedule
-----------------------
Check one:
( ) Options are exercisable with respect to all Shares on or after the
date hereof.
( ) Options are exercisable with respect to the number of Shares
indicated below on or after the date set next to the number of
Shares:
No. of Shares Vesting Date
------------- ------------
29. Option Exercise Period:
----------------------
Check one:
( ) All options expire and are void unless exercised on or before
______________, ______.
( ) Options expire and are void unless exercised on or before the date
indicated next to the number of Shares:
No. of Shares Vesting Date
------------- ------------
30. Effect of Termination of Employment of Employee:
-----------------------------------------------
Check one:
( ) Options automatically terminate at the date of termination of
employment.
( ) Employee may exercise options for a period of up to three months from
the date of termination, but only to the extent of the number of
shares which could be exercised at such date of termination.
8
<PAGE>
EXHIBIT "B"
NOTICE OF EXERCISE
(TO BE EXECUTED UPON EXERCISE OF STOCK OPTIONS)
TO: Peoples Bancorp, Inc.
The undersigned hereby exercises the right to purchase _______ shares
of common stock (the "Shares") covered by the attached Employee Incentive Stock
Option Agreement in accordance with the terms and conditions thereof, and
herewith makes payment of the Option Exercise Price for such Shares in full.
The undersigned hereby directs that the certificates for such Shares be issued
in the name of, and delivered to __________________ whose address is
__________________________. If the number of Shares so purchased shall not be
all of the Shares purchasable under such Employee Incentive Stock Option
Agreement, a new Employee Incentive Stock Option Agreement for the balance
remaining of the shares purchasable thereunder shall be issued in the name of
and delivered to the undersigned at the address shown below.
This _______ day of _____________, ______.
_______________________________________________________
(Signature must conform in all respects to name of
Employee as specified on the face of the Employee
Incentive Stock Option Agreement)
______________________________________________________
Street Address
______________________________________________________
City State Zip Code
______________________________________________________
Social Security Number
9
<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
September 18, 1996
<PAGE>
EXHIBIT 11
OPINION OF HOLLAND & KNIGHT
September 3, 1996
Peoples Bancorp, Inc.
516 Bankhead Highway
Carrollton, Georgia 30117
Ladies and Gentlemen:
We are acting as counsel for Peoples Bancorp, Inc. (the "Company") in
connection with the issuance by the Company of shares of Common Stock, as
described in the Registration Statement filed on Form SB-1 (the "Registration
Statement") by the Company under the Securities Act of 1933, as amended.
We have examined such documents as we have deemed necessary or appropriate
for the purpose of our opinion. In our examination, we have assumed the
authenticity of all signatures, the authenticity of all documents submitted to
us as original, and the conformity to the originals of all documents submitted
to us as certified, photostatic or conformed copies.
Based upon the foregoing, we are of the opinion that:
1. The Company is duly incorporated and is validly existing as a
corporation under the laws of Georgia.
2. After the Registration Statement becomes effective and the provisions
of applicable state securities laws have been complied with, the shares of
Common Stock, when issued in accordance with the terms described in the
Registration Statement, will be validly issued, fully paid and non-assessable
under the laws of Georgia.
We consent to the filing of this opinion as an exhibit to the Registration
Statement and to the reference to our firm name under the heading "Legal
Matters" in the Prospectus which is a part of the Registration Statement.
Best regards,
HOLLAND & KNIGHT
