<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON OCTOBER 18, 1996
REGISTRATION NO. 33-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------
FORM SB-2
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
----------------
DECATUR FIRST BANK GROUP, INC.
(NAME OF SMALL BUSINESS ISSUER IN ITS CHARTER)
GEORGIA 6712 58-2254289
(STATE OR JURISDICTION (PRIMARY STANDARD (I.R.S. EMPLOYER
OF INDUSTRIAL IDENTIFICATION NO.)
INCORPORATION OR CLASSIFICATION CODE
ORGANIZATION) NUMBER)
755 COMMERCE DRIVE
SUITE 516
DECATUR, GEORGIA 30030
(404) 373-6548
(ADDRESS, AND TELEPHONE NUMBER
OF PRINCIPAL EXECUTIVE OFFICES)
----------------
1120 COMMERCE DRIVE
DECATUR, GEORGIA 30030
(404) 373-6548
(ADDRESS OF PRINCIPAL PLACE OF BUSINESS OR
INTENDED PRINCIPAL PLACE OF BUSINESS)
----------------
JUDY B. TURNER COPY TO:
755 COMMERCE DRIVE KATHRYN L. KNUDSON, ESQ.
SUITE 516 POWELL, GOLDSTEIN, FRAZER
DECATUR, GEORGIA 30030 & MURPHY
(404) 373-6548 191 PEACHTREE STREET, N.E.
(NAME, ADDRESS, AND ATLANTA, GEORGIA 30303
TELEPHONE NUMBER, OF (404) 572-6600
AGENT FOR SERVICE)
----------------
APPROXIMATE DATE OF PROPOSED SALE TO THE PUBLIC: As soon as practicable
after this Registration Statement becomes effective.
If this Form is filed to register additional securities for an offering
pursuant to rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [_]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
If the delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box. [_]
CALCULATION OF REGISTRATION FEE
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<TABLE>
<CAPTION>
PROPOSED PROPOSED
TITLE OF EACH CLASS OF AMOUNT MAXIMUM MAXIMUM AMOUNT OF
SECURITIES TO BE TO BE OFFERING PRICE AGGREGATE REGISTRATION
REGISTERED REGISTERED PER UNIT OFFERING PRICE FEE
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<S> <C> <C> <C> <C>
Common Stock, $5.00 par
value................ 1,200,000 Shares $10.00 $12,000,000 $3,637.00
</TABLE>
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THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS
REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH
SECTION 8(A) OF THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID
SECTION 8(A), MAY DETERMINE.
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<PAGE>
DECATUR FIRST BANK GROUP, INC.
CROSS-REFERENCE SHEET
<TABLE>
<CAPTION>
REGISTRATION STATEMENT ITEM NUMBER
AND HEADING CAPTION IN PROSPECTUS
---------------------------------- ---------------------
<C> <S> <C>
1. Front of the Registration
Statement and Outside Front Cover Page; Outside Front Cover Page
Cover Page of Prospectus..... of Prospectus
2. Inside Front and Outside Back
Cover Pages of Prospectus.... Inside Front Cover Page of
Prospectus; Additional Information;
Outside Back Cover Page of
Prospectus
3. Summary Information and Risk
Factors...................... Summary; Risk Factors
4. Use of Proceeds............... Use of Proceeds
5. Determination of Offering
Price........................ Risk Factors
6. Dilution...................... Not Applicable
7. Selling Security Holders...... Not Applicable
8. Plan of Distribution.......... Terms of the Offering
9. Legal Proceedings............. Not Applicable
10. Directors, Executive Officers,
Promoters and Control Management--Proposed Directors and
Persons...................... Officers
11. Securities Ownership of
Certain Beneficial Owners and Management--Proposed Directors and
Management................... Officers
12. Description of the Dividends; Description of Common
Securities................... Stock of the Company; Certain
Provisions of the Company's
Articles of Incorporation and
Bylaws
13. Interests of Named Experts and
Counsel...................... Not Applicable
14. Disclosure of Commission
Position on Indemnification Certain Provisions of the Company's
for Securities Act Articles of Incorporation and
Liabilities.................. Bylaws-Indemnification
15. Organization Within Last Five
Years........................ Management
16. Description of Business....... Summary; Business; Supervision and
Regulation
17. Management's Discussion and
Analysis or Plan of
Operation.................... Business
18. Description of Property....... Business--Facilities
19. Certain Relationships and
Related Transactions......... Management--Certain Transactions
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
REGISTRATION STATEMENT ITEM NUMBER
AND HEADING CAPTION IN PROSPECTUS
---------------------------------- ---------------------
<C> <S> <C>
20. Market for Common Equity and
Related Stockholder Matters... Description of Common Stock of the
Company
21. Executive Compensation......... Management
22. Financial Statements........... Balance Sheet of Decatur First Bank
Group, Inc.
23. Changes in and Disagreement
With Accountants on Accounting
and Financial Disclosure...... Not Applicable
</TABLE>
<PAGE>
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A +
+REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE +
+SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY +
+OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT +
+BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR +
+THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE +
+SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE +
+UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF +
+ANY STATE. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
PRELIMINARY PROSPECTUS DATED OCTOBER 18, 1996;
SUBJECT TO COMPLETION
DECATUR FIRST BANK GROUP, INC.
A PROPOSED BANK HOLDING COMPANY FOR
DECATUR FIRST BANK (IN ORGANIZATION)
1,200,000 SHARES OF COMMON STOCK
(PAR VALUE $5.00 PER SHARE)
(MINIMUM PURCHASE: 100 SHARES)
This Prospectus relates to the offering by DECATUR FIRST BANK GROUP, INC., a
Georgia corporation (the "Company") of a minimum of 710,000 shares and a
maximum of 1,200,000 shares of its Common Stock, $5.00 par value per share (the
"Common Stock"), at the purchase price of $10.00 per share. The Company has
been organized to hold, upon receipt of regulatory approvals, all of the common
stock of DECATUR FIRST BANK (In Organization) (the "Bank"), Decatur, Georgia.
The organizers of the Company and the Bank intend to subscribe for an aggregate
of at least 155,000 of the shares of Common Stock sold in this offering (21.8%
of the minimum and 12.9% of the maximum number of shares to be sold). In the
event that the minimum number of shares in this offering is not sold, the
organizers may acquire additional shares of Common Stock, up to a maximum
aggregate number for all organizers of 298,200 shares (42% of the minimum and
24.8% of the maximum number of shares to be sold). The organizers of the Bank
will not be granted options or warrants in connection with the formation of the
Bank; instead, the organizers will be entitled to purchase shares on the same
basis as all other investors. The Company and the Bank have not conducted
active business operations. The commencement of business operations is
contingent upon various regulatory approvals by state and federal agencies and
the sale of a minimum of 710,000 shares of the Common Stock offered hereby. ALL
SUBSCRIPTIONS ARE BINDING AND IRREVOCABLE UNTIL THE "EXPIRATION DATE" AS
DEFINED HEREIN. In the event (a) that the Company is unable to sell 710,000
shares of Common Stock or (b) that the Company and the Bank do not satisfy, or
do not make a determination that they will satisfy, the conditions included in
their respective regulatory approvals, the organizers of the Company will pay
all incurred expenses, and all escrowed subscription proceeds will be returned
to investors without interest. See "THE OFFERING--Release From Escrow"--Page 9.
INVESTMENT IN THESE SECURITIES INVOLVES A SUBSTANTIAL DEGREE OF RISK. SEE "RISK
FACTORS"--PAGE 5
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.
THE SHARES OF COMMON STOCK OFFERED HEREBY ARE NOT SAVINGS ACCOUNTS, DEPOSITS
OR OTHER OBLIGATIONS OF A BANK OR SAVINGS ASSOCIATION AND ARE NOT INSURED
BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENTAL
AGENCY.
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<TABLE>
<CAPTION>
UNDERWRITING
PRICE TO DISCOUNTS AND PROCEEDS TO
PUBLIC(1) COMMISSIONS COMPANY(3)
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<S> <C> <C> <C>
Per Share.......................... $ 10.00 -0- $ 10.00
- --------------------------------------------------------------------------------
Total Minimum(4)................... $ 7,100,000.00 -0- $ 7,100,000.00
- --------------------------------------------------------------------------------
Total Maximum(5)................... $12,000,000.00 -0- $12,000,000.00
</TABLE>
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(1) The offering price has been arbitrarily established by the Company. See
"RISK FACTORS--Offering Price Arbitrarily Determined"--Page 7.
(2) Offers and sales of the Common Stock will be made on behalf of the Company
on a best-efforts basis by its officers and directors, who will receive no
commissions or other remuneration in connection with such activities, but
they will be reimbursed for their reasonable expenses incurred in the
offering. In reliance on Rule 3a4-1 of the Securities Exchange Act of 1934,
as amended (the "Exchange Act"), the Company believes such officers and
directors will not be deemed to be brokers and/or dealers under the
Exchange Act.
(3) Before deducting offering and organizational operating expenses of the
Company. Such expenses are estimated to be approximately $52,000.
(4) Subscription proceeds will be deposited promptly in an escrow account with
The Bankers Bank, Atlanta, Georgia, pending receipt of subscriptions for
not less than 710,000 shares and completion of certain other matters on or
before */, the expiration date of the offering (unless the offering is
terminated sooner or extended). Subscription funds will be released from
escrow (a) upon the receipt of $7,100,000 of subscription proceeds and (b)
upon a determination by the organizers that the remaining conditions set
forth in the preliminary approvals issued by the applicable regulatory
agencies will be satisfied. See "THE OFFERING--Terms of the Offering." The
Company will return to each subscriber, without interest, the amount of any
proceeds received in full with respect to subscriptions that are not
accepted.
(5) The Company reserves the right to issue up to 1,200,000 shares at $10.00
per share. See "THE OFFERING--Terms of the Offering."
The date of this Prospectus is , 1996.*/
- -----
*/ The blanks will be completed when the Company's Registration Statement on
Form SB-2 is declared effective by the Securities and Exchange Commission.
<PAGE>
REPORTS TO SHAREHOLDERS
The Company is not a reporting company as defined by the Securities and
Exchange Commission ("SEC"). The Company will furnish its shareholders with
annual reports containing audited financial information for each fiscal year
on or before the date of the annual meeting of shareholders as required by
Rule 80-6-1-.05 of the Georgia Department of Banking and Finance ("Department
of Banking"). The Company's fiscal year ends on December 31. Additionally, the
Company will also furnish such other reports as it may determine to be
appropriate or as otherwise may be required by law.
Upon the effective date of the Registration Statement, the Company will be
subject to the reporting requirements of the Securities Exchange Act of 1934
(the "Exchange Act"), which include requirements to file annual reports on
Form 10-K and quarterly reports on Form 10-Q with the SEC. This reporting
obligation will exist for at least one year and will continue for fiscal years
thereafter, except that such reporting obligations may be suspended for any
subsequent fiscal year if at the beginning of such year the Common Stock of
the Company is held of record by less than three hundred persons.
ADDITIONAL INFORMATION
The Company has filed with the SEC a Registration Statement under the
Securities Act of 1933, as amended, with respect to the Common Stock offered
hereby. This Prospectus does not contain all of the information set forth in
the Registration Statement. For further information with respect to the
Company and the Common Stock, reference is made to the Registration Statement
and the exhibits thereto. The Registration Statement may be examined at, and
copies of the Registration Statement may be obtained at prescribed rates from,
the Public Reference Section of the SEC, Room 1024, 450 Fifth Street, N.W.,
Washington, DC 20549. The SEC also maintains a Web site (http://www.sec.gov)
that contains reports, proxy and information statements and other information
regarding registrants, such as the Company, that file electronically with the
Commission.
The Company and the organizers have filed or will file various applications
with the Federal Deposit Insurance Corporation, the Federal Reserve Bank of
Atlanta and the Department of Banking. Prospective investors should rely only
on information contained in this Prospectus and in the Company's related
Registration Statement in making an investment decision. To the extent that
other available information not presented in this Prospectus, including
information available from the Company and information in public files and
records maintained by the Federal Deposit Insurance Corporation, the Federal
Reserve Bank of Atlanta and the Department of Banking, is inconsistent with
information presented in this Prospectus or provides additional information,
such other information is superseded by the information presented in this
Prospectus and should not be relied on. Projections appearing in the
applications are based on assumptions that the organizers believe are
reasonable, but as to which no assurances can be made. The Company
specifically disaffirms those projections for purposes of this Prospectus and
cautions prospective investors against placing reliance on them for purposes
of making an investment decision.
2
<PAGE>
SUMMARY
The following Summary is qualified in its entirety by the more detailed
information appearing elsewhere in this Prospectus.
THE COMPANY
The Company was incorporated under the laws of the State of Georgia on August
2, 1996, primarily to serve as the holding company for a state bank. After the
Bank receives preliminary approval from the Department of Banking, the Company
will file applications with the Federal Reserve Bank of Atlanta (the "Federal
Reserve") and the Department of Banking for prior approval to become a bank
holding company by using the proceeds of this offering to acquire all of the
capital stock of the Bank. The organizers anticipate receiving such approvals
during the first quarter of 1997. Such approvals will require the Company to
sell at least 710,000 shares of its Common Stock, but are not expected to
contain other conditions. See "RISK FACTORS--Regulatory Approvals Required."
Following acquisition of the Bank, the initial business of the Company will be
conducted through the Bank. See "BUSINESS OF THE COMPANY AND THE BANK."
THE BANK
The Bank is in the process of being organized as a state-chartered bank under
Georgia law. It has filed an application with the Department of Banking for
this purpose and with the Federal Deposit Insurance Corporation (the "FDIC")
for deposit insurance, and such applications are pending. The Bank will not be
authorized to conduct its banking business until it receives a permit to begin
business from the Department of Banking. The issuance of the permit to begin
business will depend, among other things, upon the Bank's receiving $7,000,000
in capital from the Company and upon compliance with certain standard
conditions expected to be imposed by the FDIC and the Department of Banking
which are generally designed to familiarize the Bank with certain applicable
operating requirements (e.g., no directors' fees are payable until the Bank
earns a cumulative profit) and to prepare the Bank to commence business
operations (e.g., the adoption of loan, investment and other policies to govern
the Bank's operations). The Bank expects to satisfy all conditions for
organizing the Bank and to open for business during the second quarter of 1997,
or as soon thereafter as practicable. See "RISK FACTORS--Regulatory Approvals
Required" and "USE OF PROCEEDS." The Bank intends to engage in a general
commercial banking business, emphasizing the banking needs of individuals and
small to medium-sized businesses in its primary service area. See "BUSINESS OF
THE COMPANY AND THE BANK."
The Bank's philosophy with respect to its initial operations will be to
emphasize prompt and responsive personal service to the residents of Decatur,
Georgia and the other communities located in DeKalb County in order to attract
customers and acquire market share now controlled by other financial
institutions in the Bank's market area. The organizers believe that the Bank
offers the residents of Decatur and the surrounding areas the opportunity to
have an ownership interest in a community bank, while also receiving the
benefits associated with a locally owned and managed community bank. Through
ownership in the Company, the residents of the community will have a greater
role in the development of the Bank.
The offices of the Company and the Bank will be located at 1120 Commerce
Drive, Decatur, Georgia 30030. The current principal executive office of the
Company and the Bank is located at: 755 Commerce Drive, Suite 516, Decatur,
Georgia 30030 and their telephone number at that address is (404) 373-6548.
3
<PAGE>
THE OFFERING
Security ...................
Common Stock, $5.00 par value, of the Company
Offering Price ............. $10.00 per share
Number of Shares Offered ... Minimum: 710,000
Maximum: 1,200,000
Use of Proceeds ............
To purchase 100% of the Common Stock of the Bank;
to pay organizational expenses of the Company and
of this offering; and to provide working capital
for the Company.
The Bank will use the proceeds of this offering
to pay organizational and pre-opening operating
expenses, including paying officers' and
employees' salaries; to lease, renovate and
furnish a site for the Bank's main office; and,
following the commencement of business, to
provide working capital to be used for business
purposes, including making loans and other
investments. See "USE OF PROCEEDS."
RISK FACTORS
Investment in the Common Stock involves a significant degree of risk. See
"RISK FACTORS."
4
<PAGE>
RISK FACTORS
Investment in the shares of the Common Stock offered hereby involves a
significant degree of risk. The shares of Common Stock should be purchased by
investors who can afford the loss of their entire investment. In addition to
considering 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.
THE SHARES OF COMMON STOCK OFFERED HEREBY ARE NOT SAVINGS ACCOUNTS,
DEPOSITS OR OTHER OBLIGATIONS OF A BANK OR SAVINGS ASSOCIATION AND ARE
NOT INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER
GOVERNMENTAL AGENCY.
REGULATORY APPROVALS REQUIRED
The Company must receive the approval of the Federal Reserve and the
Department of Banking before it can become the holding company of the Bank.
The Bank has filed an application for approval to organize a state bank with
the Department of Banking. Once the Bank receives preliminary approval from
the Department of Banking, the Company will file an application with the
Federal Reserve and the Department of Banking to become a bank holding
company. The organizers anticipate receiving such approvals from the Federal
Reserve and the Department of Banking during the first quarter of 1997. Such
approvals will require the Company to sell at least 710,000 shares of its
Common Stock but are not expected to contain other conditions.
The Bank's application to organize a new state bank and for federal deposit
insurance was filed with the Department of Banking and the FDIC on September
16, 1996. As of October 18, 1996, the application with the Department of
Banking and the FDIC was pending. The organizers expect that both approvals
will be subject to the condition that at least $7,000,000 be invested in the
Bank by the Company, as well as a number of other standard conditions which
are regularly imposed by the Department of Banking and the FDIC and are
generally designed to familiarize the Bank with certain applicable operating
requirements (e.g., no directors' fees are payable until the Bank earns a
cumulative profit) and to prepare the Bank to commence business operations
(e.g., the adoption of loan, investment and other policies to govern the
Bank's operations).
RELEASE FROM ESCROW
Subscription proceeds will be deposited in an escrow account with The
Bankers Bank, Atlanta, Georgia (the "Escrow Agent") for the Company pending
completion of this offering. See "THE OFFERING--Escrow." Subscription proceeds
will be released from escrow to the Company upon the occurrence of all of the
following events: (a) the sale by the Company of at least 710,000 shares of
its Common Stock, (b) receipt by the Company of approval from the Federal
Reserve and the Department of Banking to become a bank holding company, (c)
satisfaction by the Company of, or a determination by the Company that it will
satisfy, all of the conditions that the Federal Reserve and the Department of
Banking may impose in their approvals to the Company, (d) receipt by the Bank
of approval from the Department of Banking and the FDIC of the Bank's
application to organize a new state bank and for deposit insurance, and (e)
satisfaction by the Bank of, or a determination by the Bank that it will
satisfy, all of the conditions that the Department of Banking and the FDIC
have imposed in their approvals to the Bank.
If the above conditions are met, the Company intends to instruct the Escrow
Agent to release to the Company the amount of subscription proceeds relating
to subscriptions or portions thereof accepted by the Company. Shares of the
Company's Common Stock will be issued to subscribers once the subscription
proceeds have been released from escrow.
The Bank expects to receive approvals from the Department of Banking and the
FDIC during the first quarter of 1997. The Company also expects to receive
approvals from the Federal Reserve and the Department of Banking during the
first quarter of 1997. In the opinion of the organizers, the only significant
condition to the
5
<PAGE>
foregoing approvals will be that a minimum of 710,000 shares of Common Stock
of the Company has to be sold in this offering. If the requisite shares are
not sold, or if the Company or the Bank determine that they cannot satisfy the
other conditions included in the approvals by the expiration date of this
offering (see "THE OFFERING--Offering Period and Expiration Date"), then the
subscriptions agreements will be of no further force and effect, and the full
amount of all subscription funds will be returned to the subscribers within
five business days after such expiration date.
It is possible that subsequent to the release of the subscription funds from
escrow (the requisite shares having been sold and the determination having
been made that the other regulatory conditions will be satisfied) events could
occur which could have the effect of preventing the Bank from commencing
business. If that were to occur, the Company intends to liquidate and would
return to the then shareholders of the Company the portion of their investment
which is equal to their total investment less their pro rata share of the
expenses incurred by the Company and the Bank. See "USE OF PROCEEDS," and
"CAPITALIZATION." While no assurance can be given that the foregoing will not
take place, the organizers cannot foresee any such events and believe it is
highly unlikely that such events will occur. After consulting with applicable
regulatory authorities, the organizers are not aware of any Georgia state
banks which failed to commence business after they or their holding companies
had raised the required capital. See "THE OFFERING--Release from Escrow."
NO OPERATING HISTORY
The Bank, which will be the sole subsidiary of the Company, is in
organization and has no operating history on which to base any estimate of its
future prospects. The Company's initial profitability will depend entirely
upon the Bank's operations. The Bank's proposed operations are subject to
risks inherent in the establishment of a new business and, specifically, of a
new bank. Initially, all of the Bank's loans will be unseasoned--new loans to
new borrowers. Accordingly, it will take several years to determine the
borrowers' payment histories and, therefore, the quality of the Bank's loan
portfolio cannot be determined until that time. While the Bank's pro forma
financial statements project a substantial loss in the first year of
operations and a profit by the end of the second year of operations,
unforeseen circumstances could delay such profit. If the Bank is ultimately
unsuccessful, there is no assurance that shareholders will recover all or any
part of their investment in the Common Stock of the Company.
COMPETITIVE INDUSTRY
The banking business is highly competitive. The Bank will compete as a
financial intermediary with other commercial banks, savings and loan
associations, credit unions, finance companies, mutual funds, insurance
companies, and brokerage and investment banking firms soliciting business from
residents of DeKalb County, Georgia, many of which have greater resources than
will be available to the Bank or the Company. See "BUSINESS OF THE COMPANY AND
THE BANK--The Bank--Competition and Historic Deposit Trends."
HIGHLY REGULATED INDUSTRY
The potential success or failure of the Bank will depend not only upon
competitive factors, but also upon state and federal regulations affecting
banks and bank holding companies generally. Regulations now affecting the
Company and the Bank may be changed at any time, and there is no assurance
that such changes will not adversely affect the business of the Company and
the Bank.
EFFECT OF MONETARY POLICIES
The results of operations of the Bank will be affected by credit policies of
monetary authorities, particularly the Board of Governors of the Federal
Reserve System. There can be no assurance that the effect of actions by
monetary and fiscal authorities, including the Federal Reserve, will not have
an adverse effect on the deposit levels, loan demand or the business and
earnings of the Bank. See "SUPERVISION AND REGULATION--Monetary Policies."
6
<PAGE>
SUCCESS DEPENDS ON ECONOMIC CONDITIONS
The success of the Bank will depend largely on the general economic
conditions in the Bank's primary service area of DeKalb County, Georgia.
Although the Bank expects favorable economic development in this market area,
there is no assurance that favorable economic development will occur or that
the Bank's expectation of corresponding growth will be achieved. See "BUSINESS
OF THE COMPANY AND THE BANK."
OFFERING PRICE ARBITRARILY DETERMINED
Since the Company and the Bank are in the process of being organized, the
offering price of $10.00 per share has been determined arbitrarily by the
organizers without particular reference to historical or projected earnings,
book value or other customary criteria. The organizers did not retain an
independent investment banking firm to assist in determining the offering
price. Should a market develop for the Common Stock of the Company, there is
no assurance that any of the Common Stock offered hereby could be resold for
the offering price or any other amount.
NO DIVIDENDS
Since the Company and the Bank are both start-up operations, it will be the
policy of the Board of Directors of the Company to reinvest earnings for the
period of time necessary to help ensure the success of their operations. As a
result, the Company has no current plans to initiate the payment of cash
dividends, and its future dividend policy will depend on the Bank's earnings,
capital requirements, financial condition and other factors considered
relevant by the Board of Directors of the Company. See "SUPERVISION AND
REGULATION--Bank Regulation."
NO ESTABLISHED TRADING MARKET
There is no public trading market for the shares of the Common Stock of the
Company, and it is not anticipated that an active market for the shares will
develop as a result of this offering. As a result, investors who may wish or
need to dispose of all or a part of their investment in the Common Stock may
not be able to do so except by private direct negotiations with third parties
assuming that third parties are willing to purchase the Common Stock.
7
<PAGE>
THE OFFERING
MINIMUM/MAXIMUM
The Company is offering a minimum of 710,000 shares and a maximum of
1,200,000 shares of its Common Stock for a price of $10.00 per share, for an
aggregate minimum price of $7,100,000 and an aggregate maximum price of
$12,000,000. The minimum purchase for any investor (together with the
investor's affiliates) is 100 shares of Common Stock ($1,000) unless the
Company, in its sole discretion, accepts a subscription for a lesser number of
shares. The maximum purchase for any investor (together with the investor's
affiliates) is 29,890 shares ($298,900) of Common Stock, unless the Company,
in its sole discretion, accepts a subscription for a greater number of shares.
ORGANIZER SUBSCRIPTIONS
The organizers of the Company intend to purchase an aggregate of 155,000
shares of Common Stock sold in the offering (21.8% of the minimum and 12.9% of
the maximum number of shares to be sold). No organizer intends to individually
purchase more than 5% of shares sold in this offering. In the event, however,
that the minimum number of shares in this offering are not sold, the
organizers may acquire additional shares of the Common Stock, up to a maximum
aggregate number for all organizers of 298,200 shares (42% of the minimum and
24.8% of the maximum number of shares to be sold.)
OFFERING PERIOD AND EXPIRATION DATE
The offering period for the shares will terminate at the earlier of the date
all shares offered hereby are sold or 5:00 p.m. Decatur, Georgia time, on
.*/ This date may be extended at the discretion of the Company for
additional periods not exceeding an aggregate extension of 180 days (i.e.,
until ).*/ Written notice of any such extension will be given to all
persons who are already subscribers at the time of the extension. The date on
which this offering terminates plus any extension thereof is referred to in
this Prospectus as the "Expiration Date."
ESCROW
Subscription proceeds will be deposited in an escrow account with The
Bankers Bank, Atlanta, Georgia, as escrow agent (the "Escrow Agent") for the
Company pending completion of this offering. Subscription proceeds held in the
escrow account will be invested in short-term deposit accounts or certificates
of deposit which are fully insured by the FDIC or securities of the United
States or an agency of the United States Government with 30-day maturities or
in such other short-term investments as may be agreed upon by the Company and
the Escrow Agent from time to time. The Escrow Agent has not investigated the
desirability or advisability of an investment in the Company, and has not
approved, endorsed or passed upon the merits of the Common Stock.
COMPANY DISCRETION
The Company reserves the right, in its sole discretion, to accept or reject
any subscription in whole or in part on or before the Expiration Date. Without
limiting the generality of the foregoing, the Company also reserves the right
to accept subscriptions on a prorated basis if it receives subscriptions for
more than 1,200,000 shares. The Company will notify all subscribers within
five business days after the Expiration Date whether their subscriptions have
been accepted. With respect to any subscriptions which are not accepted, in
whole or in part, by the Company, the notification will be accompanied by the
unaccepted portion of the subscription funds.
TERMINATION
The Company reserves the right to terminate the offering at any time after
710,000 shares have been subscribed for if the Company determines that the
total amount of subscriptions will provide adequate capitalization for the
Company after payment of expenses.
- --------
*/ The blanks will be completed when the Company's Registration Statement on
Form SB-2 is declared effective by the Securities and Exchange Commission.
8
<PAGE>
RELEASE FROM ESCROW
Subscription proceeds will be released from escrow to the Company upon the
occurrence of all of the following events: (a) the sale by the Company of at
least 710,000 shares of its Common Stock, (b) receipt by the Company of
approval from the Federal Reserve and the Department of Banking to become a
bank holding company, (c) satisfaction by the Company of, or a determination
by the Company that it will satisfy, all of the conditions that the Federal
Reserve and the Department of Banking may impose in their approvals to the
Company, (d) receipt by the Bank of approval from the Department of Banking
and the FDIC of the Bank's application to organize a new state bank and for
deposit insurance, and (e) satisfaction by the Bank of, or a determination by
the Bank that it will satisfy, all of the conditions that the Department of
Banking and the FDIC have imposed in their approvals to the Bank.
If the above conditions are met, the Company intends to instruct the Escrow
Agent to release to the Company the amount of subscription proceeds relating
to subscriptions or portions thereof accepted by the Company, together with
any interest earned thereon. Shares of the Company's Common Stock will be
issued to subscribers once the subscription proceeds have been released from
escrow. Any subscription proceeds received after the above conditions are met
but before termination of this offering will not be deposited in the escrow
account, and will be available for immediate use by the Company, to the extent
accepted by the Company.
The Bank expects to receive approvals from the Department of Banking and the
FDIC during the first quarter of 1997. The Company also expects to receive
approvals from the Federal Reserve and the Department of Banking during the
first quarter of 1997. In the opinion of the organizers, the only significant
condition to all of the foregoing approvals will be that a minimum of 710,000
shares of Common Stock of the Company has to be sold in this offering. If the
requisite shares are not sold, or if the Company or the Bank determine that
they cannot satisfy the other conditions included in the approvals by the
Expiration Date, then the subscription agreements will be of no further force
or effect, and the full amount of all subscription funds will be returned to
the subscribers within five business days after the Expiration Date.
It is possible that subsequent to the release of the subscription funds from
escrow (the requisite shares having been sold and the determination having
been made that the other regulatory conditions will be satisfied) events could
occur which could have the effect of preventing the Bank from commencing
business. If that were to occur, the Company intends to liquidate and would
return to the then shareholders of the Company the portion of their investment
which is equal to their total investment less their pro rata share of the
expenses incurred by the Company and the Bank. See "USE OF PROCEEDS," and
"CAPITALIZATION." While no assurance can be given that the foregoing will not
take place, the organizers cannot foresee any such events and believe it is
highly unlikely that such events will occur. After consulting with applicable
regulatory authorities, the organizers are not aware of any Georgia state
banks which failed to commence business after they or their holding companies
had raised the required capital.
PLAN OF DISTRIBUTION
Offers and sales of the Common Stock will be made on behalf of the Company
primarily by certain of its officers and directors. The officers and directors
will receive no commissions or other remuneration in connection with such
activities, but they will be reimbursed for their reasonable expenses incurred
in the offering. In reliance on Rule 3a4-1 of the Exchange Act, the Company
believes such officers and directors will not be deemed to be brokers and/or
dealers under the Exchange Act.
The Company may find it necessary to utilize the services of brokers and/or
dealers in order to effect the sale of the Common Stock in certain
jurisdictions. The Company has no present arrangements or agreements with any
such brokers and/or dealers with respect to this offering. The Company
anticipates that all such arrangements, if any, will be on a "best efforts"
basis, with the Company paying to the broker and/or dealer a commission based
on the shares sold through its efforts. The Company believes that the range of
possible commissions to be paid to brokers and/or dealers in such transactions
is $.50 to $.70 per share and that the
9
<PAGE>
maximum average commission payable in the offering when all shares subject to
this offering are taken into account is $0.10. The Company anticipates that
those sales of Common Stock requiring the use of brokers and/or dealers will
not comprise a major part of this offering. In the event that broker/dealers
are used, all such funds will be promptly transmitted to the Escrow Agent
under the terms of the escrow agreement.
It is expected that the organizers will purchase a total of 155,000 of the
shares of Common Stock offered hereby; however, the organizers may, subject to
regulatory approval, purchase up to 42% of the minimum number of shares
offered hereby if necessary to complete the offering. Any shares purchased by
the organizers in excess of their original commitment will be purchased for
investment and not with a view to the resale of such shares, and any such
purchases will be subject to regulatory approval.
HOW TO SUBSCRIBE
Preliminary Nonbinding Subscriptions. Each prospective investor who
(together with the investor's affiliates) desires to purchase 100 or more
shares must:
1. Complete, date and sign the Preliminary Subscription Agreement, which
is attached as EXHIBIT A to this Prospectus.
2. Return the completed Preliminary Subscription Agreement as follows:
Before March 1, 1997 After March 1, 1997
Decatur First Bank Group, Inc. Decatur First Bank Group, Inc.
755 Commerce Drive 1120 Commerce Drive
Suite 516 Decatur, Georgia 30030
Decatur, Georgia 30030 Attn: Judy B. Turner
Attn: Judy B. Turner
3. Preliminary Subscriptions are NOT binding on subscribers.
4. Do NOT send payment for your shares at this time.
Final Binding Subscriptions.**
1. When the Registration Statement relating to this Prospectus is
declared effective by the SEC, the Company will furnish a final Prospectus
to all subscribers together with the Acknowledgement of Subscription, which
is attached as EXHIBIT B to this Prospectus.
2. Subscribers will be asked to complete the Acknowledgement of
Subscription, acknowledging receipt of the final Prospectus, and to return
it to the Company.
3. Subscribers will also be asked to send a check to the Company made
payable to "The Bankers Bank--Escrow Account for Decatur First Bank Group,
Inc." in an amount equal to $10.00 multiplied by the number of shares
subscribed for.
4. The completed Acknowledgement of Subscription and check should be sent
to the Company as follows:
Before March 1, 1997 After March 1, 1997
Decatur First Bank Group, Inc. Decatur First Bank Group, Inc.
755 Commerce Drive 1120 Commerce Drive
Suite 516 Decatur, Georgia 30030
Decatur, Georgia 30030 Attn: Judy B. Turner
Attn: Judy B. Turner
5. UPON RECEIPT BY THE COMPANY OF THE ACKNOWLEDGEMENT AND PAYMENT FOR THE
SHARES SUBSCRIBED FOR, THE SUBSCRIPTION AGREEMENT WILL BECOME FINAL AND
BINDING AND WILL BE IRREVOCABLE.
- --------
** This section is not yet effective because this Prospectus is in preliminary
form.
10
<PAGE>
USE OF PROCEEDS
BY THE COMPANY
Upon satisfaction of all of the conditions discussed in "THE OFFERING--
Release from Escrow" all subscription funds held in escrow will be released
and will become capital of the Company. The gross proceeds to the Company from
the sale of the shares offered hereby will be between $7,100,000 and
$12,000,000. The net proceeds of the offering to the Company will be between
$7,048,000 and $11,948,000. Net proceeds to the Company reflect reductions
from gross proceeds of the offering in the amount of $52,000 for estimated
offering and organizational expenses. Interest on the subscriptions will be
retained by the Company whether the minimum number of shares to be subscribed
for hereunder is subscribed for or not and will be utilized to defray
organizational and other expenses.
The Company will use approximately $52,000 of the net proceeds to pay
organizational and offering expenses of the Company. The Company's
organizational and offering expenses will consist primarily of legal,
accounting, marketing and printing expenses. Thereafter, the Company will use
at least $7,000,000 million of the net proceeds to purchase all of the stock
of the Bank. The Company will retain the balance of the net proceeds,
estimated at $48,000 in the case of the minimum offering and $4,948,000 in the
case of the maximum offering, for working capital and other general purposes,
including payment of expenses of the Company and the provision of additional
capital for the Bank, if necessary. In addition the Company will be reimbursed
by the Bank for amounts advanced by the Company to the Bank for pre-opening
and organizational expenses of the Bank. See "USE OF PROCEEDS--By The Bank."
The following table sets forth the use of the gross proceeds of this
offering by the Company if the minimum number of shares are sold in this
offering and if the maximum number of shares are sold in this offering.
<TABLE>
<CAPTION>
MINIMUM MAXIMUM
OFFERING(1) OFFERING(2)
----------- -----------
<S> <C> <C>
Gross Proceeds from Offering................ $7,100,000 $12,000,000
Organizational and Offering Expenses........ (52,000) (52,000)
Investment in Stock of the Bank............. (7,000,000) (7,000,000)
---------- -----------
Remaining Proceeds.......................... $ 48,000 (3) $ 4,948,000 (3)
========== ===========
</TABLE>
- --------
(1) Assumes that 710,000 shares of Common Stock are sold in this offering.
(2) Assumes that 1,200,000 shares of Common Stock are sold in this offering.
(3) This amount will be used by the Company for working capital and may be
used to provide additional capital for the Bank, if necessary.
If sufficient proceeds are available, the Company may choose to capitalize
the Bank at a level in excess of $7.0 million. If the Company raises in excess
of the minimum offering, the Company plans to retain the excess sums at the
holding company level and initially invest the sums in United States
government securities or as a deposit at the Bank. The Company may be required
by the Department of Banking or the FDIC to capitalize the Bank at a level in
excess of $7.0 million, in which case the Company will have to receive net
proceeds in excess of the minimum offering or obtain additional capital from
another source. If the Department of Banking or FDIC requires that the Bank be
capitalized in excess of $7.0 million, the Company plans to seek additional
subscriptions up to the maximum subscription amount required by the
regulators. If the Company meets the minimum subscription amount but is unable
to meet the capitalization requirements of the Department of Banking or the
FDIC, then it is possible that the Bank will be unable to commence banking
operations and that the amount returned to subscribers could be substantially
less than their original investment. See "RISK FACTORS--Release from Escrow."
11
<PAGE>
BY THE BANK
The Bank will receive at least $7,000,000 from the sale of its common stock
to the Company. The Bank will use approximately $318,000 of such proceeds to
reimburse the Company for amounts advanced by the Company to pay
organizational and pre-opening expenses of the Bank, including amounts funded
by the Company with advances from the organizers, which the Company will in
turn repay to the organizers. Organizational expenses of the Bank, estimated
at $62,000, include consulting fees, expenses for market analysis and
feasibility studies, and legal fees and expenses. Organizational expenses will
be deferred and amortized over five years. Pre-opening expenses, estimated at
$196,000, include officers' and employees' salaries and benefits estimated at
$111,000 (assuming the Bank opens for business on its target date of March 31,
1997), as well as lease payments, marketing expenses, interest expenses,
accounting and other pre-opening expenses. For additional information
concerning the compensation of the President of the Company and the Bank, see
"BUSINESS OF THE BANK AND COMPANY--Cash Compensation." The Bank will use
approximately $328,000 for furniture, fixtures and equipment for Bank's
principal facility. In addition, the Bank will use approximately $400,000 to
renovate the Bank's main office. Expenses for furniture, fixtures, equipment
and renovations will be capitalized and amortized over the life of the lease
or over the estimated useful life of the asset. The balance of the proceeds to
be received by the Bank, estimated at approximately $5,954,000, will be used
for loans to customers, investments and other general corporate purposes.
The following table sets forth the use of proceeds by the Bank. All proceeds
received by the Bank will be in the form of an investment by the Company in
the Bank's common stock. The initial amount of the Company's investment will
not vary based on the number of shares sold in this offering. Although the
amounts set forth herein provide an indication of the proposed use of funds
based on the plans and estimates of the organizers', actual expenses may vary
from the estimates.
<TABLE>
<S> <C>
Investment by the Company in the Bank's Common Stock......... $7,000,000
Reimbursement to the Company for Amounts Advanced by the
Company to the Bank to Pay Organizational and Pre-opening
Expenses of the Bank........................................ (318,000)
Furniture, Fixtures and Equipment............................ (328,000)
Renovation of Bank's Main Office............................. (400,000)
----------
$5,954,000 (1)
==========
</TABLE>
- --------
(1) This amount is to be used by the Bank for loans to customers, investments
and other general corporate purposes.
In the opinion of the organizers the estimated minimum net proceeds of
approximately $7,100,000 to the Company from the offering will satisfy the
cash requirements of the Company and the Bank for their respective first three
years of operations and that the Company and the Bank will not need to raise
additional funds for operations during this period, but there can be no
assurance that this will be the case.
The organizers have obtained a line of credit for the Company in the amount
of $300,000 with The Bankers Bank of Atlanta, Georgia, to be used by the
Company for the purpose of paying expenses incurred in connection with the
organization of the Company and the Bank, this offering and the commencement
of business by the Bank. The Company may seek to increase the line of credit.
The line of credit has been guaranteed, jointly and severally, by the
organizers. Any amounts required to pay organizational, pre-opening and
offering expenses that exceed the amount available under the line of credit
will be advanced by the organizers. All funds advanced by the organizers to
the Company and the Bank will be repaid to the organizers by the Company and
the Bank, respectively, from the proceeds of this offering.
12
<PAGE>
CAPITALIZATION
The following table sets forth the capitalization of the Company as of
September 30, 1996, and the proforma consolidated capitalization of the
Company and the Bank, as adjusted to give effect to the sale of the minimum of
710,000 shares in this offering. The Bank has established March 31, 1997, as
the target date for opening the Bank; accordingly, the "As Adjusted" column
reflects the estimated pre-opening expenses of the Company and the Bank
through March 31, 1997.
<TABLE>
<CAPTION>
ACTUAL AS ADJUSTED
SHAREHOLDER'S EQUITY SEPTEMBER 30, 1996 MARCH 31, 1996
-------------------- ------------------ --------------
<S> <C> <C>
Preferred Stock, par value not stated;
2,000,000 shares authorized, no shares
issued and outstanding.................... $ -- $ --
Common Stock, par value $5 per share:
10,000,000 shares authorized; 1 share
issued ($10) and outstanding(1); 710,000
shares issued ($10 each) and outstanding
as adjusted (minimum offering)............ 5 3,550,000
Additional paid-in capital(2).............. 5 3,514,000 (2)
Accumulated Deficit........................ (43,398) (196,000)
Total shareholders' equity................. (43,388)(3) 6,868,000 (4)
-------- ----------
Total Capitalization..................... $(43,388) $6,868,000
======== ==========
</TABLE>
- --------
(1) Judy B. Turner, the President of the Company, was issued one share of
Common Stock upon the organization of the Company, which share will be
redeemed for $10 (the price at which it was issued) upon the first
issuance of shares offered hereby.
(2) The expenses of the offering will be charged against this account.
Offering expenses are estimated to be $36,000 and such amount was used in
the calculation of the amount shown in the "As Adjusted" column
($3,550,000 less $36,000).
(3) This deficit reflects pre-opening expenses incurred through September 30,
1996, consisting primarily of salaries and employee benefits.
(4) The "As Adjusted" deficit accumulated during the pre-opening stage results
from expensing estimated pre-opening expenses for the Bank of $196,000.
See "USE OF PROCEEDS--By The Bank." (The Company is not expected to have
any pre-opening expenses.) Pre-opening expenses will be charged against
operating results and are estimates. Actual pre-opening expenses may be
higher. Higher actual pre-opening expenses would increase the deficit
accumulated during the pre-opening stage and thereby further reduce
shareholders' equity. The Company will retain any interest earned on
subscription payments held in escrow to defray pre-opening expenses. Such
interest will offset the deficit accumulated during the pre-opening stage,
but the amounts shown above do not include any estimate for interest which
may be earned.
DIVIDENDS
Since the Company and the Bank are both start-up operations, it will be the
policy of the Board of Directors of the Company to reinvest earnings for the
period of time necessary to help ensure the success of the their operations.
As a result, the Company has no current plans to initiate the payment of cash
dividends, and its future dividend policy will depend on the Bank's earnings,
capital requirements, financial condition and other factors considered
relevant by the Board of Directors of the Company. See "SUPERVISION AND
REGULATION--Bank Regulation."
13
<PAGE>
BUSINESS OF THE COMPANY
AND THE BANK
THE COMPANY
The Company was incorporated as a Georgia business corporation on August 2,
1996 to become a bank holding company by acquiring all the common stock of the
Bank upon its formation. Initially, the Bank will be the sole operating
subsidiary of the Company. The Company will apply to the Federal Reserve and
the Department of Banking for prior approval to use $7,000,000 of the proceeds
of this offering to acquire the Bank. If such approvals are granted, upon its
acquisition of the common stock of the Bank, the Company will become a bank
holding company within the meaning of the Bank Holding Company Act of 1956, as
amended, and the Georgia Bank Holding Company Act. See "SUPERVISION AND
REGULATION."
The Company has been organized to facilitate the Bank's ability to serve its
future customers' requirements for financial services. The holding company
structure will provide flexibility for expansion of the Company's banking
business through the possible acquisition of other financial institutions and
the provision of additional banking-related services which the traditional
commercial bank may not provide under present laws. For example, banking
regulations require that the Bank maintain a minimum ratio of capital to
assets. In event that the Bank's growth is such that this minimum ratio is not
maintained, the Company may borrow funds, subject to capital adequacy
guidelines of the Federal Reserve, and contribute them to the capital of the
Bank and otherwise raise capital in a manner which is unavailable to the Bank
under existing banking regulations.
The Company has no present plans to acquire any operating subsidiaries other
than the Bank. It is expected, however, that the Company may make additional
acquisitions in the future in the event that the Company becomes profitable
and such acquisitions are deemed to be in the best interest of the Company and
its shareholders. Such acquisitions, if any, will be subject to certain
regulatory approvals and requirements. See "SUPERVISION AND REGULATION."
THE BANK
General. The organizers filed an application on behalf of the Bank with the
Department of Banking and with the FDIC on September 16, 1996, for authority
to organize as a state bank, the deposits of which will be federally insured,
and to conduct a commercial banking business from Decatur, Georgia. As of
October 18, 1996, the applications filed with the Department of Banking and
the FDIC were pending.
The Bank intends to be a full service commercial bank. The Bank plans to
offer personal and business checking accounts, senior checking accounts,
interest-bearing checking accounts, savings accounts, money market funds and
various types of certificates of deposit. The Bank also plans to offer
installment loans, real estate loans, construction loans, second mortgage
loans, commercial and SBA loans and home equity lines of credit. In addition,
the Bank intends to provide such services as official bank checks and money
orders, Mastercard and Visa credit cards, safe deposit box, traveler's checks,
bank by mail, direct deposit of payroll and social security checks, and US
Savings Bonds.
Philosophy. The Bank's philosophy with respect to its initial operations
will be to emphasize prompt and responsive personal service to the residents
of Decatur, Georgia and the other communities located in DeKalb County in
order to attract customers and acquire market share now controlled by other
financial institutions in the Bank's market area. The organizers believe that
the Bank offers the residents of Decatur and the surrounding areas the
opportunity to have an ownership interest in a community bank, while also
receiving the benefits associated with a locally owned and managed community
bank. Through ownership in the Company, the residents of the community will
have a greater role in the development of the Bank.
Management of the Bank intends to implement an active officer and director
call program to promote these efforts. The purpose of this call program will
be to describe the products, services and philosophy of the Bank to both
existing and new business prospects. All of the organizers are active members
in the Decatur community
14
<PAGE>
and their continued active community involvement will provide an opportunity
to promote the Bank and its products and services. The organizers intend to
utilize effective advertising and superior selling efforts in order to build a
distinct institutional image for the Bank and to capture a customer base.
Bank Location and Facilities. The Bank will be located in Decatur, Georgia
in DeKalb County. The organizers have obtained a lease on a landmark site in
the financial district of downtown Decatur. The downtown business district has
several streets with historic commercial and government buildings, residential
structures and churches. The county government administration and court
buildings are one block south of the Bank's proposed office. The Chamber of
Commerce and Decatur Hospital are two blocks east of the Bank's proposed
office. Additionally, there are several high rise office buildings and retail
stores near the Bank's proposed office.
The Company entered into an Agreement to Lease, dated August 20, 1996, with
Daniel B. Pattillo, which provides that the Company may sublease the property
from Atlanta Gas Light Company until June 1, 1997 and thereafter may lease the
building from Mr. Pattillo until June 1, 2002. The Agreement to Lease provides
that the Company has an option to purchase the building under certain
conditions. The Company entered into an Agreement of Sublease, dated September
9, 1996 with Atlanta Gas Light Company, dated September 9, 1996 to sublease
the property from September 1, 1996 until May 31, 1997.
The building currently contains 5,400 square feet of usable space which can
be expanded. The organizers plan to renovate the building and use the current
square footage. The top floor contains 3,917 square feet and will be converted
into the banking lobby and executive offices. The lower level, which contains
1,487 square feet, will be used for operations, storage and the board room.
The board room will be used for meetings and training space. Most of the
operations and back-room work will be outsourced so less space will be needed.
Video drive-ups will be used instead of physical drive-ups, which will reduce
the need for additional square footage. The lower parking lot has sufficient
room to put two drive-up lanes in addition to employee parking. The property
fronts Commerce Drive, which is a main thoroughfare in Decatur, and backs up
to a retail area and residential property. Access to the drive-ups will be
available through a side street off of Commerce Drive. The main parking lot
will be accessible from Commerce Drive.
Parking is difficult to find in downtown Decatur and the Bank's proposed
office offers over 40 parking spaces in an open, well-lighted area with easy
access to the building. The drive-ups will be on the opposite side of the
building from the customer parking, which will eliminate traffic from the
drive-ups backing up into this area.
Primary Service Area. The Bank's Primary Service Area ("PSA") will be a five
mile radius of the center of Decatur, Georgia. Decatur is the county seat of
DeKalb County and is located 12 minutes east of downtown Atlanta, Georgia.
Decatur is four square miles in size and there are over 12 distinct
neighborhoods within the City of Decatur.
Economic and Demographic Factors. DeKalb County is part of the Atlanta,
Georgia metropolitan area. The designated area, a five mile radius from the
center of the city of Decatur, is comprised of the incorporated towns of
Decatur, Avondale Estates and Clarkston, a portion of Atlanta, and
unincorporated DeKalb County. Decatur is the county seat and attracts a much
larger daytime population than the 17,000+ residents. The government buildings
alone employ 13,722 workers.
Decatur adjoins Atlanta's city limits six miles east of Atlanta's central
business district. The MARTA rapid rail system has a station in downtown
Decatur and the Interstate 285 perimeter is located less than three miles east
of the downtown district. These and other nearby transportation facilities
provide easy access to downtown Decatur from Atlanta and other metro area
locations, improving the district's potential for business.
As the financial, service and government center of DeKalb County, Decatur's
downtown business district has played an important role in the county and the
Atlanta metro area.
15
<PAGE>
Competition and Historical Deposit Trends. Decatur is served by eleven
commercial banks, two savings institutions and four credit unions, which,
collectively, operate 41 banking offices. Commercial banks control 99% of the
$1.4 billion of deposits in the Bank's PSA. Several of the commercial banks
located in the Bank's PSA are larger regional banks, such as First Union,
SunTrust, NationsBank and Wachovia. As a group, the large regional banks
control over 83% of the deposit market in the Bank's PSA. The larger regional
banks' presence in Decatur is through branch offices, with many of the
customer service functions, as well as authority for loan approval, being
located outside of the Bank's PSA. There is no other community bank
headquartered in Decatur. There are several community banks located in DeKalb
County; however, the Bank intends to differentiate itself from these banks
primarily through strong involvement in the Decatur community.
According to Sheshunoff's Bancpen, between 1991 and 1995, Decatur
experienced a $352 million decrease in deposits. The organizers do not believe
that this decrease is indicative of the market, but rather is a reflection of
how the larger regional banks report information. For example, First Union's
reported deposits decreased by $348 million from 1991 to 1995; however, since
there was not a corresponding increase in deposits reflected at other bank
offices, the organizers believe these deposits are not market loss, but were
shifted to other First Union offices. The demographic data for Decatur reveals
positive trends in all categories.
Lending Policy. The Bank is being established to support Decatur and
surrounding areas of DeKalb County. Consequently, the Bank will aggressively
seek creditworthy loans within a limited geographic area. The Bank's primary
commercial lending function will be to make consumer loans to individuals and
commercial loans to small and medium-sized businesses and professional
concerns. In addition, the bank plans to make real-estate-related loans,
including construction loans for residential and commercial properties, and
primary and secondary mortgage loans for the acquisition or improvement of
personal residences. The Bank plans to avoid concentrations of loans to a
single industry or based on a single type of collateral.
The Bank's legal lending limits will be 15% of its statutory capital base
for unsecured loans and 25% of its statutory capital base for secured loans.
The Bank's statutory capital base is determined by the sum of its common
stock, paid-in capital, appropriated retained earnings, and capital debt, or
the amount of net assets of the Bank, whichever is the lower amount. Of the
Bank's initial $7,000,000 in capital, $3,500,000 will be allocated to common
stock, $3,150,000 to paid-in capital and $350,000 will be set aside as an
expense fund to cover pre-opening expenses and potential losses in its first
year of operation. The $350,000 expense fund will not be included in the
Bank's statutory capital base. Accordingly, the Bank's initial legal lending
limits will be $997,000 for unsecured loans and $1,662,500 for secured loans.
While the Bank expects generally to employ more conservative lending limits,
the Board of Directors will have discretion to lend up to the legal lending
limits as described above.
Consumer Loans. The Bank plans to make consumer loans, consisting primarily
of installment loans to individuals for personal, family and household
purposes, including loans for automobiles, home improvements and investments.
Risks associated with consumer loans include, but are not limited to, fraud,
deteriorated or non-existing collateral, general economic downturn and
customer financial problems.
Commercial Loans. Commercial lending will be directed principally toward
small to mid-size businesses whose demand for funds falls within the legal
lending limits of the Bank. This category of loans includes loans made to
individual, partnership or corporate borrowers, and obtained for a variety of
business purposes. Risks associated with these loans can be significant and
include, but are not limited to, fraud, bankruptcy, economic downturn,
deteriorated or non-existing collateral and changes in interest rates.
Real Estate Loans. The Bank will make and hold real estate loans, consisting
primarily of single-family residential construction loans for one-to-four unit
family structures. The Bank will require a first lien position on the land
associated with the construction project and will offer these loans to
professional building contractors and homeowners. Loan disbursements will
require on-site inspections to assure the project is on budget and that the
loan proceeds are being used for the construction project and not being
diverted to another project. The loan-to-value ratio for such loans will be
predominantly 80% of the lower of the as-built appraised value or
16
<PAGE>
project cost, and will be a maximum of 90% if the loan is amortized. Loans for
construction can present a high degree of risk to the lender, depending upon,
among other things, whether the builder can sell the home to a buyer, whether
the buyer can obtain permanent financing, whether the transaction produces
income in the interim and the nature of changing economic conditions.
Investments. In addition to loans, the Bank will make other investments
primarily in obligations of the United States or obligations guaranteed as to
principal and interest by the United States and other taxable securities. No
investment in any of those instruments will exceed any applicable limitation
imposed by law or regulation.
Deposits. The Bank plans to establish solid core deposits, including
checking accounts, money market accounts, a variety of certificates of
deposit, and IRA accounts. The primary means used to attract deposits will be
an aggressive marketing plan in the overall service area, a broad product
line, and competitive services. The primary sources of deposits will be
residents of, and businesses and their employees located in, the Bank's PSA
obtained through personal solicitation by the Bank's officers and directors,
direct mail solicitations and advertisements published in the local media.
Deposits will be generated by offering a broad array of competitively priced
deposit services, including demand deposits, regular savings accounts, money
market deposits (transaction and investment), certificates of deposit,
retirement accounts, and other deposit or funds transfer services which may be
permitted by law or regulation and which may be offered to remain competitive
in the market.
Asset and Liability Management. The Bank intends to manage its assets and
liabilities to provide an optimum and stable net interest margin, a profitable
after-tax return on assets and return on equity, and adequate liquidity. These
management functions will be conducted within the framework of written loan
and investment policies which the Bank will adopt. The Bank will attempt to
maintain a balanced position between rate sensitive assets and rate sensitive
liabilities. Specifically, it will chart assets and liabilities on a matrix by
maturity, effective duration, and interest adjustment period, and endeavor to
manage any gaps in maturity ranges.
Employees. Upon commencement of operations, the Bank is expected to have
approximately 15 full-time employees and one part-time employee. The Company
is not expected to have any employees who are not also employees of the Bank.
17
<PAGE>
MANAGEMENT
PROPOSED OFFICERS AND DIRECTORS
The following table sets forth for the initial members of the Board of
Directors of the Company and the Bank, (a) their names, addresses and ages at
September 30, 1996, (b) the positions they will hold in the Company and the
Bank, (c) the number of shares of Common Stock for which they intend to
subscribe, and (d) the percentage of outstanding shares such number will
represent if the minimum number of shares are sold in this offering and if the
maximum number of shares are sold in this offering.
<TABLE>
<CAPTION>
POSITIONS NUMBER % OF % OF
NAME AND ADDRESS (AGE) TO BE HELD OF SHARES* MINIMUM* MAXIMUM*
---------------- ----- ------------------ ---------- -------- --------
<S> <C> <C> <C> <C> <C>
John L. Adams, Jr. ..... (42) Director 10,000 1.6 .8
130 Glenn Circle
Decatur, Georgia 30030
Merriell Autrey ........ (70) Director 10,000 1.6 .8
1887 Bedfordshire Court
Decatur, Georgia 30033
Mary Bobbie Bailey ..... (68) Director 25,000 4.1 2.1
239 15th Street
Atlanta, Georgia 30309
James A. Baskett ....... (48) Director 10,000 1.6 .8
160 South Candler Street
Decatur, Georgia 30030
William F. Floyd ....... (50) Director 15,000 2.5 1.3
712 W. Ponce de Leon Av-
enue
Decatur, Georgia 30030
John C. Joyner ......... (56) Secretary, 10,000 1.6 .8
631 Pinetree Drive Director
Decatur, Georgia 30030
Robert E. Lanier ....... (57) Director 15,000 2.5 1.3
5459 Lichenheath Court
Stone Mountain, Georgia
30087
Carol G. Nickola ....... (45) Director 20,000 3.3 1.7
7540 Chaparral Drive
Dunwoody, Georgia 30350
Lynn Pasqualetti ....... (41) Director 10,000 1.6 1.3
889 Artwood Road
Atlanta, Georgia 30307
Roger K. Quillen ....... (43) Director 10,000 1.6 1.3
124 Glenn Circle
Decatur, Georgia 30030
Judy B. Turner ......... (49) President, Chief 20,000 3.3 1.7
235 Drexel Avenue Executive Officer,
Decatur, Georgia 30030 Director
All Proposed Directors
and Officers, as a
Group ................ 155,000 25.4% 12.9%
</TABLE>
- --------
* In the event that the minimum number of shares in this offering is not sold,
the organizers may purchase additional shares of Common Stock up to an
aggregate of 298,200 shares of Common Stock (42% of the minimum and 24.8% of
the maximum number of shares to be sold).
18
<PAGE>
JOHN L. ADAMS, JR. John Adams is a native of DeKalb County and a graduate of
Emory University. He is President and Managing Broker of Clairmont Place
Realty, Inc., a residential real estate brokerage firm. Mr. Adams has served
as President of the Decatur Business Association and as Chairman of the DeKalb
Unit of the American Heart Association. He is a former Trustee of Dekalb
Medical Center Foundation.
MERRIELL AUTREY, JR. Merriell Autrey is a native of Georgia. He worked for
the Citizens & Southern National Bank (now known as NationsBank) for over 35
years in various departments. His last assignment at the bank was his election
in 1969 as President of C & S Emory Bank, a wholly owned affiliate of the
Citizens and Southern Georgia Corporation. C & S Emory Bank merged into C & S
National Bank, and Mr. Autrey retired as an Executive Vice President in 1987.
He has served on numerous civic and community boards, a past President of the
Atlanta Athletic Club, and a member of The Lutheran Church. He is a graduate
of the University of Georgia and has studied at The School of Credit &
Financial Management at Dartmouth and the Emory School of Advanced Management.
JAMES A. BASKETT Jim Baskett is a native of DeKalb County. He owns Prolific
Impressions, Inc., which produces instructional books for the adult craft
market. He and his wife have operated this business in Decatur for more than
20 years. He is the Past Chair of the DeKalb County Public Library Board of
Trustees and serves on the City of Decatur Board of Commissioners. A graduate
of Leadership DeKalb, he has served as a director for the American Heart
Association, Our House, Inc., Decatur Rotary Club, and Leadership DeKalb, Inc.
MARY BOBBIE BAILEY Bobbie Bailey is a resident of Fulton County, and is the
founder, President and sole owner of Our-Way, Inc., the world's largest
independent remanufacturer of commercial air conditioning and refrigeration
compressors. Ms. Bailey also currently serves as a Foundation Trustee for
Kennesaw State College, a Director of the Greenland Expedition Society,
President of Georgia Music Festival Hall of Fame, a member of the Mayor's
Commission on the Atlanta Entertainment Industry, and a Trustee of the
National Academy of Recording Arts & Sciences. Her other endeavors include
President and sole owner of two music companies, as well as Bailey Design
Company, a residential construction company.
WILLIAM F. FLOYD Bill Floyd has been a resident of Decatur, Georgia since
1972. He has been involved in the construction of water and sewer facilities
in the Southeast United Stated since 1972. He is currently Secretary-Treasurer
of Southern Champion Construction, Inc., a company he helped start in July,
1977. Prior to moving to the Atlanta area in 1972, Mr. Floyd served three
years as a Captain in the U.S. Army. He graduated from Auburn University in
1969 with a degree in Civil Engineering and received an MBA from Georgia State
University in August, 1978. He is a registered Professional Engineer in the
State of Georgia and is currently completing his second term as a member of
the Decatur City Commission.
JOHN C. JOYNER John Joyner is an attorney and has been a resident of and
practiced law in the City of Decatur for over 30 years. Mr. Joyner is a
graduate of Georgia State University and Emory University Law School. He is
chairman of The Decatur Downtown Development Authority and legal counsel for
the DeKalb Chamber of Commerce, the Decatur Business Association and the
DeKalb Convention and Visitors Bureau.
ROBERT E. LANIER Robert E. Lanier is a native of DeKalb County and is
President and CEO of REL properties, Inc., a local real estate development
company founded over 30 years ago by Mr. Lanier. He served on the DeKalb
County Board of Commissioners from 1976 to 1990 and was Presiding Officer of
the Board for three years. Mr. Lanier currently serves on the Georgia College
Foundation Board, and the DeKalb College Foundation. He is a board member of
the Decatur Rotary Club, and is Governor Miller's appointee to the Georgia
Trust of Historic Preservation. He has previously served on the Emory
University Board of Visitors, is a past president of the Metro Atlanta
Homebuilders Association/Dekalb Chapter, and has served on various other
boards including the YMCA, Christian City, American Cancer Society, American
Heart Association, Leadership DeKalb, and the Regional Leadership Institute.
CAROL G. NICKOLA Carol Nickola is a native of North Carolina. She received
her Bachelors Degree from Brenau University and her MBA from Emory University.
She is the Chief Executive Officer of Decatur Hospital. She is a member of the
Decatur Rotary Club, and serves on the Board of the DeKalb County Heart
Association.
19
<PAGE>
LYNN PASQUALETTI Lynn Pasqualetti is a native of Missoula, Montana, and
relocated to the Decatur area in 1985. She holds a Certification in Tax from
the American Institute of Tax Studies. Ms. Pasqualetti is an Enrolled Agent,
enrolled to practice before the Internal Revenue Service. She is President and
co-owner of HLM Services, Inc., a full service public accounting firm located
in downtown Decatur. She is a member of the Decatur Business Association,
DeKalb Chamber of Commerce, National Association of Public Accountants,
National Society of Tax Professionals, and the National Directory of Who's Who
in Executives and Professionals Journal. Ms. Pasqualetti's volunteer
experiences include board member of National Federation of Career Women;
Program Director of Fourth Tuesday, a professional women's association;
Accountant for the DeKalb Council of the Arts, Inc.; United Way campaign area
representative; Advisor-Atlanta City Council, Domestic Partnership Issue; and
PTA Executive Board Member, Westchester School in Decatur.
ROGER K. QUILLEN Roger K. Quillen is an attorney whose practice is limited
to representing management in all phases of employment-related matters. Mr.
Quillen is admitted to the bars of the United States Courts of Appeals for the
seven different circuits in the United States where he has argued employment-
related cases. He is also admitted to the United States Supreme Court. Mr.
Quillen holds Bachelor and Master's degrees from Ohio State University and a
Juris Doctor Degree from Ohio State's College of Law. He lives in Decatur and
is a member of Decatur First United Methodist Church.
JUDY B. TURNER Judy Turner will be the President & CEO of the Bank and the
Company. She is a native of Decatur, Georgia, and her banking career started
in 1965 with C & S National Bank. While at C & S for 28 years she held various
administrative and retail positions culminating in being manager of three
offices. From 1993 until March 1995, she was manager of Bank South's Decatur
Office, one of Bank South's largest commercial offices with a staff of 19
persons. She managed a loan portfolio of $10 million and deposits of $79
million. In March 1995, Ms. Turner was promoted to Regional Sales and Service
Manager. Her responsibilities in this position included supervising and
monitoring the quality of customer service in 20 branches, and leading a
business development effort that produced $12 million in new business for the
bank in 6 months.
Ms. Turner graduated from Graduate School of Banking of the South, Louisiana
State University. She earned the "Certified Commercial Lender" recognition
while at C & S and holds two certificates from the American Institute of
Banking. She later became a Certified Trainer for C & S National Bank and the
American Institute of Banking.
In areas of community service, Ms. Turner is serving on the Policy Advisory
Board of The Atlanta Project, is a director of Decatur Hospital, a director of
the DeKalb Chamber of Commerce and was honored as Rotarian of the Year (1994-
1995) by the Decatur Rotary. She is a member of the Decatur Business
Association and has held the positions of Director, President and Historian
with this organization. She is a Director and has held the position of
Treasurer with the South Decatur Community Development Corporation. Ms. Turner
is a graduate of Leadership DeKalb and The Regional Leadership Institute.
CASH COMPENSATION
The Company entered into an employment agreement with Judy Turner regarding
Ms. Turner's employment as President and Chief Executive Officer of the
Company (the "Employment Agreement"). Under the terms of the Employment
Agreement, Ms. Turner will receive a starting salary of $6,500 per month until
the Company satisfies the conditions for releasing offering funds from the
Escrow Account. After the Company breaks escrow, Ms. Turner will begin
receiving a salary of $8,000 per month. The Employment Agreement provides that
at the end of each year of operation, Ms. Turner will be entitled to receive a
cash bonus in the amount of 5% of the Company's audited consolidated pretax
net income, provided that certain performance criteria are satisfied.
Additionally, the Employment Agreement provides that after the Company
receives the funds from the Escrow Account, the Company will grant Ms. Turner
a non-qualified ten-year option to purchase a number of shares of Common Stock
equal to 5% of the number of shares of Common Stock sold in this offering. The
option will become vested and exercisable in 20% increments on the
anniversaries of the grant date at a purchase price of
20
<PAGE>
$10.00 per share. Pursuant to the Employment Agreement, the Company will also
lease an automobile to be used by Ms. Turner. In the event Ms. Turner is
terminated by the Company without cause, the Company will be required to meet
its obligations under the Employment Agreement with respect to Ms. Turner's
compensation for a period of twelve months from the date of termination. In
the event of termination of Ms. Turner's employment, other than by the Company
without cause or by Ms. Turner for cause, as defined in the employment
agreement, Ms. Turner will be prohibited from competing with the Bank or
soliciting its customers or employees for a period of twelve months from the
date of termination.
Directors of the Bank will not be compensated for their services as
directors until the Bank earns a cumulative profit.
Officers and directors of the Company will not be separately compensated for
their services to the Company until the Company earns a cumulative profit.
CERTAIN TRANSACTIONS
It is possible that the Company and the Bank will have banking and other
business transactions in the ordinary course of business with directors and
officers of the Company and the Bank, including members of their families or
corporations, partnerships or other organizations in which such directors and
officers have a controlling interest. If such transactions occur, (a) they
will be on substantially the same terms (including price, or interest rate and
collateral) as those prevailing at the time for comparable transactions with
unrelated parties, and any banking transactions will not be expected to
involve more than the normal risk of collectibility or present other
unfavorable features to the Company and the Bank, and (b) they will be on
terms no less favorable than could be obtained from an unaffiliated third
party and will be approved by a majority of the directors, including a
majority of the disinterested directors.
The organizers arranged a line of credit from The Bankers Bank in Atlanta,
Georgia in the aggregate amount of $300,000 to pay organizational and pre-
opening expenses for the Bank and the Company. The line of credit bears
interest at The Bankers Bank's prime rate and has a one-year term. The
organizers have personally guaranteed the line of credit. The line of credit
and interest costs will be repaid from the offering proceeds when the
conditions to the offering have been satisfied. See "USE OF PROCEEDS." It is
anticipated that The Bankers Bank will operate as a correspondent bank for the
Bank.
MARKET FOR COMMON STOCK AND RELATED SHAREHOLDER MATTERS
There is currently no market for the shares of Common Stock and it is not
likely that an active trading market will develop for the shares in the
future. There are no present plans for the Company's Common Stock to be traded
on any stock exchange or over-the-counter market. As a result, investors who
need or wish to dispose of all or part of their shares may be unable to do so
except in private, directly negotiated sales.
21
<PAGE>
DESCRIPTION OF CAPITAL STOCK OF THE COMPANY
COMMON STOCK
General. The Company's Articles of Incorporation authorize the Company to
issue up to 10,000,000 shares of Common Stock, par value $5.00 per share, of
which a minimum of 710,000 shares and a maximum of 1,200,000 shares will be
issued pursuant to this offering.
All shares of Common Stock of the Company will be entitled to share equally
in dividends from funds legally available therefor, when, as and if declared
by the Board of Directors, and upon liquidation or dissolution of the Company,
whether voluntary or involuntary, to share equally in all assets of the
Company available for distribution to the shareholders. It is not anticipated
that the Company will pay any cash dividends on the Common Stock in the near
future. See "DIVIDENDS." Each holder of Common Stock will be entitled to one
vote for each share on all matters submitted to the shareholders. Holders of
Common Stock will not have any preemptive right to acquire authorized but
unissued capital stock of the Company. There is no cumulative voting,
redemption right, sinking fund provision, or right of conversion in existence
with respect to the Common Stock. All shares of the Common Stock issued in
accordance with the terms of this offering as described in this Prospectus
will be fully-paid and non-assessable.
Shares Held by Affiliates. Upon completion of this offering, the Company
will have a minimum of 710,000 shares and a maximum of 1,200,000 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 in this offering by the organizers.
The organizers are "affiliates" of the Company (as that term is defined in
Rule 144 adopted under the 1933 Act) and, as a result, their shares will be
subject to certain resale restrictions.
Rule 144 generally provides that a person (including an affiliate of the
Company) who has beneficially owned shares for at least two years will be
entitled to sell within any three-month period a number of shares that does
not exceed the greater of 1% of the then outstanding shares of the Common
Stock or the average weekly trading volume of the Common Stock during the four
calendar weeks preceding such sale, whichever is greater. While affiliates may
generally sell non-restricted shares under Rule 144 without regard to the
length of their holding period, all shares purchased by the organizers will be
purchased for investment purposes and not with a present intention of
redistribution.
There can be no assurance that a public market for the Common Stock will
exist at any time subsequent this offering. As a result, investors who may
wish or who need to dispose of all or a part of their investment in the Common
Stock may not be able to do so except for private direct negotiations with
third parties, assuming that third parties are willing to purchase the Common
Stock.
PREFERRED STOCK
The Company's Articles of Incorporation also authorize the Board of
Directors to issue up to 2,000,000 shares of preferred stock ("Preferred
Stock"). The Board of Directors has the authority to determine the
designation, powers, preferences and relative rights of the Preferred Stock.
Preferred Stock may have voting rights, subject to applicable law and
determination by the Board of Directors.
22
<PAGE>
ANTITAKEOVER PROVISIONS OF THE COMPANY'S
ARTICLES OF INCORPORATION AND BYLAWS
The Articles of Incorporation of the Company contain certain provisions
which would have the effect of impeding an attempt to change or remove
management of the Company or to gain control of the Company in a transaction
not supported by its Board of Directors (the "Protective Provisions"). In
general, one purpose of the Protective Provisions is to assist the Company's
Board of Directors in playing a role in connection with attempts to acquire
control of the Company, so that the Board of Directors of the Company can
further and protect the interests of the Company and its shareholders as
appropriate under the circumstances, including if the Board of Directors
determines that a sale of control is in the best interest of the Company and
its shareholders, by enhancing the Board's ability to maximize the value to be
received by the shareholders upon such sale.
Although the Company's management believes the Protective Provisions are,
therefore, beneficial to shareholders of the Company, the Protective
Provisions also may tend to discourage some takeover bids. As a result,
shareholders of the Company may be deprived of opportunities to sell some or
all of their shares at prices that represent a premium over prevailing market
prices. On the other hand, defeating undesirable acquisition offers can be a
very expensive and time-consuming process. To the extent that the Protective
Provisions discourage undesirable proposals, the Company may be able to avoid
those expenditures of time and money.
The Protective Provisions also may discourage open market purchases by a
potential acquirer. Such purchases may increase the market price of the
Company's Common Stock temporarily, enabling shareholders to sell their shares
at a price higher than that which otherwise would prevail. In addition, the
Protective Provisions may decrease the market price of the Company's Common
Stock by making the stock less attractive to persons who invest in securities
in anticipation of price increases from potential acquisition attempts. The
Protective Provisions also may make it more difficult and time consuming for a
potential acquirer to obtain control of the Company through replacing the
Board of Directors and management. Furthermore, the Protective Provisions may
make it more difficult for shareholders of the Company to replace the Board of
Directors or management, even if a majority of the shareholders believes such
replacement is in the best interests of the Company. As a result, the
Protective Provisions may tend to perpetuate the incumbent Board of Directors
and management.
The Articles of Incorporation of the Company also contain a provision which
eliminates the potential personal liability of directors for monetary damages.
In addition, the Bylaws of the Company contain certain provisions which
provide indemnification for directors of the Company.
The Protective Provisions and the provisions relating to elimination of
liability and indemnification of directors are discussed more fully below.
PREFERRED STOCK
The existence of Preferred Stock may impede the takeover of the Company
without the approval of the Company's Board of Directors by enabling the
Company's Board of Directors to issue shares to persons friendly to current
management, which could render more difficult or discourage any attempt to
gain control of the Company through a proxy contest, tender offer, merger or
otherwise. In addition, the issuance of shares of preferred stock with voting
rights may have an adverse effect on the rights of the holders of Common
Stock, and in certain Circumstances such issuances of Preferred Stock could
decrease the market price of the Common Stock.
STAGGERED TERMS FOR BOARD OF DIRECTORS
Article 8 provides that the Board of Directors of the Company will be
divided into three classes and that the directors in each class will serve for
staggered terms of three years each. This means that, unless the existing
directors were to resign (which might be the case in a friendly acquisition of
the Company), it would take two annual meetings of the Company's shareholders
to replace a majority of its directors.
Under Georgia law, directors are elected annually for a term of one year
unless the Articles of Incorporation provide otherwise.
23
<PAGE>
CHANGE IN NUMBER OF DIRECTORS
Article 10 of the Articles of Incorporation of the Company provides that any
change in the number of directors of the Company, as set forth in its Bylaws,
would have to be made by the affirmative vote of 2/3 of the entire Board of
Directors or by the affirmative vote of the holders of at least 2/3 of the
outstanding shares of Common Stock.
Under Georgia law, the number of directors may be increased or decreased
from time to time by amendment to the Bylaws, unless the Articles of
Incorporation provide otherwise or unless the number of directors is otherwise
fixed by the shareholders.
REMOVAL OF DIRECTORS
Article 9 of the Articles of Incorporation of the Company provides that
directors of the Company may be removed during their terms by the affirmative
vote of the holders of a majority of the outstanding shares of Common Stock.
"Cause" for this purpose is defined as final conviction of a felony, request
or demand for removal by any bank regulatory authority having jurisdiction
over the Company, or determination by at least 2/3 of the incumbent directors
of the Company that the conduct of the director to be removed has been
inimical to the best interests of the Company. Article 9 of the Articles of
Incorporation of the Company provides that directors of the Company may be
removed during their terms without cause by the affirmative vote of the
holders of 2/3 of the outstanding shares of Common Stock.
Under Georgia law, any or all of the directors of a corporation may be
removed with or without cause by the affirmative vote of a majority of the
shares represented at a meeting at which a quorum is represented and entitled
to vote thereon, unless the Articles of Incorporation provide otherwise.
SPECIAL SHAREHOLDERS' MEETINGS
Article 12 allows only the President, the Chairman of the Board of Directors
or a majority of the Board of Directors to call a special meeting of the
shareholders. Under Georgia law, special meetings of shareholders may be
called by the Board of Directors or persons authorized to call such meetings
by the Articles of Incorporation or Bylaws of the corporation.
SUPERMAJORITY VOTING ON CERTAIN TRANSACTIONS
Under Article 13 of the Articles of Incorporation of the Company, with
certain exceptions, any merger or consolidation involving the Company or any
sale or other disposition of all or substantially all of its assets will
require the affirmative vote of the holders of at least 2/3 of the outstanding
shares of Common Stock. However, if the Board of Directors of the Company has
approved the particular transaction by the affirmative vote of 2/3 of the
entire Board, then the applicable provisions of Georgia law would govern and
shareholder approval of the transaction would require the affirmative vote of
the holders of only a majority of the outstanding shares of Common Stock
entitled to vote thereon.
The primary purpose of this Article is to discourage any party from
attempting to acquire control of the Company through the acquisition of a
substantial number of shares of Common Stock followed by a forced merger or
sale of assets without negotiation with management. Such a merger or sale
might not be in the best interests of the Company or its shareholders.
The foregoing provision could enable a minority of the Company shareholders
to prevent a transaction favored by the majority of the shareholders. Also, in
some, circumstances, the directors could cause a 2/3 vote to be required to
approve the transaction by withholding their consent to such a transaction,
thereby enhancing their positions with the Company and the Bank. However, of
the eleven persons who are directors of the Company, only one will be
affiliated with the Company and the Bank in a full-time management position.
EVALUATION OF AN ACQUISITION PROPOSAL
Article 14 of the Company's Articles of Incorporation provides that the
response of the Company to any acquisition proposal made by another party will
be based on the Board's evaluation of the best interests of the
24
<PAGE>
Company and its shareholders. As used herein, the term "acquisition proposal"
refers to any offer of another party (a) to make a tender offer or exchange
offer for any equity security of the Company, (b) to merge or consolidate the
Company with another corporation, or (c) to purchase or otherwise acquire all
or substantially all of the properties and assets owned by the Company.
Article 14 charges the Board, in evaluating an acquisition proposal, to
consider all relevant factors, including (a) the expected social and economic
effects of the transaction on the employees, customers and other constituents
(e.g., suppliers of goods and services) of the Company and the Bank, (b) the
expected social and economic effects on the communities within which the
Company and the Bank operate, and (c) the consideration being offered by the
other corporation in relation (i) to the then current value of the Company as
determined by a freely negotiated transaction and (ii) to the Board of
Directors' then estimate of the Company's future value as an independent
entity. The enumerated factors are not exclusive, and the Board may consider
other relevant factors.
This Article has been included in the Company's Articles of Incorporation
because the Bank is charged with providing support to and being involved with
the communities it serves, and the Board believes its obligations in
evaluating an acquisition proposal extend beyond evaluating merely the
consideration being offered in relation to the then market or book value of
the Common Stock. No provisions of Georgia law specifically enumerate the
factors a corporation's board of directors should consider in the event the
corporation is presented with an acquisition proposal.
While the value of the consideration offered to shareholders is the main
factor when weighing the benefits of an acquisition proposal, the Board
believes it appropriate also to consider all other relevant factors. For
example, this Article directs the Board to evaluate the consideration being
offered in relation to the then current value of the Company determined in a
freely negotiated transaction and in relation to the Board's then estimate of
the future value of the Company as an independent concern. A takeover bid
often places the target corporation virtually in the position of making a
forced sale, sometimes when the market price of its stock may be depressed.
The Board believes that frequently the consideration offered in such a
situation, even though it may be in excess of the then market value (i.e., the
value at which shares are then currently trading), it is less than that which
could be obtained in a freely negotiated transaction. In a freely negotiated
transaction, management would have the opportunity to seek a suitable partner
at a time of its choosing and to negotiate for the most favorable price and
terms which reflect not only the current value, but also the future value of
the Company.
One effect of this Article may be to discourage a tender offer in advance.
Often an offeror consults the Board of a target corporation prior to or after
commencing a tender offer in an attempt to prevent a contest from developing.
In the opinion of the Board, this provision will strengthen its position in
dealing with any potential offeror which might attempt to acquire the Company
through a hostile tender offer. Another effect of this Article may be to
dissuade shareholders who might be displeased with the Board's response to an
acquisition proposal from engaging the Company in costly litigation. This
provision, however, does not affect the right of a shareholder displeased with
the Board's response to an acquisition proposal to institute litigation
against the Company and to allege that the Board breached an obligation to
shareholders by not limiting its evaluation of an acquisition proposal to the
value of the consideration being offered in relation to the then market or
book value of the Common Stock.
Article 14 would not make an acquisition proposal regarded by the Board as
being in the best interests of the Company more difficult to accomplish. It
would, however, permit the Board to determine that an acquisition proposal was
not in the best interests of the Company (and thus to oppose it) on the basis
of the various factors deemed relevant. In some cases, such opposition by the
Board might have the effect of maintaining the positions of incumbent
management.
AMENDMENT OF PROVISIONS
Any amendment of Articles 8, 9, 10, 11, 12, 13 and 14 of the Company's
Articles of Incorporation requires the affirmative vote of the holders of at
least 2/3 of the outstanding shares of Common Stock, unless 2/3 of the entire
Board of Directors approves the amendment. If 2/3 of the Board approves the
amendment, the applicable provisions of Georgia law would govern, and the
approval of only a majority of the outstanding shares of Common Stock would be
required.
25
<PAGE>
INDEMNIFICATION AND LIMITATION OF LIABILITY OF DIRECTORS
INDEMNIFICATION
The Bylaws of the Company contain certain indemnification provisions which
provide that directors, officers, employees or agents of the Company will be
indemnified against expenses actually and reasonably incurred by them if they
are successful on the merits of a claim or proceeding.
When a case or dispute is not ultimately determined on its merits (i.e., it
is settled), the indemnification provisions provide that the Company will
indemnify directors when they meet the applicable standard of conduct. The
applicable standard of conduct is met if the director acted in a manner he or
she reasonably believed to be in or not opposed to the best interests of the
Company and, with respect to any criminal action or proceeding, if the
director had no reasonable cause to believe his or her conduct was unlawful.
Whether the applicable standard of conduct has been met is determined by the
Board of Directors, the shareholders or independent legal counsel in each
specific case.
The Bylaws of the Company also provide that the indemnification rights set
forth therein are not exclusive of other indemnification rights to which a
director may be entitled under any bylaw, resolution or agreement, either
specifically or in general terms approved by the affirmative vote of the
holders of a majority of the shares entitled to vote thereon. The Company can
also provide for greater indemnification than that set forth in the Bylaws if
it chooses to do so, subject to approval by the Company's shareholders. The
Company may not, however, indemnify a director for liability arising out of
circumstances which constitute exceptions to limitation of a director's
liability for monetary damages. See "CERTAIN PROVISIONS OF THE COMPANY'S
ARTICLES AND BYLAWS--Limitation of Liability."
The indemnification provisions of the Bylaws specifically provide that the
Company may purchase and maintain insurance on behalf of any director against
any liability asserted against such person and incurred by him or her in any
such capacity, whether or not the Company would have had the power to
indemnify against such liability.
The Company is not aware of any pending or threatened action, suit or
proceeding involving any of its directors or officers for which
indemnification from the Company may be sought.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 (the "1933 Act") may be permitted to directors, officers and
controlling persons of the Company pursuant to the foregoing provisions, or
otherwise, the Company has been advised that in the opinion of the SEC such
indemnification is against public policy as expressed in the 1933 Act and is,
therefore, unenforceable. In the event that a claim for indemnification
against such liabilities other than the payment by the Company of expenses
incurred or paid by a director, officer or controlling person of the Company
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 Company 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 1933 Act and will be governed by the
final adjudication of such issue.
LIMITATION OF LIABILITY
Article 11 of the Company's Articles of Incorporation, subject to certain
exceptions, eliminates the potential personal liability of a director for
monetary damages to the Company and to the shareholders of the Company for
breach of a duty as a director. There is no elimination of liability for (a) a
breach of duty involving appropriation of a business opportunity of the
Company, (b) an act or omission not in good faith or involving intentional
misconduct or a knowing violation of law, (c) a transaction from which the
director derives an improper material tangible personal benefit, or (d) as to
any payment of a dividend or approval of a stock repurchase that is illegal
under the Georgia Business Corporation Code. Article 11 does not eliminate or
limit the right of the Company or its shareholders to seek injunctive or other
equitable relief not involving monetary damages.
26
<PAGE>
Article 11 was adopted by the Company pursuant to the Georgia Business
Corporation Code which allows Georgia corporations, with the approval of their
shareholders, to include in their Articles of Incorporation a provision
eliminating or limiting the liability of directors, except in the
circumstances described above. Article 11 was included in the Company's
Articles of Incorporation to encourage qualified individuals to serve and
remain as directors of the Company. While the Company has not experienced any
problems in locating directors, it could experience difficulty in the future
as the Company's business activities increase and diversify. Article 11 was
also included to enhance the Company's ability to secure liability insurance
for its directors at a reasonable cost. The Company intends to obtain
liability insurance covering actions taken by its directors in their
capacities as directors. The Board of Directors believes that Article 11 will
enable the Company to secure such insurance on terms more favorable than if
such a provision were not included in the Articles of Incorporation.
SUPERVISION AND REGULATION
Bank holding companies and banks are extensively regulated under both
federal and state law. The following is a brief summary of certain statutes,
rules and regulations affecting the Company and the Bank. This summary is
qualified in its entirety by reference to the particular statutory and
regulatory provision referred to below and is not intended to be an exhaustive
description of the statutes or regulations applicable to the business of the
Company and the Bank. Supervision, regulation and examination of the Company
and the Bank by the bank regulatory agencies are intended primarily for the
protection of depositors rather than shareholders of the Company.
BANK HOLDING COMPANY REGULATION
The Company will be a registered holding company under the Bank Holding
Company Act of 1956 (the "BHC Act") and the Georgia Bank Holding Company Act
(the "Georgia BHC Act") and will be regulated under such acts by the Board of
Governors of the Federal Reserve System (the "Federal Reserve") and by the
Department of Banking, respectively.
As a bank holding company, the Company is required to file annual reports
with the Federal Reserve and the Department of Banking and such additional
information as the applicable regulator may require pursuant to the BHC Act
and the Georgia BHC Act. The Federal Reserve and the Department of Banking may
also conduct examinations of the Company to determine whether it is in
compliance with both BHC Acts and the regulations promulgated thereunder.
The BHC Act also requires every bank holding company to obtain prior
approval from the Federal Reserve before acquiring direct or indirect
ownership or control of more than 5% of the voting shares of any bank which is
not already majority owned or controlled by that bank holding company.
Acquisition of any additional banks would also require prior approval from the
Department of Banking.
On September 29, 1994, President Clinton signed the Riegle-Neal Interstate
Banking and Branching Efficiency Act of 1994 (the "Interstate Act") which
amends federal law to permit bank holding companies to acquire existing banks
in any state effective September 29, 1995, and any interstate bank holding
company is permitted to merge its various bank subsidiaries into a single bank
with interstate branches effective June 1, 1997. States have the authority to
authorize interstate branching prior to June 1, 1997, or alternatively, to opt
out of interstate branching prior to that date.
In addition to having the right to acquire ownership or control of other
banks, a bank holding company is authorized to acquire ownership or control of
nonbanking companies, provided the activities of such companies are so closely
related to banking or managing or controlling banks that the Federal Reserve
considers such activities to be proper to the operation and control of banks.
Regulation Y, promulgated by the Federal Reserve, sets forth those activities
which are regarded as closely related to banking or managing or controlling
banks and, thus, are permissible activities for bank holding companies,
subject to approval by the Federal Reserve in individual cases.
27
<PAGE>
Federal Reserve 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. Under these provisions, a bank holding company may be
required to loan money to its subsidiaries in the form of capital notes or
other instruments which qualify for capital under regulatory rules. Any loans
by the holding company to such subsidiary banks are likely to be unsecured and
subordinated to such bank's depositors and perhaps to its other creditors.
BANK REGULATION
The Company will initially have one subsidiary bank. The Bank will be a
state bank chartered under the laws of the State of Georgia and will be
subject to examination by the Department of Banking. The Department of Banking
regulates or monitors all areas of a bank's operations and activities,
including reserves, loans, mergers, issuance of securities, payment of
dividends and establishment of branches.
The Bank will also be insured and regulated by the Federal Deposit Insurance
Corporation (the "FDIC"). The major functions of the FDIC with respect to
insured banks include paying depositors to the extent provided by law in the
event an insured bank is closed without adequately providing for payment of
the claims of depositors, acting as a receiver of state banks placed in
receivership when so appointed by state authorities, and preventing the
continuance or development of unsound and unsafe banking practices. In
addition, the FDIC is authorized to examine insured state banks which are not
members of the Federal Reserve to determine the condition of such banks for
insurance purposes. The FDIC also approves conversions, mergers,
consolidations and assumption of deposit liability transactions between
insured banks and noninsured banks or institutions to prevent capital or
surplus diminution in such transactions where the resulting, continued or
assuming bank is an insured non-member state bank.
Subsidiary banks of a bank holding company are subject to certain
restrictions imposed by the BHC Act on any extension of credit to the bank
holding company or any of its subsidiaries, on investment in the stock or
other securities of the bank holding company or its subsidiaries, and on the
taking of such stock or securities as collateral for loans to any borrower. In
addition, a bank holding company and its subsidiaries are prohibited from
engaging in certain tying arrangements in connection with any extension of
credit or provision of any property or services.
CAPITAL REQUIREMENTS
Regulatory agencies measure capital adequacy with a framework that makes
capital requirements sensitive to the risk profile of the individual banking
institution. The guidelines define capital as either Tier 1 capital (primarily
shareholders equity) or Tier 2 capital (certain debt instruments and a portion
of the reserve for loan losses). There are two measures of capital adequacy
for bank holding companies and their subsidiary banks: the Tier 1 leverage
ratio and the risk-based capital requirements. Bank holding companies and
their subsidiary banks must maintain a minimum Tier 1 leverage ratio of 4%. In
addition, Tier 1 capital must equal 4% of risk-weighted assets, and total
capital (Tier 1 plus Tier 2) must equal 8% of risk-weighted assets. These are
minimum requirements, however, and institutions experiencing internal growth
(which will initially be the case for the Bank) or making acquisitions, as
well as institutions with supervisory or operational weaknesses, will be
expected to maintain capital positions well above these minimum levels.
The federal banking agencies have proposed amending the capital adequacy
standards to provide for the consideration of interest rate risk in the
overall determination of a bank's capital ratio and to require banks with
greater interest rate risk to maintain adequate capital for the risk. It is
uncertain what effect these regulations, when implemented, would have on the
Company and the Bank.
The Federal Deposit Insurance Corporation Improvement Act of 1991 (the "1991
Act") imposes a regulatory matrix which requires the federal banking agencies
to take prompt corrective action to deal with depository institutions that
fail to meet their minimum capital requirements or are otherwise in a troubled
28
<PAGE>
condition. The prompt corrective action provisions require undercapitalized
institutions to become subject to an increasingly stringent array of
restrictions, requirements and prohibitions, as their capital levels
deteriorate and supervisory problems mount. Should these corrective measures
prove unsuccessful in recapitalizing the institution and correcting its
problems, the 1991 Act mandates that the institution be placed in
receivership.
Pursuant to regulations promulgated under the 1991 Act, the corrective
actions that the banking agencies either must or may take are tied primarily
to an institution's capital levels. In accordance with the framework adopted
by the 1991 Act, the banking agencies have developed a classification system,
pursuant to which all banks and thrifts are placed into one of five
categories: well-capitalized institutions, adequately capitalized
institutions, undercapitalized institutions, significantly undercapitalized
institutions and critically undercapitalized institutions. The capital
thresholds established for each of the categories are as follows:
<TABLE>
<CAPTION>
TOTAL RISK- TIER 1 RISK-
CAPITAL CATEGORY TIER 1 CAPITAL BASED CAPITAL BASED CAPITAL OTHER
---------------- --------------- ------------- ------------- -----------------
<S> <C> <C> <C> <C>
Well Capitalized ....... 5% or more 10% or more 6% or more Not subject to a
capital directive
Adequately Capitalized 4% or more 8% or more 4% or more --
.......................
Undercapitalized ....... less than 4% less than 8% less than 4% --
Significantly less than 3% less than 6% less than 3% --
Undercapitalized ......
Critically 2% or less -- -- --
Undercapitalized ...... tangible equity
</TABLE>
The Department of Banking will require the Bank to maintain a ratio (the
"primary capital ratio") of total capital (which is essentially Tier 1 capital
plus the allowance for loan losses) to total assets (defined as balance sheet
assets plus the allowance for loan losses) of at least 6%. In addition, the
Bank will be required to maintain a primary capital ratio of 8% during its
first three years of operation.
The capital guidelines can affect the Company and the Bank in several ways.
After completion of this offering, the Company and the Bank will both have
capital ratios which are significantly greater than those required for "well
capitalized" institutions. However, rapid growth, poor loan portfolio
performance, poor earnings performance, or a combination of these factors,
could change the capital position of the Company and the Bank, making an
additional capital infusion necessary.
CRA AND FAIR LENDING
On April 19, 1995, the federal bank regulatory agencies adopted revisions to
the regulations promulgated pursuant to the Community Reinvestment Act (the
"CRA"), which are intended to set distinct assessment standards for financial
institutions. The revised regulation contains three evaluation tests: (a) a
lending test which will compare the institution's market share of loans in
low- and moderate-income areas to its market share of loans in its entire
service area and the percentage of a bank's outstanding loans to low- and
moderate-income areas or individuals, (b) a services test which will evaluate
the provision of services that promote the availability of credit to low- and
moderate-income areas, and (c) an investment test, which will evaluate an
institution's record of investments in organizations designed to foster
community development, small- and minority-owned businesses and affordable
housing lending, including state and local government housing or revenue
bonds. The regulation is designed to reduce the paperwork requirements of the
current regulations and provide regulators, institutions and community groups
with a more objective and predictable manner with which to evaluate the CRA
performance of financial institutions. The rule became effective on January 1,
1996 when evaluation under streamlined procedures began for institutions with
assets of less than $250 million that are owned by a holding company with
total assets of less than $1 billion.
Congress and various federal agencies (including, in addition to the bank
regulatory agencies, the Department of Housing and Urban Development, the
Federal Trade Commission and the Department of Justice) (collectively the
"Federal Agencies") responsible for implementing the nation's fair lending
laws have been
29
<PAGE>
increasingly concerned that prospective home buyers and other borrowers are
experiencing discrimination in their efforts to obtain loans. In recent years,
the Department of Justice has filed suit against financial institutions which
it determined had discriminated, seeking fines and restitution for borrowers
who allegedly suffered from discriminatory practices. Most, if not all, of
these suits have been settled (some for substantial sums) without a full
adjudication on the merits.
On March 8, 1994, the Federal Agencies, in an effort to clarify what
constitutes lending discrimination and to specify the factors the agencies
will consider in determining if lending discrimination exists, announced a
joint policy statement detailing specific discriminatory practices prohibited
under the Equal Credit Opportunity Act and the Fair Housing Act. In the policy
statement, three methods of proving lending discrimination were identified:
(a) overt evidence of discrimination, when a lender blatantly discriminates on
a prohibited basis, (b) evidence of disparate treatment, when a lender treats
applicants differently based on a prohibited factor even where there is no
showing that the treatment was motivated by prejudice or a conscious intention
to discriminate against a person, and (c) evidence of disparate impact, when a
lender applies a practice uniformly to all applicants, but the practice has a
discriminatory effect, even where such practices are neutral on their face and
are applied equally, unless the practice can be justified on the basis of
business necessity.
FDIC INSURANCE ASSESSMENTS
The Bank will be subject to FDIC deposit insurance assessments for the Bank
Insurance Fund. The FDIC has implemented a risk-based assessment system
whereby banks are assessed on a sliding scale depending on their placement in
nine separate supervisory categories. Beginning January, 1996, the highest-
rated institutions pay the statutory annual minimum of $2,000 for FDIC
insurance. Rates for all other institutions have been reduced by four cents
per $100 as well, leaving a premium range of 3 cents to 27 cents per $100.
FUTURE REQUIREMENTS
Statutes and regulations are regularly proposed which contain wide-ranging
proposals for altering the structures, regulations and competitive
relationships of the nation's financial institutions. It cannot be predicted
whether or what form any proposed statute or regulation will be adopted or the
extent to which the business of the Company and the Bank may be affected by
such statute or regulation.
LEGAL MATTERS
The validity of the Common Stock offered hereby will be passed upon for the
Company by Powell, Goldstein, Frazer & Murphy, Atlanta, Georgia.
EXPERTS
The financial statements of the Company at September 30, 1996, and for the
period from August 2, 1996 (inception) until September 30, 1996, set forth
herein have been so included in reliance on the report of Porter Keadle Moore,
LLP, independent certified public accountants, given on the authority of that
firm as experts in accounting and auditing.
30
<PAGE>
[ART]
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
To the Board of Directors
Decatur First Bank Group, Inc.
We have audited the accompanying balance sheet of Decatur First Bank Group,
Inc. (a development stage corporation) as of September 30, 1996, and the
related statements of operations, changes in stockholder's equity and cash
flows for the period from August 2, 1996 (inception) to September 30, 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 balance sheet is 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 Decatur First Bank Group,
Inc. as of September 30, 1996 and the results of its operations and its cash
flows from August 2, 1996 (inception) to September 30, 1996 in conformity with
generally accepted accounting principles.
The accompanying financial statements have been prepared assuming that
Decatur First Bank Group, Inc. will continue as a going concern. As discussed
in note 1 to the financial statements, the Company is in the organization
stage and has not commenced operations. Also, as discussed in note 3, the
Company's future operations are dependent on obtaining capital through an
initial stock offering and obtaining the necessary final regulatory approvals.
These factors and the expense associated with development of a new banking
institution raise substantial doubt about the Company's ability to continue as
a going concern. Management's plans in regard to these matters are described
in note 3. The financial statements do not include any adjustments relating to
the recoverability of reported asset amounts or the amount of liabilities that
might result from the outcome of this uncertainty.
Porter Keadle Moore, LLP
Atlanta, Georgia
October 7, 1996
Certified Public Accountants
- -------------------------------------------------------------------------------
Suite 1800 . 235 Peachtree Street NE . Atlanta, Georgia 30303 . Phone 404-588-
4200 . Fax 404-588-4222
F-1
<PAGE>
DECATUR FIRST BANK GROUP, INC.
(A DEVELOPMENT STAGE CORPORATION)
BALANCE SHEET
SEPTEMBER 30, 1996
<TABLE>
<S> <C>
ASSETS
Cash.................................................................. $10,751
Organization costs.................................................... 57,808
Deferred offering expenses............................................ 3,000
Other assets.......................................................... 5,511
-------
$77,070
=======
LIABILITIES AND STOCKHOLDER'S EQUITY
Accounts payable and accrued expenses................................. $15,458
Accounts payable--organizers.......................................... 55,000
Note payable--line of credit.......................................... 50,000
-------
Currrent liabilities.............................................. 120,458
-------
Stockholder's equity (notes 2 and 5):
Preferred stock, no par value; 2,000,000 shares authorized; no
shares issued and outstanding...................................... --
Common stock, par value $5 per share; 10,000,000 shares authorized;
1 share issued and outstanding..................................... 5
Additional paid-in capital.......................................... 5
Deficit accumulated during the development stage.................... (43,398)
-------
Total stockholders equity......................................... (43,388)
-------
$77,070
=======
</TABLE>
See accompanying notes to financial statements.
F-2
<PAGE>
DECATUR FIRST BANK GROUP, INC.
(A DEVELOPMENT STAGE CORPORATION)
STATEMENT OF OPERATIONS
FOR THE PERIOD FROM AUGUST 2, 1996 (INCEPTION) TO SEPTEMBER 30, 1996
<TABLE>
<S> <C>
Expenses:
Salaries and employee benefits....................................... $32,364
Interest............................................................. 240
Other operating...................................................... 10,794
-------
Net loss........................................................... $43,398
=======
Net loss per share................................................. $43,398
=======
</TABLE>
See accompanying notes to financial statements.
F-3
<PAGE>
DECATUR FIRST BANK GROUP, INC.
(A DEVELOPMENT STAGE CORPORATION)
STATEMENT OF CHANGES IN STOCKHOLDER'S EQUITY
FOR THE PERIOD FROM AUGUST 2, 1996 (INCEPTION) TO SEPTEMBER 30, 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......... $ -- 5 5 -- 10
Net loss..................... -- -- -- (43,398) (43,398)
----- --- --- ------- -------
Balance, September 30, 1996.. $ -- 5 5 (43,398) (43,388)
===== === === ======= =======
</TABLE>
See accompanying notes to financial statements.
F-4
<PAGE>
DECATUR FIRST BANK GROUP, INC.
(A DEVELOPMENT STAGE CORPORATION)
STATEMENT OF CASH FLOWS
FOR THE PERIOD FROM AUGUST 2, 1996 (INCEPTION) TO SEPTEMBER 30, 1996
<TABLE>
<S> <C>
Cash flows from operating activities:
Net loss........................................................... $(43,398)
Adjustments to reconcile net loss to net cash used in operating
activities:
Increase in other assets......................................... (5,511)
Increase in accounts payable and accrued expenses................ 15,458
--------
Net cash used in operating activities.......................... (33,451)
--------
Cash flows from investing activities:
Organization costs................................................. (57,808)
Payments for stock offering expenses............................... (3,000)
--------
Net cash used in investing activities.......................... (60,808)
--------
Cash flows from financing activities:
Proceeds from accounts payable--organizers ........................ 55,000
Proceeds from note payable......................................... 50,000
Proceeds from the sale of organization share....................... 10
--------
Net cash provided by financing activities...................... 105,010
--------
Net increase in cash and cash equivalents............................ 10,751
Cash and cash equivalents at beginning of period..................... --
--------
Cash and cash equivalents at end of period........................... $ 10,751
========
</TABLE>
See accompanying notes to financial statements.
F-5
<PAGE>
DECATUR FIRST BANK GROUP, INC.
(A DEVELOPMENT STAGE CORPORATION)
NOTES TO FINANCIAL STATEMENTS
(1) ORGANIZATION
Decatur First Bank Group, Inc. (the Company) was incorporated for the
purpose of becoming a bank holding company. The Company intends to acquire
100% of the outstanding common stock of Decatur First Bank (the Bank), which
will operate in the Decatur, Georgia 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. Provided that the
application is timely approved and necessary capital is raised, it is expected
that operations will commence in the second quarter of 1997. The Company
intends to file an application to become a bank holding company with the
Federal Reserve Bank of Atlanta.
Operations through September 30, 1996 relate primarily to expenditures by
the organizers for incorporating and organizing the Company. All expenditures
by the organizers are considered expenditures of the Company.
The Company plans to raise between $7,100,000 and $12,000,000 through an
offering of its common stock at $10 per share, of which $7,000,000 will be
used to capitalize the Bank. The organizers and directors expect to subscribe
for a minimum of approximately $1,550,000 of the Company's stock.
Upon chartering of the Bank and approval of the Company as a bank holding
company, the Company and its Bank subsidiary will assume certain obligations
from the organizers, including certain organization costs and offering
expenses. Upon the 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, all of these expenses will be absorbed by the
organizers and will not become an obligation of the Company.
(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Cash Flows
For purposes of reporting cash flows, cash consists of amounts due from
banks.
Organization Costs
Costs incurred for the organization of the Company and the Bank (consisting
principally of legal, accounting, consulting and incorporation fees) are being
capitalized and will be amortized over five years. Amortization of the
organization costs will begin when banking operations commence.
Deferred Offering Expenses
Costs incurred in connection with the stock offering, consisting of direct,
incremental costs of the offering, are being deferred and will be offset
against the proceeds of the stock sale as a charge to additional paid
in capital.
Pre-Opening expenses
Costs incurred for overhead and other operating expenses are included in the
current period's operating results.
Net Loss Per Common Share
Net loss per common share is calculated by dividing net loss by the weighted
average number of common shares outstanding during the period.
F-6
<PAGE>
DECATUR FIRST BANK GROUP, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
(3) LIQUIDITY AND GOING CONCERN CONSIDERATIONS
The Company incurred a net loss of $43,398 for the period from August 2,
1996 (inception) to September 30, 1996. At September 30, 1996, liabilities
exceeded assets by $43,388.
At September 30, 1996, the Company is funded by advances from the organizers
and from a line of credit from a bank. Management believes that the current
level of expenditures is well within the financial capabilities of the
organizers and adequate to meet existing obligations and fund current
operations, but obtaining final regulatory approvals and commencing banking
operations is dependent on successfully completing the stock offering.
To provide permanent funding for its operation, the Company is currently
offering a minimum of 710,000 and a maximum of 1,200,000 shares of its common
stock, $5 par value, at $10 per share in an initial public offering. Costs
related to the organization and registration of the Bank's common stock will
be paid from the gross proceeds of the offering. Shares issued which are
outstanding at September 30, 1996 will be redeemed concurrently with the
consummation of the offering. Should subscriptions for the minimum offering
not be obtained, amounts paid by the subscribers with their subscriptions will
be returned and the offer withdrawn.
(4) LINE OF CREDIT
Organization, offering and pre-opening costs incurred prior to the opening
for business will be funded under a $300,000 line of credit. The terms of the
existing line of credit, which is guaranteed by the organizers, include a
maturity of August 27, 1997 and interest calculated at the prime interest
rate.
(5) PREFERRED STOCK
Shares of preferred stock may be issued from time to time in one or more
series as established by resolution of the Board of Directors of the Company.
Each resolution shall include the number of shares issued, preferences,
special rights and limitations as determined by the Board.
(6) COMMITMENTS
On September 9, 1996 the Company entered into an operating lease agreement
for space which will serve as the main office of the Company and the Bank.
Through May of 1997, the Company has entered into a sublease agreement with
the current lessor at a rate of $3,200 per month, but from June 1997 through
June 2002 the Company has committed to a monthly rental of $4,500, contingent
upon the receipt of all required regulatory approvals. The lease terms also
include an option to purchase at a price of $500,000. The lease may be
canceled by the Company prior to March 1, 1997 should the Company and the Bank
not receive the required regulatory approvals.
In regards to this lease, certain expenditures for modifications to the
exisiting structure are anticipated to prepare the building to serve as the
main office of the Company and the Bank. It is management's estimate that
these costs should approximate $400,000.
The Company entered into an employment agreement with its President and
Chief Executive Officer, providing for an initial term of five years
commencing June 1, 1996, and an automatic annual extension subsequent to that
five year period. The agreement provides for a base salary, an incentive bonus
based on five percent of the Company's pre-tax earnings, and stock options
which vest equally over five years at $10 per share equal to five percent of
the number of shares sold in the initial public offering. Additionally, the
Company is to maintain a $1,000,000 key man life insurance policy, with
$500,000 payable to the Company and $500,000 payable to the President's
family. The agreement further provides for other perquisites, and subjects the
President to certain non-compete restrictions.
F-7
<PAGE>
DECATUR FIRST BANK GROUP, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
(7) INCOME TAXES
At September 30, 1996, the Company had a net operating loss carryforward for
tax purposes of approximately $250, which will expire in 2011, if not
previously utilized. No income tax expense or benefit was recorded for the
period ended September 30, 1996, due to this loss carryforward.
The following summarizes the sources and expected tax consequences of future
taxable deductions which comprise the net deferred taxes at September 30,
1996:
<TABLE>
<S> <C>
Deferred tax assets:
Pre-opening expenses............................................. $ 14,668
Operating loss carryforwards..................................... 87
--------
Total gross deferred tax assets.................................. 14,755
Less valuation allowance......................................... (14,755)
--------
Net deferred taxes............................................... $ --
========
</TABLE>
The future tax consequences of the differences between the financial
reporting and tax basis of the Company's assets and liabilities resulted in a
net deferred tax asset. A valuation allowance was established for the net
deferred tax asset, as the realization of these deferred tax assets is
dependent on future taxable income.
F-8
<PAGE>
EXHIBIT A
PRELIMINARY SUBSCRIPTION AGREEMENT
Decatur First Bank Group, Inc.
755 Commerce Drive
Suite 516
Decatur, Georgia 30030
Attn: Judy B. Turner
Ladies and Gentlemen:
The undersigned hereby subscribes for and agrees to purchase the number of
shares of Common Stock, par value $5.00 per share (the "Common Stock"), of
Decatur First Bank Group, Inc., a Georgia corporation (the "Company"),
indicated below. The undersigned has executed and delivered this Preliminary
Subscription Agreement in connection with the Company's offering of Common
Stock described in its Preliminary Prospectus dated October 18, 1996. (Such
Prospectus, including any amendments and supplements thereto, is herein called
the "Preliminary Prospectus.")
The undersigned intends to purchase the shares of Common Stock subscribed
for herein for the purchase price of $10.00 per share.
The undersigned acknowledges receipt of a copy of the Preliminary
Prospectus. The undersigned further acknowledges that an investment in the
Common Stock involves significant risks, as set forth under "Risk Factors" in
the Preliminary Prospectus. The undersigned understands that no federal or
state agency has made any finding or determination regarding the fairness of
the offering of the Common Stock, the accuracy or adequacy of the Preliminary
Prospectus, or any recommendation or endorsement concerning an investment in
the Common Stock.
THE UNDERSIGNED AGREES THAT THIS SUBSCRIPTION IS NOT BINDING ON THE
UNDERSIGNED AND IS REVOCABLE BY THE UNDERSIGNED UNTIL THE UNDERSIGNED
FURNISHES AN ACKNOWLEDGEMENT OF SUBSCRIPTION AND PAYMENT FOR THE SHARES
SUBSCRIBED FOR TO THE COMPANY. THE UNDERSIGNED ACKNOWLEDGES THAT THE COMPANY
HAS THE RIGHT TO REJECT THIS PRELIMINARY SUBSCRIPTION AGREEMENT, EITHER IN
WHOLE OR IN PART, IN ITS SOLE DISCRETION.
Number of Shares _____________________________________
(minimum 100 shares): Please PRINT or TYPE exact name(s) in
which undersigned desires shares to
Total Subscription Price ___________ be registered
(at $10.00 per share): $___________*
(CONTINUED)
*DO NOT SEND THE PURCHASE PRICE FOR YOUR SHARES AT THIS TIME.
A-1
<PAGE>
SUBSTITUTE W-9
Under the penalties of perjury, I certify that: (1) the Social Security
number or Taxpayer Identification Number given below is correct; and (2) I am
not subject to backup withholding. INSTRUCTION: YOU MUST CROSS OUT #2 ABOVE IF
YOU HAVE BEEN NOTIFIED BY THE INTERNAL REVENUE SERVICE THAT YOU ARE SUBJECT TO
BACKUP WITHHOLDING BECAUSE OF UNDERREPORTING INTEREST OR DIVIDENDS ON YOUR TAX
RETURN.
_____________________________________ ___________________________________
Date
Signature(s)*
_____________________________________ ___________________________________
Area Code and Telephone No.
Please indicate form of ownership
_____________________________________ the undersigned desires for the
shares (individual, joint tenants
with right of survivorship,
tenants in common, trust,
corporation, partnership,
custodian, etc.)
Social Security or Federal Taxpayer Identification No.
___________________________________
Street Address
___________________________________
City/State/Zip Code
TO BE COMPLETED BY THE COMPANY
Accepted as of , 199 , as to shares.
DECATUR FIRST BANK GROUP, INC.
By: _________________________________
Signature
___________________________________
Print Name
* When signing as attorney, trustee, administrator, or guardian, please give
your full title as such. If a corporation, please sign in full corporate
name by president or other authorized officer. In case of joint tenants,
each joint owner must sign.
A-2
<PAGE>
EXHIBIT B
ACKNOWLEDGMENT OF SUBSCRIPTION
DECATUR FIRST BANK GROUP, INC.
755 COMMERCE DRIVE
SUITE 516
DECATUR, GEORGIA 30030
Dear Subscriber:
Please sign below as indicated to acknowledge receipt of a final prospectus
and to convert your preliminary subscription to a final and binding
subscription. Please enclose a check payable to "The Bankers Bank--Escrow
Account for Decatur First Bank Group, Inc." in the amount of $10.00 multiplied
by the number of shares you intend to subscribe for.
Your stock certificate(s) representing shares of common stock duly
authorized and fully paid will be issued to you as soon as possible after all
subscription funds are released to the Company from the subscription escrow
account, all as described in the Prospectus, dated , 1996. In the event (a)
that the offering is cancelled, or (b) that subscriptions for the minimum
number of 710,000 shares are not obtained, your subscription funds will be
returned to you as described in the Prospectus.
Very Truly Yours,
Decatur First Bank Group, Inc.
By: _________________________________
Judy B. Turner
President
_____________________________________
Date
The undersigned acknowledges the receipt of the final Prospectus of Decatur
First Bank Group, Inc. and converts the Preliminary Subscription Agreement to
a final Subscription Agreement, which will be binding and irrevocable until
the Expiration Date as defined in the Prospectus. The undersigned encloses
$ for the purchase of shares, at the purchase price of $10.00 per
share.
_____________________________________
Signature
_____________________________________
Print Name
_____________________________________
Date
<PAGE>
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
THE COMPANY RESERVES THE RIGHT, IN ITS SOLE DISCRETION, TO REJECT ANY AND ALL
SUBSCRIPTIONS, AND NO SUBSCRIPTION WILL BE EFFECTIVE UNTIL ACCEPTED BY THE
COMPANY.
NO PERSON HAS BEEN AUTHORIZED BY THE COMPANY TO GIVE ANY INFORMATION OR TO
MAKE ANY REPRESENTATIONS NOT CONTAINED IN THIS PROSPECTUS, AND ANY INFORMATION
OR STATEMENT NOT CONTAINED HEREIN MUST NOT BE RELIED UPON AS HAVING BEEN AU-
THORIZED BY THE COMPANY. THE DELIVERY OF THIS PROSPECTUS DOES NOT IMPLY THAT
THE INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO ITS
DATE.
THE COMPANY HAS UNDERTAKEN TO UPDATE THIS PROSPECTUS TO REFLECT ANY FACTS OR
EVENTS ARISING AFTER THE DATE HEREOF, WHICH INDIVIDUALLY OR IN THE AGGREGATE
REPRESENT A FUNDAMENTAL CHANGE IN THE INFORMATION SET FORTH HEREIN AND TO IN-
CLUDE ANY MATERIAL INFORMATION WITH RESPECT TO THE PLAN OF DISTRIBUTION NOT
PREVIOUSLY DISCLOSED IN THIS PROSPECTUS OR ANY MATERIAL CHANGES TO SUCH INFOR-
MATION.
EACH SUBSCRIBER SHOULD CONSULT HIS OR HER OWN COUNSEL, ACCOUNTANTS AND OTHER
PROFESSIONAL ADVISORS AS TO ALL MATTERS CONCERNING HIS OR HER INVESTMENT IN
SHARES OF THE COMMON STOCK.
THE SHARES OF COMMON STOCK OF THE COMPANY OFFERED HEREBY ARE NOT DEPOSITS IN-
SURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION.
THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL IN ANY JURISDICTION OR A
SOLICITATION OF AN OFFER TO BUY ANY OF THE SHARES OF THE COMMON STOCK TO ANY
PERSON IN ANY JURISDICTION IN WHICH SUCH OFFER OR SOLICITATION IS UNLAWFUL.
---------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
---------
<S> <C>
Risk Factors........................................................ 5
The Offering........................................................ 8
Use of Proceeds..................................................... 11
Capitalization...................................................... 13
Dividends........................................................... 13
Business of the Company and the Bank................................ 14
Management.......................................................... 18
Market for Common Stock and Related Shareholder Matters............. 21
Description of Capital Stock of the Company......................... 22
Antitakeover Provisions of the Company's Articles of Incorporation
and Bylaws......................................................... 23
Indemnification and Limitation of Liability of Directors............ 26
Supervision and Regulation.......................................... 27
Legal Matters....................................................... 30
Experts............................................................. 30
Financial Statements................................................ F-1
Subscription Agreement.............................................. Exhibit A
Acknowledgment of Subscription...................................... Exhibit B
</TABLE>
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
DECATUR FIRST BANK GROUP, INC.
A PROPOSED BANK HOLDING COMPANY
FOR
DECATUR FIRST BANK
(IN ORGANIZATION)
1,200,000
SHARES OF
COMMON STOCK
PROSPECTUS
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 24. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Consistent with the pertinent provisions of the laws of Georgia, the
Registrant's Articles of Incorporation provide that the Registrant shall have
the power to indemnify its directors and officers against expenses (including
attorneys' fees) and liabilities arising from actual or threatened actions,
suits or proceedings, whether or not settled, to which they become subject by
reason of having served in such role if such director or officer acted in good
faith and in a manner he or she reasonably believed to be in or not opposed to
the best interests of the Registrant and, with respect to a criminal action or
proceeding, had no reasonable cause to believe his or her conduct was
unlawful. Advances against expenses shall be made so long as the person
seeking indemnification agrees to refund the advances if it is ultimately
determined that he or she is not entitled to indemnification. A determination
of whether indemnification of a director or officer is proper because he or
she met the applicable standard of conduct shall be made (a) by the Board of
Directors of the Registrant, (b) in certain circumstances, by independent
legal counsel in a written opinion, or (c) by the affirmative vote of a
majority of the shares entitled to vote.
ITEM 25. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
Expenses of the sale of the Registrant's Common Stock, $5.00 par value, are
as follows:
<TABLE>
<S> <C>
Registration Fee.................................................... $ 3,637
Legal Fees and Expenses (Estimate).................................. 10,000
Printing and Engraving Expenses (Estimate).......................... 20,000
Miscellaneous (Estimate)............................................ 2,363
-------
Total............................................................. $36,000
=======
</TABLE>
ITEM 26. RECENT SALES OF UNREGISTERED SECURITIES.
On August 2, 1996, the Registrant issued to Judy B. Turner, in a private
placement, one share of the Registrant's Common Stock, $5.00 par value per
share, for an aggregate purchase price of $10 in connection with the
organization of the Company. The sale to Ms. Turner was exempt from
registration under the Securities Act of 1933 pursuant to Section 4(2) of such
Act because it was a transaction by an issuer which did not involve a public
offering.
II-1
<PAGE>
ITEM 27. EXHIBITS.
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<C> <S>
3.1 Articles of Incorporation, as amended by Articles of Amendment to
Articles of Incorporation
3.2 Bylaws
4.1 Instruments Defining Rights of Security Holders. See Articles of
Incorporation at Exhibit 3.1 hereto and Bylaws at Exhibit 3.2 hereto.
5.1 Legal Opinion of Powell, Goldstein, Frazer & Murphy
10.1 Agreement To Lease, dated August 20, 1996, between Daniel B. Pattillo
and Decatur First Bank Group, Inc.
10.2 Agreement of Sublease, dated September 9, 1996, between Atlanta Gas
Light Company and Decatur First Bank Group, Inc.
10.3 Escrow Agreement, dated October 17, 1996, between Decatur First Bank
Group, Inc. and The Bankers Bank
10.4 Employment Agreement, dated as of June 1, 1996 among Decatur First
Bank (In Organization), Decatur First Bank Group, Inc. and Judy B.
Turner
21.1 Subsidiaries of Decatur First Bank Group, Inc.
23.1 Consent of Porter Keadle Moore, LLP
23.2 Consent of Powell, Goldstein, Frazer & Murphy (appears in Legal
Opinion at Exhibit 5.1 hereto)
24.1 Power of Attorney (appears on the signature pages to this Registration
Statement on Form SB-2)
27 Financial Data Schedule
</TABLE>
ITEM 28. UNDERTAKINGS.
The undersigned Registrant hereby undertakes as follows:
(a)(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events which,
individually or together, represent a fundamental change in the
information set forth in the Registration Statement, and not
withstanding the forgoing, any increase or decrease in volume of
securities offered (if the total dollar value of securities offered
would not exceed that which was registered) and any deviation from the
low or high end of the estimated offering range may be reflected in the
form of prospectus filed with the Commission pursuant to Rule 424(b)
if, in the aggregate, the changes in volume and price represent no more
than a 20% change in the maximum aggregate offering price set forth in
the "Calculation of Registration Fee" table in the effective
Registration Statement;
(iii) To include any additional or changed material information in
the plan of distribution.
(2) For the purpose of determining any liability under the Securities Act
of 1933, to treat each post-effective amendment as a new Registration
Statement of the securities offered, and the offering the securities at the
time shall be deemed to be the initial bona fide offering.
(3) To file a post-effective amendment to remove from registration any of
the securities being registered which remain unsold at the termination of
this offering.
(c) 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 Registrant pursuant to the provisions set
forth in Item 24, or otherwise, the Registrant has been advised that in the
opinion of the Securities and
II-2
<PAGE>
Exchange Commission such indemnification is against public policy as
expressed in the 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 Act and will be governed by the final
adjudication of such issue.
II-3
<PAGE>
SIGNATURES
IN ACCORDANCE WITH THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THE
REGISTRANT CERTIFIES THAT IT HAS REASONABLE GROUNDS TO BELIEVE THAT IT MEETS
ALL OF THE REQUIREMENTS OF FILING ON FORM SB-2 AND AUTHORIZED THIS
REGISTRATION STATEMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, IN THE
CITY OF DECATUR, STATE OF GEORGIA ON OCTOBER 17, 1996.
DECATUR FIRST BANK GROUP, INC.
/s/ Judy B. Turner
By: _________________________________
Print Name: Judy B. Turner
Title: President
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS THAT EACH PERSON WHOSE SIGNATURE APPEARS ON
THE SIGNATURE PAGES TO THIS REGISTRATION STATEMENT CONSTITUTES AND APPOINTS
JUDY B. TURNER AND JOHN C. JOYNER, AND EACH OF THEM, HIS OR HER TRUE AND
LAWFUL ATTORNEYS-IN-FACT AND AGENTS, WITH FULL POWER OF SUBSTITUTION AND
RESUBSTITUTION, FOR THE UNDERSIGNED AND IN HIS OR HER NAME, PLACE, AND STEAD,
IN ANY AND ALL CAPACITIES, TO SIGN ANY AND ALL AMENDMENTS TO THIS REGISTRATION
STATEMENT, AND TO FILE THE SAME, WITH ALL EXHIBITS HERETO AND OTHER DOCUMENTS
IN CONNECTION HEREWITH WITH THE SECURITIES AND EXCHANGE COMMISSION, GRANTING
UNTO SAID ATTORNEYS-IN-FACT AND AGENTS AND EACH OF THEM, FULL POWER AND
AUTHORITY TO DO SO AND PERFORM EACH AND EVERY ACT AND THING REQUISITE AND
NECESSARY TO BE DONE IN AND ABOUT THE PREMISES, AS FULLY TO ALL INTENTS AND
PURPOSES AS HE OR SHE MIGHT OR COULD DO IN PERSON, HEREBY RATIFYING AND
CONFIRMING ALL THAT SAID ATTORNEYS-IN-FACT AND AGENTS OR EITHER OF THEM, OR
THEIR OR HIS SUBSTITUTE OR SUBSTITUTES, MAY LAWFULLY DO OR CAUSE TO BE DONE BY
VIRTUE HEREOF.
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 DATES INDICATED.
NAME POSITION DATE
/s/ John L. Adams, Jr. Director October 17,
- ------------------------------------- 1996
JOHN L. ADAMS, JR.
/s/ Merriell Autrey Director October 17,
- ------------------------------------- 1996
MERRIELL AUTREY
/s/ Mary Bobbie Bailey Director October 17,
- ------------------------------------- 1996
MARY BOBBIE BAILEY
/s/ James A. Baskett Director October 17,
- ------------------------------------- 1996
JAMES A. BASKETT
II-4
<PAGE>
NAME POSITION DATE
/s/ William F. Floyd Director October 17,
- ------------------------------------- 1996
WILLIAM F. FLOYD
/s/ John C. Joyner Director October 17,
- ------------------------------------- 1996
JOHN C. JOYNER
/s/ Robert E. Lanier Director October 17,
- ------------------------------------- 1996
ROBERT E. LANIER
/s/ Carol G. Nickola Director October 17,
- ------------------------------------- 1996
CAROL G. NICKOLA
/s/ Lynn Pasqualetti Director October 17,
- ------------------------------------- 1996
LYNN PASQUALETTI
/s/ Roger K. Quillen Director October 17,
- ------------------------------------- 1996
ROGER K. QUILLEN
/s/ Judy B. Turner President and Chief October 17,
- ------------------------------------- Executive Officer, 1996
JUDY B. TURNER Director (Principal
Financial and
Accounting Officer)
II-5
<PAGE>
INDEX OF EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT SEQUENTIAL
NUMBER DESCRIPTION PAGE
------- ----------- ----------
<C> <S> <C>
3.1 Articles of Incorporation.................................
3.2 Bylaws....................................................
4.1 Instruments Defining Rights of Security Holders. See
Articles of Incorporation at
Exhibit 3.1 hereto and Bylaws at Exhibit 3.2 hereto......
5.1 Legal Opinion of Powell, Goldstein, Frazer & Murphy.......
10.1 Agreement To Lease, dated August 20, 1996 between Daniel
B. Pattillo and Decatur First Bank Group, Inc............
10.2 Agreement To Sublease, dated September 9, 1996, between
Atlanta Gas Light Company and Decatur First Bank Group,
Inc......................................................
10.3 Escrow Agreement, dated October 17, 1996, between Decatur
First Bank Group, Inc. and The Bankers Bank..............
10.4 Employment Agreement, dated as of June 1, 1996 among
Decatur First Bank
(In Organization), Decatur First Bank Group, Inc. and
Judy B. Turner...........................................
21.1 Subsidiaries of Decatur First Bank Group, Inc.............
23.1 Consent of Porter Keadle Moore, LLP.......................
23.2 Consent of Powell, Goldstein, Frazer & Murphy (appears in
Legal Opinion at Exhibit 5.1 hereto).....................
24.1 Power of Attorney (appears on the signature pages to this
Registration Statement on
Form SB-2)...............................................
27 Financial Data Schedule...................................
</TABLE>
<PAGE>
EXHIBIT 3.1
ARTICLES OF INCORPORATION, AS AMENDED
BY ARTICLES OF AMENDMENT TO
ARTICLES OF INCORPORATION
<PAGE>
ARTICLES OF INCORPORATION
OF
DECATUR FIRST BANK GROUP, INC.
Article 1. Name
---------- ----
The name of the Corporation is: "Decatur First Bank Group, Inc."
Article 2. State of Organization
---------- ---------------------
The Corporation is organized pursuant to the provisions of the Georgia
Business Corporation Code.
Article 3. Purpose
---------- -------
The object of the Corporation is pecuniary gain and profit, and the
Corporation is formed for the purpose of becoming and operating as a bank
holding company and engaging in such related and permissible activities in
connection therewith as the Board of Directors may from time to time specify by
resolution.
Article 4. Capital Stock
---------- -------------
The Corporation shall have authority to issue Ten Million (10,000,000)
shares of common stock (the "Common Stock"), $5.00 par value.
<PAGE>
Article 5. Registered Office; Registered Agent
---------- -----------------------------------
The initial registered office of the Corporation shall be at 631
Pinetree Drive, Decatur, Georgia 30030. The initial registered agent of the
Corporation at such address shall be John Joyner.
Article 6. Principal Office
---------- ----------------
The mailing address of the initial principal office of the corporation
is 755 Commerce Drive, Suite 516, Decatur, Georgia 30030.
Article 7. Initial Directors
---------- -----------------
The initial Board of Directors of the Corporation shall consist of
twelve (12) members who shall be and whose addresses are:
John L. Adams, Jr.
P.O. Box 98
Decatur, Georgia 30031
Merriell Autrey
1887 Bedfordshire Court
Decatur, Georgia 30033
Jim Baskett
160 South Candler Street
Decatur, Georgia 30030
Bobbie Bailey
4452 Bibb Boulevard
Tucker, Georgia 30084
William F. Floyd
712 W. Ponce de Leon Ave.
Decatur, Georgia 30030
George Frye
412 Church Street
Decatur, Georgia 30030
John Joyner
P.O. Box 100
Decatur, Georgia 30031-0100
Robert E. Lanier
3469 Lawrenceville Hwy., Suite 304
Tucker, Georgia 30084
Carol Nickola
7540 Chaparral Drive
Dunwoody, Georgia 30350
Lynn Pasqualetti
HLM Services, Inc.
412 Church Street
Decatur, Georgia 30030
Roger Quillen
124 Glen Circle
Decatur, Georgia 30030
Judy Turner
235 Drexel Avenue
Decatur, Georgia 30030
-2-
<PAGE>
Article 8. Terms of Directors
---------- ------------------
The Board of Directors shall be divided into three (3) classes, Class
I, Class II and Class III, which shall be as nearly equal in number as possible.
Each director in Class I shall be elected to an initial term of one (1) year,
each director in Class II shall be elected to an initial term of two (2) years,
each director in Class III shall be elected to an initial term of three (3)
years, and each director shall serve until the election and qualification of his
or her successor or until his or her earlier resignation, death or removal from
office. Upon the expiration of the initial terms of office for each Class of
directors, the directors of each Class shall be elected for terms of three (3)
years, to serve until the election and qualification of their successors or
until their earlier resignation, death or removal from office.
Article 9. Removal of Directors
---------- --------------------
(a) At any shareholders' meeting with respect to which notice of such
purpose has been given, the entire Board of Directors or any individual director
may be removed without cause only by the affirmative vote of the holders of at
least two-thirds (2/3) of the issued and outstanding shares of the Corporation
entitled to vote in an election of directors.
(b) At any shareholders' meeting with respect to which notice of such
purpose has been given, the entire Board of Directors or any individual director
may be removed with cause only by the affirmative vote of the holders of at
least a majority of the issued and outstanding shares of the Corporation
entitled to vote in an election of directors.
-3-
<PAGE>
(c) For purposes of this Article 9, a director of the Corporation may
be removed for cause if (i) the director has been convicted of a felony; (ii)
any bank regulatory authority having jurisdiction over the Corporation requests
or demands the removal; or (iii) at least two-thirds (2/3) of the directors of
the Corporation then in office, excluding the director to be removed, determine
that the director's conduct has been inimical to the best interests of the
Corporation.
Article 10. Bylaws; Number of Directors
----------- ---------------------------
(a) Except as provided in paragraph (b) of this Article 10, the Board
of Directors shall have the right to adopt, amend or repeal the bylaws of the
Corporation by the affirmative vote of a majority of all directors then in
office, and the shareholders shall have such right by the affirmative vote of a
majority of the issued and outstanding shares of the Corporation entitled to
vote in an election of directors.
(b) Notwithstanding paragraph (a) of this Article 10, any amendment of
the bylaws of the Corporation changing the number of directors shall require the
affirmative vote of two-thirds (2/3) of all directors then in office at any
regular or special meeting of the shareholders, and notice of the proposed
change must be contained in the notice of the meeting.
Article 11. Liability of Directors
----------- ----------------------
A director of the Corporation shall not be personally liable to the
Corporation or its shareholders for monetary damages, for breach of any duty as
a director, except for liability for:
-4-
<PAGE>
(i) any appropriation, in violation of his or her duties, of any
business opportunity of the Corporation;
(ii) acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of law;
(iii) the types of liability set forth in Section 14-2-832 of the
Georgia Business Corporation Code dealing with unlawful
distributions of corporate assets to shareholders; or
(iv) any transaction from which the director derived an improper
material tangible personal benefit.
Any repeal or modification of this Article by the shareholders of the
Corporation shall be prospective only and shall not adversely affect any right
or protection of a director of the Corporation existing at the time of such
repeal or modification.
Article 12. Shareholder Meetings
----------- --------------------
(a) Special meetings of shareholders may be called at anytime by the
Chairman of the Board of Directors, by the President or by a majority of the
directors then in office.
(b) Advance notice of shareholder nominations for the election of directors
and of business to be brought by shareholders before any meeting of the
shareholders of the Corporation shall be given in the manner provided in the
Bylaws of the Corporation.
Article 13. Certain Business Transactions
----------- -----------------------------
(a) Approval of any merger or share exchange of the Corporation with or
into any other corporation, or any sale, lease, exchange or other disposition of
all or
-5-
<PAGE>
substantially all of the assets of the Corporation to any other corporation,
person or other entity, shall require either:
(i) the affirmative vote of two-thirds (2/3) of the directors of the
Corporation then in office and the affirmative vote of a majority
of the issued and outstanding shares of the Corporation entitled
to vote; or
(ii) the affirmative vote of a majority of the directors of the
Corporation then in office and the affirmative vote of the
holders of at least two-thirds (2/3) of the issued and
outstanding shares of the Corporation entitled to vote.
(b) The Board of Directors shall have the power to determine for the
purposes of this Article 13, on the basis of information known to the
Corporation, whether any sale, lease, exchange or other disposition of part of
the assets of the Corporation involves substantially all of the assets of the
Corporation.
Article 14. Factors Considered in Business Transaction
----------- ------------------------------------------
The Board of Directors, when evaluating any offer of another party (i) to
make a tender offer or exchange offer for any equity security of the
Corporation, (ii) to merge or consolidate any other corporation with the
Corporation, or (iii) to purchase or otherwise acquire all or substantially all
of the assets of the Corporation, shall, in determining what is in the best
interests of the Corporation and its shareholders, give due consideration to all
relevant factors, including without limitation: (A) the short-term and long-
term social and economic effects on the employees, customers, shareholders and
other constituents of the Corporation and its subsidiaries, and on the
communities within which the Corporation and
-6-
<PAGE>
its subsidiaries operate (it being understood that any subsidiary bank of the
Corporation is charged with providing support to and being involved in the
communities it serves); and (B) the consideration being offered by the other
party in relation to the then-current value of the Corporation in a freely
negotiated transaction and in relation to the Board of Directors' then-estimate
of the future value of the Corporation as an independent entity.
Article 15. 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 8, 9, 10, 11, 12, 13 and
14 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 two-thirds (2/3) of the voting power of the then outstanding shares of
capital stock, voting together as a single class; provided, however, that such
two-thirds (2/3) 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 (2/3) 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.
-7-
<PAGE>
Article 16. Savings Clause
----------- --------------
Should any provision of these Articles of Incorporation, or any clause
hereof, be held to be invalid, illegal or unenforceable, in whole or in part,
the remaining provisions and clauses of these Articles of Incorporation shall
remain valid and fully enforceable.
Article 17. Incorporator
----------- ------------
The name and address of the incorporator of the Corporation is:
Judy B. Turner
755 Commerce Drive
Suite 516
Decatur, Georgia 30030
IN WITNESS WHEREOF, the undersigned has caused these Articles of
Incorporation to be executed, this 2nd day of August, 1996.
DECATUR FIRST BANK GROUP, INC.
/s/ Kathryn L. Knudson
----------------------
KATHRYN L. KNUDSON
Attorney for Incorporator
POWELL, GOLDSTEIN, FRAZER & MURPHY
Sixteenth Floor
191 Peachtree Street, N.E.
Atlanta, Georgia 30303
(404) 572-6600
-8-
<PAGE>
ARTICLES OF AMENDMENT
TO THE
ARTICLES OF INCORPORATION
OF
DECATUR FIRST BANK GROUP, INC.
(i)
The name of the Corporation is Decatur First Bank Group, Inc., and its
registered office is located in Decatur, Georgia.
(ii)
The Corporation hereby amends Article 4 of its Articles of Incorporation
by deleting Article 4 in its entirety and inserting in lieu thereof a new
Article 4 as follows:
"4. (a) The Corporation shall have the authority to issue ten
million (10,000,000) shares of common stock (the "Common Stock"),
$5.00 par value, and two million (2,000,000) shares of preferred stock
(the "Preferred Stock").
(b) The Board of Directors of the Corporation is authorized,
subject to limitations prescribed by law and the provisions of this
Article, to provide for the issuance of the shares of Preferred Stock
in series, and by filing a certificate pursuant to the applicable law
of the State of Georgia to establish from time to time the number of
shares to be included in each such series, and to fix the designation,
powers, preferences, and relative rights of the shares of each such
series and the qualifications, or restrictions thereof. The authority
of the Board of Directors with respect to each series shall include,
but not be limited to, determination of the following:
(i) The number of shares constituting that series and the
distinctive designation of that series;
(ii) The dividend rate on the shares of that series,
whether dividends shall be cumulative, and, if so,
from which date or dates, and the relative rights of
priority, if any, of payments of dividends on shares
of that series;
(iii) Whether that series shall have voting rights, in
addition to the voting rights provided by law, and,
if so, the terms of such voting rights;
(iv) Whether that series shall have conversion privileges,
and, if so, the terms and conditions of such
conversion, including provisions for adjustment of
the conversion rate in such events as the Board of
Directors shall determine;
<PAGE>
(v) Whether or not the shares of that series shall be
redeemable, and, if so, the terms and conditions of
such redemption, including the date or dates upon or
after which they shall be redeemable, and the amount
per share payable in case of redemption, which amount
may vary under different conditions and at different
redemption rates;
(vi) Whether that series shall have a sinking fund for the
redemption or purchase of shares of that series, and,
if so, the terms and amount of such sinking fund;
(vii) The rights of the shares of that series in the event
of voluntary or involuntary liquidation, dissolution
or winding-up of the Corporation, and the relative
rights of priority, if any, of payment of shares of
that series; and
(viii) Any other relative rights, preferences and
limitations of that series."
(iii)
The amendment to Article 4 was approved by the sole shareholder of the
Corporation on September 24, 1996 in accordance with the provisions of Code
Section 14-2-1003.
[Remainder of Page Intentionally Left Blank]
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<PAGE>
IN WITNESS WHEREOF, the Corporation has caused these Articles of Amendment
to be signed by its duly authorized officers, this 24th day of September, 1996.
DECATUR FIRST BANK GROUP, INC.
By: /s/ Judy B. Turner
--------------------
Judy B. Turner
President
ATTEST:
/s/ John C. Joyner
- ------------------
John C. Joyner
Secretary
[CORPORATE SEAL]
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<PAGE>
EXHIBIT 3.2
BYLAWS
DECATUR FIRST BANK GROUP, INC.
<PAGE>
BYLAWS
DECATUR FIRST BANK GROUP, INC.
INDEX
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<TABLE>
<CAPTION>
PAGE
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<C> <S> <C>
ARTICLE ONE OFFICES.............................................. 1
ARTICLE TWO SHAREHOLDERS' MEETINGS............................... 1
2.1 Annual Meeting....................................... 1
2.2 Special Meetings..................................... 1
2.3 Place................................................ 1
2.4 Notice............................................... 1
2.5 Quorum............................................... 1
2.6 Proxies; Required Vote............................... 2
2.7 Presiding Officer and Secretary...................... 2
2.8 Shareholder List..................................... 2
2.9 Conduct of Meetings.................................. 2
ARTICLE THREE DIRECTORS............................................ 3
3.1 Management........................................... 3
3.2 Number of Directors.................................. 3
3.3 Vacancies............................................ 3
3.4 Election of Directors................................ 4
3.5 Nominations of Directors............................. 4
3.6 Removal.............................................. 4
3.7 Resignation.......................................... 5
3.8 Compensation......................................... 5
3.9 Honorary and Advisory Directors...................... 5
ARTICLE FOUR COMMITTEES........................................... 5
4.1 Executive Committee.................................. 5
4.2 Other Committees..................................... 7
4.3 Removal.............................................. 7
ARTICLE FIVE MEETINGS OF THE BOARD OF DIRECTORS................... 7
5.1 Time and Place....................................... 7
5.2 Regular Meetings..................................... 7
5.3 Special Meetings..................................... 7
5.4 Content and Waiver of Notice......................... 7
5.5 Quorum; Participation by Telephone................... 7
5.6 Action in Lieu of Meeting............................ 8
5.7 Interested Directors and Officers.................... 8
ARTICLE SIX OFFICERS, AGENTS AND EMPLOYEES....................... 8
6.1 General Provisions................................... 8
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<C> <S> <C>
6.2 Powers and Duties of the Chairman of the Board of
Directors and the President................................. 9
6.3 Powers and Duties of Vice Presidents........................ 9
6.4 Powers and Duties of the Secretary.......................... 10
6.5 Powers and Duties of the Treasurer.......................... 10
6.6 Appointment, Powers and Duties of Assistant Secretaries..... 10
6.7 Appointment, Powers and Duties of Assistant Treasurers...... 10
6.8 Delegation of Duties........................................ 11
ARTICLE SEVEN CAPITAL STOCK............................................... 11
7.1 Certificates................................................ 11
7.2 Shareholder List............................................ 12
7.3 Transfer of Shares.......................................... 12
7.4 Record Dates................................................ 12
7.5 Registered Owner............................................ 12
7.6 Transfer Agent and Registrars............................... 12
7.7 Lost Certificates........................................... 12
7.8 Fractional Shares or Scrip.................................. 13
ARTICLE EIGHT BOOKS AND RECORDS; SEAL; ANNUAL STATEMENTS.................. 13
8.1 Inspection of Books and Records............................. 13
8.2 Seal........................................................ 14
8.3 Annual Statements........................................... 14
ARTICLE NINE INDEMNIFICATION............................................. 14
9.1 Definitions................................................. 14
9.2 Authority to Indemnify...................................... 15
9.3 Mandatory Indemnification................................... 15
9.4 Advance for Expenses........................................ 16
9.5 Court-Ordered Indemnification and Advances for Expenses..... 16
9.6 Determination of Indemnification............................ 16
9.7 Authorization of Indemnification............................ 17
9.8 Shareholder Approved Indemnification........................ 17
9.9 Indemnification of Officers, Employees, and Agents.......... 18
9.12 Continuation of Expenses.................................... 18
ARTICLE TEN NOTICES: WAIVERS OF NOTICE.................................. 18
10.1 Notices..................................................... 18
10.2 Waivers of Notice........................................... 18
ARTICLE ELEVEN EMERGENCY POWERS............................................ 19
11.1 Bylaws...................................................... 19
11.2 Lines of Succession......................................... 19
11.3 Head Office................................................. 19
</TABLE>
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<PAGE>
<TABLE>
<CAPTION>
<C> <S> <C>
11.4 Period of Effectiveness.............................. 19
11.5 Notices.............................................. 19
11.6 Officers as Directors Pro Tempore.................... 19
11.7 Liability of Officers, Directors and Agents.......... 19
ARTICLE TWELVE CHECKS, NOTES, DRAFTS, ETC........................... 20
ARTICLE THIRTEEN AMENDMENTS...................................... 20
</TABLE>
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<PAGE>
BYLAWS
OF
DECATUR FIRST BANK GROUP, INC.
ARTICLE ONE
OFFICES
The corporation shall at all times maintain its principal office in
Decatur, Georgia, its registered office in the State of Georgia and its
registered agent at that address, but it may have other offices located within
or outside the State of Georgia as the Board of Directors may determine.
ARTICLE TWO
SHAREHOLDERS' MEETINGS
2.1 Annual Meeting. A meeting of shareholders of the corporation shall be
--------------
held annually, within six (6) months after the end of each fiscal year of the
corporation. The annual meeting shall be held at such time and place and on
such date as the Board of Directors shall determine from time to time and as
shall be specified in the notice of the meeting.
2.2 Special Meetings. Special meetings of the shareholders may be called
----------------
at any time by the Chairman of the Board of Directors, the President, or by a
majority of the Board of Directors. Special meetings shall be held at such a
time and place and on such date as shall be specified in the notice of the
meeting.
2.3 Place. Annual or special meetings of shareholders may be held within
-----
or without the State of Georgia.
2.4 Notice. Notice of annual or special shareholders meetings stating
------
place, day and hour of the meeting shall be given in writing not less than ten
nor more than sixty days before the date of the meeting, either mailed to the
last known address or personally given to each shareholder. Notice of any
special meeting of shareholders shall state the purpose or purposes for which
the meeting is called. The notice of any meeting at which amendments to or
restatements of the articles of incorporation, merger or share exchange of the
corporation, or the disposition of corporate assets requiring shareholder
approval are to be considered shall state such purpose, and shall further comply
with all requirements of law. Notice of a meeting may be waived by an
instrument in writing executed before or after the meeting. The waiver need not
specify the purpose of the meeting or the business transacted, unless one of the
purposes of the meeting concerns a plan of merger or share exchange, in which
event the waiver shall comply with the further requirements of law concerning
such waivers. Attendance at such meeting in person or by proxy shall constitute
a waiver of notice thereof.
2.5 Quorum. At all meetings of shareholders a majority of the outstanding
------
shares of stock shall constitute a quorum for the transaction of business, and
no resolution or business shall
<PAGE>
be transacted without the favorable vote of the holders of a majority of the
shares represented at the meeting and entitled to vote. A lesser number may
adjourn from day to day, and shall announce the time and place to which the
meeting is adjourned.
2.6 Proxies; Required Vote. At every meeting of the shareholders,
----------------------
including meetings of shareholders for the election of Directors, any
shareholder having the right to vote shall be entitled to vote in person or by
proxy, but no proxy shall be voted after eleven months from its date, unless
said proxy provides for a longer period. Each shareholder shall have one vote
for each share of stock having voting power, registered in his or her name on
the books of the corporation. If a quorum is present, the affirmative vote of
the majority of the shares represented at the meeting and entitled to vote on
the subject matter shall be the act of the shareholders, except as otherwise
provided by law, by the Articles of Incorporation or by these bylaws.
2.7 Presiding Officer and Secretary. At every meeting of shareholders,
-------------------------------
the Chairman or the President, or, if such officers shall not be present, then
the person appointed by one of them shall preside. The Secretary or an
Assistant Secretary, or if such officers shall not be present, the appointee of
the presiding officer of the meeting, shall act as secretary of the meeting.
2.8 Shareholder List. The officer or agent having charge of the stock
----------------
transfer books of the corporation shall produce for inspection of any
shareholder at, and continuously during, every meeting of the shareholders, a
complete alphabetical list of shareholders showing the address and share
holdings of each shareholder. If the record of shareholders readily shows such
information, it may be produced in lieu of such a list.
2.9 Conduct of Meetings.
-------------------
(a) All annual and special meetings of 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 the President's absence, such person
as designated by the Board of Directors. The Secretary, or in the Secretary's
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 paragraph (c).
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<PAGE>
(c) For business to be properly brought before an annual meeting by a
shareholder, the shareholder must have given timely notice 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 offices 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 paragraph
(c). 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
paragraph (c) and any such business so determined to be not properly brought
before the meeting shall not be transacted.
ARTICLE THREE
DIRECTORS
3.1 Management. Subject to these bylaws, or any lawful agreement between
----------
the shareholders, the full and entire management of the affairs and business of
the corporation shall be vested in the Board of Directors, which shall have and
may exercise all of the powers that may be exercised or performed by the
corporation.
3.2 Number of Directors. The Board of Directors shall consist of not less
-------------------
than five (5) nor more than twenty-five (25) members. The number of Directors
may be fixed or changed from time to time, within the minimum and maximum, by
the shareholders by the affirmative vote of two-thirds (2/3) of the issued and
outstanding shares of the corporation entitled to vote in an election of
Directors, or by the Board of Directors by the affirmative vote of two-thirds
(2/3) of all Directors then in office.
3.3 Vacancies. The Directors, even though less than a quorum, may fill
---------
any vacancy on the Board of Directors, including a vacancy created by an
increase in the number of Directors. Such appointment by the Directors shall
continue until the expiration of the term of the Director whose place has become
vacant or, in the case of an increase in the number of Directors, until the next
meeting of the shareholders.
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<PAGE>
3.4 Election of Directors. The Board of Directors shall be divided into
---------------------
three classes. One class of Directors shall be elected at each annual
shareholders' meeting and shall serve staggered terms of three years each and
until their successors are elected or qualified.
3.5 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.
The Board of Directors shall act as a nominating committee to select the
management nominees for election as Directors.
(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 reelection as a Director, all
information relating to such person as required to be disclosed in solicitation
of proxies for election of Directors 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 (A) the
name and address, as they appear on the books of the corporation, of such
shareholder and (B) 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 the defective nomination shall be disregarded.
3.6 Removal. Any Director may be removed from office, at a meeting with
-------
respect to which notice of such purpose is given (a) without cause, only upon
the affirmative vote of the holders of two-thirds (2/3) of the issued and
outstanding shares of the corporation, and (b) with
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<PAGE>
cause, only upon the affirmative vote of the holders of at least a majority of
the issued and outstanding shares of the corporation represented at the meeting
either in person or by proxy. For purposes of this Section 3.6, a Director may
be removed for cause if (a) the Director has been convicted of a felony; (b) any
bank regulatory authority having jurisdiction over the corporation requests or
demands the removal; or (c) at least two-thirds (2/3) of the Directors of the
corporation then in office, excluding the Director to be removed, determine that
the Director's conduct has been inimical to the best interests of the
corporation.
3.7 Resignation. Any Director may resign at any time either orally at any
-----------
meeting of the Board of Directors or by so advising the Chairman of the Board of
Directors or the President or by giving written notice to the corporation. A
Director who resigns may postpone the effectiveness of his or her resignation to
a future date or upon the occurrence of a future event specified in a written
tender of resignation. If no time of effectiveness is specified therein, a
resignation shall be effective upon tender. A vacancy shall be deemed to exist
at the time a resignation is tendered, and the Board of Directors or the
shareholders may, then or thereafter, elect a successor to take office when the
resignation by its terms becomes effective.
3.8 Compensation. Directors may be allowed such compensation for their
------------
services as Directors as may from time to time be fixed by resolution of the
Board of Directors.
3.9 Honorary and Advisory Directors. When a Director of the corporation
-------------------------------
retires under the retirement policies of the corporation as established from
time to time by the Board of Directors, such Director automatically shall become
an Honorary Director of the corporation following his or her retirement. The
Board of Directors of the corporation also may appoint any individual an
Honorary Director, Director Emeritus, or member of any advisory board
established by the Board of Directors. Any individual automatically becoming an
Honorary Director or appointed an Honorary Director, Director Emeritus, or
member of an advisory board as provided by this Section 3.9 may be compensated
as provided in Section 3.8, but such individual may not vote at any meeting of
the Board of Directors or be counted in determining a quorum as provided in
Section 5.5 and shall not have any responsibility or be subject to any liability
imposed upon a Director, or otherwise be deemed a Director.
ARTICLE FOUR
COMMITTEES
4.1 Executive Committee.
-------------------
(a) The Board of Directors may, by resolution adopted by a majority of
the entire Board of Directors, designate an Executive Committee consisting of
one or more Directors. Each Executive Committee member shall hold office until
the first meeting of the Board of Directors after the annual meeting of
shareholders and until the member's successor is
-5-
<PAGE>
elected and qualified, or until the member's death, resignation or removal, or
until the member shall cease to be a Director.
(b) During the intervals between the meetings of the Board of
Directors, the Executive Committee may exercise all the authority of the Board
of Directors; provided, however, that the Executive Committee shall not have the
power to amend or repeal any resolution of the Board of Directors that by its
terms shall not be subject to amendment or repeal by the Executive Committee,
and the Executive Committee shall not have the authority of the Board of
Directors in reference to (i) the amendment of the Articles of Incorporation or
bylaws of the corporation; (ii) the adoption of a plan of merger or
consolidation; (iii) the sale, lease, exchange or other disposition of all or
substantially all the property and assets of the corporation; or (iv) a
voluntary dissolution of the corporation or the revocation of any such voluntary
dissolution.
(c) The Executive Committee shall meet from time to time on call of
the Chairman of the Board of Directors or the President or of any two or more
members of the Executive Committee. Meetings of the Executive Committee may be
held at such place or places, within or without the State of Georgia, as the
Executive Committee shall determine or as may be specified or fixed in the
respective notices or waivers of such meetings. The Executive Committee may fix
its own rules of procedure, including provision for notice of its meetings. It
shall keep a record of its proceedings and shall report these proceedings to the
Board of Directors at the meeting thereof held next after they have been taken,
and all such proceedings shall be subject to revision or alteration by the Board
of Directors except to the extent that action shall have been taken pursuant to
or in reliance upon such proceedings prior to any such revision or alteration.
(d) The Executive Committee shall act by majority vote of its members;
provided, however, that contracts or transactions of and by the corporation in
which officers or Directors of the corporation are interested shall require the
affirmative vote of a majority of the disinterested members of the Executive
Committee at a meeting of the Executive Committee at which the material facts as
to the interest and as to the contract or transaction are disclosed or known to
the members of the Executive Committee prior to the vote.
(e) Members of the Executive Committee may participate in committee
proceedings by means of conference telephone or similar communications equipment
by means of which all persons participating in the proceedings can hear each
other, and such participation shall constitute presence in person at such
proceedings.
(f) The Board of Directors, by resolution adopted in accordance with
paragraph (a) of this section, may designate one or more Directors as alternate
members of the Executive Committee who may act in the place and stead of any
absent member or members at any meeting of said committee.
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<PAGE>
4.2 Other Committees. The Board of Directors, by resolution adopted by a
----------------
majority of the entire Board of Directors, may designate one or more additional
committees, each committee to consist of one or more of the Directors of the
corporation, which shall have such name or names and shall have and may exercise
such powers of the Board of Directors, except the powers denied to the Executive
Committee, as may be determined from time to time by the Board of Directors.
Such committees shall provide for their own rules of procedure, subject to the
same restrictions thereon as provided above for the Executive Committee.
4.3 Removal. The Board of Directors shall have power at any time to
-------
remove any member of any committee, with or without cause, and to fill vacancies
in and to dissolve any such committee.
ARTICLE FIVE
MEETINGS OF THE BOARD OF DIRECTORS
5.1 Time and Place. Meetings of the Board of Directors may be held at any
--------------
place either within or without the State of Georgia.
5.2 Regular Meetings. Regular meetings of the Board of Directors may be
----------------
held without notice at such time and place, within or without the State of
Georgia, as shall be determined by the Board of Directors from time to time.
5.3 Special Meetings. Special meetings of the Board of Directors may be
----------------
called by the Chairman of the Board of Directors or the President on not less
than one day's notice by mail, telegram, cablegram, personal delivery or
telephone to each Director and shall be called by the Chairman of the Board of
Directors or the President in like manner and on like notice on the written
request of any two or more Directors. Any such special meeting shall be held at
such time and place, within or without the State of Georgia, as shall be stated
in the notice of the meeting.
5.4 Content and Waiver of Notice. No notice of any meeting of the Board
----------------------------
of Directors need state the purposes thereof, except as may be otherwise
provided in these bylaws. Notice of any meeting may be waived by an instrument
in writing executed before or after the meeting. Attendance in person at any
such meeting shall constitute a waiver of notice thereof unless the Director at
the beginning of the meeting (or promptly upon his or her arrival) objects to
holding the meeting or transacting business at the meeting and does not
thereafter vote for or assent to action taken at the meeting.
5.5 Quorum; Participation by Telephone. At all meetings of the Board of
----------------------------------
Directors, the presence of a majority of the authorized number of Directors
shall be necessary and sufficient to constitute a quorum for the transaction of
business. Directors may participate in any meeting by means of conference
telephone or similar communications equipment by means of which all
-7-
<PAGE>
persons participating in the meeting can hear each other, and participation in a
meeting by means of such communications equipment shall constitute the presence
in person at such meeting. Except as may be otherwise specifically provided by
law, the Articles of Incorporation or these bylaws, all resolutions adopted and
all business transacted by the Board of Directors shall require the affirmative
vote of a majority of the Directors present at the meeting. In the absence of a
quorum, a majority of the Directors present at any meeting may adjourn the
meeting from time to time until a quorum is present. Notice of any adjourned
meeting need only be given by announcement at the meeting at which the
adjournment is taken.
5.6 Action in Lieu of Meeting. Any action required or permitted to be
-------------------------
taken at any meeting of the Board of Directors or of any committee thereof may
be taken without a meeting if a written consent thereto is signed by all members
of the Board of Directors or of such committee, as the case may be, and such
written consent is filed with the minutes of the proceedings of the Board of
Directors and upon compliance with any further requirements of law pertaining to
such consents.
5.7 Interested Directors and Officers. An interested Director or officer
---------------------------------
is one who is a party to a contract or transaction with the corporation or who
is an officer or Director of, or has a financial interest in, another
corporation, partnership or association which is a party to a contract or
transaction with the corporation. Contracts and transactions between the
corporation and one or more interested Directors or officers shall not be void
or voidable solely because of the involvement or vote of such interested persons
as long as (a) the contract or transaction is approved in good faith by the
Board of Directors or appropriate committee by the affirmative vote of a
majority of disinterested Directors, even if the disinterested Directors be less
than a quorum, at a meeting of the Board of Directors or committee at which the
material facts as to the interested person or persons and the contract or
transaction are disclosed or known to the Board of Directors or committee prior
to the vote; or (b) the contract or transaction is approved in good faith by the
shareholders after the material facts as to the interested person or persons and
the contract or transaction have been disclosed to them; or (c) the contract or
transaction is fair as to the corporation as of the time it is authorized,
approved or ratified by the Board of Directors, committee or shareholders.
Interested Directors may be counted in determining the presence of a quorum at a
meeting of the Board of Directors or committee which authorizes the contract or
transaction.
ARTICLE SIX
OFFICERS, AGENTS AND EMPLOYEES
6.1 General Provisions. The officers of the corporation shall be a
------------------
President and a Secretary, and may include a Treasurer, Chairman of the Board of
Directors, one or more Vice Presidents, one or more Assistant Secretaries, and
one or more Assistant Treasurers. The officers shall be elected by the Board of
Directors at the first meeting of the Board of Directors after the annual
meeting of the shareholders in each year or shall be appointed as provided in
-8-
<PAGE>
these bylaws. The Board of Directors may elect other officers, agents and
employees, who shall have such authority and perform such duties as may be
prescribed by the Board of Directors. All officers shall hold office until the
meeting of the Board of Directors following the next annual meeting of the
shareholders after their election or appointment and until their successors
shall have been elected or appointed and shall have qualified. Any two or more
offices may be held by the same person. Any officer, agent or employee of the
corporation may be removed by the Board of Directors with or without cause.
Removal without cause shall be without prejudice to such person's contract
rights, if any, but the election or appointment of any person as an officer,
agent or employee of the corporation shall not of itself create contract rights.
The compensation of officers, agents and employees elected by the Board of
Directors shall be fixed by the Board of Directors or by a committee thereof,
and this power may also be delegated to any officer, agent or employee as to
persons under his or her direction or control. The Board of Directors may
require any officer, agent or employee to give security for the faithful
performance of his or her duties.
6.2 Powers and Duties of the Chairman of the Board of Directors and the
-------------------------------------------------------------------
President. The powers and duties of the Chairman of the Board of Directors and
- ---------
the President, subject to the supervision and control of the Board of Directors,
shall be those usually appertaining to their respective offices and whatever
other powers and duties are prescribed by these bylaws or by the Board of
Directors.
(a) The Chairman of the Board of Directors shall preside at all
----------------------------------
meetings of the Board of Directors and at all meetings of the shareholders. The
Chairman of the Board shall perform such other duties as the Board of Directors
may from time to time direct.
(b) The President shall, unless otherwise provided by the Board of
---------
Directors, be the chief executive officer of the corporation. The President
shall have general charge of the business and affairs of the corporation and
shall keep the Board of Directors fully advised. The President shall employ and
discharge employees and agents of the corporation, except such as shall be
elected by the Board of Directors, and he or she may delegate these powers. The
President shall have such powers and perform such duties as generally pertain to
the office of the President, as well as such further powers and duties as may be
prescribed by the Board of Directors. The President may vote the shares or
other securities of any other domestic or foreign corporation of any type or
kind which may at any time be owned by the corporation, may execute any
shareholders' or other consents in respect thereof and may in his or her
discretion delegate such powers by executing proxies, or otherwise, on behalf of
the corporation. The Board of Directors, by resolution from time to time, may
confer like powers upon any other person or persons.
6.3 Powers and Duties of Vice Presidents. Each Vice President shall have
------------------------------------
such powers and perform such duties as the Board of Directors or the President
may prescribe and shall perform such other duties as may be prescribed by these
bylaws. In the absence or inability to act of the President, unless the Board
of Directors shall otherwise provide, the Vice President
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<PAGE>
who has served in that capacity for the longest time and who shall be present
and able to act, shall perform all duties and may exercise any of the powers of
the President. The performance of any such duty by a Vice President shall be
conclusive evidence of his or her power to act.
6.4 Powers and Duties of the Secretary. The Secretary shall have charge
----------------------------------
of the minutes of all proceedings of the shareholders and of the Board of
Directors and shall keep the minutes of all their meetings at which he or she is
present. Except as otherwise provided by these bylaws, the Secretary shall
attend to the giving of all notices to shareholders and Directors. He or she
shall have charge of the seal of the corporation, shall attend to its use on all
documents the execution of which on behalf of the corporation under its seal is
duly authorized and shall attest the same by his or her signature whenever
required. The Secretary shall have charge of the record of shareholders of the
corporation, of all written requests by shareholders that notices be mailed to
them at an address other than their addresses on the record of shareholders, and
of such other books and papers as the Board of Directors may direct. Subject to
the control of the Board of Directors, the Secretary shall have all such powers
and duties as generally are incident to the position of Secretary or as may be
assigned to the Secretary by the President or the Board of Directors.
6.5 Powers and Duties of the Treasurer. The Treasurer shall have charge
----------------------------------
of all funds and securities of the corporation, shall endorse the same for
deposit or collection when necessary and deposit the same to the credit of the
corporation in such banks or depositaries as the Board of Directors may
authorize. The Treasurer may endorse all commercial documents requiring
endorsements for or on behalf of the corporation and may sign all receipts and
all commercial documents requiring endorsements for or on behalf of the
corporation and may sign all receipts and vouchers for payments made to the
corporation. The Treasurer shall have all such powers and duties as generally
are incident to the position of Treasurer or as may be assigned to the Treasurer
by the President or by the Board of Directors.
6.6 Appointment, Powers and Duties of Assistant Secretaries. Assistant
-------------------------------------------------------
Secretaries may be appointed by the President or elected by the Board of
Directors. In the absence or inability of the Secretary to act, any Assistant
Secretary may perform all the duties and exercise all the powers of the
Secretary. The performance of any such duty shall be conclusive evidence of the
Assistant Secretary's power to act. An Assistant Secretary shall also perform
such other duties as the Secretary or the Board of Directors may assign to him
or her.
6.7 Appointment, Powers and Duties of Assistant Treasurers. Assistant
------------------------------------------------------
Treasurers may be appointed by the President or elected by the Board of
Directors. In the absence or inability of the Treasurer to act, an Assistant
Treasurer may perform all the duties and exercise all the powers of the
Treasurer. The performance of any such duty shall be conclusive evidence of the
Assistant Treasurer's power to act. An Assistant Treasurer shall also perform
such other duties as the Treasurer or the Board of Directors may assign to him
or her.
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6.8 Delegation of Duties. In 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 (or in the case of Assistant Secretaries or
Assistant Treasurers only, the President) may confer for the time being the
powers and duties, or any of them, of such officer upon any other officer or
elect or appoint any new officer to fill a vacancy created by death,
resignation, retirement or termination of any officer. In such latter event
such new officer shall serve until the next annual election of officers.
ARTICLE SEVEN
CAPITAL STOCK
7.1 Certificates.
------------
(a) The interest of each shareholder shall be evidenced by a
certificate or certificates representing shares of the corporation which shall
be in such form as the Board of Directors may from time to time adopt and shall
be numbered and shall be entered in the books of the corporation as they are
issued. Each certificate representing shares shall set forth upon the face
thereof the following:
(i) the name of this corporation;
(ii) that the corporation is organized under the laws of the
State of Georgia;
(iii) the name or names of the person or persons to whom the
certificate is issued;
(iv) the number and class of shares, and the designation of the
series, if any, which the certificate represents; and
(v) if any shares represented by the certificate are nonvoting
shares, a statement or notation to that effect; and, if the shares represented
by the certificate are subordinate to shares of any other class or series with
respect to dividends or amounts payable on liquidation, the certificate shall
further set forth on either the face or back thereof a clear and concise
statement to that effect.
(b) Each certificate shall be signed by the President or a Vice
President and the Secretary or an Assistant Secretary and may be sealed with the
seal of the corporation or a facsimile thereof. If a certificate is
countersigned by a transfer agent or registered by a registrar, other than the
corporation itself or an employee of the corporation, the signature of any such
officer of the corporation may be a facsimile. In case any officer or officers
who shall have signed, or whose facsimile signature or signatures shall have
been used on, any such certificate
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<PAGE>
or certificates shall cease to be such officer or officers of the corporation,
whether because of death, resignation or otherwise, before such certificate or
certificates shall have been delivered by the corporation, such certificate or
certificates may nevertheless be delivered as though the person or persons who
signed such certificate or certificates or whose facsimile signatures shall have
been used thereon had not ceased to be such officer or officers.
7.2 Shareholder List. The corporation shall keep or cause to be kept a
----------------
record of the shareholders of the corporation which readily shows, in
alphabetical order or by alphabetical index, and by classes or series of stock,
if any, the names of the shareholders entitled to vote, with the address of and
the number of shares held by each. Said record shall be presented and kept open
at all meetings of the shareholders.
7.3 Transfer of Shares. Transfers of stock shall be made on the books of
------------------
the corporation only by the person named in the certificate, or by power of
attorney lawfully constituted in writing, and upon surrender of the certificate,
or in the case of a certificate alleged to have been lost, stolen or destroyed,
upon compliance with the provisions of Section 7.7 of these bylaws.
7.4 Record Dates. For the purpose of determining shareholders entitled to
------------
notice of or to vote at any meeting of shareholders or any adjournment thereof,
or entitled to receive payment of any dividend, or in order to make a
determination of shareholders for any other proper purpose, the Board of
Directors may fix in advance a date as the record date for any such
determination of shareholders, such date to be not more than seventy days and,
in case of a meeting of shareholders, not less than ten days, prior to the date
on which the particular action requiring such determination of shareholders is
to be taken.
7.5 Registered Owner. The corporation shall be entitled to treat the
----------------
holder of record of any share of stock of the corporation as the person entitled
to vote such share, to receive any dividend or other distribution with respect
to such share, and for all other purposes and accordingly shall not be bound to
recognize any equitable or other claim or interest in such share on the part of
any other person, whether or not it shall have express or other notice thereof,
except as otherwise provided by law.
7.6 Transfer Agent and Registrars. The Board of Directors may appoint one
-----------------------------
or more transfer agents and one or more registrars and may require each stock
certificate to bear the signature or signatures of a transfer agent or a
registrar or both.
7.7 Lost Certificates. Any person claiming a certificate of stock to be
-----------------
lost, stolen or destroyed shall make an affidavit or affirmation of the fact in
such manner as the Board of Directors may require and, if the Directors so
require, shall give the corporation a bond of indemnity in form and amount and
with one or more sureties satisfactory to the Board of Directors, whereupon an
appropriate new certificate may be issued in lieu of the certificate alleged to
have been lost, stolen or destroyed.
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<PAGE>
7.8 Fractional Shares or Scrip. The corporation may, when and if
--------------------------
authorized so to do by its Board of Directors, issue certificates for fractional
shares or scrip in order to effect share transfers, share distributions or
reclassifications, mergers, consolidations or reorganizations. Holders of
fractional shares shall be entitled, in proportion to their fractional holdings,
to exercise voting rights, receive dividends and participate in any of the
assets of the corporation in the event of liquidation. Holders of scrip shall
not, unless expressly authorized by the Board of Directors, be entitled to
exercise any rights of a shareholder of the corporation, including voting
rights, dividend rights or the right to participate in any assets of the
corporation in the event of liquidation. In lieu of issuing fractional shares
or scrip, the corporation may pay in cash the fair value of fractional interests
as determined by the Board of Directors; and the Board of Directors may adopt
resolutions regarding rights with respect to fractional shares or scrip as it
may deem appropriate, including without limitation the right for persons
entitled to receive fractional shares to sell such fractional shares or purchase
such additional fractional shares as may be needed to acquire one full share, or
sell such fractional shares or scrip for the account of such persons.
ARTICLE EIGHT
BOOKS AND RECORDS; SEAL; ANNUAL STATEMENTS
8.1 Inspection of Books and Records. (a) Any person who shall be the
-------------------------------
holder of record of, or authorized in writing by the holders of record of, at
least two (2%) percent of the outstanding shares of any class or series of the
corporation, upon written demand stating the purpose thereof, shall have the
right to examine in person or by agent or attorney, at any reasonable time or
times, for any proper purpose, the books and records of account, minutes and
record of shareholders and to make extracts therefrom.
(b) A shareholder may inspect and copy the records described in the
immediately preceding paragraph only if (i) his or her demand is made in good
faith and for a proper purpose that is reasonably relevant to his or her
legitimate interest as a shareholder; (ii) the shareholder describes with
reasonable particularity his or her purpose and the records he or she desires to
inspect; (iii) the records are directly connected with the stated purpose; and
(iv) the records are to be used only for that purpose.
(c) If the Secretary or a majority of the corporation's Board of
Directors or Executive Committee members find that the request is proper, the
Secretary shall promptly notify the shareholder of the time and place at which
the inspection may be conducted.
(d) If said request is found by the Secretary, the Board of Directors
or the Executive Committee to be improper, the Secretary shall so notify the
requesting shareholder on or prior to the date on which the shareholder
requested to conduct the inspection. The Secretary shall specify in said notice
the basis for the rejection of the shareholder's request.
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<PAGE>
(e) The Secretary, the Board of Directors and the Executive Committee
shall at all times be entitled to rely on the corporate records in making any
determination hereunder.
8.2 Seal. The corporate seal shall be in such form as the Board of
----
Directors may from time to time determine. In the event it is inconvenient to
use such a seal at any time, the signature of the corporation followed by the
word "Seal" enclosed in parentheses or scroll shall be deemed the seal of the
corporation.
8.3 Annual Statements. Not later than four months after the close of each
-----------------
fiscal year, and in any case prior to the next annual meeting of shareholders,
the corporation shall prepare:
(a) A balance sheet showing in reasonable detail the financial
condition of the corporation as of the close of its fiscal year, and
(b) A profit and loss statement showing the results of its operations
during its fiscal year. Upon written request, the corporation promptly shall
mail to any shareholder of record a copy of its most recent balance sheet and
profit and loss statement.
ARTICLE NINE
INDEMNIFICATION
9.1 Definitions. As used in this Article Nine, the term:
-----------
(a) "Corporation" includes any domestic or foreign predecessor entity
of the corporation in a merger or other transaction in which the predecessor's
existence ceased upon consummation of the transaction.
(b) "Director" means an individual who is or was a Director of the
corporation or an individual who, while a Director of the corporation, is or was
serving at the corporation's request as a director, officer, partner, trustee,
employee, or agent of another foreign or domestic corporation, partnership,
joint venture, trust, employee benefit plan, or other enterprise. A Director is
considered to be serving an employee benefit plan at the corporation's request
if the Director's duties to the corporation also impose duties on, or otherwise
involve services by him or her to the plan or to participants in or
beneficiaries of the plan. Director includes, unless the context requires
otherwise, the estate or personal representative of a Director.
(c) "Expenses" include attorneys' fees.
(d) "Liability" means the obligation to pay a judgment, settlement,
penalty, fine (including an excise tax assessed with respect to an employee
benefit plan), or reasonable expenses incurred with respect to a proceeding.
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<PAGE>
(e) "Party" includes an individual who was, is, or is threatened to be
made a defendant or respondent in a proceeding.
(f) "Proceeding" means any threatened, pending, or completed action,
suit, or other Proceeding, whether civil, criminal, administrative, or
investigative and whether formal or informal.
9.2 Authority to Indemnify.
----------------------
(a) Except as provided in subsections (d) and (e) of this Section 9.2,
the corporation shall indemnify or obligate itself to indemnify an individual
made a party to a proceeding because the individual is or was a Director against
liability incurred in the proceeding if the individual acted in a manner he or
she believed in good faith to be in or not opposed to the best interests of the
corporation and, in the case of any criminal proceeding, the individual had no
reasonable cause to believe his or her conduct was unlawful.
(b) A Director's conduct with respect to an employee benefit plan for
a purpose he or she believed in good faith to be in the interests of the
participants in and beneficiaries of the plan is conduct that satisfies the
requirement of subsection (a) of this Section 9.2.
(c) The termination of a proceeding by judgment, order, settlement, or
conviction, or upon a plea of nolo contendre or its equivalent is not, of
itself, determinative that the Director did not meet the standard of conduct set
forth in subsection (a) of this Section 9.2.
(d) A corporation may not indemnify a Director under this Section 9.2:
(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 the
Director was adjudged liable on the basis that personal benefit was
improperly received by him or her.
(e) Indemnification permitted under this Section 9.2 in connection
with a proceeding by or in the right of the corporation is limited to reasonable
expenses incurred in connection with the proceeding.
9.3 Mandatory Indemnification. To the extent that a Director has been
-------------------------
successful, on the merits or otherwise, in the defense of any proceeding to
which he or she was a party, or in defense of any claim, issue, or matter
therein, because he or she is or was a Director of the corporation, the
corporation shall indemnify the Director against reasonable expenses incurred by
him or her in connection with the proceeding.
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<PAGE>
9.4 Advance for Expenses.
--------------------
(a) The corporation shall pay for or reimburse the reasonable expenses
incurred by a Director who is a party to a proceeding in advance of final
disposition of the proceeding if:
(i) The Director furnishes the corporation with a written
affirmation of the Director's good faith belief that he or she has met the
standard of conduct set forth in Section 9.1(a); and
(ii) The Director furnishes the corporation with a written
undertaking, executed personally or on the Director's behalf, to repay any
advances if it is ultimately determined that he or she is not entitled to
indemnification.
(b) The undertaking required by this Section 9.4(a)(ii) must be an
unlimited general obligation of the Director but need not be secured and may be
accepted without reference to financial ability to make repayment.
9.5 Court-Ordered Indemnification and Advances for Expenses. A Director
-------------------------------------------------------
of the corporation who is a party to a proceeding may apply for indemnification
or advances for expenses to the court conducting the proceeding or to another
court of competent jurisdiction.
9.6 Determination of Indemnification.
--------------------------------
(a) The corporation may not indemnify a Director under Section 9.2
unless authorized thereunder and a determination has been made in the specific
case that indemnification of the Director is permissible in the circumstances
because the Director has met the standard of conduct set forth in Section
9.2.(a).
(b) The determination shall be made:
(i) By the Board of Directors by majority vote of a quorum
consisting of Directors not at the time parties to the proceeding;
(ii) If a quorum cannot be obtained under paragraph (b)(i) of
this Section, by majority vote of a committee duly designated by the Board
of Directors (in which designation Directors who are parties may
participate), consisting solely of two or more Directors not at the time
parties to the proceeding;
(iii) By special legal counsel:
(A) Selected by the Board of Directors or its committee
in the manner prescribed in paragraphs (b)(i) or (ii) of this Section;
or
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<PAGE>
(B) If a quorum of the Board of Directors cannot be
obtained under paragraph (b)(i) of this Section and a committee cannot
be designated under paragraph (b)(ii) of this Section, selected by
majority vote of the full Board of Directors (in which selection
Directors who are parties may participate); or
(iv) By the shareholders, but shares owned by or voted under the
control of Directors who are at the time parties to the proceeding may not
be voted on the determination.
9.7 Authorization of Indemnification. Authorization of indemnification or
--------------------------------
an obligation to indemnify and evaluation as the reasonableness of expenses
shall be made in the same manner as the determination that indemnification is
permissible, except that if the determination is made by special legal counsel,
authorization of indemnification and evaluation as to reasonableness of expenses
shall be made by those entitled under Section 9.6(b)(iii) to select counsel.
9.8 Shareholder Approved Indemnification.
------------------------------------
(a) If authorized by the articles of incorporation or a bylaw,
contract, or resolution approved or ratified by the shareholders by a
majority of the votes entitled to be cast, the corporation may indemnify or
obligate itself to indemnify a Director made a party to a proceeding
including a proceeding brought by or in the right of the corporation,
without regard to the limitations in this Article Nine.
(b) The corporation shall not indemnify a Director under this
Section 9.8 for any liability incurred in a proceeding in which the
Director is adjudged liable to the corporation or is subjected to
injunctive relief in favor of the corporation:
(i) For any appropriation, in violation of the Director's
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 Georgia Business Corporation Code dealing with illegal or
unauthorized distibutions of corporate assets, whether as dividends or in
liquidation of the corporation or otherwise; or
(iv) For any transaction from which the Director received an
improper material, tangible benefit.
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<PAGE>
9.9 Indemnification of Officers, Employees, and Agents.
--------------------------------------------------
(a) An officer of the corporation who is not a Director is entitled to
indemnification and advancement of expenses under this Article Nine as if the
officer were a Director.
(b) The corporation may also indemnify and advance expenses to an
employee or agent who is not a Director to the extent, consistent with public
policy, provided by specific action of its Board of Directors or by contract.
9.10 Insurance. The corporation may purchase and maintain insurance on
---------
behalf of an individual who is or was a Director, officer, employee, or agent of
the corporation or who, while a director, officer, employee, or agent of the
corporation, is or was serving at the request of the corporation as a director,
officer, partner, trustee, employee, or agent of another foreign or domestic
corporation, partnership, joint venture, trust, employee benefit plan, or other
enterprise against liability asserted against or incurred by him or her in that
capacity or arising from his or her status as a director, officer, employee, or
agent whether or not the corporation would have power to indemnify him or her
against the same liability under Section 9.2 or Section 9.3.
9.11 Continuation of Expenses. The indemnification and advancement of
------------------------
expenses provided by or granted pursuant to this Article Nine shall continue as
to a person who has ceased to be a Director, trustee, officer, employee, or
agent and shall inure to the benefit of the heirs, executors and administrators
of such a person.
ARTICLE TEN
NOTICES: WAIVERS OF NOTICE
10.1 Notices. Except as otherwise specifically provided in these bylaws,
-------
whenever under the provisions of these bylaws notice is required to be given to
any shareholder, Director or officer, it shall not be construed to mean personal
notice, but such notice may be given by personal notice, by telegram or
cablegram, or by mail by depositing the same in the post office or letter box in
a postage prepaid sealed wrapper, addressed to such shareholder, Director or
officer at such address as appears on the books of the corporation, and such
notice shall be deemed to be given at the time when the same shall be thus sent
or mailed.
10.2 Waivers of Notice. Except as otherwise provided in these bylaws, when
-----------------
any notice is required to be given by law, by the Articles of Incorporation or
by these bylaws, a written waiver thereof, signed by the person entitled to
notice, whether before or after the time stated therein, shall be deemed
equivalent to notice. In the case of a shareholder, such waiver of notice may
be signed by the shareholder's attorney or proxy duly appointed in writing.
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ARTICLE ELEVEN
EMERGENCY POWERS
11.1 Bylaws. The Board of Directors may adopt emergency bylaws,
------
subject to repeal or change by action of the shareholders, which shall,
notwithstanding any provision of law, the Articles of Incorporation or these
Bylaws, be operative during any emergency in the conduct of the business of the
corporation resulting from an attack on the United States or on a locality in
which the corporation conducts its business or customarily holds meeting of its
Board of Directors or its shareholders, or during any nuclear or atomic
disaster, or during the existence of any catastrophe, or other similar emergency
condition, as a result of which a quorum of the Board of Directors or a standing
committee thereof cannot readily be convened for action. The emergency bylaws
may make any provision that may be practical and necessary for the circumstances
of the emergency.
11.2 Lines of Succession. The Board of Directors, either before or
-------------------
during any such emergency, may provide, and from time to time modify, lines of
succession in the event that during such an emergency any or all officers or
agents of the corporation shall for any reason be rendered incapable of
discharging their duties.
11.3 Head Office. The Board of Directors, either before or during
-----------
any such emergency, may (effective during the emergency) change the head office
or designate several alternative head offices or regional offices, or authorize
the officers to do so.
11.4 Period of Effectiveness. To the extent not inconsistent with
-----------------------
any emergency bylaws so adopted, these bylaws shall remain in effect during any
such emergency and upon its termination, the emergency bylaws shall cease to be
operative.
11.5 Notices. Unless otherwise provided in emergency bylaws, notice
-------
of any meeting of the Board of Directors during any such emergency may be given
only to such of the Directors as it may be feasible to reach at the time, and by
such means as may be feasible at the time, including publication, radio or
television.
11.6 Officers as Directors Pro Tempore. To the extent required to
---------------------------------
constitute a quorum at any meeting of the Board of Directors during any such
emergency, the officers of the corporation who are present shall, unless
otherwise provided in emergency bylaws, be deemed, in order of rank and within
the same rank in order of seniority, Directors for such meeting.
11.7 Liability of Officers, Directors and Agents. No officer,
-------------------------------------------
Director, agent or employee acting in accordance with any emergency bylaw shall
be liable except for willful misconduct. No officer, Director, agent or
employee shall be liable for any action taken by him or her in good faith in
such an emergency in furtherance of the ordinary business affairs of the
corporation even though not authorized by the bylaws then in effect.
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ARTICLE TWELVE
CHECKS, NOTES, DRAFTS, ETC.
Checks, notes, drafts, acceptances, bills of exchange and other orders
or obligations for the payment of money shall be signed by such officer or
officers or person or persons as the Board of Directors by resolution shall from
time to time designate.
ARTICLE THIRTEEN
AMENDMENTS
The bylaws of the corporation may be altered or amended and new bylaws
may be adopted by the shareholders at any annual or special meeting of the
shareholders or by the Board of Directors at any regular or special meeting of
the Board of Directors; provided, however, that, if such action is to be taken
at a meeting of the shareholders, notice of the general nature of the proposed
change in the bylaws shall be given in the notice of meeting. The shareholders
may provide by resolution that any bylaw provision repealed, amended, adopted,
or altered by them may not be repealed, amended, adopted or altered by the Board
of Directors. Except as otherwise provided in the Articles of Incorporation,
action by the shareholders with respect to bylaws shall be taken by an
affirmative vote of a majority of all shares entitled to elect Directors, and
action by the Board of Directors with respect to bylaws shall be taken by an
affirmative vote of a majority of all Directors then holding office.
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EXHIBIT 5.1
LEGAL OPINION OF POWELL, GOLDSTEIN, FRAZER & MURPHY
<PAGE>
POWELL, GOLDSTEIN, FRAZER & MURPHY
191 Peachtree Street, N.E.
Suite 1600
Atlanta, Georgia 30303
October 17, 1996
Decatur First Bank Group, Inc.
755 Commerce Drive
Suite 516
Decatur, Georgia 30330
Ladies and Gentlemen:
We are acting as special counsel to Decatur First Bank Group, Inc., a
Georgia corporation (the "Company"), located in Decatur, Georgia. In such
capacity, we have supervised certain proceedings taken by the Company in
connection with the registration under the Securities Act of 1933, as amended,
and the rules and regulations of the Securities and Exchange Commission
promulgated thereunder (collectively, the "Act"), of the offer and sale of a
minimum of 710,000 shares and a maximum of 1,200,000 shares (the "Shares") of
common stock, $5.00 par value, of the Company.
We have examined originals or copies, certified or otherwise
identified to our satisfaction, of the documents and corporate records relating
to the authorization, issuance and sale of the Shares and have made such other
investigation as we have deemed appropriate and relevant in order to furnish
the opinion set forth below.
This opinion letter is limited by, and is in accordance with, the
January 1, 1992 edition of the Interpretive Standards applicable to Legal
Opinions to Third Parties in Corporate Transactions adopted by the Legal
Opinion Committee of the Corporate and Banking Law Section of the State Bar of
Georgia, which are incorporated in the opinion letter by this reference.
Capitalized terms used in this opinion letter and not otherwise defined herein
shall have the meanings assigned to them in the Interpretive Standards.
In our examination we have assumed the genuineness of all signatures,
the authenticity of all documents submitted to us as original documents, and
the conformity to original documents of all documents submitted to us as
certified or photostatic copies. As to questions of fact material and relevant
to our opinion, where such facts were not independently verified by us, we have
relied, to the extent we deemed such reliance proper, upon certificates or
representations of officers and representatives of the Company and appropriate
federal, state and local officials.
<PAGE>
Decatur First Bank Group, Inc.
October 17, 1995
Page 2
Based upon the foregoing, we are of the opinion that the Shares have
been duly authorized and when sold, will be validly issued, fully paid and
nonassessable.
We hereby consent to the reference to our firm under the heading
"Legal Matters" in the Registration Statement on Form SB-2 filed with the
Securities and Exchange Commission by the Company in connection with the offer
and sale of the Shares.
This letter is furnished solely to you and may not be relied upon by
any third party.
Very truly yours,
/s/ Powell, Goldstein, Frazer & Murphy
POWELL, GOLDSTEIN, FRAZER & MURPHY
<PAGE>
EXHIBIT 10.1
AGREEMENT TO LEASE DATED AUGUST 20, 1996,
BETWEEN DANIEL B. PATTILLO
AND DECATUR FIRST BANK GROUP, INC.
<PAGE>
BRIGMAN & ASSOCIATES, INC.
Brokers
215 CHURCH STREET BUILDING
SUITE #107
DECATUR, GEORGIA 30030
----------------
404-378-3685
August 20, 1996
AGREEMENT TO LEASE
------------------
Daniel B. Pattillo does hereby agree to lease 1120 Commerce Drive, Decatur Ga.
legal attached, being also approximately 5400 sq. ft. building, to Decatur
First Bank Group, Inc. under the terms and conditions listed below.
1.
LEASE TERM
----------
Lease becomes effective 06-01-97 and expires 06-01-2002, said lease is subject
to obtaining necessary approvals to open the bank proposed by DFBG, Inc.
2.
SUBLET
------
Pattillo agrees to allow DFBG to sublet from Atlanta Gas Light until 06-01-97.
3.
OPTION
------
Pattillo offers DFBG an option to purchase said building for $500,000. Sale
must include an exchange of similar type property so as to facilitate Pattillo
not absorbing any capital tax liability.
4.
AGENCY
------
Brigman & Associates, Inc. represents Dan Pattillo in this transaction and
there are no other agents or broker representatives for either lessee or
lessor.
5.
RENTAL
------
Building having approximately 5400 sq. ft. said rate shall be $10.00 per sq.
ft. over the 5-year term making a monthly rental of $4,500 per month. Said
rate is to be paid to Brigman & Associates, P.0. Box 33086, Decatur, Ga. 30033.
<PAGE>
6.
SECURITY DEPOSIT
----------------
Landlord requires no security deposit. Landlord requires tenant to pay 1st and
last months rent in advance.
7.
TAX STOP
--------
Tax base year will be 1996 taxes. Any increase over the lease term from the
1996 amount shall be paid as additional rental by DFBG.
----
8.
REPAIRS
-------
Dan Pattillo shall be responsible for roof and exterior walls only. All other
repairs and maintenance of structure or systems to be done by lessee.
9.
INSURANCE
---------
Lessee shall maintain minimum of $2,000,000 public liability insurance and
indemnify and hold harmless landlord from any and all liability with respect to
the lessee's tenancy during entire lease period.
10.
STIPULATION
-----------
Lessee has the right to cancel said lease agreement until 3-1-97. If Lessee
cancels lease they agree to forfeit 1st and last months rent, but if not
cancelled effective 3-1-97, said lease becomes binding on both parties.
/s/ Daniel B. Pattillo
-----------------------------------
Daniel B. Pattillo
Lessee
Decatur First Bank Group
/s/ Judy B. Turner
--------------------------------------------
Accepted
-2-
<PAGE>
EXHIBIT 10.2
AGREEMENT TO SUBLEASE, DATED SEPTEMBER 9, 1996,
BETWEEN ATLANTA GAS LIGHT COMPANY
AND DECATUR FIRST BANK GROUP, INC.
<PAGE>
STATE OF GEORGIA
COUNTY OF DEKALB
AGREEMENT OF SUB-LEASE
----------------------
THIS AGREEMENT OF SUB-LEASE, made and entered into this 9th day of
---------
Sept. , 1996 by and between ATLANTA GAS LIGHT COMPANY, a Georgia Corporation,
--------
hereinafter sometimes referred to as Sub-Lessor, which expression or
substituted expression shall include its agents, employees, successors, and
assigns, and Decatur First Bank Group, Inc., a Georgia Corporation, hereinafter
sometimes referred to as the Sub-Lessee, which expression or a substituted
expression shall include its successors and assigns;
WITNESSETH THAT:
---------------
1.
PREMISES
--------
Sub-Lessor leases to Sub-Lessee and Sub-Lessee hires from said Sub-Lessor
the following described property, hereinafter referred to as the "Premises", to
wit:
(a) All those tracts or parcels of land, including all improvements
thereon, lying and being in the City of Decatur, State of
Georgia, being in Land Lot 246 of the 15th District of Dekalb
County and being more particularly described in Exhibit "A"
attached hereto and by reference included herein.
2.
TERM
----
TO HAVE AND TO HOLD the premises with all the rights, privileges, easements
and appurtenances thereto for a term of Nine (9) months beginning on the 1st
day of September, 1996 and ending on May 31, 1997, unless terminated as
hereinafter provided.
3.
RENT
----
The Sub-Lessee hereby covenants, conditions and agrees to pay the Sub-
Lessor base rent in the sum of:
$3,200.00 per month, September 1, 1996 through May 31, 1997
<PAGE>
4.
ADDITIONAL RENT
---------------
Intentionally Deleted
5.
UTILITY BILLS
-------------
Sub-Lessee hereby covenants and agrees to pay and be liable for all
charges and taxes incurred for light, heat, power, water, sanitary service and
refuse pickup, and all other utility charges arising out of the use of the
Premises during the existence of this Sub-Lease.
6.
SECURITY DEPOSIT
----------------
Security deposit shall be an amount equal to Three Thousand Two
Hundred Dollars ($3,200.00) payable prior to the date of occupancy. The
security deposit shall be refunded to Sub-Lessee within thirty (30) days
following the termination hereof after first deducting the costs for repairs
required by Lessor, if any, caused by Sub-Lessee.
7.
USE OF PREMISES
---------------
The Sub-Lessor hereby covenants and agrees that during the existence
of this Lease, the Premises may be used and occupied by the Sub-Lessee for use
as a General Banking Facility.
8.
REPAIR
------
Except for the repair and maintenance of the chiller plant, including
chiller, cooling tower, pump and piping, Sub-Lessee shall be responsible for
all interior maintenance and repairs. Sub-Lessee, at its own cost and expense,
shall perform such maintenance, repairs and replacements as are required to
keep the Premises in good order in accordance with the obligations of the Sub-
Lessor under the Prime Lease, as defined in Paragraph 23 below. Provided
however, Sub-Lessor shall, prior to September 1, 1996, inspect the heating
venting and air conditioning system (HVAC) and make any repairs required.
9.
ALTERATION OF PREMISES
----------------------
Sub-Lessee, only after having Lessor's written approval, shall have
the right and privilege to make and perform any changes and alterations on the
Premises which do not damage the
<PAGE>
foundations and load bearing walls of the Premises. Sub-Lessor hereby agrees
that Sub-Lessee shall not be required to restore the changes on the Premises to
their original condition or plan at any time or instance during the existence
of this Sub-Lease or upon termination thereof unless said changes are required
by Lessor. Sub-Lessee shall provide Sub-Lessor with a copy of all
correspondence between Sub-Lessee and Lessor including drawings of all changes
made to the Premises.
10.
CONDEMNATION
------------
The parties hereby covenant and agree that if the whole of the
Premises, or such portion thereof as will make the 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, this Sub-Lease shall
terminate from the time when possession thereof is abandoned by the Sub-Lessee
after being taken by such authority and rental shall be accounted for as
between the parties as of that date. It is provided, however, that this Sub-
Lease shall not terminate if only a portion of the Premises is so taken and
Sub-Lessee elects to continue in possession of the remainder of the Premises
under the terms of this Sub-Lease. In such event, the rent herein reserved
shall be adjusted in such fair proportion as said partial taking may affect the
use of the Premises by Sub-Lessee.
Should any condemnation result in termination of this Lease under the
terms and conditions above stated, such termination shall be without prejudice
to the rights of either party to recover compensation and damage caused by
condemnation from the condemnor. It is hereby understood and agreed that
neither party shall have any rights in any award made to the other by any
condemning authority.
11.
INDEMNITY
---------
Sub-Lessee agrees to indemnify and save harmless the Sub-Lessor and
the Lessor under the Prime Lease, as described in Paragraph 23 below against
all claims for damages or injury to persons and property, and all expenses
incurred by them, including reasonable attorney's fees, caused by or resulting
from the act or neglect of Sub-Lessee, its agents, employees or invitees, or
arising from the use or occupancy of the Premises by Sub-Lessee, its agents,
employees or invitees. Sub-Lessee shall maintain comprehensive general
liability insurance with limits of at least one million dollars per occurrence.
Such policy shall be provided by an insurer deemed acceptable to Sub-Lessor and
shall name Sub-Lessor as an additional insured. Such policy shall provide a
waiver of subrogation in favor of Sub-Lessor. Prior to commencing the term of
this Sub-Lease and annually thereafter, Sub-Lessee shall provide Sub-Lessor
with a certificate of insurance evidencing such coverage.
<PAGE>
12.
DEFAULTS
--------
It is further covenanted and agreed that in case, at any time, Sub-
Lessee shall default in the payment of any of the rent herein specified upon
the date the same shall become due and payable, and such default shall continue
for a period of ten (10) days after notice in writing of such default to said
Sub-Lessee from SubLessor; or in case of any default occurring in relation to
or in connection with any other of the covenants, duties and obligations
hereunder to be kept and performed by Sub-Lessee, and such default shall
continue for thirty (30) days after similar written notice to Sub-Lessee; or if
Sub-Lessee causes any lien to be placed against the Premises and does not cure
the same within thirty (30) days after notice from Sub-Lessor to Sub-Lessee
demanding cure; then, and in any of said events, Sub-Lessor at its option may
terminate this Sub-Lease by written notice to Sub-Lessee, whereupon this Sub-
Lease shall end, and Sub-Lessor may enter into and take possession of said
demised Premises. In the event of default of payment of monthly rent as herein
described, and in addition to the foregoing, if a rental payment is not
received within ten days after the due date, on the 11th day interest will
begin to accrue on the unpaid balance on a per diem basis at the lesser of the
rate of either 18 percent per annum until paid, or at the highest legal rate of
interest.
13.
ASSIGNMENT AND SUBLETTING
-------------------------
Sub-Lessee may assign this Sub-Lease, or sublet Premises or any part
thereof, only after having first obtained the written consent of Sub-Lessor and
Lessor (Daniel B. Pattillo), provided, that such consent will not be
unreasonably withheld. It is agreed and understood, however, that no
assignment or sub-lease shall relieve Sub-Lessee of any financial liability or
other obligation hereunder. Sub-Lessee agrees not to assign or sub-lease
Premises to anyone who will create a nuisance or trespass, nor use the Premises
for any illegal purpose, nor in violation of any valid regulations of any
governmental body, nor in any manner to vitiate the insurance. Sub-Lessee
agrees that any increase in Sub-Lessor's insurance premium caused by occupancy
of any sub-tenant will be paid by Sub-Lessee.
14.
RIGHTS CUMULATIVE
-----------------
All rights, powers and privileges conferred hereunder upon the
parties shall be cumulative but not restrictive to those given by law.
15.
SUBORDINATION
-------------
Sub-Lessee's rights shall be subject to any mortgage or indenture
which may hereafter be placed upon the Premises by Lessor under the Prime Lease
as defined in Paragraph 23 below, and Sub-Lessee agrees to execute and deliver
such documentation as may be required by any
<PAGE>
such mortgage to effect any such subordination within ten (10) days of receipt
of the same. Provided, however, Sub-Lessee's rights under this Sub-Lease shall
not be disturbed by any such subordination as long as Sub-Lessee is in
compliance with the terms of this SubLease.
16.
TIME OF THE ESSENCE
-------------------
Time is of the essence of this Agreement.
17.
WAIVER OF RIGHTS
----------------
No failure of Sub-Lessor to exercise any power given to Sub-Lessor
hereunder, or to insist upon strict compliance by Sub-Lessee with its
obligations hereunder, and no custom or practice of the parties at variance
with the terms hereof shall constitute a waiver of Sub-Lessor's right to demand
exact compliance with the terms hereof.
18.
EXTERIOR SIGNS
--------------
Sub-Lessee shall have the right, with prior written consent from
Lessor, to use the exterior of the building, for the purpose of attaching
thereto or erecting thereon a sign or signs advertising its business, provided
such sign or signs shall not substantially damage the building; provided,
further, that any sign so attached or erected shall be made and maintained in
conformity and compliance with all applicable laws, ordinances and governmental
regulations governing the same, and the Sub-Lessee shall be responsible to Sub-
Lessor for any damage caused by the installation, use, or maintenance of said
signs. Upon the termination of this Lease or upon the removal of such sign or
signs, any defacement or damage to the exterior of the building caused by said
sign or signs shall be repaired promptly by the Sub-Lessee. Sub-Lessee shall
provide Sub-Lessor with a copy of all correspondence between Sub-Lessee and
Lessor including drawings of all changes made to the Premises.
19.
VIEWING PREMISES
----------------
It is agreed and understood that the Sub-Lessor may, at any
reasonable time or times during the existence of this lease, enter to view the
Premises.
20.
INSURANCE
---------
Sub-Lessee will reimburse Lessor under the Prime Lease, as defined in
Paragraph 23 below, for any increase in the insurance premium of Lessor under
Prime Lease caused by the
<PAGE>
occupancy of Sub-Lessee over the amount of Lessor's insurance premium payable
during the base year of 1996. Sub-Lessee shall carry at Sub-Lessee's sole cost
and expense insurance coverage on all equipment, fixtures and appliances of
Sub-Lessee.
21.
SEVERABILITY
------------
If any term, covenant or condition of this Sub-Lease or the
application thereof shall to any extent be invalid or unenforceable, the
remainder of this Sub-Lease shall not be affected thereby, and each term,
covenant or condition of this Sub-Lease shall be valid and enforceable to the
fullest extent permitted by law. This Sub-Lease shall be governed by and
construed in accordance with the laws of the State of Georgia.
22.
NOTICES
-------
Any notice given pursuant to this Sub-Lease Agreement shall be in
writing and sent by certified mail to:
Sub-Lessor: Facilities Manager
Atlanta Gas Light Company
1219 Caroline Street
Atlanta, Georgia 30307
or at such other address as Sub-Lessor may hereafter designate in writing to
Sub-Lessee.
Sub-Lessee: Ms. Judy B. Turner-President
Decatur First Bank Group, Inc.
755 Commerce Drive
Decatur, Georgia 30030
23.
PRIME LEASE
-----------
This Sub-Lease is expressly subject to and inferior to the Prime
Lease, attached hereto as Exhibit "B" and made a part hereof. The provisions
of the Prime Lease pertaining to the Sub-Leased Premises are incorporated by
this reference into this Sub-Lease as fully as if completely restated herein.
Sub-Lessee shall be bound by all of the provisions of the Prime Lease
pertaining to the Sub-Leased Premises and shall perform all of the obligations
and responsibilities that Sub-Lessor undertakes toward Lessor under the Prime
Lease, pertaining to the Sub-Leased Premises, with exception only to the
property taxes and insurance. In the event of any conflict between this Sub-
Lease and the terms of the Prime Lease, the Prime Lease shall control.
<PAGE>
24.
CONTINGENCY
-----------
This Sub-Lease is contingent upon Sub-Lessor obtaining approval from
the Prime Lease Lessor to sub-lease the Premises to Sub-Lessee.
25.
SPECIAL CONSIDERATION
---------------------
Sub-Lessor hereby warrants to Sub-Lessee, provided Sub-Lessee
fulfills all Sub-Lessee obligations herein, Sub-Lessor will not exercise any
renewal rights provided in the Prime Lease.
THIS SUB-LEASE AGREEMENT contains the entire agreement of the parties hereto,
and no representations, inducements, promises or agreements or otherwise,
between the parties, not embodied herein, shall be of any force or effect.
IN WITNESS WHEREOF, the Sub-Lessor has hereunto set its hand and seal, and the
Sub-Lessee has caused these presents to be executed, and its seal hereto
attached, by its proper governing officers thereunto duly authorized, this
instrument being thus signed and sealed by the parties on the day and year
first above written.
SUB-LESSOR:
Signed, sealed and delivered as to
Sub-Lessor in the presence of: ATLANTA GAS LIGHT COMPANY
/s/ BY:/s/ Marion M. Wyatt Jr.
------------------------------- -------------------------------------
Witness
TITLE Vice President Operations Support
------------------------------- ----------------------------------
Witness
SUB-LESSEE:
Signed, sealed and delivered as to
Sub-Lessee in the presence of: DECATUR FIRST BANK GROUP, INC.
/s/ M. Douglas Bennett BY:/s/ Judy B. Turner
------------------------------- -------------------------------------
Witness
/s/ TITLE President
- -------------------------------- -----------------------------------
Witness
<PAGE>
EXHIBIT "A"
All that tract or parcel of land lying and being in Land Lot 246 of the 15th
District of DeKalb County, Georgia and being more particularly described as
follows:
BEGINNING at a point at the intersection of the southwest right of way of
Beaumont Street and the southeastern right of way of Hampton Street; run thence
150.67 feet in a southeastern direction along said southwest right of way of
Beaumont Street to a point, said line having a tangent distance of 150.55 feet
from said point; run thence 27.37 feet along the rights of way of Beaumont
Street and Oliver Street to a point on the western right of way of Oliver
Street, said point being 25.28 feet as measured along a tangent line having an
interior angle of 146 degrees 12'10" with the aforesaid tangent line; run
thence in a southwestern direction following the right of way of Oliver Street
138.08 feet to a point, said point being 137.47 feet from the last point as
measured along a chord line having an interior angle of 150 degrees 10'30" with
the last mentioned tangent line; run thence 4.9 feet in a westerly direction
along a line having an exterior angle of 252 degrees 49'40" with the last
mentioned tangent line to a point; run thence in a southerly direction
following the right of way of Oliver Street 30.12 feet to a point, said point
being 30.11 feet from the last point as measured along a chord line having an
exterior angle of 94 degrees 53'30" with the last line run; thence run in a
westerly direction 3.2 feet along a line following the southern right of way of
Montgomery Street to a point, said line having an exterior angle of 265 degrees
06'30" with the last mentioned chord line; run thence in a southerly direction
190.5 feet along the right of way of Oliver Street along a line having an
exterior angle of 87 degrees 22'20" with the chord line last mentioned to a
point; run thence west 100 feet to a point located 30 feet north of the north
side of an alley; run thence northerly 190.5 feet along a line having an
interior angle of 269 degrees 44'30" with the line last run to a point on the
southern right of way of Montgomery Street, said point being 194.0 feet east
from the present location of Ponce de Leon Place, as measured along Montgomery
Street; run thence 25.2 feet easterly along the southern right of way of
Montgomery Street along a line having an interior angle of 87 degrees 23'30"
with the line last run to a point; run thence 30.0 feet northerly along the
eastern right of way of Hampton Street along a line having an interior angle of
270 degrees 00'00" to a point; run thence 260.0 feet in a northern direction
following the eastern right of way of Hampton Street to the intersection with
the southwestern right of way of Beaumont Street and the point of beginning;
said property being more particularly shown on plat of survey for Callaway
Motors, Inc. by Charles S. Mercer, Jr., dated November 28, 1977, said plat
being made a part hereof by reference.
<PAGE>
EXHIBIT "B"
STATE OF GEORGIA
COUNTY OF DEKALB
IS AGREEMENT OF LEASE, made and entered into this 9th day of
-----------
February , 1982 , by and between DANIEL B. PATTILLO, hereinafter sometimes
--------- ----
referred to as Lessor, which expression or substituted expression shall include
his heirs, executors, administrators, successors and assigns, and ATLANTA GAS
LIGHT COMPANY, a Georgia corporation, hereinafter sometimes referred to as the
Lessee, which expression or a substituted expression shall include its
successors and assigns,
WITNESSETH THAT:
1.
PREMISES
--------
The Lessor, for and in consideration of the rents, covenants conditions,
agreements and understandings hereinafter mentioned reserved and contained, to
be paid, kept and performed by the Lessee, has leased, rented, demised and
granted and by these presents does lease, rent, demise and grant unto the
Lessee, and the Lessee, for and in consideration of the covenants, conditions,
agreements, understandings and option hereinafter mentioned and contained, to
be kept and performed by the Lessor, does hereby agree to lease and take, the
following described property, hereinafter referred to as the "premises," to
wit:
(a) All that tract or parcel of land lying and being in the City of
Decatur and more particularly described in Exhibit "A" attached
hereto and by reference included herein.
(b) A certain building to be completely built, erected and equipped
on said property at the expense of the Lessor and in accordance with
drawings and specifications by William Breen, Architect, dated
October 12, 1981 and entitled "Oliver Building." Such drawings have
been initialed by the parties and by reference are made a part of
this lease.
Said building and improvements shall be completed in all particulars and to
the satisfaction of the Lessee on or before 6-1 , 1982 ,
------------------------ ----
barring delays caused by strikes, Acts of God, governmental restrictions or
regulations, inability to obtain necessary materials, unusual weather
conditions, or other causes beyond Lessor's control. Should completion be so
delayed, the said date of completion shall be extended by any period of
interruption which may be brought about by any of the aforementioned causes.
It is understood that, notwithstanding any other provision of this lease or of
the plans or specifications to the contrary, it is the intention of the parties
only that said construction shall proceed with reasonable dispatch and
expeditiously as possible, and that Lessor will use his best efforts to deliver
possession of the completed premises by said date of 6-1 ,
-------------------------
1982 . In any
------
<PAGE>
event, however, it is understood and agreed that said building and all
improvements will be completed without undue delay and within a reasonable
time. In addition to the requirements of plans and specifications, it is
further agreed that said building and improvements shall conform to the
building laws and other applicable laws, ordinances, rules and regulations of
the City of Decatur and of all other public authorities having jurisdiction.
2.
TERM
----
TO HAVE AND TO HOLD the premises with all the rights, privileges, easements
and appurtenances thereunto belonging for a term beginning on the first day of
the calendar month following completion of said building and improvements and
acceptance there by Lessee for its use and occupancy, and extending for a term
of fifteen (15) years thereafter, unless further extended or otherwise
terminated as hereinafter provided. It is agreed that any occupancy by Lessee
prior to full completion shall not constitute acceptance and shall not be a
waiver of Lessee's right to require completion of the building and all
improvements in accordance with the approved plans and specifications. Upon
final acceptance by Lessee, a written memorandum of agreement shall be entered
into by the parties, acknowledging satisfactory completion and acceptance of
the premises and specifying the exact commencement and termination dates of the
term of this lease. In the event Lessee occupies the premises prior to the
actual commencement date of the lease, rental shall begin on the date of
occupancy and the monthly rental shall be prorated in proportion to the number
of days the building is occupied prior to the first day of the following month
at which time the lease term shall begin.
3.
RENTAL
------
The Lessee hereby covenants, conditions, and agrees to pay the Lessor as
rental during the first year of the initial fifteen (15) year term a monthly
rental of Four Thousand Five Hundred Forty Dollars ($4,540.00). Lessee agrees
to pay a monthly rental during each of the remaining fourteen (14) years of
this lease and any extension thereof an amount reflecting a five (5) percent
increase annually. A more complete schedule of rental payments is attached
hereto as Exhibit "B". Rental payments shall be made in advance on or before
the first day of each and every month during the existence of this lease and
any extension thereof.
4.
USE OF PREMISES
---------------
The Lessor hereby covenants and agrees that during the existence of this
lease the premises may be used and occupied by the Lessee for any and all
lawful purposes required in the operation of Lessee's business and not
inconsistent with the character of the demised premises.
5.
GOVERNMENTAL REQUIREMENTS AND REPAIRS
-------------------------------------
The Lessor hereby covenants, conditions, and agrees to fully and completely
comply at his expense with all governmental requirements, now in effect or
hereinafter enacted, pertaining to or affecting the premises except that, after
completion of the initial construction and
<PAGE>
improvements herein agreed to, any such requirements made necessary by reason
of Lessee's use and occupancy of said premises shall be fully complied with by
Lessee at its expense.
Lessor agrees to make all necessary structural repairs to the said
premises, including repairs to the roof, foundation, and exterior walls. All
other repairs shall be assumed by Lessee, and Lessee shall, at its own expense,
keep and maintain the premises and its appurtenances and every part thereof in
good order and repair except those portions to be repaired by Lessor as above
provided. Lessee specifically agrees to keep all systems pertaining to water,
sewer, electrical, heating, ventilation, air conditioning and lighting in good
order and repair. Lessee shall further be responsible for any and all damage
done to premises, or any part thereof, caused by negligent or willful act of
Lessee, its agents, or employees, and in such case shall repair the same
irrespective of whether such repairs would otherwise be the duty of Lessor. It
is expressly understood that Lessor gives to Lessee exclusive control and
possession of the leased premises, and Lessor shall be under no duty or
obligation to inspect said premises. It shall be the duty of Lessee to report
promptly in writing to Lessor any structural defect known to it and any repair
required to be made by Lessor hereunder, and Lessor shall within a reasonable
time make such repairs as may be necessary. Failure to so report shall make
Lessee liable for any damage which may result from such defective condition or
needed repair. The Lessor further covenants and agrees that if the Lessor
fails to make and perform the said repairs within a reasonable time after the
Lessee has notified the Lessor of the necessity or desirability of said
repairs, the Lessee shall thereupon have the right and privilege to make and
perform said repairs and to deduct the cost of said repairs from the rental due
the Lessor.
6.
ALTERATION OF PREMISES
----------------------
The Lessor hereby covenants, conditions and agrees that during the
existence of this lease the Lessee at its discretion and expense shall have the
right and privilege to make and perform any changes and alterations on the
premises which do not damage the foundations or load bearing walls of the
premises. The Lessor hereby covenants and agrees that the Lessee shall not be
required to restore the said premises to their original condition and plan at
any time or instance during the existence of this lease or upon the termination
thereof.
7.
DESTRUCTION OF OR DAMAGE TO PREMISES
------------------------------------
The parties hereby covenant and agree that if the premises are totally
destroyed by fire, storm, lightning, earthquake, tornado, Act of God, accident,
or other casualty, this lease, at the election of either party, shall
termination as of the date of any such casualty and rental shall be accounted
for as between the parties as of said date; except that if the Lessor, within
fifteen (15) days after the date of said casualty, shall offer the Lessee in
writing to restore the premises to their original condition and to the
satisfaction of the Lessee and the Lessee shall accept such offer, then and
thereupon this lease shall continue and remain in force between the parties
except that the rental shall abate as of the date of said casualty and not
resume until the Lessee reoccupies the reconstructed premises. Said
reconstruction shall be commenced within thirty (30) days of Lessee's
acceptance of said offer and shall be completed within four (4) months of
commencement unless interrupted by construction delays beyond the reasonable
control of Lessor such as those heretofore enumerated in Paragraph 1, in which
event the time of completion shall
<PAGE>
be extended by the period of such interruption. Upon the completion of said
reconstruction and restoration of the premises to Lessee's satisfaction, Lessee
agrees to reoccupy the same and to recommence the payment of rental thereon as
herein provided.
The parties further covenant and agree that if the premises are damaged,
but not wholly destroyed by any such casualty as above referred to, the rental
shall abate in such proportion as use of the premises has been destroyed, and
the Lessor shall restore premises to substantially the same condition as before
damage as speedily as practicable, whereupon full rental shall recommence.
8.
CONDEMNATION
------------
The parties hereby covenant and agree that if the whole of the premises, or
such portion thereof as will make the 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 this lease shall terminate from the time
when possession thereof is abandoned by the Lessee after being taken by such
authority, and rental shall be accounted for as between the parties as of that
date. It is provided, however, that this lease shall not terminate if only a
portion of the premises is so taken and Lessee elects to continue in possession
of the remainder of the premises under the terms of this lease. In such event,
the rent herein reserved shall be adjusted in such fair proportion as said
partial taking may affect the use of the premises by Lessee. Should such
partial taking involve the structure of the building or prevent the use of any
of the improvements on the premises (such as the drives or parking area),
Lessor, at his expense, will promptly restore the remaining portion of the
building so that it will constitute a complete architectural unit, and will
likewise restore to as usable condition as possible the remainder of any drive,
parking area, or other improvement affected. During such restoration, Lessee
shall be required to pay a rental in proportion to the portion of the premises
remaining in tenantable condition.
Should any condemnation result in termination of this lease under the terms
and conditions above stated, such termination shall be without prejudice to the
rights of either party to recover compensation and damage caused by
condemnation from the condemnor. It is hereby understood and agreed that
neither party shall have any rights in any award made to the other by any
condemning authority.
9.
UTILITY BILLS
-------------
The Lessee hereby covenants and agrees to pay and be liable for all charges
and taxes incurred for light, heat, power, water sanitary service and refuse
pickup, and all other utility charges arising out of the use of the premises
during the existence of this lease.
10.
TAXES AND ASSESSMENTS
---------------------
The Lessor hereby covenants, conditions and agrees that he shall from time
to time, and at all times during the existence of this lease, pay and discharge
all rates, taxes, assessments, and all other impositions, general or special,
ordinary or extraordinary, of every kind and nature now
<PAGE>
anticipated or not, which now are or may be assessed, levied or imposed upon
the premises or any part thereof. If the Lessor should for any reason fail to
pay said rates, taxes, assessments and impositions when and where the same
shall become due, then the Lessee shall have the right, at its election, to pay
the same, together with such penalties as may have accrued, and to deduct the
said payments from the rental due the Lessor.
DeKalb County and City of Decatur property taxes due during the first full
calendar year ("base year") of Lessee's occupancy shall be referred to as "base
year property tax amount." Lessee agrees to pay to Lessor in any year of
occupancy subsequent to the base year an amount equal to the difference between
property taxes due and payable in that year and the base year property tax
amount.
11.
INDEMNITY
---------
Lessee agrees to indemnify and save harmless the Lessor against all claims
for damages or injury to persons and property, and all expenses incurred by
Lessor because thereof, caused by or resulting from the act or neglect of
Lessee, its agents or employees.
12.
OPTION
------
The Lessor hereby covenants and agrees that the Lessee shall have the
option to extend this lease for an additional term of five (5) years from and
after the expiration of the initial fifteen (15) year term at a monthly rental
calculated in the same manner as described in Paragraph 3 above and as more
specifically described in Exhibit "B" attached. Provided, however, Lessee may
not exercise this right if Lessee has made any assignment or subletting of this
lease as provided in Paragraph 17 of this Agreement.
13.
DEFAULTS
--------
It is further covenanted and agreed that in case, at any time, default
shall be made by Lessee in the payment of any of the rent herein specified upon
the date the same shall become due and payable, and such default shall continue
for a period of fifteen (15) days after notice in writing of such default to
said Lessee from Lessor; or in case of any default occurring in relation to or
in connection with any other of the covenants, duties and obligations hereunder
to be kept and performed by Lessee, and such default shall continue for thirty
(30) days after similar written notice to Lessee; or if Lessee causes any lien
to be placed against the premises and does not cure same within thirty (30)
days after notice from Lessor to Lessee demanding cure; then, and in any of
said events, Lessor at his option may at once, or within six (6) months
thereafter (but only during the continuance of such default or condition),
terminate this lease by written notice to Lessee, whereupon this lease shall
end, and Lessor may enter into and take possession of said demised premises
either with or without process of law. Upon such entry, Lessor shall again
have and repossess the premises the same as if this lease had not been made,
and thereupon all obligations of the Lessor hereunder shall cease, without
prejudice, however, to Lessor's right of action for arrears of rent or breach
of this contract. In addition it is also agreed that upon Lessee's breach of
the contract, Lessor may, at his option and as Lessee's agent, without
<PAGE>
terminating this lease, enter upon and rent premises at the best price
obtainable by reasonable effort, without advertisement and by private
negotiation and for any term Lessor deems proper; and in such event, Lessee
shall be liable to Lessor for the deficiency, if any, between Lessee's rent
hereunder and the price obtained by Lessor on such reletting. Pursuit of any
of the foregoing remedies shall not preclude pursuit of any other remedies
provided by law. Any notice in this provision may be given by Lessor or his
attorney.
14.
REMOVAL OF FIXTURES
-------------------
The Lessor hereby covenants and agrees that the Lessee shall have the
right, upon the termination of this lease, to remove all fixtures, appliances
and equipment which the Lessee has placed in or on the premises, provided
Lessee repairs all damage caused to premises by such removal. The right and
title to said fixtures, appliances and equipment shall remain in the Lessee at
all times. Provided, however, Lessee shall not remove, under any
circumstances, the following: heating, ventilating, air conditioning and
lighting systems and fixtures.
15.
EXTERIOR SIGNS
--------------
Lessee shall have the right without the prior consent of Lessor to use the
exterior of the building, the roof of the building, or any other location on
the premises for the purpose of attaching thereto or erecting thereon a sign or
signs advertising its business, provided, such sign or signs shall not
substantially damage the building; provided, further, that any sign so attached
or erected shall be made and maintained in conformity and compliance with all
applicable laws, ordinances, and governmental regulations governing the same,
and the Lessee shall be responsible to Lessor for any damage caused by the
installation, use, or maintenance of said signs. Upon the termination of this
lease or upon the removal of such sign or signs, any defacement or damage to
the exterior of the building or to the roof caused by said sign or signs shall
be repaired promptly by the Lessee.
16.
QUIET POSSESSION
----------------
The Lessor covenants, warrants, and represents that he has good title to
the demised premises free and clear of all liens and encumbrances; that he has
full right and power to execute and perform this lease; and that the Lessee,
upon paying the rent hereby reserved and performing and observing the several
covenants by it to be kept and performed, shall peaceably and quietly hold and
enjoy the leased premises and all of the appurtenances thereto throughout the
existence of this lease.
17.
ASSIGNMENT AND SUBLETTING
-------------------------
Lessee may assign this lease, or sublet premises or any part thereof, only
after having first obtained the written consent of Lessor, provided, that such
consent will not be unreasonably withheld. It is agreed and understood,
however, that no assignment or sublease shall relieve Lessee of any financial
liability or other obligation hereunder. Lessee agrees not to assign or
<PAGE>
sublease premises to any one who will create a nuisance or trespass, nor use
the premises for any illegal purpose, nor in violation of any valid regulations
of any governmental body, nor in any manner to vitiate the insurance. Lessee
agrees that any increase in Lessor's insurance premium caused by occupancy of
any sub-tenant will be paid by Lessee.
18.
TERMINATION OF LEASE
--------------------
The Lessee hereby covenants and agrees, at the termination of this lease or
at the termination of any extension of this lease, to quit and surrender the
premises in as good a state and condition as of the date of the first occupancy
hereunder, ordinary wear and tear and damage by storm, fire, lightning,
earthquake or other such casualty excepted.
19.
VIEWING PREMISES
----------------
It is agreed and understood that the Lessor may, at any reasonable time or
times during the existence of this lease, enter to view the premises; and
Lessor may, at any time within three (3) months next before the expiration of
the original and any extended term of this lease, show the said premises and
building or buildings to others and affix to any suitable part of the said
premises a notice for letting or selling the building or premises and keep the
same affixed without hindrance or molestation.
20.
HOLDING OVER
------------
If Lessee remains in possession of premises, or any part thereof, after
expiration of the term hereof, without a new written lease or a written
extension thereof having been signed by the parties, Lessee shall hold as a
tenant from month to month only and not otherwise, at a monthly rental rate in
effect at end of this lease, and in all other respects subject to all the terms
and provisions of this lease. There shall be no renewal of this lease by
operation of law.
21.
RIGHTS CUMULATIVE
-----------------
All rights, powers and privileges conferred hereunder upon the parties
shall be cumulative but not restrictive to those given by law.
22.
SUBORDINATION
-------------
Lessee's rights shall be subject to any mortgage or deed to secure debt
which may hereafter be placed upon the premises by Lessor, and Lessee agrees to
execute and deliver such documentation as may be required by any such mortgagee
to effect any such subordination. Provided, however, Lessee's rights under
this lease shall not be disturbed by any such subordination as long as Lessee
is in compliance with the terms of this lease.
<PAGE>
23.
TIME OF THE ESSENCE
-------------------
Time is of the essence of this Agreement.
24.
WAIVER OF RIGHTS
----------------
No failure of Lessor to exercise any power given to Lessor hereunder,
or to insist upon strict compliance by Lessee with its obligations hereunder,
and no custom or practice of the parties at variance with the terms hereof
shall constitute a waiver of Lessor's right to demand exact compliance with the
terms hereof.
25.
NO ESTATE IN LAND
-----------------
This agreement of lease shall create the relationship of landlord and
tenant between Lessor and Lessee; no estate shall pass out of Lessor; Lessee
has only a usufruct, not subject to levy and sale, and not assignable by Lessee
except by Lessor's consent.
26.
NOTICES
-------
Any notice given pursuant to this lease agreement shall be in writing
and sent by certified mail to:
Lessor: Daniel B. Pattillo
821 First National Bank Building
315 W. Ponce de Leon Avenue
Decatur, Georgia 30030
or at such other address as Lessor may hereafter designate in writing to
Lessee.
Lessee: Atlanta Gas Light Company
27.
INSURANCE
---------
Lessor shall carry at Lessor's sole cost and expense adequate
insurance coverage on the demised premises. Lessee shall carry at Lessee's
sole cost and expense insurance coverage on all equipment, fixtures and
appliances of Lessee.
<PAGE>
28.
SEVERABILITY
------------
If any term, covenant or condition of this lease or the application
thereof shall to any extent be invalid or unenforceable, the remainder of this
lease shall not be affected thereby, and each term, covenant or condition of
this lease shall be valid and enforceable to the fullest extent permitted by
law.
THIS LEASE AGREEMENT contains the entire agreement of the parties
hereto, and no representations, inducements, promises or agreements, and or
otherwise, between the parties, not embodied herein, shall be of any force or
effect.
IN WITNESS WHEREOF, the Lessor has hereunto set his hand and seal,
and the Lessee has caused these presents to be executed, and its corporate seal
hereto attached, by its proper corporate officers thereunder duly authorized,
this instrument being thus signed and sealed by the parties in duplicate, in
the day and year first above written.
Signed, sealed and delivered
as to Lessor in the presence of:
/s/ David R. Jones
------------------------
Witness
/s/ M. Crawford /s/ Daniel B. Pattillo (SEAL)
------------------------ ----------------------------
Notary Public DANIEL B. PATTILLO
Signed, sealed and delivered ATLANTA GAS LIGHT COMPANY (SEAL)
as to Lessee in the presence
of:
/s/ Donna L. Harell BY:/s/ John C. Mayson
------------------------ -------------------------
Witness VICE PRESIDENT
/s/ ATTEST: /s/ B. Folsom
------------------------ ---------------------
Notary Public Secretary
<PAGE>
EXHIBIT "A"
All that tract or parcel of land lying and being in Land Lot 246 of the 15th
District of DeKalb County, Georgia and being more particularly described as
follows:
BEGINNING at a point at the intersection of the southwest right of way of
Beaumont Street and the southeastern right of way of Hampton Street; run thence
150.67 feet in a southeastern direction along said southwest right of way of
Beaumont Street to a point, said line having a tangent distance of 150.55 feet
from said point; run thence 27.37 feet along the rights of way of Beaumont
Street and Oliver Street to a point on the western right of way of Oliver
Street, said point being 25.28 feet as measured along a tangent line having an
interior angle of 146 12'10" with the aforesaid tangent line; run thence in a
southwestern direction following the right of way of Oliver Street 138.08 feet
to a point, said point being 137.47 feet from the last point as measured along
a chord line having an interior angle of 150 10'30" with the last mentioned
tangent line; run thence 4.9 feet in a westerly direction along a line having
an exterior angle of 252 49'40" with the last mentioned tangent line to a
point; run thence in a southerly direction following the right of way of Oliver
Street 30.12 feet to a point, said point being 30.11 feet from the last point
as measured along a chord line having an exterior angle of 94 53'30" with the
last line run; thence run in a westerly direction 3.2 feet along a line
following the southern right of way of Montgomery Street to a point, said line
having an exterior angle of 265 06'30" with the last mentioned chord line; run
thence in a southerly direction 190.5 feet along the right of way of Oliver
Street along a line having an exterior angle of 87 22'20" with the chord line
last mentioned to a point; run thence west 100 feet to a point located 30 feet
north of the north side of an alley; run thence northerly 190.5 feet along a
line having an interior angle of 269 44'30" with the line last run to a point
on the southern right of way of Montgomery Street, said point being 194.0 feet
east from the present location of Ponce de Leon Place, as measured along
Montgomery Street; run thence 25.2 feet easterly along the southern right of
way of Montgomery Street along a line having an interior angle of 87 23'30"
with the line last run to a point; run thence 30.0 feet northerly along the
eastern right of way of Hampton Street along a line having an interior angle of
270 00'00" to a point; run thence 260.0 feet in a northern direction following
the eastern right of way of Hampton Street to the intersection with the
southwestern right of way of Beaumont Street and the point of beginning; said
property being more particularly shown on plat of survey for Callaway Motors,
Inc. by Charles S. Mercer, Jr., dated November 28, 1977, said plat being made a
part hereof by reference.
<PAGE>
EXHIBIT "B"
RENTAL SCHEDULE
<TABLE>
<CAPTION>
Original Term
<S> <C>
1st Year $ 4,540/per month
2nd Year 4,767/per month
3rd Year 5,005/per month
4th Year 5,256/per month
5th Year 5,518/per month
6th Year 5,794/per month
7th Year 6,084/per month
8th Year 6,388/per month
9th Year 6,708/per month
10th Year 7,043/per month
11th Year 7,395/per month
12th Year 7,765/per month
13th Year 8,153/per month
14th Year 8,560/per month
15th Year 8,989/per month
<CAPTION>
Optional Term
<S> <C>
16th Year 9,438/per month
17th Year 9,910/per month
18th Year 10,406/per month
19th Year 10,926/per month
20th Year 11,472/per month
</TABLE>
<PAGE>
EXHIBIT 10.3
ESCROW AGREEMENT, DATED DECEMBER 15, 1995,
BETWEEN DECATUR FIRST BANK GROUP, INC.
AND THE BANKERS BANK
<PAGE>
ESCROW AGREEMENT
----------------
THIS ESCROW AGREEMENT, made and entered into as of this 17th day of
October, 1996, by and between Decatur First Bank Group, Inc., a Georgia
corporation (the "Company"), and THE BANKERS BANK, a bank chartered under the
laws of Georgia (the "Escrow Agent"), as escrow agent.
W I T N E S S E T H:
--------------------
WHEREAS, the Company proposes to offer for sale up to an aggregate of
1,200,000 shares of common stock of the Company at a purchase price of $10.00
per share; and
WHEREAS, the Company has agreed to deposit certain proceeds from the
offering in escrow on the terms and conditions set forth herein; and
WHEREAS, the Escrow Agent has agreed to accept copies of subscription
documents (the "Subscription Documents"), with the Company retaining the
originals of the Subscription Documents, to be executed and delivered by
subscribers for shares together with sums (the "Subscription Funds") received
from such subscribers and to hold and distribute the Subscription Documents and
Subscription Funds all in accordance with the terms and conditions herein set
forth;
NOW, THEREFORE, in consideration of the premises and for good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged by the Escrow Agent, the parties hereto do hereby agree as
follows:
29. Deposits with the Escrow Agent. The Company agrees to deposit
------------------------------
with the Escrow Agent, or to cause to be deposited with the Escrow Agent, all
Subscription Documents and Subscription Funds received by it. The Company will
allow said Subscription Funds and Subscription Documents to remain in escrow
with the Escrow Agent and will not withdraw or attempt to withdraw either such
Subscription Funds or such Subscription Documents from the Escrow Agent except
as herein provided.
30. Deposit Accounts. Upon collection of each check by the Escrow
----------------
Agent, the Escrow Agent shall invest the funds in deposit accounts or
certificates of deposit which are fully insured by the Federal Deposit
Insurance Corporation or securities of the United States or an agency of the
United States government. The Company shall provide the Escrow Agent with
instructions from time to time concerning in which of the specific investment
instruments described above the Subscription Funds shall be invested, and the
Escrow Agent shall adhere to such instructions. Interest and other earnings
shall start accruing on such funds as soon as such funds would be deemed to be
available for access under applicable banking laws and pursuant to the Escrow
Agent's own banking policies.
<PAGE>
31. Minimum Escrow Amount. Except as otherwise provided herein, the
---------------------
Escrow Agent shall negotiate and hold all Subscription Documents and
Subscription Funds deposited with the Escrow Agent under the terms of this
Escrow Agreement until such time as the Escrow Agent shall have received a
written request from the Company and Subscription Documents executed by
investors agreeing to purchase 710,000 of the shares of stock of the Company
and cleared and collected Subscription Funds in the amount of $7,100,000 with
respect thereto, at which time all Subscription Documents and all Subscription
Funds held by the Escrow Agent and any interest earned thereon shall be
distributed by the Escrow Agent, to the Company. At the time of the release of
the Subscription Documents and Subscription Funds to the Company in the manner
described above, except for the provisions of Section 9 hereof, this Escrow
Agreement will terminate.
32. Return of Documents and Funds. In the event that the Escrow
-----------------------------
Agent (a) shall not have received, prior to termination of the offering,
Subscription Documents executed by subscribers agreeing to purchase at least
710,000 shares of Company common stock and Subscription Funds in the amount of
at least $7,100,000 with respect thereto, or (b) shall have received a written
notice from the Company that it is terminating the offering and this Escrow
Agreement, then the Escrow Agent shall return all Subscription Funds then held
by it under this Escrow Agreement, with any interest accrued thereon to the
respective subscribers at the addresses indicated on the Subscription
Documents, or as such subscribers may otherwise direct, together with the
corresponding executed Subscription Documents. After the distribution of all
Subscription Documents and Subscription Funds in accordance with the terms of
this Section 4, except for the provisions of Section 9 hereof, this Escrow
Agreement shall terminate.
33. Return of Subscriptions. In the event the Escrow Agent shall
-----------------------
have received written notification from the Company that any subscription is
being returned by the Company to the subscriber, in whole or in part, the
Escrow Agent shall return to the subscriber at the address indicated on the
subscriber's Subscription Documents, or as such subscriber may otherwise
direct, the Subscription Documents executed by such subscriber and all or a
portion of the Subscription Funds deposited with the Escrow Agent on behalf of
such subscriber. Release of any Subscription Funds by the Escrow Agent under
the circumstances described in this Section shall be accomplished by delivery
to the subscriber of a check of the Escrow Agent in the amount of the
Subscription Funds being returned, together with any interest accrued thereon
payable to the order of such subscriber.
34. Agreement of the Escrow Agent. The Escrow Agent hereby agrees
-----------------------------
to receive such deposits of Subscription Documents and Subscription Funds, to
hold the same intact, to promptly negotiate all checks, money orders or other
instruments received by Subscription Funds, to keep true, complete and accurate
records of all deposits and disbursements of the Subscription Documents and
Subscription Funds, to permit withdrawal thereof only in accordance with the
terms of this Escrow Agreement, and to refund or deliver all such Subscription
Funds and Subscription Documents to the respective subscribers or the Company,
as the case may be, at the time and in the manner provided under the terms of
this Escrow Agreement.
35. Representations of Company. The Company hereby acknowledges
--------------------------
that the status of the Escrow Agent with respect to the offering of the shares
of stock is that of agent only for the limited purposes herein set forth, and
hereby agrees that it will not represent or imply that
-2-
<PAGE>
the Escrow Agent, by serving as the Escrow Agent hereunder or otherwise, has
investigated the desirability or advisability of investment in the Company, or
has approved, endorsed or passed upon the merits of the shares of the stock or
the Company.
36. Liability of the Escrow Agent. The acceptance by the Escrow
-----------------------------
Agent of its duties under this Agreement is subject to the following terms and
conditions, which all parties to this Agreement hereby agree shall govern and
control with respect to the rights, duties and liabilities of the Escrow Agent:
(a) The Escrow Agent is not a party to and is not bound by any
agreement between any one or more of the parties hereto, except this
Agreement, unless otherwise expressly stated herein.
(b) The duties of the Escrow Agent hereunder are only such as are
herein specifically provided, being purely ministerial in nature, and it
shall have no responsibility in respect of any of the cash, property or
items ("Escrow Deposit") deposited with it other than faithfully to follow
the instruments herein contained.
(c) The Escrow Agent acts hereunder as a depositary only. The Escrow
Agent is not responsible for or liable in any manner whatever for the
sufficiency, correctness, genuineness and validity of any security,
document, or other item, which is a part of the Escrow Deposit or for any
claim or action by any person, firm, corporation or trustee concerning the
right or power of any depositor to make any transfer or the validity of
the transfer of any part of the Escrow Deposit to the Escrow Agent.
(d) The Escrow Agent shall be protected in acting upon any written
notice, request, waiver, consent, receipt or other paper or documents
which the Escrow Agent in good faith believes to be genuine.
(e) The Escrow Agent shall not be liable for any error of judgment, or
for any act done or step taken or omitted by it in good faith, or for any
mistake of fact or law, or for anything which it may do or refrain from
doing in connection herewith, except its own gross negligence or willful
misconduct.
(f) The Escrow Agent is authorized to hire, may consult with, and
obtain advice from legal counsel in the event any dispute, conflict or
question arises as to the construction of any of the provisions hereof or
its duties hereunder. The Escrow Agent shall be indemnified in accordance
with Section 9 hereof for all reasonable costs so incurred and shall incur
no liability and shall be fully protected for acting in good faith in
accordance with the written opinion and instructions of such counsel.
(g) The Escrow Agent may, but shall not be required to, defend itself
in any legal proceedings which may be instituted against it or it may, by
shall not be required to, institute legal proceedings in respect of the
Escrow Deposit, or any part
-3-
<PAGE>
thereof. The Escrow Agent shall be indemnified and held harmless in
accordance with Section 9 hereof against the cost and expense of any such
defense or action.
(h) The Escrow Agent shall make payment to or for, or deliver
documents to, any party only if in the Escrow Agent's judgment such
payment or delivery may be made under the terms of this Agreement without
its incurring any liability. If conflicting demands not expressly
provided for in this Agreement are made or notices served upon the Escrow
Agent with respect to its action or omission under this Agreement, the
parties hereto agree that the Escrow Agent shall have the absolute right
to elect to do either or both of the following:
(i) withhold and stop all future actions or omissions on its part
under this Agreement, or
(ii) file a suit in interpleader or for instructions or for a
declaratory judgment for other relief and obtain an order from a
proper court requiring the parties to litigate in such court their
conflicting claims and demands.
In the event any such action is taken, the Escrow Agent shall be fully released
and discharged from all obligations.
37. Indemnification of the Escrow Agent. The Company hereby agrees
-----------------------------------
to indemnify and hold harmless the Escrow Agent against any and all losses,
claims, damages, liabilities and expenses, including reasonable costs of
investigation and counsel fees and disbursements, which may be imposed upon the
Escrow Agent or incurred by the Escrow Agent hereunder, or as a result of the
performance of its duties as the Escrow Agent hereunder or involving the
subject matter hereof.
38. Escrow Agent Fees. The Escrow Agent shall receive for its
-----------------
services hereunder the sum of $1,500.00 due upon distribution of the
Subscription Documents and Subscription Funds as provided in Section 3 hereof.
39. Instructions and Notices. All notices, requests, demands or
------------------------
other communications authorized or required to be given by any party pursuant
to this Agreement shall be in writing to all parties, and shall be deemed to
have been sufficiently given on the date delivered by hand delivery, by
overnight courier or by certified mail, return receipt requested, to the
address set forth below:
-4-
<PAGE>
(i) If to the Escrow Agent:
The Bankers Bank
3715 Northside Parkway NW
300 North Creek, Suite 800
Atlanta, Georgia 30327
Attention: William R. Burkett
(ii) If to the Company:
Decatur First Bank Group, Inc.
755 Commerce Drive
Suite 516
Decatur, Georgia 30030
Attention: Judy B. Turner
(iii) With a copy to:
Kathryn L. Knudson, Esq.
Powell, Goldstein, Frazer & Murphy
191 Peachtree Street N.E.
Suite 1600
Atlanta, Georgia 30303
Any party hereto may change its address for purposes of notice by
notice of such change given to the other parties in the manner specified
herein.
40. Amendment. The parties hereto may amend, alter, modify or change
---------
any portion of the Escrow Agreement by written agreement of the parties hereto.
41. Counterparts. This Agreement may be executed in multiple
------------
counterparts, each of which shall be deemed an original and all of which shall
constitute one agreement. The signature of any party to any counterpart shall
be deemed to be a signature to, and may be appended to, any other counterpart.
42. Application of Georgia Law. This Escrow Agreement and the
--------------------------
application and interpretation hereof shall be governed exclusively by the laws
of the State of Georgia.
[Remainder of Page Intentionally Left Blank]
-5-
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Escrow Agreement as
of the day and year first above written.
DECATUR FIRST BANK GROUP, INC.
By: /s/ Judy B. Turner
----------------------------------------
Judy B. Turner
President
THE BANKERS BANK
By: /s/ William R. Burkett
----------------------------------------
Signature
William R. Burkett/Senior Vice President
----------------------------------------
Print Name/Title
-6-
<PAGE>
EXHIBIT 10.4
EMPLOYMENT AGREEMENT
<PAGE>
EMPLOYMENT AGREEMENT
THIS AGREEMENT is made as of the 1st day of June, 1996, between Decatur
First Bank (In Organization) (the "Bank"), a commercial bank and trust company
being chartered by the State of Georgia, and Decatur First Bank Group, Inc.
(the "Company"), the proposed holding company of the Bank (the Bank and the
Company collectively, the "Employer"), and Judy B. Turner, a resident of the
State of Georgia (the "Employee").
RECITALS:
The Employer desires to employ the Employee as the President and Chief
Executive Officer of the Employer and the Employee desires to accept such
employment.
In consideration of the above premises and the mutual agreements
hereinafter set forth, the parties hereby agree as follows:
1. Definitions. Whenever used in this Agreement, the following terms and
-----------
their variant forms shall have the meaning set forth below:
1.1 "Agreement" shall mean this Agreement and any exhibits incorporated
---------
herein together with any amendments hereto made in the manner described in this
Agreement.
1.2 "Affiliate" shall mean any business entity which controls the
---------
Employer, is controlled by or is under common control with the Employer.
1.3 "Area" shall mean the geographic area within the boundaries of
----
Clayton, Dekalb, Fulton, Gwinnett, Henry and Rockdale Counties. It is the
express intent of the parties that the Area as defined herein is the area where
the Employee performs or performed services on behalf of the Employer under
this Agreement as of, or within a reasonable time prior to, the termination of
the Employee's employment hereunder.
1.4 "Business of the Employer" shall mean the business conducted by the
------------------------
Employer, which is commercial banking.
1.5 "Cause" shall mean:
-----
1.5.1 With respect to termination by the Employer:
(a) A material breach of the terms of this Agreement by the
Employee, including, without limitation, failure by the Employee to
perform her duties and responsibilities in the manner and to the
extent required under this Agreement or a breach of any representation
or warranty of the Employee set forth herein which remains uncured
after the expiration of thirty (30) days following the delivery of
written notice of such breach to the Employee by the Employer. Such
notice shall (i) specifically identify the duties that the Board of
Directors believes Employee has failed to perform, (ii) state the
facts upon which the Board of Directors of the Employer made such
determination, and (iii) be approved by a resolution passed by two-
thirds (2/3) of the directors then in office;
<PAGE>
(b) Conduct by the Employee that amounts to fraud, dishonesty or
willful misconduct in the performance of her duties and
responsibilities hereunder;
(c) The conviction of the Employee of a felony;
(d) Conduct by the Employee that amounts to gross and willful
insubordination or inattention to her duties and responsibilities
hereunder; or
(e) Conduct by the Employee that results in removal from her
position as an officer or employee of the Employer pursuant to a
written order by any regulatory agency with authority or jurisdiction
over the Employer.
1.5.2 With respect to termination by the Employee, a material
diminution in the powers, responsibilities or duties of the Employee
hereunder, or the failure of the Board of Directors of the Bank and the
Company to elect her as President and Chief Executive Officer, or a
material breach of the terms of this Agreement by the Employer which
remains uncured after the expiration of thirty (30) days following the
delivery of written notice of such breach to the Employer by the Employee.
1.6 "Company Information" means Confidential Information and Trade
-------------------
Secrets.
1.7 "Confidential Information" means data and information relating to the
------------------------
business of the Company (which does not rise to the status of a Trade Secret)
which is or has been disclosed to the Employee or of which the Employee became
aware as a consequence of or through the Employee's relationship to the Company
and which has value to the Company and is not generally known to its
competitors. Confidential Information shall not include any data or information
that has been voluntarily disclosed to the public by the Company (except where
such public disclosure has been made by the Employee without authorization) or
that has been independently developed and disclosed by others, or that otherwise
enters the public domain through lawful means.
1.8 "Change in Control" means any one of the following events:
-----------------
(1) the acquisition by any person or persons acting in concert of
the then outstanding voting securities of either the Bank or the
Company, if, after the transaction, the acquiring person (or persons)
owns, controls or holds with power to vote twenty-five percent (25%)
or more of any class of voting securities of the Bank or the Company,
as the case may be, or such other transaction as may be described
under 12 C.F.R. Section 225.41(b)(1) or any successor thereto;
(2) within any twelve-month period (beginning on or after the
Effective Date) the persons who were directors of either the Bank or
the Company immediately before the beginning of such twelve-month
period (the "Incumbent Directors") shall cease to constitute at least
a majority of such board of directors; provided that any director who
was not a director as of the Effective Date shall be deemed to be an
Incumbent Director
-2-
<PAGE>
if that director was elected to such board of directors by, or on the
recommendation of or with the approval of, at least two-thirds of the
directors who then qualified as Incumbent Directors; and provided
further that no director whose initial assumption of office is in
connection with an actual or threatened election contest (as such
terms are used in Rule 14a-11 of Regulation 14A promulgated under the
Securities Exchange Act of 1934) relating to the election of directors
shall be deemed to be an Incumbent Director;
(3) the approval by the stockholders of either the Bank or the
Company of a reorganization, merger or consolidation, with respect to
which persons who were the stockholders of either the Bank or the
Company, as the case may be, immediately prior to such reorganization,
merger or consolidation do not, immediately thereafter, own more than
fifty percent (50%) of the combined voting power entitled to vote in
the election of directors of the reorganized, merged or consolidated
company's then outstanding voting securities; or
(4) the sale, transfer or assignment of all or substantially all
of the assets of the Company and its subsidiaries to any third party.
1.9 "Effective Date" shall mean the date on which the Company advises the
--------------
Escrow Agent that the terms of the Escrow Agreement have been satisfied and
instructs the Escrow Agent to release the escrowed funds to the Company.
1.10 "Escrow Agent" shall mean The Bankers Bank.
------------
1.11 "Escrow Agreement" shall mean that certain agreement by and between
----------------
the Company and The Bankers Bank whereby The Bankers Bank holds in escrow the
funds received from the sale of the Company's common stock until certain terms
and conditions are satisfied.
1.12 "Initial Term" shall mean that period of time commencing on June 1,
------------
1996 and running until the earlier of May 31, 2001 or any termination of
employment of the Employee under this Agreement as provided for in Section 3.
1.13 "Permanent Disability" shall mean the total inability of the Employee
--------------------
to perform her duties under this Agreement for a period of ninety (90)
consecutive days as certified by a physician chosen by the Employer and
reasonably acceptable to the Employee.
1.14 "Term" shall mean the Initial Term and all subsequent renewal
----
periods.
1.15 "Trade Secrets" means information including, but not limited to,
-------------
technical or nontechnical data, formulas, patterns, compilations, programs,
devices, methods, techniques, drawings, processes, financial data, financial
plans, product plans or lists of actual or potential customers or suppliers
which (i) derives economic value, actual or potential, from not being generally
known to, and not being readily ascertainable by proper means by, other persons
who can obtain economic value from
-3-
<PAGE>
its disclosure or use; and (ii) is the subject of efforts that are reasonable
under the circumstances to maintain its secrecy.
2. Duties.
------
2.1 The Employee is employed initially as the Chief Executive Officer of
the Employer and, subject to the direction of the Board or its designee, shall
perform and discharge well and faithfully the duties which may be assigned to
her from time to time by the Employer in connection with the conduct of its
business. The duties and responsibilities of the Employee are set forth on
Exhibit A attached hereto.
---------
2.2 In addition to the duties and responsibilities specifically assigned
to the Employee pursuant to Section 2.1 hereof, the Employee shall: (1) devote
substantially all of her time, energy and skill during regular business hours
to the performance of the duties of her employment (reasonable vacations and
reasonable absences due to illness excepted) and faithfully and industriously
perform such duties; (2) diligently follow and implement all management
policies and decisions communicated to her by the Board; and (3) timely prepare
and forward to the Board all reports and accounting as may be requested of the
Employee.
2.3 The Employee shall devote her entire business time, attention and
energies to the Business of the Employer and shall not during the term of this
Agreement be engaged (whether or not during normal business hours) in any other
business or professional activity, whether or not such activity is pursued for
gain, profit or other pecuniary advantage; but this shall not be construed as
preventing the Employee from (1) investing her personal assets in businesses
which (subject to clause (2) below) are not in competition with the Business of
the Employer and which will not require any services on the part of the
Employee in their operation or affairs and in which her participation is solely
that of an investor, (2) purchasing securities in any corporation whose
securities are regularly traded provided that such purchase shall not result in
her collectively owning beneficially at any time five percent (5%) or more of
the equity securities of any business in competition with the Business of the
Employer and (3) participating in civic and professional affairs and
organizations and conferences, preparing or publishing papers or books or
teaching so long as the Board approves of such activities prior to the
Employee's engaging in them.
3. Term and Termination.
--------------------
3.1 Term. This Agreement shall remain in effect for the Initial Term. At
----
the end of the Initial Term and at the end of each twelve-month extension
thereof, this Agreement shall automatically be extended for a successive
twelve-month period unless either party gives written notice to the other of
its intent not to extend this Agreement with such written notice to be given
not less than ninety (90) days prior to the end of the Initial Term or such
twelve-month period. In the event such notice of non-extension is properly
given, this Agreement shall terminate at the end of the remaining term then in
effect.
-4-
<PAGE>
3.2 Termination. During the Term, the employment of the Employee under
-----------
this Agreement may be terminated only as follows:
3.2.1 By the Employer or the Employee in the event that the Company
and the Bank abandon their organizational efforts or that the
Effective Date does not occur on or before June 1, 1997, whichever
occurs first.
3.2.2 By the Employer:
(a) For Cause, upon written notice to the Employee pursuant to
Section 1.5.1 hereof, which notice has been approved by a resolution
passed by two-thirds of the directors then in office, in which event
the Employer shall have no further obligation to the Employee except
for the payment of any amounts due and owing under Section 4 on the
effective date of termination; or
(b) Without Cause or upon the Permanent Disability of Employee at
any time, provided that the Employer shall give the Employee thirty
(30) days' prior written notice of its intent to terminate, in which
event the Employer shall be required to continue to meet its
obligations to the Employee under Section 4 for a period of twelve
(12) months following termination.
3.2.3 By the Employee:
(a) For Cause, with no prior notice except as provided in Section
1.5, in which event the Employer shall be required to continue to meet
its obligations to the Employee under Section 4 for a period of six
(6) months following termination; or
(b) Without Cause or upon the Permanent Disability of the Employee,
provided that the Employee shall give the Company sixty (60) days'
prior written notice of her intent to terminate, in which event the
Employer shall have no further obligation to the Employee except
future payment of any amounts due and owing under Section 4 on the
effective date of the termination.
3.2.4 By the Employee within six (6) months following a Change in
Control of the Employer, provided that the Employee shall give written
notice to the Employer of her intention to terminate this Agreement,
in which event the Employer shall be required to continue to meet its
obligations to the Employee under Section 4 for a period of six (6)
months after termination.
3.2.5 At any time upon mutual, written agreement of the parties, in
which event the Employer shall have no further obligation to the
Employee except for the payment of any amounts due and owing under
Section 4 on the effective date of termination unless otherwise set
forth in the written agreement.
-5-
<PAGE>
3.2.6 Notwithstanding anything in this Agreement to the contrary, the
term of employment shall end automatically upon the Employee's death,
in which event the Employer shall have no further obligation to the
Employee except for the payment of any amounts due and owing under
Section 4 on the effective date of termination.
3.3 Effect of Termination. Termination of the employment of the Employee
---------------------
pursuant to Section 3.2 shall be without prejudice to any right or claim which
may have previously accrued to either the Employer or the Employee hereunder
and shall not terminate, alter, supersede or otherwise affect the terms and
covenants and the rights and duties prescribed in this Agreement.
4. Compensation. The Employee shall receive the following salary and
------------
benefits:
4.1 Base Salary. During the Initial Term and until the Effective Date,
-----------
the Employee shall be compensated at a base rate of $6,500 per month.
Thereafter, the Employee shall be compensated at a base rate of $8,000 per
month. (The $6,500 and $8,000 monthly salary amounts are hereinafter referred
to as "Base Salary.") The Employee's salary shall be reviewed by the Board
annually, and the Employee shall be entitled to receive annually an increase in
such amount, if any, as may be determined by the Board. Such salary shall be
payable in accordance with the Employer's normal payroll practices.
4.2 Incentive Compensation.
----------------------
(a) Within 90 days following the end of each year of the Employer's
operations, the Employer shall pay the Employee a cash bonus equal to 5% of
the Company's audited consolidated pre-tax net income provided certain
performance criteria (to be determined annually by mutual agreement between
the Board and the Employee) are satisfied.
(b) The Employee shall also be entitled to participate in such other
bonus, incentive and other executive compensation programs as are made
available to senior management of the Employer from time to time (the
"Incentive Compensation").
4.3 Stock Options.
-------------
(a) As of the date the Company's initial public offering is closed,
the Employer will grant to the Employee a non-qualified option to purchase,
at a per share purchase price of $10.00, a number of shares of the
Company's common stock which is equal to 5% of the number of shares of the
Company's common stock which are sold in its initial public offering. The
option will become vested and exercisable in 20% increments, commencing on
the anniversaries until the option grant date and continuing for the next
four successive anniversaries until the option is fully vested and
exercisable. The option shall expire generally upon the earlier of the
Employee's termination of employment or upon the applicable option
expiration date. The option expiration date shall refer to a particular
option increment and shall mean the tenth anniversary of the date that the
option increment became vested and exercisable.
-6-
<PAGE>
(b) In the event of (i) termination by the Employer Without Cause
(Section 3.2.2(b)), (ii) termination by the Employee For Cause (Section
3.2.3(a)), or (iii) termination by the Employee following a Change of
Control (Section 3.2.4), all options granted to the Employee shall become
one hundred percent (100%) vested and exercisable for a period of ninety
(90) days after the date of the termination of employment. Any options not
exercised within ninety (90) days of the date of the termination of
employment shall expire.
4.4 Health Insurance.
----------------
(a) The Employer shall reimburse the Employee for the cost of premium
payments paid by the Employee for the Employee's current health insurance
(i) until such time as the Company adopts a health insurance plan for
employees of the Company and the Bank, (ii) until the Company and the Bank
abandon their organizational efforts, or (iii) until June 1, 1997,
whichever occurs first.
(b) In the event of (i) termination by the Employee For Cause (Section
3.2.3(a)), or (ii) termination by the Employee following a Change of
Control (Section 3.2.4), the Employer shall reimburse Employee for the cost
of premium payments paid by Employee to continue her then-existing health
insurance as provided by the Employer for a period of six (6) months
following the date of termination of employment.
(c) In the event of termination by the Employer Without Cause (Section
3.2.2(b)), the Employer shall reimburse the Employee for the cost of
premium payments paid by Employer to continue her then-existing health
insurance as provided by the Employer for a period of twelve (12) months
following the date of termination of employment.
4.5 Automobile. Beginning as of the Effective Date, the Employer will
----------
lease an automobile to be used by the Employee for business and personal
purposes. The Employer will pay expenses associated with the maintenance and
insurance for the automobile.
4.6 Business Expenses; Memberships. The Employer specifically agrees to
------------------------------
reimburse the Employee for (i) reasonable business (including travel) expenses
incurred by her in performance of her duties hereunder, as approved from time
to time by the Board, and (ii) beginning as of the Effective Date, the dues and
business related expenditures, including initiation fees, associated with
membership in a country club and in professional associations which are
commensurate with her position; provided, however, that the Employee shall, as
a condition of reimbursement, submit verification of the nature and amount of
such expenses in accordance with reimbursement policies from time to time
adopted by the Employer and in sufficient detail to comply with rules and
regulations promulgated by the Internal Revenue Service.
4.7 Vacation. On a non-cumulative basis the Employee shall be entitled to
--------
four (4) weeks of vacation in each year of this Agreement, during which her
compensation shall be paid in full. At least two consecutive weeks each year
must be taken by the Employee for vacation, with other
-7-
<PAGE>
vacation to be taken at the time the Employer determines appropriate, taking
into account the requirements of the Employer.
4.8 Life Insurance. During the term of this Agreement, the Employer will
--------------
provide the Employee with term life insurance coverage providing a death
benefit not to exceed $500,000, payable to such beneficiary or beneficiaries as
the Employee may designate.
4.9 Benefits. In addition to the Base Salary and Incentive Compensation, the
--------
Employee shall be entitled to such benefits as may be available from time to
time for executives of the Employer similarly situated to the Employee. All
such benefits shall be awarded and administered in accordance with the
Employer's standard policies and practices. Such benefits may include, by way
of example only, profit-sharing plans, retirement or investment funds, dental,
health, life and disability insurance benefits and such other benefits as the
Employer deems appropriate.
4.10 Withholding. The Employer may deduct from each payment of compensation
-----------
hereunder all amounts required to be deducted and withheld in accordance with
applicable federal and state income, FICA and other withholding requirements.
5. Company Information.
-------------------
5.1 Ownership of Information. All Company Information received or developed
------------------------
by the Employee while employed by the Employer will remain the sole and
exclusive property of the Employer.
5.2 Obligations of the Employee. The Employee agrees (a) to hold Company
---------------------------
Information in strictest confidence, and (b) not to use, duplicate, reproduce,
distribute, disclose or otherwise disseminate Company Information or any
physical embodiments thereof and may in no event take any action causing or
fail to take any action necessary in order to prevent any Company Information
from losing its character or ceasing to qualify as Confidential Information or
a Trade Secret. In the event that the Employee is required by law to disclose
any Company Information, the Employee will not make such disclosure unless (and
then only to the extent that) the Employee has been advised by independent
legal counsel that such disclosure is required by law and then only after prior
written notice is given to the Company when the Employee becomes aware that
such disclosure has been requested and is required by law. This Section 5
shall survive for a period of six (6) months following termination of this
Agreement with respect to Confidential Information, and shall survive
termination of this Agreement for so long as is permitted by the then-current
Georgia Trade Secrets Act of 1990, O.C.G.A. (S)(S) 10-1-760-10-1-767, with
respect to Trade Secrets.
5.3 Delivery upon Request or Termination. Upon request by the Employer, and
------------------------------------
in any event upon termination of her employment with the Employer, the Employee
will promptly deliver to the Employer all property belonging to the Employer,
including without limitation all Company Information then in her possession or
control.
-8-
<PAGE>
6. Non-Competition. The Employee agrees that during her employment by the
---------------
Employer hereunder and, in the event of her termination other than by the
Employer without Cause pursuant to Section 3.2.2(b) or by the Employee for
Cause pursuant to Section 3.2.3(a), for a period of twelve (12) months
thereafter, she will not (except on behalf of or with the prior written consent
of the Employer), within the Area, either directly or indirectly, on her own
behalf or in the service or on behalf of others, as a principal, partner,
officer, director, manager, supervisor, administrator, consultant, executive
employee or in any other capacity which involves duties and responsibilities
similar to those undertaken for the Employer, engage in any business which is
the same as or essentially the same as the Business of the Employer.
7. Non-Solicitation of Customers. The Employee agrees that during her
-----------------------------
employment by the Employer hereunder and, in the event of her termination other
than by the Employer without Cause pursuant to Section 3.2.2(b) or by the
Employee for Cause pursuant to Section 3.2.3(a), for a period of twelve (12)
months thereafter, she will not (except on behalf of or with the prior written
consent of the Employer), within the Area, on her own behalf or in the service
or on behalf of others, solicit, divert or appropriate or attempt to solicit,
divert or appropriate, directly or by assisting others, any business from any
of the Employer's customers, including actively sought prospective customers,
with whom the Employee has or had material contact during the last two (2)
years of her employment, for purposes of providing products or services that
are competitive with those provided by the Employer.
8. Non-Solicitation of Employees. The Employee agrees that during her
-----------------------------
employment by the Employer hereunder and, in the event of her termination other
than by the Employer without Cause pursuant to Section 3.2.2(b) or by the
Employee for Cause pursuant to Section 3.2.3(a), for a period of twelve (12)
months thereafter, she will not, within the Area, on her own behalf or in the
service or on behalf of others, solicit, recruit or hire away or attempt to
solicit, recruit or hire away, directly or by assisting others, any employee of
the Employer or its Affiliates, whether or not such employee is a full-time
employee or a temporary employee of the Employer or its Affiliates and whether
or not such employment is pursuant to written agreement and whether or not such
employment is for a determined period or is at will.
9. Remedies. The Employee agrees that the covenants contained in Sections 5
--------
through 8 of this Agreement are of the essence of this Agreement; that each of
the covenants is reasonable and necessary to protect the business, interests
and properties of the Employer; and that irreparable loss and damage will be
suffered by the Employer should she breach any of the covenants. Therefore,
the Employee agrees and consents that, in addition to all the remedies provided
by law or in equity, the Employer shall be entitled to a temporary restraining
order and temporary and permanent injunctions to prevent a breach or
contemplated breach of any of the covenants. The Employer and the Employee
agree that all remedies available to the Employer or the Employee, as
applicable, shall be cumulative.
10. Severability. The parties agree that each of the provisions included in
------------
this Agreement is separate, distinct and severable from the other provisions of
this Agreement and that the invalidity or unenforceability of any Agreement
provision shall not affect the validity or enforceability of any
-9-
<PAGE>
other provision of this Agreement. Further, if any provision of this Agreement
is ruled invalid or unenforceable by a court of competent jurisdiction because
of a conflict between the provision and any applicable law or public policy,
the provision shall be redrawn to make the provision consistent with and valid
and enforceable under the law or public policy.
11. No Set-Off by the Employee. The existence of any claim, demand, action or
--------------------------
cause of action by the Employee against the Employer, or any Affiliate of the
Employer, whether predicated upon this Agreement or otherwise, shall not
constitute a defense to the enforcement by the Employer of any of its rights
hereunder.
12. Notice. All notices and other communications required or permitted under
------
this Agreement shall be in writing and, if mailed by prepaid first-class mail
or certified mail, return receipt requested, shall be deemed to have been
received on the earlier of the date shown on the receipt or three (3) business
days after the postmarked date thereof. In addition, notices hereunder may be
delivered by hand, facsimile transmission or overnight courier, in which event
the notice shall be deemed effective when delivered or transmitted. All
notices and other communications under this Agreement shall be given to the
parties hereto at the following addresses:
(i) If to the Employer, to it at:
755 Commerce Drive
Suite 516
Decatur, Georgia 30030
(ii) If to the Employee, to her at:
235 Drexel Avenue
Decatur, Georgia 30030
13. Assignment. Neither party hereto may assign or delegate this Agreement or
----------
any of its rights and obligations hereunder without the written consent of the
other party hereto.
14. Waiver. A waiver by the Employer of any breach of this Agreement by the
------
Employee shall not be effective unless in writing, and no waiver shall operate
or be construed as a waiver of the same or another breach on a subsequent
occasion.
15. Arbitration. Any controversy or claim arising out of or relating to this
-----------
contract, or the breach thereof, shall be settled by binding arbitration in
accordance with the Commercial Arbitration Rules of the American Arbitration
Association. The Employer and the Employee agree that they will seek to
enforce any arbitration award only in either the State Court of Dekalb County
or the federal court for the Northern District of Georgia. The Employer and
the Employee agree to share equally the fees and expenses associated with the
arbitration proceedings.
-10-
<PAGE>
16. Attorneys' Fees. In the event that the parties have complied with this
---------------
Agreement with respect to arbitration of disputes and litigation ensues between
the parties concerning the enforcement of an arbitration award, the party
prevailing in such litigation shall be entitled to receive from the other party
all reasonable costs and expenses, including without limitation attorneys'
fees, incurred by the prevailing party in connection with such litigation, and
the other party shall pay such costs and expenses to the prevailing party
promptly upon demand by the prevailing party.
17. Applicable Law. This Agreement shall be construed and enforced under and
--------------
in accordance with the laws of the State of Georgia. The parties agree that
any appropriate state court located in DeKalb County, Georgia, shall have
jurisdiction of any case or controversy arising under or in connection with
this Agreement and shall be a proper forum in which to adjudicate such case or
controversy. The parties consent to the jurisdiction of such courts.
18. Interpretation. Words importing any gender include all genders. Words
--------------
importing the singular form shall include the plural and vice versa. The terms
"herein", "hereunder", "hereby", "hereto", "hereof" and any similar terms refer
to this Agreement. Any captions, titles or headings preceding the text of any
article, section or subsection herein are solely for convenience of reference
and shall not constitute part of this Agreement or affect its meaning,
construction or effect.
19. Entire Agreement. This Agreement embodies the entire and final agreement
----------------
of the parties on the subject matter stated in the Agreement. No amendment or
modification of this Agreement shall be valid or binding upon the Employer or
the Employee unless made in writing and signed by both parties. All prior
understandings and agreements relating to the subject matter of this Agreement
are hereby expressly terminated.
20. Rights of Third Parties. Nothing herein expressed is intended to or shall
-----------------------
be construed to confer upon or give to any person, firm or other entity, other
than the parties hereto and their permitted assigns, any rights or remedies
under or by reason of this Agreement.
21. Survival. The obligations of the Employee pursuant to Sections 5, 6, 7, 8
--------
and 9 shall survive the termination of the employment of the Employee hereunder
for the period designated under each of those respective sections.
22. Joint and Several. The obligation of the Bank and the Company to Employee
-----------------
hereunder shall be joint and several.
[Remainder of Page Intentionally Left Blank]
-11-
<PAGE>
IN WITNESS WHEREOF, the Employer and the Employee have executed and delivered
this Agreement as of the date first shown above.
THE EMPLOYER:
DECATUR FIRST BANK (IN ORGANIZATION)
By: /s/ Carol G. Nickola
----------------------
Name: Carol G. Nickola
Title: Personnel Committee Chair
DECATUR FIRST BANK GROUP, INC.
By: /s/ Carol G. Nickola
----------------------
Name: Carol G. Nickola
Title: Personnel Committee Chair
THE EMPLOYEE:
/s/ Judy B. Turner
------------------
JUDY B. TURNER
-12-
<PAGE>
Exhibit A
---------
Initial Duties of the Employee
The initial duties of the Employee shall include, in addition to any other
duties assigned the Employee by the Board of Directors of the Bank or the
Company or their respective designees, the following:
. Foster a corporate culture that promotes ethical practices, encourages
individual integrity, fulfills social responsibility, and is conducive
to attracting, retaining and motivating a diverse group of top-quality
employees at all levels.
. Work with the Board of Directors to develop a long-term strategy for
the Company that creates shareholder value.
. Develop and recommend to the Board annual business plans and budgets
that support the Company's long-term strategy.
. Manage the day-to-day business affairs of the Company appropriately.
. Use best efforts to achieve the Company's financial and operating
goals and objectives.
. Improve the quality and value of the products and services provided by
the Company.
. Ensure that the Company maintains a satisfactory competitive position
within its industry.
. Develop an effective management team and an active plan for its
development and succession, and make recommendations to the Board
regarding hiring, firing and compensation.
. Implement major corporate policies.
-13-
<PAGE>
EXHIBIT 21.1
SUBSIDIARIES OF DECATUR FIRST BANK GROUP, INC.
DECATUR FIRST BANK
(organized under the laws of the State of Georgia)
<PAGE>
EXHIBIT 23.1
CONSENT OF PORTER KEADLE & MOORE
<PAGE>
CONSENT OF INDEPENDENT AUDITOR
------------------------------
We have issued our report dated October 7, 1996, accompanying the financial
statements of Decatur First Bank Group, Inc., contained in the Registration
Statement and Prospectus. We consent to the use of the aforementioned report
in the Registration Statement and Prospectus, and to the use of our name as it
appears under the caption "Experts."
/s/ PORTER KEADLE MOORE, LLP
Atlanta, Georgia
October 17, 1996
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 9
<LEGEND>
This schedule contains summary financial information extracted from September
30, 1996 and is qualified in its entirety by reference to such financial
statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> OTHER
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> AUG-02-1996
<PERIOD-END> SEP-30-1996
<CASH> 10,751
<INT-BEARING-DEPOSITS> 0
<FED-FUNDS-SOLD> 0
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 0
<INVESTMENTS-CARRYING> 0
<INVESTMENTS-MARKET> 0
<LOANS> 0
<ALLOWANCE> 0
<TOTAL-ASSETS> 77,070
<DEPOSITS> 0
<SHORT-TERM> 105,000
<LIABILITIES-OTHER> 15,458
<LONG-TERM> 0
0
0
<COMMON> 5
<OTHER-SE> (43,393)
<TOTAL-LIABILITIES-AND-EQUITY> 77,070
<INTEREST-LOAN> 0
<INTEREST-INVEST> 0
<INTEREST-OTHER> 0
<INTEREST-TOTAL> 0
<INTEREST-DEPOSIT> 0
<INTEREST-EXPENSE> 240
<INTEREST-INCOME-NET> (240)
<LOAN-LOSSES> 0
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 43,158
<INCOME-PRETAX> (43,398)
<INCOME-PRE-EXTRAORDINARY> (43,398)
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (43,398)
<EPS-PRIMARY> (43,398)
<EPS-DILUTED> 0
<YIELD-ACTUAL> 0
<LOANS-NON> 0
<LOANS-PAST> 0
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 0
<CHARGE-OFFS> 0
<RECOVERIES> 0
<ALLOWANCE-CLOSE> 0
<ALLOWANCE-DOMESTIC> 0
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
