<PAGE>
As filed with the Securities and Exchange Commission on November 20, 1996.
Registration No. ___________________
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------------------
FORM S-1
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
----------------------------
BUCKHEAD COMMUNITY BANCORP, INC.
(Exact name of registrant as specified in its charter)
Georgia 6021 58-2265980
- ------------------------------- ------------------------ -------------------
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification No.)
3379 Peachtree Road, N.E., Suite 100, Atlanta, Georgia 30326
(404) 812-0440
(Address, including zip code, and telephone number, including
area code, of registrant's principal executive offices)
---------------------------------------------
Donald D. Thompson
President
3379 Peachtree Road, N.E., Suite 100
Atlanta, Georgia 30326
(404) 812-0440
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
-------------------------------------------
Copies of all communications, including copies of all communications
sent to agent for service, should be sent to:
Donald D. Thompson Larry W. Shackelford, Esq.
Buckhead Community Bancorp, Inc. Morris, Manning & Martin, L.L.P.
3379 Peachtree Road, N.E., Suite 100 1600 Atlanta Financial Center
Atlanta, Georgia 30326 3343 Peachtree Road, N.E.
(404) 812-0440 Atlanta, Georgia 30326
(404) 812-1867 (Fax) (404) 233-7000
(404) 365-9532 (Fax)
Approximate date of commencement of proposed sale to the public: As soon
as practicable after this Registration Statement becomes effective.
If any of the securities being registered on this form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]33-_________________
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. [ ]33-_________________
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box.[ ]
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
================================================================================
Proposed
Maximum Proposed
Amount to Price Maximum Amount of
Title of Each Class of be Per Aggregate Registration
Securities to be Registered Registered Share Price(1) Fee
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, $.01 par value 2,400,000 $5.00 $12,000,000 $4,137.93
================================================================================
</TABLE>
(1) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(a) under the Securities Act of 1933.
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 such Section 8(a),
may determine.
================================================================================
<PAGE>
BUCKHEAD COMMUNITY BANCORP, INC.
Cross Reference Sheet Between Items in Part I of
Form S-1 and the Prospectus
<TABLE>
<CAPTION>
Item Number and Caption Prospectus Caption
- ----------------------- ------------------
<S> <C>
1. Forepart of Registration Statement
and Outside Front Cover Page of
Prospectus........................... Outside Front Cover Page
2. Inside Front and Outside Back Cover
Pages of Prospectus.................. Inside Front and Outside Back Cover
Pages
3. Summary Information, Risk Factors and
Ratio of Earnings to Fixed Charges... Summary; Risk Factors
4. Use of Proceeds...................... Use of Proceeds
5. Determination of Offering Price...... Outside Front Cover Page; Risk
Factors; The Offering
6. Dilution............................. Risk Factors
7. Selling Security Holders............. *
8. Plan of Distribution................. Outside Front Cover Page; The
Offering
9. Description of Securities to be
Registered........................... Description of Capital Stock of the
Company; Management
10. Interests of Named Experts and
Counsel.............................. Legal Matters; Experts
11. Information with Respect to the
Registrant........................... Outside Front Cover page; Summary;
The Company and the Bank; Risk
Factors; Dividend Policy; Selected
Financial Data; Management's
Discussion and Analysis of Financial
Condition and Results of Operations;
Business; Management; Description of
Capital Stock of the Company; Report
of Independent Certified Public
Accountants and Financial Statements
12. Disclosure of Commission Position on
Indemnification for Securities Act
Liabilities.......................... *
</TABLE>
__________________________
*Omitted because answer is negative or not applicable
1
<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 SUCH STATE. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
SUBJECT TO COMPLETION, DATED NOVEMBER 20, 1996
PROSPECTUS
BUCKHEAD COMMUNITY BANCORP, INC.
A PROPOSED HOLDING COMPANY FOR
[BUCKHEAD NATIONAL BANK LOGO]
(PROPOSED)
2,400,000 SHARES OF COMMON STOCK
----------
This Prospectus relates to the offer of a minimum of 1,540,000 and a maximum
of 2,400,000 shares of common stock, par value $.01 per share (the "Common
Stock"), to be issued by BUCKHEAD COMMUNITY BANCORP, INC., a Georgia
corporation (the "Company"), which has been organized to own and control all of
the capital stock of BUCKHEAD NATIONAL BANK (Proposed) (the "Bank"). The
Company's mailing address and telephone number are currently 3379 Peachtree
Road, N.E., Suite 100, Atlanta, Georgia 30326, (404) 812-0440. The Organizers
(as hereinafter defined) filed an application to organize the Bank as a
national banking association with the United States Office of the Comptroller
of the Currency on November 8, 1996. It is currently anticipated that there
will be no active trading market for the Common Stock.
----------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE COMMIS-
SION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADE-
QUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMI-
NAL OFFENSE. THE SHARES OF COMMON STOCK OFFERED HEREBY ARE NOT DEPOS-
ITS OR SAVINGS ACCOUNTS OR SAVINGS DEPOSITS AND ARE NOT INSURED OR
GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY
OTHER GOVERNMENTAL AGENCY.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
UNDERWRITING DISCOUNTS PROCEEDS TO THE
PRICE TO PUBLIC(1) AND COMMISSIONS(2) COMPANY(3)
- -------------------------------------------------------------------------------
<S> <C> <C> <C>
Per Share........... $5.00 None $5.00
- -------------------------------------------------------------------------------
Total (Minimum)..... $7,700,000 None $7,700,000
(Maximum)........... $12,000,000 None $12,000,000
</TABLE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(1) The offering price has been arbitrarily established by the Company. See
"Risk Factors--Offering Price."
(2) This offering is expected to be made on behalf of the Company solely by
certain of its directors and executive officers, to whom no commission or
other compensation will be paid on account of such activity, although they
will be reimbursed for reasonable expenses incurred in the offering. The
Company believes such participating officers and directors shall not be
deemed brokers under the Securities Exchange Act of 1934 (the "Exchange
Act") based on reliance on Rule 3a4-1 of the Exchange Act.
(3) Before deducting expenses related to this offering, estimated to be
approximately $40,000. See "Use of Proceeds--By the Company."
----------
INVESTMENT IN THESE SECURITIES INVOLVES SIGNIFICANT RISK. SEE "RISK FACTORS"
ON PAGE 6. AFTER COMPLETION OF THE OFFERING, BUT PRIOR TO THE COMPANY OBTAINING
ALL FINAL REGULATORY APPROVALS FOR THE BANK TO COMMENCE BANKING OPERATIONS AND
RECEIPT OF ITS CHARTER, IT IS POSSIBLE THAT THE BANK MAY NOT BE ABLE TO
COMMENCE BANKING OPERATIONS, AND IN SUCH EVENT UPON LIQUIDATION OF THE COMPANY
SHAREHOLDERS COULD RECEIVE LESS THAN THEIR ORIGINAL SUBSCRIPTION PRICE. SEE
"RISK FACTORS--RETURN OF LESS THAN SUBSCRIPTION AMOUNT."
Sale of the Common Stock will commence on or about December 22, 1996. This is
a "best efforts" offering by the Company, and it will be terminated by the
Organizers upon the sale of 2,400,000 shares or September 30, 1997, whichever
occurs first, unless the offering is extended, at the discretion of the
Company, for additional periods ending no later than March 31, 1998. However,
the Organizers reserve the right to terminate the offering at any time after
the sale of the minimum offering of 1,540,000 shares.
This Prospectus sets forth information which a prospective investor should
know about the Company before investing. Prospective investors should carefully
review the Prospectus before subscribing for shares. Subscribers must warrant
in the Subscription Agreement that they have received a copy of this
Prospectus. See "The Offering--How to Subscribe." The Company has established a
minimum subscription of 100 shares. However, the Organizers reserve the right
to waive this limit without notifying any subscriber. The Organizers (together
with members of their immediate families) intend to purchase an aggregate of at
least 820,000 shares (53.2% if the minimum number of shares is sold and 34.2%
if the maximum number is sold) of the Common Stock to be sold in the offering.
In addition, the Organizers reserve the right to purchase up to 100% of the
shares of stock being offered hereunder if necessary to complete the offering.
Proceeds of the offering will be deposited in an escrow account under the
control of SunTrust Bank, Atlanta, as escrow agent, pending receipt of
subscriptions and subscription proceeds for a minimum of 1,540,000 shares and
satisfaction of certain other conditions of the offering. See "The Offering--
Conditions of the Offering and Release of Funds." If the offering is terminated
prior to completion, subscription payments will be promptly returned by the
Company to the subscribers with interest actually earned on subscription
payments. Any subscription proceeds accepted after satisfaction of the
conditions set forth above but before termination of this offering will not be
deposited in escrow but will be available for immediate use by the Company to
fund offering and organizational expenses and for working capital.
The date of this Prospectus is , 1996
<PAGE>
REPORTS TO SHAREHOLDERS
The Company is not a reporting company as defined by the Securities and
Exchange Commission (the "SEC"). The Company will furnish its shareholders
with annual reports containing audited financial information for each fiscal
year and will distribute quarterly reports for the first three quarters of each
fiscal year containing unaudited summary financial information. The Company's
fiscal year ends on December 31.
ADDITIONAL INFORMATION
The Company has filed with the SEC a Registration Statement under the
Securities Act of 1933 with respect to the Common Stock offered hereby. This
Prospectus does not contain all of the information set forth in the
Registration Statement, certain parts of which are omitted in accordance with
the rules and regulations of the SEC. For further information with respect to
the Company and the Common Stock, reference is hereby made to the Registration
Statement and the exhibits thereto. Statements contained in this Prospectus
concerning the provisions of such documents are necessarily summaries of such
documents and each such statement is qualified in its entirety by reference to
the copy of the applicable document filed with the SEC. The Registration
Statement may be inspected and copied at, and copies of the Registration
Statement may be obtained at prescribed rates from, the public reference
facilities of the Commission, Room 1024, 450 Fifth Street, N.W., Washington, DC
20549, as well as the SEC's Regional Offices at 500 West Madison Street, Suite
1400, Chicago, Illinois 60661 and 75 Park Place, Room 1400, New York, New York
10007. Copies of such material can be obtained at prescribed rates from the
Public Reference Section of the SEC at 450 Fifth Street, N.W., Washington, DC
20549. In addition, the Company is required to file electronic versions of the
documents with the SEC through the SEC's Electronic Data Gathering, Analysis
and Retrieval (EDGAR) system. The SEC maintains a World Wide Web site at
http://www.sec.gov that contains reports, proxy and information statements and
other information regarding registrants that file electronically with the SEC.
The Company and the Organizers have filed or will file various
applications with the Office of the Comptroller of the Currency, the Federal
Deposit Insurance Corporation, the Federal Reserve Bank of Atlanta and the
Georgia Department of Banking and Finance. 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 in public files and records maintained by the Office of the
Comptroller of the Currency, the Federal Deposit Insurance Corporation, the
Federal Reserve Bank of Atlanta and the Georgia Department of Banking and
Finance, is inconsistent with information presented in this Prospectus, such
other information is superseded by the information presented in this
Prospectus. Projections appearing in the applications were based on
assumptions that the Organizers believed were 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 any reliance on them for purposes of making an investment decision.
2
<PAGE>
PROSPECTUS SUMMARY
The following summary is qualified in its entirety by the more detailed
information contained elsewhere in this Prospectus.
- --------------------------------------------------------------------------------
The shares of Common Stock offered hereby are not deposits or savings
accounts or savings deposits and are not insured or guaranteed by the FDIC or
any other governmental agency.
- --------------------------------------------------------------------------------
The Company
Buckhead Community Bancorp, Inc. (the "Company") was incorporated under
the laws of the State of Georgia on October 15, 1996, primarily to hold all of
the capital stock of its proposed national banking subsidiary, Buckhead
National Bank (Proposed) (the "Bank"). The Company may not acquire the capital
stock of the Bank without the prior approval of the Federal Reserve Bank of
Atlanta (the "Federal Reserve"), as the delegate of the Board of Governors of
the Federal Reserve System (the "Federal Reserve Board"), and the Georgia
Department of Banking and Finance (the "Georgia Department"). The Company will
file an application for Federal Reserve approval once it obtains preliminary
approval of the application for a charter from the United States Office of the
Comptroller of the Currency (the "OCC"). The Company initially will engage in
no business other than owning and managing the Bank.
The Bank
The Organizers (as defined below) filed an application with the OCC on
November 8, 1996, to charter the Bank as a national banking association. The
Organizers expect to obtain preliminary approval of the Bank's application for
a charter by February 15, 1997. The Organizers also filed an application on
November 8, 1996, with the Federal Deposit Insurance Corporation (the "FDIC")
for insurance by the FDIC of the deposits of the Bank. The Bank may not
conduct any banking business until the OCC grants final approval of the Bank's
application and issues the Bank a charter and the FDIC grants deposit insurance
to the Bank. The issuance of a charter will depend, among other things, upon
compliance with certain legal requirements that may be imposed by the OCC,
including initial capitalization of the Bank of an amount which the Organizers
believe will be not less than $8,000,000. In order to receive deposit
insurance, the Bank must also comply with certain legal requirements that may
be imposed by the FDIC. See "The Offering" and "Supervision and Regulation."
Additionally, the Company must obtain the approval of the Federal Reserve and
the Georgia Department to become a bank holding company before acquiring the
capital stock of the Bank.
The Bank will engage in a general commercial banking business, emphasizing
the needs of small businesses and professionals primarily in the Buckhead area
of Atlanta, Georgia (the "Buckhead Area"). The Bank will be located in the
center of the Buckhead Area, on Peachtree Road between Piedmont Road and Lenox
Square Mall. The Buckhead Area is an affluent section of the City of Atlanta
about five miles north of downtown. The Buckhead market area extends roughly
from the convergence of I-75 and I-85 at the north end of the downtown
connector, northward to the northern city limits of Atlanta, bounded on the
east by the DeKalb County line and on the west by the Cobb County line. The
Bank will not initially have trust powers. The Bank may in the future offer a
full-service trust department, but it cannot do so without the prior approval
of the OCC. See "Proposed Business."
3
<PAGE>
Donald D. Thompson, the proposed President of the Bank, has over thirty
years of experience in the commercial banking industry. The Organizers believe
that the proposed President's banking experience and the extensive business
experience and contacts of the Organizers in the Buckhead Area should create
immediate business opportunities for the Bank. See "Management." The Organizers
presently are engaged in completing the tasks necessary to open the Bank in
March 1997, although no assurances can be given that the Bank will open for
business or that the projected opening date can be achieved.
The principal executive offices of the Company are located at 3379
Peachtree Road, N.E., Suite 100, Atlanta, Georgia 30326. The Organizers
currently plan for the Bank to be located at the same address.
The Organizers
The organizers of the Company and the Bank (the "Organizers") are Hugh C.
Aldredge, F. James Funk, Jr., M.D., J. Rex Fuqua, Julian LeCraw, Sr., R.
Charles Loudermilk, Sr., Larry P. Martindale, Donald D. Thompson, and William
T. Towles. Additional individuals may be added as Organizers, subject to
regulatory approval. All of the Organizers will serve as directors of the
Company and the Bank. See "Management."
The Organizers (together with members of their immediate families) intend
to purchase an aggregate of at least 820,000 shares of the Common Stock to be
sold in this offering. The Organizers may subscribe for up to 100% of the
shares in the offering if necessary to help the Company achieve the minimum
subscription level necessary to release subscription proceeds from escrow, and
some Organizers may decide to purchase additional shares even if the minimum
subscription amount has been achieved. 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. Because purchases by the Organizers
may be substantial, investors should not place any reliance on the sale of a
specified minimum offering amount as an indication of the merits of this
offering or that an Organizer's investment decision is shared by unaffiliated
investors. See "The Offering" and "Management."
The Offering
Security Offered Common Stock of the Company, par value $.01 per
share
Offering Price $5.00 per share
Number of Shares Offered Minimum: 1,540,000
Maximum: 2,400,000
Use of Proceeds The Company will use the net proceeds of the
offering (gross proceeds less offering expenses,
which are estimated to be $40,000) to capitalize
the Bank through the purchase of capital stock of
the Bank, subject to regulatory approval; to pay
organizational expenses of the Company; and to
provide working capital. The Company will use a
minimum of $7,660,000 of the net proceeds,
together with $340,000 of existing capital, to
capitalize the Bank of a minimum of $8,000,000.
The Company plans to retain sums in excess of the
minimum necessary to capitalize the Bank at the
Company and initially invest the sums in United
States government securities or as a deposit at
the Bank. The Company may be required by the OCC
to capitalize the Bank at a level in excess of the
minimum of
4
<PAGE>
$8,000,000, in which case the Company would have to
receive net proceeds in the offering in excess of
the minimum or obtain additional capital from
another source. If the OCC requires that the Bank
be capitalized with an amount in excess of the
minimum of $8,000,000, the Company plans to seek
additional subscriptions up to the maximum
subscription of $12,000,000. The Bank will use the
capital received from the sale of its stock to the
Company to provide working capital to be used for
business purposes, including making loans and
investments. See "Use of Proceeds - By the Bank."
Return of Less Than If the conditions for releasing subscription funds
Subscription Amount from escrow are met and such funds are released
but final regulatory approval to commence banking
operations is not obtained from the OCC or the
FDIC or the Bank does not open for any other
reason, it is possible that subscribers could be
returned an amount less than their original
investment. See "Risk Factors - Return of Less
Than Subscription Amount."
Conditions to Offering This offering will be terminated and all
subscription funds, together with interest
actually earned thereon will be returned promptly
to subscribers unless on or before September 30,
1997 (or such later date if the offering is
extended by the Company for additional periods not
to extend beyond March 31, 1998), (i) the Company
has accepted subscriptions and payment in full for
a minimum of 1,540,000 shares; (ii) the Company
has obtained approval of the Federal Reserve and
the Georgia Department to acquire the capital
stock of the Bank and thereafter to become a bank
holding company; and (iii) the Bank has received
preliminary approval of its application for a
charter from the OCC and of its application for
deposit insurance from the FDIC. Subscription
proceeds for shares will be deposited promptly in
an escrow account with SunTrust Bank, Atlanta, as
escrow agent (the "Escrow Agent"), under the terms
of an escrow agreement (the "Escrow Agreement"),
pending the satisfaction of the conditions set
forth above or the termination of the offering.
Subscriptions are binding on subscribers and may
not be revoked by subscribers except with the
consent of the Company. Any subscription proceeds
accepted after satisfaction of the conditions set
forth above but before termination of this
offering will not be deposited in escrow but will
be available for immediate use by the Company to
fund offering and organizational expenses and for
working capital. See "The Offering."
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 reasonable
expenses incurred in the offering.
5
<PAGE>
Risk Factors
An investment in the shares offered hereby involves certain risks,
including, among others, lack of an operating history, dependence on key
employees of the Bank, significant control of the Company by the Organizers,
absence of an existing market for the Common Stock and lack of assurance that
an active trading market in the Common Stock will develop, no intention to pay
dividends in the foreseeable future, and competition from a number of other
financial institutions with substantially greater financial and other resources
than the Bank will have. See "Risk Factors."
6
<PAGE>
RISK FACTORS
An investment in the shares offered hereby involves certain risks. A
subscription for shares should be made only after careful consideration of the
risk factors set forth below and elsewhere in this Prospectus and should be
undertaken only by persons who can afford an investment involving such risks.
The shares of Common Stock offered hereby are not deposits or savings accounts
or savings deposits and are not insured or guaranteed by the FDIC or any other
governmental agency.
Return of Less Than Subscription Amount. The amounts paid by subscribers
in this offering will be held in escrow until (i) the Company has accepted
subscriptions and payment in full for a minimum of 1,540,000 shares; (ii) the
Company has obtained approval of the Federal Reserve and the Georgia Department
to acquire the capital stock of the Bank and thereafter to become a bank
holding company; and (iii) the Bank has received preliminary approval of its
application for a charter from the OCC and of its application for deposit
insurance from the FDIC. The Organizers anticipate that they will receive
preliminary regulatory approval from the OCC and FDIC by February 15, 1997, and
from the Federal Reserve and the Georgia Department by March 15, 1997. If
these conditions are not met by September 30, 1997, or by such subsequent date,
not beyond March 31, 1998, to which the offering may be extended by the
Company, all subscriptions will be returned promptly in full along with
interest actually earned thereon. If these conditions are satisfied, the
subscription amounts held in escrow may be paid to the Company and shares
issued to subscribers, and all interest earned on the subscription proceeds
will be retained by the Company. Once the Company has met the conditions for
the offering, the Escrow Agreement will be terminated and any subscription
proceeds accepted after satisfaction of the conditions set forth above but
before termination of this offering will not be deposited in escrow but will be
available for immediate use by the Company to fund offering and organizational
expenses and for working capital.
Under the OCC's policies, a newly chartered national bank must open for
business within eighteen months of receipt of preliminary approval of its
application for a charter. The OCC's standard conditions for opening a bank
include, but are not limited to: (i) raising sufficient capital, (ii) forming
the corporate body, and (iii) passing the pre-opening examination. The OCC has
substantial discretion in determining whether all of the conditions to opening
the Bank have been met. In addition, the FDIC has substantial discretion in
determining whether the Bank will be granted federal deposit insurance, which
is a prerequisite to the Bank's opening. Therefore, even if the Company meets
the conditions for release of the subscription funds from escrow, there is no
assurance that the Bank will open for business. If the conditions for
releasing subscription funds from escrow are met and such funds are released
but final regulatory approval to commence banking operations is not obtained
from the OCC or the FDIC or the Bank does not open for any other reason, the
Company's board of directors (the "Board of Directors") intends to propose that
the shareholders approve a plan to liquidate the Company. Upon such a
liquidation, the Company would be dissolved and the Company's net assets
(generally consisting of the amounts received in this offering plus any
interest earned thereon, less the amount of all costs and expenses incurred by
the Company and the Bank, including the salary of the President of the Company
and the Bank and other pre-opening expenses) would be distributed to the
shareholders. In such event, the Company will have incurred numerous expenses
related to the organization of the Company and the Bank, and the amount
distributed to shareholders may be substantially less than the subscription
amount, and in an extreme case shareholders may not be returned any amount.
7
<PAGE>
Lack of Operating History; Lack of Initial Profitability. The Company and
the Bank currently are in the organizational stage, and neither has any
operating history. As a consequence, prospective purchasers of the shares have
limited information on which to base an investment decision. As a bank holding
company, the Company's profitability will depend upon the Bank's operations.
The Bank's proposed operations are subject to the risks inherent in the
establishment of any new business and, specifically, of a new bank. The
Company expects that the Bank will incur substantial initial expenses and may
not be profitable for several years after commencing business, if ever.
Shareholders are likely to experience additional dilution in the book value of
the Common Stock due to operating losses expected to be incurred during the
initial years of the Bank's operations. See "Proposed Business" and
"Management's Discussion and Analysis of Financial Condition and Results of
Operations."
Dependence on Key Employee. As a new enterprise, the Company and the Bank
will be materially dependent on the performance of Donald D. Thompson, who will
be President and Chief Executive Officer of the Company and the Bank. The loss
of the services of Mr. Thompson or his failure to perform his management
functions in the manner anticipated by the Organizers could have a material
adverse effect on the Company and the Bank. The Company has entered into an
employment agreement with Mr. Thompson (the "Employment Agreement") pursuant to
which Mr. Thompson will be employed as President and Chief Executive Officer of
the Bank. The Employment Agreement provides that Mr. Thompson's employment is
terminable by either party upon 60 days notice or by the Company immediately
for cause or if the organization of the Bank is abandoned. The Employment
Agreement restricts Mr. Thompson's ability to compete with the Company or the
Bank for a period of three years following his termination. See "Management -
Employment Agreement."
Control of the Company; Purchases by Organizers. The Organizers, all of
whom will serve as directors of the Company and the Bank, and members of their
immediate families intend to purchase an aggregate of at least 820,000 shares,
equal to 53.2% of the minimum number of shares offered hereby and 34.2% of the
maximum number of shares offered hereby. Organizers may purchase additional
shares in the offering and additional persons may be named as Organizers,
subject to regulatory approval. The Organizers presently own all 80,000
outstanding shares of the Company. As a result of the anticipated stock
ownership in the Company by the Organizers, together with the influence which
may be exerted by such persons due to their positions as directors of the
Company and the Bank, the Organizers as a group will have substantial control
of the Company and the Bank following the offering. The Organizers may
subscribe for up to 100% of the shares in this offering if necessary to help
the Company achieve the minimum subscription level necessary to release
subscription proceeds from escrow, and some Organizers may decide to purchase
additional shares even if the minimum subscription amount has been achieved.
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. Because purchases by the Organizers may be substantial, investors
should not place any reliance on the sale of a specified minimum offering
amount as an indication of the merits of this offering or that an Organizer's
investment decision is shared by unaffiliated investors. See "The Offering"
and "Management."
Antitakeover Effects. Certain provisions of the Company's Articles of
Incorporation and Bylaws may have the effect of discouraging attempts to
takeover the Company, including: (i) provisions requiring prior notice of
matters to be brought before meetings of shareholders; (ii) provisions
requiring prior notice of nominees for election as directors; (iii) the ability
of the Board of Directors to issue additional shares of common stock and
special stock authorized in the Articles of Incorporation without shareholder
approval; and (iv) a provision of the Articles of Incorporation
8
<PAGE>
granting the Board of Directors the discretion, when considering whether a
proposed merger or similar transaction is in the best interests of the Company
and its shareholders, to take into account the effect of the transaction on the
employees, customers, and suppliers of the Company and upon the communities in
which the offices of the Company are located. Any of these measures may impede
the takeover of the Company without the approval of the Board of Directors. See
"Description of Capital Stock of the Company - Certain Antitakeover Effects."
Determination of Offering Price. Because the Company and the Bank are in
organization, the offering price of $5.00 per share was determined by the
Organizers without reference to traditional criteria for determining stock
value such as book value or historical or projected earnings since such
criteria are not applicable to companies with no history of operations. The
price per share was set to enable the Company to raise gross proceeds of
between $7,700,000 and $12,000,000 in this offering through the sale of a
reasonable number of shares, and the price per share is essentially equivalent
to the initial book value per share prior to the payment of the Company's and
the Bank's organizational expenses. No assurance is or can be given that any
of the shares could be resold for the offering price or any other amount.
Absence of Trading Market. There currently is no market for the shares
and it is not likely that any trading market will develop for the shares in the
future. There are no present plans for the Common Stock to be traded on any
stock exchange or in the over-the-counter market. Furthermore, the development
of any trading market for the shares may be adversely affected by purchases of
large amounts of shares in this offering by the Organizers since shares
purchased by the Organizers will generally not be freely tradable.
Furthermore, in the event that a small number of Organizers or other persons
acquire substantial additional amounts of the Common Stock, a trading market
for the Common Stock will be even less likely to develop. As a result,
investors who may need or wish to dispose of all or part of their shares may be
unable to do so except in private, directly negotiated sales. In addition,
sales of substantial amounts of the Common Stock after the offering, by the
Organizers or others, could adversely affect prevailing market prices. See
"Description of Capital Stock of the Company - Shares Eligible for Future
Sale."
Established Competition. The banking business is highly competitive, and
the Bank will encounter strong competition from other commercial banks, as well
as from savings institutions, mortgage banking firms, consumer finance
companies, securities brokerage firms, insurance companies, money market mutual
funds, and other financial institutions operating in the Atlanta area. As of
August 1996, the Buckhead market consisted of ten commercial banks with a total
of thirty-two branches and one credit union. A number of these competitors are
well established in the Buckhead Area. Most of them have substantially greater
resources and lending limits and a lower cost of funds than the Bank will have
initially and may offer certain services, such as extensive and established
branch networks and trust services, that the Bank either does not expect to
provide or will not provide initially. As a result of these competitive
factors, the Bank may have to pay higher rates of interest to attract deposits.
In addition, non-depository institution competitors are generally not subject
to the extensive regulations applicable to the Company and the Bank. Federal
legislation in recent years has removed restrictions on the establishment of
nationwide operations by commercial banks, further increasing competition from
out-of-state financial institutions. Although the Organizers believe that the
Bank will be able to compete effectively with these institutions, no assurances
can be given in this regard. See "Proposed Business - Competition" and
"Supervision and Regulation."
9
<PAGE>
Supervision and Regulation. The banking industry is heavily regulated.
The success of the Company and the Bank depends not only on competitive factors
but also on state and federal regulations affecting banks and bank holding
companies. These regulations are primarily intended to protect depositors, not
shareholders. Regulation of the financial institutions industry is undergoing
continued changes, and the ultimate effect of such changes cannot be predicted.
Over the last 10 years, legislative enactments and the regulations thereunder
have substantially increased the regulatory and supervisory requirements for
financial institutions, which have resulted and will continue to result in
increased operating expenses. Additional statutes affecting financial
institutions have been proposed and may be enacted. Regulations now affecting
the Company and the Bank may be modified at any time, and there is no assurance
that such modifications will not adversely affect the business of the Company
and the Bank. See "Supervision and Regulation."
Economic Conditions. The success of the Company and the Bank will depend,
to a certain extent, upon economic and political conditions, both local and
national, as well as governmental monetary policies. Conditions such as
inflation, recession, unemployment, high interest rates, short money supply,
and other factors beyond the control of the Company and the Bank may adversely
affect the Bank's deposit levels and loan demand and, therefore, the earnings
of the Bank and the Company. Although the Organizers expect favorable economic
development in the Bank's 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 "Proposed Business."
Lack of Plans to Pay Dividends. The Company has no plans to pay any cash
dividends to its shareholders in the foreseeable future. Since the Company and
the Bank are both start-up operations and may incur initial losses, both the
Company and the Bank intend to retain any earnings for the period of time
management believes necessary to ensure the success of their operations. The
Company will be dependent upon the Bank for its earnings and funds to pay
dividends on the Common Stock. The payment of dividends by the Company and the
Bank is also subject to legal and regulatory restrictions. Any payment of
dividends by the Company in the future will depend on the Bank's earnings,
capital requirements, financial condition, and other factors considered
relevant by the Board of Directors. See "Dividend Policy," "Proposed
Business," and "Supervision and Regulation."
Lending Limit. Under the National Bank Act, the Bank is limited in the
amount it can loan a single borrower (including the borrower's related
interests) by the amount of the Bank's capital. These limits will increase and
decrease as the Bank's capital increases and decreases as a result of the
Bank's earnings or losses, among other reasons. Unless the Bank is able to
sell participations in its loans to other financial institutions, the Bank will
not be able to meet all of the lending needs of loan customers requiring
aggregate extensions of credit above these limits. See "Supervision and
Regulation."
10
<PAGE>
THE COMPANY AND THE BANK
The Company was incorporated under the laws of Georgia on October 15,
1996, for the purpose of becoming a bank holding company by acquiring all of
the capital stock of the Bank upon its formation. The Bank is being organized
as a national banking association under the laws of the United States. On
November 8, 1996, the Organizers of the Bank, filed an application for a
charter for the Bank with the OCC and an application for insurance of the
deposits of the Bank with the FDIC. Upon receipt by the Organizers of
preliminary approval of the application for a charter from the OCC, the Company
will file an application with the Federal Reserve and the Georgia Department
seeking approval to become a bank holding company by acquiring all of the
capital stock to be issued by the Bank. If and when the Company and the Bank
receive required regulatory approvals, the Company will use a minimum of
$7,660,000 of the aggregate net proceeds of this offering (together with up to
$340,000 of existing capital) to purchase all of the shares of the capital
stock of the Bank. See "Use of Proceeds." The Company initially will engage in
no business other than owning and managing the Bank.
The Bank will engage in a general commercial banking business, emphasizing
the needs of small businesses and professionals primarily in the Buckhead Area.
The Bank will not initially have trust powers. The Bank may in the future
offer a full-service trust department, but it cannot do so without the prior
approval of the OCC. See "Proposed Business." Donald D. Thompson, the
proposed President and Chief Executive Officer of the Bank, has over thirty
years experience in the commercial banking industry. See "Management."
The Organizers believe that the banking experience of the proposed
President and the extensive business experience and contacts of the Organizers
in the Buckhead Area should create immediate business opportunities for the
Bank. The Organizers presently are engaged in completing the tasks necessary
to open the Bank in March 1997, although no assurance can be given that the
Bank can be opened or that the projected opening time can be met. See
"Proposed Business."
The Organizers of the Bank are Hugh C. Aldredge, F. James Funk, Jr., M.D.,
J. Rex Fuqua, Julian LeCraw, Sr., R. Charles Loudermilk, Sr., Larry P.
Martindale, Donald D. Thompson, and William T. Towles. Additional individuals
may be added as Organizers, subject to regulatory approval. All of the
Organizers will serve as directors of the Company and the Bank. The Organizers
(together with members of their immediate families) intend to purchase an
aggregate of at least 820,000 shares of the Common Stock to be sold in this
offering. The Organizers may subscribe for up to 100% of the shares in the
offering if necessary to help the Company achieve the minimum subscription
level necessary to release subscription proceeds from escrow, and some
Organizers may decide to purchase additional shares even if the minimum
subscription amount has been achieved. 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. Because purchases by the Organizers
may be substantial, investors should not place any reliance on the sale of a
specified minimum offering amount as an indication of the merits of this
offering or that an Organizer's investment decision is shared by unaffiliated
investors. See "Management."
The principal executive offices of both the Company and the Bank will be
located at 3379 Peachtree Road, N.E., Suite 100, Atlanta, Georgia 30326. The
Company's telephone number is (404) 812-0440.
11
<PAGE>
THE OFFERING
General
The Company is offering for sale a minimum of 1,540,000 shares and a
maximum of 2,400,000 shares of its Common Stock at a price of $5.00 per share
to raise gross proceeds of between $7,700,000 and $12,000,000 for the Company.
The minimum purchase for any investor (together with the investor's affiliates)
is 100 shares unless the Company, in its sole discretion, accepts a
subscription for a lesser or greater number of shares. Subscribers should be
aware that beneficial ownership of as little as 5% of the outstanding shares
could obligate the beneficial owner to comply with certain reporting and
disclosure requirements of federal and state securities and banking laws.
It is expected that the Organizers as a group will purchase a total of
820,000 of the shares offered hereby; however, the Organizers may, subject to
regulatory approval, elect to purchase up to 100% of the shares offered hereby
and additional persons may be named as Organizers. 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. Because purchases
by the Organizers are expected to be substantial, investors should not place
any reliance on the sale of the specified minimum offering amount as an
indication of the merits of this offering or that an Organizer's investment
decision is shared by other unaffiliated investors.
Subscriptions to purchase shares will be received until September 30,
1997, unless all of the shares are earlier sold or the offering is earlier
terminated or extended by the Company. See "Conditions to the Offering and
Release of Funds." The Company reserves the right to terminate the offering at
any time or to extend the expiration date for additional periods not to extend
beyond March 31, 1998. The date the offering terminates is referred to herein
as the "Expiration Date." No written notice of an extension of the offering
period need be given prior to any extension, and any such extension will not
alter the binding nature of subscriptions already accepted by the Company.
Extension of the Expiration Date might cause an increase in the Company's
organizational and pre-opening expenses and in the expenses incurred with this
offering. The Company and the Bank may find it necessary to utilize the
services of brokers or dealers in order to effectuate the sales of these
securities in certain jurisdictions.
Following acceptance by the Company, subscriptions will be binding on
subscribers and may not be revoked by subscribers except with the consent of
the Company. In addition, the Company reserves the right to cancel accepted
subscriptions at any time and for any reason until the proceeds of this
offering are released from escrow (as discussed in greater detail in
"Conditions to the Offering and Release of Funds" below), and the Company
reserves the right to reject, in whole or in part, and in its sole discretion,
any subscription. The Company may, in its sole discretion, allocate shares
among subscribers in the event of an oversubscription for the shares. In
determining which subscriptions to accept, in whole or in part, the Company may
take into account any factors it considers relevant, including the order in
which subscriptions are received, a subscriber's potential to do business with,
or to direct customers to, the Bank, and the Company's desire to have a broad
distribution of stock ownership.
In the event the Company rejects all, or accepts less than all, of any
subscription, the Company will refund promptly, with interest actually earned
thereon, the amount remitted that corresponds to $5.00 multiplied by the number
of shares as to which the subscription is not accepted. If the Company accepts
a subscription but in its discretion subsequently elects to cancel all or part
of
12
<PAGE>
such subscription, the Company will refund promptly the amount remitted that
corresponds to $5.00 multiplied by the number of shares as to which the
subscription is canceled, together with interest actually earned thereon.
Certificates representing shares duly subscribed and paid for will be
issued by the Company promptly after the offering conditions are satisfied and
escrowed funds are delivered to the Company.
Conditions to the Offering and Release of Funds
Subscription proceeds accepted by the Company for the initial 1,540,000
shares subscribed for in this offering will be promptly deposited in an escrow
account with the Escrow Agent until the conditions to this offering have been
satisfied or the offering has been terminated. The offering will be
terminated, no shares will be issued, and no subscription proceeds will be
released from escrow to the Company unless on or before the Expiration Date:
(i) the Company has accepted subscriptions and payment in full for a minimum of
1,540,000 shares; (ii) the Company has obtained approval of the Federal Reserve
and the Georgia Department to acquire the capital stock of the Bank and
thereafter to become a bank holding company; and (iii) the Bank has received
preliminary approval of its application for a charter from the OCC and of its
application for deposit insurance from the FDIC.
If the above conditions are satisfied, the subscription amounts held in
escrow may be paid to the Company and shares issued to subscribers. Once the
Company has met the conditions for the offering, the Escrow Agreement will be
terminated and any subscription proceeds accepted after satisfaction of the
conditions before termination of this offering will not be deposited in escrow
but will be available for immediate use by the Company to fund offering and
organizational expenses and for working capital. When the subscription funds
are released to the Company, the Company will use a portion of the proceeds to
repay the Organizers for amounts advanced by them for organizational and
offering expenses.
If the conditions for releasing subscription funds from escrow are met and
such funds are released but final regulatory approval to commence banking
operations is not obtained from the OCC or the Bank does not open for any other
reason, the Board of Directors intends to propose that the shareholders approve
a plan to liquidate the Company. Upon such a liquidation, the Company would be
dissolved and the Company's net assets (generally consisting of the amounts
received in this offering plus any interest earned thereon, less the amount of
all costs and expenses incurred by the Company and the Bank, including the
salary of the President, would be distributed to the shareholders. In such
event, the Company will have incurred numerous expenses related to the
organization of the Company and the Bank, and the amount distributed to
shareholders may be substantially less than the subscription amount, and in an
extreme case shareholders may not be returned any amount.
If the above conditions are not satisfied by the Expiration Date or the
offering is otherwise earlier terminated, accepted subscription agreements will
be of no further force or effect, and the full amount of all subscription funds
will be returned promptly to subscribers together with any interest actually
earned on such subscription funds.
The Escrow Agent has not investigated the desirability or advisability of
an investment in the shares by prospective investors and has not approved,
endorsed, or passed upon the merits of an investment in the shares.
Subscription funds held in escrow will be invested in the deposit accounts or
short-term certificates of deposit which are fully insured by the FDIC or
another agency of the United
13
<PAGE>
States Government, short-term securities issued or fully guaranteed by the
United States government or federal funds until released from escrow. The
Organizers do not intend to invest the subscription proceeds held in escrow in
instruments that would mature after the Expiration Date of the offering.
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 reasonable expenses incurred in the
offering. Although it is not currently anticipated, the Company and the Bank
reserve the right to use brokers or dealers to effectuate sales of the Common
Stock in the offering.
How to Subscribe
Shares may be subscribed for by delivering the subscription agreement (the
"Subscription Agreement") attached hereto as Exhibit A, completed and executed,
to the Company, on or prior to the Expiration Date. Subscribers should retain
a copy of the completed Subscription Agreement for their records. The
subscription price is due and payable when the Subscription Agreement is
delivered. Payment must be made in United States dollars by cash or by check,
bank draft or money order drawn to the order of SunTrust Bank, Atlanta, Escrow
Account for Buckhead Community Bancorp, Inc., in the amount of $5.00 multiplied
by the number of shares subscribed for.
14
<PAGE>
USE OF PROCEEDS
By the Company
Upon satisfaction of all of the conditions discussed in "The Offering -
Conditions to the Offering and Release of Funds," 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 $7,700,000 and $12,000,000. The Company will use $40,000 of the gross
proceeds to pay the expenses of this offering, which will consist primarily of
legal, accounting, marketing and printing expenses. Thereafter, the Company
will use a minimum of $7,660,000 and a maximum of $10,000,000 of the gross
proceeds to purchase all of the capital stock of the Bank. The Company will
retain any balance of the proceeds, which may be up to $1,960,000 in the case
of the maximum offering, for working capital and other general corporate
purposes, including payment of expenses of the Company and the provision of
additional capital for the Bank in the future, if necessary.
The following table sets forth the anticipated use of proceeds by the
Company based on the sale of the minimum number and maximum number of shares in
this offering.
<TABLE>
<CAPTION>
Minimum Maximum
Offering (1) Offering (2)
------------ -------------
<S> <C> <C>
Gross proceeds from offering............................. $ 7,700,000 $ 12,000,000
Expenses for organization and issuance and............... (40,000) (40,000)
distribution of Common Stock
Investment in capital stock of the Bank(3)............... (7,660,000) (10,000,000)
------------ -------------
Remaining proceeds(4).................................... $ -- $ 1,960,000
============ =============
</TABLE>
- -----------------------
(1) Assumes that 1,540,000 shares of Common Stock are sold in this offering.
(2) Assumes that 2,400,000 shares of Common Stock are sold in this offering.
(3) To the extent that the net proceeds of the offering are less than
$8,000,000, the Company will invest a portion of its existing capital in
the Bank so that the Bank's initial capital is at least $8,000,000.
(4) This amount will be used by the Company for working capital and may be
used to provide additional capital for the Bank, if necessary.
By the Bank
The Bank currently plans to use approximately $250,000 of the proceeds it
receives from the sale of its stock to the Company to reimburse the Company for
amounts advanced by it to pay organizational and pre-opening expenses of the
Bank. Organizational expenses of the Bank, estimated at $125,000, include
consulting fees, expenses for market analysis and feasibility studies,
application fees, and legal fees and expenses. Pre-opening expenses, estimated
at $125,000, include officers' and employees' salaries and benefits estimated
at $50,000 (assuming the Bank opens for business on its target date of March
15, 1997). The Bank will use approximately $250,000 for furniture, fixtures
and equipment for its banking office. The Bank will pay approximately $120,000
a year to rent the property for the Bank site from 3379 Peachtree Ltd., which
is not affiliated with any of the Organizers. The balance of the proceeds to
be received by the Bank and available for use in the first year, estimated at
$7,380,000 if the minimum number of shares is sold and $9,380,000, if the
maximum
15
<PAGE>
number of shares is sold, will be used for loans to customers, investments, and
other general corporate purposes.
The following table depicts the anticipated use of proceeds by the Bank
based on the sale of the minimum number and maximum number of shares in the
offering. All proceeds received by the Bank will be in the form of an
investment by the Company in the Bank's capital stock.
<TABLE>
<CAPTION>
Minimum Maximum
Offering (1) Offering(2)
------------ -----------
<S> <C> <C>
Investment by the Company in the Bank's Capital Stock....... $ 8,000,000 $10,000,000
Reimbursement of the Company for amounts advanced for
organizational and pre-opening expenses of the Bank....... (250,000) (250,000)
Furniture, Fixtures and Equipment........................... (250,000) (250,000)
Lease Expense (First Year).................................. (120,000) (120,000)
Other Occupancy Expenses.................................... (57,000) (57,000)
------------ -----------
Remaining Proceeds(3)....................................... $ 7,323,000 $ 9,323,000
============ ===========
</TABLE>
- ----------------------------
(1) Assumes that 1,540,000 shares of Common Stock are sold in this offering.
(2) Assumes that 2,400,000 shares of Common Stock are sold in this offering.
(3) This amount is to be used by the Bank for loans to customers, investments,
and other general corporate purposes.
Although the amounts set forth above provide an indication of the proposed
use of funds based on the plans and estimates of the Organizers of the Company
and the Bank, actual expenses may vary from the estimates. The Organizers
believe that the estimated minimum net proceeds of $7,660,000 from the
offering, together with $340,000 of existing capital of the Company, will
satisfy the cash requirements of the Company and the Bank for their respective
first five years of operations and that neither the Company nor the Bank will
need to raise additional funds for operations during this period, but there can
be no assurance that this will be the case.
16
<PAGE>
CAPITALIZATION
The following table sets forth the capitalization of the Company as of
October 31, 1996, and the pro forma consolidated capitalization of the Company
and the Bank, as adjusted to give effect to the sale of the minimum of
1,540,000 shares in this offering. The Bank has established March 15, 1997, as
the target date for opening the Bank; accordingly, the "As Adjusted" column
reflects estimated pre-opening expenses of the Company and the Bank through
March 15, 1997.
<TABLE>
<CAPTION>
Shareholders' Equity October 31, 1996 As Adjusted
-------------------- ---------------- -----------
<S> <C> <C>
Common Stock, par value $.01 per share; 10,000,000 shares
authorized; 80,000 shares issued and outstanding; 1,620,000
shares issued and outstanding as adjusted (minimum
offering)......................................................... $ 800 $ 16,200
Special Stock, no par value per share; 1,000,000 shares
authorized; no shares issued and outstanding...................... -- --
Additional paid-in capital(1)....................................... 399,200 8,043,800
Deficit accumulated during the developmental stage.................. (10,123) (125,000)
----------- -----------
Total shareholders' equity(2)....................................... $ 389,877 $ 7,935,000
=========== ===========
</TABLE>
- -----------------------------
(1) The expenses of the offering will be charged against this account. These
expenses are estimated to be $40,000, and this amount has been used in
the calculation of the amount shown in the "As Adjusted" column.
(2) The shareholders are likely to experience additional dilution due to
operating losses expected to be incurred during the initial years of the
Bank's operations.
SELECTED FINANCIAL DATA
The following selected financial data for the Company for the period from
inception until October 31, 1996, is derived from the financial statements and
other data of the Company.
<TABLE>
<CAPTION>
Period Ended
October 31, 1996
-----------------
<S> <C>
Income Statement Data:
Noninterest expense $ 10,123
Net (loss) (10,123)
Balance Sheet Data:
Assets 433,513
Cash 385,700
Organizational costs capitalized 43,581
(Deficit) accumulated during development stage (10,123)
Stockholders' Equity 389,877
</TABLE>
DIVIDEND POLICY
The Board of Directors expects initially to follow a policy of retaining
any earnings to provide funds to operate and expand the business.
Consequently, it is unlikely that any cash dividends will be
17
<PAGE>
paid in the near future. The Company's ability to pay any cash dividends to its
shareholders in the future will depend primarily on the Bank's ability to pay
dividends to the Company. In order to pay dividends to the Company, the Bank
must comply with the requirements of all applicable laws and regulations. See
"Supervision and Regulation - The Bank - Dividends" and "Supervision and
Regulation - Capital Regulations." In addition to the availability of funds
from the Bank, the future dividend policy of the Company is subject to the
discretion of the Board of Directors and will depend upon a number of factors,
including future earnings, financial condition, cash needs, and general
business conditions.
PROPOSED BUSINESS
General
The Company was incorporated as a Georgia corporation on October 15, 1996,
primarily to own and control all of the capital stock of the Bank. The Company
initially will engage in no business other than owning and managing the Bank.
The Organizers have chosen a holding company structure under which the Company
will acquire all of the capital stock of the Bank because, in the judgment of
the Organizers, the holding company structure provides flexibility that would
not otherwise be available.
The holding company structure can assist the Bank in maintaining its
required capital ratios because, subject to compliance with Federal Reserve
Board debt guidelines, the Company may borrow money and contribute the proceeds
to the Bank as primary capital. Moreover, a holding company may engage in
certain non-banking activities that the Federal Reserve Board has deemed to be
closely related to banking in which the Bank cannot engage directly. See
"Supervision and Regulation." Although the Company has no present intention of
engaging in any of these activities, if circumstances should lead the Company's
management to believe that there is a need for these services in the Bank's
market area and that such activities could be profitably conducted, management
of the Company would have the flexibility of commencing these activities upon
filing a notice or application with the Federal Reserve.
The Bank is being organized as a national banking association under the
laws of the United States, and, subject to regulatory approval, the Bank will
engage in a commercial banking business from its location in the Buckhead Area,
with deposits insured by the FDIC. By virtue of being a national bank, the
Bank will be a member of the Federal Reserve System. The Bank may not commence
business until the OCC issues a charter for the Bank and the FDIC grants
deposit insurance to the Bank. There is no assurance that the Bank will be
successful in receiving regulatory approval and satisfying any conditions that
may be imposed upon the Bank by the OCC or the FDIC prior to the commencement
of its business.
Marketing Focus
Most of the banks in the Buckhead Area are local branches of large
regional banks. The Organizers believe that there is a void in the community
banking market in the Buckhead Area and believe that the Bank can successfully
fill this void. However, size gives the larger banks certain advantages in
competing for business from large corporations. These advantages include
higher lending limits and the ability to offer services in other areas of
Atlanta and the region. As a result, the Company generally will not attempt to
compete for the banking relationships of large corporations, but will
concentrate its efforts on small businesses and on professionals.
18
<PAGE>
The Bank plans to emphasize the Company's local ownership, community bank
nature and ability to provide more personalized service than its competition.
The Organizers believe that the proposed community bank focus of the Bank is
likely to succeed in the Buckhead market. The Organizers believe that the area
will react favorably to the Bank's emphasis on service to small businesses and
professionals. However, no assurances in this respect can be given.
Location and Service Area
The Bank will be located on Peachtree Road between Piedmont Road and Lenox
Square Mall. See "Facilities." The Bank will primarily serve the Buckhead
Area, which is in the northern part of the Atlanta City limits and the central
part of Fulton County.
The Buckhead Area is characterized by a large population base concentrated
in a relatively small area and a very high level of household and per capita
income. The resident population of the Buckhead Area exceeded 61,000 as of
1995, and its daytime population is at least twice that number. The two
largest sources of employment in Buckhead are the services and retail
industries. There is at least 12.5 million feet of office space in the
Buckhead Area, with very low vacancy rates in the "Class A" space market
segment. Much of this space is concentrated within two miles of the proposed
bank site on Peachtree Road.
Deposits
The Bank intends to offer a full range of deposit services that are
typically available in most banks and savings and loan associations, including
checking accounts, NOW accounts, savings accounts and other time deposits of
various types, ranging from daily money market accounts to longer-term
certificates of deposit. The transaction accounts and time certificates will
be tailored to the Bank's principal market area at rates competitive to those
offered in the Buckhead Area. In addition, the Bank intends to offer certain
retirement account services, such as Individual Retirement Accounts (IRAs).
All deposit accounts will be insured by the FDIC up to the maximum amount
allowed by law (generally, $100,000 per depositor subject to aggregation
rules). The Bank intends to solicit these accounts from individuals,
businesses, associations and organizations, and governmental authorities.
Lending Activities
General. The Bank intends to emphasize a range of lending services,
including commercial, real estate, and consumer loans, to small- to medium-sized
businesses and professional concerns and individuals that are located in or
conduct a substantial portion of their business in the Bank's market area.
Commercial Loans. The Organizers currently anticipate that loans for
commercial purposes in various lines of businesses will be one of the primary
components of the Bank's loan portfolio. Equipment loans will typically be made
for a term of five years or less at fixed or variable rates, with the loan fully
amortized over the term and secured by the financed equipment and with a
loan-to-value ratio of 80% or less. Working capital loans will typically have
terms not exceeding one year and will usually be secured by accounts receivable,
inventory, or personal guarantees of the principals of the business. For loans
secured by accounts receivable or inventory, principal will typically be repaid
as the assets securing the loan are converted into cash, and in other cases
principal will typically be due at maturity. The principal economic risk
associated with each category of anticipated loans, including
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commercial loans, is the creditworthiness of the Bank's borrowers. The risks
associated with commercial loans vary with many economic factors, including the
economy in the Buckhead Area. The well established banks in the Buckhead Area
will make proportionately more loans to medium- to large-sized businesses than
the Bank. Many of the Bank's anticipated commercial loans will likely be made
to small-to medium-sized businesses who may be less able to withstand
competitive, economic, and financial conditions than larger borrowers.
Real Estate Loans. The Bank will make commercial real estate loans,
construction and development loans, and residential real estate loans in the
Buckhead Area. These loans include certain commercial loans where the Bank takes
a security interest in real estate out of an abundance of caution and not as the
principal collateral for the loan, but will exclude home equity loans, which are
classified as consumer loans. Loan terms generally will be limited to five years
or less, although payments may be structured on a longer amortization basis.
Interest rates may be fixed or adjustable, and will more likely be fixed in the
case of shorter term loans. The Bank will generally charge an origination fee.
Management will attempt to reduce credit risk in the commercial real estate
portfolio by emphasizing loans on owner-occupied office and retail buildings
where the loan-to-value ratio, established by independent appraisals, does not
exceed 80%. In addition, the Bank may require personal guarantees of the
principal owners of the property backed with a review by the Bank of the
personal financial statements of the principal owners. The principal economic
risk associated with each category of anticipated loans, including real estate
loans, is the creditworthiness of the Bank's borrowers. The risks associated
with real estate loans vary with many economic factors, including employment
levels and fluctuations in the value of real estate. The Bank will compete for
real estate loans with a number of bank competitors which are well established
in the Buckhead Area. Most of these competitors have substantially greater
resources and lending limits than the Bank. As a result, the Bank may have to
charge lower interest rates to attract borrowers. See "Competition" below.
The Bank may also originate loans for sale into the secondary market. The
Bank intends to limit interest rate risk and credit risk on these loans by
locking the interest rate for each loan with the secondary investor and
receiving the investor's underwriting approval prior to originating the loan.
Consumer Loans. The Bank will make a variety of loans to individuals for
personal and household purposes, including secured and unsecured installment and
term loans, home equity loans and lines of credit, and revolving lines of credit
such as credit cards. These loans typically will carry balances of less than
$25,000 and, in the case of non-revolving loans, be amortized over a period not
exceeding 48 months or be ninety-day term loans, in each case bearing interest
at a fixed rate. The revolving loans will typically bear interest at a fixed
rate and require monthly payments of interest and a portion of the principal
balance. The underwriting criteria for home equity loans and lines of credit
will generally be the same as applied by the Bank when making a first mortgage
loan, as described above, and home equity lines of credit will typically expire
ten years or less after origination. As with the other categories of loans, the
principal economic risk associated with consumer loans is the creditworthiness
of the Bank's borrowers, and the principal competitors for consumer loans will
be the established banks in the Buckhead Area.
Loan Approval and Review. The Bank's loan approval policies will provide
for various levels of officer lending authority. When the amount of aggregate
loans to a single borrower exceeds that individual officer's lending authority,
the loan request will be considered and approved by an officer with a higher
lending limit or the officers' loan committee. The Bank will establish an
officers' loan committee that has lending limits, and any loan in excess of this
lending limit will be approved by the directors' loan committee. The Bank will
not make any loans to any director, officer, or employee of
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the Bank unless the loan is approved by the board of directors of the Bank and
is made on terms not more favorable to such person than would be available to a
person not affiliated with the Bank.
Lending Limits. The Bank's lending activities will be subject to a variety
of lending limits imposed by federal law. While differing limits apply in
certain circumstances based on the type of loan or the nature of the borrower
(including the borrower's relationship to the Bank), in general the Bank will be
subject to a loan-to-one-borrower limit of an amount equal to 15% of the Bank's
unimpaired capital and surplus, or 25% of the unimpaired capital and surplus if
the excess over 15% is approved by the board of directors of the Bank and is
fully secured by readily marketable collateral. Based on the proposed minimum
initial capitalization of the Bank and its projected pre-opening expenses, the
Bank's initial lending limit will be approximately $1,190,000 for loans not
fully secured plus an additional $794,000 (or an aggregate of approximately
$1,984,000) for loans for which the additional 10% is fully secured. The Bank
has not yet established any minimum or maximum loan limits other than the
statutory lending limits described above. These limits will increase or decrease
as the Bank's capital increases or decreases as a result of the Bank's earning
or losses, among other reasons. Unless the Bank is able to sell participations
in its loans to other financial institutions, the Bank will not be able to meet
all of the lending needs of loan customers requiring aggregate extensions of
credit above these limits.
Other Banking Services
Other anticipated bank services include cash management services, safe
deposit boxes, travelers checks, direct deposit of payroll and social security
checks, and automatic drafts for various accounts. The Bank plans to become
associated with a shared network of automated teller machines that may be used
by Bank customers throughout Georgia and other regions. The Bank plans to offer
annuities, mutual funds, and other financial services through a third party
which has not, as yet, been chosen by the Bank. The Bank also plans to offer
MasterCard and VISA credit card services through a correspondent bank as an
agent for the Bank. The Bank does not plan to exercise trust powers during its
initial years of operation. The Bank may in the future offer a full-service
trust department, but cannot do so without the prior approval of the OCC.
Competition
The banking business is highly competitive. The Bank will compete as a
financial intermediary with other commercial banks, savings and loan
associations, credit unions, and money market mutual funds operating in the
Atlanta area. As of August 1996, the Buckhead Area consisted of one credit union
and ten commercial banks with a total of thirty-two offices. A number of these
competitors are well established in the Buckhead Area. Most of them have
substantially greater resources and lending limits than the Bank and offer
certain services, such as extensive and established branch networks and trust
services, that the Bank either does not expect to provide or will not provide
initially. As a result of these competitive factors, the Bank may have to pay
higher rates of interest to attract deposits.
Facilities
The Company is presently negotiating a lease agreement with 3379 Peachtree
Ltd. for space located at 3379 Peachtree Road, N.E., Suite 100, Atlanta, Georgia
to house the Bank's office. The space has been used as a bank office previously.
The lease term will likely commenced on January 1,
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1997, and expire on December 31, 2001, with renewal rights. The property
includes approximately 5,312 square feet of office space. Annual rent for the
first year of the lease is approximately $120,000.
Employees
The Company anticipates that, upon commencement of operations, the Bank
will have approximately 13 full-time employees and 3 part-time employees. The
Company will not have any employees other than its officers, none whom will
initially receive any remuneration for their services to the Company. Donald
D. Thompson, the proposed President and Chief Executive officer of the Bank, is
currently employed by the Company to head the organizational effort for the
Bank. See "Management - Employment Agreement."
Legal Proceedings
There are no material legal proceedings to which the Company or the Bank
or any of their properties are subject.
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
As of October 31, 1996, the Company had total assets aggregating
approximately $433,513. These assets consisted principally of cash of
$385,700, organizational costs of $43,581, and $4,232 in deferred offering
expenses. The organizational costs relate to the organization of the Company
and the Bank and have been capitalized and will be amortized over a five year
period. The Company's liabilities at October 31, 1996, were $43,636, and
consisted of accounts payable and accrued expenses. The Company had
shareholder's equity of $389,877 at October 31, 1996.
The Company had a net loss from October 15, 1996 (the Company's inception
date), through October 31, 1996, of $10,123. This loss resulted from salary
and supply expenses incurred in support of activities related to the initial
organization of the Company and the Bank. These activities included (without
limitation) the preparation and filing of an application with the OCC for a
national bank charter and an application with the FDIC for federal deposit
insurance, and the preparation and filing of a registration statement for the
offering of the Common Stock.
Assuming that the offering is successfully completed, the Company's
initial activities will be devoted to organizing the Bank and opening and
commencing the business of the Bank. These organizational activities will
include completing all required steps for approval from the OCC for a national
bank charter; equipping the office of the Bank; hiring qualified personnel to
work in the various offices of the Bank; conducting public relations activities
on behalf of the Bank; developing prospective business contacts for the Bank
and the Company; and taking other actions necessary for a successful bank
opening.
Because the Company is in the organizational stage, it has had no
operations from which to generate revenues and, until the Bank opens for
business, the Company's only source of revenues will be interest earned on
subscriptions. Because these revenues will be less than the expenses incurred
in connection with activities related to the initial organization of the
Company and the Bank, the Company will incur a net loss through the date of the
opening of the Bank. In addition, the Company anticipates incurring continuing
operating losses during the Bank's early stages of operations.
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At least $7,660,000 of the proceeds of this offering will be used to
capitalize the Bank and any remainder will be used to pay organizational
expenses of the Company and provide working capital, including additional
capital for investment in the Bank, if needed. See "Use of Proceeds." The
Company believes that this amount will be sufficient to fund the activities of
the Bank in its initial stages of operation and that the Bank will generate
sufficient income from operations to fund its activities on an on-going basis
for at least five years. In addition, the Company believes that income from the
operations of the Bank will be sufficient to fund the activities of the Company
on an on-going basis for at least five years. However, there can be no assurance
that either the Bank or the Company will achieve any particular level of
profitability.
SUPERVISION AND REGULATION
The Company and the Bank are subject to state and federal banking laws and
regulations which impose specific requirements or restrictions on and provide
for general regulatory oversight with respect to virtually all aspects of
operations. These laws and regulations are generally intended to protect
depositors, not shareholders. To the extent that the following summary describes
statutory or regulatory provisions, it is qualified in its entirety by reference
to the particular statutory and regulatory provisions. Any change in applicable
laws or regulations may have a material effect on the business and prospects of
the Company. Beginning with the enactment of the Financial Institutions Reform,
Recovery and Enforcement Act of 1989 ("FIRREA") and following with FDICIA, which
was enacted in 1991, numerous additional regulatory requirements have been
placed on the banking industry in the past ten years, and additional changes
have been proposed. The operations of the Company and the Bank may be affected
by legislative changes and the policies of various regulatory authorities. The
Company is unable to predict the nature or the extent of the effect on its
business and earnings that fiscal or monetary policies, economic control, or new
federal or state legislation may have in the future.
The Company
Because it will own the outstanding capital stock of the Bank, the Company
will be a bank holding company within the meaning of the federal Bank Holding
Company Act of 1956 (the "BHCA") and the Georgia Financial Institutions Code
(the "Georgia Code"). The activities of the Company will also be governed by the
Glass-Steagall Act of 1933 (the "Glass-Steagall Act").
The BHCA. Under the BHCA, the Company will be subject to periodic
examination by the Federal Reserve and will be required to file periodic reports
of its operations and such additional information as the Federal Reserve may
require. The Company's activities are limited to managing or controlling banks,
furnishing services to or performing services for its subsidiaries, and engaging
in other activities that the Federal Reserve determines to be so closely related
to banking or managing or controlling banks as to be a proper incident thereto.
Investments, Control, and Activities. With certain limited exceptions, the
BHCA requires every bank holding company to obtain the prior approval of the
Federal Reserve before (i) acquiring substantially all the assets of any bank,
(ii) acquiring direct or indirect ownership or control of any voting shares of
any bank if after such acquisition it would own or control more than 5% of the
voting shares of such bank (unless it already owns or controls the majority of
such shares), or (iii) merging or consolidating with another bank holding
company.
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In addition, and subject to certain exceptions, the BHCA and the Change in
Bank Control Act, together with regulations thereunder, require Federal Reserve
approval (or, depending on the circumstances, no notice of disapproval) prior to
any person or company acquiring "control" of a bank holding company, such as the
Company. Control is conclusively presumed to exist if an individual or company
acquires 25% or more of any class of voting securities of the bank holding
company. Control is rebuttably presumed to exist if a person acquires 10% or
more but less than 25% of any class of voting securities and either the Company
has registered securities under Section 12 of the Exchange Act (which the
Company would likely be required to do with respect to the Common Stock once it
has more that 500 shareholders of record) or no other person will own a greater
percentage of that class of voting securities immediately after the transaction.
The regulations provide a procedure for challenge of the rebuttable control
presumption.
Under the BHCA, a bank holding company is generally prohibited from
engaging in, or acquiring direct or indirect control of more than 5% of the
voting shares of any company engaged in, nonbanking activities, unless the
Federal Reserve Board, by order or regulation, has found those activities to be
so closely related to banking or managing or controlling banks as to be a proper
incident thereto. Some of the activities that the Federal Reserve Board has
determined by regulation to be proper incidents to the business of a bank
holding company include making or servicing loans and certain types of leases,
engaging in approved insurance and discount brokerage activities, performing
qualifying data processing services, acting in certain circumstances as a
fiduciary or investment or financial adviser, owning savings associations, and
making investments in qualifying corporations or projects designed primarily to
promote community welfare.
The Federal Reserve Board will impose certain capital requirements on the
Company under the BHCA, including a minimum leverage ratio and a minimum ratio
of "qualifying" capital to risk-weighted assets. These requirements are
described below under "Capital Regulations." Subject to its capital requirements
and certain other restrictions, the Company will be able to borrow money to make
a capital contribution to the Bank, and such loans may be repaid from dividends
paid from the Bank to the Company (although the ability of the Bank to pay
dividends will be subject to regulatory restrictions as described below in "The
Bank - Dividends"). The Company will also be able to raise capital for
contribution to the Bank by issuing securities without having to receive
regulatory approval, subject to compliance with federal and state securities
laws.
Source of Strength; Cross-Guarantee. In accordance with Federal Reserve
Board policy, the Company is expected to act as a source of financial strength
to the Bank and to commit resources to support the Bank in circumstances in
which the Company might not otherwise do so. Under the BHCA, the Federal Reserve
Board may require a bank holding company to terminate any activity or relinquish
control of a nonbank subsidiary (other than a nonbank subsidiary of a bank) upon
the Federal Reserve Board's determination that such activity or control
constitutes a serious risk to the financial soundness or stability of any
subsidiary depository institution of the bank holding company. Further, federal
bank regulatory authorities have additional discretion to require a bank holding
company to divest itself of any bank or nonbank subsidiary if the agency
determines that divestiture may aid the depository institution's financial
condition.
The Georgia Code. All Georgia bank holding companies must register with
the Georgia Department under the Financial Institutions Code of Georgia (the
"Georgia Code"). A registered bank holding company must provide the Georgia
Department with information with respect to the financial conditions,
operations, management, and inter-company relationships of the holding company
and its subsidiaries. The Georgia Department may also require such other
information as is
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necessary to keep itself informed about whether the provisions of Georgia law
and the regulations and orders issued thereunder by the Georgia Department have
been complied with, and the Georgia Department may make examinations of any bank
holding company and its subsidiaries.
Under the Georgia Code, it is unlawful without the prior approval of the
Georgia Department (i) for any bank holding company to acquire direct or
indirect ownership or control of more than five percent of the voting shares of
any bank, (ii) for any bank holding company or subsidiary thereof, other than a
bank, to acquire all or substantially all of the assets of a bank, or (iii) for
any bank holding company to merge or consolidate with any other bank holding
company. It is also unlawful for any bank holding company to acquire direct or
indirect ownership or control of more than five percent of the voting shares of
any bank unless such bank has been in existence and continuously operating or
incorporated as a bank for a period of five years or more prior to the date of
application to the Georgia Department for approval of such acquisition. In
addition, in any such acquisition by an existing bank holding company, the
initial banking subsidiary of such bank holding company must have been
incorporated for not less than two years before the holding company can acquire
another bank.
The Georgia Code and federal law allow interstate banking by permitting
banking organizations in other states to acquire Georgia banking organizations.
As a result of these provisions, banking organizations in other states, most
significantly North Carolina, Florida, and Alabama, have entered the Georgia
market through acquisitions of Georgia institutions. Those acquisitions are
subject to federal and Georgia approval as described above.
Glass-Steagall Act. The Company will also be restricted in its activities
by the provisions of the Glass-Steagall Act, which will prohibit the Company
from owning subsidiaries that are engaged principally in the issue, flotation,
underwriting, public sale, or distribution of securities. The interpretation,
scope, and application of the provisions of the Glass-Steagall Act currently are
being considered and reviewed by regulators and legislators, and the
interpretation and application of those provisions have been challenged in the
federal courts.
The Bank
General. Subject to receipt of the necessary approvals of its pending
applications, the Bank will operate as a national banking association
incorporated under the laws of the United States and subject to examination by
the OCC. Deposits in the Bank will be insured by the FDIC up to a maximum amount
(generally $100,000 per depositor, subject to aggregation rules). The OCC and
the FDIC will regulate or monitor virtually all areas of the Bank's operations,
including security devices and procedures, adequacy of capitalization and loss
reserves, loans, investments, borrowings, deposits, mergers, issuances of
securities, payment of dividends, interest rates payable on deposits, interest
rates or fees chargeable on loans, establishment of branches, corporate
reorganizations, maintenance of books and records, and adequacy of staff
training to carry on safe lending and deposit gathering practices. The OCC will
require the Bank to maintain certain capital ratios and will impose limitations
on the Bank's aggregate investment in real estate, bank premises, and furniture
and fixtures. The Bank will be required by the OCC to prepare quarterly reports
on the Bank's financial condition and to conduct an annual audit of its
financial affairs in compliance with minimum standards and procedures prescribed
by the OCC.
All insured institutions must undergo regular on-site examinations by
their appropriate banking agency. The cost of examinations of insured depository
institutions and any affiliates may be
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assessed by the appropriate agency against each institution or affiliate as it
deems necessary or appropriate. Insured institutions are required to submit
annual reports to the FDIC and the appropriate agency (and state supervisor when
applicable). The federal banking regulatory agencies have established regulatory
standards for all insured depository institutions and depository institution
holding companies relating, among other things, to: (i) internal controls,
information systems, and audit systems; (ii) loan documentation; (iii) credit
underwriting; (iv) interest rate risk exposure; and (v) asset quality.
National banks and their holding companies which have been chartered or
registered or undergone a change in control within the past two years or which
have been deemed by the OCC or the Federal Reserve Board, respectively, to be
troubled institutions must give the OCC or the Federal Reserve Board,
respectively, thirty days prior notice of the appointment of any senior
executive officer or director. Within the thirty day period, the OCC or the
Federal Reserve Board, as the case may be, may approve or disapprove any such
appointment. The Company and the Bank will meet the criteria which trigger this
additional approval during the first two years after they are registered or
chartered, respectively.
Deposit Insurance. The FDIC establishes rates for the payment of premiums
by federally insured banks and thrifts for deposit insurance. A separate Bank
Insurance Fund ("BIF") and Savings Association Insurance Fund ("SAIF") are
maintained for commercial banks and thrifts, respectively, with insurance
premiums from the industry used to offset losses from insurance payouts when
banks and thrifts fail. Insured depository institutions like the Bank pay for
deposit insurance under a risk-based premium system. Under legislation enacted
in September 1996, insured banks and thrifts may also pay a special assessment
beginning in 1997 to retire certain debt obligations arising out of the savings
and loan failures of the 1980's. Under the premium system, a depositor
institution pays to BIF or SAIF ranging from almost zero to $.27 per $100 of
insured deposits depending on its capital levels and risk profile, as determined
by its primary federal regulator on a semi-annual basis. During its initial
months of operations, it is likely that the Bank's assessment rate will be $.07
per $100 of insured deposits. Increases in deposit insurance premiums will
increase the Bank's cost of funds, and there can be no assurance that such cost
can be passed on to the Bank's customers.
Transactions With Affiliates and Insiders. The Bank is subject to the
provisions of Section 23A of the Federal Reserve Act, which place limits on the
amount of loans or extensions of credit to, or investments in, or certain other
transactions with, affiliates and on the amount of advances to third parties
collateralized by the securities or obligations of affiliates. The aggregate of
all covered transactions is limited in amount, as to any one affiliate, to 10%
of the bank's capital and surplus and, as to all affiliates combined, to 20% of
the bank's capital and surplus. Furthermore, within the foregoing limitations as
to amount, each covered transaction must meet specified collateral requirements.
Compliance is also required with certain provisions designed to avoid the taking
of low quality assets.
The Bank is also subject to the provisions of Section 23B of the Federal
Reserve Act which, among other things, prohibit an institution from engaging in
certain transactions with certain affiliates unless the transactions are on
terms substantially the same, or at least as favorable to such institution or
its subsidiaries, as those prevailing at the time for comparable transactions
with non-affiliated companies. The Bank is subject to certain restrictions on
extensions of credit to executive officers, directors, certain principal
shareholders, and their related interests. Such extensions of credit (i) must be
made on substantially the same terms, including interest rates and collateral,
as those prevailing at
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the time for comparable transactions with third parties and (ii) must not
involve more than the normal risk of repayment or present other unfavorable
features.
Dividends. A national bank may not pay dividends from its capital. All
dividends must be paid out of undivided profits then on hand, after deducting
expenses, including reserves for losses and bad debts. In addition, a national
bank is prohibited from declaring a dividend on its shares of common stock until
its surplus equals its stated capital, unless there has been transferred to
surplus no less than one-tenth of the bank's net profits of the preceding two
consecutive half-year periods (in the case of an annual dividend). The approval
of the OCC is required if the total of all dividends declared by a national bank
in any calendar year exceeds the total of its net profits for that year combined
with its retained net profits for the preceding two years, less any required
transfers to surplus.
The OCC has promulgated regulations that became effective on December 13,
1990, which significantly affect the level of allowable dividend payments for
national banks. The effect is to make the calculation of national banks'
dividend-paying capacity consistent with generally accepted accounting
principles. In this regard, the allowance for loan and lease losses will not be
considered an element of either "undivided profits then on hand" or "net
profits." Further, a national bank may be able to use a portion of its capital
surplus account as "undivided profits then on hand," depending on the
composition of that account. In addition, under FDICIA, the Bank may not pay a
dividend if, after paying the dividend, the Bank would be undercapitalized. See
"Capital Regulations" below.
Branching. National banks are required by the National Bank Act to adhere
to branch office banking laws applicable to state banks in the states in which
they are located. Under current Georgia law, the Bank may establish branches
throughout Fulton and DeKalb counties with the prior approval of the OCC, and
may establish up to three branches in additional counties with the prior
approval of the OCC. After July 1, 1998, the Bank will be permitted to establish
branches throughout Georgia with the prior approval of the OCC. With prior
regulatory approval, the Company will be able to acquire other existing banking
operations in Georgia once the Bank has been incorporated for 24 months.
Furthermore, federal law permits out of state acquisitions by bank holding
companies, interstate merging by banks (subject to veto by new state law), and
de novo branching by banks if allowed by state law. These branching powers may
result in an increase in the number of competitors in the Bank's market,
although to date they have tended to trigger consolidations in the market. The
Organizers believe the Bank can compete effectively in the market despite any
impact of these branching powers, but there can be no assurance that future
competitive developments will not impact the Bank's ability to compete
effectively. The Organizers currently have no plans or agreements whereby the
Bank would acquire other banks or thrifts.
Community Reinvestment Act. The Community Reinvestment Act requires that,
in connection with examinations of financial institutions within their
respective jurisdictions, the federal bank regulatory authorities evaluate the
record of the financial institutions in meeting the credit needs of their local
communities, including low and moderate income neighborhoods, consistent with
the safe and sound operation of those institutions. These factors are also
considered in evaluating mergers, acquisitions, and applications to open a
branch or facility.
Other Regulations. Interest and certain other charges collected or
contracted for by the Bank are subject to state usury laws and certain federal
laws concerning interest rates. The Bank's loan operations are also subject to
certain federal laws applicable to credit transactions, such as the federal
Truth-In-Lending Act, governing disclosures of credit terms to consumer
borrowers; the Home Mortgage Disclosure Act of 1975, requiring financial
institutions to provide information to enable the
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public and public officials to determine whether a financial institution will be
fulfilling its obligation to help meet the housing needs of the community it
serves; the Equal Credit Opportunity Act, prohibiting discrimination on the
basis of race, creed or other prohibited factors in extending credit; the Fair
Credit Reporting Act of 1978, governing the use and provision of information to
credit reporting agencies; the Fair Debt Collection Act, governing the manner in
which consumer debts may be collected by collection agencies; and the rules and
regulations of the various federal agencies charged with the responsibility of
implementing such federal laws. The deposit operations of the Bank also are
subject to the Right to Financial Privacy Act, which imposes a duty to maintain
confidentiality of consumer financial records and prescribes procedures for
complying with administrative subpoenas of financial records, and the Electronic
Funds Transfer Act and Regulation E issued by the Federal Reserve Board to
implement that act, which governs automatic deposits to and withdrawals from
deposit accounts and customers' rights and liabilities arising from the use of
automated teller machines and other electronic banking services.
Capital Regulations
The federal bank regulatory authorities have adopted risk-based capital
guidelines for banks and bank holding companies that are designed to make
regulatory capital requirements more sensitive to differences in risk profiles
among banks and bank holding companies and account for off-balance sheet items.
The guidelines are minimums, and the federal regulators have noted that banks
and bank holding companies contemplating significant expansion programs should
not allow expansion to diminish their capital ratios and should maintain in
excess of the minimums. Neither the Company nor the Bank has received any notice
indicating that either entity will be subject to higher capital requirements.
The current guidelines require all bank holding companies and federally-
regulated banks to maintain a minimum risk-based total capital ratio equal to
8%, of which at least 4% must be Tier 1 capital. Tier 1 capital includes common
shareholders' equity, qualifying perpetual preferred stock, and minority
interests in equity accounts of consolidated subsidiaries, but excludes goodwill
and most other intangibles and excludes the allowance for loan and lease losses.
Tier 2 capital includes the excess of any preferred stock not included in Tier 1
capital, mandatory convertible securities, hybrid capital instruments,
subordinated debt and intermediate term-preferred stock, and general reserves
for loan and lease losses up to 1.25% of risk-weighted assets.
Under these guidelines, banks' and bank holding companies' assets are
given risk-weights of 0%, 20%, 50%, or 100%. In addition, certain off-balance
sheet items are given credit conversion factors to convert them to asset
equivalent amounts to which an appropriate risk-weight will apply. These
computations result in the total risk-weighted assets. Most loans are assigned
to the 100% risk category, except for first mortgage loans fully secured by
residential property and, under certain circumstances, residential construction
loans, both of which carry a 50% rating. Most investment securities are assigned
to the 20% category, except for municipal or state revenue bonds, which have a
50% rating, and direct obligations of or obligations guaranteed by the United
States Treasury or United States Government agencies, which have a 0% rating.
The federal bank regulatory authorities have also implemented a leverage
ratio, which is equal to Tier 1 capital as a percentage of average total assets
less intangibles, to be used as a supplement to the risk-based guidelines. The
principal objective of the leverage ratio is to place a constraint on the
maximum degree to which a bank holding company may leverage its equity capital
base. The minimum required leverage ratio for top-rated institutions is 3%, but
most institutions are required to maintain an additional cushion of at least 100
to 200 basis points.
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FDICIA established a new capital-based regulatory scheme designed to
promote early intervention for troubled banks and requires the FDIC to choose
the least expensive resolution of bank failures. The new capital-based
regulatory framework contains five categories of compliance with regulatory
capital requirements, including "well capitalized," "adequately capitalized,"
"undercapitalized," "significantly undercapitalized," and "critically
undercapitalized." To qualify as a "well capitalized" institution, a bank must
have a leverage ratio of no less than 5%, a Tier 1 risk-based ratio of no less
than 6%, and a total risk-based capital ratio of no less than 10%, and the bank
must not be under any order or directive from the appropriate regulatory agency
to meet and maintain a specific capital level. Initially, the Organizers
expect the Bank to qualify as "well-capitalized."
Under the FDICIA regulations, the applicable agency can treat an
institution as if it were in the next lower category if the agency determines
(after notice and an opportunity for hearing) that the institution is in an
unsafe or unsound condition or is engaging in an unsafe or unsound practice.
The degree of regulatory scrutiny of a financial institution will increase, and
the permissible activities of the institution will decrease, as it moves
downward through the capital categories. Institutions that fall into one of
the three undercapitalized categories may be required to (i) submit a capital
restoration plan; (ii) raise additional capital; (iii) restrict their growth,
deposit interest rates, and other activities; (iv) improve their management;
(v) eliminate management fees; or (vi) divest themselves of all or a part of
their operations. Bank holding companies controlling financial institutions
can be called upon to boost the institutions' capital and to partially
guarantee the institutions' performance under their capital restoration plans.
These capital guidelines can affect the Company in several ways. After
completion of this offering, the Company's capital levels will initially be
more than adequate. However, rapid growth, poor loan portfolio performance, or
poor earnings performance, or a combination of these factors, could change the
Company's capital position in a relatively short period of time, making an
additional capital infusion necessary.
FDICIA requires the federal banking regulators to revise the risk-based
capital standards to provide for explicit consideration of interest-rate risk,
concentration of credit risk, and the risks of non-traditional activities. It
is uncertain what affect these regulations, when implemented, would have on the
Company and the Bank.
Failure to meet these capital requirements would mean that a bank would be
required to develop and file a plan with its primary federal banking regulator
describing the means and a schedule for achieving the minimum capital
requirements. In addition, such a bank would generally not receive regulatory
approval of any application that requires the consideration of capital
adequacy, such as a branch or merger application, unless the bank could
demonstrate a reasonable plan to meet the capital requirement within a
reasonable period of time.
Enforcement Powers
FIRREA expanded and increased civil and criminal penalties available for
use by the federal regulatory agencies against depository institutions and
certain "institution-affiliated parties" (primarily including management,
employees, and agents of a financial institution, independent contractors such
as attorneys and accountants and others who participate in the conduct of the
financial institution's affairs). These practices can include the failure of
an institution to timely file required reports or the filing of false or
misleading information or the submission of inaccurate reports. Civil
penalties may be as high as $1,000,000 a day for such violations. Criminal
penalties for some financial institution
29
<PAGE>
crimes have been increased to twenty years. In addition, regulators are
provided with greater flexibility to commence enforcement actions against
institutions and institution-affiliated parties. Possible enforcement actions
include the termination of deposit insurance. Furthermore, FIRREA expanded the
appropriate banking agencies' power to issue cease and desist orders that may,
among other things, require affirmative action to correct any harm resulting
from a violation or practice, including restitution, reimbursement,
indemnifications or guarantees against loss. A financial institution may also
be ordered to restrict its growth, dispose of certain assets, rescind
agreements or contracts, or take other actions as determined by the ordering
agency to be appropriate.
Future Legislative Developments
From time to time, various bills are introduced in the United States
Congress with respect to the regulation of financial institutions. Certain of
these proposals, if adopted, could significantly change the regulation of banks
and the financial services industry. The Company cannot predict whether any of
these proposals will be adopted or, if adopted, how these proposals would
affect the Company.
Effect of Governmental Monetary Policies
The earnings of the Bank will be affected by domestic economic conditions
and the monetary and fiscal policies of the United States government and its
agencies. The Federal Reserve Board's monetary policies have had, and will
likely continue to have, an important impact on the operating results of
commercial banks through its power to implement national monetary policy in
order, among other things, to curb inflation or combat a recession. The
monetary policies of the Federal Reserve Board have major effects upon the
levels of bank loans, investments and deposits through its open market
operations in United States government securities and through its regulation of
the discount rate on borrowings of member banks and the reserve requirements
against member bank deposits. It is not possible to predict the nature or
impact of future changes in monetary and fiscal policies.
30
<PAGE>
MANAGEMENT
General
The following table sets forth the respective names, ages, positions with
the Company and the Bank, and anticipated subscriptions of the Organizers. The
Organizers may elect to purchase more than the shares indicated below.
<TABLE>
<CAPTION>
Existing Total Share Percentage of Percentage of
Position With Share Anticipated Ownership Outstanding Outstanding
Name Company/Bank Ownership Subscription(1) Post-Offering Minimum(2) Maximum(3)
---- ------------ --------- --------------- ------------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Hugh C. Aldredge Director 10,000 90,000 100,000 6.2% 4.0%
F. James Funk, Jr., M.D. Director 10,000 90,000 100,000 6.2% 4.0%
J. Rex Fuqua Director 10,000 90,000 100,000 6.2% 4.0%
Julian LeCraw Sr. Director 10,000 90,000 100,000 6.2% 4.0%
R. Charles Loudermilk, Sr. Director 10,000 190,000 200,000 12.3% 8.1%
Larry P. Martindale Director 10,000 90,000 100,000 6.2% 4.0%
Donald D. Thompson Director, 10,000 90,000 100,000 6.2% 4.0%
President and
Chief
Executive
Officer
William T. Towles Director 10,000 90,000 100,000 6.2% 4.0%
------ ------- ------- ---- ----
TOTAL 80,000 820,000 900,000 55.6% 36.3%
- ---------------
</TABLE>
(1) All of such purchases will be at a price of $5.00 per share, the same price
at which shares are being offered to the public. Organizers may purchase up
to 100% of the shares in the offering if necessary for the Company to
achieve the minimum capital requirement and also may decide to purchase
additional shares in the offering even if the minimum offering is fully
subscribed. 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. Although each Organizer has agreed with the
other Organizers that he will subscribe for the number of shares indicated
above, neither the Organizers nor any other subscriber will be obligated to
purchase shares except pursuant to a valid subscription agreement executed
after receipt of this Prospectus. This table includes shares which are
expected to be beneficially owned by the Organizers upon completion of the
offering.
(2) Assumes that the minimum number of 1,540,000 shares are sold in this
offering.
(3) Assumes that the maximum number of 2,400,000 shares are sold in this
offering.
All of the Organizers will serve as directors of the Company and the Bank.
Biographical information concerning the Organizers is set forth below.
Hugh C. Aldredge has over 45 years of experience in real estate
development, management and finance. Since 1950, he has been the owner of
Aldredge Properties, a real estate investment concern, and since 1967 he has
been President of Squire Inn, Inc., a hotel investment and management
31
<PAGE>
corporation. He received his BBA degree in Marketing in 1949 from The
University of Georgia University. He is a member and serves on the
Administrative Board of Northside United Methodist Church. He is a member of
the Board of Directors and past President of the Atlanta Country Club, and a
member of the Atlanta Classic Foundation, a charitable organization which
raises money through celebrity golf tournaments. He is a past member of the
Sandy Springs Revitalization Committee.
F. James Funk, Jr., M.D. has practiced orthopedic surgery for over 43
years. He received his A.B. degree in Chemistry in 1941 from Emory University
and his M.D. degree in 1944 from Emory University School of Medicine. He is
past President of the Georgia Orthopedic Society, the Atlanta Orthopedic
Society, the Atlanta Chapter of the Arthritis Foundation and Peachtree
Orthopedic Clinic. He was a director of The Buckhead Bank and Chattahoochee
Bank from 1983 to 1994. Dr. Funk is a member of Northside Methodist Church,
Cherokee Town and County Club, the Georgia State Medical Board and the Piedmont
Driving Club.
J. Rex Fuqua is President and Chief Executive Officer of Fuqua Capital
Corporation, a private investment and money management firm, a position he has
held since 1988. From 1982 to 1988 he was President of Signet Capital, Inc.,
and from 1979 to 1982 he was President of Signet Communications Company. Prior
to that, he was President of Fuqua National, Inc. for five years. He received
his BBA degree in Finance in 1972 from The University of Georgia and his
Masters Degree in Clinical Psychology from the California School of
Professional Psychology. He is a director of Fuqua Enterprises, Inc., Aaron
Rents, Inc., and FNB Bancshares, Inc., Lakeland, Georgia, which is the holding
company for Farmers & Merchant's Bank, Lakeland, Georgia and The United Banking
Company, Nashville, Georgia. From 1974 to 1976 he was Director of First Georgia
Bank, Atlanta, Georgia.
He is a member of the Board of Trustees of Duke University, the Board of
Trustees of Duke University Graduate Business School, a former Trustee of The
Westminster School in Atlanta, Georgia, and is a Trustee of the Heritage School
in Newnan, Georgia. He is a member of the Board of Counselors of The Carter
Center, a Director of Camp Sunshine, and a member of the Board of Trustees, and
former Chairman, of the Atlanta Botanical Garden.
Julian LeCraw, Sr. has been the owner and principal of Julian LeCraw &
Company, a real estate development and management firm, since 1955. He received
his B.S. degree in Industrial Management in 1952 from the Georgia Institute of
Technology and a L.L.B. degree in 1958 from the Woodrow Wilson School of Law.
From 1983 to 1994, he served as a director of First National Bank of Cobb
County and, following its acquisition by Barnett Bank, of Barnett Bank in
Atlanta, where he also served as a member of the Problem Loan Committee. He is
a former Chairman of the Buckhead Coalition, Vice President of Georgia Tech
Foundation, Inc., a member of the Board of Trustees of The Westminster School
in Atlanta, Georgia, and an Elder of North Avenue Presbyterian Church.
R. Charles Loudermilk, Sr. is the founder, Chairman and Chief Executive
Officer of Aaron Rents, Inc., one of the leading furniture rental and sales
companies in the United States. He received his B.S. degree in Commerce in 1950
from The University of North Carolina. From 1985 to 1994 he served as director
and a member of the Executive Committee of The Buckhead Bank and The
Chattahoochee Bank.
He is Founder and past Chairman of the Buckhead Coalition, a member of the
Board of Directors of the Corporation for Olympic Development in Atlanta
(CODA), a member of the Board
32
<PAGE>
of Visitors of the University of North Carolina and a member of the Rotary Club
of Atlanta, the Atlanta Action Forum and the Executive Committee of the Atlanta
Convention and Visitors Bureau's Board of Directors. He has served on the
Piedmont Hospital Foundation Board, the Shepherd's Spinal Center Steering
Committee and the Archbold Hospital Foundation in Thomasville, Georgia. He is
former President of the National Rental Service Association, former Chairman of
the Board of Directors of the Metropolitan Atlanta Rapid Transit Authority
(MARTA), former Co-Chairman of Andrew Young's Atlanta mayoral campaigns in 1981
and 1985, and is Treasurer of Guy Milner's United States Senate campaign. He is
Chairman of the Buckhead Club, and a member of the Commerce Club, the Capital
City Club and the Piedmont Driving Club.
Larry P. Martindale has been Vice Chairman of Ritz-Carlton Hotel Company
for over 20 years. He received his B.S. degree in Business Administration in
1969 from the University of Mississippi. He is a member of the Foundation Board
of the University of Mississippi, the Board of Directors of the Atlanta Country
Club and the Board of Directors of Junior Achievement. He is a member of Holy
Innocence's Episcopal Church.
Donald D. Thompson is the proposed President and Chief Executive Officer of
the Bank. He received his B.S. degree in 1959 from the United States Naval
Academy. He is a graduate the Stonier Graduate School of Bank Management at
Rutgers University. He is also a graduate of the ABA Commercial Lending School
and the ABA Consumer Compliance School. From 1986 until October 15, 1996, he
served as President and Chief Executive Officer of Farmers and Merchants Bank
in LaFayette, Alabama. From 1982 to 1986 he was Executive Vice President and a
Director of Peoples Bank in Carrollton, Georgia and its holding company, where
he served as a member of the Executive, Finance, Investment and Trust
Committees. From 1969 to 1981, he served as Executive Vice President and Chief
Executive Officer of Forsyth County Bank in Cumming, Georgia. From 1963 to 1968
he held various positions with Georgia Railroad Bank in Augusta, Georgia.
Mr. Thompson has been active in civic, social and church activities
throughout his career. In LaFayette, he was Chairman of Industrial Development
Board, President of the Chamber of Commerce and a member of the Rotary Club.
In Cumming, he was Chairman of the local Hospital Authority, President of the
Chamber of Commerce and a member of the Rotary Club. He has served on the
Administrative Board of the First United Methodist Church in LaFayette,
Alabama.
William T. Towles is a builder, developer, manager and investor in
apartments, shopping centers and other real estate projects. He received his
B.S. degree in Architecture in 1950 from the Georgia Institute of Technology.
He is a former member of the Advisory Board of Shepherd's Spinal Center, a
former Trustee of the Georgia Tech Alumni Association, a former Chairman of the
Board of Trustees of St. James United Methodist Church, and a member of the
Randolph Macon Parents Council. He is a member of the Georgia Tech Athletic
Hall of Fame and a former Director of the Peachtree Golf Club.
Employment Agreement
Donald D. Thompson and the Company entered into an Employment Agreement
pursuant to which Mr. Thompson is the President and Chief Executive Officer of
the Company and will serve as the President and Chief Executive Officer of the
Bank. The Employment Agreement provides for a starting salary of $45,000 per
annum until the date the Bank opens and $90,000 per annum thereafter. Mr.
Thompson will be eligible to participate in all retirement, welfare and other
benefit plans or programs of the Company applicable generally to employees of
the Company or to a class of
33
<PAGE>
employees that includes senior executives of the Company. The Employment
Agreement requires that the Company provide Mr. Thompson with a term life
insurance policy providing for death benefits totaling $250,000. In addition,
the Company will provide Mr. Thompson with an automobile, pay the reasonable
costs and expenses of Mr. Thompson's attendance each year at the annual
meetings of certain banking trade associations, pay the reasonable annual dues
and membership fees for membership in civic, business and social organizations
or clubs, and reimburse Mr. Thompson for reasonable travel and other expenses
related to his position with the Company and the Bank.
The Employment Agreement is terminable by either party upon 60 days notice
and is terminable by the Company or the Bank immediately for cause (as defined
in the Employment Agreement) or if the effort to organize the Bank is
abandoned. During the term of his employment with the Company and the Bank and
for a period of three years thereafter, Mr. Thompson may not, without prior
written consent of the Company, (i) serve as a director, officer at the vice
president level or higher, or organizer or promoter of, or provide executive
management services to, any bank, savings bank, trust company bank and trust
company, savings and loan association or other financial institution or holding
company thereof located or conducting business in Fulton County, Georgia, (ii)
solicit any Major Customer for the purpose of providing banking services to the
Major Customer, or (iii) solicit any employee of the Bank for employment by any
other party. "Major Customer" as used in the Employment Agreement means any
customer of the Bank that any individual employed by the Company or the Bank
has contacted, negotiated with, or performed any services on behalf of, during
the term of the Employment Agreement or the preceding two years, whichever is
shorter, and that has maintained or purchased from the Bank at any time during
such period deposits, mutual funds or other investments in excess of $100,000.
Director Compensation
The Organizers do not intend for the Company or the Bank to pay directors'
fees in the initial years of operation.
Interests of Management and Others in Certain Transactions
The Company has leased temporary furniture from Aaron Rents, Inc., a
public company affiliated with Mr. Loudermilk, for use during its effort to
organize the Bank. The rental rate, which is approximately $670 per month, and
other terms of the lease are no less favorable to the Company than those
available from other sources. The Organizers have entered into an agreement
with Malcolm Garland & Company to assist it in the organization of the Company
and the Bank in return for a fee of $32,500.
The Company and the Bank may have banking and other transactions in the
ordinary course of business with Organizers, directors, and officers of the
Company and the Bank and their affiliates, including members of their families
or corporations, partnerships, or other organizations in which such Organizers,
officers, or directors have a controlling interest, on substantially the same
terms (including price, or interest rates and collateral) as those prevailing
at the time for comparable transactions with unrelated parties. Such
transactions are not expected to involve more than the normal risk of
collectability nor present other unfavorable features to the Company and the
Bank. The Bank is subject to a limit on the aggregate amount it could lend to
its and the Company's directors and officers as a group equal to its unimpaired
capital and surplus (or, under a regulatory exemption available to banks with
less than $100 million in deposits, twice that amount), loans to individual
directors and officers must also comply with the Bank's lending policies and
statutory
34
<PAGE>
lending limits, and directors with a personal interest in any loan application
will be excluded from the consideration of such loan application.
Exculpation and Indemnification
The Articles of Incorporation of the Company contain a conditional
provision which, subject to certain exceptions described below, eliminates the
liability of a director to the Company or its shareholders for monetary damages
for any breach of duty as a director. This provision does not eliminate such
liability to the extent the director (i) appropriated, in violation of his
duties, any business opportunity of the Company, (ii) engaged in willful
misconduct or a knowing violation of law, (iii) permitted any unlawful
distribution, or (iv) derived an improper personal benefit.
The Bylaws of the Company require the Company to indemnify any person who
was, is, or is threatened to be made defendant or respondent in any threatened,
pending, or completed action, suit, or proceeding, whether civil, criminal,
administrative, or investigative, by reason of service by such person as a
director of the Company or the Bank or any other corporation which he served as
such at the request of the Company. Except as noted in the next paragraph,
directors are entitled to be indemnified against judgments, penalties, fines,
settlements, and reasonable expenses actually incurred by the director in
connection with the proceeding. Directors are also entitled to have the
Company advance any such expenses prior to final disposition of the proceeding,
upon delivery of a written affirmation by the director of his good faith belief
that the standard of conduct necessary for indemnification has been met and a
written undertaking to repay the amounts advanced if it is ultimately
determined that the standard of conduct has not been met.
Under the Bylaws, indemnification will be disallowed if it is established
that the director (i) appropriated, in violation of his duties, any business
opportunity of the Company, (ii) engaged in willful misconduct or a knowing
violation of law, (iii) permitted any unlawful distribution, or (iv) derived an
improper personal benefit. In addition to the Bylaws of the Company, Section
18-2-852 of the Georgia Business Corporation Act (the "Corporate Code")
requires that a corporation indemnify a director "who was wholly successful, on
the merits or otherwise, in the defense of any proceeding to which he or she
was a party because he or she was a director of the corporation against
reasonable expenses incurred by the director in connection with the
proceeding." The Corporate Code also provides that upon application of a
director a court may order indemnification if it determines that the director
is entitled to such indemnification under the applicable standard of the
Corporate Code.
The Board of Directors also has the authority to extend to officers,
employees, and agents the same indemnification rights held by directors,
subject to all of the accompanying conditions and obligations. The Board of
Directors has extended or intends to extend indemnification rights to all of
its executive officers. The Company intends to enter into indemnity agreements
with its directors and officers.
DESCRIPTION OF CAPITAL STOCK OF THE COMPANY
General
The authorized capital stock of the Company consists of 10,000,000 shares
of Common Stock, par value $.01 per share, and 1,000,000 shares of Special
Stock, no par value per share (the "Special Stock"). The following summary
describes the Company's capital stock. Reference is made to the
35
<PAGE>
Articles of Incorporation of the Company, which are filed as an exhibit to the
Registration Statement of which this Prospectus forms a part, for a detailed
description of the provisions thereof summarized below.
Common Stock
Holders of shares of the Common Stock are entitled to receive such
dividends as may from time to time be declared by the Board of Directors out of
funds legally available therefor. The Company does not plan to declare any
dividends in the immediate future. See "Dividend Policy." Holders of Common
Stock are entitled to one vote per share on all matters on which the holders of
Common Stock are entitled to vote and do not have any cumulative voting rights.
Holders of Common Stock have no preemptive, conversion, redemption or sinking
fund rights. In the event of a liquidation, dissolution or winding-up of the
Company, holders of Common Stock are entitled to share equally and ratably in
the assets of the Company, if any, remaining after the payment of all debts and
liabilities of the Company and the liquidation preference of any outstanding
Special Stock. The outstanding shares of Common Stock are, and the shares of
Common Stock offered by the Company hereby when issued will be, fully paid and
nonassessable. The rights, preferences and privileges of holders of Common
Stock are subject to any classes or series of Special Stock that the Company
may issue in the future.
There currently is no market for the shares, and, although the Company has
filed a registration statement with the SEC to register the issuance of the
Common Stock in the offering under the Securities Act of 1933, it is not likely
that any trading market will develop for the shares in the future. There are
no present plans for the Common Stock to be traded on any stock exchange or in
the over-the-counter market.
Special Stock
The Articles provide that the Board of Directors is authorized, without
further action by the holders of the Common Stock, to provide for the issuance
of shares of the Special Stock in one or more classes or series and to fix the
preferences, limitations, and relative rights thereof, and to fix the number of
shares to be included in any such classes or series. Any Special Stock so
issued may rank senior to the Common Stock with respect to the payment of
dividends or amounts upon liquidation, dissolution or winding-up, or both. In
addition, any such shares of Special Stock may have class or series voting
rights. Upon completion of this offering, the Company will not have any shares
of Special Stock outstanding. Issuances of Special Stock, while providing the
Company with flexibility in connection with general corporate purposes, may,
among other things, have an adverse effect on the rights of holders of Common
Stock, and in certain circumstances such issuances could have the effect of
decreasing the market price of the Common Stock. The Company has no present
plan to issue any shares of Special Stock.
Certain Antitakeover Effects
The provisions of the Articles, the Bylaws and the Corporation Act
summarized in the following paragraphs may be deemed to have antitakeover
effects and may delay, defer or prevent a tender offer or takeover attempt that
a shareholder might consider to be in such shareholder's best interest,
including those attempts that might result in a premium over the market price
for the shares held by shareholders, and may make removal of management more
difficult.
36
<PAGE>
Authorized but Unissued Stock. The authorized but unissued shares of Common
Stock and Preferred Stock will be available for future issuance without
shareholder approval. These additional shares may be used for a variety of
corporate purposes, including future public offerings to raise additional
capital, corporate acquisitions, and employee benefit plans. The existence of
authorized but unissued and unreserved shares of Common Stock and Preferred
Stock may enable the Board of Directors to issue shares to persons friendly to
current management, which could render more difficult or discourage any attempt
to obtain control of the Company by means of a proxy contest, tender offer,
merger or otherwise, and thereby protect the continuity of the Company's
management.
Advance Notice Requirements for Shareholder Proposals. The Bylaws establish
advance notice procedures with regard to proposals raised, other than by or at
the direction of the Board of Directors, at any meeting of the shareholders of
the Company. These procedures provide that the notice of shareholder proposals
must be in writing and be received by the Secretary of the Company on or before
the later to occur of (i) 14 days prior to the meeting or (ii) 5 days after
notice of the meeting is provided to the shareholders. The Company may reject a
shareholder proposal that is not made in accordance with such procedures.
Certain Nomination Requirements. Pursuant to the Bylaws, the Company has
established certain nomination requirements for an individual to be elected as
a director of the Company at any annual or special meeting of the shareholders,
including that the nominating party provide the Company within a specified time
prior to the meeting (i) notice that such party intends to nominate the
proposed director; (ii) the name and certain biographical information on the
nominee; and (iii) a statement that the nominee has consented to the
nomination. The chairman of any Shareholders' meeting may, for good cause
shown, waive the operation of these provisions. These provisions could reduce
the likelihood that a third party would nominate and elect individuals to serve
on the Board of Directors.
Consideration of Other Constituencies in Mergers. The Corporation Act
grants the Board of Directors the discretion, when considering whether a
proposed merger or similar transaction is in the best interests of the Company
and its shareholders, to take into account the effect of the transaction on the
employees, customers, and suppliers of the Company and upon the communities in
which the offices of the Company are located.
Shares Eligible for Future Sale
Upon completion of this offering, the Company will have a minimum of
1,620,000 and a maximum of 2,480,000 shares of Common Stock outstanding. The
shares sold in this offering will be freely tradable, without restriction or
registration under the Securities Act, except for shares purchased by
"affiliates" of the Company, which will be subject to resale restrictions under
the Securities Act. An affiliate of the issuer is defined in Rule 144 under
the Securities Act as a person that directly or indirectly, through one or more
intermediaries, controls, is controlled by, or is under common control with the
issuer. Rule 405 under the Securities Act defines the term "control" to mean
the possession, direct or indirect, of the power to direct or cause the
direction of the management and policies of the person whether through the
ownership of voting securities, by contract or otherwise. Directors of the
Company and the Bank will likely be deemed to be affiliates. These securities
held by affiliates may be sold without registration in accordance with the
provisions of Rule 144 or another exemption from registration.
37
<PAGE>
In general, under Rule 144, an affiliate of the Company or a person
holding restricted shares may sell, within any three-month period, a number of
shares no greater than 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 the sale, whichever is greater. Rule 144 also requires that
the securities must be sold in "brokers' transactions," as defined in the
Securities Act, and the person selling the securities may not solicit orders or
make any payment in connection with the offer or sale of securities to any
person other than the broker who executes the order to sell the securities.
This requirement may make the sale of the Common Stock by affiliates of the
Company pursuant to Rule 144 difficult if no trading market develops in the
Common Stock. Rule 144 also requires persons holding restricted securities to
hold the shares for at least two years prior to sale.
LEGAL MATTERS
The validity of the issuance of the shares of the Common Stock offered
hereby will be passed upon for the Company by Morris, Manning & Martin, L.L.P.,
Atlanta, Georgia.
EXPERTS
The financial statements of the Company at October 31, 1996, and for the
period from October 15, 1996 (inception) until October 31, 1996, have been
audited by Porter Keadle Moore, LLP, Atlanta, Georgia (the "Accountant"),
independent certified public accountants, as stated in the Accountant's report
appearing elsewhere herein, and have been so included in reliance on the report
of such firm given upon the Accountant's authority as an expert in accounting
and auditing.
38
<PAGE>
BUCKHEAD COMMUNITY BANCORP, INC.
(a Development Stage Corporation)
Index to Financial Statements
<TABLE>
<CAPTION>
Page
----
<S> <C>
Report of Independent Certified Public Accountants....................... F-2
Balance Sheet - October 31, 1996......................................... F-3
Statement of Operations for the Period from
Inception (October 15, 1996) to October 31, 1996...................... F-4
Statement of Changes in Stockholders Equity
for the Period from Inception (October 15, 1996) to October 31, 1996.. F-5
Statement of Cash Flows for the Period from
Inception (October 15, 1996) to October 31, 1996...................... F-6
Notes to Financial Statements as of October 31, 1996..................... F-7
</TABLE>
F-1
<PAGE>
[LETTERHEAD OF PORTER KEADLE MOORE, LLP APPEARS HERE]
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
To the Board of Directors
Buckhead Community Bancorp, Inc.
We have audited the accompanying balance sheet of Buckhead Community Bancorp,
Inc. (a development stage corporation), as of October 31, 1996, and the related
statements of operations, changes in stockholders' equity and cash flows for the
period from inception (October 15, 1996) to October 31, 1996. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Buckhead Community Bancorp,
Inc., as of October 31, 1996, and the results of its operations and its cash
flows for the period from inception (October 15, 1996) to October 31, 1996, in
conformity with generally accepted accounting principles.
The accompanying financial statements have been prepared assuming that Buckhead
Community Bancorp, 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 2, the Company's
future operations are dependent on obtaining capital through an initial stock
offering and obtaining the necessary final regulatory approvals to operate under
a commercial bank charter. 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 plan in regard
to these matters are described in note 2. 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.
/s/ Porter Keadle Moore, LLP
Atlanta, Georgia
November 1, 1996
<PAGE>
BUCKHEAD COMMUNITY BANCORP, INC.
(A Development Stage Corporation)
Balance Sheet
October 31, 1996
Assets
------
<TABLE>
<CAPTION>
<S> <C>
Cash $ 385,700
-------
Current assets 385,700
-------
Organization costs 43,581
Deferred offering expenses 4,232
-------
$ 433,513
=======
Liabilities and Stockholders' Equity
------------------------------------
Accounts payable and accrued expenses $ 36,136
Accounts payable - organizer 7,500
-------
Current liabilities 43,636
-------
Commitments
Stockholders' equity:
Preferred Stock, no par value; 1,000,000
shares authorized -
Common stock, par value $.01 per share; 10,000,000
shares authorized; 80,000 shares issued and outstanding 800
Additional paid-in capital 399,200
Deficit accumulated during the development stage (10,123)
-------
Total stockholders' equity 389,877
-------
$ 433,513
-------
</TABLE>
See accompanying notes to financial statements.
F-3
<PAGE>
BUCKHEAD COMMUNITY BANCORP, INC.
(A Development Stage Corporation)
Statement of Operations
For the Period from Inception (October 15, 1996) to October 31, 1996
<TABLE>
<CAPTION>
Expenses:
<S> <C>
Salaries and employee benefits $ 3,750
Other operating 6,373
------
Net loss $ 10,123
======
</TABLE>
See accompanying notes to financial statements.
F-4
<PAGE>
BUCKHEAD COMMUNITY BANCORP, INC.
(A Development Stage Corporation)
Statement of Changes in Stockholders' Equity
For the Period from Inception (October 15, 1996) to October 31, 1996
<TABLE>
<CAPTION>
Deficit
Accumulated
Additional During the
Common Paid-in Development
Stock Capital Stage Total
------ ---------- ------------ -----
<S> <C> <C> <C> <C>
Proceeds from the sale of 80,200
organization shares $ 802 400,198 - 401,000
Redemption of 200 organization
shares (2) (998) - (1,000)
Net loss - - (10,123) (10,123)
------- -------- ------- -------
Balance, October 31, 1996 $ 800 399,200 (10,123) 389,877
======= ======== ======= =======
</TABLE>
See accompanying notes to financial statements.
F-5
<PAGE>
BUCKHEAD COMMUNITY BANCORP, INC.
(A Development Stage Corporation)
Statement of Cash Flows
For the Period from Inception (October 15, 1996) to October 31, 1996
<TABLE>
<S> <C>
Cash flows from operating activities:
Net loss $ (10,123)
Adjustments to reconcile net loss to net cash provided by
operating activities:
Increase in accounts payable and accrued expenses 43,636
------
Net cash provided by operating activities 33,513
------
Cash flows from investing activities:
Organization costs 43,581
Deferred stock offering expenses 4,232
------
Net cash used in investing activities 47,813
------
Cash flows from financing activities:
Proceeds from the sale of organization shares 401,000
Redemption of organization shares (1,000)
-------
Net cash provided by financing activities 400,000
-------
Net increase in cash and cash equivalents 385,700
Cash and cash equivalents at beginning of period -
-------
Cash and cash equivalents at end of period $ 385,700
=======
</TABLE>
See accompanying notes to financial statements
F-6
<PAGE>
BUCKHEAD COMMUNITY BANCORP, INC.
(A Development Stage Corporation)
Notes to Financial Statements
(1) Organization
------------
Buckhead Community Bancorp, Inc. was formed to establish Buckhead National
Bank (the Bank). The organizers of the Company filed a joint application to
charter the Bank with the Office of the Comptroller of the Currency (OCC)
and the Federal Deposit Insurance Corporation (FDIC). Provided the
necessary capital is raised, and the necessary regulatory approvals are
received, it is expected that operations will commence in the first quarter
of 1997.
Operations through October 31, 1996, relate primarily to expenditures for
incorporating and organizing the Company.
The Company plans to raise a minimum of $7,700,000 through an offering of
its $.01 par value common stock. The organizers and directors expect to
subscribe for a minimum of approximately $4,500,000 of the Company's stock.
(2) Liquidity and Going Concern Considerations
------------------------------------------
The Company incurred a net loss of $10,123 for the period from inception
(October 15, 1996) to October 31, 1996.
At October 31, 1996, the Bank is totally funded by stock sales from
organizers. 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 and obtaining regulatory
approval.
To provide permanent funding for its operation, the Company is currently
anticipating offering a minimum of 1,540,000 and a maximum of 2,400,000
shares of its common stock, $.01 par value, at $5 per share in an initial
public offering. Costs related to the organization and registration of the
Company's common stock will be paid from the gross proceeds of the
offering. Should subscriptions for the minimum offering not be obtained,
amounts paid by subscribers with their subscriptions will be returned and
the offer withdrawn.
(3) Commitments
-----------
Upon the completion of the sale of common stock and the opening of the
Bank, incurred organization costs (consisting principally of legal,
regulatory, consulting and incorporation fees) will be deferred and
amortized over the Company's initial sixty months of operations. Offering
expenses (consisting principally of direct, incremental costs of the stock
offering) will be deducted from the proceeds of the offering, and pre-
opening expenses (consisting principally of salaries, overhead and other
operating costs) will be charged against the initial period's operating
results.
F-7
<PAGE>
BUCKHEAD COMMUNITY BANCORP, INC.
(A Development Stage Corporation)
Notes to Financial Statements, continued
(3) Commitments, continued
-----------
The Company entered into an employment agreement with its President and
Chief Executive Officer. The agreement continues for one year and provides for
an annual base salary of $45,000 per year until the Bank opens for business and
$90,000 per year after opening. Additionally, the Company entered into an
agreement with its vice-president and secretary to provide services during the
organizational stages of the Company and the Bank. The agreement calls for total
payments of $40,000 which are payable in various stages during the organization
process.
F-8
<PAGE>
EXHIBIT A
BUCKHEAD COMMUNITY BANCORP, INC.
SUBSCRIPTION AGREEMENT
Buckhead Community Bancorp, Inc.
3379 Peachtree Road, Suite 100
Atlanta, Georgia 30326
(404) 812-0440
Ladies and Gentlemen:
You have informed me that Buckhead Community Bancorp, Inc., a Georgia
corporation (the "Company"), is offering up to 1,200,000 shares of its Common
Stock, par value $.01 per share (the "Common Stock"), at a price of $5.00 per
share payable as provided herein and as described in and offered pursuant to the
Prospectus furnished with this Subscription Agreement to the undersigned (the
"Prospectus").
1. Subscription. Subject to the terms and conditions hereof, the
undersigned hereby tenders this subscription, together with payment in United
States currency by check, bank draft, or money order payable to "SunTrust Bank,
Atlanta, Escrow Account for Buckhead Community Bancorp, Inc." the amount
indicated below (the "Funds"), representing the payment of $5.00 per share for
the number of shares of Common Stock indicated below. The total subscription
price must be paid at the time the Subscription Agreement is executed.
2. Acceptance of Subscription. It is understood and agreed that
the Company shall have the right to accept or reject this subscription in whole
or in part, for any reason whatsoever. The Company may reduce the number of
shares for which the undersigned has subscribed, indicating acceptance of less
than all of the shares subscribed on its written form of acceptance.
3. Acknowledgments. The undersigned hereby acknowledges that he or
she has received a copy of the Prospectus. This Subscription Agreement creates
a legally binding obligation and the undersigned agrees to be bound by the
terms of this Agreement.
4. Revocation. The undersigned agrees that once this Subscription
Agreement is tendered to the Company, it may not be withdrawn and that this
Agreement shall survive the death or disability of the undersigned.
THE SHARES OF COMMON STOCK OFFERED HEREBY ARE NOT SAVINGS ACCOUNTS OR
DEPOSITS ACCOUNTS AND ARE NOT INSURED BY THE FEDERAL DEPOSIT INSURANCE
CORPORATION OR ANY OTHER GOVERNMENTAL AGENCY.
A-1
<PAGE>
Please indicate in the space provided below the exact name or names and
address in which the stock certificate representing shares subscribed for
hereunder should be registered.
<TABLE>
<CAPTION>
<S> <C>
---------------------------------- -------------------------------------------
Number of Shares Subscribed for Name or Names of Subscribers (Please Print)
(minimum 100 shares)
$
---------------------------------- -------------------------------------------
Total Subscription Price at $5.00 Please indicate form of ownership desired
per share (funds must be enclosed) (individual, joint tenants with right of
survivorship, tenants in common, trust,
corporation, partnership, custodian, etc.)
Date:
---------------------------- -------------------------------------------
Signature of Subscriber(s)*
---------------------------------- -------------------------------------------
Social Security Number of Federal Signature of Subscriber(s)*
Taxpayer Identification Number
Street (Residence) Address:
-------------------------------------------
-------------------------------------------
-------------------------------------------
City, State and Zip Code
</TABLE>
* 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 the case of joint tenants or
tenants in common, each owner must sign.
FEDERAL INCOME TAX BACKUP WITHHOLDING
In order to prevent the application of federal income tax backup
withholding, each subscriber must provide the Escrow Agent with a correct
Taxpayer Identification Number ("TIN"). An individual's social security number
is his or her TIN. The TIN should be provided in the space provided in the
Substitute Form W-9, which is set forth below.
Under federal income tax law, any person who is required to furnish his
or her correct TIN to another person, and who fails to comply with such
requirements, may be subject to a $50 penalty imposed by the IRS.
Backup withholding is not an additional tax. Rather, the tax liability
of persons subject to backup withholding will be reduced by the amount of tax
withheld. If backup withholding results in an overpayment of taxes, a refund
may be obtained from the IRS. Certain taxpayers, including all corporations,
are not subject to these backup withholding and reporting requirements.
A-2
<PAGE>
If the shareholder has not been issued a TIN and has applied for a TIN
or intends to apply for a TIN in the near future, "Applied For" should be
written in the space provided for the TIN on the Substitute Form W-9.
SUBSTITUTE FORM W-9
Under penalties of perjury, I certify that: (i) The number shown on this
form is my correct Taxpayer Identification Number (or I am waiting for a
Taxpayer Identification Number to be issued to me), and (ii) I am not subject to
backup withholding because: (a) I am exempt from backup withholding; or (b) I
have not been notified by the Internal Revenue Service ("IRS") that I am subject
to backup withholding as a result of a failure to report all interest or
dividends; or (c) the IRS has notified me that I am no longer subject to backup
withholding.
You must cross out item (ii) above if you have been notified by the IRS
that you are subject to backup withholding because of underreporting interest or
dividends on your tax return. However, if after being notified by the IRS that
you were subject to backup withholding you received another notification from
the IRS that you are not longer subject to backup withholding, do not cross out
item (ii).
Each subscriber should complete this section.
- --------------------------------- -------------------------------------
Signature of Subscriber Signature of Subscriber
- --------------------------------- -------------------------------------
Printed Name Printed Name
- --------------------------------- -------------------------------------
Social Security or Employer Social Security or Employer
Identification No. Identification No.
TO BE COMPLETED BY THE COMPANY:
Accepted as of , 199 , as to shares.
------------- - ---------
BUCKHEAD COMMUNITY BANCORP, INC.
By:
----------------------------------------
Donald D. Thompson
President and Chief Executive Officer
A-3
<PAGE>
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
NO DEALER, SALESPERSON OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFOR-
MATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PRO-
SPECTUS IN CONNECTION WITH THE OFFER MADE HEREBY. IF GIVEN OR MADE, SUCH IN-
FORMATION AND REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHO-
RIZED BY THE COMPANY. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR
SOLICITATION OF AN OFFER TO BUY ANY OF THE SECURITIES OFFERED HEREBY IN ANY
JURISDICTION TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER IN SUCH
JURISDICTION. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HERE-
UNDER AT ANY TIME SHALL UNDER ANY CIRCUMSTANCES CREATE ANY IMPLICATION THAT
THE INFORMATION HEREIN IS CORRECT AT ANY TIME AFTER THE DATE HEREOF.
---------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Reports to Shareholders.................................................. 2
Additional Information................................................... 2
Prospectus Summary....................................................... 3
Risk Factors............................................................. 7
The Company and The Bank................................................. 11
The Offering............................................................. 12
Use of Proceeds.......................................................... 15
Capitalization........................................................... 17
Selected Financial Data.................................................. 17
Dividend Policy.......................................................... 17
Proposed Business........................................................ 18
Management's Discussion and Analysis of Financial Condition and Results
of Operations........................................................... 22
Supervision and Regulation............................................... 23
Management............................................................... 31
Description of Capital Stock of the Company.............................. 35
Legal Matters............................................................ 38
Experts.................................................................. 38
Financial Statements..................................................... F-1
Subscription Agreement................................................... A-1
</TABLE>
---------------
UNTIL , 1997, ALL DEALERS EFFECTING TRANSACTIONS IN THE REGISTERED
SECURITIES, WHETHER OR NOT PARTICIPATING IN THIS DISTRIBUTION, MAY BE REQUIRED
TO DELIVER A PROSPECTUS. THIS IS IN ADDITION TO THE OBLIGATION OF DEALERS TO
DELIVER A PROSPECTUS WHEN ACTING AS UNDERWRITERS AND WITH RESPECT TO THEIR
UNSOLD ALLOTMENTS OR SUBSCRIPTIONS.
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
2,400,000 SHARES
BUCKHEAD COMMUNITY BANCORP., INC.
A PROPOSED HOLDING COMPANY FOR
[BUCKHEAD NATIONAL BANK LOGO]
(PROPOSED)
COMMON STOCK
---------------
PROSPECTUS
---------------
, 1996
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<PAGE>
PART II
INDEMNIFICATION OF DIRECTORS AND OFFICERS
Item 13. Other Expenses of Issuance and Distribution.
Estimated expenses (other than underwriting commissions) of the sale of
the shares of Common Stock are as follows:
<TABLE>
<S> <C>
Registration Fee........................ $ 4,137.93
Blue Sky Fees and Expenses.............. 1,000.00
Printing and Engraving.................. 10,000.00
Legal Fees and Expenses................. 20,000.00
Accounting Fees and Expenses............ 3,500.00
Miscellaneous Disbursements............. 1,362.07
--------
TOTAL $40,000.00
==========
</TABLE>
Item 14. Indemnification of Directors and Officers.
The bylaws of the Company require the Company to indemnify any person who
was, is, or is threatened to be made a named defendant or respondent in any
threatened, pending, or completed action, suit, or proceeding, whether civil,
criminal, administrative, or investigative, by reason of service by such person
as a director of the Company or the Bank or any other corporation which he
served as such at the request of the Company. Except as noted in the next
paragraph, directors are entitled to be indemnified against judgments,
penalties, fines, settlements, and reasonable expenses actually incurred by the
director in connection with the proceeding. Directors are also entitled to have
the Company advance any such expenses prior to final disposition of the
proceeding, upon delivery of a written affirmation by the director of his good
faith belief that the standard of conduct necessary for indemnification has been
met and a written undertaking to repay the amounts advanced if it is ultimately
determined that the standard of conduct has not been met.
Under the Bylaws, indemnification will be disallowed if it is established
that the director (i) appropriated, in violation of his duties, any business
opportunity of the Company, (ii) engaged in willful misconduct or a knowing
violation of law, (iii) permitted any unlawful distribution, or (iv) derived an
improper personal benefit. In addition to the Bylaws of the Company, Section 18-
2-852 of the Georgia Business Corporation Code (the "Corporate Code") requires
that a corporation indemnify a director who is wholly successful, on the merits
or otherwise, in the defense of any proceeding to which he or she was a party
because he or she is or was a director of the corporation against reasonable
expenses incurred by the director in connection with the proceeding. The
Corporate Code also provides that upon application of a director a court may
order indemnification if it determines that the director is entitled to such
indemnification under the applicable standard of the Corporation Act.
The Board of Directors also has the authority to extend to officers,
employees and agents the same indemnification rights held by directors, subject
to all of the accompanying conditions and obligations. The Board of Directors
has extended or intends to extend indemnification rights to all of its executive
officers.
The Company has the power to purchase and maintain insurance on behalf of
any person who is or was a director, officer, employee or agent of the Company
against any liability asserted
II-1
<PAGE>
against him or incurred by him in any such capacity, whether or not the Company
would have the power to indemnify him against such liability under the bylaws.
Item 15. Recent Sales of Unregistered Securities.
On October 15, 1996, the Company sold 200 shares to R. Charles Loudermilk,
Sr. in a limited offering exempt under Section 4(2) of the Securities Act for an
aggregate consideration of $1,000. No underwriters were involved in the sale and
no underwriting discounts or commissions were paid. These shares were redeemed
by the Company, on October 28, 1996, for $1,000.
On October 28, 1996, the Company sold 80,000 shares to the Organizers in a
limited offering exempt under Rule 506 of Regulation D and Section 4(2) of the
Securities Act for an aggregate consideration of $400,000. Each organizer
purchase 10,000 of such shares. No underwriters were involved and no
underwriting commissions or discounts were paid.
Item 16. Exhibits and Financial Statement Schedules.
(a) Exhibits.
--------
3.1. Articles of Incorporation.
3.2. Bylaws.
4.1. Provisions in the Company's Articles of Incorporation and Bylaws
defining the rights of holders of the Common Stock.
5.1. Opinion Regarding Legality.
10.1. Form of Employment Agreement between Donald D. Thompson and the
Company.
10.2. Form of Escrow Agreement between SunTrust Bank, Atlanta and the
Company.
23.1. Consent of Porter Keadle & Moore, LLP, Independent Certified
Public Accountants.
23.2. Consent of Morris, Manning & Martin, L.L.P. (appears in its
opinion filed as Exhibit 5.1).
24.1. Power of Attorney (appears in signature page on page II-4).
(b) Financial Statement Schedules.
-----------------------------
None.
Item 17. Undertakings.
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 Company pursuant to the provisions described in Item 14 above or
otherwise, the Company has been advised that in the opinion of the Securities
and Exchange Commission (the "SEC") 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 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 questions 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-2
<PAGE>
The undersigned Company hereby undertakes as follows:
(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 Act;
(ii) To reflect in the prospectus any facts or events arising after the
effective date of the Registration Statement (or the most recent post-
effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the
Registration Statement. Notwithstanding the foregoing, 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 and of the estimated maximum offering
range may be reflected in the form of prospectus filed with the SEC
pursuant to Rule 424(b) if, in the aggregate, the changes in volume
and price represent no more than 20 percent change in the maximum
aggregate offering price set forth in the "Calculation of Registration
Fee" table in the effective Registration Statement; and
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the Registration Statement or
any material change to such information in the Registration Statement.
(2) That, for the purpose of determining any liability under the Act, each such
post-effective amendment shall be deemed to be a new Registration Statement
relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.
(3) To remove from registration by means of a post-effective amendment any of
the securities being registered which remain unsold at the termination of
the offering.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
has duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Atlanta, State of
Georgia, on November 20, 1996.
BUCKHEAD COMMUNITY BANCORP, INC.
By: /s/ Donald D. Thompson
---------------------------------------------------------
Donald D. Thompson, President and Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints R. Charles Loudermilk, Sr. and Donald D.
Thompson, and each of them, his true and lawful attorneys-in-fact and agents,
with full power of substitution and resubstitution for him and in his name,
place and stead, in any and all capacities, to sign any and all amendments
(including post-effective amendments) to this Registration Statement, and to
file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents, and each of them, full power and authority to do
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 might or
could do in person, hereby ratifying and confirming all that each of said
attorney-in-fact 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, as amended,
this Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
<S> <C> <C>
/s/ R. Charles Loudermilk, Sr. Chairman of the Board November 20, 1996
- ------------------------------
R. Charles Loudermilk, Sr.
/s/ Donald D. Thompson President, Chief Executive Officer, Principal Financial November 20, 1996
- ------------------------------ Officer, Principal Accounting Officer and Director
Donald D. Thompson
/s/ Hugh C. Aldredge Director November 20, 1996
- ------------------------------
Hugh C. Aldredge
/s/ F. James Funk, Jr., M.D. Director November 20, 1996
- ------------------------------
F. James Funk, Jr., M.D.
/s/ J. Rex Fuqua Director November 20, 1996
- ------------------------------
J. Rex Fuqua
/s/ Julian LeCraw, Sr. Director November 20, 1996
- ------------------------------
Julian LeCraw, Sr.
/s/ Larry P. Martindale Director November 20, 1996
- ------------------------------
Larry P. Martindale
/s/ William T. Towles Director November 20, 1996
- ------------------------------
William T. Towles
</TABLE>
II-4
<PAGE>
Exhibit Index
-------------
Page
----
3.1. Articles of Incorporation ........................................
3.2. Bylaws ...........................................................
4.1. Provisions in the Company's Articles of Incorporation and Bylaws
defining the rights of holders of the Common Stock ...............
5.1. Opinion Regarding Legality .......................................
10.1. Form of Employment Agreement between Donald D. Thompson
and the Company ..................................................
10.2. Form of Escrow Agreement between SunTrust Bank, Atlanta and the
Company ..........................................................
23.1. Consent of Porter Keadle & Moore, LLP, Independent Certified
Public Accountants ...............................................
23.2. Consent of Morris, Manning & Martin, L.L.P. (appears in its opinion
filed as Exhibit 5.1) ............................................
24.1. Power of Attorney (appears in the signature page on page II-4) ...
<PAGE>
Exhibit 3.1
-----------
ARTICLES OF INCORPORATION
OF
BUCKHEAD COMMUNITY BANCORP, INC.
I.
The name of the Corporation is:
Buckhead Community Bancorp, Inc.
II.
The Corporation shall have authority to issue 10,000,000 shares of common
stock, $0.01 par value per share, and 1,000,000 shares of special stock, no par
value per share, any part or all of which shares of special stock may be
established and designated from time to time by the Board of Directors in such
series and with such preferences, limitations, and relative rights as may be
determined by the Board of Directors.
III.
The initial registered office of the Corporation shall be at 1600 Atlanta
Financial Center, 3343 Peachtree Road, N. E., Atlanta, Fulton County, Georgia
30326-1044. The initial registered agent of the Corporation shall be Larry W.
Shackelford.
IV.
The name and address of the incorporator is:
Larry W. Shackelford
Morris, Manning & Martin, L.L.P.
1600 Atlanta Financial Center
3343 Peachtree Road, N.E.
Atlanta, Georgia 30326
V.
The mailing address of the initial principal office of the Corporation is:
Buckhead Community Bancorp, Inc.
c/o Malcolm C. Garland
103 Chestnut Street
Greensboro, Georgia 30642-1064
VI.
No director of the Corporation shall have personal liability to the
Corporation or to its shareholders for monetary damages for breach of fiduciary
duty of care or other duty as a director, except that this Article VI shall not
eliminate or limit the liability of a director: (i) for any appropriation, in
violation of his duties, of any business opportunity of the Corporation;
(ii) for acts or omissions 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;
<PAGE>
or (iv) for any transaction from which the director received an improper
personal benefit. Neither the amendment nor repeal of this Article VI, nor the
adoption of any provision of the Articles of Incorporation of the Corporation
inconsistent with this Article VI, shall eliminate or reduce the effect of this
Article VI in respect of any act or failure to act, or any cause of action, suit
or claim that, but for this Article VI, would accrue or arise prior to any
amendment, repeal or adoption of such an inconsistent provision. If the Georgia
Business Corporation Code is subsequently amended to provide for further
limitations on the personal liability of directors of corporations for breach of
duty of care or other duty as a director, then the personal liability of the
directors of the Corporation shall be so further limited to the greatest extent
permitted by the Georgia Business Corporation Code.
VII.
Any action required or permitted to be taken at a shareholders' meeting may
be taken without a meeting if the action is taken by all of the shareholders
entitled to vote on the action, or by persons who would be entitled to vote at a
meeting those shares having voting power to cast not less than the minimum
number (or numbers, in the case of voting by groups) of votes that would be
necessary to authorize or take such actions at a meeting at which all shares
entitled to vote were present and voted. The action must be evidenced by one or
more written consents describing the action taken, signed by shareholders
entitled to take action without a meeting and delivered to the Corporation for
inclusion in the minutes or filing with the corporate records. All voting
shareholders of record who did not participate in taking the action shall be
given written notice of the action not more than ten (10) days after the taking
of action without a meeting. An action by less than unanimous consent may not
be taken with respect to any election of directors as to which shareholders
would be entitled to cumulative voting.
VIII.
The Board of Directors, any committee of the Board of Directors and any
individual Director, in discharging the duties of their respective positions and
in determining what is believed to be in the best interest of the Corporation,
may in their sole discretion consider the interests of the employees, customers,
suppliers and creditors of the Corporation and its subsidiaries, the communities
in which offices or other establishments of the Corporation and its subsidiaries
are located, and all other factors such Directors consider pertinent, in
addition to considering the effects of any action on the Corporation and its
shareholders. Notwithstanding the foregoing, this Article VIII shall not be
deemed to provide any of the foregoing constituencies any right to be considered
in any such discharging of duties or determination.
IN WITNESS WHEREOF, the undersigned has executed these Articles of
Incorporation.
----------------------------------
Larry W. Shackelford
Incorporator
<PAGE>
Exhibit 3.2
-----------
BYLAWS
OF
BUCKHEAD COMMUNITY BANCORP, INC.
BYLAWS
OF
BUCKHEAD COMMUNITY BANCORP, INC.
- --------------------------------------------------------------------------------
References in these Bylaws to "Articles of Incorporation" are to the
Articles of Incorporation of Buckhead Community Bancorp, Inc., a Georgia
corporation (the "Corporation"), as amended and restated from time to time.
All of these Bylaws are subject to contrary provisions, if any, of the
Articles of Incorporation (including provisions designating the preferences,
limitations, and relative rights of any class or series of shares), the Georgia
Business Corporation Code (the "Code"), and other applicable law, as in effect
on and after the effective date of these Bylaws. References in these Bylaws to
"Sections" shall refer to sections of the Bylaws, unless otherwise indicated.
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ARTICLE ONE
Office
<PAGE>
1.1 Registered Office and Agent. The Corporation shall maintain a
---------------------------
registered office and shall have a registered agent whose business office is the
same as the registered office.
1.2 Principal Office. The principal office of the Corporation shall
----------------
be at the place designated in the Corporation's annual registration with the
Georgia Secretary of State.
1.3 Other Offices. In addition to its registered office and
-------------
principal office, the Corporation may have offices at other locations either in
or outside the State of Georgia.
ARTICLE TWO
Shareholders' Meetings
2.1 Place of Meetings. Meetings of the Corporation's shareholders
-----------------
may be held at any location inside or outside the State of Georgia designated by
the Board of Directors or any other person or persons who properly call the
meeting, or if the Board of Directors or such other person or persons do not
specify a location, at the Corporation's principal office.
2.2 Annual Meetings. The Corporation shall hold an annual meeting
---------------
of shareholders, at a time determined by the Board of Directors, to elect
directors and to transact any business that properly may come before the
meeting. The annual meeting may be combined with any other meeting of
shareholders, whether annual or special.
2.3 Special Meetings. Special meetings of shareholders of one or
----------------
more classes or series of the Corporation's shares may be called at any time by
the Board of Directors, the Chairman of the Board, or the Chief Executive
Officer, and shall be called by the Corporation upon the written request (in
compliance with applicable requirements of the Code) of the holders of shares
representing 25% or more of the votes entitled to be cast on each issue proposed
to be considered at the special meeting. The business that may be transacted at
any special meeting of shareholders shall be limited to that proposed in the
notice of the special meeting given in accordance with Section 2.4 (including
related or incidental matters that may be necessary or appropriate to effectuate
the proposed business).
2.4 Notice of Meetings. In accordance with Section 9.5 and subject
------------------
to waiver by a shareholder pursuant to Section 2.5, the Corporation shall give
written notice of the date, time, and place of each annual and special
shareholders' meeting no fewer than 10 days nor more than 60 days before the
meeting date to each shareholder of record entitled to vote at the meeting. The
notice of an annual meeting need not state the purpose of the meeting unless
these Bylaws require otherwise. The notice of a special meeting shall state the
purpose for which the meeting is called. If an annual or special shareholders'
meeting is adjourned to a different date, time, or location, the Corporation
shall give shareholders notice of the new date, time, or location of the
adjourned meeting, unless a quorum of shareholders was present at the meeting
and information regarding the adjournment was announced before the meeting was
adjourned; provided, however, that if a new record date is or must be fixed in
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accordance with Section 7.6, the Corporation must
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<PAGE>
give notice of the adjourned meeting to all shareholders of record as of the new
record date who are entitled to vote at the adjourned meeting.
2.5 Waiver of Notice. A shareholder may waive any notice required
----------------
by the Code, the Articles of Incorporation, or these Bylaws, before or after the
date and time of the matter to which the notice relates, by delivering to the
Corporation a written waiver of notice signed by the shareholder entitled to the
notice. In addition, a shareholder's attendance at a meeting shall be (a) a
waiver of objection to lack of notice or defective notice of the meeting unless
the shareholder at the beginning of the meeting objects to holding the meeting
or transacting business at the meeting, and (b) a waiver of objection to
consideration of a particular matter at the meeting that is not within the
purpose stated in the meeting notice, unless the shareholder objects to
considering the matter when it is presented. Except as otherwise required by the
Code, neither the purpose of nor the business transacted at the meeting need be
specified in any waiver.
2.6 Voting Group; Quorum; Vote Required to Act. (a) Unless
------------------------------------------
otherwise required by the Code or the Articles of Incorporation, all classes or
series of the Corporation's shares entitled to vote generally on a matter shall
for that purpose be considered a single voting group (a "Voting Group"). If
either the Articles of Incorporation or the Code requires separate voting by two
or more Voting Groups on a matter, action on that matter is taken only when
voted upon by each such Voting Group separately. At all meetings of
shareholders, any Voting Group entitled to vote on a matter may take action on
the matter only if a quorum of that Voting Group exists at the meeting, and if a
quorum exists, the Voting Group may take action on the matter notwithstanding
the absence of a quorum of any other Voting Group that may be entitled to vote
separately on the matter. Unless the Articles of Incorporation, these Bylaws, or
the Code provides otherwise, the presence (in person or by proxy) of shares
representing a majority of votes entitled to be cast on a matter by a Voting
Group shall constitute a quorum of that Voting Group with regard to that matter.
Once a share is present at any meeting other than solely to object to holding
the meeting or transacting business at the meeting, the share shall be deemed
present for quorum purposes for the remainder of the meeting and for any
adjournments of that meeting, unless a new record date for the adjourned meeting
is or must be set pursuant to Section 7.6 of these Bylaws.
(b) Except as provided in Section 3.4, if a quorum exists, action
on a matter by a Voting Group is approved by that Voting Group if the votes cast
within the Voting Group favoring the action exceed the votes cast opposing the
action, unless the Articles of Incorporation, a provision of these Bylaws that
has been adopted pursuant to Section 14-2-1021 of the Code (or any successor
provision), or the Code requires a greater number of affirmative votes.
2.7 Voting of Shares. Unless otherwise required by the Code or the
----------------
Articles of Incorporation, each outstanding share of any class or series having
voting rights shall be entitled to one vote on each matter that is submitted to
a vote of shareholders.
2.8 Proxies. A shareholder entitled to vote on a matter may vote in
-------
person or by proxy pursuant to an appointment executed in writing by the
shareholder or by his or her
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<PAGE>
attorney-in-fact. An appointment of a proxy shall be valid for 11 months from
the date of its execution, unless a longer or shorter period is expressly stated
in the proxy.
2.9 Presiding Officer. Except as otherwise provided in this Section
-----------------
2.9, the Chairman of the Board, and in his or her absence or disability the
Chief Executive Officer, shall preside at every shareholders' meeting (and any
adjournment thereof) as its chairman, if either of them is present and willing
to serve. If neither the Chairman of the Board nor the Chief Executive Officer
is present and willing to serve as chairman of the meeting, and if the Chairman
of the Board has not designated another person who is present and willing to
serve, then a majority of the Corporation's directors present at the meeting
shall be entitled to designate a person to serve as chairman. If no director of
the Corporation is present at the meeting or if a majority of the directors who
are present cannot be established, then a chairman of the meeting shall be
selected by a majority vote of (a) the shares present at the meeting that would
be entitled to vote in an election of directors, or (b) if no such shares are
present at the meeting, then the shares present at the meeting comprising the
Voting Group with the largest number of shares present at the meeting and
entitled to vote on a matter properly proposed to be considered at the meeting.
The chairman of the meeting may designate other persons to assist with the
meeting.
2.10 Adjournments. At any meeting of shareholders (including an
------------
adjourned meeting), a majority of shares of any Voting Group present and
entitled to vote at the meeting (whether or not those shares constitute a
quorum) may adjourn the meeting, but only with respect to that Voting Group, to
reconvene at a specific time and place. If more than one Voting Group is present
and entitled to vote on a matter at the meeting, then the meeting may be
continued with respect to any such Voting Group that does not vote to adjourn as
provided above, and such Voting Group may proceed to vote on any matter to which
it is otherwise entitled to do so; provided, however, that if (a) more than one
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Voting Group is required to take action on a matter at the meeting and (b) any
one of those Voting Groups votes to adjourn the meeting (in accordance with the
preceding sentence), then the action shall not be deemed to have been taken
until the requisite vote of any adjourned Voting Group is obtained at its
reconvened meeting. The only business that may be transacted at any reconvened
meeting is business that could have been transacted at the meeting that was
adjourned, unless further notice of the adjourned meeting has been given in
compliance with the requirements for a special meeting that specifies the
additional purpose or purposes for which the meeting is called. Nothing
contained in this Section 2.10 shall be deemed or otherwise construed to limit
any lawful authority of the chairman of a meeting to adjourn the meeting.
2.11 Conduct of the Meeting. At any meeting of shareholders, the
----------------------
chairman of the meeting shall be entitled to establish the rules of order
governing the conduct of business at the meeting.
2.12 Action of Shareholders Without a Meeting. Action required or
----------------------------------------
permitted to be taken at a meeting of shareholders may be taken without a
meeting if the action is taken by all shareholders entitled to vote on the
action or, if permitted by the Articles of Incorporation, by persons who would
be entitled to vote at a meeting shares having voting power to cast the
requisite number of votes (or numbers, in the case of voting by groups) that
would be necessary
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<PAGE>
to authorize or take the action at a meeting at which all shareholders entitled
to vote were present and voted. The action must be evidenced by one or more
written consents describing the action taken, signed by shareholders entitled to
take action without a meeting, and delivered to the Corporation for inclusion in
the minutes or filing with the corporate records. Where required by Section
14-2-704 or other applicable provision of the Code, the Corporation shall
provide shareholders with written notice of actions taken without a meeting.
2.13 Matters Considered at Annual Meetings. Notwithstanding anything
-------------------------------------
to the contrary in these Bylaws, the only business that may be conducted at an
annual meeting of shareholders shall be business brought before the meeting (a)
by or at the direction of the Board of Directors prior to the meeting, (b) by or
at the direction of the Chairman of the Board or the Chief Executive Officer, or
(c) by a shareholder of the Corporation who is entitled to vote with respect to
the business and who complies with the notice procedures set forth in this
Section 2.13. For business to be brought properly before an annual meeting by a
shareholder, the shareholder must have given timely notice of the business 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 offices of
the Corporation on or before the later to occur of (i) 14 days prior to the
annual meeting or (ii) 5 days after notice of the meeting is provided to the
shareholders pursuant to Section 2.4 hereof. A shareholder's notice to the
Secretary shall set forth a brief description of each matter of business the
shareholder proposes to bring before the meeting and the reasons for conducting
that business at the meeting; the name, as it appears on the Corporation's
books, and address of the shareholder proposing the business; the series or
class and number of shares of the Corporation's capital stock that are
beneficially owned by the shareholder; and any material interest of the
shareholder in the proposed business. The chairman of the meeting shall have
the discretion to declare to the meeting that any business proposed by a
shareholder to be considered at the meeting is out of order and that such
business shall not be transacted at the meeting if (i) the chairman concludes
--
that the matter has been proposed in a manner inconsistent with this Section
2.13 or (ii) the chairman concludes that the subject matter of the proposed
business is inappropriate for consideration by the shareholders at the meeting.
ARTICLE THREE
Board of Directors
3.1 General Powers. All corporate powers shall be exercised by or
--------------
under the authority of, and the business and affairs of the Corporation shall be
managed by, the Board of Directors, subject to any limitation set forth in the
Articles of Incorporation, in bylaws approved by the shareholders, or in
agreements among all the shareholders that are otherwise lawful.
3.2 Number, Election and Term of Office. The number of directors of
-----------------------------------
the Corporation shall be fixed by resolution of the Board of Directors or of the
shareholders from time to time and, until otherwise determined, shall be eight
(8); provided, however, that no decrease in the number of directors shall have
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the effect of shortening the term of an incumbent director. The Board of
Directors shall be divided into three classes to be known as Class I, Class
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<PAGE>
II, and Class III, which shall be as nearly equal in number as possible. Except
in case of death, resignation, disqualification, or removal, each director shall
serve for a term ending on the date of the third annual meeting of shareholders
following the annual meeting at which the director was elected; provided,
--------
however, that each initial director in Class I shall hold office until the 1997
- -------
annual meeting of shareholders; each initial director in Class II shall hold
office until the 1998 annual meeting of shareholders; and each initial director
in Class III shall hold office until the 1999 annual meeting of shareholders.
Despite the expiration of a director's term, he or she shall continue to serve
until his or her successor, if there is to be any, has been elected and has
qualified. In the event of any increase or decrease in the authorized number of
directors, the newly created or eliminated directorships resulting from such an
increase or decrease shall be apportioned among the three classes of directors
so that the three classes remain as nearly equal in size as possible; provided,
--------
however, that there shall be no classification of additional directors elected
- -------
by the Board of Directors until the next meeting of shareholders called for the
purposes of electing directors, at which meeting the terms of all such
additional directors shall expire, and such additional directors positions, if
they are to be continued, shall be apportioned among the classes of directors
and nominees therefor shall be submitted to the shareholders for their vote.
Except as provided elsewhere in this Section 3.2 and in Section 3.4, the
directors shall be elected at each annual meeting of shareholders, or at a
special meeting of shareholders called for purposes that include the election of
directors, by a plurality of the votes cast by the shares entitled to vote and
present at the meeting.
3.3 Removal of Directors. The entire Board of Directors or any
--------------------
individual director may be removed, with or without cause, by the shareholders,
provided that directors elected by a particular Voting Group may be removed only
by the shareholders in that Voting Group. Removal action may be taken only at a
shareholders' meeting for which notice of the removal action has been given. A
removed director's successor, if any, may be elected at the same meeting to
serve the unexpired term.
3.4 Vacancies. A vacancy occurring in the Board of Directors may be
---------
filled for the unexpired term, unless the shareholders have elected a successor,
by the affirmative vote of a majority of the remaining directors, whether or not
the remaining directors constitute a quorum; provided, however, that if the
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vacant office was held by a director elected by a particular Voting Group, only
the holders of shares of that Voting Group or the remaining directors elected by
that Voting Group shall be entitled to fill the vacancy; provided further,
-------- -------
however, that if the vacant office was held by a director elected by a
- -------
particular Voting Group and there is no remaining director elected by that
---
Voting Group, the other remaining directors or director (elected by another
Voting Group or Groups) may fill the vacancy during an interim period before the
shareholders of the vacated director's Voting Group act to fill the vacancy. A
vacancy or vacancies in the Board of Directors may result from the death,
resignation, disqualification, or removal of any director, or from an increase
in the number of directors.
3.5 Compensation. Directors may receive such compensation for their
------------
services as directors as may be fixed by the Board of Directors from time to
time. A director may also serve the Corporation in one or more capacities other
than that of director and receive compensation for services rendered in those
other capacities.
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<PAGE>
3.6 Committees of the Board of Directors. The Board of Directors
------------------------------------
may designate from among its members an executive committee or one or more other
standing or ad hoc committees, each consisting of one or more directors, who
serve at the pleasure of the Board of Directors. Subject to the limitations
imposed by the Code, each committee shall have the authority set forth in the
resolution establishing the committee or in any other resolution of the Board of
Directors specifying, enlarging, or limiting the authority of the committee.
3.7 Qualification of Directors. No person elected to serve as a
--------------------------
director of the Corporation shall assume office and begin serving unless and
until duly qualified to serve, as determined by reference to the Code, the
Articles of Incorporation, and any further eligibility requirements established
in these Bylaws.
3.8 Certain Nomination Requirements. No person may be nominated for
-------------------------------
election as a director at any annual or special meeting of shareholders unless
(a) the nomination has been or is being made pursuant to a recommendation or
approval of the Board of Directors of the Corporation or a properly constituted
committee of the Board of Directors previously delegated authority to recommend
or approve nominees for director; (b) the person is nominated by a shareholder
of the Corporation who is entitled to vote for the election of the nominee at
the subject meeting, and the nominating shareholder has furnished written notice
to the Secretary of the Corporation, at the Corporation's principal office, not
later than 14 days before the date of the meeting or 5 days after notice is
given pursuant to Section 2.4, whichever is later, and the notice (i) sets forth
with respect to the person to be nominated his or her name, age, business and
residence addresses, principal business or occupation during the past five
years, any affiliation with or material interest in the Corporation or any
transaction involving the Corporation, and any affiliation with or material
interest in any person or entity having an interest materially adverse to the
Corporation, and (ii) is accompanied by the sworn or certified statement of the
shareholder that the nominee has consented to being nominated and that the
shareholder believes the nominee will stand for election and will serve if
elected; or (c) (i) the person is nominated to replace a person previously
identified as a proposed nominee (in accordance with the provisions of subpart
(b) of this Section 3.8) who has since become unable or unwilling to be
nominated or to serve if elected, (ii) the shareholder who furnished such
previous identification makes the replacement nomination and delivers to the
Secretary of the Corporation (at the time of or prior to making the replacement
nomination) an affidavit or other sworn statement affirming that the shareholder
had no reason to believe the original nominee would be so unable or unwilling,
and (iii) such shareholder also furnishes in writing to the Secretary of the
Corporation (at the time of or prior to making the replacement nomination) the
same type of information about the replacement nominee as required by subpart
(b) of this Section 3.8 to have been furnished about the original nominee. The
chairman of any meeting of shareholders at which one or more directors are to be
elected, for good cause shown and with proper regard for the orderly conduct of
business at the meeting, may waive in whole or in part the operation of this
Section 3.8.
ARTICLE FOUR
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<PAGE>
Meetings of the Board of Directors
4.1 Regular Meetings. A regular meeting of the Board of Directors
----------------
shall be held in conjunction with each annual meeting of shareholders. In
addition, the Board of Directors may, by prior resolution, hold regular meetings
at other times.
4.2 Special Meetings. Special meetings of the Board of Directors
----------------
may be called by or at the request of the Chairman of the Board, the Chief
Executive Officer, or any director in office at that time.
4.3 Place of Meetings. Directors may hold their meetings at any
-----------------
place in or outside the State of Georgia that the Board of Directors may
establish from time to time.
4.4 Notice of Meetings. Directors need not be provided with notice
------------------
of any regular meeting of the Board of Directors. Unless waived in accordance
with Section 4.10, the Corporation shall give at least two days' notice to each
director of the date, time, and place of each special meeting. Notice of a
meeting shall be deemed to have been given to any director in attendance at any
prior meeting at which the date, time, and place of the subsequent meeting was
announced.
4.5 Quorum. At meetings of the Board of Directors, the greater of
------
(a) a majority of the directors then in office, or (b) one-third of the number
of directors fixed in accordance with these Bylaws shall constitute a quorum for
the transaction of business.
4.6 Vote Required for Action. If a quorum is present when a vote is
------------------------
taken, the vote of a majority of the directors present at the time of the vote
will be the act of the Board of Directors, unless the vote of a greater number
is required by the Code, the Articles of Incorporation, or these Bylaws. A
director who is present at a meeting of the Board of Directors when corporate
action is taken is deemed to have assented to the action taken unless (a) he or
she objects at the beginning of the meeting (or promptly upon his or her
arrival) to holding the meeting or transacting business at it; (b) his or her
dissent or abstention from the action taken is entered in the minutes of the
meeting; or (c) he or she delivers written notice of dissent or abstention to
the presiding officer of the meeting before its adjournment or to the
Corporation immediately after adjournment of the meeting. The right of dissent
or abstention is not available to a director who votes in favor of the action
taken.
4.7 Participation by Conference Telephone. Members of the Board of
-------------------------------------
Directors may participate in a meeting of the Board by means of conference
telephone or similar communications equipment through which all persons
participating may hear and speak to each other. Participation in a meeting
pursuant to this Section 4.7 shall constitute presence in person at the meeting.
4.8 Action by Directors Without a Meeting. Any action required or
-------------------------------------
permitted to be taken at any meeting of the Board of Directors may be taken
without a meeting if a written consent, describing the action taken, is signed
by each director and delivered to the Corporation
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<PAGE>
for inclusion in the minutes or filing with the corporate records. The consent
may be executed in counterpart, and shall have the same force and effect as a
unanimous vote of the Board of Directors at a duly convened meeting.
4.9 Adjournments. A meeting of the Board of Directors, whether or
------------
not a quorum is present, may be adjourned by a majority of the directors present
to reconvene at a specific time and place. It shall not be necessary to give
notice to the directors of the reconvened meeting or of the business to be
transacted, other than by announcement at the meeting that was adjourned, unless
a quorum was not present at the meeting that was adjourned, in which case notice
shall be given to directors in the same manner as for a special meeting. At any
such reconvened meeting at which a quorum is present, any business may be
transacted that could have been transacted at the meeting that was adjourned.
4.10 Waiver of Notice. A director may waive any notice required by
----------------
the Code, the Articles of Incorporation, or these Bylaws before or after the
date and time of the matter to which the notice relates, by a written waiver
signed by the director and delivered to the Corporation for inclusion in the
minutes or filing with the corporate records. Attendance by a director at a
meeting shall constitute waiver of notice of the meeting, except where a
director at the beginning of the meeting (or promptly upon his or her arrival)
objects to holding the meeting or to transacting business at the meeting and
does not thereafter vote for or assent to action taken at the meeting.
ARTICLE FIVE
Officers
5.1 Offices. The officers of the Corporation shall consist of a
-------
President, a Secretary, and a Treasurer, and may include a Chief Executive
Officer separate from the President, each of whom shall be elected or appointed
by the Board of Directors. The Board of Directors may also elect a Chairman of
the Board from among its members. The Board of Directors from time to time may,
or may authorize the Chief Executive Officer to, create and establish the duties
of other offices and may, or may authorize the Chief Executive Officer to, elect
or appoint, or authorize specific senior officers to appoint, the persons who
shall hold such other offices, including one or more Vice Presidents (including
Executive Vice Presidents, Senior Vice Presidents, Assistant Vice Presidents,
and the like), one or more Assistant Secretaries, and one or more Assistant
Treasurers. Whether or not so provided by the Board of Directors, the Chairman
of the Board or the Chief Executive Officer may appoint one or more Assistant
Secretaries, and one or more Assistant Treasurers. Any two or more offices may
be held by the same person.
5.2 Term. Each officer shall serve at the pleasure of the Board of
----
Directors (or, if appointed by the Chief Executive Officer or a senior officer
pursuant to this Article Five, at the pleasure of the Board of Directors, the
Chief Executive Officer, or the senior officer authorized to have appointed the
officer) until his or her death, resignation, or removal, or until his or her
replacement is elected or appointed in accordance with this Article Five.
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<PAGE>
5.3 Compensation. The compensation of all officers of the
------------
Corporation shall be fixed by the Board of Directors or by a committee or
officer appointed by the Board of Directors. Officers may serve without
compensation.
5.4 Removal. All officers (regardless of how elected or appointed)
-------
may be removed, with or without cause, by the Board of Directors, and any
officer appointed by the Chief Executive Officer or another senior officer may
also be removed, with or without cause, by the Chief Executive Officer or by any
senior officer authorized to have appointed the officer to be removed. Removal
will be without prejudice to the contract rights, if any, of the person removed,
but shall be effective notwithstanding any damage claim that may result from
infringement of such contract rights.
5.5 Chairman of the Board. The Chairman of the Board (if there be
---------------------
one) shall preside at and serve as chairman of meetings of the shareholders and
of the Board of Directors (unless another person is selected under Section 2.9
to act as chairman). The Chairman of the Board shall perform other duties and
have other authority as may from time to time be delegated by the Board of
Directors.
5.6 Chief Executive Officer. The Chief Executive Officer shall be
-----------------------
charged with the general and active management of the Corporation, shall see
that all orders and resolutions of the Board of Directors are carried into
effect, shall have the authority to select and appoint employees and agents of
the Corporation, and shall, in the absence or disability of the Chairman of the
Board, perform the duties and exercise the powers of the Chairman of the Board.
The Chief Executive Officer shall perform any other duties and have any other
authority as may be delegated from time to time by the Board of Directors, and
shall be subject to the limitations fixed from time to time by the Board of
Directors.
5.7 President. If there shall be no separate Chief Executive
---------
Officer of the Corporation, then the President shall be the chief executive
officer of the Corporation and shall have all the duties and authority given
under these Bylaws to the Chief Executive Officer. The President shall otherwise
be the chief operating officer of the Corporation and shall, subject to the
authority of the Chief Executive Officer, have responsibility for the conduct
and general supervision of the business operations of the Corporation. The
President shall perform such other duties and have such other authority as may
from time to time be delegated by the Board of Directors or the Chief Executive
Officer. In the absence or disability of the Chief Executive Officer, the
President shall perform the duties and exercise the powers of the Chief
Executive Officer.
5.8 Vice Presidents. The Vice President (if there be one) shall, in
---------------
the absence or disability of the President, perform the duties and exercise the
powers of the President, whether the duties and powers are specified in these
Bylaws or otherwise. If the Corporation has more than one Vice President, the
one designated by the Board of Directors or the Chief Executive Officer (in that
order of precedence) shall act in the event of the absence or disability of the
President. Vice Presidents shall perform any other duties and have any other
authority as from
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<PAGE>
time to time may be delegated by the Board of Directors, the Chief Executive
Officer, or the President.
5.9 Secretary. The Secretary shall be responsible for preparing
---------
minutes of the meetings of shareholders, directors, and committees of directors
and for authenticating records of the Corporation. The Secretary or any
Assistant Secretary shall have authority to give all notices required by law or
these Bylaws. The Secretary shall be responsible for the custody of the
corporate books, records, contracts, and other documents. The Secretary or any
Assistant Secretary may affix the corporate seal to any lawfully executed
documents requiring it, may attest to the signature of any officer of the
Corporation, and shall sign any instrument that requires the Secretary's
signature. The Secretary or any Assistant Secretary shall perform any other
duties and have any other authority as from time to time may be delegated by the
Board of Directors, the Chief Executive Officer, or the President.
5.10 Treasurer. Unless otherwise provided by the Board of Directors,
---------
the Treasurer shall be responsible for the custody of all funds and securities
belonging to the Corporation and for the receipt, deposit, or disbursement of
these funds and securities under the direction of the Board of Directors. The
Treasurer shall cause full and true accounts of all receipts and disbursements
to be maintained and shall make reports of these receipts and disbursements to
the Board of Directors, the Chief Executive Officer and President upon request.
The Treasurer or Assistant Treasurer shall perform any other duties and have any
other authority as from time to time may be delegated by the Board of Directors,
the Chief Executive Officer, or the President.
ARTICLE SIX
Distributions and Dividends
Unless the Articles of Incorporation provide otherwise, the Board of
Directors, from time to time in its discretion, may authorize or declare
distributions or share dividends in accordance with the Code.
ARTICLE SEVEN
Shares
7.1 Share Certificates. The interest of each shareholder in the
------------------
Corporation shall be evidenced by a certificate or certificates representing
shares of the Corporation, which shall be in such form as the Board of Directors
from time to time may adopt in accordance with the Code. Share certificates
shall be in registered form and shall indicate the date of issue, the name of
the Corporation, that the Corporation is organized under the laws of the State
of Georgia, the name of the shareholder, and the number and class of shares and
designation of the series, if any, represented by the certificate. Each
certificate shall be signed by the President or a Vice President (or in lieu
thereof, by the Chairman of the Board or Chief Executive Officer, if there be
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<PAGE>
one) and may be signed by the Secretary or an Assistant Secretary; provided,
--------
however, that where the certificate is signed (either manually or by facsimile)
- -------
by a transfer agent, or registered by a registrar, the signatures of those
officers may be facsimiles.
7.2 Rights of Corporation with Respect to Registered Owners. Prior
-------------------------------------------------------
to due presentation for transfer of registration of its shares, the Corporation
may treat the registered owner of the shares (or the beneficial owner of the
shares to the extent of any rights granted by a nominee certificate on file with
the Corporation pursuant to any procedure that may be established by the
Corporation in accordance with the Code) as the person exclusively entitled to
vote the shares, to receive any dividend or other distribution with respect to
the shares, and for all other purposes; and the Corporation shall not be bound
to recognize any equitable or other claim to or interest in the shares on the
part of any other person, whether or not it has express or other notice of such
a claim or interest, except as otherwise provided by law.
7.3 Transfers of Shares. Transfers of shares shall be made upon the
-------------------
books of the Corporation kept by the Corporation or by the transfer agent
designated to transfer the shares, only upon direction of the person named in
the certificate or by an attorney lawfully constituted in writing. Before a new
certificate is issued, the old certificate shall be surrendered for cancellation
or, in the case of a certificate alleged to have been lost, stolen, or
destroyed, the provisions of Section 7.5 of these Bylaws shall have been
complied with.
7.4 Duty of Corporation to Register Transfer. Notwithstanding any
----------------------------------------
of the provisions of Section 7.3 of these Bylaws, the Corporation is under a
duty to register the transfer of its shares only if: (a) the share certificate
is endorsed by the appropriate person or persons; (b) reasonable assurance is
given that each required endorsement is genuine and effective; (c) the
Corporation has no duty to inquire into adverse claims or has discharged any
such duty; (d) any applicable law relating to the collection of taxes has been
complied with; (e) the transfer is in fact rightful or is to a bona fide
purchaser; and (f) the transfer is in compliance with applicable provisions of
any transfer restrictions of which the Corporation shall have notice.
7.5 Lost, Stolen, or Destroyed Certificates. Any person claiming a
---------------------------------------
share certificate to be lost, stolen, or destroyed shall make an affidavit or
affirmation of this claim in such a manner as the Corporation may require and
shall, if the Corporation requires, give the Corporation a bond of indemnity in
form and amount, and with one or more sureties satisfactory to the Corporation,
as the Corporation may require, whereupon an appropriate new certificate may be
issued in lieu of the one alleged to have been lost, stolen or destroyed.
7.6 Fixing of Record Date. For the purpose of determining
---------------------
shareholders (a) entitled to notice of or to vote at any meeting of shareholders
or, if necessary, any adjournment thereof, (b) entitled to receive payment of
any distribution or dividend, or (c) for any other proper purpose, the Board of
Directors may fix in advance a date as the record date. The record date may not
be more than 70 days (and, in the case of a notice to shareholders of a
shareholders' meeting, not less than 10 days) prior to the date on which the
particular action, requiring the determination of shareholders, is to be taken.
A separate record date may be established for each Voting Group entitled to vote
separately on a matter at a meeting. A determination of shareholders of record
entitled to notice of or to vote at a meeting of shareholders shall apply to any
adjournment of the meeting, unless the Board of Directors shall fix a new record
date for the
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<PAGE>
reconvened meeting, which it must do if the meeting is adjourned to a date more
than 120 days after the date fixed for the original meeting.
7.7 Record Date if None Fixed. If no record date is fixed as
-------------------------
provided in Section 7.6, then the record date for any determination of
shareholders that may be proper or required by law shall be, as appropriate, the
date on which notice of a shareholders' meeting is mailed, the date on which the
Board of Directors adopts a resolution declaring a dividend or authorizing a
distribution, or the date on which any other action is taken that requires a
determination of shareholders.
ARTICLE EIGHT
Indemnification
8.1 Indemnification of Directors. The Corporation shall indemnify
----------------------------
and hold harmless any director of the Corporation (an "Indemnified Person") who
was or is a party, or is threatened to be made a party, to any threatened,
pending or completed action, suit, or proceeding, whether civil, criminal,
administrative, or investigative, whether formal or informal, including any
action or suit by or in the right of the Corporation (for purposes of this
Article Eight, collectively, a "Proceeding") because he or she is or was a
director, officer, employee, or agent of the Corporation, against any judgment,
settlement, penalty, fine, or reasonable expenses (including, but not limited
to, attorneys' fees and disbursements, court costs, and expert witness fees)
incurred with respect to the Proceeding (for purposes of this Article Eight, a
"Liability"), provided, however, that no indemnification shall be made for: (a)
any appropriation by a director, in violation of the director's duties, of any
business opportunity of the corporation; (b) any acts or omissions of a director
that involve intentional misconduct or a knowing violation of law; (c) the types
of liability set forth in Code Section 14-2-832; or (d) any transaction from
which the director received an improper personal benefit.
8.2 Indemnification of Others. The Board of Directors shall have
-------------------------
the power to cause the Corporation to provide to officers, employees, and agents
of the Corporation all or any part of the right to indemnification permitted for
such persons by appropriate provisions of the Code. Persons to be indemnified
may be identified by position or name, and the right of indemnification may be
different for each of the persons identified. Each officer, employee, or agent
of the Corporation so identified shall be an "Indemnified Person" for purposes
of the provisions of this Article Eight.
8.3 Other Organizations. The Corporation shall provide to each
-------------------
director, and the Board of Directors shall have the power to cause the
Corporation to provide to any officer, employee, or agent, of the Corporation
who is or was serving at the Corporation's request as a director, officer,
partner, trustee, employee, or agent of another corporation, partnership, joint
venture, trust, employee benefit plan, or other enterprise all or any part of
the right to indemnification and other rights of the type provided under
Sections 8.1, 8.2, 8.4, and 8.10 of this Article Eight (subject to the
conditions, limitations, and obligations specified in those Sections) permitted
for such
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<PAGE>
persons by appropriate provisions of the Code. Persons to be indemnified may be
identified by position or name, and the right of indemnification may be
different for each of the persons identified. Each person so identified shall be
an "Indemnified Person" for purposes of the provisions of this Article Eight.
8.4 Advances. Expenses (including, but not limited to, attorneys'
------------------
fees and disbursements, court costs, and expert witness fees) incurred by an
Indemnified Person in defending any Proceeding of the kind described in Sections
8.1 or 8.3, as to an Indemnified Person who is a director of the Corporation, or
in Sections 8.2 or 8.3, as to other Indemnified Persons, if the Board of
Directors has specified that advancement of expenses be made available to any
such Indemnified Person, shall be paid by the Corporation in advance of the
final disposition of such Proceeding as set forth herein. The Corporation shall
promptly pay the amount of such expenses to the Indemnified Person, but in no
event later than 10 days following the Indemnified Person's delivery to the
Corporation of a written request for an advance pursuant to this Section 8.4,
together with a reasonable accounting of such expenses; provided, however, that
-------- -------
the Indemnified Person shall furnish the Corporation a written affirmation of
his or her good faith belief that he or she has met the applicable standard of
conduct and a written undertaking and agreement to repay to the Corporation any
advances made pursuant to this Section 8.4 if it shall be determined that the
Indemnified Person is not entitled to be indemnified by the Corporation for such
amounts. The Corporation may make the advances contemplated by this Section 8.4
regardless of the Indemnified Person's financial ability to make repayment. Any
advances and undertakings to repay pursuant to this Section 8.4 may be unsecured
and interest-free.
8.5 Non-Exclusivity. Subject to any applicable limitation imposed
---------------
by the Code or the Articles of Incorporation, the indemnification and
advancement of expenses provided by or granted pursuant to this Article Eight
shall not be exclusive of any other rights to which a person seeking
indemnification or advancement of expenses may be entitled under any provision
of the Articles of Incorporation, or any Bylaw, resolution, or agreement
specifically or in general terms approved or ratified by the affirmative vote of
holders of a majority of the shares entitled to be voted thereon.
8.6 Insurance. The Corporation shall have the power to purchase and
---------
maintain insurance on behalf of any person who is or was a director, officer,
employee, or agent of the Corporation, or who, while serving in such a capacity,
is also or was also serving at the request of the Corporation as a director,
officer, trustee, partner, employee, or agent of any corporation, partnership,
joint venture, trust, employee benefit plan, or other enterprise, against any
Liability that may be asserted against or incurred by him or her in any such
capacity, or arising out of his or her status as such, whether or not the
Corporation would have the power to indemnify him or her against such liability
under the provisions of this Article Eight.
8.7 Notice. If the Corporation indemnifies or advances expenses to
a director under any of Sections 14-2-851 through 14-2-854 of the Code in
connection with a Proceeding by or in the right of the Corporation, the
Corporation shall, to the extent required by Section 14-2-1621 or
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<PAGE>
any other applicable provision of the Code, report the indemnification or
advance in writing to the shareholders with or before the notice of the next
shareholders' meeting.
8.8 Security. The Corporation may designate certain of its assets
--------
as collateral, provide self-insurance, establish one or more indemnification
trusts, or otherwise secure or facilitate its ability to meet its obligations
under this Article Eight, or under any indemnification agreement or plan of
indemnification adopted and entered into in accordance with the provisions of
this Article Eight, as the Board of Directors deems appropriate.
8.9 Amendment. Any amendment to this Article Eight that limits or
---------
otherwise adversely affects the right of indemnification, advancement of
expenses, or other rights of any Indemnified Person hereunder shall, as to such
Indemnified Person, apply only to Proceedings based on actions, events, or
omissions (collectively, "Post Amendment Events") occurring after such amendment
and after delivery of notice of such amendment to the Indemnified Person so
affected. Any Indemnified Person shall, as to any Proceeding based on actions,
events, or omissions occurring prior to the date of receipt of such notice, be
entitled to the right of indemnification, advancement of expenses, and other
rights under this Article Eight to the same extent as if such provisions had
continued as part of the Bylaws of the Corporation without such amendment. This
Section 8.9 cannot be altered, amended, or repealed in a manner effective as to
any Indemnified Person (except as to Post Amendment Events) without the prior
written consent of such Indemnified Person.
8.10 Agreements. The provisions of this Article Eight shall be
----------
deemed to constitute an agreement between the Corporation and each Indemnified
Person hereunder. In addition to the rights provided in this Article Eight, the
Corporation shall have the power, upon authorization by the Board of Directors,
to enter into an agreement or agreements providing to any Indemnified Person
indemnification rights substantially similar to those provided in this Article
Eight.
8.11 Continuing Benefits. The rights of indemnification and
-------------------
advancement of expenses permitted or authorized by this Article Eight shall,
unless otherwise provided when such rights are granted or conferred, continue as
to a person who has ceased to be a director, officer, employee, or agent and
shall inure to the benefit of the heirs, executors, and administrators of such
person.
8.12 Successors. For purposes of this Article Eight, the term
----------
"Corporation" shall include any corporation, joint venture, trust, partnership,
or unincorporated business association that is the successor to all or
substantially all of the business or assets of this Corporation, as a result of
merger, consolidation, sale, liquidation, or otherwise, and any such successor
shall be liable to the persons indemnified under this Article Eight on the same
terms and conditions and to the same extent as this Corporation.
8.13 Severability. Each of the Sections of this Article Eight, and
------------
each of the clauses set forth herein, shall be deemed separate and independent,
and should any part of any such Section or clause be declared invalid or
unenforceable by any court of competent jurisdiction, such invalidity or
unenforceability shall in no way render invalid or unenforceable any other part
-15-
<PAGE>
thereof or any separate Section or clause of this Article Eight that is not
declared invalid or unenforceable.
8.14 Additional Indemnification. In addition to the specific
--------------------------
indemnification rights set forth herein, the Corporation shall indemnify each of
its directors and such of its officers as have been designated by the Board of
Directors to the full extent permitted by action of the Board of Directors
without shareholder approval under the Code or other laws of the State of
Georgia as in effect from time to time.
ARTICLE NINE
Miscellaneous
9.1 Inspection of Books and Records. The Board of Directors shall
-------------------------------
have the power to determine which accounts, books, and records of the
Corporation shall be available for shareholders to inspect or copy, except for
those books and records required by the Code to be made available upon
compliance by a shareholder with applicable requirements, and shall have the
power to fix reasonable rules and regulations (including confidentiality
restrictions and procedures) not in conflict with applicable law for the
inspection and copying of accounts, books, and records that by law or by
determination of the Board of Directors are made available. Unless required by
the Code or otherwise provided by the Board of Directors, a shareholder of the
Corporation holding less than two percent of the total shares of the Corporation
then outstanding shall have no right to inspect the books and records of the
Corporation.
9.2 Fiscal Year. The Board of Directors is authorized to fix the
-----------
fiscal year of the Corporation and to change the fiscal year from time to time
as it deems appropriate.
9.3 Corporate Seal. The corporate seal will be in such form as the
--------------
Board of Directors may from time to time determine. The Board of Directors may
authorize the use of one or more facsimile forms of the corporate seal. The
corporate seal need not be used unless its use is required by law, by these
Bylaws, or by the Articles of Incorporation.
9.4 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 receipt of written request, the
Corporation promptly shall mail to any shareholder of record a copy of the most
recent such balance sheet and profit and loss statement, in such form and with
such information as the Code may require.
9.5 Notice. (a) Whenever these Bylaws require notice to be given to
------
any shareholder or to any director, the notice may be given by mail, in person,
by courier delivery, by telephone, or by telecopier, telegraph, or similar
electronic means. Whenever notice is given to a shareholder or director by mail,
the notice shall be sent by depositing the notice in a post office
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<PAGE>
or letter box in a postage-prepaid, sealed envelope addressed to the shareholder
or director at his or her address as it appears on the books of the Corporation.
Any such written notice given by mail shall be effective: (i) if given to
shareholders, at the time the same is deposited in the United States mail; and
(ii) in all other cases, at the earliest of (x) when received or when delivered,
properly addressed, to the addressee's last known principal place of business or
residence, (y) five days after its deposit in the mail, as evidenced by the
postmark, if mailed with first-class postage prepaid and correctly addressed, or
(z) on the date shown on the return receipt, if sent by registered or certified
mail, return receipt requested, and the receipt is signed by or on behalf of the
addressee. Whenever notice is given to a shareholder or director by any means
other than mail, the notice shall be deemed given when received.
(b) In calculating time periods for notice, when a period of time
measured in days, weeks, months, years, or other measurement of time is
prescribed for the exercise of any privilege or the discharge of any duty, the
first day shall not be counted but the last day shall be counted.
ARTICLE TEN
Amendments
Except as otherwise provided under the Code, the Board of Directors
shall have the power to alter, amend, or repeal these Bylaws or adopt new
Bylaws. Any Bylaws adopted by the Board of Directors may be altered, amended,
or repealed, and new Bylaws adopted, by the shareholders. The shareholders may
prescribe in adopting any Bylaw or Bylaws that the Bylaw or Bylaws so adopted
shall not be altered, amended, or repealed by the Board of Directors.
Dated: October 15, 1996.
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<PAGE>
Exhibit 4.1
-----------
ARTICLES OF INCORPORATION
OF
BUCKHEAD COMMUNITY BANCORP, INC.
II.
The Corporation shall have authority to issue 10,000,000 shares of common
stock, $0.01 par value per share, and 1,000,000 shares of special stock, no par
value per share, any part or all of which shares of special stock may be
established and designated from time to time by the Board of Directors in such
series and with such preferences, limitations, and relative rights as may be
determined by the Board of Directors.
VI.
No director of the Corporation shall have personal liability to the
Corporation or to its shareholders for monetary damages for breach of fiduciary
duty of care or other duty as a director, except that this Article VI shall not
eliminate or limit the liability of a director: (i) for any appropriation, in
violation of his duties, of any business opportunity of the Corporation; (ii)
for acts or omissions 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; or (iv) for any transaction from which
the director received an improper personal benefit. Neither the amendment nor
repeal of this Article VI, nor the adoption of any provision of the Articles of
Incorporation of the Corporation inconsistent with this Article VI, shall
eliminate or reduce the effect of this Article VI in respect of any act or
failure to act, or any cause of action, suit or claim that, but for this Article
VI, would accrue or arise prior to any amendment, repeal or adoption of such an
inconsistent provision. If the Georgia Business Corporation Code is
subsequently amended to provide for further limitations on the personal
liability of directors of corporations for breach of duty of care or other duty
as a director, then the personal liability of the directors of the Corporation
shall be so further limited to the greatest extent permitted by the Georgia
Business Corporation Code.
VII.
Any action required or permitted to be taken at a shareholders' meeting may
be taken without a meeting if the action is taken by all of the shareholders
entitled to vote on the action, or by persons who would be entitled to vote at a
meeting those shares having voting power to cast
-1-
<PAGE>
not less than the minimum number (or numbers, in the case of voting by groups)
of votes that would be necessary to authorize or take such actions at a meeting
at which all shares entitled to vote were present and voted. The action must be
evidenced by one or more written consents describing the action taken, signed by
shareholders entitled to take action without a meeting and delivered to the
Corporation for inclusion in the minutes or filing with the corporate records.
All voting shareholders of record who did not participate in taking the action
shall be given written notice of the action not more than ten (10) days after
the taking of action without a meeting. An action by less than unanimous consent
may not be taken with respect to any election of directors as to which
shareholders would be entitled to cumulative voting.
VIII.
The Board of Directors, any committee of the Board of Directors and any
individual Director, in discharging the duties of their respective positions and
in determining what is believed to be in the best interest of the Corporation,
may in their sole discretion consider the interests of the employees, customers,
suppliers and creditors of the Corporation and its subsidiaries, the communities
in which offices or other establishments of the Corporation and its subsidiaries
are located, and all other factors such Directors consider pertinent, in
addition to considering the effects of any action on the Corporation and its
shareholders. Notwithstanding the foregoing, this Article VIII shall not be
deemed to provide any of the foregoing constituencies any right to be considered
in any such discharging of duties or determination.
BYLAWS
OF
BUCKHEAD COMMUNITY BANCORP, INC.
2.13 Matters Considered at Annual Meetings. Notwithstanding anything
-------------------------------------
to the contrary in these Bylaws, the only business that may be conducted at an
annual meeting of shareholders shall be business brought before the meeting (a)
by or at the direction of the Board of Directors prior to the meeting, (b) by or
at the direction of the Chairman of the Board or the Chief Executive Officer, or
(c) by a shareholder of the Corporation who is entitled to vote with respect to
the business and who complies with the notice procedures set forth in this
Section 2.13. For business to be brought properly before an annual meeting by a
shareholder, the shareholder must have given timely notice of the business 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 offices of
the Corporation on or before the later to occur of (i) 14 days prior to the
annual meeting or (ii) 5 days after notice of the meeting is provided to the
shareholders pursuant to Section 2.4 hereof. A shareholder's notice to the
Secretary shall set forth a brief description of each matter of business the
shareholder proposes to bring before the meeting and the reasons for
-2-
<PAGE>
conducting that business at the meeting; the name, as it appears on the
Corporation's books, and address of the shareholder proposing the business; the
series or class and number of shares of the Corporation's capital stock that are
beneficially owned by the shareholder; and any material interest of the
shareholder in the proposed business. The chairman of the meeting shall have the
discretion to declare to the meeting that any business proposed by a shareholder
to be considered at the meeting is out of order and that such business shall not
be transacted at the meeting if (i) the chairman concludes that the matter has
--
been proposed in a manner inconsistent with this Section 2.13 or (ii) the
chairman concludes that the subject matter of the proposed business is
inappropriate for consideration by the shareholders at the meeting.
3.8 Certain Nomination Requirements. No person may be nominated for
-------------------------------
election as a director at any annual or special meeting of shareholders unless
(a) the nomination has been or is being made pursuant to a recommendation or
approval of the Board of Directors of the Corporation or a properly constituted
committee of the Board of Directors previously delegated authority to recommend
or approve nominees for director; (b) the person is nominated by a shareholder
of the Corporation who is entitled to vote for the election of the nominee at
the subject meeting, and the nominating shareholder has furnished written notice
to the Secretary of the Corporation, at the Corporation's principal office, not
later than 14 days before the date of the meeting or 5 days after notice is
given pursuant to Section 2.4, whichever is later, and the notice (i) sets forth
with respect to the person to be nominated his or her name, age, business and
residence addresses, principal business or occupation during the past five
years, any affiliation with or material interest in the Corporation or any
transaction involving the Corporation, and any affiliation with or material
interest in any person or entity having an interest materially adverse to the
Corporation, and (ii) is accompanied by the sworn or certified statement of the
shareholder that the nominee has consented to being nominated and that the
shareholder believes the nominee will stand for election and will serve if
elected; or (c) (i) the person is nominated to replace a person previously
identified as a proposed nominee (in accordance with the provisions of subpart
(b) of this Section 3.8) who has since become unable or unwilling to be
nominated or to serve if elected, (ii) the shareholder who furnished such
previous identification makes the replacement nomination and delivers to the
Secretary of the Corporation (at the time of or prior to making the replacement
nomination) an affidavit or other sworn statement affirming that the shareholder
had no reason to believe the original nominee would be so unable or unwilling,
and (iii) such shareholder also furnishes in writing to the Secretary of the
Corporation (at the time of or prior to making the replacement nomination) the
same type of information about the replacement nominee as required by subpart
(b) of this Section 3.8 to have been furnished about the original nominee. The
chairman of any meeting of shareholders at which one or more directors are to be
elected, for good cause shown and with proper regard for the orderly conduct of
business at the meeting, may waive in whole or in part the operation of this
Section 3.8.
ARTICLE SIX
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<PAGE>
Distributions and Dividends
Unless the Articles of Incorporation provide otherwise, the Board of
Directors, from time to time in its discretion, may authorize or declare
distributions or share dividends in accordance with the Code.
ARTICLE SEVEN
Shares
7.1 Share Certificates. The interest of each shareholder in the
------------------
Corporation shall be evidenced by a certificate or certificates representing
shares of the Corporation, which shall be in such form as the Board of Directors
from time to time may adopt in accordance with the Code. Share certificates
shall be in registered form and shall indicate the date of issue, the name of
the Corporation, that the Corporation is organized under the laws of the State
of Georgia, the name of the shareholder, and the number and class of shares and
designation of the series, if any, represented by the certificate. Each
certificate shall be signed by the President or a Vice President (or in lieu
thereof, by the Chairman of the Board or Chief Executive Officer, if there be
one) and may be signed by the Secretary or an Assistant Secretary; provided,
--------
however, that where the certificate is signed (either manually or by facsimile)
- -------
by a transfer agent, or registered by a registrar, the signatures of those
officers may be facsimiles.
7.2 Rights of Corporation with Respect to Registered Owners. Prior
-------------------------------------------------------
to due presentation for transfer of registration of its shares, the Corporation
may treat the registered owner of the shares (or the beneficial owner of the
shares to the extent of any rights granted by a nominee certificate on file with
the Corporation pursuant to any procedure that may be established by the
Corporation in accordance with the Code) as the person exclusively entitled to
vote the shares, to receive any dividend or other distribution with respect to
the shares, and for all other purposes; and the Corporation shall not be bound
to recognize any equitable or other claim to or interest in the shares on the
part of any other person, whether or not it has express or other notice of such
a claim or interest, except as otherwise provided by law.
7.3 Transfers of Shares. Transfers of shares shall be made upon the
-------------------
books of the Corporation kept by the Corporation or by the transfer agent
designated to transfer the shares, only upon direction of the person named in
the certificate or by an attorney lawfully constituted in writing. Before a new
certificate is issued, the old certificate shall be surrendered for cancellation
or, in the case of a certificate alleged to have been lost, stolen, or
destroyed, the provisions of Section 7.5 of these Bylaws shall have been
complied with.
7.4 Duty of Corporation to Register Transfer. Notwithstanding any of
----------------------------------------
the provisions of Section 7.3 of these Bylaws, the Corporation is under a duty
to register the transfer of its shares only if: (a) the share certificate is
endorsed by the appropriate person or persons; (b) reasonable assurance is given
that each required endorsement is genuine and effective; (c) the Corporation has
no duty to inquire into adverse claims or has discharged any such duty; (d) any
applicable law relating to the collection of taxes has been complied with; (e)
the transfer is in fact rightful or is to a bona fide purchaser; and (f) the
transfer is in compliance with applicable provisions of any transfer
restrictions of which the Corporation shall have notice.
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<PAGE>
7.5 Lost, Stolen, or Destroyed Certificates. Any person claiming a
---------------------------------------
share certificate to be lost, stolen, or destroyed shall make an affidavit or
affirmation of this claim in such a manner as the Corporation may require and
shall, if the Corporation requires, give the Corporation a bond of indemnity in
form and amount, and with one or more sureties satisfactory to the Corporation,
as the Corporation may require, whereupon an appropriate new certificate may be
issued in lieu of the one alleged to have been lost, stolen or destroyed.
7.6 Fixing of Record Date. For the purpose of determining
---------------------
shareholders (a) entitled to notice of or to vote at any meeting of shareholders
or, if necessary, any adjournment thereof, (b) entitled to receive payment of
any distribution or dividend, or (c) for any other proper purpose, the Board of
Directors may fix in advance a date as the record date. The record date may not
be more than 70 days (and, in the case of a notice to shareholders of a
shareholders' meeting, not less than 10 days) prior to the date on which the
particular action, requiring the determination of shareholders, is to be taken.
A separate record date may be established for each Voting Group entitled to vote
separately on a matter at a meeting. A determination of shareholders of record
entitled to notice of or to vote at a meeting of shareholders shall apply to any
adjournment of the meeting, unless the Board of Directors shall fix a new record
date for the reconvened meeting, which it must do if the meeting is adjourned to
a date more than 120 days after the date fixed for the original meeting.
7.7 Record Date if None Fixed. If no record date is fixed as
-------------------------
provided in Section 7.6, then the record date for any determination of
shareholders that may be proper or required by law shall be, as appropriate, the
date on which notice of a shareholders' meeting is mailed, the date on which the
Board of Directors adopts a resolution declaring a dividend or authorizing a
distribution, or the date on which any other action is taken that requires a
determination of shareholders.
ARTICLE EIGHT
Indemnification
8.1 Indemnification of Directors. The Corporation shall indemnify
----------------------------
and hold harmless any director of the Corporation (an "Indemnified Person") who
was or is a party, or is threatened to be made a party, to any threatened,
pending or completed action, suit, or proceeding, whether civil, criminal,
administrative, or investigative, whether formal or informal, including any
action or suit by or in the right of the Corporation (for purposes of this
Article Eight, collectively, a "Proceeding") because he or she is or was a
director, officer, employee, or agent of the Corporation, against any judgment,
settlement, penalty, fine, or reasonable expenses (including, but not limited
to, attorneys' fees and disbursements, court costs, and expert witness fees)
incurred with respect to the Proceeding (for purposes of this Article Eight, a
"Liability"), provided, however, that no indemnification shall be made for: (a)
any appropriation by a director, in violation of the director's duties, of any
business opportunity of the corporation; (b) any acts or omissions of a director
that involve intentional misconduct or a knowing violation of
-5-
<PAGE>
law; (c) the types of liability set forth in Code Section 14-2-832; or (d) any
transaction from which the director received an improper personal benefit.
8.2 Indemnification of Others. The Board of Directors shall have the
-------------------------
power to cause the Corporation to provide to officers, employees, and agents of
the Corporation all or any part of the right to indemnification permitted for
such persons by appropriate provisions of the Code. Persons to be indemnified
may be identified by position or name, and the right of indemnification may be
different for each of the persons identified. Each officer, employee, or agent
of the Corporation so identified shall be an "Indemnified Person" for purposes
of the provisions of this Article Eight.
8.3 Other Organizations. The Corporation shall provide to each director,
-------------------
and the Board of Directors shall have the power to cause the Corporation to
provide to any officer, employee, or agent, of the Corporation who is or was
serving at the Corporation's request as a director, officer, partner, trustee,
employee, or agent of another corporation, partnership, joint venture, trust,
employee benefit plan, or other enterprise all or any part of the right to
indemnification and other rights of the type provided under Sections 8.1, 8.2,
8.4, and 8.10 of this Article Eight (subject to the conditions, limitations, and
obligations specified in those Sections) permitted for such persons by
appropriate provisions of the Code. Persons to be indemnified may be identified
by position or name, and the right of indemnification may be different for each
of the persons identified. Each person so identified shall be an "Indemnified
Person" for purposes of the provisions of this Article Eight.
8.4 Advances. Expenses (including, but not limited to, attorneys' fees
--------
and disbursements, court costs, and expert witness fees) incurred by an
Indemnified Person in defending any Proceeding of the kind described in Sections
8.1 or 8.3, as to an Indemnified Person who is a director of the Corporation, or
in Sections 8.2 or 8.3, as to other Indemnified Persons, if the Board of
Directors has specified that advancement of expenses be made available to any
such Indemnified Person, shall be paid by the Corporation in advance of the
final disposition of such Proceeding as set forth herein. The Corporation shall
promptly pay the amount of such expenses to the Indemnified Person, but in no
event later than 10 days following the Indemnified Person's delivery to the
Corporation of a written request for an advance pursuant to this Section 8.4,
together with a reasonable accounting of such expenses; provided, however, that
-------- -------
the Indemnified Person shall furnish the Corporation a written affirmation of
his or her good faith belief that he or she has met the applicable standard of
conduct and a written undertaking and agreement to repay to the Corporation any
advances made pursuant to this Section 8.4 if it shall be determined that the
Indemnified Person is not entitled to be indemnified by the Corporation for such
amounts. The Corporation may make the advances contemplated by this Section 8.4
regardless of the Indemnified Person's financial ability to make repayment. Any
advances and undertakings to repay pursuant to this Section 8.4 may be unsecured
and interest-free.
8.5 Non-Exclusivity. Subject to any applicable limitation imposed by the
---------------
Code or the Articles of Incorporation, the indemnification and advancement of
expenses provided by or granted pursuant to this Article Eight shall not be
exclusive of any other rights to which a person
-6-
<PAGE>
seeking indemnification or advancement of expenses may be entitled under any
provision of the Articles of Incorporation, or any Bylaw, resolution, or
agreement specifically or in general terms approved or ratified by the
affirmative vote of holders of a majority of the shares entitled to be voted
thereon.
8.6 Insurance. The Corporation shall have the power to purchase and
---------
maintain insurance on behalf of any person who is or was a director, officer,
employee, or agent of the Corporation, or who, while serving in such a capacity,
is also or was also serving at the request of the Corporation as a director,
officer, trustee, partner, employee, or agent of any corporation, partnership,
joint venture, trust, employee benefit plan, or other enterprise, against any
Liability that may be asserted against or incurred by him or her in any such
capacity, or arising out of his or her status as such, whether or not the
Corporation would have the power to indemnify him or her against such liability
under the provisions of this Article Eight.
8.7 Notice. If the Corporation indemnifies or advances expenses to a
------
director under any of Sections 14-2-851 through 14-2-854 of the Code in
connection with a Proceeding by or in the right of the Corporation, the
Corporation shall, to the extent required by Section 14-2-1621 or any other
applicable provision of the Code, report the indemnification or advance in
writing to the shareholders with or before the notice of the next shareholders'
meeting.
8.8 Security. The Corporation may designate certain of its assets as
--------
collateral, provide self-insurance, establish one or more indemnification
trusts, or otherwise secure or facilitate its ability to meet its obligations
under this Article Eight, or under any indemnification agreement or plan of
indemnification adopted and entered into in accordance with the provisions of
this Article Eight, as the Board of Directors deems appropriate.
8.9 Amendment. Any amendment to this Article Eight that limits or
---------
otherwise adversely affects the right of indemnification, advancement of
expenses, or other rights of any Indemnified Person hereunder shall, as to such
Indemnified Person, apply only to Proceedings based on actions, events, or
omissions (collectively, "Post Amendment Events") occurring after such amendment
and after delivery of notice of such amendment to the Indemnified Person so
affected. Any Indemnified Person shall, as to any Proceeding based on actions,
events, or omissions occurring prior to the date of receipt of such notice, be
entitled to the right of indemnification, advancement of expenses, and other
rights under this Article Eight to the same extent as if such provisions had
continued as part of the Bylaws of the Corporation without such amendment. This
Section 8.9 cannot be altered, amended, or repealed in a manner effective as to
any Indemnified Person (except as to Post Amendment Events) without the prior
written consent of such Indemnified Person.
8.10 Agreements. The provisions of this Article Eight shall be deemed to
----------
constitute an agreement between the Corporation and each Indemnified Person
hereunder. In addition to the rights provided in this Article Eight, the
Corporation shall have the power, upon authorization by the Board of Directors,
to enter into an agreement or agreements providing to any Indemnified Person
indemnification rights substantially similar to those provided in this Article
Eight.
-7-
<PAGE>
8.11 Continuing Benefits. The rights of indemnification and advancement
-------------------
of expenses permitted or authorized by this Article Eight shall, unless
otherwise provided when such rights are granted or conferred, continue as to a
person who has ceased to be a director, officer, employee, or agent and shall
inure to the benefit of the heirs, executors, and administrators of such person.
8.12 Successors. For purposes of this Article Eight, the term
----------
"Corporation" shall include any corporation, joint venture, trust, partnership,
or unincorporated business association that is the successor to all or
substantially all of the business or assets of this Corporation, as a result of
merger, consolidation, sale, liquidation, or otherwise, and any such successor
shall be liable to the persons indemnified under this Article Eight on the same
terms and conditions and to the same extent as this Corporation.
8.13 Severability. Each of the Sections of this Article Eight, and each
------------
of the clauses set forth herein, shall be deemed separate and independent, and
should any part of any such Section or clause be declared invalid or
unenforceable by any court of competent jurisdiction, such invalidity or
unenforceability shall in no way render invalid or unenforceable any other part
thereof or any separate Section or clause of this Article Eight that is not
declared invalid or unenforceable.
8.14 Additional Indemnification. In addition to the specific
--------------------------
indemnification rights set forth herein, the Corporation shall indemnify each of
its directors and such of its officers as have been designated by the Board of
Directors to the full extent permitted by action of the Board of Directors
without shareholder approval under the Code or other laws of the State of
Georgia as in effect from time to time.
-8-
<PAGE>
EXHIBIT 5.1
-----------
[LETTERHEAD OF MORRIS, MANNING & MARTIN, L.L.P.]
November 20, 1996
Buckhead Community Bancorp, Inc.
3379 Peachtree Road, N.E., Suite 100
Atlanta, Georgia 30326
Re: Registration Statement on Form S-1
Gentlemen:
We have acted as counsel for Buckhead Community Bancorp, Inc., a Georgia
corporation (the "Company"), in connection with the registration under the
Securities Act of 1933, as amended, pursuant to a Registration Statement on Form
S-1, of a proposed offering of up to 12,000,000 shares of the Company's common
stock, $.01 par value per share ("Shares"), by certain shareholders of the
Company.
We have examined such documents, corporate records, and other instruments
as we have considered necessary and advisable for purposes of rendering this
opinion. Based upon and subject to the foregoing, we are of the opinion that
the Shares have been duly authorized and validly issued, and are fully paid and
nonassessable.
This opinion 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.
We hereby consent to the filing of this Opinion as an exhibit to the
Company's registration statement on Form S-1 and to the reference to our firm
under the caption "Legal Matters" in the Prospectus contained in the
Registration Statement.
Very truly yours,
MORRIS, MANNING & MARTIN, L.L.P.
/s/ Larry W. Shackelford
Larry W. Shackelford
<PAGE>
EXHIBIT 10.1
------------
EMPLOYMENT AGREEMENT
--------------------
THIS EMPLOYMENT AGREEMENT (this "Agreement") dated as of November 1, 1996,
is made by and between BUCKHEAD COMMUNITY BANCORP, INC., a Georgia corporation
(the "Company" or the "Employer"), which is the proposed bank holding company
for Buckhead National Bank (Proposed), a proposed national bank with its
principal offices to be located in Atlanta, Fulton County, Georgia (the "Bank"),
and DONALD D. THOMPSON, an individual resident of the State of Georgia (the
"Executive").
BACKGROUND STATEMENTS:
----------------------
WHEREAS, the Company is in the process of organizing the Bank, and the
Executive has agreed to serve as the President and Chief Executive Officer of
the Bank. Upon organization of the Bank, the Company and the Executive
contemplate that this Agreement will be assigned by the Company to the Bank and
that the Bank will assume all the duties and obligations of the Company
hereunder; and
WHEREAS, the Company recognizes that the Executive's contribution to the
growth and success of the Bank during its organization and initial years of
operations will be a significant factor in the success of the Bank, and desires
to provide for the employment of the Executive in a manner which will reinforce
and encourage the dedication of the Executive to the Bank and promote the best
interests of the Bank and its shareholders; and
WHEREAS, the Executive is willing to serve the Company (and, after
assignment of this Agreement by the Company to the Bank, the Bank) on the terms
and conditions herein provided.
In consideration of the foregoing, the mutual covenants contained herein,
and other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto, intending to be legally bound,
hereby agree as follows:
1. Definitions. For all purposes of this Agreement, the following terms
-----------
shall have the following meanings:
(a) "Accrued Compensation" shall mean an amount which includes all
amounts earned or accrued by the Executive hereunder through the Termination
Date, but not paid as of the Termination Date, including (i) base salary and any
vacation time earned but not used by the Executive, (ii) reimbursement for
reasonable and necessary expenses incurred by the Executive on behalf of the
Employer during the period ending on the Termination Date, and (iii) bonuses and
incentive compensation owed to the Executive by the Employer.
(b) "Board" shall mean the Board of Directors of the Employer.
<PAGE>
(c) The termination of the Executive's employment shall be for
"Cause" if such termination is a result of:
(i) any act or conduct that (A) constitutes, on the part of the
Executive, fraud, dishonesty, gross malfeasance of duty, or conduct
grossly inappropriate to the Executive's office, and (B) is likely to
lead to material injury (monetarily or otherwise) to the Employer or
its shareholders, or resulted or was intended to result in direct or
indirect gain to or personal enrichment of the Executive;
(ii) the conviction (from which no appeal may be or is timely
taken) of the Executive of a felony or a crime involving moral
turpitude; or
(iii) the suspension or removal of the Executive as the
President of the Bank by federal or state banking regulatory
authorities acting under lawful authority pursuant to provisions of
federal or state law or regulation which may be in effect from time to
time;
provided, however, that in the case of clause (i) above, such conduct shall
- -------- -------
not constitute Cause unless (A) there shall have been delivered to the Executive
a written notice setting forth with specificity the reasons that the Board
believes the Executive's conduct constitutes the criteria set forth in clause
(i), (B) the Executive shall have been provided the opportunity to be heard in
person by the Board (with the assistance of the Executive's counsel if the
Executive so desires), and (C) after such hearing, the termination is evidenced
by a resolution adopted by at least two-thirds of the members of the Board
(other than the Executive).
(d) "Confidential Information" shall mean any and all data, trade
secrets (as defined under applicable law), formulae, processes, documents,
agreements or other information, whether or not in writing, transferred,
conveyed, delivered, disclosed, divulged, disseminated or otherwise obtained
from the Employer, any of its affiliates or any of their respective directors,
officers, employees, agents, accountants, counsel, investment bankers or other
representatives (each, its "Representative") by the Executive on and after the
date hereof in connection with or in any way relating to the Employer or any of
its affiliates, including but not limited to, information concerning (i) the
business operations and prospects or internal structure of the Employer or any
of its affiliates; (ii) the identities or characteristics of the actual or
potential customers or clients of the Employer or any of its affiliates, or
(iii) services, products and pricing structure of the Employer or any of its
affiliates. Notwithstanding the foregoing sentence, this Agreement shall not
apply to any information, other than trade secrets, that is already known to the
Executive at the time such information is disclosed by the Employer or its
affiliate or a Representative thereof to the Executive or that, before being
disclosed to the Executive, (I) has become publicly known through no wrongful
act of the Executive, (II) has been rightfully received by the Executive from a
third party without restriction on disclosure and without breach of this
Agreement, any similar agreement or any legal or equitable duty, or (III) has
been furnished by the Company to a third party without a similar restriction on
disclosure by such third party.
-2-
<PAGE>
(e) "Disability" shall mean a physical or mental infirmity which
impairs the Executive's ability to substantially perform his duties with the
Employer for a period of 180 consecutive days, as determined by an independent
physician selected with the approval of both the Employer and the Executive.
(f) "Employer" shall mean the Company prior to the assignment by it
of this Agreement to the Bank and the Bank after such assignment.
(g) "Notice of Termination" shall mean a written notice of
termination from the Employer or the Executive which specifies an effective date
of termination, indicates the specific termination provision in this Agreement
relied upon, and sets forth in reasonable detail the facts and circumstances
claimed to provide a basis for termination of the Executive's employment under
the provision so indicated.
(h) "Opening Date" shall mean the date the Bank commences banking
operations following issuance of its charter and commencement of insurance of
its deposits.
(i) "Termination Date" shall mean, in the case of the Executive's
death, his date of death, and in all other cases, the date specified in the
Notice of Termination.
2. Employment. The Employer shall employ the Executive, and the
----------
Executive shall serve and perform the services for the Employer, as the
President and Chief Executive Officer of the Employer upon the terms and
conditions and for the period set forth herein. The Executive shall have such
authority and responsibilities consistent with his position as are set forth in
the Employer's Bylaws or assigned by the Board from time to time. The Executive
shall devote his full business time, attention, skill and efforts to the
performance of his duties hereunder, except during periods of illness or
vacation and leaves of absence from employment consistent with the Employer's
employment policy as in effect from time to time. The Executive may devote
reasonable periods to service as a director or advisor to other organizations,
to charitable and community activities, and to managing his personal
investments, provided that such activities do not materially interfere with the
--------
performance of any of his duties hereunder and are not, directly or indirectly,
in conflict or competitive with, or adverse to, the interests of the Employer or
its shareholders.
3. Term. Unless earlier terminated as provided herein, the Executive's
----
employment under this Agreement shall commence on the date hereof and continue
until the termination thereof pursuant to Section 5 hereof (the "Term").
4. Compensation and Benefits. During the Term, the Executive shall
-------------------------
receive the following compensation and benefits:
(a) Prior to the Opening Date, the Employer shall pay the Executive a
salary of forty-five thousand dollars ($45,000) per annum, in accordance with
the Employer's standard payroll procedures and policies as in effect from time
to time. From and after the Opening Date, the Employer shall pay the Executive
an annual salary of ninety thousand dollars ($90,000), plus
-3-
<PAGE>
his yearly medical insurance premium, in accordance with the Employer's standard
payroll procedures and policies as in effect from time to time.
(b) Beginning as of the Opening Date, the Executive shall participate
in all retirement, welfare and other benefit plans or programs of the Employer
now or hereafter applicable generally to employees of the Employer or to a class
of employees that includes senior executives of the Employer; provided that
--------
during any period during the Term that the Executive is subject to a Disability,
and during the 180-day period of physical or mental infirmity leading up to the
Executive's Disability, the amount of the Executive's compensation provided
under this Section 4 shall be reduced by the sum of the amounts, if any, paid to
the Executive for the same period under any disability benefit or pension plan
of the Employer or any of its affiliates.
(c) Beginning as of the Opening Date, the Employer shall provide the
Executive with a term life insurance policy providing for death benefits
totaling two hundred fifty thousand dollars ($250,000) payable to the
Executive's designated beneficiary, and the Executive shall cooperate at all
times with the Employer in the securing and maintenance of such policy.
(d) Beginning as of the date hereof, the Company shall provide the
Executive with an automobile (at a cost not to exceed $9,000 per year) owned or
leased by the Company of a make and model appropriate for the Executive's
employment status as provided hereunder.
(e) Beginning as of the Opening Date, the Employer shall pay for the
reasonable costs and expenses of the Executive's attendance each year during the
term of the annual meeting of the Community Bankers Association of Georgia and
the Independent Bankers Association of America.
(f) Beginning as of the Opening Date, the Employer shall pay the
reasonable annual dues and membership fees for membership by the Executive in
such civic, business and social organizations or clubs appropriate to his duties
hereunder as the Board shall determine.
(g) Beginning as of the Date hereof, the Employer shall reimburse the
Executive for reasonable travel and other expenses related to the Executive's
duties which are incurred and accounted for in accordance with the normal
practices of the Employer, subject to the presentment by the Executive to the
Employer of appropriate vouchers or other customary evidence of expense
verification.
(h) The Employer shall reimburse the Executive for any actual
expenses reasonably incurred by the Executive in moving his immediate family and
household goods from LaFayette, Alabama to Atlanta, Georgia in an amount not to
exceed five thousand dollars ($5,000), subject to the presentment by the
Executive to the Employer of appropriate vouchers or other customary evidence of
expense verification.
5. Termination.
-----------
-4-
<PAGE>
(a) The Executive's employment under this Agreement may be terminated
prior to the end of the Term only as follows:
(i) automatically upon the death of the Executive;
(ii) by the Employer due to the Disability of the Executive upon
delivery by the Employer of a Notice of Termination to the Executive;
(iii) by the Employer for Cause upon delivery by the Employer of
a Notice of Termination to the Executive;
(iv) by the Employer other than for Cause effective upon the
60th day after delivery by the Employer of a Notice of Termination to
the Executive;
(v) by the Employer, if its effort to organize the Bank is
abandoned at any time, upon delivery by the Employer of a Notice of
Termination to the Executive; and
(vi) by the Executive effective upon the 60th day after delivery
of a Notice of Termination to the Employer.
(b) If the Executive's employment with the Employer is terminated
during the Term for any reason by either the Employer or the Executive, the
Employer shall pay to the Executive (or, in the case of his death, the
Executive's estate) within thirty (30) days after the Termination Date a lump
sum cash payment equal to the Accrued Compensation.
6. Confidential Information. The Executive shall not, at any time,
------------------------
either during the Term of his employment or following the Termination Date, use
or disclose, reveal, disseminate or otherwise make known to any other person,
directly or indirectly, any Confidential Information of the Employer, except in
fulfillment of his duties as the Executive during his employment by the Employer
pursuant to the terms hereof. Upon any termination or expiration of this
Agreement, or at any time upon the Employer's request, the Executive shall
deliver to the Employer (a) all of the Employer's records, documents, customer
lists, papers, notes, software, computers, modems, diskettes, instruments,
tools, devices, plans, drawings and other materials, and any copies thereof, in
the Executive's possession or control that relate in any way to the business of
the Employer or any of its affiliates, and (b) all other property relating to
the employment of the Executive by the Employer, including, without limitation,
company credit cards, telephone cards, office keys, desk keys and security
passes.
7. Restrictive Covenants.
---------------------
(a) The Executive shall not, during the Term and for a period of
three (3) years after the Termination Date, either for himself or on behalf of
any other person, directly or indirectly, without receipt of the prior written
consent of the Employer, (i) serve as a director, officer at the vice president
level or higher, or organizer or promoter of, or provide executive management
services to, any bank, savings bank, trust company bank and trust company,
savings
-5-
<PAGE>
and loan association or other financial institution or holding company
thereof located or conducting business within Fulton County, Georgia, (ii)
solicit or aid in the solicitation of any Major Customer (as defined herein) for
the purpose of providing banking services to such Major Customer, or (iii)
solicit or aid in the solicitation of any Employee (as defined herein) of the
Employer for employment of such Employee by any other party. For purposes of
this Section 7, a "Major Customer" shall mean any customer of the Employer that
Employee has contacted, negotiated with, or performed any services on behalf of,
during the Term or the last 24 months of the Term, whichever is shorter, and
that has maintained or purchased from the Employer at any time during such
period deposits, mutual funds or other investments in excess of $100,000, and an
"Employee" shall mean any individual who was employed by the Employer, or any of
its affiliates as of the Termination Date or at any time during the 12 month
period prior to such date. The Executive acknowledges and agrees that each of
the restrictive covenants contained in this Section 7 are reasonable and
necessary to protect the legitimate economic interests of the Employer created
by this Agreement.
(b) The Executive represents and warrants to the Employer that the
Executive is not a party to any employment or other agreement which prohibits or
limits the Executive from performing any of the duties and services contemplated
to be performed by the Executive under this Agreement.
8. Successors; Binding Agreement.
-----------------------------
(a) This Agreement shall be binding upon and shall inure to the
benefit of the Employer or its successors and assigns.
(b) Neither this Agreement nor any right or interest hereunder shall
be assignable or transferable by the Executive, his beneficiaries or legal
representatives, except by will or by the laws of descent and distribution.
This Agreement shall inure to the benefit of and be enforceable by the
Executive's legal personal representative. The Company may assign this
Agreement in its entirety to the Bank.
9. Notice. For the purposes of this Agreement, notices and all other
------
communications provided for in the Agreement (including the Notice of
Termination) shall be in writing and shall be deemed to have been duly given
when personally delivered or sent by certified mail, return receipt requested,
postage prepaid, addressed to the respective addresses last given by each party
to the other, provided that all notices to the Employer shall be directed to the
--------
attention of the Board with a copy to the Secretary of the Employer. All
notices and communications shall be deemed to have been received on the date of
delivery thereof, except that notice of change of address shall be effective
only upon receipt.
10. Settlement of Claims. The Employer's obligation to make the payments
--------------------
provided for in this Agreement and otherwise to perform its obligations
hereunder shall not be affected by any circumstances, including, without
limitation, any set-off, counterclaim, recoupment, defense, or other right which
the Employer may have against the Executive or any other person. The Employer
may, however, withhold from any benefits payable under this Agreement all
federal,
-6-
<PAGE>
state, city, or other taxes as shall be required pursuant to any law or
governmental regulation or ruling.
11. Modification and Waiver. No provisions of this Agreement may be
-----------------------
modified, waived or discharged unless such waiver, modification or discharge is
agreed to in writing and signed by the Executive and the Employer. No waiver by
any party hereto at any time of any breach by the other party hereto of, or
compliance with, any condition or provision of this Agreement to be performed by
such other party shall be deemed a waiver of similar or dissimilar provisions or
conditions at the same or at any prior or subsequent time.
12. Governing Law. This Agreement shall be governed by and construed and
-------------
enforced in accordance with the laws of the State of Georgia without giving
effect to the conflict of laws principles thereof. Any action brought by any
party to this Agreement shall be brought and maintained in a court of competent
jurisdiction in Fulton County in the State of Georgia.
13. Severability. The parties agree that the provisions of this Agreement
------------
are severable and the invalidity or unenforceability of any provision in whole
or part shall not affect the validity or enforceability of any enforceable part
of such provision or any other provisions hereof. It is further agreed that the
courts may "blue pencil" the provisions of this Agreement to provide for maximum
enforcement of such provisions.
14. Entire Agreement. This Agreement constitutes the entire agreement
----------------
between the parties hereto and supersedes all prior agreements, if any,
understandings and arrangements, oral or written, between the parties hereto
with respect to the subject matter hereof.
15. Headings. The headings of Sections herein are included solely for
--------
convenience of reference and shall not control the meaning or interpretation of
any of the provisions of this Agreement.
16. Counterparts. This Agreement may be executed in one or more
------------
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.
17. Equal Participation. Each of the parties hereto acknowledges and
-------------------
agrees that such party has participated equally in the negotiation and
preparation of this Agreement and the rule that this Agreement or any term or
provision hereof shall be construed against the drafter hereof shall not be
applied against either party hereto in enforcing this Agreement or interpreting
any term or provision hereof.
18. Remedies. It is further understood and agreed that money damages
--------
would not be a sufficient remedy for any breach of this Agreement by either
party or any of the Recipient Representatives and that either party shall be
entitled to equitable relief, including injunction and specific performance, as
a remedy for any such breach. Such remedies shall not be deemed to be the
exclusive remedies for a breach by the receiving party or any of the Recipient
Representatives but shall be in addition to all other remedies available at law
or equity. In the event of litigation relating to this Agreement, if a court of
competent jurisdiction determines that
-7-
<PAGE>
either party or any of such party's Recipient Representatives have breached this
Agreement, then the breaching party shall be liable and pay to the other the
reasonable legal fees incurred by such party in connection with such litigation,
including any appeal therefrom.
19. Taxes. All payments made to the Executive under this Agreement shall
-----
be made net of all required withholding of federal, state and local income and
employment taxes.
IN WITNESS WHEREOF, the Company has caused this Agreement to be executed
and its seal to be affixed hereunto by its officers thereunto duly authorized,
and the Executive has signed and sealed this Agreement, effective as of the date
first above written.
Company:
-------
BUCKHEAD COMMUNITY BANCORP, INC.
ATTEST:
By: By:
------------------------- --------------------------
Malcolm C. Garland R. Charles Loudermilk, Sr.
Secretary Chairman of the Board
[Corporate Seal]
Executive:
---------
(L.S.)
---------------------------------
Donald D. Thompson
-8-
<PAGE>
The Company hereby assigns all of its rights and obligations under this
Agreement to the Bank, and the Bank hereby assumes such obligations and invests
itself of such rights.
Company:
-------
BUCKHEAD COMMUNITY BANCORP, INC.
ATTEST:
By: By:
------------------------ ---------------------------------
Malcolm C. Garland R. Charles Loudermilk, Sr.
Secretary Chairman of the Board
[Corporate Seal]
Bank:
----
BUCKHEAD NATIONAL BANK
ATTEST:
By: By:
------------------------ ---------------------------------
Malcolm C. Garland R. Charles Loudermilk, Sr.
Secretary Chairman of the Board
[Bank Seal]
-9-
<PAGE>
EXHIBIT 10.2
------------
ESCROW AGREEMENT
THIS ESCROW AGREEMENT (this "Agreement") is entered into and effective
as of the ___ day of ______________, 1996, by and between Buckhead Community
Bancorp, Inc., a Georgia corporation (the "Company"), and SunTrust Bank, Atlanta
(the "Escrow Agent").
W I T N E S S E T H:
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WHEREAS, the Company proposes to offer and sell (the "Offering") up to
2,400,000 shares of common stock, $.01 par value per share (the "Shares"), to
investors at $5.00 per Share pursuant to a registered public offering; and
WHEREAS, the Company desires to establish an escrow for funds
forwarded by subscribers for Shares, and the Escrow Agent is willing to serve as
Escrow Agent upon the terms and conditions herein set forth.
NOW, THEREFORE, in consideration of the premises and other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:
1. Deposit with Escrow Agent.
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(a) The Escrow Agent agrees that it will from time to time accept, in
its capacity as escrow agent, subscription funds for the Shares (the "Escrowed
Funds") received by it from subscribers or from the Company when it has received
checks from subscribers. All checks shall be made payable to the Escrow Agent.
If any check does not clear normal banking channels in due course, the Escrow
Agent will promptly notify the Company. Any check which does not clear normal
banking channels and is returned by the drawer's bank to Escrow Agent will be
promptly turned over to the Company along with all other subscription documents
relating to such check. Any check received that is made payable to a party other
than the Escrow Agent shall be returned to the Company for return to the proper
party. The Company in its sole and absolute discretion may reject any
subscription for Shares for any reason and upon such rejection it shall notify
and instruct the Escrow Agent in writing to return the Escrowed Funds by check
made payable to the subscriber. If the Company rejects or cancels any
subscription for any reason the Company will retain any interest earned on the
Escrowed Funds to help defray organizational costs.
(b) Subscription agreements for the Shares shall be reviewed for
accuracy by the Company and, immediately thereafter, the Company shall deliver
to the Escrow Agent the following information: (i) the name and address of the
subscriber; (ii) the number of Shares subscribed for by such subscriber;
(iii) the subscription price paid by such subscriber; (iv) the subscriber's tax
identification number certified by such subscriber; and (v) a copy of the
subscription agreement.
<PAGE>
(c) Subscribers may pay a deposit on their subscription price after
receipt of the Preliminary Prospectus used by the Company in the offering, but
prior to the delivery of a final Prospectus and confirmation of subscription to
the subscribers. Such deposit will be at least 10% of the total subscription
price for the number of shares subscribed for, and will be refundable if the
subscription is not confirmed by the subscriber when the final Prospectus
becomes available.
2. Investment of Escrowed Funds. Upon collection of each check by
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the Escrow Agent, the Escrow Agent shall invest the funds in deposit accounts or
short-term certificates of deposit which are fully insured by the Federal
Deposit Insurance Corporation or another agency of the United States government,
short-term securities issued or fully guaranteed by the United States
government, federal funds, or such other investments as the Escrow Agent and the
Company shall agree. The Company shall provide the Escrow Agent with
instructions from time to time concerning in which of the specific investment
instruments described above the Escrowed Funds shall be invested, and the Escrow
Agent shall adhere to such instructions. Unless and until otherwise instructed
by the Company, the Escrow Agent shall by means of a "sweep" or other automatic
investment program invest the Escrowed Funds in blocks of not less than $100,000
in securities issued or fully guaranteed by the United States government and, to
the extent not so invested, in blocks of $10,000 in federal funds. Interest and
other earnings shall start accruing on such funds as soon as such funds would be
deemed to be available for access under applicable banking laws and pursuant to
the Escrow Agent's own banking policies.
3. Distribution of Escrowed Funds. The Escrow Agent shall
------------------------------
distribute the Escrowed Funds in the amounts, at the times, and upon the
conditions hereinafter set forth in this Agreement.
(a) If at any time on or prior to September 30, 1997, or such
subsequent extension date not later than March 31, 1998 (the "Closing Date"),
(i) the Escrow Agent has certified to the Company in writing that the Escrow
Agent has received at least $7,700,000 in Escrowed Funds which are collected
funds, and (ii) the Escrow Agent has received a certificate from the President
or the Chairman of the Board of the Company that all other conditions to the
release of funds as described in the Company's Registration Statement filed with
the Securities and Exchange Commission pertaining to the public offering have
been met, then the Escrow Agent shall deliver the Escrowed Funds to the Company
to the extent such Escrowed Funds are collected funds. If any portion of the
Escrowed Funds are not collected funds, then the Escrow Agent shall notify the
Company of such facts and shall distribute such funds to the Company only after
such funds become collected funds. For purposes of this Agreement, "collected
funds" shall mean all funds received by the Escrow Agent which have cleared
normal banking channels. In all events, the Escrow Agent shall deliver not less
than $7,700,000 in collected funds to the Company, except as provided in
Paragraph 3(b) hereof.
(b) If the Escrowed Funds do not, on or prior to the Closing Date,
become deliverable to the Company based on failure to meet the conditions
described in Paragraph 3(a), or if the Company terminates the offering at any
time prior to the Closing Date and delivers written notice to the Escrow Agent
of such termination (the "Termination Notice"), the Escrow Agent shall return
the Escrowed Funds which are collected funds as directed in writing by the
Company to the respective subscribers in amounts equal to the subscription
amount theretofore paid by each of
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<PAGE>
them. All uncleared checks representing Escrowed Funds which are not collected
funds as of the Initial Closing Date shall be collected by the Escrow Agent, and
together with all related subscription documents thereof shall be delivered to
the Company by the Escrow Agent, unless the Escrow Agent is otherwise
specifically directed in writing by the Company.
4. Distribution of Interest. Any interest earned on the Escrowed
------------------------
Funds shall be distributed to the subscribers simultaneous with the release of
the Escrowed Funds (whether to the subscribers or the Company) based on the
proportion which the amount of collected funds held in escrow for the benefit of
each subscriber and the number of days such collected funds have been held bears
to the total of the daily collected balances of Escrowed Funds during the term
of this Agreement.
5. Fees of Escrow Agent. The Company shall pay the Escrow Agent an
--------------------
annual fee of $1,500.00 for its services hereunder. In addition, the Company
will pay a service charge of $5.00 per subscriber. All of these fees are
payable upon the release of the Escrowed Funds, and the Escrow Agent is hereby
authorized to deduct such fees from the Escrowed Funds prior to any release
thereof pursuant to Section 3 hereof.
6. Liability of Escrow Agent.
-------------------------
(a) In performing any of its duties under this Agreement, or upon the
claimed failure to perform its duties hereunder, the Escrow Agent shall not be
liable to anyone for any damages, losses or expenses which it may incur as a
result of the Escrow Agent so acting, or failing to act; provided, however, the
Escrow Agent shall be liable for damages arising out of its willful default or
misconduct or its gross negligence under this Agreement. Accordingly, the
Escrow Agent shall not incur any such liability with respect to (i) any action
taken or omitted to be taken in good faith upon advice of its counsel or counsel
for the Company which is given with respect to any questions relating to the
duties and responsibilities of the Escrow Agent hereunder; or (ii) any action
taken or omitted to be taken in reliance upon any document, including any
written notice or instructions provided for this Escrow Agreement, not only as
to its due execution and to the validity and effectiveness of its provisions but
also as to the truth and accuracy of any information contained therein, if the
Escrow Agent shall in good faith believe such document to be genuine, to have
been signed or presented by a proper person or persons, and to conform with the
provisions of this Agreement.
(b) The Company agrees to indemnify and hold harmless the Escrow
Agent against any and all losses, claims, damages, liabilities and expenses,
including, without limitation, reasonable costs of investigation and counsel
fees and disbursements which may be imposed by the Escrow Agent or incurred by
it in connection with its acceptance of this appointment as Escrow Agent
hereunder or the performance of its duties hereunder, including, without
limitation, any litigation arising from this Escrow Agreement or involving the
subject matter thereof; except, that if the Escrow Agent shall be found guilty
of willful misconduct or gross negligence under this Agreement, then, in that
event, the Escrow Agent shall bear all such losses, claims, damages and
expenses.
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<PAGE>
(c) If a dispute ensues between any of the parties hereto which, in
the opinion of the Escrow Agent, is sufficient to justify its doing so, the
Escrow Agent shall retain legal counsel of its choice as it reasonably may deem
necessary to advise it concerning its obligations hereunder and to represent it
in any litigation to which it may be a part by reason of this Agreement. The
Escrow Agent shall be entitled to tender into the registry or custody of any
court of competent jurisdiction all money or property in its hands under the
terms of this Agreement, and to file such legal proceedings as it deems
appropriate, and shall thereupon be discharged from all further duties under
this Agreement. Any such legal action may be brought in any such court as the
Escrow Agent shall determine to have jurisdiction thereof. In connection with
such dispute, the Company shall indemnify the Escrow Agent against its court
costs and reasonable attorney's fees incurred.
(d) The Escrow Agent may resign at any time upon giving thirty (30)
days written notice to the Company. If a successor escrow agent is not appointed
by Company within thirty (30) days after notice of resignation, the Escrow Agent
may petition any court of competent jurisdiction to name a successor escrow
agent and the Escrow Agent herein shall be fully relieved of all liability under
this Agreement to any and all parties upon the transfer of the Escrowed Funds
and all related documentation thereto, including appropriate information to
assist the successor escrow agent with the reporting of earnings of the Escrowed
Funds to the appropriate state and federal agencies in accordance with the
applicable state and federal income tax laws, to the successor escrow agent
designated by the Company appointed by the court.
7. Appointment of Successor. The Company may, upon the delivery of
------------------------
thirty (30) days written notice appointing a successor escrow agent to the
Escrow Agent, terminate the services of the Escrow Agent hereunder. In the
event of such termination, the Escrow Agent shall immediately deliver to the
successor escrow agent selected by the Company, all documentation and Escrowed
Funds including interest earnings thereon in its possession, less any fees and
expenses due to the Escrow Agent or required to be paid by the Escrow Agent to a
third party pursuant to this Agreement.
8. Notice. All notices, requests, demands and other communications
------
or deliveries required or permitted to be given hereunder shall be in writing
and shall be deemed to have been duly given three days after having been
deposited for mailing if sent by registered mail, or certified mail return
receipt requested, or delivery by courier, to the respective addresses set forth
below:
<TABLE>
<S> <C>
If to the subscribers for Shares: To their respective addresses as specified in their
Subscription Agreements.
The Company: Buckhead Community Bancorp, Inc.
3379 Peachtree Road, N.E., Suite 100
Atlanta, Georgia 30326
Attention: Mr. Donald D. Thompson, President
With a copy to: Morris, Manning & Martin, L.L.P.
1600 Atlanta Financial Center
3343 Peachtree Road, N.E.
</TABLE>
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<PAGE>
<TABLE>
<S> <C>
Atlanta, Georgia 30326
Attention: Larry W. Shackelford, Esq.
The Escrow Agent: SunTrust Bank, Atlanta
Mail Code 121
Post Office Box 4418
Atlanta, Georgia 30302
Attention: Ms. Sandy Thompson
Corporate Trust Services Division
</TABLE>
9. Representations of the Company. The Company hereby acknowledges
------------------------------
that the status of the Escrow Agent with respect to the offering of the Shares
is that of agent only for the limited purposes herein set forth, and hereby
agrees it will not represent or imply that the Escrow Agent, by serving as the
Escrow Agent hereunder or otherwise, has investigated the desirability or
advisability in an investment in the Shares, or has approved, endorsed or passed
upon the merits of the Shares, nor shall the Company use the name of the Escrow
Agent in any manner whatsoever in connection with the offer or sale of the
Shares, other than by acknowledgment that it has agreed to serve as Escrow Agent
for the limited purposes herein set forth.
10. General.
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(a) This Agreement shall be governed by and construed and enforced in
accordance with the laws of the State of Georgia.
(b) The section headings contained herein are for reference purposes
only and shall not in any way affect the meaning or interpretation of this
Agreement.
(c) This Agreement sets forth the entire agreement and understanding
of the parties with regard to this escrow transaction and supersedes all prior
agreements, arrangements and understandings relating to the subject matter
hereof.
(d) This Agreement may be amended, modified, superseded or canceled,
and any of the terms or conditions hereof may be waived, only by a written
instrument executed by each party hereto or, in the case of a waiver, by the
party waiving compliance. The failure of any part at any time or times to
require performance of any provision hereof shall in no manner affect the right
at a later time to enforce the same. No waiver in any one or more instances by
any part of any condition, or of the breach of any term contained in this
Agreement, whether by conduct or otherwise, shall be deemed to be, or construed
as, a further or continuing waiver of any such condition or breach, or a waiver
of any other condition or of the breach of any other terms of this Agreement.
(e) This Agreement may be executed simultaneously in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
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<PAGE>
(f) This Agreement shall inure to the benefit of the parties hereto
and their respective administrators, successors and assigns. The Escrow Agent
shall be bound only by the terms of this Escrow Agreement and shall not be bound
by or incur any liability with respect to any other agreement or understanding
between the parties except as herein expressly provided. The Escrow Agent shall
not have any duties hereunder except those specifically set forth herein.
(g) No interest in any part to this Agreement shall be assignable in
the absence of a written agreement by and between all the parties to this
Agreement, executed with the same formalities as this original Agreement.
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<PAGE>
IN WITNESS WHEREOF, the parties have duly executed this Agreement as
the date first written above.
COMPANY: ESCROW AGENT:
BUCKHEAD COMMUNITY BANCORP, INC. SUNTRUST BANK, ATLANTA
By: By:
------------------------------ -----------------------------
Donald D. Thompson [Name:]
President [Title:]
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<PAGE>
EX 23.1
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
We have issued our report dated November 1, 1996, accompanying the financial
statements of Buckhead Community Bancorp, Inc. contained in the Registration
Statement (Form S-1) 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".
PORTER KEADLE MOORE, LLP
[SIGNATURE OF PORTER KEADLE
MOORE, LLP APPEARS HERE]
Atlanta, Georgia
November 20,1996
