<PAGE> 1
As filed with the Securities and Exchange Commission on April 2, 1997
Registration No.
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------------
FORM SB-2
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
----------------------
ROCKDALE NATIONAL BANCSHARES, INC.
(Name of small business issuer in its charter)
----------------------
GEORGIA 6712 58-2292563
(State or other (Primary Standard (IRS Employer
jurisdiction of Industrial Classification Identification
incorporation or Code Number) Number)
organization) ----------------------
P. O. BOX 82030
CONYERS, GEORGIA 30208
(770) 760-7573
(Address and telephone number
of principal executive offices)
----------------------
WILLIAM L. DANIEL
PRESIDENT AND CHIEF EXECUTIVE OFFICER
P.O. BOX 82030
CONYERS, GEORGIA 30208
(770) 760-7573
(Name, address and telephone number
of agent for service)
----------------------
Copies Requested to:
ROBERT C. SCHWARTZ, ESQ.
Smith, Gambrell & Russell
Suite 1800
3343 Peachtree Road, N.E.
Atlanta, Georgia 30326
(404) 264-2658
----------------------
APPROXIMATE DATE 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]
CALCULATION OF REGISTRATION FEE
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<CAPTION>
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Proposed Proposed
Title of each maximum maximum
class of Amount offering aggregate Amount of
securities to to be price offering registration
be registered registered per unit price fee
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock
of $1.00 par 800,000 $10.00 $8,000,000 $2,424
value
==========================================================================================================
</TABLE>
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES
AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE
A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT
SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF THE
SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SECTION 8(A), MAY
DETERMINE.
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<PAGE> 2
610,000 SHARES (MINIMUM)
800,000 SHARES (MAXIMUM)
COMMON STOCK
ROCKDALE NATIONAL BANCSHARES, INC.
A PROPOSED BANK HOLDING COMPANY FOR
ROCKDALE NATIONAL BANK, CONYERS, GEORGIA
A PROPOSED NATIONAL BANK
Rockdale National Bancshares, Inc., a Georgia corporation (the
"Company"), hereby offers for sale a minimum of 610,000 shares and a maximum of
800,000 shares of its common stock, $1.00 par value per share (the "Common
Stock"), at an offering price of $10.00 per share. The shares are offered on a
best-efforts, 610,000 share minimum basis by certain directors and executive
officers of the Company, who will receive no commissions for such sales.
The minimum subscription amount is 100 shares and once a subscription is
accepted by the Company, it cannot be withdrawn by the subscriber. The
offering, unless extended, will be terminated and all subscription funds,
together with any interest earned thereon, promptly returned if 610,000 shares
have not been subscribed by ______________, 1997. The Company may extend the
offering for three consecutive 90-day periods without notice to subscribers.
Subscriptions obtained in the offering may be accepted or rejected in whole or
in part by the Company for any reason. See "TERMS OF THE OFFERING."
All subscription funds tendered prior to fulfillment of the Offering
Conditions (as defined herein) will be deposited in an interest-bearing escrow
account with The Bankers Bank (the "Escrow Agent") pending satisfaction of the
Offering Conditions or termination or cancellation of the offering prior to the
satisfaction of the Offering Conditions. Once all Offering Conditions are met,
the Escrow Agent will release all subscription funds, and any profits thereon,
to the Company. The subscription funds of any person who subscribes for shares
following satisfaction of the Offering Conditions will not be placed in escrow,
but will be immediately available to the Company. Following satisfaction of
the Offering Conditions and release of escrow funds to the Company, subscribers
whose funds were originally placed in escrow and subscribers whose funds were
immediately available to the Company face the risk of loss of a portion of
their subscription funds if the Company and the Bank do not receive final
regulatory approvals. See "TERMS OF THE OFFERING - Conditions of the Offering"
and "RISK FACTORS -- Possible Loss of a Portion of Subscription Funds."
Prior to this offering, there has been no public market for the Common
Stock, and there can be no assurance that an established market for such stock
will develop. The Company presently does not intend to seek to list the Common
Stock on a national securities exchange or to qualify such Common Stock for
quotation on the National Association of Securities Dealers Automated Quotation
System. INVESTMENT IN THE SECURITIES INVOLVES CERTAIN RISKS. SEE "RISK
FACTORS" FOR INFORMATION THAT SHOULD BE CONSIDERED BY EACH PROSPECTIVE
INVESTOR.
THE SECURITIES OFFERED HEREBY ARE NOT SAVINGS ACCOUNTS OR SAVINGS
DEPOSITS AND ARE NOT INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR
ANY OTHER GOVERNMENTAL AGENCY.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION NOR HAS THE COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
<TABLE>
<CAPTION>
==========================================================================================================
Price Underwriting
to Discounts and Proceeds to
Public Commissions(1) the Company(2)
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Per Share(3) . . . . . $10.00 $ 0 $10.00
Total Minimum(4) . . . $6,100,000 $ 0 $6,100,000
Total Maximum(4) . . . $8,000,000 $ 0 $8,000,000
==========================================================================================================
(Footnotes on reverse side)
</TABLE>
<PAGE> 3
(Table on reverse side)
(1) The securities offered hereby will be sold on a best-efforts, 610,000
share minimum basis by certain directors and executive officers of the
Company and no commissions will be paid on such sales. See "TERMS OF
THE OFFERING."
(2) Before deducting offering expenses, estimated to be $41,500, including
registration fees, legal and accounting fees, printing, and other
miscellaneous expenses. See "USE OF PROCEEDS" for an itemized statement
of expenses.
(3) Prior to this offering, there has been no established market for the
shares of the Company's Common Stock. The offering price was
arbitrarily determined by the Board of Directors of the Company and does
not bear any relationship to the Company's assets, book value, net worth
or any other recognized criteria of value. In the event a market should
develop for the Common Stock after completion of this offering, there
can be no assurance that the market price will equal or exceed the
offering price herein.
(4) These securities are offered on a best-efforts, 610,000 share minimum
basis. If payment in cash for 610,000 shares is not received prior to
the Expiration Date (________________, 1997, unless extended to a date
not later than ______________, 1997, which is 270 days after the initial
offering period) the offering will terminate and all subscription funds,
together with any interest earned thereon, will be promptly returned to
subscribers. The organizers of the Company have indicated that they may
be willing to subscribe for additional shares in this offering, not to
exceed an aggregate of 200,000 shares or 32.8% of the minimum offering,
if necessary to help the Company sell out the offering which is
necessary to release subscription proceeds from the Subscription Escrow
Account, as defined herein. All purchases of shares of Common Stock by
the Company's organizers will be subject to affiliate resale limitations
under the Securities Act of 1933, as amended, and will be made on the
same terms as those made by other investors. The organizers of the
Company have represented to the Company that all purchases of Common
Stock will be made for investment purposes only and not with a view to
resell such shares. See "RISK FACTORS," "TERMS OF THE OFFERING," and
"ORGANIZERS AND PRINCIPAL STOCKHOLDERS."
The Company reserves the absolute right to cancel all subscriptions for
any reason whatsoever, at any time prior to the time that the Company withdraws
subscription funds from the Subscription Escrow Account and, at that time,
investors will be returned all subscription funds, adjusted for profits if any,
realized from the investment of such funds. See "TERMS OF THE OFFERING."
The Company is not a reporting company for purposes of the Securities
Exchange Act of 1934.
The date of this Prospectus is _______________, 1997.
<PAGE> 4
TABLE OF CONTENTS
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PAGE
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PROSPECTUS SUMMARY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
RISK FACTORS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
THE COMPANY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
TERMS OF THE OFFERING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
USE OF PROCEEDS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
DIVIDEND POLICY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
BUSINESS OF THE COMPANY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
BUSINESS OF THE BANK . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SUPERVISION AND REGULATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
ORGANIZERS AND PRINCIPAL STOCKHOLDERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
MANAGEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
CERTAIN TRANSACTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
DESCRIPTION OF COMMON STOCK . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
LEGAL PROCEEDINGS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
LEGAL MATTERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
EXPERTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
ADDITIONAL INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
INDEX TO FINANCIAL STATEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
</TABLE>
Appendix A - Escrow Agreement
Appendix B - Subscription Materials
NO DEALER, SALESMAN, ORGANIZER OF THE COMPANY OR OTHER PERSON HAS BEEN
AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATIONS, OTHER THAN
THOSE CONTAINED IN THIS PROSPECTUS, AND, IF GIVEN OR MADE, SUCH OTHER
INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED BY THE COMPANY. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO
SELL, OR A SOLICITATION OF AN OFFER TO BUY, ANY SECURITIES OTHER THAN THE
SHARES OF COMMON STOCK TO WHICH IT RELATES, OR ANY OFFER OF SUCH SHARES OF
COMMON STOCK TO ANY PERSON IN ANY STATE OR OTHER JURISDICTION IN WHICH SUCH
OFFER IS UNLAWFUL. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE
HEREUNDER SHALL UNDER ANY CIRCUMSTANCES CREATE ANY IMPLICATION THAT THERE HAS
BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF OR THAT
INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO ANY OF THE
DATES AS OF WHICH INFORMATION IS FURNISHED HEREIN OR THE DATE HEREOF. HOWEVER,
DURING THE PERIOD IN WHICH OFFERS OR SALES ARE BEING MADE HEREUNDER, THE
COMPANY IS REQUIRED TO UPDATE THE PROSPECTUS TO REFLECT ANY FACTS OR EVENTS
ARISING AFTER THE EFFECTIVE DATE OF THE REGISTRATION STATEMENT FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION WHICH REPRESENT A FUNDAMENTAL CHANGE IN THE
INFORMATION SET FORTH IN THE REGISTRATION STATEMENT.
UNTIL _________________, 1997 (90 DAYS FROM THE DATE OF THIS
PROSPECTUS), ALL DEALERS EFFECTING TRANSACTIONS IN THE COMMON STOCK, WHETHER OR
NOT PARTICIPATING IN THIS DISTRIBUTION, MAY BE REQUIRED TO DELIVER A
PROSPECTUS. THIS DELIVERY REQUIREMENT 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.
The Company intends to furnish its shareholders annual reports
containing audited financial statements.
<PAGE> 5
THE SECURITIES OFFERED HEREBY ARE NOT SAVINGS ACCOUNTS OR SAVINGS
DEPOSITS AND ARE NOT INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION
OR ANY OTHER GOVERNMENTAL AGENCY.
PROSPECTUS SUMMARY
The following summary is qualified in its entirety by the more detailed
information and financial statements appearing elsewhere in this Prospectus.
THE COMPANY
Rockdale National Bancshares, Inc. (the "Company") was organized under
the laws of the State of Georgia on February 13, 1997 for the purpose of
operating as a bank holding company pursuant to the federal Bank Holding
Company Act of 1956, as amended (the "Act"), and the Georgia Bank Holding
Company Act. The Company intends to use the minimum net proceeds of this
offering to purchase 100% of the common stock to be issued by Rockdale National
Bank (the "Bank"), to repay organizational expenses and for other corporate
purposes. Neither the Company nor the Bank has commenced business operations,
and neither will do so until this offering is completed and the requisite
approvals of the Comptroller of the Currency ("OCC"), the Federal Deposit
Insurance Corporation ("FDIC"), the Board of Governors of the Federal Reserve
System (the "Federal Reserve Board"), and the Georgia Department of Banking and
Finance (the "Georgia Banking Department") are obtained. The Company's and the
Bank's main office will be located in Conyers, Rockdale County, Georgia. It is
anticipated that the Bank will commence business operations in September 1997,
or as soon thereafter as practicable, out of its main office and one branch
office, both of which are located in Rockdale County. With the exception that
it will have no trust powers, the Bank will operate as a full service
commercial bank with primary emphasis upon high quality service to meet the
financial needs of the individuals and businesses residing and located in and
around Rockdale County, Georgia.
The Company's temporary mailing address is P.O. Box 82030, Conyers,
Georgia 30208, and the temporary telephone number is (770) 760-7573.
<TABLE>
<CAPTION>
THE OFFERING
<S> <C>
Common Stock Offered . . . . . . . . . . 800,000 shares. A minimum of 610,000 shares are required to be sold in
this offering. See "TERMS OF THE OFFERING."
Common Stock to be Outstanding
after this Offering . . . . . . . . . . . Minimum - 610,000 shares
Maximum - 800,000 shares
Price . . . . . . . . . . . . . . . . . . $10.00 per share
Conditions of the Offering . . . . . . . The offering is expressly conditioned upon fulfillment of the following
conditions: (a) not less than $6,100,000 shall have been deposited
with the Escrow Agent, (b) the Company shall have received approval
from the Federal Reserve Board and the Georgia Banking Department of
its application to become a bank holding company, (c) the Organizers
shall have received preliminary approval from the OCC to charter the
Bank, (d) the proposed Bank shall have received approval of its
application for deposit insurance from the FDIC, and (e) the Company
shall not have canceled this offering prior to the time funds are
withdrawn from the Subscription Escrow Account. Until these conditions
have been met, all subscription funds will
</TABLE>
<PAGE> 6
<TABLE>
<S> <C>
be placed in an escrow account with the Escrow Agent. If these
Offering Conditions are not satisfied, all subscription funds that have
been placed in the escrow account will be returned, together with any
interest earned thereon, promptly to the subscribers. Once all of the
offering conditions are met, the Escrow Agent will release all funds to
the Company. The subscription funds of any person who subscribes for
shares following satisfaction of the Offering Conditions will not be
placed in escrow, but will be immediately available to the Company.
Following satisfaction of the Offering Conditions and release of escrow
funds to the Company, subscribers whose funds were originally placed in
escrow and subscribers whose funds were immediately available to the
Company face the risk of loss of a portion of their subscription funds
if the Company and the Bank do not receive final regulatory approvals.
Prior to the release of the funds, the Escrow Agent is authorized to
invest subscription funds in certain short-term investments upon
instruction by the President of the Company. See "TERMS OF THE
OFFERING."
Plan of Distribution . . . . . . . . . . Shares of the Common Stock of the Company will be marketed on a best-
efforts, 610,000 share minimum basis exclusively through certain
directors and executive officers of the Company, none of whom will
receive any commissions or other form of remuneration based on the sale
of the shares. If the Offering Conditions are not satisfied by
_________________, 1997, the Company may engage an underwriter to sell
the shares on a best-efforts basis and the underwriter would receive a
commission on such sales not to exceed 10%. See "TERMS OF THE OFFERING
-- Plan of Distribution."
Use of Proceeds . . . . . . . . . . . . . To purchase 100% of the issued and outstanding capital stock of the
Bank; to provide working capital for the Bank to commence its business
operations (including officers' and employees' salaries); to pay
expenses in connection with the formation of the Company, the
organization of the Bank, and this securities offering; and for other
corporate purposes. See "USE OF PROCEEDS."
Special Factors to be
Considered . . . . . . . . . . . . . . . The securities offered hereby may be deemed to be speculative and
involve certain risks. These risks include the fact that the Company
and the Bank are newly organized entities, regulatory approval of the
Bank depends upon approval of the proposed chief executive officer, new
banks are typically not profitable in the first year of operation,
competition in the Bank's market area is intense, unpredictable
economic conditions may affect profitability, government regulation,
lack of dividends, investment by the organizers, certain anti-takeover
provisions that make a change in control more difficult, there is no
established market for the Common Stock, the offering price was
arbitrarily determined, shareholders have no preemptive rights, and the
offering is being made without the services of an underwriter. See
"RISK FACTORS."
</TABLE>
2
<PAGE> 7
RISK FACTORS
PROSPECTIVE INVESTORS IN THE COMMON STOCK SHOULD GIVE CAREFUL ATTENTION
TO THE FOLLOWING STATEMENTS RESPECTING CERTAIN RISKS APPLICABLE TO THE
OFFERING, WHICH RISKS INCLUDE BUT ARE NOT LIMITED TO THOSE NOTED BELOW.
NO OPERATING HISTORY
Neither the Company nor the Bank has commenced business operations, and
both are newly organized entities with no operating history. Thus, investors
in the Common Stock are subject to the risk of loss of all or a part of their
investment. Furthermore, final regulatory approval to commence banking
operations will not be obtained until the Company has expended a portion of the
proceeds of this offering to employ personnel, obtain temporary office space
and pay other pre-opening expenses. The Company expects the OCC to grant
preliminary approval of the proposed Bank's charter application by June 30,
1997. The Company also expects the Bank to receive approval of its application
for deposit insurance from the FDIC by June 30, 1997. Upon receipt of
preliminary approval from the OCC, the Company will file an application to
become a bank holding company with the Federal Reserve Board and the Georgia
Banking Department. Once preliminary charter approval is obtained from the
OCC, the Company must obtain final approval to commence banking operations
within eighteen months after receipt of preliminary approval. There can be no
assurance that the foregoing approvals will be obtained. See "TERMS OF THE
OFFERING -- Conditions of the Offering."
POSSIBLE LOSS OF A PORTION OF SUBSCRIPTION FUNDS
In the event that the Company satisfies the Offering Conditions, breaks
escrow and issues the shares of Common Stock, but final approval to commence
banking operations is not granted within eighteen months after receipt of
preliminary approval from the OCC, the Company will solicit shareholder
approval for its dissolution and liquidation, in which event, the Company will
return to subscribers all subscription funds and interest earned thereon, less
all expenses incurred by the Company, including the expenses of the offering,
the organizational and pre-opening expenses of the Company and the Bank and
claims of creditors. In the event of dissolution and liquidation following the
issuance of shares of Common Stock, it is possible that persons who submitted
subscription funds that were placed in escrow and those who submitted funds
after escrow had been broken will receive only a portion of their initial
investment due to the foregoing expenses. See "TERMS OF THE OFFERING --
Failure of Bank to Commence Operations."
RELIANCE UPON KEY MANAGEMENT
Regulatory approval to establish and operate a national bank is, among
other factors, dependent upon the OCC's approval of such bank's proposed Chief
Executive Officer. Generally, the Chief Executive Officer of a start-up
financial institution is deemed to be vital to the potential success of the new
institution. The Bank's application for a charter filed with the OCC proposed
William L. Daniel as the Bank's Chief Executive Officer. In the event of
death, disability, resignation or other event causing the unavailability of Mr.
Daniel, final regulatory approval to commence banking operations would be
delayed until such time as a suitable replacement is approved by the OCC.
There can be no assurance that a suitable replacement could be found in the
event of the unavailability of Mr. Daniel.
FINANCIAL POSITION OF THE COMPANY
The initial activity of the Company will be merely to act as the sole
shareholder of the Bank. Thus, the profitability of the Company will be
dependent upon the successful operation of the Bank. Typically, new
3
<PAGE> 8
banks are not profitable in the first year of operation and sometimes are not
profitable for several years. The Bank will incur substantial expenses in
establishing itself as a going concern and there can be no assurance that the
Bank will be operated profitably or that future earnings, if any, will meet the
levels of earnings prevailing in the banking industry.
COMPETITION
With the exception that it will have no trust powers, the Bank will be a
full service commercial bank in Conyers, Rockdale County, Georgia. Competition
among financial institutions in the Bank's market area is intense, and the Bank
will compete with other state and national banks, savings and loan
associations, consumer finance companies, credit unions, money market mutual
funds, and other financial institutions which have far greater financial
resources than those available to the Bank. For example, as a start-up
financial institution, the Bank's relatively small capital base may affect its
ability to compete for loans due to regulatory lending limitations. The Bank's
size may also impact its ability to compete effectively with larger
institutions in offering other services. If the Bank is unable to compete for
deposits effectively in its primary service area, such inability would likely
have an adverse effect on the Bank's potential for growth and profitability.
In addition, the Riegle-Neal Interstate Banking and Branching Efficiency Act of
1994, which became effective in November 1994, will further increase
competition by eliminating interstate branching barriers for certain financial
institutions in the future. See "BUSINESS OF THE BANK -- Market Area and
Competition."
UNPREDICTABLE ECONOMIC CONDITIONS
Commercial banks and other financial institutions are affected by
economic and political conditions, both domestic and international, and by
governmental monetary policies. Conditions such as inflation, recession,
unemployment, high interest rates, short money supply, scarce natural
resources, international disorders, and other factors beyond the control of the
Company and the Bank may adversely affect their profitability. See "BUSINESS
OF THE BANK -- Monetary Policies."
GOVERNMENT REGULATION
The Company and the Bank operate in a highly regulated environment and
are subject to supervision by several governmental regulatory agencies,
including the Federal Reserve Board, the OCC, the Georgia Banking Department,
and the Securities and Exchange Commission. The Company and the Bank are
vulnerable to future legislation and government policy, including bank
deregulation and interstate expansion, which could adversely affect the banking
industry as a whole, including the operations of the Company and the Bank. See
"SUPERVISION AND REGULATION."
NO DIVIDENDS
It is not anticipated that the Company will distribute any dividends to
shareholders in the foreseeable future. Earnings of the Bank, if any, are
expected to be retained by the Bank to enhance its capital structure or
distributed to the Company to defray its operating costs. Dividend
distributions of national banks are restricted by statute and regulation. See
"DIVIDEND POLICY."
PURCHASES BY ORGANIZERS
The Organizers presently intend to purchase 139,500 shares or $1,395,000
in the offering, which will equal 22.87% of the 610,000 shares to be
outstanding upon completion of the minimum offering. See "ORGANIZERS AND
PRINCIPAL STOCKHOLDERS." However, the Organizers have indicated that they may
be willing to subscribe for additional shares in the offering if necessary to
help the Company complete
4
<PAGE> 9
the offering and release proceeds from escrow. Total purchases by the
Organizers will not exceed 200,000 shares or $2,000,000 in the aggregate, which
will equal 32.8% of the 610,000 shares to be outstanding upon completion of the
minimum offering. The Organizers have represented to the Company that all
purchases of Common Stock will be made for investment purposes only and not
with a view to resell such shares.
ANTI-TAKEOVER PROVISIONS
The Company's Articles of Incorporation contain provisions requiring
supermajority shareholder approval to effect certain extraordinary corporate
transactions which are not approved by the Board of Directors. The effect of
these provisions is to make it more difficult to effect a merger, sale of
control, or similar transaction involving the Company even though a majority of
the Company's shareholders may vote in favor of such a transaction. In
addition, the Company's Articles of Incorporation provide for a classified
Board of Directors, whereby one-third of the members of the Board of Directors
shall be elected each year and each director of the Company will serve for a
term of three years. The effect of these provisions is to make it more
difficult to effect a change in control of the Company through the acquisition
of a large block of the Company's Common Stock. The State of Georgia has
statutory provisions relating to business combinations with so-called
"interested shareholders" but these provisions are inapplicable to the Company
because the Company has elected not to be governed by these provisions in its
Bylaws. See "DESCRIPTION OF COMMON STOCK."
NO ESTABLISHED MARKET
Presently there is no established market for the Common Stock. There
can be no assurance that an established public market will develop for such
securities upon completion of this offering or whether substantial trading
activity will occur for several years, if at all. Moreover, in the event that
the Organizers subscribe for additional shares in this offering in order to
achieve the minimum subscription level necessary to release subscription
proceeds from the Subscription Escrow Account, an established public market for
the Common Stock will be less likely to develop. As a result, investors who
may need or wish to dispose of all or a part of their investment in the Common
Stock may not be able to do so except by private, direct negotiations with
third parties. The Company does not presently intend to seek to list the
Common Stock on a national securities exchange or to qualify such Common Stock
for quotation on the National Association of Securities Dealers Automated
Quotation System.
ARBITRARY DETERMINATION OF OFFERING PRICE
Prior to this offering there has been no established market for the
shares of the Company's Common Stock. The offering price was arbitrarily
determined by the Board of Directors of the Company, and does not bear any
relationship to the Company's assets, book value, net worth, or any other
recognized criteria of value. In determining the offering price of the Common
Stock, the Comptroller's capital requirements for the Bank and general market
conditions for the sale of such securities were considered. In the event a
market should develop for the Common Stock after completion of this offering,
there can be no assurance that the market price will equal or exceed the
offering price herein.
ABSENCE OF PREEMPTIVE RIGHTS
No holder of the Common Stock of the Company has preemptive rights with
respect to the issuance of shares of that or any other class of stock and no
holder of the Common Stock is entitled to cumulative voting rights with respect
to the election of directors. The authorized Common Stock of the Company
consists of 10,000,000 shares of Common Stock, $1.00 par value per share. The
Board of Directors of the Company could from time to time determine to issue
additional shares of the authorized Common Stock of
5
<PAGE> 10
the Company in addition to the shares offered hereby and in such event the
ownership interests of the subscribers in this offering would be diluted.
FUTURE CAPITAL NEEDS
The Board of Directors of the Company may determine from time to time to
obtain additional capital through the issuance of additional shares of the
authorized Common Stock of the Company. There can be no assurance that such
shares will be issued at prices or on terms equal to the offering price and
terms of this offering. In addition, such issuance would dilute the ownership
interests in the Company of the subscribers in this offering.
NO UNDERWRITER OF THIS OFFERING
This offering is being made without the services of an underwriter.
Sales will be solicited only by certain executive officers and directors of the
Company. Accordingly, there can be no assurance that all of the shares offered
hereby will be sold at the expiration of the offering period. See "TERMS OF
THE OFFERING."
6
<PAGE> 11
THE COMPANY
Rockdale National Bancshares, Inc. (the "Company") was incorporated
under the laws of the State of Georgia on February 13, 1997 to operate as a
bank holding company pursuant to the federal Bank Holding Company Act of 1956,
as amended (the "Act"), and to purchase 100% of the issued and outstanding
capital stock of Rockdale National Bank, an association to be organized under
the laws of the United States (the "Bank"), which will conduct a general
banking business in Conyers, Georgia. The Organizers expect to receive
preliminary approval from the OCC to charter the Bank by June 30, 1997. The
Company also expects the Bank to receive approval of its application for
deposit insurance from the Federal Deposit Insurance Corporation by June 30,
1997. Upon receipt of preliminary approval from the OCC, the Company will file
an application to become a bank holding company with the Federal Reserve Board
and the Georgia Banking Department. Upon obtaining regulatory approval, the
Company will be a registered bank holding company subject to regulation by the
Federal Reserve Board and the Georgia Banking Department.
It is anticipated that the Bank will commence operations in September
1997, or as soon thereafter as practicable. See "BUSINESS OF THE BANK." The
Organizers of the Company and the Bank are nine individuals, eight of whom
reside in Conyers, Rockdale County, Georgia. See "ORGANIZERS AND PRINCIPAL
STOCKHOLDERS." All of the Organizers will serve on the initial Board of
Directors of the Company and the Bank. See "MANAGEMENT."
The principal offices of the Company and the Bank will be located in a
newly constructed one-story commercial building situated on approximately 2.5
acres of land. See "BUSINESS OF THE COMPANY -- Premises." The principal
offices will be located at the intersection of Highway 138 and Miller's Chapel
Road, 1000 Georgia Highway 138, in Conyers, Georgia. Once the Bank opens for
business and until construction of the principal offices is complete, the
Company will occupy temporary offices also located at the same location as the
permanent facility. See "BUSINESS OF THE COMPANY -- Premises." It is
anticipated that the Company will occupy the temporary offices for
approximately one year. The mailing address of the Company's present temporary
office, which it will occupy until the Bank opens for business, is P.O. Box
82030, Conyers, Georgia 30208, and its telephone number at such address is
(770) 760-7573.
TERMS OF THE OFFERING
GENERAL
The Company is offering hereunder 800,000 shares of its Common Stock for
cash at a price of $10.00 per share. A minimum subscription of 100 shares is
required for each subscription hereunder. Investors may subscribe to a maximum
of 30,000 shares pursuant to this offering, unless additional subscriptions are
approved by the Board of Directors of the Company. The purchase price of
$10.00 per share shall be paid in full upon execution and delivery of the
Subscription Agreement. All subscriptions tendered by investors are subject to
acceptance by the Board of Directors of the Company, and the Company reserves
the absolute and unqualified right to reject or reduce any subscription for any
reason prior to acceptance. Furthermore, the Company reserves the right to
cancel this offering at any time prior to the time the Company withdraws funds
from the Subscription Escrow Account, for any reason whatsoever.
Prior to this offering there has been no established public market for
the shares of the Common Stock and there can be no assurance that an
established market for such stock will develop. The offering price has been
arbitrarily determined and is not a reflection of the Company's book value, net
worth, or any other such recognized criteria of value. In determining the
offering price of the Common Stock, the capital requirements of the OCC for the
Bank and general market conditions for the sale of such securities were
considered. There
7
<PAGE> 12
can be no assurance that, if a market should develop for the Common Stock, the
post-offering market price will equal or exceed the offering price.
CONDITIONS OF THE OFFERING
This offering will expire at 5:00 p.m. Eastern Daylight Time, on
___________________, 1997 (90 days after the date of this Prospectus) (the
"Expiration Date"), unless such date is extended by the Company. The
Expiration Date may be extended by the Company without notice to subscribers
for up to three consecutive 90-day periods, or not later than
____________________, 1997. The offering is expressly conditioned upon
fulfillment of the following conditions (the "Offering Conditions") on or prior
to the Expiration Date, as extended. The Offering Conditions, which may not be
waived, are as follows:
(a) Not less than $6,100,000 shall have been deposited with the
Escrow Agent in the Subscription Escrow Account;
(b) The Company shall have received approval from the Federal
Reserve Board and the Georgia Banking Department of its application to become a
bank holding company, the Organizers shall have received preliminary approval
from the OCC to charter the Bank, and the proposed Bank shall have received
approval of its application for deposit insurance from the FDIC; and
(c) The Company shall not have canceled this offering prior to the
time funds are withdrawn from the Subscription Escrow Account.
ESCROW OF SUBSCRIPTION FUNDS
Until the Offering Conditions above have been met, all subscription
funds and documents tendered by investors will be placed in an escrow account
(the "Subscription Escrow Account") with The Bankers Bank (the "Escrow Agent").
Pursuant to the terms of the Escrow Agreement, the form of which is attached to
this Prospectus as Appendix "A," if all of the Offering Conditions are met, the
Escrow Agent will release all subscription funds, and any profits thereon, to
the Company.
Pending disposition of the Subscription Escrow Account under the Escrow
Agreement, the Escrow Agent is authorized, upon instructions to be given by
William L. Daniel, to invest subscription funds in direct obligations of the
United States Government, in short-term insured bank certificates of deposit,
and/or in bank money market funds, with maturities not to exceed 90 days. The
Company will invest the subscription funds and any additional funds obtained
after breaking escrow and prior to the time that the Company infuses capital
into the Bank in a similar manner. The offering proceeds will be used to
purchase capital stock of the Bank and to repay expenses incurred in the
organization of the Company and the Bank. See "USE OF PROCEEDS."
In the event the Offering Conditions are not met by the Expiration Date,
as extended, the Escrow Agent shall promptly return to the subscribers their
subscription funds, together with their allocated share of profits, if any,
earned on the investment of the Subscription Escrow Account. Each subscriber's
proportionate share of Subscription Escrow Account earnings shall be that
fraction (i) the numerator of which is the dollar amount of such subscriber's
tendered subscription multiplied by the number of days between the date of
acceptance of the investor's subscription and the date of the offering
termination, inclusive (the subscriber's "Time Subscription Factor"), and (ii)
the denominator of which is the aggregate Time Subscription Factors of all
investors depositing subscription funds in the Subscription Escrow Account.
The expenses incurred by the Company prior to the satisfaction of the Offering
Conditions will be borne by the Organizers and not by the subscribers.
8
<PAGE> 13
NO ASSURANCE CAN BE GIVEN THAT SUBSCRIPTION FUNDS CAN OR WILL BE
INVESTED AT THE HIGHEST RATE OF RETURN AVAILABLE OR THAT ANY PROFITS WILL BE
REALIZED FROM THE INVESTMENT OF SUBSCRIPTION FUNDS.
If all Offering Conditions are satisfied, and the Company withdraws the
subscription funds from the Subscription Escrow Account, all profits and
earnings on such account shall belong to the Company.
The Bankers Bank, by accepting appointment as Escrow Agent under the
Escrow Agreement, in no way endorses the purchase of the Company's securities
by any person.
FAILURE OF BANK TO COMMENCE OPERATIONS
The Comptroller requires that a new national bank open for business
(i.e., obtain a charter) within 18 months after receipt of preliminary approval
from the Comptroller. The Organizers anticipate that the Bank will open for
business in September 1997. Because final approval of the Bank's charter is
conditioned on the Company's raising funds to capitalize the Bank at
$6,000,000, the Company expects to issue the shares of Common Stock before it
has obtained all final regulatory approvals for the Bank. In the event that
the Company issues the shares of Common Stock and the Comptroller does not
grant the Bank final regulatory approval to commence banking operations by 18
months after the Bank's receipt of preliminary approval from the Comptroller,
the Company will solicit shareholder approval for its dissolution and
liquidation, in which event, the Company will promptly return to subscribers
all subscription funds and interest earned thereon, less all expenses incurred
by the Company, including the expenses of the offering and the organizational
and pre-opening expenses of the Company and the Bank. Therefore, if the
Company and the Bank do not receive final regulatory approvals, subscribers
whose funds were originally placed in escrow and subscribers whose funds were
immediately available to the Company face the risk of loss of a portion of
their subscription funds. It is possible that this return may be further
reduced by amounts paid to satisfy claims of creditors, as discussed in the
following paragraph.
Once the Company issues the shares of Common Stock offered hereby, the
offering proceeds may be considered part of general corporate funds and thus
may be subject to the claims of creditors of the Company, including claims
against the Company that may arise out of actions of the Company's officers,
directors, or employees. It is possible, therefore, that one or more creditors
may seek to attach the proceeds of the offering prior to the Bank's
commencement of banking operations. If such an attachment occurred and it
became necessary to pay the subscription funds to shareholders because of
failure to obtain all necessary regulatory approvals, the payment process might
be delayed; and if it became necessary to pay creditors from the subscription
funds, the payment to shareholders might be further reduced.
PURCHASES BY ORGANIZERS OF THE COMPANY
The Organizers have indicated that they may be willing to subscribe for
additional shares in this offering, if necessary, to help the Company complete
the offering in order to release subscription proceeds from the Subscription
Escrow Account. The maximum aggregate number of shares which may be subscribed
by the Organizers in this offering is 200,000 shares. Any such purchases of
additional shares by the Organizers will be subject to affiliate resale
limitations of the Securities Act of 1933, as amended, and will be made on the
same terms as those made by other investors. The Organizers have represented
to the Company that any such purchases will be made for investment purposes
only and not with a view to resell such shares. If additional purchases, as
described above, are not necessary, the Organizers will purchase a minimum of
139,500 shares of the Company's Common Stock pursuant to this offering, or
22.87% of the 610,000 shares to be outstanding upon completion of the minimum
offering. If additional purchases as described above are necessary, the
Organizers will purchase additional shares and will own, following the
9
<PAGE> 14
offering, more than 32.8% of the outstanding Common Stock of the Company. See
"ORGANIZERS AND PRINCIPAL STOCKHOLDERS."
PLAN OF DISTRIBUTION
The Company may cancel this offering for any reason at any time prior to
the release of subscription funds from the Subscription Escrow Account, and
accepted subscriptions are subject to cancellation in the event that the
Company elects to cancel the offering in its entirety.
Shares of the Common Stock of the Company will be marketed on a
best-efforts, 610,000 share minimum basis exclusively through certain directors
and executive officers of the Company, none of whom will receive any
commissions or other form of remuneration based on the sale of the shares.
However, in the event that the Offering Conditions have not been satisfied by
___________________, 1997, the Company may engage an underwriter to sell the
shares on a best- efforts basis and such underwriter would receive a commission
based upon such sales. It is anticipated that commissions paid to such
underwriter, if retained, will not exceed 10% of the $10.00 per share sales
price and that other expenses of such underwriting will not exceed an aggregate
of $50,000. In the event that the Offering Conditions have not been satisfied
by the Expiration Date, this offering will be terminated and subscription funds
promptly returned to the subscribers, together with their allocated share of
profits, if any, earned on the investment of the Subscription Escrow Account as
described above. See "TERMS OF THE OFFERING -- Escrow of Subscription Funds."
As soon as practicable, but no more than ten (10) business days after
receipt of a subscription, the Company will accept or reject such subscription.
Subscriptions not rejected by the Company within this ten (10) day period shall
be deemed accepted. Once a subscription is accepted by the Company, it cannot
be withdrawn by the subscriber. Payment from any subscriber for shares in
excess of the number of shares allocated to such subscriber will be refunded by
mail, without interest, within ten (10) days of the date of rejection.
Certificates representing shares of Common Stock of the Company, duly
authorized and fully paid, will be issued as soon as practicable after
subscription funds are released to the Company from the Subscription Escrow
Account.
Subscriptions to purchase shares of Common Stock can be made by
completing the Subscription Agreement attached to this Prospectus and
delivering the same to the Company at its temporary offices, 1600 Georgia
Highway 20, Conyers, Georgia 30208 or mailing the same in the enclosed
self-addressed, stamped envelope. Full payment of the purchase price must
accompany the subscription. Failure to pay the full subscription price shall
entitle the Company to disregard the subscription. No Subscription Agreement
is binding until accepted by the Company, which may, in its sole discretion,
refuse to accept any subscription for shares, in whole or in part, for any
reason whatsoever. After a subscription is accepted and proper payment
received, the Company shall not cancel such subscription unless all accepted
subscriptions are canceled. Unless otherwise agreed by the Company, all
subscription amounts must be paid in United States currency by check, bank
draft, or money order payable to "The Bankers Bank, Escrow Agent for Rockdale
National Bancshares, Inc." A subscription will be accepted in writing by the
Company in the Form of Acceptance attached to this Prospectus.
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<PAGE> 15
USE OF PROCEEDS
The gross proceeds from the sale of shares of Common Stock offered by
the Company are estimated to be $6,100,000, assuming the sale of 610,000 shares
for cash. However, if 610,000 shares are not sold for cash, prior to the
Expiration Date as defined herein, then the offering will terminate and all
funds received from subscribers will be promptly refunded. See "TERMS OF THE
OFFERING."
The estimated expenses of this offering are as follows:
<TABLE>
<S> <C>
Registration fees, including blue
sky fees and expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 3,000
Legal fees and expenses . . . . . . . . . . . . . . . . . . . . . . . . . . 16,000
Accounting fees and expenses . . . . . . . . . . . . . . . . . . . . . . . . 5,000
Printing and engraving expenses . . . . . . . . . . . . . . . . . . . . . . 3,000
Advertising . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,500
Mailing and distribution . . . . . . . . . . . . . . . . . . . . . . . . . . 5,000
Entertainment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,000
Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,000
-------
TOTAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $41,500
=======
</TABLE>
The net proceeds of this offering ($6,068,500) as well as any interest
earned on the subscription funds will be used by the Company, after breaking
escrow, primarily for the purchase of 100% of the issued and outstanding
capital stock of the Bank and to repay expenses incurred in the organization of
the Company and the Bank.
As indicated in the charter application of the Bank filed by the Company
with the OCC, the Company intends to capitalize the Bank at $6,000,000. Any
funds in addition to the $6,000,000 will be reserved for growth of the Bank in
compliance with OCC regulations.
A portion of the net proceeds of this offering in excess of the minimum
will be retained by the Company for the purpose of funding any required
additions to the capital of the Bank. Since national banks are regulated with
respect to the ratio that their total assets may bear to their total capital,
if the Bank experiences greater growth than anticipated, it may require the
infusion of additional capital to support that growth. Management of the
Company anticipates, however, that the proceeds of this offering will be
sufficient to support the Bank's immediate capital needs and will seek, if
necessary, long- and short-term debt financing to support any additional needs;
however, management can give no assurance that such financing, if needed, will
be available or if available will be on terms acceptable to management.
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<PAGE> 16
Net proceeds from this offering will be applied as follows:
<TABLE>
<CAPTION>
Net Proceeds Net Proceeds
Assuming Sale Assuming Sale
of 610,000 of 800,000
Shares Shares
------------------- -------------------
<S> <C> <C>
Purchase of capital stock of the Bank . . . . . . . . $6,000,000 $6,000,000
Organizational expenses of Company . . . . . . . . . 41,500 41,500
Working capital and funds available
for expansion of banking and
banking-related services(1) . . . . . . . . . . 68,500 968,500
---------- ----------
$6,110,000 $7,010,000
========== ==========
</TABLE>
- -------------
(1) Amounts indicated do not include interest earned on investment of net
proceeds from this offering during the Company's organizational stage.
The following is a schedule of estimated expenditures to be made by the
Bank out of the proceeds from the sale of its capital stock to the Company,
including the Bank's operating expenses for its first twelve months of
operation.
<TABLE>
<S> <C>
Organizational and pre-opening expenses
of Bank including salaries,
legal and accounting fees . . . . . . . . . . . . . . . . . . . . $ 292,598
Purchase of land and construction of
bank facilities (temporary headquarters and branch office) . . . . 944,160
Bank premises - net occupancy expense . . . . . . . . . . . . . . . . 94,600
Salaries and benefits for officers . . . . . . . . . . . . . . . . . 384,400
Salaries and benefits for other employees . . . . . . . . . . . . . . 408,580
General and administrative expense,
comprised primarily of directors' fees,
data processing, marketing and advertising,
telephone, and casualty and deposit insurance . . . . . . . . . . 266,199
Furniture, fixtures and equipment . . . . . . . . . . . . . . . . . . 344,048
Working Capital . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,265,415
----------
$6,000,000
==========
</TABLE>
The expenditures for the purchase of land and construction of bank
facilities include the $424,160 purchase price under the contract dated
February 4, 1997 to acquire a 2.5 acre tract of land located at the
intersection of Highway 138 and Miller's Chapel Road which will be used as the
site of the Company's headquarters, and the $385,000 purchase price under the
contract executed in February 1997 to acquire a 1.2 acre tract of land located
at 1600 Georgia Highway 20 to be used as a branch office for the Bank. It is
anticipated that construction of the headquarters building will cost
approximately $937,500 and the branch office building improvements will cost
approximately $115,000.
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<PAGE> 17
The above described expenses are estimates only and assume the Bank will
commence operations in September 1997, or as soon thereafter as practicable.
Actual expenses may exceed these amounts. Total organizational expenses and
deferred registration costs as of March 7, 1997 amounted to approximately
$79,000. The Company has a $300,000 line of credit at an interest rate of
prime with The Bankers Bank. Each of the nine Organizers has guaranteed twice
his or her pro rata share of the total line of credit.
DIVIDEND POLICY
As the Company and the Bank are both start-up operations, it will be the
policy of the Board of Directors of the Company to reinvest earnings for such
period of time as is necessary to ensure the success of the operations of the
Company and of the Bank. There are no current plans to initiate payment of
cash dividends, and future dividend policy will depend on the Bank's earnings,
capital requirements, financial condition and other factors considered relevant
by the Board of Directors of the Company.
The Bank will be restricted in its ability to pay dividends under the
national banking laws and by regulations of the OCC. Pursuant to 12 U.S.C.
Section 56, a national bank may not pay dividends from its capital. All
dividends must be paid out of net profits then on hand, after deducting losses
and bad debts. Payments of dividends out of net profits is further limited by
12 U.S.C. Section 60(a), which prohibits a bank from declaring a dividend on
its shares of common stock until its surplus equals its stated capital, unless
there has been transferred to surplus not less than 1/10 of the bank's net
profits of the preceding two consecutive half year periods (in the case of an
annual dividend). Pursuant to 12 U.S.C. Section 60(b), the approval of the
OCC is required if the total of all dividends declared by the 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.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
The Company is still in the development stage, and will remain in that
stage until the offering of the Company's Common Stock is complete. The
Company has funded its start-up and organization costs through a $300,000 line
of credit with The Bankers Bank, which line of credit has been guaranteed by
the Organizers. Subscription funds during the offering contemplated herein
will be placed in an escrow account and invested in direct obligations of the
United States Government, in short-term insured certificates of deposits,
and/or money market management trusts for short-term obligations of the United
States Government, with maturities not to exceed 90 days.
In the opinion of the Company, the net proceeds of $6,068,500 from the
offering will be adequate capital to support the growth of the Company for its
first five years of operation and the Bank for its first five years of
operation. It is not anticipated that the Company will find it necessary to
raise additional funds to meet expenditures required to operate the business of
the Company and the Bank over the next twelve months. All anticipated material
expenditures for such period have been identified and provided for out of the
proceeds of this offering. See "USE OF PROCEEDS."
The plan of operations for the Company and the Bank is described in
detail elsewhere in this Prospectus. See "BUSINESS OF THE COMPANY" and
"BUSINESS OF THE BANK."
13
<PAGE> 18
BUSINESS OF THE COMPANY
GENERAL
The Company was incorporated under the laws of the State of Georgia on
February 13, 1997 for the purpose of organizing the Bank and purchasing 100% of
the outstanding capital stock of the Bank. The Organizers expect to receive
preliminary approval from the OCC to charter the Bank by June 30, 1997. The
Company also expects the Bank to receive approval of its application for
deposit insurance from the FDIC by June 30, 1997. Upon receipt of preliminary
approval from the OCC, the Company will file an application with the Federal
Reserve Board and the Georgia Banking Department to become a bank holding
company. The Company has been organized as a mechanism to enhance the Bank's
ability to serve its future customers' requirements for financial services.
The holding company structure will provide flexibility for expansion of the
Company's banking business through acquisition of other financial institutions
and provision of additional banking-related services which the traditional
commercial bank may not provide under present laws. For example, banking
regulations require that the Bank maintain a minimum ratio of capital to
assets. In the event that the Bank's growth is such that this minimum ratio is
not maintained, the Company may borrow funds, subject to the capital adequacy
guidelines of the Federal Reserve Board, and contribute them to the capital of
the Bank and otherwise raise capital in a manner which is unavailable to the
Bank under existing banking regulations.
The Company has no present plans to acquire any operating subsidiaries
other than the Bank; however, it is expected that the Company may make
additional acquisitions in the event that the Bank becomes profitable and such
acquisitions are deemed to be in the best interests of the Company and its
shareholders. Such acquisitions, if any, will be subject to certain regulatory
approvals and requirements. See "SUPERVISION AND REGULATION."
PREMISES
The Company has entered into a contract dated February 4, 1997 to
acquire a 2.5 acre tract of land located at the intersection of Highway 138 and
Miller's Chapel Road for a total purchase price of $424,160 from a party
unaffiliated with the Organizers or the Company. The Company intends to
construct its headquarters building on this property. The building will
contain approximately 7,500 square feet of finished space at a cost of
approximately $937,500. The building will contain a vault, 6 offices, 8 teller
stations, 3 drive-in windows, a boardroom conference facility, a loan
operations area, and an area for the Bank's bookkeeping operations.
Until construction of the Bank building is complete, the Company will
temporarily operate out of offices in a modular bank facility also located at
the intersection of Highway 138 and Miller's Chapel Road. The Company will
lease the approximately 2,000 square foot facility pursuant to a month-to-month
lease at the monthly rental of $3,300 after spending approximately $20,000 for
site preparation and facility set-up work. It is estimated that the Company
and the Bank will operate out of this temporary facility for approximately
twelve months until construction of the headquarters building has been
completed.
In addition to its headquarters facility, the Company's banking
subsidiary plans to open a small branch office facility located at 1600 Georgia
Highway 20, Conyers, Georgia. This branch facility, which is located on
approximately 1.2 acres of land, will be acquired for a purchase price of
approximately $385,000. It is anticipated that the facility will require
approximately $115,000 in improvements prior to its opening. This facility
will contain a safe, 1 office, 3 teller stations, and 2 drive-in windows. The
Company does not anticipate any material expenditures in connection with its
compliance with environmental laws.
14
<PAGE> 19
BUSINESS OF THE BANK
GENERAL
The Bank anticipates that it will commence business operations in
September 1997 in a temporary facility located at the intersection of Highway
138 and Miller's Chapel Road in Conyers, Georgia. The Bank plans to be a full
service commercial bank, without trust powers. The Bank will offer a full
range of interest bearing and non-interest bearing accounts, including
commercial and retail checking accounts, money market accounts, individual
retirement and Keogh accounts, regular interest bearing statement savings
accounts, certificates of deposit, commercial loans, real estate loans, home
equity loans, and consumer/installment loans. In addition, the Bank will
provide such consumer services as U.S. Savings Bonds, travelers checks,
cashiers checks, safe deposit boxes, bank by mail services, direct deposit, and
automatic teller services.
The philosophy of management of the Bank with respect to its initial
operations will emphasize prompt and responsive personal service to members of
the business and professional community of Rockdale County, Georgia in order to
attract customers and acquire market share now controlled by other financial
institutions in the Bank's market area. The Bank's two prime locations and
range of banking services, as well as its emphasis on personal attention and
service, prompt decision making and consistency in banking personnel, will be
major tools in the Bank's efforts to capture such market share. In addition,
the Bank's President has substantial banking experience, which will be an asset
in providing both products and services designed to meet the needs of the
Bank's customer base. The Organizers are active members of the business
community in Rockdale County, Georgia and continued active community
involvement will provide an opportunity to promote the Bank and its products
and services. The Organizers intend to utilize effective advertising and
superior selling efforts in order to build a distinct institutional image for
the Bank and to capture a customer base.
MARKET AREA AND COMPETITION
The primary market area for the proposed Bank in Rockdale County,
Georgia is included in the Atlanta Metropolitan Statistical Area and is located
approximately 30 minutes East of Atlanta via Interstate 20. Rockdale County
offers a wholesome environment to raise a family, yet has the advantages of a
large city because Atlanta is such a short distance away. While Rockdale
County is one of the smallest counties in Georgia, it has experienced steady
growth over the last several years and projections indicate that this growth
will continue into the next decade. Rockdale County includes industrial,
business and service offices, government offices, free-standing retail
businesses, restaurants, and numerous strip shopping centers. Principal
residential areas are located in the southern portion of the county while the
majority of the business activities are in the middle and northern portion of
the county. Conyers, the principal city located in Rockdale County, serves as
a regional medical community with a 107-bed non-profit hospital located in it.
This full service medical center supports over 200 physicians and has undergone
four major building expansions since 1979.
According to the 1990 U.S. Census, Rockdale County has a population of
54,091, representing an increase of 42.7% over the 1980 U.S. Census figure of
36,746. The Georgia Office of Planning and Budget indicated in a Georgia
Department of Labor Report that Rockdale County is estimated to have a
population of 74,432 by the year 2000.
Stability in the local Rockdale County economy principally evolves from
a large manufacturing base. Rockdale County has approximately 90 manufacturing
firms which produce a wide array of products, including apparel, lighting
fixtures, food processing, plastic cups, high tech robotics, and video
cassettes. The largest employers in Rockdale County include AT&T
Communications, Lithonia Lighting, Sweetheart Cups, Inc., Golden States Foods,
Maxell Corporation of America, Kysor-Warren, and Phoenix Refrigeration Systems,
Inc. The existence of these high quality, high paying employers has resulted
in a lower-than-average unemployment for Rockdale County. The Georgia
Department of Labor currently reports an
15
<PAGE> 20
unemployment rate for Rockdale County of 3.7%, the lowest of any county in the
immediate area. This rate compares to unemployment rates for the entire State
of Georgia of 5.2% and the United States of 6.1%.
Competition among financial institutions in the Bank's primary service
area is intense. There are 8 commercial banks with a total of 17 branches in
Rockdale County, and 2 credit unions with one branch office for each. The
largest banks are affiliated with 4 major bank holding companies. There are no
locally owned banks.
Financial institutions primarily compete with one another for deposits.
In turn, a bank's deposit base directly affects such bank's loan activities and
general growth. Primary methods of competition include interest rates on
deposits and loans, service charges on deposit accounts and the designing of
unique financial services products. The Bank will be competing with financial
institutions which have much greater financial resources than the Bank, and
which may be able to offer more and unique services and possibly better terms
to their customers. However, the Organizers of the Bank believe that the Bank
will be able to attract sufficient deposits to enable the Bank to compete
effectively with other area financial institutions.
The Bank will be in competition with existing area financial
institutions other than commercial banks and savings and loan associations,
including insurance companies, consumer finance companies, brokerage houses,
credit unions and other business entities which have recently been invading the
traditional banking markets. Due to the growth of the Rockdale County area, it
is anticipated that additional competition will continue from new entrants to
the market.
DEPOSITS
The Bank will offer a full range of interest bearing and non-interest
bearing accounts, including commercial and retail checking accounts, money
market accounts, individual retirement and Keogh accounts, regular interest
bearing statement savings accounts and certificates of deposit with fixed and
variable rates and a range of maturity date options. The sources of deposits
will be residents, businesses and employees of businesses within the Bank's
market area, obtained through the personal solicitation of the Bank's officers
and directors, direct mail solicitation and advertisements published in the
local media. The Bank will pay competitive interest rates on time and savings
deposits up to the maximum permitted by law or regulation. In addition, the
Bank will implement a service charge fee schedule competitive with other
financial institutions in the Bank's market area, covering such matters as
maintenance fees on checking accounts, per item processing fees on checking
accounts, returned check charges and the like.
LOAN PORTFOLIO
The Bank will engage in a full complement of lending activities,
including commercial, consumer/installment and real estate loans. Initially,
the Bank will have a legal lending limit for unsecured loans of up to $900,000
to any one person. See "SUPERVISION AND REGULATION."
Commercial and Industrial Loans
Commercial lending will be directed principally towards businesses whose
demands for funds fall within the Bank's legal lending limits and which are
potential deposit customers of the Bank. This category of loans includes loans
made to individual, partnership or corporate borrowers, and obtained for a
variety of business purposes. Particular emphasis will be placed on loans to
small and medium-sized businesses. The primary repayment risk for commercial
loans is the failure of the business due to economic or financial factors.
Although the Bank typically will look to a commercial borrower's cash flow as
the principal source of repayment for such loans, many commercial loans will be
secured by inventory, equipment, accounts receivable, and other assets.
16
<PAGE> 21
Consumer Loans
The Bank's consumer loans will consist primarily of installment loans to
individuals for personal, family and household purposes, including automobile
loans to individuals and pre-approved lines of credit. This category of loans
will also include lines of credit and term loans secured by second mortgages on
the residences of borrowers for a variety of purposes including home
improvements, education and other personal expenditures. In evaluating these
loans the Bank will review the borrower's level and stability of income and
past credit history and the impact of these factors on the ability of the
borrower to repay the loan in a timely manner. In addition, the Bank will
maintain a proper margin between the loan amount and collateral value.
Real Estate Loans
The Bank's real estate loans will consist of residential first and
second mortgage loans, residential construction loans and commercial real
estate loans to a limited degree. These loans will be made consistent with the
Bank's appraisal policy and real estate lending policy which will detail
maximum loan to value ratios and maturities. These loan to value ratios will
be sufficient to compensate for fluctuations in the real estate market to
minimize the risk of loss to the Bank.
While risk of loss in the Bank's loan portfolio is primarily tied to the
credit quality of the various borrowers, risk of loss may also increase due to
factors beyond the Bank's control, such as local, regional and/or national
economic downturns. General conditions in the real estate market may also
impact the relative risk in the Bank's real estate portfolio. Of the Bank's
target areas of lending activities, commercial loans are generally considered
to have greater risk than real estate loans or consumer installment loans.
Management of the Bank intends to originate loans and to participate
with other banks with respect to loans which exceed the Bank's lending limits.
Management of the Bank does not believe that loan participations will
necessarily pose any greater risk of loss than loans which the Bank originates.
INVESTMENTS
The Bank intends to invest primarily in direct obligations of the United
States, obligations guaranteed as to principal and interest by the United
States, obligations of agencies of the United States, and certificates of
deposit issued by commercial banks. In addition, the Bank will enter into
Federal Funds transactions with its principal correspondent banks, and
anticipates that it will primarily act as a net seller of such funds. The sale
of Federal Funds amounts to a short-term loan from the Bank to another bank.
ASSET/LIABILITY MANAGEMENT
It is the objective of the Bank to manage assets and liabilities to
provide a satisfactory, consistent level of profitability within the framework
of established cash, loan investment, borrowing and capital policies. Certain
of the officers of the Bank will be responsible for monitoring policies and
procedures that are designed to ensure acceptable composition of the
asset/liability mix, stability and leverage of all sources of funds while
adhering to prudent banking practices. It is the overall philosophy of
management to support asset growth primarily through growth of core deposits,
which include deposits of all categories made by individuals, partnerships and
corporations. Management of the Bank will seek to invest the largest portion
of the Bank's assets in commercial, consumer and real estate loans.
The Bank's asset/liability mix will likely be monitored on a daily basis
with a monthly report reflecting interest-sensitive assets and
interest-sensitive liabilities being prepared and presented to the Bank's Board
of Directors. The objective of this policy is to control interest-sensitive
assets and liabilities so as to minimize the impact of substantial movements in
interest rates on the Bank's earnings.
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<PAGE> 22
CORRESPONDENT BANKING
Correspondent banking involves the providing of services by one bank to
another bank which cannot provide that service for itself from an economic or
practical standpoint. The Bank will be required to purchase correspondent
services offered by larger banks, including check collections, purchase of
Federal Funds, security safekeeping, investment services, coin and currency
supplies, overline and liquidity loan participations, and sales of loans to or
participations with correspondent banks.
The Bank anticipates that it will sell loan participations to
correspondent banks with respect to loans which exceed the Bank's lending
limit. As compensation for services provided by a correspondent, the Bank may
maintain certain balances with such correspondents in non-interest bearing
accounts.
DATA PROCESSING
The Bank plans to sign a data processing servicing agreement with an
outside service bureau. It is expected that this servicing agreement will
provide for the Bank to receive a full range of data processing services,
including an automated general ledger, deposit accounting, commercial, real
estate and installment lending data processing, payroll, central information
file and ATM processing and investment portfolio accounting.
FACILITIES
Upon commencement of operations, the Bank will open in both temporary
quarters located at the intersection of Highway 138 and Miller's Chapel Road,
Conyers, Georgia and in a branch office located at 1600 Georgia Highway 20,
Conyers, Georgia. Once the Bank's new headquarters has been constructed, which
is expected to occur in September 1998, the Bank will occupy a 7,500 square
feet building containing 8 teller stations, 6 offices, a vault, 3 drive-in
windows, and a conference room. See "BUSINESS OF THE COMPANY -- Premises."
EMPLOYEES
In its first year of operation, the Bank anticipates that it will employ
18 persons on a full-time basis, including 5 officers, and 4 persons on a
part-time basis. The Bank will hire additional persons as needed, including
additional tellers and financial service representatives.
MONETARY POLICIES
The results of operations of the Bank will be affected by credit
policies of monetary authorities, particularly the Federal Reserve Board. The
instruments of monetary policy employed by the Federal Reserve Board include
open market operations in U.S. Government securities, changes in the discount
rate on member bank borrowings, changes in reserve requirements against member
bank deposits and limitations on interest rates which member banks may pay on
time and savings deposits. In view of changing conditions in the national
economy and in the money markets, as well as the effect of action by monetary
and fiscal authorities, including the Federal Reserve Board, no prediction can
be made as to possible future changes in interest rates, deposit levels, loan
demand or the business and earnings of the Bank.
18
<PAGE> 23
SUPERVISION AND REGULATION
The Company and the Bank operate in a highly regulated environment, and
their business activities are governed by statute, regulation and
administrative policies. The business activities of the Company and the Bank
are closely supervised by a number of federal regulatory agencies, including
the Federal Reserve Board, the OCC, the Georgia Banking Department , and the
FDIC.
The Company is regulated by the Federal Reserve Board under the federal
Bank Holding Company Act, which requires every bank holding company to obtain
the prior approval of the Federal Reserve Board before acquiring more than 5%
of the voting shares of any bank or all or substantially all of the assets of a
bank, and before merging or consolidating with another bank holding company.
The Federal Reserve Board (pursuant to regulation and published policy
statements) has maintained that a bank holding company must serve as a source
of financial strength to its subsidiary banks. In adhering to the Federal
Reserve Board policy, the Company may be required to provide financial support
to a subsidiary bank at a time when, absent such Federal Reserve Board policy,
the Company may not deem it advisable to provide such assistance.
Under the Riegle-Neal Interstate Banking and Branching Efficiency Act of
1994, the restrictions on interstate acquisitions of banks by bank holding
companies were repealed on September 9, 1995, such that the Company and any
other bank holding company located in Georgia is able to acquire a bank located
in any other state, and a bank holding company located outside Georgia can
acquire any Georgia-based bank, in either case subject to certain deposit
percentage and other restrictions. The legislation also provides that, unless
an individual state elects beforehand either (i) to accelerate the effective
date or (ii) to prohibit out-of-state banks from operating interstate branches
within its territory, on or after June 1, 1997, adequately capitalized and
managed bank holding companies will be able to consolidate their multistate
bank operations into a single bank subsidiary and to branch interstate through
acquisitions. De novo branching by an out-of-state bank would be permitted
only if it is expressly permitted by the laws of the host state. The authority
of a bank to establish and operate branches within a state will continue to be
subject to applicable state branching laws. Pursuant to the Riegle-Neal
Interstate Banking and Branching Efficiency Act, the State of Georgia has
recently adopted an interstate banking statute that, beginning on June 1, 1997,
removes the existing restrictions on the ability of banks to branch interstate
through mergers, consolidations and acquisitions.
A bank holding company is generally prohibited from acquiring control of
any company which is not a bank and from engaging in any business other than
the business of banking or managing and controlling banks. However, there are
certain activities which have been identified by the Federal Reserve Board to
be so closely related to banking as to be a proper incident thereto and thus
permissible for bank holding companies, including the following activities:
acting as investment or financial advisor to subsidiaries and certain outside
companies; leasing personal and real property or acting as a broker with
respect thereto; providing management consulting advice to nonaffiliated banks
and nonbank depository institutions; operating collection agencies and credit
bureaus; acting as a futures commission merchant; providing data processing and
data transmission services; acting as an insurance agent or underwriter with
respect to limited types of insurance; performing real estate appraisals;
arranging commercial real estate equity financing; providing securities
brokerage services; and underwriting and dealing in obligations of the United
States, the states and their political subdivisions. In determining whether an
activity is so closely related to banking as to be permissible for bank holding
companies, the Federal Reserve Board is required to consider whether the
performance of such activities by a bank holding company or its subsidiaries
can reasonably be expected to produce such benefits to the public as greater
convenience, increased competition and gains in efficiency that outweigh such
possible adverse effects as undue concentration of resources, decreased or
unfair competition, conflicts of interest and unsound banking practices.
Generally, bank holding companies are required to obtain prior approval of the
Federal Reserve Board to engage in any new activity not previously approved by
the Federal Reserve Board.
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<PAGE> 24
The Company is also regulated by the Georgia Banking Department under
the Georgia Bank Holding Company Act, which requires every Georgia bank holding
company to obtain the prior approval of the Georgia Commissioner of Banking
before acquiring more than 5% of the voting shares of any bank or all or
substantially all of the assets of a bank, or before merging or consolidating
with any other bank holding company. A Georgia bank holding company is
generally prohibited from acquiring ownership or control of 5% or more of the
voting shares of any bank unless the bank being acquired is either a bank for
purposes of the federal Bank Holding Company Act of 1956, or a federal or state
savings and loan association or a savings bank or federal savings bank whose
deposits are insured by the federal deposit insurance program and such bank has
been in existence and continuously operating as a bank for a period of five
years or more prior to the date of acquisition.
As a national bank, the Bank is subject to the supervision of the OCC
and, to a limited extent, the FDIC and the Federal Reserve Board. With respect
to expansion, national banks situated in the State of Georgia are generally
prohibited from establishing branch offices or facilities outside of the county
in which such main office is located, except (i) in adjacent counties in
certain situations, or (ii) by means of a merger, consolidation, or sale of
assets. The Georgia Legislature has adopted legislation which reduces the
limitations imposed on banks situated in the State of Georgia to establish
branch offices. The new law permits a Georgia bank to establish three new or
additional branch banks, de novo, in any county within the State of Georgia, in
addition to establishing branch offices or facilities in adjacent counties and
by merger or consolidation. Moreover, beginning on July 1, 1998, a bank
located in the State of Georgia will be permitted to establish new or
additional branch banks anywhere in the state by relocation of the parent bank
or another branch bank, or by merger, consolidation, or purchase of assets and
assumption of liabilities involving another parent bank or branch bank.
The Bank is also subject to the Georgia banking and usury laws
restricting the amount of interest which it may charge in making loans or other
extensions of credit. In addition, the Bank, as a subsidiary of the Company,
is subject to restrictions under federal law in dealing with the Company and
other affiliates, if any. These restrictions apply to extensions of credit to
an affiliate, investments in the securities of an affiliate and the purchase of
assets from an affiliate.
Loans and extensions of credit by national banks are subject to legal
lending limitations. Under federal law, a national bank may grant unsecured
loans and extensions of credit in an amount up to 15% of its unimpaired capital
and surplus to any person if the loan and extensions of credit are not fully
secured by collateral having a market value at least equal to their face
amount. In addition, a national bank may grant loans and extensions of credit
to a single person up to 10% of its unimpaired capital and surplus, provided
that the transactions are fully secured by readily marketable collateral having
a market value determined by reliable and continuously available price
quotations at least equal to the amount of funds outstanding. This 10%
limitation is separate from, and in addition to, the 15% limitation for
unsecured loans. Loans and extensions of credit may exceed the general lending
limit if they qualify under one of several exceptions. Such exceptions include
certain loans or extensions of credit arising from the discount of commercial
or business paper, the purchase of bankers' acceptances, loans secured by
documents of title, loans secured by U.S. obligations and loans to or
guaranteed by the federal government.
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 Equal Credit
Opportunity Act prohibiting discrimination on the basis of race, color,
religion, or other prohibited factors in extending credit, the Fair Credit
Reporting 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 are also subject to the Electronic Funds
Transfer Act and Regulation E issued by the Federal Reserve Board to implement
that act, which govern automatic deposits to and withdrawals from deposit
accounts and
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<PAGE> 25
customers' rights and liabilities arising from the use of automated teller
machines and other electronic banking services.
The Bank is also subject to the provisions of the Community Reinvestment
Act of 1977, which requires the appropriate federal regulator, in connection
with its regular examination of a bank, to assess the bank's record in meeting
the credit needs of the community serviced by the bank, including low- and
moderate-income neighborhoods. The OCC's assessment of a bank's record is made
available to the public. Further, an evaluation of any bank's performance is
required of any bank that has applied, among other things, to establish a new
branch office that will accept deposits, to relocate an existing office, or to
merge or consolidate with, or acquire the assets of or assume the liabilities
of, a federally-regulated financial institution.
Both the Company and the Bank are subject to regulatory capital
requirements imposed by the Federal Reserve Board and the OCC. In 1989, each
of those agencies issued new risk-based capital guidelines for bank holding
companies and banks which made regulatory capital requirements more sensitive
to differences in risk profiles of various banking organizations. The capital
adequacy guidelines issued by the Federal Reserve Board are applied to bank
holding companies on a consolidated basis with the banks owned by the holding
company. The risk capital guidelines of the OCC apply directly to national
banks regardless of whether they are a subsidiary of a bank holding company.
Each agency's requirements (which are substantially similar), provide that
banking organizations must have capital equivalent to 8% of risk-weighted
assets. The risk weights assigned to assets are based primarily on credit
risks. Depending upon the riskiness of a particular asset, it is assigned to a
risk category. For example, securities with an unconditional guarantee by the
United States government are assigned to the lowest risk category. A risk
weight of 50% is assigned to loans secured by owner-occupied one to four family
residential mortgages, provided that certain conditions are met. The aggregate
amount of assets assigned to each risk category is multiplied by the risk
weight assigned to that category to determine the weighted values, which are
added together to determine total risk-weighted assets. The Federal Reserve
Board and the OCC have also implemented new minimum capital leverage ratios to
be used in tandem with the risk-based guidelines in assessing the overall
capital adequacy of banks and bank holding companies. Under the Federal
Reserve Board and OCC rules, banking institutions are required to maintain a
ratio of 3% "Tier 1" capital to total assets (net of goodwill). Tier 1 capital
includes common stockholders equity, noncumulative perpetual preferred stock
and minority interests in the equity accounts of consolidated subsidiaries.
Both the risk-based capital guidelines and the leverage ratio are
minimum requirements, applicable only to top- rated banking institutions.
Institutions operating at or near these levels are expected to have
well-diversified risk, high asset quality, high liquidity, good earnings and in
general, have to be considered strong banking organizations, rated composite 1
under the CAMEL rating system for banks. Institutions with lower ratings and
institutions with high levels of risk or experiencing or anticipating
significant growth would be expected to maintain ratios 100 to 200 basis points
above the stated minimums.
The OCC amended the risk-based capital guidelines applicable to national
banks in an effort to clarify certain questions of interpretation and
implementation, specifically with regard to treatment of originated and
purchased mortgage servicing rights and other intangible assets. The OCC's
guidelines provide that intangible assets are generally deducted from Tier 1
capital in calculating a bank's risk-based capital ratio. However, certain
intangible assets which meet specified criteria ("qualifying intangibles") such
as mortgage servicing rights are retained as a part of Tier 1 capital. The OCC
currently maintains that only mortgage servicing rights and purchased credit
card relationships meet the criteria to be considered qualifying intangibles.
The OCC's guidelines formerly provided that the amount of such qualifying
intangibles that may be included in Tier 1 capital was strictly limited to a
maximum of 25% of total Tier 1 capital. The OCC has amended its guidelines to
increase the limitation on such qualifying intangibles from 25% to 50% of Tier
1 capital and further to permit the inclusion of purchased credit card
relationships as a qualifying intangible asset.
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<PAGE> 26
In addition, the OCC has adopted rules which clarify treatment of asset
sales with recourse not reported on a bank's balance sheet. Among assets
affected are mortgages sold with recourse under Fannie Mae, Freddie Mac and
Farmer Mac programs. The rules clarify that even though those transactions are
treated as asset sales for bank Call Report purposes, those assets will still
be subject to a capital charge under the risk-based capital guidelines.
The OCC and the Federal Reserve Board recently adopted final regulations
revising their risk-based capital guidelines to further ensure that the
guidelines take adequate account of interest rate risk. Interest rate risk is
the adverse effect that changes in market interest rates may have on a bank's
financial condition and is inherent to the business of banking. Under the new
regulations, when evaluating a bank's capital adequacy, the agencies capital
standards now explicitly include a bank's exposure to declines in the economic
value of its capital due to changes in interest rates. The exposure of a
bank's economic value generally represents the change in the present value of
its assets, less the change in the value of its liabilities, plus the change in
the value of its interest rate off-balance sheet contracts. Concurrently, the
agencies issued a joint policy statement to bankers, effective June 26, 1996,
to provide guidance on sound practices for managing interest rate risk. In the
policy statement, the agencies emphasize the necessity of adequate oversight by
a bank's Board of Directors and senior management and of a comprehensive risk
management process. The policy statement also describes the critical factors
affecting the agencies' evaluations of a bank's interest rate risk when making
a determination of capital adequacy. The agencies' risk assessment approach
used to evaluate a bank's capital adequacy for interest rate risk relies on a
combination of quantitative and qualitative factors. Banks that are found to
have high levels of exposure and/or weak management practices will be directed
by the agencies to take corrective action.
The Federal Deposit Insurance Corporation Improvement Act of 1991 (the
"Act"), enacted on December 19, 1991, provides for a number of reforms relating
to the safety and soundness of the deposit insurance system, supervision of
domestic and foreign depository institutions and improvement of accounting
standards. One aspect of the Act involves the development of a regulatory
monitoring system requiring prompt action on the part of banking regulators
with regard to certain classes of undercapitalized institutions. While the Act
did not change any of the minimum capital requirements, it directed each of the
federal banking agencies to issue regulations implementing the monitoring plan.
The Act creates five "capital categories" ("well capitalized," "adequately
capitalized," "undercapitalized," "significantly undercapitalized" and
"critically undercapitalized") which are defined in the Act and which are used
to determine the severity of corrective action the appropriate regulator may
take in the event an institution reaches a given level of undercapitalization.
For example, an institution which becomes "undercapitalized" must submit a
capital restoration plan to the appropriate regulator outlining the steps it
will take to become adequately capitalized. Upon approving the plan, the
regulator will monitor the institution's compliance. Before a capital
restoration plan will be approved, any entity controlling a bank (i.e., holding
companies) must guarantee compliance with the plan until the institution has
been adequately capitalized for four consecutive calendar quarters. The
liability of the holding company is limited to the lesser of five percent of
the institution's total assets or the amount which is necessary to bring the
institution into compliance with all capital standards. In addition,
"undercapitalized" institutions will be restricted from paying management fees,
dividends and other capital distributions, will be subject to certain asset
growth restrictions and will be required to obtain prior approval from the
appropriate regulator to open new branches or expand into new lines of
business.
As an institution drops to lower capital levels, the extent of action to
be taken by the appropriate regulator increases, restricting the types of
transactions in which the institution may engage and ultimately providing for
the appointment of a receiver for certain institutions deemed to be critically
undercapitalized.
The Act also provides that banks have to meet new safety and soundness
standards. In order to comply with the Act, the Federal Reserve Board, the OCC
and the FDIC have adopted regulations defining
22
<PAGE> 27
operational and managerial standards relating to internal controls, loan
documentation, credit underwriting, interest rate exposure, asset growth and
compensation, fees and benefits.
Both the capital standards and the safety and soundness standards which
the Act seeks to implement are designed to bolster and protect the deposit
insurance fund.
In response to the directive issued under the Act, the regulators have
issued regulations which, among other things, prescribe the capital thresholds
for each of the five capital categories established by the Act. The following
table reflects the capital thresholds:
<TABLE>
<CAPTION>
Total Risk - Tier 1 Risk - Tier 1
Based Capital Based Capital Leverage
Ratio Ratio Ratio
------------------- ------------------- -------------
<S> <C> <C> <C>
Well capitalized(1) 10% 6% 5%
Adequately Capitalized(1) 8% 4% 4% (2)
Undercapitalized(3) < 8% < 4% < 4% (4)
Significantly Undercapitalized(3) < 6% < 3% < 3%
Critically Undercapitalized - - > 2% (5)
-
---------------------------
</TABLE>
(1) An institution must meet all three minimums.
(2) 3% for composite 1-rated institutions, subject to appropriate federal
banking agency guidelines.
(3) An institution falls into this category if it is below the specified
capital level for any of the three capital measures.
(4) Less than 3% for composite 1-rated institutions, subject to appropriate
federal banking agency guidelines.
(5) Ratio of tangible equity to total assets.
As a national bank, the Bank is subject to examination and review by the
OCC. This examination is typically completed on-site at least annually and is
subject to off-site review at call. The OCC, at will, can access quarterly
reports of condition, as well as such additional reports as may be required by
the national banking laws.
As a bank holding company, the Company is required to file with the
Federal Reserve Board an annual report of its operations at the end of each
fiscal year and such additional information as the Federal Reserve Board may
require pursuant to the Act. The Federal Reserve Board may also make
examinations of the Company and each of its subsidiaries.
The scope of regulation and permissible activities of the Company and
the Bank is subject to change by future federal and state legislation.
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<PAGE> 28
ORGANIZERS AND PRINCIPAL STOCKHOLDERS
The following persons comprise the Organizers of the Company and the
Bank: C. Dean Alford; William L. Daniel; Hazel E. Durden; John A. Fountain,
M.D.; Michael P. Jones; Julia W. Morgan; R. Flynn Nance, D.V.M.; Michael R.
Potts; and Arthur J. Torsiglieri, Jr., M.D. Eight of the Organizers reside in
Conyers, Georgia. One Organizer resides in Greensboro, Georgia, which is
approximately 60 miles from Conyers. The Organizers as a group intend to
subscribe for 139,500 shares or $1,395,000 in the offering which will equal
22.87% of the 610,000 shares to be outstanding upon completion of the minimum
offering. In addition to the subscriptions committed to by the Organizers, the
Organizers have also indicated that they may be willing to subscribe for
additional shares in the offering, if necessary, to help the Company complete
the offering and release the proceeds from escrow. In any event, total
purchases by the Organizers will not exceed 200,000 shares or $2,000,000 in the
aggregate, which will equal 32.8% of the 610,000 shares to be outstanding upon
completion of the minimum offering.
Upon commencement of the business of the Bank, Mr. Daniel will receive
options to purchase shares of the Company's common stock equal to 1% of the
amount of common stock sold in this offering, at an option price of $10.00 per
share. One-half of these options vest when the Bank opens for business and the
remainder vest over two years. See "MANAGEMENT -- Executive Compensation."
All organizational expenses of the Company and the Bank will be financed
by the Organizers. The Company has obtained a $300,000 line of credit from The
Bankers Bank at an annual rate of interest of prime, available to pay
organizational expenses of the Bank. Each of the nine Organizers has
guaranteed twice his or her pro rata share of the total line of credit. In the
event that the requisite approvals are obtained, a portion of the proceeds of
this offering will be used to repay any borrowings on the line of credit, to
the extent such repayment is reasonable and not detrimental to the operations
of the Bank, and to the extent such repayment is allowed by the Comptroller and
other appropriate bank regulatory authorities. See "USE OF PROCEEDS."
Each of the Organizers intends to purchase a number of the shares of
common stock of the Company offered hereby set forth in the following table,
which also specifies the percentage of Common Stock to be owned by the
Organizers after completion of the minimum offering.
<TABLE>
<CAPTION>
Number Percent of
Name of Beneficial Owner of Shares Minimum Offering
------------------------ --------- ----------------
<S> <C> <C>
C. Dean Alford 20,000 3.28%
William L. Daniel 12,500 2.05
Hazel E. Durden 10,000 1.64
John A. Fountain, M.D. 12,000 1.97
Michael P. Jones 25,000 4.10
Julia W. Morgan 25,000 4.10
R. Flynn Nance, D.V.M. 10,000 1.64
Michael R. Potts 15,000 2.46
Arthur J. Torsiglieri, Jr., M.D. 10,000 1.64
-------- ------
TOTAL 139,500 22.87%
</TABLE>
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<PAGE> 29
Certain of the Organizers anticipate financing all or a portion of
their purchases of the Company's Common Stock. In connection therewith,
SunTrust Bank has agreed to finance up to 75% of the purchase price of the
Company's Common Stock for each Organizer who so elects. Such loans will be
payable over a term of ten years, will be secured by the Company's Common Stock
and will bear interest at an annual rate of prime plus 1% adjusted daily.
MANAGEMENT
DIRECTORS AND EXECUTIVE OFFICERS OF THE COMPANY AND THE BANK
The Company's directors and executive officers and the Bank's proposed
directors and executive officers are as follows:
<TABLE>
<CAPTION>
Name Position with Company Position with Bank
- ------------------------------ ----------------------------------- ----------------------------------
<S> <C> <C>
C. Dean Alford Class I Director Director
William L. Daniel President, Chief Executive Officer, President, Chief Executive Officer,
Class I Director Director
Hazel E. Durden Class I Director Director
John A. Fountain, M.D. Class II Director Director
Michael P. Jones Chairman, Class II Director Director
Julia W. Morgan Secretary, Class III Director Director
R. Flynn Nance, D.V.M. Class II Director Director
Michael R. Potts Class III Director Director
Arthur J. Torsiglieri, Jr., M.D. Class III Director Director
</TABLE>
Each of the above persons has been a director of the Company since
February 1997. The Company has a classified Board of Directors whereby
one-third of the members will be elected each year at the Company's Annual
Meeting of Shareholders. Upon such election, each director of the Company will
serve for a term of three years. See "DESCRIPTION OF COMMON STOCK -- Board of
Directors." The Company's officers are appointed by the Board of Directors and
hold office at the will of the Board.
Each of the Bank's proposed directors will, upon approval of the OCC,
serve until the Bank's first shareholders meeting, which meeting will be held
shortly after the Bank receives its charter. It is anticipated that each
interim director will be nominated to serve as director of the Bank at that
meeting. After the first shareholders meeting, directors of the Bank will
serve for a term of one year and will be elected each year at the Bank's Annual
Meeting of Shareholders. The Bank's officers will be appointed by its Board of
Directors and will hold office at the will of the Board.
C. DEAN ALFORD, age 43, has served as President and Chief Executive
Officer of A&C Intercom, Inc. since 1977. Mr. Alford is presently Chairman of
Rockdale Health Systems, a director of the Rockdale Rotary Club, The Boy Scouts
of America (and a 1997 recipient of the Silver Beaver Award from the Atlanta
Area Council of The Boy Scouts of America), Conyers/Rockdale Boys & Girls Club,
Conyers/Rockdale Chamber of Commerce, and the Center for the Visually Impaired.
Mr. Alford is also the Chairman of the Georgia Tech School of Electrical and
Computer Engineering Advisory Board, and is Chairman of the Transition Team
and the Recreation Committee at Rockdale Baptist Church.
25
<PAGE> 30
WILLIAM L. DANIEL, age 47, began his banking career at Citizens &
Southern National Bank in 1972 ultimately rising to the level of Senior Vice
President when he left C&S in 1986. From December 1986 until September 1988,
Mr. Daniel served as an organizer, President and Chief Executive Officer of
the Enterprise National Bank, Atlanta, Georgia. From December 1988 until March
1996, Mr. Daniel served in various executive positions with Bank South
Corporation, ending with the position of Regional President supervising the
bank's 24 branches in Rockdale, South DeKalb, South Fulton, Clayton and Fayette
counties. After the acquisition of Bank South Corporation by NationsBank, Mr.
Daniel became Executive Vice President of First Newton Bank, Covington,
Georgia. Effective January 31, 1997, Mr. Daniel has been devoting his full
time to the organization of the Company and the chartering of the Bank. Mr.
Daniel is active in the Good Shepherd Episcopal Church and is a director of the
Rockdale County Water and Sewage Authority. Mr. Daniel is also Leadership
Chairman of the Partners for Tomorrow Initiative and Chairman of the Rockdale
County 1997 March of Dimes Walk America campaign.
HAZEL E. DURDEN, age 67, is owner and real estate broker at Realty
Metro, a company she founded in 1972. From 1953 until 1992, Mrs. Durden was
employed in a management capacity with the Lovable Company. Mrs. Durden is a
member of the Conyers/Rockdale Chamber of Commerce, the American Business Woman
Association, and the Conyers/Rockdale Pilot Club. Mrs. Durden is also a former
member of the Grievance Committee of Ethics and Relations of the Rockdale Board
of Realtors.
JOHN A. FOUNTAIN, M.D., age 44, has maintained a medical practice
specializing in dermatology in Conyers, Georgia since 1983. Dr. Fountain is a
member of the Medical Association of Georgia, American Academy of Dermatology,
American Society of Dermatology Surgeons, and serves a Clinical Associate
Professor of Dermatology at Emory University School of Medicine. Dr. Fountain
is a former director of the Conyers/Rockdale Chamber of Commerce and is the
Technical Director of boys soccer for the Rockdale County School System. Dr.
Fountain has also served as Honorary Chairman for the Rockdale Emergency Relief
Fund and is a life member of the Georgia Master 4-H Club and the Georgia 4-H
Counselor Association.
MICHAEL P. JONES, age 50, is Managing Partner of Jones & McKnight, P.C.,
Certified Public Accountants, which Mr. Jones founded in 1976. Mr. Jones has
served as an advisory director for Bank South, Conyers, Georgia from 1988 to
1995 and has served as Chairman of the Conyers/Rockdale Chamber of Commerce.
Mr. Jones is a member of the American Institute of CPAs and the Georgia Society
of CPAs. Mr. Jones is also a 1993 Alumnus of the Regional Leadership Institute
and has held numerous leadership positions with several Rockdale County youth
sports organizations. Mr. Jones serves on the Administrative Board and is
Chairman of Stewardship of the Salem United Methodist Church.
JULIA W. MORGAN, age 69, is presently Chief Executive Officer of Ed
Morgan & Associates, Inc., a corporation which she has owned and operated since
1981. Ms. Morgan served as a director of First Bank of Conyers until that bank
merged with Bank South in 1987, at which time she became an advisory director
for Bank South and served as a director for its parent corporation, Bank South
Corporation, until 1996 when the bank merged with NationsBank. Ms. Morgan has
served as the Chairperson for the Rotary Club of Conyers and a is member of the
American Society of Life Underwriters and the Conyers/Rockdale Chamber of
Commerce. Ms. Morgan currently serves on the Rockdale County Impoundment
Authority and the Rockdale County Water and Sewer Authority.
R. FLYNN NANCE, D.V.M., age 41, has since 1987 served as the President
and owner of Honey Creek Veterinary Hospital, Inc., which is a veterinary
medical facility offering medical and surgical care of companion animals in
Conyers, Georgia. Dr. Nance is a member of Conyers/Rockdale Chamber of
Commerce, the American Veterinary Medical Association, the American Heartworm
Society, the Greater Atlanta Veterinary Medical Association, and the Georgia
Veterinary Medical Association. Dr. Nance is also a charter member of the
Rotary Club of Rockdale County.
26
<PAGE> 31
MICHAEL R. POTTS, age 42, is the founder and President of Potts General
Contractors, Inc., a general commercial construction contracting firm started
by Mr. Potts in 1986. Mr. Potts is a member of the Georgia Chapter of
Associate General contractors. Mr. Potts is also currently serving and has
served since 1992 as Director of Construction for the Rockdale County Board of
Commissioners. He is a former Board member and Executive Committee member of
the Conyers/Rockdale Chamber of Commerce, and is an active charter member of
the Haven Fellowship Church.
ARTHUR J. TORSIGLIERI, JR., M.D., age 37, has since June 1990 been a
physician in Conyers, Georgia specializing in ear, nose and throat illnesses
and is President of ENT Specialists, P.C., and is affiliated with Honey Creek
Medical Association, Inc. and Wellbrook Association, Conyers, Georgia. Dr.
Torsiglieri is also a clinical instructor, Department of Surgery, Division of
Otolaryngology at Emory University, Atlanta, Georgia. Dr. Torsiglieri is a
Fellow of the American Academy of Otolaryngology and the American College of
Surgeons. Dr. Torsiglieri is a charter member of the Rotary Club of Rockdale
and serves on the Eagle Board of Review for the Boy Scouts of America in
Rockdale and Newton Counties.
There are no family relationships between any director or executive
officer and any other director or executive officer of the Company.
EXECUTIVE COMPENSATION
On February 21, 1997, the Organizers entered into an Employment
Agreement with William L. Daniel pursuant to which Mr. Daniel will be paid
$7,500 per month as a consultant to the Organizers for the purpose of assisting
with the organization of the Bank and the Company. Once the Bank opens for
business, the Employment Agreement provides that Mr. Daniel shall be employed
as President and Chief Executive Officer of the Bank for a period ending on
February 21, 2000, and shall be entitled to receive an annual base salary of
$100,000, which may be increased at the discretion of the Board of Directors of
the Bank at the end of the calendar quarter in which total deposits equal or
exceed $20 million. Beginning on the second anniversary of the Bank's opening
for business, Mr. Daniel is also eligible to receive a bonus in an amount
determined by the Bank's Board of Directors. The Employment Agreement provides
for the grant of stock options to Mr. Daniel in the amount of 1% of the Common
Stock of the Company sold in this offering at a purchase price of $10.00 per
share pursuant to an Incentive Stock Option Plan to be adopted by the Company.
50% of these options shall vest beginning on the date the Bank commences
business, and 25% of such options shall vest on each of the first and second
anniversaries of the Bank's opening for business. All such options shall be
exercisable for a period of seven (7) years.
The Employment Agreement also provides that Mr. Daniel shall receive an
automobile allowance of $700 per month and such other benefits, such as health,
hospitalization, disability and term life insurance generally made available to
other senior executives of the Company and the Bank.
Mr. Daniel has agreed to a non-compete and non-solicitation provision
pursuant to which he agrees that and through the actual date of termination of
the Employment Agreement and for a period of twelve months thereafter, he shall
not, without the prior written consent of the Bank, within the primary service
area of the Bank either directly or indirectly serve as an executive officer of
any bank, bank holding company, or other financial institution.
The Employment Agreement provides that the Bank may terminate the
employment of Mr. Daniel for any reason, and, in such event, Mr. Daniel shall
be entitled to the payment of his base salary for a period of six months and
for reimbursement of up to $3,000 in fees incurred in connection with
outplacement services.
No other officer or director of the Company have received any cash
compensation for services to the Company.
27
<PAGE> 32
STOCK OPTION PLANS
The Company's Board of Directors will adopt an Incentive Stock Option
Plan (the "Plan") to cover Mr. Daniel's options and for employees who are
contributing significantly to the management or operation of the business of
the Company or its subsidiaries as determined by the committee administering
the Plan. The Plan will be contingent upon approval by the stockholders of the
Company. The Plan will provide for the grant of options at the discretion of a
committee designated by the Board of Directors to administer the Plan. No
person may serve as a member of the committee who is then eligible for a grant
of options under the Plan or has been so eligible for a period of one year
prior to his service on the committee. The option exercise price must be at
least 100% (110% in the case of a holder of 10% or more of the Common Stock) of
the fair market value of the stock on the date the option is granted and the
options are exercisable by the holder thereof in full at any time prior to
their expiration in accordance with the terms of the Plan. Stock options
granted pursuant to the Plan will expire on or before (1) the date which is the
tenth anniversary of the date the option is granted, or (2) the date which is
the fifth anniversary of the date the option is granted in the event that the
option is granted to a key employee who owns more than 10% of the total
combined voting power of all classes of stock of the Company or any subsidiary
of the Company.
The Board of Directors may, at the Company's first Annual Meeting of
Shareholders after the Bank opens for business, propose for shareholder
approval a directors stock option plan, which will be designed to provide
incentive compensation to directors in the event that the Company's common
stock increases in value during the term of such options. The details of this
directors option plan have not yet been determined, but these details will be
disclosed to shareholders in the Company's Proxy Statement issued in connection
with solicitation of shareholder approval of such plan.
CERTAIN TRANSACTIONS
Once the Bank opens for business, it is anticipated that it will extend
loans from time to time to certain of the Company's directors, their associates
and members of the immediate families of the directors and executive officers
of the Company. These loans will be made in the ordinary course of business on
substantially the same terms, including interest rates, collateral and
repayment terms, as those prevailing at the time for comparable transactions
with persons not affiliated with the Company or the Bank, and will not involve
more than the normal risk of collectibility or present other unfavorable
features.
28
<PAGE> 33
DESCRIPTION OF COMMON STOCK
The authorized capital stock of the Company consists of 10,000,000
shares of Common Stock, $1.00 par value of which no shares are presently issued
and outstanding.
COMMON STOCK
The holders of Common Stock are entitled to elect the members of the
Board of Directors of the Company and such holders are entitled to vote as a
class on all matters required or permitted to be submitted to the shareholders
of the Company.
No holder of any class of stock of the Company has preemptive rights
with respect to the issuance of shares of that or any other class of stock and
the Common Stock is not entitled to cumulative voting rights with respect to
the election of directors.
The holders of Common Stock are entitled to dividends and other
distributions if, as, and when declared by the Board of Directors out of assets
legally available therefor. Upon the liquidation, dissolution, or winding up
of the Company, the holder of each share of Common Stock will be entitled to
share equally in the distribution of the Company's assets. The holders of
Common Stock are not entitled to the benefit of any sinking fund provision.
The shares of Common Stock of the Company are not subject to any redemption
provisions, nor are they convertible into any other security or property of the
Company. All outstanding shares of each class of Common Stock are, and the
shares to be outstanding upon completion of this offering will be, fully paid
and nonassessable.
BOARD OF DIRECTORS
The initial Board of Directors of the Company consists of nine
directors. The directors are divided into three classes, designated Class I,
Class II and Class III. Each class will consist, as nearly as may be possible,
of one- third of the total number of directors constituting the entire Board of
Directors. The term of the Company's initial Class I directors expires at the
Company's first Annual Meeting of Shareholders; the term of the Company's
initial Class II directors expires at the Company's second Annual Meeting of
Shareholders; and the term of the Company's initial Class III directors expires
at the Company's third Annual Meeting of Shareholders. At each Annual Meeting
of Shareholders, successors to the class of directors whose term expires at the
Annual Meeting will be elected for a three- year term. If the number of
directors is changed, an increase or decrease will be apportioned among the
classes so as to maintain the number of directors in each class as nearly equal
as possible, and any additional director of any class elected to fill a vacancy
resulting from an increase in such class will hold office for a term that will
coincide with the remaining term of that class, but in no event will a decrease
in the number of directors shorten the term of any incumbent director. Any
director elected to fill a vacancy not resulting from an increase in the number
of directors will have the same remaining term as that of his predecessor.
Except in the case of removal from office, any vacancy on the Board of
Directors, will be filled by a majority vote of the remaining directors then in
office.
Any director may be removed, with or without cause, at any regular or
special meeting of shareholders called for that purpose, and his position
filled by another person nominated and elected for that purpose by the holders
of seventy-five percent (75%) of the outstanding shares of the Company's Common
Stock.
The effect of the classified Board of Directors is to make it more
difficult for a person, entity or group to effect a change in control of the
Company through the acquisition of a large block of the Company's voting stock.
29
<PAGE> 34
REQUIREMENTS FOR SUPERMAJORITY APPROVAL OF TRANSACTIONS
The Company's Articles of Incorporation contain provisions requiring
supermajority stockholder approval to effect certain extraordinary corporate
transactions which are not approved by the Board of Directors. The Articles of
Incorporation require the affirmative vote or consent of the holders of at
least two-thirds (66-2/3%) of the shares of each class of Common Stock of the
Company entitled to vote in elections of directors to approve any merger,
consolidation, disposition of all or a substantial part of the assets of the
Company or a subsidiary of the Company, exchange of securities requiring
stockholder approval or liquidation of the Company ("Covered Transaction"), if
any person who together with his affiliates and associates owns beneficially 5%
or more of any voting stock of the Company ("Interested Person") is a party to
the transaction; provided that three-fourths (75%) of the entire Board of
Directors of the Company has not approved the transaction. In addition, the
Articles of Incorporation require the separate approval by the holders of a
majority of the shares of each class of stock of the Company entitled to vote
in elections of directors which are not beneficially owned, directly or
indirectly, by an Interested Person, of any merger, consolidation, disposition
of all or a substantial part of the assets of the Company or a subsidiary of
the Company, or exchange of securities requiring stockholder approval
("Business Combination"), if an Interested Person is a party to such
transaction; provided, that such approval is not required if (a) the
consideration to be received by the holders of the stock of the Company meets
certain minimal levels determined by a formula under the Articles of
Incorporation (generally the highest price paid by the Interested Person for
any shares which he has acquired), (b) there has been no reduction in the
average dividend rate from that which was obtained prior to the time the
Interested Person became such, and (c) the consideration to be received by
shareholders who are not Interested Persons shall be paid in cash or in the
same form as the Interested Person previously paid for shares of such class of
stock. These Articles of the Company's Articles of Incorporation, as well as
the Article establishing a classified Board of Directors, may be amended,
altered, or repealed only by the affirmative vote or consent of the holders of
at least 75% of the shares of each class of stock of the Company entitled to
vote in elections of directors.
The effect of these provisions is to make it more difficult for a
person, entity or group to effect a change in control of the Company through
the acquisition of a large block of the Company's voting stock.
LIMITATIONS ON LIABILITY AND INDEMNIFICATION OF OFFICERS AND DIRECTORS
As provided under Georgia law, the Company's Articles of Incorporation
provide that a director shall not be personally liable to the Company or its
stockholders for monetary damages for breach of duty of care or any other duty
owed to the Company as a director, except that such provision shall not
eliminate or limit the liability of a director (a) for any appropriation, in
violation of his duties, of any business opportunity of the Company, (b) for
acts or omissions which involve intentional misconduct or a knowing violation
of law, (c) for unlawful corporate distributions, or (d) for any transaction
from which the director received an improper personal benefit.
Article VI of the Company's Bylaws provides that the Company shall
indemnify a director who has been successful in the defense of any proceeding
to which he was a party or in defense of any claim, issue or matter therein
because he is or was a director of the Company, against reasonable expenses
incurred by him in connection with such defense.
The Company's Bylaws also provide that the Company is required to
indemnify any director, officer, employee or agent made a party to a proceeding
because he is or was a director, employee or agent against liability incurred
in the proceeding if he acted in a manner he believed in good faith or to be in
or not opposed to the best interests of the Company and, in the case of any
criminal proceeding, he had no reasonable cause to believe his conduct was
unlawful. Determination concerning whether or not the applicable standard of
conduct has been met can be made by (a) a disinterested majority of the Board
of Directors, (b) a majority
30
<PAGE> 35
of a committee of disinterested directors, (c) independent legal counsel, or
(d) an affirmative vote of a majority of shares held by disinterested
stockholders. No indemnification may be made to or on behalf of a director,
officer, employee or agent (i) in connection with a proceeding by or in the
right of the Company in which such person was adjudged liable to the Company or
(ii) in connection with any other proceeding in which such person was adjudged
liable on the basis that personal benefit was improperly received by him.
The Company may, if authorized by its stockholders by a majority of
votes which would be entitled to be cast in a vote to amend the Company's
Articles of Incorporation, indemnify or obligate itself to indemnify a
director, officer, employee or agent made a party to a proceeding, including a
proceeding brought by or in the right of the Company.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 (the "Act") may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the foregoing provisions, or otherwise,
the Company has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Act and is, therefore, unenforceable.
STATUTORY PROVISIONS
The State of Georgia has statutory provisions relating to business
combinations between a Georgia corporation and an "interested shareholder" that
outline the statutory requirements to effect such transactions. However, the
law provides that these sections only apply if the corporation specifically
provides in its bylaws that such requirements are applicable. The Company has
not so provided in its bylaws and, therefore, these statutory anti-takeover
provisions do not apply to the Company.
LEGAL PROCEEDINGS
There are no material pending legal proceedings to which the Company or
the Bank is a party or of which any of their properties are subject; nor are
there material proceedings known to the Company to be contemplated by any
governmental authority; nor are there material proceedings known to the
Company, pending or contemplated, in which any director, officer or affiliate
or any principal security holder of the Company, or any associate of any of the
foregoing is a party or has an interest adverse to the Company or the Bank.
LEGAL MATTERS
Certain legal matters in connection with the shares of Common Stock
offered hereby will be passed upon for the Company by Smith, Gambrell &
Russell, LLP, Suite 1800, 3343 Peachtree Road, N.E., Atlanta, Georgia 30326,
counsel to the Company.
EXPERTS
The financial statements of Rockdale National Bancshares, Inc. as of
February 28, 1997 and for the period from Inception (February 13, 1997) to
February 28, 1997 (the organization period) included herein and elsewhere in
the Registration Statement have been included herein and in the Registration
Statement in reliance upon the reports of Bricker & Melton, P.A., independent
certified public accountants, appearing elsewhere herein, and upon the
authority of said firm as experts in accounting and auditing.
31
<PAGE> 36
ADDITIONAL INFORMATION
The Company has filed with the Securities and Exchange Commission,
Washington, D.C. 20549, a Registration Statement (herein, together with all
amendments thereto, called the "Registration Statement") under the Securities
Act of 1933, as amended, with respect to the shares of Common Stock offered
hereby. This Prospectus does not contain all of the information included in
the Registration Statement and the exhibits and schedules thereto. For further
information with respect to the Company and the Common Stock, reference is
hereby made to the Registration Statement and the exhibits and schedules
thereto. In addition, the Company will provide, without charge, to each person
who receives a Prospectus, upon written or oral request of such person, a copy
of any of the information that was incorporated by reference in the Prospectus.
Such request shall be directed to the Company either at its temporary mailing
address at P. O. Box 82030, Conyers, Georgia 30208 or at its temporary
telephone number at (770) 760-7573.
32
<PAGE> 37
==================================
ROCKDALE NATIONAL BANCSHARES, INC.
(A DEVELOPMENT STAGE CORPORATION)
FINANCIAL STATEMENTS
FEBRUARY 28, 1997
==================================
<PAGE> 38
ROCKDALE NATIONAL BANCSHARES, INC.
(A DEVELOPMENT STAGE CORPORATION)
================================================================================
INDEX TO FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
Report of Independent Certified Public Accountants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-1
Balance Sheet--February 28, 1997 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-2
Statement of Operations for the Period from
Inception (February 13, 1997) to February 28, 1997 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-3
Statement of Changes in Stockholders' Equity
for the Period from Inception (February 13, 1997) to February 28, 1997 . . . . . . . . . . . . . . . . . . . . . F-4
Statement of Cash Flows for the Period from
Inception (February 13, 1997) to February 28, 1997 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-5
Notes to Financial Statements as of February 28, 1997 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-6
</TABLE>
<PAGE> 39
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
The Board of Directors
Rockdale National Bancshares, Inc.
We have audited the accompanying balance sheet of Rockdale National
Bancshares, Inc. (a development stage corporation), as of February 28, 1997,
and the related statements of operations, changes in stockholders' equity and
cash flows for the period from inception (February 13, 1997) to February 28,
1997. 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 Rockdale National
Bancshares, Inc. as of February 28, 1997, and the results of its operations and
its cash flows for the period from inception (February 13, 1997) to February
28, 1997, in conformity with generally accepted accounting principles.
The accompanying financial statements have been prepared assuming that
Rockdale National Bancshares, 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 plans 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 the uncertainty.
BRICKER & MELTON, P.A.
Duluth, Georgia
March 18, 1997
F-1
<PAGE> 40
ROCKDALE NATIONAL BANCSHARES, INC.
(A DEVELOPMENT STAGE CORPORATION)
BALANCE SHEET
FEBRUARY 28, 1997
================================================================================
<TABLE>
<CAPTION>
ASSETS
<S> <C>
Cash $ 26,322
-------------
Current Assets 26,322
-------------
Organization costs 35,271
Deferred stock offering expenses 5,500
Other assets--earnest money 10,000
-------------
TOTAL ASSETS $ 77,093
=============
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES
Accounts payable--organizers (Note 2) $ 85,000
-------------
Current liabilities 85,000
-------------
TOTAL LIABILITIES 85,000
-------------
Commitments (Note 3)
STOCKHOLDERS' EQUITY
Common stock, par value $1.00 per share; 10,000,000 shares
authorized; organizational shares 50
Additional paid-in capital 450
Deficit accumulated during the development stage (8,407)
-------------
TOTAL STOCKHOLDERS' EQUITY (7,907)
-------------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $ 77,093
=============
</TABLE>
See accompanying notes to financial statments.
F-2
<PAGE> 41
ROCKDALE NATIONAL BANCSHARES, INC.
(A DEVELOPMENT STAGE CORPORATION)
STATEMENT OF OPERATIONS
FOR THE PERIOD FROM INCEPTION (FEBRUARY 13, 1997) TO FEBRUARY 28,1997
================================================================================
<TABLE>
<S> <C>
Expenses:
Management consulting fees $ 7,941
Other operating 466
---------
Net loss $ 8,407
=========
</TABLE>
See accompanying notes to financial statements.
F-3
<PAGE> 42
ROCKDALE NATIONAL BANCSHARES, INC.
(A DEVELOPMENT STAGE CORPORATION)
STATEMENT OF STOCKHOLDERS' EQUITY
FOR THE PERIOD FROM INCEPTION (FEBRUARY 13, 1997) TO FEBRUARY 28, 1997
================================================================================
<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
organization shares $ 50 $ 450 $ -- $ 500
Net loss -- -- (8,407) (8,407)
------------- -------------- ---------------- ----------
Balance, February 28, 1997 $ 50 $ 450 $ (8,407) $ (7,907)
============= ============== ================ ==========
</TABLE>
See accompanying notes to financial statements.
F-4
<PAGE> 43
ROCKDALE NATIONAL BANCSHARES, INC.
(A DEVELOPMENT STAGE CORPORATION)
STATEMENT OF CASH FLOWS
FOR THE PERIOD FROM INCEPTION (FEBRUARY 13, 1997) TO FEBRUARY 28, 1997
================================================================================
<TABLE>
<S> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss $ (8,407)
Adjustments to reconcile net income to net cash provided by operating
activities:
Increase in other assets--earnest money (10,000)
------------
NET CASH USED BY OPERATING ACTIVITIES (18,407)
------------
CASH FLOWS FROM INVESTING ACTIVITIES
Organization costs (35,271)
Deferred stock offering expenses (5,500)
------------
NET CASH USED BY INVESTING ACTIVITIES (40,771)
------------
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from the sale of organization shares 500
Proceeds from loan by organizers 85,000
------------
NET CASH PROVIDED BY FINANCING ACTIVITIES 85,500
------------
NET INCREASE IN CASH AND CASH EQUIVALENTS 26,322
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD --
------------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 26,322
============
</TABLE>
See accompanying notes to financial statements.
F-5
<PAGE> 44
ROCKDALE NATIONAL BANCSHARES, INC.
(A DEVELOPMENT STAGE CORPORATION)
NOTES TO FINANCIAL STATEMENTS
================================================================================
(1) ORGANIZATION
Rockdale National Bancshares, Inc. (the "Company") was formed to
establish Rockdale 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). Upon receipt of preliminary approval from the OCC, the
Company will file an application with the Board of Governors of the
Federal Reserve System and the Georgia Department of Banking and Finance
to become a bank holding company. Provided the necessary capital is raised
and the necessary regulatory approvals are received, it is expected that
operations will commence in the fourth quarter of 1997.
The accounting and reporting policies of the Company conform to
generally accepted accounting principles and to general practices within
the banking industry.
The Company plans to raise a minimum of $6,100,000 through an offering
of its $1.00 par value common stock. The organizers and directors expect
to subscribe for a minimum of approximately $1,395,000 of the Company's
stock.
For purposes of reporting cash flows, cash and cash equivalents include
cash on hand and amounts due from bank.
(2) LIQUIDITY AND GOING CONCERN CONSIDERATIONS
The Company incurred a net loss of $8,407 for the period from inception
(February 13, 1997) to February 28, 1997. Operations through February 28,
1997, relate primarily to expenditures for incorporating and organizing
the Company.
At February 28, 1997, the Company has been totally funded by a loan
from the organizers.The current organizers plan to establish a line of
credit to pay back organizers and provide additional operating funds until
permanent funding is obtained. 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. However, 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 operations, the company is
currently anticipating offering a minimum of 610,000 and a maximum of
800,000 shares of its common stock, $1.00 par value, at $10.00 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.
F-6
<PAGE> 45
ROCKDALE NATIONAL BANCSHARES, INC.
(A DEVELOPMENT STAGE CORPORATION)
NOTES TO FINANCIAL STATEMENTS
================================================================================
(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.
The Company entered into an employment agreement with its President and
Chief Executive Officer. The agreement continues for a period ending on
February 21, 2000, and provides for an annual base salary of $90,000 per
year until the Bank opens for business and $100,000 per year after
opening, in addition to a $700 per month automobile allowance and such
other benefits as health, hospitalization, disability and term life
insurance generally made available to other senior executives of the
Company and the Bank.
The Company has entered into an option agreement dated February 4,
1997, to acquire a 2.50 acre tract of land located at the intersection of
1000 Georgia Highway 138 and Miller's Chapel Road for a total purchase
price of $424,160 from a party unaffiliated with the organizers or the
Company. The Company intends to construct its headquarters building on
this property. The building will contain approximately 7,500 square feet
of finished space at a cost of approximately $937,500. The sum of $5,000
has been paid as earnest money, and the contract is contingent upon
receiving Bank Charter approval from the required regulatory agencies.
Until construction of the Bank building is complete, the Company will
temporarily operate out of offices in a modular bank facility also located
at the intersection of 1000 Georgia Highway 138 and Miller's Chapel Road.
The Company will lease the facility pursuant to a month-to-month lease at
the monthly rental of $3,300 after spending approximately $20,000 for site
preparation and facility set-up work. It is estimated that the Company and
the Bank will operate out of this temporary facility for approximately
twelve months until construction of the headquarters building has been
completed.
In addition to its headquarters facility, the Company's banking
subsidiary plans to open a small branch office facility located at 1600
Georgia Highway 20, Conyers, Georgia. This branch facility will be
acquired for a purchase price of approximately $385,000. It is anticipated
that the facility will require approximately $150,000 in improvements
prior to its opening. The sum of $5,000 has been paid as earnest money,
and the contract is contingent upon receiving Bank Charter approval from
the required regulatory agencies.
F-7
<PAGE> 46
APPENDIX "A"
Rockdale National Bancshares, Inc.
P.O. Box 82030
Conyers, Georgia 30208
March 28, 1997
The Bankers Bank
3715 Northside Parkway
300 North Creek
Suite 800
Atlanta, Georgia 30327
Attention: William R. Burkett
Gentlemen:
Rockdale National Bancshares, Inc., a Georgia corporation (the
"Company"), proposes to offer for sale up to 800,000 shares of its $1.00 par
value common stock (the "Common Stock"), which shares shall be registered under
the Securities Act of 1933, as amended, by the filing of a Registration
Statement on Form SB-2 with the Securities and Exchange Commission. Shares
will be offered at a price of $10.00 each. The minimum subscription per
subscriber is 100 shares.
(1) The Company hereby appoints and designates you as Escrow Agent
for the purposes set forth herein. By your signature hereto, you acknowledge
and accept said appointment and designation. The Company understands that you,
by accepting said appointment and designation, in no way endorse the merits of
the offering of the shares described herein. The Company agrees to notify any
person acting on its behalf that your position as Escrow Agent does not
constitute such an endorsement, and to prohibit said persons from the use of
your name as an endorser of such offering. The Company further agrees to allow
you to review any sales literature in which your name appears and which is used
in connection with such offering.
(2) The Company shall deliver all payments received in purchase of
the shares (the "Subscription Funds") to you in the form in which they are
received by noon of the next business day after their receipt by the Company,
and the Company shall deliver to you within five (5) calendar days copies of
written acceptances of the Company for shares in the Company for which the
Subscription Funds represent payment. Upon receipt of such written acceptance
by the Company, the Escrow Agent shall deposit such funds into the Escrow
Account. The Company shall also deliver to you copies of completed
Subscription Agreements for each subscriber, along with such subscriber's
name, address, number of shares subscribed and social security or taxpayer
identification number.
(3) Subscription Funds shall be held and disbursed by you in
accordance with the terms of this Agreement.
A-1
<PAGE> 47
The Bankers Bank
March 28, 1997
(4) In the event any Subscription Funds are dishonored for payment
for any reason, you agree to orally notify the Company immediately thereof and
to confirm same in writing and to return the dishonored Subscription Funds to
the Company in the form in which they were delivered to you.
(5) Should the Company elect to accept a subscription for less than
the number of shares shown in the purchaser's Subscription Agreement, by
indicating such lesser number of shares on the written acceptance of the
Company transmitted to you, you shall deposit such payment in the escrow
account and then remit within ten (10) calendar days after such deposit to such
subscriber at the address shown in his Subscription Agreement that amount of
his Subscription Funds in excess of the amount which constitutes full payment
for the number of subscribed shares accepted by the Company as shown in the
Company's written acceptance, without interest or diminution. Said address
shall be provided by the Company to you as requested.
(6) (a) As used herein, the term "Total Receipts" shall mean the
sum of all Subscription Funds delivered to you pursuant to Paragraph (3)
hereof, less all Subscription Funds returned pursuant to Paragraphs (4) and (5)
hereof.
(b) As used herein, the term "Expiration Date" shall mean the
date which marks the 90th day after the date of the Prospectus; provided,
however, in the event that you are given oral notification, followed in
writing, by the Company that it has elected to extend the offering for an
additional period of 90 days after the initial period, then the Expiration Date
shall mean the date which marks the 180th day after the date of the Prospectus;
provided further, in the event that you are given oral notification, followed
in writing, by the Company that it has elected to extend the offering for an
additional period of 90 days after the first extension, then the Expiration
Date shall mean the date which marks the 270th day after the date of the
Prospectus; provided further, in the event you are given oral notification,
followed in writing, by the Company that it has elected to extend the offering
for an additional period of 90 days after the second extension, then the
Expiration Date shall mean the date which marks the 360th day after the date of
the Prospectus..
(c) If Total Receipts equal $6,100,000 on or before the
Expiration Date, you shall, on the Closing Date, no later than 10:00 A.M.,
Eastern Daylight Time, upon receipt of 24-hour written instructions from the
Company, remit all amounts representing Subscription Funds, plus any profits
or earnings thereon after deducting your fees, if any, held by you pursuant
hereto in accordance with such instructions.
(7) If (i) Total Receipts are less than $6,100,000 as of 5:00
o'clock P.M., Eastern Daylight Time on the Expiration Date, or (ii) the
offering is canceled by the Company at any time prior to the Expiration Date,
then you shall promptly remit to each subscriber at the address set forth in
his Subscription Agreement an amount equal to the amount of his Subscription
Funds thereunder, adjusted for his allocated share of any net profits earned
on the investment of the Subscription Funds as set forth in Paragraph 8, below.
The Company hereby agrees to provide to you in writing the specific
allocations of net profits attributable to each subscriber hereunder.
(8) Pending disposition of the Subscription Funds under this
Agreement, you are authorized, upon oral instructions, followed in writing,
given by William L. Daniel to invest Subscription Funds in Federal Funds, in
short- term direct obligations of the United States government, in short-term
FDIC or FSLIC insured certificates of deposit, and/or in Fidelity Institutional
U.S. Treasury Cash Portfolio, for short-term obligations of the United States
government, but in any case with maturities of 90 days or less. For purposes
of Paragraph 7 above, the specific allocations of net profits attributable to
each subscriber shall be determined by the Company as follows; each
subscriber's allocated share of earnings on the Subscription Funds, after
A-2
<PAGE> 48
The Bankers Bank
March 28, 1997
deducting your fees, if any, shall be that fraction (i) the numerator of which
is the dollar amount of such subscriber's accepted subscription multiplied by
the number of days between the date of acceptance of the purchaser's
subscription and the date of the offering's termination, inclusive (the
subscriber's "Time Subscription Factor"), and (ii) the denominator of which is
the aggregate Time Subscription Factors of all purchasers depositing
Subscription Funds in the escrow account.
(9) Your obligations as Escrow Agent hereunder shall terminate upon
your transferring all funds you hold hereunder pursuant to the terms of
Paragraphs (6) or (7) herein, as applicable.
(10) As used herein, "Closing Date" shall mean the third business day
following the earlier of (i) the date of receipt by you of Total Receipts
aggregating $6,100,000 and executed Subscription Agreements and copies of
written acceptances of the Company in connection therewith.
(11) You shall be protected in acting upon any written notice,
request, waiver, consent, certificate, receipt, authorization, or other paper
or document which you believe to be genuine and what it purports to be.
(12) You shall not be liable for anything which you may do or refrain
from doing in connection with this Escrow Agreement, except your own gross
negligence or willful misconduct.
(13) You may confer with legal counsel in the event of any dispute or
question as to the construction of any of the provisions hereof, or your
duties hereunder, and you shall incur no liability and you shall be fully
protected in acting in accordance with the opinions and instructions of such
counsel. Any and all expenses and legal fees in this regard are payable from
the Subscription Funds unless paid by the Company.
(14) In the event of any disagreement between the Company and any
other person resulting in adverse claims and demands being made in connection
with any Subscription Funds involved herein or affected hereby, you shall be
entitled to refuse to comply with any such claims or demands as long as such
disagreement may continue, and in so refusing, shall make no delivery or other
disposition of any Subscription Funds then held by you under this Agreement,
and in so doing you shall be entitled to continue to refrain from acting until
(a) the right of adverse claimants shall have been finally settled by binding
arbitration or finally adjudicated in a court assuming and having jurisdiction
of the Subscription Funds involved herein or affected hereby or (b) all
differences shall have been adjusted by agreement and you shall have been
notified in writing of such agreement signed by the parties thereto. In the
event of such disagreement, you may, but need not, tender into the registry or
custody of any court of competent jurisdiction all money or property in your
hands under the terms of this Agreement, together with such legal proceedings
as you deem appropriate and thereupon to be discharged from all further duties
under this Escrow Agreement. The filing of any such legal proceeding shall not
deprive you of your compensation earned prior to such filing. You shall have
no obligation to take any legal action in connection with this Agreement or
towards its enforcement, or to appear in, prosecute or defend any action or
legal proceeding which would or might involve you in any cost, expense, loss or
liability unless indemnification shall be furnished.
(15) You may resign for any reason, upon thirty (30) days written
notice to the Company. Upon the expiration of such thirty (30) day notice
period, you may deliver all Subscription Funds and copies of Subscription
Agreements in your possession under this Escrow Agreement to any successor
Escrow Agent appointed by the Company, or if no successor Escrow Agent has been
appointed, to any court of competent jurisdiction. Upon either such delivery,
you shall be released from any and all liability under this Escrow Agreement.
A termination under this paragraph shall in no way change the terms of
paragraphs 15 and 16
A-3
<PAGE> 49
The Bankers Bank
March 28, 1997
affecting reimbursement of expenses, indemnity and fees. You shall have the
right to deduct from the Subscription Funds transferred to any successor Escrow
Agent any outstanding and unpaid expenses or fees.
(16) You agree to charge your customary and normal fee for your
services hereunder. A copy of the current schedule is attached hereto. The
fee schedule may be modified from time to time. The acceptance fee and
expenses shall be paid in advance or at closing by the Company. Any subsequent
fees and expenses will be paid by the Company upon receipt of invoice.
(17) All notices and communications hereunder shall be in writing and
shall be deemed to be duly given if sent by registered or certified mail,
return receipt requested, to the respective addresses set forth herein. You
shall not be charged with knowledge of any fact, including but not limited to
performance or non-performance of any condition, unless you have actually
received written notice thereof from the Company or its authorized
representative clearly referring to this Escrow Agreement.
(18) The rights created by this Escrow Agreement shall inure to the
benefit of, and the obligations created hereby shall be binding upon the
successors and assigns of you and the parties hereto. Notwithstanding the
foregoing, the Company may not assign its rights hereunder without your prior
written consent.
(19) This Escrow Agreement shall be construed and enforced according
to the laws of the State of Georgia.
(20) This Escrow Agreement shall terminate and you shall be
discharged of all responsibility hereunder at such time as you shall have
completed your duties hereunder.
(21) This Escrow Agreement may be executed in several
counterparts, which taken together shall constitute a single document.
(22) This Escrow Agreement constitutes the entire understanding and
agreement of the parties hereto with respect to the transactions described
herein and supersedes all prior agreements or understandings, written or oral,
between the parties with respect thereto. Further, this Escrow Agreement may
only be amended by a written amendment signed by the parties hereto.
(23) If any provision of this Escrow Agreement is declared by a court
of competent jurisdiction to be invalid, void or unenforceable, the remaining
provisions shall nevertheless continue in full force and effect without being
impaired or invalidated in any way.
(24) The Company shall provide you with its Employer Identification
Number as assigned by the Internal Revenue Service. Additionally, the Company
shall complete and return to you any and all tax forms or reports required to
be maintained or obtained by you. In the event that Subscription Funds are
returned to subscribers pursuant to paragraph 7 hereof, you shall, based upon
the information available to you, file with the Internal Revenue Service and
send to each subscriber a Form 1099-INT with respect to contributions of
interest to subscribers. All interest or other income earned under this Escrow
Agreement which is payable to the Company pursuant to paragraph 6 hereof shall
be allocated and paid as directed by the Company and reported to the Internal
Revenue Service as having been so allocated and paid.
A-4
<PAGE> 50
The Bankers Bank
March 28, 1997
(25) Your signature hereto is your consent that a signed copy hereof
may be filed with the various regulatory authorities of the State of Georgia
and with any Federal Government agencies or regulatory authorities.
Please indicate your acceptance of this Agreement by executing a copy
of this letter and returning it to the undersigned.
Very truly yours,
ROCKDALE NATIONAL BANCSHARES, INC.
By: /s/ William L. Daniel
-------------------------------------
William L. Daniel
President and Chief Executive Officer
Attest:
/s/ Julia W. Morgan
- -----------------------------------
Secretary
(CORPORATE SEAL)
ACCEPTED AND AGREED:
THE BANKERS BANK
By: /s/ William R. Burkett
-------------------------------------
William R. Burkett
Vice President
A-5
<PAGE> 51
THE BANKERS BANK
CURRENT FEE STRUCTURE FOR ACTING AS BANK ESCROW AGENT
1. $2,000 acceptance fee payable when the escrow account is broken for
maintaining Rockdale National Bancshares, Inc. Escrow Account.
2. $15.00 service charge accrued monthly and deducted from the Escrowed Funds
prior to release.
3. $20.00 fee per check if the escrow account has to be refunded due to a
failure to complete the subscription.
A-6
<PAGE> 52
APPENDIX "B"
ROCKDALE NATIONAL BANCSHARES, INC.
SUBSCRIPTION AGREEMENT
To: Rockdale National Bancshares, Inc.
P.O. Box 82030
Conyers, Georgia 30208
Gentlemen:
You have informed me that Rockdale National Bancshares, Inc., a
Georgia corporation (the "Company"), is offering 800,000 shares of its $1.00
par value common stock (the "Common Stock") at a price of $10.00 per share as
described in and offered pursuant to the Prospectus furnished to the
undersigned herewith (the "Prospectus"). In addition, you have informed me
that the minimum subscription is 100 shares.
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 "The Bankers
Bank, Escrow Agent for Rockdale National Bancshares, Inc." or any other
consideration satisfactory to the Company (the "Funds"), representing the
payment of $10.00 per share for the number of shares of the Common Stock
indicated below.
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 shall reject this
subscription, if at all, in writing within ten business days after receipt of
this subscription. 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. ACKNOWLEDGEMENTS. The undersigned hereby acknowledges that he has
received a copy of the Prospectus and agrees to be bound by the terms of this
Agreement and the Escrow Agreement.
4. REVOCATION. The undersigned agrees that once this Subscription
Agreement is accepted by the Company, it may not be withdrawn by him.
Therefore, until the earlier of the expiration of ten business days after
receipt by the Company of this Subscription Agreement or acceptance of this
Subscription Agreement by the Company, the undersigned may withdraw his or her
subscription and receive a full refund of the subscription price. The
undersigned agrees that, except as provided in this Section 4, he shall not
cancel, terminate or revoke this Subscription Agreement or any agreement of the
undersigned made hereunder and that this Subscription Agreement shall survive
the death or disability of the undersigned.
BY EXECUTING THIS SUBSCRIPTION AGREEMENT, THE SUBSCRIBER IS NOT
WAIVING ANY RIGHTS HE MAY HAVE UNDER FEDERAL SECURITIES LAWS, INCLUDING THE
SECURITIES ACT OF 1933 AND THE SECURITIES EXCHANGE ACT OF 1934.
B-1
<PAGE> 53
Please fill in the information requested below, make your check
payable to "The Bankers Bank, Escrow Agent for Rockdale National Bancshares,
Inc.," and mail Subscription Agreement, Stock Certificate Registration
Instructions and check to the attention of William L. Daniel, President,
Rockdale National Bancshares, Inc., P.O. Box 82030, Conyers, Georgia 30208.
- ------------------------------- -------------------------------------
No. of Shares Subscribed (Signature of Subscriber)
$
------------------------------ -------------------------------------
Funds Tendered ($______________ Name (Please Print or Type)
per share subscribed)
Date:
--------------------------------
Phone Number:
(Home)
-------------------------------
(Office)
-----------------------------
Residence Address:
-------------------------------------
-------------------------------------
-------------------------------------
City, State and Zip Code
-------------------------------------
Social Security Number or other
Taxpayer Identification Number
B-2
<PAGE> 54
STOCK CERTIFICATE REGISTRATION INSTRUCTIONS
- --------------------------------------------------------------------------------
Name
- --------------------------------------------------------------------------------
Additional Name if Tenant in Common or Joint Tenant
Mailing Address:
----------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Social Security Number or other Taxpayer Identification Number
-----------------
Number of Shares to be registered in above name(s):
----------------------------
Legal form of ownership:
<TABLE>
<S> <C>
Individual Joint Tenants with Rights of Survivorship
- --- ---
Tenants in Common Uniform Gift to Minors
- --- ---
Other
- ---- -------------------------
</TABLE>
INFORMATION AS TO BANKING INTERESTS
1. As a prospective stockholder I would be interested in the following
services checked below:
<TABLE>
<CAPTION>
PERSONAL BUSINESS
<S> <C> <C> <C>
(a) Checking Account ___ ___
(b) Savings Account ___ ___
(c) Certificates of Deposit ___ ___
(d) Individual Retirement Accounts ___ ___
(e) Checking Account Overdraft Protection ___ ___
(f) Consumer Loans (Auto, etc.) ___ ___
(g) Commercial Loans ___ ___
(h) Equity Line of Credit ___ ___
(i) Mortgage Loans ___ ___
(j) Revolving Personal Credit Line ___ ___
(k) Safe Deposit Box ___ ___
(l) Automatic Teller Machines (ATM's) ___ ___
</TABLE>
2. I would like our new bank to provide the following additional services:
(a)
(b)
B-3
<PAGE> 55
FORM OF ACCEPTANCE
Rockdale National Bancshares, Inc.
P.O. Box 82030
Conyers, Georgia 30208
To:
Dear Subscriber:
Rockdale National Bancshares, Inc. (the "Company") acknowledges
receipt of your subscription for _________________ shares of its $1.00 par
value Common Stock and your check for $__________.
The Company hereby accepts your subscription for the purchase of _____
shares of its Common Stock, at $10.00 per share, for an aggregate of
$__________, effective as of the date of this letter.
YOUR STOCK CERTIFICATE(S) REPRESENTING SHARES OF COMMON STOCK DULY
AUTHORIZED AND FULLY PAID WILL BE ISSUED TO YOU AS SOON AS PRACTICABLE AFTER
ALL SUBSCRIPTION FUNDS ARE RELEASED TO THE COMPANY FROM THE SUBSCRIPTION ESCROW
ACCOUNT, ALL AS DESCRIBED IN THE SUBSCRIPTION AGREEMENT EXECUTED BY YOU AND IN
THE PROSPECTUS FURNISHED TO YOU. IN THE EVENT THAT (I) THE OFFERING IS
CANCELED, OR (II) THE MINIMUM NUMBER OF SUBSCRIPTIONS (610,000 SHARES) IS NOT
OBTAINED, OR (III) THE COMPANY SHALL NOT HAVE RECEIVED APPROVAL FROM THE
FEDERAL RESERVE BOARD AND THE GEORGIA BANKING DEPARTMENT TO BECOME A BANK
HOLDING COMPANY, OR (IV) THE BANK SHALL NOT HAVE RECEIVED PRELIMINARY CHARTER
APPROVAL FROM THE COMPTROLLER AND APPROVAL FOR DEPOSIT INSURANCE FROM THE
FEDERAL DEPOSIT INSURANCE CORPORATION, YOUR SUBSCRIPTION FUNDS WILL BE RETURNED
TO YOU, ADJUSTED FOR NET PROFITS FROM THE INVESTMENT OF SUCH FUNDS, IF ANY, AS
DESCRIBED IN THE PROSPECTUS.
IF THIS ACCEPTANCE IS FOR A LESSER NUMBER OF SHARES THAN THAT NUMBER
SUBSCRIBED BY YOU AS INDICATED IN YOUR SUBSCRIPTION AGREEMENT, YOUR PAYMENT FOR
SHARES OF COMMON STOCK IN EXCESS OF THE NUMBER OF SHARES ACCEPTED HEREBY WILL
BE REFUNDED TO YOU BY MAIL, WITHOUT INTEREST, WITHIN TEN (10) DAYS OF THE DATE
HEREOF.
VERY TRULY YOURS,
ROCKDALE NATIONAL BANCSHARES, INC.
By:
-------------------------------------
WILLIAM L. DANIEL
PRESIDENT and CHIEF EXECUTIVE OFFICER
B-4
<PAGE> 56
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 24. Indemnification of Directors and Officers.
As provided under Georgia law, the Company's Articles of
Incorporation provide that a director shall not be personally liable to the
Company or its stockholders for monetary damages for breach of duty of care or
any other duty owed to the Company as a director, except that such provision
shall not eliminate or limit the liability of a director (a) for any
appropriation, in violation of his duties, of any business opportunity of the
Company, (b) for acts or omissions which involve intentional misconduct or a
knowing violation of law, (c) for unlawful corporate distributions, or (d) for
any transaction from which the director received an improper personal benefit.
Article VI of the Company's Bylaws provides that the Company shall
indemnify a director who has been successful in the defense of any proceeding
to which he was a party or in defense of any claim, issue or matter therein
because he is or was a director of the Company, against reasonable expenses
incurred by him in connection with such defense.
The Company's Bylaws also provide that the Company is required to
indemnify any director, officer, employee or agent made a party to a proceeding
because he is or was a director, employee or agent against liability incurred
in the proceeding if he acted in a manner he believed in good faith or to be in
or not opposed to the best interests of the Company and, in the case of any
criminal proceeding, he had no reasonable cause to believe his conduct was
unlawful. Determination concerning whether or not the applicable standard of
conduct has been met can be made by (a) a disinterested majority of the Board
of Directors, (b) a majority of a committee of disinterested directors, (c)
independent legal counsel, or (d) an affirmative vote of a majority of shares
held by disinterested stockholders. No indemnification may be made to or on
behalf of a director, officer, employee or agent (i) in connection with a
proceeding by or in the right of the Company in which such person was adjudged
liable to the Company or (ii) in connection with any other proceeding in which
such person was adjudged liable on the basis that personal benefit was
improperly received by him.
The Company may, if authorized by its stockholders by a majority of
votes which would be entitled to be cast in a vote to amend the Company's
Articles of Incorporation, indemnify or obligate itself to indemnify a
director, officer, employee or agent made a party to a proceeding, including a
proceeding brought by or in the right of the Company.
Item 25. Other Expenses of Issuance and Distribution.
The following table sets forth all expenses expected to be incurred
in connection with the issuance and distribution of the securities being
registered, other than the underwriting discounts and commissions. All of the
amounts shown are estimated except for the registration fees of the Securities
and Exchange Commission.
<TABLE>
<S> <C>
SEC Registration Fee . . . . . . . . . . . . . . . . . . $ 2,424
Blue Sky Fees and Expenses . . . . . . . . . . . . . . . $ 576
Printing and Engraving Expenses . . . . . . . . . . . . . $ 3,000
Legal Fees and Expenses . . . . . . . . . . . . . . . . . $ 16,000
Accounting Fees and Expenses . . . . . . . . . . . . . . $ 5,000
Advertising . . . . . . . . . . . . . . . . . . . . . . . $ 3,500
Mail and Disbtribution . . . . . . . . . . . . . . . . . $ 5,000
Entertainment . . . . . . . . . . . . . . . . . . . . . . $ 5,000
Miscellaneous . . . . . . . . . . . . . . . . . . . . . . $ 1,000
----------
Total . . . . . . . . . . . . . . . . . . . . . $ 41,500
==========
</TABLE>
II-1
<PAGE> 57
Item 26. Recent Sales of Unregistered Securities.
Not applicable.
Item 27. Exhibits and Financial Statement Schedules.
The following exhibits are filed as part of this Registration
Statement:
<TABLE>
<CAPTION>
Exhibit
Number Description of Exhibit
------ --------------------------------------------------------------------------------------
<S> <C> <C>
3.1 - Articles of Incorporation of the Company.
3.2 - Articles of Incorporation of the Company, as amended.
3.3 - Amended and Restated Articles of Incorporation of the Company.
3.4 - Bylaws of the Company.
*4.1 - Specimen Common Stock Certificate.
*5.1 - Opinion of Smith, Gambrell & Russell, LLP.
10.1 - Employment Agreement dated February 21, 1997 between the Company and William L. Daniel.
10.2 - Option Agreement together with Contract for Sale of Property dated February 4, 1997 by
and between the Company and Fred Eugene Smith for the property located at the
Intersection of Highway 138 and Miller's Chapel Road, Conyers, Georgia.
10.3 - Option Agreement together with Purchase and Sale Agreement dated January 14, 1997 by and
between the Company and Colony Properties for the property located at 1600 Highway 20
North, Conyers, Georgia.
*23.1 - Consent of Smith, Gambrell & Russell, LLP (contained in their opinion at Exhibit 5.1).
23.2 - Consent of Bricker & Melton, P.A.
24 - Power of Attorney (included in original signature page to this Registration Statement).
</TABLE>
- -----------------------
* To be filed by amendment.
II-2
<PAGE> 58
Item 28. Undertakings.
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which it offers or sells
securities, a post-effective amendment to this Registration
Statement to:
(i) Include any prospectus required by section 10(a)(3) of
the Securities Act;
(ii) Reflect in the prospectus any facts or events which,
individually or together, represent a fundamental
change in the information in the registration
statement; and
(iii) Include any additional or changed material information
on the plan of distribution.
(2) For determining liability under the Securities Act, treat
each post-effective amendment as a new registration statement
of the securities offered, and the offering of the securities
at that time to be the initial bona fide offering.
(3) File a post-effective amendment to remove from registration
any of the securities that remain unsold at the end of the
offering.
(e) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 (the "Act") may be permitted to directors, officers and
controlling persons of the Registrant pursuant to the foregoing provisions, or
otherwise, the Registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public
policy as expressed in the Act and is, therefore, unenforceable.
II-3
<PAGE> 59
SIGNATURES
In accordance with the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets
all the requirements of filing on Form SB-2 and has authorized this
Registration Statement to be signed on its behalf by the undersigned, in the
City of Conyers, State of Georgia, on the 25th day of March, 1997.
ROCKDALE NATIONAL BANCSHARES, INC.
By: /s/ William L. Daniel
----------------------------------------
William L. Daniel
President and Chief Executive Officer
In accordance with the requirements of the Securities Act of 1933, this
Registration Statement was signed by the following persons in the capacities
and on the dates stated:
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Michael P. Jones Chairman and Director March 25, 1997
- ----------------------
Michael P. Jones
/s/ William L. Daniel President and Chief Executive Officer March 25, 1997
- ----------------------- (Principal Executive Financial
William L. Daniel and Accounting Officer) and Director
/s/ C. Dean Alford Director March 25, 1997
- --------------------
C. Dean Alford
/s/ Hazel E. Durden Director March 25, 1997
- ---------------------
Hazel E. Durden
/s/ John A. Fountain, M.D. Director March 25, 1997
- ----------------------------
John A. Fountain, M.D.
/s/ Julia W. Morgan Secretary and Director March 25, 1997
- ---------------------
Julia W. Morgan
/s/ R. Flynn Nance D.V.M. Director March 25, 1997
- ---------------------------
R. Flynn Nance, D.V.M.
/s/ Michael R. Potts Director March 25, 1997
- ----------------------
Michael R. Potts
/s/ Arthur J. Torsiglieri, Jr., M.D. Director March 25, 1997
- --------------------------------------
Arthur J. Torsiglieri, Jr., M.D.
*By: /s/ William L. Daniel
-----------------------
William L. Daniel attorney-in-fact
pursuant to powers of attorney
contained in the original signature
page of this Registration Statement
</TABLE>
<PAGE> 60
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit
Number Description of Exhibit
------ --------------------------------------------------------------------------------------
<S> <C> <C>
3.1 - Articles of Incorporation of the Company.
3.2 - Articles of Incorporation of the Company, as amended.
3.3 - Amended and Restated Articles of Incorporation of the Company.
3.4 - Bylaws of the Company.
10.1 - Employment Agreement dated February 21, 1997 between the Company and William L. Daniel.
10.2 - Option Agreement together with Contract for Sale of Property dated February 4, 1997 by
and between the Company and Fred Eugene Smith for the property located at the
Intersection of Highway 138 and Miller's Chapel Road, Conyers, Georgia.
10.3 - Option Agreement together with Purchase and Sale Agreement dated January 14, 1997 by and
between the Company and Colony Properties for the property located at 1600 Highway 20
North, Conyers, Georgia.
23.2 - Consent of Bricker & Melton, P.A.
</TABLE>
<PAGE> 1
EXHIBIT 3.1
ARTICLES OF INCORPORATION
OF
ROCKDALE GROUP, INC.
I.
The name of the Corporation is Rockdale Group, Inc.
II.
The authorized capital stock of the Corporation shall consist of
10,000 shares of voting common stock.
III.
The street address of the initial registered office of the Corporation
is Suite 1800, East Tower, Atlanta Financial Center, 3343 Peachtree Road, N.E.,
Atlanta, Georgia 30326, located in Fulton County. The initial registered
agent of the Corporation at such office is Robert C. Schwartz.
IV.
The mailing address of the initial principal office of the Corporation
is Suite 1800, East Tower, Atlanta Financial Center, 3343 Peachtree Road, N.E.,
Atlanta, Georgia 30326.
V.
The name and address of the Incorporator of the Corporation are:
<TABLE>
<CAPTION>
NAME ADDRESS
---- -------
<S> <C>
Robert C. Schwartz Suite 1800, East Tower
Atlanta Financial Center
3343 Peachtree Road, N.E.
Atlanta, Georgia 30326
</TABLE>
No director of the Corporation shall be personally liable to the
Corporation or its shareholders for monetary damages for breach of duty of care
or other duty as a director; provided, however, that
1
<PAGE> 2
to the extent required by applicable law, this Article 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
derived an improper personal benefit. If applicable law is amended to
authorize corporate action further eliminating or limiting the liability of
directors, then the liability of each director of the Corporation shall be
eliminated or limited to the fullest extent permitted by applicable law, as
amended. Neither the amendment or repeal of this Article, nor the adoption of
any provision of these Articles of Incorporation inconsistent with this
Article, shall eliminate or reduce the effect of this Article in respect of any
acts or omissions occurring prior to such amendment, repeal or adoption of an
inconsistent provision.
VI.
In discharging the duties of their respective positions and in
determining what is believed to be in the best interests of the Corporation,
the board of directors, committees of the board of directors, and individual
directors, in addition to considering the effects of any action on the
Corporation or its shareholders, may 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; provided, however, that this Article shall be deemed solely to grant
discretionary authority to the directors and shall not be deemed to provide to
any constituency any right to be considered.
2
<PAGE> 3
IN WITNESS WHEREOF, the undersigned has executed these Articles of
Incorporation on February 13, 1997.
/s/ Robert C. Schwartz
----------------------------------------
Incorporator
3
<PAGE> 1
EXHIBIT 3.2
ARTICLES OF AMENDMENT
OF
ROCKDALE GROUP, INC.
1.
The name of the Corporation is Rockdale Group, Inc.
2.
The Articles of Incorporation of the Corporation shall be amended by
deleting Article 1 thereof in its entirety and substituting the following in
lieu of Article 1:
"1.
The name of the Corporation is Rockdale National Bancshares, Inc."
3.
The amendment set forth in Article 2 of these Articles of Amendment was
adopted on March 4, 1997.
4.
The amendment was adopted by action of the Corporation's Board of
Directors, and no action by the Corporation's shareholders was required by the
Corporation's Articles of Incorporation or By-Laws, or by the Georgia Business
Corporation Code, in order to adopt the amendment.
IN WITNESS WHEREOF, the Corporation has caused these Articles of
Amendment to be executed by William L. Daniel, President of the Corporation, on
this 4th day of March, 1997.
ROCKDALE GROUP, INC.
By: /s/ William L. Daniel
------------------------------------
William L. Daniel
President
<PAGE> 1
EXHIBIT 3.3
AMENDED AND RESTATED ARTICLES OF INCORPORATION
OF
ROCKDALE NATIONAL BANCSHARES, INC.
1.
The name of the Corporation is Rockdale National Bancshares, Inc.
2.
The authorized capital stock of the Corporation shall consist of
10,000,000 shares of voting common stock, $1.00 par value.
3.
The street address of the initial registered office of the Corporation
is Suite 1800, East Tower, Atlanta Financial Center, 3343 Peachtree Road, N.E.,
Atlanta, Georgia 30326, located in Fulton County. The initial registered
agent of the Corporation at such office is Robert C. Schwartz.
4.
The mailing address of the initial principal office of the Corporation
is Suite 1800, East Tower, Atlanta Financial Center, 3343 Peachtree Road, N.E.,
Atlanta, Georgia 30326.
5.
A. The number of directors constituting the Board of Directors of
the Corporation shall consist of not less than three (3) nor more than
twenty-four (24) persons, the exact number of directors to be determined from
time to time either by the shareholders or the Board of Directors.
B. The directors shall be divided into three classes, designated
Class I, Class II and Class III. Each class shall consist, as nearly as may be
possible, of one-third of the total number of directors constituting the entire
Board of Directors. The term of the Corporation's initial Class I directors
shall expire at the Corporation's first annual meeting of shareholders; the
term of the Corporation's initial Class II directors shall expire at the
Corporation's second annual meeting of shareholders; and the term of the
Corporation's initial Class III directors shall expire at the Corporation's
third annual meeting of shareholders.
At each annual meeting of the shareholders, successors to the class of
directors whose term expires at the annual meeting shall be elected for a
three-year term. If the number of directors is changed, any increase or
decrease shall be apportioned among the classes so as to maintain the number of
directors in each class as nearly equal as possible, and any additional
director of any class
1
<PAGE> 2
elected to fill a vacancy resulting from an increase in such class shall hold
office for a term that shall coincide with the remaining term of that class,
but in no case will a decrease in the number of directors shorten the term of
any incumbent director. A director shall hold office until the annual meeting
for the year in which his term expires and until his successor shall be elected
and shall qualify, subject, however, to prior death, resignation, retirement,
disqualification or removal from office. Except in the case of removal from
office, any vacancy on the Board of Directors shall be filled by a majority of
the directors then in office. Any director elected to fill a vacancy not
resulting from an increase in the number of directors shall have the same
remaining term as that of his predecessor.
Any director may be removed, with or without cause, at any regular or
special meeting of shareholders called for that purpose, and his position
filled by another person nominated and elected for that purpose, by the holders
of at least seventy-five percent (75%) of the outstanding shares of each class
of stock of the Corporation entitled to vote in elections of directors.
The number of directors constituting the initial Board of Directors
shall be nine (9).
C. No amendment to these Articles of Incorporation shall amend,
alter, change or repeal any of the provisions of this Article 5, unless such
amendment, in addition to receiving any shareholder vote or consent required by
the laws of the State of Georgia in effect at the time, shall receive the
affirmative vote or consent of the holders of seventy-five percent (75%) of the
outstanding shares of each class of stock of the Corporation entitled to vote
in elections of directors.
6.
The name and address of the Incorporator of the Corporation is:
<TABLE>
<CAPTION>
NAME ADDRESS
---- -------
<S> <C>
Robert C. Schwartz Suite 1800, East Tower
Atlanta Financial Center
3343 Peachtree Road, N.E.
Atlanta, Georgia 30326
</TABLE>
7.
A. In addition to any approval of the Board of Directors or any
shareholder vote or consent required by the laws of the State of Georgia or any
other provision of these Articles of Incorporation or otherwise, the
affirmative vote or consent of the holders of not less than two-thirds ( 2/3)
of the shares of each class of stock of the Corporation entitled to vote in
elections of directors shall be required to authorize, adopt or approve a
Covered Transaction; however, the provisions of this Article 7 shall not apply
to any Covered Transaction referred to in this Article 7 with any Interested
Person if the Covered Transaction is approved by three-fourths ( 3/4) of the
entire membership of the Board of Directors of the Corporation, in which event
the affirmative vote of not less than a majority of the holders of each class
of stock of the Corporation entitled to vote in elections of directors shall be
required.
2
<PAGE> 3
B. For the purposes of this Article 7:
1. "Affiliate" and "associate" shall have the respective
meanings given those terms in Rule 12b-2 of the General
Rules and Regulations under the Securities Exchange Act
of 1934, as amended, as in effect on the date hereof.
2. A person shall be the "beneficial owner" and
"beneficially owns" shares of stock of the Corporation
(other than shares of the Corporation's stock held in
its treasury) (a) which such person and its affiliates
and associates beneficially own, directly or
indirectly, whether of record or not, (b) which such
person or any of its affiliates or associates has the
right to acquire, pursuant to any agreement upon the
exercise of conversion rights, warrants or options, or
otherwise, (c) which such person or any of its
affiliates or associates has the right to sell or vote
pursuant to any agreement, or (d) which are
beneficially owned, directly or indirectly, by any
other person with which such first mentioned person or
any of its affiliates or associates has any agreement,
arrangement or understanding for the purpose of
acquiring, holding, voting or disposing of securities
of the Corporation.
3. "Covered Transaction" is:
a. any merger or consolidation of the Corporation
or any subsidiary of the Corporation with or
into any Interested Person (regardless of the
identity of the surviving corporation);
b. any sale, lease or other disposition of all or
any substantial part (assets having an
aggregate fair market value of twenty-five
percent (25%) of the total assets of the
Corporation) of the assets of the Corporation
or any subsidiary of the Corporation to any
Interested Person for cash, real or personal
property, including securities, or any
combination thereof;
c. any issuance or delivery of securities of the
Corporation or a subsidiary of the Corporation
(which the beneficial owner shall have the
right to vote, or to vote upon exercise,
conversion or by contract) to an Interested
Person in consideration for or in exchange of
any securities or other property (including
cash); or
d. the liquidation of the Corporation.
4. "Interested Person" is any person which, as of the
record date for the determination of shareholders
entitled to notice of any Covered Transaction and to
vote thereon or consent thereto, or as of the date of
any such vote or consent, or immediately prior to the
consummation of any Covered Transaction, beneficially
owns, directly or indirectly, five percent (5%) or more
of the shares of stock of the Corporation entitled to
vote in elections of directors.
3
<PAGE> 4
5. "Person" is any individual, partnership, corporation or
other entity.
6. "Subsidiary of the Corporation" is any corporation of
which fifty percent (50%) or more of any class of stock
is beneficially owned, directly or indirectly, by the
Corporation.
No amendment to these Articles of Incorporation shall amend, alter,
change or repeal any of the provisions of this Article 7, unless such
amendment, in addition to receiving any shareholder vote or consent required by
the laws of the State of Georgia in effect at the time, shall receive the
affirmative vote or consent of the holders of seventy-five (75%) of the
outstanding shares of each class of stock of the Corporation entitled to vote
in elections of directors.
8.
A. In addition to any approval of the Board of Directors or any
shareholder vote or consent required by the laws of the State of Georgia or any
other provision of these Articles of Incorporation or otherwise, there shall be
required for the approval, adoption or authorization of a Business Combination
with an Interested Person the affirmative vote or consent of the holders of a
majority of the shares of each class of stock of the Corporation entitled to
vote in elections of directors considered separately for the purposes of this
Article 8, which are not beneficially owned, directly or indirectly, by such
Interested Person; provided, however, that said majority voting requirements
shall not be applicable if all of the conditions specified in subparagraphs
(1), (2) and (3) below are met:
1. The consideration to be received per share for each
class of stock in such Business Combination by holders
of the stock of the Corporation is payable in cash or
Acceptable Securities, or a combination of both, and
such consideration has a fair market value per share
with respect to each class of the Corporation's stock
of not less than either:
a. the highest price (including the highest per
share brokerage commissions, transfer tax and
soliciting dealers fees) paid by said
Interested Person in acquiring any of the
Corporation's stock of that class; or
b. a price per share obtained by multiplying the
aggregate earnings per share of stock of the
Corporation (appropriately adjusted for any
subdivision of shares, stock dividend or
combination of shares during the period) for
the four full consecutive fiscal quarters
immediately preceding the record date for
solicitation of votes or consents on such
Business Combination by the figure obtained by
dividing the highest per share price
(including the highest per share brokerage
commissions, transfer tax and soliciting
dealers fees) paid by such Interested Person
in acquiring any of the Corporation's stock by
the aggregate earnings per share of the
Corporation for the four full consecutive
fiscal quarters immediately preceding the time
when the Interested Person shall have become
the beneficial owner of five
4
<PAGE> 5
percent (5%) or more of the outstanding stock
of the Corporation entitled to vote in
elections of directors.
If any securities were issued by an Interested Person in exchange for
stock of the Corporation prior to the proposed Business Combination, the fair
market value of said securities at the time of issue shall be used in
determining the per share price paid for said stock.
2. After the Interested Person has become the beneficial
owner of five percent (5%) or more of the stock of the
Corporation entitled to vote in the election of
directors and prior to the consummation of such
Business Combination, there shall have been no
reduction in the rate of dividends payable on the
Corporation's stock which would result in a quarterly
dividend rate per share which is less than the average
quarterly dividend rate per share for the four full
consecutive fiscal quarters immediately preceding the
time when the Interested Person shall have become the
beneficial owner of said five percent (5%) or more of
the stock of the Corporation, unless such reduction in
the rate of dividends has been approved by
three-fourths (3/4) of the entire membership of the
Board of Directors of the Corporation. For the
purposes of this paragraph, "quarterly dividend rate
per share" for any quarterly dividend shall be equal to
the percentage said quarterly dividend per share bears
to the earnings per share for the four full fiscal
quarters immediately preceding the declaration of said
quarterly dividend.
3. The consideration to be received by shareholders who
are not Interested Persons shall be in cash or in the
same form as the Interested Person has previously paid
for shares of such class of stock; if the Interested
Person has paid for shares of any class of any stock
with varying forms of consideration, the form of
consideration for such class of stock shall be either
cash or the form used to acquire the largest number of
shares of such class of stock previously acquired by
it.
B. For the purposes of this Article 8:
1. "Acceptable Securities" shall mean (a) securities of
the same class or series, with the same rights, powers
and benefits and of the same denomination, term and
interest, or dividend, if any, as the securities issued
and delivered by the Interested Person in exchange for
the majority of the stock of the corporation acquired
by the Interested Person, or (b) the class of common
stock of the Interested Person which is beneficially
owned by most persons.
2. "Affiliate" and "associate" shall have the respective
meanings given those terms in Rule l2b-2 of the General
Rules and Regulations under the Securities Exchange Act
of 1934, as amended, as in effect on the date hereof.
3. A person shall be the "beneficial owner" and
"beneficially own" shares of stock of the Corporation
(other than shares of the Corporation's stock held in
its treasury) (a) which such person and its affiliates
or associates beneficially
5
<PAGE> 6
own, directly or indirectly, whether of record or not,
(b) which such person or any of its affiliates or
associates has the right to acquire, pursuant to any
agreement upon the exercise of conversion rights,
warrants, or options, or otherwise, (c) which such
person or any of its affiliates or associates has the
right to sell or vote pursuant to any agreement, or (d)
which are beneficially owned, directly or indirectly,
by any other person with which such first mentioned
person or any of its affiliates or associates has any
agreement, arrangement or understanding for the
purposes of acquiring, holding, voting or disposing of
securities of the Corporation.
4. "Business Combination" is:
a. any merger or consolidation of the Corporation
or any subsidiary of the Corporation with or
into any Interested Person (regardless of the
identity of the surviving corporation);
b. any sale, lease or other disposition of all or
any substantial part (assets having a fair
market value of twenty-five percent (25%) of
the total assets of the Corporation) of the
assets of the Corporation or any subsidiary of
the Corporation to any Interested Person for
cash, real or personal property, including
securities, or any combination thereof; or
c. any issuance or delivery of securities of the
Corporation or a subsidiary of the Corporation
(which the beneficial owner shall have the
right to vote, or to vote upon exercise,
conversion or by contract) to an Interested
Person in consideration of or in exchange for
any securities or other property (including
cash).
5. "Interested Person" is any person which, as of the
record date for the determination of shareholders
entitled to notice of any Business Combination and to
vote thereon or consent thereto, or as of the date of
any such vote or consent, immediately prior to the
consummation of any Business Combination, beneficially
owns, directly or indirectly, five percent (5%) or more
of the shares of stock of the Corporation entitled to
vote in elections of directors.
6. "Person" is an individual, partnership, corporation or
other entity.
7. "Subsidiary of the Corporation" is any corporation of
which fifty percent (50%) or more of any class of stock
is beneficially owned, directly or indirectly, by the
Corporation.
C. No amendment to these Articles of Incorporation shall amend,
alter, change or repeal any of the provisions of this Article 8, unless such
amendment, in addition to receiving any shareholder vote or consent required by
the laws of the State of Georgia in effect at the time, shall receive the
affirmative vote or consent of the holders of seventy-five percent (75%) of the
outstanding shares of each class of stock of the Corporation entitled to vote
in elections of directors.
6
<PAGE> 7
9.
No director of the Corporation shall be personally liable to the
Corporation or its shareholders for monetary damages for breach of duty of care
or other duty as a director; provided, however, that to the extent required by
applicable law, this Article 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 derived an improper
personal benefit. If applicable law is amended to authorize corporate action
further eliminating or limiting the liability of directors, then the liability
of each director of the Corporation shall be eliminated or limited to the
fullest extent permitted by applicable law, as amended. Neither the amendment
or repeal of this Article, nor the adoption of any provision of these Articles
of Incorporation inconsistent with this Article, shall eliminate or reduce the
effect of this Article in respect of any acts or omissions occurring prior to
such amendment, repeal or adoption of an inconsistent provision.
10.
In discharging the duties of their respective positions and in
determining what is believed to be in the best interests of the Corporation,
the board of directors, committees of the board of directors, and individual
directors, in addition to considering the effects of any action on the
Corporation or its shareholders, may 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; provided, however, that this Article shall be deemed solely to grant
discretionary authority to the directors and shall not be deemed to provide to
any constituency any right to be considered.
7
<PAGE> 8
IN WITNESS WHEREOF, the undersigned has executed these Amended and
Restated Articles of Incorporation on this 27th day of March, 1997.
/s/ William L. Daniel
-------------------------------------
William L. Daniel
President and Chief Executive Officer
8
<PAGE> 1
EXHIBIT 3.4
BYLAWS
OF
ROCKDALE NATIONAL BANCSHARES, INC.
<PAGE> 2
BYLAWS
OF
ROCKDALE NATIONAL BANCSHARES, INC.
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
ARTICLE I. DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE II. GENERAL PROVISIONS REGARDING NOTICES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 1. NOTICES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 2. WAIVER OF NOTICE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
ARTICLE III. SHAREHOLDERS' MEETINGS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Section 1. PLACE OF MEETING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Section 2. ANNUAL MEETING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Section 3. SPECIAL MEETINGS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Section 4. NOTICE TO SHAREHOLDERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Section 5. FIXING OF RECORD DATE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Section 6. QUORUM AND VOTING REQUIREMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Section 7. PROXIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Section 8. INFORMAL ACTIONS BY SHAREHOLDERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
ARTICLE IV. DIRECTORS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Section 1. GENERAL POWERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Section 2. NUMBER, TENURE, QUALIFICATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Section 3. VACANCIES, HOW FILLED . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Section 4. PLACE OF MEETING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Section 5. COMPENSATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Section 6. REGULAR MEETINGS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Section 7. SPECIAL MEETINGS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Section 8. GENERAL PROVISIONS REGARDING NOTICE AND WAIVER . . . . . . . . . . . . . . . . . . . . . . . . 8
Section 9. QUORUM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Section 10. MANNER OF ACTING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Section 11. COMMITTEES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Section 12. ACTION WITHOUT FORMAL MEETING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Section 13. CONFERENCE CALL MEETINGS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
ARTICLE V. OFFICERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Section 1. GENERALLY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Section 2. COMPENSATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Section 3. VACANCIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Section 4. CHIEF EXECUTIVE OFFICER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
</TABLE>
(i)
<PAGE> 3
<TABLE>
<S> <C> <C> <C>
Section 5. SECRETARY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Section 6. THE CHIEF FINANCIAL OFFICER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Section 7. DEPUTY OFFICERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Section 8. ASSISTANT OFFICERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
ARTICLE VI. INDEMNIFICATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Section 1. DEFINITIONS FOR INDEMNIFICATION PROVISIONS . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Section 2. MANDATORY INDEMNIFICATION AGAINST EXPENSES . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Section 3. AUTHORITY FOR PERMISSIVE INDEMNIFICATION . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Section 4. DETERMINATION AND AUTHORIZATION OF PERMITTED
INDEMNIFICATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Section 5. SHAREHOLDER-APPROVED INDEMNIFICATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Section 6. ADVANCES FOR EXPENSES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Section 7. INDEMNIFICATION OF OFFICERS, EMPLOYEES, AND AGENTS. . . . . . . . . . . . . . . . . . . . . . . 16
Section 8. INSURANCE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Section 9. EXPENSES FOR APPEARANCE AS WITNESS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
ARTICLE VII. REIMBURSEMENT OF NON-DEDUCTIBLEPAYMENTS TO OFFICERS AND EMPLOYEES . . . . . . . . . . . . . . . 17
ARTICLE VIII. FISCAL YEAR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
ARTICLE IX. ANNUAL STATEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
ARTICLE X. CAPITAL STOCK . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Section 1. FORM. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Section 2. TRANSFER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Section 3. RIGHTS OF HOLDER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Section 4. LOST OR DESTROYED CERTIFICATES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
ARTICLE XI. SEAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
ARTICLE XII. REGISTERED OFFICE AND REGISTERED AGENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
ARTICLE XIII. AMENDMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Section 1. AMENDMENTS GENERALLY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Section 2. BYLAW INCREASING QUORUM OR VOTING REQUIREMENTS . . . . . . . . . . . . . . . . . . . . . . . . 20
</TABLE>
(ii)
<PAGE> 4
BYLAWS
OF
ROCKDALE NATIONAL BANCSHARES, INC.
(Adopted: March 27, 1997)
ARTICLE I.
DEFINITIONS
As used in these Bylaws, the terms set forth below shall have the
meanings indicated, as follows:
"Articles of Incorporation" means the Articles of Incorporation of the
Corporation, as amended from time to time.
"Board" shall mean the Board of Directors of the Corporation.
"Chief Executive Officer" shall mean the President of the Corporation,
or such other officer as shall be designated by the Board as having the duties
of the Chief Executive Officer, as described in Section 4 of Article V of these
Bylaws.
"Code" shall mean the Georgia Business Corporation Code, as amended
from time to time.
"Corporation" shall mean Rockdale National Bancshares, Inc., a Georgia
corporation.
"Secretary" shall mean the Secretary of the Corporation, or such other
officer as shall be designated by the Board as having the duties of the
corporate Secretary as described in Section 5 of Article V of these Bylaws.
"Secretary of State" shall mean the Secretary of the State of Georgia.
"Voting group" shall have the meaning set forth in subsection (a) of
Section 6 of Article III of these Bylaws.
ARTICLE II.
GENERAL PROVISIONS REGARDING NOTICES
Section 1. NOTICES. Except as otherwise provided in the Articles of
Incorporation or these Bylaws, or as otherwise required by applicable law:
(a) Any notice required by these Bylaws or bylaw shall be in writing
unless oral notice is reasonable under the circumstances.
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(b) Notice may be communicated in person; by telephone, telegraph,
teletype, or other form of wire or wireless communication; or by mail or
private carrier. If these forms of personal notice are impracticable, notice
may be communicated by a newspaper of general circulation in the area where
published, or by radio, television, or other form of public broadcast
communication.
(c) Written notice by the Corporation to any shareholder, if in a
comprehensible form, is effective when mailed, if mailed with first-class
postage prepaid and correctly addressed to the shareholder's address shown in
the Corporation's current record of shareholders; provided that if the
Corporation has more than 500 shareholders of record entitled to vote at a
meeting, it may utilize a class of mail other than first class if the notice of
the meeting is mailed, with adequate postage prepaid, not less than 30 days
before the date of the meeting.
(d) Written notice to the Corporation may be addressed to its
registered agent at its registered office or to the Corporation or its
Secretary at its principal office shown in its most recent annual registration
with the Secretary of State.
(e) Except as provided in subsection (c) of this Section 1, written
notice, if in a comprehensible form, is effective at the earliest of the
following:
(i) When received, or when delivered, properly addressed, to
the addressee's last known principal place of business or
residence;
(ii) Five days after its deposit in the mail, as evidenced by
the postmark, if mailed with first-class postage prepaid
and correctly addressed; or
(iii) 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.
(f) Oral notice is effective when communicated if communicated in a
comprehensible manner.
(g) In calculating time periods for notice under these Bylaws, 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.
Section 2. WAIVER OF NOTICE. Except as otherwise provided or
required by the Articles of Incorporation, these Bylaws or applicable law:
(a) A shareholder may waive any notice required to be given to such
shareholder, before or after the date and time stated in the notice. The
waiver must be in writing, be signed by the shareholder entitled to the notice,
and be delivered to the Corporation for inclusion in the minutes or filing with
the Corporation's corporate records.
(b) A shareholder's attendance at a meeting:
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(i) Waives objection to lack of notice or defective notice of
meeting, unless the shareholder at the beginning of the
meeting objects to holding the meeting or transacting
business at the meeting; and
(ii) Waives objection to consideration of a particular matter
at the meeting that is not within the purpose or purposes
described in the meeting notice, unless the shareholder
objects to considering the matter when it is presented.
(c) Neither the business transacted nor the purpose of the meeting
need be specified in the waiver, except that any waiver by a shareholder of the
notice of a meeting of shareholders with respect to an amendment of the
Articles of Incorporation, a plan of merger or share exchange, a sale of assets
or any other action which would entitle the shareholder to exercise statutory
dissenter's rights under the Code and obtain payment for his shares shall not
be effective unless:
(i) Prior to the execution of the waiver, the shareholder
shall have been furnished the same material that under the
Code would have been required to be sent to the
shareholder in a notice of the meeting, including notice
of any applicable dissenters' rights as provided in the
Code; or
(ii) The waiver expressly waives the right to receive the
material required to be furnished.
(d) A director may waive any notice required to be given to such
director by the Code, the Articles of Incorporation, or these Bylaws before or
after the date and time stated in the notice. Except as provided by subsection
(e) of this Section 2, the waiver must be in writing, signed by the director
entitled to the notice, and delivered to the Corporation for inclusion in the
minutes or filing with the Corporation's corporate records.
(e) A director's attendance at or participation in a meeting waives
any required notice to him of the meeting unless the director at the beginning
of the meeting (or promptly upon his arrival) objects to holding the meeting or
transacting business at the meeting and does not thereafter vote for or assent
to action taken at the meeting.
ARTICLE III
SHAREHOLDERS' MEETINGS
Section 1. PLACE OF MEETING. The Board may designate any place
within or outside the State of Georgia as the place of meeting for any annual
or special shareholders' meeting. A waiver of notice signed by all
shareholders entitled to vote at a meeting may designate any place within or
outside the State of Georgia as the place for the holding of such meeting. If
no designation is made, or if a special meeting be otherwise called, the place
of meeting shall be the principal office of the Corporation.
Section 2. ANNUAL MEETING. An annual meeting of the shareholders
shall be held on the fifteenth of May of each year, if not a legal holiday (and
if such is a legal holiday, then on the next following day not a legal
holiday), at such time and place as the Board shall determine, at
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which time the shareholders shall elect a Board and transact such other
business as may be properly brought before the meeting. Notwithstanding the
foregoing, the Board may cause the annual meeting of shareholders to be held on
such other date in any year as the Board shall determine to be in the best
interests of the Corporation, and any business transacted at that meeting shall
have the same validity as if transacted on the date designated herein.
Section 3. SPECIAL MEETINGS. Except to the extent otherwise
prescribed by statute or the Articles of Incorporation, special meetings of the
shareholders, for any purpose or purposes, may be called by the Chief Executive
Officer, or by the presiding officer of the Board, if any. The Chief Executive
Officer or the Secretary shall call a special meeting when: (1) requested in
writing by any two or more of the directors; or (2) requested in writing by
shareholders owning shares representing at least twenty-five percent (25%) of
all the votes entitled to be cast on any issue proposed to be considered at
such meeting. Any such written request shall be signed and dated and shall
state the purpose or purposes of the proposed meeting.
Section 4. NOTICE TO SHAREHOLDERS.
(a) Except as otherwise specifically provided in this Section 4,
requirements with respect to the giving of notice and waiver of notice shall be
governed by the provisions of Article II of these Bylaws.
(b) The Corporation shall give notice to each shareholder entitled
to vote thereat of the date, time and place of each annual and special
shareholders' meeting no fewer than ten (10) nor more than sixty (60) days
before the meeting date.
(c) Unless otherwise required by the Code with respect to meetings
at which specified actions will be considered (including but not limited to
mergers, certain share exchanges, certain asset sales by the Corporation, and
dissolution of the Corporation), notice of an annual meeting need not contain a
description of the purpose or purposes for which the meeting is called.
(d) Notice of a special meeting must include a description of the
purpose or purposes for which the meeting is called.
(e) Unless a new record date is set (or is required by law or by the
terms of these Bylaws to be set) therefor, notice of the date, time and place
of any adjourned meeting need not be given otherwise than by the announcement
at the meeting before adjournment. If a new record date for the adjourned
meeting is or must be fixed, however, notice of the adjourned meeting must be
given in accordance with these Bylaws as if such adjourned meeting were a
newly-called meeting.
(f) If any corporate action proposed to be considered at a meeting
of shareholders would or might give rise to statutory dissenters' rights under
the Code, the notice of such meeting shall state that the meeting is to include
consideration of such proposed corporate action, and that the consummation of
such action will or might give rise to such dissenters' rights, and shall
include the description of such statutory dissenters' rights required by the
Code.
(g) If any corporate action which would give rise to statutory
dissenters' rights under the Code is taken by written consent of shareholders
without a meeting, or is taken at a meeting with
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<PAGE> 8
respect to which less than all shareholders were entitled to receive notice, or
is otherwise taken without a vote of shareholders, the Corporation shall cause
notice thereof, including the information concerning statutory dissenters'
rights contemplated by paragraph (b) above, to be given, not more than ten (10)
days after the adoption of such action by shareholder vote at a meeting or by
written consent to those shareholders who did not execute such written consent
or who were not entitled to receive notice of such meeting, or to all
shareholders if such action was otherwise taken without a vote of shareholders.
Section 5. FIXING OF RECORD DATE.
(a) For the purpose of determining shareholders entitled to notice
of or to vote at any meeting of shareholders, or shareholders entitled to
demand a special meeting of shareholders, or shareholders entitled to take any
other action, the Board may fix in advance (but not retroactively from the date
the Board takes such action) a date as the record date for any such
determination of shareholders, such date in any case to be not more than
seventy (70) days prior to the meeting or action requiring such determination
of shareholders. If no record date is fixed for the determination of
shareholders entitled to notice of or to vote at a meeting of shareholders, the
close of business on the last business day before the first notice of such
meeting is delivered to shareholders shall be the record date. If no record
date is fixed for determining shareholders entitled to take action without a
meeting, the date the first shareholder signs the consent shall be the record
date for such purpose. If no record date is fixed for determining shareholders
entitled to demand a special meeting, or to take other action, the date of
receipt of notice by the Corporation of demand for such meeting, or the date on
which such other action is to be taken by the shareholders, shall be the record
date for such purpose.
(b) A separate record date may be established for each voting group
entitled to vote separately on a matter at a meeting.
(c) A determination of shareholders entitled to notice of or to vote
at a shareholders meeting is effective for any adjournment of the meeting
unless the Board fixes a new record date, which it must do if the meeting is
adjourned to a date more than 120 days after the date fixed for the original
meeting.
(d) For the purpose of determining shareholders entitled to a
distribution by the Corporation (other than one involving a purchase,
redemption or other acquisition of the Corporation's shares), the record date
shall be the date fixed for such purpose by the Board, or if the Board does not
fix such a date, the date on which the Board authorizes such distribution.
Section 6. QUORUM AND VOTING REQUIREMENTS.
(a) Except as otherwise provided by the Articles of Incorporation or
the Code:
(i) A "voting group" with respect to any given matter means
all shares of one or more class or series which, under the
Articles of Incorporation or the Code, are entitled to
vote and be counted together collectively on that matter,
and unless specified otherwise in the Articles of
Incorporation, the Code or these Bylaws,
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all shares entitled to vote on a given matter shall be
deemed to be a single voting group for purposes of that
matter.
(ii) Each outstanding share, regardless of class, is entitled
to one vote on each matter voted on at a shareholders'
meeting.
(iii) A majority of the votes entitled to be cast on the matter
by a voting group constitutes a quorum of that voting
group for action on that matter.
(iv) The presence of a quorum of each voting group entitled to
vote thereon shall be the requisite for transaction of
business on a given matter.
(v) Action on a matter other than election of directors is
approved by a voting group if a quorum of such voting
group exists and the number of votes cast within such
voting group in favor of such action exceeds the number of
votes cast within such voting group against such action.
(vi) Except as otherwise provided in these Bylaws, all shares
entitled to vote for election of directors shall vote
thereon as a single voting group, and directors shall be
elected by a plurality of votes cast by shares entitled to
vote in the election in a meeting at which a quorum of
such voting group is present.
(b) Once a share is represented for any purpose other than solely to
object to holding a meeting or transacting business at the meeting, it is
deemed present for quorum purposes for the remainder of the meeting and for any
adjournment of that meeting unless a new record date is, or is required by law
or these Bylaws to be, set for that adjourned meeting.
(c) If a quorum for transaction of business shall not be present at
a meeting of shareholders, the shareholders entitled to vote thereat, present
in person or by proxy, shall have the power to adjourn the meeting from time to
time, until the requisite amount of voting stock shall be present. No notice
other than announcements at the meeting before adjournment shall be required of
the new date, time or place of the adjourned meeting, unless a new record date
for such adjourned meeting is, or is required by law or these Bylaws to be,
fixed. At such adjourned meeting (for which no new record date is, or is
required to be, set) at which a quorum shall be present in person or by proxy,
any business may be transacted that might have been transacted at the meeting
originally called.
Section 7. PROXIES. At every meeting of the shareholders, any
shareholder having the right to vote shall be entitled to vote in person or by
proxy, but no proxy shall be: (i) effective unless given in writing and
signed, either personally by the shareholder or his attorney-in-fact; or (ii)
effective until received by the Secretary or other officer or agent authorized
to tabulate votes; or valid after eleven months from its date, unless said
proxy expressly provides for a longer period.
Section 8. INFORMAL ACTIONS BY SHAREHOLDERS. Any action required or
permitted to be taken at a meeting of the shareholders may be taken without a
meeting if written consent (which may take the form of one or more counterpart
copies), setting forth the action so taken, shall be signed by all the holders
of all the shares entitled to vote with respect to the subject
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matter thereof and delivered to the Corporation for inclusion in the minutes or
filing with the corporate records. Such consent shall have the same force and
effect as a unanimous vote of the shareholders; provided, however, that no such
consent which purports to be an approval of any plan of merger, share exchange,
asset sale or other transaction (i) as to which shareholder approval is
required by the Code and (ii) with respect to which specific disclosure
requirements to voting shareholders are imposed by the Code, shall be effective
unless:
(i) prior to the execution of the consent, each consenting
shareholder shall have been furnished the same material which,
under the Code, would have been required to be sent to
shareholders in a notice of a meeting at which the proposed
action would have been submitted to the shareholders for action,
including notice of any applicable dissenters' rights; or:
(ii) the written consent contains an express waiver of the right to
receive the material otherwise required to be furnished.
ARTICLE IV
DIRECTORS
Section 1. GENERAL POWERS. All corporate powers of the Corporation
shall be exercised by or under the authority of, and the business and affairs
of the Corporation managed under the direction of, its Board, subject to any
limitation set forth in the Articles of Incorporation, or any amendment to
these Bylaws approved by the shareholders of the Corporation, or any otherwise
lawful agreement among the shareholders of the Corporation.
Section 2. NUMBER, ELECTION AND TERMS. The business and affairs of
the Corporation shall be managed by or under the direction of a board of
directors which shall consist of not less than three (3) nor more than
twenty-four (24) persons. The exact number of directors within the minimum and
maximum limitations specified in the preceding sentence shall be fixed from
time to time either by the shareholders or the Board. The directors shall be
divided into three classes, designated Class I, Class II and Class III. Each
class shall consist, as nearly as may be possible, of one-third of the total
number of directors constituting the entire Board. The term of the
Corporation's initial Class I directors shall expire at the Corporation's first
annual meeting of shareholders; the term of the Corporation's initial Class II
directors shall expire at the Corporation's second annual meeting of
shareholders; and the term of the Corporation's initial Class III directors
shall expire at the Corporation's third annual meeting of shareholders.
At each annual meeting of the shareholders, successors to the class of
directors whose term expires at the annual meeting shall be elected for a
three-year term. If the number of directors is changed, any increase or
decrease shall be apportioned among the classes so as to maintain the number of
directors in each class as nearly equal as possible, and any additional
director of any class elected to fill a vacancy resulting from an increase in
such class shall hold office for a term that shall coincide with the remaining
term of that class, but in no case will a decrease in the number of directors
shorten the term of any incumbent director. A director shall hold office until
the annual meeting for the year in which his term expires and until his
successor shall be elected and shall
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qualify, subject, however, to prior death, resignation, retirement,
disqualification or removal from office.
Any director may be removed, with or without cause, at any regular or
special meeting of shareholders called for that purpose, and his position
filled by another person nominated and elected for that purpose, by the holders
of at least seventy-five percent (75%) of the outstanding shares of each class
of stock of the Corporation entitled to vote in elections of directors.
Section 3. VACANCIES, HOW FILLED. Except in the case of removal from
office, any vacancy on the Board of Directors shall be filled by a majority of
the directors then in office. Any director elected to fill a vacancy not
resulting from an increase in the number of directors shall have the same
remaining term as that of his predecessor.
Section 4. PLACE OF MEETING. The Board may hold its meetings at such
place or places within or without the State of Georgia as it may from time to
time determine.
Section 5. COMPENSATION. Directors may be allowed such compensation
for attendance at regular or special meetings of the Board and of any special
or standing committees thereof as may be from time to time determined by
resolution of the Board.
Section 6. REGULAR MEETINGS. A regular annual meeting of the Board
shall be held, without other notice than this Bylaw, immediately after, and at
the same place as, the annual meeting of shareholders. The Board may provide,
by resolution, the time and place within or without the State of Georgia, for
the holding of additional regular meetings without other notice than such
resolution.
Section 7. SPECIAL MEETINGS. Special meetings of the Board may be
called by the Chief Executive Officer or the presiding officer of the Board, if
different from the Chief Executive Officer, on not less than two (2) days'
notice to each director by mail, telegram, cablegram or other form of wire or
wireless communication, or personal delivery or other form of communication
authorized under the circumstances by the Code, and shall be called by the
Chief Executive Officer or the Secretary in like manner and on like notice on
the written request of any two (2) or more members of the Board. Such notice
shall state the time, date and place of such meeting, but need not describe the
purpose of the meeting. Any such special meeting shall be held at such time
and place as shall be stated in the notice of the meeting.
Section 8. GENERAL PROVISIONS REGARDING NOTICE AND WAIVER. Except as
otherwise expressly provided in this Article IV, matters relating to notice to
directors and waiver of notice by directors shall be governed by the provisions
of Article II of these Bylaws.
Section 9. QUORUM. At all meetings of the Board, unless otherwise
provided in the Articles of Incorporation or other provisions of these Bylaws,
the presence of a majority of the Directors shall constitute a quorum for the
transaction of business. In the absence of a quorum a majority of the
Directors present at any meeting may adjourn from time to time until a quorum
be had. Notice of the time and place of any adjourned meeting need only be
given by announcement at the meeting at which adjournment is taken.
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Section 10. MANNER OF ACTING. Except as expressly otherwise provided
by the Articles of Incorporation or other provisions of these Bylaws, if a
quorum is present when a vote is taken, the affirmative vote of a majority of
directors present is the act of the Board. A director who is present at a
meeting when corporate action is taken is deemed to have assented to the action
unless:
(a) He objects at the beginning of the meeting (or promptly upon his
arrival) to holding it or transacting business at the meeting;
(b) His dissent or abstention from the action taken is entered in
the minutes of the meeting; or
(c) He does not vote in favor of the action taken and delivers
written notice of his dissent or abstention to the presiding
officer of the meeting before its adjournment or to the
Corporation immediately after adjournment of the meeting.
Section 11. COMMITTEES.
(a) Except as otherwise provided by the Articles of Incorporation,
the Board may create one or more committees and appoint members of the Board to
serve on them. Each committee may have one or more members, who serve at the
pleasure of the Board.
(b) The provisions of these Bylaws and of the Code which govern
meetings, action without meetings, notice and waiver of notice, and quorum and
voting requirements of the Board, shall apply as well to committees created
under this Section 11 and their members.
(c) To the extent specified by the Articles of Incorporation, these
Bylaws and the resolution of the Board creating such committee, each committee
may exercise the authority of the Board, provided that a committee may not:
(i) Approve, or propose to shareholders for approval, action
required by the Code to be approved by shareholders;
(ii) Fill vacancies on the Board or on any of its committees;
(iii) Exercise any authority which the Board may have to amend
the Articles of Incorporation;
(iv) Adopt, amend, or repeal bylaws; or
(v) Approve a plan of merger not requiring shareholder
approval.
Section 12. ACTION WITHOUT FORMAL MEETING. Except as expressly
otherwise provided in the Articles of Incorporation, any action required or
permitted to be taken at any meeting of the Board or of any committee thereof
may be taken without a meeting if written consent thereto (which may take the
form of one or more counterparts) is signed by all members of the Board or of
such committee, as the case may be, and such written consent is filed with the
minutes of the
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proceedings of the Board or committee. A consent executed in accordance
herewith has the effect of a meeting vote and may be described as such in any
document.
Section 13. CONFERENCE CALL MEETINGS. Members of the Board, or any
committee of the Board, may participate in a meeting of the Board or committee
by means of conference telephone or similar communications equipment by means
of which all persons participating in the meeting can simultaneously hear each
other during the meeting, and participation in a meeting pursuant to this
Section shall constitute presence in person at such meeting.
ARTICLE V.
OFFICERS
Section 1. GENERALLY. The Board shall from time to time elect or
appoint such officers as it shall deem necessary or appropriate to the
management and operation of the Corporation, which officers shall hold their
offices for such terms as shall be determined by the Board and shall exercise
such powers and perform such duties as are specified in these Bylaws or in a
resolution of the Board. Except as specifically otherwise provided in
resolutions of the Board, the following requirements shall apply to election or
appointment of officers:
(a) The Corporation shall have, at a minimum, the following
officers, which offices shall bear the titles designated therefor by resolution
of the Board, but in the absence of such designation shall bear the titles set
forth below:
Office Title
------ -----
Chief Executive Officer Chairman
Chief Financial Officer Treasurer
Secretary Secretary
(b) All officers of the Corporation shall serve at the pleasure of
the Board, and in the absence of specification otherwise in a resolution of the
Board, each officer shall be elected to serve until the next succeeding annual
meeting of the Board and the election and qualification of his successor,
subject to his earlier death, resignation or removal.
(c) Any person may hold two or more offices simultaneously, and no
officer need be a shareholder of the Corporation.
(d) If so provided by resolution of the Board, any officer may be
delegated the authority to appoint one or more officers or assistant officers,
which appointed officers or assistant officers shall have the duties and powers
specified in the resolution of the Board.
Section 2. COMPENSATION. The salaries of the officers of the
Corporation shall be fixed by the Board, except that the Board may delegate to
any officer or officers the power to fix the compensation of any other officer.
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Section 3. VACANCIES. A vacancy in any office, because of
resignation, removal or death may be filled by the Board for the unexpired
portion of the term, or if so provided by resolution of the Board, by an
officer of the Corporation to whom has been delegated the authority to appoint
the holder of such vacated office.
Section 4. CHIEF EXECUTIVE OFFICER. The Chief Executive Officer
shall have such title or titles designated by the Board and shall be the
principal executive officer of the Corporation. Subject to the control of the
Board, the Chief Executive Officer shall in general manage, supervise and
control all of the business and affairs of the Corporation. He shall, when
present, preside at all meetings of all of the stockholders. He may sign,
individually or in conjunction with any other proper officer of the Corporation
thereunto authorized by the Board, certificates for shares of the Corporation,
any deeds, mortgages, bonds, policies of insurance, contracts, investment
certificates, or other instruments which the Board has authorized to be
executed, except in cases where the execution thereof shall be expressly
delegated by the Board or by the Bylaws to some other officer or agent of the
Corporation, or shall be required by law to be otherwise signed or executed;
and in general shall perform all duties incident to the office of the Chief
Executive Officer of the Corporation and such other duties as may be prescribed
by the Board from time to time.
Section 5. SECRETARY. The Secretary may be designated by any such
title as determined by resolution of the Board, but shall have the duties of
the officer denominated the "Secretary" under the Code. Such officer shall:
(a) attend and keep the Minutes of the shareholders' meetings and of the
Board's meetings in one or more books provided for that purpose; (b) see that
all notices are duly given in accordance with the provisions of these Bylaws or
as otherwise required by law or the provisions of the Articles of
Incorporation; (c) be custodian of the corporate records and of the seal of the
Corporation and see that the seal of the Corporation is affixed to all
documents, the execution of which on behalf of the Corporation under its seal
is duly authorized; (d) maintain, or cause an agent designated by the Board to
maintain, a record of the Corporation's shareholders in a form that permits the
preparation of a list of the names and addresses of all shareholders in
alphabetical order by class of shares, showing the number and class of shares
held by each; (e) have general charge of the stock transfer books of the
Corporation or responsibility for supervision, on behalf of the Corporation, of
any agent to which stock transfer responsibility has been delegated by the
Board; (f) have responsibility for the custody, maintenance and preservation of
those corporate records which the Corporation is required by the Code or
otherwise to create, maintain or preserve; (g) in general perform all duties
incident to the legal office of "Secretary," as described in the Code, and such
other duties as from time to time may be assigned to him by the Board.
Section 6. CHIEF FINANCIAL OFFICER. The Treasurer, unless otherwise
determined by the Board, shall (a) have charge and custody of and be
responsible for all funds and securities of the Corporation; receive and give
receipts for monies due and payable to the Corporation from any source
whatsoever, and deposit all such monies in the name of the Corporation in such
banks, trust companies or other depositories as shall be selected by the Board;
and (b) in general perform all the duties incident o the office of Treasurer
and such other duties as from time to time may be designated by the Board.
Section 7. DEPUTY OFFICERS. The Board may create one or more deputy
officers whose duties shall be, among any other designated thereto by the
Board, to perform the duties of the officer to which such office has been
deputized in the event of the unavailability, death or inability or
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refusal of such officer to act. Deputy officers may hold such titles as
designated therefor by the Board; however, any office designated with the
prefix "Vice" or "Deputy" shall be, unless otherwise specified by resolution of
the Board, automatically a deputy officer to the office with the title of which
the prefix term is conjoined. Deputy officers shall have such other duties as
prescribed by the Board from time to time.
Section 8. ASSISTANT OFFICERS. The Board may appoint one or more
officers who shall be assistants to principal officers of the Corporation, or
their deputies, and who shall have such duties as shall be delegated to such
assistant officers by the Board or such principal officers, including the
authority to perform such functions of those principal officers in the place of
and with full authority of such principal officers as shall be designated by
the Board or (if so authorized) by such principal officers. The Board may by
resolution authorize appointment of assistant officers by those principal
officers to which such appointed officers will serve as assistants.
ARTICLE VI
INDEMNIFICATION
Section 1. DEFINITIONS FOR INDEMNIFICATION PROVISIONS. As used in
this Article VI, the term:
(a) "Corporation" (when spelled with an initial capital letter)
includes any domestic or foreign predecessor entity of the
"Corporation" (as defined in Article I of these Bylaws) in a
merger or other transaction in which the predecessor's existence
ceased upon consummation of the transaction.
(b) "Director" or "officer" means an individual who is or was a
director or officer of the Corporation or an individual who,
while a director or officer of the Corporation, is or was
serving at the Corporation's request as a director, officer,
partner, trustee, employee, or agent of another foreign or
domestic corporation, partnership, joint venture, trust,
employee benefit plan, or other enterprise. A director or
officer is considered to be serving an employee benefit plan at
the Corporation's request if his duties to the Corporation also
impose duties on, or otherwise involve services by, him to the
plan or to participants in or beneficiaries of the plan.
Director or officer includes, unless the context requires
otherwise, the estate or personal representative of a director
or officer.
(c) "Disinterested director" means a director who at the time of a
vote referred to in subsection (c) of Code Section 14-2-853 or a
vote or selection referred to in subsection (b) or (c) of Code
Section 14-2-855 or subsection (a) of Code Section 14-2-856 is
not:
(A) A party to the proceeding; or
(B) An individual who is a party to a proceeding having a
familial, financial, professional, or employment relationship
with the director whose indemnification or advance for expenses
is the subject of the decision being made with respect to the
proceeding, which relationship would, in the circumstances,
reasonably be expected
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to exert an influence on the director's judgment when voting on
the decision being made.
(d) "Expenses" include attorneys' fees.
(e) "Liability" means the obligation to pay a judgment, settlement,
penalty, fine (including an excise tax assessed with respect to
an employee benefit plan), or reasonable expenses incurred with
respect to a proceeding.
(f) "Official capacity" means:
(A) When used with respect to a director, the office of
director in a corporation; and
(B) When used with respect to an officer, the office in a
corporation held by the officer.
Official capacity does not include service for any other domestic or
foreign corporation or any partnership, joint venture, trust, employee
benefit plan, or other entity.
(g) "Party" includes an individual who was, is, or is threatened to
be made a named defendant or respondent in a proceeding.
(h) "Proceeding" means any threatened, pending, or completed action,
suit, or proceeding, whether civil, criminal, administrative, or
investigative and whether formal or informal.
Section 2. MANDATORY INDEMNIFICATION AGAINST EXPENSES. Unless
otherwise provided by the Articles of Incorporation, to the extent that a
director has been wholly successful, on the merits or otherwise, in the defense
of any proceeding to which he was a party because he is or was a director of
the Corporation, the Corporation shall indemnify the director against
reasonable expenses incurred by him in connection therewith.
Section 3. AUTHORITY FOR PERMISSIVE INDEMNIFICATION.
(a) Except as provided in subsections (d) and (e) of this Section 3,
or as otherwise provided in the Articles of Incorporation, the Corporation may
indemnify an individual made a party to a proceeding because he is or was a
director against liability incurred in the proceeding if he acted in a manner
he believed in good faith to be in or not opposed to the best interests of the
Corporation and, in the case of any criminal proceeding, he had no reasonable
cause to believe his conduct was unlawful.
(b) A director's conduct with respect to an employee benefit plan
for a purpose he believed in good faith to be in the interests of the
participants in and beneficiaries of the plan is conduct that satisfies the
requirement of subsection (a) of this Section 3.
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(c) The termination of a proceeding by judgment, order, settlement,
or conviction, or upon a plea of nolo contendere or its equivalent is not, of
itself, determinative that the director did not meet the standard of conduct
set forth in subsection (a) of this Section 3.
(d) The Corporation may not indemnify a director under this Section
3:
(i) In connection with a proceeding by or in the right of the
Corporation, except for reasonable expenses incurred in
connection with the proceeding, if it is determined that
the director has met the relevant standard of conduct set
forth in subsection (a) of this Section 3 or
(ii) In connection with any proceeding with respect to conduct
for which the director was adjudged liable on the basis
that personal benefit was improperly received by him,
whether or not involving action in his official capacity.
Section 4. DETERMINATION AND AUTHORIZATION OF PERMITTED
INDEMNIFICATION.
(a) The Corporation may not indemnify a director under Section 3 of
this Article VI unless a determination has been made in the specific case that
indemnification of the director is permissible in the circumstances because he
has met the standard of conduct set forth in subsection (a) of such Section 3.
(b) The determination required by subsection (a) hereof shall be
made:
(i) If there are two or more disinterested directors, by the
board of directors by a majority vote of a quorum
consisting of directors not at the time parties to the
proceeding or by a majority of the members of a committee
of two or more disinterested directors appointed by such a
vote; or
(ii) By special legal counsel:
(A) Selected in the manner prescribed in paragraph
(i) of this subsection; or
(B) If there are fewer than two disinterested
directors, selected by the board of directors (in which
selection directors who do not qualify as disinterested
directors may participate); or
(iii) By the shareholders, but shares owned by or voted under
the control of a director who at the time does not qualify
as a disinterested director may not be voted on the
determination.
(c) Authorization of indemnification or an obligation to indemnify
and evaluation as to reasonableness of expenses shall be made in the same
manner as the determination that indemnification is permissible, except that if
there are fewer than two disinterested directors or if the determination is
made by special legal counsel, authorization of indemnification and evaluation
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as to reasonableness of expenses shall be made by those entitled under
paragraph (b)(ii)(B) of this Section 4.
Section 5. SHAREHOLDER-APPROVED INDEMNIFICATION.
(a) Without regard to any limitations contained in any other section
of this Article VI, the Corporation may, if authorized by its shareholders by a
majority of votes which would be entitled to be cast in a vote to amend the
Corporation's Articles of Incorporation (which authorization may take the form
of an amendment to the Articles of Incorporation or a contract, resolution or
bylaw approved or ratified by the requisite shareholder vote), indemnify or
obligate itself to indemnify a director made a party to a proceeding, including
a proceeding brought by or in the right of the Corporation; but shares owned or
voted under the control of a director who at the time does not qualify as a
disinterested director with respect to any existing or threatened proceeding
that would be covered by the authorization may not be voted on the
authorization.
(b) The Corporation shall not indemnify a director under this
Section 5 for any liability incurred in a proceeding in which the director is
adjudged liable to the Corporation or is subjected to injunctive relief in
favor of the Corporation:
(i) For any appropriation, in violation of 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 any type of liability for unlawful distribution under
Section 14-2-832 of the Code, or any successor statute; or
(iv) For any transaction from which he received an improper
personal benefit.
(c) Where approved or authorized in the manner described in
subsection (a) of this Section 5, the Corporation may advance or reimburse
expenses incurred in advance of final disposition of the proceeding only if:
(i) The director furnishes the Corporation a written
affirmation of his good faith belief that his conduct does
not constitute behavior of the kind described in
subsection (b) of this Section 5; and
(ii) The director furnishes the Corporation a written
undertaking, executed personally or on his behalf, to
repay any advances if it is ultimately determined that he
is not entitled to indemnification under this Section 5.
Section 6. ADVANCES FOR EXPENSES.
(a) The Corporation may pay for or reimburse the reasonable expenses
incurred by a director who is a party to a proceeding because he was a director
in advance of final disposition of the proceeding if:
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(i) The director furnishes the Corporation a written
affirmation of his good faith belief that he has met the
standard of conduct set forth in subsection (a) of Section
3 of this Article VI or that the proceeding involves
conduct for which liability has been eliminated under a
provision of the Articles and authorized by paragraph (4)
of subsection (b) of Code Section 14-2-202; and
(ii) The director furnishes the Corporation a written
undertaking, executed personally or on his behalf, to
repay any advances if it is ultimately determined that he
is not entitled to indemnification under this Article.
(b) The undertaking required by paragraph (ii) of subsection (a) of
this Section 6 must be an unlimited general obligation of the director but need
not be secured and may be accepted without reference to financial ability to
make repayment.
Section 7. INDEMNIFICATION OF OFFICERS, EMPLOYEES, AND AGENTS.
(a) A corporation may indemnify and advance expenses under this part
to an officer of the corporation who is a party to a proceeding because he or
she is an officer of the corporation:
(i) To the same extent as a director; and
(ii) If he or she is not a director, to such further extent as
may be provided by the Articles, the Bylaws, a resolution
of the Board, or contract except for liability arising out
of conduct that constitutes:
(A) Appropriation, in violation of his or her duties,
of any business opportunity of the corporation;
(B) Acts or omissions which involve intentional
misconduct or a knowing violation of law;
(C) The types of liability set forth in Code Section
14-2-832; or
(D) Receipt of an improper personal benefit.
(b) The provisions of paragraph (ii) of subsection (a) of this Code
section shall apply to an officer who is also a director if the sole basis on
which he or she is made a party to the proceeding is an act or omission solely
as an officer.
(c) An officer of a corporation who is not a director is entitled to
mandatory indemnification under Code Section 14-2-852, and may apply to a court
under Code Section 14-2-854 for indemnification or advances for expenses, in
each case to the same extent to which a director may be entitled to
indemnification or advances for expenses under those provisions.
(d) A corporation may also indemnify and advance expenses to an
employee or agent who is not a director to the extent, consistent with public
policy, that may be provided by its articles of incorporation, bylaws, general
or specific action of its board of directors, or contract. (Code 1981,
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Section 14-2-857, enacted by Ga. L. 1988, p. 1070, Section 1; Ga. L. 1989, p.
946, Section 37; Ga. L. 1996, p. 1203, Section 5.)
Section 8. INSURANCE. The Corporation may purchase and maintain
insurance on behalf of an individual who is or was a director, officer,
employee, or agent of the Corporation or who, while a director, officer,
employee, or agent of the Corporation, is or was serving at the request of the
Corporation as a director, officer, partner, trustee, employee, or agent of
another foreign or domestic corporation, partnership, joint venture, trust,
employee benefit plan, or other enterprise, against liability asserted against
or incurred by him in that capacity or arising from his status as a director,
officer, employee, or agent, whether or not the Corporation would have power to
indemnify him against the same liability under this Article VI or applicable
law.
Section 9. EXPENSES FOR APPEARANCE AS WITNESS. Nothing contained in
this Article VI shall be deemed to limit the Corporation's power to pay or
reimburse expenses incurred by a director or officer in connection with his
appearance as a witness in a proceeding at a time when he has not been made a
named defendant or respondent to the proceeding.
ARTICLE VII.
REIMBURSEMENT OF NON-DEDUCTIBLE
PAYMENTS TO OFFICERS AND EMPLOYEES
In the event any payments to an officer or employee of the
Corporation, such as salary, commission, bonus, interest or rent expenses
incurred by him, is thereafter disallowed in whole or in part by the Internal
Revenue Service as a proper deduction for income tax purposes under Section 162
of the Internal Revenue Code of 1986 (or disallowed under any similar statutory
section which may subsequently replace such Section 162), such disallowed
payments shall be deemed to be an obligation owed by such officer or employee
to the Corporation. Such disallowed payments shall be reimbursed by such
officer or employee to the Corporation on or before ninety (90) days following
the final determination of such disallowance by the Internal Revenue Service or
entry of the final judgment of such determination if adjudicated. It shall be
the duty of the Board to enforce reimbursement of each such amount disallowed,
including the withholding from future compensation payments to such officer or
employee until the amount owed to the Corporation has been recovered.
ARTICLE VIII.
FISCAL YEAR
The fiscal year of the Corporation shall be established by the Board
or, in the absence of Board action establishing such fiscal year, by the Chief
Executive Officer.
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ARTICLE IX.
ANNUAL STATEMENTS
No 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:
(i) A balance sheet showing in reasonable detail the financial
condition of the Corporation as of the close of the fiscal
year, and
(ii) A profit and loss statement showing the results of its
operation during the fiscal year.
Upon written request, the Corporation shall mail promptly to any
shareholder of record a copy of the most recent such balance sheet and profit
and loss statement. If prepared for other purposes, the Corporation shall also
furnish upon written request a statement of sources and applications of funds
and a statement of changes in shareholders' equity for the fiscal year. If
financial statements are prepared by the Corporation on the basis of generally
accepted accounting principles, the annual financial statements must also be
prepared, and disclose that they are prepared, on that basis. If financial
statements are prepared otherwise than on the basis of generally accepted
accounting principles, they must so disclose and must be prepared on the same
basis as other reports or statements prepared by the Corporation for the use of
others.
(b) If the annual financial statements are reported upon by a public
accountant, his report must accompany them. If not, the statements must be
accompanied by a statement of the Chief Executive Officer or the person
responsible for the Corporation's accounting records:
(i) Stating his reasonable belief whether the statements were
prepared on the basis of generally accepted accounting
principles and, if not, describing the basis of
preparation; and
(ii) Describing any respects in which the statements were not
prepared on a basis of accounting consistent with the
statements prepared for the preceding year.
ARTICLE X.
CAPITAL STOCK
Section 1. FORM.
(a) Except as otherwise provided for in paragraph (b) of this
Section 1, the interest of each shareholder shall be evidenced by a certificate
representing shares of stock of the Corporation, which shall be in such form as
the Board may from time to time adopt and shall be numbered and shall be
entered in the books of the Corporation as they are issued. Each certificate
shall exhibit the holder's name, the number of shares and class of shares and
series, if any, represented thereby, the name of the Corporation and a
statement that the Corporation is organized under the laws of the State of
Georgia. Each certificate shall be signed by one or more officers of the
Corporation
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specified by resolution of the Board, but in the absence of such
specifications, shall be valid if executed by the Chief Executive Officer or
any Deputy or Assistant thereto, and such execution is countersigned by the
Secretary, or any Deputy or Assistant thereto. Each stock certificate may but
need not be sealed with the seal of the Corporation.
(b) If authorized by resolution of the Board, the Corporation may
issue some or all of the shares of any or all of its classes or series without
certificates. The issuance of such shares shall not affect shares already
represented by certificates until they are surrendered to the Corporation.
Within a reasonable time after the issuance or transfer of any shares not
represented by certificates, the Corporation shall send to the holder of such
shares a written statement setting forth, with respect to such shares (i) the
name of the Corporation as issuer and the Corporation's state of incorporation,
(ii) the name of the person to whom such shares are issued, (iii) the number of
shares and class of shares and series, if any, and (iv) the terms of any
restrictions on transfer which, were such shares represented by a stock
certificate would be required to be noted on such certificate, by law, by the
Articles of Incorporation or these Bylaws, or by any legal agreement among the
shareholders of the Corporation.
Section 2. TRANSFER. Transfers of stock shall be made on the books
of the Corporation only by the person named in the certificate, or, in the case
of shares not represented by certificates, the person named in the
Corporation's stock transfer records as the owner of such shares, or, in either
case, by attorney lawfully constituted in writing. In addition, with respect
to shares represented by certificates, transfers shall be made only upon
surrender of the certificate therefor, or in the case of a certificate alleged
to have been lost, stolen or destroyed, upon compliance with the provisions of
Section 4, Article X of these Bylaws.
Section 3. RIGHTS OF HOLDER. The Corporation shall be entitled to
treat the holder of record of any share of the Corporation as the person
entitled to vote such share (to the extent such share is entitled to vote), to
receive any distribution with respect to such share, and for all other purposes
and accordingly shall not be bound to recognize any equitable or other claim to
or interest in such share on the part of any other person, whether or not it
shall have express or other notice thereof, except as otherwise provided by
law.
Section 4. LOST OR DESTROYED CERTIFICATES. Any person claiming a
certificate of stock to be lost, stolen or destroyed shall make an affidavit or
affirmation of the fact in such manner as the Board may require and shall if
the Board so requires, give the Corporation a bond of indemnity in the form and
amount and with one or more sureties satisfactory to the Board, whereupon an
appropriate new certificate may be issued in lieu of the one alleged to have
been lost, stolen or destroyed.
ARTICLE XI.
SEAL
The corporate seal shall be in such form as shall be specified in the
minutes of the organizational meeting of the Corporation, or as the Board may
from time to time determine.
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ARTICLE XII.
REGISTERED OFFICE AND REGISTERED AGENT
The address of the initial registered office of the corporation is
3343 Peachtree Road, N.E., Suite 1800, Atlanta, Georgia 30326 and the name of
the initial registered agent is Robert C. Schwartz. The corporation may amend
this Article XII at any time to change its registered office or registered
agent, without further action of its officers or directors, by filing with the
Secretary of State a notice of such change, in accordance with Section 14-2-502
of the Code, or any successor statute.
The corporation may have other offices at such places within or
without the State of Georgia as the Board may from time to time designate or
the business of the corporation may require or make desirable.
ARTICLE XIII.
AMENDMENTS
Section 1. AMENDMENTS GENERALLY.
(a) Except as otherwise provided in subsection (c) of this Section
1, or in the Articles of Incorporation or by applicable law, the Board may
amend or repeal any provision of these Bylaws or adopt any new bylaw, unless
the shareholders have adopted, amended or repealed a particular bylaw provision
and, in doing so, have expressly reserved to the shareholders the right of
amendment or repeal therefor.
(b) The Corporations shareholders have the right to amend or repeal
any provision of these Bylaws, or to adopt new Bylaw provisions, even though
such provisions may also be adopted, amended or repealed by the Board.
(c) Any provision of these Bylaws limiting the authority of the
Board or establishing staggered terms for directors may be adopted, amended or
repealed only by the shareholders.
Section 2. BYLAW INCREASING QUORUM OR VOTING REQUIREMENTS.
(a) Except as provided in Section 14-2-1113 of the Code or any
successor statute thereto (relating to corporate business combinations with
statutorily defined "interested shareholders"), any bylaw which sets a greater
quorum or voting requirement for shareholders (or voting groups of
shareholders) than the minimum required by the Code may not be adopted, amended
or repealed by the Board.
(b) Except as otherwise provided in the Articles of Incorporation, a
bylaw that fixes a greater quorum or voting requirement for the Board than the
minimum required by the Code:
(i) May be adopted, amended, or repealed by the shareholders
only by the affirmative vote of a majority of the votes
entitled to be cast; or
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(ii) May be adopted, amended, or repealed by the directors only
by a majority of the entire Board.
(iii) A bylaw adopted or amended by the shareholders that fixes
a greater quorum or voting requirement for the Board may
be amended or repealed only by a specified vote of either
the shareholders or the Board, if such bylaw provision so
provides.
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EXHIBIT 10.1
EMPLOYMENT AGREEMENT
THIS AGREEMENT, dated as of the 21st day of February 1997, by and
among Rockdale National Bancshares, Inc., a Georgia corporation (the
"Company"), Rockdale National Bank (Proposed), a proposed national bank to be
organized under the laws of the United States (the "Bank") (the Company and the
Bank are collectively referred to herein as the "Employer"), and William L.
Daniel (the "Executive").
WITNESSETH:
WHEREAS, the directors of the Company, as organizers of the Bank, are
seeking approval from the Comptroller of the Currency ("OCC") and the Federal
Deposit Insurance Corporation ("FDIC") to charter a national bank in Rockdale
County, Georgia; and
WHEREAS, Executive is willing to assist the directors of the Company
in the organization of the Bank and to become the President and Chief Executive
Officer of the Bank and the Company in accordance with the terms and conditions
hereinafter set forth;
NOW, THEREFORE, for and in consideration of the mutual premises and
covenants herein contained, the parties hereto agree as follows:
1. CONSULTING SERVICES. From January 1, 1997 through such time as
the Bank opens for business, Executive shall serve as a consultant to Employer
for the purpose of assisting with the organization of the Bank and the Company,
and as a consultant Executive shall be deemed to be an independent contractor.
Executive shall be paid $7,500 per month, payable bi-weekly, for such
consulting services.
2. EMPLOYMENT. Employer employs Executive and Executive accepts
employment upon the terms and conditions set forth in this Agreement.
3. TERM. The term of employment of Executive under this Agreement
shall be the three year period commencing on the date the Bank opens for
business and ending on February 21, 2000. Notwithstanding the foregoing, in
the event that the term of this Agreement expires and Executive and the
Employer have not entered into a successor, amended, or replacement employment
agreement, Executive shall be entitled to receive a cash payment equal to fifty
percent (50%) of Executive's base salary paid hereunder in the event
Executive's employment is terminated for any reason other than that set forth
in Section 12(a) hereunder.
4. COMPENSATION. (a) Salary. For all services rendered by
Executive, Executive shall be paid a minimum annual base salary of $100,000,
payable in equal semi-monthly installments during the term of this Agreement.
Salary payments shall be subject to withholding and other applicable taxes.
Such base salary shall be increased in the discretion of the Board of Directors
of the Bank within thirty (30) days after the end of the calendar quarter in
which total deposits of the Bank equal or exceed $20 million. The Board of
Directors in exercising its discretion shall consider Executive's performance
in light of the specific goals and objectives for the Bank which Executive and
the Board of Directors shall mutually agree upon by the end of December of each
calendar for the succeeding calendar year.
1
<PAGE> 2
(b) Bonus. Beginning on the second anniversary of the Bank's opening
for business, and in addition to Executive's base salary, Executive shall be
eligible to receive such performance bonuses as determined in the discretion of
the Board of Directors of the Bank, which bonuses may be in amounts up to fifty
percent (50%) of Executive's base salary. The payment of any bonus pursuant to
this Section 4(b) shall be contingent upon the following:
(i) Prior to the granting of any bonus to Executive, the
Board of Directors of the Bank shall consider, and
document its findings in the minutes of the meeting
wherein the issue was considered, Executive's
performance in light of the status of the Bank's
internal controls, loan documentation, credit
underwriting, interest rate exposure, asset growth,
asset quality, earnings, and such other performance
goals and objectives mutually agreed upon between
Executive and such Board of Directors at the end of
each calendar year pursuant to Section 4(a) hereof.
(ii) The overall condition of the Bank must be
"satisfactory" in the opinion of the OCC as set forth
in the most current OCC Report of Supervisory
Activity provided to the Board of Directors of the
Bank and the Uniform Financial Institution Rating of
the Bank shall not be less than a "3"; and
(iii) The Bank shall be "adequately capitalized" as under
regulations promulgated by the OCC pursuant to the
Federal Deposit Insurance Corporation Improvement Act
of 1991.
5. TITLE AND DUTIES. Executive shall serve as President and Chief
Executive Officer of the Bank once the OCC has granted preliminary charter
approval and a member of the Interim Board of Directors and the initial Board
of Directors of the Bank. Executive shall run the day-to-day activities of the
Bank and oversee the Bank, within the framework of the approved annual budget,
and with a sound system of internal controls and in compliance with the
policies of the Board of Directors of the Bank, and all applicable laws and
regulations. Executive shall also serve as President of the Company and shall
be nominated as a director of the Company for the term of this Agreement.
6. EXTENT OF SERVICES. Executive shall devote his entire time,
attention and energies to the business of Employer and shall not during the
term of this Agreement be engaged in any other business activity which requires
the attention or participation of Executive during normal business hours of
Employer, recognition being given to the fact that Executive is expected on
occasion to participate in client development after normal business hours.
However, Executive may invest his assets in such form or manner as will not
require his services in the operation of the affairs of the companies in which
such investments are made. Executive shall notify Employer of any significant
participation by him in any trade association or similar organization.
7. WORKING FACILITIES. Executive shall have such assistants,
perquisites, facilities and services as are suitable to his position and
appropriate for the performance of his duties, including membership in one
country or golf club and appropriate civic clubs (including dues, assessments
and initiation fees).
8. EXPENSES. Executive may incur reasonable expenses for promoting
the business of the Bank, including expenses for entertainment, travel, and
similar items. Executive will be reimbursed for all such expenses upon
Executive's periodic presentation of an itemized account of such expenditures.
2
<PAGE> 3
9. VACATIONS. Executive shall be entitled each year to a vacation
in accordance with the personnel policy established by the Bank's Board of
Directors, which vacation shall be not less than fifteen (15) days, during
which time Executive's compensation shall be paid in full.
10. ADDITIONAL COMPENSATION. As additional consideration paid to
Executive, Executive shall be provided with health, hospitalization, disability
and term life insurance, and participation in the Bank's incentive compensation
plan (in the event one is adopted by the Board of Directors of the Bank). In
addition, Executive shall be paid $700 per month as an automobile allowance.
The Company shall also grant to Executive options to purchase one percent (1%)
of the amount of Common Stock of the Company sold in the Company's initial
public offering at a purchase price of $10.00 per share pursuant to the
Company's Incentive Stock Option Plan, as soon as practicable after the Bank
commences business. Fifty percent (50%) of these options shall vest beginning
on the date the Bank commences business; twenty-five percent (25%) shall vest
on the first anniversary of the Bank's opening for business; and twenty-five
percent (25%) shall vest on the Bank's second anniversary. All options shall
be exercisable for a period of seven (7) years from the date of grant.
11. CHANGE IN CONTROL OF THE COMPANY. (a) In the event of a "change
in control" of the Company, as defined herein, Executive shall be entitled, for
a period of thirty (30) days from the date of closing of the transaction
effecting such change in control and at his election, to give written notice to
Employer of termination of this Agreement and to receive a cash payment equal
to one hundred percent (100%) times the compensation, including bonus, if any,
received by Executive in the one-year period immediately preceding the change
in control. The severance payments provided for in this Section 11(a) shall be
paid in cash, commencing not later than ten (10) days after the date of notice
of termination by Executive under this Section 11 or ten (10) days after the
date of closing of the transaction effecting the change in control of the
Company, whichever is later.
(b) For purposes of this Section 11, "change in control" of the
Company shall mean:
(i) any transaction, whether by merger, consolidation,
asset sale, tender offer, reverse stock split, or
otherwise, which results in the acquisition or
beneficial ownership (as such term is defined under
rules and regulations promulgated under the
Securities Exchange Act of 1934, as amended) by any
person or entity or any group of persons or entities
acting in concert, of 50% or more of the outstanding
shares of Common Stock of the Company;
(ii) the sale of all or substantially all of the assets of
the Company; or
(iii) the liquidation of the Company.
12. TERMINATION. (a) FOR CAUSE. This Agreement may be terminated by
the Board of Directors of the Bank without notice and without further
obligation than for monies already paid, for any of the following reasons:
(i) receipt by the Bank of written notice from the OCC
that the OCC has criticized Executive's performance
or his area of responsibility, and has either (a)
rated the Bank a "4" or a "5" under the Uniform
Financial Rating System or (b) has determined that
the Bank is in a "troubled condition" as defined
under Section
3
<PAGE> 4
914 of the Financial Institutions Reform, Recovery
and Enforcement Act of 1989;
(ii) failure of Executive to follow reasonable written
instructions or policies of the Board of Directors of
the Bank;
(iii) gross negligence or willful misconduct of Executive
materially damaging to the business of the Bank
during the term of this Agreement, or at any time
while he was employed by the Bank prior to the term
of this Agreement, if not disclosed to the Bank prior
to the commencement of the term of this Agreement; or
(iv) conviction of Executive during the term of this
Agreement of a crime involving breach of trust or
moral turpitude.
In the event that the Bank discharges Executive alleging
"cause" under this Section 12(a) and it is subsequently determined judicially
that the termination was "without cause," then such discharge shall be deemed a
discharge without cause subject to the provisions of Section 12(b) hereof. In
the event that the Bank discharges Executive alleging "cause" under this
Section 12(a), such notice of discharge shall be accompanied by a written and
specific description of the circumstances alleging such "cause." The
termination of Executive for "cause" shall not entitle the Bank to enforcement
of the non-competition and non-solicitation covenants contained in Section 14
hereof.
(b) WITHOUT CAUSE.
(i) The Bank may, upon thirty (30) days' written notice
to Executive, terminate this Agreement without cause
at any time during the term of this Agreement upon
the condition that Executive shall be entitled, as
liquidated damages in lieu of all other claims, to
the payment of his base salary for a period of six
(6) months and reimbursement for up to $3,000 in fees
incurred in connection with outplacement counseling
or services. The severance payments provided for in
this Section 12(b) shall commence not later than
thirty (30) days after the actual date of termination
of employment of Executive. The termination of
Executive "without cause" shall not entitle the Bank
to enforcement of the non-competition and
non-solicitation covenants contained in Section 14
hereof.
(ii) Executive may upon thirty (30) days' written notice
to Employer terminate this Agreement without cause at
any time during the term of this Agreement. In the
event of termination of this Agreement by Executive,
the Bank shall have no further obligation to
Executive than for monies paid and the Bank shall be
entitled to enforcement of the non-competition and
non- solicitation covenants contained in Section 14
hereof.
(iii) In the event this Agreement is terminated without
cause, whether by Executive or by the Bank, any
stock options or unexercised portion thereof, granted
pursuant to this Agreement, whether or not vested on
the date of termination, may be exercised by Executive
within thirty (30) days from the date of termination
at which time all such options shall expire.
4
<PAGE> 5
13. DEATH OR DISABILITY. In the event of Executive's death,
Employer shall pay to Executive's designated beneficiary, or, if Executive has
failed to designate a beneficiary, to his estate, an amount equal to
Executive's base salary pursuant to Section 4 hereof through the end of the
month in which Executive's death occurred. Such compensation shall be in lieu of
any other benefits provided hereunder, except that (i) in the event of a change
in control of the Company as defined herein, Executive's designated beneficiary
or his estate, as the case may be, shall be entitled to the benefits of Section
11(b) hereof, and (ii) any benefit payable pursuant to Section 4 shall be
prorated and made available to Executive in respect of any period prior to his
death. The Bank may maintain insurance on its behalf to satisfy in whole or in
part the obligations of this Section 13.
In the event of Executive's disability, as hereinafter defined,
Employer shall pay to Executive the base salary then in effect through the end
of the month in which Executive became disabled. Executive shall be deemed
disabled if, by reason of physical or mental impairment, he is incapable of
performing his duties hereunder for a period of sixty (60) consecutive days.
Any dispute regarding the existence, the extent, or the continuance of
Executive's disability shall be resolved by the determination of a duly
licensed and practicing physician selected by and mutually agreeable to both
the Board of Directors of the Bank and Executive; provided, however, if
Executive officially establishes his eligibility to receive social security
disability benefits or is deemed disabled under the terms and conditions of any
disability insurance policy carried on Executive by the Company or the Bank, he
shall be deemed to be disabled as provided herein without further proof.
Executive shall make himself available for and submit to such examinations by
said physician as may be directed from time to time by the physician. Failure
to submit to any such examination shall constitute a material breach of this
Agreement.
14. NON-COMPETITION AND NON-SOLICITATION. (a) Executive acknowledges
that he has performed services or will perform services hereunder which
directly affect Employer's business. Accordingly, the parties deem it
necessary to enter into the protective agreement set forth below, the terms and
condition of which have been negotiated by and between the parties hereto.
(b) In the event of termination of employment under this
Agreement by action of Executive pursuant to 11(b)(ii) prior to the expiration
of the term of this Agreement, Executive agrees with Employer that through the
actual date of termination of the Agreement, and for a period of twelve (12)
months after such termination date, Executive shall not, without the prior
written consent of Employer, within the Primary Service Area of the Bank as set
forth in the Charter Application filed by the Bank with the OCC, either
directly or indirectly, serve as an executive officer of any bank, bank holding
company or other financial institution.
(c) The covenants of Executive set forth in this Section 14 are
separate and independent covenants for which valuable consideration has been
paid, the receipt, adequacy and sufficiency of which are acknowledged by
Executive, and have also been made by Executive to induce Employer to enter
into this Agreement. In the event that a court of competent jurisdiction finds
that Executive has violated the provisions of this Section 14, then, as partial
relief to Employer, all unexercised options granted to Executive pursuant to
Section 10 hereof shall immediately become null and void. Further, each of the
aforesaid covenants may be availed of or relied upon by Employer in any court
of competent jurisdiction, and shall form the basis of injunctive relief and
damages including expenses of litigation (including but not limited to
reasonable attorney's fees) suffered by Employer arising out of any breach of
the aforesaid covenants by Executive. The covenants of Executive set forth in
this Section 14 are cumulative to each other and to all other covenants of
Executive in favor of Employer contained in this Agreement and shall survive
the termination of this Agreement for the purposes intended. Should any
covenant, term, or condition contained in this Section 14 become or be declared
invalid or unenforceable by a court of
5
<PAGE> 6
competent jurisdiction, then the parties may request that such court judicially
modify such unenforceable provision consistent with the intent of this Section
14 so that it shall be enforceable as modified, and in any event the invalidity
of any provision of this Section 14 shall not affect the validity of any other
provision in this Section 14 or elsewhere in this Agreement.
15. NOTICES. Any notice required or desired to be given under this
Agreement shall be deemed given if in writing sent by certified mail to his
residence in the case of Executive, or to its principal office in the case of
Employer.
16. WAIVER OF BREACH. The waiver by Employer of a breach of any
provision of this Agreement by Executive shall not operate or be construed as a
waiver of any subsequent breach by Executive. No waiver shall be valid unless
in writing and signed by an authorized officer of Employer.
17. ASSIGNMENT. Executive acknowledges that the services to be
rendered by him are unique and personal. Accordingly, Executive may not assign
any of his rights or delegate any of his duties or obligations under this
Agreement. The rights and obligations of Executive under this Agreement shall
inure to the benefit of and shall be binding upon the successors and assigns of
Employer.
18. GOVERNING LAW. This Agreement shall be governed and construed in
accordance with the laws of the State of Georgia.
19. ENTIRE AGREEMENT. This Agreement contains the entire
understanding of the parties hereto regarding employment of Executive, and
supersedes and replaces any prior agreement relating thereto. It may not be
changed orally but only by an agreement in writing signed by the party against
whom enforcement of any waiver, change, modification, extension, or discharge
is sought.
6
<PAGE> 7
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
"BANK"
ROCKDALE NATIONAL BANK (PROPOSED)
/s/ Michael P. Jones
By: /s/ Julia W. Morgan
----------------------------------
"COMPANY"
ROCKDALE NATIONAL BANCSHARES, INC.
By: The Board of Directors
/s/ R. Flynn Nance, D.V.M.
-----------------------------------
/s/ Hazel E. Durden
-----------------------------------
/s/ Arthur J. Torsiglieri, Jr.
-----------------------------------
/s/ John A. Fountain
-----------------------------------
/s/ Michael P. Jones
-----------------------------------
/s/ Michael R. Potts
-----------------------------------
/s/ C. Dean Alford
-----------------------------------
/s/ Julia W. Morgan
-----------------------------------
"EXECUTIVE"
/s/ William L. Daniel (L.S.)
-----------------------------
William L. Daniel
7
<PAGE> 1
EXHIBIT 10.2
OPTION AGREEMENT
Date: February 4, 1997
THIS AGREEMENT is made and entered into this 4th day of February, 1997, by and
among Rockdale Group, Inc. ("Buyer"), and Fred Eugene Smith ("Seller").
WITNESSETH:
FOR AND IN CONSIDERATION of the sum of Five Thousand & No/ 100 DOLLARS
($5000.00) (the "Option Consideration"), and other good and valuable
consideration in hand paid to Seller, the receipt and sufficiency whereof are
hereby acknowledged by Seller, Seller hereby grants and conveys unto Buyer for
the term hereof an exclusive and irrevocable option (the "Option") to purchase
that certain real property (together with all improvements, fixtures,
equipment, plants, trees and shrubbery thereon and all appurtenances thereto)
in Rockdale County, Georgia which is more particularly described in Exhibit "A"
of the Purchase and Sale Agreement attached hereto. The executed Purchase and
Sale Agreement, attached hereto and incorporated herein by reference, sets out
the terms and conditions by which the Property shall be conveyed in the event
this option is timely exercised by Buyer. The said Purchase and Sale Agreement
shall become binding only upon the Buyer's timely exercising this option.
The Option Consideration shall be paid by Buyer to Seller in cash
contemporaneously with the execution of this Agreement. The term of the Option
shall begin on the date of this Agreement and shall end at 5:00 P.M. (local
time) on August 4, 1997; if the Option has not been exercised prior to such
time, the Option shall lapse and shall thereafter be of no further force or
effect, whereupon Seller shall retain the Option Consideration and Buyer and
Seller shall have no further rights or obligations under this Agreement. If
Buyer elects to exercise the Option, then Buyer shall deliver to Seller, prior
to the expiration of the Option, at the address of Seller set forth below or at
such other address as Seller may have theretofore provided to Buyer, written
notice of Buyer's election to exercise the Option.
Upon exercising this option, the attached Purchase and Sale Agreement shall be
in full force and effect. Upon closing of the sale and purchase of the Property
pursuant to the Purchase and Sale Agreement, the Option Consideration shall be
crediting against the purchase price of the Property.
Buyer shall have access to the property to perform any and all due diligence
deemed necessary or incidental to Buyer's desired use of subject property.
Time is of the essence of this Agreement. This Agreement shall be binding upon
and shall inure to the benefit of the parties hereto and their respective
heirs, executors, administrators, and successors. The rights and obligations of
Seller and Buyer under this Agreement may be assigned without the prior written
consent of all parties hereto.
IN WITNESS WHEREOF, all parties hereto affix their hands and seals this date.
SELLER:
/s/ Fred Eugene Smith (Seal)
- ------------------------------------------
- ------------------------------------------(Seal)
Address:
----------------------------------
BUYER: Rockdale Group, Inc.
/s/ William L. Daniel, President (Seal)
- ------------------------------------------
/s/ Michael R. Potts (Seal)
- ------------------------------------------
Address:
----------------------------------
1
<PAGE> 2
EXHIBIT "A"
CONTRACT FOR SALE OF PROPERTY
A. PURCHASE AND SALE
The undersigned Purchaser agrees to buy, and the undersigned Seller
agrees to sell all that tract or parcel of land, with such
improvements as are located thereon, described as follows: All that
tract or parcel of land lying and being in Land Lot 238 and 239 of the
10th District of Rockdale County, and being known as See Exhibit "A".
B. PURCHASE PRICE AND METHOD OF PAYMENT
The purchase price of said property shall be:
2.50 Acres ________________DOLLARS ($424,160.00) to be paid as
follows:
All cash at closing. Buyer shall pay purchase price to Seller in cash
or its equivalent. Buyer shall pay all usual and customary closing
costs other than transfer tax.
C. WARRANTY OF TITLE
Seller warrants that he presently has title to said property, and at
the time of closing, he agrees to convey good and marketable title to
said property to Purchaser by the new survey subject only to (1)
zoning ordinances affecting said property, (2) general utility
easements of record serving said property, (3) subdivision
restrictions of record, and (4) leases, other easements, other
restrictions and encumbrances specified in this contract. In the event
leases are specified in the contract, the Purchaser agrees to assume
the Seller's responsibilities thereunder to the tenant and to the
Broker who negotiated such leases.
D. TITLE EXAMINATIONS
The Purchaser shall have a reasonable time after acceptance of this
contract to examine title, to furnish Seller with a written statement
of objections affecting the marketability of said title. Seller shall
have a reasonable time, after receipt of such objections, to satisfy
all valid objections, and if Seller fails to satisfy such valid
objections with a reasonable time, then, at the option of the
Purchaser, evidenced by written notice to Seller, the contract shall
be null and void. Marketable title as used herein shall mean title
which a title insurance company licensed to do business in the State
of Georgia will insure at its regular rates, subject only to standard
exceptions unless otherwise specified herein.
E. DESTRUCTION OF PREMISES
Seller warrants that at the time of closing the premises will be in
the same condition as it is on the date this contract is signed by the
Seller, normal wear and tear accepted. However, should the premises be
destroyed or substantially damaged before time of closing, then at the
election of the Purchaser; (a) the contract may be canceled, or (b)
Purchaser may consummate the contract and receive such insurance as is
paid on the claim of loss. This election is to be exercised within ten
(10) days after the Purchaser has been notified in writing by Seller
of the amount of the insurance proceeds, if any, Seller will receive
on the claim.
F. RESPONSIBILITY TO COOPERATE
Seller and Purchaser agree that such papers as may be necessary to
carry out the terms of this contract shall be produced, executed,
and/or delivered by such parties at time required to fulfill the term
and conditions of this agreement.
G. TIME IS OF THE ESSENCE
H. ASSIGNMENT
This contract shall inure to the benefit of, and be binding upon, the
parties thereto, their heirs, successors, administrators, executors,
and assigns. The interest of the Purchaser in this contract shall not
be transferred or assigned without the written consent of the Seller.
2
<PAGE> 3
I. ENTIRE AGREEMENT
This contract constitutes the sole and entire agreement between the
parties hereto and no modifications of the contract shall be binding
unless attached hereto and signed by all parties to this agreement. No
representation, promise or inducement not included in this contract
shall be binding upon any party hereto.
THE FOLLOWING STIPULATIONS, IF CONFLICTING WITH THE PRECEDING PRINTED MATTER,
SHALL CONTROL.
SPECIAL STIPULATIONS
THIS AGREEMENT IS CONTINGENT UPON THE FOLLOWING CONDITIONS:
- --------------------------------------------------------------------------------
THIS PURCHASE & SALE AGREEMENT SHALL BECOME BINDING UPON THE
PARTIES ONLY WHEN THE BUYER EXERCISES HIS OPTION TO PURCHASE UNDER
THE OPTION AGREEMENT ENTERED INTO BY THE PARTIES SIMULTANEOUSLY
WITH THE EXECUTION OF THIS PURCHASE & SALE AGREEMENT.
- --------------------------------------------------------------------------------
- - The Buyer receives appropriate rezoning for the Buyer's desired use of the
property. Seller agrees to assist and cooperate with the Buyer to obtain
proper zoning.
- - The Buyer receives approval from the Georgia Department of Transportation
for the desired direct access onto Highway 138 and also onto Millers
Chapel Road. Seller agrees to assist and cooperate with the Buyer to
obtain this approval.
- - The Buyer confirming that the property is found suitable for its desired use
and all current environmental requirements are met.
- - The Buyer receives Bank Charter approval from the required regulatory
agencies.
This instrument shall be regarded as an offer by the Purchaser or Seller who
first signs to the other and is open for acceptance by the other until 5:00
o'clock P.M., on the 10th day of February, 1997.
Closing shall occur not later than 180 days after Buyer exercises his option to
purchase as stated in the Option Agreement.
All taxes will be prorated between Buyer and Seller at time of closing.
This proposition hereby accepted this 4th day of February, 1997.
/s/ William L. Daniel
- ----------------------------------------
(Purchaser) Rockdale Group, Inc.
/s/ Michael R. Potts
- ----------------------------------------
(Purchaser)
/s/ Fred Eugene Smith
- ----------------------------------------
(Seller) Fred Eugene Smith
- ----------------------------------------
(Seller)
3
<PAGE> 4
EXHIBIT "B"
Not less than 2.50 acres located at the intersection of Highway 138 and Millers
Chapel Road fronting Highway 138 in Rockdale County, Georgia.
Lot dimensions would be approximately 350' along Highway 138 and approximately
300' along Millers Chapel Road. (See Attached Exhibit "C").
Frontage of property will run the full length and parallel to Highway 138. The
dimension along Millers Chapel Road will be determined by the need to include a
minimum of 2.50 acres.
INITIAL WLD
---------
INITIAL FES
---------
4
<PAGE> 5
EXHIBIT "C"
Map depicting lot dimensions
along Highway 138 and along Millers Chapel Road.
INITIAL WLD
---------
INITIAL FES
---------
5
<PAGE> 1
EXHIBIT 10.3
OPTION AGREEMENT
When using this Option Agreement, the following must be included in the
Purchase & Sale Agreement Special Stipulations: "This Purchase & Sale Agreement
shall become binding upon the parties only when the Buyer exercises his option
to Purchase under the Option Agreement entered into by the parties
simultaneously with the execution of this Purchase & Sale Agreement."
THIS AGREEMENT is made and entered into this 14th day of January, 1997, by and
among, Colony Properties, Realtors ("Broker"), Rockdale Group, Inc. ("Buyer"),
and _____________ ( Seller ).
WITNESSETH:
FOR AND IN CONSIDERATION of the sum of Five thousand & 00/100 DOLLARS
($5,000.00) (the "Option Consideration ), and other good and valuable
consideration in hand paid to Seller, the receipt and sufficiency whereof are
hereby acknowledged by Seller, Seller hereby grants and conveys unto Buyer for
the term hereof an exclusive and irrevocable option (the "Option") to purchase
that certain real property (together with all improvements, fixtures,
equipment, plants, trees and shrubbery thereon and all appurtenances thereto)
in Rockdale County, Georgia, which is more particularly described in Exhibit
"A" of the Purchase and Sale Agreement attached hereto. The executed Purchase
and Sale Agreement, attached hereto and incorporated herein by reference, sets
out the terms and conditions by which the Property shall be conveyed in the
event this option is timely exercised by Buyer. The said executed Purchase and
Sale Agreement shall become binding only upon the Buyer's timely exercising
this option.
The Option Consideration shall be paid by Buyer to Seller in cash
contemporaneously with the execution of this Agreement. The term of the Option
shall begin on the date of this Agreement and shall end at 6:00 P.M. (local
time) on July 14, 1997; if the Option has not been exercised prior to such
time, then the Option shall lapse and shall thereafter be of no further force
or effect, whereupon Seller shall retain the Option Consideration and Buyer and
Seller shall have no further rights or obligations under this Agreement. If
Buyer elects to exercise the Option, then Buyer shall deliver to Seller, prior
to the expiration of the Option, at the address of Seller set forth below or at
such other address as Seller may have theretofore provided to Buyer, written
notice of Buyer's election to exercise the Option.
Upon exercising this option, the attached Purchase and Sale Agreement shall be
in full force and effect. Upon closing of the sale and purchase of the
Property pursuant to the Purchase and Sale Agreement, the Option Consideration
shall be credited against the purchase price of the Property.
Broker is made a party to this Agreement in order that Broker may enforce its
rights hereunder. For services rendered in connection with this Agreement,
Seller agrees to pay to Broker a fee in the sum of 5% of selling price DOLLARS
($_______________) payable contemporaneously with the execution of this
Agreement. Seller and Buyer represent and warrant to each other that each has
not engaged any real estate broker or agent other than Broker in connection
with this Agreement, and Seller and Buyer shall hold each other harmless from
and against all loss and damage (including without limitation court costs and
reasonable attorney's fees) suffered or incurred by the other on account of any
claim by any broker or agent other than Broker for any commission or other
compensation relating to this Agreement.
Time is of the essence of this Agreement. This Agreement shall be binding upon
and shall inure to the benefit of the parties hereto and their respective
heirs, executors, administrators, and successors. The rights and obligations
of Seller and Buyer under this Agreement may be assigned without the prior
written consent of all parties hereto.
IN WITNESS WHEREOF, all of the parties hereto affix their hands and seals this
date.
<TABLE>
<S> <C>
Dated: January 14, 1997
As to Seller,
Signed, sealed and delivered in the presence of: Seller: (Seal)
---------------------------------
Witness: (Seal)
--------------------------------------------- ----------------------------------------
Notary Public: Address:
--------------------------------------- --------------------------------
As to Buyer,
Signed, sealed and delivered in the presence of: Buyer: Rockdale Group, Inc. (Seal)
Witness: /s/ Michael P. Jones, Chairman (Seal)
--------------------------------------------- ----------------------------------------
Notary Public: /s/ Mary Ann Roberts Address: 1498 Klondike Road
--------------------------------------- Conyers, Georgia 30207
As to Broker,
Signed, sealed and delivered in the presence of: Broker: (Seal)
---------------------------------
Witness: (Seal)
--------------------------------------------- ----------------------------------------
Notary Public: Address:
--------------------------------------- --------------------------------------
</TABLE>
1
<PAGE> 2
PURCHASE AND SALE AGREEMENT
Date: January 14, 1997
PURCHASE AND SALE. As a result of the efforts of N/A, a licensed Broker
(hereinafter referred to as "Selling Broker") and Colony Properties, Realtors, a
licensed Broker (hereinafter referred to as "Listing Broker"; Listing Broker and
Selling Broker being hereinafter sometimes collectively referred to as
"Broker"), the undersigned Buyer agrees to buy, and the undersigned Seller
agrees to sell all that tract or parcel of land, with such improvements as are
located thereon, described as follows:
All that tract of land lying and being in and Lot 302 of the 10th District,
_________ Section of Rockdale County, Georgia and being known as Address 1600
Highway 20 North, City Conyers Zip Code 30207 Multiple Listing #
___________________ according to the present system of numbering in and around
this area, being more particularly described as Lot 53, Block B, Unit 3,
Phase/Section _____ of ____________________ subdivision, as recorded in Plat
Book _________________, Page ______________, _________________ County, Georgia
records together with all lighting fixtures, all electrical, mechanical,
plumbing, air-conditioning, and any other systems or fixtures as are attached
thereto; all plants, trees, and shrubbery now a part thereof, together with all
the improvements thereon; and all appurtenances thereto, all being hereinafter
collectively referred to as the "Property." The full legal description of said
Property is the same as is recorded with the Clerk of the Superior Court of the
County in which the Property is located and is made a part of this agreement by
reference.
PURCHASE PRICE AND METHOD OF PAYMENT. Buyer warrants and represents that at the
time of closing Buyer will have sufficient cash (together with the loans or
loans, if any, as described herein) to complete the purchase contemplated herein
and that Buyer (according to his actual current knowledge) [ ] does ("Sale of
Buyer's Property Contingency Exhibit" attached) or MPJ does not have real
property to sell or lease in order to complete the purchase contemplated herein
and in the event of a "does not" selection above, Buyer further warrants that
failure to sell the current residence or any other property will not be grounds
for refund of earnest in the event of loan denial.
The purchase price of said Property shall be:
Three hundred fifty thousand & 00/100 Dollars, (U.S.) $350,000.00 to be paid as
set forth in sub-paragraph A, B or C [Select A, B or C below. The others are
not a part of this Agreement]:
/x/ A. ALL CASH AT CLOSING: At Closing, Buyer shall pay purchase
price to Seller in cash, or its equivalent. Buyer's obligation
to close shall not be contingent upon Buyer's ability to obtain
financing. Buyer shall pay all usual and customary closing costs.
/ / B. WHERE LOAN IS TO BE ASSUMED, see Exhibit "_____" attached hereto
and by reference made a part hereof.
/ / C. WHERE NEW LOAN IS TO BE OBTAINED: Buyer shall immediately
disclose to Broker, upon loan application, the name(s) of the
lender(s) with which Buyer has applied.
(1) LOAN TERMS: This Agreement is made conditioned upon Buyer's
"ability to obtain" (as hereinafter defined) a loan in the principal
amount of ___% of the purchase price or $__________, to be secured by a
first lien security deed on the within described Property; said loan to
be paid in consecutive monthly installments of principal and interest
over a term of not less than ____ years. Initial monthly payments of
principal and interest shall not be more than $__________. "Ability to
obtain" as used herein means that Buyer is qualified to receive the loan
described herein based upon lender's customary and standard
underwriting criteria. Proceeds of said loan, together with any balance
of such purchase price, shall be paid in cash or its equivalent by Buyer
to Seller at closing. This loan shall be a [Select (a), (b), (c), or
(d) below. The others are not a part of this Agreement]:
(a) / / FIXED RATE MORTGAGE LOAN with an interest rate of not more
than ___% per annum on the unpaid principal balance.
(b) / / ADJUSTABLE RATE MORTGAGE ("ARM") LOAN with an interest
rate of not more than ___% per annum on the unpaid
principal balance. The interest rate payable to lender by
Buyer may increase or decrease according to the terms of
said loan, and as a result, the monthly installments of
principal and interest payable by Buyer may increase or
decrease.
(c) / / FHA OR VA LOAN with an initial interest rate of not more
than ___% per annum on the unpaid principal balance, see
Exhibit "___", attached hereto and by reference made a
part hereof.
(d) / / OTHER LOAN, see Exhibit "___", attached hereto and by
reference made a part hereof.
(2) CLOSING COSTS: Buyer shall pay all usual and customary
closing costs for said loan in a sum not to exceed 2.0% of said loan
amount. Buyer shall pay any usual and customary closing costs
exceeding said sum. -0- shall pay the cost of any required survey.
(3) LOAN DISCOUNT: ---- shall pay any Loan
Discount payable in connection with said loan in a sum not to exceed
---- % of said loan amount.
(4) PRIVATE MORTGAGE INSURANCE: The initial Private
Mortgage Insurance Premium, if any, for said loan and any portion of
private mortgage insurance premium, which is required by lender to be
spread over subsequent monthly payments, shall be paid by Buyer.
(5) FLOOD INSURANCE: If flood insurance is desired by
Buyer, or required by Buyer's lender, Buyer shall pay for flood
insurance.
(6) APPLICATION AND ESCROW DEPOSITS: Buyer agrees to make
application for said loan within ----- ( -- ) calendar days
from Binding Agreement Date, to pursue said application diligently and
in good faith, to execute all papers, to provide all documents, to
perform all other actions necessary to obtain said loan and to accept
such loan if approved by a lender. Should Buyer not apply for said loan
in the time specified above, Seller may, upon written notification to
Buyer, declare Buyer in default and Buyer thereafter shall have 5
calendar days to cure said default by providing Seller with written
evidence of formal loan application. If required by lender, Buyer
shall, in addition to the payment of principal and interest upon said
loan, pay at closing the amount of money necessary to establish an
escrow account and shall also pay, along with each monthly payment of
principal and interest, one-twelfth of the annual ad valorem taxes and
hazard insurance premiums for the Property, as estimated by lender.
Buyer shall also pay each month the private mortgage insurance amount if
required by lender.
(7) LOAN OPTIONS: Buyer understands and acknowledges the
possibility that many different loan programs, available from many
different lenders, may well fit within the description of the loan set
forth herein. No attempt has been made by Buyer to describe exactly all
of the particular terms and conditions of said loan. The economics of
this transaction, as bargained for by the parties, are such that Buyer
agrees that a loan with terms consistent with those described herein
shall be acceptable to Buyer and shall satisfy this loan contingency.
Buyer, at his option and without voiding this agreement, may also apply
for a loan with different terms and conditions and close the transaction
provided (a) all other terms and conditions of this Agreement are
fulfilled; and (b) the new loan does not increase the costs charged to
the Seller. Buyer shall be obligated to close this transaction if Buyer
has the ability to obtain a loan with terms as described herein and/or
any other loan for which Buyer has applied and been approved.
(8) BUYER'S LOAN RESPONSIBILITY: Buyer acknowledges and
represents that he has not relied upon the advice or representations, if
any, of Broker or Broker's Affiliated Licensees regarding the type of
loan or the terms of any particular loan program to be obtained by
Buyer. Buyer shall have the responsibility of independently
investigating and choosing the lender, type of loan, and loan program to
be applied for by Buyer in connection with Purchase Price and Method of
Payment paragraph. Buyer agrees to hold harmless listing broker,
selling broker and their affiliated licensees, from any claim or loss
whatsoever arising out of Buyer's application and commitment for any
loan, and with respect to the terms of the instruments evidencing or
securing said loan.
2
<PAGE> 3
..............
inspection of the main dwelling from a licensed pest control
operator. If visible evidence of active or previous infestation is
indicated, Seller agrees, prior to closing, to (A) treat said
infestation and correct structural damages resulting from said
infestation and provide documentation evidencing correction of same
and/or provide documentation, satisfactory to lender (if applicable),
indicating that there is no structural damage resulting from any
previous infestation. Seller, at closing shall provide a letter on a
standard form in accordance with the regulations of the Georgia
Structural Pest Control Commission, stating that the main dwelling has
been inspected and found to be free from visible evidence of active
infestation caused by termite or other wood destroying organisms.
8. SEWER/SEPTIC TANK AND PUBLIC WATER/WELL. Any lender imposed
inspection(s) of the septic tank or well systems shall be obtained and paid for
by Buyer. Seller warrants that the main dwelling on the above described
Property is served by:
<TABLE>
<S> <C> <C>
A. Public Sewer MPJ / or Septic Tank / or Private Sewer /
-------------- --------------- ------------- ------------ ------------- ---------
B. Public Sewer MPJ / or Septic Tank / or Private Sewer /
-------------- --------------- ------------- ------------ ------------- ---------
(Buyer Initial) (Seller Initial) (Buyer Initial) (Seller Initial) (Buyer Initial) (Seller Initial)
</TABLE>
9. HOME WARRANTY PROGRAM. Buyer acknowledges that a home warranty may be
available for the main dwelling at an additional cost.
10. TITLE.
A. Examination. Buyer shall have a reasonable time after
the Binding Agreement Date to examine title and to furnish Seller with a
written statement of objections affecting the marketability of said
title. Seller shall have a reasonable time after receipt of such
objections to satisfy all valid objections. If Seller fails to satisfy
such valid objections within a reasonable time, then, at the option of
Buyer evidenced by written notice to Seller, this Agreement shall be
null and void. Marketable title as used herein shall mean title which a
title insurance company licensed to do business in the State of Georgia
will insure at its regular rates, subject only to standard exceptions
unless otherwise specified herein.
Buyer acknowledges that owner's title insurance may be purchased at
closing, at Buyer's expense.
B. WARRANTY. Seller warrants that he presently has title
to said Property. At the time of closing, Seller agrees to convey good
and marketable title to said Property by general warranty deed subject
only to (1) zoning ordinances affecting said Property, (2) general
utility, sewer, and drainage easements of record upon which the
improvements do not encroach, (3) subdivision easements and restrictions
of record, and (4) leases, other easements, other restrictions and
encumbrances specified in this Agreement. In the event leases are
specified in this Agreement, Buyer agrees to assume Seller's
responsibilities thereunder to the tenant and to the broker who
negotiated such leases.
11. BROKERAGE. In negotiating this Agreement, Broker has rendered a
valuable service for which reason Broker is made a party to enable Broker to
enforce his commission rights hereunder against the parties hereto on the
following basis: Seller agrees to pay Broker the full commission when the sale
is consummated. In the event the sale is not consummated because of Seller's
inability, failure or refusal to perform any of Seller's covenants herein, then
Seller shall pay the full commission to Broker immediately, and Broker, at the
option of Buyer, shall return the earnest money to Buyer. Buyer agrees that if
Buyer fails or refuses to perform any of Buyer's covenants herein, Buyer shall
forthwith pay Broker the full commission immediately; provided that Broker may
first apply one-half of the earnest money toward payment of, but not to exceed,
the full commission and may pay the balance thereof to Seller as liquidated
damages to Seller, if Seller claims balance as Seller's liquidated damages in
full settlement of any claim for damages, whereupon Broker will be released
from any and all liability for return of the earnest money to Buyer.
Commission to be paid in connection with this Agreement has been negotiated
between Seller and Broker and shall be $___________________, ____% of the
Purchase Price, due and payable upon transfer of title (closing) or as
otherwise provided herein. In the event this sale is _____ in cooperation with
another Broker, Selling Broker shall receive 5.0% and Listing Broker shall
receive *% of the total real estate commission paid hereunder or as otherwise
provided herein. *Buyer discount of 5.0%.
12. AGENCY DISCLOSURE. In this transaction, the Listing Broker (if any)
has acted for Seller and the Selling Broker's relationship with the parties to
this Agreement is as specified in the attached Exhibit. Either the "Agency
Exhibit" or the "Transaction Broker Exhibit" is attached and made a part hereof
by reference hereto.
13. CLOSING AND POSSESSION.
A. TAXES: Real estate taxes on said Property for the calendar
year in which the sale is closed shall be prorated as of the
date of closing.
B. TRANSFER TAX: Seller shall pay State of Georgia property
transfer tax.
C. CLOSING DATE: This transaction shall be closed on or before
July 14, 1997, provided however that in the event the loan
described in Purchase Price and Method of Payment Paragraph
hereinabove is unable to be closed on or before said date or (2)
that Seller fails to satisfy valid title objections, either
Buyer or Seller may, at his option, by written notice to the
other party, extend the Agreement's closing date seven (7)
calendar days from the above-stated closing date. D.
Possession: Buyer agrees to allow Seller to retain possession
of the Property until midnight July 14, 1997 (____) day(s) ____
after closing. In the event that Seller retains possession of
the Property beyond the day of closing, Seller does hereby
guarantee that at the date of surrender of occupancy by the
Seller, the Property shall be in the same condition as of the
day of closing.
E. PROPERTY DELIVERY CONDITION: Seller shall deliver Property
clean and free of debris at time of possession.
F. PRORATIONS: Seller and Buyer agree to prorate between
themselves, as of the date of closing or the day of surrender
of the Property by the Seller (whichever is the later),
association fees (if mandatory) and all utility bills
rendered subsequent to closing which include service for any
period of time the Property was owned/occupied by Seller or any
prior owner/occupant.
G. CLOSING CERTIFICATIONS: Buyer and Seller agree (1) to comply
with and (2) to execute and deliver such certifications,
affidavits, and statements as are required at the closing in
order to meet the requirements of Internal Revenue Code
Section 1445.
14. ASSOCIATION/ASSESSMENT FEES. Unless otherwise stated in an
Association/Assessment Fee Exhibit, there are no mandatory association fees,
nor any special assessment(s).
15. OTHER PROVISIONS.
A. BINDING EFFECT. The terms, covenants and conditions of this
Agreement shall inure to the benefit of, and be binding upon,
the parties hereto, their heirs, successors, legal
representatives and permitted assigns.
B. TRANSFER OR ASSIGNMENT. This Agreement shall not be
transferred or assigned without the written consent of all
parties to this Agreement, and any permitted assignee shall
fulfill all the terms and conditions of this Agreement.
C. SURVIVAL OF AGREEMENT. Any condition or stipulation not
fulfilled at time of closing shall survive the closing,
execution and delivery of the Warranty Deed until such time as
said conditions or stipulations are fulfilled.
D. MODIFICATION. This Agreement may not be modified, altered or
amended except by written instrument executed by the parties
hereto.
E. ENTIRE AGREEMENT. This Agreement constitutes the sole and
entire agreement between the parties hereto and no modification
of this Agreement shall be binding unless signed by all parties
to this Agreement. No representation, promise, or inducement
not included in this Agreement shall be binding upon any party
hereto.
F. GOVERNING LAW. This Agreement is made and entered into as a
contract for the purchase and sale of real property to
be interpreted under, governed and enforced according to the
laws of the State of Georgia.
G. TERMINOLOGY AND CAPTIONS. All pronouns, singular, plural,
masculine, feminine or neuter, shall mean and include the
person, entity, __________, or corporation to which they relate
as the context may require. Wherever the context may
require, the singular shall mean and include the plural, and the
plural shall mean and include the singular. The term
"Agreement" as used herein, as well as the terms "herein,"
"hereof," "hereunder," "hereinafter" and the like mean this
Agreement in its entirety and all exhibits, amendments and
addenda attached hereto and made a part hereof. The captions
and paragraph headings are for reference and convenience only
and do not enter into or become a part of the context of this
agreement.
3
<PAGE> 4
16. RESPONSIBILITY TO COOPERATE. All parties agree that such documentation
as is reasonably necessary to carry out the responsibilities and obligations of
this Agreement shall be produced, executed and/or delivered by said parties
within time required to fulfill the terms and conditions of this Agreement.
17. ALTERNATE DISPUTE RESOLUTION AVAILABLE. All parties to this Agreement
acknowledge that, in the event a dispute arises after execution of this
Agreement, there are alternatives to litigation through alternate dispute
resolution methods, such as mediation and binding arbitration, provided all
parties agree in writing to employ such methods. In the event that the parties
agree to resolve any disputes which may arise after execution of this Agreement
through binding arbitration, they will enter into a separate Arbitration or
Mediation Agreement.
18. TIME IS OF THE ESSENCE. Time is of the essence of this Agreement.
19. NOTICES. Except as may otherwise be provided for in this Agreement,
all notices or demands required or permitted hereunder shall be delivered
either (A) in person; (B) by overnight delivery service prepaid; (C) by
facsimile (FAX) transmission; or (D) by the United States Postal Service,
postage prepaid, registered or certified, return receipt requested. Such
notices shall be deemed to have been given as of the date and time the same are
actually received by Broker or Broker's Affiliated Licensee or receiving party.
In the event that any notice, demand, information, or disclosure is required by
the terms of this Agreement to be given by a party to "Broker," such Broker
shall be deemed to be the Broker or Affiliated Licensee, if any, for the other
party, and if none, then directly to the other party.
20. DISCLAIMER.
A. INDEPENDENT EXPERT ADVICE: Seller and Buyer acknowledge that
they have not relied upon the advice or representations of Broker or
Broker's Affiliated Licensees, including but not limited to: legal and
tax consequences of this Agreement in the sale of the Property; the
terms and conditions of financing; the purchase and ownership of the
Property; the structural condition of the Property; the operating
condition of the electrical, heating, air conditioning, plumbing, water
heating systems, pool, spa and appliances in the Property; the
availability of utilities to the Property; the investment potential or
resale value of the Property; the availability and ownership of amenity
package, if applicable; restrictive covenants and architectural
controls; or any other system or condition enumerated in the "Inspection
of Property" paragraph above or any other condition or circumstance
which may adversely affect the Property. Seller and Buyer acknowledge
that if such, or similar, matters have been of concern to them, they
have sought and obtained independent advice relative thereto. Buyer
acknowledges that closing shall constitute acceptance of the Property
unless provision is otherwise made in writing.
B. PROPERTY CONDITIONS: Seller and Buyer acknowledge that various
substances used in the construction of the improvements on the Property
or otherwise located on the Property may now or in the future be
determined to be toxic, hazardous or undesirable and may need to
be specially treated, handled and/or removed from the Property. Persons
who have an interest in the Property may be required by law to undertake
the clean-up of such substances. Buyer and Seller acknowledge that:
Brokers have no expertise with respect to toxic wastes, hazardous
substances or undesirable substances; and Brokers shall have no
liability to Seller or Buyer regarding the presence of said substances
on the Property. Seller and Buyer release Broker and Broker's
Affiliated Licensees from any claim, rights of action or suits relating
to the presence of any hazardous substances, toxic wastes, or
undesirable substances on the Property.
21. INSTRUCTIONS TO CLOSING ATTORNEY. Closing Attorney is instructed to:
(A) transfer "Survival of Agreement" paragraph to the closing statement; (B)
obtain and distribute to and from the appropriate parties such certifications,
affidavits, and statements as are required in order to meet the requirements of
Internal Revenue Code Section 1445 (Foreign/Non-Foreign Sellers), or in the
alternative to disburse and hold the sales proceeds in such a manner as may be
required to comply with Internal Revenue Code Section 1445; (C) file with the
Internal Revenue Service the IRS Form 1099B documenting this transaction, and
comply with any other reporting requirements related thereto.
22. EXHIBITS AND ADDENDA. In the event Personal Property shall remain with
the property, the same shall be set out in a Bill of Sale attached hereto and
made a part of this Agreement by reference thereto. The following Exhibits
and/or Addenda are attached hereto and by reference made a part hereof:
"Agency Exhibit" or "Transaction Broker Exhibit"
SPECIAL STIPULATIONS: The following stipulations, if conflicting with any
preceding paragraph, shall control:
1. 5.0% of sale commission has been considered in the offer price.
/ / Special Stipulations Continued and made a part hereof.
Time Limit of Offer.
This instrument shall be open for acceptance until 6 o'clock P.M., on the 16th
day of January, 1997.
Acceptance Date
The above proposition is hereby accepted, _____ o'clock __M, on the __ day of
____, 199__.
BINDING AGREEMENT DATE
This instrument shall become a binding Agreement when written acceptance
thereof, or a facsimile (FAX) transmission of the accepted instrument is
actually received by Broker, Broker's Affiliated Licensees, or Offeror. Upon
receipt of acceptance, the other party, Broker or Broker's Affiliated Licensee
shall be notified immediately.
<TABLE>
<S> <C>
N/A ( )
- -------------------------------- -------------- -----------------------------------------------------
Selling Broker MLS Office Code Buyer's Signature:
Print or Type Name: Rockdale Group, Inc.
By: /s/ Michael P. Jones, Chairman
------------------------------------------ ----------------------------------------------
Broker or Broker's Affiliated Licensee Buyer's Signature:
Print or Type Name: Print or Type Name: Michael P. Jones
-------------------- ---------------------------
Bus. Phone FAX #
----------------- ------------
( )
- ------------------------------ ------------- ----------------------------------------------
Listing Broker MLS Office Code Seller's Signature:
Print or Type Name:
-------------------------
By:
----------------------------------------- ----------------------------------------------
Broker or Broker's Affiliated Licensee Seller's Signature:
Print or Type Name: Print or Type Name:
------------------- ---------------------------
Bus. Phone FAX #
----------------- -----------
</TABLE>
4
<PAGE> 1
EXHIBIT 23.2
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
We hereby consent to the use in this Registration Statement on Form SB-2 of our
report dated February 28, 1997, relating to the financial statements of
Rockdale National Bancshares, Inc., a development stage corporation, and to the
reference to our firm under the caption "Experts" in the Prospectus.
BRICKER & MELTON, P.A.
March 28, 1997
Duluth, Georgia
