<PAGE> 1
As filed with the Securities and Exchange Commission on April 14, 1997.
Registration No. ________
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------------------
FORM SB-2
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
----------------------------
PEOPLE'S COMMUNITY CAPITAL CORPORATION
(Exact name of registrant as specified in its charter)
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<S> <C>
South Carolina 6021 58-2287073
- ------------------------------- ---------------------------- ------------------------------------
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer Identification No.)
incorporation or organization) Classification Code Number)
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P.O. Box 313
Aiken, South Carolina 29802
803-641-2265
(Address, including zip code, and telephone
number, including area code, of
registrant's principal executive offices)
----------------------------
Tommy B. Wessinger
Chief Executive Officer
P.O. Box 313
Aiken, South Carolina 29802
803-641-2265
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
----------------------------
Copies of all communications, including copies of all communications
sent to agent for service, should be sent to:
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Tommy B. Wessinger Neil E. Grayson, Esq.
People's Community Capital Corporation Nelson Mullins Riley & Scarborough, L.L.P.
P.O. Box 313 999 Peachtree Street, N.E., Suite 1400
Aiken, South Carolina 29802 Atlanta, Georgia 30309
803-641-2265 (404) 817-6000
803-641-7555 (Fax) (404) 817-6225 (Fax)
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after this Registration Statement becomes effective.
If any of the securities being registered on this form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ] 33-_________________
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ] 33-_________________
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box.
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CALCULATION OF REGISTRATION FEE
================================================================================================================================
PROPOSED MAXIMUM
PROPOSED MAXIMUM OFFERING AMOUNT OF
TITLE OF EACH CLASS OF AMOUNT TO BE OFFERING AGGREGATE REGISTRATION
SECURITIES TO BE REGISTERED REGISTERED PRICE PER SHARE PRICE(1) FEE
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Common Stock, $.01 par value........... 1,200,000 $10.00 $12,000,000 $3,637
================================================================================================================================
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(1) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(a) under the Securities Act of 1933.
The registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the registrant
shall file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to such Section 8(a),
may determine.
================================================================================
<PAGE> 2
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR
MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT
BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR
THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE
SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE
UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS
OF ANY SUCH STATE.
SUBJECT TO COMPLETION, DATED APRIL 14, 1997
PROSPECTUS
PEOPLE'S COMMUNITY CAPITAL CORPORATION
A PROPOSED HOLDING COMPANY FOR
PEOPLE'S COMMUNITY BANK OF SOUTH CAROLINA
1,200,000 SHARES OF COMMON STOCK
---------------------
This Prospectus relates to the offer of a minimum of 610,000 and a maximum
of 1,200,000 shares of common stock, par value $.01 per share (the "Common
Stock"), to be issued by People's Community Capital Corporation, a South
Carolina corporation (the "Company"), which has been organized to own all of the
capital stock of People's Community Bank of South Carolina (the "Bank").
Sale of the Common Stock will commence on or about April 14, 1997. This is
a "best efforts" offering by the Company, and it will be terminated by the
Organizers upon the sale of 1,200,000 shares or June 30, 1997, whichever occurs
first, unless the offering is extended, at the discretion of the Company, for
additional periods ending no later than December 31, 1998. However, the
Organizers reserve the right to terminate the offering at any time after the
sale of the minimum offering of 610,000 shares. Subscriptions are binding on
subscribers and may not be revoked by subscribers without the consent of the
Company.
Prospective investors should carefully review the Prospectus before
subscribing for shares. SUBSCRIBERS MUST WARRANT IN THE SUBSCRIPTION AGREEMENT
THAT THEY HAVE RECEIVED A COPY OF THIS PROSPECTUS. See "The Offering -- How to
Subscribe." The Company has established a minimum subscription of 100 shares and
a maximum subscription by any subscriber of 4.9% of the total number of shares
sold in the offering. However, the Organizers reserve the right to waive these
limits without notifying any subscriber. In addition, the Organizers reserve the
right to purchase up to 100% of the shares of stock being offered hereunder if
necessary to complete the offering. Proceeds of the offering will be deposited
in an escrow account at The Bankers Bank, as escrow agent, pending receipt of
subscriptions and subscription proceeds for a minimum of 610,000 shares and
satisfaction of certain other conditions of the offering. Any subscription
proceeds accepted after satisfaction of the conditions set forth above but
before termination of this offering will not be deposited in escrow but will be
available for immediate use by the Company to fund offering and organizational
expenses and for working capital. See "The Offering -- Conditions of the
Offering and Release of Funds."
INVESTMENT IN THESE SECURITIES INVOLVES SIGNIFICANT RISK. SEE "RISK
FACTORS" BEGINNING ON PAGE 6 OF THIS PROSPECTUS FOR A DISCUSSION OF CERTAIN
FACTORS THAT SHOULD BE CONSIDERED BY PROSPECTIVE PURCHASERS OF THE COMMON STOCK
OFFERED HEREBY.
---------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE COMMISSION OR
ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
THE SHARES OF COMMON STOCK OFFERED HEREBY ARE NOT DEPOSITS OR SAVINGS ACCOUNTS
OR SAVINGS DEPOSITS AND ARE NOT INSURED OR GUARANTEED BY THE FEDERAL DEPOSIT
INSURANCE CORPORATION OR ANY OTHER GOVERNMENTAL AGENCY.
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=======================================================================================================================
PRICE TO UNDERWRITING DISCOUNTS PROCEEDS TO THE
PUBLIC(1) AND COMMISSIONS(2) COMPANY(3)
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Per Share.................................... $10.00 None $10.00
- -----------------------------------------------------------------------------------------------------------------------
Total (Minimum).............................. $ 6,100,000 None $6,100,000
(Maximum).............................. $12,000,000 None $12,000,000
=======================================================================================================================
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(1) The offering price has been arbitrarily established by the Company. See
"Risk Factors -- Offering Price."
(2) This offering is expected to be made on behalf of the Company primarily by
its directors and executive officers, to whom no commission or other
compensation will be paid on account of such activity, although they will be
reimbursed for reasonable expenses incurred in the offering. The Company
believes such officers and directors will not be deemed brokers under the
Securities Exchange Act of 1934 (the "Exchange Act") based on reliance on
Rule 3a4-1 of the Exchange Act. See "The Offering."
(3) Before deducting expenses related to this offering and the organization of
the Company, estimated to be approximately $75,000. See "Use of
Proceeds -- By the Company."
---------------------
The date of this Prospectus is , 1997.
<PAGE> 3
REPORTS TO SHAREHOLDERS
The Company is not a reporting company as defined by the Securities and
Exchange Commission (the "SEC"). The Company will furnish its shareholders with
annual reports containing audited financial information for each fiscal year and
will distribute quarterly reports for the first three quarters of each fiscal
year containing unaudited summary financial information. The Company's fiscal
year ends on December 31.
ADDITIONAL INFORMATION
The Company has filed with the SEC a Registration Statement under the
Securities Act of 1933 with respect to the Common Stock offered hereby. This
Prospectus does not contain all of the information set forth in the Registration
Statement. For further information with respect to the Company and the Common
Stock, please see the Registration Statement and the exhibits thereto. The
Registration Statement may be examined at, and copies of the Registration
Statement may be obtained at prescribed rates from, the Public Reference Section
of the Commission, Room 1024, 450 Fifth Street, N.W., Washington, D.C. 20549.
The SEC also maintains a Web site (http://www.sec.gov) that contains reports,
proxy and information statements and other information regarding registrants,
such as the Company, that file electronically with the Commission.
The Company and the Organizers have filed or will file various applications
with the Federal Reserve Bank of Richmond and the South Carolina State Board of
Financial Institutions. Prospective investors should rely only on information
contained in this Prospectus and in the Company's related Registration Statement
in making an investment decision. To the extent that other available information
not presented in this Prospectus, including information available from the
Company and information in public files and records maintained by the Federal
Reserve Bank of Richmond and the South Carolina State Board of Financial
Institutions, is inconsistent with information presented in this Prospectus,
such other information is superseded by the information presented in this
Prospectus. Projections appearing in the applications were based on assumptions
that the Organizers believed were reasonable, but as to which no assurances can
be made. The Company specifically disaffirms those projections for purposes of
this Prospectus and cautions prospective investors against placing reliance on
them for purposes of making an investment decision.
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<PAGE> 4
SUMMARY
The following summary is qualified in its entirety by the more detailed
information contained elsewhere in this Prospectus.
THE SHARES OF COMMON STOCK OFFERED HEREBY ARE NOT DEPOSITS OR SAVINGS ACCOUNTS
OR SAVINGS DEPOSITS AND ARE NOT INSURED OR GUARANTEED BY THE FDIC OR ANY OTHER
GOVERNMENTAL AGENCY.
THE COMPANY
People's Community Capital Corporation, a South Carolina corporation (the
"Company"), was incorporated primarily to hold all of the capital stock of its
proposed state banking subsidiary, People's Community Bank of South Carolina
(the "Bank"). The Company may not acquire the capital stock of the Bank without
the prior approval of the Federal Reserve Bank of Richmond (the "Federal
Reserve"), as delegate of the Board of Governors of the Federal Reserve System
(the "Federal Reserve Board"), and the South Carolina State Board of Financial
Institutions (the "South Carolina Bank Board"). The Company initially will
engage in no business other than owning and managing the Bank.
THE BANK
The Organizers (as defined below) filed an application with the South
Carolina Bank Board in March 1997 to charter the Bank as a state chartered bank.
The Organizers expect to obtain preliminary approval of the Bank's application
for a charter in July 1997. The issuance of a charter will depend, among other
things, upon compliance with certain legal requirements that may be imposed by
the South Carolina Bank Board, including capitalization of the Bank with at
least a specified minimum amount of capital, which the Organizers believe will
be $6,000,000. Additionally, the Company must obtain the approval of the Federal
Reserve to become a bank holding company before acquiring the capital stock of
the Bank.
The Bank will engage in a general commercial and retail banking business,
emphasizing the needs of small-to medium-sized businesses, professional
concerns, and individuals, primarily in Aiken and North Augusta, South Carolina
and the surrounding areas. The Bank will initially consist of a main office in
the City of Aiken and a branch office in North Augusta, South Carolina. Tommy B.
Wessinger, who will be the Chairman and Chief Executive Officer of the Company
and the Bank, and Alan J. George, who will be the President of the Company and
President and Chief Operating Officer of the Bank, together have over 50 years
of banking experience, most of which was acquired while serving the Aiken County
market. See "Management." The Organizers presently are engaged in completing the
tasks necessary to open the Bank by the August 1997, although no assurances can
be given that the Bank will open for business or that the projected opening date
can be achieved.
The principal executive offices of both the Company and the Bank will
initially be located at 106-B Park Avenue, S.W., Aiken, South Carolina 29801.
The address of the Aiken branch office will be 1715 Whiskey Road, Aiken, South
Carolina 29803, and the address of the North Augusta branch office will be 518
Georgia Avenue, North Augusta, South Carolina. The Company's telephone number is
(803) 641-2265.
THE ORGANIZERS
The organizers of the Company and the Bank (the "Organizers") are Raymond
D. Brown, W. Cothran Campbell, Alan J. George, Margaret Holley-Taylor, James D.
McNair, Dr. Clark D. Moore, Russell D. Phelon, Donald W. Thompson, Dr. John B.
Tomarchio, and Tommy B. Wessinger. Additional individuals may be added as
Organizers, subject to regulatory approval. All of the Organizers will serve as
directors of the Company and the Bank.
The Organizers (together with members of their immediate families) intend
to purchase an aggregate of at least 165,000 shares of the Common Stock to be
sold in this offering at a purchase price of $10.00 per share. The
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<PAGE> 5
Organizers may subscribe for up to 100% of the shares in the offering if
necessary to help the Company achieve the minimum subscription level necessary
to release subscription proceeds from escrow, and some Organizers may decide to
purchase additional shares even if the minimum subscription amount has been
achieved. Any shares purchased by the Organizers in excess of their original
commitment will be purchased for investment and not with a view to the resale of
such shares. Because purchases by the Organizers may be substantial, investors
should not place any reliance on the sale of a specified minimum offering amount
as an indication of the merits of this offering or that an Organizer's
investment decision is shared by unaffiliated investors. See "The Offering" and
"Management."
THE OFFERING
Securities Offered......... Common Stock of the Company, par value $.01 per
share
Offering Price............. $10.00 per share
Number of Shares Offered... Minimum 610,000
Maximum 1,200,000
Use of Proceeds............ The Company will use the net proceeds of the
offering to capitalize the Bank at a minimum of
$6,000,000 and a maximum of $7,000,000 through the
purchase of all of the capital stock of the Bank,
subject to regulatory approval; to pay
organizational expenses of the Company and the
expenses of this offering, estimated to be
approximately $75,000; and to provide working
capital. The Company plans to retain sums in excess
of the minimum necessary to capitalize the Bank at
the Company and initially invest the sums in United
States government securities or as a deposit at the
Bank. The Company may be required by the South
Carolina Bank Board to capitalize the Bank at a
level in excess of the minimum of $6,000,000, in
which case the Company would have to receive
additional net proceeds in the offering or obtain
additional capital from another source.
IF THE CONDITIONS FOR RELEASING SUBSCRIPTION FUNDS
FROM ESCROW ARE MET AND SUCH FUNDS ARE RELEASED BUT
FINAL REGULATORY APPROVAL TO COMMENCE BANKING
OPERATIONS IS NOT OBTAINED FROM THE SOUTH CAROLINA
BANK BOARD OR THE BANK DOES NOT OPEN FOR ANY OTHER
REASON, IT IS POSSIBLE THAT SUBSCRIBERS COULD BE
RETURNED AN AMOUNT LESS THAN THEIR ORIGINAL
INVESTMENT. See "Risk Factors -- Return of Less
Than Subscription Amount." The Bank will use the
$6,000,000 received from the sale of its stock to
the Company to pay organizational and pre-opening
expenses of the Bank; to purchase properties and
furnish the buildings for the Aiken and North
Augusta offices; and to provide working capital to
be used for business purposes, including paying
officers' and employees' salaries and making loans
and investments. See "Use of Proceeds."
Conditions to Offering..... This offering will be terminated and all
subscription funds (without interest) will be
returned promptly to subscribers unless on or
before June 30, 1997 (or such later date if the
offering is extended by the Company for additional
periods not to extend beyond December 31, 1998, if
(i) the Company has accepted subscriptions and
payment in full for a minimum of 610,000 shares;
and (ii) the Company has obtained approval of the
Federal Reserve and the South Carolina Bank Board
to acquire the capital stock of the Bank and
thereafter to become a bank holding company.
Subscription proceeds for shares subscribed for
will be deposited promptly in an escrow account
with The Bankers Bank, as escrow agent
4
<PAGE> 6
(the "Escrow Agent"), under the terms of an escrow
agreement (the "Escrow Agreement"), pending the
satisfaction of the conditions set forth above or
the termination of the offering. Upon satisfaction
of the conditions set forth above, all subscription
funds held in escrow, including any interest
actually earned thereon, shall be released to the
Company for its immediate use. Any subscription
proceeds accepted after satisfaction of the
conditions set forth above but before termination
of this offering will not be deposited in escrow
but will be available for immediate use by the
Company to fund offering and organizational
expenses and for working capital. See "The
Offering."
Plan of Distribution....... Offers and sales of the Common Stock will be made
on behalf of the Company primarily by certain of
its officers and directors. The officers and
directors will receive no commissions or other
remuneration in connection with such activities,
but they will be reimbursed for reasonable expenses
incurred in the offering. The Company may also use
brokers or dealers to sell shares on behalf of the
Company in certain states. Subscriptions are
binding on subscribers and may not be revoked by
subscribers except with the consent of the Company.
The Company may, in its sole discretion, allocate
shares among subscribers in the event of an
oversubscription for the shares. In determining
which subscriptions to accept, in whole or in part,
the Company may take into account any factors it
considers relevant, including the order in which
subscriptions are received, a subscriber's
potential to do business with, or to direct
customers to, the Bank, and the Company's desire to
have a broad distribution of stock ownership.
RISK FACTORS
An investment in the shares offered hereby involves certain risks,
including, among others, lack of an operating history, dependence on key
employees of the Bank, significant control of the Company by the Organizers,
absence of an existing market for the Common Stock and lack of assurance that an
active trading market in the Common Stock will develop, no intention to pay
dividends in the foreseeable future, and competition from a number of other
financial institutions with substantially greater financial and other resources
than the Bank will have. See "Risk Factors."
5
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RISK FACTORS
An investment in the shares offered hereby involves certain risks. A
subscription for shares should be made only after careful consideration of the
risk factors set forth below and elsewhere in this Prospectus and should be
undertaken only by persons who can afford an investment involving such risks.
THE SHARES OF COMMON STOCK OFFERED HEREBY ARE NOT DEPOSITS OR SAVINGS ACCOUNTS
OR SAVINGS DEPOSITS AND ARE NOT INSURED OR GUARANTEED BY THE FDIC OR ANY OTHER
GOVERNMENTAL AGENCY.
RETURN OF LESS THAN SUBSCRIPTION AMOUNT
The amounts paid by subscribers in this offering will be held in escrow
until (i) the Company has accepted subscriptions and payment in full for a
minimum of 610,000 shares; and (ii) the Company has obtained approval of the
Federal Reserve and the South Carolina Bank Board to acquire the capital stock
of the Bank and thereafter to become a bank holding company. If these conditions
are not met by June 30, 1997, or by such subsequent date, not beyond December
31, 1998, to which the offering may be extended by the Company, all
subscriptions will be returned promptly in full, without interest. All interest
earned thereon shall be used by the Company to fund organizational expenses. If
these conditions are satisfied, the subscription amounts held in escrow may be
paid to the Company and shares issued to subscribers, and all interest earned on
the subscription proceeds will be retained by the Company. Once the Company has
met the conditions for the offering, the Escrow Agreement will be terminated and
any subscription proceeds accepted after satisfaction of the conditions set
forth above but before termination of this offering will not be deposited in
escrow but will be available for immediate use by the Company to fund offering
and organizational expenses and for working capital. When subscription amounts
are received by the Company, the Company will use a portion of the proceeds to
repay the Organizers the amounts advanced by them for organizational and
offering expenses. The Company will then fund future expenses out of the
subscription amounts received.
If the conditions for releasing subscription funds from escrow are met and
such funds are released but final regulatory approval to commence banking
operations is not obtained from the South Carolina Bank Board or the Bank does
not open for any other reason, the Company's board of directors intends to
propose that the shareholders approve a plan to liquidate the Company. Upon such
a liquidation, the Company would be dissolved and the Company's net assets
(generally consisting of the amounts received in this offering plus any interest
earned thereon, less the amount of all costs and expenses incurred by the
Company and the Bank, including the salaries of employees of the Bank and other
preopening expenses) would be distributed to the shareholders. In such event,
the Company will have incurred numerous expenses related to the organization of
the Company and the Bank, and the amount distributed to shareholders may be
substantially less than the subscription amount, and in an extreme case
shareholders may not be returned any amount.
NEW ENTERPRISE
The Company and the Bank currently are in the organizational stage, and
neither has any operating history. As a consequence, prospective purchasers of
the shares have limited information on which to base an investment decision. As
a bank holding company, the Company's profitability will depend upon the Bank's
operations. The Bank's proposed operations are subject to the risks inherent in
the establishment of any new business and, specifically, of a new bank. The
Company expects that the Bank will incur substantial initial expenses and may
not be profitable for several years after commencing business, if ever.
Shareholders are likely to experience dilution in the book value of the Common
Stock due to operating losses expected to be incurred during the initial years
of the Bank's operations.
DEPENDENCE ON KEY EMPLOYEES
As a new enterprise, the Company and the Bank will be materially dependent
on the performances of Tommy B. Wessinger, who will be the Chairman and Chief
Executive Officer of the Company and the Bank, and Alan J. George, who will be
the President of the Company and the President and Chief Operating Officer of
the Bank. The loss of the services of Mr. Wessinger and Mr. George or their
failure to perform their management functions in the manner anticipated by the
Organizers could have a material adverse effect on the Company and
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the Bank. The Company has entered into employment agreements dated as of March
3, 1997 with both Mr. Wessinger and Mr. George for five year terms beginning
April 1, 1997. See "Management -- Employment Agreements."
CONTROL OF THE COMPANY; PURCHASES BY ORGANIZERS
The Organizers, all of whom will serve as directors of the Company and the
Bank, and members of their immediate families intend to purchase an aggregate of
at least 165,000 shares, equal to 27.1% of the minimum number of shares offered
hereby and 13.75% of the maximum number of shares offered hereby, at a purchase
price of $10.00 per share. In addition, in connection with their employment
agreements, the Company has agreed to grant Mr. Wessinger and Mr. George options
to acquire up to an aggregate number of shares equal to 10% of the number of
shares sold in the offering (61,000 shares if the minimum number of shares is
sold and 120,000 shares if the maximum is sold), and the Company has agreed to
issue to Mr. Wessinger an additional 5,000 shares of Common Stock in January
1998. These additional shares, if vested, would increase the total amount
beneficially owned by the Organizers to 37.9% in the event of the minimum
offering and 24.2% in the event of the maximum offering. Organizers may purchase
additional shares in the offering and additional persons may be named as
Organizers, subject to regulatory approval. As a result of the anticipated stock
ownership in the Company by the Organizers, together with the influence which
may be exerted by such persons due to their positions as directors of the
Company and the Bank, the Organizers as a group will have substantial control of
the Company and the Bank following the offering. The Organizers may subscribe
for up to 100% of the shares in this offering if necessary to help the Company
achieve the minimum subscription level necessary to release subscription
proceeds from escrow, and some Organizers may decide to purchase additional
shares even if the minimum subscription amount has been achieved. See "The
Offering" and "Management." Any shares purchased by the Organizers in excess of
their original commitment will be purchased for investment and not with a view
to the resale of such shares. Because purchases by the Organizers may be
substantial, investors should not place any reliance on the sale of a specified
minimum offering amount as an indication of the merits of this offering or that
an Organizer's investment decision is shared by unaffiliated investors.
OFFERING PRICE
Because the Company and the Bank are in organization, the offering price of
$10.00 per share was determined by the Organizers without reference to
traditional criteria for determining stock value such as book value or
historical or projected earnings since such criteria are not applicable to
companies with no history of operations. The price per share was set to enable
the Company to raise gross proceeds of between $6,000,000 and $12,000,000 in
this offering through the sale of a reasonable number of shares, and the price
per share is essentially equivalent to the initial book value per share prior to
the payment of the Company's and the Bank's organizational expenses. No
assurance is or can be given that any of the shares could be resold for the
offering price or any other amount.
ABSENCE OF TRADING MARKET
There currently is no market for the shares and, although the Company has
filed a registration statement with the Securities and Exchange Commission (the
"SEC") to register the issuance of the Common Stock in the offering under the
Securities Act of 1933 (the "Securities Act"), it is not likely that any trading
market will develop for the shares in the future. There are no present plans for
the Common Stock to be traded on any stock exchange or in the over-the-counter
market. Furthermore, the development of any trading market for the shares may be
adversely affected by purchases of large amounts of shares in this offering by
the Organizers since shares purchased by the Organizers will generally not be
freely tradable. As a result, investors who may need or wish to dispose of all
or part of their shares may be unable to do so except in private, directly
negotiated sales. In addition, sales of substantial amounts of Common Stock
after the offering, by the Organizers or others, could adversely affect
prevailing market prices. See "Description of Capital Stock -- Shares Eligible
for Future Sale."
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<PAGE> 9
COMPETITION
The banking business is highly competitive, and the Bank will encounter
strong competition from other commercial banks, as well as from savings
institutions, mortgage banking firms, consumer finance companies, securities
brokerage firms, insurance companies, money market mutual funds, and other
financial institutions operating in the Aiken County area and elsewhere. A
number of these competitors are well established in the Aiken County area. Most
of them have substantially greater resources and lending limits, as well as a
lower cost of funds, than the Bank and may offer certain services, such as
extensive and established branch networks and trust services, that the Bank
either does not expect to provide or will not provide initially. As a result of
these competitive factors, the Bank may have to pay higher rates of interest to
attract deposits. In addition, non-depository institution competitors are
generally not subject to the extensive regulations applicable to the Company and
the Bank. Recent federal legislation permits commercial banks to establish
operations nationwide, further increasing competition from out-of-state
financial institutions. See "Proposed Business -- Competition" and "Supervision
and Regulation." Although the Organizers believe that the Bank will be able to
compete effectively with these institutions, no assurances can be given in this
regard.
SUPERVISION AND REGULATION
The banking industry is heavily regulated. The success of the Company and
the Bank depends not only on competitive factors but also on state and federal
regulations affecting banks and bank holding companies. These regulations are
primarily intended to protect depositors, not shareholders. Regulation of the
financial institutions industry is undergoing continued changes, and the
ultimate effect of such changes cannot be predicted. In December 1991, the
Federal Deposit Insurance Corporation Improvement Act of 1991 ("FDICIA") was
enacted, and FDICIA and the regulations thereunder have increased the regulatory
and supervisory requirements for financial institutions, which has resulted and
will continue to result in increased operating expenses. Additional statutes
affecting financial institutions have been proposed and may be enacted.
Regulations now affecting the Company and the Bank may be modified at any time,
and there is no assurance that such modifications will not adversely affect the
business of the Company and the Bank. See "Supervision and Regulation."
ECONOMIC CONDITIONS
The success of the Company and the Bank will depend, to a certain extent,
upon economic and political conditions, both local and national, as well as
governmental monetary policies. Conditions such as inflation, recession,
unemployment, high interest rates, short money supply, and other factors beyond
the control of the Company and the Bank may adversely affect the Bank's deposit
levels and loan demand and, therefore, the earnings of the Bank and the Company.
Although the Organizers expect favorable economic development in the Bank's
market area, there is no assurance that favorable economic development will
occur or that the Bank's expectation of corresponding growth will be achieved.
See "Proposed Business."
DIVIDEND POLICY
The Company has no plans to pay any cash dividends to its shareholders in
the foreseeable future. Since the Company and the Bank are both start-up
operations and may incur initial losses, both the Company and the Bank intend to
retain any earnings for the period of time management believes necessary to
ensure the success of their operations. The Company will be dependent upon the
Bank for its earnings and funds to pay dividends on the Common Stock. The
payment of dividends by the Company and the Bank is also subject to legal and
regulatory restrictions. Any payment of dividends by the Company in the future
will depend on the Bank's earnings, capital requirements, financial condition,
and other factors considered relevant by the Board of Directors. See "Dividend
Policy," "Proposed Business," and "Supervision and Regulation."
LENDING LIMIT
Under South Carolina law, the Bank is limited in the amount it can loan a
single borrower (including the borrower's related interests) by the amount of
the Bank's capital. These limits will increase and decrease as the Bank's
capital increases and decreases. Unless the Bank is able to sell participations
in its loans to other financial
8
<PAGE> 10
institutions, the Bank will not be able to meet all of the lending needs of loan
customers requiring aggregate extensions of credit above these limits.
DILUTION
After the offering, the Company expects to adopt a stock option plan which
will permit the Company to grant options to officers, directors, key employees,
advisors, and consultants of the Company for up to 25% of the number of shares
of Common Stock outstanding at the time the plan is adopted (expected to be
152,500 shares if the minimum number of shares is sold in the offering and
300,000 if the maximum number is sold). This plan would include the options the
Company will be obligated to issue to Mr. Wessinger and Mr. George under the
terms of their employment agreements. Exercise of these options could have a
dilutive effect on the shareholders' interest in the Company's earnings and book
value. In addition, the Company may issue additional shares of Common Stock or
preferred stock in the future. Any such stock offering by its nature could be
dilutive to the holdings of purchasers in this offering.
ANTITAKEOVER EFFECTS
The Company has certain takeover defenses in place, including (i) certain
provisions relating to meetings of shareholders; (ii) the ability of the Board
of Directors to issue additional shares of common stock and preferred stock
authorized in the Articles of Incorporation without shareholder approval; (iii)
employment agreements with certain executive officers which provide for
additional management compensation to such officer if the officer's employment
is terminated after a change in control of the Company; (iv) a staggered board
of directors; (v) certain nomination requirements for directors; (vi) a
provision in the Articles of Incorporation granting the Board of Directors the
discretion, when considering whether a proposed merger or similar transaction is
in the best interests of the Company and its shareholders, to take into account
the effect of the transaction on the employees, customers, and suppliers of the
Company and upon the communities in which the offices of the Company are
located; and (vii) a provision in the Company's bylaws providing that
individuals affiliated with business competitors of the Company may not qualify
to serve on the Company's Board of Directors. Any of these measures may impede
the takeover of the Company without the approval of the Company's Board of
Directors. See "Description of Capital Stock -- Certain Antitakeover Effects."
THE OFFERING
GENERAL
The Company is offering for sale a minimum of 610,000 shares and a maximum
of 1,200,000 shares of its Common Stock at a price of $10.00 per share to raise
gross proceeds of between $6,100,000 and $12,000,000 for the Company. The
minimum purchase for any investor (together with the investor's affiliates) is
100 shares and the maximum purchase is 4.9% of the offering unless the Company,
in its sole discretion, accepts a subscription for a lesser or greater number of
shares.
The Organizers (together with members of their immediate families) intend
to purchase an aggregate of at least 165,000 shares of the Common Stock to be
sold in this offering. The Organizers may subscribe for up to 100% of the shares
in the offering if necessary to help the Company achieve the minimum
subscription level necessary to release subscription proceeds from escrow, and
some Organizers may decide to purchase additional shares even if the minimum
subscription amount has been achieved. Any shares purchased by the Organizers in
excess of their original commitment will be purchased for investment and not
with a view to the resale of such shares. See "Description of Capital Stock of
the Company -- Shares Eligible for Future Sale." Because purchases by the
Organizers may be substantial, investors should not place any reliance on the
sale of a specified minimum offering amount as an indication of the merits of
this offering or that an Organizer's investment decision is shared by
unaffiliated investors. See "Management."
Subscriptions to purchase shares will be received until midnight, Aiken,
South Carolina time, on June 30, 1997, unless all of the shares are earlier sold
or the offering is earlier terminated or extended by the Company. See
"Conditions to the Offering and Release of Funds." The Company reserves the
right to terminate the offering
9
<PAGE> 11
at any time or to extend the expiration date for additional periods not to
extend beyond December 31, 1998. The date the offering terminates is referred to
herein as the "Expiration Date." No written notice of an extension of the
offering period need be given prior to any extension and any such extension will
not alter the binding nature of subscriptions already accepted by the Company.
Once the Company is subject to the reporting requirements of the Securities
Exchange Act of 1934 (the "Exchange Act"), it will file quarterly reports on
Form 10-Q and will make such documents available to subscribers who request a
copy. In addition, the Company intends to provide quarterly communications to
all subscribers which will include information concerning any extensions of the
offering. Extension of the Expiration Date might cause an increase in the
Company's organizational and pre-opening expenses and in the expenses incurred
with this offering. The Company may use the services of brokers or dealers to
effectuate the sales of these securities in certain jurisdictions. See "Plan of
Distribution."
Following acceptance by the Company, subscriptions will be binding on
subscribers and may not be revoked by subscribers except with the consent of the
Company. In addition, the Company reserves the right to cancel accepted
subscriptions at any time and for any reason until the proceeds of this offering
are released from escrow (as discussed in greater detail in "Conditions to the
Offering and Release of Funds" below), and the Company reserves the right to
reject, in whole or in part and in its sole discretion, any subscription. The
Company may, in its sole discretion, allocate shares among subscribers in the
event of an oversubscription for the shares. In determining which subscriptions
to accept, in whole or in part, the Company may take into account any factors it
considers relevant, including the order in which subscriptions are received, a
subscriber's potential to do business with, or to direct customers to, the Bank,
and the Company's desire to have a broad distribution of stock ownership. If the
Company rejects any subscription, or accepts a subscription but in its
discretion subsequently elects to cancel all or part of such subscription, the
Company will refund promptly the amount remitted that corresponds to $10.00
multiplied by the number of shares as to which the subscription is rejected or
canceled. Certificates representing shares duly subscribed and paid for will be
issued by the Company promptly after the offering conditions are satisfied and
escrowed funds are delivered to the Company.
CONDITIONS TO THE OFFERING AND RELEASE OF FUNDS
Subscription proceeds accepted by the Company for the initial 610,000
shares subscribed for in this offering will be promptly deposited in an escrow
account with the Escrow Agent until the conditions to this offering have been
satisfied or the offering has been terminated. The offering will be terminated,
no shares will be issued, and no subscription proceeds will be released from
escrow to the Company, unless on or before the Expiration Date (i) the Company
has accepted subscriptions and payment in full for a minimum of 610,000 shares;
and (ii) the Company has obtained approval of the Federal Reserve and the South
Carolina Bank Board to acquire the capital stock of the Bank and thereafter to
become a bank holding company. Any subscription proceeds accepted after
satisfaction of the conditions set forth above but before termination of this
offering will not be deposited in escrow but will be available for immediate use
by the Company to fund offering and organizational expenses and for working
capital.
If the above conditions are not satisfied by the Expiration Date or the
offering is otherwise earlier terminated, accepted subscription agreements will
be of no further force or effect and the full amount of all subscription funds
will be returned promptly to subscribers, without interest. The Company will
retain any interest earned thereon to repay the expenses incurred by the
Organizers in organizing the Company and the Bank. Any expenses not paid with
such interest will be paid by the Organizers.
The Escrow Agent has not investigated the desirability or advisability of
an investment in the shares by prospective investors and has not approved,
endorsed, or passed upon the merits of an investment in the shares. Subscription
funds held in escrow will be invested in interest-bearing savings accounts,
short-term United States Treasury securities, FDIC-insured bank deposits, or
such other investments as the Escrow Agent and the Company shall agree. The
Organizers do not intend to invest the subscription proceeds held in escrow in
instruments that would mature after the Expiration Date of the offering.
If the above conditions are satisfied, the subscription amounts held in
escrow may be paid to the Company and shares issued to subscribers. Once the
Company has met the conditions for the offering, the Escrow Agreement will be
terminated, and any subscription proceeds accepted after satisfaction of the
conditions before
10
<PAGE> 12
termination of this offering will not be deposited in escrow but will be
available for immediate use by the Company to fund offering and organizational
expenses and for working capital. When the subscription funds are released to
the Company, the Company will use a portion of the proceeds to repay the
Organizers the amounts advanced by them for organizational and offering
expenses.
If the conditions for releasing subscription funds from escrow are met and
such funds are released but final regulatory approval to commence banking
operations is not obtained from the South Carolina Bank Board or the Bank does
not open for any other reason, the Board of Directors intends to propose that
the shareholders approve a plan to liquidate the Company. Upon such a
liquidation, the Company would be dissolved and the Company's net assets
(generally consisting of the amounts received in this offering plus any interest
earned thereon, less the amount of all costs and expenses incurred by the
Company and the Bank, including the salaries of employees of the Bank and other
pre-opening expenses) would be distributed to the shareholders. In such event,
the Company will have incurred numerous expenses related to the organization of
the Company and the Bank, and the amount distributed to shareholders may be
substantially less than the subscription amount, and in an extreme case
shareholders may not be returned any amount.
PLAN OF DISTRIBUTION
Offers and sales of the Common Stock will be made on behalf of the Company
primarily by certain of its officers and directors. The officers and directors
will receive no commissions or other remuneration in connection with such
activities, but they will be reimbursed for reasonable expenses incurred in the
offering. In reliance on Rule 3a4-1 of the Exchange Act, the Company believes
such officers and directors will not be deemed to be brokers and/or dealers
under the Exchange Act.
The Company may find it necessary to use brokers and/or dealers in order to
effect the sale of the Common Stock in certain jurisdictions. The Company has no
present arrangements or agreements with any such brokers and/or dealers with
respect to this offering. The Company anticipates that all such arrangements, if
any, would be on a "best efforts" basis, with the Company paying to the broker
and/or dealer a commission based on the shares sold through its efforts. The
Company believes that the range of possible commissions to be paid to brokers
and/or dealers in such transactions would be $.50 to $.70 per share and that the
maximum average commission payable in the offering when all shares subject to
this offering are taken into account would be $0.10. The Company anticipates
that any sales of Common Stock requiring the use of brokers and/or dealers will
not comprise a major part of this offering. If broker/dealers are used, all such
funds will be promptly transmitted to the Escrow Agent under the terms of the
escrow agreement.
HOW TO SUBSCRIBE
Shares may be subscribed for by delivering the subscription agreement (the
"Subscription Agreement") attached hereto as Exhibit A, completed and executed,
to the Company, on or prior to the Expiration Date. Subscribers should retain a
copy of the completed Subscription Agreement for their records. The subscription
price is due and payable when the Subscription Agreement is delivered. Payment
must be made in United States dollars by cash or by check, bank draft or money
order drawn to the order of The Bankers Bank, Escrow Account for People's
Community Capital Corporation in the amount of $10.00 multiplied by the number
of shares subscribed for.
USE OF PROCEEDS
BY THE COMPANY
Upon satisfaction of all of the conditions discussed in "The
Offering -- Conditions to the Offering and Release of Funds," all subscription
funds held in escrow will be released and will become capital of the Company.
The gross proceeds to the Company from the sale of the shares offered hereby
will be between $6,100,000 and $12,000,000. The Company will use a portion of
the offering proceeds to pay (or reimburse the organizers for) the
organizational and offering expenses of the Company and the organizational and
pre-opening expenses of the Bank (which are described in the following section)
through the date of the release of funds held
11
<PAGE> 13
in escrow. The organizational and offering expenses of the Company will consist
primarily of legal, accounting, marketing, and printing expenses, and the
Company anticipates that they will not exceed $75,000. The Company will use
approximately $875,000 for the purchase of the facilities for the Bank's
offices. The Company intends to obtain a loan to purchase these facilities prior
to completion of the offering.
After payment of these expenses, the Company will use a minimum of
$6,000,000 and a maximum of $7,000,000 of the gross proceeds to purchase all of
the capital stock of the Bank. The Company will retain the balance of the
proceeds and intends initially to invest them in United States government
securities or as a deposit with the Bank. In the long-term, the Company will use
these sums for working capital and other general corporate purposes, including
payment of expenses of the Company and the provision of additional capital for
the Bank, if necessary. Subject to regulatory approval, the Company may also use
such proceeds for potential expansion opportunities, such as the establishment
of additional branches, the acquisition of other financial institutions, or the
establishment of mortgage banking services. The Company does not currently have
any definitive plans regarding any such expansion possibilities.
The following table sets forth the anticipated use of proceeds by the
Company based on the sale of the minimum number and maximum number of shares in
this offering.
<TABLE>
<CAPTION>
MINIMUM MAXIMUM
OFFERING(1) OFFERING(2)
----------- -----------
<S> <C> <C>
Gross proceeds from offering................................ $ 6,100,000 $12,000,000
Expenses for organization and issuance and distribution of
Common Stock.............................................. (75,000) (75,000)
Purchase of Bank Offices(3)................................. -- (875,000)
Investment in capital stock of the Bank..................... (6,000,000) (7,000,000)
----------- -----------
Remaining proceeds.......................................... $ 25,000 $ 4,050,000
=========== ===========
</TABLE>
- ---------------
(1) Assumes that 610,000 shares of Common Stock are sold in this offering.
(2) Assumes that 1,200,000 shares of Common Stock are sold in this offering.
(3) If sufficient proceeds from the offering are available, the Company will use
a portion of the proceeds from the offering to repay the loan which will be
obtained to purchase the facilities.
BY THE BANK
The Bank currently plans to use up to approximately $250,000 of the
proceeds it receives from the sale of its stock to the Company to reimburse the
Company and the Organizers for amounts advanced by the Company and the
Organizers to pay organizational and pre-opening expenses of the Bank.
Organizational expenses of the Bank, estimated at $25,000, include consulting
fees, expenses for market analysis and feasibility studies, and legal fees and
expenses. Pre-opening expenses, estimated at $225,000, include officers' and
employees' salaries and benefits (assuming the Bank opens for business on its
target date of August 1997). In addition, the Company anticipates that
approximately $250,000 will be used for renovation of the Bank's offices. For
furniture, fixtures, and equipment (including computer equipment) for the
offices, the Bank expects to spend approximately $500,000 in 1997. The balance
of the proceeds to be received by the Bank and available for use in the first
year (estimated at $5,100,000 if the minimum number of shares is sold and
$6,000,000 if the maximum number is sold) will be used for loans to customers,
investments, and other general corporate purposes.
12
<PAGE> 14
The following table depicts the anticipated use of proceeds by the Bank.
All proceeds received by the Bank will be in the form of an investment by the
Company in the Bank's capital stock.
<TABLE>
<CAPTION>
MINIMUM MAXIMUM
OFFERING(1) OFFERING(2)
----------- -----------
<S> <C> <C>
Investment by the Company in the Bank's capital stock....... $6,100,000 $7,000,000
Reimbursement to the Company and Organizers for amounts
advanced to the Bank for organizational and pre-opening
expenses of the Bank...................................... (250,000) (250,000)
Furniture, Fixtures and Equipment........................... (500,000) (500,000)
Renovation of Bank Offices.................................. (250,000) (250,000)
---------- ----------
Remaining Proceeds.......................................... $5,100,000 $6,000,000
========== ==========
</TABLE>
- ---------------
(1) Assumes that 610,000 shares of Common Stock are sold in this offering.
(2) Assumes that 1,200,000 shares of Common Stock are sold in this offering.
Although the amounts set forth above provide an indication of the proposed
use of funds based on the Organizers' plans and estimates, actual expenses may
vary from the estimates. These estimates were based on assumptions that the
Organizers believed were reasonable, but as to which no assurances can be given.
The Organizers believe that the estimated minimum net proceeds of the offering
will satisfy the cash requirements of the Company and the Bank for their
respective first five years of operations and that neither the Company nor the
Bank will need to raise additional funds for operations during this period, but
there can be no assurance that this will be the case.
13
<PAGE> 15
CAPITALIZATION
The following table sets forth the capitalization of the Company as of
March 31, 1997, and the pro forma consolidated capitalization of the Company and
the Bank, as adjusted to give effect to the sale of the minimum of 610,000
shares in this offering. The Bank has established August 1997 as the target date
for opening the Bank; accordingly, the "As Adjusted" column reflects estimated
pre-opening expenses of the Company and the Bank through July 31, 1997.
<TABLE>
<CAPTION>
SHAREHOLDERS' EQUITY MARCH 31, 1997 AS ADJUSTED
- -------------------- -------------- -----------
<S> <C> <C>
Common Stock, par value $.01 per share; 10,000,000 shares
authorized; ten shares issued and outstanding(1); 610,000
shares issued and outstanding as adjusted (minimum
offering)................................................. $ 0 $ 6,100
Preferred Stock, par value $.01 per share; 10,000,000 shares
authorized; no shares issued and outstanding.............. 0 0
Additional paid-in capital(2)............................... 100 6,018,900
Deficit accumulated during the pre-opening stage(3)......... (4,487) (190,000)
======= ==========
Total shareholders' equity (deficit)(4)........... $(4,387) $5,835,000
======= ==========
</TABLE>
- ---------------
(1) Tommy B. Wessinger was issued ten shares upon organization of the Company
which will be redeemed for $10.00 per share (the price at which they were
issued) upon the first issuance of shares offered hereby. The stated capital
for ten shares is $.10.
(2) The expenses of the offering will be charged against this account. These
expenses are estimated to be approximately $75,000 and this amount has been
used in the calculation of the amount shown in the "As Adjusted" column.
(3) The deficit results from the expensing of estimated pre-opening expenses. As
of March 31, 1997, approximately $4,709 of pre-opening expenses and $44,297
of capitalizable organizational and offering costs had been incurred on
behalf of the Company and the Bank, and the Company's total accumulated
shareholder's deficit was $4,387. The Organizers estimate that a total of
$225,000 of pre-opening expenses, $25,000 of organizational costs ($18,000
for the Bank and $7,000 for the Company), and up to $1,625,000 of
capitalizable property costs for acquisition of the Bank's offices and for
the purchase of furniture, fixtures, and equipment are expected to be
incurred by the Company and the Bank prior to the commencement of operations
(assumed to occur in August 1997). However, no assurances can be given that
the Bank will open by this date or at all, and the amount of pre-opening
expenses and organizational costs could ultimately be greater than currently
estimated. Furniture, fixtures, and equipment will be capitalized and
amortized over the life of the lease or over the estimated useful life of
the asset. The Company will retain any interest earned on subscription
payments held in escrow prior to conclusion of the offering. Such interest
will be used to help offset the deficit accumulated during the pre-opening
stage, but the figures shown above do not include any estimate of the
interest which may be earned.
(4) The shareholders are likely to experience additional dilution due to
operating losses expected to be incurred during the initial years of the
Bank's operations.
14
<PAGE> 16
DIVIDEND POLICY
The Board of Directors expects initially to follow a policy of retaining
any earnings to provide funds to operate and expand the business. Consequently,
it is unlikely that any cash dividends will be paid in the near future. The
Company's ability to pay any cash dividends to its shareholders in the future
will depend primarily on the Bank's ability to pay dividends to the Company. In
order to pay dividends to the Company, the Bank must comply with the
requirements of all applicable laws and regulations. See "Supervision and
Regulation -- The Bank -- Dividends" and "Supervision and Regulation -- Capital
Regulations." In addition to the availability of funds from the Bank, the future
dividend policy of the Company is subject to the discretion of the Board of
Directors and will depend upon a number of factors, including future earnings,
financial condition, cash needs, and general business conditions.
PROPOSED BUSINESS
GENERAL
The Company was incorporated as a South Carolina corporation on February
26, 1997, primarily to own and control all of the capital stock of the Bank. The
Company initially will engage in no business other than owning and managing the
Bank. The Organizers have chosen a holding company structure under which the
Company will acquire all of the capital stock of the Bank because, in the
judgment of the Organizers, the holding company structure provides flexibility
that would not otherwise be available.
The holding company structure can assist the Bank in maintaining its
required capital ratios because, subject to compliance with Federal Reserve
Board debt guidelines, the Company may borrow money and contribute the proceeds
to the Bank as primary capital. Moreover, a holding company may engage in
certain non-banking activities that the Federal Reserve Board has deemed to be
closely related to banking. See "Supervision and Regulation." Although the
Company has no present intention of engaging in any of these activities, if
circumstances should lead the Company's management to believe that there is a
need for these services in the Bank's market area and that such activities could
be profitably conducted, management of the Company would have the flexibility of
commencing these activities upon filing a notice or application with the Federal
Reserve.
The Bank is being organized as a state bank under the laws of the United
States and, subject to regulatory approval, will engage in a commercial banking
business from its office in the Aiken County area. By virtue of being a state
bank, the Bank may not commence business until the South Carolina Bank Board
issues a charter for the Bank. There is no assurance that the Bank will be
successful in receiving regulatory approval and satisfying any conditions that
may be imposed upon the Bank by the South Carolina Bank Board or the Federal
Reserve Bank prior to the commencement of its business.
MARKETING FOCUS
Most of the banks in the Aiken County area are now local branches of large
regional banks. Although size gives the larger banks certain advantages in
competing for business from large corporations, including higher lending limits
and the ability to offer services in other areas of South Carolina and the Aiken
County area, the Organizers believe that there is a void in the community
banking market in the Aiken County area and believe that the Bank can
successfully fill this void. As a result, the Company generally will not attempt
to compete for the banking relationships of large corporations, but will
concentrate its efforts on small- to medium-sized businesses and on individuals.
The Bank plans to advertise to emphasize the Company's local ownership,
community bank nature, and ability to provide more personalized service than its
competition. The Organizers, as long-time residents and business people in the
Aiken County area, have determined the credit needs of the area through personal
experience and communications with their business colleagues. The Organizers
believe that the proposed community bank focus of the Bank is likely to succeed
in this market. The Organizers believe that the area will react favorably to the
Bank's emphasis on service to small businesses, individuals, and professional
concerns. However, no assurances in this respect can be given.
15
<PAGE> 17
LOCATION AND SERVICE AREA
The Bank will engage in a general commercial and retail banking business,
emphasizing the needs of small-to medium-sized businesses, professional
concerns, and individuals, primarily in Aiken and North Augusta, South Carolina
and the surrounding area. The Company's address is 106-B Park Avenue, S.W.,
Aiken, South Carolina 29801, the address of the Aiken branch office will be 1715
Whiskey Road, Aiken, South Carolina 29803, and the address of the North Augusta
branch will be 518 Georgia Avenue, North Augusta, South Carolina. The Company's
telephone number is (803) 641-2265. See "Facilities."
The primary service area of the Bank will be Aiken County, with primary
focus centering on the county's two largest cities, Aiken and North Augusta.
Aiken County is one of South Carolina's largest counties geographically. It is
located in the midwestern portion of the state with its western border being the
Savannah River. Aiken County is centered between the mountains to the north and
the coast to the south, approximately one hour from Columbia and three hours
from Atlanta.
According to the 1990 census, the population of the county of Aiken was
120,940, with an estimated increase through 1996 of 12.2% to 135,640. The
population is projected to increase another 6.9% to 144,952 by 2001, according
to National Decision Systems data. It is estimated that over 70% of the total
population of the county is concentrated in and surrounding the cities of North
Augusta and Aiken where the offices of the Bank will be located.
Over 70 different companies have manufacturing or industrial facilities in
Aiken county, including Savannah River Site, the largest employer in the county,
which is operated by Westinghouse Corporation for the Department of Energy. The
1996 estimated average household income in the county was $49,063, with 15.2% of
the households having income in excess of $50,000.
DEPOSITS
The Bank intends to offer a full range of deposit services that are
typically available in most banks and savings and loan associations, including
checking accounts, commercial accounts, NOW accounts, savings accounts, and
other time deposits of various types, ranging from daily money market accounts
to longer-term certificates of deposit. The transaction accounts and time
certificates will be tailored to the Bank's principal market area at rates
competitive to those offered in the Aiken County area. In addition, the Bank
intends to offer certain retirement account services, such as Individual
Retirement Accounts (IRAs). The Bank intends to solicit these accounts from
individuals, businesses, associations and organizations, and governmental
authorities.
LENDING ACTIVITIES
General. The Bank intends to emphasize a range of lending services,
including real estate, commercial and consumer loans, to individuals and small-
to medium-sized businesses and professional concerns that are located in or
conduct a substantial portion of their business in the Bank's market area.
Real Estate Loans. The Organizers expect that one of the primary
components of the Bank's loan portfolio will be loans secured by first or second
mortgages on real estate. These loans will generally consist of commercial real
estate loans, construction and development loans, and residential real estate
loans (but will exclude home equity loans, which are classified as consumer
loans). Loan terms generally will be limited to five years or less, although
payments may be structured on a longer amortization basis. Interest rates may be
fixed or adjustable, and will more likely be fixed in the case of shorter term
loans. The Bank will generally charge an origination fee. Management will
attempt to reduce credit risk in the commercial real estate portfolio by
emphasizing loans on owner-occupied office and retail buildings where the
loan-to-value ratio, established by independent appraisals, does not exceed 80%.
In addition, the Bank will typically require personal guarantees of the
principal owners of the property backed with a review by the Bank of the
personal financial statements of the principal owners. The principal economic
risk associated with each category of anticipated loans, including real estate
loans, is the creditworthiness of the Bank's borrowers. The risks associated
with real estate loans vary with many economic factors, including employment
levels and fluctuations in the value of real estate. The Bank will compete for
real estate loans with a number of bank competitors which are well established
in the Aiken County
16
<PAGE> 18
area. Most of these competitors have substantially greater resources and lending
limits than the Bank. As a result, the Bank may have to charge lower interest
rates to attract borrowers. See "-- Competition" below. The Bank may also
originate loans for sale into the secondary market. The Bank intends to limit
interest rate risk and credit risk on these loans by locking the interest rate
for each loan with the secondary investor and receiving the investor's
underwriting approval prior to originating the loan.
Commercial Loans. The Bank will make loans for commercial purposes in
various lines of businesses. Equipment loans will typically be made for a term
of five years or less at fixed or variable rates, with the loan fully amortized
over the term and secured by the financed equipment and with a loan-to-value
ratio of 80% or less. Working capital loans will typically have terms not
exceeding one year and will usually be secured by accounts receivable,
inventory, or personal guarantees of the principals of the business. For loans
secured by accounts receivable or inventory, principal will typically be repaid
as the assets securing the loan are converted into cash, and in other cases
principal will typically be due at maturity. The principal economic risk
associated with each category of anticipated loans, including commercial loans,
is the creditworthiness of the Bank's borrowers. The risks associated with
commercial loans vary with many economic factors, including the economy in the
Aiken County area, especially the tourist economy. The well-established banks in
the Aiken County area will make proportionately more loans to medium- to
large-sized businesses than the Bank. Many of the Bank's anticipated commercial
loans will likely be made to small- to medium-sized businesses which may be less
able to withstand competitive, economic, and financial conditions than larger
borrowers.
Consumer Loans. The Bank will make a variety of loans to individuals for
personal and household purposes, including secured and unsecured installment and
term loans, home equity loans and lines of credit, and revolving lines of credit
such as credit cards. These loans typically will carry balances of less than
$25,000 and, in the case of nonrevolving loans, will be amortized over a period
not exceeding 48 months or will be ninety-day term loans, in each case bearing
interest at a fixed rate. The revolving loans will typically bear interest at a
fixed rate and require monthly payments of interest and a portion of the
principal balance. The underwriting criteria for home equity loans and lines of
credit will generally be the same as applied by the Bank when making a first
mortgage loan, as described above, and home equity lines of credit will
typically expire ten years or less after origination. As with the other
categories of loans, the principal economic risk associated with consumer loans
is the creditworthiness of the Bank's borrowers, and the principal competitors
for consumer loans will be the established banks in the Cherokee area.
Loan Approval and Review. The Bank's loan approval policies will provide
for various levels of officer lending authority. When the amount of aggregate
loans to a single borrower exceeds that individual officer's lending authority,
the loan request will be considered and approved by an officer with a higher
lending limit or the officers' loan committee. The Bank will establish an
officers' loan committee that has lending limits, and any loan in excess of this
lending limit will be approved by the directors' loan committee. The Bank will
not make any loans to any director, officer, or employee of the Bank unless the
loan is approved by the board of directors of the Bank and is made on terms not
more favorable to such person than would be available to a person not affiliated
with the Bank.
Lending Limits. The Bank's lending activities will be subject to a variety
of lending limits imposed by federal law. While differing limits apply in
certain circumstances based on the type of loan or the nature of the borrower
(including the borrower's relationship to the Bank), in general the Bank will be
subject to a loan-to-one-borrower limit. These limits will increase or decrease
as the Bank's capital increases or decreases. Unless the Bank is able to sell
participations in its loans to other financial institutions, the Bank will not
be able to meet all of the lending needs of loan customers requiring aggregate
extensions of credit above these limits. It is not currently anticipated that
the Bank will have an initial loan loss reserve when it commences operations.
OTHER BANKING SERVICES
Other anticipated bank services include cash management services, safe
deposit boxes, travelers checks, direct deposit of payroll and social security
checks, and automatic drafts for various accounts. The Bank plans to become
associated with a shared network of automated teller machines that may be used
by Bank customers throughout South Carolina and other regions. The Bank also
plans to offer MasterCard and VISA credit card
17
<PAGE> 19
services through a correspondent bank as an agent for the Bank. The Bank does
not plan to exercise trust powers during its initial years of operation.
COMPETITION
The banking business is highly competitive. The Bank will compete as a
financial intermediary with other commercial banks, savings and loan
associations, credit unions, and money market mutual funds operating in the
Aiken County area and elsewhere. As of March 31, 1997, there were four
commercial banks (none of which are headquartered in Aiken County), two savings
banks, and two credit unions operating in Aiken County. A number of these
competitors are well established in the Aiken County area. Most of them have
substantially greater resources and lending limits than the Bank and offer
certain services, such as extensive and established branch networks and trust
services, that the Bank either does not expect to provide or will not provide
initially. As a result of these competitive factors, the Bank may have to pay
higher rates of interest to attract deposits.
FACILITIES
Aiken Office. The proposed Aiken branch office will be located at 1715
Whiskey Road, Aiken, South Carolina 29803. It is a 2,600 square foot facility
with 28 customer parking spaces, five teller stations, and five drive-through
banking stations. The Aiken branch office intends to provide automated teller
services to its customers.
North Augusta Office. The proposed North Augusta branch office will be
located at 518 Georgia Avenue in North Augusta, South Carolina, approximately 15
miles from Aiken, South Carolina, in the downtown business district of North
Augusta. It will be a 3,600 square foot facility with 22 customer parking
spaces, five teller stations, which may be expanded to 10 stations to
accommodate the location's needs for expansion, if necessary, and a 338 square
foot drive-through banking facility with four drive-through banking stations.
The North Augusta location intends to offer automated teller services to its
customers.
Executive Office. The Company's main offices will be located at 106-B Park
Avenue, S.W., Aiken, South Carolina 29801. The Bank will make loans but not
accept deposits at this office, which has approximately 10,000 square feet and
will serve as the Company's headquarters.
The Company believes that the facilities will adequately serve the Bank's
needs for its first several years of operation. See "Use of Proceeds -- By the
Bank."
EMPLOYEES
The Company anticipates that, upon commencement of operations, the Bank
will have approximately 20 full-time employees. The Company will not have any
employees other than its officers, none of whom will initially receive any
remuneration for their services to the Company.
LEGAL PROCEEDINGS
There are no material legal proceedings to which the Company or the Bank or
any of their properties are subject.
SUPERVISION AND REGULATION
The Company and the Bank are subject to state and federal banking laws and
regulations which impose specific requirements or restrictions on and provide
for general regulatory oversight with respect to virtually all aspects of
operations. These laws and regulations are generally intended to protect
depositors, not shareholders. To the extent that the following summary describes
statutory or regulatory provisions, it is qualified in its entirety by reference
to the particular statutory and regulatory provisions. Any change in applicable
laws or regulations may have a material effect on the business and prospects of
the Company. Beginning with the enactment of the Financial Institutions Reform,
Recovery and Enforcement Act of 1989 ("FIRREA") and following with FDICIA, which
was enacted in 1991, numerous additional regulatory requirements have been
placed on the banking
18
<PAGE> 20
industry in the past several years, and additional changes have been proposed.
The banking industry is also likely to change significantly as a result of the
passage of the Riegle-Neal Interstate Banking and Branching Efficiency Act of
1994 (the "Interstate Banking Act"). The operations of the Company and the Bank
may be affected by legislative changes and the policies of various regulatory
authorities. The Company is unable to predict the nature or the extent of the
effect on its business and earnings that fiscal or monetary policies, economic
control, or new federal or state legislation may have in the future.
THE COMPANY
Because it will own the outstanding capital stock of the Bank, the Company
will be a bank holding company within the meaning of the Federal Bank Holding
Company Act of 1956 (the "BHCA") and The South Carolina Bank Holding Company Act
(the "South Carolina Act"). The activities of the Company will also be governed
by the Glass-Steagall Act of 1933 (the "Glass-Steagall Act").
The BHCA. Under the BHCA, the Company will be subject to periodic
examination by the Federal Reserve and will be required to file periodic reports
of its operations and such additional information as the Federal Reserve may
require. The Company's and the Bank's activities are limited to banking,
managing, or controlling banks; furnishing services to or performing services
for its subsidiaries; and engaging in other activities that the Federal Reserve
determines to be so closely related to banking, managing, or controlling banks
as to be a proper incident thereto.
Investments, Control, and Activities. With certain limited exceptions, the
BHCA requires every bank holding company to obtain the prior approval of the
Federal Reserve before (i) acquiring substantially all the assets of any bank,
(ii) acquiring direct or indirect ownership or control of any voting shares of
any bank if after such acquisition it would own or control more than 5% of the
voting shares of such bank (unless it already owns or controls the majority of
such shares), or (iii) merging or consolidating with another bank holding
company.
In addition, and subject to certain exceptions, the BHCA and the Change in
Bank Control Act, together with regulations thereunder, require Federal Reserve
approval (or, depending on the circumstances, no notice of disapproval) prior to
any person or company acquiring "control" of a bank holding company, such as the
Company. Control is conclusively presumed to exist if an individual or company
acquires 25% or more of any class of voting securities of the bank holding
company. Control is rebuttably presumed to exist if a person acquires 10% or
more but less than 25% of any class of voting securities and either the Company
has registered securities under Section 12 of the Exchange Act (which the
Company would likely be required to do with respect to the Common Stock once it
has more than 500 shareholders of record) or no other person will own a greater
percentage of that class of voting securities immediately after the transaction.
The regulations provide a procedure for challenge of the rebuttable control
presumption.
Under the BHCA, a bank holding company is generally prohibited from
engaging in, or acquiring direct or indirect control of more than 5% of the
voting shares of any company engaged in, nonbanking activities, unless the
Federal Reserve Board, by order or regulation, has found those activities to be
so closely related to banking or managing or controlling banks as to be a proper
incident thereto. Some of the activities that the Federal Reserve Board has
determined by regulation to be proper incidents to the business of a bank
holding company include making or servicing loans and certain types of leases,
engaging in certain insurance and discount brokerage activities, performing
certain data processing services, acting in certain circumstances as a fiduciary
or investment or financial adviser, owning savings associations, and making
investments in certain corporations or projects designed primarily to promote
community welfare.
The Federal Reserve Board will impose certain capital requirements on the
Company under the BHCA, including a minimum leverage ratio and a minimum ratio
of "qualifying" capital to risk-weighted assets. These requirements are
described below under "-- Capital Regulations." Subject to its capital
requirements and certain other restrictions, the Company will be able to borrow
money to make a capital contribution to the Bank, and such loans may be repaid
from dividends paid from the Bank to the Company (although the ability of the
Bank to pay dividends will be subject to regulatory restrictions as described
below in "-- The Bank -- Dividends"). The Company will also be able to raise
capital for contribution to the Bank by issuing securities without having to
receive regulatory approval, subject to compliance with federal and state
securities laws.
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<PAGE> 21
Source of Strength: Cross-Guarantee. In accordance with Federal Reserve
Board policy, the Company is expected to act as a source of financial strength
to the Bank and to commit resources to support the Bank in circumstances in
which the Company might not otherwise do so. Under the BHCA, the Federal Reserve
Board may require a bank holding company to terminate any activity or relinquish
control of a nonbank subsidiary (other than a nonbank subsidiary of a bank) upon
the Federal Reserve Board's determination that such activity or control
constitutes a serious risk to the financial soundness or stability of any
subsidiary depository institution of the bank holding company. Further, federal
bank regulatory authorities have additional discretion to require a bank holding
company to divest itself of any bank or nonbank subsidiary if the agency
determines that divestiture may aid the depository institution's financial
condition.
Glass-Steagall Act. The Company will also be restricted in its activities
by the provisions of the Glass-Steagall Act, which will prohibit the Company
from owning subsidiaries that are engaged principally in the issue, flotation,
underwriting, public sale, or distribution of securities. The interpretation,
scope, and application of the provisions of the Glass-Steagall Act currently are
being considered and reviewed by regulators and legislators, and the
interpretation and application of those provisions have been challenged in the
federal courts.
South Carolina Act. As a bank holding company registered under the South
Carolina Act, the Company is subject to regulation by the South Carolina Bank
Board. Consequently, the Company must receive the approval of the South Carolina
Bank Board prior to engaging in the acquisition of banking or nonbanking
institutions or assets. The Company must also file with the South Carolina Bank
Board periodic reports with respect to its financial condition and operations,
management, and intercompany relationships between the Company and its
subsidiaries.
THE BANK
General. Subject to receipt of the necessary approvals of its pending
applications, the Bank will operate as a state bank incorporated under the laws
of the United States and subject to examination by the South Carolina Bank
Board. The South Carolina Bank Board and the Federal Reserve will regulate or
monitor virtually all areas of the Bank's operations, including security devices
and procedures, adequacy of capitalization and loss reserves, loans,
investments, borrowings, deposits, mergers, issuances of securities, payment of
dividends, interest rates payable on deposits, interest rates or fees chargeable
on loans, establishment of branches, corporate reorganizations, maintenance of
books and records, and adequacy of staff training to carry on safe lending and
deposit gathering practices. The South Carolina Bank Board will require the Bank
to maintain certain capital ratios and will impose limitations on the Bank's
aggregate investment in real estate, bank premises, and furniture and fixtures.
The Bank will be required by the South Carolina Bank Board to prepare quarterly
reports on the Bank's financial condition and to conduct an annual audit of its
financial affairs in compliance with minimum standards and procedures prescribed
by the South Carolina Bank Board.
Under FDICIA, all insured institutions must undergo regular on site
examinations by their appropriate banking agency. The cost of examinations of
insured depository institutions and any affiliates may be assessed by the
appropriate agency against each institution or affiliate as it deems necessary
or appropriate. Insured institutions are required to submit annual reports to
the FDIC and the appropriate agency (and state supervisor when applicable).
FDICIA also directs the FDIC to develop with other appropriate agencies a method
for insured depository institutions to provide supplemental disclosure of the
estimated fair market value of assets and liabilities, to the extent feasible
and practicable, in any balance sheet, financial statement, report of condition
or any other report of any insured depository institution. FDICIA also requires
the federal banking regulatory agencies to prescribe, by regulation, standards
for all insured depository institutions and depository institution holding
companies relating, among other things, to: (i) internal controls, information
systems, and audit systems; (ii) loan documentation; (iii) credit underwriting;
(iv) interest rate risk exposure; and (v) asset quality.
Holding companies which have been registered or have undergone a change in
control within the past two years or which have been deemed by the Federal
Reserve Board to be troubled institutions must give the Federal Reserve Board
thirty days prior notice of the appointment of any senior executive officer or
director. Within the thirty day period, the Federal Reserve Board may approve or
disapprove any such appointment. The Company will meet the criteria which
triggers this additional approval during the first two years after it is
registered.
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<PAGE> 22
Deposit Insurance. The FDIC establishes rates for the payment of premiums
by federally insured banks and thrifts for deposit insurance. A separate Bank
Insurance Fund ("BIF") and Savings Association Insurance Fund ("SAIF") are
maintained for commercial banks and thrifts, respectively, with insurance
premiums from the industry used to offset losses from insurance payouts when
banks and thrifts fail. Due to the high rate of failures in recent years, the
fees that commercial banks and thrifts pay to BIF and SAIF have increased. Since
1993, insured depository institutions like the Bank have paid for deposit
insurance under a risk-based premium system. Under this system, until mid-1995
depositor institutions paid to BIF or SAIF from $0.23 to $0.31 per $100 of
insured deposits depending on its capital levels and risk profile, as determined
by its primary federal regulator on a semi-annual basis. Once the BIF reached
its legally mandated reserve ratio in mid-1995, the FDIC lowered premiums for
well-capitalized banks, eventually to $.00 per $100, with a minimum semiannual
assessment of $1,000. However, in 1996 Congress enacted the Deposit Insurance
Funds Act of 1996, which eliminated this minimum assessment. It also separates,
effective January 1, 1997, the Financial Corporation (FICO) assessment to
service the interest on its bond obligations. The amount assessed on individual
institutions, including the Bank, by FICO will be in addition to the amount paid
for deposit insurance according to the risk-related assessment rate schedule.
FICO assessment rates for the first semiannual period of 1997 were set at 1.30
basis points annually for BIF deposits. Increases in deposit insurance premiums
or changes in risk classification will increase the Bank's cost of funds, and
there can be no assurance that such cost can be passed on the Bank's customers.
Transactions With Affiliates and Insiders. The Bank is subject to the
provisions of Section 23A of the Federal Reserve Act, which place limits on the
amount of loans or extensions of credit to, or investments in, or certain other
transactions with, affiliates and on the amount of advances to third parties
collateralized by the securities or obligations of affiliates. The aggregate of
all covered transactions is limited in amount, as to any one affiliate, to 10%
of the bank's capital and surplus and, as to all affiliates combined, to 20% of
the bank's capital and surplus. Furthermore, within the foregoing limitations as
to amount, each covered transaction must meet specified collateral requirements.
Compliance is also required with certain provisions designed to avoid the taking
of low quality assets.
The Bank is also subject to the provisions of Section 23B of the Federal
Reserve Act which, among other things, prohibit an institution from engaging in
certain transactions with certain affiliates unless the transactions are on
terms substantially the same, or at least as favorable to such institution or
its subsidiaries, as those prevailing at the time for comparable transactions
with non-affiliated companies. The Bank is subject to certain restrictions on
extensions of credit to executive officers, directors, certain principal
shareholders, and their related interests. Such extensions of credit (i) must be
made on substantially the same terms, including interest rates and collateral,
as those prevailing at the time for comparable transactions with third parties
and (ii) must not involve more than the normal risk of repayment or present
other unfavorable features.
Dividends. The Bank is subject to regulatory restrictions on the payment
of dividends, including a prohibition of payment of dividends from its capital.
All dividends must be paid out of the undivided profits then on hand, after
deducting expenses, including losses and bad debts. The Bank must also obtain
approval from the South Carolina Bank Board prior to the payment of any
dividends to the Company. In addition, under FDICIA, the Bank may not pay a
dividend if, after paying the dividend, the Bank would be undercapitalized. See
"-- Capital Regulations" below.
Branching. Under current South Carolina law, the Bank may open branch
offices throughout South Carolina with the prior approval of the South Carolina
Bank Board. In addition, with prior regulatory approval, the Bank will be able
to acquire existing banking operations in South Carolina. Furthermore, federal
legislation has recently been passed which permits interstate branching. The new
law permits out-of-state acquisitions by bank holding companies (subject to veto
by new state law), interstate branching by banks if allowed by state law,
interstate merging by banks, and de novo branching by banks if allowed by state
law. See "-- Recent Legislative Developments." The Organizers currently have no
plans or agreements whereby the Bank would acquire other banks or thrifts.
Community Reinvestment Act. The Community Reinvestment Act requires that,
in connection with examinations of financial institutions within their
respective jurisdictions, a financial institution's primary federal regulator
(this is the FDIC for the Bank) shall evaluate the record of the financial
institutions in meeting the credit
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<PAGE> 23
needs of their local communities, including low and moderate income
neighborhoods, consistent with the safe and sound operation of those
institutions. These factors are also considered in evaluating mergers,
acquisitions, and applications to open a branch or facility.
Other Regulations. Interest and certain other charges collected or
contracted for by the Bank are subject to state usury laws and certain federal
laws concerning interest rates. The Bank's loan operations are also subject to
certain federal laws applicable to credit transactions, such as the federal
Truth-In-Lending Act, governing disclosures of credit terms to consumer
borrowers; the Home Mortgage Disclosure Act of 1975, requiring financial
institutions to provide information to enable the public and public officials to
determine whether a financial institution will be fulfilling its obligation to
help meet the housing needs of the community it serves; the Equal Credit
Opportunity Act, prohibiting discrimination on the basis of race, creed or other
prohibited factors in extending credit; the Fair Credit Reporting Act of 1978,
governing the use and provision of information to credit reporting agencies; the
Fair Debt Collection Act, governing the manner in which consumer debts may be
collected by collection agencies; and the rules and regulations of the various
federal agencies charged with the responsibility of implementing such federal
laws. The deposit operations of the Bank also are subject to the Right to
Financial Privacy Act, which imposes a duty to maintain confidentiality of
consumer financial records and prescribes procedures for complying with
administrative subpoenas of financial records, and the Electronic Funds Transfer
Act and Regulation E issued by the Federal Reserve Board to implement that act,
which governs automatic deposits to and withdrawals from deposit accounts and
customers' rights and liabilities arising from the use of automated teller
machines and other electronic banking services.
CAPITAL REGULATIONS
The federal bank regulatory authorities have adopted risk-based capital
guidelines for banks and bank holding companies that are designed to make
regulatory capital requirements more sensitive to differences in risk profiles
among banks and bank holding companies and account for off-balance sheet items.
The guidelines are minimums, and the federal regulators have noted that banks
and bank holding companies contemplating significant expansion programs should
not allow expansion to diminish their capital ratios and should maintain ratios
in excess of the minimums. Neither the Company nor the Bank has received any
notice indicating that either entity will be subject to higher capital
requirements. The current guidelines require all bank holding companies and
federally-regulated banks to maintain a minimum risk-based total capital ratio
equal to 8%, of which at least 4% must be Tier 1 capital. Tier 1 capital
includes common shareholders' equity, qualifying perpetual preferred stock, and
minority interests in equity accounts of consolidated subsidiaries, but excludes
goodwill and most other intangibles and excludes the allowance for loan and
lease losses. Tier 2 capital includes the excess of any preferred stock not
included in Tier 1 capital, mandatory convertible securities, hybrid capital
instruments, subordinated debt and intermediate term-preferred stock, and
general reserves for loan and lease losses up to 1.25% of risk-weighted assets.
Under these guidelines, banks' and bank holding companies' assets are given
risk-weights of 0%, 20%, 50%, or 100%. In addition, certain off-balance sheet
items are given credit conversion factors to convert them to asset equivalent
amounts to which an appropriate risk-weight will apply. These computations
result in the total risk-weighted assets. Most loans are assigned to the 100%
risk category, except for first mortgage loans fully secured by residential
property and, under certain circumstances, residential construction loans, both
of which carry a 50% rating. Most investment securities are assigned to the 20%
category, except for municipal or state revenue bonds, which have a 50% rating,
and direct obligations of or obligations guaranteed by the United States
Treasury or United States Government agencies, which have a 0% rating.
The federal bank regulatory authorities have also implemented a leverage
ratio, which is equal to Tier 1 capital as a percentage of average total assets
less intangibles, to be used as a supplement to the risk-based guidelines. The
principal objective of the leverage ratio is to place a constraint on the
maximum degree to which a bank holding company may leverage its equity capital
base. The minimum required leverage ratio for top-rated institutions is 3%, but
most institutions are required to maintain an additional cushion of at least 100
to 200 basis points.
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<PAGE> 24
FDICIA established a new capital-based regulatory scheme designed to
promote early intervention for troubled banks which requires the FDIC to choose
the least expensive resolution of bank failures. The new capital-based
regulatory framework contains five categories of compliance with regulatory
capital requirements, including "well capitalized," "adequately capitalized,"
"undercapitalized," "significantly undercapitalized," and "critically
undercapitalized." To qualify as a "well capitalized" institution, a bank must
have a leverage ratio of no less than 5%, a Tier 1 risk-based ratio of no less
than 6%, and a total risk-based capital ratio of no less than 10%, and the bank
must not be under any order or directive from the appropriate regulatory agency
to meet and maintain a specific capital level. Initially, the Organizers expect
the Bank to qualify as "well-capitalized."
Under the FDICIA regulations, the applicable agency can treat an
institution as if it were in the next lower category if the agency determines
(after notice and an opportunity for hearing) that the institution is in an
unsafe or unsound condition or is engaging in an unsafe or unsound practice. The
degree of regulatory scrutiny of a financial institution will increase, and the
permissible activities of the institution will decrease, as it moves downward
through the capital categories. Institutions that fall into one of the three
undercapitalized categories may be required to (i) submit a capital restoration
plan; (ii) raise additional capital; (iii) restrict their growth, deposit
interest rates, and other activities; (iv) improve their management; (v)
eliminate management fees; or (vi) divest themselves of all or a part of their
operations. Bank holding companies controlling financial institutions can be
called upon to boost the institutions' capital and to partially guarantee the
institutions' performance under their capital restoration plans.
Effective January 1, 1997, the FDIC amended the risk-based capital
standards to incorporate a measure for market risk to cover all positions
located in a institution's trading account, and foreign exchange and commodity
positions wherever located. The effect of the rule is that it requires any bank
or bank holding company with significant exposure to market risk to measure the
risk and hold capital commensurate with that risk. Since the Bank does not have
any plans to engage in trading, foreign exchange or commodity position
activities, the rule is not expected to have an effect on the required Bank
capital levels.
These capital guidelines can affect the Company in several ways. After
completion of this offering, the Company's capital levels will initially be more
than adequate. However, rapid growth, poor loan portfolio performance, or poor
earnings performance, or a combination of these factors, could change the
Company's capital position in a relatively short period of time, making an
additional capital infusion necessary.
Failure to meet these capital requirements would mean that a bank would be
required to develop and file a plan with its primary federal banking regulator
describing the means and a schedule for achieving the minimum capital
requirements. In addition, such a bank would generally not receive regulatory
approval of any application that requires the consideration of capital adequacy,
such as a branch or merger application, unless the bank could demonstrate a
reasonable plan to meet the capital requirement within a reasonable period of
time.
ENFORCEMENT POWERS
FIRREA expanded and increased civil and criminal penalties available for
use by the federal regulatory agencies against depository institutions and
certain "institution-affiliated parties" (primarily including management,
employees, and agents of a financial institution, and independent contractors
such as attorneys and accountants and others who participate in the conduct of
the financial institution's affairs). These practices can include the failure of
an institution to timely file required reports or the filing of false or
misleading information or the submission of inaccurate reports. Civil penalties
may be as high as $1,000,000 a day for such violations. Criminal penalties for
some financial institution crimes have been increased to twenty years. In
addition, regulators are provided with greater flexibility to commence
enforcement actions against institutions and institution-affiliated parties.
Possible enforcement actions include the termination of deposit insurance.
Furthermore, FIRREA expanded the appropriate banking agencies' power to issue
cease-and-desist orders that may, among other things, require affirmative action
to correct any harm resulting from a violation or practice, including
restitution, reimbursement, indemnifications or guarantees against loss. A
financial institution may also be ordered to restrict its growth, dispose of
certain assets, rescind agreements or contracts, or take other actions as
determined by the ordering agency to be appropriate.
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<PAGE> 25
RECENT LEGISLATIVE DEVELOPMENTS
In the 1994 legislative session, South Carolina amended its bank holding
act to allow nationwide interstate banking beginning in 1996. The Interstate
Banking Act, passed by Congress in 1994, which allows unrestricted interstate
bank mergers, unrestricted interstate acquisition of banks by bank holding
companies, and interstate de novo branching by banks. As a result of this
legislation, the number of competitors in the Company's market may increase.
However, the Company believes it can compete effectively in the market and that
the legislation will not have a material adverse impact on the Company or the
Bank. From time to time, various bills are introduced in the United States
Congress with respect to the regulation of financial institutions. Certain of
these proposals, if adopted, could significantly change the regulation of banks
and the financial services industry. The Company cannot predict whether any of
these proposals will be adopted or, if adopted, how these proposals would affect
the Company.
EFFECT OF GOVERNMENTAL MONETARY POLICIES
The earnings of the Bank will be affected by domestic economic conditions
and the monetary and fiscal policies of the United States government and its
agencies. The Federal Reserve Board's monetary policies have had, and will
likely continue to have, an important impact on the operating results of
commercial banks through its power to implement national monetary policy in
order, among other things, to curb inflation or combat a recession. The monetary
policies of the Federal Reserve Board have major effects upon the levels of bank
loans, investments and deposits through its open market operations in United
States government securities and through its regulation of the discount rate on
borrowings of member banks and the reserve requirements against member bank
deposits. It is not possible to predict the nature or impact of future changes
in monetary and fiscal policies.
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<PAGE> 26
MANAGEMENT
GENERAL
The following table sets forth the respective names, positions with the
Company and the Bank, and anticipated subscriptions of the Organizers. The
Organizers may elect to purchase more than the shares indicated below.
<TABLE>
<CAPTION>
ANTICIPATED SUBSCRIPTION
-----------------------------------------
PERCENTAGE OF PERCENTAGE OF
NUMBER OF MINIMUM MAXIMUM
NAME POSITION WITH COMPANY/BANK(1) SHARES(2) OFFERING(3) OFFERING(4)
- ---- ----------------------------- --------- ------------- -------------
<S> <C> <C> <C> <C>
Raymond D. Brown..................... Class II Director; Organizer 15,000 2.50% 1.25%
W. Cothran Campbell.................. Class II Director; Organizer 15,000 2.50 1.25
Alan J. George....................... Class II Director; President;
Chief Operating Officer;
Organizer 15,000 2.50 1.25
Margaret Holley-Taylor............... Class I Director; Organizer 15,000 2.50 1.25
James D. McNair...................... Class III Director; Organizer 15,000 2.50 1.25
Clark D. Moore, M.D.................. Class I Director; Organizer 15,000 2.50 1.25
Russell D. Phelon.................... Class III Director; Organizer 30,000 5.00 2.50
Donald W. Thompson................... Class I Director; Organizer 15,000 2.50 1.25
John B. Tomarchio, M.D............... Class I Director; Organizer 15,000 2.50 1.25
Tommy B. Wessinger................... Class III Director; Chairman;
Chief Executive Officer;
Organizer 15,000 2.50 1.25
------- ----- -----
Total...................... 165,000 27.10% 13.75%
======= ===== =====
</TABLE>
- ---------------
(1) The terms of the Class I Directors will expire in 1997; the terms of the
Class II Directors will expire in 1998; and the terms of the Class III
Directors will expire in 1999.
(2) All of such purchases will be at a price of $10.00 per share, the same price
at which shares are being offered to the public. No person is expected to
own more than 5% of the shares of the Common Stock immediately after the
offering. However, Organizers may purchase up to 100% of the shares in the
offering if necessary for the Company to achieve the minimum capital
requirement and also may decide to purchase additional shares in the
offering even if the minimum offering is fully subscribed. Any shares
purchased by the Organizers in excess of their original commitment will be
purchased for investment and not with a view to the resale of such shares.
Although each Organizer has agreed with the other Organizers that he will
subscribe for the number of shares indicated above, neither the Organizers
nor any other subscriber will be obligated to purchase shares except
pursuant to a valid subscription agreement executed after receipt of this
Prospectus. This table includes shares which are expected to be beneficially
owned by the Organizers upon completion of the offering.
(3) Assumes that the minimum number of 610,000 shares are sold in this offering.
(4) Assumes that the maximum number of 1,200,000 shares are sold in this
offering.
All of the Organizers will serve as directors of the Company and the Bank.
Biographical information concerning the Organizers is set forth below.
Raymond D. Brown, 52, is an Organizer and Director of the Company. He
resides in North Augusta, South Carolina and is a graduate of Auburn University
where he received a Bachelors Degree in Building Construction. He is currently
the President and Chief Executive Officer of R.D. Brown Contractors, Inc., a
general construction company specializing in commercial and industrial
construction. He has served on the Chamber of Commerce Board and the NationsBank
Advisory Board in North Augusta, South Carolina.
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<PAGE> 27
W. Cothran Campbell, 69, is an Organizer and Director of the Company and is
a resident of Aiken, South Carolina. He served in the United States Navy in the
South Pacific during World War II and later attended the University of The South
in Sewanee, Tennessee. He is the President of Dogwood Stable, Inc. and the
founder and former Chairman of the Board of Burton-Campbell Advertising Agency
in Atlanta and New York. Mr. Campbell is also a trustee of the Thoroughbred
Owner's and Breeders Association, the National Museum of Racing and Hall of Fame
in Saratoga Springs, New York, and is the 1992 recipient of the John W.
Galbreath Award for entrepreneurial excellence and leadership in the horse
industry. He is currently a member of the Aiken Rotary Club, Piedmont Driving
Club in Atlanta, Woodside Plantation Country Club, Green Boundary Club, Aiken
Tennis Club, and the First Presbyterian Church of Aiken and is a former member
of the Atlanta Rotary Club.
Alan J. George, 47, is an Organizer and Director of the Company. He is a
resident of Aiken, South Carolina and a graduate of the University of South
Carolina, Columbia where he received a Bachelors Degree in English. He is also a
graduate of the Canon Trust School in Charlotte, North Carolina and the Stonier
Graduate School of Banking. He graduated from the University of South Carolina
School of Law in 1974. In 1975 he became Vice President and Trust Officer of F&M
Bank in Aiken, South Carolina. In 1983 he became Vice President and Business
Development Officer and served in this capacity until 1985 when he became Vice
President and Group Head for Citizens & Southern Bank. In 1987 Mr. George became
Senior Vice President and Regional Executive Officer and remained employed in
this position following the merger of Citizens & Southern Bank with NationsBank
until 1996. He is currently the President and Secretary of the Company and is
the proposed President and Chief Operating Officer of the Bank. Mr. George is
Chairman of the Aiken Housing Committee and Chairman and member of the Salvation
Army Boys & Girls Club Advisory Council. He is also a member of the South
Carolina Bar Association, the Aiken County Bar Association, the Aiken Rotary
Club, and the St. Thaddeus Episcopal Church. He is a former member of the Board
of the University of South Carolina Education Foundation, the Investment Policy
Committee, the University of South Carolina Aiken Partnership Board and is past
President and former member of the executive committee of the Trust Division for
the South Carolina Bankers Association. Mr. George is also a member of the
Corporation, Banking and Securities Law Section of the South Carolina Bar
Association.
Margaret Holley-Taylor, 62, is an Organizer and Director of the Company.
She is a resident of Aiken, South Carolina and the owner of Aiken Office Supply.
Ms. Holley-Taylor received the "Small Business Person of the Year" award in 1986
and was a recipient of the Finalist Award as the "Aiken County Small Business
Person of the Year" in 1991. She previously served on the NationsBank Advisory
Board and the Partnership Board of the University of South Carolina, Aiken, and
was on the Board of Directors for the Aiken Chamber of Commerce and the Aiken
United Way, where she also served as Treasurer for three years. She is a member
of the Woodside Plantation Country Club, the Houndslake County Club, the
National Business Products Industry Association, and the Millbrook Baptist
Church.
James D. McNair, 79, is an Organizer and Director of the Company and Vice
Chairman of the Company and the proposed Bank. He resides in Aiken, South
Carolina and attended the University of South Carolina. He is a graduate of
Canon Trust School and the School of Banking of the South at Louisiana State
University. Mr. McNair was the President of Farmers and Merchants Bank of Aiken
from 1963 to 1983 and was Senior Executive Vice President of Citizens & Southern
National Bank from 1983 until 1984. He served as a member of the advisory board
of NationsBank until December 1996. Mr. McNair is a past president of the South
Carolina Association of Independent Bankers and the South Carolina Bankers
Association. He is also a past member of the South Carolina Board of Financial
Institutions and was elected Man of the Year in 1984 by the Greater Aiken
Chamber of Commerce. Mr. McNair is a charter member, organizer and director of
the Lower Savannah Council of Governments and President of the Lower Savannah
Council of Governments Development Corporation. He is an honorary member of the
Aiken Rotary Club and a member of the Friends of Aiken County Museum.
Clark D. Moore, M.D., 52, is an Organizer and a Director of the Company and
is a resident of Aiken, South Carolina. Dr. Moore graduated from the University
of Illinois under a Western Golf Association Evans Scholarship, a National Merit
Scholarship and an Illinois State Scholarship. He received a Masters Degree from
Loyola University, graduated with Honors in Medicine from the St. Louis
University School of Medicine, and trained in general surgery and orthopedic
surgery at the Medical College of Virginia. In 1993 he was awarded the Order of
the Palmetto, the highest civilian award presented by the State of South
Carolina. He is a member of the
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<PAGE> 28
American Association of Orthopedic Surgery, the American Medical Association,
the South Carolina Orthopedic Society, and the Eastern Orthopedic Association.
He is a member of the board of trustees of the Aiken Regional Medical Centers
Hospital and previously served on the Board of Directors of the Hitchcock
Rehabilitation Center. Dr. Moore is the founder and senior partner of Carolina
Orthopedic Associates P.A., founder and developer of the Aiken Medical Center,
and founder of Preferred Care, a physician hospital organization. He is an
active member of the Aiken Chamber of Commerce and a former member of the
advisory board for NationsBank in Aiken, South Carolina.
Russell D. Phelon, 55, is a resident of San Juan, Puerto Rico and is an
Organizer and Director of the Company. He graduated from Rensselaer Polytechnic
Institute in 1963 with a Bachelors Degree in Mechanical Engineering and attended
Babson Institute in Wellesley, Massachusetts from 1963 until 1964. He is the
President and Chief Executive Officer of R.E. Phelon Company, Inc., which is
headquartered in Aiken, South Carolina, and Power Parts, Inc. and has served on
the Board of Directors of Springfield Wire Company in Springfield, Massachusetts
and the board of trustees of Western New England College.
Donald W. Thompson, 51, is an Organizer and Director of the Company and a
resident of North Augusta, South Carolina. He has been President of Windsor
Jewelers, Inc. since 1989 and has been active in the jewelry industry for 35
years. Mr. Thompson is a member of the Augusta Kiwanis.
John B. Tomarchio, M.D., 44, is an Organizer and Director of the Company
and a resident of Aiken, South Carolina. He graduated summa cum laude from
Central Florida University with a Bachelors Degree in Microbiology and is a
graduate of Louisiana State University Medical School. He also received
specialty training at Tulane University Medical Center and the Medical College
of Georgia and is board certified in Emergency Medicine. He is the founder and
former President and Chief Executive Officer of South Carolina Physicians Care,
a physicians multi-specialty group. Dr. Tomarchio currently serves as President
of the Aiken County Medical Society and was appointed to the Board of Directors
of the Aiken-Barnwell Mental Health Association by both South Carolina Governor
Campbell and Governor Beasley. He is a member of the Aiken Judicial-Public
Safety Commission, the City of Aiken Planning Commission, the Aiken County
Indigent Care Commission, and the Vice Chairman of the Aiken Emergency Services
Subcommittee. In addition to his private practice in general and family
medicine, he is also an active member of a number of professional associations
including the Aiken County Medical Society, the South Carolina Hospital Trustee
Association, the South Carolina Medical Association, the American Medical
Association, and the American College of Physicians.
Tommy B. Wessinger, 59, is an Organizer and Director of the Company and is
also the proposed Chairman and Chief Executive Officer of the Bank. He is a
resident of Aiken, South Carolina and attended Clemson University. He is also a
graduate of the University of North Carolina School of Banking, the Graduate
School of Banking of the South, L.S.U., and the Executive Management School at
Columbia University. Mr. Wessinger began his banking career in 1968 with Bankers
Trust of South Carolina, working in various positions and in various cities
throughout South Carolina. In 1982, Mr. Wessinger became a Regional Executive
for Bankers Trust where he was responsible for all branches throughout a ten
county region, including Aiken County. Mr. Wessinger continued to serve in this
role after NCNB acquired Bankers Trust from 1986 until 1992. Following the
merger of C&S Bank and NCNB, which resulted in the formation of NationsBank, Mr.
Wessinger was employed by NationsBank as a Senior Banking Executive and Senior
Commercial Area Executive for the Aiken County area from 1992 until his
retirement in 1995. Mr. Wessinger is a recipient of The Order of the Palmetto
and was named Man of the Year in 1994 by the Greater Aiken Chamber of Commerce.
He is the Vice President and a member of the Board of Directors of Hitchcock
Rehabilitation Center, former Chairman of the Economic Development Board of
Aiken and Edgefield Counties, and former Chairman of the Aiken Tech Foundation
Board. He is also a former member of the Governor's Council of Illiteracy and
Workforce Excellence and the Aiken County Human Relations Council, a current
member of the Aiken Rotary Club, and a member and founder of the Commission on
The Future of Aiken County.
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<PAGE> 29
EMPLOYMENT AGREEMENTS
The Company has entered into employment agreements with both Mr. Wessinger
and Mr. George for five year terms beginning March 3, 1997. At the end of each
term, upon adoption of a resolution by the Board of Directors of the Bank (the
"Board"), each term shall be extended for an additional year so that each
remaining term shall continue to be for five years unless either Mr. Wessinger
or Mr. George provide written notice to the Bank to fix their terms to finite
terms of five years commencing with the later date of March 3, 1997, or the date
of the latest Board resolution extending each term.
Tommy B. Wessinger and the Company entered into an Employment Agreement
pursuant to which Mr. Wessinger will serve as the Chairman and Chief Executive
Officer of the Company and the Bank. The Employment Agreement provides for a
starting salary of $1.00 per annum, plus medical insurance premiums until the
Bank opens for business. Thereafter, Mr. Wessinger will be paid a salary of
$75,000 plus his yearly medical insurance premium. In addition, in lieu of
salary before the Bank opens, on January 2, 1998, the Company will issue 5,000
shares of common stock to Mr. Wessinger for no additional consideration. Mr.
Wessinger will be eligible to participate in any management incentive program of
the Bank or any long-term equity incentive program and will be eligible for
grants of stock options and other awards thereunder. In addition, on the first
anniversary of the opening date of the Bank, he will be eligible to receive a
cash bonus in an amount determined by the Board of Directors (with Mr. Wessinger
abstaining). The agreement provides that the amount of the bonus will be based
on such intangible criteria as the Board shall establish. The Board anticipates
that among the factors it will consider will be Mr. Wessinger's efforts in
connection with obtaining approvals from the South Carolina Bank Board and the
Federal Reserve, and in connection with preparing generally for the Bank's
opening. On each anniversary of the opening date thereafter, Mr. Wessinger will
be eligible to receive a cash bonus equal to 5% of the net pre-tax income of the
Bank (determined in accordance with generally accepted accounting principles) if
the Bank achieves certain performance levels established by the Board of
Directors from time to time. Upon the closing of the offering (or as soon
thereafter as an appropriate stock option plan is adopted by the Company), Mr.
Wessinger will be granted an option to purchase an amount equal to 5% of the
shares sold in the offering (30,500 shares if the minimum number of shares is
sold and 60,000 shares if the maximum number is sold) at $10.00 per share. The
options will vest at the rate of one-fifth per year for each of the first five
anniversaries of the opening date, subject to Mr. Wessinger being employed by
the Company on such date and meeting certain performance criteria. The options
will have a term of ten years. In addition, the Company will grant Mr. Wessinger
an option to purchase 10,000 shares of common stock which will vest as to 2,000
shares on each of December 31, 1998, 1999, 2000, 2001, and 2002, but in each
case only if Mr. Wessinger remains employed by the Company on such date.
Additionally, Mr. Wessinger will participate in the Bank's retirement, welfare
and other benefit programs and is entitled to reimbursement for automobile
expenses, club dues, and travel and business expenses.
Alan J. George and the Company entered into an Employment Agreement
pursuant to which Mr. George will serve as the President and Chief Operating
Officer of the Company and the Bank. The Employment Agreement provides for a
starting salary of $75,000 per annum, plus medical insurance premiums until the
Bank opens for business. Thereafter, Mr. George will be paid a salary of $90,000
plus his yearly medical insurance premium. Mr. George will be eligible to
participate in any management incentive program of the Bank or any long-term
equity incentive program and will be eligible for grants of stock options and
other awards thereunder. In addition, on the first anniversary of the opening
date of the Bank, he will be eligible to receive a cash bonus in an amount
determined by the Board of Directors (with Mr. George abstaining). The agreement
provides that the amount of the bonus will be based on such intangible criteria
as the Board shall establish. The Board anticipates that among the factors it
will consider will be Mr. George's efforts in connection with obtaining
approvals from the South Carolina Bank Board and the Federal Reserve, and in
connection with preparing generally for the Bank's opening. On each anniversary
of the opening date thereafter, Mr. George will be eligible to receive a cash
bonus equal to 5% of the net pre-tax income of the Bank (determined in
accordance with generally accepted accounting principles) if the Bank achieves
certain performance levels established by the Board of Directors from time to
time. Upon the closing of the offering (or as soon thereafter as an appropriate
stock option plan is adopted by the Company), Mr. George will be granted an
option to purchase an amount equal to 5% of the shares sold in the offering
(30,500 shares if the minimum number of shares is sold and 60,000 shares if the
maximum number is
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<PAGE> 30
sold) at $10.00 per share. The options will vest at the rate of one-fifth per
year for each of the first five anniversaries of the opening date, subject to
Mr. George being employed by the Company on such date and meeting certain
performance criteria. The options will have a term of ten years. Additionally,
Mr. George will participate in the Bank's retirement, welfare and other benefit
programs and is entitled to a life insurance policy and an accident liability
policy and reimbursement for automobile expenses, club dues, and travel and
business expenses. The Company will maintain a term life insurance policy on Mr.
George providing for death benefits in the amount of $1,000,000 payable to the
Organizers and $1,000,000 payable to Mr. George's family.
If the Company terminates either Mr. Wessinger's or Mr. George's employment
without cause or if Mr. Wessinger's or Mr. George's employment is terminated due
to a sale, merger or dissolution of the Company or the Bank, the Company will be
obligated to continue their salaries and bonuses for the first twelve months
thereafter plus one-half of their salaries and bonuses for the second twelve
months thereafter. Furthermore, the Company must remove any restrictions on
outstanding incentive awards so that all such awards vest immediately and the
Company must continue to provide medical benefits to Mr. Wessinger and Mr.
George until they reach the age of 65.
In addition, each employment agreement provides that following termination
of their employment with the Bank and for a period of twelve months thereafter,
neither Mr. Wessinger, nor Mr. George, may (i) be employed in the banking
business as a director, officer at the vice-president level or higher, or
organizer or promoter of, or provide executive management services to, any
financial institution within Aiken County, (ii) solicit major customers of the
Bank for the purpose of providing financial services, or (iii) solicit employees
of the Bank for employment.
DIRECTOR COMPENSATION
The Organizers do not intend for the Company or the Bank to pay directors'
fees until such time as the Bank is cumulatively profitable. However, the
Company and the Bank reserve the right to pay directors' fees.
INTERESTS OF MANAGEMENT AND OTHERS IN CERTAIN TRANSACTIONS
The Company has entered into an agreement to lease the Executive Office
property with Margaret Holley-Taylor. The Company believes that this agreement
was entered into on terms no less favorable to the Company than could be
obtained from an unaffiliated third party. The Company and the Bank expect to
have banking and other transactions in the ordinary course of business with
Organizers, directors, and officers of the Company and the Bank and their
affiliates, including members of their families or corporations, partnerships,
or other organizations in which such Organizers, officers, or directors have a
controlling interest, on substantially the same terms (including price, or
interest rates and collateral) as those prevailing at the time for comparable
transactions with unrelated parties. Such transactions are not expected to
involve more than the normal risk of collectibility nor present other
unfavorable features to the Company and the Bank. The Bank is subject to a limit
on the aggregate amount it could lend to its and the Company's directors and
officers as a group equal to its unimpaired capital and surplus (or, under a
regulatory exemption available to banks with less than $100 million in deposits,
twice that amount). Loans to individual directors and officers must also comply
with the Bank's lending policies and statutory lending limits, and directors
with a personal interest in any loan application will be excluded from the
consideration of such loan application. The Company intends for all of its
transactions with Organizers or other affiliates of the Company or the Bank to
be on terms no less favorable to the Company than could be obtained from an
unaffiliated third party and to be approved by a majority of the Company's
disinterested directors.
EXCULPATION AND INDEMNIFICATION
The Articles of Incorporation of the Company contain a provision which
eliminates the liability of a director to the Company or its shareholders for
monetary damages for breach of the duty of care or any other duty as a director.
This provision does not eliminate such liability to the extent the director
engaged in willful misconduct or a knowing violation of criminal law or of any
federal or state securities law, including, without limitation, laws proscribing
insider trading or manipulation of the market for any security.
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<PAGE> 31
The Bylaws of the Company require the Company to indemnify any person who
was, is, or is threatened to be made a defendant or respondent in any
threatened, pending, or completed action, suit, or proceeding, whether civil,
criminal, administrative, or investigative, by reason of service by such person
as a director of the Company or the Bank or any other corporation which he
served as such at the request of the Company. Except as noted in the next
paragraph, directors are entitled to be indemnified against judgments,
penalties, fines, settlements, and reasonable expenses actually incurred by the
director in connection with the proceeding. Directors are also entitled to have
the Company advance any such expenses prior to final disposition of the
proceeding, upon delivery of a written affirmation by the director of his good
faith belief that the standard of conduct necessary for indemnification has been
met and a written undertaking to repay the amounts advanced if it is ultimately
determined that the standard of conduct has not been met.
Under the Bylaws, indemnification will be disallowed if it is established
that the director (i) appropriated, in violation of his duties, any business
opportunity of the Company, (ii) engaged in willful misconduct or a knowing
violation of law, (iii) permitted any unlawful distribution, or (iv) derived an
improper personal benefit. In addition to the Bylaws of the Company, Section
33-8-520 of the South Carolina Business Corporation Act of 1988 (the
"Corporation Act") requires that "a corporation indemnify a director who was
wholly successful, on the merits or otherwise, in the defense of any proceeding
to which he was a party because he is or was a director of the corporation
against reasonable expenses incurred by him in connection with the proceeding."
The Corporation Act also provides that upon application of a director a court
may order indemnification if it determines that the director is entitled to such
indemnification under the applicable standard of the Corporation Act.
The Board of Directors also has the authority to extend to officers,
employees, and agents the same indemnification rights held by directors, subject
to all of the accompanying conditions and obligations. The Board of Directors
has extended or intends to extend indemnification rights to all of its executive
officers.
DESCRIPTION OF CAPITAL STOCK OF THE COMPANY
GENERAL
The authorized capital stock of the Company consists of 10,000,000 shares
of common stock, par value $.01 per share, and 10,000,000 shares of preferred
stock, par value $.01 per share (the "Preferred Stock"). The following summary
describes the material terms of the Company's capital stock. Reference is made
to the Articles of Incorporation of the Company, which is filed as an exhibit to
the Registration Statement of which this Prospectus forms a part, for a detailed
description of the provisions thereof summarized below.
COMMON STOCK
Holders of shares of the Common Stock are entitled to receive such
dividends as may from time to time be declared by the Board of Directors out of
funds legally available therefor. The Company does not plan to declare any
dividends in the immediate future. See "Dividend Policy." Holders of Common
Stock are entitled to one vote per share on all matters on which the holders of
Common Stock are entitled to vote and do not have any cumulative voting rights.
Shareholders have no preemptive, conversion, redemption or sinking fund rights.
In the event of a liquidation, dissolution or winding-up of the Company, holders
of Common Stock are entitled to share equally and ratably in the assets of the
Company, if any, remaining after the payment of all debts and liabilities of the
Company and the liquidation preference of any outstanding Preferred Stock. The
outstanding shares of Common Stock are, and the shares of Common Stock offered
by the Company hereby when issued will be, fully paid and nonassessable. The
rights, preferences and privileges of holders of Common Stock are subject to any
classes or series of Preferred Stock that the Company may issue in the future.
There currently is no market for the shares and, although the Company has
filed a registration statement with the SEC to register the issuance of the
Common Stock in the offering under the Securities Act of 1933, it is not likely
that any trading market will develop for the shares in the future. There are no
present plans for the Common Stock to be traded on any stock exchange or in the
over-the-counter market.
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PREFERRED STOCK
The Articles provide that the Board of Directors is authorized, without
further action by the holders of the Common Stock, to provide for the issuance
of shares of Preferred Stock in one or more classes or series and to fix the
designations, powers, preferences, and relative, participating, optional and
other rights, qualifications, limitations, and restrictions thereof, including
the dividend rate, conversion rights, voting rights, redemption price, and
liquidation preference, and to fix the number of shares to be included in any
such classes or series. Any Preferred Stock so issued may rank senior to the
Common Stock with respect to the payment of dividends or amounts upon
liquidation, dissolution or winding-up, or both. In addition, any such shares of
Preferred Stock may have class or series voting rights. Upon completion of this
offering, the Company will not have any shares of Preferred Stock outstanding.
Issuances of Preferred Stock, while providing the Company with flexibility in
connection with general corporate purposes, may, among other things, have an
adverse effect on the rights of holders of Common Stock, and in certain
circumstances such issuances could have the effect of decreasing the market
price of the Common Stock. The Company has no present plan to issue any shares
of Preferred Stock.
CERTAIN ANTITAKEOVER EFFECTS
The provisions of the Articles, the Bylaws and the South Carolina
corporation law summarized in the following paragraphs may be deemed to have
antitakeover effects and may delay, defer, or prevent a tender offer or takeover
attempt that a shareholder might consider to be in such shareholder's best
interest, including those attempts that might result in a premium over the
market price for the shares held by shareholders, and may make removal of
management more difficult.
Authorized but Unissued Stock. The authorized but unissued shares of
Common Stock and Preferred Stock will be available for future issuance without
shareholder approval. These additional shares may be used for a variety of
corporate purposes, including future public offerings to raise additional
capital, corporate acquisitions, and employee benefit plans. The existence of
authorized but unissued and unreserved shares of Common Stock and Preferred
Stock may enable the Board of Directors to issue shares to persons friendly to
current management, which could render more difficult or discourage any attempt
to obtain control of the Company by means of a proxy contest, tender offer,
merger or otherwise, and thereby protect the continuity of the Company's
management.
Number of Directors. The Bylaws provide that the number of directors shall
be fixed from time to time by resolution by at least a majority of the directors
then in office, but may not consist of fewer than five nor more than twenty-five
members.
Classified Board of Directors. The Articles and Bylaws divide the Board of
Directors into three classes of directors serving staggered three-year terms. As
a result, approximately one-third of the Board of Directors will be elected at
each annual meeting of shareholders. The classification of directors, together
with the provisions in the Articles and Bylaws described below that limit the
ability of shareholders to remove directors and that permit the remaining
directors to fill any vacancies on the Board of Directors, will have the effect
of making it more difficult for shareholders to change the composition of the
Board of Directors. As a result, at least two annual meetings of shareholders
may be required for the shareholders to change a majority of the directors,
whether or not a change in the Board of Directors would be beneficial to the
Company and its shareholders and whether or not a majority of the Company's
shareholders believes that such a change would be desirable.
Removal of Directors and Filling Vacancies. The Articles of Incorporation
provide that shareholders may remove a director for without cause only by the
affirmative vote of the holders of at least a majority of the Company's
outstanding voting securities. The Bylaws also provide that all vacancies on the
Board of Directors, including those resulting from an increase in the number of
directors, may be filled by a majority of the remaining directors, even if they
do not constitute a quorum. When one or more directors resign from the Board of
Directors effective at a future date, a majority of directors then in office,
including the directors who are to resign, may vote on filling the vacancy.
Advance Notice Requirements for Shareholder Proposals and Director
Nominations. The Bylaws establish advance notice procedures with regard to
shareholder proposals and the nomination, other than by or at the
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<PAGE> 33
direction of the Board of Directors or a committee thereof, of candidates for
election as directors. These procedures provide that the notice of shareholder
proposals and shareholder nominations for the election of directors at any
meeting of shareholders must be in writing and be received by the Secretary of
the Company not later than ninety days prior to the meeting. The Company may
reject a shareholder proposal or nomination that is not made in accordance with
such procedures.
Limitations on Shareholders' Action by Written Consent. The Corporation
Act permits shareholder action by written consent in lieu of a meeting only if
such consent is unanimous.
Certain Nomination Requirements. Pursuant to the Bylaws, the Company has
established certain nomination requirements for an individual to be elected as a
director of the Company at any annual or special meeting of the shareholders,
including that the nominating party provide the Company within a specified time
prior to the meeting (i) notice that such party intends to nominate the proposed
director; (ii) the name of and certain biographical information on the nominee;
and (iii) a statement that the nominee has consented to the nomination. The
chairman of any Shareholders' meeting may, for good cause shown, waive the
operation of these provisions. These provisions could reduce the likelihood that
a third party would nominate and elect individuals to serve on the Board of
Directors.
SHARES ELIGIBLE FOR FUTURE SALE
Upon completion of this offering, the Company will have a minimum of
610,000 and a maximum of 1,200,000 shares of Common Stock outstanding. The
shares sold in this offering will be freely tradable, without restriction or
registration under the Securities Act, except for shares purchased by
"affiliates" of the Company, which will be subject to resale restrictions under
the Securities Act. An affiliate of the issuer is defined in Rule 144 under the
Securities Act as a person that directly or indirectly, through one or more
intermediaries, controls, is controlled by, or is under common control with the
issuer. Rule 405 under the Securities Act defines the term "control" to mean the
possession, direct or indirect, of the power to direct or cause the direction of
the management and policies of the person whether through the ownership of
voting securities, by contract or otherwise. Directors of the Company and the
Bank will likely be deemed to be affiliates. These securities held by affiliates
may be sold without registration in accordance with the provisions of Rule 144
or another exemption from registration.
In general, under Rule 144, an affiliate of the Company or a person holding
restricted shares may sell, within any three-month period, a number of shares no
greater than 1% of the then outstanding shares of the Common Stock or the
average weekly trading volume of the Common Stock during the four calendar weeks
preceding the sale, whichever is greater. Rule 144 also requires that the
securities must be sold in "brokers' transactions," as defined in the Securities
Act, and the person selling the securities may not solicit orders or make any
payment in connection with the offer or sale of securities to any person other
than the broker who executes the order to sell the securities. This requirement
may make the sale of the Common Stock by affiliates of the Company pursuant to
Rule 144 difficult if no trading market develops in the Common Stock. Rule 144
also requires persons holding restricted securities to hold the shares for at
least one year prior to sale.
LEGAL MATTERS
The validity of the Common Stock offered hereby will be passed upon for the
Company by Nelson Mullins Riley & Scarborough, L.L.P., Atlanta, Georgia.
EXPERTS
The financial statements of the Company dated April 4, 1997, and for the
period from December 3, 1996 (inception), until March 31, 1997, have been
audited by Elliott, Davis & Company, L.L.P., as stated in their report appearing
elsewhere herein, and have been so included in reliance on the report of such
firm given upon their authority as an expert in accounting and auditing.
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PEOPLE'S COMMUNITY CAPITAL CORPORATION
(A DEVELOPMENT STAGE ENTERPRISE)
REPORT ON FINANCIAL STATEMENTS
FOR THE PERIOD FROM DECEMBER 3, 1996
(DATE OF INCEPTION), TO MARCH 31, 1997
<PAGE> 35
PEOPLE'S COMMUNITY CAPITAL CORPORATION
(A DEVELOPMENT STAGE ENTERPRISE)
AIKEN, SOUTH CAROLINA
CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS.......... F-2
FINANCIAL STATEMENTS
Balance sheet............................................. F-3
Statement of income....................................... F-4
Statement of changes in stockholder's equity.............. F-5
Statement of cash flows................................... F-6
NOTES TO FINANCIAL STATEMENTS............................... F-7
</TABLE>
F-1
<PAGE> 36
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
Board of Directors
People's Community Capital Corporation
Aiken, South Carolina
We have audited the accompanying balance sheet of People's Community
Capital Corporation (a development stage enterprise) as of March 31, 1997 and
the related statements of income, changes in stockholder's equity, and cash
flows for the period from December 3, 1996 (date of inception), to March 31,
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 People's Community Capital
Corporation (a development stage enterprise) as of March 31, 1997 and the
results of its operations and its cash flows for the period from December 3,
1996 (date of inception), to March 31, 1997, in conformity with generally
accepted accounting principles.
Elliott, Davis & Company, L.L.P.
April 4, 1997
F-2
<PAGE> 37
PEOPLE'S COMMUNITY CAPITAL CORPORATION
(A DEVELOPMENT STAGE ENTERPRISE)
BALANCE SHEET
MARCH 31, 1997
<TABLE>
<S> <C>
ASSETS
Cash and cash equivalents................................... $181,280
Organization costs.......................................... 13,289
Deferred registration costs................................. 31,008
Purchase option............................................. 7,500
Deposits.................................................... 7,500
--------
Total assets...................................... $240,577
========
LIABILITIES AND STOCKHOLDER'S EQUITY
LIABILITIES
Accounts payable.......................................... $ 13,260
Accrued interest.......................................... 1,740
Due to organizers......................................... 230,000
--------
Total liabilities................................. $244,964
--------
STOCKHOLDER'S EQUITY
Common stock, $.01 par value, 10,000,000 shares
authorized, 10 shares issued and outstanding........... --
Additional paid-in-capital................................ 100
Deficit accumulated during the development stage.......... (4,487)
--------
Total stockholder's equity........................ (4,387)
--------
Total liabilities and stockholder's equity........ $240,577
========
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-3
<PAGE> 38
PEOPLE'S COMMUNITY CAPITAL CORPORATION
(A DEVELOPMENT STAGE ENTERPRISE)
STATEMENT OF INCOME
FOR THE PERIOD FROM DECEMBER 3, 1996 (DATE OF INCEPTION), TO MARCH 31, 1997
<TABLE>
<S> <C>
REVENUES
Interest income........................................... $ 220
-------
Total revenues.................................... 220
-------
EXPENSES
Office rent............................................... 2,000
Office expenses........................................... 1,003
Interest.................................................. 1,704
-------
Total expenses.................................... $ 4,707
-------
Loss before income tax provision............................ (4,487)
PROVISION FOR INCOME TAXES.................................. --
-------
NET LOSS.................................................... $(4,487)
=======
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-4
<PAGE> 39
PEOPLE'S COMMUNITY CAPITAL CORPORATION
(A DEVELOPMENT STAGE ENTERPRISE)
STATEMENT OF CHANGES IN STOCKHOLDER'S EQUITY
FOR THE PERIOD FROM DECEMBER 3, 1996 (DATE OF INCEPTION), TO MARCH 31, 1997
<TABLE>
<CAPTION>
ADDITIONAL (DEFICIT) ACCUMULATED
PAID-IN DURING THE
COMMON STOCK CAPITAL DEVELOPMENT STAGE TOTAL
------------ ---------- --------------------- -------
<S> <C> <C> <C> <C>
Balances -- December 3, 1996 (date of
inception)................................ $ -- $ -- $ -- $ --
Issuance of common stock (10 shares)........ -- 100 -- 100
Net loss.................................... -- -- (4,487) $(4,387)
-------- ---- -------- -------
Balances -- March 31, 1997.................. $ -- $100 $(4,487) $(4,387)
======== ==== ======== =======
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-5
<PAGE> 40
PEOPLE'S COMMUNITY CAPITAL CORPORATION
(A DEVELOPMENT STAGE ENTERPRISE)
STATEMENT OF CASH FLOWS
FOR THE PERIOD FROM DECEMBER 3, 1996 (DATE OF INCEPTION), TO MARCH 31, 1997
<TABLE>
<S> <C>
NET CASH USED FOR PRE-OPERATING ACTIVITIES.................. $ (4,487)
Net Loss..................................................
Adjustments to reconcile net income to net cash used by
pre-operating activities...............................
Changes in deferred and accrued amounts
Organization costs..................................... (13,289)
Deferred registration costs............................ (31,008)
Deposits............................................... (7,500)
Accounts payable....................................... 13,260
Accrued interest....................................... 1,704
--------
Net cash used by pre-operating activities......... (41,320)
--------
INVESTING ACTIVITIES
Deposit on real estate option............................. (7,500)
--------
Net cash used for investing activities............ (7,500)
--------
FINANCING ACTIVITIES
Issuance of common stock.................................. 100
Borrowings from organizers................................ 230,000
--------
Net cash provided by financing activities......... 230,100
--------
Net increase in cash.............................. 181,280
CASH AND CASH EQUIVALENTS, DECEMBER 3, 1996 (date of
inception)................................................ --
--------
CASH AND CASH EQUIVALENTS, MARCH 31, 1997................... $181,280
--------
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-6
<PAGE> 41
PEOPLES'S COMMUNITY CAPITAL CORPORATION
(A DEVELOPMENT STAGE ENTERPRISE)
NOTES TO FINANCIAL STATEMENTS
NOTE 1 -- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND ACTIVITIES
BUSINESS ACTIVITY AND ORGANIZATION
People's Community Capital Corporation (the Company), was incorporated on
February 26, 1997, under the laws of the State of South Carolina for the purpose
of operating as a bank holding company pursuant to the federal Bank Holding
Company Act of 1956, as amended. The group of organizers initiated several
financial transactions on behalf of the Company prior to the date of
incorporation and as early as December 3, 1996, the date of inception.
The Company is development stage enterprise as defined by Statement of
Financial Accounting Standards No. 7, "Accounting and Reporting by Development
Stage Enterprises," as it devotes substantially all its efforts to establishing
a new business. The Company's planned principal operations have not commenced
and revenue has not been recognized from the planned principal operations.
The Company authorized the issuance of 10,000,000 shares of common stock,
$.01 par value per share. In addition to the above common stock, the Company
also has the authority, exercisable by its Board of Directors, to issue up to
10,000,000 shares of preferred stock, $.01 par value per share.
The Company intends to file a Registration Statement with the Securities
and Exchange Commission to sell a maximum of 1,200,000 shares of its common
stock at $10 per share, through a public offering. The Company will use a
minimum of $6,000,000 and a maximum of $7,000,000 of the net proceeds of the
offering to capitalize its proposed state banking subsidiary, People's Community
Bank of South Carolina (the "Bank"). The Company will retain the balance of the
proceeds and intends initially to invest it in United States government
securities or as a deposit with the Bank. In the long-term, the Company will use
these sums for working capital and other general corporate purposes, including
payments of expenses of the Company and the provision of additional capital for
the Bank, if necessary.
YEAR-END
The Company has adopted a fiscal year ending on December 31, effective for
the period ending December 31, 1997.
ESTIMATES
The financial statements include estimates and assumptions that affect the
Company's financial position and results of operations and disclosure of
contingent assets and liabilities. Actual results could differ from these
estimates.
CASH AND CASH EQUIVALENTS
The Company considers all highly liquid investments with original
maturities of three months or less to be cash equivalents. The Company places
its temporary cash investments with high credit quality financial institutions.
At times such investments may be in excess of the FDIC insurance limits.
ORGANIZATION COSTS
Organization costs are costs that have been incurred in the expectation
that they will generate future revenues or otherwise benefit periods after the
Company begins planned operations. Organization costs include incorporation,
legal and consulting fees incurred in connection with establishing the Company.
Organization costs are capitalized when incurred, and are amortized over a
period of sixty months beginning in the period in which the Company commences
its planned operations.
F-7
<PAGE> 42
PEOPLES'S COMMUNITY CAPITAL CORPORATION
(A DEVELOPMENT STAGE ENTERPRISE)
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
DEFERRED REGISTRATION COSTS
Deferred registration costs are costs incurred by the Company in connection
with the offering and issuance of its stock. The deferred registration costs
will be deducted from the Company's additional paid-in-capital after the stock
offering. If the stock offering is deemed unsuccessful, all deferred
registration costs will be charged to operations during the period in which the
offering is deemed unsuccessful.
INCOME TAXES
Income taxes are provided for the tax effects of transactions reported in
the financial statements and consist of taxes currently due plus deferred taxes
related primarily to differences between the financial reporting and income tax
bases of assets and liabilities and are adjusted for changes in tax laws and tax
rates when those changes are enacted. Deferred tax assets and liabilities
represent the future tax consequences of those differences, which will either be
taxable or deductible when the assets and liabilities are recovered or settled.
Deferred taxes may also be recognized for operating losses that are available to
offset future taxable income. Valuation allowances are established when
necessary to reduce deferred tax assets to the amount expected to be realized.
At March 31, 1997, no taxable income had been generated and, therefore, no
tax provision has been included in these financial statements.
NOTE 2 -- PURCHASE OPTION
On March 20, the Company entered into an Option Agreement with an unrelated
party to acquire certain real property for a total purchase price of $875,000.
The property is comprised of two former bank locations in Aiken and North
Augusta, South Carolina, and will be used as the Company's primary banking
locations. A deposit of $7,500 allows the Company 30 days to consummate the
purchase of the property. If the purchase is not consummated at the end of the
30 day period an additional 45 days may be granted upon the deposit of an
additional $10,000. All deposits are applied against the purchase price of the
property.
NOTE 3 -- DUE TO ORGANIZERS
The group of ten organizers has advanced to the Company a total of $230,000
as of March 31, 1997, in order to fund all of the Company's organizational and
pre-opening activities. The organizers will be reimbursed for these advances out
of the proceeds of the initial capitalization of the bank. Interest has been
accrued on the advances based on a 8.25% interest rate from the date of the
advances to March 31, 1997.
NOTE 4 -- COMMITMENTS
The Company has entered into three Agreements with a bank consulting firm,
a law firm and a bank to assist it in preparing and filing all organizational,
incorporation, and bank holding company applications and to assist in preparing
a registration statement and consummating the Company's initial offering. The
aggregate cost of the services is expected to be approximately $75,000.
The Company also leases office space under a non-cancelable operating lease
which expires in August, 1997. The lease requires monthly lease payments of
$2,000 and includes three options for consecutive six-month extensions. The
minimum future lease payments required under this lease are $10,000.
F-8
<PAGE> 43
PEOPLE'S COMMUNITY CAPITAL CORPORATION
TO: People's Community Capital Corporation
P.O. Box 313
Aiken, South Carolina 29802
Gentlemen:
You have informed me that People's Community Capital Corporation, a South
Carolina corporation (the "Company"), is offering up to 1,200,000 shares of its
Common Stock, par value $.01 per share (the "Common Stock"), at a price of
$10.00 per share payable as provided herein and as described in and offered
pursuant to the Prospectus furnished with this Subscription Agreement to the
undersigned (the "Prospectus").
1. Subscription. Subject to the terms and conditions hereof, the
undersigned hereby tenders this subscription, together with payment in
United States currency by check, bank draft, or money order payable to "The
Bankers Bank as Escrow Agent for People's Community Capital Corporation"
the amount indicated below (the "Funds"), representing the payment of
$10.00 per share for the number of shares of Common Stock indicated below.
The total subscription price must be paid at the time the Subscription
Agreement is executed.
2. Acceptance of Subscription. It is understood and agreed that the
Company shall have the right to accept or reject this subscription in whole
or in part, for any reason whatsoever. The Company may reduce the number of
shares for which the undersigned has subscribed, indicating acceptance of
less than all of the shares subscribed on its written form of acceptance.
3. Acknowledgements. The undersigned hereby acknowledges that he or
she has received a copy of the Prospectus. This Subscription Agreement
creates a legally binding obligation and the undersigned agrees to be bound
by the terms of this Agreement.
4. Revocation. The undersigned agrees that once this Subscription
Agreement is tendered to the Company, it may not be withdrawn and that this
Agreement shall survive the death or disability of the undersigned.
BY EXECUTING THIS AGREEMENT, THE SUBSCRIBER IS NOT WAIVING ANY RIGHTS HE OR
SHE MAY HAVE UNDER FEDERAL SECURITIES LAWS, INCLUDING THE SECURITIES ACT OF 1933
AND THE SECURITIES EXCHANGE ACT OF 1934.
THE SHARES OF COMMON STOCK OFFERED HEREBY ARE NOT SAVINGS ACCOUNTS OR
SAVINGS DEPOSITS ACCOUNTS AND ARE NOT INSURED BY THE FEDERAL DEPOSIT INSURANCE
CORPORATION OR ANY OTHER GOVERNMENTAL AGENCY.
A-1
<PAGE> 44
Please indicate in the space provided below the exact name or names and
address in which the stock certificate representing shares subscribed for
hereunder should be registered.
<TABLE>
<S> <C>
- ------------------------------------ ----------------------------------------------------------------------
Number of Shares Subscribed Name or Names of Subscribers (Please Print)
for (minimum shares)
------------------------------------ ----------------------------------------------------------------------
Total Subscription Price at Please indicate form of ownership desired (individual,
$10.00 per share (funds must be joint tenants with right of survivorship, tenants in
enclosed) common, trust corporation, partnership, custodian, etc.)
Date:
(L.S.)
----------------------------------- -------------------------------------------------------------------
Signature of Subscriber(s)*
(L.S.)
- ------------------------------------ -------------------------------------------------------------------
Social Security Number or Federal Signature of Subscriber(s)*
Taxpayer Identification Number
Street (Residence) Address:
----------------------------------------------------------------------
----------------------------------------------------------------------
----------------------------------------------------------------------
City, State and Zip Code
</TABLE>
*When signing as attorney, trustee, administrator, or guardian, please give
your full title as such. If a corporation, please sign in full corporate name by
president or other authorized officer. In the case of joint tenants or tenants
in common, each owner must sign.
TO BE COMPLETED BY THE COMPANY:
Accepted as of , 199 , as to shares.
PEOPLE'S COMMUNITY CAPITAL CORPORATION
--------------------------------------
By:
Title:
A-2
<PAGE> 45
FEDERAL INCOME TAX BACKUP WITHHOLDING
In order to prevent the application of federal income tax backup
withholding, each subscriber must provide the Escrow Agent with a correct
Taxpayer Identification Number ("TIN"). An individual's social security number
is his or her TIN. The TIN should be provided in the space provided in the
Substitute Form W-9, which is set forth below.
Under federal income tax law, any person who is required to furnish his or
her correct TIN to another person, and who fails to comply with such
requirements, may be subject to a $50 penalty imposed by the IRS.
Backup withholding is not an additional tax. Rather, the tax liability of
persons subject to backup withholding will be reduced by the amount of tax
withheld. If backup withholding results in an overpayment of taxes, a refund may
be obtained from the IRS. Certain taxpayers, including all corporations, are not
subject to these backup withholding and reporting requirements.
If the shareholder has not been issued a TIN and has applied for a TIN or
intends to apply for a TIN in the near future, "Applied For" should be written
in the space provided for the TIN on the Substitute Form W-9.
SUBSTITUTE FORM W-9
Under penalties of perjury, I certify that: (i) The number shown on this
form is my correct Taxpayer Identification Number (or I am waiting for a
Taxpayer Identification Number to be issued to me), and (ii) I am not subject to
backup withholding because: (a) I am exempt from backup withholding; or (b) I
have not been notified by the Internal Revenue Service ("IRS") that I am subject
to backup withholding as a result of a failure to report all interest or
dividends; or (c) the IRS has notified me that I am no longer subject to backup
withholding.
You must cross out item (ii) above if you have been notified by the IRS
that you are subject to backup withholding because of underreporting interest or
dividends on your tax return. However, if after being notified by the IRS that
you were subject to backup withholding you received another notification from
the IRS that you are not longer subject to backup withholding, do not cross out
item (ii).
Each subscriber should complete this section.
<TABLE>
<S> <C>
- -------------------------------------------- --------------------------------------------
Signature of Subscriber Signature of Subscriber
- -------------------------------------------- --------------------------------------------
Printed Name Printed Name
- -------------------------------------------- --------------------------------------------
Social Security or Employer Social Security or Employer
Identification No. Identification No.
</TABLE>
A-3
<PAGE> 46
======================================================
NO DEALER, SALESPERSON OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS
PROSPECTUS IN CONNECTION WITH THE OFFER MADE HEREBY. IF GIVEN OR MADE, SUCH
INFORMATION AND REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED BY THE COMPANY. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL
OR SOLICITATION OF AN OFFER TO BUY ANY OF THE SECURITIES OFFERED HEREBY IN ANY
JURISDICTION TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER IN SUCH
JURISDICTION. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE
HEREUNDER AT ANY TIME SHALL UNDER ANY CIRCUMSTANCES CREATE ANY IMPLICATION THAT
THE INFORMATION HEREIN IS CORRECT AT ANY TIME AFTER THE DATE HEREOF.
---------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Reports to Shareholders............... 2
Additional Information................ 2
Summary............................... 3
Risk Factors.......................... 6
The Offering.......................... 9
Use of Proceeds....................... 11
Capitalization........................ 14
Dividend Policy....................... 15
Proposed Business..................... 15
Supervision and Regulation............ 18
Management............................ 25
Description of Capital Stock of the
Company............................. 30
Legal Matters......................... 32
Experts............................... 32
Financial Statements.................. F-1
Subscription Agreement................ A-1
</TABLE>
---------------------
UNTIL , 1997, ALL DEALERS EFFECTING TRANSACTIONS IN THE REGISTERED
SECURITIES, WHETHER OR NOT PARTICIPATING IN THIS DISTRIBUTION, MAY BE REQUIRED
TO DELIVER A PROSPECTUS. THIS IS IN ADDITION TO THE OBLIGATION OF DEALERS TO
DELIVER A PROSPECTUS WHEN ACTING AS UNDERWRITERS AND WITH RESPECT TO THEIR
UNSOLD ALLOTMENTS OR SUBSCRIPTIONS.
======================================================
======================================================
1,200,000 SHARES
PEOPLE'S COMMUNITY
CAPITAL CORPORATION
A PROPOSED HOLDING COMPANY FOR
PEOPLE'S COMMUNITY BANK
OF SOUTH CAROLINA
(PROPOSED)
COMMON STOCK
-------------------
PROSPECTUS
-------------------
, 1997
======================================================
<PAGE> 47
PART II
INDEMNIFICATION OF DIRECTORS AND OFFICERS
Item 24. Indemnification of Directors and Officers
The Articles of Incorporation of the Company contain a conditional provision
which, subject to certain exceptions described below, eliminates the liability
of a director to the Company or its shareholders for monetary damages for
breach of the duty of care or any other duty as a director. This provision does
not eliminate such liability to the extent the director engaged in willful
misconduct or a knowing violation of criminal law or of any federal or state
securities law, including, without limitation, laws proscribing insider trading
or manipulation of the market for any security.
The Bylaws of the Company require the Company to indemnify any person who
was, is, or is threatened to be made a named defendant or respondent in any
threatened, pending, or completed action, suit, or proceeding, whether civil,
criminal, administrative, or investigative, by reason of service by such person
as a director of the Company or the Bank or any other corporation which he
served as such at the request of the Company. Except as noted in the next
paragraph, directors are entitled to be indemnified against judgments,
penalties, fines, settlements, and reasonable expenses actually incurred by the
director in connection with the proceeding. Directors are also entitled to have
the Company advance any such expenses prior to final disposition of the
proceeding, upon delivery of a written affirmation by the director of his good
faith belief that the standard of conduct necessary for indemnification has
been met and a written undertaking to repay the amounts advanced if it is
ultimately determined that the standard of conduct has not been met.
Under the Bylaws, indemnification will be disallowed if it is established
that the director (i) appropriated, in violation of his duties, any business
opportunity of the Company, (ii) engaged in willful misconduct or a knowing
violation of law, (iii) permitted any unlawful distribution, or (iv) derived an
improper personal benefit. In addition to the Bylaws of the Company, Section
33-8-520 of the South Carolina Business Corporation Act of 1988 (the
"Corporation Act") requires that "a corporation indemnify a director who was
wholly successful, on the merits or otherwise, in the defense of any proceeding
to which he was a party because he is or was a director of the corporation
against reasonable expenses incurred by him in connection with the proceeding."
The Corporation Act also provides that upon application of a director a court
may order indemnification if it determines that the director is entitled to
such indemnification under the applicable standard of the Corporation Act.
The Board of Directors also has the authority to extend to officers,
employees and agents the same indemnification rights held by directors, subject
to all of the accompanying conditions and obligations. The Board of Directors
has extended or intends to extend indemnification rights to all of its
executive officers.
The Company has the power to purchase and maintain insurance on behalf of
any person who is or was a director, officer, employee or agent of the Company
against any liability asserted against him or incurred by him in any such
capacity, whether or not the Company would have the power to indemnify him
against such liability under the bylaws.
II-1
<PAGE> 48
Item 25. Other Expenses of Issuance and Distribution.
Estimated expenses (other than underwriting commissions) of the sale of the
shares of Common Stock are as follows:
<TABLE>
<S> <C>
Registration Fee............................................................ $ 3,637
Printing and Engraving...................................................... 20,000
Legal Fees and Expenses..................................................... 20,000
Miscellaneous Disbursements................................................. 6,363
-------
TOTAL....................................................................... $50,000
=======
</TABLE>
Item 26. Recent Sales of Unregistered Securities.
On February 26, 1997, the Company issued ten shares of its Common Stock to
one of its Organizers, Mr. Tommy B. Wessinger, in order to complete the
Company's organization. The price per share was $10.00 for a total purchase
price of $100.00. There were no underwriting discounts or commissions paid with
respect to this transaction. The Company has the right to redeem Mr.
Wessinger's stock at the original purchase price of $100.00 and intends to do
so upon completion of this offering. The sale was exempt under Section 4(2) of
the Securities Act of 1933.
Item 27. Exhibits.
3.1. Articles of Incorporation
3.2. Bylaws
4.1. See Exhibits 3.1 and 3.2 for provisions in the Company's Articles
of Incorporation and Bylaws defining the rights of holders of the
Common Stock
4.2. Form of Certificate of Common Stock*
5.1. Opinion Regarding Legality*
10.1. Purchase and Sale Agreement dated March 20, 1997, by and
between NationsBank National Association, as seller, and People's
Community Capital Corporation, as purchaser
10.2. Employment Agreement dated March 3, 1997, between the Company
and Tommy B. Wessinger
10.3. Employment Agreement dated March 3, 1997, between the Company
and Alan J. George
10.4. Escrow Agreement dated March 14, 1997, between The Company and
The Bankers Bank
10.5. Lease Agreement dated February 28, 1997, between the Company,
as lessee, and Margaret Holley-Taylor, as lessor
23.1. Consent of Independent Public Accountants
23.2. Consent of Nelson Mullins Riley & Scarborough, L.L.P. (appears
in its opinion filed as Exhibit 5.1)*
24.1. Power of Attorney (contained in signature page of this filing)
27.1. Financial Data Schedule (for electronic filing purposes)
- --------------------
* To be filed by amendment
II-2
<PAGE> 49
Item 28. Undertakings.
The undersigned Company will:
(a)(1) 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.
(b) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 (the "Act") may be permitted to directors, officers and controlling
persons of the Company pursuant to the provisions described in Item 24 above,
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.
In the event that a claim for indemnification against such liabilities
(other than the payment by the Company of expenses incurred or paid by a
director, officer or controlling person of the Company in the successful
defense of any action, suit, or proceeding) is asserted by such director,
officer, or controlling person in connection with the securities being
registered, the Company will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
II-3
<PAGE> 50
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant has duly caused this Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the city of Aiken,
State of South Carolina, on April 10, 1997.
PEOPLE'S COMMUNITY CAPITAL CORPORATION
By: /s/ Tommy B. Wessinger
-----------------------------------
Tommy B. Wessinger
Chief Executive Officer
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Tommy B. Wessinger and Alan J. George
their true and lawful attorney-in-fact and agent, with full power of
substitution and resubstitution, for him and in his name, place and stead, in
any and all capacities, to sign any and all amendments to this Registration
Statement, and to file the same, with all exhibits thereto, and other documents
in connection therewith, with the Securities and Exchange Commission, granting
unto such attorney-in-fact and agent full power and authority to do and perform
each and every act and thing requisite or necessary to be done in and about the
premises, as fully to all intents and purposes as he might or could do in
person, hereby ratifying and confirming all that the attorney-in-fact and
agent, or his substitute or substitutes, may lawfully do or cause to be done by
virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following in the capacities and
on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
- --------- ----- ----
<S> <C> <C>
/s/ Raymond D. Brown April 10, 1997
- ------------------------------------------- ---------------------------------------------
Raymond D. Brown Director
/s/ W. Cothran Campbell April 10, 1997
- ------------------------------------------- ---------------------------------------------
W. Cothran Campbell Director
/s/ Alan J. George April 10, 1997
- ------------------------------------------- ---------------------------------------------
Alan J. George President;
Chief Operating Officer;
and Director
/s/ Margaret Holley-Taylor April 10, 1997
- ------------------------------------------- ---------------------------------------------
Margaret Holley-Taylor Director
/s/ James D. McNair April 10, 1997
- ------------------------------------------- ---------------------------------------------
James D. McNair Director
</TABLE>
(Signatures continued on following page)
<PAGE> 51
(Signatures continued from previous page)
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Clark D. Moore, M.D. April 10, 1997
- ------------------------------------------- ---------------------------------------------
Clark D. Moore, M.D. Director
- ------------------------------------------- ---------------------------------------------
Russell D. Phelon Director
- ------------------------------------------- ---------------------------------------------
Donald W. Thompson Director
/s/ Dr. John B. Tomarchio April 10, 1997
- ------------------------------------------- ---------------------------------------------
Dr. John B. Tomarchio Director
/s/ Tommy B. Wessinger April 10, 1997
- ------------------------------------------- ---------------------------------------------
Tommy B. Wessinger Chairman;
Chief Executive Officer; and
Director
</TABLE>
<PAGE> 52
EXHIBIT INDEX
EXHIBIT DESCRIPTION
3.1. Articles of Incorporation
3.2. Bylaws
4.1. See Exhibits 3.1 and 3.2 for provisions in the Company's
Articles of Incorporation and Bylaws defining the rights of
holders of the Common Stock
4.2. Form of Certificate of Common Stock*
5.1. Opinion Regarding Legality*
10.1. Purchase and Sale Agreement dated March 20, 1997, by and
between NationsBank National Association, as seller, and
People's Community Capital Corporation, as purchaser
10.2. Employment Agreement dated March 3, 1997, between the
Company and Tommy B. Wessinger
10.3. Employment Agreement dated March 3, 1997, between the Company
and Alan J. George
10.4. Escrow Agreement dated March 14, 1997, between The Company
and The Bankers Bank
10.5. Lease Agreement dated February 28, 1997, between the Company,
as lessee, and Margaret Holley-Taylor, as lessor
23.1. Consent of Independent Public Accountants
23.2. Consent of Nelson Mullins Riley & Scarborough, L.L.P.
(appears in its opinion filed as Exhibit 5.1)*
24.1. Power of Attorney (contained in signature page of this filing)
27.1. Financial Data Schedule (for electronic filing purposes)
- ------------------
* To be filed by amendment
<PAGE> 1
EXHIBIT 3.1
<PAGE> 2
ARTICLES OF INCORPORATION
OF
PEOPLE'S COMMUNITY CAPITAL CORPORATION
ARTICLE ONE
NAME
The name of the corporation is People's Community Capital Corporation (the
"Corporation").
ARTICLE TWO
ADDRESS AND REGISTERED AGENT
The street address of the initial registered office of the Corporation
shall be 106 Park Avenue, SW, Aiken, South Carolina 29801. The name of the
Corporation's initial registered agent at such address shall be Tommy B.
Wessinger.
ARTICLE THREE
CAPITALIZATION
The Corporation shall have the authority, exercisable by its board of
directors (the "Board of Directors"), to issue up to 10,000,000 shares of
voting common stock, par value $.01 per share (the "Common Stock").
The Corporation shall have the authority, exercisable by its Board of
Directors, to issue up to 10,000,000 shares of preferred stock, par value $.01
per share (the "Preferred Stock"), any part or all of which shares of Preferred
Stock may be established and designated from time to time by the Board of
Directors by filing an amendment to these Articles of Incorporation (a
"Preferred Stock Designation"), which is effective without shareholder action,
in accordance with the appropriate provisions of the South Carolina Business
Corporation Act of 1988 (the "Act") in such series and with such preferences,
limitations, and relative rights as may be determined by the Board of
Directors. The number of authorized shares of Preferred Stock may be increased
or decreased (but not below the number of shares thereof then outstanding) by
the affirmative vote of the holders of the majority of the shares of Common
Stock, without a vote of the holders of the shares of Preferred Stock, or of
any series thereof, unless a vote of any such holders is required by law or
pursuant to the Preferred Stock Designation or Preferred Stock Designations
establishing the series of Preferred Stock.
ARTICLE FOUR
PREEMPTIVE RIGHTS
The shareholders shall not have any preemptive rights to acquire
additional stock in the Corporation.
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<PAGE> 3
ARTICLE FIVE
NO CUMULATIVE VOTING RIGHTS
The Corporation elects not to have cumulative voting, and no shares issued
by this Corporation may be cumulatively voted for directors of the Corporation
(or for any other decision).
ARTICLE SIX
LIMITATION ON DIRECTOR LIABILITY
No director of the Corporation shall be personally liable to the
Corporation or its shareholders for monetary damages for breach of the duty of
care or any other duty as a director, except that such liability shall not be
eliminated for:
(i) any breach of the director's duty of loyalty to the
Corporation or its shareholders;
(ii) acts or omissions not in good faith or which involve gross
negligence, intentional misconduct, or a knowing violation of law;
(iii) liability imposed under Section 33-8-330 (or any successor
provision or redesignation thereof) of the Act; and
(iv) any transaction from which the director derived an improper
personal benefit.
If at any time the Act shall have been amended to authorize the further
elimination or limitation of the liability of a director, then the liability of
each director of the Corporation shall be eliminated or limited to the fullest
extent permitted by the Act, as so amended, without further action by the
shareholders, unless the provisions of the Act, as amended, require further
action by the shareholders.
Any repeal or modification of the foregoing provisions of this Article Six
shall not adversely affect the elimination or limitation of liability or
alleged liability pursuant hereto of any director of the Corporation for or
with respect to any alleged act or omission of the director occurring prior to
such a repeal or modification.
ARTICLE SEVEN
CONTROL SHARE ACQUISITIONS
The provisions of Title 35, Chapter 2, Article 1 of the Code of Laws of
South Carolina shall not apply to control share acquisitions of shares of the
Corporation.
2
<PAGE> 4
ARTICLE EIGHT
CONSIDERATION OF OTHER CONSTITUENCIES
In discharging the duties of their respective positions and in determining
what is 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 actions on the Corporation and its shareholders,
may consider the interests of the employees, customers, suppliers, creditors,
and other constituencies of the Corporation and its subsidiaries, the
communities and geographical areas in which the Corporation and its
subsidiaries operate or are located, and all other factors such directors
consider pertinent. This provision solely grants discretionary authority to the
directors and shall not be deemed to provide to any other constituency any
right to be considered.
ARTICLE NINE
NAME AND ADDRESS OF THE SOLE INCORPORATOR
The sole incorporator is Daniel J. Fritze, whose address is 1330 Lady
Street, Third Floor, Keenan Building, Columbia, South Carolina 29201.
IN WITNESS WHEREOF, the undersigned has executed these Articles of
Incorporation as of the date indicated below.
/s/ Daniel J. Fritze
---------------------------
Daniel J. Fritze
Sole Incorporator
Date: February 26, 1997
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<PAGE> 5
CERTIFICATION
I, Daniel J. Fritze, an attorney licensed to practice in the State of
South Carolina, certify that the Corporation has complied with the requirements
of Chapter 2, Title 33 of the Code of Laws of South Carolina 1976, relating to
the Articles of Incorporation.
Date: February 26, 1997
/s/ Daniel J. Fritze
------------------------------------------
(Signature)
Nelson Mullins Riley & Scarborough, L.L.P.
1330 Lady Street, Third Floor
Keenan Building
Columbia, South Carolina 29201
4
<PAGE> 1
EXHIBIT 3.2
<PAGE> 2
BYLAWS
OF
PEOPLE'S COMMUNITY CAPITAL CORPORATION
<PAGE> 3
PEOPLE'S COMMUNITY CAPITAL CORPORATION
TABLE OF CONTENTS
<TABLE>
<S> <C>
ARTICLE 1
OFFICES............................................................................................................... 1
Section 1: Registered Office and Agent.......................................................................... 1
Section 2: Other Offices........................................................................................ 1
ARTICLE 2
SHAREHOLDERS.......................................................................................................... 1
Section 1: Place of Meetings.................................................................................... 1
Section 2: Annual Meetings...................................................................................... 1
Section 3: Special Meetings..................................................................................... 1
Section 4: Notice............................................................................................... 2
Section 5: Quorum............................................................................................... 2
Section 6: Majority Vote; Withdrawal of Quorum.................................................................. 2
Section 7: Method of Voting..................................................................................... 3
Section 8: Record Date.......................................................................................... 3
Section 9: Shareholder Proposals................................................................................ 3
ARTICLE 3
DIRECTORS............................................................................................................. 4
Section 1: Management........................................................................................... 4
Section 2: Number, Classification and Terms of Office of Directors.............................................. 4
Section 3: Qualifications of Directors.......................................................................... 5
Section 4: Election of Directors................................................................................ 5
Section 5: Nomination of Directors.............................................................................. 5
Section 6: Retirement of Directors.............................................................................. 6
Section 7: Emeritus Directors................................................................................... 6
Section 8: Vacancies............................................................................................ 6
Section 9: Removal of Directors................................................................................. 7
Section 10: Place of Meetings.................................................................................... 7
Section 11: Regular Meetings..................................................................................... 7
Section 12: Special Meetings..................................................................................... 7
Section 13: Telephone and Similar Meetings....................................................................... 7
Section 14: Quorum; Majority Vote................................................................................ 7
Section 15: Compensation......................................................................................... 8
Section 16: Procedure............................................................................................ 8
Section 17: Action Without Meeting............................................................................... 8
ARTICLE 4
BOARD COMMITTEES...................................................................................................... 8
Section 1: Designation.......................................................................................... 8
Section 2: Meetings............................................................................................. 8
</TABLE>
i
<PAGE> 4
<TABLE>
<S> <C> <C>
Section 3: Quorum; Majority Vote................................................................................ 8
Section 4: Procedure............................................................................................ 9
Section 5: Action Without Meeting............................................................................... 9
Section 6: Telephone and Similar Meetings....................................................................... 9
ARTICLE 5
OFFICERS.............................................................................................................. 9
Section 1: Offices.............................................................................................. 9
Section 2: Term................................................................................................. 9
Section 3: Vacancies............................................................................................ 9
Section 4: Compensation......................................................................................... 10
Section 5: Removal.............................................................................................. 10
Section 6: Chairman of the Board................................................................................ 10
Section 7: Chief Executive Officer.............................................................................. 10
Section 8: President............................................................................................ 10
Section 9: Vice Presidents...................................................................................... 10
Section 10: Secretary............................................................................................ 10
Section 11: Assistant Secretary.................................................................................. 11
Section 12: Treasurer............................................................................................ 11
ARTICLE 6
INDEMNIFICATION....................................................................................................... 11
Section 1: Indemnification of Directors......................................................................... 11
Section 2: Advancement of Expenses.............................................................................. 12
Section 3: Indemnification of Officers, Employees and Agents.................................................... 13
Section 4: Insurance............................................................................................ 13
Section 5: Nonexclusivity of Rights; Agreements................................................................. 13
Section 6: Continuing Benefits; Successors...................................................................... 13
Section 7: Interpretation; Construction......................................................................... 14
Section 8: Amendment............................................................................................ 14
Section 9: Severability......................................................................................... 14
ARTICLE 7
CERTIFICATES AND SHAREHOLDERS......................................................................................... 14
Section 1: Certificates......................................................................................... 14
Section 2: Issuance of Shares................................................................................... 15
Section 3: Rights of Corporation with Respect to Registered Owners.............................................. 15
Section 4: Transfers of Shares.................................................................................. 15
Section 5: Registration of Transfer............................................................................. 15
Section 6: Lost, Stolen or Destroyed Certificates............................................................... 15
Section 7: Restrictions on Shares............................................................................... 16
Section 8: Control Share Acquisitions Statute................................................................... 16
Section 9: Voting of Stock Held................................................................................. 16
</TABLE>
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<TABLE>
<S> <C> <C> <C>
ARTICLE 8
GENERAL PROVISIONS.................................................................................................... 16
Section 1: Distributions........................................................................................ 16
Section 2: Books and Records.................................................................................... 17
Section 3: Execution of Documents............................................................................... 17
Section 4: Fiscal Year.......................................................................................... 17
Section 5: Seal................................................................................................. 17
Section 6: Resignation.......................................................................................... 17
Section 7: Computation of Days.................................................................................. 17
Section 8: Amendment of Bylaws.................................................................................. 17
Section 9: Construction......................................................................................... 18
Section 10: Headings............................................................................................. 18
</TABLE>
iii
<PAGE> 6
BYLAWS
OF
PEOPLE'S COMMUNITY CAPITAL CORPORATION
ARTICLE 1: OFFICES
Section 1: Registered Office and Agent. The registered office of
the Corporation shall be at 106 Park Avenue, SW, Aiken, South Carolina 29801.
The registered agent shall be Tommy B. Wessinger.
Section 2: Other Offices. The Corporation may also have offices at
such other places within and without the State of South Carolina as the Board
of Directors may from time to time determine or the business of the Corporation
may require.
ARTICLE 2: SHAREHOLDERS
Section 1: Place of Meetings. Meetings of shareholders shall be held
at the time and place, within or without the State of South Carolina, stated in
the notice of the meeting or in a waiver of notice.
Section 2: Annual Meetings. An annual meeting of the shareholders
shall be held each year on a date and at a time to be set by the Board of
Directors in accordance with all applicable notice requirements. At the
meeting, the shareholders shall elect directors and transact such other
business as may properly be brought before the meeting.
Section 3: Special Meetings. (a) Special meetings of the shareholders,
for any purpose or purposes, unless otherwise required by the South Carolina
Business Corporation Act of 1988, as amended from time to time (the "Act"), the
Articles of Incorporation of the Corporation (the "Articles"), or these Bylaws,
may be called by the chief executive officer, the president, the chairman of
the Board of Directors or a majority of the Board of Directors.
(b) In addition to a special meeting called in accordance
with subsection 3(a) of this Article 2, the Corporation shall, if and to the
extent that it is required by applicable law, hold a special meeting of
shareholders if the holders of at least ten percent of all the votes entitled
to be cast on any issue proposed to be considered at such special meeting sign,
date and deliver to the secretary of the Corporation one or more written
demands for the meeting. Such written demands shall be delivered to the
secretary by certified mail, return receipt requested. Such written demands
sent to the secretary of the Corporation shall set forth as to each matter the
shareholder or shareholders propose to be presented at the special meeting (i)
a description of the purpose or purposes for which the meeting is to be held
(including the specific proposal(s) to be presented); (ii) the name and record
address of the shareholder or shareholders proposing such business; (iii) the
class and number of shares of the Corporation that are owned of record
<PAGE> 7
by the shareholder or shareholders as of a date within ten days of the delivery
of the demand; (iv) the class and number of shares of the Corporation that are
held beneficially, but not held of record, by the shareholder or shareholders
as of a date within ten days of the delivery of the demand; and (v) any
interest of the shareholder or shareholders in such business. Any such special
shareholders' meeting shall be held at a location designated by the Board of
Directors. The Board of Directors may set such rules for any such meeting as it
may deem appropriate, including when the meeting will be held (subject to any
requirements of the Act), the agenda for the meeting (which may include any
proposals made by the Board of Directors), who may attend the meeting in
addition to shareholders of record and other such matters.
(c) Business transacted at any special meeting shall be
confined to the specific purpose or purposes stated in the notice of the
meeting.
Section 4: Notice. (a) Written or printed notice stating the place,
day and hour of the meeting and, in the case of a special meeting, the specific
purpose or purposes for which the meeting is called, shall be delivered by the
Corporation not less than ten nor more than sixty days before the date of the
meeting, either personally or by mail, to each shareholder of record entitled
to vote at such meeting. If mailed, such notice shall be deemed effective when
deposited with postage prepaid in the United States mail, addressed to the
shareholder at the address appearing on the stock transfer books of the
Corporation. Except as may be expressly provided by law, no failure or
irregularity of notice of any regular meeting shall invalidate the same or any
proceeding thereat.
(b) The notice of each special shareholders meeting shall
include a description of the specific purpose or purposes for which the meeting
is called. Except as provided by law, the Articles or these Bylaws, the notice
of an annual shareholders meeting need not include a description of the purpose
or purposes for which the meeting is called.
Section 5: Quorum. The holders of a majority of the shares issued and
outstanding and entitled to vote thereat, present in person or represented by
proxy, shall be requisite and shall constitute a quorum at meetings of the
shareholders for the transaction of business except as otherwise provided by
statute, by the Articles or by these Bylaws. If a quorum is not present or
represented at a meeting of the shareholders, the shareholders entitled to
vote, present in person or represented by proxy, shall have the power to
adjourn the meeting from time to time, without notice other than announcement
at the meeting, until a quorum is present or represented. At an adjourned
meeting at which a quorum is present or represented, any business may be
transacted which might have been transacted at the meeting as originally
notified. Once a share is represented for any purpose at a meeting it is deemed
present for quorum purposes.
Section 6: Majority Vote; Withdrawal of Quorum. Except in regards to
the election of directors, when a quorum is present at a meeting, the vote of
the holders of a majority of the shares having voting power, present in person
or represented by proxy, shall decide any question brought before the meeting,
unless the question is one on which, by express provision of the statutes, the
Articles or these Bylaws, a higher vote is required in which case the express
provision shall govern. Directors shall be elected by a plurality vote of the
2
<PAGE> 8
shareholders. The shareholders present at a duly constituted meeting may
continue to transact business until adjournment, despite the withdrawal of
enough shareholders to leave less than a quorum.
Section 7: Method of Voting. Each outstanding share of common stock
shall be entitled to one vote on each matter submitted to a vote at a meeting
of shareholders. Each outstanding share of other classes of stock, if any,
shall have such voting rights as may be prescribed by the Board of Directors.
Proxies delivered by facsimile to the Corporation, if otherwise in order, shall
be valid. Votes shall be taken by voice, by hand or in writing, as directed by
the chairman of the meeting. Voting for directors shall be in accordance with
Article 3, Section 3 of these Bylaws.
Section 8: Record Date. For the purpose of determining shareholders
entitled to notice of or to vote at any meeting of shareholders, including any
special meeting, or shareholders entitled to receive payment of dividends, or
in order to make a determination of shareholders for any other purpose, the
Board of Directors may fix in advance a date as the record date for any such
determination of shareholders, such date in any case to be not less than ten
nor more than seventy days prior to the date on which the particular action,
requiring such determination of shareholders, is to be taken. Except as
otherwise provided by law, if no record date is fixed for the determination of
shareholders entitled to notice of or to vote at a meeting of shareholders, or
of shareholders entitled to receive payment of dividends, the date on which
notice of the meeting is mailed, or the date on which the resolution of the
Board of Directors declaring such dividend is adopted, as the case may be,
shall be the record date.
Section 9: Shareholder Proposals. (a) To the extent required by
applicable law, a shareholder may bring a proposal before an annual meeting of
shareholders as set forth in this Section 9. To be properly brought before an
annual meeting of shareholders, business must be (i) specified in the notice of
meeting (or any supplement thereto) given by or at the direction of the Board
of Directors; (ii) otherwise properly brought before the meeting by or at the
direction of the Board of Directors; or (iii) otherwise properly brought before
the meeting by a shareholder. In addition to any other applicable requirements,
for business to be properly brought before an annual meeting by a shareholder,
the shareholder must have given timely notice thereof in writing to the
secretary of the Corporation. To be timely, a shareholder's notice must be
given, either by personal delivery or by United States mail, postage prepaid,
return receipt requested, to the secretary of the Corporation not later than
ninety days in advance of the annual meeting. A shareholder's notice to the
secretary of the Corporation shall set forth for each matter the shareholder
proposes to bring before the annual meeting (i) a description of the business
desired to be brought before the annual meeting (including the specific
proposal(s) to be presented) and the reasons for conducting such business at
the annual meeting; (ii) the name and record address of the shareholder
proposing such business; (iii) the class and number of shares of the
Corporation that are owned of record, and the class and number of shares of the
Corporation that are held beneficially, but not held of record, by the
shareholder as of the record date for the meeting, if such date has been made
publicly available, or as of a date within ten days of the effective date of
the notice by the shareholder if the record date has not been made publicly
available; and (iv) any interest of the shareholder in such business. In the
event that a shareholder attempts to bring business before an annual meeting
without complying with the
3
<PAGE> 9
provisions of this Section 9, the chairman of the meeting shall declare to the
meeting that the business was not properly brought before the meeting in
accordance with the foregoing procedures, and such business shall not be
transacted. The chairman of any annual meeting, for good cause shown and with
proper regard for the orderly conduct of business at the meeting, may waive in
whole or in part the operation of this Section 9.
(b) If any shareholder of the Corporation notifies the
Corporation that such shareholder intends to present a proposal for action at a
forthcoming meeting of the Corporation's shareholders and requests that the
Corporation include the proposal in its proxy statement and such shareholder
complies with all the requirements of Rule 14a-8 promulgated under the
Securities Exchange Act of 1934, the Corporation shall consider inclusion of
such proposal in the proxy statement unless it determines that the proposal is
inappropriate for consideration by the shareholders at the meeting.
ARTICLE 3: DIRECTORS
Section 1: Management. The business and affairs of the Corporation
shall be managed by the Board of Directors who may exercise all such powers of
the Corporation and do all such lawful acts and things as are not by law, the
Articles or these Bylaws directed or required to be done or exercised by the
shareholders.
Section 2: Number, Classification and Terms of Office of Directors.
Unless otherwise provided in the Articles of Incorporation, the number of
directors of the Corporation shall be that number as may be fixed from time to
time by resolution of the Board of Directors, but in no event shall the number
be less than five or greater than twenty-five. The initial number of directors
shall be eight. The number of members of the Board of Directors can be
increased or decreased within the foregoing range at any time by the Board of
Directors. In addition, unless provided otherwise by resolution of the Board of
Directors, if, in any case after proxy materials for an annual meeting of
shareholders have been mailed to shareholders, any person named therein to be
nominated at the direction of the Board of Directors becomes unable or
unwilling to serve, the number of authorized directors shall be automatically
reduced by a number equal to the number of such persons. The members of the
Board of Directors need not be shareholders nor need they be residents of any
particular state. At any time that the Board has six or more members, unless
provided otherwise by the Articles of Incorporation, the terms of office of
directors will be staggered by dividing the total number of directors into
three classes, with each class accounting for one-third, as near as may be, of
the total. The terms of directors in the first class expire at the first annual
shareholders' meeting after their election, the terms of the second class
expire at the second annual shareholders' meeting after their election, and the
terms of the third class expire at the third annual shareholders' meeting after
their election. At each annual shareholders' meeting held thereafter, directors
shall be chosen for a term of three years to succeed those whose terms expire.
If the number of directors is changed, any increase or decrease shall be so
apportioned among the classes as to make all classes as nearly equal in number
as possible, and when the number of directors is increased and any newly
created directorships are filled by the board, the terms of the additional
directors shall
4
<PAGE> 10
expire at the next election of directors by the shareholders. Each director,
except in the case of his earlier death, written resignation, retirement,
disqualification or removal, shall serve for the duration of his term, as
staggered, and thereafter until his successor shall have been elected and
qualified.
Section 3: Qualifications of Directors. No individual who is or
becomes a Business Competitor (as defined below) or who is or becomes
affiliated with, employed by or a representative of any individual,
corporation, association, partnership, firm, business enterprise or other
entity or organization which the Board of Directors, after having such matter
formally brought to its attention, determines to be in competition with the
Corporation or any of its subsidiaries (any such individual, corporation,
association, partnership, firm, business enterprise or other entity or
organization being hereinafter referred to as a "Business Competitor") shall be
eligible to serve as a director if the Board of Directors determines that it
would not be in the Corporation's best interests for such individual to serve
as a director of the Corporation. Such affiliation, employment or
representation may include, without limitation, service or status as an owner,
partner, shareholder, trustee, director, officer, consultant, employee, agent,
or counsel, or the existence of any relationship which results in the affected
person having an express or implied obligation to act on behalf of a Business
Competitor; provided, however, that passive ownership of a debt or equity
interest not exceeding 1% of the outstanding debt or equity, as the case may
be, in any Business Competitor shall not constitute such affiliation,
employment or representation. Any financial institution having branches or
affiliates in Aiken County, South Carolina, shall be presumed to be a Business
Competitor unless the Board of Directors determines otherwise.
Section 4: Election of Directors. Directors shall be elected by a
plurality vote.
Section 5: Nomination of Directors. (a) Nomination of persons to serve
as directors of the Corporation, other than those made by or on behalf of the
Board of Directors of the Corporation, shall be made in writing and shall be
delivered either by personal delivery or by United States mail, postage
prepaid, return receipt requested, to the secretary of the Corporation no later
than (i) with respect to an election to be held at an annual meeting of
shareholders, ninety days in advance of such meeting; and (ii) with respect to
an election to be held at a special meeting of shareholders for the election of
directors, the close of business on the seventh day following the date on which
notice of such meeting is first given to shareholders. Each notice shall set
forth: (i) the name and address of the shareholder who intends to make the
nomination and of the person or persons to be nominated; (ii) a representation
that the shareholder is a holder of record of stock of the Corporation entitled
to vote at such meeting and intends to appear in person or by proxy at the
meeting to nominate the person or persons specified in the notice; (iii) a
description of all arrangements or understandings between the shareholder and
each nominee and any other person or persons (naming such person or persons)
pursuant to which the nomination or nominations are to be made by the
shareholder; (iv) such other information regarding each nominee proposed by
such shareholder as would be required to be included in a proxy statement filed
pursuant to the proxy rules of the Securities and Exchange Commission, had the
nominee been nominated, or intended to be nominated, by the Board of Directors;
and (v) the consent of each nominee to serve as a director of the
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<PAGE> 11
Corporation if so elected. The chairman of the meeting may refuse to
acknowledge the nomination of any person not made in compliance with the
foregoing procedure. The chairman of any such meeting, for good cause shown and
with proper regard for the orderly conduct of business at the meeting, may
waive in whole or in part the operation of this Section 4.
(b) Notwithstanding subsection (a) of this Section 4, if the
Corporation or any banking subsidiary of the Corporation is subject to the
requirements of Section 914 of the Financial Institutions Reform, Recovery, and
Enforcement Act of 1989, then no person may be nominated by a shareholder for
election as a director at any meeting of shareholders unless the shareholder
furnishes the written notice required by subsection (a) of this Section 4 to
the secretary of the Corporation at least ninety days prior to the date of the
meeting and the nominee has received regulatory approval to serve as a director
prior to the date of the meeting.
Section 6: Retirement of Directors. No person shall be elected or
reelected a director of the Corporation after attaining the age of 75, provided
that this provision shall not apply to any initial director who shall have
attained the age of 68 prior to the date of the initial adoption of these
Bylaws.
Section 7: Emeritus Directors. The Board of Directors may, from time
to time, appoint individuals (including individuals who have retired from the
Board of Directors) to serve as members of the Emeritus Board of Directors of
the Corporation. Each member of the Emeritus Board of Directors of the
Corporation, except in the case of his earlier death, resignation, retirement,
disqualification or removal, shall serve until the next succeeding annual
meeting of the Board of Directors of the Corporation. Members of the Emeritus
Board of Directors may be removed without cause by a vote of the members of the
Board of Directors. Any individual appointed as a member of the Emeritus Board
of Directors of the Corporation may, but shall not be required to, attend
meetings of the Board of Directors of the Corporation and may participate in
any discussions at such meetings, but such individual may not vote or be
counted in determining a quorum at any meeting of the Board of Directors of the
Corporation. It shall be the duty of the members of the Emeritus Board of
Directors of the Corporation to serve as goodwill ambassadors of the
Corporation, but such individuals shall not have any responsibility or be
subject to any liability imposed upon a member of the Board of Directors of the
Corporation or in any manner otherwise be deemed to be a member of the Board of
Directors of the Corporation. Each member of the Emeritus Board of Directors of
the Corporation shall be paid such compensation as may be set from time to time
by the Chairman of the Board of Directors of the Corporation and shall remain
eligible to participate in any stock option plan in which directors are
eligible to participate which is maintained by, or participated in, from time
to time by the Corporation, according to the terms and conditions thereof.
Section 8: Vacancies. Except as otherwise provided by law, in the
Articles of Incorporation, or in these Bylaws (a) the office of a director
shall become vacant if he dies, resigns, or is removed from office, and (b) the
Board of Directors may declare vacant the office of a director if (i) he is
interdicted or adjudicated an incompetent, (ii) an action is filed by or
against him, or any entity of which he is employed as his principal business
activity, under the bankruptcy laws of the United States, (iii) in the sole
opinion of the Board of Directors he becomes incapacitated by illness or other
infirmity so that he is unable to perform his duties for
6
<PAGE> 12
a period of six months or longer, or (iv) he ceases at any time to have the
qualifications required by law, the Articles of Incorporation or these Bylaws.
The remaining directors may, by a majority vote, fill any vacancy on the Board
of Directors (including any vacancy resulting from an increase in the
authorized number of directors, or from the failure of the shareholders to
elect the full number of authorized directors) for an unexpired term; provided
that the shareholders shall have the right at any special meeting called for
such purpose prior to action by the Board of Directors to fill the vacancy.
Section 9: Removal of Directors. Unless provided otherwise by the
Articles of Incorporation, directors may be removed with or without cause by
the affirmative vote of the holders of at least a majority of the shares
entitled to vote at an election of directors, such vote being taken at a
meeting of the shareholders called for that purpose at which a quorum is
present.
Section 10: Place of Meetings. Meetings of the Board of Directors,
regular or special, may be held either within or without the State of South
Carolina.
Section 11: Regular Meetings. Regular meetings of the Board of
Directors may be held without notice at such time and place as shall from time
to time be determined by the Board of Directors.
Section 12: Special Meetings. Special meetings of the Board of
Directors may be called by the chairman, the chief executive officer, or the
president of the Corporation, on not less than twenty-four hours' notice.
Notice of a special meeting may be given by personal notice, telephone,
facsimile, electronic communication, overnight courier or United States mail to
each director. Any such special meeting shall be held at such time and place as
shall be stated in the notice of the meeting. The notice need not describe the
purpose or purposes of the special meeting.
Section 13: Telephone and Similar Meetings. Directors may participate
in and hold a meeting by means of conference telephone or similar
communications equipment by means of which all persons participating in the
meeting can hear each other. Participation in such a meeting shall constitute
presence in person at the meeting, except where a person participates in the
meeting for the express purpose of objecting to the holding of the meeting or
the transacting of any business at the meeting on the ground that the meeting
is not lawfully called or convened, and does not thereafter vote for or assent
to action taken at the meeting.
Section 14: Quorum; Majority Vote. At meetings of the Board of
Directors a majority of the number of directors then in office shall constitute
a quorum for the transaction of business. The act of a majority of the
directors present at a meeting at which a quorum is present shall be the act of
the Board of Directors, except as otherwise specifically provided by law, the
Articles or these Bylaws. If a quorum is not present at a meeting of the Board
of Directors, the directors present may adjourn the meeting from time to time,
without notice other than announcement at the meeting, until a quorum is
present.
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Section 15: Compensation. Each director shall be entitled to receive
such reasonable compensation as may be determined by resolution of the Board of
Directors. By resolution of the Board of Directors, the directors may be paid
their expenses, if any, of attendance at each meeting of the Board of Directors
and may be paid a fixed sum for attendance at each meeting of the Board of
Directors. No such payment shall preclude any director from serving the
Corporation in any other capacity and receiving compensation therefor. Members
of committees may, by resolution of the Board of Directors, be allowed
compensation for attending committee meetings.
Section 16: Procedure. The Board of Directors shall keep regular
minutes of its proceedings. The minutes shall be placed in the minute book of
the Corporation.
Section 17: Action Without Meeting. Any action required or permitted
to be taken at a meeting of the Board of Directors may be taken without a
meeting if the action is assented to by all the members of the Board. Such
consent shall have the same force and effect as a meeting vote and may be
described as such in any document.
ARTICLE 4: BOARD COMMITTEES
Section 1: Designation. The Board of Directors may, by resolution
adopted by a majority of the full Board, designate one or more committees. Each
committee must have two or more members who serve at the pleasure of the Board
of Directors. To the extent specified by the Board of Directors, in the
Articles or in these Bylaws, each committee may exercise the authority of the
Board of Directors. So long as prohibited by law, however, a committee of the
Board may not (a) authorize distributions; (b) approve or propose to
shareholders action required by the Act to be approved by shareholders; (c)
fill vacancies on the Board of Directors or on any of its committees; (d) amend
the Articles; (e) adopt, amend or repeal these Bylaws; (f) approve a plan of
merger not requiring shareholder approval; (g) authorize or approve
reacquisition of shares, except according to a formula or method prescribed by
the Board of Directors; or (h) authorize or approve the issuance or sale or
contract for sale of shares, or determine the designation and relative rights,
preferences and limitations of a class or series of shares, except that the
Board of Directors may authorize a committee (or a senior executive officer of
the Corporation) to do so within limits specifically prescribed by the Board of
Directors. Any director may serve one or more committee. Any committee
appointed under this Section 1 shall perform such duties and assume such
responsibility as may from time to time be placed upon it by the Board of
Directors.
Section 2: Meetings. Time, place and notice of all committee
meetings shall be as called and specified by the chief executive officer, the
committee chairman or any two members of each committee.
Section 3: Quorum; Majority Vote. At meetings of committees, a
majority of the number of members designated by the Board of Directors shall
constitute a quorum for the transaction of business. The act of a majority of
the members present at any meeting at which a quorum is present shall be the
act of such committee, except as otherwise specifically provided
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by the Act, the Articles or these Bylaws. If a quorum is not present at a
meeting of the committee, the members present may adjourn the meeting from time
to time, without notice other than an announcement at the meeting, until a
quorum is present.
Section 4: Procedure. Committees shall keep regular minutes of their
proceedings and report the same to the Board of Directors at its next regular
meeting. The minutes of the proceedings of the committee shall be placed in the
minute book of the Corporation.
Section 5: Action Without Meeting. Any action required or permitted to
be taken at a meeting of any committee may be taken without a meeting if the
action is assented to by all the members of the committee. Such consent shall
have the same force and effect as a meeting vote and may be described as such
in any document.
Section 6: Telephone and Similar Meetings. Committee members may
participate in and hold a meeting by means of conference telephone or similar
communications equipment by means of which all persons participating in the
meeting can hear each other. Participation in such a meeting shall constitute
presence in person at the meeting, except where a person participates in the
meeting for the express purpose of objecting to the holding of the meeting or
the transacting of any business at the meeting on the ground that the meeting
is not lawfully called or convened, and does not thereafter vote for or assent
to action taken at the meeting.
ARTICLE 5: OFFICERS
OFFICERS
Section 1: Offices. The officers of the Corporation shall consist of a
chief executive officer, chief operating officer, president and a secretary,
each of whom shall be elected by the Board of Directors. The Board of Directors
may also create and establish the duties of other offices as it deems
appropriate. The Board of Directors shall also elect a chairman of the Board
and may elect a vice chairman of the Board from among its members. The Board of
Directors from time to time may appoint, or may authorize the president to
appoint or authorize specific officers to appoint, the persons who shall hold
such other offices as may be established by the Board of Directors, including
one or more vice presidents (including executive vice presidents, senior vice
presidents, assistant vice presidents), one or more assistant secretaries, and
one or more assistant treasurers. Any two or more offices may be held by the
same person.
Section 2: Term. Each officer shall serve at the pleasure of the Board
of Directors (or, if appointed pursuant to this Article, at the pleasure of the
Board of Directors, the president, or the officer authorized to have appointed
the officer) until his or her death, resignation, or removal, or until his or
her replacement is elected or appointed in accordance with this Article.
Section 3: Vacancies. Any vacancy occurring in any office of the
Corporation may be filled by the Board of Directors. Any vacancy in an office
which was filled by the
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president or another officer may also be filled by the president or by any
officer authorized to have filled the office vacant.
Section 4: Compensation. The compensation of all officers of the
Corporation shall be fixed by the Board of Directors or by a committee
or officer appointed by the Board of Directors. Officers may serve without
compensation.
Section 5: Removal. All officers (regardless of how elected or
appointed) may be removed, with or without cause, by the Board of Directors.
Any officer appointed by the president or another officer may also be removed,
with or without cause, by the president or by any officer authorized to have
appointed the officer to be removed. Removal will be without prejudice to the
contract rights, if any, of the person removed, but shall be effective
notwithstanding any damage claim that may result from infringement of such
contract rights.
Section 6: Chairman of the Board. The office of the chairman of the
board may be filled by the Board at its pleasure by the election of one of its
members to the office. The chairman shall preside at all meetings of the Board
and meetings of the shareholders and shall perform such other duties as may be
assigned to him by the Board of Directors.
Section 7: Chief Executive Officer. Unless specified otherwise by the
Board of Directors, the chairman of the board shall also serve as the chief
executive officer of the Corporation. If the Board chooses to have a chief
executive officer other than the chairman of the board, the position of chief
executive officer may be filled by the Board at its pleasure. The chief
executive officer shall be responsible for the general and active management of
the business and affairs of the Corporation, and shall see that all orders and
resolutions of the Board are carried into effect. He shall perform such other
duties and have such other authority and powers as the Board of Directors may
from time to time prescribe.
Section 8: President. The president shall be responsible for the
general and active management of the business and affairs of the Corporation,
and shall see that all orders and resolutions of the Board are carried into
effect. He shall perform such other duties and have such other authority and
powers as the Board of Directors may from time to time prescribe.
Section 9: Vice Presidents. The vice presidents (executive, senior, or
assistant), as such offices are appointed by the Board of Directors, in the
order of their seniority, unless otherwise determined by the Board of
Directors, shall, in the absence or disability of the president, perform the
duties and have the authority and exercise the powers of the president. They
shall perform such other duties and have such other authority and powers as the
Board of Directors may from time to time prescribe or as the president may from
time to time delegate.
Section 10: Secretary. (a) The secretary shall attend all meetings
of the Board of Directors and all meetings of the shareholders and record all
votes, actions and the minutes of all proceedings in a book to be
kept for that purpose and shall perform like duties for the executive and other
committees when required.
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(b) The secretary shall give, or cause to be given, notice of
all meetings of the shareholders and special meetings of the Board of
Directors.
(c) The secretary shall keep in safe custody the seal of the
Corporation and, when authorized by the Board of Directors or the executive
committee, affix it to any instrument requiring it. When so affixed, it shall
be attested by the secretary's signature or by the signature of the treasurer
or an assistant secretary.
(d) The secretary shall be under the supervision of the
president and shall perform such other duties and have such other authority and
powers as the Board of Directors may from time to time prescribe or as the
president may from time to time delegate.
Section 11: Assistant Secretary. The assistant secretaries, as such
offices are created by the Board of Directors, in the order of their seniority,
unless otherwise determined by the Board of Directors, shall, in the absence or
disability of the secretary, perform the duties and have the authority and
exercise the powers of the secretary. They shall perform such other duties and
have such other powers as the Board of Directors may from time to time
prescribe or as the president may from time to time delegate.
Section 12: Treasurer. (a) The treasurer shall have the custody of
the corporate funds and securities and shall keep full and accurate accounts
of receipts and disbursements of the Corporation and shall deposit all
moneys and other valuables in the name and to the credit of the Corporation in
appropriate depositories.
(b) The treasurer shall disburse the funds of the Corporation
ordered by the Board of Directors and prepare financial statements as they
direct.
(c) The treasurer shall perform such other duties and have
such other authority and powers as the Board of Directors may from time to time
prescribe or as the president may from time to time delegate.
(d) The treasurer's books and accounts shall be opened at any
time during business hours to the inspection of any directors of the
Corporation.
ARTICLE 6: INDEMNIFICATION
Section 1: Indemnification of Directors. (a) The Corporation shall
indemnify and hold harmless, to the fullest extent permitted by applicable law,
any person (an "Indemnified Person") who was or is a party or is threatened to
be made a party to or is otherwise involved in any threatened, pending or
completed action, suit or other proceeding, whether civil, criminal,
administrative or investigative and whether formal or informal, by reason of
the fact that he, or a person for whom he is a legal representative (or other
similar representative), is or was a director of the Corporation or is or was
serving at the Corporation's request as a director, officer, partner, trustee,
employee or agent of another corporation, partnership, joint venture, trust,
employee benefit plan or other enterprise, against expenses (including
attorneys' fees), judgments, fines, amounts paid in settlement or other similar
costs
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actually and reasonably incurred in connection with such action, suit or
proceeding. For purposes of this Article 6, all terms used herein that are
defined in Section 33-8-500 of the Act or any successor provision or provisions
shall have the meanings so prescribed in such Section.
(b) Without limiting the provisions of Section 1(a) of this
Article 6, the Corporation shall indemnify a director who was 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 against
reasonable expenses incurred by him in connection with the proceeding. In
addition, the Corporation shall indemnify an individual made a party to a
proceeding because he is or was a director against liability incurred in the
proceeding if: (i) he conducted himself in good faith; (ii) he reasonably
believed: (A) in the case of conduct in his official capacity with the
Corporation, that his conduct was in its best interest; and (B) in all other
cases, that his conduct was at least not opposed to its best interest; and
(iii) in the case of any criminal proceeding, he had no reasonable cause to
believe his conduct was unlawful. The termination of a proceeding by judgment,
order, settlement, 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 described in this subsection (b). The determination of
whether the director met the standard of conduct described in this subsection
(b) shall be made in accordance with Section 33-8-550 of the Act or any
successor provision or provisions.
Section 2: Advancement of Expenses. (a) With respect to any proceeding
to which an Indemnified Person is a party because he is or was a director of
the Corporation, the Corporation shall, to the fullest extent permitted by
applicable law, pay for or reimburse the Indemnified Person's reasonable
expenses (including, but not limited to, attorneys' fees and disbursements,
court costs, and expert witness fees) incurred by the Indemnified Person in
advance of final disposition of the proceeding.
(b) Without limiting the provisions of Section 2(a) of this
Article 6, the Corporation shall, to the fullest extent permitted by applicable
law, pay for or reimburse the reasonable expenses (including, but not limited
to, attorneys' fees and disbursements, court costs and expert witness fees)
incurred by a director who is a party to a proceeding in advance of final
disposition of the proceeding if: (a) the director furnishes the Corporation a
written affirmation of his good faith belief that he has met the standard of
conduct described in Section 1(b) of this Article 6; (b) the director furnishes
the Corporation a written undertaking, executed personally or on his behalf, to
repay the advance if it is ultimately determined that he did not meet such
standard of conduct; and (c) a determination is made that the facts then known
to those making the determination would not preclude indemnification under this
Article 6. The Corporation shall expeditiously pay the amount of such expenses
to the director following the director's delivery to the Corporation of a
written request for an advance pursuant to this Section 2 together with a
reasonable accounting of such expenses. The undertaking required by this
Section 2 shall 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. Determinations and authorizations of payments under this Section 2
shall be made in the manner specified in Section 33-8-550 of the Act or any
successor provision or provisions.
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Section 3: Indemnification of Officers, Employees and Agents. An
officer of the Corporation who is not a director is entitled to the same
indemnification rights which are provided to directors of the Corporation in
Section 1 of this Article 6 and the Corporation shall advance expenses to
officers of the Corporation who are not directors to the same extent and in the
same manner as to directors as provided in Section 2 of this Article 6. In
addition, the Board of Directors shall have the power to cause the Corporation
to indemnify, hold harmless and advance expenses to any officer, employee or
agent of the Corporation who is not a director to the fullest extent permitted
by public policy, by adopting a resolution to that effect identifying such
officers, employees or agents (by position and name) and specifying the
particular rights provided, which may be different for each of the persons
identified. Any officer entitled to indemnification pursuant to the first
sentence of this Section 3 and any officer, employee or agent granted
indemnification by the Board of Directors in accordance with the second
sentence of this Section 3 shall, to the extent specified herein or by the
Board of Directors, be an "Indemnified Party" for the purposes of the
provisions of this Article 6.
Section 4: 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 the power
to indemnify him against the same liability under this Article 6.
Section 5: Nonexclusivity of Rights; Agreements. The rights conferred
on any person by this Article 6 shall neither limit nor be exclusive of any
other rights which such person may have or hereafter acquire under any statute,
agreement, provision of the Articles, these Bylaws, vote of shareholders or
otherwise. The provisions of this Article 6 shall be deemed to constitute an
agreement between the Corporation and each person entitled to indemnification
hereunder. In addition to the rights provided in this Article 6, the
Corporation shall have the power, upon authorization by the Board of Directors,
to enter into an agreement or agreements providing to any person who is or was
a director, officer, employee or agent of the Corporation certain
indemnification rights. Any such agreement between the Corporation and any
director, officer, employee or agent of the Corporation concerning
indemnification shall be given full force and effect, to the fullest extent
permitted by applicable law, even if it provides rights to such director,
officer, employee or agent more favorable than, or in addition to, those rights
provided under this Article 6.
Section 6: Continuing Benefits; Successors. The indemnification and
advancement of expenses provided by or granted pursuant to this Article 6
shall, unless otherwise provided when authorized or ratified, continue as to a
person who has ceased to be a director, officer, employee or agent and shall
inure to the benefit of the heirs, executors and administrators of such person.
For purposes of this Article 6, the term "Corporation" shall include any
corporation, joint venture, trust, partnership or unincorporated business
association that is the successor to all or substantially all of the business
or assets of this Corporation, as a result of merger, consolidation, sale,
liquidation or otherwise, and any such successor shall
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be liable to the persons indemnified under this Article 6 on the same terms and
conditions and to the same extent as this Corporation.
Section 7: Interpretation; Construction. This Article 6 is intended to
provide indemnification to the directors and permit indemnification to the
officers of the Corporation to the fullest extent permitted by applicable law
as it may presently exist or may hereafter be amended and shall be construed in
order to accomplish this result. To the extent that a provision herein prevents
a director or officer from receiving indemnification to the fullest extent
intended, such provision shall be of no effect in such situation. If at any
time the Act is amended so as to permit broader indemnification rights to the
directors and officers of this Corporation, then these Bylaws shall be deemed
to automatically incorporate these broader provisions so that the directors and
officers of the Corporation shall continue to receive the intended
indemnification to the fullest extent permitted by applicable law.
Section 8: Amendment. Any amendment to this Article 6 that limits or
otherwise adversely affects the right of indemnification, advancement of
expenses or other rights of any Indemnified Person hereunder shall, as to such
Indemnified Person, apply only to claims, actions, suits or proceedings based
on actions, events or omissions (collectively, "Post Amendment Events")
occurring after such amendment and after delivery of notice of such amendment
to the Indemnified Person so affected. Any Indemnified Person shall, as to any
claim, action, suit or proceeding based on actions, events or omissions
occurring prior to the date of receipt of such notice, be entitled to the right
of indemnification, advancement of expenses and other rights under this Article
6 to the same extent as if such provisions had continued as part of the Bylaws
of the Corporation without such amendment. This Section 8 cannot be altered,
amended or repealed in a manner effective as to any Indemnified Person (except
as to Post Amendment Events) without the prior written consent of such
Indemnified Person.
Section 9: Severability. Each of the Sections of this Article 6, and
each of the clauses set forth herein, shall be deemed separate and independent,
and should any part of any such Section or clause be declared invalid or
unenforceable by any court of competent jurisdiction, such invalidity or
unenforceability shall in no way render invalid or unenforceable any other part
thereof or any separate Section or clause of this Article 6 that is not
declared invalid or unenforceable.
ARTICLE 7: CERTIFICATES AND SHAREHOLDERS
Section 1: Certificates. Certificates in the form determined by the
Board of Directors shall be delivered representing all shares of which
shareholders are entitled. Certificates shall be consecutively numbered and
shall be entered in the books of the Corporation as they are issued. At a
minimum, each share certificate must state on its face: (a) the name of the
Corporation and that it is organized under the laws of South Carolina; (b) the
name of the person to whom the certificate is issued; and (c) the number and
class of shares and the designation of the series, if any, the certificate
represents. Each share certificate (a) must be signed (either manually or in
facsimile) by at least two officers, including the president, the
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secretary, or such other officer or officers as the Board of Directors shall
designate; and (b) may bear the corporate seal or its facsimile. If the person
who signed (either manually or in facsimile) a share certificate no longer
holds office when the certificate is issued, the certificate is nevertheless
valid.
Section 2: Issuance of Shares. The Board of Directors may authorize
shares to be issued for consideration consisting of any tangible or intangible
property or benefit to the Corporation, including cash, promissory notes,
services performed, written contracts for services to be performed or other
securities of the Corporation. Before the Corporation issues shares, the Board
of Directors must determine that the consideration received or to be received
for shares to be issued is adequate. That determination by the Board of
Directors is conclusive insofar as the adequacy of consideration for the
issuance of shares relates to whether the shares are validly issued, fully paid
and nonassessable. When the Corporation receives the consideration for which
the Board of Directors authorized the issuance of shares, the shares issued
therefor are fully paid and nonassessable.
Section 3: Rights of Corporation with Respect to Registered Owners.
Prior to due presentation for transfer of registration of its shares, the
Corporation may treat the registered owner of the shares as the person
exclusively entitled to vote the shares, to receive any dividend or other
distribution with respect to the shares, and for all other purposes; and the
Corporation shall not be bound to recognize any equitable or other claim to or
interest in the shares on the part of any other person, whether or not it has
express or other notice of such a claim or interest, except as otherwise
provided by law.
Section 4: Transfers of Shares. Transfers of shares shall be made upon
the books of the Corporation kept by the Corporation or by the transfer agent
designated to transfer the shares, only upon direction of the person named in
the certificate or by an attorney lawfully constituted in writing. Before a new
certificate is issued, the old certificate shall be surrendered for
cancellation or, in the case of a certificate alleged to have been lost, stolen
or destroyed, the provisions of these Bylaws shall have been complied with.
Section 5: Registration of Transfer. The Corporation shall register
the transfer of a certificate for shares presented to it for transfer if: ((a)
the certificate is properly endorsed by the registered owner or by his duly
authorized attorney; (b) the signature of such person has been guaranteed by a
commercial bank or brokerage firm that is a member of the National Association
of Securities Dealers and reasonable assurance is given that such endorsements
are effective; (c) the Corporation has no notice of an adverse claim or has
discharged any duty to inquire into such a claim; (d) any applicable law
relating to the collection of taxes has been complied with; and (e) the
transfer is in compliance with applicable provisions of any transfer
restrictions of which the Corporation shall have notice.
Section 6: Lost, Stolen or Destroyed Certificates. The Corporation
shall issue a new certificate in place of any certificate for shares previously
issued if the registered owner of the certificate: (a) makes proof in affidavit
form that the certificate has been lost, destroyed or wrongfully taken; (b)
requests the issuance of a new certificate before the Corporation has notice
that the certificate has been acquired by a purchaser for value in good faith
and without
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notice of an adverse claim; (c) gives a bond in such form, and with such surety
or sureties, with fixed or open penalty, as the Corporation may direct, to
indemnify the Corporation (and its transfer agent and registrar, if any)
against any claim that may be made on account of the alleged loss, destruction
or theft of the certificate; and (d) satisfies any other reasonable
requirements imposed by the Corporation. When a certificate has been lost,
apparently destroyed or wrongfully taken, and the holder of record fails to
notify the Corporation within a reasonable time after he has notice of it, and
the Corporation registers a transfer of the shares represented by the
certificate before receiving such notification, the holder of record is
precluded from making any claim against the Corporation for the transfer or for
a new certificate.
Section 7: Restrictions on Shares. The Board of Directors, on behalf
of the Corporation, or the shareholders may impose restrictions on the transfer
of shares (including any security convertible into, or carrying a right to
subscribe for or acquire shares) to the maximum extent permitted by law. A
restriction does not affect shares issued before the restriction was adopted
unless the holders of the shares are parties to the restriction agreement or
voted in favor of the restriction. A restriction on the transfer of shares is
valid and enforceable against the holder or a transferee of the holder if the
restriction is authorized by this Section 7 and its existence is noted
conspicuously on the front or back of the certificate.
Section 8: Control Share Acquisitions Statute. The Corporation elects
not to be subject to or governed by the South Carolina Control Share
Acquisitions Statute contained in Sections 35-2-101 to 35-2-111 of the South
Carolina Code, or any successor provision or provisions.
Section 9: Voting of Stock Held. Unless otherwise provided by
resolution of the Board of Directors, the president or any executive vice
president shall from time to time appoint an attorney or attorneys or agent or
agents of this Corporation, in the name and on behalf of this Corporation, to
cast the vote which this Corporation may be entitled to cast as a shareholder
or otherwise in any other corporation, any of whose stock or securities may be
held by this Corporation, at meetings of the holders of the stock or other
securities of such other corporation, or to consent in writing to any action by
any of such other corporation, and shall instruct the person or persons so
appointed as to the manner of casting such votes or giving such consent and may
execute or cause to be executed on behalf of this Corporation and under its
corporate seal or otherwise, such written proxies, consents, waivers or other
instruments as may be necessary or proper; or, in lieu of such appointment, the
president or any executive vice president may attend in person any meetings of
the holders of stock or other securities of any such other corporation and
their vote or exercise any or all power of this Corporation as the holder of
such stock or other securities of such other corporation.
ARTICLE 8: GENERAL PROVISIONS
Section 1: Distributions. The Board of Directors may authorize, and
the Corporation may make, distributions (including dividends on its outstanding
shares) in the manner and upon the terms and conditions provided by applicable
law and the Articles.
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Section 2: Books and Records. The Corporation shall keep correct and
complete books and records of account and shall keep minutes of the proceedings
of its shareholders and Board of Directors.
Section 3: Execution of Documents. The Board of Directors or these
Bylaws shall designate the officers, employees and agents of the Corporation
who shall have the power to execute and deliver deeds, contracts, mortgages,
bonds, debentures, checks and other documents for and in the name of the
Corporation, and may authorize such officers, employees and agents to delegate
such power (including authority to redelegate) to other officers, employees or
agents of the Corporation. Unless so designated or expressly authorized by
these Bylaws, no officer, employee or agent shall have any power or authority
to bind the Corporation by any contract or engagement or to pledge its credit
or to render it liable pecuniarily for any purpose or any amount.
Section 4: Fiscal Year. The fiscal year of the Corporation shall be
the same as the calendar year.
Section 5: Seal. The Corporation may provide a seal which contains
the name of the Corporation and the name of the state of incorporation. The
seal may be used by impressing it or reproducing a facsimile of it or otherwise.
Section 6: Resignation. A director may resign by delivering written
notice to the Board of Directors, the chairman or the Corporation. Such
resignation of a director is effective when the notice is delivered unless the
notice specifies a later effective date. An officer may resign at any time by
delivering notice to the Corporation. Such resignation of an officer is
effective when the notice is delivered unless the notice specifies a later
effective date. If a resignation of an officer is made effective at a later
date and the Corporation accepts the future effective date, the Board of
Directors may fill the pending vacancy before the effective date if the Board
of Directors provides that the successor does not take office until the
effective date.
Section 7: Computation of Days. In computing any period of days
prescribed hereunder the day of the act after which the designated period of
days begins to run is not to be included. The last day of the period
so computed is to be included.
Section 8: Amendment of Bylaws. (a) Except to the extent required
otherwise by law, these Bylaws, or the Articles of Incorporation, these Bylaws
may be altered, amended or repealed or new Bylaws may be adopted at any meeting
of the Board of Directors at which a quorum is present, by the affirmative vote
of a majority of the directors then in office, provided notice of the proposed
alteration, amendment or repeal is contained in the notice of the meeting.
(b) Except to the extent required otherwise by law, these
Bylaws, or the Articles of Incorporation, these Bylaws may also be altered,
amended or repealed or new Bylaws may be adopted at any meeting of the
shareholders at which a quorum is present or represented by proxy, by the
affirmative vote of the holders of a majority of each class of shares
17
<PAGE> 23
entitled to vote thereon, provided notice of the proposed alteration, amendment
or repeal is contained in the notice of the meeting.
(c) Upon adoption of any new bylaw by the shareholders, the
shareholders may provide expressly that the Board of Directors may not adopt,
amend or repeal that bylaw or any bylaw on that subject.
Section 9: Construction. If any portion of these Bylaws shall be
invalid or inoperative, then, so far as is reasonable and possible: (a)
the remainder of these Bylaws shall be considered valid and operative and (b)
effect shall be given to the intent manifested by the portion held invalid or
inoperative.
Section 10: Headings. The headings are for convenience of reference
only and shall not affect in any way the meaning or interpretation of
these Bylaws.
The undersigned, as President of the Corporation, hereby certifies
that the bylaws contained herein are the true and correct bylaws adopted by the
Corporation's board of directors in compliance with any procedural requirements
of the Corporation's Articles of Incorporation and the laws of the State of
South Carolina, and the rules and regulations promulgated thereunder.
-------------------------------------
Alan J. George
President
Date:
--------------------------------
18
<PAGE> 1
EXHIBIT 10.1
<PAGE> 2
ALL CASH SALE
IMPROVEMENTS
WHERE NATIONSBANK IS SELLER
PURCHASE AND SALE AGREEMENT
THIS PURCHASE AND SALE AGREEMENT ("Agreement") is made between
NATIONSBANK, NATIONAL ASSOCIATION, SUCCESSOR BY MERGER TO NATIONSBANK OF SOUTH
CAROLINA, N.A. ("Seller"), and PEOPLES COMMUNITY CAPITAL CORPORATION, a South
Carolina banking corporation ("Purchaser").
In consideration of the mutual covenants and representations herein
contained, Seller and Purchaser agree as follows:
1.
PURCHASE AND SALE
1.1 PURCHASE AND SALE. Subject to the terms and conditions of this
Agreement, Seller hereby agrees to sell and convey to Purchaser, and Purchaser
hereby agrees to purchase from Seller, the following described property (herein
collectively called the "Property"):
(a) LAND. Those certain tracts of land (the "Land") in Aiken County, South
Carolina being more particularly described on Exhibit A attached hereto and
incorporated herein by reference. Closing (hereafter defined) for each tract of
land shall be simultaneous. Seller shall have no obligation to close on either
tract of land if Purchaser fails or refuses to close on both tracts
simultaneously;
(b) IMPROVEMENTS. All improvements, consisting of the branch banking
facilities including, without limitation, all mechanical, heating, air
conditioning, ventilation and plumbing fixtures, systems and equipment (the
"Improvements") in and on the Land;
(c) MISCELLANEOUS ITEMS. To the extent they are transferrable and in
Seller's possession, all of Seller's right, title and interest in any
warranties, plans and specifications, engineering plans and studies, floor
plans and landscape plans;
(d) EASEMENTS. All easements, if any, benefiting the Land or the
Improvements;
(e) RIGHTS AND APPURTENANCES. All rights and appurtenances pertaining to
the foregoing, including any right, title and interest of Seller in and to
adjacent streets, alleys or rights-of-way;
(f) KEYS. All keys to locks on the Property; and
(g) TANGIBLE PERSONAL PROPERTY. All of Seller's right, title and interest,
as of the Closing Date (as hereinafter defined) in all fixtures, equipment,
machinery, carpet, drapes and other personal property, if any, located on or
about the Land and the improvements or used exclusively in the operation and
maintenance thereof (the "Tangible Personal Property"). There is, however,
excluded from the definition of Tangible Personal Property, any banking
equipment, security equipment, and/or trade fixtures which Sellers has removed
from the Property prior to the date of execution hereof.
<PAGE> 3
2.
PURCHASE PRICE
PURCHASE PRICE. The purchase price (the "Purchase Price") for the Property
shall be Eight Hundred, Seventy-Five Thousand and NO/100 DOLLARS ($875,000.00)
and shall be paid by Purchaser to Seller at the closing (as defined in Section
6.1). The Purchase Price shall be payable in United States currency by way of
federal wire transfer or other immediately available funds at closing.
3.
EARNEST MONEY
3.1 EARNEST MONEY. Purchaser shall deliver to Edens & Avant, Inc. ("Escrow
Agent") within two (2) business days after the date of this Agreement, the sum
of Seven Thousand, Five Hundred and NO/100 Dollars ($7,500.00) in cash (the
"Earnest Money") to be invested by the Escrow Agent in an interest-bearing
account as Purchaser and Seller shall direct. The Earnest Money shall be
nonrefundable, except in the event of a breach of this Agreement by Seller or
as specified in Section 4.3 hereof. Seller shall have the option of terminating
this Agreement if the Earnest Money is not delivered to the Escrow Agent within
such time. If the sale of the Property is consummated pursuant to the terms of
this Agreement, the Earnest Money and all interest accrued thereon shall be
paid to Seller and applied to the payment of the Purchase Price. If Purchaser
terminates this Agreement in accordance with any right to terminate described
in Section 4.3 hereof, the Earnest Money and all interest accrued thereon shall
be returned to Purchaser, and no party hereto shall have any further
obligations under this Agreement.
3.2 OPTION MONEY. Purchaser may elect, at any time prior to the expiration
of Purchaser's Inspection Period as hereinafter defined, to purchase an option
to extend Closing for an additional forty-five (45) days, if this Agreement has
not previously been terminated pursuant to a right of either party herein, by
depositing an additional, nonrefundable, TEN THOUSAND AND NO/100 DOLLARS
($10,000.00) (the "Option Money"). After the date of deposit of the Option
Money, both the Option Money and the Earnest Money shall be nonrefundable,
except in the case of a material breach of this Agreement by Seller.
4.
CONDITIONS TO CLOSING
4.1 DELIVERY OF TITLE COMMITMENT AND SURVEY.
(a) At Purchaser's option and sole expense, Purchaser may obtain a
Commitment or Commitments (a "Title Commitment") for an Owner's Policy of Title
Insurance (a "Title Policy") issued by a title insurance company selected by
Purchaser (the "Title Company"); such Title Policy to name Purchaser as
insured, in the amount of the Purchase Price, insuring that Purchaser owns good
and indefeasible fee simple title to the Property, subject only to the
Permitted Exceptions. Purchaser agrees to deliver to Seller a copy of the Title
Commitment(s) no later than ten (10) business days prior to the Closing Date.
At Purchaser's option and expense, Purchaser may obtain a current survey of the
Property (the "Survey"), prepared by a licensed surveyor.
(b) Purchaser shall have thirty (30) days after the date of this Agreement
(the "Approval Period") within which to approve or disapprove the Title
Commitment and the Survey, including the information reflected therein, such
approvals or disapprovals to be within Purchaser's sole discretion (any such
disapproved item or matter herein referred to as a "Title Exception"). If
Purchaser fails to disapprove any item or information contained in the Title
Commitment or Survey by written notice (which shall include a copy of the Title
Commitment and Survey) delivered to Seller of Purchaser's objection to such
Title Exception(s) (a "Title Objection Notice") prior to the expiration of the
Approval Period, Purchaser shall be deemed to have approved such Title
Exception(s) and shall accept title to the Property as reflected in the Title
Commitment and Survey, and subject to the Permitted Exceptions
2
<PAGE> 4
(as defined below). If Purchaser delivers a Title Objection Notice to Seller
prior to the expiration of the Approval Period, Seller shall have the right
(without any obligation to do so) to cure or attempt to cure the Title
Exception(s) referenced in Purchaser's Title Objection Notice within ten (10)
days after Purchaser's delivery of the Title Objection Notice, or, if sooner,
by the Closing Date (as hereinafter defined). In the event Seller is unable to
cure or elects not to cure any one or more of the Title Exception(s) referenced
in the Title Objection Notice, Seller may, within thirty (30) days after
Seller's receipt of Purchaser's Title Objection Notice, notify Purchaser in
writing of such inability or election and request that Purchaser waive
Purchaser's right to terminate this Agreement due to such Title Exception(s)
(the "Title Exception Election Notice"). The term "Permitted Exceptions", as
used herein, shall mean (i) the Title Exception(s) listed in Schedule B of the
Title Commitment specified which Purchaser approves, waives or is deemed to
approve pursuant to this Section 4.1, (ii) any general exceptions and
exclusions contained in the standard Owner's Policy issued by the Title Company
and (iii) the exceptions listed on the Limited Warranty Deed attached as
Exhibit B hereto. Notwithstanding the foregoing sentence, however, Purchaser
may object to those exceptions listed on the Limited Warranty Deed attached
hereto, by delivering to Seller prior to the expiration of the Approval Period
a Title Objection Notice referencing such items, in accordance with the terms
hereof.
If Seller elects not to cure or is unable to cure, Purchaser may terminate
this Agreement, and its obligations hereunder, by sending written notice of
termination to Seller within ten (10) days following Purchaser's receipt of
Seller's Title Exception Election Notice and Purchaser shall thereafter receive
a refund of the Earnest Money, or Purchaser may waive Purchaser's objections
and proceed to Closing.
4.2 INSPECTION.
(a) Purchaser may inspect the Property at any reasonable time on or before
thirty (30) days after the date hereof (the "Inspection Period"), and may
terminate this Agreement because of any unacceptable fact or condition
affecting or existing on the Property (an "Unacceptable Condition") or for any
other reason in Purchaser's sole discretion (including Purchaser's inability to
obtain financing), by delivering written notice of termination to Seller prior
to the expiration of the Inspection Period. Also, Purchaser may notify Seller
in writing prior to the expiration of the Inspection Period of any Unacceptable
Condition(s) that Purchaser desires to have cured or otherwise addressed as a
condition to Purchaser's obligation to close the transaction contemplated
hereby (a "Notice of Unacceptable Condition"). Purchaser's right to make
objections regarding Unacceptable Condition(s), as provided herein, may relate
to any matter, whether dealing with a Property inspection or books, records or
other information pertaining to the Property. If Purchaser fails to either (i)
terminate this Agreement by delivering written notice of termination to Seller
prior the expiration of the Inspection Period or (ii) notify Seller of any
Unacceptable Condition(s) by delivering a Notice of Unacceptable Condition
referencing such Unacceptable Conditions to Seller prior to the expiration of
the Inspection Period, Purchaser shall be deemed to have obtained acceptable
financing, and all Unacceptable Condition(s) not referenced in the Notice of
Unacceptable Conditions shall be deemed waived by Purchaser. If Purchaser
delivers a Notice of Unacceptable Condition to Seller prior to the expiration
of the Inspection Period, Seller shall have the right (without any obligation
to do so) to cure or attempt to cure the Unacceptable Condition(s) referenced
in Purchaser's Notice of Unacceptable Condition within ten (10) days after
Purchaser's delivery of the Notice of Unacceptable Condition, or, if sooner, by
the Closing Date (as hereinafter defined). In the event Seller is unable to
cure or elects not to cure any one or more of the Unacceptable Condition(s)
referenced in the Notice of Unacceptable Condition, Seller may, within thirty
(30) days after Seller's receipt of Purchaser's Title Objection Notice, notify
Purchaser in writing of such inability or election and request that Purchaser
waive Purchaser's right to terminate this Agreement due to such Unacceptable
Condition(s) (the "Unacceptable Condition Election Notice"). If Seller elects
not to cure, or is unable to cure, Purchaser may terminate this Agreement, and
its obligations hereunder, by sending written notice of termination to Seller
within ten (10) days following Purchaser's receipt of Seller's Unacceptable
Condition Election Notice, and Purchaser shall thereafter receice a refund of
the Earnest Money or Purchaser may waive Purchaser's objections and proceed to
Closing.
(b) With respect to any subsurface or environmental investigations
(excepting only a Phase I Environmental Audit), Purchaser shall notify Seller
in writing of its intention or the intention of its agents or representatives
to undertake any such investigations at least 48 hours prior to such intended
investigations and obtain
3
<PAGE> 5
Seller's written consent to any such investigations to be conducted. At
Seller's option, Seller or Seller's agents may be present for any such
investigations. Purchaser shall bear the cost of all such investigations and
inspections.
(c) Seller shall make available to Purchaser, for Purchaser's review at
either Seller's offices or at the Property (if the Property is improved
property), the Review Documents (as defined below), provided that (A) Purchaser
provides Seller with written notice three (3) business days prior to the day
Purchaser intends to conduct such review, and (B) Purchaser conducts such
review within the Inspection Period. As used herein, the term "Review
Documents" shall mean and refer to the following:
(i) Warranties. Copies of all warranties regarding the Property
(the "Warranties"), if any, in the possession of Seller as
of the date of this Agreement.
(ii) Plans and Specifications. Copies of the as-built plans and
specifications for the Property, if any, in the possession
of Seller as of the date of this Agreement.
(iii) Certificates of Occupancy, Permits and Licenses. Copies of
all permits and licenses issued by any governmental
authorities or utility companies in connection with the
occupancy and use of the Improvements (including certificates
of occupancy), if any, in the possession of Seller.
(iv) Environmental Site Assessments. Copies of all written
environmental site assessments, reports and audits, if any,
pertaining to the Property and prepared by independent
consultants for and on behalf of Seller.
Purchaser acknowledges that the Review Documents may have been compiled from a
variety of sources, and are and shall be provided by Seller WITHOUT
REPRESENTATION OR WARRANTY as to their accuracy or completeness. Seller
specifically disclaims the accuracy or completeness of any written
environmental assessments, reports or audits provided by Seller pursuant to the
terms hereof, and encourages Purchaser to obtain Purchaser's own assessment of
the environmental risks, if any, associated with the Property, using such
experts and consultants as Purchaser may select.
(d) All information provided by Seller to Purchaser or obtained by
Purchaser relating to the Property in the course of its review, including,
without limitation, any environmental assessment or audit, shall be treated as
confidential information by Purchaser and Purchaser shall instruct all of its
employees, agents, representatives and contractors as to the confidentiality of
all such information. Purchaser shall be liable for all costs and expenses,
and/or damage or injury to any person or property resulting from any such
inspection or any failure to keep all such information confidential, whether
occasioned by the acts of Purchaser or any of its employees, agents or
representatives, and Purchaser shall indemnify and hold harmless Seller from
any liability, claims or expenses (including, without limitation, mechanic's
liens and/or reasonable attorneys' fees) resulting therefrom. Notwithstanding
anything to the contrary contained in this Agreement, the obligations of
Purchaser set forth in this Section 4.2(d) shall survive the Closing or the
termination of this Agreement, as applicable. Additionally, Purchaser hereby
grants to Seller a security interest in the Earnest Money as security for
Purchaser's indemnification provided in this Section.
4.3 TERMINATION. If this Agreement is terminated prior to the expiration
of the Approval Period and the Inspection Period pursuant to the right of
Purchaser to terminate this Agreement, the Earnest Money will be promptly
refunded to Purchaser and neither party shall have any further obligations
under this Agreement except with respect to the obligations specified in
Section 4.2, Section 10.2 and Section 10.10, which shall survive such
termination. Purchaser shall, within ten (10) days of such termination, deliver
to Seller copies of all feasibility studies, surveys, engineering reports and
all other information obtained by Purchaser with respect to the Property.
4
<PAGE> 6
5
NO REPRESENTATIONS OR WARRANTIES BY SELLER
5.1 DISCLAIMERS. PURCHASER ACKNOWLEDGES AND AGREES THAT SELLER HAS NOT
MADE, DOES NOT MAKE AND SPECIFICALLY NEGATES AND DISCLAIMS ANY REPRESENTATIONS,
WARRANTIES, PROMISES, COVENANTS, AGREEMENTS OR GUARANTIES OF ANY KIND OR
CHARACTER WHATSOEVER, WHETHER EXPRESS OR IMPLIED, ORAL OR WRITTEN, PAST,
PRESENT OR FUTURE, OF, AS TO, CONCERNING OR WITH RESPECT TO (A) THE VALUE,
NATURE, QUALITY OR CONDITION OF THE PROPERTY, INCLUDING, WITHOUT LIMITATION,
THE WATER, SOIL AND GEOLOGY; (B) THE INCOME TO BE DERIVED FROM THE PROPERTY;
(C) THE SUITABILITY OF THE PROPERTY FOR ANY AND ALL ACTIVITIES AND USES WHICH
PURCHASER OR ANYONE ELSE MAY CONDUCT THEREON; (D) THE COMPLIANCE OF OR BY THE
PROPERTY OR ITS OPERATION WITH ANY LAWS, RULES, ORDINANCES OR REGULATIONS OF
ANY APPLICABLE GOVERNMENTAL AUTHORITY OR BODY; (E) THE HABITABILITY,
MERCHANTABILITY, MARKETABILITY, PROFITABILITY OR FITNESS FOR A PARTICULAR
PURPOSE OF THE PROPERTY; (F) THE MANNER OR QUALITY OF THE CONSTRUCTION OF
MATERIALS, IF ANY, INCORPORATED INTO THE PROPERTY; (G) THE MANNER, QUALITY,
STATE OF REPAIR OR LACK OF REPAIR OF THE PROPERTY; OR (H) ANY OTHER MATTER WITH
RESPECT TO THE PROPERTY, AND SPECIFICALLY, THAT SELLER HAS NOT MADE, DOES NOT
MAKE AND SPECIFICALLY DISCLAIMS ANY REPRESENTATIONS REGARDING COMPLIANCE WITH
ANY ENVIRONMENTAL PROTECTION, POLLUTION OR LAND USE LAWS, RULES, REGULATIONS,
ORDERS OR REQUIREMENTS, INCLUDING SOLID WASTE, AS DEFINED BY THE U.S.
ENVIRONMENTAL PROTECTION AGENCY REGULATIONS AT 40 C.F.R., PART 261, OR THE
DISPOSAL OR EXISTENCE, IN OR ON THE PROPERTY, OF ANY HAZARDOUS SUBSTANCE AS
DEFINED BY THE COMPREHENSIVE ENVIRONMENTAL RESPONSE COMPENSATION AND LIABILITY
ACT OF 1980, AS AMENDED, AND REGULATIONS PROMULGATED THEREUNDER. PURCHASER
FURTHER ACKNOWLEDGES AND AGREES THAT, HAVING BEEN GIVEN THE OPPORTUNITY TO
INSPECT THE PROPERTY, PURCHASER IS RELYING SOLELY ON ITS OWN INVESTIGATION OF
THE PROPERTY AND NOT ON ANY INFORMATION PROVIDED OR TO BE PROVIDED BY SELLER,
AND AT THE CLOSING, AGREES TO ACCEPT THE PROPERTY AND WAIVE ALL OBJECTIONS OR
CLAIMS AGAINST SELLER (INCLUDING, BUT NOT LIMITED TO, ANY RIGHT OR CLAIM OF
CONTRIBUTION) ARISING FROM OR RELATED TO THE PROPERTY OR TO ANY HAZARDOUS
MATERIALS ON THE PROPERTY. PURCHASER FURTHER ACKNOWLEDGES AND AGREES THAT ANY
INFORMATION PROVIDED OR TO BE PROVIDED WITH RESPECT TO THE PROPERTY WAS
OBTAINED FROM A VARIETY OF SOURCES AND THAT SELLER HAS NOT MADE ANY INDEPENDENT
INVESTIGATION OR VERIFICATION OF SUCH INFORMATION AND MAKES NO REPRESENTATIONS
AS TO THE ACCURACY OR COMPLETENESS OF SUCH INFORMATION. SELLER IS NOT LIABLE OR
BOUND IN ANY MANNER BY ANY VERBAL OR WRITTEN STATEMENTS, REPRESENTATIONS OR
INFORMATION PERTAINING TO THE PROPERTY, OR THE OPERATION THEREOF, FURNISHED BY
ANY REAL ESTATE BROKER, AGENT, EMPLOYEE, SERVANT OR OTHER PERSON. PURCHASER
FURTHER ACKNOWLEDGES AND AGREES THAT TO THE MAXIMUM EXTENT PERMITTED BY LAW,
THE SALE OF THE PROPERTY AS PROVIDED FOR HEREIN IS MADE ON AN "AS-IS" CONDITION
AND BASIS WITH ALL FAULTS. IT IS UNDERSTOOD AND AGREED THAT THE PURCHASE PRICE
HAS BEEN ADJUSTED BY PRIOR NEGOTIATION TO REFLECT THAT THE PROPERTY IS SOLD BY
SELLER AND PURCHASED BY PURCHASER SUBJECT TO THE FOREGOING.
5.2 ASBESTOS CONTAINING MATERIALS. Purchaser acknowledges receipt of the
reports attached hereto as Exhibit C, entitled "Asbestos Bulk Survey" prepared
by Health & Hygiene, Inc. dated February 19, 1992, separately addressing each
tract. In the event Purchaser does not terminate this Agreement pursuant to any
right granted to Purchaser hereunder, Purchaser agrees that it will assume "all
liabilities associated with or arising out of the Asbestos Containing Materials
identified therein, from and after the Closing Date.
5
<PAGE> 7
6.
CLOSING
6.1 CLOSING. The closing ("Closing") shall be held at the offices of
Purchaser's counsel on or before the fifteenth (15th) day following the end of
the Inspection Period, as the same may be extended pursuant to the terms of
this Agreement (the "Closing Date"), unless the parties mutually agree upon
another place or date. If the Closing date for either tract of land shall be
extended pursuant to any right to extend herein granted in order to address
matters of title, survey, or physical condition, the Closing date shall be
similarly extended on both tracts of land, it being the intent of the parties
that the Closing occur simultaneously for each tract.
6.2 SELLER'S OBLIGATIONS AT CLOSING. At Closing, Seller shall deliver to
Purchaser the following documents:
(a) DEED. Limited Warranty Deed (the "Deed") executed by Seller conveying
the Land to Purchaser in the form attached to this Agreement as Exhibit B
subject to no exceptions other than the Permitted Exceptions;
(b) EVIDENCE OF AUTHORITY. Copy of Seller's resolutions, certified by
Seller as true and complete, as of the Closing Date, so as to evidence the
authority of the persons signing the Deed and other documents to be executed by
Seller at Closing and the power and authority of Seller to convey the Property
to Purchaser in accordance with this Agreement.
(c) WARRANTIES. The originals of all warranties regarding the Property,
if any, in the possession of Seller;
(d) FOREIGN PERSON. An affidavit of Seller certifying that Seller is not
a "foreign person" as defined in the federal Foreign Investment in Real
Property Tax Act of 1980.
6.3 PURCHASER'S OBLIGATIONS AT CLOSING. At Closing, Purchaser shall
deliver to Seller the following:
(a) PURCHASE PRICE. The Purchase Price by cashier's check or wire
transfer of immediately available funds; and
(b) EVIDENCE OF AUTHORITY. Copy of Purchaser's resolutions and all
amendments thereto, certified as true and complete, as of the Closing
Date, so as to evidence the authority of the persons signing this Agreement.
6.4 PRORATION. Real estate taxes and other assessments with respect to the
Property for the year in which the Closing occurs, shall be prorated to the
Closing Date.
(a) If the Closing shall occur before the tax rate or the assessed
valuation of the Property is fixed for the then current year, the apportionment
of taxes for the year in which the Closing occurs shall be upon the basis of
the tax rate for the preceding year applied to the latest assessed valuation.
Subsequent to the Closing, when the tax rate and the assessed valuation of the
Property is fixed for the year in which the Closing occurs, the parties agree
to adjust the proration of taxes and, if necessary, to refund or repay such
sums as will be necessary.
(b) In the event the Property has been assessed for property tax purposes
at such rates as would result in "roll-back" taxes upon the changes in land
usage or ownership of the Property, Purchaser agrees to pay all such taxes and
indemnify and save Seller harmless from and against any and all claims and
liabilities for such taxes.]
This agreement of Seller and Purchaser set forth in this Section 6.4 shall
survive the Closing.
6.5 POSSESSION. Possession of the Property shall be delivered to
Purchaser at Closing, subject to the Permitted Exceptions.
6
<PAGE> 8
6.6 CLOSING COSTS. Except as otherwise expressly provided herein, Seller
shall pay, on the Closing Date, documentary deed stamps and transfer taxes and
Seller's legal fees, and Purchaser shall pay, on the Closing Date, all
recording costs, the cost of the survey and Owner's Policy and Purchaser's
legal fees.
7.
RISK OF LOSS
7.1 CASUALTY. If the Property, or any part thereof suffers any damage
prior to Closing from fire or other casualty which Seller shall have no
obligation to repair, Purchaser may either (a) terminate this Agreement or (b)
consummate the Closing, in which latter event the proceeds of any insurance
covering such damage, up to the amount of the Purchase Price, shall be assigned
to Purchaser at Closing.
7.2 CONDEMNATION. If, prior to Closing, action is initiated or threatened
to take any of the Property by eminent domain proceedings or by deed in lieu
thereof, Purchaser shall have ten (10) days from receipt of written notice of
such event from Seller to advise Seller that it intends to (a) terminate this
Agreement or (b) consummate the Closing, in which latter event the award of the
condemning authority shall be assigned to Purchaser at the Closing. If Seller
does not receive any such notice from Purchaser within such ten (10) day
period, then Purchaser shall be deemed to have elected option (b) of this
Section 7.2.
8.
DEFAULT
8.1 BREACH BY SELLER. If Seller breaches this Agreement, Purchaser may, as
Purchaser's sole and exclusive remedy hereunder, terminate this Agreement and
thereupon shall be entitled to the immediate return of the Earnest Money and
the Option Money, together with all accrued interest thereon. In no event shall
Seller be liable to Purchaser for any actual, punitive, speculative,
consequential or other damages.
8.2 BREACH BY PURCHASER. If Purchaser breaches this Agreement, Seller may,
as Seller's sole remedy and relief hereunder, either (a) terminate this
Agreement and thereupon be entitled to the Earnest Money and the Option Money
together with all interest accrued thereon, if any, as liquidated damages (and
not as a penalty) or (b) enforce specific performance of this Agreement. Seller
and Purchaser have made this provision for liquidated damages because it would
be difficult to calculate on the date hereof the amount of actual damages for
such breach, and these sums represent reasonable compensation to Seller for
such breach.
9.
FUTURE OPERATIONS
9.1 FUTURE OPERATIONS. From the date of this Agreement until the Closing
or earlier termination of this Agreement:
(a) MAINTENANCE, LITIGATION. Except for condemnation and casualty which
are provided for in Section 7, Seller (i) will keep and maintain the Property
in its condition as of the date of this Agreement (reasonable wear and tear
excepted), and (ii) will use its best effort promptly to advise Purchaser of
any litigation, arbitration, or administrative hearing concerning the Property
arising or threatened after the date of this Agreement.
(b) CONTRACTS. Seller will not, without the prior written consent of
Purchaser, modify, enter into, or renew any contract concerning the Property
which cannot be cancelled as of the Closing Date.
9.2 RESTRICTIONS ON USE. The deed conveying the Property to Purchaser
shall contain certain restrictions prohibiting the Property from being
used as any type of financial institution for a period of five years
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<PAGE> 9
from the date of Closing, by any entity other than Purchaser or its
subsidiaries except that use as a community bank by a similar entity Purchaser
or its subsidiaries shall be permitted.
10.
CONFIDENTIALITY
10.1 NON-DISCLOSURE. From and after the Effective Date of this Agreement or
unless with the prior written consent of the other party, neither Purchaser nor
Seller shall prior to the Closing (i) make or permit to be made any
announcements or press releases concerning the existence of this Agreement, the
terms of the purchase of the Property or any other information concerning this
Agreement or the transaction contemplated herein or (ii) disclose or permit to
be disclosed, directly or indirectly, to any person or entity any information
in respect of the Property which is obtained pursuant to this Agreement or
through any inspection of the Property or records concerning the Property.
Notwithstanding the foregoing, Purchaser shall have the right, without
obtaining any prior consent, to disclose this Agreement and such information
about this agreement as its counsel deems necessary in any regulatory filing,
including filings with the Securities and Exchange Commission. Additionally, at
such time as Purchaser has (a) received all regulatory approvals required to
operate a community bank at each of the locations described in Exhibit A
hereto; and (b) accepted the title status and condition of each Property,
waived any remaining time under the Approval Period and the Inspection Period,
and established a Closing Date by written notice to Seller, then Purchaser
shall have the right to post a sign at each Property, identifying the Property
as the future home of People's Community Bank of South Carolina, and to issue
press releases stating that Purchasers have agreed to purchase the Property for
the future home of People's Community Bank of South Carolina, but neither the
signs nor any press release shall identify the Property as a location or former
location of NationsBank or otherwise include references to NationsBank.
10.2 LIMITED DISCLOSURE TO ADVISORS. Each party shall have the right to
disclose information in respect of the Property to its attorneys, accountants,
prospective lenders and their Counsel so long as they agree to be bound by the
terms of this Section 10.
11.
MISCELLANEOUS
11.1 NOTICE. Whenever this Agreement requires or permits any consent,
approval, notice, request, or demand from one party to the other (collectively
"Notice"), such Notice must be in writing to be effective and shall be
effective on the date of actual receipt of such Notice by the addressee or when
the attempted initial delivery is refused or when it cannot be made because of
a change of address of which the sending party has not be notified. The
following shall, without limitation, be prima facia evidence of actual receipt
of Notice by the addressee: (a) if mailed, by a United States certified mail
return receipt, signed by the addressee or the addressee's agent; (b) if by
telegram, by a telegram receipt signed by the addressee or the addressee's
agent; or (c) if hand-delivered, by a delivery receipt, signed by the addressee
or the addressee's agent. The parties' respective addresses for delivery of any
Notice are set forth below unless another address is designated in writing by
any party to the other.
IF TO SELLER: NationsBank, N.A.
Corporate Real Estate Services
401 North Tryon Street
NC1-021-06-12
Charlotte, North Carolina 28255
Attention: Sherry Cronan
Telephone/(Fax): (704) 388-2117 (0547)
8
<PAGE> 10
WITH COPIES TO: NationsBank Legal Department
101 North Tryon Street
NC1-001-14-13
Charlotte, North Carolina 28255
Attention: Connie J. Miller, Senior Counsel
Telephone/(Fax): (704) 386-9044 (8032)
IF TO PURCHASER: People's Community Capital Corporation
18 Cherry Hill Drive
Aiken, South Carolina 29803
Attention:
----------------------------------
Telephone/(Fax): (803) 649-5782 (642-8247)
WITH A COPY TO: --------------------------------------------
--------------------------------------------
Attention:
----------------------------------
11.2 REAL ESTATE COMMISSIONS. Neither Seller nor Purchaser has contacted
any real estate broker, finder or similar person in connection with the
transaction contemplated hereby except Edens & Avant, Inc. and Trammell Crow
Companies ("Seller's Broker") and T and F Properties of Aiken, South Carolina
("Purchaser's Broker"). Seller shall pay at the Closing a brokerage fee in an
amount previously agreed to between Seller and Seller's Broker, such fee to be
divided between Seller's Broker and Purchaser's Broker in accordance with a
separate agreement between Seller's Broker and Purchaser's Broker, provided,
however, that no right to such brokerage fee shall vest in any broker or
broker's agent prior to Closing, and no commissions shall be due if the Closing
does not occur for any reason. To the actual knowledge of Seller and Purchaser,
no other Acquisition Fees (as hereafter defined) have been paid or are due and
owing to any other person or entity. As used herein, "Acquisition Fees" shall
mean all fees paid to any person or entity in connection with the selection and
purchase of the Property, including real estate commissions, selection fees,
and non-recurring management and start-up fees, development fees or any other
fee of similar nature. Seller and Purchaser each hereby agree to indemnify and
hold harmless the other from and against any and all claims for Acquisition
Fees or similar charges with respect to this transaction arising by, through or
under the indemnifying party and each further agrees to indemnify and hold
harmless the other from any loss or damage resulting from an inaccuracy in the
representations contained in this Section 11.2. This indemnification agreement
of the parties shall survive the Closing.
11.3 ENTIRE AGREEMENT. This Agreement embodies the entire agreement
between the parties relative to the subject matter hereof, and there are no
oral or written agreements between the parties nor any representations made by
either party relative tot he subject matter hereof which are not expressly set
forth herein.
11.4 AMENDMENT. This Agreement may be amended only by a written
instrument executed by the party or parties to be bound thereby.
11.5 HEADINGS. The captions and headings used in this Agreement are for
convenience only and do not in any way limit, amplify, or otherwise modify the
provisions of this Agreement.
11.6 TIME OF ESSENCE. Time is of the essence of this Agreement. However,
if the final date of any period which is not set out in any provision of this
Agreement falls on a Saturday, Sunday or legal holiday under the law of the
United States or the State of South Carolina, then in such event, the time of
such period shall be extended to the next day which is not a Saturday, Sunday
or legal holiday.
11.7 GOVERNING LAW. This Agreement shall be governed by the laws of the
State of Carolina and the applicable federal laws of the United States.
9
<PAGE> 11
11.8 SUCCESSORS AND ASSIGNS. This Agreement shall bind and inure to the
benefit of Seller and Purchaser and their respective successors and assigns.
Purchaser shall not assign Purchaser's rights under this Agreement without the
prior written consent of Seller.
11.9 PURCHASER'S REPRESENTATIONS AND WARRANTIES. Purchaser represents
and warrants that it is a newly organized community bank and is not a
subsidiary of or affiliated with any other bank or financial institution as of
the date hereof.
11.10 INVALID PROVISION. If any provision of this Agreement is held to be
illegal, invalid or unenforceable under present or future laws, such provision
shall be fully severable; this Agreement shall be construed and enforced as if
such illegal, invalid or unenforceable provisions had never comprised a part of
this Agreement, and the remaining provisions of this Agreement shall remain in
full force and effect and shall not be affected by the illegal, invalid, or
unenforceable provision or by its severance from this Agreement.
11.11 ATTORNEYS' FEES. In the event it becomes necessary for either party
hereto to file suit to enforce this Agreement or any provision contained
herein, the party prevailing in such suit shall be entitled to recover, in
addition to all other remedies or damages as herein provided, reasonable
attorneys' fees incurred in such suit.
11.12 MULTIPLE COUNTERPARTS. This Agreement may be executed in a number
of identical counterparts, each of which for all purposes is deemed an
original, and all of which constitute collectively one (1) agreement.
11.13 DATE OF THIS AGREEMENT. This Agreement shall be null and void unless
Purchaser, no later than March 20, 1997, delivers three (3) executed copies of
this Agreement to Seller at the address shown in Section 12.1 hereof. As used
in this Agreement, the terms "date of this Agreement" or "date hereof" shall
mean and refer to the date of execution of this Agreement by Seller.
11.14 EXHIBITS. The following exhibits are attached to this Agreement and
are incorporated into this Agreement and made a part hereof:
(a) EXHIBIT A, the land;
(b) EXHIBIT B, the Limited Warranty Deed; and
(c) EXHIBIT C, Asbestos Bulk Survey.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed under seal by persons duly empowered to bind the parties to perform
their respective obligations hereunder the day and year first above written.
SELLER:
DATE OF EXECUTION BY SELLER: NATIONSBANK, NATIONAL ASSOCIATION,
successor by merger to NationsBank
of South Carolina, N.A.
3/20/97
- --------------------------------
By: /s/ Richard E. Murrell
---------------------------------
Name: Richard E. Murrell
-------------------------------
Title: Sr. Vice-Pres.
------------------------------
10
<PAGE> 12
PURCHASER:
DATE OF EXECUTION BY PURCHASER: PEOPLES COMMUNITY CAPITAL CORPORATION,
a South Carolina banking corporation
3/17/97
- -------------------------------
By: /s/ T. B. Wessinger
-----------------------------------
Name: T. B. Wessinger
---------------------------------
Title: Chairman & CEO
--------------------------------
The undersigned Escrow Agent hereby acknowledges receipt of the Earnest
Money and a copy of this Agreement, and agrees to hold and dispose of the
Earnest Money in accordance with the provisions of this Agreement.
ESCROW AGENT:
DATE OF RECEIPT BY ESCROW AGENT: Edens & Avant, Inc.
3/18/97 By: /s/ Eugene C. Green
- -------------------------------- -----------------------------------
Name: Eugene C. Green
---------------------------------
Title: VP Operations
--------------------------------
11
<PAGE> 13
EXHIBIT A TO PURCHASE AND SALE AGREEMENT
LAND
NORTH AUGUSTA BRANCH:
GEORGIA AVENUE PROPERTY -- All that certain piece, parcel or lot of land, with
the improvements thereon, situate, lying and being located on Georgia Avenue,
in the City of North Augusta, County of Aiken, State of South Carolina, and
being more particularly shown on a plat prepared for Bankers Trust of S.C. by
Cox and Dinkins, Inc., dated December 2, 1982, and recorded in the office of
the RMC for Aiken County in Plat Book 12, Page 166, and according to said plat
having the following boundaries and measurements, to wit: On the Southeast by
Georgia Avenue, whereon it measures Ninety (90') feet; on the Southwest by
property now or formerly Howard, whereon it measures Two Hundred and 66/100
(200.66') feet; on the Northwest by an Alleyway, whereon it measures Ninety
(90') feet; and on the Northeast by property now or formerly Preston Wise, et
al, whereon it measures Two Hundred and 4/10 (200.4') feet; be all measurements
a little more or less.
WEST AVENUE -- All that certain piece, parcel or lot of land, with the
improvements thereon, situate, lying and being located in the City of North
Augusta, County of Aiken, State of South Carolina, on West Avenue, and being
more particularly shown on a plat prepared for Bankers Trust of S.C. by Cox and
Dinkins, Inc., dated December 2, 1982, and recorded in the office of the RMC
for Aiken County in Plat Book 12, Page 166, and according to said plat having
the following boundaries and measurements, to wit: On the Northwest by West
Avenue, whereon it measures Eighty-five (85') feet; on the Northeast by
property now or formerly Eubanks, whereon it measures Two Hundred and 72/100
(220.72') feet; on the Southeast by an Alleyway, whereon it measures
Eighty-four and 95/100 (84.95') feet; and on the Southwest by property now or
formerly Butler, whereon it measures Two Hundred and 61/100 (200.61') feet; be
all measurements a little more or less.
DERIVATION -- Being the same property conveyed to NationsBank of South
Carolina, N.A. by deed of American Real Estate Holdings Limited Partnership,
dated March 25, 1993, recorded in Volume 1383 at page 116, RMC records of Aiken
County, South Carolina.
TMS # 10-025-05-005
TMS # 10-025-05-014
TMS # 10-025-05-015
WHISKEY ROAD BRANCH:
AIKEN SOUTH - AIKEN COUNTY
All that certain piece, parcel or lot of land, with the improvements thereon,
situate, lying and being located on the western side of Whiskey Road, in the
County of Aiken, State of South Carolina, being shown on a plat of property of
Whiskey Road Properties, in process of conveyance to Bankers Trust of South
Carolina by Jones and Murph, dated July 27, 1981 and recorded in the office of
the R.M.C. for Aiken County in Plat Book 325, page 28; being more particularly
shown on a plat prepared for Bankers Trust of S.C. by Cox and Dinkins, Inc.,
dated November 9, 1982, revised December 3, 1982, and recorded in Plat Book 12,
page 165, and according to latter plat having the following boundaries and
measurements, to wit: On the East by Whiskey Road (S.C. Highway No. 19),
whereon it measures Two Hundred Thirty-four and 06/100 (234.06') feet; on the
South by property now or formerly Whiskey Road Properties, whereon it measures
Three Hundred and 11/100 (300.11') feet; on the West by property
<PAGE> 14
now or formerly Silver Bluff Estates, whereon it measures Two Hundred
Thirty-four (234') feet; and on the North by property now or formerly South
Aiken Presbyterian Church, whereon it measures Two Hundred Ninety-nine and
92/100 (299.92') feet; be all measurements a little more or less.
DERIVATION: Being the same property conveyed to NationsBank of South Carolina,
N.A. by deed of American Real Estate Holdings Limited Partnership, dated March
26, 1993 and recorded at Volume 1383 page 95, R.M.C. office of Aiken County,
South Carolina.
TMS # 30-057-07-002
<PAGE> 1
EXHIBIT 10.2
<PAGE> 2
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (this "Agreement") dated as of March 3,
1997, is made by and between People's Community Capital Corporation, a South
Carolina corporation (the "Employer" or the "Company") which is the proposed
bank holding company for People's Community Bank of South Carolina (Proposed),
a proposed state bank (the "Bank"), and TOMMY B. WESSINGER, an individual
resident of South Carolina (the "Executive").
The Employer is in the process of organizing the Bank, and the
Executive has agreed to serve as Chairman and Chief Executive Officer of the
Company and the Bank. Upon organization of the Bank, the Employer and the
Executive contemplate that this Agreement will be assigned by the Employer to
the Bank and that the Bank will assume the duties of the Company hereunder
(except pursuant to Section 3). Following such assignment, the term "Employer"
as used herein from time to time shall refer to the Bank.
The Employer recognizes that the Executive's contribution to the
growth and success of the Bank during its organization and initial years of
operations will be a significant factor in the success of the Bank. The
Employer desires to provide for the employment of the Executive in a manner
which will reinforce and encourage the dedication of the Executive to the Bank
and promote the best interests of the Bank and its shareholders. The Executive
is willing to serve the Employer (and, after assignment of this Agreement, the
Bank) on the terms and conditions herein provided. Certain terms used in this
Agreement are defined in Section hereof.
In consideration of the foregoing, the mutual covenants contained
herein, and other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties hereto, intending to be legally
bound, hereby agree as follows:
1. Employment. The Employer shall employ the Executive, and the
Executive shall serve the Employer, as Chairman and Chief Executive Officer of
the Bank and the Company upon the terms and conditions set forth herein. The
Executive shall have such authority and responsibilities consistent with his
position as are set forth in the Company's or the Bank's Bylaws or assigned by
the Company's or the Bank's Board of Directors (the "Board") from time to time.
The Executive shall devote his full business time, attention, skill and efforts
to the performance of his duties hereunder, except during periods of illness or
periods of vacation and leaves of absence consistent with Bank policy. The
Executive may devote reasonable periods to service as a director or advisor to
other organizations, to charitable and community activities, and to managing
his personal investments, provided that such activities do not materially
interfere with the performance of his duties hereunder and are not in conflict
or competitive with, or adverse to, the interests of the Company or the Bank.
<PAGE> 3
2. Term. Unless earlier terminated as provided herein, the
Executive's employment under this Agreement shall commence on the date
hereof and be for a term (the "Term") of five years. At the end of each year of
the Term, upon adoption of a resolution by the Board of Directors of the Bank
(with the Executive abstaining) reflecting a determination by the Board that
the Executive has satisfactorily performed his duties hereunder through such
date, the Term shall be extended for an additional year so that the remaining
term shall continue to be five years; provided that the Executive may at any
time, by written notice to the Bank, fix the Term to a finite term of five
years commencing with the later of the date hereof or the date of the latest
such resolution. Notwithstanding the foregoing, the Term of employment
hereunder will end on the date that the Executive attains the retirement age,
if any, specified in the Bylaws of the Bank for directors of the Bank.
3. Compensation and Benefits.
(a) From the date of this Agreement through December 31, 1997,
the Employer shall pay the Executive a salary of $1.00 per annum, plus his
medical insurance premium yearly. Beginning January 1, 1998, the Employer shall
pay the Executive a salary of $75,000, plus his yearly medical insurance
premium. The Board (or an appropriate committee of the Board) shall review the
Executive's salary at least annually and may increase the Executive's base
salary if it determines in its sole discretion that an increase is appropriate.
In addition, as part of the consideration for the Executive's services
hereunder, on January 2, 1998, the Company shall issue to the Executive 5,000
shares of Common Stock for no additional consideration.
(b) The Executive shall be eligible to receive a cash bonus in
an amount determined by the Board on the first anniversary of the Opening Date,
with the Executive abstaining from participating in the consideration of and
vote on the matter, based on such intangible criteria as the Board shall
establish. For each anniversary of the Opening Date thereafter, the Executive
shall be eligible to receive a cash bonus equaling 5% of the net pre-tax income
of the Bank (determined in accordance with generally accepted accounting
principles) if the Bank achieves certain performance levels established by the
Board from time to time.
(c) The Executive shall participate in the Bank's long-term
equity incentive program and be eligible for the grant of stock options,
restricted stock, and other awards thereunder or under any similar plan adopted
by the Company. On the date of the closing of the stock offering for the
initial capitalization of the Bank, or as soon thereafter as an appropriate
stock option plan is adopted by the Board, the Company shall grant to the
Executive two sets of stock options: (i) an option (the "Time-Based Option") to
purchase 10,000 shares of Common Stock, and (ii) an option (the "Performance
Option") to purchase a number of shares of Common Stock equal to 5% of the
number of shares sold in the offering. The award agreement for the Time-Based
Option shall provide that 2,000 shares subject to the Time-Based Option will
vest on each of December 31, 1998, 1999, 2000, 2001, and 2002, but in each case
only if the Executive remains employed by the Company on such date. The award
agreement for the Performance Option shall provide
<PAGE> 4
that one-fifth of the shares subject to the Performance Option will vest on
each of the first five anniversaries of the Opening Date, but only if the
Executive remains employed by the Company on such date and the Bank has met the
performance goals set forth hereof for such year:
For each twelve month period beginning on the Opening Date, and
as a condition to the vesting of the shares subject to the
performance-based option in such year (except in the event of a Change
in Control), the Bank must meet the following performance criteria:
(i) the Bank shall meet or exceed 100% of the pro forma
projections contained in the application of the Bank
filed with the State Board of Financial Institutions
of the State of South Carolina for each year of
operations of the Bank;
(ii) for the fiscal quarter ending with or immediately
prior to the Bank's fiscal year, the Bank's ratio of
non-current loans and leases to total loans and
leases, as determined in the Uniform Bank
Performance Report (the "UBPR"), shall not exceed
the ratio of non-current loans and leases to total
loans and leases for banks in the Bank's peer group,
as defined in the UBPR; and
(iii) the Bank shall maintain a regulatory examination
rating of "satisfactory" or better;
provided, however, that if the Bank does not meet the performance
criteria for any year, the shares subject to the performance-based
option for such year may vest on the following anniversary date, in
the sole discretion of the Board, if the Bank meets or exceeds the
performance criteria for such year in the following year. The Board
shall notify the Executive of any shares subject to the
performance-based option vested hereunder within a reasonable period
of time after the anniversary date to which such options pertain. The
good faith determination of the Board regarding whether the Bank met
its yearly performance levels shall be conclusive.
In addition, the award agreements for both the Time-Based Option and the
Performance Option will provide that (i) the Executive's option shall be
qualified as an incentive stock option under the Internal Revenue Code of 1986,
as amended (the "Code"); (ii) all options shall be exercisable at any time
during the ten years following the date of grant at a price per share equal to
the public offering price in the offering (subject to standard antidilution
adjustments in the event of stock splits, dividends or combinations), which the
parties agree is the fair market value of the Common Stock as of the date of
grant; and (iii) all options shall be nontransferable and nonassignable by the
Executive or by any other person entitled hereunder to exercise any such
rights; provided, however, that upon the death of the Executive any rights
granted hereunder shall be transferable by the Executive's will or by the
applicable laws of descent and distribution. In the event of a Change in
Control, the restrictions on any outstanding incentive awards (including
restricted stock) granted to
3
<PAGE> 5
the Executive under any incentive plan or arrangement shall lapse and such
incentive award shall become 100% vested; all stock options and stock
appreciation rights granted to the Executive shall become immediately
exercisable and shall become 100% vested; and all performance units granted to
the Executive shall become 100% vested. Nothing herein shall be deemed to
preclude the granting to the Executive of warrants or options under a director
option plan in addition to the options granted hereunder.
(d) The Executive shall participate in all retirement, welfare
and other benefit plans or programs of the Employer now or hereafter applicable
generally to employees of the Employer or to a class of employees that includes
senior executives of the Employer; provided that during any period during the
Term that the Executive is subject to a Disability, and during the 180-day
period of physical or mental infirmity leading up to the Executive's
Disability, the amount of the Executive's compensation provided under this
Section 3 shall be reduced by the sum of the amounts, if any, paid to the
Executive for the same period under any disability benefit or pension plan of
the Employer or any of its subsidiaries.
(e) Beginning upon the opening of the Bank for business, the
Company shall provide the Executive with either i) an automobile (at a cost not
to exceed $25,000) owned or leased by the Company of a make and model
appropriate to the Executive's status, or ii) a monthly automobile allowance
not to exceed $600 per month.
(f) In addition, the Employer shall obtain a membership in, and
pay the dues pertaining to, an area Country Club and shall designate the
Executive as the authorized user of such membership for so long as the
Executive remains the Chairman and CEO of the Employer and this Agreement
remains in force.
(g) The Employer shall reimburse the Executive for reasonable
travel and other expenses related to the Executive's duties which are incurred
and accounted for in accordance with the normal practices of the Employer.
4. Termination.
(a) The Executive's employment under this Agreement may
be terminated prior to the end of the Term only as follows:
(i) upon the death of the Executive;
(ii) by the Employer due to the Disability of the
Executive upon delivery of a Notice of Termination to the
Executive;
(iii) by the Employer for Cause upon delivery of a
Notice of Termination to the Executive;
(iv) by the Executive for Good Reason upon delivery
of a Notice of Termination to the Employer within a 90-day
period beginning on the 30th day
4
<PAGE> 6
after the occurrence of a Change in Control or within a 90-day period
beginning on the one year anniversary of the occurrence of a Change
in Control;
(v) by the Employer if its effort to organize
the Bank is abandoned; and
(vi) by the Executive effective upon the 30th day
after delivery of a Notice of Termination.
(b) If the Executive's employment with the Employer is
terminated during the Term (i) by reason of the Executive's death or (ii) by
the Employer for Disability or Cause, the Employer shall pay to the Executive
(or, in the case of his death, the Executive's estate) within fifteen days
after the Termination Date a lump sum cash payment equal to the Accrued
Compensation and, if such termination is other than by the Employer for Cause,
the Pro Rata Bonus.
(c) If the Executive's employment with the Employer is
terminated by the Employer in violation of this Agreement or by the Executive
for Good Reason, in addition to other rights and remedies available in law or
equity, the Executive shall be entitled to the following:
(i) the Employer shall pay the Executive in cash
within fifteen days of the Termination Date an amount equal to
all Accrued Compensation and the Pro Rata Bonus;
(ii) the Employer shall pay to the Executive in cash
at the end of each of the twelve consecutive months following
the Termination Date an amount equal to one-twelfth of the sum
of the Base Amount and the Bonus Amount;
(iii) for the period from the Termination Date
through the date that the Executive attains the age of 65 (the
"Continuation Period"), the Employer shall at its expense
continue on behalf of the Executive and his dependents and
beneficiaries the life insurance, disability, medical, dental,
and hospitalization benefits provided (x) to the Executive at
any time during the 90-day period prior to the Change in
Control or at any time thereafter or (y) to other similarly
situated executives who continue in the employ of the Employer
during the Continuation Period. The coverage and benefits
(including deductibles and costs) provided in this Section
4(c)(iii) during the Continuation Period shall be no less
favorable to the Executive and his dependents and beneficiaries
than the most favorable of such coverages and benefits during
any of the periods referred to in clauses (x) and (y) above.
The Employer's obligation hereunder with respect to the
foregoing benefits shall be limited to the extent that the
Executive obtains any such benefits pursuant to a subsequent
employer's benefit plans, in which case the Employer may reduce
5
<PAGE> 7
the coverage of any benefits it is required to provide the
Executive hereunder as long as the aggregate coverages and
benefits of the combined benefit plans is no less favorable to
the Executive than the coverages and benefits required to be
provided hereunder. This subsection (iii) shall not be
interpreted so as to limit any benefits to which the Executive
or his dependents or beneficiaries may be entitled under any of
the Employer's employee benefit plans, programs, or practices
following the Executive's termination of employment, including,
without limitation, retiree medical and life insurance
benefits; and
(iv) the restrictions on any outstanding incentive
awards (including restricted stock) granted to the Executive
under the Company's or the Bank's long-term equity incentive
program or any other incentive plan or arrangement shall lapse
and become 100% vested, all stock options and stock
appreciation rights granted to the Executive shall become
immediately exercisable and shall become 100% vested, and all
performance units granted to the Executive shall become 100%
vested.
(d) If the Executive's employment with the Employer is
terminated by the Employer pursuant to Section 4(a)(v) hereof, the Executive
shall be entitled to the following:
(i) the Employer shall pay the Executive in cash
within fifteen days of the Termination Date an amount equal to
all Accrued Compensation; and
(ii) the Employer shall pay to the Executive in cash
at the end of each of the six consecutive months following the
Termination Date an amount equal to one-twelfth of the Base
Amount.
(e) If the Executive's employment with the Employer is
terminated by the Executive pursuant to Section 4(a)(vi) hereof, the Employer
shall pay the Executive in cash within fifteen days of the Termination Date an
amount equal to all Accrued Compensation.
(f) The Executive shall not be required to mitigate the amount
of any payment provided for in this Agreement by seeking other employment or
otherwise and no such payment shall be offset or reduced by the amount of any
compensation or benefits provided to the Executive in any subsequent employment
except as provided in Section 4(c)(iii).
(g) In the event that any payment or benefit (within the meaning
of Section 280(b)(2) of the Code) to the Executive or for his benefit paid or
payable or distributed or distributable pursuant to the terms of this Agreement
or otherwise in connection with, or arising out of, his employment with the
Employer or a change in ownership or effective control of the Employer or of a
substantial portion of its assets (a "Payment" or "Payments"), would be subject
to the excise tax imposed by Section 4999 of the Code or any interest or
penalties are incurred by the Executive with respect to such excise tax
6
<PAGE> 8
(such excise tax, together with any such interest and penalties, are
hereinafter collectively referred to as the "Excise Tax"), then the Executive
will be entitled to receive an additional payment (a "Gross-Up Payment") in an
amount such that after payment by the Executive of all taxes (including any
interest or penalties, other than interest and penalties imposed by reason of
the Executive's failure to file timely a tax return or pay taxes shown due on
his return, imposed with respect to such taxes and the Excise Tax), including
any Excise Tax imposed upon the Gross-Up Payment, the Executive retains an
amount of the Gross-Up Payment equal to the Excise Tax imposed upon the
Payments.
(h)The severance pay and benefits provided for in this Section
4 shall be in lieu of any other severance or termination pay to which the
Executive may be entitled under any Employer severance or termination plan,
program, practice or arrangement. The Executive's entitlement to any other
compensation or benefits shall be determined in accordance with the Employer's
employee benefit plans and other applicable programs, policies and practices
then in effect.
5. Trade Secrets. The Executive shall not, at any time, either during
the Term of his employment or after the Termination Date, use or disclose any
Trade Secrets of the Employer, except in fulfillment of his duties as the
Executive during his employment, for so long as the pertinent information or
data remain Trade Secrets, whether or not the Trade Secrets are in written or
tangible form.
6. Non-Competition and Non-Solicitation Covenants. The Executive shall
not, during the Term and for a period of twelve months thereafter, either for
himself or on behalf of any other person, directly or indirectly, without the
prior consent of the Employer, (i) serve as a director, officer at the Vice
President level or higher or organizer or promoter of, or provide executive
management services to, any financial institution located within Aiken County,
(ii) solicit any Major Customer for the purpose of providing banking services
to such Major Customer, or (iii) solicit any employee of the Employer for
employment by any other party. For purposes of this Section, a "Major Customer"
shall mean any customer of the Employer that Employee has contacted, negotiated
with, or performed any services on behalf of, during the Term or the preceding
two years of the Term, whichever is shorter, and that has maintained or
purchased from the Employer at any time during such period deposits, mutual
funds or other investments in excess of $20,000.
7. Successors; Binding Agreement.
(a) This Agreement shall be binding upon and shall inure to the
benefit of the Employer, its Successors and Assigns and the Employer shall
require any Successors and Assigns to expressly assume and agree to perform
this Agreement in the same manner and to the same extent that the Employer
would be required to perform it if no such succession or assignment had taken
place.
(b) Neither this Agreement nor any right or interest hereunder shall
be assignable or transferable by the Executive, his beneficiaries or legal
representatives,
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<PAGE> 9
except by will or by the laws of descent and distribution. This Agreement shall
inure to the benefit of and be enforceable by the Executive's legal personal
representative.
8. Fees and Expenses. The Employer shall pay all legal fees and
related expenses (including the costs of experts, evidence and counsel)
incurred by the Executive as they become due as a result of (a) the Executive's
termination of employment (including all such fees and expenses, if any,
incurred in contesting or disputing any such termination of employment) and (b)
the Executive seeking to obtain or enforce any right or benefit provided by
this Agreement; but only if the circumstances set forth in clauses (a) and (b)
occurred on or after a Change in Control.
9. Notice. For the purposes of this Agreement, notices and all other
communications provided for in the Agreement (including the Notice of
Termination) shall be in writing and shall be deemed to have been duly given
when personally delivered or sent by certified mail, return receipt requested,
postage prepaid, addressed to the respective addresses last given by each party
to the other, provided that all notices to the Employer shall be directed to
the attention of the Board with a copy to the Secretary of the Employer. All
notices and communications shall be deemed to have been received on the date of
delivery thereof, except that notice of change of address shall be effective
only upon receipt.
10. Settlement of Claims. The Employer's obligation to make the
payments provided for in this Agreement and otherwise to perform its
obligations hereunder shall not be affected by any circumstances, including,
without limitation, any set-off, counterclaim, recoupment, defense, or other
right which the Employer may have against the Executive or others. The Employer
may, however, withhold from any benefits payable under this Agreement all
federal, state, city, or other taxes as shall be required pursuant to any law
or governmental regulation or ruling.
11. Modification and Waiver. No provisions of this Agreement may be
modified, waived or discharged unless such waiver, modification or discharge is
agreed to in writing and signed by the Executive and the Employer. No waiver by
any party hereto at any time of any breach by the other party hereto of, or
compliance with, any condition or provision of this Agreement to be performed
by such other party shall be deemed a waiver of similar or dissimilar
provisions or conditions at the same or at any prior or subsequent time.
12. Governing Law. This Agreement shall be governed by and construed
and enforced in accordance with the laws of the State of South Carolina without
giving effect to the conflict of laws principles thereof. Any action brought by
any party to this Agreement shall be brought and maintained in a court of
competent jurisdiction in Aiken County in the State of South Carolina.
13. Severability. The parties agree that the provisions of this
Agreement are severable and the invalidity or unenforceability of any
provision in whole or part shall not affect the validity or enforceability of
any enforceable part of such provision or any other
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<PAGE> 10
provisions hereof. It is further agreed that the courts may "blue pencil" the
provisions of this Agreement to provide for maximum enforcement of such
provisions.
14. Entire Agreement. This Agreement constitutes the entire
agreement between the parties hereto and supersedes all prior
agreements, if any, understandings and arrangements, oral or written, between
the parties hereto with respect to the subject matter hereof.
15. Headings. The headings of Sections herein are included solely for
convenience of reference and shall not control the meaning or interpretation of
any of the provisions of this Agreement.
16. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.
17. Definitions. For purposes of this Agreement, the following terms
shall have the following meanings:
(a) "Accrued Compensation" shall mean an amount which includes
all amounts earned or accrued through the Termination Date, but not paid as of
the Termination Date including (i) base salary and any vacation time earned but
not used, (ii) reimbursement for reasonable and necessary expenses incurred by
the Executive on behalf of the Employer during the period ending on the
Termination Date, and (iii) bonuses and incentive compensation (other than the
Pro Rata Bonus).
(b) "Base Amount" shall mean the greater of the Executive's
annual base salary (i) at the rate in effect on the Termination Date or (ii) at
the highest rate in effect at any time during the ninety-day period prior to
the Change in Control, and shall include all amounts of his base salary that
are deferred under the qualified and non-qualified employee benefit plans of
the Employer or any other agreement or arrangement.
(c) "Bonus Amount" shall mean the greater of (i) the most
recent annual bonus paid or payable to the Executive or, if greater, the annual
bonus paid or payable for the full fiscal year ended prior to the fiscal year
during which a Change in Control occurred, or (ii) the average of the annual
bonuses paid or payable during the three full fiscal years ended prior to the
Termination Date or, if greater, the three full fiscal years ended prior to the
Change in Control (or, in each case, such lesser period for which annual
bonuses were paid or payable to the Executive).
(d) The termination of the Executive's employment shall be for
"Cause" if it is a result of:
(i) any act that (A) constitutes, on the part of the
Executive, fraud, dishonesty, gross malfeasance of duty, or
conduct grossly inappropriate to the Executive's office, and
(B) is demonstrably likely to lead to material injury to
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<PAGE> 11
the Employer or resulted or was intended to result in direct or
indirect gain to or personal enrichment of the Executive; or
(ii) the conviction (from which no appeal may be
or is timely taken) of the Executive of a felony; or
(iii) the suspension or removal of the Executive by
federal or state banking regulatory authorities acting under
lawful authority pursuant to provisions of federal or state law
or regulation which may be in effect from time to time;
provided, however, that in the case of clause (i) above, such conduct shall not
constitute Cause unless (A) there shall have been delivered to the Executive a
written notice setting forth with specificity the reasons that the Board
believes the Executive's conduct constitutes the criteria set forth in clause
(i), (B) the Executive shall have been provided the opportunity to be heard in
person by the Board (with the assistance of the Executive's counsel if the
Executive so desires), and (C) after such hearing, the termination is evidenced
by a resolution adopted in good faith by two-thirds of the members of the Board
(other than the Executive).
(e) A "Change in Control" shall mean the occurrence during the
Term of any of the following events:
(i) An acquisition (other than directly from the
Company) of any voting securities of the Bank (the "Voting
Securities") by any "Person" (as the term person is used for
purposes of Section 13(d) or 14(d) of the Securities Exchange
Act of 1934 (the "1934 Act")) immediately after which such
Person has "Beneficial Ownership" (within the meaning of Rule
13d-3 promulgated under the 1934 Act) of 20% or more of the
combined voting power of the Company's then outstanding Voting
Securities; provided, however, that in determining whether a
Change in Control has occurred, Voting Securities which are
acquired in a "Non-Control Acquisition" (as hereinafter
defined) shall not constitute an acquisition which would cause
a Change in Control. A "Non-Control Acquisition" shall mean an
acquisition by (1) an employee benefit plan (or a trust forming
a part thereof) maintained by (x) the Company or (y) any
corporation or other Person of which a majority of its voting
power or its equity securities or equity interest is owned
directly or indirectly by the Company (a "Subsidiary"), (2) the
Company or any Subsidiary, or (3) any Person in connection with
a "Non-Control Transaction" (as hereinafter defined).
(ii) The individuals who, as of the date of this
Agreement, are members of the Board of either the Company or
the Bank (the "Incumbent Board") cease for any reason to
constitute at least two-thirds of the Board; provided, however,
that if the election, or nomination for election by the
Company's or Bank's shareholders, of any new director was
approved by a
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<PAGE> 12
vote of at least two-thirds of the Incumbent Board, such new
director shall, for purposes of this Agreement, be considered
as a member of the Incumbent Board; provided, further, however,
that no individual shall be considered a member of the
Incumbent Board if such individual initially assumed office as
a result of either an actual or threatened "Election Contest"
(as described in Rule 14a-11 promulgated under the 1934 Act) or
other actual or threatened solicitation of proxies or consents
by or on behalf of a Person other than the Board (a "Proxy
Contest") including by reason of any agreement intended to
avoid or settle any Election Contest or Proxy Contest; or
(iii) Approval by shareholders of the Company or
the Bank of:
(A) A merger, consolidation or
reorganization involving the Bank, unless
(1) the shareholders of the Company
or the Bank, as the case may be,
immediately before such merger,
consolidation or reorganization,
own, directly or indirectly,
immediately following such
merger, consolidation or
reorganization, at least
two-thirds of the combined voting
power of the outstanding voting
securities of the corporation
resulting from such merger or
consolidation or reorganization
(the "Surviving Corporation") in
substantially the same proportion
as their ownership of the Voting
Securities immediately before
such merger, consolidation or
reorganization, and
(2) the individuals who were members
of the Incumbent Board
immediately prior to the
execution of the agreement
providing for such merger,
consolidation or reorganization
constitute at least two-thirds of
the members of the board of
directors of the Surviving
Corporation.
(A transaction described in clauses (1)
and (2) shall herein be referred to as a
"Non-Control Transaction.")
(B) A complete liquidation or dissolution
of the Company or the Bank; or
(C) An agreement for the sale or other
disposition of all or substantially all
of the assets of the Company or the
Bank to any Person (other than a
transfer to a Subsidiary).
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<PAGE> 13
(iv) Notwithstanding anything contained in this Agreement to
the contrary, if the Executive's employment is terminated prior to a
Change in Control and the Executive reasonably demonstrates that such
termination (A) was at the request of a third party who has indicated
an intention or taken steps reasonably calculated to effect a Change
in Control and who effectuates a Change in Control (a "Third Party")
or (B) otherwise occurred in connection with, or in anticipation of, a
Change in Control which actually occurs, then for all purposes of this
Agreement, the date of a Change in Control with respect to the
Executive shall mean the date immediately prior to the date of such
termination of the Executive's employment.
(f) "Disability" shall mean a physical or mental infirmity which
impairs the Executive's ability to substantially perform his duties with the
Employer for a period of 180 consecutive days, as determined by an independent
physician selected with the approval of both the Employer and the Executive.
(g) "Good Reason" shall mean the occurrence after a Change in Control
of any of the events or conditions described in subsections (i) through (viii)
hereof:
(i) a change in the Executive's status, title, position or
responsibilities (including reporting responsibilities) which,
in the Executive's reasonable judgment, represents an adverse change
from his status, title, position or responsibilities as in effect at
any time within ninety days preceding the date of a Change in Control
or at any time thereafter; the assignment to the Executive of any
duties or responsibilities which, in the Executive's reasonable
judgment, are inconsistent with his status, title, position or
responsibilities as in effect at any time within ninety days preceding
the date of a Change in Control or at any time thereafter; any removal
of the Executive from or failure to reappoint or reelect him to any of
such offices or positions, except in connection with the termination
of his employment for Disability or Cause, as a result of his death,
or by the Executive other than for Good Reason, or any other change in
condition or circumstances that in the Executive's reasonable judgment
makes it materially more difficult for the Executive to carry out the
duties and responsibilities of his office than existed at any time
within ninety days preceding the date of Change in Control or at any
time thereafter;
(ii) a reduction in the Executive's base salary or any failure
to pay the Executive any compensation or benefits to which
he is entitled within five days of the date due;
(iii) the Employer's requiring the Executive to be based at any
place outside a 30-mile radius from the executive offices occupied by
the Executive immediately prior to the Change in Control, except for
reasonably required travel on the Employer's business which is not
materially greater than such travel requirements prior to the Change
in Control;
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<PAGE> 14
(iv) the failure by the Employer to (A) continue in effect
(without reduction in benefit level and/or reward opportunities) any
material compensation or employee benefit plan in which the Executive
was participating at any time within ninety days preceding the
date of a Change in Control or at any time thereafter, unless such
plan is replaced with a plan that provides substantially equivalent
compensation or benefits to the Executive, or (B) provide the
Executive with compensation and benefits, in the aggregate, at least
equal (in terms of benefit levels and/or reward opportunities) to
those provided for under each other employee benefit plan, program
and practice in which the Executive was participating at any time
within ninety days preceding the date of a Change in Control or at
any time thereafter;
(v) the insolvency or the filing (by any party, including the
Employer) of a petition for bankruptcy of the Employer, which
petition is not dismissed within sixty days;
(vi) any material breach by the Employer of any material
provision of this Agreement;
(vii) any purported termination of the Executive's employment
for Cause by the Employer which does not comply with the terms of
this Agreement; or
(viii) the failure of the Employer to obtain an agreement,
satisfactory to the Executive, from any Successors and Assigns to
assume and agree to perform this Agreement, as contemplated in
Section 6 hereof.
Any event or condition described in clause (i) through (viii) above which
occurs prior to a Change in Control but which the Executive reasonably
demonstrates (A) was at the request of a Third Party, or (B) otherwise arose in
connection with, or in anticipation of, a Change in Control which actually
occurs, shall constitute Good Reason for purposes of this Agreement,
notwithstanding that it occurred prior to the Change in Control. The
Executive's right to terminate his employment for Good Reason shall not be
affected by his incapacity due to physical or mental illness.
(h) "Notice of Termination" shall mean a written notice of termination
from the Employer or the Executive which specifies an effective date of
termination, indicates the specific termination provision in this Agreement
relied upon, and sets forth in reasonable detail the facts and circumstances
claimed to provide a basis for termination of the Executive's employment under
the provision so indicated.
(i) "Opening Date" shall mean the date the Bank commences operations.
(j) "Pro Rata Bonus" shall mean an amount equal to the Bonus Amount
multiplied by a fraction the numerator of which is the number of days in the
fiscal year through the Termination Date and the denominator of which is 365.
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<PAGE> 15
(k) "Successors and Assigns" shall mean the Bank or a corporation or
other entity acquiring all or substantially all the assets and business of the
Bank (including this Agreement), whether by operation of law or otherwise.
(l) "Termination Date" shall mean, in the case of the Executive's
death, his date of death, and in all other cases, the date specified in the
Notice of Termination.
(m) "Trade Secrets" shall mean any information, including but not
limited to technical or non-technical data, a formula, a pattern, a
compilation, a program, a device, a method, a technique, a drawing, a process,
financial data, financial plans, product plans, information on customers, or a
list of actual or potential customers or suppliers, which: (i) derives economic
value, actual or potential, from not being generally known to, and not being
readily ascertainable by proper means by, other persons who can obtain economic
value from its disclosure or use, and (ii) is the subject of efforts that are
reasonable under the circumstances to maintain its secrecy.
IN WITNESS WHEREOF, the Employer has caused this Agreement to be
executed and its seal to be affixed hereunto by its officers thereunto duly
authorized, and the Executive has signed and sealed this Agreement, effective
as of the date first above written.
ATTEST: PEOPLE'S COMMUNITY CAPITAL
CORPORATION
By: By:
------------------------------- -----------------------------
Name:
Title:
EXECUTIVE
--------------------------------
Tommy B. Wessinger
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<PAGE> 1
EXHIBIT 10.3
<PAGE> 2
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (this "Agreement") dated as of March 3,
1997, is made by and between People's Community Capital Corporation, a South
Carolina corporation (the "Employer" or the "Company") which is the proposed
bank holding company for People's Community Bank of South Carolina (Proposed),
a proposed state bank (the "Bank"), and ALAN J. GEORGE, an individual resident
of South Carolina (the "Executive").
The Employer is in the process of organizing the Bank, and the
Executive has agreed to serve as President of the Company and President and
Chief Operating Officer of the Bank. Upon organization of the Bank, the
Employer and the Executive contemplate that this Agreement will be assigned by
the Employer to the Bank and that the Bank will assume the duties of the
Company hereunder (except pursuant to Section 3). Following such assignment,
the term "Employer" as used herein from time to time shall refer to the Bank.
The Employer recognizes that the Executive's contribution to the
growth and success of the Bank during its organization and initial years of
operations will be a significant factor in the success of the Bank. The
Employer desires to provide for the employment of the Executive in a manner
which will reinforce and encourage the dedication of the Executive to the Bank
and promote the best interests of the Bank and its shareholders. The Executive
is willing to serve the Employer (and, after assignment of this Agreement, the
Bank) on the terms and conditions herein provided. Certain terms used in this
Agreement are defined in Section 17 hereof.
In consideration of the foregoing, the mutual covenants contained
herein, and other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties hereto, intending to be legally
bound, hereby agree as follows:
1. Employment. The Employer shall employ the Executive, and the
Executive shall serve the Employer, as President and Chief Operating Officer of
the Bank and President of the Company upon the terms and conditions set forth
herein. The Executive shall have such authority and responsibilities
consistent with his position as are set forth in the Company's or the Bank's
Bylaws or assigned by the Company's or the Bank's Board of Directors (the
"Board") from time to time. The Executive shall devote his full business time,
attention, skill and efforts to the performance of his duties hereunder, except
during periods of illness or periods of vacation and leaves of absence
consistent with Bank policy. The Executive may devote reasonable periods to
service as a director or advisor to other organizations, to charitable and
community activities, and to managing his personal investments, provided that
such activities do not materially interfere with the performance of his duties
hereunder and are not in conflict or competitive with, or adverse to, the
interests of the Company or the Bank.
<PAGE> 3
2. Term. Unless earlier terminated as provided herein, the
Executive's employment under this Agreement shall commence on the date hereof
and be for a term (the "Term") of five years. At the end of each year of the
Term, upon adoption of a resolution by the Board of Directors of the Bank (with
the Executive abstaining) reflecting a determination by the Board that the
Executive has satisfactorily performed his duties hereunder through such date,
the Term shall be extended for an additional year so that the remaining term
shall continue to be five years; provided that the Executive may at any time,
by written notice to the Bank, fix the Term to a finite term of five years
commencing with the later of the date hereof or the date of the latest such
resolution. Notwithstanding the foregoing, the Term of employment hereunder
will end on the date that the Executive attains the retirement age, if any,
specified in the Bylaws of the Bank for directors of the Bank.
3. Compensation and Benefits.
(a) Prior to the initial date that funds are released from
escrow pursuant to the stock offering for the initial capitalization of the
Bank and the Company and assignment of this Agreement to the Bank, the Employer
shall pay the Executive a salary of $75,000 per annum, plus his medical
insurance premium yearly. Thereafter, the Employer shall pay the Executive a
salary of $90,000, plus his yearly medical insurance premium. The Board (or an
appropriate committee of the Board) shall review the Executive's salary at
least annually and may increase the Executive's base salary if it determines in
its sole discretion that an increase is appropriate.
(b) The Executive shall be eligible to receive a cash bonus in
an amount determined by the Board on the first anniversary of the Opening Date,
with the Executive abstaining from participating in the consideration of and
vote on the matter, based on such intangible criteria as the Board shall
establish. For each anniversary of the Opening Date thereafter, the Executive
shall be eligible to receive a cash bonus equaling 5% of the net pre-tax income
of the Bank (determined in accordance with generally accepted accounting
principles) if the Bank achieves certain performance levels established by the
Board from time to time.
(c) The Executive shall participate in the Bank's long-term
equity incentive program and be eligible for the grant of stock options,
restricted stock, and other awards thereunder or under any similar plan adopted
by the Company. On the date of the closing of the stock offering for the
initial capitalization of the Bank, or as soon thereafter as an appropriate
stock option plan is adopted by the Board, the Company shall grant to the
Executive an option to purchase a number of shares of Common Stock equal to 5%
of the number of shares sold in the offering. The award agreement for the
stock option shall provide that one-fifth of the shares subject to the option
will vest on each of the first five anniversaries of the Opening Date, but only
if the Executive remains employed by the Company on such date and the Bank has
met the performance goals set forth hereof for such year:
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<PAGE> 4
For each twelve month period beginning on the Opening Date, and
as a condition to the vesting of the shares subject to the option in
such year (except in the event of a Change in Control), the Bank must
meet the following performance criteria:
(i) the Bank shall meet or exceed 100% of the pro forma
projections contained in the application of the Bank
filed with the State Board of Financial Institutions
of the State of South Carolina for each year of
operations of the Bank;
(ii) for the fiscal quarter ending with or immediately
prior to the Bank's fiscal year, the Bank's ratio of
non-current loans and leases to total loans and
leases, as determined in the Uniform Bank Performance
Report (the "UBPR"), shall not exceed the ratio of
non-current loans and leases to total loans and
leases for banks in the Bank's peer group, as defined
in the UBPR; and
(iii) the Bank shall maintain a regulatory examination
rating of "satisfactory" or better;
provided, however, that if the Bank does not meet the performance
criteria for any year, the shares subject to the option for such year
may vest on the following anniversary date, in the sole discretion of
the Board, if the Bank meets or exceeds the performance criteria for
such year in the following year. The Board shall notify the Executive
of any shares subject to the option vested hereunder within a
reasonable period of time after the anniversary date to which such
options pertain. The good faith determination of the Board regarding
whether the Bank met its yearly performance levels shall be
conclusive.
In addition, the award agreement will provide that (i) the Executive's option
shall be qualified as an incentive stock option under the Internal Revenue Code
of 1986, as amended (the "Code"); (ii) all options shall be exercisable at any
time during the ten years following the date of grant at a price per share
equal to the public offering price in the offering (subject to standard
antidilution adjustments in the event of stock splits, dividends or
combinations), which the parties agree is the fair market value of the Common
Stock as of the date of grant; and (iii) all options shall be nontransferable
and nonassignable by the Executive or by any other person entitled hereunder to
exercise any such rights; provided, however, that upon the death of the
Executive any rights granted hereunder shall be transferable by the Executive's
will or by the applicable laws of descent and distribution. In the event of a
Change in Control, the restrictions on any outstanding incentive awards
(including restricted stock) granted to the Executive under any incentive plan
or arrangement shall lapse and such incentive award shall become 100% vested;
all stock options and stock appreciation rights granted to the Executive shall
become immediately exercisable and shall become 100% vested; and all
performance units granted to the Executive shall become 100% vested. Nothing
herein shall be deemed to preclude the granting to the Executive of warrants or
options under a director option plan in addition to the options granted
hereunder.
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<PAGE> 5
(d) The Executive shall participate in all retirement, welfare
and other benefit plans or programs of the Employer now or hereafter applicable
generally to employees of the Employer or to a class of employees that includes
senior executives of the Employer; provided that during any period during the
Term that the Executive is subject to a Disability, and during the 180-day
period of physical or mental infirmity leading up to the Executive's
Disability, the amount of the Executive's compensation provided under this
Section 3 shall be reduced by the sum of the amounts, if any, paid to the
Executive for the same period under any disability benefit or pension plan of
the Employer or any of its subsidiaries.
(e) The Employer shall provide the Executive with a term life
insurance policy providing for death benefits totaling $1,000,000 payable to
the Employer and $1,000,000 payable to the Executive's family, and the
Executive shall cooperate with the Employer in the securing and maintenance of
such policy. The Employer shall also pay for an accident liability policy on
the Executive totaling $1,000,000 to protect the Employer from damages or
lawsuits resulting from injuries to third parties caused by the Executive.
(f) Beginning upon the opening of the Bank for business, the
Company shall provide the Executive with either i) an automobile (at a cost not
to exceed $25,000) owned or leased by the Company of a make and model
appropriate to the Executive's status, or ii) a monthly automobile allowance
not to exceed $600 per month.
(g) In addition, the Employer shall obtain a membership in, and
pay the dues pertaining to, an area Country Club and shall designate the
Executive as the authorized user of such membership for so long as the
Executive remains the Chairman and CEO of the Employer and this Agreement
remains in force.
(h) The Employer shall reimburse the Executive for reasonable
travel and other expenses related to the Executive's duties which are incurred
and accounted for in accordance with the normal practices of the Employer.
4. Termination.
(a) The Executive's employment under this Agreement may be
terminated prior to the end of the Term only as follows:
(i) upon the death of the Executive;
(ii) by the Employer due to the Disability of the
Executive upon delivery of a Notice of Termination to the
Executive;
(iii) by the Employer for Cause upon delivery of a
Notice of Termination to the Executive;
(iv) by the Executive for Good Reason upon delivery
of a Notice of Termination to the Employer within a 90-day
period beginning on the 30th day
4
<PAGE> 6
after the occurrence of a Change in Control or within a 90-day period
beginning on the one year anniversary of the occurrence of a Change in
Control;
(v) by the Employer if its effort to organize the Bank
is abandoned; and
(vi) by the Executive effective upon the 30th day after
delivery of a Notice of Termination.
(b) If the Executive's employment with the Employer is terminated
during the Term (i) by reason of the Executive's death or (ii) by the Employer
for Disability or Cause, the Employer shall pay to the Executive (or, in the
case of his death, the Executive's estate) within fifteen days after the
Termination Date a lump sum cash payment equal to the Accrued Compensation and,
if such termination is other than by the Employer for Cause, the Pro Rata Bonus.
(c) If the Executive's employment with the Employer is terminated by
the Employer in violation of this Agreement or by the Executive for Good
Reason, in addition to other rights and remedies available in law or
equity, the Executive shall be entitled to the following:
(i) the Employer shall pay the Executive in cash within
fifteen days of the Termination Date an amount equal to all Accrued
Compensation and the Pro Rata Bonus;
(ii) the Employer shall pay to the Executive in cash
at the end of each of the twelve consecutive months following
the Termination Date an amount equal to one-twelfth of the sum
of the Base Amount and the Bonus Amount;
(iii) for the period from the Termination Date
through the date that the Executive attains the age of 65 (the
"Continuation Period"), the Employer shall at its expense
continue on behalf of the Executive and his dependents and
beneficiaries the life insurance, disability, medical, dental,
and hospitalization benefits provided (x) to the Executive at
any time during the 90-day period prior to the Change in Control
or at any time thereafter or (y) to other similarly situated
executives who continue in the employ of the Employer during the
Continuation Period. The coverage and benefits (including
deductibles and costs) provided in this Section 4(c)(iii) during
the Continuation Period shall be no less favorable to the
Executive and his dependents and beneficiaries than the most
favorable of such coverages and benefits during any of the
periods referred to in clauses (x) and (y) above. The
Employer's obligation hereunder with respect to the foregoing
benefits shall be limited to the extent that the Executive
obtains any such benefits pursuant to a subsequent employer's
benefit plans, in which case the Employer may reduce the
coverage of any benefits it is required to provide the Executive
hereunder as long as the aggregate coverages and benefits of the
combined benefit plans is no less favorable to the Executive
than the coverages
5
<PAGE> 7
and benefits required to be provided hereunder. This subsection (iii)
shall not be interpreted so as to limit any benefits to which the
Executive or his dependents or beneficiaries may be entitled under any
of the Employer's employee benefit plans, programs, or practices
following the Executive's termination of employment, including,
without limitation, retiree medical and life insurance benefits; and
(iv) the restrictions on any outstanding incentive
awards (including restricted stock) granted to the Executive
under the Company's or the Bank's long-term equity incentive
program or any other incentive plan or arrangement shall lapse
and become 100% vested, all stock options and stock appreciation
rights granted to the Executive shall become immediately
exercisable and shall become 100% vested, and all performance
units granted to the Executive shall become 100% vested.
(d) If the Executive's employment with the Employer is terminated by
the Employer pursuant to Section 4(a)(v) hereof, the Executive shall be
entitled to the following:
(i) the Employer shall pay the Executive in cash
within fifteen days of the Termination Date an amount equal to
all Accrued Compensation; and
(ii) the Employer shall pay to the Executive in cash
at the end of each of the six consecutive months following the
Termination Date an amount equal to one-twelfth of the Base
Amount.
(e) If the Executive's employment with the Employer is terminated by
the Executive pursuant to Section 4(a)(vi) hereof, the Employer shall pay the
Executive in cash within fifteen days of the Termination Date an amount equal
to all Accrued Compensation.
(f) The Executive shall not be required to mitigate the amount
of any payment provided for in this Agreement by seeking other employment or
otherwise and no such payment shall be offset or reduced by the amount of any
compensation or benefits provided to the Executive in any subsequent employment
except as provided in Section 4(c)(iii).
(g) In the event that any payment or benefit (within the meaning
of Section 280(b)(2) of the Code) to the Executive or for his benefit paid or
payable or distributed or distributable pursuant to the terms of this Agreement
or otherwise in connection with, or arising out of, his employment with the
Employer or a change in ownership or effective control of the Employer or of a
substantial portion of its assets (a "Payment" or "Payments"), would be subject
to the excise tax imposed by Section 4999 of the Code or any interest or
penalties are incurred by the Executive with respect to such excise tax (such
excise tax, together with any such interest and penalties, are hereinafter
collectively referred to as the "Excise Tax"), then the Executive will be
entitled to receive an additional payment (a "Gross-Up Payment") in an amount
such that after payment by the Executive of all taxes (including any interest
or penalties, other than interest and penalties imposed by reason of the
Executive's failure to file timely a tax return or pay taxes shown due on his
return, imposed
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with respect to such taxes and the Excise Tax), including any Excise Tax
imposed upon the Gross-Up Payment, the Executive retains an amount of the
Gross-Up Payment equal to the Excise Tax imposed upon the Payments.
(h) The severance pay and benefits provided for in this Section
4 shall be in lieu of any other severance or termination pay to which the
Executive may be entitled under any Employer severance or termination plan,
program, practice or arrangement. The Executive's entitlement to any other
compensation or benefits shall be determined in accordance with the Employer's
employee benefit plans and other applicable programs, policies and practices
then in effect.
5. Trade Secrets. The Executive shall not, at any time, either
during the Term of his employment or after the Termination Date, use or
disclose any Trade Secrets of the Employer, except in fulfillment of his duties
as the Executive during his employment, for so long as the pertinent
information or data remain Trade Secrets, whether or not the Trade Secrets are
in written or tangible form.
6. Non-Competition and Non-Solicitation Covenants. The Executive
shall not, during the Term and for a period of twelve months thereafter, either
for himself or on behalf of any other person, directly or indirectly, without
the prior consent of the Employer, (i) serve as a director, officer at the Vice
President level or higher or organizer or promoter of, or provide executive
management services to, any financial institution located within Aiken County,
(ii) solicit any Major Customer for the purpose of providing banking services
to such Major Customer, or (iii) solicit any employee of the Employer for
employment by any other party. For purposes of this Section, a "Major
Customer" shall mean any customer of the Employer that Employee has contacted,
negotiated with, or performed any services on behalf of, during the Term or the
preceding two years of the Term, whichever is shorter, and that has maintained
or purchased from the Employer at any time during such period deposits, mutual
funds or other investments in excess of $20,000.
7. Successors; Binding Agreement.
(a) This Agreement shall be binding upon and shall inure to the
benefit of the Employer, its Successors and Assigns and the Employer shall
require any Successors and Assigns to expressly assume and agree to perform
this Agreement in the same manner and to the same extent that the Employer
would be required to perform it if no such succession or assignment had taken
place.
(b) Neither this Agreement nor any right or interest hereunder
shall be assignable or transferable by the Executive, his beneficiaries or
legal representatives, except by will or by the laws of descent and
distribution. This Agreement shall inure to the benefit of and be enforceable
by the Executive's legal personal representative.
8. Fees and Expenses. The Employer shall pay all legal fees and
related expenses (including the costs of experts, evidence and counsel)
incurred by the Executive as they become due as a result of (a) the Executive's
termination of employment (including all such
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<PAGE> 9
fees and expenses, if any, incurred in contesting or disputing any such
termination of employment) and (b) the Executive seeking to obtain or enforce
any right or benefit provided by this Agreement; but only if the circumstances
set forth in clauses (a) and (b) occurred on or after a Change in Control.
9. Notice. For the purposes of this Agreement, notices and all
other communications provided for in the Agreement (including the Notice of
Termination) shall be in writing and shall be deemed to have been duly given
when personally delivered or sent by certified mail, return receipt requested,
postage prepaid, addressed to the respective addresses last given by each party
to the other, provided that all notices to the Employer shall be directed to
the attention of the Board with a copy to the Secretary of the Employer. All
notices and communications shall be deemed to have been received on the date of
delivery thereof, except that notice of change of address shall be effective
only upon receipt.
10. Settlement of Claims. The Employer's obligation to make the
payments provided for in this Agreement and otherwise to perform its
obligations hereunder shall not be affected by any circumstances, including,
without limitation, any set-off, counterclaim, recoupment, defense, or other
right which the Employer may have against the Executive or others. The
Employer may, however, withhold from any benefits payable under this Agreement
all federal, state, city, or other taxes as shall be required pursuant to any
law or governmental regulation or ruling.
11. Modification and Waiver. No provisions of this Agreement may be
modified, waived or discharged unless such waiver, modification or discharge is
agreed to in writing and signed by the Executive and the Employer. No waiver
by any party hereto at any time of any breach by the other party hereto of, or
compliance with, any condition or provision of this Agreement to be performed
by such other party shall be deemed a waiver of similar or dissimilar
provisions or conditions at the same or at any prior or subsequent time.
12. Governing Law. This Agreement shall be governed by and
construed and enforced in accordance with the laws of the State of South
Carolina without giving effect to the conflict of laws principles thereof. Any
action brought by any party to this Agreement shall be brought and maintained
in a court of competent jurisdiction in Aiken County in the State of South
Carolina.
13. Severability. The parties agree that the provisions of this
Agreement are severable and the invalidity or unenforceability of any provision
in whole or part shall not affect the validity or enforceability of any
enforceable part of such provision or any other provisions hereof. It is
further agreed that the courts may "blue pencil" the provisions of this
Agreement to provide for maximum enforcement of such provisions.
14. Entire Agreement. This Agreement constitutes the entire
agreement between the parties hereto and supersedes all prior agreements, if
any, understandings and arrangements, oral or written, between the parties
hereto with respect to the subject matter hereof.
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<PAGE> 10
15. Headings. The headings of Sections herein are included solely
for convenience of reference and shall not control the meaning or
interpretation of any of the provisions of this Agreement.
16. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.
17. Definitions. For purposes of this Agreement, the following
terms shall have the following meanings:
(a) "Accrued Compensation" shall mean an amount which includes
all amounts earned or accrued through the Termination Date, but not paid as of
the Termination Date including (i) base salary and any vacation time earned but
not used, (ii) reimbursement for reasonable and necessary expenses incurred by
the Executive on behalf of the Employer during the period ending on the
Termination Date, and (iii) bonuses and incentive compensation (other than the
Pro Rata Bonus).
(b) "Base Amount" shall mean the greater of the Executive's
annual base salary (i) at the rate in effect on the Termination Date or (ii) at
the highest rate in effect at any time during the ninety-day period prior to
the Change in Control, and shall include all amounts of his base salary that
are deferred under the qualified and non-qualified employee benefit plans of
the Employer or any other agreement or arrangement.
(c) "Bonus Amount" shall mean the greater of (i) the most recent
annual bonus paid or payable to the Executive or, if greater, the annual bonus
paid or payable for the full fiscal year ended prior to the fiscal year during
which a Change in Control occurred, or (ii) the average of the annual bonuses
paid or payable during the three full fiscal years ended prior to the
Termination Date or, if greater, the three full fiscal years ended prior to the
Change in Control (or, in each case, such lesser period for which annual
bonuses were paid or payable to the Executive).
(d) The termination of the Executive's employment shall be for
"Cause" if it is a result of:
(i) any act that (A) constitutes, on the part of
the Executive, fraud, dishonesty, gross malfeasance of duty, or
conduct grossly inappropriate to the Executive's office, and (B)
is demonstrably likely to lead to material injury to the
Employer or resulted or was intended to result in direct or
indirect gain to or personal enrichment of the Executive; or
(ii) the conviction (from which no appeal may be or
is timely taken) of the Executive of a felony; or
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(iii) the suspension or removal of the Executive by
federal or state banking regulatory authorities acting under
lawful authority pursuant to provisions of federal or state law
or regulation which may be in effect from time to time;
provided, however, that in the case of clause (i) above, such conduct shall not
constitute Cause unless (A) there shall have been delivered to the Executive a
written notice setting forth with specificity the reasons that the Board
believes the Executive's conduct constitutes the criteria set forth in clause
(i), (B) the Executive shall have been provided the opportunity to be heard in
person by the Board (with the assistance of the Executive's counsel if the
Executive so desires), and (C) after such hearing, the termination is evidenced
by a resolution adopted in good faith by two-thirds of the members of the Board
(other than the Executive).
(e) A "Change in Control" shall mean the occurrence during the
Term of any of the following events:
(i) An acquisition (other than directly from the
Company) of any voting securities of the Bank (the "Voting
Securities") by any "Person" (as the term person is used for
purposes of Section 13(d) or 14(d) of the Securities Exchange
Act of 1934 (the "1934 Act")) immediately after which such
Person has "Beneficial Ownership" (within the meaning of Rule
13d-3 promulgated under the 1934 Act) of 20% or more of the
combined voting power of the Company's then outstanding Voting
Securities; provided, however, that in determining whether a
Change in Control has occurred, Voting Securities which are
acquired in a "Non-Control Acquisition" (as hereinafter
defined) shall not constitute an acquisition which would cause a
Change in Control. A "Non-Control Acquisition" shall mean an
acquisition by (1) an employee benefit plan (or a trust forming
a part thereof) maintained by (x) the Company or (y) any
corporation or other Person of which a majority of its voting
power or its equity securities or equity interest is owned
directly or indirectly by the Company (a "Subsidiary"), (2) the
Company or any Subsidiary, or (3) any Person in connection with
a "Non-Control Transaction" (as hereinafter defined).
(ii) The individuals who, as of the date of this
Agreement, are members of the Board of either the Company or the
Bank (the "Incumbent Board") cease for any reason to constitute
at least two-thirds of the Board; provided, however, that if
the election, or nomination for election by the Company's or
Bank's shareholders, of any new director was approved by a vote
of at least two-thirds of the Incumbent Board, such new director
shall, for purposes of this Agreement, be considered as a member
of the Incumbent Board; provided, further, however, that no
individual shall be considered a member of the Incumbent Board
if such individual initially assumed office as a result of
either an actual or threatened "Election Contest" (as described
in Rule 14a-11 promulgated under the 1934 Act) or other actual
or threatened solicitation of proxies or consents by or on
behalf of a Person other than the Board (a "Proxy Contest")
including by reason of any agreement intended to avoid or settle
any Election Contest or Proxy Contest; or
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(iii) Approval by shareholders of the Company or the Bank of:
(A) A merger, consolidation or reorganization involving the
Bank, unless
(1) the shareholders of the Company or the Bank, as
the case may be, immediately before such merger,
consolidation or reorganization, own, directly
or indirectly, immediately following such merger,
consolidation or reorganization, at least two-thirds
of the combined voting power of the outstanding
voting securities of the corporation resulting from
such merger or consolidation or reorganization (the
"Surviving Corporation") in substantially the same
proportion as their ownership of the Voting
Securities immediately before such merger,
consolidation or reorganization, and
(2) the individuals who were members of the Incumbent
Board immediately prior to the execution of the
agreement providing for such merger, consolidation
or reorganization constitute at least two-thirds of
the members of the board of directors of the
Surviving Corporation.
(A transaction described in clauses (1) and (2) shall
herein be referred to as a "Non-Control Transaction.")
(B) A complete liquidation or dissolution of the Company or
the Bank; or
(C) An agreement for the sale or other disposition of all or
substantially all of the assets of the Company or the Bank
to any Person (other than a transfer to a Subsidiary).
(iv) Notwithstanding anything contained in this Agreement to the
contrary, if the Executive's employment is terminated prior to a Change in
Control and the Executive reasonably demonstrates that such termination (A) was
at the request of a third party who has indicated an intention or taken steps
reasonably calculated to effect a Change in Control and who effectuates a
Change in Control (a "Third Party") or (B) otherwise occurred in connection
with, or in anticipation of, a Change in Control which actually occurs, then
for all purposes of this Agreement, the date of a Change in Control with
respect to the Executive shall mean the date immediately prior to the date of
such termination of the Executive's employment.
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(f) "Disability" shall mean a physical or mental infirmity which
impairs the Executive's ability to substantially perform his duties with the
Employer for a period of 180 consecutive days, as determined by an independent
physician selected with the approval of both the Employer and the Executive.
(g) "Good Reason" shall mean the occurrence after a Change in
Control of any of the events or conditions described in subsections (i) through
(viii) hereof:
(i) a change in the Executive's status, title,
position or responsibilities (including reporting
responsibilities) which, in the Executive's reasonable judgment,
represents an adverse change from his status, title, position or
responsibilities as in effect at any time within ninety days
preceding the date of a Change in Control or at any time
thereafter; the assignment to the Executive of any duties or
responsibilities which, in the Executive's reasonable judgment,
are inconsistent with his status, title, position or
responsibilities as in effect at any time within ninety days
preceding the date of a Change in Control or at any time
thereafter; any removal of the Executive from or failure to
reappoint or reelect him to any of such offices or positions,
except in connection with the termination of his employment for
Disability or Cause, as a result of his death, or by the
Executive other than for Good Reason, or any other change in
condition or circumstances that in the Executive's reasonable
judgment makes it materially more difficult for the Executive to
carry out the duties and responsibilities of his office than
existed at any time within ninety days preceding the date of
Change in Control or at any time thereafter;
(ii) a reduction in the Executive's base salary or
any failure to pay the Executive any compensation or benefits to
which he is entitled within five days of the date due;
(iii) the Employer's requiring the Executive to be
based at any place outside a 30-mile radius from the executive
offices occupied by the Executive immediately prior to the
Change in Control, except for reasonably required travel on the
Employer's business which is not materially greater than such
travel requirements prior to the Change in Control;
(iv) the failure by the Employer to (A) continue in
effect (without reduction in benefit level and/or reward
opportunities) any material compensation or employee benefit
plan in which the Executive was participating at any time within
ninety days preceding the date of a Change in Control or at any
time thereafter, unless such plan is replaced with a plan that
provides substantially equivalent compensation or benefits to
the Executive, or (B) provide the Executive with compensation
and benefits, in the aggregate, at least equal (in terms of
benefit levels and/or reward opportunities) to those provided
for under each other employee benefit plan, program and practice
in which the Executive was participating at any time within
ninety days preceding the date of a Change in Control or at any
time thereafter;
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(v) the insolvency or the filing (by any party,
including the Employer) of a petition for bankruptcy of the
Employer, which petition is not dismissed within sixty days;
(vi) any material breach by the Employer of any
material provision of this Agreement;
(vii) any purported termination of the Executive's
employment for Cause by the Employer which does not comply with
the terms of this Agreement; or
(viii) the failure of the Employer to obtain an
agreement, satisfactory to the Executive, from any Successors
and Assigns to assume and agree to perform this Agreement, as
contemplated in Section 6 hereof.
Any event or condition described in clause (i) through (viii) above which
occurs prior to a Change in Control but which the Executive reasonably
demonstrates (A) was at the request of a Third Party, or (B) otherwise arose in
connection with, or in anticipation of, a Change in Control which actually
occurs, shall constitute Good Reason for purposes of this Agreement,
notwithstanding that it occurred prior to the Change in Control. The
Executive's right to terminate his employment for Good Reason shall not be
affected by his incapacity due to physical or mental illness.
(h) "Notice of Termination" shall mean a written notice of
termination from the Employer or the Executive which specifies an effective
date of termination, indicates the specific termination provision in this
Agreement relied upon, and sets forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of the Executive's
employment under the provision so indicated.
(i) "Opening Date" shall mean the date the Bank commences
operations.
(j) "Pro Rata Bonus" shall mean an amount equal to the Bonus
Amount multiplied by a fraction the numerator of which is the number of days in
the fiscal year through the Termination Date and the denominator of which is
365.
(k) "Successors and Assigns" shall mean the Bank or a
corporation or other entity acquiring all or substantially all the assets and
business of the Bank (including this Agreement), whether by operation of law or
otherwise.
(l) "Termination Date" shall mean, in the case of the
Executive's death, his date of death, and in all other cases, the date
specified in the Notice of Termination.
(m) "Trade Secrets" shall mean any information, including but
not limited to technical or non-technical data, a formula, a pattern, a
compilation, a program, a device, a method, a technique, a drawing, a process,
financial data, financial plans, product plans, information on customers, or a
list of actual or potential customers or suppliers, which: (i) derives
economic value, actual or potential, from not being generally known to, and not
being
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readily ascertainable by proper means by, other persons who can obtain economic
value from its disclosure or use, and (ii) is the subject of efforts that are
reasonable under the circumstances to maintain its secrecy.
IN WITNESS WHEREOF, the Employer has caused this Agreement to be
executed and its seal to be affixed hereunto by its officers thereunto duly
authorized, and the Executive has signed and sealed this Agreement, effective
as of the date first above written.
ATTEST: PEOPLE'S COMMUNITY CAPITAL CORPORATION
By: By:
------------------------------- ---------------------------------------
Name:
Title:
EXECUTIVE
------------------------------------------
Alan J. George
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EXHIBIT 10.4
<PAGE> 2
ESCROW AGREEMENT
THIS ESCROW AGREEMENT (this "Agreement") is entered into and effective
as of the 14th day of March, 1997, by and between Peoples Community Capital
Corporation, a South Carolina corporation (the "Company"), and The Bankers Bank
(the "Escrow Agent").
WITNESSETH:
WHEREAS, the Company proposes to offer and sell (the "Offering") up to
$12,000,000 shares of Common Stock, par value $.01 per share (the "Shares"), to
investors at $10.00 per Share pursuant to a registered public offering; and
WHEREAS, the Company desires to establish an escrow for funds
forwarded by subscribers for the Shares, and the Escrow Agent is willing to
serve as Escrow Agent upon the terms and conditions herein set forth.
NOW, THEREFORE, in consideration of the premises and other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:
1. DEPOSIT WITH ESCROW AGENT.
(a) The Escrow Agent agrees that it will from time to time accept,
in its capacity as escrow agent, subscription funds for the Shares (the
"Escrowed Funds") received by it from subscribers or from the Company when it
has received checks from subscribers. All checks shall be made payable to the
Escrow Agent. If any check does not clear normal banking channels in due
course, the Escrow Agent will promptly notify the Company. Any check which
does not clear normal banking channels and is returned by the drawer's bank to
Escrow Agent will be promptly turned over to the Company along with all other
subscription documents relating to such check. Any check received that is made
payable to a party other than the Escrow Agent shall be returned to the Company
for return to the proper party. The Company in its sole and absolute
discretion may reject any subscription for Shares for any reason and upon such
rejection it shall notify and instruct the Escrow Agent in writing to return
the Escrowed Funds by check made payable to the subscriber. If the Company
rejects or cancels any subscription for any reason the Company will retain any
interest earned on the Escrowed Funds to help defray organizational costs.
(b) Subscription agreements for the Shares shall be reviewed for
accuracy by the Company and, immediately thereafter, the Company shall deliver
to the Escrow Agent the following information: (i) the name and address of
the subscriber; (ii) the number of Shares subscribed for by such subscriber;
(iii) the subscription price paid by such subscriber; (iv) the subscriber's tax
identification number certified by such subscriber; and (v) a copy of the
subscription agreement.
<PAGE> 3
2. INVESTMENT OF ESCROWED FUNDS. Upon collection of each check
by the Escrow Agent, the Escrow Agent shall invest the funds in deposit
accounts or short-term certificates of deposit which are fully insured by the
Federal Deposit Insurance Corporation or another agency of the United States
government, short-term securities issued or fully guaranteed by the United
States government, federal funds, or such other investments as the Escrow Agent
and the Company shall agree. The Company shall provide the Escrow Agent with
instructions from time to time concerning in which of the specific investment
instruments described above the Escrowed Funds shall be invested, and the
Escrow Agent shall adhere to such instructions. Unless and until otherwise
instructed by the Company, the Escrow Agent shall by means of a "sweep" or
other automatic investment program invest the Escrowed Funds in blocks of
$10,000 in federal funds. Interest and other earnings shall start accruing on
such funds as soon as such funds would be deemed to be available for access
under applicable banking laws and pursuant to the Escrow Agent's own banking
policies.
3. DISTRIBUTION OF ESCROWED FUNDS. The Escrow Agent shall
distribute the Escrowed Funds in the amounts, at the times, and upon the
conditions hereinafter set forth in this Agreement.
(a) If at any time on or prior to the expiration date of the
offering as described in the prospectus relating to the offering, (the "Closing
Date"), (i) the Escrow Agent has certified to the Company in writing that the
Escrow Agent has received at least $6,000,000 in Escrowed Funds, and (ii) the
Escrow Agent has received a certificate from the President or the Chairman of
the Board of the Company that all other conditions to the release of funds as
described in the Company's Registration Statement filed with the Securities and
Exchange Commission pertaining to the public offering have been met, then the
Escrow Agent shall deliver the Escrowed Funds to the Company to the extent such
Escrowed Funds are collected funds. If any portion of the Escrowed Funds are
not collected funds, then the Escrow Agent shall notify the Company of such
facts and shall distribute such funds to the Company only after such funds
become collected funds. For purposes of this Agreement, "collected funds"
shall mean all funds received by the Escrow Agent which have cleared normal
banking channels. In all events, the Escrow Agent shall deliver not less than
$6,000,000 in collected funds to the Company, except as provided in Paragraphs
3(b) and 3(c) hereof.
(b) In lieu of collected funds, the organizers of the Company may
pay for subscriptions by assigning to the Company any portion of any obligation
of the Company to repay any advances made by such organizers to the Company to
fund organizational or other expenses and delivering such assignment to the
Escrow Agent to be held hereunder.
(c) If the Escrowed Funds do not, on or prior to the Closing Date,
become deliverable to the Company based on failure to meet the conditions
described in Paragraph 3(a), or if the Company terminates the offering at any
time prior to the Closing Date and delivers written notice to the Escrow Agent
of such termination (the "Termination Notice"), the Escrow Agent shall return
the Escrowed Funds which are collected funds as directed in writing by the
Company to the respective subscribers in amounts equal to the subscription
amount theretofore paid by each of them. All uncleared checks representing
Escrowed Funds which are not collected funds as of the Initial Closing Date
shall be collected by the Escrow Agent, and
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<PAGE> 4
together with all related subscription documents thereof shall be delivered to
the Company by the Escrow Agent, unless the Escrow Agent is otherwise
specifically directed in writing by the Company.
4. DISTRIBUTION OF INTEREST. Any interest earned on the Escrowed
Funds shall be retained by the Company.
5. FEES OF ESCROW AGENT. The Company shall pay the Escrow Agent
a fee of $1,500 for its services hereunder. In addition, the escrow account
will accrue a service charge of $15.00 per month. All of these fees are
payable upon the release of the Escrowed Funds, and the Escrow Agent is hereby
authorized to deduct such fees from the Escrowed Funds prior to any release
thereof pursuant to Section 3 hereof.
6. LIABILITY OF ESCROW AGENT.
(a) In performing any of its duties under this Agreement, or upon
the claimed failure to perform its duties hereunder, the Escrow Agent shall not
be liable to anyone for any damages, losses or expenses which it may incur as a
result of the Escrow Agent so acting, or failing to act; provided, however, the
Escrow Agent shall be liable for damages arising out of its willful default or
misconduct or its gross negligence under this Agreement. Accordingly, the
Escrow Agent shall not incur any such liability with respect to (i) any action
taken or omitted to be taken in good faith upon advice of its counsel or
counsel for the Company which is given with respect to any questions relating
to the duties and responsibilities of the Escrow Agent hereunder; or (ii) any
action taken or omitted to be taken in reliance upon any document, including
any written notice or instructions provided for this Escrow Agreement, not only
as to its due execution and to the validity and effectiveness of its provisions
but also as to the truth and accuracy of any information contained therein, if
the Escrow Agent shall in good faith believe such document to be genuine, to
have been signed or presented by a proper person or persons, and to conform
with the provisions of this Agreement.
(b) The Company agrees to indemnify and hold harmless the Escrow
Agent against any and all losses, claims, damages, liabilities and expenses,
including, without limitation, reasonable costs of investigation and counsel
fees and disbursements which may be imposed by the Escrow Agent or incurred by
it in connection with its acceptance of this appointment as Escrow Agent
hereunder or the performance of its duties hereunder, including, without
limitation, any litigation arising from this Escrow Agreement or involving the
subject matter thereof; except, that if the Escrow Agent shall be found guilty
of willful misconduct or gross negligence under this Agreement, then, in that
event, the Escrow Agent shall bear all such losses, claims, damages and
expenses.
(c) If a dispute ensues between any of the parties hereto which, in
the opinion of the Escrow Agent, is sufficient to justify its doing so, the
Escrow Agent shall retain legal counsel of its choice as it reasonably may deem
necessary to advise it concerning its obligations hereunder and to represent it
in any litigation to which it may be a part by reason of this Agreement. The
Escrow Agent shall be entitled to tender into the registry or custody of any
court of competent jurisdiction all money or property in its hands under the
terms of this
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Agreement, and to file such legal proceedings as it deems appropriate, and
shall thereupon be discharged from all further duties under this Agreement.
Any such legal action may be brought in any such court as the Escrow Agent
shall determine to have jurisdiction thereof. In connection with such dispute,
the Company shall indemnify the Escrow Agent against its court costs and
reasonable attorney's fees incurred.
(d) The Escrow Agent may resign at any time upon giving 30 days
written notice to the Company. If a successor escrow agent is not appointed by
Company within 30 days after notice of resignation, the Escrow Agent may
petition any court of competent jurisdiction to name a successor escrow agent
and the Escrow Agent herein shall be fully relieved of all liability under this
Agreement to any and all parties upon the transfer of the Escrowed Funds and
all related documentation thereto, including appropriate information to assist
the successor escrow agent with the reporting of earnings of the Escrowed Funds
to the appropriate state and federal agencies in accordance with the applicable
state and federal income tax laws, to the successor escrow agent designated by
the Company appointed by the court.
7. APPOINTMENT OF SUCCESSOR. The Company may, upon the delivery
of 30 days written notice appointing a successor escrow agent to the Escrow
Agent, terminate the services of the Escrow Agent hereunder. In the event of
such termination, the Escrow Agent shall immediately deliver to the successor
escrow agent selected by the Company, all documentation and Escrowed Funds
including interest earnings thereon in its possession, less any fees and
expenses due to the Escrow Agent or required to be paid by the Escrow Agent to
a third party pursuant to this Agreement.
8. NOTICE. All notices, requests, demands and other
communications or deliveries required or permitted to be given hereunder shall
be in writing and shall be deemed to have been duly given three days after
having been deposited for mailing if sent by registered mail, or certified mail
return receipt requested, or delivery by courier, to the respective addresses
set forth below:
IF TO THE SUBSCRIBERS FOR SHARES: To their respective
addresses as specified in
their Subscription
Agreements.
THE COMPANY:
WITH A COPY TO:
4
<PAGE> 6
THE ESCROW AGENT: The Bankers Bank
3715 Northside Parkway
300 Northcreek, Suite 800
Atlanta, Georgia 30327
Attention: Mr. William R. Burkett
Senior Vice President
9. REPRESENTATIONS OF THE COMPANY. The Company hereby acknowledges
that the status of the Escrow Agent with respect to the offering of the Shares
is that of agent only for the limited purposes herein set forth, and hereby
agrees it will not represent or imply that the Escrow Agent, by serving as the
Escrow Agent hereunder or otherwise, has investigated the desirability or
advisability in an investment in the Shares, or has approved, endorsed or
passed upon the merits of the Shares, nor shall the Company use the name of the
Escrow Agent in any manner whatsoever in connection with the offer or sale of
the Shares, other than by acknowledgment that it has agreed to serve as Escrow
Agent for the limited purposes herein set forth.
10. GENERAL.
(a) This Agreement shall be governed by and construed and enforced in
accordance with the laws of the State of South Carolina.
(b) The section headings contained herein are for reference purposes
only and shall not in any way affect the meaning or interpretation of this
Agreement.
(c) This Agreement sets forth the entire agreement and understanding
of the parties with regard to this escrow transaction and supersedes all prior
agreements, arrangements and understandings relating to the subject matter
hereof.
(d) This Agreement may be amended, modified, superseded or canceled,
and any of the terms or conditions hereof may be waived, only by a written
instrument executed by each party hereto or, in the case of a waiver, by the
party waiving compliance. The failure of any part at any time or times to
require performance of any provision hereof shall in no manner affect the right
at a later time to enforce the same. No waiver in any one or more instances by
any part of any condition, or of the breach of any term contained in this
Agreement, whether by conduct or otherwise, shall be deemed to be, or construed
as, a further or continuing waiver of any such condition or breach, or a waiver
of any other condition or of the breach of any other terms of this Agreement.
(e) This Agreement may be executed simultaneously in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
5
<PAGE> 7
(f) This Agreement shall inure to the benefit of the parties hereto
and their respective administrators, successors and assigns. The Escrow Agent
shall be bound only by the terms of this Escrow Agreement and shall not be
bound by or incur any liability with respect to any other agreement or
understanding between the parties except as herein expressly provided. The
Escrow Agent shall not have any duties hereunder except those specifically set
forth herein.
(g) No interest in any part to this Agreement shall be assignable in
the absence of a written agreement by and between all the parties to this
Agreement, executed with the same formalities as this original Agreement.
IN WITNESS WHEREOF, the parties have duly executed this Agreement as
the date first written above.
COMPANY: ESCROW AGENT:
PEOPLE'S COMMUNITY CAPITAL THE BANKERS BANK
CORPORATION
By: /s/ Tommy B. Wessinger By: /s/ William R. Burkett
------------------------- -----------------------
Name: Tommy B. Wessinger Name: William R. Burkett
Title: Chairman and Chief Operating Officer Title: Senior Vice President
6
<PAGE> 1
EXHIBIT 10.5
<PAGE> 2
STATE OF SOUTH CAROLINA )
) LEASE AGREEMENT
COUNTY OF AIKEN )
1. PARTIES. This Lease Agreement is made by and between People's
Community Capital Corporation, a South Carolina Corporation, herein referred to
as "Lessee"; and Margaret C. Holley-Taylor, formerly known as Margaret C.
Holley, herein referred to as "Lessor".
2. PREMISES. The Lessor hereby leases to the Lessee the premises
at 106-B Park Avenue, S. W., Aiken, in Aiken County, South Carolina, together
with the improvements located thereon, and all easements and appurtenances
belonging to or anywise appertaining, whether public or private, and all rights
of Lessor in and to any public or private thoroughfares or roadways abutting
the above-described property.
3. LEASE TERM. The initial term of this lease shall be six
months commencing on March 1, 1997, and ending on August 31, 1997, unless
sooner terminated as hereafter provided. Lessor hereby grants Lessee an option
to renew this lease for three additional terms of six months and Lessee shall
notify Lessor of its intention to renew, in writing, within thirty (30) days of
the expiration of the initial term or any renewal term of the lease. During
the initial term of this lease, Lessee covenants and agrees to pay Lessor a
fixed rent, payable in equal monthly installments of $2,000.00 each in advance
on the first day of each month at Margaret C. Holley-Taylor, PO Box 1237,
Aiken, South Carolina, 29802, or at such other place as the Lessor shall
designate from time to time in writing as rent for the leased premises, without
any setoff or deduction whatsoever. If a monthly installment is not paid by
the tenth (10th) day of the month, Lessee will pay also a monthly penalty of
five (5%) percent of the installment due.
4. POSSESSION. At the full execution of this lease, Lessee shall
be given possession of the leased premises for the purpose of painting,
remodeling, and setting up for his opening for business with rent commencing as
set forth in paragraph number 3. No rent shall be payable until March 1, 1997.
5. SECURITY DEPOSIT. Lessee shall not be required to pay to
Lessor a security deposit under the covenants and conditions of the lease.
6. UTILITIES. Lessee shall during the term hereof pay all
charges for telephone, gas, electricity, sewage, water and other utilities used
or consumed in or at the leased premises and for the removal of rubbish
therefrom immediately on becoming due and shall hold Lessor harmless from any
liability therefore.
7. USE. Lessee may used the property for any legally permissible
use which proves to be economically feasible, to be determined by Lessee within
his good faith discretion.
8. CONDITIONS. The lease is made subject to the following: a)
conditions, restrictions, and limitations, if any, now appearing of record; b)
zoning ordinances of any
<PAGE> 3
municipality, the County of Aiken, State of South Carolina; c) any question of
survey, the Lessee having satisfied himself as to the boundary lines and the
contents of the premises above described and likewise satisfied himself with
the sufficiency of the present title of the Lessor; d) the proper performance
by the Lessee of all the terms and conditions contained in the lease.
9. TAXES. Lessor agrees to pay all taxes levied against the land
and Lessee shall not be responsible for any delinquency or late payment of the
taxes or any penalty therefor. Lessee agrees to pay all taxes and assessments
levied upon personal property, including trade fixtures and inventory, kept on
the leased premises.
10. WASTE AND NUISANCE. Lessee shall not commit, or suffer to be
committed, any waste on the leased premises, nor shall it maintain, commit, or
permit the maintenance or commission of any nuisance on the leased premises or
use the leased premises for any unlawful purpose.
11. INTERIOR REPAIRS. Lessee, at his sole cost and expense, shall
perform all repairs and maintenance required to keep the interior of the
building in good repair and condition, including but not limited to all
plumbing, heating and cooling units, wiring, piping, fixtures, appurtenances,
and all glass in windows and doors during the term of this lease.
12. EXTERIOR REPAIRS. Lessor, at his sole cost and expense, shall
perform all repairs, maintenance required to keep the exterior of the building
and other improvements now or hereafter made upon the premises in good repair
and condition. At the request of Lessee, Lessor will remove signs and signage
now in place.
13. FIXTURES. Lessee shall have the right if not in default at
any time and from time to time during the term of this lease at his sole cost
and expense, to affix and install such property and equipment to, in, or on the
leased premises as he shall in his sole discretion deem advisable. Any such
fixtures, equipment, and other property installed in or affixed to or on the
leased premises shall remain the property of the Lessee, and Lessor agrees that
Lessee shall have the right, if not in default, at any time, and from time to
time, to remove any and all such fixtures, equipment, and other property,
provided, however, that any such fixtures, equipment, or property not removed
from the premises within ten (10) days after the expiration or sooner
termination of the term of this lease shall be deemed to have been abandoned by
Lessee and shall thereupon become the absolute property of Lessor without
compensation to Lessee. Upon the removal of any fixtures, equipment, or signs,
Lessee shall restore the leased premises to a good and first class condition,
subject to reasonable wear and tear.
14. IMPROVEMENTS. Lessee shall have the right at his own cost and
expense from time to time during the term of this lease to construct on the
leased premises such buildings and other improvements, and make such
alterations, additions, and changes therein as he deems necessary or convenient
for his purposes, provided, however, that Lessee obtain prior written consent
of Lessor. Lessee nevertheless covenants and agrees that any such improvements
shall be made in careful, workman-like manner and in compliance with all
applicable federal, state, and municipal laws and regulations and shall not
affect the architectural integrity of the premises.
2
<PAGE> 4
15. LIABILITY INSURANCE. Throughout the term of this lease,
Lessee shall at Lessee's expense obtain and maintain in force a policy of
public liability insurance for the benefit of and in the names of Lessor and
Lessee as insureds in an amount not less than $500,000 Dollars for any one
injury including death and not less than $500,000 Dollars for any one casualty
and in the amount of $125,000 Dollars for property damage. Said policy shall
be issued by a reputable insurance company authorized to transact business in
the State of South Carolina and proof of insurance coverage will be provided to
Lessor.
16. FIRE AND EXTENDED CASUALTY INSURANCE. (a) Lessor shall at
Lessor's expense obtain and maintain in force a policy of fire and extended
casualty insurance on all improvements on the leased premises, in an amount at
least equal to the fair market value, or replacement cost of said improvements,
whichever amount is greater. Said policy of insurance shall be issued by a
reputable insurance company acceptable to Lessor and Lessee and authorized to
transact business in the State of South Carolina, and said policy shall be for
the benefit of an in the names of Lessor, and any mortgagee of the leased
premises as insureds, and as their interest may appear. The proceeds from any
such policy or policies shall be payable to Lessor, who shall use such proceeds
to make repairs as provided herein. If the building or other improvements on
the leased premises should be damaged or destroyed by fire, flood, or other
casualty, Lessee shall give immediate written notice thereof to Lessor. If the
building or other improvements on the leased premises should be damaged,
destroyed, or rendered partially untenantable for their then use, Lessor shaft
promptly repair the premises and restore them to substantially their prior
condition. During the period from the date of such casualty until the leased
premises are repaired and restored, Lessee's obligation to pay any rental due
hereunder, shall abate. The abatement shall be in the proportion that the
destroyed or untenantable portion of the leased premises bears to the total
leased premises. Notwithstanding the above, if 50 percent or more of the
leased premises is destroyed or rendered untenantable by fire or other
casualty, Lessor or Lessee may terminate this lease effective as of the date of
such casualty, by giving written notice of termination within 45 days after
such casualty occurs.
(b) Lessee shall at Lessee's expense obtain and maintain
in force a policy of fire and extended casualty insurance on the Lessee's
property located on the leased premises to the full insurable value thereof
17. INDEMNIFICATION. Lessee shall indemnify and hold Lessor
harmless from and against any claim, loss, expense or damage to any person or
property in or upon the leased premises or any area allocated to or used
exclusively by Lessee or its agents, employees, or invitees, arising out of
Lessee's use or occupancy of such premises, or any act or neglect of Lessee or
its servants, employees or agents, or any change alteration or improvement made
by Lessee in the leased premises. Lessor shall promptly notify Lessee of any
claim asserted against Lessor on account of any such injury or claimed injury
to persons or property and shall promptly deliver to Lessee the original or a
true copy of any summons or other process, pleading or notice issued in any
suit or other proceeding to assert or enforce any such claim.
18. MUTUAL RELEASE OF LIABILITY FOR ALL HAZARDS COVERED BY
INSURANCE. Lessor and Lessee and all parties claiming under them hereby
mutually release and discharge each other from all claims and liabilities
arising from or caused by any hazard
3
<PAGE> 5
covered by insurance on the leased premises, or covered by insurance in
connection with property on, or activities conducted on the leased premises,
regardless of the cause of the damage or loss.
19. EMINENT DOMAIN. If all of the leased premises are taken under
the power of eminent domain or conveyed under threat of condemnation
proceedings, or if only a part of such premises are so taken or conveyed and
Lessee shall determine that the remainder is inadequate or unsatisfactory for
its purposes, which determination shall not be arbitrarily or capriciously
made, then in either event, this lease shall terminate effective as of the date
Lessee is required to give up the right to occupy or use any part of the leased
premises or common areas. The termination of this lease as above provided
shall not operate to deprive Lessee of the right to make claim against the
condemning authority for any damages suffered by Lessee but Lessee shall have
no right to make any claim against Lessor because of such termination. If this
lease is not terminated as above provided, Lessor and Lessee shall agree upon
an equitable reduction of the rental. If the parties fail to agree upon such
reduction within 60 days from the date of the final award or payment from the
part of the leased premises so taken or conveyed, Lessor and Lessee shall each
choose one arbitrator and the two arbitrators so chosen shall choose a third
arbitrator. The decision of any two of the arbitrators as to the rental
reduction, if any, shall be binding on Lessee and Lessor and any expenses of
arbitration shall be divided equally between Lessee and Lessor.
20. DEFAULT. If Lessee shall allow the rent to be in arrears more
than ten (10) days after written notice of such delinquency, or shall not
commence the curing of any other default and diligently pursue same within
thirty (30) days after written notice from Lessor, Lessor may at its option,
terminate this Lease, and Lessee shall at once surrender possession to Lessor,
or Lessor may forthwith re-enter the leased premises and repossess itself
thereof. Should Lessor be unable to relet after reasonable efforts to do so,
or should such monthly rental be less than the rental Lessee was obligated to
pay under this Lease, plus the expense of reletting, then Lessee shall pay the
amount of such deficiency to Lessor. All rights and remedies of Lessor under
this Lease shall be cumulative, and none shall exclude any other right or
remedy at law. Such rights and remedies may be exercised and enforced
concurrently and whenever and as often as occasion therefore arises.
21. QUIET ENJOYMENT. Lessee shall, upon commencement of the term
of this Lease as hereinabove set forth, place Lessee in quiet possession of the
leased premises and shall secure him in the quiet possession thereof against
all persons lawfully claiming the same during the term of this Lease.
22. ASSIGNMENT. Lessee shall not assign this Lease nor sublet all
or any portion of the premises without the prior written consent of Lessor, but
Lessor shall not arbitrarily or unreasonably withhold consent. No such
assignment or sublease shall relieve the Lessee herein named of any of its
obligations under the terms and provisions of this Lease, and an assignees and
sublessees shall be bound by the terms and provisions of the Lease. Lessor is
expressly given the right to assign any or all of its interest under the terms
of this Lease.
4
<PAGE> 6
23. MORTGAGE OF LEASED PREMISES. Lessor is specifically
authorized to encumber the leased premises as security for any indebtedness
without the necessity of obtaining any consent of Lessee and Lessor shall have
the right to assign his interest hereunder to any mortgagee as collateral
security for the payment of mortgage debt, provided the mortgagee recognizes
the leasehold rights of Lessee.
24. NOTICES. Any notice required or permitted hereunder shall be
in writing and delivered either in person to the other party or the other
party's authorized agent, or by United States Certified Mail, Return Receipt
Requested, postage fully prepaid, to the addresses set forth below, or to such
other address as either party may designate in writing.
Lessor's Permanent Address: Margaret C. Hoffey-Taylor
Post Office Box 1237
Aiken, South Carolina, 29802
Lessee's Permanent Address: People's Community Capital Corporation
106-B Park Avenue, S.W.
Aiken, South Carolina, 29801
25. INSPECTION BY LESSOR: Lessee shall permit Lessor and its
agents to enter into and upon the leased premises at all reasonable times for
the purpose of inspecting the same.
26. LEGAL CONSTRUCTION. In case one or more of the provisions
contained in the lease shall for any reason by held to be invalid, illegal, or
unenforceable in any respect, such invalidity, illegality, or unenforceability
shall not affect any other provision thereof and this lease shall be construed
as if such invalid, illegal or unenforceable provision had never been contained
herein. Whenever the word "Lessor" and/or the word "Lessee", or any modifying
or substituted pronouns therefor are used in this Lease, such words and
respective pronouns shall be held and taken to include both the singular and
the plural, the masculine, feminine and neuter gender thereof, and shall apply
equally to the Lessor and/or Lessee named herein.
27. SOLE AGREEMENT OF ThE PARTIES. This lease constitutes the
sole and only agreement of the parties hereto, and supersedes any prior
understandings or written or oral agreements between the parties respecting the
subject matter within.
28. AMENDMENT. No amendment, modification, or alteration of the
terms hereof shall be binding unless the same be in writing, dated subsequent
to the date hereof, and duly executed by the parties hereto.
29. RIGHTS AND REMEDIES CUMULATIVE. The rights and remedies
provided by this lease are cumulative and the use of any right or remedy by
either party shall not preclude or waive its right to use any or all other
rights the parties may have by law, statute, ordinance, or otherwise.
5
<PAGE> 7
30. WAIVER OF DEFAULT. No waiver by the parties hereto of any
default or breach of any term, condition, or covenant of this lease shall be
deemed to be a waiver of any other breach of the same of any other term,
condition, or covenant contained herein.
31. ATTORNEY'S FEES. In the event Lessor or Lessee breaches any
of the terms of this lease whereby the party not in default employs attorneys
to protect or enforce its rights hereunder and prevails, then the defaulting
party agrees to pay the other party reasonable attorney's fees so incurred by
such other party.
32. EXCUSE. Neither Lessor nor Lessee shall be required to
perform any term, conditions, or covenant in this lease so long as such
performance is delayed or prevented by any acts of God, strikes, lockouts,
material or labor restrictions by any governmental authority, civil riot,
floods, and any other cause not reasonably within the control of the Lessor or
Lessee and which by the exercise of due diligence Lessor or Lessee is unable,
wholly or in part, to prevent or overcome.
33. AUTHORITY. Lessee's undersigned representatives warrant to
Lessor that they have the authority to execute this lease agreement on behalf
of Lessee.
34. COVENANTS. This lease agreement shall inure to the benefit of
and be binding upon the parties hereto and their respective heirs, legal
representatives, successors and assigns.
IN WITNESS WHEREOF, the Lessee has signed and sealed this instrument
February 28, 1997 and the Lessor has signed and sealed this instrument February
28, 1997.
LESSEE
PEOPLE'S COMMUNITY CAPITAL
CORPORATION
/s/ Phyllis Craig
- --------------------------
Witness By: /s/ Alan J. George
------------------------------
Its President
/s/ Janet Smith
- --------------------------
Witness By: /s/ Alan J. George
------------------------------
Its Secretary
6
<PAGE> 8
STATE OF SOUTH CAROLINA )
) Probate
COUNTY OF AIKEN )
Personally appeared before me the undersigned witness and made oath
that s/he saw the within named LESSEE sign, seal, and as his act and deed,
deliver the within Lease and that s/he, with the other witness whose signature
appears above witnessed the execution thereof.
SWORN TO BEFORE ME THIS
28th Day of February, 1997
/s/ Janet Smith
/s/ Phyllis Craig ------------------------------------
- --------------------------------
Notary Public for South Carolina
My Commission expires: 1-19-2006
LESSOR
/s/ Phyllis Craig
- -------------------------------
Witness By: /s/ Margaret C. Holley-Taylor
---------------------------------
Margaret C. Holley-Taylor
/s/ Janet Smith
- -------------------------------
Witness
STATE OF SOUTH CAROLINA )
) Probate
COUNTY OF AIKEN )
Personally appeared before me the undersigned witness and made oath
that s/he saw the within named LESSOR sign, seal, and as his act and deed,
deliver the within Lease and that s/he, with the other witness whose signature
appears above witnessed the execution thereof.
SWORN TO BEFORE ME THIS
28th Day of February, 1997
/s/ Janet Smith
------------------------------------
/s/ Phyllis Craig
- -------------------------------
Notary Public for South Carolina
My Commission expires: 1-19-2006
7
<PAGE> 1
EXHIBIT 23.1
<PAGE> 2
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
We consent to the reference to our firm under the caption "Experts" and to the
use of our report dated April 4, 1997, on the financial statements of People's
Community Capital Corporation as of March 31, 1997, and for the period from
December 3, 1996 (date of inception), to March 31, 1997, in the Registration
Statement (Form SB-2) and related prospectus of People's Community Capital
Corporation for the registration of 1,200,000 shares of its common stock under
the Securities Act of 1933.
Elliott, Davis & Company, LLP
Greenwood, South Carolina
April 11, 1997
<TABLE> <S> <C>
<ARTICLE> 9
<S> <C>
<PERIOD-TYPE> 4-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> DEC-03-1996
<PERIOD-END> MAR-31-1997
<CASH> 0
<INT-BEARING-DEPOSITS> 0
<FED-FUNDS-SOLD> 0
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 0
<INVESTMENTS-CARRYING> 0
<INVESTMENTS-MARKET> 0
<LOANS> 0
<ALLOWANCE> 0
<TOTAL-ASSETS> 240,577
<DEPOSITS> 0
<SHORT-TERM> 0
<LIABILITIES-OTHER> 244,964
<LONG-TERM> 0
0
0
<COMMON> 0
<OTHER-SE> (4,387)
<TOTAL-LIABILITIES-AND-EQUITY> 240,577
<INTEREST-LOAN> 0
<INTEREST-INVEST> 0
<INTEREST-OTHER> 220
<INTEREST-TOTAL> 220
<INTEREST-DEPOSIT> 0
<INTEREST-EXPENSE> 0
<INTEREST-INCOME-NET> 220
<LOAN-LOSSES> 0
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> (4,487)
<INCOME-PRETAX> 0
<INCOME-PRE-EXTRAORDINARY> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (4,487)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
<YIELD-ACTUAL> 0
<LOANS-NON> 0
<LOANS-PAST> 0
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 0
<CHARGE-OFFS> 0
<RECOVERIES> 0
<ALLOWANCE-CLOSE> 0
<ALLOWANCE-DOMESTIC> 0
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</TABLE>
