<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON DECEMBER 3, 1998.
REGISTRATION NO. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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Form SB-2
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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COMMUNITY CAPITAL BANCSHARES, INC.
(Name of Small Business Issuer in its Charter)
<TABLE>
<S> <C> <C>
GEORGIA 6711 58-2413468
(State or other jurisdiction (Primary Standard Industrial (I.R.S. Employer
of incorporation or Classification Code Number) Identification No.)
organization)
</TABLE>
P.O. DRAWER 71269, ALBANY, GEORGIA 31750 (912) 446-2265
(Address, and telephone number of principal executive offices)
2815 MEREDYTH DRIVE, ALBANY, GEORGIA 31707 (912) 446-2265
(Address of principal place of business or intended principal place of business)
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<TABLE>
<S> <C> <C>
COPIES TO:
ROBERT E. LEE KATHERINE M. KOOPS, ESQ. WALTER E. JOSPIN, ESQ.
COMMUNITY CAPITAL BANCSHARES, INC. POWELL, GOLDSTEIN, FRAZER & MURPHY LLP TROUTMAN SANDERS LLP
430 TIFT AVENUE 191 PEACHTREE STREET, N.E., 16TH FLOOR 600 PEACHTREE STREET, N.E., SUITE 5200
ALBANY, GEORGIA 31701 ATLANTA, GEORGIA 30303 ATLANTA, GEORGIA 30308
(912) 446-2265 (404) 572-6600 (404) 885-3107
(Name, address, and telephone number, of
agent for service)
</TABLE>
Approximate date of proposed sale to the public: as soon as practicable
after this Registration Statement has become effective.
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If the delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box. [ ]
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CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
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PROPOSED MAXIMUM PROPOSED MAXIMUM
TITLE OF EACH CLASS AMOUNT TO BE OFFERING PRICE AGGREGATE AMOUNT OF
OF SECURITIES TO BE REGISTERED REGISTERED PER UNIT(1) OFFERING PRICE(1) REGISTRATION FEE
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<S> <C> <C> <C> <C>
Common Stock $1.00 par value...... 1,150,000 Shares(2) $10.00 $11,500,000 $3,197
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</TABLE>
(1) Estimated solely for the purpose of calculating the registration fee in
accordance with Rule 457 under the Securities Act of 1933, as amended.
(2) Includes an aggregate of 150,000 shares to cover over-allotments, if any,
pursuant to the over-allotment option granted to the underwriter.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
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<PAGE> 2
THE INFORMATION CONTAINED IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED.
WE MAY NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER
TO SELL THESE SECURITIES AND IT IS NOT SOLICITING AN OFFER TO BUY THESE
SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.
PRELIMINARY PROSPECTUS DATED , 1999; SUBJECT TO COMPLETION
1,000,000 SHARES
COMMUNITY CAPITAL BANCSHARES, INC.
A Proposed Bank Holding Company for
ALBANY BANK & TRUST N.A. (IN ORGANIZATION)
COMMON STOCK
------------------------------
This is an initial public offering by Community Capital Bancshares, Inc. of
its Common Stock. The Company has been organized to be, upon receipt of
regulatory approvals, the sole shareholder of Albany Bank & Trust N.A. (In
Organization). This is a firm commitment underwriting. Prior to this offering,
there has been no public market for the shares. We expect that quotations for
the Common Stock will be reported on the Nasdaq OTC Bulletin Board under the
symbol "ALBY."
INVESTING IN THE COMMON STOCK INVOLVES RISKS WHICH ARE DESCRIBED IN THE
"RISK FACTORS" SECTION BEGINNING ON PAGE 7 OF THIS PROSPECTUS.
The shares of Common Stock offered are not deposits, savings accounts, or
other obligations of a bank or savings association and are not insured by the
Federal Deposit Insurance Corporation or any other governmental agency.
------------------------------
<TABLE>
<CAPTION>
PER SHARE TOTAL
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<S> <C> <C>
Public Offering Price..................................... $10.00 $10,000,000
Underwriting Discount..................................... $ $
Proceeds to the Company, before expenses.................. $ $
</TABLE>
The Underwriter has the right to purchase up to an additional 150,000
shares at the Public Offering Price, less the underwriting discount, within 30
days from the date of this Prospectus to cover over-allotments.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or passed upon the
accuracy or adequacy of this Prospectus. Any representation to the contrary is a
criminal offense.
The Underwriter has the right to reject orders in whole or in part and
withdraw, cancel or modify the offer without notice. We expect that the shares
of Common Stock will be ready for delivery on or about _______ , 1999.
------------------------------
INTERSTATE/JOHNSON LANE
CORPORATION
The date of this Prospectus is , 1999.
<PAGE> 3
[INSERT A MAP DEPICTING THE PROPOSED BANK'S PRELIMINARY MARKET AREA AND SITE OF
ITS MAIN OFFICE]
2
<PAGE> 4
SUMMARY
This summary highlights information contained elsewhere in this Prospectus.
This summary is not complete and does not contain all the information you should
consider before investing in the Common Stock. You should read carefully the
entire Prospectus.
IN GENERAL
Community Capital Bancshares, Inc. is a Georgia corporation that was
incorporated on August 19, 1998 to serve as the holding company for Albany Bank
& Trust N.A. (In Organization) (the "Bank"), a proposed national bank. The Bank
will operate as a community bank emphasizing prompt, personalized customer
service to the individuals and businesses located in the City of Albany in
Dougherty County and adjacent Lee County in Georgia (the "Albany market"). After
receiving all necessary regulatory approvals, we anticipate commencing
operations out of a temporary facility in the spring of 1999 and expect
construction of our permanent facility to be completed in the fall of 1999.
THE ALBANY MARKET
According to National Decision Systems, the population within the 30-mile
radius surrounding Albany was approximately 170,000 in 1990 and is expected to
grow to 186,000 by 2002. This represents a 9.4% increase in population from 1990
to 2002.
The Albany market serves as a commercial and retail center for communities
in Southwest Georgia. As reported by Demographics USA County Edition "1996 Data
For a New Era," Albany surpassed $1 billion in retail sales in 1994, making it
one of the nation's top 135 retail markets measured by household retail
expenditures. Albany enjoys a diverse employment sector, which includes the
following industries: manufacturing, construction, transportation and public
utilities, retail and wholesale trade, finance and insurance, medical services,
agriculture, and government. Albany also serves as the major medical center for
Southwest Georgia.
At least 11 financial institutions currently operate within the Dougherty
and Lee County Metropolitan Statistical Area ("MSA"), none of which is a
community bank headquartered in the Albany market. According to the SNL Branch
Migration DataSource, total deposits for all financial institutions in the MSA
equaled $1.1 billion as of June 30, 1997. We anticipate that the deposit base in
the MSA will grow as Albany's population and economic activity continue to
increase.
MARKET OPPORTUNITY
Over the past few years, the banking industry in Southwest Georgia,
including Albany, has been consolidating. Since 1995, the following financial
institutions have entered the Albany market through the acquisition of community
banks located in Albany: BankAmerica Corp., the largest financial institution in
the United States, headquartered in Charlotte, North Carolina; Regions Financial
Corp., a $35 billion institution headquartered in Birmingham, Alabama; and ABC
Bancorp, approximately a $700 million institution headquartered in Moultrie,
Georgia. As a result of these acquisitions, no community banks remain
headquartered in Dougherty or Lee County. We believe an attractive opportunity
exists in the Albany market for a locally headquartered community bank that
focuses on personalized service to individuals and businesses located within the
community.
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<PAGE> 5
Acquisitions of community banks by larger regional banks often result in
the dissolution of local boards of directors and in significant turnover in
management and customer service personnel who possess extensive banking
experience and strong ties to the local community. We believe that we have a
unique opportunity to attract and retain experienced and talented individuals
who are familiar with the banking needs of the local community. Such
acquisitions also necessitate the consolidation of data processing systems which
often create disruptions in customer service. As the only community bank
headquartered in Albany, we will offer convenient service, local decision-making
and competitive loans. Additionally, by focusing our operations on the community
we serve, we believe that we will be able to respond to changes in the Albany
market more quickly than large, centralized institutions.
PRODUCTS AND SERVICES
We plan to offer our products and services through high quality,
personalized delivery systems while providing our customers with the financial
sophistication and array of products typically offered by a larger bank. The
Bank's lending services will include consumer loans to individuals, commercial
loans to small to medium-sized businesses and professional concerns and real
estate-related loans. The Bank will offer a broad array of competitively priced
deposit services including demand deposits, regular savings accounts, money
market deposits, certificates of deposit and individual retirement accounts. To
complement its lending and deposit services, the Bank will also provide cash
management services, safe-deposit boxes, travelers checks, direct deposit,
automatic drafts, and courier services to commercial customers. The Bank intends
to offer its services through a variety of delivery systems including branch
offices, automated teller machines, telephone banking and internet banking.
DIRECTORS AND OFFICERS
The management team includes individuals who have significant experience in
the banking industry in Georgia. Robert E. Lee is the President of the Company
and will serve as the President and the Chief Executive Officer of the Bank. He
has held numerous senior banking positions in Southwest Georgia during his
25-year banking career, including Executive Vice President and Chief Financial
Officer of First State Corporation (which was recently acquired by Regions
Financial Corporation) prior to our organization. Charles M. Jones, III, the
Chairman of the Board of Directors and Chief Executive Officer of the Company,
and David C. Guillebeau, the Chief Lending Officer of the Bank, collectively
have over 30 years of experience in the banking and lending industries and are
both natives of Southwest Georgia. The Bank also intends to hire a Chief
Financial Officer, a Vice President of Commercial Real Estate and a Vice
President of Consumer Lending, all of whom are expected to possess significant
experience in their respective positions and within the Albany market area.
The Boards of Directors of the Company and the Bank consist of 15
organizers. See "Management" (page 37). All of the directors are residents of
the Dougherty/Lee County area and are active participants in the community. The
directors will utilize their diverse backgrounds and their extensive local
business relationships to attract customers from all segments of the community.
The directors and executive officers intend to purchase approximately 280,000
shares of Common Stock (or 28.0% of the shares) in this
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<PAGE> 6
offering. The directors' financial interest in the Company should encourage
active participation in growing the Company's franchise.
BUSINESS STRATEGY
Our strategy as an independent bank holding company will be carried out
through the operations and growth of the Bank. Our strategies are to:
Operating Strategy:
- Hire and retain highly experienced and qualified banking personnel to
provide quality service to our customers and to facilitate efficient
operation of the Bank.
- Capitalize on the directors' and officers' diverse community involvement,
their knowledge of the banking needs within the community and their wide
array of business experience to attract customers.
- Establish a community identity through convenient branch facilities and
localized names, such as Albany Bank & Trust.
- Provide individualized attention with local decision-making authority in
an effort to emphasize prompt, responsive service to our target
customers, which include individuals and small to medium-sized
businesses.
- Implement an aggressive marketing program through local newspapers,
drive-time radio, direct mail campaigns, and television spots and use of
an experienced public relations firm.
Growth Strategy:
- Leverage our position as the only community bank headquartered in Albany
to attract customers who may be underserved in the current banking
environment and to gain market share.
- Expand our presence in the Albany market by opening additional branch
offices in downtown/east Albany, the southern portion of Lee County and
other strategic locations as appropriate.
- Seek to hire employees with established customer relationships, which
will accelerate growth in our loan portfolio and deposit base.
- Construct a building that will support the hiring of additional lending
officers and the addition of other departments, such as a mortgage
banking department.
- Utilize technology and strategic outsourcing to provide a broad array of
banking products and services in order to generate increased fee income.
- Evaluate strategic acquisition opportunities on an ongoing basis.
EXECUTIVE OFFICES
Our offices will be located at 2815 Meredyth Drive, Albany, Georgia 31707.
Until we commence operations, our offices will be located at 430 Tift Avenue,
Albany, Georgia 31701. Our telephone number is (912) 446-2265.
5
<PAGE> 7
THE OFFERING
Common Stock Offered (1)........ 1,000,000 shares of Common Stock of the
Company
Common Stock to be Outstanding
after the Offering............ 1,000,000 shares (2)
Use of Proceeds................. To capitalize the Bank, to pay
organizational, offering and pre-opening
expenses, to construct the Bank's main
office and to provide working capital for
the Company to be used for business
purposes, including making loans and other
investments. See "Use of Proceeds" (page
15).
Proposed Trading Symbol......... "ALBY"
- -------------------------
(1) Does not include the exercise of the Underwriter's over-allotment
option to purchase up to 150,000 additional shares of the Common Stock.
(2) Does not include up to 225,000 shares of Common Stock issuable upon the
exercise of the warrants issued to the organizers or 90,000 shares of
Common Stock issuable pursuant to options that have been or may be
granted under the Company's stock incentive plan. See "Executive
Compensation -- Organizers' Warrants" (page 45) and "-- Stock Incentive
Plan" (page 45).
6
<PAGE> 8
RISK FACTORS
An investment in the Common Stock involves a significant degree of risk.
You should not invest in the Common Stock unless you can afford to lose your
entire investment. You should consider carefully the following risk factors and
other information in this Prospectus before deciding to invest in the Common
Stock.
The order of the following paragraphs does not indicate the relative
importance of any described risk, and the following paragraphs do not describe
all of the risks of an investment in the Common Stock. You should also carefully
read the cautionary statement following the Risk Factors regarding the use of
forward-looking statements.
RISKS ASSOCIATED WITH STARTING A NEW BUSINESS
The Bank's proposed operations are subject to the risks inherent in
establishing a new business and, specifically, to those of opening a new bank.
Certain of these inherent risks, including the lack of an operating history, the
anticipation of losses and the potential inability to implement business
strategies, are discussed in more detail below.
No Operating History. Neither the Company nor the Bank has any operating
history. The Company was only recently formed, and the Bank will not receive
final approval from the Office of the Comptroller of the Currency to begin
operations until after this offering is completed. Consequently, you will not
have access to information that would be available to purchasers of securities
of a financial institution with a history of operations. Additionally, since the
Bank is in organization, it has no operating history on which to base any
estimate of its future earning prospects.
Anticipated Losses. Typically, most new banks incur substantial start-up
expenses, are not profitable in the first year of operation and, in some cases,
are not profitable for several years. See "Management's Discussion and Analysis
of Financial Condition and Plan of Operations" (page 19) for a discussion of our
net losses as of September 30, 1998 and our anticipated net losses through March
1, 1999. Initially, many of the Bank's loans will be unseasoned -- new loans to
new borrowers. Accordingly, it will take several years to determine the
borrowers' payment histories, and as a result, management will not be able to
evaluate reliably the quality of the Bank's loan portfolio until that time. Our
profitability will depend on the Bank's profitability, and we can give no
assurance that the Bank will ever operate profitably. Additionally, if the Bank
is ultimately unsuccessful, you may not recover all or any part of your
investment in the Common Stock.
Potential Inability to Implement Business Strategies. The organizers have
developed a business plan that details the strategy that we intend to implement
in our efforts to achieve profitable operations. The strategy includes hiring
and retaining experienced and qualified employees and opening two branch offices
within the first 36 months of operation. If we cannot hire or retain qualified
employees, are unable to open new branches, or otherwise cannot implement our
business strategy, we will be hampered in our ability to develop business and
serve our customers, which could have an adverse affect on our financial
performance. Even if these strategies are successfully implemented, they may not
have the favorable impact on operations that we anticipate. See "Proposed
Business of the Company and the Bank -- Business Strategy" (page 27).
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<PAGE> 9
POTENTIAL DELAY IN COMMENCING OPERATIONS
Although we expect to receive all regulatory approvals and to commence
business in the first quarter of 1999, we can give no assurance as to when, if
at all, these events will occur. Any delay in commencing the Bank's operations
will increase pre-opening expenses and postpone the Bank's realization of
potential revenues. Such a delay will cause our accumulated deficit to increase
as a result of continuing operating expenses, such as salaries and other
administrative expenses, coupled with our lack of revenue.
RISK OF DISSOLUTION IF REGULATORY CONDITIONS ARE NOT SATISFIED
Although the Company and the Bank have applied for all regulatory approvals
required to commence operations and the Bank has received preliminary approval
from the Office of the Comptroller of the Currency, final approvals may not be
granted in a timely manner if at all. The closing of this offering is not
conditioned upon the Company and the Bank receiving final approval to commence
business. If final approval for the Bank to commence banking operations is not
granted within 18 months after the receipt of preliminary approval or other
regulatory requirements are not satisfied, then we will solicit shareholder
approval for the Company's dissolution and liquidation under Georgia law. If the
Company is dissolved and liquidated, we will distribute to shareholders the
Company's net assets remaining after payment or provision for payment of all
claims against the Company. Shareholders will receive only a portion, if any, of
their original investment because the proceeds of the offering will have been
used to pay all expenses and capital costs incurred by the Company. The expenses
include the expenses of the offering, the organizational and pre-opening
expenses of the Company and the Bank and the claims of creditors.
DEPENDENCE ON DIRECTORS AND KEY PERSONNEL
Robert E. Lee is the President of the Company and will be the President and
Chief Executive Officer of the Bank. He has been instrumental in the
organization of the Company and the Bank and will be the key management official
in charge of the daily business operations of the Company and the Bank. David C.
Guillebeau will be the key officer of the Bank in charge of lending operations.
Mr. Lee and Mr. Guillebeau are important to our success and if either leaves
their employ, our financial condition and results of operations may be adversely
affected. We have entered into employment agreements with Messrs. Lee and
Guillebeau, but cannot be assured of their continued service. Additionally, our
directors' community involvement, diverse backgrounds and extensive local
business relationships are important to our success. If the composition of our
Board of Directors changes materially, our growth could be adversely affected.
See "Management" (page 37).
INDUSTRY COMPETITION MAY HAVE ADVERSE EFFECT ON SUCCESS OF THE COMPANY
The banking business is highly competitive. The Bank will compete as a
financial intermediary with numerous other lenders and deposit-takers, including
other commercial banks, savings and loan associations, credit unions, finance
companies, mutual funds, insurance companies and brokerage and investment
banking firms. The Dougherty/Lee County area is currently served by at least
eight commercial banks with a total of 24 offices, two thrifts and one credit
union. Although no independent community banks are currently headquartered in
Albany, we could face increased competition if another
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<PAGE> 10
community bank were to open in our market area. The Bank will compete primarily
with other financial institutions in the Albany market, but may also compete
with internet banks and financial institutions located throughout the United
States for products such as large certificates of deposit. All of the Bank's
competitors actively solicit business from residents of Dougherty County and Lee
County, Georgia. Some of these institutions are not subject to the same degree
of regulation as the Bank will be and have greater resources than will be
available to the Bank or the Company. Our profitability will depend on our
ability to compete successfully. See "Proposed Business of the Company and the
Bank -- The Bank -- Competition" (page 25).
INTEREST RATE RISKS
The Bank's operations depend substantially on its net interest income,
which is the difference between the interest income earned on its
interest-earning assets and the interest expense paid on its interest-bearing
liabilities, such as deposits and borrowings. The difference between these two
interest rates is often referred to as the "interest rate spread." In the early
1990s, many financial institutions experienced historically high interest rate
spreads. More recently, interest rate spreads have generally narrowed due to
changing market conditions and competitive pricing pressure. These conditions
may continue to exert pressure on pricing and high interest rate spreads may not
return. Like most depository institutions, the Bank's earnings and net interest
spread are affected by changes in market interest rates and other economic
factors beyond its control. As a result, an increase or decrease in rates could
have a material adverse effect on the Bank's net income, capital and liquidity.
While we intend to take measures to decrease interest rate risk, these measures
may not be effective in minimizing the exposure to interest rate risk. Also, the
Bank's results of operations will be affected by credit policies of monetary
authorities, particularly the Federal Reserve Board of Governors. See
"Management's Discussion and Analysis of Financial Condition and Plan of
Operations -- Liquidity and Interest Rate Sensitivity" (page 19) and
"Supervision and Regulation" (page 58).
POTENTIAL ADVERSE EFFECT OF UNPREDICTABLE ECONOMIC CONDITIONS
The majority of the Bank's borrowers and depositors will be individuals and
businesses located and doing business in the Dougherty/Lee County area. The
Bank's success will therefore depend on the general economic conditions in
Dougherty County and Lee County, Georgia, which management cannot predict with
certainty. Factors that adversely affect the Dougherty/Lee County economy could
adversely affect the Bank's performance. For example, an adverse change in the
local economy would make it more difficult for borrowers to repay their loans,
which could lead to loan losses for the Bank. See "Proposed Business of the
Company and the Bank" (page 22).
POTENTIAL LIMITATION ON GROWTH RESULTING FROM LOW LENDING LIMITS
At least during its first years of operations, the Bank's legally mandated
lending limits will be lower than those of many of its competitors because
initially it will have less capital than many of its competitors. The Bank's
lower lending limits may discourage potential borrowers who have lending needs
that exceed the Bank's limits, which may restrict the Bank's ability to grow.
The Bank may try to serve the needs of these borrowers by selling
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loan participations to other institutions, but this strategy may not succeed.
See "Proposed Business of the Company and the Bank -- The Bank" (page 22).
NO DIVIDENDS
We will initially have no source of income other than dividends that we
receive from the Bank. Our ability to pay dividends to you will therefore depend
on the Bank's ability to pay dividends to the Company. Bank holding companies
and national banks are both subject to significant regulatory restrictions on
the payment of cash dividends. In light of these restrictions and the need for
the Company and the Bank to retain and build capital, it will be the policy of
the Boards of Directors of the Company and the Bank to reinvest earnings for the
period of time necessary to help support the success of their operations. As a
result, we do not plan to pay dividends until we become cumulatively profitable,
and our future dividend policy will depend on the Company's and the Bank's
earnings, capital requirements, financial condition and other factors that the
Boards of Directors of the Company and the Bank consider relevant. See
"Dividends" (page 18) and "Supervision and Regulation -- Payment of Dividends"
(page 59).
INITIAL PUBLIC OFFERING PRICE ARBITRARILY DETERMINED
Because we were only recently formed and the Bank is in the process of
being organized, the initial public offering price could not be set with
reference to historical measures of the Company's financial performance.
Therefore, the offering price was determined by negotiations between the Company
and the Underwriter based on several factors. These factors included prevailing
market conditions, the price to earnings and price to book value multiples of
publicly traded comparable companies, and the Bank's growth potential, cash flow
and earnings prospects. Accordingly, the offering price may not indicate the
market price for the Common Stock after the offering. See "Underwriting" (page
56).
POSSIBILITY THAT AN ACTIVE TRADING MARKET MAY NOT DEVELOP
Prior to the offering, there has been no public trading market for the
Common Stock. Although we have applied to list the Common Stock on the Nasdaq
OTC Bulletin Board, an active trading market may not develop or continue after
the offering. Additionally, the market price of the Common Stock could decline
below the initial public offering price. The Underwriter has advised us that,
upon completion of the offering, it intends to use reasonable efforts to
initiate quotations of the Common Stock on the Nasdaq OTC Bulletin Board and to
act as a market maker in the Common Stock, subject to applicable laws and
regulatory requirements, although it is not obligated to do so.
Making a market in securities involves maintaining bid and ask quotations
and being able, as principal, to effect transactions in reasonable quantities at
those quoted prices, subject to various securities laws and other regulatory
requirements. The development of a public trading market depends, however, upon
the existence of willing buyers and sellers, the presence of which is not within
our control or the control of any market maker. Market makers on the Nasdaq OTC
Bulletin Board are not required to maintain a continuous two-sided market, are
required to honor firm quotations for only a limited number of shares and are
free to withdraw firm quotations at any time. Even with a market maker, factors
such as the limited size of the offering, the lack of earnings history for the
Company and the absence of a reasonable expectation of dividends within the near
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<PAGE> 12
future mean that an active and liquid market for the Common Stock may not
develop in the foreseeable future. Even if a market develops, it may not
continue and you may not be able to sell your shares at or above the price at
which these shares are being offered to the public. You should consider
carefully the limited liquidity of your investment before purchasing any shares
of our Common Stock.
POTENTIAL VOLATILITY OF MARKET PRICE
If a market develops for the Common Stock after the offering, the price for
the Common Stock will be determined in the market and may be influenced by many
factors. These factors include the depth and liquidity of the market for the
Common Stock, investor perception of the Company, conditions in the banking
industry and general economic and market conditions. Our quarterly operating
results, changes in analysts' earnings estimates, changes in general conditions
in the economy or financial markets or other developments affecting the Company
could cause the market price of the Common Stock to fluctuate substantially. In
addition, from time to time the stock market experiences extreme price and
volume fluctuations. This volatility has significantly affected the market
prices of securities, often for reasons unrelated to the operating performance
of the companies. Consequently, these and other factors may cause significant
volatility in the market price of our Common Stock from time to time after the
offering.
POTENTIAL ADVERSE EFFECT OF GOVERNMENT REGULATION
Bank holding companies and banks are subject to extensive state and federal
government supervision and regulation. Existing state and federal banking laws
subject the Bank to substantial limitations with respect to loans, purchase of
securities, payment of dividends and many other aspects of its banking business.
These and other restrictions limit the manner in which we may conduct our
business and obtain financing, including the Bank's ability to attract deposits,
make loans and achieve satisfactory interest spreads. Many of these regulations
are intended to protect depositors, the public, and the Federal Deposit
Insurance Corporation, not shareholders. In addition, the burden imposed by
federal and state regulations may place us at a competitive disadvantage
compared to competitors who are less regulated. Applicable laws, regulations,
interpretations and enforcement policies have been subject to significant, and
sometimes retroactively applied, changes in recent years, and may be subject to
significant future changes. Future legislation or government policy may
adversely affect the banking industry or the operations of the Bank. See
"Supervision and Regulation" (page 58).
POTENTIAL DILUTION RESULTING FROM EXERCISE OF WARRANTS AND STOCK OPTIONS
The organizers will be issued warrants to purchase an aggregate of up to
225,000 shares of Common Stock, representing an amount equal to 22.5% of the
shares of Common Stock to be outstanding upon completion of this offering (an
amount equal to 19.6% of the outstanding shares if the Underwriter exercises its
over-allotment option). Additionally, officers and employees will have options
to purchase an aggregate of up to 90,000 shares of Common Stock, representing an
amount equal to 9.0% of the shares of Common Stock to be outstanding upon
completion of this offering (an amount equal to 7.8% of the outstanding shares
if the Underwriter exercises its over-allotment option). The warrants and
options will vest in annual increments of 20% over five years and will be
exercisable at a price of $10.00 per share.
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<PAGE> 13
As a result, the Company's organizers, officers and employees will have the
opportunity to profit from any rise in the market value of the Common Stock or
any increase in our net worth. The organizers, officers and employees can be
expected to exercise the warrants or options, if at all, when the exercise would
result in the dilution of the interests of investors who purchase shares in this
offering. In addition, the exercise of the warrants or options could adversely
affect the terms on which the Company can obtain additional capital. For
instance, the holders of the warrants or options could exercise the warrants or
options when the Company could obtain capital by offering additional securities
on terms more favorable to the Company than those provided for by the warrants
or options. See "Executive Compensation -- Organizers' Warrants" (page 45) and
"-- Stock Incentive Plan" (page 45).
POTENTIAL INABILITY TO RAISE ADDITIONAL CAPITAL
We believe that the net proceeds of this offering will satisfy the
Company's and the Bank's cash requirements for the three-year period following
the opening of the Bank. However, the Board of Directors may determine from time
to time a need to obtain additional capital through the issuance of additional
shares of Common Stock or other securities. We can give no assurance that we
will be able to access the capital markets in the future in order to obtain this
additional capital or that any newly issued shares will be sold at prices or on
terms better than or equal to those you receive in this offering. In addition,
such issuance would dilute your ownership interests in the Company.
DETERRENT EFFECT OF ANTITAKEOVER PROVISIONS
Our Articles of Incorporation and Bylaws contain provisions that may deter
an attempt to change or gain control of the Company. These provisions include
the existence of preferred stock, staggered terms for the directors,
restrictions on the ability to change the number of directors or to remove a
director, supermajority voting requirements, and flexibility in evaluating
acquisition proposals. As a result, you may be deprived of opportunities to sell
some or all of your shares at prices that represent a premium over market
prices. See "Description of Capital Stock of the Company -- Certain Provisions
of the Articles of Incorporation and Bylaws" (page 50).
ABILITY OF DIRECTORS AND OFFICERS TO INFLUENCE CORPORATE ACTIONS
After the offering, we anticipate that our directors and executive officers
will beneficially own 280,000 shares, representing 28.0%, of the outstanding
Common Stock of the Company. As a result, our directors and executive officers
will be able to exercise significant control over the Company's management and
affairs. See "Management -- Proposed Executive Officers and Directors of the
Company and the Bank" (page 50) and "Description of Capital Stock of the
Company -- Certain Provisions of the Articles of Incorporation and Bylaws" (page
50).
RISKS ASSOCIATED WITH THE YEAR 2000
Banks are heavily dependent on complex computer systems for all phases of
their operations. The year 2000 issue common to most corporations concerns the
inability of certain software and databases to recognize the year 2000 and other
year 2000-sensitive dates. If not corrected, this problem could result in a
disruption to the operations of financial institutions, which are particularly
sensitive to such disruptions. Such disruptions
12
<PAGE> 14
could include events ranging from electrical or water failure to computer
systems failure, with any of these events potentially resulting in a cessation
of the Bank's activities until the problem is resolved.
The Company and the Bank will rely on software and hardware developed by
independent third parties to provide the information systems used by the Company
and the Bank. As a result, the Bank will depend on the efforts of those vendors
to ensure that their data processing systems accommodate year 2000 information.
Although management intends to require vendor certification regarding year 2000
readiness before the Company or the Bank purchases any equipment, management
cannot verify independently that the equipment will in fact be year 2000
compliant. Additionally, the Bank could be adversely affected by year 2000
problems experienced by others (including its customers, service providers,
vendors, customers' vendors, correspondent banks, government agencies, and the
financial services industry in general) over which it has no control. If, for
example, one of the Bank's major borrowers is unable to conduct its operations
as a result of a year 2000 problem, that borrower could be unable to maintain
its cash flow and could therefore default on its loan, which would lead to loan
losses for the Bank. Consequently, if the Company, the Bank or any of their
service providers, correspondents, vendors or customers experiences a disruption
of business resulting from a year 2000 problem, the financial condition, results
of operations and liquidity of the Company and the Bank could be materially
adversely affected. See "Proposed Business of the Company and the Bank --
Information Systems and the Year 2000" (page 32) for a description of the
Company's plan to address the year 2000 issue.
SHARES ELIGIBLE FOR FUTURE SALE
Upon completion of this offering, 1,000,000 shares of Common Stock will be
outstanding, assuming the over-allotment option is not exercised. All of these
shares will be freely tradable without restriction except for 280,000 shares
that we anticipate the organizers will purchase in the offering. The Company and
the organizers have agreed, for a period of 180 days from the date of this
Prospectus, not to sell or otherwise transfer, directly or indirectly, any
shares of Common Stock without the prior consent of the Underwriter. As a
result, 720,000 shares of Common Stock will be freely tradable without
restriction upon completion of the offering and 280,000 shares of Common Stock
held by the organizers will be eligible for sale pursuant to Rule 144
promulgated under the Securities Act of 1933, as amended, commencing 180 days
from the date of this Prospectus. The market price of the Common Stock could be
adversely affected by the sale of a large block of shares held by the
organizers. See "Management -- Proposed Executive Officers and Directors of the
Company and the Bank" (page 37).
MANAGEMENT'S DISCRETION AS TO USE OF UNALLOCATED NET PROCEEDS
The Company and the Bank intend to use the net proceeds of the offering to
capitalize the Bank, purchase the land and building for the Bank's main office,
repay the Company's line of credit, purchase equipment and other assets for the
Bank's operations, fund loans, provide working capital for general corporate
purposes, and pay offering, pre-opening and initial operating expenses. We will
be required to contribute a minimum of $7.5 million to the Bank as initial
capital. Consequently, our Board of Directors and management will have broad
discretion in allocating a total of approximately $1.7 million, or 17.1%, of the
net proceeds of the offering. See "Use of Proceeds" (page 15).
13
<PAGE> 15
CAUTIONARY STATEMENT ABOUT FORWARD-LOOKING STATEMENTS
Certain statements made in this Prospectus under the captions "Summary,"
"Risk Factors," "Management's Discussion and Analysis of Financial Condition and
Plan of Operations" and "Proposed Business of the Company and the Bank" and
elsewhere in this Prospectus are "forward-looking statements" within the meaning
of the Private Securities Litigation Reform Act of 1995 (the "Reform Act").
These statements are subject to the safe harbor provisions of the Reform Act.
Forward-looking statements include, without limitation, statements about the
competitiveness of the banking industry, potential regulatory obligations, the
Company's strategies and other statements that are not historical facts. When
used in this Prospectus, the words "anticipate," "believe," "estimate" and
similar expressions are generally intended to identify forward-looking
statements. Because forward-looking statements involve risks and uncertainties,
there are important factors that could cause actual results to differ materially
from those expressed or implied by the forward-looking statements. These factors
include, but are not limited to, risks associated with starting a new business,
a potential delay in commencing operations, the risk of dissolution if
regulatory conditions are not satisfied, our dependence on our directors and key
personnel, the potential adverse effect of competition, interest rate risks, the
potential adverse effect of unpredictable economic conditions, potential
limitations on growth resulting from low lending limits, risks associated with
the year 2000 and other factors discussed under "Risk Factors."
14
<PAGE> 16
USE OF PROCEEDS
The net proceeds of the offering to the Company are estimated to be $9.2
million ($10.6 million if the Underwriter's over-allotment option is exercised
in full) after deducting the underwriting discount and estimated offering
expenses. The table illustrates the intended use by the Company of the net
proceeds of this offering.
<TABLE>
<CAPTION>
<S> <C>
Repay Advances by Organizers............................ $ 80,000
Repay Amounts Drawn on Line of Credit................... 485,000(1)
Working Capital......................................... 8,647,000(2)
----------
Total.............................................. $9,212,000
==========
</TABLE>
- -------------------------
(1) Does not include offering expenses of approximately $150,000
(consisting primarily of legal, accounting and printing expenses and
registration fees).
(2) Of this amount, $7.5 million will be contributed to the Bank as capital
when the Bank receives final regulatory approval. Working capital of
the Company will increase by $565,000 after the Bank has been
organized, has purchased the land for its main office from the Company
for $315,000 and has reimbursed the Company $250,000 in advances for
organizational and pre-opening expenses.
Of the $485,000 drawn under the Company's line of credit and the $80,000
advanced by the organizers, $315,000 was used to purchase land for the Bank's
main office and $250,000 has been and will be used to pay organizational and
pre-opening expenses of the Bank categorized as follows:
<TABLE>
<CAPTION>
<S> <C>
Salaries and benefits (estimated through the Bank's target
opening date in March 1999)............................... $150,000
Legal and professional fees................................. 60,000
Other pre-opening expenses.................................. 40,000
--------
$250,000
========
</TABLE>
For additional information concerning the compensation of the President and
Chief Executive Officer of the Company and the Bank, see "Executive
Compensation." Working capital that the Company does not use to capitalize the
Bank as described in Note (2) above will be used initially for liquidity and
thereafter for expansion and for general purposes, such as payment of operating
expenses, the provision of additional capital for the Bank or the purchase of
certificates of deposit of the Bank, if necessary or deemed desirable by the
Company.
15
<PAGE> 17
After the Bank receives the necessary regulatory approvals, the Company
will capitalize the Bank with a minimum of $7.5 million. The Bank intends to use
these proceeds for the following purposes:
<TABLE>
<S> <C>
Reimbursement of Advances from the Company................. $ 250,000
Purchase of Land for the Bank's Main Office from the
Company.................................................. 315,000
Construction of the Main Office Building................... 1,300,000
Furniture, Fixtures and Equipment for the Bank's Main
Office................................................... 250,000
Funds to be Used for Loans to Customers, Investments and
Other General Purposes................................... 5,385,000
----------
Total................................................. $7,500,000
==========
</TABLE>
Until we apply the net proceeds of this offering to the specific purposes
described above, we plan to invest the net proceeds in short-term,
investment-grade securities, certificates of deposit or guaranteed obligations
of the United States government.
16
<PAGE> 18
CAPITALIZATION
The following table shows capitalization of the Company as of September 30,
1998 and the pro forma consolidated capitalization of the Company. as adjusted
to give effect to the receipt of the net proceeds from the sale of 1,000,000
shares of Common Stock in the offering. This table assumes that the Underwriter
will not exercise the over-allotment option.
<TABLE>
<CAPTION>
SHAREHOLDERS' EQUITY ACTUAL AS ADJUSTED
- -------------------- -------- -----------
<S> <C> <C>
Preferred Stock, par value not stated; 2,000,000 shares
authorized, no shares issued and outstanding......... $ -- $ --
Common Stock, par value $1.00 per share; 10,000,000
shares authorized; 1 share issued ($1.00) and
outstanding(1); 1,000,000 shares issued ($10.00 each)
and outstanding as adjusted(2)....................... 1 1,000,000
Additional paid-in capital(3).......................... 1,912 8,212,000(3)
Accumulated deficit(4)(5).............................. (70,749)(4) (250,000)(5)
-------- ----------
Total shareholders' equity............................. $(68,836) $8,962,000
======== ==========
Book value per share(6)................................ N/A $ 8.96
==========
</TABLE>
- -------------------------
(1) Robert E. Lee, the President of the Company and the Bank and Chief
Executive Officer of the Bank, was issued one share of Common Stock
upon the organization of the Company. This share will be redeemed for
$1.00 (the price Mr. Lee paid) upon the issuance of shares in this
offering.
(2) Does not include shares of Common Stock issuable upon the exercise of
the warrants or pursuant to options that have been or may be granted
under the Company's stock incentive plan. See "Executive
Compensation -- Organizers' Warrants" and "-- Stock Incentive Plan."
(3) The expenses of the offering will be charged against this account.
Offering expenses are estimated to be $788,000, which includes $638,000
in underwriting discounts and other offering expenses of $150,000,
including legal, accounting and printing expenses and registration
fees.
(4) This deficit reflects pre-opening expenses incurred through September
30, 1998, consisting primarily of salaries and employee benefits.
(5) The "As Adjusted" accumulated deficit results from estimated
pre-opening expenses of $250,000 incurred through the Bank's target
opening date in March 1999. See "Use of Proceeds." Actual pre-opening
expenses may be higher and may therefore increase the deficit
accumulated during the pre-opening stage and further reduce
shareholders' equity.
(6) The book value per share does not include shares issuable upon the
exercise of warrants or options that have been or may be granted under
the Company's stock incentive plan. See "Executive
Compensation -- Organizers' Warrants" and "-- Stock Incentive Plan."
After giving effect to the net proceeds from this offering, there is an
immediate dilution in the book value per share of $1.04, resulting from
recognition of pre-opening expenses and charging the offering expenses
against additional paid-in capital.
17
<PAGE> 19
DIVIDENDS
The Company will initially have no source of income other than dividends
that the Bank pays to it. The Company's ability to pay dividends to its
shareholders will therefore depend on the Bank's ability to pay dividends to the
Company. Bank holding companies and national banks are both subject to
significant regulatory restrictions on the payment of cash dividends. In light
of these restrictions and the need for the Company and the Bank to retain and
build capital, it will be the policy of the Boards of Directors of the Company
and the Bank to reinvest earnings for the period of time necessary to help
support the success of their operations. As a result, the Company does not plan
to pay dividends until it becomes cumulatively profitable, and its future
dividend policy will depend on the Company's and the Bank's earnings, capital
requirements, financial condition and other factors that the Boards of Directors
of the Company and the Bank consider relevant.
Additionally, the appropriate regulatory authority is authorized to
determine, under certain circumstances relating to the financial condition of
the Bank or the Company, that the payment of dividends would be an unsafe or
unsound practice and to prohibit dividend payment. See "Supervision and
Regulation -- Dividends."
18
<PAGE> 20
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND PLAN OF
OPERATIONS
The following discussion of the financial condition of the Company should
be read in conjunction with the Company's financial statements and related
notes, which are included in this Prospectus. See "Index to Financial
Statements."
The Company was organized on August 19, 1998 to serve as a holding company
for a proposed national bank. Since inception, the main activities of the
Company have been centered on seeking, interviewing and selecting the Company's
directors and officers, applying for a national bank charter, applying for
Federal Deposit Insurance Corporation ("FDIC") deposit insurance, applying to
become a bank holding company and raising equity capital through this offering.
The operations of the Company from August 19, 1998 ("Inception") through
the close of the offering have been and will continue to be funded through a
line of credit from The Bankers Bank and advances received from the organizers.
The total amount available on the line of credit is $750,000, of which
approximately $410,000 was outstanding at November 30, 1998. This loan has been
guaranteed by the organizers, bears interest at the prime rate as published in
the Money Rates section of The Wall Street Journal, and is due on October 6,
1999. As of November 30, 1998 advances from the organizers totaled $80,000.
Management anticipates that the Company will repay the line of credit and any
advances from the organizers after the closing of this offering.
From Inception to September 30, 1998, the net loss amounted to $70,749. The
estimated net loss for the period from Inception through March 1, 1999, the
anticipated opening date of the Bank, is $250,000, which is attributable to the
following estimated noninterest expenses:
<TABLE>
<S> <C>
Salaries and benefits....................................... $150,000
Legal and professional fees................................. 60,000
Other pre-opening expenses.................................. 40,000
--------
Total.................................................. $250,000
========
</TABLE>
On November 20, 1998, the Company purchased approximately two acres of land
at 2815 Meredyth Drive at a purchase price of $315,000 to be used as the site
for the main office of the Bank. The Company funded the purchase of this land
primarily through its line of credit with The Bankers Bank, which is described
above. Management anticipates that the Bank will begin construction of its main
office in January, 1999. The Bank will fund the construction of the main
building, estimated at $1.3 million, with the net proceeds received from the
issuance of its common stock to the Company. Additionally, as of November 30,
1998, the Company has obtained financing from a finance company for the purchase
of an automobile with a total cost of $28,934.
LIQUIDITY AND INTEREST RATE SENSITIVITY
Since the Company has been in the organizational stage, there are no
results to present at this time. Nevertheless, once the Bank commences
operations, net interest income, the Company's primary source of earnings, will
fluctuate with significant interest rate movements. To lessen the impact of
these margin swings, management intends to
19
<PAGE> 21
structure the balance sheet so that repricing opportunities exist for both
assets and liabilities in roughly equivalent amounts at approximately the same
time intervals. Imbalance in these repricing opportunities at any point in time
constitute interest rate sensitivity.
Interest rate sensitivity refers to the responsiveness of interest-bearing
assets and liabilities to change in market interest rates. The rate sensitive
position, or gap, is the difference in the volume of rate sensitive assets and
liabilities at a given time interval. The general objective of gap management is
to manage actively rate sensitive assets and liabilities so as to reduce the
impact of interest rate fluctuations on the net interest margin. Management will
generally attempt to maintain a balance between rate sensitive assets and
liabilities as the exposure period is lengthened to minimize the Bank's overall
interest rate risks.
The asset mix of the balance sheet will be evaluated regularly in terms of
several variables: yield, credit quality, appropriate funding sources and
liquidity. To manage effectively the liability mix of the balance sheet,
management plans to focus on expanding the various funding sources.
As the Bank continues to grow, management will continuously structure its
rate sensitivity position in an effort to hedge against rapidly rising or
falling interest rates. The Bank's Asset and Liability Management Committee will
meet on a quarterly basis to develop management's strategy for the upcoming
period. Such strategy includes anticipations of future interest rate movements.
Liquidity represents the ability to provide steady sources of funds for
loan commitments and investment activities, as well as to maintain sufficient
funds to cover deposit withdrawals and payment of debt and operating
obligations. These funds can be obtained by converting assets to cash or by
attracting new deposits. The Bank's primary source of liquidity will come from
its ability to maintain and increase deposits.
Management knows of no trends, demands, commitments, events or
uncertainties that should result in or are reasonably likely to result in the
Company's liquidity increasing or decreasing in any material way in the
foreseeable future, other than this offering.
CAPITAL ADEQUACY
There are now two primary measures of capital adequacy for banks and bank
holding companies: (1) risk-based capital guidelines and (2) the leverage ratio.
The risk-based capital guidelines measure the amount of a bank's required
capital in relation to the degree of risk perceived in its assets and its
off-balance sheet items. Under the risk-based capital guidelines, capital is
divided into two "tiers." Tier 1 capital consists of common shareholders'
equity, noncumulative and cumulative (bank holding companies only) perpetual
preferred stock and minority interest. Goodwill is subtracted from the total.
Tier 2 capital consists of the allowance for loan losses, hybrid capital
instruments, term subordinated debt and intermediate term preferred stock. Banks
are required to maintain a minimum risk-based capital ratio of 8.0%, with at
least 4.0% consisting of Tier 1 capital.
The second measure of capital adequacy relates to the leverage ratio. The
Office of the Comptroller of the Currency ("OCC") has established a 3.0% minimum
leverage ratio requirement. The leverage ratio is computed by dividing Tier 1
capital into total assets. For banks that have not received the highest
regulatory rating by their primary regulator
20
<PAGE> 22
(which includes the Bank) the minimum leverage ratio should be 3.0% plus an
additional cushion of at least 1% to 2%, depending upon risk profiles and other
factors.
A new rule was recently promulgated by the Federal Reserve Board of
Governors (the "Federal Reserve"), the OCC and the FDIC that adds a measure of
interest rate risk to the determination of supervisory capital adequacy. In
connection with this new rule, the agencies have also proposed a measurement
process to measure interest rate risk. Under this proposal, all items reported
on the balance sheet, as well as off-balance sheet items, would be reported
according to maturity, repricing dates and cash flow characteristics. A bank's
reporting position would be multiplied by duration-based risk factors and
weighted according to rate sensitivity. The net risk weighted position would be
used in assessing capital adequacy. The objective of this complex proposal is to
determine the sensitivity of a bank to various rising and declining interest
rate scenarios.
Management believes that the net proceeds of this offering should satisfy
the Company's and the Bank's cash requirements for at least the three-year
period following the opening of the Bank. Accordingly, management does not
anticipate that it will be necessary to raise additional funds for the operation
of the Company or the Bank over the next three years. For additional information
regarding material expenditures during such period, see "Use of Proceeds." For
additional information regarding the plan of operations for the Company and the
Bank, see "Proposed Business of the Company and the Bank" and "Management."
21
<PAGE> 23
PROPOSED BUSINESS OF THE COMPANY AND THE BANK
BACKGROUND
The Company. The Company was incorporated as a Georgia corporation on
August 19, 1998 to serve as a bank holding company for the Bank. The Company
plans to use $7.5 million of the proceeds of this offering to capitalize the
Bank. In return, the Bank will issue all of its common stock to the Company, and
the Company will be the Bank's sole shareholder. Initially, the Bank will be the
Company's sole operating subsidiary. The Company has applied to the Federal
Reserve and the Georgia Department of Banking and Finance for prior approval to
capitalize the Bank. If such approvals are granted, upon its purchase of the
Bank's common stock the Company will become a bank holding company within the
meaning of the Bank Holding Company Act of 1956, as amended, and the Georgia
Bank Holding Company Act. See "Supervision and Regulation -- Bank Holding
Company Regulation."
The Company has been organized to facilitate the Bank's ability to serve
its future customers' requirements for financial services. The holding company
structure will provide flexibility for expansion of the Company's banking
business through the possible acquisition of other financial institutions and
the provision of additional capital and banking-related services that are
permissible for bank holding companies and for national banks. A holding company
structure will facilitate the Company's ability to raise capital for the Bank
because the Company will be able to issue securities without the need for prior
banking regulatory approval and the proceeds of debt securities issued by the
Company can be invested in the Bank as primary capital.
The Bank. The organizers filed applications on behalf of the Bank with the
OCC and with the FDIC on September 21, 1998 for authority to organize as a
national bank, the deposits of which will be federally insured. The Bank will
not be authorized to conduct its banking business until it obtains a charter
from the OCC. The issuance of the charter will depend, among other things, upon
the Bank's receiving at least $7.5 million in capital from the Company and upon
compliance with other standard conditions expected to be imposed by the FDIC and
the OCC. These conditions are generally designed to familiarize the Bank with
certain operating requirements and to prepare the Bank to commence business
operations. The OCC requires that a new national bank obtain a charter and open
for business within 18 months after receipt of preliminary approval from the
OCC. On , 1999, the Bank received preliminary approval of its
application from the OCC, but was awaiting FDIC approval, OCC final approval and
receipt of a charter.
MARKET OPPORTUNITIES
Primary Service Area. The Bank's initial primary service area ("PSA") is
the ten-mile radius surrounding its main office. The PSA represents a geographic
area that includes the majority of the City of Albany, Dougherty County, and the
southern half of Lee County. Albany is served by several major thoroughfares,
including Georgia Highway 82 and U.S. Highways 19 and 300.
Albany is located approximately 170 miles south of Atlanta, Georgia and
approximately 100 miles north of Tallahassee, Florida.
Economic and Demographic Factors. Albany is the key economic focal point of
the Dougherty and Lee County Metropolitan Statistical Area ("MSA") as well as
22
<PAGE> 24
the Bank's PSA, which encompasses a smaller geographic area than the MSA. The
MSA is the largest in Southwest Georgia. Additionally, Albany is considered to
be the commercial center of Southwest Georgia with a majority of the area's
retail sales and activity conducted in its market place. Albany also serves as
the primary medical center for Southwest Georgia. Management believes the MSA
represents a dynamic and unique market in the sense that it serves a wide
geographic area encompassing all of Southwest Georgia.
Retail. As reported by Demographics USA County Edition "1996 Data For A New
Era," Albany surpassed $1 billion in 1994 in retail sales, making Albany one of
the nation's top 135 retail markets measured by household retail expenditures.
This represents a 22.0% increase from 1990 and places Albany third in Georgia
with Atlanta and Macon the only metropolitan cities surpassing Albany in per
household retail sales. Although Albany is the focal point of economic activity
in its MSA and in the Bank's PSA, its economy is supported by the spending power
and labor force of the entire Dougherty and Lee County area.
Population. According to information published by National Decision
Systems, the population within a 10-mile radius from the Bank's main office,
encompassing the Bank's PSA, was approximately 104,000 in 1990, while the
population within a 30-mile radius surrounding the Bank's main office was
approximately 170,000. The projected 2002 population for the PSA is 115,000 and
for the 30-mile radius is 186,000. This represents approximately 10.6% and 9.4%
growth in population from 1990 to 2002 within a 10-mile and a 30-mile radius,
respectively. Additionally, the number of households within the PSA has
increased from 36,588 according to the 1990 census to an estimated 40,048 in
1997. The estimated median household income for the area as reported by National
Decision Systems was $29,129 for 1997. The median age of the population is 33
years.
Industry, Labor and Employment. According to data published by the
Dougherty County Chamber of Commerce, the following employment sectors are
considered basic industries in the county: manufacturing, construction,
transportation and public utilities, retail and wholesale trade, finance and
insurance, medical services, agriculture, and government. According to a 1995
report by the Georgia Department of Labor, over 10,000 people, representing 19%
of the work force, were employed in retail trade and over 8,000 or 15% of the
work force were employed in manufacturing. Other general services industries
employed 17,000 with the largest service areas being the health industry and
education.
The medical facilities located in Dougherty County, which employ
approximately 5,600 employees or approximately 10% of the Dougherty County work
force, serve all of Southwest Georgia. In addition, with three secondary schools
in the county, educational services employs approximately 3,700 employees or 7%
of the work force.
With over 248 construction firms located in the Dougherty County area, the
county is well diversified for construction-related purposes. These companies
employ approximately 2,900 people or 5% of the work force. In addition, there
are 70 agricultural related companies located in the area that employ
approximately 540 people, or 1% of the work force.
23
<PAGE> 25
The following tables, which were compiled by the Dougherty County Chamber
of Commerce, list the top ten manufacturing employers in the Dougherty County
area and the top ten non-manufacturing employers for the area as of January 20,
1994. These tables illustrate the diversification of business and trade in the
area.
TOP TEN MANUFACTURING EMPLOYERS
<TABLE>
<CAPTION>
TOTAL EMPLOYEES INDUSTRY
--------------- ----------------
<S> <C> <C>
Procter & Gamble............................... 1,500 Paper Products
Cooper Tire & Rubber Co........................ 1,024 Tires
Miller Brewing Co.............................. 655 Malt Beverages
Bobs Candies................................... 638 Candy
Ayres Corporation.............................. 550 Aircraft
Merck & Co..................................... 506 Pharmaceuticals
Coats & Clark.................................. 493 Textiles
M & M Mars..................................... 395 Candy
Flint River Textiles........................... 391 Textiles
Georgia Pacific................................ 217 Containers
</TABLE>
TOP TEN NON-MANUFACTURING EMPLOYERS
<TABLE>
<CAPTION>
TOTAL EMPLOYEES INDUSTRY
--------------- ----------------
<S> <C> <C>
U.S. Marine Corps Logistic Base (Civilian)..... 3,433 National Defense
Dougherty County Board of Education............ 2,850 Education
Pheobe Putney Memorial Hospital................ 3,036 Medical Service
City of Albany................................. 2,093 Public Service
Dougherty County............................... 650 Public Service
Palmyra Medical Centers........................ 550 Medical Service
Albany Area Community Service Board............ 515 Medical Service
Burlington Motor Carriers...................... 510 Transportation
Albany State University........................ 504 Education
Turner Job Corps............................... 362 Education
</TABLE>
Construction Activity. According to information published in the January
1998 edition of Greater Albany Area Business, a publication of the Albany Area
Chamber of Commerce, the aggregate value of the properties relating to
residential construction permits for the third quarter of 1997 was up 17.8% from
the third quarter of 1996. Additionally, the total value of building permits for
the Dougherty area (including the city of Albany) increased by 12.5%, while
commercial building permits increased by 25.0% for the same period. The total
value of permits does not reflect the building activities at Albany State
University, which, according to the contractor, when complete should amount to
approximately $110.0 million in construction costs.
Management believes the Albany market presents a growing and highly
diversified economic environment that will support the formation of the Bank. As
a community bank, the Bank will be designed to serve the needs of the citizens
and businesses within this
24
<PAGE> 26
growing economy. We believe continued economic growth in the Albany market will
be important to the Bank's long-term success.
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
Albany market. The Dougherty/Lee County area is currently served by at least
eight commercial banks with a total of 24 offices, two thrifts and one credit
union. The area is also served by a credit union that the organizers believe
will be a primary source of competition. A number of these competitors are well
established in the Dougherty/Lee County area.
Some of the Bank's competitors have substantially greater resources and
lending limits than the Bank and provide other services, such as extensive and
established branch networks and trust services, that the Bank does not expect to
provide initially. As a result of these competitive factors, the Bank may have
to pay higher rates of interest to attract deposits or extend credit with lower
rates of interest to attract borrowers.
Several of the larger regional banks have a presence in the Albany market
through branch offices. Many of their customer service functions, as well as
authority for loan approval, however, are located outside of the Albany market.
There are also several community banks with branches located in the Albany
market; however, there are no other community banks headquartered there.
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The following table illustrates the June 1996 deposit base by financial
institution within a 10-mile, 20-mile and 30-mile radius of the Bank's main
office, based on data reported by National Decision Systems.
<TABLE>
<CAPTION>
10-MILE RADIUS 20-MILE RADIUS 30-MILE RADIUS
--------------- --------------- -----------------
FINANCIAL INSTITUTION $ % $ % $ %
- --------------------- ------ ----- ------ ----- -------- -----
($ IN MILLIONS)
<S> <C> <C> <C> <C> <C> <C>
SunTrust Bank........... $212.2 25.5% $219.1 22.3% $ 264.3 21.1%
First State Bank and
Trust Company......... 183.7 22.1 197.2 20.1 197.2 15.7
NationsBank............. 157.5 19.0 157.5 16.0 157.5 12.6
Security Bank & Trust... 138.1 16.6 138.1 14.0 138.1 11.0
First Union Bank........ 88.5 10.6 88.5 9.0 88.5 7.1
First National Bank of
South Georgia......... 51.1 6.2 51.1 5.2 51.1 4.1
Bank of Dawson.......... -- -- 62.4 6.4 62.4 5.0
Bank of Terrell......... -- -- 60.4 6.2 60.4 4.8
Planters & Citizens
Bank.................. -- -- -- -- 55.2 4.4
Bank of Camilla......... -- -- -- -- 42.7 3.4
Sylvester Banking
Company............... -- -- -- -- 40.7 3.3
Bank of Worth........... -- -- -- -- 35.3 2.8
Southwest Georgia
Bank.................. -- -- -- -- 12.0 1.0
American Banking
Company............... -- -- -- -- 11.6 0.9
Sumter Bank & Trust
Company............... -- -- -- -- 10.0 0.8
Family Federal Savings
Bank.................. -- -- -- -- 8.8 0.7
First State Bank of
Randolph City......... -- -- -- -- 8.2 0.7
Jordan Banking Company.. -- -- 7.7 0.8 7.7 0.6
------ ----- ------ ----- -------- -----
Totals.................. $831.1 100.0% $982.0 100.0% $1,251.7 100.0%
====== ===== ====== ===== ======== =====
</TABLE>
As reported by National Decision Systems, total deposits in the 10-mile
radius surrounding the Bank's main office increased from $768 million to $831
million from 1994 to 1996. Of the total deposits reported in 1996, SunTrust Bank
with 26% had the greatest share of the market. They were followed by First State
Bank and Trust Company, which is now Regions Bank, with 22% of the market. In
addition to the above regional and community banks, the Bank will compete with
AGE Credit Union. AGE Credit Union operates in six locations throughout the
Albany market. The organizers anticipate that AGE Credit Union along with the
other regional banks operating in the Albany market will be its primary source
of competition. The organizers believe, however, that operating as a community
bank headquartered in Albany will provide the Bank with a unique opportunity to
obtain a share of their deposits.
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<PAGE> 28
In 1996, First Union Corp. exited the Albany market by selling its
Dougherty County branches to First State Bank and Trust Company, which
subsequently was purchased by Regions Financial Corporation of Birmingham.
Additionally, First National Bank of South Georgia was purchased in 1996 by ABC
Bancorp, which is located in Moultrie, Georgia. Although three small banks have
branched into the Albany market since 1996, no commercial banks are currently
headquartered in this market. Consequently, all of the deposits in this market
are controlled by financial institutions located outside of the market. As a
result of the various mergers that have taken place in the Albany market over
the past years, the organizers believe an attractive opportunity exists in the
Albany market for a new bank that positions itself as a community bank prepared
to take advantage of changes occurring in the regional banking structure. The
Bank intends to differentiate itself from other financial institutions primarily
through personal service and strong involvement in the Albany market.
BUSINESS STRATEGY
Management Philosophy. The Bank's philosophy will be to operate as a
community bank emphasizing prompt, personalized customer service to the
individuals and businesses located in Albany, Georgia and surrounding
communities. The Bank has adopted this philosophy in order to attract customers
and acquire market share now controlled by other financial institutions in the
Albany market. Management believes that local ownership and control will allow
the Bank to serve customers more efficiently and will aid in the growth and
success of the Bank. Additionally, management believes that the expansion and
growth of the Bank's operations will be a significant factor in the success of
the Company. Accordingly, management will implement the following operating and
growth strategies.
Operating Strategy. In order to achieve the level of prompt, responsive
service that management believes will be necessary to attract customers and to
develop the Bank's image as a local bank with an individual focus, management
will employ the following operating strategies:
- Quality Employees. Management will strive to hire highly trained and
seasoned staff. The staff will be cross-trained with regard to the
various products and services of the Bank so that customer questions may
be resolved by the first employee the customer encounters. The organizers
are committed to hiring experienced and qualified staff, although this
may result in higher personnel costs than that of similar financial
institutions.
- Experienced Senior Management. The Bank's senior management possesses
extensive experience in the banking industry as well as substantial
business and banking contacts in the Albany market. For example, the
Company's President, Robert E. Lee, has over 25 years of banking
experience, and its Chief Lending Officer, David C. Gillebeau, has over
12 years of banking experience. See "Management."
- Community-Oriented Board of Directors. The Board of Directors consists of
long-time residents of the area who are representative of the Bank's
target markets and will be sensitive and responsive to the needs of the
community. Additionally, the Board of Directors represents a wide array
of business experience and community involvement. Through their
experience and involvement, the directors are expected to bring
substantial business and banking contacts to the Bank.
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<PAGE> 29
- Community Involvement. All of the officers and directors of the Company
are active in the Dougherty/Lee County community, and their continued
active community involvement will provide an opportunity to promote the
Bank and its products and services.
- Officer and Director Call Program. Management intends to implement an
active officer and director call program to promote the Bank's
philosophy. The purpose of this call program will be to visit prospective
customers and describe the products, services and philosophy of the Bank.
- Highly Visible Site. The Bank's main office location is highly visible
and in close proximity to a high concentration of the targeted commercial
businesses and residential areas, thus facilitating market recognition
for the Bank as a strong competitor.
- Branching. The Bank intends to open two branches within the first 36
months of operations. Branching will give the Bank the ability to
diversify and provide the entire Albany market with convenient banking
services.
- Individual Customer Focus. The Bank will focus on providing
individualized service and attention to its target customers, which
include individuals and small to medium-sized businesses. As the
employees, officers and directors become familiar with the Bank's
customers on an individual basis, the Bank will be able to respond to
credit requests more quickly and be more flexible in approving loans
based on collateral quality and personal knowledge of the customer.
- Local Decision Making. As the Bank branches into other communities, it
will maintain its policy of making decisions locally and will utilize
local advisory boards. This will allow the Bank to be more responsive to
customer requests and to the needs of the customers within the particular
community.
- Marketing and Advertising. The Company is utilizing Broad Street
Productions, a local marketing firm, to promote the Bank and to develop
the Bank's image as a community oriented bank with an emphasis on quality
service and personal contact. The Bank will also use media services such
as local newspapers, drive-time radio, direct mail campaigns, and
television to promote the Bank.
Growth Strategy. Management believes that growth and expansion of the
Bank's operations will be a significant factor in the success of the Company.
Therefore, management will implement the following growth strategies:
- Capitalize on Trend Toward Consolidation. The Bank will capitalize on its
position as the only community bank headquartered in the Albany market to
attract individual and small to medium-sized business customers that may
be underserved as a result of recent bank consolidations.
- Open Additional Branches. The Bank intends to expand its presence in the
Albany market by opening two new offices within the first 36 months of
operations. One branch is planned for the downtown/east Albany area,
while the other is planned for the southern Lee County area. We also plan
to add branches in other strategic locations as appropriate. The addition
of these branches will provide the Bank new channels through which it can
build its deposit base and solicit new customers.
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<PAGE> 30
- Attract Employees with Established Customer Relationships. The Bank will
seek to hire employees who have, through their experience in banking,
established significant customer relationships. By hiring employees with
established customer relationships, the Bank will be able to grow much
more rapidly than it would if it were to hire employees who would require
time to develop a customer base.
- Allow Space for Expansion. The Bank will construct a main office building
with sufficient room to allow for the future expansion of the Bank. The
size of the proposed main office for the Bank will allow for additional
loan officers and for the addition of a mortgage lending department.
- Offer Fee-Generating Products and Services. The Bank's range of services,
pricing strategies, interest rates paid and charged, and hours of
operation will be structured to attract the Bank's target customers and
increase its market share. The Bank will strive to offer small
businesses, professionals, entrepreneurs and consumers the best loan
services available while charging aggressively for such services and
utilizing technology and strategic outsourcing to increase fee income.
PRODUCTS AND SERVICES
Lending Services
Lending Policy. The Bank is being established to support Albany and
surrounding areas of Dougherty/Lee County. Consequently, the Bank will
aggressively seek creditworthy loans within a limited geographic area. The
Bank's primary lending function will be to make consumer loans to individuals
and commercial loans to small and medium-sized businesses and professional
concerns. In addition, the Bank plans to make real estate-related loans,
including construction loans for residential and commercial properties, and
primary and secondary mortgage loans for the acquisition or improvement of
personal residences. The Bank plans to avoid concentrations of loans to a single
industry or based on a single type of collateral.
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 Bank's Loan Committee. Initially, however, all loans
regardless of amount will go to the Loan Committee. The Bank will not make any
loans to any director or executive officer of the Bank unless the loan is
approved by the Board of Directors of the Bank and is made on terms no more
favorable to such person than would be available to a person unaffiliated with
the Bank.
Lending Limits. The Bank's lending activities will be subject to a variety
of lending limits imposed by federal law. 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, however, the Bank will be
subject to a loan-to-one-borrower limit equal to 15% of the Bank's unimpaired
capital and surplus or 25% of the unimpaired capital and surplus if the excess
over 15% is within the guidelines set forth in 12 U.S.C. sec. 84, which provides
an exception to the 15% limit for certain secured debt. Based on the proposed
capitalization of the Bank and its projected pre-opening expenses, the Bank's
initial lending limit will be approximately $1.1 million for loans not fully
secured plus an additional $750,000 (or an aggregate of approximately $1.9
million) for loans that meet the
29
<PAGE> 31
12 U.S.C. sec. 84 guidelines. The Bank has not yet established any minimum or
maximum loan limits other than the statutory lending limits described above.
These limits will increase or decrease as the Bank's capital increases or
decreases as a result of the Bank's earnings or losses, among other reasons.
Unless the Bank is able to sell participations in its loans to other financial
institutions, the Bank will not be able to meet all of the lending needs of loan
customers requiring aggregate extensions of credit above these limits.
Credit Risks. The principal economic risk associated with each category of
anticipated loans is the creditworthiness of the borrower. Borrower
creditworthiness is affected by general economic conditions and the strength of
the services and retail market segments. Risks associated with real estate loans
also include fluctuations in the value of real estate, new job creation trends,
tenant vacancy rates and, in the case of commercial borrowers, the quality of
the borrower's management. In addition, the quality of the borrower's management
and its ability both to evaluate properly changes in the supply and demand
characteristics affecting its markets for products and services and to respond
effectively to such changes are significant factors in the creditworthiness of a
commercial borrower. General economic factors affecting a borrower's ability to
repay include interest, inflation and employment rates, as well as other factors
affecting a borrower's customers, suppliers and employees.
The well established financial institutions in the Albany market are likely
to make proportionately more loans to medium to large-sized businesses than the
Bank will make. 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.
Real Estate Loans. The Bank will make commercial real estate loans,
construction and development loans, and residential real estate loans. These
loans include certain commercial loans where the Bank takes a security interest
in real estate out of an abundance of caution and not as the principal
collateral for the loan, but will exclude home equity loans, which are
classified as consumer loans. Loan terms generally will be limited to five years
or less, although payments may be structured on a longer amortization basis.
Interest rates may be fixed or adjustable. The Bank will generally charge an
origination fee. Management will attempt to reduce credit risk in the commercial
real estate portfolio by emphasizing loans on owner-occupied office and retail
buildings where the loan-to-value ratio, established by independent appraisals,
does not exceed 80%. In addition, the Bank may require personal guarantees of
the principal owners of the property backed with a review by the Bank of the
personal financial statements of the principal owners. The Bank will compete for
real estate loans with competitors that are well established in the Albany
market.
The Bank may also originate mortgage loans for sale into the secondary
market. The Bank intends to limit interest rate risk and credit risk on these
loans by locking in the interest rate for each loan with the secondary market
investor and receiving the investor's underwriting approval prior to originating
the loan.
Commercial Loans. It is expected that loans for commercial purposes in
various lines of businesses will be one of the primary components of the Bank's
loan portfolio. The terms of such loans will vary by their purpose and by their
underlying collateral (if any). 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. Equipment loans generally will be
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<PAGE> 32
secured by the financed equipment and have a loan-to-value ratio of 80% or less.
Loans to support working capital 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 for loans secured with other
types of collateral, principal will typically be due at maturity.
Consumer Loans. The Bank will make a variety of loans to individuals for
personal, family and household purposes, including secured and unsecured
installment and term loans, home equity loans and lines of credit. The principal
competitors for consumer loans will be the established banks in the Albany
market.
Lending Officers. The Bank intends to hire an experienced commercial real
estate lender and consumer lender in order to develop the loan portfolios. Each
lender will have experience within the Albany market and will be expected to
bring with them substantial contacts.
Investments
In addition to loans, the Bank will make other investments primarily in
obligations of the United States or obligations guaranteed as to principal and
interest by the United States and other taxable securities. No investment in any
of those instruments will exceed any applicable limitation imposed by law or
regulation. The investment portfolio will be reviewed by the Asset and Liability
Management Committee on an ongoing basis to assure investments are profitable
and in accordance with the Bank's policy set by the Board of Directors. Members
of the Asset and Liability Management Committee will include Corinne C. Martin
(Chairperson), Bennett D. Cotten, Jr., Robert E. Lee, Robert M. Beauchamp, Mark
M. Shoemaker and John P. Ventulett, Jr.
Asset and Liability Management
The Bank will utilize its Asset and Liability Management Committee to
manage its assets and liabilities, and to provide an optimum and stable net
interest margin, a profitable after-tax return on assets and return on equity
and adequate liquidity. These management functions will be conducted within the
framework of written loan and investment policies which the Bank will adopt. The
Bank will attempt to maintain a balanced position between rate sensitive assets
and rate sensitive liabilities. Specifically, it will chart assets and
liabilities on a matrix by maturity, effective duration and interest adjustment
period and endeavor to manage any gaps in maturity ranges.
Deposit Services
The Bank will seek to establish solid core deposits, including checking
accounts, money market accounts, a variety of certificates of deposit and IRA
accounts. The primary means used to attract deposits will be an aggressive
marketing plan in the overall service area, a broad product line and competitive
services. The primary sources of deposits will be residents of, and businesses
and their employees located in, the Albany market. These deposits will be
obtained through personal solicitation by the Bank's officers and directors,
direct mail solicitations and advertisements published in the local media.
Deposits will be generated by offering a broad array of competitively priced
deposit services, including demand deposits, regular savings accounts, money
market deposits (transaction and
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<PAGE> 33
investment), certificates of deposit, retirement accounts and other deposit or
funds transfer services that may be permitted by law or regulation and that may
be offered to remain competitive in the market.
Other Banking Services
Other anticipated bank services include cash management services,
safe-deposit boxes, travelers checks, direct deposit of payroll and social
security checks, and automatic drafts for various accounts. The Bank plans to
become associated with a shared network of automated teller machines that may be
used by Bank customers throughout Georgia and other regions. The Bank plans to
offer annuities, mutual funds and other financial services through a third party
that has not, as yet, been chosen by the Bank. The Bank also plans to offer
MasterCard(R) and VISA(R) credit card services through a correspondent bank as
an agent for the Bank. The Bank does not plan to exercise trust powers during
its initial years of operation. The Bank may in the future offer a full-service
trust department, but cannot do so without the prior approval of the OCC.
The Bank will also offer its targeted commercial customers a courier
service that will pick up non-cash deposits from the customer's place of
business and deliver them to the Bank. The Bank believes that this will be an
important service for its customers because the Bank will initially have only
one location.
Future Services
In addition to those services enumerated above, management anticipates that
sometime in the future the Company will also offer to its customers discount
brokerage services. The addition of this service will primarily depend on the
profitability of the Company and the Bank and most likely will not be offered
until both are operating profitably.
MARKETING AND ADVERTISING
The Bank's target customers will be the residents and the small to
medium-sized businesses and their employees located in the Albany market.
Several of the directors and officers of the Company and the Bank have developed
business contacts with numerous professionals within the medical service
industry. Management intends to develop a niche in providing banking services to
these and other medical providers.
The Bank plans to use a targeted marketing approach through local
newspapers, drive-time radio, direct mail campaigns, and television spots as
necessary. Additionally, the Bank plans to sponsor community activities on an
active, ongoing basis. The Company is utilizing the services of Broad Street
Productions in order to coordinate its advertising and marketing efforts.
INFORMATION SYSTEMS AND THE YEAR 2000
The Year 2000 Problem. The year 2000 issue confronting the Company, the
Bank and its suppliers, customers, customers' suppliers and competitors centers
on the inability of computer systems to recognize the year 2000 and other year
2000-sensitive dates, including September 9, 1999, December 31, 1999 and
February 29, 2000. Many existing computer programs and systems originally were
programmed with six-digit dates that provided only two digits to identify the
calendar year in the date field. With the impending new
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<PAGE> 34
millennium, these programs and computers will recognize "00" as the year 1900
rather than the year 2000. Like most financial service providers, the Company
and its operations may be affected significantly by the year 2000 issue as a
result of its dependence on computer-generated financial information. Software,
hardware and equipment both within and outside the Company's and the Bank's
direct control, and third parties with whom the Company and the Bank
electronically or operationally interfaces (including customers and third party
vendors providing data processing, information systems management, computer
system maintenance and credit bureau information) are likely to be affected. If
computer systems are not able to identify the year 2000, many computer
applications could fail or create erroneous results. Consequently, many
calculations that rely on date field information, such as interest, payment or
due dates and other operating functions, could generate significantly misstated
results, and the Company and the Bank could lose its ability to process
transactions, prepare statements or engage in similar normal business
activities. In addition, under certain circumstances, failure to address
adequately the year 2000 issue could adversely affect the viability of the
Bank's suppliers and creditors and the creditworthiness of its borrowers. If not
adequately addressed, the year 2000 issue could ultimately have a significant
adverse impact on the Company's and the Bank's products, services and
competitive condition and, in turn, its financial condition and results of
operations.
Regulatory Oversight. Financial institution regulators recently have
increased their focus on year 2000 compliance issues and have issued guidance
concerning the responsibilities of senior management and directors. The Federal
Financial Institutions Examination Council has issued several interagency
statements on Year 2000 Project Management Awareness. These statements require
financial institutions to, among other things, examine the year 2000
implications of their reliance on vendors and with respect to data exchange and
the potential impact of the year 2000 issue on their customers, suppliers and
borrowers. These statements also require each federally regulated financial
institution to survey its exposure, measure its risk and prepare a plan to
address the year 2000 issue. In addition, the federal banking regulators have
issued safety and soundness guidelines to be followed by insured depository
institutions to ensure resolution of any year 2000 problems. The federal banking
agencies have asserted that year 2000 testing and certification is a key safety
and soundness issue in conjunction with regulatory examinations. Consequently,
an institution's failure to address appropriately the year 2000 issue could
result in supervisory action, including the reduction of the institution's
supervisory ratings, the denial of applications for approval of mergers or
acquisitions or the imposition of civil money penalties.
Because the Company is still pending regulatory approval regarding its
status as a bank holding company and the Bank has not yet commenced operations,
federal banking regulators are focusing on the Company's and the Bank's year
2000 readiness as part of the regulatory approval process. Once the Company and
the Bank have obtained the necessary regulatory approvals, the federal banking
regulators will continue to monitor their status on year 2000 issues as
described above.
The Company's Readiness. Because the Company is a start-up entity and the
Bank has not yet commenced business, the Company does not have existing "legacy"
systems or equipment requiring year 2000 testing and remediation. Rather, the
Company is purchasing all of its office equipment, hardware and software and
obtaining outsourcing service commitments only from vendors and service
providers that can certify that their products
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<PAGE> 35
and services are year 2000 compliant. For example, the Company will purchase
applications software, microcomputers, teller equipment and a network file
server only from vendors that can provide year 2000 compliance certificates with
respect to those products. The Company plans to obtain its data processing
services, automatic teller machine applications, voice response system, internet
banking services, document imaging solutions and bond accounting systems from
third party service providers that can certify that the products and services
they provide will be year 2000 compliant. Management believes that it will be
able to obtain these products and services from vendors and service providers
that can supply the necessary certification. If the Company is unable to do so,
however, it will either forego acquiring the product or service until the
required certification is forthcoming or, if the product or service is essential
to its operations, arrange for independent testing and verification of year 2000
compliance.
As the Company and the Bank acquire its equipment and systems and commences
operations, they will test their year 2000 readiness on an ongoing basis.
Although management does not anticipate that it will encounter difficulties in
this area, the Company and the Bank will require their vendors and service
providers to upgrade or replace any equipment that proves to be non-compliant.
If the necessary upgrades or equipment are not forthcoming, the Company or the
Bank will obtain new equipment or engage a new service provider with
demonstrated year 2000 compliance.
Although the Company's and the Bank's internal systems, equipment and
operations require significant oversight with respect to year 2000 issues,
management believes that its customers' year 2000 readiness could also have a
significant effect on the Company's operations. For example, if a customer with
an outstanding loan from the Bank is unable to maintain its cash flow as a
result of disruption caused by its own or its customers' year 2000 problems, the
customer could default in the repayment of the loan, which would lead to
increased loan losses for the Bank. Although management plans to consider this
possibility when it establishes its loan loss reserve for the Bank, the
potential losses could exceed management's estimate and ultimately cause a net
loss to the Bank and the Company. To address this concern, management will
communicate with customers on an ongoing basis regarding their year 2000
readiness and attempt to ascertain at the earliest opportunity those customers
that are likely to encounter year 2000 problems. Management plans to work with
these customers to ensure, to the greatest extent possible, that their year 2000
compliance issues do not disrupt the Company's or the Bank's operations.
Resources Allocated. To ensure that senior members of management continue
to monitor the Company's year 2000 readiness on a consistent basis, the
Company's Board of Directors established a Year 2000 Committee on November 9,
1998. The members of the committee have been tasked with establishing guidelines
for the acquisition of new equipment and services that will be year 2000
compliant; communicating with potential borrowers, vendors and service providers
regarding year 2000 issues; and monitoring the Company's progress in this area.
Members of the committee will also attend conferences and information sharing
sessions to gain additional insight into the year 2000 issue and potential
strategies for addressing it. The committee's work will continue until the year
2000 and, in the event a year 2000 problem occurs, thereafter until the problem
is resolved. The committee is comprised of Robert E. Lee, David C. Guillebeau,
Charles M. Jones, III, Corinne C. Martin, Lawrence B. Willson and James D.
Woods.
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<PAGE> 36
Because the Company's year 2000 compliance program will principally involve
ensuring that it initially acquires systems, equipment and outsourced services
that are year 2000 compliant, management does not expect that the Company or the
Bank will incur material year 2000 compliance costs. Rather, these costs will be
an incremental part of the cost of obtaining the equipment or services that the
Company will need in order to commence operations. Consequently, the Company has
not established a separate budget for year 2000 compliance expenses. The Year
2000 Committee will, however, monitor the Company's needs in this area and will
establish a budget for year 2000 expenses if it believes that such costs will
prove to be material.
Contingency Plans. Management believes that its only mission-critical, or
"core," system is its host application processing system, which will be
outsourced to a third party service provider. If this system is unable to
process data reliably, the Bank will be forced to obtain the same services from
another service provider or, in the alternative, cease operations until the
existing system becomes year 2000 compliant. A failure in this system or any
other date sensitive system could have a material adverse effect on the
Company's results of operations, liquidity and financial condition. To address
this contingency, the Company is negotiating with a disaster recovery service
that will run the Company's data processing systems in the event the Company's
primary service provider is unable to do so. The Company will require that the
disaster recovery service certify that its systems are year 2000 compliant
before it engages the service. Management also plans to store optical copies of
its computerized records and will be prepared to print paper copies of those
records on December 31, 1999.
EMPLOYEES
Upon commencement of operations, the Bank is expected to have approximately
fifteen full-time employees and two part-time employees. The Company is not
expected to have any employees who are not also employees of the Bank.
Robert E. Lee is the President of the Company and will be the President and
Chief Executive Officer of the Bank. Mr. Lee has over 25 years of banking
experience, including extensive experience in the areas of finance and
operations. See "Management."
David C. Guillebeau will be the Chief Lending Officer of the Bank. Mr.
Guillebeau has over 12 years of banking experience, including extensive lending
and management experience. See "Management."
The Company intends to complete its senior management team by hiring a
Chief Financial Officer for the Company and the Bank. The Chief Financial
Officer is expected to bring to the Company and the Bank substantial experience
in the areas of finance and operations and is expected to be competent with
regard to technological issues.
FACILITIES
The Bank will be located at 2815 Meredyth Drive in Albany, Georgia in
Dougherty County. On November 20, 1998, the Company purchased approximately two
acres of land at 2815 Meredyth Drive at a purchase price of $315,000. The
construction of the permanent facility is planned to begin in January 1999, with
a completion date set for the fall of 1999. The permanent facility will be a
two-story, Colonial style building. The building will consist of approximately
10,700 square feet and will include three drive-up
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<PAGE> 37
windows and one automated teller machine. The estimated construction costs of
the building total $1.3 million.
The Bank's proposed location offers high visibility in an area with
significant traffic, and is located within one-half mile of the main shopping
and retail area in Dougherty County. This area is the central location for
business, residential, commuting and shopping in Dougherty County with proximity
to a major highway serving the community.
The Bank will operate initially out of a modular facility that the Bank
plans to locate on the site of the permanent facility. The monthly rental fee
for the modular facility will be approximately $3,500.
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MANAGEMENT
PROPOSED EXECUTIVE OFFICERS AND DIRECTORS OF THE COMPANY AND THE BANK
The following table sets forth, for the initial members of the Board of
Directors of both the Company and the Bank, (1) their names, addresses and ages
at December 31, 1998, (2) their respective positions with the Company and the
Bank, (3) the number of shares of Common Stock they intend to purchase in the
offering, (4) the percentage of outstanding shares such number will represent,
and (5) the number of shares subject to warrants (and options as to Mr. Lee and
Mr. Guillebeau) they will receive pursuant to their purchase of Common Stock in
this Offering.
<TABLE>
<CAPTION>
PERCENTAGE OF SHARES
POSITION(S) NUMBER OUTSTANDING SUBJECT TO
NAME AND ADDRESS (AGE) TO BE HELD OF SHARES SHARES WARRANTS
- ---------------------- ---------------- --------- ------------- ----------
<S> <C> <C> <C> <C>
CLASS I DIRECTORS:
(Initial term expiring in 1999)
Charles M. Jones III (48).............. Chairman and 30,000 3.0% 15,000
907 W. Third Ave. Chief Executive
Albany, GA 31707 Officer(1)
Van Cise Knowles (58).................. Director 15,000 1.5 15,000
3503 Old Dawson Rd.
Albany, GA 31707
Robert E. Lee (46)..................... President, Chief 50,000 5.0 65,000(3)
5101 Old Dawson Road Executive
Albany, GA 31707 Officer(2), and
Director
Corinne C. Martin (56)................. Director 20,000 2.0 15,000
2344 Winchester Dr.
Albany, GA 31707
William F. McAfee (61)................. Director 15,000 1.5 15,000
1705 Pinecrest Dr.
Albany, GA 31707
CLASS II DIRECTORS:
(Initial term expiring in 2000)
C. Richard Langley (50)................ Director 10,000 1.0 10,000
2811 W. Doublegate Dr.
Albany, GA 31707
Bennett D. Cotten, Jr. (45)............ Director 20,000 2.0 15,000
2608 Kenilworth Dr.
Albany, GA 31707
Jane Anne D. Sullivan (39)............. Director 20,000 2.0 15,000
3707 Hidden Hill Ct.
Albany, GA 31707
John P. Ventulett, Jr. (50)............ Director 10,000 1.0 10,000
2504 Cooleewahee Cove
Albany, GA 31707
</TABLE>
37
<PAGE> 39
<TABLE>
<CAPTION>
PERCENTAGE OF SHARES
POSITION(S) NUMBER OUTSTANDING SUBJECT TO
NAME AND ADDRESS (AGE) TO BE HELD OF SHARES SHARES WARRANTS
- ---------------------- ---------------- --------- ------------- ----------
<S> <C> <C> <C> <C>
James D. Woods (55).................... Director 10,000 1.0 10,000
3402 Wexford Rd.
Albany, GA 31707
CLASS III DIRECTORS:
(Initial term expiring 2001)
Robert M. Beauchamp (36)............... Director 20,000 2.0 15,000
757 Highway 32
Leesburg, GA 31763
Glenn A. Dowling (66).................. Director 15,000 1.5 15,000
880 Tallahassee Rd.
Albany, GA 31707
Mary Helen Dykes (48).................. Secretary and 10,000 1.0 10,000
1618 Valencia Dr. Director
Albany, GA 31707
Mark M. Shoemaker (44)................. Director 15,000 1.5 15,000
920 Third Ave.
Albany, GA 31707
Lawrence B. Willson (48)............... Director 15,000 1.5 15,000
627 5(th) Ave.
Albany, GA 31707
EXECUTIVE OFFICERS WHO ARE NOT ALSO
DIRECTORS:
David C. Guillebeau (37)............... Executive Vice 5,000 0.5 20,000(3)
5009 Barrington Drive President and
Albany, GA 31707 Senior Loan
Officer(2)
------- ---- -------
All Proposed Directors and Executive 280,000 28.0% 275,000
Officers as a Group
(16 persons)
</TABLE>
- -------------------------
(1) Company only.
(2) Bank only.
(3) Includes options to purchase 50,000 and 20,000 shares, respectively, to
be issued to Mr. Lee and Mr. Guillebeau.
Each person listed above has been a director of the Company since August
19, 1998 and is a proposed director of the Bank, except for David C. Guillebeau.
Directors of the Company serve staggered terms, which means that one-third of
the directors will be elected each year at the Company's annual meeting of
shareholders. The initial term of the Class I directors expires in 1999, the
initial term of the Class II directors expires in 2000, and the initial term of
the Class III directors expires in 2001. Thereafter, each director will serve
for a term of three years. See "Description of Capital Stock of the Company --
Certain Provisions of the Articles of Incorporation and Bylaws." The Company's
officers
38
<PAGE> 40
are appointed by the Board of Directors and hold office at the will of the
Company's Board.
Each of the Bank's proposed directors will, upon approval of the OCC, serve
until the Bank's first shareholders meeting, which will be held shortly after
the Bank receives its charter. The Company, as the sole shareholder of the Bank,
will nominate each proposed director to serve as director of the Bank at that
meeting. After the first shareholders meeting, directors of the Bank will serve
for a term of one year and will be elected by the Company each year at the
Bank's annual meeting of shareholders. The Bank's officers will be appointed by
its Board of Directors and will hold office at the will of the Bank's Board.
ROBERT M. BEAUCHAMP. Bob Beauchamp is a native of Albany. He is a graduate
of the Cumberland School of Law of Samford University and of Mercer University
in Macon, Georgia. Mr. Beauchamp has practiced law in Albany since 1990 and
currently is a partner at the law firm of Beauchamp-Associate LLC.
BENNETT D. COTTEN, JR. Bennett Cotten is a native of Albany. He is an
orthopedic surgeon and a co-owner of Southwest Georgia Orthopedic and Sports
Medicine. Dr. Cotten received his Bachelor's of Science from the University of
Georgia and his Medical Doctorate from the Medical College of Georgia. He
completed an Orthopedic Residency Program at the University of Louisville in
1984. Dr. Cotten practiced medicine at Orthopedic Associates located in Albany
from 1984 until 1996. He has practiced medicine at Southwest Georgia Orthopedic
and Sports Medicine in Albany since February 1996.
GLENN A. DOWLING. Glenn Dowling has been a resident of Albany for the past
40 years. He attended Valdosta State University and received his Doctor of
Podiatric Medicine degree from Illinois College of Podiatric Medicine. Dr.
Dowling has practiced podiatry since 1960 in Albany. Currently, he is managing
partner of Albany Ambulatory Surgery Center and Albany Podiatry Associates, a
five-doctor group practice. He is owner and developer of Partridge Pea
Plantation, a private conservation preserve. He has been active in community
activities, including Kiwanis, Chehaw Park, Cancer Society, Heart Association,
Easter Seal, Habitat for Humanity, Boys and Girls Clubs, Boy Scouts, Girl
Scouts, City Recreation Department, and Albany Football Officials Association.
He is a 1998 recipient of Albany Sertoma Club's "Good Citizen of the Year
Award."
MARY HELEN DYKES. Mary Helen Dykes is a native of Albany. She is a graduate
of Manhattanville College in Purchase, New York. Ms. Dykes has served as the
Secretary and Treasurer of Bob's Candies, Inc., an Albany manufacturer of candy,
since 1977.
CHARLES M. JONES, III. Chuck Jones is a native of Albany. He will serve as
the Chairman of the Board of Directors of the Company and the Bank and as the
Chief Executive Officer of the Company. Mr. Jones has served as the Chief
Executive Officer of Consolidated Loan & Mortgage Co., located in Albany, since
1971. Mr. Jones is also a co-owner of other Albany businesses, including
Consolidated Loan Co. (a corporation), Consolidated Loan Co. (a partnership),
and Delta Partners, Inc.
Mr. Jones is a member of Georgia Industrial Loan Association and has served
as the past President, Chairman of the Executive Committee and Chairman of the
Board of the Georgia Financial Services Association. He has been an active
member in the community through his service on the Boards of Directors of Albany
Tomorrow, Inc., Mount Zion Civil Rights Museum and Thronateeska Heritage Center.
39
<PAGE> 41
Currently, Mr. Jones is the Chairman of the Board of the Better Business
Bureau of Southwest Georgia and serves on the Executive Board of the Better
Business Bureau of West Georgia and East Alabama (Columbus, Georgia office). He
has also held board/officer positions with numerous social and civic clubs and
organizations including: Albany Symphony Orchestra, Theatre of Albany, Albany
Museum of Art, Community Cancer Association, Halcyon Club, Albany Toastmasters
Club, Albany Sertoma Club and Friends of Chehaw.
VAN CISE KNOWLES. Van Knowles is a native of Albany. He is a surgeon and is
the sole owner of his medical practice, Van C. Knowles MD, P.C. Dr. Knowles
received his Bachelor's of Science from the University of Georgia and his
Medical Doctorate from the Medical College of Georgia. Dr. Knowles has practiced
medicine in Albany as a sole practitioner since 1973. He is a member of numerous
professional associations, including the Dougherty County Medical Society, the
Medical Association of Georgia, and the American Medical Association. Dr.
Knowles has served as the President of the Dougherty County Medical Society, the
Moretz Surgical Society, and has served as Chairman of the Tissue Committee and
on the Board of Trustees of the Palmyra Medical Center. He is also involved in
numerous community associations, including serving on the Board of Directors of
the Doublegate Country Club and serving as Secretary and Past President of the
Albany Sertoma Club.
C. RICHARD LANGLEY. Rick Langley is a native of Albany. He is a graduate of
the University of Georgia School of Law and Emory University. Mr. Langley has
practiced law in Albany since 1973. He has practiced law as a partner with the
law firm of Langley & Lee in Albany since 1991.
ROBERT E. LEE. Bob Lee is the President of the Company and will be the
President and Chief Executive Officer of the Bank. He is a native of Albany, and
his career in banking began in 1973 with Columbus Bank & Trust Co. Between 1973
and 1979, he held various positions at the bank, including Operations Manager
and Electronic Data Processing Auditor. From 1979 to 1980, Mr. Lee served as
Auditor for C&S National Bank. In June 1980, Mr. Lee joined First State
Corporation, where he held various positions of increasing responsibility until
May 1998. He began in 1980 as a General Auditor for the bank and was promoted in
1985 to Vice President of Accounting. In 1987, he was given additional
responsibility for the Operations and Data Processing functions of the bank and
in 1992, he was promoted to Senior Vice President over Operations, Data
Processing and Accounting. Mr. Lee was promoted to Executive Vice President and
Chief Financial Officer in 1993, and held this position until May 1998, when he
resigned from First State Corporation, now Regions Financial Corporation, to
pursue organization of the Company and Bank.
Mr. Lee earned a Bachelor's of Science degree from Columbus College in
Columbus, Georgia and a graduate degree from the University of Wisconsin School
of Bank Administration. Mr. Lee is also actively involved in various community
and civic associations. He is currently serving a second term as the Chairman of
the Administrative Board for the First United Methodist Church and over the past
ten years has served as the Chairman of various other committees for the church.
Mr. Lee is also a member of the Albany Rotary Club and will serve as the
Treasurer for the 1998-1999 year. Mr. Lee has served on the Board of the
American Cancer Society for the past eight years and during that time has
annually chaired the Knights of Columbus Touring Pro-Am Golf
40
<PAGE> 42
Tournament to benefit the American Cancer Society. Additionally, Mr. Lee is the
Chairman of a capital funds drive for Sherwood Christian Academy, a private
school in Albany.
CORINNE C. MARTIN. Corinne Martin is a native of Albany. Since 1972 Ms.
Martin has been a co-owner of Carlton Co., a family owned business that
distributes Caterpillar equipment in South Georgia. She also has been an owner
of various businesses in the Albany area since 1996, including Coldwater Inv.
Co. (doing business as Budget Rent-A-Car), and Covey Pointe Shooting Preserve
(commercial hunting property). Ms. Martin is a graduate of Darton College-School
of Nursing and holds a current license as a Registered Professional Nurse.
WILLIAM F. MCAFEE. Bill McAfee is a native of Albany. He is a graduate of
Auburn University. Mr. McAfee is the sole owner of Bill McAfee Leasing, which
provides truck leasing and financing services. He has also been a Sales Manager
for Allstar International, in Albany since 1975.
MARK M. SHOEMAKER. Mark Shoemaker has been a resident of Albany since 1985.
He came to Georgia in 1972 to attend Emory University. Dr. Shoemaker graduated
from Emory University and received a MMSC-ICU PA from Emory University School of
Medicine. Dr. Shoemaker received his Medical Doctorate from the Medical College
of Georgia. Dr. Shoemaker has been a shareholder of Albany Anesthesia Associates
and has practiced Medicine in Albany since 1989.
JANE ANNE D. SULLIVAN. Jane Anne Sullivan is resident of Albany and a
graduate of Valdosta State College. Ms. Sullivan has been a co-owner of
Buildings Exchange, a real estate holding company located in Blakely, Georgia
since 1981.
JOHN P. VENTULETT, JR. Jay Ventulett is a native of Albany and a graduate
of Georgia State University. He has served as Vice President and Executive
Insurance Agent of Howard, Ventulett & Bishop Insurers, Inc. since 1979.
LAWRENCE B. WILLSON. Larry Willson is a resident of Albany. He has served
as a Vice President and Farm Manager for Sunnyland Farms, Inc., in Albany since
1978. Mr. Willson is a graduate of Trinity College in Hartford, Connecticut and
received a Masters of Business Administration from Georgia State University.
JAMES D. WOODS. Jim Woods is a resident of Albany. He has been a partner in
the Drs. Adams and Woods, MD P.C. Medical Practice in Albany since 1976. Dr.
Woods received his Doctor of Medicine Degree form Meharry Medical College. He
received his Certificate of Internship from Naval Hospital in Great Lakes,
Illinois and received his Certificate of Residency from Naval Hospital in
Oakland, California. Additionally, Dr. Woods received a Bachelor of Arts in
Biology from Lincoln University.
DAVID C. GUILLEBEAU. David Guillebeau will be the Chief Lending Officer of
the Bank. Mr. Guillebeau is a native of Albany and is a graduate of the
University of Georgia. Mr. Guillebeau comes to the Bank with 13 years of banking
experience. From 1986 until September 1998, Mr. Guillebeau has held various
positions with Security Bank located in Albany. Ultimately, Mr. Guillebeau held
the position of Vice President and was responsible for a loan portfolio of
approximately $28 million, consisting of consumer and commercial loans. For over
ten years, Mr. Guillebeau served as the branch manager of the bank and was
responsible for approximately 20 employees and the audit and sales function of
the bank, which was approximately a $200 million institution.
41
<PAGE> 43
Mr. Guillebeau is also actively involved in the community. He has served as
both an Elder and Deacon of Covenant Presbyterian Church and has served on the
Finance and Grounds Committee for a number of years. Mr. Guillebeau has also
served as the Chairman of the Board of the American Cancer Society for two years
as well as the Crusade Chairman, President and Vice President. Currently, Mr.
Guillebeau serves on the Trade and Tourism committee of the Albany Chamber of
Commerce as well as on the board for the Albany Symphony Association.
Additionally, Mr. Guillebeau has served as President and as a member of the
board of the Bank of America's Institute of Southwest Georgia.
COMMITTEES OF THE BOARDS OF DIRECTORS
The Board of Directors of the Company has established the committees
described below. The members of each committee will be the same for the Bank as
they are for the Company.
Compensation Committee. The Compensation Committee establishes remuneration
levels for officers of the Company and the Bank, reviews management organization
and development, reviews significant employee benefit programs and establishes
and administers executive compensation programs, including the Stock Plan as
described below. The Compensation Committee consists of Charles M. Jones, III,
Van Cise Knowles (Chairman), Robert E. Lee and Jane Anne D. Sullivan.
Executive Committee. The Executive Committee will have authority to
exercise the powers of the Board of Directors in managing the affairs and assets
of the Company and the Bank between their respective Board meetings, except for
the powers exclusively reserved to the Board of Directors of the Bank or the
Company. The Executive Committee will also be responsible for making
recommendations to the Board of Directors regarding matters relating to the
management and expansion of the Bank. The Executive Committee consists of
Charles M. Jones, III (Chairman), Robert E. Lee, Corinne C. Martin, Lawrence B.
Willson and James D. Woods.
Audit and Compliance Committee. The Audit and Compliance Committee
recommends to the Board of Directors the independent public accountants to be
selected to audit the Company's and the Bank's annual financial statements and
approves any special assignments given to such accountants. The Audit and
Compliance Committee also reviews the planned scope of the annual audit, any
changes in accounting principles and the effectiveness and efficiency of the
Company's and the Bank's internal accounting staff. Additionally, the Audit and
Compliance Committee provides oversight to the Company's and the Bank's
compliance with regulatory rules and regulations, including the Community
Reinvestment Act. The Audit and Compliance Committee consists of Glenn A.
Dowling, C. Richard Langley and William F. McAfee (Chairman).
Loan Committee. The Loan Committee reviews any loan request made by a
potential borrower over a certain credit threshold for compliance with the
Bank's lending policies and federal and state rules and regulations governing
extensions of credit and makes a decision whether to extend credit to the
potential borrower. The Loan Committee consists of Mary Helen Dykes, Charles M.
Jones, III, Robert E. Lee (Chairman), William F. McAfee, John P. Ventulett, Jr.
and James D. Woods.
42
<PAGE> 44
Asset and Liability Management Committee. The Asset and Liability
Management Committee provides guidance to the Company and the Bank in balancing
the yields and maturities in its loans and investments to its deposits. The
Asset and Liability Management Committee consists of Corinne C. Martin
(Chairperson), Bennett D. Cotten, Jr., Robert E. Lee, Robert M. Beauchamp, Mark
M. Shoemaker and John P. Ventulett, Jr.
43
<PAGE> 45
EXECUTIVE COMPENSATION
1998 COMPENSATION
The following table shows information for 1998 with regard to compensation
for services rendered in all capacities to the Company by the President. No
executive officer earned more than $100,000 in salary and bonus in 1998.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
ANNUAL COMPENSATION
------------------------------------------------
NAME AND OTHER ANNUAL
PRINCIPAL POSITION YEAR SALARY ($) BONUS ($) COMPENSATION ($)
- ------------------ ---- ---------- --------- ----------------
<S> <C> <C> <C> <C>
Robert E. Lee........................ 1998 $45,832 -0- -0-
President
</TABLE>
EMPLOYMENT AGREEMENTS
Effective August 1, 1998 and October 1, 1998, respectively, the Company and
the Bank entered into an employment agreement with each of Robert E. Lee and
David C. Guillebeau (each an "Employee") regarding Mr. Lee's employment as
President of the Company and the Bank and Chief Executive Officer of the Bank,
and Mr. Guillebeau's employment as Executive Vice President of the Company and
the Bank and Senior Loan Officer of the Bank (each an "Employment Agreement" and
collectively, the "Employment Agreements"). Under the terms of the Employment
Agreements, Mr. Lee will receive a salary of $110,000 per year and Mr.
Guillebeau will receive a salary of $80,000 per year. Each Employment Agreement
provides that at the end of each year of operation, the Employee will be
entitled to receive a cash bonus, to be awarded by the Compensation Committee
based on earnings of the Bank. Additionally, the Employment Agreements provide
that the Company will grant Mr. Lee an incentive stock option to purchase a
number of shares of Common Stock equal to 5% of the shares of Common Stock sold
in this offering and that the Company will grant Mr. Guillebeau an incentive
stock option to purchase a number of shares of Common Stock equal to 2% of the
shares of Common Stock sold in this offering. The options will vest ratably over
five years at 20% per year with the first increment vesting on the one-year
anniversary of the date of this Prospectus. The options will have an exercise
price of $10.00 per share. The Company will also provide an automobile to Mr.
Lee.
The initial term of Mr. Lee's employment commenced on August 1, 1998 and
will continue for a period of five years. The initial term of Mr. Guillebeau's
employment commenced on October 1, 1998 and will continue for a period of three
years. At the end of the initial term of each Employment Agreement and at the
end of each succeeding 12-month period, each Employment Agreement will be
extended for a successive 12-month period unless either of the parties to each
of the Employment Agreements gives notice to the other party to the Employment
Agreement of his or its intent not to extend the Employment Agreement. In the
event (1) an Employee dies or (2) the Company or the Bank abandons their
organizational efforts or certain other terms and conditions are not met by
December 31, 1999, neither the Company nor the Bank will have any further
obligations under the Employment Agreements. Employment may be terminated (1) at
the election of the Bank and the Company for cause (as defined in the Employment
44
<PAGE> 46
Agreements); (2) at the election of the Employee if the Bank or the Company
breaches any material provision of the Employment Agreement or if the Employee's
powers, responsibilities or duties are materially diminished; or (3) upon the
Employee's death or disability. If employment is terminated by the Company
without cause or terminated by the Employee with cause, the Company will be
required to meet its obligations under the Employment Agreement with respect to
Employee's compensation and health and dental insurance coverage for a period
equal to the greater of 12 months from the date of termination or the remaining
term. If employment is terminated by the Company with cause, by the Employee
without cause or by the Employee in connection with a Charge in Control (as
defined in the Employment Agreements), the Employee will be prohibited from
competing with the Company or the Bank or soliciting its customers or employees
within the geographic area set forth in the Employment Agreement for a period of
12 months from the date of termination.
DIRECTOR COMPENSATION
The directors of the Company and the Bank will not to be compensated
separately for their services as directors until net profits of the Company and
the Bank exceed their net losses since inception on a cumulative basis.
Thereafter, the Company and the Bank will adopt compensatory policies for their
directors in accordance with applicable law.
ORGANIZERS' WARRANTS
The organizers intend to purchase an aggregate of 275,000 shares of Common
Stock in the offering at a price of $10.00 per share. This represents 27.5% of
the shares that will be outstanding after the offering (23.9% if the
Underwriter's over-allotment option is exercised in full). The organizers have
guaranteed a line of credit from The Bankers Bank for an amount up to $750,000
for organizing expenses of the Company and the Bank.
In recognition of the efforts made and financial risks undertaken by the
organizers in organizing the Company and the Bank, the Company will issue to the
organizers warrants to purchase additional shares of Common Stock. The
organizers will be issued warrants at a ratio of one warrant for each share of
Common Stock purchased in the offering, up to a limit of 15,000 warrants for any
one organizer. As a result, a maximum of up to 225,000 warrants may be issued to
the organizers. The issuance of these warrants is subject to regulatory
approval. The warrants will vest in 20% annual increments beginning on the
one-year anniversary of the date of this Prospectus so long as the holder
remains on the Company's Board of Directors. Vested warrants will be exercisable
for the ten-year period following the date of this Prospectus or for 90 days
after a warrant holder ceases to be a director, whichever is shorter. Each
warrant will be exercisable at a price of $10.00 per share subject to adjustment
for stock splits, recapitalization, or other similar events.
STOCK INCENTIVE PLAN
General. The Company's 1998 Stock Incentive Plan (the "Stock Plan")
provides the Company with the flexibility to grant key employees, officers,
directors, and consultants of the Company, the Bank and any other affiliate
entity that may be formed hereafter, Stock Incentives (as defined below) for the
purpose of giving them a proprietary interest in the Company and to encourage
them to remain in the employ of the Company or the Bank. The Board of Directors
has reserved 90,000 shares of Common Stock (an amount equal to 9.0% of the
shares of Common Stock sold in the offering) for issuance pursuant to awards
45
<PAGE> 47
that may be made under the Stock Plan, subject to adjustment as provided in the
Stock Plan.
Administration. The Stock Plan will be administered by the Company's
Compensation Committee (the "Committee"), which is comprised of at least two
directors appointed by the Company's Board of Directors. The Board of Directors
will consider the advisability of complying with the disinterested standards
contained in both Section 162(m) of the Internal Revenue Code and Rule 16(b)(3)
(promulgated under the Securities Exchange Act of 1934) when appointing members
to the Committee. The Committee or, as the case may be, the Board of Directors,
will have the authority to grant awards under the Stock Plan, to determine the
terms of each award, to interpret the provisions of the Stock Plan and to make
all other determinations that it may deem necessary or advisable for the
administration of the Stock Plan.
Awards
The Stock Plan permits the Committee to make awards of shares of Common
Stock, awards of derivative securities related to the value of the Common Stock
and certain cash awards to eligible persons. These discretionary awards may be
made on an individual basis or pursuant to a program approved by the Committee
for the benefit of a group of eligible persons. The Stock Plan permits the
Committee to make awards of a variety of equity-based incentives, including (but
not limited to) stock awards, options to purchase shares of Common Stock and to
sell shares of Common Stock back to the Company, stock appreciation rights,
so-called "cashout" or "limited stock appreciation rights" (which the Committee
may make exercisable in the event of certain changes in control of the Company
or other events), phantom shares, performance incentive rights, dividend
equivalent rights and similar rights (collectively, "Stock Incentives").
The number of shares of Common Stock as to which a Stock Incentive is
granted and to whom any Stock Incentive is granted will be determined by the
Committee, subject to the provisions of the Stock Plan. Stock Incentives may be
made exercisable or settled at such prices and may be made forfeitable or
terminable under such terms as are established by the Committee, to the extent
not otherwise inconsistent with the terms of the Stock Plan. Stock Incentives
are generally not transferable or assignable during a holder's lifetime.
Stock Incentives
Options. The Stock Plan provides for incentive stock options and
non-qualified stock options. The Committee will determine whether an option is
an incentive stock option or a non-qualified stock option at the time the option
is granted, and the option will be evidenced by a Stock Incentive Agreement.
Options may be made exercisable pursuant to such terms as are established by the
Committee, to the extent not otherwise inconsistent with the terms of the Stock
Plan.
The exercise price of an option shall be set forth in the applicable Stock
Incentive Agreement. The exercise price of an incentive stock option may not be
less than the fair market value of the Common Stock on the date of the grant (or
less than 110% of the fair market value if the participant owns more than 10% of
the Company's outstanding Common Stock). At the time the incentive stock option
is exercised, the Company will be entitled to place a legend on the certificates
representing the shares of Common Stock
46
<PAGE> 48
purchased pursuant to the option to identify them as shares of Common Stock
purchased upon the exercise of an incentive stock option. Non-qualified stock
options may be made exercisable at a price equal to, or less than or more than
the fair market value of the Common Stock on the date that the option is
awarded, based upon an average fair market value of the Common Stock at the time
the option is awarded, or based upon any other reasonable measure of fair market
value. The Committee may permit an option exercise price to be paid in cash or
by the delivery of previously owned shares of Common Stock, or to be satisfied
through a cashless exercise executed through a broker or by having a number of
shares of Common Stock otherwise issuable at the time of exercise withheld.
The term of an option shall be specified in the applicable Stock Incentive
Agreement. The term of an incentive stock option may not exceed ten years from
the date of grant; however, any incentive stock option granted to a participant
who owns more than 10% of the Common Stock will not be exercisable after the
expiration of five years after the date the option is granted. Subject to any
further limitations in a Stock Incentive Agreement, in the event of a
participant's termination of employment, the term of an incentive stock option
will expire, terminate and become unexercisable no later than three months after
the date of such termination of employment; provided, however, that if such
termination of employment is due to death or disability, one year will be
substituted for the three-month period. Incentive stock options are also subject
to the further restriction that the aggregate fair market value (determined as
of the date of the grant) of Common Stock as to which any such incentive stock
option first becomes exercisable in any calendar year is limited to $100,000 per
recipient. To the extent incentive stock options covering more than $100,000
worth of Common Stock first become exercisable in any one calendar year, the
excess will be non-qualified options. For purposes of determining which, if any,
options have been granted in excess of the $100,000 limit, options will be
considered to become exercisable in the order granted.
Stock Appreciation Rights. Stock appreciation rights may be granted
separately or in connection with another Stock Incentive, and the Committee may
provide that they are exercisable at the discretion of the holder or that they
will be paid at a time or times certain or upon the occurrence or non-occurrence
of certain events. Stock appreciation rights may be settled in shares of Common
Stock or in cash, according to terms established by the Committee with respect
to any particular award.
Stock Awards. The Committee may grant shares of Common Stock to a
participant, subject to such restrictions and conditions, if any, as the
Committee shall determine.
Other Stock Incentives. Dividend equivalent rights, performance units, and
phantom shares may be granted in such numbers or units and may be subject to
such conditions and restrictions as the Committee will determine and will be
payable in cash or shares of Common Stock, as the Committee may determine.
Certain Cash Awards. The Committee may make cash awards designed to cover
tax obligations of employees that result from the receipt or exercise of a Stock
Incentive. The terms of particular Stock Incentives may provide that they
terminate, among other reasons, upon the holder's termination of employment or
other status with respect to the Company, upon a specified date, upon the
holder's death or disability, or upon the occurrence of a change in control of
the Company. Stock Incentives may include exercise, conversion or settlement
rights to a holder's estate or personal representative in the event of the
holder's death or disability. At the Committee's discretion, Stock Incentives
that are subject to
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termination may be cancelled, accelerated, paid or continued, subject to the
terms of the applicable Stock Incentive Agreement and to the provisions of the
Stock Plan.
Certain Reorganizations. The Stock Plan provides for appropriate
adjustment, as determined by the Committee, in the number and kind of shares
subject to unexercised options in the event of any change in the outstanding
shares of Common Stock by reason of a stock split, stock dividend, combination
or reclassification of shares, recapitalization, merger or similar event. In the
event of certain corporate reorganizations, Stock Incentives may be substituted,
cancelled, accelerated, cashed-out or otherwise adjusted by the Committee,
provided such adjustment is not inconsistent with the terms of the Stock Plan or
any agreement reflecting the terms of a Stock Incentive.
Amendment and Termination. The Board of Directors has the authority to
amend or terminate the Stock Plan in such manner as it deems advisable. The
Board of Directors is not required to obtain shareholder approval to amend or
terminate the Stock Plan but, in its discretion, it may condition any such
amendment or termination upon shareholder approval if shareholder approval is
deemed necessary or appropriate in consideration of tax, securities, or other
laws. No such action by the Board of Directors may adversely affect the rights
of a holder of a Stock Incentive without the holder's consent.
Federal Income Tax Consequences
The following discussion outlines generally the federal income tax
consequences of participation in the Stock Plan. Individual circumstances may
vary and each participant should rely on his or her own tax counsel for advice
regarding federal income tax treatment under the Stock Plan.
Incentive Stock Options. A participant who exercises an incentive stock
option will not be taxed at the time he or she exercises the option or a portion
thereof. Instead, the participant will be taxed at the time he or she sells the
shares of Common Stock purchased pursuant to the incentive stock option. The
participant will be taxed on the difference between the price he or she paid for
the Common Stock and the amount for which he or she sells the Common Stock. If
the participant does not sell the shares of Common Stock prior to two years from
the date of grant of the incentive stock option and one year from the date the
Common Stock is transferred to him or her, the gain will be a capital gain and
the Company will not get a corresponding deduction. If the participant sells the
shares of Common Stock at a gain prior to that time, the difference between the
amount the participant paid for the Common Stock and the lesser of fair market
value on the date of exercise or the amount for which the stock is sold will be
taxed as ordinary income. If the participant sells the shares of Common Stock
for less than the amount he or she paid for the stock prior to the one- or
two-year period indicated, no amount will be taxed as ordinary income and the
loss will be taxed as a capital loss. Exercise of an incentive stock option may
subject a participant to, or increase a participant's liability for, the
alternative minimum tax.
Non-qualified Options. A participant will not recognize income upon the
grant of a non-qualified option or at any time prior to the exercise of the
option or a portion thereof. At the time the participant exercises a
non-qualified option or portion thereof, he or she will recognize compensation
taxable as ordinary income in an amount equal to the excess of the fair market
value of the Common Stock on the date the option is exercised over the
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price paid for the Common Stock, and the Company will then be entitled to a
corresponding deduction.
Depending upon the time period shares of Common Stock are held after
exercise, the sale or other taxable disposition of shares acquired through the
exercise of a non-qualified option generally will result in a short- or
long-term capital gain or loss equal to the difference between the amount
realized on such disposition and the fair market value of such shares when the
non-qualified option was exercised.
Special rules apply to a participant who exercises a non-qualified option
by paying the exercise price, in whole or in part, by the transfer of shares of
Common Stock to the Company and to a participant who is subject to the reporting
requirements of Section 16 of the Securities Exchange Act of 1934, as amended.
Other Stock Incentives. A participant will not recognize income upon the
grant of a stock appreciation right, dividend equivalent right, performance unit
award or phantom share (the "Equity Incentives"). Generally, at the time a
participant receives payment under any Equity Incentive, he or she will
recognize compensation taxable as ordinary income in an amount equal to the cash
or the fair market value of the Common Stock received, and the Company will then
be entitled to a corresponding deduction.
A participant will not be taxed upon the grant of a stock award if such
award is not transferable by the participant or is subject to a "substantial
risk of forfeiture," as defined in the Internal Revenue Code of 1986, as
amended. However, when the shares of Common Stock that are subject to the stock
award are transferable by the participant and are no longer subject to a
substantial risk of forfeiture, the participant will recognize compensation
taxable as ordinary income in an amount equal to the fair market value of the
stock subject to the stock award, less any amount paid for such stock, and the
Company will then be entitled to a corresponding deduction. However, if a
participant so elects at the time of receipt of a stock award, he or she may
include the fair market value of the stock subject to the stock award, less any
amount paid for such stock, in income at that time and the Company also will be
entitled to a corresponding deduction at that time.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
It is possible that the Company and the Bank will have banking and other
business transactions in the ordinary course of business with directors and
officers of the Company and the Bank, including members of their families or
corporations, partnerships or other organizations in which such directors and
officers have a controlling interest. If such transactions occur, the
transaction: (1) will be on substantially the same terms (including price or
interest rate and collateral) as those prevailing at the time for comparable
transactions with unrelated parties, and any banking transactions will not be
expected to involve more than the normal risk of collectibility or present other
unfavorable features to the Company and the Bank, (2) will be on terms no less
favorable than could be obtained from an unaffiliated third party, and (3) will
be approved by a majority of the directors, including a majority of the
disinterested directors.
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DESCRIPTION OF CAPITAL STOCK OF THE COMPANY
COMMON STOCK
The Company's Articles of Incorporation authorize the Company to issue up
to 10,000,000 shares of Common Stock, par value $1.00 per share, of which
1,000,000 shares will be issued pursuant to this offering. As of the date of
this Prospectus, 90,000 shares of Common Stock (or an amount equal to 9.0% of
the shares of Common Stock sold in the offering) were reserved for issuance upon
the exercise of stock options to be issued under the Stock Plan and 225,000
shares of Common Stock were reserved for issuance upon the exercise of the
warrants to be issued to the organizers.
All shares of Common Stock will be entitled to share equally in dividends
from legally available funds, when, as and if declared by the Board of
Directors. Upon liquidation or dissolution of the Company, whether voluntary or
involuntary, all shares of Common Stock will be entitled to share equally in all
assets of the Company available for distribution to the shareholders. It is not
anticipated that the Company will pay any cash dividends on the Common Stock in
the near future. See "Dividends." Each holder of Common Stock will be entitled
to one vote for each share on all matters submitted to the shareholders. Holders
of Common Stock will not have any preemptive right to acquire authorized but
unissued capital stock of the Company. There is no cumulative voting, redemption
right, sinking fund provision or right of conversion in existence with respect
to the Common Stock. All shares of the Common Stock issued in accordance with
the terms of the offering as described in this Prospectus will be fully paid and
non-assessable.
PREFERRED STOCK
The Company's Articles of Incorporation also authorize the Board of
Directors to issue up to 2,000,000 shares of preferred stock, par value not
stated (the "Preferred Stock"). The Board of Directors has the authority to
determine the designations, powers, preferences and relative rights of the
Preferred Stock. Preferred Stock may have voting rights, subject to applicable
law and determination by the Board of Directors. No Preferred Stock has been
issued. Although the Company has no present plans to issue any Preferred Stock,
the ownership and control of the Company by the holders of the Common Stock
would be diluted if the Company were to issue Preferred Stock that had voting
rights.
CERTAIN PROVISIONS OF THE ARTICLES OF INCORPORATION AND BYLAWS
PROTECTIVE PROVISIONS
General. Shareholders' rights and related matters are governed by the
Georgia Business Corporation Code and the Company's Articles of Incorporation
and Bylaws. The Articles of Incorporation and the Bylaws of the Company contain
certain provisions which would have the effect of impeding an attempt to change
or remove management of the Company or to gain control of the Company in a
transaction not supported by its Board of Directors (the "Protective
Provisions"). In general, one purpose of the Protective Provisions is to assist
the Company's Board of Directors in playing a role in connection with attempts
to acquire control of the Company. The Protective Provisions allow the Board of
Directors of the Company to further and protect the interests of the Company and
its shareholders as appropriate under the circumstances, including if the Board
of
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Directors determines that a sale of control is in the best interests of the
Company and its shareholders, by enhancing the Board's ability to maximize the
value to be received by the shareholders upon such a sale.
Although the Company's management believes the Protective Provisions are
beneficial to shareholders of the Company, the Protective Provisions also may
tend to discourage some takeover bids. As a result, shareholders of the Company
may be deprived of opportunities to sell some or all of their shares at prices
that represent a premium over prevailing market prices. On the other hand,
defeating undesirable acquisition offers can be a very expensive and
time-consuming process. To the extent that the Protective Provisions discourage
undesirable proposals, the Company may be able to avoid those expenditures of
time and money.
The Protective Provisions also may discourage open market purchases by a
potential acquirer. Such purchases may increase the market price of the
Company's Common Stock temporarily, enabling shareholders to sell their shares
at a price higher than that which otherwise would prevail. In addition, the
Protective Provisions may decrease the market price of the Company's Common
Stock by making the stock less attractive to persons who invest in securities in
anticipation of price increases from potential acquisition attempts. The
Protective Provisions also may make it more difficult and time consuming for a
potential acquirer to obtain control of the Company through replacing the Board
of Directors and management. Furthermore, the Protective Provisions may make it
more difficult for shareholders of the Company to replace the Board of Directors
or management, even if a majority of the shareholders believes that replacing
them would be in the best interests of the Company. As a result, the Protective
Provisions may tend to perpetuate the incumbent Board of Directors and
management.
The Articles of Incorporation of the Company also contain a provision which
eliminates the potential personal liability of directors for monetary damages.
In addition, the Bylaws of the Company contain certain provisions which provide
indemnification for directors of the Company. The Protective Provisions and the
provisions relating to elimination of liability and indemnification of directors
are discussed more fully below.
Preferred Stock. The existence of Preferred Stock may impede the takeover
of the Company without the approval of the Company's Board of Directors by
enabling the Company's Board of Directors to issue shares to persons friendly to
current management, which could render more difficult or discourage any attempt
to gain control of the Company through a proxy contest, tender offer, merger or
otherwise. In addition, the issuance of shares of Preferred Stock with voting
rights may have an adverse effect on the rights of the holders of Common Stock,
and in certain circumstances, such issuances of Preferred Stock could decrease
the market price of the Common Stock.
Staggered Terms for Board of Directors. Article 7 of the Articles of
Incorporation provides that the Board of Directors of the Company will be
divided into three classes. Directors of the Company serve staggered terms,
which means that one-third of the directors will be elected each year at the
Company's annual meeting of shareholders. The initial term of the Class I
directors expires in 1999, the initial term of the Class II directors expires in
2000, and the initial term of the Class III directors expires in 2001.
Thereafter, each director will serve for a term of three years. This means that
unless the existing directors were to resign, it would take at least two annual
meetings of the Company's shareholders to replace a majority of its directors.
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Under Georgia law, directors are elected annually for a term of one year
unless the articles of incorporation provide otherwise.
Change in Number of Directors. Article 8 of the Articles of Incorporation
of the Company provides that any change in the number of directors of the
Company, as set forth in its Bylaws, would have to be made by the affirmative
vote of 2/3 of the entire Board of Directors or by the affirmative vote of the
holders of at least 2/3 of the outstanding shares of Common Stock.
Under Georgia law, the number of directors may be increased or decreased
from time to time by amendment to the Bylaws adopted by a plurality of the
directors at a Board meeting at which a quorum is present, unless the articles
of incorporation provide otherwise or unless the number of directors is
otherwise fixed by the shareholders.
Removal of Directors. Article 9 of the Articles of Incorporation of the
Company provides that one or more directors of the Company may be removed for
cause during their terms only by the affirmative vote of the holders of a
majority of the issued and outstanding shares of the Company entitled to vote in
an election of directors. Article 9 also provides that directors of the Company
may be removed during their terms without cause only by the affirmative vote of
the holders of 2/3 of the issued and outstanding shares of the Company entitled
to vote in an election of directors.
Under Georgia law, one or more directors of a corporation may be removed
with or without cause by the affirmative vote of a majority of the shares
present at a meeting at which a quorum is represented and entitled to vote
thereon, unless the articles of incorporation or a bylaw adopted by the
shareholders provides otherwise.
Supermajority Voting on Certain Transactions. Under Article 13 of the
Articles of Incorporation of the Company, with certain exceptions, any merger or
consolidation involving the Company or any sale or other disposition of all or
substantially all of its assets will require the affirmative vote of a majority
of the directors of the Company then in office and the affirmative vote of the
holders of at least 2/3 of the outstanding shares of Common Stock. However, if
the Board of Directors of the Company has approved the particular transaction by
the affirmative vote of 2/3 of the entire Board, then the applicable provisions
of Georgia law would govern and shareholder approval of the transaction would
require the affirmative vote of the holders of only a majority of the
outstanding shares of Common Stock entitled to vote on the transaction.
Evaluation of an Acquisition Proposal. Article 14 of the Company's Articles
of Incorporation provides the factors that the Company's Board of Directors
shall consider in evaluating whether any acquisition proposal made by another
party is in the best interests of the Company and its shareholders. As used
herein, the term "acquisition proposal" refers to any offer of another party (1)
to make a tender offer or exchange offer for any equity security of the Company,
(2) to merge or consolidate the Company with another corporation, or (3) to
purchase or otherwise acquire all or substantially all of the properties and
assets owned by the Company.
Article 14 charges the Board, in evaluating an acquisition proposal, to
consider all relevant factors, including (1) the expected social and economic
effects of the transaction on the employees, customers and other constituents
(e.g., suppliers of goods and services) of the Company and the Bank, (2) the
expected social and economic effects on the communities within which the Company
and the Bank operate, and (3) the consideration
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being offered by the other corporation in relation (a) to the then current value
of the Company as determined by a freely negotiated transaction and (b) to the
Board of Directors' then estimate of the Company's future value as an
independent entity. The enumerated factors are not exclusive, and the Board may
consider other relevant factors.
This Article has been included in the Company's Articles of Incorporation
because the Bank is charged with providing support to and being involved with
the communities it serves. As a result, the Board believes its obligations in
evaluating an acquisition proposal extend beyond evaluating merely the
consideration being offered in relation to the then market or book value of the
Common Stock. No provisions of Georgia law specifically enumerate the factors a
corporation's board of directors should consider in the event the corporation is
presented with an acquisition proposal.
While the value of the consideration offered to shareholders is the main
factor when weighing the benefits of an acquisition proposal, the Board believes
it appropriate also to consider all other relevant factors. For example, this
Article directs the Board to evaluate the consideration being offered in
relation to the then current value of the Company determined in a freely
negotiated transaction and in relation to the Board's then estimate of the
future value of the Company as an independent concern. A takeover bid often
places the target corporation virtually in the position of making a forced sale,
sometimes when the market price of its stock may be depressed. The Board
believes that frequently the consideration offered in such a situation, even
though it may be in excess of the then market value (i.e., the value at which
shares are then currently trading), is less than that which could be obtained in
a freely negotiated transaction. In a freely negotiated transaction, management
would have the opportunity to seek a suitable partner at a time of its choosing
and to negotiate for the most favorable price and terms which reflect not only
the current value, but also the future value of the Company.
One effect of this Article may be to discourage a tender offer in advance.
Often an offeror consults the Board of a target corporation prior to or after
commencing a tender offer in an attempt to prevent a contest from developing. In
the opinion of the Board, this provision will strengthen its position in dealing
with any potential offeror which might attempt to acquire the Company through a
hostile tender offer. Another effect of this Article may be to dissuade
shareholders who might be displeased with the Board's response to an acquisition
proposal from engaging the Company in costly litigation.
Article 14 of the Articles of Incorporation would not make an acquisition
proposal regarded by the Board as being in the best interests of the Company
more difficult to accomplish. It would, however, permit the Board to determine
that an acquisition proposal was not in the best interests of the Company (and
thus to oppose it) on the basis of the various factors deemed relevant. In some
cases, such opposition by the Board might have the effect of maintaining the
positions of incumbent management.
INDEMNIFICATION
The Bylaws of the Company contain certain indemnification provisions which
provide that directors, officers, employees or agents of the Company
(collectively, the "insiders") will be indemnified against expenses actually and
reasonably incurred by them if they are successful on the merits of a claim or
proceeding. In addition, the Bylaws provide that the Company will advance to its
insiders reasonable expenses of any such proceeding, provided that such person
furnishes the Company with (i) a written affirmation of such person's
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good faith belief that he or she has met the applicable standard of conduct and
(ii) a written undertaking to repay any advances if it is ultimately determined
that such person is not entitled to indemnification.
When a case or dispute is not ultimately determined on its merits (i.e., it
is settled), the indemnification provisions provide that the Company will
indemnify insiders when they meet the applicable standard of conduct. The
applicable standard of conduct is met if the insider acted in a manner he or she
in good faith believed to be in or not opposed to the best interests of the
Company and, with respect to any criminal action or proceeding, if the insider
had no reasonable cause to believe his or her conduct was unlawful. Whether the
applicable standard of conduct has been met is determined by the Board of
Directors, the shareholders or independent legal counsel in each specific case.
The Bylaws of the Company also provide that the indemnification rights set
forth in the Bylaws are not exclusive of other indemnification rights to which
an insider may be entitled under any bylaw, resolution or agreement, either
specifically or in general terms approved by the affirmative vote of the holders
of a majority of the shares entitled to vote. The Company can also provide for
greater indemnification than that set forth in the Bylaws if it chooses to do
so, subject to approval by the Company's shareholders. The Company may not,
however, indemnify an insider for liability arising out of circumstances which
constitute exceptions to limitation of an insider's liability for monetary
damages. See "-- Limitation of Liability."
The indemnification provisions of the Bylaws specifically provide that the
Company may purchase and maintain insurance on behalf of any director against
any liability asserted against such person and incurred by him or her in any
such capacity, whether or not the Company would have had the power to indemnify
against such liability.
The Company is not aware of any pending or threatened action, suit or
proceeding involving any of its insiders for which indemnification from the
Company may be sought.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933, as amended (the "Securities Act") may be permitted to directors,
officers and controlling persons of the Company pursuant to the foregoing
provisions, or otherwise, the Company has been advised that in the opinion of
the Securities and Exchange Commission such indemnification is against public
policy as expressed in the Securities Act and is, therefore, unenforceable. In
the event that a claim for indemnification against such liabilities other than
the payment by the 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.
LIMITATION OF LIABILITY
Article 11 of the Company's Articles of Incorporation, subject to certain
exceptions, eliminates the potential personal liability of a director for
monetary damages to the Company and to the shareholders of the Company for
breach of a duty as a director. There is no elimination of liability for (1) a
breach of duty involving appropriation of a
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business opportunity of the Company, (2) an act or omission not in good faith or
involving intentional misconduct or a knowing violation of law, (3) a
transaction from which the director derives an improper material tangible
personal benefit, or (4) as to any payment of a dividend or approval of a stock
repurchase that is illegal under the Georgia Business Corporation Code. Article
11 does not eliminate or limit the right of the Company or its shareholders to
seek injunctive or other equitable relief not involving monetary damages.
Article 11 was adopted by the Company pursuant to the Georgia Business
Corporation Code which allows Georgia corporations to include in their Articles
of Incorporation a provision eliminating or limiting the liability of directors,
except in the circumstances described above. Article 11 was included in the
Company's Articles of Incorporation to encourage qualified individuals to serve
and remain as directors of the Company. While the Company has not experienced
any problems in locating directors, it could experience difficulty in the future
as the Company's business activities increase and diversify. Article 11 was also
included to enhance the Company's ability to secure liability insurance for its
directors at a reasonable cost. The Company intends to obtain liability
insurance covering actions taken by its directors in their capacities as
directors. The Board of Directors believes that Article 11 will enable the
Company to secure such insurance on terms more favorable than if such a
provision were not included in the Articles of Incorporation.
AMENDMENTS
Any amendment of Articles 7, 9, 11, 13 and 14 of the Company's Articles of
Incorporation requires the affirmative vote of the holders of at least 2/3 of
the outstanding shares of Common Stock, unless 2/3 of the entire Board of
Directors approves the amendment. If 2/3 of the Board approves the amendment,
the applicable provisions of Georgia law would govern, and the approval of only
a majority of the outstanding shares of Common Stock would be required.
SHARES ELIGIBLE FOR FUTURE SALE
Upon completion of the offering, the Company will have 1,000,000 shares of
Common Stock outstanding (1,150,000 if the Underwriter's over-allotment option
is exercised in full). These shares of Common Stock will be freely tradable
without restriction by persons other than affiliates of the Company, which
shares will be subject to the resale limitations of Rule 144 promulgated under
the Securities Act. A total of 280,000 shares beneficially owned by affiliates
of the Company will be eligible for public sale pursuant to Rule 144, subject to
the contractual and volume restrictions discussed below, beginning 180 days
after the date of this Prospectus.
In general, under Rule 144 as currently in effect, a person (or persons
whose shares are aggregated) who has beneficially owned his or her shares of
Common Stock for at least one year (including the prior holding period of any
prior owner other than an affiliate) is entitled to sell within any three-month
period that number of shares which does not exceed the greater of 1% of the
outstanding shares of Common Stock or the average weekly trading volume during
the four calendar weeks preceding each such sale. Purchasers of Common Stock in
this offering or on the open market may resell those shares immediately,
although affiliates of the Company will be subject to the volume and other
limitations of Rule 144. Sales under Rule 144 are also subject to certain manner
of
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sale provisions, notice requirements and the availability of current public
information about the Company. A person (or persons whose shares are aggregated)
who is not deemed an "affiliate" of the Company for at least three months and
who has beneficially owned shares for at least two years (including the holding
period of any prior owner other than an affiliate) would be entitled to sell
such shares under Rule 144(k) without regard to the limitations described above.
Rule 144 defines an "affiliate" of a company as a person who directly, or
indirectly through one or more intermediaries, controls, or is controlled by, or
is under common control with, such company. Affiliates of a company generally
include its directors, officers and principal shareholders.
Notwithstanding the fact that Rule 144 would otherwise permit the sale of
shares held by affiliates beginning 90 days after the date of this Prospectus,
the Company and the organizers have each agreed with the Underwriter that they
will not sell, contract to sell, or otherwise dispose of any shares of Common
Stock or any securities convertible into or exchangeable for any shares of
Common Stock for a period of 180 days from the date of this Prospectus without
the prior written consent of the Underwriter, except in limited circumstances.
The Company intends to issue warrants to purchase up to an aggregate of
225,000 shares of Common Stock representing up to 22.5% of the Common Stock sold
in the offering. The Company also intends to grant options to purchase up to an
aggregate of 90,000 shares of Common Stock (representing up to 9.0% of the
Common Stock sold in the offering) pursuant to the Stock Plan. The Company
intends to register the shares issuable upon exercise of warrants and options
granted under the Stock Plan. Upon such registration, such shares will be
eligible for resale in the public market without restriction by persons who are
not affiliates of the Company, and to the extent they are held by affiliates,
pursuant to Rule 144 without application of the holding period requirements.
Prior to the offering, there has been no public market for the Common
Stock, and no prediction can be made as to the effect, if any, that the sale of
shares or the availability of shares for sale will have on the market price
prevailing from time to time. Nevertheless, sales of substantial amounts of
Common Stock in the public market could adversely affect prevailing market
prices and the ability of the Company to raise equity capital in the future.
UNDERWRITING
Subject to the terms and conditions of the underwriting agreement among the
Company and the Underwriter named below (the "Underwriting Agreement"), the
Underwriter has agreed to purchase from the Company, and the Company has agreed
to sell to the Underwriter, the number of shares of Common Stock set forth
opposite the Underwriter's name below.
<TABLE>
<CAPTION>
NUMBER OF
NUMBER OF OVER-ALLOTMENT
UNDERWRITER FIRM SHARES SHARES
- ----------- ----------- --------------
<S> <C> <C>
Interstate/Johnson Lane Corporation..................... 1,000,000 150,000
</TABLE>
The Underwriting Agreement provides that the obligations of the Underwriter
are subject to approval of certain legal matters by counsel and to various other
conditions customary in a firm commitment underwritten public offering. The
Underwriter is
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obligated to purchase and pay for the shares offered by this Prospectus (other
than those covered by the over-allotment option described below).
The underwriting discount with respect to shares not purchased by the
Company's directors and executive officers in this offering will equal 7.5% of
the public offering price set forth on the cover page of this Prospectus, or
$0.75 per share, while the underwriting discount with respect to shares
purchased in this offering by the Company's directors and executive officers
will equal 3.5% of the public offering price, or $0.35 per share.
The Underwriter proposes to offer the shares of Common Stock being
purchased directly to the public at the public offering price set forth on the
cover page of this Prospectus, to certain securities dealers at such price less
a concession not in excess of $ per share. The Underwriter may allow, and
such selected dealers may reallow, a concession not in excess of $ per share to
certain other brokers and dealers. After the initial public offering, the
offering price and other selling terms may be changed.
The Company has granted the Underwriter an option, exercisable within 30
days after the date of this Prospectus, to purchase up to 150,000 additional
shares of Common Stock to cover over-allotments, if any, at the public offering
price set forth on the cover page of this Prospectus, less the 7.5% underwriting
discount. The Underwriter may purchase such shares only to cover over-allotments
made in connection with this offering.
The Underwriter does not intend to sell shares of Common Stock to any
account over which it exercises discretionary authority.
The Company and the organizers have each agreed with the Underwriter that
they will not sell, contract to sell, or otherwise dispose of any shares of
Common Stock or any securities convertible into or exchangeable for any shares
of Common Stock for a period of 180 days from the date of this Prospectus
without the prior written consent of the Underwriter, except in limited
circumstances. The Underwriter may from time to time be a customer of, engage in
transactions with, and perform services for the Company or the Bank in the
ordinary course of business.
The Company has agreed to indemnify the Underwriter against, and to
contribute to certain losses arising out of, certain liabilities including
liabilities under the Securities Act or to contribute to payments that the
Underwriter may be required to make in respect thereof.
In connection with this offering, the Underwriter may purchase and sell
Common Stock in the open market. These transactions may include over-allotment
and stabilizing transactions, and purchases to cover syndicate short positions
created in connection with this offering. Stabilizing transactions consist of
certain bids or purchases for the purpose of preventing or retarding a decline
in the market price of the Common Stock, and syndicate short positions involve
the sale by the Underwriter of a greater number of shares of Common Stock than
they are required to purchase from the Company in the offering. These activities
may stabilize, maintain or otherwise affect the market price of the Common Stock
which may be higher than the price that might otherwise prevail in the open
market. These transactions may be effected on the Nasdaq OTC Bulletin Board or
otherwise, and these activities, if commenced, may be discontinued at any time.
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SUPERVISION AND REGULATION
The following discussion sets forth the material elements of the regulatory
framework applicable to banks and bank holding companies and provides certain
specific information related to the Company.
GENERAL
The Company will be a bank holding company registered with the Board of
Governors of the Federal Reserve System (the "Federal Reserve") under the Bank
Holding Company Act of 1956, as amended (the "BHC Act"). As such, the Company
and, if applicable, its non-bank subsidiaries are subject to the supervision,
examination, and reporting requirements of the BHC Act and the regulations of
the Federal Reserve.
The BHC Act requires every bank holding company to obtain the prior
approval of the Federal Reserve before: (1) it may acquire direct or indirect
ownership or control of any voting shares of any bank if, after such
acquisition, the bank holding company will directly or indirectly own or control
more than 5% of the voting shares of the bank; (2) it or any of its
subsidiaries, other than a bank, may acquire all or substantially all of the
assets of any bank; or (3) it may merge or consolidate with any other bank
holding company.
The BHC Act further provides that the Federal Reserve may not approve any
transaction that would result in a monopoly or would be in furtherance of any
combination or conspiracy to monopolize or attempt to monopolize the business of
banking in any section of the United States, or the effect of which may be
substantially to lessen competition or to tend to create a monopoly in any
section of the country, or that in any other manner would be in restraint of
trade, unless the anticompetitive effects of the proposed transaction are
clearly outweighed by the public interest in meeting the convenience and needs
of the community to be served. The Federal Reserve is also required to consider
the financial and managerial resources and future prospects of the bank holding
companies and banks concerned and the convenience and needs of the community to
be served. Consideration of financial resources generally focuses on capital
adequacy, which is discussed below.
The BHC Act, as amended by the interstate banking provisions of the
Riegle-Neal Interstate Banking and Branching Efficiency Act of 1994 (the
"Interstate Banking Act"), repealed the prior statutory restrictions on
interstate acquisitions of banks by bank holding companies, such that the
Company, and any other bank holding company located in Georgia may now acquire a
bank located in any other state, and any bank holding company located outside of
Georgia may acquire any Georgia-based bank, regardless of state law to the
contrary, in either case subject to certain deposit-percentage, aging
requirements, and other restrictions. The Interstate Banking Act also generally
provides that national and state-chartered banks may branch interstate through
acquisitions of banks in other states. By adopting legislation prior to June 1,
1997, a state had the ability either to "opt in" and accelerate the date after
which interstate branching would be permissible or "opt out" and prohibit
interstate branching altogether.
In response to the Interstate Banking Act, the Georgia General Assembly
adopted the Georgia Interstate Banking Act. The Georgia Interstate Banking Act
provides that (1) interstate acquisitions by institutions located in Georgia are
permitted in states that also allow national interstate acquisitions and (2)
interstate acquisitions of institutions
58
<PAGE> 60
located in Georgia are permitted by institutions in states that allow national
interstate acquisitions.
The Georgia Interstate Branching Act permits Georgia-based banks and bank
holding companies owning or acquiring banks outside of Georgia and all
non-Georgia banks and bank holding companies owning or acquiring banks in
Georgia to merge any lawfully acquired bank into an interstate branch network.
The Georgia Interstate Branching Act also allows banks to establish de novo
branches throughout Georgia, thus removing a barrier to competition.
The BHC Act generally prohibits the Company from engaging in activities
other than banking or managing or controlling banks or other permissible
subsidiaries and from acquiring or retaining direct or indirect control of any
company engaged in any activities other than those activities determined by the
Federal Reserve to be closely related to banking or managing or controlling
banks. In determining whether a particular activity is permissible, the Federal
Reserve must consider whether the performance of such an activity reasonably can
be expected to produce benefits to the public, such as greater convenience,
increased competition, or gains in efficiency, that outweigh possible adverse
effects, such as undue concentration of resources, decreased or unfair
competition, conflicts of interest, or unsound banking practices. For example,
factoring accounts receivable, acquiring or servicing loans, leasing personal
property, conducting discount securities brokerage activities, performing
certain data processing services, acting as agent or broker in selling credit
life insurance and certain other types of insurance in connection with credit
transactions, and performing certain insurance underwriting activities all have
been determined by the Federal Reserve to be permissible activities of bank
holding companies. The BHC Act does not place territorial limitations on
permissible non-banking activities of bank holding companies. Despite prior
approval, the Federal Reserve has the power to order a holding company or its
subsidiaries to terminate any activity or to terminate its ownership or control
of any subsidiary when it has reasonable cause to believe that continuation of
such activity or such ownership or control constitutes a serious risk to the
financial safety, soundness, or stability of any bank subsidiary of that bank
holding company.
The Bank's deposits will be insured by the Federal Deposit Insurance
Corporation ("FDIC") to the maximum extent provided by law. The Bank will also
be subject to numerous state and federal statutes and regulations that will
affect its business, activities and operations, and it will be supervised and
examined by one or more state or federal bank regulatory agencies.
The Office of the Comptroller of the Currency ("OCC") will regularly
examine the operations of the Bank and is given authority to approve or
disapprove mergers, consolidations, the establishment of branches and similar
corporate actions. The OCC also has the power to prevent the continuance or
development of unsafe or unsound banking practices or other violations of law.
PAYMENT OF DIVIDENDS
The Company is a legal entity separate and distinct from the Bank. The
principal sources of cash flow of the Company, including cash flow to pay
dividends to its shareholders, are dividends paid by the Bank. There are
statutory and regulatory limitations
59
<PAGE> 61
on the payment of dividends by the Bank to the Company as well as by the Company
to its shareholders.
If, in the opinion of the OCC, the Bank were engaged in or about to engage
in an unsafe or unsound practice (which, depending on the financial condition of
the Bank, could include the payment of dividends), the OCC may require, after
notice and hearing, that the Bank cease and desist from such practice. The
federal banking agencies have indicated that paying dividends that deplete a
depository institution's capital base to an inadequate level would be an unsafe
and unsound banking practice. Under the Federal Deposit Insurance Corporation
Improvement Act of 1991 ("FDICIA"), a depository institution may not pay any
dividend if payment would cause it to become undercapitalized or if it already
is undercapitalized. See "-- Prompt Corrective Action." Moreover, the federal
agencies have issued policy statements that provide that bank holding companies
and insured banks should generally only pay dividends out of current operating
earnings.
The payment of dividends by the Company and the Bank may also be affected
by other factors, such as the requirement to maintain adequate capital above
regulatory guidelines.
CAPITAL ADEQUACY
The Company and the Bank will be required to comply with the capital
adequacy standards established by the Federal Reserve in the case of the Company
and the OCC in the case of Bank. There are two basic measures of capital
adequacy for bank holding companies that have been promulgated by the Federal
Reserve -- a risk-based measure and a leverage measure. All applicable capital
standards must be satisfied for a bank holding company to be considered in
compliance.
The risk-based capital standards are designed to make regulatory capital
requirements more sensitive to differences in risk profile among banks and bank
holding companies, to account for off-balance-sheet exposure, and to minimize
disincentives for holding liquid assets. Assets and off-balance-sheet items are
assigned to broad risk categories, each with appropriate weights. The resulting
capital ratios represent capital as a percentage of total risk-weighted assets
and off-balance-sheet items.
The minimum guideline for the ratio (the "Total Risk-Based Capital Ratio")
of total capital ("Total Capital") to risk-weighted assets (including certain
off-balance-sheet items, such as standby letters of credit) is 8%. At least half
of Total Capital must comprise common stock, minority interests in the equity
accounts of consolidated subsidiaries, noncumulative perpetual preferred stock,
and a limited amount of cumulative perpetual preferred stock, less goodwill and
certain other intangible assets ("Tier 1 Capital"). The remainder may consist of
subordinated debt, other preferred stock, and a limited amount of loan loss
reserves ("Tier 2 Capital").
In addition, the Federal Reserve has established minimum leverage ratio
guidelines for bank holding companies. These guidelines provide for a minimum
ratio (the "Leverage Ratio") of Tier 1 Capital to average assets, less goodwill
and certain other intangible assets, of 3% for bank holding companies that meet
certain specified criteria, including having the highest regulatory rating. All
other bank holding companies generally are required to maintain a Leverage Ratio
of at least 3%, plus an additional cushion of 100 to 200 basis points. The
guidelines also provide that bank holding companies experiencing internal growth
(as will be the case for the Company) or making acquisitions will be
60
<PAGE> 62
expected to maintain strong capital positions substantially above the minimum
supervisory levels without significant reliance on intangible assets.
Furthermore, the Federal Reserve has indicated that it will consider a "Tangible
Tier 1 Capital Leverage Ratio" (deducting all intangibles) and other indicia of
capital strength in evaluating proposals for expansion or new activities.
The Bank will be subject to risk-based and leverage capital requirements
adopted by the OCC, which are substantially similar to those adopted by the
Federal Reserve for bank holding companies.
Failure to meet capital guidelines could subject a bank to a variety of
enforcement remedies, including issuance of a capital directive, the termination
of deposit insurance by the FDIC, a prohibition on the taking of brokered
deposits, and certain other restrictions on its business. As described below,
substantial additional restrictions can be imposed on FDIC-insured depository
institutions that fail to meet applicable capital requirements. See "-- Prompt
Corrective Action."
SUPPORT OF SUBSIDIARY INSTITUTIONS
Under Federal Reserve policy, the Company is expected to act as a source of
financial strength for, and to commit resources to support, the Bank. This
support may be required at times when, absent such Federal Reserve policy, the
Company may not be inclined to provide it. In addition, any capital loans by a
bank holding company to the Bank are subordinate in right of payment to deposits
and to certain other indebtedness of the Bank. In the event of a bank holding
company's bankruptcy, any commitment by the bank holding company to a federal
bank regulatory agency to maintain the capital of a banking subsidiary will be
assumed by the bankruptcy trustee and entitled to a priority of payment.
PROMPT CORRECTIVE ACTION
FDICIA establishes a system of prompt corrective action to resolve the
problems of undercapitalized institutions. Under this system, the federal
banking regulators have established five capital categories (well capitalized,
adequately capitalized, undercapitalized, significantly undercapitalized and
critically undercapitalized) and are required to take certain mandatory
supervisory actions, and are authorized to take other discretionary actions,
with respect to institutions in the three undercapitalized categories, the
severity of which will depend upon the capital category in which the institution
is placed. Generally, subject to a narrow exception, FDICIA requires the banking
regulator to appoint a receiver or conservator for an institution that is
critically undercapitalized. The federal banking agencies have specified by
regulation the relevant capital level for each category.
61
<PAGE> 63
The capital levels established for each of the categories are as follows:
<TABLE>
<CAPTION>
TOTAL TIER 1
CAPITAL TIER 1 RISK-BASED RISK-BASED
CATEGORY CAPITAL CAPITAL CAPITAL OTHER
-------- --------------- ----------- ------------ ----------------
<S> <C> <C> <C> <C>
Well Capitalized................ 5% or more 10% or more 6% or more Not subject to a
capital
directive
Adequately Capitalized.......... 4% or more 8% or more 4% or more --
Undercapitalized................ less than 4% less than Less than 4% --
8%
Significantly
Undercapitalized.............. less than 3% less than Less than 3% --
6%
Critically Undercapitalized..... 2% or less
tangible equity
-- -- --
</TABLE>
For purposes of the regulation, the term "tangible equity" includes core
capital elements counted at Tier 1 Capital for purposes of the risk-based
capital standards, plus the amount of outstanding cumulative perpetual preferred
stock (including related surplus), minus all intangible assets with certain
exceptions. A depository institution may be deemed to be in a capitalization
category that is lower than is indicated by its actual capital position if it
receives an unsatisfactory examination rating.
An institution that is categorized as undercapitalized, significantly
undercapitalized, or critically undercapitalized is required to submit an
acceptable capital restoration plan to its appropriate federal banking agency.
Under FDICIA, a bank holding company must guarantee that a subsidiary depository
institution meets its capital restoration plan, subject to certain limitations.
The obligation of a controlling holding company under FDICIA to fund a capital
restoration plan is limited to the lesser of 5% of an undercapitalized
subsidiary's assets or the amount required to meet regulatory capital
requirements. An undercapitalized institution is also generally prohibited from
increasing its average total assets, making acquisitions, establishing any
branches, or engaging in any new line of business, except in accordance with an
accepted capital restoration plan or with the approval of the FDIC. In addition,
the appropriate federal banking agency is given authority with respect to any
undercapitalized depository institution to take any of the actions it is
required to or may take with respect to a significantly undercapitalized
institution as described below if it determines "that those actions are
necessary to carry out the purpose" of FDICIA.
FDIC INSURANCE ASSESSMENTS
Pursuant to FDICIA, the FDIC adopted a risk-based assessment system for
insured depository institutions that takes into account the risks attributable
to different categories and concentrations of assets and liabilities. The system
assigns an institution to one of three capital categories: (1) well capitalized;
(2) adequately capitalized; and (3) undercapitalized. These three categories are
substantially similar to the prompt corrective action categories described
above, with the "undercapitalized" category including institutions that are
undercapitalized, significantly undercapitalized, and critically
undercapitalized for prompt corrective action purposes. An institution is also
assigned by the FDIC to one of three supervisory subgroups within each capital
group. The supervisory subgroup to which an institution is assigned is based on
a supervisory evaluation provided to the FDIC by the institution's primary
federal regulator and information which the FDIC determines to be
62
<PAGE> 64
relevant to the institution's financial condition and the risk posed to the
deposit insurance funds (which may include, if applicable, information provided
by the institution's state supervisor). An institution's insurance assessment
rate is then determined based on the capital category and supervisory category
to which it is assigned. Under the risk-based assessment system, there are nine
assessment risk classifications (i.e., combinations of capital groups and
supervisory subgroups) to which different assessment rates are applied.
Assessment rates for members of both the Bank Insurance Fund ("BIF") and the
Savings Association Insurance Fund ("SAIF") for the first half of 1995 ranged
from 23 basis points (0.23% of deposits) for an institution in the highest
category (i.e., "well capitalized" and "healthy") to 31 basis points (0.31% of
deposits) for an institution in the lowest category (i.e., "undercapitalized"
and "substantial supervisory concern"). These rates were established for both
funds to achieve a designated ratio of reserves to insured deposits (i.e.,
1.25%) within a specified period of time.
Once the designated ratio for the BIF was reached in May 1995, the FDIC
reduced the assessment rate applicable to BIF deposits in two stages, so that,
beginning in 1996, the deposit insurance premiums for 92% of all BIF members in
the highest capital and supervisory categories were set at $2,000 per year,
regardless of deposit size. The FDIC elected to retain the existing assessment
rate range of 23 to 31 basis points for SAIF members for the foreseeable future
given the undercapitalized nature of that insurance fund.
Recognizing that the disparity between the SAIF and BIF premium rates had
adverse consequences for SAIF-insured institutions and other banks with SAIF
assessed deposits, including reduced earnings and an impaired ability to raise
funds in capital markets and to attract deposits, the Deposit Insurance Funds
Act of 1996 (the "Funds Act") was enacted on September 30, 1996. As directed by
the Funds Act, the FDIC implemented a special one-time assessment of
approximately 65.7 basis points (0.657%) on a depository institution's
SAIF-insured deposits held as of March 31, 1995 (or approximately 52.6 basis
points on SAIF deposits acquired by banks in certain qualifying transactions).
In addition, the FDIC has implemented a revision in the SAIF assessment
rate schedule that effected, as of October 1, 1996 (1) a widening in the
assessment rate spread among institutions in the different capital and risk
assessment categories, (2) an overall reduction of the assessment rate range
assessable on SAIF deposits ranging from 0 to 27 basis points, and (3) a special
interim assessment rate range for the last quarter of 1996 of 18 to 27 basis
points on institutions subject to Financing Corporation ("FICO") assessments.
Effective January 1, 1997, assessments to help pay off the $780 million in
annual interest payments on the $8 billion FICO bonds issued in the late 1980s
as part of the government rescue of the thrift industry imposed on both BIF- and
SAIF-insured deposits in annual amounts presently estimated at 1.29 basis points
and 6.44 basis points, respectively. Beginning in January 2000, BIF- and
SAIF-insured institutions will share the FICO interest costs at equal rates
currently estimated 2.43 basis points.
Under the FDICIA, insurance of deposits may be terminated by the FDIC upon
a finding that the institution has engaged in unsafe and unsound practices, is
in an unsafe or unsound condition to continue operations, or has violated any
applicable law, regulation, rule, order, or condition imposed by the FDIC.
63
<PAGE> 65
PROPOSED LEGISLATION AND REGULATORY ACTION
New regulations and statutes are regularly proposed that contain
wide-ranging proposals for altering the structures, regulations and competitive
relationships of the nation's financial institutions. It cannot be predicted
whether or what form any proposed regulation or statute will be adopted or the
extent to which the business of the Company may be affected by such regulation
or statute.
LEGAL MATTERS
The validity of the shares of Common Stock offered hereby will be passed
upon for the Company by Powell, Goldstein, Frazer & Murphy LLP, Atlanta,
Georgia. Troutman Sanders LLP, Atlanta, Georgia is acting as counsel for the
Underwriter in connection with certain legal matters relating to the shares of
Common Stock offered hereby.
EXPERTS
The audited financial statements of the Company at September 30, 1998, and
for the period from August 19, 1998 (inception) until September 30, 1998, set
forth herein have been so included in reliance on the report of Mauldin &
Jenkins, LLC, independent certified public accountants, given on the authority
of that firm as experts in accounting and auditing.
REPORTS TO SHAREHOLDERS
Upon the effective date of the Registration Statement on Form SB-2
(together with all amendments to it, called the "Registration Statement") with
respect to the shares of Common Stock offered by the Registration Statement, the
Company will be subject to the reporting requirements of the Securities Exchange
Act of 1934, as amended, which include requirements to file annual reports on
Form 10-KSB and quarterly reports on Form 10-QSB with the Securities and
Exchange Commission (the "Commission"). This reporting obligation will exist for
at least one year and will continue for fiscal years thereafter, except that
such reporting obligations may be suspended for any subsequent fiscal year if at
the beginning of such year the Common Stock of the Company is held of record by
less than 300 persons.
At any time that the Company is not a reporting company, the Company will
furnish its shareholders with annual reports containing audited financial
information for each fiscal year on or before the date of the annual meeting of
shareholders as required by Rule 80-6-1-.05 of the Georgia Department of Banking
and Finance (the "Department of Banking"). The Company's fiscal year ends on
December 31. Additionally, the Company will also furnish such other reports as
it may determine to be appropriate or as otherwise may be required by law.
ADDITIONAL INFORMATION
The Company has filed with the Commission the Registration Statement under
the Securities Act, with respect to the shares of Common Stock offered by the
Registration Statement. 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
64
<PAGE> 66
Common Stock, reference is made to the Registration Statement and the exhibits
to it. The Registration Statement may be examined and copied at the public
reference facilities maintained by the Commission at Room 1024, 450 Fifth
Street, N.W., Judiciary Plaza, Washington, D.C. 20549 and at the regional
offices of the Commission located at Citicorp Center, 500 West Madison Street,
Suite 1400, Chicago, Illinois 60661-2511 and Seven World Trade Center, 13th
Floor, New York, New York 10048. 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., Judiciary Plaza, Washington, DC
20549. The Commission also maintains a Web site (http://www.sec.gov) that
contains registration statements, 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 FDIC, the Federal Reserve, the Department of Banking and the OCC. Such
applications and the information they contain are not incorporated into this
Prospectus. 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 FDIC, the Federal
Reserve, the Department of Banking and the OCC, is inconsistent with information
presented in this Prospectus or provides additional information, such other
information is superseded by the information presented in this Prospectus and
should not be relied on. Projections appearing in the applications are based on
assumptions that the organizers believe are reasonable, but as to which no
assurances can be made. The Company specifically disaffirms those projections
for purposes of this Prospectus and cautions prospective investors against
placing reliance on them for purposes of making an investment decision.
65
<PAGE> 67
INDEX TO FINANCIAL STATEMENTS
<TABLE>
<S> <C>
Independent Auditors' Report................................ F-2
Balance Sheet September 30, 1998............................ F-3
Statement of Loss and Accumulated Deficit Period from August
19, 1998, Date of Inception, to September 30, 1998........ F-4
Statement of Shareholders' Deficit Period from August 19,
1998, Date of Inception, to September 30, 1998............ F-5
Statement of Cash Flows Period from August 19, 1998, Date of
Inception, to September 30, 1998.......................... F-6
Notes to Financial Statements............................... F-7
</TABLE>
F-1
<PAGE> 68
INDEPENDENT AUDITOR'S REPORT
To the Board of Directors and Stockholders
Community Capital Bancshares, Inc.
Albany, Georgia
We have audited the accompanying balance sheet of Community Capital
Bancshares, Inc., a development stage company, as of September 30, 1998, and the
related statements of loss and accumulated deficit, stockholders' deficit and
cash flows for the period from August 19, 1998, date of inception, to September
30, 1998. 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 audits 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 Community Capital
Bancshares, Inc. as of September 30, 1998, and the results of its operations and
its cash flows for the period from August 19, 1998, date of inception, to
September 30, 1998, in conformity with generally accepted accounting principles.
Mauldin & Jenkins, LLC
Albany, Georgia
November 4, 1998
F-2
<PAGE> 69
COMMUNITY CAPITAL BANCSHARES, INC.
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEET
SEPTEMBER 30, 1998
<TABLE>
<S> <C>
ASSETS
Cash in banks............................................... $ 13,351
Property (Note 2)........................................... 38,934
Deferred stock offering costs (Note 1)...................... 17,400
--------
$ 69,685
========
LIABILITIES AND SHAREHOLDERS' DEFICIT
LIABILITIES
Due to organizers (Note 3).................................. $ 80,000
Note payable to bank (Note 4)............................... 20,000
Note payable to finance company (Note 5).................... 28,107
Deferred compensation....................................... 8,332
Other liabilities........................................... 2,082
--------
Total liabilities...................................... 138,521
--------
COMMITMENTS (NOTES 2 AND 6)
SHAREHOLDERS' DEFICIT
Preferred Stock, par value not stated; 2,000,000 shares
authorized; no shares issued.............................. --
Common Stock, $1.00 par value; 10,000,000 shares authorized;
one share issued and outstanding.......................... 1
Additional paid-in capital.................................. 1,912
Deficit accumulated during the development stage............ (70,749)
--------
Total shareholders' deficit............................ (68,836)
--------
$ 69,685
========
</TABLE>
See Notes to Financial Statements.
F-3
<PAGE> 70
COMMUNITY CAPITAL BANCSHARES, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF LOSS AND ACCUMULATED DEFICIT
PERIOD FROM AUGUST 19, 1998, DATE OF INCEPTION,
TO SEPTEMBER 30, 1998
<TABLE>
<S> <C>
INCOME...................................................... $ --
-------
EXPENSES
Management salaries......................................... 18,332
Organization costs.......................................... 45,000
Pre-opening expenses........................................ 5,016
Interest.................................................... 1,912
Automobile.................................................. 151
Postage and telephone....................................... 338
-------
70,749
-------
NET LOSS FOR THE PERIOD AND ACCUMULATED DEFICIT............. $70,749
=======
</TABLE>
See Notes to Financial Statements.
F-4
<PAGE> 71
COMMUNITY CAPITAL BANCSHARES, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF SHAREHOLDERS' DEFICIT
PERIOD FROM AUGUST 19, 1998, DATE OF INCEPTION,
TO SEPTEMBER 30, 1998
<TABLE>
<CAPTION>
DEFICIT
ACCUMULATED
COMMON STOCK ADDITIONAL DURING THE TOTAL
------------------ PAID-IN DEVELOPMENT SHAREHOLDERS'
SHARES PAR VALUE CAPITAL STAGE DEFICIT
------ --------- ---------- ----------- -------------
<S> <C> <C> <C> <C> <C>
Issue of Common Stock....... 1 $ 1 $ -- $ -- $ 1
Imputed interest on advances
from organizers credited
to capital surplus........ -- -- 1,912 -- 1,912
Net loss for the period
August 19, 1998, date of
inception, to September
30, 1998.................. -- -- -- (70,749) (70,749)
-- --------- ------ -------- --------
Balance, September 30,
1998...................... 1 $ 1 $1,912 $(70,749) $(68,836)
== ========= ====== ======== ========
</TABLE>
See Notes to Financial Statements.
F-5
<PAGE> 72
COMMUNITY CAPITAL BANCSHARES, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF CASH FLOWS
PERIOD FROM AUGUST 19, 1998, DATE OF INCEPTION,
TO SEPTEMBER 30, 1998
<TABLE>
<S> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss.................................................... $(70,749)
Adjustments to reconcile net loss to net cash used in
operating activities:
Imputed interest on advances from organizers.............. 1,912
Deferred compensation..................................... 8,332
Increase in accrued liabilities........................... 2,082
--------
Net cash used in operating activities.................. (58,423)
--------
CASH FLOWS FROM INVESTING ACTIVITIES
Payment for option on property.............................. (10,000)
--------
Net cash used in investing activities.................. (10,000)
--------
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from advances by organizers........................ 80,000
Proceeds from advances under line of credit................. 20,000
Payment on instalment loan.................................. (827)
Proceeds from issuance of Common Stock...................... 1
Stock offering costs........................................ (17,400)
--------
Net cash provided by financing activities.............. 81,774
--------
Net increase in cash........................................ 13,351
Cash at beginning of period................................. --
--------
Cash at end of period....................................... $ 13,351
========
NONCASH TRANSACTION
Note to finance company incurred for purchase of
automobile................................................ $ 28,934
========
</TABLE>
See Notes to Financial Statements.
F-6
<PAGE> 73
COMMUNITY CAPITAL BANCSHARES, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
NOTE 1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
ORGANIZATION
Community Capital Bancshares, Inc. (the "Company") was organized on August
19,1998, to operate as a bank holding company pursuant to the Federal Bank
Holding Company Act of 1956, as amended, and to purchase 100% of the issued and
outstanding capital stock of Albany Bank & Trust N.A. (the "Bank"), an
association to be organized under the laws of the United States, which will
conduct a general banking business in Albany, Georgia. The organizers have filed
an application with the Office of the Comptroller of the Currency (the "OCC") to
charter the proposed bank. The Company has filed an application to become a bank
holding company with the Board of Governors of the Federal Reserve System (the
"Federal Reserve") and the Georgia Department of Banking and Finance (the
"DBF"). Upon obtaining regulatory approval, the Company will be a registered
bank holding company subject to regulation by the Federal Reserve and the DBF.
Activities since inception have consisted of the organizers of the Company
and the Bank engaging in organizational and preopening activities necessary to
obtain regulatory approvals and to prepare to commence business as a financial
institution.
SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The financial statements have been prepared on the accrual basis in
accordance with generally accepted accounting principles.
Stock Offering Costs
Stock offering costs incurred through September 30, 1998 represent fees
paid to attorneys. Additional stock offering costs are expected to be incurred.
Such costs will be charged to additional paid-in capital upon completion of the
stock offering.
Income Taxes
The Company will be subject to Federal and state income taxes when taxable
income is generated. No income taxes have been accrued because of operating
losses incurred during the pre-opening period.
Fiscal Year
The Company will adopt a calendar year for both financial reporting and tax
reporting purposes.
NOTE 2. PROPERTY
The organizers hold an option to purchase the proposed site for the
location of the Bank for an aggregate purchase price of $315,000. The option
expires on or before
F-7
<PAGE> 74
COMMUNITY CAPITAL BANCSHARES, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS, CONTINUED
December 2, 1998. It is anticipated that the cost of construction of the
building will be approximately $1,300,000, and that the total cost for the
purchase of the site, construction of the building and furniture, fixtures and
equipment will be approximately $1,865,000. At September 30, 1998, property
includes $10,000 paid as a deposit on the property and $28,934 for the purchase
of an automobile used by management of the Company.
NOTE 3. DUE TO ORGANIZERS
The organizers have advanced $80,000 to the Company to pay for
organizational expenses and other expenditures. The advances are noninterest
bearing. In the event that the requisite approvals are obtained and the proposed
stock offering is successfully completed, a portion of the proceeds of the
offering will be used to repay the organizers' advances, without interest, to
the extent such repayment is allowed by the OCC and other regulatory
authorities. To the extent that repayment is not allowed by regulatory
authorities, such advances, if any, will be considered as contributed capital.
Interest on advances from organizers has been imputed at the prime rate
(currently 8.5%), at which rate the Bank has received financing from a financial
institution under a line of credit. (See Note 4).
NOTE 4. NOTE PAYABLE TO BANK
The Company has obtained a revolving line of credit from The Bankers Bank
for $750,000 with interest payable at the prime rate. The note is due on October
6, 1999 in one payment of the outstanding principal balance plus all unpaid
accrued interest. The Company will pay regular quarterly interest payments of
unpaid accrued interest beginning January 15, 1999, with all subsequent interest
payments due on the same day of each quarter thereafter. The line of credit is
guaranteed by the organizers of the Company. The effective prime rate of
interest was 8.5% at September 30, 1998. As of September 30, 1998, the principal
balance under this line of credit amounted to $20,000.
NOTE 5. NOTE PAYABLE TO FINANCE COMPANY
The Company has obtained financing from a finance company for the purchase
of an automobile with a total cost of $28,934. Finance charges of $855 have been
included in the note at an annual rate of 1.917%. The loan is payable in 36
monthly payments of $827 each.
NOTE 6. EMPLOYMENT AGREEMENTS
Effective August 1, 1998 and October 1, 1998, the Company and the Bank
entered into separate agreements with Robert E. Lee and David C. Guillebeau,
respectively, for the employment of Mr. Lee as President of the Company and
President and Chief Executive Officer of the Bank and for the employment of Mr.
Guillebeau as Executive Vice President of the Company and Executive Vice
President and Senior Loan Officer of the Bank. Under the terms of the employment
agreements, Mr. Lee will receive a salary of $110,000 per year and Mr.
Guillebeau will receive a salary of $80,000 per year. Each
F-8
<PAGE> 75
COMMUNITY CAPITAL BANCSHARES, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS, CONTINUED
employee agreement provides that at the end of each year of operation, the
employee will be entitled to receive a cash bonus, to be awarded by the
Compensation Committee based on earnings of the Bank. Additionally, the
employment agreements provide that the Company will grant Mr. Lee an incentive
stock option to purchase a number of shares of Common Stock equal to 5% of the
shares of Common Stock sold in the Company's offering and that the Company will
grant Mr. Guillebeau an incentive stock option to purchase a number of shares of
Common Stock equal to 2% of the shares of Common Stock sold in the offering. The
options will vest ratable over five years at 20% per year with the first
increment vesting on the one-year anniversary of the date of the Prospectus
accompanying the Company's offering. The options will have an exercise price of
$10.00 per share. The Company will also provide an automobile to Mr. Lee.
The initial term of Mr. Lee's employment commenced on August 1, l998 and
will continue for a period of five years. The initial term of Mr. Guillebeau's
employment commenced on October 1, 1998 and will continue for a period of three
years. At the end of the initial term of each employment agreement and at the
end of each succeeding twelve-month period, each employment agreement will be
extended for a successive twelve-month period unless either of the parties to
each of the employment agreements gives notice to the other party to the
employment agreement of its intent not to extend the employment agreement. In
the event the employee dies or the Company or the Bank abandons its
organizational efforts or certain terms and conditions are not met by December
31, 1999, neither the Company nor the Bank shall have any further obligations
under the employment agreements. Employment may be terminated (1) at the
election of the Bank and the Company for cause; (2) at the election of the
employee if the Bank or the Company breach any material provision of the
employment agreement or if there is a material diminution in the employee's
powers, responsibilities or duties; or (3) upon the employee's death or
disability. If employment is terminated by the Company without cause or
terminated by the employee with cause, the Company will be obligated to pay
specified termination benefits to the employee.
NOTE 7. YEAR 2000 ISSUES
The Company and the Bank will rely heavily upon computers for the conduct
of their business and for their information processing systems. Industry experts
have expressed concern that there may be widespread computer malfunctions on
January 1, 2000 if computers are unable to read the new year. The Company and
the Bank will generally rely on software and hardware developed by independent
third parties to provide the information systems used by them. The Company is
currently negotiating with vendors and intends to seek assurances from any
selected third party hardware or software systems providers that any products
provided by them will be Year 2000 compliant.
The Company intends to purchase information systems, including hardware and
software products, only upon receipt of a certification that such products will
be adequately programmed to address the Year 2000 issue. Based on information
currently available, management believes that it will not incur significant
costs in connection with the
F-9
<PAGE> 76
COMMUNITY CAPITAL BANCSHARES, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS, CONTINUED
Year 2000 issue. Nevertheless, some of the hardware and software products that
either the Company or the Bank acquires may not be Year 2000 compliant, and one
cannot predict with certainty the costs the Company or the Bank will incur to
respond to any Year 2000 issue.
NOTE 8. COMMON STOCK OFFERING
The Company plans to file a Registration Statement on Form SB-2 with the
Securities and Exchange Commission offering for sale 1,000,000 shares of the
Company's $1.00 par value common stock at a price of $10.00 per share. The
organizers intend to purchase an aggregate of 275,000 shares of Common Stock in
the offering at a price of $10.00 per share.
In recognition of the efforts made and financial risks undertaken by the
organizers in organizing the Company and the Bank, the organizers will be issued
warrants to purchase additional Common Stock at a ratio of one warrant for each
share of Common Stock purchased in the offering, up to a limit of 15,000
warrants for any one organizer. As a result, a maximum of 225,000 warrants may
be issued to the organizers. The issuance of these warrants is subject to
regulatory approval. The warrants will vest in 20% annual increments beginning
on the one-year anniversary of the date of the Prospectus accompanying the
offering. Vested warrants will be exercisable for the ten-year period following
the date of the Prospectus or for 90 days after a warrant holder ceases to be a
director, whichever is shorter. Each warrant will be exercisable at a price of
$10.00 per share subject to adjustment for stock splits, recapitalization, or
other similar events.
F-10
<PAGE> 77
- ------------------------------------------------------
- ------------------------------------------------------
PROSPECTIVE INVESTORS MAY RELY ONLY ON THE INFORMATION CONTAINED IN THIS
PROSPECTUS. NO ONE HAS AUTHORIZED ANYONE TO PROVIDE PROSPECTIVE INVESTORS WITH
INFORMATION DIFFERENT FROM THAT CONTAINED IN THIS PROSPECTUS. THIS PROSPECTUS IS
NOT AN OFFER TO SELL NOR IS IT SEEKING AN OFFER TO BUY THESE SECURITIES IN ANY
JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED. THE INFORMATION CONTAINED
IN THIS PROSPECTUS IS CORRECT ONLY AS OF THE DATE OF THIS PROSPECTUS, REGARDLESS
OF THE TIME OF THE DELIVERY OF THIS PROSPECTUS OR ANY SALE OF THESE SECURITIES.
---------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Summary.............................
Risk Factors........................
Cautionary Statement About Forward-
Looking Statements................
Use of Proceeds.....................
Capitalization......................
Dividends...........................
Management's Discussion and Analysis
of Financial Condition and Plan of
Operations........................
Proposed Business of the Company and
the Bank..........................
Management..........................
Executive Compensation..............
Certain Relationships and Related
Transactions......................
Description of Capital Stock of the
Company...........................
Certain Provisions of the Articles
of Incorporation and Bylaws.......
Shares Eligible for Future Sale.....
Underwriting........................
Supervision and Regulation..........
Legal Matters.......................
Experts.............................
Reports to Shareholders.............
Additional Information..............
Index to Financial Statements....... F-1
</TABLE>
UNTIL 1999 (40 DAYS AFTER THE DATE OF THIS PROSPECTUS), ALL DEALERS
THAT BUY, SELL OR TRADE THE COMMON STOCK, WHETHER OR NOT PARTICIPATING IN THIS
OFFERING, MAY BE REQUIRED TO DELIVER A PROSPECTUS. THIS IS IN ADDITION TO THE
DEALERS' OBLIGATION TO DELIVER A PROSPECTUS WHEN ACTING AS UNDERWRITERS AND WITH
RESPECT TO THEIR UNSOLD ALLOTMENTS OR SUBSCRIPTIONS.
- ------------------------------------------------------
- ------------------------------------------------------
- ------------------------------------------------------
- ------------------------------------------------------
1,000,000 SHARES
COMMUNITY CAPITAL
BANCSHARES, INC.
A PROPOSED BANK HOLDING COMPANY
FOR
ALBANY BANK & TRUST N.A.
(IN ORGANIZATION)
COMMON STOCK
---------------------
PROSPECTUS
---------------------
INTERSTATE/JOHNSON LANE
CORPORATION
, 1999
- ------------------------------------------------------
- ------------------------------------------------------
<PAGE> 78
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 24. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Consistent with the applicable provisions of the laws of Georgia, the
Registrant's Bylaws provide that the Registrant shall have the power to
indemnify its directors, officers, employees and agents against expenses
(including attorneys' fees) and liabilities arising from actual or threatened
actions, suits or proceedings, whether or not settled, to which they become
subject by reason of having served in such role if such director, officer,
employee or agent acted in good faith and in a manner he or she reasonably
believed to be in or not opposed to the best interests of the Registrant and,
with respect to a criminal action or proceeding, had no reasonable cause to
believe his or her conduct was unlawful. Advances against expenses shall be made
so long as the person seeking indemnification agrees to refund the advances if
it is ultimately determined that he or she is not entitled to indemnification. A
determination of whether indemnification of a director, officer, employee or
agent is proper because he or she met the applicable standard of conduct shall
be made (1) by the Board of Directors of the Registrant, (2) in certain
circumstances, by independent legal counsel in a written opinion or (3) by the
affirmative vote of a majority of the shares entitled to vote.
In addition, Article 11 of the Registrant's Articles of Incorporation,
subject to certain exceptions, eliminates the potential personal liability of a
director for monetary damages to the Registrant and to the shareholders of the
Registrant for breach of a duty as a director. There is no elimination of
liability for (1) a breach of duty involving appropriation of a business
opportunity of the Registrant, (2) an act or omission involving intentional
misconduct or a knowing violation of law, (3) a transaction from which the
director derives an improper material tangible personal benefit or (4) as to any
payment of a dividend or approval of a stock repurchase that is illegal under
the Georgia Business Corporation Code. The Articles of Incorporation do not
eliminate or limit the right of the Registrant or its shareholders to seek
injunctive or other equitable relief not involving monetary damages.
ITEM 25. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
Estimated expenses, other than underwriting discounts and commissions, of
the sale of the Registrant's Common Stock, $1.00 par value, are as follows:
<TABLE>
<S> <C>
Securities and Exchange Commission Registration Fee......... $ 3,197
National Association of Securities Dealers, Inc. Filing
Fee*......................................................
Blue Sky Fees and Expenses*.................................
Legal Fees and Expenses*....................................
Accounting Fees and Expenses*...............................
Printing and Engraving Expenses*............................
Mail and Distribution*......................................
Miscellaneous*..............................................
--------
Total............................................. $
========
</TABLE>
- -------------------------
* To be furnished by amendment.
II-1
<PAGE> 79
ITEM 26. RECENT SALES OF UNREGISTERED SECURITIES.
On August 19, 1998, the Registrant issued to Robert E. Lee, in a private
placement, one share of the Registrant's Common Stock, $1.00 par value per
share, for an aggregate price of $1.00 in connection with the organization of
the Company. The sale to Mr. Lee was exempt from registration under the
Securities Act pursuant to Section 4(2) of the Act because it was a transaction
by an issuer that did not involve a public offering.
ITEM 27. EXHIBITS.
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
<C> <S>
1.1* Form of Underwriting Agreement
3.1 Articles of Incorporation
3.2 Bylaws
4.1* Specimen Common Stock Certificate
4.2 See Exhibits 3.1 and 3.2 for provisions of the Articles of
Incorporation and Bylaws defining rights of holders of the
Common Stock
5.1* Legal Opinion of Powell, Goldstein, Frazer & Murphy LLP
10.1* Purchase Agreement for main office property dated November
20, 1998
10.2* Lease for modular facility dated , 1998
10.3 Amended and Restated Employment Agreement dated August 19,
1998, among Albany Bank & Trust, N.A. (In Organization),
Community Capital Bancshares, Inc. and Robert E. Lee
10.4 Employment Agreement, dated October 1, 1998, among Albany
Bank & Trust, N.A. (In Organization), Community Capital
Bancshares, Inc. and David C. Guillebeau, as Amended
November 9, 1998.
10.5 Form of Community Capital Bancshares, Inc. Organizers'
Warrant Agreement
10.6 Community Capital Bancshares, Inc. 1998 Stock Incentive Plan
10.7 Form of Community Capital Bancshares, Inc. Incentive Stock
Option Award
21.1 List of Subsidiaries
23.1 Consent of Mauldin & Jenkins, LLC
23.2* Consent of Powell, Goldstein, Frazer & Murphy LLP (contained
in Exhibit 5.1)
24.1 Power of Attorney (Reference is made to page II-5)
27.1 Financial Data Schedule (for SEC use only)
</TABLE>
- -------------------------
* To be filed by amendment.
ITEM 28. UNDERTAKINGS.
The Registrant hereby undertakes to provide to the underwriter at the
closing specified in the underwriting agreement certificates in such
denominations and registered in such names as required by the underwriter to
permit prompt delivery to each purchaser.
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the
Registrant pursuant to foregoing provisions, or otherwise, the Registrant has
been advised that in the opinion of
II-2
<PAGE> 80
the Securities and Exchange Commission such indemnification is against public
policy as expressed in the Securities Act and is, therefore, unenforceable. In
the event that a claim for indemnification against such liabilities (other than
the payment by the Registrant of expenses incurred or paid by a director,
officer or controlling person of the Registrant in the successful defense of any
action, suit or proceeding) is asserted by such director, officer or controlling
person in connection with the securities being registered, the Registrant will,
unless in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of such issue.
The undersigned Registrant hereby undertakes as follows:
(a)(1) To file, during any period in which it offers or sells securities, a
post-effective amendment to this Registration Statement to:
(i) Include any prospectus required by Section 10(a)(3) of the
Securities Act;
(ii) Reflect in the prospectus any facts or events which, individually
or together, represent a fundamental change in the information set forth
in the Registration Statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the estimated
maximum offering range may be reflected in the form of prospectus filed
with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than a 20% change in the
maximum aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective Registration Statement;
(iii) 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 being registered that remain unsold at the end of the
offering.
The Registrant hereby undertakes as follows:
(b)(1) For determining any liability under the Securities Act, to treat the
information omitted from the form of prospectus filed as part of this
Registration Statement in reliance upon Rule 430A and contained in a form
of prospectus filed by the Registrant under Rule 424(b)(1), or (4) or
497(h) under the Securities Act as part of this Registration Statement as
of the time the Commission declared it effective.
(2) For determining any liability under the Securities Act, to treat
each post-effective amendment that contains a form of prospectus as a new
registration statement for the securities offered in the Registration
Statement, and that offering of the securities at that time as the initial
bona fide offering of those securities.
II-3
<PAGE> 81
SIGNATURES
In accordance with the requirements of the Securities Act of 1933, as
amended the Registrant certifies that it has reasonable grounds to believe that
it meets all of the requirements for filing on Form SB-2 and authorized this
Registration Statement to be signed on its behalf by the undersigned in the city
of Albany, State of Georgia, on December 3, 1998.
COMMUNITY CAPITAL BANCSHARES, INC.
By: /s/ ROBERT E. LEE
----------------------------------------
Robert E. Lee
President
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints jointly and severally, Robert E. Lee and
David C. Guillebeau, and each of them, their respective attorney-in-fact, each
with the power of substitution, for him or her in any and all capacities, to
sign any and all amendments to this Registration Statement (including
post-effective amendments) and any Registration Statement filed pursuant to Rule
462(b) of the Securities Act of 1933, as amended, and to file the same, with
exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, hereby ratifying and confirming all that
each of said attorneys-in-fact, or their respective substitute or substitutes,
may do or cause to be done by virtue hereof.
In accordance with the requirements of the Securities Act of 1933, as
amended, this Registration Statement has been signed by the following persons in
the capacities and on the dates stated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <S> <C>
/s/ CHARLES M. JONES, III Chairman and December 3, 1998
- ------------------------------------------ Chief Executive Officer
Charles M. Jones, III
/s/ VAN CISE KNOWLES Director December 3, 1998
- ------------------------------------------
Van Cise Knowles
/s/ ROBERT E. LEE President and Director December 3, 1998
- ------------------------------------------ (principal executive,
Robert E. Lee financial and accounting
officer)
/s/ CORINNE C. MARTIN Director December 3, 1998
- ------------------------------------------
Corinne C. Martin
</TABLE>
II-4
<PAGE> 82
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <S> <C>
/s/ WILLIAM F. MCAFEE Director December 3, 1998
- ------------------------------------------
William F. McAfee
/s/ C. RICHARD LANGLEY Director December 3, 1998
- ------------------------------------------
C. Richard Langley
/s/ BENNETT D. COTTEN, JR. Director December 3, 1998
- ------------------------------------------
Bennett D. Cotten, Jr.
/s/ JANE ANNE D. SULLIVAN Director December 3, 1998
- ------------------------------------------
Jane Anne D. Sullivan
/s/ JOHN P. VENTULETT, JR. Director December 3, 1998
- ------------------------------------------
John P. Ventulett, Jr.
/s/ JAMES D. WOODS Director December 3, 1998
- ------------------------------------------
James D. Woods
/s/ ROBERT M. BEAUCHAMP Director December 3, 1998
- ------------------------------------------
Robert M. Beauchamp
/s/ GLENN A. DOWLING Director December 3, 1998
- ------------------------------------------
Glenn A. Dowling
/s/ MARY HELEN DYKES Secretary and Director December 3, 1998
- ------------------------------------------
Mary Helen Dykes
/s/ MARK M. SHOEMAKER Director December 3, 1998
- ------------------------------------------
Mark M. Shoemaker
/s/ LAWRENCE B. WILLSON Director December 3, 1998
- ------------------------------------------
Lawrence B. Willson
</TABLE>
II-5
<PAGE> 83
INDEX TO EXHIBITS
<TABLE>
<C> <S>
1.1* Form of Underwriting Agreement
3.1 Articles of Incorporation
3.2 Bylaws
4.1* Specimen Common Stock Certificate
4.2 See Exhibits 3.1 and 3.2 for provisions of the Articles of
Incorporation and Bylaws defining rights of holders of the
Common Stock
5.1* Legal Opinion of Powell Goldstein Frazer & Murphy LLP
10.1* Purchase Agreement for main office property dated November
20, 1998
10.2* Lease for modular facility dated , 1998
10.3 Amended and Restated Employment Agreement, dated August 19,
1998, among Albany Bank & Trust, N.A. (In Organization),
Community Capital Bancshares, Inc. and Robert E. Lee
10.4 Employment Agreement, dated October 1, 1998, among Albany
Bank & Trust, N.A. (In Organization), Community Capital
Bancshares, Inc. and David C. Guillebeau, as Amended
November 9, 1998.
10.5 Form of Community Capital Bancshares, Inc. Organizers'
Warrant Agreement
10.6 Community Capital Bancshares, Inc. 1998 Stock Incentive Plan
10.7 Form of Community Capital Bancshares, Inc. Incentive Stock
Option Agreement
21.1 List of Subsidiaries
23.1 Consent of Mauldin & Jenkins, LLC
23.2* Consent of Powell, Goldstein, Frazer & Murphy LLP (contained
in Exhibit 5.1)
24.1 Power of Attorney (Reference is made to page II-3)
27.1 Financial Data Schedule (for SEC use only)
</TABLE>
- -------------------------
* To be filed by amendment.
<PAGE> 1
EXHIBIT 3.1
ARTICLES OF INCORPORATION
OF
COMMUNITY CAPITAL BANCSHARES, INC.
1.
The name of the Corporation is: "Community Capital Bancshares, Inc.."
2.
The Corporation is organized pursuant to the provisions of the
Georgia Business Corporation Code.
3.
The object of the Corporation is pecuniary gain and profit, and the
Corporation is formed for the purpose of becoming and operating as a bank
holding company and engaging in such related and permissible activities in
connection therewith as the Board of Directors may from time to time specify by
resolution.
4.
(a) The Corporation shall have the authority to issue ten million
(10,000,000) shares of common stock (the "Common Stock"), $1.00 par value, and
two million (2,000,000) shares of preferred stock (the "Preferred Stock").
(b) The Board of Directors of the Corporation is authorized,
subject to limitations prescribed by law and the provisions of this Article, to
provide for the issuance of the shares of Preferred Stock in series, and by
filing a certificate pursuant to the applicable law of the State of Georgia to
establish from time to time the number of shares to be included in each such
series, and to
<PAGE> 2
fix the designation, powers, preferences, and relative rights of
the shares of each such series and the qualifications, or restrictions thereof.
The authority of the Board of Directors with respect to each series shall
include, but not be limited to, determination of the following:
(i) The number of shares constituting that series and the
distinctive designation of that series;
(ii) The dividend rate on the shares of that series, whether
dividends shall be cumulative, and, if so, from which date
or dates, and the relative rights of priority, if any, of
payments of dividends on shares of that series;
(iii) Whether that series shall have voting rights, in addition
to the voting rights provided by law, and, if so, the terms
of such voting rights;
(iv) Whether that series shall have conversion privileges, and,
if so, the terms and conditions of such conversion,
including provisions for adjustment of the conversion rate
in such events as the Board of Directors shall determine;
(v) Whether or not the shares of that series shall be
redeemable, and, if so, the terms and conditions of such
redemption, including the date or dates upon or after which
they shall be redeemable, and the amount per share payable
in case of redemption, which amount may vary under
different conditions and at different redemption rates;
(vi) Whether that series shall have a sinking fund for the
redemption or purchase of shares of that series, and, if
so, the terms and amount of such sinking fund;
-2-
<PAGE> 3
(vii) The rights of the shares of that series in the event of
voluntary or involuntary liquidation, dissolution or
winding-up of the Corporation, and the relative rights of
priority, if any, of payment of shares of that series; and
(viii) Any other relative rights, preferences and limitations of
that series.
5.
The initial registered office of the Corporation shall be at 430 Tift
Avenue, Albany, Georgia 31701. The initial registered agent of the Corporation
at such address shall be Robert E. Lee.
6.
The mailing address of the initial principal office of the corporation
is P.O. Box 46, Albany, Georgia 31702.
7.
(a) The Board of Directors shall be divided into three (3)
classes, Class I, Class II and Class III, which shall be as nearly equal in
number as possible. Each director in Class I shall be elected to an initial
term of one (1) year, each director in Class II shall be elected to an initial
term of two (2) years, each director in Class III shall be elected to an
initial term of three (3) years, and each director shall serve until the
election and qualification of his or her successor or until his or her earlier
resignation, death or removal from office. Upon the expiration of the initial
terms of office for each Class of directors, the directors of each Class shall
be elected for terms of three (3) years, to
-3-
<PAGE> 4
serve until the election and qualification of their successors or until their
earlier resignation, death or removal from office.
(b) Unless two-thirds (2/3) of the directors then in office shall
approve the proposed change, this Article 7 may be amended or rescinded only by
the affirmative vote of the holders of at least two-thirds (2/3) of the issued
and outstanding shares of the Corporation entitled to vote in an election of
directors, at any regular or special meeting of the shareholders, and notice of
the proposed change must be contained in the notice of the meeting.
8.
(a) Except as provided in paragraph (b) of this Article 8, the
Board of Directors shall have the right to adopt, amend or repeal the bylaws of
the Corporation by the affirmative vote of a majority of all directors then in
office, and the shareholders shall have such right by the affirmative vote of a
majority of the issued and outstanding shares of the Corporation entitled to
vote in an election of directors.
(b) Notwithstanding paragraph (a) of this Article 8, any amendment
of the bylaws of the Corporation changing the number of directors shall require
the affirmative vote of two-thirds (2/3) of all directors then in office or the
affirmative vote of the holders of two-thirds (2/3) of the issued and
outstanding shares of the Corporation entitled to vote in an election of
directors, at any regular or special meeting of the shareholders, and notice of
the proposed change must be contained in the notice of the meeting.
-4-
<PAGE> 5
9.
(a) At any shareholders' meeting with respect to which notice of
such purpose has been given, the entire Board of Directors or any individual
director may be removed without cause only by the affirmative vote of the
holders of at least two-thirds (2/3) of the issued and outstanding shares of
the Corporation entitled to vote in an election of directors.
(b) At any shareholders' meeting with respect to which notice of
such purpose has been given, the entire Board of Directors or any individual
director may be removed with cause only by the affirmative vote of the holders
of at least a majority of the issued and outstanding shares of the Corporation
entitled to vote in an election of directors.
(c) For purposes of this Article 9, a director of the Corporation
may be removed for cause if (i) the director has been convicted of a felony;
(ii) any bank regulatory authority having jurisdiction over the Corporation
requests or demands the removal; or (iii) at least two-thirds (2/3) of the
directors of the Corporation then in office, excluding the director to be
removed, determine that the director's conduct has been inimical to the best
interests of the Corporation.
(d) Unless two-thirds (2/3) of the directors then in office shall
approve the proposed change, this Article 9 may be amended or rescinded only by
the affirmative vote of the holders of at least two-thirds (2/3) of the issued
and outstanding shares of the Corporation entitled to vote in an election of
directors, at any regular or special meeting of the shareholders, and notice of
the proposed change must be contained in the notice of the meeting.
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<PAGE> 6
10.
The initial Board of Directors of the Corporation shall consist of
fifteen (15) members who shall be and whose addresses are:
Robert Beauchamp 757 Highway 32W
Leesburg, Georgia 31763
Bennett Cotten 2608 Kenilworth Drive
Albany, Georgia 31707
Glenn Dowling 880 Tallahassee
Albany, Georgia 31707
Mary Helen Dykes 1618 N. Valencia Drive
Albany, Georgia 31707
Charles M. Jones III 907 Third Avenue
Albany, Georgia 31707
Van C. Knowles 3503 Old Dawson Road
Albany, Georgia 31707
C. Richard Langley 2811 W. Doublegate Drive
Albany, Georgia 31707
Robert E. Lee 5101 Old Dawson Road
Albany, Georgia 31707
Corinne Martin 2344 Winchester Drive
Albany, Georgia 31707
W.F. McAfee III 1205 Pinecrest
Albany, Georgia 31707
Mark Shoemaker 920 Third Avenue
Albany, Georgia 31701
Jane Anne Sullivan 3707 Hidden Hill Court
Albany, Georgia 31707
John P. Ventulette, Jr. 2504 Cooleewahee Cove Court
Albany, Georgia 31707
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<PAGE> 7
Lawrence B. Willson 627 5th Avenue
Albany, Georgia 31707
James D. Woods 3402 Wexford Road
Albany, Georgia 31707
11.
(a) A director of the Corporation shall not be personally liable
to the Corporation or its shareholders for monetary damages, for breach of any
duty as a director, except for liability for:
(i) any appropriation, in violation of his or her duties,
of any business opportunity of the Corporation;
(ii) acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of
law;
(iii) the types of liability set forth in Section 14-2-832
of the Georgia Business Corporation Code dealing
with unlawful distributions of corporate assets to
shareholders; or
(iv) any transaction from which the director derived an
improper material tangible personal benefit.
(b) Any repeal or modification of this Article by the shareholders
of the Corporation shall be prospective only and shall not adversely affect any
right or protection of a director of the Corporation existing at the time of
such repeal or modification.
(c) Unless two-thirds (2/3) of the directors then in office shall
approve the proposed change, this Article 11 may be amended or rescinded only
by the affirmative vote of the holders of at least two-thirds (2/3) of the
issued and outstanding shares of the Corporation entitled to vote thereon, at
any regular or special meeting of the shareholders, and notice of the proposed
change must be contained in the notice of the meeting.
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<PAGE> 8
12.
Any action required by law or by the Bylaws of the Corporation to be
taken at a meeting of the shareholders of the Corporation, and any action which
may be taken at such a meeting, may be taken without a meeting, if written
consent, setting forth the action so taken, is signed by persons entitled to
vote at a meeting those shares having sufficient voting power to cast not less
than the minimum number of votes that would be necessary to authorize or take
such action at a meeting at which all shares entitled to vote were present and
voted. Notice of such action without a meeting by less than unanimous written
consent shall be given within ten (10) days after taking such action to those
shareholders of record on the date when the written consent is first executed
and whose shares were not represented on the written consent.
13.
(a) Approval of any merger or share exchange of the Corporation
with or into any other corporation, or any sale, lease, exchange or other
disposition of substantially all of the assets of the Corporation to any other
corporation, person or other entity, shall require either:
(i) the affirmative vote of two-thirds (2/3) of the
directors of the Corporation then in office and the
affirmative vote of a majority of the issued and
outstanding shares of the corporation entitled to
vote; or
(ii) the affirmative vote of a majority of the directors
of the Corporation then in office and the
affirmative vote of the holders of at least
two-thirds (2/3) of the issued and outstanding
shares of the Corporation entitled to vote.
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<PAGE> 9
(b) The Board of Directors shall have the power to determine for
the purposes of this Article 13, on the basis of information known to the
Corporation, whether any sale, lease or exchange or other disposition of part
of the assets of the Corporation involves substantially all of the assets of
the Corporation.
(c) Unless two-thirds (2/3) of the directors then in office shall
approve the proposed change, this Article 13 may be amended or rescinded only
by the affirmative vote of the holders of at least two-thirds (2/3) of the
issued and outstanding shares of the Corporation entitled to vote thereon, at
any regular or special meeting of the shareholders, and notice of the proposed
change must be contained in the notice of the meeting.
14.
(a) The Board of Directors, when evaluating any offer of another
party (i) to make a tender offer or exchange offer for any equity security of
the Corporation, (ii) to merge or consolidate any other corporation with the
Corporation, or (iii) to purchase or otherwise acquire all or substantially all
of the assets of the Corporation, shall, in determining what is in the best
interests of the Corporation and its shareholders, give due consideration to
all relevant factors, including without limitation: (A) the short-term and
long-term social and economic effects on the employees, customers, shareholders
and other constituents of the Corporation and its subsidiaries, and on the
communities within which the Corporation and its subsidiaries operate (it being
understood that any subsidiary bank of the Corporation is charged with
providing support to and being involved in the communities it serves); and (B)
the consideration being offered by the other party in relation to the
then-current value of the Corporation in a freely negotiated transaction and in
relation to the Board of Directors' then-estimate of the future value of the
Corporation as an independent entity.
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<PAGE> 10
(b) Unless two-thirds (2/3) of the directors then in office shall
approve the proposed change, this Article 14 may be amended or rescinded only
by the affirmative vote of the holders of at least two-thirds (2/3) of the
issued and outstanding shares of the Corporation entitled to vote thereon, at
any regular or special meeting of the shareholders, and notice of the proposed
change must be contained in the notice of the meeting.
15.
Should any provision of these Articles of Incorporation, or any clause
hereof, be held to be invalid, illegal or unenforceable, in whole or in part,
the remaining provisions and clauses of these Articles of Incorporation shall
remain valid and fully enforceable.
16.
The name and address of the incorporator of the Corporation is:
Robert E. Lee
5101 Old Dawson Road
Albany, Georgia 31707
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<PAGE> 11
IN WITNESS WHEREOF, the undersigned has caused these Articles of
Incorporation to be executed, this ____ day of _____________, 1998.
COMMUNITY CAPITAL BANCSHARES, INC.
----------------------------------
BETH LANIER
Attorney for Incorporator
POWELL, GOLDSTEIN, FRAZER & MURPHY LLP
Sixteenth Floor
191 Peachtree Street, N.E.
Atlanta, Georgia 30303
(404) 572-6600
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<PAGE> 1
EXHIBIT 3.2
BYLAWS
COMMUNITY CAPITAL BANCSHARES, INC.
<PAGE> 2
BYLAWS
COMMUNITY CAPITAL BANCSHARES, INC.
INDEX
<TABLE>
<CAPTION>
PAGE
<S> <C>
ARTICLE ONE - OFFICES..................................................................................... 1
ARTICLE TWO - SHAREHOLDERS' MEETINGS...................................................................... 1
2.1 Annual Meeting
2.2 Special Meetings............................................................................. 1
2.3 Place........................................................................................ 1
2.4 Notice....................................................................................... 1
2.5 Quorum....................................................................................... 2
2.6 Proxies; Required Vote....................................................................... 2
2.7 Presiding Officer and Secretary .............................................................. 2
2.8 Shareholder List ............................................................................. 2
2.9 Action in Lieu of Meeting ................................................................... 2
ARTICLE THREE - DIRECTORS ................................................................................ 2
3.1 Management .................................................................................. 2
3.2 Number of Directors ......................................................................... 3
3.3 Vacancies .................................................................................. 3
3.4 Election of Directors ....................................................................... 3
3.5 Removal ..................................................................................... 3
3.6 Resignation ................................................................................. 3
3.7 Compensation ................................................................................ 3
3.8 Honorary and Advisory Directors ............................................................. 3
</TABLE>
<PAGE> 3
<TABLE>
<S> <C>
ARTICLE FOUR - COMMITTEES ................................................................................ 4
4.1 Executive Committee ......................................................................... 4
4.2 Other Committees ............................................................................ 5
4.3 Removal ..................................................................................... 5
ARTICLE FIVE - MEETINGS OF THE BOARD OF DIRECTORS ........................................................ 5
5.1 Time and Place .............................................................................. 5
5.2 Regular Meetings ............................................................................ 5
5.3 Special Meetings ............................................................................ 5
5.4 Content and Waiver of Notice ................................................................ 6
5.5 Quorum; Participation by Telephone .......................................................... 6
5.6 Action in Lieu of Meeting ................................................................... 6
5.7 Interested Directors and Officers ........................................................... 6
ARTICLE SIX - OFFICERS, AGENTS AND EMPLOYEES ............................................................. 7
6.1 General Provisions .......................................................................... 7
6.2 Powers and Duties of the Chairman of the Board and the President............................. 7
6.3 Powers and Duties of Vice Presidents ........................................................ 8
6.4 Powers and Duties of the Secretary .......................................................... 8
6.5 Powers and Duties of the Treasurer ........................................................... 8
6.6 Appointment, Powers and Duties of Assistant Secretaries ..................................... 8
6.7 Appointment, Powers and Duties of Assistant Treasurers ...................................... 9
6.8 Delegation of Duties ........................................................................ 9
</TABLE>
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<PAGE> 4
<TABLE>
<S> <C>
ARTICLE SEVEN - CAPITAL STOCK ............................................................................. 9
7.1 Certificates ................................................................................ 9
7.2 Shareholder List ........................................................................... 10
7.3 Transfer of Shares ......................................................................... 10
7.4 Record Dates ............................................................................... 10
7.5 Registered Owner ........................................................................... 10
7.6 Transfer Agent and Registrars .............................................................. 10
7.7 Lost Certificates ......................................................................... 10
7.8 Fractional Shares or Scrip ................................................................. 11
ARTICLE EIGHT - BOOKS AND RECORDS; SEAL; ANNUAL STATEMENTS ............................................. 11
8.1 Inspection of Books and Records ............................................................ 11
8.2 Seal ....................................................................................... 12
8.3 Annual Statements .......................................................................... 12
ARTICLE NINE - INDEMNIFICATION .......................................................................... 12
9.1 Authority to Indemnify ..................................................................... 12
9.2 Mandatory Indemnification .................................................................. 12
9.3 Advances for Expenses ...................................................................... 13
9.4 Court-ordered Indemnification and Advances for Expenses .................................... 13
9.5 Determination of Indemnification ........................................................... 13
9.6 Authorization of Indemnification ........................................................... 14
9.7 Other Rights .............................................................................. 14
</TABLE>
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<PAGE> 5
<TABLE>
<S> <C>
9.8 Insurance .................................................................................. 14
9.9 Continuation of Expenses ................................................................... 14
ARTICLE TEN - NOTICES: WAIVERS OF NOTICE ............................................................... 14
10.1 Notices ....................................................................................... 14
10.2 Waivers of Notice ............................................................................. 15
ARTICLE ELEVEN - EMERGENCY POWERS ....................................................................... 15
11.1 Bylaws ........................................................................................ 15
11.2 Lines of Succession ........................................................................... 15
11.3 Head Office ................................................................................... 15
11.4 Period of Effectiveness ...................................................................... 15
11.5 Notices ....................................................................................... 15
11.6 Officers as Directors Pro Tempore ............................................................. 16
11.7 Liability of Officers, Directors and Agents ................................................... 16
ARTICLE TWELVE - CHECKS, NOTES, DRAFTS, ETC. ............................................................ 16
ARTICLE THIRTEEN - AMENDMENTS ........................................................................... 16
</TABLE>
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<PAGE> 6
BYLAWS
OF
COMMUNITY CAPITAL BANCSHARES, INC.
ARTICLE ONE
OFFICES
The corporation shall at all times maintain its principal office in
Albany, Georgia, its registered office in the State of Georgia and its
registered agent at that address, but it may have other offices located within
or outside the State of Georgia as the Board of Directors may determine.
ARTICLE TWO
SHAREHOLDERS' MEETINGS
2.1 Annual Meeting. A meeting of shareholders of the corporation shall
be held annually, within six (6) months after the end of each fiscal year of
the corporation. The annual meeting shall be held at such time and place and on
such date as the Directors shall determine from time to time and as shall be
specified in the notice of the meeting.
2.2 Special Meetings. Special meetings of the shareholders may be
called at any time by the corporation's Board of Directors, its President, and
by the corporation upon the written request of any one or more shareholders,
owning an aggregate of not less than twenty-five percent of the outstanding
capital stock of the corporation. Special meetings shall be held at such a time
and place and on such date as shall be specified in the notice of the meeting.
2.3 Place. Annual or special meetings of shareholders may be held
within or without the State of Georgia.
2.4 Notice. Notice of annual or special shareholders meetings stating
place, day and hour of the meeting shall be given in writing not less than ten
nor more than sixty days before the date of the meeting, either mailed to the
last known address or personally given to each shareholder. Notice of any
special meeting of shareholders shall state the purpose or purposes for which
the meeting is called. The notice of any meeting at which amendments to or
restatements of the articles of incorporation, merger or share exchange of the
corporation, or the disposition of corporate assets requiring shareholder
approval are to be considered shall state such purpose, and shall further
comply with all requirements of law. Notice of a meeting may be waived by an
instrument in writing executed before or after the meeting. The waiver need not
specify the purpose of the meeting or the business transacted, unless one of
the purposes of the meeting concerns a plan of merger or share exchange, in
which event the waiver shall comply with the further requirements of law
concerning such waivers. Attendance at such meeting in person or by proxy shall
constitute a waiver of notice thereof.
2.5 Quorum. At all meetings of shareholders a majority of the
outstanding shares of stock shall constitute a quorum for the transaction of
business, and no resolution or business shall be
<PAGE> 7
transacted without the favorable vote of the holders of a majority of the
shares represented at the meeting and entitled to vote. A lesser number may
adjourn from day to day, and shall announce the time and place to which the
meeting is adjourned.
2.6 Proxies; Required Vote. At every meeting of the shareholders,
including meetings of shareholders for the election of Directors, any
shareholder having the right to vote shall be entitled to vote in person or by
proxy, but no proxy shall be voted after eleven months from its date, unless
said proxy provides for a longer period. Each shareholder shall have one vote
for each share of stock having voting power, registered in his or her name on
the books of the corporation. If a quorum is present, the affirmative vote of
the majority of the shares represented at the meeting and entitled to vote on
the subject matter shall be the act of the shareholders, except as otherwise
provided by law, by the Articles of Incorporation or by these bylaws.
2.7 Presiding Officer and Secretary. At every meeting of shareholders,
the Chairman or the President, or, if such officers shall not be present, then
the person appointed by one of them shall preside. The Secretary or an
Assistant Secretary, or if such officers shall not be present, the appointee of
the presiding officer of the meeting, shall act as secretary of the meeting.
2.8 Shareholder List. The officer or agent having charge of the stock
transfer books of the corporation shall produce for inspection of any
shareholder at, and continuously during, every meeting of the shareholders, a
complete alphabetical list of shareholders showing the address and share
holdings of each shareholder. If the record of shareholders readily shows such
information, it may be produced in lieu of such a list.
2.9 Action in Lieu of Meeting. Any action to be taken at a meeting of
the shareholders of the corporation, or any action that may be taken at a
meeting of the shareholders, may be taken without a meeting if a consent in
writing setting forth the action so taken shall be signed by those persons who
would be entitled to vote at a meeting those shares having voting power to cast
not less than the minimum number (or numbers, in the case of voting by class)
of votes that would be necessary to authorize or take such action at a meeting
at which all shares entitled to vote were present and voted.
ARTICLE THREE
DIRECTORS
3.1 Management. Subject to these bylaws, or any lawful agreement
between the shareholders, the full and entire management of the affairs and
business of the corporation shall be vested in the Board of Directors, which
shall have and may exercise all of the powers that may be exercised or
performed by the corporation.
3.2 Number of Directors. The Board of Directors shall consist of not
less than five (5) nor more than twenty-five (25) members. The number of
Directors may be fixed or changed from time to time, within the minimum and
maximum, by the shareholders by the affirmative vote of a
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<PAGE> 8
majority of the issued and outstanding shares of the corporation entitled to
vote in an election of Directors, or by the Board of Directors by the
affirmative vote of a majority of all Directors then in office.
3.3 Vacancies. The Directors, even though less than a quorum, may fill
any vacancy on the Board of Directors, including a vacancy created by an
increase in the number of Directors. Such appointment by the Directors shall
continue until the expiration of the term of the Director whose place has
become vacant, or, in the case of an increase in the number of Directors, until
the next meeting of the shareholders.
3.4 Election of Directors. The Board of Directors shall be divided
into three (3) classes, Class I, Class II and Class III, which shall be nearly
equal in number as possible. Each Director in Class I shall be elected to an
initial term of one (1) year, each Director in Class II shall be elected to an
initial term of two (2) years and each Director in Class III shall be elected
to an initial term of three (3) years, and each Director shall serve until the
election and qualification of his or her successor or until his or her earlier
resignation, death or removal from office. Upon the expiration of the initial
terms of office for each Class of Directors, the Directors of each Class shall
be elected for terms of three (3) years, to serve until the election and
qualification of their successors or until their earlier resignation, death or
removal from office.
3.5 Removal. Any Director may be removed from office, at a meeting
with respect to which notice of such purpose is given, with cause, only upon
the affirmative vote of the holders of a majority of the issued and outstanding
shares of the corporation. Any Director may be removed from office, at a
meeting with respect to which notice of such purpose is given, without cause,
only upon the affirmative vote of two-thirds of the holders of a majority of
the issued and outstanding shares of the corporation.
3.6 Resignation. Any Director may resign at any time either orally at
any meeting of the Board of Directors or by so advising the Chairman of the
Board or the President or by giving written notice to the corporation. A
Director who resigns may postpone the effectiveness of his or her resignation
to a future date or upon the occurrence of a future event specified in a
written tender of resignation. If no time of effectiveness is specified
therein, a resignation shall be effective upon tender. A vacancy shall be
deemed to exist at the time a resignation is tendered, and the Board of
Directors or the shareholders may, then or thereafter, elect a successor to
take office when the resignation by its terms becomes effective.
3.7 Compensation. Directors may be allowed such compensation for their
services as Directors as may from time to time be fixed by resolution of the
Board of Directors.
3.8 Honorary and Advisory Directors. When a Director of the
corporation retires under the retirement policies of the corporation as
established from time to time by the Board of Directors, such Director
automatically shall become an Honorary Director of the corporation following
his or her retirement. The Board of Directors of the corporation also may
appoint any individual an Honorary Director, Director Emeritus, or member of
any advisory board established by the Board of
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<PAGE> 9
Directors. Any individual automatically becoming an Honorary Director or
appointed an Honorary Director, Director Emeritus, or member of an advisory
board as provided by this Section 3.8 may be compensated as provided in Section
3.7, but such individual may not vote at any meeting of the Board of Directors
or be counted in determining a quorum as provided in Section 5.5 and shall not
have any responsibility or be subject to any liability imposed upon a Director,
or otherwise be deemed a Director.
ARTICLE FOUR
COMMITTEES
4.1 Executive Committee. (a) The Board of Directors may, by resolution
adopted by a majority of the entire Board, designate an Executive Committee
consisting of one or more Directors. Each Executive Committee member shall hold
office until the first meeting of the Board of Directors after the annual
meeting of shareholders and until the member's successor is elected and
qualified, or until the member's death, resignation or removal, or until the
member shall cease to be a Director.
(b) During the intervals between the meetings of the
Board of Directors, the Executive Committee may exercise all the authority of
the Board of Directors; provided, however, that the Executive Committee shall
not have the power to amend or repeal any resolution of the Board of Directors
that by its terms shall not be subject to amendment or repeal by the Executive
Committee, and the Executive Committee shall not have the authority of the
Board of Directors in reference to (i) the amendment of the Articles of
Incorporation or bylaws of the corporation; (ii) the adoption of a plan of
merger or consolidation; (iii) the sale, lease, exchange or other disposition
of all or substantially all the property and assets of the corporation; or (iv)
a voluntary dissolution of the corporation or the revocation of any such
voluntary dissolution.
(c) The Executive Committee shall meet from time to time
on call of the Chairman of the Board or the President or of any two or more
members of the Executive Committee. Meetings of the Executive Committee may be
held at such place or places, within or without the State of Georgia, as the
Executive Committee shall determine or as may be specified or fixed in the
respective notices or waivers of such meetings. The Executive Committee may fix
its own rules of procedure, including provision for notice of its meetings. It
shall keep a record of its proceedings and shall report these proceedings to
the Board of Directors at the meeting thereof held next after they have been
taken, and all such proceedings shall be subject to revision or alteration by
the Board of Directors except to the extent that action shall have been taken
pursuant to or in reliance upon such proceedings prior to any such revision or
alteration.
(d) The Executive Committee shall act by majority vote
of its members; provided, however, that contracts or transactions of and by the
corporation in which officers or Directors of the corporation are interested
shall require the affirmative vote of a majority of the disinterested members
of the Executive Committee at a meeting of the Executive Committee at
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<PAGE> 10
which the material facts as to the interest and as to the contract or
transaction are disclosed or known to the members of the Executive Committee
prior to the vote.
(e) Members of the Executive Committee may participate
in committee proceedings by means of conference telephone or similar
communications equipment by means of which all persons participating in the
proceedings can hear each other, and such participation shall constitute
presence in person at such proceedings.
(f) The Board of Directors, by resolution adopted in
accordance with paragraph (a) of this section, may designate one or more
Directors as alternate members of the Executive Committee who may act in the
place and stead of any absent member or members at any meeting of said
committee.
4.2 Other Committees. The Board of Directors, by resolution adopted by
a majority of the entire Board, may designate one or more additional
committees, each committee to consist of one or more of the Directors of the
corporation, which shall have such name or names and shall have and may
exercise such powers of the Board of Directors, except the powers denied to the
Executive Committee, as may be determined from time to time by the Board of
Directors. Such committees shall provide for their own rules of procedure,
subject to the same restrictions thereon as provided above for the Executive
Committee.
4.3 Removal. The Board of Directors shall have power at any time to
remove any member of any committee, with or without cause, and to fill
vacancies in and to dissolve any such committee.
ARTICLE FIVE
MEETINGS OF THE BOARD OF DIRECTORS
5.1 Time and Place. Meetings of the Board of Directors may be held at
any place either within or without the State of Georgia.
5.2 Regular Meetings. Regular meetings of the Board of Directors may
be held without notice at such time and place, within or without the State of
Georgia, as shall be determined by the Board of Directors from time to time.
5.3 Special Meetings. Special meetings of the Board of Directors may
be called by the Chairman of the Board or the President on not less than one
day's notice by mail, telegram, cablegram, personal delivery or telephone to
each Director and shall be called by the Chairman of the Board or the President
in like manner and on like notice on the written request of any two or more
Directors. Any such special meeting shall be held at such time and place,
within or without the State of Georgia, as shall be stated in the notice of the
meeting.
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<PAGE> 11
5.4 Content and Waiver of Notice. No notice of any meeting of the
Board of Directors need state the purposes thereof. Notice of any meeting may
be waived by an instrument in writing executed before or after the meeting.
Attendance in person at any such meeting shall constitute a waiver of notice
thereof unless the director at the beginning of the meeting (or promptly upon
his or her arrival) objects to holding the meeting or transacting business at
the meeting and does not thereafter vote for or assent to action taken at the
meeting.
5.5 Quorum; Participation by Telephone. At all meetings of the Board
of Directors, the presence of a majority of the authorized number of Directors
shall be necessary and sufficient to constitute a quorum for the transaction of
business. Directors may participate in any meeting by means of conference
telephone or similar communications equipment by means of which all persons
participating in the meeting can hear each other, and participation in a
meeting by means of such communications equipment shall constitute the presence
in person at such meeting. Except as may be otherwise specifically provided by
law, the Articles of Incorporation or these bylaws, all resolutions adopted and
all business transacted by the Board of Directors shall require the affirmative
vote of a majority of the Directors present at the meeting. In the absence of a
quorum, a majority of the Directors present at any meeting may adjourn the
meeting from time to time until a quorum is present. Notice of any adjourned
meeting need only be given by announcement at the meeting at which the
adjournment is taken.
5.6 Action in Lieu of Meeting. Any action required or permitted to be
taken at any meeting of the Board of Directors or of any committee thereof may
be taken without a meeting if a written consent thereto is signed by all
members of the Board of Directors or of such committee, as the case may be, and
such written consent is filed with the minutes of the proceedings of the Board
of Directors and upon compliance with any further requirements of law
pertaining to such consents.
5.7 Interested Directors and Officers. An interested Director or
officer is one who is a party to a contract or transaction with the corporation
or who is an officer or Director of, or has a financial interest in, another
corporation, partnership or association which is a party to a contract or
transaction with the corporation. Contracts and transactions between the
corporation and one or more interested Directors or officers shall not be void
or voidable solely because of the involvement or vote of such interested
persons as long as (a) the contract or transaction is approved in good faith by
the Board of Directors or appropriate committee by the affirmative vote of a
majority of disinterested Directors, even if the disinterested Directors be
less than a quorum, at a meeting of the Board or committee at which the
material facts as to the interested person or persons and the contract or
transaction are disclosed or known to the Board or committee prior to the vote;
or (b) the contract or transaction is approved in good faith by the
shareholders after the material facts as to the interested person or persons
and the contract or transaction have been disclosed to them; or (c) the
contract or transaction is fair as to the corporation as of the time it is
authorized, approved or ratified by the Board, committee or shareholders.
Interested Directors may be counted in determining the presence of a quorum at
a meeting of the Board or committee which authorizes the contract or
transaction.
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<PAGE> 12
ARTICLE SIX
OFFICERS, AGENTS AND EMPLOYEES
6.1 General Provisions. The officers of the corporation shall be a
President and a Secretary, and may include a Treasurer, Chairman of the Board,
one or more Vice Presidents, one or more Assistant Secretaries, and one or more
Assistant Treasurers. The officers shall be elected by the Board of Directors
at the first meeting of the Board of Directors after the annual meeting of the
shareholders in each year or shall be appointed as provided in these bylaws.
The Board of Directors may elect other officers, agents and employees, who
shall have such authority and perform such duties as may be prescribed by the
Board of Directors. All officers shall hold office until the meeting of the
Board of Directors following the next annual meeting of the shareholders after
their election or appointment and until their successors shall have been
elected or appointed and shall have qualified. Any two or more offices may be
held by the same person. Any officer, agent or employee of the corporation may
be removed by the Board of Directors with or without cause. Removal without
cause shall be without prejudice to such person's contract rights, if any, but
the election or appointment of any person as an officer, agent or employee of
the corporation shall not of itself create contract rights. The compensation of
officers, agents and employees elected by the Board of Directors shall be fixed
by the Board of Directors or by a committee thereof, and this power may also be
delegated to any officer, agent or employee as to persons under his or her
direction or control. The Board of Directors may require any officer, agent or
employee to give security for the faithful performance of his or her duties.
6.2 Powers and Duties of the Chairman of the Board and the President.
The powers and duties of the Chairman of the Board and the President, subject
to the supervision and control of the Board of Directors, shall be those
usually appertaining to their respective offices and whatever other powers and
duties are prescribed by these bylaws or by the Board of Directors.
(a) The Chairman of the Board shall preside at all
meetings of the Board of Directors and at all meetings of the shareholders. The
Chairman of the Board shall perform such other duties as the Board of Directors
may from time to time direct, but shall not participate in any major
policy-making functions of the corporation other than in his or her capacity as
a director. The Vice-Chairman shall act as Chairman of the Board of Directors
unless another director is elected Chairman.
(b) The President shall, unless otherwise provided by
the Board of Directors, be the chief executive officer of the corporation. The
President shall have general charge of the business and affairs of the
corporation and shall keep the Board of Directors fully advised. The President
shall employ and discharge employees and agents of the corporation, except such
as shall be elected by the Board of Directors, and he or she may delegate these
powers. The President shall have such powers and perform such duties as
generally pertain to the office of the President, as well as such further
powers and duties as may be prescribed by the Board of Directors. The President
may vote the shares or other securities of any other domestic or foreign
corporation of any type or kind which may at any time be owned by the
corporation, may execute any shareholders' or other consents in respect thereof
and may in his or her discretion delegate such powers by executing
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proxies, or otherwise, on behalf of the corporation. The Board of Directors, by
resolution from time to time, may confer like powers upon any other person or
persons.
6.3 Powers and Duties of Vice Presidents. Each Vice President shall
have such powers and perform such duties as the Board of Directors or the
President may prescribe and shall perform such other duties as may be
prescribed by these bylaws. In the absence or inability to act of the
President, unless the Board of Directors shall otherwise provide, the Vice
President who has served in that capacity for the longest time and who shall be
present and able to act, shall perform all duties and may exercise any of the
powers of the President. The performance of any such duty by a Vice President
shall be conclusive evidence of his or her power to act.
6.4 Powers and Duties of the Secretary. The Secretary shall have
charge of the minutes of all proceedings of the shareholders and of the Board
of Directors and shall keep the minutes of all their meetings at which he or
she is present. Except as otherwise provided by these bylaws, the Secretary
shall attend to the giving of all notices to shareholders and Directors. He or
she shall have charge of the seal of the corporation, shall attend to its use
on all documents the execution of which on behalf of the corporation under its
seal is duly authorized and shall attest the same by his or her signature
whenever required. The Secretary shall have charge of the record of
shareholders of the corporation, of all written requests by shareholders that
notices be mailed to them at an address other than their addresses on the
record of shareholders, and of such other books and papers as the Board of
Directors may direct. Subject to the control of the Board of Directors, the
Secretary shall have all such powers and duties as generally are incident to
the position of Secretary or as may be assigned to the Secretary by the
President or the Board of Directors.
6.5 Powers and Duties of the Treasurer. The Treasurer shall have
charge of all funds and securities of the corporation, shall endorse the same
for deposit or collection when necessary and deposit the same to the credit of
the corporation in such banks or depositaries as the Board of Directors may
authorize. The Treasurer may endorse all commercial documents requiring
endorsements for or on behalf of the corporation and may sign all receipts and
all commercial documents requiring endorsements for or on behalf of the
corporation and may sign all receipts and vouchers for payments made to the
corporation. The Treasurer shall have all such powers and duties as generally
are incident to the position of Treasurer or as may be assigned to the
Treasurer by the President or by the Board of Directors.
6.6 Appointment, Powers and Duties of Assistant Secretaries. Assistant
Secretaries may be appointed by the President or elected by the Board of
Directors. In the absence or inability of the Secretary to act, any Assistant
Secretary may perform all the duties and exercise all the powers of the
Secretary. The performance of any such duty shall be conclusive evidence of the
Assistant Secretary's power to act. An Assistant Secretary shall also perform
such other duties as the Secretary or the Board of Directors may assign to him
or her.
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6.7 Appointment, Powers and Duties of Assistant Treasurers. Assistant
Treasurers may be appointed by the President or elected by the Board of
Directors. In the absence or inability of the Treasurer to act, an Assistant
Treasurer may perform all the duties and exercise all the powers of the
Treasurer. The performance of any such duty shall be conclusive evidence of the
Assistant Treasurer's power to act. An Assistant Treasurer shall also perform
such other duties as the Treasurer or the Board of Directors may assign to him
or her.
6.8 Delegation of Duties. In case of the absence of any officer of the
corporation, or for any other reason that the Board of Directors may deem
sufficient, the Board of Directors (or in the case of Assistant Secretaries or
Assistant Treasurers only, the President) may confer for the time being the
powers and duties, or any of them, of such officer upon any other officer or
elect or appoint any new officer to fill a vacancy created by death,
resignation, retirement or termination of any officer. In such latter event
such new officer shall serve until the next annual election of officers.
ARTICLE SEVEN
CAPITAL STOCK
7.1 Certificates. (a) The interest of each shareholder shall be
evidenced by a certificate or certificates representing shares of the
corporation which shall be in such form as the Board of Directors may from time
to time adopt and shall be numbered and shall be entered in the books of the
corporation as they are issued. Each certificate representing shares shall set
forth upon the face thereof the following:
(i) the name of this corporation;
(ii) that the corporation is organized under the
laws of the State of Georgia;
(iii) the name or names of the person or persons to
whom the certificate is issued;
(iv) the number and class of shares, and the
designation of the series, if any, which the certificate represents; and
(v) if any shares represented by the certificate
are nonvoting shares, a statement or notation to that effect; and, if the
shares represented by the certificate are subordinate to shares of any other
class or series with respect to dividends or amounts payable on liquidation,
the certificate shall further set forth on either the face or back thereof a
clear and concise statement to that effect.
(b) Each certificate shall be signed by the President or
a Vice President and the Secretary or an Assistant Secretary and may be sealed
with the seal of the corporation or a facsimile thereof. If a certificate is
countersigned by a transfer agent or registered by a registrar, other than the
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corporation itself or an employee of the corporation, the signature of any such
officer of the corporation may be a facsimile. In case any officer or officers
who shall have signed, or whose facsimile signature or signatures shall have
been used on, any such certificate or certificates shall cease to be such
officer or officers of the corporation, whether because of death, resignation
or otherwise, before such certificate or certificates shall have been delivered
by the corporation, such certificate or certificates may nevertheless be
delivered as though the person or persons who signed such certificate or
certificates or whose facsimile signatures shall have been used thereon had not
ceased to be such officer or officers.
7.2 Shareholder List. The corporation shall keep or cause to be kept a
record of the shareholders of the corporation which readily shows, in
alphabetical order or by alphabetical index, and by classes or series of stock,
if any, the names of the shareholders entitled to vote, with the address of and
the number of shares held by each. Said record shall be presented and kept open
at all meetings of the shareholders.
7.3 Transfer of Shares. Transfers of stock shall be made on the books
of the corporation only by the person named in the certificate, or by power of
attorney lawfully constituted in writing, and upon surrender of the
certificate, or in the case of a certificate alleged to have been lost, stolen
or destroyed, upon compliance with the provisions of Section 7.7 of these
bylaws.
7.4 Record Dates. For the purpose of determining shareholders entitled
to notice of or to vote at any meeting of shareholders or any adjournment
thereof, or entitled to receive payment of any dividend, or in order to make a
determination of shareholders for any other proper purpose, the Board of
Directors may fix in advance a date as the record date for any such
determination of shareholders, such date to be not more than seventy days and,
in case of a meeting of shareholders, not less than ten days, prior to the date
on which the particular action requiring such determination of shareholders is
to be taken.
7.5 Registered Owner. The corporation shall be entitled to treat the
holder of record of any share of stock of the corporation as the person
entitled to vote such share, to receive any dividend or other distribution with
respect to such share, and for all other purposes and accordingly shall not be
bound to recognize any equitable or other claim or interest in such share on
the part of any other person, whether or not it shall have express or other
notice thereof, except as otherwise provided by law.
7.6 Transfer Agent and Registrars. The Board of Directors may appoint
one or more transfer agents and one or more registrars and may require each
stock certificate to bear the signature or signatures of a transfer agent or a
registrar or both.
7.7 Lost Certificates. Any person claiming a certificate of stock to
be lost, stolen or destroyed shall make an affidavit or affirmation of the fact
in such manner as the Board of Directors may require and, if the Directors so
require, shall give the corporation a bond of indemnity in form and amount and
with one or more sureties satisfactory to the Board of Directors, whereupon an
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appropriate new certificate may be issued in lieu of the certificate alleged to
have been lost, stolen or destroyed.
7.8 Fractional Shares or Scrip. The corporation may, when and if
authorized so to do by its Board of Directors, issue certificates for
fractional shares or scrip in order to effect share transfers, share
distributions or reclassifications, mergers, consolidations or reorganizations.
Holders of fractional shares shall be entitled, in proportion to their
fractional holdings, to exercise voting rights, receive dividends and
participate in any of the assets of the corporation in the event of
liquidation. Holders of scrip shall not, unless expressly authorized by the
Board of Directors, be entitled to exercise any rights of a shareholder of the
corporation, including voting rights, dividend rights or the right to
participate in any assets of the corporation in the event of liquidation. In
lieu of issuing fractional shares or scrip, the corporation may pay in cash the
fair value of fractional interests as determined by the Board of Directors; and
the Board of Directors may adopt resolutions regarding rights with respect to
fractional shares or scrip as it may deem appropriate, including without
limitation the right for persons entitled to receive fractional shares to sell
such fractional shares or purchase such additional fractional shares as may be
needed to acquire one full share, or sell such fractional shares or scrip for
the account of such persons.
ARTICLE EIGHT
BOOKS AND RECORDS; SEAL; ANNUAL STATEMENTS
8.1 Inspection of Books and Records. (a) Any person who shall be the
holder of record of, or authorized in writing by the holders of record of, at
least two (2%) percent of the outstanding shares of any class or series of the
corporation, upon written demand stating the purpose thereof, shall have the
right to examine in person or by agent or attorney, at any reasonable time or
times, for any proper purpose, the books and records of account, minutes and
record of shareholders and to make extracts therefrom.
(b) A shareholder may inspect and copy the records
described in the immediately preceding paragraph only if (i) his or her demand
is made in good faith and for a proper purpose that is reasonably relevant to
his or her legitimate interest as a shareholder; (ii) the shareholder describes
with reasonable particularity his or her purpose and the records he or she
desires to inspect; (iii) the records are directly connected with the stated
purpose; and (iv) the records are to be used only for that purpose.
(c) If the Secretary or a majority of the corporation's
Board of Directors or Executive Committee members find that the request is
proper, the Secretary shall promptly notify the shareholder of the time and
place at which the inspection may be conducted.
(d) If said request is found by the Secretary, the Board
of Directors or the Executive Committee to be improper, the Secretary shall so
notify the requesting shareholder on or prior to the date on which the
shareholder requested to conduct the inspection. The Secretary shall specify in
said notice the basis for the rejection of the shareholder's request.
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(e) The Secretary, the Board of Directors and the
Executive Committee shall at all times be entitled to rely on the corporate
records in making any determination hereunder.
8.2 Seal. The corporate seal shall be in such form as the Board of
Directors may from time to time determine. In the event it is inconvenient to
use such a seal at any time, the signature of the corporation followed by the
word "Seal" enclosed in parentheses or scroll shall be deemed the seal of the
corporation.
8.3 Annual Statements. Not later than four months after the close of
each fiscal year, and in any case prior to the next annual meeting of
shareholders, the corporation shall prepare:
(a) A balance sheet showing in reasonable detail the
financial condition of the corporation as of the close of its fiscal year, and
(b) A profit and loss statement showing the results of
its operations during its fiscal year. Upon written request, the corporation
promptly shall mail to any shareholder of record a copy of its most recent
balance sheet and profit and loss statement.
ARTICLE NINE
INDEMNIFICATION
9.1 Authority to Indemnify. The corporation shall indemnify or
obligate itself to indemnify an individual made a party to a proceeding because
he or she is or was a director, officer, employee or agent of the corporation
(or was serving at the request of the corporation as a director, officer or
employee or agent of another corporation, partnership, joint venture, trust or
other enterprise) for reasonable expenses, judgments, fines, penalties and
amounts paid in settlement (including attorneys' fees), incurred in connection
with the proceeding if the individual acted in manner he or she believed in
good faith to be in or not opposed to the best interests of the corporation
and, in the case of any criminal proceeding, he or she had no reasonable cause
to believe his or her conduct was unlawful. The termination of a proceeding by
judgment, order, settlement, or conviction, or upon a plea of nolo contendere
or its equivalent is not, of itself, determinative that the director, officer,
employee or agent did not meet the standard of conduct set forth above.
Indemnification permitted under this action in connection with a proceeding by
or in the right of the corporation is limited to reasonable expenses incurred
in connection with the proceeding.
9.2 Mandatory Indemnification. The extent that a director, officer,
employee or agent of the corporation has been successful, on the merits or
otherwise, in the defense of any proceeding to which he or she was a party, or
in defense of any claim, issue, or matter therein , because he or she is or was
a director, officer, employee or agent of the corporation, the corporation
shall indemnify the director, employee or agent against reasonable expenses
incurred by him or her in connection therewith.
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9.3 Advance for Expenses. The corporation shall pay for or reimburse
the reasonable expenses incurred by a director, officer, employee or agent of
the corporation who is a party to a proceeding in advance of final disposition
of the proceeding if (a) he or she furnishes the corporation written
affirmation of his or her good faith belief that he or she has met the standard
of conduct set forth in Section 9.1 of this section, and (b) he or she
furnishes the corporation a written undertaking, executed personally or on his
or her behalf, to repay any advances if it is ultimately determined that he or
she is not entitled to indemnification. The undertaking required by this
section must be an unlimited general obligation but need not be secured and may
be accepted without reference to financial ability to make repayment.
9.4 Court-ordered Indemnification and Advances for Expenses. A
director, officer, employee or agent of the corporation who is a party to a
proceeding may apply for indemnification or advances for expenses to the court
conducting the proceeding or to another court of competent jurisdiction.
9.5 Determination of Indemnification. Except as provided in Section
9.2 and except as may be ordered by the court, the corporation may not
indemnify a director, officer, employee or agent under Section 9.1 unless
authorized thereunder and a determination has been made in the specific case
that indemnification of the director, officer, employee or agent is permissible
in the circumstances because he or she has met the standard of conduct set
forth in Section 9.1. The determination shall be made:
(a) By the board of directors by majority vote of a
quorum consisting of directors not at the time parties to the proceedings;
(b) If a quorum cannot be obtained, by majority vote of
a committee duly designated by the board of directors (in which designation
directors who are parties may participate), consisting solely of two or more
directors not at the time parties to the proceeding;
(c) By special legal counsel:
(i) Selected by the board of directors or its
committee in the manner prescribed in paragraph (a) or (b) of this section; or
(ii) If a quorum of the board of directors cannot
be obtained and a committee cannot be designated, selected by majority vote of
the full board of directors (in which selection directors who are parties may
participate); or
(d) By the shareholders, but shares owned by or voted
under the control of directors who are at the time parties to the proceeding
may not be voted on the determination.
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9.6 Authorization of Indemnification. Authorization of indemnification
or an obligation to indemnify and evaluation as the reasonableness of expenses
shall be made in the same manner as the determination that indemnification is
permissible, except that if the determination is made by special legal counsel,
authorization of indemnification and evaluation as to reasonableness of
expenses shall be made by those entitled under subsection (c) of Section 9.5 to
select counsel.
9.7 Other Rights. The indemnification and advancement of expenses
provided by or granted pursuant to this Article Nine shall not be deemed
exclusive of any other rights, in respect of indemnification or otherwise, to
which those seeking indemnification or advancement of expenses may be entitled
under any bylaw, resolution, agreement or contract either specifically or in
general terms approved by the affirmative vote of the holders of a majority of
the shares entitled to vote thereon taken at a meeting the notice of which
specified that such bylaw, resolution or agreement would be placed before the
stockholders, both as to action by a director, trustee, officer, employee or
agent in his or her official capacity and as to action in another capacity
while holding such office or position; except that no such other rights, in
respect to indemnification or otherwise, may be provided or granted to a
director, trustee, officer, employee, or agent pursuant to this Section 9.7 by
the corporation for liability for (a) any appropriation, in violation of his or
her duties, of any business opportunity of the corporation; (b) acts or
omissions not in good faith or which involve intentional misconduct or a
knowing violation of law; (c) the types of liability set forth in Section
14-2-832 of the Georgia Business Corporation Code dealing with illegal or
unauthorized distributions of corporate assets, whether as dividends or in
liquidation of the corporation or otherwise; or (d) any transaction from which
the director derived an improper material tangible personal benefit.
9.8 Insurance. The corporation may purchase and maintain insurance on
behalf of an individual who is or was a director, officer, employee, or agent
of the corporation or who, while a director, officer, employee, or agent of the
corporation, is or was serving at the request of the corporation as a director,
officer, partner, trustee, employee, or agent of another foreign or domestic
corporation, partnership, joint venture, trust, employee benefit plan, or other
enterprise against liability asserted against or incurred by him or her in that
capacity or arising from his or her status as a director, officer, employee, or
agent whether or not the corporation would have power to indemnify him or her
against the same liability under this Article Nine.
9.9 Continuation of Expenses. The indemnification and advancement of
expenses provided by or granted pursuant to this Article Nine shall continue as
to a person who has ceased to be a director, trustee, officer, employee, or
agent and shall inure to the benefit of the heirs, executors, and
administrators of such a person.
ARTICLE TEN
NOTICES: WAIVERS OF NOTICE
10.1 Notices. Except as otherwise specifically provided in these
bylaws, whenever under the provisions of these bylaws notice is required to be
given to any shareholder, Director or officer, it shall not be construed to
mean personal notice, but such notice may be given by personal notice, by
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telegram or cablegram, or by mail by depositing the same in the post office or
letter box in a postage prepaid sealed wrapper, addressed to such shareholder,
Director or officer at such address as appears on the books of the corporation,
and such notice shall be deemed to be given at the time when the same shall be
thus sent or mailed.
10.2 Waivers of Notice. Except as otherwise provided in these bylaws,
when any notice is required to be given by law, by the Articles of
Incorporation or by these bylaws, a written waiver thereof, signed by the
person entitled to notice, whether before or after the time stated therein,
shall be deemed equivalent to notice. In the case of a shareholder, such waiver
of notice may be signed by the shareholder's attorney or proxy duly appointed
in writing.
ARTICLE ELEVEN
EMERGENCY POWERS
11.1 Bylaws. The Board of Directors may adopt emergency bylaws,
subject to repeal or change by action of the shareholders, which shall,
notwithstanding any provision of law, the Articles of Incorporation or these
Bylaws, be operative during any emergency in the conduct of the business of the
corporation resulting from an attack on the United States or on a locality in
which the corporation conducts its business or customarily holds meeting of its
Board of Directors or its shareholders, or during any nuclear or atomic
disaster, or during the existence of any catastrophe, or other similar
emergency condition, as a result of which a quorum of the Board of Directors or
a standing committee thereof cannot readily be convened for action. The
emergency bylaws may make any provision that may be practical and necessary for
the circumstances of the emergency.
11.2 Lines of Succession. The Board of Directors, either before or
during any such emergency, may provide, and from time to time modify, lines of
succession in the event that during such an emergency any or all officers or
agents of the corporation shall for any reason be rendered incapable of
discharging their duties.
11.3 Head Office. The Board of Directors, either before or during any
such emergency, may (effective during the emergency) change the head office or
designate several alternative head offices or regional offices, or authorize
the officers to do so.
11.4 Period of Effectiveness. To the extent not inconsistent with any
emergency bylaws so adopted, these bylaws shall remain in effect during any
such emergency and upon its termination, the emergency bylaws shall cease to be
operative.
11.5 Notices. Unless otherwise provided in emergency bylaws, notice of
any meeting of the Board of Directors during any such emergency may be given
only to such of the Directors as it may be feasible to reach at the time, and
by such means as may be feasible at the time, including publication, radio or
television.
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11.6 Officers as Directors Pro Tempore. To the extent required to
constitute a quorum at any meeting of the Board of Directors during any such
emergency, the officers of the corporation who are present shall, unless
otherwise provided in emergency bylaws, be deemed, in order of rank and within
the same rank in order of seniority, Directors for such meeting.
11.7 Liability of Officers, Directors and Agents. No officer,
Director, agent or employee acting in accordance with any emergency bylaw shall
be liable except for willful misconduct. No officer, Director, agent or
employee shall be liable for any action taken by him or her in good faith in
such an emergency in furtherance of the ordinary business affairs of the
corporation even though not authorized by the bylaws then in effect.
ARTICLE TWELVE
CHECKS, NOTES, DRAFTS, ETC.
Checks, notes, drafts, acceptances, bills of exchange and other orders
or obligations for the payment of money shall be signed by such officer or
officers or person or persons as the Board of Directors by resolution shall
from time to time designate.
ARTICLE THIRTEEN
AMENDMENTS
The bylaws of the corporation may be altered or amended and new bylaws
may be adopted by the shareholders at any annual or special meeting of the
shareholders or by the Board of Directors at any regular or special meeting of
the Board of Directors; provided, however, that, if such action is to be taken
at a meeting of the shareholders, notice of the general nature of the proposed
change in the bylaws shall be given in the notice of meeting. The shareholders
may provide by resolution that any bylaw provision repealed, amended, adopted,
or altered by them may not be repealed, amended, adopted or altered by the
Board of Directors. Except as otherwise provided in the Articles of
Incorporation, action by the shareholders with respect to bylaws shall be taken
by an affirmative vote of a majority of all shares entitled to elect Directors,
and action by the Board of Directors with respect to bylaws shall be taken by
an affirmative vote of a majority of all Directors then holding office.
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EXHIBIT 10.3
AMENDED AND RESTATED EMPLOYMENT AGREEMENT
THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT is made as of the 19th
day of August, 1998, by and among ALBANY BANK & TRUST, National Association
(Proposed) (the "Bank"), a proposed national bank; COMMUNITY CAPITAL BANCSHARES,
INC., a bank holding company incorporated under the laws of the State of Georgia
(the "Company") (collectively, the Bank and the Company are referred to
hereafter as the "Employer"), and ROBERT E. LEE, a resident of the State of
Georgia (the "Employee").
RECITALS:
The Employer desires to employ the Employee as the President and Chief
Executive Officer of the Bank and of the Company and the Employee desires to
accept such employment.
In consideration of the above premises and the mutual agreements
hereinafter set forth, the parties hereby agree as follows:
1. DEFINITIONS. Whenever used in this Agreement, the following terms and their
variant forms shall have the meaning set forth below:
1.1 "AGREEMENT" shall mean this Agreement and any exhibits incorporated
herein together with any amendments hereto made in the manner described in this
Agreement.
1.2 "AFFILIATE" shall mean any business entity which controls the
Company, is controlled by or is under common control with the Company.
1.3 "AREA" shall mean the geographic area within the boundaries of
Dougherty and Lee Counties, Georgia. It is the express intent of the parties
that the Area as defined herein is the area where the Employee performs or
performed services on behalf of the Employer under this Agreement as of, or
within a reasonable time prior to, the termination of the Employee's employment
hereunder.
1.4 "BUSINESS OF THE EMPLOYER" shall mean the business conducted by the
Employer, which is commercial banking.
1.5 "CAUSE" shall mean:
1.5.1 With respect to termination by the Employer:
(a) A material breach of the terms of this Agreement by the
Employee, including, without limitation, failure by the Employee
to perform his duties and responsibilities in the manner and to
the extent required under this Agreement, which remains uncured
after the expiration of thirty (30) days following the delivery of
written notice of such breach to the Employee by the Employer.
Such notice shall (i) specifically identify the
<PAGE> 2
duties that the Board of Directors of either the Bank or the
Company believes Employee has failed to perform, (ii) state the
facts upon which such board of directors made such
determination, and (iii) be approved by a resolution passed by
two-thirds (2/3) of the directors of such board of directors
then in office;
(b) Conduct by the Employee that amounts to fraud, dishonesty
or willful misconduct in the performance of his duties and
responsibilities hereunder;
(c) The conviction of the Employee of a felony;
(d) Conduct by the Employee that amounts to gross and willful
insubordination or inattention to his duties and responsibilities
hereunder; or
(e) Conduct by the Employee that results in removal from his
position as an officer or employee of the Bank or of the Company
pursuant to a written order by any regulatory agency with
authority or jurisdiction over the Bank or Company, as applicable.
1.5.2 With respect to termination by the Employee, a material
diminution in the powers, responsibilities or duties of the Employee
hereunder or a material breach of the terms of this Agreement by the
Employer, which remains uncured after the expiration of thirty (30) days
following the delivery of written notice of such breach to the Employer
by the Employee.
1.6 "CHANGE IN CONTROL" means any one of the following events:
(a) the acquisition by any person or persons acting in
concert of the then outstanding voting securities of either the
Bank or the Company, if, after the transaction, the acquiring
person (or persons) owns, controls or holds with power to vote
twenty-five percent (25%) or more of any class of voting
securities of either the Bank or the Company, as the case may be,
or such other transaction as may be described under 12 C.F.R.
Section 225.41(c)(1) or any successor thereto;
(b) within any twelve-month period (beginning on or after the
Effective Date) the persons who were directors of either the Bank
or the Company immediately before the beginning of such
twelve-month period (the "Incumbent Directors") shall cease to
constitute at least a majority of such board of directors;
provided that any director who was not a director as of the
Effective Date shall be deemed to be an Incumbent Director if that
director was elected to such board of directors by, or on the
recommendation of or with the approval of, at least two-thirds of
the directors who then qualified as Incumbent Directors; and
provided further that no director whose initial assumption of
office is in connection with an actual or threatened election
contest (as such terms are used in Rule 14a-11 of Regulation 14A
promulgated under the Securities Exchange Act of 1934)
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<PAGE> 3
relating to the election of directors shall be deemed to be an
Incumbent Director;
(c) the approval by the stockholders of either the Bank or
the Company of a reorganization, merger or consolidation, with
respect to which persons who were the stockholders of the Bank or
the Company, as the case may be, immediately prior to such
reorganization, merger or consolidation do not, immediately
thereafter, own more than fifty percent (50%) of the combined
voting power entitled to vote in the election of directors of the
reorganized, merged or consolidated company's then outstanding
voting securities; or
(d) the sale, transfer or assignment of all or substantially
all of the assets of the Company and its subsidiaries to any third
party.
1.7 "COMPANY INFORMATION" means Confidential Information and Trade
Secrets.
1.8 "CONFIDENTIAL INFORMATION" means data and information relating to
the business of the Employer (which does not rise to the status of a Trade
Secret) which is or has been disclosed to the Employee or of which the Employee
became aware as a consequence of or through the Employee's relationship to the
Employer and which has value to the Employer and is not generally known to its
competitors. Confidential Information shall not include any data or information
that has been voluntarily disclosed to the public by the Employer (except where
such public disclosure has been made by the Employee without authorization) or
that has been independently developed and disclosed by others, or that
otherwise enters the public domain through lawful means.
1.9 "EFFECTIVE DATE" shall mean the date on which the Employer advises
the Escrow Agent that the terms of the Escrow Agreement have been satisfied and
instructs the Escrow Agent to release the escrowed funds to the Employer.
1.10 "ESCROW AGENT" shall mean The Bankers Bank.
1.11 "ESCROW AGREEMENT" shall mean that certain agreement by and between
the Company and The Bankers Bank whereby The Bankers Bank holds in escrow the
funds received from the sale of the Company's common stock until certain terms
and conditions are satisfied.
1.12 "INITIAL TERM" shall mean that period of time commencing on August
1, 1998 (the "Beginning Date") and running until the earlier of the close of
business on the last business day immediately preceding the fifth anniversary
of the Beginning Date or any termination of employment of the Employee under
this Agreement as provided for in Section 3.
1.13 "PERMANENT DISABILITY" shall mean the total inability of the
Employee to perform his duties under this Agreement for the duration of the
short-term disability period under the Employer's policy then in effect as
certified by a physician chosen by the Employer and reasonably
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acceptable to the Employee.
1.14 "TERM" shall mean the Initial Term and all subsequent renewal
periods.
1.15 "TRADE SECRETS" means Employer information including, but not
limited to, technical or nontechnical data, formulas, patterns, compilations,
programs, devices, methods, techniques, drawings, processes, financial data,
financial plans, product plans or lists of actual or potential customers or
suppliers which (a) 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 (b)
is the subject of efforts that are reasonable under the circumstances to
maintain its secrecy.
2. DUTIES.
2.1 POSITION. The Employee is employed initially as the President and
Chief Executive Officer of the Bank and of the Company and, subject to the
direction of the Board of Directors of the Bank or of the Company, as
applicable, or their designee(s), shall perform and discharge well and
faithfully the duties which may be assigned to him from time to time by the
Bank or the Company in connection with the conduct of its business. The duties
and responsibilities of the Employee are set forth on Exhibit A attached
hereto.
2.2 FULL-TIME STATUS. In addition to the duties and responsibilities
specifically assigned to the Employee pursuant to Section 2.1 hereof, the
Employee shall: (a) devote substantially all of his time, energy and skill
during regular business hours to the performance of the duties of his
employment (reasonable vacations and reasonable absences due to illness
excepted) and faithfully and industriously perform such duties; (b) diligently
follow and implement all management policies and decisions communicated to him
by the Board of Directors of either the Bank or the Company; and (c) timely
prepare and forward to the Board of Directors of either the Bank or the Company
all reports and accounting as may be requested of the Employee.
2.3 PERMITTED ACTIVITIES. The Employee shall devote his entire
business time, attention and energies to the Business of the Employer and shall
not during the Term be engaged (whether or not during normal business hours) in
any other business or professional activity, whether or not such activity is
pursued for gain, profit or other pecuniary advantage; but this shall not be
construed as preventing the Employee from (a) investing his personal assets in
businesses which (subject to clause (b) below) are not in competition with the
Business of the Employer and which will not require any services on the part of
the Employee in their operation or affairs and in which his participation is
solely that of an investor, (b) purchasing securities in any corporation whose
securities are regularly traded provided that such purchase shall not result in
him collectively owning beneficially at any time five percent (5%) or more of
the equity securities of any business in competition with the Business of the
Employer; and (c) participating in civic and professional affairs and
organizations and conferences, preparing or publishing papers or books or
teaching so
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long as the Board of Directors of either the Bank or the Company approves of
such activities prior to the Employee's engaging in them.
3. TERM AND TERMINATION.
3.1 TERM. This Agreement shall remain in effect for the Initial Term.
At the end of the Initial Term and at the end of each twelve-month extension
thereof, this Agreement shall automatically be extended for a successive
twelve-month period unless either party gives written notice to the other of its
intent not to extend this Agreement with such written notice to be given not
less than ninety (90) days prior to the end of the Initial Term or such
twelve-month period. In the event such notice of non-extension is properly
given, this Agreement shall terminate at the end of the remaining term then in
effect.
3.2 TERMINATION. During the Term, the employment of the Employee under
this Agreement may be terminated only as follows:
3.2.1 By the Employer or the Employee in the event that the
Company and the Bank abandon their organizational efforts or that
the Effective Date does not occur on or before December 31, 1999,
whichever occurs first, in which event the Employer shall have no
further obligation to the Employee.
3.2.2 By the Employer:
(a) For Cause, upon written notice to the Employee
pursuant to Section 1.5.1 hereof, which notice has been
approved by a resolution passed by two-thirds of the
directors then in office of either the Board of Directors of
the Bank or the Company, in which event the Employer shall
have no further obligation to the Employee except for the
payment of any amounts due and owing under Section 4 on the
effective date of termination;
(b) Without Cause at any time, provided that the
Employer shall give the Employee thirty (30) days' prior
written notice of its intent to terminate, in which event the
Employer shall be required to continue to meet its
obligations to the Employee under Sections 4.1, 4.2 and 4.4
for a period equal to the greater of (i) twelve (12) months
following the termination or (ii) the remaining Term; or
(c) Upon the Permanent Disability of Employee at any
time, provided that the Employer shall give the Employee
thirty (30) days' prior written notice of its intent to
terminate, in which event the Employer shall be required to
continue to meet its obligations to the Employee under
Sections 4.1, 4.2 and 4.4 for a period of twelve (12) months
following termination.
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<PAGE> 6
3.2.3 By the Employee:
(a) For Cause, in which event the Employer shall be
required to continue to meet its obligations to the Employee
under Sections 4.1, 4.2 and 4.4 for a period equal to the
greater of (i) twelve (12) months following the termination
or (ii) the remaining Term; or
(b) Without Cause or upon the Permanent Disability or
death of the Employee, provided that the Employee shall give
the Employer sixty (60) days' prior written notice of his
intent to terminate, in which event the Employer shall have
no further obligation to the Employee except future payment
of any amounts due and owing under Section 4 on the effective
date of the termination.
3.2.4 By the Employee for any reason within six (6) months
following a Change in Control, provided that the Employee shall
give written notice to the Employer of his intention to terminate
this Agreement, in which event the Employer shall be required to
pay the Employee in cash a lump sum amount no later than ninety
(90) days following the effective date of termination an amount
equal to 2.99 multiplied by the sum of (a) the average of the
Employee's Base Salary paid over the immediately preceding three
calendar years or, if less, over the Employee's entire employment
history with the Employer and (b) the average of the annual
Incentive Compensation (as defined below) paid over the
immediately preceding three calendar years or, if less, over the
Employee's entire employment history with the Employer.
Notwithstanding any other provision of this Agreement to the
contrary, if the aggregate amount provided for in this Agreement
and the other payments and benefits which the Employee has the
right to receive from the Employer (the "Total Amount") would
constitute a "parachute payment," as defined in Section 280G(b)(2)
of the Internal Revenue Code, the Total Amount shall be reduced so
that it does not exceed an amount equal to (i) 2.99 multiplied by
(ii) the Employee's "base amount" for the "base period," as such
terms are defined under Section 280G of the Internal Revenue Code.
In the event the Total Amount is reduced by reason of this
Section, the Employee shall be entitled to determine which portion
of the Total Amount is to be reduced so that the Total Amount to
be paid to the Employee, as so reduced, satisfies the limitation
described in the immediately preceding sentence.
3.2.5 At any time upon mutual, written agreement of the
parties, in which event the Employer shall have no further
obligation to the Employee except for the payment of any amounts
due and owing under Section 4 on the effective date of
termination unless otherwise set forth in the written agreement.
3.2.6 Notwithstanding anything in this Agreement to the
contrary, the Term shall end automatically upon the Employee's
death, in which event the Employer shall have no further
obligation to the Employee except for the payment of any amounts
due and
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<PAGE> 7
owing under Section 4 on the effective date of termination.
3.3 EFFECT OF TERMINATION. Termination of the employment of the
Employee pursuant to Section 3.2 shall be without prejudice to any right or
claim which may have previously accrued to either the Employer or the Employee
hereunder and shall not terminate, alter, supersede or otherwise affect the
terms and covenants and the rights and duties prescribed in this Agreement.
4. COMPENSATION. The Employee shall receive the following salary and
benefits:
4.1 BASE SALARY. During the Initial Term, the Employee shall be
compensated at a base rate of $110,000 annually (the "Base Salary"). The
Employee's Base Salary shall be reviewed by the Boards of Directors of the Bank
and the Company annually, and the Employee shall be entitled to receive
annually an increase in such amount, if any, as may be determined by such
boards of directors collectively. Base Salary shall be payable in accordance
with the Employer's normal payroll practices.
4.2 INCENTIVE COMPENSATION.
(a) The Employee shall be entitled to annual bonus compensation,
if any, in accordance with the terms specified in Exhibit B attached
hereto.
(b) The Employee shall also be entitled to a cash bonus of $15,000
payable immediately upon the opening of the Bank.
4.3 STOCK OPTIONS.
(a) As of the date of the prospectus for the Company's initial
public offering, the Employer will grant to the Employee an incentive
stock option to purchase, at a per share purchase price of $10.00, a
number of shares of the Company's common stock which is equal to 5% of the
number of shares of the Company's common stock which are sold in its
initial public offering. The option will become vested and exercisable in
20% increments, commencing on the first anniversary of the date of the
prospectus for the Company's initial public offering and continuing for
the next four successive anniversaries until the option is fully vested
and exercisable. The option shall expire generally upon the earlier of
ninety (90) days following termination of employment or upon the tenth
anniversary of the option grant date.
(b) In the event of a Change of Control, all options granted to
the Employee shall become one hundred percent (100%) vested and
exercisable.
4.4 HEALTH INSURANCE.
(a) The Employer shall reimburse the Employee for the cost of
premium payments paid
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<PAGE> 8
by the Employee for the Employee's current health insurance covering the
Employee and the members of his immediate family (i) until such time as
the Company adopts a health insurance plan for employees of the Company
and the Bank, (ii) until the Company and the Bank abandon their
organizational efforts, or (iii) until December 31, 1999, whichever occurs
first.
(b) In the event of (i) termination by the Employee For Cause
(Section 3.2.3(a)), or (ii) termination by the Employee following a
Change of Control (Section 3.2.4), the Employer shall reimburse Employee
for the cost of premium payments paid by Employee to continue his then
existing health insurance as provided by the Employer for a period of six
(6) months following the date of termination of employment.
(c) In the event of termination by the Employer Without Cause
(Section 3.2.2(b)), the Employer shall reimburse the Employee for the
cost of premium payments paid by Employer to continue his then existing
health insurance as provided by the Employer for a period of twelve (12)
months following the date of termination of employment.
4.5 AUTOMOBILE. Beginning as of the Effective Date, the Employer will
provide Employee with an automobile to be used by the Employee for business and
personal purposes. The make and model of the automobile shall be determined by
the Employer. The Employer will pay expenses associated with the operation,
maintenance, repair and insurance for the automobile.
4.6 BUSINESS EXPENSES; MEMBERSHIPS. The Employer specifically agrees to
reimburse the Employee for (a) reasonable business (including travel) expenses
incurred by him in the performance of his duties hereunder, as approved from
time to time by the Board of Directors of either the Bank or the Company, and
(b) beginning as of the Effective Date, the dues and business related
expenditures, including initiation fees, associated with membership in a single
country club and a single civic association both as selected by the Employee
and in professional associations which are commensurate with his position;
provided, however, that the Employee shall, as a condition of reimbursement,
submit verification of the nature and amount of such expenses in accordance
with reimbursement policies from time to time adopted by the Employer and in
sufficient detail to comply with rules and regulations promulgated by the
Internal Revenue Service.
4.7 VACATION. On a non-cumulative basis the Employee shall be entitled
to four (4) weeks of vacation in each successive twelve-month period during the
Term, during which his compensation shall be paid in full. Employee will
endeavor to take at least two consecutive weeks each year for vacation, with
other vacation to be taken at the time the Employer determines appropriate,
taking into account the requirements of the Employer.
4.8 LIFE INSURANCE. During the term of this Agreement, the Employer
will provide the Employee with term life insurance coverage providing a death
benefit of not less than $500,000, payable to such beneficiary or beneficiaries
as the Employee may designate.
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<PAGE> 9
4.9 BENEFITS. In addition to the benefits specifically described
herein, the Employee shall be entitled to such benefits as may be available
from time to time for executives of the Employer similarly situated to the
Employee. All such benefits shall be awarded and administered in accordance
with the Employer's standard policies and practices. Such benefits may include,
by way of example only, profit-sharing plans, retirement or investment funds,
dental, health, life and disability insurance benefits and such other benefits
as the Employer deems appropriate.
4.10 WITHHOLDING. The Employer may deduct from each payment of
compensation hereunder all amounts required to be deducted and withheld in
accordance with applicable federal and state income, FICA and other withholding
requirements.
5. COMPANY INFORMATION.
5.1 OWNERSHIP OF INFORMATION. All Company Information received or
developed by the Employee while employed by the Employer will remain the sole
and exclusive property of the Employer.
5.2 OBLIGATIONS OF THE EMPLOYEE. The Employee agrees (a) to hold
Company Information in strictest confidence, and (b) not to use, duplicate,
reproduce, distribute, disclose or otherwise disseminate Company Information or
any physical embodiments thereof and may in no event take any action causing or
fail to take any action necessary in order to prevent any Company Information
from losing its character or ceasing to qualify as Confidential Information or
a Trade Secret. In the event that the Employee is required by law to disclose
any Company Information, the Employee will not make such disclosure unless (and
then only to the extent that) the Employee has been advised by independent
legal counsel that such disclosure is required by law and then only after prior
written notice is given to the Company when the Employee becomes aware that
such disclosure has been requested and is required by law. This Section 5 shall
survive for a period of six (6) months following termination of this Agreement
for any reason with respect to Confidential Information, and shall survive
termination of this Agreement for any reason for so long as is permitted by the
then-current Georgia Trade Secrets Act of 1990, O.C.G.A. ss.ss.
10-1-760-10-1-767, with respect to Trade Secrets.
5.3 DELIVERY UPON REQUEST OR TERMINATION. Upon request by the Employer,
and in any event upon termination of his employment with the Employer, the
Employee will promptly deliver to the Employer all property belonging to the
Employer, including, without limitation, all Company Information then in his
possession or control.
6. NON-COMPETITION. The Employee agrees that during his employment by the
Employer hereunder and, in the event of his termination by the Employer with
Cause pursuant to Section 3.2.2(a), by the Employee without Cause pursuant to
Section 3.2.3(b) or by the Employee in connection with a Change in Control
pursuant to Section 3.2.4, for a period of twelve (12) months thereafter, he
will not (except on behalf of or with the prior written consent of the
Employer),
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<PAGE> 10
within the Area, either directly or indirectly, on his own behalf or in the
service or on behalf of others, as a principal, partner, officer, director,
manager, supervisor, administrator, consultant, executive employee or in any
other capacity which involves duties and responsibilities similar to those
undertaken for the Employer, or engage in any business which is the same as or
essentially the same as the Business of the Employer.
7. NON-SOLICITATION OF CUSTOMERS. The Employee agrees that during his
employment by the Employer hereunder and, in the event of his termination by
the Employer with Cause pursuant to Section 3.2.2(a), by the Employee without
Cause pursuant to Section 3.2.3(b) or by the Employee in connection with a
Change in Control pursuant to Section 3.2.4, for a period of twelve (12) months
thereafter, he will not (except on behalf of or with the prior written consent
of the Employer), within the Area, on his own behalf or in the service or on
behalf of others, solicit, divert or appropriate or attempt to solicit, divert
or appropriate, directly or by assisting others, any business from any of the
Employer's customers, including actively sought prospective customers, with
whom the Employee has or had material contact during the last two (2) years of
his employment, for purposes of providing products or services that are
competitive with those provided by the Employer.
8. NON-SOLICITATION OF EMPLOYEES. The Employee agrees that during his
employment by the Employer hereunder and, in the event of his termination by
the Employer with Cause pursuant to Section 3.2.2(a), by the Employee without
Cause pursuant to Section 3.2.3(b) or by the Employee in connection with a
Change in Control pursuant to Section 3.2.4, for a period of twelve (12) months
thereafter, he will not, within the Area, on his own behalf or in the service
or on behalf of others, solicit, recruit or hire away or attempt to solicit,
recruit or hire away, directly or by assisting others, any employee of the
Employer or its Affiliates, whether or not such employee is a full-time
employee or a temporary employee of the Employer or its Affiliates and whether
or not such employment is pursuant to written agreement and whether or not such
employment is for a determined period or is at will.
9. REMEDIES. The Employee agrees that the covenants contained in Sections 5
through 8 of this Agreement are of the essence of this Agreement; that each of
the covenants is reasonable and necessary to protect the business, interests
and properties of the Employer; and that irreparable loss and damage will be
suffered by the Employer should he breach any of the covenants. Therefore, the
Employee agrees and consents that, in addition to all the remedies provided by
law or in equity, the Employer shall be entitled to a temporary restraining
order and temporary and permanent injunctions to prevent a breach or
contemplated breach of any of the covenants. The Employer and the Employee
agree that all remedies available to the Employer or the Employee, as
applicable, shall be cumulative.
10. SEVERABILITY. The parties agree that each of the provisions included in
this Agreement is separate, distinct and severable from the other provisions of
this Agreement and that the invalidity or unenforceability of any Agreement
provision shall not affect the validity or enforceability of any
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<PAGE> 11
other provision of this Agreement. Further, if any provision of this Agreement
is ruled invalid or unenforceable by a court of competent jurisdiction because
of a conflict between the provision and any applicable law or public policy,
the provision shall be redrawn to make the provision consistent with and valid
and enforceable under the law or public policy.
11. NO SET-OFF BY THE EMPLOYEE. The existence of any claim, demand, action or
cause of action by the Employee against the Employer, or any Affiliate of the
Employer, whether predicated upon this Agreement or otherwise, shall not
constitute a defense to the enforcement by the Employer of any of its rights
hereunder.
12. NOTICE. All notices and other communications required or permitted under
this Agreement shall be in writing and, if mailed by prepaid first-class mail
or certified mail, return receipt requested, shall be deemed to have been
received on the earlier of the date shown on the receipt or three (3) business
days after the postmarked date thereof. In addition, notices hereunder may be
delivered by hand, facsimile transmission or overnight courier, in which event
the notice shall be deemed effective when delivered or transmitted. All notices
and other communications under this Agreement shall be given to the parties
hereto at the following addresses:
(i) If to the Employer, to it at:
2815 Meredyth Drive
Albany, GA 31707
(ii) If to the Employee, to him at:
Robert E. Lee
5101 Old Dawson Road
Albany, Georgia 31707
13. ASSIGNMENT. Neither party hereto may assign or delegate this Agreement or
any of its rights and obligations hereunder without the written consent of the
other party hereto.
14. WAIVER. A waiver by the Employer of any breach of this Agreement by the
Employee shall not be effective unless in writing, and no waiver shall operate
or be construed as a waiver of the same or another breach on a subsequent
occasion.
15. ARBITRATION. Any controversy or claim arising out of or relating to this
contract, or the breach thereof, shall be settled by binding arbitration in
accordance with the Commercial Arbitration Rules of the American Arbitration
Association. Judgment upon the award rendered by the arbitrator may be entered
only in the State Court of Dougherty County or the federal court for the Middle
District of Georgia. The Employer and the Employee agree to share equally the
fees and expenses associated with the arbitration proceedings.
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<PAGE> 12
16. ATTORNEYS' FEES. In the event that the parties have complied with this
Agreement with respect to arbitration of disputes and litigation ensues between
the parties concerning the enforcement of an arbitration award, the party
prevailing in such litigation shall be entitled to receive from the other party
all reasonable costs and expenses, including without limitation attorneys'
fees, incurred by the prevailing party in connection with such litigation, and
the other party shall pay such costs and expenses to the prevailing party
promptly upon demand by the prevailing party.
17. APPLICABLE LAW. This Agreement shall be construed and enforced under and in
accordance with the laws of the State of Georgia.
18. INTERPRETATION. Words importing any gender include all genders. Words
importing the singular form shall include the plural and vice versa. The terms
"herein", "hereunder", "hereby", "hereto", "hereof" and any similar terms refer
to this Agreement. Any captions, titles or headings preceding the text of any
article, section or subsection herein are solely for convenience of reference
and shall not constitute part of this Agreement or affect its meaning,
construction or effect.
19. ENTIRE AGREEMENT. This Agreement embodies the entire and final agreement of
the parties on the subject matter stated in the Agreement. No amendment or
modification of this Agreement shall be valid or binding upon the Employer or
the Employee unless made in writing and signed by both parties. All prior
understandings and agreements relating to the subject matter of this Agreement
are hereby expressly terminated.
20. RIGHTS OF THIRD PARTIES. Nothing herein expressed is intended to or shall
be construed to confer upon or give to any person, firm or other entity, other
than the parties hereto and their permitted assigns, any rights or remedies
under or by reason of this Agreement.
21. SURVIVAL. The obligations of the Employee pursuant to Sections 5, 6, 7, 8
and 9 shall survive the termination of the employment of the Employee hereunder
for the period designated under each of those respective sections.
22. JOINT AND SEVERAL. The obligations of the Bank and the Company to Employee
hereunder shall be joint and several.
[Remainder of Page Intentionally Left Blank]
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<PAGE> 13
IN WITNESS WHEREOF, the Employer and the Employee have executed and
delivered this Agreement as of the date first shown above.
THE BANK:
ALBANY BANK & TRUST, NATIONAL ASSOCIATION
(PROPOSED)
By: /s/ Robert E. Lee
----------------------------------------
Print Name: Robert E. Lee
---------------------------------
Title: President and Chief Executive Officer
--------------------------------------
THE COMPANY:
COMMUNITY CAPITAL BANCSHARES, INC.
By: /s/ Charles M. Jones
-----------------------------------------
Print Name: Charles M. Jones
---------------------------------
Title: Chairman
--------------------------------------
THE EMPLOYEE:
/s/ Robert E. Lee
--------------------------------------------
ROBERT E. LEE
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<PAGE> 14
[EXHIBIT A
INITIAL DUTIES OF THE EMPLOYEE
THE INITIAL DUTIES OF THE EMPLOYEE SHALL INCLUDE, IN ADDITION TO ANY OTHER
DUTIES ASSIGNED THE EMPLOYEE BY THE BOARD OF DIRECTORS OF THE BANK OR THE
COMPANY OR THEIR RESPECTIVE DESIGNEES, THE FOLLOWING:
- FOSTER A CORPORATE CULTURE THAT PROMOTES ETHICAL PRACTICES,
ENCOURAGES INDIVIDUAL INTEGRITY, FULFILLS SOCIAL
RESPONSIBILITY, AND IS CONDUCIVE TO ATTRACTING, RETAINING AND
MOTIVATING A DIVERSE GROUP OF TOP-QUALITY EMPLOYEES AT ALL
LEVELS.
- WORK WITH THE BOARD OF DIRECTORS TO DEVELOP A LONG-TERM
STRATEGY FOR THE COMPANY THAT CREATES SHAREHOLDER VALUE.
- DEVELOP AND RECOMMEND TO THE BOARD ANNUAL BUSINESS PLANS AND
BUDGETS THAT SUPPORT THE COMPANY'S LONG-TERM STRATEGY.
- MANAGE THE DAY-TO-DAY BUSINESS AFFAIRS OF THE COMPANY
APPROPRIATELY.
- USE BEST EFFORTS TO ACHIEVE THE COMPANY'S FINANCIAL AND
OPERATING GOALS AND OBJECTIVES.
- IMPROVE THE QUALITY AND VALUE OF THE PRODUCTS AND SERVICES
PROVIDED BY THE COMPANY.
- ENSURE THAT THE COMPANY MAINTAINS A SATISFACTORY COMPETITIVE
POSITION WITHIN ITS INDUSTRY.
- DEVELOP AN EFFECTIVE MANAGEMENT TEAM AND AN ACTIVE PLAN FOR
ITS DEVELOPMENT AND SUCCESSION, AND MAKE RECOMMENDATIONS TO
THE BOARD REGARDING HIRING, FIRING AND COMPENSATION.
- IMPLEMENT MAJOR CORPORATE POLICIES.]
<PAGE> 15
EXHIBIT B
Within ninety (90) days following the end of each calendar year of the
Employer's operations, the Employer shall pay the Employee a cash bonus equal
to the greater of (1) five percent (5%) of the Employer's consolidated pre-tax
earnings for that calendar year or (2) if the Employer meets or exceeds its
consolidated budgeted performance goals for the calendar year, $15,000 plus ten
percent (10%) of the positive difference between the Employer's consolidated
actual performance and budgeted performance with regard to pre-tax earnings (or
loss); provided, however, if the Employer does not meet its consolidated
budgeted performance goals for the calendar year, then this clause (2) shall be
deemed to be $0.00 (the "Incentive Compensation"). Notwithstanding the
foregoing, the Incentive Compensation payments contemplated by this Exhibit B
shall not become due and payable until the Board of Directors of the Bank has
determined, according to reasonable safety and soundness standards, that the
overall financial condition of the Bank, including asset quality, will not be
adversely affected by the payment of said amounts.
<PAGE> 1
EXHIBIT 10.4
EMPLOYMENT AGREEMENT
THIS AGREEMENT is made as of the 1st day of October, 1998, by and among
ALBANY BANK & TRUST, National Association (Proposed) (the "Bank"), a proposed
national bank; COMMUNITY CAPITAL BANCSHARES, INC., a bank holding company
incorporated under the laws of the State of Georgia (the "Company")
(collectively, the Bank and the Company are referred to hereafter as the
"Employer"), and DAVID C. GUILLEBEAU, a resident of the State of Georgia (the
"Employee").
RECITALS:
The Employer desires to employ the Employee as an Executive Vice
President and the Senior Lending Officer of the Bank and the Employee desires
to accept such employment.
In consideration of the above premises and the mutual agreements
hereinafter set forth, the parties hereby agree as follows:
1. DEFINITIONS. Whenever used in this Agreement, the following terms and their
variant forms shall have the meaning set forth below:
1.1 "AGREEMENT" shall mean this Agreement and any exhibits incorporated
herein together with any amendments hereto made in the manner described in this
Agreement.
1.2 "AFFILIATE" shall mean any business entity which controls the
Company, is controlled by or is under common control with the Company.
1.3 "AREA" shall mean the geographic area within the boundaries of
Dougherty and Lee Counties, Georgia. It is the express intent of the parties
that the Area as defined herein is the area where the Employee performs or
performed services on behalf of the Employer under this Agreement as of, or
within a reasonable time prior to, the termination of the Employee's employment
hereunder.
1.4 "BUSINESS OF THE EMPLOYER" shall mean the business conducted by the
Employer, which is commercial banking.
1.5 "CAUSE" shall mean:
1.5.1 With respect to termination by the Employer:
(a) A material breach of the terms of this Agreement by the
Employee, including, without limitation, failure by the Employee to
perform his duties and responsibilities in the manner and to the
extent required under this Agreement, which remains uncured after the
expiration of thirty (30) days following the delivery of written
notice of such breach to the Employee by the President of the Bank;
<PAGE> 2
(b) Conduct by the Employee that amounts to fraud, dishonesty or
willful misconduct in the performance of his duties and
responsibilities hereunder;
(c) The conviction of the Employee of a felony;
(d) Conduct by the Employee that amounts to gross and willful
insubordination or inattention to his duties and responsibilities
hereunder; or
(e) Conduct by the Employee that results in removal from his
position as an officer or employee of the Bank pursuant to a written
order by any regulatory agency with authority or jurisdiction over
the Bank.
1.5.2 With respect to termination by the Employee, a material
diminution in the powers, responsibilities or duties of the Employee hereunder
or a material breach of the terms of this Agreement by the Employer, which
remains uncured after the expiration of thirty (30) days following the delivery
of written notice of such breach to the Employer by the Employee.
1.6 "CHANGE IN CONTROL" means any one of the following events:
(a) the acquisition by any person or persons acting in concert
of the then outstanding voting securities of either the Bank or the
Company, if, after the transaction, the acquiring person (or persons)
owns, controls or holds with power to vote twenty-five percent (25%)
or more of any class of voting securities of either the Bank or the
Company, as the case may be, or such other transaction as may be
described under 12 C.F.R. Section 225.41(c)(1) or any successor
thereto;
(b) within any twelve-month period (beginning on or after the
Effective Date) the persons who were directors of either the Bank or
the Company immediately before the beginning of such twelve-month
period (the "Incumbent Directors") shall cease to constitute at least
a majority of such board of directors; provided that any director who
was not a director as of the Effective Date shall be deemed to be an
Incumbent Director if that director was elected to such board of
directors by, or on the recommendation of or with the approval of, at
least two-thirds of the directors who then qualified as Incumbent
Directors; and provided further that no director whose initial
assumption of office is in connection with an actual or threatened
election contest (as such terms are used in Rule 14a-11 of Regulation
14A promulgated under the Securities Exchange Act of 1934) relating
to the election of directors shall be deemed to be an Incumbent
Director;
(c) the approval by the stockholders of either the Bank or the
Company of a reorganization, merger or consolidation, with respect to
which persons who were the stockholders of the Bank or the Company,
as the case may be, immediately prior to such
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reorganization, merger or consolidation do not, immediately
thereafter, own more than fifty percent (50%) of the combined voting
power entitled to vote in the election of directors of the
reorganized, merged or consolidated company's then outstanding voting
securities; or
(d) the sale, transfer or assignment of all or substantially all
of the assets of the Company and its subsidiaries to any third party.
1.7 "COMPANY INFORMATION" means Confidential Information and Trade
Secrets.
1.8 "CONFIDENTIAL INFORMATION" means data and information relating to the
business of the Employer (which does not rise to the status of a Trade Secret)
which is or has been disclosed to the Employee or of which the Employee became
aware as a consequence of or through the Employee's relationship to the
Employer and which has value to the Employer and is not generally known to its
competitors. Confidential Information shall not include any data or information
that has been voluntarily disclosed to the public by the Employer (except where
such public disclosure has been made by the Employee without authorization) or
that has been independently developed and disclosed by others, or that
otherwise enters the public domain through lawful means.
1.9 "EFFECTIVE DATE" shall mean the date on which the Employer advises
the Escrow Agent that the terms of the Escrow Agreement have been satisfied and
instructs the Escrow Agent to release the escrowed funds to the Employer.
1.10 "ESCROW AGENT" shall mean The Bankers Bank.
1.11 "ESCROW AGREEMENT" shall mean that certain agreement by and between
the Company and The Bankers Bank whereby The Bankers Bank holds in escrow the
funds received from the sale of the Company's common stock until certain terms
and conditions are satisfied.
1.12 "INITIAL TERM" shall mean that period of time commencing on October
1, 1998 (the "Beginning Date") and running until the earlier of the close of
business on the last business day immediately preceding the third anniversary
of the Beginning Date or any termination of employment of the Employee under
this Agreement as provided for in Section 3.
1.13 "PERMANENT DISABILITY" shall mean the total inability of the
Employee to perform his duties under this Agreement for the duration of the
short-term disability period under the Employer's policy then in effect as
certified by a physician chosen by the Employer and reasonably acceptable to
the Employee.
1.14 "TERM" shall mean the Initial Term and all subsequent renewal
periods.
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1.15 "TRADE SECRETS" means Employer information including, but not
limited to, technical or nontechnical data, formulas, patterns, compilations,
programs, devices, methods, techniques, drawings, processes, financial data,
financial plans, product plans or lists of actual or potential customers or
suppliers which (a) 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 (b)
is the subject of efforts that are reasonable under the circumstances to
maintain its secrecy.
2. DUTIES.
2.1 POSITION. The Employee is employed initially as an Executive Vice
President and the Senior Lending Officer of the Bank and, subject to the
direction of the President of the Bank, shall perform and discharge well and
faithfully the duties which may be assigned to him from time to time by the
Bank in connection with the conduct of its business. The duties and
responsibilities of the Employee are set forth on Exhibit A attached hereto.
2.2 FULL-TIME STATUS. In addition to the duties and responsibilities
specifically assigned to the Employee pursuant to Section 2.1 hereof, the
Employee shall: (a) devote substantially all of his time, energy and skill
during regular business hours to the performance of the duties of his
employment (reasonable vacations and reasonable absences due to illness
excepted) and faithfully and industriously perform such duties; (b) diligently
follow and implement all management policies and decisions communicated to him
by the President of the Bank; and (c) timely prepare and forward to the
President of the Bank all reports and accounting as may be requested of the
Employee.
2.3 PERMITTED ACTIVITIES. The Employee shall devote his entire
business time, attention and energies to the Business of the Employer and shall
not during the Term be engaged (whether or not during normal business hours) in
any other business or professional activity, whether or not such activity is
pursued for gain, profit or other pecuniary advantage; but this shall not be
construed as preventing the Employee from (a) investing his personal assets in
businesses which (subject to clause (b) below) are not in competition with the
Business of the Employer and which will not require any services on the part of
the Employee in their operation or affairs and in which his participation is
solely that of an investor, (b) purchasing securities in any corporation whose
securities are regularly traded provided that such purchase shall not result in
him collectively owning beneficially at any time five percent (5%) or more of
the equity securities of any business in competition with the Business of the
Employer; and (c) participating in civic and professional affairs and
organizations and conferences, preparing or publishing papers or books or
teaching so long as the President of the Bank approves of such activities prior
to the Employee's engaging in them.
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<PAGE> 5
3. TERM AND TERMINATION.
3.1 TERM. This Agreement shall remain in effect for the Initial Term. At
the end of the Initial Term and at the end of each twelve-month extension
thereof, this Agreement shall automatically be extended for a successive
twelve-month period unless either party gives written notice to the other of
its intent not to extend this Agreement with such written notice to be given
not less than ninety (90) days prior to the end of the Initial Term or such
twelve-month period. In the event such notice of non-extension is properly
given, this Agreement shall terminate at the end of the remaining term then in
effect.
3.2 TERMINATION. During the Term, the employment of the Employee under
this Agreement may be terminated only as follows:
3.2.1 By the Employer or the Employee in the event that the Company
and the Bank abandon their organizational efforts or that the
Effective Date does not occur on or before December 31, 1999,
whichever occurs first, in which event the Employer shall have no
further obligation to the Employee.
3.2.2 By the Employer:
(a) For Cause, upon written notice to the Employee pursuant to
Section 1.5.1 hereof, in which event the Employer shall have no
further obligation to the Employee except for the payment of any
amounts due and owing under Section 4 on the effective date of
termination;
(b) Without Cause at any time, provided that the Employer
shall give the Employee thirty (30) days' prior written notice
of its intent to terminate, in which event the Employer shall be
required to continue to meet its obligations to the Employee
under Sections 4.1, 4.2 and 4.4 for a period equal to the
greater of (i) twelve (12) months following the termination or
(ii) the remaining Term; or
(c) Upon the Permanent Disability of Employee at any time,
provided that the Employer shall give the Employee thirty (30)
days' prior written notice of its intent to terminate, in which
event the Employer shall be required to continue to meet its
obligations to the Employee under Sections 4.1, 4.2 and 4.4 for
a period of twelve (12) months.
3.2.3 By the Employee:
(a) For Cause, in which event the Employer shall be required
to continue to meet its obligations to the Employee under
Sections 4.1, 4.2 and 4.4 for a period equal to the greater of
(i) twelve (12) months following the termination or (ii) the
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<PAGE> 6
remaining Term; or
(b) Without Cause or upon the Permanent Disability or death
of the Employee, provided that the Employee shall give the
Employer sixty (60) days' prior written notice of his intent to
terminate, in which event the Employer shall have no further
obligation to the Employee except future payment of any amounts
due and owing under Section 4 on the effective date of the
termination.
3.2.4 By the Employee for any reason within six (6) months following
a Change in Control, provided that the Employee shall give written
notice to the Employer of his intention to terminate this Agreement,
in which event the Employer shall be required to pay the Employee in
cash a lump sum amount no later than ninety (90) days following the
effective date of termination an amount equal to one (1) multiplied
by the sum of (a) the average of the Employee's Base Salary paid over
the immediately preceding three calendar years or, if less, over the
Employee's entire employment history with the Employer and (b) the
average of the annual Incentive Compensation (as defined below) paid
over the immediately preceding three calendar years or, if less, over
the Employee's entire employment history with the Employer.
Notwithstanding any other provision of this Agreement to the
contrary, if the aggregate amount provided for in this Agreement and
the other payments and benefits which the Employee has the right to
receive from the Employer (the "Total Amount") would constitute a
"parachute payment," as defined in Section 280G(b)(2) of the Internal
Revenue Code, the Total Amount shall be reduced so that it does not
exceed an amount equal to (i) 2.99 multiplied by (ii) the Employee's
"base amount" for the "base period," as such terms are defined under
Section 280G of the Internal Revenue Code. In the event the Total
Amount is reduced by reason of this Section, the Employee shall be
entitled to determine which portion of the Total Amount is to be
reduced so that the Total Amount to be paid to the Employee, as so
reduced, satisfies the limitation described in the immediately
preceding sentence.
3.2.5 At any time upon mutual, written agreement of the parties, in
which event the Employer shall have no further obligation to the
Employee except for the payment of any amounts due and owing under
Section 4 on the effective date of termination unless otherwise set
forth in the written agreement.
3.2.6 Notwithstanding anything in this Agreement to the contrary,
the Term shall end automatically upon the Employee's death, in which
event the Employer shall have no further obligation to the Employee
except for the payment of any amounts due and owing under Section 4
on the effective date of termination.
3.3 EFFECT OF TERMINATION. Termination of the employment of the Employee
pursuant to Section 3.2 shall be without prejudice to any right or claim which
may have previously accrued to either the Employer or the Employee hereunder
and shall not terminate, alter, supersede or
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otherwise affect the terms and covenants and the rights and duties prescribed
in this Agreement.
4. COMPENSATION. The Employee shall receive the following salary and benefits:
4.1 BASE SALARY. During the Initial Term, the Employee shall be
compensated at a base rate of $80,000 annually (the "Base Salary"). The
Employee's Base Salary shall be reviewed by the President of the Bank annually,
and shall be adjusted annually by such amount, if any, as may be determined by
the President in his sole discretion. Base Salary shall be payable in
accordance with the Employer's normal payroll practices.
4.2 INCENTIVE COMPENSATION. Within ninety (90) days following the end of
each calendar year of the Employer's operations, the Employer shall pay the
Employee a cash bonus, if any, based upon satisfying criteria established by
the President of the Bank (in his sole discretion) and communicated to the
Employee in writing no later than April 1 of that calendar year (the "Incentive
Compensation").
4.3 STOCK OPTIONS.
(a) As of the date the Company's initial public offering is closed,
the Employer will grant to the Employee an incentive stock option to
purchase, at a per share purchase price of $10.00, a number of shares of
the Company's common stock which is equal to 2% of the number of shares of
the Company's common stock which are sold in its initial public offering.
The option will become vested and exercisable in 20% increments,
commencing on the first anniversary of the option grant date and
continuing for the next four successive anniversaries until the option is
fully vested and exercisable. The option shall expire generally upon the
earlier of ninety (90) days following termination of employment or upon
the tenth anniversary of the option grant date.
(b) In the event of a Change of Control, all options granted to
the Employee shall become one hundred percent (100%) vested and
exercisable.
4.4 HEALTH INSURANCE.
(a) The Employer shall reimburse the Employee for the cost of
premium payments paid by the Employee for the Employee's current health
insurance covering the Employee and the members of his immediate family
(i) until such time as the Company adopts a health insurance plan for
employees of the Company and the Bank, (ii) until the Company and the
Bank abandon their organizational efforts, or (iii) until December 31,
1999, whichever occurs first.
(b) In the event of (i) termination by the Employee For Cause
(Section 3.2.3(a)), or (ii) termination by the Employee following a
Change of Control (Section 3.2.4), the Employer shall reimburse Employee
for the cost of premium payments paid by Employee to continue his
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<PAGE> 8
then existing health insurance as provided by the Employer for a period of
six (6) months following the date of termination of employment.
(c) In the event of termination by the Employer Without Cause
(Section 3.2.2(b)) or upon Permanent Disability (Section 3.2.2(c)), the
Employer shall reimburse the Employee for the cost of premium payments
paid by Employer to continue his then existing health insurance as
provided by the Employer for a period of twelve (12) months following the
date of termination of employment.
4.5 AUTOMOBILE. Beginning as of the Effective Date, the Employer will
provide Employee with an automobile allowance of $400 per month.
4.6 BUSINESS EXPENSES; MEMBERSHIPS. The Employer specifically agrees to
reimburse the Employee for (a) reasonable business (including travel) expenses
incurred by him in the performance of his duties hereunder, as approved from
time to time by the President of the Bank, and (b) beginning as of the
Effective Date, the dues and business related expenditures, including
initiation fees, associated with membership in a single country club and a
single civic association both as selected by the Employee and in professional
associations which are commensurate with his position; provided, however, that
the Employee shall, as a condition of reimbursement, submit verification of the
nature and amount of such expenses in accordance with reimbursement policies
from time to time adopted by the Employer and in sufficient detail to comply
with rules and regulations promulgated by the Internal Revenue Service.
4.7 VACATION. On a non-cumulative basis the Employee shall be entitled to
four (4) weeks of vacation in each successive twelve-month period during the
Term, during which his compensation shall be paid in full. Employee will
endeavor to take at least two consecutive weeks each year for vacation, with
other vacation to be taken at the time the Employer determines appropriate,
taking into account the requirements of the Employer.
4.8 BENEFITS. In addition to the benefits specifically described herein,
the Employee shall be entitled to such benefits as may be available from time
to time for executives of the Employer similarly situated to the Employee. All
such benefits shall be awarded and administered in accordance with the
Employer's standard policies and practices. Such benefits may include, by way
of example only, profit-sharing plans, retirement or investment funds, dental,
health, life and disability insurance benefits and such other benefits as the
Employer deems appropriate.
4.9 WITHHOLDING. The Employer may deduct from each payment of
compensation hereunder all amounts required to be deducted and withheld in
accordance with applicable federal and state income, FICA and other withholding
requirements.
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<PAGE> 9
5. COMPANY INFORMATION.
5.1 OWNERSHIP OF INFORMATION. All Company Information received or
developed by the Employee while employed by the Employer will remain the sole
and exclusive property of the Employer.
5.2 OBLIGATIONS OF THE EMPLOYEE. The Employee agrees (a) to hold Company
Information in strictest confidence, and (b) not to use, duplicate, reproduce,
distribute, disclose or otherwise disseminate Company Information or any
physical embodiments thereof and may in no event take any action causing or
fail to take any action necessary in order to prevent any Company Information
from losing its character or ceasing to qualify as Confidential Information or
a Trade Secret. In the event that the Employee is required by law to disclose
any Company Information, the Employee will not make such disclosure unless (and
then only to the extent that) the Employee has been advised by independent
legal counsel that such disclosure is required by law and then only after prior
written notice is given to the Company when the Employee becomes aware that
such disclosure has been requested and is required by law. This Section 5 shall
survive for a period of six (6) months following termination of this Agreement
for any reason with respect to Confidential Information, and shall survive
termination of this Agreement for any reason for so long as is permitted by the
then-current Georgia Trade Secrets Act of 1990, O.C.G.A. ss.ss.
10-1-760-10-1-767, with respect to Trade Secrets.
5.3 DELIVERY UPON REQUEST OR TERMINATION. Upon request by the Employer,
and in any event upon termination of his employment with the Employer, the
Employee will promptly deliver to the Employer all property belonging to the
Employer, including, without limitation, all Company Information then in his
possession or control.
6. NON-COMPETITION. The Employee agrees that during his employment by the
Employer hereunder and, in the event of his termination by the Employer with
Cause pursuant to Section 3.2.2(a), by the Employee without Cause pursuant to
Section 3.2.3(b) or by the Employee in connection with a Change in Control
pursuant to Section 3.2.4, for a period of twelve (12) months thereafter, he
will not (except on behalf of or with the prior written consent of the
Employer), within the Area, either directly or indirectly, on his own behalf or
in the service or on behalf of others, as a principal, partner, officer,
director, manager, supervisor, administrator, consultant, executive employee or
in any other capacity which involves duties and responsibilities similar to
those undertaken for the Employer, or engage in any business which is the same
as or essentially the same as the Business of the Employer.
7. NON-SOLICITATION OF CUSTOMERS. The Employee agrees that during his
employment by the Employer hereunder and, in the event of his termination by
the Employer with Cause pursuant to Section 3.2.2(a), by the Employee without
Cause pursuant to Section 3.2.3(b) or by the Employee in connection with a
Change in Control pursuant to Section 3.2.4, for a period of twelve (12) months
thereafter, he will not (except on behalf of or with the prior written consent
of the
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<PAGE> 10
Employer), within the Area, on his own behalf or in the service or on behalf of
others, solicit, divert or appropriate or attempt to solicit, divert or
appropriate, directly or by assisting others, any business from any of the
Employer's customers, including actively sought prospective customers, with
whom the Employee has or had material contact during the last two (2) years of
his employment, for purposes of providing products or services that are
competitive with those provided by the Employer.
8. NON-SOLICITATION OF EMPLOYEES. The Employee agrees that during his
employment by the Employer hereunder and, in the event of his termination by
the Employer with Cause pursuant to Section 3.2.2(a), by the Employee without
Cause pursuant to Section 3.2.3(b) or by the Employee in connection with a
Change in Control pursuant to Section 3.2.4, for a period of twelve (12) months
thereafter, he will not, within the Area, on his own behalf or in the service
or on behalf of others, solicit, recruit or hire away or attempt to solicit,
recruit or hire away, directly or by assisting others, any employee of the
Employer or its Affiliates, whether or not such employee is a full-time
employee or a temporary employee of the Employer or its Affiliates and whether
or not such employment is pursuant to written agreement and whether or not such
employment is for a determined period or is at will.
9. REMEDIES. The Employee agrees that the covenants contained in Sections 5
through 8 of this Agreement are of the essence of this Agreement; that each of
the covenants is reasonable and necessary to protect the business, interests
and properties of the Employer; and that irreparable loss and damage will be
suffered by the Employer should he breach any of the covenants. Therefore, the
Employee agrees and consents that, in addition to all the remedies provided by
law or in equity, the Employer shall be entitled to a temporary restraining
order and temporary and permanent injunctions to prevent a breach or
contemplated breach of any of the covenants. The Employer and the Employee
agree that all remedies available to the Employer or the Employee, as
applicable, shall be cumulative.
10. SEVERABILITY. The parties agree that each of the provisions included in
this Agreement is separate, distinct and severable from the other provisions of
this Agreement and that the invalidity or unenforceability of any Agreement
provision shall not affect the validity or enforceability of any other
provision of this Agreement. Further, if any provision of this Agreement is
ruled invalid or unenforceable by a court of competent jurisdiction because of
a conflict between the provision and any applicable law or public policy, the
provision shall be redrawn to make the provision consistent with and valid and
enforceable under the law or public policy.
11. NO SET-OFF BY THE EMPLOYEE. The existence of any claim, demand, action or
cause of action by the Employee against the Employer, or any Affiliate of the
Employer, whether predicated upon this Agreement or otherwise, shall not
constitute a defense to the enforcement by the Employer of any of its rights
hereunder.
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<PAGE> 11
12. NOTICE. All notices and other communications required or permitted under
this Agreement shall be in writing and, if mailed by prepaid first-class mail
or certified mail, return receipt requested, shall be deemed to have been
received on the earlier of the date shown on the receipt or three (3) business
days after the postmarked date thereof. In addition, notices hereunder may be
delivered by hand, facsimile transmission or overnight courier, in which event
the notice shall be deemed effective when delivered or transmitted. All notices
and other communications under this Agreement shall be given to the parties
hereto at the following addresses:
(i) If to the Employer, to it at:
2815 Meredyth Drive
Albany, GA 31707
(ii) If to the Employee, to him at:
5009 Barrington Drive
Albany, GA 31707
13. ASSIGNMENT. Neither party hereto may assign or delegate this Agreement or
any of its rights and obligations hereunder without the written consent of the
other party hereto.
14. WAIVER. A waiver by the Employer of any breach of this Agreement by the
Employee shall not be effective unless in writing, and no waiver shall operate
or be construed as a waiver of the same or another breach on a subsequent
occasion.
15. ARBITRATION. Any controversy or claim arising out of or relating to this
contract, or the breach thereof, shall be settled by binding arbitration in
accordance with the Commercial Arbitration Rules of the American Arbitration
Association. Judgment upon the award rendered by the arbitrator may be entered
only in the State Court of Dougherty County or the federal court for the Middle
District of Georgia. The Employer and the Employee agree to share equally the
fees and expenses associated with the arbitration proceedings.
16. ATTORNEYS' FEES. In the event that the parties have complied with this
Agreement with respect to arbitration of disputes and litigation ensues between
the parties concerning the enforcement of an arbitration award, the party
prevailing in such litigation shall be entitled to receive from the other party
all reasonable costs and expenses, including without limitation attorneys'
fees, incurred by the prevailing party in connection with such litigation, and
the other party shall pay such costs and expenses to the prevailing party
promptly upon demand by the prevailing party.
17. APPLICABLE LAW. This Agreement shall be construed and enforced under and
in accordance with the laws of the State of Georgia.
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18. INTERPRETATION. Words importing any gender include all genders. Words
importing the singular form shall include the plural and vice versa. The terms
"herein", "hereunder", "hereby", "hereto", "hereof" and any similar terms refer
to this Agreement. Any captions, titles or headings preceding the text of any
article, section or subsection herein are solely for convenience of reference
and shall not constitute part of this Agreement or affect its meaning,
construction or effect.
19. ENTIRE AGREEMENT. This Agreement embodies the entire and final agreement
of the parties on the subject matter stated in the Agreement. No amendment or
modification of this Agreement shall be valid or binding upon the Employer or
the Employee unless made in writing and signed by both parties. All prior
understandings and agreements relating to the subject matter of this Agreement
are hereby expressly terminated.
20. RIGHTS OF THIRD PARTIES. Nothing herein expressed is intended to or shall
be construed to confer upon or give to any person, firm or other entity, other
than the parties hereto and their permitted assigns, any rights or remedies
under or by reason of this Agreement.
21. SURVIVAL. The obligations of the Employee pursuant to Sections 5, 6, 7, 8
and 9 shall survive the termination of the employment of the Employee hereunder
for the period designated under each of those respective sections.
22. JOINT AND SEVERAL. The obligations of the Bank and the Company to Employee
hereunder shall be joint and several.
[Remainder of Page Intentionally Left Blank]
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IN WITNESS WHEREOF, the Employer and the Employee have executed and
delivered this Agreement as of the date first shown above.
THE BANK:
ALBANY BANK & TRUST, NATIONAL ASSOCIATION
(PROPOSED)
By: /s/ ROBERT E. LEE
----------------------------------------
Print Name: Robert E. Lee
--------------------------------
Title: President and Chief Executive Officer
-------------------------------------
THE COMPANY:
COMMUNITY CAPITAL BANCSHARES, INC.
By: /s/ CHARLES M. JONES
-------------------------------------
Print Name: Charles M. Jones
-----------------------------
Title: Chairman
----------------------------------
THE EMPLOYEE:
/s/ DAVID C. GUILLEBEAU
-----------------------------------------
DAVID C. GUILLEBEAU
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<PAGE> 14
EXHIBIT A
Position Description
SENIOR VICE PRESIDENT - LENDING
Function:
The SVP - Lending has overall responsibility for the bank's commercial,
consumer and real estate loan portfolio. The SVP - Lending recommends to the
President, commercial, real estate and consumer loan objectives, policies and
practices and provides advice and guidance to consumer lenders and loan
administrators.
Specific Duties:
(1) Originates and approves commercial, consumer, and real estate
loans within the approved lending limits and guidelines
established by the Board of Directors. Submits loans
exceeding lending limits to the Loan Committee for approval.
(2) Responsible for the establishing and maintaining loan
policies paying particular attention to under-writing
guidelines, loan administration policies, credit information
and collection procedures.
(3) Recommends additional loan loss provisions to insure
compliance with the current loan classification standards.
(4) Recommends the pricing of all loan products.
(5) Supervises loan officers and loan administrators and insures
that competent, well trained staff are in place at all times.
(6) Represents the bank at various civic and professional
organizations.
(7) Ensures compliance with provisions of Community Reinvestment
Act.
(8) Responsible for establishing and monitoring an officer call
program for soliciting of deposits and loans, as well as
selling fee income services.
(9) Manage the loan portfolio to minimize past due loans,
non-performing assets and non-accrual loans. Hold past due
meetings as needed.
(10) Oversee foreclosure and repossession process as well as
maintenance and prompt disposal of non-performing assets.
Reports to: Chief Executive Officer
<PAGE> 15
ADMENDMENT TO
EMPLOYMENT AGREEMENT
This amendment (the "Amendment") to the Employment Agreement (the
"Agreement"), dated as of the 1st day of October, 1998, by and among ALBANY
BANK & TRUST, National Association (Proposed) (the "Bank"), a proposed national
bank, COMMUNITY CAPITAL BANCSHARES, INC., a bank holding company incorporated
under the laws of the State of Georgia (the "Company") (collectively the Bank
and the Company are referred to hereafter as the "Employer"), and DAVID C.
GUILLEBEAU, a resident of the State of Georgia (the "Employee"), is made and
entered into this 9th day of November, 1998.
WHEREAS, the parties hereto desire to amend the Agreement for the
purpose of amending the grant date of the stock options to be granted to the
Employee by the Company pursuant to the terms of the Agreement.
NOW, THEREFORE, in consideration of the mutual covenants contained herein
and other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, Employer and Employee agree to amend the Agreement as
follows:
1. Section 4.3(a) of the Agreement is hereby amended to read as follows:
"(a) As of the date of the prospectus for the Company's initial
public offering, the Employer will grant to the Employee an incentive
stock option to purchase, at a per share purchase price of $10.00, a
number of shares of the Company's common stock which is equal to 2%
of the number of shares of the Company's common stock which are sold
in its initial public offering. The option will become vested and
exercisable in 20% increments, commencing on the first anniversary of
the date of the prospectus for the Company's initial public offering
and continuing for the next four successive anniversaries until the
option is fully vested and exercisable. The option shall expire
generally upon the earlier of ninety (90) days following termination
of employment or upon the tenth anniversary of the option grant
date."
2. Except as hereinabove amended, the Agreement shall remain otherwise in
full force and effect.
3. This Amendment may be executed in one or more counterparts, each of
which shall be deemed to be an original, but all of which together shall
constitute one and the same instrument.
<PAGE> 16
IN WITNESS WHEREOF, the Employer and the Employee have executed and
delivered this Amendment to the Agreement as of the 9th day of November, 1998.
THE BANK:
ALBANY BANK & TRUST, NATIONAL ASSOCIATION
(PROPOSED)
By: /s/ ROBERT E. LEE
-------------------------------------
Robert E. Lee
President and Chief Executive Officer
THE COMPANY:
COMMUNITY CAPITAL BANCSHARES, INC.
By: /s/ CHARLES M. JONES, III
-------------------------------------
Charles M. Jones, III
Chairman and Chief Executive Officer
THE EMPLOYEE:
/s/ DAVID C. GUILLEBEAU
-----------------------------------------
DAVID C. GUILLEBEAU
<PAGE> 1
EXHIBIT 10.5
FORM OF WARRANT AGREEMENT
THIS AGREEMENT is made and entered into as of this ____ day of
_____________, 19____, by and between COMMUNITY CAPITAL BANCSHARES, INC., a
Georgia corporation (the "Corporation"), and _________________________
("Warrant Holder").
W I T N E S S E T H
WHEREAS, Warrant Holder has served as an organizer in the formation of
the Corporation and the formation and establishment of Albany Bank & Trust,
N.A. (the "Bank"), the wholly-owned subsidiary of the Corporation; and
WHEREAS, Warrant Holder has purchased __________ shares of the
Corporation's common stock, $1.00 par value per share (the "Common Stock"), at
a price per share of $10.00 per share; and
WHEREAS, Warrant Holder will provided services to the Corporation as
a director of the Corporation; and
WHEREAS, the Corporation, in recognition of the financial risk
undertaken by the Warrant Holder in organizing the Bank and the Company,
desires to provide Warrant Holder with the right to acquire the same number of
shares as the organizer purchased in the initial stock offering of the
Corporation's Common Stock, including any additional shares purchased
specifically to attain the minimum subscription requirements of the initial
offering.
NOW, THEREFORE, in consideration of the premises and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
1. Grant of Warrant. Subject to the terms, restriction, limitations
and conditions stated herein, the Corporation hereby grants to Warrant Holder
the right (the "Warrant") to purchase all or any part of an aggregate of
_______________ (_____%) shares of the Common Stock, subject to adjustment in
accordance with Section 7 hereof.
2. Term.
(a). The term for the exercise of said Warrant begins at
9:00 a.m., Eastern Time, on the first anniversary of the date that the
Corporation first issues its common stock (the "Issue Date") and ends
at 5:00 p.m., Eastern Time, on the earlier of the tenth anniversary of
such issuance date of 90 days after Warrant Holder ceases to serve as
a director of the Corporation (the "Expiration Time"). The Warrant
will vest at the rate of 20% per year beginning on the first
anniversary of the Issue Date. On each successive anniversary of such
Issue Date, an additional 20% of said Warrant shall vest. The portion
of the Warrant
<PAGE> 2
which is vested may be exercised in whole, or from time to time in
part, at any time prior to the Expiration Time.
(b) Notwithstanding any other provision of this Agreement,
the Warrants shall expire on any earlier date than that provided in
Section 2(a), the primary federal regulator of the Corporation on the
Bank (the "Federal Regulator") may require the Warrant Holder to
exercise or forfeit his or her Warrant if the capital of the
Corporation or the Bank falls below the minimum requirements as
determined by the Federal Regulator.
3. Purchase Price. The price per share to be paid by Warrant Holder
for the shares of Common Stock subject to this Warrant shall be $10.00, subject
to adjustment as set forth in Section 6 hereof (such price, as adjusted,
hereinafter called the "Purchase Price").
4. Exercise of Warrant. The Warrant may be exercised by Warrant
Holder by delivery to the Corporation, at the address of the Corporation set
forth under Section 10(a) hereof or such other address as to which the
Corporation advises Warrant Holder pursuant to Section 10(a) hereof, of the
following:
(a) Written notice of exercise specifying the number of
shares of Common Stock with respect to which the Warrant is being
exercised; and
(b) A cashier's or certified check payable to the Corporation
for the full amount of the aggregate Purchase Price for the number of
shares as to which the Warrant is being exercised.
5. Issuance of Shares. Upon receipt of the items set forth in
Section 4, and subject to the terms hereof, the Corporation shall cause to be
delivered to Warrant Holder stock certificates for the number of shares
specified in the notice to exercise, such share or shares to be registered
under the name of Warrant Holder. Notwithstanding the foregoing, the
Corporation shall not be required to issue or deliver any certificate for
shares of the Common Stock purchased upon exercise of the Warrant or any
portion thereof prior to the fulfillment of the following conditions:
(a) The admission of such shares for listing on all stock
exchanges on which the Common Stock is then listed;
(b) The completion of any registration or other qualification
of such shares which the Corporation shall deem necessary or
advisable under any federal or state law or under the rulings or
regulations of the Securities and Exchange Commission or nay other
governmental regulatory body;
(c) The obtaining of any approval or other clearance from any
federal or state governmental agency or body, which the Corporation
shall determine to be necessary or advisable; or
(d) The lapse of such reasonable period of time following the
exercise of the Warrant as the Corporation from time to time may
establish for reasons of administrative convenience.
2
<PAGE> 3
The Corporation shall have no obligation to obtain the fulfillment of
these conditions; provided, however, Warrant Holder shall have one full
calendar year after these conditions have been fulfilled to exercise his or her
warrants granted herein, notwithstanding any other provision herein.
6. Antidilution, Etc.
(a) If, prior to the Expiration Time, the Corporation shall
subdivide its outstanding shares of Common Stock into a greater
number of shares, or declare and pay a dividend of its Common Stock
payable in additional shares of its Common Stock, the Purchase Price
as then in effect shall be proportionately reduced, and the number of
shares of Common Stock then subject to exercise under the Warrant
(and not previously exercised) shall be proportionately increased.
(b) If, prior to the Expiration Time, the Corporation shall
combine its outstanding shares of the Common Stock into a smaller
number of shares, the Purchase Price, as then in effect, shall be
proportionately increased, and the number of shares of Common Stock
then subject to exercise under the Warrant (and not previously
exercised), shall be proportionately reduced.
7. Reorganization, Reclassification, Consolidation or Merger. If,
prior to the Expiration Time, there shall be any reorganization or
reclassification of the Common Stock (other than a subdivision or combination
of shares provided for in Section 6 hereof), or any consolidation or merger of
the Corporation with another entity, the Warrant Holder shall thereafter be
entitled to receive, during the term hereof and upon payment of the Purchase
Price, the number of shares of stock or other securities or property of the
Corporation or of the successor entity (or its parent company) resulting from
such consolidation or merger, as the case may be, to which a holder of the
Common Stock, deliverable upon the exercise of this Warrant, would have been
entitled upon such reorganization, reclassification, consolidation or merger;
and in any case, appropriate adjustment (as determined by the Board of
Directors of the Corporation in its sole discretion) shall be made in the
application of the provisions herein set forth with respect to the rights and
interest thereafter of the Warrant Holder to the end that the provisions set
forth herein (including the adjustment of the Purchase Price and the number of
shares issuable upon the exercise of this Warrant) shall thereafter be
applicable, as near as may reasonably be practicable, in relation to any shares
or other property thereafter deliverable upon the exercise hereof.
8. Notice of Adjustments. Upon any adjustment provided for in
Section 6 or Section 7 hereof, the Corporation, within thirty (30) days
thereafter, shall give written notice thereof to the Warrant Holder at the
address set forth under Section 10(a) hereof or such other address as Warrant
Holder may advise the Corporation pursuant to Section 10(a) hereof, which
notice shall state the Warrant Price as adjusted and the increased or decreased
number of shares purchasable upon the exercise of this Warrant, setting forth
in reasonable detail the method of calculation of each.
3
<PAGE> 4
9. Transfer and Assignment.
(a) This Warrant may not be assigned, transferred (except as
aforesaid), pledged or hypothecated in any way (whether by operation
of law or otherwise) and shall not be subject to execution,
attachment or similar process. Any attempted assignment, transfer,
pledge, hypothecation or other disposition of this Warrant shall be
null and void and without legal effect.
(b) Shares of Common Stock acquired by exercise of the
Warrant granted hereby may not be transferred or sold unless the
transfer is exempt from further regulatory approval or otherwise
permissible under applicable law, including state and federal
securities laws, and will bear a legend to this effect.
10. Miscellaneous.
(a) All notices, requests, demands and other communications
required or permitted hereunder shall be in writing and shall be
deemed to have been duly given when delivered by hand, telegram or
facsimile transmission, or if mailed, by postage prepaid first class
mail, on the third business day after mailing, to the following
address (or at such other address as a party may notify the other
hereunder):
To the Corporation:
Community Capital Bancshares, Inc.
430 Tift Avenue
Albany, Georgia 31701
Attention: Robert E. Lee, President
To the Warrant Holder:
-------------------------------------
-------------------------------------
-------------------------------------
(b) The Corporation covenants that it has reserved and will
keep available, solely for the purpose of issue upon the exercise
hereof, a sufficient number of shares of Common Stock to permit the
exercise hereof in full.
(c) No holder of this Warrant, as such, shall be entitled to
vote or receive dividends with respect to the shares of Common Stock
subject hereto or be deemed to be a shareholder of the Corporation
for any purpose until such Common Stock has been issued.
(d) This Warrant may be amended only by an instrument in
writing executed by the party against whom enforcement of amendment
is sought.
4
<PAGE> 5
(e) This Warrant may be executed in counterparts, each of
which shall be deemed an original, but all of which shall constitute
one and the same instrument.
(f) This Warrant shall be governed by and construed and
enforced in accordance with the laws of the State of Georgia.
5
<PAGE> 6
IN WITNESS WHEREOF, the Corporation has caused this Warrant to be
signed by its duly authorized officers and its corporate seal to be affixed
hereto, and the Warrant Holder has executed this Warrant under seal, all as of
the day and year first above written.
COMMUNITY CAPITAL BANCSHARES, INC.
By:
------------------------------------------
Robert E. Lee
President
WARRANT HOLDER
(SEAL)
----------------------------------------
6
<PAGE> 1
EXHIBIT 10.6
COMMUNITY CAPITAL BANCSHARES, INC.
1998 STOCK INCENTIVE PLAN
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
SECTION 1 DEFINITIONS ................................................................. 1
1.1 Definitions ............................................................. 1
SECTION 2 THE STOCK INCENTIVE PLAN .................................................... 4
2.1 Purpose of the Plan ..................................................... 4
2.2 Stock Subject to the Plan ............................................... 5
2.3 Administration of the Plan .............................................. 5
2.4 Eligibility and Limits .................................................. 5
SECTION 3 TERMS OF STOCK INCENTIVES ................................................... 6
3.1 General Terms and Conditions ............................................ 6
3.2 Terms and Conditions of Options ......................................... 7
(a) Option Price ..................................................... 7
(b) Option Term ...................................................... 8
(c) Payment .......................................................... 8
(d) Conditions to the Exercise of an Option .......................... 8
(e) Termination of Incentive Stock Option ............................ 8
(f) Special Provisions for Certain Substitute Options ................ 9
3.3 Terms and Conditions of Stock Appreciation Rights ....................... 9
(a) Settlement ....................................................... 9
(b) Conditions to Exercise ........................................... 9
3.4 Terms and Conditions of Stock Awards .................................... 9
3.5 Terms and Conditions of Dividend Equivalent Rights ......................10
(a) Payment ..........................................................10
(b) Conditions to Payment ............................................10
3.6 Terms and Conditions of Performance Unit Awards .........................10
(a) Payment ..........................................................10
(b) Conditions to Payment ............................................10
3.7 Terms and Conditions of Phantom Shares ..................................10
(a) Payment ..........................................................11
(b) Conditions to Payment ............................................11
3.8 Treatment of Awards Upon Termination of Service .........................11
SECTION 4 RESTRICTIONS ON STOCK .......................................................11
4.1 Escrow of Shares ........................................................11
4.2 Restrictions on Transfer ................................................11
SECTION 5 GENERAL PROVISIONS ..........................................................12
5.1 Withholding .............................................................12
5.2 Changes in Capitalization; Merger; Liquidation ..........................12
5.3 Cash Awards .............................................................13
5.4 Compliance with Code ....................................................13
</TABLE>
-i-
<PAGE> 3
<TABLE>
<S> <C> <C>
5.5 Right to Terminate Service ..............................................13
5.6 Restrictions on Delivery and Sale of Shares; Legends ....................13
5.7 Non-alienation of Benefits ..............................................14
5.8 Termination and Amendment of the Plan ...................................14
5.9 Stockholder Approval ....................................................14
5.10 Choice of Law ...........................................................14
5.11 Effective Date of Plan ..................................................14
</TABLE>
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<PAGE> 4
COMMUNITY CAPITAL BANCSHARES, INC.
1998 STOCK INCENTIVE PLAN
SECTION 1 DEFINITIONS
1.1 Definitions. Whenever used herein, the masculine pronoun shall be
deemed to include the feminine, and the singular to include the plural, unless
the context clearly indicates otherwise, and the following capitalized words and
phrases are used herein with the meaning thereafter ascribed:
(a)"Board of Directors" means the board of directors of the Company.
(b)"Cause" has the same meaning as provided in the employment
agreement between the Participant and the Company or, if applicable, any
Affiliate of the Company on the date of Termination of Service, or if no such
definition or employment agreement exists, "Cause" means conduct amounting to
(1) fraud or dishonesty against the Company or its Affiliates, (2) Participant's
willful misconduct, repeated refusal to follow the reasonable directions of the
board of directors of the Company or its Affiliates, or knowing violation of law
in the course of performance of the duties of Participant's service with the
Company or its Affiliates, (3) repeated absences from work without a reasonable
excuse, (4) repeated intoxication with alcohol or drugs while on the Company or
Affiliates' premises during regular business hours, (5) a conviction or plea of
guilty or nolo contendere to a felony or a crime involving dishonesty, or (6) a
breach or violation of the terms of any agreement to which Participant and the
Company or its Affiliates are party.
(c)"Change in Control" means any one of the following events
which may occur after the date the Stock Incentive is granted and without the
approval of the Board of Directors of the Company:
(1) the acquisition by any individual, entity or "group",
within the meaning of Section 13(d)(3) or Section 14(d)(2) of the Securities
Exchange Act of 1934, as amended, (a "Person") of beneficial ownership (within
the meaning of Rule 13d-3 promulgated under the Securities Exchange Act of 1934)
of voting securities of the Company where such acquisition causes any such
Person to own twenty-five percent (25%) or more of the combined voting power of
the then outstanding voting securities then entitled to vote generally in the
election of directors (the "Outstanding Voting Securities"); provided, however,
that for purposes of this Section 1(c)(1), the following shall not be deemed to
result in a Change in Control, (i) any acquisition directly from the Company,
unless such a Person subsequently acquires additional shares of Outstanding
Voting Securities other than from the Company, in which case any such subsequent
acquisition shall be deemed to be a Change in Control; or (ii) any acquisition
by any employee benefit plan (or related trust) sponsored or maintained by the
Company or any corporation controlled by the Company;
(2) a merger, consolidation, share exchange, combination,
reorganization or like transaction involving the Company in which the
stockholders of the Company immediately prior to such transaction do not own at
least fifty percent (50%) of the value or voting power of the
<PAGE> 5
issued and outstanding capital stock of the Company or its successor immediately
after such transaction;
(3) the sale or transfer (other than as security for the Company's
obligations) of more than fifty percent (50%) of the assets of the Company in
any one transaction or a series of related transactions occurring within a one
(1) year period in which the Company, any corporation controlled by the Company
or the stockholders of the Company immediately prior to the transaction do not
own at least fifty percent (50%) of the value or voting power of the issued and
outstanding equity securities of the acquiror immediately after the transaction;
(4) the sale or transfer of more than fifty percent (50%) of the
value or voting power of the issued and outstanding capital stock of the Company
by the holders thereof in any one transaction or a series of related
transactions occurring within a one (1) year period in which the Company, any
corporation controlled by the Company or the stockholders of the Company
immediately prior to the transaction do not own at least fifty percent (50%) of
the value or voting power of the issued and outstanding equity securities of the
acquiror immediately after the transaction; or
(5) the dissolution or liquidation of the Company.
(d)"Code" means the Internal Revenue Code of 1986, as amended.
(e)"Committee" means the committee appointed by the Board of
Directors to administer the Plan pursuant to Plan Section 2.3.
(f)"Company" means Community Capital Bancshares, Inc., a bank
holding company organized under the laws of the State of Georgia.
(g)"Disability" has the same meaning as provided in the
long-term disability plan or policy maintained or, if applicable, most recently
maintained, by the Company or, if applicable, any Affiliate of the Company for
the Participant. If no long-term disability plan or policy was ever maintained
on behalf of the Participant or, if the determination of Disability relates to
an Incentive Stock Option, Disability shall mean that condition described in
Code Section 22(e)(3), as amended from time to time. In the event of a dispute,
the determination of Disability shall be made by the Board of Directors and
shall be supported by advice of a physician competent in the area to which such
Disability relates.
(h)"Disposition" means any conveyance, sale, transfer,
assignment, pledge or hypothecation, whether outright or as security, inter
vivos or testamentary, with or without consideration, voluntary or involuntary.
(i)"Dividend Equivalent Rights" means certain rights to
receive cash payments as described in Plan Section 3.5.
(j)"Fair Market Value" refers to the determination of value
of a share of Stock. If the Stock is actively traded on any national securities
exchange or any Nasdaq quotation or market system, Fair Market Value shall mean
the closing price at which sales of Stock shall have
-2-
<PAGE> 6
been sold on the most recent trading date immediately prior to the date of
determination, as reported by any such exchange or system selected by the
Committee on which the shares of Stock are then traded. If the shares of Stock
are not actively traded on any such exchange or system, Fair Market Value shall
mean the arithmetic mean of the bid and asked prices for the shares of Stock on
the most recent trading date within a reasonable period prior to the
determination date as reported by such exchange or system. If there are no bid
and asked prices within a reasonable period or if the shares of Stock are not
traded on any exchange or system as of the determination date, Fair Market Value
shall mean the fair market value of a share of Stock as determined by the
Committee taking into account such facts and circumstances deemed to be material
by the Committee to the value of the Stock in the hands of the Participant;
provided that, for purposes of granting awards other than Incentive Stock
Options, Fair Market Value of a share of Stock may be determined by the
Committee by reference to the average market value determined over a period
certain or as of specified dates, to a tender offer price for the shares of
Stock (if settlement of an award is triggered by such an event) or to any other
reasonable measure of fair market value and provided further that, for purposes
of granting Incentive Stock Options, Fair Market Value of a share of Stock shall
be determined in accordance with the valuation principles described in the
regulations promulgated under Code Section 422.
(k)"Incentive Stock Option" means an incentive stock option,
as defined in Code Section 422, described in Plan Section 3.2.
(l)"Non-Qualified Stock Option" means a stock option, other
than an option qualifying as an Incentive Stock Option, described in Plan
Section 3.2.
(m)"Option" means a Non-Qualified Stock Option or an Incentive Stock
Option.
(n)"Over 10% Owner" means an individual who at the time an
Incentive Stock Option is granted owns Stock possessing more than 10% of the
total combined voting power of the Company or one of its Parents or
Subsidiaries, determined by applying the attribution rules of Code Section
424(d).
(o)"Parent" means any corporation (other than the Company) in
an unbroken chain of corporations ending with the Company if, with respect to
Incentive Stock Options, at the time of granting of the Incentive Stock Option,
each of the corporations other than the Company owns stock possessing 50% or
more of the total combined voting power of all classes of stock in one of the
other corporations in the chain.
(p)"Participant" means an individual who receives a Stock Incentive
hereunder.
(q)"Performance Unit Award" refers to a performance unit
award described in Plan Section 3.6.
(r)"Phantom Shares" refers to the rights described in Plan Section 3.7.
(s)"Plan" means the Community Capital Bancshares, Inc. 1998 Stock
Incentive Plan.
-3-
<PAGE> 7
(t)"Stock" means the Company's common stock, $1.00 par value per share.
(u)"Stock Appreciation Right" means a stock appreciation
right described in Plan Section 3.3.
(v)"Stock Award" means a stock award described in Plan Section 3.4.
(w)"Stock Incentive Agreement" means an agreement between the
Company and a Participant or other documentation evidencing an award of a Stock
Incentive.
(x)"Stock Incentive Program" means a written program
established by the Committee pursuant to which Stock Incentives, other than
Options or Stock Appreciation Rights, are awarded under the Plan under uniform
terms, conditions and restrictions set forth in such written program and
distributed among eligible officers, employees and directors.
(y)"Stock Incentives" means, collectively, Dividend Equivalent Rights,
Incentive Stock Options, Non-Qualified Stock Options, Performance Unit Awards,
Phantom Shares, Stock Appreciation Rights and Stock Awards.
(z)"Subsidiary" means any corporation (other than the
Company) in an unbroken chain of corporations beginning with the Company if,
with respect to Incentive Stock Options, at the time of the granting of the
Incentive Stock Option, each of the corporations other than the last corporation
in the unbroken chain owns stock possessing 50% or more of the total combined
voting power of all classes of stock in one of the other corporations in the
chain.
(aa)"Termination of Service" means the termination of the
service relationship, whether employment or otherwise, between a Participant and
the Company and its Affiliates, regardless of the fact that severance or similar
payments are made to the Participant for any reason, including, but not by way
of limitation, a termination by resignation, discharge, death, Disability or
retirement. The Committee shall, in its absolute discretion, determine the
effect of all matters and questions relating to Termination of Service,
including, but not by way of limitation, the question of whether a leave of
absence constitutes a Termination of Service, or whether a Termination of
Service is for Cause.
SECTION 2 THE STOCK INCENTIVE PLAN
2.1 Purpose of the Plan. The Plan is intended to (a) provide incentive to
officers, employees, directors and consultants of the Company and any Affiliates
to stimulate their efforts toward the continued success of the Company and to
operate and manage the business in a manner that will provide for the long-term
growth and profitability of the Company; (b) encourage stock ownership by
officers, employees, directors and consultants by providing them with a means to
acquire a proprietary interest in the Company by acquiring shares of Stock or to
receive compensation which is based upon appreciation in the value of Stock; and
(c) provide a means of obtaining and rewarding key personnel.
-4-
<PAGE> 8
2.2 Stock Subject to the Plan. Subject to adjustment in accordance with
Section 5.2, 90,000 shares of Stock (the "Maximum Plan Shares") are hereby
reserved exclusively for issuance pursuant to Stock Incentives. At no time shall
the Company have outstanding Stock Incentives and shares of Stock issued in
respect of Stock Incentives in excess of the Maximum Plan Shares. The shares of
Stock attributable to the nonvested, unpaid, unexercised, unconverted or
otherwise unsettled portion of any Stock Incentive that is forfeited or
cancelled or expires or terminates for any reason without becoming vested, paid,
exercised, converted or otherwise settled in full shall again be available for
purposes of the Plan.
2.3 Administration of the Plan. The Plan shall be administered by the
Committee. The Committee shall have full authority in its discretion to
determine the officers, employees, directors and consultants of the Company or
any Affiliates to whom Stock Incentives shall be granted and the terms and
provisions of Stock Incentives, subject to the Plan. Subject to the provisions
of the Plan, the Committee shall have full and conclusive authority to interpret
the Plan; to prescribe, amend and rescind rules and regulations relating to the
Plan; to determine the terms and provisions of the respective Stock Incentive
Agreements or Stock Incentive Programs and to make all other determinations
necessary or advisable for the proper administration of the Plan. The
Committee's determinations under the Plan need not be uniform and may be made by
it selectively among persons who receive, or are eligible to receive, awards
under the Plan (whether or not such persons are similarly situated). The
Committee's decisions shall be final and binding on all Participants.
The Committee shall consist of at least two members of the Board of
Directors and, during those periods that the Company is subject to the
provisions of Section 16 of the Securities Exchange Act of 1934, the Board of
Directors shall consider the advisability of whether each such appointee shall
qualify as a "non-employee director", as that term is defined in Rule 16b-3 as
then in effect under the Securities Exchange Act of 1934, and, during those
periods that the Company has issued equity securities required to be registered
under Section 12 of the Securities Exchange Act of 1934, the Board of Directors
shall consider the advisability of whether each such appointee shall separately
qualify as an "outside director", within the meaning of Code Section 162(m) and
the regulations promulgated thereunder. Each member of the Committee shall serve
at the discretion of the Board of Directors and the Board of Directors may from
time to time remove members from or add members to the Committee. Vacancies on
the Committee shall be filled by the Board of Directors.
The Committee shall select one of its members as Chairman and shall hold
meetings at the times and in the places as it may deem advisable. Acts approved
by a majority of the Committee in a meeting at which a quorum is present, or
acts reduced to or approved in writing by a majority of the members of the
Committee, shall be the valid acts of the Committee.
2.4 Eligibility and Limits. Stock Incentives may be granted only to
officers, employees, directors and consultants of the Company or any Affiliate;
provided, however, that an Incentive Stock Option may only be granted to an
employee of the Company or any Parent or Subsidiary. In the case of Incentive
Stock Options, the aggregate Fair Market Value (determined as of the date an
Incentive Stock Option is granted) of stock with respect to which stock options
intended to meet the requirements of Code Section 422 become exercisable for the
first time by an individual during any calendar year under all plans of the
Company and its Parents and Subsidiaries shall not exceed
-5-
<PAGE> 9
$100,000; provided further, that if the limitation is exceeded, the Incentive
Stock Option(s) which cause the limitation to be exceeded shall be treated as
Non-Qualified Stock Option(s); except as the terms of the Stock Incentive
Agreement may expressly provide otherwise. To the extent required under Code
Section 162(m) and regulations thereunder for compensation to be treated as
qualified performance-based compensation, subject to adjustment in accordance
with Section 5.2, the maximum number of shares Stock with respect to which
Options or Stock Appreciation Rights may be granted during any single fiscal
year of the Company to any employee shall not exceed 60,000.
SECTION 3 TERMS OF STOCK INCENTIVES
3.1 General Terms and Conditions.
(a)The number of shares of Stock as to which a Stock
Incentive shall be granted shall be determined by the Committee in its sole
discretion, subject to the provisions of Section 2.2 as to the total number of
shares available for grants under the Plan. If a Stock Incentive Agreement so
provides, a Participant may be granted a new Option to purchase a number of
shares of Stock equal to the number of previously owned shares of Stock tendered
in payment of the Exercise Price (as defined below) for each share of Stock
purchased pursuant to the terms of the Stock Incentive Agreement.
(b)Each Stock Incentive shall be evidenced by a Stock
Incentive Agreement in such form and containing such terms, conditions and
restrictions as the Committee may determine is appropriate or be made subject to
the terms of a Stock Incentive Program, containing such terms, conditions and
restrictions as the Committee may determine is appropriate. Each Stock Incentive
Agreement or Stock Incentive Program shall be subject to the terms of the Plan
and any provision in a Stock Incentive Agreement or the Stock Incentive Program
that is inconsistent with the Plan shall be null and void.
(c)The date a Stock Incentive is granted shall be the date on
which the Committee has approved the terms and conditions of the Stock Incentive
Agreement or the Stock Incentive Program and has determined the recipient of the
Stock Incentive and the number of shares covered by the Stock Incentive and has
taken all such other action necessary to complete the grant of the Stock
Incentive.
(d)The Committee may provide in any Stock Incentive Agreement
or pursuant to any Stock Incentive Program (or subsequent to the award of a
Stock Incentive but prior to its expiration or cancellation, as the case may be)
that, in the event of a Change in Control, the Stock Incentive shall or may be
cashed out on the basis of any price not greater than the highest price paid for
a share of Stock in any transaction reported by any market or system selected by
the Committee on which the shares of Stock are then actively traded during a
specified period immediately preceding or including the date of the Change in
Control or offered for a share of Stock in any tender offer occurring during a
specified period immediately preceding or including the date the tender offer
commences; provided that, in no case shall any such specified period exceed one
(1) year (the "Change in Control Price"). For purposes of this Subsection, the
cashout of a Stock Incentive shall be determined as follows:
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(1) Options shall be cashed out on the basis of the
excess, if any, of the Change in Control Price (but not more than the Fair
Market Value of the Stock on the date of the cash-out in the case of Incentive
Stock Options) over the Exercise Price with or without regard to whether the
Option may otherwise be exercisable only in part;
(2) Stock Awards and Phantom Shares shall be cashed out in an amount
equal to the Change in Control Price with or without regard to any conditions or
restrictions otherwise applicable to any such Stock Incentive; and
(3) Stock Appreciation Rights, Dividend Equivalent Rights
and Performance Unit Awards shall be cashed out with or without regard to any
conditions or restrictions otherwise applicable to any such Stock Incentive and
the amount of the cash out shall be determined by reference to the number of
shares of Stock that would be required to pay the Participant in kind for the
value of the Stock Incentive as of the date of the Change in Control multiplied
by the Change in Control Price.
(e)Any Stock Incentive may be granted in connection with all
or any portion of a previously or contemporaneously granted Stock Incentive.
Exercise or vesting of a Stock Incentive granted in connection with another
Stock Incentive may result in a pro rata surrender or cancellation of any
related Stock Incentive, as specified in the applicable Stock Incentive
Agreement or Stock Incentive Program.
(f)Stock Incentives shall not be transferable or assignable
except by will or by the laws of descent and distribution and shall be
exercisable, during the Participant's lifetime, only by the Participant; in the
event of the Disability of the Participant, by the legal representative of the
Participant; or in the event of the death of the participant, by the personal
representative of the Participant's estate or if no personal representative has
been appointed, by the successor in interest determined under the Participant's
will.
3.2 Terms and Conditions of Options. Each Option granted under the Plan
shall be evidenced by a Stock Incentive Agreement. At the time any Option is
granted, the Committee shall determine whether the Option is to be an Incentive
Stock Option or a Non-Qualified Stock Option, and the Option shall be clearly
identified as to its status as an Incentive Stock Option or a Non-Qualified
Stock Option. At the time any Incentive Stock Option is exercised, the Company
shall be entitled to place a legend on the certificates representing the shares
of Stock purchased pursuant to the Option to clearly identify them as shares of
Stock purchased upon exercise of an Incentive Stock Option. An Incentive Stock
Option may only be granted within ten (10) years from the earlier of the date
the Plan is adopted by the Board of Directors or approved by the Company's
stockholders.
(a) Option Price. Subject to adjustment in accordance with Section 5.2
and the other provisions of this Section 3.2, the exercise price (the "Exercise
Price") per share of Stock purchasable under any Option shall be as set forth in
the applicable Stock Incentive Agreement. With respect to each grant of an
Incentive Stock Option to a Participant who is not an Over 10% Owner or to each
grant of any Option to a Participant who is then a "covered employee," within
the meaning of Code Section 162(m), the Exercise Price per share shall not be
less than the Fair Market Value on the date the Option is granted. With respect
to each grant of an Incentive Stock Option to
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a Participant who is an Over 10% Owner, the Exercise Price shall not be less
than 110% of the Fair Market Value on the date the Option is granted.
(b)Option Term. The term of an Option shall be as specified in the
applicable Stock Incentive Agreement; provided, however that any Incentive Stock
Option granted to a Participant who is not an Over 10% Owner shall not be
exercisable after the expiration of ten (10) years after the date the Option is
granted and any Incentive Stock Option granted to an Over 10% Owner shall not be
exercisable after the expiration of five (5) years after the date the Option is
granted.
(c)Payment. Payment for all shares of Stock purchased pursuant to
exercise of an Option shall be made in any form or manner authorized by the
Committee in the Stock Incentive Agreement or by amendment thereto, including,
but not limited to, cash or, if the Stock Incentive Agreement provides, (1) by
delivery to the Company of a number of shares of Stock which have been owned by
the holder for at least six (6) months prior to the date of exercise having an
aggregate Fair Market Value of not less than the product of the Exercise Price
multiplied by the number of shares the Participant intends to purchase upon
exercise of the Option on the date of delivery; (2) in a cashless exercise
through a broker; or (3) by having a number of shares of Stock withheld, the
Fair Market Value of which as of the date of exercise is sufficient to satisfy
the Exercise Price. In its discretion, the Committee also may authorize (at the
time an Option is granted or thereafter) Company financing to assist the
Participant as to payment of the Exercise Price on such terms as may be offered
by the Committee in its discretion. Payment shall be made at the time that the
Option or any part thereof is exercised, and no shares shall be issued or
delivered upon exercise of an Option until full payment has been made by the
Participant. The holder of an Option, as such, shall have none of the rights of
a stockholder.
(d)Conditions to the Exercise of an Option. Each Option granted under
the Plan shall be exercisable by whom, at such time or times, or upon the
occurrence of such event or events, and in such amounts, as the Committee shall
specify in the Stock Incentive Agreement; provided, however, that subsequent to
the grant of an Option, the Committee, at any time before complete termination
of such Option, may accelerate the time or times at which such Option may be
exercised in whole or in part, including, without limitation, upon a Change in
Control and may permit the Participant or any other designated person to
exercise the Option, or any portion thereof, for all or part of the remaining
Option term notwithstanding any provision of the Stock Incentive Agreement to
the contrary.
(e)Termination of Incentive Stock Option. With respect to an Incentive
Stock Option, in the event of the Termination of Service of a Participant, the
Option or portion thereof held by the Participant which is unexercised shall
expire, terminate, and become unexercisable no later than the expiration of
three (3) months after the date of Termination of Service; provided, however,
that in the case of a holder whose Termination of Service is due to death or
Disability, one (1) year shall be substituted for such three (3) month period.
For purposes of this Subsection (e), Termination of Service of the Participant
shall not be deemed to have occurred if the Participant is employed by another
corporation (or a parent or subsidiary corporation of such other corporation)
which has assumed the Incentive Stock Option of the Participant in a transaction
to which Code Section 424(a) is applicable.
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<PAGE> 12
(f) Special Provisions for Certain Substitute Options. Notwithstanding
anything to the contrary in this Section 3.2, any Option issued in substitution
for an option previously issued by another entity, which substitution occurs in
connection with a transaction to which Code Section 424(a) is applicable, may
provide for an exercise price computed in accordance with such Code Section and
the regulations thereunder and may contain such other terms and conditions as
the Committee may prescribe to cause such substitute Option to contain as nearly
as possible the same terms and conditions (including the applicable vesting and
termination provisions) as those contained in the previously issued option being
replaced thereby.
3.3 Terms and Conditions of Stock Appreciation Rights. Each Stock
Appreciation Right granted under the Plan shall be evidenced by a Stock
Incentive Agreement. A Stock Appreciation Right may be granted in connection
with all or any portion of a previously or contemporaneously granted Stock
Incentive or not in connection with a Stock Incentive. A Stock Appreciation
Right shall entitle the Participant to receive the excess of (a) the Fair Market
Value of a specified or determinable number of shares of the Stock at the time
of payment or exercise over (b) a specified price (1) which, in the case of a
Stock Appreciation Right granted in connection with an Option, shall be not less
than the Exercise Price for that number of shares and (2) which, in the case of
a Stock Appreciation Right that is granted to a Participant who is then a
"covered employee," within the meaning of Code Section 162(m), shall not be less
than the Fair Market Value of the Stock at the time of the award. A Stock
Appreciation Right granted in connection with a Stock Incentive may only be
exercised to the extent that the related Stock Incentive has not been exercised,
paid or otherwise settled. The exercise of a Stock Appreciation Right granted in
connection with a Stock Incentive shall result in a pro rata surrender or
cancellation of any related Stock Incentive to the extent the Stock Appreciation
Right has been exercised.
(a) Settlement. Upon settlement of a Stock Appreciation Right, the
Company shall pay to the Participant the appreciation in cash or shares of Stock
(valued at the aggregate Fair Market Value on the date of payment or exercise)
as provided in the Stock Incentive Agreement or, in the absence of such
provision, as the Committee may determine.
(b) Conditions to Exercise. Each Stock Appreciation Right granted under
the Plan shall be exercisable or payable at such time or times, or upon the
occurrence of such event or events, and in such amounts, as the Committee shall
specify in the Stock Incentive Agreement; provided, however, that subsequent to
the grant of a Stock Appreciation Right, the Committee, at any time before
complete termination of such Stock Appreciation Right, may accelerate the time
or times at which such Stock Appreciation Right may be exercised or paid in
whole or in part.
3.4 Terms and Conditions of Stock Awards. The number of shares of Stock
subject to a Stock Award and restrictions or conditions on such shares, if any,
shall be as the Committee determines, and the certificate for such shares shall
bear evidence of any restrictions or conditions. Subsequent to the date of the
grant of the Stock Award, the Committee shall have the power to permit, in its
discretion, an acceleration of the expiration of an applicable restriction
period with respect to any part or all of the shares awarded to a Participant.
The Committee may require a cash payment from the Participant in an amount no
greater than the aggregate Fair Market Value of the shares of Stock awarded
determined at the date of grant in exchange for the grant of a Stock Award or
may grant a Stock Award without the requirement of a cash payment.
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3.5 Terms and Conditions of Dividend Equivalent Rights. A Dividend
Equivalent Right shall entitle the Participant to receive payments from the
Company in an amount determined by reference to any cash dividends paid on a
specified number of shares of Stock to Company stockholders of record during the
period such rights are effective. The Committee may impose such restrictions and
conditions on any Dividend Equivalent Right as the Committee in its discretion
shall determine, including the date any such right shall terminate and may
reserve the right to terminate, amend or suspend any such right at any time.
(a) Payment. Payment in respect of a Dividend Equivalent Right may be
made by the Company in cash or shares of Stock (valued at Fair Market Value on
the date of payment) as provided in the Stock Incentive Agreement or, in the
absence of such provision, as the Committee may determine.
(b) Conditions to Payment. Each Dividend Equivalent Right granted under
the Plan shall be payable at such time or times, or upon the occurrence of such
event or events, and in such amounts, as the Committee shall specify in the
Stock Incentive Agreement or Stock Incentive Program; provided, however, that
subsequent to the grant of a Dividend Equivalent Right, the Committee, at any
time before complete termination of such Dividend Equivalent Right, may
accelerate the time or times at which such Dividend Equivalent Right may be paid
in whole or in part.
3.6 Terms and Conditions of Performance Unit Awards. A Performance Unit
Award shall entitle the Participant to receive, at a future date, payment of an
amount equal to all or a portion of the value of a number of units (stated in
terms of a designated dollar amount per unit) granted by the Committee, all as
the Committee shall specify in the Stock Incentive Agreement or Stock Incentive
Program. At the time of the grant, the Committee must determine the base value
of each unit, the number of units subject to a Performance Unit Award, the
performance factors applicable to the determination of the ultimate payment
value of the Performance Unit Award and the period over which Company
performance shall be measured. The Committee may provide for an alternate base
value for each unit under certain specified conditions.
(a) Payment. Payment in respect of Performance Unit Awards may be made
by the Company in cash or shares of Stock (valued at Fair Market Value on the
date of payment) as provided in the Stock Incentive Agreement or Stock Incentive
Program or, in the absence of such provision, as the Committee may determine.
(b) Conditions to Payment. Each Performance Unit Award granted under the
Plan shall be payable at such time or times, or upon the occurrence of such
event or events, and in such amounts, as the Committee shall specify in the
Stock Incentive Agreement or Stock Incentive Program; provided, however, that
subsequent to the grant of a Performance Unit Award, the Committee, at any time
before complete termination of such Performance Unit Award, may accelerate the
time or times at which such Performance Unit Award may be paid in whole or in
part.
3.7 Terms and Conditions of Phantom Shares. Phantom Shares shall entitle
the Participant to receive, at a future date, payment of an amount equal to all
or a portion of the Fair Market Value of a number of shares of Stock at the end
of a certain period, all as the Committee shall specify in the Stock Incentive
Agreement or Stock Incentive Program. At the time of the
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<PAGE> 14
grant, the Committee shall determine the factors which will govern the portion
of the rights so payable, including, at the discretion of the Committee, any
performance criteria that must be satisfied as a condition to payment.
(a) Payment. Payment in respect of Phantom Shares may be made by the
Company in cash or shares of Stock (valued at Fair Market Value on the date of
payment) as provided in the Stock Incentive Agreement or Stock Incentive Program
or, in the absence of such provision, as the Committee may determine.
(b) Conditions to Payment. Each Phantom Share granted under the Plan
shall be payable at such time or times, or upon the occurrence of such event or
events, and in such amounts, as the Committee shall specify in the Stock
Incentive Agreement or Stock Incentive Program; provided, however, that
subsequent to the grant of a Phantom Share, the Committee, at any time before
complete termination of such Phantom Share, may accelerate the time or times at
which such Phantom Share may be paid in whole or in part.
3.8 Treatment of Awards Upon Termination of Service. Except as otherwise
provided by Plan Section 3.2(e), any award under this Plan to a Participant who
suffers a Termination of Service may be cancelled, accelerated, paid or
continued, as provided in the Stock Incentive Agreement or Stock Incentive
Program or, in the absence of such provision, as the Committee may determine.
The portion of any award exercisable in the event of continuation or the amount
of any payment due under a continued award may be adjusted by the Committee to
reflect the Participant's period of service from the date of grant through the
date of the Participant's Termination of Service or such other factors as the
Committee determines are relevant to its decision to continue the award.
SECTION 4 RESTRICTIONS ON STOCK
4.1 Escrow of Shares. Any certificates representing the shares of Stock
issued under the Plan shall be issued in the Participant's name, but, if the
Stock Incentive Agreement or Stock Incentive Program so provides, the shares of
Stock shall be held by a custodian designated by the Committee (the
"Custodian"). Each applicable Stock Incentive Agreement or Stock Incentive
Program providing for transfer of shares of Stock to the Custodian shall appoint
the Custodian as the attorney-in-fact for the Participant for the term specified
in the applicable Stock Incentive Agreement or Stock Incentive Program, with
full power and authority in the Participant's name, place and stead to transfer,
assign and convey to the Company any shares of Stock held by the Custodian for
such Participant, if the Participant forfeits the shares under the terms of the
applicable Stock Incentive Agreement or Stock Incentive Program. During the
period that the Custodian holds the shares subject to this Section, the
Participant shall be entitled to all rights, except as provided in the
applicable Stock Incentive Agreement or Stock Incentive Program, applicable to
shares of Stock not so held. Any dividends declared on shares of Stock held by
the Custodian shall, as the Committee may provide in the applicable Stock
Incentive Agreement or Stock Incentive Program, be paid directly to the
Participant or, in the alternative, be retained by the Custodian until the
expiration of the term specified in the applicable Stock Incentive Agreement or
Stock Incentive Program and shall then be delivered, together with any proceeds,
with the shares of Stock to the Participant or to the Company, as applicable.
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<PAGE> 15
4.2 Restrictions on Transfer. The Participant shall not have the right to
make or permit to exist any Disposition of the shares of Stock issued pursuant
to the Plan except as provided in the Plan or the applicable Stock Incentive
Agreement or Stock Incentive Program. Any Disposition of the shares of Stock
issued under the Plan by the Participant not made in accordance with the Plan or
the applicable Stock Incentive Agreement or Stock Incentive Program shall be
void. The Company shall not recognize, or have the duty to recognize, any
Disposition not made in accordance with the Plan and the applicable Stock
Incentive Agreement or Stock Incentive Program, and the shares so transferred
shall continue to be bound by the Plan and the applicable Stock Incentive
Agreement or Stock Incentive Program.
SECTION 5 GENERAL PROVISIONS
5.1 Withholding. The Company shall deduct from all cash distributions under
the Plan any taxes required to be withheld by federal, state or local
government. Whenever the Company proposes or is required to issue or transfer
shares of Stock under the Plan or upon the vesting of any Stock Award, the
Company shall have the right to require the recipient to remit to the Company an
amount sufficient to satisfy any federal, state and local withholding tax
requirements prior to the delivery of any certificate or certificates for such
shares or the vesting of such Stock Award. A Participant may pay the withholding
tax in cash, or, if the applicable Stock Incentive Agreement or Stock Incentive
Program provides, a Participant may elect to have the number of shares of Stock
he is to receive reduced by, or with respect to a Stock Award, tender back to
the Company, the smallest number of whole shares of Stock which, when multiplied
by the Fair Market Value of the shares of Stock determined as of the Tax Date
(defined below), is sufficient to satisfy federal, state and local, if any,
withholding taxes arising from exercise or payment of a Stock Incentive (a
"Withholding Election"). A Participant may make a Withholding Election only if
both of the following conditions are met:
(a)The Withholding Election must be made on or prior to the
date on which the amount of tax required to be withheld is determined (the "Tax
Date") by executing and delivering to the Company a properly completed notice of
Withholding Election as prescribed by the Committee; and
(b)Any Withholding Election made will be irrevocable;
however, the Committee may in its sole discretion disapprove and give no effect
to the Withholding Election.
5.2 Changes in Capitalization; Merger; Liquidation.
(a)The number of shares of Stock reserved for the grant of
Options, Dividend Equivalent Rights, Performance Unit Awards, Phantom Shares,
Stock Appreciation Rights and Stock Awards; the number of shares of Stock
reserved for issuance upon the exercise or payment, as applicable, of each
outstanding Option, Dividend Equivalent Right, Performance Unit Award, Phantom
Share and Stock Appreciation Right and upon vesting or grant, as applicable, of
each Stock Award; the Exercise Price of each outstanding Option and the
specified number of shares of Stock to which each outstanding Dividend
Equivalent Right, Phantom Share and Stock Appreciation Right pertains shall be
proportionately adjusted for any increase or decrease in the number of issued
shares of Stock resulting from a subdivision or combination of shares or the
payment of an ordinary stock dividend in shares of Stock to holders of
outstanding shares of Stock
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<PAGE> 16
or any other increase or decrease in the number of shares of Stock outstanding
effected without receipt of consideration by the Company.
(b)In the event of any merger, consolidation, extraordinary
dividend (including a spin-off), reorganization or other change in the corporate
structure of the Company or its Stock or tender offer for shares of Stock, the
Committee, in its sole discretion, may make such adjustments with respect to
awards and take such other action as it deems necessary or appropriate to
reflect or in anticipation of such merger, consolidation, extraordinary dividend
(including a spin-off), reorganization, other change in corporate structure or
tender offer, including, without limitation, the substitution of new awards, the
termination or adjustment of outstanding awards, the acceleration of awards or
the removal of restrictions on outstanding awards, all as may be provided in the
applicable Stock Incentive Agreement or Stock Incentive Program or, if not
expressly addressed therein, as the Committee subsequently may determine in the
event of any such merger, consolidation, extraordinary dividend (including a
spin-off), reorganization or other change in the corporate structure of the
Company or its Stock or tender offer for shares of Stock. Any adjustment
pursuant to this Section 5.2 may provide, in the Committee's discretion, for the
elimination without payment therefor of any fractional shares that might
otherwise become subject to any Stock Incentive.
(c)The existence of the Plan and the Stock Incentives granted
pursuant to the Plan shall not affect in any way the right or power of the
Company to make or authorize any adjustment, reclassification, reorganization or
other change in its capital or business structure, any merger or consolidation
of the Company, any issue of debt or equity securities having preferences or
priorities as to the Stock or the rights thereof, the dissolution or liquidation
of the Company, any sale or transfer of all or any part of its business or
assets, or any other corporate act or proceeding.
5.3 Cash Awards. The Committee may, at any time and in its discretion,
grant to any holder of a Stock Incentive the right to receive, at such times and
in such amounts as determined by the Committee in its discretion, a cash amount
which is intended to reimburse such person for all or a portion of the federal,
state and local income taxes imposed upon such person as a consequence of the
receipt of the Stock Incentive or the exercise of rights thereunder.
5.4 Compliance with Code. All Incentive Stock Options to be granted
hereunder are intended to comply with Code Section 422, and all provisions of
the Plan and all Incentive Stock Options granted hereunder shall be construed in
such manner as to effectuate that intent.
5.5 Right to Terminate Service. Nothing in the Plan or in any Stock
Incentive Agreement or Stock Incentive Program shall confer upon any Participant
the right to continue as an employee, officer, director or consultant of the
Company or any of its Affiliates or affect the right of the Company or any of
its Affiliates to terminate the Participant's service at any time.
5.6 Restrictions on Delivery and Sale of Shares; Legends. Each Stock
Incentive is subject to the condition that if at any time the Committee, in its
discretion, shall determine that the listing, registration or qualification of
the shares covered by such Stock Incentive upon any securities exchange or under
any state or federal law is necessary or desirable as a condition of or in
connection with the granting of such Stock Incentive or the purchase or delivery
of shares thereunder, the delivery of any or all shares pursuant to such Stock
Incentive may be withheld
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<PAGE> 17
unless and until such listing, registration or qualification shall have been
effected. If a registration statement is not in effect under the Securities Act
of 1933 or any applicable state securities laws with respect to the shares of
Stock purchasable or otherwise deliverable under Stock Incentives then
outstanding, the Committee may require, as a condition of exercise of any Option
or as a condition to any other delivery of Stock pursuant to a Stock Incentive,
that the Participant or other recipient of a Stock Incentive represent, in
writing, that the shares received pursuant to the Stock Incentive are being
acquired for investment and not with a view to distribution and agree that the
shares will not be disposed of except pursuant to an effective registration
statement, unless the Company shall have received an opinion of counsel that
such disposition is exempt from such requirement under the Securities Act of
1933 and any applicable state securities laws. The Company may include on
certificates representing shares delivered pursuant to a Stock Incentive such
legends referring to the foregoing representations or restrictions or any other
applicable restrictions on resale as the Company, in its discretion, shall deem
appropriate.
5.7 Non-alienation of Benefits. Other than as specifically provided with
regard to the death of a Participant, no benefit under the Plan shall be subject
in any manner to anticipation, alienation, sale, transfer, assignment, pledge,
encumbrance or charge; and any attempt to do so shall be void. No such benefit
shall, prior to receipt by the Participant, be in any manner liable for or
subject to the debts, contracts, liabilities, engagements or torts of the
Participant.
5.8 Termination and Amendment of the Plan. The Board of Directors at any
time may amend or terminate the Plan without stockholder approval; provided,
however, that the Board of Directors may condition any amendment on the approval
of stockholders of the Company if such approval is necessary or advisable with
respect to tax, securities or other applicable laws. No such termination or
amendment without the consent of the holder of a Stock Incentive shall adversely
affect the rights of the Participant under such Stock Incentive.
5.9 Stockholder Approval. The Plan shall be submitted to the stockholders
of the Company for their approval within twelve (12) months before or after its
adoption by the Board of Directors. If such approval is not obtained, any Stock
Incentive granted under the Plan shall be void.
5.10 Choice of Law. The laws of the State of Georgia shall govern the Plan,
to the extent not preempted by federal law.
5.11 Effective Date of Plan. The Plan shall become effective upon the date
the Plan is approved by the Board of Directors.
[Remainder of Page Intentionally Left Blank]
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<PAGE> 18
IN WITNESS WHEREOF, the Company has caused this Plan to be executed as
of this ___ day of ___________________, 1998.
COMMUNITY CAPITAL BANCSHARES, INC.
By:
----------------------------------------
Title:
-------------------------------------
Attest:
- --------------------------
Secretary
[CORPORATE SEAL]
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<PAGE> 1
EXHIBT 10.7
INCENTIVE STOCK OPTION AWARD
PURSUANT TO COMMUNITY CAPITAL BANCSHARES, INC.
1998 STOCK INCENTIVE PLAN
THIS AWARD is made as of the Grant Date by COMMUNITY CAPITAL BANCSHARES,
INC. (the "Company") to __________________________________________________ (the
"Optionee").
Upon and subject to the Terms and Conditions attached hereto and
incorporated herein by reference, the Company hereby awards as of the Grant Date
to Optionee an incentive stock option (the "Option"), as described below, to
purchase the Option Shares.
A. Grant Date: _________________________, 1998.
B. Type of Option: Incentive Stock Option.
C. Plan under which granted: Community Capital Bancshares, Inc. Stock
Incentive Plan.
D. Option Shares: All or any part of _______________ shares of the
Company's common stock, $1.00 par value per share (the "Common
Stock"), subject to adjustment as provided in the attached Terms and
Conditions.
E. Exercise Price: $10.00 per share, subject to adjustment as provided in
the attached Terms and Conditions. The Exercise Price is, in the
judgment of the Committee, not less than 100% of the Fair Market Value
of a share of Common Stock on the Grant Date or, in the case of an
Over 10% Owner, not less than 110% of the Fair Market Value of a share
of Common Stock on the Grant Date.
F. Option Period: The Option may be exercised only during the Option
Period which commences on the Grant Date and ends, generally, on the
earlier of (a) the tenth (10th) anniversary of the Grant Date (unless
the Optionee is an Over 10% Owner, in which case the fifth (5th)
anniversary of the Grant Date); or (b) 90 days following the date the
Optionee ceases to be an employee of the Company or any Subsidiary;
provided that the Option may be exercised as to no more than the
vested Option Shares, determined pursuant to the Vesting Schedule.
Note that other limitations to exercising the Option, as described in
the attached Terms and Conditions, may apply.
G. Vesting Schedule: The Option Shares shall become vested in accordance
with the attached Vesting Schedule. All or a portion of the Option
Shares may become vested or forfeited on an earlier date as provided
in the attached Terms and Conditions.
IN WITNESS WHEREOF, the Company has executed and sealed this Award as of
the Grant Date set forth above.
COMMUNITY CAPITAL BANCSHARES, INC.
By:
-------------------------------------
Title:
-----------------------------------
<PAGE> 2
TERMS AND CONDITIONS
TO THE
INCENTIVE STOCK OPTION AWARD
PURSUANT TO COMMUNITY CAPITAL BANCSHARES, INC.
1999 STOCK INCENTIVE PLAN
1. Exercise of Option. Subject to the provisions provided herein or in
the Award made pursuant to the Community Capital Bancshares, Inc. Stock
Incentive Plan:
(a) the Option may be exercised with respect to all or any portion of
the vested Option Shares at any time during the Option Period by the
delivery to the Company, at its principal place of business, of a written
notice of exercise in substantially the form attached hereto as Exhibit 1,
which shall be actually delivered to the Company no earlier than thirty
(30) days and no later than ten (10) days prior to the date upon which
Optionee desires to exercise all or any portion of the Option; and
(b) payment to the Company of the Exercise Price multiplied by the
number of Option Shares being purchased (the "Purchase Price") as provided
in Section 2.
Upon acceptance of such notice and receipt of payment in full of the Purchase
Price, the Company shall cause to be issued a certificate representing the
Option Shares purchased.
2. Purchase Price. Payment of the Purchase Price for all Option Shares
purchased pursuant to the exercise of an Option shall be made in cash or
certified check or, alternatively, as follows:
(a) by delivery to the Company of a number of shares of Common Stock
which have been owned by the Optionee for at least six (6) months prior to
the date of the Option's exercise having an aggregate fair market value, as
determined under the Plan, on the date of exercise either equal to the
Purchase Price or in combination with cash or a certified check to equal
the Purchase Price; or
(b) if and when the Common Stock becomes traded by brokers, whether
on a national securities exchange or otherwise, by receipt of the Purchase
Price in cash from a broker, dealer or other "creditor" as defined by
Regulation T issued by the Board of Governors of the Federal Reserve System
following delivery by the Optionee to the Committee of instructions in a
form acceptable to the Committee regarding delivery to such broker, dealer
or other creditor of that number of Option Shares with respect to which the
Option is exercised.
3. Vested Option Shares.
(a) The Option Shares shall become vested in the manner provided in
the Vesting Schedule attached hereto; provided, however, that all Option
Shares shall become vested no later
<PAGE> 3
than the date of a Change in Control, or any earlier date specified by the
Committee in writing to the Optionee subsequent to or contemporaneously
with a determination by the Committee that a Change in Control is imminent.
(b) Notwithstanding any other provision herein, the Company, at the
direction of the Office of the Comptroller of the Currency or any successor
federal agency ("OCC"), may require the Optionee to exercise the Option in
whole or in part if the capital of any bank which is a Subsidiary of the
Company falls below minimum requirements, as determined by the OCC or the
Georgia Department of Banking and Finance and, if the Optionee fails to
exercise any portion of the Option as so directed, that portion of the
Option shall be forfeited.
4. Rights as Shareholder. Until the stock certificates reflecting the
Option Shares accruing to the Optionee upon exercise of the Option are issued to
the Optionee, the Optionee shall have no rights as a shareholder with respect to
such Option Shares. The Company shall make no adjustment for any dividends or
distributions or other rights on or with respect to Option Shares for which the
record date is prior to the issuance of that stock certificate, except as the
Plan or the attached Award otherwise provides.
5. Restriction on Transfer of Option and of Option Shares. The Option
evidenced hereby is nontransferable other than by will or the laws of descent
and distribution and shall be exercisable during the lifetime of the Optionee
only by the Optionee (or in the event of his disability, by his personal
representative) and after his death, only by his legatee or the executor of his
estate.
6. Changes in Capitalization.
(a) If the number of shares of Common Stock shall be increased or
decreased by reason of a subdivision or combination of shares of Common
Stock, the payment of a stock dividend in shares of Common Stock or any
other increase or decrease in the number of shares of Common Stock
outstanding effected without receipt of consideration by the Company, an
appropriate adjustment shall be made by the Committee, in a manner
determined in its sole discretion, in the number and kind of Option Shares
and in the Exercise Price.
(b) In the event of a Change in Control pursuant to which the Company
is not the surviving entity and the surviving entity does not agree to the
assumption of the Option, the Committee may elect to terminate the Option
Period as of the date of the Change in Control in consideration of the
payment to the Optionee of the sum of the difference between the then Fair
Market Value of the Common Stock and the Exercise Price for each Option
Share as to which the Option has not been exercised as of the date of the
Change in Control.
(c) The existence of the Plan and the Option granted pursuant to this
Agreement shall not affect in any way the right or power of the Company to
make or authorize any adjustment, reclassification, reorganization or other
change in its capital or business structure, any merger or consolidation of
the Company, any issue of debt or equity securities having preferences or
<PAGE> 4
priorities as to the Common Stock or the rights thereof, the dissolution or
liquidation of the Company, any sale or transfer of all or any part of its
business or assets, or any other corporate act or proceeding. Any
adjustment pursuant to this Section may provide, in the Committee's
discretion, for the elimination without payment therefor of any fractional
shares that might otherwise become subject to any Option.
7. Special Limitation on Exercise. No purported exercise of the Option
shall be effective without the approval of the Committee, which may be withheld
to the extent that the exercise, either individually or in the aggregate
together with the exercise of other previously exercised stock options and/or
offers and sales pursuant to any prior or contemplated offering of securities,
would, in the sole and absolute judgment of the Committee, require the filing of
a registration statement with the United States Securities and Exchange
Commission or with the securities commission of any state. If a registration
statement is not in effect under the Securities Act of 1933 or any applicable
state securities law with respect to shares of Common Stock purchasable or
otherwise deliverable under the Option, the Optionee (a) shall deliver to the
Company, prior to the exercise of the Option or as a condition to the delivery
of Common Stock pursuant to the exercise of an Option exercise, such
information, representations and warranties as the Company may reasonably
request in order for the Company to be able to satisfy itself that the Option
Shares are being acquired in accordance with the terms of an applicable
exemption from the securities registration requirements of applicable federal
and state securities laws and (b) shall agree that the shares of Common Stock so
acquired will not be disposed of except pursuant to an effective registration
statement, unless the Company shall have received an opinion of counsel that
such disposition is exempt from such requirement under the Securities Act of
1933 and any applicable state securities law.
8. Legend on Stock Certificates. Certificates evidencing the Option
Shares, to the extent appropriate at the time, shall have noted conspicuously on
the certificates a legend intended to give all persons full notice of the
existence of the conditions, restrictions, rights and obligations set forth
herein and in the Plan.
9. Governing Laws. This Award and the Terms and Conditions shall be
construed, administered and enforced according to the laws of the State of
Georgia.
10. Successors. This Award and the Terms and Conditions shall be binding
upon and inure to the benefit of the heirs, legal representatives, successors
and permitted assigns of the Optionee and the Company.
11. Notice. Except as otherwise specified herein, all notices and other
communications under this Award shall be in writing and shall be deemed to have
been given if personally delivered or if sent by registered or certified United
States mail, return receipt requested, postage prepaid, addressed to the
proposed recipient at the last known address of the recipient. Any party may
designate any other address to which notices shall be sent by giving notice of
the address to the other parties in the same manner as provided herein.
<PAGE> 5
12. Severability. In the event that any one or more of the provisions or
portion thereof contained in the Award and these Terms and Conditions shall for
any reason be held to be invalid, illegal or unenforceable in any respect, the
same shall not invalidate or otherwise affect any other provisions of the Award
and these Terms and Conditions, and the Award and these Terms and Conditions
shall be construed as if the invalid, illegal or unenforceable provision or
portion thereof had never been contained herein.
13. Entire Agreement. Subject to the terms and conditions of the Plan, the
Award and the Terms and Conditions express the entire understanding of the
parties with respect to the Option.
14. Violation. Any transfer, pledge, sale, assignment, or hypothecation of
the Option or any portion thereof shall be a violation of the terms of the Award
or these Terms and Conditions and shall be void and without effect.
15. Headings and Capitalized Terms. Section headings used herein are for
convenience of reference only and shall not be considered in construing the
Award or these Terms and Conditions. Capitalized terms used, but not defined, in
either the Award or the Terms and Conditions shall be given the meaning ascribed
to them in the Plan.
16. Specific Performance. In the event of any actual or threatened default
in, or breach of, any of the terms, conditions and provisions of the Award and
these Terms and Conditions, the party or parties who are thereby aggrieved shall
have the right to specific performance and injunction in addition to any and all
other rights and remedies at law or in equity, and all such rights and remedies
shall be cumulative.
17. No Right to Continued Retention. Neither the establishment of the Plan
nor the award of Option Shares hereunder shall be construed as giving the
Optionee the right to continued employment with the Company or any Subsidiary.
<PAGE> 6
EXHIBIT 1
NOTICE OF EXERCISE OF
STOCK OPTION TO PURCHASE
COMMON STOCK OF
COMMUNITY CAPITIAL BANCSHARES, INC.
Name
------------------------------
Address
--------------------------
----------------------------------
Date
------------------------------
Community Capital Bancshares, Inc.
2815 Meredyth Drive
Albany, Georgia 31707
Attn: Corporate Secretary
Re: Exercise of Incentive Stock Option
Gentlemen:
Subject to acceptance hereof by Community Capital Bancshares, Inc. (the
"Company") pursuant to the provisions of the Community Captial Bancshares, Inc.
1998 Stock Incentive Plan (the "Plan"), I hereby give notice of my election to
exercise options granted to me to purchase ______________ shares of Common Stock
of the Company under the Incentive Stock Option Award (the "Award") dated as of
____________. The purchase shall take place as of __________, 199__ (the
"Exercise Date").
On or before the Exercise Date, I will pay the applicable purchase price as
follows:
[ ] by delivery of cash or a certified check for $___________ for the full
purchase price payable to the order of Community Capital Bancshares,
Inc.
[ ] by delivery of cash or a certified check for $___________ representing
a portion of the purchase price with the balance to consist of shares
of Common Stock that I have owned for at least six months and that are
represented by a stock certificate I will surrender to the Company
with my endorsement. If the number of shares of Common Stock
represented by such stock certificate exceed the number to be applied
against the purchase price, I
Page 1 of 4
<PAGE> 7
understand that a new stock certificate will be issued to me
reflecting the excess number of shares.
[ ] by delivery of a stock certificate representing shares of Common Stock
that I have owned for at least six months which I will surrender to
the Company with my endorsement as payment of the purchase price. If
the number of shares of Common Stock represented by such certificate
exceed the number to be applied against the purchase price, I
understand that a new certificate will be issued to me reflecting the
excess number of shares.
[ ] by delivery of the purchase price by _________________________, a
broker, dealer or other "creditor" as defined by Regulation T issued
by the Board of Governors of the Federal Reserve System. I hereby
authorize the Company to issue a stock certificate for the number of
shares indicated above in the name of said broker, dealer or other
creditor or its nominee pursuant to instructions received by the
Company and to deliver said stock certificate directly to that broker,
dealer or other creditor (or to such other party specified in the
instructions received by the Company from the broker, dealer or other
creditor) upon receipt of the purchase price.
As soon as the stock certificate is registered in my name, please deliver
it to me at the above address.
If the Common Stock being acquired is not registered for issuance to and
resale by the Optionee pursuant to an effective registration statement on Form
S-8 (or successor form) filed under the Securities Act of 1933, as amended (the
"1933 Act"), I hereby represent, warrant, covenant, and agree with the Company
as follows:
The shares of the Common Stock being acquired by me will be acquired
for my own account without the participation of any other person, with the
intent of holding the Common Stock for investment and without the intent of
participating, directly or indirectly, in a distribution of the Common
Stock and not with a view to, or for resale in connection with, any
distribution of the Common Stock, nor am I aware of the existence of any
distribution of the Common Stock;
I am not acquiring the Common Stock based upon any representation,
oral or written, by any person with respect to the future value of, or
income from, the Common Stock but rather upon an independent examination
and judgment as to the prospects of the Company;
The Common Stock was not offered to me by means of publicly
disseminated advertisements or sales literature, nor am I aware of any
offers made to other persons by such means;
I am able to bear the economic risks of the investment in the Common
Stock, including the risk of a complete loss of my investment therein;
Page 2 of 4
<PAGE> 8
I understand and agree that the Common Stock will be issued and sold
to me without registration under any state law relating to the registration
of securities for sale, and will be issued and sold in reliance on the
exemptions from registration under the 1933 Act, provided by Sections 3(b)
and/or 4(2) thereof and the rules and regulations promulgated thereunder;
The Common Stock cannot be offered for sale, sold or transferred by me
other than pursuant to: (A) an effective registration under the 1933 Act or
in a transaction otherwise in compliance with the 1933 Act; and (B)
evidence satisfactory to the Company of compliance with the applicable
securities laws of other jurisdictions. The Company shall be entitled to
rely upon an opinion of counsel satisfactory to it with respect to
compliance with the above laws;
The Company will be under no obligation to register the Common Stock
or to comply with any exemption available for sale of the Common Stock
without registration or filing, and the information or conditions necessary
to permit routine sales of securities of the Company under Rule 144 under
the 1933 Act are not now available and no assurance has been given that it
or they will become available. The Company is under no obligation to act in
any manner so as to make Rule 144 available with respect to the Common
Stock;
I have and have had complete access to and the opportunity to review
and make copies of all material documents related to the business of the
Company, including, but not limited to, contracts, financial statements,
tax returns, leases, deeds and other books and records. I have examined
such of these documents as I wished and am familiar with the business and
affairs of the Company. I realize that the purchase of the Common Stock is
a speculative investment and that any possible profit therefrom is
uncertain;
I have had the opportunity to ask questions of and receive answers
from the Company and any person acting on its behalf and to obtain all
material information reasonably available with respect to the Company and
its affairs. I have received all information and data with respect to the
Company which I have requested and which I have deemed relevant in
connection with the evaluation of the merits and risks of my investment in
the Company;
I have such knowledge and experience in financial and business matters
that I am capable of evaluating the merits and risks of the purchase of the
Common Stock hereunder and I am able to bear the economic risk of such
purchase; and
The agreements, representations, warranties and covenants made by me
herein extend to and apply to all of the Common Stock of the Company issued
to me pursuant to this Award. Acceptance by me of the certificate
representing such Common Stock shall constitute a confirmation by me that
all such agreements, representations, warranties and covenants made herein
shall be true and correct at that time.
Page 3 of 4
<PAGE> 9
I understand that the certificates representing the shares being purchased
by me in accordance with this notice shall bear a legend referring to the
foregoing covenants, representations and warranties and restrictions on
transfer, and I agree that a legend to that effect may be placed on any
certificate which may be issued to me as a substitute for the certificates being
acquired by me in accordance with this notice. I further understand that
capitalized terms used in this Notice of Exercise without definition shall have
the meanings given to them in the Plan.
Very truly yours,
---------------------------------
AGREED TO AND ACCEPTED:
COMMUNITY CAPITAL BANCSHARES, INC.
By:
-------------------------------------
Title:
----------------------------------
Number of Shares
Exercised:
-------------------------------
Number of Shares
Remaining: Date:
------------------------------- -----------------------------
Page 4 of 4
<PAGE> 10
SCHEDULE I
TO COMMUNITY CAPITAL BANCSHARES, INC.
INCENTIVE STOCK OPTION AWARD
Vesting Schedule
"Vested Shares" means only that percentage of the number of shares of
Common Stock subject to the Option as to which the Option becomes exercisable
following completion of the years of service indicated in the schedule below.
<TABLE>
<CAPTION>
Percentage of Shares Years of Service
Which are Vested Shares after Grant Date
----------------------- ----------------
<S> <C>
20% 1 year
40% 2 years
60% 3 years
80% 4 years
100% 5 years
</TABLE>
Notwithstanding the foregoing Vesting Schedule, the Option shall become fully
vested and exercisable during the Option Period if and when the Optionee retires
on or after age 65.
1. Construction. (a) For purposes of the Vesting Schedule, Optionee shall
be granted a year of service for each consecutive twelve-consecutive-month
period following the Grant Date and during which Optionee continues, at all
times, as an employee of the Company or a Subsidiary.
(b) The right of Optionee to vest in Common Stock shall cease upon the
termination of his or her service as an employee of the Company or a Subsidiary,
whether by reason of death, Disability or otherwise and, thereafter, no further
shares shall become Vested Shares; and the Option shall be exercisable during
the Option Period specified in the Award.
SCHEDULE 1 to Incentive Stock Option Award
<PAGE> 1
EXHIBIT 21.1
SUBSIDIARIES OF THE COMPANY
The sole subsidiary of the Company will be Albany Bank & Trust, N.A. being
organized under the laws of the United States. This subsidiary will be wholly
owned by the Company.
<PAGE> 1
EXHIBIT 23.1
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANT
We hereby consent to the incorporation by reference of our report dated
November 4, 1998, relating to the financial statements of Community Capital
Bancshares, Inc., in the Registration Statement on Form SB-2 and Prospectus, and
to the reference to our firm therein under the caption "Experts."
MAULDIN & JENKINS, LLC
Albany, Georgia
December 2, 1998
<TABLE> <S> <C>
<ARTICLE> 9
<MULTIPLIER> 1
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> OTHER
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> AUG-19-1998
<PERIOD-END> SEP-30-1998
<EXCHANGE-RATE> 1
<CASH> 13,351
<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> 69,685
<DEPOSITS> 0
<SHORT-TERM> 48,107
<LIABILITIES-OTHER> 90,414
<LONG-TERM> 0
0
0
<COMMON> 1
<OTHER-SE> (68,836)
<TOTAL-LIABILITIES-AND-EQUITY> 69,685
<INTEREST-LOAN> 0
<INTEREST-INVEST> 0
<INTEREST-OTHER> 0
<INTEREST-TOTAL> 0
<INTEREST-DEPOSIT> 0
<INTEREST-EXPENSE> 1,912
<INTEREST-INCOME-NET> 0
<LOAN-LOSSES> 0
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 68,837
<INCOME-PRETAX> (70,749)
<INCOME-PRE-EXTRAORDINARY> (70,749)
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (70,749)
<EPS-PRIMARY> (70,749)
<EPS-DILUTED> (70,749)
<YIELD-ACTUAL> 0
<LOANS-NON> 0
<LOANS-PAST> 0
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 0
<CHARGE-OFFS> 0
<RECOVERIES> 0
<ALLOWANCE-CLOSE> 0
<ALLOWANCE-DOMESTIC> 0
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
