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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON FEBRUARY 2, 1999.
REGISTRATION NO. 333-68307
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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AMENDMENT NO. 1
TO
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 6021 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 31708 (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. [ ]
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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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
------------------------------
Community Capital Bancshares, Inc. is offering shares of its common stock
to organize Albany Bank & Trust N.A., a proposed new national bank. We will be
the holding company and sole shareholder of Albany Bank after it is organized.
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.
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 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 FDIC or any other governmental agency.
------------------------------
<TABLE>
<CAPTION>
PER SHARE TOTAL
--------- -----
<S> <C> <C>
Public offering price..................................... $10.00 $10,000,000
Underwriting discount..................................... $ .64 $ 638,000
Proceeds to the company, before expenses.................. $ 9.36 $ 9,362,000
</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. The underwriter
has the right to reject orders in whole or in part and withdraw, cancel or
modify the offer without notice.
------------------------------
INTERSTATE/JOHNSON LANE
CORPORATION
The date of this prospectus is , 1999.
<PAGE> 3
[INSERT A MAP DEPICTING ALBANY BANK'S LOCATION WITHIN A MAP OF GEORGIA SHOWING
DOUGHERTY AND LEE COUNTIES AND THE CITY OF ALBANY]
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SUMMARY
This summary highlights information contained elsewhere in this prospectus.
This summary 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 is a Georgia corporation that was incorporated on August
19, 1998 to organize and serve as the holding company for Albany Bank, a
proposed national bank. Albany Bank will operate as a community bank emphasizing
prompt, personalized customer service to the individuals and businesses located
in Dougherty County, including the City of Albany, and adjacent Lee County in
Georgia. After receiving all necessary regulatory approvals, we anticipate
beginning 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
We believe the Albany market presents a growing and highly diversified
economic environment that will support the formation of Albany Bank. Albany
serves as the commercial, retail and major medical center for communities in
Southwest Georgia and is considered the key economic focal point of the
Dougherty/Lee County area. According to National Decision Systems, the
population within the 30-mile radius surrounding Albany is expected to grow
approximately 9.4% from 170,000 in 1990 to 186,000 by 2002. We anticipate that
the deposit base in the Dougherty/Lee County area will grow as Albany's
population and economic activity continue to increase.
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. 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 bank 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. At least 11 financial
institutions currently operate within the Dougherty/Lee County area. As a result
of these acquisitions, no community bank remains headquartered in Dougherty or
Lee County.
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. Bank mergers and
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.
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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. Albany
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. Albany 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 our lending and deposit services, we will also provide
cash management services, safe-deposit boxes, travelers checks, direct deposit,
automatic drafts, and courier services to commercial customers. We intend to
offer our services through a variety of delivery systems including branch
offices, automated teller machines, telephone banking and Internet banking.
DIRECTORS AND OFFICERS
Our management team includes individuals who have significant experience in
the banking industry in Georgia. Robert E. Lee is the President of Community
Capital and will serve as the President and the Chief Executive Officer of
Albany 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 Community
Capital, and David C. Guillebeau, who will be the Chief Lending Officer of
Albany Bank, collectively have over 30 years of experience in the banking and
lending industries and are both natives of Southwest Georgia. Albany 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 Board of Directors of Community Capital consists of 15 organizers who
will also be the directors of Albany Bank. All of the directors are residents of
the Dougherty/Lee County area and are active participants in the community. The
directors intend to 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, representing an amount equal to 28% of the shares of
stock to be outstanding after this offering. The directors' financial interest
in Community Capital should encourage active participation in growing our
franchise. See "Management" (page 37).
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BUSINESS STRATEGY
Our strategy as an independent bank holding company will be carried out
through the operations and growth of Albany Bank. In an effort to emphasize
prompt, responsive service to our target customers and expand our presence in
the Albany market, our strategies are to:
Operating Strategy:
- Hire and retain highly experienced and qualified banking personnel.
- Provide individualized attention with local decision-making authority.
- Capitalize on the directors' and officers' diverse community involvement
and business experience.
- Establish a community identity.
- Implement an aggressive marketing program.
Growth Strategy:
- Leverage our position as the only community bank headquartered in Albany.
- Open 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.
- 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.
- Evaluate strategic acquisition opportunities on an ongoing basis.
EXECUTIVE OFFICES
Our offices will be located at 2815 Meredyth Drive, Albany, Georgia 31707.
Until we begin operations, our offices will be located at 430 Tift Avenue,
Albany, Georgia 31701. Our telephone number is (912) 446-2265.
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THE OFFERING
Common stock offered............ 1,000,000 shares of Community Capital common
stock
Common stock to be outstanding
after the offering............ 1,000,000 shares
Use of proceeds................. To capitalize Albany Bank, to pay
organizational, offering and pre-opening
expenses, to construct Albany Bank's main
office and to provide working capital for
Community Capital to be used for business
purposes, including making loans and other
investments. See "Use of Proceeds" (page
15).
Proposed trading symbol......... "ALBY"
The number of shares of common stock offered does not include the exercise
of the underwriter's over-allotment option to purchase up to 150,000 additional
shares of the common stock. The number of shares to be outstanding after the
offering 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 upon the exercise of options that have been or may be granted
under the Community Capital's stock incentive plan. See "Executive Compensation"
(page 44).
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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 following paragraphs describe all of the material 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.
WE HAVE NO OPERATING HISTORY, WE ANTICIPATE LOSSES AND WE MAY NOT BE ABLE TO
IMPLEMENT OUR BUSINESS STRATEGY
Albany 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 Community Capital nor Albany Bank has any
operating history on which to base any estimate of their future earning
prospects. Community Capital was only recently formed, and Albany 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 historical information that would be helpful in deciding
whether to invest in Community Capital.
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. If we are ultimately unsuccessful, you may
not recover all or any part of your investment in the common stock.
Additionally, many of Albany Bank's loans initially 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 loan portfolio until that time. Our
profitability will depend on Albany Bank's profitability, and we can give no
assurance that Albany Bank will ever operate profitably. See "Management's
Discussion and Analysis of Financial Condition and Plan of Operations" (page
19).
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 Community Capital and Albany Bank -- Business Strategy" (page 27).
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DEPARTURES OF OUR KEY PERSONNEL OR DIRECTORS MAY HAVE AN ADVERSE EFFECT ON OUR
OPERATIONS
Robert E. Lee and David C. Guillebeau are important to our success and, if
either terminates his employment with us, our financial condition and results of
operations may be adversely affected. Mr. Lee has been instrumental in our
organization and will be the key management official in charge of our daily
business operations. Mr. Guillebeau will be the key officer of Albany Bank in
charge of lending operations. 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. Our growth
could be adversely affected, if the composition of our Board of Directors
changes materially. See "Management" (page 37).
POTENTIAL DELAY IN COMMENCING OPERATIONS MAY INCREASE OUR ACCUMULATED DEFICIT
Any delay in the start of Albany Bank's operations will increase
pre-opening expenses and postpone Albany Bank's realization of potential
revenues. This could 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. Although we expect to receive all
regulatory approvals and to begin business in April of 1999, we can give no
assurance as to when, if at all, these events will occur.
WE MAY DISSOLVE AND LIQUIDATE IF REGULATORY CONDITIONS ARE NOT SATISFIED
If we do not receive final approval for Albany Bank to start its banking
operations within 18 months after the receipt of preliminary approval or other
regulatory requirements are not satisfied, then we will solicit shareholder
approval for the dissolution and liquidation of Community Capital. Although
Community Capital and Albany Bank have applied for all regulatory approvals
required to begin operations and Albany 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 receipt of final approvals to begin business. If we
dissolve and liquidate after the close of the offering, we will distribute to
our shareholders net assets remaining after payment or provision for payment of
all claims against Community Capital. Shareholders will receive only a portion,
if any, of their original investment because we will have used the proceeds of
the offering to pay all expenses and capital costs incurred. These expenses
include the expenses of the offering, the organizational and pre-opening
expenses and the claims of creditors.
INDUSTRY COMPETITION MAY HAVE AN ADVERSE EFFECT ON OUR SUCCESS
The banking business is highly competitive. Our profitability will depend
on our ability to compete successfully. Albany Bank will compete 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. Although no independent
community banks are currently headquartered in Albany, we could face increased
competition if another community bank were to open in our market area. We 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
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<PAGE> 10
deposit. All of our 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 we will be and have greater
resources than will be available to us. See "Proposed Business of Community
Capital and Albany Bank -- Market Opportunities -- Competition" (page 25).
CHANGES IN INTEREST RATES MAY HAVE AN ADVERSE EFFECT ON OUR NET INTEREST INCOME
Albany 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. An increase or decrease in interest rates could have a material
adverse effect on Albany Bank's net interest income, capital and liquidity. Like
most depository institutions, Albany Bank's earnings and net interest income are
affected by changes in market interest rates and other economic factors beyond
its control. 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, Albany 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).
UNPREDICTABLE ECONOMIC CONDITIONS MAY HAVE AN ADVERSE EFFECT ON OUR FINANCIAL
PERFORMANCE
The majority of Albany Bank's borrowers and depositors will be individuals
and businesses located and doing business in the Dougherty/Lee County area.
Albany 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 Albany Bank's financial performance. For example, an
adverse change in the local economy could make it more difficult for borrowers
to repay their loans, which could lead to loan losses for Albany Bank. See
"Proposed Business of Community Capital and Albany Bank" (page 22).
LOW LENDING LIMITS MAY LIMIT OUR ABILITY TO GROW
At least during its first years of operations, Albany 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. Our
lower lending limits may discourage potential borrowers who have lending needs
that exceed our limits, which may restrict our ability to grow. We may try to
serve the needs of these borrowers by selling loan participations to other
institutions, but this strategy may not succeed. See "Proposed Business of
Community Capital and Albany Bank -- Lending Services" (page 29).
OUR ABILITY TO PAY DIVIDENDS IS LIMITED
Community Capital will initially have no source of income other than
dividends that it receives from Albany Bank. Our ability to pay dividends to you
will therefore depend on Albany Bank's ability to pay dividends to Community
Capital.
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Additionally, 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 Community Capital and Albany Bank to
retain and build capital, it will be the policy of each of their Boards of
Directors 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 recover any losses that we may have incurred and become profitable.
Additionally, our future dividend policy will depend on our earnings, capital
requirements, financial condition and other factors that the Boards of Directors
of Community Capital and Albany Bank consider relevant. See "Dividends" (page
18).
ARBITRARILY DETERMINED PUBLIC OFFERING PRICE MAY NOT INDICATE THE MARKET PRICE
OF THE COMMON STOCK
Because we were only recently formed and Albany Bank is in the process of
being organized, the public offering price could not be set with reference to
historical measures of Community Capital's financial performance. Therefore, the
public offering price may not indicate the market price for the common stock
after the offering. Community Capital and the underwriter negotiated the public
offering price based on several factors. These factors included prevailing
market conditions, the price to earnings and price to book value multiples of
comparable publicly traded companies, and Albany Bank's growth potential and
cash flow and earnings prospects. See "Underwriting" (page 57).
AN ACTIVE TRADING MARKET MAY NOT DEVELOP
Prior to the offering, there has been no public trading market for
Community Capital's common stock. If an active trading market does not develop
or continue after the offering, you may not be able to sell your shares at or
above the price at which these shares are being offered to the public. 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. You should
consider carefully the limited liquidity of your investment before purchasing
any shares of our common stock.
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. Even with a market maker, an active and liquid market for
our common stock may not develop in the foreseeable future because of the
limited size of our offering, our lack of an earnings history and the absence of
a reasonable expectation that we will pay dividends within the near future.
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.
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MARKET PRICE OF THE COMMON STOCK MAY BE VOLATILE
If a market develops for the common stock after the offering, a variety of
factors will determine the market price of the common stock. We, like many other
companies, may experience significant volatility in the market price of our
common stock from time to time after the offering due to these factors. These
factors include the depth and liquidity of the market for the common stock,
investor perception of our financial strength, conditions in the banking
industry, such as credit quality and monetary policies 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 Community Capital 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 may significantly affect the market price of the common stock for
reasons unrelated to our operating performance.
GOVERNMENT REGULATION MAY HAVE AN ADVERSE EFFECT ON OUR PROFITABILITY AND GROWTH
Bank holding companies and banks are subject to extensive state and federal
government supervision and regulation. Our ability to achieve profitability and
to grow could be adversely affected by state and federal banking laws and
regulations. These and other restrictions limit the manner in which we may
conduct our business and obtain financing, including Albany 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 FDIC,
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 also
adversely affect the banking industry or our operations. See "Supervision and
Regulation" (page 58).
EXERCISE OF WARRANTS AND STOCK OPTIONS WILL CAUSE DILUTION
The organizers, officers and employees may exercise warrants or options to
purchase common stock, which would result in the dilution of your proportionate
interests in Community Capital. We will issue to the organizers warrants to
purchase an aggregate of up to 225,000 shares of common stock, and will issue to
officers and employees options to purchase an aggregate of up to 90,000 shares
of common stock. 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. The
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.
In addition, the exercise of the warrants or options could adversely affect
the terms on which we can obtain additional capital. For instance, the holders
of the warrants or options could exercise the warrants or options when we could
obtain capital by offering additional securities on terms more favorable to us
than those provided for by the warrants or options. See "Executive Compensation"
(page 45).
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WE MAY NOT BE ABLE TO RAISE ADDITIONAL CAPITAL
In the future, should we need additional capital, we may not be able to
raise additional funds through the issuance of additional shares of common stock
or other securities. Even if we are able to obtain additional capital through
the issuance of additional shares of common stock or other securities, we may
not issue these securities at prices or on terms better than or equal to the
public offering price and terms of this offering. The issuance of new securities
could dilute your ownership interest in Community Capital.
OUR ARTICLES OF INCORPORATION AND BYLAWS MAY DETER A CHANGE IN CONTROL
Our Articles of Incorporation and Bylaws contain provisions that may deter
an attempt to change or gain control of Community Capital. 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. 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. See
"Certain Provisions of the Articles of Incorporation and Bylaws" (page 50).
DIRECTORS AND OFFICERS COULD HAVE THE ABILITY TO INFLUENCE SHAREHOLDER ACTIONS
We anticipate that after this offering, our directors and executive
officers will directly or indirectly own 280,000 shares, representing 28.0%, of
the outstanding common stock. These persons may acquire additional shares of
common stock after the offering, which will increase this percentage. As a
result, our directors and executive officers together may be able to control the
outcome of director elections or block a significant transaction that might
otherwise be approved by the shareholders. See "Certain Provisions of the
Articles of Incorporation and Bylaws" (page 50).
YEAR 2000 COMPUTER MALFUNCTIONS MAY ADVERSELY AFFECT OUR OPERATIONS
Banks are heavily dependent on complex computer systems for most 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 these disruptions. These disruptions could include events ranging
from electrical or water failure to computer systems failure, with any of these
events potentially resulting in a cessation of Albany Bank's activities until
the problem is resolved.
Community Capital and Albany Bank will rely on software and hardware
developed by independent third parties to provide the information systems used
by us. As a result, Albany Bank will depend on the efforts of those vendors to
ensure that their data processing systems accommodate year 2000 information.
Although we intend to require vendor certification regarding year 2000 readiness
before we purchase any equipment, we cannot verify independently that the
equipment will in fact be year 2000 compliant. Additionally, Albany 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 Albany Bank's major borrowers is
12
<PAGE> 14
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 Albany Bank. Consequently, if
Community Capital, Albany 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 Community Capital and Albany Bank could be
materially adversely affected. See "Proposed Business of Community Capital and
Albany Bank -- Information Systems and the Year 2000" (page 33).
FUTURE RESALES OF COMMON STOCK MAY ADVERSELY AFFECT THE MARKET PRICE OF THE
COMMON STOCK
After the close of this offering, 1,000,000 shares of common stock will be
outstanding, assuming the underwriter does not exercise its over-allotment
option. The sale of a large block of the shares outstanding after the close of
the offering could adversely affect the market price of the common stock. All of
the outstanding shares will be freely tradable without restriction except for
280,000 shares that we anticipate the organizers and the executive officers will
purchase in the offering. The organizers and the executive officers have agreed,
for a period of 180 days from the date of this prospectus, not to sell or
otherwise transfer, either 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 and the
executive officers will be eligible for sale beginning 180 days from the date of
this prospectus if the organizer complies with the resale limitations of Rule
144 under the Securities Act of 1933, as currently in effect. See "Shares
Eligible for Future Sale" (page 55).
MANAGEMENT HAS DISCRETION AS TO THE USE OF UNALLOCATED NET PROCEEDS
Community Capital and Albany Bank intend to use the net proceeds of the
offering to capitalize Albany Bank, purchase the land and construct the building
for Albany Bank's main office, repay Community Capital's line of credit,
purchase equipment and other assets for Albany Bank's operations, fund loans,
provide working capital for general corporate purposes, and pay offering,
pre-opening and initial operating expenses. The Office of the Comptroller of the
Currency will require Community Capital to contribute a minimum of $7.5 million
to Albany 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 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 Community Capital and Albany Bank" and
elsewhere in this prospectus are "forward-looking statements." Forward-looking
statements include, among other things, statements about the competitiveness of
the banking industry, potential regulatory obligations, our strategies and other
statements that are not historical facts. When used in this prospectus, the
words "anticipate," "believe," "estimate" and similar expressions generally
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, among other things, risks
associated with starting a new business, a potential delay in beginning
operations, the risk that Community Capital will be dissolved 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
We estimate that the net proceeds of the offering will be $9.2 million,
after deducting the underwriting discount of $638,000 and estimated offering
expenses of $175,000. If the underwriter exercises its over-allotment option in
full, we estimate net proceeds of the offering will be $10.6 million, after
deducting the underwriting discount of $750,500 and offering expenses of
$175,000. The table illustrates how we intend to use the net proceeds of this
offering.
<TABLE>
<CAPTION>
AMOUNT PERCENT
---------- -------
<S> <C> <C>
Repay advances by organizers.................. $ 80,000 0.9%
Repay amounts drawn on line of credit......... 535,000(1) 5.8
Working capital............................... 8,572,000(2) 93.3
---------- -----
Total.................................... $9,187,000 100.0%
========== =====
</TABLE>
- -------------------------
(1) Does not include offering expenses of approximately $175,000
(consisting primarily of legal, accounting and printing expenses and
registration fees).
(2) Community Capital will contribute $7.5 million of this amount to Albany
Bank as capital when Albany Bank receives final regulatory approval.
Community Capital's working capital will increase by $615,000 after
Albany Bank has been organized, has purchased the land for its main
office from Community Capital for $315,000 and has reimbursed Community
Capital $300,000 in advances for organizational and pre-opening
expenses.
Of the $535,000 drawn under Community Capital's line of credit and the
$80,000 advanced by the organizers, Community Capital used $315,000 to purchase
land for Albany Bank's main office and plans to use $300,000 to pay
organizational and pre-opening expenses of Albany Bank categorized as follows:
<TABLE>
<CAPTION>
<S> <C>
Salaries and benefits (estimated through Albany Bank's
target opening date in April 1999)........................ $160,000
Legal and professional fees................................. 100,000
Other pre-opening expenses.................................. 40,000
--------
$300,000
========
</TABLE>
As of December 31, 1998, Community Capital has paid approximately $250,000
of the $300,000 in organizational and pre-opening expenses.
We plan to use any working capital that Community Capital does not use to
capitalize Albany Bank as described in Note (2) above principally to build
additional branches at a cost of approximately $500,000 to $800,000 per branch
and to maintain appropriate liquidity. We plan to use any amounts not applied to
expansion or liquidity to pay operating expenses, provide additional capital for
Albany Bank, purchase certificates of deposit of Albany Bank to the extent we
deem necessary and for other general purposes. Our anticipated allocation of
working capital could change if we are unable to obtain suitable sites for new
branches at a reasonable price or if we are faced with unexpected liquidity
issues. For additional information concerning the compensation of the President
and Chief Executive Officer of Community Capital and Albany Bank, see "Executive
Compensation."
15
<PAGE> 17
After Albany Bank receives the necessary regulatory approvals, Community
Capital will capitalize Albany Bank with a minimum of $7.5 million. Albany Bank
intends to use these proceeds for the following purposes:
<TABLE>
<CAPTION>
AMOUNT PERCENT
---------- -------
<S> <C> <C>
Reimbursement of advances from Community Capital............ $ 300,000 4.0%
Purchase of land for Albany Bank's main office from
Community Capital......................................... 315,000 4.2
Construction of the main office building.................... 1,300,000 17.4
Furniture, fixtures and equipment for Albany Bank's main
office.................................................... 250,000 3.3
Funds to be used for loans to customers, investments and
other general purposes.................................... 5,335,000 71.1
---------- ----
Total.................................................. $7,500,000 100%
========== ====
</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 Community Capital's capitalization as of December
31, 1998 and its pro forma consolidated capitalization, 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.
Upon Community Capital's incorporation Robert E. Lee, the President of
Community Capital and Albany Bank and Chief Executive Officer of Albany Bank,
purchased one share of common stock at the price of $1.00. Community Capital
will redeem this share for $1.00 upon the issuance of shares in this offering.
The number of shares shown as outstanding after giving effect to the offering,
and the book valve of those shares, do 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 Community Capital's stock incentive plan. For additional
information regarding the number and terms of these warrants and options, see
"Executive Compensation -- Organizers' Warrants" and "-- Stock Incentive Plan."
<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; 1,000,000 shares issued ($10.00 each)
and outstanding as adjusted......................... 1 1,000,000
Additional paid-in capital(1)......................... 3,514 8,187,000
Accumulated deficit................................... (200,048)(2) (300,000)(3)
--------- ----------
Total shareholders' equity............................ $(196,533) $8,887,000
========= ==========
Book value per share(4)............................... N/A $ 8.89
==========
</TABLE>
- -------------------------
(1) The expenses of the offering will be charged against this account. We
estimate that the offering expenses will be $788,000, which includes
$638,000 in underwriting discounts and $175,000 in other offering
expenses, including legal, accounting and printing expenses and
registration fees.
(2) This deficit reflects pre-opening expenses incurred through December
31, 1998, consisting primarily of salaries and employee benefits.
(3) The "As Adjusted" accumulated deficit results from estimated
organizational and pre-opening expenses of $300,000 incurred through
Albany Bank's target opening date in April 1999. Actual organizational
and pre-opening expenses may be higher and may therefore increase the
deficit accumulated during the pre-opening stage and further reduce
shareholders' equity.
(4) After giving effect to the receipt of the net proceeds from this
offering, there is an immediate dilution in the book value per share of
$1.11, resulting from recognition of organizational and pre-opening
expenses and charging the offering expenses against additional paid-in
capital.
17
<PAGE> 19
DIVIDENDS
Community Capital will initially have no source of income other than
dividends that Albany Bank pays to it. Community Capital's ability to pay
dividends to its shareholders will therefore depend on Albany Bank's ability to
pay dividends to Community Capital. In the future, Community Capital may begin
income-producing operations independent from those of Albany Bank, which may
provide another source of income from which Community Capital could pay
dividends to you. However, we can give you no assurance as to when, if at all,
these operations may begin or whether they will be profitable.
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 Community Capital and Albany Bank to retain and
build capital, the Boards of Directors of Community Capital and Albany Bank plan
to reinvest earnings for the period of time necessary to support successful
operations. As a result, Community Capital does not plan to pay dividends until
it recovers any losses incurred and becomes profitable, and its future dividend
and policy will depend on the earnings, capital requirements and financial
condition of Community Capital and Albany Bank and on other factors that
Community Capital's Board of Directors considers relevant.
Additionally, regulatory authorities may determine, under certain
circumstances relating to the financial condition of Albany Bank or Community
Capital, 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
Community Capital's financial statements and related notes, which are
included in this prospectus, provide additional information relating to the
following discussion of its financial condition. See "Index to Financial
Statements."
Community Capital was organized on August 19, 1998 to serve as a holding
company for a proposed national bank. Since it was organized, Community
Capital's main activities have been centered on seeking, interviewing and
selecting its directors and officers, applying for a national bank charter,
applying for FDIC deposit insurance, applying to become a bank holding company
and raising equity capital through this offering.
Community Capital's operations from August 19, 1998 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
$485,000 was outstanding at December 31, 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
December 31, 1998 advances from the organizers totaled $80,000. Community
Capital plans to repay the line of credit and any advances from the organizers
after the closing of this offering.
From August 19, 1998 to December 31, 1998, the net loss amounted to
$200,048. The estimated net loss for the period from August 19, 1998 through
April 30, 1999, the anticipated opening date of Albany Bank, is $300,000, which
is attributable to the following estimated noninterest expenses:
<TABLE>
<S> <C>
Salaries and benefits....................................... $160,000
Legal and professional fees................................. 100,000
Other pre-opening expenses.................................. 40,000
--------
Total.................................................. $300,000
========
</TABLE>
On November 20, 1998, Community Capital purchased approximately two acres
of land at 2815 Meredyth Drive to be used as the site for the main office of
Albany Bank. The land was purchased at a price of $315,000 from Cross Family
Limited, Ruth Cross Hayes and Wilma C. Depaz Living Trust Agreement, 3006 Old
Dawson Road, Albany, Georgia 31707. In connection with the purchase of this
land, the seller paid commissions in the amount of $12,600 to each of ReMax of
Albany, Inc. and Walden & Kirkland, Inc. Community Capital funded the purchase
of this land primarily through its line of credit with The Bankers Bank, which
is described above. We began construction of Albany Bank's main office in
January, 1999. Albany 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 Community Capital. Additionally, Community Capital 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 Community Capital has been in the organizational stage, there are no
results to present at this time. Nevertheless, once Albany Bank begins
operations, net interest
19
<PAGE> 21
income, Community Capital's primary source of earnings, will fluctuate with
significant interest rate movements. To lessen the impact of these margin
swings, we intend to structure the balance sheet so that repricing opportunities
exist for both assets and liabilities in roughly equal 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 in order to reduce the
impact of interest rate fluctuations on the net interest margin. We will
generally attempt to maintain a balance between rate sensitive assets and
liabilities as the exposure period is lengthened to minimize Albany Bank's
overall interest rate risks.
We will evaluate regularly the balance sheet's asset mix in terms of
several variables: yield, credit quality, appropriate funding sources and
liquidity. To manage effectively the balance sheet's liability mix, we plans to
focus on expanding our deposit base and converting assets to cash as necessary.
As Albany Bank continues to grow, we will continuously structure its rate
sensitivity position in an effort to hedge against rapidly rising or falling
interest rates. Albany Bank's Asset and Liability Management Committee will meet
on a quarterly basis to develop a strategy for the upcoming period. The
committee's strategy will include anticipating 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. We can obtain these funds by converting assets to cash or by
attracting new deposits. Albany Bank's ability to maintain and increase deposits
will serve as its primary source of liquidity.
We knows of no trends, demands, commitments, events or uncertainties that
should result in or are reasonably likely to result in Community Capital'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 interests. 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 has established a 3.0% minimum
leverage ratio
20
<PAGE> 22
requirement. The leverage ratio is computed by dividing Tier 1 capital into
total assets. In the case of Albany Bank and other banks that have not received
the highest regulatory rating by their primary regulator, 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.
The Federal Reserve Board of Governors, the Office of the Comptroller of
the Currency and the FDIC recently established a new rule 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, banks would report
all items on the balance sheet, as well as off-balance sheet items, according to
maturity, repricing dates and cash flow characteristics. The bank would then
multiply its reporting position by duration-based risk factors and weight its
position according to rate sensitivity. The appropriate supervisory agency would
assess capital adequacy using this net risk weighted position. The objective of
this complex proposal is to determine a bank's sensitivity to various rising and
falling interest rate scenarios.
We believe that the net proceeds of this offering will satisfy our cash
requirements for at least the three-year period following the opening of Albany
Bank. Accordingly, we do not anticipate that it will be necessary to raise
additional funds to operate Community Capital or Albany Bank over the next three
years. For additional information about planned expenditures, see "Use of
Proceeds." For additional information about our plan of operations, see
"Proposed Business of Community Capital and Albany Bank."
21
<PAGE> 23
PROPOSED BUSINESS OF COMMUNITY CAPITAL AND ALBANY BANK
BACKGROUND
COMMUNITY CAPITAL. Community Capital was incorporated as a Georgia
corporation on August 19, 1998 to serve as a bank holding company for Albany
Bank. Community Capital plans to use $7.5 million of the net proceeds of this
offering to capitalize Albany Bank. In return, Albany Bank will issue all of its
common stock to Community Capital, and Community Capital will be Albany Bank's
sole shareholder. Initially, Albany Bank will be Community Capital's sole
operating subsidiary. Community Capital has applied to the Federal Reserve and
the Georgia Department of Banking and Finance for prior approval to capitalize
Albany Bank. If these agencies grant the necessary approvals, Community Capital
will become a bank holding company within the meaning of the Bank Holding
Company Act of 1956, as currently in effect, and the Georgia Bank Holding
Company Act upon its purchase of Albany Bank's common stock. See "Supervision
and Regulation -- Bank Holding Company Regulation."
Community Capital has been organized to make it easier for Albany Bank to
serve its future customers. The holding company structure will provide
flexibility for expansion of Community Capital's banking business through the
possible acquisition of other financial institutions and the provision of
additional capital and banking-related services. A holding company structure
will make it easier for Community Capital to raise capital for Albany Bank
because Community Capital will be able to issue securities without the need for
prior banking regulatory approval and the proceeds of debt securities issued by
Community Capital can be invested in Albany Bank as primary capital.
ALBANY BANK. The organizers filed applications on behalf of Albany Bank
with the Office of the Comptroller of the Currency and with the FDIC on
September 21, 1998 for authority to organize as a national bank with federally
insured deposits. Albany Bank will not be authorized to conduct its banking
business until it obtains a charter from the Office of the Comptroller of the
Currency. The issuance of the charter will depend, among other things, upon
Albany Bank's receipt of at least $7.5 million in capital from Community Capital
and upon compliance with other standard conditions expected to be imposed by the
FDIC and the Office of the Comptroller of the Currency. These conditions are
generally designed to familiarize Albany Bank with certain operating
requirements and to prepare it to begin business operations. The Office of the
Comptroller of the Currency requires that a new national bank obtain a charter
and open for business within 18 months after receipt of preliminary approval
from the Office of the Comptroller of the Currency. On , 1999, Albany
Bank received preliminary approval of its application from the Office of the
Comptroller of the Currency, but was awaiting FDIC approval, final approval from
the Office of the Comptroller of the Currency and receipt of a charter.
MARKET OPPORTUNITIES
PRIMARY SERVICE AREA. Albany Bank's initial primary service area is the
ten-mile radius surrounding its main office. The primary service area 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.
22
<PAGE> 24
ECONOMIC AND DEMOGRAPHIC FACTORS. Albany is the key economic focal point of
the Dougherty and Lee County metropolitan statistical area as well as Albany
Bank's primary service area, which encompasses a smaller geographic area than
the metropolitan statistical area. The Dougherty and Lee County metropolitan
statistical area 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 marketplace. Albany also
serves as the primary medical center for Southwest Georgia. We believe the
Dougherty and Lee County metropolitan statistical area represents a dynamic and
unique market in the sense that it serves a wide geographic area encompassing
most 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 the Dougherty and Lee County metropolitan statistical area and in Albany
Bank's primary service area, 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 Albany Bank's main office,
encompassing Albany Bank's primary service area, was approximately 104,000 in
1990, while the population within a 30-mile radius surrounding Albany Bank's
main office was approximately 170,000. The projected 2002 population for the
primary service area 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 primary service area 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.
According to this 1995 report, the medical facilities located in Dougherty
County employ approximately 5,600 employees or approximately 10% of the
Dougherty County work force and 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 Dougherty County, the county is
well diversified for construction-related purposes. These companies employ
approximately
23
<PAGE> 25
2,900 people or 5% of the work force. In addition, there are approximately 70
agricultural related companies located in the area that employ approximately 540
people, or 1% of the work force.
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 July 16,
1998. 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..................................... 493 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............................... 326 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.
24
<PAGE> 26
We believe the Albany market presents a growing and highly diversified
economic environment that will support Albany Bank's formation. As a community
bank, Albany Bank will be designed to serve the needs of the citizens and
businesses within this growing economy. We believe continued economic growth in
the Albany market will be important to Albany Bank's long-term success.
COMPETITION. The banking business is highly competitive. Albany Bank will
compete 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. A number of these
competitors are well established in the Dougherty/Lee County area.
Some of Albany Bank's competitors have substantially greater resources and
lending limits than Albany Bank and provide other services, such as extensive
and established branch networks and trust services, that Albany Bank does not
expect to provide initially. As a result of these competitive factors, Albany
Bank may have to pay higher interest rates to attract depositors or extend
credit with lower interest rates 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.
Several community banks also have branches in the Albany market; however, no
other community banks are headquartered in the Albany market.
25
<PAGE> 27
The following table illustrates the June 1996 deposit base by financial
institution within a 10-mile, 20-mile and 30-mile radius of Albany Bank's
proposed 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........... $212.3 25.6% $219.1 22.3% $ 264.4 21.1%
First State Bank and
Trust Company......... 183.7 22.1 197.2 20.1 197.3 15.8
NationsBank............. 157.5 19.0 157.5 16.1 157.5 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 6.1 51.1 5.2 51.1 4.1
Bank of Dawson.......... -- -- 62.4 6.4 62.4 5.0
Bank of Terrell......... -- -- 60.4 6.1 60.4 4.8
Planters & Citizens
Bank.................. -- -- -- -- 55.2 4.4
Bank of Camilla......... -- -- -- -- 42.7 3.4
Sylvester Banking
Company............... -- -- -- -- 40.7 3.2
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.................. $831.2 100.0% $982.0 100.0% $1,251.9 100.0%
====== ===== ====== ===== ======== =====
</TABLE>
As reported by National Decision Systems, total deposits in the 10-mile
radius surrounding Albany 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, Albany Bank will compete
with AGE Credit Union. AGE Credit Union operates in six locations throughout the
Albany market. We anticipate that AGE Credit Union along with the other regional
banks operating in the Albany market will be Albany Bank's primary source of
competition. We believe, however, that operating as a community bank
headquartered in Albany will provide Albany Bank with a unique opportunity to
obtain a share of those institutions' deposits.
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In 1996, First Union Corp. exited the Albany market by selling its
Dougherty County branches to First State Bank and Trust Company, which was later
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, we
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. We intend to differentiate Albany
Bank from other financial institutions primarily through personal service and
strong involvement in the Albany market.
BUSINESS STRATEGY
MANAGEMENT PHILOSOPHY. Albany 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. Albany Bank has adopted this philosophy in order to attract
customers and acquire market share now controlled by other financial
institutions in the Albany market. We believe that local ownership and control
will allow Albany Bank to serve customers more efficiently and will aid in
Albany Bank's growth and success. Additionally, we believe that the expansion
and growth of Albany Bank's operations will be a significant factor in Community
Capital's success. Accordingly, we will implement the following operating and
growth strategies.
OPERATING STRATEGY. In order to achieve the level of prompt, responsive
service that we believe will be necessary to attract customers and to develop
Albany Bank's image as a local bank with an individual focus, we will employ the
following operating strategies:
- QUALITY EMPLOYEES. We will strive to hire highly trained and seasoned
staff. We plan to train the staff to answer questions about all of our
products and services so that the first employee the customer encounters
can resolve customer questions. We are committed to hiring experienced
and qualified staff, although this may result in higher personnel costs
than are typically experienced by similar financial institutions.
- EXPERIENCED SENIOR MANAGEMENT. Albany 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,
Community Capital's President, Robert E. Lee, has over 25 years of
banking experience, and its Chief Lending Officer, David C. Guillebeau,
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 Albany area who represent Albany 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. We expect that the
directors will bring substantial business and banking contacts to Albany
Bank as a result of their experience and involvement.
- COMMUNITY INVOLVEMENT. All of Community Capital's officers and directors
are active in the Dougherty/Lee County community, and their continued
active
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community involvement will provide an opportunity to promote Albany Bank
and its products and services.
- OFFICER AND DIRECTOR CALL PROGRAM. We intend to implement an active
officer and director call program to promote Albany Bank's philosophy.
The purpose of this call program will be to visit prospective customers
and describe Albany Bank's products, services and philosophy.
- HIGHLY VISIBLE SITE. Albany Bank's main office location is highly visible
and near a high concentration of its targeted commercial businesses and
residential areas. We believe this will enhance Albany Bank's image as a
strong competitor.
- BRANCHING. Albany Bank intends to open two branches within the first 36
months of operations. Branching will give Albany Bank the ability to
diversify and provide the entire Albany market with convenient banking
services.
- INDIVIDUAL CUSTOMER FOCUS. Albany Bank will focus on providing
individualized service and attention to its target customers, which
include individuals and small to medium-sized businesses. As its
employees, officers and directors become familiar with its customers on
an individual basis, Albany 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 Albany Bank branches into other communities, it
will maintain its policy of making decisions locally and will utilize
local advisory boards. This will allow Albany Bank to be more responsive
to customer requests and to the needs of customers within the particular
community.
- MARKETING AND ADVERTISING. Community Capital has retained Broad Street
Productions, a local marketing firm, to promote Albany Bank and to
develop its image as a community oriented bank with an emphasis on
quality service and personal contact. Albany Bank will also use media
services such as local newspapers, drive-time radio, direct mail
campaigns and television to promote its products and services.
GROWTH STRATEGY. Because we believe that growth and expansion of Albany
Bank's operations will be a significant factor in Community Capital's success,
we plan to implement the following growth strategies:
- CAPITALIZE ON TREND TOWARD CONSOLIDATION. Albany 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. We intend to expand Albany Bank's 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. By adding
these branches, Albany Bank will gain new channels through which it can
build its deposit base and solicit new customers.
- ATTRACT EMPLOYEES WITH ESTABLISHED CUSTOMER RELATIONSHIPS. We will seek
to hire employees who have, through their experience in banking,
established significant customer relationships. By hiring employees with
established customer relationships,
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Albany 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. Albany Bank will construct a main office
building with sufficient room to allow for future expansion. The size of
its proposed main office will allow for additional loan officers and for
the addition of a mortgage lending department.
- OFFER FEE-GENERATING PRODUCTS AND SERVICES. Albany Bank's range of
services, pricing strategies, interest rates paid and charged, and hours
of operation will be structured to attract its target customers and
increase its market share. Albany Bank will strive to offer small
businesses, professionals, entrepreneurs and consumers the best loan
services available while charging aggressively for such services and
using technology and engaging third-party service providers to perform
certain functions at a lower cost to increase fee income.
LENDING SERVICES
LENDING POLICY. Albany Bank is being established to support Albany and
surrounding areas of Dougherty/Lee County. Consequently, Albany Bank will
aggressively seek to lend money to creditworthy borrowers within a limited
geographic area. Albany 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, Albany 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.
Albany Bank intends to maintain a balanced loan portfolio. We estimate that
consumer loans to individuals will comprise 20% of the portfolio, commercial
loans to small to medium-sized businesses will comprise 40% of the portfolio,
and real estate related loans will comprise 40% of the portfolio. None of these
categories represents a significantly higher risk than the other. Additionally,
Albany Bank plans to avoid concentrations of loans to a single industry or based
on a single type of collateral.
LOAN APPROVAL AND REVIEW. Albany Bank's loan approval policies will provide
for various levels of officer lending authority. When the amount of total loans
to a single borrower exceeds that individual officer's lending authority, an
officer with a higher lending limit or Albany Bank's Loan Committee will
determine whether to approve the loan request. Initially, however, all loans
regardless of amount will go to the Loan Committee. Albany Bank will not make
any loans to any of its directors or executive officers unless its Board of
Directors approves the loan and the terms of the loan are no more favorable than
would be available to any other applicant.
LENDING LIMITS. Albany 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, Albany
Bank will be able to loan any one borrower a maximum amount equal to either: (1)
15% of Albany Bank's capital and surplus or (2) 25% of its capital and surplus
if the excess over 15% is within the federal guidelines, which provide an
exception to the 15% limit for certain secured debt. Based on its proposed
capitalization and projected pre-opening expenses, Albany Bank's initial lending
limit will be approximately $1.1 million for loans not fully secured plus an
additional
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<PAGE> 31
$750,000, or a total of approximately $1.9 million, for loans that meet the
federal guidelines. Albany 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 Albany Bank's capital increases or decreases
as a result of its earnings or losses, among other reasons. Albany Bank will
need to sell participations in its loans to other financial institutions in
order to meet all of the lending needs of loan customers requiring extensions of
credit above these limits.
CREDIT RISKS. The principal economic risk associated with each category of
loans that Albany Bank expects to make is the creditworthiness of the borrower.
Borrower creditworthiness is affected by general economic conditions and the
strength of the services and retail market segments. 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
Albany Bank will make. Many of Albany Bank's anticipated commercial loans will
likely be made to small to medium-sized businesses that may be less able to
withstand competitive, economic and financial pressures than larger borrowers.
REAL ESTATE LOANS. Albany Bank will make commercial real estate loans,
construction and development loans, and residential real estate loans. These
loans include certain commercial loans where Albany 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.
- COMMERCIAL REAL ESTATE. Commercial real estate 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, although
rates will not be fixed for a period exceeding 60 months. Albany Bank will
generally charge an origination fee. We will attempt to reduce credit risk on
our commercial real estate loans by emphasizing loans on owner-occupied office
and retail buildings where the ratio of the loan principal to the value of the
collateral as established by independent appraisal does not exceed 80% and net
projected cash flow available for debt service equals 120% of the debt service
requirement. In addition, Albany Bank may require personal guarantees of the
principal owners of the property backed with a review by Albany Bank's
management of the principal owners' personal financial statements. Risks
associated with commercial real estate loans include fluctuations in the value
of real estate, new job creation trends, tenant vacancy rates and of the quality
of the borrower's management. Albany Bank will limit its risk by analyzing
borrowers' cash flow and collateral value on an ongoing basis. Albany Bank will
compete for real estate loans with competitors that are well established in the
Albany market.
- CONSTRUCTION AND DEVELOPMENT LOANS. Construction and development loans
will be made both on a pre-sold and speculative basis. Construction and
development loans are generally made with a term of nine months and interest is
paid quarterly. The ratio of the loan principal to the value of the collateral
as established by independent appraisal will not exceed 75%. Speculative loans
will be based on the borrower's financial strength and cash flow position. Loan
proceeds will be disbursed based on the percentage of completion and only after
the project has been inspected by an experienced construction lender or
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<PAGE> 32
appraiser. Risks associated with construction loans include fluctuations in the
value of real estate and new job creation trends.
- RESIDENTIAL REAL ESTATE. Albany Bank's residential real estate loans will
consist of residential first and second mortgage loans and residential
construction loans. We will offer fixed and variable rates on our mortgages with
the amortization of first mortgages generally not to exceed 15 years and the
rates not to be fixed for over 60 months. These loans will be made consistent
with Albany Bank's appraisal policy and with the ratio of the loan principal to
the value of collateral as established by independent appraisal not to exceed
90%. We expect these loan to value ratios will be sufficient to compensate for
fluctuations in real estate market value and to minimize losses that could
result from a downturn in the residential real estate market. Albany Bank plans
to open a mortgage department to process home loans within the first 18 months
of operation, which will allow it to originate long term mortgages to be sold on
the secondary market. Albany 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
before originating the loan.
COMMERCIAL LOANS. We expect that loans for commercial purposes in various
lines of businesses will be one of the primary components of Albany Bank's loan
portfolio. The terms of these loans will vary by purpose and by type of
underlying collateral, if any. Albany Bank will typically make equipment loans
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 secured by the
financed equipment, and the ratio of the loan principal to the value of the
financed equipment or other collateral will generally be 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. The quality of the commercial
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 a
commercial borrower's creditworthiness.
CONSUMER LOANS. Albany 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. Consumer loan
repayments depend upon the borrower's financial stability and are more likely to
be adversely affected by divorce, job loss, illness and personal hardships.
Because many consumer loans are secured by depreciable assets such as boats,
cars, and trailers the loan should be amortized over the useful life of the
asset. To minimize the risk that the borrower cannot afford the monthly
payments, all fixed monthly obligations should not exceed 38% of the borrower's
gross monthly income. The borrower should also be employed for at least 12
months prior to obtaining the loan. The loan officer will review the borrower's
past credit history, past income level, debt history and, when applicable, cash
flow and determine the impact of all these factors on the ability of the
borrower to make future payments as agreed. We expect that the principal
competitors for consumer loans will be the established banks in the Albany
market.
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<PAGE> 33
LENDING OFFICERS. Albany Bank intends to hire an experienced commercial
real estate lender and consumer lender in order to develop its loan portfolios.
Each lender will have experience within the Albany market and will be expected
to bring substantial contacts to Albany Bank.
INVESTMENTS
In addition to loans, Albany 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 Asset and Liability Management Committee will review the
investment portfolio on an ongoing basis in order to ensure that the investments
conform to Albany Bank's policy as set by the Board of Directors. Members of the
Asset and Liability Management Committee will be chaired by Corinne C. Martin
and will also include Bennett D. Cotten, Jr., Robert E. Lee, Robert M.
Beauchamp, Mark M. Shoemaker and John P. Ventulett, Jr.
ASSET AND LIABILITY MANAGEMENT
The Asset and Liability Management Committee will manage Albany Bank's
assets and liabilities and will strive to provide an optimum and stable net
interest margin, a profitable after-tax return on assets and return on equity
and adequate liquidity. The committee will conduct these management functions
within the framework of written loan and investment policies that Albany Bank
will adopt. The committee 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 attempt to manage any gaps in maturity ranges.
DEPOSIT SERVICES
Albany Bank will seek to establish solid core deposits, including checking
accounts, money market accounts, a variety of certificates of deposit and IRA
accounts. To attract deposits, Albany Bank will employ an aggressive marketing
plan in the overall service area and feature 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. Albany Bank plans
to obtain these deposits through personal solicitation by its officers and
directors, direct mail solicitations and advertisements published in the local
media. It plans to generate deposits by offering a broad array of competitively
priced deposit services, including demand deposits, regular savings accounts,
transaction and investment money market deposits, certificates of deposit,
retirement accounts and other legally permitted deposit or funds transfer
services 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. Albany Bank plans to
become associated with a shared network of automated teller machines that its
customers will be able to use throughout Georgia and other regions. Albany Bank
plans to offer annuities, mutual funds and other financial services through a
third party that has not yet been chosen. We also plan to offer MasterCard(R)
and VISA(R) credit card services through a correspondent bank as an agent
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for Albany Bank. Albany Bank does not plan to exercise trust powers during its
initial years of operation. It may in the future offer a full-service trust
department, but cannot do so without the prior approval of the Office of the
Comptroller of the Currency.
Albany 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. We believe that this will be an important
service for our customers because Albany Bank will initially have only one
location.
FUTURE SERVICES
In addition to the services described above, we anticipate that at some
time in the future we will also offer to our customers discount brokerage
services. We will probably not offer these services until both Community Capital
and Albany Bank are operating profitably.
MARKETING AND ADVERTISING
Albany 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 our directors and officers have developed business contacts with
numerous professionals within the medical service industry. We intend to develop
a niche in providing banking services to these and other medical providers.
We plan to use a targeted marketing approach through local newspapers,
radio advertisements during peak driving times, direct mail campaigns, and
television spots as necessary. Additionally, we plan to sponsor community
activities on an active, ongoing basis. We have retained Broad Street
Productions in order to coordinate our advertising and marketing efforts.
INFORMATION SYSTEMS AND THE YEAR 2000
THE YEAR 2000 PROBLEM. The year 2000 issue confronting Community Capital,
Albany Bank and their 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 millennium, these
programs and computers will recognize "00" as the year 1900 rather than the year
2000. Like most financial service providers, Community Capital and its
operations may be affected significantly by the year 2000 issue because it
depends on computer-generated financial information. Software, hardware and
equipment both within and outside of our direct control, and third parties with
whom we electronically or operationally interface are likely to be affected.
These third parties include customers and third party vendors providing data
processing, information systems management, computer system maintenance and
credit bureau information. If computer systems are not able to identify the year
2000, many computer applications could fail or create incorrect results.
Consequently, many calculations that rely on date-related information, such as
interest, payment or due dates and other operating functions, could generate
significantly misstated results, and we could lose our ability to process
transactions, prepare statements or engage in similar normal business
activities. In addition, under certain circumstances, failure to
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<PAGE> 35
address adequately the year 2000 issue could adversely affect the viability of
Albany 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 our products, services and competitive condition
and, in turn, our 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 Community Capital is still pending regulatory approval regarding
its status as a bank holding company and Albany Bank has not yet commenced
operations, federal banking regulators are focusing on Community Capital's and
Albany Bank's year 2000 readiness as part of the regulatory approval process.
Once Community Capital and Albany Bank have obtained the necessary regulatory
approvals, the federal banking regulators will continue to monitor their status
on year 2000 issues as described above.
OUR READINESS. Because Community Capital is a start-up entity and Albany
Bank has not yet commenced business, we do not have existing systems or
equipment requiring year 2000 testing and remediation. Rather, we are purchasing
all of our office equipment, hardware and software and obtaining outsourcing
service commitments only from vendors and service providers that can certify
that their products and services are year 2000 compliant. For example, we 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. We plan to obtain our 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. We believe that we will be able to obtain
these products and services from vendors and service providers that can supply
the necessary certification. If we are unable to do so, however, we will either
forego acquiring the product or service until we receive the required
certification or, if the product or service is essential to our operations,
arrange for independent testing and verification of year 2000 compliance.
As we acquire equipment and systems and commence operations, we will test
our year 2000 readiness on an ongoing basis. Although we do not anticipate
encountering difficulties
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<PAGE> 36
in this area, we will require our vendors and service providers to upgrade or
replace any equipment that proves to be non-compliant. If we do not receive the
necessary upgrades or equipment, we will obtain new equipment or engage a new
service provider with demonstrated year 2000 compliance.
Although our internal systems, equipment and operations require significant
oversight with respect to year 2000 issues, we believe that our customers' year
2000 readiness could also have a significant effect on our operations. For
example, if a customer with an outstanding loan from Albany 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 Albany Bank. Although we
plan to consider this possibility when we establish the loan loss reserve for
Albany Bank, the potential losses could exceed our estimate and ultimately cause
a net loss to Albany Bank and Community Capital. To address this concern, we
will communicate with customers on an ongoing basis regarding our year 2000
readiness and attempt to identify at the earliest opportunity those customers
that are likely to encounter year 2000 problems. We plan to work with these
customers to ensure, to the greatest extent possible, that their year 2000
compliance issues do not disrupt our operations.
RESOURCES ALLOCATED. To ensure that senior members of management continue
to monitor our year 2000 readiness on a consistent basis, Community Capital's
Board of Directors established a Year 2000 Committee on November 9, 1998. The
members of the committee will establish guidelines for the acquisition of new
equipment and services that will be year 2000 compliant; communicate with
potential borrowers, vendors and service providers regarding year 2000 issues;
and monitor our 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.
Because our year 2000 compliance program will principally involve acquiring
systems, equipment and outsourced services that are year 2000 compliant, we do
not expect that Community Capital or Albany Bank will incur material year 2000
compliance or remediation costs. Rather, these costs will be included in the
initial cost of obtaining the equipment or services that we will need in order
to begin operations. As a result, we have not established a separate budget for
year 2000 compliance expenses. The Year 2000 Committee will, however, monitor
our needs in this area and will establish a budget for year 2000 expenses if it
believes that our year 2000 costs will prove to be material.
CONTINGENCY PLANS. We believe that our only mission-critical, or "core,"
system is our host application processing system, which will be provided and
operated by a third party service provider. If this system is unable to process
data reliably, we 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 our results of
operations, liquidity and financial condition. To address this contingency, we
are negotiating with a disaster recovery service that will run our data
processing systems if our primary service provider is unable to do so. We will
require that the disaster recovery
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service certify that its systems are year 2000 compliant before we engage the
service. We also plan to store optical copies of our computerized records and
will be prepared to print paper copies of those records on December 31, 1999.
EMPLOYEES
When it begins operations, Albany Bank will have approximately 15 employees
and two part-time employees. We do not expect that Community Capital will have
any employees who are not also employees of Albany Bank.
Robert E. Lee is the President of Community Capital and will be the
President and Chief Executive Officer of Albany Bank. Mr. Lee has over 25 years
of banking experience, including extensive experience in the areas of finance
and operations.
David C. Guillebeau will be the Chief Lending Officer of Albany Bank. Mr.
Guillebeau has over 12 years of banking experience, including extensive lending
and management experience.
We intend to complete our senior management team by hiring a Chief
Financial Officer for Community Capital and Albany Bank. We expect that the
Chief Financial Officer will possess substantial experience in the areas of
finance and operations and a thorough understanding of the technological issues
relating to the operation of a bank. See "Management" for additional information
about our executive officers and their qualifications.
FACILITIES
Albany Bank will be located at 2815 Meredyth Drive in Albany, Georgia in
Dougherty County. On November 20, 1998, Community Capital purchased
approximately two acres of land at 2815 Meredyth Drive at a purchase price of
$315,000. Construction of the permanent facility began in January 1999, with the
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 windows and one automated
teller machine. The estimated construction costs of the building total $1.3
million.
Albany 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 and is near a
major highway serving the community.
Albany Bank will operate initially out of a modular facility that we plan
to locate on the site of the permanent facility. The rental fee for the modular
facility will be approximately $3,650 per month for 12 months.
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<PAGE> 38
MANAGEMENT
PROPOSED EXECUTIVE OFFICERS AND DIRECTORS OF COMMUNITY CAPITAL AND ALBANY BANK
The following table sets forth, for the initial members of the Board of
Directors of both Community Capital and Albany Bank, (1) their names, addresses
and ages at December 31, 1998, (2) their respective positions with Community
Capital and Albany 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, that they will receive when they purchase common
stock in this offering. The directors and executive officers may collectively
purchase up to a total of 300,000 shares of common stock in the offering, but
have indicated that they intend to purchase a total of 280,000 shares as listed
below.
<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 of the Board of 30,000 3.0% 15,000
907 W. Third Ave. Directors of Community
Albany, GA 31707 Capital and Albany Bank
and Chief Executive
Officer of Community
Capital
Van Cise Knowles (58)............. Director 15,000 1.5 15,000
3503 Old Dawson Rd.
Albany, GA 31707
Robert E. Lee (46)................ President of Community 50,000 5.0 65,000(1)
5101 Old Dawson Road Capital and Albany
Albany, GA 31707 Bank, Chief Executive
Officer of Albany
Bank, 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
</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>
John P. Ventulett, Jr. (50)....... Director 10,000 1.0 10,000
2504 Cooleewahee Cove
Albany, GA 31707
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 of Community
1618 Valencia Dr. Capital and Director 10,000 1.0 10,000
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 President 5,000 0.5 20,000(2)
5009 Barrington Drive and Senior Loan Officer
Albany, GA 31707 of Albany Bank
------- ---- -------
All Proposed Directors and 280,000 28.0% 275,000
Executive Officers as a Group
(16 persons)
</TABLE>
- -------------------------
(1) Includes options to purchase 50,000 shares of common stock to be issued
to Mr. Lee.
(2) Includes options to purchase 20,000 shares of common stock to be issued
to Mr. Guillebeau.
Each person listed above has been a director of Community Capital since
August 19, 1998 and is a proposed director of Albany Bank, except for David C.
Guillebeau. Directors of Community Capital serve staggered terms, which means
that one-third of the directors will be elected each year at Community Capital'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. As is required under Community
Capital's Bylaws, the Board of Directors includes, and will continue to include,
at least two independent directors. Community Capital's officers are appointed
by the
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<PAGE> 40
Board of Directors and hold office at the will of the Board. See "Certain
Provisions of the Articles of Incorporation and Bylaws."
Each of Albany Bank's proposed directors will, upon approval of the Office
of the Comptroller of the Currency, serve until Albany Bank's first shareholders
meeting, which will convene shortly after Albany Bank receives its charter.
Community Capital, as the sole shareholder of Albany Bank, will nominate each
proposed director to serve as director of Albany Bank at that meeting. After the
first shareholders meeting, directors of Albany Bank will serve for a term of
one year and will be elected by Community Capital each year at Albany Bank's
annual meeting of shareholders. Albany Bank's officers will be appointed by its
Board of Directors and will hold office at the will of its 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 of Science degree 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 Community Capital and Albany Bank and
as the Chief Executive Officer of Community Capital. 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
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<PAGE> 41
through his service on the Boards of Directors of Albany Tomorrow, Inc., Mount
Zion Civil Rights Museum and Thronateeska Heritage Center.
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 of Science degree 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 Community Capital and will be
the President and Chief Executive Officer of Albany 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 Community Capital and Albany Bank.
Mr. Lee earned a Bachelor 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
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<PAGE> 42
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 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, a
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 a 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 degree
in Biology from Lincoln University.
DAVID C. GUILLEBEAU. David Guillebeau will be the Chief Lending Officer of
Albany Bank. Mr. Guillebeau is a native of Albany and is a graduate of the
University of Georgia. Mr. Guillebeau comes to Albany 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
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<PAGE> 43
bank and was responsible for approximately 20 employees and the audit and sales
function of the bank, which was approximately a $200 million institution.
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
Community Capital's Board of Directors has established the committees
described below. The members of each committee will be the same for Albany Bank
as they are for Community Capital.
COMPENSATION COMMITTEE. The Compensation Committee establishes compensation
levels for officers of Community Capital and Albany Bank, reviews management
organization and development, reviews significant employee benefit programs and
establishes and administers executive compensation programs, including the 1998
Stock Incentive Plan as described below. The Compensation Committee is chaired
by Van Cise Knowles and also includes Charles M. Jones, III, Robert E. Lee and
Jane Anne D. Sullivan.
EXECUTIVE COMMITTEE. The Executive Committee has authority to exercise the
powers of the Board of Directors in managing the affairs and assets of Community
Capital and Albany Bank between Board meetings, except for the powers
exclusively reserved to the Board of Directors of Community Capital or Albany
Bank. The Executive Committee is also responsible for making recommendations to
the Board of Directors regarding matters relating to the management and
expansion of Albany Bank. The Executive Committee is chaired by Charles M.
Jones, III and also includes 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 Community Capital's and Albany Bank's annual financial
statements and approves any special assignments given to the independent public
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 Community Capital's and Albany Bank's internal accounting
staff. Additionally, the Audit and Compliance Committee provides oversight to
Community Capital's and Albany Bank's compliance with regulatory rules and
regulations, including the Community Reinvestment Act. The Audit and Compliance
Committee is chaired by William F. McAfee and also includes Glenn A. Dowling and
C. Richard Langley.
LOAN COMMITTEE. The Loan Committee reviews any loan request made by a
potential borrower over a certain credit threshold for compliance with Albany
Bank's lending policies and federal and state rules and regulations governing
extensions of credit and decides whether to extend credit to the potential
borrower. The Loan Committee is chaired
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<PAGE> 44
by Robert E. Lee and also includes Mary Helen Dykes, Charles M. Jones, III,
William F. McAfee, John P. Ventulett, Jr. and James D. Woods.
ASSET AND LIABILITY MANAGEMENT COMMITTEE. The Asset and Liability
Management Committee provides guidance to Community Capital and Albany Bank in
balancing the yields and maturities in Albany Bank's loans and investments to
its deposits. The Asset and Liability Management Committee is chaired by Corinne
C. Martin and also includes Bennett D. Cotten, Jr., Robert E. Lee, Robert M.
Beauchamp, Mark M. Shoemaker and John P. Ventulett, Jr.
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<PAGE> 45
EXECUTIVE COMPENSATION
1998 COMPENSATION
The following table shows information for 1998 with regard to compensation
for services rendered in all capacities to Community Capital by its Chief
Executive Officer and by its President. No other 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>
Charles M. Jones, III................ 1998 -0- -0- -0-
Chairman and Chief Executive Officer
Robert E. Lee........................ 1998 45,832 -0- -0-
President
</TABLE>
EMPLOYMENT AGREEMENTS
Effective August 1, 1998 and October 1, 1998, respectively, Community
Capital and Albany 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 Community Capital and Albany Bank and Chief Executive
Officer of Albany Bank, and Mr. Guillebeau's employment as Executive Vice
President of Community Capital and Albany Bank and Senior Loan Officer of Albany
Bank. Under the terms of the 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 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 Albany Bank's earnings. Additionally, the agreements provide
that Community Capital 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 Community Capital 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 become
exercisable in equal annual increments of 20% beginning on the one-year
anniversary of the date of this prospectus. The options will have an exercise
price of $10.00 per share. Community Capital 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 agreement and at the end of each
succeeding 12-month period, each agreement will be extended for a successive
12-month period unless either of the parties to each of the agreements notifies
the other party to the agreement of his or its intent not to extend the
agreement. If (1) an Employee dies or (2) Community Capital or Albany Bank
abandons its organizational efforts or certain other terms and conditions are
not met by December 31, 1999, neither Community Capital nor Albany Bank will
have any further obligations under the applicable agreement. Employment may be
terminated
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<PAGE> 46
(1) by Albany Bank or Community Capital if it elects to terminate employment for
cause, (as defined in each agreement; (2) by the Employee if Albany Bank or
Community Capital breaches any material provision of the agreement or if the
Employee's powers, responsibilities or duties are materially diminished; or (3)
upon the Employee's death or disability. If Community Capital or Albany Bank
terminates employment without cause or the Employee terminates employment with
cause, Community Capital or Albany Bank will be required to pay the compensation
and provide the health and dental insurance coverage due under the agreement for
a period equal to the greater of 12 months from the date of termination or the
remaining term of the agreement. If Community Capital or Albany Bank terminates
employment with cause, or the Employee terminates employment without cause or in
connection with a change in control as defined in the each agreement, the
Employee will be prohibited from competing with Community Capital or Albany Bank
or soliciting its customers or employees within the geographic area set forth in
the agreement for a period of 12 months from the date of termination. If
employment is terminated by the Employee within six months following a change of
control, Community Capital will have to pay the Employee in cash a premium over
the sum of the Employee's annual base salary and the Employee's annual incentive
compensation.
DIRECTOR COMPENSATION
The directors of the Community Capital and Albany Bank will not be
compensated separately for their services as directors until net profits of the
Community Capital and Albany Bank exceed their net losses since inception on a
cumulative basis. Thereafter, Community Capital and Albany Bank will adopt
compensatory policies for their directors that conform to applicable law.
ORGANIZERS' WARRANTS
The organizers intend to purchase a total 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, or 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
and made cash advances to Community Capital for organizing expenses of Community
Capital and Albany Bank.
In recognition of the efforts made and financial risks undertaken by the
organizers in organizing Community Capital and Albany Bank, Community Capital
will issue to the organizers warrants to purchase additional shares of common
stock. Community Capital will issue to each organizer a warrant to purchase one
share of common stock for each share the organizer purchases in the offering, up
to a limit of 15,000 shares per warrant for any one organizer. The organizers
may purchase up to 225,000 shares through the exercise of these warrants. The
warrants will become exercisable in 20% annual increments beginning on the
one-year anniversary of the date of this prospectus so long as the holder
remains on Community Capital's Board of Directors. Exercisable warrants will
remain 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, recapitalizations or other similar events.
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<PAGE> 47
STOCK INCENTIVE PLAN
GENERAL. Community Capital's 1998 Stock Incentive Plan provides Community
Capital with the flexibility to grant the stock incentives described in this
section of the prospectus to key employees, officers and directors of Community
Capital or Albany Bank for the purpose of giving them a proprietary interest in,
and to encourage them to remain in the employ of, Community Capital or Albany
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 under the plan. The number of shares reserved for issuance may change
in the event of a stock split, recapitalization or similar event as described in
the plan.
ADMINISTRATION. Community Capital's Compensation Committee, which is
comprised of at least two directors appointed by its Board of Directors, will
administer the plan. The Board of Directors will consider the standards
contained in both Section 162(m) of the Internal Revenue Code of 1986, as
currently in effect and Rule 16(b)(3) under the Securities Exchange Act of 1934,
as currently in effect, 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 plan, to determine the terms of each award, to interpret the
provisions of the plan and to make all other determinations that it may deem
necessary or advisable to administer the plan.
The plan permits the Compensation Committee to make awards of shares of
common stock, awards of stock options and similar securities related to the
value of the common stock and certain cash awards to eligible persons. The
committee may grant these awards on an individual basis or design a program
providing for awards to a group of eligible persons. The plan permits the
committee to make awards of a variety of stock-based incentives, including stock
awards, stock options and other incentive compensation based on the fair market
value of the common stock. These incentives are described more fully below.
The Compensation Committee determines, within the limits of the plan, the
number of shares of common stock subject to a stock incentive and to whom any
stock incentive is granted and the exercise or settlement price and forfeiture
or termination provisions of each stock incentive. A holder of a stock incentive
generally may not transfer the stock incentive during his or her lifetime.
OPTIONS. The plan provides for incentive stock options and non-qualified
stock options. The Compensation Committee will determine whether an option is an
incentive stock option or a non-qualified stock option when it grants the
option, and the option will be evidenced by a stock incentive agreement
describing the material terms of the option.
The Compensation Committee determines the exercise price of an option. 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 Community Capital's
outstanding common stock. When the incentive stock option is exercised,
Community Capital will be entitled to place a legend on the certificates
representing the shares of common stock purchased upon exercise of the option to
identify them as shares of common stock purchased upon the exercise of an
incentive stock option. The exercise price of non-qualified stock options may be
equal to, less than or more than the fair market value of the common stock on
the date that the option is awarded, based upon any reasonable measure of fair
market value. The
46
<PAGE> 48
committee may permit the exercise price to be paid in cash, by the delivery of
previously owned shares of common stock, 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 Compensation Committee will also determine the term of an option. The
term of an incentive stock option may not exceed ten years from the date of
grant, but any incentive stock option granted to a participant who owns more
than 10% of the outstanding 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, if a participant's
employment terminates, an incentive stock option will terminate and become
unexercisable no later than three months after the date of termination of
employment. If, however, 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 incentive stock option first becomes exercisable in any calendar year
is limited to $100,000 per recipient. If 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 options, if any, have been granted in excess of the $100,000 limit,
options will be considered to become exercisable in the order granted.
STOCK APPRECIATION RIGHTS. The Compensation Committee may grant stock
appreciation rights separately or in connection with another stock incentive,
and the committee may provide that the holder may exercise them at any time or
that they will be paid at a certain time or times 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 Compensation Committee may grant shares of common stock
to a participant either with or without restrictions or conditions.
OTHER STOCK INCENTIVES. The Compensation Committee may award (1) the right
to receive in the future an amount in cash, which is equal to the full or
partial fair market value of a specified number of shares of common stock as of
a specified date, (2) rights to receive shares of common stock when the
recipient, Community Capital or Albany Bank achieves certain performance
standards, (3) rights to receive shares of common stock instead of cash
dividends and (4) similar rights. The committee determines the numbers or units
to be granted, any applicable conditions or restrictions and whether the
incentive will be paid in the form of cash or common stock.
CASH AWARDS. The Compensation Committee may make cash awards designed to
cover tax obligations of employees that result from the receipt or exercise of a
stock incentive.
TERMINATION OF STOCK INCENTIVES. 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 Community Capital or Albany Bank,
upon a specified date, upon the holder's death or disability, or upon the
occurrence of a change in control of Community Capital. Stock incentives may
grant exercise, conversion or settlement rights to a holder's estate or personal
representative if the holder dies or becomes disabled. The committee may, within
the terms of the plan and the applicable stock incentive agreement, cancel,
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accelerate, pay or continue an option that would otherwise terminate for the
reasons discussed above.
CERTAIN REORGANIZATIONS. The plan provides for appropriate adjustment, as
determined by the Compensation 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, the committee may, within the terms
of the plan and the applicable stock incentive agreement, substitute, cancel,
accelerate, cancel for cash or otherwise adjust the terms of a stock incentive.
AMENDMENT AND TERMINATION OF THE PLAN. The Board of Directors has the
authority to amend or terminate the plan. The Board of Directors is not required
to obtain shareholder approval to amend or terminate the plan, but may condition
any amendment or termination of the plan upon shareholder approval if it
determines that shareholder approval is necessary or appropriate under tax,
securities, or other laws. The Board's action may not 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 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
plan.
INCENTIVE STOCK OPTIONS. A participant who exercises an incentive stock
option will not be taxed when he or she exercises the option or a portion of the
option. Instead, the participant will be taxed when he or she sells the shares
of common stock purchased upon exercise of 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
Community Capital will not get a corresponding deduction. If the participant
sells the shares of common stock at a gain before that time, the difference
between the amount the participant paid for the common stock and the lesser of
its 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 before the exercise of the option
or a portion of the option. When the participant exercises a non-qualified
option or portion of the option, 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 price paid for the
common stock, and Community Capital will then be entitled to a corresponding
deduction.
Depending upon the time period for which shares of common stock are held
after exercise of an option, the sale or other taxable disposition of shares
acquired through the
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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 the 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 Community Capital and to a participant who is subject to the
reporting requirements of Section 16 of the Securities Exchange Act of 1934, as
currently in effect.
OTHER STOCK INCENTIVES. A participant will not recognize income upon the
grant of (1) a stock appreciation right, (2) the right to receive in the future
an amount in cash, which is equal to the full or partial fair market value of a
specified number of shares of common stock as of specified date, (3) the right
to receive shares of common stock when the recipient, Community Capital or
Albany Bank achieves certain performance standards, (4) the right to receive
shares of common stock instead of cash dividends or (5) a similar right.
Generally, when a participant receives payment under one of these types of stock
incentives, 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 Community Capital will then be entitled to a corresponding
deduction.
A participant will not be taxed upon the grant of a stock award if the
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
currently in effect. 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
Community Capital will then be entitled to a corresponding deduction. However,
if a participant so elects when he or she receives 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 Community Capital also
will be entitled to a corresponding deduction at that time.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Community Capital and Albany Bank may have banking and other business
transactions in the ordinary course of business with directors and officers of
Community Capital and Albany Bank, including members of their families or
corporations, partnerships or other organizations in which these directors and
officers have a controlling interest. If transactions between Community Capital
or Albany Bank and any of their directors or officers 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 Community Capital and Albany Bank, (2) will be on terms no less
favorable than could be obtained from an unrelated third party, and (3) will be
approved by a majority of the directors, including a majority of the directors
who do not have an interest in the transaction.
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DESCRIPTION OF CAPITAL STOCK OF COMMUNITY CAPITAL
COMMON STOCK
Community Capital's Articles of Incorporation authorize Community Capital
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 1998 Stock Incentive 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 Community Capital's voluntary or involuntary liquidation or
dissolution, all shares of common stock will be entitled to share equally in all
of Community Capital's assets that are available for distribution to the
shareholders. We do not anticipate that Community Capital will pay any cash
dividends on the common stock in the near future. 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 right to acquire
authorized but unissued capital stock of Community Capital whenever it issues
new shares of capital stock. No cumulative voting, redemption, sinking fund or
conversion rights or provisions apply to the common stock. All shares of the
common stock issued in the offering as described in this prospectus will be
fully paid and non-assessable.
PREFERRED STOCK
Community Capital's Articles of Incorporation also authorize its Board of
Directors to issue up to 2,000,000 shares of preferred stock, par value not
stated. The Board of Directors may determine the terms of the preferred stock.
Preferred stock may have voting rights, subject to applicable law and
determination by the Board of Directors. Community Capital has not issued any
preferred stock and will not issue preferred stock to the organizers except on
the same terms as it is offered to all other existing shareholders or to new
shareholders. Although Community Capital has no present plans to issue any
preferred stock, the ownership and control of Community Capital by the holders
of the common stock would be diluted if Community Capital 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 Community Capital's Articles of
Incorporation and Bylaws. Community Capital's Articles of Incorporation and
Bylaws contain certain protective provisions that would have the effect of
impeding an attempt to change or remove Community Capital's management or to
gain control of Community Capital in a transaction not supported by its Board of
Directors. These provisions are discussed in more detail below. In general, one
purpose of these provisions is to assist Community Capital's Board of Directors
in playing a role in connection with attempts to acquire control of
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Community Capital. They allow the Board of Directors to further and protect
Community Capital's interests and those of its shareholders as appropriate under
the circumstances, including if the Board of Directors determines that a sale of
control is in the best interests of Community Capital and its shareholders, by
enhancing the Board's ability to maximize the value to be received by the
shareholders upon a sale.
Although Community Capital's management believes the protective provisions
are beneficial to Community Capital's shareholders, they also may tend to
discourage some takeover bids. As a result, Community Capital's shareholders 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, Community Capital may be able to avoid those expenditures of time and
money.
The protective provisions also may discourage open market purchases by a
potential acquirer. These purchases could increase the market price of the
common stock temporarily, enabling shareholders to sell their shares at a price
higher than that which otherwise would prevail. In addition, the provisions
could decrease the market price of the common stock by making the stock less
attractive to persons who invest in securities in anticipation of price
increases from potential acquisition attempts. The provisions also could make it
more difficult and time consuming for a potential acquirer to obtain control of
Community Capital by replacing its Board of Directors and management.
Furthermore, the provisions could make it more difficult for Community Capital's
shareholders to replace the Board of Directors or management, even if a majority
of the shareholders believes that replacing them would be in Community Capital's
best interests. As a result, the protective provisions could tend to keep the
incumbent Board of Directors and management in place.
Community Capital's Articles of Incorporation also contain a provision that
eliminates the potential personal liability of directors for monetary damages in
certain circumstances. In addition, Community Capital's Bylaws contain certain
provisions that provide indemnification for Community Capital's directors,
employees and agents. The protective provisions and the provisions relating to
elimination of liability and indemnification of directors, employees and agents
are discussed more fully below.
PREFERRED STOCK. The existence of preferred stock could impede a takeover
of Community Capital without the approval of its Board of Directors. This is
because the Board of Directors could issue shares of preferred stock to persons
friendly to current management, which could render more difficult or discourage
any attempt to gain control of Community Capital through a proxy contest, tender
offer, merger or otherwise. In addition, the issuance of shares of preferred
stock with voting rights may adversely affect the rights of the holders of
common stock and, in certain circumstances, could decrease the market price of
the common stock.
STAGGERED TERMS FOR BOARD OF DIRECTORS. Article 7 of the Articles of
Incorporation provides that Community Capital's Board of Directors will be
divided into three classes. Directors serve staggered terms, which means that
one-third of the directors will be elected each year at Community Capital'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
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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 Community
Capital's shareholders to replace a majority of its directors.
Under Georgia law, directors are elected annually for a term of one year
unless the articles of incorporation provide otherwise.
CHANGE IN NUMBER OF DIRECTORS. Article 8 of Community Capital's Articles of
Incorporation provides that any change in the number of directors, 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 by
amendment to the Bylaws adopted by the Board of Directors at a meeting at which
a quorum is present, unless the articles of incorporation provide otherwise or
unless the number of directors is otherwise fixed by a majority of the
shareholders. To adopt the amendment, more directors must vote for it than
against it.
REMOVAL OF DIRECTORS. Article 9 of Community Capital's Articles of
Incorporation provides that one or more directors 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 common stock entitled to vote in an
election of directors. Article 9 also provides that directors 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 common stock 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 and entitled to vote at a meeting at which a quorum is present, unless
the articles of incorporation or a bylaw adopted by the shareholders provides
otherwise.
SUPERMAJORITY VOTING ON CERTAIN TRANSACTIONS. Under Article 13 of Community
Capital's Articles of Incorporation, with certain exceptions, any merger or
consolidation involving Community Capital or any sale or other disposition of
all or substantially all of its assets will require the affirmative vote of a
majority of Community Capital's directors then in office and the affirmative
vote of the holders of at least 2/3 of the outstanding shares of common stock.
However, if Community Capital's Board of Directors 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 Community Capital's
Articles of Incorporation provides the factors that the Board of Directors must
consider in evaluating whether an acquisition proposal made by another party is
in the best interests of Community Capital and its shareholders. The term
"acquisition proposal" refers to any offer of another party (1) to make a tender
offer or exchange offer for the common stock or any other equity security of
Community Capital, (2) to merge or consolidate Community Capital with another
corporation, or (3) to purchase or otherwise acquire all or substantially all of
the properties and assets owned by Community Capital.
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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,
such as suppliers of goods and services, of Community Capital and Albany Bank,
(2) the expected social and economic effects on the communities within which
Community Capital and Albany Bank operate, and (3) the payment being offered by
the other corporation in relation (a) to the current value of Community Capital
at the time of the proposal as determined in a freely negotiated transaction and
(b) to the Board of Directors' estimate of Community Capital's future value as
an independent company at the time of the proposal. The Board may also consider
other relevant factors.
This Article is included in Community Capital's Articles of Incorporation
because Albany 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 payment
being offered in relation to the market or book value of the common stock at the
time of the proposal. Georgia law does not specifically list 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 what is being offered to shareholders in exchange for
their stock is the main factor when weighing the benefits of an acquisition
proposal, the Board believes it is appropriate also to consider all other
relevant factors. For example, this Article directs the Board to evaluate what
is being offered in relation to the current value of Community Capital at the
time of the proposal as determined in a freely negotiated transaction and in
relation to the Board's estimate of the future value of Community Capital as an
independent concern at the time of the proposal. 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 payment offered in such a situation, even though it may be exceed
the value at which shares are then 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 that would
reflect not only Community Capital's current value, but also its future value.
One effect of this Article may be to discourage a tender offer in advance.
Often an offeror consults the Board of a target corporation before or after
beginning a tender offer in an attempt to prevent a contest from developing. In
the Board's opinion, this provision will strengthen its position in dealing with
any potential offeror that might attempt to acquire Community Capital 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 Community Capital in costly litigation.
Article 14 of the Articles of Incorporation would not make an acquisition
proposal regarded by the Board as being in Community Capital's best interests
more difficult to accomplish. It would, however, permit the Board to determine
that an acquisition proposal was not in Community Capital's best interests, and
thus to oppose it, on the basis of the various factors that the Board deems
relevant. In some cases, such opposition by the Board might have the effect of
maintaining incumbent management.
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INDEMNIFICATION
Community Capital's Bylaws contain certain indemnification provisions that
provide that directors, officers, employees or agents of Community Capital
(collectively, the "insiders") will be indemnified against expenses that they
actually and reasonably incur if they are successful on the merits of a claim or
proceeding. In addition, the Bylaws provide that Community Capital will advance
to its insiders reasonable expenses of any claim or proceeding so long as the
insider furnishes Community Capital with (1) a written affirmation of his or her
good faith belief that he or she has met the applicable standard of conduct and
(2) a written statement that he or she will repay any advances if it is
ultimately determined that he or she is not entitled to indemnification.
When a case or dispute is settled or otherwise not ultimately determined on
its merits, the indemnification provisions provide that Community Capital 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 Community Capital's best
interests and, in the case of a criminal action or proceeding, if the insider
had no reasonable cause to believe his or her conduct was unlawful. Community
Capital's Board of Directors, its shareholders or independent legal counsel
determines whether the insider has met the applicable standard of conduct in
each specific case.
Community Capital's Bylaws also provide that the indemnification rights
contained in the Bylaws do not exclude 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. Community Capital can also provide
for greater indemnification than is provided for in the Bylaws if it chooses to
do so, subject to approval by its shareholders. Community Capital may not,
however, indemnify an insider for liability arising out of circumstances that
would cause the insider to remain liable for his or her actions as described
under "-- Limitation of Liability" below.
The indemnification provisions of the Bylaws specifically provide that
Community Capital may purchase and maintain insurance on behalf of any director
against any liability asserted against and incurred by him or her in his or her
capacity as a director, whether or not Community Capital would have had the
power to indemnify against such liability.
Community Capital is not aware of any pending or threatened action, suit or
proceeding involving any of its insiders for which indemnification from
Community Capital may be sought.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of
Community Capital under the foregoing provisions, or otherwise, Community
Capital has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities other than the payment by Community Capital of expenses
incurred or paid by a director, officer or controlling person of Community
Capital 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, Community Capital 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
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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 Community Capital's Articles of Incorporation, eliminates,
with certain exceptions, the potential personal liability of a director for
monetary damages to Community Capital and to its shareholders 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 Community Capital, (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
Community Capital or its shareholders to seek injunctive or other equitable
relief not involving monetary damages.
The Georgia Business Corporation Code 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. As a
result, and to encourage qualified individuals to serve and remain as directors,
Community Capital included Article 11 in its Articles of Incorporation. While
Community Capital has not experienced any problems in locating directors, it
could experience difficulty in the future as its business activities increase
and diversify. Community Capital also adopted Article 11 to enhance its ability
to secure liability insurance for its directors at a reasonable cost. Community
Capital 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 Community Capital to obtain such insurance on terms more
favorable than if it were not included in the Articles of Incorporation.
AMENDMENTS
Any amendment of Articles 7, 9, 11, 13 and 14 of Community Capital'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, Community Capital will have 1,000,000
shares of common stock outstanding, or 1,150,000 if the underwriter exercises
its over-allotment option in full. These shares of common stock will be freely
tradable without restriction, except that "affiliates" of Community Capital must
comply with the resale limitations of Rule 144 under the Securities Act of 1933,
as currently in effect. 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, the company. Affiliates of a
company generally include its directors, officers and principal shareholders. A
total of 280,000 shares owned directly or indirectly by affiliates of
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Community Capital will be eligible for public sale under Rule 144, subject to
the contractual and volume restrictions discussed below, beginning 180 days
after the date of this prospectus.
Purchasers of common stock in this offering or on the open market may
resell those shares immediately, although affiliates of Community Capital will
be subject to the volume and other limitations of Rule 144. In general, under
Rule 144, as currently in effect, affiliates will be entitled to sell within any
three-month period a number of shares that 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 his or her sale. Sales under Rule 144
are also subject to certain manner of sale provisions, notice requirements and
the availability of current public information about Community Capital.
Affiliates will not be subject to the volume restrictions and other limitations
under Rule 144 beginning 90 days after their status as an affiliate terminates.
Even though Rule 144 would otherwise permit the sale of shares held by
affiliates beginning 90 days after the date of this prospectus, Community
Capital 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
underwriter's, prior written consent except in limited circumstances.
Community Capital intends to issue warrants to purchase up to a total of
225,000 shares of common stock, representing an amount equal to 22.5% of the
common stock sold in the offering. Community Capital also intends to grant
options to purchase up to a total of 90,000 shares of common stock, representing
an amount equal to 9.0% of the common stock sold in the offering, under its 1998
Stock Incentive Plan. Community Capital intends to register the shares issuable
upon exercise of warrants and options granted under the plan. Upon registration,
these shares will be eligible for resale in the public market without
restriction by persons who are not affiliates of Community Capital, and to the
extent they are held by affiliates, under Rule 144 without a holding period.
Prior to the offering, there has been no public market for the common
stock, and we cannot predict 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 our ability to
raise equity capital in the future.
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UNDERWRITING
Subject to the terms and conditions of the underwriting agreement among
Community Capital and the underwriter named below, the underwriter has agreed to
purchase from Community Capital, and Community Capital has agreed to sell to the
underwriter, the number of shares of common stock listed 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 underwriter's obligations 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 required 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 that will apply to shares not purchased by
Community Capital's directors and executive officers in this offering will equal
7.5% of the public offering price listed on the cover page of this prospectus,
or $.75 per share. The underwriting discount that will apply to shares purchased
in this offering by Community Capital's directors and executive officers will
equal 3.5% of the public offering price, or $.35 per share.
The underwriter proposes to offer the common stock directly to the public
at the public offering price listed on the cover page of this prospectus and to
certain securities dealers at that price less a concession not in excess of $.45
per share. The underwriter may allow, and the selected dealers may reallow, a
concession not in excess of $.10 per share to certain other brokers and dealers.
We expect that the shares of common stock will be ready for delivery on or about
, 1999. After the offering, the offering price and other selling terms
may change.
The public offering price was determined by negotiations between Community
Capital and the underwriter based on several factors. These factors include
prevailing market conditions, the price to earnings and price to book value
multiples of comparable publicly traded companies and Albany Bank's growth
potential and cash flow and earnings prospects.
Community Capital 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 listed on the cover page of this prospectus, less the 7.5% underwriting
discount. The underwriter may purchase these 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.
Community Capital 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 that can be converted into or exchanged for
shares of common stock for a period of 180 days from the date of this prospectus
without the underwriter's prior written consent, except in limited
circumstances. The underwriter may on occasion be a customer
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of, engage in transactions with, and perform services for Community Capital or
Albany Bank in the ordinary course of business.
Community Capital has agreed to indemnify the underwriter against certain
liabilities, including liabilities under the Securities Act of 1933, as
currently in effect, or to contribute to payments that the underwriter may be
required to make in connection with these liabilities.
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 underwriter's sale of a greater number of shares of common stock than it is
required to purchase from Community Capital 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. The underwriter may effect these transactions on the Nasdaq OTC
Bulletin Board or otherwise and may discontinue them at any time.
SUPERVISION AND REGULATION
The following discussion describes the material elements of the regulatory
framework that applies to banks and bank holding companies and provides certain
specific information related to Community Capital.
GENERAL
Community Capital will be a bank holding company registered with the Board
of Governors of the Federal Reserve System under the Bank Holding Company Act of
1956, as currently in effect. As a result, Community Capital and any future
non-bank subsidiaries will be subject to the supervision, examination, and
reporting requirements of the Bank Holding Company Act and the regulations of
the Federal Reserve.
The Bank Holding Company Act requires every bank holding company to obtain
the Federal Reserve's prior approval before: (1) it may acquire direct or
indirect ownership or control of any voting shares of any bank if, after the
acquisition, the bank holding company will directly or indirectly own or control
more than 5% of the bank's voting shares; (2) it or any of its non-bank
subsidiaries 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 Bank Holding Company Act further provides that the Federal Reserve may
not approve any transaction that would result in or tend to create a monopoly
or, substantially lessen competition or otherwise function as 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. The Federal Reserve's consideration of financial resources generally
focuses on capital adequacy, which is discussed below.
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<PAGE> 60
Community Capital and any other bank holding company located in Georgia may
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 each case, certain deposit-percentage, aging requirements
and other restrictions will apply. National and state-chartered banks may branch
across state lines by acquiring banks in other states. By adopting legislation
prior to June 1, 1997, a state could elect either to "opt in" and accelerate the
date after which interstate branching would be permissible or "opt out" and
prohibit interstate branching altogether. The Georgia Interstate Banking Act
provides that interstate acquisitions by or of institutions located in Georgia
are permitted in states that also 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 new start-up branches throughout
Georgia, which removes a barrier to competition.
The Bank Holding Company Act generally prohibits Community Capital from
engaging in activities other than banking or managing or controlling banks or
other permissible subsidiaries and from acquiring or keeping direct or indirect
control of any company engaged in any activities other than those activities
that the Federal Reserve determines 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, the Federal Reserve has determined that 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 are permissible activities
of bank holding companies. The Bank Holding Company Act does not place
territorial limitations on permissible non-banking activities of bank holding
companies. Despite prior approval, the Federal Reserve may 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 the holding company's continued ownership, activity or control constitutes
a serious risk to the financial safety, soundness, or stability of any of its
bank subsidiaries.
Albany Bank's deposits will be insured by the FDIC to the maximum extent
provided by law. Albany 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 will regularly examine Albany
Bank's operations and has the authority to approve or disapprove mergers, the
establishment of branches and similar corporate actions. The Office of the
Comptroller of the Currency also has the power to prevent the continuance or
development of unsafe or unsound banking practices or other violations of law.
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<PAGE> 61
PAYMENT OF DIVIDENDS
Community Capital is a legal entity separate and distinct from Albany Bank.
The principal sources of Community Capital's cash flow, including cash flow to
pay dividends to its shareholders, are dividends that Albany Bank pays to its
sole shareholder, Community Capital. Statutory and regulatory limitations apply
to Albany Bank's payment of dividends to Community Capital as well as to
Community Capital's payment of dividends to its shareholders.
If, in the opinion of the Office of the Comptroller of the Currency, Albany
Bank were engaged in or about to engage in an unsafe or unsound practice, the
Office of the Comptroller of the Currency could require, after notice and a
hearing, Albany Bank to cease and desist from the 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, a depository institution may not pay any dividend if payment would
cause it to become undercapitalized or if it already is undercapitalized.
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. See "-- Prompt Corrective Action."
The payment of dividends by Community Capital and Albany Bank may also be
affected by other factors, such as the requirement to maintain adequate capital
above regulatory guidelines.
CAPITAL ADEQUACY
Community Capital and Albany Bank will be required to comply with the
capital adequacy standards established by the Federal Reserve in the case of
Community Capital and the Office of the Comptroller of the Currency in the case
Albany Bank. The Federal Reserve has established two basic measures of capital
adequacy for bank holding companies -- a risk-based measure and a leverage
measure. A bank holding company must satisfy all applicable capital standards to
be considered in compliance.
The risk-based capital standards are designed to make regulatory capital
requirements more sensitive to differences in risk profiles 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,
such as letters of credit and unfunded loan commitments, 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 of total capital to risk-weighted
assets 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 of Tier 1 Capital to average assets, less goodwill and certain other
intangible assets, of 3% for bank
60
<PAGE> 62
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 Community
Capital, or making acquisitions will be 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 bank holding company's Tier 1 Capital leverage ratio,
after deducting all intangibles, and other indicators of capital strength in
evaluating proposals for expansion or new activities.
Albany Bank will be subject to risk-based and leverage capital requirements
adopted by the Office of the Comptroller of the Currency, 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, Community Capital is expected to act as a
source of financial strength for, and to commit resources to support, Albany
Bank. This support may be required at times when, without this Federal Reserve
policy, Community Capital might not be inclined to provide it. In addition, any
capital loans by a bank holding company to Albany Bank will be repaid only after
its deposits and certain other indebtedness are repaid in full. 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
The Federal Deposit Insurance Corporation Improvement Act of 1991
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), 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 the
action will depend upon the capital category in which the institution is placed.
Generally, subject to a narrow exception, the banking regulator must 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.
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. A
bank holding company must guarantee that a
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<PAGE> 63
subsidiary depository institution meets its capital restoration plan, subject to
certain limitations. The controlling holding company's obligation 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 under an accepted
capital restoration plan or with FDIC approval. In addition, the appropriate
federal banking agency may test an undercapitalized institution in the same
manner as it treats a significantly undercapitalized institution if it
determines that those actions are necessary.
FDIC INSURANCE ASSESSMENTS
The FDIC has 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. The FDIC also assigns an
institution 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 that the institution's primary federal regulator provides
to the FDIC and information that the FDIC determines to be relevant to the
institution's financial condition and the risk posed to the deposit insurance
funds. The FDIC then determines an institution's insurance assessment rate based
on the institution's capital category and supervisory category. Under the
risk-based assessment system, there are nine combinations of capital groups and
supervisory subgroups to which different assessment rates are applied.
Assessments range from 0 to 27 cents per $100 of deposits, depending on the
institution's capital group and supervisory subgroup.
In addition, effective January 1, 1997, the FDIC imposed assessments to
help pay off the $780 million in annual interest payments on the $8 billion
Financing Corporation bonds issued in the late 1980s as part of the government
rescue of the thrift industry. The FDIC will assess banks at a rate of 1.3 cents
per $100 deposits until December 31, 1999. Thereafter, it will add approximately
2.4 cents per $100 of deposits to each assessment.
The FDIC may terminate its insurance of deposits if it finds 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.
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. We cannot be predict
whether or in what form any proposed regulation or statute will be adopted or
the extent to which our business may be affected by any new regulation or
statute.
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<PAGE> 64
LEGAL MATTERS
Powell, Goldstein, Frazer & Murphy LLP, Atlanta, Georgia will pass upon the
validity of the shares of common stock offered by this prospectus for Community
Capital. 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 by this prospectus.
EXPERTS
Community Capital's audited financial statements at December 31, 1998, and
for the period from August 19, 1998 through December 31, 1998, included in this
prospectus have been 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 that
registers the shares of common stock offered by this prospectus with the
Securities and Exchange Commission, Community Capital will be subject to the
reporting requirements of the Securities Exchange Act of 1934, as currently in
effect, which include requirements to file annual reports on Form 10-KSB and
quarterly reports on Form 10-QSB with the Securities and Exchange Commission.
This reporting obligation will exist for at least one year and will continue for
successive fiscal years, except that these reporting obligations may be
suspended for any subsequent fiscal year if at the beginning of such year the
common stock is held of record by less than 300 persons.
At any time that Community Capital is not a reporting company, it 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. Community Capital's fiscal year ends on December 31. Additionally,
Community Capital will also furnish such other reports as it may determine to be
appropriate or as otherwise may be required by law.
ADDITIONAL INFORMATION
Community Capital has filed with the Securities and Exchange Commission a
Registration Statement on Form SB-2 under the Securities Act of 1933, as
currently in effect, with respect to the shares of common stock offered by this
prospectus. This prospectus does not contain all of the information contained in
the Registration Statement. For further information with respect to Community
Capital and the common stock, we refer you 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 Securities and Exchange Commission
at Room 1024, 450 Fifth Street, N.W., Judiciary Plaza, Washington, D.C. 20549
and at the regional offices of the Securities and Exchange 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 are available at prescribed rates from the
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<PAGE> 65
Public Reference Section of the Securities and Exchange Commission, Room 1024,
450 Fifth Street, N.W., Judiciary Plaza, Washington, DC 20549. The Securities
and Exchange 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 Community Capital, that file
electronically with the Securities and Exchange Commission.
Community Capital and the organizers have filed or will file various
applications with the FDIC, the Federal Reserve, the Georgia Department of
Banking and Finance and the Office of the Comptroller of the Currency. These
applications and the information they contain are not incorporated into this
prospectus. You should rely only on information contained in this prospectus and
in the related Registration Statement in making an investment decision. To the
extent that other available information not presented in this prospectus,
including information available from Community Capital and information in public
files and records maintained by the FDIC, the Federal Reserve, the Georgia
Department of Banking and Finance and the Office of the Comptroller of the
Currency, is inconsistent with information presented in this prospectus or
provides additional information, that 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 they can make no assurances
Community Capital specifically disaffirms those projections for purposes of this
prospectus and cautions you against relying on them for purposes of making an
investment decision.
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<PAGE> 66
INDEX TO FINANCIAL STATEMENTS
<TABLE>
<S> <C>
Independent Auditor's Report................................ F-2
Balance Sheet December 31, 1998............................. F-3
Statement of Loss and Accumulated Deficit Period from August
19, 1998, Date of Inception, to December 31, 1998......... F-4
Statement of Stockholders' Deficit Period from August 19,
1998, Date of Inception, to December 31, 1998............. F-5
Statement of Cash Flows Period from August 19, 1998, Date of
Inception, to December 31, 1998........................... F-6
Notes to Financial Statements............................... F-7
</TABLE>
F-1
<PAGE> 67
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 December 31, 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 December
31, 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 December 31, 1998, and the results of its operations and
its cash flows for the period from August 19, 1998, date of inception, to
December 31, 1998, in conformity with generally accepted accounting principles.
/s/ MAULDIN & JENKINS, LLC
Albany, Georgia
January 27, 1999
F-2
<PAGE> 68
COMMUNITY CAPITAL BANCSHARES, INC.
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEET
DECEMBER 31, 1998
<TABLE>
<S> <C>
ASSETS
- ------------------------------------------------------------
Cash in banks............................................... $ 5,220
Property (Note 2)........................................... 360,133
Deferred stock offering costs (Note 1)...................... 63,102
--------
$428,455
========
LIABILITIES AND STOCKHOLDERS' DEFICIT
- ------------------------------------------------------------
LIABILITIES
Due to Organizers (Note 3).................................. $ 80,000
Note payable to bank (Note 4)............................... 485,000
Note payable to finance company (Note 5).................... 25,801
Deferred compensation....................................... 20,833
Other liabilities........................................... 13,354
--------
Total liabilities...................................... 624,988
--------
COMMITMENTS (Notes 2 and 6)
STOCKHOLDERS' 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.................................. 3,514
Deficit accumulated during the development stage............ (200,048)
--------
Total stockholders' deficit............................ (196,533)
--------
$428,455
========
</TABLE>
See Notes to Financial Statements.
F-3
<PAGE> 69
COMMUNITY CAPITAL BANCSHARES, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF LOSS AND ACCUMULATED DEFICIT
PERIOD FROM AUGUST 19, 1998, DATE OF INCEPTION,
TO DECEMBER 31, 1998
<TABLE>
<S> <C>
INCOME...................................................... $ --
--------
EXPENSES:
Management salaries......................................... 65,122
Organization costs.......................................... 104,232
Preopening expenses......................................... 14,158
Interest.................................................... 7,898
Training and seminars....................................... 5,858
Automobile.................................................. 1,109
Postage and telephone....................................... 1,671
--------
200,048
--------
NET LOSS FOR THE PERIOD AND ACCUMULATED DEFICIT............. $200,048
========
</TABLE>
See Notes to Financial Statements.
F-4
<PAGE> 70
COMMUNITY CAPITAL BANCSHARES, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF STOCKHOLDERS' DEFICIT
PERIOD FROM AUGUST 19, 1998, DATE OF INCEPTION,
TO DECEMBER 31, 1998
<TABLE>
<CAPTION>
DEFICIT
ACCUMULATED
COMMON STOCK ADDITIONAL DURING THE TOTAL
-------------------- PAID-IN DEVELOPMENT STOCKHOLDERS'
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........ -- -- 3,514 -- 3,514
Net loss for the period
August 19, 1998, date of
inception, to December 31,
1998...................... -- -- -- (200,048) (200,048)
-------- -------- -------- --------- ---------
Balance, December 31,
1998...................... 1 $ 1 $ 3,514 $(200,048) $(196,533)
======== ======== ======== ========= =========
</TABLE>
See Notes to Financial Statements.
F-5
<PAGE> 71
COMMUNITY CAPITAL BANCSHARES, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF CASH FLOWS
PERIOD FROM AUGUST 19, 1998, DATE OF INCEPTION,
TO DECEMBER 31, 1998
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss.................................................... $(200,048)
Adjustments to reconcile net loss to net cash used in
operating activities:
Imputed interest on advances from Organizers.............. 3,514
Deferred compensation..................................... 20,833
Increase in accrued liabilities........................... 13,354
---------
Net cash used in operating activities.................. (162,347)
---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property........................................ (331,199)
---------
Net cash used in investing activities.................. (331,199)
---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from advances by Organizers........................ 80,000
Proceeds from advances under line of credit................. 485,000
Payment on installment loan................................. (3,133)
Proceeds from issuance of common stock...................... 1
Stock offering costs........................................ (63,102)
---------
Net cash provided by financing activities.............. 498,766
---------
Net increase in cash................................... 5,220
Cash at beginning of period................................. --
---------
Cash at end of period....................................... $ 5,220
=========
NONCASH TRANSACTION:
Note to finance company incurred for purchase of
automobile................................................ $ 28,934
=========
</TABLE>
See Notes to Financial Statements.
F-6
<PAGE> 72
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 December 31, 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 preopening period.
Fiscal Year
The Company will adopt a calendar year for both financial reporting and tax
reporting purposes.
F-7
<PAGE> 73
COMMUNITY CAPITAL BANCSHARES, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
NOTE 2. PROPERTY
The Company purchased a proposed site for the location of the Bank for
$317,734. 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, purchase of furniture, fixtures and
equipment will be approximately $1,865,000. At December 31, 1998, property
includes:
<TABLE>
<S> <C>
Land site for proposed bank building........................ $317,734
Other land costs............................................ 3,765
Temporary building.......................................... 5,000
Automobile.................................................. 28,934
Software.................................................... 4,700
--------
$360,133
========
</TABLE>
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 7.75%), 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 7.75% at December 31, 1998. As of December 31, 1998, the principal
balance under this line of credit amounted to $485,000.
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.
F-8
<PAGE> 74
COMMUNITY CAPITAL BANCSHARES, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
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 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 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
F-9
<PAGE> 75
COMMUNITY CAPITAL BANCSHARES, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
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 believes that any information systems purchased including
hardware and software 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 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 has filed a Registration Statement on Form SB-2 with the
Securities and Exchange Commission offering for sale up to 1,150,000 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 280,000 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
a warrant to purchase one share of common stock for each share the Organizer
purchases in the Offering, up to a limit of 15,000 shares per warrant for any
one Organizer. The Organizers may purchase up to 225,000 shares through the
exercise of these warrants. 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.
NOTE 9. SUBSEQUENT EVENT
On January 6, 1999, the Company entered into a lease agreement for the
lease of a modular bank unit for a lease price of $3,650 a month for twelve
months. The aggregate lease price amounts to $43,800 to be paid in two payments
of $21,900. At the expiration of the original term, the Company has the option
to renew the lease on a month basis under the same terms by giving written
notice of the election to the lessor not later than sixty days prior to the
expiration of the original term. Under terms of the lease, the Company must pay
all taxes and charges levied against the leased property and maintain insurance
on the property.
F-10
<PAGE> 76
- ------------------------------------------------------
- ------------------------------------------------------
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............................. 3
Risk Factors........................ 7
Cautionary Statement About Forward-
Looking Statements................ 14
Use of Proceeds..................... 15
Capitalization...................... 17
Dividends........................... 18
Management's Discussion and Analysis
of Financial Condition and Plan of
Operations........................ 19
Proposed Business of Community
Capital and Albany Bank........... 22
Management.......................... 37
Executive Compensation.............. 44
Certain Relationships and Related
Transactions...................... 49
Description of Capital Stock of
Community Capital................. 50
Certain Provisions of the Articles
of Incorporation and Bylaws....... 50
Shares Eligible for Future Sale..... 55
Underwriting........................ 57
Supervision and Regulation.......... 58
Legal Matters....................... 63
Experts............................. 63
Reports to Shareholders............. 63
Additional Information.............. 63
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> 77
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....................................................... 1,650
Blue Sky Fees and Expenses.................................. 15,000
Legal Fees and Expenses..................................... 100,000
Accounting Fees and Expenses................................ 6,000
Printing and Engraving Expenses............................. 49,000
Miscellaneous............................................... 153
--------
Total............................................. $175,000
========
</TABLE>
II-1
<PAGE> 78
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 Underwriting Agreement
3.1 Articles of Incorporation*
3.2 Bylaws* and Amendment No. 1 thereto to be adopted on
February 15, 1999
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 January 6, 1999
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* and
the Form of Amendment thereto
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* and the Form of Second Amendment thereto
10.5 Form of Community Capital Bancshares, Inc. Organizers'
Warrant Agreement
10.6 Community Capital Bancshares, Inc. 1998 Stock Incentive
Plan* and the Form of First Amendment thereto
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*
27.1 Financial Data Schedule (for SEC use only)
</TABLE>
- -------------------------
* Previously filed.
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.
II-2
<PAGE> 79
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 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> 80
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 February 2, 1999.
COMMUNITY CAPITAL BANCSHARES, INC.
By: /s/ ROBERT E. LEE
----------------------------------------
Robert E. Lee
President
POWER OF ATTORNEY
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>
* Chairman and February 2, 1999
- ------------------------------------------ Chief Executive Officer
Charles M. Jones, III
* Director February 2, 1999
- ------------------------------------------
Van Cise Knowles
/s/ ROBERT E. LEE President and Director February 2, 1999
- ------------------------------------------ (principal executive,
Robert E. Lee financial and accounting
officer)
* Director February 2, 1999
- ------------------------------------------
Corinne C. Martin
* Director February 2, 1999
- ------------------------------------------
William F. McAfee
* Director February 2, 1999
- ------------------------------------------
C. Richard Langley
* Director February 2, 1999
- ------------------------------------------
Bennett D. Cotten, Jr.
* Director February 2, 1999
- ------------------------------------------
Jane Anne D. Sullivan
</TABLE>
II-4
<PAGE> 81
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <S> <C>
* Director February 2, 1999
- ------------------------------------------
John P. Ventulett, Jr.
* Director February 2, 1999
- ------------------------------------------
James D. Woods
* Director February 2, 1999
- ------------------------------------------
Robert M. Beauchamp
* Director February 2, 1999
- ------------------------------------------
Glenn A. Dowling
* Secretary and Director February 2, 1999
- ------------------------------------------
Mary Helen Dykes
* Director February 2, 1999
- ------------------------------------------
Mark M. Shoemaker
* Director February 2, 1999
- ------------------------------------------
Lawrence B. Willson
*By: /s/ ROBERT E. LEE
------------------------------------
Robert E. Lee
Attorney-In-Fact
</TABLE>
II-5
<PAGE> 82
INDEX TO EXHIBITS
<TABLE>
<C> <S>
1.1 Underwriting Agreement
3.1 Articles of Incorporation*
3.2 Bylaws* and Amendment No. 1 thereto to be adopted on
February 15, 1999
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 January 6, 1999
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* and
the Form of Amendment thereto
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* and the Form of Second Amendment thereto
10.5 Form of Community Capital Bancshares, Inc. Organizers'
Warrant Agreement
10.6 Community Capital Bancshares, Inc. 1998 Stock Incentive
Plan* and the Form of First Amendment thereto
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*
27.1 Financial Data Schedule (for SEC use only)
</TABLE>
- -------------------------
* Previously filed.
<PAGE> 1
EXHIBIT 1.1
COMMUNITY CAPITAL BANCSHARES, INC.
COMMON STOCK
UNDERWRITING AGREEMENT
________________, 1999
INTERSTATE/JOHNSON LANE CORPORATION
As representative of the several
Underwriters named in Schedule I hereto,
c/o Interstate/Johnson Lane Corporation
IJL Financial Center
201 North Tryon Street
Charlotte, North Carolina 28202
Dear Sirs:
Community Capital Bancshares, Inc., a Georgia corporation (the
"Company") and proposed holding company for Albany Bank & Trust N.A. (In
Organization) (the "Bank"), proposes, subject to the terms and conditions stated
herein, to issue and sell to the underwriters named in Schedule I hereto (the
"Underwriters") an aggregate of 1,000,000 shares of common stock, par value
$1.00 per share (the "Common Stock"), of the Company (the "Firm Shares"), and,
at the election of the Underwriters, subject to the terms and conditions stated
herein, to sell to the Underwriters up to 150,000 additional shares of Common
Stock (the "Optional Shares") solely to cover overallotments, if any (the Firm
Shares and the Optional Shares that the Underwriters elect to purchase pursuant
to Section 2 hereof are collectively called the "Shares").
1. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company
represents and warrants to, and agrees with each of the Underwriters that:
(a) A registration statement on Form SB-2 (File No.
333-68307) with respect to the Shares, has been filed by the Company
with the Securities and Exchange Commission (the "Commission") under
the Securities Act of 1933, as amended (the "Securities Act"). Copies
of the registration statement and any amendments thereto, including any
post-effective amendments, have heretofore been delivered by the
Company to you, and have been declared effective by the Commission in
such form (other than a registration statement increasing the size of
the offering filed pursuant to Rule 462(b)
<PAGE> 2
under the Securities Act which became effective upon filing (the "Rule
462(b) Registration Statement")). No other document with respect to the
registration statement, any post effective amendment thereto or the
Rule 462(b) Registration Statement has heretofore been filed with the
Commission; and no stop order suspending the effectiveness of the
registration statement has been issued and no proceeding for that
purpose has been instituted or threatened by the Commission. Any
preliminary prospectus included in the registration statement or filed
with the Commission pursuant to Rule 424 of the Rules and Regulations
of the Commission under the Securities Act (the "Rules and
Regulations"), is hereinafter called a "Preliminary Prospectus." The
various parts of such registration statement and the Rule 462(b)
Registration Statement, including the prospectus, Part II, all
financial schedules and exhibits thereto, and including the information
contained in the form of final prospectus filed with the Commission
pursuant to Rule 424(b) under the Securities Act, and deemed by virtue
of Rule 430(A) under the Securities Act to be part of the registration
statement at the time it was declared effective, as amended at the time
such part became effective, being herein called collectively the
"Registration Statement," and the final prospectus, in the form first
filed pursuant to Rule 424(b), being hereinafter called the
"Prospectus."
(b) No order preventing or suspending the use of any
Prospectus, including any Preliminary Prospectus, has been issued and
no proceeding for that purpose has been instituted or threatened by the
Commission or the securities authority of any state or other
jurisdiction. No stop order suspending the effectiveness of the
Registration Statement or any part thereof has been issued and no
proceeding for that purpose has been instituted or threatened or, to
the best knowledge of the Company, contemplated by the Commission or
the securities authority of any state or other jurisdiction.
(c) Each Prospectus filed as part of the Registration
Statement as originally filed or as part of any amendment thereto
complied when so filed in all material respects with the requirements
applicable to it under the Securities Act and the Rules and Regulations
and none of such documents contained an untrue statement of a material
fact or omitted to state a material fact required to be stated therein
or necessary to make the statements therein not misleading; and any
further amendment or supplement thereto, when such documents become
effective or are filed with the Commission, as the case may be, will
conform in all material respects to the requirements of the Securities
Act, and the Rules and Regulations and will not contain an untrue
statement of material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein not
misleading; provided, however, that this representation and warranty
shall not apply to any statements or omissions made in reliance upon
and in conformity with information furnished in writing to the Company
by an Underwriter through Interstate/Johnson Lane Corporation expressly
for use therein. When the Registration Statement or any amendment
thereto was declared effective, and at each Time of Delivery (as
hereinafter defined), it (i) contained all statements required to be
stated therein in accordance with, and complied or will comply in all
material respects with the requirements of the Securities Act and the
Rules and Regulations and (ii) did not include any untrue statement of
a material fact or omit to state any material fact necessary to make
2
<PAGE> 3
the statements therein not misleading. When the Prospectus or any
amendment or supplement thereto is filed with the Commission pursuant
to Rule 424(b) (or, if the Prospectus or such amendment or supplement
is not required to be so filed, when the Registration Statement or the
amendment thereto containing such amendment or supplement to the
Prospectus was or is declared effective) and at each Time of Delivery,
the Prospectus, as amended or supplemented at any such time (i)
contained or will contain all statements required to be stated therein
in accordance with, and complied or will comply in all material
respects with the requirements of, the Securities Act and the Rules and
Regulations and (ii) did not or will not include any untrue statement
of a material fact or omit to state any material fact necessary in
order to make the statements therein, in light of the circumstances
under which they were made, not misleading. The foregoing provisions of
this paragraph (c) do not apply to statements or omissions made in any
Preliminary Prospectus, the Registration Statement or any amendment
thereto or the Prospectus or any amendment or supplement thereto in
reliance upon and in conformity with written information furnished to
the Company by any Underwriter.
(d) The descriptions in the Registration Statement and
the Prospectus of statutes, rules, regulations, legal and governmental
proceedings or contracts and other documents that are required to be so
described are accurate and fairly present the information required to
be shown; and there are no statutes, rules, regulations or legal or
governmental proceedings required to be described in the Registration
Statement or the Prospectus that are not described as required and no
contracts or documents of a character that are required to be described
in the Registration Statement or the Prospectus or to be filed as
exhibits to the Registration Statement that are not described and filed
as required.
(e) The Company has been duly incorporated, is validly
existing as a corporation under the laws of the State of Georgia and
has full power and authority to own or lease its properties and conduct
its business as described in the Prospectus. The Bank is a national
banking association in organization under the laws of the United States
of America and, upon the issuance of a charter by the Office of the
Comptroller of the Currency ("OCC"), will have full power and authority
to own or lease its properties and conduct its business as described in
the Prospectus. The Company has full power and authority to enter into
this Agreement and to perform its obligations hereunder. Each of the
Company is, and the Bank upon the issuance of a charter by the OCC will
be, duly qualified to transact business as a foreign corporation and
is, and the Bank will be, in good standing under the laws of each other
jurisdiction in which it owns or leases properties, or conducts any
business, so as to require such qualification, except where the failure
to so qualify would not have a material adverse effect on the financial
position, general affairs, management, business or prospects of the
Company and the Bank.
(f) The capitalization of the Company is as disclosed
under the caption "Capitalization" in the Prospectus. All of the issued
shares of capital stock of the Company have been duly authorized and
validly issued, are fully paid and nonassessable and conform to the
description of the capital stock under the caption "Description of
3
<PAGE> 4
Capital Stock of the Company" contained in the Prospectus. None of the
issued shares of capital stock of the Company has been issued or is
owned or held in violation of any preemptive or similar rights, and no
person or entity (including any holder of outstanding shares of capital
stock of the Company or its subsidiary) has any preemptive or other
rights to subscribe for any of the Shares. None of the shares of
capital stock of the Bank has been issued.
(g) Upon the issuance of a charter by the OCC, all of the
issued shares of capital stock of the Bank will be duly authorized and
validly issued, fully paid, and, except as may be applicable under the
National Bank Act, nonassessable and will be owned beneficially by the
Company free and clear of all liens, security interests, pledges,
charges, encumbrances, defects, shareholders' agreements, voting
trusts, equities or claims of any nature whatsoever. The Company and
the Bank have obtained or have filed for all material licenses,
consents and approvals, and have satisfied or have taken all action
required at this time to satisfy all material eligibility and other
similar requirements imposed by federal and state regulatory bodies,
administrative agencies or other governmental bodies, agencies or
officials, in each case applicable to the conduct of the business in
which they are engaged or are contemplated to be engaged as described
in the Registration Statement. With respect to any material licenses,
consents and approvals, and any material eligibility and other similar
requirements that the Company or the Bank does not have at this time,
(i) all applications therefor are complete, accurate, and have been
filed with the appropriate regulatory authorities, and (ii) the Company
knows of no reason why the same will not be received or satisfied prior
to the time the same are required. Other than the Bank, the Company
does not own, directly or indirectly, any capital stock or other equity
securities of any corporation or any ownership interest in any
partnership, joint venture or other association.
(h) Except as disclosed in the Prospectus, there are no
outstanding (i) securities or obligations of the Company or the Bank
convertible into or exchangeable for any capital stock of the Company
or the Bank, (ii) warrants, rights or options to subscribe for or
purchase from the Company or the Bank any such capital stock or any
such convertible or exchangeable securities or obligations, or (iii)
obligations of the Company or the Bank to issue any shares of capital
stock, any such convertible or exchangeable securities or obligations,
or any such warrants, rights or options.
(i) Since the date as of which information is given in
the Prospectus, neither the Company nor the Bank has sustained any
material loss or interference with its business from fire, explosion,
flood or other calamity, whether or not covered by insurance, or from
any labor dispute or court or governmental action, order or decree,
otherwise than as disclosed in or contemplated by the Prospectus.
(j) Since the date as of which information is given in
the Prospectus, (i) neither the Company nor the Bank has incurred any
liabilities or obligations, direct or contingent, or entered into any
transactions, not in the ordinary course of business, that are material
to the Company and the Bank, (ii) the Company has not purchased any of
its outstanding
4
<PAGE> 5
capital stock or declared, paid or otherwise made any dividend or
distribution of any kind on its capital stock, (iii) there has not been
any change in the capital stock, long-term debt or short-term debt of
the Company or the Bank (except with respect to such changes in the
balance due under the Company's line of credit with The Bankers Bank),
and (iv) there has not been any material adverse change, or any
development involving a prospective material adverse change, in or
affecting the financial position, general affairs, management, business
or prospects of the Company and the Bank, in each case other than as
disclosed in or contemplated by the Prospectus.
(k) The consolidated financial statements of the Company,
together with related notes and schedules as set forth in the
Registration Statement, conform to the requirements of the Securities
Act and the Rules and Regulations. Such financial statements fairly
present the consolidated financial position of the Company at the
respective dates indicated in accordance with generally accepted
accounting principles applied on a consistent basis for the periods
indicated. The Company and the Bank have no material contingent
obligations which are not disclosed in the Company's financial
statements which are included in the Registration Statement. Mauldin &
Jenkins, LLC, whose report is included in the Registration Statement,
are independent accountants as required by the Securities Act and the
Rules and Regulations.
(l) The Shares to be sold by the Company hereunder have
been duly authorized and, when issued and delivered against payment
therefor as provided therein, will be validly issued and fully paid and
nonassessable and will conform to the description of the Common Stock
contained in the Prospectus; and all corporate action required to be
taken for the authorization, issuance and sale of such Shares has been
validly taken. The Underwriters will receive good and marketable title
to the Shares to be issued and delivered hereunder, free and clear of
all liens, encumbrances, claims, security interests, restrictions,
shareholders' agreements and voting trusts whatsoever. The certificates
evidencing the Shares will be in due and proper form and will comply
with all applicable legal requirements.
(m) There are no contracts, agreements or understandings
between the Company and any person granting such person the right to
require the Company to file a registration statement under the
Securities Act with respect to any securities of the Company owned or
to be owned by such person or to require the Company to include such
securities in the securities registered pursuant to the Registration
Statement (or any such right has been effectively waived) or any
securities being registered pursuant to any other registration
statement filed by the Company under the Securities Act.
(n) Neither the Company nor the Bank is, or (with or
without the giving of notice or passage of time or both) would be: (i)
in violation of its Articles of Incorporation or Bylaws or other
governing instruments; or (ii) in default under any indenture,
mortgage, deed of trust, loan agreement, lease or other agreement or
instrument to which the Company or the Bank is a party or to which any
of their respective properties or assets
5
<PAGE> 6
are subject, except, in the case of clause (ii) above, where such
default would not have a material adverse effect on either the Company
or the Bank.
(o) The issue and sale of the Shares and the performance
of this Agreement and the consummation of the transactions herein
contemplated will not conflict with, or (with or without the giving of
notice or the passage of time or both) result in a breach or violation
of any of the terms or provisions of, or constitute a default under,
any indenture, mortgage, deed of trust, loan agreement, lease or other
agreement or instrument to which the Company or the Bank is a party or
to which any of their respective properties or assets is subject, nor
will such action conflict with or violate any provision of the Articles
of Incorporation or Bylaws or other governing instruments of the
Company or the Bank, or any statute, rule or regulation or any order,
judgment or decree of any court or governmental agency or body having
jurisdiction over the Company or the Bank or any of their respective
properties or assets.
(p) The Company and the Bank have good and marketable
title in fee simple to all real property, if any, and good title to all
personal property owned by them, in each case free and clear of all
liens, security interests, pledges, charges, encumbrances, mortgages
and defects, except such as are disclosed in the Prospectus or such as
do not materially and adversely interfere with the operations of the
Company and the Bank; and any real property and buildings held under
lease by the Company or the Bank are held under valid, subsisting and
enforceable leases, with such exceptions as are disclosed in the
Prospectus or are not material and do not interfere with the operations
of the Company or the Bank.
(q) No consent, approval, authorization, order or
declaration of or from, or registration, qualification or filing with,
any court or governmental agency or body or third party is required for
the issue and sale of the Shares or the consummation of the
transactions contemplated by this Agreement, except the registration of
the Shares under the Securities Act and such as may be required by the
National Association of Securities Dealers, Inc. (the "NASD") and under
state securities or blue sky laws in connection with the offer, sale
and distribution of the Shares by the Underwriters.
(r) Other than as disclosed in the Prospectus, there is
no litigation, arbitration, claim, proceeding (formal or informal) or
investigation pending or, to the knowledge of any director or executive
officer of the Company, threatened (or any reasonable basis therefor)
in which the Company or the Bank is a party or of which any of their
respective properties or assets are the subject which, if determined
adversely to the Company or the Bank, would individually or in the
aggregate have a material adverse effect on the financial position,
general affairs, management, business or prospects of the Company and
the Bank.
(s) This Agreement has been duly authorized, executed and
delivered by the Company and constitutes the valid and binding
agreement of the Company enforceable against the Company in accordance
with its terms subject, as to enforcement, to applicable
6
<PAGE> 7
bankruptcy, insolvency, reorganization and moratorium laws and other
laws relating to or affecting the enforcement of creditors' rights
generally and to general equitable principles, and except as the
enforceability of rights to indemnity and contribution under this
Agreement may be limited under applicable securities laws or the public
policy underlying such laws.
(t) Neither the Company nor any of its officers,
directors or affiliates has (i) taken, directly or indirectly, any
action designed to cause or result in, or that has constituted or might
reasonably be expected to constitute, the stabilization or manipulation
of the price of any security of the Company to facilitate the sale or
resale of the Shares or (ii) since the filing of the Registration
Statement (A) sold, bid for, purchased or paid anyone any compensation
for soliciting purchases of, the Shares or (B) paid or agreed to pay to
any person any compensation for soliciting another to purchase any
other securities of the Company.
(u) None of the Company, the Bank, nor, to the knowledge
of the Company, any director or executive officer, agent, employee or
other person acting on behalf of the Company or the Bank has (i) used,
or authorized the use of, any corporate or other funds for unlawful
payments, or contributions, (ii) made unlawful expenditures relating to
political activity to government officials, or (iii) established or
maintained any unlawful or unrecorded funds in violation of any
federal, state, or local law or regulation, including Section 30A of
the Exchange Act. None of the Company, the Bank, nor, to the knowledge
of the Company, any director or executive officer of the Company or the
Bank has accepted or received any unlawful contributions or payments.
(v) The Company has obtained for the benefit of the
Company and the Underwriters from each of its directors and executive
officers a written agreement (the "Lockup Agreements") that for a
period of 180 days from the date of the Prospectus such director or
officer will not, without your prior written consent, offer, pledge,
sell, contract to sell, grant any option for the sale of, or otherwise
dispose of (or announce any offer, pledge, sale, grant of an option to
purchase or other disposition), directly or indirectly, any shares of
Common Stock or securities convertible into, or exercisable or
exchangeable for, shares of Common Stock.
(w) The Bank, upon the issuance of a charter by the OCC,
will not be prohibited, directly or indirectly, from paying any
dividends to the Company, from making any other distributions on the
Bank's capital stock, from repaying to the Company any loans or
advances to the Bank or from transferring the Bank's property or assets
to the Company, except as disclosed in the Prospectus.
(x) The Company and the Bank have filed all material
foreign, federal, state and local tax returns that are required to be
filed by them and have paid all taxes shown as due on such returns as
well as all other taxes, assessments and governmental charges that are
due and payable; and no deficiency with respect to any such return has
been assessed
7
<PAGE> 8
or proposed in any material respects. All tax liabilities have been
adequately provided for in the financial statements of the Company.
(y) The Company is not, nor will it become as a result of
transactions contemplated hereby, and does not intend to conduct its
business in a manner that would cause it to become, an "investment
company" or a company "controlled" by an "investment company" within
the meaning of the Investment Company Act of 1940.
2. PURCHASE AND SALE OF SHARES. Subject to the terms and
conditions herein set forth, (a) the Company agrees to issue and sell to each of
the Underwriters, and each of the Underwriters agree, severally and not jointly,
to purchase from the Company the number of Firm Shares set opposite the name of
such Underwriter in Schedule 1 hereto, at the following purchase prices: (i)
with respect to the Firm Shares not purchased by the Company's directors and
executive officers, as described in (ii) below, at a purchase price of $9.25 per
share, and (ii) with respect to the Firm Shares purchased by the Company's
directors and executive officers, but only up to a maximum of 300,000 Firm
Shares, at a purchase price of $9.65 per share, (b) in the event and to the
extent that the Underwriters shall exercise the election to purchase Optional
Shares as provided below, the Company agrees to issue and to sell to each of the
Underwriters, and each of the Underwriters agree, severally and not jointly, to
purchase from the Company, at a purchase price of $9.25 per share, that portion
of the number of Optional Shares as to which such election shall have been
exercised (to be adjusted by you so as to eliminate fractional shares)
determined by multiplying such number of Optional Shares by a fraction, the
numerator of which is the maximum number of Optional Shares that such
Underwriter is entitled to purchase as set forth opposite the name of such
Underwriter in Schedule I hereto and the denominator of which is the maximum
number of the Optional Shares that all of the Underwriters are entitled to
purchase hereunder.
The Company hereby grants to the Underwriters the right to purchase at
its election in whole or in part from time to time up to 150,000 Optional
Shares, at the purchase price of $9.25 per share for the sole purpose of
covering over-allotments in the sale of Firm Shares. Any such election to
purchase Optional Shares may be exercised by written notice from you to the
Company, given from time to time within a period of 30 calendar days after the
date of this Agreement and setting forth the aggregate number of Optional Shares
to be purchased and the date on which such Optional Shares are to be delivered,
as determined by you but in no event earlier than the First Time of Delivery (as
hereinafter defined) or, unless you and the Company otherwise agree in writing,
earlier than two or later than ten business days after the date of such notice.
In the event you elect to purchase all or a portion of the Optional Shares, the
Company agrees to furnish or cause to be furnished to you the certificates,
letters and opinions, and to satisfy all conditions set forth in Section 7
hereof at each Subsequent Time of Delivery (as hereinafter defined).
3. OFFERING BY THE UNDERWRITERS. Upon the authorization by you of
the release of the Shares, the several Underwriters propose to offer the Shares
for sale upon the terms and conditions disclosed in the Prospectus.
8
<PAGE> 9
4. DELIVERY OF SHARES; CLOSING. Certificates in definitive form
for the Shares to be purchased by each Underwriter hereunder, and in such
denominations and registered in such names as Interstate/Johnson Lane
Corporation may request upon at least 48 hours prior notice to the Company shall
be delivered by or on behalf of the Company to you for your account against
payment by you of the purchase price therefor by official bank check or checks
(payable in next day funds unless closing is on a Friday in which case it shall
be payable in same day funds) drawn on an Atlanta, Georgia bank, payable to the
order of the Company. The closing of the sale and purchase of the Shares shall
be held at the offices of Troutman Sanders LLP, Atlanta, Georgia. The time and
date of such delivery and payment shall be, with respect to the Firm Shares, at
10:00 a.m., Atlanta time, on the 3rd (or if the Firm Shares are priced, as
contemplated by Rule 15c6-1(c) under the Exchange Act, after 4:30 p.m.,
Washington, D.C. time, the 4th) full business day after the execution of this
Agreement or at such other legally permissible time and date as you and the
Company may agree upon in writing, and, with respect to the Optional Shares, at
10:00 a.m., Atlanta time, on the date specified by you in the written notice
given by you of the Underwriters' election to purchase all or part of such
Optional Shares, or at such other time and date as you and the Company may agree
upon in writing. Such time and date for delivery of the Firm Shares is herein
called the "First Time of Delivery," such time and date for delivery of the
Optional Shares, if not the First Time of Delivery, is herein called a
"Subsequent Time of Delivery," and each such time and date for delivery is
herein called a "Time of Delivery." The Company will make such certificates
available for checking and packaging at least 24 hours prior to each Time of
Delivery at your office at the address set forth above or such other location
designated by you to the Company. If the Representative so elects, delivery of
the Firm Shares and the Optional Shares, if any, may be made by credit through
full fast transfer to the accounts at the Depositary Trust Company designated by
the Representative.
5. COVENANTS OF THE COMPANY. The Company covenants and agrees
with the Underwriter:
(a) The Company shall comply with the provisions of and
make all requisite filings with the Commission pursuant to and in
accordance with Rule 430A and subparagraph (1) (or, if applicable and
if consented to by you, subparagraph (4)) of Rule 424(b) not later than
the earlier of (i) the second business day following the execution and
delivery of this Agreement or (ii) the date on which the Prospectus is
first used after the Registration Statement is declared effective. The
Company will advise you promptly of any such filing pursuant to Rules
430A or 424(b).
(b) The Company will not file with the Commission the
Prospectus or the amendment referred to in the second sentence of
Section l(a) hereof, any amendment or supplement to the Prospectus or
any amendment to the Registration Statement unless you have received a
reasonable period of time to review any such proposed amendment or
supplement and consented to the filing thereof and will use its best
efforts to cause any such amendment to the Registration Statement to be
declared effective as promptly as possible. Upon the request of the
Representative or counsel for the Representative, the Company will
promptly prepare and file with the Commission, in accordance with the
Rules and Regulations, any amendments to the Registration Statement or
amendments or
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<PAGE> 10
supplements to the Prospectus that may be necessary or advisable in
connection with the distribution of the Shares by the Underwriters and
will use its best efforts to cause any such amendment to the
Registration Statement to be declared effective as promptly as
possible. If required, the Company will file any amendment or
supplement to the Prospectus with the Commission in the manner and
within the time period required by Rule 424(b) under the Securities
Act. The Company will advise the Representative, promptly after
receiving notice thereof, of the time when the Registration Statement
or any amendment thereto has been filed or declared effective or the
Prospectus or any amendment or supplement thereto has been filed and
will provide evidence to the Representative of each such filing or
effectiveness.
(c) The Company will advise you promptly after receiving
notice or obtaining knowledge of (i) the issuance by the Commission of
any stop order suspending the effectiveness of the Registration
Statement or any part thereof or any order preventing or suspending the
use of any Preliminary Prospectus or the Prospectus or any amendment or
supplement thereto, (ii) the suspension of the qualification of the
Shares for offer or sale in any jurisdiction or of the initiation or
threatening of any proceeding for any such purpose, or (iii) any
request made by the Commission or any securities authority of any other
jurisdiction for amending the Registration Statement, for amending or
supplementing the Prospectus or for additional information. The Company
will use its best efforts to prevent the issuance of any such stop
order and, if any such stop order is issued, to obtain the withdrawal
thereof as promptly as possible.
(d) If during the period in which a prospectus is
required by law to be delivered by an Underwriter or dealer, any events
shall have occurred as a result of which, in the judgment of the
Company or the reasonable opinion of the Underwriters, the Prospectus
as then amended or supplemented would include an untrue statement of a
material fact or omit to state any material fact necessary in order to
make the statements therein, in light of the circumstances under which
they were made, not misleading, or if for any reason it is necessary
during such same period to amend or supplement the Prospectus to comply
with the Securities Act or the Rules and Regulations or any law, the
Company will promptly notify you and upon your request (but at the
Company's expense) prepare and file with the Commission and any state
or other governmental securities commissions in jurisdictions where the
Shares have been sold by the Underwriters, an amendment or supplement
to the Prospectus that corrects such statement or omission or effects
such compliance and will furnish without charge to each Underwriter and
to any dealer in securities, as many copies of such amended or
supplemented Prospectus as you may from time to time reasonably
request. Neither your consent to, nor the Underwriter's delivery of,
any such amendment or supplement shall constitute a waiver of any of
the conditions set forth in Section 7.
(e) The Company promptly from time to time will take such
action as you may reasonably request to qualify the Shares for offering
and sale under the securities or blue sky laws of such jurisdictions as
you may request and will continue such qualifications in effect for as
long as may be necessary to complete the distribution of the Shares,
provided
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<PAGE> 11
that in connection therewith the Company shall not be required to
qualify as a foreign corporation or to file a general consent to
service of process in any jurisdiction. In the event that the
qualification of the Shares in any jurisdiction is suspended, the
Company shall so advise the Representative promptly in writing.
(f) The Company will deliver to, or upon the order of,
the Representative, from time to time, as many copies of the
Preliminary Prospectus as the Representative may reasonably request.
The Company will deliver to, or upon the order of, the Representative
during the period when delivery of a Prospectus is required under the
Securities Act, as many copies of the Prospectus in final form, or as
thereafter amended or supplemented, as the Representative may
reasonably request. The Company will deliver to the Representative at
or before the Time of Delivery, four signed copies of the Registration
Statement and all amendments thereto including all exhibits filed
therewith, and will deliver to the Representative such number of copies
of the Registration Statement (including such number of copies of the
exhibits filed therewith that may be reasonably requested), and of all
amendments thereto, as the Representative may reasonably request.
(g) The Company will, from time to time, after the
effective date of the Registration Statement file with the Commission
such reports as are required by the Securities Act, the Exchange Act
and the Rules and Regulations, and shall also file with foreign, state
and other governmental securities commissions in jurisdictions where
the Shares have been sold by the Underwriters such reports as are
required to be filed by the securities acts and the regulations of
those jurisdictions.
(h) As soon as practicable, but in any event not later
than the last day of the thirteenth month after the effective date of
the Registration Statement, the Company will make generally available
to its security holders an earnings statement (which need not be
audited) in reasonable detail covering a period of at least 12
consecutive months beginning after the effective date of the
Registration Statement, complying with Section 11(a) of the Securities
Act and the Rules and Regulations and will advise you in writing when
such statement has been so made available.
(i) The Company will, for a period of five years from the
Time of Delivery, deliver to the Representatives copies of annual
reports and copies of all other documents, reports and information
furnished by the Company to its shareholders or filed with the NASD or
any securities exchange pursuant to the requirements of such exchange
or with the Commission pursuant to the Securities Act or the Exchange
Act. The Company will deliver to the Representative similar reports
with respect to significant subsidiaries, as that term is defined in
the Rules and Regulations, which are not consolidated in the Company's
financial statements.
(j) During the period beginning from the date hereof and
continuing to and including the date 180 days after the date of the
Prospectus, the Company will not, without your prior written consent,
offer, pledge, issue, sell, contract to sell, grant any option for the
sale of, or otherwise dispose of (or announce any offer, pledge, sale,
grant
11
<PAGE> 12
of an option to purchase or other disposition), directly or indirectly,
any shares of Common Stock or securities convertible into, exercisable
or exchangeable for, shares of Common Stock, except as provided in
Section 2 and except as described in the Prospectus.
(k) Neither the Company nor any of its officers,
directors or affiliates will (i) take, directly or indirectly, prior to
the closing of the purchase and sale of the Shares, any action designed
to cause or to result in, or that might reasonably be expected to
constitute, the stabilization or manipulation of the price of any
security of the Company to facilitate the sale or resale of any of the
Shares, (ii) sell, bid for, purchase or pay anyone any compensation for
soliciting purchases of, the Shares or (iii) pay or agree to pay to any
person any compensation for soliciting another to purchase any other
securities of the Company.
(l) The Company will apply the net proceeds from the
offering in the manner set forth under "Use of Proceeds" in the
Prospectus and will timely report such use of proceeds pursuant to Item
701 of Regulations S-B and S-K in its periodic reports filed pursuant
to Section 13(a) and 15(d) of the Exchange Act in accordance with Rule
463 of the Securities Act or any successor provision.
(m) If at any time during the 60-day period after the
Registration Statement becomes effective, any rumor, publication or
event relating to or affecting the Company shall occur as a result of
which in your reasonable opinion the market price of the Common Stock
has been or is likely to be materially affected (regardless of whether
such rumor, publication or event necessitates a supplement to or
amendment of the Prospectus) and after written notice from you advising
the Company to the effect set forth above, the Company agrees to
forthwith prepare, consult with you concerning the substance of, and
disseminate a press release or other public statement, reasonably
satisfactory to you, responding to or commenting on such rumor,
publication or event.
(n) The Company will cause the Shares to be quoted on the
Nasdaq OTC Bulletin Board at each Time of Delivery and for at least one
year from the date hereof.
6. EXPENSES. The Company will pay all costs and expenses incident
to the performance of its obligations under this Agreement, whether or not the
transactions contemplated hereby are consummated or this Agreement is terminated
pursuant to Section 10 hereof, including without limitation all costs and
expenses incident to (i) the fees, disbursements and expenses of the Company's
counsel and accountants in connection with the registration of the Shares under
the Securities Act and all other expenses in connection with the preparation,
printing and filing of the Registration Statement (including all amendments
thereto), any Preliminary Prospectus, the Prospectus and any amendments and
supplements thereto, this Agreement and any blue sky memoranda; (ii) the
delivery of copies of the foregoing documents to the Underwriters; (iii) the
filing fees of the Commission and the National Association of Securities
Dealers, Inc. relating to the Shares; (iv) the preparation, issuance and
delivery to the Underwriters of any certificates evidencing the Shares,
including transfer agent's and registrar's fees; (v) the
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<PAGE> 13
qualification of the Shares for offering and sale under state securities and
blue sky laws, including filing fees and fees and disbursements of counsel for
the Underwriters relating thereto; (vi) any expenses of listing the Shares on
the Nasdaq OTC Bulletin Board; (vii) any expenses for travel, lodging and meals
incurred by the Company and any of its officers, directors and employees in
connection with any meetings with prospective investors in the Shares. It is
understood, however, that, except as provided in this Section, Section 8 and
Section 10 hereof, the Underwriters will pay all of their own costs and
expenses, including the fees of their counsel (other than those related to
qualification of the Shares under state securities or blue sky laws), stock
transfer taxes on resale of any of the Shares by them, and any advertising
expenses relating to the offer and sale of the Shares.
7. CONDITIONS OF THE UNDERWRITERS' OBLIGATIONS. The obligations
of the Underwriters hereunder to purchase and pay for the Shares to be delivered
at each Time of Delivery shall be subject, in their discretion, to the accuracy
of the representations and warranties of the Company contained herein as of the
date hereof and as of such Time of Delivery, to the accuracy of the statements
of Company officers made pursuant to the provisions hereof, to the performance
by the Company of its covenants and agreements hereunder, and to the following
additional conditions precedent:
(a) The Registration Statement as amended to date shall
have become effective prior to the execution of this Agreement or at
such later date and/or time as shall have been consented to by you in
writing. The Prospectus and any amendment or supplement thereto shall
have been filed with the Commission pursuant to Rule 424(b) within the
applicable time period prescribed for such filing and in accordance
with Section 5(a) of this Agreement; no stop order suspending the
effectiveness of the Registration Statement or in part thereof shall
have been issued and no proceedings for that purpose shall have been
instituted, threatened or, to the knowledge of the Company and the
Representatives, contemplated by the Commission; and all requests for
additional information on the part of the Commission shall have been
complied with to your reasonable satisfaction.
(b) Troutman Sanders LLP, counsel for the Underwriters,
shall have furnished to you such opinion or opinions, dated such Time
of Delivery, with respect to the incorporation of the Company, the
validity of the Shares being delivered at such Time of Delivery, the
Registration Statement, the Prospectus, and other related matters as
you may reasonably request and which are customary, and the Company
shall have furnished to such counsel such documents as they request for
the purpose of enabling them to pass upon such matters.
(c) You shall have received an opinion, dated such Time
of Delivery, of Powell, Goldstein, Frazer & Murphy LLP, counsel for the
Company in form and substance satisfactory to you and your counsel, to
the effect that:
(i) The Company has been duly incorporated and
is validly existing as a corporation under the laws of the
State of Georgia and has the corporate power and authority to
own or lease its properties and conduct its business as
described in
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<PAGE> 14
the Registration Statement and the Prospectus and to enter
into this Agreement and perform its obligations hereunder. The
Company is duly qualified to transact business as a foreign
corporation in states where required and where failure to so
qualify would have a material adverse effect on the Company.
(ii) The Bank is a national banking association
in organization under the laws of the United States of America
and, upon the issuance of a charter by the OCC, will have the
corporate power and authority to own or lease its properties
and conduct its business as described in the Registration
Statement and the Prospectus. The Bank has received
preliminary approval for its organization from the OCC.
(iii) The Company's authorized, issued and
outstanding capital stock is as disclosed under the caption
"Capitalization" in the Prospectus. All of the issued shares
of capital stock of the Company have been duly authorized and
validly issued, are fully paid and nonassessable and conform
to the description of the Common Stock contained in the
Prospectus. None of the issued shares have been issued in
violation of or subject to any preemptive rights provided for
by law, agreement or the Company's Articles of Incorporation
or Bylaws.
(iv) Upon the issuance of a charter by the OCC,
all of the shares of capital stock of the Bank will be issued
the Company free and clear of any liens, claims or
encumbrances of any kind, and the Bank will become a wholly
owned subsidiary of the Company.
(v) The Shares to be sold by the Company have
been duly authorized and, when issued and delivered against
payment therefor as provided herein, will be validly issued
and fully paid and nonassessable and will conform to the
description of the Common Stock contained in the Prospectus.
The Underwriters will receive valid title to the Shares to be
issued and delivered by the Company pursuant to this
Agreement, free and clear of all liens, encumbrances, claims,
security interests, restrictions, shareholders' agreements and
voting trusts whatsoever.
(vi) To the knowledge of such counsel, the
Company does not have outstanding any options to purchase, or
any rights or warrants to subscribe for, or any securities or
obligations convertible into, or any contracts or commitments
to issue or sell any capital stock, and there are no
preemptive rights or other rights to subscribe for or purchase
any capital stock of the Company, or any restriction upon the
transfer of, the Shares pursuant to the Company's Articles of
Incorporation or Bylaws or any agreement or other instrument
to which the Company is a party or by which it may be bound,
except as described in the Prospectus. To the knowledge of
such counsel, neither the filing of the Registration Statement
nor the offer or sale of the Shares as contemplated by this
Agreement gives rise to any rights, other than those which
have been waived or
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<PAGE> 15
satisfied, for or relating to the registration of any Common
Stock or any other securities of the Company.
(vii) The issue and sale of the Shares being
issued at such Time of Delivery and the performance of this
Agreement and the consummation of the transactions herein
contemplated will not conflict with, or (with or without the
giving of notice or the passage of time or both) result in a
breach or violation of any of the terms or provisions of, or
constitute a default under any document or agreement which is
an Exhibit to the Registration Statement, or violate any
provision of the Articles of Incorporation or Bylaws or other
governing instruments of the Company or the Bank or any
statute, rule or regulation or, to such counsel's knowledge
after diligent inquiry, any order, judgment or decree of any
court or governmental agency or body having jurisdiction over
the Company or the Bank or any of their respective properties
or assets.
(viii) No consent, approval, authorization or order
from, or registration, qualification or filing with, any
governmental agency or body or third party is required for the
issue and sale of the Shares or the consummation of the
transactions contemplated by this Agreement, except the
registration of the Shares under the Securities Act and such
as may be required by the NASD and under state securities or
blue sky laws in connection with the offer, sale and
distribution of the Shares by the Underwriters.
(ix) This Agreement has been duly authorized,
executed and delivered by the Company and constitutes the
valid and binding agreement of the Company enforceable against
the Company in accordance with its terms subject, as to
enforcement, to applicable bankruptcy, insolvency,
reorganization and moratorium laws and other laws relating to
or affecting the enforcement of creditors' rights generally
and to general equitable principles, and except as the
enforceability of rights to indemnity and contribution under
this Agreement may be limited under applicable securities laws
or the public policy underlying such laws.
(x) The Company and the Bank have obtained or
have filed for all licenses, consents and approvals, and have
satisfied or have taken all action required at this time to
satisfy all eligibility and other similar requirements imposed
by federal and state regulatory bodies, administrative
agencies or other governmental bodies, agencies or officials,
in each case necessary for the conduct of the business in
which they are engaged or are contemplated to be engaged as
described in the Prospectus (except where the failure to have
any such licenses, consents, and approvals, or to have
satisfied or taken such action to satisfy the requirements,
individually or in the aggregate, would not have a material
adverse effect on the business, properties, operations, or
financial condition of the Company or its subsidiaries, taken
as a whole). With respect to any necessary licenses, consents
and approvals, and any necessary eligibility and other similar
requirements that the Company or the Bank does not have at
this time, (i) all
15
<PAGE> 16
applications therefor are, to such counsel's knowledge,
complete and accurate, and have been filed with the
appropriate regulatory authorities, and (ii) counsel knows of
no reason why the same will not be received or satisfied prior
to the time the same are required to conduct business as
described in the Prospectus.
(xi) To such counsel's knowledge after diligent
inquiry, there is not pending or threatened any action, suit,
proceeding, inquiry or investigation, to which the Company or
the Bank is a party, or to which property of the Company or
the Bank is subject, before or brought by any court or
governmental agency or body.
(xii) To the knowledge of such counsel, neither
the Company nor the Bank is in violation of any law,
ordinance, administrative or governmental rule or regulation
applicable to the Company or the Bank, or any decree of any
court or governmental agency or body having jurisdiction over
the Company or the Bank, except where such violation does not
and will not have a material adverse effect on the Company and
the Bank as a whole.
(xiii) The Registration Statement and the
Prospectus and each amendment or supplement thereto (other
than the financial statements and schedules and other
financial information included therein, as to which such
counsel need express no opinion), as of their respective
effective or issue dates, complied as to form in all material
respects with the requirements of the Securities Act and the
Rules and Regulations. The descriptions in the Registration
Statement and the Prospectus of statutes, rules and
regulations are accurate and fairly present the information
required to be shown; and such counsel does not know of any
statutes, rules, regulations or legal or governmental
proceedings required to be described in the Registration
Statement or Prospectus that are not described as required or
of any contracts or documents of a character required to be
described in the Registration Statement or Prospectus or to be
filed as exhibits to the Registration Statement which are not
described and filed as required.
(xiv) The Registration Statement and all
post-effective amendments thereto have become effective under
the Securities Act; any required filing of the Prospectus
pursuant to Rule 430A and Rule 424(b) has been made in the
manner and within the time period required by such rules; and
to such counsel's knowledge no stop order suspending the
effectiveness of the Registration Statement or any part
thereof has been issued and, to such counsel's knowledge, no
proceedings for that purpose have been instituted or
threatened or are contemplated by the Commission.
(xv) The Company is not, and will not be as a
result of the consummation of the transactions contemplated by
this Agreement, an "investment company," or a company
"controlled" by an "investment company," within the meaning of
the Investment Company Act of 1940.
16
<PAGE> 17
Such counsel shall also state that no facts have come to their
attention which lead them to believe that, as of its effective date,
the Registration Statement or any further amendment thereto made by the
Company prior to the date hereof (other than the financial statements
and related schedules therein or other financial data derived from
accounting records, as to which they need express no opinion) contained
an untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary to make the statements
therein not misleading or that, as of its date, the Prospectus or any
further amendment or supplement thereto made by the Company prior to
the date hereof (other than the financial statements and related
schedules therein or other financial data derived from accounting
records, as to which they need express no opinion) contained an untrue
statement of a material fact or omitted to state a material fact
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading or that, as of
the date hereof, either the Registration Statement or the Prospectus or
any further amendment or supplement thereto made by the Company prior
to the date hereof (other than the financial statements and related
schedules therein or other financial data derived from accounting
records, as to which they need express no opinion) contains an untrue
statement of a material fact or omits to state a material fact
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
In rendering any such opinion, such counsel may rely, as to
matters of fact, to the extent such counsel deem proper, on
certificates of responsible officers of the Company and public
officials.
(d) You shall have received from Mauldin & Jenkins, LLC,
letters dated, respectively, the date of this Agreement and the
effective date of the most recently filed post-effective amendment to
the Registration Statement and also at each Time of Delivery, in form
and substance satisfactory to you, containing statements and
information of the type ordinarily included in accountants' "comfort
letters" to underwriters with respect to the financial statements and
certain financial information contained in or incorporated by reference
in the Registration Statement and the Prospectus.
(e) You shall have received on each Time of Delivery a
certificate or certificates of the Chief Executive Officer and the
President of the Company to the effect that:
(i) the representations and warranties of the
Company in Section 1 of this Agreement are true and correct,
as if made at and as of the First Time of Delivery or the
Subsequent Time of Delivery, as the case may be, and the
Company has complied with all the agreements and satisfied all
the conditions on its part to be performed or satisfied at or
prior to the Time of Delivery and as to such other matters as
you may reasonably request;
17
<PAGE> 18
(ii) no stop order suspending the effectiveness
of the Registration Statement has been issued, and no
proceedings for that purpose have been initiated or are
pending, or to their knowledge, contemplated under the
Securities Act;
(iii) all filings required by Rule 424 and Rule
430A of the Rules and Regulations have been made;
(iv) they have carefully examined the
Registration Statement and the Prospectus, and any amendments
or supplements thereto, and in his or her opinion, such
documents do not include any untrue statement of a material
fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein not
misleading in light of the circumstances under which they were
made; and
(v) since the effective date of the Registration
Statement, there has occurred no event required to be set
forth in an amendment or supplement to the Registration
Statement or the Prospectus which has not been so set forth.
(f) Since the date of the latest audited financial
statements included in the Prospectus, neither the Company nor the Bank
shall have sustained (i) any loss or interference with their respective
businesses from fire, explosion, flood, hurricane or other calamity,
whether or not covered by insurance, or from any labor dispute or court
or governmental action, order or decree, otherwise than as disclosed in
or contemplated by the Prospectus, or (ii) any change, or any
development involving a prospective change (including without
limitation a change in management or control of the Company), in or
affecting the position (financial or otherwise), results of operations,
net worth or business prospects of the Company and the Bank, otherwise
than as disclosed in or contemplated by the Prospectus (including any
amendment), the effect of which, in either such case, is in your
judgment so material and adverse as to make it unpracticable or
inadvisable to proceed with the purchase, sale and delivery of the
Shares being delivered at such Time of Delivery as contemplated by the
Registration Statement, as amended as of the date hereof.
(g) Subsequent to the date hereof there shall not have
occurred any of the following: (i) any suspension or limitation in
trading in securities generally on the New York Stock Exchange (other
than normal market breaks or cooling periods), or any setting of
minimum prices for trading on such exchange, or if trading in any
securities of the Company has been suspended by the Commission, or
limitations on prices for trading (other than limitations on hours or
numbers of days of trading) have been fixed, or maximum ranges for
prices for securities have been required, by the Nasdaq OTC Bulletin
Board or the NASD or by order of the Commission or any other
governmental authority; (ii) a moratorium on commercial banking
activities in New York declared by either federal or state authorities;
(iii) any major outbreak or major escalation of hostilities involving
the United States, declaration by the United States of a national
emergency (other than with respect to natural disasters) or war or any
other national or international calamity or emergency if the effect of
any such event specified in this clause (iii) in your judgment
18
<PAGE> 19
makes it impracticable or inadvisable to proceed with the purchase,
sale and delivery of the Shares being delivered at such Time of
Delivery as contemplated by the Registration Statement, as amended as
of the date hereof.
(h) The Shares shall be approved for quotation on the
Nasdaq OTC Bulletin Board when issued.
(i) The Representatives shall have received the Lockup
Agreements as described in Section 1.
8. INDEMNIFICATION AND CONTRIBUTION. (a) The Company agrees to
indemnify and hold harmless each Underwriter against any losses, claims, damages
or liabilities, joint or several, to which such Underwriter may become subject,
under the Securities Act or otherwise, insofar as such losses, claims, damages
or liabilities (or actions in respect thereof) arise out of or are based upon:
(i) any untrue statement or alleged untrue statement made by the Company in
Section 1 of this Agreement; (ii) any untrue statement or alleged untrue
statement of any material fact contained in (A) the Registration Statement or
any amendment thereto, any Preliminary Prospectus or the Prospectus or any
amendment or supplement thereto, or (B) any application or other document, or
any amendment or supplement thereto, executed by the Company or based upon
written information furnished by or on behalf of the Company filed in any
jurisdiction in order to qualify the Shares under the securities or blue sky
laws thereof or filed with the Commission or any securities association or
securities exchange (each an "Application"); or (iii) the omission or alleged
omission to state in the Registration Statement or any amendment thereto, any
Preliminary Prospectus, the Prospectus or any amendment or supplement thereto,
or any Application, material fact required to be stated therein or necessary to
make the statements therein not misleading, and will reimburse each Underwriter
for any legal or other expenses reasonably incurred by such Underwriter in
connection with investigating, defending against or appearing as a third-party
witness in connection with any such loss, claim, damage, liability or action;
provided, however, that the Company shall not be liable in any such case to the
extent that any such loss, claim, damage, liability or action arises out of or
is based upon an untrue statement or alleged untrue statement or omission or
alleged omission made in the Registration Statement or any amendment thereto,
any Preliminary Prospectus, the Prospectus or any amendment or supplement
thereto or any Application in reliance upon and in conformity with written
information furnished to the Company by any Underwriter. The Company will not,
without the prior written consent of each Underwriter, settle or compromise or
consent to the entry of any judgment in any pending or threatened claim, action,
suit or proceeding (or related cause of action or portion thereof) in respect of
which indemnification may be sought hereunder (whether or not such Underwriter
is a party to such claim, action, suit or proceeding), unless such settlement,
compromise or consent includes an unconditional release of such Underwriter from
all liability arising out of such claim, action, suit or proceeding or related
cause of action or portion thereof.
(b) Each Underwriter agrees to indemnify and hold harmless the
Company and its officers, directors, agents, representatives and affiliates
against any losses, claims, damages or liabilities to which the Company or its
officers, directors, agents, representatives and affiliates may become subject
under the Securities Act or otherwise, insofar as such losses, claims, damages
or
19
<PAGE> 20
liabilities (or actions in respect thereof) arise out of or are based upon any
untrue statement or alleged untrue statement of any material fact contained in
the Registration Statement or any amendment thereto, any Preliminary Prospectus,
the Prospectus or any amendment or supplement thereto or any Application or
arise out of or are based upon the omission or alleged omission to state therein
a material fact required to be stated therein or necessary to make the
statements therein not misleading, in each case to the extent, but only to the
extent, that such untrue statement or alleged untrue statement or omission or
alleged omission was made in reliance upon and in conformity with written
information furnished to the Company by the Underwriter through you expressly
for use therein; and will reimburse the Company for any legal or other expenses
reasonably incurred by such Company in connection with investigating or
defending any such loss, claim, damage, liability or action.
(c) Promptly after receipt by an indemnified party under subsection
(a) and (b) above of notice of the commencement of any action, such indemnified
party shall, if a claim in respect thereof is to be made against the
indemnifying party under such subsection, notify the indemnifying party in
writing of the commencement thereof; but the omission so to notify the
indemnifying party shall not relieve it from any liability which it may have to
any indemnified party otherwise than under such subsection. In case any such
action shall be brought against any indemnified party and it shall notify the
indemnifying party of the commencement thereof, the indemnifying party shall be
entitled to participate therein and, to the extent that it shall wish, jointly
with any other indemnifying party similarly notified, to assume the defense
thereof, with counsel satisfactory to such indemnified party (who shall not,
except with the consent of the indemnified party, be counsel to the indemnifying
party); provided, however, that if the defendants in any such action included
the indemnified party and the indemnifying party and the indemnified party shall
have reasonably concluded that there may be one or more legal defenses available
to it or other indemnified parties which are different from or additional to
those available to the indemnifying party, the indemnifying party shall not have
the right to assume the defense of such action on behalf of such indemnified
party and such indemnified party shall have the right to select separate counsel
to defend such action on behalf of such indemnified party. After such notice
from the indemnifying party to such indemnified party of its election so to
assume the defense thereof and approval by such indemnified party of counsel
appointed to defend such action, the indemnifying party will not be liable to
such indemnified party under this Section 8 for any legal or other expenses,
other than reasonable costs of investigation, subsequently incurred by such
indemnified party in connection with the defense thereof, unless (i) the
indemnified party shall have employed separate counsel in accordance with the
proviso to the next preceding sentence (it being understood, however, that in
connection with such action the indemnifying party shall not be liable for the
expenses of more than one separate counsel (in addition to local counsel) in any
one action or separate but substantially similar actions in the same
jurisdiction arising out of the same general allegations or circumstances, which
separate counsel shall be designated by the Representatives in the case of
indemnity arising under paragraph (a) of this Section 8) or (ii) the
indemnifying party has authorized the employment of counsel for the indemnified
party at the expense of the indemnifying party. Nothing in this Section 8(c)
shall preclude an indemnified party from participating at its own expense in the
defense of any such action so assumed by the indemnifying party.
20
<PAGE> 21
(d) If the indemnification provided for in this Section 8
is unavailable to or insufficient to hold harmless an indemnified party
under subsection (a) or (b) above in respect of any losses, claims,
damages or liabilities (or actions in respect thereof) referred to
therein, then each indemnifying party shall contribute to the amount
paid or payable by such indemnified party as a result of such losses,
claims, damages or liabilities (or actions in respect thereof) in such
proportion as is appropriate to reflect the relative benefits received
by the Company on the one hand and the Underwriter on the other from
the offering of the Shares. If, however, the allocation provided by the
immediately preceding sentence is not permitted by applicable law or if
the indemnified party failed to give the notice required under
subsection (c) above, then each indemnifying party shall contribute to
such amount paid or payable by such indemnified party in such
proportion as is appropriate to reflect not only such relative benefits
but also the relative fault of the Company on the one hand and the
Underwriter on the other in connection with the statements or omissions
that resulted in such losses, claims, damages or liabilities (or
actions in respect thereof), as well as any other relevant equitable
considerations. The relative benefits received by the Company on the
one hand and the Underwriter on the other shall be deemed to be in the
same proportion as the total net proceeds from the offering (before
deducting expenses) received by the Company bear to the total
underwriting discounts, and commissions received by the Underwriters.
The relative fault shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material
fact or the omission or alleged omission to state a material fact
relates to information supplied by the Company on the one hand or the
Underwriters on the other and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such
statement or omission. The Company and the Underwriters agree that it
would not be just and equitable if contributions pursuant to this
subsection (d) were determined by pro rata allocation (even if the
Underwriters were treated as one for such purpose) or by any other
method of allocation which does not take account of the equitable
considerations referred to above in this subsection (d). The amount
paid or payable by an indemnified party as a result of the losses,
claims, damages or liabilities (or actions in respect thereof) referred
to above in this subsection (d) shall be deemed to include any legal or
other expenses reasonably incurred by such indemnified party in
connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this subsection (d), the Underwriter
shall not be required to contribute any amount in excess of the amount
by which the total price at which the Shares underwritten by it and
distributed to the public were offered to the public exceeds the amount
of any damages which such Underwriter has otherwise been required to
pay by reason of such untrue or alleged untrue statement or omission or
alleged omission. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall be
entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation.
(e) The obligations of the Company under this Section 8
shall be in addition to any liability which the Company may otherwise
have and shall extend, upon the same terms and conditions, to each
person, if any, who controls any Underwriter within the meaning of the
Securities Act; and the obligations of the Underwriters under this
Section 8 shall be in addition to any liability which the Underwriters
may otherwise have and shall extend, upon the same terms and
conditions, to each officer and director of the Company and to each
person, if any, who controls the Company within the meaning of the
Securities Act.
21
<PAGE> 22
9. DEFAULT OF UNDERWRITERS. (a) If any Underwriter defaults in
its obligation to purchase Shares at a Time of Delivery, you may in your
discretion arrange for you or another party, or other parties to purchase such
shares on the terms contained herein. If within 36 hours after such default by
any Underwriter you do not arrange for the purchase of such Shares, the Company
shall be entitled to a further period of 36 hours within which to procure
another party or other parties satisfactory to you to purchase such Shares on
such terms. In the event that, within the respective prescribed periods, you
notify the Company that you have so arranged for the purchase of such Shares, or
the Company notifies you that it has so arranged for the purchase of such
Shares, you or the Company shall have the right to postpone a Time of Delivery
for a period of not more than 7 days in order to effect whatever change is made
thereby be made necessary in the Registration Statement or the Prospectus, or in
any other documents or arrangements, and the Company agrees to file promptly any
amendments to the Registration Statement or the Prospectus that in your opinion
may thereby be made necessary. The cost of preparing, printing and filing any
such amendments shall be paid for by the Underwriters. The term "Underwriter" as
used in this Agreement shall include any person substituted under this Section
with effect as if such person had originally been a party to this Agreement with
respect to such Shares.
(b) If, after giving effect to any arrangements for the purchase
of the Shares of a defaulting Underwriter or Underwriters by you and the Company
as provided in subsection (a) above, the aggregate number of such Shares which
remains unpurchased does not exceed one-eleventh of the aggregate number of
Shares to be purchased at such Time of Delivery, then the Company shall have the
right to require each non-defaulting Underwriter to purchase the number of
Shares which such Underwriter agreed to purchase hereunder at such Time of
Delivery and, in addition, to require each non-defaulting Underwriter to
purchase its pro rata share (based on the number of Shares which such
Underwriter agreed to purchase hereunder) of the Shares of such defaulting
Underwriter or Underwriters for which such arrangements have not been made, but
nothing herein shall relieve a defaulting Underwriter from liability for its
default.
10. TERMINATION. (a) This Agreement may be terminated with respect
to the Shares or any Optional Shares in the sole discretion of the
Representatives by notice to the Company given prior to the First Time of
Delivery or any Subsequent Time of Delivery, respectively, in the event that (i)
any condition to the obligations of the Underwriters set forth in Section 7
hereof has not been satisfied, or (ii) the Company shall have failed, refused or
been unable to deliver the Shares or to perform all obligations and satisfy all
conditions on its part to be performed or satisfied hereunder at or prior to
such Time of Delivery, in either case other than by reason of a default by any
of the Underwriters. If this Agreement is terminated pursuant to this Section
10(a), the Company will reimburse the Underwriters upon demand for all
out-of-pocket expenses (including counsel fees and disbursements) that shall
have been incurred by it in connection with the proposed purchase and sale of
the Shares. The Company shall not in any event be liable to any of the
Underwriters for the loss of anticipated profits from the transactions covered
by this Agreement.
22
<PAGE> 23
(b) If, after giving effect to any arrangements for the
purchase of the Shares of a defaulting Underwriter or Underwriters by you and
the Company as provided in Section 10(a), the aggregate number of such Shares
which remain unpurchased exceeds one-eleventh of the aggregate number of Shares
to be purchased at such Time of Delivery, or if the Company shall not exercise
the right described in Section 9(b) to require non-defaulting Underwriters to
purchase Shares of a defaulting Underwriter or Underwriters, then this Agreement
(or, with respect to a Subsequent Time of Delivery, the obligations of the
Underwriters to purchase and of the Company to sell the Optional Shares)
thereupon will terminate, without liability on the part of any nonfaulting
Underwriter or the Company, except for the expenses to be borne by the Company
and the Underwriters as provided in Section 6 hereof and the indemnity and
contribution agreements in Section 8 hereof; but nothing herein shall relieve a
defaulting Underwriter from liability for its default.
11. SURVIVAL. The respective indemnities, agreements,
representations, warranties and other statements of the Company, its officers
and the Underwriter, as set forth in this Agreement or made by or on behalf of
them, respectively, pursuant to this Agreement, shall remain in full force and
effect, regardless of any investigation (or any statement as to the results
thereof) made by or on behalf of the Underwriter or any controlling person
referred to in Section 8(e) or the Company, or any officer or director or
controlling person of the Company referred to in Section 8(e), and shall survive
delivery of and payment for the Shares. The respective agreements, covenants,
indemnities and other statements set forth in Sections 6 and 8 hereof shall
remain in full force and effect, regardless of any termination or cancellation
of this Agreement.
12. NOTICES. All communications hereunder shall be in writing and,
if sent to the Underwriter, shall be mailed, delivered or telegraphed and
confirmed in writing to Interstate/Johnson Lane Corporation, IJL Financial
Center, 201 North Tryon Street, Charlotte, North Carolina 28202, Attention:
Corporate Finance Department (with a copy to Walter E. Jospin of Troutman
Sanders LLP, 600 Peachtree Street, N.E., Suite 5200, Atlanta, Georgia 30308),
and if sent to the Company, shall be mailed, delivered or telegraphed and
confirmed in writing to the Company at 2815 Meredyth Drive, Albany, Georgia
31707, Attention: President and Chief Executive Officer (with a copy to
Katherine M. Koops of Powell, Goldstein, Frazer & Murphy LLP, 191 Peachtree
Street, N.E., 16th Floor, Atlanta, Georgia 30303).
13. REPRESENTATIVES. You will act for the several Underwriters in
connection with the transactions contemplated by this Agreement, and any action
under this Agreement taken by you will be binding upon all the Underwriters.
14. BINDING EFFECT. This Agreement shall be binding upon, and
inure solely to the benefit of, each Underwriter and the Company and to the
extent provided in Sections 8 and 10 hereof, the officers and directors and
controlling persons referred to therein and their respective heirs, executors,
administrators, successors and assigns, and no other person shall acquire or
have any right under or by virtue of this Agreement. No purchaser of any of the
Shares from the Underwriters shall be deemed a successor or assign by reason
merely of such purchase.
23
<PAGE> 24
15. GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of Georgia without giving
effect to any provisions regarding conflicts of laws.
16. COUNTERPARTS. This Agreement may be executed by any one or
more of the parties hereto in any number of counterparts, each of which shall be
deemed to be an original, but all such counterparts shall together constitute
one and the same instrument.
24
<PAGE> 25
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to us one of the counterparts hereof, and upon
the acceptance hereof by Interstate/Johnson Lane Corporation, this letter will
constitute a binding agreement among the Underwriters and the Company.
Very truly yours,
COMMUNITY CAPITAL BANCSHARES, INC.
By:
-------------------------------
Name: Robert E. Lee
Title: President
INTERSTATE/JOHNSON LANE CORPORATION
By:
--------------------------------
Name: James H. Glen, Jr.
Title: Managing Director
25
<PAGE> 26
SCHEDULE I
COMMUNITY CAPITAL BANCSHARES, INC.
1,000,000 SHARES
COMMON STOCK
<TABLE>
<CAPTION>
NUMBER OF
OPTIONAL SHARES
TOTAL NUMBER OF TO BE PURCHASED
FIRM SHARES TO IF MAXIMUM
UNDERWRITER BE PURCHASED OPTION EXERCISED
- ----------- --------------- ----------------
<S> <C> <C>
Interstate/Johnson Lane Corporation
Total
</TABLE>
<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>
-ii-
<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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<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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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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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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<PAGE> 15
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.
-11
<PAGE> 17
(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.
-12
<PAGE> 18
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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<PAGE> 19
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
-14
<PAGE> 20
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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<PAGE> 21
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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<PAGE> 22
AMENDMENT NO. 1
TO
BYLAWS
OF
COMMUNITY CAPITAL BANCSHARES, INC.
Section 3.2 of the Bylaws of Community Capital Bancshares, Inc. is
hereby amended to add the following sentence as the second sentence thereof:
At least two directors shall be independent directors who are not
officers or employees of the corporation or any of its subsidiaries
and who do not have a relationship with the corporation that, in the
opinion of the Board of Directors, would interfere with the exercise
of their independent judgment in carrying out the responsibilities of
a director.
<PAGE> 1
EXHIBIT 4.1
COMMON STOCK
NUMBER SHARES
INCORPORATED UNDER THE LAWS OF THE STATE OF GEORGIA
COMMUNITY CAPITAL BANCSHARES, INC.
CUSIP 203694 10 0
SEE REVERSE FOR CERTAIN DEFINITIONS
This Certifies that
is the owner of
FULLY PAID AND NONASSESSABLE SHARES OF COMMON STOCK, $1.00 PAR VALUE, OF
COMMUNITY CAPITAL BANCSHARES, INC., transferable on the books of the Corporation
by the holder hereof in person or by duly authorized attorney on surrender of
this certificate properly endorsed. This certificate is not valid until
countersigned and registered by the Transfer Agent and Registrar.
WITNESS the seal of the Corporation and the facsimile signatures of its
duly authorized officers.
Countersigned and Registered:
SUNTRUST BANK, ATLANTA
Transfer Agent
and Registrar
By
Authorized Officer
COMMUNITY CAPITAL BANCSHARES, INC.
CORPORATE SEAL
[SEAL]
1998
GEORGIA
Secretary President
<PAGE> 2
COMMUNITY CAPITAL BANCSHARES, INC.
The following abbreviations, when used in the inscription on the face
of this certificate, shall be construed as though they were written out in full
according to applicable laws or regulations:
<TABLE>
<S> <C>
TEN COM -- as tenants in common UNIF GIFT MIN ACT -- _____________ Custodian ___________
TEN ENT -- as tenants by the entireties (Cust) (Minor)
JT TEN -- as joint tenants with right of under Uniform Gifts to Minors
survivorship and not as tenants Act __________________
in common (State)
</TABLE>
Additional abbreviations may also be used though not in the above list.
For value received, __________________ hereby sell, assign and transfer unto
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
[ ]
<TABLE>
<S> <C>
_________________________________________________________________________________
PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS, INCLUDING POSTAL ZIP CODE OF ASSIGNEE
_________________________________________________________________________________
_________________________________________________________________________________
___________________________________________________________________ of the Shares
represented by the within Certificate, and do hereby irrevocably constitute and
appoint ______________________________________________________________ Attorney
to transfer the said shares on the books of the within-named Corporation with
full power of substitution in the premises.
</TABLE>
Dated: __________________________
_______________________________________
NOTICE: The signature to this assignment
must correspond with the name as written
upon the face of the Certificate in
every particular, without alteration or
enlargement or any change whatever.
<PAGE> 1
EXHIBIT 5.1
POWELL, GOLDSTEIN, FRAZER & MURPHY LLP
191 PEACHTREE STREET, N.E.
SIXTEENTH FLOOR
ATLANTA, GEORGIA 30303
(404) 572-6600
February 2, 1999
Community Capital Bancshares, Inc.
P.O. Drawer 71269
Albany, Georgia 31750
RE: REGISTRATION OF 1,150,000 SHARES OF COMMON STOCK;
REGISTRATION STATEMENT ON FORM SB-2
Ladies and Gentlemen:
We have acted as counsel to Community Capital Bancshares, Inc., a
Georgia corporation (the "Company"), in connection with the registration under
the Securities Act of 1933, as amended, pursuant to the Company's Registration
Statement on Form SB-2 (the "Registration Statement"), of 1,150,000 shares of
common stock, $1.00 par value ("Common Stock"), of the Company (the "Shares").
In this capacity, we have examined the Registration Statement in the
form filed by the Company with the Securities and Exchange Commission (the
"Commission") on December 3, 1998, as amended by Pre-Effective Amendment No. 1
thereto, which is to be filed with the Commission on the date hereof, and the
proposed form of Underwriting Agreement among the Company and Interstate/Johnson
Lane Corporation (the "Underwriting Agreement") to be used in effecting the sale
of the Shares, and originals or copies, certified or otherwise identified to our
satisfaction, of such corporate records, agreements, documents and other
instruments of the Company relating to the authorization and issuance of the
Shares and such other matters as we have deemed relevant and necessary as a
basis for the opinion hereinafter set forth.
In conducting our examination, we have assumed the genuineness of all
signatures, the legal capacity of all natural persons, the authenticity of all
documents submitted to us as originals, the conformity to original documents of
all documents submitted to us as certified or photostatic copies and the
authenticity of the originals of such documents.
Based upon the foregoing, and in reliance thereon, and subject to the
limitations and qualifications set forth herein, we are of the opinion that the
Shares, when issued and delivered against payment therefor in accordance with
the terms of the Underwriting Agreement, will be legally and validly issued,
fully paid and non-assessable.
<PAGE> 2
Community Capital Bancshares, Inc.
February 2, 1999
Page 2
We hereby consent to the use of this opinion as Exhibit 5.1 to the
Registration Statement and to the reference to our firm under the heading "Legal
Matters" in the Prospectus which is a part of the Registration Statement.
Very truly yours,
/s/ POWELL, GOLDSTEIN, FRAZER & MURPHY LLP
<PAGE> 1
<TABLE>
<S> <C>
U.S. Department of Housing
A. SETTLEMENT STATEMENT and Urban Development OMB No. 2502-0265
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B. TYPE OF LOAN
- ---------------------------------------------------------------------------------------------------------------------------------
1. [_] FHA 2. [_] FmHA 3. [_] Conv. Unins. 6. File Number 7. Loan Number 8. Mortgage Insurance Case Number:
4. [_] VA 5. [_] Conv. Ins.
CROSS-BANK 11
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C. NOTE: This form is furnished to give you a statement of actual settlement costs. Amounts paid to and by the settlement agent
are shown. Items marked "(p.o.c.)" were paid outside the closing; they are shown here for informational purposes and are
not included in the totals.
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D. NAME AND ADDRESS OF BORROWER: COMMUNITY CAPITAL BANCSHARES, INC., a Georgia corp.
E. NAME AND ADDRESS OF SELLER: CROSS FAMILY LIMITED; RUTH CROSS HAYES; AND
WILMA C. DEPAZ LIVING TRUST AGREEMENT
TIN:
F. NAME AND ADDRESS OF LENDER:
G. PROPERTY TRACT 2, PARCEL A, CROSS ESTATE
LOCATION: ALBANY, DOUGHERTY COUNTY, GEORGIA
H. SETTLEMENT AGENT: WATSON, SPENCE, LOWE AND CHAMBLESS, LLP
PHONE (912) 436-1545
PLACE OF SETTLEMENT: 320 RESIDENCE AVENUE
ALBANY, GEORGIA 31701 TIN: 580552427
I. SETTLEMENT DATE: 11/20/98
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J. SUMMARY OF BORROWER'S TRANSACTION K. SUMMARY OF SELLER'S TRANSACTION
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100. GROSS AMOUNT DUE FROM BORROWER: 400. GROSS AMOUNT DUE TO SELLER:
- ---------------------------------------------------------------------------------------------------------------------------------
101. Contract sales price 315,000.00 401. Contract sales price 315,000.00
102 Personal property 402 Personal property
103. Settlement charges to borrower (from line 1400) 2,313.44 403.
104. 404.
105. 405.
ADJUSTMENTS FOR ITEMS PAID BY SELLER IN ADVANCE: ADJUSTMENTS FOR ITEMS PAID BY SELLER IN ADVANCE:
106. City/town taxes to 406. City/town taxes to
107. County taxes 11/20/98 to 12/31/98 420.62 407. County taxes 11/20/98 to 12/31/98 420.62
108. Assessments to 408. Assessments to
109. 409.
110. 410.
111. 411.
112. 412.
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120. GROSS AMOUNT DUE -- 317,734.06 420. GROSS AMOUNT -- 315,420.62
FROM BORROWER: DUE TO SELLER:
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200. AMOUNTS PAID BY OR IN BEHALF OF BORROWER 500. REDUCTIONS IN AMOUNT DUE TO SELLER
- ---------------------------------------------------------------------------------------------------------------------------------
201. Deposit or earnest money 10,000.00 501. Excess deposit (see instructions)
202. Principal amount of new loan(s) 502. 502. Settlement charges to seller (line 1400) 25,815.00
203. Existing loan(s) taken subject to 503. 503. Existing loan(s) taken subject to
204. 504. Payoff of first mortgage loan
205. 505. Payoff of second mortgage loan
206. 506. GA DEPT. OF REVENUE 2,636.42
207. 507. WILMA C. DEPAZ TRUST 93,898.78
208. 508. RUTH CROSS HAYES 96,535.21
209. 509. CROSS FAMILY 1031 EXC. 96,535.21
ADJUSTMENTS FOR ITEMS UNPAID BY SELLER: ADJUSTMENTS FOR ITEMS UNPAID BY SELLER:
210. City/town taxes to 510. City/town taxes to
211. County taxes to 511. County taxes to
212. Assessments to 512. Assessments to
213. 513.
214. 514.
215. 515.
216. 516.
217. 517.
218. 518.
219. 519.
- ---------------------------------------------------------------------------------------------------------------------------------
220. TOTAL PAID BY/FOR -- 10,000.00 520. TOTAL REDUCTIONS -- 315,420.62
BORROWER IN AMOUNT DUE SELLER:
- ---------------------------------------------------------------------------------------------------------------------------------
300. CASH AT SETTLEMENT FROM/TO BORROWER: 600. CASH AT SETTLEMENT TO/FROM SELLER:
- ---------------------------------------------------------------------------------------------------------------------------------
301. Gross Amounts due from borrower (line 120) 317,734.06 601. Gross amount due to seller (line 420) 315,420.62
- ---------------------------------------------------------------------------------------------------------------------------------
302. Less amounts paid by/for borrower (line 220) (10,000.00) 602. Less reductions in amt. Due seller (315,420.62)
(line 520)
- ---------------------------------------------------------------------------------------------------------------------------------
303. CASH ([X] FROM) ([_] TO) BORROWER: -- 603. CASH ([_] TO) ([_] FROM) SELLER: --
307,734.06 0.00
- ---------------------------------------------------------------------------------------------------------------------------------
Previous Edition is Obsolete Amended 10/87 HUD-1 (3-86) - RESPA, HB 4305.2
SUBSTITUTE FORM 1099 SELLER STATEMENT: The information contained in Blocks E, G, H, and I and on line 401 (or, if line 401 is
asterisked, lines 403 and 404) is important tax information and is being furnished to the Internal Revenue Service. If you are
required to file a return, a negligence penalty or other sanction will be imposed on you if this item is required to be reported
and the IRS determines that it has not been reported.
SELLER INSTRUCTIONS: If this real estate was your principal residence, file Form 2119, Sale or Exchange of Principal Residence,
for any gain, with your income tax return; for other transactions, complete the applicable parts of Form 4797, Form 6252 and/or
Schedule D (Form 1040).
You are required by law to provide [see box H] with your correct taxpayer identification number. If you do not provide [see box H]
with your correct taxpayer identification number, you may be subject to civil or criminal penalties imposed by law, and Under
penalties of perjury. I certify that the number shown on this statement is my correct taxpayer identification number.
</TABLE>
Signature illegible Seller's Signature
-----------------------
VMP MORTGAGE FORMS - (800) 521-7291
<PAGE> 2
<TABLE>
<S> <C>
- ---------------------------------------------------------------------------------------------------------------------------------
L. SETTLEMENT CHARGES
- ---------------------------------------------------------------------------------------------------------------------------------
700. TOTAL SALES/BROKER'S COMMISSION:
BASED ON PRICE $ 315,000.00 @ 8.00% = 25,200.00 PAID FROM PAID FROM
To BORROWER'S SELLER'S
FUNDS AT FUNDS AT
SETTLEMENT SETTLEMENT
- ---------------------------------------------------------------------------------------------------------------------------------
DIVISION OF COMMISSION (LINE 700) AS FOLLOWS:
- ---------------------------------------------------------------------------------------------------------------------------------
701. $ 12,600 to REMAX OF ALBANY, INC.
702. $ 12,600 to WALDEN & KIRKLAND, INC.
703. Commission paid at Settlement 25,200.00
704. Other agent charges to
- ---------------------------------------------------------------------------------------------------------------------------------
800. ITEMS PAYABLE IN CONNECTION WITH:
- ---------------------------------------------------------------------------------------------------------------------------------
801. Loan Origination Fee %
802. Loan Discount %
803. Appraisal Fee to
804. Credit Report to
805. Lender's Inspection Fee
806. Mortgage Insurance Application Fee to
807. Assumption Fee
808.
809.
810.
811.
- ---------------------------------------------------------------------------------------------------------------------------------
900. ITEMS REQUIRED BY LENDER TO BE PAID IN ADVANCE
- ---------------------------------------------------------------------------------------------------------------------------------
901. Interest from 11/21/98 to 11/20/98 @$ /day
902. Mortgage Insurance Premium for months to
903. Hazard Insurance Premium for years to
904.
905.
- ---------------------------------------------------------------------------------------------------------------------------------
1000. RESERVES DEPOSITED WITH LENDER
- ---------------------------------------------------------------------------------------------------------------------------------
1001. Hazard insurance months @ $ per month
1002. Mortgage Insurance months @ $ per month
1003. City property taxes months @ $ per month
1004. County property taxes months @ $ per month
1005. Annual assessments months @ $ per month
1006. months @ $ per month
1007. months @ $ per month
1008. months @ $ per month
- ---------------------------------------------------------------------------------------------------------------------------------
1100. TITLE CHARGES
- ---------------------------------------------------------------------------------------------------------------------------------
1101. Settlement or closing fee to
1102. Abstract or title search to
1103. Title examination to
1104. Title insurance binder to
1105. Document preparation to
1106. Notary fees to
1107. Attorney's fees to HODGES, ERWIN, HENDRICK & COLEMAN 1,200.00
(includes above items numbers: )
1108. Title insurance to LAWYERS TITLE 770.00
(includes above items numbers: )
1109. Lender's coverage $
1110. Owner's coverage $315,000.00
1111. ATTORNEY FEES WSLC - CNS 300.00
1112.
1113.
- ---------------------------------------------------------------------------------------------------------------------------------
1200. GOVERNMENT RECORDING AND TRANSFER CHARGES
- ---------------------------------------------------------------------------------------------------------------------------------
1201. Recording fees: Deed $16.00 ; Mortgage $ ; Releases $ 16.00
1202. City/county tax/stamps: Deed $ ; Mortgage $
1203. State tax/stamps: Deed $315.00 ; Mortgage $ 315.00
1204.
1205.
- ---------------------------------------------------------------------------------------------------------------------------------
1300. ADDITIONAL SETTLEMENT CHARGES
- ---------------------------------------------------------------------------------------------------------------------------------
1301. Survey to MARBURY ENGINEERING 327.44
1302. Pest inspection to
1303.
1304.
1305.
- ---------------------------------------------------------------------------------------------------------------------------------
1400. TOTAL SETTLEMENT CHARGES (enter on lines 103, Section J and 502, Section K) -- 2,313.44 25,815.00
- ---------------------------------------------------------------------------------------------------------------------------------
I have carefully reviewed the HUD-1 Settlement Statement and to the best of my knowledge and belief, it is a true and accurate
statement of all receipts and disbursements made on my account or by the _______. I further certify that I have received a copy of
the JUD-I Settlement Statement.
Borrower: /s/ Charles M. Jones, Director /s/ R. E. Lee Date: 11/21/98 Seller: /s/ Ruth Cross Hayes Date: 11/20/98
---------------------------------------------- --------- --------------------- ----------
COMMUNITY CAPITAL BANSHARES, INC. RUTH CROSS HAYES
CROSS FAMILY LIMITED, Signature illegible
/s/ Wilma C. Depaz, TTEE
/s/ Domingo T. Depaz, TTEE
Borrower: Date: Seller: Date: 11/20/98
----------------------------------------------- ---------------- -------------------------- ---------
WILMA C. DEPAZ, TRUSTEE
DOMINGO T. DEPAZ, TRUSTEE
The HUD-1 Settlement Statement which I have prepared is a true and accurate account of this transaction. I have caused or will
cause the funds to be disbursed in accordance with this statement.
WATSON, SPENCER, LOWE AND CHAMBLESS, LLP
Date: 11/21/98 Seller Agent: Signature illegible Date: 11/20/98
- -------------------------------------------------------- -------------- --------------------- ---------
</TABLE>
Warning: It is a crime to knowingly make false statements to the United States
on this or any other similar form. Penalties upon conviction can include a fine
and imprisonment. For details see: Title 18 U.S. Code Section 1001 and Section
1010.
VMP MORTGAGE FORMS - (800) 521-7291
<PAGE> 1
LEASE AGREEMENT
THIS LEASE AGREEMENT made and entered into on the, 6TH DAY OF JANUARY,
1999 by and between BANK & BUSINESS SYSTEMS, INC. hereinafter referred to as
LESSOR and ALBANY BANK AND TRUST hereinafter referred to as LESSEE.
WITNESSETH
The Lessor hereby rents and leases to the Lessee, upon the terms and
conditions set forth in this instrument, the following described property, to
wit:
ONE 28 X 80 DCA APPROVED MODULAR BANK UNIT
One (1) fifteen-foot (15') laminated teller line with undercounter
pedestals
Five (5) offices as shown
Two (2) ADA approved restrooms
One (1) lounge with cabinets
Eight (8) foot drive-up window with deal drawer and heater
Furniture as shown Valance Window Treatments
Lease price $3,650.00 a month for twelve (12) months ($43,800.00) to be paid in
two payments of $21,900. Renewal will be on a month to month basis at $3,850.00
per month. This price does not include applicable taxes.
OTHER EXPENSES
<TABLE>
<S> <C>
Freight to Albany $1,325.00
Block, Level and Tie Down $3,950.00
Underpinning, ready for backfill $2,375.00
Return Freight $2,390.00
Dismantle
Site work
Canopies
Insurance
Utilities
Taxes
</TABLE>
The term of this lease shall be for a period of twelve (12) months
commencing on the date of delivery of the described property to the location as
designated by the Lessee. At the expiration of the original term the Lessee
shall have the option to renew the lease on a month basis under the same terms,
conditions and provisions hereof, provided Lessee is not in default under any
of the terms or conditions and provisions hereof, provided Lessee is not in
default under any of the terms or conditions of this lease. If lessee elects to
exercise such option, he shall do so by giving written notice of such election
to Lessor not later than sixty (60) days prior to expiration of the original
term.
<PAGE> 2
After the election to renew is exercised by the Lessee then in order
to terminate said lease, Lessee shall give Lessor written notice of termination
not less than sixth (60) days prior to said termination.
In consideration of said lease agreement, Lessee agrees to pay Lessor
rental as follows:
LEASE AMOUNT IS $3,650.00 (THREE THOUSAND SIX
HUNDRED FIFTY DOLLARS) PER MONTH ON A TWELVE MONTH
BASIS, TO BE MADE IN TWO PAYMENTS OF $21,900.00.
FIRST PAYMENT IS DUE FEBRUARY 1, 1999, 2ND PAYMENT
DUE ON AUGUST 1, 1999. THIS PRICE DOES NOT INCLUDE
ANY APPLICABLE TAXES. AFTER TWELVE (12) MONTHS THE
LEASE WILL BE ON A MONTH TO MONTH BASIS.
The Lessee is responsible for cost of property's tie down and
blocking, as well as, REMOVAL AND RETURN OF PROPERTY to Lessor. Rental payment
shall be delivered or mailed to Lessor at P.O. Box 5746, Rome, Georgia
30162-5746, or such other place as may be designated by Lessor.
Lessee shall not, without the prior written consent of Lessor endorsed
hereon, assign this lease or any interest hereunder, or sublet the premises or
any part thereof, or permit the use of the premises by any party other than
tenant.
The Lessors, their agents, servants, or employees, may at all
reasonable times enter upon and inspect the demised premises.
Lessee further agrees that upon termination of this lease, Lessee
shall surrender quiet and peaceful possession of the premises in like good
order as at the commencement of said term, natural wear and tear expected.
Lessee accepts the leased property and personal property in its
present condition, as is. Lessee shall, throughout the initial term of this
lease and all renewals thereof, at its expense, maintain in good order and
repair the leased property, including all personal property leased herein,
except those repairs expressly required to be made by Lessor. Lessee agrees to
return said leased property to Lessor at the expiration of this lease in as
good condition and repair as when first received, natural wear and tear, damage
by storm, fire, lightning earthquake or other casualty alone excepted. Approval
of Lessor is required prior to making repairs to the leased property.
In the event said property is destroyed or becomes untenantable due to
loss or damage, this lease shall terminate on the date of such destruction,
loss or damage and all liability of Lessee for rent shall cease. Lessee shall,
however, take necessary steps to preserve and protect said property from
further damage until Lessor has had a reasonable opportunity to retake
possession.
2
<PAGE> 3
Lessor assumes no responsibility for the security of the property of
Lessee, its agents, servants, employees, invitees, guest, customers, creditors,
depositors, or any other person or entity. It is expressly understood and
agreed that it shall be the sole responsibility of the Lessee to provide all
measures of security.
Lessee shall promptly pay when due all taxes and charges levied
against the leased property to the State of Georgia or any state, municipality,
or county therein or agency of subdivision thereof. In the event that Lessee
fails or refuses to pay said taxes and charges before the same become
delinquent, Lessor may, at its option, pay said taxes and charges, together
with any penalty levied against or interest charged upon the same, and may add
the amount so paid to the rent accrued or thereafter accruing.
The property is, and shall at all times, remain, personal property,
notwithstanding that it or any part of it may now be, or hereafter become, in
any manner attached to, or embedded in, or permanently resting on, real
property, or attached in any manner to what is permanent by whatever means.
Lessee shall procure and maintain insurance on the personal property
leased herein, as well as insurance on its contents, any improvements made by
Lessee, including fire and extended coverage, during the term of this Lease.
Lessee shall procure and maintain throughout the term of this lease a policy of
insurance at its sole cost and expense, insuring Lessee, Lessor and all other
person designated by Lessor against any and all liability for injury to or
death to a person, or persons, and for damage or destruction of property
occasioned by or arising out of or in connection with the use and occupancy of
the leased property or by the condition of the leased property, the limits of
with respect to injuries to or death of any one person, and in the amount of
not less than $1,000,000.00 in respect to any one accident or disaster, and in
an amount of not less than $150,000.00 with respect to property damaged or
destroyed, or with such other limits as may be required by Lessor, and to be
written by an insurance company or companies satisfactory to Lessor.
Lessee agrees to protect and save Lessor harmless from any and all
liability for any damage whatsoever to property of Lessee, its servants,
agents, employees, invitees or guest, or for injuries, including death, to any
of the servants, agents, employees, invitees or guests of Lessee, during the
term of this lease occasioned by or resulting from any carelessness, negligence
or improper conduct on the part of the Lessee. Lessee further agrees to
indemnify and save harmless Lessor against all claims for damage to
3
<PAGE> 4
person or property by reason of the use or occupancy of the leased property,
and all expenses incurred by Lessor because thereof, including attorney's fees
and court costs.
In the event of the Lessee, its successors or assigns should their
interest herein by levied upon or should the bank be closed or taken over by
the banking regulatory authority then in any of those events, the Lessor may
terminate this lease. The termination under this paragraph shall only be
effectuated with the approval of such banking authority and such authority
shall have the right to continue the lease at its election and under the same
terms and conditions set out herein.
All written notices shall be made by the party responsible to the
other party by the United States Mail. Postage prepaid, and shall be deemed to
have been made when deposited in the post office correctly addressed to the
respective part. The address of the Lessor shall be BANK & BUSINESS SYSTEMS,
INC., P.O. Box 5746, Rome, GA 30162-5746. The address of the lessee shall be:
ALBANY BANK AND TRUST, P.O. BOX 46, ALBANY, GA 31701, either party.
Time is of the essence of this agreement. The laws of the State of
Georgia shall govern the interpretation, validity, and enforcement of this
lease. This lease contains the entire agreement of the parties hereto and no
representations, inducements, promises, or agreements, oral or otherwise,
between the parties, not embodied herein, shall be of any force or effect. If
any portion, hereof shall be held invalid or unenforceable by any court of
competent jurisdiction, such holding shall not invalidate or render
unenforceable any other provision hereof.
This lease shall be binding upon the parties hereto, their successors
and assigns.
4
<PAGE> 5
IN WITNESS WHEREOF, the parties hereunto set their hands and seals on the day
and year first above written.
LESSOR:
BANK & BUSINESS SYSTEMS, INC.
BY: SIGNATURE ILLEGIBLE
------------------------------------
TITLE: PRESIDENT
---------------------------------
ATTEST: SIGNATURE ILLEGIBLE
--------------------------------
TITLE: VICE PRESIDENT
---------------------------------
LESSEE:
ALBANY BANK AND TRUST
BY: /S/ ROBERT E. LEE
------------------------------------
TITLE: PRESIDENT
---------------------------------
ATTEST:
--------------------------------
TITLE:
---------------------------------
5
<PAGE> 1
EXHIBIT 10.3
ADMENDMENT TO
AMENDED AND RESTATED
EMPLOYMENT AGREEMENT
This amendment (the "Amendment") to the Amended and Restated Employment
Agreement (the "Agreement"), dated as of the ____ day of _________, 1999, 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"), is made and entered into this ___ day of _________, 1999.
WHEREAS, the parties hereto desire to amend the Agreement for the
purpose of stating that stock options will be granted to the Employee by the
Company pursuant to the Company's Stock Incentive Plan and to the terms of any
Stock Option Award granted under such plan.
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 5% of the number of
shares of the Company's common stock which are sold in its
initial public offering. The incentive stock option will be
issued by the Employer pursuant to the Company's Stock
Incentive Plan and to the terms of the Stock Option Award
granted under such plan. 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> 2
IN WITNESS WHEREOF, the Employer and the Employee have executed
and delivered this Amendment to the Agreement as of the ___ day of ________,
1999.
THE BANK:
ALBANY BANK & TRUST, NATIONAL ASSOCIATION
By:
----------------------------------------
Printed Name:
------------------------------
Title:
-------------------------------------
THE COMPANY:
COMMUNITY CAPITAL BANCSHARES, INC.
By:
----------------------------------------
Charles M. Jones, III
Chairman and Chief Executive Officer
THE EMPLOYEE:
-------------------------------------------
ROBERT E. LEE
<PAGE> 1
EXHIBIT 10.4
SECOND
AMENDMENT TO
EMPLOYMENT AGREEMENT
This second amendment (the "Amendment") to the Employment Agreement
(the "Agreement"), dated as of the ____ day of _________, 1999, 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 ___ day of ________, 1999.
WHEREAS, the parties hereto desire to amend the Agreement for the
purpose of stating that stock options will be granted to the Employee by the
Company pursuant to the Company's Stock Incentive Plan and to the terms of any
Stock Option Award granted under such plan.
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 incentive stock option will be
issued by the Employer pursuant to the Company's Stock
Incentive Plan and to the terms of the Stock Option Award
granted under such plan. 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> 2
IN WITNESS WHEREOF, the Employer and the Employee have executed and
delivered this Second Amendment to the Agreement as of the ___ day of _________,
1999.
THE BANK:
ALBANY BANK & TRUST, NATIONAL ASSOCIATION
By:
---------------------------------------
Robert E. Lee
President and Chief Executive Officer
THE COMPANY:
COMMUNITY CAPITAL BANCSHARES, INC.
By:
---------------------------------------
Charles M. Jones, III
Chairman and Chief Executive Officer
THE EMPLOYEE:
------------------------------------------
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 _________________________
(the "Warrant Holder").
W I T N E S S E T H
WHEREAS, the 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, the 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, the Warrant Holder will provide 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 the Warrant Holder with the right to acquire the lesser of the same
number of shares, as the Warrant Holder 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 or 15,000 shares of the Corporation's Common Stock.
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 the 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
the issuance date or 90 days after the 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 the
Issue Date, an additional 20% of the Warrant shall vest. The vested
portion of the Warrant
<PAGE> 2
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, if
the Bank's capital falls below the minimum requirements as determined
by the primary federal regulator of the Corporation or the Bank (the
"Regulator"), the Regulator may direct the Corporation to require the
Warrant Holder to exercise or forfeit his or her Warrant. The
Corporation will notify the Warrant Holder within 45 days from the
date the Regulator notifies the Corporation in writing that the
Warrant Holder must exercise or forfeit this Warrant. The Corporation
will cancel the Warrant if not exercised within 21 days of the
Corporation's notification to the Warrant Holder. The Corporation
agrees to comply with any Regulator request that the Corporation
invoke its right to require the Warrant Holder to exercise or forfeit
his or her Warrant under the circumstances stated above.
3. Purchase Price. The price per share to be paid by the 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 the 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 the 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 the 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 the 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, the 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 the
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.
[The remainder of this page is intentionally left blank.]
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
FIRST AMENDMENT TO THE
COMMUNITY CAPITAL BANCSHARES, INC.
1998 STOCK INCENTIVE PLAN
THIS FIRST AMENDMENT is made on the _____ day of ____________, 1999, by
COMMUNITY CAPITAL BANCSHARES, INC., a corporation organized and existing under
the laws of the State of Georgia (hereinafter called the "Company").
W I T N E S S E T H:
WHEREAS, the Company maintains the Community Capital Bancshares, Inc.
1998 Stock Incentive Plan (the "Plan").
WHEREAS, the Company wishes to amend the Plan to comply with
recommendations made by the Office of the Comptroller of the Currency.
NOW, THEREFORE, the Company does hereby amend the Plan, effective as
of the original Plan adoption date, as follows:
1. By deleting clause (a) of Section 2.1 in its entirety and substituting
therefor the following:
"(a) provide incentives to officers, employees, directors and
organizers of the Company and Albany Bank & Trust, N.A. 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;".
2. By deleting the second sentence of the first paragraph of Section 2.3
in its entirety and substituting therefor the following:
"The Committee shall have full authority in its discretion to
determine the organizers, directors, officers or employees of the
Company and Albany Bank & Trust, N.A. to whom Stock Incentives shall
be granted and the terms and provisions of Stock Incentives, subject
to the Plan."
3. By deleting the first sentence of Section 2.4 in its entirety and
substituting therefor the following:
"Stock Incentives may be granted only to organizers, directors,
officers or employees of the Company or Albany Bank & Trust, N.A.;
provided, however, that an Incentive Stock Option may only be granted
to an employee of the Company or Albany Bank & Trust, N.A."
4. By deleting the existing header to Section 3.1(d) in its entirety and
substituting therefor the following new header to Section 3.1(d):
<PAGE> 2
"(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 three (3) months (the
"Change in Control Price"). For purposes of this Subsection, the
cashout of a Stock Incentive shall be determined as follows:"
5. By adding a new Subsection (g) to Section 3.1, as follows:
"(g) No Stock Incentive shall have a term that extends beyond
the tenth anniversary of the date the Stock Incentive was granted.
This Subsection (g) shall not apply to Stock Awards."
Except as specifically provided herein, the Plan shall remain in full
force and effect as prior to this First Amendment.
IN WITNESS WHEREOF, the Company has caused this First Amendment to be
executed as of the day and year first above written.
COMMUNITY CAPITAL BANCSHARES, INC.
By:
-------------------------------
Title:
----------------------------
Attest:
By:
---------------------------------
Title:
------------------------------
[CORPORATE SEAL]
<PAGE> 1
EXHIBIT 23.1
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANT
We hereby consent to the incorporation by reference of our report dated
January 27, 1999, 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."
/s/ Mauldin & Jenkins, LLC
----------------------------------
MAULDIN & JENKINS, LLC
Albany, Georgia
February 1, 1999
<TABLE> <S> <C>
<ARTICLE> 9
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS OF COMMUNITY CAPITAL BANCSHARES FOR THE PERIOD FROM AUGUST
19, 1998 (INCEPTION) TO DECEMBER 31, 1998 AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> OTHER
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> AUG-19-1998
<PERIOD-END> DEC-31-1998
<CASH> 5,220
<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> 428,455
<DEPOSITS> 0
<SHORT-TERM> 485,000
<LIABILITIES-OTHER> 13,354
<LONG-TERM> 25,801
0
0
<COMMON> 1
<OTHER-SE> (196,534)
<TOTAL-LIABILITIES-AND-EQUITY> 428,455
<INTEREST-LOAN> 0
<INTEREST-INVEST> 0
<INTEREST-OTHER> 0
<INTEREST-TOTAL> 0
<INTEREST-DEPOSIT> 0
<INTEREST-EXPENSE> 7,898
<INTEREST-INCOME-NET> (7,898)
<LOAN-LOSSES> 0
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 192,150
<INCOME-PRETAX> (200,048)
<INCOME-PRE-EXTRAORDINARY> (200,048)
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (200,048)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
<YIELD-ACTUAL> 0
<LOANS-NON> 0
<LOANS-PAST> 0
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 0
<CHARGE-OFFS> 0
<RECOVERIES> 0
<ALLOWANCE-CLOSE> 0
<ALLOWANCE-DOMESTIC> 0
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
