<PAGE> 1
As filed with the Securities and Exchange Commission on December 30, 1998
Registration No. 333-__________
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM SB-2
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
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FIRST CAPITAL BANK HOLDING CORPORATION
(Name of small business issuer in its charter)
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<S> <C> <C>
FLORIDA 6712 59-3532208
(State or other (Primary Standard Industrial (IRS Employer
jurisdiction of Classification Code Number) Identification Number)
incorporation or
organization)
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1875A SOUTH 14TH STREET
FERNANDINA BEACH, FLORIDA 32034
(904) 321-0400
(Address and telephone number
of principal executive offices)
---------------------------------
MICHAEL G. SANCHEZ
1875A SOUTH 14TH STREET
FERNANDINA BEACH, FLORIDA 32034
(904) 321-0400
(Name, address and telephone
number of agent for service)
---------------------------------
Copies Requested to:
ROBERT C. SCHWARTZ, ESQ.
SMITH, GAMBRELL & RUSSELL, LLP
SUITE 3100, PROMENADE II
1230 PEACHTREE STREET, N.E.
ATLANTA, GEORGIA 30309
(404) 815-3758
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after this Registration Statement becomes effective.
If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act, check
the following box. [X]
If this Form is filed to register additional securities for an offering pursuant
to Rule 462(b) under the Securities Act, 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 delivery of the prospectus is expected to be made pursuant to Rule 434, check
the following box. [ ]
CALCULATION OF REGISTRATION FEE
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<CAPTION>
============================= =============== ===================== ============================== ===================
Proposed maximum
Title of each class of Amount to be offering Proposed maximum aggregate Amount of
securities to be registered registered price per share(1) offering price registration fee
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Common Stock 1,000,000 $10.00 $10,000,000 $2,780.00
$.01 par value
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</TABLE>
(1) Estimated solely for the purpose of calculating the fee pursuant to Rule
457(a) under the Securities Act of 1933, as amended.
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 THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
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<PAGE> 2
1,000,000 SHARES
COMMON STOCK
FIRST CAPITAL BANK HOLDING CORPORATION
[LOGO]
A BANK HOLDING COMPANY FOR
FIRST NATIONAL BANK OF NASSAU COUNTY
FERNANDINA BEACH, FLORIDA
A PROPOSED NATIONAL BANK
This is an initial public offering of shares of common stock of First
Capital Bank Holding Corporation ("First Capital"). We are offering a minimum of
610,000 shares and a maximum of 1,000,000 shares at a public offering price of
$10.00 per share. The shares are being offered on a "best-efforts" basis through
Allen C. Ewing & Co. as sales agent for First Capital (the "Sales Agent") so
that we can raise the minimum amount of capital necessary to form a national
bank, First National Bank of Nassau County ("First National Bank"). Offering
shares on a "best-efforts basis" means that the Sales Agent has agreed to devote
appropriate time and energy to marketing and selling the shares, but does not
guarantee that all, or any, shares will be sold. The minimum subscription amount
is 100 shares per investor.
We will deposit all subscription funds in an interest-bearing escrow
account with The Bankers Bank until we have received subscriptions for 610,000
shares. If we have not received subscriptions for 610,000 shares by ________,
1999, we will terminate the offering and promptly return all subscription funds
to subscribers, with interest. We may, however, at our option, extend the
offering for three consecutive 90-day periods until ___________, 1999, without
giving notice to you. We may reject all or part of any subscription for any
reason. The Sales Agent will receive commissions of either $0.25 or $0.50 on any
shares sold in the offering, except that no commissions will be paid for the
330,000 shares to be sold to the organizers of First Capital.
There is currently no public market for our common stock. We expect to
list the common stock on the Nasdaq SmallCap Stock Market at some time in the
future, but we do not intend to apply for such listing at this time.
INVESTING IN OUR COMMON STOCK INVOLVES A HIGH DEGREE OF RISK. WE URGE
YOU TO READ CAREFULLY THE "RISK FACTORS" SECTION BEGINNING ON PAGE 4, ALONG WITH
THE REST OF THIS PROSPECTUS, BEFORE YOU MAKE YOUR INVESTMENT DECISION.
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<CAPTION>
Minimum Maximum
Per Share Offering Offering
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Price to Public $10.00 $6,100,000 $10,000,000
Maximum Sales Commissions(1) $ 0.50 $ 0(2) $ 335,000
Proceeds to First Capital $ 9.50 $6,100,000 $ 9,665,000
</TABLE>
(1) We will offer our common stock to three different groups of investors and
the amount of commissions to be paid to the Sales Agent will vary depending on
the amount of common stock purchased by each group. The Sales Agent will receive
commissions of either $0.25 or $0.50 on any shares not sold to the organizers.
The above figures assume that all shares other than those sold to the organizers
will be sold with a commission of $0.50. For additional information, see "Plan
of Distribution" beginning on page 13.
(2) Commissions will be paid out of funds received in the offering only to the
extent such funds exceed $6,100,000, which is the amount that will be received
should the minimum offering be sold.
- - 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.
- - THESE SECURITIES ARE NOT SAVINGS ACCOUNTS OR SAVINGS DEPOSITS AND ARE NOT
INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER
GOVERNMENTAL AGENCY.
ALLEN C. EWING & CO.
Sales Agent
The date of this Prospectus is _____________, 1999.
<PAGE> 3
PROSPECTUS SUMMARY
This summary highlights some information from this prospectus. It may
not contain all of the information that is important to you. To understand this
offering fully, you should read the entire prospectus carefully, including the
risk factors and the financial statements.
THE COMPANY
First Capital was formed to operate as a bank holding company. The
proceeds of this offering will be used to purchase all of the common stock to be
issued by First National Bank, a national bank to be formed under the laws of
the United States of America. The proceeds will also provide working capital for
First National Bank to commence its operations, to pay organizational expenses
and for other general corporate purposes. Neither First Capital nor First
National Bank has commenced business operations, and neither will do so until we
have completed the offering and have obtained the requisite approvals of certain
regulatory agencies. Our main office will be located in Fernandina Beach, Nassau
County, Florida. We anticipate that First National Bank will commence business
operations out of its temporary office in May of 1999, or as soon thereafter as
practicable. It will operate as a full-service commercial bank, except that it
will not have any trust powers. Our temporary mailing address is 1875A South
14th Street, Fernandina Beach, Florida 32034, and our temporary telephone number
is (904) 321-0400.
STRATEGY
Our business strategy is to create a customer-driven financial
institution focused on providing personalized service to clients and offering
products designed to meet their specific needs. We believe that First National
Bank can attract clients who prefer to conduct business with a locally-managed
institution that demonstrates a continuing, active interest in its clients'
business and personal objectives.
We believe First National Bank will be able to generate
competitively-priced loans and deposits in the Nassau County market and
anticipate that its staff will use data processing systems selected to deliver
high-quality products and provide responsive service to clients. We anticipate
that First National Bank will contract with third-party service providers to
provide customers with convenient electronic access to their accounts and other
competitive bank products. Such an arrangement should allow First National Bank
to use current technology while minimizing the costs of delivery. We expect this
approach to its operations to be appealing to clients who have been receiving
banking services in the depersonalized environment of larger competitors. See
"Business of First National Bank" beginning on page 18.
MARKET AREA
Fernandina Beach is located in Nassau County, Florida, which is within
the Jacksonville, Florida Metropolitan Statistical Area ("Jacksonville MSA").
This area includes the five counties of Duval, Nassau, St. Johns, Clay, and
Baker. Nassau County is an integral part of the Jacksonville MSA and has
participated in the growth experienced by the Jacksonville MSA in recent years.
First National Bank's Primary Service Area (the "PSA") will include the Florida
communities of Fernandina Beach, Amelia Island, O'Neil, and Yulee, as well as
St. Mary's, Georgia. Amelia Island is considered to be one of the foremost
residential and retirement areas in Florida, and the Ritz-Carlton Hotel and the
Amelia Island Plantation are among the premier resort hotels on Florida's East
Coast.
The population within a 15-mile radius of our prospective office grew
from 30,463 in 1980, according to the U.S. Census, to 69,542 in 1998 (estimated
by National Decision Systems), an increase of 132% during the period. The
current population within that radius is projected to increase to 80,000 by
2004. The estimated average household income within a 15-mile radius is $49,012
per year. As of June 30, 1998, total bank deposits in Nassau County were
approximately $369 million.
COMPETITION
The banking industry in First National Bank's PSA has experienced
significant consolidation in recent years principally as the result of the
liberalization of interstate banking and branching laws. Many of our area's
former community banks have been acquired by large regional financial
institutions headquartered outside our PSA. This consolidation has resulted in
repricing of products and services, elimination of local boards of directors,
adjustments
<PAGE> 4
in management and branch personnel, and a change in the level of personalized
customer service. Because of recent changes in interstate banking regulations,
we expect this type of consolidation to continue.
We believe that this competitive situation, when coupled with our
area's sable family income and growing economic business base, creates a
favorable opportunity for a new commercial bank. In addition, we believe that
our management experience and our dedicated local board of directors will
attract customers to our locally-managed community bank, as these attributes
offer the prospect of highly professional, personalized attention and timely
response to product and service requests due to an active interest in our
customers' business and personal financial needs. Once we open for business,
First National Bank will be the only independent commercial bank headquartered
in the PSA.
The Nassau County market is currently served by six banks and three
credit unions. The regional bank holding companies represented in Nassau County
are NationsBank Corporation, SouthTrust Bank Corporation, First Union
Corporation, Synovus Financial Corporation, and Compass Bancshares, Inc. There
are no existing locally-owned community banks in Nassau County.
THE OFFERING
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Common Stock Offered................................... 1,000,000 shares. A minimum of 610,000 shares are
required to be sold in the offering. See "Terms of the
Offering" beginning on page 10.
Common Stock to be
Outstanding after the Offering......................... Minimum--610,000 shares
Maximum--1,000,000 shares
Public Offering Price.................................. $10.00 per share
Plan of Distribution................................... Shares of the common stock of First Capital will be
marketed on a best-efforts, 610,000 share minimum
basis through Allen C. Ewing & Co., our sales agent,
which will receive no more than a 5% commission on
such sales. Each investor must purchase a minimum
of 100 shares. See "Terms of the Offering--Plan of
Distribution" at page 13.
Purchases by Organizers of First Capital............... 330,000 shares pursuant to this offering.
Offering Conditions.................................... All of the following conditions must be met for the
offering to be completed:
- at least $6,100,000 must be deposited with
the Escrow Agent
- the Federal Reserve Board must approve First
Capital's application to become a bank
holding company
- the organizers must receive preliminary
approval from the Office of the Comptroller
of the Currency to charter First National
Bank
- the Federal Deposit Insurance Corporation
must approve First National Bank's
application for deposit insurance
- First Capital must not have canceled this
offering before funds are withdrawn from the
subscription escrow account
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Escrow Arrangements.................................... Until these conditions have been met, we will place
all subscription funds in an escrow account. If these
offering conditions are not satisfied, all escrowed
funds will be returned promptly to the subscribers,
with interest.
If all of these offering conditions are met, the
escrow agent will release all funds to First Capital.
The funds of anyone subscribing after escrow is
broken will not be placed in escrow, but will be
immediately available to us. Once escrow is broken,
all subscribers may lose a portion of their
subscription funds if either First Capital or First
National Bank does not receive final regulatory
approvals. Prior to the release of the funds, the
escrow agent can invest subscription funds in certain
short-term investments upon instruction by the
President of First Capital. See "Terms of the
Offering" beginning on page 10.
Use of Proceeds........................................ The proceeds of the offering will be used:
- to purchase all First National Bank stock to
be issued and outstanding ($6 million), in
order to
- provide working capital to commence its
business operations (including officers' and
employees' salaries and construction of
permanent office facilities)
- to pay expenses in connection with the
formation of First Capital, the organization
of First National Bank, and this securities
offering, and for other corporate purposes
- Twenty-five percent of all funds received in
excess of $6 million will be reserved by
First Capital for growth of First National
Bank; the remainder will be reserved for
general corporate purposes at the holding
company level. See "Use of Proceeds"
beginning on page 14.
Risk Factors........................................... YOU SHOULD READ THE "RISK FACTORS" SECTION, BEGINNING
ON PAGE 4, AS WELL AS THE OTHER CAUTIONARY STATEMENTS
THROUGHOUT THE ENTIRE PROSPECTUS, TO ENSURE THAT YOU
UNDERSTAND THE RISKS ASSOCIATED WITH AN INVESTMENT IN
THE COMMON STOCK.
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RISK FACTORS
Before you invest in our common stock, you should be aware that there
are various risks, including but not limited to those described below. You
should consider carefully these risk factors together with all of the other
information included in this prospectus before you decide to purchase shares of
our common stock.
Some of the information in this prospectus may contain forward-looking
statements. Such statements can be identified by the use of forward-looking
words such as "may," "will," "expect," "anticipate," "estimate," "continue," or
other similar words. These statements discuss future expectations, contain
projections of results of operations or of financial condition or state other
"forward-looking" information. When considering such forward-looking statements,
you should keep in mind the risk factors and other cautionary statements in this
prospectus. The risk factors noted in this section and other factors noted
throughout this prospectus, including certain risks and uncertainties, could
cause our actual results to differ materially from those contained in any
forward-looking statement.
NEW ENTITIES--NO OPERATING HISTORY TO EVALUATE
Neither First Capital nor First National Bank has commenced any active
business operations other than matters related to our initial organization and
the raising of capital. First Capital was only recently formed, and First
National Bank will not receive final approval from the Office of the Comptroller
of the Currency (the "OCC") to begin operations until after this offering is
completed. Consequently, you will not have access to information that would be
available to purchasers of securities of a financial institution with a history
of operations. Since First National Bank is in organization, it has no operating
history on which to base any estimate of its future earning prospects.
POSSIBLE LOSS OF SUBSCRIPTION FUNDS IN THE EVENT FIRST NATIONAL BANK FAILS TO
COMMENCE OPERATIONS
Several approvals must be obtained and requirements met before First
National Bank can begin operations. Within eighteen months after preliminary
charter approval is obtained from the OCC, First National Bank must obtain final
approval to commence banking operations.
In the event that we have satisfied the offering conditions, broken
escrow and issued the shares of common stock, but final approval to commence
banking operations is not granted within eighteen months after receipt of
preliminary approval from the OCC, First National Bank would not be able to
commence banking operations and we would seek to dissolve and liquidate First
Capital. Upon liquidation, we would return to subscribers all subscription funds
with interest, less all expenses incurred by First Capital. In short, if you
invest in the common stock and First Capital breaks escrow and incurs start-up
expenses, but final regulatory approval is not granted, you may lose part of
your initial investment. See "Terms of the Offering--Failure of First National
Bank to Commence Operations" at page 12.
POTENTIAL DELAY IN COMMENCING OPERATIONS
Although we expect to receive all regulatory approvals and to commence
business in the second quarter of 1999, we can give no assurance as to when, if
at all, these events will occur. Any delay in commencing First National Bank's
operations will increase pre-opening expenses and postpone First National Bank's
realization of potential revenues. Such a delay will cause our accumulated
deficit to increase as a result of continuing operating expenses, such as
salaries and other administrative expenses, and our lack of revenue.
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RELIANCE ON KEY MANAGEMENT
Regulatory approval to establish and operate a national bank partially
depends upon the OCC's approval of that bank's proposed chief executive officer.
Generally, the chief executive officer of a start-up financial institution is
considered vital to the potential success of the new institution. In our charter
application to the OCC, we proposed Michael G. Sanchez as First National Bank's
chief executive officer. If Mr. Sanchez were to become unavailable for any
reason, final regulatory approval to commence banking operations would be
delayed until the OCC approved a suitable replacement. It is possible that we
would not be able to find a suitable replacement for Mr. Sanchez. See
"Management" beginning on page 29.
SIGNIFICANT INITIAL LOSSES EXPECTED
Initially, First Capital will merely act as the sole shareholder of
First National Bank. Thus, its profitability will depend upon the successful
operation of First National Bank. Typically, new banks are not profitable in the
first year of operation and sometimes are not profitable for several years.
First National Bank will incur substantial expenses in establishing itself as a
going concern, and we can offer no assurance that it will be profitable or that
future earnings, if any, will meet the levels of earnings prevailing in the
banking industry.
POTENTIAL DILUTION RESULTING FROM FUTURE CAPITAL NEEDS
We intend to capitalize First National Bank at $6,000,000. We will
reserve twenty-five percent of all funds received in excess of the $6,000,000
capitalization for the growth of First National Bank in compliance with OCC
regulations. We will hold the remainder of the funds for general corporate
purposes. Although we anticipate that the minimum amount of capital to be raised
by this offering (i.e., $6,100,000) will be sufficient to support First National
Bank's immediate capital needs, the Board of Directors of First Capital may,
from time to time, issue additional shares of the authorized common stock of
First Capital or other securities to obtain additional capital. Additional
shares of common stock may be offered on terms different from the terms of this
offering. The future issuance of these additional shares would dilute your
ownership interest in the Company.
COMPETITION IN NASSAU COUNTY
First National Bank will be a full service commercial bank in
Fernandina Beach, Nassau County, Florida, except that it will not have any trust
powers. The Nassau County market is served by six banks and three credit unions.
Competition among financial institutions in Nassau County is intense, and we
will compete with other state and national banks, savings and loan associations,
consumer finance companies, credit unions, money market mutual funds, and other
financial institutions which have far greater financial resources than those
available to us. As a start-up financial institution, First National Bank's
relatively small capital base may affect its ability to compete for loans due to
regulatory lending limitations. Its size may also impact its ability to compete
effectively with larger institutions in offering other services. The Riegle-
Neal Interstate Banking and Branching Efficiency Act of 1994 has further
increased competition by eliminating interstate branching barriers for certain
financial institutions and enabling financial institutions located outside
Florida to more easily access the market served by First National Bank. If First
National Bank is unable to compete for deposits, loans, and other banking
business effectively, there would likely be an adverse effect on its potential
for growth and profitability. See "Business of First National Bank--Market Area
and Competition" beginning on page 18.
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POTENTIAL ADVERSE EFFECT OF UNPREDICTABLE ECONOMIC CONDITIONS
Commercial banks and other financial institutions, including bank
holding companies, are affected by economic and political conditions, both
domestic and international, and by governmental monetary policies. Conditions
such as inflation, recession, unemployment, high interest rates, short money
supply, scarce natural resources, international disorders and other factors
beyond First National Bank's control may adversely affect its profitability. See
"Business of First National Bank--Monetary Policies" at page 24.
The success of First Capital will depend significantly upon general
economic conditions in Florida and Nassau County. A prolonged economic
dislocation or recession, whether in Florida generally or in Nassau County,
could cause First Capital's non-performing assets to increase, thereby causing
operating losses, impaired liquidity and the erosion of capital. Such an
economic dislocation or recession could result from a variety of causes,
including natural disasters such as hurricanes, floods or tornadoes, or a
prolonged downturn in various industries upon which the economies of Florida
and/or Nassau County depend. Future adverse changes in the Florida economy or
the local economy of Nassau County could have a material adverse effect on First
Capital's business, future prospects, financial condition or results of
operations.
INTEREST RATE SENSITIVITY
First National Bank will attempt to manage assets and liabilities to
provide a satisfactory, consistent level of profitability within the framework
of established cash, loan, investment, borrowing and capital policies. Its
asset/liability mix will likely be monitored on a daily basis. A report
reflecting interest-sensitive assets and interest-sensitive liabilities will be
prepared and presented monthly to First National Bank's Board of Directors. The
objective of this policy is to control interest-sensitive assets and liabilities
to minimize the impact of substantial movements in interest rates on First
National Bank's earnings. Nevertheless, rapidly rising or falling interest rates
may adversely affect its performance.
POTENTIAL LIMITATION ON GROWTH RESULTING FROM LOW LENDING LIMITS
At least during our first years of operation, First National Bank's
legally mandated lending limits will be lower than those of many of its
competitors because it will have less capital than many of its competitors.
Initially, First National Bank's legal lending limit will be $900,000. Our lower
lending limits may discourage potential borrowers who have lending needs that
exceed these 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.
POTENTIAL ADVERSE EFFECT OF GOVERNMENT REGULATION
First Capital and First National Bank will operate in a highly
regulated environment and will be subject to supervision and examination by
several regulatory agencies. As a bank holding company, First Capital will be
subject to regulations and supervision by the Federal Reserve Board. As a
national bank, the deposits of which will be federally-insured to the extent
permitted by law, First National Bank will be subject to regulation and
supervision primarily by the OCC and, to a lesser extent, by the Federal Deposit
Insurance Corporation (the "FDIC"). Additionally, certain Florida state laws,
primarily pertaining to maximum rates of interest that may be charged on loans,
will apply to First National Bank's operations. First Capital and First National
Bank are vulnerable to future legislation and government policy, including bank
deregulation and interstate expansion, which could adversely affect the banking
industry as a whole. In particular, First National Bank will be subject to
regulatory capital requirements. Although we believe that First National Bank's
initial capitalization will be sufficient to support its anticipated growth for
its first five years of operation, these regulatory capital requirements may
constrain future growth without the infusion of
6
<PAGE> 9
additional capital. These regulations are intended primarily for the protection
of depositors, not for the benefit of investors, and they restrict or limit the
manner in which First Capital and First National Bank may conduct business and
obtain financing. First Capital and First National Bank are also subject to
changes in federal and state law, regulations, governmental policies, income tax
laws and accounting principles. The effects of any potential changes cannot be
predicted, but they could adversely affect the future businesses and operations
of First Capital, First National Bank, or both. See "Supervision and Regulation"
beginning on page 24.
COMMON STOCK IS NOT AN INSURED BANK DEPOSIT
Although deposits at First National Bank will be insured by the FDIC to
the maximum amount permitted by law, shares of First Capital common stock are
not bank or deposit accounts. Thus, shares of First Capital common stock are not
insured by the FDIC or any other governmental agency.
ABILITY OF ORGANIZERS TO INFLUENCE CORPORATE ACTIONS
The organizers intend to purchase 330,000 shares or $3,300,000 in the
offering, which will equal approximately 54.1% of the 610,000 shares to be
outstanding upon completion of the minimum offering or 33.0% of the 1,000,000
shares to be outstanding should the maximum number of shares be sold. All
purchases by the organizers will be made at the same public offering price,
$10.00 per share, as that paid by other investors and will count towards the
achievement of the minimum offering. The organizers have represented to First
Capital that all purchases of common stock will be made for investment purposes
only and not with a view to resell such shares. See "Security Ownership of
Certain Beneficial Owners and Management" at page 34.
In addition, once the offering is complete, the organizers will be
granted warrants to purchase additional shares of common stock. Each warrant
will entitle the organizer to purchase one additional share of common stock. The
actual number of warrants granted will vary depending upon the number of shares
actually sold in the offering, with a cap on the ratio of warrants to shares
such that each organizer will receive no more than one warrant for every two
shares he or she purchased in the offering. Given the organizers' intent to
purchase 330,000 shares in the offering, they will receive up to a maximum of
165,000 warrants. Therefore, upon completion of the maximum offering and the
exercise of all of their warrants, the organizers will own 495,000 shares or
42.5% of the total shares outstanding. Assuming the completion of the minimum
offering, the organizers will receive 82,207 warrants. Therefore, upon
completion of the minimum offering and the exercise of all of their warrants,
the organizers will own 412,207 shares of common stock, or 59.5% of the total
number of shares outstanding.
As a result of such ownership, the organizers will be able to exercise
significant control over the management and affairs of First Capital and First
National Bank. In addition, the exercise of such warrants will dilute your
ownership interest in First Capital. See "Terms of the Offering--Purchases by
Organizers of First Capital" at page 12.
DILUTIVE EFFECT OF STOCK OPTION PLANS
We have established an Incentive Stock Option Plan which will allow us
to grant stock options to employees who are contributing significantly to the
management or operation of the business of First Capital or First National Bank.
Under this plan, we have reserved 100,000 shares of common stock for the
issuance of options under the Incentive Stock Option Plan, of which Michael G.
Sanchez, the President of First Capital and First National Bank, will receive
options to purchase 30,000 shares or 5% of the number of
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<PAGE> 10
shares sold in the offering, whichever is less. Any exercise of options will
dilute your ownership interest in First Capital. See "Management--Stock Option
Plans" at page 33.
DETERRENT EFFECT OF ANTI-TAKEOVER PROVISIONS
First Capital's Amended and Restated Articles of Incorporation (the
"Articles of Incorporation") contain provisions that could deter and make it
more difficult for a third party to bring about a merger, sale of control, or
similar transaction, even if a majority of shareholders vote in favor of such a
transaction. In addition, the Articles of Incorporation establish a classified
Board of Directors, which means that only one-third of the members of the Board
of Directors is elected each year and each director serves for a term of three
years. First Capital's Articles of Incorporation also authorize the Board of
Directors to issue a series of preferred stock without shareholder action. The
issuance of preferred stock by First Capital could discourage a third party from
attempting to acquire, or make it more difficult for a third party to acquire, a
controlling interest in First Capital, and could adversely affect the voting
power or other rights of holders of its common stock. These provisions also make
it more difficult for a third party to achieve a change in control of First
Capital through the acquisition of a large block of its common stock without
approval by the Board of Directors. As a result, you may be deprived of
opportunities to sell some or all of your shares at prices that represent a
premium over market prices. See "Description of Capital Stock" beginning on page
35.
POSSIBILITY THAT AN ACTIVE TRADING MARKET MAY NOT DEVELOP
The small size of this offering, among other things, makes unlikely the
development and maintenance of an active and liquid trading market for the
shares. You should only invest in the common stock if you have a long-term
investment intent. If an active market does not develop, you may not be able to
sell your shares promptly or perhaps at all. Even if you can sell your shares,
you may not be able to sell them at a price equal to or above the price you paid
for them. Although we expect to list the common stock on the Nasdaq SmallCap
Stock Market at some time in the future, at this time, we do not intend to apply
for such listing.
NO DIVIDENDS
We do not expect to pay dividends on the common stock for the
foreseeable future. Rather, we intend to retain future earnings of First
National Bank (if any) to enhance its capital structure to, among other things,
support future growth. Dividend distributions of national banks are restricted
by statute and regulation. Our future dividend policy will depend on First
National Bank's earnings, capital requirements, financial condition and other
factors we consider relevant. See "Dividend Policy" at page 16.
ARBITRARY DETERMINATION OF OFFERING PRICE
There is no established market for shares of the common stock, nor was
there an established market prior to this offering. The offering price was
arbitrarily determined by the organizers, and does not bear any relationship to
First Capital's assets, book value, net worth or any other recognized criteria
of value. In determining the offering price of the common stock, the OCC's
capital requirements for First National Bank and general market conditions for
the sale of such securities were considered. Should a market develop for the
common stock after this offering is complete, there is no guarantee that the
market price will be greater than or equal to the public offering price.
8
<PAGE> 11
ABSENCE OF PREEMPTIVE RIGHTS AND CUMULATIVE VOTING RIGHTS
As a shareholder of First Capital, you will not have any preemptive
rights with respect to the issuance of additional shares of common stock or any
other class of stock, which means that if we decide to issue additional shares
of common stock, you will not automatically be entitled to maintain your
percentage ownership by purchasing additional shares. In addition, you will not
have cumulative voting rights. This means that in the election of directors, you
will be entitled to cast only one vote per share for each director position to
be filled. Under a cumulative voting scheme, you would be entitled to cast a
total number of votes equal to the number of shares you own, multiplied by the
number of director positions being filled, and you could cast your votes for any
one director or divide the votes among several nominated directors. One effect
of cumulative voting is to prevent a majority shareholder from necessarily being
able to determine the make-up of the entire board of directors. As a minority
shareholder, you will not have the protection of cumulative voting.
RISKS ASSOCIATED WITH THE YEAR 2000
As the year 2000 approaches, an important business issue has emerged
regarding existing application software programs and operating systems. Many
existing application software products were designed to accommodate a two-digit
year. For example, "98" is stored on the system and represents 1998 and "00"
represents 1900. As a result, any computer programs or equipment that are date
dependent may, for example, recognize a date using "00" as the year 1900 rather
than the year 2000. This could result in a system failure or miscalculations
causing disruption of operations, a temporary inability to process transactions,
send invoices, or engage in similar normal business activity.
First Capital's and First National Bank's business will be highly
dependent on communications and information systems, including systems which
monitor deposit and lending accounts. We will rely on software and hardware
developed by independent third parties to provide these critical systems.
However, as we expect that any computer system or software purchased for First
National Bank's operations will be Year 2000 compliant, we do not anticipate
that First Capital or First National Bank will incur significant operating
expenses or be required to incur material costs to be Year 2000 compliant.
First National Bank will utilize a third-party vendor to provide its
primary banking applications, including core processing systems. We intend to
choose a third-party vendor that has modified or upgraded its computer
applications to ensure timely Year 2000 compliance. In addition, we intend to
implement a Year 2000 compliance program to review the Year 2000 issue that may
be faced by our other third-party vendors. Under the program, we will examine
the need for modifications or replacement of all non-Year 2000-compliant
software. We do not currently expect that the cost of our Year 2000 compliance
program will be material to our financial condition and expect that we will
satisfy the compliance program without material disruption of our operations. We
intend to evaluate the potential effect on our third-party vendors' data
processing systems of Year 2000 issues and to obtain a representation from such
vendors that their core processing systems will be fully Year 2000 compliant
before First National Bank opens for business. If we or our vendors do not
successfully and timely achieve Year 2000 compliance, First National Bank's
business, future prospects, financial condition or results of operations could
be materially adversely affected.
We and the OCC are concerned about the effect of Year 2000 issues on
First National Bank's loan customers. Certain customers may encounter
difficulties in continuing operations should they fail to address these issues.
This could cause them to default on their loan obligations to First National
Bank, reducing the value of its loan portfolio. Therefore, our customer
relationships will be monitored to ensure that our loan customers make any
needed systems modifications in a timely fashion. In addition, First National
Bank will review Year 2000 related issues as part of its normal underwriting
criteria and loan approval process, and
9
<PAGE> 12
will include Year 2000 compliance requirements and covenants requiring
compliance within its standard loan agreements. Nevertheless, there can be no
assurance that our customers will be Year 2000 compliant; therefore, the Year
2000 problem may still cause loan defaults, which would negatively impact First
Capital's earnings.
Although we will take extensive steps to address Year 2000 related
issues, there can be no assurance that we will identify and make all necessary
modifications or that we will not encounter unforeseen difficulties or costs.
Furthermore, in the event that First National Bank's internal systems or the
systems provided by its data processing vendor or other companies on which First
Capital's systems rely should fail, we cannot assure that there will be no
negative impact on our systems or operations. See "Business of First National
Bank--Year 2000" beginning on page 23.
TERMS OF THE OFFERING
GENERAL
First Capital is offering hereunder 1,000,000 shares of its common
stock for cash at a price of $10.00 per share. The common stock will be offered
on a "best-efforts" basis through the Sales Agent, which means that the Sales
Agent has agreed to devote appropriate time and energy to marketing and selling
the shares, but does not guarantee that all, or any, shares will be sold. Each
investor must purchase a minimum of 100 shares. The purchase price of $10.00 per
share must be paid in full upon execution and delivery of the Subscription
Agreement. All subscriptions tendered by investors are subject to acceptance by
the Board of Directors of First Capital, and First Capital reserves the absolute
and unqualified right to reject or reduce any subscription for any reason prior
to acceptance. Rejected subscriptions will be returned to the subscriber without
interest. An investor whose subscription is reduced may withdraw his or her
subscription within ten days after being notified of such reduction by First
Capital. First Capital reserves the right to cancel this offering at any time,
for any reason whatsoever, prior to the time it withdraws funds from the
subscription escrow account.
Prior to this offering there has been no established public market for
the shares of the common stock. Furthermore, there can be no assurance that an
established market for such stock will develop. The offering price has been
arbitrarily determined and is not a reflection of First Capital's book value,
net worth or any other such recognized criteria of value. In determining the
offering price of the common stock, the capital requirements of the OCC and
general market conditions for the sale of such securities were considered. There
can be no assurance that, if a market should develop for the common stock, the
post-offering market price will equal or exceed the offering price.
CONDITIONS OF THE OFFERING
This offering will expire at 5:00 p.m. Eastern Time, on _______, 1999
(90 days from the date of this Prospectus) (the "Expiration Date"), unless such
date is extended by First Capital. The Expiration Date may be extended by First
Capital without notice to subscribers for up to three consecutive 90-day
periods, or no later than __________, 1999. The offering is expressly
conditioned upon fulfillment of the following conditions (the "Offering
Conditions") on or prior to the Expiration Date, as extended. The Offering
Conditions, which may not be waived, are as follows:
(a) Not less than $6,100,000 must be deposited with the Escrow
Agent in the subscription escrow account;
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<PAGE> 13
(b) First Capital must receive approval from the Federal Reserve
Board of its application to become a bank holding company;
(c) The organizers must receive preliminary approval from the OCC
to charter the First National Bank;
(d) First National Bank must receive approval of its application
for deposit insurance from the FDIC; and
(e) First Capital must not have canceled this offering prior to
the time funds are withdrawn from the subscription escrow
account.
ESCROW OF SUBSCRIPTION FUNDS
Until the Offering Conditions above have been met, all subscription
funds and documents tendered by investors will be placed in a subscription
escrow account with The Bankers Bank (the "Escrow Agent"). Pursuant to the terms
of the Escrow Agreement (the form of which is attached to this prospectus as
Appendix A), if all of the Offering Conditions are met, First Capital may
certify such fact to the Escrow Agent and the Escrow Agent will release all
subscription funds, and any profits thereon, to First Capital. Subscription
funds are not insured by the FDIC or any other governmental agency.
Pending disposition of the subscription escrow account under the Escrow
Agreement, the Escrow Agent is authorized, upon instructions to be given by
Michael G. Sanchez, to invest subscription funds in interest-bearing bank
accounts, including saving accounts and bank money market accounts, short-term
direct obligations of the United States Government and/or in short-term FDIC
insured bank certificates of deposit, with maturities not to exceed 90 days.
First Capital will invest the subscription funds and any additional funds
obtained after breaking escrow and before it infuses capital into First National
Bank in a similar manner. The offering proceeds will be used to purchase capital
stock of First National Bank and to repay expenses incurred in the organization.
See "Use of Proceeds" beginning on page 14.
In the event the Offering Conditions are not met by the Expiration
Date, as extended, the Escrow Agent shall promptly return to the subscribers
their subscription funds, together with their allocated share of profits, if
any, earned on the investment of the subscription escrow account. Each
subscriber's proportionate share of subscription escrow account earnings shall
be that fraction (i) the numerator of which is the dollar amount of such
subscriber's tendered subscription multiplied by the number of days between the
date of acceptance of the investor's subscription and the date of the offering
termination, inclusive (the subscriber's "Time Subscription Factor"), and (ii)
the denominator of which is the aggregate Time Subscription Factors of all
investors depositing subscription funds in the subscription escrow account. The
expenses incurred by First Capital prior to the satisfaction of the Offering
Conditions will be borne by the organizers and not by the shareholders.
NO ASSURANCE CAN BE GIVEN THAT SUBSCRIPTION FUNDS CAN OR WILL BE
INVESTED AT THE HIGHEST RATE OF RETURN AVAILABLE OR THAT ANY PROFITS WILL BE
REALIZED FROM THE INVESTMENT OF SUBSCRIPTION FUNDS.
If all Offering Conditions are satisfied, and First Capital withdraws
the subscription funds from the subscription escrow account, all profits and
earnings on such account shall belong to First Capital. If the minimum offering
of 610,000 shares of common stock are sold before the expiration date, a minimum
closing will be held at First Capital's offices. At that minimum closing, the
funds will be released from the subscription escrow account to First Capital and
investors will become shareholders of First Capital.
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<PAGE> 14
The Bankers Bank, by accepting appointment as Escrow Agent under the
Escrow Agreement, in no way endorses the purchase of First Capital's common
stock.
FAILURE OF FIRST NATIONAL BANK TO COMMENCE OPERATIONS
The OCC requires that a new national bank open for business (i.e.,
obtain a charter) within 18 months after receipt of preliminary approval from
the OCC. The organizers anticipate that First National Bank will open for
business in May 1999. Because final approval of First National Bank's charter is
conditioned on First Capital's raising funds to capitalize First National Bank
at $6,000,000, First Capital expects to issue the shares of common stock before
it has obtained all final regulatory approvals for First National Bank. In the
event that First Capital issues the shares of common stock and the OCC does not
grant First National Bank final regulatory approval to commence banking
operations by 18 months after it receives preliminary approval from the OCC,
First Capital will solicit shareholder approval for its dissolution and
liquidation, in which event, First Capital will promptly return to subscribers
all subscription funds and interest earned thereon, less all expenses incurred
by us, including the expenses of the offering and the organizational and
pre-opening expenses of First Capital and First National Bank. Therefore, if
either First Capital or First National Bank does not receive final regulatory
approvals, subscribers whose funds were originally placed in escrow and
subscribers whose funds were immediately available to First Capital may lose a
portion of their subscription funds. It is possible that this return may be
further reduced by amounts paid to satisfy claims of creditors, as discussed in
the following paragraph.
Once First Capital issues the shares of common stock offered hereby,
the offering proceeds may be considered part of general corporate funds and thus
may be subject to the claims of creditors of First Capital, including claims
against First Capital that may arise out of actions of its officers, directors,
or employees. It is possible, therefore, that one or more creditors may seek to
attach the proceeds of the offering before First National Bank begins banking
operations. If such an attachment occurred and it became necessary to pay the
subscription funds to shareholders because of failure to obtain all necessary
regulatory approvals, the payment process might be delayed, and if it became
necessary to pay creditors from the subscription funds, the payment to
shareholders might be further reduced.
PURCHASES BY ORGANIZERS OF FIRST CAPITAL
The organizers will purchase 330,000 shares of the common stock
pursuant to this offering, which will constitute approximately 54.1% of the
610,000 shares to be outstanding upon completion of the minimum offering, or
33.0% of the 1,000,000 shares to be outstanding should the maximum number of
shares be sold. All purchases of shares by the organizers will be made at the
same public offering price, $10.00 per share, as that paid by other investors
and will count toward the achievement of the minimum offering. The organizers
have represented to First Capital that any such purchases will be made for
investment purposes only and not with a view to resell such shares. See
"Security Ownership of Certain Beneficial Owners and Management" beginning on
page 34.
In addition, in consideration of their efforts in organizing First
Capital and First National Bank, the organizers will be granted warrants to
purchase additional shares of the common stock once the offering is complete.
Each warrant will entitle the organizer to purchase one additional share of
common stock. The actual number of warrants granted will vary depending on the
number of shares actually sold in the offering, with the ratio of warrants to
shares capped such that each organizer may receive no more than one warrant for
every two shares such organizer purchases in this offering. Given the intent of
the organizers to purchase 330,000 shares in the offering, the organizers will
be granted 165,000 warrants upon completion of the maximum offering. Upon
completion of the minimum offering, the organizers will receive warrants to
purchase 82,207 shares of common stock. Any warrants granted will become
exercisable in equal amounts
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<PAGE> 15
beginning on the date First National Bank commences business and on each of the
four succeeding anniversaries of that date. All warrants granted will expire
five years after the date of grant. An organizer exercising his or her warrants
will pay the public offering price of $10.00 per share. The warrants will
provide the organizers with the opportunity to profit from any future increase
in the market value of the common stock or any increase in the net worth of
First National Bank without presently paying for the warrant shares initially.
The exercise of such warrants will dilute your ownership interest in First
Capital. See "Risk Factors--Ability of Organizers to Influence Corporate
Actions" at page 7.
PLAN OF DISTRIBUTION
Shares of the common stock of First Capital will be marketed on a
"best-efforts," 610,000 share minimum basis through Allen C. Ewing & Co. (the
"Sales Agent"), 50 North Laura Street, Jacksonville, Florida 32202
(904-354-5573). The Sales Agent may, however, engage other broker-dealers to
participate in the selling effort.
The common stock will be offered directly to the public at the public
offering price set forth on the cover page of this prospectus. The common stock
will be offered to three different groups of investors--organizers, the Nassau
County community, and the general public--and the amount of commissions to be
paid to the Sales Agent will vary depending upon the amount of common stock
purchased by each group. The Sales Agent will receive no commissions for the
330,000 shares of common stock to be purchased by the organizers. The Sales
Agent will be paid a commission of 2.5% on all shares of common stock sold in
the community offering, and will be paid a commission of 5.0% on all of the
shares of common stock sold in the public offering. Commissions will be paid
from funds received in this offering only to the extent that such funds exceed
$6,100,000. In the event that the Sales Agent decides to form a selling group by
enlisting additional broker-dealers, it may reallow to such additional
registered broker-dealer up to $.25 per share of the commission to be paid to
the Sales Agent for shares sold in the public offering. The Sales Agent has
reserved the right to allocate shares of common stock among the three investor
groups as needed. The Sales Agent will be reimbursed for legal fees and
out-of-pocket expenses it incurs in the offering.
Subject to certain limitations, First Capital and the Sales Agent have
agreed to indemnify each other against certain liabilities, including certain
civil liabilities, under the Securities Act of 1933, as amended (the "Securities
Act"), or to contribute to payments that First Capital or the Sales Agent may be
required to make in respect thereof. The Sales Agent has informed First Capital
that it does not intend to exercise its discretionary authority in order to
purchase shares of common stock for any account over which it holds
discretionary authority.
In the event that the Offering Conditions have not been satisfied by
the Expiration Date, First Capital will terminate this offering and promptly
return subscription funds to the subscribers, together with their allocated
share of profits, if any, earned on the investment of the subscription escrow
account as described above. See "Terms of the Offering--Escrow of Subscription
Funds" at page 11.
As soon as practicable, but no more than ten business days after First
Capital receives a subscription, First Capital will accept or reject the
subscription. Subscriptions not rejected by First Capital within this ten day
period shall be deemed accepted. Once a subscription is accepted by First
Capital, it cannot be withdrawn by the subscriber. Payment from any subscriber
for shares in excess of the number of shares allocated to such subscriber will
be refunded by mail, without interest, within ten days of the date of rejection.
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<PAGE> 16
Certificates representing shares of common stock of First Capital, duly
authorized and fully paid, will be issued as soon as practicable after
subscription funds are released to First Capital from the subscription escrow
account.
Subscriptions to purchase shares of common stock can be made by
completing the subscription agreement attached to this prospectus and delivering
it to First Capital's offices at 1875A South 14th Street, Fernandina Beach,
Florida 32034, or mailing the same in the enclosed self-addressed, stamped
envelope. Full payment of the purchase price must accompany the subscription.
First Capital reserves the right to disregard any subscription which is not
fully paid when First Capital receives it. No subscription agreement is binding
until accepted by First Capital, and First Capital may refuse to accept any
subscription for shares, in whole or in part, for any reason whatsoever. After a
subscription is accepted and proper payment received, First Capital shall not
cancel it unless all accepted subscriptions are canceled. Unless otherwise
agreed by First Capital, all subscription amounts must be paid in United States
currency by check, bank draft or money order payable to "The Bankers Bank,
Escrow Agent for First Capital Bank Holding Corporation." A subscription will be
accepted in writing by First Capital in the Form of Acceptance attached to this
prospectus.
USE OF PROCEEDS
The gross proceeds from the sale of shares of common stock offered by
First Capital are estimated to be $6,100,000 assuming the sale of a minimum of
610,000 shares, and $10,000,000 assuming the sale of a maximum of 1,000,000
shares. However, if 610,000 shares are not sold prior to the expiration date as
defined above, then First Capital will terminate the offering and promptly
return all funds received from subscribers. See "Terms of the Offering"
beginning on page 10.
The estimated expenses of this offering are as follows:
<TABLE>
<CAPTION>
Minimum Maximum
Offering Offering
-------- --------
<S> <C> <C>
Registration fees, including blue
sky fees and expenses .......... $ 10,280 $ 10,280
Legal fees and expenses ......... 35,000 35,000
Commissions to the Sales Agent .. 0* 335,000
Accounting fees and expenses .... 3,500 3,500
Printing and engraving expenses . 5,000 5,000
Advertising ..................... 5,500 5,500
Mailing and distribution ........ 960 960
Entertainment ................... 3,500 3,500
Miscellaneous ................... 5,000 5,000
Total Expenses ............. $ 68,740 $ 403,740
========== ==========
Net proceeds .................... $6,031,260 $9,596,260
</TABLE>
- ----------
* Commissions will be paid out of funds received in the offering only to the
extent such funds exceed $6,100,000, which is the amount expected to be received
in the minimum offering.
The net proceeds of this offering as well as any interest earned on the
subscription funds will be used by First Capital, after breaking escrow,
primarily for the purchase of all of the issued and outstanding capital
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<PAGE> 17
stock of First National Bank. First National Bank will, in turn, use the funds
as capital to commence its business operations (including officers' and
employees' salaries and construction of its permanent facilities) and to repay
expenses incurred in the organization of First Capital and First National Bank.
As indicated in the charter application of First National Bank filed by
First Capital with the OCC, First Capital intends to capitalize First National
Bank at $6,000,000. Twenty-five percent of all funds received in excess of the
$6,000,000 required to capitalize First National Bank will be held by First
Capital to be available for the future growth of First National Bank in
compliance with OCC regulations. The remainder of the funds will be held by
First Capital to be reserved for general corporate purposes.
A portion of the net proceeds of this offering beyond the minimum will
be retained by First Capital for the purpose of funding any required additions
to the capital of First National Bank. Since national banks are regulated with
respect to the ratio that their total assets may bear to their total capital, if
First National Bank experiences greater growth than anticipated, it may require
the infusion of additional capital to support that growth. Management
anticipates, however, that the proceeds of this offering will be sufficient to
support First National Bank's immediate capital needs and will seek, if
necessary, long- and short-term debt financing to support any additional needs;
however, management can give no assurance that such financing, if needed, will
be available or if available will be on terms acceptable to management.
The following is a schedule of the estimated use by First National Bank
of the proceeds from the sale of the common stock of First Capital, including
its estimated operating expenses for its first 12 months of operation.
<TABLE>
<S> <C>
Organizational and pre-opening expenses of First National Bank including
salaries, legal and accounting fees(1) ......................... $ 500,000 *
Land purchase and construction of permanent bank facility(2) ........... 1,115,000 +
Lease and set-up costs of temporary bank facility and
occupancy expenses(3) .......................................... 174,000 *
Salaries and benefits(4) ............................................... 648,000 +
General and administrative expenses, composed primarily of
data processing, marketing and advertising, telephone
and casualty and deposit insurance(5) .......................... 228,000 +
Furniture, fixtures and equipment(6) ................................... 600,000 *
Working capital ........................................................ 2,735,000
$6,000,000
==========
</TABLE>
- ----------
* Represents expenses which will be incurred prior to commencement of
operations of First National Bank.
+ Represents operating expenses which will be incurred during First
National Bank's first 12 months of operations.
(1) These expenses will be incurred prior to the commencement of operations
of First National Bank and are being funded from a line of credit in
the principal amount of $700,000 that First Capital has obtained from
The Bankers Bank, Atlanta, Georgia.
(2) Costs for construction of First National Bank's permanent facility are
based on estimates from an architect. The land upon which the facility
will be located has been purchased for $265,000 from Bosco Enterprises.
See "Certain Transactions" at page 35. The construction is expected to
begin in January 1999 and be completed in August 1999. See "Business of
First Capital -- Premises" at page 17.
(3) Upon final approval from the OCC, First National Bank will open in a
temporary facility until such time as a permanent facility can be
constructed.
(4) Salaries and benefits are based on management's estimates of the number
and types of employees which will be required during the first 12
months of operations of First National Bank. It is presently
anticipated that First National Bank will employ 16 persons during such
12 months, including 5 officers.
(5) These expenses are based on the experiences of similar size banks in
the region and on management's previous banking experience.
(6) Furniture and equipment cost is based on the organizers' estimates and
upon information from suppliers of bank equipment of the costs required
to furnish and equip First National Bank for the expected level of
operations.
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<PAGE> 18
The expenses described above are estimates only and assume First National Bank
will commence operations in May 1999, or as soon thereafter as practicable.
Actual expenses may exceed these amounts. A portion of these expenses will be
offset by revenues generated by First National Bank during its first year of
operation.
DIVIDEND POLICY
First Capital and First National Bank are both start-up operations. The
Board of Directors of First Capital intends to reinvest earnings for such period
of time as is necessary to ensure the success of the operations of First
National Bank. There are no current plans to initiate payment of cash dividends,
and future dividend policy will depend on First National Bank's earnings,
capital requirements, financial condition and other factors considered relevant
by the Board of Directors of First Capital.
First National Bank will be restricted in its ability to pay dividends
under the national banking laws and by regulations of the OCC. Pursuant to 12
U.S.C. ss. 56, a national bank may not pay dividends from its capital. In
addition, no dividends may be made in an amount greater than a national bank's
undivided profits, subject to other applicable provisions of law. Payments of
dividends out of undivided profits is further limited by 12 U.S.C. ss. 60(a),
which prohibits a bank from declaring a dividend on its shares of common stock
until its surplus equals its stated capital, unless there has been transferred
to surplus not less than 1/10 of First National Bank's net income of the
preceding two consecutive half year periods (in the case of an annual dividend).
Pursuant to 12 U.S.C. ss. 60(b), the approval of the OCC is required if the
total of all dividends declared by First National Bank in any calendar year
exceeds the total of its net income for that year combined with its retained net
income for the preceding two years, less any required transfers to surplus or a
fund for the retirement of any preferred stock.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
First Capital is still in the development stage, and will remain in
that stage until the offering of the Common Stock is complete. First Capital
initially funded its start-up and organization costs through advances from the
organizers in the amount of $75,000. First Capital subsequently obtained a line
of credit in the amount of $700,000 from The Bankers Bank, a portion of the
proceeds of which were used to repay, without interest, the $75,000 advanced by
the organizers. A portion of the proceeds of this offering will be used to repay
the line of credit, to the extent that such repayment is reasonable and not
detrimental to the operations of First Capital, and to the extent that such
repayment is allowed by the OCC and other appropriate regulatory authorities.
See "Use of Proceeds" beginning on page 14. Total organizational costs as of
October 31, 1998, amounted to approximately $68,935. These costs include
consultant fees ($51,535) and regulatory application fees ($17,400).
Subscription funds during the offering contemplated herein will be
placed in an escrow account and invested in bank accounts, including savings
accounts and bank money market accounts, in direct obligations of the United
States Government, and in short-term insured bank certificates of deposit with
maturities not to exceed 90 days.
In the opinion of First Capital, the minimum net proceeds of $6,000,000
from the minimum offering will be adequate capital to support the growth of both
First Capital and First National Bank for their first five years of operation.
It is not anticipated that First Capital will need to raise additional funds to
meet expenditures required to operate the business of First Capital and First
National Bank over the next 12
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<PAGE> 19
months. All anticipated material expenditures for such period have been
identified and provided for out of the proceeds of this offering. See "Use of
Proceeds" beginning on page 14.
BUSINESS OF FIRST CAPITAL
GENERAL
First Capital was incorporated under the laws of the State of Florida
on July 29, 1998 for the purpose of organizing First National Bank and
purchasing 100% of the outstanding capital stock of First National Bank, which
will conduct a general banking business in Fernandina Beach, Florida. The
organizers expect to receive preliminary approval from the OCC to charter First
National Bank on or before January 30, 1999. First Capital also expects First
National Bank to receive approval of its application for deposit insurance from
the FDIC on or before January 30, 1999. Upon receipt of preliminary approval
from the OCC, First Capital will file an application with the Federal Reserve
Board to become a bank holding company. First Capital has been organized as a
mechanism to enhance First National Bank's ability to serve its future
customers' requirements for financial services. The holding company structure
will provide flexibility for expansion of First Capital's banking business
through acquisition of other financial institutions and provision of additional
banking-related services which the traditional commercial bank may not provide
under present laws. For example, banking regulations require that First National
Bank maintain a minimum ratio of capital to assets. In the event that First
National Bank's growth is such that this minimum ratio is not maintained, First
Capital may borrow funds, subject to the capital adequacy guidelines of the
Federal Reserve Board, and contribute them to the capital of First National Bank
and otherwise raise capital in a manner which is unavailable to First National
Bank under existing banking regulations.
First Capital has no present plans to acquire any operating
subsidiaries other than First National Bank; however, it is expected that First
Capital may make additional acquisitions in the event that First National Bank
becomes profitable and such acquisitions are deemed to be in the best interests
of First Capital and its shareholders. Such acquisitions, if any, will be
subject to certain regulatory approvals and requirements. See "Supervision and
Regulation" beginning on page 24.
PREMISES
On June 16, 1998, First Capital entered into a contract to acquire 1.28
acres of land located at 1891 South 14th Street at its intersection with Island
Walk Way in Fernandina Beach, Nassau County, Florida 32034, for a total purchase
price of $265,000. The property was purchased from Bosco Enterprises. One of the
principals of Bosco Enterprises is the husband of one of the organizers, Lorie
L. McCarroll. The organizers have received an appraisal from an independent
third party appraising the value of the property at $265,000. First Capital
intends to construct its headquarters building on this property. The building
will contain approximately 6,500 square feet of finished space at a cost of
approximately $800,000. The building is expected to contain one vault, an
automated teller machine, seven offices, two loan closing rooms, five teller
stations, four drive-in windows and a loan operations area.
Until construction of the permanent bank building is complete, First
Capital and First National Bank will temporarily operate out of offices located
at 1875A South 14th Street, Fernandina Beach, Florida 32034. First Capital will
lease the approximately 1,584 square foot facility pursuant to an 11-month lease
(extendable for any period upon written agreement of the parties) at the monthly
rental of $1,200 ($9.09 per square foot). It is estimated that First Capital and
First National Bank will operate out of this temporary facility for
approximately twelve months until construction of the headquarters building is
complete. First Capital is leasing its temporary offices from Miller, Lee &
McCarroll, Inc., of which David F. Miller and
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Lorie L. McCarroll, two of the organizers, are principals. For additional
information, see "Certain Transactions" at page 35.
In addition to its headquarters facility, First National Bank plans to
open a small branch office facility, at a location to be determined, in the
third year of its operations. Management expects that the land for this branch
facility will be acquired for a purchase price of approximately $150,000 and the
building will be constructed for approximately $650,000. This facility is
expected to contain a safe, two offices, four teller stations, and two drive-in
windows. First Capital does not anticipate any material expenditures in
connection with its compliance with environmental laws.
The mailing address of First Capital's temporary office is 1875A South
14th Street, Fernandina Beach, Florida 32034, and its temporary telephone number
is (904) 321-0400.
BUSINESS OF FIRST NATIONAL BANK
GENERAL
The organizers expect preliminary approval from the OCC to charter
First National Bank on or before January 30, 1999. The organizers expect
approval of First National Bank's application for deposit insurance from the
FDIC on or before January 30, 1999.
First National Bank anticipates that it will commence business
operations in May 1999 in a temporary facility located at 1875A South 14th
Street, Fernandina Beach, Florida 32034. First National Bank plans to be a full
service commercial bank, without trust powers. First National Bank will offer a
full range of interest bearing and non-interest bearing accounts, including
commercial and retail checking accounts, money market accounts, individual
retirement accounts, regular interest bearing statement savings accounts,
certificates of deposit, commercial loans, real estate loans, home equity loans
and consumer/installment loans. In addition, First National Bank will provide
such consumer services as U.S. Savings Bonds, travelers checks, cashiers checks,
safe deposit boxes, bank by mail services, direct deposit, credit cards and
automatic teller services.
The philosophy of management of First National Bank with respect to its
initial operations will emphasize prompt and responsive personal service to
members of the business and professional community of Nassau County, Florida, in
order to attract customers and acquire market share now controlled by other
financial institutions in First National Bank's market area. First National
Bank's prime location and range of banking services, as well as its emphasis on
personal attention and service, prompt decision making and consistency in
banking personnel, will be major tools in First National Bank's efforts to
capture such market share. In addition, First National Bank's executive officers
have substantial banking experience, which will be an asset in providing both
products and services designed to meet the needs of First National Bank's
customer base. Several of the organizers are active members of the business
community in and around the Fernandina Beach area, and continued active
community involvement will provide an opportunity to promote First National Bank
and its products and services. The organizers intend to utilize target marketing
and superior selling efforts in order to build a distinct institutional image
for First National Bank and to capture a customer base.
MARKET AREA AND COMPETITION
The primary market area for the proposed Bank in Fernandina Beach,
Nassau County, Florida, is within the Jacksonville Metropolitan Statistical Area
("Jacksonville MSA"), which includes the five
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counties of Duval, Nassau, St. Johns, Clay, and Baker. Nassau County is an
integral part of the Jacksonville metropolitan area and has participated in the
growth experienced by the Jacksonville MSA in recent years. The Jacksonville
market has a current population in excess of 1,000,000 people and is projected
to grow to a population of 1,200,000 by 2010. Fernandina Beach's strategic
location within the Jacksonville MSA, along with its coastal setting, makes it a
location of choice for many residents taking advantage of the resources and job
opportunities in the metropolitan market of Jacksonville.
The five-county area has a lower unemployment rate than the State of
Florida which, in turn, is lower than the national average. The climate and
geography of the area have encouraged strong population and economic growth and
the new NFL football team, the Jacksonville Jaguars, has given the five-county
area a higher profile regionally and nationally.
First National Bank's primary service area (the "PSA") represents a
geographic area which includes the communities of Amelia Island, Fernandina
Beach, O'Neil, and Yulee, Florida, and St. Mary's, Georgia. The boundaries of
the PSA are the St. Mary's River and the State of Georgia to the North, the
Atlantic Ocean to the East, Duval County to the South, and Baker County to the
West.
Nassau County has many positive attributes that contribute to the
area's business growth and stability. These include easy access to two
interstates, an extensive rail service network, Jacksonville International
Airport, and the Port of Fernandina, which is the deepest natural port on the
southeastern coast of the United States. The paper, timber, and resort
industries form the core of the area's economy and, as an indication of recent
growth, commercial building permits have increased 237% over the past ten years.
Amelia Island is considered to be one of the foremost residential and retirement
areas in Florida as it attracts affluent retirees and second homeowners from the
Eastern states of the country. The Ritz-Carlton Hotel with its 300 rooms and the
Amelia Island Plantation are among the premier resort hotels on Florida's East
Coast.
The 1990 census estimate of the population within a fifteen-mile radius
of the proposed Bank site was approximately 51,000, a 67.5% increase over the
1980 population. The population within the fifteen-mile radius is approximately
70,000 currently, projected to be approximately 80,000 by 2004. From 1988 to
1998, residential building permits increased from 609 to 996, an increase of
63.5%, with much of that growth occurring in the last five years. The estimated
average family income in Nassau County is $55,294 within a five-mile radius of
the proposed Bank site and $49,102 within a fifteen-mile radius. Median home
values within a five-mile radius are $97,386, and $88,245 within a fifteen-mile
radius.
First National Bank will target its products and services to meet the
needs of the area's customer base and will be a full-service bank, initially
focusing on providing small- to middle-market business loans, residential
mortgages, and consumer loans to these customers. The organizers estimate that
more than 75% of First National Bank's proposed customer base will be businesses
and/or residents located in the PSA. The PSA represents a diverse market with a
growing population and economy.
Competition in First National Bank's PSA is intense. As of June 30,
1998, total bank deposits in Nassau County were approximately $369 million; the
market is served by six banks and three credit unions. The regional bank holding
companies represented in Nassau County are NationsBank Corporation with a market
share of 28.6% total deposits, First Union Corporation with 28.5%, SouthTrust
Bank Corporation with 11.8%, Synovus Financial Corporation with 14.0%, and
Compass Bancshares, Inc. with 7.2%.
There are no existing locally-owned community banks in Nassau County, as
SouthTrust and Synovus recently entered the Nassau County market via the
acquisition of the two remaining independent community banks. Therefore, upon
opening for business in 1999, First National Bank will be the sole independent
commercial bank headquartered in the PSA.
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Financial institutions primarily compete with one another for deposits.
In turn, a bank's deposit base directly affects such bank's loan activities and
general growth. Primary methods of competition include interest rates on
deposits and loans, service charges on deposit accounts and the designing of
unique financial services products. First National Bank will be competing with
financial institutions which have much greater financial resources than it will
have, and which may be able to offer more and unique services and possibly
better terms to their customers. However, the organizers of First National Bank
believe that it will be able to attract sufficient deposits to enable it to
compete effectively with other area financial institutions. The organizers
believe that First National Bank will have the advantage of being locally owned
and managed, enabling it to benefit from the high visibility and excellent
business contacts of its organizers.
First National Bank will be in competition with existing area financial
institutions other than commercial banks and savings and loan associations,
including insurance companies, consumer finance companies, brokerage houses,
credit unions and other business entities which have recently been invading the
traditional banking markets. Due to the growth of First National Bank's PSA, it
is anticipated that additional competition will continue to be created by new
entrants to the market.
DEPOSITS
First National Bank will offer a full range of interest-bearing and
non-interest-bearing accounts, including commercial and retail checking
accounts, money market accounts, individual retirement accounts, regular
interest-bearing statement savings accounts and certificates of deposit with
fixed and variable rates and a range of maturity date options. The sources of
deposits will be residents, businesses and employees of businesses within First
National Bank's market area, obtained through the personal solicitation of its
officers and directors, direct mail solicitation, and advertisements published
in the local media. First National Bank will pay competitive interest rates on
time and savings deposits up to the maximum permitted by law or regulation. In
addition, First National Bank will implement a service charge fee schedule
competitive with other financial institutions in its market area, covering such
matters as maintenance fees on checking accounts, per item processing fees on
checking accounts, returned check charges and the like.
LOAN PORTFOLIO
First National Bank will engage in a full complement of lending
activities, including commercial, consumer/installment (including credit cards)
and real estate loans. Initially, First National Bank will have a legal lending
limit for unsecured loans of up to $900,000 to any one person. See "Supervision
and Regulation" beginning on page 24.
Commercial and Industrial Loans
Commercial lending will be directed principally towards businesses
whose demands for funds fall within First National Bank's legal lending limits
and who are potential deposit customers of First National Bank. This category of
loans includes loans made to individual, partnership or corporate borrowers, and
obtained for a variety of business purposes. Particular emphasis will be placed
on loans to small- and medium-sized businesses and professionals. Risks of these
types of loans depend on the general business conditions of the local economy
and the local business borrower's ability to sell its products and services in
order to generate sufficient business profits to repay First National Bank under
the agreed upon terms and conditions. The value of the collateral held by First
National Bank as a measure of safety against loss is most volatile in this loan
category.
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Consumer Loans
First National Bank's consumer loans will consist primarily of
installment loans to individuals for personal, family and household purposes,
including automobile loans to individuals and pre-approved lines of credit,
separate from and including credit cards. This category of loans will also
include lines of credit and term loans secured by second mortgages on the
residences of borrowers for a variety of purposes including home improvements,
education, and other personal expenditures. Loss or decline of income by the
borrower due to layoffs, divorce or unexpected medical expenses represent
unplanned occurrences that may represent risk of default to First National Bank.
In the event of default, a shortfall in the value of the collateral may pose a
loss to First National Bank in this loan category.
Real Estate Loans
First National Bank's real estate loans will consist of residential
first and second mortgage loans, residential construction loans, and, to a
limited degree, commercial real estate loans. These loans will be made
consistent with First National Bank's appraisal policy and real estate lending
policy which will detail maximum loan-to-value ratios and maturities. These
loan-to-value ratios will be sufficient to compensate for fluctuations in the
real estate market to minimize the risk of loss to First National Bank.
Residential Mortgage
These loans will be granted to qualified individuals for the purchase
of existing single family residences in First National Bank's market area. Both
fixed and variable rate loans will be offered with competitive terms and fees
consistent with national mortgage investor guidelines. These loans will be made
consistent with First National Bank's appraisal policy and real estate lending
policy which will detail maximum loan-to-value ratios and maturities. Management
expects that these loan-to-value ratios will be sufficient to compensate for
fluctuations in the real estate market to minimize the risk of loss. Mortgage
loans that do not conform to First National Bank's asset/liability mix policies
will be sold in the secondary markets. The risk of this type of activity depends
on the salability of the loan to national investors and interest rate changes.
Delivering these loans to the end investor on a mandatory basis and meeting the
investor's quality control procedures limits First National Bank's risk of
making adjustable rate mortgage loans. The risk assumed by First National Bank
will be conditioned upon its internal controls, loan underwriting and market
conditions in the national mortgage market. First National Bank will retain
loans for its portfolio when it has sufficient liquidity to fund the needs of
the established customers and when rates are favorable to retain the loans. The
loan underwriting standards and policies will generally be the same for both
loans sold in the secondary market and those retained in First National Bank's
portfolio.
Residential Construction
These loans will be made for the construction of single family
residences in First Capital's market area. The loans will be granted to
qualified individuals with down payments of at least 20% of the appraised value
or contract price, whichever is less. The interest rates are expected to
fluctuate at 1% to 2% above First National Bank's prime interest rate during the
six month construction period. First National Bank will also charge a fee of 1%
to 2% in addition to the normal closing costs. These loans generally command
higher rates and fees commensurate with the risk warranted in the construction
lending field. The risk in construction lending is dependent upon the
performance of the builder in building the project to the plans and
specifications of the borrower and First National Bank's ability to administer
and control all phases of the construction disbursements. Upon completion of the
construction period, management anticipates that the mortgage will be converted
to a permanent loan and normally sold to an investor in the secondary mortgage
market.
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Commercial Real Estate
To a limited extent, First National Bank anticipates that it will also
offer commercial real estate loans to developers of both commercial and
residential properties. In making these loans, First National Bank intends to
manage its credit risk by actively monitoring such measures as advance rate,
cash flow, collateral value and other appropriate credit factors. Management
will attempt to reduce credit risk in the commercial real estate portfolio be
emphasizing loans on owner-occupied office and retail buildings where the
loan-to-value ratio, established by independent appraisals, does not exceed 80%.
In addition, First National Bank may require personal guarantees of the
principal owners.
The organizers believe First National Bank's market offers a
significant opportunity for residential real estate mortgage lending. This
opportunity includes residential construction loans to buyers and owners as well
as to creditworthy contractors for custom-built homes with purchase contracts in
place. First National Bank anticipates that permanent mortgage loans would be
offered with terms that parallel purchase commitments from permanent investors.
While risk of loss in First National Bank's loan portfolio is primarily
tied to the credit quality of the various borrowers, risk of loss may also
increase due to factors beyond its control, such as local, regional and/or
national economic downturns. General conditions in the real estate market may
also impact the relative risk in First National Bank's real estate portfolio. Of
First National Bank's target areas of lending activities, commercial loans are
generally considered to have greater risk than real estate loans or consumer
installment loans.
The organizers intend to originate loans and to participate with other
banks with respect to loans which exceed First National Bank's lending limits.
Management does not believe that loan participations will necessarily pose any
greater risk of loss than loans which First National Bank originates.
INVESTMENTS
In its first year of operation, management anticipates that investment
securities will comprise approximately 27% of First National Bank's assets,
other investments will comprise approximately 5% of its assets and loans will
comprise approximately 63% of its assets. First National Bank intends to invest
primarily in direct obligations of the United States, obligations guaranteed as
to principal and interest by the United States, obligations of agencies of the
United States, and certificates of deposit issued by commercial banks. In
addition, First National Bank will enter into Federal Funds transactions with
its principal correspondent banks and anticipates that it will primarily act as
a net seller of such funds. The sale of Federal Funds amounts to a short-term
loan from First National Bank to another bank.
ASSET/LIABILITY MANAGEMENT
It is the objective of First National Bank to manage assets and
liabilities to provide a satisfactory, consistent level of profitability within
the framework of established cash, loan investment, borrowing, and capital
policies. Certain of First National Bank's officers will be responsible for
monitoring policies and procedures that are designed to ensure an acceptable
composition of the asset/liability mix, stability, and leverage of all sources
of funds while adhering to prudent banking practices. It is the overall
philosophy of management to support asset growth primarily through growth of
core deposits, which include deposits of all categories made by individuals,
partnerships and corporations. Management will seek to invest the largest
portion of First National Bank's assets in commercial, consumer and real estate
loans.
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First National Bank's asset/liability mix likely will be monitored on a
daily basis with a monthly report reflecting interest-sensitive assets and
interest-sensitive liabilities being prepared and presented to the Board of
Directors. The objective of this policy is to control interest-sensitive assets
and liabilities so as to minimize the impact of substantial movements in
interest rates on First National Bank's earnings.
CORRESPONDENT BANKING
Correspondent banking involves the providing of services by one bank to
another bank which, from an economic or practical standpoint, cannot provide
that service for itself. First National Bank will be required to purchase
correspondent services offered by larger banks, including check collections,
purchase of Federal Funds, security safekeeping, investment services, coin and
currency supplies, overline and liquidity loan participations, and sales of
loans to or participations with correspondent banks.
First National Bank anticipates that it will sell loan participations
to correspondent banks with respect to loans which exceed its lending limit. As
compensation for services provided by a correspondent, First National Bank may
maintain certain balances with such correspondents in non-interest bearing
accounts.
DATA PROCESSING
First National Bank intends to enter into a data processing servicing
agreement with a third party vendor which has not been identified at this time.
It is expected that this servicing agreement will provide First National Bank
with a full range of data processing services, including an automated general
ledger, deposit accounting, commercial, real estate and installment lending,
data processing, and central information filing.
YEAR 2000
As the year 2000 ("Year 2000") approaches, an important business issue
has emerged regarding existing application software programs and operating
systems. To save computing time and disk space, many existing application
software products were designed to accommodate only a two-digit year rather than
a four-digit year. For example, "98" is stored on the system and represents 1998
and "00" represents 1900. As a result, software or equipment that is date
dependent may, for example, recognize a date using "00" as the year 1900 rather
than the year 2000. This could result in a system failure or miscalculations
causing disruption of operations, a temporary inability to process transactions,
send invoices, or engage in similar normal business activity.
Communications and information systems, including systems which monitor
deposit and lending accounts, are critical to First Capital's and First National
Bank's business. Software and hardware developed by independent third parties
will be installed to provide primary banking applications, including core
processing systems. First National Bank intends to choose a source for these
systems that has modified or upgraded its computer applications to become Year
2000 compliant. In addition, First Capital and First National Bank intend to
implement a Year 2000 compliance program whereby First National Bank will review
the Year 2000 issue that may be faced by its other third-party vendors and loan
and deposit customers. Under such program, First Capital will examine the need
for modifications or replacement of all non-Year 2000 compliant pieces of
software. First Capital does not currently expect that the cost of its and First
National Bank's Year 2000 compliance program will be material to its financial
conditions and expects that it will satisfy such compliance program without
material disruption of its operations. Management of First Capital intends to
evaluate the potential effect on its third-party vendor's data processing
systems resulting from Year 2000 issues and to obtain a representation from such
vendor that its core processing systems will be fully Year 2000 compliant prior
to the opening of First National Bank for
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business. In the event that First Capital, First National Bank, such vendor or
its other significant vendors or loan customers do not successfully and timely
achieve Year 2000 compliance, First National Bank's business, future prospects,
financial condition or results of operations could be materially adversely
affected.
An area of concern to First Capital, First National Bank, and its
primary regulator, the OCC, is the effect of Year 2000 issues on its loan
customers. Failure to address Year 2000 related issues could have significant
impact on the ability of certain customers to continue operations. First
National Bank's loan portfolio could be negatively impacted if customers are
unable to honor loan agreements and defaults occur as a result of failure to
address Year 2000. These customer relationships will be monitored to ensure that
the necessary systems modifications will be made on a timely basis. In addition,
First National Bank will review Year 2000 related issues as part of its normal
underwriting criteria and loan approval process. It also will include Year 2000
compliance requirements and covenants requiring compliance within its standard
loan agreements. Nevertheless, there can be no assurance that these customers
will be Year 2000 compliant. Failure of certain customers to adequately address
these issues could result in loan defaults which would negatively impact First
Capital's earnings.
Although First Capital and First National Bank will take extensive
steps to address Year 2000 related issues, there can be no assurance that all
necessary modifications will be identified and made or that unforeseen
difficulties or costs will not arise. In addition, there can be no assurance
that the failure of First National Bank's internal systems or the systems
provided by its data processing vendor or other companies on which First
Capital's systems rely will not negatively impact First National Bank's systems
or operations.
EMPLOYEES
In their first year of operation, First Capital and First National Bank
anticipate that they will employ 16 persons, including 5 officers. First
National Bank will hire additional persons as needed, including additional
tellers and financial service representatives.
MONETARY POLICIES
The results of operations of First National Bank will be affected by
credit policies of monetary authorities, particularly the Federal Reserve Board.
The instruments of monetary policy employed by the Federal Reserve Board include
open market operations in U.S. Government securities, changes in the discount
rate on member bank borrowings, changes in reserve requirements against member
bank deposits and limitations on interest rates which member banks may pay on
time and savings deposits. In view of changing conditions in the national
economy and in the money markets, as well as the effect of action by monetary
and fiscal authorities, including the Federal Reserve Board, no prediction can
be made as to possible future changes in interest rates, deposit levels, loan
demand, or the business and earnings of First National Bank.
SUPERVISION AND REGULATION
First Capital and First National Bank will operate in a highly
regulated environment, and their business activities will be governed by
statute, regulation, and administrative policies. The business activities of
First Capital and First National Bank will be closely supervised by a number of
regulatory agencies, including the Federal Reserve Board, the OCC, the Florida
Banking Department and the FDIC.
First Capital will be regulated by the Federal Reserve Board under the
federal Bank Holding Company Act, which requires every bank holding company to
obtain the prior approval of the Federal Reserve Board
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before acquiring more than 5% of the voting shares of any bank or all or
substantially all of the assets of a bank, and before merging or consolidating
with another bank holding company. The Federal Reserve Board (pursuant to
regulation and published policy statements) has maintained that a bank holding
company must serve as a source of financial strength to its subsidiary banks. In
adhering to the Federal Reserve Board policy, First Capital may be required to
provide financial support to a subsidiary bank at a time when, absent such
Federal Reserve Board policy, First Capital may not deem it advisable to provide
such assistance.
Under the Riegle-Neal Interstate Banking and Branching Efficiency Act
of 1994, which became effective in November 1994, the restrictions on interstate
acquisitions of banks by bank holding companies were repealed on September 29,
1995, such that First Capital and any other bank holding company located in
Florida is able to acquire a bank located in any other state, and a bank holding
company located outside Florida can acquire any Florida-based bank, in either
case subject to certain deposit percentage and other restrictions. The
legislation also provides that, unless an individual state elects beforehand
either (i) to accelerate the effective date or (ii) to prohibit out-of-state
banks from operating interstate branches within its territory, on or after June
1, 1997, adequately capitalized and managed bank holding companies will be able
to consolidate their multistate bank operations into a single bank subsidiary
and to branch interstate through acquisitions. De novo branching by an
out-of-state bank would be permitted only if it is expressly permitted by the
laws of the host state. The authority of a bank to establish and operate
branches within a state will continue to be subject to applicable state
branching laws.
A bank holding company is generally prohibited from acquiring control
of any company which is not a bank and from engaging in any business other than
the business of banking or managing and controlling banks. However, there are
certain activities which have been identified by the Federal Reserve Board to be
so closely related to banking as to be a proper incident thereto and thus
permissible for bank holding companies, including the following activities:
acting as investment or financial advisor to subsidiaries and certain outside
companies; leasing personal and real property or acting as a broker with respect
thereto; providing management consulting advice to nonaffiliated banks and
nonbank depository institutions; operating collection agencies and credit
bureaus; acting as a futures commission merchant; providing data processing and
data transmission services; acting as an insurance agent or underwriter with
respect to limited types of insurance; performing real estate appraisals;
arranging commercial real estate equity financing; providing securities
brokerage services; and underwriting and dealing in obligations of the United
States, the states and their political subdivisions. In determining whether an
activity is so closely related to banking as to be permissible for bank holding
companies, the Federal Reserve Board is required to consider whether the
performance of such activities by a bank holding company or its subsidiaries can
reasonably be expected to produce such benefits to the public as greater
convenience, increased competition and gains in efficiency that outweigh such
possible adverse effects as undue concentration of resources, decreased or
unfair competition, conflicts of interest and unsound banking practices.
Generally, bank holding companies are required to obtain prior approval of the
Federal Reserve Board to engage in any new activity not previously approved by
the Federal Reserve Board.
As a national bank, First National Bank is subject to the supervision
of the OCC and, to a limited extent, the FDIC and the Federal Reserve Board.
With respect to expansion, national banks situated in the State of Florida are
generally prohibited from establishing branch offices or facilities outside of
the county in which such main office is located, except (i) in adjacent counties
in certain situations, or (ii) by means of a merger, consolidation or sale of
assets.
First National Bank is also subject to the Florida banking and usury
laws restricting the amount of interest which it may charge in making loans or
other extensions of credit. In addition, First National Bank, as a subsidiary of
First Capital, is subject to restrictions under federal law in dealing with
First Capital and
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other affiliates, if any. These restrictions apply to extensions of credit to an
affiliate, investments in the securities of an affiliate and the purchase of
assets from an affiliate.
Loans and extensions of credit by national banks are subject to legal
lending limitations. Under federal law, a national bank may grant unsecured
loans and extensions of credit in an amount up to 15% of its unimpaired capital
and surplus to any person if the loans and extensions of credit are not fully
secured by collateral having a market value at least equal to their face amount.
In addition, a national bank may grant loans and extensions of credit to a
single person up to 10% of its unimpaired capital and surplus, provided that the
transactions are fully secured by readily marketable collateral having a market
value determined by reliable and continuously available price quotations, at
least equal to the amount of funds outstanding. This 10% limitation is separate
from, and in addition to, the 15% limitation for unsecured loans. Loans and
extensions of credit may exceed the general lending limit if they qualify under
one of several exceptions. Such exceptions include certain loans or extensions
of credit arising from the discount of commercial or business paper, the
purchase of bankers' acceptances, loans secured by documents of title, loans
secured by U.S. obligations and loans to or guaranteed by the federal
government.
Both First Capital and First National Bank are subject to regulatory
capital requirements imposed by the Federal Reserve Board and the OCC. In 1989,
both the Federal Reserve Board and the OCC issued new risk-based capital
guidelines for bank holding companies and banks which make regulatory capital
requirements more sensitive to differences in risk profiles of various banking
organizations. The capital adequacy guidelines issued by the Federal Reserve
Board are applied to bank holding companies on a consolidated basis with the
banks owned by the holding company. The OCC's risk capital guidelines apply
directly to national banks regardless of whether they are a subsidiary of a bank
holding company. Both agencies' requirements (which are substantially similar),
provide that banking organizations must have capital equivalent to 8% of
weighted risk assets. The risk weights assigned to assets are based primarily on
credit risks. Depending upon the riskiness of a particular asset, it is assigned
to a risk category. For example, securities with an unconditional guarantee by
the United States government are assigned to the lowest risk category. A risk
weight of 50% is assigned to loans secured by owner-occupied one to four family
residential mortgages, provided that certain conditions are met. The aggregate
amount of assets assigned to each risk category is multiplied by the risk weight
assigned to that category to determine the weighted values, which are added
together to determine total risk-weighted assets. Both the Federal Reserve Board
and the OCC have also implemented new minimum capital leverage ratios to be used
in tandem with the risk-based guidelines in assessing the overall capital
adequacy of banks and bank holding companies. Under these rules, banking
institutions are required to maintain a ratio of 3% "Tier 1" capital to total
assets (net of goodwill). Tier 1 capital includes common shareholders equity,
noncumulative perpetual preferred stock and minority interests in the equity
accounts of consolidated subsidiaries.
Both the risk-based capital guidelines and the leverage ratio are
minimum requirements, applicable only to top-rated banking institutions.
Institutions operating at or near these levels are expected to have
well-diversified risk, high asset quality, high liquidity, good earnings and in
general, have to be considered strong banking organizations, rated composite 1
under the CAMELS rating system for banks. Institutions with lower ratings and
institutions with high levels of risk or experiencing or anticipating
significant growth would be expected to maintain ratios 100 to 200 basis points
above the stated minimums.
The OCC has amended the risk-based capital guidelines applicable to
national banks in an effort to clarify certain questions of interpretation and
implementation, specifically with regard to treatment of originated and
purchased mortgage servicing rights and other intangible assets. The OCC's
guidelines provide that intangible assets are generally deducted from Tier 1
capital in calculating a bank's risk-based capital ratio. However, certain
intangible assets which meet specified criteria ("qualifying intangibles") such
as mortgage servicing rights are retained as a part of Tier 1 capital. The OCC
currently maintains that only
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mortgage servicing rights and purchased credit card relationships meet the
criteria to be considered qualifying intangibles. The OCC's guidelines formerly
provided that the amount of such qualifying intangibles that may be included in
Tier 1 capital was strictly limited to a maximum of 25% of total Tier 1 capital.
The OCC has amended its guidelines to increase the limitation on such qualifying
intangibles from 25% to 50% of Tier 1 capital and further to permit the
inclusion of purchased credit card relationships as a qualifying intangible
asset.
In addition, the OCC has adopted rules which clarify treatment of asset
sales with recourse not reported on a bank's balance sheet. Among assets
affected are mortgages sold with recourse under Fannie Mae, Freddie Mac and
Farmer Mac programs. The rules clarify that even though those transactions are
treated as asset sales for bank Call Report purposes, those assets will still be
subject to a capital charge under the risk-based capital guidelines.
The OCC, the Federal Reserve Board and the FDIC recently adopted final
regulations revising their risk-based capital guidelines to further ensure that
the guidelines take adequate account of interest rate risk. Interest rate risk
is the adverse effect that changes in market interest rates may have on a bank's
financial condition and is inherent to the business of banking. Under the new
regulations, when evaluating a bank's capital adequacy, the agency's capital
standards now explicitly include a bank's exposure to declines in the economic
value of its capital due to changes in interest rates. The exposure of a bank's
economic value generally represents the change in the present value of its
assets, less the change in the value of its liabilities, plus the change in the
value of its interest rate off-balance sheet contracts. Concurrently, the
agencies issued a joint policy statement to bankers, effective June 26, 1996, to
provide guidance on sound practices for managing interest rate risk. In the
policy statement, the agencies emphasize the necessity of adequate oversight by
a bank's board of directors and senior management and of a comprehensive risk
management process. The policy statement also describes the critical factors
affecting the agencies' evaluations of a bank's interest rate risk when making a
determination of capital adequacy. The agencies' risk assessment approach used
to evaluate a bank's capital adequacy for interest rate risk relies on a
combination of quantitative and qualitative factors. Banks that are found to
have high levels of exposure and/or weak management practices will be directed
by the agencies to take corrective action.
The Federal Deposit Insurance Corporation Improvement Act of 1991 (the
"Act"), enacted on December 19, 1991, provides for a number of reforms relating
to the safety and soundness of the deposit insurance system, supervision of
domestic and foreign depository institutions and improvement of accounting
standards. One aspect of the Act involves the development of a regulatory
monitoring system requiring prompt action on the part of banking regulators with
regard to certain classes of undercapitalized institutions. While the Act does
not change any of the minimum capital requirements, it directs each of the
federal banking agencies to issue regulations putting the monitoring plan into
effect. The Act creates five "capital categories" ("well capitalized,"
"adequately capitalized," "undercapitalized," "significantly undercapitalized"
and "critically undercapitalized") which are defined in the Act and which will
be used to determine the severity of corrective action the appropriate regulator
may take in the event an institution reaches a given level of
undercapitalization. For example, an institution which becomes
"undercapitalized" must submit a capital restoration plan to the appropriate
regulator outlining the steps it will take to become adequately capitalized.
Upon approving the plan, the regulator will monitor the institution's
compliance. Before a capital restoration plan will be approved, any entity
controlling a bank (i.e., holding companies) must guarantee compliance with the
plan until the institution has been adequately capitalized for four consecutive
calendar quarters. The liability of the holding company is limited to the lesser
of five percent of the institution's total assets or the amount which is
necessary to bring the institution into compliance with all capital standards.
In addition, "undercapitalized" institutions will be restricted from paying
management fees, dividends and other capital distributions, will be subject to
certain asset growth restrictions and will
27
<PAGE> 30
be required to obtain prior approval from the appropriate regulator to open new
branches or expand into new lines of business.
As an institution drops to lower capital levels, the extent of action
to be taken by the appropriate regulator increases, restricting the types of
transactions in which the institution may engage and ultimately providing for
the appointment of a receiver for certain institutions deemed to be critically
undercapitalized.
The Act also provides that banks have to meet new safety and soundness
standards. In order to comply with the Act, the Federal Reserve Board, the OCC
and the FDIC have adopted regulations defining operational and managerial
standards relating to internal controls, loan documentation, credit
underwriting, interest rate exposure, asset growth, and compensation, fees and
benefits.
Both the capital standards and the safety and soundness standards which
the Act seeks to implement are designed to bolster and protect the deposit
insurance fund.
In response to the directive issued under the Act, the regulators have
established regulations which, among other things, prescribe the capital
thresholds for each of the five capital categories established by the Act. The
following table reflects the capital thresholds:
<TABLE>
<CAPTION>
TOTAL RISK-BASED TIER 1 RISK-BASED TIER 1
CAPITAL RATIO CAPITAL RATIO LEVERAGE RATIO
------------- ------------- --------------
<S> <C> <C> <C>
Well capitalized(1)....................... 10.0% 6.0% 5.0%
Adequately Capitalized(1)................. 8.0% 4.0% 4.0%(2)
Undercapitalized(3)....................... < 8.0% < 4.0% < 4.0%(4)
Significantly Undercapitalized(3)......... < 6.0% < 3.0% < 3.0%
Critically Undercapitalized............... -- -- < 2.0%(5)
</TABLE>
- ---------------------------
(1) An institution must meet all three minimums.
(2) 3.0% for composite 1-rated institutions, subject to appropriate federal
banking agency guidelines.
(3) An institution falls into this category if it is below the specified
capital level for any of the three capital measures.
(4) Less than 3.0% for composite 1-rated institutions, subject to
appropriate federal banking agency guidelines.
(5) Ratio of tangible equity to total assets.
As a national bank, First National Bank is subject to examination and
review by the OCC. This examination is typically completed on-site at least
annually and is subject to off-site review at call. The OCC, at will, can access
quarterly reports of condition, as well as such additional reports as may be
required by the national banking laws.
As a bank holding company, First Capital is required to file with the
Federal Reserve Board an annual report of its operations at the end of each
fiscal year and such additional information as the Federal Reserve Board may
require pursuant to the Act. The Federal Reserve Board may also make
examinations of First Capital and each of its subsidiaries.
The scope of regulation and permissible activities of First Capital and
First National Bank is subject to change by future federal and state
legislation. In addition, regulators sometimes require higher capital levels on
a case-by-case basis based on such factors as the risk characteristics or
management of a particular institution. First Capital and First National Bank
are not aware of any attributes of their operating plan that would cause
regulators to impose higher requirements.
28
<PAGE> 31
ORGANIZERS AND PRINCIPAL SHAREHOLDERS
The following persons comprise the organizers of First Capital and
First National Bank: Ron Anderson, Christina H. Bryan, C. Brett Carter, Suellen
Rodeffer Garner, Dr. William K. Haley, Lorie L. McCarroll, David F. Miller,
William J. Mock, Jr., Marlene J. Murphy, Robert L. Peters, Lawrence Piper,
Michael G. Sanchez, Harry R. Trevett, Edward E. Wilson, and Marshall E. Wood.
All of the organizers reside in or near Fernandina Beach, Florida. The
organizers as a group intend to subscribe for 330,000 shares or $3,300,000 in
the offering, which will equal approximately 54.1% of the 610,000 shares to be
outstanding upon completion of the minimum offering or 33.0% of the 1,000,000
shares to be outstanding upon completion of the maximum offering.
Upon commencement of the business of First National Bank, Michael G.
Sanchez will receive options to purchase shares of First National Bank's common
stock equal to the lesser of 30,000 shares or 5% of the amount of common stock
sold in this offering, at an exercise price of $10.00 per share. Twenty percent
of these options shall vest when First National Bank opens for business and
twenty percent shall vest on each of the four successive anniversaries of First
National Bank's opening for business. See "Management--Employment Agreement"
beginning on page 32.
Each of the organizers intends to purchase a certain number of the
shares of common stock of First Capital offered hereby. See "Security Ownership
of Certain Beneficial Owners and Management" at page 34 for a table setting
forth specific numbers of shares to be purchased and the percentage of common
stock to be owned by the organizers after completion of the minimum offering.
MANAGEMENT
DIRECTORS AND EXECUTIVE OFFICERS OF FIRST CAPITAL AND FIRST NATIONAL BANK
First Capital's directors and executive officers and First National
Bank's proposed directors and executive officers are as follows:
<TABLE>
<CAPTION>
Proposed Position
Name Position with First Capital with First National Bank
---- --------------------------- ------------------------
<S> <C> <C>
Ron Anderson Class II Director Director
Christina H. Bryan Class I Director Director
C. Brett Carter Class II Director Director
Suellen Rodeffer Garner Chairman of the Board Chairman of the Board
and Class I Director and Director
Dr. William K. Haley Class II Director Director
Lorie L. McCarroll Treasurer and
Class II Director Director
David F. Miller Class II Director Director
William J. Mock, Jr. Class III Director Director
Marlene J. Murphy Class III Director Director
</TABLE>
29
<PAGE> 32
<TABLE>
<CAPTION>
Proposed Position
Name Position with First Capital with First National Bank
---- --------------------------- ------------------------
<S> <C> <C>
Robert L. Peters Secretary and
Class III Director Director
Lawrence Piper Class III Director Director
Michael G. Sanchez President, Chief Executive President, Chief Executive
Officer and Class I Director Officer and Director
Harry R. Trevett Class I Director Director
Edward E. Wilson Class III Director Director
Marshall E. Wood Class I Director Director
</TABLE>
Each of the above persons, with the exception of Suellen Rodeffer
Garner and Michael G. Sanchez, has been a director of First Capital since August
1, 1998. Ms. Garner and Mr. Sanchez have served as directors since inception.
First Capital has a classified Board of Directors whereby one-third of the
members will be elected each year at its Annual Meeting of Shareholders. Upon
such election, each director of First Capital will serve for a term of three
years. See "Description of Capital Stock--Board of Directors" beginning on page
36. First Capital's officers are appointed by the Board of Directors and hold
office at the will of the Board.
Each of First National Bank's proposed directors will, upon approval of
the OCC, serve until First National Bank's first shareholders' meeting, which
meeting will be held shortly after First National Bank receives its charter. At
that meeting, First Capital, as sole shareholder of First National Bank, intends
to elect each interim director to First National Bank's Board of Directors, and
intends to elect Michael G. Sanchez as President and Chief Executive Officer of
First National Bank. After the first shareholders' meeting, directors of First
National Bank will serve for a term of one year and will be elected each year at
its Annual Meeting of Shareholders. First National Bank's officers will be
appointed by its Board of Directors and will hold office at the will of the
Board.
RON ANDERSON, age 54, has served as a director of First Capital since
August 1, 1998. Prior to his service with First Capital, Mr. Anderson served as
managing general partner of Marel Enterprises, a bank property lessor, beginning
in 1997. Mr. Anderson is also the President of several automobile-related
businesses, including Ron Anderson Chevrolet, Anderson Pontiac Buick, Ron
Anderson Pontiac, Rontex- Douglas, and Anderson Enterprises. Mr. Anderson served
as a director of Bank South from 1985 to 1986.
CHRISTINA H. BRYAN, age 53, has served as a director of First Capital
since August 1, 1998. Ms. Bryan is a co-owner of several businesses, serving in
the following capacities: director and Treasurer of Rex Packing, Inc. since
1972; President of Florida Petroleum Corp. since 1984; Secretary and Treasurer
of Island Seafood Co. since 1972; Director and Vice President of YCG, Inc. since
1980; and director and Vice President of YE Hall, Inc. since 1972.
C. BRETT CARTER, age 38, has served as a director of First Capital
since August 1, 1998. Mr. Carter has served as President of Brett's Waterway
CAFE, Inc. since 1989 and as President of Fernandina Improvements, Inc. since
1997. Mr. Carter has also served as a director of Amelia's Restaurant, Inc.
since 1989.
30
<PAGE> 33
SUELLEN RODEFFER GARNER, age 42, has served as a director of First
Capital since July 31, 1998, and served as Secretary and Treasurer of First
Capital from Inception to July 1998. Ms. Garner served as a director of Barnett
Bank of Nassau County from 1990 to 1998. In addition, Ms. Garner is a licensed
orthodontist and has been co-owner of Suellen Rodeffer and David Tod Garner
D.D.S., P.A. since 1983.
DR. WILLIAM K. HALEY, age 42, has served as a director of First Capital
since August 1, 1998. Dr. Haley has been a partner of the AIMB Investment Club
and of Medical Equities Partners since 1995. He is also a licensed surgeon and
has been a partner of and surgeon for North Florida Surgeons P.A. since 1988.
LORIE L. MCCARROLL, age 33, has served as a director of First Capital
since August 1, 1998 and as its Treasurer since July 1998. Ms. McCarroll is a
Certified Public Accountant and has served in that capacity for Miller, Lee &
McCarroll, Inc. since 1992. Ms. McCarroll has also served as an officer with
several rental real estate companies, including Lee-McCarroll, Inc. (Vice
President since 1997); Miller Trevett, McCarroll, Inc. (Treasurer since 1996);
and Miller, Lee & McCarroll, Inc. (Vice President and Secretary since 1997).
DAVID F. MILLER, age 69, has served as a director of First Capital
since August 1, 1998. He has been a consultant for Steinmart, a general fashion
retailer, since 1990, and has owned Amelia Service Center, a real estate
business in Fernandina Beach, Florida, since 1991. Mr. Miller served as
President and Vice- Chairman of the Board of Directors for J.C. Penny Co from
1953 to 1990, and as a director of Barnett Bank of Jacksonville, Florida from
1990 to 1996. Mr. Miller has also served as a director for Winn-Dixie Stores,
Inc. since 1986 and for Suiza Corp. since 1997.
WILLIAM J. MOCK, JR., age 30, has served as a director of First Capital
since August 1, 1998. Mr. Mock is the owner of The Prudential Island Realty, a
real estate sales business which he founded in 1994. Mr. Mock also serves as
President of two real estate investment companies, The Centre Street Company and
Mock Land Company, both of which he founded in 1998.
MARLENE J. MURPHY, age 57, has served as a director of First Capital
since August 1, 1998. Ms. Murphy has been a co-owner of and served as President
of Tilted Anchor Inc., a retail store located in Fernandina Beach, Florida,
since 1983.
ROBERT L. PETERS, age 38, has served as a director of First Capital
since August 1, 1998, and as its Secretary since July 1998. Mr. Peters has been
as an attorney with the law firm of Jacobs and Peters in Fernandina Beach,
Florida, since 1993. Mr. Peters holds a B.S. in accounting and real estate and
received his J.D. from Florida State University.
LAWRENCE PIPER, age 42, has served as a director of First Capital since
August 1, 1998. Mr. Piper has owned and managed Coastal Telephone Systems, a
telephone sales and service company, since 1991.
MICHAEL G. SANCHEZ, age 49, has served as President and Chief Executive
Officer of First Capital since July 31, 1998 and as a director since inception.
Mr. Sanchez will continue to serve as First Capital's President and Chief
Executive Officer after First National Bank commences operations and will serve
in the same capacity for First National Bank once elected, as intended, by the
Board of Directors. Mr. Sanchez has entered into an employment agreement with
First Capital and First National Bank. Prior to founding First Capital, Mr.
Sanchez served as Group President of Lending for Tucker Federal Bank, Tucker,
Georgia, from 1997 to 1998. He also served as President, Chief Executive Officer
and director of Premier Bank, Acworth, Georgia, from 1995 to 1996 and for
Summerville National Bank, Summerville, South Carolina, from 1993 to 1995. Mr.
Sanchez also served as a senior vice president with Prime Bank, Decatur,
Georgia, from 1990 to 1993; with Enterprise National Bank, Atlanta, Georgia,
from 1988 to 1990; and with National City Bank, Rome, Georgia, from 1972 to
1983. Prior to his service with Enterprise National Bank, Mr. Sanchez served
31
<PAGE> 34
as Vice President and Regional Manager for Bank South, N.A., Atlanta, Georgia,
from 1983 to 1988. Mr. Sanchez has over 25 years of experience in the banking
industry.
HARRY R. TREVETT, age 43, has served as a director of First Capital
since August 1, 1998. Mr. Trevett is a certified general contractor and a
licensed real estate broker in the state of Florida. Mr. Trevett owns and serves
as President of several businesses in the real estate and construction
industries, including Trevett & Associated Realty (since 1979); Trevett Homes,
Inc. (since 1982); and Trevett Construction Group (since 1988).
EDWARD E. WILSON, age 47, has served as a director of First Capital
since August 1, 1998. Mr. Wilson is a licensed insurance agent and real estate
salesperson. He is part-owner and has served as an officer of several Florida
insurance agencies comprising Morrow Insurance Group, Inc., including agencies
located in Madison (Secretary and Treasurer since 1985); Dowling Park (Secretary
and Treasurer since 1988); Fernandina Beach (President since 1987); and Yulee
(President since 1998).
MARSHALL E. WOOD, age 52, has served as a director of First Capital
since August 1, 1998. Mr. Wood is an attorney licensed in the states of Florida
and Tennessee. In addition, Mr. Wood served as a director of Barnett Bank of
Nassau County from 1981 to 1998. Mr. Wood has served as President and sole
director of Marshall E. Wood, P.A., Amelia Island, Florida since 1995 and served
as Vice President and Director for Wood & Poole, P.A. from 1986 to 1995.
There are no family relationships between any director or executive
officer and any other director or executive officer of First Capital.
EXECUTIVE COMPENSATION
The following table provides certain summary information concerning
compensation paid or accrued by First Capital to or on behalf of its Chief
Executive Officer for the year ended December 31, 1998. No other officers or
directors of the Board have received compensation in excess of $100,000 for
services to First Capital.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Annual Compensation
-------------------
Name and
Principal Position Year Salary Bonus
------------------ ---- ------ -----
<S> <C> <C> <C>
Michael G. Sanchez 1998 $32,000(1) $-0-
President and
Chief Executive
Officer
</TABLE>
- ----------
(1) Salary figure pro-rated from September 1, 1998, the date Mr. Sanchez
was first employed by First National Bank.
EMPLOYMENT AGREEMENT
On September 1, 1998, the organizers entered into an Employment
Agreement (the "Agreement") with Michael G. Sanchez pursuant to which Mr.
Sanchez shall be employed as President and Chief Executive Officer of First
National Bank for a period commencing on August 15, 1998, and ending on August
15, 2003. Under the Agreement, Mr. Sanchez shall be entitled to receive a
minimum annual base salary of $96,000,
32
<PAGE> 35
which may be increased from time to time in the sole discretion of the Board of
Directors of First National Bank. In addition, Mr. Sanchez shall be provided
with an automobile, at a cost not to exceed $25,000, as soon as First Capital's
initial public offering is completed, and shall receive a bonus of $10,000 as
soon as practicable after First National Bank opens for business.
Beginning on the first anniversary of First National Bank's opening for
business and on each successive anniversary until it is profitable on a
cumulative basis, Mr. Sanchez shall be eligible to receive in addition to his
base salary such performance bonuses as determined in the discretion of the
Board of Directors of First National Bank. Beginning on the end of the first
year in which First National Bank becomes profitable on a cumulative basis and
continuing in each successive year thereafter during the term of the Agreement,
Mr. Sanchez shall receive a bonus equal to five percent of the net income of
First National Bank.
The Agreement provides for the grant of stock options to Mr. Sanchez in
the amount of the lesser of 30,000 shares or five percent of the Common Stock of
First Capital sold in its initial public offering, at a purchase price of $10.00
per share pursuant to an Incentive Stock Option Plan which was adopted by the
Board of Directors of First Capital in November of 1998. Twenty percent of these
options shall vest beginning on the date First National Bank commences business,
and twenty percent shall vest on each of the four successive anniversaries of
its opening for business. All such options shall be exercisable for a period of
ten years from the date of grant.
The Agreement also provides that Mr. Sanchez shall receive any and all
benefits, such as health, hospitalization, disability, and term life insurance,
generally made available to other senior executives of First Capital and First
National Bank.
Mr. Sanchez has agreed to a non-compete and non-solicitation provision
pursuant to which he agrees that, through the actual date of termination of the
Agreement and for a period of twelve months thereafter, he shall not, without
the prior written consent of First National Bank, either directly or indirectly
serve as an executive officer of any bank, bank holding company, or other
financial institution within a 35-mile radius of First National Bank.
The Agreement provides that First National Bank may terminate the
employment of Mr. Sanchez for any reason, and, in such event, Mr. Sanchez shall
be entitled to the payment of his base salary for a period of twelve months.
COMPENSATION OF DIRECTORS
Directors will not receive any compensation during First National
Bank's first year of operations.
STOCK OPTION PLANS
First Capital's Board of Directors has adopted an Incentive Stock
Option Plan (the "Plan") to cover Mr. Sanchez' options and for employees who are
contributing significantly to the management or operation of the business of
First Capital or its subsidiaries as determined by a committee designated by the
Board of Directors to administer the Plan. The Plan is contingent upon approval
by the shareholders of First Capital. The Plan provides for the grant of options
at the discretion of the committee administering the Plan. No person may serve
as a member of the committee who is then eligible for a grant of options under
the Plan or has been so eligible for a period of one year prior to his or her
service on the committee. The option exercise price must be at least 100% (110%
in the case of a holder of 10% or more of the Common Stock) of the fair market
value of the stock on the date the option is granted. The options are
exercisable by the
33
<PAGE> 36
holder thereof in full at any time prior to their expiration in accordance with
the terms of the Plan. Stock options granted pursuant to the Plan will expire on
or before (1) the date which is the tenth anniversary of the date the option is
granted, or (2) the date which is the fifth anniversary of the date the option
is granted in the event that the option is granted to a key employee who owns
more than 10% of the total combined voting power of all classes of stock of
First Capital or any of its subsidiaries, if any.
The Board of Directors may, at First Capital's first annual meeting of
shareholders after First National Bank opens for business, propose for
shareholder approval a directors' stock option plan, which will be designed to
provide incentive compensation to directors in the event that First Capital's
common stock increases in value during the term of such options. The details of
this directors' option plan have not yet been determined, but these details will
be disclosed to shareholders in First Capital's proxy statement issued in
connection with solicitation of shareholder approval of such plan.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Each of the organizers of First Capital intends to purchase a number of
the shares of common stock of First Capital offered hereby, as set forth in the
following table, which specifies the percentage of common stock to be owned by
the organizers assuming completion of the minimum offering of 610,000 shares.
<TABLE>
<CAPTION>
PERCENT OF
NUMBER OF TOTAL
NAME OF BENEFICIAL OWNER SHARES(1) SHARES
------------------------ ----------- -------
<S> <C> <C>
Ron Anderson 15,000 2.46%
Christina H. Bryan 25,000 4.10
C. Brett Carter 40,000 6.56
Suellen Rodeffer Garner 40,000 6.56
Dr. William K. Haley 10,000 1.64
Lorie L. McCarroll 15,000 2.46
David F. Miller 40,000 6.56
William J. Mock 20,000 3.28
Marlene J. Murphy 10,000 1.64
Robert L. Peters 20,000 3.28
Lawrence Piper 5,000 0.82
Michael G. Sanchez 10,000 1.64
Harry R. Trevett 40,000 6.56
Edward E. Wilson 20,000 3.28
Marshall E. Wood 20,000 3.28
------- -----
TOTAL 330,000 54.10%
</TABLE>
- ---------------------------
(1) In addition, each of the organizers will be granted warrants to
purchase additional shares of common stock. Each organizer will receive
up to a maximum of one warrant for every two shares of common stock he
or she has purchased in the offering. Each warrant will entitle the
organizer to purchase one additional share of common stock. The
warrants will become exercisable in equal parts beginning on the date
that First National Bank commences business and on each of the four
succeeding anniversaries of such date. The warrants will expire five
years after the date of grant and will be exercisable at the public
offering price of $10.00 per share. See "Terms of the
Offering--Purchases by Organizers of First Capital" beginning on page
12.
34
<PAGE> 37
CERTAIN TRANSACTIONS
Once First National Bank opens for business, it is anticipated that it
will extend loans from time to time to certain of its directors, executive
officers, their associates, and members of the immediate families of the
directors. These loans will be made in the ordinary course of business on
substantially the same terms, including interest rates, collateral and repayment
terms, as those prevailing at the time for comparable transactions with persons
not affiliated with First Capital or First National Bank, and will not involve
more than the normal risk of collectibility or present other unfavorable
features.
The rental real estate firm of Miller, Lee & McCarroll, Inc., of which
David F. Miller is part-owner and Lorie L. McCarroll is Vice President,
Secretary, and part-owner, is lessor of First Capital's temporary office space
at 1875 South 14th Street, Fernandina Beach, Florida 32034, and receives monthly
rental payments of $1,200 thereon from First Capital. Based on available market
data, the Board of Directors has determined that the lease rate is competitive.
Ms. McCarroll and Mr. Miller are directors of First Capital and First National
Bank.
The real property on which the permanent facility will be built was
acquired from Bosco Enterprises. One of the principals of Bosco Enterprises is
the husband of Organizer and Director Lorie McCarroll. The organizers have
received an appraisal from an independent third party appraising the value of
the property at the purchase price, $265,000.
First Capital has acquired key-man life insurance on the life of
Michael G. Sanchez from Morrow Insurance Group, Inc. Edward E. Wilson, an
organizer and director of First Capital and First National Bank, is the owner of
Morrow Insurance Group, Inc. Although the policy is being underwritten by an
independent insurance company, it is expected that Mr. Wilson will receive
commissions as an agent for his involvement with the transaction.
DESCRIPTION OF CAPITAL STOCK
The authorized capital stock of First Capital consists of 10,000,000
shares of common stock, $.01 par value, and 1,000,000 shares of preferred stock,
$.01 par value. No shares of either type are presently issued and outstanding.
COMMON STOCK
The holders of common stock are entitled to elect the members of the
Board of Directors of First Capital and such holders are entitled to vote as a
class on all matters required or permitted to be submitted to the shareholders
of First Capital.
35
<PAGE> 38
No holder of any class of stock of First Capital has preemptive rights
with respect to the issuance of shares of that or any other class of stock and
the common stock is not entitled to cumulative voting rights with respect to the
election of directors.
The holders of common stock are entitled to dividends and other
distributions if, as, and when declared by the Board of Directors out of assets
legally available therefor. Upon the liquidation, dissolution, or winding up of
First Capital, the holder of each share of common stock will be entitled to
share equally in the distribution of First Capital's assets. The holders of
common stock are not entitled to the benefit of any sinking fund provision. The
shares of common stock of First Capital are not subject to any redemption
provisions, nor are they convertible into any other security or property of
First Capital. All outstanding shares of each class of common stock are, and the
shares to be outstanding upon completion of this offering will be, fully paid
and nonassessable.
PREFERRED STOCK
The Board of Directors may, without approval of First Capital's
shareholders, from time to time authorize the issuance of preferred stock in one
or more series for such consideration and, within certain limits, with such
relative rights, preferences and limitations as the Board of Directors may
determine. The relative rights, preferences and limitations that the Board of
Directors has the authority to determine as to any such series of preferred
stock include, among other things, dividend rights, voting rights, conversion
rights, redemption rights and liquidation preferences. Because the Board of
Directors has the power to establish the relative rights, preferences and
limitations of each series of preferred stock, it may afford to the holders of
any such series preferences and rights senior to the rights of the holders of
shares of common stock. Although the Board of Directors has no intention at the
present time of doing so, it could cause the issuance of preferred stock that
could discourage an acquisition attempt or other transactions that some, or a
majority of, the shareholders might believe to be in their best interests or in
which the shareholders might receive a premium for their shares of common stock
over the market price of such shares.
BOARD OF DIRECTORS
The initial Board of Directors of First Capital consists of fifteen
directors. The directors are divided into three classes, designated Class I,
Class II and Class III. Each class will consist, as nearly as may be possible,
of one-third of the total number of directors constituting the entire Board of
Directors. The term of First Capital's initial Class I directors will expire at
its first annual meeting of shareholders; the term of its initial Class II
directors will expire at the second annual meeting of shareholders; and the term
of its initial Class III directors will expire at the third annual meeting of
shareholders. At each annual meeting of shareholders, successors to the class of
directors whose term expires at the annual meeting will be elected for a
three-year term. If the number of directors is changed, an increase or decrease
will be apportioned among the classes so as to maintain the number of directors
in each class as nearly equal as possible, and any additional director of any
class elected to fill a vacancy resulting from an increase in such class will
hold office for a term that will coincide with the remaining term of that class,
but in no event will a decrease in the number of directors shorten the term of
any incumbent director. Any director elected to fill a vacancy not resulting
from an increase in the number of directors will have the same remaining term as
that of his predecessor. Except in the case of removal from office, any vacancy
on the Board of Directors, will be filled by a majority vote of the remaining
directors then in office.
Any director may be removed, with or without cause, at any regular or
special meeting of shareholders called for that purpose, and his or her position
filled by another person nominated and elected for that purpose by the holders
of 75 percent of the outstanding shares of First Capital's common stock.
36
<PAGE> 39
The effect of the classified Board of Directors is to make it more
difficult for a person, entity or group to effect a change in control of First
Capital through the acquisition of a large block of its voting stock.
REQUIREMENTS FOR SUPERMAJORITY APPROVAL OF TRANSACTIONS
First Capital's Articles of Incorporation contain provisions requiring
supermajority shareholder approval to effect certain extraordinary corporate
transactions which are not approved by the Board of Directors. The Articles of
Incorporation require the affirmative vote or consent of the holders of at least
two-thirds (66-2/3%) of the shares of each class of common stock of First
Capital entitled to vote in elections of directors to approve any merger,
consolidation, disposition of all or a substantial part of the assets of First
Capital or a subsidiary of First Capital, exchange of securities requiring
shareholder approval, or liquidation of First Capital ("Covered Transaction"),
if any person who, together with his affiliates and associates owns beneficially
5% or more of any voting stock of First Capital ("Interested Person"), is a
party to the transaction; provided that three-fourths (75%) of the entire Board
of Directors of First Capital has not approved the transaction. In addition, the
Articles of Incorporation require the separate approval by the holders of a
majority of the shares of each class of stock of First Capital entitled to vote
in elections of directors which are not beneficially owned, directly or
indirectly, by an Interested Person, of any merger, consolidation, disposition
of all or a substantial part of the assets of First Capital or a subsidiary of
First Capital, or exchange of securities requiring shareholder approval
("Business Combination"), if an Interested Person is a party to such
transaction; provided, that such approval is not required if (a) the
consideration to be received by the holders of the stock of First Capital meets
certain minimal levels determined by a formula under the Articles of
Incorporation (generally the highest price paid by the Interested Person for any
shares which he has acquired), (b) there has been no reduction in the average
dividend rate from that which was obtained prior to the time the Interested
Person became such, and (c) the consideration to be received by shareholders who
are not Interested Persons shall be paid in cash or in the same form as the
Interested Person previously paid for shares of such class of stock. These
Articles of First Capital's Articles of Incorporation, as well as the Article
establishing a classified Board of Directors, may be amended, altered, or
repealed only by the affirmative vote or consent of the holders of at least 75
percent of the shares of each class of stock of First Capital entitled to vote
in elections of directors.
The effect of these provisions is to make it more difficult for a
person, entity or group to effect a change in control of First Capital through
the acquisition of a large block of its voting stock.
LIMITATIONS ON LIABILITY AND INDEMNIFICATION OF OFFICERS AND DIRECTORS
As provided under Florida law, First Capital's Articles of
Incorporation provide that a director shall not be personally liable to First
Capital or its shareholders for monetary damages for breach of duty of care or
any other duty owed to First Capital as a director, except that such provision
shall not eliminate or limit the liability of a director (a) for any
appropriation, in violation of his duties, of any business opportunity of First
Capital, (b) for acts or omissions which involve intentional misconduct or a
knowing violation of law, (c) for unlawful corporate distributions, or (d) for
any transaction from which the director received an improper personal benefit.
Article VI of First Capital's Bylaws provides that First Capital shall
indemnify a director who has been successful in the defense of any proceeding to
which he was a party or in defense of any claim, issue or matter therein because
he is or was a director of First Capital, against reasonable expenses incurred
by him in connection with such defense.
First Capital's Bylaws also provide that First Capital is required to
indemnify any director, officer, employee or agent made a party to a proceeding
because he is or was a director, employee or agent against
37
<PAGE> 40
liability incurred in the proceeding if he acted in a manner he believed in good
faith or to be in or not opposed to the best interests of First Capital and, in
the case of any criminal proceeding, he had no reasonable cause to believe his
conduct was unlawful. Determination concerning whether or not the applicable
standard of conduct has been met can be made by (a) a disinterested majority of
the Board of Directors, (b) a majority of a committee of disinterested
directors, (c) independent legal counsel, or (d) an affirmative vote of a
majority of shares held by disinterested shareholders. No indemnification may be
made to or on behalf of a director, officer, employee or agent (i) in connection
with a proceeding by or in the right of First Capital in which such person was
adjudged liable to First Capital or (ii) in connection with any other proceeding
in which such person was adjudged liable on the basis that personal benefit was
improperly received by him.
First Capital may, if authorized by its shareholders by a majority of
votes which would be entitled to be cast in a vote to amend its Articles of
Incorporation, indemnify or obligate itself to indemnify a director, officer,
employee or agent made a party to a proceeding, including a proceeding brought
by or in the right of First Capital.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 (the "Act") may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the foregoing provisions, or otherwise,
First 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.
STATUTORY ANTI-TAKEOVER PROVISIONS
The State of Florida has statutory provisions relating to business
combinations between a Florida corporation and an "interested shareholder" that
outline the statutory requirements to effect such transactions. Florida also has
statutory provisions relating to "control-share acquisitions." However, these
statutory anti-takeover provisions do not apply to First Capital because it has
elected not to be governed by these provisions in its Articles of Incorporation.
LEGAL PROCEEDINGS
There are no material pending legal proceedings to which First Capital
or First National Bank is a party or of which any of their properties are
subject; nor are there material proceedings known to First Capital or First
National Bank to be contemplated by any governmental authority; nor are there
material proceedings known to First Capital or First National Bank, pending or
contemplated, in which any director, officer or affiliate or any principal
security holder of First Capital or First National Bank, or any associate of any
of the foregoing is a party or has an interest adverse to First Capital or First
National Bank.
LEGAL MATTERS
Certain legal matters in connection with the shares of Common Stock
offered hereby have been passed upon for First Capital by Smith, Gambrell &
Russell, LLP, Atlanta, Georgia, counsel to First Capital.
38
<PAGE> 41
EXPERTS
The financial statements of First Capital as of October 31, 1998
included in this Prospectus have been audited by Porter Keadle Moore LLP,
independent certified public accountants, as stated in their report, which is
included herein, and has been so included in reliance upon the report of such
firm given upon their authority as experts in accounting and auditing.
ADDITIONAL INFORMATION
First Capital has filed with the Securities and Exchange Commission,
Washington, D.C. 20549, a Registration Statement (herein, together with all
amendments thereto, called the "Registration Statement") under the Securities
Act of 1933, as amended, with respect to the shares of common stock offered
hereby. This Prospectus does not contain all of the information included in the
Registration Statement and the exhibits and schedules thereto. For further
information with respect to First Capital and the common stock, reference is
hereby made to the Registration Statement and the exhibits and schedules
thereto. In addition, First Capital will provide, without charge, to each person
who receives a prospectus, upon written or oral request of such person, a copy
of any of the information that was incorporated by reference in the prospectus.
Such request shall be directed to First Capital either at its initial address at
1875A South 14th Street, Fernandina Beach, Florida 32034 or at its initial
telephone number at (904) 321-0400.
39
<PAGE> 42
FINANCIAL STATEMENTS
FIRST CAPITAL BANK HOLDING CORPORATION
(A DEVELOPMENT STAGE CORPORATION)
OCTOBER 31, 1998
C O N T E N T S
---------------
<TABLE>
<CAPTION>
P A G E
-------
<S> <C>
Report of Independent Certified Public Accountants........................................................ F-3
Balance Sheet............................................................................................. F-4
Statement of Operations................................................................................... F-5
Statement of Changes in Stockholder's Deficit............................................................. F-6
Statement of Cash Flows................................................................................... F-7
Notes to Financial Statements............................................................................. F-8
</TABLE>
F-1
<PAGE> 43
FIRST CAPITAL BANK HOLDING CORPORATION
(A DEVELOPMENT STAGE CORPORATION)
FINANCIAL STATEMENTS
OCTOBER 31, 1998
(WITH INDEPENDENT ACCOUNTANT'S REPORT THEREON)
F-2
<PAGE> 44
[PORTER KEADLE MOORE, LLP LETTERHEAD]
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
To the Board of Directors
First Capital Bank Holding Corporation
We have audited the accompanying balance sheet of First Capital Bank Holding
Corporation (a development stage corporation) as of October 31, 1998, and the
related statements of operations, changes in stockholder's deficit and cash
flows for the period from July 29, 1998 (inception) to October 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 audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of First Capital Bank Holding
Corporation as of October 31, 1998 and the results of its operations and its
cash flows from July 29, 1998 (inception) to October 31, 1998 in conformity with
generally accepted accounting principles.
The accompanying financial statements have been prepared assuming that First
Capital Bank Holding Corporation will continue as a going concern. As discussed
in note 1 to the financial statements, the Company is in the organization stage
and has not commenced operations. Also, as discussed in note 3, the Company's
future operations are dependent on obtaining capital through an initial stock
offering and obtaining the necessary final regulatory approvals. These factors
and the expense associated with development of a new banking institution raise
substantial doubt about the Company's ability to continue as a going concern.
Management's plans in regard to these matters are described in note 3. The
financial statements do not include any adjustments relating to the
recoverability of reported asset amounts or the amount of liabilities that might
result from the outcome of this uncertainty.
/s/ Porter Keadle Moore, LLP
----------------------------------------
Atlanta, Georgia
December 2, 1998
F-3
<PAGE> 45
FIRST CAPITAL BANK HOLDING CORPORATION
(A DEVELOPMENT STAGE CORPORATION)
BALANCE SHEET
OCTOBER 31, 1998
<TABLE>
<S> <C>
Assets
------
Cash $ 3,766
Land 265,000
Deferred offering expenses 10,685
Other assets 26,424
---------
$ 305,875
=========
Liabilities and Stockholder's Deficit
-------------------------------------
Accounts payable and accrued expenses $ 9,772
Note payable - line of credit 430,678
---------
Current liabilities 440,450
---------
Stockholder's deficit:
Preferred stock, par value $.01, 1,000,000 shares authorized;
no shares issued or outstanding --
Common stock, par value $.01, 10,000,000 shares authorized;
10 shares issued and outstanding --
Additional paid-in capital 500
Deficit accumulated during the development stage (134,575)
---------
(134,075)
Less: Common stock subscribed (500)
---------
Total stockholder's deficit (134,575)
---------
$ 305,875
=========
</TABLE>
See accompanying notes to financial statements.
F-4
<PAGE> 46
FIRST CAPITAL BANK HOLDING CORPORATION
(A DEVELOPMENT STAGE CORPORATION)
STATEMENT OF OPERATIONS
FOR THE PERIOD FROM JULY 29, 1998 (INCEPTION) TO OCTOBER 31, 1998
<TABLE>
<S> <C>
Expenses:
Salaries and employee benefits $ 34,551
Interest 6,340
Other operating 93,684
--------
Net loss $134,575
========
</TABLE>
See accompanying notes to financial statements.
F-5
<PAGE> 47
FIRST CAPITAL BANK HOLDING CORPORATION
(A DEVELOPMENT STAGE CORPORATION)
STATEMENT OF CHANGES IN STOCKHOLDER'S DEFICIT
FOR THE PERIOD FROM JULY 29, 1998 (INCEPTION) TO OCTOBER 31, 1998
<TABLE>
<CAPTION>
Deficit
Accumulated
Additional During the Common
Preferred Common Paid-in Development Stock
Stock Stock Capital Stage Subscribed Total
--------- ------ ----------- ----------- ---------- -------
<S> <C> <C> <C> <C> <C> <C>
Common stock subscribed $-- -- 500 -- (500) --
Net loss -- -- -- (134,575) -- (134,575)
-------- -------- -------- -------- -------- --------
Balance, October 31, 1998 $-- -- 500 (134,575) (500) (134,575)
======== ======== ======== ======== ===== ========
</TABLE>
See accompanying notes to financial statements.
F-6
<PAGE> 48
FIRST CAPITAL BANK HOLDING CORPORATION
(A DEVELOPMENT STAGE CORPORATION)
STATEMENT OF CASH FLOWS
FOR THE PERIOD FROM JULY 29, 1998 (INCEPTION) TO OCTOBER 31, 1998
<TABLE>
<S> <C>
Cash flows from operating activities:
Net loss $(134,575)
Adjustments to reconcile net loss to net cash used in
operating activities:
Increase in other assets (26,424)
Increase in accounts payable and accrued expenses 9,772
---------
Net cash used in operating activities (151,227)
---------
Cash flows from investing activities:
Purchase of land (265,000)
Payments for stock offering expenses (10,685)
---------
Net cash used in investing activities (275,685)
---------
Cash flows from financing activities, consisting of
proceeds from note payable 430,678
---------
Net increase in cash 3,766
Cash at beginning of period --
---------
Cash at end of period $ 3,766
=========
Supplemental disclosure of cash flow information:
Interest paid $ 6,340
=========
Noncash financing activities:
Common stock subscribed $ 500
=========
</TABLE>
See accompanying notes to financial statements.
F-7
<PAGE> 49
FIRST CAPITAL BANK HOLDING CORPORATION
(A DEVELOPMENT STAGE CORPORATION)
NOTES TO FINANCIAL STATEMENTS
(1) ORGANIZATION
First Capital Bank Holding Corporation (the Company) was incorporated
for the purpose of becoming a bank holding company. The Company intends
to acquire 100% of the outstanding common stock of First National Bank
of Nassau County (the Bank) (in organization), which will operate in
the Fernandina Beach, Florida area. The organizers of the Bank filed a
joint application to charter the Bank with the Office of the
Comptroller of Currency and the Federal Deposit Insurance Corporation
on September 30, 1998. Provided that the application is timely approved
and necessary capital is raised, it is expected that operations will
commence in the second quarter of 1999.
Operations through October 31, 1998 relate primarily to expenditures by
the organizers for incorporating and organizing the Company. All
expenditures by the organizers are considered expenditures of the
Company.
The Company plans to raise between $6,100,000 and $10,000,000 through
an offering of its common stock at $10 per share, of which $6,000,000
will be used to capitalize the Bank. The organizers and directors
expect to subscribe for a minimum of approximately $3,000,000 of the
Company's stock.
In connection with the Company's formation and initial offering,
warrants will be issued to the organizing stockholders. The warrants
allow each holder to purchase one additional share of common stock for
each two shares purchased in connection with the initial offering and
are exercisable on each of the four succeeding anniversaries of the
date of opening of the Bank at the initial offering price of $10 per
share. These warrants expire five years after the date of grant. The
actual number of warrants granted will be limited so that the
organizers will own no more than 23% of the total number of shares
outstanding on a fully diluted basis. The Company has also reserved
100,000 shares for the issuance of options under an employee incentive
stock option plan.
(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
ORGANIZATION COSTS
Costs incurred for the organization of the Company and the Bank
(consisting principally of legal, accounting, consulting and
incorporation fees) are being expensed as incurred.
DEFERRED OFFERING EXPENSES
Costs incurred in connection with the stock offering, consisting of
direct, incremental costs of the offering, are being deferred and will
be offset against the proceeds of the stock sale as a charge to
additional paid in capital.
PRE-OPENING EXPENSES
Costs incurred for overhead and other operating expenses are included
in the current period's operating results.
PROFORMA NET LOSS PER COMMON SHARE
Proforma net loss per common share is calculated by dividing net loss
by the minimum number (610,000) of common shares, which would be
outstanding should the offering be successful, as prescribed in Staff
Accounting Bulletin Topic 1:B. The proforma net loss per share for the
period ended October 31, 1998 was $0.22 per share.
F-8
<PAGE> 50
FIRST CAPITAL BANK HOLDING CORPORATION
(A DEVELOPMENT STAGE CORPORATION)
NOTES TO FINANCIAL STATEMENTS, CONTINUED
(3) LIQUIDITY AND GOING CONCERN CONSIDERATIONS
The Company incurred a net loss of $134,575 for the period from July
29, 1998 (inception) to October 31, 1998. At October 31, 1998,
liabilities exceeded assets by $134,575.
At October 31, 1998, the Company is funded by a line of credit from a
bank. Management believes that the current level of expenditures is
well within the financial capabilities of the organizers and adequate
to meet existing obligations and fund current operations, but obtaining
final regulatory approvals and commencing banking operations is
dependent on successfully completing the stock offering.
To provide permanent funding for its operation, the Company is
currently offering a minimum of 610,000 and a maximum of 1,000,000
shares of its common stock, $.01 par value, at $10 per share in an
initial public offering. Costs related to the organization and
registration of the Bank's common stock will be paid from the gross
proceeds of the offering. Shares issued which are outstanding at
October 31, 1998 will be redeemed concurrently with the consummation of
the offering. Should subscriptions for the minimum offering not be
obtained, amounts paid by the subscribers with their subscriptions will
be returned and the offer withdrawn.
(4) LINE OF CREDIT
Organization, offering and pre-opening costs incurred prior to the
opening for business will be funded under a $700,000 line of credit.
The terms of the existing line of credit, which is guaranteed by the
organizers, include a maturity of July 29, 1999 and interest calculated
at the prime interest rate.
(5) PREFERRED STOCK
Shares of preferred stock may be issued from time to time in one or
more series as established by resolution of the Board of Directors of
the Company. Each resolution shall include the number of shares issued,
preferences, special rights and limitations as determined by the Board.
(6) COMMITMENTS AND RELATED PARTY TRANSACTIONS
On August 19, 1998 the Company entered into an operating lease
agreement with two of the organizers for space which will serve as the
temporary main office of the Company and the Bank at a rate of $1,200
per month, subject to increase after 6 months. The lease expires on
June 30, 1999 and can be canceled with a 30 day written notice.
Land on which the main office will be constructed was purchased from a
company owned by the spouse of one of the organizers.
The Company entered into an employment agreement with its President and
Chief Executive Officer, providing for an initial term of five years
commencing August 15, 1998. The agreement provides for a base salary,
an incentive bonus based on five percent of the Company's pre-tax
earnings, and annual stock options which vest equally over five years
at $10 per share equal to the lesser of 30,000 shares or five percent
of the number of shares sold in the initial public offering.
Additionally, the Company is to maintain a $1,000,000 key man life
insurance policy, with $500,000 payable to the Company and $500,000
payable to the President's family. The agreement further provides for
other prerequisites, and subjects the President to certain noncompete
restrictions.
F-9
<PAGE> 51
FIRST CAPITAL BANK HOLDING CORPORATION
(A DEVELOPMENT STAGE CORPORATION)
NOTES TO FINANCIAL STATEMENTS, CONTINUED
(7) INCOME TAXES
At October 31, 1998, the Company had a net operating loss carryforward
for tax purposes of $6,340, which will expire in 2013, if not
previously utilized. No income tax expense or benefit was recorded for
the period ended October 31, 1998, due to this loss carryforward.
The following summarizes the sources and expected tax consequences of
future taxable deductions which comprise the net deferred taxes at
October 31, 1998:
<TABLE>
<S> <C>
Deferred tax assets:
Pre-opening expenses $ 43,315
Operating loss carryforwards 2,156
--------
Total gross deferred tax assets 45,471
Less valuation allowance (45,471)
--------
Net deferred taxes $ --
========
</TABLE>
The future tax consequences of the differences between the financial
reporting and tax basis of the Company's assets and liabilities
resulted in a net deferred tax asset. A valuation allowance was
established for the net deferred tax asset, as the realization of these
deferred tax assets is dependent on future taxable income.
F-10
<PAGE> 52
APPENDIX "A"
First Capital Bank Holding Corporation
1875A South 14th Street
Fernandina Beach, Florida 32034
________________, 1999
The Bankers Bank
3715 Northside Parkway
300 North Creek
Suite 800
Atlanta, Georgia 30327
Attention: [name]
Gentlemen:
First Capital Bank Holding Corporation, a Florida corporation (the
"Company"), proposes to offer for sale up to 1,000,000 shares of its $.01 par
value common stock (the "Common Stock"), which shares shall be registered under
the Securities Act of 1933, as amended, by the filing of a Registration
Statement on Form SB-2 with the Securities and Exchange Commission. Shares will
be offered at a price of $10.00 each. The minimum subscription per subscriber is
100 shares.
(1) The Company hereby appoints and designates you as Escrow Agent for the
purposes set forth herein. By your signature hereto, you acknowledge
and accept said appointment and designation. The Company understands
that you, by accepting said appointment and designation, in no way
endorse the merits of the offering of the shares described herein. The
Company agrees to notify any person acting on its behalf that your
position as Escrow Agent does not constitute such an endorsement, and
to prohibit said persons from the use of your name as an endorser of
such offering. The Company further agrees to allow you to review any
sales literature in which your name appears and which is used in
connection with such offering.
(2) The Company shall deliver all payments received in purchase of the
shares (the "Subscription Funds") to you in the form in which they are
received by noon of the next business day after their receipt by the
Company, and the Company shall deliver to you within five (5) calendar
days copies of written acceptances of the Company for shares in the
Company for which the Subscription Funds represent payment. Upon
receipt of such written acceptance by the Company, the Escrow Agent
shall deposit such funds into the Escrow Account. The Company shall
also deliver to you copies of completed Subscription Agreements for
each subscriber, along with such subscriber's name, address, number of
shares subscribed and social security or taxpayer identification
number.
(3) Subscription Funds shall be held and disbursed by you in accordance
with the terms of this Agreement.
A-1
<PAGE> 53
________________, 1999
(4) In the event any Subscription Funds are dishonored for payment for any
reason, you agree to orally notify the Company immediately thereof and
to confirm same in writing and to return the dishonored Subscription
Funds to the Company in the form in which they were delivered to you.
(5) Should the Company elect to accept a subscription for less than the
number of shares shown in the purchaser's Subscription Agreement, by
indicating such lesser number of shares on the written acceptance of
the Company transmitted to you, you shall deposit such payment in the
escrow account and then remit within ten (10) calendar days after such
deposit to such subscriber at the address shown in his Subscription
Agreement that amount of his Subscription Funds in excess of the amount
which constitutes full payment for the number of subscribed shares
accepted by the Company as shown in the Company's written acceptance,
without interest or diminution. Said address shall be provided by the
Company to you as requested.
(6) As used herein, the term "Total Receipts" shall mean the sum of all
Subscription Funds delivered to you pursuant to Paragraph (2) hereof,
less all Subscription Funds returned pursuant to Paragraphs (4) and (5)
hereof.
(a) As used herein, the term "Expiration Date" shall mean the date
which marks the 90th day after the date of the Prospectus;
provided, however, in the event that you are given oral
notification, followed in writing, by the Company that it has
elected to extend the offering for an additional period of 90
days after the initial period, then the Expiration Date shall
mean the date which marks the 180th day after the date of the
Prospectus; provided further, in the event that you are given
oral notification, followed in writing, by the Company that it
has elected to extend the offering for an additional period of
90 days after the first extension, then the Expiration Date
shall mean the date which marks the 270th day after the date
of the Prospectus.
(b) If Total Receipts equal $6,100,000 on or before the Expiration
Date, you shall, on the Closing Date, no later than 10:00
A.M., Eastern Daylight Time, upon receipt of 24-hour written
instructions from the Company, remit all amounts representing
Subscription Funds, plus any profits or earnings thereon after
deducting your fees, if any, held by you pursuant hereto in
accordance with such instructions.
(7) If (i) Total Receipts are less than $6,100,000 as of 5:00 P.M.,
Eastern Daylight Time on the Expiration Date, or (ii) the offering is
canceled by the Company at any time prior to the Expiration Date, then
you shall promptly remit to each subscriber at the address set forth in
his Subscription Agreement an amount equal to the amount of his
Subscription Funds thereunder, adjusted for his allocated share of any
net profits earned on the investment of the Subscription Funds as set
forth in Paragraph 8, below. The Company hereby agrees to provide to
you in writing the specific allocations of net profits attributable to
each subscriber hereunder.
(8) Pending disposition of the Subscription Funds under this Agreement, you
are authorized, upon oral instructions, followed in writing, given by
Michael G. Sanchez, to invest Subscription Funds in Federal Funds, in
short-term direct obligations of the United States government, in
short-term FDIC or FSLIC insured certificates of deposit, and/or in
Fidelity Institutional U.S. Treasury Cash Portfolio, for short-term
obligations of the United States government, but in any case with
maturities of 90 days or less. For purposes of Paragraph 7 above, the
specific allocations of net profits
A-2
<PAGE> 54
________________, 1999
attributable to each subscriber shall be determined by the Company as
follows: each subscriber's allocated share of earnings on the
Subscription Funds, after deducting your fees, if any, shall be that
fraction (i) the numerator of which is the dollar amount of such
subscriber's accepted subscription multiplied by the number of days
between the date of acceptance of the purchaser's subscription and the
date of the offering's termination, inclusive (the subscriber's "Time
Subscription Factor"), and (ii) the denominator of which is the
aggregate Time Subscription Factors of all purchasers depositing
Subscription Funds in the escrow account.
(9) Your obligations as Escrow Agent hereunder shall terminate upon your
transferring all funds you hold hereunder pursuant to the terms of
Paragraphs (4) through (7) herein, as applicable.
(10) As used herein, "Closing Date" shall mean the third business day
following the date of receipt by you of Total Receipts aggregating
$6,100,000 and executed Subscription Agreements and copies of written
acceptances of the Company in connection therewith.
(11) You shall be protected in acting upon any written notice, request,
waiver, consent, certificate, receipt, authorization, or other paper or
document which you believe to be genuine and what it purports to be.
(12) You shall not be liable for anything which you may do or refrain from
doing in connection with this Escrow Agreement, except your own gross
negligence or willful misconduct.
(13) You may confer with legal counsel in the event of any dispute or
question as to the construction of any of the provisions hereof, or
your duties hereunder, and you shall incur no liability and you shall
be fully protected in acting in accordance with the opinions and
instructions of such counsel. Any and all expenses and legal fees in
this regard are payable from the Subscription Funds unless paid by the
Company.
(14) In the event of any disagreement between the Company and any other
person resulting in adverse claims and demands being made in connection
with any Subscription Funds involved herein or affected hereby, you
shall be entitled to refuse to comply with any such claims or demands
as long as such disagreement may continue, and in so refusing, shall
make no delivery or other disposition of any Subscription Funds then
held by you under this Agreement, and in so doing you shall be entitled
to continue to refrain from acting until (a) the right of adverse
claimants shall have been finally settled by binding arbitration or
finally adjudicated in a court assuming and having jurisdiction of the
Subscription Funds involved herein or affected hereby or (b) all
differences shall have been adjusted by agreement and you shall have
been notified in writing of such agreement signed by the parties
thereto. In the event of such disagreement, you may, but need not,
tender into the registry or custody of any court of competent
jurisdiction all money or property in your hands under the terms of
this Agreement, together with such legal proceedings as you deem
appropriate and thereupon to be discharged from all further duties
under this Escrow Agreement. The filing of any such legal proceeding
shall not deprive you of your compensation earned prior to such filing.
You shall have no obligation to take any legal action in connection
with this Agreement or towards its enforcement, or to appear in,
prosecute or defend any action or legal proceeding which would or might
involve you in any cost, expense, loss or liability unless
indemnification shall be furnished.
A-3
<PAGE> 55
________________, 1999
(15) You may resign for any reason, upon thirty (30) days written notice to
the Company. Upon the expiration of such thirty (30) day notice period,
you may deliver all Subscription Funds and copies of Subscription
Agreements in your possession under this Escrow Agreement to any
successor Escrow Agent appointed by the Company, or if no successor
Escrow Agent has been appointed, to any court of competent
jurisdiction. Upon either such delivery, you shall be released from any
and all liability under this Escrow Agreement. A termination under this
paragraph shall in no way change the terms of paragraphs 13 and 14
affecting reimbursement of expenses, indemnity and fees. You shall have
the right to deduct from the Subscription Funds transferred to any
successor Escrow Agent any outstanding and unpaid expenses or fees.
(16) You agree to charge your customary and normal fee for your services
hereunder. A copy of the current schedule is attached hereto. The fee
schedule may be modified from time to time. The acceptance fee and
expenses shall be paid in advance or at closing by the Company. Any
subsequent fees and expenses will be paid by the Company upon receipt
of invoice.
(17) All notices and communications hereunder shall be in writing and shall
be deemed to be duly given if sent by registered or certified mail,
return receipt requested, to the respective addresses set forth herein.
You shall not be charged with knowledge of any fact, including but not
limited to performance or non-performance of any condition, unless you
have actually received written notice thereof from the Company or its
authorized representative clearly referring to this Escrow Agreement.
(18) The rights created by this Escrow Agreement shall inure to the benefit
of, and the obligations created hereby shall be binding upon the
successors and assigns of you and the parties hereto. Notwithstanding
the foregoing, the Company may not assign its rights hereunder without
your prior written consent.
(19) This Escrow Agreement shall be construed and enforced according to the
laws of the State of Florida.
(20) This Escrow Agreement shall terminate and you shall be discharged of
all responsibility hereunder at such time as you shall have completed
your duties hereunder.
(21) This Escrow Agreement may be executed in several counterparts, which
taken together shall constitute a single document.
(22) This Escrow Agreement constitutes the entire understanding and
agreement of the parties hereto with respect to the transactions
described herein and supersedes all prior agreements or understandings,
written or oral, between the parties with respect thereto. Further,
this Escrow Agreement may only be amended by a written amendment signed
by the parties hereto.
(23) If any provision of this Escrow Agreement is declared by a court of
competent jurisdiction to be invalid, void or unenforceable, the
remaining provisions shall nevertheless continue in full force and
effect without being impaired or invalidated in any way.
(24) The Company shall provide you with its Employer Identification Number
as assigned by the Internal Revenue Service. Additionally, the Company
shall complete and return to you any and all tax forms
A-4
<PAGE> 56
________________, 1999
or reports required to be maintained or obtained by you. In the event
that Subscription Funds are returned to subscribers pursuant to
paragraph 7 hereof, you shall, based upon the information available to
you, file with the Internal Revenue Service and send to each subscriber
a Form 1099-INT with respect to contributions of interest to
subscribers. All interest or other income earned under this Escrow
Agreement which is payable to the Company pursuant to paragraph 6
hereof shall be allocated and paid as directed by the Company and
reported to the Internal Revenue Service as having been so allocated
and paid.
(25) Your signature hereto is your consent that a signed copy hereof may be
filed with the various regulatory authorities of the State of Florida
and with any Federal Government agencies or regulatory authorities.
Please indicate your acceptance of this Agreement by executing a copy
of this letter and returning it to the undersigned.
Very truly yours,
FIRST CAPITAL BANK HOLDING CORPORATION
By:
-------------------------------------
Michael G. Sanchez
President and Chief Executive Officer
Attest:
- ----------------------------------
Secretary
(CORPORATE SEAL)
ACCEPTED AND AGREED:
THE BANKERS BANK
By:
-------------------------------------
Vice President
A-5
<PAGE> 57
APPENDIX "B"
FIRST CAPITAL BANK HOLDING CORPORATION
SUBSCRIPTION AGREEMENT
To: First Capital Bank Holding Corporation
1875A South 14th Street
Fernandina Beach, Florida 32034
Ladies and Gentlemen:
You have informed me that First Capital Bank Holding Corporation (the
"Company") is offering up to 1,000,000 shares of its $.01 par value common stock
(the "Common Stock") at a price of $10.00 per share as described in and offered
pursuant to the Prospectus furnished to the undersigned herewith (the
"Prospectus"). In addition, you have informed me that the minimum subscription
is 100 shares.
1. SUBSCRIPTION. Subject to the terms and conditions hereof, the
undersigned hereby tenders this subscription, together with
payment in United States currency by check, bank draft or
money order payable to "The Bankers Bank, Escrow Agent for
First Capital Bank Holding Corporation" or any other
consideration satisfactory to the Company (the "Funds"),
representing the payment of $10.00 per share for the number of
shares of the Common Stock indicated below.
2. ACCEPTANCE OF SUBSCRIPTION. It is understood and agreed that
the Company shall have the right to accept or reject this
subscription in whole or in part, for any reason whatsoever.
The Company shall reject this subscription, if at all, in
writing within ten business days after receipt of this
subscription. The Company may reduce the number of shares for
which the undersigned has subscribed, indicating acceptance of
less than all of the shares subscribed on its written form of
acceptance.
3. ACKNOWLEDGMENTS. The undersigned hereby acknowledges receipt
of a copy of the Prospectus and agrees to be bound by the
terms of this Agreement and the Escrow Agreement.
4. REVOCATION. The undersigned agrees that once this Subscription
Agreement is accepted by the Company, it may not be withdrawn.
Therefore, until the earlier of the expiration of five
business days after receipt by the Company of this
Subscription Agreement or acceptance of this Subscription
Agreement by the Company, the undersigned may withdraw this
subscription and receive a full refund of the subscription
price. The undersigned agrees that, except as provided in this
Section 4, he or she shall not cancel, terminate or revoke
this Subscription Agreement or any agreement of the
undersigned made hereunder and that this Subscription
Agreement shall survive the death or disability of the
undersigned.
BY EXECUTING THIS SUBSCRIPTION AGREEMENT, THE SUBSCRIBER IS NOT WAIVING ANY
RIGHTS HE OR SHE MAY HAVE UNDER FEDERAL SECURITIES LAWS, INCLUDING THE
SECURITIES ACT OF 1933 AND THE SECURITIES EXCHANGE ACT OF 1934.
B-1
<PAGE> 58
Please fill in the information requested below, make your check payable
to "The Bankers Bank, Escrow Agent for First Capital Bank Holding Corporation",
and mail the Subscription Agreement, Stock Certificate Registration
Instructions, and check to the attention of Michael G. Sanchez, President, First
Capital Bank Holding Corporation, 1875A South 14th Street, Fernandina Beach,
Florida 32034.
-------------------------------------
No. of Shares Subscribed (Signature of Subscriber)
-------------------------------------
Funds Tendered ($10.00 Name (Please Print or Type)
per share subscribed)
Date:
--------------------------------
Phone Number:
(Home)
--------------------------------
(Office)
------------------------------
Residence Address:
-------------------------------------
-------------------------------------
-------------------------------------
City, State and Zip Code
-------------------------------------
Social Security Number or other
Taxpayer Identification Number
B-2
<PAGE> 59
STOCK CERTIFICATE REGISTRATION INSTRUCTIONS
_______________________________________________________________________________
Name
_______________________________________________________________________________
Additional Name if Tenant in Common or Joint Tenant
Mailing Address:_______________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
Social Security Number or other Taxpayer Identification Number:_______________
Number of Shares to be registered in above name(s): _____________
Legal form of ownership:
<TABLE>
<S> <C>
___ Individual ___ Joint Tenants with Rights of Survivorship
___ Tenants in Common ___ Uniform Gift to Minors
___ Other _____________________
</TABLE>
INFORMATION AS TO BANKING INTERESTS
1. As a prospective shareholder, I would be interested in the following services
checked below:
<TABLE>
<CAPTION>
PERSONAL BUSINESS
<S> <C> <C> <C>
(a) Checking Account ___ ___
(b) Savings Account ___ ___
(c) Certificates of Deposit ___ ___
(d) Individual Retirement Accounts ___ ___
(e) Checking Account Overdraft Protection ___ ___
(f) Consumer Loans (Auto, etc.) ___ ___
(g) Commercial Loans ___ ___
(h) Equity Line of Credit ___ ___
(i) Mortgage Loans ___ ___
(j) Revolving Personal Credit Line ___ ___
(k) Safe Deposit Box ___ ___
(l) Automatic Teller Machines (ATM's) ___ ___
</TABLE>
2. I would like our new bank to provide the following additional services:
(a)
(b)
B-3
<PAGE> 60
FORM OF ACCEPTANCE
First Capital Bank Holding Corporation
1875A South 14th Street
Fernandina Beach, Florida 32034
To:
Dear Subscriber:
First Capital Bank Holding Corporation (the "Company") acknowledges
receipt of your subscription for _____ shares of its $.01 par value Common Stock
and your check for $__________.
The Company hereby accepts your subscription for the purchase of _____
shares of its Common Stock, at $10.00 per share, for an aggregate of
$__________, effective as of the date of this letter.
Your stock certificate(s) representing shares of Common Stock duly
authorized and fully paid will be issued to you as soon as practicable after all
Subscription Funds are released to the Company from the Subscription Escrow
Account, all as described in the Subscription Agreement executed by you and in
the Prospectus furnished to you. In the event that (i) the offering is canceled,
or (ii) the minimum number of subscriptions (610,000 shares) is not obtained, or
(iii) the Company shall not have received approval from the Federal Reserve
Board to become a bank holding company, or (iv) First National Bank shall not
have received charter approval from the Office of the Comptroller of the
Currency and approval for deposit insurance from the Federal Deposit Insurance
Corporation, your Subscription Funds will be returned to you, adjusted for net
profits from the investment of such funds, if any, as described in the
Prospectus.
If this acceptance is for a lesser number of shares than that number
subscribed by you as indicated in your Subscription Agreement, your payment for
shares of Common Stock in excess of the number of shares accepted hereby will be
refunded to you by mail, without interest, within ten (10) days of the date
hereof.
Very Truly Yours,
FIRST CAPITAL BANK HOLDING CORPORATION
By: _______________________________
Michael G. Sanchez
President and Chief Executive Officer
B-4
<PAGE> 61
- -------------------------------------------------------------------------------
WE HAVE NOT AUTHORIZED ANY DEALER, SALESPERSON OR OTHER PERSON TO GIVE
ANY INFORMATION OR REPRESENT ANYTHING NOT CONTAINED IN THIS PROSPECTUS. YOU MUST
NOT RELY ON ANY UNAUTHORIZED INFORMATION. THIS PROSPECTUS DOES NOT OFFER TO SELL
OR BUY ANY SHARES IN ANY JURISDICTION WHERE IT IS UNLAWFUL. THE INFORMATION IN
THIS PROSPECTUS IS CURRENT AS OF ____________________________.
---------------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
<S> <C>
Prospectus Summary................................................................................................1
Risk Factors......................................................................................................4
Terms of The Offering............................................................................................10
Plan of Distribution.............................................................................................13
Use of Proceeds..................................................................................................14
Dividend Policy..................................................................................................16
Management's Discussion And
Analysis of Financial Condition
And Results of Operations.....................................................................................16
Business of First Capital........................................................................................17
Business of First National Bank..................................................................................18
Supervision And Regulation.......................................................................................24
Organizers And Principal
Shareholders..................................................................................................29
Management.......................................................................................................29
Security Ownership of Certain
Beneficial Owners and
Management....................................................................................................34
Certain Transactions.............................................................................................35
Description of Capital Stock.....................................................................................35
Legal Proceedings................................................................................................38
Legal Matters....................................................................................................38
Experts..........................................................................................................38
Additional Information...........................................................................................39
Financial Statements............................................................................................F-1
</TABLE>
Appendix A--Escrow Agreement
Appendix B--Subscription Materials
---------------------------
Until __________, (90 days after the date of this Prospectus), all dealers that
buy, sell or trade these securities, whether or not participating in this
offering, may be required to deliver a Prospectus. This requirement 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
FIRST CAPITAL BANK
HOLDING CORPORATION
A Bank Holding Company for
[LOGO]
FIRST NATIONAL BANK OF
NASSAU COUNTY
A Proposed National Bank
COMMON STOCK
---------------------------
PROSPECTUS
---------------------------
ALLEN C. EWING & CO.
Sales Agent
____________, 1999
-----------------------------------------------------
<PAGE> 62
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 24. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 607.0850(1) of the Florida Business Corporation Act ("FBCA")
permits a Florida corporation to indemnify any person who may be a party to any
third party proceeding by reason of the fact that such person is or was a
director, officer, employee or agent of the corporation, against liability
incurred in connection with such proceeding (including any appeal thereof) if he
acted in good faith and in a manner he reasonably believed to be in, or not
opposed to, the best interests of the corporation, and, with respect to any
criminal action or proceeding, had no reasonable cause to believe his conduct
was unlawful.
Section 607.0850(2) of the FBCA permits a Florida corporation to
indemnify any person who may be a party to a derivative action if such person
acted in any of the capacities set forth in the preceding paragraph, against
expenses and amounts paid in settlement not exceeding, in the judgement of the
board of directors, the estimated expenses of litigating the proceeding to
conclusion, actually and reasonably incurred in connection with the defense or
settlement of such proceeding (including appeals), provided that the person
acted under the standards set forth in he preceding paragraph. However, no
indemnification shall be made for any claim, issue or matter for which such
person is found to be liable unless, and only to the extent that, the court.
determines that, despite the adjudication of liability, but in view of all the
circumstances of the case, such person is fairly and reasonably entitled to
indemnification for such expenses which the court deems proper.
Section 607.0850(4) of the FBCA provides that any indemnification made
under the above provisions, unless pursuant to a court determination, may be
made only after a determination that the person to be indemnified has met the
standard of conduct described above. This determination is to be made by a
majority vote of a quorum consisting of the disinterested directors of the board
of directors, by duly selected independent legal counsel, or by a majority vote
of the disinterested shareholders. The board of directors also may designate a
special committee of disinterested directors to make this determination.
Section 607.0850(3), however, provides that a Florida corporation must
indemnify any director, or officer, employee or agent of a corporation who has
been successful in the defense of any proceeding referred to in Section
607.0850(1) or (2), or in the defense of any claim, issue or matter therein,
against expenses actually and reasonably incurred by him in connection
therewith.
Expenses incurred by a director or officer in defending a civil or
criminal proceeding may be paid by the corporation in advance of the final
disposition thereof upon receipt of an undertaking by or on behalf of such
director or officer to repay such amount if it is ultimately determined that
such director or officer is not entitled to indemnification under Section
607.0850. Expenses incurred by other employees or agents in such a proceeding
may be paid in advance of final disposition thereof upon such terms or
conditions that the board of directors deems appropriate.
The FBCA further provides that the indemnification and advancement of
payment provisions contained therein are not exclusive and it specifically
empowers a corporation to make any other further indemnification or advancement
of expenses under any bylaw, Agreement, vote of shareholders or disinterested
actions taken in other capacities while holding an office. However, a
corporation cannot indemnify or advance expenses if a judgment or other final
adjudication establishes that the actions of the director or officer were
material to the adjudicated cause of action and the director or officer (a)
violated criminal law, unless the director or officer had reasonable cause to
believe his conduct was unlawful, (b) derived an improper personal benefit from
a transaction, (c) was or is a director in a circumstance where the liability
under Section 607.0834 (relating to unlawful distributions) applies, or (d)
engages in willful misconduct or conscious disregard for the best interests of
the corporation in a proceeding by or in right of the corporation to procure a
judgment in its favor or in a proceeding by or in right of a shareholder.
II-1
<PAGE> 63
Article XI of the Company's Articles of Incorporation provide that the
Company shall indemnify any director or officer or any former director or
officer against any liability arising from any action or suit to the full extent
permitted by Florida law as referenced above.
Article VI of the Company's By-Laws provides that the Company shall
indemnify a director, officer, employee or agent who has been successful on the
merits or otherwise in the defense of any action, suit or proceeding to which he
was a party or in defense of any claim, issue or matter therein because he is or
was a director, officer, employee or agent of the Company, against reasonable
expenses incurred by him in connection with such defense.
The Company's By-Laws also provide that the Company is required to
indemnify any director, officer, employee or agent made a party to a proceeding
because he is or was a director, employee or agent against liability incurred in
the proceeding if he acted in a manner he believed in good faith or to be in or
not opposed to the best interests of the Company and, in the case of any
criminal proceeding, he had no reasonable cause to believe his conduct was
unlawful. Determination concerning whether or not the applicable standard of
conduct has been met can be made by (a) a disinterested majority of the Board of
Directors, (b) a majority of a committee of disinterested directors, (c)
independent legal counsel, or (d) an affirmative vote of a majority of shares
held by disinterested shareholders. No indemnification may be made to or on
behalf of a director, officer, employee or agent (i) in connection with a
proceeding by or in the right of the Company in which such person was adjudged
liable to the Company unless the court in which the action, suit or proceeding
was brought, upon application, determines indemnification is fair and
reasonable.
The Company may, if authorized by its shareholders by a majority of
votes which would be entitled to be cast in a vote to amend the Company's
Articles of Incorporation, indemnify or obligate itself to indemnify a director,
officer, employee or agent made a party to a proceeding, including a proceeding
brought by or in the right of the Company.
ITEM 25. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth all expenses expected to be incurred in
connection with the issuance and distribution of the securities being
registered, other than the sales commissions. All of the amounts shown are
estimated except for the registration fees of the Securities and Exchange
Commission and the National Association of Securities Dealers, Inc.
<TABLE>
<S> <C>
SEC Registration Fee........................................... $ 2,780
NASD Filing Fee................................................ $ 1,500
Blue Sky Fees and Expenses..................................... $ 6,000
Printing and Engraving Expenses................................ $ 5,000
Legal Fees and Expenses........................................ $ 35,000
Accounting Fees and Expenses................................... $ 3,500
Advertising.................................................... $ 5,500
Mailing and Distribution....................................... $ 960
Entertainment.................................................. $ 3,500
Miscellaneous.................................................. $ 5,000
----------
Total................................................ $ 68,740
==========
</TABLE>
ITEM 26. RECENT SALES OF UNREGISTERED SECURITIES.
Not applicable.
II-2
<PAGE> 64
ITEM 27. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
The following exhibits are filed as part of this Registration Statement:
<TABLE>
<CAPTION>
Exhibit No. Description of Exhibit
----------- ----------------------
<S> <C>
3.1 Amended and Restated Articles of
Incorporation of the Company.
3.2 Bylaws of the Company.
4.1 Specimen Common Stock Certificate.
4.2 Form of Escrow Agreement.
5.1 Opinion of Smith, Gambrell & Russell, LLP.(1)
10.1 Real Estate Sales Contract for the proposed
site of the Company at 1875A South 14th
Street, Fernandina Beach, Florida, dated
June 16, 1998.
10.2 Amended and Restated Employment Agreement
between the Organizers of the Company and
Michael G. Sanchez, dated as of September 1,
1998.
10.3 1998 Incentive Stock Option Plan.
10.4 Form of Organizer Warrant Certificate.
23.1 Consent of Smith, Gambrell & Russell, LLP
(contained in their opinion filed as
Exhibit 5.1 hereto).(1)
23.2 Consent of Porter Keadle Moore LLP.
24 Power of Attorney (included in signature
page to this Registration Statement).
27 Financial Data Schedule (for SEC use only)
</TABLE>
- -------------------------------------
(1) To be filed by amendment.
ITEM 28. UNDERTAKINGS.
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which it offers or sells
securities, a post-effective amendment to this Registration
Statement to:
(i) Include any prospectus required by Section 10(a)(3) of
the Securities Act;
(ii) Reflect in the prospectus any facts or events which,
individually or together, represent a fundamental
change in the information in the registration
statement. Notwithstanding the foregoing, any increase
or decrease in volume of securities offered (if the
total dollar volume 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, changes in the volume and
price represent no more than a 20% change in the
maximum aggregate
II-3
<PAGE> 65
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 of the
securities offered, and the offering of the securities at
the time to be the initial bona fide offering.
(3) File a post-effective amendment to remove from registration
any of the securities that remain unsold at the end of the
offering.
(b) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 (the "Act") may be permitted to directors, officers and
controlling persons of the Registrant pursuant to the foregoing provisions, or
otherwise, the Registrant has been advised that in the opinion of the Securities
and Exchange Commission such indemnification is against public policy as
expressed in the Act and is, therefore, unenforceable. 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 Act and will
be governed by the final adjudication of such issue.
[SIGNATURE PAGE FOLLOWS]
II-4
<PAGE> 66
SIGNATURES
In accordance with the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements of filing on Form SB-2 and authorized this Registration
Statement to be signed on its behalf by the undersigned, in the City of
Fernandina Beach, State of Florida on December 28, 1998.
FIRST CAPITAL BANK HOLDING CORPORATION
Date: December 28, 1998 By: /s/ Michael G. Sanchez
-------------------------------------
Michael G. Sanchez
President and Chief Executive Officer
(Principal Executive Officer)
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Michael G. Sanchez and Suellen Rodeffer
Garner, and each of them, his true and lawful attorneys-in-fact and agents, with
full power of substitution and resubstitution for him, in his name, place and
stead, in any and all capacities, to sign any and all amendments (including
post-effective amendments) to this Registration Statement, and to file the same,
with all exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents full power and authority to do and perform each and every act and thing
requisite and necessary to be done in and about the premises as fully and to all
intents and purposes as he might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents may lawfully do or cause
to be done by virtue hereof.
In accordance with the requirements of the Securities Act of 1933, as
amended, this Registration Statement was signed by the following persons in the
capacities and on the dates stated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Ron Anderson Director December 28, 1998
- -------------------------------------
Ron Anderson
/s/ Christina H. Bryan Director December 28, 1998
- -------------------------------------
Christina H. Bryan
/s/ C. Brett Carter Director December 28, 1998
- -------------------------------------
C. Brett Carter
/s/ Suellen Rodeffer Garner Chairman of the Board December 28, 1998
- -------------------------------------
Suellen Rodeffer Garner
/s/ William K. Haley, M.D. Director December 28, 1998
- -------------------------------------
William K. Haley, M.D.
</TABLE>
<PAGE> 67
<TABLE>
<S> <C> <C>
/s/ Lorie L. McCarroll Treasurer and Director December 28, 1998
- ----------------------------------------
Lorie L. McCarroll
/s/ David F. Miller Director December 29, 1998
- ----------------------------------------
David F. Miller
/s/ William J. Mock, Jr. Director December 28, 1998
- ----------------------------------------
William J. Mock, Jr.
/s/ Marlene J. Murphy Director December 28, 1998
- ----------------------------------------
Marlene J. Murphy
/s/ Robert L. Peters Director December 28, 1998
- ----------------------------------------
Robert L. Peters
/s/ Lawrence Piper Secretary and Director December 28, 1998
- ----------------------------------------
Lawrence Piper
/s/ Michael G. Sanchez President, Chief Executive December 28, 1998
- ---------------------------------------- Officer and Director
Michael G. Sanchez
/s/ Harry R. Trevett Director December 28, 1998
- ----------------------------------------
Harry R. Trevett
/s/ Edward E. Wilson Director December 28, 1998
- ----------------------------------------
Edward E. Wilson
/s/ Marshall E. Wood Director December 28, 1998
- ----------------------------------------
Marshall E. Wood
</TABLE>
<PAGE> 68
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF EXHIBIT
- --------- -----------------------------------------------------
<S> <C>
3.1 Amended and Restated Articles of Incorporation of the
Company.
3.2 Bylaws of the Company.
4.1 Specimen Common Stock Certificate.
4.2 Form of Escrow Agreement.
5.1 Opinion of Smith, Gambrell & Russell, LLP.(1)
10.1 Real Estate Sales Contract for the proposed site of
the Company at 1875A South 14th Street, Fernandina
Beach, Florida, dated June 16, 1998.
10.2 Amended and Restated Employment Agreement between the
Organizers of the Company and Michael G. Sanchez,
dated as of September 1, 1998.
10.3 1998 Incentive Stock Option Plan.
10.4 Form of Organizer Warrant Certificate.
23.1 Consent of Smith, Gambrell & Russell, LLP (contained
in their opinion filed as Exhibit 5.1 hereto).(1)
23.2 Consent of Porter Keadle Moore, LLP.
24 Power of Attorney (included in signature page to this
Registration Statement).
27 Financial Data Schedule (for SEC use only)
</TABLE>
(1) To be filed by amendment.
<PAGE> 1
EXHIBIT 3.1
AMENDED AND RESTATED
ARTICLES OF INCORPORATION
OF
FIRST CAPITAL BANK HOLDING CORPORATION
Pursuant to Section 607.1007 of the Florida Business Corporation Act,
these Amended and Restated Articles of Incorporation were approved by the Board
of Directors and the shareholders of the Corporation on December 11, 1998 by
joint resolution and unanimous consent.
I.
The corporate name that satisfies the requirements of 607.0401 is First
Capital Bank Holding Corporation.
II.
The Corporation is organized for the following purpose or purposes:
To act as a bank holding company and, to the extent permitted under
applicable federal and state laws, now or hereafter existing, to engage in such
business as related to banks and to bank holding companies and their
activities;
To acquire, own, hold, sell, exchange, assign, transfer, create
security interests in, pledge or otherwise dispose of shares, voting trust
certificates, depository receipts for shares, capital stock, bonds, notes,
debentures or other evidence of indebtedness, options, warrants, or other
securities issued by any other business of any lawful character, including, but
not limited to, banks and other businesses providing goods or services related
to banking;
To acquire and hold other investment assets and to engage in any
lawful activities related thereto;
To acquire, own interest in and otherwise participate in and exercise
ownership rights in joint ventures, partnerships, limited partnerships, trusts,
corporations, unincorporated associations and other entities for the
furtherance of all corporate activities; to borrow and to lend money and to
buy, sell, guarantee and otherwise deal in the obligations of others and
conduct financing, brokerage, and discount and factoring businesses in
connection with the foregoing or otherwise;
In general, to carry on any other lawful business whatsoever, and to
have, enjoy and exercise all the rights, powers and privileges which are now or
which may hereafter be conferred upon corporations organized under the Florida
Business Corporation Act.
<PAGE> 2
III.
The corporation shall have authority to issue 11,000,000 shares of
capital stock, which shall be divided into classes and shall have the following
designations, preferences, limitations and relative rights;
A. Common Stock. One class shall consist of 10,000,000 shares of common
stock of $.01 par value, designated "Common Stock." The holders of Common Stock
shall be entitled to elect all of the members of the Board of Directors of the
Corporation, and such holders shall be entitled to vote as a class on all
matters required or permitted to be submitted to the shareholders of the
Corporation.
B. Preferred Stock. One class shall consist of 1,000,000 shares of
preferred stock of $.01 par value, designated "Preferred Stock." The Board of
Directors of the Corporation shall be empowered to divide any and all shares of
the Preferred Stock into series and to fix and determine the relative rights
and preferences of the shares of any series so established in accordance with
Section 607.0602 of the Florida Business Corporation Act, including (i) the
distinctive designation of such series and the number of shares which shall
constitute such series; (ii) the annual rate of dividends payable on shares of
such series, whether dividends shall be cumulative and conditions upon which
and the date when such dividends shall be accumulated on all shares of such
series issued prior to the record date for the first dividend of such series;
(iii) the time or times when and the price or prices at which shares of such
series shall be redeemable at the option of the holder or of the Corporation
and the sinking fund provisions, if any, for the purchase or redemption of such
shares; (iv) the amount payable on shares of such series in the event of any
liquidation, dissolution or winding up of the affairs of the Corporation,
whether all or a portion is paid before any amount is paid on the Common Stock;
(v) the rights, if any, of the holders of shares of such series to convert such
shares into, or exchange such shares for, shares of Common Stock or shares of
any other series of Preferred Stock and the terms and conditions of such
conversion or exchange; and (vi) whether the shares of such series have voting
rights and the extent of such voting rights, if any.
The Board of Directors shall have the power to reclassify any unissued
shares of any series of Preferred Stock from time to time by setting or
changing the preferences, conversion or other rights, voting powers,
restrictions, limitations as to dividends, qualifications, or terms or
conditions of redemption, including but not limited to, but subject to the
limitations described in, the above provisions.
Any action by the Board of Directors in authorizing the issuance of
Preferred Stock and fixing and determining the provisions thereof is hereby
ratified and approved.
IV.
The street address of the registered office of the Corporation is 303
Centre Street, Suite 100, Fernandina Beach, Florida 32034, and the name of its
initial registered agent at such address is Marshall E. Wood.
<PAGE> 3
V.
The street address and mailing address of the initial principal office
of the Corporation is 1875A South 14th Street, Fernandina Beach, Florida 32034.
VI.
A. The number of directors of the Corporation shall be fixed from time
to time by resolution of the Board of Directors; provided, however that the
number of directors fixed by the Board of Directors shall not be less than two
(2) or more than twenty-five (25).
B. Concurrent with the adoption of these Articles of Incorporation, the
Board of Directors, other than those who may be elected by the holders of
preferred stock or any class or series of stock having a preference over the
common stock as to dividends or upon liquidation or any resolution or
resolutions providing for the issue of such class or series of stock adopted by
the Board, shall be classified, with respect to the time for which they
severally hold office, into three classes, as nearly equal in number as
possible: (i) one class ("Class I") of directors to be originally elected for a
term expiring at the annual meeting of shareholders to be held in 1999, (ii)
another class of directors ("Class II") to be originally elected for a term
expiring at the annual meeting of shareholders to be held in 2000, and (iii)
another class of directors ("Class III") to be originally elected for a term
expiring at the annual meeting of shareholders to be held in 2001, with each
member of each class to hold office, until his successors are elected and
qualified. At each annual meeting of the shareholders of the Corporation the
date of which shall be fixed by or pursuant to the Bylaws of the Corporation,
the successors of the class of directors whose terms expire at that meeting
shall be elected to hold office for a term expiring at the annual meeting of
shareholders held in the third year following the year of their election.
C. Subject to the rights of the holders of any series of Preferred
Stock then outstanding, if any vacancy shall occur in the membership of the
Board by reason of newly created directorships or resulting from the
resignation, disqualification, retirement or death of a director, the remaining
directors shall continue to act, and such vacancies may be filled by the
affirmative vote of the majority of the directors then in office, although less
than a quorum of the Board, and if not therefore filled by action of the
directors, may be filled by the shareholders at any meeting held during the
existence of such vacancy. If any vacancy shall occur among the directors by
reason of the removal from office of a director, such vacancy shall be filled
by the vote of three-fourths (3/4) of the outstanding shares of each class of
stock entitled to vote in elections of directors. A director elected to fill a
vacancy shall be elected for the unexpired term of his predecessor in office.
No decrease in the number of directors constituting the Board shall shorten the
term of any incumbent director. Any increase or decrease in the number of
directors shall be so apportioned among the classes of directors as to make all
classes as nearly equal in number as possible.
D. Notwithstanding the foregoing provisions of this Article VI, any
director whose term of office has expired shall continue to hold office until
his successor shall be elected and qualified.
E. Notwithstanding any other provisions of these Articles of
Incorporation or the By-laws of the Corporation (and notwithstanding the fact
that some lesser percentage may be specified by law, these Articles of
Incorporation or the By-laws of the Corporation), the affirmative vote of the
holders
<PAGE> 4
of at least three-fourths (3/4) of the total number of votes entitled to be
cast by the holders of all of the shares of capital stock of the Corporation
then entitled to vote generally in the election of directors shall be required
to amend, alter, change or repeal, or to adopt any provision as part of these
Articles of Incorporation inconsistent with, this Article VI. The holder of
each share of capital stock entitled to vote thereon shall be entitled to cast
the same number of votes as the holder of such shares is entitled to cast
generally in the election of each director.
VII.
The Florida Control-Share Acquisition sections of the Florida Business
Corporation Act (607.0901 through 607.0903) shall not be applicable to the
Corporation.
VIII.
In addition to any approval of the Board of Directors or any
shareholder vote or consent required by the laws of the State of Florida or any
other provision of these Articles of Incorporation or otherwise, the
affirmative vote or consent of the holders of not less than two-thirds (2/3) of
the shares of each class of stock of the Corporation entitled to vote in
elections of directors shall be required to authorize, adopt or approve a
Covered Transaction; however, the provisions of this Article VIII shall not
apply to any Covered Transaction referred to in this Article VIII with any
Interested Person if the Covered Transaction is approved by three-fourths (3/4)
of the entire membership of the Board of Directors of the Corporation, in which
event the affirmative vote of not less than a majority of the holders of each
class of stock of the Corporation entitled to vote in elections of directors
shall be required.
For the purpose of this Article VIII:
1. "Affiliate" and "associate" shall have the respective
meanings given those terms in Rule 12b-2 of the General Rules
and Regulations under the Securities Exchange Act of 1934, as
amended, as in effect on the date hereof.
2. A person shall be the "beneficial owner" and "beneficially
owns" shares of stock of the Corporation (other than shares
of the Corporation's stock held in its treasury) (a) which
such person and its affiliates and associates beneficially
own, directly or indirectly, whether of record or not, (b)
which such person or any of its affiliates or associates has
the right to acquire, pursuant to any agreement upon the
exercise of conversion rights, warrants or options, or
otherwise, (c) which such person or any of its affiliates or
associates has the right to sell or vote pursuant to any
agreement, or (d) which are beneficially owned, directly or
indirectly, by any other person with which such first
mentioned person or any of its affiliates or associates has
any agreement, arrangement or understanding for the purpose
of acquiring, holding, voting or disposing of securities of
the Corporation.
<PAGE> 5
3. "Covered Transaction" is:
(a) any merger or consolidation of the Corporation or
any subsidiary of the Corporation with or into any
Interested Person (regardless of the identity of the
surviving corporation);
(b) any sale, lease or other disposition of all or any
substantial part (assets having an aggregate fair
market value of twenty-five percent (25%) of the
total assets of the Corporation) of the assets of
the Corporation or any subsidiary of the Corporation
to any Interested Person for cash, real or personal
property, including securities, or any combination
thereof;
(c) any issuance or delivery of securities of the
Corporation or a subsidiary of the Corporation
(which the beneficial owner shall have the right to
vote, or to vote upon exercise, conversion or by
contract) to an Interested Person in consideration
for or in exchange of any securities or other
property (including cash); or
(d) the liquidation of the Corporation.
4. "Interested Person" is any person which, as of the record date
for the determination of shareholders entitled to notice of any
Covered Transaction and to vote thereon or consent thereto, or
as of the date of any such vote or consent, or immediately
prior to the consummation of any Covered Transaction,
beneficially owns, directly or indirectly, five percent (5%) or
more of the shares of stock of the Corporation entitled to vote
in elections of directors.
5. "Person" is any individual, partnership, corporation or other
entity.
6. "Subsidiary of the Corporation" is any corporation of which
fifty percent (50%) or more of any class of stock is
beneficially owned, directly or indirectly, by the Corporation.
No amendment to these Articles of Incorporation shall amend, alter,
change or repeal any of the provisions of this Article VIII, unless such
amendment, in addition to receiving any shareholder vote or consent required by
the laws of the State of Florida in effect at the time, shall receive the
affirmative vote or consent of the holders of three-fourths (3/4) of the
outstanding shares of each class of stock of the Corporation entitled to vote
in elections of directors.
IX.
A. In addition to any approval of the Board of Directors or any
shareholder vote or consent required by the laws of the State of Florida or any
other provision of these Articles of Incorporation or otherwise, there shall be
required for the approval, adoption or authorization of a Business Combination
with an Interested Person the affirmative vote or consent of the holders of a
majority of the shares of each class of stock of the Corporation entitled to
vote in elections of directors considered separately for the purposes of this
Article IX, which are not beneficially owned, directly or indirectly,
<PAGE> 6
by such Interested Person; provided, however, that said majority voting
requirements shall not be applicable if all of the conditions specified in
subparagraphs (1), (2) and (3) below are met:
1. The consideration to be received per share for each class of
stock in such Business Combination by holders of the stock of the Corporation
is payable in cash or Acceptable Securities, or a combination of both, and such
consideration has a fair market value per share with respect to each class of
the Corporation's stock of not less than either:
(a) the highest price (including the highest per share
brokerage commissions, transfer tax and soliciting dealers fees) paid by said
Interested Person in acquiring any of the Corporation's stock of that class; or
(b) a price per share obtained by multiplying the
aggregate earnings per share of stock of the Corporation (appropriately
adjusted for any subdivision of shares, stock dividend or combination of shares
during the period) for the four full consecutive fiscal quarters immediately
preceding the record date for solicitation of votes or consents on such
Business Combination by the figure obtained by dividing the highest per share
price (including the highest per share brokerage commissions, transfer tax and
soliciting dealers fees) paid by such Interested Person in acquiring any of the
Corporation's stock by the aggregate earnings per share of the Corporation for
the four full consecutive fiscal quarters immediately preceding the time when
the Interested Person shall have become the beneficial owner of five percent
(5%) or more of the outstanding stock of the Corporation entitled to vote in
elections of directors.
If any securities were issued by an Interested Person in
exchange for stock of the Corporation prior to the proposed Business
Combination, the fair market value of said securities at the time of issue
shall be used in determining the per share price paid for said stock.
2. After the Interested Person has become the beneficial owner
of five percent (5%) or more of the stock of the Corporation entitled to vote
in the election of directors and prior to the consummation of such Business
Combination, there shall have been no reduction in the rate of dividends
payable on the Corporation's stock which would result in a quarterly dividend
rate per share which is less than the average quarterly dividend rate per share
for the four full consecutive fiscal quarters immediately preceding the time
when the Interested Person shall have become the beneficial owner of said five
percent (5%) or more of the stock of the Corporation, unless such reduction in
the rate of dividends has been approved by three-fourths (3/4) of the entire
membership of the Board of Directors of the Corporation. For the purposes of
this paragraph, "quarterly dividend rate per share" for any quarterly dividend
shall be equal to the percentage said quarterly dividend per share bears to the
earnings per share for the four full fiscal quarters immediately preceding the
declaration of said quarterly dividend.
3. The consideration to be received by shareholders who are
not Interested Persons shall be in cash or in the same form as the Interested
Person has previously paid for shares of such class of stock; if the Interested
Person has paid for shares of any class of any stock with varying forms of
consideration, the form of consideration for such class of stock shall be
either cash or the form used to acquire the largest number of shares of such
class of stock previously acquired by it.
<PAGE> 7
B. For the purposes of this Article IX:
1. "Acceptable Securities" shall mean (a) securities of the
same class or series, with the same rights, powers and benefits and of the same
denomination, term and interest, or dividend, if any, as the securities issued
and delivered by the Interested Person in exchange for the majority of the
stock of the corporation acquired by the Interested Person, or (b) the class of
common stock of the Interested Person which is beneficially owned by most
persons.
2. "Affiliate" and "associate" shall have the respective
meanings given those terms in Rule l2b-2 of the General Rules and Regulations
under the Securities Exchange Act of 1934, as amended, as in effect on the date
hereof.
3. A person shall be the "beneficial owner" and "beneficially
own" shares of stock of the Corporation (other than shares of the Corporation's
stock held in its treasury) (a) which such person and its affiliates or
associates beneficially own, directly or indirectly, whether of record or not,
(b) which such person or any of its affiliates or associates has the right to
acquire, pursuant to any agreement upon the exercise of conversion rights,
warrants, or options, or otherwise, (c) which such person or any of its
affiliates or associates has the right to sell or vote pursuant to any
agreement, or (d) which are beneficially owned, directly or indirectly, by any
other person with which such first mentioned person or any of its affiliates or
associates has any agreement, arrangement or understanding for the purposes of
acquiring, holding, voting or disposing of securities of the Corporation.
4. "Business Combination" is:
a. any merger or consolidation of the Corporation
or any subsidiary of the Corporation with or into any Interested Person
(regardless of the identity of the surviving corporation);
b. any sale, lease or other disposition of all or
any substantial part (assets having a fair market value of twenty-five percent
(25%) of the total assets of the Corporation) of the assets of the Corporation
or any subsidiary of the Corporation to any Interested Person for cash, real or
personal property, including securities, or any combination thereof; or
c. any issuance or delivery of securities of the
Corporation or a subsidiary of the Corporation (which the beneficial owner
shall have the right to vote, or to vote upon exercise, conversion or by
contract) to an Interested Person in consideration of or in exchange for any
securities or other property (including cash).
5. "Interested Person" is any person which, as of the record
date for the determination of shareholders entitled to notice of any Business
Combination and to vote thereon or consent thereto, or as of the date of any
such vote or consent, immediately prior to the consummation of any Business
Combination, beneficially owns, directly or indirectly, five percent (5%) or
more of the shares of stock of the Corporation entitled to vote in elections of
directors.
6. "Person" is an individual, partnership, corporation or other
entity.
<PAGE> 8
7. "Subsidiary of the Corporation" is any corporation of which
fifty percent (50%) or more of any class of stock is beneficially owned,
directly or indirectly, by the Corporation.
C. No amendment to these Articles of Incorporation shall amend,
alter, change or repeal any of the provisions of this Article IX, unless such
amendment, in addition to receiving any shareholder vote or consent required by
the laws of the State of Florida in effect at the time, shall receive the
affirmative vote or consent of the holders of three-fourths (3/4) of the
outstanding shares of each class of stock of the Corporation entitled to vote
in elections of directors.
X.
A. The Board of Directors of the Corporation, when evaluating any
offer of another individual, firm, corporation or other entity ("Person") (a)
to make a tender or exchange offer for any equity security of the Corporation,
(b) to merge or consolidate the Corporation with such other Person, or (c) to
purchase or otherwise acquire all or substantially all of the properties and
assets of the Corporation (such offers individually referred to as an
"Acquisition Proposal"), shall, in connection with the exercise of its business
judgment in determining what is in the best interest of the Corporation and its
Shareholders, give due consideration to all relevant factors, including without
limitation, the consideration being offered in the Acquisition Proposal in
relation to the then-current market price of the Corporation's stock, but also
in relation to the then-current value of the Corporation in a freely negotiated
transaction and in relation to the Board of Directors' then-estimate of the
future value of the Corporation as an independent entity, the social and
economic effects on the employees, customers, suppliers, and other constituents
of the Corporation and on the communities in which the Corporation operates or
is located and the desirability of maintaining independence from any other
business or business entity; provided, however, that this Article shall be
deemed solely to grant discretionary authority to the directors and shall not
be deemed to provide any constituency any right to be considered.
B. No amendment to these Articles of Incorporation shall amend,
alter, change or repeal any of the provisions of this Article X, unless such
amendment, in addition to receiving any shareholder vote or consent required by
the laws of the State of Florida in effect at the time, shall receive the
affirmative vote or consent of the holders of three-fourths (3/4) of the
outstanding shares of each class of stock of the Corporation entitled to vote
in elections of directors.
XI.
No director of the Corporation shall be personally liable to the
Corporation or its shareholders for monetary damages for breach of duty of care
or other duty as a director if he acted in good faith and in a manner he
reasonably believed to be in, or not opposed to, the best interests of the
Corporation and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful; provided, however, that
to the extent required by applicable law, this Article shall not eliminate or
limit the liability of a director (i) for a violation of the criminal law,
unless the director had reasonable cause to believe his conduct was lawful or
had no reasonable cause to believe his conduct was unlawful, (ii) for any
transaction from which the director derived an improper personal benefit, (iii)
for unlawful distributions to shareholders of the Corporation in violation of
Section 607.06401 of the Florida Business Corporation Act, or (iv) for willful
misconduct or a conscious disregard for the best interests of the Corporation
in a proceeding by or in the right of
<PAGE> 9
the Corporation to procure judgment in its favor or in a proceeding by or in
the right of a shareholder. If applicable law is amended to authorize corporate
action further eliminating or limiting the liability of directors, then the
liability of each director of the Corporation shall be eliminated or limited to
the fullest extent permitted by applicable law, as amended. Neither the
amendment or repeal of this Article, nor the adoption of any provision of these
Articles of Incorporation inconsistent with this Article, shall eliminate or
reduce the effect of this Article in respect of any acts or omissions occurring
prior to such amendment, repeal or adoption of an inconsistent provision.
XII.
Except as otherwise specifically provided herein, these Articles of
Incorporation may be amended, altered, changed or repealed only by the
affirmative vote or consent of the holders of at least one-half (1/2) of the
shares of each class of stock of the Corporation entitled to vote in elections
of directors.
Signed this 28th day of December, 1998
FIRST CAPITAL BANK HOLDING CORPORATION
By:/s/ Michael G. Sanchez
---------------------------------------
Michael G. Sanchez
President and Chief Executive Officer
<PAGE> 1
EXHIBIT 3.2
BY-LAWS
OF
FIRST CAPITAL BANK HOLDING CORPORATION
<PAGE> 2
BY-LAWS
OF
FIRST CAPITAL BANK HOLDING CORPORATION
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
ARTICLE I. DEFINITIONS ...........................................................................-1-
ARTICLE II. GENERAL PROVISIONS REGARDING NOTICES...................................................-2-
Section 1. NOTICES................................................................................-2-
Section 2. WAIVER OF NOTICE.......................................................................-2-
ARTICLE III. SHAREHOLDERS' MEETINGS.................................................................-4-
Section 1. PLACE OF MEETING.......................................................................-4-
Section 2. ANNUAL MEETING.........................................................................-4-
Section 3. SPECIAL MEETINGS.......................................................................-4-
Section 4. NOTICE TO SHAREHOLDERS.................................................................-4-
Section 5. FIXING OF RECORD DATE..................................................................-5-
Section 6. QUORUM AND VOTING REQUIREMENTS.........................................................-6-
Section 7. PROXIES................................................................................-7-
Section 8. ACTION OF SHAREHOLDERS WITHOUT A MEETING...............................................-7-
ARTICLE IV. DIRECTORS..............................................................................-7-
Section 1. GENERAL POWERS.........................................................................-7-
Section 2. NUMBER, TENURE, QUALIFICATIONS.........................................................-7-
Section 3. VACANCIES, HOW FILLED..................................................................-8-
Section 4. PLACE OF MEETING.......................................................................-8-
Section 5. COMPENSATION...........................................................................-8-
Section 6. REGULAR MEETINGS.......................................................................-8-
Section 7. SPECIAL MEETINGS.......................................................................-8-
Section 8. GENERAL PROVISIONS REGARDING NOTICE AND WAIVER.........................................-8-
Section 9. QUORUM.................................................................................-9-
Section 10. MANNER OF ACTING.......................................................................-9-
Section 11. COMMITTEES.............................................................................-9-
Section 12. ACTION WITHOUT FORMAL MEETING.........................................................-10-
Section 13. CONFERENCE CALL MEETINGS..............................................................-10-
ARTICLE V. OFFICERS..............................................................................-10-
Section 1. GENERALLY.............................................................................-10-
Section 2. COMPENSATION..........................................................................-11-
Section 3. VACANCIES.............................................................................-11-
Section 4. CHAIRMAN OF THE BOARD.................................................................-11-
</TABLE>
<PAGE> 3
<TABLE>
<S> <C> <C> <C>
Section 5. CHIEF EXECUTIVE OFFICER................................................................-12-
Section 6. SECRETARY..............................................................................-12-
Section 7. THE CHIEF FINANCIAL OFFICER............................................................-12-
Section 8. DEPUTY OFFICERS........................................................................-13-
Section 9. ASSISTANT OFFICERS.....................................................................-13-
ARTICLE VI. INDEMNIFICATION........................................................................-13-
Section 1. ACTION BY PERSONS OTHER THAN THE CORPORATION...........................................-13-
Section 2. ACTIONS BY OR IN THE NAME OF THE CORPORATION...........................................-14-
Section 3. SUCCESSFUL DEFENSE.....................................................................-14-
Section 4. AUTHORIZATION OF INDEMNIFICATION.......................................................-14-
Section 5. REASONABLENESS OF EXPENSES.............................................................-15-
Section 6. PREPAYMENT OF EXPENSES.................................................................-15-
Section 7. NON-EXCLUSIVE RIGHT....................................................................-15-
Section 8. SUCCESSORS.............................................................................-16-
Section 9. JUDICIAL DETERMINATION.................................................................-16-
Section 10. INSURANCE..............................................................................-16-
Section 11. INFORMATION TO SHAREHOLDERS............................................................-17-
ARTICLE VII. FISCAL YEAR............................................................................-17-
ARTICLE VIII. ANNUAL STATEMENTS......................................................................-17-
ARTICLE IX. CAPITAL STOCK..........................................................................-18-
Section 1. FORM...................................................................................-18-
Section 2. TRANSFER...............................................................................-18-
Section 3. RIGHTS OF HOLDER.......................................................................-19-
Section 4. LOST OR DESTROYED CERTIFICATES.........................................................-19-
ARTICLE X. SEAL...................................................................................-19-
ARTICLE XI. REGISTERED OFFICE AND REGISTERED AGENT.................................................-19-
ARTICLE XII. AMENDMENTS ............................................................................-19-
Section 1. AMENDMENTS GENERALLY...................................................................-19-
Section 2. BY-LAW INCREASING QUORUM
OR VOTING REQUIREMENTS..............................................................-20-
</TABLE>
<PAGE> 4
BY-LAWS
OF
FIRST CAPITAL BANK HOLDING CORPORATION
ARTICLE I.
DEFINITIONS
As used in these By-Laws, the terms set forth below shall have the
meanings indicated, as follows:
"Act" shall mean the Florida Business Corporation Act, as amended from
time to time.
"Articles of Incorporation" means the Articles of Incorporation of the
Corporation, as amended from time to time.
"Board" shall mean the Board of Directors of the Corporation.
"Chairman of the Board" shall mean the Chairman of the Board of
Directors, or such other officer as shall be designated by the Board as having
the duties of the Chairman of the Board, as described in Section 4 of Article V
of these By-Laws.
"Chief Executive Officer" shall mean the President of the Corporation,
or such other officer as shall be designated by the Board as having the duties
of the Chief Executive Officer, as described in Section 5 of Article V of these
By-Laws.
"Corporation" shall mean First Capital Bank Holding Corporation, a
Florida corporation.
"Secretary" shall mean the Secretary of the Corporation, or such other
officer as shall be designated by the Board as having the duties of the
corporate Secretary as described in Section 6 of Article V of these By-Laws.
"Secretary of State" shall mean the Secretary of State of Florida.
"Voting group" shall have the meaning set forth in subsection (a) of
Section 6 of Article III of these By-Laws.
<PAGE> 5
ARTICLE II.
GENERAL PROVISIONS REGARDING NOTICES
Section 1. NOTICES. Except as otherwise provided in the Articles of
Incorporation or these By-Laws, or as otherwise required by applicable law:
(a) Any notice required by these By-Laws or by law shall be in writing
unless oral notice is reasonable under the circumstances.
(b) Notice may be communicated in person; by telephone, telegraph,
teletype, or other form of electronic communication; or by mail.
(c) Written notice by the Corporation to any shareholder is effective
when deposited in the mail, if mailed with first-class postage prepaid and
correctly addressed to the shareholder's address shown in the Corporation's
current stock transfer books; provided that it may utilize a class of mail
other than first class if the notice of the meeting is mailed, with adequate
postage prepaid, not less than 30 days before the date of the meeting.
(d) Written notice to the Corporation may be addressed to its
registered agent at its registered office or to the Corporation or its
Secretary at its principal office shown in its most recent annual registration
with the Secretary of State.
(e) Except as provided in subsection (c) of this Section 1, written
notice, if in a comprehensible form, is effective at the earliest of the
following:
(1) When received;
(2) Five days after its deposit in the mail, as evidenced by the
postmark, if mailed with first-class postage prepaid and correctly
addressed; or
(3) On the date shown on the return receipt, if sent by registered or
certified mail, return receipt requested, and the receipt is signed
by or on behalf of the addressee.
(f) Oral notice is effective when communicated if communicated directly
to the person to be notified in a comprehensible manner.
(g) In calculating time periods for notice under these By-Laws, when a
period of time measured in days, weeks, months, years, or other measurement of
time is prescribed for the exercise of any privilege or the discharge of any
duty, the first day shall not be counted but the last day shall be counted.
<PAGE> 6
Section 2. WAIVER OF NOTICE. Except as otherwise provided or required
by the Articles of Incorporation, these By-Laws or applicable law:
(a) A shareholder may waive any notice required to be given to such
shareholder, before or after the date and time stated in the notice. The waiver
must be in writing, be signed by the shareholder entitled to the notice, and be
delivered to the Corporation for inclusion in the minutes or filing with the
Corporation's corporate records.
(b) A shareholder's attendance at a meeting:
(1) Waives objection to lack of notice or defective notice of the
meeting, unless the shareholder at the beginning of the meeting
objects to holding the meeting or transacting business at the
meeting; and
(2) Waives objection to consideration of a particular matter at the
meeting that is not within the purpose or purposes described in
the meeting notice, unless the shareholder objects to
considering the matter when it is presented.
(c) Neither the business transacted nor the purpose of the meeting
need be specified in the waiver, except that any waiver by a shareholder of the
notice of a meeting of shareholders with respect to an amendment of the
Articles of Incorporation, a plan of merger or share exchange, a sale of assets
or any other action which would entitle the shareholder to exercise statutory
dissenter's rights under the Act and obtain payment for his/her shares shall
not be effective unless:
(1) Prior to the execution of the waiver, the shareholder shall
have been furnished the same material that under the Act would
have been required to be sent to the shareholder in a notice of
the meeting, including notice of any applicable dissenters'
rights as provided in the Act; or
(2) The waiver expressly waives the right to receive the material
required to be furnished.
(d) A director may waive any notice required to be given to such
director by the Act, the Articles of Incorporation, or these By-Laws before or
after the date and time stated in the notice. Except as provided by subsection
(e) of this Section 2, the waiver must be in writing, signed by the director
entitled to the notice, and delivered to the Corporation for inclusion in the
minutes or filing with the Corporation's corporate records.
(e) A director's attendance at or participation in a meeting waives
any required notice to him of the meeting unless the director at the beginning
of the meeting (or promptly upon his/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.
<PAGE> 7
ARTICLE III.
SHAREHOLDERS' MEETINGS
Section 1. PLACE OF MEETING. The Board may designate any place within
or outside the State of Florida as the place of meeting for any annual or
special shareholders' meeting. A waiver of notice signed by all shareholders
entitled to vote at a meeting may designate any place within or outside the
State of Florida as the place for the holding of such meeting. If no
designation is made, or if a special meeting be otherwise called, the place of
meeting shall be the principal office of the Corporation.
Section 2. ANNUAL MEETING. An annual meeting of the shareholders shall
be held on the fourth Friday in March of each year, if not a legal holiday (and
if such is a legal holiday, then on the next following business day not a legal
holiday), at such time and place as the Board shall determine, at which time
the shareholders shall elect a Board and transact such other business as may be
properly brought before the meeting. Notwithstanding the foregoing, the Board
may cause the annual meeting of shareholders to be held on such other date in
any year as the Board shall determine to be in the best interests of the
Corporation, and any business transacted at that meeting shall have the same
validity as if transacted on the date designated herein. If the annual meeting
is not held within any 13-month period, the circuit court of the circuit in
which the principal office of the Corporation is located may, on application of
any shareholder, summarily order a meeting to be held.
Section 3. SPECIAL MEETINGS. Special meetings of the shareholders, for
any purpose or purposes, except to the extent otherwise prescribed by statute
or the Articles of Incorporation, may be called by the Chief Executive Officer,
or by the presiding officer of the Board, if any. The Chief Executive Officer
or the Secretary shall call a special meeting when: (1) requested in writing by
any three or more of the directors; or (2) requested in writing by shareholders
owning not less than one tenth of all shares entitled to vote. Any such written
request shall be signed and dated and shall state the purpose or purposes of
the proposed meeting.
Section 4. NOTICE TO SHAREHOLDERS.
(a) Except as otherwise specifically provided in this Section 4,
requirements with respect to the giving of notice and waiver of notice shall be
governed by the provisions of Article II of these By-Laws.
(b) The Corporation shall give notice to each shareholder entitled
to vote thereat of the date, time and place of each annual and special
shareholders' meeting not less than ten (10) nor more than sixty (60) days
before the meeting date.
<PAGE> 8
(c) Unless otherwise required by the Act with respect to meetings at
which specified actions will be considered (including but not limited to
mergers, certain share exchanges, certain asset sales by the Corporation, and
dissolution of the Corporation), notice of an annual meeting need not contain a
description of the purpose or purposes for which the meeting is called.
(d) Notice of a special meeting must include a description of the
purpose or purposes for which the meeting is called.
(e) Unless a new record date is set (or is required by law or by the
terms of these ByLaws to be set) therefor, notice of the date, time and place
of any adjourned meeting need not be given otherwise than by the announcement
at the meeting before adjournment. If a new record date for the adjourned
meeting is or must be fixed, however, notice of the adjourned meeting must be
given in accordance with these By-Laws as if such adjourned meeting were a
newly-called meeting.
(f) If any corporate action proposed to be considered at a meeting of
shareholders would or might give rise to statutory dissenters' rights under the
Act, the notice of such meeting shall state that the meeting is to include
consideration of such proposed corporate action, and that the consummation of
such action will or might give rise to such dissenters' rights, and shall
include the description of such statutory dissenters' rights required by the
Act.
Section 5. FIXING OF RECORD DATE.
(a) For the purpose of determining shareholders entitled to notice of
or to vote at any meeting of shareholders, or shareholders entitled to demand a
special meeting of shareholders, or shareholders entitled to take any other
action, the Board may fix in advance (but not retroactively from the date the
Board takes such action) a date as the record date for any such determination
of shareholders, such date in any case to be not more than seventy (70) days
prior to the meeting or action requiring such determination of shareholders. If
no record date is fixed for the determination of shareholders entitled to
notice of or to vote at a meeting of shareholders, the close of business on the
last business day before the first notice of such meeting is delivered to
shareholders shall be the record date. If no record date is fixed for
determining shareholders entitled to take action without a meeting, the date
the first shareholder signs the consent shall be the record date for such
purpose. If no record date is fixed for determining shareholders entitled to
demand a special meeting, or to take other action, the date of receipt of
notice by the Corporation of demand for such meeting, or the date on which such
other action is to be taken by the shareholders, shall be the record date for
such purpose.
(b) A separate record date may be established for each voting group
entitled to vote separately on a matter at a meeting.
<PAGE> 9
(c) A determination of shareholders entitled to notice of or to vote at
a shareholders meeting is effective for any adjournment of the meeting unless
the meeting is adjourned to a date more than 120 days after the date fixed for
the original meeting, in which event, a new record date shall be set.
(d) For the purpose of determining shareholders entitled to a
distribution by the Corporation (other than one involving a purchase,
redemption or other acquisition of the Corporation's shares), the record date
shall be the date fixed for such purpose by the Board, or if the Board does not
fix such a date, the date on which the Board authorizes such distribution.
Section 6. QUORUM AND VOTING REQUIREMENTS.
(a) Except as otherwise provided by the Articles of Incorporation or
the Act:
i) A "voting group" with respect to any given matter
means all shares of one or more class or series which,
under the Articles of Incorporation or the Act, are
entitled to vote and be counted together collectively
on that matter, and unless specified otherwise in the
Articles of Incorporation, the Act or these By-Laws,
all shares entitled to vote on a given matter shall be
deemed to be a single voting group for purposes of
that matter.
ii) Each outstanding share, regardless of class, is
entitled to one vote on each matter voted on at a
shareholders' meeting.
iii) A majority of the votes entitled to be cast on the
matter by a voting group constitutes a quorum of that
voting group for action on that matter.
iv) The presence of a quorum of each voting group entitled
to vote thereon shall be the requisite for transaction
of business on a given matter.
v) Action on a matter other than election of directors is
approved by a voting group if a quorum of such voting
group exists and the number of votes cast within such
voting group in favor of such action exceeds the
number of votes cast within such voting group against
such action.
vi) Except as otherwise provided in these By-Laws, all
shares entitled to vote for election of directors
shall vote thereon as a single voting group, and
directors shall be elected by a plurality of votes
cast by shares entitled to vote in the election in a
meeting at which a quorum of such voting group is
present.
(b) Once a share is represented for any purpose other than solely to
object to holding a meeting or transacting business at the meeting, it is
deemed present for quorum purposes for the
<PAGE> 10
remainder of the meeting and for any adjournment of that meeting unless a new
record date is, or is required by law or these By-Laws to be, set for that
adjourned meeting.
(c) If a quorum for transaction of business shall not be present at a
meeting of shareholders, the shareholders entitled to vote thereat, present in
person or by proxy, shall have the power to adjourn the meeting from time to
time, until the requisite amount of voting stock shall be present. No notice
other than announcements at the meeting before adjournment shall be required of
the new date, time or place of the adjourned meeting, unless a new record date
for such adjourned meeting is, or is required by law or these By-Laws to be,
fixed. At such adjourned meeting (for which no new record date is, or is
required to be, set) at which a quorum shall be present in person or by proxy,
any business may be transacted that might have been transacted at the meeting
originally called.
Section 7. PROXIES. At every meeting of the shareholders, any
shareholder having the right to vote shall be entitled to vote in person or by
proxy, but no proxy shall be: (i) effective unless given in writing and signed,
either personally by the shareholder or his/her attorney-in-fact; (ii)
effective until received by the Secretary or other officer or agent authorized
to tabulate votes; or (iii) valid after eleven months from its date, unless
said proxy expressly provides for a longer period.
Section 8. ACTION OF SHAREHOLDERS WITHOUT A MEETING. Unless otherwise
provided in the Articles of Incorporation, any action required or permitted to
be taken at any annual or special meeting of shareholders of the Corporation,
may be taken without a meeting, without prior notice, and without a vote if a
consent in writing, setting forth the action so taken, shall be signed by the
holders of outstanding stock of each voting group entitled to vote thereon
having not less than the minimum number of votes with respect to each voting
group that would be necessary to authorize or take such action at a meeting at
which all voting groups and shares entitled to vote thereon were present and
voted.
Within 10 days after obtaining such authorization by written consent,
notice must be given to those shareholders who have not consented in writing or
who are not entitled to vote on the action. The notice shall fairly summarize
the material features of the authorized action and, if the action be such for
which dissenters rights are provided under Florida law, the notice shall
contain a clear statement of the right of shareholders dissenting therefrom to
be paid the fair value of their shares upon compliance with further provisions
of Florida law regarding the rights of dissenting shareholders.
<PAGE> 11
ARTICLE IV.
DIRECTORS
Section 1. GENERAL POWERS. Except as may be otherwise provided by any
legal agreement among shareholders, the property and business of the
Corporation shall be managed by its Board of Directors. In addition to the
powers and authority expressly conferred by these By-Laws, the Board of
Directors may exercise all such powers of the Corporation and do all such
lawful acts and things as are not by law, or by any legal agreement among
shareholders, or by the Articles of Incorporation or by these By-Laws directed
or required to be exercised or done by the shareholders.
Section 2. NUMBER, TENURE, QUALIFICATIONS. The Board of Directors shall
consist of not less than two (2) nor more than twenty-five (25) members, the
precise number to be determined from time to time by affirmative vote of a
majority of the entire Board of Directors. The Directors shall be elected at
the annual meeting of shareholders, to hold office until the next succeeding
annual meeting of shareholders held after his/her election and until his/her
successor has been duly elected and has qualified, or until his/her earlier
resignation, removal from office, or death. Directors shall be natural persons
who are eighteen (18) years of age or older, but need not be shareholders or
residents of Florida unless the Articles of Incorporation require otherwise.
Section 3. VACANCIES, HOW FILLED. If any vacancy shall occur in the
membership of the Board by reason of the resignation, removal or death of a
director, the remaining directors shall continue to act, and such vacancies may
be filled by the affirmative vote of the majority of the directors then in
office, though less than a quorum, and if not therefore filled by action of the
directors, may be filled by the shareholders at any meeting held during the
existence of such vacancy. If any vacancy shall occur among the directors by
reason of the removal from office of a director, such vacancy shall be filled
by the vote of seventy-five percent (75%) of the outstanding shares of each
class of stock entitled to vote in elections of directors. A director elected
to fill a vacancy shall be elected for the unexpired term of his/her
predecessor in office.
Section 4. PLACE OF MEETING. The Board may hold its meetings at such
place or places within or without the State of Florida as it may from time to
time determine.
Section 5. COMPENSATION. Directors may be allowed such compensation for
attendance at regular or special meetings of the Board and of any special or
standing committees thereof as may be from time to time determined by
resolution of the Board.
Section 6. REGULAR MEETINGS. A regular annual meeting of the Board
shall be held, without other notice than this By-Law, immediately after the
annual meeting of shareholders. The Board may provide, by resolution, the time
and place within or without the State of Florida, for the holding of additional
regular meetings without other notice than such resolution.
<PAGE> 12
Section 7. SPECIAL MEETINGS. Special meetings of the Board may be
called by the Chief Executive Officer or the presiding officer of the Board, if
different from the Chief Executive Officer, on not less than two (2) days'
notice to each director by mail, telegram, cablegram or other form of wire or
wireless communication, or personal delivery or other form of communication
authorized under the circumstances by the Act, and shall be called by the Chief
Executive Officer or the Secretary in like manner and on like notice on the
written request of any two (2) or more members of the Board. Such notice shall
state the time, date and place of such meeting, but need not describe the
purpose of the meeting. Any such special meeting shall be held at such time and
place as shall be stated in the notice of the meeting.
Section 8. GENERAL PROVISIONS REGARDING NOTICE AND WAIVER. Except as
otherwise expressly provided in this Article IV, matters relating to notice to
directors and waiver of notice by directors shall be governed by the provisions
of Article II of these By-Laws.
Section 9. QUORUM. At all meetings of the Board, unless otherwise
provided in the Articles of Incorporation or other provisions of these By-Laws,
the presence of a majority of the Directors shall constitute a quorum for the
transaction of business. In the absence of a quorum a majority of the Directors
present at any meeting may adjourn from time to time until a quorum is
obtained. Notice of the time and place of any adjourned meeting need only be
given by announcement at the meeting at which adjournment is taken.
Section 10. MANNER OF ACTING. Except as expressly otherwise provided by
the Articles of Incorporation or other provisions of these By-Laws, if a quorum
is present when a vote is taken, the affirmative vote of a majority of
directors present is the act of the Board. A director who is present at a
meeting when corporate action is taken is deemed to have assented to the action
unless:
(1) He/she objects at the beginning of the meeting (or promptly
upon his/her arrival) to holding it or transacting business at
the meeting; or
(2) His/her dissent or abstention from the action taken is entered
in the minutes of the meeting and his/her reason(s) for
abstention is submitted in writing to the Board.
Section 11. COMMITTEES.
(a) Except as otherwise provided by the Articles of Incorporation, the
Board may create an Executive Committee and one or more committees and appoint
members of the Board to serve on them. Each committee may have two or more
members, who serve at the pleasure of the Board.
<PAGE> 13
(b) The provisions of these By-Laws and of the Act which govern
meetings, action without meetings, notice and waiver of notice, and quorum and
voting requirements of the Board, shall apply as well to committees created
under this Section 11 and their members.
(c) To the extent specified by the Articles of Incorporation, these
By-Laws and the resolution of the Board creating such committee, each committee
may exercise the authority of the Board, provided that a committee may not:
(1) Approve, or propose to shareholders for approval, action
required by the Act to be approved by shareholders;
(2) Fill vacancies on the Board or on any of its committees;
(3) Authorize or approve the reacquisition of shares unless
pursuant to a general formula or method specified by the Board
of Directors;
(4) Adopt, amend, or repeal by-laws; or
(5) Authorize or approve the issuance or sale or contract for the
sale of shares, or determine the designation and relative
rights, preferences, and limitations of a voting group except
that the Board of Directors may authorize a committee (or a
senior executive officer of the Corporation) to do so within
limits specifically prescribed by the Board of Directors.
Section 12. ACTION WITHOUT FORMAL MEETING. Except as expressly
otherwise provided in the Articles of Incorporation, any action required or
permitted to be taken at any meeting of the Board or of any committee thereof
may be taken without a meeting if written consent thereto (which may take the
form of one or more counterparts) is signed by all members of the Board or of
such committee, as the case may be, and such written consent is filed with the
minutes of the proceedings of the Board or committee. A consent executed in
accordance herewith has the effect of a meeting vote and may be described as
such in any document.
Section 13. CONFERENCE CALL MEETINGS. Members of the Board, or any
committee of the Board, may participate in a meeting of the Board or committee
by means of conference, telephone or similar communications equipment by means
of which all persons participating in the meeting can simultaneously hear each
other during the meeting, and participation in a meeting pursuant to this
Section shall constitute presence in person at such meeting.
<PAGE> 14
ARTICLE V.
OFFICERS
Section 1. GENERALLY. The Board shall from time to time elect or
appoint such officers as it shall deem necessary or appropriate to the
management and operation of the Corporation, which officers shall hold their
offices for such terms as shall be determined by the Board and shall exercise
such powers and perform such duties as are specified in these By-Laws or in a
resolution of the Board. Except as specifically otherwise provided in
resolutions of the Board, the following requirements shall apply to election or
appointment of officers:
(a) The Corporation shall have, at a minimum, the following officers,
which offices shall bear the titles designated therefor by resolution of the
Board, but in the absence of such designation shall bear the titles set forth
below:
<TABLE>
<CAPTION>
Office Title
------ -----
<S> <C>
Chairman of the Board Chairman
Chief Executive Officer President
Chief Financial Officer Treasurer
Secretary Secretary
</TABLE>
(b) All officers of the Corporation shall serve at the pleasure of the
Board, and in the absence of specification otherwise in a resolution of the
Board, each officer shall be elected to serve until the next succeeding annual
meeting of the Board and the election and qualification of his/her successor,
subject to his/her earlier death, resignation or removal.
(c) Any person may hold two or more offices simultaneously, and no
officer need be a shareholder of the Corporation.
(d) If so provided by resolution of the Board, any officer may be
delegated the authority to appoint one or more officers or assistant officers,
which appointed officers or assistant officers shall have the duties and powers
specified in the resolution of the Board.
Section 2. COMPENSATION. The salaries of the officers of the
Corporation shall be fixed by the Board, except that the Board may delegate to
any officer or officers the power to fix the compensation of any other officer.
<PAGE> 15
Section 3. VACANCIES. A vacancy in any office, because of resignation,
removal or death may be filled by the Board for the unexpired portion of the
term, or if so provided by resolution of the Board, by an officer of the
Corporation to whom has been delegated the authority to appoint the holder of
such vacated office.
Section 4. CHAIRMAN OF THE BOARD. The Chairman of the Board of
Directors shall, when present, preside at all meetings of the shareholders and
the Board, either annual or special. The Chairman shall assist the Board in the
formulation of policies to be pursued by the executive management of the
Corporation, and he/she shall study and make reports and recommendations with
respect to major problems, policies, and activities of the Corporation, and it
shall be his/her responsibility to see that the policy established by the Board
is carried into effect by the executive officers. The Chairman may sign and
deliver on behalf of the Corporation any deed, mortgages, bonds, contracts,
powers of attorney, or other instruments which the Board have authorized to be
executed, except in cases where the signing and execution thereof shall be
expressly delegated by the Board or by these By-Laws to some other officer or
agent of the Corporation or shall be required by law to be otherwise signed or
executed, and he/she shall perform such other duties as may be prescribed by
the Board from time to time.
Section 5. CHIEF EXECUTIVE OFFICER. The Chief Executive Officer shall
have such title or titles designated by the Board and shall be the principal
executive officer of the Corporation. Subject to the control of the Board, the
Chief Executive Officer shall in general manage, supervise and control all of
the business and affairs of the Corporation. He/she shall, when present,
preside at all meetings of all of the stockholders. He/she may sign,
individually or in conjunction with any other proper officer of the Corporation
thereunto authorized by the Board, certificates for shares of the Corporation,
any deeds, mortgages, bonds, policies of insurance, contracts, investment
certificates, or other instruments which the Board has authorized to be
executed, except in cases where the execution thereof shall be expressly
delegated by the Board or by the By-Laws to some other officer or agent of the
Corporation, or shall be required by law to be otherwise signed or executed;
and in general shall perform all duties incident to the office of the Chief
Executive Officer of the Corporation and such other duties as may be prescribed
by the Board from time to time.
Section 6. SECRETARY. The Secretary may be designated by any such title
as determined by resolution of the Board, and shall: (a) attend and keep the
Minutes of the shareholders' meetings and of the Board's meetings in one or
more books provided for that purpose; (b) see that all notices are duly given
in accordance with the provisions of these By-Laws or as otherwise required by
law or the provisions of the Articles of Incorporation; (c) be custodian of the
corporate records and of the seal of the Corporation and see that the seal of
the Corporation is affixed to all documents, the execution of which on behalf
of the Corporation under its seal is duly authorized; (d) maintain, or cause an
agent designated by the Board to maintain, a record of the Corporation's
shareholders in a form that permits the preparation of a list of the names and
addresses of all shareholders in alphabetical order by class of shares, showing
the number and
<PAGE> 16
class of shares held by each; (e) have general charge of the stock transfer
books of the Corporation or responsibility for supervision, on behalf of the
Corporation, of any agent to which stock transfer responsibility has been
delegated by the Board; (f) have responsibility for the custody, maintenance
and preservation of those corporate records which the Corporation is required
by the Act or otherwise to create, maintain or preserve; (g) in general perform
all duties incident to the office of Secretary and such other duties as from
time to time may be assigned to him by the Board.
Section 7. THE CHIEF FINANCIAL OFFICER. The Chief Financial Officer,
unless otherwise determined by the Board, shall: (a) have charge and custody of
and be responsible for all funds and securities of the Corporation; receive and
give receipts for monies due and payable to the Corporation from any source
whatsoever, and deposit all such monies in the name of the Corporation in such
banks, trust companies or other depositories as shall be selected by the Board;
and (b) in general perform all the duties incident to the office of Chief
Financial Officer and such other duties as from time to time may be assigned by
the Board.
Section 8. DEPUTY OFFICERS. The Board may create one or more deputy
officers whose duties shall be, among any other designated thereto by the
Board, to perform the duties of the officer to which such office has been
deputized in the event of the unavailability, death or inability or refusal of
such officer to act. Deputy officers may hold such titles as designated
therefor by the Board; however, any office designated with the prefix "Vice" or
"Deputy" shall be, unless otherwise specified by resolution of the Board,
automatically a deputy officer to the office with the title of which the prefix
term is conjoined. Deputy officers shall have such other duties as prescribed
by the Board from time to time.
Section 9. ASSISTANT OFFICERS. The Board may appoint one or more
officers who shall be assistants to principal officers of the Corporation, or
their deputies, and who shall have such duties as shall be delegated to such
assistant officers by the Board or such principal officers, including the
authority to perform such functions of those principal officers in the place of
and with full authority of such principal officers as shall be designated by
the Board or (if so authorized) by such principal officers. The Board may by
resolution authorize appointment of assistant officers by those principal
officers to which such appointed officers will serve as assistants.
ARTICLE VI.
INDEMNIFICATION
Section 1. ACTION BY PERSONS OTHER THAN THE CORPORATION. Under the
circumstances prescribed in Sections 3 and 4 of this Article, the Corporation
shall indemnify any person who was or is a party to any, threatened, pending or
completed action, suit or other type
<PAGE> 17
of proceeding, whether civil, criminal, administrative or investigative, and
whether formal or informal (other than an action by or in the right of the
Corporation) by reason of the fact that he/she is or was a director, officer,
employee or agent of the Corporation, or is or was serving at the request of
the Corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise, against
expenses (including attorney's fees), judgments, fines, penalties and amounts
paid in settlement actually and reasonably incurred by him in connection with
such action, suit or proceeding, including any appeal thereof, if he/she acted
in good faith and in a manner which he/she reasonably believed to be in or not
opposed to the best interests of the Corporation and, with respect to criminal
action or proceeding, he/she had no reasonable cause to believe his/her conduct
was unlawful. The termination of any action, suit or proceeding by judgment,
order, settlement, conviction, or upon a plea of nolo contendere or its
equivalent, shall not, of itself, create a presumption that the person did not
act in good faith and in a manner which he/she reasonably believed to be in or
not opposed to the best interests of the corporation, or with respect to any
criminal action or proceeding, had reasonable cause to believe that his/her
conduct was unlawful.
Section 2. ACTIONS BY OR IN THE NAME OF THE CORPORATION. Under the
circumstances prescribed in Sections 3 and 4 of this Article, the Corporation
shall indemnify and hold harmless any person who was or is a party to any,
threatened, pending or completed action, suit or other type of proceeding,
whether civil, criminal, administrative or investigative, and whether formal or
informal, by or in the right of the Corporation to procure a judgment in its
favor by reason of the fact that he/she is or was a director, officer, employee
or agent of the Corporation, or is or was serving at the request of the
Corporation as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise, against expenses
(including attorney's fees) and amounts paid in settlement not exceeding, in
the judgment of the Board of Directors, the estimated expense of litigating the
action, suit or proceeding to conclusion, actually and reasonably incurred in
connection with the defense or settlement of such action, suit or proceeding,
including any appeal thereof. Such indemnification shall be authorized if such
person acted in good faith and in a manner he/she reasonably believed to be in
or not opposed to the best interests of the Corporation; except that no
indemnification shall be made in respect to any claim, issue or matter as to
which such person shall have been adjudged to be liable to the Corporation,
unless and only to the extent that, the court in which such action, suit or
proceeding was brought shall determine upon application that, despite the
adjudication of liability but in view of all the circumstances of the case,
such person is fairly and reasonably entitled to indemnity for such expenses
which the court shall deem proper.
Section 3. SUCCESSFUL DEFENSE. To the extent that a director, officer,
employee or agent of the Corporation has been successful on the merits or
otherwise in defense of any action, suit or proceeding referred to in Sections
1 and 2 of this Article, or in defense of any claim, issue or matter therein,
he/she shall be indemnified against expenses (including attorney's fees)
actually and reasonably incurred by him in connection therewith.
<PAGE> 18
Section 4. AUTHORIZATION OF INDEMNIFICATION. Except as provided in
Section 3 of this Article and except as may be ordered by a court, any
indemnification under Sections 1 and 2 of this Article shall be made by the
Corporation only as authorized in the specific case upon a determination that
indemnification of the director, officer, employee or agent is proper in the
circumstances because he/she has met the applicable standard of conduct set
forth in Sections 1 and 2. Such determination shall be made:
(a) by the Board of Directors by a majority vote of a quorum
consisting of Directors who were not parties to such action, suit or
proceeding;
(b) if such a quorum is not obtainable, or, even if
obtainable, by majority vote of a committee duly designated by the
Board of Directors (in which directors who are a party may participate)
consisting solely of two or more directors not at the time parties to
the action, suit or proceeding;
(c) by independent legal counsel (i) selected by the Board of
Directors prescribed in paragraph (a) of this Section or the committee
prescribed in paragraph (b) of this Section; or (ii) if a quorum of the
directors cannot be obtained for paragraph (a) of this Section and the
committee cannot be designated under paragraph (b) of this Section,
selected by a majority vote of the full Board of Directors (in which
directors who are a party may participate); or
(d) by the shareholders by a majority vote of a quorum
consisting of shareholders who were not parties to such action, suit or
proceeding or, if no such quorum is obtainable, by a majority vote of
shareholders who were not parties to such action, suit or proceeding.
Section 5. REASONABLENESS OF EXPENSES. Evaluation of the reasonableness
of expenses and authorization of indemnification shall be made in the same
manner as the determination that indemnification is permissible. However, if
the determination of permissibility is made by independent legal counsel,
persons specified by Section 4(c) shall evaluate the reasonableness of expenses
and may authorize indemnification.
Section 6. PREPAYMENT OF EXPENSES. Expenses incurred by a director or
officer in defending a civil or criminal action, suit or proceeding may be paid
by the Corporation in advance of the final disposition of such action, suit or
proceeding upon receipt of an undertaking by or on behalf of the director or
officer to repay such amount if it shall ultimately be determined that he/she
is not entitled to be indemnified by the Corporation as authorized in this
Article. Expenses incurred by other employees and agents may be paid in advance
upon such terms or conditions that the Board of Directors deems appropriate.
<PAGE> 19
Section 7. NON-EXCLUSIVE RIGHT. The indemnification and advancement of
expenses provided by this Article are not exclusive, and the Corporation may
make any other or further indemnification or advancement of expenses of any of
its directors, officers, employees or agents, under any Bylaw, agreement, vote
of shareholders or disinterested directors, or otherwise, both as to action in
his/her official capacity and as to action in another capacity while holding
such office. However, indemnification or advancement of expenses shall not be
made to or on behalf of any director, officer, employee or agent if a judgment
or other final adjudication establishes that his/her actions, or omissions to
act, were material to the cause of action so adjudicated and constitute:
(a) A violation of the criminal law, unless the director,
officer, employee or agent had reasonable cause to believe his/her
conduct was lawful or had no reasonable cause to believe his/her
conduct was unlawful;
(b) A transaction from which the director, officer, employee
or agent derived an improper personal benefit;
(c) In the case of a director, a circumstance under which the
liability provisions of Florida Business Corporation Act ss. 607.0834
are applicable; or
(d) Willful misconduct or a conscious disregard for the best
interests of the Corporation in a proceeding by or in the right of the
Corporation to procure a judgment in its favor or in a proceeding by or
in the right of a shareholder.
(e) Recklessness or an act or omission which was committed in
bad faith or with malicious purpose or in a manner exhibiting wanton
and willful disregard of human rights, safety or property in a
proceeding by or in the right of someone other than the Corporation or
a shareholder.
Section 8. SUCCESSORS. Indemnification and advancement of expenses as
provided in this Article shall continue as, unless otherwise provided when
authorized or ratified, to a person who has ceased to be a director, officer,
employee or agent and shall inure to the benefit of the heirs, executors, and
administrators of such a person, unless otherwise provided when authorized or
ratified.
Section 9. JUDICIAL DETERMINATION. Unless the Articles of Incorporation
provide otherwise, notwithstanding the failure of the Corporation to provide
indemnification, and despite any contrary determination of the Board or of the
shareholders in the specific case, a director, officer, employee or agent of
the Corporation who is or was a party to a proceeding may apply for
indemnification or advancement of expenses, or both, to the court conducting
the proceeding, to the circuit court, or to another court of competent
jurisdiction. On receipt of an application, the court, after giving any notice
that it considers necessary, may order indemnification and
<PAGE> 20
advancement of expenses, including expenses incurred in seeking court-ordered
indemnification or advancement of expenses, if it determines that:
(a) The director, officer, employee or agent is entitled to
mandatory indemnification under Section 3, in which case the court
shall also order the Corporation to pay the director reasonable
expenses incurred in obtaining court-ordered indemnification or
advancement of expenses;
(b) The director, officer, employee or agent is entitled to
indemnification or advancement of expenses, or both, by virtue of the
exercise by the Corporation of its power pursuant to Section 7; or
(c) The director, officer, employee or agent is fairly and
reasonably entitled to indemnification or advancement of expenses, or
both, in view of all the relevant circumstances, regardless of whether
such person met the standard of conduct set forth in Section 1, Section
2 or Section 7.
Section 10. INSURANCE. The Corporation may purchase and maintain
insurance on behalf of any person who is or was a director, officer, employee
or agent of the Corporation, or is or was serving at the request of the
Corporation as a director, officer, employee or agent of another Corporation,
partnership, joint venture, trust or other enterprise, against any liability
asserted against him and incurred by him in any such capacity, or arising out
of his/her status as such, whether or not the Corporation would have the power
to indemnify him against such liability under the provisions of this Article.
Section 11. INFORMATION TO SHAREHOLDERS. If any expenses or other
amounts are paid by way of indemnification, otherwise than by court order or
action by the shareholders or by an insurance carrier pursuant to insurance
maintained by the Corporation, the Corporation shall report the indemnification
or advance in writing to the shareholders with or before the notice of the next
shareholders meeting, or prior to such meeting if the indemnification or
advance occurs after the giving of such notice but prior to the time such
meeting is held, which report shall include a statement specifying the persons
paid, the amount paid, and the nature and status at the time of such payment of
the litigation or threatened litigation.
ARTICLE VII.
FISCAL YEAR
The fiscal year of the Corporation shall be established by the Board
or, in the absence of Board action establishing such fiscal year, by the Chief
Executive Officer.
<PAGE> 21
ARTICLE VIII.
ANNUAL STATEMENTS
No later than 120 days after the close of each fiscal year, the
Corporation shall furnish its shareholders the following financial statements:
(a) A balance sheet as of the end of the fiscal year;
(b) An income statement for that year; and
(c) A statement of cash flows for that year.
In addition, upon written request, the Corporation shall mail promptly
to any shareholder of record a copy of the most recent such balance sheet,
income statement and statement of cash flows.
ARTICLE IX.
CAPITAL STOCK
Section 1. FORM.
(a) Except as otherwise provided for in paragraph (b) of this Section
1, the interest of each shareholder shall be evidenced by a certificate
representing shares of stock of the Corporation, which shall be in such form as
the Board may from time to time adopt and shall be numbered and shall be
entered in the books of the Corporation as they are issued. Each certificate
shall exhibit the holder's name, the number of shares and class of shares and
series, if any, represented thereby, the name of the Corporation, a statement
that the Corporation is organized under the laws of the State of Florida, the
par value of each share or a statement that the shares are without par value
and a summary of the designations, relative rights, preferences, and
limitations applicable to each class and the variations in rights, preferences,
and limitations determined for each series (and the authority of the Board of
Directors to determine variations for future series) or a statement that the
Corporation will furnish the shareholder a full statement of this information
on request and without charge. Each certificate shall be signed by one or more
officers of the Corporation specified by resolution of the Board, but in the
absence of such specifications, shall be valid if executed by the Chief
Executive Officer or any Deputy or Assistant thereto, and such execution is
countersigned by the Secretary, or any Deputy or Assistant thereto. Each stock
certificate may but need not be sealed with the seal of the Corporation.
(b) If authorized by resolution of the Board, the Corporation may issue
some or all of the shares of any or all of its classes or series without
certificates. The issuance of such shares
<PAGE> 22
shall not affect shares already represented by certificates until they are
surrendered to the Corporation. Within a reasonable time after the issuance or
transfer of any shares not represented by certificates, the Corporation shall
send to the holder of such shares a written statement setting forth, with
respect to such shares (i) the name of the Corporation as issuer and the
Corporation's state of incorporation, (ii) the name of the person to whom such
shares are issued, (iii) the number of shares and class of shares and series,
if any, and (iv) the terms of any restrictions on transfer which, were such
shares represented by a stock certificate would be required to be noted on such
certificate, by law, by the Articles of Incorporation or these By-Laws, or by
any legal agreement among the shareholders of the Corporation.
Section 2. TRANSFER. Transfers of stock shall be made on the books of
the Corporation only by the person named in the certificate, or, in the case of
shares not represented by certificates, the person named in the Corporation's
stock transfer records as the owner of such shares, or, in either case, by
attorney lawfully constituted in writing. In addition, with respect to shares
represented by certificates, transfers shall be made only upon surrender of the
certificate therefor, or in the case of a certificate alleged to have been
lost, stolen or destroyed, upon compliance with the provisions of Section 4,
Article IX of these By-Laws.
Section 3. RIGHTS OF HOLDER. The Corporation shall be entitled to treat
the holder of record of any share of the Corporation as the person entitled to
vote such share (to the extent such share is entitled to vote), to receive any
distribution with respect to such share, and for all other purposes and
accordingly shall not be bound to recognize any equitable or other claim to or
interest in such share on the part of any other person, whether or not it shall
have express or other notice thereof, except as otherwise provided by law.
Section 4. LOST OR DESTROYED CERTIFICATES. Any person claiming a
certificate of stock to be lost, stolen or destroyed shall make an affidavit or
affirmation of the fact in such manner as the Board may require and shall if
the Board so requires, give the Corporation a bond of indemnity in the form and
amount and with one or more sureties satisfactory to the Board, whereupon an
appropriate new certificate may be issued in lieu of the one alleged to have
been lost, stolen or destroyed.
ARTICLE X.
SEAL
The corporate seal shall be in such form as shall be specified in the
minutes of the organizational meeting of the Corporation, or as the Board may
from time to time determine.
<PAGE> 23
ARTICLE XI.
REGISTERED OFFICE AND REGISTERED AGENT
The address of the initial registered office of the corporation is c/o
Marshall E. Wood, Esquire, 303 Centre Street, Suite 100, Fernandina Beach,
Florida 32034 and the name of the initial registered agent is Marshall E. Wood,
Esquire. The corporation may amend this Article XI at any time to change its
registered office or registered agent, without further action of its officers
or directors, by filing with the Secretary of State a notice of such change, in
accordance with Section 607.0502 of the Act, or any successor statute.
The corporation may have other offices at such places within or without
the State of Florida as the Board may from time to time designate or the
business of the Corporation may require or make desirable.
ARTICLE XII.
AMENDMENTS
Section 1. AMENDMENTS GENERALLY.
(a) Except as otherwise provided in the Articles of Incorporation or by
applicable law, the By-Laws of the Corporation may be altered or amended and
new By-Laws may be adopted by 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 By-Laws shall have been given
in the notice of a meeting. Except as otherwise provided in this Article XII,
action by the shareholders with respect to By-Laws shall be taken by an
affirmative vote of seventy-five percent (75%) of each class of stock entitled
to elect directors, and action by the directors with respect to By-Laws shall
be taken by an affirmative vote of a majority of all directors then holding
office.
Section 2. BY-LAW INCREASING QUORUM OR VOTING REQUIREMENTS.
(a) Any By-Law which sets a greater quorum or voting requirement for
shareholders (or voting groups of shareholders) than the minimum required by
the Act may not be adopted, amended or repealed by the Board.
(b) Except as otherwise provided in the Articles of Incorporation, a
By-Law that fixes a greater quorum or voting requirement for the Board than the
minimum required by the Act:
(1) May be amended or repealed only by the shareholders if originally
adopted by the shareholders;
(2) May be amended or repealed either by the directors or the
shareholders if originally adopted by the Board of Directors.
<PAGE> 24
(c) A By-Law adopted or amended by the shareholders that fixes a
greater quorum or voting requirement for the Board may be amended or repealed
only by a specified vote of either the shareholders or the Board, if such
By-Law provision so provides.
<PAGE> 1
EXHIBIT 4.1
INCORPORATED UNDER THE LAWS OF THE
STATE OF FLORIDA
NUMBER -0- 0 SHARES
FIRST CAPITAL BANK HOLDING CORPORATION
COMMON STOCK
This Certifies that SPECIMEN is the owner of SPECIMEN Shares of the Capital
Stock of THE FIRST CAPITAL BANK HOLDING CORPORATION, ORGANIZED UNDER THE LAWS
OF THE STATE OF FLORIDA, fully paid and non-assessable ________ [SEAL]
transferable only on the Books of the Corporation by the holder hereof in
person or by duly authorized Attorney on surrender of this Certificate
properly endorsed.
IN WITNESS WHEREOF the duly authorized officers of this Corporation have
hereunto subscribed their names and caused the corporate Seal to be hereto
affixed at Fernandina Beach, FL this _______________________ day of
_____________________ A.D.
_____________________________ ___________________________
MICHAEL G. SANCHEZ, PRESIDENT LAWRENCE PIPER, SECRETARY
Shares $.01 Par Value Each.
<PAGE> 2
CERTIFICATE
FOR 0 SHARES
OF THE
CAPITAL STOCK
FIRST CAPITAL BANK
HOLDING CORPORATION
ISSUED TO
_______________________
DATED
_______________________
For Value Received, _____ hereby sell, assign and transfer unto
____________________________________________________________________
____________________________________________________________________ Shares
of the Capital Stock represented by the within Certificate, and do hereby
irrevocably constitute and appoint ________________________________________
to transfer the said Stock on the books of the within named Corporation with
full power of substitution in the premises.
Date _____________________________ ____
In presence of
------------------------------ ---------------------------------
NOTICE, THE SIGNATURE OF 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 4.2
First Capital Bank Holding Corporation
1875A South 14th Street
Fernandina Beach, Florida 32034
________________, 1999
The Bankers Bank
3715 Northside Parkway
300 North Creek
Suite 800
Atlanta, Georgia 30327
Attention: [name]
Gentlemen:
First Capital Bank Holding Corporation, a Florida corporation (the
"Company"), proposes to offer for sale up to 1,000,000 shares of its $.01 par
value common stock (the "Common Stock"), which shares shall be registered under
the Securities Act of 1933, as amended, by the filing of a Registration
Statement on Form SB-2 with the Securities and Exchange Commission. Shares will
be offered at a price of $10.00 each. The minimum subscription per subscriber
is 100 shares.
1. The Company hereby appoints and designates you as Escrow Agent for the
purposes set forth herein. By your signature hereto, you acknowledge
and accept said appointment and designation. The Company understands
that you, by accepting said appointment and designation, in no way
endorse the merits of the offering of the shares described herein. The
Company agrees to notify any person acting on its behalf that your
position as Escrow Agent does not constitute such an endorsement, and
to prohibit said persons from the use of your name as an endorser of
such offering. The Company further agrees to allow you to review any
sales literature in which your name appears and which is used in
connection with such offering.
2. The Company shall deliver all payments received in purchase of the
shares (the "Subscription Funds") to you in the form in which they are
received by noon of the next business day after their receipt by the
Company, and the Company shall deliver to you within five (5) calendar
days copies of written acceptances of the Company for shares in the
Company for which the Subscription Funds represent payment. Upon
receipt of such written acceptance by the Company, the Escrow Agent
shall deposit such funds into the Escrow Account. The Company shall
also deliver to you copies of completed Subscription Agreements for
each subscriber, along with such subscriber's name, address, number of
shares subscribed and social security or taxpayer identification
number.
3. Subscription Funds shall be held and disbursed by you in accordance
with the terms of this Agreement.
<PAGE> 2
4. In the event any Subscription Funds are dishonored for payment for any
reason, you agree to orally notify the Company immediately thereof and
to confirm same in writing and to return the dishonored Subscription
Funds to the Company in the form in which they were delivered to you.
5. Should the Company elect to accept a subscription for less than the
number of shares shown in the purchaser's Subscription Agreement, by
indicating such lesser number of shares on the written acceptance of
the Company transmitted to you, you shall deposit such payment in the
escrow account and then remit within ten (10) calendar days after such
deposit to such subscriber at the address shown in his Subscription
Agreement that amount of his Subscription Funds in excess of the
amount which constitutes full payment for the number of subscribed
shares accepted by the Company as shown in the Company's written
acceptance, without interest or diminution. Said address shall be
provided by the Company to you as requested.
6. As used herein, the term "Total Receipts" shall mean the sum of all
Subscription Funds delivered to you pursuant to Paragraph (2) hereof,
less all Subscription Funds returned pursuant to Paragraphs (4) and
(5) hereof.
a. As used herein, the term "Expiration Date" shall mean the date
which marks the 90th day after the date of the Prospectus;
provided, however, in the event that you are given oral
notification, followed in writing, by the Company that it has
elected to extend the offering for an additional period of 90
days after the initial period, then the Expiration Date shall
mean the date which marks the 180th day after the date of the
Prospectus; provided further, in the event that you are given
oral notification, followed in writing, by the Company that
it has elected to extend the offering for an additional
period of 90 days after the first extension, then the
Expiration Date shall mean the date which marks the 270th day
after the date of the Prospectus.
b. If Total Receipts equal $6,100,000 on or before the
Expiration Date, you shall, on the Closing Date, no later
than 10:00 A.M., Eastern Daylight Time, upon receipt of
24-hour written instructions from the Company, remit all
amounts representing Subscription Funds, plus any profits or
earnings thereon after deducting your fees, if any, held by
you pursuant hereto in accordance with such instructions.
7. If (i) Total Receipts are less than $6,100,000 as of 5:00 o'clock
P.M., Eastern Daylight Time on the Expiration Date, or (ii) the
offering is canceled by the Company at any time prior to the
Expiration Date, then you shall promptly remit to each subscriber at
the address set forth in his Subscription Agreement an amount equal to
the amount of his Subscription Funds thereunder, adjusted for his
allocated share of any net profits earned on the investment of the
Subscription Funds as set forth in Paragraph 8, below. The Company
hereby agrees to provide to you in writing the specific allocations of
net profits attributable to each subscriber hereunder.
8. Pending disposition of the Subscription Funds under this Agreement,
you are authorized, upon oral instructions, followed in writing, given
by Michael G. Sanchez, to invest Subscription Funds in Federal Funds,
in short-term direct obligations of the United States government, in
short-term FDIC or FSLIC insured certificates of deposit, and/or in
Fidelity Institutional U.S. Treasury Cash Portfolio, for short-term
obligations of the United States government, but in any case with
maturities of 90 days or less. For purposes of Paragraph 7 above, the
specific allocations of net profits attributable to each subscriber
shall be determined by the Company as follows: each subscriber's
allocated share of earnings on the Subscription Funds, after deducting
your fees, if any, shall be that fraction (i) the numerator of which
is the dollar amount of such subscriber's accepted subscription
multiplied by the number of days between
<PAGE> 3
the date of acceptance of the purchaser's subscription and the date of
the offering's termination, inclusive (the subscriber's "Time
Subscription Factor"), and (ii) the denominator of which is the
aggregate Time Subscription Factors of all purchasers depositing
Subscription Funds in the escrow account.
9. Your obligations as Escrow Agent hereunder shall terminate upon your
transferring all funds you hold hereunder pursuant to the terms of
Paragraphs (4) through (7) herein, as applicable.
10. As used herein, "Closing Date" shall mean the third business day
following the date of receipt by you of Total Receipts aggregating
$6,100,000 and executed Subscription Agreements and copies of written
acceptances of the Company in connection therewith.
11. You shall be protected in acting upon any written notice, request,
waiver, consent, certificate, receipt, authorization, or other paper
or document which you believe to be genuine and what it purports to
be.
12. You shall not be liable for anything which you may do or refrain from
doing in connection with this Escrow Agreement, except your own gross
negligence or willful misconduct.
13. You may confer with legal counsel in the event of any dispute or
question as to the construction of any of the provisions hereof, or
your duties hereunder, and you shall incur no liability and you shall
be fully protected in acting in accordance with the opinions and
instructions of such counsel. Any and all expenses and legal fees in
this regard are payable from the Subscription Funds unless paid by the
Company.
14. In the event of any disagreement between the Company and any other
person resulting in adverse claims and demands being made in
connection with any Subscription Funds involved herein or affected
hereby, you shall be entitled to refuse to comply with any such claims
or demands as long as such disagreement may continue, and in so
refusing, shall make no delivery or other disposition of any
Subscription Funds then held by you under this Agreement, and in so
doing you shall be entitled to continue to refrain from acting until
(a) the right of adverse claimants shall have been finally settled by
binding arbitration or finally adjudicated in a court assuming and
having jurisdiction of the Subscription Funds involved herein or
affected hereby or (b) all differences shall have been adjusted by
agreement and you shall have been notified in writing of such
agreement signed by the parties thereto. In the event of such
disagreement, you may, but need not, tender into the registry or
custody of any court of competent jurisdiction all money or property
in your hands under the terms of this Agreement, together with such
legal proceedings as you deem appropriate and thereupon to be
discharged from all further duties under this Escrow Agreement. The
filing of any such legal proceeding shall not deprive you of your
compensation earned prior to such filing. You shall have no obligation
to take any legal action in connection with this Agreement or towards
its enforcement, or to appear in, prosecute or defend any action or
legal proceeding which would or might involve you in any cost,
expense, loss or liability unless indemnification shall be furnished.
15. You may resign for any reason, upon thirty (30) days written notice to
the Company. Upon the expiration of such thirty (30) day notice
period, you may deliver all Subscription Funds and copies of
Subscription Agreements in your possession under this Escrow Agreement
to any successor Escrow Agent appointed by the Company, or if no
successor Escrow Agent has been appointed, to any court of competent
jurisdiction. Upon either such delivery, you shall be released from
any and all liability under this Escrow Agreement. A termination under
this paragraph shall in no way change the terms of paragraphs 13 and
14 affecting reimbursement of expenses, indemnity and fees. You shall
have the right to deduct from the Subscription Funds transferred to
any successor Escrow Agent any outstanding and unpaid expenses or
fees.
<PAGE> 4
16. You agree to charge your customary and normal fee for your services
hereunder. A copy of the current schedule is attached hereto. The fee
schedule may be modified from time to time. The acceptance fee and
expenses shall be paid in advance or at closing by the Company. Any
subsequent fees and expenses will be paid by the Company upon receipt
of invoice.
17. All notices and communications hereunder shall be in writing and shall
be deemed to be duly given if sent by registered or certified mail,
return receipt requested, to the respective addresses set forth
herein. You shall not be charged with knowledge of any fact, including
but not limited to performance or non-performance of any condition,
unless you have actually received written notice thereof from the
Company or its authorized representative clearly referring to this
Escrow Agreement.
18. The rights created by this Escrow Agreement shall inure to the benefit
of, and the obligations created hereby shall be binding upon the
successors and assigns of you and the parties hereto. Notwithstanding
the foregoing, the Company may not assign its rights hereunder without
your prior written consent.
19. This Escrow Agreement shall be construed and enforced according to the
laws of the State of Florida.
20. This Escrow Agreement shall terminate and you shall be discharged of
all responsibility hereunder at such time as you shall have completed
your duties hereunder.
21. This Escrow Agreement may be executed in several counterparts, which
taken together shall constitute a single document.
22. This Escrow Agreement constitutes the entire understanding and
agreement of the parties hereto with respect to the transactions
described herein and supersedes all prior agreements or
understandings, written or oral, between the parties with respect
thereto. Further, this Escrow Agreement may only be amended by a
written amendment signed by the parties hereto.
23. If any provision of this Escrow Agreement is declared by a court of
competent jurisdiction to be invalid, void or unenforceable, the
remaining provisions shall nevertheless continue in full force and
effect without being impaired or invalidated in any way.
24. The Company shall provide you with its Employer Identification Number
as assigned by the Internal Revenue Service. Additionally, the Company
shall complete and return to you any and all tax forms or reports
required to be maintained or obtained by you. In the event that
Subscription Funds are returned to subscribers pursuant to paragraph 7
hereof, you shall, based upon the information available to you, file
with the Internal Revenue Service and send to each subscriber a Form
1099-INT with respect to contributions of interest to subscribers. All
interest or other income earned under this Escrow Agreement which is
payable to the Company pursuant to paragraph 6 hereof shall be
allocated and paid as directed by the Company and reported to the
Internal Revenue Service as having been so allocated and paid.
25. Your signature hereto is your consent that a signed copy hereof may be
filed with the various regulatory authorities of the State of Florida
and with any Federal Government agencies or regulatory authorities.
<PAGE> 5
Please indicate your acceptance of this Agreement by executing a copy
of this letter and returning it to the undersigned.
Very truly yours,
FIRST CAPITAL BANK HOLDING CORPORATION
By:
-------------------------------------
Michael G. Sanchez
President and Chief Executive Officer
Attest:
- -------------------------------
Secretary
(CORPORATE SEAL)
ACCEPTED AND AGREED:
THE BANKERS BANK
By:
----------------------------------
Vice President
<PAGE> 1
EXHIBIT 10.1
PARTIES AND DESCRIPTION OF PROPERTY
1. SALE AND PURCHASE: Bosco Enterprises ("Seller") and Nassau
Bank Group ("Buyer") agree to sell and buy on the terms and conditions specified
below the property ("Property") described as:
Address: Lots 7 and 8 South Fourteenth Street
------------------------------------
Legal Description: Lots 7 and 8 Magnolia Point Commercial Subdivision
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
including all improvements and the following additional property:
______________
_______________________________________________________________________________
PRICE AND FINANCING
2. PURCHASE PRICE: $265,000 payable by Buyer in U.S. funds as
follows:
<TABLE>
<S> <C>
(a) $ 1,000 Deposit received (checks are subject to clearance) 6-16, 1998 by
--------
/s/ William J. Mock, Jr. for Prudential Island Realty
-----------------------------------------------------
Signature Name of Company
("Escrow Agent")
(b) $ 10,000 Additional deposit to be made by 6-16, 1998.
------------
(c) $ Total Financing (see Paragraph 3 below) (express as a dollar amount or
-------- percentage).
(d) $ Other:_______________________________________________________________
--------
(e) $254,000 Balance to close (not including BUYER'S closing costs, prepaid
-------- items and prorations). All funds paid at closing must be paid by
locally drawn cashier's check or wired funds.
</TABLE>
[ ](f) (complete only if purchase price will be determined based on a
per unit cost instead of a fixed price). The unit used to determine the
purchase price is [ ] lot [ ] acre [ ] square foot [ ] other (spec)
prorating areas of less than a full unit. The purchase price will be
$__________ per unit based on a calculation of total area of the
Property as certified to BUYER and SELLER by a Florida-licensed
surveyor in accordance with Paragraph 8(c) of this Contract. The
following rights of way and other areas will be excluded from the
calculation:___________________________________________________________
_______________________________________________________________________
3. CASH/FINANCING: (Check as applicable) [X] (a) BUYER will pay
cash for the Property with no financing contingency. [ ] (b) This Contract is
contingent on BUYER qualifying and obtaining the commitment(s) or approval(s)
specified below within____days from Effective Date (if left blank then Closing
Date or 30 days from Effective Date, whichever occurs first). BUYER will apply
for financing within____days from the Effective Date (5 days if left blank)
("Application Period") and will timely provide any and all credit, employment,
financial, and other information required by the lender. If BUYER, after using
diligence and good faith, cannot obtain the financing, either
<PAGE> 2
party may cancel this Contract and BUYER will return to SELLER all the evidence
and surveys provided by SELLER, and BUYER'S deposit(s) will be returned after
Escrow Agent receives proper authorization from all interested parties. BUYER
will pay all loan expenses, including the lender's title insurance policy.
[ ] (1) NEW FINANCING: BUYER will secure a commitment for new third
party financing for $____or % of the purchase price at the prevailing
interest rate and loan costs. BUYER will keep SELLER and Broker fully
informed of the loan application status and progress and authorizes
the lender or mortgage broker to disclose all such information to
SELLER and Broker.
[ ] (2) SELLER FINANCING: BUYER will execute a [ ] first [ ] second
purchase money note and mortgage to SELLER in the amount of $_________,
bearing annual interest at____ % and payable as follows:_______________
_______________________________________________________________________
The mortgage, note, and any security agreement will be in a form
acceptable to SELLER and will follow forms generally accepted in the
county where the Property is located; will provide for a late payment
fee and acceleration at the mortgagee's option if BUYER defaults; will
give BUYER the right to prepay without penalty all or part of the
principal at any time(s) with interest only to date of payment; will
be due on conveyance or sale; will provide for release of contiguous
parcels, if applicable; and will require BUYER to keep liability
insurance on the Property, with SELLER as additional named insured.
BUYER authorizes SELLER to obtain credit, employment and other
necessary information to determine creditworthiness for the financing.
SELLER will, within 10 days from Effective Date, give BUYER written
notice of whether or not SELLER will make the loan.
This Contract is not assignable without SELLER'S written consent.
[ ] (3) MORTGAGE ASSUMPTION: BUYER will take title subject to and
assume and pay existing first mortgage to______________________________
______________________________ LN#_____________________________ in the
approximate amount of $___________ currently payable at $ per month
including principal, interest, [ ] taxes and insurance and having a [ ]
fixed [ ] other (describe) interest rate of % which [ ] will [ ] will
not escalate upon assumption. Any variance in the mortgage will be
adjusted in the balance due at closing with no adjustment to purchase
price. BUYER will purchaser SELLER'S escrow account dollar for dollar.
If the lender disapproves BUYER, or the interest rate upon transfer
exceeds ____% or the assumption/transfer exceeds $______, either party
may elect to pay the excess, failing which this agreement will
terminate and BUYER'S deposit(s) will be returned.
CLOSING
4. CLOSING DATE; OCCUPANCY: This Contract will be closed and the
deed and possession delivered on or before August 1, 1998, unless extended by
other provisions of this Contract. If on Closing Date insurance Underwriting is
suspended, BUYER may postpone closing up to 5 days.
5. CLOSING PROCEDURE; COSTS: If title insurance insures buyer for
title defects arising between the title binder effective date and recording of
BUYER'S deed, closing agent will disburse at closing the net sale proceeds to
SELLER and brokerage fees to Broker as per Paragraph 17. In addition to other
expenses provided in this Contract, SELLER and BUYER will pay the costs
indicated below.
(A) SELLER COSTS: SELLER will pay taxes on the deed and
recording fees for documents needed to cure title; certified, confirmed and
ratified special assessment liens; title evidence (if applicable under Paragraph
8); Other:______________________________________________________________________
_______________________________________________________________________
(B) BUYER COSTS: BUYER will pay taxes and recording fees
on notes and mortgages and recording fees on the deed and financing statements;
loan expenses; pending special assessment liens; lender's title policy at the
simultaneous issue rate; inspections; survey and sketch; insurance; Other:______
_________________________
(C) TITLE EVIDENCE AND INSURANCE: CHECK (1) OR (2):
<PAGE> 3
[X] (1) SELLER will provide a Paragraph 8(a)(1) owner's title
insurance commitment as title: [ ] SELLER [ ] BUYER will
select the title agent. [ ] SELLER |X| BUYER will pay for the
owner's title policy, search, examination and related charges.
Each party will pay its own closing fees.
[ ] (2) SELLER will provide title evidence as specified in
Paragraph 8(a)(2). [ ] SELLER [ ] BUYER will pay for the
owner's title policy and select the title agent. SELLER will
pay fees for title searches prior to closing, including tax
search and lien search fees, and BUYER will pay fees for
title searches after closing (if any), title examination fees
and closing fees.
(D) PRORATIONS: The following items will be made current and
prorated as of the day before Closing Date; real estate taxes, interest, bonds,
assessments, leases and other Property expenses and revenues. If taxes and
assessments for the current year cannot be determined, the previous year's rates
will be used with adjustment for any exemptions.
(E) TAX WITHHOLDING: BUYER and SELLER will comply with the Foreign
Investment in Real Property Tax Act, which may require SELLER to provide
additional cash at closing if SELLER is a "foreign person" as defined by federal
law.
PROPERTY CONDITION
6. LAND USE: SELLER will deliver the Property to BUYER at the
time agreed in its present "as is" condition, with conditions resulting from
BUYER'S Inspections and casualty damage, if any, excepted. SELLER will maintain
the landscaping and grounds in a comparable condition and will not engage in or
permit any activity that would materially alter the Property's condition without
the BUYER'S prior written consent.
(A) RESIDENTIAL PROPERTY ONLY: SELLER represents that,
other than N/A SELLER does not know of any facts that materially affect
the value of the Property other than those that BUYER knows or can
readily observe, or of any violations of governmental laws, rules or
regulations applicable to the Property in its existing use.
(B) FLOOD ZONE: BUYER is advised to verify by survey,
with the lender and with appropriate government agencies which flood zone the
Property is in, whether flood insurance is required and what restrictions apply
to improving the Property and rebuilding in the event of casualty.
(C) GOVERNMENT REGULATION: BUYER is advised that changes
in government regulations and levels of service which affect BUYER'S intended
use of the Property will not be grounds for canceling this Contract if the
Feasibility Study Period has expired or if BUYER has checked choice (d)(2)
below.
(D) INSPECTIONS: (check (1) or (2) below)
[ ] (1) FEASIBILITY STUDY: BUYER will, at BUYER'S expense and
within ____ days from Effective Date ("Feasibility Study
Period"), determine whether the Property is suitable, in
BUYER'S sole and absolute discretion, for N/A use. During the
Feasibility Study Period, BUYER may conduct a Phase I
environmental assessment and any other tests, analyses,
surveys and investigations ("Inspections") that BUYER deems
necessary to determine to BUYER'S satisfaction the Property's
engineering, architectural and environmental properties;
zoning and zoning restrictions; subdivision statutes; soil
and grade; availability of access to public roads, water, and
other utilities; consistency with local, state and regional
growth management plans; availability of permits, government
approvals, and licenses; and other Inspections that BUYER
deems appropriate to determine the Property's suitability for
the BUYER'S intended use. If the Property must be rezoned,
BUYER is required to file in connection with development or
rezoning approvals, provided SELLER incurs no expense or
liability in the application process or related proceedings.
SELLER gives BUYER, its agents, contractors and assigns, the
right to enter the Property at any time during the
Feasibility Study Period for the purposes of conducting
Inspections; provided, however, that BUYER, its agents,
contractors and assigns enter the Property and conduct
Inspections at their own risk. BUYER will indemnify and hold
SELLER harmless from losses, damages, costs, claims and
expenses of any nature, including attorney's fees, and from
liability to any person, arising from the conduct of any and
all Inspections or any work authorized by BUYER. BUYER will
not engage in any activity that could result in a
construction lien being filed against the Property without
SELLER'S prior written consent. If this transaction does not
close, BUYER will, at BUYER'S expense, (1) repair all
<PAGE> 4
damages to the Property resulting from the Inspections and
return the Property to the condition it was in prior to
conduct of the Inspections, and (2) release to SELLER all
reports and other work generated as a result of the
Inspections.
BUYER will deliver written notice to SELLER prior to the
expiration of the Feasibility Study Period of BUYER'S
determination of whether or not the Property is acceptable.
BUYER'S failure to comply with this notice requirement will
constitute acceptance of the Property as suitable for BUYER'S
intended use in its "as is" condition. If the Property is
unacceptable to BUYER and written notice of this fact is
timely delivered to SELLER, this Contract will be deemed
terminated as of the day after the Feasibility Study period
ends and BUYER'S deposit(s) will be returned after Escrow
Agent receives proper authorization from all interested
parties.
[X] (2) NO FEASIBILITY STUDY: BUYER is satisfied that the
Property is suitable for BUYER'S purposes, including being
satisfied that either public sewerage and water are available
to the Property or the Property will be approved for the
installation of a well and/or private sewerage disposal
system and that existing zoning and other pertinent
regulations and restrictions, such as subdivision or deed
restrictions, concurrency, growth management and
environmental conditions, are acceptable to BUYER. This
Contract is not contingent on BUYER conducting any further
investigations.
7. RISK OF LOSS; EMINENT DOMAIN: If any portion of the Property
is materially damaged by casualty before closing, or SELLER negotiates with a
governmental authority to transfer all or part of the Property in lieu of
eminent domain proceedings, or if an eminent domain proceeding is initiated,
SELLER will promptly inform BUYER. Either party may cancel this Contract by
written notice to the other within 10 days from BUYER'S receipt of SELLER'S
notification, failing which BUYER will close in accordance with this Contract
and receive all payments made by the government authority or insurance company,
if any.
TITLE
8. TITLE: SELLER will convey marketable title to the Property by
statutory warranty deed or trustee, personal representative or guardian deed as
appropriate to SELLER'S status.
(A) TITLE EVIDENCE: Title evidence will show legal access
to the Property and marketable title of record in SELLER in accordance with
current title standards adopted by the Florida Bar, subject only to the
following title exceptions, none of which prevent residential use of the
Property: covenants, easements and restrictions of record; matters of plat;
existing zoning and government regulations; oil, gas and mineral rights of
record if there is no right of entry; current taxes; mortgages that BUYER will
assume; and encumbrances that SELLER will discharge at or before closing. SELLER
will, prior to closing, deliver to BUYER SELLER'S choice of one of the following
types of title evidence, which must be generally accepted in the county where
the Property is located (specify in Paragraph 5(C) the selected type). SELLER
will use option (1) in Palm Beach County and option (2) in Dad County.
(1) A TITLE INSURANCE COMMITMENT issued by a Florida-licensed
title insurer on the amount of the purchase price and subject
only to title exceptions set forth in this Contract.
(2) AN EXISTING ABSTRACT OF TITLE from a reputable and
existing abstract firm (if firm is not existing, then
abstract must be certified as correct by an existing firm)
purporting to be an accurate synopsis of the instruments
affecting title to the Property recorded in the public
records of the county where the Property is located and
certified to Effective Date. However, if such an abstract is
not available to SELLER, then a PRIOR OWNER'S TITLE POLICY
acceptable to the proposed insurer as a base for reissuance
of coverage. SELLER will pay for copies of all policy
exceptions and an update in a format acceptable to BUYER'S
closing agent from the policy effective date and certified to
BUYER or BUYER'S closing agent, together with copies of all
documents recited in the prior policy and in the update. If a
prior policy is not available to SELLER then (1) above will
be the title evidence. Title evidence will be delivered no
later than 10 days before Closing Date.
(b) TITLE EXAMINATION: BUYER will examine the title
evidence and deliver written notice to SELLER, within 5 days from receipt of
title evidence but no later than closing, of any defects that make the title
<PAGE> 5
unmarketable. SELLER will have 30 days from receipt of BUYER'S notice of
defects ("Curative Period") to cure the defects at SELLER'S expense. If SELLER
cures the defects within the Curative Period, SELLER will deliver written
notice to BUYER and the parties will close the transaction on Closing Date or
within 10 days from BUYER'S receipt of SELLER'S notice if Closing Date has
passed. If SELLER is unable to cure the defects within the Curative Period,
SELLER will deliver written notice to BUYER and the parties will close the
transaction on Closing Date or within 10 days from BUYER'S receipt of SELLER'S
notice if Closing Date has passed. If SELLER is unable to cure the defects
within the Curative Period, SELLER will deliver written notice to BUYER and the
parties will close the transaction on Closing Date or within 10 days from
BUYER'S receipt of SELLER'S notice if Closing Date has passed. If SELLER is
unable to cure the defects within the Curative Period, SELLER will deliver
written notice to BUYER and BUYER will, within 10 days from receipt of SELLER'S
notice, either cancel this Contract or accept title with existing defects and
close the transaction.
(c) SURVEY: BUYER may, prior to Closing Date and at
BUYER'S expense, have the Property surveyed and deliver written notice to
SELLER, within 5 days from receipt of survey but no later than closing, of any
encroachments on the Property, encroachments by the Property's improvements on
other lands or deed restriction or zoning violations. Any such encroachment or
violation will be treated in the same manner as a title defect and BUYER'S and
SELLER'S obligations will be determined in accordance with subparagraph (b)
above. If any part of the Property lies seaward of the coastal construction
control line, SELLER will provide BUYER with an affidavit or survey as required
by law delineating the line's location on the property, unless BUYER waives this
requirement in writing.
MISCELLANEOUS
9. EFFECTIVE DATE; TIME: The "Effective Date" of this Contract is
the date on which the last of the parties initials or signs the latest offer.
TIME IS OF THE ESSENCE FOR ALL PROVISIONS OF THIS CONTRACT. All time periods
will be computed in business days (a "business day" is every calendar day except
Saturday, Sunday and national legal holidays). If any deadline falls on a
Saturday, Sunday or national legal holiday, performance will be due the next
business day. All time periods will end at 5:00 p.m. local time (meaning in the
county where the Property is located) of the appropriate day.
10. NOTICES: All notices will be made to the parties and Broker by
mail, personal delivery or electronic media. BUYER'S FAILURE TO DELIVER TIMELY
WRITTEN NOTICE TO SELLER, WHEN SUCH NOTICE IS REQUIRED BY THIS CONTRACT,
REGARDING ANY CONTINGENCIES WILL RENDER THAT CONTINGENCY NULL AND VOID AND THE
CONTRACT WILL BE CONSTRUED AS IF THE CONTINGENCY DID NOT EXIST.
11. COMPLETE AGREEMENT: This Contract is the entire agreement
between BUYER and SELLER. EXCEPT FOR BROKERAGE AGREEMENTS, NO PRIOR OR PRESENT
AGREEMENTS WILL BIND BUYER, SELLER OR BROKER UNLESS INCORPORATED INTO THIS
CONTRACT. Modifications of this Contract will not be binding unless in writing,
signed and delivered by the party to be bound. Signatures, initials, documents
referenced in this Contract, counterparts and written modifications communicated
electronically or on paper will be acceptable for all purposes, including
delivery, and will be binding. Handwritten or typewritten terms inserted in or
attached to this Contract prevail over preprinted terms. If any provision of
this Contract is or becomes invalid or unenforceable, all remaining provisions
will continue to be fully effective. This Contract will not be recorded in any
public records.
12. ASSIGNABILITY; PERSONS BOUND: BUYER may NOT assign this
Contract without SELLER'S written consent. The terms "BUYER," "SELLER" and
"Broker" may be singular or plural. This Contract is binding on the heirs,
administrators, executors, personal representatives and assigns (if permitted)
of BUYER, SELLER and Broker.
DEFAULT AND DISPUTE RESOLUTION
13. DEFAULT: (A) SELLER DEFAULT: If for any reason other than
failure of SELLER to make SELLER'S title marketable after diligent effort,
SELLER fails, refuses or neglects to perform this Contract, BUYER may choose to
receive a return of BUYER'S deposit without waiving the right to seek damages or
to seek specific performance as per Paragraph 16. SELLER will also be liable to
Broker for the full amount of the brokerage fee. (B) BUYER DEFAULT: If BUYER
fails to
<PAGE> 6
perform this Contract within the time specified, including timely payment of
all deposits. SELLER may choose to retain and collect all deposits paid and
agreed to be paid as liquidated damages or to seek specific performance as per
Paragraph 16; and Broker will, upon demand, receive 50% of all deposits paid
and agreed to be paid (to be split equally among cooperating brokers) up to the
full amount of the brokerage fee.
14. DISPUTE RESOLUTION: This Contract will be construed under
Florida law. All controversies, claims, and other matters in question between
the parties arising out of or relating to this Contract or its breach will be
settled as follows:
(a) DISPUTES CONCERNING ENTITLEMENT TO DEPOSITS MADE AND
AGREED TO BE MADE: BUYER and SELLER will have 30 days from the date conflicting
demands are made to attempt to resolve the dispute through MEDIATION. If that
fails, Escrow Agent will submit the dispute, if so required by Florida law, to
Escrow Agent's choice of arbitration, a Florida court or the Florida Real Estate
Commission. BUYER and SELLER will be bound by any resulting settlement or order.
(b) ALL OTHER DISPUTES: BUYER and SELLER will have 30
days from the date a dispute arises between them to attempt to resolve the
matter through mediation, failing which the parties will resolve the dispute
through neutral binding ARBITRATION in the county where the Property is located.
The arbitrator may not alter the Contract terms or award any remedy not provide
for in this Contract. The award will be based on the greater weight of the
evidence and will state findings of fact and the contractual authority on which
it is based. If the parties agree to use discovery, it will be in accordance
with the Florida Rules of Civil Procedure and the arbitrator will resolve all
discovery-related disputes. Any disputes with a real estate license named in
Paragraph 17 will be submitted to arbitration only if the licensee's broker
consents in writing to become a party to the proceeding. This clause will
survive closing.
(c) MEDIATION AND ARBITRATION; EXPENSES: "Mediation" is a
process in which parties attempt to resolve a dispute by submitting it to an
impartial mediator who facilitates the resolution of the dispute but who is not
empowered to impose a settlement on the parties. Mediation will be in accordance
with the rules of the American Mediation Association or other mediator agreed on
by the parties. The parties will equally divide the mediation fee, if any.
"Arbitration" is a process in which the parties resolve a dispute by a hearing
before a neutral person who decides the matter and whose decision is binding on
the parties. Arbitration will be in accordance with the rules of the American
Arbitration Association or other arbitrator agreed on by the parties. Each party
to any arbitration will pay its own fees, costs and expenses, including
attorneys' fees, and will equally split the arbitrators' fees and administrative
fees of arbitration.
ESCROW AGENT AND BROKER
15. ESCROW AGENT. BUYER and SELLER authorize Escrow Agent to
receive, deposit and hold funds and other items in escrow and, subject to
clearance, disburse them upon proper authorization and in accordance with the
terms of this Contract, including disbursing brokerage fees. The parties agree
that Escrow Agent will not be liable to any person for misdelivery of escrowed
items to BUYER or SELLER, unless the misdelivery is due to Escrow Agent's
willful breach of this Contract or gross negligence. If Escrow Agent interpleads
the subject matter of the escrow, Escrow Agent will pay the filing fees and
costs from the deposit and will recover reasonable attorneys' fees and costs to
be paid from the escrowed funds or equivalent and charged and awarded as court
costs in favor of the prevailing party. All claims against Escrow Agent will be
arbitrated, so long as Escrow Agent consents to arbitrate.
16. PROFESSIONAL ADVICE; BROKER LIABILITY: Broker advises BUYER
and SELLER to verify all facts and representations that are important to them
and to consult an appropriate professional for legal advice (for example,
interpreting contracts, determining the effect of laws on the Property and
transaction, status of title, foreign investor reporting requirements, etc.) and
for tax, property, condition, environmental and other specialized advice. BUYER
acknowledges that Broker does not reside in the Property and that all
representations (oral, written or otherwise) by Broker are based on SELLER
representations or public records unless Broker indicates personal verification
of the representation. BUYER AGREES TO RELY SOLELY ON SELLER, PROFESSIONAL
INSPECTORS AND GOVERNMENTAL AGENCIES FOR VERIFICATION OF THE PROPERTY CONDITION
AND FACTS THAT MATERIALLY AFFECT PROPERTY VALUE. BUYER and SELLER
<PAGE> 7
respectively will pay all costs and expenses, including reasonable attorneys'
fees at all levels, incurred by Broker and Broker's officers, directors, agent
and employees in connection with or arising from BUYER'S or SELLER'S
misstatement or failure to perform contractual obligations. BUYER and SELLER
hold harmless and release Broker and Broker's officers, directors, agents and
employees from all liability for loss or damage based on (1) BUYER'S or
SELLER'S misstatement or failure to perform contractual obligations; (2)
Broker's performance, at BUYER'S and/or SELLER'S request, of any task beyond
the scope of services regulated by Chapter 475, F.S., as amended, including
Broker's referral, recommendation or retention of any vendor; (3) products or
services provided by any vendor; and (4) expenses incurred by any vendor. BUYER
and SELLER each assume full responsibility for selecting and compensating their
respective vendors. This paragraph will not relieve Broker of statutory
obligations. For purposes of this paragraph, Broker will be treated as a party
to this Contract. This paragraph will survive closing.
17. BROKERS: The licensee(s) and brokerage(s) named below are
collectively referred to as "Broker." SELLER and BUYER acknowledge that the
brokerage(s) named below are the procuring cause of this transaction.
INSTRUCTION TO CLOSING AGENT: SELLER and BUYER direct closing agent to disburse
at closing the full amount of the brokerage fees as specified in separate
brokerage agreements with the parties and cooperative agreements between the
brokers, unless Broker has retained such fees from the escrowed funds. In the
absence of such brokerage agreements, closing agent will disburse brokerage
fees as indicated below.
<TABLE>
<S> <C>
- ----------------------------------- --------------------------------------------------------
Real Estate Licensee Real Estate Licensee
N/A N/A
- ----------------------------------- --------------------------------------------------------
Broker / Brokerage fee: Broker / Brokerage fee:
------------ ---------------------------------
</TABLE>
ADDITIONAL TERMS
18. ADDITIONAL TERMS:_____________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
THIS IS INTENDED TO BE A LEGALLY BINDING CONTRACT. IF NOT FULLY
UNDERSTOOD, SEEK THE ADVICE OF AN ATTORNEY PRIOR TO SIGNING.
<PAGE> 8
OFFER AND ACCEPTANCE
(CHECK IF APPLICABLE: [ ] BUYER received a written real property disclosure
statement from SELLER before making this Offer.) BUYER offers to purchase the
Property on the above terms and conditions. Unless this Contract is signed by
SELLER and a copy delivered to BUYER no later than 5:00 [ ] a.m. [X] p.m. on
6-16 , 1998, this offer will be revoked and BUYER'S deposit refunded subject to
clearance of funds.
<TABLE>
<S> <C>
Date: 6/16/98 BUYER: /s/William J. Mock, Jr. Tax ID/SSN:
---------------------- ------------------------------ -----------------------
Print name: William J. Mock, Jr.
-------------------------
for Nassau Bank Group
Date: BUYER: Tax ID/SSN:
---------------------- -------------- ----------------------------------------
Print name:
-----------------
Phone: Address:
------------ -----------------------------------------------------------------------
Fax:
----------------------- -----------------------------------------------------------------------
Date: SELLER: Tax ID/SSN:
---------------------- -------------------------------- -----------
Print name:
-----------------
Date: SELLER: Tax ID/SSN:
---------------------- -------------------------------- -----------
Print name:
-----------------
Phone: Address:
------------ -----------------------------------------------------------------------
Fax:
----------------------- -----------------------------------------------------------------------
</TABLE>
[ ] SELLER counters BUYER'S offer (to accept the counter offer, BUYER must sign
or initial the counter offered terms and deliver a copy of the acceptance to
SELLER by 5:00 p.m. on _______________, 19____). [ ] SELLER rejects BUYER'S
offer.
- --------------------------------------------------------------------------------
EFFECTIVE DATE: _________________ (THE DATE ON WHICH THE LAST PARTY SIGNED OR
INITIALED ACCEPTANCE OF THE FINAL OFFER.)
- --------------------------------------------------------------------------------
THE FLORIDA ASSOCIATION OF REALTORS AND LOCAL BOARD/ASSOCIATION OF
REALTORS MAKE NO REPRESENTATION AS TO THE LEGAL VALIDITY OR ADEQUACY OF ANY
PROVISION OF THIS FORM IN ANY SPECIFIC TRANSACTION. THIS STANDARDIZED FORM
SHOULD NOT BE USED IN COMPLEX TRANSACTIONS OR WITH EXTENSIVE RIDERS OR
ADDITIONS. THIS FORM IS AVAILABLE FOR USE BY THE ENTIRE REAL ESTATE INDUSTRY
AND IS NOT INTENDED TO IDENTIFY THE USER AS A REALTOR. REALTOR IS A REGISTERED
COLLECTIVE MEMBERSHIP MARK THAT MAY BE USED ONLY BY REAL ESTATE LICENSEES WHO
ARE MEMBERS OF THE NATIONAL ASSOCIATION OF REALTORS AND WHO SUBSCRIBE TO ITS
CODE OF ETHICS.
<PAGE> 1
EXHIBIT 10.2
AMENDED AND RESTATED
EMPLOYMENT AGREEMENT
THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT (the "Agreement"), dated
as of the first day of September 1998, is made and entered into by and among
FIRST CAPITAL BANK HOLDING CORP., a Florida corporation (the "Company"), FIRST
NATIONAL BANK OF NASSAU COUNTY (Proposed), a proposed national bank to be
organized under the laws of the United States (the "Bank") (the Company and the
Bank are collectively referred to herein as the "Employer"), and MICHAEL G.
SANCHEZ (the "Executive"). Unless expressly stated otherwise herein, this
Agreement shall be deemed to supersede all prior warranties, representations,
covenants and agreements among the parties hereto.
W I T N E S S E T H:
WHEREAS, the directors of the Company, as organizers of the Bank, are
seeking approval from the Comptroller of the Currency ("OCC") and the Federal
Deposit Insurance Corporation ("FDIC") to charter a national bank in Nassau
County, Florida; and
WHEREAS, Executive is willing to assist the directors of the Company
in the organization of the Bank and to become the President and Chief Executive
Officer of the Bank and the Company in accordance with the terms and conditions
hereinafter set forth;
NOW, THEREFORE, for and in consideration of the mutual premises and
covenants herein contained, the parties hereto agree as follows:
1. EMPLOYMENT. Employer employs Executive and Executive accepts
employment upon the terms and conditions set forth in this Agreement.
2. TERM. The term of employment of Executive under this Agreement
shall be the five year period commencing on August 15, 1998.
3. COMPENSATION.
(a) Salary. For all services rendered by Executive,
Executive shall be paid a minimum annual base salary of $96,000, payable in
equal semi-monthly installments during the term of this Agreement. Salary
payments shall be subject to withholding and other applicable taxes. Such base
salary shall be increased from time to time in the sole discretion of the Board
of Directors of the Bank.
<PAGE> 2
(b) Bonus. Executive shall receive a bonus of $10,000 as
soon as practicable after the Bank opens for business. Beginning on the first
anniversary of the Bank's opening for business and on each successive
anniversary until the Bank is profitable on a cumulative basis, in addition to
Executive's base salary, Executive shall be eligible to receive such performance
bonuses as determined in the discretion of the Board of Directors of the Bank.
Beginning at the end of the first year in which the Bank becomes profitable on a
cumulative basis and continuing in each successive year thereafter during the
term hereof, Executive shall receive a bonus equal to five percent (5%) of the
pre-tax net income of the Bank and Bank-related entities. The payment of any
bonus pursuant to this Section 3(b) shall be contingent upon the following:
(i) Prior to the granting of any bonus to
Executive, the Board of Directors of the Bank shall consider, and document its
findings in the minutes of the meeting wherein the issue was considered,
Executive's performance in light of the status of the Bank's internal controls,
loan documentation, credit underwriting, interest rate exposure, asset growth,
asset quality, earnings, and such other performance goals and objectives
mutually agreed upon between Executive and such Board of Directors.
(ii) The overall condition of the Bank must be
"satisfactory" in the opinion of the OCC as set forth in the most current OCC
Report of Supervisory Activity provided to the Board of Directors of the Bank
and the Uniform Financial Institution Rating of the Bank shall not be less than
a "2"; and
(iii) The Bank shall be "well capitalized" as
defined under regulations promulgated by the OCC pursuant to the Federal Deposit
Insurance Corporation Improvement Act of 1991.
4. TITLE AND DUTIES. Executive shall serve as Chief Executive
Officer of the Bank once the OCC has granted preliminary charter approval and a
member of the Interim Board of Directors and the initial Board of Directors of
the Bank. Executive shall run the day-to-day activities of the Bank and oversee
the Bank, within the framework of the approval annual budget, and with a sound
system of internal controls and in compliance with the policies of the Board of
Directors of the Bank, and all applicable laws and regulations. Executive shall
also serve as Chief Executive Officer of the Company and shall be nominated as a
director of the Company for the term of this Agreement.
5. EXTENT OF SERVICES. Executive shall devote his entire time,
attention and energies to the business of Employer and shall not during the term
of this Agreement be engaged in any other business activity which requires the
attention or participation of Executive during normal business hours of
Employer, recognition being given to the fact that Executive is expected on
occasion to participate in client development after normal business hours.
However, Executive may invest his assets in such form or manner as will not
require his services in the operation of the affairs of the companies in which
such investments are made. Executive shall notify Employer of any participation
by him in any trade association or similar organization.
<PAGE> 3
6. EXPENSES. Executive may incur reasonable expenses for
promoting the business of the Bank, including expenses for entertainment,
travel, and similar items. Executive will be reimbursed for all such expenses
upon Executive's monthly presentation of an itemized account of such
expenditures.
7. VACATIONS. Executive shall be entitled each year to a vacation
in accordance with the personnel policy established by the Bank's Board of
Directors during which time Executive's compensation shall be paid in full.
8. ADDITIONAL COMPENSATION. As additional consideration paid to
Executive, Executive shall be provided with health, hospitalization, disability
and term life insurance, and participation in the Bank's incentive compensation
plan (in the event one is adopted by the Board of Directors of the Bank). In
addition, Executive shall be provided with an automobile at a cost to Employer
not to exceed $25,000 as soon as the Company's initial public offering is
completed. The Company shall also grant to Executive options to purchase shares
in the amount of the lesser of (i) 30,000 shares or (ii) five percent (5%) of
the number of shares of Common Stock of the Company sold in its initial public
offering, at a purchase price equal to the per share price in the Company's
initial public offering, pursuant to the Company's Incentive Stock Option Plan,
as soon as practicable after the Bank commences business. Twenty percent (20%)
of these options shall vest beginning on the date the Bank commences business
and twenty percent (20%) shall vest on each of the four successive anniversaries
of the Bank's opening for business. All options shall be exercisable for a
period of ten (10) years from the date of grant. Executive shall also be
reimbursed for the costs of joining one civic club and one country club
(including initiation fees, dues and assessments) once the Bank has become
profitable on a cumulative basis.
9. CHANGE IN CONTROL OF THE COMPANY.
(a) In the event of a "change in control" of the Company,
as defined herein, Executive shall be entitled, for a period of thirty (30) days
from the date of closing of the transaction effecting such change in control and
at his election, to give written notice to Employer of termination of this
Agreement and to receive a cash payment equal to two hundred ninety-nine percent
(299%) times the compensation, including bonus, if any, received by Executive in
the one-year period immediately preceding the change in control. The severance
payments provided for in this Section 9(a) shall be paid in cash, commencing not
later than ten (10) days after the date of notice of termination by Executive
under this Section 10 or ten (10) days after the date of closing of the
transaction effecting the change in control of the Company, whichever is later.
(b) For purposes of this Section 9, "change in control"
of the Company shall mean:
(i) any transaction, whether by merger,
consolidation, asset sale, tender offer, reverse stock split, or otherwise,
which results in the acquisition or beneficial ownership (as
<PAGE> 4
such term is defined under rules and regulations promulgated under the
Securities Exchange Act of 1934, as amended) by any person or entity or any
group of persons or entities acting in concert, of 50% or more of the
outstanding shares of Common Stock of the Company;
(ii) the sale of all or substantially all of the
assets of the Company; or
(iii) the liquidation of the Company.
10. TERMINATION.
(a) For Cause. This Agreement may be terminated by the
Board of Directors of the Bank without notice and without further obligation
than for monies already paid, for any of the following reasons:
(i) receipt by the Bank of written notice from
the OCC that the OCC has criticized Executive's performance or his area of
responsibility, and has either (a) rated the Bank a "4" or a "5" under the
Uniform Financial Rating System or (b) has determined that the Bank is in a
"troubled condition" as defined under Section 914 of the Financial Institutions
Reform, Recovery and Enforcement Act of 1989;
(ii) failure of Executive to follow reasonable
written instructions or policies of the Board of Directors of the Bank;
(iii) gross negligence or willful misconduct of
Executive materially damaging to the business of the Bank during the term of
this Agreement, or at any time while he was employed by the Bank prior to the
term of this Agreement, if not disclosed to the Bank prior to the commencement
of the term of this Agreement; or
(iv) arrest for, charged in relation to, by
criminal information, indictment or otherwise, or conviction of Executive during
the term of this Agreement of a crime involving breach of trust or moral
turpitude.
In the event that the Bank discharges Executive alleging
"cause" under this Section 10(a) and it is subsequently determined judicially
that the termination was "without cause," then such discharge shall be deemed a
discharge without cause subject to the provisions of Section 10(b) hereof. In
the event that the Bank discharges Executive alleging "cause" under this Section
10(a), such notice of discharge shall be accompanied by a written and specific
description of the circumstances alleging such "cause." The termination of
Executive for "cause" shall not entitle the Bank to enforcement of the
non-competition and non-solicitation covenants contained in Section 12 hereof.
<PAGE> 5
(b) Without Cause.
(i) The Bank may, upon thirty (30) days' written
notice to Executive, terminate this Agreement without cause at any time during
the term of this Agreement upon the condition that Executive shall be entitled,
as liquidated damages in lieu of all other claims, to the payment of his base
salary for a period of twelve months. The severance payments provided for in
this Section 10(b) shall commence not later than thirty (30) days after the
actual date of termination of employment of Executive. The termination of
Executive "without cause" shall not entitle the Bank to enforcement of the
non-competition and non-solicitation covenants contained in Section 12 hereof.
(ii) Executive may upon thirty (30) days' written
notice to Employer terminate this Agreement without cause at any time during the
term of this Agreement. In the event of termination of this Agreement by
Executive, the Bank shall have no further obligation to Executive than for
monies paid and the Bank shall be entitled to enforcement of the non-competition
and non-solicitation covenants contained in Section 12 hereof.
(iii) In the event this Agreement is terminated
without cause by the Bank, any stock options or unexercised portion thereof,
granted pursuant to this Agreement, whether or not vested on the date of
termination, may be exercised by Executive within thirty (30) days from the date
of termination, at which time all such options shall expire.
(iv) In the event this Agreement is terminated
without cause by the executive, any stock options not vested will be terminated,
and any stock options vested but not then exercised may be exercised by
Executive within thirty (30) days from the date of termination at which time all
such options shall expire.
11. DEATH OR DISABILITY. In the event of Executive's death,
Employer shall pay to Executive's designated beneficiary, or, if Executive has
failed to designate a beneficiary, to his estate, an amount equal to Executive's
base salary pursuant to Section 3 hereof through the end of the month in which
Executive's death occurred. Such compensation shall be in lieu of any other
benefits provided hereunder, except that (i) in the event of a change in control
of the Company as defined herein, Executive's designated beneficiary or his
estate, as the case may be, shall be entitled to the benefits of Section 10(b)
hereof, and (ii) any benefit payable pursuant to Section 3 shall be prorated and
made available to Executive in respect of any period prior to his death. The
Bank may maintain insurance on its behalf to satisfy in whole or in part the
obligations of this Section 11.
In the event of Executive's disability, as hereinafter
defined, Employer shall pay to Executive the base salary then in effect through
the end of the month in which Executive became disabled. Executive shall be
deemed disabled if, by reason of physical or mental impairment, he is incapable
of performing his duties hereunder for a period of sixty (60) consecutive days.
Any dispute regarding the existence, the extent, or the continuance of
Executive's disability shall be
<PAGE> 6
resolved by the determination of a duly licensed and practicing physician
selected by and mutually agreeable to both the Board of Directors of the Bank
and Executive; provided, however, if Executive officially establishes his
eligibility to receive social security disability benefits or is deemed disabled
under the terms and conditions of any disability insurance policy carried on
Executive by the Company or the Bank, he shall be deemed to disabled as provided
herein without further proof. Executive shall make himself available for and
submit to such examinations by said physician as may be directed from time to
time by the physician. Failure to submit to any such examination shall
constitute a material breach of this Agreement.
12. NON-COMPETITION AND NON-SOLICITATION.
(a) Executive acknowledges that he has performed services
or will perform services hereunder which directly affect Employer's business.
Accordingly, the parties deem it necessary to enter into the protective
agreement set forth below, the terms and conditions of which have been
negotiated by and between the parties hereto.
(b) In the event of termination of employment under this
Agreement by action of Executive pursuant to 9(b)(ii) prior to the expiration of
the term of this Agreement, Executive agrees with Employer that through the
actual date of termination of the Agreement, and for a period of twelve (12)
months after such termination date, Executive shall not, without the prior
written consent of Employer, within a 35-mile radius of the headquarters of
Employer, either directly or indirectly, serve as an executive officer of any
bank, bank holding company or other financial institution.
(c) The covenants of Executive set forth in this Section
12 are separate and independent covenants for which valuable consideration has
been paid, the receipt, adequacy and sufficiency of which are acknowledged by
Executive, and have also been made by Executive to induce Employer to enter into
this Agreement. In the event that a court of competent jurisdiction finds that
Executive has violated the provisions of this Section 12, then, as partial
relief to Employer, all unexercised options granted to Executive pursuant to
Section 8 hereof shall immediately become null and void. Further, each of the
aforesaid covenants may be availed of or relied upon by Employer in any court of
competent jurisdiction, and shall form the basis of injunctive relief and
damages including expenses of litigation (including but not limited to
reasonable attorneys' fees) suffered by Employer arising out of any breach of
the aforesaid covenants by Executive. The covenants of Executive set forth in
this Section 12 are cumulative to each other and to all other covenants of
Executive in favor of Employer contained in this Agreement and shall survive the
termination of this Agreement for the purposes intended. Should any covenant,
term, or condition contained in this Section 12 become or be declared invalid or
unenforceable by a court of competent jurisdiction, then the parties may request
that such court judicially modify such unenforceable provision consistent with
the intent of this Section 12 so that it shall be enforceable as modified, and
in any event the invalidity of any provision of this Section 12 shall not affect
the validity of any other provision in this Section 12 or elsewhere in this
Agreement.
<PAGE> 7
13. NOTICES. Any notice required or desired to be given under this
Agreement shall be deemed given if in writing sent by certified mail to his
residence in the case of Executive, or to its principal office in the case of
Employer.
14. WAIVER OF BREACH. The waiver by Employer of a breach of any
provision of this Agreement by Executive shall not operate or be construed as a
waiver of any subsequent breach by Executive. No waiver shall be valid unless
in writing and signed by an authorized officer of Employer.
15. ASSIGNMENT. Executive acknowledges that the services to be
rendered by him are unique and personal. Accordingly, Executive may not assign
any of his rights or delegate any of his duties or obligations under this
Agreement. The rights and obligations of Executive under this Agreement shall
inure to the benefit of and shall be binding upon the successors and assigns of
Employer.
16. GOVERNING LAW. This Agreement shall be governed and construed
in accordance with the laws of the State of Florida.
17. ENTIRE AGREEMENT. This Agreement embodies the entire and final
agreement of the parties hereto on the subject matter stated in this Agreement.
It may not be changed orally but only by an agreement in writing signed by the
party against whom enforcement of any waiver, change, modification, extension,
or discharge is sought.
[SIGNATURES ON FOLLOWING PAGE]
<PAGE> 8
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
"BANK"
FIRST NATIONAL BANK OF NASSAU COUNTY
(PROPOSED)
By:/s/ Suellen Rodeffer Garner
-----------------------------------------
Suellen Rodeffer Garner, Chairman of the
Board
"COMPANY"
FIRST CAPITAL BANK HOLDING CORPORATION
By:/s/ Suellen Rodeffer Garner
-----------------------------------------
Suellen Rodeffer Garner, Chairman of the
Board
"EXECUTIVE"
/s/ Michael G. Sanchez (LS)
-----------------------------------------
Michael G. Sanchez
<PAGE> 1
EXHIBIT 10.3
FIRST CAPITAL BANK HOLDING CORPORATION
1998 INCENTIVE STOCK OPTION PLAN
EFFECTIVE AS OF NOVEMBER 11, 1998
1. PURPOSE
The primary purpose of the First Capital Bank Holding Corporation 1998
Stock Option Plan (the "Plan") is to encourage and enable eligible officers and
key employees of First Capital Bank Holding Corporation (the "Company") and its
subsidiaries to acquire proprietary interests in the Company through the
ownership of Common Stock of the Company. The Company believes that officers and
key employees who participate in the Plan will have a closer identification with
the Company by virtue of their ability as shareholders to participate in the
Company's growth and earnings. The Plan also is designed to provide motivation
for participating officers and key employees to remain in the employ of and to
give greater effort on behalf of the Company. It is the intention of the Company
that the Plan provide for the award of "incentive stock options" qualified under
Section 422 of the Internal Revenue Code of 1986, as amended (the "Code") and
the regulations promulgated thereunder, as well as the award of non-qualified
stock options. Accordingly, the provisions of the Plan related to incentive
stock options shall be construed so as to extend and limit participation in a
manner consistent with the requirements of Section 422 of the Code.
2. DEFINITIONS
The following words or terms shall have the following meanings:
(a) "Agreement" shall mean a stock option agreement between the
Company and an Eligible Employee pursuant to the terms of the Plan.
(b) "Board of Directors" shall mean the Board of Directors of the
Company.
(c) "Committee" shall mean the committee appointed by the Board of
Directors to administer the Plan, if any, as set forth in Section 5 of the Plan.
(d) "Company" shall mean First Capital Bank Holding Corporation, a
Florida corporation.
(e) "Eligible Employee(s)" shall mean key employees regularly
employed by the Company or a Subsidiary (including officers, whether or not they
are directors) as the Board of Directors or the Committee shall select from time
to time.
<PAGE> 2
(f) "Market Price" shall mean the closing price of the Company's
Common Stock on the date in question, as quoted by the Nasdaq National Market or
the Nasdaq SmallCap Market (or other nationally recognized quotation service).
If the Company's Common Stock is not traded on the Nasdaq Stock Market but is
registered on a national securities exchange, "Market Price" shall mean the
closing sales price of the Company's Common Stock on such national securities
exchange. If the Company's shares of Common Stock are not traded on a national
securities exchange or through any other nationally recognized quotation
service, then "Market Price" shall mean the fair market value of the Company's
Common Stock as determined by the Board of Directors or the Committee, acting in
good faith, under any method consistent with the Code, or Treasury Regulations
thereunder, as the Board of Directors or the Committee shall in its discretion
select and apply at the time of the grant of the option concerned. Subject to
the foregoing, the Board of Directors or the Committee, in fixing the market
price, shall have full authority and discretion and be fully protected in doing
so.
(g) "Optionee" shall mean an Eligible Employee having a right to
purchase Common Stock under an Agreement.
(h) "Option(s)" shall mean the right or rights granted to Eligible
Employees to purchase Common Stock under the Plan.
(i) "Plan" shall mean this First Capital Bank Holding Corporation
1998 Incentive Stock Option Plan.
(j) "Shares," "Stock," or "Common Stock" shall mean shares of the
$.01 par value common stock of the Company.
(k) "Subsidiary" or "Subsidiaries" shall mean any corporation(s),
if the Company owns or controls, directly or indirectly, more than a majority of
the voting stock of such corporation(s).
(l) "Ten Percent Owner" shall mean an individual who, at the time
an Option is granted, owns directly or indirectly more than ten percent (10%) of
the total combined voting power of all classes of stock of the Company or a
Subsidiary.
3. EFFECTIVE DATE
The effective date of the Plan (the "Effective Date") shall be the date
the Plan is adopted by the Board of Directors, or the date the Plan is approved
by the shareholders of the Company, whichever is earliest. The Plan must be
approved by the affirmative vote of not less than a majority of the shares
present and voting at a meeting at which a quorum is present, which shareholder
vote must be taken within twelve (12) months after the date the Plan is adopted
by the Board of Directors. Such shareholder vote shall not alter the Effective
Date of the Plan. In the event shareholder
<PAGE> 3
approval of the adoption of the Plan is not obtained within the aforesaid twelve
(12) month period, then any Options granted in the intervening period shall be
void.
4. SHARES RESERVED FOR PLAN
The shares of the Company's Common Stock to be sold to Eligible
Employees under the Plan may at the election of the Board of Directors be either
treasury shares or Shares originally issued for such purpose. The maximum number
of Shares which shall be reserved and made available for sale under the Plan
shall be One Hundred Thousand (100,000); provided, however, that such Shares
shall be subject to the adjustments provided in Section 8(h). Any Shares subject
to an Option which for any reason expires or is terminated unexercised may again
be subject to an Option under the Plan.
5. ADMINISTRATION OF THE PLAN
The Plan shall be administered by the Board of Directors or the
Committee. The Committee shall be comprised of not less than two (2) members
appointed by the Board of Directors of the Company from among its members, each
of whom qualifies as a "Non-Employee Director" as such term is defined in Rule
16b-3 under the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), or any successor regulation.
Within the limitations described herein, the Board of Directors of the
Company or the Committee shall administer the Plan, select the Eligible
Employees to whom Options will be granted, determine the number of shares to be
optioned to each Eligible Employee and interpret, construe and implement the
provisions of the Plan. The Board of Directors or the Committee shall also
determine the price to be paid for the Shares upon exercise of each Option, the
period within which each Option may be exercised, and the terms and conditions
of each Option granted pursuant to the Plan. The Board of Directors and
Committee members shall be reimbursed for out-of-pocket expenses reasonably
incurred in the administration of the Plan.
If the Plan is administered by the Board of Directors, a majority of
the members of the Board of Directors shall constitute a quorum, and the act of
a majority of the members of the Board of Directors present at any meeting at
which a quorum is present, or acts approved in writing by all members of the
Board of Directors shall be the acts of the Board of Directors. If the Plan is
administered by the Committee, a majority of the members of the Committee shall
constitute a quorum, and the acts of a majority of the members present at any
meeting at which a quorum is present, or acts approved in writing by all of the
members of the Committee shall be the acts of the Committee.
6. ELIGIBILITY
Options granted pursuant to Section 8 shall be granted only to Eligible
Employees.
<PAGE> 4
7. DURATION OF THE PLAN
The Plan shall remain in effect until all Shares subject to or which
may become subject to the Plan shall have been purchased pursuant to Options
granted under the Plan; provided that Options under the Plan must be granted
within ten (10) years from the Effective Date. The Plan shall expire on the
tenth anniversary of the Effective Date.
8. QUALIFIED INCENTIVE OPTIONS
It is intended that Options granted under this Section 8 shall be
qualified incentive stock options under the provisions of Section 422 of the
Code and the regulations thereunder or corresponding provisions of subsequent
revenue laws and regulations in effect at the time such Options are granted.
Such Options shall be evidenced by stock option agreements in such form and not
inconsistent with this Plan as the Committee or the Board of Directors shall
approve from time to time, which Agreements shall contain in substance the
following terms and conditions:
(d) Price. The purchase price for shares purchased upon
exercise will be equal to 100% of the Market Price on the day the Option is
granted; provided that the purchase price of stock deliverable upon the exercise
of a qualified incentive stock option granted to a Ten Percent Owner under this
Section 8 shall be not less than one hundred ten percent (110%) of the Market
Price on the day the Option is granted, as determined by the Board of Directors
or the Committee, but in no case less than the par value of such stock.
(e) Number of Shares. The Agreement shall specify the
number of Shares which the Optionee may purchase under such Option, as
determined by the Board of Directors or the Committee.
(f) Exercise of Options. The shares subject to the Option
may be purchased in whole or in part by the Optionee in accordance with the
terms of the Agreement from time to time after shareholder approval of the Plan,
as determined by the Board of Directors or the Committee, but in no event later
than ten (10) years from the date of grant of the Option. Notwithstanding the
foregoing, Shares subject to an Option which is a qualified incentive stock
option granted to a Ten Percent Owner under this Section 8 may be purchased from
time to time but in no event later than five (5) years from the date of grant of
the Option.
(g) Medium and Time of Payment. Stock purchased pursuant
to an Agreement shall be paid for in full at the time of purchase. Payment of
the purchase price shall be in cash or, in lieu of payment of all or part of the
purchase price in cash, the Optionee may surrender to the Company shares of the
common stock of the Company valued at the Market Price on the date of exercise
of the Option in accordance with the terms of the Agreement. Upon receipt of
payment, the Company shall, without transfer or issue tax, deliver to the
Optionee (or other person entitled to exercise the Option) a certificate or
certificates for such Shares.
<PAGE> 5
(h) Rights as a Shareholder. An Optionee shall have no
rights as a shareholder with respect to any Shares covered by an Option until
the date of issuance of the stock certificate to the Optionee for such Shares.
Except as otherwise expressly provided in the Plan, no adjustments shall be made
for dividends (ordinary or extraordinary, whether in cash, securities or other
property) or distributions or other rights for which the record date is prior to
the date such stock certificate is issued.
(i) Non-assignability of Option. No Option shall be
assignable or transferable by the Optionee except by will, by the laws of
descent and distribution, or pursuant to the terms of a "qualified domestic
relations order" (within the meaning of Section 414(p) of the Code and the
regulations and rulings thereunder). Accordingly, unless transferred pursuant to
the terms of a "qualified domestic relations order," the Option shall be
exercisable only by Optionee during his or her lifetime.
(j) Effect of Termination of Employment or Death. In the
event that an Optionee during his or her lifetime ceases to be an employee of
the Company or of any Subsidiary of the Company for any reason (including
retirement) other than death or permanent and total disability, any Option or
unexercised portion thereof which was otherwise exercisable on the date of
termination of employment shall expire unless exercised within a period of three
(3) months from the date on which the Optionee ceased to be an employee, but in
no event after the term provided in the Optionee's Agreement. In the event that
an Optionee ceases to be an employee of the Company or of any Subsidiary of the
Company for any reason (including retirement) other than death or permanent and
total disability prior to the time that an Option or portion thereof becomes
exercisable, such Option or portion thereof which is not then exercisable shall
terminate and be null and void. Whether authorized leave of absence for military
or government service shall constitute termination of employment for the purpose
of this Plan shall be determined by the Board of Directors or the Committee,
which determination shall be final and conclusive.
In the event that an Optionee during his or her lifetime ceases to be
an employee of the Company or any Subsidiary of the Company by reason of death
or permanent and total disability, any Option or unexercised portion thereof
which was otherwise exercisable on the date such Optionee ceased employment
shall expire unless exercised within a period of one (1) year from the date on
which the Optionee ceased to be an employee, but in no event after the term
provided in the Optionee's Agreement. In the event that an Optionee during his
or her lifetime ceases to be an employee of the Company or any Subsidiary of the
Company by reason of death or permanent and total disability, any Option or
portion thereof which was not exercisable on the date such Optionee ceased
employment may, in the discretion of the Board of Directors or the Committee, be
accelerated and become immediately exercisable for a period of one (1) year from
the date on which the Optionee ceased to be an employee, but in no event shall
the exercise period extend past the term provided in the Optionee's Agreement.
<PAGE> 6
"Permanent and total disability" as used in this Plan shall be as
defined in Section 22(e)(3) of the Code.
In the event of the death of an Optionee, the Option shall be
exercisable by his or her personal representatives, heirs or legatees, as
provided herein.
(k) Recapitalization. In the event that dividends are
payable in Common Stock of the Company or in the event there are splits,
subdivisions or combinations of shares of Common Stock of the Company, the
number of Shares available under the Plan shall be increased or decreased
proportionately, as the case may be, and the number and Option exercise price of
Shares deliverable upon the exercise thereafter of any Option theretofore
granted shall be increased or decreased proportionately, as the case may be, as
determined to be proper and appropriate by the Board of Directors or the
Committee.
(l) Reorganization. In case the Company is merged or
consolidated with another corporation and the Company is not the surviving
corporation, or in case the property or stock of the Company is acquired by
another corporation, or in case of a separation, reorganization,
recapitalization or liquidation of the Company, the Board of Directors of the
Company, or the Board of Directors of any corporation assuming the obligations
of the Company hereunder, shall either (i) make appropriate provision for the
protection of any outstanding Options by the substitution on an equitable basis
of appropriate stock of the Company, or of the merged, consolidated or otherwise
reorganized corporation which will be issuable in respect to the shares of
Common Stock of the Company, provided only that the excess of the aggregate fair
market value of the Shares subject to option immediately after such substitution
over the purchase price thereof is not more than the excess of the aggregate
fair market value of the Shares subject to option immediately before such
substitution over the purchase price thereof, or (ii) upon written notice to the
Optionee provide that the Option (including, in the discretion of the Board of
Directors, any portion of such Option which is not then exercisable) must be
exercised within sixty (60) days of the date of such notice or it will be
terminated. If any adjustment under this Section 8(i) would create a fractional
share of Stock or a right to acquire a fractional share, such shall be
disregarded and the number of shares of Stock available under the Plan and the
number of Shares covered under any Options previously granted pursuant to the
Plan shall be the next lower number of shares of Stock, rounding all fractions
downward. An adjustment made under this Section 8(i) by the Board of Directors
shall be conclusive and binding on all affected persons.
Except as otherwise expressly provided in this Plan, the Optionee shall
have no rights by reason of any subdivision or consolidation of shares of stock
of any class, or the payment of any stock dividend or any other increase or
decrease in the number of shares of stock of any class, or by reason of any
dissolution, liquidation, merger, or consolidation or spin-off of assets or
stock of another corporation; and any issue by the Company of shares of stock of
any class, or securities convertible into shares of stock of any class, shall
not affect, and no adjustment by reason thereof shall be made with respect to,
the number or prices of shares of Common Stock subject to an Option.
<PAGE> 7
The grant of an Option pursuant to the Plan shall not affect in any way
the right or power of the Company to make adjustments, reclassifications,
reorganizations or changes of its capital or business structure or to merge or
to consolidate or to dissolve, liquidate or sell, or transfer all or any part of
its business or assets.
(m) Annual Limitation. The aggregate fair market value
(determined at the time the Option is granted) of the shares with respect to
which incentive stock options are exercisable for the first time by an Optionee
during any calendar year (under all incentive stock option plans of the Company
and its Subsidiaries) shall not exceed $100,000. Any excess over such amount
shall be deemed to be related to and part of a non-qualified stock option
granted pursuant to Section IX.
(n) General Restriction. Each Option shall be subject to
the requirement that if at any time the Board of Directors shall determine, in
its reasonable discretion, that the listing, registration or qualification of
the Shares subject to such Option upon any securities exchange or under any
state or federal law, or the consent or approval of any government regulatory
body, is necessary or desirable as a condition of, or in connection with, the
granting of such Option or the issue or purchase of Shares thereunder, such
Option may not be exercised in whole or in part unless such listing,
registration, qualification, consent or approval shall have been effected or
obtained free of any conditions not acceptable to the Board of Directors.
Alternatively, such Options shall be issued and exercisable only upon such terms
and conditions and with such restrictions as shall be necessary or appropriate
to effect exemption from such listing, registration, or other qualification
requirement.
9. NON-QUALIFIED OPTIONS
The Board of Directors or the Committee may grant to Eligible Employees
Options under the Plan which are not qualified incentive stock options under the
provisions of Section 422 of the Code. Such non-qualified options shall be
evidenced by Agreements in such form and not inconsistent with this Plan as the
Board of Directors or the Committee shall approve from time to time, which
Agreements shall contain in substance the same terms and conditions as set forth
in Section 8 hereof with respect to qualified incentive stock options; provided,
however, that:
(i) the limitations set forth in Sections 8(a) and 8(c)
with respect to Ten Percent Owners shall not be applicable to non-qualified
options granted to any Ten Percent Owner;
(ii) the limitations set forth in Section 8(g) with
respect to termination of employment or death shall not be applicable to
non-qualified option grants, and any such limitations shall be determined on a
case by case basis by the Board of Directors or the Committee at the time of the
non-qualified option grant;
(iii) the limitation set forth in Section 8(j) with respect
to the annual limitation of incentive stock options shall not be applicable to
non-qualified option grants; and
<PAGE> 8
(iv) non-qualified options may be granted at a purchase
price equal to not less than 75% of the Market Price on the day the Option is
granted.
10. AMENDMENT OF THE PLAN
The Plan may at any time or from time to time be terminated, modified or
amended by the affirmative vote of not less than a majority of the shares
present and voting thereon by the Company's shareholders at a meeting of the
shareholders at which a quorum is present. The Board of Directors may at any
time and from time to time modify or amend the Plan in any respect, except that
without shareholder approval the Board of Directors may not (1) increase the
maximum number of Shares for which Options may be granted under the Plan (other
than increases due to changes in capitalization as referred to in Section 8(h)
hereof), or (2) change the class of persons eligible for qualified incentive
options. The termination or any modification or amendment of the Plan shall not,
without the written consent of an Optionee, affect his or her rights under an
Option or right previously granted to him or her. With the written consent of
the Optionee affected, the Board of Directors or the Committee may amend
outstanding option agreements in a manner not inconsistent with the Plan.
Without employee consent, the Board of Directors may at any time and from time
to time modify or amend outstanding option agreements in such respects as it
shall deem necessary in order that incentive options granted hereunder shall
comply with the appropriate provisions of the Code and regulations thereunder
which are in effect from time to time respecting "Qualified Incentive Options."
The Company's Board of Directors may also suspend the granting of Options
pursuant to the Plan at any time and may terminate the Plan at any time;
provided, however, no such suspension or termination shall modify or amend any
Option granted before such suspension or termination unless (1) the affected
participant consents in writing to such modification or amendment or (2) there
is a dissolution or liquidation of the Company.
11. BINDING EFFECT
All decisions of the Board of Directors or the Committee involving the
implementation, administration or operation of the Plan or any offering under
the Plan shall be binding on the Company and on all persons eligible or who
become eligible to participate in the Plan.
12. APPLICATION OF FUNDS
The proceeds received by the Company from the sale of Common Stock
pursuant to Options exercised hereunder will be used for general corporate
purposes.
<PAGE> 1
EXHIBIT 10.4
NEITHER THIS WARRANT, NOR THE SHARES OF COMMON STOCK FOR WHICH IT IS
EXERCISABLE, HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AND NO
TRANSFER OR ASSIGNMENT OF THIS WARRANT OR THE SHARES ISSUABLE UPON ITS EXERCISE
MAY BE MADE IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT
OR THE AVAILABILITY OF AN EXEMPTION FROM THE REGISTRATION PROVISIONS OF SUCH ACT
IN RESPECT OF SUCH TRANSFER OR ASSIGNMENT.
DATED: ___________, 1999
No. ____
_____ Shares
FIRST CAPITAL BANK HOLDING CORPORATION
STOCK PURCHASE WARRANT
TO PURCHASE SHARES OF COMMON STOCK, $.01 PAR VALUE
This is to certify that, for value received, _________________
("Holder" or "Warrant Holder"), or its or his successors, is entitled, upon the
due exercise hereof at any time, subject to Section 3 hereof, during the period
commencing on the date on which First National Bank of Nassau County (the
"Bank") opens for business (the "Commencement Date") and terminating at 5:00
p.m., Atlanta, Georgia local time, on the fifth anniversary of the Commencement
Date, unless earlier terminated as provided in Section 2 hereunder (the
"Termination Date"), to purchase _____ shares (subject to adjustment as provided
herein) of the $.01 par value Common Stock of First Capital Bank Holding
Corporation (the "Company") at a price per share as specified in Section 2 of
this Warrant and to exercise the other rights, powers and privileges hereinafter
provided, all on the terms and subject to the conditions specified herein.
Section 1. Certain Definitions. Unless the context otherwise
requires, the following terms as used in this Warrant shall have the following
meanings:
(a) "Average Market Value" shall mean the average of the
Closing Prices for the Common Stock for the five trading days
immediately preceding the date of determination.
(b) "Bank" shall mean First National Bank of Nassau County, a
national banking association (in organization) and a
wholly-owned subsidiary of the Company.
(c) "Closing Price" shall mean:
(i) if the primary market for the Common Stock is a national
securities exchange, the NASDAQ Stock Market, or other market
or quotation system in which last sale transactions are
reported on a contemporaneous basis, the last reported sales
price, regular way, of such security on such exchange or in
such quotation system for such trading day, or, if there shall
not have been a sale on such exchange or reported through such
system on such trading day, the closing or last bid quotations
therefor on such exchange or quotation system on such trading
day;
<PAGE> 2
FIRST CAPITAL BANK HOLDING CORPORATION
STOCK PURCHASE WARRANT
DATED ___________, 1999
(ii) if the primary market for the Common Stock is not a national
securities exchange or quotation system in which last sale
transactions are contemporaneously reported, the last bid
quotation in the over-the-counter market on such trading day
as reported by the National Association of Securities Dealers
through NASDAQ, its automated system for reporting quotations,
or its successor or such other generally accepted source of
publicly reported bid quotations as the Company may reasonably
designate; or
(iii) if the Closing Price cannot be ascertained by any of the
methods set forth in the immediately preceding paragraphs (i)
and (ii), such Closing Price shall be deemed to be the amount
equal to a quotient determined by dividing the Fair Market
Value by the number of shares (including any fractional
shares) of Common Stock then outstanding.
(d) "Commencement Date" shall mean the date that the Bank opens for
business.
(e) "Common Stock" shall mean the Company's $.01 par value common
stock, any security into which such common stock shall have been
changed or any security resulting from reclassification of such
common stock.
(f) "Company" shall mean First Capital Bank Holding Corporation, a
Florida corporation, and its successors and assigns.
(g) "Exercise Date" shall mean the date on which the Company shall
have received from the Holder all deliveries required by Section 3
of this Warrant.
(h) "Exercise Price" shall mean the price per share of Common Stock
specified in Section 2 hereof, as the same shall be adjusted from
time to time pursuant to the provisions of this Warrant.
(i) "Fair Market Value" shall mean the price, as determined by a
written appraisal prepared by an appraiser acceptable to the
Company, that would be paid by the most likely hypothetical buyer
in a single transaction, for 100% of the equity capital of the
Company on a going-concern basis. The Company shall pay for the
cost of any such appraisal.
(j) "Initial Public Offering" shall mean the initial public offering of
Common Stock by the Company, pursuant to an effective registration
statement on Form SB-2 filed with the United States Securities and
Exchange Commission under the Securities Act of 1933, as amended,
which initial public offering is anticipated to occur and close no
later than December 31, 1999.
Section 2. Exercise Price; Termination. Subject to the adjustments
provided for in this Warrant, the exercise price per share (the "Exercise
Price") shall be equal to $10.00. In the event that the Company does not close
the Initial Public Offering on or before 5:00 p.m., Atlanta, Georgia local
time, on December 31, 1999, then this Warrant and the rights hereunder shall
immediately terminate, shall become null and void and shall be of no further
force or effect.
<PAGE> 3
FIRST CAPITAL BANK HOLDING CORPORATION
STOCK PURCHASE WARRANT
DATED ___________, 1999
Section 3. Exercise of Warrant. The Holder of this Warrant may, at
any time on or after the Commencement Date but prior to the Termination Date,
exercise this Warrant in whole at any time or in part from time to time for the
number of shares which such Holder is then entitled to purchase hereunder.
The Holder may exercise its rights under this Warrant only as follows:
(i) no part of the Warrant may be exercised prior to the
Commencement Date;
(ii) beginning on the Commencement Date, this Warrant may be
exercised with respect to a maximum of _______ of the shares of
Common Stock subject to this Warrant;
(iii) beginning on the first anniversary of the Commencement Date,
this Warrant may be exercised with respect to an additional
______ of the shares of Common Stock subject to this Warrant;
(iv) beginning on the second anniversary of the Commencement Date,
this Warrant may be exercised with respect to an additional
______ of the shares of Common Stock subject to this Warrant;
(v) beginning on the third anniversary of the Commencement Date,
this Warrant may be exercised with respect to an additional
_____ of the shares of Common Stock subject to this Warrant;
and
(vi) beginning on the fourth anniversary of the Commencement Date,
this Warrant may be exercised with respect to an additional
______ of the shares of Common Stock subject to this Warrant.
The Holder may exercise this Warrant, in whole or in part, by
delivering to the Company at its offices maintained pursuant to Section 4 for
such purpose (i) a written notice of such Holder's election to exercise this
Warrant, which notice shall specify the number of shares to be purchased, (ii)
this Warrant, and (iii) a sum equal to the Exercise Price therefor in cash
(U.S. dollars) or by certified or cashier's check.
Such notice may be in the form of an election to subscribe attached
hereto. Upon delivery thereof, the Company shall, as promptly as practicable
and in any event within ten (10) business days thereafter, cause to be executed
and delivered to such Holder a certificate or certificates representing the
aggregate number of shares of Common Stock issuable upon such exercise.
The certificate or certificates for shares of Common Stock so
delivered shall be in such denominations as may be specified in said notice and
shall be registered in the name of such Holder or such other name or names as
shall be designated in said notice. Such certificate or certificates shall be
deemed to have been issued and the person designated to be named in such
certificate shall be deemed to have become a holder of record of such shares,
and to have become entitled, to the extent permitted by law, to the right to
vote such shares or to consent or receive notice as a stockholder, as of the
Exercise Date. If this Warrant shall have been exercised only in part, the
Company shall, at the time of delivery of said certificate or certificates,
deliver to such Holder a new warrant dated the date it is issued, evidencing the
rights of such Holder to purchase the remaining shares of Common Stock issuable
pursuant to this Warrant, which new
<PAGE> 4
FIRST CAPITAL BANK HOLDING CORPORATION
STOCK PURCHASE WARRANT
DATED ___________, 1999
warrant shall in all other respects be identical with this Warrant, or, at the
request of such Holder, appropriate notation may be made on this Warrant and
the Warrant returned to such Holder.
The Company shall pay all expenses, transfer taxes and other charges
payable in connection with the preparation, issuance and delivery of stock
certificates under this Section 3, except that, in the event such stock
certificates are to be registered in a name or names other than the name of the
Holder, funds sufficient to pay all stock transfer and any other applicable
taxes payable upon the issuance of such certificates shall be paid by the
Holder not later than the Exercise Date.
Section 4. Warrant Registration. At all times while any portion of
this Warrant remains outstanding and exercisable the Company shall keep and
maintain at its principal offices a register in which the ownership and any
exchange of this Warrant shall be recorded. The Company shall not at any time,
except upon the dissolution, liquidation or winding up of the Company, close
such register so as to result in the prevention or delay of the proper exercise
of this Warrant.
Section 5. Transferability. This Warrant and all rights hereunder
shall not be transferable by the Holder except by operation of law. The Company
may deem and treat the registered Holder as the absolute owner of this Warrant
for all purposes and shall not be affected by any notice to the contrary.
Section 6. Exchange. This Warrant is exchangeable, upon the
surrender hereof by the Holder at the offices of the Company, for a new warrant
or warrants, in such denominations as Holder shall designate at the time of
surrender for exchange, of like tenor and date, representing in the aggregate
the right to subscribe for and purchase the number of shares which may be
subscribed for and purchased hereunder, each of such new warrants to represent
the right to subscribe for and purchase not less than 1000 shares of Common
Stock (except to the extent necessary to reflect the balance of the number of
shares purchasable hereunder).
Section 7. Representations and Covenants of Issuer.
(a) The Company hereby represents to the Holder as follows:
(i) The Company is a corporation duly organized and validly
existing and in good standing under the laws of the State
of Florida.
(ii) The Company has the corporate power and authority to
execute and deliver this Warrant and to perform the terms
hereof, including the issuance of shares of Common Stock
issuable upon exercise hereof. The Company has taken all
action necessary to authorize the execution, delivery and
performance of this Warrant and the issuance of the
shares of Common Stock issuable upon exercise hereof.
This Warrant has been duly authorized and executed by the
Company and constitutes the legal, valid and binding
obligation of the Company, enforceable against the
Company in accordance with its terms, except as such
enforcement may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws or equitable
principles relating to or limiting creditors' rights
generally.
<PAGE> 5
FIRST CAPITAL BANK HOLDING CORPORATION
STOCK PURCHASE WARRANT
DATED ___________, 1999
(b) The Company covenants and agrees that all shares of Common
Stock which may be issued upon the exercise of this Warrant
will, upon issuance, be fully paid and nonassessable and free
from all taxes, liens and charges (other than taxes in respect
of any transfer occurring contemporaneously with such
issuance).
Section 8. Adjustments to Exercise Price and Number of Shares
Purchasable. The Exercise Price and number of shares of Common Stock
purchasable pursuant to this Warrant shall be subject to adjustment from time
to time as follows:
(a) In the event the Company shall at any time exchange, as a
whole, by subdivision or combination in any manner or by the
making of a stock dividend, the number of shares of Common
Stock then outstanding into a different number of shares, with
or without par value, then thereafter the number of shares of
Common Stock which the Holder shall be entitled to purchase
pursuant to this Warrant (calculated immediately prior to such
change), shall be increased or decreased, as the case may be,
in direct proportion to the increase or decrease in the number
of shares of outstanding Common Stock of the Company by reason
of such change, and the Exercise Price after such change
shall, in the event of an increase in the number of shares of
Common Stock outstanding, be proportionately reduced, and, in
the event of a decrease in the number of shares of Common
Stock outstanding, be proportionately increased.
(b) In the event of any reclassification or change of outstanding
shares of Common Stock (other than a change in par value, or
from par value to no par value, or from no par value to par
value, or as a result of a subdivision, combination or stock
dividend as provided for in Section 8(a)), or in the event of
any consolidation of the Company with, or merger of the
Company into, another corporation, or in the event of any sale
of all or substantially all of the property, assets, business
and goodwill of the Company, the Company, or such successor or
purchasing corporation, as the case may be, shall provide that
the Holder of this Warrant shall thereafter be entitled to
purchase, by exercise of this Warrant, the kind and amount of
shares of stock and other securities and property receivable
upon such reclassification, change, consolidation, merger or
sale by a holder of the number of shares of Common Stock which
this Warrant entitles the Holder to purchase immediately prior
to such reclassification, change, consolidation, merger or
sale. Any such successor corporation thereafter shall be
substituted for the Company for purposes of this Warrant.
<PAGE> 6
FIRST CAPITAL BANK HOLDING CORPORATION
STOCK PURCHASE WARRANT
DATED ___________, 1999
Section 9. Holder's Rights. Except as otherwise expressly set forth
herein, this Warrant shall not entitle the Holder to any rights of a stockholder
of the Company, except that if the Company, during the period in which this
Warrant is exercisable, declares a dividend upon the Common Stock payable
otherwise than in cash out of earnings or earned surplus (computed in accordance
with generally accepted accounting principles) or otherwise than in Common Stock
or securities convertible into Common Stock, then the Holder, upon exercise of
this Warrant, shall receive the number of shares of Common Stock purchasable
upon such exercise and, in addition and without further payment, the cash, stock
or other securities or property which the Holder would have received by way of
dividends or other distribution if, continuously since the date hereof, such
Holder (a) had been the record holder of the number of shares of Common Stock
then being purchased, and (b) had retained all such cash, stock and other
securities (other than Common Stock or securities convertible into Common Stock)
and/or other property payable in respect of such Common Stock or in respect of
any stock or securities paid as dividends and originating directly or indirectly
from such Common Stock.
Section 10. Notices. If there shall be any adjustment as provided in
Section 8 hereof, or if securities or property other than shares of Common Stock
of the Company shall become purchasable in lieu of shares of Common Stock upon
exercise of this Warrant, the Company shall forthwith cause written notice
thereof to be sent by registered mail, postage prepaid, to the registered Holder
of this Warrant at the address of such Holder shown on the books of the Company,
which notice shall be accompanied by an explanation setting forth in reasonable
detail the basis for the Holder's becoming entitled to purchase such shares and
the number of shares which may be purchased and the exercise price thereof, or
the facts requiring any such adjustment and the exercise price and number of
shares purchasable subsequent to such adjustment, or the kind and amount of any
such securities or property so purchasable upon the exercise of this Warrant, as
the case may be. At the request of the Holder and upon surrender of this
Warrant, the Company shall reissue this Warrant in a form conforming to such
adjustments.
Section 11. Cash in Lieu of Fractional Shares. The Company shall not
be required to issue fractional shares upon the exercise of this Warrant. If, by
reason of any change made pursuant to Sections 8 or 9 hereof, the Holder of this
Warrant would be entitled, upon the exercise of any rights evidenced hereby, to
receive a fractional share, the Company shall, upon such exercise, pay to the
Holder an amount in cash equal to the Average Market Value of such fractional
interest, determined as of the Exercise Date.
Section 12. Forfeiture. If at any time while this Warrant is
outstanding, the Board of Governors of the Federal Reserve System makes a formal
capital call upon the Company or the Comptroller of the Currency makes a formal
capital call upon the Bank, the Holder will exercise this Warrant in whole or in
part as may be needed for additional required capital, or the Warrant shall be
forfeited. The number of shares of Common Stock as to which the Warrant shall be
exercised by each Holder to meet the capital call will be calculated pro rata on
the basis of the number of shares of Common Stock subject to a Warrant held by
each Holder. The exercise price for shares of Common Stock purchased upon such
exercise will be equal to the greater of the Exercise Price determined pursuant
to Section 2 hereof and the then-current book value per share of Common Stock of
the Company. Any portion of this Warrant not required to be exercised under the
terms of any such capital call may be exercised under the original terms of this
Warrant.
<PAGE> 7
FIRST CAPITAL BANK HOLDING CORPORATION
STOCK PURCHASE WARRANT
DATED ___________, 1999
Section 13. Lost, Stolen, Mutilated, or Destroyed Warrants. If this
Warrant shall become lost, stolen, mutilated, or destroyed, the Company shall,
on such terms as to indemnity or otherwise as it may in its reasonable
discretion impose upon the registered Holder hereof (as shown on the register of
Warrants maintained by the Company), issue a new warrant of like denomination,
tenor, and date as the Warrant so lost, stolen, mutilated, or destroyed.
Section 14. Limitation of Liability. No provision hereof, in the
absence of affirmative action by the Holder hereof to purchase shares of Common
Stock, and no enumeration herein of the rights or privileges of the Holder,
shall give rise to any liability of such Holder for the purchase price of the
shares or as a stockholder of the Company, whether such liability is asserted by
the Company or by creditors of the Company.
Section 15. Applicable Law. The validity, interpretation, and
performance of this Warrant shall be governed by the laws of the State of
Florida.
Section 16. Successors and Assigns. This Warrant and the rights
evidenced hereby shall inure to the benefit of and be binding upon the
successors and permitted assigns of the Company and the Holder hereof.
Section 17. Headings. Headings of the paragraphs in this Warrant are
for convenience of reference only and shall not, for any purpose, be deemed a
part of this Warrant.
IN WITNESS WHEREOF, the Company has caused this Warrant to be executed
this ___ day of ________, 1999, by its duly authorized officers.
FIRST CAPITAL BANK HOLDING CORPORATION
By:
-----------------------------------
Name:
Title:
ATTEST:
- -----------------------------------
Name:
Title:
<PAGE> 8
EXHIBIT A
[Subscription Form to Be Executed Upon Exercise of Warrant]
The undersigned registered holder or permitted assignee of such
registered holder of the within Warrant hereby (1) subscribes for ______ Shares
which the undersigned is entitled to purchase under the terms of the within
Warrant, (2) makes the full cash payment therefor called for by the within
Warrant, and (3) directs that the shares issuable upon exercise of said Warrant
be issued as follows:
--------------------------------------
(Name)
--------------------------------------
(Address)
Signature
-----------------------------
Dated
------------------------
NOTICE: The signature on this subscription form must correspond with the name
as written upon the face of the within Warrant in every particular, without
alteration or enlargement, or any change whatsoever, and must be guaranteed by
a bank, other than a savings bank or trust company, or by a firm having
membership on a registered national securities exchange.
<PAGE> 1
EXHIBIT 23.2
CONSENT OF INDEPENDENT AUDITOR
We have issued our report dated December 2, 1998, accompanying the financial
statements of First Capital Bank Holding Corporation contained in the Form SB-2
Registration Statement and Prospectus. We consent to the use of the
aforementioned report in the Registration Statement and Prospectus, and to the
use of our name as it appears under the caption "Experts."
Atlanta, Georgia /s/ PORTER KEADLE MOORE, LLP
December 30, 1998
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<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JUL-29-1998
<PERIOD-END> OCT-31-1998
<CASH> 3,766
<INT-BEARING-DEPOSITS> 0
<FED-FUNDS-SOLD> 0
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 0
<INVESTMENTS-CARRYING> 0
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<LOANS> 0
<ALLOWANCE> 0
<TOTAL-ASSETS> 305,875
<DEPOSITS> 0
<SHORT-TERM> 430,678
<LIABILITIES-OTHER> 9,772
<LONG-TERM> 0
0
0
<COMMON> 0
<OTHER-SE> (134,575)
<TOTAL-LIABILITIES-AND-EQUITY> 305,875
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<EXPENSE-OTHER> 134,575
<INCOME-PRETAX> (134,575)
<INCOME-PRE-EXTRAORDINARY> (134,575)
<EXTRAORDINARY> 0
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<NET-INCOME> (134,575)
<EPS-PRIMARY> (.22)
<EPS-DILUTED> (.22)
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